EB v RC

This is an application by the applicant, IB, for the removal of the respondent as his mother’s deputy for property and affairs. There is also a counter-application by the respondent, RC, for orders that the applicant sign letters of authority in relation to two bank accounts that are held in the joint names of EB and the applicant.

Mrs EB was born on 19 December 1926. She used to live at X, but has been living in residential care for more than two years. She was a resident at Y Care Home from 1 June 2009 until 17 July 2011, when she moved to Z Care Home. Her husband died in 1970. The family ran and continue to run a coach hire and travel company called S Ltd. EB was the managing director and chairman of the company until about 1997/1998.

She has two sons: JB, who was born in 1951; and IB, who was born in 1954.

On 8 September 2005 EB executed an Enduring Power of Attorney (“the EPA”), in which she appointed her son, IB, and a close friend and contemporary of hers, RD, jointly to be her attorneys. The EPA was drawn up by A Solicitors.

On 27 February 2006 RD disclaimed her appointment as an attorney. In an e-mail to IB’s wife she said:

“To Whom it may concern”

I RD no longer wish to be involved with the affairs of EB and have no hesitation in agreeing to her son IB taking full responsibility for all matters relating to his mother. I am confident that he will execute this to the best of his ability with his mother’s welfare uppermost. I have known Ian all his life.

Yours faithfully

RD

P.S. Please confirm e-mail received.”

However, because EB had appointed her attorneys to act jointly, rather than jointly and severally, the EPA became inoperable once RD had disclaimed her appointment. IB attempted to register the EPA in his sole name, but the Public Guardian refused to entertain the application.

On 12 July 2008 IB applied to be appointed as his mother’s deputy for property and affairs.

JB objected to the application and, because there were mutual allegations of fraud and financial abuse, the County Council, and even the police, became involved. There is on the court’s file a letter from IB to Sir Fred Goodwin, the then chief executive of the Royal Bank of Scotland Group, dated 28 March 2008 alleging that the bank had conspired with his brother, JB, to commit fraud, and threatening to refer the matter to the financial Ombudsman if he was unsatisfied with Sir Fred Goodwin’s response. There were also mutual allegations of harassment.

A hearing was listed for 12 February 2009.

29 January 2009, a fortnight before the hearing was due to take place, IB filed an application notice stating:

“Both myself, my brother JB and the the County Council, who are the parties to these proceedings apart from the Patient, all agree that the Patient, EB, lacks the capacity required under the Mental Capacity Act 2005 to deal with or manage her own property and all parties agree that an independent Deputy should be appointed to manage the property and affairs of the Patient. It is also agreed that the costs of these proceedings should be paid out of the Patient’s estate.”

By an order dated 11 February 2009, District Judge Mainwaring-Taylor vacated the hearing that was scheduled to take place on 12 February 2009, and directed that a panel deputy be appointed.

On 25 August 2009 District Judge S E Rogers made an order appointing a panel deputy, RC of B Solicitors to be EB’s deputy for property and affairs.

In September 2010 the deputy, RC, decided that it was necessary to sell EB’s house in order to fund her long-term care. EB’s sons vehemently opposed this decision. They wished to let the property, rather than sell it, and they instructed solicitors, C Solicitors, to make representations on their behalf. In a three-page letter to the deputy, dated 22 October 2010, C Solicitors stated:

“Our client’s view is that RC has failed in his duty to consult with EB and other relevant parties in deciding what is in her best interests and, in making a decision on the sale without considering all possible options, he has failed to act with due skill and diligence. In the circumstances we are advised that both IB and JB have lost all faith in RC and wish to apply for his removal as his mother’s deputy.”

On or about 24 December 2010, following a spell of sub-zero temperatures, a pipe burst at X and caused significant water damage. This resulted in three ceilings being brought down and damage to the internal plasterwork in the affected rooms. Many other rooms in the house and their contents were also affected by dampness and water incursion.

IB considered that RC was personally responsible for this water damage, and fired off a series of formal complaints about him to:

The house was insured through Abacus Insurances Services, and a condition of the policy was that “the water must be switched off at the mains and the water system drained. The heating must be maintained at a minimum of 15^oC or 58^oF at all times.” Although the central heating had been deactivated by the managing agents, the water system had not been drained. Accordingly, the underwriters were not prepared to pay the cost of reinstatement works and the replacement of the damaged contents. Davies Chartered Loss Adjusters notified RC of the underwriters’ decision on 21 March 2011.

In response to IB’s complaints, the Public Guardian carried out a formal investigation and, in a letter to him dated 1 July 2011, concluded:

“We consider that the decision to sell the house taken by RC last year was reasonable in the circumstances. We also consider that he dealt appropriately with the family’s objections to the sale. …

We have looked at the way in which the deputy dealt with the problems caused by the burst pipe. We are satisfied that he acted promptly in consultation with Countryside Lettings to ensure that the flow of water was stopped and that he made the insurance claim at the earliest opportunity. …

We have considered the question of whether the deputy was negligent. The deputy engaged Countryside Letting Agents in late 2009 to manage and visit the house on a regular basis. He has acknowledged that there was no formal written agreement or contract with the agents, and that the arrangements were made by telephone and e-mail. It is not clear how significant this is in terms of liability for the losses and the negligence claim, but we are critical of the deputy in this respect as such informal arrangements do not seem to be good practice. …

Based on our investigation of his management of EB’s affairs, together with the report of the Visitor, we are satisfied in the round that he has acted in her best interests. If at the conclusion of the negotiations/litigation with the property agents, it turns out that he bears some responsibility for the failure to observe the terms of the insurance, we are confident that he will give careful consideration to his position.”

On 11 February 2011, some six weeks before the underwriters decided not to allow the insurance claim, IB applied to the court for the following order:

“To appoint IB (Applicant) as deputy over my mother’s property and financial affairs and remove RC, B Solicitors.”

In support of the application he said:

“I would be able to look after my mother’s property and financial affairs in her best interest as my mother no longer has the mental capacity to do this. Currently I am paying my mother’s care home bills, purchased furniture for the care home, bedding, clothing, toiletries, etc. gardening bills at her property. If appointed deputy I would also be able to look after mother’s property and ensure insurance terms and conditions are adhered to and the property rented to bring in an income for her care which would be in my mother’s best interest. See attached photos at the appalling state of the property under the care of RC current deputy appointed by COP.”

On 4 March 2011 RC applied for the following order:

“That IB sign a letter of authority to Santander plc and a further letter of authority to Lloyds Bank plc (directing closure of both accounts) in the forms attached and then provide B Solicitors with the signed documents within seven days of his being served with this order.”

In the application notice, RC stated:

“The deputy has not been given access to the following accounts which are in the joint names of EB and her son IB:

Santander account number [account number and sort code removed]

Lloyds Bank plc (C&G Savings Division) [account number and sort code removed]

Numerous requests have been made to the said IB for him to sign a letter of authority giving the deputy access to the above accounts (as set out in my witness statement), but IB has not complied with those requests.

The court is asked to decide whether the accounts should be closed and proceeds transferred to the deputy’s solicitors.”

On 7 June 2011 I made a directions order setting out a timetable for the filing and serving of witness statements and skeleton arguments and listing the matter for hearing at 11 AM on Tuesday, 2 August 2011.

The following witness statements have been filed:

The hearing took place on Tuesday 2 August 2011, and lasted from 11 AM until 12.40 PM.

The applicant’s party consisted of:

In his skeleton argument produced for the hearing, IB’s counsel, Michael O’Sullivan, submitted as follows:

There are two applications before the court:

At paragraphs 6 and 7 of his skeleton argument produced for the hearing, the respondent, RC, submitted as follows:

“6.

The Respondent wishes to make it plain that he will, of course, abide by any order the court may now make. However, he makes three points in response to his application.

6.1.

The Respondent has always acted in the best interests of EB. He relies in particular on the conclusion of the OPG set out in the letter of 1 July 2011 which followed an investigation into the same issues in respect of which the Applicant makes complaint in his statement. The OPG concluded:

In the round the OPG was satisfied that the Respondent had acted in the best interests of EB.

The Respondent’s decision to sell the house was reasonable in the circumstances.

The Respondent dealt appropriately with the family’s objections to a sale and properly consulted and took advice before so doing.

There were valid criticisms to be made of how the Respondent had engaged the letting agents (which the Respondent acknowledges).

However, the Respondent dealt appropriately with all of the issues following the burst pipe, and the OPG noted in particular that the evidence showed that there was no loss in value to the property as a result of the water damage.

The court is also asked to consider the Respondent’s statement in which he deals with each of the allegations made in respect of the leak and the alleged damage to the property – there are clearly grounds for believing that the Applicant is not correct in his assertions as to the extent of the damage.

In his second statement, the Applicant again criticises the Respondent over the decision to sell the property but (as found by the OPG) this was a reasonable decision taken after appropriate consultation. There is no basis for the Applicant’s criticisms.

6.2.

The Respondent has dealt properly (and again, always in the best interests of EB) when considering his relationship with the family, the contention that there is a conflict of interest, and whether he should stand down as deputy.

The Respondent asks the court to note:

The Applicant had indicated as early as 22 October 2010 (long before the leak) that he and his brother wanted to apply for the Respondent’s removal as deputy, based on an allegation that the Respondent had failed to consult properly in relation to the proposed sale of the property (an allegation which was rejected by the OPG’s investigation).

The Applicant then alleged in his witness statement that a conflict of interest had arisen.

The Respondent sought counsel’s advice at his own personal expense. Counsel advised that there was a possible conflict, depending on the stance taken by the managing agents, but that there was scope for a difference of opinion as to whether the Respondent should step down.

The OPG also dealt with this point in its report, noting that this would also turn to some extent on whether there was a loss or not (and the court is reminded that the present evidence is that there has been no loss as a result of the leak).

The Respondent’s view is that no conflict of interest has yet arisen. The evidence on valuation supports this. The Respondent has carefully considered his position, based upon his own considerable experience, the advice from counsel, and discussions with the OPG as well as the OPG’s conclusions following the investigation.

Whilst recognising that his relationship with the family has broken down, the Respondent is firmly of the view that his removal is not in the best interests of EB.

Any independent professional deputy appointed in his place would have to re-do a considerable extent of work already done by the Respondent and may well come to the same conclusion (as to loss, the position regarding managing agents, the state/value of the property, the need to sell).

This would cause considerable delay whereas in fact the property needs to be sold – delay is not in EB’s best interests.

Having to bear the costs involved in the appointment of a new professional deputy would not be in EB’s best interests.

6.3.

There are good reasons for not appointing the Applicant as EB’s deputy.

There are substantial unresolved issues in relation to EB’s accounts, which are the subject matter of the second application before the court today.

The court is asked to note that, despite the fact that the Respondent’s application was supported by his statement of 4 March 2011, the Applicant failed to deal with any of the serious issues raised when making his statement seeking the Respondent’s removal on 12 April 2011; he has only addressed these issues in his second statement of 22 July 2011.

In the view of the Respondent, the applicant has used the matter of the leak and the unjustified and exaggerated complaints against the Respondent – as well as what he describes as “adverse publicity given to the Court of Protection within the national press” and “concerns regarding the viability of UK banking institutions following the economic crisis” – as a tactic to put the Respondent on the defensive and divert attention away from the fact that the family cannot come to terms with not being in control of their mother’s affairs.

In all the circumstances the Applicant would not been an appropriate deputy.

7.

The Respondent is of the view that it is not in EB’s best interests for a new deputy to be appointed – and in particular that the Applicant should not be appointed as EB’s deputy. The costs involved, and the delays which would ensue, speak strongly against his removal in all the circumstances. The Applicant’s application should be dismissed.”

Sections 1, 2, 3 and 4 of the Mental Capacity Act 2005 provide that, once it has been established that a person lacks capacity to make a particular decision at a particular time (such a person is referred to as “P” in the Act), then any act done or decision made by someone else on P’s behalf must be done or made in her best interests.

The Act does not define “best interests”, but section 4 provides a checklist of factors that anyone making the decision must consider when deciding what is in P’s best interests. These are:

If a person lacks capacity in relation to a matter or matters concerning his or her property and affairs or personal welfare, the Court of Protection may make any decision on her behalf, or may appoint a deputy to make decisions on her behalf in relation to the matter or matters (section 16(2)).

Section 16(4) provides that, when deciding whether it is in P’s best interests to appoint a deputy, the court must have regard to the principles that:

Section 19 contains further provisions relating to the appointment of deputies, concluding at section 19(9) as follows:

“The court may require a deputy –

To give to the Public Guardian such security as the court thinks fit for the due discharge of his functions, and

To submit to the Public Guardians such reports at such times or at such intervals as the court may direct.”

When it appoints a deputy, the Court of Protection exercises its discretion. It has to exercise this discretion judicially, and in P’s best interests. Many of the old authorities that used to govern the appointment of a receiver under Part VII of the Mental Health Act 1983 are probably still relevant with regard to the appointment of deputies.

These authorities generally acknowledged that there was an order of preference of persons who might be considered suitable for appointment as a receiver. I have called it an order of preference, rather than an order of priority, to avoid giving an erroneous impression that certain people were in the past automatically entitled to be appointed as receiver, or are automatically entitled now to be appointed as a deputy. They aren’t. The Court of Protection has discretion as to whom it appoints. However, in the past, when appointing a receiver, it traditionally preferred relatives to strangers.

Generally speaking, the order of preference is:

To some extent this is borne out by the following statistics, which are a breakdown of the different types of receiver as at February 2005. They are taken from Figure 4, on page 13 of the National Audit Office’s report Public Guardianship Office: Protecting and promoting the financial affairs of people who lose mental capacity, which was published on 8 June 2005. They are: relatives 53%; professional receivers 35% (25% local authorities and 10% solicitors), and others 12%.

The court prefers to appoint a family member or close friend, if is possible. This is because a relative or friend will already be familiar with P’s affairs, and wishes and methods of communication. Someone who already has a close personal knowledge of P is also likely to be better able to meet the obligation of a deputy to consult with P, and to permit and encourage him to participate, or to improve his ability to participate, as fully as possible in any act done for him and any decision affecting him. And, because professionals charge for their services, the appointment of a relative or friend is generally preferred for reasons of economy.

There have been two reported cases recently in which judges have considered various matters to be taken into account when appointing a deputy. In Re P [2010] EWHC 1592 (COP), at paragraphs 8 and 9 of his judgment, Mr Justice Hedley said:

“A provisional reading of those principles might be thought to sit rather uncomfortably with the concept of appointing deputies at all. Since the principle of appointing deputies is fundamental to this part of the Act, it must be appreciated that Section 16(4) has to be read in the context of the fact that, ordinarily, the court will appoint deputies where it feels confident that it can. It is perhaps important to take one step further back even than that, and for the court to remind itself that in a society structured as is ours, it is not the State, whether through the agency of an authority or the court, which is primarily responsible for individuals who are subjects or citizens of the State. It is for those who naturally have their care and wellbeing at heart, that is to say, members of the family, where they are willing and able to do so, to take first place in the care and upbringing, not only of children, but of those whose needs, because of disability, extend far into adulthood. It seems to me at least that the Act ought to be read subject to that overriding policy aim.

Therefore, the court ought to start from the position that, where family members offer themselves as deputies, then, in the absence of family dispute or other evidence that raises queries as to their willingness or capacity to carry out those functions, the court ought to approach such an application with considerable openness and sympathy.”

These comments were very carefully distinguished by Mr Justice Jonathan Baker in the case of G v E and Manchester City Council and F [2010] EHWC 2512 (COP). At paragraphs 61 and 62 the judge said as follows:

“If Hedley J’s comments in paras 8 and 9 in the judgment in Re P were intended to indicate that family members should as a matter of course be appointed deputies irrespective of the circumstances, I would respectfully disagree. But I do not read his judgment in that way. The unusual facts of Re P - the extraordinary gifts bestowed on P which enable him to have a career as a performer and earn significant sums of money - mean that many decisions will have to be taken about his personal welfare and property and affairs over and above the normal decision making involved in caring for a person who lacks capacity. Since it would be manifestly impracticable in those circumstances for the Court of Protection to make those decisions, the appointment of deputies was unavoidable and indeed desirable. As I read Hedley J’s judgment, this was agreed by all parties and the issue to be determined by the court was the identity of the deputies. The greater part of that judgment is devoted to the terms on which the deputies were to be appointed and, in particular, whether an independent deputy should be appointed in addition to members of the family. As I read Hedley J’s judgment, his comments about the importance of the family were directed more to the question of who should be appointed as deputy rather than the question of whether any deputy should be appointed at all.

It is axiomatic that the family is the cornerstone of our society and a person who lacks capacity should wherever possible be cared for by members of his natural family, provided that such a course is in his best interests and assuming that they are able and willing to take on what is often an enormous and challenging task. That does not, however, justify the appointment of family members as deputies simply because they are able and willing to serve in that capacity. The words of section 16(4) are clear. They do not permit the court to appoint deputies simply because “it feels confident it can” but only when satisfied that the circumstances and the decisions which will fall to be taken will be more appropriately taken by a deputy or deputies rather than by a court, bearing in mind the principle that decisions by the courts are to be preferred to decisions by deputies. Even then, the appointment must be as limited in scope and duration as is reasonably practicable in the circumstances. It would be a misreading of the structure and policy of the statute, and a misunderstanding of the concept and role of deputies, to think it necessary to appoint family members to that position in order to enable them better to fulfil their role as carers for P.”

There are, of course, cases in which the court would not even countenance appointing a family member as deputy. For example, if there has been financial abuse or some other kind of abuse; if there is a conflict of interests; if the proposed deputy has an unsatisfactory track record in managing his own financial affairs; and if there is ongoing friction between various family members. This list is by no means exhaustive.

An application for the removal of a person validly appointed as a deputy does not invoke quite the same discretion as the initial appointment of a deputy.

Section 16(8) of the Mental Capacity Act 2005 provides that:

“The court may, in particular, revoke the appointment of a deputy or vary the powers conferred on him if it is satisfied that the deputy –

has behaved, or is behaving in a way that contravenes the authority conferred on him by the court or is not in P’s best interests, or

proposes to behave in a way that would contravene that authority or would not be in P’s best interests.”

Apart from section 16(8) itself there is no modern authority in English Law that considers the criteria to be applied by the court when considering applications for the removal of a deputy for property and affairs purposes. However, various guidelines were set out by the Court of Appeal of New South Wales in Holt v. The Protective Commissioner (1993) 31 NSWLR 227 and these have generally been applied by judges of the Court of Protection in the past.

Very briefly, the facts in the Holt case were as follows. Michael Holt was born in 1956 and was a police officer. He married in 1979. In June 1986 he suffered traumatic brain damage in a diving accident during the course of his employment. In May 1991 his wife, Debbie Holt, applied for the appointment of the Protective Commissioner (who at that time was the “manager” or “deputy” of last resort in New South Wales) to manage his estate. Michael Holt’s mother, four brothers and sister were not notified of the application. The order was duly made. In December 1991 proceedings for personal injury were compromised in the sum of 1.95 million Australian dollars. In June 1992 Debbie Holt commenced divorce proceedings. Michael Holt’s siblings became concerned that the Protective Commissioner might settle the divorce on terms favorable to Debbie Holt and insufficiently attentive to Michael Holt’s interests. Two of the brothers, John (a chartered accountant) and Brian (an orthopedic surgeon) applied to be appointed as managers of Michael’s estate in place of the Protective Commissioner. In December 1992 Mr Justice Powell dismissed their application, holding that: “when, in a case where there is an installed manager, a person ... seeks to have the management of the protected person removed from the installed manager and vested in another, that person bears the onus of demonstrating a case for change, the grounds upon which such a change might be based being limited to either: (a) demonstrated incompetence or impropriety on the part of the installed manager; or (b) a clear and convincing demonstration that the form of management proposed would better advance the interests of the protected person than the existing management.”

The Holt brothers appealed. At page 283F of the report of the judgment on appeal, Michael Kirby, the President of the Court of Appeal of New South Wales, commented on the legislation that was then in force in that state, the Protected Estates Act 1983, and said as follows:

“It will not have escaped attention that when parliament enacted s 22 of the Act it provided first that a “suitable person” should be appointed as manager of the estate of a protected person and only secondly that the management of the estate should be committed to the Protective Commissioner. This is a sensible hierarchy of choices. In many estates of modest size it will be appropriate where there is no risk of conflict of interest and duty, and where a relationship of love or affection is established, to reflect in the statutory appointment the form of management which for millennia, in primitive societies as in civilised communities, has been followed when a family member is found to be incapable of managing his or her own affairs. It is normal then for the family to step in. The courts conserved their intervention to cases where there is no family or where no family are willing to act or for special reasons of incompetence or conflict of interest it is unsuitable to appoint a family member. There is a danger in the administration of the Act of overlooking not only this natural order of things but the way in which parliament has reflected it in the terms of s 22 of the Act.”

The actual guidelines that the Court of Appeal of New South Wales set down can be summarised in the following manner:

I am going to allow IB’s application to be appointed as his mother’s deputy in place of RC, as I believe this is in EB’s best interests for several reasons.

EB’s original intention was to appoint IB as a joint attorney under an Enduring Power of Attorney, but his ability to act as her attorney was thwarted when his co-attorney disclaimed her appointment. I am mindful of the co-attorney’s glowing endorsement of him. She said she had “no hesitation in agreeing to … IB taking full responsibility for all matters relating to his mother. I am confident that he will execute this to the best of his ability with his mother’s welfare uppermost. I have known IB all his life.”

IB is better placed geographically to manage his mother’s property and affairs. This is an important consideration in this case, because there is a valuable vacant property that needs to be kept secure and visited from time to time. Almost certainly there will be a need for discussions with local selling agents or letting agents and there may be a need to contact and engage local builders and tradesmen to carry out remedial works.

Regardless of the cause of the breakdown, it is common ground that the relationship between RC and the family has broken down irretrievably. It cannot possibly be in EB’s best interests to allow the ill feeling that subsists between her sons and her professional deputy to continue and fester for the rest of her life. This friction has already had an adverse impact on the management of her property and financial affairs, and there is a string of appellate authorities in relation to Enduring Powers of Attorney - Re W (2000), Re E (2000) and Re F (2004) - in which the judges have consistently held that, where such hostility interferes with the smooth running of the administration of the estate, the removal of the attorney on the ground that he is unsuitable to be the donor’s attorney may be warranted.

Regardless of whether RC was negligent with regard to events leading to the water damage, there is an actual conflict of interests in that someone has to decide whether to commence proceedings against him for negligence and, as Mr O’Sullivan says, RC is personally conflicted from making that particular decision.

There is, however, another reason why I am allowing this application, which neither side really touched on at the hearing. It involves the whole concept of deputyship of last resort, and in this respect the history of these proceedings is relevant. Originally, IB applied to be appointed as his mother’s deputy for property and affairs. His brother John opposed the application and there were mutual allegations of financial abuse. A hearing date was set, but shortly before the hearing was due to take place, the brothers agreed a compromise and invited the court to appoint a panel deputy – or deputy of last resort – which court eventually did.

There is no longer any dispute between IB and JB and, as I understand it, the entire family unanimously supports IB’s application to be appointed as deputy in place of RC. The question arises, therefore, whether there is still really a need for a deputy of last resort.

In Re P [2010] EWHC 1592 (COP) Mr Justice Hedley suggested that “the court ought to start from the position that, where family members offer themselves as deputies, then, in the absence of family dispute or other evidence that raises queries as to their willingness or capacity to carry out those functions, the court ought to approach such an application with considerable openness and sympathy.” Michael Kirby, the President of the Court of Appeal in New South Wales, said much the same thing in Holt v. The Protective Commissioner (1993) 31 NSWLR 227. His remarks are even more pertinent because, whereas Hedley J was commenting on the court’s discretion on an initial application for the appointment of a deputy, Kirby P was considering the somewhat different discretion that arises on an application to remove a deputy.

In some Common Law jurisdictions there is even an obligation on a deputy of last resort to seek a less restrictive alternative to his or her own appointment. For example section 744.704 of the 2010 Florida Code, in which the deputy of last resort is referred to as a “public guardian”, provides as follows:

“(1)

A public guardian may serve as a guardian of a person adjudicated incapacitated under this chapter if there is no family member or friend, other person, bank, or corporation willing and qualified to serve as guardian. ….

(6)

The public guardian, when appointed guardian of an incapacitated person, shall seek a family member or friend, other person, bank, or corporation who is qualified and willing to serve as guardian. Upon determining that there is someone qualified and willing to serve as guardian, either the public guardian or the qualified person shall petition the court for appointment of a successor guardian.”

I would not go so far as to suggest that a similar positive obligation arises in English Law, but there is a general principle in section 1(6) of the Mental Capacity Act 2005, which states that:

“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.”

Generally speaking, from P’s point of view, the appointment of a family member as a deputy will be a less restrictive alternative to the appointment of a panel deputy, though the question remains as to whether the appointment of a family member will achieve the desired objective as effectively as the appointment of a panel deputy.

The fact that IB will not charge for his services as deputy is also a relevant consideration. It would be trite to say that, because she owns a property that is worth between £1 million and £1½ million, EB can afford to pay for the services of a professional deputy.

The following passage comes from an article in the STEP Journal – published by the Society of Trust and Estates Practitioners online on 8 August 2011 – and summarises the Office of the Public Guardian’s recent consultation paper, “Call for evidence: Not for profit delivery of deputyship services.”

“The Office of the Public Guardian is considering asking charitable organisations to act as deputies for people who lack mental capacity.

Currently, the Court of Protection appoints deputies from a panel of solicitors, as a last resort where an incapable person has no relatives or friends willing to act, or if there is a dispute over who should take charge over her affairs.

Such professional deputies naturally charge for their services. Usually, though, there is no specialist legal work involved in acting as deputy; often it is merely a matter of handling everyday finances.

Thus there have been complaints from members of the public that the professional deputies’ charges are disproportionately high given the simplicity of the task. Such complaints are usually brought by the vulnerable person's family, since the fees are charged to the estate of the person lacking capacity.

The Office of the Public Guardian has been aware of this controversy for some time. “We believe that ... there are a significant number of people whose administrative needs are straightforward,” it says in the consultation paper.”

I am aware that RC has strong feelings that there are safeguarding issues in this case, and I would certainly not dismiss or disregard his concerns. When IB made his original application to the court in 2008, the County Council became a party to the proceedings and was keen to see the appointment of an independent deputy to ensure that any dealings involving EB’s finances were completely transparent and above board.

However, these safeguarding concerns can be effectively addressed in a less restrictive manner by means of the court’s powers under section 19(9) of the Act, partly by imposing a requirement that IB gives security of up to a sum of £1,000,000, which is the maximum cover the underwriters will permit in respect of a lay deputy, and partly by the ongoing supervision of this case by the Office of the Public Guardian. Other considerations that I have taken into account include EB’s age and life expectation (even if it were only the national average of about six years for a woman aged 85), her anticipated care costs, and the fact that, apart from a few pecuniary legacies, in her will dated 1 June 2005 she has left her residuary estate equally between her two sons. Naturally, totally different safeguarding considerations would apply if P were a young adult who had been awarded substantial damages for personal injury, which were intended to last his lifetime on the basis of an unimpaired life expectancy.

One of the reasons why RC has safeguarding concerns is because of IB’s evasiveness and possible duplicity regarding the two accounts which are the subject of the second application. The co-mingling of funds tends to ring alarm bells because it is often – though not always – a sign of financial abuse.

However, as I understand the position, one of these accounts is a Santander account, on which there was a balance of £34,500 on 22 October 2010. C Solicitors, in their letter of that date to B Solicitors, stated, “Our client accepts that these monies belong solely to his mother and indeed he had been using them to meet the nursing home fees.”

As regards the other account, C Solicitors admitted in the same letter:

“The position in relation to the Cheltenham & Gloucester account, which we are advised contains approximately £67,000, is more complicated. We understand that these monies were placed into joint names in or around 2005 but that this resulted from EB confirming her wish to gift these monies to our client, given that she had already made substantially larger payments to JB. We understand that, in order to reassure his mother of his best intentions towards her, our client indicated that, whilst he was happy to accept the gift, the money should perhaps be placed into joint names.”

Although I would be reluctant to accept this statement at face value, it is important to keep matters in perspective. Mr O’Sullivan has stated in paragraph 20 of his skeleton argument that IB is prepared to pay one half of the balance on the Cheltenham & Gloucester account into a designated deputyship account. Accordingly, we are talking about a sum of, at most, £33,500 and the legal costs that would be incurred by members of the Chancery bar conducting a full investigation of the status of the funds on this account would be disproportionate, bearing in mind that EB has overall assets in excess of £1 million, and JB, who is a co-beneficiary with IB of EB’s residuary estate, seems to be content with his brother’s explanation.

Accordingly, for these reasons, I allow the first application and dismiss the second application.

The primary source of law on costs in Court of Protection proceedings is the Mental Capacity Act 2005, sections 55 and 56 of which provide that:

“55.

Costs

(1)

Subject to Court of Protection Rules, the costs of an incidental to all proceedings in the court are at its discretion.

(2)

The rules may in particular make provision for regulating matters relating to the costs of those proceedings, including prescribing scales of costs to be paid to legal or other representatives.

(3)

The court has full power to determine by whom and to what extent the costs are to be paid.

(4)

The court may, in any proceedings –

(a)

disallow, or

(b)

order the legal or other representatives concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with the rules.

(5)

Legal or other representative”, in relation to a party to proceedings, means any person exercising a right of audience to conduct litigation on his behalf.

(6)

Wasted costs” means any costs incurred by a party -

(a)

as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative, or

(b)

which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay.

(1)

Court of Protection Rules may make provision -.

(a)

as to the way in which, and funds from which, fees and costs are to be paid;

(b)

for charging fees and costs upon the estate of the person to whom the proceedings relate;

(c)

for the payment of fees and costs within a specified time of the death of the person to whom the proceedings relate or the conclusion of the proceedings.

(2)

A charge on the estate of a person created by virtue of subsection (1)(b) does not cause any interest of the person in any property to fail or determine or to be prevented from recommencing.”

The secondary sources of law relating to costs in the Court of Protection are:

Only two rules need to be considered in this case: namely, rules 156 and 159. These provide as follows:

Property and affairs – the general rule

“156.

Where the proceedings concern P’s property and affairs the general rule is that the costs of the proceedings, or of that part of the proceedings that concerns P’s property and affairs, shall be paid by P or charged to his estate.”

Departing from the general rule

“159.

– (1) The court may depart from rules 156 to 158 if the circumstances so justify, and in deciding whether departure is justified the court will have regard to all the circumstances, including:

the conduct of the parties;

(a)

whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(b)

the role of any public body involved in the proceedings.

(2)

The conduct of the parties includes:

(a)

conduct before, as well as during, the proceedings;

(b)

whether it was reasonable for a party to raise, pursue or contest a particular issue;

(c)

the manner in which a party has made or responded to an application or a particular issue; and

(d)

whether a party who has succeeded in his application or response to an application, in whole or in part, exaggerated any matter contained in his application or response.

(3)

Without prejudice to rules 156 to 158 and the foregoing provisions of this rule, the court may permit a party to recover their fixed costs in accordance with the relevant practice direction.”

Before the implementation of the Mental Capacity Act 2005, the leading case on Court of Protection costs was a very old one, Re Cathcart [1892] 1 Ch 549, and the decision of the Lord Justices in Lunacy in that case can be broadly summarised as follows:

I see no reason for departing from the general rule in property and affairs cases. I am satisfied that RC has acted in what he reasonably believes to be EB’s best interests, and the Public Guardian’s investigation has largely endorsed this. Faced with an extremely hostile application to remove him as the deputy, it was inevitable that he should seek to defend his reputation, and it would be unjust to penalise him as to costs. In considering the conduct of the parties generally, it is obvious that the family were extremely difficult clients for RC to deal with. Sometimes they were disingenuous. They were prone to exaggerate and, although they were trigger-happy in firing off complaints left, right and centre, their complaints were not always justified. For example, the Public Guardian’s report confirmed that allegations that RC had failed properly to consult EB’s sons with regard to the sale of the house were untrue, and IB’s intention to apply to the court to remove RC as deputy clearly predated the burst pipe incident, which in many respects was a red herring.