39. At the time of the 1948 Act, most prior case law on the meaning of the expression ‘ordinary residence’ related to income tax. Liability depended on whether a person was resident or ordinarily resident in the United Kingdom for a particular tax year. In that context it had long been established that a person could be ordinarily resident in two places. This approach was affirmed by the House of Lords in two well known cases reported in 1928: Levene v Inland Revenue Comrs [1928] AC 217 and Inland Revenue Comrs v Lysaght [1928] AC 234. In an earlier case, Cooper v Cadwalader (1904) 5 TC 101, an American resident in New York, who had taken a house in Scotland which he visited for two months each year, was held to be resident and ordinarily resident in the United Kingdom for tax purposes for each such year. It mattered not that for other purposes he might be treated as ordinarily resident in New York. As Viscount Sumner later observed ‘Who in New York would have said of Mr Cadwalader ‘his home’s in the Highlands; his home is not here’?’: Lysaght, p244.

40. The House of Lords confirmed that approach and reached the same conclusions on the facts of the two cases in the 1928 reports. Mr Levene lived abroad, but returned each year for about five months for the purpose of obtaining medical advice, visiting relatives and other matters. Mr Lysaght lived in Ireland, but returned to England each month for business purposes, remaining for about a week and usually staying in a hotel. In both cases the special commissioners had been entitled to hold that they were resident and ordinarily resident in this country.

41 Those authorities were followed in the leading modern authority on the meaning of the expression in a statutory context. That is the speech of Lord Scarman in R v Barnet London Borough Council ex p Nilish Shah [1983] 2 AC 309. The question was whether four foreign students qualified for an education grant on the basis that they had been ‘ordinarily resident’ in the United Kingdom ‘throughout’ the three years preceding the first year of their course. The authorities had argued that their ordinary residence, in the sense of their ‘real home’, was elsewhere. The House disagreed. Lord Scarman, in the leading speech, treated the tax cases as authority for the ‘natural and ordinary meaning’ of the expression. In particular he cited Viscount Sumner’s reference to ‘ordinary’ residence as ‘that part of the regular order of a man’s life, adopted voluntarily and for settled purposes …’: Lysaght, p 243. Lord Scarman echoed those words in his own statement of the natural and ordinary meaning of the term, at p 343G–H:

‘Unless, therefore, it can be shown that the statutory framework or the legal context in which the words are used requires a different meaning, I unhesitatingly subscribe to the view that ‘ordinarily resident’ refers to a man’s abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or of long duration.’The ‘mind’ of the subject was relevant in two respects. First the residence must be ‘voluntarily adopted’, rather than for example ‘enforced presence by reason of kidnapping or imprisonment’. Secondly, there must be ‘a degree of settled purpose’:‘This is not to say that the [subject] intends to stay where he is indefinitely; indeed his purpose, while settled, may be for a limited period … All that is necessary is that the purpose of living where one does has a sufficient degree of continuity to be properly described as settled.’: p344D.

A ‘settled’ purpose did not need to be indefinite. ‘Education, business or profession … or merely love of a place’ could be enough. There was no justification for substituting a ‘real home test’, as the councils had argued: p345B.

42. Although understandably this passage has been often quoted and relied on in later cases, the weight given to the concept of a ‘settled purpose’ needs to be seen in context. The focus of the passage was to explain why the undoubted residence of the claimants in this country for the necessary period, albeit for the temporary purpose of education, was sufficiently settled to qualify as ‘ordinary’ under the accepted meaning. It was relevant therefore to show that it was no less settled than, for example, the residence of Mr Cadwalader during his annual visit to Scotland, or that of Mr Levene on his five-month visit for medical and other reasons. Nor did it matter, it seems, that they might have had other ‘ordinary’ residences in their countries of origin.

19.15 … Local authorities should in particular apply the principle that ordinary residence is the place the person has voluntarily adopted for a settled purpose, whether for a short or long duration. Ordinary residence can be acquired as soon as the person moves to an area, if their move is voluntary and for settled purposes, irrespective of whether they own, or have an interest in a property in another local authority area. There is no minimum period in which a person has to be living in a particular place for them to be considered ordinarily resident there, because it depends on the nature and quality of the connection with the new place.

45. Shortly after the Shah judgment, in R v Waltham Forest London Borough Council ex p Vale The Times, 25 February 1985, Taylor J had to consider a case much closer to the present, involving the application of the ordinary residence test under the 1948 Act to someone mentally incapable of forming a settled intention where to live. Judith, an English woman, had been in residential care in Ireland for over 20 years where her parents had been living. When her parents returned to England, it was decided that she should return to live near them. She stayed with them at their house in Waltham Forest for a few weeks while a suitable residential home was being found, and she was then placed in a home in Buckinghamshire. The shortfall in costs (so far as not borne by the Department of Health and Social Security) was sought from Waltham Forest on the grounds that she was ‘ordinarily resident’ in the borough.

46. The case was argued and decided by reference to the Shah test of ordinary residence, adapted for the case of someone lacking the power to form for herself a settled intention where to live. Taylor J adopted a two-part approach suggested by counsel, but on either approach he considered that her residence with her parents could be treated as sufficiently settled to satisfy the Shah test. The result is unremarkable, but in view of the weight later given (particularly in the Secretary of State’s guidance) to ‘Vale tests 1 and 2’, it is right to quote the judge’s own words. For the first approach he made reference to Lord Denning MR’s concept of a child’s ‘base’:

‘Where the (subject) … is so mentally handicapped as to be totally dependent upon a parent or guardian, the concept of her having an independent ordinary residence of her own which she has adopted voluntarily and for which she has a settled purpose does not arise. She is in the same position as a small child. Her ordinary residence is that of her parents because that is her ‘base’, to use the word applied by Lord Denning in the infant case cited.’ (Emphasis added.)

The alternative approach, considering her as if she were a person of normal mental capacity, led to the same result:

‘I cannot accept that during the relevant month Judith should be regarded as a squatter in her parents’ home. Her residence there had, in my judgment, all the attributes necessary to constitute ordinary residence within Lord Scarman’s test, albeit for a short duration.’

47. There is no reason to quarrel with Taylor J’s conclusion on the unusual facts of the case. In circumstances where her only previous residence had been in Ireland, there was obvious sense in treating her few weeks living with her parents as sufficiently settled to meet the Shah test, whether by reference to the intentions of those making decisions on her behalf, or to the ‘attributes’ of the residence objectively viewed. With hindsight, it was perhaps unhelpful to elide the Shah test with the idea of a ‘base’, used by Lord Denning MR in a different context and for a different purpose. The italicised words in the first passage quoted above cannot be read as supporting any more general proposition than that Judith’s ordinary residence was to be equated with that of her parents, without reference to the period of her own actual residence with them. Nor in my view should Taylor J’s two approaches be treated as separate legal tests. Rather they were complementary, common-sense approaches to the application of the Shah test to a person unable to make decisions for herself; that is, to the single question whether her period of actual residence with her parents was sufficiently ‘settled’ to amount to ordinary residence

…

49. I agree with the Court of Appeal that the decision-maker’s reasons for selecting Cornwall cannot be supported. The writer started, not from an assessment of the duration and quality of PH’s actual residence in any of the competing areas, but from an attempt to ascertain his ‘base’, by reference to his relationships with those concerned. Thus in deciding that the family home in Cornwall could properly be described ‘as a ‘base’ for [PH]’ notwithstanding the infrequency of his visits, the determination stated that it was necessary to consider ‘not merely the number or frequency of visits [but] … the entirety of the relationship between [PH] and his parents …’. There is no suggestion that his brief periods of staying with his parents at holiday times could in themselves amount to ordinary residence.

19.23 All issues relating to mental capacity should be decided with reference to the Mental Capacity Act 2005 (the 2005 Act) . Under this Act, it must be assumed that adults have capacity to make their own decisions, including decisions relating to their accommodation and care, unless it is established to the contrary.

19.24 The test for capacity is specific to each decision at the time it needs to be made, and a person may have capacity to make some decisions but not others. It is not necessary for a person to understand local authority funding arrangements to have capacity to decide where they want to live.

19.25 If it can be shown that a person lacks capacity to make a particular decision, the 2005 Act makes clear how decisions should be made for that person. For example, if a person lacks capacity to decide where to live, a best interests’ decision about their accommodation should be made under the 2005 Act. Under section 1(5) of the 2005 Act, any act done, or decision made (which would include a decision relating to where a person without capacity should live), must be done or made in the best interests of the person who lacks capacity. Section 4 of the 2005 Act sets out how to work out the best interests of a person who lacks capacity and provides a checklist of factors for this purpose.

19.26 Where a person lacks the capacity to decide where to live and uncertainties arise about their place of ordinary residence, direct application of the test in Shah will not assist since the Shah test requires the voluntary adoption of a place.

19.27 The Supreme Court judgment in Cornwall made clear that the essential criterion in the language of the statute ‘is the residence of the subject and the nature of that residence’.

19.28 At paragraph 51, the judgment says in relation to the Secretary of State’s argument that the adult’s OR must be taken to be that of his parents as follows:

‘There might be force in these approaches from a policy point of view, since they would reflect the importance of the link between the responsible authority and those in practice representing the interests of the individual concerned. They are however impossible to reconcile with the language of the statute, under which it is the residence of the subject, and the nature of that residence, which provide the essential criterion…..’

19.29 At paragraph 47, the judgment refers to the attributes of the residence objectively viewed.

19.30 At paragraph 49, the judgment refers to an: assessment of the duration and quality of actual residence.

19.31 At paragraphs 47 and 52, the judgment refers to residence being ‘sufficiently settled’.

19.32 Therefore with regard to establishing the ordinary residence of adults who lack capacity, local authorities should adopt the Shah approach, but place no regard to the fact that the adult, by reason of their lack of capacity cannot be expected to be living there voluntarily. This involves considering all the facts, such as the place of the person’s physical presence, their purpose for living there, the person’s connection with the area, their duration of residence there and the person’s views, wishes and feelings (insofar as these are ascertainable and relevant) to establish whether the purpose of the residence has a sufficient degree of continuity to be described as settled, whether of long or short duration.

19.33 Physical presence provides a starting point for considering ordinary residence but does not necessarily equate to ordinary residence - a person could be physically present in an area but of no settled residence. This is covered in paragraphs 19.44 to 19.46 of the Care Act statutory guidance.

19.34 In certain situations, ordinary residence could be deemed to be in a different area to that in which a person is physically present. This is covered in paragraphs 19.44 to 19.59 of the Care Act statutory guidance and in the section below on looked after children transitioning to adult social care services.

19.35 Other situations such as temporary absences and people having more than one home are covered in paragraphs 19.70 to 19.74 of the Care Act statutory guidance.

19.36 The issue of duration is covered in paragraph 19.15 of the Care Act statutory guidance.

19.37 Prior to Cornwall, the department’s approach was to start with a presumption that, for the purposes of the 1948 Act, a looked after child who had been placed in accommodation out of area under the 1989 Act retained the ordinary residence of the local authority who had made the placement under the 1989 Act upon turning 18. That presumption could be rebutted by the circumstances of the case. In Cornwall, the Supreme Court held that a looked after child who had been placed in foster care in local authority A by local authority B under the 1989 Act and who was ordinarily resident in local authority B for the purposes of the 1989 Act, continued to be ordinarily resident in local authority B when he reached 18 for the purposes of deeming provisions in the 1948 Act The Supreme Court set out that the underlying purpose behind deeming provisions in both children’s and adult legislation is that: ‘an authority should not be able to export its responsibility for providing the necessary accommodation by exporting the person who is in need of it.’

19.38 This means that for the purposes of the 2014 Act, and where relevant, the 1948 Act, any person who moves from accommodation provided under the 1989 Act to accommodation provided under the 1948 Act or 2014 Act, which is accommodation to which the deeming provisions under the 1948 Act or the 2014 Act apply, remains OR in the local authority in which they were ordinarily resident under the Children Act. This includes a situation where a child has been placed out of area under the 1989 Act as a looked after child and requires residential accommodation under the 1948 Act or the 2014 Act at age 18 as well as leaving care support under the 1989 Act.

19.39 The accommodation to which the adult deeming provisions apply is:

19.40 The above guidance on looked after children who have been placed in residential accommodation out of area under the 1989 Act and who transition to adult social care services applies where the person is provided with the specified accommodation as set out above for example, accommodation to which deeming provisions under the 2014 Act apply. It also applies to accommodation to which deeming provisions under the 1948 Act apply. In cases where those deeming provisions do not apply, although the provisions of the

19.41 Children Act normally no longer apply once a young person reaches 18 local authorities should start from a presumption that for the purposes of the 1948 Act or the 2014 Act the young person remains ordinarily resident in the local authority in which they were ordinarily resident under the 1989 Act. However, this is only a starting point and if the young person remains in the area in which he was placed as a child or moves to a new local authority area the presumption may be rebutted by the circumstances of the individual’s case and the application of the Shah test.