The Public Guardian v Matrix Deputies Ltd & Anor (Rev 1) [2017] EWCOP 14

IMPORTANT NOTICE These proceedings were conducted in public subject to an order made on 13th April 2017 in the terms of the Practice Direction - Transparency Pilot. 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 anonymity must be preserved in accordance with the transparency pilot order. 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.IN THE COURT OF PROTECTION Case No.: VariousIN THE MATTER OF THE MENTAL CAPACITY ACT 2005Date IN THE MATTER OF SCHEDULES 1,2,3,4,5 AND 6 Date: 19 th July 2017[2017] EWCOP 14Before: Her Honour Judge HilderTHE PUBLIC GUARDIANApplicant
Between
MATRIX DEPUTIES LIMITEDLONDON BOROUGH OF ENFIELD Respondents_______________________________________________Hearing HEARING DATES: 3 rd, 4 th and 5 th July 2017_______________________________________________APPROVED JUDGMENTMiss C. van Overdijk, Counsel for ApplicantMr. Nwokeji, Solicitor for First RespondentMr. M. Paget, Counsel for Second RespondentThe proceedings were heard in public subject to an order made on 13 th April 2017 in the terms of the Practice Direction – Transparency Pilot.This judgment is being handed down and delivered to the parties by e-mail on 19 th July 2017. It consists of 9 pages and has been signed and dated by the judge. The numbers in square brackets and bold typeface refer to pages in the core hearing bundle.INTRODUCTION
[1]These proceedings concern some 44 individuals whose property and affairs either are already managed by a court-appointed deputy or are the subject of an application for such appointment. A further 8 individuals were previously also the subject of these proceedings but they have died during the course of the litigation, such that the court retains only a residual jurisdiction in respect of costs.[2]The common link between all these individuals is the involvement in their property and affairs of Matrix Deputies Limited or persons who worked for that organisation, in particular DW and OM.[3]The Public Guardian made a number of applications which together sought the discharge of all appointments of Matrix Deputies Limited, DW and OM as property and affairs deputy; the refusal of any pending applications; and the appointment of either the Local Authority or a panel deputy instead.[4]Those applications have ultimately been resolved without a contested hearing. The appointments of OM were discharged, and he was discharged as party to the proceedings, with his consent, by an order made on 17th February 2016. DW’s involvement came to an end the same way by an order made on 18th May 2016. Matrix Deputies Ltd. however continued to contest the applications until a matter of days before the final hearing, when it reached an agreement with the Public Guardian effectively conceding the substantive applications on a basis of no admissions. Issues as to costs remained as between Matrix Deputies Ltd and the London Borough of Enfield.[5]On the first day of the hearing of its own motion the Court identified a public interest in an account of these proceedings being available, and invited submissions as to how the First Respondent should be identified. Matrix Deputies Ltd. did not seek to argue against the position of both other parties that it should be named in any judgment, without anonymization.

BACKGROUND

[6]Matrix Deputies Ltd is, on its own account, “a business with its core operations being supporting those people who are not able to manage their financial affairs by themselves.” [B12442] It was incorporated on 8th December 2010 with a share capital of £3 divided equally between three directors. It, and they, are not subject to any professional regulatory body in respect of the day to day services they provide, other than the supervisory role of the Public Guardian.[7]There is a complicated backstory of arrangements between Matrix Deputies Ltd and the London Borough of Enfield of which this court is only partially aware. In essence, it appears that, through some sort of procurement process, the London Borough of Enfield entered into an arrangement with Matrix Deputies Ltd for referral of clients to whom they owed statutory duties. Relations subsequently soured and the Local Authority brought those arrangements to an end. It was confirmed to the court by the Local Authority that there are no other proceedings underway in any other court in respect of those arrangements but suggested by Matrix Deputies Ltd that there may yet be proceedings issued.[8]These proceedings: the Public Guardian made three main applications, seeking the discharge of all deputyship appointments held respectively by Matrix Deputies Ltd. (schedule 1 Each of the deputyship orders in schedule 1 was made by an Authorised Court Officer. In all but one the appointment was of “the authorised officer for property and affairs deputyships of Matrix Deputies.” In respect of FCU 12502246 the appointment was of “Matrix Deputies.” The Court is mindful of the terms of section 19 of the Mental Capacity Act 2005. No issue has been raised on this by any party at any stage in these proceedings. ), DW (schedule 2) and OM (schedule 3). By order of Senior Judge Lush made on 10th December 2015 those proceedings were consolidated.[9]The individuals listed in schedule 4 were all the subject of as yet undecided applications made by various officers of Matrix Deputies Ltd. for appointment of a property and affairs deputy There is a notable lack of clarity in the applications about quite whose appointment is sought. . In respect of those individuals listed in schedule 5, a deputyship order had been made but not issued because of failure to take out the required security. At a hearing on 17th February 2016 the Public Guardian made oral applications in respect of those persons listed in schedules 4 and 5, which have been treated thereafter as consolidated with the existing proceedings.[10]The individuals listed in schedule 6 are the subject of applications by London Borough of Enfield for the appointment of its authorised officer as property and affairs deputy, to which Matrix Deputies Ltd. has objected. By orders made on 13th April 2017, I provided for each of those contested applications to be linked to the existing litigation, to be further considered at this hearing.[11]The grounds of the applications: The Public Guardian’s concerns were set out in a COP24 witness statement dated 5th November 2015. They were summarised in a position statement prepared for the hearing on 17th February 2016 [P3] in the following terms:
“..Matrix has failed in its duty of care to the individuals named in Schedule 1. Further, the general conduct of Matrix and pattern of behaviour gives rise to serious concern in relation to its management practices. This is compounded by the concerns…in relation to Matrix’s involvement (without any ostensible authority) in Schedule 2 and 3 cases after [DW] and [OM] ceased working there.”
[12]The order made on 17th February 2016 required the London Borough of Enfield as interim deputy to “investigate the past dealings of [Matrix Deputies Ltd and DW] in the property and affairs of their allocated persons named in schedule 2 and 4…and to set out their findings in a written report to be filed and served by 4pm on 31st March 2016.” [A45] Mr. Paget confirmed that it was always the intention at that hearing, and made clear to Matrix Deputies Ltd, that those investigations would be conducted by an independent expert (as opposed to ‘in house’ by the Local Authority.) Matrix Deputies made, but withdrew, an application to appeal this order. Mr Nwokeji confirmed that the intention to instruct an outside investigator was indeed known to Matrix Deputies Ltd. As part of the investigative process, paragraph 13 of the order specifically required Matrix Deputies Ltd, DW and OM forthwith to deliver up all electronic and hard copy files in their possession relating to the persons named in schedules 2,3,4 and 5.[A54][13]The investigation was conducted by PwC, a large and well-known firm. Mr Paget subsequently explained that PwC is the provider under a framework agreement for internal audits across a number of London boroughs, including Enfield. In so far as Matrix Deputies Ltd has sought to suggest that PwC was not an appropriate or sufficiently independent body to conduct the investigation, I am not persuaded.[14]The first report of investigations is dated May 2016 [C136]. It is detailed and identifies many specific concerns, including incomplete disclosure of documentation by Matrix Deputies Ltd. Accordingly on 18th May 2016 Senior Judge Lush granted an application by London Borough of Enfield for “an entry order,” with the proviso that it would not be enforced if Matrix handed over further specified data by 22nd July 2016. [A85][15]Further documentation was subsequently disclosed and a second report filed, dated 8th July 2016 [C222].[16]On the first day of the hearing before me Counsel for the Public Guardian helpfully produced a “particularised schedule of allegations.” That document is attached to this judgment as Annexa. A. The allegations fall broadly into the following categories: a. Excessive fee charging: fees were charged to individuals in excess of what the deputyship appointment permitted and/or irrespective of work actually done by the deputy;b. Inappropriate/inadequate arrangements for holding/recording client funds and transactions: all clients’ funds were held in a single account, with unexplained discrepancies between closing and opening balances, inconsistencies with reports submitted to the Public Guardian and no clear record of individual balances;c. Conflicts of interest arising from inappropriate relationships with other bodies: individuals held positions in both Matrix and another company, or were family members of key personnel in those other companies, whose services were engaged to provide services to individuals at considerable cost and without appropriate evidence of competitive tendering and best interests decision making;d. Failure to provide information requested/comply with orders for disclosure: the response to the February 2016 order for disclosure was insufficient for the completion of investigations such that a further application to court, and a second report, were required.[17]Most of the allegations are not admitted. Matrix Deputies Limited has however accepted some accounting discrepancies (numbers 13 – 18 on the schedule) without giving any adequate explanation; and it has fully admitted one allegation, namely the receipt of payments from an estate agency in respect of property sales (number 26 on the schedule).[18]The admitted allegation is that for the sale of 3 properties belonging to different protected persons, Matrix Deputies Ltd instructed a particular estate agency who charged each of the protected persons 1.5% of the sale price, and paid to Matrix Deputies Ltd 0.5%. [C149, page 14 of the May 2016 report]. A letter from the estate agency [C190] and an invoice on paper headed “Matrix Deputies” [C199] clearly set out the agreement between the estate agency and Matrix Deputies Ltd.[19]This arrangement in respect of sales of properties amounts to a clear system of financial benefit to Matrix Deputies Ltd at the expense of persons to whom they owed fiduciary duties. As is spelt out at paragraph 8.58 of the Code of Practice:
“A fiduciary duty means deputies must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. For example, deputies should not buy property that they are selling for the person they have been appointed to represent. They should also not accept a third party commission in any transactions. Deputies must not allow anything else to influence their duties. They cannot use their position for any personal benefit, whether or not it is at the person’s expense.”
[20]Matrix Deputies Ltd “accepts that it shouldn’t have taken a commission.” It acknowledges the breach of fiduciary duty and it “wholeheartedly apologises” [C309]. In the light of the evidence filed, admission was the only sensible approach for Matrix Deputies Ltd to have taken in respect of this allegation. Apology notwithstanding, the Court considers that the admitted breach of duty is a very serious matter.[21]Determination: Apart from the limited admissions identified, because Matrix Deputies Ltd. ultimately (after 20 months of litigation) conceded the applications, there have been no findings of fact made. The non-admitted allegations remain just that. However, in considering whether or not it is in the best interests of each of the individuals named in the schedules to make orders which determine the applications and give effect to the agreement reached between Matrix Deputies Ltd and the Public Guardian, the Court is entitled to have regard to the nature of the allegations which formed the basis of the applications, the fact that Matrix Deputies Ltd chose not to contest the allegations, and the limited admissions. In all the circumstances, I am satisfied that Matrix Deputies Ltd is not a suitable organisation for either continued or new appointment of its authorised officers as property and affairs deputy for any of the individuals identified in the schedules, and it is in the best interests of each of the individuals in the schedules for such appointment to be discharged or refused.[22]A single order shall be made in the consolidated proceedings which provides for the discharge of Matrix appointments in respect of persons listed in schedule 1, the withdrawal of Matrix objections in respect of persons listed in schedules 2 and 6, and the withdrawal of Matrix applications in respect of persons listed in schedules 4 and 5. A copy of that order will be kept on the court file of each individual named in the schedules.[23]Going forwards, individual orders shall be made in respect of each person named in the schedules making provision for the appointment of a permanent deputy (in most cases, the authorised officer of London Borough of Enfield; in some cases a panel deputy or a family member.) Where there was a security bond in respect of the discharged deputy, directions will be given for the new deputy to file a report as to any losses to the estate as a result of the actions of the discharged deputy; and the new deputy’s position as to calling in the security bond. In respect of those persons who died before the conclusion of these applications, the Public Guardian has agreed to contact the personal representatives of the estate of the deceased in respect of any application to call in the security bond.

COSTS OF THESE PROCEEDINGS

[24]The Public Guardian and Matrix Deputies Ltd. have agreed that each of them will bear their own costs, and no costs will be claimed from the estates of any person listed in any of the schedules. This is a departure from the standard rule (Rule 156). Having regard to Rule 159 I am satisfied that the circumstances of this case justify such departure.[25]The position as to costs as between Matrix Deputies Ltd. and London Borough of Enfield is not agreed. The Local Authority seeks an order that Matrix Deputies should pay its costs, including costs incurred in the investigative process, and on an indemnity basis. Matrix Deputies Ltd contends that London Borough of Enfield should bear its own costs.[26]The Local Authority arguments: London Borough of Enfield’s costs are said to amount to approximately £250 000. The bulk of that sum is made up of the costs of the PwC reports. The Local Authority points out that the investigations had to be done; that although Matrix had agreed to the Public Guardian conducting the investigation, the OPG supported and the court ordered that the investigations should be conducted by Enfield as in fact happened. Two reports (and an application to court after the first one) were required because of Matrix Deputy Ltd’s failure to supply full documentation (as directed) in a timely fashion.[27]Mr Paget referred me to a small bundle of authorities, including the decision of Cobb J in JS v. KB & MP [2014] EWCOP 483 and particularly at paragraph 13:
“… ii. In R (Boxall) v Waltham Forest LBC (2001) 4 CCL Rep 258 QBD (Admin), Scott Baker J confirmed that the court has power to make a costs order when the substantive proceedings have been resolved without a trial, but when the parties have not agreed about costs; specifically in relation to compromised cases…he observed that: “at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.” “at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.”
[28]Mr Paget contends that the outcome of these proceedings is not akin to compromise and it is clear who has been the successful party. He contends that it was not reasonable for Matrix to resist the applications as far as it did; that it was not reasonable to contest the proceedings once it had the OPG’s concerns augmented by the two investigation reports; that its conduct thereafter has elongated the proceedings and made them more costly.[29]Mr Paget relies also on the conduct of Matrix before the issue of proceedings. He points out that Matrix was not an “amateur family deputy” but “an organisation acting beyond its abilities;” that the concerns were “not just one or two isolated breaches” but “a panoply of breaches of different categories.” In particular, he argues that “it is very difficult to understand how Matrix could ever think it appropriate to enter into ‘kickback’ arrangements on sale of property”, and it amounts to “a glaring example of Matrix putting its own interests before anyone else’s” for which costs consequences should follow.[30]The Public Guardian’s position: Initially the Public Guardian took a neutral position on this argument as to costs. After further reflection, he supported the London Borough of Enfield’s position. Miss van Overdijk made helpful submissions about how, if the court acceded to the Local Authority’s application, costs should be apportioned across the individuals listed in each schedule should that be necessary for enforcement purposes through the deputyship bonds.[31]Matrix Deputies Ltd.’s response: Matrix contended that it should not bear responsibility for any of the Local Authority’s costs. Mr. Nwokeji sought to characterise these proceedings as an aspect of the fallout between Matrix and London Borough of Enfield, pursued by the latter as part of its determination to secure “return of client files.” He asserted that London Borough of Enfield “acted with vigour” in this litigation, and confirmed that he meant that as a criticism of the manner in which the Local Authority incurred costs. He confirmed that Matrix had understood in February 2016 that the investigation was to be conducted by an independent expert but “not the largest accountant in the world” and not at the level of costs actually incurred which were, he argued, “excessive to establish a case against Matrix.”[32]Mr. Nwokeji asserted that Matrix “was never obstructive with compliance” – it has simply taken a long time to comply with disclosure directions “because of the wealth of data requested” and because “original timescales were not realistic.” He maintained that Matrix “always communicated to explain the difficulties.”[33]As to the scope of the allegations, Mr. Nwokeji drew “a distinction between financial abuse and fraud” and asserted that the two reports had identified only “failures in administration.” He asserted that full responses had been provided by Matrix by January 2017 and the particulars of allegations were wrong at numbers 2, 3, and 5-10 insofar as the recorded response was “none to date.” (He was however unable to point me to the responses in the course of his submissions. He was offered the opportunity to provide references after completion of his submissions but has not taken it up.)[34]Mr. Nwokeji sought to rely on some correspondence from London Borough of Enfield marked as “without prejudice save as to costs.” After some discussion, neither of the other parties objected and I read two letters, both dated 16th June 2017. In the first, London Borough of Enfield’s position as to costs was the same as argued at the hearing. In the second the Local Authority stated that it was “willing to waive those costs if Matrix additionally relinquishes all corporate appointees made under the May 2015 contract.” Mr. Nwokeji relied on this second letter to demonstrate that Enfield “has not succeeded in its application in accordance with that offer” and was motivated in these proceedings by the contractual dispute he described.[35]When invited to respond to Mr. Paget’s reference to the Boxall case, Mr. Nwokeji asserted that, if fully litigated, the great number of allegations made would have been defended (and I understood him to mean successfully defended); and that the late decision not to contest was “made on a commercial basis to avoid costs.”[36]I am wholly unimpressed by the arguments made on behalf of Matrix Deputies Ltd. They fail to take any account of the fact that these proceedings Except in respect of the persons listed in schedule 6. Those individual applications were made by London Borough of Enfield but collectively linked to the ongoing Matrix litigation by order of the court. were brought by the Public Guardian, not by London Borough of Enfield. They overlook the fact that full disclosure was only obtained after an application for an enforcement-type order. They fail to grasp the importance of “failures of administration” by a court-appointed deputy who bears significant legal obligations to get such administration right precisely because they are doing it on behalf of a person who is unable to do it for themselves and therefore vulnerable.[37]I do not consider the second “without prejudice save as to costs” letter as indicating a vindictive approach by Enfield. Rather, it was a lifeline in respect of costs which Matrix chose not to take. That it took such position indicates to the court the clear intention of Matrix to continue offering the services of appointee (a scheme operated by the Department of Work and Pensions, not the court), even as it has not contested serious allegations in respect of the conduct of its court-made appointments.[38]Whilst appointeeship is beyond the jurisdiction of this court, the allegations with which the court has been concerned in respect of deputyship have clear relevance to management of funds under appointeeship too. Consequently, and for the avoidance of any doubt, Mr. Nwokeji was given an opportunity to address the court as to whether direction should be given for specific provision to the DWP of a copy of the order and judgment in these proceedings. He made no argument against such provision but confirmed that “Matrix fully understands that the order and judgment will go to the DWP.”[39]Having regard to Rule 159 of the Court of Protection Rules, I am satisfied that the circumstances of this case justify a departure from Rule 156. The conduct of Matrix Deputies both before and after the issue of proceedings has fallen well below that which is expected of a court-appointed deputy. Matrix has admitted breach of fiduciary duties and has failed to comply with court orders. The Applicant has wholly succeeded in the applications against Matrix, and that success has been substantially founded on the investigative reports which the court ordered London Borough of Enfield to obtain. In the circumstances, it is entirely appropriate that Matrix Deputies Ltd should bear the costs of London Borough of Enfield, to be assessed by the Senior Courts Costs Office.[40]Standard or indemnity basis: The effect of an indemnity costs order, as spelt out in Siegel v. Pummell [2015] EWHC 195 (QB) at paragraph 8 “… is to disapply the requirement that, in addition to costs being reasonably incurred, they should also be proportionate to the sums and issues at stake in the litigation and that, in the event of the assessment judge having a doubt as to whether or not an item of cost has been incurred reasonably, the benefit of such doubt should go to the receiving rather than the paying party.”[41]The purpose of indemnity costs is not to punish the paying party but to provide the receiving party with a more generous measure of recoverable costs. As Mr. Paget pointed out, they should only be awarded where the case is “outside the norm. Excelsior Commercial & Industrial Holdings Ltd v. Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879 ”[42]I am satisfied that this case is wholly “outside the norm” of proceedings before the Court of Protection. It is “outside the norm” in the number of protected persons involved in the litigation, in the scope of the allegations, in the investigative steps required, and in the nature of the admitted breach of duty by a paid deputy. It is appropriate that, in the assessment of costs, account may be taken of these extra-ordinary features of the litigation.[43]Consequently, I am satisfied that London Borough of Enfield should recover its costs against Matrix Deputies Ltd on an indemnity basis.

NEXT STEPS

[44]At the conclusion of the hearing Counsel for the Public Guardian agreed to submit draft orders for approval by 4pm on Thursday 13th July 2017.[45]Further information from family members is required in the case of JDE 11264938, which will be referred to me for consideration on the papers on 20th July 2017.[46]An up to date capacity assessment is required in the cases of ATO 12323449 and FCU 12502246. Appropriate directions will be included in their individual orders; and the matters referred to me for further consideration on the papers on 5th September 2017.[47]The new deputies shall be directed to file reports addressing quantification of loss (if any) to each individual estate attributable to the actions of the discharged deputies, and their position as to the calling in of the security bond. The Public Guardian and the discharged deputies shall file any written response they wish to make; and the bond applications shall be listed for consideration at a further hearing in October. Her Honour Judge Hilder 17th July 2017 Annex A Case No. Various IN THE COURT OF PROTECTION IN THE MATTER OF THE MENTAL CAPACITY ACT 2005 The Public Guardian v Matrix Deputies Limited v London Borough of Enfield _________________________________________________________________________________________________________________________ PARTICULARISED SCHEDULE OF ALLEGATIONS[48]The relevant documents have now been disclosed and the Public Guardian has particularised the allegations in light of the disclosure, and submits that the following table contains the key findings for the court: DATE ALLEGATION RAISED BY OPG IN WITNESS STATEMENTS/ PROFESSIONAL RELIED UPON RESPONSE TO DATE[1]08/10/14• Fixed fees charged to clients regardless of the amount of work done on the case or the level of assets held by the client.• Source: Assurance visit to Matrix Deputies Exhibit SM03• Accepted – response from DW recorded in assurance visit report. Exhibit SM03[2]18/04/15 and 05/02/15• Annual report fees exceed the amounts set out in the court orders• Source: Review of client annual reports. Exhibits SM18, SM19• None to date[3]08/10/14• All client’s funds are held in one account• Source: Assurance visit to Matrix deputies completed on 8 October 2014. Exhibit SM03• None to date[4]21/11/14• Conflict of interest with regards to JW’s positions at Matrix Deputies and London Borough of Enfield (LBE). JW was a consultant for LBE and a majority shareholder for Matrix Deputies. Many of Matrix Deputies clients have been referred from LBE.• Source: Copy of letter of OM’s resignation letter addressed to JW dated 21 November 2014. Exhibit SM02• Denied – letter from Matrix Deputies dated 23 February 2015. Exhibit SM04b[5]2012 to 2015• Enlisting the services of connected companies causing a conflict of interest.• Source: Review of client reports showing use of company H for performing refurbishments to clients’ properties. ExhibitsSM11, SM14 and SM16• None to date[6]23/02/15• Relationship between G Accountants and Matrix Deputies• Source: Letter dated 23 February 2015 from DW declaring that he is a director and shareholder of G Accountants and that they acted for Matrix Deputies when it was originally formed. Exhibit SM04a• None to date[7]06/07/15• Directors of company H (OM and Miss M) are former directors of Matrix Deputies and a current employee of Matrix Deputies (Mr P) is OM’s son.• Source: Companies House records Exhibit SM07c• None to date[8]2012 to 2015• High amounts paid to company H for property refurbishments of clients’ properties.• Source: An amount of £215,471.95 paid to company H in three sample case reviews. Exhibits SM11, SM14 and SM16• None to date[9]21/11/2014• Payments made directly to JW without evidence of contracts or invoices• Source: Copy of letter of OM’s resignation letter addressed to JW Exhibit SM02• None to date[10]21/11/2014• An amount of £15,286.11 withdrawn from Matrix Deputies’ accounts with no explanation• Source: Copy of letter of OM’s resignation letter addressed to JW Exhibit SM02• None to date[11]29/09/2014• Accountant reports filed with Court of Protection bearing the signature of G’s Accountants but without their knowledge, approval or consent.• Source: Letter from G’s Accountants. Exhibit SM20b• None to date[12]04/02/15• £7,087.50 professional fees charged to Mr W• Source: Annual report forperiod 5 February 2014 to 4 February 2015 Exhibit SM19• None to date[13]28/06/16• Discrepancy in the case of FCU (Schedule 1) of £1,239.71 between the closing balance on 30 April 2016 and the opening balance on 1 May 2016• Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016• Accepted – letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause.[14]28/06/16• Discrepancy in the case of JWA (Schedule 1) between the closing balance on 30 April 2016 and the opening balance on 1 May 2016• Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016• Accepted – letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause.[15]28/06/16• Discrepancy in the case of AWI of £898.13 between the closing balance on 29 February 2016 and the opening balance on 1 March 2016. Further discrepancy of £4,186.01 between the closing balance on 30 April 2016 and the opening balance on 1 May 2016.• Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016• Accepted – letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause.[16]28/06/16• Variance in the case of JDE (Schedule 1) of £7,392.31 between versions one and two of the annual reports for the starting balance on 1 February 2016.• Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016• Accepted – letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause.[17]28/06/16• Variance in the case of GLY (Schedule 1) of £15,152.08 between versions one and two of the annual reports for the starting balance on 1 February 2016.• Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016• Accepted – letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause.[18]28/06/16• Variance in the case of RJO (Schedule 1) of £3,674.50 between versions one and two of the annual reports for the starting balance on 1 February 2016.• Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016• Accepted – letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause. LBE REPORT OF FINDINGS MAY 2016 (page reference below are this this report)[19]-9 Matrix Deputies Ltd’s Cooperation with LBE’s review:• Delays in providing information• No data provided• Incomplete financial information• Inability to respond to queries raised• See Matrix Deputies Limited response to LBE May 2016 report[20]Property works – conflict of interest: links between director of Matrix Deputies Ltd (OM) and company H (supposedly run by his son) This overlaps with items 4 and 5 above.• See Matrix Deputies Limited response to LBE May 2016 report[21]Property works- value for money• Rationale for works unclear• Value for money of works unclear• Differences between invoices and COP report• No evidence of alternate quotations in accordance with Matrix Deputies Ltd’s own policies• SBE’s boiler- replaced twice and HC used• No evidence on post works in section• See Matrix Deputies Limited response to LBE May 2016 report[22]Property works- no record of best interests decisions on file• See Matrix Deputies Limited response to LBE May 2016 report[23]Property works- quality of the works:• No record of MDL ensuring works completed to required standard, no post works inspection report• Complaint from tenant and managing agent in relation to JWE’s property• See Matrix Deputies Limited response to LBE May 2016 report[24]Property sales- best interests decisions:• No best interests decision on file for sale of properties for BEB, SCR, DSC and TWO• No evidence of best interests decision to accept low offer• See Matrix Deputies Limited response to LBE May 2016 report[25]Property sales- valuations:• No evidence of 3 independent valuations to sell properties• Guidelines require deputies to keep a record of offers for properties• DSL- offer 10% below asking price, no rationale for accepting• BEB- offer £5,000 below the asking price of £120,000• JJA- electronic bests interests decision on file 4 December 2015 by DW• See Matrix Deputies Limited response to LBE May 2016 report[26]Property sales- transactions with company C:• Payment of 0.5% commission on sale• Conveyancing fees £495 (£350 plus £75 plus VAT disbursement, fee on aborted sale)• See Matrix Deputies Limited response to LBE May 2016 report[27]Property sales- Proceeds of sales:• TWO- trust fund sale, no final account and trust flow• DSL- destination of sale proceeds, historic loan dispute on sale of properties• BEB- destination of sale proceeds unclear, 3 payments none of which add up and delay in payments• SCR- no bank statements• See Matrix Deputies Limited response to LBE May 2016 report[28]Property Management Company: use of company B – previous fraud investigation• See Matrix Deputies Limited response to LBE May 2016 report[29]Property Management Company- Rates and value for money:• Retention of company R- formal contractual arrangement not evidenced• No evidence of multiple quotations• Raven’s quotations are high• Lock change and gardening- was company R used?• Property visits to collect post/insurance• See Matrix Deputies Limited response to LBE May 2016 report[30]Property Management Company- missing supporting information:• Lack of supporting documents for payments to company R• IBO- 2 x payments to company R, no supporting documentation• IHA- 2 x payments to company R, 1 invoice does not match amount• JWE- £1,206.25 transferred, no invoice• MSE- invoice for inventory, no inventory on file• See Matrix Deputies Limited response to LBE May 2016 report[31]Property Management Company- quality of Inventories:• Inventories prepared by company R inconsistent in description and no values• See Matrix Deputies Limited response to LBE May 2016 report[32]Deputyship fees- summary of invoices:• 419 invoices provided, from bank statements only 44 seem paid• Table 4- 5 x invoices where payments did not match amount• Table 5- 22 x payments made prior to invoices raised• Table 6- 5 x clients, insufficient links between activity and costs, mismatch between OPG reports and invoices• KAB- invoices raised but not clear if paid, fees due but not charged• SBE- professional fees on OPG report does not match billing• ECO- professional fees on OPG report does not match billing• No evidence on MDL applying for SCCO assessment• DJA- 11 x invoices, before COP order amounting to £11,500, maximum fee is £1,050• See Matrix Deputies Limited response to LBE May 2016 report[33]P Accountants: Used for client tax returns- DW is a director- conflict of interests• See Matrix Deputies Limited response to LBE May 2016 report[34]DW deputyship: discrepancies over DW’s resignation and subsequent involvement• See Matrix Deputies Limited response to LBE May 2016 report On behalf of the Public Guardian

Cited in 1 later judgment