Petitioner: Dewar, Q.C., S Bell; Blacklocks

Respondents: A Poole; Allan McDougall & Co

11 November 2011

Introduction
[1] This Petition for Judicial Review is brought by the attorneys for a lady of nearly 95 years of age; she lives in a care home in Musselburgh. She suffers from vascular dementia and has lived in a care home on a full-time basis since about February 2006. The Respondents are East Lothian Council, the local authority responsible for the provision of residential care to the Petitioner. The Petitioner challenges the Respondents' decisions that she is liable for accommodation charges because she has capital assets in excess of the permitted maximum value.

The Factual Background

[2] The circumstances which have given rise to the present petition may be summarised as follows. For some years prior to 2003 the Petitioner lived in a council house at 38 Muirpark Road, Tranent, East Lothian ("the property"). By exchange of missives dated 6 June and 6 August 2003, she purchased the property from the Respondents for a consideration of £24,400. The market value of the property at the time of purchase was deemed to be £61,000. This was based on a valuation by the District Valuer on 31 March 2003. The Petitioner was the sole tenant and received a 60 per cent discount because of the length of time she had been a tenant of the Respondents. The amount of the discount was £36,600. She obtained a loan from Halifax Plc ("Halifax") for £26,000. The Petitioner's title as sole proprietrix of the property was registered in the Land Register on 15 December 2003.

[3] By a Minute of Agreement dated 16 September and 14 December 2003, the Petitioner and her great-grandson, Mr Ian Black, agreed on a number of matters relating to the property. The Minute of Agreement recorded that the Petitioner had purchased the property from the Respondents in terms of the Housing (Scotland) Acts 1987 and 2001 and that she had met the full purchase price and the whole expenses associated with the purchase out of a loan of £26,000 granted to her by Halifax. In terms of Clause (TWO) of the Minute of Agreement, the parties agreed that, although the loan from Halifax had been granted to the Petitioner, Mr Black would meet the monthly payments due to the lender and would bear and thus free and relieve the Petitioner of responsibility for repaying the loan. Clause (THREE) of the Minute of Agreement provided that after the expiry of the discount period on 6 August 2006 and subject to the consent of Halifax being obtained in the event that the loan had not by then been fully repaid, the Petitioner would convey and dispone the property to Mr Black in repayment of her indebtedness to him. By Clause (FOUR) Mr Black agreed that, following such conveyance, the Petitioner would have a liferent right to occupy the property. Under Clause (FIVE) the parties agreed that the Petitioner would be responsible for payment of all Council Tax and Mr Black would be responsible for the costs of maintenance, repair, decoration and insurance of the property. By Clause (SIX) the parties agreed that the liferent in favour of the Petitioner would terminate (a) by voluntary renunciation inter vivos or (b) on her death or (c) on such earlier date as she should become unable for any reason to continue in the occupancy of the property. It was, however, declared that sub-paragraph (c) would not be enforceable by Mr Black unless the period of non occupancy had exceeded six months or a medical practitioner had confirmed that the Petitioner would not be able to resume occupancy of the subjects.

[4] On 5 December 2004, the Petitioner obtained a personal loan of £24,000 from Halifax; this was secured over the property at 38 Muirpark Road. This second loan was taken out with Mr Black's full knowledge and he made all the repayments under it.

[5] On 1 September 2005, the Petitioner submitted a Financial Circumstances Form to the Respondents' Social Work and Housing Department. The purpose of this was to allow the Respondents to assess whether and to what extent she was entitled to assistance from public funds towards the cost of her accommodation in a care home. At the end of the form she signed a declaration to the effect that she understood that she would be required either to meet the full cost of her residential accommodation or part of the cost related to the Respondents' calculation of her ability to contribute based on the financial information she provided. The declaration contained a certification that the particulars stated on the form were a true and full statement of the Petitioner's financial position. For present purposes, it is necessary only to note that in the form the Petitioner confirmed that she owned the property at 38 Muirpark Road, and that she gave its current value as being "not known". There was space on the form for any other financial information to be provided, but this was left blank. Nothing was said at this stage about the Minute of Agreement or its possible effect on the value of the property.

[6] On 7 February 2006, the Petitioner was admitted to a local authority care home operated by the Respondents and became a permanent resident there. She has subsequently moved to a different home run by the Respondents. On 13 July 2006, Mrs Elaine Burns, an administrative assistant employed in the Respondents' Community Care Finance Unit, wrote to the Petitioner's attorney about the costs of the care home accommodation provided for her. In the letter Mrs Burns stated that because the Petitioner owned her own home she was deemed to be self-funding. The letter explained that, after an initial twelve week period, the Petitioner would be liable to pay the difference between the gross cost of the care home and the Respondents' contribution of £145. This left a weekly balance due by the Petitioner of £374.66. The letter went on to explain that, as the property was not being sold, the Respondents would place a charging order over it, the purpose of which was to secure payments of the outstanding monies due at the time of the eventual sale of the property. In an affidavit sworn for the purposes of the present proceedings, Mrs Burns explained that she was aware, when she wrote the letter of 13 July 2006, that the Petitioner had purchased the property from the Respondents for a discounted sum of £24,400, a figure which represented 40 per cent of its full value. Accordingly, Mrs Burns knew that the full market value of the property would be 60 per cent higher than the purchase price and that this would mean that the Petitioner had a capital asset of a value which would put her above the upper threshold. Therefore the Petitioner was considered to be self-funding. The letter of 13 July 2006 also requested that an up-to-date Financial Circumstances Form for 2006/07 be completed on behalf of the Petitioner, but I understand that this was never done. On 21 July 2006 the Respondents made a charging order over the property. The order was registered in the Land Register on 26 July 2006.

[7] In May 2008 the Petitioner appealed to the Respondents' Social Work Complaints Review Panel against the decision to treat her as self-funding. The Panel dismissed her appeal and the Petitioner then appealed again, this time to the Respondents' Social Work Appeals Sub-Committee. After sundry procedure, the Appeals Sub-Committee decided to accept the recommendation made by the Review Panel that the Petitioner should be considered to be self-funding in respect of residential home charges. The Appeals Sub-Committee decided that the Review Panel had been justified in considering that, in all the circumstances explained to them, it was reasonable for the Respondents to have decided that the Petitioner had had in her contemplation her potential need for long term care in the future and the relative costs at the time the disposal scheme was entered into. The reference to the disposal scheme was a reference to the arrangements contained in the Minute of Agreement. The Appeals Sub-Committee accordingly held, in effect, that the Petitioner had entered into a scheme with the purpose of avoiding liability for care home charges. The Respondents' view at that time was that the Petitioner had deprived herself of capital assets motivated (at least in part) by a desire to avoid accommodation charges. It is not necessary for present purposes to go any further into the reasoning of the Review Panel or the Appeals Sub-Committee at this stage of matters because, following an earlier Petition for Judicial Review brought by the Petitioner, the Respondents agreed to reconsider matters de novo on the basis that there had been no intentional deprivation of assets. The earlier Petition for Judicial Review was dismissed, of consent, on 12 February 2010 on the understanding that the Respondents would consider matters afresh.

[8] Following dismissal of the Petition for Judicial Review, the Respondents embarked on a fresh process of decision-making. I was informed that on or about 16 March 2010 the Respondents' officers worked out again what they believed the value of the Petitioner's capital to be. They took as the value of the property the figure of £100,000; this was later revised slightly to £105,000. There was no documentary evidence of this calculation any longer in existence, but I was shown a copy of a screen print which was said to show that a calculation was carried out on 16 March 2010. The Respondents also produced a document (7/30 of process) bearing to contain a calculation of capital; I understand that this document was prepared on or around 31 March 2011. It was intended to show the details of the calculation carried out on or about 16 March 2010. The paper shows the value of the Petitioner's capital to be £105,000. There is then an outstanding debt of £25,000 deducted as well as 10 per cent for "disbursement" - i.e. £10,500. No reference was made to the Minute of Agreement or to any possible effect that the arrangements recorded in it might have on the value of the property.

[9] On 24 March 2010 the Respondents wrote to the Petitioner's solicitors asking inter alia for a valuation of the property and for a financial assessment form to be completed. As I understand matters, no such form was submitted, although the Petitioner's solicitors did produce at some stage (exactly when is unclear to me) a valuation of the property prepared in May 2008; this stated that the open market value was between £105,00 and £110,000.

[10] The matter then came before the Social Work Complaints Review Panel on 17 May 2010. The Petitioner was represented by a solicitor, Mrs Fiona Corsar. At this hearing, the Petitioner sought to have overturned the Respondents' decision of 13 July 2006 that she had capital assets in excess of £20,000 and was liable to pay for care home accommodation provided by the Respondents. She also sought to have overturned a decision made by the Respondents on 30 October 2008 that the second standard security granted by her amounted to deprivation of capital to the value of the second loan of approximately £24,000.

[11] For the purposes of the hearing before the Complaints Review Panel, the Petitioner presented a detailed written submission prepared by Mrs Corsar. The submission set out the circumstances surrounding the Petitioner's purchase of the property and referred to the Minute of Agreement. The terms of the Minute of Agreement were summarised in the submission. On pages 3 and 4 the submission stated the following:

"The value of the property is presently £105,000 - £110,000. The total amount owing on said property is approximately £50,265.95. (The Petitioner) took out a further secured personal loan with Halifax Plc on 5 December 2004. This was with the full knowledge of Ian Black who has undertaken all payments in respect of it. (The Petitioner) would have been unable to meet any loan repayments herself and is unable to do so. Ian Black has paid all payments in relation to said loans, insurance and gas maintenance in respect of the property since September 2003. The buildings insurance with Liverpool Victoria amounts to £28.60 per month. The gas maintenance contract (which includes kitchen appliances) amounts to £43.01 per month and the payments to Halifax Plc amount to a total of £331.30 per month. Said payments total £402.91 per month. In the event that the property is not conveyed to Mr Black as the complainer is bound to do in terms of the Minute of Agreement the total of said payments would constitute a debt in relation to the property.

In all of the circumstances, the decision of (the Respondents) that (the Petitioner) had a capital asset on 13 July 2006 is not a reasonable one. It is not a reasonable inference that the transaction involving (the Petitioner) had a purpose of avoiding to pay (sic) accommodation charges. It was not a decision that could have been made by any reasonable Local Authority. The beneficial interest in the property has always been held by Mr Black. In all the circumstances, the decision of (the Respondents) that the second secured advance of £24,000 referred to in the decision of 30 October 2008 was an intentional deprivation of capital by (the Petitioner) is not a reasonable one. The beneficial interest in the property was held by Mr Black. His interest was burdened; it was not a decision that could have been made by any reasonable Local Authority".

The minute of the Social Work Complaints Review Panel hearing records that Mrs Corsar argued that the Petitioner was not the beneficial owner of the property because she had entered into the Minute of Agreement with Mr Black. Mrs Corsar argued, quoting from a guidance booklet on charging for residential accommodation, that the legal owner was the person in whose name the property was held and the beneficial owner was the person who would receive the property. In this case Mr Black was said to be the beneficial owner. In relation to the second loan, Mrs Corsar argued that this issue had been left outstanding following the earlier Petition for Judicial Review. She submitted that the second loan could not be intentional deprivation because the Petitioner had not been the beneficial owner at the time the loan was obtained and the relative standard security granted.

[12] In response to the Petitioner's case, the Financial Support Manager of the Respondents' Adult Social Care Department, Mr Finn, submitted a written note to the Review Panel. This note set out the background circumstances in some detail and, under reference to the relevant guidance document, explained the statutory basis for the guidelines used by the Respondents. In the note it was contended that, by virtue of her residence at the care home, the Petitioner was liable to be charged for her accommodation. The note concluded by observing that the Petitioner held the title to 38 Muirpark Road, Tranent, and was the legal owner of the property. It said that, as such, this asset should be included in her financial assessment with regard to residential charging with the result that the Petitioner was a self-funding client and was liable to pay the charges due. In paragraph 15 the note stated the following:

"Whilst there is a Minute of Agreement in existence between (the Petitioner) and Ian Black, this is a private arrangement that cannot be accepted as having a higher ranking than the law as passed by Parliament. Whilst private individuals are free to enter into whatever private contractual arrangements they see fit, such arrangements do not enable private individuals to 'contract out of' the statutory regime for the assessment of care home charges."

At the hearing Mr Finn argued that the Petitioner had been assessed as a self-funding client. He referred to the letter of 13 July 2006 confirming this. He submitted that the agreement with Mr Black was entirely a private arrangement and that the regulations did not permit private individuals to contract out of their statutory obligations. In regard to the second loan, Mr Finn argued that the date of the loan was so close to the time when the Petitioner moved into permanent residential care that the Respondents considered this to be evidence of deliberate deprivation of capital.

[13] Having considered the written and oral submissions made to it, the Review Panel decided that the Petitioner was and remained the legal owner of the property and as such was liable to be assessed for payment. It was noted that consideration had been given by the Committee to the argument that the Petitioner was not the beneficial owner, but this was not accepted. In relation to the second loan the Review Panel felt that the Respondents' decision was reasonable due to the sum involved and the timing of the loan. The facts showed that the loan had been raised in close proximity to the Petitioner receiving residential care.

[14] The next step in terms of the Respondents' decision-making process was for the decision made by the Social Work Complaints Review Panel to go forward in the form of a recommendation to the Social Work Appeals Sub-Committee of the Respondents' cabinet. This was the body which would make the final determination on the matter.

[15] By letter dated 8 June 2010 to Mrs Corsar, the Respondents notified her of the decision of the Appeals Sub-Committee. The letter explained that the Sub-Committee agreed with the reasoning of the Review Panel that the Petitioner remained the legal owner of the property and also the beneficial owner and considered that the property should be assessed as capital belonging to the Petitioner. The letter also upheld the Review Panel's decision in relation to the second loan.

The Statutory Framework
[16] Section 87 of the Social Work (Scotland) Act 1968 makes provision about charges that may be made by local authorities for services and accommodation. Section 87(3) provides that accommodation provided under the 1968 Act shall be regarded as accommodation provided under Part III of the National Assistance Act 1948 and that sections 22(2) to (8) and 26(2) to (4) shall apply accordingly. Section 22 contains enabling provisions which, so far as relevant, provide that local authorities shall charge the resident the full cost to the authority (the "standard rate") and make provision for people who cannot pay at the standard rate to be assessed so that a lower rate can be determined. It is also provided in sub-section (5) that, in assessing ability to pay, the local authority shall give effect to regulations made for the purposes of the sub-section.

[17] The relevant regulations, to which the local authority shall give effect, are the National Assistance (Assessment of Resources) Regulations 1992 (SI 1992/2977) (the "1992 Regulations"). These contain provisions for calculating the resources of persons liable to be charged for accommodation provided by a local authority. In relation to calculation of capital, the basic provision is in regulation 21, which provides:

"(1) The capital of a resident to be taken into account shall, subject to paragraph (2), be the whole of his capital calculated in accordance with this Part and any income treated as capital under regulation 22.

(2) There shall be disregarded in the calculation of a resident's capital under paragraph (1) any capital, where applicable, specified in Schedule 4."

From this it can be seen that the legislative scheme provides a means of calculating capital, and makes express provision for what is to be deducted by reference to Schedule 4.

[18] The 1992 Regulations also provide in regulation 23 that capital which a resident possesses in the United Kingdom shall be calculated:

"at its current market or surrender value (whichever is higher), less-

(a) where there would be expenses attributable to sale, 10 per cent; and

(b) the amount of any incumbrance secured on it".

Accordingly, there is express provision to take into account secured incumbrances, when assessing the amount of a resident's capital, but not unsecured incumbrances.

[19] It is of some interest also to note that the definition of capital in the 1992 Regulations is a wide one. It covers certain items of income which are treated as capital (regulation 22). It also covers 'notional capital' in terms of regulation 25:

"(1) A resident may be treated as possessing actual capital of which he has deprived himself for the purpose of decreasing the amount that he may be liable to pay for his accommodation".

This, as I understand matters, is an anti-avoidance provision.

[20] For completeness, I should also mention regulation 20, which provides:

"No person shall be assessed as unable to pay for his accommodation at the standard rate if his capital calculated in accordance with Regulation 21 exceeds £22,750".

The grounds of challenge

[21] In the Petition and in a written note of argument lodged before the First Hearing the Petitioner relied on a number of grounds of challenge to the Respondents' decisions of 13 July 2006 and 3 June 2010. She sought reduction of those decisions and a remit to the Respondents to reconsider matters ( the crave for an order appointing the Respondents to grant a discharge of the charging order over the property was not insisted on). The essence of the arguments advanced in the Petition and the Note of Argument was that the effect of the Minute of Agreement, in the circumstances which had occurred, had been to confer on Mr Black the right to demand that the Petitioner should convey the property to him for no further consideration. He had formally called upon her to do so on 21 July 2006. At the First Hearing, Senior Counsel for the Petitioner refined the previous statement of the arguments for the Petitioner down to a simple proposition and did not advance any submission in relation to a number of points of law referred to in the Petition and the Note of Argument (these related broadly to the effect of Rodger (Builders) v Fawdry 1950 SC 482 and to an alleged liability incumbent on the Petitioner to pay damages to Mr Black). He submitted that the Respondents had simply failed to carry out the statutory obligation imposed on them by regulation 23 of the 1992 Regulations because they had not calculated the current market value of the property at 38 Muirpark Road in the light of the Minute of Agreement. Insofar as the Respondents could be said to have made any calculation of current market value, their calculation was inadequate because it took no account of the effect of the Minute of Agreement. It should have been obvious to the Respondents that the existence of the Minute of Agreement was bound to have an effect on the market value of the property. The reality of the position was that Mr Black was the true owner of the property; without his assistance the Petitioner could never have bought it in the first place. The Respondents were aware of the Minute of Agreement, but they effectively ignored it. It should have been obvious to the Respondents that the effect of the Minute of Agreement was that the property had no open market value. In addition, there was nothing to show that the Respondents had considered the deductions referred to in sub-paragraphs (a) and (b) of regulation 23. There was nothing produced to show the nature and content of the calculation supposedly carried out in March 2010; the screen print did not help because it contained no details of the calculation. The paper produced as 7/30 was an ex post facto document and moreover it did not address the second loan. It was unclear why it contained the figure of £25,000 representing the first loan rather than the correct figure of £26,000. Overall, it was clear that matters had gone awry. Accordingly, the Respondents' decisions should not be allowed to stand and matters should be remitted to them to consider the case afresh.

The Respondents' Reply

[22] In response to the Petitioner's reformulated argument, counsel for the Respondent submitted that one should look at the decision-making process as a whole. When this was done, it was clear that the Respondents had carried out at least a reasonable calculation under regulation 23 in March 2010, following dismissal of the earlier Petition for Judicial Review. When the case came before the Complaints Review Panel, the Petitioner had submitted that the value of the property was "presently £105,000 - £110,000". At no stage had the Petitioner put forward any evidence that the Minute of Agreement affected the value of the property. Even now there was no such evidence and her case rested merely on an unsupported assertion. In the circumstances, the Respondents had been (at least) entitled to reject the possible significance of the Minute of Agreement. In any event, the Petitioner was seeking to rely now on material and lines of argument which had not been before the Respondents when they made the challenged decisions. This was not permissible in an application for Judicial Review. Reference was made to the reasoning of the Lord Ordinary (Lord Johnston) in Shetland Line (1984) Ltd v Secretary of State for Scotland 1996 SLT 653 at 658C-D and to Clyde and Edwards on Judicial Review, paragraph 8.09. The only exception to this rule was said to be where a refusal to entertain new material would have the result of putting the United Kingdom in breach of her international treaty obligations (R v Sheffield City Council ex p H [1999] ELR 511; R(Shields) v CICA [2001] ELR 164; R v Secretary of State for the Home Department ex p Robinson [1998] QB 929). Accordingly, the Respondents' decisions should not be disturbed.

Decision

[23] In Shetland Line (1984) Ltd (supra) the Lord Ordinary recognised (at page 658A-C) that irrationality as a ground of challenge in Judicial Review might well involve an error of fact, but such an error must relate to facts material to the decision in circumstances where the opportunity to appreciate the true situation was before the minister, whether personally or in the minds of his officials, at the time when the decision was taken. His Lordship referred to the decision of the House of Lords in Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014 and to a decision by Cook J (as he then was) in Daganayasi v Minister of Immigration [1980] 2 NZLR 130. In the passage from his Opinion relied on by counsel for the Petitioner in the present case, Lord Johnston went on to say (at page 658C-D) that it was essential that the court in exercising its supervisory jurisdiction reviewed the decision "against the background of the material before the minister at the material time and not by reference to subsequent events which may have clarified or altered the factual basis upon which the decision proceeded." In the present case there is no doubt that the Respondents were aware when they calculated the value of the Petitioner's capital in March 2010 of the existence of the Minute of Agreement. It had been drawn to their attention before the earlier Petition for Judicial Review and had been the basis on which the Respondents had previously taken the view that the Petitioner had deliberately deprived herself of capital. When the case came before the Complaints Review Panel (for the second time) on 17 May 2010, Mrs Corsar's submissions made detailed reference to the Minute of Agreement. It is true that she put at the forefront of her approach the proposition that the effect of the Minute of Agreement was to confer on Mr Black the sole beneficial interest in the property, but it is clear that the thrust of her argument was that because of the particular arrangements she had entered into the Petitioner simply did not have any capital assets; putting matters another way, the contention was that the Petitioner's capital was nil because she was bound to convey the property to Mr Black. Indeed that is what Mrs Corsar said in the first sentence of the final paragraph of her written submission where she stated that the Respondents' decision that the Petitioner "had a capital asset on 13 July 2006 is not a reasonable one". It seems to me to be clear that the Petitioner's stance (fairly read and viewed in a realistic sense) was that the property should not be counted as part of her capital because of the effect of the Minute of Agreement. So, this is not a case in which it can be said, in my view, that the facts which were material to the decision or the ability to appreciate the true factual situation were not before the Respondents at the time when they made the impugned decisions. Accordingly, I do not believe that I am precluded from considering the point taken before me on behalf of the Petitioner, although I accept (to some extent) the Respondents' criticism that, in the form in which it was ultimately advanced, the argument was not clearly spelled out in her averments in the Petition. Nonetheless, it was not said on behalf of the Respondents at the Continued First Hearing that they were not in a position adequately to respond to the reformulated line of argument.

[24] Given that the Respondents were fully aware of the reliance being placed on the Minute of Agreement by the Petitioner following the earlier Judicial Review, they were, in my opinion, bound to ask themselves the question what effect it might have on the value of the Petitioner's capital and on the value of the property in particular. Unfortunately, they did not ask themselves any such question. The approach they took was simply to proceed on the assumption that the Minute of Agreement could and did have no possible effect on value. In my view, it should have been obvious to the Respondents that the market value of the property could be affected by the fact that the Petitioner had become subject to a contractual obligation to convey the property to Mr Black. The existence of such a contractual liability (enforceable against the Petitioner) could deter prospective purchasers or operate as a practical obstacle to a sale. Such purchasers might well be advised to avoid buying a property which the owner had already agreed to convey to someone else. It is well-known that buyers of heritable property want certainty not doubt; they are looking for security and not the possibility of a dispute about their ownership or the seller's right to sell. This possible effect on value arising from the Minute of Agreement does not seem to me to depend on subtle or sophisticated points of land law (as the Petitioner originally argued), but rather on the impact of a potential dispute or uncertainty in the real world of the property market. Of course, such an effect on value may only be capable of a somewhat broad estimation, but that is no reason for ignoring it, as the Respondents have, in my view, done.

[25] Counsel for the Respondents argued that the Petitioner had never put forward any evidence to show that the value of the property might be affected by the Minute of Agreement. It is true that the Petitioner did not produce a valuation reflecting the Minute of Agreement, but she did not need to do so in my opinion. Her position was simply that she had previously agreed to convey the property to Mr Black and was now under an obligation to give effect to that agreement; therefore, the property should be left out of account in valuing her capital estate. That issue having been clearly put into play on behalf of the Petitioner, the Respondents were, as it seems to me, bound to give proper consideration to the point. In my view, they have failed to do so and their decisions cannot, therefore, be allowed to stand.

Remedy

[26] Counsel for the Respondents submitted that, in any event, the part of the decision of 8 June 2010 relating to the second loan should not be reduced. She said that there had been no attack made on this aspect of matters by the Petitioner. This is not correct, at least insofar as I understood the Petitioner's submissions. It was argued on her behalf that the evidence relating to the calculation carried out in March 2010 (comprising the screen print and, so far as it went, the document 7/30 of process) did not make it clear that any proper consideration had been given to the effect of the second loan on the Petitioner's capital at the time when the regulation 23 calculation was alleged to have been carried out. This deficiency, it was said, could not be cured by anything which had happened later, at the stage of the Complaints Review Panel or the consideration of the recommendation by the Social Work Appeals Sub-Committee of the Respondents' cabinet.

[27] In my opinion, there is force in the arguments advanced for the Petitioner on this point. In any event, it seems to me that it would be more satisfactory, as a matter of good public administration, for the Respondents now to be asked to reconsider the whole picture relating to the value of the Petitioner's capital, including the effect of the second loan.

[28] In the circumstances, I have granted decree sustaining the Petitioner's plea-in-law, repelling the Respondents' pleas and reducing the decisions contained in their letters of 13 July 2006 and 3 June 2010. This means that it will now be for the Respondents to consider, of new, the value of the Petitioner's capital in accordance with the 1992 Regulations. In so doing, they will require to take account of the effect of the Minute of Agreement on the value of the property. It is not for this court to say what the outcome of that consideration may prove to be; that is a matter on which the Respondents will require to come to their own independent view.

[29] I have reserved all questions of expenses.