Mrs Gurbakaksh Birk v Blackburn with Darwen Borough Council

Decision No. 381 REGISTERED HOMES TRIBUNAL This decision may be freely reproduced and distributed. It should be brought the attention of Registration and Inspection staff and legal advisors. ———————————————————————————————————— MRS GURBAKAKSH BIRK – Appellant V BLACKBURN WITH DARWEN BOROUGH COUNCIL – Respondent The Tribunal sitting at The County Hall, Preston, Lancashire on 17th and 18th June 1999 to hear an Appeal by Mrs Gurbakaksh Birk against the Decision of Blackburn with Darwen Borough Council to cancel the registration of the Appellant pursuant to Section 9(2) of the Registered Homes Act 1984 (as amended) Before: Miss Helen Clarke (Chairman)Miss Susan Gilhespie Mr Alan Kendall Representation For the Respondent: Keith Thomas, of Counsel, instructed by Miss Rosie Moon, Solicitor to the Legal Department, Blackburn with Darwen Borough Council. For the Appellant: Paul Spencer, of Counsel, instructed by Eatons, Solicitors WITNESSES For the Respondent: Mrs Maureen HindleMr Tony AldersonMr Philip John Taylor For the Appellant: Sukhdev Singh BirkMr Alexander Gow DECISION OF THE TRIBUNAL It is the unanimous decision of the Tribunal that the Appellant's Appeal shall be dismissed. The Respondent's decision to cancel the registration of Mrs Gurbakaksh Birk is upheld. BACKGROUND TO THE DISPUTE Mrs Birk was granted a Certificate of Registration on the 15th July 1993 for a small home at Flat 1, Clarence House, Clarence Street, Blackburn, for a maximum of three residents with learning disabilities. The flat itself formed part of a larger premises owned jointly by Mrs Birk and her husband Mr Sukhdev Singh Birk and at that time the remaining part of the building was being run as a registered care home for Mr Birk. On the 17th October 1996, both Mr and Mrs Birk were declared bankrupt at Blackburn County Court and a notice appeared in the local press on the 25th October 1996 confirming the bankruptcy order. The continuing financial difficulties experienced by Mr and Mrs Birk caused them to sell Clarence House, including Flat

1. The residents of the small home were moved to 42 Chester Street, Blackburn, in December 1997. Mr Birk was investigated at that time for financial irregularities involving a resident at Clarence House and subsequently found guilty of an offence on the 31st March 1999 and sentenced to twelve months in prison suspended for two years. On the 3rd March 1998 the Inspection Unit of the Respondent formally requested information about the ownership of 42 Chester Street, Blackburn, and in particular additional information about the financial status of Mrs Birk. The information furnished by Mrs Birk was not considered to be adequate by the Inspection Unit and the Inspection Unit had become increasingly concerned about Mrs Birk's financial status and her ability to deal with financial issues and status involving the home. On the 5th August 1998 the registration authority sent a letter to Mrs Birk giving notice under Section 12 of the Registered Home Act 1984 of the authority's intention to cancel Mrs Birk's registration on the grounds that she was not a fit person to be carrying on a Residential Care Home. In a letter to the Respondent dated 5th November 1998 Mrs Birk's Solicitors confirmed that Mrs Birk wished to waive her right to make representations at the special cases sub-committee due to held on 9th November 1998. On the 9th November 1998, a meeting of the policy sub-committee of the Respondent took place and decided to proceed with the cancellation of Mrs Birk's registration. On the 12th November 1998 formal notice of the decision to cancel the registration of Mrs Birk as a person in control of a small home was sent to her. Mrs Birk appealed the decision. APPLICATION FOR ADJOURNMENT The Tribunal was originally due to take place on 29th April but was adjourned following a request from Mrs Birk's Solicitors on the grounds of ill health of Mrs Birk (a medical certificate was provided). The Respondents raised no objection and the revised dates for the Tribunal of the 17th and 18th June 1999 were agreed. Preliminary point In his opening address Mr Thomas, based his argument around two issues:-

1. The overall financial status and ability of Mrs Birk to manage the home. As an undischarged bankrupt the effect was that she did not have the means to provide long term security and stability for the residents.

2. The Respondent's objection to Mr Birk's continued involvement in the home was based on the grounds that he was an undischarged bankrupt and had a criminal conviction involving theft from a former resident of a residential care home run by him. Furthermore, an undertaking dated 12th March 1998 had been given by Mrs Birk's Solicitors that her husband would not be involved in the running of the home and that that undertaking had been breached. The right to argue the second issue was challenged by Mr Spencer on the grounds that the Respondent's witness Mrs Susan Alderson (who had made a sworn statement verifying the breach of the undertaking) was not available to give evidence. Mr Thomas had acknowledged that there were discrepancies in the dates referred to in the sworn Affidavit of Mrs Alderson. Mr Thomas also conceded that correspondence that he had sought to introduce at the very beginning of the hearing from the Fire Department, and which might have indicated some active involvement by Mr Birk, pre-dated the undertaking of 12 May 1998 given by the Solicitor for the Appellant to the Registration Authority. The Tribunal retired to consider whether the second issue could be argued and following discussion with both Counsel it was agreed that the Respondent's case would proceed on the basis of the financial issues concerning the applicant and not on the issue of Mr Birk's breach of an undertaking. THE RESPONDENTS' CASE Mr Thomas on behalf of the Respondent argued that as an undischarged bankrupt Mrs Birk's financial situation remained precarious. Mrs Birk had failed to furnish the authority with detailed financial information which had been requested and as a result they remained unconvinced that she could provide the necessary skills and ability to provide the long term security required by the residents. Witnesses for the Respondents Mrs Maureen Hindle Mrs Hindle, who was the Inspection Officer responsible for both Clarence Road and Chester House, stated that she saw Mrs Birk on November 19th 1997 but Mrs Birk gave no indication at that point of any financial difficulties and she did not inform Mrs Hindle that she had been made bankrupt. On 13th February 1997 Mrs Hindle visited Mrs Birk at Chester Street and raised questions concerning who exactly owned the premises. She was asked whether there was a Lease. Mrs Birk at that point was unable to explain who owned the premises. Mrs Hindle said that she was concerned about the financial ability of Mrs Birk to run Chester Street and the long term security of the residents and it was for this reasons that the registration unit asked for further financial information from Mrs Birk in a letter dated 3rd March 1998. Mr Philip John Taylor Mr Taylor is a Solicitor and part of his responsibilities include advising the Arms Length Inspection Unit of the Social Services Directorate. Mr Taylor explained that he had been contacted by the Inspection Unit in July 1998 for advice about the financial stability of Mrs Birk. Mr Taylor considered that the letter dated 29th April 1998 from the Halifax Bank confirming that Mrs Birk had held an account with them for 15 years was not adequate proof that Mrs Birk was financially secure and should continue to operate a home registered under the Act. Mr Taylor then decided to contact Sarah Hodgson of Bregbies Traynor, who were acting as Receivers for Mr Birk. Mrs Hodgson confirmed that both Mr and Mrs Birk were undischarged bankrupts and that they had not been co-operative with the Receivers. Mr Taylor considered that by failing to disclose her bankruptcy when asked about her financial status and financial security Mrs Birk had tried to conceal information and that the concealment was a serious issue. Mr Tony Alderson Mr Alderson from the Local Authority Inspection Unit stated that he had spoken to Mrs Birk at least three times between November 1996 and February 1998 and Mrs Birk's bankruptcy had never been mentioned. Mr Alderson confirmed that Mr Birk did mention his own bankruptcy at a meeting on the 6th November 1996. Mr Thomas sought to establish that it was not the fact of Mrs Birk's bankruptcy but the effect of that which caused Mrs Birk to be deemed "unfit". Once the Registration Authority knew about the closure of Clarence House they were in effect "on notice" and that is why they requested the financial information set out in the letter dated the 3rd March 1998. The information provided by Mrs Birk was inadequate and as a result further investigations were made. The information disclosed by Mrs Birk's Trustees in Bankruptcy indicated a marked lack of co-operation on the part of Mrs Birk. At present Mrs Birk is operating the home with no proper bank account on a "cash only" basis. There are no proper business accounts, only draft accounts prepared without all the information. APPELLANT'S CASE Mr Spencer on behalf of the Appellant argued that notwithstanding the fact that Mrs Birk is an undischarged bankrupt she has managed to continue to run the home at a profit. Furthermore it was accepted by Mrs Birk that there had been difficulties and that she had failed to appreciate the need to provide financial information and that she did not appreciate the consequences of failure to do so. Witnesses for the Appellant The Appellant Mrs Birk confirmed that prior to her registration in July 1993 in respect of the attic flat at Clarence House, she has acted primarily as a care assistant. When she ran the small house at Clarence House she had relied on her husband to help with the paperwork and financial advice. She had also relied on him to tell the authority about her bankruptcy. Part way through Mrs Birk's evidence it was agreed that a legal assistant who was fluent in Punjabi would translate for Mrs Birk as she appeared to have difficulty in comprehending some of the questions raised by her own Counsel. Counsel for the Respondent raised no objection. Mrs Birk denied trying to mislead the authority about her financial situation. She thought that all that was required was confirmation that she had a building society bank account. Mr Birk Mr Birk claimed that both the bankruptcies were due to a debt of £41,000 owed to the Inland Revenue. Mr Birk stated that he had repaid £16,000 of the debt and fully anticipated being discharged from his bankruptcy. He confirmed that he had told the Local Authority very early on in November 1996 that he had been made bankrupt. He also confirmed that he, his wife and his mother, had entered into an agreement concerning the occupancy of Chester Street. The aim of the agreement was to set out the obligations between the parties. He was not sure who had prepared it, possibly his daughter had typed it. He also stated that the accounts for his two residential homes together with the flat 1 Clarence House had been operated as joint accounts up until October 1996. The detailed accounts had all been handed over to the trustees in Bankruptcy. Mr Alexander Gow Mr Gow, (an unqualified accountant) confirmed that he had prepared some draft accounts in respect of Chester Street for the period between 10th December 1997 and 30th October 1998. The accounts had been submitted by Mrs Birk as evidence that the business was viable and that it was running at a profit. Mr Gow emphasised that the accounts had been prepared from the invoices and information that were available and given to him by Mrs Birk. He stressed that they were not complete and should be regarded as a "quick health check". There were omissions and he expected to make further adjustments. On cross-examination he confirmed that he was not aware that Mrs Birk was making mortgage payments and he agreed that if they were in respect of Chester Street they should be included in the accounts. Mr Gow confirmed that his business also calculated the wage slips for Mrs Birk but that he had had no personal knowledge about how the information was collated and agreed. Other staff in his business actually dealt with the payroll work. In Mr Gow's opinion the business was still viable with two residents but the profits would be lower. THE TRIBUNAL DECISION Introduction The Tribunal having read all the written evidence and listened to the oral evidence and considered the submissions from Counsel, has concluded that the Appeal should be dimissed. Reasons for the decision The burden of proof lies with the Respondents who are required to prove that the Appellant is "not a fit person" within the meaning of the Registered Homes Act 1984. The legislation itself does not define the meaning of a fit or unfit person. Previous examples of a person who is not fit have included unsatisfactory financial dealings, poor management skills, lack of honesty and integrity. The Tribunal decision number 76 includes a comment about attributes needed – "a fit person is one who can be trusted in whom one has confidence who acts according to high principles". The Tribunal is conscious that this appeal involves a small home and the need for a "lighter touch". Nevertheless, the Tribunal has noted the decision number 352 and in particular the comments concerning the importance of small homes being run to a high standard, which this Tribunal endorses "Respondents need to be confident that there is financial stability in the house, that it is well managed, that it comprised precisely and exactly with the legal requirements" Tribunal Decision number

352. The fact that this is a small home does not negate the requirement for the owner to show that they have honesty and integrity combined with ability and competence to run the home. Honesty and Integrity Mr Thomas argued that Mrs Birk at worst had sought to conceal her bankruptcy from the Registration Authority and at best had failed to disclose it. Mrs Birk admitted that she had relied upon her husband for advice on business and financial matters. She assumed that he had told the authorities and as they had failed to ask her, she did not tell them. The Tribunal is surprised that the registration unit when informed by Mr Birk that he had been made bankrupt did not think to check whether Mrs Birk had also been made bankrupt. During cross-examination Mrs Hindle confirmed that Mr Birk had informed her of his bankruptcy during a visit to Clarence House on the 6th November 1996. So the registration unit was informed barely three weeks after the bankruptcy orders were made that Mr Birk was bankrupt. Furthermore, Mr Alderson revealed that he was aware that a notice concerning the bankruptcy had appeared in the local paper. For some reason nobody from the Registration Authority appears to have checked the details, if they had done so, they would have seen that Mrs Birk had also been made bankrupt. The Tribunal does not accept that Mrs Birk deliberately sought to conceal her bankruptcy from the authorities. The Tribunal believes that she relied on her husband and had assumed that he had told the authorities. So far as Mr Birk was concerned, the fact that a notice had appeared in the local paper meant that concealment was not an option. Failure to Provide adequate Financial Information When the authorities did realise that Mrs Birk was still an undischarged bankrupt they required her to provide "the necessary indication in writing from an appropriate financial institution such as a bank, that you have the necessary resources to set up and maintain a small home for people who have a learning disability to a satisfactory standard". The letter from the Halifax Bank dated 29th May 1998 consists of the briefest of statements confirming that Mrs Birk had held an account with the Halifax Plc for over 15 years. Mrs Birk's own Counsel accepted that the information was "unsatisfactory". Mr Spencer argued on behalf of Mrs Birk that she was "not au fait with accounts and delegates it to others". It was further suggested that Mrs Birk was naïve, and that she lacks qualifications and expertise. On oath she seemed at times evasive and failed to appreciate the importance of the questions being raised and the need for her to understand the financial issues involved in running a Care Home. In view of the closure of Clarence House and her continuing bankruptcy it was entirely appropriate that the authorities sought re-assurance of her financial soundness. Ability to Manage Financial Issues Where a Tribunal decision involves a small home it may be acceptable for the registered person to rely on expert advice to a greater extent. However, it cannot be appropriate or desirable that the registered person abrogates all responsibility or is unable to make straight forward financial or commercial decisions. Mrs Birk however in her evidence revealed that she could not write a cheque and sometimes had difficulty understanding letters from the authorities. At the end of the first day of the hearing Mrs Birk was asked by the Tribunal to produce accounts for a period prior to the date of the 10.12.1997. On the second day of the Tribunal hearing she failed to produce the accounts and when asked for an explanation said that she had not understood that she needed to provide them. When questioned about the interim accounts prepared by her own tax consultant Mr Gow, for the period between the 10.12.1997 from the 30.10.1998 her knowledge and understanding was extremely limited. It is clear from the evidence given by Mrs Birk that she relied heavily on her husband in respect of all financial matters and business advice. Furthermore Mrs Birk failed to appreciate the need to co-operate with her Receiver in Bankruptcy. She admitted that she had not attended a meeting fixed for 1st April 1999 or the Court hearing fixed for 22nd April 1999. She had wrongly assumed that only her husband was needed. Mrs Birk has failed to convince the Tribunal that she is able to take full charge of the financial responsibilities involved in the management of the home. At the date of the hearing no revised adjusted accounts were available. The business is still being run on a "cash basis" and it is likely that Mrs Birk will remain an undischarged bankrupt. Despite the fact that the authority failed at an early stage to carry out the simplest of searches and basic checks on Mrs Birk's financial status, when they were informed of her husband's bankruptcy they did eventually take action. Counsel for the Appellant quite rightly pointed out "where there has been inactivity and failure on the part of the Appellant there has also been failure and inactivity on the Respondent's side". The Tribunal agree with this and find it surprising that the authority does not, it would appear, as a matter of course make more stringent financial checks and assessments, particularly with reference to the ownership of the property where the home is to be run. However, their failure to act earlier does not ameliorate the failure of the Appellant to respond to their justifiable enquiries about her financial status. Her failure to recognise the important of co-operating with the Receiver in Bankruptcy indicates her lack of financial awareness. Her Counsel argued that Mrs Birk "did her best", regrettably it is enough. Therefore we are satisfied that the Appellant is not a fit person to be concerned in carrying on a residential home and her Appeal is accordingly dismissed. HELEN CLARKESUSAN GILHESPIEALAN KENDALL