Category: LPAs

COURT OF PROTECTION – Geographical closeness is ‘magnetic factor’ for property deputyship

From the STEP weekly digest

COURT OF PROTECTION – Geographical closeness is ‘magnetic factor’ for property deputyship

Two brothers have been appointed deputies for their 93-year-old father’s property affairs on the basis that he lives much nearer to them than to his third son, who was objecting to their deputyship application. The case, DG & Others v Peter (2014 EWCOP 31), embodies the familiar situation of siblings quarrelling over who should look after the finances of an aged parent with dementia.

BAILII

Clicking through to the Bailii site gives another judgment from Master Denzil Lush, a keen observer of humanity’s failings : and he is given ample opportunity to examine them.

In this case, there was nothing to differentiate between the three brothers in any way – they all had skills, willingness and ability to be Deputies.  There were only two factors that separated them that were “magnetic” – geographical proximity and attitude.

      “28.The old authorities on mental capacity law showed a preference to appoint “persons whose residence admits of frequent visits to the patient and inspection of his affairs.” David and Barry live in Surrey. Each of them visits DG two or three times a week. Their wives visit him separately, and their children go and see him regularly, too. By contrast, Peter lives in Yorkshire and gets to see his father about three or four times a year.
      29.Andrea Watts summarised the position rather well in her skeleton argument when she said:

“The reality of the situation is that the applicants are in a position to assist with day to day care and decision making, and the respondent is not. It is not a criticism of him, but the geographical distance simply makes him a less suitable choice of deputy than the applicants.”

      30.I agree. Their geographical location gives David and Barry the edge.

What was also telling was the attitude.  How carefully one must have to speak in front Mr Master Lush:

      31.There is a marked difference between David and Barry’s attitude and approach and Peter’s towards DG’s carers and the management at the residential care home and the statutory authorities responsible for his care. At the hearing on 19 August, David admitted:

“Yes, we agree that [the residential care home] is not perfect, but if anything is wrong I go and talk to the person who is going to get it fixed. At any time I have an issue, I talk to them. They know me and my wife. I have no qualms about the management. It’s not The Ritz. I wouldn’t expect it to be, but the people – the carers – go out of their way to look after my father. Not just the carers but the gardener, the cleaner, the handyman. It’s a very nice environment.”

      32. Peter, on the other hand, said:

“I’ve complained about cleanliness. I’ve complained about security.”

“I complained to the chief executive of Anchor Homes.”

“I have made Freedom of Information Act requests.”

“My parents were put in [the residential care home] against their will: deprived of their liberty by my brothers.”

“I suggested that they feed my mother through a drinking vessel. The care home refused to do that on the grounds that it was undignified.”

“I sent 50 to 100 emails to Social Services badgering them to get Mum and Dad home.”

“Social Services have not followed through any of their promises.”

“The care home won’t talk to me, either. I don’t understand why they won’t talk to me. They won’t give me any information at all.”

“David and Barry don’t have it in them to challenge everybody. [The residential care home] needs challenging. Somebody needs to challenge them. If I were in charge of my father’s finances, I would.”

“In my desire to get deputyship the main reason is to look after the accounts like David, but I would be a lot harder with [the residential care home] in view of their laissez faire attitude.”

    33. This is essentially a matter of attitude and approach or, as Miss Watts described it, ‘tone’. Whereas David and Barry are able to interact successfully with the carers and statutory agencies which have an interest in their father’s welfare, Peter’s relationship with almost everyone is fraught. Although occasionally his complaints have resulted in a successful outcome for his parents, his victories have been pyrrhic, and overall his approach has been counter-productive. He is a compulsive complainer who has unrealistic expectations and a tendency to become bogged down by minutiae. His brothers are not appeasing an enemy, but simply making appropriate responses and avoiding unnecessary conflict with those responsible for their father’s everyday care.
    Block quotes are from the STEP summary or directly from the case itself.  The case is published for public consumption and is not confidential information – although the identities of the individuals are (as is common with the Court of Protection.

In the Matter of Buckley [2013]

Attorneys are expected to be aware of the law regarding their role and responsibilities. Ignorance is no excuse.

– a highly unsuitable investment and she broke almost every rule in the book in making it”

This is the case of the reptile breeding investments, if ever you needed something to remember it by, and was recently decided in the Court of Protection (Number 12228697) Click here for the full court transcript  It concerns a lady who had made a Lasting Power of Attorney in her later years, appointing her niece C (her only living relative) to be her attorney.  Miss Buckley had moved to a private nursing home, and was, at the time of the case, 81 years old and of fragile mental health.

The Office of the Public Guardian received a complaint about the way C was handling Miss Buckley’s finances, and it started an investigation.  A Court Visitor went to see Miss Buckley.  She made detailed impartial observations about the way Miss Buckley talked about C, and her account of matters that had occurred during her residence at the nursing home was corroborated.  Although communication was difficult, there appeared to be a recognisable element of lucidity and it was apparently that Miss Buckley viewed her relationship with C as being one where C was only after her money, and where she didn’t trust her.

The Office of the Public Guardian applied to the Court for an order that the LPA be suspended, her accounts frozen, full accounts to be made up and for C to be prohibited from encashing any asset owned by Miss Buckley.

The OPG’s investigator summarised the facts as follows:

  • Miss Buckley’s house had been sold for £279,000 in April 2011
  • Between January 2011 and June 2012 C had used £72,000 of Miss Buckley’s money to set up a reptile breeding business
  • C admitted that she had used at least £7650 of Miss Buckley’s capital for her own personal benefit
  • At one stage there had been daily maximum cash withdrawals of £300 a day from Miss Buckley’s Nationwide account.
  • The Nationwide had alerted Social Services in April 2012 and the Police interviewed Miss C in July 2012
  • Miss Buckley may have incurred a loss of about £150,000

The legal issue that has been clarified by this case, to the extent that it was not covered by the earlier case of Re Harcourt (31 July 2012) is the responsibility of an attorney when investing the donor’s funds.

There are two common misconceptions when it comes to investments.  The first is that attorneys acting under an LPA can do whatever they like with the donor’s funds.  And the second is that attorneys can do whatever the donors could – or would – have done personally, if they had the capacity to manage their property and financial affairs.  Managing your own money is one thing.

Managing someone else’s money is an entirely different matter.

The Master went on to declare that whilst an individual can choose to act unwisely, or not at all, stashing their money under the mattress, this was not something that an attorney could do.

Under the Mental Capacity Act 2005 (MCA)  s1(5) an act done, or decision made [by an attorney], must be done or made in [the donor’s]best interests.

Before the MCA came into force, there was a separate investment branch of the Court of Protection who carefully considered the suitability of investments for each patient.  They divided up investments into short term types and long term types, and assessed the type of asset against the investment requirement and suggested a strategy appropriate for that investment.

When considering the suitability of investments, the person’s age and life expectancy are considered to be the most important criteria.  A person of over 80 at the time the court would be asked for investment assessment would be considered to have a life expectancy of less than five years, unless there was clear medical evidence to the contrary.  As such, a short term code would be selected, depending on the amounts at stake.

The Master went on to state that

“generally speaking , attorneys acting under an LPA should ensure that any investment products or services they acquire on a donor’s behalf are provided by individuals or firms who are regulated by the Financial Services Authority.”

This means that part of the value of the investment will be covered under the Financial Services Compensation Scheme.

I would suggest that, as they have fiduciary obligations that are similar to trustees, attorneys should comply with the provisions of the Trustee Act as regards the standard investment criteria and the requirement to obtain and consider proper advice.  I would also recommend that attorneys and their financial advisers have regard to the criteria that were historically approved by the court and the antecedents of the OPG.

The master also reiterated the rule that investments should be made in the name of the donor, not that of the attorney, but that if it was not possible for the asset to be held in the name of the donor, that there must be a declaration of trust over the asset, documenting the true beneficial ownership.  And that any loans of money to a member of the donor’s family should be (unless very small indeed) approved by the court, especially when it is in a case where there might be conflict between the attorney and the donor.

The Court therefore ordered that the LPA be revoked and cancelled, so that a deputy could be appointed.  It was reported that the police had considered her conduct naïve but that no crime had been committed.

This case is one of the most important to come out of the Court of Protection in recent years as it clarifies many of the frequently asked questions and misconceptions.  The Master went on to observe that the court’s authority should be sought in circumstances where it might appear as if the attorney’s own interests might conflict with those of the donor, in particular that:

  • Attorneys should keep the donor’s money and property separate from their own or anyone else’s money
  • Subject to a sensible de minimis exception, an application must be made to the court for an order under section 23 of the MCA 2005 in any of the following cases:
    • Gifts that exceed the limited scope of the authority conferred on attorneys by section 12 MCA 2005
    • Loans to the attorney or to members of the attorney’s family
    • Any investment in the attorney’s own business
    • Sales or purchases at an undervalue; and
    • Any other transactions in which there is a conflict between the interests of the donor and the interests of the attorney