PP, Re

I refer to my judgment of 15^th May 2015 in the application by BB for retrospective ratification of gifts out of the funds of PP (referred to as PP in that judgment) which identifies the people involved in this case and sets out the facts relevant to that application and to the matters which with I am now dealing. I do not propose to repeat what was said in that judgment but will refer to it from time to time in this judgment. I will use the same anonymisation apart from the person who this case is about who I shall call PP. The hearing on 31^st August 2016 was in public. The hearing and this judgment are subject to the provisions of an order dated made on 29^th June 2016 under Practice Direction Transparency Pilot.

My decision was that I refused to make the order sought by BB ratifying a gift of £324,000 which is a potentially exempt transfer for inheritance tax purposes (“the PET”) to JB. Instead I ordered that the sum of £164,000 be repaid to PP. I further ordered that the amount of £160,000, which had been used by BB and JB to purchase a property in November 2014, should be brought into account by the making of a hotchpot clause in a codicil to PP’s will, so that JB would not obtain a greater share of her estate than PP had intended.

In my judgment I expressed my concern at the actions of BB and CD as attorneys for PP and set out four possible options for the management of PP’s property and affairs and for decisions about her health and welfare which were:

In my order of 15^th June 2016 I directed that the attorneys should file witness statements setting out their positions on the options. They did so and the Official Solicitor as litigation friend for PP filed a position statement in response seeking revocation of both LPAs. I gave further directions for service and exchange of evidence by order dated 2^nd September 2015, in the expectation that I would make a decision on the basis of written evidence and submissions at a paper hearing on the first available date after 22^nd September 2015.

I had directed that the Official Solicitor may serve a copy of my judgment on the Public Guardian. On 18^th November 2015 the court issued an application by the Public Guardian for revocation of both LPAs and for appointment of a deputy from the Public Guardian’s panel of deputies to be deputy for property and affairs for PP. That application was dealt with by the Senior Judge. On 28^th April 2016 the file was put before me again and I gave directions to bring the matter to a final attended hearing which took place on 31^st August 2016.

A trial bundle of documents was made available to me at the hearing which contained the evidence previously before me in the form of the application, acknowledgments of service, orders, evidence as to capacity, witness statements by BB, evidence obtained from the file of PS’s firm and from PP’s current financial advisers, IHT tax calculations, documents from two will files, documents relating to the will and other dispositions made by EP, copies of the Lasting Powers of Attorney and evidence of registration, and documents relating to an investigation by the Public Guardian. Additional documents as set out in the index to the trial bundle had been added to include: the application by the Public Guardian, witness statements filed by Laura Wootton of the Office of the Public Guardian and further witness statements by BB and CD, the full report by the Court Special Visitor dated 8^th February 2014, copies of Lasting Powers of Attorney for Property and Affairs and Health and Welfare made by PP on 19^th July 2012 and some attendance notes made by CD.

I read position statements prepared by counsel for all parties and a case summary and schedule of costs prepared by Counsel for the Applicants prior to the hearing. I heard oral evidence from CD and BB. Counsel for all parties made final submissions on revocation of the LPAs and on the costs of the application for ratification. I reserved my judgment.

The issues before me are

Neither the Public Guardian or the Official Solicitor sought the revocation of the Lasting Power of Attorney for Health and Welfare which was brought into issue at my own instigation. I accept that as a result counsel for the Applicants did not have a fully particularised case set out by an opponent to answer.

I am satisfied on the basis of the opinion of the Court Special Visitor set out in his report of 8^th February 2014 that PP does not have capacity to revoke either of the LPAs. In those circumstances the court has jurisdiction to revoke the LPAs pursuant to section 22(4)(b) of the Mental Capacity Act 2005.

PP’s financial position has changed slightly since the hearing on 25^th February 2015. BB has repaid the sum of £164,000 in compliance with my order of 15^th June 2015. PP’s total capital assets now amount to £1,256,911. Of this sum, £370,000 represents the estimated value of the property purchased in her name in November 2013 which is now rented to students (“the Rental Property”). Her investments made through St James Place are valued at £568,656, of which £350,000 (or a greater sum because of capital growth since February 2015) is invested in schemes to provide relief from inheritance tax (“IHT”). Her annual income has reduced slightly to £37,176 and her expenditure has increased to £38,250. To date PP has paid very little tax on her rental income. When the start up expenses are no longer offset against income, her tax bill may be higher.

CD set out in her witness statements the actions she had taken as attorney for PP. She became involved in PP’s affairs once the LPAs were registered on 8^th January 2013. She communicated regularly with BB and has developed a good working relationship with him. They regularly review PP’s investments with her current Independent Financial Adviser (“IFA”). She has visited PP. She and BB took a joint decision in February 2013 to purchase the Rental Property, at that time envisaged as a home for PP. She has left BB to deal with the practical side of managing the Rental Property. She said that she is fully aware of her responsibilities under the Mental Capacity Act 2005 and fully appraised of the Code of Practice to the Mental Capacity Act 2005.

CD confirmed in her oral evidence that she was not aware that BB had gifted £324,000 to JB, together with further gifting of £10,610 which was given to JB, their children and a carer, until she received a letter from the Public Guardian dated 16^th August 2013 (D613). She said that as a result she arranged to receive the bank statements for PP’s accounts thereafter (apart from a short period in 2016). She was aware that the PET was a contravention of the authority given to BB by the Lasting Power of Attorney for Property and Affairs (“LPA PA”). She did not advise BB that he had contravened his powers because he had already made the PET and other gifts and the matter was being investigated by the Public Guardian. She told him that the money might have to be repaid and therefore should be ringfenced (D617). She did not tell him to repay it immediately.

CD consulted LR, the partner who had drawn up the LPAs for PP, who told her it was reasonable for a woman with an estate of £1,300,000 to seek advice on IHT mitigation. She was told by BB that PP’s own IFA had given her advice in a letter about tax planning. She formed the view that it was a reasonable decision and in PP’s best interests to make a gift to avoid the incidence of IHT. In arriving at that conclusion she did not consider the possibility that PP’s care costs might increase substantially over her expected life span. CD confirmed that she had a copy of PP’s will but did not consider that the PET might interfere with the devolution of her estate.

In November 2014, fifteen months after the start of the investigation by the Public Guardian and while the application for ratification of gifts was proceeding in the Court of Protection, BB and JB used £160,000 of the PET in the purchase of a property in the same village as the care home in which PP now lives (“the W House”). BB did not seek authorisation of the court for this nor did he consult CD. Her monitoring of the bank statements would not have revealed it because the sum of £324,000 was held by BB and JB in their own accounts. CD could not recall when she became aware of this, whether before or after completion of the purchase. She did not put any other safeguards in place when she found out.

CD was asked why BB’s legal costs of making the application for ratification, in which he is represented by the firm of which CD is a partner, had been paid out of PP’s funds. No order for costs has been made in the application under Rule 156 of the Court of Protection Rules 2007 which would give authority for such a payment. CD said that she knew nothing about this, but only that her own professional costs of acting as attorney were paid out of PP’s funds. She did not query the amounts which totalled £19,597. I was later informed by counsel for BB and CD that the transfers to meet BB’s costs were the responsibility of the partner acting for BB in this application.

CD said in her witness statement dated 28^th May 2015 that she would only wish to continue as attorney or deputy for PP if BB also continued in that role or a suitable alternative person was to be appointed in his place. Specifically she did not feel equipped to take on management of the Rental Property and considered that would be unduly costly. She said that she had confidence in BB and would prefer to continue working with him.

I asked CD some questions about her role as attorney under the Lasting Power of Attorney for Health and Welfare (“LPA HW”).

I had noted in the trial bundle of documents the inclusion of copy unregistered Lasting Powers of Attorney for Property and Affairs and for Health and Welfare made by PP on 19^th July 2012 (D112), some three months before the LPAs which were subsequently registered by the Public Guardian. Both documents were fully executed including by BB and CD as attorneys. The differences between them were:

CD told me that LR had dealt with the LPAs and she had not met PP until 16^th October 2012 when she had a brief discussion with her. She was asked to act as attorney because PP wanted a female solicitor as her attorney and LR was retiring. Since registration of the LPAs, CD has visited PP on 4^th February 2013, 12^th March 2014, 23^rd June 2015, 11^th November 2015 and 18^th May 2016. It is possible that there are other visits which have not been evidenced. CD’s attendance notes of the visits are included in the bundle (I72-81)

I asked CD how she had prepared for having the responsibility of making a decision to agree to or refuse life sustaining treatment on the registration of the LPA HW in January 2013. This was a decision she might be making entirely on her own if BB were unavailable in an emergency. She did not explore whether PP had capacity to make the decision herself at that time or subsequently. She did not try and establish PP’s wishes and feelings, beliefs and values in January 2013 or subsequently. She visited PP on 23^rd June 2015 at the request of the care home to consider whether PP should be given Do not Resuscitate status. She formed her view that PP should not be given such status on the basis of her general health and well being, her ability to react well with staff and CD and her feeling that she would want her own mother to be resuscitated if she were in PP’s situation. She spoke of discussing personal welfare decisions with BB and JB but not with any other family members or friends or with those currently caring for PP.

I asked CD how she had gone about making other personal welfare decisions for PP under the LPA HW. I asked if she had sought capacity evidence when making a decision about where PP should live in February 2013. She said that she had relied on the general practitioner’s advice as to PP’s general mental health and her own assessment of PP’s capacity. She went to see PP and spent about an hour discussing the move with her. She found PP very repetitive. She was concerned that PP would not be all right in her rented accommodation and therefore concluded that it was in her best interests to buy a house for her.

BB gave evidence on his role as attorney under the LPA HW only, on the basis that he had already given lengthy evidence as to his management of PP’s financial affairs at the previous hearing. He too could not recall the making of Lasting Powers of Attorney in July 2012 or why they were changed. However he said that, in conversation with the general practitioner for the signing of the Part B certificate for the LPA HW, PP told the GP that she wanted to stay alive for the sake of her dogs, which was the reason for giving authority to her attorneys to make decisions about life sustaining treatment. PP had chosen to have a professional as her attorney for personal welfare decisions because she had a very good relationship with LR who acted as her solicitor. Unfortunately LR was about to retire and proposed CD as an alternative because she was caring and compassionate.

BB said that he had involved CD in personal welfare decision making about where PP should live and about the DNR decision. He also consults JB. He has not sought to limit PP’s contact with family and friends and has taken advice from the manager of the care home as to how telephone contact and visits should be accommodated. As attorney he was able to sign consent forms for PP’s medical and dental treatment and it would create difficulties if he did not have such authority.

In paragraphs 95 and 96 of my judgment of 15^th May 2015 I set out the law and guidance on the making of gifts by attorneys, to be found in section 12 of the Mental Capacity Act 2005 and paragraphs 7.40 to 7.42 of the Code of Practice to the Mental Capacity Act 2005 and to which I now refer.

Section 22 of the Mental Capacity Act 2005 deals with the court’s powers in relation to revocation of Lasting Powers of Attorney.

Paragraph 7.59 of the Code of Practice to the Mental Capacity Act 2005 deals with the issue of Duty of Care

“’Duty of care’ means applying a certain standard of care and skill – depending on whether the attorney is paid for their services or holds relevant professional qualifications…..if attorneys are being paid for their services, they should demonstrate a higher degree of care and skill. Attorneys who undertake their duties in the course of their professional work (such as solicitors…) must display professional competence and follow their profession’s rules and standards”.

My attention was drawn to the decision of Senior Judge Lush in the case of In Re Harcourt: The Public Guardian v A [2013] COPLR69. SJ Lush revoked the Lasting Power of Attorney for Property and financial affairs given to P’s daughter who was a local government auditor and who had failed to comply with the court’s directions. He commented in paragraph 53 that

“in cases of this kind it is never particularly easy to apply the best interests checklist set out in section 4 of the Act. Nonetheless any difficulty encountered in applying the checklist does (not) mean that decisions such as …terminating an attorney’s appointment are not in the donor’s best interests”

At paragraph 59 SJ Lush referred to the professional qualifications of the attorney and stated that it would be reasonable to expect a higher standard of care from her in terms of an awareness of her fiduciary duties.

At paragraph 71, SJ Lush went on to make a general observation about revocation of Lasting Powers of Attorney

“In the absence of appropriate safeguards, the revocation by the court of a Lasting Power of Attorney, which a donor executed when they had capacity and in which they chose a family member to be their attorney, would be a violation of their Article 8 rights. For this reason the Mental Capacity Act 2005 has been drafted in a labyrinthine manner to ensure that any decision by the court to revoke an LPA cannot be taken lightly.”

It was common ground that statute and case law set a high bar for a decision to revoke a Lasting Power of Attorney. The court must approach the position of each attorney independently and make a decision on the basis of the evidence relating to that attorney alone. The court has a discretion; if the ground or grounds are made out under section 22(3)(b) the court may, not must, revoke the Lasting Power of Attorney.

In his written and oral submissions, counsel for the Public Guardian argued that it was incontrovertible that BB had exceeded his authority and not acted in the best interests of PP on the grounds set out in my previous judgment, He identified five reasons why the court should exercise its discretion in respect of BB’s attorneyship:

In relation to CD, counsel for the Public Guardian accepted that she had no knowledge of the PET. The payment of BB’s costs out of PP’s funds contravened CD’s authority. As to whether CD had acted in PP’s best interests, counsel argued that she had failed to exercise proper oversight over the actions of BB. She showed a worrying lack of familiarity with section 12 of the Mental Capacity Act 2005. She formed the view that the PET was in the best interests of PP without taking into account her likely future care needs, nor, despite her oral evidence, was it clear that she recognised the impact on the devolution of PP’s estate. BB was able to use half of the PET to purchase a property in the name of himself and his wife without CD’s knowledge, so her safeguarding procedures were inadequate. She was unclear as to when she first learned of this which demonstrates a laissez faire attitude.

Counsel for BB conceded that BB had acted in contravention of his authority but that his actions were not such as to justify the court exercising its discretion to revoke the LPAs.

In relation to the Public Guardian’s five points, counsel contended

As to CD, counsel explained that KF, solicitor for BB, had authorised the transfers from PP’s money to pay for BB’s costs of the ratification proceedings. He said that CD was entitled to rely on KF’s advice. He put forward the following arguments on the five points

Counsel said that PP had wanted a female solicitor as her attorney. CD has visited and now got to know PP over a period when PP’s awareness was higher. A new deputy will not be able to replicate the insight she has gained into PP. She also knows the family. There is a risk of a rift if an independent deputy is appointed.

As to the future management of PP’s property and affairs, counsel urged me either to leave the LPAs in place or appoint CD and BB as deputies. CD does not want to act alone without BB’s involvement. She could be sole attorney or deputy and allow BB to manage the Rental Property. If the court has concerns, it could give directions for the obtaining of advice from another IFA. It is in PP’s best interests that BB as the family member chosen by PP should be kept in place.

Counsel then turned to the LPA HW. PP chose BB and CD to be her attorneys and there is no reason to go behind that decision. There was no evidence that either attorney had contravened their authority. Their decisions (on purchase of property, moving PP to the care home and on contact) could not be criticised. CD might not have arrived at her decisions in the best way but they were the right decisions. If I revoke the LPA HW it will cause difficulty for the care home particularly on obtaining consent to medical and dental treatment. BB knows PP’s views on resuscitation.

Counsel for the Official Solicitor agreed with the submissions of the Public Guardian. He made the following additional arguments in relation to BB

As to CD, he criticised her failure to respond appropriately when she learned of the PET. She decided it was in PP’s best interests without appreciating that it was outside the scope of BB’s authority or weighing the arguments as to why it was not in PP’s best interests. She did not act effectively to secure the funds at this point when they were all in cash and could have been repaid. BB went on to use part of the PET to purchase the W House without her knowledge. CD also failed to notice that BB’s legal costs were being defrayed out of PP’s funds without authority. She has demonstrated a lack of knowledge of the law. She is not willing to act as sole attorney or deputy.

Counsel for the Official Solicitor argued that the court should remove BB and CD as attorneys for the reasons set out. They have had an opportunity since the issue of the ratification application on 25^th March 2014 to demonstrate that they can act in PP’s best interests and within the scope of their authority yet they have failed to do so. BB purchased the W House using part of the PET. CD failed to set up adequate safeguarding to prevent this. She failed to notice that BB’s own legal costs had been defrayed out of PP’s funds without authority from the court.

Section 4 of the Mental Capacity Act 2005 requires me to consider all the relevant circumstances and to take the following steps.

I must consider whether PP is likely to have capacity in relation to the issues in this case and if so when that is likely to be. I am satisfied that there is little or no prospect that PP will recover capacity to revoke the LPAs.

I must so far as is reasonably practicable permit and encourage PP to participate or to improve her ability to participate in these proceedings and the decision I have to take. PP has participated through her examination by the Court Special Visitor. Her views are set out in his report of 8^th February 2014. PP has also spoken to her social worker LR more recently and I have been shown an email dated 5^th February 2016 from LR to the Public Guardian and a Safeguarding Report dated 18th February 2016.

I must consider so far as is reasonably ascertainable PP’s past and present wishes and feelings (and in particular any relevant written statement made by her when she had capacity).

As to PP’s past wishes and feelings, I refer to paragraphs 37 and 104 of my previous judgment. PP was very distressed by finding out on 24^th June 2013 that BB had transferred money out of her funds in March and April 2013 to give to JB. She was worried about the powers she had given him and CD under the LPA PA which she did not realise were exercisable at that time. She continued to express anger and distress about this.

PP was still preoccupied and concerned about BB’s conduct when she was seen by the Court Special Visitor on 8^th February 2014. He said

“I extended the questioning about the Power of Attorney by asking whether she would like BB to continue to have the Power of Attorney. She stated that she would have like him to continue but her daughter JB is out to grab her money. She stated that JB wants to buy a farm and therefore has been asking her to give her money and she stated that JB through BB would get the money and buy property for her own self…..”

Since that time, PP has remained preoccupied (at least when questioned) with anxieties about her finances and worry that she cannot trust JB and by extension BB. PP’s social worker recounted the following observations from her meeting with PP in February 2016.

“Met with PP she was worried about her finances and whether she had enough money to remain at (S Care Home). She mentioned on several occasions that she did not want her family to manage her finances and wants someone else to look after it for her.”

The LPAs are relevant written statements by PP. She chose BB and CD to be her attorneys. I am told that she wished to have a female solicitor to be her attorney to act in conjunction with BB, and I infer from that that she wished to have some professional supervision and oversight of BB’s actions.

I must also consider the beliefs and values that would be likely to influence PP’s decision if she had capacity. I obtained the clear impression when preparing my previous judgment that PP wanted to ensure that she had sufficient funds so that she would be well cared for in her old age (see paragraph 62 of my previous judgment). Further I am aware that she had a long and trusting relationship with PS, her previous IFA, and conclude that she is happy to rely on professional advice and have professional involvement in the management of her finances. Indeed she told the Court Special Visitor that her accountants were managing her financial affairs (D173).

I must taken into account if it is practicable and appropriate to consult them the views of anyone engaged in caring for PP or interested in her welfare, I have been made aware from documents filed by BB that the manager of S Care Home thinks very highly of BB’ and JB’s involvement in PP’s life (D482-483).

“”Since PP’s admission to the home, BB and JB have always been very supportive of PP’s welfare which has resulted in decisions always being made in PP’s best interests……PP’s mental and physical wellbeing has improved since BB’ and JB’s family has moved to (the village). PP is more positive, outgoing and a happier lady who now interacts better with others, is actively more interested in the lives of others and is enjoying a better quality of life overall at present within S Care Home”.

I have the views of BB from his written and oral evidence in this and the previous hearing. He seeks to remain as attorney for PP under the LPAs or as deputy. He considers that he is best placed to manage her finances, and particularly to take on the practical management of the Rental Property, as a member of her family. He does not think that his actions have disqualified him in any way for having responsibility for PP. In his view PP’s wishes have fluctuated since she lost capacity. He has told me his perception of PP’s views about her family, where she should live, who should be her attorneys under the LPAs and what she feels about being resuscitated if she were to have a life threatening illness (paragraph 104 of my previous judgment and see above).

I have to consider the views of any donee of a Lasting Power of Attorney granted by PP. CD’s views were given in her written and oral evidence. She too wishes to remain acting as attorney or deputy for PP but only in conjunction with BB or another person. She does not want to take on any responsibility for management of the Rental Property.

I do not know the views of JB or any other member of PP’s family or friends apart from BB.

What weight should I attach to the expressed views of PP? I refer to paragraph 95 of my previous judgment in which Munby J as he then was sets out how to approach this question.

First I must consider the degree of PP’s incapacity over the relevant period. PP has since July 2013 been expressing worry and anger that JB has, by BB’s actions, taken her money and she has said numerous times that she does not want BB to manage her affairs because of this. PP had capacity to make the LPAs in October 2012. BB considered that she had capacity to manage her property and affairs until about February 2013 (paragraph 103 of my previous judgment). IN July 2013, her IFA was still dealing directly with her (albeit that BB criticises him for doing so). PP was able clearly to express her views in July 2013 and may be thought to be relatively close to the borderline at that time. Since then her capacity has declined over time but it is acknowledged by BB’s counsel that she was able to express wishes and feelings of which I should take account to the Court Special Visitor in February 2014.

Second I must consider the strength and consistency of the views being expressed by PP. She has indeed expressed the very consistent view that she does not want BB to be her attorney because of JB’s influence over him which she fears will result in her money being taken away.

As to the impact of the knowledge that her views are not being heeded, PP’s memory is worsening and she may not recall her concerns unless reminded of them. However when asked (as for example by her social worker in February 2016) her worries about her financial security surfaced again and she repeated that she did not want her family to manage her money. It seems to me that it remains a source of worry and concern to her.

Fourthly I must consider the extent to which PP’s wishes and feelings are, or are not, rational, sensible, responsible and pragmatically capable of sensible implementation in the particular circumstances. Given that she did not want JB to have access to her money, that she appointed BB together with a professional as attorneys in order to avoid JB gaining access to her money, and that her fears were realised by the actions of BB in gifting a significant proportion of her estate to JB, her wishes and feelings appear rational sensible and prescient. Her wish to have professional management of her estate rather than management by her family is certainly capable of sensible implementation.

In my judgment BB has acted in contravention of his authority as attorney under the LPA PA and in breach of section 12 of the Mental Capacity Act 2005 in making the PET of £324,000 to JB and using a significant portion of that money in the purchase of the W House without seeking authority of the court. He appeared to have no compunction in doing so despite the fact that CD had advised him to retain the money and that the matter was subject to the jurisdiction of the court with the trial date fast approaching. By using the sum of £160,000 for the purchase he potentially put it beyond recovery without expensive legal proceedings to force sale of the W House, if he was unable to raise that sum by way of mortgage. I consider that BB has failed to act in PP’s best interests in making the PET. There is no evidence that this accorded with PP’s past or present wishes or feelings, beliefs or values. It undermined her wishes as to the devolution of her estate under her will.

I also consider that BB did not act in PP’s best interests in instructing an IFA to make investments whose primary purpose was for the saving of IHT. I consider that BB has a conflict of interest in carrying out a review of the IHT saving Octopus investments and deciding whether they are in PP’s best interests and in making future decisions about investments solely in PP’s best interests without regard to whether JB, he and their family will benefit.

I do not consider that BB’s actions since he became aware of the Public Guardian’s investigations and since he submitted to the jurisdiction of this court give cause for confidence that he will act in PP’s best interests in the future. I am not satisfied that supervision by CD or directions given by the court would be sufficient to ensure that BB acts at all times solely in PP’s best interests. I have therefore decided that BB’s appointment under the LPA PA should be revoked.

As to CD, I do not consider that she has contravened her authority as attorney under the LPA PA. She was unaware that BB had made the gift or that he had failed to follow her advice to ringfence the money and used half of it in the purchase of the W House. It appears that she was not responsible for using PP’s money to pay BB’s legal fees to her firm.

However I consider that CD has not acted in PP’s best interests. When she learned of the PET, she was quick to approve the decision that BB had made without conducting her own enquiry pursuant to section 4 of the Mental Capacity Act 2005 as to whether it was in PP’s best interests. She has been uncritical of BB’s management of PP’s affairs. She instituted safeguarding measures but they failed to reveal either that BB had used £160,000 of PP’s money in the purchase of the W House (when the PET had not been ratified) or that almost £20,000 of PP’s money had been used to pay BB’s costs in the application for ratification. In my judgment she has failed in her role as professional attorney to provide sufficient oversight of BB and ensure that he was acting in the best interests of PP. I am not confident that she would provide adequate oversight of BB in the future. She does not want to have sole responsibility for PP’s financial affairs. I have therefore decided that CD’s appointment under the LPA PA should be revoked.

For the reasons I have just set out, I do not consider that it is in PP’s best interests that either BB or CD or both of them should be appointed as deputy for property and affairs for PP. I therefore direct that a deputy from the Public Guardian’s panel of deputies should be appointed to act as deputy for property and affairs for PP and that he or she should undertake a review of PP’s investments. The choice of deputy should take into account that the deputy will have to be able to manage the Rental Property, which is a task undertaken by many professional deputies. PP may prefer a female deputy, although she had no difficulty in her relationship with PS, previously her IFA.

As to the LPA HW, I am not convinced that either attorney fully understood, when they made personal welfare decisions for PP, that they had no authority to make those decisions if PP retained capacity to make them herself. Capacity is time and issue specific. Capacity to make decisions about accommodation or care are completely separate issues from capacity to manage property and affairs. Neither attorney appears to have sought advice as to whether PP had relevant capacity at any stage. Nor was I convinced that CD had taken the necessary steps on each occasion to elicit and weigh in the balance PP’s wishes and feelings in relation to health and welfare decisions but had simply formed her own view, albeit in consultation with BB. However I accept that BB, having very regular contact with PP, was aware of her wishes and feelings. He had gone through a lengthy process of trying to find a home for PP and she had been unable to make a decision about any of the options he proposed. He consulted CD and JB although there was no consultation of any other family members or friends. I recognise that BB and CD are PP’s choice as her attorneys for personal welfare decisions. I do not consider that the decisions they have taken on her behalf have been in contravention of their authority under the LPA PW or have not been in her best interests. In those circumstances I have decided not to revoke the LPA HW.

Section 1(6) of the Mental Capacity Act 2005 requires that before I make my final decision as to revocation:

“…. 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.”

The purpose for which the decision to revoke the LPA PA is required is to ensure that PP’s finances are managed for her own benefit and in her best interests, not for the benefit of others. That objective cannot in my judgment be achieved without revocation of the appointment of both attorneys under the LPA PA.

Section 3(1) of the Human Rights Act 1998 requires the court, so far as it is possible to do so, to read and give effect to the Mental Capacity Act 2005 in a way that is compatible with the European Convention on Human Rights. Article 8 of that Convention provides for the right to respect for private and family life as follows:

The Court of Appeal considered the interrelationship of the Mental Capacity Act 2005 and Article 8 in the case of K v LBX [2012] EWCA CIV79. The Court of Appeal said that the trial judge should approach a decision in which P’s Article 8 rights are engaged by ascertaining the best interests of the incapacitated adult in accordance with the checklist set out in section 4 of the Mental Capacity Act 2005. The judge should then ask whether the resulting conclusion leads to a violation of Article 8 and if so whether that violation is necessary and proportionate.

I have considered the best interests of PP with reference to the best interests checklist in section 4 of the Mental Capacity Act 2005 in relation to the revocation of the LPAs. I have considered whether there are less restrictive options and whether it is in PP’s best interests that they should be adopted. I recognise that my decision to revoke the LPA PA, which reflects PP’s own capacitous choice of her son in law BB and CD as attorneys to manage her property and affairs, constitutes an interference with her Article 8 rights. I consider that interference to be a necessary and proportionate one for the reasons set out above.

I will therefore make an order revoking the LPA PA and directing the Public Guardian to cancel its registration.

I turn to the question of whether I should depart from the general rule in property and affairs cases in the application for ratification of the PET. In that application BB was the applicant and PP through her litigation friend the Official Solicitor was the Respondent.

By Rule 156 of the Court of Protection Rules 2007 where proceedings concern the property and affairs of a person the general rule is that the costs of the proceedings or of that part of the proceedings that concerns his property and affairs shall by paid by the person or charged to his estate.

By Rule 159(1) the court may depart from Rule 156 if the circumstances so justify and in deciding whether departure is justified the court will have regard to all the circumstances including

By Rule 159(2) the conduct of the parties includes

Before the implementation of the Mental Capacity Act 2005, the leading case on Court of Protection costs was Re Cathcart [1892] 1 Ch 549. It has been referred to in judgments on costs since the Mental Capacity Act 2005 came into force and recognised as still having relevance indecisions to depart from the general rule as to costs (see Heywood & Massie). In the case of In the matter of RC Deceased [2010] COPLR 11639140, Senior Judge Lush summarised the decision in Re Cathcart as follows:

BB’s counsel argues that, if BB had decided to apply prospectively for authority to make the PET, costs would have been incurred in any event and would have been paid out of PP’s funds. He contends that BB has been partially successful in his application in that I did not order that the full amount be repaid. If BB delayed in disclosure so that the first trial date was lost, nonetheless the time estimate was insufficient and the Official Solicitor sought extra disclosure so that the first trial date would have been lost in any event. I should make an order for BB’s costs and the OS’s costs to be paid out of PP’s estate or failing that for the OS’s costs to be paid by PP and BB to pay his own costs.

The OS seeks an order for BB to pay PP’s costs and to be responsible for his own costs. In reply to BB’s arguments, counsel contended that when an attorney makes an application for gifts it is inappropriate for the incapacitated person to have to pay the costs of that application. BB cannot argue that he has succeeded in the application. He has had to repay part of the money and the balance has been brought into hotchpot. He has acted outside his authority. Without the investigation by the Public Guardian there would have been no repayment or hotchpot clause. This merits departure from Rule 156. The hearing in December 2014 had to be vacated not only because BB failed to disclose documents until 7 days before the hearing, giving the Official Solicitor insufficient time to consider them, but also because he had failed to serve the application on the identified Respondents as required by PD 9F9 of the Court of Protection Rules 2007. The disclosure opened up new lines of enquiry for the Official Solicitor for which follow up disclosure was required. Obtaining the files of PP’s IFA was highly probative of PP’s views. He contends that I should make an order for BB to bear the costs of the ratification application himself.

Do the circumstances of this application justify stepping away from the General Rule in property and affairs cases? Rule 159 requires me to have regard to all the circumstances of the case including the matters set out in Rule 159(1).

As to the conduct of the parties I consider first the conduct of BB. His conduct prior to the application was in contravention of his authority and not in the best interests of PP as I have determined. He acted for the benefit of JB, himself and his own family rather than for the benefit of PP in relation to the PET. His conduct during the proceedings extended to the use of PP’s money to purchase the W House without seeking permission of the court. In making the PET which altered the devolution of PP’s estate he did not take into account her testamentary wishes, which included the wish to bequeath 50% of her estate to be shared between all her grandchildren (including CH’s children). None of this would have come to light had it not been for the Public Guardian’s investigation.

In relation to the litigation, BB delayed in providing disclosure of documents until 7 days before the first trial date and failed to serve all those affected by the proceedings so that the date was lost. Had such disclosure and service been effected in compliance with the Rules and court orders of 24^th June, 8^th July and 7^th October 2014, the Official Solicitor would have been able to engage in the further enquiries and seeking of additional documentation in a timely manner and indeed to seek an effective trial date with an appropriate time estimate.

It would have been reasonable for BB to make an application to the court to seek prospective approval for gifts out of PP’s estate, including gifts which had the effect of reducing liability to IHT, provided that the gifts sought were of a reasonable amount having regard to PP’s needs and provided that he had been candid in his evidence regarding PP’s wishes and feelings, and her lack of willingness in the past and present to consider IHT tax saving schemes.

As to the manner in which BB has made or responded to any application or issue and his failure to comply with a rule practice direction or order, I have dealt with those matters in paragraphs 81 and 82 above.

I see no grounds for criticism of the conduct of PP’s case by the Official Solicitor.

I do not consider that BB could be said to have been partially successful in his application. He was required to repay approximately half of the PET. It was only because of the benefit to PP of having BB and his family living very close by that I did not order the repayment of the balance of the PET either in full or in substantial part. The balance, invested in the W House, has been brought into hotchpot so that on PP’s death the share of her estate received by JB remains the same as under her will.

In my judgment the application made by BB, which was only made because of the investigation by the Public Guardian, was made for a personal motive so that he and his immediate family could continue to benefit from the gift that he had made out of PP’s funds. Those costs were increased by the manner in which BB conducted the litigation. I therefore consider that there are grounds to depart from the general rule as to costs. In my judgment, the justice of this case requires that PP should not have to bear the costs of BB and the Official Solicitor incurred in relation to an application which did not accord with her wishes and feelings, was not in her best interests and which was necessitated because BB had acted in contravention of his authority under the LPA PA.

I will therefore order that BB should be responsible for his own costs. As to the costs of the Official Solicitor as litigation friend for PP, the first £4,000 plus VAT should be paid out of the estate of PP. This is in recognition that a prospective application for approval of gifts may have been appropriate. I have arrived at the figure of £4,000 by taking a broad brush approach and weighing in the balance all I have said about BB’s conduct in my judgment. The balance of the Official Solicitor’s costs shall be paid by BB.

As to the costs of the application for revocation of the LPAs, I directed at the conclusion of the hearing on 31^st August 2016 that I would indicate the costs order that I was considering. Having regard to all the arguments as to the conduct of BB and CD set out above which have resulted in an order for revocation of the LPA PA, I am minded to make an order that BB and CD be responsible for their own legal costs. In my judgment the justice of the case requires that PP should not have to pay for her own costs incurred by the Official Solicitor as her litigation friend in the revocation application. This is not a neutral application to the court for a decision to be made which PP lacks capacity to make in which all parties are acting in the best interests of the incapacitated party. The application has been necessitated by the conduct of BB and CD as attorneys; there are ample grounds for departing from the general rule having regard to Rule 159 and the decision in Re Cathcart. I am therefore minded to make an order that BB and CD pay PP’s costs.

I recognise that BB and CD have been successful in arguing that the LPA PW should not be revoked. Neither of the other parties incurred costs in relation to this issue. It was addressed in witness evidence which also dealt with other matters and in a submission by counsel for BB and CD. In those circumstances I do not see that the costs incurred in relation to this issue are significant.

As to the costs of the Public Guardian I am not entirely sure why a fresh application for revocation of the LPA PA was necessary since I had already directed that this was in issue in my judgment of 15^th May 2015. The Public Guardian is seised of the responsibility to investigate the conduct of attorneys and has the right and obligation to present evidence to the court, which he has done in this case. I do not know whether the Public Guardian seeks an order for payment of his costs.

I therefore direct that the Public Guardian should within 14 days file and serve a position statement setting out whether he seeks an order for costs in the revocation application and if so on what grounds. Any party wishing to argue against the order I am minded to make or the order sought by the Public Guardian should file and serve written submissions within 28 days. Any submissions in response should be served within 42 days.

Counsel are requested to agree an order on the basis of my judgment in this case and submit it for my approval within 14 days.