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You are here: BAILII >> Databases >> England and Wales Court of Protection Decisions >> PP, Re [2016] EWCOP 65 (13 September 2016) URL: http://www.bailii.org/ew/cases/EWCOP/2016/65.html Cite as: [2016] EWCOP 65 |
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First Avenue House High Holborn London WC1V 6NP |
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B e f o r e :
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BB (1) CD (2) |
Applicants |
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- and - |
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PP (by the Official Solicitor as litigation friend) (1) The Public Guardian (2) |
Respondents |
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Alexander Drapkin (instructed by the Official Solicitor) for the First Respondent
Thomas Entwhistle for the Public Guardian
Hearing date: 31st August 2016
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Crown Copyright ©
(i) to make no order, thus allowing BB and CD to continue to act under the Lasting Powers of Attorney for property and affairs and health and welfare made by PP on 16th October 2012 ("the LPAs")
(ii) to revoke the appointment of one of BB or CD leaving the other as sole attorney
(iii) to revoke the LPAs and appoint BB and CD or one of them as deputy for property and affairs for PP, thus subjecting them to the supervision of the Public Guardian, requirement for filing annual report and accounts, and provision of a security bond
(iv) to revoke the LPAs and appoint a professional deputy from the Public Guardian's panel of deputies
Evidence presented
The issues in the case
(i) whether the Lasting Power of Attorney for Property and Affairs should be revoked and cancelled pursuant to section 22(3)(b) and Section 22(4) of the Mental Capacity Act 2005
(ii) whether the Lasting Power of Attorney for Health and Welfare should be revoked and cancelled pursuant to section 22(3)(b) and Section 22(4) of the Mental Capacity Act 2005
(iii) what costs orders I should make in relation to the application for ratification of gifts decided by my judgment of 15th May 2015 and in relation to this application
Capacity
PP's financial position
CD's evidence
(i) the certificate provider in the earlier instruments was LR, the partner in the firm then advising PP, and in the later instruments PP's general practitioner
(ii) the earlier instrument did not include a charging clause, the later instrument did
(iii) in the earlier instrument PP did not give her attorneys authority to consent or refuse consent to life sustaining treatment. In the later instrument she gave such consent.
CD did not have anything to say about the Lasting Powers of Attorney signed in July 2012 or why PP might have made the changes.
BB's evidence
The law
Section 22(3)
Subsection (4 ) applies if the court is satisfied
(a) that fraud or undue pressure was used to induce P-
(i) to execute an instrument for the purpose of creating a Lasting Power of Attorney or
(ii) to create a Lasting Power of Attorney
(b) that the donee (or, if more than one, any of them) of a Lasting Power of Attorney
(i) has behaved, or is behaving, in a way that contravenes his authority or is not in P's best interests, or
(ii) proposes to behave in a way that would contravene his authority or would not be in P's best interests
Section 22(4)
The court may
(a) direct that an instrument purporting to create the Lasting Power of Attorney is not to be registered or
(b) if P lacks capacity to do so, revoke the instrument or the Lasting Power of Attorney
Section 22(5)
If there is more than one donee, the court may under subsection (4)(b) revoke the instrument or the Lasting Power of Attorney so far as it relates to any of them.
"'Duty of care' means applying a certain standard of care and skill – depending on whether the attorney is paid for their services or holds relevant professional qualifications…..if attorneys are being paid for their services, they should demonstrate a higher degree of care and skill. Attorneys who undertake their duties in the course of their professional work (such as solicitors…) must display professional competence and follow their profession's rules and standards".
"in cases of this kind it is never particularly easy to apply the best interests checklist set out in section 4 of the Act. Nonetheless any difficulty encountered in applying the checklist does (not) mean that decisions such as …terminating an attorney's appointment are not in the donor's best interests"
"In the absence of appropriate safeguards, the revocation by the court of a Lasting Power of Attorney, which a donor executed when they had capacity and in which they chose a family member to be their attorney, would be a violation of their Article 8 rights. For this reason the Mental Capacity Act 2005 has been drafted in a labyrinthine manner to ensure that any decision by the court to revoke an LPA cannot be taken lightly."
Legal submissions
Submission on behalf of the Public Guardian
(i) The gravity of the breach of his obligations by BB. He gifted a substantial sum, which represented over 20% of PP's estate, to his own wife and therefore stood to benefit personally. He did not take PP's wishes and feelings into account. He did not seek any legal advice although his co attorney was a solicitor. His subsequent actions do not support his assertion that he has rectified his lack of awareness of the provisions of the Mental Capacity Act 2005 and Code of Practice and learned from his mistakes.
(ii) BB used part of the PET to purchase the W House in November 2014 in the knowledge that the gift was the subject of an application to the Court of Protection and that he had been advised the money should be ringfenced and might have to be repaid. He did not tell his co-attorney, nor did he seek advice as to whether he should apply to the court for approval.
(iii) The costs of deputyship under a panel deputy would not be an undue burden on PP's estate. BB's evidence is that PP's finances require little management now.
(iv) BB arranged for the investment of a significant proportion of PP's investment capital in investments which are high risk and low return and whose sole advantage is the reduction of liability to IHT. It is accepted that St James is a reputable firm and that the advice of an IFA was sought. It is the purpose of the investment that is of concern. The benefits will accrue to BB and his family, not to PP. BB is in a position of conflict in reviewing the continuation of these investments. A fresh look is needed as to whether those investments are in PP's best interests.
(v) PP has consistently expressed the view that she does not want BB to continue as her attorney because he would be influenced by JB who might use PP's finances for her own benefit.
Submissions on behalf of BB and CD
(i) If BB's breach of authority was so serious, the Public Guardian would have sought revocation instead of advising him to apply to the court for ratification of the gifts. In my judgment I ratified half of the PET. By going through the process of the court case BB has learned of his obligations. He should not be held to too high a standard of perfection; many attorneys show the same failings. It is not wrong for attorneys to consider IHT planning.
(ii) PP has benefitted very much from having BB, JB and their family living close by. BB offered to repay the sum used to purchase the house by raising a mortgage if the ratification application was unsuccessful. He showed his good faith by repaying the balance immediately and with interest.
(iii) As to the costs of a professional deputyship, management of the Rental Property is not straight forward. BB has done a lot of work on the house and garden and is very involved in day to day decisions. A professional deputy would employ a letting agent and gardener at considerably greater expense on top of his own fees which would impact on PP's net income.
(iv) There has been no allegation that the investments in the Octopus IHT schemes constitute a breach of duty. The attorneys took advice from a reputable IFA at a reputable firm; there is nothing wrong with that even if another attorney would have made a different decision. While there were high start up costs the investments have now increased in value.
(v) As to PP's wishes and feelings, counsel accepted that some weight could be attached to the views PP expressed to the Court Special Visitor in February 2014. Her only objection to BB being attorney is her fear that he would be influenced by JB, who would take her money. Going forward either JB will not be able to influence BB or the court will prevent it. PP chose to appoint a solicitor to act with BB so that this would not arise. Given the deterioration in PP's mental state, I cannot attach any weight to what she said to the social worker in February 2016.
(i) CD was unaware that the PET had been made for some five months. She then changed the procedures and advised ring fencing of the money. She sought advice from LR. It was then perfectly reasonable to await the outcome of the Public Guardian's investigation and their recommendation rather than embarking on a costly application to the Court of Protection. In the event, the Public Guardian required an application for ratification of gifts, not immediate repayment to PP or seizing of the amount of the gifting by CD.
(ii) See (i).
(iii) As to the Octopus investments CD also took advice from the IFA and followed it. Her view was that it was a reasonable step to take.
Submissions on behalf of the Official Solicitor as litigation friend for PP
(i) BB's actions in making the PET are far from perfection and he is not being held to an unattainable standard.
(ii) The use of PP's money to buy the W House while these proceedings were ongoing and he had been advised to ring fence the money was a breach of duty. BB offered to raise a mortgage if the court ordered repayment but we do not know if he would have done so or been able to do so. If not, civil proceedings would have been required to get the money back.
(iii) There is no reason why a lettings agent cannot manage the letting of the Rental Property. There will be additional costs for the professional deputy and letting agent but they have to be set off against CD's costs of acting as attorney, which are approximately £15,000 for the period February 2013 to June 2016.
(iv) Neither the Official Solicitor nor the Public Guardian seeks to argue that it is never in the best interests of an incapacitated person to engage in IHT planning. It depends on the circumstances of each case. In this case it is clear from the letter from St James that the sole motivation for the investment was to save IHT (E55-61). In return PP had to bear a high level of risk, low return and potential difficulties in withdrawing the funds, particularly if the tax regulation regime changes.
(v) PP has consistently expressed the wish that her family should not be involved in the management of her affairs. She appointed BB and a solicitor to be her attorneys, yet the very outcome she said she did not want has occurred, namely that a substantial proportion of her estate was gifted to JB. Even if she lacks capacity, her wishes and feelings may be taken into account. The decision of Munby J as he then was in the case of re M sets out the test for reliance on an incapacitated person's wishes and feelings (see paragraph 95 of my previous judgment).
My decision
The best interests checklist
"I extended the questioning about the Power of Attorney by asking whether she would like BB to continue to have the Power of Attorney. She stated that she would have like him to continue but her daughter JB is out to grab her money. She stated that JB wants to buy a farm and therefore has been asking her to give her money and she stated that JB through BB would get the money and buy property for her own self….."
"Met with PP she was worried about her finances and whether she had enough money to remain at (S Care Home). She mentioned on several occasions that she did not want her family to manage her finances and wants someone else to look after it for her."
""Since PP's admission to the home, BB and JB have always been very supportive of PP's welfare which has resulted in decisions always being made in PP's best interests……PP's mental and physical wellbeing has improved since BB' and JB's family has moved to (the village). PP is more positive, outgoing and a happier lady who now interacts better with others, is actively more interested in the lives of others and is enjoying a better quality of life overall at present within S Care Home".
Revocation of the Lasting Power of Attorney for Property and Financial Affairs
Revocation of the Lasting Power of Attorney for Health and Welfare
Article 8 of the European Convention of Human Rights
"…. regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person's rights and freedom of action."
The purpose for which the decision to revoke the LPA PA is required is to ensure that PP's finances are managed for her own benefit and in her best interests, not for the benefit of others. That objective cannot in my judgment be achieved without revocation of the appointment of both attorneys under the LPA PA.
1. Everyone has the right to respect for his private and family life, his home and correspondence.
2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
Costs of the ratification application as between BB and PP
The law
a. the conduct of the parties
b. whether a party has succeeded on part of his case even if he has not been wholly successful
c. The role of any public body involved in the proceedings
i. conduct before as well as during the proceedings
ii. whether it was reasonable for a party to raise, pursue or contest a particular issue
iii. the manner in which a party has made or responded to any application or a particular issue and
iv. whether a party who has succeeded in his application or response to an application in whole or in part exaggerated any matter contained in his application or response; and
v. any failure by a party to comply with a rule, practice direction or court order
The decision of the Lord Justices in Lunacy can be broadly summarised as follows:
1. Unlike proceedings in other civil courts, costs in the Court of Protection do not necessarily follow the event
2. Where an application is made in good faith, supported by medical evidence (where appropriate), in the best interests of the person to whom the proceedings relate ("P"), and without any personal motive the applicant is generally entitled to their costs from the P's estate, even if they are unsuccessful.
3. The court has an unlimited discretion to make whatever order for costs it considers that the justice of the case requires.
4. In exercising its discretion the court must have regard to all the circumstances of the case, including, though not confined to, the relationship between the parties, their conduct, their respective means and the amount of costs involved.
5. Where parties place themselves in a hostile position to P, or where their conduct results in the costs of the proceedings being more expensive than they might otherwise have been the court may consider it appropriate to penalise them as to costs.
Submissions on costs in relation to the ratification application
My decision
Costs of the revocation application
District Judge Batten