Court of Protection Case Round Up – March 2014
Court of Protection Appeals
The case of TA v AA and Knowsley Metropolitan Borough Council [2013] EWCA Civ 1661 provides useful clarification of the way in which appeals should be approached and a warning about the consequences if the procedure is not followed.
The particular case concerned a decision on deprivation of liberty but the appeal principles are relevant to all Court of Protection cases.
It is fair to say that the Court of Protection rules governing appeals, rules 172, 181 and 182, are fairly intricate.
In this case, AA had apparently been abusing alcohol from an early age and a neurologist believed that he had sustained brain damage as a result of this. He had been sectioned under Section 2 of the Mental Health Act and, following assessments, it was suggested that he would be at risk living on his own. He also appeared to have developed Korsakoff’s syndrome. His father was his Relevant Personal Representative for deprivation of liberty purposes and the Official Solicitor acted as Litigation Friend for AA.
A residential placement had been tried but this broke down. AA moved into private rented accommodation but was reportedly wandering the streets, often under the influence of alcohol, and placing himself at risk of harm. There had been at least one serious assault. AA was sectioned again under Section 2 and then 3 of the Mental Health Act. He was placed in a care home funded by Knowsley Metropolitan Borough Council. Knowsley made a standard authorisation. The assessors concluded that AA was deprived of his liberty at the home but that the arrangements were proportionate and in his best interests. His father challenged the arrangements.
The Official Solicitor became involved and informed the parties and the Court that the father’s application “served no utility and ought to be withdrawn”. The standard authorisation to keep AA at the home lapsed and was not renewed because the home did not feel AA was being deprived of his liberty. However, following discussions with AA’s father the home did apply for a further standard authorisation. The father made an application to the Court of Protection challenging this standard authorisation as he had with the last. That application came before Mr Justice Peter Jackson as a Judge of the Court of Protection. He directed that this application should be listed before HHJ Gore QC, who had heard the application about the previous standard authorisation. The Official Solicitor again became involved, was made the applicant and withdrew the application.
The father applied for permission to appeal against the decision of Judge Gore to substitute the Official Solicitor as applicant in place of him, making the father a respondent and granting permission to the Official Solicitor to withdraw the application. His Honour Judge Jackson refused permission to appeal. The father then attempted to appeal to the Court of Appeal to challenge HHJ Jackson’s decision to refuse an appeal against the decision of HHJ Gore QC.
After detailed consideration of the rules which are all very helpfully set out in the Judgment, the Court of Appeal said “I conclude that this Court has no jurisdiction to entertain this application for permission to appeal against the decision of Peter Jackson J, dismissing the Appellant’s application for permission to appeal the decision of HHJ Gore QC. I conclude that this Court has no jurisdiction to entertain an application by the Appellants for permission to appeal directly against the decision of HHJ Gore QC”.
Financial Abuse by Attorney (again)
Background
Anecdotally, we are aware that there are a number of cases involving financial abuse by attorneys and deputies coming before the Court of Protection. The latest case, the Public Guardian and JM, raises many of the issues we have seen before, but with a couple of additional points about remuneration and redemption that I hope practitioners will find helpful.
The incapacitated person in this case, DP, was a childless widow, herself an only child, who had worked at the BBC World Service for 39 years. She became a member of the Russian Orthodox Church after she married her, now deceased, husband. This is relevant to the contents of her Will. DP’s closest relatives were two elderly female cousins and a number of first cousins once removed living in Hampshire and Dorset. DP herself lived in London and then moved to Orpington.
JM first came to know DP as her gardener. On 30th August 2011, DP executed her last Will appointing JM and her accountant to be her executors, giving 10% of the net proceeds of sale of her house in Orpington to Brookwood Cemetery, another 10% to the Russian Orthodox Church and giving the remaining 80% of the net proceeds of sale along with the residuary estate to JM.
In October 2011, DP executed a Property & Affairs LPA appointing JM as sole attorney with no replacements. There were no restrictions or conditions, there was no guidance. DP did not agree to pay him for his services as attorney and there was no notified person.
In April 2012, DP entered residential care.
The application
Following concerns raised both by the local NHS Foundation Trust and by Aviva (the Court noted that it is quite unusual to have concerns raised by two different parties), the OPG investigated and applied for an Order that the LPA be revoked and cancelled and that a panel deputy be appointed to act for DP. The OPG’s concerns included JM placing the net proceeds of sale of DP’s house in a high interest account at Barclays Bank in his own name. When JM became aware that the OPG were investigating his actions the account was re-registered in DP’s name. JM had also on several occasions requested that the Aviva bond be transferred into an account in his name by way of a gifting arrangement or that it be transferred into a bank account in DP’s name. As a result of their concerns Aviva froze the bond. The OPG were also concerned that JM had made a gift to himself of £38,000 in November 2012. This was roughly the same amount as the compensation which the Financial Ombudsman had awarded to DP as a result of pursuing a complaint about financial advice which had been received by JM. There was also an unexplained bankers draft for £1,500 on 7th June as well as numerous cash withdrawals from ATMs between March 2012 and March 2013 totalling £8,520.
In addition, JM claimed that he had spent £10,300.70 on improvements to DP’s house to bring it up to standard for sale but he had no receipts to verify this. It transpired that £7,300 of the sum JM claimed actually represented a salary of £20 per day to him for house clearance and rubbish removal. He had apparently spent 365 days doing this. At the same time he seemed to have managed to do the gardening as he had also paid himself £1,040 for twelve months gardening at the rate of £20 per week.
Finally, JM had used DP’s funds to fund the Motability vehicle which his wife was entitled to. He had used DP’s funds to pay the deposit of £599 and was then withdrawing £55 per week from DP’s funds to hire the vehicle, essentially paying him and his wife back for £55 per week of Disability Living Allowance mobility component which they lost as a result of the hire of the vehicle. DP’s funds are also used to pay for petrol for the vehicle at the rate of about £10 every two or three days. Apparently JM thought this was all OK though because the car had been acquired for the benefit of DP so he could take her on trips and to hospital appointments and could use it when he visited her property. (Given that he had apparently spent 365 days clearing rubbish and doing the gardening on top, he presumably visited her property quite often!).
JM’s response to the OPG’s concerns did not particularly add anything and JM made the point that the police felt there was no evidence to pursue an investigation against him in October 2012 and wondered therefore why he was still being investigated in April 2013.
The hearing
At the hearing the OPG conceded that JM had co-operated with the OPG’s investigation and that unlike many cases where the OPG became involved, there were no arrears of care home fees and DP was regularly receiving a personal allowance. Readers of previous columns will recall that unpaid care home fees and lack of personal allowance are often the clues which trigger investigations into the way an attorney or deputy is conducting the affairs of the incapacitated person.
JM accepted that he should have kept proper accounts but “suggested that this was water under the bridge”. He said that everything was settled and stable and apart from making further withdrawals from DP’s accounts to finance the Motability car, he should not need to undertake any other financial transactions. JM also suggested that if the LPA was revoked and DP was no longer financing the Motability car, he would not be able to go and see DP and take her to visit her husband’s grave or take her on outings to the seaside. JM also thought that he had saved DP a significant amount of money by finding a home where the fees were £550 a week rather than the £900 a week placement suggested by the social worker.
A Court of Protection Visitor had been to see DP to comment on capacity and it was very clear from that report that DP did not have mental capacity to make a decision about revoking or suspending the Lasting Power of Attorney. Indeed, there had been concerns raised by the NHS Trust that DP had not had the capacity to enter into the Power of Attorney in the first place.
The Court’s decision
The Court was clear that the gift of £38,000 made by JM to himself out of DP’s funds was not covered by Section 12 of the Mental Capacity Act which sets out the limited circumstances in which an attorney can make gifts. JM should have applied for authorisation.
Although the Court felt that the claim for being paid £20 per day for 365 days of house clearance and rubbish removal and the payments for gardening smacked of “inherent artificiality” the Court did not think that it actually had to consider that point anyway because there was no provision in the LPA for JM to be paid. Therefore, JM had no authority to charge for his services under the LPA and if he wanted to receive a salary he should have applied to Court.
JM had failed to keep proper accounts and was in breach of his fiduciary duties as attorney. The Court also had very little time for JM’s suggestion that revoking the LPA would leave him unable to use the Motability vehicle to take DP out. The Motability car was provided to JM’s wife for her use and she received the Motability component to allow it to be paid for. The Court commented “I do not understand why JM’s wife cannot apply her mobility component for the purpose for which it was intended and I am surprised that, having received a substantial gift of £38,000 from DP’s estate as recently as November 2012, JM should have insufficient resources to keep up the payments on the vehicle”.
The Court also made the point that there were significant differences between a police investigation and an investigation conducted by the OPG. The police have to consider whether there is sufficient evidence to present to the CPS to guarantee a realistic prospect of conviction. The Court commented “the decision not to prosecute him simply means that the CPS was not totally confident that it would be able to prove JM’s guilt so as to ensure a conviction. It does not imply that his behaviour was impeccable. By contrast, an investigation by the OPG is concerned primarily with establishing whether an attorney or deputy has contravened his authority under the Mental Capacity Act 2005, or has acted in breach of his fiduciary duties under the common law of agency, or has behaved in such a way that is not in the best interests of the person who lacks capacity. The standard of proof, ‘on the balance of probabilities’, is lower than the criminal standard”.
Interestingly, the Court gave a few statistics about the safeguarding referrals and investigations it is concerned with. In the year 2012/13, the Public Guardian received a total of 2,982 safeguarding referrals. 24% (728) were referred for full investigation and the Public Guardian approved 480 investigation case recommendations. Only 136 of these though resulted in an application to the Court of Protection for the removal of an attorney or deputy.
Unsurprisingly, the Court decided to revoke the LPA and appoint a panel deputy instead.
Ademption
The observant of you will have noticed that, the gifts to the Russian Orthodox church and to the cemetery were phrased as percentages of the value of DP’s house. The house had of course been sold. The Court made no criticism of JM’s decision to sell the house in the light of there being no available money from elsewhere and said that the ademption of the gifts was unavoidable. The Court did comment that “the law regarding ademption caused by an attorney is a minefield”. Over the last 20 years there have been a number of conflicting judgements. Happily though, the Court did not need to consider these authorities in the case of DP because the position could be rectified easily enough by the execution of a Statutory Will. Indeed, the Court thought that this would be one of the first things on the panel deputy’s to do list.
