ILR while pending appeal for EEA PR

[PR062017]

Hello Everyone,

Here is our background: We applied for EEA PR (joint applications EEA & non EEA) last November and received the refusal letters yesterday with rights to appeal. They refused the applications based on the wrong passport.
My husband (EEA) lost his passport in 2013 and applied for an emergency (temporary) passport as he had to travel, he then found the old passport and we applied for the PR with that passport. The home office refused the application mentioning that their system flagged the passport as lost/stolen and refused our applications.
We are planning to log the appeals this week and make fresh applications next week with the replaced passport (via our solicitor).
My question is can I apply for ILR (10 years long residence achieved in May with 4 years as a student and 6 years EEA route) instead of the new PR? If so, will the timeframe be shorter than appealing and making fresh applications? My husband can apply for the EEA PR thereafter? Our solicitor advised that it would not be possible since I have been refused the EEA PR.
Any help on this would be really appreciated.

Thank you.