This last month the Court of Protection (“COP”) has considered a case (re OB: Public Guardian –v- AW & Another [2014 EWCOP28]) addressing that point.
The background of the case was that OB had two daughters and in September 2008 executed a Lasting Power of Attorney for property and financial affairs in which she appointed her two daughters (AW and DH) to act jointly and severally to be her attorneys. This was not registered with the Office of the Public Guardian (“OPG”) until 4 March 2011.
Up until February 2007 OB lived in her own home however she then moved to live with one of her daughters, AW, who was formerly a nurse.
In February 2013 DH (the other daughter) contacted the Office of the Public Guardian to express her concern that long standing “pocket money payments” that had been provided to OB’s grandchildren had been stopped and that there had been excessive expenditure from her mother’s account.
The OPG opened an investigation in March 2013 and requested the COP general visitor to meet with OB. The visitor relayed that she met OB at home on 29 March and concluded that she appears to lack capacity to manage her affairs; she was unaware that she had arranged a Lasting Power of Attorney and believed her lawyers were dealing with her finances. The visitor also noted that OB appeared happy living with AW and also was aware that she was contributing towards household expenses stating that she was happy with some of her money being used for adaption work and that her lawyer would sanction this. She also said that she could not be bothered with money.
In September the OPG submitted an application to the COP asking for an order to compel AW to account fully for all expenditure from all accounts held on behalf of her mother since the registration of the Lasting Power of Attorney. The Court also specifically directed that AW was to confirm whether expenditure on her property had been paid for by OB’s funds and if so, provide specification and costing of the work and how it was in the interests of OB.
The OPG also sought an order from the Court stating that in the event that AW failed to provide satisfactory accounts and explanations with regard to the expenditure of OB’s funds, the Court would revoke the Lasting Power of Attorney and appoint a professional Deputy.
During the course of the investigations it established that AW had taken the lead in the management of OB’s finances; she had sold her mother’s property in 2010 and the net proceeds amounted to £376,200.
DH had confirmed that her sister had shown her a plan detailing £80,000 worth of adaptations to AW’s property however DH also went on to say that she believed her sister had spent almost as much as £199,000 on the renovation work.
As you can imagine AW took offence to the investigations and relayed her views to the OPG. She said she felt her sister was simply trying to protect her own inheritance and that she was not visiting her mother. The sister on the other hand said in fact she had stopped visiting her mother because of the abuse she received from her sister.
At the final hearing the OPG relayed to the Court that they had grave concerns as to the cost of the renovation work. AW had acknowledged that most of the works had been paid for from her mother’s funds and that in addition to this she received payments providing care to her mother.
AW tried to convince the Court that she had acted throughout with her mother’s full consent and approval and at all times acted in her mother’s best interests. She tried to suggest that it was only recently that her mother’s memory began to fail and up until that time her mother had consented to AW using her money to make improvements to enable them both to live more safely and comfortably in the property.
The detail of work that was carried out was frankly staggering. It was clearly evident that not all of the works were necessary to improve mother’s safety and comfort. Eventually the Court was able to establish that £183,219 of OB’s money had been used to pay for the works.
The Court then had to decide whether the expenditure of the works was done:-
a] with OB’s consent whilst she had capacity; or
b] as to whether the attorney could be considered to be acting in her mother’s best interests once she had begun to lose capacity; and
c] whether the expenditure added value to AW’s property
The Court decided that by any standards £183,219 was a substantial gift for OB to have made. The Court felt having heard the evidence that perhaps initially OB would have been able to consent to some of the works to have been carried out (and indeed suggested that she may have agreed to £80,000!) but felt that by the time the works had been completed and the expenditure had drifted to £183,219 the mother would not then have had a clue as to what was going on.
The Court also confirmed that in practical terms OB would have had great difficulty in pulling the plug and saying “enough is enough” because AW was a strong and forceful character.
The Court declared because of the obvious conflict between her own interests and that of the mother’s AW should not have been taking decisions unilaterally. Matters should have been referred to the Court for their approval and whilst the Court did have the power to approve gifts retrospectively, the Court would not do so in these circumstances.
Rightly in my view the Court declared that AW had failed to act in her mother’s best interests by refusing to consult or take into account the views of her sister and co-attorney as required by Section 4(7(b and c)) of the Mental Capacity Act. The Court also expressed disappointment that as a result of AW’s words and actions this had severely restricted contact between OB and DH and family. The Judge declared that one of the surest signs of undue influence “is controlling another person’s environment and social interactions by isolating and excluding them from outside supervision and advisers”.
In the circumstances the Court revoked the Lasting Power of Attorney and whilst it could have appointed DH to be the sole attorney, DH advised in the circumstances that she would prefer a professional Deputy to act.
The law is clear when it comes to attorneys benefitting personally. It’s not allowed!! There is without doubt a conflict of interest as was clearly illustrated in this case and for those attorneys who feel it appropriate to either be paid for providing care or wishing to carry out works to benefit their own properties, the matter must be referred to the COP for all such transactions to be authorised.
If you have a query regarding Lasting Powers of Attorney or the Court of Protection, please call our specialist team on 01926 491181 for free initial advice.