P was born in the Netherlands on 27th August 1922 and is now 93 years. P has one son, AM.
P was diagnosed with vascular dementia early in 2011. P also has breast cancer and is receiving palliative care in a nursing home where she has resided since January 2013.
On 18th December 2008 P executed an LPA in favour of both her property and affairs, and health and welfare to AM. These were registered by the OPG on 23rd March 2009.
The OPG made an application to the court in May 2015 seeking a direction that AM produce all his financial dealings from 23rd March 2009 and if AM fails to produce the evidence, for the LPA to be revoked and appoint a panel deputy in his place. The reasons for the application were as follows:-
- The local authority had raised concerns in March 2015 that there had been a deliberate deprivation of assets following the sale of P’s house;
- The house was sold in October 2013 for £395,000 and £206,815.47 of the sale proceeds was used to redeem the mortgage. The balance of £186,021.53 went into P’s account but £160,927.42 was withdrawn the next day by AM;
- The OPG wrote to AM asking him to file a full set of accounts but had received no response;
- The OPG had obtained P’s bank accounts which showed substantial sums being transferred to AM long before the house was sold;
- A Court of Protection General Visitor visited P and confirmed that she lacked capacity to revoke the LPA or ask AM to explain himself;
- Where AM states that P is indebted to him puts him into conflict of interest when acting as P’s attorney;
- P can no longer meet her care home fees;
- Gifts were outside the scope of his authority and he failed to account to the Court of Protection for such payments.
AM opposed the application stating:-
- He had not acted to P’s detriment or wishes. P had stated on many occasions that AM was to be reimbursed all of the moneys he had lent or disbursed to her over the years;
- AM did not accept that he had not co-operated with the local authority or the OPG; he had disclosed all the papers that were available and relevant. AM stated that he had discharged his obligations over and above the standard, and that he even paid the care home fees out of his own money;
- AM stated that he did not receive the letter requesting a full account from the OPG otherwise he would have responded. He was entitled to the full amount from the proceeds of sale;
- If P were able to she would confirm her instruction and decision. This was a verbal agreement between a mother and her only child and therefore did not need to be, and was not, put in writing;
- AM was executor and sole beneficiary under P’s will and had the house not been sold he would have been entitled to it upon her death;
- Payments made from P’s account should be taken as paid to AM directly, although paid to third parties who he had for example taken a loan from. AM stated he did this in the legitimate belief the money was his;
- AM was struggling financially due to the financial crash in 2008 and his business went into decline, leading to him having to sell his own house;
- AM did not know the deputy proposed and questioned how a stranger can carry out P’s wishes;
- AM requested the local authority to reconsider and increase the amount it contributes for P’s care.
The court considered sections 23(a) and 22 of the Mental Capacity Act 2005 (‘the Act’).
The court referred to Chapter 7 of the Code of Practice. At paragraph 18 the court set out paragraph 7.60:
“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.”
The court referred to section 4 of the Fraud Act 2006 and section 70 of the Care Act 2014 in relation to fraud by abuse of position but as the court was not asked to make findings the judge decided not to comment upon it further, as they were for another day if the relevant authorities decide to pursue them.
The OPG had discharged the standard of proof, on the balance of probabilities and granted the OPG’s application.
In this case AM had ‘broken virtually every rule in the book….’ (paragraph 28). It is yet another sad case of a beneficiary under a will whose parent or family member is vulnerable and the beneficiary takes what they think their share under a will would be before the P has even passed away.
It is utterly imperative that whilst P is alive the money is their own and should be used in their best interest, not in a manner to provoke further funding from local authorities, ultimately paid by the taxpayer.
The court referred to the possible abuse and fraudulent actions of AM’s and it may well be taken up by other authorities - this is a warning to attorneys to take their duties seriously and to act in a proper manner.
Read the full text of the judgment on Bailii