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Ordinary Residence: Can the ‘Shah test’ survive after Re A and the Cornwall Council case?

Jennifer Perrins, barrister of 1 King’s Bench Walk, and Amy Rowe, associate solicitor with Bindmans LLP, consider whether the test of ordinary residence is distinctive from that of habitual residence.

Jennifer Perrins, barrister, 1 King's Bench WalkAmy Rowe, solicitor, Bindmans LLP













Jennifer Perrins, barrister, 1 King's Bench Walk, and Amy Rowe, associate solicitor, Bindmans LLP

The concept of habitual residence has very recently been the subject of three appeals to the Supreme Court:  In the Matter of A [2013] UKSC 60 ('Re A'); In the matter of KL (A Child) [2013] UKSC 75 and In the matter of LC (Children) [2014] UKSC 1.  As a result, it is now clear that the test for habitual residence (at least for the purpose of children proceedings) is the same, whether it arises in the domestic or the international context; and this meaning derives from the relevant decisions of the Court of Justice of the European Union ('the CJEU'): Re A (Area of Freedom, Security and Justice) (C523/07) [2009] 2 FLR 1 and Mercredi v Chaffe Case C-497/10 [2011] 1 FLR 1293.

There was a need for a uniform interpretation of the phrase 'habitual residence', as it appears in our domestic family law statutes as well as in the international family law context.  Habitual residence is a key concept within: our domestic rules on jurisdiction as contained in the Family Law Act 1986; within Council Regulation (EC) No 2201/2003 ('BIIR'); and the now in force 1996 Hague Convention, as well as being a crucial element of the 1980 child abduction Hague Convention

Our domestic family law statutes also contain references to the different (but related) concept of 'ordinary residence'.  In particular, the 'ordinary residence' of a child dictates which local authority should be designated in a care order pursuant to s31(8) of the Children Act 1989 ('the CA 1989'). 

Historically, the authorities on the meaning of 'ordinary residence' in the context of the CA 1989 have followed the authorities on the meaning given to 'habitual residence'.  This is unsurprising, as our domestic law on habitual residence originally derived from the case of Akbarali v Brent London Borough Council; Abdullah v Shropshire County Council; Shabpar v Barnet London Borough Council; Jitendra Shah v Barnet London Borough Council; Barnet London Borough Council v Nilish Shah [1983] 2 AC 309, [1983] 2 WLR 16, [1983] 1 All ER 226, HL ('Shah'), which was a case which dealt with the meaning of 'ordinary residence' in the context of local authority education grants.  (For examples of authorities in which the meaning given to habitual residence was treated as being interchangeable with that given to ordinary residence, see e.g. Gateshead Metropolitan Borough Council v L and Another [1996] 2 FLR 179; Re D (Local Authority Responsibility) [2013] 2 FLR 673 (CA); Sheffield CC v Bradford CC [2013] 1 FLR 1027 [paragraphs 30-36]; and the decision of Cobb J on designation of local authority responsibility for an incoming care case under Article 15 BIIR – Re LM (A Child) [2013] EWHC 646 (Fam) – it was undisputed in this case that 'ordinary residence is broadly synonymous with habitual residence'). 

However, given the developments in the law on habitual residence, the question needs to be asked what test should now apply when the 'ordinary residence' of a child for the purpose of the CA 1989 is in issue.  On the one hand, it is sensible and desirable for the meaning to continue to march hand in hand with that for habitual residence.  This would mean abandoning the domestic line of authority stemming from Shah.  On the other hand, the phrase 'ordinary residence' in the CA 1989 is (a) a wholly domestic concept, unlike habitual residence, which arises in the international context as well; and (b) exactly the same phrase as that considered in the case of Shah. Habitual residence, although a related and similar phrase, was not specifically under consideration in the case of Shah.  Indeed, in the judgment of the Supreme Court in Re A, it was pointed out that the phrase 'habitual residence' was in part deliberately chosen by the Law Commission as the appropriate phrase to use in the Family Law act 1986 precisely because it is a concept that is known and understood on an international level.  This cannot be said of 'ordinary residence'. 

This article will seek to argue that despite the domestic origins of the phrase 'ordinary residence', it is now the case that the test for 'ordinary residence' (at the very least in the context of the CA 1989) is the same as that for habitual residence, i.e. as described by the Supreme Court (and drawn from the CJEU jurisprudence) in the cases of In the Matter of A, KL, and LC


The 'Shah' test

The 'traditional English' test for habitual residence in the family law context has its origins in the case of Shah.  The classic definition of 'ordinary residence', described by Lord Scarman, was as follows: 

'Unless, therefore, it can be shown that the statutory framework or the legal context in which the words are used requires a different meaning, I unhesitatingly subscribe to the view that "ordinarily resident" refers to a man's abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or long duration…there must be a degree of settled purpose.'

In the case of Re P-J (Abduction: Habitual Residence: Consent) [2009] EWCA Civ 588, [2009] 2 FLR 1051, a number of principles drawn from the English line of authorities on habitual residence were set out, including the following (see paragraph 26 of the judgment for the full list and relevant references):


The decisions of the Supreme Court in Re A, KL, and LC

The 'Shah' strand of authority has now been abandoned as a result of the decisions of the Supreme Court in Re A, KL, and LC. (The Supreme Court also held in the case of LC that an older child's state of mind may be relevant to the assessment of his or her habitual residence).  The key principles arrived at in Re A include the following (see paragraph 54 of the judgment of Baroness Hale):

The decision in Re A was quickly followed by those in KL and LC.  The Supreme Court took the opportunity to reiterate what had been said in Re A.  It is apparent that the 'Shah test', and the supposedly well-established principles in the English line of authorities that followed it, no longer provide the template when deciding the habitual residence of a child.  What then of the concept of a child's 'ordinary residence'? 


Ordinary residence under s31 of the Children Act 1989

Section 31(8) of the Children Act 1989 ('the Act') states as follows:

'(8) The local authority designated in a care order must be –

(a) the authority within whose area the child is ordinarily resident; or

(b) where the child does not reside in the area of a local authority, the authority within whose area any circumstances arose in consequence of which the order is being made.'

Section 105(6) of the Act states as follows:

'(6) In determining the "ordinary residence" of a child for any purpose of this Act, there shall be disregarded any period in which he lives in any place –

[...]

(c) while he is being provided with accommodation by or on behalf of a local authority.'

Due to the significant financial consequences of the making of a care order, the law reports are littered with the unedifying spectacle of local authorities battling to avoid responsibility for children under s31(8).  Such battles also take place in the context of duties arising towards incapacitated adults under the National Assistance Act 1948 ('the NAA 1948') – this was the context of the Cornwall case, of which see below. 

As mentioned above, historically, our authorities on 'ordinary residence' for the purpose of the CA 1989 have followed the line of authorities on habitual residence, stemming as they all did from Shah; and the relevant principles have to a large part been interchangeable.  For example, a long-established 'principle' in the authorities on child abduction has been that a very young child must take its habitual residence from its mother / primary carer.  Similarly, it has been asserted in the context of s31(8) of the Children Act that it is settled law that a baby must take its ordinary residence from its mother – see e.g. Re D (Local Authority Responsibility) (above), (paragraph 4).  However, a number of previously assumed 'principles' have now been questioned by the Supreme Court in Re A and Re KL.  The Supreme Court has been keen to stress that the guidance to be found in the earlier case law is just that – guidance – and does not create inviolable legal rules.  In KL it was said that [paragraph 21] 'there is no legal rule, akin to that in the law of domicile, that a child automatically takes the habitual residence of his parents. The proposition of Lord Brandon of Oakbrook in In re J (A Minor) (Abduction: Custody Rights) [1990] 2 AC 562, that a young child in the sole lawful custody of his mother will necessarily have the same habitual residence as she does, is to be regarded as a helpful generalisation of fact, which will usually but not invariably be true, rather than a proposition of law'. 

Thus, if it is now correct that for the purpose of determining ordinary residence the Shah line of authority must be abandoned, and the Supreme Court 'trilogy' of habitual residence cases followed instead, we must be equally cautious not to apply previously well-known 'rules' or principles to the concept of 'ordinary residence'.  It was just such an issue that arose in the case of R (on the Application of Cornwall Council) v Secretary of State for Health & Others [2014] EWCA Civ 12, [2014] All ER (D) 170 (Feb), which we will now consider. 


Ex Parte Vale and the Cornwall litigation

R v Waltham Forest ex parte Vale (The Times 11 February 1985) was a case heard a matter of months after the decision of the House of Lords in Shah.  It concerned the 'ordinary residence' of a mentally incapacitated adult ('Judith'), in the context of a local authority's statutory duties and responsibilities towards her.

Counsel for Judith contended that a person such as Judith must have the same ordinary residence as her parents, because she was so mentally incapacitated that she could not make her own decisions, and therefore could not 'voluntarily adopt an abode' with a 'settled purpose', as per Shah.  Alternatively, he said that she would have to be treated as having mental capacity, and then her ordinary residence would be decided in the usual way using the Shah test. 

Taylor J held that someone as mentally incapacitated as Judith was not capable of voluntarily deciding where to live, or of developing a 'settled purpose'.  The approach from Shah was inapt for such a situation.  Taylor J said that 'Where the propositus ... is so mentally handicapped as to be totally dependent upon a parent or guardian, the concept of her having an independent ordinary residence of her own which she has adopted voluntarily and for which she has a settled purpose does not arise. She is in the same position as a small child. Her ordinary residence is that of her parents because that is her "base", to use the word adopted by Lord Denning in the infant case cited'.

The 'Vale test', as it came to be known, was relied on in later decisions (see R v Redbridge LBC ex parte East Sussex County Council [1993] COD 256; R (Greenwich LBC) v Secretary of State [2006] EWHC 2576 (Admin); and Court of Appeal in R (Hertfordshire County Council) v Hammersmith and Fulham LBC [2011] EWCA Civ 77).  It was influential in the formulation of the relevant government departmental guidance for the purpose of determinations of ordinary residence by the Secretary of State in the context of duties towards incapacitated adults under the NAA 1948.  (Pursuant to s32(3) of the NAA 1948, the Secretary of State will determine where an adult is 'ordinarily resident' where local authorities cannot agree.)  The guidance tries to summarise the principles from the relevant case law, including the Shah test.  In relation to mentally incapacitated people, the guidance says that one of the alternative approaches described in Vale should be chosen.  These approaches are referred to as 'the first test' and 'the second test'.  'The first test' is the approach that was actually used in Vale, i.e. where the subject is so mentally incapacitated that he has no capacity to decide where to live, in which case his ordinary residence will derive from his parents if he is dependent upon them.  'The second test' is based on the other approach posited in that case, i.e. where the subject is treated as being of normal capacity and ordinary residence is determined in the usual way using the Shah test, although without requiring the subject to have 'adopted the residence voluntarily'.

The guidance also refers to the effects of the CA 1989.  The guidance acknowledges that it is possible that the local authority that had responsibility for a young adult immediately prior to his 18th birthday will remain responsible, but this will not always be the case.  For the purpose of the CA 1989, if a local authority places a child outside its area, any period spent there is disregarded for the purpose of deciding ordinary residence under that Act, due to the s105(6) restriction.  However, this does not necessarily prevent a young person from acquiring an ordinary residence elsewhere for the purpose of the NAA 1948 – the presumption may be rebutted, depending on the facts, and on the application of the Shah and Vale tests. 

The departmental guidance, and the application of the 'Vale tests', were directly in issue in the case of R (on the Application of Cornwall Council) v Secretary of State for Health & Others [2014] EWCA Civ 12, [2014] All ER (D) 170 (Feb) ('Cornwall').  The case began life as a judicial review application on behalf of Cornwall, after a decision by the Secretary of State that Cornwall Council was responsible for the care of a significantly incapacitated adult ('PH') under the NAA 1948, who immediately prior to his 18th birthday had been accommodated pursuant to the CA 1989.

At first instance, the case came before Beatson J (the decision can be found at The Queen on the application of Cornwall Council v Secretary of State for Health [2012] EWHC 3739 (Admin)).  The crucial point was where PH had been ordinarily resident immediately prior to his 18th birthday.  As a child, PH had been provided with accommodation by Wiltshire County Council, pursuant to s20 of the CA 1989.  He had been placed with foster carers in Gloucestershire.  However, by the time of his 18th birthday, his parents had been living in Cornwall for some time.  They had visited PH at his accommodation a few times each year, and he had had a small number of visits to them in Cornwall. 

The Secretary of State had determined that PH had been ordinarily resident in Wiltshire at the time the s20 CA 1989 accommodation arose, and the period of placement with foster carers in Gloucestershire would be disregarded for the purpose of the CA 1989 due to s105(6), therefore the starting presumption was that Wiltshire remained responsible upon PH's 18th birthday.  However, on the facts of the case, the Secretary of State went on to rebut that presumption, because of the lack of ties to the area.  The 'first test' in Vale was applied because of the severe disabilities suffered by PH, and on that basis, the Secretary of State had decided that Cornwall was the responsible authority on the relevant date, due to PH's dependence upon his parents. 

Counsel for Cornwall argued (inter alia) that the Secretary of State had failed to apply the correct legal test for ordinary residence, and that he had applied the 'Vale test' in a 'Wednesbury unreasonable' way.  Beatson J upheld the decision of the Secretary of State.  However, Cornwall Council then successfully appealed, and the decision of the Court of Appeal has wide implications for the meaning of the phrase 'ordinary residence'. 

In the Court of Appeal, counsel for Cornwall renewed the argument that the Secretary of State had erred in law in applying the ordinary residence tests in the way that he had, and that the decision was perverse on the facts.  In particular, counsel for Cornwall argued that it was wrong simply to ignore the question of actual physical presence; the 'first test' in Vale should not be applied as if the fact of physical presence is immaterial.  So, in Cornwall, it could not be right to say that PH's ordinary residence must be that of his parents simply because of his lack of capacity, as this would be akin to a legal rule and would not reflect the facts. 

Counsel for Cornwall relied to some extent on the Supreme Court's decision in Re A, due to the abandonment of the Shah test for children in the context of deciding habitual residence, and the preference of the approach drawn from the CJEU authorities (i.e. the factual analysis that reflects 'some degree of integration into the social and family environment').  It was said in Cornwall that the Supreme Court had 'treated physical presence as an essential element'1.  (Some reliance was also placed on the decision in Mohammed v Hammersmith & Fulham LBC [2002] 1 AC 547, concerning 'normal residence' for housing purposes, as this also emphasised the importance of physical presence). 

The Court of Appeal held that the Secretary of State 'did apply the Vale test without proper consideration of P's actual place of residence and as if it were a rule of law'.  There was criticism of the way in which the 'first test' in Vale had been elevated almost to a rule of law (a very similar complaint to that which has concerned the Supreme Court in its recent 'trilogy' of cases on habitual residence).  The Court of Appeal also pointed out that it might be 'misleading to describe Shah as laying down a test as such at all', as ordinary residence is essentially a question of fact.  It was said that although Shah 'identified the paradigm case where an adult will typically be found ordinarily resident', it 'should be abandoned as the appropriate test to apply when considering the ordinary residence of young children, because they cannot sensibly be said voluntarily to choose where they live nor to have a subjective settled purpose with respect to it. Precisely the same difficulties arise with respect to those who are severely mentally disabled as Vale itself recognised. Shah provides no real assistance in those cases either.'

The Court of Appeal observed that in Vale 'it may be that the judge meant the test to be read as 'almost inevitably' providing the right answer where a child is in fact living with its parents'; but this will not always be the case, and it should not be applied as some sort of legal rule regardless of other factual circumstances. 

At paragraphs 77-84, the Court of Appeal said that the 'first test' in Vale should no longer be followed, and the words 'ordinary residence' should be given their ordinary and natural meaning.  Thus, it is unlikely that a subject would be found to be 'ordinarily resident' somewhere that he has never really lived.  It was acknowledged that Re A was decided in a different statutory context, but the Court of Appeal was of the view that it cannot 'simply be ignored on that ground'.  Furthermore, the Court of Appeal ventured to suggest – although no argument had been heard directly on this point – that the test for habitual residence in the children context should also be used when deciding the ordinary residence of an incapacitated adult, i.e. the factual analysis of where there is 'some degree of integration into a social and family environment'.  It was said that the fact that the court was dealing with ordinary rather than habitual residence 'should not lead to a materially different approach'.  (It was also suggested that in an appropriate case – PH's was not one – the wishes of the subject adult might be relevant, as per the Supreme Court's decision about an adolescent's state of mind in Re LC).  Although there was no argument directly on the point, the Court of Appeal's decision in Cornwall must at the very least be persuasive obiter dicta, as far as mentally incapacitated adults are concerned. 

For determining the ordinary residence of children, the writers submit that it is now apparent that the line of authority based upon Shah has been abandoned, and the child-centred approach set out by the Supreme Court in Re A, KL and LC should be applied.  In many cases, it may well be that this 'child-centred approach' means that the child has the same ordinary residence as its parents; but for some children that will not be so.  If the recent authorities relevant to this topic have taught us anything, it is that it is important always to bear in mind that these are at their core factual concepts, where there is no room for the artificiality of 'one size fits all' legal 'rules' and 'tests'.

Permission to appeal to the Supreme Court has been granted in the Cornwall case, and these issues may need to be re-examined once the result of that hearing is known; but it seems unlikely that the 'Shah test' will be revived in the context of children proceedings.  

_____________________

Footnote:
[1] The Supreme Court did not actually come to a conclusive decision on this point, as it was held that its determination would require a reference to the CJEU; although the majority view was that physical presence is probably a prerequisite to the establishment of habitual residence. 

12/8/14