Court of Protection Round Up – April 2014

‘JS and KB, MP (Property and Affairs Deputy for DB)’ is a contrast from our usual fare of late.  There have been (too) many cases where attorneys and deputies have been found not to have used money in an appropriate way.  In this case, there was no attorney or deputy at the material time, but that didn’t seem to stop problems occurring : there are also some lessons about the conduct of solicitors from the actions of the firm involved, presumably not a member of SFE!

DB is a widow who had developed dementia.  Her daughter and son-in-law cared for her.  The proceedings in the Court of Protection concerned the way in which DB’s finances, especially relating to her house, had been managed and the costs consequences.

DB’s daughter (JS) cared for her with her husband (MS) and DB’s son (KB).  A Panel Deputy had been appointed by the time of the hearing.  The hearing was to deal specifically with liability for the significant (£70,000) costs incurred to date.

There was conflicting evidence about how much the son had been informed by his sister.  His sister initially said he was fully aware of what she was doing but later back tracked.  The Judge found that the son was himself ‘not entirely blameless’ as he had not made enquiries when it seemed that he should have.  The Judge made it clear that there was no question over the standard of care the daughter and son-in-law were providing and recognised the ‘lifestyle sacrifices’ they had made.  The way in which the daughter had dealt with her mother’s finances left the Judge less than impressed however.

The daughter managed to sell her mother’s two storey property and purchase a bungalow in the name of the daughter and son in law, with the same solicitors (PK) acting in both transactions, without the solicitors apparently having confirmed the instructions with her mother.  The new property was put in the names of the daughter and son-in-law with a rather vague and oral only suggestion of a ‘debt’ owed by the pair to the mother payable when their Spanish property was sold.   The Judge said:

‘It is regrettable (to say the least) that the manner in which JS usurped her mother’s authority and decision-making was not checked by independent legal advisers; indeed the problem was compounded by PK’s extraordinary conduct in acting for buyer and seller, and failing to offer independent advice to DB at the time of her sale/purchase particularly when they must have known that DB’s money was being used to fund a purchase of a property for which she was apparently to have no beneficial interest, and that her capacity was (at least) in question.’

There was also mention of a Will prepared by, apparently, the same solicitors where capacity issues were not picked up.

The daughter initially applied to be appointed as her mother’s deputy but appears not to have read the COP4 very carefully.  The judge commented:

‘In support of her application, she purported to give the standard undertaking (on form COP4) to the effect that :

“I will ensure that my personal interests do not conflict with my duties as a deputy and I will not use my position for any personal benefit”

She also gave a standard undertaking to “keep money and property” of DB “separate from my own” notwithstanding that, at the material time, she and DB had a joint bank account, containing the much-diminished balance of proceeds of Ash Grove, about £10,400.’

The application was doomed to failure and a Panel Deputy was appointed instead.

JS’s conduct in relation to the application was not the most open and helpful at times.  The specifics can be found in the judgement.

In the event, the Judge decided to depart from the general rule (Rule 156) that the costs of proceedings should be paid by DB.  He said:

• ‘Unusually, but not unimportantly, both counsel invite me to depart from the general rule (that the “costs of the proceedings  … shall be paid by P or charged to his estate”: rule 156) though in different ways.
• I agree with them that it would be unconscionable for DB to bear the costs of these lengthy proceedings, having regard to my findings above.
• I am conscious that this is not a case in which any of the parties are well-placed financially to shoulder their own responsibility for costs, let alone the costs of others; I bear in mind that both KB and JS are retired people, with access only to limited funds, in each case invested in property.
• I also bear in mind, in endeavouring to do justice between these parties on this issue, that it is JS who currently provides good quality daily care for her mother.  She has made life-style sacrifices to do so.
• In my judgment, JS’s application for deputyship status was doomed to failure given her obvious conflict of interest; DJ Ralton’s summary dismissal of the same on the papers should have made this clear.  Even if JS could be excused for launching the litigation, it is not easy to absolve her from pursuing it after August 2012, and maintaining her declared objective to be her mother’s deputy right up to the 6 September 2013.  While I do not purport to adjudicate upon her associated claim for an entitlement to a share of the beneficial interest in Beech Avenue, it was not prudent for her to pursue such claims when it must have been clear to her, particularly when she had legal advice, that the manner in which she had placed her mother’s funds in her name was (at best) highly questionable, or (at worst, and in the words of MP) “financially abusive”.
• As indicated above, KB is not entirely blameless, and must bear a part of his own costs.
• Having regard to all of the matters discussed above, fairness and justice requires in this case that JS should pay two-thirds of KB’s costs.
• I have already declared as unconscionable the prospect of DB bearing the costs of this litigation.  But it is likely that had JS not pursued her own claim for deputyship, KB would have made application to the Court of Protection; had that occurred, a professional deputy may have been swiftly appointed.  There would have been modest costs to DB in this process.  In the circumstances, I conclude that JS should pay four-fifths of the litigation costs of MP on behalf of DB: the balance to be paid by DB.’

So, as a result of this, the daughter had to pay a large proportion of the costs bill and the son had to bear a part of his own costs. The judge gave authority to the Panel Deputy to explore an equity release scheme to allow the costs to be paid.

However, the Panel Deputy was also given leave to investigate and if appropriate bring a claim against the solicitors for financial loss to DB.

A timely reminder for us all to take care when faced with issues of capacity and “gifts”.