County council fails in bid to strike out claim by care homes for £200k in fees

The High Court has rejected an application brought by a county council to strike out or for summary judgment in a claim brought by two care homes for payment of almost £200,000 in care home fees.

The claimants, the Julie Richardson Limited and Banbury Heights Limited, were meanwhile successful in an application to amend their particulars of claim to seek an equitable remedy against Oxfordshire County Council, either by way of estoppel or restitution. The two homes are under common management.

Oxfordshire had sought to strike out the claims on the basis that "the claims are wholly misconceived in that they rest on the premise that OCC were obliged to meet all care costs from the time that JS [a care home resident at Banbury Heights] reached the financial threshold assessment" and that "the claim in respect of MH [a care home resident at The Julie Richardson] is also without foundation as the OCC were not obliged to make payment pending the financial assessment and her family were repeatedly requested to provide requisite financial information which they failed to do."

Her Honour Judge Karen Walden-Smith, sitting as a High Court judge, said that “regrettably”, it appeared that no substantive progress had been made with respect to the case from the claim being issued in August 2021 for more than three years.

The claimants have, according to their principal executive director and majority shareholder, enjoyed a "significant, constant and consistent commissioning and contractual relationship" with Oxfordshire since 2003.

In his statement dated 23 January 2023, this was referred to as being an "underlying contract" which was said to be based upon the defendant council's statutory obligation to provide accommodation and care services for persons in need and for whom the defendant owes a statutory duty to provide such accommodation and services.

The judge said that, in summary, the issue between the parties was whether Oxfordshire had an obligation to pay for the care provided by the Julia Richardson and Banbury Heights which was not paid privately.

In their amended Particulars of Claim, the claimants set out that Oxfordshire was under a statutory duty to meet the needs of two individuals [Mrs Hayward and Mrs Smith], including accommodation in a care home, and that duty was fulfilled by the council arranging for the Julia Richardson and Banbury Heights to provide adult social care services in the care homes.

It is alleged that when Mrs Hayward and Mrs Smith were placed with into care at the Julie Richardson and Bramley Heights respectively, the needs could be met on behalf of Oxfordshire in accordance with the provisions of the Care Act 2014. In February 2019 and June 2018 respectively, Oxfordshire determined that Mrs Hayward and Mrs Smith met the eligibility criteria and the Julie Richardson and Bramley Heights provided the necessary services to Mrs Hayward and Mrs Smith.

According to the judge, the essence of the amended Particulars of Claim is a claim in restitution, namely:

"7.1The Claimant has had to cover the cost and expense of providing accommodation in a care home to Mrs Hayward and Mrs Smith. At the date Mrs Hayward and Mrs Smith met the eligibility criteria, the Defendant would have been under a statutory duty to meet their needs under section 18 to 20 of the 2014 Act.

7.2 The Claimant has met the needs of Mrs Hayward and Mrs Smith on behalf of the Defendant.

7.3 The Defendant has been unjustly enriched at the expense of the Claimants. The Defendant must make restitution of its unjust enrichment. The Defendant is primarily/100% responsible for meeting the needs of Mrs Hayward and Mrs Smith during the eligibility period."

The claimants claim that Oxfordshire has been unjustly enriched for (i) the accommodation and care services provided to Mrs Hayward at the Julie Richardson for the period between 1 July 2017 and 15 May 2020 in the sum of £155,839 and (ii) the accommodation and care services provided to Mrs Smith at Banbury Heights for the period between 11 August 2019 to 28 April 2020 in the sum of £39,300.

Oxfordshire applied to strike out the claim brought by the claimants pursuant to the provisions of CPR 3.4 that the statement of case disclosed no reasonable grounds for bringing the claim. Alternatively, it sought "reverse" summary judgment pursuant to the provisions of CPR 24.3 on the grounds that the claimants (a) had no real prospect of succeeding on the claim and (b) there was no other compelling reason why the case should be disposed of at trial.

The county council denied the existence of any "underlying contract" between it and the claimant care homes. The statement of one of its solicitors sets out that the idea of an underlying contract is "fictitious": "What is the point of the numerous specific funding agreements that exist between the Claimants and the Defendant is a general one is always in place? The lack of documentary evidence speaks for itself." 

The solicitor also states that there is no statutory obligation to pay fees to the claimant. He says as follows: "The idea of a statutory obligation arises from mistakenly assuming that because the Defendant has obligations to individuals under the Care Act 2014 it therefore also has obligations to the homes that accommodate them. The Care Act creates no funding obligations."

Oxfordshire also contended that permission should not be granted to allow the amendment to the Particulars of Claim as it introduced a new cause of action and "a new raft of relief and the contentions are well beyond the remit of the original pleaded claim." 

The basis of the objection to the claim was said by counsel to Oxfordshire, to be "that there are no enforceable obligations and rights as between the parties that give rise to any cause of action and those declarations are otiose."

However, after setting out the statutory framework and considering the issue, HHJ Walden Smith said she was satisfied that it was strongly arguable that Oxfordshire had been unjustly enriched by reason of the Julie Richardson and Banbury Heights fulfilling the statutory duties of the council.

“The Julie Richardson and Banbury Heights consequently have strong arguments for contending that they should be entitled to the declarations sought and recompense for the monies expended fulfilling Oxfordshire CC's statutory duties,” she said.

In these circumstances, the claimants were given permission to amend to plead the claim in unjust enrichment.

“The claim in estoppel does not have the same strength, but it is an argument that has sufficient prospects of success that I will allow the entirely of the drafted amendments,” HHJ Walden-Smith said.

As a consequence the applications to strike out and for summary judgment could not succeed and the judge dismissed those applications brought on behalf of Oxfordshire.