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The divorcing attorney who borrowed a quarter of a million pounds from his mother

01 September 2015

A son who used more than £250,000 of his mother’s money for his own purposes has been removed as attorney. His “appalling” conduct and concern about assets he had bought in his name with his mother’s money being dissipated as part of his divorce led the Court of Protection to appoint deputies instead. This case concerned a lady called ARL and her assets. She was the widow of a London black cab driver and before her husband’s death the couple had moved to Hertfordshire to run a social club. They had two adopted children; a daughter, JJT, and a son, ICL. ARL had appointed them jointly and severally under a Lasting Power of Attorney. The son, ICL, had been dealing with his mother’s finances without input from the daughter. The Office of the Public Guardian had concerns about his management of his mother’s funds and asked for the Lasting Power of Attorney to be cancelled and a deputy to be appointed instead. ICL had hardly covered himself in glory. The OPG’s findings were that:

  1. On 18 July 2014 concerns were raised with the OPG regarding ICL’s management of his mother’s property and financial affairs.
  2. There was a debt of £39,000 in respect of unpaid care fees, which ICL was unwilling to pay because he believed that his mother should be receiving NHS Continuing Health Care.
  3. ICL was also in dispute with Hertfordshire County Council and claimed that ARL had been placed in the nursing home in Radlett without his consent. He had instructed Newlaw Solicitors in Cardiff to apply for compensation on his behalf.
  4. He was not providing ARL with an adequate personal allowance.
  5. It was not known when he had last visited her, but it was thought to have been some time in 2013.
  6. In May 2013 ICL sold ARL’s house in Wheathampstead for £265,000 and used £174,950 from the net proceeds of sale to purchase a flat in his own name in Wheathampstead High Street. The OPG had carried out a search at the Land Registry, which confirmed that ICL is the registered proprietor.
  7. The difference of approximately £90,000 between the net proceeds of sale and the purchase price of the flat had been credited to ICL’s business account, rather than to an account in ARL’s name.
  8. The OPG wrote to ICL on 4 August 2014 asking him to account fully for his dealings with his mother’s finances.
  9. He replied a fortnight, on 18 August, later saying that he had far too many other things to deal with at that time.
  10. He said he was going to meet someone from Labrums Solicitors for advice on his responsibilities under the LPA, “which are now becoming too onerous.”
  11. He has only produced bank statements from October 2012 to October 2013, and an inspection of the bank statements he did produce revealed that he had spent at least £6,641 in a way that was not in ARL’s best interests.
  12. He had failed to account fully for his dealings.
  13. A Court of Protection General Visitor (Christine Moody) saw ARL on 15 August 2014 and confirmed that she has dementia and lacks the capacity to revoke the LPA.

The practitioner who drew up the Lasting Power of Attorney in the first place suggested that rather than a panel deputy, she and the daughter ought to be appointed as deputies. ICL did not agree that he had done anything wrong, saying that “I admit that I have had to use some of ARL’s funds for my own personal affairs, but this was only ever intended as a temporary measure due to my personal circumstances.” His case was:

  1. Before ARL was placed in care, while she was still living in her own home in Wheathampstead, he did everything he could to ensure that she had the best possible care.
  2. He is self-employed and found that caring for his mother was becoming increasingly time-consuming.
  3. As a result of his mother being placed in care, he had been unable to focus on his work for the last two years, and this had put a great strain on him both financially and emotionally.
  4. His sister had been of no assistance whatever.
  5. Until completion of the purchase of the flat in the High Street had taken place, he hadn’t realised that the property was held in his name. He said, “I have subsequently made enquiries of the conveyancer who dealt with the purchase of the property, who confirmed that, as I completed a summary of instructions in my own name, this is the name in which the property was purchased.”
  6. He said it was always the intention that this property was purchased for the benefit of his mother and that he would be happy for the property to be transferred into her name.

He continued to explain his position. That explanation of what he thought it was appropriate to use his mother’s funds for is simply staggering: “I admit that some of the remaining funds have been used for personal outgoings for me and my family. This was because of difficult personal circumstances. As previously stated, I am fully prepared to pay back the entire amount that I have borrowed from my mother as soon as the sale of my former matrimonial home has completed. In the interests of complying with my duties as an attorney, I set out as far as possible an honest account of the remaining funds:

  1. I was caught drink driving in February 2013 and accordingly I borrowed £3,380 from my mother’s funds to cover my legal costs of defending my position (£2,640) and other related costs such as court fees (£500) and a penalty fine (£240). I attach letters confirming these costs sent to me by Freeman & Co. Solicitors and Sweetmans Solicitors.  
  2. I ran out of money in April 2013 and had to borrow £7,500 from a friend, Mrs Pollard, in order to keep afloat financially. I repaid my friend this sum from my mother’s funds.  
  3. I was required to pay a deposit of $1,500 (approx. £995) to secure my son’s place at university in the USA and I borrowed my mother’s funds to cover this.
  4. I was also required to cover my son’s college fees whilst he was studying in the USA totalling £7,500. I paid these fees in instalments from my mother’s funds.  
  5. I sent £300 to my son on a monthly basis whilst he was living in the USA. These payments totalled £2,400.
  6. I also paid for my son’s flights to and from the USA during his year abroad and also for flights for myself to visit him in the USA totalling £2,774.
  7. During a visit to the USA to see my son in August 2013, I spent a total of $630 (approx. £418) on accommodation and £500 on sundry expenses.
  8. I also paid for my son’s car insurance from my mother’s funds totalling £4,757.17.
  9. During the summer of 2013 I borrowed £6,300 of my mother’s funds for works to my former matrimonial home.
  10. As previously mentioned, JJT borrowed £2,500 of my mother’s funds.
  11. I cannot specifically account for the remainder of the £90,050. However. I am sure that, save for the £2,500 borrowed by my sister, it would have been used by me in order to cover the living costs of my family“.

Come the hearing date, ICL asked for the hearing to be adjourned because he had been suffering from stress, been prescribed diazepam and was in no fit state to attend the hearing. ICL also objected because there was a mediation clause in the original order but the Public Guardian had not attempted to mediate. In addition, ICL had been corresponding with Hertfordshire to see whether he had a claim against that Council for unlawfully depriving his mother of her liberty. All of this received short shrift from Senior Judge Lush who said; ” I refused to allow an adjournment because:

  1. I did not consider that it was in ARL’s best interests to delay the resolution of this matter any longer. Serious concerns about ICL’s conduct were raised over twelve months ago.
  2. There was no need for ICL actually to attend the hearing. It was not intended that he should give evidence or be cross-examined. These proceedings are essentially inquisitorial, rather than adversarial, and the court already had most of the evidence before it in written form.
  3. In any event, ICL was represented by counsel at the hearing.
  4. It had been an error on my part to include a mediation clause in the order of 24 June 2015. Whereas mediation may be appropriate in disputes regarding the appointment of an attorney or a deputy, it is generally unsuitable in safeguarding proceedings, such as these.

At the hearing, the family’s representative made much of the fact that ARL had said in an interview with Hertfordshire Social Services that “I like my son managing my money”. However, as the practitioner who made the original LPA pointed out, in the same conversation were references to ARL not knowing where she is or why, references to her managing her own money at the post office and referring to her having plenty of money in her purse despite the fact that she did not have a purse in the nursing home. Senior Judge Lush found that “she has absolutely no understanding of her finances and no awareness that her son has seriously mismanaged her finances”. In addition, despite the son saying that he was willing to transfer the flat in High Street which he said had been put in his name mistakenly, the flat remained in his name, was currently let and all of the income had gone to ICL rather than his mother. The daughter said that she had left the management of her mother’s finances entirely to her brother which with hindsight had been an error of judgment on her part. She also said that “her brother hadn’t had a proper job for years and that he had been living off his mother’s funds because he claimed “it’s our inheritance”. Senior Judge Lush confirmed, as he has before, that if there is a dispute about NHS Continuing Healthcare, the attorney should continue to pay the donor’s care fees. If it is then found that the donor was in fact eligible for NHS Continuing Care after all there would be a refund. Senior Judge Lush was concerned that ARL’s placement in the care home was in jeopardy because ICL had not paid her care fees. Anything which would prejudice her place would not be in her best interests. Senior Judge Lush summarised the hallmarks of many of these cases, saying ” As is frequently observed in cases of this kind, a failure to pay care home fees, a failure to provide an adequate personal allowance, a failure to visit, and a failure to produce financial information to the statutory authorities, go hand in hand with the actual misappropriation of funds. Senior Judge Lush summarised ICL’s wrongdoing as follows: “In this case, ICL’s misappropriation of funds includes, but is not limited to:

  1. The purchase of a property in his own name, using £174,950 of his mother’s funds. One of my particular concerns is that ICL is currently going through an acrimonious divorce, and there is a possibility that ARL’s funds could somehow, inadvertently, become part of the settlement in the matrimonial proceedings.
  2. Pocketing the rental income from the property for the last two years.
  3. The funds referred to in paragraph 16 (a) to (i) above, which by my reckoning amount to £36,524.17.
  4. ICL’s admission at paragraph 16(k) that he cannot specifically account for the remainder of the £90,500, “However, I am sure that, save for the £2,500 borrowed by my sister, it would have been used by me in order to cover the living costs of my family.”

I have no confidence in ICL when he says, “I am fully prepared to pay back the entire amount I have borrowed from my mother as soon as the sale of my former matrimonial home has completed.” He made a similar promise on 15 January 2015, when he offered to transfer title to the flat in the High Street from his name into his mother’s name, but has done nothing about it during the last seven months”. He was also sceptical about ICL’s evidence about his health and the way he had conducted his own and his mother’s legal affairs:

“I find it incredible that ICL is ready, willing and able to pursue a claim against Hertfordshire County Council for unlawfully depriving ARL of her liberty, yet is pumped up with tranquillizers and was in no fit state to attend the hearing in this matter.

I also find it curious that he has instructed so many different firms of solicitors or other providers of legal services at his mother’s expense, often to defend the indefensible:

  1. Rowlington Tilley & Associates drew up the LPA.
  2. He was going to meet someone from Labrums Solicitors, St Albans, to advise him on his responsibilities under the LPA.
  3. NewLaw Solicitors, Cardiff, were advising him on his dispute with Hertfordshire County Council regarding ARL’s placement in the nursing home in Radlett and were also pursuing a claim against the NHS for Continuing Health Care.
  4. Freeman & Co., Solicitors, Manchester – The Home of Mr Loophole – had been instructed to defending him when he was prosecuted for drink driving.
  5. He also instructed Sweetmans, another firm of specialist drink driving solicitors.
  6. Taylor Walton acted for him in the sale of his mother’s house and the purchase of the flat in the High street, and in the proceedings brought against him by the Public Guardian.

I wonder whether this is a smokescreen to ensure that no one firm or company is fully aware of the extent of his ineptitude and deceit”.

Not surprisingly, Senior Judge Lush concluded that ICL had behaved in a way that contravened his authority and was not in his mother’s best interests. He was satisfied that revoking the LPA was necessary to prevent a crime. He appointed the daughter and the practitioner as deputies. Of course, once the decision is made, the Court has to decide what should happen about costs. Normally of course, the costs would come from the mother’s estate. However, Senior Judge Lush felt that the circumstances of this case justified a departure. He said:

“ICL’s conduct has been appalling and, like so many other proceedings he has been involved in, he has been unsuccessful. I don’t see why ARL should be expected to pay the costs of defending behaviour that has been inexcusable and contrary to her best interests.

If, as ICL said in his letter to the OPG dated 18 August 2014, his responsibilities under the LPA were becoming too onerous, why didn’t he disclaim his appointment then, instead of opposing the Pubic Guardian’s application and allowing these proceedings to proceed to an attended hearing twelve months later at considerable expense?”.

The son had to bear his own costs but the costs of the practitioner were paid by ARL. Comment It never ceases to amaze and sadden me when I see the number of ways in which unscrupulous attorneys think they can use the donor’s money. In this case, the son seemed to be under the impression that the money was his inheritance and he would get it anyway so he might as well spend it now. Of course, we can all have sympathy with someone who has been caring for a disabled relative and that does often have economic implications. The way in which ICL went about sorting things out though was completely unacceptable. It is possible for somebody in that position to claim a support payment to enable them to provide the care. Here though, the son seemed to think that his mother’s money should be used to bankroll anything from his son’s education in the USA to the son’s rather eye-watering £4,757.17 car insurance bill. Not surprisingly, the LPA was revoked, with particular concern from Senior Judge Lush that the funds that the ICL had misappropriated from his mother and put in his own name might somehow become mixed up in the divorce the son was now going through. As with other financial abuse cases, the tell tale signs were there. Failing to pay care fees and provide an adequate personal allowance went hand in hand with a failure to visit and a failure to produce financial information to the OPG. These are so often the hallmarks of a case where, when the OPG digs a little deeper, financial abuse is taking place. Case: ARL, Re [2015] EWCOP 55 (18 August 2015)



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