IMPORTANT NOTICE
This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the incapacitated person and members of their family must be strictly preserved. All persons, including representatives of the media must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.
MENTAL CAPACITY ACT 2005
First Avenue House
42-49 High Holborn
London WC1V 6NP
Before:
SENIOR JUDGE LUSH
Re SF
THE PUBLIC GUARDIAN | Applicant |
- and - | |
MF | Respondent |
Nadia Dhillon of the Office of the Public Guardian for the Applicant
The respondent in person and unrepresented
Hearing date: 13 October 2015
JUDGMENT
Senior Judge Lush:
This is an application by the Public Guardian for the court to revoke an Enduring Power of Attorney (‘EPA’) and to direct him to cancel its registration.
The background
Sheila was born on 8 April 1928. She and her husband, Ronald, retired from Lancashire to Powys in the late 1980’s. Ronald died in 1998 and Sheila’s health progressively deteriorated from then onwards.
In 2004 she was compulsorily admitted to hospital in Llandrindod Wells under section 2 of the Mental Health Act 1983 and, when her period of detention under that section expired after 28 days, she remained in the hospital for several months as an informal patient. She was never detained under section 3 of the Act.
For many years she resided in a care home in Llandrindod Wells, but since 20 February 2013, because of her increased care needs, she has lived in a nursing home across the English border in Herefordshire.
She has one son, Martin, who was born on 31 March 1953 and lives in Gerrards Cross, Buckinghamshire. He used to work as a project manager for Ernst & Young, became an independent consultant in 1992, and has now retired.
On 23 October 2004 Sheila signed an EPA, in which she appointed Martin to be her sole attorney, with general authority to act on her behalf in relation to all her property and affairs.
On 9 July 2009 Martin applied to the Office of the Public Guardian (‘OPG’) to register the EPA, having given notice of his intention to do so to Sheila and her four brothers. There were no objections and the EPA was registered on 7 August 2009.
The application
On 31 March 2015 the Public Guardian applied to the court for the following order:
An order under paragraph 16(4)(g) of Schedule 4 to the Mental Capacity Act 2005 for the revocation and cancellation of the registered EPA made by Sheila on 23 October 2004 and registered by the Office of the Public Guardian on 7 August 2009 appointing Martin as her sole attorney.
An order directing that a panel deputy is invited to make an application for appointment as deputy to make decisions on behalf of Sheila in relation to her property and financial affairs with powers given to investigate and report as to the past management of her affairs and to take such steps as are necessary to restore her estate to its correct level.
The Public Guardian also submitted an application notice for an order to freeze Sheila’s bank account.
The application was accompanied by a witness statement made on 31 March 2015 by Sophie Farley, an investigations officer with the OPG, who said that:
Concerns had been raised on 27 November 2014.
Sheila’s unpaid care fees totalled £29,000.
Her property had been sold on 14 November 2006 for £189,000.
Her son, Martin, rarely visits her.
Martin believes that his mother’s care fees should have been publicly funded under section 117 of the Mental Health Act 1983, but the Powys Local Health Board contends that, although Sheila was sectioned under section 2, she was never sectioned under section 3 of the Mental Health Act 1983 and is, therefore, not eligible for public funding under section 117.
Martin had paid himself £49,143.19 (this figure was later extensively revised), which he claimed was for the time he had spent pursuing a legal action on his mother’s behalf against Powys Local Health Board and for visits to Wales to check on her wellbeing.
A Court of Protection General Visitor had visited Sheila on 18 December 2014. She showed no evidence of being able to understand anything at all.
Procedure
On 1 May 2015 I made an order requiring:
the OPG to serve the papers on Martin by 15 May;
Martin to file and serve a response by 5 June; and
the file to be referred to a judge on the first available date after 8 June 2015.
On the same day I made a separate order freezing Sheila’s HSBC account.
On 3 June 2015 Martin objected to the application and filed a witness statement setting out his reasons for objecting.
On 13 July 2015 I made an order requiring:
the OPG to respond to Martin’s witness statement by 21 August;
Martin to file and serve any additional evidence by 18 September; and
the matter to be listed for an attended hearing on 13 October 2015.
Sophie Farley filed two further witness statements on 14 August and 10 September 2015.
Martin filed a response on 1 October 2015.
The hearing
The hearing took place on Tuesday 13 October 2015 and lasted fifty minutes. It was attended by:
Nadia Dhillon of the OPG and her colleague, Jonathan Barnes; and
Martin.
Nadia Dhillon said that, as far as the Public Guardian was concerned, there were three main issues in this case:
Martin hadn’t paid his mother’s care fees;
he wasn’t providing a personal allowance to pay for her toiletries, hairdressing and chiropody; and
his charges for acting as her attorney were excessive.
I shall deal with each of these issues in turn.
Non-payment of care fees
Whilst acknowledging that there is an ongoing dispute between Martin and Powys County Council and the Powys Local Health Board, Sophie Farley said:
“The Public Guardian believes, whilst Martin attempts to resolve the dispute, it would be in Sheila’s best interests that he continues to pay her care fees. If it transpires that she qualifies for NHS Continuing Health Care and has been eligible for a period of time, then Martin will be entitled to claim a refund on overpayment of care fees.”
In fact, Powys Local Health Board has already reimbursed Sheila for an overpayment of care fees made during periods in which she was eligible for NHS Continuing Health Care funding. In a letter to the OPG dated 12 March 2015 the Health Board said:
“In June 2013 a claim for retrospective Continuing Health Care funding was considered for the period relating to 25/04/05 to 15/8/10. The clinical evidence supported that a reimbursement of fees should be made for the periods 29/12/05 to 23/6/06 and 05/01/07 to 18/11/09 only, which was accepted by the claimant. Calculations of reimbursement in respect of fees for these two periods were assessed as £82,007.63 and payment was made for this amount.
The claim was pursued on behalf of the family by Hugh James Solicitors, Cardiff, and a cheque payment of £82,007.63 was made payable to the Hugh James account on 29 August 2013 which showed as being cashed on the bank statement on 4 September 2013.
There is an additional period that the claimant has requested a retrospective review on, this being 16/08/10 to 25/02/13. This period of care is currently being progressed but no recommendation on any reimbursement of care fees has been made as yet.”
Non-payment of a personal allowance
In her final witness statement, Sophie Farley of the OPG said:
“On 25 August 2015, I contacted [the nursing home] regarding any personal allowance they had received for Sheila. On 3 September 2015 I received a response enclosing a personal allowance account, which shows that a payment of £213 was made on 23 June 2014. Since June 2014 no payment has been made. The outstanding balance on 30 June 2015 was £496.50.”
Excessive remuneration
In her final witness statement, Sophie Farley also said:
“In my first witness statement dated 30 March 2015 I stated … that Martin had claimed a total of £49,143.19 since the EPA was registered on 7 August 2009. In Martin’s witness statement he has stated that Hugh James Solicitors sent him a cheque for the amount of £68,146.26. Martin has stated he paid this into his own account in part payment for the costs he had incurred. This amount added to the £49,143.19 amounts to a total of £117,289.45. The Public Guardian believes the amount of £117,289.45 is an excessive amount to claim for out of pocket expenses.
Martin states that he charged for the visits he made to Sheila when he would visit to check for signs of physical abuse due to her mistreatment at [her previous residential care home in Llandrindod Wells]. Martin is an attorney under the EPA, which covers property and financial affairs only. Therefore his visits to check for physical abuse, even if they were necessary to safeguard Sheila, were not part of his role as attorney. Therefore, the Public Guardian believes Martin was not entitled to claim expenses for these visits.”
Martin’s response
In response to the charge that he had not paid his mother’s care fees, Martin said in his second witness statement:
“Powys CC and Powys LHB do not appear to have any interest in resolving the dispute and from their correspondence and witness statements, I believe that the OPG knows this.
It would be in Powys CC and Powys LHB ‘best interest’ to have care fees paid, not Sheila’s.
If any payments are made to Powys CC before restitution by Powys LHB, then the chances of getting restitution from Powys LHB appear to be slim.
If my mother’s care fees are paid from now on, Powys LHB will seek to avoid refunding monies owed.”
In response to his failure to provide a personal allowance for his mother, Martin said at the hearing:
“We get charged a lot for toiletries, whereas we were not charged at all at [her previous residential care home in Llandrindod Wells]. I also don’t think she needs colour tinting. I know these are small points. I paid the charges in 2014 and I was going to pay them this year.”
As regards the amount of remuneration he has paid himself, Martin said in his witness statement dated 1 October 2015 that:
“In my view these are not excessive, considering I have been fighting this battle with Powys LHB since 2004. If I had not spent the large amounts of time on this case, then my mother’s estate would still be illegally paying the full costs of care, and the 2013 compensation would never have been forthcoming. Finally, I have not taken any gifts from the estate (which could have been in the region of £33,000 from 2004 to 2015).
At the hearing Martin said that he had charged his mother a daily rate of £400 for visiting her and for the work he put into the claims against Powys Local Health Board. This was his usual daily charging rate when he was a self-employed independent consultant prior to his retirement.
In response to the Public Guardian’s application generally, Martin said:
“I see no need to replace myself. I am the sole heir and because of my mother’s dementia and current poor health, there is no need to protect the estate’s financial interests, which are effectively mine.
The OPG have now recommended that [a deputy] is appointed from their own panel. I would expect any appointed deputy from the OPG to seek to assist the Police in bringing criminal charges against Powys LHB, and to recover the monies owed from Powys LHB. If this is not part of the remit then appointing will be a waste of time and any costs incurred will be to the detriment of my mother’s estate and my own financial interest in my mother’s estate. However, it is apparent that the OPG do not want to pursue the recovery of monies owed from the Powys LHB. The OPG appears to be acting on behalf of Powys CC and Powys LHB, and as such is effectively colluding in their fraudulent behaviour. Consequently I believe that the OPG is not a fit or proper organisation to protect the interest of my mother’s estate.
On the face of it, the OPG’s desire for me to repay money from my mother’s estate makes little sense. I am the sole beneficiary of the estate and any restitution I made would come straight back to me on my mother’s death, which considering her present state of health, is likely to be sooner rather than later. ”
The law relating to the revocation of an EPA
The Public Guardian’s application was for an order under paragraph 16(4)(g)of Schedule 4 to the Mental Capacity Act 2005 for the revocation and cancellation of the registration of the EPA.
Paragraph 16(4) provides that:
“The court must direct the Public Guardian to cancel the registration of an instrument registered under paragraph 13 in any of the following circumstances -
(g) on being satisfied that, having regard to all the circumstances and in particular the attorney’s relationship to or connection with the donor, the attorney is unsuitable to be the donor’s attorney.”
Paragraph 16(5) goes on to state that:
“If the court directs the Public Guardian to cancel the registration of an instrument on being satisfied of the matters specified in sub-paragraph (4)(f) or (g) it must by order revoke the power created by the instrument.”
About fifteen years ago there was a series of reported decisions on the unsuitability of an attorney, which considered the effect of inter-sibling rivalry on the management of an elderly person’s property and affairs. None of these decisions is of any assistance in this matter.
The Mental Capacity Act 2005 is supplemented by a Code of Practice, paragraph 7.79 of which states that “all attorneys must comply with the duties described in paragraph 7.58-7.68 above.” Paragraph 7.60, which describes an attorney’s fiduciary duty, provides as follows:
“A fiduciary duty means attorneys must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. They must also not allow any other influences to affect the way in which they act as an attorney. Decisions should always benefit the donor, and not the attorney. Attorneys must not profit or get any personal benefit from their position, apart from receiving gifts where the Act allows it, whether or not it is at the donor’s expense.”
Decision
One would be hard pressed to find a more callous and calculating attorney, who has so flagrantly abused his position of trust.
Martin hasn’t paid his mother a personal allowance since June 2014 because toiletries were free in her previous residential care home and he resents having to pay for them now in the nursing home in which she has been living since February 2013. He even begrudges her having her hair tinted.
The assertion that he hasn’t taken “any gifts from the estate” adds nothing to his credibility. If anything, it highlights his lack of it. He was referring to the £3,000 annual exemption for inheritance tax (‘IHT’) purposes, but Sheila’s estate is well below the threshold at which IHT becomes chargeable and no one is entitled, as of right, to receive a gift of £3,000 each year.
As regards the non-payment of Sheila’s care fees, I agree with the Public Guardian’s stance that “whilst Martin attempts to resolve the dispute (with Powys Local Health Board), it would be in Sheila’s best interests that he continues to pay her care fees.”
There is no evidence to support Martin’s suggestion that “if my mother’s care fees are paid from now onwards, Powys LHB will seek to avoid refunding monies owed.” The letter from Powys Local Health Board to the OPG, dated 12 March 2015, to which I referred in paragraph 21 above, shows that the Health Board has acted in good faith and reimbursed any fees that were overpaid in the past. Martin, on the other hand, has persistently acted in bad faith.
As for his claim for reimbursement of out-of-pocket expenses for acting as his mother’s attorney, paragraph 6 of Part A of the prescribed form of Enduring Power of Attorney, which he and his mother signed on 23 October 2004, stated that:
“Your attorney(s) can recover the out-of-pocket expenses of acting as your attorney(s). If your attorney(s) are professional people, for example solicitors or accountants, they may be able to charge for their professional services as well. You may wish to provide expressly for remuneration of your attorney(s).”
Sheila did not expressly provide for Martin to be remunerated and if he intended to charge a daily rate of £400 for acting as her attorney, he should have applied to the court for authorisation pursuant to paragraph 16(2)(b)(iii) of Schedule 4 to the Mental Capacity Act 2005. By not doing so, he behaved in a way that contravened his authority and was not in the donor’s best interests.
The Public Guardian believes the amount of £117,289.45 is an excessive amount to claim for out of pocket expenses. I would put it more strongly than that. I believe that charging one’s elderly mother a daily rate of £400 for visiting and acting as her attorney is repugnant.
Martin suggested that the appointment of a panel deputy would be a waste of time and money because his mother’s estate is effectively already his. I disagree. The panel deputy will, for the first time in eleven years, place Sheila at the centre of the decision-making process, rather than view the preservation and enhancement of Martin’s inheritance as the paramount consideration.
Having regard to all the circumstances, therefore, I am satisfied that Martin is unsuitable to be Sheila’s attorney, and I shall revoke the EPA and direct the Public Guardian to cancel its registration. I shall also direct an officer of the court to invite a panel deputy to apply to be appointed as Sheila’s deputy for property and affairs.