Court of Protection Case Round Up – July 2014
GM – The Sequel
Regular readers of this column will remember the case of GM from April 2013. That case involved two property and affairs deputies who had made a rather spectacular range of gifts, quite a few of which were in favour of themselves and their own family and who had applied to the Court for ratification of these gifts. Readers might remember that these gifts included handbags, perfume and cash and that the deputies had also claimed “expenses” which included a car for each of them (so they could go and see their aunt) and a computer for each of them (so they could look after their aunt’s affairs)!
At the previous hearing, the deputies were removed but because a Statutory Will application needed to be made, the Court deferred the final decision on what action if any ought to be taken against the deputies. It is in the context of the Statutory Will application that we come across the case again.
A particular feature of this case is that GM had died by the time the judgment was published, although mercifully after the signing of the Statutory Will. The Court of Protection therefore took the view that GM could be identified as Gladys Meek and that the names of the deputies should be published. Mrs Janet Miller and Mrs Janet Phyllis Johnson therefore have their names in lights, for all the wrong reasons.
Senior Judge Lush was clearly unimpressed with the deputies’ conduct during the gifting application. He said “
“I do not accept that the gifts were made in GM’s best interests. They are completely out of character with any gifts she had made before the onset of dementia. There was no consultation with her before they were made and there was no attempt to permit and encourage her to participate in the decision-making process, or to ascertain her present wishes and feelings.
Nor do I accept the applicants’ argument that they believed that the order appointing them allowed them to make gifts on such an extensive scale. They should have been aware of the law regarding their role and responsibilities. Ignorance is no excuse.
The fact that GM’s remaining assets were in the names of one or other of the applications, rather than in GM’s name, is a further example of what is, at best ignorance, and, at worst, stealth.
I realise that MJ and JM are the only visitors that GM receives, but this does not give them a licence to loot, and I was unimpressed by the veiled threat that, if the court were to remove them as deputies, they would find it difficult to continue seeing GM.
If they had made a proper application for the prospective of approval of gifts, I would possibly have allowed them to make gifts to themselves and their families to mitigate the incidence of Inheritance Tax on GM’s death, but only if they had been the residuary beneficiaries under her will.”
Following the gifting judgment and the removal of the deputies, £73,352 had been approved out of £277,811.74 but the deputies remained personally liable to Gladys Meek in the sum of £204,459.74.
At the time of the Statutory Will hearing, Gladys Meek’s estate was worth approximately £114,575 and the costs of the proceedings were likely to be in the region of £92,000. Mrs Meek’s expenditure on care fees etc was more than her income by £25,000.
The deputy applied for a Statutory Will leaving Mrs Meek’s estate entirely to charity and, in preference to the deputy bringing recovery proceedings against the deputies direct, he invited the Court to call in the security bond in the sum of £250,000. The deputy suggested that anything above the level of the security bond should be forgiven the deputies but that they should waive any further claims for expenses. The deputy also asked for the Court’s directions on whether he should take any steps to bring the conduct of the deputies to the attention of the police.
By the time of the hearing the deputies acknowledged that they owed £250,000 to Gladys Meek. The difference is accounted for by costs. The Court looked at the relevant authorities on Statutory Wills and the full judgement is well worth reading for that discussion. Here the balance sheet approach was favoured.
The Judge also commented that the best interests principle does apply to a decision by the Court as to whether to call in a security bond. There had been some discussion about this.
There were a number of parties, all of whom seemed to hold different views about the contents of the proposed Statutory Will. The position of the deputies was that they should be entitled to half of the estate between them. The case was not straightforward. To quote the Judge, “
“The Official Solicitor has not found the case to be an easy one. That is certainly so. It seemed to me that each of the advocates had sought to identify a particular factor in the case of “magnetic importance”. The difficulty in this case is that it seemed to be also that each advocate had latched upon a different factor of “magnetic importance”, with the possible exceptions of Mr Rees and Miss Hughes who, I think, were in accord.
For Mr Rees, and I think also Miss Hughes, the factor of magnetic importance was essentially the wishes, feelings, beliefs and values entertained by Gladys Meek at the time she possessed testamentary capacity. For Mr Radford (for Jason Parkin), the factor of magnetic importance in the case was said to be the conduct of Mrs Johnson and Mrs Miller. For Mr Ross (representing Lynne Parkin), the factor of magnetic importance was, I think, identified as the status quo, which was intestacy. For Mrs Preston (representing Mrs Johnson and Mrs Miller), the factor of magnetic importance was said to be that they were the only ones who had shown any interest in Gladys Meek’s welfare or well-being in recent years.”
Unsurprisingly, everybody apart from the deputies was in favour of the security bond being called in. The deputies wanted to have the opportunity to repay half of the £250,000 within three months with the other half only being called in during Mrs Meek’s lifetime if she needed any more money. The deputies suggested that the other £125,000 should be set aside out of the deputies’ entitlements under the Statutory Will. The deputies’ position alas did not seem to have changed from that in the gifting case. They continued to assert they “were genuine in spending money on items”. The Judge’s comments were very telling. Mrs Preston was the advocate for the deputies,
“Notwithstanding the attractive way in which Mrs Preston sought to make bricks out of straw wen she was really lacking in any substantial quantities of straw, I cannot accept Mrs Preston’s submissions. I had the opportunity of observing Mrs Johnson for a little under two hours, and Mrs Miller for about an hour, when they were giving evidence under cross-examination in the witness box. Mrs Johnson I found to be quietly spoken. She displayed no outward appearance of undue avarice. But Mr Rees described her a demonstrating a lack of frankness; and I agree with his assessment. Mrs Johnson was unable to give any satisfactory explanation for certain of the payments or actions on her part, and that of Mrs Miller. I have no doubt whatsoever that Mrs Johnson effectively treated her appointment as one of Gladys Meek’s deputies as though it were a lottery win, which entitled her to treat Mrs Meek’s money as though it were her own.
Judged on her own standards, I suspect that Mrs Johnson did not consider that what she was doing was dishonest. But I have reminded myself of the standard direction on dishonesty in criminal cases, derived from the Court of Appeal’s decision in the case of Ghosh (1982) 75 Criminal Appeal Reports 154. If I apply that test and ask myself:
(i) Was what Mrs Johnson was doing dishonest by the ordinary standards of reasonable and honest people, and perhaps more pertinently,
(ii) Must Mrs Johnson herself have realised that what she was doing would be regarded as dishonest by those standards,
And if I focus upon Mrs Johnson’s own state of mind, then I have no hesitation in holding, on the civil standard of balance of probabilities, and notwithstanding the seriousness of the matter, that both questions should be answered in the affirmative. In other words: Yes.
Mrs Miller was rather more circumspect and contrite when giving evidence. That may be because she had had the opportunity of observing questions put to Mrs Johnson, and reflecting upon Mrs Johnson’s answers. But nevertheless, I found Mrs Miller’s answers also to be unsatisfactory.
I accept the submission that even now both Mrs Johnson and Mrs Miller have demonstrated a lack of understanding of the seriousness, and total unacceptability, of their conduct in the discharge, on Mrs Gladys Meek’s behalf, of her financial affairs. They have demonstrated a complete lack of insight and remorse. When Mrs Miller was asked to consider how Mrs Meek might have viewed herself and Mrs Johnson taking some £204,000 from Mrs Meek’s estate, Mrs Miller’s answer was “I really don’t think that Gladys would have minded”. I have no doubt that Gladys Meek would (as Mr Rees submitted) have been totally horrified. The evidence – which I think was common ground – was that Mrs Meek and her daughter, Barbara, had always lived modestly, and that it was totally out of character for them to spend sums of money in the way that Mrs Johnson and Mrs Miller had done with Mrs Meek’s assets.
There was a continuing lack of frankness, up almost to the door of the court, from Mrs Johnson and Mrs Miller. That was demonstrated by the fact that Senior Judge Lush’s judgement had proceeded on the footing that there had been a charitable gift to Codnor Castle of £5,000. It turned out that that sum was still sitting in a bank account in the name of one of the former deputies; but that fact was not disclosed until the day before the hearing. There was complete confusion on the part of Mrs Miller about whether she had spent £7,000 or £17,000 on a watch. I have no doubt whatsoever that Mrs Meek would have been absolutely horrified at the expenditure of even the lesser of those two sums on a watch, and even more horrified that Mrs Miller could not remember whether she had spent £7,000 or £17,000.
In her witness statement (at paragraph 43) Mrs Johnson, who gave written evidence on behalf of Mrs Miller as well as herself, had said that she and Mrs Miller had searched their records and were unable to recall a £7,000 purchase, a receipt for which she exhibited at page 325 of the application bundle. When cross-examined about that, it was clear that Mrs Johnson was of the opinion that this was a Visa payment for a watch purchased by Mrs Miller from a jeweller in Derby, W E Watts, for £7,000. She accepted that the witness statement was not right in stating that she was unable to recall what the purchase was for. It was quite clear also that Mrs Johnson had not been frank and honest with the Court of Protection about payments for Derby County Football Club season tickets. The most recent of them had been made not too long before the Court of Protection hearing before Senior Judge Lush, and yet it had not been mentioned to the Court of Protection at all. Monies had been invested in premium bonds which had won prizes, but those prizes had not been mentioned or accounted for.
I am afraid that I simply cannot regard the conduct of either Mrs Johnson or Mrs Miller in the way in which it was sought to be presented by Mrs Preston. I cannot accept her submission that her clients had not tried to conceal anything; and that all their failing were due to a misunderstanding of paperwork, and an inability to address matters of fine detail”.
The Judge made an Order that a quarter of the estate should go to the goddaughter of a relative of Mrs Meek’s deceased daughter, Barbara, and that the rest of the estate should pass to charity.
The Judge also ordered that the security bond be called in in the sum of £250,000.
The Judge did however say that it would not be in Mrs Meek’s best interests for the matter to be reported to the police. The reasons for this were firstly that costs would be run up if the police contacted the deputy and that an investigation would raise a serious risk that the deputies would be advised not to have contact with Gladys Meek during and investigation. The Judge was also concerned that there might be approaches to Mrs Meek through Social Services which the Judge did not think would be in her best interests and that it was likely that the deputies would have to fund the defence of criminal proceedings against them and that might operate to Mrs Meek’s detriment as well.
The last part of the judgement is worth reading for the way in which the Court approached the question of whether to publish the names of those involved.
Another strong lesson from the Court of Protection for deputies who act in their own best interests rather than those of the incapacitated person. The lesson from this sequel could also be summed up as “when in a hole, stop digging”.
The case of GW between London Borough of Haringey and CM (Case number 12411274)
This matter involved a disagreement between a family member and a local authority about who should act as deputy for GW.
GW had Alzheimer’s, a history of some violence and sectioning and was resident in a care home. His estate was worth about £750,000, a house valued at £290,000 and the balance in cash.
GW’s niece had been helping him with his finances. The local authority had concerns about a potential conflict of interest and how the niece was managing those finances.
The local authority was appointed as interim deputy. Interestingly, the local authority had said that they were willing to act as deputy as long as the Court would order that GW received a weekly amount of £200 to spend as he wished. The local authority did not feel they could act where closer supervision was required.
The niece had also taken GW to a solicitor at a time when the Special Visitor, reporting after the event, felt that GW probably did not have testamentary capacity. Interestingly, the Special Visitor also felt that GW required supervision with day to day finances.
GW did not want a deputy at all and was very negative about the niece, saying that she took his money. In the event, the Court found that she had. Initially she had said it was all spent on GW but then, when it was shown not, said it was a gift.
The Court had other concerns about the niece, CM:
“I agree that the weight of evidence demonstrates that CM has not always been willing to let GWs interests have priority over her own. A good example is her insistence that his house should not be sold. There is a hint of conflict of interests and undue influence here, as currently she is the sole residuary beneficiary under his Will. Whereas it may be in her best interests to retain the house whilst property prices in London continue to rise, it may be in GW’s best interests to sell the house, particularly in view of the negative associations surrounding his relationship with his neighbours and the detrimental effect it had on his mental health.
As regards CM’s attitude, her outbursts of ill-temper from time to time are well documented. In the report to which I referred in paragraph 13 above, the social worker, Hannah Cole, referred to CM becoming ‘very abusive and rude on the telephone to staff’ when she was asked to bring GW’s bank book to the ward for safekeeping.
In her witness statement of 31 January 2014, Hannah Cole described another of CM’s tantrums;
“On 6th June 2013 I attended a Care Programme Approach Discharge Meeting (CPA Meeting) at Chase Farm Hospital to review the arrangements in place for GW’s discharged to the care home. At this meeting the IMCA mentioned the fact of the financial abuse allegations that GW had made about CM. I believe that this may have been the first time that CM became aware of specific allegations against her (although she had been informed in February 2013 about our concerns). Her reaction was alarming. She started shouting at GW. GW was visibly distressed by this. When she left the room GW followed her out and she continued to berate him in the corridor. Hospital staff had to take GW away because he was so distressed at her behaviour. Even if the allegations are untrue, CM’s violent reaction towards him causes me considerable concerns about how she might react to him in the future if she became his deputy and he or anyone else questions her use of his money.”
Later that day GW signed a Will in which he left his entire estate to CM.”
The Court believed that there was a factor of magnetic importance here.
“In my judgement, the factor of magnetic importance in this case is GW’s statement that he does not want CM to manage his property and affairs. In his interview with the Court of Protection Special Visitor, he said:
“She is like a witch to me. I don’t want her to look after my money. I have no relatives. I have not signed a Will. I asked him whether “that woman” was CM, and he said that it was. “That is her. She comes to see me. She goes into my house while I am not there.”
I asked him again if he had set out a Will. He said that he definitely had not. I pointed out that I had read that he had set out a Will and that he had bequeathed all his assets to his niece after his death. “I do not agree to leave my worldly goods to her. I would sooner give it to somebody else. I would give it to old age pensioners or an orphanage.”
I detected no paranoid delusions at present. “Nobody is bothering me, other than that girl. I’ve ceased to like that girl.” I asked him whether she was taking money from his bank. He was unaware of how much money he used to draw from the bank, although he remembers she took half.
He was consistent in his negative views about his niece, as well as his desire not to allow her to control his money. He is of the opinion that she is taking money from his account for her own needs, but did not seem able to do anything to prevent this from happening if it were true.”
The Court felt that GW could gradually come to terms with an independent deputy.
The local authority were confirmed as deputy. Interestingly, despite expressing surprise that the niece had persisted with her application despite GW’s ‘frequent opposition’, the Court ordered that costs could come out of his estate.
The Queen on the application of ZYN and Walsall Metropolitan Borough Council (Case number CO/4801/2013)
The High Court has confirmed in the case of The Queen on the application of ZYN and Walsall Metropolitan Borough Council (Case number CO/4801/2013) that capital damages for personal injury administered by a deputy are disregarded when calculating what a person has to pay for domiciliary care. Although this has been assumed to be the correct legal position for a number of years, local authorities have been “having a go” and things came to a head in this case.
The local authority tried to argue that the Court of Protection mentioned in the disregard (paragraph 44 of Schedule 10 of the Income Support General Regulations 1987) was not in fact the Court of Protection we have now but the Court of Protection that was in place prior to the implementation of the Mental Capacity Act. Unsurprisingly, the Court confirmed the Council was wrong. The Council also tried to argue that once funds were being administered by the deputy they were not actually being administered by the Court at all and that the disregard should therefore not apply. This was also confirmed not to be the case.
Essentially, as we were then but hopefully this judgement will discourage local authorities from trying to run this particular argument.
Incidentally, just in case you were wondering why the deputy was claiming local authority funding when there was a damages settlement, this was a partial recovery case. ZYN had actually received damages representing only 20% of the value of the claim. Therefore it was entirely appropriate for the deputy to look to the local authority to fill the gap.
