Court of Protection Case Round Up – June 2014

A County Council and MS and RS

This month’s first case looks at gifting, but in a different context from the cases we saw last month.  The application was made by the local authority deputy for MS.

MS had expressed a wish to donate £6,832, 10% of his recent inheritance, to his church, the Church of Jesus Christ of Latter-Day Saints, sometimes known as the Mormons. MS’s mother was strongly opposed to the donation and there were concerns about whether MS appreciated the implications of the decision.

As part of his response to the application, MS sought declarations that he had capacity to litigate, make the gift, manage his property and affairs and execute a Lasting Power of Attorney for Property and Affairs.

The Background

MS had been involved with mental health services for many years and had past diagnoses of bi-polar affective disorder, schizophrenia and schizo-affective disorder.  He received support from his local Community Mental Health team and was the subject of a Community Treatment Order under Section 17A of the Mental Health Act 1983.

In 2005 he gave a tithe of his surplus property and capital to his church.  The amount was approximately £1,600.  Although MS said that he was well at the time, some five months later he stopped taking his medication and was detained in hospital.  MS stopped taking his medication again in October 2012.  He appeared to suffer from religiously based delusions. There was a report of an altercation with a fellow resident whom MS thought was “the devil and needed to be vanquished from his house”.  The Judge commented that “on admission to hospital, he was expressing delusional beliefs about being a Messiah … He spoke at length but he considered the only people more powerful than him were God, Jesus Christ and the Holy Ghost”.

At the time of the judgement, MS was entitled to free aftercare services under Section 117 of the Mental Health Act 1983.  He received £390 per month in Disability Living Allowance and Income Support and made contributions to his church of £20 per month.  His mother held £1,500 on his behalf, the residue of the gift returned by the church in 2006.  MS had received £68,773 from a trust set up by his mother’s parents but inherited by him under his late father’s Will.  His other significant asset was a 26% share of the family home occupied by his mother and sister with an approximate value of that share of £65,000.

The Hearing

MS’s mother was concerned that he might be put under pressure by the church to donate money and referred to her having to ask for the £1,500 donation back.  His mother felt that if his entitlement to benefits were to change he would become her financial responsibility or that of his sister and that “effectively either the State or my family is making a donation of £7,000 to the Mormon church”.  Mrs S also explained that “for many years MS has given unspecified amounts of money to anyone who asks him, whether or not they are known to him.  I believe he still does this.  I believe therefore that he remains very vulnerable financially”.  The Judge commented that there was no evidence that any pressure had been applied by the church and that it was highly unlikely that MS would ever become the financial responsibility of his mother or sister.  He also noted the fact that MS’s mother and sister benefitted from his contribution to the family home which might come to an end sooner than would be the case if MS did not make the tithe.

The Judge did not feel that the gift would be seen as deprivation.

MS’s former consultant psychiatrist felt that he lacked the capacity to make the gift although in a few years time he might gain some insight into “the consequences of his generosity and his need for money”.

MS provided evidence to the Court in the form of a letter explaining that he wished to do only what he felt was biblical and pointing out that he had been managing his Court of Protection allowance. MS did not agree with the evidence given in his two mental health tribunals in 2013.

The letter also contained sections which appeared to show that MS was delusional about who he was and what powers he had, “A word now on my very far from pauline performances when my case was heard (to allude to the Apostle Paul, and his performance each time his case was heard.  Key to Paul’s success when his case was heard (though if I’m not mistaken, he perished after his case was heard, a second time, before Nero) was his enjoying the gift of the Holy Ghost, which my church will not confer on me because of a doctrinal difference – more precisely, a disagreement over the interpretation of two passages of important doctrine. Enjoying the gift of the Holy Ghost was a central reason for the brilliance of Paul’s defence when his case was heard: in the Book of Mormon it states that those who have received the gift of the Holy Ghost (and who keep, or obey, the commandments) can speak with the tongue of angels. Now, as is stated in the reports, I claim to be a prophet, and the first outside the Godhead … in other words, I claim that only the Father, Son and Holy Ghost are greater beings than I am. Parenthetically, I have never claimed to wield as much as, or almost as much power as, they – this is manifestly not so.  I do however believe, by revelation and inference, that if I prove faithful, I will after Judgement Day wield as much, or almost as much power as they presently do … In making this claim, I have a Mount Everest of a credibility problem.  Where, then, are all your Nobel Prizes?  You might ask …

To defend, once more, my claim to be the first outside the Godhead, Joan of Arc had no evidence that she was, as she claimed, sent by Heaven to save France, and drive the English into the sea – she was a sixteen year old girl!  She had no evidence that she had seen the archangel Michael, and St Catherine and St Margaret.  All she had was her word.  As it was with Joan, so it is with me”.

The Judge considered the law on mental capacity and gifts and summarised as follows :

“The statutory capacity test set out in the 2005 Act applies to declarations and decisions made under that Act (see above). As the Code of Practice anticipates, in the majority of gift cases there will be little difference between it and the common law approach set out in Re Beaney 1 WLR 770, [1978] 2 All ER 595.

In Re Beaney, the Court was concerned with how much information is relevant, ie; the amount or scope of the information which the person concerned (‘P’) must be capable of understanding, retaining and weighing in order to have capacity to make the decision for themselves.

One party argued that it was enough if P understood first, that she was making a gift, secondly that the subject matter of the gift was the house, and thirdly, that the person to whom she was giving it was her daughter V (‘the narrow view’).  The ‘broad view’ – which won out – was that it was also necessary for P to understand that she was giving away her only asset of value and was thus depriving her other two children of any real interest in her estate…’

The 2005 Act similarly tells us that ‘the information relevant to a decision includes information about the reasonably foreseeable consequences of deciding one way or another, or failing to make the decision’: this is relevant information that needs to be understood, retained, used and weighed in order to have capacity to make a decision to gift.

In the case of a simple and trivial gift, such as giving a small present to a friend, there is not much to it and very little to grasp in order to make a valid gift.  More significant transactions – those where the reasonably foreseeable consequences are more significant for the person concerned – by definition require the capacity to understand and weigh the more significant consequences.

Thus in Re Beaney, where P was giving her house and only main asset to one of three children at the end of her life instead of by Will, and the significance was to disinherit the other two children, the degree of understanding required was as high as that required for a will, and the donor had to understand the claims of all potential donees and the extent of the property to be disposed of.

Unless one understood that one would be entirely failing to grasp the significance of the transaction :

The degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect.  In the case of a will the degree required is always high. In the case of a contract, a deed made for consideration or a gift inter vivos, whether by deed or otherwise, the degree required varies with the circumstances of the transaction.  Thus, at one extreme, if the subject matter and value of a gift are trivial in relation to the donor’s other assets a low degree of understanding will suffice.  But, at the other, if its effect is to dispose of the donor’s only asset of value and thus for practical purposes to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of.

Martin Nourse QC sitting as a Deputy Judge of the High Court

Re Beaney [1978] 2 All ER 595 at 600

(Consistent with many common law cases, it can be seen that the court in Re Beaney used the word ‘understand’ to include, not merely the ability to comprehend relevant information, but also the ability to use and weigh it, ie; in the common, everyday, sense that a person either does or does not understand what they are doing, the significance of their act).

This kind of approach is consistent with the approach to capacity adopted in other areas by the courts, for example with regard to litigation capacity and medical treatment.  Thus, a person may have capacity to bring or defend a small relatively trivial claim in court, where the nature of the dispute and the issues are simple to understand and weigh, but lack capacity to litigate in a case where the nature of the dispute or the issues are more significant or complex.  Likewise they may have capacity to consent to a simple medical procedure but not something much more significant”.

A Special Visitor saw MS and felt that he did not have the capacity to litigate or manage his property and affairs.  He did have the capacity to execute an LPA for Property and Affairs however.  The Visitor’s comments about the gift were as follows :

“Mr S understands the process of tithing and also the implications for his own finances if he gives away the £6,900 that he believes to be 10% of the original inheritance. 

Mr S’s desire to give this money to the Mormon Church is part of his religious beliefs but not in my opinion part of his delusional belief system.

I could find no evidence that his wish to do this was part of any ‘revelation’, command or direct instruction from God.

On balance therefore I am of the opinion that Mr S does have capacity at this time to make a gift on the tithes principle to his church”.

Dr M, MS’s current consultant psychiatrist, agreed with the Visitor that MS did not have the capacity to litigate or manage property and affairs and did not explore capacity to execute an LPA for Property and Affairs.  However, Dr M felt that MS did not have the capacity to make a gift, saying “my opinion is that his beliefs about the tithe are an extension of his delusions and stem directly from them”.

The Decision

The Judge found that MS had an impairment of, or a disturbance in the functioning of, the mind or brain.  The Judge accepted that MS’s belief that he was a prophet was delusional but said that did not mean all of his religious beliefs were delusional or compromised by the presence of mental illness.  The desire to give a tithe was, the Judge felt, not caused by MS’s belief that he was a prophet.  The Judge felt it was relevant that MS’s belief was a matter of faith.  The evidence as to whether MS had a belief or hope that a tithe would be followed by “God’s financial bounty” was felt to be ambiguous.  The burden of proof is on the person seeking to establish incapacity.  The Judge felt that the issue was finely balanced but “in my view the presumption of capacity has not been displaced and the ‘invisible weight of the presumption’ tilts the scales in his favour”.

The Judge also noted that if he had found that MS fell “just the other side of the capacity line” he would have authorised the tithe on his behalf in any event as being in his best interests.

The Judge also felt that MS had the capacity to litigate.  The Judge also suggested that as Dr T had given his opinion that MS had capacity to execute a Lasting Power of Attorney for Property and Affairs, he ought to see a solicitor to discuss the advantages and disadvantages of it and with a view to making his own arrangements and asking the Court to endorse those arrangements.  The Court noted that “the local authority has been very mindful of MS’s dignity, wishes and feelings and I should like to end by praising it for bringing this application on his behalf”.

The Judgment was a very helpful summary of the law on gifting and delusions and is certainly worth reading in full.

Josife v Summertrot Holdings Ltd

This case is a useful reminder of the law on the enforcement of debts against people who lack capacity.  It concerned the enforcement of debts against a person who lacked capacity.  The claimant in this matter had suffered an acute stroke in 2003.  This affected his ability to communicate and to understand verbal and written communication.  C’s son and his wife had entered into a share option agreement under which the son assumed a debt of £1,300,000 and the wife became guarantor.  They got into financial difficulty and as a result of negotiations in 2006, C became guarantor of the debt.  There was a further agreement in 2008 which, amongst other things, pledged shares belonging to C and granted a second charge over the home owned by C and his wife.  This deed was executed by the wife as C’s attorney.  (Because the wife was bankrupt by this stage, the power of attorney had been revoked by the wife’s bankruptcy).

There was a dispute over whether C had had capacity when the guarantee had been entered into and what effect that had.  The Court found the contract made by C, who lacked capacity, was not void but was voidable provided the other party to the contract knew or ought to have known of C’s incapacity.  However, there was not really any prospect of showing that the other parties had known that C lacked capacity or that they ought to have.

The Matter of AB

This important case dealt with the often difficult issue of the notification of an estranged father in a Statutory Will application.

In this case, there was evidence that the natural father was violent to AB’s mother when AB was six months old to the extent that the mother would not leave AB alone with him.  His violence escalated and he was arrested on suspicion of grievous bodily harm.  The evidence did not say who the victim was or whether he was charged or found guilty of the offence.

Despite the problems, AB’s mother agreed for the father to have contact with AB “recognising the importance of her relationship with her father”.  However, a month later the father abducted AB and took her to his family, around 100 miles away.  He returned with AB the following day but refused to hand her back to her mother until the police intervened. Following that incident, the father was only allowed to have supervised contact with AB at a family centre.  An injunction with power of arrest was granted to the mother which forbade the father from using or threatening violence against her or intimidating, harassing or pestering her including by telephone.  That order lasted 28 days and there was no evidence that it had been extended or renewed.

Father applied for contact and parental responsibility orders and was allowed supervised contact but he did not take up the available sessions.  Since then the mother and AB have not seen the father and the father has neither paid maintenance nor sought contact.  The mother did not know where the father was living but it was thought that the father could make contact through various avenues if he wanted to.

When AB was 13, she expressed an interest in trying to locate her father but according to the mother’s witness statement, her opinion changed when she learned more about him and she decided she did not want anything to do with him.  Subsequent to that, AB was involved in a road traffic accident and suffered a severe brain injury. Professional deputies were appointed.

The Court had to decide whether or not the father and his other children should receive notice of the Statutory Will application. They would be prejudiced by the terms of the Will compared to the intestacy situation. The father’s share would be worth approximately £750,000 and if he died before AB his biological children would have had the same entitlement under intestacy.

The Hearing

It was clear that AB’s view as expressed to the Official Solicitor was that she did not want to have anything to do with her father and that she did not want him to get anything from her estate.

The Judge noted that the evidence on testamentary capacity was not fully resolved and in fact ordered that a further assessment of AB’s testamentary capacity should take place.  However, on the basis that there was reason to believe AB lacked testamentary capacity, the Judge was satisfied that the Court had the power to make interim orders and give directions.

The Judge felt that the mother’s views were very important in the assessment and said that “she had such a fear of the father re-entering their lives if he is served with the application that they might have to move from the home where AB has lived for a significant length of time.  She may also seek for the application for the Statutory Will to be withdrawn. Her reaction, as AB’s mother and primary carer, will have a very detrimental knock-on effect on AB’s stability and well being and that of the whole family”.

The Judge noted that, although the family had moved out of the area and the Court could order that application documents not contain any address references, it did not allay the mother’s fears.  The deputy was concerned that it was possible that AB’s whereabouts could be traced through certain lines of enquiry.

The Court reviewed the Court of Protection rules and the provisions of the Human Rights Act 1998.  The Court also reviewed various relevant cases.

The Decision

The Judge felt that he was obliged to apply the overriding objectives set out in rule 3 of the Court of Protection rules.  He felt that he was not required to make a best interests decision but rather one, “made by a Judge in the exercise of powers given by the Court of Protection rules”.  The Judge stated that the making of this decision “is not an act done or a decision made on behalf of P.  The principles of the Mental Capacity Act 2005 cannot be strictly applied to such a decision”.

Father has a right under Article 6 of the European Convention of Human Rights to a fair hearing.  The Judge stated this is not a qualified right.  Conversely AB has the right to respect for her privacy and family life under Article 8.  Article 8 is a qualified right ie; this right can be interfered with in circumstances where it is necessary for the protection of the right and freedoms of others, such as the right of father to a fair trial.  The Judge said “if father is served with the application and as a result acts as mother fears in a threatening and harassing manner, AB’s privacy and that of her siblings will be invaded and their right to family life interfered with. The court must be satisfied on the balance of probabilities that this is likely to happen and that the outcome for mother and siblings as her family is likely to be so serious that it justifies an interference with father’s rights under Article 6. I must make that judgment without seeing the evidence that father may seek to adduce to challenge the factual evidence and submissions of the Applicant.  Article 8 also applies to the right of father to a family life with AB. His decision to cease contact with AB when she was still an infant and failure to maintain any kind of parental relationship with her since that time are relevant matters to be taken into account by the court in considering how far to give effect to father’s rights in this regard”.

The Judge stated that notifying father of the hearing would delay the making of a final order. However, he felt there was no immediate urgency in making the Statutory Will for example related to AB’s health.  AB’s wishes were highly relevant to the outcome of her Statutory Will application but the Judge had to decide the extent to which these ought to inform the decision about whether to serve the father.  The Court also addressed the question of whether it would be disproportionate to serve father because of the difficulties in locating him but the Judge did not feel that that stage had been reached yet.  The Judge also had to ensure that the parties were on an equal footing.  The Judge said in making his decision “I have found this decision a very difficult one. The factors in favour and against a direction to dispense with service of the application are finely balanced.  In the end I have decided that the factors in favour of notifying father outweigh those against notifying him.  The allegations against him are significant and serious; they are partly but far from full supported by corroborative evidence. However I have not been able to hear father’s side of the story which may shine a different light on the events described.  Weighing all the factors in the balance I have come to the conclusion that I am not satisfied that the circumstances of this case are so exceptional or that there are sufficiently compelling reasons that I must direct that service of the application on father and his children should be dispensed with and I will not grant the Applicant’s application.  I will not direct that father and his children be served with the application papers.  I will order that they be notified of the application.  If necessary I will direct that any documents sent to the Respondents must be redacted to remove any reference to AB’s address or which may assist father in tracing AB (for example the name and address of her general practitioner)”.

The Judge went on to give an indication of the factors which were likely to be given significant weight when the Court made its final decision.  These were factors which the Judge considered should be brought to father’s attention when he is notified of the application.  Those factors were : –

• Father has not seen AB since the contact proceedings were in progress
• AB suffered a severe head injury over ten years after she last had contact with father
• AB’s estate is a very substantial one solely because of the personal injury damages she has received as a result of the injury
• AB’s mother has devoted herself to AB’s care
• AB’s funds are required for her care throughout her life and are likely to be exhausted by the date of her death

The Judge noted that although it may be thought that the circumstances of AB’s case were very rare, in fact the Court of Protection has several applications per year for permission to dispense with service of an application to approve a Statutory Will, Declaration of Trust or making of gifts.

The Judge said that he had been asked to give a written judgment in this application to provide some guidance as to how the Court would approach such applications and said “Each case must be dealt with in the light of its own particular facts and the judge will apply the overriding objective in the light of those facts.  I am well aware that other judges may take a different view from the view I have expressed in this judgment. In my judgment permission to dispense with service or notification of an application altogether should only be made in exceptional circumstances, where there are compelling reasons for doing so.  Otherwise the interests of justice will not be served and the court will not be seen to be acting fairly towards all parties. The conduct of the Respondent may justify such an order: for example if he has been convicted of an offence of physical or sexual abuse of P, or if P’s funds derive from a Criminal Injuries Compensation award where the Respondent was the assailant. In matters concerning the Respondent’s conduct, the court has to take a decision to dispense with service of the application while only having available evidence from the party seeking the order to dispense.  The application is more likely to be successful if supported by objective evidence than unsupported allegations.  The court is more likely to be persuaded of the strength of the case if there is independent and reliable corroborative evidence as to the past behaviour of the Respondent, whether in the form of criminal convictions, court orders, CAFCASS, or other reports by professionals, or other similar evidence.  The court may be willing to make an order to dispense with service of the application where the value of the financial benefit lost to the Respondent by the making of the order is not significant.  Value should be considered both in absolute terms and relative to the Respondent’s means. (A legacy of £10,000 may be of consideration significance to an elderly person on a low income but less important to a person of substantial wealth). The court may also reach the conclusion, usually after enquiries have been made, that the cost to P’s estate or to the parties, and the delay caused in concluding the application, of proceeding with service of an individual or class of Respondents (usually where tracing of potential Respondents will be necessary) is disproportionate relative to the value of the Respondents of the benefit they will lose by the proposed final order.  These examples are not intended to be exhaustive or to limit the circumstances in which judges may make an order to dispense with service of an application on a Respondent”.

This judgment should provide welcome guidance to practitioners faced with service issues in this complex cases.

The Case of Re: MRJ (Reconsideration of Order)

The case of Re: MRJ involved concerns that MRJ’s attorneys for Property and Financial Affairs were financially abusing her.  There were significant concerns raised by the local Council, including verbal intimidation and hurtful comments which ran to 181 page chronology of incidents.  The Judge had made an order suspending the LPA and putting the local authority in place as an interim deputy.  The attorneys applied for reconsideration. During that hearing the Court heard evidence of concerns over the attorneys’ use of a “thinkmoney” online banking account.  Several aspects of the expenditure from the account, such as the amount of money spent apparently for one person at Tesco for a week’s shopping and the payment of utility bills (which MRJ was not liable to pay when she was in sheltered housing) as well as several transactions including those to web hosting companies and uniformdating.com, were unlikely to have been for MRJ.  All this happened while the LPA for Property and Affairs was awaiting registration at a time when neither attorney had legal authority to deal with MRJ’s affairs.

The Judge ordered that the LPA be revoked.