11.59Yule v South Lanarkshire Council (No 2) (2001) 4 CCLR 383, CSIH
A local authority had to consider whether all the circumstances justified the inference that a person had deliberately deprived themselves of an asset in order to avoid having to pay care charges and it was only necessary that the purpose of avoiding having to pay care charges was a significant part of the purpose
Facts: the Court of Session (Lords Cameron of Lochbroom, Osborne and Reed) Mrs Yule transferred her home to her granddaughter, ‘in consideration of love, favour and affection’, about 15 months before she went into residential accommodation. She was 78 years old at the time of the transfer and had been deteriorating gradually over the preceding six or seven years, for example, so as to develop paranoid ideas about a neighbour for several years. The family maintained that, at the time, it was not contemplated that Mrs Yule would have to go into residential care, that an unforeseen accident precipitated her admission (which was the case) and that it was always Mrs Yule’s intention to transfer her home to her granddaughter, of whom she was particularly fond: there was no intention to deprive herself of capital. South Lanarkshire decided that Mrs Yule had deprived herself of capital for the purpose of decreasing the amount that she might be liable to pay for her residential accommodation, for the purposes of regulation 25 of the National Assistance (Assessment of Resources) Regulations 1992.
Judgment: the Court of Session (Lords Cameron of Lochbroom, Osborne and Reed) held that it was inappropriate to analyse the matter in terms of burden of proof. A local authority must seek information from the application and other sources and reach a rational conclusion as to whether it could be inferred that a deprivation of capital had taken place deliberately and with the intention of asserting an inability to pay. It was unnecessary for the applicant to know of the actual capital limit: it was sufficient if it was a reasonable inference from all the circumstances that the purpose of a transaction had been to avoid having to pay charges. In this case, the applicant had been an elderly woman with no substantial capital assets, the transfer had not been for monetary consideration and there was no reason why the granddaughter needed to live in that particular house. These were sufficient primary facts to found the reasonable inference that the applicant had deliberately decided to deprive herself of the house in order to avoid having to pay care home charges. These were sufficient primary facts to found the reasonable inference that at least part of the purpose of the transfer had been a deliberate decision to the applicant had deliberately decided to deprive herself of the house in order to avoid having to pay care home charges:
30. In the present case, it was clear that the respondents could look for information no further than the members of the family to whom they applied for information. Furthermore, it was clear that the family were indicating that they were not able to throw any further light on the purpose of the transaction by which Mrs Yule deprived herself of her capital asset in the house beyond what was contained in the correspondence up to and including the letter of 4 February 1997. It may have been the case that the respondents only learnt some time after they made their determination that, at the same time as executing the disposition of her house, Mrs Yule had also granted a power of attorney to her son, the petitioner. However, the respondents cannot be faulted for proceeding to make their assessment on the information available to them at the time. …
31. When regard is had to the letter in which the respondents’ decision was conveyed to the family, the respondents properly set out the question which they required to ask themselves, when they said that ‘in determining any application for public funding the Council is required…to consider whether the transfer of any property by the resident was carried out either in full or in part with the motive of avoiding that property being taken into account in determining his or her eligibility for public funding’…
32. In our opinion, looking to that material, a number of primary facts stand out. This was an elderly woman with no substantial capital assets other than her house. She was putting her affairs in order. She elected to dispone her house while retaining a limited interest in it, by way of a liferent, giving her the right to occupy it during her lifetime. This would protect her while she remained able to do so. The fee in the house was disponed out of her hands for no consideration, other than the love, favour and affection that she had for her granddaughter. There was nothing suggested to the respondents to the effect that the granddaughter had need at the time to succeed to any interest in the house or to live in it in the future, or that there was any prior legal obligation to that effect. The suggestion that Mrs Yule was in good health ran counter to the information that was before the respondents prior to the letter of 1 November 1996 in which they first applied to Miss Yule for information. That was a factor which, it would appear from the pleadings, was in mind at the time that the decision was taken. From what was put before the respondents in regard to all these matters, we consider that there were sufficient primary facts to entitle the respondents reasonably to conclude that Mrs Yule had deliberately determined to denude herself of her one substantial asset because, by doing so, she might thereby avoid the prospect that if she were to enter residential care in her lifetime, her house would require to be sold and the proceeds, at least in part, would require to be devoted to payment for that care, to the detriment of her family’s interest in the succession to her estate on her death…
33. We agree with the Lord Ordinary that it is open to a local authority to reach a view as to the purpose of a transaction such as the present, without any specific finding as to the exact state of knowledge or intention of the applicant, so long as the primary facts are such as reasonably to lead to the inference that the purpose was at least in part that specified in reg 25(1).
Comment: regulation 25 of the 1992 regulations is reproduced, materially identically, at regulation 17 of the Care and Support (Charging and Assessment of Resources) Regulations 2014.