West & Anor v Mitford

Contractual capacity requires an understanding of the general nature of the contractual commitment. It does not require a person to foresee every consequence of entering the contract, including the possibility that the commitment may ultimately threaten particular assets. Where a trial judge has reached reasoned factual conclusions supported by the evidence, permission to appeal will not be granted merely to reargue those conclusions. A limitation issue is arguable where there is a genuine question whether correspondence acknowledged a debt under section 29(5) of the Limitation Act 1980, or whether the person making the acknowledgment was liable or accountable for the debt.

These were renewed applications for permission to appeal arising from claims by nursing-home proprietors for unpaid residential care fees. The claims were brought against the deceased resident’s personal representative. The Brighton County Court had upheld findings that the resident had capacity to contract, that her solicitor had authority to agree to payment of the fees, and that the solicitors were not liable in the related Part 20 proceedings.

The court had also allowed an amendment adding an alternative claim for necessaries and held that correspondence from the Public Trustee renewed the limitation period. The central questions were whether the factual and contractual findings were open to challenge, and whether the limitation arguments concerning the correspondence and the receiver’s status were sufficiently arguable.

Disposition. Lord Justice Laws gave the judgment, and Sir Martin Nourse agreed with it. The applications were allowed in part. An extension of time for appealing was formally granted, and permission was confined to the limitation issue.

1. Contractual capacity. The trial judge had applied the correct approach. The relevant question was whether the resident understood the general nature of the contractual commitment to pay for nursing and care services. She did not need to understand every possible consequence, such as the risk that remaining in the home might require the sale of her house. The evidence supported the judge’s conclusion that, after a year of care and appropriate medication, she understood her financial position and obligations. That conclusion could not sensibly be impeached.
2. Authority and duties. The trial judge was entitled on the evidence to find that the solicitor had implied authority to agree to payment of the fees, alternatively that the agreement had been ratified. The findings rejecting alleged duties to obtain benefits earlier or to apply to the Court of Protection sooner were also open to him. Permission was refused on those matters.
3. Limitation. The proposed arguments under section 29(5) of the Limitation Act 1980 were sufficiently arguable. They included whether the Public Trustee’s letter amounted to an acknowledgment when the stated sum had not been finally ascertained and included interest, and whether a court-appointed receiver was liable or accountable for a debt incurred before appointment.
4. Alternative necessaries claim. The amendment had been treated as an alternative to the contractual claim and was based on the same or substantially the same facts. Permission was refused to challenge the order allowing it.

No determination was made on the merits of either limitation argument. The formal order was: Application allowed in part.

1. Court of Appeal (Civil Division): On 9 July 2001, the renewed applications were allowed in part. Permission to appeal was granted only on the limitation issue, with an extension of time for appealing.
2. Brighton County Court: His Honour Judge Hayward dismissed the appeal against the amendment order and later upheld the contractual claim, finding capacity, authority and acknowledgment of the debt. He rejected the related claims against the solicitors.
3. District Judge: On 12 May 2000, permission was given to amend the claim to plead an alternative restitutionary claim for necessaries.