D v R (The Deputy of S) & Anor

The question before the court on this application is whether Mr S, as I will call him, has the necessary mental capacity to decide whether an action in the Chancery Division of the High Court, started in his name and on his behalf by his younger daughter and deputy R, should be discontinued or compromised. The principal relief sought in the action is a declaration that gifts of money totalling £549,141 odd, which were made by Mr S to the first defendant, Mrs D, on fifteen separate occasions between 19 January 2006 and 11 April 2007, were procured by the undue influence of Mrs D and should be set aside. The second and third defendants are the adult children of Mrs D, to each of whom she transferred £30,000 out of the money given to her by Mr S. The action has now been settled as against the second and third defendants by a consent order dated 17 June 2010, whereby they agreed to pay £40,000 to R’s solicitors. Unless it is discontinued or compromised in the meantime, the action to recover the remaining £509,141 from Mrs D will continue and is listed for hearing in November.

The application which is now before me, and which I am hearing as a nominated judge of the Court of Protection, was issued in that court by Mrs D on 6 July 2009. In her application form she described herself as a friend of Mr S, and stated the matters which she wanted the court to decide as follows:

“Whether (1) [Mr S] should be consulted in the decision to commence proceedings in the Chancery Division against the Applicant, in which the Deputy seeks to set aside gifts by [Mr S], (2) the Deputy, [R], ought to have consulted [Mr S] in the decision to commence the said proceedings in the Chancery Division, (3) a Visitor or Doctor should be appointed to meet [Mr S] and ascertain whether (a) he has capacity to decide whether the proceedings should be pursued or compromised and if so on what terms and/or (b) his views ought to be taken into account in deciding whether to pursue or compromise the same, and (c) to assist [Mr S] in making any decision whether to pursue or compromise the said proceedings, and (4) for the court to decide if necessary whether the said proceedings should be pursued or compromised or what further steps should be taken in respect of the decision to pursue the said proceedings.”

As matters have developed, the relief sought by Mrs D has narrowed somewhat in scope, and the only question which I am asked to decide at this stage is the fundamental question whether Mr S has capacity to decide whether the Chancery proceedings should be continued.

R was appointed as her father’s deputy by an order of Senior Judge Lush in the Court of Protection on 9 October 2007, following a contested hearing which had taken place on 26 September. The order appointed R “to make decisions on behalf of [Mr S] that he is unable to make for himself in relation to his property and affairs”, subject to the conditions and restrictions set out in the order. Paragraph 2(a) of the order then conferred on R

“general authority to take decisions that [Mr S] is unable to take in relation to his entire estate and to exercise the same powers of management and investment as he has as the beneficial owner.”

Paragraph 2(b) directed the deputy to apply the principles set out in section 1 of the Mental Capacity Act 2005, and to have regard to the guidance in the Code of Practice to the Act.

R commenced the High Court action against Mrs D and her children (“the Chancery proceedings”) by a claim form under Part 7 of the CPR issued on 27 January 2009. She did not need to obtain the prior authorisation of the Court of Protection to take this initial step, and did not do so: see CPR rule 21.3(2)(b)(i). She did, however, need to obtain the authority of the court before taking any further steps in the proceedings, because the order of 9 October 2007 did not expressly authorise her to conduct proceedings on her father’s behalf: see CPR rules 21.3(3) and 21.4(2). An application for this purpose was therefore made by her to the Court of Protection, and by an order dated 27 April 2009 Senior Judge Lush expressly authorised her to take and conduct the Chancery proceedings on her father’s behalf.

Despite the grant of this authority, however, it is common ground that R’s entitlement to conduct the Chancery proceedings is dependent on her father’s lacking the capacity to do so himself. This follows from the basic principle that her only right as his deputy is to take decisions that he is unable to take for himself. It is also common ground that it is Mr S’s consistently repeated, deeply felt and clearly expressed wish that the Chancery proceedings should never have been begun, and that they should not now be continued. Nobody disputes that it is his fervent desire that Mrs D should be able to keep the very substantial sums which he gave to her, and that he is appalled at the prospect of legal proceedings being taken in his name to recover them.

It will already be apparent that the question which I have to resolve is one of great sensitivity. My task is also one of considerable difficulty, as will be evident from two further matters which I have not yet mentioned.

The first of those matters is that Mr S is agreed to have had testamentary capacity on 13 April 2008 when he executed a will leaving his residuary estate in equal shares to his two daughters, R and A. On 8 April 2008 a psychiatric report had been obtained from an eminent expert, Professor Robert Howard, who was then (and still is) professor of old age psychiatry and psychopathology at the Institute of Psychiatry and a consultant old age psychiatrist at the Maudsley Hospital in London. In that report he expressed the clear view that Mr S had testamentary capacity when he examined him at his home on 3 April 2008. It might be thought to follow from this undisputed evidence that, if Mr S then had capacity to make a will, he would equally have had capacity to include in the will a provision confirming the gifts which he had made to Mrs D in 2006 and 2007, and directing his executors (who were R and an unspecified partner in Judkins Solicitors, who have at all material times acted for R) to take no steps to recover or set aside the gifts.

The second matter is that I have had the assistance of expert evidence on both sides, and of a report prepared for the court by a Special Visitor, Dr Andrew Barker, appointed pursuant to an order which I made on 20 October 2009. Unfortunately, however, there is an unbridgeable division of opinion between the experts. Professor Howard, instructed as before on behalf of Mrs D, is of the firm opinion that Mr S does indeed have sufficient capacity to decide whether the Chancery proceedings should have been begun, and whether they should be continued. The equally eminent expert instructed by R’s solicitors, Professor John Graham Beaumont, who specialises in clinical psychology and neuropsychology and is head of the department of clinical psychology at the Royal Hospital for Neuro-Disability, honorary professor at Roehampton University and a Fellow of the British Psychological Society, disagrees. So does Dr Barker, a consultant in old age psychiatry, who visited Mr S at his home on 21 November 2009 and prepared a report dated 2 December 2009.

Resolution of this case will ultimately depend on my analysis and evaluation of the conflicting expert evidence (a term which I use to include Dr Barker’s report). All three experts gave oral evidence and were cross-examined on the first and second days of the hearing before me. Before I come on to the expert evidence, however, I will first set out the undisputed background facts and provide a description of the Chancery proceedings. I will also set out the relevant provisions of the Mental Capacity Act 2005, and discuss the legal principles which I have to apply.

Both sides agreed that the background facts were stated accurately, and for present purposes adequately, by Senior Judge Lush in the written judgment which he delivered on 28 September 2007. The account which follows is largely based on that judgment.

Mr S was born in Suva, Fiji, on 7 February 1933. He is therefore now 77 years old. His parents were ethnic Indians from Uttar Pradesh. He was formerly a managing clerk with J E Baring & Co, solicitors. In 1963 he married, but after 19 years of marriage he and his wife separated in August 1982, and they divorced in 1985. They had two children: A, who was born on 19 September 1963 and lives in St Albans, Hertfordshire, and R, who was born on 9 January 1965, and is a school teacher. She too lives in St Albans.

Mr S lives alone in a bungalow, which he owns, in Kingsbury, London NW9. Its estimated value in September 2007 was about £270,000. No formal valuation of the property has been carried out, and both sides have been content to proceed on the footing that this remains a reasonable estimate of its value.

On 6 February 2004 Mr S signed an enduring power of attorney, in which he appointed Robert Sayer, of Sayer Moore, solicitors, 190 Horn Lane, Acton, London W3 to be his sole attorney.

In April 2005 Mr S suffered a stroke, and requested help at home with various chores. Mrs D, who was then a legal secretary employed by his solicitors, Sayer Moore, befriended him, began visiting him regularly, and took on the role of his primary carer. Mrs D was born in 1960 and lives in Acton, West London.

On 20 June 2005 Mr S signed another enduring power of attorney, in which he appointed Robert Sayer and another partner in Sayer Moore, Kimberley Ann Walsh, to be his joint attorneys.

On 28 February 2006 Mr S signed a third enduring power of attorney, in which he appointed Mrs D and two partners in the firm of Redferns, solicitors, of 33/35 Bridge Road, Wembley, Middlesex jointly and severally to be his attorneys. Redferns drew up the third power of attorney, and Derek Brennan of that firm witnessed Mr S’s signature.

Between January 2006 and April 2007 Mr S made the gifts to Mrs D which I have already mentioned. The particulars of the gifts pleaded in paragraph 47 of the particulars of claim in the Chancery proceedings are admitted in the defence of all three defendants dated 12 March 2009. In summary, the payments were as follows:

The majority of the payments were made from Mr S’s current account with Lloyds Bank. The sums paid by cheque included the cash proceeds of a general dealing account held by Mr S with his stockbrokers, T.D. Waterhouse, (the payments of £301,941 and £28,102 in August and November 2006) and the encashment of an ISA account held with the same firm (the payment of £42,972.91 on 24 May 2006). The payment of £61,837.48 on 12 May 2006 represented the proceeds of National Savings Certificates which Mr S directed to be paid into Mrs D’s account. Similarly, the £30,000 paid on 25 March 2006 represented the proceeds of Premium Bonds held by Mr S.

In paragraph 48 of the particulars of claim it is pleaded that the above payments “were such as to constitute the disposal of the greater part of the Claimant’s disposable assets, the remaining principal asset being his home …”. This is admitted in the defence, subject to the averral “that the Claimant remained entitled to the income from his pensions which he considered were adequate to provide for him”.

On 3 July 2007 R applied to the Court of Protection to be appointed as her father’s receiver pursuant to the provisions of section 99 of the Mental Health Act 1983. In the declaration which she made in support of the application she made the following personal statement:

“Over the last 7 years my father has not been in touch with me. Prior to that contact was sporadic. My birthday, Easter and Xmas cards received no response, nor phone calls or knocking on the door.

In April 2007 [Mrs D] got in touch with me to say she was a friend of my father’s and had been caring for him since his stroke. He now wished to get in touch with us. Since then I have been in regular contact with him. I was shocked at the mess he was living in … My concern grew when my father (and his bank statements) disclosed that he had given her £500,000. His care needs are increasing and will continue to do so. His finances need to be protected so that he can pay for the best care possible and not be open to financial abuse. [Mrs D] has enduring power of attorney. My father’s will is made out to her and I am very concerned about her influence over him and her motives.”

On 8 July 2007 Mrs D lodged an objection to R’s application. She contended (a) that the proposed appointment of R was against the express wishes of Mr S; (b) that R was an unsuitable person to take charge of his finances; (c) that the appointment was unnecessary, because Mrs D already had a power of attorney and she had been looking after his personal and financial needs for some time; and (d) that no working relationship could exist between her and R, if R was appointed as receiver. Shortly afterwards, Redferns applied to register the enduring power of attorney that Mr S had signed on 28 February 2006. This application, in its turn, was met by an objection from R on the grounds that fraud or undue pressure had been used to induce Mr S to create the power, and that in all the circumstances the attorneys were unsuitable to fulfil that role.

The receivership application, and Mrs D’s application to register the enduring power, both came on for hearing before Senior Judge Lush in the Court of Protection on 26 September 2007. In the judgment which he gave on 28 September, he decided that Mrs D was unsuitable to be Mr S’s attorney, because the transactions in her favour called for an explanation and it would be presumed that they were procured by undue influence unless she could provide a satisfactory explanation to the contrary. The transactions needed to be investigated, and it would be impossible for Mrs D, as attorney, to carry out an investigation into her own dealings. On the receivership application, he exercised the discretion which was then contained in section 99 of the Mental Health Act 1983 and decided that R, rather than a panel receiver, should be appointed for reasons which he explained as follows:

“I have decided to appoint [R] as receiver, rather than a panel receiver, for the following reasons.

The appointment of a panel receiver would mean introducing a third party into these proceedings, which is not necessarily a satisfactory outcome, given the time and energy that [R] has already committed to this matter.

Although the office of receiver is, by its definition, concerned with property and financial matters and involves the prudent control of the property and assets of the patient, in the nature of things a receiver is likely to become involved in decisions which affect the patient’s quality of life. A knowledge of the person is involved, and a devotion to his interests may contribute to that quality. It is likely to be more readily secured by the appointment of a family member than by the appointment of a panel receiver.

I believe that [R] is likely to be more motivated than a panel receiver to carry out an investigation into [Mrs D’s] dealings.

I am not convinced that any hostility between [R] and [Mrs D] will impact adversely on the proper stewardship of [Mr S’s] finances.

Costs are a major consideration. In a case of this kind, with the investigation that needs to be carried out, I would be surprised if a panel receiver would charge less than £15,000 a year. This would be entirely disproportionate, given that [Mr S’s] estate, excluding the value of his house and any sums that may be recoverable from [Mrs D], amounts to only £80,000. By contrast, [R] will act gratuitously, and will thereby manage his assets more economically.

It has been suggested that [R’s] appointment would be contrary to her father’s wishes. This is an extremely difficult and sensitive issue. Of course, his wishes and feelings are of considerable importance, and I would not dream of overriding them unless I considered it was absolutely necessary to do so. His wish is that [Mrs D] should manage his affairs, but, for the reasons stated above, that would be inappropriate and would not be in his best interests. When enacting the Mental Capacity Act 2005, which comes fully into force on 1 October 2007, Parliament required decision makers, including the court, to act in an incapacitated person’s best interests, rather than engage in an act of pure substituted judgment. This means that the patient’s wishes do not automatically determine the outcome.”

Since the provisions of the 2005 Act had come fully into force before the order of the court was drawn up on 9 October 2007, the order appointed R as her father’s deputy, even though the application had been substantively determined under the law previously in force. I have already referred to some of the main provisions of this order in paragraph 3 above. The order was subsequently sealed on 3 December 2007.

The particulars of claim, settled by R’s counsel, Mr Paul Marshall, run to 55 paragraphs and set out R’s claim in considerable detail. The immediate background to the disputed gifts is pleaded as follows:

“14.

In or about 2004 [Mr S] suffered a stroke following which he became progressively incapacitated and, in particular, suffered from hemiparesis and restricted mobility. He was blind in one eye and partially blind in the other by reason of a cataract. He suffered from type II diabetes mellitus and high blood pressure. In the premises by 2005 [Mr S] was elderly, living alone in circumstances of substantial isolation, suffering from impaired mobility, and was partially sighted. [Mr S] during this period had a tendency to drink alcohol to excess. As a consequence [Mr S] was vulnerable.

15.

In or about mid-2005 Sayer Moore & Co arranged for [Mr S], at his request, to attend doctors’ and opticians’ appointments aided and accompanied by [Mrs D].

16.

[Mrs D] befriended [Mr S]. She wrote letters on his behalf and started to visit him at his home weekly for a period of about 2 hours. In October 2005 [Mrs D] wrote to [a local doctor] offering to bring [Mr S] for a blood test. She requested that [Mr S] be attended at his home in future for the purpose of diabetes tests commenting: “He is very frightened to leave the house because he can hardly see and walking is very painful. I am certain he would not bother to attend if he was told to come under his own steam by taxi.”

17.

In the circumstances [Mrs D] became effectively the sole companion of and visitor to [Mr S] in circumstances in which, by 2005/2006, he had become isolated, vulnerable and dependent and unable to adequately care for himself.

18.

By reason of the aforesaid circumstances a relationship arose between [Mr S] and [Mrs D] characterised by dependence of [Mr S] upon [Mrs D], disproportionate gratitude for her companionship and help, and trust and confidence reposed by him in her, including in connection with his financial affairs. By reason of matters aforesaid [Mrs D] acquired influence over [Mr S] without persuasion or other analogous overt acts by her.”

The pleading goes on to refer to the first two gifts, of £3,000 and £13,000 respectively, made in January and February 2006. It is alleged that Mrs D recognised the inappropriateness of the second gift, but instead of referring the matter to her employers, or seeking their advice, she consulted Redferns. On 2 February 2006 Mr Brennan, then a partner in Redferns, wrote to Mr S in the following terms:

“We have been consulted by [Mrs D] … in connection with her concerns regarding a gift you wish to make to her as she feels, in the best interests of everyone concerned, that this gift is recorded in some way.

We have advised her that there is no reason why she cannot accept a gift from you upon whatever terms you wish or do not wish to impose and such a gift can very simply be recorded by a short Memorandum …

We also advised her that as we act for her we do not owe any responsibility to you other than to advise you that if you have any doubts at all or there is any reason why anyone else should raise doubts about the correctness of the gift, you should seek independent legal advise (sic).”

It is averred that this limited advice was ineffective to protect against the circumstances that might vitiate the proposed gift.

Reference is then made to a manuscript note which Mr S wrote at about the same time, expressing his wish to give £13,000 to Mrs D “free of any terms or conditions as an outright gift”. It is said that the nature of the handwriting was such “as would lead any reader of it reasonably to infer that the writer suffered from some kind of infirmity including significant motor or visual impairment or both”.

Paragraphs 25 to 42 and 44 refer to various communications passing between Mr S and Redferns in February and March 2006, and to a meeting which took place on 15 February 2006 at which he gave instructions to Mr Brennan in connection with the preparation of a new will and a new enduring power of attorney. On 28 February 2006 Mr S signed the third enduring power of attorney (see paragraph 16 above), and also made a will appointing Mrs D and Redferns executors and trustees of his estate and devising the residue of his estate to Mrs D. It is alleged that Mr Brennan subsequently commented, in a letter dated 8 March 2007, that when he prepared the will Mr S provided no information about any family and, because he was emphatic about his requirements, there was “no need to provide advice as to the consequence of cutting out his family”.

It is then alleged (and admitted in the defence) that in February or March 2006 Mr S wrote in manuscript to his stockbrokers, T. D. Waterhouse Investor Services (Europe) Ltd, asking them to close three specified accounts which he held with them and to remit the proceeds as soon as possible. This was followed up by a typed letter on 28 March 2006 in the following terms:

“I am writing as I am concerned that you have not replied to my earlier letter. I am now partially sighted and wish to simplify my affairs by closing all my accounts and holdings with you and selling my investments. I did write to you by hand but admittedly my writing is not what it was due to my sight problems.

Please can you send me forms so that all my investments can be liquidated.

I look forward to hearing from you.

I enclose a copy of my earlier letter for your reference. You may telephone me on the above number if any information is unclear.”

It is alleged, and admitted, that Mr S did not at the material time own a computer word-processor or printer, and that Mrs D typed this letter and later placed it before Mr S for him to sign, which he did.

I have already referred to paragraphs 47 and 48 of the particulars of claim, which set out in tabular form the 15 payments which were made and aver that they were such as to constitute the disposal of the greater part of Mr S’s disposable assets. It is then pleaded that the gift of these sums was so large as not to be reasonably accounted for on the ground of friendship or other ordinary motives; that they were paid in circumstances in which there existed a relationship of dependence by Mr S upon Mrs D and trust and confidence reposed by him in her, including in connection with his financial affairs; and that at no time did he exercise his independent and informed judgment about the nature of the gifts, whether individually or cumulatively, nor with regard to the proportion of his assets that they represented or their effect upon his overall financial position. Nor did he receive any independent advice in connection with the gifts. In the premises, it is alleged that the payments are presumed to have been procured by undue influence and they are liable to be set aside accordingly.

The defence, which as I have said was a joint defence served on behalf of all three defendants, denies that the relationship between Mr S and Mrs D was one where he reposed trust and confidence in her in respect of his financial affairs, and avers that it was not one where the presumption of undue influence arises. It is further said that his decisions to make the various gifts “were made by him after full, free and informed thought”. It is also denied that Mr S’s mental health was adversely affected by the stroke which he suffered in 2005, or that he became progressively incapacitated during the period when he made the gifts, or that he ever drank excessively until just before Christmas 2006 when he began to drink about one or one and a half bottles of whiskey a week.

In fairness to Mrs D, I should set out her pleaded account of how her relationship with Mr S began and developed:

“5.

[Mr S] and [Mrs D] first met in April 2005, when [she] was asked by Mr Sayer to accompany [Mr S] to an appointment at his optician, and thereafter a friendship arose between them, with [Mr S] inviting [her] to visit him at his home on a weekly basis, and on some of those occasions [her] children would also visit [Mr S].

6.

At all material times, [Mr S] was an individual with a strong personality, who made all decisions concerning him and his affairs, [and] who enjoyed a degree of isolation.

7.

[Mrs D] found [Mr S] to be a polite, dignified, intelligent, well read and articulate individual. They shared many interests, in listening to Radio 4, reading the Telegraph newspaper, religions, British politics, art, literature and history, and aspects of the law, together with other matters.

8.

[Mr S] expressed himself in somewhat flowery language.

9.

[Mr S] took an interest in [Mrs D] and her children …

…

13.

As far as [Mrs D] is aware, [Mr S] considered her to be a good friend, whose company he greatly enjoyed.”

I should also refer to paragraph 23 of the defence, where the following particulars are given in support of the allegation that Mr S remained in control of his financial affairs:

“(1)

[Mr S] alone had control of the cheque book for his bank account.

(2)

[He] alone paid all of the outgoings for his home and his living expenses.

(3)

[He] did not ask [Mrs D] to provide him with any assistance in managing his financial affairs, nor did [she] provide him with any assistance in managing his financial affairs.

(4)

[He] alone decided to make the various gifts to [Mrs D] that are the subject matter of these proceedings.

(5)

[He] alone decided on the amounts of the various cheques made out in favour of [Mrs D] …

(6)

[He] wrote out all the details on most of the various cheques made out in favour of [Mrs D] …

(7)

[He] wrote out the cheque dated 14 August 2006 in favour of [Mrs D] in the amount of £301,941. A few days later, an employee of [his] bank, Lloyds TSB Plc, called [him] at home, while [Mrs D] was not present, and enquired whether in fact he wanted to pay this sum to [her] and [he] confirmed that he did. Thereafter, [his] bank cleared the cheque and marked it “Special Paid”.

(8)

[He] was aware that at some point he might have to move into a home, he was aware from the news of the cost of staying at a home, which he understood to be about £500 to £600 a week.

(9)

[He] was aware that his pensions provided him with an income of £2,800 [per month] or thereabouts.

(10)

[He] considered that his pensions provided him with a sufficient income for his maintenance and that he could afford to make the gifts to [Mrs D] …

(11)

[He] was concerned about the financial position of [Mrs D], and he wanted to provide her with financial assistance.

(12)

[He] and [Mrs D] discussed whether [he] could afford to make the gifts …

(13)

[He] asked [Mrs D] about the details of her financial affairs, and knew that she owned her home, the amount of her mortgage, and that she had no pension arrangements or other investments.

(14)

[He] was aware that the gifts were of significant sums and would leave him with only his pensions.

(15)

[He] was aware that by making the gifts then during his lifetime, the amounts would not be subject to Inheritance Tax if he were to survive the making of the gifts by 7 years, and in late 2006 he informed her that that was one of his reasons for deciding to make the gifts.

(16)

…

(17)

[Mrs D] felt uncomfortable about accepting these significant gifts from [Mr S], being gifts from a friend of substantial amounts. [She] sought to dissuade [him] from making the gifts to her on a number of occasions but he would not waver from his desire and decision to make the gifts.

(18)

…

(19)

[Mrs D] insisted that a solicitor be consulted in respect of a gift of £13,000 …”

It is unnecessary for me to say anything more about the Chancery proceedings, and I emphasise that nothing in this judgment should be read as expressing any concluded view on the merits of the claim. That remains to be determined, if at all, in the forthcoming trial, when the pleaded cases on each side will be tested in the light of the full oral and documentary evidence then before the court. I do, however, think it appropriate to say that the claim, as pleaded, is a serious and substantial one, which prima facie gives rise to a strong case for Mrs D to answer. At the simplest level, the making of cash gifts of nearly £550,000, by an elderly man in his seventies, living alone and in poor health, in favour of a lady who was a legal secretary employed by his solicitors, is a transaction which calls out for an explanation, and which would set alarm bells ringing in the mind of any experienced equity lawyer. To make the same point another way, it is certainly not the kind of case which can be dismissed as a speculative one with little more than nuisance value. It is the kind of case, I would venture to add, which cries out for mediation and a realistic settlement. It is most unfortunate that efforts to settle the case by mediation have so far failed to bear fruit.

As Lewison J explained in In re P (Statutory Will) [2009] EWHC 163 (Ch), [2010] Ch 33, at paragraph [25], the Mental Capacity Act 2005 (“the 2005 Act”) introduced a new legislative framework dealing with loss of mental capacity, following a number of consultation documents and reports of the Law Commission. The crucial provisions for present purposes are those contained in sections 1 to 3 of the 2005 Act, which provide as follows:

“1.

The principles

(1)

The following principles apply for the purposes of this Act.

(2)

A person must be assumed to have capacity unless it is established that he lacks capacity.

(3)

A person is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success.

(4)

A person is not to be treated as unable to make a decision merely because he makes an unwise decision.

(5)

An act done, or decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests.

(6)

Before the act is done, or the decision is made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action.

2.

People who lack capacity

(1)

For the purposes of this Act, a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain.

(2)

It does not matter whether the impairment or disturbance is permanent or temporary.

(3)

A lack of capacity cannot be established merely by reference to –

(a)

a person’s age or appearance, or

(b)

a condition of his, or an aspect of his behaviour, which might lead others to make unjustified assumptions about his capacity.

(4)

In proceedings under this Act or any other enactment, any question whether a person lacks capacity within the meaning of this Act must be decided on the balance of probabilities.

…

3.

Inability to make decisions

(1)

For the purposes of section 2, a person is unable to make a decision for himself if he is unable –

(a)

to understand the information relevant to the decision,

(b)

to retain that information,

(c)

to use or weigh that information as part of the process of making the decision, or

(d)

to communicate his decision (whether by talking, using sign language or any other means).

(2)

A person is not to be regarded as unable to understand the information relevant to a decision if he is able to understand an explanation of it given to him in a way that is appropriate to his circumstances (using simple language, visual aids or any other means).

(3)

The fact that a person is able to retain the information relevant to a decision for a short period only does not prevent him from being regarded as able to make the decision.

(4)

The information relevant to a decision includes information about the reasonably foreseeable consequences of –

(a)

deciding one way or another, or

(b)

failing to make the decision.”

Section 4 then expands on the concept of “best interests” referred to in section 1(5). It sets out a process of structured decision-making which must be employed on behalf of a person who is unable to make a decision for himself, because he lacks the capacity to do so in the sense explained in section 3. Accordingly, this section lays down the procedure that R will be obliged to follow in prosecuting the Chancery proceedings if I come to the conclusion that Mr S lacks the capacity to decide whether they should be continued or compromised. It is unnecessary for me to cite all of the section, but at least the following provisions are of potential relevance:

“4.

Best interests

(1)

In determining for the purposes of this Act what is in a person’s best interests, the person making the determination must not make it merely on the basis of –

(a)

the person’s age or appearance, or

(b)

a condition of his, or an aspect of his behaviour, which might lead others to make unjustified assumptions about what might be in his best interests.

(2)

The person making the determination must consider all the relevant circumstances and, in particular, take the following steps.

(3)

He must consider –

(a)

whether it is likely that the person will at some time have capacity in relation to the matter in question, and

(b)

if it appears likely that he will, when that is likely to be.

(4)

He must, so far as reasonably practicable, permit and encourage the person to participate, or to improve his ability to participate, as fully as possible in any act done for him and any decision affecting him.

(5)

…

(6)

He must consider, so far as is reasonably ascertainable –

(a)

the person’s past and present wishes and feelings (and, in particular, any relevant written statement made by him when he had capacity),

(b)

the beliefs and values that would be likely to influence his decision if he had capacity, and

(c)

the other factors that he would be likely to consider if he were able to do so.

(7)

He must take into account, if it is practicable and appropriate to consult them, the views of –

…

(b)

anyone engaged in caring for the person or interested in his welfare,

(c)

any donee of a lasting power of attorney granted by the person, and

(d)

any deputy appointed for the person by the court,

as to what would be in the person’s best interests and, in particular, as to the matters mentioned in subsection (6).

(8)

…

(9)

In the case of an act done, or a decision made, by a person other than the court, there is sufficient compliance with this section if (having complied with the requirement of subsections (1) to (7)) he reasonably believes that what he does or decides is in the best interests of the person concerned.

(10)

…

(11)

“Relevant circumstances” are those –

(a)

of which the person making the determination is aware, and

(b)

which it would be reasonable to regard as relevant.”

Under the heading “The general philosophy of the 2005 Act”, Lewison J commented on the new regime which it introduced, and on one aspect of the statutory test of incapacity (the ability to “use or weigh” information in making a decision) which is of particular relevance to the present case:

“36.

The 2005 Act marks a radical change in the treatment of persons lacking capacity. First it brings together under one common framework the former powers of the court to make decisions both about a person’s property and his personal welfare. It thus applies to all manner of decisions from the relatively minor to the most important. Second, it applies not only to decisions that the court might make, but also to decisions that others (carers, doctors, deputies) might make. Third, the test of incapacity is finely calibrated. The Act recognises that the test of capacity is issue specific. A person (“P”) may well have capacity in relation to some matters (e.g. what to wear or what to eat), while lacking capacity as regards others (e.g. what to do with his savings or whether to undergo an operation). A person’s capacity may also vary from time to time. At this point I should comment on one aspect of the statutory test of incapacity. One of the ingredients in the test is to ask whether P is able to “use or weigh” information in making a decision: section 3(1)(c). In their report the Law Commission explained the thinking behind this: para 3.17. They said:

“There are cases where the person concerned can understand information but where the effects of a mental disability prevent him or her from using that information in the decision-making process. We explained in Consultation Paper No. 128 that certain compulsive conditions cause people who are quite able to absorb information to arrive, inevitably, at decisions which are unconnected to the information or their understanding of it. An example is the anorexic who always decides not to eat … We originally suggested that such cases could be described as cases where incapacity resulted from inability to make a true choice. Common to all these cases is the fact that the person’s eventual decision is divorced from his or her ability to understand the relevant information. Emphasising that the person must be able to use the information which he or she has successfully understood in the decision-making process deflects the complications of asking whether a person needs to “appreciate” information as well as understand it. A decision based on compulsion, the overpowering will of a third party or any other inability to act on relevant information as a result of mental disability is not a decision made by a person with decision-making capacity.”

37.

Fourth, the overarching principle is that any decision made on behalf of P must be made in P’s best interests. This is not (necessarily) the same as enquiring what P would have decided if he or she had had capacity. As the explanatory notes to the Mental Capacity Bill explained:

“Best interests is not a test of “substituted judgment” (what the person would have wanted), but rather it requires a determination to be made by applying an objective test as to what would be in the person’s best interests”.”

I respectfully agree with these comments, and also with the valuable guidance about the practical application of the “best interests” test given by Lewison J in paragraphs [38] to [45] of his judgment in In re P.

I would add that it is important not to confuse the structured and relatively objective “best interests” test, which applies where a person lacks the capacity to take a decision for himself, with the prior question whether the person has the requisite capacity to do so. That question has to be determined in accordance with the principles in sections 1 to 3 of the 2005 Act. It is clear that the test of capacity is both issue and time-specific, and that failure to satisfy any one of the four criteria in section 3(1) in relation to the particular decision in question, if established to the satisfaction of the court on the balance of probabilities (see section 2(4)), will be fatal. On the other hand, all practicable steps must be taken to assist the person to make the decision for himself (section 1(3)), and full regard must be had to the principles in subsections 3(2) and (3), which further explain and qualify the meaning of the criteria in subsection (1)(a) and (b) (understanding and retention of the information relevant to the decision). Thus, the information relevant to the decision (which includes, by virtue of section 3(4), information about the reasonably foreseeable consequences of deciding one way or another, or failing to make the decision), will be sufficiently understood if the person is able to understand “an explanation of it given to him in a way that is appropriate to his circumstances”. Moreover, the fact that he is able to retain the relevant information for a short period only does not, in itself, prevent him from being regarded as able to make the decision: section 3(3). It follows that even profound loss or impairment of memory may be compatible with capacity to make the decision. It will be enough, so far as criterion (b) is concerned, if the person’s short term memory enables him to retain the relevant information, once it has been supplied to him, for long enough for him to understand and evaluate it and to form and communicate his decision.

Two further important provisions reflect the basic principles of personal autonomy and freedom of action which seem to me to inform and illuminate the new statutory regime. First, a person must be assumed to have capacity unless the contrary is established: section 1(2). Thus the burden of proof in the present case lies on R to establish that Mr S lacks capacity to discontinue or settle the Chancery proceedings. If the burden is not discharged, it must be assumed that he has the necessary capacity and the court has no right to interfere with his decision. Secondly, the fact that the decision is an unwise one does not, of itself, justify a conclusion of lack of capacity: see section 1(4). Just as a testator has always had the freedom (subject now to the constraints of the Inheritance (Provision for Family and Dependants) Act 1975) to make testamentary dispositions which are unreasonable, foolish or contrary to generally accepted standards of morality, so too a person in his lifetime has the freedom to act in a manner which is (for example) unwise, capricious, or designed to spite his relations. The pages of English fiction and of the law reports alike bear ample testimony to the exercise of this basic human right, even if it is not one enshrined in so many words in the European Convention on Human Rights (although Articles 8, 9 and 10 are, of course, all relevant in this context).

The significance of section 1(4) must not, however, be exaggerated. The fact that a decision is unwise or foolish may not, without more, be treated as conclusive, but it remains in my judgment a relevant consideration for the court to take into account in considering whether the criteria of inability to make a decision for oneself in section 3(1) are satisfied. This will particularly be the case where there is a marked contrast between the unwise nature of the impugned decision and the person’s former attitude to the conduct of his affairs at a time when his capacity was not in question.

Before moving on, I should record that it is common ground that what is sometimes called the diagnostic test in section 2(1) is satisfied in the present case, namely that Mr S suffers from “an impairment of, or a disturbance in the functioning of, the mind or brain”. The existence of such an impairment or disturbance is not in issue, although its precise nature has not been established because Mr S has never undergone a full neurological examination. In particular, it is not disputed that Mr S suffers from a severe impairment of his long term (or semantic) memory, although his short term memory is only moderately impaired and falls within the lower part of the average range for a man of his age. One of the main areas of disagreement between the experts is whether, and if so how far, his mental impairment or disturbance extends beyond the severe impairment of his long term memory. The other, and closely related, main area of dispute is whether the effect of his mental impairment or disturbance is such that he is unable to decide for himself (within the meaning of section 3) whether or not to continue with the Chancery proceedings.

It is convenient at this point to examine more closely the nature of the decision which has to be made, because it is only when this has been done that the criteria in section 3(1) can be properly assessed in relation to the decision.

At a superficial level, the nature of the decision may be simply stated. As I have already said more than once, it is whether to discontinue, or to continue to prosecute, the Chancery proceedings. But that decision cannot be taken, it seems to me, without at least a basic understanding of the nature of the claim, of the legal issues involved, and of the circumstances which have given rise to the claim. It would be an over-simplification to say that the claim is just a claim to set aside or reverse the gifts which Mr S made to Mrs D, because in the ordinary way a gift is irrevocable once it has been made and perfected by delivery or transfer of the relevant assets. If a gift is to be set aside or recovered, some vitiating factor such as fraud, misrepresentation or undue influence has to be established; and if the donor is to decide whether or not to pursue a claim, he needs to understand, at least in general terms, the nature of the vitiating factor upon which he may be able to rely, and to weigh up the arguments for and against pursuing the claim. Provided that the donor is equipped with this information, and provided that he understands it and takes it into account in reaching his decision, it will not matter if his decision is an imprudent one, or one which would fail to satisfy the “best interests” test in section 4. But if the donor is unable to assimilate, retain and evaluate the relevant information, he lacks the capacity to make the decision, however clearly he may articulate it.

The need for an understanding of the nature of the claim is particularly pronounced, in my view, where the claim is founded on a rebuttable presumption of undue influence, and where the relationship which arguably gave rise to the claim is still in existence. One would naturally not expect a lay person to have the same understanding as a lawyer of the principles expounded by the Court of Appeal in Allcard v Skinner (1887) 36 Ch D 145 and by the House of Lords in Royal Bank of Scotland Plc v Etridge (No.2) [2001] UKHL 44, [2002] 2 AC 773. But if a donor is to decide whether or not to pursue such a claim, he must in my view understand (at least in the simple terms envisaged by section 3(2)):

It is only with the benefit of this minimum level of information that a donor in the position of Mr S can begin to reach a decision whether or not to pursue the claim, or (just as important) whether to attempt to settle it, and (if so) on what terms. Furthermore, where (as in the present case) the relationship with the donee which gave rise to the potential claim is apparently still subsisting, the court will in my judgment need to scrutinise with particular care whether the donor can stand back from the impugned transactions with sufficient detachment truly to understand the nature of the claim. By way of contrast, the necessary degree of understanding is likely to be far easier to establish where the donor was under an influence at the time of the gift (e.g. by a religious sect or guru) which has subsequently come to an end.

I emphasise these points because Mr Staunton on behalf of Mrs D submitted that it was unnecessary for the court to concern itself with the technicalities of the law of undue influence, and that all Mr S needed to understand was that he had a good claim to recover the gifts which he had made. Mr Staunton suggested that if Mr S had that limited degree of understanding, no more was necessary, because if he wished Mrs D to retain the gifts even on the assumption that he had a good claim to recover them, the same must be true a fortiori if he were able to understand the actual complexities of the Chancery proceedings. The submission is a beguiling one, but I am unable to accept it. As I have tried to explain, a good (or any) claim to recover a gift must be based on the existence of some vitiating factor, and without an understanding of the relevant factor, and of the circumstances which arguably engage it, the donor cannot in my judgment be said to understand the information relevant to the decision whether or not to pursue the claim.

The matter may also be tested in this way. If the immediate question were not whether the Chancery proceedings should be continued at all, but rather whether an offer of settlement should be accepted, it would in my view plainly be necessary for Mr S to have a basic understanding of the nature of the claim, of its legal basis, and of the evidential hurdles facing each side, before he could form an opinion on the merits of the offer. He might then decide to disregard that opinion for other reasons (for example, an overriding wish that Mrs D should keep the gifts, even if she had taken advantage of him and they were improperly obtained); but the formation of the opinion would still be a necessary step in the decision-making process, and if Mr S lacked the capacity to form the opinion, his overriding wish that Mrs D should in any event keep the gifts would not, in itself, be enough. If, as I think, this approach would be correct if the question were whether to settle the Chancery proceedings, the same must in my view be true where the question is whether to continue them at all. It cannot be enough for Mr S simply to say that he wishes Mrs D to keep the money which he gave her, and that no action of any kind should be taken to recover it.

Although Professor Howard, Professor Beaumont and Dr Barker were the only witnesses to give oral evidence, and although their reports form the principal and most recent written expert opinions on the issue of Mr S’s capacity, a number of earlier reports were included in the trial bundle, and I will refer to them briefly by way of background.

The report of Dr Robert Powell dated 16 July 2007

Dr Powell was a consultant psychiatrist working for the Central and North West London Mental Health NHS trust. He visited Mr S at home on the evenings of 21 May and 1 June 2007, each visit lasting for around 2 hours. He was asked to carry out an assessment of his mental health and capacity by Dr S Prasad, who at the time was Mr S’s GP. In his report dated 16 July 2007, which was addressed to Dr Prasad, Dr Powell recorded his understanding that the assessment had initially been requested by Mrs D, because Mr S’s family were concerned that he had given away much of his wealth over the previous two years and they were worried that he might lack the mental capacity needed to make such decisions.

On the first of his visits Dr Powell met Mrs D, and he arranged that Mr S’s daughters, A and R, should be in attendance on his second visit. He also had the benefit of correspondence and telephone conversations with the solicitors then acting for Mr S and R, and with representatives of Brent Social Services.

The report impresses me as a careful and thorough piece of work. It set out Mr S’s past medical history, his current medication, the scale of the payments made by him to Mrs D (which Dr Powell was accurately informed amounted to over £500,000) and Mr S’s personal history as recounted to him by Mr S on his first visit. The description is far too long to cite in full, but I single out the following passages:

“When I asked him why I had been asked to come, he prefaced his response with a description of [Mrs D] as “An embodiment of compassion, kindness and courtesy”. He went on to say, “My daughter thinks I’m out of my mind and I need to be seen by a psychiatrist because I have given my money away. This whole trouble started with money and I am now so tired of it that they can have it all. I’m a very lonely man – I don’t have friends. I am not very sociable and I like to keep myself to myself”.

…

He then informed me that a month ago he decided to sell his remaining shares because “I felt I was getting old and I should reduce my holdings and savings. I gave some to [Mrs D] – I must tell you, she has been very kind to me: her kindness, magnanimity, generosity has been very great so I gave her some money”. I enquired how much that would have been and he said it was roughly £300 - £500, then revised this to say it was more like £1,000 and finally settled on around £150,000 to £200,000.”

During his second visit, Dr Powell asked Mr S questions about his domestic and care arrangements, to which Mr S replied:

“… that he had been living alone at this address since 1982 and that he has always done his own housework. He went on, “But I have a friend, [Mrs D]. She comes three to four times a week. She helps me with the housework – she has been a tower of strength for me and I can never repay my debt to her. She has been an embodiment of compassion and kindness. She dresses me and undresses me and to show my gratitude I gave her some money - £5,000 – no - £50,000 – and my family were very displeased and they took the view that she exerted undue influence.” (I asked which members of his family had expressed such a view and he told me that it was his daughters). He went on, “But nothing could be further from the truth – in fact, every time that I gave her money she said, “No, give it to your children, give it to your children”. I had to force the money on her. You see, I get very lonely and [Mrs D] very kindly offered to accommodate me – [Mrs D] offered that I come and live with her and I was looking forward to it. But because of all these accounts of dishonesty she is fed up”.

Mr S went on to state, clearly and without prompting, that he would very much like to live with Mrs D because he would have companionship and friendship; and he repeated this view when Dr Powell again asked him where he would prefer to live in the presence of his two daughters. They found this hard to understand, and remonstrated with their father, to which he replied that Mrs D would have him to live with her because of “personal chemistry, compassion and kindness”.

Under the heading “Mental state examination”, Dr Powell said this:

“On both occasions that I visited, I saw him both sitting out and in bed. He was alert, appropriately behaved and extremely polite. His speech was spontaneous, accented, very deliberate, slow with a rather old fashioned style of usage, and of normal volume and syntax. There was no disorder of the form of his thought. He made good eye contact and we enjoyed a good rapport. … His affect was rather depressed. There seemed to be no psychotic or obsessive-compulsive features.

On cognitive testing, he showed marked impairment of long and short-term recall and was disoriented for times. He had difficulty with attention and concentration, scoring only 2/5 on spelling WORLD backwards and he had difficulty naming unusual items, such as the clasp on my watch. He had difficulty repeating a short phrase and showed ideational and constructional dyspraxia … There was evidence of perseveration (such as in repeatedly using 1930 as his siblings’ dates of birth). On the Mini Mental State Examination on 21 May, he scored 20/30 and on the Clock Drawing Test, 1/5. On 1 June 2007 these scores were 17/30 and 1/5 respectively.”

Dr Powell then set out his opinion under a number of headings. He concluded that Mr S was suffering from “a dementia of moderate severity”, and that in addition his heavy alcohol use might have caused brain damage. He recognised that his growing dependence on Mrs D would have made him “susceptible to exploitation by others and [Mrs D] in particular”, but he added that, apart from the circumstantial evidence of large sums having passed between them, he was not aware of any evidence that she had attempted to coerce him during the last two years. On balance, he doubted whether Mr S had testamentary capacity at the time of their interview. He also thought that Mr S was probably no longer able to manage his affairs independently, and had become vulnerable to exploitation. He therefore recommended that Mr S should be referred as soon as possible to become a patient under the Court of Protection.

The report of Dr O V Briscoe dated 20 July 2007

In July 2007 Dr O V Briscoe, FRCP, FRC Psych, a consultant psychiatrist, received instructions from the Public Guardianship Office to visit Mr S and produce a report. The questions on which he was asked to give his opinion included whether Mr S was able to look after his own affairs, and whether he currently had testamentary capacity. This report, too, seems to me a thorough and professional piece of work. Dr Briscoe set out the information available to him, including conversations with R, A and Mrs D and with a number of people who had been involved in Mr S’s medical and social care. He had also seen a copy of Dr Powell’s report. His visit to Mr S took place at Charing Cross Hospital, and lasted for one hour. The comments which Mr S made to him about Mrs D appear to be broadly similar to those recorded by Dr Powell, although he was unable to say how much money he had given her, whether as a lump sum or instalments, or for what particular purposes. A little later, however, he said that his purpose had been to make provision for her old age, and he had advised her about how to invest money he gave her. Even if she offered to return it, he would not take it back.

Dr Briscoe’s conclusions on the issues of Mr S’s ability to manage his own affairs and his current testamentary capacity were as follows:

“[Mr S] is showing signs of some cognitive decline, though not to the extent of not knowing his whereabouts or the approximate date. He is not capable of some more sophisticated mental activities such as number reversal or subtraction or word reversal. He is clear about where he wants to live, what provisions are to be made for his funeral, and whether relatives should be allowed to attend to his body after death. He does not appear confused in ordinary conversation about the subjects which matter to him.

To be set against that he does not appear to know the details of his financial affairs, he cannot read bank statements, cheques, or other statements about his finances, and [Mrs D] reads them to him. One is seeing him now at his best after rehabilitation at Hammersmith Hospital and Charing Cross Hospital. His present condition would not be nearly so good were he to be living alone in a bungalow. He is limited in mobility. His blindness would be a serious handicap if he tried to cook or if he were alone at night when he could easily become disorientated. He has fallen in [Mrs D’s] house. I do not think one could separate [his] mental ability from his physical ability. He is simply an elderly, frail, vulnerable person with a deteriorating mental state. He would not be able to read documents or know what he was signing. Unless bills or letters were read to him he would not know what they were. So overall I think that for a combination of physical and mental incapacity he is unable to manage his own affairs now, both financial and others …

[Mr S] does not appear to know the extent of his affairs, or his regular income. He told me he has sold all his assets but I am unclear whether this is true. He would however be capable of understanding the extent of his assets if they were explained to him at the time of making a Will now. He has been punctilious in the past about finances, advising [R] about her finances and he would understand his own once explained. He knows that he had dependants, [R and A] and perhaps one or more of his brothers, but he does not want to make a Will in their favour, apparently possibly he is still angry at what he thinks was their rejection of him at a time of need. I think it is likely therefore that if he were to make another Will now it would be much the same as the Will he made a year ago, and that it would be in favour of [Mrs D] … I would say that he had testamentary capacity now.”

The report of Dr Marilyn Cook dated 16 March 2008 and her statement of 13 April 2008

Dr Cook is a consultant in old age psychiatry who was instructed by Judkins solicitors, on behalf of R, to examine Mr S and form an opinion of his current mental capacity, including in particular his testamentary capacity. She was supplied with the earlier reports of Dr Powell and Dr Briscoe, and spoke with a representative of the Official Solicitor. She interviewed Mr S at his home on 16 March 2008. The interview lasted a full hour, and was conducted in private. After the interview Dr Cook discussed Mr S’s current care arrangements with R. The interview was twice interrupted by Mrs D, who arrived unannounced having used a key to enter the property.

Dr Cook’s report is relatively short, but like all the reports of interviews with Mr S it contains material of value which helps to fill out the overall picture. I cite the following extract:

“[Mr S] was sitting upright in his bed and was fully co-operative with my interview and remained mostly focussed throughout the hour long assessment. Significantly he was aware that as he put it “I have a tendency to forget”. He also expressed his understandable frustration that he cannot walk unaided and can no longer read his books which were his main expenditure before his health failed. He told me that although he accepted his current situation, he prayed and yearned for a quick and painless death every day his head hit the pillow. On formal cognitive testing it was not possible to administer the Mini-Mental State Examination in full on account of his visual impairments and motor disabilities. However, he was fully orientated in time and place giving his correct post-code. He recalled my name after 15 and 30 minutes along with 2 out of 3 other new words. Thus his short-term recall is still functional. He was conversant with current world events through listening to Radio 4 he claimed but he could not give me the Christian name of the Prime Minister but immediately recognised it from 3 given possibilities. This pattern of cognitive impairment is in keeping with the original diagnosis of Multi-Infarct Dementia and appears not to have progressed beyond the moderate range of severity as yet.

…

He was equally definite in stating that the “gifts” to [Mrs D] must remain with her because they were given to reward her compassion and kindness. However, when I specifically enquired what value the gifts had been, he estimated around ten thousand pounds maybe a few thousand more or less. He appeared shocked when I informed him that he had “gifted” over half a million pounds to her. He acknowledged that he was indeed distressed by talking about the money and apologised to me saying “I cannot get my head round it” …”

Dr Cook’s opinion was that Mr S no longer had the necessary mental capacity to manage his financial affairs. She said that she would support the making of an application for a statutory will to benefit his daughters. She expressed adverse views about Mrs D’s conduct and influence on Mr S, in language which may be thought rather partisan.

Despite her suggestion that a statutory will should be made for Mr S, Dr Cook was evidently asked to reconsider the question of his testamentary capacity, and on 13 April 2008 she accompanied Mr Judkins on a visit to Mr S, presumably arranged by R, with a view to the preparation and execution of a will by him. In a signed statement made by her on the same day, Dr Cook recorded what happened during the visit. She satisfied herself that Mr S had the requisite testamentary capacity. Mr Judkins prepared a will, which was based on a draft which he had brought with him but was altered to take account of specific instructions from Mr S. Mr S expressed himself as very happy with the will, which was then executed and witnessed by two neighbours.

Dr Cook’s statement includes the following passage:

“8.

[Mr S] did not appear to realise that he had no savings at all left although he did appreciate he had given money to [Mrs D]. [He] appeared to consider this was not a problem because he had pensions in excess of £1,000 each month. Mr Judkins and myself then asked him about how he would fund his future care needs now that he didn’t have any savings and if it was the position (as was very likely) that there would be a monthly shortfall in his income if he was to remain living at the bungalow and/or indeed go into a nursing home. He then said that [R] would take care of this because she was his deputy. We explained that she would but if there was not enough money for her to pay for these needs (because he had given his money to [Mrs D]) she would not be able to. [Mr S] considered this point very carefully and then said that he would want [R] to “negotiate” with [Mrs D] to pay them.”

Professor Howard’s first report dated 8 April 2008

Professor Howard was instructed by Mrs D’s solicitors, Hunters, to examine Mr S and provide a report dealing with the following issues: whether Mr S had testamentary capacity to execute a will in February 2006 (the date of his earlier will in favour of Mrs D), whether he had capacity to make substantial gifts of money to her in 2006, and whether he currently had testamentary capacity and capacity to make decisions about who should be allowed to visit and have contact with him. This last question arose in the context of proceedings which were pending in the Court of Protection in relation to his contact with Mrs D. Professor Howard examined Mr S at his home on the evening of 3 April 2008. He was supplied with the reports of Dr Powell, Dr Briscoe and Dr Cook, and witness statements filed in the Court of Protection proceedings by R, Mr Judkins and Mrs D.

Professor Howard summarised his views at the beginning of his report:

“In summary, I found that [Mr S] was moderately cognitively impaired and that difficulties with his memory dominated the picture of deficit while his language and reasoning abilities were relatively unimpaired. Having read some of the papers in this case, on meeting him I was surprised by his eloquence and apparent grasp of the issues involved. In my opinion (a)[Mr S] currently has testamentary capacity and had this in February 2006, (b) he had capacity to make the gifts of money to [Mrs D] in 2006 and (c) [he] has capacity to make decisions regarding who should be allowed to come and visit him at his home.”

Professor Howard described his examination of Mr S, which had lasted for 90 minutes. He found him “to be a charming and highly socially skilled man and it was very easy to achieve a friendly rapport during interview”. Mr S told Professor Howard about his childhood in Fiji, and gave him “a very interesting and relatively sophisticated account of the background to the tensions between the ethnic Fijian and Indian populations of the island”. Professor Howard included a number of verbatim quotations of things said and answers given by Mr S during their interview, in order to give “some impression of his ability to use language to express himself”. For example, at the end of his account of the ethnic tensions in Fiji, Mr S told Professor Howard:

“I can understand the Fijians’ grievance. No one relishes the idea of outsiders coming in and being more prosperous and successful than the natives.”

Mr S described his career in the judicial department of the Fijian Civil Service, and his arrival in the UK in 1962 when he joined the War Office (as it then was) as a clerical officer. He described his marriage, its subsequent breakdown and his estrangement from his daughters. He could not recall any particular incident that had led to the estrangement, and said:

“With the passage of time the relationship became cool and I made no attempt to rekindle it. I’m a bit of a fatalist you see. A strength that I have is my acceptance of things – good, bad or indifferent.”

Professor Howard administered the Mini-Mental State Examination, on which he scored 15 out of a possible 27 points which indicated “a moderate level of cognitive impairment”.

Professor Howard questioned Mr S about his relationship with Mrs D. The following passage, in particular, is in my view significant:

“I asked [Mr S] how he would describe [Mrs D] and he replied:

“As a very kind, compassionate, caring human being.”

He told me that he had met her when she had been working for a firm of solicitors called Sayer Moore. When I asked him what he thought about the concerns that had been expressed about their friendship he said:

“I reject this with all the contempt and vehemence I can. I am 75 and not a child to be manipulated. Poor Jane is blamed by my daughter unfairly that she has abused my trust. She did nothing of the sort. I was so overwhelmed by her kindness, that to show my appreciation and gratitude I gave her a small sum of money”.

I suggested to [Mr S] that he had actually given [Mrs D] a considerable sum of money and he responded:

“What price can one put on compassion and kindness?”

When I asked him if he could remember approximately how much money he had given to [Mrs D] he was unable to do so. When I told him that my understanding was that he had given her something in excess of £500,000 he said:

“That does not surprise me.”

I asked him that, if he had this £500,000 in his bank account now and knew that he was in contact with his daughters, would he still wish to gift this to [Mrs D]. He responded:

“Undeniably, sir. Without any doubt. The money I gave Jane was not as a result of a memory loss or a manipulation. It was a large sum of money, I accept that, but I haven’t the slightest doubt in my mind that what I did was right. It hurts me that aspersions are cast at Jane that she manipulated me.”

I asked [Mr S] if he had expected or hoped to gain anything from [Mrs D] in return for the gifts. Had he, for example, expected that she would have him to live with her or would feel obligated so that she would continue to visit him? He responded:

“I made no conditions as to what she should do. I told her “You must secure your future by arranging pensions – old age is not far off for any of us”.”

He recalled advising her to buy a property to rent out as a potential source of income.”

In the section of his report dealing with current testamentary capacity, Professor Howard assessed Mr S’s understanding of the act of making a will and its effects, his recall of the extent of the property of which he was disposing, and his appreciation of the claims of others on him. Under the latter heading, Mr S said that he wished his daughters to be sole beneficiaries of his proposed new will. He then explained his reasons for taking this view:

“When I asked if he wanted to leave anything to [Mrs D] he replied:

“With the benefit of hindsight I think I have been more than generous to Jane and that this was at the expense of my daughters. I now propose to put that right.”

I pointed out to [Mr S] that, as things would stand with the proposed Will and given the amounts of money that we had just discussed in relation to the value of his house and the size of the gifts he had made to [Mrs D], [Mrs D] would have received more than both of his daughters put together. I suggested to [Mr S] that some people might say that blood was thicker than water and consider that it was unfair for a friend to receive more from him than his daughters. His response to this was:

“I am happy with these dispositions. Jane has been good to me, more than I can repay. In answer to blood is thicker than water I would say that there was a long period when I was not in contact with my daughters and was not aware of their existence. This changes everything. If there had not been a rupture in our relationship it would have been different.”

When I asked [Mr S] what he would want to do if he was making his Will not having already given the money to [Mrs D] and knowing that his house was worth £300,000. His answer was:

“The same. I would give Jane £500,000 and the rest between the daughters.””

Professor Howard’s conclusion was that Mr S had testamentary capacity:

“In my opinion [Mr S] had testamentary capacity when I examined him. He understood the nature and effects of a Will and could recall the contents of the existing Will that he now wants to replace. He could recall that his house and his pension contributed the bulk of his estate. Although he could not recall the market value of his bungalow, once he had been reminded of this he was able to weigh the figure against the amount of money that he had already given to [Mrs D] and come to an understandable decision that he could logically defend about the relative amounts of money that he had already, or would want to give to [Mrs D] and his two daughters. He was able to recall the names and dates of birth of his daughters and could recall his grandchildren and that he had surviving siblings in Fiji. He was able to give cogent reasons as to why he now wants to make his daughters sole beneficiaries of his Will and not make any further dispositions to [Mrs D].”

Professor Howard’s second report dated 10 June 2009

I now move on to the reports which post-date the commencement of the Chancery proceedings, and which were prepared to assist the court on the question which I now have to consider. I begin with Professor Howard’s second report, dated 10 June 2009, which was prepared in connection with Mrs D’s application to the Court of Protection of the same date. Professor Howard’s instructions were contained in an email from Hunters dated 1 June 2009, in which Mr Richard O’Halloran, the partner with conduct of the matter on behalf of Mrs D, said this:

“We now wish to make an application to the Court of Protection to decide whether [Mr S] should have been consulted in the decision to commence [the Chancery proceedings] and asking the Court of Protection to appoint a visitor to meet [Mr S] and ascertain whether he has capacity to decide whether the proceedings should be pursued or compromised and, if so, on what terms. We believe that the Deputy did not discuss the matter with [Mr S] before deciding to issue the [Chancery proceedings] on his behalf.

I am attaching a copy of the Witness Statement of [Mrs D] which sets out the basis for her application.

When issuing the application the Court of Protection require form COP3, “Assessment of Capacity” to be completed, a copy of this form is attached.

Would you please therefore let me know whether you would be able to see [Mr S] at short notice in order for you then to complete the form COP3 and to provide us with a short report on whether in your view [Mr S] has the capacity to decide whether the Chancery proceedings should have been issued in January … and to express his views about the matter.”

The relevant parts of the application form were duly completed by Professor Howard, with adjustments to the standard form to make it clear that in his view Mr S did have the requisite capacity. The key views expressed by him in section 7 of the form read as follows:

“He has a very severe impairment of his recent memory most likely consequent upon heavy alcohol consumption in the past.

In my opinion he has retained capacity to make decisions about whether or not [the Chancery proceedings] should have been issued … as well as on the further conduct of the proceedings including whether or not they should be continued.

He has a good understanding of the functions of the Court of Protection and the Chancery Division of the High Court. With prompting he is able to recall and understand and explain the gifts made to [Mrs D] in 2006, his motives for making these gifts, the dispute between his daughter [R] and [Mrs D] that has arisen as a consequence and the relative magnitude of these gifts and the assets that he is leaving his daughters through his Will.

Although he is unable to recall unaided the amount of money involved in the 2006 gifts and the precise nature of the dispute that has arisen between his daughter [R] and [Mrs D], he clearly recognises the facts around these areas when they are given to him and is able to retain them for some minutes during a conversation.

Once he has been reminded of the facts of the situation: the nature and extent of the gifts made to [Mrs D], the reaction of his daughter [R], the allegations made about [Mrs D] and the current approach to the [Chancery proceedings] he is very obviously able to weigh this information and use it to make a decision about whether or not he wants the Chancery Division case to proceed. His reasoning and abstract thinking skills are well preserved and he has a detailed knowledge and understanding of the jurisdiction and workings of the Court of Protection and Chancery Division.

Despite his marked memory problems, [Mr S] is a highly articulate and I would even say eloquent man. His ability to communicate his decisions is excellent.

…

During the course of my assessment [Mr S] expressed in the most forceful terms available to him his objection to the issuing of the Chancery proceedings.”

In his accompanying second report, Professor Howard recorded that it was based on an examination of Mr S that he had carried out in his home on the evening of 8 June 2009. The examination took just under one hour. Mr S looked physically frailer than he had when Professor Howard first examined him in April 2008, but his social manner remained unchanged and Professor Howard found him “to be charming, articulate and highly emotionally expressive”. His performance on the Mini-Mental State Examination was very similar to his performance on the previous occasion: this time he scored 14 out of a possible 27 points.

The report then continues:

“When I asked [Mr S] if he could tell me why he thought that I had been asked to make an assessment of him he told me:

“It has something to do with [R]. She has made a complaint about Jane and I am very hurt by this. It is heartbreaking to me sir, I find it pathetic”.

He was initially unable to recall that the dispute was about the gifts of money that he had made to [Mrs D] but when I reminded him of this in the most general terms he seemed to immediately recognise the information and said:

“[R] creates a fuss about this money business. She thinks that I gave Jane a lot of money and she wants to recover the money. She [Mrs D] didn’t ask for the money. I gave whatever I did of my own free will with no pressure or coercion. The wearer knows where the shoe pinches – that means I know of the courtesy and support I have received from Jane is unquantifiable. I would fight against this tooth and nail in the Court against [R]. The money is mine. The prerogative of what I do with it is mine. Nobody has the right to tell me to give X amount to so and so.”

I asked [Mr S] if he could tell me the difference between the Court of Protection and the Chancery Division. He was able to give very clear definitions of their roles as follows:

“The Court of Protection is for people who are incapable of managing their affairs so that their affairs are looked after by the Court of Protection. You make an application if a person is weak and incapable of managing their affairs and the Court will take over the administration for them. Chancery is the main division in the Queen’s Bench where they deal with wills, land, probate, property and such like.”

[Mr S’s] carer spent about ten minutes with him during which time I left his bedroom. When I returned to him he was able to recall my name and when I asked him if he could tell me why I had come to see him, his response was:

“[R] has complained that Jane has robbed me or is robbing me. She wants to take Jane to Court which I completely oppose and I am against it.”

I asked [Mr S] who his current visitors were. He told me that his daughter [R] visits him every Wednesday and that his daughter [A] comes to see him about once per month. He told me that [Mrs D] visited at least once per week and was able to recall, although she hadn’t been in the room with us for around 30 minutes, that [she] was using a crutch to walk. He told me:

“She has had an operation on her feet and despite this she still comes to see me. I find this very moving.”

[Mr S] was initially unable to tell me how much money he had given to [Mrs D], at first telling me that he thought it was probably a few hundred pounds. I told him that I understood that the sum was several hundred thousand pounds he appeared surprised, but told me that he still felt he owed her a debt of gratitude that money alone would not repay. He was able to tell me without any prompting that [R] collects his pension for him and that his daughters will be the beneficiaries of his Will. When I asked him – as I had during my previous assessment – if he thought it was right that [Mrs D] should have received more from him than both of his daughters put together, he told me that this would be what he would wish. When I asked him how he would divide a fortune of a million pounds if he had it between [Mrs D] and his daughters, he told me that he would want to give a “sizeable proportion to Jane. I would leave her half the million”. When I asked if he would really want to leave Jane more than his daughters in this way, he answered: “Yes, unhesitatingly.””

Professor Howard then summarised his opinion as follows:

“Opinion regarding [Mr S’s] capacity to decide whether the Chancery proceedings should have been issued in January and to express his views about the matter

It would be my opinion that [Mr S] does have sufficient capacity to decide whether or not Court proceedings should or should not be issued against [Mrs D]. Although [his] memory is extremely poor, if prompted he quickly recognises the facts and issues involved. With prompting he recalls the gifts and his reasons for making them, the fact that his daughter [R] is trying to recover the money and the current Court proceedings. He is able, without any prompting, to recall the jurisdictions and functions of the Court of Protection and the Chancery Division. Once he has been reminded of the facts of the situation in relation to the Chancery case he is able to retain that information for a matter of several minutes during a conversation. [His] reasoning and abstract thinking still are very well preserved and he is able to use and weigh the information that he can retain for several minutes and use it to make a decision about whether or not he wishes the case to proceed. Finally, his language skills are also well preserved and he is able to articulate very clearly the decision that he has made.”

At the end of this report, as at the end of his previous report, Professor Howard set out a declaration and statement of truth in a standard form for an expert witness.

The report of Dr Jan Falkowski dated 15 October 2009

Dr Falkowski is a consultant psychiatrist at the Royal London Hospital. He was instructed on behalf of R to prepare a report on Mr S, based on the following written materials: the judgment of Senior Judge Lush dated 28 September 2007; the reports of Dr Powell, Dr Briscoe, Dr Cook and Professor Howard; the statements of case in the Chancery proceedings; and Mrs D’s application to the Court of Protection issued on 6 July 2009, together with her witness statement in support. Dr Falkowski was not instructed to examine Mr S, and did not do so. His report was based solely on the information contained in the papers made available to him. His conclusion, based on a brief summary of the material before him, was that Mr S did not understand why the Chancery proceedings were being brought, that he did not have the capacity to understand the information involved, or to consider it, and that he did not understand the impact the sums of money involved could have on his future care or needs. Since this report was not based on any first-hand knowledge of the case, and since Dr Falkowski never met Mr S, the weight that I can attach to it is inevitably very limited, and neither side sought to rely upon it at the hearing.

The report of Dr Barker

At a directions hearing on 20 October 2009 I ordered that a report should be prepared by a Special Visitor of the Court of Protection under section 49 of the 2005 Act, on the issues whether Mr S had capacity to decide whether the Chancery proceedings should be continued and whether he had capacity to enter into a compromise of the claim (and, if so, on what terms). Among my concerns in making this order were, first, that Mr S should be examined by an expert who was independent of the parties, and, secondly, that when the examination took place Mr S should be free from immediate influence by either Mrs D or R. The order therefore contained provisions that for 14 clear days before the examination took place Mrs D should not contact Mr S in any form or manner, and that during the same period R should not speak to him about the Chancery proceedings or any of the issues relating to them. The schedule to the order set out the material to be provided to the Special Visitor, and an agreed list of five specific issues for him to address, as follows:

The Special Visitor who prepared the report was Dr Andrew Barker, who is a consultant psychiatrist and fellow of the Royal College of Psychiatrists. He interviewed Mr S at his home on Saturday, 21 November 2009 for approximately an hour and a quarter. His report, dated 2 December 2009, is in my view an admirably well-organised and comprehensive document.

Dr Barker began his report by summarising, in some detail and with perceptive comments, the information available to him from the documents in the case. These included all of the earlier reports which I have mentioned and the witness statements in the Chancery proceedings. In view of the adversarial nature of the case, Dr Barker wisely said that he had taken little information from the witness statements. He did, however, refer to some handwritten letters from Mr S dating from 2000 and 1998 which R had exhibited to one of her statements. He recorded that one of these letters, to R herself, indicated Mr S’s “strong views on his daughter’s financial prudence”. In this letter Mr S had given his opinion on a mortgage that R appeared to have taken out, commenting that in his view she had paid too much for it and advising her to shop around on the web for cheaper alternatives. He had advised her about pension payments and national insurance contributions, and recommended her to “fill the pension pot to the brim for your old age security”. He had expressed strong views that she should be self-reliant and look out for herself and her son.

Dr Barker then described the information which he had derived from his interview with Mr S. This section of his report is too long to quote in full, but I will cite some extracts from it:

“2.2.2

… His response, which he repeated in very similar vein on several other occasions during the interview, was that whatever money he had given [Mrs D], was of his own volition. There was no pressure or strain brought to bear on him to do so. He repeated that it was voluntary, of his own free will, with no constraint and no pressure.

…

2.2.4

… I asked him if there had been any times that he had had a rift or a disagreement with his daughters. He said that there had been no rift though he might have had an occasional disagreement, but he would put it no higher than that. He said it was the sort of disagreement that families normally had. I told him that I thought I had read that he might have had a rift or been estranged, or had a disagreement with one or more of his daughters. He denied this, saying that perhaps he wasn’t feeling well when he declared this. He denied that they had ever fallen out to seriously affect their relationships …

2.2.5

I asked him to tell me a little about [Mrs D] he could not tell me how he got to know her. He thought that perhaps she used to come and look after him, and said that he had had nothing but courtesy, kindness and consideration from her … He thought he had perhaps known her for five-six years, and that she had been visiting continuously. He said that she had become a dear friend and that he had valued her friendship tremendously …

…

2.2.7

At the end of this section of the interview I asked him about [Mrs D] again. He told me that he could not recall how they had met, but she visits 2 or 3 times per month. He told me again that ever since he had known her, she had shown nothing but courtesy, kindness and goodwill. “She has been a rock, just like my daughter”.

2.2.8

I asked him how he managed his finances. He said that he got a state pension and a little private pension, though could not recall how much. He thought that he was comfortable, that he had more than enough. On further questioning, he estimated that he had an income of £40 per week … I asked him what his estate was worth, checking to see he understood this concept. He thought he had savings of approximately £15 - £20,000, and that [R] would know. He didn’t know how she looked after this money in terms of what accounts or shares or financial mechanisms she used. He thought his bungalow was worth £40,000.

2.2.9

I asked him whether he recalled giving [Mrs D] any money. He said, yes he did remember, and that it was unsolicited, voluntary, commenting that she was reluctant to accept it. He told me that he had given her money on no more than two occasions, to express his gratitude. He said the money had been given for the care and kindness which she had shown him and continues to show him. He thought the last time he had given her any money was 3 or 4 years previously, that he didn’t know whether she needed it, and spontaneously said that she did not ask for it. He thought in total between the two occasions he might have given her between £300 and £400. I told him that one of the concerns the Court had was that he might have given her substantially more than that. He denied this: “In fact it could be less”. He felt that the money was a small amount. When I again said that the Court thought that he might have given her half of his wealth, he seemed unperturbed by this, saying “oh yes, that could be right”. I pointed out that if he thought he had given [Mrs D] £400 and his house was worth £40,000 then that seemed a big difference in proportion to giving her half of his estate. He found it difficult to follow my “proportion” line of reasoning, or percentages. He denied that it would be of any concern to him if he had given her half of his estate, though could not recall having done so.

2.2.10

He said he had not put [Mrs D] in the will at all, leaving his estate to his two daughters. I asked him how he would divide his estate all together, if he had a million pounds to share between his daughters and [Mrs D] over the previous and terminal 5 years of his life. He told me that he would give his daughters two thirds, and one third to [Mrs D] …

…

2.2.13

I asked him a bit about his finances and future; that given his increasing age and frailty that he might one day need to move to a care home and would need finances to support this. He said that he would need money if he went into a care home, and that his daughter would come to his aid in every way possible. He said he had not made provision himself for his future care and that it would be his daughter’s responsibility. She would take care of it. “She will see to it. Whatever money I have she will use it, and if there is any shortfall, she will see to it”. He insisted that she would be happy to use her own money as they had a very good relationship. I queried the potential unfairness in this if he had given a large proportion of his wealth to [Mrs D] and then his daughter [R], had to find money out of her own purse to pay for his future care. He did not appear to understand the point I was making, again reiterating “Whatever I have given to Jane, I have given to Jane”. He also reiterated that his daughter was his life and support, and that he relied on her, seeing to his needs and requests.

2.2.14

In order to check out his memory and consistency within one conversation, I went back to asking him how much he felt he had given [Mrs D]. He said he would guess that it was between £150,000 and £200,000. When I told him that earlier in the conversation he had told me he had given her £300 - £400, he denied this, saying that the most he had given her was £200 - £300. He told me that he thought the house was worth £35,000. He told me on this occasion that he had given [Mrs D] sums of money on 3 or 4 occasions, and that he hadn’t given her a lump sum – “it was bits and pieces, here and there”. He reiterated “Whatever I gave Jane, was from my own volition, no constraint and with no compulsion”. He repeated that it wasn’t a large amount of money that he had given.”

Dr Barker also administered a Mini-Mental State Examination, in which Mr S scored 17 out of 30. Like Professor Howard, he left out the last three questions because of Mr S’s visual impairment and difficulty with writing, so the score might be more fairly represented as 17 out of 27. Dr Barker also asked Mr S to list as many animals as he could in one minute, and he scored six, with two repetitions of words. He then asked him to tell him as many words as he could think of beginning with the letters F, A and S in a minute. His scores on this last test were eight (plus four repetitions), five (with three repetitions), and nine (with one repetition).

Dr Barker then turned to the specific questions on which he had been asked to advise. Rather surprisingly, to my mind, he considered the question of “capacity to litigate” not by reference to the provisions of the 2005 Act, but rather by reference to a three stage test contained in guidance issued by the Law Society and the British Medical Association in 2004. In the light of this guidance, he directed himself that if a person is in receipt of assistance and advice in managing his property and affairs, capacity requires him:

Dr Barker then continued as follows:

“3.5

There is consensus from previous psychiatrists that [Mr S] suffers from dementia, either alcohol related or from arterial disease in the brain. I do not have medical records, but I would agree that either or a combination of both is possible. The exact cause is probably not of great consequence in this case.

3.6

Although experts have raised varying concerns about [his] capacity, with mixed views on his ability to give gifts and set up a will, none appear to have formally assessed or explicitly considered [his] frontal/executive functioning, which I think is of relevance and would help explain his sometimes contradictory presentations.

3.7

“Executive” functions of the brain are higher order cognitive abilities that enable the mind to organise and coordinate, necessary for skills such as learning, remembering and attention. Executive functions initiate, sequence and carry through intentions, correct errors and adjust responses accordingly. They also inhibit/stop us from doing things. Executive functions help us generate and select appropriate and ongoing responses.

3.8

The dysexecutive syndrome refers to symptoms and signs caused by frontal lobe damage and loss of healthy executive function … People with impaired executive functioning lose flexibility in their thinking, are less able to consider alternatives and less able to solve problems. Reduction in abstract reasoning reduces a person’s capacity to weigh up alternatives.

3.9

The frontal lobes and executive functions might very reasonably be expected to be affected in either alcohol-related or cerebrovascular disease-related brain disease. [Mr S’s] performance on testing of categories (animals) and the FAS test (screening tests indicating frontal lobe involvement) are abnormal, particularly, in my opinion, in someone who was as skilled with words as [Mr S].

3.10

Frontal lobe functions and in particular executive symptoms are often clinically overlooked as they are more complex to elicit. The Mini-Mental State Examination, the most widely used cognitive test in old age psychiatry, is known to be poor at testing frontal lobe function, and preserved abilities may often give the misleading impression of greater capacity.

3.11

[Mr S] is able to repeatedly say that whatever he did with regard to gifts to [Mrs D] he did voluntarily without compulsion. While his views are important, this does not necessarily indicate capacity to judge the appropriateness of that gifting.

3.12

It seems clear, given the range of sums and range of proportions of his total estate that he believes he gave [Mrs D], and his dependence currently on [R] to manage his affairs, that he does not have capacity to manage his financial affairs.

3.13

His apparent lack of appreciation of the difference the wide variation of sums he may have given to [Mrs D] would have on his estate, both for his own future care needs or his daughters, seems to me to be hugely out of keeping with his apparent very keen judgment and involvement in considering financial affairs and security for family as demonstrated by his letters in 1998/2000. His views then on emotional attachment and dependence may also be of relevance.

3.14

He gave me and other doctors factually incorrect and contradictory statements about his daughters and [Mrs D] (for example numbers of children, how long he had known [Mrs D], which was the eldest of his daughters, how often he saw them). It is difficult to believe in these circumstances that he has a reasoned judgment on the “claims to which the giver ought to give effect”. He did not appear to understand the relevance of fairness in sharing his estate or in his expectations from [Mrs D] and his daughter [R].

3.15

He is also in my opinion vulnerable to influence, as evidenced by his statements to Paul Judkins and Dr Cook in contradiction to previous statements, and in the ease with which he accepts markedly different sums of money as reasonable to have been given. His relative isolation, dependence due to physical disability, cognitive impairment and sensory impairment are all markers for potential vulnerability to influence.”

Dr Barker then briefly stated his answers to the specific questions on which he had been asked to advise. In his opinion, on the balance of probabilities, Mr S did not have capacity to decide whether the Chancery proceedings should be continued, or to enter into a compromise of the claim. Dr Barker considered that Mr S was unable to remember and to weigh up the true value of money; that he had no, or inconsistent, understanding of the circumstances in which he made the gifts to Mrs D; that he had limited and inconsistent understanding of the effects of the gifts on his overall financial position; that he was aware that he might have financial needs in the future, but had limited ability to plan for such needs; and that he did not have a full understanding of the consequences of recovering sums paid, due to his limited ability to understand the true value of the money. Dr Barker concluded with these words:

“However, I would offer the court my impression that at interview, and through my reading of his previous interviews, [Mr S] has maintained a view that he is grateful for the attention and care that [Mrs D] has paid him, and for the friendship she has showed him, and that he intended to give her some financial gift as an acknowledgement of this.”

The third and fourth reports of Professor Howard

At a further directions hearing on 8 December 2009 I heard submissions from counsel for Mrs D and R about the future conduct of the case. I was told that Mrs D, through Professor Howard, wished to put some written questions to Dr Barker as provided for under the Court of Protection Rules, and I gave directions enabling this to be done by 8 January 2010. I also gave permission for R to put written questions to Dr Barker by the same date. I directed that Dr Barker should do his best to provide written answers to the questions by 26 January 2010, and that the application should be re-listed during the week beginning 1 February with a time estimate of 2 hours. I also gave permission to apply, including permission to apply to me in writing, and reserved the matter to myself if practicable.

Despite the basis on which this application had been made, it soon transpired that Professor Howard did not in fact wish to put any written questions to Dr Barker, because in his view their difference of approach was so marked that nothing would be gained by doing so. In January 2010 further written applications for directions were made to me by the solicitors on each side, and on 25 January I directed that Professor Howard and Dr Barker should hold a meeting for the purpose of discussing Mr S’s capacity, and that they should then file and serve a joint statement identifying the issues on which they agreed and those on which they disagreed, and giving a summary of their reasons for any disagreement. I said that unless they were able to reach agreement, they should both attend for cross-examination when the application was restored for further hearing. I directed that the restored hearing should if possible take place before myself, on a date convenient to the parties and the experts, with a provisional time estimate of one and a half days.

Matters then took a rather unexpected turn. Without any further application to the court, and without obtaining the prior agreement of R’s solicitors, Hunters procured two further reports from Professor Howard. The first of those reports (his third) was based upon an examination of Mr S on 16 January. It is fair to say that Hunters had informed R’s solicitors that Professor Howard was going to see Mr S again on that day, but R’s solicitors had objected in writing to any further examination by Professor Howard taking place in the absence of permission from the court, and there was anyway no indication that a further report would result from the visit. The second of the further reports (Professor Howard’s fourth) was completely unheralded.

The third report was intended to provide Professor Howard’s own assessment of Mr S’s frontal lobe capacity. It emerged for the first time in cross-examination that Professor Howard had been instructed to provide this report at a conference with counsel to discuss Dr Barker’s report. The instructions were given orally, and there is no record of them either in the report itself or in any other form which has been disclosed to the court. Furthermore, although Professor Howard was provided with a copy of Dr Barker’s report, and although it was clearly Dr Barker’s evidence about frontal lobe functions which had prompted Professor Howard’s further report, he nowhere mentions it. All that he says by way of introduction to his third report is that the question of Mr S’s capacity was still at issue, and:

“I have been asked to prepare a further report giving my opinion on this point because more than six months have passed since I last examined him and in order to carry out my own examination of the executive functions supported by [his] frontal lobes.”

Professor Howard found Mr S to be in a much better physical state of health than when he had last examined him on 8 June 2009. He appeared animated, and did not appear to become physically fatigued during the hour they spent together. His performance on the Mini-Mental State Examination was again very similar to his previous performance, with a score of 18 out of 27. Mr S had no recollection of their previous meetings, however, and when Professor Howard explained the purpose of his visit Mr S became animated and said this:

“Jane has been a tower of support; a pillar. People will be suspicious. I suppose I can understand their suspicions although erroneous and unjustified. They worry whether undue influence was applied. Whether I was put under pressure. They would ask why I would do this thing? I suppose I can understand why [R] would be concerned.”

Professor Howard continues:

“[Mr S] continued to hold the view that he would wish that the Court proceedings should be stopped. He told me that he could understand why people might think that he had been exploited by [Mrs D] but did not consider himself that this had been the case. He was not able to recall the sums of money involved and his response when reminded of this was very much as when I had seen him before in terms of expressing his wish that the gifts were a reflection of his regard for [Mrs D] and the support that she had given to him and that he would make very similar dispositions if the money were still his to give away.”

Professor Howard then explained the nature of executive and frontal lobe functions:

“Executive functions include planning, judgment, initiation, flexibility, impulse control and abstract reasoning. They are sometimes called frontal lobe functions because they are impaired in patients who have evidence of structural damage to their frontal lobes and because functional brain imaging experiments have demonstrated that healthy individuals activate areas within the frontal lobes while they are performing cognitive tasks that involve them. Although there are formal testing protocols that have been validated for the assessment of frontal lobe functioning and which are usually administered by psychologists who have been trained in their delivery and scoring, there are a number of bedside clinical tests which are routinely used by psychiatrists and neurologists to assess patients with possible frontal lobe damage. These tests include verbal fluency, proverb interpretation, questions about the similarities and differences that exist between objects, and cognitive estimates. An examination of the function of the frontal lobes may also involve an assessment of a patient’s capacity for abstract thought and reasoning and their ability to reflect upon their situation and that of others.”

Professor Howard had administered these “bedside tests” to Mr S, and he then reviewed his performance under each of them in turn. His performance on the verbal fluency tests, which Professor Howard administered last and during which Mr S repeatedly complained of tiredness, was “less than would be expected from a man with his level of educational attainment”, and although his performance on one test was in the impaired range his performance on another was within the average range for an older person. On interpretation of proverbs (a test of reasoning ability, although recognised to be influenced by educational ability and cultural background), Mr S’s ability was in the normal range “and demonstrated a preservation of his reasoning skills that would not be expected in a patient with severe frontal lobe damage”. For example, he had explained the proverb “a stitch in time saves nine” by saying “Procrastination is no good. A job that should be done must be done now to save headaches”. On similarities and differences (a test used to assess inferential reasoning) Mr S’s performance was again normal, as was his performance on cognitive estimates (i.e. questions that require a patient to make estimations of the number or size of some parameter). For example, when asked to estimate the number of camels in Holland he replied:

“Probably 3 or 4 zoos in Holland, each with 3 or 4 camels so between 9 and 16.”

The report then continued as follows:

“Capacity for reflection

On each of the occasions that I have examined [Mr S] I have been struck by his thoughtful and insightful appraisal of his own position and his apparent consideration for other people. The capacity for such thoughtful reflection would be seriously impaired in a patient with significant frontal lobe or executive functioning deficit. When I asked [him] to tell me what he thought the future held for him and what there was about his life that made it worth living he told me:

“I live from day to day. I have no plans. I am completely dependent and reliant upon my daughter [R]. She sees to my well being and welfare. I can never repay my debt to her. The thought of death goes through my mind. When will it come? I yearn and pine for my death. I cannot see the point of my continued existence in this manner and form. I have a good daughter. Her visits give pleasure. Visits from Jane. Now that I can’t read and reading was my great pleasure and I do not like to be read to. Suicide has crossed my mind. I survey the present life and I cannot see an end to it and I say to myself what is the point or purpose? But I have a religious streak in me which says no – there is a divinity that shapes our destiny and it is not for you to decide or be the arbiter of your life.”

I asked [Mr S] if this meant that he would be happy to go off to sleep one night and never wake up again and he responded with great animation:

“This would be a joy. I wish it every night. You have taken something very deeply from my mind.”

[Mr S] was aware of the recent earthquake in Haiti and was clearly distressed by the deaths and suffering that he knew it had caused. As he had previously told me that he was religious, I asked him if he could understand why some people would think that the occurrence of such disasters made it difficult to believe in the existence of God. He responded:

“I have the same doubts myself. I ask myself, where was God? How could he let these things happen? I can’t resolve this. It is a conundrum that remains. If there is a God and he is all powerful, then there is nothing that is beyond him to cure, control and make good. If he allows this sort of thing, then he is a funny sort of God. Not bad, but a mysterious sort of God who doesn’t make any sense to me”.

Towards the end of my examination, [Mr S] asked me if I would mind if he smoked a cigarette. I told him that since we were in his house he could and should do as he pleased. His response was to thank me and to add:

“Yes, but there is such a thing as courtesy and consideration. Smoking is not very popular with many people for good reason and I can understand people’s dislike of smoking. Tobacco is my only pleasure …”

Opinion concerning capacity

[Mr S] has a profound impairment of his memory functions but has well-preserved reasoning and language abilities and remains highly articulate. His overall cognitive impairment, as assessed with the Mini-Mental State Examination appears to have been non-progressive during the 20 month period over which I have been able to examine him and this would argue against a contribution from Alzheimer’s disease pathology to his memory difficulties. My testing of the functioning of his frontal lobes revealed that while his verbal fluency was poorer than would have been expected from an individual with his educational background, he was still able to perform this function at close to the normal level. When I tested other functions of his frontal lobes which are directly relevant to his ability to reason and reflect, he performed within the normal range on these tests. I continue to hold the opinion, given in my second psychiatric report dated 10 June 2009, that [he] does have capacity to make the decision as to whether or not the Chancery proceedings should continue. In order to make such a decision he will need to be initially reminded of the facts of the situation. He is able to retain the necessary information for a period of a few minutes and has sufficiently preserved reasoning abilities to be able to use and weight this information in order to make valid decisions. Finally, his language skills are well preserved and he has no difficulty in articulating decisions that he has made.”

The purpose of Professor Howard’s fourth, and final, report dated 18 March 2010 was to deal specifically with the five agreed questions set out in the schedule to my order of 20 October 2009, and upon which Dr Barker had given his views in his report. Professor Howard’s instructions were given to him at a further conference with counsel on 3 March, and were confirmed in an email from Mr O’Halloran dated 4 March. It appears from the email that Mr O’Halloran had been asked to inform Professor Howard about Mr S’s finances, which he did in the following terms:

“As you know he made gifts to [Mrs D] totalling about £549,000. At the time that left him with about £80,000 in savings and his house … with an approximate value of £270,000. As far as income is concerned he had his state pension worth £13,056 per annum, an occupational pension £1,140 per annum and a private pension £21,432, producing a total pension income of £35,628 plus he got attendance allowance of £44 a week = £2,288 per annum = £37,916 per annum = just over £3,000 a month.”

Professor Howard’s fourth report was based upon a further examination of Mr S carried out at his home on the morning of 13 March. As on the previous occasion, Mr S seemed “animated and bright”, but again he had no recollection of their previous meetings.

The whole of this report is important, and I see no alternative to citing most of it in full:

“(1)

[Mr S’s] understanding of money and its value including in the context of the cost of living

I read out this point to [Mr S] and asked him if he understood what I was trying to establish. He responded by saying:

“Money is a means of exchange without which one cannot get on in life.”

When I asked him how much he thought his food and tobacco cost per week he told me that he had no idea because his daughter kindly took care of things for him and provided everything he asked for.

When I asked him if he knew the value of his house, he told me that he understood it to be worth “about £300,000”. When I asked him what he thought the average weekly working wage in the UK would be, he responded “£200”. I would consider that his estimation of the value of his house was probably accurate. His estimation of the average wage was a bit low, but was of the correct order of magnitude.

I had been given the following details of [his] finances which I explained to him: Gifts made to [Mrs D] £549,000; Savings remaining £80,000; Value of [his] bungalow £270,000; Income from pensions and attendance allowance £3,000 per month. [Mr S] was able to comprehend and retain this information, certainly for several minutes as we discussed the size of the gifts to [Mrs D] in relation to his remaining assets. He was also able to appreciate how significant these gifts had been. When I asked [him] what he thought about the size of the gifts he had made to [Mrs D] he told me:

“It comes as a surprise to me to learn that the gifts were about twice the value of my house. But I did what I did. I have no regret or qualms”.

I concluded that [Mr S] does have an adequate understanding of money and its value and that while he has become unfamiliar with the cost of every day necessities, he was able to spontaneously recognise the significant size of the gifts he had made to [Mrs D], place the magnitude of these gifts in terms of multiples of the value of his home, express surprise that he had been so generous and his satisfaction with the fact that the gift was made.

(2)

[Mr S’s] understanding of the circumstances in which he made the gifts to [Mrs D], including, in particular, the cheque for £301,941 given in August 2006

[Mr S] is unable to recall, in anything other than the very vaguest way, the circumstances in which he made these gifts. He told me that he believed that there had been what he called “a lump sum” and some smaller gifts and he told me that he was “adamant” that the gifts had been what he described as “a spontaneous gesture” in response to his experience of [Mrs D] as someone helpful and genuine.

I concluded that [Mr S] does not have the capacity to independently recall the circumstances in which he made the gifts as a consequence of his memory disorder. However, if he is reminded of the extent of the gifts he is able to explain why he believes he made them.

(3)

[Mr S’s] understanding of the effect of the gifts made to [Mrs D] on his overall financial/asset position including his understanding of the effect at the time the gifts were made

As I reported in point (1) [Mr S] expressed surprise at the size of his gift to [Mrs D] but was quick to add that he did not regret having made the gift. When I asked him what he thought would have been the effect on his overall financial position of having made this gift he told me:

“A good effect. I always had the idea in my head not to pay inheritance tax and the word “offload” is very clearly in my mind. I cannot remember the exact context, but I do distinctly remember I wanted to offload myself of the money that I had.”

When I suggested to [him] that an important effect of these gifts was that he subsequently had less money to leave to his daughters who might very reasonably have expected to inherit the bulk of his estate he told me:

“They can expect what they want. What I do is a matter for me. But I can understand they would be disappointed”.

I asked [him] if he was really happy to have made the gift in the knowledge that this would mean that considerably less money would ultimately be received by his daughters and he indicated that he was.

I concluded that despite his lack of memory for the circumstances surrounding the making of the gifts, [Mr S] does have capacity to understand the effect of these gifts on his overall financial position. He raised the effects upon the reduction of his potential inheritance tax liability without any prompting from me. When I raised the issue of his daughters’ potential disappointment with their consequent inheritance, he was able to understand the reasons why they would be disappointed but expressed his intention that this was the way that he had wished to conduct his financial matters and still did.

(4)

[Mrs S’s] understanding of his present and future financial needs including for care and how these are to be provided for

I reminded [Mr S] that by virtue of the gifts of money that he had made to [Mrs D] he was left largely dependent upon the income that he received from his pensions and attendance allowance to pay for his living expenses and any care needs that he had. If, for example, he had to go into a Care Home, his income might not be sufficient to pay for a really first class one that he would have been able to afford had he not made the gifts. He responded:

“I understand that I have no other means of support but my pension and this house left. I have exposed my vulnerability, I can see that. But this does not trouble me in the least.”

When I pursued this point further with him, adding my observation that some Local Authority-funded Care Homes are somewhat grim and basic and that he might – if he found himself resident within one – come to wish that he had been able to afford something better, he told me:

“No. I would just accept it as things come. It would not worry me.”

I concluded that [he] does have capacity to understand his present and future financial needs, including the costs of care, and that he is able to understand what the effects may be upon his ability to access first class nursing home care in the future.

(5)

[Mr S’s] understanding of the consequences of his recovering or not recovering the sums paid to [Mrs D] in the proceedings whether in whole or part

I asked [Mr S] to tell me what he thought would be the likely consequences for himself, his daughter and for [Mrs D] of the following scenarios and have reported his responses as follows:

1.

Court decides that money should be recovered in whole

Consequences for [Mr S]:

“I would be very embarrassed and hurt if Jane were forced under duress to return the money and I would want to give it back to her. I would have more money, but I would be devastated, sir. You say I may need more money for a nursing home but I will cross that bridge when I come to it. At the moment I do not need extra money.”

Consequences for [Mrs D]:

“She would be disappointed and hurt. I imagine it would cause her a great deal of inconvenience.”

Consequences for his daughter:

“She would be glad if she has been the author of this case. She will feel that much more wealthy and prosperous. But I don’t blame her for this.”

2.

Court decides that the gift should not be recovered

Consequences for [Mr S]:

“No change. Not the slightest bit. I don’t want or need any more assets at my time of life.”

Consequences for [Mrs D]:

“No change in her situation.”

Consequences for his daughter:

“She’ll be disappointed but will just have to bear it. From a different angle I can see that she feels cheated of something that would have otherwise have come to her.

3.

Court decides that the gifts be recovered in part

I asked [Mr S] if he thought that some compromise ought to be made in this way and that if it was to be made, what proportion of the gift did he think should be recovered in order to be as fair as possible to all parties and he told me:

“I don’t like this idea. As I have said I did what I did and I don’t regret it. But if it were the only way out of the current situation, which I deplore, I would consider it and would think that 25% to 30% would be the amount that would be given back.”

When I asked him what the consequences of following this course might be, his responses were:

Consequences for [Mr S]:

“Without doubt I would feel embarrassed. I would have more assets myself.”

Consequences for [Mrs D]:

“She will be hurt, very hurt. I should think it would make a big difference to Jane’s financial position. She might lose her house and I do not want this under any circumstances.”

Consequences for his daughter:

“She will be pleased and know that the money will be hers when I die.”

I concluded that [Mr S] does have a capacity to understand the consequences – both for himself and for others – of recovering or not receiving the gifts made to [Mrs D] as a consequence of these proceedings.

Opinion concerning capacity

[Mr S] has a very severe amnestic disorder but his ability to understand information presented to him, retain it for a few minutes while he can examine it, make understandable and consistent decisions and then express and defend these decisions is sufficiently preserved so that my opinion remains that he has capacity to make valid decisions as to whether or not the proceedings in the current case should be continued. I acknowledge that my approach to the assessment of [his] capacity has involved assisting him by reminding him of the size of the gifts made to [Mrs D] and the presence and extent of his other assets and sources of income. This would reflect my normal clinical practice when assessing capacity in a situation like this where I believe it is [Mr S’s] ability to understand and manipulate information and express his decisions that constitutes capacity and that providing him with the information that he would otherwise not have been able to recall is a necessary component of a fair assessment.”

The joint statement of Professor Howard and Dr Barker

This is a brief statement, signed by Professor Howard on 13 April 2010 and by Dr Barker on 19 April, recording that they conferred by telephone on 21 March to establish the areas on which they agreed and disagreed.

They agreed that Mr S had a dementia, most probably caused by alcohol use and cerebrovascular disease, which was characterised by a profound impairment of his memory, although he also had impairments of his language abilities, motivation, concentration and judgment.

They disagreed about the impact of his cognitive impairment upon his capacity to decide whether or not to continue the Chancery proceedings or to enter into a compromise of them:

“Dr Barker’s view is that the circumstances of the donation of the gifts are complex and there is also evidence of vulnerability to influence. In those circumstances Dr Barker’s view is that the decision to continue the proceedings or to enter into a compromise of the claim requires a relatively high level of capacity. In Dr Barker’s view [Mr S] does not have sufficient capacity to make these decisions because he is unable to recall even if he is reminded, to use or weigh the relevant information as part of the process of making the decision.

Professor Howard’s view is that despite the presence of cognitive impairments, [Mr S] retains capacity to make the decision.”

Professor Beaumont’s report dated 3 June 2010

I come finally to the report of Professor Beaumont, which was obtained on behalf of R pursuant to an order which I made on 31 March 2010. Although I had never originally intended that there should be such a proliferation of expert evidence before the court, it seemed to me that fairness required that R be given an opportunity to seek a further report from an expert of similar standing to Professor Howard, and especially so because of the unilateral action that Mrs D’s legal representatives had taken in obtaining Professor Howard’s third and fourth reports. Although the circumstances in which those further reports had been obtained were unsatisfactory, their content was clearly very material to the issue before the court, and they could not simply be disregarded.

Unlike Professor Howard and Dr Barker, who are both clinical psychiatrists, Professor Beaumont is a clinical psychologist and neuropsychologist. He is currently head of the department of clinical psychology at the Royal Hospital for Neuro-Disability, where he has been based since 1992. Before then he was professor of psychology at the University College of Swansea, having previously held academic appointments in Cardiff and Leicester. He is the author of a number of books on neuropsychology, including one widely used general text, and has written or contributed to over 100 chapters and papers in learned journals. His clinical experience extends over 40 years.

Professor Beaumont examined Mr S at his home on 26 May. Their interview lasted for about one and a half hours, during which Mr S showed no evidence of fatigue and gave no reason to doubt the genuineness of what he said. Professor Beaumont therefore concluded that the results of his examination were both reliable and valid.

At the beginning of his report, he summarised his conclusions as follows:

“In general summary it is my opinion that even if [Mr S] were to receive a very considerable degree of support in exercising his mental capacity, he would not be able to do so in relation to the current matter. As a result of a number of factors, including his poor orientation, his poor ability to reason about novel situations, his severely impaired memory, and the fact that he does not recognise inconsistencies in his own reasoning and does not have an appreciation of the present value of money, then I do not consider that [Mr S] is able to exercise mental capacity with respect to the relevant decisions. He also has a severe deficit in his ability to perform mental arithmetic, even with quite small amounts. I note that a broad range of opinions have previously been reported with respect to [his] mental capacity, but with respect to the opposing views of Professor Howard and Dr Barker as expressed in their Joint Statement of April 2010, I find my opinion close to the opinion expressed by Dr Barker, but in disagreement with the opinion of Professor Howard. The reasons for my opinion are stated in this report.”

In the course of his examination, Professor Beaumont administered a number of psychological tests to Mr S. These tests were:

Professor Beaumont described Mr S’s performance in these tests in section 4.2 of his report, as follows:

“I administered a number of formal psychometric tests to [Mr S], relevant to my opinion with respect to his current capacity. I note that the Mini-Mental State Examination has been previously employed on a number of occasions to assess [Mr S] and while this is a useful brief screening test, it is not specifically designed for the purposes of assessing capacity, and cannot be regarded as more than a rather rough and ready screen. I do not feel that it satisfactorily addresses the issues currently under consideration. I first administered three subtests from the WAIS-III with interesting results. It is difficult to infer [Mr S’s] premorbid general cognitive ability as he was born in Fiji, although he is an ethnic Indian, and came to the UK in February 1962. I am not entirely clear about his occupational history, but I understand that he was a civil servant. It seems reasonable to conclude that [his] abilities in adult life were at least above the average for the population of his age, and it is likely that his abilities were in fact in the High Average range or better. His current level of Comprehension as assessed by the WAIS-III is consistent with this inference. [He] obtained a result on this test of everyday reasoning ability which places him in the High Average range and at the 91^st percentile for the normal population of his age. There appears to be no deficit in this area of his abilities. However, this should be contrasted with the other subtests which I administered to him. On the Similarities subtest which is similarly a test of verbal reasoning [his] result was at the borderline for frank abnormality and at only the 5^th percentile. His Arithmetic subtest placed him in the borderline range and at only the 9^th percentile. Both these results are severely impaired with respect to his inferred premorbid level of ability. The contrast is instructive. When [he] is relying upon previously learned knowledge about the world, as for example in understanding why laws are needed about the employment of children, or why people should pay taxes, then he is able to rely upon his previously acquired knowledge and so perform at a satisfactory level. However, presented with novel problems which require him to reason as in being asked to say how steam and fog are alike, then he is unable to do so. He is also unable to perform more than the most elementary mental arithmetic.

I also administered selected subtests from the RBANS, principally to provide a brief assessment of [his] memory abilities. Again there is an interesting contrast. The Digit Span subtest, which [he] performed within the Average range (44^th percentile) demonstrates that while there is a moderate degree of impairment in his working memory, this is not grossly abnormal. However, the other tests of [his] verbal memory function were all within the abnormal level, and his delayed recall and recognition were all extremely poor … these results clearly confirm what has been previously understood which is that [he] has a severe impairment of his auditory verbal memory. This is, however, in the context of only a moderate impairment in his verbal working memory. I also took the opportunity to administer the Semantic Fluency subtest which was also severely impaired and within the borderline range further suggesting that [he] has difficulties of reasoning and response control, possibly associated with some abnormality of his frontal lobes. It is only possible to calculate one of the indices on the RBANS, from the selection of subtests administered, and this is Immediate Memory. This index is in the abnormal range and at only the 2^nd percentile for the normal population of [his] age.

I administered the Cognitive Estimates Test which [he] decisively failed … I note that Professor Howard (19.1.10) also administered the CET and reports that [his] performance was normal. I have no explanation for this result, which is completely inconsistent with the current result; I can only report that [his] everyday verbal reasoning was grossly abnormal in my examination.

The only other brief test which I was able, reasonably, to administer to [Mr S] was the Rule Shift subtest of the BADS. [Mr S] grossly failed this test, gaining an “impaired” score and demonstrated a severe inability to inhibit salient responses and to demonstrate normal response control. This is a further sign that there may be some frontal lobe disturbance in [Mr S] and that he has difficulty in controlling his behaviour including the verbal responses which he produces, if these are not relatively routine and strongly contextualised.”

In the next section of his report, headed “General issues regarding [Mr S’s] mental capacity”, Professor Beaumont summarised the relevant provisions of the 2005 Act (the only one of the experts to do so) and commented that very helpful advice is provided in the Code of Practice of the Act with regard to the requirement that a person be given “all possible assistance” to enable him to exercise mental capacity. He continued:

“However, this is part of the difficulty in reaching an opinion in this case. From the evidence in my examination, and in the other opinions which I have reviewed, it seems that [Mr S] does have an adequate level of auditory comprehension. He may require a little assistance in the way of the explanation of matters but he essentially has the ability to understand what is said to him within the normal range. With respect to his ability to retain relevant information, it is clear that [he] has a severe impairment of his verbal memory. It has generally been accepted, as the present examination provides clear evidence, that [his] memory abilities are very impaired. Without assistance [his] memory problems would be sufficient to result in an inability to exercise mental capacity, but if [he] were to be given an adequate level of assistance such as having information recorded in a way which would enable him to read it, or listen to it, then his memory deficit might not be a bar to his being able to exercise capacity. Nevertheless, this is a difficult area and should be carefully borne in mind in allowing [Mr S] to exercise capacity on his own behalf. Unless very effective supports were provided to him to circumvent his memory deficit, then he would not be effectively able to exercise capacity. [Mr S] is clearly able to express a decision which he has reached. The problem therefore centres around whether [he] is able to weigh matters in the balance and reach a decision. This is usually the most contentious element of the functional test. Because an individual is not required to make a prudent decision, or one which others would regard as in his best interests, then it can be very difficult to decide whether relevant information has been weighed in the balance in reaching a decision. This is a source of frequent disagreement amongst psychiatrists, neuropsychiatrists, and psychologists. In general terms, it is my conclusion that [Mr S] is not able to weigh matters in the balance normally in order to reach a decision. The evidence for this is his lack of orientation, and his inability to reason about novel questions even in an everyday context, such as is demonstrated by his Similarities and CET test results. He also has difficulties in control of his thinking as evidenced by Rule Shift and a problem in reasoning about quantities, and especially numerical quantities as evidenced by Arithmetic and also by the CET. Although whether [he] can exercise mental capacity will be dependent upon a specific type of decision, in general the test results indicate that he lacks the cognitive abilities which enable him to weigh matters in the balance in a normal manner in order to reach a decision. Even though [he] might receive all the possible assistance in enabling him to have the relevant information at hand, the fact that he is unable to normally engage in the process of reasoning about a decision results in the fact that in general he is likely to lack mental capacity.”

In an earlier section of his report, Professor Beaumont had given his opinion on Mr S’s orientation and concluded that he lacked correct orientation for date, place and current affairs.

Professor Beaumont then turned to the five specific questions which had already been considered by Dr Barker and (in his fourth report) by Professor Howard. Once again, I need to cite his evidence almost in full, although I will simplify the headings:

“4.4A [Capacity to decide whether the Chancery proceedings should be continued]

It is my opinion that [Mr S] does not have the capacity to make this decision. This is for two reasons. The first is that he has only an incomplete, partially incorrect, and limited understanding of the nature of the current proceedings. I asked him to tell me what the case was about and he told me that he thinks that his daughter has made a complaint, about the fact that [Mr S] was receiving too much attention from [Mrs D] and spending too much time with her. He also told me that she is “not here for my money”. [Mr S] was unable to tell me any more about the current case. I then specifically asked him if he had made any gifts of money and the values of these gifts. He told me that he thought he might have made gifts to a total of “£200”. I asked [him] if he would be surprised to learn that he had made gifts totalling hundreds of thousands of pounds. He responded “yes, it would surprise me”. As will be discussed below, [he] was unable to demonstrate an adequate understanding of the effect of the current proceedings for himself, [Mrs D], or his daughters, whether the proceedings were to be continued, or not. It might be argued that [his] understanding of the proceedings could be assisted by extensive support being provided to him, so as to enable him to exercise capacity in this regard, but as will be already clear I do not consider that [he] retains the cognitive ability to reason about these matters even if he were given every possible support.

4.4B [Capacity to enter into a compromise]

As it is my opinion (see A) that [Mr S] lacks the capacity to decide whether the current proceedings should be continued, because of his lack of understanding of the matter and, if he were assisted to understand it, his inability to reason normally about it, it must follow that he lacks the capacity to enter into a compromise of the claim on whatever terms might be proposed.

4.4.1

[His understanding of money and its value]

I asked [Mr S] to estimate a number of sums of money and he demonstrated a serious inability to appreciate the current value of money. [Various examples are then given]. While some of these responses are not grossly inaccurate, those which involve more significant sums are serious under-estimates of their value and [Mr S] has therefore demonstrated an inability to appreciate the current value of money. The Arithmetic subtest of the WAIS-III has also demonstrated his inability to perform simple calculations, and I therefore conclude that [he] lacks a normal understanding of money and its value, including in the context of the current cost of living, or the current cost of care.

4.4.2

[His understanding of the circumstances in which he made the gifts to Mrs D]

I asked [Mr S] about this gift [i.e. the gift of £301,941]. [He] had no recognition or awareness of the gift. On the basis that he accepted the information which I gave to him about the gift, he was unable to give me a clear reason why he might have given the gift. He simply told me that she [Mrs D] “touched me very deeply” but could provide no further explanation. When told the total sum of the gifts which he had made to [Mrs D], which I understand to be in the region of £540,000, [his] only response was “I did what I did and that’s an end of it”.

4.4.3

[His understanding of the effect of the gifts on his overall financial and asset position]

I cannot comment upon [Mr S’s] understanding at the time that the gifts were made; being obviously unable to examine his cognitive status at that time, and [he] is quite unable to recall the relevant period. His present understanding is extremely limited. If he is told that he has gifted all his assets but his bungalow and his pensions then he simply accepts this information without any apparent concern. Specifically asked about the effect upon himself, [he] responded “Nothing. I just like doing it and I did it. I am neither depressed nor elated”. Asked upon his understanding of the likely effect upon [Mrs D] he told me that “I expect that she would be elated”. Asked about the effect upon his daughters, [he] responded “They have accepted it”. [He] gave no evidence of understanding the wider consequences of transferring substantial sums of money either in terms of its effect upon his own future security and welfare, the likely impact it might have upon [Mrs D’s] life, or the impact which it could have for the future of his daughters. His present understanding is therefore very limited and only to the notion that receipt of a gift is likely to be a pleasurable experience.

4.4.4

[His understanding of his present and future financial needs]

I asked [Mr S] how he might provide for his needs in the future and whether he foresaw any difficulties. He told me that “I don’t think so”. He explained how he has his bungalow to live in and his retirement and state pensions and believes these are sufficient for his future needs. I explained to [Mr S] the likely cost of residence in a care home, of a reasonable standard, and asked him how he could meet these charges. He told me “I will just take pot luck”. I explained to him that the consequence might be that he found himself in very unsatisfactory accommodation which might not adequately meet his needs and he responded “I would accept it, even if it is not so good for myself”. [He] expressed the importance of having a “caring and sharing attitude” and his ambition that everyone should “live in amity and concord”. While no one could disagree with these ambitions, I am aware that before his recent medical difficulties, [he] showed very considerable concern about the provision for his future and that his daughters should equally provide for their own futures, and also that he currently constantly telephones his daughter with complaints about his care and concerns about whether his care is being effectively provided. There does seem to be evidence that his current actual behaviour does not match his current expressed beliefs. In my view this is further evidence that [he] is unable to reason about his situation in a normal fashion and therefore not capable of weighing matters in the balance to reach a decision and that he therefore lacks mental capacity with regard to relevant decisions.

4.4.5

[His understanding of the consequences of his recovering or not recovering the sums paid to Mrs D]

I asked [Mr S] what would, in his view, be the consequence of either recovering or not recovering the relevant sums of money. He told me that if the money was recovered, he would simply give it back to [Mrs D]. He said that he would do this even though he understands that there is a possibility that he might need the money for his own care in the future. He did not show any evidence that he understood the inconsistency of this position, or that he would clearly not be acting in his own best interests. If the sums were not recovered, then [he] stated that he would be “more than happy”. I therefore conclude that [he] does not understand the consequences of his recovering or not recovering these sums, whether in whole or in part.”

I will say at once that I am satisfied that all three of the experts who gave oral evidence (Professor Howard, Professor Beaumont and Dr Barker) did so clearly and dispassionately, and that they were doing their best to assist the court. Mr Marshall suggested at one stage in his cross-examination of Professor Howard that, once he had formed his original clinical judgment of Mr S’s capacity and expressed it in his second report, he did not consider the question afresh in his third and fourth reports, and they were almost bound to be consistent with his first judgment. Professor Howard disagreed, and said that he would have been ready to change his view if, for example, he had found that Mr S’s frontal lobe functions were seriously impaired. He said, and I accept, that he is always perfectly happy to acknowledge that he might have made a mistake.

My favourable impression of Professor Howard’s candour was reinforced by his rather disarming readiness to accept, and to apologise for, certain deficiencies in his reports when they were pointed out to him by Mr Marshall. Thus he accepted that it would have been helpful if he had somewhere made specific reference to the four requirements in section 3(1) of the 2005 Act. He agreed that the question of capacity is both decision specific and time specific, and accepted, with an apology to the court, that he had nowhere identified the specific decision by Mr S which he was being asked to evaluate. Although he was familiar with giving expert evidence, having done so about eight or nine times before, he had taken no steps to seek fuller instructions for his second report than the brief email sent to him by Hunters. This meant, for example, that he had never read the particulars of claim in the Chancery proceedings, or (I infer) the defence. Indeed, it turned out that he had never read the particulars of claim before they were shown to him in the witness box. Under some pressure from counsel, Professor Howard agreed that his understanding of the nature of the claim was very limited when he saw Mr S in June 2009. He did not know the number of cheques which had been written by Mr S in favour of Mrs D, nor (at that stage) did he know the amount of the largest single cheque. All that he had established in his discussion with Mr S on that occasion was that the gifts had amounted to “several hundred thousand pounds”, which he agreed could have meant little more than £200,000.

When it was put to Professor Howard that, without the basic information about the precise number and amount of the cheques, he was in no position to discuss with Mr S his understanding of the information relevant to his decision, Professor Howard said that they were able to talk about the “order of magnitude” of the sums involved, and that the actual amount (approximately £549,000) was in fact consistent with his references to “several” hundred thousand pounds. That may be so, but it seems clear to me that Professor Howard’s understanding of the nature of the case and the sums involved was necessarily vague and imprecise when he interviewed Mr S and subsequently prepared his second report. It must be remembered, in this context, that his first report in April 2008 had been prepared some nine months before the Chancery proceedings were begun in January 2009. He knew, because Hunters had told him, that the claim was one to recover the gifts on grounds of undue influence, but he accepted that in his conversation with Mr S he did not discuss the question of undue influence, and what it might mean, at all. The cross-examination at this point continued:

“Q. … So it is fair to say that in your discussion with [Mr S] about the issue, you yourself knew very little indeed about what the proceedings were about?

A. In terms of the details, that is correct.

Q. You knew very little about what the proceedings were about. It is not just about detail. You had not read the particulars of claim; you had not been provided with the particulars of claim; you had not been invited to review the particulars of claim; you did not have any of that detail at your fingertips.

A. No, that is correct, those statements are correct, yes.

Q. Yet you are being asked to opine as to whether he understands, or has sufficient capacity to weigh the various competing factors that might properly be taken into account as to whether these proceedings should be pursued or compromised or discontinued. That is what you were being asked about, was it not? You could not properly do that without that information, could you?

A. I think that is for the court to decide.”

In the next section of his cross-examination, Professor Howard accepted that he did not know in June 2009 what proportion of his assets Mr S had given away. All he knew was that Mr S had disposed of practically all his liquid assets, and that the assets which he continued to own were his home and his pensions. He therefore did not know that the total amount of the gifts was almost exactly double the value of his home. Thus, when he asked Mr S how he would divide a fortune of £1 million between Mrs D and his daughters, and was told that he would want to leave Mrs D £500,000, he did not appreciate the significant difference between this example (where Mrs D would receive twice the amount each daughter received) and what actually happened (where Mrs D was given approximately four times the amount he will be able to leave to each daughter). The following exchange is again revealing:

“Q. … What he had given [Mrs D] was two-thirds leaving one-third to be split, i.e. a sixth each, to his daughters. You did not know that, did you?

A. No.

Q. So it is right to say, to put the point narrowly, that the claim in relation to the amounts sought to be recovered is different from the proportionate shares that you understood [Mr S] to be willing to give in the light of that discussion?

A. Yes.

Q. That is right. So your discussion with him is no guide, and indeed different from, what is actually in issue in the proceedings?

A.

Yes. That is correct.”

When counsel put it to Professor Howard that the first test in section 3(1)(a) had not been satisfied in June 2009, because Mr S did not have available to him the basic information that was relevant to the decision he had to take, Professor Howard merely said:

“I apologise if I have done a superficial job, but I felt that he had understood the sums of money involved had been several hundred thousand pounds, being a large amount of money, and represented his totals of disposable liquid assets.”

A little later he said, in relation to the balancing exercise that Mr S had to perform in reaching a decision:

“Yes, well, I suppose I have been guilty of asking him to balance in the most general terms rather than specific.”

He agreed that it would have been helpful to the court if his report had set out the information and data provided to Mr S, together with a description of Mr S’s understanding of that information, and if he had then proceeded to consider with Mr S whether he was able to balance those various factors and come to a conclusion. Professor Howard apologised if he had “not been sufficiently detailed”, and said:

“Yes, I could have done a better, more detailed job. I accept that.”

Moving on to his third report, Professor Howard agreed that he should have recorded the instructions which were given to him in conference. He apologised, once more, for not following the basic obligation of an expert witness to disclose the substance of his instructions and the circumstances in which they had been received. He explained that the issue of frontal lobe impairment was something which Dr Barker had raised, and which he (Professor Howard) had neglected to address specifically in his earlier examination, so the purpose of his third report was to remedy this omission.

In the course of questioning about his third report, Professor Howard said that his findings had been within the normal range, but added, without prompting, that there is a difference between the kind of “bedside testing” that a psychiatrist would use and the structured tests which a chartered or clinical psychologist would administer. He said a little later that another way of testing a patient’s capacity is to make a more general assessment of his ability to reason in discussions and arguments with him about other things. Professor Howard had made such an assessment on the basis of his discussions with Mr S about such matters as the progress of his career, his relationship with his wife, and ethnic tensions in Fiji. These discussions showed, in his view, that “the hardware for reasoning” was present.

Professor Howard accepted that the administration, evaluation and analysis of tests administered by neuropsychologists, such as the WAIS-III test, was a highly skilled procedure, and that he had not been trained to administer such tests. He emphasised the different approach of a psychiatric neurologist, like himself, from that of a clinical psychologist, like Professor Beaumont. The bedside tests which he administered were not centrally administered or standardised, and were very individual:

“Each clinician will have their own kind of way of doing these tests that they will have been trained in by the particular consultant they have worked with or that they will have read about.”

The tests which Professor Howard had administered were ones which he had used six or seven times a week over the last ten or fifteen years.

In relation to the conflicting results recorded by Professor Beaumont and himself for the CET test, Professor Howard accepted that he did not carry out the full test, but confirmed that Mr S had given the answers recorded in his report, and that “these seemed like appropriate and sensible estimates”. He agreed that there was no independent method of validating his results, and described them as a cross-check which confirmed the overall impression he had gained earlier. More generally, he agreed that his approach was “pretty broad brush”, and acknowledged that Professor Beaumont was the expert in the administration of standardised tests. He added that it is often difficult to interpret the results of such tests where the patient, like Mr S, has a profound memory disturbance.

In relation to his fourth report, Professor Howard confirmed that he had explained to Mr S the figures relating to his finances which Hunters had provided to him. However, Professor Howard had still not read the particulars of claim. His explanation for Mr S’s repeated surprise when reminded of the size of the gifts was merely that he had forgotten how big they were. He relied on Mr S’s spontaneous statement to him that £549,000 was about twice the value of his house as an indication that he had understood both the amount of the gifts and their value in relation to his other main asset.

In re-examination, Mr Staunton reminded Professor Howard that when he prepared his first report, in April 2008, he had seen the reports of Dr Powell and Dr Cook, and would therefore have been aware that the total amount of the gifts to Mrs D was over £500,000. I comment that this is correct, but there is still no indication in Professor Howard’s second report that he supplied this information to Mr S, or ensured that he understood it. On the subject of memory, Professor Howard agreed that there is a distinction between working or short-term memory on the one hand and longer term or semantic memory on the other hand. He said that Mr S’s semantic memory was “very, very poor”, and that this could result from difficulty either in posting information to the semantic memory or in its retrieval, or from a combination of both causes. He said that in his opinion Mr S could hold information in his working memory “for a period of up to a couple of minutes”, but beyond then he would lose it because of inability to put it into his semantic memory. In addition, if he was distracted by being given other things to hold in his working memory, that would displace the information he was already holding.

I now move on to the cross-examination of Professor Beaumont. At an early stage, Mr Staunton asked him whether, on the assumption that all of the factual observations in Professor Howard’s third report were accurate, this would show that Mr S’s ability to reason was well preserved. Professor Beaumont disagreed, for two reasons. First, there was further and more valid evidence about Mr S’s reasoning which was relevant to the issue, and was not taken into account in this report, and, secondly, Professor Howard had failed to appreciate the degree to which Mr S “gives relatively automatic answers in a social context”. Enlarging on this second point, Professor Beaumont said this:

“I think that with respect to the capacity for reflection, when you ask certain questions of [Mr S] he has fairly routine answers which spring from him rather readily. In fact he is rather repetitive in the statements that he makes. You cannot necessarily accept uncritically the idea that this represents high level reasoning on [his] part. It is in some sense an automatic habitual response which he is able to produce.”

Professor Beaumont went on to say that recognition of this tendency is a matter of clinical judgment, but Mr S was extremely repetitive in the limited set of responses which he gave under questioning or in general conversation. Professor Beaumont accepted that he had not made this clear in his report, an omission for which he in turn apologised.

When questioned about the religious views which Mr S had expressed to Professor Howard in January 2010, in the context of the recent earthquake in Haiti, Professor Beaumont accepted that they showed a patient whose ability to reason was, to that extent, preserved. He added, however, that this could still be compatible with damage to Mr S’s frontal lobes, because they form a very extensive and complex part of the forebrain and serve a number of different functions.

Professor Beaumont accepted that Mr S had good retained social skills, as exemplified by his asking Professor Howard whether he would mind if he smoked a cigarette in his presence.

In relation to the different tests applied by psychologists and psychiatrists, Professor Beaumont accepted that bedside tests of the kind carried out by Professor Howard can be an acceptable method of determining whether a patient’s ability to reason is intact. He did not seek to disagree in any way with Professor Howard’s clinical opinion, but pointed out that in one of the tests administered by Professor Howard (letter fluency) he had allowed proper nouns as valid responses, although it was normal to disallow them, and if the proper nouns were disregarded Mr S’s response would no longer fall within the normal range. With regard to the impact of severe memory impairment on the tests applied by psychologists, he said that it could not be entirely eliminated, but the tests were constructed in a way which either minimised its impact on performance, or else specifically recognised and incorporated it. So, for example, within the WAIS test there were a number of separate indices, one of which was for working memory, which could be scored separately, and would allow performance in other areas of intellectual ability to be assessed without contamination by memory loss.

Professor Beaumont agreed that Mr S had performed “quite well” on the proverbs test carried out by Professor Howard, although he said that the test was no longer used by psychologists because it was not felt to be valid due to its enormous educational loading.

In relation to the “similarities and differences” test, Professor Beaumont thought, rather unfairly in my view, that the answers given by Mr S to Professor Howard had been “concrete” responses describing the objects rather than linking them at a higher level of abstraction. However, he did not question Professor Howard’s findings or his clinical ability. Professor Beaumont attributed the difference between his conclusions and those of Professor Howard mainly to the different nature of the tests that they carried out, but also to the rather different ways in which they interpreted Mr S’s “natural discourse and his natural interaction”. Unsurprisingly, Professor Beaumont preferred the tests used by his own profession, which he felt provided “a more valid way” to determine the issues. In relation to the second difference, Professor Beaumont very fairly noted that Professor Howard had had the opportunity to discuss a wide range of topics with Mr S, over a long period, whereas his own priority had been to administer a number of formal tests, which very much restricted the time available for more general conversation. Nevertheless, when he did discuss general matters with Mr S, and in particular when he put to him the same questions that Mr S had considered with Professor Howard, he found that Mr S provided a much more restricted range of answers than when Professor Howard had interviewed him. At this point, Professor Beaumont returned to the theme that Mr S has a number of set phrases which he tends to use habitually, such as “I did what I did and that’s an end of it”, which Mr S had said to him a number of times. When asked what he concluded from this, Professor Beaumont replied:

“What I conclude is that, as with many patients who have these kinds of executive disorders and problems with reasoning, is that they fall back on relatively stereotyped social speech and interaction. In fact my view may be partly coloured by the fact that in my hospital job I work with clients who have extremely severe and profound brain injury … Now, I am not suggesting that is the case for [Mr S], but he is on the road to that which is what one commonly sees in dementias of the kind that [he] has. Because he has difficulties with his cognition he falls back on a relatively restricted range of comments and remarks and responses which he makes, which are acceptable in the situation but are not … freely reasoned in the way that a normal intact individual would do.”

Professor Beaumont gave as another example of a repeated phrase used by Mr S his expression that “[Mrs D] touched me very deeply”. He added that the point of such responses was that they were socially quite helpful to Mr S in that they prevented any further discussion of his reasons for having acted as he did.

Professor Beaumont rejected the suggestion that fatigue might be the explanation for Mr S’s poor performance in the tests which he administered. He said, and I would readily accept, that after forty years of experience seeing a large number of clients every week he had learnt to judge whether they were fatigued or not.

Professor Beaumont thought that Mr S’s expressions of personal indifference and fatalism about his future might be a result of frontal lobe lesions. It may be a symptom of such damage that a person becomes indifferent about his own future, and becomes “relatively emotionally flat”. When it was put to him that this might simply reflect Mr S’s established character, Professor Beaumont replied that it would if there were a lifetime history of Mr S acting in this way, but in the absence of any clear evidence about his previous character and personality the probability was, in his view, that this behaviour should be attributed to an abnormality of the frontal lobes. It was, however, impossible to know which aspects of the frontal lobes had been affected, because there had been no physical imaging or accurate neurological examination of Mr S in the recent past.

On the issue of Mr S’s ability to reason, it was put to Professor Beaumont that the three scenarios discussed by Professor Howard with Mr S in his fourth report, and the ability to reflect on his position which he displayed on that occasion, were incompatible with the severe damage to his reasoning ability which Professor Beaumont had diagnosed. Professor Beaumont had two answers to this. First, he made it clear that his reference to a severe degree of disability reflected the fact that Mr S had started off as a very able individual. So a person of superior ability, like Mr S, would only have to fall to low average to have a severe deficit. Secondly, however, Mr S’s performance was in some respects not merely in the low average range, but actually abnormal. In this context Professor Beaumont drew a distinction between Mr S’s preserved skills, which he could still employ to good effect, and his reasoning about novel situations, in which he was in Professor Beaumont’s view severely impaired. In this connection, he did not think that there was anything novel about Mr S’s consideration of the role of God in the Haiti earthquake. His reflections were of a commonplace nature, and probably drew on his premorbid experience. In relation to the three scenarios which Mr S had discussed with Professor Howard, Professor Beaumont again disagreed that these were truly novel situations, because Mr S had already discussed the issues with Professor Howard before the specific scenarios were put to him. In other words, he had been primed about the topic.

Professor Beaumont was examined at some length about the specific tests which he had administered to Mr S. In my view Mr Staunton made no significant impact on the reliability of Professor Beaumont’s methodology or conclusions. When asked to explain the difference between his results and those obtained by Professor Howard, he said that Professor Howard was working from a psychiatric perspective, and “I simply have to say that my test results are assessed against established normative samples and therefore should be regarded as having a higher level of validity”. A little later, he said that in his view the results obtained by psychologists and neuropsychologists constituted scientific data and were not merely matters of opinion. He accepted, however, that this was not the end of the exercise, because the data still had to be interpreted and other things had to be taken into account:

“So one has to take into account the patient’s history, their current situation, their neurological status, whether they are depressed and/or anxious, and all these things in achieving a clinical interpretation of the test results. But you start with the science and you then have to put it into context.”

Professor Beaumont explained the nature of the “rule shift” test which he had applied. The patient is given a booklet with 20 pictures of black and red playing cards in random order. The first rule, written in large print on a card to which the patient can refer, is: “Say yes to red and no to black”. They then go through the booklet, as slowly as the patient wishes. On this first test, Mr S made no mistakes at all. The rule is then changed, and another card is placed before the patient which now says: “If the card is the same colour as the last one say “yes”, if not say “no”.” On this second test, Mr S made 10 mistakes, whereas a normal performance would allow only 2 or 3. Professor Beaumont was asked whether he was satisfied that Mr S had been able to read the print on the second card. Although Mr Staunton pressed him on this point at some length, I am satisfied that Mr S was able to read the card, and that somebody of Professor Beaumont’s clinical experience would have noticed if he was not.

Professor Beaumont readily accepted that Mr S had some ability to reason, and that he should be given assistance to help with his poor memory. It was then put to him that, since Mr S consistently comes to the same conclusion that he does not want the money to be recovered, it must follow that he is reasoning his way to that conclusion, and that if he were irrational one would expect inconsistent answers on different occasions. Professor Beaumont disagreed, and said that a person with severe frontal lobe damage would often make consistent decisions based upon quite trivial criteria. He then gave a hypothetical example related to the present case. If the only thing that made sense to Mr S was that he did not want the embarrassment of Mrs D losing the money, that would always lead him to produce the same response. But his reasoning would not be sufficient, because it would not involve reasoning about all the other aspects of the case.

At the end of his cross-examination, Professor Beaumont was asked how he was able to gauge whether the responses given to him by Mr S in relation to the three scenarios were simply stereotypical and not his genuinely held view. The answer was:

“Because we have good reason to believe that he is not reasoning. He does not further explain the position which he takes. It seems inconsistent with the little that we know about his previous personality and it is not normal behaviour for a person of some reasonable degree of prudence.”

I come finally to the evidence of Dr Barker, which with no disrespect to him I will deal with rather more briefly. In general, I was impressed by the very sensible and nuanced answers which he gave to questions, and in my view the evidence of his written report remains substantially intact.

Dr Barker accepted that some reasoning was to be found in the views expressed by Mr S, but remained firmly of the view that he lacked capacity to decide whether the Chancery proceedings should be continued. He naturally placed considerable emphasis on the wildly conflicting, and contradictory, statements that Mr S had made during their interview about the amounts which he had given to Mrs D and the value of his assets. He also stressed his apparent inability to understand simple fractions or proportions, and the way in which Mr S appeared to react with equanimity whether he thought that the amount he had given was a matter of a few hundred pounds or between £150,000 and £200,000. He added that Mr S sometimes said he was surprised about figures, but it never really seemed to register with him. He described the self-contradictions by Mr S within the space of a few minutes, or even seconds, as astonishing, and thought that there was evidence of impairment in his working memory as well as his long term memory.

Dr Barker agreed that Mr S still had good social skills, and that he was polite and sensitive to others. However, he had only limited awareness of his own position, and retained only some of the executive functions of the brain. The picture was not black and white, and a balanced overall assessment had to be made.

It was put to Dr Barker that the letter which Mr S had written to R in July 2000 provided only a slender basis for the conclusion in paragraph 3.13 of his report, where Mr S’s current attitude was said to be “hugely out of keeping” with the approach demonstrated by his earlier letters. He agreed that the letters exhibited to R’s witness statement were incomplete, and that apart from the letter addressed to R it was unclear who the recipients were; but he stood by the view which he had expressed, and took the view (reasonably in my opinion) that the keen interest which he then took in his daughter’s financial affairs naturally suggested that he would then have taken a similar attitude to his own affairs.

Like Professor Beaumont, Dr Barker was unimpressed by the capacity for reasoning evinced by Mr S’s comments to Professor Howard about religion, suicide and current affairs. Dr Barker said that he met many old people who thought like that, and religious views of this nature were often the product of long-embedded beliefs rather than a conscious process of reasoning. With regard to his possible future needs for care, Dr Barker doubted whether Mr S was really able to evaluate the position, and whether he was really aware quite how basic the level of care was in some homes that he (Dr Barker) had seen.

In general, the most that Mr Staunton was able to extract from Dr Barker was that many of his observations could have had an alternative explanation that was compatible with capacity. The problem with this approach, in my view, is that it does not allow for the all-important element of clinical judgment which led Dr Barker, as a very experienced consultant psychiatrist, to conclude that Mr S lacked capacity.

In answer to questions from Mr Marshall, Dr Barker said that he had been unusually impressed by Professor Beaumont’s report, and he was reassured by the fact the Professor Beaumont had adopted a dual approach, relying on his clinical judgment as well as the cognitive testing in which he had special expertise.

Mr Marshall also explored with Dr Barker certain other inconsistencies in the views which Mr S had expressed. For example, Mr S had said to Dr Barker that it would be R’s responsibility to make provision for his future care, and if there was any shortfall she would see to it. By way of contrast, Mr S told Professor Beaumont six months later that he would just take pot luck, and that he would accept it even if he found himself in very unsatisfactory accommodation. Dr Barker agreed that there was an inconsistency, although he thought that one could not conclude very much from it. He also agreed that there was an apparent inconsistency between Mr S’s statement to Professor Beaumont (recorded in his notes, not his report) that he was “not a religious man” and the discussion which he had had with Professor Howard in January 2010. Dr Barker commented that this was curious, because religious beliefs tend to persist over time.

In conclusion, Mr Marshall referred Dr Barker to section 3 of the 2005 Act and asked whether his conclusion was based more on lack of understanding of the relevant information or on inability to use or weigh that information as part of the decision-making process. Dr Barker replied that he was satisfied that Mr S lacked capacity on the latter ground. He was uncertain whether he also lacked capacity on the former ground, although he thought that his understanding was also impaired. Mr Staunton explored this point a little further with Dr Barker in re-examination, which led him to express the view that, on balance, he considered that Mr S was probably unable to understand the relevant information.

I begin with the question whether Mr S is able to understand the information relevant to the decision which has to be made. I have already discussed the nature of that decision in paragraphs 42 to 47 above, and concluded that Mr S must be able to understand, as a minimum, the nature and extent of the relationship of trust and confidence which he arguably reposed in Mrs D, the extent to which it may be said that his gifts to her cannot readily be accounted for by ordinary motives, and the general nature of the evidential burden resting on her to rebut any presumption of undue influence which might have arisen. I have also held that, since her relationship with him is still subsisting, the court will need to scrutinise with particular care whether Mr S is able to stand back from the impugned transactions with sufficient detachment truly to understand the nature of the claim.

If I have correctly identified the nature of the decision to be made, and the information that Mr S would need to understand in order to make it, it seems clear to me that he lacks the necessary capacity to do so. I agree with Professor Beaumont’s assessment in paragraph 4.4A of his report that Mr S “has only an incomplete, partially incorrect, and limited understanding of the nature of the current proceedings”. In particular, he has little understanding of the value of money, and without prompting he has no idea at all of the size of the gifts which he made to Mrs D. At times he will hazard the view that he gave her only a few hundred pounds, but at other times he will suggest a figure ten or even a hundred times larger, and he is also prone to contradict himself within a very short space of time about the amount of the gifts, without any apparent awareness of the disparity or any recollection of what he has just said: see, for example, Dr Powell’s report (paragraphs 51-2 above) and Dr Barker’s report at paragraphs 2.2.9 and 2.2.14. In cross-examination Dr Barker described these disparities and contradictions as “staggering” and “remarkable”. I agree.

Thus at the most basic level Mr S has no understanding of the amounts of money at stake unless he is told what they are. Nor can he explain, except in the most general terms, why he wished to make the gifts, or why he thinks that there might be a valid claim to recover them. In principle, these deficiencies could be made good by the provision of the necessary information to him in simple language; but even then I do not think that he could retain the information in his mind for long enough to assimilate and make use of it. In view of the profound impairment of his semantic memory, the retention would have to be in his short term memory alone. But in the light of the tendency to self-contradiction which I have already noted, and Dr Barker’s opinion that there may also be a clinical impairment of Mr S’s short term memory, I have no confidence that he would be able to retain the necessary information for long enough to understand it in any meaningful sense. As I have already said, the decision is a complex one which requires a good deal of detailed information and self-awareness. I was struck in this context by a comment made by Professor Howard in re-examination, when he said he thought Mr S could “hold information in his working memory for a period of up to a couple of minutes, but beyond that period, because he is not able to put it in to his semantic memory, he loses it”. In my judgment a period of two minutes at the most cannot possibly be long enough for a proper understanding of all the information relevant to the decision, let alone for an evaluation of the issues in the Chancery proceedings.

A related issue is whether Mr S’s mental impairment is confined to his severe memory loss, or whether it extends more widely. In my judgment Dr Barker performed a valuable service by drawing attention to the possibility that Mr S may be suffering from damage to the frontal lobe of his brain, and pointing out that symptoms of such damage “are often clinically overlooked because they are more complex to elicit”. The relatively simple tests which he administered clearly indicated to him a significant degree of frontal lobe abnormality: see in particular paragraph 3.9 of his report. This indication was then reinforced by some of the tests performed by Professor Beaumont: see paragraph 4.2 of his report, where he says that Mr S’s performance on the Semantic Fluency subtest of RBANS was “possibly associated with some abnormality of his frontal lobes”, and that his performance on the Rule Shift test was “a further sign that there may be some frontal lobe disturbance”. Against this I must set the evidence of Professor Howard’s third report, where he concluded that Mr S’s frontal lobe functioning fell within the normal range. The evidence is inconclusive, but on balance I incline to the view that Mr S does suffer from a significant frontal lobe impairment in addition to his profound memory loss.

Before I leave the question of Mr S’s understanding of the relevant information, I need to say a little more about Professor Howard’s reports. In his second report, he addressed the question whether the Chancery proceedings should have been issued. As a preliminary comment, it should be noted that this is not quite the same as the question whether they should now be continued, although rather surprisingly Professor Howard seemed unable to appreciate the distinction between the two questions when it was put to him in cross-examination. In that report, he expressed the opinion that, although Mr S’s memory was extremely poor, if prompted “he quickly recognises the facts and issues involved”. Professor Howard went on to say that, with prompting, Mr S could recall the gifts and his reasons for making them, the fact that R was trying to recover the money, and the existence of the Chancery proceedings. However, it emerged from Mr Marshall’s skilful cross-examination that this opinion was based on only a superficial acquaintance with the case on the part of Professor Howard, which he readily acknowledged. I have already referred to the relevant passages in his cross-examination, and I will not repeat them. It is, in my judgment, a fair criticism to say that Professor Howard should not have expressed a clear opinion in these terms without also making clear the limited nature of his own understanding of the facts and issues, and the precise steps which he had taken to remind or inform Mr S about them. A related, and equally valid, criticism is that he failed to comply with the mandatory requirement in the Practice Direction to Part 15 of the Court of Protection Rules 2005 to include in his report “a statement setting out the substance of all facts and instructions given to [him] which are material to the opinions expressed in the report or upon which those opinions are based”. An acceptable alternative, as the Practice Direction makes clear, would have been to annex his instructions in so far as they were in writing. None of these elementary steps was taken, and the result (unintended I am sure, but nevertheless potentially very worrying) is that the report rests on a much flimsier foundation than a reading of it would naturally suggest. The rules are there for a good reason, and if they are not complied with a report, even from the most eminent of experts, is likely to lack the transparency and objectivity which the court rightly insists upon in expert evidence. I do not wish to be too critical, because the report appears to have been produced under some time pressure (although I must say it is not clear to me what the urgency was), and because Professor Howard and Hunters may have thought of it essentially as a supplement to the first report which he had produced in April 2008. Nevertheless, I have to say that there is substance in at least some of the severe criticisms of this report which Mr Marshall advanced in his closing submissions.

I am afraid that Professor Howard’s third and fourth reports are also open to some criticisms of a similar nature. I have already referred to the unsatisfactory way in which they were produced, apparently on the basis of oral instructions given at conferences with counsel, and without prior authority from the court. As before, there is only a most perfunctory statement of the nature of those instructions in the body of the reports, and no proper statement of the materials upon which they were based. The overall result of these deficiencies is that I have had to treat Professor Howard’s evidence with considerably more reserve than would normally be the case. I make it clear, however, that I do not question his personal integrity or good faith in any way, I fully accept the accuracy of his record of what Mr S said to him during their interviews, and I have the greatest respect for his skill and experience as a clinical psychiatrist. It is precisely for those reasons that I have found this a difficult and worrying case.

I now turn to the question whether Mr S is able to use or weigh the relevant information. In view of the conclusion which I have already reached about his inability to understand the information, I can deal with this question comparatively briefly. All of the matters which I have already mentioned on the issue of understanding apply, with equal or greater force, to the question whether he is able to use or weigh the relevant information as part of the decision-making process. In addition, I have the clear and firm evidence of both Professor Beaumont and Dr Barker that Mr S cannot satisfy this requirement, even on the assumption that he does understand the relevant information. Their evidence on this part of the case was not significantly shaken in cross-examination, and I have the added comfort of knowing that they agree in their conclusion although they approach it from the perspective of their different disciplines as a psychologist and a psychiatrist. I do not wish to express any view on the question whether the avowedly scientific tests administered by a psychologist have intrinsically greater value than the bedside tests and clinical insights of a psychiatrist. Both professions have much to contribute when the subject matter is something as profound and mysterious as the workings of the human brain. For present purposes, the important point is that both Professor Beaumont and Dr Barker are in agreement.

The high-water mark of the case for Mrs D is, I think, to be found in Professor Howard’s fourth report, and in his record of Mr S’s responses to the three scenarios which Professor Howard put to him. There is no doubt that these responses show at least some ability to reason and some appreciation of the likely consequences for the three protagonists in each situation. This impression is reinforced by the clarity with which Mr S is still able to express himself and his sophisticated use of language. Moreover, it is a record of an interview which took place as recently as 10 March of this year. In his closing submissions Mr Staunton rightly emphasised these passages, and submitted that they provide cogent evidence of Mr S’s ability to consider and make decisions and thus provide a solid foundation for Professor Howard’s conclusion. Furthermore, some of the deficiencies which I have noted in Professor Howard’s second report had by now been made good, because Hunters had provided him with an accurate summary of Mr S’s financial position and Professor Howard expressly says that he explained this to Mr S. Nevertheless, it should be noted that even at this stage Professor Howard had still not read the statements of case, and his appreciation of the issues in the Chancery proceedings may therefore still have been as limited as he acknowledges it to have been the previous June.

If this were the only evidence in the case, it might have been sufficient to persuade me that the challenge to Mr S’s capacity should fail. However, it is only part of the total evidence, albeit a very important part, and I have to reach my conclusion on the basis of an evaluation of the evidence as a whole. For the reasons which I have already given, I consider that there are strong reasons for concluding that Mr S lacks the requisite capacity to use or weigh the relevant information. Although Professor Howard’s fourth report has caused me to think long and hard about the soundness of that conclusion, it has not caused me to change my mind. There are a number of reasons for this. First, and perhaps most importantly, although Professor Howard gave Mr S details of his finances, there is no indication that he gave him any new or fuller explanation of the issues involved in the Chancery proceedings. Indeed, it is most unlikely that he did so, because the body of the report is confined to dealing with the five specific questions listed in my order of 20 October 2009, and at the end of the report Professor Howard describes the assistance which he gave to Mr S as “reminding him of the size of the gifts made to [Mrs D] and the presence and extent of his other assets and sources of income”. This strongly suggests that the assistance was confined to financial matters, in which case Mr S still lacked much of the basic information which he needed to evaluate.

Secondly, I am struck, like Dr Barker and Professor Beaumont, by the stark contrast between the resigned and fatalistic attitude shown in Mr S’s responses to Professor Howard and the keen and well-informed interest in financial matters which he had shown when writing to his daughter in 2000. It is possible that his attitudes to money and financial security have changed over the last decade, but it seems to me far more likely that his current fatalism is a reflection of his mental deterioration. In particular, I am very doubtful whether he has any true understanding of the difference that £550,000 might make to his ability to end his life in reasonable comfort and congenial surroundings if he needs to go into a care home. It is one thing to accept, in the abstract, that he would take things as they came with equanimity. It is another thing to appreciate the true cost of future care, the period for which it might be necessary, and the contrast between first class care homes and the type of inferior accommodation with which Dr Barker, for one, is all too familiar.

Thirdly, I think there is force in Professor Beaumont’s observation that Mr S tends to have recourse to stock responses, that he often fails to offer an explanation for his stated position, and that his reactions are not those of a person of ordinary prudence. None of these points is more than an indicator, and I am of course well aware of the statutory principle that a decision is not necessarily made without capacity merely because it is an unwise one (see paragraph 39 above). Nevertheless, in the context of all the other evidence in the case I think that the probable explanation for these features of Mr S’s current behaviour is that the deterioration in his mental faculties has left him unable to reason his way to a conclusion in a novel situation.

For all these reasons I am satisfied, on the balance of probabilities, that Mr S is unable to make the decision whether or not to continue the Chancery proceedings (or, if it becomes relevant, to settle them), because in terms of section 3(1) of the 2005 Act he is unable (a) to understand the information relevant to the decision, (b) to retain that information, or (c) to use or weigh the information as part of the process of making the decision.

This is not a conclusion which I reach with any pleasure. The philosophy of the 2005 Act is clearly that patients should, as far as possible, be able to make decisions for themselves; and I have little doubt that my decision will, at least in the short term, bring nothing but unhappiness to Mr S. I end by expressing the hope that, in deciding on the future conduct of the Chancery proceedings, R will have full regard to her father’s wishes and feelings, and to the comfort and support that Mrs D provided to him at a time when he was still estranged from both his daughters. A trial of the action is likely to be a painful and damaging experience for all concerned, and I repeat my hope that the parties will, even now, be able to come to a settlement. I would add that, if the settlement were one that were relatively generous to Mrs D, that would surely accord with Mr S’s wishes, and the court would probably need little persuasion to approve it on his behalf.

I must finally express my appreciation and thanks to counsel on both sides for their assistance in this difficult case.