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You are here: BAILII >> Databases >> England and Wales Care Standards Tribunal >> Puretruce Health Care Ltd v National Assembly for Wales [2005] EWCST 544(EA-W) (5 September 2006) URL: http://www.bailii.org/ew/cases/EWCST/2006/544(EA-W).html Cite as: [2005] EWCST 544(EA-W)

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Puretruce Health Care Ltd v National Assembly for Wales [2005] EWCST 544(EA-W) (5 September 2006)

Puretruce Health Care Limited (Holly House 3) -v- National Assembly for Wales [2005] 544.EA-W.JP Puretruce Health Care Limited (Holly House 4) -v- National Assembly for Wales [2005] 597.EA-W Puretruce Health Care Limited (The Beeches) -v- National Assembly for Wales [2005] 596.EA-W
Before: Mr John Reddish (Chairman) Mrs Geraldine Matthison Mr Jim Lim

Hearing dates: 15, 16, 17, 18, 22, 23, 24, 25, 26 and 31 May, 1 and 2 June and 10, 13, 14 and 20 July 2006.

Applications

On 26 August 2005 the Applicant company appealed under section 21(1) of the Care Standards Act 2000 against the decision of a justice of the peace, made on 25 August 2005 under section 20(1) of the 2000 Act, to cancel its registration in respect of an establishment, namely Holly House Nursing Home, Victoria Road, Fleur-de-Lys, Blackwood.

On 21 November 2005 the Applicant appealed under the same section of the 2000 Act against the decision of the National Assembly, made on 24 October 2005 under section 14(1)(c) of the 2000 Act, to cancel its registration in respect of the same establishment.

On 17 November 2005 the Applicant appealed under section 21(1) of the 2000 Act against the decision of the National Assembly, made on 20 October 2005 under section 14(1)(c) of the 2000 Act, to cancel its registration in respect of another establishment, namely The Beeches Nursing Home, Church Road, Blaenavon, Pontypool.

By an order made by the President of the Tribunal on 9 January 2006 the three appeals were consolidated.

Representation

At the hearing Mr Jonathan Furness QC, instructed by Ms Rachel Stephens, Solicitor of the Directorate of Legal Services, National Assembly for Wales, represented the National Assembly.

Mr Julian Reed of Counsel, instructed by Ms Alison Castrey, Solicitor of Bristol, represented the Applicant company.

The evidence

The Tribunal heard oral evidence on behalf of the National Assembly from:

Mr Geraint Morgan, Senior Nurse for Caerphilly Local Health Board;

Mr Clive Foxwell, a gas service engineer and CORGI registered plumber employed by W. Mullett Limited;

Mr Ian Mullett, the managing director of W. Mullett Limited;

Mrs Alison Price, an Inspector for Health and Adult Services with the Care Standards Inspectorate for Wales;

Mr Michael Latta, the Credit Manager of Corona Energy plc;

Mr Anthony Hile, the Mid-Wales Regional Director of the Care Standards Inspectorate for Wales;

Mr John Powell, a Senior Inspector for Health and Adult Services with the Care Standards Inspectorate for Wales;

Mr Michael Warsop, the Estates and Facilities Inspector with the Care Standards Inspectorate for Wales;

Mrs Lynne Jenkins, an Acting Senior Inspector for Health and Adult Services with the Care Standards Inspectorate for Wales;

Mr Derrick Powell, the contracts manager of the Directorate of Social Services, Caerphilly County Borough Council;

Mr Peter Jones, the acting Chief Accountant for the National Assembly for Wales;

Mrs Gillian Walker, a Liaison Nurse Practitioner with Gwent Healthcare NHS Trust;

Mrs Ruth Edmunds, a Community Nurse;

Mrs Susan Bryant, formerly branch manager of Community Careline Limited;

Mrs Marion Guest, the service manager of Community Careline Limited;

Mrs Angela Wilson, a Senior Nurse Manager with Gwent Healthcare NHS Trust;

The Tribunal also received written evidence on behalf of the National Assembly from:

Ms Barbara Lewis-Wharton, a Health Inspector with the Care Standards Inspectorate for Wales;

Mr Michael Xuereb, a civil servant in the Office of the Registrar of Companies, Cardiff;

Mr Nigel Barnett, the Assistant Director of Social Services, Caerphilly County Borough Council;

Mr Mark Sly, a civil servant in the Office of the Registrar of Companies, Cardiff;

Mr Ernst van Eijkern, an Inspector for Health and Adult Services with the Care Standards Inspectorate for Wales;

Mr Brian Minney, the Finance Manager of the Care Standards Inspectorate for Wales;

Mr Stephen Tolson, the Business Debt Collection Team Manager of Powergen Retail Limited;

Ms Jessica Mary Pope, a Pharmacy Inspector with the Care Standards Inspectorate for Wales;

Mrs Sally Bond, the South East Wales Regional Director of the Care Standards Inspectorate for Wales;

Ms Jenna Lear, a carer with Community Careline Limited; and

Ms Susan Malson, a carer with Community Careline Limited;

The Tribunal heard oral evidence on behalf of the Applicant from:

Mrs Patricia P., daughter of a former resident of Holly House;

Mrs Rachel Tanta, formerly the deputy manager of Holly House;

Mr Malcolm C., son in law of a resident of The Beeches and the Secretary of the "Friends of The Beeches Residents" group;

Mr Adrian S., son of a resident of The Beeches and the Chairman of the "Friends of The Beeches Residents" group;

Mrs Susan Greening, the acting manager of Brithdir Nursing Home and formerly the acting manager of Holly House;

Mr Wynne Williams, the managing director of Cymru Healthcare;

Mr Anthony Arcari, a Senior Officer and the Health and Safety Co-ordinator for Torfaen County Borough Council;

Mrs Tanya Strange, Senior Nurse with Torfaen Local Health Board;

Mr George S., son of a former resident of Holly House;

Mr Adrian Taylor; a gas engineer trading as Catering and Bar Installations;

Mr Paul Mackenzie, a gas engineer employed by Wales and West Utilities (part of Transco);

Mr Len M., nephew of a resident of The Beeches;

Mrs Rachel Pritchard, the acting manager of The Beeches, formerly the Clinical Nurse Manager for the Applicant company;

Dr Prana Ballava Das, a director of the Applicant company and the controlling shareholder of the holding company;

Mr Paul Black, the Chief Executive of the Applicant company;

Mr Gordon Cole, a policy adviser and representative for Care Forum Wales and an independent consultant providing advice to local authority and independent sector care providers.

The Tribunal also received written evidence on behalf of the Applicant from:

Mr Raymond E., son in law of a former resident of Holly House;

Mrs Linda C., daughter of a former resident of Holly House;

Mr Paul J., son in law of a resident of The Beeches;

Mrs Jenny W., daughter of a resident of The Beeches;

Mrs Denise E., daughter of a resident of The Beeches;

Mr T W., nephew of a resident of The Beeches;

Mrs Joan J., daughter of a resident of The Beeches;

Mrs B.P., daughter of a resident of The Beeches;

Mrs J.H., daughter of a resident of The Beeches;

Mrs Sandra D., daughter of a resident of The Beeches;

Mr Pankaj Bakshi of the principal of Hodge Bakshi, Chartered Accountants and Tax Advisers; and

Mr Richard Beech of Beech & Co, solicitors.

The Tribunal also read the documents submitted by the parties (including the reports of Mr Cole dated 23 February 2005 and 23 April 2005 and of Dr Niall Moore, Consultant Psychogeriatrician, dated 11 and 14 March 2005, prepared for the purposes of the Tribunal hearing in May 2005) contained in 5 bundles, sub-divided into sections and comprising a total of 2,290 pages.

Preliminary matters

The Tribunal made restricted reporting orders in relation to each appeal, pursuant to regulation 18 of the Protection of Children and Vulnerable Adults and Care Standards Tribunal Regulations 2002, prohibiting the publication (including by electronic means) in a written publication available to the public, or the inclusion in a relevant programme for reception in England and Wales, of any matter likely to lead members of the public to the identify any vulnerable adult involved in the cases. The Tribunal was satisfied that such orders would be appropriate to safeguard the welfare of the vulnerable adults concerned and to protect their private lives.

On 7 July 2006 the President issued a witness summons directed to Mrs Bond requiring her to attend the adjourned hearing on 10, 13 or 14 July 2006. The Applicant company served this summons on Mrs Bond's authorised agent, Mrs Sue van Eijkern, on 10 July 2006. On 10 July 2006 Mrs Bond applied to have the summons set aside under regulation 16(3). On 13 July 2006 the Chairman set aside the summons. The order was not opposed on behalf of the Applicant company in the light of the medical evidence supplied by Mrs Bond's General Practitioner.

Facts in relation to Holly House

The material facts found by the Tribunal were as follows:

1. The Applicant company (which was incorporated on 20 March 1995) owns the business known as Holly House Nursing Home, situated in Victoria Road, Fleur-de-Lys, near Blackwood.
2. The Applicant company is a wholly owned subsidiary of L-Giri Limited. Dr Prana Ballava Das and his wife Dr Nishebeta Das are directors of both the Applicant company and its holding company and they are the owners of all of the issued shares in the holding company.
3. The building known as Holly House is owned by the Puretruce Pension Fund, a fund of which Dr Das and his wife are the beneficiaries. The Applicant company pays rent to the Fund at the rate of £40,000 per year. The Applicant company sold the building to the Fund in the year ended 31 October 2003 for £450,000. In the same year, the company made contributions to the Fund on behalf of Dr Das and his wife of £102,000 to enable the Fund to make the purchase.
4. Dr Das qualified as a doctor in India in 1970 and came to the UK in 1976. In 1981 he moved to Wales and became a partner in a general practice in Bargoed. In 1986 Dr Das and his wife established Holly House as a care home for 10 residents. They (and the group of companies controlled by them) subsequently expanded their operations very considerably and at one point owned and operated 24 care homes.
5. Mr Black was appointed as the Chief Executive of the Applicant company in 2003. His background is in sales and marketing. He worked for textile manufacturing companies and, latterly, for distributors of medical products. He is responsible for the commercial management of all of the Applicant company's homes and his duties include the procurement of supplies and the structuring of staff training. In 2005, following the departure of the company's Operations Manager, Mr Yelland, Mr Black took on additional responsibilities for the maintenance and servicing of the company's homes. Mr Black has no power to sign cheques on the company's bank accounts. The only authorised signatories are Dr Das and his wife.
6. Holly House was registered as a nursing home (under the Registered Homes Act 1984) on 28 November 2001, having previously been operated as a care home. The Care Standards Inspectorate for Wales (the CSIW) took responsibility for the inspection of the home from April 2002 and, in June 2002, Mrs Price became the lead inspector in respect of the home.
7. Holly House was registered to accommodate 32 residents with dementia and/or mental infirmity who require nursing care and three residents who require personal care.
8. From November 2002 until November 2005 the Applicant company failed to pay registration fees due in respect of Holly House amounting in total to £4,852. The only payment made by the company to the CSIW in respect of Holly House during that period was £1,690 (on 22 April 2004) in respect of the annual registration fee for the year 2003-4.
9. In July 2004 a team of nurses from Gwent Healthcare NHS Trust was sent into Holly House in order to provide support and monitor the care given. Their report indicated that there had been some improvements but that significant problems remained.
10. On 2 August 2004 the CSIW decided that the Applicant company's record of breaches of the regulations; failure to act upon notices to remedy breaches and general failure to run Holly House in an appropriate manner justified the issue a notice of proposal to cancel the registration. Inspectors had reported, inter alia, that there was a lack of investment in the fabric of the building; that the premises were not always clean and free from odours; that service users dignity was not always adequately maintained; that the home did not always have an adequate supply of equipment; that risk assessments and "care documentation" were inadequate; that staffing levels did not meet the minimum requirements; that the variety and content of the meals provided was unsatisfactory; that the practices in relation to the recording of medication were inadequate; that there was no formal supervision or appraisal of staff and that there was a lack of systems in place to ensure the safety and welfare of service users and staff.
11. On 27 August 2004 Mr Adrian Taylor and his associate Mr Phil Pritchard of Pritchard Service Solutions undertook a survey of the gas installation at Holly House. They advised Mr Yelland and Mr Black that larger pipes needed to be installed to supply the boilers and the kitchen appliances. They issued a warning notice that the installation was "at risk". Thereafter, the Applicant company engaged another contractor (Mr Morris) to install some new internal gas pipes in the kitchen and laundry room but nothing was done to improve the capacity of the external pipe carrying gas from the meter into the home. When Mr Taylor subsequently examined the remedial work (in August 2005) he concluded that it had been done in a less than satisfactory manner.
12. On 12 September 2004 Mrs Greening was appointed as acting manager of Holly House following the resignation of the former acting manager, Mr James Adenyi. Mrs Greening did not immediately apply to the CSIW to be registered as the manager because, in the absence of Dr Das abroad, she could not obtain a cheque from the Applicant company to pay the registration fee. Eventually, (in November 2004) Mrs Greening paid the fee using a personal cheque and she was reimbursed by Mr Black in cash.
13. On 14 September 2004 Mrs Bond issued a notice of the decision to cancel the registration of the Applicant company on behalf of the National Assembly, specifying 22 breaches of the Care Homes (Wales) Regulations 2002.
14. In or about October 2004 Dr Das decided that, in order to ease the "cash flow difficulties" of the Applicant company, he would stop paying to HM Inland Revenue the monthly amounts due from the company in respect of its employees' income tax and National Insurance contributions. Dr Das did not disclose this information to Mr Black or to others working for or advising the company.
15. On 12 October 2004 the Applicant company appealed to the Tribunal against the Respondent's decision to cancel its registration in respect of Holly House. The appeal was heard over 11 days in April and May 2005. On 15 May 2005 the Tribunal allowed the appeal and ordered that the decision of the National Assembly should have no effect. The Tribunal imposed two conditions on the registration: first, that a full time, home specific deputy manager should be appointed for Holly House and, secondly, that the registered provider should provide to the CSIW, before the last day of the month, every two months, commencing on or before 31 July 2005, a report from an Independent Consultant in Health and/or Social Care Services, identifying progress made against set targets to meet and maintain the National Minimum Standards for Care Homes (Wales) 2002 and the Care Homes (Wales) Regulations 2002.
16. In their written decision the Tribunal concluded, inter alia, that

(a) Mrs Price had employed a "shotgun" approach to the regulations, highlighting any breach found, regardless of frequency or severity;

(b) Holly House was a home with a history of serious difficulties in attaining appropriate standards of care;

(c) the attitude of Dr Das had been "a major stumbling block" to the improvement of standards;

(d) had they been asked to consider the case in September 2004, their decision would almost certainly have supported closure;

(e) were it not for the appointment of Mrs Greening and the perseverance and persistence that she had shown to try to improve the situation, they would have confirmed the cancellation notice;

(f) the appointment of a deputy manager would increase the rate of progress and ensure that all of the "evidential paperwork" would be in place; and

(g) the decision was "on the finest of margins" and "very borderline" and would probably offer Holly House a last chance to "put their house in order".

17. Following the decision of the Tribunal the Applicant company asked Mr Cole to take on the role of independent consultant. Mr Cole advised Dr Das that, if the company intended to carry on the business at Holly House, it would have to demonstrate an immediate and sustained commitment to implementing written action plans.
18. Between May and August 2005 the Applicant company undertook some work at Holly House. The roof was repaired; the enclosed garden area was renovated and an assisted shower was installed, though not used. The improvements to the fabric of the building and its surroundings were not as extensive as Mrs Greening (as the acting manager) would have liked.
19. In May 2005 Corona Energy (who had been supplying gas to the Applicant company's homes since March 2000) informed the CSIW that there were substantial amounts owed to them by the Applicant for the supply of gas to four care homes including Holly House. The amount outstanding in respect of Holly House was said to be £10,197 and the total amount owing to Corona Energy from the Applicant was said to be in excess of £50,000. The representative of Corona Energy said that they intended to take steps to cut off the supply of gas to all of the Applicant's homes.
20. On 12 May 2005 Mrs Price wrote to the Applicant asking for clarification of the action that would be taken to ensure that the homes would continue to receive a supply of gas. On the same day Mr Black informed the CSIW that he had resolved the problem and had sent a cheque for £10,000 to Corona Energy and had arranged to pay the outstanding balance by 25 May 2005.
21. On 16 May 2005 Mrs Price and Mr Morgan (who was then seconded to the CSIW from Caerphilly Local Health Board) visited Holly House. They noted and reported many breaches of the regulations relating to care plans, routine maintenance of the fabric of the building and the renewal of safety certificates.
22. In a letter dated 23 May 2005 Mrs Price notified Mr Black of the concerns of the CSIW following her visit on 16 May and requested an "action plan" within 5 working days.
23. On 26 May 2005 Mrs Price received a facsimile transmission from Powergen informing her that they had "raised a disconnection warrant" in respect of the Applicant company's home at Brithdir and that they would be proceeding to disconnection of the electricity supply to that home.
24. On 30 May 2005 Mrs Greening sent Mrs Price her "action plan in relation to the stated concerns". She promised to "consider alternative domestic hours" and to implement a more robust cleaning rota; to "look at room usage" in an attempt to solve the intractable problem of storage and to try to adhere to "a programmed approach to the environment". Mrs Greening acknowledged a failure in relation to the care plan of Mr H.; said that she would undertake a full review of the pressure relieving needs of the residents and outlined her plans for staff training.
25. On 8 June 2005 Mr Cole prepared a draft job description for a clinical services manager (or deputy manager) of Holly House with the intention that it should be the subject of further discussion and amendment. The Applicant company subsequently used the draft without either amending it to make it specific to Holly House or transcribing it.
26. On 16 June 2005 the CSIW (represented by Mrs Sharon Rees, the Director of Operations, Mrs Bond and Mr John Powell) held a meeting with Dr Das, Mr Black and Mr Cole in order to "progress matters" and to "forge new relationships" following the decision of the Tribunal.
27. During the meeting Mrs Bond said that, unusually, a second inspector would be allocated to accompany Mrs Price on future inspections of Holly House. Dr Das said that he was reluctant to agree to Mrs Price continuing as the inspector of Holly House at all because the matron and staff were scared of her. Mrs Bond rejected this contention on the basis that it was wholly unsupported by the evidence given by Mrs Greening to the Tribunal. It was agreed that, before the next annual inspection, the baseline from which to assess compliance would be the matters said to be outstanding in the letter from the CSIW dated 23 May 2005 and the 2004 Inspection Report. It was also agreed that Mr Cole would assist the Applicant company in formulating an action plan. During a discussion about staffing levels, Dr Das commented that the condition imposed by the Tribunal relating to the employment of a deputy manager would make Holly House "financially unviable" but he would accept it in the short term.
28. At the end of the meeting, Mrs Rees raised "the issue of outstanding registration fees" pointing out that the Applicant company and its holding company had failed to pay fees amounting in total to £27,760 in respect of five homes (Valley Manor, The Village, Holly House, The Beeches and Brithdir) from 2002-3 to date. It was agreed that duplicate invoices would be supplied. The Applicant did not pay the amounts outstanding and remained in default at the date of the hearing.
29. On 16 June 2005 Caerphilly County Borough Council received a letter from Dr Das in which he said that, without support from Caerphilly as its only purchaser, the Applicant company could not survive.
30. On 21 June 2005 Mr Barnett of Caerphilly County Borough Council and Ms Chrissie Hayes, the Nursing Director of Caerphilly Local Health Board, wrote jointly to Dr Das. They confirmed that the local authority and the local health board would not contract further with Holly House until the conditions imposed by the Tribunal were fulfilled but expressed optimism that, following the meeting on 16 June 2005, standards would be achieved in line with the proposed action plan to be devised by Mr Cole.
31. On 22 June 2005 Mr Cole visited Holly House. He noted that there had been "a positive improvement" in dealing with the regulatory requirements but commented that the acting manager (Mrs Greening) and the staff were "struggling to maintain regulatory requirements and minimum standards" and that there was "a lack of confidence about the future of Holly House" caused by "the lack of confirmed plans for the improvements required". Mr Cole made detailed observations about the creation of a secure recreational area in the garden (in respect of which no action had been taken); the installation of assisted baths or showers (in respect of which, again, no action had been taken); the planning and monitoring of maintenance and repairs (which needed to be improved); the storage of incontinence pads (which required a decision to be made and implemented without further delay) and the appointment of a deputy manager (which should have been completed by 20 June 2005). Mr Cole concluded that "urgent action" was necessary "to invest in improvements to basic facilities and the fabric of the building and in staffing".
32. On 24 June 2005 Dr Das wrote to Mr David Street, the Director of Finance of Caerphilly County Borough Council, setting out the creditors to whom payments had to made urgently and the amounts due to them totalling £49,360.96 and asking for financial assistance from the Council. At the hearing Dr Das explained that he had understood that funds might be made available by Caerphilly County Borough Council and that he was seeking, in this and in his earlier letters, written in November and December 2004, to secure "cheap money" by way of a loan from the Council to assist the Applicant company.
33. On 27 June 2005 Mrs Greening's daughter died suddenly of an unexplained illness. Mrs Greening was devastated and took time off work. However, she returned on 11 July 2005 to prepare for the forthcoming inspection of Holly House by the CSIW.
34. On 1 July 2005 Mr Barnett wrote to Dr Das informing him that Caerphilly County Borough Council had no authority to make the requested loan; expressing concern about the "financial difficulties" and seeking assurances that no residents of Holly House would be put at risk and that the programme of development would not be jeopardised.
35. On 1 July 2005 the Applicant company appointed Mrs Tanta as deputy manager of Holly House. Mrs Tanta qualified as a nurse in her native South Africa in 1975 and worked there until she came to the UK in March 2004 and began working for the Applicant at Brithdir. In April 2004 Mrs Tanta moved to Holly House and worked as a nurse on night shifts and occasional day shifts until her appointment as deputy manager.
36. On 12 July 2005 Mrs Pritchard informed the CSIW that Mrs Greening had found another job and would soon be leaving Holly House.
37. On 13 July 2005 Mrs Price wrote to Mrs Pritchard requesting "comprehensive information relating to Mrs Tanter's (sic) induction on to the day shift and into her new role". Mrs Greening replied on 28 July 2005 commending Mrs Tanta as an experienced nurse who "deserved the chance to develop further in her new role". Mrs Greening also explained that it had not been necessary to recruit a further member of staff "to replace Mrs Tanta's hours" because there were only 18 residents in Holly House; the staffing notice therefore required only one nurse on duty at any time and Mrs Tanta was "working opposite" to her.
38. On 14 July 2005 the Applicant company belatedly filed its accounts for the year ended 31 October 2003 with Companies House in Cardiff. These accounts showed that the company made a loss of £513,475 in that year. In the previous two years the company had made losses of £633,677 and £1,599.570 and the deficit in shareholder's funds had increased from £754,857 in 2001 to £2,868,302 in 2003. But for the profit on the sale of Holly House to the Puretruce Pension Fund, the loss in 2002-3 would have been £878,673 (adjusted for the pension contribution). The accounts also showed that Dr Das owed the company £235,157 as at 31 October 2003 on his director's loan account (increased from £177,370 on 31 October 2002) and that the company owed its bankers £2,829,131.
39. Throughout her time as acting manager of Holly House (from September 2004 to July 2005) Mrs Greening was aware of difficulties with the supply of gas. She saw that warning notices had been placed on the appliances. These were removed when some of the pipes were replaced by Mr Morris. The catering staff frequently complained to her about the inefficiency of the kitchen appliances. In July 2005 Mrs Greening warned Mr Black that Holly House no longer had a valid gas safety certificate (the previous certificate having expired in June 2005) and that, for the forthcoming annual inspection by the CSIW, such a document would obviously be required. Mr Black eventually contacted Mr Taylor of Catering and Bar Installations but not until the beginning of August 2005.
40. On 19 July 2005 Mr Black wrote to Mrs Bond informing her that he had resigned as Chief Executive of the Applicant company and would be leaving on 29 July 2005. Mr Black did not, in fact, leave. He remained employed by the Applicant on a month to month contract.
41. On 29 July 2005 Dr Das wrote to Mrs Bond to inform her that Mrs Greening had resigned because the CSIW would not accept her application to become the registered manager of Holly House and that the "Deputy Matron" (Mrs Tanta) would be in charge of Holly House until he could find a suitable candidate for the manager's job. Dr Das said that he deplored the situation at Holly House, which, he said, was "entirely created by … the CSIW".
42. On 31 July 2005 Mrs Greening left Holly House. On the same date she wrote to the CSIW to inform them that she had resigned her post.
43. On 4 August 2005 Mr Taylor visited Holly House and carried out a visual inspection of the gas pipes. He saw immediately that the external pipework had not been replaced and also formed the view that the internal work that had been done was "not up to current standards". Mr Taylor immediately informed Mr Black that he would not be able to issue a gas safety certificate and that, on the contrary, if he were asked to undertake a formal inspection he would be obliged to issue a warning notice in respect of the installation. Mr Black asked Mr Taylor to undertake the necessary remedial work as soon as possible. Mr Taylor said that, because of other commitments, he would not be able to start work for several weeks.
44. On 9 August 2005 Mrs Price and Ms Lewis-Wharton (as support inspector) conducted an inspection of Holly House. At the beginning of the inspection Mrs Price suggested that Mrs Tanta should refer to the Regulations, the National Minimum Standards and the Inspection Report of June 2004. Mrs Tanta searched for but was unable to find copies of any of these documents in the files at Holly House.
45. Mrs Price and Ms Lewis-Wharton found that there had been improvements in the care planning and assessment documentation and in the recruitment procedures and training at Holly House but they were particularly concerned about the lack of compliance with a fire officer's inspection report; the lack of certain fundamental nursing policies and procedures; the absence of evidence of appropriate staff training; the lack of an appropriate number of assisted shower and bath facilities and the fact that, following the departure of Mrs Greening, staff supervision appeared to have ceased. The inspectors noted that one assisted shower had been installed on the top floor of the home but that it appeared to be old and rusty.
46. On 9 August 2005 Mrs Tanta told Mrs Price that she required more training in order to meet her own professional obligations to the Nursing and Midwifery Council. Mrs Tanta was surprised when Mrs Price referred to her as the acting manager and insisted that she was only the deputy manager. She was apparently unaware that Dr Das had informed the CSIW that she would be in charge of the home for the time being. Mrs Tanta also informed Mrs Price that she had no knowledge of the relevant regulations or of the national minimum standards. During a subsequent conversation with Mrs Price (at Brithdir), Mrs Tanta insisted that she had only ever been the deputy manager of Holly House and accepted that she did not have the necessary knowledge or experience to be the manager.
47. During the afternoon of 9 August 2005 Mrs Price and Ms Lewis-Wharton met relations of residents at Holly House who had been informed by Dr Das and/or Mr Black that inspectors would be present on that date. The meetings developed into a series of confrontations with those who had come to believe that their relations might have to be moved from Holly House because of over zealous intervention by the CSIW. Mrs Price invited them to consider her reports so that they might be better informed.
48. Mrs Price had also noted that Holly House did not have an up to date gas safety certificate. Following the inspection on 9 August, Mrs Price issued a notice requiring the provision of a certificate by 12 August 2005.
49. On or about 10 August 2005 Mr Black contacted Mr Taylor and told him that he needed a gas safety certificate within 3 days. Mr Taylor declined to provide a certificate until completion of the remedial work but agreed to supply a letter setting out his plan to start that work on 12 September 2005.
50. On 12 August 2005 the CSIW received, by facsimile transmission from the applicant company, a copy of a letter from Catering and Bar Installations to the effect that the company would commence remedial works to the gas installation on 12 September 2005. In the light of this letter (and the delay disclosed by it), Mr John Powell decided to initiate an assessment of the risk of harm to the residents and staff of Holly House and asked Mr Warsop to arrange for a qualified gas engineer to conduct an inspection of the gas installation.
51. On 17 August 2005 Mrs Price wrote to Dr Das asking him to clarify his intentions with regard to the arrangements to be made in the light of Mrs Greening's departure. Dr Das did not reply.
52. On 22 August 2005 Mr Cole again visited Holly House and, on 24 August 2005, he made a further progress report in writing. He noted that extensive repairs had been completed to the flat roofs and that there had been improvements in the elimination of offensive odours; the maintenance of the grounds; the keeping of care records; the supply of essential goods and the training of staff. He concluded that "some significant progress" had been made "in remedying long outstanding maintenance items" but that staff recruitment remained "a challenge" and that the continued low occupancy rates threatened the continued viability of the home.
53. On 22 August 2005 Mrs Price informed Dr Das of the CSIW's decision to conduct inspections of the gas installations at Holly House and The Beeches on 25 August 2005.
54. On 23 August 2005 Mr Black wrote to Mrs Price with reference to the gas safety certificates in respect of Holly House and The Beeches. He explained that, at the end of July 2005, gas engineers had said that they were "happy with the status of the gas appliances and internal piping" at Holly House but because "legislation had moved on" it would be necessary for "the main external gas main" to be "upgraded". Mr Black said that the work would be completed by the end of August or early September. This letter did not persuade the CSIW to abandon their plans to undertake inspections of their own.
55. At about 8.30 a.m. on 25 August 2005 Mr Warsop met Mr Foxwell at Holly House and asked him to conduct an inspection of the gas installation. Mr Foxwell conducted a visual examination and tested the "pressure drop" in the pipes serving the various gas appliances. He found that, in all cases, the calculated pressure drop exceeded the maximum permitted and concluded that the pipes were grossly undersized.
56. At about 9 a.m. on 25 August 2005 Mr Black arrived at Holly House. He told Mr Warsop that he was unable to remain at Holly House because of commitments elsewhere but assured him that he wished to work with the CSIW to solve any problems with the gas installation.
57. While Mr Foxwell was inspecting the installation at Holly House one of the catering staff asked him whether he had come "to fix the cooker". She explained that the flame on the cooker kept going out. Mr Foxwell took this comment to be further confirmation of his assessment that the problem was insufficient gas pressure caused by undersized pipes.
58. At about 10.30 a.m. on 25 August 2005 Mr Foxwell contacted his employer, Mr Mullett and expressed his concern that the gas installation at Holly House might be "immediately dangerous". Mr Mullett made some calculations based upon the data supplied to him by Mr Foxwell and confirmed that Mr Foxwell's preliminary view as to the dangers presented by the "undersized gas pipe work" was correct. Mr Mullett instructed Mr Foxwell "to advise the building management that the installation was unsafe".
59. Mr Foxwell was unwilling to leave Holly House without isolating at least some of the gas appliances. Before leaving to visit The Beeches, he disconnected all save one of the boilers and left the kitchen appliances temporarily in operation to allow the staff to cook lunch for the residents.
60. When Mr Foxwell and Mr Warsop returned to Holly House, they advised Mr Black that the gas supply to the heating and hot water boilers would have to be turned off to eliminate the immediate risk to the residents. Mr Black accepted this advice.
61. After further discussions at Holly House, Mr Foxwell contacted Mr Mullett again and discussed with him how the installation at Holly House might be left operational. Mr Mullett made some further calculations and suggested that either the boilers which provided hot water or the kitchen appliances could safely be left operational but not both. Mr Mullett also confirmed that his company would make workmen available on the following day and over the forthcoming bank holiday weekend to render the installation safe by 29 August 2005.
62. During the afternoon of 25 August 2005 there was a series of meetings variously attended by Mr Derrick Powell (of Caerphilly Social Services); Mr Morgan (of Caerphilly Local Health Board); Mr John Powell, Mrs Price; Mr Warsop; Mr Foxwell; Mr Black; Mr Peter Williams (Puretruce Health Care's "retained builder"); Mr Carl Sandercott (the handyman at Holly House); Mr Taylor (Catering and Bar Installations) and Mr David Thomas, another gas fitter who worked in association with Mr Morris. Mr Warsop and the gas fitters all agreed that the supply of gas from the meter to the appliances in Holly House was insufficient because the external gas pipe from the meter to the house did not have sufficient capacity. Mr Foxwell said that the gas installation was "immediately dangerous" because there were eight appliances, all of which were "at risk". Mr Warsop expressed the view that the gas supply should be attended to as a matter of urgency. Mr Taylor agreed that the appliances were "at risk" but was not inclined to accept Mr Foxwell's contention that the cumulative effect was to place the installation in the "immediately dangerous" category. The dispute was of little significance because the responsible registered gas fitter was obliged by the relevant regulations to post warning notices on the "at risk" appliances and Mr Black accepted that it would be wholly irresponsible of the staff of Holly House to continue to use them when faced with such notices. Mr Taylor pointed out that he had warned the applicant company that work needed to be done on the gas installation in 2004 but it appeared that only part of the work had been done by another contractor. Mr Black said that he thought that the work done on the internal pipe work had been sufficient to render the installation safe but accepted that more work was needed; that Mr Taylor was unable to undertake that work until September 2005 and that the delay was unacceptable.
63. Accordingly, those present at the meetings discussed various options that might be implemented to avoid moving the residents out of Holly House. There was talk of moving the residents to other parts of the building but eventually it was agreed that the only viable option was to shut down all of the gas appliances save the two boilers providing hot water and to make other arrangements to meet the needs of the residents for heating, hot food and clean laundry until the necessary improvements to the gas installation could be completed. It was envisaged that the necessary work would be completed (by W. Mullett Limited) within a few days. Mr Black said that he could not finally agree to instruct Mr Mullett's company to undertake the work without consulting Dr Das. Mr Derrick Powell confirmed that alternative, electric heating and cooking appliances and hot food would be made available by Caerphilly Social Services.
64. At about 5 p.m. on 25 August 2005 Dr Das arrived at Holly House having been summoned by Mr Black. As soon as he arrived and saw Mrs Price, Dr Das became angry. He refused to accept that the gas installation would have to be shut down. He told Mr John Powell and Mrs Price that Mr Foxwell was "not unbiased". He was rude and abusive to both Mr Foxwell and Mr Taylor and aggressive to Mr John Powell and Mrs Price, accusing them of showing off and of being "bombastic". He loudly suggested that the gas companies were "robbers" who were trying to make money out of him. Mr John Powell told Dr Das that if he were not prepared to accept the compromise previously devised, the CSIW would proceed forthwith to apply to a justice of the peace for the emergency cancellation of the applicant company's registration in respect of Holly House. At this Dr Das became very angry and said that he did not recognise the validity of the opinions of the gas engineers.
65. Dr Das demanded that a further opinion as to the safety or otherwise of the gas installation should be obtained from Transco. Mr Morgan unsuccessfully endeavoured to persuade Dr Das to calm himself and to listen to what was being said about the risks to residents. Dr Das repeatedly claimed that the building was safe, that there had been no problems during the many years it had been operated as a care home and that he was the victim of a vendetta organised by the CSIW.
66. Mr Black telephoned the Transco emergency number and, in due course, Mr Mackenzie arrived at Holly House. He tested the pressure of the gas being supplied to the meter and pronounced it satisfactory. He was prevailed upon by Dr Das to test the supply of gas to the appliances in the kitchen. He did so and found nothing to lead him to the conclusion that there was a danger to the residents. Mr Foxwell, who had conducted a more thorough examination, sought to persuade Mr Mackenzie that it was his duty, in the circumstances, to cut off the supply of gas to Holly House. Having consulted his employers, Mr Mackenzie said, in effect, that his jurisdiction ended at the point where the gas supplied by his employers entered the private property and he was not prepared, in the absence of evidence of a leakage of gas, to cap the supply to Holly House. Mr Mackenzie then left.
67. Dr Das insisted that, since Mr Mackenzie had confirmed that there was no danger, all of the gas appliances could be turned back on. Mr Foxwell rejected this analysis and issued warning notices in respect of the five boilers in the laundry and boiler rooms and the three gas appliances in the kitchen. Dr Das declined to sign the notices by way of acknowledgment of receipt of them but Mr Black did so. Mr Foxwell asked Dr Das for permission to cap off the gas supply. Dr Das refused and questioned Mr Foxwell's integrity and qualifications.
68. During the course of the meetings on 25 August 2005 Mr Black commented to Mr Derrick Powell and Mr Morgan that Dr Das was "his own worst enemy" and that he was not prepared to listen to reason. However, Mr Black did not feel able openly to challenge Dr Das.
69. At about 7.15 p.m. on 25 August 2005 all of the interested parties left Holly House to attend a hearing at the home of a justice of the peace in Blackwood. Arrangements for the hearing had been made by the CSIW in the course of the afternoon in case no agreement was reached. Mr Derrick Powell and Mr Stephen Howells, Caerphilly County Borough Council's service manager, attended the hearing. Dr Das and Mr Black tried unsuccessfully to obtain representation by a solicitor but attended the hearing themselves. Ms Stephens attended to represent the National Assembly.
70. At the hearing before the justice of the peace Mr John Powell, Mr Foxwell, Mr Morgan and Mrs Price gave evidence in support of the application. Mr Black was invited to cross-examine the witnesses and endeavoured to do so. Dr Das spoke on behalf of the Applicant company. He said that the installation was "good and safe" and that work would be undertaken in September "to comply with new regulations". He asserted that there was "a vendetta" against him and his organisation organised by the CSIW. When Dr Das refused to accept that there was any danger to the residents of Holly House and refused to pay for the recommended remedial works, the magistrate made an order under section 20(1) of the 2000 Act cancelling the Applicant's registration in respect of Holly House with immediate effect.
71. On the morning of 26 August 2005 Mr Derrick Powell contacted Mr Black by telephone. Mr Black informed him that Dr Das was remorseful and would now cooperate with all concerned and had authorised the necessary work to rectify the defects in the gas installation.
72. Later on the morning of 26 August 2005 Mr Black asked Mr Mullett to carry out the necessary modification works at Holly House immediately. Mr Mullett agreed to do so provided that he had a cheque in full payment before the commencement of the work.
73. During the morning of 26 August 2005 Mr Derrick Powell and Mr Morgan supervised preparations for the removal of all of the residents of Holly House to other homes. Mr Morgan had a discussion with one of the catering staff at Holly House who confirmed that he had experienced difficulty with the gas burners on the cooker in the past.
74. At about 12 noon on 26 August 2005 Mr Mullett met Mr Black and Dr Das at Holly House. Dr Das tendered his apologies to Mr Foxwell. Mr Mullett instructed a team of his workmen to prepare for the installation of new pipes. Dr Das said that he was unable to provide a cheque immediately (because he was unable to gain access to his house) but he would do so later on that day.
75. On 27 August 2005 Mr Mullett withdrew his work force from Holly House partly because Dr Das had not provided the promised cheque and partly because they did not have the necessary materials to hand.
76. On 30 August 2005 Dr Das wrote to Mr Howsam of Caerphilly County Borough Council urging him not to enter into contracts with other homes in respect of the former residents of Holly House because he was taking "emergency action through the Court to set aside the cancellation of Holly House registration".
77. Also on 30 August 2005 Mr Black asked Mr Mullett to confirm that all of the necessary work at Holly House had been completed. Mr Mullett explained that work had been suspended on 27 August because no payment had been received. Mr Black said that a cheque would be made available forthwith. Mr Mullett then went to Holly House and collected a cheque from Mr Black.
78. On 31 August 2005 W. Mullett Limited recommenced work at Holly House. They completed the work on 2 September 2005. Mr Black then asked Mr Mullett to service the appliances at Holly House and to ensure that they were safe to operate. W. Mullett Limited undertook this further work and issued appropriate gas safety certificates. The company was not paid for this work until after Mr Mullett gave evidence during the hearing. Dr Das delayed payment because he felt that Mr Mullett was "charging excessively".
79. In a letter to Dr Das dated 1 September 2005, Mr Jones, on behalf of the National Assembly, formally requested production (under regulation 26) of documents to enable him to consider the financial viability of the care homes owned by L-Giri Limited and the Applicant company, including management accounts, a "letter of comfort" from the companies' bankers and a business plan for the next 3 to 5 years showing how the Applicant company and its related companies intended to improve their financial positions. The Applicant company did not provide the requested documents notwithstanding that management accounts, held on the company's computer system, were readily available.
80. On 5 September 2005 Corona Energy informed Mrs Price that they had not received payments from the Applicant as promised and would be applying for disconnection of the supply to four homes (Holly House, The Beeches, Valley Manor and Bedwelty). The amount still outstanding in respect of Holly House was said to be £581 and the total amount outstanding in respect of the four homes was said to be £15,022.
81. On 6 September 2005 Dr Das wrote again to Mr Howsam. He said that "the present situation in Holly House resulted from the bizarre disagreement between two Corgi Registered plumbers" and insisted that the Transco plumber should have taken precedence over the "CSIW sponsored Corgi plumber". The cancellation of the registration was, he said, "nothing to do with the financial viability of Puretruce Healthcare".
82. On 9 September 2005 Mrs Price and Mrs Lewis-Wharton produced their report following their inspection on 9 August 2005. The report was formally published on 26 September 2005. The inspectors recorded that Holly House remained unregistered but they set out the requirements noted at their announced inspection visit on 9 August 2005 and monitoring visits undertaken during the past inspection year. They listed 102 alleged breaches of regulations (some of which had admittedly been remedied before the closure of the home) and the requirements made to remedy those breaches.
83. On 14 September 2005 Mr John Powell issued a notice of proposal to cancel the registration of the Applicant company in respect of Holly House citing the Applicant's failure to have a registered manager in place from January 2004; serial breaches of the regulations; failure to carry on the care home in such manner as was likely to ensure that it would be financially viable; failure to meet the requirement for assisted baths or showers and breach of the requirement to ensure that all parts of the home to which service users had access were, so far as reasonably practicable, free from hazards to their safety by failing to take necessary action in relation to the safety of the gas appliances.
84. On 5 October 2005 Mr Barnett and Ms Hayes wrote to Dr Das to inform him that Caerphilly Local Health Board and Caerphilly County Borough Council had decided not to contract with his company any further. They referred to his complete disregard of his duty of care to the 18 residents and the staff of Holly House when failing to work with the authorities' representatives on 25 August 2005, which had resulted in the emergency cancellation of the registration and the displacement of all of the service users.
85. On 6 October 2005 the Applicant company filed its accounts for the year ended 31 October 2004 with Companies House in Cardiff. Those accounts showed that the Applicant made a profit of £35,455 for the year but only after exceptional gain of £465,837 arising from the writing off of amounts due to another company in the group. Without the exceptional gain the company would have suffered a loss of £430,382. The auditors placed caveats on the accounts because of the absence of invoices to support repairs and additions to the property amounting in total to £258,986 and their inability to obtain all of the necessary information for the purposes of their audit. The notes to the accounts revealed that the company paid directors' emoluments to Dr Das and his wife (of £50,000) and made contributions to the directors' pension schemes (of £9,400). Bank borrowings amounted to £2,900,572 (an increase of £71,441 on the previous year).
86. On 24 October 2005 Mr Hile issued a notice of the Respondent's decision to cancel the Applicant's registration in respect of Holly House. He said that he did not believe that the absence of a registered manager was a reason to cancel the registration but that the appointment of the inexperienced and ill-informed Mrs Tanta as acting manager amounted to a failure properly to manage the care home. Mr Hile also said that continued breaches of regulations relating to staff training and staff supervision, the unsatisfactory financial position and the failure to undertake remedial work to make the gas appliances safe were good grounds for cancelling the registration.
87. On 27 October 2005 HM Revenue and Customs issued a winding up petition against the Applicant company in respect of unpaid taxes amounting in total to £303,634. The larger amounts comprised in this total were £194,645 in respect of unpaid PAYE contributions from October 2004 to August 2005 and £97,607 in respect of unpaid National Insurance contributions for the same period.
88. In December 2005 Mr Derrick Powell asked Mr Black about the winding up petition. Mr Black told him that the petition was in respect of an unpaid bill from an employment agency which the company had been paying in three instalments. Mr Black said nothing to Mr Derrick Powell about unpaid PAYE and National Insurance contributions.
89. On 6 December 2005 Mrs Greening (who had been appointed to act as the manager of Brithdir Care Home on 1 December 2005) informed the CSIW that she was concerned about the safety and welfare of residents of that home because Dr Das had declined to give her authorisation for the future use of agency staff. She felt that there could easily be a situation in which agency staff would be required because of "staff morale, sickness and further resignations".
90. On 7 December 2005 Mr John Powell visited Brithdir Care Home. Mrs Greening told him that there were many outstanding invoices and that the administrator of the home, Mrs Gill Jenkins, was paying cash, which had been paid to the home by or on behalf of service users, into her personal bank account and was writing personal cheques to settle the most pressing outstanding invoices.
91. On 8 December 2005 Mr Black confirmed to Mr John Powell that he was still not able to sign cheques on behalf of the Applicant but that he had negotiated a number of credit facilities. Mr Powell was not satisfied about the adequacy of the financial arrangements.
92. On 9 December 2005 Dr Das filed a witness statement relating, in part, to the financial viability of the Applicant company but neglected to mention that the petition for the winding up of the company for non payment of taxes amounting in total to £303,634 was due to be heard on 14 December 2005. In this statement Dr Das said that the Applicant company "continued to function very well as a smaller unit of 6 care homes" and that he intended "to keep it that way". However, he also said that "some of the homes are being sold". Dr Das asserted that "bank support continued as robust as before". He conceded that the 2004 accounts showed a financial position which was not as strong as he would have liked but said that there had been "a significant improvement". He explained that he was "injecting over £100,000 to make an immediate payment towards the outstanding director's loan" and that "the rest will be paid as soon as possible, for instance by adjusting dividends from the companies".
93. On 24 January 2006 Ms Castrey, on instructions from Dr Das, informed the CSIW that the debt underlying the winding up petition had been settled by Dr Das, using his personal resources, in part repayment of his director's loan. This was not completely true. In fact, Dr Das had paid only part of the debt due to HM Revenue and Customs and had made an arrangement to pay the balance on a later date.
94. On 12 May 2006 Dr Das gave notice to Caerphilly County Borough Council of the termination of the contract between the Applicant company and the Council in respect of the Village Nursing Home. The home closed on 11 June 2006 and, in July 2006, the Applicant company sold the property for £1,425,000.
95. Following the closure of Holly House, six members of the staff became entitled to redundancy and accumulated holiday payments. The Applicant company failed to pay them, apparently because the bank refused authority to extend the overdraft for that purpose. The former employees were obliged to take proceedings in the Employment Tribunal. The Applicant company entered no defences to the claims and awards were made by the Employment Tribunal on 26 May 2006.
96. In July 2006 the Applicant company entered into negotiations for the sale of Brithdir Nursing Home (for £900,000); Bedwelty Nursing Home (for £383,000); Bryncoed Nursing Home (also for £383,000) and Merthyr Nursing Home (also for £383,000). The company's solicitors were also negotiating the sale of a parcel of land adjacent to Holly House but it was not clear as to whether they were doing so on behalf of the company or on behalf of the Puretruce Pension Fund.

Facts in relation to The Beeches

The material facts found by the Tribunal were as follows:

97. The Applicant company owns the care home in Church Road, Blaenavon near Pontypool known as The Beeches. The home was registered on 2 December 2002 to provide care for a maximum of 39 residents, of whom 21 could be in need of nursing care.
98. Mrs Pritchard was appointed as Clinical Nursing Director (or Clinical Nurse Manager) of the Applicant company on 1 May 2004. She qualified as a nurse in 1971 and worked in the NHS until she took early retirement in 2000. From 2000 to 2003 Mrs Pritchard was the manager of Baybridge Nursing Home in Cardiff. In 2003 she moved to The Rookery. She left there in January 2004 and worked part-time for the Applicant (because of the deterioration of the condition of her hip) until her appointment as Clinical Nursing Director with responsibility for training. During August 2005 Mrs Pritchard took leave of absence to undergo a hip replacement operation and in September 2005 she became the acting manager of The Beeches.
99. In a staffing notice issued by Gwent Health Authority in February 2002 the Applicant company was required to ensure that a registered nurse would be on duty at all times at The Beeches and that the "nurse manager/person in charge" would be on duty in the home for 10 hours per week in addition to the registered nursing staff on duty.
100. From March 2003 until March 2006 the Applicant failed to pay registration fees due in respect of The Beeches amounting in total to £5,574. The only payment made by the company to the CSIW in respect of The Beeches during that period was £1,890 (on 25 June 2004) in respect of the annual registration fee for the year 2004-5.
101. On 11 October 2004 the nurse in charge at The Beeches (Mrs Marilyn Jolley) told Mrs Price that she was very concerned about the lack of staff at the home.
102. During September and October 2004 Corona Energy took extensive steps to secure payment of a debt of over £20,000, which was due to them. The Applicant made one payment on account and Mr Black promised a further payment of £10,000. When this failed to arrive, Corona Energy made a series of calls but still received no further payment. They sent a "disconnection letter" and, on 25 October 2004, received a payment of £5,279, leaving a balance outstanding of £6,770.
103. On 22 October 2004 Mrs Diane Grohmann resigned as matron and registered manager of The Beeches.
104. On 26 October 2004, during a monitoring visit to The Beeches, Mrs Price saw water coming through the ceiling of the main lounge and on to a light fitting. An investigation revealed that the source of the water was a bath on the first floor. Mrs Price understood that members of staff were using that bath to wash commodes but, in evidence, Mr Black said that this was never their practice. The drainage pipe from the bath was leaking. Some of the residents were amused and were, as Mr Black put it, "enjoying having something unusual happening". Mr Phillip Stokes, a contractor who was at that time engaged by the Applicant to attend to the repair of the fabric of the building, attended and promised that he would deal with the problem on the following day along with the repair of water damage to the conservatory. He did not do so. When Mrs Price visited again on 3 December 2004 she saw that no rectification work had been done. When challenged by Mrs Price, Mr Black said that he thought the work had been done and he would make enquiries.
105. Between 1 November 2004 and 3 March 2005 the CSIW endeavoured, without success, to establish what steps were being taken by the Applicant to replace Mrs Grohmann.
106. On 22 December 2004 the CSIW published their Annual Inspection Report in respect of The Beeches. They commented that, although some repair work had been undertaken, there were over 270 requirements relating to the physical environment, most of which were outstanding from the previous report.
107. On 3 March 2005 Mr Black notified the CSIW that Mrs Lynne Pennells had been appointed as acting manager of The Beeches. He sought to explain the delay by reference to the Applicant company's difficulty in ascertaining whether Mrs Grohmann would be prepared to continue in her post.
108. On 12 April 2005 Mrs Price visited The Beeches following a complaint from a family member of a resident that there were insufficient staff in the home. Information given to Mrs Price by a member of nursing staff (Mrs Hilda Dalmani) and examination of the staff rosters led her to believe that there had been and would be insufficient staff on duty to comply with the regulations. Mrs Dalmani looked tired and stressed and complained to Mrs Price that working at The Beeches was hard because there were insufficient numbers of registered nurses available and she therefore had to work longer than normal hours. Mrs Price tried in vain to contact Mr Black. She did manage to contact Mr Yelland. He was dismissive but said he would speak to Mrs Pritchard and "sort it out".
109. On 12 May 2005 the Applicant paid £10,275 to Corona Energy, leaving a balance outstanding (in respect of all of the company's homes) of £29,015. Corona Energy then notified all concerned of their intention to apply, under the Gas Act 1954, for authority to isolate the supplies to the homes.
110. On 24 May 2005 Torfaen County Borough Council held a protection of vulnerable adults strategy meeting because of the non-payment of gas bills at The Beeches and the threatened disconnection of the supply. It was noted that the amount said to be outstanding in respect of the supply of gas to The Beeches was £11,391 and that there were also "long standing issues" relating to investment in the fabric of the home, equipment, staffing and training. It was agreed that the CSIW would look into staffing levels and staffing hours and would contact Corona Energy to confirm that they had received a promised cheque from the Applicant. It was also agreed that the Council's POVA Development Officer, Mrs Ware would contact Mr Black to obtain evidence of payment of the bill before the recommencement of any placements at The Beeches.
111. During May 2005 the Applicant made payments to Corona Energy amounting in total to £22,000. Isolation proceedings were then halted. However, the company failed to make any payments in respect of current supplies from May 2005 until August 2005 so that debts (amounting to £28,743) again accrued and isolation proceedings were reinstated.
112. On 24 May 2005 Torfaen County Borough Council placed an embargo on new placements at The Beeches after the protection of vulnerable adults strategy meeting. The embargo has continued since then, though it was lifted for the admission of one patient. Since the embargo, The Beeches has had 22 or fewer service users in residence. The home currently has 19 residents, two of whom are temporarily in hospital.
113. On 25 May 2005 Mrs Price visited The Beeches. Mrs Strange and Ms Joanne Hedges of Torfaen Local Health Board and Mrs Ruth Woodland of Torfaen County Borough Council joined her there. Mrs Pritchard, Mrs Pennells and, another nurse, Mrs Shirley Madikane were present. Mrs Price reviewed the personnel files and found that three newly appointed staff did not have enhanced Criminal Records Bureau disclosures and had not fully completed their job application forms. Mrs Pritchard agreed that a full audit of the procedures for recruitment of staff was required. Mrs Price pointed out that staff in respect of whom the appropriate checks had not been carried out should not have been working with vulnerable adults. Mrs Pritchard accepted this but suggested that the requirement was unreasonable and that the matter was not her responsibility but that of the senior management of the Applicant company. Mrs Price also reviewed six of the service users' files, selected at random. She found significant deficiencies in the risk assessments and care plans.
114. Mrs Strange found "a failure in the very basic nursing processes" which had "repercussions for individual patients". She drew particular attention to a service user who had been resident for nine years but had no care plan. She also noted that some service users required testing of their blood pressure before medication was administered but there was no evidence that this was taking place. Mrs Pennells said that she was concerned that some of the qualified staff were not capable of assessing, planning, implementing and evaluating care. Mrs Pritchard said that she was "reviewing a training audit for staff at the home" but she was unable to produce any training schedules or supervision records for inspection.
115. On 21 June 2005 Mrs Pennells told Mr John Powell and Mrs Price (in response to their enquiry as to why she had not applied for registration as the manager of the home) that she was "only the acting manager" and that, as she had informed Mr Black and Mrs Pritchard, she did not want the job of manager. Mrs Pennells displayed ignorance of the regulatory requirement for a system of reviewing the quality of care in the home. She was not aware of any visits by a responsible officer that might have been made with a view to complying with the obligation. Mrs Pennells also said that she was only just managing to achieve the required staffing levels by requiring staff to work long hours.
116. Later on 21 June 2005, Mrs Pritchard told Mrs Price that Mrs Pennells would be applying for registration as the manager. Mrs Price suggested to Mrs Pritchard that she should try to clarify the position and resolve the confusion.
117. On 21 June 2005 Torfaen County Borough Council held a protection of vulnerable adults strategy meeting because of the unpaid gas bills; the difficulties that had arisen because Mrs Dalmani and her fellow South African, Mrs Madikane had been living in a flat on the premises; the deficiencies in the recruitment files; the absence of a training audit and other detailed matters discovered during the visit on 25 May 2005. It was agreed that "fundamental elements of nursing and personal care" had not been undertaken since the departure of the registered manager. It was also noted that Mrs Pritchard had managed to effect some improvements but faced "a huge piece of work".
118. On 5 July 2005 Mrs Pennells again told Mrs Price that she did not want to be the manager of The Beeches. She said that she had not received any form of supervision from Mrs Pritchard and had not herself undertaken any form of supervision of staff since she was not the manager. Mrs Price noted that the home was very busy and appeared to be dirty and untidy. Fire doors were wedged open. Mrs Pennells explained that she was "short of domestic cover" and that this was made worse by a shortage of catering staff. Mrs Pennells also explained that the registered nurses were working long hours because she was not permitted to employ agency staff. The agency had not, she said, been paid. Mrs Pennells also said that she had not received any fire awareness training and was not aware of how to evacuate the property in the event of a fire. This was, she said, an issue for the management, not for her. Mrs Price attempted to review the personnel file of a member of staff (Mrs Rose Powell) and found that it was empty. Mrs Pennells explained that the contents had been removed because they would have disclosed an insufficient Criminal Records Bureau disclosure and a possible case of DHSS fraud. Mrs Price was alarmed by what she had seen and heard. She suggested that urgent action was required and advised Mrs Pennells to contact Mrs Pritchard or Mr Black forthwith.
119. Later on 5 July 2005 Mrs Price spoke to Mr Black. In the course of their informal conversation Mrs Price expressed surprise that Mr Black had been nominated as the responsible individual in respect of The Beeches and reminded him that he had previously told her that he was not prepared to take on that role because Dr Das would not allow him to "hold the purse strings" and would restrict his ability to manage the home. Mr Black said in evidence that he did not recall this conversation and doubted that it ever happened. Mrs Price urged Mr Black to contact her on the following day with his proposals for the resolution of the "totally unsatisfactory situation" at The Beeches. Mr Black did not do so.
120. Mrs Price also wrote to Mr Black. She pointed out that, on two occasions, Mrs Pennells had said that she did not wish to be the registered manager and that she had never told the Applicant company that she wanted the post. Mrs Price asked Mr Black to clarify the position in relation to the appointment of a manager and expressed her concern about the unacceptable way in which the matter was being handled by the Applicant company.
121. On 7 July 2005 Torfaen County Borough Council held a protection of vulnerable adults strategy meeting because of a specific allegation of physical and psychological abuse of a service user at The Beeches (Mrs C). The meeting also considered complaints that had been made in respect of eight other residents. In a report to the meeting, a local General Practitioner, Dr Wayne Lewis, expressed his concerns about "lack of communication and general deterioration in the care of residents" at The Beeches. Mrs Pritchard told the meeting that the member of staff accused (Mrs Rose Powell) had been suspended. The meeting also heard that Mrs Powell had been suspected of DHSS fraud and that this had been brought to the attention of the manager of The Beeches more than 12 months before. The meeting concluded that the absence of a registered manager probably had a bearing on the matter and that a new manager was needed as a matter of urgency. At a subsequent meeting (on 18 July 2005) it was decided that there was insufficient evidence to pursue the allegation of physical assault and but that the allegation of verbal abuse was sufficiently proved. It was noted that "the police were not keen to pursue claims of verbal assault". The applicant company dismissed Mrs Powell.
122. On 7 July 2005 Mrs Price, having received no response from Mr Black to her request for proposals, visited The Beeches again. From an examination of the staff files and a conversation with Mrs Madikane, the nurse on duty, Mrs Price formed the view that insufficient staff had been on duty during the previous night.
123. On 8 July 2005 Mrs Pennells began working night shifts at The Beeches and, on 6 August 2005, she left the home.
124. On 15 July 2005 Mrs Price wrote to Mr Black to record all of the concerns that had built up during the previous weeks and to invite him to a meeting on 21 July 2005 to discuss the breaches of the regulations and the remedial action that might be taken.
125. On 20 July 2005 the CSIW received a complaint from a relative of a service user that, because of insufficient staff at The Beeches, her relative had had to wait for an unreasonably long time for attention and other service users had been left at the breakfast table all morning.
126. A meeting took place with Mrs Pritchard on 21 July 2005. Mr Black did not attend because he was away "on a course". Mrs Pritchard said that she had taken responsibility for The Beeches "by default". She also said that she felt that The Beeches was "left unsupported by the company"; confirmed that no supervisions or appraisals of staff were being undertaken at The Beeches and asked if the "staffing levels could be re-evaluated" because there were insufficient members of staff to cope with the high dependency of service users.
127. On 21 July 2005 Mr Black wrote to Mrs Price. He said that he now realised the gravity of the situation at The Beeches and set out his comments and proposals. Mr John Powell considered the letter and justifiably concluded that Mr Black had failed to address the more substantial regulatory breaches and that the letter did not amount to the required action plan.
128. On 27 July 2005 the Torfaen Advocacy Service held a meeting at The Beeches attended by two service users and14 relatives of service users. Many complaints were aired. It was suggested that The Beeches was no longer "a happy place" and that the staff lacked proper training and were working excessively long shifts. They were bickering amongst themselves and were protesting about not being paid. As a result they were failing to provide proper care and attention for residents and displaying unacceptable attitudes. Adverse comments were also made about the inadequate management of the home.
129. On 1 August 2005 the Applicant company's accounts manager informed Corona Energy that he accepted that their invoices were correct but that he could not say when they would be paid.
130. On 10 August 2005 Mr John Powell and Mrs Price visited The Beeches. The home appeared to be in chaos. Only three care staff appeared to be on duty. Mrs Madikane informed them that there were 26 residents. Mrs Price doubted that figure and asked Mrs Madikane to check. She did so and agreed that there were, in fact, 29 residents. She sought to excuse her mistake by saying that she was tired, stressed and confused. Mrs Madikane did not know how to obtain additional staff. She said that she had told Mrs Pennells of her difficulties but that nothing had been done. In response to an enquiry about service users who might be a cause of particular concern, Mrs Madikane identified Mrs D. Mrs Price looked at Mrs D's file and found that important risk assessments (relating to nursing dependency and pressure damage) had not been reviewed since February 2005. Mr Powell noted that the blood glucose level of a diabetic service user had last been recorded on 24 July 2005, indicating a lack of a proper system of record keeping with serious implications. He also examined the file of member of staff (Mr Joseph Kubicek) who was employed as a dishwasher. The file contained only one reference and gave an address in Czech Republic as Mr Kubicek's residence. Mr Powell queried this. Mrs Madikane said Mr Kubicek lived locally but she did not know where. Mrs Pritchard said in evidence that Mr Kubicek's local address was set out on the "Employee Details" form in the file. It is unlikely that Mr Powell overlooked such a document. It was probably placed on the file after he had perused it.
131. Mrs Madikane showed Mrs Price a document headed "Management Report Regulation 27" signed by Mr Black. Mrs Price noted that this report referred only to environmental issues and contained no reference to staffing, training or clinical issues. Mrs Price and Mr Powell inspected some of the rooms referred to in Mr Black's report. They found that the access to the thermostatic controls on the radiators was obstructed by their protective covers and that some of the rooms were uncomfortably hot and lacked ventilation because the defective windows could not be opened. In other rooms the sash windows would not stay open unless supported by a house brick; the carpets were in poor condition and there was a lack of appropriate furniture. Fire doors on the ground and upper floors were wedged open.
132. Following the inspection on 10 August 2005, Mr John Powell contacted both Mrs Pritchard and Mr Black by telephone to inform them of the CSIW's grave concerns about the health and welfare of the service users.
133. On 11 August 2005 Mrs Strange made a second contract compliance visit to The Beeches on behalf of Torfaen Local Health Board. She identified some improvements in risk assessments and care planning but concluded that "there continued to be outstanding actions that the home needed to address in terms of improvements in basic nursing process". While the home appeared to Mrs Strange to be "working towards the achievement of more appropriate assessment and care planning processes" there remained "a number of very serious concerns".
134. Also on 11 August 2005 Mr Black told a protection of vulnerable adults strategy meeting that several members of staff had left The Beeches; that there were difficulties in recruiting replacements and that the applicant company had experienced acute difficulties in recruiting a replacement manager. The post had, he said, been re-advertised and he was waiting to see if there were any more applications. Mrs Pritchard told the same meeting that she was very concerned about the high levels of dependency of many of the residents of The Beeches and suggested that the home was "not geared up" for this level. She also asked what support could be offered to the home.
135. On 12 August 2005 Torfaen County Borough Council and Torfaen Local Health Board decided that they would have to provide a "support package" for The Beeches for a limited period to address the problems relating to record keeping, staff training and the provision of staff and equipment.
136. On 15 August 2005 Mrs Price made a further visit to The Beeches. Mrs Madikane told Mrs Price that she thought that Mrs Pennells was still the manager of the home; that she did not know who would assume managerial responsibility in the absence of Mrs Pennells and that she had no idea whom she should contact in an emergency. She said that she had asked Mr Black for more staff but none had appeared.
137. On 15 August 2005 Mrs Price examined the staff rosters at The Beeches and formed the view that proper staffing levels would not be maintained during the forthcoming bank holiday weekend. Mrs Madikane further pointed out, by reference to the rosters, that minimum staff levels would not be met in the following week. Mrs Price suggested to Mrs Madikane that she should contact Mr Black so that these problems could be addressed.
138. Mr Arcari also visited The Beeches on 15 August 2005 in his capacity as Health and Safety Officer for Torfaen County Borough Council. He found that the gas boilers had not been serviced or safety checked so that there was a high risk of carbon monoxide poisoning; that the tumble dryers were unsafe and that two emergency fire escapes were faulty and dangerous. The necessary inspections and repairs were undertaken on 25 August 2005 while the events at Holly House were unfolding.
139. Later on 15 August 2005 Mrs Price spoke to Mr Black. He explained that he had not been able, at short notice, to obtain additional staff for The Beeches but assured Mrs Price that a recruitment process was under way and that consideration was being given to transferring staff from another of the Applicant's homes. Mr Black also said that he could well understand why the CSIW was so concerned about the situation at The Beeches.
140. On 16 August 2005 Mrs Price wrote to Dr Das to complain about the apparent absence of a "senior management support system" and to request his urgent response to the potential for breaches of the staffing requirements at The Beeches. Dr Das replied immediately. He said that the "Matrons were responsible for running their own Homes"; that there was "no need for extra Managers" and that both Mr Black and Mrs Pritchard would be continuing in their jobs.
141. On 16 August 2005 Mrs Price also wrote to Mr Black. She suggested that there was "no internal line management structure nor an acting manager" in place at The Beeches and that care provision was deteriorating. She gave Mr Black five working days to nominate a suitably qualified and fit person to apply for registration as the manager of The Beeches.
142. On 22 August 2005 Mr Cole visited The Beeches to undertake "an evaluation for business purposes". He noted that the bathrooms and sluices needed upgrading and that assisted showers needed to be provided on each floor to comply with National Minimum Standards. A storeroom had been decommissioned because of "damp and excessive ceiling collapse". Many of the wooden sash windows had rotten frames and were propped open with a variety of objects to allow air circulation. There was a general lack of maintenance. Mr Cole suggested that a review should be carried out of the use of all of the accommodation and the repairs, redecorations and improvements required. This review should then, he said, be used to prepare a phased plan to bring all areas of the home up to satisfactory standards and to ensure the most effective and efficient use of the accommodation for the future.
143. On 25 August 2005 Mr Black telephoned Mrs Price and informed her that Mr Diccon Hill would be transferring to The Beeches from Valley Manor Nursing Home and that, in due course, he would apply to be the registered manager.
144. On 26 August 2005 Mr John Powell issued a notice of proposal to cancel the registration of the Applicant in respect of The Beeches citing its failures (a) to carry on the home with sufficient care, competence and skill; (b) to ensure the presence of suitable staff in sufficient numbers; (c) to ascertain the fitness of staff to work in a care home; (d) to make proper provision for the health and welfare of service users; (e) to provide appropriate staff supervision; (f) to establish and maintain a system for reviewing and improving the quality of care; (g) to keep the premises in a good state of repair; (h) to take adequate precautions against the risk of fire; (i) to ensure, so far as practicable, that the premises were free from hazards and (j) to keep proper records. Mr Powell also relied upon the proposition that the establishment had ceased to be financially viable or was likely to cease to be financially viable within the next six months.
145. On 30 August 2005 Powergen demanded payment of £3,429 in respect of electricity supplied to The Beeches from November 2004 to August 2005.
146. On 2 September 2005 Corona Energy again gave notice to The Beeches of the imminent disconnection of the gas supply because of non-payment of bills amounting to £6,873. On 6 September 2005 Dr Das telephoned Corona Energy and disputed the amounts outstanding. On being informed that they had been accepted as correct, Dr Das agreed a "payment plan". Between 8 September and 3 October 2005 the Applicant company sent cheques to Corona Energy amounting in total to £23,818 but failed to discharge the debts in full.
147. On 6 and 7 September 2005 Mrs Price, Mr van Eijkern, Mr Warsop and Mr Clive Jones undertook the annual inspection of The Beeches. Mr Black and Mrs Pritchard told Mrs Price that Mr Hill was the new acting manager and that he would be applying for registration in due course. Ms Sarah Hill (the senior nurse that Torfaen County Borough Council had arranged to work temporarily in the home) was present. Ms Hill showed Mrs Price several files into which she had inserted the newly formulated care plans that she had prepared at the request of Mr Hill and Mrs Pritchard. Ms Hill agreed that there was insufficient personal information in the files and that the proposed monthly reviews would probably not constitute adequate assessment of the complex needs of the service users.
148. During the inspection Mrs Price raised the matter of staff supervision. She established that there was still no system in place and that the acting managers had received no supervision themselves. Mrs Price also raised the matter of the required system for reviewing the quality of care with Mrs Pritchard, Mr Hill and Mr Black. Mrs Price's recollection is that they all agreed that no system was in place and undertook to address the matter forthwith. Mr Black denies this and points out that, on 10 August 2005, Mrs Price reviewed his Regulation 27 report dated 1 August. Mrs Price did not regard Mr Black's report (which dealt only with environmental matters) as complying with regulation 27 (which refers to the standard of care provided as well as to the premises). She probably made this point and Mr Black probably felt unable to challenge her at that time.
149. Mr Warsop and Mr van Eijkern conducted a systematic tour of the building, accompanied by Mr Black. They noted that the areas to the side and rear of the building were unkempt and dilapidated in appearance. Mr Warsop and Mr van Eijkern formed the view that the general state of deterioration of the building was due to lack of maintenance over a period of years. There was, they said, no system for identifying and rectifying environmental deficiencies. Mr van Eijkern was particularly concerned about the sheer number of defects and the fact that simple matters, such as missing or defective locks and unusable wash hand basins, had not been attended to expeditiously, to the detriment of service users' privacy and dignity.
150. Mr Warsop and Mr van Eijkern also saw that previously required repair work to the sash windows had not been undertaken. Mr Black promised immediate action. He was unable to offer any explanation as to why the work had not already been done. Some work was undertaken by a carpenter in late September 2005 but other necessary work was not done.
151. Mr Warsop and Mr van Eijkern were concerned about the state of the fire alarm and smoke detection systems and the means of escape from the laundry and other specified areas at The Beeches. They left telephone messages with the South Wales Fire and Rescue Services for the urgent attention of the fire safety officer. The officer attended on the following day and issued an enforcement notice requiring attention to the fire alarm system as a matter of urgency.
152. Mr Warsop and Mr van Eijkern were also concerned about the state of the electrical wiring at The Beeches, as evidenced by some exposed wires in an upstairs store cupboard. As a consequence, the CSIW commissioned a full assessment by an electrical engineer. This was undertaken on 21 September 2005. The engineer reported that the installation was "in fair condition" save for 20 specified defects, some of which needed to be rectified as a matter of urgency. Mrs Price then tried unsuccessfully to contact Mr Black to obtain confirmation that the recommended remedial work would be undertaken.
153. On 7 September 2005 Mr Hill told Mrs Price that he would not, in fact, be seeking registration as manager because he had neither the qualifications nor the experience needed for the job. Mrs Price reviewed Mr Hill's personnel file and noted the absence of an enhanced Criminal Records Bureau disclosure and the presence of references that did not comply with the requirements of the regulations. Mr Hill's enhanced disclosure document (dated 6 September 2005) was later placed on his file.
154. On 8 September 2005 Mrs Guest and Ms Lear and, later on the same day, Ms Malson (all of whom were employed by the domiciliary care agency Community Careline Limited) went to work at The Beeches at the request of Torfaen County Borough Council to provide cover for staff who would be attending manual handling training. Mrs Guest was appalled by the care practices that she witnessed or had reported to her and immediately decided to report her concerns to Torfaen County Borough Council and to withdraw the company's agreement to provide temporary staff. Mrs Guest was particularly upset by the way in which staff had drag-lifted residents; the lax attitude to the giving of prescribed medication; a manual evacuation of faeces apparently undertaken by Mr Hill and the failure of another nurse (Ms Baiji Joseph) to check a resident for injuries following a fall. Mr Hill explained to Mrs Guest that there were problems because the home was very busy and there was a shortage of staff. Mr Hill also told Mrs Guest that he could not acquire necessary additional equipment for The Beeches because suppliers were not prepared to extend credit facilities to the Applicant company.
155. Dr Das told a meeting of service users' relatives held on the evening of 8 September 2005 (and attended by Mrs Pratlett of Torfaen County Borough Council Social Services Department and Mrs Strange and Mrs Hedges from Torfaen Local Health Board) that because he would have to obtain the services of lawyers to pursue the appeal against the cancellation of the registration, there would be less money available to be spent on the home. Relatives attending the meeting raised a variety of concerns, including the lack of stimulation for the residents, the turnover of staff and the failure to follow care plans. Others were more positive, referring to their perception that "the chaos had gone"; that the ethos and atmosphere had improved significantly and that the staff had worked hard.
156. On 14 September 2005 Mrs Price asked Mr Black to clarify the position with regard to Mr Hill. On the same day Mr Black informed the CSIW that Mr Hill would continue as the acting manager of The Beeches until a new manager could be found.
157. On 15 September 2005 Torfaen County Borough Council held another protection of vulnerable adults strategy meeting following the complaints made by Community Careline Limited. At a subsequent meeting (on 23 September 2005) the charges against the accused members of the nursing staff at The Beeches (who had been suspended pending an investigation) were dismissed. The residents involved had denied that they had experienced mistreatment and the investigators felt that there was insufficient evidence to justify action against the qualified staff. They were then re-instated. Mrs Pritchard's assertions that "the allegations were disproved" and the nurses "were exonerated" overstated the position.
158. On 21 September 2005 Mrs Edmunds (the District Nurse) visited The Beeches to attend to Mrs Y (a service user who was suffering from necrosis of the foot) and to provide advice and assistance to the nursing staff of the home. Mrs Edmunds felt that the dressing that had been applied to Mrs Y's foot was less than optimal and that better treatment could be arranged. Mrs Pritchard agreed to collect an appropriate prescription from the nearby surgery on the following day. When Mrs Edmunds visited again on 28 September the nursing staff at The Beeches were using the same dressing as before.
159. On 23 September 2005 Mrs Price wrote to Mr Black following specific complaints received by the CSIW about deficiencies in the care of four service users. She referred to "the theme" of continuing breaches of the home's staffing notice, the continued absence of an appropriately experienced acting manager, the lack of necessary equipment and the lack of staff training in relation to the moving and handling of service users.
160. On 26 September 2005 Dr Das informed the CSIW that Mrs Pritchard would be the acting manager of The Beeches with immediate effect. Mrs Pritchard applied for registration on 20 October 2005.
161. On 28 September 2005 a service user (Mr G) was admitted to hospital from The Beeches and was found to have several pressure sores. Mrs Pritchard disputed this diagnosis. An investigation was held. It was decided that appropriate care was not given to Mr G by staff at The Beeches. However, a further investigation revealed that the pressure sores might have developed during an earlier stay in hospital. The problem was compounded by a lack of documentary evidence at The Beeches and was never properly resolved.
162. On 29 September 2005 Powergen asked the Applicant company to contact them to discuss an outstanding debt of £4,443. They received no response.
163. On 4 October 2005 Mrs Price reviewed the care file relating to Mrs Y. She had been admitted to hospital having suffered, in the opinion of the physician responsible for her care, tissue damage and bruising as a result of poor moving and handling by staff at The Beeches. Mrs Price found that relevant risk assessments had been undertaken but not properly reviewed.
164. In October 2005 Mrs Walker devised a specific training programme for the staff of The Beeches to be delivered at the home during October, November and December 2005. Some of the sessions were well attended but others were not. Mrs Walker was disappointed by the apparent lack of commitment of the nursing staff to the programme that she had devised. Her impression of The Beeches was that it had a "basic homeliness" but that it was "poorly appointed", "tatty" and "crumbling".
165. On 12 October 2005 Mrs Wilson visited The Beeches in support of the Gwent Healthcare Clinical Governance Manager to undertake a review of the service users' documentation in relation to issues that had been raised at a protection of vulnerable adults strategy meeting. Mrs Wilson found that, in one of the files, there was no daily record of the care delivered. That record was kept elsewhere. Mrs Wilson was shown the further records. She found that there were gaps and inconsistencies in them.
166. On 20 October 2005 Mrs Bond issued a notice of her decision on behalf of the National Assembly to cancel the Applicant's registration in respect of The Beeches. She relied upon the company's failures in relation to (i) the management of the home; (ii) the recruitment of properly trained staff; (iii) the making of proper checks on the fitness of the staff; (iv) care plans; (v) staff supervision; (vi) regulation 27 reports; (vii) fire precautions and (viii) record keeping.
167. On 27 October 2005 Powergen tried to contact Mr Black but were told that he was unavailable. Powergen then passed their file to a debt recovery agency to start legal proceedings to recover the arrears due to them (of £4,443) in respect of electricity supplied to The Beeches.
168. On 28 October 2005 Mrs Price finally made contact with Mr Black in relation to the electrical work to be undertaken at The Beeches. Mr Black had commissioned work by a contractor but, on several occasions, the contractor was not paid in accordance with his requirements and he stopped work. On 1 November 2005, and again on 28 November 2005, Mrs Price wrote to Dr Das to complain about the "unresolved unsatisfactory situation".
169. On 31 October 2005 Mrs Strange made a further contract compliance visit to The Beeches. She found deficiencies in some of the care plans and was concerned that care plans had been separated from risk assessments but saw that there had been an improvement in data entry and review of nursing interventions.
170. On 7 November 2005 the CSIW published their Annual Inspection Report in respect of The Beeches. They listed more than 200 action requirements to remedy breaches of the regulations ranging from the replacement of the lock on the door to the attic space to the removal of oxygen cylinders from the area adjacent to the boiler room.
171. On 8 November 2005 a representative of Powergen visited The Beeches and served a disconnection letter. On the same day Mr Black telephoned Powergen and informed them that the Applicant company had "cash flow problems" but would pay the outstanding bill within 10 days. Powergen actually received payment of £4,443 on 23 November 2005 after they had fixed a disconnection date (13 December 2005). However, the Applicant company then failed to pay the further bills rendered by Powergen.
172. On 15 November 2005 Mrs Strange and Mr Jonathan Sims, the Torfaen Local Health Board Medicines Manager, made a contract compliance, follow-up visit to The Beeches. Mr Sims did not identify any areas of serious concerns in relation to medicines management at the home.
173. In November 2005 Mrs Walker made suggestions to Mrs Pritchard as to how the "presentation" of The Beeches might be improved and offered to assist her personally in acquiring suitable but inexpensive materials. Mrs Pritchard did not take up the offer.
174. On 8 December 2005 Mr John Powell and Mrs Wendy Goldie interviewed Mr Black. They asked him what strategies he had put in place in the light of the decision to cancel the registration of The Beeches. They found that his reply "lacked depth" and indicated a continuing failure on his part to acknowledge the gravity of the situation. Mr Black said that he was "a great believer in budgetary control" and did not like "bills mounting up". This observation was surprising, given the history of payments by the Applicant company. Mr Black explained that he would prepare an "overdue list" and try to get Dr Das to pay as much as he could. Mr Black also made reference to several matters which were not noted by Mr Powell. Mr Powell's written record of the interview contained only part of Mr Black's unsatisfactory answers.
175. On 21 December 2005 Powergen contacted Mr Black and informed him that £679 was due and owing. Mr Black said he would "look into the matter" and call back. He did not do so.
176. On 22 December 2005 Mrs Price and Ms Jenkins visited The Beeches. They saw that Christmas decorations were much in evidence and that the atmosphere was very pleasant. However, they also found that the back lounge was uncomfortably warm and that the heating could not be properly managed because the radiator valves were obstructed. They also noted a large damp patch on the corridor wall. The unsatisfactory practice of washing commodes and pots in the bath was apparently continuing. Some of the fire doors did not fit properly. One of the toilets was "very malodorous" and another was in a state of disrepair and appeared to be being used as a storeroom. Mrs Pritchard said that she would deal with these matters immediately and keep Mrs Price informed of the progress made.
177. Mrs Price examined the staff rosters for December 2005 and January 2006. Mrs Pritchard's name appeared on each roster but without recorded times and other staff were identified only by their given names.
178. On 29 December 2005 Mrs Strange carried out a review of individual service users' documentation. She reported that there was evidence of significant improvement in the assessment and care planning process. The majority of files contained the required assessments and checklists although a small number still required evaluation or to be updated.
179. In January 2006 Corona Energy notified the CSIW that they were again planning for the isolation of the gas supply to The Beeches and other homes because of non-payment of bills. A hearing was fixed for 27 March 2006 at which Corona Energy would have sought authority to cut off the supply but, on 26 March 2006, Dr Nishebeta Das paid the outstanding amount due to Corona Energy using her personal credit card.
180. On 17 January 2006 Mr John Powell wrote to Dr Das to inform him that the CSIW had concerns about Mr Black's ability to be the nominated responsible individual because of his apparent lack of understanding of a number of key processes and procedures.
181. On 19 January 2006 Mrs Bond and Mrs Pratlett met Mr S and Mr C, as representatives of "The Friends of The Beeches Residents" group. Mr S and Mr C expressed a wish to be actively involved in the inspection of The Beeches so that they might be able to put pressure on the management and staff of the home to make improvements. Mrs Bond was surprised by this unprecedented request. She explained that the CSIW's concerns about The Beeches had been "ongoing for a number of years" and that she had considered the possibility of imposing conditions rather than issuing a notice of cancellation of the registration but had concluded that there were so many breaches that the need to protect service users outweighed the reasons to keep the home open. Mr S protested that Mrs Bond continually made references to Dr Das instead of to the Applicant company. He felt that her remarks "could be classed as defamatory". He told Mrs Bond that he would hold her personally responsible for "pre-meditated manslaughter" if his mother died as a result of being moved from The Beeches.
182. On 27 and 30 January 2006 Torfaen Local Health Board held contingency meetings because of the threatened "court action by the gas supplier". The continued threat of gas disconnection remained "an issue of very serious concern" for the Board.
183. On 7 February 2006 Mrs Price visited The Beeches, accompanied by Mr John Powell and Mrs Lynne Jenkins. Mrs Price noted an improvement in the quality of the clinical documentation but questioned the programme of reviews instigated by Mr Hill, which she regarded as insufficient. Mr Powell noted significant omissions in the records relating to a service user who was taking a drug to reduce her pulse rate.
184. Mrs Pritchard said that she did not fully understand some of the requirements listed in the 2005 Inspection Report (which she had read only in part). She endeavoured to explain to the inspectors why there was no written evidence of staff attendance at training courses and assured them that, despite appearances to the contrary, many staff had undertaken extensive training since her appointment in September 2005. She said that she had commenced formal supervision of staff and had completed sessions with six members. She could not say when she would be able to complete the supervision of the other 24 members of staff and apparently did not envisage a continuing programme. Mrs Pritchard did not draw any distinction between training, appraisal and supervision.
185. During the inspection on 7 February 2006 Mrs Pritchard surreptitiously made a recording of some of her conversations with Mrs Price and Mrs Jenkins, using her mobile telephone. The recording was produced in evidence at the hearing. Mrs Pritchard maintained that she made the recording to give herself the means to review her performance in dealing with the inspectors and not in an attempt to expose Mrs Price to criticism. The recording revealed that Mrs Price's approach was informal and friendly and not in any way intimidating. Mrs Pritchard suggested to the Tribunal that the recording might "help the Tribunal to understand why Mrs Price's inspections cause[d] so much stress to staff". It did not.
186. On 7 February 2006 Mrs Price reviewed the personnel file of Ms Vidah Nyembe (a registered nurse) and found significant breaches of the regulations relating to references, Criminal Records Bureau checks and employment history. Mrs Jenkins examined the files of two members of the care staff and found that they contained inadequate references and revealed an apparent failure to investigate an offence disclosed following the Criminal Records Bureau check. Mrs Jenkins also examined several service users' files and found that they were unsatisfactory.
187. Also on 7 February 2006 Mrs Pritchard and Mr Black informed the inspectors that the required electrical work had not been completed because the contractor had not been paid. Despite the fact that Mr Black had engaged the services of this particular engineer because he had undertaken the inspection of behalf of the CSIW in September 2005, Dr Das had been reluctant to pay him because his rates were "considerably higher" than the Applicant company's usual contractor. However, remedial work to the electrical installation was eventually completed by the same engineer.
188. On 7 February 2006 Mr John Powell saw that some of the sash windows remained defective and dangerous. Repair requirements imposed by the CSIW 3 years earlier therefore remained outstanding.
189. Mrs Price had long been concerned about the absence of a modern, electronic sluice in The Beeches. Mrs Pritchard and Mr Black, citing the opinions of some experts, maintained that a manual sluice is just as well, if not better, suited to the purpose of cleansing portable toilet equipment. Mr Black did obtain a quotation for the installation of an electronic sluice. The cost was high because the existing plumbing in The Beeches would not have supported a modern machine. The installation therefore did not proceed. At the hearing, Mr Cole agreed that, as part of a programme of refurbishment, the provision of an electronic sluice at The Beeches would be appropriate.
190. In 17 February 2006 the Divisional Fire Safety Officer issued a further enforcement notice relating to the escape route from the laundry at The Beeches, the damaged sump cover in the laundry and the floorboards near the fire alarm panel.
191. On 22 February 2006 Ms Pope reviewed the systems for the management and administration of medication at The Beeches. She noted with approval that the oxygen cylinders had been moved to a separate storage area and questioned the requirement that disposable paper pots should be used for the administration of liquid medicines. However, she criticised the use of the room where medicines were stored as an access route to the boiler room and suggested that this should cease. Ms Pope also noted that the previously condemned practice of borrowing medicines from the supply obtained for one user for use by another had not been entirely eliminated. She described the "general attitude to the sharing of medicine", which apparently prevailed in the home, as "totally unacceptable". She noted a "serious failure" relating to the non-administration of antibiotics prescribed for Mrs S and a further concern about the standard of record keeping in relation to the administration of medicines generally. The non-administration of antibiotics had occurred on the previous day and had been the subject of a complaint by Mrs S's son. Ms Pope also noted that the lock on the door of the medicine store was insufficiently robust and that arrangements for the disposal of "hazardous waste" were not wholly satisfactory.
192. On 27 February 2006 Mrs Bond wrote to Dr Das in response to representations made by him. She said that, before she could reconsider her decision to cancel the Applicant's registration in respect of The Beeches, she would have to be satisfied that there had been significant and effective improvements. She acknowledged that there had been some improvements but said that she regarded them as insufficient to justify any change in her decision.
193. On 28 February 2006 Torfaen County Borough Council wrote to Dr Das to inform him that the Council and the Local Health Board were retaining their embargo upon the placement of any new residents at The Beeches because of "the financial uncertainty and instability".
194. On 7 March 2006 Powergen obtained an order authorising them to disconnect the electricity supply to The Beeches for non-payment of electricity bills amounting in total to £2,260. The arrears were then paid.
195. In 13 March 2006 Mr S and Mr C carried out a "layman's audit" at The Beeches. They made a long list of items that they felt needed attention and concluded that the handyman "ought either to be changed or given more training". However, they felt that many of the problems were "cosmetic" and not sufficient to justify closure of the home. Mr S also formed the view that Mrs Price and Mr John Powell were trying "to get their own back for the reprimands they had had relating to … Holly House".
196. On 7 April 2006 Mr Cole visited The Beeches. Mrs Pritchard told him that she preferred to supervise nurses and care staff during the course of their care duties. Mr Cole drew her attention to National Minimum Standard 24 (which refers to "dedicated time"). Mr Cole noted that there remained a problem relating to the safe keeping of spare keys to the medicine cupboards; that access to the boiler room via the medicine store room remained the same (because nothing could sensibly be done about it) and that there were records missing in relation to refrigerator temperatures but otherwise reported that the matters raised by the CSIW following their inspection on 7 February 2006 were being addressed satisfactorily. However, Mr Cole did not audit the training records he was shown. There was, he accepted, "just no evidence" as to whether the training had been done or not. At the hearing, Mr Cole summarised his view of The Beeches. It is, he said, "a home with potential which is not being realised".
197. On 5 May 2006 Mr C informed Mrs Price that the staff at The Beeches had not been paid in full and that Mr Black had explained that this was because of late payment by Torfaen Local Health Board. This explanation was false. Torfaen had made payments in accordance with their usual practice. Mrs Price visited The Beeches and spoke to Mrs Pritchard and to members of the staff. Mrs Pritchard said that the non-payment of the staff was irrelevant because "the wages have nothing to do with the service users". Members of staff told Mrs Price that they were not happy with the non-payment of their wages; that they had been told nothing by the Applicant company and would not continue to work in the home indefinitely if promises to pay their wages were not honoured. One carer did leave as a result of the delayed payment.
198. On 11 May 2006 Mrs Woodland and Mrs Strange undertook a further contract compliance visit to The Beeches. They were able to report positively about most of the matters set out on their checklist but they found that there was no training plan in place; that not all of the staff had undertaken protection of vulnerable adults training; that only 75% of the staff had received supervision and that there were no formal processes for managing quality assurance. Mrs Pritchard told the inspectors that she was "registered to undertake NVQ Level 4 training" but had no fixed date for the commencement of her course.

The law

199. The Tribunal received submissions from both Mr Reed and Mr Furness QC as to the law that should be applied. Having considered those submissions and the relevant authorities, the Tribunal reached the following conclusions.
200. The "ordinary" procedure

Section 14(3) of the 2000 Act provides that the registration authority may cancel the registration of a person in respect of a care home on the ground that the establishment is being, or has at any time been, carried on otherwise than in accordance with the relevant requirements. The relevant requirements are any requirements or conditions imposed by or under the 2000 Act and the requirements of any other enactment which appear to the registration authority to be relevant.

201. Thus the registration authority and, on appeal, the Tribunal must be satisfied that the registered person has breached either the Act or the Regulations made under it or some other relevant statutory provision. If so satisfied, the registration authority and, on appeal, the Tribunal must exercise a discretion as to whether to cancel the registration and, in effect, decide whether the breaches proved are sufficient to merit the closure of the care home.
202. The power to cancel registration is matched by a great responsibility to see that it is not exercised unjustifiably (per Scott Baker J, as he then was, in Secretary for State for Health v. Prospect Care Services and Hyland [2001] EWHC (Admin) 164). The registration authority and, on appeal, the Tribunal must adopt a proportionate approach having regard to the effect of closure upon public health agencies, social care agencies, the users currently at the home, potential future users, owners and staff (per the Tribunal in Joyce v NCSC [2003] 190 NC).
203. The urgent procedure

Section 20 of the 2000 Act provides that, on an application to a justice of the peace for an order cancelling the registration of a person in respect of a care home, the justice may make an order cancelling the registration with immediate effect if he or she is satisfied that, unless the order is made, there will be serious risk to a person's life, health or well-being.

204. The risk to the persons in a care home must be sufficiently serious to justify cancelling the registration, not merely serious in the abstract. The question for the justice of the peace is: "will there be a serious risk to the life, health or well-being of the residents (or visitors or members of staff) if I do not make the order?". The degree of risk must be compared with the consequences of the order. An order should not be made unless it is the only way of avoiding a serious risk to the life, health or well-being of the residents (or visitors or members of staff) (per Phillips J, as he then was, in Hillingdon LBC v McLean 88 LGR 49).
205. There is no reason why, if the registration authority has material before it which it believes justifies an application under section 20 but recognises that it may fail either in its application to a justice of the peace or on an appeal to the Tribunal, it should not simultaneously adopt the alternative route of indicating that it proposes to cancel the registration. If the justice of the peace refuses the application or an appeal is allowed, the "ordinary" procedure can then be followed (see Lyons v. East Sussex CC 86 LGR 369 and R v Ealing, Hammersmith and Hounslow Health Authority and others (1996) 30 BMLR 92).
206. Appeals

Under section 21 of the 2000 Act an appeal against a decision of the registration authority or an order made by a justice of the peace under section 20 of the Act lies to the Tribunal. On an appeal against a decision of the registration authority, the Tribunal may confirm the decision or direct that it shall not take effect. On an appeal against an order made by a justice of the peace, the Tribunal may confirm the order or direct that it shall cease to have effect.

207. An appeal to the Tribunal is a rehearing. The Tribunal can therefore admit evidence that has previously been overlooked or which relates to events that occurred after the decision of the registration authority or the justice of the peace. The role of the Tribunal is not to review the decision of the registration authority or the justice of the peace but to engage in a total examination of all of the evidence. The Tribunal conducts a merits appeal not a judicial review (see Appiah-Anane v NCSC [2002] 96 NC and OFSTED v Spicer [2004] EWHC 440 (Admin).).
208. National minimum standards

Section 23 of the 2000 Act empowers the appropriate Minister to prepare and publish statements of national minimum standards applicable to establishments and agencies. Section 23(4) requires the registration authority and the Tribunal to take those standards into account when making any decision.

209. The relevant national minimum standards applicable to care homes for older people were published by the Minister for Health and Social Services of the Welsh Assembly Government on 3 March 2004.
210. There is no legal requirement to comply with the minimum standards but compliance with the regulations is enforceable subject to the national minimum standards being taken into account. The standards are to be applied with the aim of achieving the overall objective of ensuring that the best interests of service users are secured. Decisions of the registration authority and the Tribunal should not take a substantially different course from that identified in the standards.
211. Regulations

Sections 3, 22 and 118 of the 2000 Act give power to the National Assembly for Wales to make regulations imposing requirements upon, and making provisions in relation to, care homes in Wales.

212. The relevant regulations are the Care Homes (Wales) Regulations 2002. These came into force on the 1^st April 2002.
213. Regulation 10 requires the registered provider and the registered manager of a care home to carry on or manage the home with sufficient care, competence and skill.
214. Regulation 12 provides that the registered person shall ensure that the care home is conducted so as to promote and make proper provision for the health and welfare and the care and treatment of service users.
215. Regulation 13(2) provides that the registered person shall make arrangements for the recording, handling, safe keeping, safe administration and disposal of medicines received into the care home.
216. Regulation 13(4) requires the registered person to ensure that all parts of the home to which service users have access are, so far as reasonably practicable, free from hazards to their safety.
217. Regulation 13(5) requires the registered person to make suitable arrangements to provide a safe system for moving and handling service users.
218. Regulation 14(2) provides that the registered person shall ensure that the assessment of the service user's needs is kept under review and reviewed at any time when it is necessary to do so having regard to any change of circumstances.
219. Regulation 15 requires the registered person to prepare service users' plans and keep them under review.
220. Regulation 17 requires the registered person to maintain and keep proper records in respect of each service user.
221. Regulation 18(1) requires the registered person to ensure that suitably qualified, competent, skilled and experienced persons are working at the care home in such numbers as are appropriate for the health and welfare of service users and to ensure that the persons employed to work at the care home receive training appropriate to the work they are to perform and suitable assistance, including time off, for the purpose of obtaining further qualifications appropriate to such work.
222. Regulation 18(2) requires the registered person to ensure that persons working in the care home are appropriately supervised.
223. Regulation 19(1) provides that the registered person shall not employ a person to work at a care home unless that person is fit to do so and regulation 19(2)(d) provides that a person is not fit to work at a care home unless full and satisfactory documentation is available in relation to him or her.
224. Regulation 24 deals with the fitness of premises and provides, inter alia, that the registered person shall ensure that the premises are of sound construction and kept in a good state of repair and that the registered person shall take adequate precautions against the risk of fire.
225. Regulation 25 provides that the registered person shall establish and maintain a system for reviewing and improving the quality of care provided at the care home.
226. Regulation 26 provides that the registered provider shall carry on the care home in such manner as is likely to ensure that the care home will be financially viable.
227. Burden of proof

The burden of proving breaches of either the Act or the Regulations made under it or some other relevant statutory provision lies upon the Respondent.

228. Standard of proof

The standard of proof required is that described in the decisions of the House of Lords in Re H and others (minors) (sexual abuse: standard of proof) [1996] AC 563; [1996] 1 All ER 1 [1996] 1 FLR 80 and Secretary of State v. Rehman [2002] 1 All ER 141. In the former case, Lord Nicholls of Birkenhead said:

"[T]he standard of proof required in non-criminal proceedings is the preponderance of probability, usually referred to as the balance of probability….

The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability….

Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation."

Issues

229. It was argued by Mr Furness QC on behalf of the National Assembly that:

(a) the case for the Applicant was that there was a conspiracy involving the staff of the CSIW generally, and Mrs Price in particular, because they were unhappy with the result of the appeal to the Tribunal in May 2005;

(b) Dr Das's evidence was to the effect that the local authorities also conspired with the CSIW to starve the Applicant company of funds in an attempt to bring it to its knees;

(c) the conspiracy theory was unsound because:

(i) the decision to seek emergency closure of Holly House and the decisions to cancel the registrations of Holly House and The Beeches were not made by Mrs Price;

(ii) witnesses who are nothing to do with the CSIW confirmed that there was a compromise in respect of Holly House which had the support of the CSIW until Dr Das arrived and "scuppered" the process;

(iii) the fact of a compromise, which the Applicant company (through  Dr Das) rejected, was clear evidence that there was no conspiracy because the local authority and the health board would not have agreed to provide heating and meals in order to keep the home open if their intention was to support the closure;

(iv) Holly House did not have a gas safety certificate and there was agreement that all of the eight gas appliance in the home were "at risk";

(v) the covert recording of Mrs Price in February 2006, far from suggesting that she was intimidating, actually showed a very balanced and friendly approach with laughter and good humour (when a wholly inadequate reference was discovered) and that Mrs Pritchard was well able to deal with the situation;

(vi) in respect of The Beeches, it was apparent from the previous inspection report that there were serious problems before the decision of the Tribunal in May 2005;

(vii) the protection of vulnerable adults strategy meeting in May 2005 in respect of The Beeches related to the failure to pay the gas bill and the consequent  threat of disconnection;

(viii) the evidence of Mrs Strange as to what she found at The Beeches in May 2005 clearly showed the serious problems that existed and Mrs Strange could be said to be part of the conspiracy because she was a witness for the applicant and she is employed by Torfaen Local Health Board who had nothing to do with the original Holly House hearing;

(ix) Torfaen have been obliged to provide support for The Beeches at various times through the course of the past year (including the funding of the employment of Ms Sarah Hill for six weeks) and this does not fit in with the conspiracy theory;

(d) it was significant that Mr Reed on behalf of the Applicant suggested to Mr Morgan that he had perjured himself before the justice of the peace because such an allegation must have been made on instructions and those instructions could not have come from Mr Black (who filed a statement indicating that Mr Morgan gave his evidence very fairly and accurately) and must have come from Dr Das;

(e) Dr Das's own belief in the conspiracy was such that he was unable to recognize his own failings or those of his homes and was prepared to make preposterous and unfounded allegations to try to preserve his position;

(f) the evidence of Dr Das was so far from the truth and so thoroughly dishonest that it should not be accepted in any respect;

(g) in relation to Holly House, there was a failure to ensure that there was an appropriate gas supply and certification and a subsequent refusal to act upon requirements thereby causing an emergency cancellation and an unplanned removal of all service users;

(h) the general management of Holly House was in breach of regulation 10 having regard to:

(i) the appointment of Mrs Tanta (who was insufficiently qualified or experienced) as a replacement for Mrs Greening;

(ii) the failure to ensure that the home had a valid gas safety certificate;

(iii) the failure to ensure that a suitable responsible individual was in place to provide proper leadership;

(iv) the failure to respond properly to the decision of the Tribunal in May 2005 and to continue improvements including the installation of the appropriate number of assisted showers;

(v) the lack of evidence of staff training; and

(vi) the lack of staff supervision;

(i) the Applicant company breached regulation 26 in that it failed to carry on both Holly House and The Beeches in such manner as was likely to ensure that they would be financially viable;

(j) the general management of The Beeches was in breach of regulation 10 having regard to:

(i) the absence of a registered manager since 1 November 2004;

(ii) the absence of any manager at all from 8 July 2005 until the end of August 2005; and

(iii) the deficiencies in the system for the management of medicines;

(k) the Applicant company breached regulation 7(3) in relation to The Beeches in that it failed to ensure that there was a responsible individual of suitable integrity and good character;

(l) there was a breach of the obligation to provide adequate equipment at The Beeches;

(m) the Applicant company was in breach of regulation 18(1) in that it failed to ensure that suitably qualified, competent, skilled and experienced persons were present at The Beeches;

(n) there was a failure to ensure appropriate supervision of employees at The Beeches in breach of regulation 18(2);

(o) the Applicant company was in breach of regulation 19(2) in that it failed to ensure that the staff were fit to work in The Beeches;

(p) care plans for residents of The Beeches were at first non-existent and, latterly, inadequate, in breach of regulation 14(2);

(q) there were breaches of regulation 12(1) at The Beeches in that proper provision was not made for the health and welfare of service users;

(r) there was a failure to maintain a system for reviewing and improving the quality of care of residents of The Beeches in breach of regulation 25;

(s) there was a failure to ensure that the premises at The Beeches were of sound construction and in good repair in breach of regulation 24(2);

(t) there was a failure to make adequate precautions against fire at The Beeches in breach of regulation 24(4);

(u) there was a failure to maintain records and keep them up to date at The Beeches in breach of regulation 17(2);

(v) The Beeches had ceased to be financially viable or was likely to cease to be financially viable within the next six months;

(w) the Applicant company had failed to pay annual fees in respect of both Holly House and The Beeches in breach of the Registration Regulations;

(x) the emergency closure of Holly House was appropriate and necessary;

(y) neither the Applicant company nor The Beeches was financially viable and there could be no confidence in the ability of the management of the company to formulate or implement proactive plans.

230. It was argued by Mr Reed on behalf of the Applicant:

(1) in relation to the appeals generally, that:

(a) the appeal against the decision of the justice of the peace could properly be marginalised by the Tribunal relying upon the subsequent appeal against the decision to cancel registration of Holly House: such an approach would circumvent the appeal procedure and approve the inappropriate actions of the CSIW;

(b) the appeals related only to Holly House and The Beeches and the evidence about other homes which the Respondent attempted to introduce was irrelevant to the issues for determination and should be disregarded;

(c) the Tribunal heard a more protracted dispute than was necessary and this may have been a deliberate tactic on the part of the Respondent to assert greater financial pressure on the Applicant company;

(d) the care of residents was the primary concern and this was the issue that ought to have been focused upon by the Respondent but was not, because the care of the residents was very good and would not have resulted in cancellation;

(e) the proposition that care was good was fortified by the numerous service users' relatives who appeared before the Tribunal and the numerous others who wrote to the Tribunal and were willing to appear but were not called because of the time constraints;

(f) the Respondent presented an oppressive amount of material, not all of which was backed up with specific details;

(g) the Respondent's evidence was disproportionate in its volume and based on opinion and perception rather than fact and sometimes duplicated, so that the parties were prevented from appearing before the Tribunal on an equal footing;

(h) many of the thousands of allegedly fact-based matters set out in the Respondent's case fell away upon closer examination;

(i) the Respondent relied almost exclusively on breaches of the regulations and national minimum standards and failed correctly to evaluate the wider picture including the views of residents and relatives and evidence of daily life in the home;

(j) the CSIW erroneously applied the national minimum standards as though they were regulations;

(k) the Respondent's evidence comprised a significant amount of hearsay even though it had ample opportunity to obtain direct evidence and hearsay evidence should not be used as proof of any significant allegation unless there was a good reason why the direct evidence could not have been obtained;

(l) Mrs Price, Mr John Powell and Mr Geraint Morgan acted in bad faith, as was evidenced by various documents, including a letter from Mrs Sharon Rees to Mr C.; and

(m) the absence of Mrs Bond rendered a fair hearing impossible;

(2) in relation to Holly House emergency cancellation, that:

(a) the intransigence on 25 August 2005 was on the part of CSIW and Dr Das was essentially right in his analysis of the gas situation;

(b) the gas problem was corrected immediately and no problem currently exists with the gas supply;

(c) the hearing before the justice of the peace was flawed; the court was misled and there was a breach of the Convention right to a fair hearing (Article 6);

(3) in relation to the Holly House "ordinary" cancellation, that:

(a) without the gas issue the Respondent would not have dared to cancel the registration under the normal procedure;

(b) while there were breaches of the regulations, improvements were being implemented gradually;

(c) the only conceivable basis to cancel the registration in respect of Holly House would have been financial viability;

(4) in relation to The Beeches "ordinary" cancellation, that:

(a) it could not be purely coincidental that problems started only after the Tribunal's decision in May 2005;

(b) the transcript of the recorded conversation on 7 February 2006 undermined Mrs Price's credibility and integrity and cast doubts upon her ability as an inspector;

(c) a number of the Respondent's allegations were wild and unsupported by evidence, illustrating the vindictive manner in which the Respondent conducted the litigation;

(d) the Convention rights of the residents to respect for their private and family lives, their home and their correspondence (Article 8) had to be considered;

(e) the report of joint contract compliance visit on 11 May 2006 was positive of and undermined the assertions made on behalf of the Respondent;

(f) the improvements were significant;

(g) the CSIW adopted inconsistent standards, particularly in relation to sluices;

(h) there was no breach of the staffing requirements at The Beeches;

(i) the staffing requirements provided that Mrs Pritchard had to be at The Beeches for no more than10 hours per week ;

(j) there was no evidence that the staff employed by the Applicant were not suitably qualified, competent, skilled or experienced;

(k) there was ample evidence that the staff received suitable training;

(l) there was clear evidence from Mrs Pritchard that appropriate supervision of staff was taking place;

(m) regulation 19 does not impose a duty on the Applicant company to obtain medical certificates from its employees;

(n) any previous failings in respect of the assessment of service users (regulation 14) and service user's plans (regulation 15) have been rectified; and

(o) Mr Cole's evidence provided a sufficient basis for the conclusion that the service user group as a whole was safe, that the quality of care was satisfactory and that the quality of life was appropriate;

(5) in relation to conditions that might be imposed by the Tribunal, that:

(a) there is no restriction on the number or type of conditions that may be imposed upon a registration by the Tribunal;

(b) there should be a condition that a surveyor be appointed to identify the defects, in order of priority, and a timetable for their correction;

(c) there could properly be a condition that Mrs Pritchard be the registered manager of The Beeches; and

(d) any changes to the company structure of the Applicant would be accepted;

(6) in relation to financial viability, that

(a) regulation 26(1) does not require the Applicant to ensure financial viability but to act so that it is likely to ensure financial viability of the care home;

(b) there have been a number of improvements including refinancing;

(c) indebtedness had been discharged notwithstanding the current difficult trading climate;

(d) energy supplies to the homes had never been disconnected so that the service users were not jeopardised;

(e) there was ample evidence of the Applicant company discharging its bills without difficulty and/or in an amicable manner;

(f) sales of homes would remove the Applicant company's indebtedness to its bankers;

(g) there was no suggestion of illegality on the part of the Applicant company, the directors or accountants; and

(h) the Applicant company was able to trade and was financially viable;

(7) in relation to the rights of service users, that

(a) the Tribunal is required to consider human rights issues;

(b) closure of the homes would interfere with and breach the service users' rights under Articles 2 ...right to life), Article 3 (freedom from torture or inhuman or degrading treatment) and Article 8 (respect for private and family life, home and correspondence) of the European Convention;

(c) the burden of proof was on the public authority (the CSIW) to establish an Article 8(2) justification and it would have to prove that the proposed course (closure) was proportionate;

Conclusions and reasons

231. Having carefully considered all of the evidence given and the arguments presented at the hearing and the witness statements and other papers submitted in advance, the Tribunal came to the following conclusions:
232. The Respondent only applied to a justice of the peace for the emergency cancellation of the registration in respect of Holly House because of Dr Das' refusal to accept the compromise reached at Holly House before he arrived there on 25 August 2005.
233. On 26 August 2005 Dr Das relented and authorised the repair work that was necessary to render the gas installation safe. That work was completed by 2 September 2005. It follows from the propositions: (a) that an appeal to the Tribunal is a rehearing and (b) that the Tribunal can admit evidence which relates to events that occurred after the decision of the justice of the peace, that the appeal against the "emergency" order should be allowed. Mr Furness QC did not argue otherwise.
234. Mr Reed's extensive submissions in relation to Article 6 were beside the point. The appeal process is part of the "fair and public hearing".
235. The alleged misconduct of the Respondent's solicitor at the hearing before the justice of the peace was not a matter for the Tribunal and it should not have been raised in submissions on behalf of the Applicant.
236. The Tribunal concluded that the appeals against the decisions made under the "ordinary" procedure for the cancellation of the applicant company's registrations in respect of both Holly House and The Beeches should be dismissed.
237. The Tribunal declined to accept the argument, advanced by Mr Reed, that hearsay evidence should not be used as proof of any significant allegation. The Tribunal may consider any evidence, whether or not such evidence would be admissible in a court of law (regulation 22(1)). However, the Tribunal kept firmly in mind that it should consider carefully the weight to be attached to hearsay reports as opposed to direct evidence subjected to cross-examination. Most of the findings made by the Tribunal were based on direct evidence, such as the observations made by inspectors and the contemporary documents. Whenever the Tribunal based its conclusions on hearsay it looked for and found corroboration.
238. The Tribunal found it unnecessary to decide many of the detailed factual disputes in the light of its findings about more general matters of fundamental significance.
239. The Tribunal rejected Mr Reed's submission that the evidence about other homes which the Respondent introduced should be disregarded because it was irrelevant to the issues for determination. The Tribunal took into account the evidence about matters arising in other homes operated by the Applicant company where it was relevant and probative. For example, Mrs Greening's evidence about the financial arrangements at Brithdir in December 2005 came into that category.
240. The Tribunal also rejected Mr Reed's heavily over-stated submission that the absence of Mrs Bond rendered a fair hearing impossible. It was accepted on behalf of the Applicant company that Mrs Bond should not be required to give oral evidence having regard to the effect upon her of her recent bereavement. Mrs Bond's principal role was to decide, on behalf of the Respondent, whether the notice of proposal in relation to The Beeches should be confirmed. The suggestion that she had a pivotal role in the alleged conspiracy was baseless and no amount of cross-examination of her would have improved the Applicant's case on that point. Furthermore, the relevant allegations were all put to other members of the staff of the CSIW and were firmly rejected by them.
241. The Applicant company was operating both Holly House and The Beeches in breach of many regulations. This was not seriously disputed. The nature and extent of the breaches were hotly disputed and the Tribunal was called upon to read and hear detailed evidence about these matters in order properly to determine whether the breaches should be regarded as sufficient to justify the cancellation of the registration (as the Respondent maintained) or whether they were relatively minor matters, capable of being remedied, which were unreasonably relied upon by inspectors acting in bad faith.
242. Many of the breaches of the regulations at both Holly House and The Beeches related to the "paperwork" in relation to both service users and staff. The Applicant persistently failed to comply with regulations 17 and 19. The Tribunal rejected the submission that these problems were relatively unimportant and that attention should be focussed more closely on the quality of the care actually given. Both are equally important. In Farooq and Farooq v Croydon LBC (Decision No. 219) the Registered Homes Tribunal said that "records are not simply a description of what is happening. Good, accurate and reliable records are essential to, and indicative of, the whole process of care in a well run home …[F]or continuity of care of residents, all of the staff need to have clear records to which they can turn, so that, for example, absences of staff or incidents with residents do not take anyone by surprise". Staff at Holly House and The Beeches did not have many useful clinical records until the CSIW intervened. At Holly House, Mrs Greening made significant improvements. However, the home was closed before it could be seen whether those improvements would be sustained.
243. At The Beeches the lack of a registered manager after November 2004 resulted in an almost complete absence of care planning and a subsequent deterioration in the care of the service users.  Concerns were rightly raised regarding risk assessments, lifting and handling and the administration of medicines.  A large number of protection of vulnerable adults strategy meetings were held.  Torfaen County Borough Council and the Health Board showed their commitment to The Beeches by providing and paying for a senior nurse (Ms Hill) and care staff from Community Careline Limited to work in the home to assist in improving the standard of care.  Other nurses (Mrs Walker, Mrs Edmunds and Mrs Strange) also visited the home and tendered good advice. Mrs Wilson (of Gwent Healthcare) and Mrs Price also endeavoured to assist.  Staff at The Beeches may have felt uncomfortable at times with this level of intervention but the support was there for them.  The Tribunal accepted that some improvements were made. First, Ms Hill and, later, Mrs Pritchard established the basis for an acceptable system. Nevertheless, significant deficits remained in the preparation and review of care plans, the timely delivery of care, the provision of appropriate specialist equipment and the clinical audit. As several witnesses, including Mrs Strange, observed, the problem for the Applicant company would be sustaining the improvements. A competent manager would be needed to supervise the record keeping system closely and to modify it when appropriate. Experienced staff would have to recognise the need for good record keeping and take the time to enter the data. In the light of the history of The Beeches there were serious doubts as to whether this would happen in the future if the home were to remain open.
244. The Tribunal accepted the evidence of Mrs Strange to the effect that the post of registered manager at The Beeches is "demanding"; that the home "requires an experienced registered manager to ensure that there is leadership and development of the workforce" and that, before September 2005, the "nursing processes" at The Beeches were "very poor indeed". The Tribunal also shared Mrs Strange's concern that, now, Mrs Pritchard "does not perform the morning shift … and does not receive or witness regular handover from the night staff".
245. The evidence relating to the recruitment of staff at The Beeches caused the Tribunal considerable concern.  Suitable references, Criminal Records Bureau disclosures and health declaration documents were absent from many of the staff files.  These were not minor matters. For example, Mrs Rose Powell was allowed to continue working for 12 months using her deceased mother's National Insurance number. She was eventually suspended and then dismissed following repeated complaints about her physical and verbal abuse of residents and a finding that she had been guilty of verbal abuse.
246. The Applicant company's directors and officers were well aware of the need to have a competent and committed manager in each of the company's homes and equally aware of the problems that would inevitably follow if there were no such manager in place. During a "fit person" interview in relation to Valley Manor Nursing Home, Mr Black rightly said that: "managing a care home demands a high level of professionalism and multi-tasking". The history of both Holly House and The Beeches shows that the Applicant company completely failed to meet the challenges it faced when the managers of the homes left. Both Dr Das and Mr Black took the view that all that they could reasonably do was to advertise the vacant posts and to wait for applications. This was obviously not correct. The Applicant company probably needed to acquire the services of people who could demand a salary above the "going rate". Dr Das apparently never accepted that he might have to employ a recruitment agency to find such a person. He would clearly have been unwilling to incur the cost of such a recruitment exercise or to pay the necessary salary. He preferred to promote someone from within the existing organisation, irrespective of whether he or she was either competent or committed. This resulted in a series of bizarre appointments, both at Holly House and The Beeches, where the appointees were unwilling to take on the responsibilities and, in one instance, unaware that her name had been put forward to the regulator.
247. Both Dr Das and Mr Black seemed to believe that a distinction could be drawn between an "acting manager" and a registered manager and that it was reasonable for a person who would not ultimately be accepted as suitable by the regulator to manage a home temporarily until another candidate could be found. This was a fundamental misapprehension. The regulations provide that, where the registered provider is an organisation, there must be a manager and that nobody shall manage a care home unless he or she is fit to do so. For administrative reasons, those who aspire to be registered are permitted to act as managers pending consideration of their applications. This does not mean that those who do not aspire to become registered managers (because they do not have either the relevant qualifications or experience) can be designated as acting managers on a temporary basis.
248. The Applicant company persistently failed to deal properly with appointments of managers.
249. Mrs Greening (whose application for registration as the manager of Holly House was ultimately rejected) did not apply for registration immediately. The explanation for the delay revealed the absurdity of the financial arrangements within the Applicant company. In the absence of Dr Das abroad, Mrs Greening could not obtain a cheque from the company to pay the registration fee and eventually had to pay that fee herself and be reimbursed in cash. This was the first of many examples of employees of the Applicant company experiencing difficulties in securing funds to meet the cost of required services. The most serious problem related to the payment of agency staff. In July 2005 Mrs Pennells was unable to use an agency for urgent staff cover at The Beeches. This was not a temporary problem. Mrs Greening faced the same difficulty at Brithdir in December 2005.
250. Mrs Tanta became deputy manager at Holly House to meet the condition placed on the company's registration by the Tribunal in May 2005.  She had particular responsibility for the service users' care and worked opposite shifts to Mrs Greening, the acting manager.  Following Mrs Greening's resignation, Mrs Tanta was made acting manager.  She was not consulted about this. Her name was simply put forward. She did not have suitable qualifications and was expected to assume the role with insufficient preparation and no senior management support.
251. The arrangements for the appointment of a manager at The Beeches following the departure of Mrs Grohmann were seriously flawed and in flagrant breach of the regulations. Mr Black did not notify the CSIW that Mrs Pennells had been appointed as acting manager in place of Mrs Grohmann until 3 March 2005 (more than 3 months after Mrs Grohmann's departure). Mrs Pennells did not apply for registration as the manager. Nearly four months later, on 21 June 2005, she told Mr John Powell and Mrs Price that she was "only the acting manager" and that she had informed Mr Black and Mrs Pritchard that she did not want the job of manager. On the same day Mrs Pritchard contradicted this. She told Mrs Price that Mrs Pennells would be applying for registration as the manager. In its response to the notice of proposal to cancel the registration the Applicant company actually asserted, erroneously, that it had never suggested that Mrs Pennells would apply to become the registered manager and that she was only appointed as a "temporary manager".
252. On 5 July 2005 Mrs Pennells again told Mrs Price that she did not want to be the manager of the home. She said that she had not undertaken supervision of staff since she was not the manager. Three days later Mrs Pennells began working night shifts at The Beeches and so abandoned any pretence that she was managing the home. The home then had no manager at all. Other staff were apparently unaware of this state of affairs. Alternatively, they were aware of the true position but lied to the inspectors. Mrs Pritchard's explanation that Mrs Madikane may not have told the truth because held grievances against Dr Das in connection with her accommodation and her employment elsewhere was hardly to the point. More than a month later (on 10 August 2005) Mrs Madikane implied that Mrs Pennells was still the manager when she told Mrs Price that she had told Mrs Pennells about the difficulties in obtaining additional staff and that nothing had been done. On 15 August 2005 Mrs Madikane expressly said that she thought that Mrs Pennells was still the manager of the home, even though Mrs Pennells had actually left The Beeches one week earlier. On the same day Mr Black said that he could well understand why the CSIW was so concerned about the situation at The Beeches. Nevertheless, on 16 August 2005 Dr Das made the preposterous retort to Mrs Price that the "matrons were responsible for running their own homes" when he knew or ought to have known that there was no "matron" nor anybody acting as such at The Beeches.
253. Mrs Price then gave Mr Black five working days to nominate a suitably qualified and fit person to apply for registration as the manager of The Beeches. It appears that Mr Black had finally realised that the Applicant company was facing a most serious difficulty (in that it had been operating The Beeches without a manager and therefore wholly unlawfully for many weeks) but only on 25 August 2005 (outside the deadline imposed by Mrs Price) did he telephone the CSIW to inform them that Mr Diccon Hill would be transferring to The Beeches from Valley Manor and that, in due course, he would apply to be the registered manager.
254. The appointment of Mr Hill as acting manager of The Beeches was obviously inappropriate. On 7 September 2005 Mr Hill himself told Mrs Price that he would not, in fact, be seeking registration as the manager because he had neither the qualifications nor the experience needed for the job. Nevertheless, on 14 September 2005, Mr Black informed the CSIW that Mr Hill would continue as the acting manager of The Beeches until a new manager could be found. He implied that Mr Hill would not be applying to be the registered manager, apparently oblivious of the fact that, in that case, he should not have been appointed to act as the manager at all. Almost two weeks passed before Dr Das informed the CSIW that Mrs Pritchard (who had recently undergone a hip replacement) would be the acting manager of The Beeches with immediate effect. Mrs Pritchard delayed her application for registration until 20 October 2005.
255. The Applicant company was manifestly in breach of its obligation under regulation 10 to carry on both Holly House and The Beeches with sufficient care, competence and skill. The Applicant was also persistently in breach of its obligation under regulation 26 to carry on the homes in such manner as was likely to ensure that they would be financially viable.
256. As the events at Holly House on 25 August 2005 graphically illustrated, Dr Das was the person in ultimate control. His financial management was unprincipled and ill-considered and, in some instances, disastrous.
257. Dr Das' decision in or about October 2004 to stop paying the Revenue the monthly amounts due from the company in respect of its employees' income tax and National Insurance contributions was extraordinary. He should have known that, whatever their failings in other areas, the Revenue are reasonably vigilant in policing the operation of the PAYE system; would not tolerate blatant non-payment and would take stern action sooner rather than later. Within a year the Applicant company faced a winding up petition.
258. One of the more bizarre financial decisions taken by Dr Das was his attempt to extract "cheap money" from Caerphilly County Borough Council in June 2005. Within a very short time of the publication of the Tribunal's decision giving him a last chance to save Holly House, Dr Das wrote to the Director of Finance of his company's main customer and revealed that it had pressing debts totalling £49,360 that it could not pay. Dr Das in effect threatened Caerphilly that if they did not help him financially he would be forced to leave them without a home in which to place the vulnerable adults for whom they had responsibility. Dr Das should have known that his request for financial assistance from the Council was doomed to failure and that his disclosure of the company's financial plight would simply undermine the confidence of the County Borough in its ability to maintain a service.
259. It should have been obvious to Dr Das, long before the decision of the Tribunal in May 2005, that the Applicant company would have to invest in Holly House to enable the home to survive. This certainly became obvious when the Tribunal delivered its written decision and Mr Cole made his reports. The company was given a last chance to "put its house in order". It did not take it.
260. At the hearing in April and May 2005, the Applicant company had promised that Mr Cole would be closely involved. Shortly thereafter, there were problems. Instead of liaising closely with Mr Cole (and incurring a charge for his time), the Applicant company simply used one of his draft documents. In the month following the publication of the decision in May 2005, little effective action was taken. Mr Cole felt constrained to comment upon the "lack of confidence about the future of Holly House" caused by "the lack of confirmed plans for the improvements required". By 22 June 2005 no action had been taken to create a secure recreational area in the garden, to install the required assisted baths or to draw up an improved plan for maintenance and repairs. Mr Cole also had to point out that the appointment of a deputy manager was overdue and to remind his client that "urgent action" was necessary "to invest in improvements to basic facilities and the fabric of the building and in staffing".
261. Although Mr Black did not fully appreciate the nature and extent of the obligations imposed by the Tribunal in May 2005 in relation to the appointment of a deputy manager (as was apparent from his oral evidence), Dr Das did appreciate the nature and extent of those obligations. He revealed, at the meeting on 16 June 2005, that he was minded to reject the condition imposed by the Tribunal (because of the expense involved) or to find some way to comply with the condition at minimal expense. Thus, he employed Mrs Tanta as the deputy manager.
262. Mrs Tanta was ill-suited to the task that the Tribunal had in mind for the deputy manager of Holly House. She is a quiet and diffident woman. She has long experience of nursing but in the wholly different environment of the disadvantaged majority community in South Africa. Mrs Tanta was wholly unfamiliar with the regulatory regime in Wales and quite unable to confront the task of re-organising the "evidential paperwork". She was engaged to work on opposite shifts to Mrs Greening. This was not what the Tribunal had had in mind. Mrs Greening was supposed to have a deputy working with her to take on some of the burden of management.
263. Dr Das should have realised that the only way that the Applicant company could break out of the circular problem at both of the homes (i.e. lack of full occupancy levels leading to poor quality of service, leading to further reductions in occupancy levels and so on, in a downward spiral) was to invest in improvements and thus achieve levels of occupancy which would eventually make the business profitable. Dr Das did not take that course. On the contrary, he simply tried to cut costs. If he could not reduce the costs, he either delayed payment of them or declined to pay them at all. As a result, potential customers, suppliers, staff and the regulator alike were frustrated and lost confidence. Dr Das established an appalling reputation for himself and the Applicant company. The company was described by a credit agency as "a maximum risk company". Thus, far from breaking out of the downward spiral, Dr Das added considerable momentum to it.
264. The Applicant's failure to pay the utility bills completely undermined the confidence of one of its main "customers" (Torfaen Local Health Board) and also had a direct effect upon the well-being of the residents of both Holly House and The Beeches. As Mrs Strange observed: "the residents were under a constant threat of removal from the home due to the history of financial difficulties of the Proprietor".
265. Dr Das gave false evidence to the Tribunal both orally and in writing. He did so with the intention to deceive. He sought to convey the impression that his principal, if not his only, motive in carrying on the businesses was to benefit the disadvantaged communities of South Wales. In support of this case he asserted that neither he nor his wife had ever taken remuneration from the Applicant company. This was manifestly untrue. As the accounts of the companies revealed, Dr Das and his wife have benefited considerably from their indirect ownership of them. Dr Das extracted funds from the applicant company and the other companies in the group in a manner which, if not illegal, was certainly unethical. On the advice of accountants, and presumably in order to avoid taxes, the companies, including the Applicant company, granted Dr Das massive loans instead of paying him emoluments or dividends. The increase in his director's loan account with the Applicant company from 31 October 2002 to 31 October 2003 (£57,787) during a period when the company made a very substantial loss and failed to pay its bills was truly remarkable and indefensible. At that time, the company plainly needed to recover the debts owed to it, not to extend further credit to its directors. In the following year, as soon as the company made the semblance of a profit, it paid directors' emoluments to Dr Das and his wife of £50,000 and made contributions to their pension schemes of £9,400. At a time when the company needed considerable support from its bankers to pay its suppliers and its employees it increased its overdraft, effectively to pay money it could not afford to its directors. Dr Das only resolved to repay his debt to the Applicant company when it was faced with extinction in January 2006. Even then, he delayed until the last possible moment and did not make payment in full. His explanation that he needed time to raise the funds by mortgaging his house was ludicrous. Dr Das owns several properties. Raising funds on the security of one or more of them would not be a time-consuming process. Further, Dr Das' statement made on 15 March 2006 that he had "put £270,000 into the company since September 2005" including "settlement of various expenditures including the debt owed to the Inland Revenue" was misleading.
266. Dr Das' explanation as to why the Applicant company had not produced the documents formally demanded by Mr Jones was wholly unsatisfactory. He said that he was not the person responsible for that. He had passed the request to the company's accountant and "left it at that". The Tribunal was unable to accept that explanation and was driven to the conclusion that Dr Das ignored the demand because he knew that the Respondent would otherwise receive information which would readily have led it to conclude that the business was not financially viable.
267. Dr Das has developed an extraordinary capacity for self-delusion. He maintained that the manager and staff at Holly House were frightened of Mrs Price's intimidating nature. It should have been obvious to him (as it was to the previous and to this Tribunal) that Mrs Greening would probably not have been intimidated by any inspector and was certainly not intimidated by Mrs Price. This was one of many examples of Dr Das persuading himself that there was evidence to support his position when, in reality, there was not. In his most recent witness statement Dr Das said, without a trace of irony, that he felt that "Puretruce should be congratulated, not continually criticised".
268. Dr Das has, on several occasions, received expert advice but has declined to accept it. The advice must, it appears, coincide with his own preconceptions before he can regard it as sound. His response to those who tender unwelcome advice can be suspicious, accusatory and vituperative. The clearest example of this was Dr Das' response to Mr Foxwell and Mr Taylor on 25 August 2005. Without any justification, he accused the former of incompetence and venality and the latter of obfuscation and incompetence.
269. Dr Das received clear advice from Mr Taylor in August 2004 as to what should be done to remedy a major problem with the gas pipes at Holly House. He chose to ignore that and to secure the services of another, cheaper contractor to do only part of the necessary work.
270. Dr Das received clear and good advice from Mr Cole in relation to both Holly House and The Beeches. He followed it to some extent but not completely and only belatedly.
271. The CSIW have, in effect, been advising Dr Das as to the shortcomings of his homes for several years. His response has been to accuse them of incompetence, bad faith and conspiracy. He has never had any proper basis for doing so. Mrs Price and her colleagues and superiors were plainly only doing, to the best of their ability, the jobs they were appointed to do. As a witness, Mrs Price was nervous and defensive but the Tribunal had no reason to accept that she was in this state because she had been acting in bad faith. Mr John Powell was an impressive witness. The Tribunal was entirely satisfied that he acted properly and diligently. He received reports and obtained first hand evidence of deficiencies upon which he relied when issuing the notices of proposal.
272. Mrs Price and Mr Powell denied that they were determined to secure the closure of the homes and protested that they would have been content for the applicant company to make changes resulting in the continued operation of both Holly House and The Beeches. The Tribunal formed the view that Mrs Price, Mr John Powell and others did, at some point, come to the conclusion that the only way forward would be to secure the closure of the homes and that satisfactory reform or renaissance could never be achieved, either at Holly House or The Beeches, while the homes were subject to the control of Dr Das. Thus, when they were faced with the abject failure of the Applicant company to comply with even the most basic of statutory obligations (relating to the certification of fire alarms and gas safety) their reaction was probably more inclined towards satisfaction than disappointment. They may even have felt a fleeting sense of triumph when Dr Das displayed his absurd intransigence on 25 August 2005. However, the Tribunal was satisfied that Mrs Price and the others accused by Dr Das were innocent of the charge of bad faith and acted only in response to the discovery of real problems and matters of genuine concern at both Holly House and The Beeches.
273. The "conspiracy theory" advanced by Mr Reed was wholly misconceived and based, in large part, on a complete misinterpretation of a letter from Mrs Rees to Mr C. The words used ("the reasons for cancelling The Beeches' registration are wider than the regulatory breaches identified in the inspection reports") simply did not have the sinister implications attributed to them. The Tribunal accepted the submission made by Mr Furness QC that allegations were preposterous and unfounded.
274. Dr Das has developed a predisposition towards what Mr Reed, in his final submissions, called "brinkmanship". In Dr Das' case that term may be insufficient to describe his preparedness to approach a chasm before stepping back from it. He certainly confronts problems only at the latest possible moment but he sometimes reacts only after that moment has passed. There were many examples in the evidence.
275. First, and most obviously, the events at Holly House and before the justice of the peace on 25 August 2005 were illuminating. Dr Das apparently did not appreciate that a decision by the magistrate would result in the immediate closure of Holly House. He seemed to believe that some form of injunction or order from a higher authority might be granted to prevent that disaster. He was wrong and thus, in this instance, he went beyond the brink, having misjudged its location.
276. Dr Das only made an acceptable offer to the Revenue on the eve of the adjourned hearing of their petition to wind up the applicant company in January 2006.
277. Despite the fact that the CSIW issued their proposal to cancel the registration of The Beeches on 26 August 2005 and confirmed the decision on 20 October 2005, Dr Das did not authorise a full review of all of the work required to remedy the many problems with the physical environment relied upon by the CSIW. Had he done so, he would have had to face the prospect of completing the work and paying for it. During the hearing it was suggested on behalf of the applicant company that a proper schedule of works might be drawn up by an architect or surveyor and implemented over time. Such a coherent schedule could and should have been drawn up, if not implemented, long before the hearing. This was specifically recommended by Mr Cole on 22 August 2005.
278. Even after the debacle on 25 August 2005, Dr Das failed to pay Mr Mullett in accordance with his requirements so that he walked away.
279. Dr Das allowed at least seven judgments to be entered against the company in respect of money owed. He claimed, wholly unconvincingly, that he always intended to pay and was in negotiations with the claimants about disputed invoices but they went to court anyway.
280. Dr Das failed to deal properly with the legitimate claims of the Applicant company's employees following the closure of Holly House. His explanation for that failure was difficult to follow.
281. Finally, Dr Das only released funds to pay Powergen and Corona Energy when they obtained dates for court hearings of their applications to cut off the supplies of electricity and gas.
282. The history gave the Tribunal no confidence whatsoever that Dr Das would, in the future, be prepared to pay bills within a reasonable time and so give suppliers the necessary confidence in his organisation. The evidence indicated that whenever he regards a demand for payment as excessive, Dr Das simply declines to make any payment.
283. Dr Das is apparently reluctant to share material information with his employees and advisers. He did not tell Mr Black that he had decided not to pay over the tax and National Insurance contributions to the Revenue. Mr Black only discovered this in early 2005 when he was told by the company's accountants. Dr Das did not disclose the failure to pay taxes to the previous Tribunal in April and May 2005. Further, he also failed to tell Mr Cole that there was a problem with the gas installation at Holly House and that the company's financial plight was such that it was not able to pay the cost of his recommended work.
284. Mr Black was initially employed by the Applicant company because of his experience in working for companies dealing in medical supplies. He was expected to reduce the Applicant's costs in that area. He did so successfully. He was then given further responsibilities by Dr Das but was never given any financial powers or responsibilities. Because Mr Black did not have the power to commit the financial resources of the applicant company he was often reduced to making lame and unconvincing excuses for its failures to meet its financial and other obligations. There were many examples of this approach in the evidence.
285. In his letter to the CSIW dated 3 March 2005 (in relation to the delay in replacing Mrs Grohmann as manager of The Beeches) Mr Black suggested that he had been in difficulties because Mrs Grohmann had not made her intentions clear until December 2004. Mrs Grohmann had, in fact, made a clear statement of her intention to leave her post in October 2004. In his evidence Mr Black insisted that Mrs Grohmann had remained in post until December 2004. The applicant company apparently agreed that Mrs Grohmann could remain on sick leave rather than resign. The distinction was of no significance. Mrs Grohmann was not working as the manager.
286. On 12 May 2005 Mr Black informed the CSIW that he had resolved the problem of payment for the gas supply and had sent a cheque to Corona Energy and had arranged to pay the outstanding balance by 25 May 2005. The balance was not paid by that date and the problem was certainly not resolved.
287. Further, Mr Black sometimes resorted to dissembling and misrepresentation in his attempts to stave of disasters. For example, his letter to the CSIW dated 23 August 2005 (in which he endeavoured to explain the absence of a gas safety certificate at Holly House) contained a series of untruths and half-truths. Mr Taylor had not said that he was "happy with the status of the gas appliances and internal piping". The main external gas main needed to be "upgraded" not because "legislation had moved on" but because it was grossly undersized and would not permit a sufficient flow of gas the large number of appliances served by it. Mr Black said that the work would be completed by the end of August or early September when he well knew that it would not be started until 12 September 2005 at the earliest.
288. Further, when Mr Derrick Powell asked, on behalf of Caerphilly Social Services, about the winding up petition, Mr Black told him that the petition was in respect of an unpaid bill from an employment agency which the Applicant company had been paying by instalments. This was clearly untrue. Mr Black said nothing to Mr Derrick Powell about unpaid PAYE and National Insurance contributions even though, by this time (December 2005), he had known for many months that they were being withheld.
289. When giving evidence to the Tribunal Mr Black frequently attempted to steer a course between telling the whole truth and being loyal to Dr Das. His navigation was uncertain and resulted in a series of distortions and implausible rationalisations.
290. Mr Black suggested that the appointment of Mrs Pritchard in September 2005 was possible because of "a reorganisation within Puretruce" that enabled her to relinquish her role as Clinical Nurse Manager. The reality was that Mrs Pritchard was drafted into the manager's post in extremis because the company was unable to recruit anyone else.
291. Further, Mr Black asserted that "appropriate control over the use of agency staff was a sign of (a) the provider's wish to ensure continuity of care for residents and (b) financial prudence". The reality was that Dr Das refused to allow the managers of homes to use agency staff even when they desperately needed to do so because he deeply resented paying the high charges that the agency made. He insisted that if, a manager wanted to use agency staff, he or she would have to use accumulated cash, normally used for incidental purchases, to pay the agency.
292. Mr Black also said that he believed that the Applicant had paid all registration fees due to the CSIW and that any failures to pay were "an oversight". That evidence was ridiculous. On 16 June 2005 the matter was raised and duplicate invoices were supplied. Even then the Applicant company did not pay the amounts outstanding. The reality was that Dr Das decided not to pay the registration fees safe in the knowledge that cancellation of a registration for such default would be regarded as disproportionate.
293. Mr Black's attempts to explain the non-payment of gas bills were equally hopeless. He endeavoured to suggest, inter alia, that the fault lay with Corona Energy because they did have access to manual records and only had inaccurate computer records and because they had sent inflated estimated bills. He also suggested that Corona Energy had only themselves to blame because they had failed to allocate charges to Puretruce Care Limited (which they would have had to write off because that company had gone into liquidation) and had tried to allocate them to Puretruce Healthcare Limited instead. That may have been so but it did not justify the complete failure to pay bills as they fell due. Finally, Mr Black asserted, erroneously, that Corona had "issued a credit for over £30,000" and only then was there an "agreed picture of the overall situation". Whatever was Mr Black's perception, all other interested parties were able to see the picture clearly enough. The Applicant company was not paying for the gas it was using and was under almost constant threat of enforcement action.
294. Mr Black said that he did not recall a conversation with Mrs Price in July 2005 during which she reminded him that he had previously told her that he was not prepared to take on the role of responsible person in respect of The Beeches because Dr Das would not allow him to "hold the purse strings" and would restrict his ability to manage the home in an appropriate manner. He said that he doubted that this ever happened. The Tribunal preferred the evidence of Mrs Price on this point. Mr Black probably did make the comments attributed to him. He would have had ample justification for doing so.
295. Despite his repeated statements to the CSIW in July and August 2005 that he fully understood why they were so concerned about the situation at The Beeches, Mr Black gave evidence to the effect that the problems were overstated and exaggerated by the CSIW and that the CSIW's approach "appeared to be one of seeking to close the home, even if this can be achieved only by demoralising the staff, residents and relatives". Thus he joined Dr Das in alleging that the Applicant company was the victim of a vendetta despite his recognition and concession, in his more unguarded moments, that the situation at The Beeches during the summer of 2005 was a shambles.
296. Mr Black attempted to deal with the very specific criticisms of the absence of a programme of routine maintenance and renewal of the fabric at The Beeches by saying that: "Puretruce implements the relevant and appropriate elements of NMS 33 ". This was obviously no answer to the point. National Minimum Standard 33.2 specifies "a programme of routine maintenance and renewal of the fabric and decoration of the premises" which should be "produced and implemented with records kept".
297. Mr Black was obliged to concede under cross-examination that his "Business Plan" for the rescue of Holly House (prepared in April 2006) was based upon false assumptions and erroneous financial projections. The Tribunal found that the document was superficial, incomplete and unconvincing.
298. The Tribunal accepted and adopted the conclusion reached by Mr John Powell, following his examination of Mr Black's letter written in July 2005 and his interview with him in December 2005, that he "lacks depth". Mr Black also lacks strategic management skills and experience of nursing and social care.
299. As he himself conceded, Mr Black's commitment to the Applicant company has been less than complete since he announced his intended resignation in June 2005 but then decided to stay on temporarily. He is, and has been for some time, actively seeking alternative employment. In any event, the Tribunal was not persuaded that Mr Black has the integrity, ability or experience to turn the applicant company into a registered provider with the ability to carry on a home with care, competence and skill.
300. The Tribunal made no finding as to whether Mrs Pritchard is or is not a fit person to manage a care home. That is a matter which may fall to be decided on another occasion. However, on this occasion, Mrs Pritchard failed to impress the Tribunal. Her health is obviously indifferent. She resents the fact that she will have to undergo further training in order to meet the National Minimum Standard for qualification as a manager (NVQ 4) and she has prevaricated. Her explanation as to why she had not started training was unconvincing. Her covert recording of Mrs Price was shameful. If she had genuinely wished to make a record for her own benefit she should have asked for permission to do so. Mrs Pritchard's grasp of the regulatory requirements is poor. She insisted that supervision notes are private and confidential and should not be subjected to inspection. She does not see the need for proper supervision and appraisal of her staff and has not undertaken the necessary work. On 7 April 2006 she told Mr Cole that she preferred to supervise nurses and care staff during the course of their care duties. She was apparently unaware of the relevant National Minimum Standard.
301. Mrs Pritchard asserted, in response to the suggestion that she was not present at The Beeches at times when her name appeared on the staff roster, that the staffing requirement permitted her to work elsewhere and only required her to attend at The Beeches for 10 hours per week. This was a fundamental misapprehension. The notice issued by Gwent Health Authority in 2002 required the Applicant to ensure that a registered nurse would be on duty at all times at The Beeches and that the "nurse manager or person in charge" would be on duty in the home for 10 hours per week in addition to the registered nursing staff on duty. This plainly did not mean that the manager could be present for only 10 hours per week. The manager must obviously be a full-time employee and must be free of other duties as a registered nurse for at least 10 of the hours he or she works each week.
302. The Tribunal was not satisfied by the evidence that there were repeated breaches of the staffing requirements at The Beeches during 2004-5 as alleged. The documents did show that there was a deficiency in the care staff on one occasion (10 August 2005) but, generally, the Applicant was able to rebut the serious charge of breach of the staffing requirements by reference to the "clock cards". However, the Tribunal was satisfied that the numbers of staff upon whom the acting manager could call were insufficient, so that nursing and care staff were often obliged to work unreasonably long hours to enable the Applicant to comply with the staffing requirements. This gave rise to complaints from service users' relatives and a serious reduction in staff morale and frequently prejudiced the health, safety and well-being of service users. The argument advanced on behalf of the Applicant (in response to the notice of proposal to cancel) to the effect that, if members of staff choose to work long hours, there is no breach of the regulations if the individual "remains competent" was absurd. There is an obvious risk that those who work long hours will become tired and less effective and there was clear evidence (from observers and from the staff themselves) that this was happening at The Beeches during the summer of 2005.
303. Throughout 2005 the Applicant company was in breach of its obligations under regulation 18 relating to the training and supervision of staff. At Holly House there was no training matrix and records in staff files of completion dates or certificates were scant. There was no evidence to show that staff had received at least five days training in the last 12 months. Some staff supervision did take place but not all staff received supervision regularly.  Evidence in the form of the documentation of the sessions was present only in some staff files.  No appraisal documents were available to be seen by the CSIW.
304. The Applicant company did not do enough to remedy similar breaches of regulation 18 at The Beeches. Although there was some evidence of staff training there was little commitment to the training programmes arranged by Mrs Walker and the local authorities.  The supervision of staff undertaken by Mrs Pritchard between her appointment as acting manager in September 2005 and the hearing was scarcely more than desultory. She apparently started a programme of supervision but she was unable to provide the CSIW with documentation to support this.  In her oral evidence Mrs Pritchard said she had the notes of five supervisions in her bag, which needed writing up.  There was no evidence of staff appraisals taking place at The Beeches at all. Mr Cole accepted that there was no satisfactory evidence of staff training and that there clearly should have been.
305. The physical environment at The Beeches remains poor despite some fairly extensive refurbishment undertaken since the decision to cancel the registration. Inspectors have repeatedly drawn attention to the urgent need for both internal and external repairs. Much of the disrepair has persisted for many years. Some of the problems are, as family members of service users asserted, "cosmetic" but others are more serious. Some of the defects were, and remain, positively dangerous. Included in these are those affecting the windows, the floorboards, the heating pipes and the radiators. The cost of repair work is much higher at The Beeches because of its status as a listed building. Complaints about this are clearly futile. The Applicant company's directors and officers have neither the resources nor the inclination to make the investments which would be necessary to bring the building up to an acceptable standard for use as a care home.
306. When Mr John Powell issued the notice of proposal in relation to The Beeches he did rely upon the proposition that the establishment had ceased to be financially viable or was likely to cease to be financially viable within the next six months. However, the Tribunal was not prepared to deal with the matter in this alternative manner, having regard to the evidence that was placed before it. In any event, sales or imminent sales of other properties owned by the company may well render it much more financially viable, even though almost of the proceeds of those sales will be taken by the company's bankers as mortgagees.
307. The Tribunal accepted and adopted the observation made by Mr Cole that "a good and well managed home needs a competent manager, available resources and sufficient occupancy". There must also be a strategic vision for the home backed by a strong and financially viable company able and willing to invest in the right leadership to direct and deploy staff and resources effectively. In the case of both Holly House and The Beeches, not only was leadership lacking and inconsistent but the managers concerned were not supported by the Chief Executive or the Director. Recruitment was done haphazardly and induction was poor for key foreign staff. There were many unhelpful assumptions and expectations. This contributed to poor communication which led, in turn, to a situation of organisational paralysis. The Tribunal could not accept that, in the future, the position could readily be changed. The key people who would have to supply the strategic vision do not have the capacity to do that.
308. The Tribunal considered the startling proposition (advanced on instructions by Mr Reed at the end of his submissions) that there should be a condition that Dr Das be excluded from all management of the homes rather than a cancellation of the registrations. The Tribunal concluded that this was wholly unrealistic. Dr Das is effectively the proprietor of the business. To deprive him of the ability to make any decisions would be fundamentally inconsistent with that position.
309. The Tribunal rejected the submission that there could properly be a condition that Mrs Pritchard be the registered manager of The Beeches. Quite apart from the Tribunal's view of Mrs Pritchard, it could never be appropriate for there to be a condition attached to a registration requiring a named individual to continue to hold a specified post.
310. The Tribunal rejected the submission that it was constrained to allow the appeals because otherwise the human rights of the service users would be breached. Articles 2 and 3 of the Convention were plainly not engaged in the proceedings. In so far as the service users' Article 8 rights were engaged, the interference with the exercise of those rights was in accordance with the law and necessary in a democratic society for the protection of health.
311. In summary, the Tribunal concluded that the Applicant, as the registered person in relation to both Holly House and The Beeches, breached the 2002 regulations seriously and extensively. The Tribunal also decided that the persistent breaches proved were more than sufficient to merit the closure of the homes. Further, the Tribunal approached the matters giving careful consideration to the effect of closures upon the staff, the local public health agencies and social care agencies, the service users currently at The Beeches and the potential future users of Holly House and The Beeches. Having heard and read extensive and forcibly expressed evidence from relatives of residents of The Beeches, the Tribunal was acutely aware of the difficulties that will be encountered and the disappointments that will be experienced if the home closes. Nevertheless, the Tribunal was satisfied by the evidence that the changes required to make Holly House and The Beeches satisfactory care homes are beyond the management capabilities of the Applicant company and that the problems that will be created by the closure of the home are not insuperable.
312. The Tribunal therefore decided to dismiss the second and third appeals.
313. The decisions of the Tribunal were unanimous.

Orders

314. The decision of the justice of the peace made on 25 August 2005 to order the cancellation of the Applicant company's registration in respect of Holly House shall forthwith cease to have effect.
315. The appeal against the Respondent's decision made on 24 October 2005 to cancel the Applicant's registration in respect of Holly House shall be dismissed and that decision shall be confirmed.
316. The appeal against the Respondent's decision made on 20 October 2005 to cancel the Applicant's registration in respect of The Beeches shall be dismissed and that decision shall be confirmed.

John Reddish

(Chairman)

Geraldine Matthison

Jim Lim

5 September 2006