Aster Healthcare Ltd v Shafi (Estate of)

Section 7 of the Mental Capacity Act 2005 gives statutory effect to the common-law rule concerning necessaries. It requires payment only where the supplier intended the person lacking capacity to pay for the necessary goods or services. It does not apply where services are supplied under arrangements with a local authority exercising statutory duties under Part III of the National Assistance Act 1948. In that situation, liability remains with the local authority, even if it can recover the cost from the individual. Where arrangements are made with a third party, section 7 depends on whether the arrangements contemplated payment by the incapacitated person or by the third party. The service provider’s contractual intention is therefore central.

Aster Healthcare Limited claimed unpaid care-home fees from the estate of Mr Mohammed Shafi, who had lived at its nursing home until his death. The Willesden County Court granted summary judgment against the estate, holding that there was an unanswerable claim under section 7 of the Mental Capacity Act 2005 and no realistic prospect that Brent Council was primarily liable.

The estate appealed. The High Court treated the appeal as a rehearing because the legal arguments had developed substantially. The central issues were whether the alleged service-user agreement imposed personal contractual liability on Mr Shafi, whether Brent’s statutory duties under the National Assistance Act 1948 and the National Health Service and Community Care Act 1990 were engaged, and whether section 7 could apply to care supplied under local-authority arrangements.

1. Appeal allowed. The summary judgment was set aside in its entirety. The factual issues, including the nature of Brent’s arrangements with the care home and the parties’ intentions, required a trial.

2. The service-user agreement did not make Mr Shafi personally liable. Properly construed, it identified Mrs Shafi as the payer and contained no term requiring Mr Shafi to pay if she did not sign or failed to pay. The contractual claim against the estate was therefore bound to fail.

3. Under section 47 of the National Health Service and Community Care Act 1990, a local authority must assess apparent need for community-care services irrespective of resource implications. The power to provide urgent services under section 47(5) derives from other legislation, principally Part III of the National Assistance Act 1948. Where the statutory criteria are met, section 21 imposes a duty to arrange residential accommodation.

4. Arrangements under section 26 of the 1948 Act ordinarily leave the local authority responsible for payment to the care provider. An arrangement under section 26(3A) may permit the resident to pay the provider directly, but it does not transfer ultimate liability from the local authority. The authority may recover the resident’s assessed contribution from him or his estate.

5. Section 7 of the Mental Capacity Act 2005 enacted, rather than expanded, the common-law rule in Re Rhodes [1890] 44 Ch Div 94. Necessary services must be suitable to the person’s condition and actual requirements, but the supplier must also have intended the incapacitated person to pay and to incur a debt. The location of suitable care is not part of the statutory definition of necessary services.

6. Section 7 cannot be used where care is supplied under an arrangement with a local authority exercising its Part III duties, because the individual is not intended to be indebted to the provider. It may apply to a third-party arrangement only if the evidence shows that payment by the incapacitated person was contemplated. On the present evidence, it remained arguable that Brent was liable for all or part of the fees.

• High Court (Queen's Bench Division): appeal from the Willesden County Court allowed; summary judgment set aside and the matter left for trial.
• Willesden County Court: HH Judge Million granted summary judgment to Aster Healthcare Limited against the estate.