Analysis
OB, who was born in 1916, was a widow with two adult children, AW and DH. She lived in her own home until February 2007 and thereafter with AW. On 15 September 2008, OB executed a lasting power of attorney (LPA) for property affairs, appointing AW and DH jointly and severally as her attorneys. OB’s property was sold on 15 June 2010 and realised net proceeds of £376,200. The LPA was registered by the Office of the Public Guardian (OPG) on 4 March 2011. Subsequently, DH expressed concerns that long standing ‘pocket money’ payments by OB to her grandchildren had been stopped and that there had been excessive expenditure from OB’s accounts. The OPG opened an investigation on 7 March 2013 and its visitor reported that OB appeared to lack capacity to manage her affairs. She believed that her lawyer was dealing with her financial affairs and, while pleased to be living with AW and aware that she was contributing towards household expenses and that some of her money was being used for adaptation work, she thought that her lawyer was the one to approve.
On 18 September 2013, an application was made by the Public Guardian for orders, inter alia, that AW account fully for all expenditure from OB’s funds since registration of the LPA and, in the event of a failure to provide a satisfactory account and explain how any expenditure from her funds was in the best interests of OB, to revoke the authority of AW under the LPA. According to the Public Guardian, significant modifications had been made to AW’s property, mostly paid for from OB’s funds amounting to a total of £250,000. This appeared to be excessive in relation to the value of the property. AW refuted those criticisms, asserting that she had acted with OB’s consent and in her best interests, carrying out works that cost OB a total of £183,219. If and to the extent that OB did not have capacity to agree to the expenditure of her funds, AW requested that those transactions be ratified as gifts by OB.
Held (granting the application):
The court has power to revoke an LPA and cancel its registration if the donor lacked capacity to revoke it and the attorney had behaved, or was behaving, in a way that contravened their authority or was not in the donor’s best interest. It was not possible to agree with the submission that AW had acted with OB’s consent and in her best interests. The total expenditure was of such a magnitude that, were it characterised as a succession of gifts, OB’s capacity to make them would have needed to be consistent with Re Beaney deceased [1978] 2 All ER 595. While no doubt OB was initially content to contribute a reasonable quantifiable sum of, say, £80,000 towards the adaptation and refurbishment of AW’s property, and that she had the capacity to approve expenditure at that level, by the time the works had been completed and the expenditure had risen to £183,219 there was no doubt that OB had lost capacity. All these payments were made by AW in her role as her attorney and in a situation, such as this, where there was a conflict between the interests of the donor and the interests of an attorney, an application should have been made for consent or authorisation to act by the Court of Protection. This was not done and the gifts would not be retrospectively approved as there was no evidence to show that the amount expended on works was proportionate to the value of the property, nor was there any assessment of the extent to which any specific adaptations were exclusively for the benefit of a person with a disability and did not enhance the value of the property as a whole. AW had failed to act in OB’s best interests by refusing to consult or take into account the views of DH and, indeed, what she said and did resulted in severely restricted contact between them. One of the signs of undue influence was controlling another person’s environment and social interactions by isolating and excluding them from outside supervision and advisors. In such circumstances, there had been a breach of fiduciary duty by AW taking advantage of her position and profiting at OB’s expense. Accordingly, AW’s appointment as attorney was revoked because OB lacked capacity to revoke the LPA herself and AW had contravened her authority by taking advantage of her position.
JUDGMENT SENIOR JUDGE LUSH: [1] This is an application by the Public Guardian to revoke and cancel the registration of a lasting power of attorney (LPA). The background [2] OB was born in 1916 and was formerly a nurse. She married in 1944. Her husband, who worked for London Transport, died in 1987. [3] She …Continue reading "Re OB, The Public Guardian v AW & anr Neutral citation: [2014] EWCOP 28"