The Public Guardian v AM [2015] EWCOP 86

IMPORTANT NOTICE

This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the incapacitated person and members of their family must be strictly preserved. All persons, including representatives of the media must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.

Case No 1269873T

[2015] EWCOP 86

COURT OF PROTECTION

Date 9 December 2015

MENTAL CAPACITY ACT 2005

First Avenue House

42-49 High Holborn

London WC1V 6NP

Before

SENIOR JUDGE LUSH

Between

THE PUBLIC GUARDIANApplicant

AMRespondent

Re CMW

Rebecca Stickler, instructed by the Office of the Public Guardian for applicant

The respondent in person and unrepresented for in person

Hearing Hearing date: 26 November 2015

HMTL VERSION OF JUDGMENT

JUDGMENT

Senior Judge Lush:

[1]This is an application by the Public Guardian to revoke a Lasting Power of Attorney (‘LPA’) for property and affairs.

The background

[2]These proceedings relate to Carla, who was born in Hilversum in the Netherlands on 27 August 1922.

[3]Her husband, who was also Dutch, worked for an airline. They moved permanently to England in 1964 and settled in Weybridge, Surrey. Her husband died twenty years later.

[4]She has one son, the respondent, AM, who was born on 21 April 1954, and lives in Westbourne Park, London W9. He is an entrepreneur and the managing director of his own company, which specialises in developing skincare products.

[5]Carla was diagnosed as having vascular dementia early in 2011. She also has metastatic breast cancer and is receiving palliative care in a nursing home in Wembley Park, where she has resided since January 2013.

[6]On 18 December 2008 she executed an LPA for property and affairs and an LPA for personal welfare, in which she appointed her son to be her sole attorney.

[7]An application was made to the Office of the Public Guardian (‘OPG’) to register the LPAs and they were registered on 23 March 2009.

The application

[8]Some six years later, on 28 May 2015, the Public Guardian applied to the court for the following

[9]The Public Guardian’s application was accompanied by a witness statement made on 27 May 2015 by Sarinder Malhi, who is an investigations officer with the OPG. In summary, she said that:(a) Concerns were raised on 15 March 2015 by Surrey County Council Social Services that there had been a deliberate deprivation of assets following sale of Carla’s house in Weybridge in 2013.

(b) The house was sold on 1 October 2013 for £395,000 and the amount required to redeem her mortgage was £206,815.47. The net proceeds of sale of £186,021.53 were credited immediately to Carla’s account and on the following day the respondent withdrew £160,927.42 for his own purposes.

(c) On 18 March 2015 the OPG wrote to the respondent asking him to file a full set of accounts of his dealings since the LPA was registered, but received no response.

(d) The OPG obtained copies of Carla’s bank statements, and these revealed that substantial sums of money had been transferred to the respondent long before the house was sold. For example, between December 2010 and October 2013 he had received £76,900 from one account and between March 2010 and July 2011 he had taken £21,000 from another account. In addition, a sum of £38,790 had been transferred to several companies in which he has an interest.

(e) On 12 March 2015, Maureen Marr, a Court of Protection General Visitor visited Carla, and confirmed that she lacks the capacity to revoke the LPA or call for the respondent to explain his conduct.

Order

[10]On 23 June 2015 I made an order requiring:(a) the OPG to serve the respondent by 3 July;

(b) the respondent to respond by 31 July;

(d) the matter to be referred back to a judge at the first opportunity after 17 August 2015.

[11]On 9 July Michael Stirton of Greenhouse Stirton Solicitors, London EC1, filed an acknowledgment of service confirming that he was willing to act as deputy if the court decided to revoke the LPA for property and affairs.

The objection

[12]On 24 July 2015 the respondent filed an acknowledgment of service, in which he opposed the application. He said: 1. I do not accept that I have acted in any way that is detrimental to my mother’s welfare or counter to her wishes. I have acted upon her oft-repeated instructions to make sure that I was reimbursed all of the moneys that I had lent or disbursed on her behalf during the years since my father’s death just as soon as her property was sold. 2. I do not accept that I have not fully co-operated with the Surrey County Council or the Office of the Public Guardian. I submitted all the papers that were available and that were relevant. I have discharged more than standard obligations with respect to my mother and even paid some of her rest home fees out of my own funds in full knowledge that these would be returned to me. 3. I have not previously seen the letter dated 18 March presented by the applicant or I would have replied as per above. Since I was entitled to the full amount remaining from the sale of the property, I disbursed it as my life’s requirements at that time. 4. I am of the firm belief that, were my mother in condition to do so and speak, that she would promptly confirm her decision and instruction. Other than her oft-repeated verbal wishes in this regard, there was no documentary evidence of this agreement between a mother and her only child. Because of the trust between us we never perceived there to be any need to put this in writing. It never occurred to us that this might one day be a problem. 5. I am my mother’s only child and both executor and sole beneficiary of her estate. She completed her last will and testament when of sound mind, with her local solicitor and in my absence. A copy is attached. Had I elected not to sell the property when I did, I would still be in receipt of all the net funds from it upon her death. 6. I do not contradict the documentary evidence supplied for the payments I made from her account. All those payments that were not made to myself were merely payments which, for the sake of simplicity, I did not pass through my own account. The total of the sums disbursed should be taken as if paid to me personally. In most cases these were payments to cover arrears in rent (advanced by others on my behalf), the return of personal loans I had taken out, and long overdue professional fees that needed to be paid to my accountants and suppliers. This also included disbursements to companies in which I have an interest, one of which I was, and still am, building up in an attempt to secure a more regular and constant income in the future. I felt justified in making these payments with what I legitimately considered to be my money on her bank account. 7. My own financial situation is not now cash positive. In 2008 my consulting business [name of company] went into decline as part of the crash. Competition in the consulting business and fees plummeted and in May of 2009 I was obliged to sell my only personal property. With the proceeds I sustained my own life and paid rent. By necessity I started, and invested in, a new company, [name of new company], which continues to be my primary focus and which is not yet profitable nor able to pay me a salary. I am largely supported by my wife until this new business takes off. I no longer own any properties and have no personal assets. 8. I do not know Mr Michael Stirton, nor of his qualifications, other than he is a solicitor. I do not understand on what basis he in particular is suggested as the potential deputy for my mother. I oppose his appointment in my stead as I do not see how a stranger could comply with my mother’s wishes. 9. I respectfully request that Surrey County Council reconsider and increases the amount that it contributes towards the cost of maintaining my mother in her current nursing home.

[13]The respondent subsequently added a handwritten wrote to which he appended a selection of statements from his personal bank account which suggested that in 2001 he was paying his mother a standing order of £350 a month. He said:

“In order to substantiate my contention that I supported my mother, I requested bank statements. From this it is evident that at the very least I had standing orders in place as far back as 2001. My mother’s requests for increased contributions were voluntarily met. As is evident, I did so throughout years that my own finances were fairly rosy. These standing orders were just for my mother’s ‘spending money’. As stated previously, I financed many of her other expenses, including holiday costs and shopping.”

[14]On 11 August 2015 Sarinder Malhi made a further witness statement, in which she said that the Public Guardian’s position remains unchanged and on 20 October I made an order setting a date and time for an attended hearing.

The hearing

[15]The hearing took place on Thursday 26 November 2015 and was attended by:(a) Rebecca Stickler of No5 Chambers, counsel for the Public Guardian; and

(b) the respondent.

[16]Rebecca Stickler filed a position statement on behalf of the Public Guardian, in which she said that:

“The OPG maintains that the respondent has behaved in a way that contravenes the authority conferred on him by Carla and he has not acted in her best interests. It is submitted that the LPA should be revoked and the registration cancelled because: (a) the respondent does not dispute that a substantial amount of money has been taken from the donor’s accounts and paid directly to himself. No lawful or just explanation has been provided for such payments. (b) the respondent contends that he acted on his mother’s wishes and instructions upon the sale of the property to reimburse himself for alleged expenses/payments that he made on her behalf. However, the respondent has provided no evidence to support such alleged payments, nor has he provided any basis for ‘reimbursement’ (in the event that such payments were ever made). Furthermore, insofar as the respondent claims that his mother was ‘indebted’ to him, he has placed himself in a conflict of interest when acting as her attorney. (c) the situation now remains that Carla has no capital to meet her care home fees and the respondent is still requesting that the local authority increase the amount that it pays towards her care home fees. (d) to the extent that the respondent seeks to explain any of the payments as ‘gifting’ (including the £10,000 towards Carla’s grandson’s wedding), such gifts were clearly outside the scope of his authority and the respondent failed to apply to the Court of Protection for any approval. (e) the respondent has not cooperated with the OPG or the local authority by accounting for his dealings under the registered LPA and the utilisation of Carla’s funds for his own benefit, as he is required to do so. In light of all matters stated above, the court is invited to make final declarations that Carla lacks capacity to revoke the LPA and make decisions about her property and financial affairs. Further, the court is invited to revoke the LPA and direct that its registration be cancelled and to appoint Michael Stirton as Carla’s deputy for property and affairs.”

The law relating to the revocation of an LPA

[17]The role of an attorney under an LPA carries a great deal of power, but it also engages various duties and responsibilities, some of which are described in Chapter 7 of the Mental Capacity Act Code of Practice.

[18]For example, paragraph 7.60 of the Code of Practice, which is headed ‘Fiduciary duty’, says that:

“A fiduciary duty means attorneys must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. They also must not allow other influences to affect the way in which they act as an attorney. Decisions should always benefit the donor, and not the attorney. Attorneys must not profit or get any personal benefit from their position, apart from receiving gifts where the Act allows it, whether or not it is at the donor’s expense.”

[19]Paragraph 7.51 of the Code states that:

“Once the attorney starts to act under an LPA, they must meet certain standards. If they don’t carry out the duties below, they could be removed from the role. In some circumstances they could face charges of fraud or negligence.”

[20]I am not being asked to make findings on whether the respondent has committed fraud by abuse of position, as defined in section 4 of the Fraud Act 2006, or whether there has been a transfer of assets with the intention of avoiding charges for having Carla’s needs met, as described by section 70 of the Care Act 2014. It would be inappropriate for me to comment on these matters, because they are for another court, another day, if the relevant authorities decide to pursue them.

[21]I am required to adjudicate solely on the Public Guardian’s application, which is for an order under section 22(4)(b) of the Mental Capacity Act 2005 (‘MCA’) revoking Carla’s LPA for property and affairs and directing the Public Guardian to cancel its registration.

[22]Section 22 of the MCA explains the circumstances in which the Court of Protection may revoke an LPA. It refers to the donor of an LPA as ‘P’ and the attorney appointed by the donor as ‘the donee’.

[23]Section 22(3)(b) states that:

“Subsection (4) applies if the court is satisfied - (a) …. (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.” (a) …. (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.”

[24]Subsection (4) provides that:

“The court may – (a) … (b) if P lacks capacity to do so, revoke the instrument or the lasting power of attorney.” (a) … (b) if P lacks capacity to do so, revoke the instrument or the lasting power of attorney.”

Decision

[25]The burden of proof was on the Public Guardian, and he has discharged it to the required standard, namely the balance of probabilities. I agree entirely with the submissions made by Rebecca Stickler of counsel on his behalf.

[26]I am satisfied that Carla lacks capacity to revoke the LPA herself. I accept the opinion of the Court of Protection General Visitor, Maureen Marr, who said in her report dated 12 March 2015 that:

“The donor no longer recognises the attorney so it would not be possible to consult her about decisions made on her behalf. She has no awareness of her financial situation. ... She no longer speaks. It is my opinion that Carla does not have capacity to deal with the complaint.”

[27]I am also satisfied that the respondent has behaved in a way that contravenes his authority and is not in the donor’s best interests.

[28]He has broken virtually every rule in the book and, having exhausted his mother’s funds in order to meet his “life’s requirements at that time”, he blithely expects the taxpayers of Surrey to pick up the tab to meet his mother’s care needs now.

[29]I have no hesitation in revoking the LPA and directing the Public Guardian to cancel its registration. I shall make a separate order appointing Michael Stirton as Carla’s deputy for property and affairs.

order

“The applicant seeks an order under section 23(a) of the Mental Capacity Act 2005 directing: 1. The attorney to fully account for all his financial dealings under the Lasting Power of Attorney from 23 March 2009 to the present day within 28 days. 2. If the attorney fails to submit satisfactory accounts with full supporting evidence, an order under section 22(4)(b) for the revocation and cancellation of the registered Lasting Power of Attorney made by Carla and registered on 23 March 2009. 3. Should the court decide to remove the attorney, the court is asked to consider the appointment of Michael Stirton, a member of the panel of deputies, as deputy to manage Carla’s property and financial affairs.