Re ARL [2015] EWCOP 55

This case concerns an application by the Public Guardian to revoke an LPA for property and financial affairs and for an order that a panel deputy be invited to make an application to be appointed as deputy with one of the attorneys, ICL being directed to provide all details of ARL’s financial affairs and in particular proceeds of the sale of her house.

The person who drew up the LPA and acted as certificate provider (Lyn Parkin) sought to be a party to the proceedings on the basis that the LPA should be revoked and that she and JJT (daughter of ARL) and herself be appointed as co-deputies, ICL be accountable for his actions and reimburse his mother’s estate in full. The application to be joined was granted as was the full application made by Lyn Parkin.

Background
ARL is aged 86 who since September 2012 has resided in a nursing home. She had previously resided in her own home. She adopted during her marriage two children, JJT and ICL. On 23 August 2012 ARL executed an LPA for property and affairs in which she appointed her two adopted children jointly and severally to be her attorneys. An estate practitioner, Lyn Parkin drew up the document, witnessed ARL’s signature and was the Part B certificate provider – certifying that the Donor had capacity to create the LPA.

The LPA was registered by the Office of the Public Guardian on 30 October 2012.

The Public Guardian became involved when it became aware of unpaid care home fees of £39,000 which ICL was unwilling to pay as he believed his mother should be receiving NHS continuing healthcare. ICL was also in dispute with the local authority claiming that ARL had been placed in a nursing home without his consent and he had instructed solicitors to apply for compensation on his behalf. It was said that ICL was not providing ARL with an adequate personal allowance. It was thought he last visited his mother sometime in 2013 but in May of that year he had sold ARL’s house for £265,000 utilising £174,950 from the net proceeds to purchase a flat in his own name. A search of the register confirmed ICL is the registered owner of that flat. The balance of £90,000, that being the difference between the net proceeds of sale of house and the purchase of the flat, had been credited to ICL’s business accounts rather than to an account in ARL’s name. 

When the OPG asked ICL to provide an account fully detailing his mother’s finances he refused to do so claiming it was too onerous and at the time of the hearing had produced minimal disclosure. A Court of Protection General Visitor visited ARL in August 2014 and confirmed that she had dementia and lacked capacity to revoke the LPA.

The court made an order which required the attorneys to provide responses and provided for a further hearing. Lyn Parkin filed an acknowledgement of service and stated she wished to be joined as a party and in a witness statement stated it was in ARL’s best interest to have the LPA revoked, for ARL’s daughter, (JJT) and Lyn Parkin to be appointed as co-deputies, for ICL to be accountable for his actions and reimburse his mother’s estate in full.

Whilst JJT supported the Public Guardian’s application, ICL opposed it stating that he had not contravened section 22(3) (b) Mental Capacity Act 2005 and that he had tried to exercise his duties as attorney in ARL’s best interests at all times. He admitted he had used some of ARL’s funds but this was only intended as a temporary measure due to his personal circumstances. In relation to the purchase of the flat he claimed until completion that he had not realised the property was held in his own name and that it was always his intention that this property was purchased for the benefit of his mother and was happy for the property to be transferred into her name. He claimed he was self-employed and had found caring for his mother time-consuming and difficult and as a result had been unable to focus on his work over the last two years which placed great strain upon him financially and emotionally. Furthermore his sister, JJT, had been of no assistance at all. He accepted that some of the remaining funds had been used for personal outgoings for himself and his family and that he was fully prepared to pay back the entire amount as soon as the sale of his own property had completed and he gave an account as to what had happened to the remaining proceeds of sale of his mother’s property. Whilst he could not account for it in its entirety he said funds would have been used by him to cover the living costs of his family.

The court made an order joining Lyn Parkin as a party and required the Public Guardian to file a response with other evidence and making an order that "if the parties are able to resolve this matter amicably by agreement or through mediation, as soon as practicable the Public Guardian should file an application notice (COP9) together with a consent order requesting that the hearing be vacated."

Three days before the listed hearing, solicitors for ICL sought an adjournment due to his health, asserting that the Public Guardian had made no attempts to resolve the matter amicably through mediation and he was corresponding with Hertfordshire County Council to ascertain whether he may have grounds to bring a claim against the Council for the unlawful deprivation of ARL’s liberty. The court refused the adjournment considering it not to be in ARL’s best interest to delay the resolution any longer, that there was no need for ICL to attend the hearing as it was not intended that he should give evidence or be cross-examined, that the proceedings were essentially inquisitorial rather than adversarial and the court had already had most of the evidence needed in written form. ICL was in fact represented at the hearing. The court said in relation to the issue of mediation that “it had been an error on my part to include a mediation clause in the order of 24 June 2015. Whereas mediation may be appropriate in disputes regarding the appointment of an attorney or a deputy, it is generally unsuitable in safeguarding proceedings, such as these”.

Decision
The court found that in a dispute regarding NHS Continuing Health Care (“CHC”) an attorney acting on behalf of incapacitated Donor has a duty to pursue all the standard dispute resolution proceedings and, if need be, refer the matter to the Parliamentary and Health Service Ombudsman. However whilst attempts to resolve the dispute are taking place, the attorney should continue to pay the Donor’s care fees since, if it transpires that the Donor qualifies for CHC and has been eligible for some time, then the NHS will refund any overpayment of care fees. As a result of ICL’s actions, ARL’s placement was placed in jeopardy and there was a serious risk she would be evicted. It was not in ARL’s best interest to have her placement put in jeopardy. 

The court found that a failure to pay care home fees, a failure to provide an adequate personal allowance, a failure to visit and a failure to produce financial information to the statutory authorities go hand-in-hand with the actual misappropriation of funds. The court considered that the misappropriation of funds included but was not limited to: 

1. the purchase of a flat in his own name using £174,950 of his mother’s funds and given that he was going through an acrimonious divorce it would be a possibility that ARL’s funds could somehow inadvertently become part of the settlement in the matrimonial proceedings;
   
2. taking the rental income from the property over the last two years;
   
3. the funds that he admitted he had utilised amounted to some £36,524.17 and the remainder of the £90,500 which he accepted had been utilised for his costs of living and that of his family. 

The court had no confidence in ICL returning the funds – the court noted he had made a similar promise in January 2015 when he offered to transfer the title in the flat to the name of his mother but had failed to do so in the last seven months. The court noted that ICL had instructed many different firms of solicitors and other providers of legal services at his mother’s expense, often to defend the indefensible, and the court listed those providers at paragraph 42 judgment, leading to the observation at paragraph 43 “I wonder whether this is a smokescreen to ensure that no one firm or company is fully aware of the extent of his ineptitude and deceit“.

The court revoked the LPA and appointed Lynn Parkin and JJT to be ARL’s joint deputies for property and affairs.

In respect of costs the court noted the general rule, namely in property and affairs the costs of the proceedings are payable by the person to whom the proceedings relate, or charged to his estate as per Rule 156 COPR 2007. However in the circumstances the court noted Rule 159 which allowed a departure from rule 156 if the circumstances justify it and this involves having regard to all the circumstances including (a) the conduct of the parties; and (b) where a party has succeeded on part of his case, even if he has not been wholly successful. The court concluded the departure from rule 156 was justified on the basis of ICL’s conduct which had been appalling. The court did not see why ARL should be expected to pay the costs of defending behaviour which had been inexcusable and contrary to her best interests. The court made no order for ICL’s costs and directed that Lyn Parkin’s costs be assessed on the standard basis and paid from ARL’s estate.

Discussion
Sadly this is yet another example of a family member seemingly taking advantage of a person who lacks capacity for their own gain. It is clear that the court is prepared to take a much tougher stance on such behaviour not only in terms of revoking the LPA but also in terms of costs of proceedings which have been required to be taken.

The departure from the general costs rule (set out in rule 156 that the costs of the proceedings are payable by the person to whom the proceedings relate or charged to his estate in matters concerning property and affairs) is an example of the court not only noting reprehensible behaviour but also castigating behaviour in costs under rule 159 and should act as a warning to those who consider that utilising a relatives monies for their own means is legitimate and the court will not condone such behaviour.

Read the full text of the judgment on Bailii