West Sussex County Council v Amberley (UK) Ltd & Anor

Under section 50(6) of the Health and Social Care Act 2001, a local authority assumes only liabilities forming part of the resident’s existing arrangements when the statutory regime changes. Contractual terms allowing a care provider to propose fee increases do not ordinarily give the provider a unilateral right to impose those increases. Where price is governed by an existing contract, no additional quantum meruit arises under the transferred arrangements. A local authority does not provide accommodation services for this purpose unless the rate payable has been agreed. Continued provision of care, despite each party insisting on different rates, does not itself create a supervening contract. Limitation is not extended for mistake where the defendant did not deliberately conceal it and the claimant could have discovered it with reasonable diligence.

The claimant local authority paid a care home for a resident whose care was the responsibility of another authority, and sought recovery of the overpayments. It also claimed under section 45(1) of the National Assistance Act 1948 in respect of increased benefits received by two other residents.

The care home counterclaimed for higher fees for former preserved-rights residents, relying on section 50(6) of the Health and Social Care Act 2001, contractual fee provisions, quantum meruit, and an alleged supervening contract. The central issues were whether the statutory liability transferred higher contractual or reasonable fees to the local authority, whether the parties’ conduct created a contract, and whether limitation was extended under section 32 of the Limitation Act 1980.

1. Overpayments. The local authority’s claim for payments made in respect of JF succeeded, but recovery was limited to payments made on or after 28 August 2002. The limitation period was not extended under section 32 of the Limitation Act 1980. There was no deliberate concealment, and the authority could with reasonable diligence have discovered both the mistake and the identity of the authority responsible for payment.
2. Section 45 claim. The claim against Amberley Ltd and Mr Green under section 45(1) of the National Assistance Act 1948 failed. Although the increased benefits were material facts and had not been disclosed, neither defendant was under a legal or moral obligation to disclose them. The authority could obtain the information directly from the residents.
3. Transferred liabilities. The liability assumed under section 50(6) of the Health and Social Care Act 2001 was confined to liabilities under the existing arrangements at 8 April 2002. For residents with contracts, the fee clause allowed Amberley Ltd to propose increases, but the resident could reject them and leave. It did not confer a unilateral power to impose the higher fees invoiced to the authority. The contractual price also left no room for an additional quantum meruit.
4. For residents without contracts, a reasonable sum could in principle form part of the existing arrangements. However, the evidence did not establish that a reasonable price exceeded the authority’s maximum rates. Those rates substantially reflected the local care-home market.
5. Services and contracts. Applying Chief Adjudication Officer v Quinn [1996] 1 WLR 1184, the authority had not provided the relevant community care services unless the rate payable had been agreed. The pre-existing Master Agreement did not apply to preserved-rights residents. Nor could a contract be inferred from continued residence and payment: each party maintained its position on price, so neither accepted the other’s terms.
6. The counterclaim was dismissed. The court reserved the precise calculation of the sum due and any issue of interest.