Devon & Cornwall Autistic Community Trust (a company Ltd by guarantee) trading as Spectrum v Cornwall Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Green |
| Judgment Date | 29 January 2015 |
| Neutral Citation | [2015] EWHC 129 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ12X02958 |
| Date | 29 January 2015 |
[2015] EWHC 129 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Green
Case No: HQ12X02958
Edward Pepperall QC (instructed by 2 nd Opinion Now) for the Claimant
James Ramsden (instructed by Cornwall Council) for the Defendant
Hearing dates: 16 th January 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
A. Introduction
There is before the Court (in January 2015) an application by the Claimant ("the Claimant" or "Spectrum") for permission to serve witness statements and to vacate a trial date upon the basis that time is now needed to draft and serve the statements. The application is made even though the Applicant is in breach of prior court orders requiring the service of witness statements in December 2014. The trial date is in fact imminent. This case raises issues concerning the scope and effect of the judgments of the Court of Appeal in Mitchell v News Group Newspapers Limited [2013] EWCA Civ 1537 (" Mitchell"), and, Denton v TW White Limited [2014] EWCA Civ 906 (" Denton"). In particular, it concerns issues relating to the burden of proof upon an Applicant for relief from sanctions and as to the type of evidence required to discharge that burden. It concerns the types of explanation that should be given to a Court when the reasons advanced involve an allegation (express or implied) that prior legal advisors have acted improperly. And it raises an issue about legal privilege. The case also raises the issue of how a Court should react when a consequence of a refusal to grant relief is likely to mean the collapse of the defaulting side's case in its entirety. What is "proportionate" in such circumstances?
At the culmination of the hearing in this case I ruled that I would not vacate the trial date but would permit witness statements and oral evidence from the Claimant. I gave directions for the conduct of the case to trial. I indicated that I would give reasons later. These are those reasons.
B. Facts
The Claimant provides residential care facilities as a contractor to Cornwall Council and to other local authorities. That provision includes homes located in Cornwall in which individuals funded both by Cornwall Council and other authorities reside either permanently or periodically. Each individual has a statutory care plan to which funding is applied. Residential fees are reviewed and set out annually by the local authority. The process that is followed seeks to ensure that fees are set at a level which is sufficient to meet the assessed care needs of supported residents in the accommodation. In setting and reviewing fees the authority is required to have regard to the "actual" costs of providing care and to other local factors and considerations. To facilitate the process of review the authority requests data from care home owners in respect of the cost of care. The providers are, it is said by the Defendant, often reluctant to provide detailed information. However there is a consultative group known as the Care Homes Working Group which meets with the council upon a regular basis in order to provide information to the council and which has as one of its purposes the aim of improving working relations between the two groups. The Claimant has had a representative upon this group since 2011. The Claimant is one of 150 providers for residential accommodation in Cornwall and owns or operates 21 homes in West and Mid Cornwall. It also operates premises in other counties. The majority of placements to the Claimant are either from local or health authorities. Ms Maria Harvey, the Senior Manager of Contracts and Service Improvement within Cornwall County Council, explained in her witness statement that the relationship between the Defendant and Claimant over fees had been difficult with the Claimant seeking to impose unilaterally an annual percentage uplift over and above any tariffs set by the Defendant and also disputing amounts that apparently appeared to have been owed to them. In her statement, Miss Harvey stated as follows about the difficult relationship which has historically existed between the parties:
"16. I have also had real concerns in respect of Spectrum's business practice over the years. Spectrum have been notoriously difficult to engage and even when they have engaged in discussion, it has been difficult to satisfactorily conclude matters. In particular, there has been real difficulty in finding out the level of provision for individuals in houses because the houses will often be populated by other individuals placed by other Authorities and we will have no understanding as to the level of support that they are also receiving. It has been very difficult to identify whether the provision paid for has in fact been provided. I have also had concerns in respect of some of the financial information sent to me and raised concerns with our Audit Section in respect of Spectrum's accounts when I became aware that Spectrum were showing as income to the organisation "mobility allowance" totalling £173,787 for 2012 and £165,819 for 2011. The Business Audit Manager wrote to Spectrum's auditors on 23 August 2013 but has never received a response. I further believe having looked at the 2013 accounts of Spectrum that this practice is continuing. My concern in respect of this practice is the mobility component of disability living allowance is paid directly to the individual as part of their benefits and income. Whilst individuals with capacity may hypothetically choose to enter into some form of scheme whereby the sums are used jointly to purchase a vehicle or run a vehicle, I would expect that scheme to sit outside an income stream for the provider of accommodation and would expect an audit trail evidencing consent to such a scheme. It is even of more concern that individuals who lack capacity may have had their mobility component used in this way particularly if the mobility component is used by the organisation who are also the appointee for that person's finances. I cannot envisage a circumstance wherein those funds are shown as an income to the provider upon which they are also presumably taxed. In addition to this, Spectrum show as a core cost to the commission of services to justify their fees, the cost of transport. This is at the very least double-charging. Spectrum also appear to be including costs, such as mobile phones and other personal items which if they are for the individual service users would certainly be expected to be funded not from fees but from an individual's personal income. All of the individual service users will have their own income, usually from benefits. Given that the individuals will have most of their daily costs paid for where the only deduction being a capped contribution to their accommodation, residents should have a reasonably healthy sum to purchase items that fall outside the funding of their eligible needs. It is indeed not in the service user's best interests to build up a treasure chest of money as this will affect the benefits that they receive in the future".
This is an illustration of the difficulties that the Defendant has explained has characterised its relationship with the Claimant. Miss Harvey, in paragraph 17 of her statement, also explains that there had been a number of "safeguarding alerts" in relation to Spectrum placements. In particular there were 11 alerts over the previous 10 years which had, upon occasion, resulted in the suspension of new placements whilst service improvements were implemented. These safeguarding alerts are said to be related to alleged inadequate levels of staff being paid for by individuals.
All this is relevant because it impacts upon the manner in which, so it presently seems to me, the trial is likely to be conducted. The claim concerns a disagreement between the parties as to whether the Defendant has properly paid the Claimant for services said to have been provided by the Claimant to various individuals in its care homes. As I explain below, the heart of the issue is one of quantum meruit. The Claimant will, at least in significant part, need to tender oral evidence in order to substantiate its claim. For its part, the Defendant wishes vigourously to test the reliability and indeed integrity of the Claimant's case. In the absence of a right to adduce oral evidence the Claimant is therefore unlikely to be able to advance a realistic case at all. It is in this context that the present dispute arises.
C. The procedural history
There is no doubt that the Claimant is in material breach of court orders laying down the principal steps to be taken to bring this matter to trial. In particular the trial is listed to be heard in a 7 day trial window commencing Monday 16 th February 2015, just over 4 weeks away. There is also no doubt but that, at least as of the date of the hearing, the Claimant is not ready to go to trial. I set out below a summary of the chronology which has led to the present unsatisfactory state of affairs.
The claim was issued on 20 th June 2012. It was issued under a Notice of Funding under the pre-April 2013 costs regime and the Claimant therefore has the benefit of a 100% CFA of a type which is no longer available. The claim was set at a level exceeding £2.5m in pre-action correspondence. As pleaded the sum reduced to £2.085m plus interest. The claim as originally pleaded was said, by the Defendant, to be deficient in details and particulars. Following a hearing before Master Leslie on 17 th...
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