The Public Guardian's Severance Applications (Rev 1)

This case involves 17 electronic applications made by the Public Guardian for Lasting Powers of Attorney to be severed.

This decision is structured under the following headings:

In order to keep legal costs proportionate, only the Public Guardian was invited to attend a 90-minute preliminary hearing on 15 September 2016. The purpose of that hearing was to understand better the Public Guardian’s reasons for referring each case to the court and his view concerning the underlying statutory provisions before giving directions and joining other persons as parties.

The persons affected by the applications were then notified of a final two-hour hearing on 18 April 2017 so that they could attend and/or be legally represented if they wished.

The final hearing was attended by the Public Guardian in person who was represented by Mr Sunil Teeluck (in-house counsel) and assisted by Mr Iain Dougall. I would like to thank all of them for their very helpful written and oral representations.

On 5 December 2016 I sent my written preliminary view on the applications to the Public Guardian and asked him to respond.

In response the Public Guardian provided me with a detailed written reply (‘Reply’) followed by a position statement (‘Position Statement’) for the hearing on 18 April 2017.

The legal framework is summarised in this section of the judgment.

A power of attorney is a formal arrangement whereby one person (the donor) gives another person (the attorney or donee) authority to act on the former’s behalf and in their name.

The law relating to powers of attorney forms part of the general law of agency and many of the general principles lie in the common law. One fundamental principle is that an act done by a person’s agent is in general to be treated as one done by the person themselves.

The extent of an attorney’s authority turns primarily on the wording of the power itself. The fact that a Lasting Power of Attorney has to be in a prescribed form does not alter this fact.

In principle the authority given to the attorney and the measure of control which s/he may exercise over the donor’s affairs is a matter to be decided on by the donor in consultation with the attorney. The donor can limit the authority by adding restrictions and conditions as s/he wishes.

An attorney’s primary duty is to act only within the scope of the actual authority conferred by the power and, as between donor and attorney, s/he can only bind the donor to a transaction with a third party if it is within the scope of the authority. If the attorney fails in this duty, and the donor thereby suffers loss, the attorney will usually be liable to compensate the donor.

The donor may give an attorney extremely wide powers. Nevertheless there are limitations to the attorney’s authority under even a general power. An attorney must act in good faith and the effect of the fiduciary relationship between principal and agent is that the attorney must not use their power otherwise than for the benefit of the donor without the latter’s specific authority.

The attorney also owes their donor a duty of care when carrying out their functions. An attorney who is not being paid must use such care and skill as s/he would in the management of their own affairs.

An attorney who breaches any of their duties as attorney is personally liable to the donor for any loss thereby sustained by the estate.

Section 9 of the 2005 Act provides as follows:

In this context ‘an instrument’ is a document or form that purports to create a lasting power of attorney and, by section 9(3), an instrument which does not comply with sections 9 and 10 and Schedule 1 ‘confers no authority’.

Paragraph 1(1) of Schedule 1 to the 2005 Act then provides that an instrument ‘is not made in accordance with Schedule 1 ‘unless – (a) it is in the prescribed form’. By paragraph 1(3), the prescribed form is that prescribed by regulations.

The relevant regulations are the Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian Regulations 2007 (SI 2007 No. 1253) — referred to below as ‘the 2007 Regulations’ — regulation 5 of which provides that ‘The forms set out in Parts 1 [Property and Financial Affairs] and 2 [Health and Welfare] of Schedule 1 to these regulations are the forms which, in the circumstances to which they apply, are to be used for instruments intended to create a lasting power of attorney’.

The 2007 Regulations were amended most recently by The Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian (Amendment) Regulations 2015 (SI 2015 No. 899). The latter, referred to below as ‘The Amendment Regulations’, came into force on 1 July 2015 and introduced a number of changes. These included replacing the LPA forms in Parts 1 and 2 of Schedule 1 with new forms to be used when creating property and affairs and health and welfare LPAs.

Paragraph 3 of Schedule 1 to the 2005 Act deals with irregularities in the prescribed form of an LPA:

Paragraph 3 is concerned therefore with ‘the prescribed form’ of the ‘instrument’ and with failure to adhere to ‘the prescribed form’ rather than with conditions, restrictions and other terms inserted in an ‘instrument in the prescribed form’ by a donor.

The historical origin and purpose of paragraph 3(1) can be traced back to The Law Commission Report, The Incapacitated Principal (The Law Commission, Cmnd. 8977, July 1983).

The Law Commission recommended that immaterial differences in the form or content of an Enduring Power of Attorney should not affect its validity. However, the Commission did not ‘envisage the Court being empowered to validate instruments that were invalid as EPAs’ (see para. 4.10, fn. 116). In consequence, section 2(6) of the resulting Enduring Powers of Attorney Act 1985 included a ‘different in immaterial respects‘ provision identical to what is now paragraph 3(1) but not an equivalent to what is now paragraph 3(2). As the years went by this strict approach to validity came to be viewed by many as unsatisfactory and unhelpful, and when the Law Commission returned to the subject in 1995 it recommended a more flexible approach.

The historical origin and purpose of paragraph 3(2) traces back to paragraph 7.55 of the subsequent Law Commission report, Mental Incapacity (Law Com No 231, February 1995):

The Commission’s recommendation is carried into effect by paragraph 3 which contains two related provisions. Firstly, by paragraph 3(1), the Public Guardian must treat as sufficient, and therefore register, instruments which differ ‘in form or mode of expression from the prescribed form’ only in immaterial respects. The Law Commission referred to this as ‘a saving provision’.

In Re Lane (unreported, 24 January 2012), it was held that the 2007 and 2009 versions of the LPA forms differed only in immaterial respects and that the donor’s use of the old 2007 form was to be treated by the Public Guardian as sufficient in point of form and expression.

Paragraph 3(1) replicates section 2(6) of the Enduring Powers of Attorney Act 1985. As regards the latter, what is and is not material was considered in relation to EPAs by Master MacFarlane, the then Master of the Court of Protection, in Practice Direction (Power of Attorney: Form) [1989] 1 WLR 311, [1989] 2 All ER 64. The relevant regulation provided that a valid EPA form must include the requisite explanatory information and all the relevant marginal notes. On several occasions, solicitors had submitted an instrument bearing no marginal notes on the basis that it had been drawn up by the solicitor after the various choices had been explained to the donor who had then selected the options he wished to include and decided the precise terms of the power. The Practice Direction stated that marginal notes could only be omitted if they were irrelevant (reg 2(1)), corresponded to an omitted or deleted alternative (reg 2(2)) or constituted an immaterial difference from the prescribed form (s2(6)). There was no provision in the regulations for differences in forms prepared by donors and solicitors. Solicitors should therefore include all marginal notes unless they came within one of the exceptions mentioned.

To my mind, the defects embraced by a ‘differs in an immaterial respect in form or mode of expression’ saving provision of this kind include minor misspellings of names and addresses, entering a person’s last name in the first names box and vice-versa, omitting a person’s title (Mr, Ms, etc), using and attaching continuation sheet 1 but not crossing the ‘More replacements’ box, and so on, all of which fall squarely within the ‘pettifogging’ category of defects.

The second, related, provision is that the Court of Protection may declare that an instrument which is not in the prescribed form ‘is to be treated as if it were in the prescribed form if it is satisfied that the persons executing it intended it to create a lasting power of attorney’. The Law Commission referred to this as ‘a dispensing provision’ which enables the court, by reference to the obvious intention of the donor, to cure a technical failure to conform to all the prescribed formalities.

The effect is to save the instrument from section 9(3) because it is to be treated as being in the prescribed form and therefore as complying with Schedule 1. This is a wide power because the court is empowered to cure technical defects which are material in order to give effect to the donor’s intention.

Necessarily, court applications under paragraph 3(2) concern instruments which the Public Guardian considers he cannot register without a court order because they appear to him to differ from the prescribed form in a material way and involve discerning the intention of the donor.

It must be acknowledged that on the surface Senior Judge and District Judge decisions do not appear to form a completely uniform or consistent body of case law. In part that is probably because in each case the judge has discerned the particular donor’s intention from a reading of the document as a whole and the nuances will be different in each case.

Heywood & Massey (9-012, R.29, August 2015) give the following examples of cases where the court has invoked paragraph 3(2) and declared that an instrument is to be treated as if in the prescribed form:

In my opinion, paragraph 3(2) is also sufficiently wide to embrace not ticking a particular box on the LPA form or ticking the wrong box where it is possible from the instrument as a whole to ascertain the donor’s intention.

The way in which paragraph 3(2) is phrased — the instrument under consideration must have been executed — and the nature of the power itself suggests that it cannot save an instrument which has not been adequately executed. For example, one executed in the wrong order (Re Sporne, unreported, 13 October 2009; Re Hurren, unreported, 28 September 2011) or one in respect of which the donor and attorney each executed the wrong parts of the form (Re Lodge, unreported, 14 March 2011).

Paragraph 3 is concerned only with the prescribed form of an instrument. Therefore there are other kinds of defect that it cannot be relied on to rectify. For example, the donor may have inserted bespoke conditions, restrictions or other terms in ‘the instrument’ which are unlawful or ineffective. Because this is so, paragraph 11 of Schedule 1 to the 2005 Act deals with instruments ‘not made properly or containing ineffective provision’:

It can be seen that by paragraph 11 there are three circumstances in which the Public Guardian is prevented from registering an instrument unless the court directs him to do so:

All of the applications in this case are brought by the Public Guardian as severance applications under paragraph 11(3).

Before turning to the individual cases it is important to emphasise that the Act is an enabling Act and the Public Guardian and the court should be as enabling as is legally possible, a point made by Nugee J in Miles & Bill v The Public Guardian [2015] EWHC 2960 (Ch) at para 19:

I now turn to the individual cases referred to the court.

Section 7 of the new LPA forms introduced by the Amendment Regulations on 1 July 2015 is headed ‘Preferences and instructions’. The section contains two boxes which the donor can but need not complete (‘Most people leave this page blank’). One of them is headed ‘Preferences’ (‘Your attorneys don’t have to follow your preferences but should keep them in mind’) and the other ‘Instructions’ (‘Your attorneys will have to follow your instructions exactly … If you give instructions that are not legally correct they would have to be removed before your LPA is registered’).

Section 7 of the new forms is designed to give expression to section 9(4) of the 2005 Act. This provides as follows:

It is always risky to depart from the statutory language when drafting forms and the adoption of the headings ‘Preferences’ and ‘Instructions’ in the forms introduced by the Amendment Regulations is potentially misleading.

The term ‘instructions’ is not synonymous with ‘conditions or restrictions’.

Equally, the term ‘Preferences’ is not synonymous with ‘best interests’ or a donee’s duty when deciding what is in the donor’s best interests to consider anything written in section 7 of the form concerning the donor’s wishes, feelings, beliefs and values, and the other factors to be considered by their donee(s): see section 4(6) of the 2005 Act.

The Public Guardian submits that the following words in the instructions box within section 7 of this instrument require severing because they ‘are incompatible with the nature of the appointment of the attorneys to act jointly and severally’:

The Public Guardian accepts that it is lawful for a donor to authorise their attorneys to act jointly and severally in respect of some decisions, and jointly in respect of others.

The Public Guardian’s objection is that the donor ticked the box on page 4 which states that her attorneys are to act jointly and severally (presumably thinking this meant that some decisions were to be joint and some several), rather than the box lower down the page to the effect that some decisions are to be made jointly and some jointly and severally.

However, the donor’s intention is clear because section 7 is headed ‘Instructions (Your attorneys will have to follow your instructions exactly)’ and MC’s instruction is, ‘Any financial decisions up to the value of £150.00 can be made independently by my attorneys. However any financial decisions over this amount must be agreed upon by both my attorneys.’

This is a condition or restriction which only makes sense if the donor intended the authority conferred to be that her donees are authorised to make some decisions jointly and some jointly and severally. The question in this case is what weight to give to the fact that the wrong box on page 4 has been ticked and the answer, in my opinion, is not much. It was simply an error in completing the form. I do not think that the donor’s intention is ambiguous and to me it is wrong in principle to excise the condition or restriction in section 7 when it is the box on page 4 which is the error.

My order is therefore as follows:

The Public Guardian submits that the following words in the preferences box of section 7 of the instrument require severing because they are ‘incompatible with the requirement in section 1(5) of the MCA that any act done or decision made must be done or made in the donor's best interests’:

I noted above that the wording of section 7 of the LPA form departs from the statutory wording. As concerns ‘preferences’, the section states that ‘You can tell your attorneys how you’d prefer them to make decisions or give them specific instructions … Your attorneys don’t have to follow your preferences but they should keep them in mind …’ In Ms JG’s case, her preferences are: ‘I would like my attorneys to consider Thomas G (my son) as my main priority when making decisions.’

As concerns ‘instructions’, section 7 of the form states that ‘You can … give [your attorneys] specific instructions which they must follow when making decisions … Your attorneys will have to follow your instructions exactly … Be careful – if you give instructions that are not legally correct they would have to be removed before your LPA could be registered’.

In Ms G’s case, her instructions are: None [thick diagonal black line across the box] and therefore she has not imposed any conditions or restrictions on the authority of the donees which prevent the instrument from operating as a valid lasting power of attorney or which are ineffective as part of a lasting power of attorney. All she has done, very sweetly, is to specify that she would ‘like’ her donees to consider her son as her main priority. The Act entitles her to make a written statement concerning her wishes and feelings (s.4(6)(a)) which the donees must consider when deciding what decision is in her best interests. She has done no more than exercise that right.

It is also, in my view, a misunderstanding of the Act to take the view that acting in an incapacitated person’s best interests in some way precludes giving any weight to the interests of other persons dear to them. I tried to make that point in paragraph 3.27 of Court of Protection Handbook: A User’s Guide (Ed. Ruck-Keene, LAG, 2014) and therefore repeat it in this context:

My determination under section 23(1) of the meaning and effect of the words in section 7 is that they are not ineffective and do not prevent the instrument from operating as a valid LPA. As a result, I shall direct the Public Guardian to register the instrument.

The Public Guardian submits that the following words in the ‘preferences’ box within section 7 of the instrument require severing because they ‘seek to extend the scope of gifting authority given to the attorneys under section 12 of the MCA’:

Unless the words are severed, does that statement of wishes prevent the instrument from operating as a valid LPA or are those words ineffective as part of the LPA or does it? The Public Guardian says so:

The Public Guardian relies on section 12(2)(a) of the 2005 Act which states that:

The Public Guardian also points out that in his instrument the donor does not state that the gifts (including the gift of the residue to his children) are being made on a customary occasion.

I understand and to some extent share the Public Guardian’s concern. However, it is necessary also to take into account section 23(4) of the 2005 Act. This states that, ‘The court may authorise the making of gifts which are not within section 12(2) (permitted gifts).’

In other words, the statutory framework is not that a donee may not make a gift or gifts of kind Mr DH wishes his donees to make from his property but that such a gift requires a court application and order authorising it as being in his best interests before it can be made.

In my view, because Mr DH expresses all of this as a wish in the preferences box (what he would ‘like’), rather than as a binding condition on his donees in the instructions box (what they must do), it does not require severing. It is a statement of his wishes which the donees must consider when making decisions on his behalf. At the relevant time they will need to decide whether to apply to the court for authority to carry out the wishes expressed by him in what is a section 4(6) written statement on the basis that such gifts are in his best interests. Given that he has expressed a wish to give away all of his liquid funds, the court (and the donees) will need to consider at the time what weight to give to that statement when deciding whether such gifts and a court application are in his best interests, particularly given the ambiguity as to precisely what he intended by his statement.

My determination under section 23(1) of the meaning and effect of the words in section 7 is that they are not ineffective and do not prevent the instrument from operating as a valid LPA. As a result, I shall direct the Public Guardian to register the instrument.

Although I take that view, I do share the concern that in some of the home-made LPA cases the donor may be unclear as to the terms of sections 12 and 23. When registering such an LPA it would be helpful for the Public Guardian to remind the donor and donees that a court application will be necessary in order to give effect to such wishes. Obviously if the donor still has capacity in relevant matters, s/he can consider making gifts now or placing money in trust as alternatives.

As a final point, the instructions in section 7 of Mr H’s instrument may be more problematic although the Public Guardian does not seek to sever them:

These conditions may be ineffective as part of an LPA insofar as they relate to Mr H’s financial affairs post-death. However, I am not asked to determine that.

Ms SH appointed a number of attorneys jointly and severally.

The Public Guardian submits that the following words in the instructions box within section 7 of the instrument require severing because they are ‘incompatible with the nature of the appointment of the attorneys to act jointly and severally’:

I agree that the words in section 7 require severing although the legal position is arguably unsatisfactory (see the JF case below).

Ms H appointed joint and several attorneys for personal welfare decisions. In section 5 of the instrument (‘Life-sustaining treatment’), she authorised her attorneys ‘to give or refuse consent to life-sustaining treatment on my behalf’.

This is Option A. Option B is that the donor does not give their attorneys authority ‘to give or refuse consent to life-sustaining treatment on my behalf’.

The donor then completed the preferences box of section 7 (‘Preferences and Instructions’) as follows:

On reading the whole LPA form, the person who witnessed SHH sign the Option A box of section 5 was her solicitor, LD. However, she did not print her name and address next to her own signature in the space provided for the witness to do so. She did do so elsewhere on the LPA form, so her printed name and address are accurately recorded on the face of the instrument.

Because of this failure to execute Option A properly, the Public Guardian states that no Option A authority to give or refuse consent to life-sustaining treatment was given to the attorneys ‘and as a result the chosen option with regard to life sustaining treatment defaults to Option B [the donor does not give her attorneys authority to give or refuse consent to life-sustaining treatment on her behalf]. Because Option B applies, it is necessary to sever the emboldened and underlined words in paragraphs (i) and (ii) of section 7 (‘my attorneys to ensure’; ‘my attorneys’: see relevant passage above) on the ground they are incompatible with Option B.

Given that LD twice printed her name and address next to her signature elsewhere on the LPA form, I take the view that her omission to print her name and address next to her signature in section 5 is a defect in the prescribed form of the instrument that falls within paragraph 3. It is material given that it relates to life-sustaining treatment but can be rectified by the court under paragraph 3(2) given her clear intention. I would also make an appropriate declaration under section 23 in terms of the meaning or effect of the instrument, and in particular that Option A has effect.

My order is therefore as follows:

The donor appointed her son, TWG, as her sole attorney for property and affairs and his wife, VVVE, as replacement attorney.

In the instructions box of section 7 of the instrument, the donor wrote:

The donor repeated the instructions in the ‘How replacement attorneys step in and act’ box on continuation sheet 2.

The Public Guardian has applied for the above words to be severed ‘because it is not in line with section 13(6)(a) to (d) of the MCA 2005. The dissolution or annulment of marriage between the attorneys is not one of the 5 reasons in which an attorney’s appointment would cease.’

The relevant sections of the 2005 Act are sections 10(8) and 9(4)(b) which provide as follows:

Section 13(6)(c) is concerned with the position of an existing donee, not a replacement donee (see the wording of s13(7)a)), and with marriages between donor and donee rather than the marriages of donees. The effect of section 13 is therefore to terminate a donee’s appointment and to revoke the LPA should the donor and donee divorce unless either the instrument provides otherwise or the donee can be and is replaced ‘under the terms of the instrument’.

Section 9(4) enables a donor to insert conditions and restrictions in the instrument. By definition, the insertion of a condition makes an act or event conditional upon the specified condition being met.

Nowhere in the Act is it stated that the terms of the instrument cannot include a condition which must be satisfied before a named person replaces a donee whose appointment has been terminated under section 13(6)(a) to (d). For example, one might insert a condition that a solicitor named to replace a donee on the occurrence of such an event must still be in practice or that the person named as a replacement must still be resident in England and Wales. Similarly, I can see nothing objectionable in inserting a condition that one’s daughter-in-law must retain a family relationship through marriage with the donor for the replacement appointment to take effect.

That approach seems to me to accord with the general tenor of Nugee J’s remarks in Miles & Beattie v The Public Guardian [2015] EWHC 2960 (Ch) at para 19: ‘… it is right that the Act should be construed in a way which gives as much flexibility to donors to set out how they wish their affairs to be dealt with as possible, the Act being intended to give autonomy to those who are in a position where they can foresee that they may in the future lack capacity to specify who it is that they wish to act for their affairs.’

Accordingly, I have decided that the condition does not need severing.

The Public Guardian submits that the following words in the preferences box within section 7 of the instrument require severing because they are ‘incompatible with the nature of the appointment of the attorneys to act jointly and severally’:

The Public Guardian’s objection in this case therefore appears to be the same as in the case of MC (see above). The only real difference is that SR’s statement has been placed in the preferences (wishes and feelings) box rather than the instructions (conditions) box in section 7, which was what MC did.

And that does make a difference. As drafted, the donor has authorised her attorneys to act jointly and severally and simply expressed a preference (wish) that they endeavour to make investment decisions of £50,000 or more jointly.

The donees are legally authorised therefore to act independently when making investment decisions of £50,000 or more provided that they comply with section 4 (i.e. they act in the donor’s best interests, which involves considering inter alia this written statement of wishes). That is not incompatible with a joint and several LPA.

For that reason I have decided that the condition does not need severing.

The donor appointed one attorney, and two replacement attorneys jointly and severally. She directed that the LPA be effective as soon as it is registered. The Public Guardian submits that the following words in the ‘preferences’ box within section 7 of the instrument require severing because they ‘seek to extend the scope of gifting authority given to the attorneys under section 12 of the MCA’:

For some reason the Public Guardian does not seek to sever the final paragraph which follows on from that quoted:

This case is therefore similar to that of DH (see above) insofar as the court may authorise the making of gifts which are not within section 12(2) (permitted gifts). The statutory framework is not that a donee may not make a gift or gifts outside the terms of section 12 but that such gifts require a court application and order authorising them as being in the donor’s best interests before they can be made.

In my view, because MN expresses all of this as a wish in the preferences box (what she would ‘like’), rather than as a binding condition on her donees in the instructions box (what they must do), the words do not require severing even if they constitute gifting in excess of that permitted by section 12. What would be required if these are gifts is a court application.

For that reason I have decided that the words do not need severing.

MN’s words in the ‘preferences’ box within section 7 do raise a second issue which is not relevant to whether the words require severing but is relevant to whether or not in future her attorneys must apply to court before they can carry out her stated wishes. They must do so if the payments she has in mind constitute gifts in excess of those permitted by section 12, but are they? This question is considered below in relation to PG.

In this health and welfare case, RH ticked the ‘Jointly for some decisions, jointly and severally for other decisions’ box in section 3 on page 4. The ‘instructions’ box in section 7 then includes the following words:

He then completed ‘Continuation Sheet 2 — Additional Information’ to provide additional information concerning decisions which his donees should make jointly:

The Public Guardian noted that some sections of the form had been executed in the wrong order. Following re-execution, the dates on which the relevant sections were executed seem to me to be as follows:

If I understand it correctly, the Public Guardian’s submission is that the continuation sheet is invalid because it was executed by the donor on 30 May 2016, six days after he had signed sections 5 (life-sustaining treatment) and 9 (donor’s statement) of the form. The effect, says the Public Guardian, is that the donor has given no instructions as to which decisions are to be made jointly and which may be made jointly and severally. The default statutory position is that donees act jointly. Therefore, the cross in the box in section 3 of the form needs to be severed by the court because it indicates the donees are to act ‘Jointly for some decisions, jointly and severally for other decisions’. Once severed, the form takes effect as a joint appointment.

The legal issue is what to make of the fact that the continuation sheet was signed by the donor six days after he signed sections 5 (life-sustaining treatment) and 9 (donor’s statement) of the form? Is the error beyond rectification?

Sections 5 and 9 and the continuation sheet were all signed on or before the date when certificate provider gave and signed his certificate, the continuation sheet does not require a witness as drafted, and in my view the intention of the donor is clear. On balance I would direct registration on the basis that the donor added the additional information before he had the instrument certified.

I shall make the following order:

By her instrument the donor sought to authorise her donees jointly and severally to make decisions concerning her property and affairs.

The Public Guardian submits that the following words in the instructions box within section 7 of the instrument require severing because they ‘are incompatible with the nature of the appointment of the attorneys to act jointly and severally’:

The Public Guardian accepts that it is lawful for a donor to authorise their attorneys to act jointly and severally in respect of some decisions and jointly in respect of others. The objection is that the donor ticked the box on page 4 which states that her attorneys are to act jointly and severally (presumably thinking this meant that some decisions were joint and some several), rather than the box lower down the page to the effect that some decisions would be made jointly and some jointly and severally.

However, the donor’s intention is clear because section 7 is headed ‘Instructions (Your attorneys will have to follow your instructions exactly)’ and JG2’s instruction is, ‘My Attorneys must make decisions jointly in respect of the sale of my property at X Lane, Leicester … including any property that I may be residing in that is considered as my main residence, jointly.’

The material facts are therefore identical to the MC case. The question in this case is what weight to give to the fact that the wrong box on page 4 has been ticked and the answer, in my view, is not much. It was simply an error in completing the form. I do not think that the donor’s intention is ambiguous and to me it is wrong in principle to excise the condition or restriction in section 7 when it is the box on page 4 which is the error.

My order is therefore as follows:

The donor ticked the box in Section 3 of page 4 which states that her two attorneys are jointly and severally authorised to make health and welfare decisions on her behalf. In section 5 of the LPA form (‘Life-sustaining treatment’), she authorised her attorneys ‘to give or refuse consent to life-sustaining treatment on my behalf’. This is Option A.

The donor then wrote the following words in the instructions box within section 7 (‘Your attorneys will have to follow your instructions exactly’):

The Public Guardian asks the court to sever the words in the instructions box because they are incompatible with the nature of the appointment of the attorneys to act jointly and severally.

Again, the donor’s intention is clear. The question in this case is what weight to give to the fact that the wrong box on page 4 has been ticked and again the answer, in my view, is not much, the more so given that this is a life or death matter. It was simply an error in completing the form and it is far more important to give weight to the donor’s intention that both donees agree on life or death decisions than it is to give weight to ticking the wrong box.

I therefore make the following order:

The donor appointed three attorneys jointly and severally (her husband or partner, OM, and her two daughters, it appears).

The Public Guardian submits that the following words in the instructions box within section 7 of the instrument require severing because they ‘are incompatible with the nature of the appointment of the attorneys to act jointly and severally’:

The problem with severing the condition is that it creates or brings into existence a Lasting Power of Attorney which is contrary to the clear intention of the donor. She only wished to authorise her daughters to deal with her property if they agreed that a particular decision or intervention was in her best interests. Severance overrides that and empowers them to act unilaterally which is the opposite of what JF intended.

On the basis of the Public Guardian’s advice that the condition needs to be severed in order to be registered, JF consents to severance. I do not know if she was advised that she could achieve her desired end by creating two LPAs (one appointing her daughters jointly and the other her husband or partner solely).

I cannot see that there is anything objectionable in the arrangement devised by JF or that it should be necessary to create two instruments in order to achieve a simple objective that can easily be achieved in one instrument with a few simple words. It is certainly not desirable. Under the general law of agency, a principal may appoint co-agents, giving power to a quorum to act on her or his behalf. It seems virtually eccentric that a person must authorise (say) four attorneys to all act jointly or all separately and cannot specify anything in between. The aim should be a statutory scheme that gives as much flexibility to donors to set out how they wish their affairs to be dealt with as possible.

However, I consider that I am bound by current case law to make one of two decisions: either not to sever and to direct the Public Guardian not to register the instrument (given that the result goes against JF’s manifest intention) or to sever and direct registration. Given the donor’s consent to severance, with considerable reluctance I have decided on the latter course.

By her instrument Mrs PG authorised her attorneys jointly and severally to make decisions concerning her property and affairs.

The Public Guardian submits that the following words in the instructions box within section 7 of the instrument require severing because they are ‘incompatible with the requirements in section 1(5) of the MCA that any act done or decisions made must be done or made in the donor's best interests’:

The Public Guardian ‘is accordingly referring this matter to the court, and asks the court to sever the words so that it may be registered as a valid LPA’.

This case is similar to that of JG except that in JG’s case she sought to provide for her son’s needs by inserting the relevant words in the preferences box within section 7. In PG’s case her words are inserted in the instructions box (‘You can … give [your attorneys] specific instructions which they must follow when making decisions … Your attorneys will have to follow your instructions exactly … ’).

This section of the form is intended to enable donors to impose conditions or restrictions on the authority of their donees.

The Public Guardian submits that the words in section 7 are incompatible with the requirement in section 1(5) that acts and decisions or the donees must be in Mrs PG’s best interests (not the best interests of a third party).

For the reasons given in Ms JG’s case, I disagree that PG’s condition is on its face contrary to the requirements of section 1(5), is ineffective as part of an LPA or prevents it from operating as a valid LPA. It is not per se contrary to PG’s best interests that she exercises her right to impose a condition on her attorneys that they must ensure that her incapacitated child’s needs continue to be met from her estate. That her daughter is cared for appears to be her most important wish and feeling, and no doubt her core personal belief and value.

As a second issue, I must consider whether or not there is a difference between gifting and providing for a person’s needs (see e.g. paragraph 3 of Schedule 4 to the Act in relation to EPAs) — and whether providing for the needs of the donor’s daughter from her estate will involve making gifts to her daughter in excess of those permitted by section 12 so as to require a court application and order before they can be made.

The legal position set out in the Enduring Powers of Attorney Act 1985, and repeated in Schedule 4 to the Mental Capacity Act 2005, was explicit and clear, and it derives from The Law Commission Report ‘The Incapacitated Principal’ (The Law Commission, Cmnd. 8977, July 1983):

The EPA provisions set out in Schedule 4 to the Mental Capacity Act include the following provisions carried over from the 1985 Act:

With regard to Lasting Powers of Attorney, these statutory provisions and restrictions in the 1985 Act and Schedule 4 concerning gifts are repeated in the body of the Mental Capacity Act 2005 in relation to an LPA attorney’s authority to make gifts from the donor’s estate. See section 12:

However, the provisions in the 1985 Act and Schedule 4 concerning maintaining a person or providing for their needs from the donor’s estate are not repeated in the body of the Mental Capacity Act 2005 in relation to Lasting Powers of Attorney.

Why was this and what was Parliament’s intention? It was suggested to me that because the LPA statutory regime does not repeat the previous explicit power permitting an attorney ‘to provide for his or that person’s needs respectively’ therefore I should conclude that Parliament intended that attorneys should no longer have such a statutory power. If Parliament had intended that LPA attorneys should continue to have such a power then surely it would have carried over the relevant paragraphs and included them in the LPA provisions?

I do not think these points are as strong as they first seem. As with all such propositions it is necessary to reverse them and see if there is any loss of plausibility. In fact, it could equally plausibly be asserted that had Parliament intended that LPA attorneys should now be prohibited from having such a power, and intended that henceforth providing for a person’s needs should be placed on the same footing as gifting, then surely it would have made that explicit by adding ‘providing for needs’ to the restrictions on gifting in section 12.

As enacted, an LPA attorney has ‘authority to make decisions about ‘all or any’ matters concerning the donor’s property and affairs (s9(1)) subject only to ‘any provisions of this Act’ (e.g. the limited scope to make gifts in section 12), the duty to act in the donor’s best interests and ‘any conditions or restrictions specified in the instrument’ (s9(4). There is no statutory prohibition in the Act which restricts an attorney’s authority or ‘scope’ to provide for a person’s needs in the way that there is for gifts.

The decision not to include the old clauses reflects, I think, the different statutory frameworks of the Enduring Powers of Attorney Act 1985 and Mental Capacity Act 2005.

The 1985 Act was a standalone Act concerned only with modifying the existing law concerning powers of attorney. It set out a statutory regime that amended the existing law in relation to powers of attorney by means of explicit statutory provisions concerning matters such as the effect of incapacity, the duties of an attorney in the event of impending incapacity, gifting, providing for people’s needs, registration, the court’s powers and so on.

In contrast, the LPA provisions in the Mental Capacity Act 2005 form one part of a comprehensive framework for decision-making on behalf of incapacitated people which starts with principles to be applied in all cases, stating that all decisions, including those of an attorney, shall in the best interests of the relevant person. Whereas the 1985 Act says that an attorney has ‘authority to do on behalf of the donor anything which the donor could lawfully do by an attorney’, the 2005 Act provides that an attorney under an LPA has authority to make decisions ‘about all or any’ matters concerning the donor’s ‘property and affairs’ (s9(1)) ‘subject to any provisions of this Act [eg the gifting restrictions] and, in particular, sections 1 (the principles) and 4 (best interests), and … any conditions or restrictions specified in the instrument’ (s9(4).

The duties set out in section 4 as concerns determining what decision is in the relevant person’s best interests ‘apply in relation to the exercise of any powers which … are exercisable under a lasting power of attorney’ (s4(8)). When making a decision for a donor, an attorney only complies with section 4 if s/he reasonably believes that what s/he does is in the best interests of the person concerned (s4(9)).

An attorney must decide whether making a payment to themselves or a third party from the donor’s estate would constitute a gift for the purposes of section 12. If it constitutes a gift then such a payment must both be in the donor’s best interests and either authorised by the court or of sufficiently low value as not to require such authorisation.

If the payment is not a gift for the purposes of section 12 but the meeting of a need, and there is no condition or restriction in the instrument which prevents such payments, then the attorney must apply the principles in section 1 and the best interests considerations in section 4. The attorney must consider matters such as the donor’s past and present wishes and feelings, their beliefs and values, any written statements made by them including statements in the LPA itself and all other relevant considerations such as the donor’s own needs and the nature of their relationship with the potential recipient, and decide whether such a payment is in the donor’s best interests.

It might be argued that all payments made from a donor’s estate other than those for consideration, including those made to meet say a child’s needs, are by definition ‘gifts’ and therefore caught by section 12. Unless the payment is one of limited value made on a customary occasion such as a birthday, or a reasonable donation to a charity, a court application and order will be required in all cases.

I should be very surprised if that was the case although the precise distinction or boundary between a gift and a payment to meet a person’s needs is probably impossible to define at its cusp: See, for example, the glossary to the Law Commission Report, ‘Matrimonial Property, Needs and Agreements’ (Law Com No 343) which notes that ‘needs’ is ‘a very broad concept with no single definition in family law’ and also that the needs of the parties is a question of fact, to be determined ultimately by a court in difficult cases.

In the first place, such an interpretation would be wholly impractical and undesirable. Where a couple who have been married for say 60 years appoint each other as attorneys, and one of them is then incapacitated by dementia, the spouse exercising the attorney role would need to apply for a court order in order to continue regular and historic contributions from the donor’s pension and assets to their partner and the running expenses of the household. Likewise, where a younger couple with children make LPAs and one of them then suffers a severe brain injury in an accident, the attorney spouse would need a court order in order to continue to make payments to meet the children’s needs or payments on their behalf. The legal consequence of the onset of incapacity in such cases would be a court application in all cases and a Court of Protection order authorising some division of the couple’s assets, income and expenditure not dissimilar to that required in cases of divorce or separation. It would be a nightmare.

In the second place, during my seven years as a full-time resident judge of the Court of Protection I am not aware of any such applications being made to a resident judge. Although not strictly relevant to determining the correct legal position, I suspect this is because in practice couples, parents and children execute LPAs in order to be able to continue as far as possible their normal and historic family lives without court intervention or official regulation. They have a common-sense understanding of the limits of what kind of expenditure is permissible, which is reinforced by natural affection and a concern for the welfare of the person suffering incapacity.

There will of course be cases where an unscrupulous attorney tries to excuse their failure to seek court authority for a substantial gift on the ground that the payment was one which met a ‘need’ of theirs so that no application was necessary. However, it is the nature of powers of attorney in relation to incapacitated people that they have always offered, and always will offer, the unscrupulous relative or acquaintance opportunities for fraud or self-enrichment. The criminal law imposes penalties for fraud and the civil law includes mechanisms for ordering attorneys to repay monies misused by an attorney. Insofar as that is insufficient to deter the unscrupulous, the system relies on the capacity and common-sense of a donor to pick suitable and trustworthy attorneys and to include appropriate restrictions and conditions in the instrument. Unless a system is introduced which requires a wholly independent professional to provide the necessary certificate, or one whereby attorneys can give security, that has to suffice.

Having regard to the above considerations, I would be of the view that the legal position is as follows:

To return to PG’s case, to me this clearly a case of meeting a need and without more would not require a court application under section 12. Requiring her donees to ensure that her estate continues to be used as necessary to help provide for her disabled daughter’s needs is her wish. It is in her best interests that she knows that her wishes and feelings for her daughter will be honoured if she becomes incapacitated. In my view, there is nothing to prevent her from imposing that condition on her attorneys.

I make the following order:

By his instrument GO authorised five persons jointly and severally to make decisions concerning his property and affairs.

In section 5 of the instrument (‘restrictions and conditions’) the donor provided as follows:

The Public Guardian asks the court to sever the underlined words because they are incompatible with the nature of the appointment of the attorneys to act jointly and severally. More particularly, the condition restricts the power given to the second, third, fourth and fifth attorneys.

In substance this is a JF type case. There is nothing objectionable in the arrangement and it should not be necessary to create two instruments in order to achieve a simple objective that can easily be achieved in one instrument with a few simple words. However, I am bound by current case law to make one of two decisions: either not to sever and to direct the Public Guardian not to register the instrument (given that the result goes against GO’s manifest intention) or to sever and direct registration. Given his consent to severance, with reluctance I have decided on the latter course.

By her instrument GB (‘Mrs B’) authorised her husband JB (‘Mr B’) to be her attorney in relation to decisions concerning her property and affairs.

She also appointed two replacement attorneys (JHLB and DJLB) and (clearly in relation to them) completed the preferences box within Section 7 as follows:

She then completed Continuation Sheet 2 (‘How replacement attorneys step in and act’) so as to provide that:

The Public Guardian takes exception to the words in Continuation Sheet 2. He asks the court to sever the underlined words because they are incompatible with the … appointment … of the replacement attorneys to act jointly and severally.’

I do not take that view myself. The instrument is home-drawn and GB’s completion of the preferences box rather than the instructions box in section 7 creates an element of ambiguity. However, I think the donor’s intention is clear from an overall reading of the instrument. Her replacement donees are to act jointly in some matters (the sale or rental of properties and investments) but may act alone in all other matters. In other words, ‘jointly for some decisions, jointly and severally for other decisions’.

Pursuant to paragraph 3(2), I am inclined therefore to declare that the instrument is to be treated as being sufficient and in the prescribed form and the replacement donees have been authorised to act ‘jointly for some decisions (specifically, the sale or rent of properties and investments) and jointly and severally for all other decisions.

I make the following order:

By his instrument JB authorised his wife GB (see case immediately above) to be his attorney in relation to decisions concerning his property and affairs.

He appointed two replacement attorneys and (clearly in relation to them) completed the instructions box in Section 7 as follows:

“My attorneys must act jointly when deciding either sale or rental of my properties also what action to take regarding investments.”

He then completed Continuation Sheet 2 (‘How replacement attorneys step in and act’) so as to provide that:

“I want my replacement attorneys to act jointly and severally. Jointly for sale of rental properties and investments”

Mr and Mrs B have both made LPAs the contents of which are, I think, intended to have the same effect. They were home-made and could have been more clearly expressed. However, as in Mrs B’s case, I think the donor’s intention is clear from an overall reading of the instrument. His replacement donees are to act jointly in some matters (sale or rental of properties and investments) but may act severally in all other matters. In other words, ‘jointly for some decisions, jointly and severally for other decisions’.

Pursuant to paragraph 3(2), I am inclined therefore to declare that the instrument is to be treated as being sufficient and in the prescribed form and the donees have been authorised to act ‘jointly for some decisions (specifically, the sale or rent of properties and investments) and jointly and severally for all other decisions.

I make the following order:

By her instrument GD authorised two persons jointly to be her attorneys in relation to decisions concerning her property and affairs. She also appointed one replacement attorney.

In section 5 of the instrument (‘When do you want your attorneys to be able to make decisions?) she ticked the box ‘As soon as my LPA has been registered’, rather than the box ‘’Only when I don’t have mental capacity’.

In section 7 of the instrument the donor then completed the preferences box as follows:

The Public Guardian asks the court to sever these words because they are incompatible with the option chosen in Section 5 which states that the attorneys are able to make decisions as soon as the LPA has been registered.

Clearly section 5 or 7 requires correction. The Public Guardian has kindly made enquiries of GD who states that her intention was that the attorneys be authorised to make decisions on her behalf as soon as the instrument is registered. Therefore it is section 7 that requires severing and I shall make an order accordingly.

By her instrument CW authorised her mother EJW to be her attorney in relation to decisions concerning her property and affairs. She also appointed one replacement attorney, GD.

In the preferences box in section 7 of the instrument the donor stated:

The Public Guardian asks the court to sever these words because they ‘seek to extend the scope of gifting authority given to the attorneys under section 12’ of the 2005 Act.

This case is similar to that of JG who entered in the preferences boxin section 7 the words, ‘I would like my attorneys to consider TG (my son) as my main priority when making decisions.’

The Act entitles the donor to make a written statement concerning her wishes and feelings (s4(6)(a)) which the donees must consider when deciding what decision is in her best interests and the donor has done no more than exercise that right.

My determination under section 23(1) of the meaning and effect of the words in section 7 is that they are not ineffective and do not prevent the instrument from operating as a valid LPA. As a result, I shall direct the Public Guardian to register the instrument.

The Public Guardian has had an opportunity to consider this judgment before it is handed down and agrees with it.