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You are here: BAILII >> Databases >> Scottish Sheriff Court Decisions >> C against M (Sheriff Court Civil) [2025] SCALL 29 (20 March 2025)
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Cite as: [2025] SCALL 29

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SHERIFFDOM OF TAYSIDE, CENTRAL AND FIFE AT ALLOA
[2025] SC ALL 29
ALO-B104-23
JUDGMENT OF SHERIFF CHARLES LUGTON
in causa
C
Applicant
against
M
Respondent
Act: Blockley, advocate
Alt: Bonnar
Alloa 20 March 2025
The sheriff, having resumed consideration of the cause, finds the following facts admitted or
proved:
The adult and the parties
1.
The adult suffers from Alzheimer's disease. Since 2019 she has resided at B Care
Home.
2.
The adult's late husband died in January 2015.
3.
The applicant and the respondent are two of the adult's sons. The adult also has two
other sons, who are referred to in this judgment as Daniel and Michael.
2
The continuing and welfare power of attorney
4.
On 13 May 2015 the adult granted a continuing and welfare power of attorney ("the
POA") in terms of which she appointed the applicant and the respondent as her attorneys.
5.
The POA confers wide continuing powers on the parties to manage the adult's
property and financial affairs. The continuing powers came into effect upon the registration
of the POA with the Public Guardian on 5 June 2015.
6.
The POA provides for the welfare powers to be brought into effect by the issuing of a
letter or a certificate by a medical practitioner, stating that the adult is not capable of
exercising the welfare powers, or any of them, as set out in the POA.
7.
The POA entitles the attorneys to act separately or together, but each informing the
other of all actions taken by them as soon as practicable.
The adult's declining health/ incapacity
8.
After the death of her husband the adult began to exhibit signs of dementia. She
would lose her keys. The adult had been an avid reader, but at a certain point she stopped
reading books and newspapers. She stopped socialising. She would sit in her late
husband's office, playing solitaire on the computer. The applicant and Daniel began
bringing the adult food after her husband's death.
9.
On or around 7 November 2015 the adult was admitted to B Hospital with a fracture
dislocation of the shoulder, after falling in her garden. During her admission the adult was
noted to have increasing memory problems. She was seen by psychiatry, who diagnosed
early Alzheimer's dementia.
10.
Between 2015 and 2019 the adult continued to live at home. Her health declined
gradually. She received care and assistance from her sons. The applicant and Daniel took
3
the adult food until around 2017/18 when the respondent arranged for her to receive meals
on wheels. This continued for a period until the local authority stopped providing this
service. In around 2017 the applicant became concerned about the adult leaving food in the
fridge for periods of days. At a certain point, Daniel disconnected the gas cooker in the
adult's home due to concerns that she might not turn it off properly.
11.
By around late 2018 the adult would look at her patterned kitchen wallpaper and
imagine that there were spiders on the wall. At this time the applicant was also concerned
that the adult was not drinking enough and that she was at risk of becoming dehydrated. At
one moment the adult would be capable of engaging in a conversation, but at the next she
would be vacant.
12.
For a period the adult received care from professional carers.
13.
In around early 2019 the adult's health deteriorated. She did not recall her own
house and she did not know why she was staying there.
14.
On 16 January 2019 the adult's GP assessed her as lacking capacity to act and to
make, understand and retain the memory of decisions relating to medical treatment, her
welfare and her financial affairs. The GP noted that the adult had very poor memory and
recall and that she was not orientated.
15.
On the same date the GP issued a Certificate of Incapacity under section 47 of the
Adults with Incapacity Act 2000 ("the 2000 Act"). The GP noted that the cause of the adult's
incapacity was dementia and that she was likely to be permanently incapable.
16.
For a period during the first half of 2019 the adult was an inpatient at A hospital. In
around May 2019 she was moved to B hospital. In around July 2019 the adult was placed in
B Care Home.
4
The respondent's knowledge of the adult's diagnosis and declining health
17.
From 2015 onwards the respondent was aware of the adult's Alzheimer's diagnosis
and of her declining health. In late 2015 there was discussion between the brothers of the
possibility that the adult might have dementia. Subsequently, in an email to all of his
brothers including the respondent, dated 23 December 2015, Michael wrote: "Mum has been
diagnosed with a terminal condition Alzheimer's disease, she will at some point in the
future need full time care or go into a nursing home the same as Gran did."
18.
The respondent was in China between July/ August 2016 and July/ August 2018.
During this period he would return to Scotland for the Easter and Christmas breaks. The
respondent's wife saw the adult regularly, to provide her with physiotherapy, do her nails
and bring her food. On one occasion the respondent was facetiming his wife when the
police arrived, having found the adult walking her dog around the town at 7am.
19.
After the respondent returned to live in Scotland in July/ August 2018 he started
seeing the adult regularly. He would bring the adult food. He would buy groceries for her.
He was or should have been aware of the decline in the adult's health that occurred from
late 2018 onwards.
The adult's bank accounts
20.
The adult has two bank accounts: a Bank of Scotland ("BOS") account and a Royal
Bank of Scotland ("RBS") account. Following the January 2019 capacity assessment the
applicant took control of the BOS account. The balance was between £100,000 and £120,000.
The applicant paid for the adult's gas and electricity bills from her BOS account. The adult
also had the proceeds of a life insurance policy which had been paid out. The applicant
used these funds to pay the adult's care home fees.
5
21.
The respondent took control of the adult's RBS account.
The adult's rental properties
22.
The adult owns two rental properties which she inherited from her late husband.
These are referred to as the JG and DC properties. Prior to the adult's husband's death,
Michael received the rental income from the JG property and Daniel received the rental
income from the DC property. After his death, it was agreed that the rental payments from
both properties would be paid into the adult's bank accounts.
23.
From February 2015 the rental payments from the DC property were made into the
adult's RBS account.
24.
The rental payments from the JG property were not paid into either of the adult's
bank accounts. During 2016 the applicant raised this with the respondent. The respondent
advised him that Michael had taken on the management of the JG property.
25.
In an email, dated 6 November 2016, Michael advised that the tenant of the JG
property was one of his employees. He wrote that he was using the rental payments to
recoup money that he had previously spent on having the property restored to a habitable
state.
26.
In an email, dated 31 May 2018, the respondent advised that the rental payments for
the JG property were being paid into a BOS account held in his name as the adult's attorney,
and in Michael's name. The respondent wrote that he oversaw the account and that its
purpose was to ensure that there were funds available for repairs, insurance and
inspections. He wrote that on his return the account might be closed, with the funds being
transferred to another account, but that he would first seek advice for inheritance tax
purposes.
6
27.
The terms of the respondent's email were false and misleading. The bank account to
which the respondent referred did not exist. Michael continued to receive the rental
payments for the JG property, which he treated as his personal income.
28.
The applicant told the tenant that she must make rental payments into the adult's
bank account, failing which she would be evicted.
29.
The tenant made monthly rental payments of £425 into the adult's BOS account for
the period 29 December 2022 to 28 June 2023.
30.
Subsequently, Daniel attended the JG property and served an eviction notice on the
tenant. He did so with the applicant's agreement.
31.
The property has remained vacant since the eviction of the tenant. Neither the
applicant nor the respondent has attempted to secure a new tenant. Neither party has
ensured that a valid policy of home insurance is in place or taken any steps to manage and
maintain the property.
Loan of £14,000
32.
E Limited is a company which owns a business that is run by members of the adult's
family ("the family business"). Originally the adult and her husband held 52% of the
company's shares. The four sons each held shares in the company. After the death of the
adult's husband, the brothers each received 25% of the shares of the company. The
applicant and Daniel ran the business. In or around October 2018 the respondent and
Michael took over the running of the business and bought the shares held by the applicant
and Daniel.
33.
When the respondent and Michael took over the business, they found that the bank
account was overdrawn, bills had not been paid and a major customer had moved.
7
34.
On 3 October 2018 a payment of £14,000 was made from the adult's RBS account.
The transfer was made by the respondent.
35.
Prior to the payment being made the respondent and the adult signed a loan
agreement, dated 28 September 2018. The purpose of the loan agreement was to provide
funding for the family business.
36.
The agreement provided that no interest would be charged and that the loaned sum
must be repaid in full by 31 March 2019. The loan has not been repaid to date.
37.
The respondent made the transfer without making the applicant aware of it or
obtaining his agreement in advance.
Withdrawal of £6,000
38.
On 26 February 2020 the applicant made a withdrawal of £6,000 from the adult's
RBS bank account, in settlement of the adult's share of a common repair to a driveway.
39.
The driveway was the common property of the adult's DC property, the family
business's premises and a third property.
40.
Prior to making the payment, the respondent did not inform the applicant or obtain
his views regarding the proposed common repair and the payment of the adult's
contribution.
Removal of funds from RBS ISA
41.
The adult inherited a sum in excess of £110,000 from her late husband, which was
held within an RBS ISA.
42.
The respondent and Michael were the executors of their late father's estate. RB,
solicitor, was instructed to undertake the executry work.
8
43.
On 25 February 2019, RB met the adult and the respondent at the adult's house. RB
explained to the adult that an item of her husband's estate was still pending. Some
paperwork was required "to be able to get the funds out." She asked the adult whether she
would like her two sons to deal with this. The adult replied that she had four sons. The
adult said that she was more than capable of taking care of her own affairs and that she
would like to see the paperwork. RB said that she did not wish to put pressure on the adult
by turning up and expecting her to sign papers there and then. She told the adult that the
paperwork would be about five pages and that she would hand it into her. She said that
over the next few weeks she would review the paperwork that had already been started and
get back to her.
44.
RB's file does not contain any papers that were signed by the adult following the
meeting that took place on 25 February 2019.
45.
In around August 2019 the respondent paid the funds held in the ISA into his own
bank account.
46.
At the times of the meeting in February 2019 and of the subsequent transfer of the
funds in August 2019 the adult lacked capacity to take actions and decisions in relation to
her property and financial affairs, having been permanently incapable of doing so since at
least January 2019. The applicant was, or should have been, aware of the adult's incapacity
in relation to these matters.
47.
The respondent did not obtain the adult's consent to the transfer prior to making it.
48.
The respondent did not inform the applicant of or obtain his agreement to the
proposed transfer of the funds. The applicant was unaware of the existence of the ISA until
around 2019, when Daniel came across a letter which contained a reference to it. The
applicant made enquiries with RBS and eventually traced the account number. In around
9
June 2020 the applicant contacted RBS again and was told that the funds had been paid out
and the account had been closed.
49.
The respondent derived a personal benefit from transferring the funds to his bank
account. The transfer was commensurately detrimental to the finances of the adult.
Small cash transactions
50.
Between 10 January 2019 and 8 February 2019 the respondent made a series of ATM
withdrawals from the adult's RBS account, each in the sum of £100. The respondent
purchased groceries for the adult, including food, drink and newspapers with funds from
the account.
Finds in fact and law:
1.
Since at least 16 January 2019 the adult has been permanently incapable in relation to
decisions about, or of acting to safeguard or promote her interests in, her property and her
financial affairs.
2.
The respondent breached the fiduciary duty that he owed to the adult by:
(i) misleading the applicant regarding to whom the rental income of the JG property was
being paid and as regards the management of the property, in his email of 31 May 2018;
(ii) withdrawing £6,000 from the adult's RBS bank account on 20 February 2020 for the
purpose of paying the adult's share of a common repair to the driveway of the DC property
without informing the applicant and obtaining his views and agreement; and
(iii) transferring the funds held within the RBS ISA to his own bank account in around
August 2019, to his personal benefit and to the detriment of the adult's interests, without
informing the applicant and obtaining his views and agreement.
10
3.
The applicant and the respondent breached their duty to act with reasonable skill
and care by failing to take reasonable steps to manage and maintain the JG property, to
obtain a valid policy of home insurance and to make efforts to secure a tenant.
Finds in law:
1.
It is necessary to revoke the respondent's appointment as continuing attorney in
order to safeguard and promote the adult's interests in her property and her financial
affairs, in terms of section 20(2)(e)(ii) of the 2000 Act.
2.
It is necessary to ordain the respondent to submit accounts in respect of the period
from 15 June 2015 to date for audit to the Public Guardian in order to safeguard and
promote the adult's interests in her property and her financial affairs, in terms of
section 20(2)(b) the 2000 Act.
3.
The adult's interests in her property and her financial affairs would not be
adequately safeguarded or promoted by making any alternative order under section 20 of
the 2000 Act.
4.
These orders will benefit the adult in a way that cannot reasonably be achieved
without their imposition, for the purposes of section 1(2) of the 2000 Act.
5.
These orders are the least restrictive option in relation to the freedom of the adult,
consistent with their purpose, in terms of section 1(3) of the 2000 Act.
THEREFORE, Sustains the applicant's plea in law and repels the respondent's first, second,
third and fourth pleas in law; Grants the applicant's second and third craves, revoking the
respondent's appointment as continuing attorney, in terms of section 20(2)(e)(ii) of the
2000 Act, and ordering the respondent to submit accounts to the Public Guardian for audit
11
from the period 15 June 2015 to date, relating to his intromissions qua continuing attorney,
in terms of section 20(2)(b) of the 2000 Act; and Refuses the applicant's first crave.
THEREAFTER, fixes a hearing for discussion of whether (i) the respondent's appointment as
the adult's welfare attorney should be revoked, in terms of section 20(2)(e)(ii) of the
2000 Act; and (ii) the applicant should be ordained to carry out his duties as continuing
attorney subject to the supervision of the Public Guardian, in terms of section 20(2)(a) of the
2000 Act; and for determination of all questions of expenses.
NOTE
Introduction
[1]
This summary application concerns a continuing and welfare power of attorney ("the
POA") which was granted by the adult on 13 May 2015. The adult conferred wide
continuing powers upon her attorneys to manage her property and her financial affairs,
which took effect on registration of the POA with the Office of the Public Guardian on
5 June 2015. She also granted welfare powers which were to become operative when she
became incapable of exercising them herself.
[2]
The adult's attorneys are the applicant and the respondent. They are two of her sons.
The adult also has two other sons, who I shall call Daniel and Michael. The adult was
married, but her late husband died in January 2015.
[3]
The applicant craves orders to revoke his co-attorney's continuing powers and his
appointment as continuing attorney, in terms of section 20(2)(e)(i) and (ii) of the Adults with
Incapacity (Scotland) Act 2000 ("the 2000 Act). He also invites the court to ordain the
respondent to submit accounts covering his tenure as attorney to the Public Guardian to be
12
audited, in terms of section 20(2)(b) the 2000 Act. The application is premised on allegations
that the respondent has breached his duties to the adult while intromitting with her
property.
[4]
I heard a diet of proof on 7 June 2024, 6 September 2024 and 17 January 2025. The
applicant, the respondent, Daniel and Michael gave evidence. There were no other
witnesses. The parties lodged written submissions on 7 February 2025.
The evidence
The applicant
[5]
The applicant was 53 years old. He worked for a coffee company.
The adult's health
[6]
The applicant explained that the adult suffered from Alzheimer's disease. She
received her diagnosis during a period which she spent in hospital in 2015, following which
Michael sent out an email to the brothers to advise them of this. He was referred to a letter
on 18 December 2015 from NHS Forth Valley's mental health team to the adult's GP, which
recorded a diagnosis of early Alzheimer's disease. The applicant did not recall having seen
the letter before.
[7]
The applicant gave an account of the adult's mental health between 2015 and 2019.
The adult had declined gradually during this period. Not long after the death of her
husband in 2015, the adult had started to show signs of dementia. For example, she would
lose her keys, or she would forget that the applicant was there if he had come to visit her.
The adult had been an avid reader, but she stopped reading books or newspapers, though
she continued to do Sudoku.
13
[8]
The applicant and Daniel started to take the adult food after their father died, though
the applicant explained that the adult had never been much of a cook and their father had
done most of the cooking before his death. The respondent had arranged for the adult to
receive meals or wheels in around 2017/ 2018, but the council had subsequently stopped this
service as it wasn't profitable. In around 2017 the applicant had become concerned about
the adult leaving food, such as sandwiches, in the fridge for days on end. Michael had
turned off the gas cooker in the adult's home due to concerns that she might not turn it off
properly. The applicant could not remember when this had happened.
[9]
By around late 2018 the adult would sometimes believe that she could see spiders on
the patterned wallpaper on her kitchen. The applicant had concerns about the adult not
drinking enough and becoming dehydrated. He described her as being "a bit wondered."
She would "go down" one minute, but he could have a conversation with her the next
minute. The adult had had carers later on. The applicant was uncertain as to when this had
started. The respondent had made the arrangements for this.
[10]
On 16 January 2019 the adult was certified as lacking capacity by her GP. The
applicant confirmed that he had arranged the GP's capacity assessment as a result of
concerns regarding the adult's mental health. Later in 2019 the adult was moved to B Care
Home.
The POA
[11]
The applicant said that the adult had set up the POA in May 2015, shortly after his
father died. His understanding was that as attorneys, he and the respondent were
responsible for looking after the adult's health and her financial affairs. The respondent had
14
been working in China from around 2016 to 2018, but he came home quite regularly, and he
was in contact while away.
The adult's bank accounts
[12]
The applicant was asked what steps he had taken in relation to the adult's financial
affairs after her GP had assessed her as lacking capacity in January 2019. The applicant said
that the adult had two bank accounts: a Bank of Scotland ("BOS") account and a Royal Bank
of Scotland ("RBS") account. He had taken control of the BOS account. The balance of the
account was probably between £100,000 and £120,000. The applicant had set up internet
banking to allow him to pay the adult's bills out of the account, such as for gas and
electricity. The adult also had a life insurance policy which had paid out. Her care home
fees were paid from this.
[13]
The applicant said that the respondent had already taken control of an account
which the adult held with RBS. Although the respondent managed the account, the
applicant had access to it online. The account had just accumulated funds.
The adult's rental properties
[14]
The applicant explained that the adult owned two rental properties, which I shall call
the DC and JG properties.
[15]
The applicant explained that while their father was alive, Michael and Daniel had
each received the rental payments from the JG and DC properties, respectively. After his
death this had ended, as it had been agreed that both sets of rental payments should be paid
into the adult's account so that "no one was getting anything different to anyone else." The
new arrangement was due to begin in February 2015. The DC property rental payments
15
were deposited into the RBS account which the respondent controlled from around
March 2015 onwards. But the same arrangement was not instigated for the JG rental
payments. The applicant said that he had raised this with the respondent in 2016. The
respondent had said that he was making repairs to the property, and that he was recouping
the expense of this.
[16]
The applicant said that Michael had taken on the management of the JG property.
He was referred to an email sent by Michael on 6 November 2016, in which he wrote:
"As you are aware the house required some work to bring it back up to a habitable
state. I arranged for the work to be done and paid the contractors, the property is
now occupied. The tenant in the property is employed by me and the rent is
deducted from their wages. I am using the rent repayments to recoup the money I
spent on the property, when this has been done I will start to pay the rent into
mum's account when it is deducted from their salary."
At the time the applicant had accepted this, but he had never seen evidence of the repairs
and the rent had not started to be paid into the account. He raised this with the respondent,
who said he would sort it out. Eventually the applicant went to see the tenant to tell her that
she would have to pay the money into the adult's account or face being evicted. He did not
speak to the respondent or Michael about this, as by this stage they were not on speaking
terms.
[17]
In cross examination the applicant was referred to production 2 within the
respondent's fourth inventory of productions, which comprised copies of statements for the
adult's BOS bank account, from 29 December 2022 to 28 June 2023. He accepted that these
showed monthly payments of £425 being made by the tenant from January 2023 to
June 2023. The applicant confirmed that his conversation with tenant regarding to whom
the rental payments should be made had taken place prior to this. The respondent had told
16
her to ignore this. He had then served an eviction notice on the tenant. He thought this had
happened in the late 2022.
[18]
The applicant confirmed that the JG property was now vacant. He had taken no
steps to check on it since it had been vacated. He did not know whether there was a valid
home insurance policy in place. He assumed that the respondent was managing the
property. He had not discussed the need for the property to be managed with the
respondent, as they were not on speaking terms. The applicant was asked about what steps
he had taken to chase historical rental payments for JG, for the period prior to January 2023.
He said that the respondent and Michael had been responsible for overseeing the property.
He rejected the suggestion that he had abdicated his responsibility. He said that he had
spoken to the public guardian and the police about the missing money; and both had
advised him to raise court proceedings, which he had done.
[19]
In re-examination the applicant was referred to an email sent by the respondent,
dated 31 May 2018, which contained a passage in the following terms:
"I can confirm that the rent for the JG property is being paid into a BOS account,
currently in my name, as POA for mum, and Michael's name. I oversee this account
to ensure that it is operated correctly, and for information, the reason for having this
account is to ensure that there are funds easily available to pay for repairs, insurance,
inspections etc can be assessed without having to wait for you to supply the money.
It may be that on my return this account will be closed and the funds transferred into
either RBS or BOS and this account closed. However, as above, in the terms of IHT
etc I will seek professional advice on the best way to structure such things before any
changes are made."
Loan of £14,000
[20]
The applicant was asked next about a loan of £14,000 that had been made on
3 October 2018. He explained that this related to E Limited. E Limited was a company that
owned a business which was run by members of the family. It had been set up by the
17
applicant's father in 1996. His parents had 52% of the company, with the four sons each
having shares in it. The respondent and Michael were due to receive their parents' share of
the company after his death. But the Will was varied to get below the inheritance tax
threshold. The effect was that each of the four brothers received a 25% share of the
company.
[21]
The applicant and Daniel ran the business for a period of years. But in around
October 2018 the respondent and Michael bought their shares and took on the management
of the business. This coincided with the timing of the loan of £14,000. The applicant
confirmed that he had not been aware of a loan being in contemplation at the time of the sale
of his shares. The loan had come out of the adult's RBS account of which the respondent
had control. The effect was that the account was overdrawn by around £10,000. The bank
issued unauthorised overdraft charges and charged interest, running to hundreds of
pounds. Eventually the loan sum of £14,000 was repaid, but no extra payment was made to
cover the bank charges. The applicant said that he had probably messaged the respondent
when he discovered that £14,000 had been taken from the account. He could not remember
if he had received a reply.
[22]
The applicant confirmed that this happened at a time when the adult's mental health
was such that she thought she could see spiders on her kitchen wall and he was concerned
about her becoming dehydrated, as described above.
Withdrawal of £6,000
[23]
The applicant was asked about a withdrawal of £6,000 which was made from the
adult's RBS account on 26 February 2020.
18
[24]
The applicant had first become aware of the withdrawal when he saw it on his app.
He said that he had messaged the respondent to ask about the withdrawal. He didn't think
that he had received a reply at first. At some point he had been told that the payment was a
loan. He had been told later that it was the adult's share of a repair to a driveway which
was shared by the premises of the family business, the DC property and a third property.
[25]
In cross examination the applicant was referred to an invoice for repairing and
resurfacing the driveway at a cost of £19,200, issued by HB Roadways Surfacing on 3 August
2019. The applicant said that this was very expensive and queried why the adult should
have to pay such a large proportion of the cost, given that the use of the driveway by the
occupants of her property would involve driving a single car up and down the driveway.
[26]
The applicant said that in a previous year he had got a quote for a repair of the
driveway, but the figure had been ridiculous. Instead, he had made regular repairs to the
driveway himself.
Small cash transactions
[27]
The applicant also spoke to having noticed a number of smaller withdrawals that
had been made from the adult's RBS account between January 2019 and November 2019.
These were withdrawals from an ATM or expenditure at Tesco or the Coop. He said that
the transactions must have been made by the respondent or his wife, as the respondent held
the only bank card for the account. He thought it was unlikely that the money had been
used to purchase supplies for the adult: he could see no evidence of ready meals or similar
purchases when he went to see her. Some of the purchases were for alcohol, but the adult
didn't drink. He did, however, accept that the respondent was going to see the adult a bit
more often at around this time.
19
Removal of funds from RBS ISA
[28]
The applicant was asked about a RBS ISA which had been held by his late father. He
believed that the ISA had contained around £118,000. He said that his father had left the ISA
to the adult. Following his father's death, the applicant first became aware of the account's
existence when Daniel found a letter which contained a reference to it. But the respondent
and Michael said that they couldn't find the ISA, which the applicant found strange. The
applicant eventually traced the account and obtained the account number. He provided the
bank with the POA, as evidence that he was his mother's attorney. At that stage his
understanding was that the funds were "sitting in probate." A year later, in June 2020, the
applicant contacted the bank about the ISA again, only to discover that the funds had been
paid out and the account had been closed. The applicant said that the adult would not have
given the money to one of her four children.
[29]
In cross examination the applicant was referred to a solicitor's file note, dated
25 February 2019, of a meeting at the adult's house, at which the adult, the respondent and
RB, solicitor, are noted as being present. The note records that the solicitor explains to the
adult that an item of her husband's estate is still pending and is "requiring some paperwork
to get the funds out." The solicitor is noted as asking whether she would like her sons to
deal with this, but the adult replies that she is more than capable of taking care of her own
affairs and that she would like to see the paperwork. The solicitor responds that she will
hand the paperwork in to her. She says that she does not want to put pressure on her to sign
it there and then. The adult clarifies with the solicitor that the paperwork will be about five
pages long and says that she will not take long to read it. The solicitor says that the
20
paperwork has already been started; and that she will review it and get back to them in the
next few weeks.
[30]
It was put to the applicant that while this meeting had taken place a few weeks after
the GP had assessed her as lacking capacity, it came at a time when she was living on her
own. He responded that the adult had not wanted to go into a care home, but she was
receiving support from carers. She didn't know what she had in her bank accounts and she
would sign anything that was put in front of her.
Payment of care home fees
[31]
The applicant said that the care home fees were in arrears by £10,000. Last year he
had needed to cash in the adult's premium bonds in order to pay the fees, as the funds in her
bank account were exhausted.
Daniel
[32]
Daniel was 51 years old and worked for Royal Mail.
The adult's health
[33]
He confirmed that after his father passed away in 2015 he had provided care and
assistance to the adult. He and the applicant had been managing the business and they had
brought her food from the business's premises every day. They would buy her tea and
biscuits from the local supermarket, and they would bring her hot meals. Latterly, the
respondent and Michael had taken on the responsibility of looking after the adult. Daniel
gave a similar account of the decline in the adult's mental health to that of the applicant. He
had noticed initial symptoms in her prior to his father's death. She had stopped socialising,
21
reading and doing sudoku and crosswords. She would often sit in his father's office playing
solitaire on the computer.
[34]
Daniel recalled that in late 2015 there had been a lot of discussion between the
brothers regarding the possibility that the adult might have dementia. She had been
scanned and the diagnosis had been confirmed. Daniel was uncertain as to whether the
adult had been given medication in 2015. A care package had been put in place, but this
came later.
[35]
He said that there was a major change in the period leading up to January 2019,
when the adult was assessed as lacking capacity by her GP. She was a lot worse than she
had been. The adult had no recollection of where she lived: she would ask whose house she
was in and why she was staying there. During 2019 the adult spent a period in A hospital,
before being moved to B hospital in May and then eventually being placed in D care home
in July. Daniel's view was that the adult should have gone to a care home sooner. She was
an old lady with dementia in a big house. By the end she required 24-hour care.
Loan of £14,000 and withdrawal of £6,000
[36]
Daniel spoke to having discovered that £14,000 had been removed from the adult's
RBS account at the time of the transfer of the hotel shares. He also spoke to the withdrawal
of £6,000 from the account. He said that the applicant had been flabbergasted on learning of
these transactions. Daniel confirmed that the applicant had contacted the respondent to ask
about them, but he said that the dialogue was a dead end as communication between the
brothers was not good. There was animosity between them.
22
The adult's rental properties
[37]
Daniel confirmed that after his father's death it had been agreed that the rent for both
of the rental properties would be paid into the adult's account. In 2016 Michael had sent an
email in which he said that the rent for JG would initially be used to pay outstanding bills
relating to the property. In a further email in November 2016, he had said that the property
was being used by an employee of his and that he was deducting the rent from her salary.
Daniel said that rental payments had been paid into his mother's account for the period
June 2022 to January 2023, but that he didn't know what had happened prior to this period.
[38]
In cross examination Daniel confirmed that he had served an eviction notice on the
tenant, hand-delivering a letter in April 2022. Daniel had the applicant's authority to serve
the notice. The background was that he had previously explained to her that payments
should be made to the adult's account, as she owned the property. But the tenant had not
done this. It was put to Daniel that the respondent had not been receiving the rental
payments from the JG property. He replied that in May 2018 the respondent had sent an
email in which he referred to having received the payments.
Removal of funds from RBS ISA
[39]
Daniel confirmed that his father had had an ISA with about £113,000 in it. He had
discovered this when he was going through the estate. His understanding was that it was to
be transferred to the adult. He understood that the ISA had been transferred to RBS's
probate team before being paid to the respondent via the executry solicitors. This had
happened in June 2020, which was around a year and five months after the adult's GP had
assessed her as lacking capacity. He found the idea that the adult had agreed to this
unbelievable.
23
The respondent
[40]
The respondent was 61 years old. When asked about his occupation he described
himself as the owner of the business.
[41]
At the start of his evidence, I warned the respondent that he did not have to answer
any question if he might incriminate himself by doing so.
The POA
[42]
The respondent said that while he and the applicant were the adult's attorneys, he
had not been greatly involved with her finances, as they had run themselves.
[43]
The respondent had been in China from July or August 2016 to July or August 2018.
During this period he had come back a couple of times a year, for the Christmas and Easter
breaks. He said that he didn't have a great deal of involvement in the adult's care while he
was away. His wife would go and look after the adult. His son was also involved. And the
applicant and Daniel were there to help with the adult's care, though he said that he didn't
know how often they went to see her. The respondent said that he had been more involved
with providing care to the adult after his return from China.
The adult's health
[44]
The respondent's position was that during his time in China he was not receiving
updates regarding the adult's mental health. While his wife had provided care to the adult,
this entailed providing her with treatment (she was a physiotherapist), doing her nails and
providing her with food. The respondent's wife had not raised concerns about the adult's
mental health. But the respondent did describe an occasion when he had been Face-timing
24
his wife and the police had arrived at the property. They had found the adult, who had
been walking the dog around the town at 7am.
[45]
The respondent confirmed that he saw the adult regularly after returning from China
in July/ August 2018. He would take the adult food. The background to this was that before
going to China the respondent had arranged for the adult to receive meals on wheels, but
this had been cancelled by the applicant during his absence. The respondent said that he
was not aware that the stove within the property had been disconnected. The problem was
that there was no communication between the parties.
[46]
It was put to the respondent that in the period following his return from China the
adult's mental health was in serious decline. He rejected this characterisation, instead
suggesting that a lot of the time it was possible to have a good conversation with her. He
accepted that the adult could be forgetful, at times forgetting that she had appointments to
see the respondent's wife. She would sometimes repeat things that she had said. The
respondent said that the adult's memory was a lot worse by the time that she was admitted
to the care home.
[47]
The respondent said he had never been aware of the adult having hallucinations of
spiders on the wall. He said that he had was not aware of the GP's assessment that the adult
lacked capacity, on 16 January 2019.
Small cash transactions
[48]
The respondent confirmed that the adult had two bank accounts. He had control of
her RBS account.
[49]
The respondent was referred to a series of statements for the account for the months
January 2019 to March 2020 (pages 6 ­ 14 of the joint bundle). He was asked about the
25
statement for the period 10 January 2019 to 8 February 2019, which showed a pattern of
ATM £100 withdrawals. He said that these were for the adult's day to day living, including
purchases of newspapers, ready meals, snacks, bread, milk, juice, fruits and wine. He was
referred to page 39 of the joint bundle, which contained copies of a number of shopping
receipts. He said that payments had also been made for window cleaning services; and to a
dog walker, who charged £20 per day. He said that he would have receipts and diary
entries for the dog walker, though these had not been lodged. He said that he kept the
receipts in a box when he made purchases with the funds in the adult's account. The
respondent denied using the adult's account to make purchases for himself: the expenditure
was all made for the adult's benefit, and it was not excessive.
Rental properties
[50]
The respondent was asked about the adult's two rental properties. Initially, he said
that he had had no involvement with the JG property, whereas the applicant had taken more
of an interest in it. He accepted that there were bank statements before the court which
showed rental payments for the period January 2023 to August 2023, but that there was no
further evidence of rental payments having been received at any other time. The respondent
said that he did not know where the payments had gone, as Michael was the property's
landlord.
[51]
The respondent was referred to Michael's email of 6 November 2016. He said that he
did not know whether the property required to be repaired as Michael suggested: the
respondent didn't know what state the property was in as he hadn't been in it. He denied
having discussed the matter with Michael before the email was sent. His position was that
at the time of the email he had not known who the tenant was, what the monthly payments
26
were and to whom they were being paid. He had been in China at the time and the
applicant had been copied into the email.
[52]
The respondent was next referred to his own email of 31 May 2018. He accepted that
the terms of the email reflected a level of mistrust between him and the applicant. His
position was that what he had written about the rental payments being paid into a bank
account in his name and Michael's name was based on what Michael had told him. Michael
had claimed to have opened the account, but he had been misleading the respondent.
[53]
The respondent confirmed that he had been involved in the management of the DC
property. He described historical confusion over ownership of the property: prior to the
death of his father, the respondent had believed that he owned the property.
Notwithstanding this, his father had arranged for the rental payments to go to Daniel. But it
emerged that their father was then owner of the property after his death. As a result, Daniel
had stopped receiving rental payments ­ instead they had been paid into the adult's bank
account.
Loan of £14,000
[54]
The respondent's position was that the adult had given him and Michael a loan to
spend on the management of the business. The background was that after the brothers had
agreed on the sale of the company shares and consequential transfer there had been a
lengthy delay. When the respondent and Michael eventually took over the business they
found that the bank account was £45,000 overdrawn, bills hadn't been paid and a major
customer had moved. The respondent had been moaning to the adult about the state of the
business and she had agreed to make the loan. He suggested that she had done so because
previously she had wanted to run the business and had felt "chased out" of it.
27
[55]
The respondent was referred to the loan agreement, dated 28 September 2018
(page 37 of the joint bundle), which set out the term of the loan (it was to be repaid in full on
31 March 2019) and provided that there would be no interest. The respondent said that they
had used a template which they found in the hotel. He accepted that he had authorised the
transfer of funds, but he said that he had done so with the adult's blessing. The respondent
confirmed that the loan had not been repaid to date. This was due to ongoing financial
difficulties, precipitated by Covid, the Ukraine war and the present action.
[56]
The respondent accepted that at the time of granting the loan the adult was forgetful.
He said that this was why he had wanted a paper trail. This would mean that nobody could
say that the money had been taken without authority.
Withdrawal of £6,000
[57]
The respondent said that the payment of £6,000 from the adult's account represented
her share of a repair to the driveway. She was obliged to contribute to this in terms of the
deeds for the DC property. He was referred to the invoice, dated 24 February 2020, which
tallied with a bank payment for £6,000 made on 28 February 2020. Although the
transaction's description was "E, AWF Loan" the respondent maintained that it was, in fact,
a payment for the driveway rather than a loan.
[58]
In cross examination the respondent denied that the repair to the driveway had been
carried out primarily for the benefit of the business. He said that he thought he had spoken
to the adult about the payment to be made from her account before he made it.
28
Removal of funds from RBS ISA
[59]
The respondent was asked about the money that had been in his late father's ISA.
During this passage of the evidence I warned the respondent again that he was not obliged
to answer any question if he might incriminate himself by doing so, but he elected to answer
all of the questions that he was asked. He explained that the ISA had formed part of the
estate, although this had not been immediately apparent. The estate had been a mess, with
bits and pieces everywhere. He suspected that other assets might turn up at some stage.
[60]
The respondent was referred to the attendance note of the meeting with RB, solicitor.
He said that the meeting was to do with the ISA. He had been there at the start, but he had
left the adult with the solicitor as he didn't want to influence anything. The respondent's
position was that the adult had decided that the funds in the ISA should be divided between
the brothers, but that this should not happen immediately. Consistently with this, the
money was transferred into the respondent's account. The executory solicitors had required
the approval of Michael before transferring the funds to the respondent, as Michael and the
respondent were the executors to their father's estate.
[61]
After the ISA's balance had been transferred to the respondent, some of the money
had gone into the business, with the balance going to him personally. The applicant and
Daniel would get their share of the money at a later date, either when the hotel was sold or
at some other point.
[62]
During this passage of evidence I asked whether the documentation referred to in
the solicitor's note was going to be put before the court. The respondent's agent replied that
he had recently recovered the solicitor's file and that it did not appear to contain any signed
documentation relating to the transfer of the funds in the ISA. Both parties accepted that
this was the position and accordingly I have made a finding in fact to this effect, above.
29
Cross examination
[63]
In cross examination the respondent accepted that the balance of the ISA had been
paid out in around August 2019. He was asked about the adult's mental health at this stage
and at the time that the meeting with the solicitor had taken place. Again, he denied
knowing about the GP's assessment of 16 January 2019. But he did concede that he had been
"aware that she was failing." He knew that the adult was more forgetful. When it was put
to the respondent that the adult had been in no position to make a decision about the funds
in the ISA he replied that this might be correct, but that the adult was a very independent
woman and had her own views about things.
[64]
The respondent was asked if he had known that the adult had Alzheimer's at the
time of the meeting with the solicitor. He replied that he had not been aware of this. As he
had said that the adult was "failing" and increasingly at this stage, he was asked if he had
made the solicitor aware of this prior to the meeting. The respondent said that he thought
that he had done so, and that it was for this reason that the solicitor had been asked to come
and see the adult. But seemingly in contradiction with this, he went on to say that he could
not be 100% sure of the conversations that he had had with the solicitor. In re-examination
the respondent was asked when he had first become aware of the adult's Alzheimer's
diagnosis. He replied "I think it was when this case first came up. It arose then I think."
Michael
[65]
Michael was 58 years old. He was employed by Amazon as a warehouse manager.
As I had done with the respondent, at the outset I warned Michael that he did not have to
answer any question if he might incriminate himself by doing so. When Michael was being
30
asked about the JG rental property, I repeated this warning on several occasions, but he
chose to answer all questions.
The JG rental property
[66]
Michael was asked about the history of the JG property. He explained that in the
early 1990s, his then girlfriend had owned it. They had subsequently bought a house in
Alloa, and the JG property had been rented out. Subsequently the JG property had been
sold to his father, when his girlfriend had moved to Kent to take up employment there. He
had paid a deposit and his father had paid off the mortgage. He accepted in cross
examination that the sale happened in 2005, as confirmed by the titles, though he had
thought that it had been earlier than this. He also accepted that the JG property had become
the adult's after the death of his father. He said that he had thought that the property was
going to be put into his name for tax planning purposes; and that he had been surprised to
learn that this had not been done.
[67]
Michael said that the property had been rented out for many years, though there had
been periods when it was vacant. He had arranged insurance for the property and
instructed repairs and maintenance. He had received the rental income for the property for
many years. This had been his father's intention.
[68]
Michael confirmed that from the period June 2022 to January 2023 monthly rental
payments of £435 had been made into the adult's RBS bank account. The tenant had been an
employee of his. He said that he had received the rental payments prior to June 2022. He
was asked why payments had started to be made into the adult's account, instead of to him.
He explained that the applicant had repeatedly appeared at the property. He had decided to
walk away from the situation to ensure that the tenant was no longer being threatened with
31
eviction, and to avoid the applicant coming before court for harassing the tenant. He had
advised the tenant to start making payments to the adult's account. The tenant had done so,
but eventually she left the property anyway. Michael did not know whether the property
had been occupied since; and, if so, to whom the rent had been paid.
[69]
Michael was referred to the respondent's email of 31 May 2018 (described above) and
asked whether a joint account in his name and that of the respondent had been set up for
rental payments to be made into. He said that this had been discussed but it had never
happened. When it was put to Michael that the respondent had taken it on trust that he had
taken these steps, Michael rejected this. He said that the rent had continued to be paid to
him, as it had been for the previous thirty years.
Loan of £14,000
[70]
Michael was referred to the loan agreement. He accepted that although he was
recorded as being a party to the agreement, he did not appear to have signed it. He thought
that there must have been some discussion about the possibility of the adult loaning the
money to the brothers, otherwise the respondent would not have drawn up an agreement in
these terms. But he said he could not remember the loan, its purpose, whether the money
had actually been paid, or whether it had been repaid.
Driveway repair/ withdrawal of £6,000
[71]
Michael was asked about the repair to the driveway for the DC property and the
family business. He said that he had obtained quotations for this, but that he had not
instructed the work. When he was referred to the HB Roadways quotation (joint bundle,
page 36), he answered that he had not obtained this: he was no longer involved in the day-
32
to-day running of the business by the time it was obtained in August 2019. In cross
examination he confirmed that the quotations that he had obtained had been in the region of
£20,000 to £30,000. Michael said that he was unaware of the payment of £6,000 made on
28 February 2020. He said that he did not have access to the adult's accounts. He did not
know whether the payment was the adult's share of the driveway repair and, if so, why it
was listed as being a loan.
[72]
Michael confirmed that he had heard that the driveway was now in better condition,
though he had not visited it.
Removal of funds from RBS ISA
[73]
Michael said that he had not been involved in the adult's finances. He could not
recall having conversations with her or with the respondent about cashing the ISA. He was
asked if he recalled that funds had gone to the family business when the ISA was cashed in
August 2019. Michael said that he had not been involved in the business at this stage. He
confirmed that he had not received a payment at around this time.
The adult's health
[74]
Michael initially said that he thought the adult had been diagnosed with Alzheimer's
in around 2020, but from as early as 2015 she had been experienced symptoms. He gave the
example of the adult forgetting whether or not she had walked the dog. Her health had
gradually declined, although she could have good days and bad days. All of the brothers
had been involved in taking the adult meals. Michael said that he could not remember her
gas cooker being disconnected. He could not recall when she had stopped doing her own
shopping. Michael confirmed that he recalled an occasion when the police had found the
33
adult with her dog and had taken her to the respondent's house. He had been made aware
of this but he had not been directly involved as he was in Cambridge at the time.
[75]
Michael accepted that it was reported in a letter from NHS Forth Valley's psychiatry
department to the adult's GP, dated 8 December 2015, that the adult's family had reported a
cognitive decline for the last two years, although he said that he had had no involvement
with healthcare professionals regarding his mother. But he subsequently accepted that he
might have spoken to the adult's GP when he was asked about an entry in the records dated
16 January 2018, which read: "son came in ­ mother cognitive function deteriorating-
wandering/ he will try and get permission for home visit." Michael said that at this time his
mother was her usual self - it was possible to have a conversation with her and she would
play sudoku and read the paper. Sometimes she was sharp as a tack but at other times she
was a little bit forgetful.
[76]
Michael was asked about another entry in the GP records, dated 16 January 2019,
which noted the adult's presentation at a home visit in the following terms:
"assessed today at home ­ memory poor ­ confused about who was ­ not orientated
in time poor memory ­ no recall of address ­ did manage her date of birth and
counting backwards but not her age = did not seem to recognise her own dog"
Michael said that the GP who had made this assessment was not the adult's usual doctor.
When he was asked what difference this would have made he said that he didn't know
whether or not it would make a difference.
[77]
Michael thought that the adult's POA had been put in place in around 2015. He was
referred to his email to the brothers, dated 23 December 2015. He agreed that in the email he
proposed a meeting to deal with the adult's finances and for tax planning purposes. The
POA enabled the brothers to do this. He couldn't recall whether the meeting had taken
place, though the brothers had met on a number of occasions. In the email, Michael wrote:
34
"Mum has been diagnosed with a terminal condition Alzheimer's disease, she will at some
point in the future need full time care or go into a nursing home the same as Gran did."
When he was asked about this, Michael seemed reluctant to accept that he had been
conveying that the adult had received a diagnosis of Alzheimer's disease. He said that he
couldn't remember whether she had been diagnosed at this stage; and that he was making
the assumption that the adult might go the same way that her mother had done. He was
referred to a GP new patient summary, dated 27 November 2015 (joint bundle, page 17),
which recorded the diagnosis; and it was put to him that the adult had received her
diagnosis prior to his email. He responded that if he had known about it then the rest of his
family must have done as well.
[78]
Michael was asked why the adult could not have done her own financial planning.
He responded that she could have done. He was asked if she was to be involved in the
proposed meeting. He said the idea was that the brothers would make a plan and then
discuss the outcome with her. It was put to him that she could not have been involved in
the discussion as she wouldn't have been able to follow what was happening. Michael
rejected this. He said that she had good days and bad days, but that she was still very sharp.
Analysis and Decision
The Applicable Law
Section 20 of the 2000 Act
[79]
The powers of the sheriff regarding continuing and welfare powers of attorney are
set out in section 20 of the 2000 Act. Insofar as relevant for present purposes, section 20
provides as follows:
35
"20 Powers of sheriff
(1) An application for an order under subsection (2) may be made to the sheriff by any
person claiming an interest in the property, financial affairs or personal welfare of the
granter of a continuing or welfare power of attorney.
(2) Where, on an application being made under subsection (1), the sheriff is satisfied
that the granter is incapable in relation to decisions about, or of acting to safeguard or
promote his interests in, his property, financial affairs or personal welfare insofar as
the power of attorney relates to them, and that it is necessary to safeguard or promote
these interests, he may make an order­
(a) ordaining that the continuing attorney shall be subject to the supervision
of the Public Guardian to such extent as may be specified in the order;
(b) ordaining the continuing attorney to submit accounts in respect of any
period specified in the order for audit to the Public Guardian;
(c) ordaining that the welfare attorney shall be subject to the supervision of the
local authority to such extent as may be specified in the order;
(d) ordaining the welfare attorney to give a report to him as to the manner in
which the welfare attorney has exercised his powers during any period
specified in the order;
(e) revoking­
(i) any of the powers granted by the continuing or welfare power of attorney;
or
(ii) the appointment of an attorney.
. . .
(4) A decision of the sheriff under subsection (2)(a) to (d) shall be final.
Section 20(2) empowers the court to make several possible orders for the purpose of
safeguarding or promoting an adult's interests in his or her property, financial affairs or
personal welfare, subject to two requirements being satisfied. First, the adult must be
incapable in relation to decisions about, or of acting to safeguard or promote these interests.
36
Second, the order must be necessary to safeguard or promote them. These requirements are
considered in turn, below.
Incapacity
[80]
Section 1(6) of the 2000 Act defines incapacity as meaning, by reason of mental
disorder or of inability to communicate because of physical disability, being incapable of:
"(a) acting; or
(b) making decisions; or
(c) communicating decisions; or
(d) understanding decisions; or
(e) retaining the memory of decisions,
as mentioned in any provision of this Act, by reason of mental disorder or of inability
to communicate because of physical disability; but a person shall not fall within this
definition by reason only of a lack or deficiency in a faculty of communication if that
lack or deficiency can be made good by human or mechanical aid (whether of an
interpretative nature or otherwise)"
Under the scheme of the Act, persons are not to be classed as incapable in a general sense:
the assessment of capacity falls to be made for specific purposes: Adults with Incapacity
Legislation, Adrian Ward, p17. Hence, when a person's capacity is being assessed for the
purposes of section 20, the material question is whether he or she is incapable in relation to
decisions about, or of acting to safeguard or promote his interests in, his property, financial
affairs or personal welfare insofar as the power of attorney relates to them. The manner in
which I have approached this test in this case is discussed in more detail below, as is the
distinct question of whether the adult had capacity at the time that certain transactions were
made.
37
Necessity
[81]
The onerous requirement that orders made under section 20(2) should be necessary
to safeguard or promote the adult's interests reflects the fact that the imposition of such an
order will mean modifying or overriding the adult's express directions. The concept of
necessity might be thought to imply that any possible alternative measures should be
identified and ruled out before an order may be imposed.
[82]
While the test of necessity applies to all section 20(2) orders, the most drastic orders
that may be made under the provision are the revocation of the attorney's appointment or of
any of his or her powers, in terms of section 20(2)(e). This is acknowledged in the Act, as
decisions made under sections 20(2)(a) to (d) are final, whereas an order made in terms of
subsection 2(e) may be appealed. It follows that section 20(2)(e) orders must be viewed as
falling into a category of their own; and that when such a disposal is in contemplation, the
court should consider whether an order under section 20(2)(a), (b), (c) or (d) would suffice as
an alternative. This approach also accords with the minimum intervention principle
(discussed below).
General Principles under the 2000 Act
[83]
Under section 20 the court also must apply the principles set out in section 1(2) to
1(4) of the 2000 Act, as per section 1(1) ("the general principles"): Adult Incapacity,
Adrian Ward, W. Green & Son Ltd (2003), paragraph 6-39. These are as follows:
"(2) There shall be no intervention in the affairs of an adult unless the person
responsible for authorising or effecting the intervention is satisfied that the
intervention will benefit the adult and that such benefit cannot reasonably be
achieved without the intervention.
38
(3) Where it is determined that an intervention as mentioned in subsection (1) is to be
made, such intervention shall be the least restrictive option in relation to the freedom
of the adult, consistent with the purpose of the intervention.
(4) In determining if an intervention is to be made and, if so, what intervention is to
be made, account shall be taken of--
(a) the present and past wishes and feelings of the adult so far as they can be
ascertained by any means of communication, whether human or by
mechanical aid (whether of an interpretative nature or otherwise) appropriate
to the adult;
(b) the views of the nearest relative and the primary carer of the adult, in so
far as it is reasonable and practicable to do so;
(c) the views of--
(i) any guardian, continuing attorney or welfare attorney of the adult
who has powers relating to the proposed intervention; and
(ii) any person whom the sheriff has directed to be consulted,
in so far as it is reasonable and practicable to do so; and
(d) the views of any other person appearing to the person responsible for
authorising or effecting the intervention to have an interest in the welfare of
the adult or in the proposed intervention, where these views have been made
known to the person responsible, in so far as it is reasonable and practicable
to do so."
It is hard to envisage circumstances in which an order would be deemed necessary to
safeguard or promote an adult's interests in terms of section 20, if it did not both benefit the
adult in such a way as could not otherwise be achieved, and constitute the least restrictive
option available, in terms of sections 1(2) and (3), respectively. Nevertheless, the general
principles must be applied in their own right. Without diminishing their fundamental
importance to all interventions made under the 2000 Act, in this context they also serve as a
cross-check to the test of necessity for which section 20 provides.
39
Section 3 of the 2000 Act
[84]
Section 20 must also be read together with section 3 which confers powers upon the
sheriff in any application that is brought under the 2000 Act. Insofar as material, it is in the
following terms:
"3 Powers of sheriff
(1)
In an application or any other proceedings under this Act, the sheriff may
make such consequential or ancillary order, provision or direction as he considers
appropriate.
(2)
Without prejudice to the generality of subsection (1) or to any other powers
conferred by this Act, the sheriff may­
(a) make any order granted by him subject to such conditions and restrictions
as appear to him to be appropriate;
(b) order that any reports relating to the person who is the subject of the
application or proceedings be lodged with the court or that the person be
assessed or interviewed and that a report of such assessment or interview be
lodged;
(c) make such further inquiry or call for such further information as appears
to him to be appropriate;
(d) make such interim order as appears to him to be appropriate pending the
disposal of the application or proceedings."
The import of this is that when making an order the court is not confined to the terms of the
applicant's craves, but may make consequential or ancillary orders, provisions or directions
if it is appropriate to do so. Just as under section 20, when the court is contemplating making
an order in terms of section 3 it must apply the general principles.
Duties of attorneys
[85]
The Scottish Ministers have prepared a Code of Practice for Continuing and Welfare
Attorneys ("the Code"), pursuant to section 13 of the 2000 Act. Chapter 3 of the Code
imposes a number of duties on attorneys, which are relevant for present purposes.
40
[86]
First, attorneys must comply with the general principles of the 2000 Act.
[87]
Second, attorneys must act with reasonable skill and care when exercising their
powers.
[88]
Third, an attorney owes a fiduciary duty to the granter of the power of attorney.
This means that the attorney is in a position of trust and must act in the utmost good faith in
the performance of his or her duties. The Code specifies that in compliance with their
fiduciary duty, attorneys must (a) not take advantage of their position or put themselves in a
position where their personal interests conflict with their duties; (b) not allow other
influences to affect their actions as attorney; (c) not derive any benefit from their position,
apart from receiving gifts where the power of attorney allows it; and (d) ensure that
decisions taken under the power of attorney always benefit the adult. In essence, these
requirements replicate the duties that are owed by fiduciaries to their principals at common
law, as explained by Lord Pentland in McCormack v McKinnon [2023] CSOH 70 at
paragraphs [67] ­ [77].
[89]
Fourth, an attorney must keep records. The Code stipulates that this duty includes
requirements to keep accounts and to keep the adult's money separately from the attorney's
money. Attorneys are also under a statutory duty to keep records of the exercise of their
powers, in terms of section 21 of the 2000 Act.
[90]
Whether a breach of duty on the part of an attorney will justify the imposition of an
order under section 20 of the 2000 Act will depend on the circumstances of the case.
Assessment of the witnesses
[91]
Before addressing the requirements of section 20, which will involve considering the
evidence in some detail, I propose to summarise my overall assessment of the witnesses.
41
[92]
The four witnesses were brothers who were embroiled in a long running and
seemingly insoluble falling out, which was rooted in disagreements over money. This was
the context of the application rather than its focus, but the result was that none of the
brothers could be regarded as independent.
[93]
Having said that, the applicant presented as a credible and reliable witness on the
whole. He gave a clear and convincing account of the decline in the adult's health, of the
issue that had arisen regarding the JG rental property, and of his discovery of the loan
of £14,000, the withdrawal of £6,000, the small cash transactions made from the adult's
account and the removal of funds from the ISA.
[94]
At two points in his evidence the applicant appeared to be evasive. First, his account
of the circumstances in which the tenant vacated the JG rental property did not seem
entirely candid. In examination in chief he did not volunteer that he had been involved in
evicting the tenant; and this had to be drawn out of him in cross examination, as did the fact
that he did not know whether the property was currently being managed, or whether a valid
policy of insurance was in place. It seemed to me that the applicant was being coy as he was
aware that his conduct might not reflect well on him. Second, the applicant's evidence
regarding his communication with the respondent about the loan of £14,000 was
unsatisfactory. He said that he had probably messaged the respondent and that he could
not remember if he had received a reply. This evidence was strikingly vague. I suspect that
any communication between the brothers at that time was fraught, and that the applicant
may have been reluctant to give a full and frank account of his part in such exchanges. But
while there were difficulties with these elements of the applicant's account, for the most part
he gave evidence in a straightforward manner.
42
[95]
Daniel was the most impressive of the witnesses. His account of the decline in the
adult's health and, in particular, of the major change in her that occurred in the period
leading up to January 2019 struck me as being authentic. Similarly, he gave an account of
discovering the ISA and later finding out that the funds had been removed which was
detailed and persuasive. It has to be said that like the applicant, he was slow to
acknowledge his part in terminating the tenancy at the JG rental property: I did not
consider him to be entirely candid on this point. But in all other respects I found him to be a
credible and reliable witness.
[96]
By contrast, I did not find the respondent to be credible or reliable. Throughout his
evidence he seemed to be minimising the adult's symptoms and his knowledge of her
declining health. He suggested that he did not receive regular updates regarding her
condition while he was in China, but earlier he had said that his wife had regular contact
with her during this absence; and it seems inconceivable that he would not have been kept
abreast of the adult's worsening condition. His claim to have been unaware of her
Alzheimer's diagnosis prior to the raising of proceedings is astonishing, given that he was
one of her attorneys. By his own account the respondent was in regular contact with the
adult after his return from China in around August 2018 and, therefore, he ought to have
been aware of her worsening symptoms in the lead up to her hospital admission and
subsequent move to a care home. But in any case, he was one of the recipients of an email
from Michael, dated 23 December 2015, in which the diagnosis was referred to.
[97]
The respondent's evidence of having no knowledge of, or involvement in, the
management of the JG rental property was also troubling, as it was contradicted by the
terms of his email of his 31 May 2018, in which he advised of the arrangements for the
receipt and management of the rental income. Similarly, the respondent's evidence
43
regarding what was intended to happen to the funds held in the RBS ISA was unconvincing.
These points are discussed in more detail below.
[98]
I held similar concerns about Michael's evidence. His evidence regarding the adult's
symptoms was inherently unreliable and in conflict with extraneous sources of evidence.
He suggested that she had received her diagnosis in 2020, in contradiction with the contents
of his own email of 23 December 2015, in which he had reported the diagnosis some five
years earlier. When he was referred to the email, he suggested that he had been making an
assumption rather than confirming that the adult had actually been diagnosed with
Alzheimer's. But the terms of the email are clear. When Michael was asked about the GP
entry of 16 January 2018, he sought to paint the adult's condition in more positive terms
than the record suggested. And when the GP's assessment of the adult as lacking capacity
in January 2019 was put to Michael, he responded that this was not the adult's normal GP.
His evidence appeared contrived to minimise the extent of the adult's symptoms and the
speed of their progression.
[99]
As I have concluded that the applicant and Daniel were more impressive witnesses
than their brothers, I have generally preferred their accounts where there is conflicting
evidence.
Capacity
Introduction
[100]
It is necessary to start with the issue of the adult's capacity. It is important to
understand that two discrete questions arise.
[101]
The first question is whether the requirement of incapacity laid down by section 20
of the 2000 Act is satisfied ­ i.e. is the adult currently incapable of making decisions about,
44
or of acting to safeguard or promote her interests in her property, financial affairs or
personal welfare insofar as the POA relates to them?
[102]
The second question is whether it is possible to pinpoint the time at which the adult
became incapable and, if so, whether she has been continuously incapable since that date.
The relevance of this is that the respondent claims that the adult was capable of agreeing to -
and did agree to - the loan of £14,000 to the family business on 28 September 2018 and the
cashing and distribution of the funds held in the RBS ISA in August 2019.
Approach to capacity
[103]
I observed earlier that when incapacity as defined in section 1(6) of the 2000 Act is
being assessed, the question is not whether the adult lacks capacity in any general sense, but
whether he or she lacks the capacity to take specific decisions or actions at the time that they
require to be taken. The 2000 Act makes provision for incapacity to be assessed by different
means in different contexts. For example, where a determination of incapacity is being
made for the purposes of a guardianship application, the applicant must lodge reports by
two medical practitioners (one of whom must be a "relevant medical practitioner", as
defined in subsection (6B)) of an examination and assessment of the adult, carried out within
30 days of the lodging of the application: section 57(3). By contrast, sections 15(3)(ba)
and 16(3)(ba), which deal with continuing and welfare powers of attorney respectively,
afford the granter the opportunity of defining the means by which incapacity is to be
assessed (see B v H 2014 SC FORF 2014; Great Stuart Trustees Ltd v McDonald Public Guardian
[2014] CSIH 114).
[104]
But where, as in the present case, incapacity must be determined for the purposes of
section 20, the 2000 Act does not specify how that determination should be made. Similarly
45
(and unsurprisingly), as the function of the 2000 Act is to regulate the imposition of various
forms of intervention in the event of an adult's incapacity, it is not concerned with questions
such as arise in this case, regarding whether an adult had the capacity to consent to disputed
transactions that were made several years ago, nor does the legislation prescribe the means
by which capacity should be assessed in this context.
[105]
I did not receive detailed submissions regarding the manner in which the court
should assess capacity for the purposes of either of the questions identified above, but
counsel for the applicant and the agent for the respondent both relied on Sheila Ritchie
(Gallacher's Executors) v James Nelson [2016] CSOH 35 as authority for the proposition that an
objective assessment must be made, which takes account of the whole circumstances of the
case, per Lord Clark, para [74]. Sheila Ritchie was an action brought by an executrix-dative
for the reduction of a disposition granted by the deceased for the sale of heritable property.
[106]
This raises the vexed question of whether it is appropriate to have regard to
authorities on testamentary capacity in the present context. The terms of section 1(6) differ
from the common law test for testamentary capacity, as laid down in Sivewrights v
Sivewright's Trustees 1920 SC (HL) 63 (and derived from the English case of Banks v
Goodfellow (1870) L.R., 5 Q.B. 549) in terms of which the testator:
"shall understand the nature of the act and its effects; shall understand the extent of
the property of which he is disposing; shall be able to appreciate and comprehend
the claims to which he ought to give effect; and with a view to the latter object,
appreciates that no disorder of the mind ... that no insane delusion shall influence
his will in disposing of his property and bring about a disposal of it which, if the
mind had been sound would not have been made." (per Lord Atkinson, page 63)
It has been doubted that the two tests should be equiparated with each other given the
onerous nature of this latter test, which reflects a history of reluctance on the part of the
courts to make a finding of testamentary incapacity: Adults With Incapacity Legislation,
46
Adrian D. Ward, page 16. Consequently, I am not convinced that the authorities on
testamentary capacity can provide any guidance in relation to the first of the questions
identified above ­ i.e. the assessment of capacity for the purposes of section 20 of the
2000 Act.
[107]
But these authorities might assist the court in determining how the second question
should be approached ­ i.e. whether the adult was capable of consenting to past transactions
at the time that they were made - as there is a cautious analogy to be drawn between this
question and the exercise which the court undertakes when assessing whether a testator had
capacity when a contested testamentary writing was executed. If any guidance may
legitimately be drawn from the authorities on testamentary capacity and applied to the
present case, perhaps it is as follows: (i) the court will determine capacity in light of all of
the evidence, both medical and non-medical: Elizabeth Smyth v John Campbell Rafferty and
Others [2014] CSOH 150, paragraph 42; (ii) where capacity is disputed, the court will
invariably have the benefit of hearing medical evidence: Elizabeth Smith, supra; Sheila Ritchie
(Gallacher's Executors) v James Nelson [2016] CSOH 35; and (iii) as it is well-recognised that a
person may have periods of lucidity while at other times lacking capacity, the diagnosis of a
particular disease or condition is not sufficient in itself: the question is whether the person
was capable of comprehending nature and effect of the relevant act at the time that he or she
made it: Smyth supra, paragraphs 37 ­ 39 (see the authoritative exposition of the law of
testamentary capacity in Contentious Executries: Commissary and Executry Litigation in
Scotland, Second Edition by R.A.S. Macleod, paragraphs 3-027- 3-0230).
47
Capacity for the purposes of section 20
[108]
In this case there was a significant gap in the evidence: the adult's GP and treating
consultants were not called as witnesses. Similarly, no evidence was led from an
independent medical expert in relation to the adult's capacity. While the lay witnesses were
asked about various entries in the adult's medical records, those entries were not spoken to
by their authors or interpreted by a skilled witness with appropriate qualification.
[109]
It is unfortunate that evidence of this kind was not available, but I do not consider
that this precludes the court from determining that the adult lacks capacity for the purposes
of section 20 of the 2000 Act. This is because on 16 January 2019 the adult's GP assessed her
as lacking capacity to act and to make, understand and retain the memory of decisions
relating to medical treatment, her welfare and her financial affairs. The GP noted that the
adult had very poor memory and recall and that she was not orientated. On the same date
the GP issued a Certificate of Incapacity under section 47 of the Adults with Incapacity
Act 2000. The GP noted that the cause of the adult's incapacity was dementia and that she
was likely to be permanently incapable. While the GP did not give evidence, the
January 2019 assessment of incapacity is admitted by the applicant on record.
[110]
Only limited evidence was led about the purpose of the GP assessment. The
applicant said that he arranged for the adult to be assessed because he was concerned about
her declining health. He did not say what steps, if any, were in contemplation at the time of
the assessment, but he said that he took control of the adult's BOS account following the
assessment. This is despite the fact that the continuing powers of both attorneys were
already operative, having taken effect following the registration of the POA with the Public
Guardian. An assessment would have been required to cause the welfare powers to spring
into effect, but the respondent did not suggest that this was its purpose. Separately, the
48
issuing of the section 47 Certificate raises the possibility that the point of the assessment was
to allow the adult's attorneys to consent to medical treatment on her behalf, but once again,
the applicant did not suggest this.
[111]
Irrespective of what triggered the assessment at the time, for the purposes of this
application its relevance is that the GP assessed the adult as being permanently incapable of
acting and taking decisions to safeguard her financial affairs. Given that section 20 does not
prescribe the form which evidence relating to capacity must take, I consider that I am
entitled to rely on the GP's assessment and to find that the adult is incapable for the
purposes of the provision.
[112]
Having reached this conclusion on the basis of the GP's assessment, it may be
unnecessary to seek support for it in the non-medical evidence that is available. But for
completeness, it is worth noticing that the evidence of the applicant and of Daniel is
consistent with the conclusion that the adult has lacked capacity since at least January 2019.
As I have already explained, Daniel gave a convincing account of a marked worsening of the
adult's symptoms in the period running up to January 2019. I did not understand either his
evidence or that of the applicant to be that the adult's health improved at any later stage;
indeed, I took Daniel's evidence to be that the adult had taken a permanent turn for the
worse. For the reasons given above, to the extent that the respondent and Michael offered
alternative accounts of the adult's presentation after January 2019, I reject their evidence.
The adult went on to be admitted to hospital in around May 2019 and she was later placed
in a care home in August 2019.
[113]
Accordingly, I answer the first of the questions that I have identified in the
affirmative and find that the adult is currently incapable of making decisions about, or of
49
acting to safeguard or promote her interests in her property, financial affairs or personal
welfare insofar as the POA relates to them, for the purposes of section 20 of the 2000 Act.
Capacity at the time of past transactions
[114]
On the basis of the same evidence, I find that by at least January 2019 the adult was
permanently incapable of taking decisions in relation to her property and financial affairs,
meaning that she would not have had capacity to consent to specific financial arrangements
or transactions after this time. Consequently, she would not have been capable of agreeing
to the cashing and distribution of the funds held in the RBS ISA when this was done in
August 2019, at the time of her meeting with RB on 25 February 2019, or in the intervening
months.
[115]
Counsel for the applicant invites me to go further, finding that the adult has lacked
capacity since she was diagnosed with Alzheimer's disease on 7 November 2015, as her
symptoms must by then have been sufficiently developed to warrant a diagnosis. Counsel
also relies on a letter from NHS Forth Valley's psychiatry department to the adult's GP,
dated 25 April 2016, which indicates that at that stage the adult was losing her memory; for
example, being unable to recall what medication she had been prescribed. Finally, counsel
founds on the respondent's email of 28 July 2016, in which he writes "as you may be aware
she (the adult) has a diagnosis of dementia and may at another time offer a different
opinion" (though the respondent was not asked about this email in cross examination). She
submits that this statement may be taken as evidence that the adult lacked capacity at that
time and that the respondent was aware of this.
[116]
But I am not satisfied that I may properly find that the adult lacked capacity at any
specific point in time prior to January 2019 on the strength of this evidence. The adult's
50
diagnosis with Alzheimer's disease in 2015 is not sufficient in itself: as I have already
observed, it is clear from the authorities that the mere fact that a person has been diagnosed
with a particular condition is not enough to justify a determination that they are incapable
generally or in respect of particular matters, either permanently or at any given point in
time. As to the other excerpts from the medical records on which the applicant relies, I do
not think that I can properly infer from these that the adult was incapable in relation to any
matters, having heard evidence from neither the treating medical practitioners nor from a
suitably qualified skilled witness.
[117]
While counsel for the applicant did not found on this point, I am also conscious that I
heard accounts of the adult's presentation at different points from 2015 to 2019 from her four
sons. On the basis of this evidence I find that the adult's health declined over this period
(detailed findings in fact regarding her decline are set out at the start of this opinion), but I
cannot go so far as to determine that she was incapable with regard to any particular matters
at any stage before 2019.
[118]
It follows that it is not possible to find in fact that the adult was incapable of
consenting to the loan agreement which she signed on 28 September 2018.
[119]
Before leaving the issue of capacity, it is necessary to emphasise a point which
follows on from this. While I have been unable to find that the adult was incapable before
January 2019, I have already explained that the continuing powers which she granted were
not contingent on a determination of her incapacity being made; and my understanding of
the evidence is that prior to this date the applicant and the respondent were exercising their
continuing powers in their intromissions with the adult's property. When they were doing
so, they were required to comply with the duties which I have set out above, irrespective of
whether the adult had capacity at the time.
51
Necessity
[120]
The next issue for determination is whether it is necessary to make the orders craved
or some other order under section 20, for the purpose of safeguarding or promoting the
adult's interests in her property and her financial affairs. The fact that the parties do not
trust each other and are unable to communicate might be thought to necessitate an
intervention under section 20; but this is not the ground on which the application is
advanced. Instead, the applicant contends that the orders sought are necessary because the
respondent has breached his duties as attorney. The individual allegations of breach of duty
are addressed in turn, below.
Allegations of breach of duty
The loan of £14,000
[121]
I deal first with the question of whether the respondent can be said to have breached
his duties in respect of the purported loan of £14,000, signed on 28 September 2018, and its
surrounding circumstances.
[122]
Counsel for the applicant submitted that the purpose of the loan was purely to serve
the interests of the respondent. No interest was applied to the loan under the agreement,
meaning that the adult derived no benefit from it. It followed that the loan constituted a
breach of the duties that the respondent owed to the adult. While the respondent claimed
that this was a business loan which related to the purchase of the family business, the
agreement provided for the money to be loaned to the respondent and Michael personally.
But Michael had said that he did not recall the loan. Counsel highlighted that at the time of
52
the loan a family member and a social worker had raised concerns with the adult's GP, but a
Certificate of Incapacity had not been signed.
[123]
The agent for the respondent submitted that the purpose of the loan was to stabilise
the family business at a time when the adult was resigning her directorship while the
respondent and Michael were taking it over. The adult had sufficient capacity to consent to
the loan. As a result of cashflow issues and the impact of the COVID 19 pandemic the loan
had not been repaid on 31 March 2019, as provided for in the agreement. But the
respondent intended to repay the loan funds in full.
[124]
The applicant's position rests on the premise that the adult was incapable of
consenting to the agreement when it was signed on 28 September 2018. But for the reasons
given above, it is not possible to make a finding in fact to this effect. The only direct
evidence regarding the granting of the loan came from the respondent, who was a generally
unsatisfactory witness; but it is not in dispute that the agreement bears the adult's signature.
Accordingly, I am unable to find that the adult did not consent to the agreement.
[125]
As I have already explained, the parties were entitled to exercise their continuing
powers before the adult became incapable. But the applicant did not advance submissions
that were predicated on the adult having had capacity at the time of the agreement. It might
be thought that even in that event, the loan still depended on the respondent exercising his
powers as the adult's attorney, as it was those powers which gave him control of one of the
adult's bank accounts, and which enabled him to transfer the funds. But this point was not
explored in argument, nor was the question of what steps the respondent ought to have
taken in fulfilment of his duties in the circumstances. Accordingly, I do not consider that I
may properly reach conclusions in relation to these issues; and it is not possible to determine
53
that the respondent breached any of the duties that were incumbent upon him at the time of
the granting of the loan.
[126]
While that is sufficient to dispose of the issue, I have various observations to make
before moving on. First, while the gravamen of the applicant's submission was that the loan
constituted a breach of duty because it benefitted the applicant rather than the adult, the
latter does not necessarily follow from the former. The POA includes a power to gift or
otherwise dispose of her property, even if this results in a benefit to the adult's attorneys,
albeit the provision stipulates that appropriate advice must be taken (continuing power 18).
[127]
Second, I accept the evidence of the applicant and of Daniel that they were not told of
the loan at the time. If the respondent had been exercising his powers under the POA to
enter into the agreement on the adult's behalf, then he would have been under a duty to
obtain the applicant's views before doing so, in terms of section 1(4)(c)(i) of the 2000 Act. In
addition, the POA made express provision that if either of the attorneys acted independently
under the POA, he should inform the other attorney as soon as practicable. These
requirements apply to any exercise of the continuing powers, but compliance with them is
all the more important when the proposed action involves conferring a benefit on the
attorney who proposes to take it, as is the case if a gift or a loan is proposed. For the reasons
given above, I have not been able to find that the adult lacked capacity at the time of the
loan, or to reach a view as to whether the respondent was acting as attorney at the material
time. It follows that it is not possible to conclude that he contravened section 1(4)(c)(i) or
that he failed to comply with the terms of the POA. But it remains troubling that the
applicant was not informed of the loan.
[128]
Third, I do not draw adverse conclusions from the facts that the respondent rather
than E Limited was a party to the loan agreement, and that the agreement does not bear
54
Michael's signature, who claimed not to remember the loan. While counsel did not make
this explicit, the implication of her submission seemed to be that the transfer was not made
as a loan at all. Notwithstanding my broad assessment of the respondent's evidence as
lacking in credibility, he gave a reasonably convincing account of the state of the family
business's finances at the time that he and Michael took it over. I accept that this was the
impetus for the transfer of funds, even though the company was not itself a party to the
agreement. Michael's evidence on this issue was vague and I prefer that of the respondent.
[129]
Finally, for completeness I note that while the applicant gave evidence that the bank
transfer left the account overdrawn, with the result that the adult incurred interest and
penalty charges, I was not referred to bank statements which vouched this, the allegation
was not put to the respondent, and it did not ultimately feature in the applicant's
submissions. Accordingly, I make no finding in fact to this effect. For the same reason, I
make no finding as to whether the transfer was made to E Limited, as the applicant
suggested, or to an account held by the respondent. On either scenario, I accept that the
payment related to the business, for the reasons given above.
Withdrawal of £6,000
[130]
I turn next to the withdrawal of £6,000 that was made from the RBS account on
26 February 2020.
[131]
Counsel for the applicant submitted that at the time of this transaction the adult did
not have capacity. While the respondent's position was that the funds had been used to pay
for the adult's share of a common repair, the relevant bank statement recorded the
transaction as "AWF loan". In any case, the common repair related to a driveway shared by
one of the adult's rental properties and the premises of the family business. The family
55
business had a large carpark and made heavy use of the driveway, meaning that it required
to keep it in good condition to avoid losing business. It was also unclear how it was
determined that the adult's share should be £6,000 given that the total invoice was £19,200.
The purpose of the repair was solely to serve the financial interests of the respondent and
did not benefit the adult. Accordingly, the respondent had breached his duties by making
the payment.
[132]
The agent for the respondent submitted that in terms of Burden Three, Clause Four
of the Title Deeds, the Adult was obliged to meet a one-third share of the driveway repair.
In addition, the attorneys were charged with the responsibility of taking decisions in the
adult's best interests and with safeguarding her property. The proper maintenance of the
driveway conferred a benefit to the adult's estate as it ensured compliance with her legal
obligations and resulted in a material improvement to the property. The reference to the
payment in the bank statement as "AWF Loan" was an error, carried over from the online
banking following the last payment instruction relating to the loan of £14,000 on 3 October
2018.
[133]
The parties' submissions both proceed on the basis that the adult did not have
capacity at the time of the transfer (which corresponds with my findings on this issue) and it
does not seem to be disputed that the respondent was exercising his powers under the POA
when he made the payment. In her submission counsel for the applicant seemed to question
whether the transfer was actually made as a contribution to the driveway repair. If that
matter is in dispute, I have no difficulty in accepting that this was the purpose of the
transfer, as an invoice for the repair was before the court. Insofar as the description of the
transfer in the bank statement as "AWF loan" is concerned, I accept the explanation that this
was an error. The payment of £6,000 represents slightly under a third of the bill of £19,200,
56
but I do not take anything from that anomaly other than noticing that it leaves the adult
slightly better off than she would otherwise have been.
[134]
Against that background, can it be said that the adult did not obtain a benefit from
the repair? For the reasons given by the agent for the respondent, I would answer that
question in the negative. The adult was obliged to contribute to the maintenance of the
driveway, in terms of the Title Deeds. As the adult is one of the proprietors of the driveway,
she derived a benefit from its repair. I accept the evidence of the respondent that the repair
was necessary and that several quotations were obtained before the repair was instructed.
[135]
Having said that I consider that the respondent failed to comply with his duty to
obtain the views of the applicant before proceeding with the repair, in terms of
section 1(4)(c) of the 2000 Act. In addition, he subsequently breached the requirement to
advise the applicant that he had made the transfer of funds for this purpose, in the terms of
the POA. While the work may have been required, the context was that the applicant's
business was one of the other owners of the driveway and stood to benefit from the repair.
Accordingly, on any view the respondent should not have proceeded without first involving
the applicant. The respondent's failure to inform the applicant and to seek his agreement to
the proposed expenditure constituted a breach of the fiduciary duty that he owed to the
adult. I recognise that this conclusion is a variation on the submission that was advanced by
the applicant, but I do not consider that the court is strictly confined to the arguments as
they were presented, given that this application is concerned with the protection of the
interests an adult who lacks capacity and is, therefore, in a position of vulnerability.
57
The rental payments
[136]
Turning to the rental payments for the JG property, it was submitted for the
applicant that the circumstances were indicative of gross mismanagement on the part of the
respondent. The applicant had been chasing the respondent and Michael for the rental
payments since 2016. While the respondent had written that the rental income was being
paid into a BOS account in an email, dated 31 May 2018, he had said in cross examination
that he had been told this by Michael. Meanwhile, Michael said that this "must be a typing
error" and that a bank account had never been opened. It remained unclear where the
payments had gone.
[137]
Conversely, it was submitted on the respondent's behalf that he had never acted or
held himself out as the landlord of the property. Michael had performed this role and had
regarded the rental payments as his personal income. Michael had given evidence that the
property had been all but gifted to him by his late father; and that for the thirty-year period
leading up to June 2022 he had regarded the income as his own. The agent for the
respondent acknowledged that the property had been mismanaged, but he submitted that
the applicant was in no better position than the respondent. The applicant had been
instrumental in the eviction of the last tenant in early 2023.
[138]
Much of the factual background to this issue is uncontroversial. There is no dispute
that the adult is the owner of the JG property, or that she has received no rental payments,
apart from during the period 29 December 2022 to 28 June 2023. Similarly, it appears to be
accepted that prior to this period Michael received the rental payments. It is also clear from
the evidence that the rental income was a matter of discussion between the parties and their
two other brothers after the death of their father.
58
[139]
The question that arises is whether the respondent breached the duties that he owed
to the adult in relation to the JG property. That question must be answered in the positive.
In his evidence, the respondent adopted the stance that he had little involvement with the
property, partly because he was working in China for a period. But his position was
fundamentally undermined by the terms of his email of 31 May 2018, in which he wrote that
the payments were going into a bank account which was held in his name and that of
Michael. He said that the purpose of the account was to ensure that funds were available to
pay for repairs, insurance and inspections. While the respondent claimed in cross
examination that he was relying on Michael, who had told him that the account had been
opened, this is irreconcilable with the terms of the email. The respondent writes, "I oversee
this account to ensure that it is operated correctly." It is clear from the evidence that this
was untrue: the bank account to which the respondent referred did not exist. The rental
payments were still going to Michael at the time. The respondent must have known this,
and it follows that in his email he intentionally misled the applicant. His purpose in so
doing must have been to frustrate the applicant's efforts to ensure that the rental income was
being paid to the adult.
[140]
It is not clear how much difference this made in practice. The applicant seems not to
have been deterred by the respondent's email, as on his account he continued to pursue the
matter. I am also prepared to accept that the respondent derived no personal benefit from
his actions, as the rental income continued to go to Michael. But by giving his co-attorney
the false and misleading impression that he was overseeing an account into which the rental
income was being deposited, the respondent abused the position of trust that he held and
failed to act in the utmost good faith. Accordingly, he breached the fiduciary duty that he
owed to the adult.
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[141]
Neither is the applicant immune from criticism. He and Daniel were responsible for
removing the last tenant from the property, despite the fact that latterly rental payments
were being paid into the adult's BOS account. The applicant's motivation for having taken
this step in unclear, but the result is that the adult has received no rental income since
June 2023. The applicant accepted that subsequently he had made no effort to maintain the
property and he was unable to say whether a valid policy of home insurance was in place.
When he was asked why he was not managing the property, he replied that he had raised
the present proceedings, but in my view that is the not an adequate explanation. Both
parties are responsible for the management of the JG rental property in their capacity as
attorneys. Given that the applicant intervened to remove the tenant, it was incumbent upon
him to ensure that the property was properly managed and maintained from that point
onwards. I would characterise the applicant's failure to do so as a breach of his duty to act
with reasonable skill and care in the exercise of his powers under the POA. Similarly, as the
respondent made no effort to manage the property following the eviction of the tenant, he
failed to fulfil the same duty to act with reasonable skill and care.
Withdrawal of funds from BOS ISA
[142]
I turn next to the withdrawal of funds held in the BOS ISA in August 2019.
[143]
Counsel submitted that it was admitted on record that the balance of the ISA
was £113,897 when the funds were removed. What had happened to the money was
unclear. While the respondent had given evidence that the funds had been divided between
the family business, Michael and the respondent, Michael's evidence was that he did not
recall receiving such a payment. Counsel for the applicant submitted that the circumstances
surrounding the decision-making process and the manner in which the funds had been
60
cashed were deeply concerning. The removal of the funds had not benefitted the adult and
had served the financial interests of the respondent. The respondent had not consulted the
applicant before cashing the ISA. In these circumstances, the respondent had breached the
duties that he owed to the adult.
[144]
The agent for the respondent submitted that the ISA contained £110,912.37 when it
was cashed in August 2019. The respondent and Michael each received a quarter-share,
while a half-share was transferred to the family business. The other family members were
aware of the arrangement at the time. The respondent was not privy to the adult's medical
records and he did not know that any formal declaration of incapacity had been made. It
was the respondent's evidence that the adult "sometimes had good days and sometimes had
bad days". Similarly, Michael's evidence was that the adult "had good days and bad days
but was still very sharp". There was nothing to suggest to him that the adult lacked the
capacity to make such a decision. The respondent also denied obstructing efforts to
investigate the circumstances behind the distribution of the proceeds of an ISA. In his
capacity as co-executor in his late father's Estate, the respondent had instructed the solicitors
who were dealing with the executry to release the requested information.
[145]
I found the respondent's evidence regarding the cashing of the ISA in August 2019 to
be wholly incredible and unreliable. I have already found that the adult was permanently
incapable by at least January 2019. In doing so, I accepted the description of the adult's
presentation given by the applicant and Daniel, while rejecting the evidence of the
respondent and Michael, who did not give candid accounts of her worsening health
from 2015 onwards, or of their knowledge of this. Similarly, I now reject the respondent's
evidence that he was unaware of the distinct and permanent decline in the adult's health
which occurred in late 2018/ early 2019. On the respondent's account he had regular contact
61
with the adult during this time. Even if he did not know of the GP's assessment of the
adult's capacity, it is inconceivable that he would not have witnessed the change. He would
also have been aware that during 2019 she stopped living in her home, spending spells in
two hospitals and eventually moving to live in a care home in the summer, where she
resided at the time that the transfer was made. In any event, the respondent claimed that
the brothers were all made aware of what was to be done with the ISA funds. I reject his
evidence on this point, as the applicant and Daniel gave convincing evidence of discovering
the ISA's existence independently, and of later finding out that the funds had been removed.
But if the respondent really had informed the applicant of this, as he was obliged to do, the
applicant would almost certainly have told him of the January 2019 capacity assessment.
Accordingly, prior to August 2019 the respondent either knew, or should have made himself
aware, that the adult was incapable of making decisions about her property and financial
affairs.
[146]
In any case, I do not believe that the respondent sought the adult's consent to the
proposed removal and distribution of the ISA funds. The respondent's evidence was not
identical to the position that has been presented on his behalf in submissions: he said that
the adult had decided that the funds should be divided between the four brothers, but not
immediately. The money had been transferred to him in the first instance, with some of it
going to the family business, while he retained some of it personally. The applicant and
Daniel would receive their share at some point in the future, perhaps when the hotel was
sold. This account was convoluted and implausible. The respondent did not explain why
the adult had decided to defer the portions of two of the brothers for an undefined period,
and this seems inherently unlikely. I do not accept that this was the adult's wish. I think the
62
real explanation is that the respondent was proffering a contrived and artificial rationale for
the fact that the funds in their entirety were transferred to him.
[147]
While I heard evidence about a meeting between the adult and the solicitor who was
responsible for husband's executry, RB, held on 25 February 2019, this cast no light on the
circumstances of the transfer, which was made some six months later. The only direct
evidence of the meeting came from the respondent, who said that he was there at the start
but left the meeting to avoid influencing the adult. RB was not called to give evidence. In
her note of the meeting, she recorded telling the adult that there was an item of her late
husband's estate pending and that paperwork was required "to get the funds out."
Assuming that the funds in question were those held in the ISA, the note contains no
reference to any discussion of what was to happen to them following their removal. And
while the solicitor recorded that she would provide the adult with papers to sign, according
to the respondent's agent, the file contains no signed papers. Accordingly, other than the
respondent's word, there is no evidence that at the meeting the adult was asked to consider
authorising the distribution of the funds in the shares that the respondent alleges, or that she
subsequently agreed to this.
[148]
The precise mechanics of the transfer remain opaque. The ISA originally formed part
of the estate of the adult's late husband, of which the respondent and Michael were
executors. RB appears to have been instructed to deal with the executry, hence the meeting
with the adult. It is not clear how the funds came to be released from the deceased's estate
and whether Michael had to consent to this in his capacity as executor, as the respondent
suggested. But the respondent accepted that (i) the adult was to inherit the funds held in the
ISA, and (ii) ultimately, he transferred the funds to himself. And I have rejected the
respondent's evidence that the adult consented to the transfer. It follows that the
63
respondent must have authorised this. This would have involved the respondent
intromitting with the adult's property in his capacity as her attorney.
[149]
I make no finding as to whether any of the money was subsequently transferred to
Michael and the family business, or whether the respondent retained the full sum; but as the
full funds went to the respondent initially, and given that he admits having kept a portion of
them, it is unarguable that he derived a benefit from the transaction. Correspondingly, the
transfer was made to the detriment of the adult's financial interests.
[150]
This constituted a breach of the fiduciary duty which the respondent owed to the
adult, as it involved a failure on his part to act in the utmost good faith. Although it is
permissible for an attorney to receive a gift (or other benefit) in certain circumstances, the
transfer of the ISA funds could not be said to fall into this category as it was done without
the knowledge and agreement of the applicant, who was the respondent's co-attorney.
Instead, the respondent took advantage of his position, obtaining a financial benefit for
himself in a stark breach of his duty as the adult's fiduciary.
Small cash withdrawals from the adult's RBS account
[151]
The final allegation of breach of duty concerns a series of small cash withdrawals
which the respondent made from the adult's RBS account, between January and
November 2019. The respondent gave evidence that these were transactions relating to
purchases on behalf of the adult such as newspapers, food, alcohol, and payments to dog
walkers and window cleaners.
[152]
Counsel for the applicant submitted that while these explanations were prima facie
reasonable, not all of this expenditure was necessary. The adult's stove had been
disconnected and she had received meals from her sons who ran the local hotel. There was
64
no need to purchase food that required to be cooked. She had stopped reading newspapers.
The adult had also stopped driving. There was no need to pay for new wiper blades for a
Range Rover on 19 April 2021 given that she had lived in Parklands Care Home since
12 August 2019. Counsel submitted that the reasonable inference to be drawn from these
transactions was that they were not all made for the adult's benefit.
[153]
Conversely, the respondent's agent submitted that the withdrawals had been made
for the benefit of the adult. Copies of the receipts and a breakdown of the expenditure had
been produced. The applicant was seeking to place a particular interpretation on the content
of the bank statements because of his poor relationship with the respondent. The outlay for
the windscreen wipers related to a vehicle owned by the adult, which had been unused and
off the road for some time. The explanation for the purchases of groceries shown on the
statements was that the respondent took the adult shopping. The respondent's agent
acknowledged that this included purchasing meals, subject to the explanation that the
respondent had not been aware of the adult's stove being disconnected.
[154]
I am not satisfied that I may properly make a finding, on the balance of probabilities,
that the various withdrawals on which the applicant founds were not made for the benefit of
the adult. I am unable to infer that the purchases of food were not made for the adult
because it is not clear from the evidence when her stove was disconnected, or during which
periods she received meals on wheels and food from the premises of the family business.
Similarly, it was not clear exactly when she stopped reading newspapers. I am reluctant to
draw any conclusions from the purchase of the windscreen wipers, as I have no note of this
having been raised with any of the witnesses at proof. More broadly, this was not a
situation in which the bank statements disclosed a pattern of expenditure that was obviously
made for some other purpose than to benefit the adult. It follows that I must reject the
65
suggestion that the various withdrawals under review are evidence of a breach of duty on
the part of the respondent.
Application of the necessity test
[155]
In light of the findings of breach of duty set out above, the court must decide
whether it is necessary to make orders in terms of section 20(2) of the 2000 Act in order to
safeguard or promote the adult's interests in her property and financial affairs; and, if so,
which of the various possible orders should be made.
[156]
The applicant craves the revocation of the respondent's continuing powers and of his
appointment as continuing attorney, as well as an order for the respondent to submit
accounts from the period 13 May 2015 until the date of citation, relating to his intromissions
qua continuing attorney. Counsel for the applicant submitted that the removal of the
respondent from his position was necessary for the protection of the adult's finances, as the
respondent had used these to further his own interests. The orders that had been sought
were proportionate to avoid the adult being exposed to any further risk to her finances. The
removal of the respondent would not prevent the continued operation of the POA, as the
applicant would continue to act as attorney.
[157]
The agent for the respondent submitted that the terms of section 20 and section 3
afforded the court a wide discretion. While there had been deficiencies in the way that both
parties had discharged their duties, it was the adult's wish that they should act as her
attorneys. The court was required to have regard to her past wishes when disposing of the
application. In addition, the removal of the respondent was not the least restrictive option
available. It would be proportionate in the circumstances for both attorneys to remain in
position, and for the court to make one of the other orders for which the legislation
66
provided. The respondent's agent further submitted that there was no need to require the
respondent to lodge accounts, as in the present application he had already lodged evidence
of his intromissions with the adult's financial affairs.
[158]
In my view the respondent's breaches of duty are so serious that it is necessary to
make orders under section 20(2) for the purpose of safeguarding the adult's property and
her financial affairs. I can identify no feasible alternative to such an intervention, and none
was canvassed by either party in submissions. I am also satisfied that it is necessary to grant
the specific orders which the applicant craves, revoking the respondent's appointment as
continuing attorney, and ordaining him to submit accounts for audit to the Public Guardian
from 15 June 2015, when the POA was registered with the Public Guardian, to date. I shall
refuse the applicant's crave for revocation of the respondent's continuing powers in terms of
section 20(e)(i), as strictly speaking I do not think that it is possible to revoke the powers of
one attorney, while leaving them in place for the other (see Adrian Ward, supra:
paragraph 6-38). But this is an academic point given that I am revoking the respondent's
appointment.
[159]
I am not persuaded that any of the other orders for which section 20(2) provides
would serve as viable alternatives. If the criticisms of the respondent had been confined to a
failure to exercise his powers with reasonable care and skill, or to keep adequate records, it
might have been feasible to allow him to continue to act as continuing attorney, while
ordaining him to submit accounts or making him subject to the supervision of the Public
Guardian. But the respondent has breached his fiduciary duty to the adult, falling far short
of the requirement that he should act in the utmost good faith. He has (i) misled his co-
attorney in relation to the management of the rental income of one of the adult's rental
properties; (ii) failed to consult the applicant before expending £6,000 on a shared repair in
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respect of which the respondent's business had an interest; and (iii) removed over £110,000
from an ISA, seemingly for his personal benefit. Significant sums of money are involved.
Consequently, the respondent cannot be trusted to continue to intromit with the adult's
property. Revocation of the respondent's appointment as the adult's continuing attorney is
a necessary and proportionate response to his conduct.
[160]
It is also necessary to ordain the respondent to submit accounts to be audited by the
Public Guardian. The documentation which he has lodged in these proceedings does not
appear to be comprehensive. For example, he has suggested that the adult lodged dog
walking and window cleaning charges, but he has provided nothing to vouch this. But
more fundamentally, given that I have found that the respondent has breached his fiduciary
duty, it is necessary to require him to account for all of his intromissions with the adult's
property.
The general principles
[161]
I am satisfied that the requirements of section 1(2) to (4) of the 2000 Act are met. For
the reasons given in the foregoing paragraphs, the adult will benefit from the revocation of
the respondent's appointment and from ordaining him to submit accounts, in such a way as
cannot reasonably be achieved without these interventions. As the respondent cannot be
permitted to remain as continuing attorney, the proposed orders are the least restrictive
options available.
[162]
The adult is not in a position to give a view regarding the application. Insofar as her
past wishes are concerned, it is important to acknowledge that the POA reflects her intention
that the parties should both act as her attorneys. Unfortunately, the respondent's breaches
of duty constitute a material change in circumstances which the adult could not have
68
foreseen when she appointed him. Accordingly, notwithstanding the adult's past wishes,
the revocation of the respondent's appointment is necessary to protect the adult's interests in
her property and her financial affairs, as is the order that he should submit accounts to the
Public Guardian. In reaching this conclusion, I have also taken account of the views of the
adult's nearest relatives, having heard the evidence of her four sons; and, of course, I have
considered the views of her attorneys, who are the parties.
Possible ancillary orders
[163]
I have proceeded on the basis that it is competent to revoke the respondent's
appointment as continuing attorney, while leaving him in place as one of the adult's welfare
attorneys, as this is what the applicant craves and no argument to the contrary was
advanced. But given that the respondent has acted in bad faith, albeit in the different
context of the management of the adult's property and financial affairs, whether he should
remain as her welfare attorney is open to question. A further problem is that it is difficult to
imagine the parties taking decisions together in relation to the adult's welfare, given their
exceptionally poor relationship. Consequently, it is appropriate to consider whether it is
necessary to revoke the respondent's appointment as the adult's welfare attorney.
[164]
In addition, I consider that it may be necessary to ordain the applicant to submit
himself to the supervision of the Public Guardian. The context within which he will be
exercising his powers is one of a deep family rift in which some of the adult's property lies
in the hands of other family members. A further complication is that it is not clear that the
content and extent of the adult's estate is firmly established: following the death of her late
husband there seems to have been initial confusion over the ownership of two of his
properties, and the BOS ISA did not come to light immediately. The respondent suggested
69
that it was possible that other assets might yet be discovered. This a singularly difficult
situation for the applicant to grapple with. And the applicant's conduct raises questions
about his ability to manage the adult's affairs, as I have found that he breached his duty to
exercise reasonable care in relation to the management of the JG property. It is for these
reasons that it is appropriate to consider whether the applicant should be supervised by the
Public Guardian.
[165]
The court would be entitled to take these steps by making ancillary orders following
on from the disposal of the application, in terms of section 3(1), subject to the various
requirements of section 20 and section 1 being satisfied. But it is appropriate that the parties
should be given an opportunity to makes submissions before a decision is taken as to
whether they should be made. I shall fix a hearing for this purpose.
Disposal
[166]
For the reasons given above, I shall sustain the applicant's plea in law and grant his
second and third craves, revoking the respondent's appointment as continuing attorney, in
terms of section 20(2)(e)(ii) of the 2000 Act, and ordering the respondent to submit accounts
to the Public Guardian for audit from the period 15 June 2015 to date relating to his
intromissions qua continuing attorney, in terms of section 20(2)(b) of the 2000 Act. I shall
refuse the applicant's first crave.
[167]
I shall fix a hearing for discussion of whether the possible ancillary orders outlined
above should be made, and for determination of all questions of expenses.
[168]
This decision will be sent to the Public Guardian, in accordance with the
requirements of section 20(3) of the 2000 Act.
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[169]
I shall also direct the sheriff clerk to send a copy to the Procurator Fiscal of Alloa, for
consideration of whether a criminal investigation should be instigated. In doing so, I
recognise that a different standard of proof would apply to criminal proceedings. It is for
others to decide whether further action should be taken.
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