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Cite as: [2016] EWCOP 65

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The judge has given permission for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the incapacitated person and members of their family and of any individual referred to in this judgment must be strictly preserved. All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.

		Neutral Citation Number: [2016] EWCOP 65
		Case No: 12474920

IN THE MATTER OF PP

Sitting at
First Avenue House High Holborn
London WC1V 6NP

13th September 2016

B e f o r e :

District Judge Batten
____________________

Between:

	BB (1) CD (2)	Applicants
	- and -
	PP (by the Official Solicitor as litigation friend) (1) The Public Guardian (2)	Respondents

____________________

David Mitchell (instructed by Terry Jones Solicitors) for the Applicant
Alexander Drapkin (instructed by the Official Solicitor) for the First Respondent
Thomas Entwhistle for the Public Guardian
Hearing date: 31st August 2016
____________________

HTML VERSION OF JUDGMENT
____________________

I refer to my judgment of 15^th May 2015 in the application by BB for retrospective ratification of gifts out of the funds of PP (referred to as PP in that judgment) which identifies the people involved in this case and sets out the facts relevant to that application and to the matters which with I am now dealing. I do not propose to repeat what was said in that judgment but will refer to it from time to time in this judgment. I will use the same anonymisation apart from the person who this case is about who I shall call PP. The hearing on 31^st August 2016 was in public. The hearing and this judgment are subject to the provisions of an order dated made on 29^th June 2016 under Practice Direction Transparency Pilot.

My decision was that I refused to make the order sought by BB ratifying a gift of £324,000 which is a potentially exempt transfer for inheritance tax purposes ("the PET") to JB. Instead I ordered that the sum of £164,000 be repaid to PP. I further ordered that the amount of £160,000, which had been used by BB and JB to purchase a property in November 2014, should be brought into account by the making of a hotchpot clause in a codicil to PP's will, so that JB would not obtain a greater share of her estate than PP had intended.

In my judgment I expressed my concern at the actions of BB and CD as attorneys for PP and set out four possible options for the management of PP's property and affairs and for decisions about her health and welfare which were:

(i) to make no order, thus allowing BB and CD to continue to act under the Lasting Powers of Attorney for property and affairs and health and welfare made by PP on 16^th October 2012 ("the LPAs")

(ii) to revoke the appointment of one of BB or CD leaving the other as sole attorney

(iii) to revoke the LPAs and appoint BB and CD or one of them as deputy for property and affairs for PP, thus subjecting them to the supervision of the Public Guardian, requirement for filing annual report and accounts, and provision of a security bond

(iv) to revoke the LPAs and appoint a professional deputy from the Public Guardian's panel of deputies

In my order of 15^th June 2016 I directed that the attorneys should file witness statements setting out their positions on the options. They did so and the Official Solicitor as litigation friend for PP filed a position statement in response seeking revocation of both LPAs. I gave further directions for service and exchange of evidence by order dated 2^nd September 2015, in the expectation that I would make a decision on the basis of written evidence and submissions at a paper hearing on the first available date after 22^nd September 2015.

I had directed that the Official Solicitor may serve a copy of my judgment on the Public Guardian. On 18^th November 2015 the court issued an application by the Public Guardian for revocation of both LPAs and for appointment of a deputy from the Public Guardian's panel of deputies to be deputy for property and affairs for PP. That application was dealt with by the Senior Judge. On 28^th April 2016 the file was put before me again and I gave directions to bring the matter to a final attended hearing which took place on 31^st August 2016.

Evidence presented

A trial bundle of documents was made available to me at the hearing which contained the evidence previously before me in the form of the application, acknowledgments of service, orders, evidence as to capacity, witness statements by BB, evidence obtained from the file of PS's firm and from PP's current financial advisers, IHT tax calculations, documents from two will files, documents relating to the will and other dispositions made by EP, copies of the Lasting Powers of Attorney and evidence of registration, and documents relating to an investigation by the Public Guardian. Additional documents as set out in the index to the trial bundle had been added to include: the application by the Public Guardian, witness statements filed by Laura Wootton of the Office of the Public Guardian and further witness statements by BB and CD, the full report by the Court Special Visitor dated 8^th February 2014, copies of Lasting Powers of Attorney for Property and Affairs and Health and Welfare made by PP on 19^th July 2012 and some attendance notes made by CD.

I read position statements prepared by counsel for all parties and a case summary and schedule of costs prepared by Counsel for the Applicants prior to the hearing. I heard oral evidence from CD and BB. Counsel for all parties made final submissions on revocation of the LPAs and on the costs of the application for ratification. I reserved my judgment.

The issues in the case

The issues before me are

(i) whether the Lasting Power of Attorney for Property and Affairs should be revoked and cancelled pursuant to section 22(3)(b) and Section 22(4) of the Mental Capacity Act 2005

(ii) whether the Lasting Power of Attorney for Health and Welfare should be revoked and cancelled pursuant to section 22(3)(b) and Section 22(4) of the Mental Capacity Act 2005

(iii) what costs orders I should make in relation to the application for ratification of gifts decided by my judgment of 15^th May 2015 and in relation to this application

Neither the Public Guardian or the Official Solicitor sought the revocation of the Lasting Power of Attorney for Health and Welfare which was brought into issue at my own instigation. I accept that as a result counsel for the Applicants did not have a fully particularised case set out by an opponent to answer.

Capacity

I am satisfied on the basis of the opinion of the Court Special Visitor set out in his report of 8^th February 2014 that PP does not have capacity to revoke either of the LPAs. In those circumstances the court has jurisdiction to revoke the LPAs pursuant to section 22(4)(b) of the Mental Capacity Act 2005.

PP's financial position

PP's financial position has changed slightly since the hearing on 25^th February 2015. BB has repaid the sum of £164,000 in compliance with my order of 15^th June 2015. PP's total capital assets now amount to £1,256,911. Of this sum, £370,000 represents the estimated value of the property purchased in her name in November 2013 which is now rented to students ("the Rental Property"). Her investments made through St James Place are valued at £568,656, of which £350,000 (or a greater sum because of capital growth since February 2015) is invested in schemes to provide relief from inheritance tax ("IHT"). Her annual income has reduced slightly to £37,176 and her expenditure has increased to £38,250. To date PP has paid very little tax on her rental income. When the start up expenses are no longer offset against income, her tax bill may be higher.

CD's evidence

CD set out in her witness statements the actions she had taken as attorney for PP. She became involved in PP's affairs once the LPAs were registered on 8^th January 2013. She communicated regularly with BB and has developed a good working relationship with him. They regularly review PP's investments with her current Independent Financial Adviser ("IFA"). She has visited PP. She and BB took a joint decision in February 2013 to purchase the Rental Property, at that time envisaged as a home for PP. She has left BB to deal with the practical side of managing the Rental Property. She said that she is fully aware of her responsibilities under the Mental Capacity Act 2005 and fully appraised of the Code of Practice to the Mental Capacity Act 2005.

CD confirmed in her oral evidence that she was not aware that BB had gifted £324,000 to JB, together with further gifting of £10,610 which was given to JB, their children and a carer, until she received a letter from the Public Guardian dated 16^th August 2013 (D613). She said that as a result she arranged to receive the bank statements for PP's accounts thereafter (apart from a short period in 2016). She was aware that the PET was a contravention of the authority given to BB by the Lasting Power of Attorney for Property and Affairs ("LPA PA"). She did not advise BB that he had contravened his powers because he had already made the PET and other gifts and the matter was being investigated by the Public Guardian. She told him that the money might have to be repaid and therefore should be ringfenced (D617). She did not tell him to repay it immediately.

CD consulted LR, the partner who had drawn up the LPAs for PP, who told her it was reasonable for a woman with an estate of £1,300,000 to seek advice on IHT mitigation. She was told by BB that PP's own IFA had given her advice in a letter about tax planning. She formed the view that it was a reasonable decision and in PP's best interests to make a gift to avoid the incidence of IHT. In arriving at that conclusion she did not consider the possibility that PP's care costs might increase substantially over her expected life span. CD confirmed that she had a copy of PP's will but did not consider that the PET might interfere with the devolution of her estate.

In November 2014, fifteen months after the start of the investigation by the Public Guardian and while the application for ratification of gifts was proceeding in the Court of Protection, BB and JB used £160,000 of the PET in the purchase of a property in the same village as the care home in which PP now lives ("the W House"). BB did not seek authorisation of the court for this nor did he consult CD. Her monitoring of the bank statements would not have revealed it because the sum of £324,000 was held by BB and JB in their own accounts. CD could not recall when she became aware of this, whether before or after completion of the purchase. She did not put any other safeguards in place when she found out.

CD was asked why BB's legal costs of making the application for ratification, in which he is represented by the firm of which CD is a partner, had been paid out of PP's funds. No order for costs has been made in the application under Rule 156 of the Court of Protection Rules 2007 which would give authority for such a payment. CD said that she knew nothing about this, but only that her own professional costs of acting as attorney were paid out of PP's funds. She did not query the amounts which totalled £19,597. I was later informed by counsel for BB and CD that the transfers to meet BB's costs were the responsibility of the partner acting for BB in this application.

CD said in her witness statement dated 28^th May 2015 that she would only wish to continue as attorney or deputy for PP if BB also continued in that role or a suitable alternative person was to be appointed in his place. Specifically she did not feel equipped to take on management of the Rental Property and considered that would be unduly costly. She said that she had confidence in BB and would prefer to continue working with him.

I asked CD some questions about her role as attorney under the Lasting Power of Attorney for Health and Welfare ("LPA HW").

I had noted in the trial bundle of documents the inclusion of copy unregistered Lasting Powers of Attorney for Property and Affairs and for Health and Welfare made by PP on 19^th July 2012 (D112), some three months before the LPAs which were subsequently registered by the Public Guardian. Both documents were fully executed including by BB and CD as attorneys. The differences between them were:

(i) the certificate provider in the earlier instruments was LR, the partner in the firm then advising PP, and in the later instruments PP's general practitioner

(ii) the earlier instrument did not include a charging clause, the later instrument did

(iii) in the earlier instrument PP did not give her attorneys authority to consent or refuse consent to life sustaining treatment. In the later instrument she gave such consent.

CD did not have anything to say about the Lasting Powers of Attorney signed in July 2012 or why PP might have made the changes.

CD told me that LR had dealt with the LPAs and she had not met PP until 16^th October 2012 when she had a brief discussion with her. She was asked to act as attorney because PP wanted a female solicitor as her attorney and LR was retiring. Since registration of the LPAs, CD has visited PP on 4^th February 2013, 12^th March 2014, 23^rd June 2015, 11^th November 2015 and 18^th May 2016. It is possible that there are other visits which have not been evidenced. CD's attendance notes of the visits are included in the bundle (I72-81)

I asked CD how she had prepared for having the responsibility of making a decision to agree to or refuse life sustaining treatment on the registration of the LPA HW in January 2013. This was a decision she might be making entirely on her own if BB were unavailable in an emergency. She did not explore whether PP had capacity to make the decision herself at that time or subsequently. She did not try and establish PP's wishes and feelings, beliefs and values in January 2013 or subsequently. She visited PP on 23^rd June 2015 at the request of the care home to consider whether PP should be given Do not Resuscitate status. She formed her view that PP should not be given such status on the basis of her general health and well being, her ability to react well with staff and CD and her feeling that she would want her own mother to be resuscitated if she were in PP's situation. She spoke of discussing personal welfare decisions with BB and JB but not with any other family members or friends or with those currently caring for PP.

I asked CD how she had gone about making other personal welfare decisions for PP under the LPA HW. I asked if she had sought capacity evidence when making a decision about where PP should live in February 2013. She said that she had relied on the general practitioner's advice as to PP's general mental health and her own assessment of PP's capacity. She went to see PP and spent about an hour discussing the move with her. She found PP very repetitive. She was concerned that PP would not be all right in her rented accommodation and therefore concluded that it was in her best interests to buy a house for her.

BB's evidence

BB gave evidence on his role as attorney under the LPA HW only, on the basis that he had already given lengthy evidence as to his management of PP's financial affairs at the previous hearing. He too could not recall the making of Lasting Powers of Attorney in July 2012 or why they were changed. However he said that, in conversation with the general practitioner for the signing of the Part B certificate for the LPA HW, PP told the GP that she wanted to stay alive for the sake of her dogs, which was the reason for giving authority to her attorneys to make decisions about life sustaining treatment. PP had chosen to have a professional as her attorney for personal welfare decisions because she had a very good relationship with LR who acted as her solicitor. Unfortunately LR was about to retire and proposed CD as an alternative because she was caring and compassionate.

BB said that he had involved CD in personal welfare decision making about where PP should live and about the DNR decision. He also consults JB. He has not sought to limit PP's contact with family and friends and has taken advice from the manager of the care home as to how telephone contact and visits should be accommodated. As attorney he was able to sign consent forms for PP's medical and dental treatment and it would create difficulties if he did not have such authority.

The law

In paragraphs 95 and 96 of my judgment of 15^th May 2015 I set out the law and guidance on the making of gifts by attorneys, to be found in section 12 of the Mental Capacity Act 2005 and paragraphs 7.40 to 7.42 of the Code of Practice to the Mental Capacity Act 2005 and to which I now refer.

Section 22 of the Mental Capacity Act 2005 deals with the court's powers in relation to revocation of Lasting Powers of Attorney.

Section 22(3)

Subsection (4 ) applies if the court is satisfied

(a) that fraud or undue pressure was used to induce P-

(i) to execute an instrument for the purpose of creating a Lasting Power of Attorney or

(ii) to create a Lasting Power of Attorney

(b) that the donee (or, if more than one, any of them) of a Lasting Power of Attorney

(i) has behaved, or is behaving, in a way that contravenes his authority or is not in P's best interests, or

(ii) proposes to behave in a way that would contravene his authority or would not be in P's best interests

Section 22(4)

The court may

(a) direct that an instrument purporting to create the Lasting Power of Attorney is not to be registered or

(b) if P lacks capacity to do so, revoke the instrument or the Lasting Power of Attorney

Section 22(5)

If there is more than one donee, the court may under subsection (4)(b) revoke the instrument or the Lasting Power of Attorney so far as it relates to any of them.

Paragraph 7.59 of the Code of Practice to the Mental Capacity Act 2005 deals with the issue of Duty of Care

"'Duty of care' means applying a certain standard of care and skill – depending on whether the attorney is paid for their services or holds relevant professional qualifications…..if attorneys are being paid for their services, they should demonstrate a higher degree of care and skill. Attorneys who undertake their duties in the course of their professional work (such as solicitors…) must display professional competence and follow their profession's rules and standards".

My attention was drawn to the decision of Senior Judge Lush in the case of In Re Harcourt: The Public Guardian v A [2013] COPLR69. SJ Lush revoked the Lasting Power of Attorney for Property and financial affairs given to P's daughter who was a local government auditor and who had failed to comply with the court's directions. He commented in paragraph 53 that

"in cases of this kind it is never particularly easy to apply the best interests checklist set out in section 4 of the Act. Nonetheless any difficulty encountered in applying the checklist does (not) mean that decisions such as …terminating an attorney's appointment are not in the donor's best interests"

At paragraph 59 SJ Lush referred to the professional qualifications of the attorney and stated that it would be reasonable to expect a higher standard of care from her in terms of an awareness of her fiduciary duties.

At paragraph 71, SJ Lush went on to make a general observation about revocation of Lasting Powers of Attorney

"In the absence of appropriate safeguards, the revocation by the court of a Lasting Power of Attorney, which a donor executed when they had capacity and in which they chose a family member to be their attorney, would be a violation of their Article 8 rights. For this reason the Mental Capacity Act 2005 has been drafted in a labyrinthine manner to ensure that any decision by the court to revoke an LPA cannot be taken lightly."

Legal submissions

Submission on behalf of the Public Guardian

It was common ground that statute and case law set a high bar for a decision to revoke a Lasting Power of Attorney. The court must approach the position of each attorney independently and make a decision on the basis of the evidence relating to that attorney alone. The court has a discretion; if the ground or grounds are made out under section 22(3)(b) the court may, not must, revoke the Lasting Power of Attorney.

In his written and oral submissions, counsel for the Public Guardian argued that it was incontrovertible that BB had exceeded his authority and not acted in the best interests of PP on the grounds set out in my previous judgment, He identified five reasons why the court should exercise its discretion in respect of BB's attorneyship:

(i) The gravity of the breach of his obligations by BB. He gifted a substantial sum, which represented over 20% of PP's estate, to his own wife and therefore stood to benefit personally. He did not take PP's wishes and feelings into account. He did not seek any legal advice although his co attorney was a solicitor. His subsequent actions do not support his assertion that he has rectified his lack of awareness of the provisions of the Mental Capacity Act 2005 and Code of Practice and learned from his mistakes.

(ii) BB used part of the PET to purchase the W House in November 2014 in the knowledge that the gift was the subject of an application to the Court of Protection and that he had been advised the money should be ringfenced and might have to be repaid. He did not tell his co-attorney, nor did he seek advice as to whether he should apply to the court for approval.

(iii) The costs of deputyship under a panel deputy would not be an undue burden on PP's estate. BB's evidence is that PP's finances require little management now.

(iv) BB arranged for the investment of a significant proportion of PP's investment capital in investments which are high risk and low return and whose sole advantage is the reduction of liability to IHT. It is accepted that St James is a reputable firm and that the advice of an IFA was sought. It is the purpose of the investment that is of concern. The benefits will accrue to BB and his family, not to PP. BB is in a position of conflict in reviewing the continuation of these investments. A fresh look is needed as to whether those investments are in PP's best interests.

(v) PP has consistently expressed the view that she does not want BB to continue as her attorney because he would be influenced by JB who might use PP's finances for her own benefit.

In relation to CD, counsel for the Public Guardian accepted that she had no knowledge of the PET. The payment of BB's costs out of PP's funds contravened CD's authority. As to whether CD had acted in PP's best interests, counsel argued that she had failed to exercise proper oversight over the actions of BB. She showed a worrying lack of familiarity with section 12 of the Mental Capacity Act 2005. She formed the view that the PET was in the best interests of PP without taking into account her likely future care needs, nor, despite her oral evidence, was it clear that she recognised the impact on the devolution of PP's estate. BB was able to use half of the PET to purchase a property in the name of himself and his wife without CD's knowledge, so her safeguarding procedures were inadequate. She was unclear as to when she first learned of this which demonstrates a laissez faire attitude.

Submissions on behalf of BB and CD

Counsel for BB conceded that BB had acted in contravention of his authority but that his actions were not such as to justify the court exercising its discretion to revoke the LPAs.

In relation to the Public Guardian's five points, counsel contended

(i) If BB's breach of authority was so serious, the Public Guardian would have sought revocation instead of advising him to apply to the court for ratification of the gifts. In my judgment I ratified half of the PET. By going through the process of the court case BB has learned of his obligations. He should not be held to too high a standard of perfection; many attorneys show the same failings. It is not wrong for attorneys to consider IHT planning.

(ii) PP has benefitted very much from having BB, JB and their family living close by. BB offered to repay the sum used to purchase the house by raising a mortgage if the ratification application was unsuccessful. He showed his good faith by repaying the balance immediately and with interest.

(iii) As to the costs of a professional deputyship, management of the Rental Property is not straight forward. BB has done a lot of work on the house and garden and is very involved in day to day decisions. A professional deputy would employ a letting agent and gardener at considerably greater expense on top of his own fees which would impact on PP's net income.

(iv) There has been no allegation that the investments in the Octopus IHT schemes constitute a breach of duty. The attorneys took advice from a reputable IFA at a reputable firm; there is nothing wrong with that even if another attorney would have made a different decision. While there were high start up costs the investments have now increased in value.

(v) As to PP's wishes and feelings, counsel accepted that some weight could be attached to the views PP expressed to the Court Special Visitor in February 2014. Her only objection to BB being attorney is her fear that he would be influenced by JB, who would take her money. Going forward either JB will not be able to influence BB or the court will prevent it. PP chose to appoint a solicitor to act with BB so that this would not arise. Given the deterioration in PP's mental state, I cannot attach any weight to what she said to the social worker in February 2016.

As to CD, counsel explained that KF, solicitor for BB, had authorised the transfers from PP's money to pay for BB's costs of the ratification proceedings. He said that CD was entitled to rely on KF's advice. He put forward the following arguments on the five points

(i) CD was unaware that the PET had been made for some five months. She then changed the procedures and advised ring fencing of the money. She sought advice from LR. It was then perfectly reasonable to await the outcome of the Public Guardian's investigation and their recommendation rather than embarking on a costly application to the Court of Protection. In the event, the Public Guardian required an application for ratification of gifts, not immediate repayment to PP or seizing of the amount of the gifting by CD.

(ii) See (i).

(iii) As to the Octopus investments CD also took advice from the IFA and followed it. Her view was that it was a reasonable step to take.

Counsel said that PP had wanted a female solicitor as her attorney. CD has visited and now got to know PP over a period when PP's awareness was higher. A new deputy will not be able to replicate the insight she has gained into PP. She also knows the family. There is a risk of a rift if an independent deputy is appointed.

As to the future management of PP's property and affairs, counsel urged me either to leave the LPAs in place or appoint CD and BB as deputies. CD does not want to act alone without BB's involvement. She could be sole attorney or deputy and allow BB to manage the Rental Property. If the court has concerns, it could give directions for the obtaining of advice from another IFA. It is in PP's best interests that BB as the family member chosen by PP should be kept in place.

Counsel then turned to the LPA HW. PP chose BB and CD to be her attorneys and there is no reason to go behind that decision. There was no evidence that either attorney had contravened their authority. Their decisions (on purchase of property, moving PP to the care home and on contact) could not be criticised. CD might not have arrived at her decisions in the best way but they were the right decisions. If I revoke the LPA HW it will cause difficulty for the care home particularly on obtaining consent to medical and dental treatment. BB knows PP's views on resuscitation.

Submissions on behalf of the Official Solicitor as litigation friend for PP

Counsel for the Official Solicitor agreed with the submissions of the Public Guardian. He made the following additional arguments in relation to BB

(i) BB's actions in making the PET are far from perfection and he is not being held to an unattainable standard.

(ii) The use of PP's money to buy the W House while these proceedings were ongoing and he had been advised to ring fence the money was a breach of duty. BB offered to raise a mortgage if the court ordered repayment but we do not know if he would have done so or been able to do so. If not, civil proceedings would have been required to get the money back.

(iii) There is no reason why a lettings agent cannot manage the letting of the Rental Property. There will be additional costs for the professional deputy and letting agent but they have to be set off against CD's costs of acting as attorney, which are approximately £15,000 for the period February 2013 to June 2016.

(iv) Neither the Official Solicitor nor the Public Guardian seeks to argue that it is never in the best interests of an incapacitated person to engage in IHT planning. It depends on the circumstances of each case. In this case it is clear from the letter from St James that the sole motivation for the investment was to save IHT (E55-61). In return PP had to bear a high level of risk, low return and potential difficulties in withdrawing the funds, particularly if the tax regulation regime changes.

(v) PP has consistently expressed the wish that her family should not be involved in the management of her affairs. She appointed BB and a solicitor to be her attorneys, yet the very outcome she said she did not want has occurred, namely that a substantial proportion of her estate was gifted to JB. Even if she lacks capacity, her wishes and feelings may be taken into account. The decision of Munby J as he then was in the case of re M sets out the test for reliance on an incapacitated person's wishes and feelings (see paragraph 95 of my previous judgment).

As to CD, he criticised her failure to respond appropriately when she learned of the PET. She decided it was in PP's best interests without appreciating that it was outside the scope of BB's authority or weighing the arguments as to why it was not in PP's best interests. She did not act effectively to secure the funds at this point when they were all in cash and could have been repaid. BB went on to use part of the PET to purchase the W House without her knowledge. CD also failed to notice that BB's legal costs were being defrayed out of PP's funds without authority. She has demonstrated a lack of knowledge of the law. She is not willing to act as sole attorney or deputy.

Counsel for the Official Solicitor argued that the court should remove BB and CD as attorneys for the reasons set out. They have had an opportunity since the issue of the ratification application on 25^th March 2014 to demonstrate that they can act in PP's best interests and within the scope of their authority yet they have failed to do so. BB purchased the W House using part of the PET. CD failed to set up adequate safeguarding to prevent this. She failed to notice that BB's own legal costs had been defrayed out of PP's funds without authority from the court.

My decision

The best interests checklist

Section 4 of the Mental Capacity Act 2005 requires me to consider all the relevant circumstances and to take the following steps.

I must consider whether PP is likely to have capacity in relation to the issues in this case and if so when that is likely to be. I am satisfied that there is little or no prospect that PP will recover capacity to revoke the LPAs.

I must so far as is reasonably practicable permit and encourage PP to participate or to improve her ability to participate in these proceedings and the decision I have to take. PP has participated through her examination by the Court Special Visitor. Her views are set out in his report of 8^th February 2014. PP has also spoken to her social worker LR more recently and I have been shown an email dated 5^th February 2016 from LR to the Public Guardian and a Safeguarding Report dated 18th February 2016.

I must consider so far as is reasonably ascertainable PP's past and present wishes and feelings (and in particular any relevant written statement made by her when she had capacity).

As to PP's past wishes and feelings, I refer to paragraphs 37 and 104 of my previous judgment. PP was very distressed by finding out on 24^th June 2013 that BB had transferred money out of her funds in March and April 2013 to give to JB. She was worried about the powers she had given him and CD under the LPA PA which she did not realise were exercisable at that time. She continued to express anger and distress about this.

PP was still preoccupied and concerned about BB's conduct when she was seen by the Court Special Visitor on 8^th February 2014. He said

"I extended the questioning about the Power of Attorney by asking whether she would like BB to continue to have the Power of Attorney. She stated that she would have like him to continue but her daughter JB is out to grab her money. She stated that JB wants to buy a farm and therefore has been asking her to give her money and she stated that JB through BB would get the money and buy property for her own self….."

Since that time, PP has remained preoccupied (at least when questioned) with anxieties about her finances and worry that she cannot trust JB and by extension BB. PP's social worker recounted the following observations from her meeting with PP in February 2016.

"Met with PP she was worried about her finances and whether she had enough money to remain at (S Care Home). She mentioned on several occasions that she did not want her family to manage her finances and wants someone else to look after it for her."

The LPAs are relevant written statements by PP. She chose BB and CD to be her attorneys. I am told that she wished to have a female solicitor to be her attorney to act in conjunction with BB, and I infer from that that she wished to have some professional supervision and oversight of BB's actions.

I must also consider the beliefs and values that would be likely to influence PP's decision if she had capacity. I obtained the clear impression when preparing my previous judgment that PP wanted to ensure that she had sufficient funds so that she would be well cared for in her old age (see paragraph 62 of my previous judgment). Further I am aware that she had a long and trusting relationship with PS, her previous IFA, and conclude that she is happy to rely on professional advice and have professional involvement in the management of her finances. Indeed she told the Court Special Visitor that her accountants were managing her financial affairs (D173).

I must taken into account if it is practicable and appropriate to consult them the views of anyone engaged in caring for PP or interested in her welfare, I have been made aware from documents filed by BB that the manager of S Care Home thinks very highly of BB' and JB's involvement in PP's life (D482-483).

""Since PP's admission to the home, BB and JB have always been very supportive of PP's welfare which has resulted in decisions always being made in PP's best interests……PP's mental and physical wellbeing has improved since BB' and JB's family has moved to (the village). PP is more positive, outgoing and a happier lady who now interacts better with others, is actively more interested in the lives of others and is enjoying a better quality of life overall at present within S Care Home".

I have the views of BB from his written and oral evidence in this and the previous hearing. He seeks to remain as attorney for PP under the LPAs or as deputy. He considers that he is best placed to manage her finances, and particularly to take on the practical management of the Rental Property, as a member of her family. He does not think that his actions have disqualified him in any way for having responsibility for PP. In his view PP's wishes have fluctuated since she lost capacity. He has told me his perception of PP's views about her family, where she should live, who should be her attorneys under the LPAs and what she feels about being resuscitated if she were to have a life threatening illness (paragraph 104 of my previous judgment and see above).

I have to consider the views of any donee of a Lasting Power of Attorney granted by PP. CD's views were given in her written and oral evidence. She too wishes to remain acting as attorney or deputy for PP but only in conjunction with BB or another person. She does not want to take on any responsibility for management of the Rental Property.

I do not know the views of JB or any other member of PP's family or friends apart from BB.

What weight should I attach to the expressed views of PP? I refer to paragraph 95 of my previous judgment in which Munby J as he then was sets out how to approach this question.

First I must consider the degree of PP's incapacity over the relevant period. PP has since July 2013 been expressing worry and anger that JB has, by BB's actions, taken her money and she has said numerous times that she does not want BB to manage her affairs because of this. PP had capacity to make the LPAs in October 2012. BB considered that she had capacity to manage her property and affairs until about February 2013 (paragraph 103 of my previous judgment). IN July 2013, her IFA was still dealing directly with her (albeit that BB criticises him for doing so). PP was able clearly to express her views in July 2013 and may be thought to be relatively close to the borderline at that time. Since then her capacity has declined over time but it is acknowledged by BB's counsel that she was able to express wishes and feelings of which I should take account to the Court Special Visitor in February 2014.

Second I must consider the strength and consistency of the views being expressed by PP. She has indeed expressed the very consistent view that she does not want BB to be her attorney because of JB's influence over him which she fears will result in her money being taken away.

As to the impact of the knowledge that her views are not being heeded, PP's memory is worsening and she may not recall her concerns unless reminded of them. However when asked (as for example by her social worker in February 2016) her worries about her financial security surfaced again and she repeated that she did not want her family to manage her money. It seems to me that it remains a source of worry and concern to her.

Fourthly I must consider the extent to which PP's wishes and feelings are, or are not, rational, sensible, responsible and pragmatically capable of sensible implementation in the particular circumstances. Given that she did not want JB to have access to her money, that she appointed BB together with a professional as attorneys in order to avoid JB gaining access to her money, and that her fears were realised by the actions of BB in gifting a significant proportion of her estate to JB, her wishes and feelings appear rational sensible and prescient. Her wish to have professional management of her estate rather than management by her family is certainly capable of sensible implementation.

Revocation of the Lasting Power of Attorney for Property and Financial Affairs

In my judgment BB has acted in contravention of his authority as attorney under the LPA PA and in breach of section 12 of the Mental Capacity Act 2005 in making the PET of £324,000 to JB and using a significant portion of that money in the purchase of the W House without seeking authority of the court. He appeared to have no compunction in doing so despite the fact that CD had advised him to retain the money and that the matter was subject to the jurisdiction of the court with the trial date fast approaching. By using the sum of £160,000 for the purchase he potentially put it beyond recovery without expensive legal proceedings to force sale of the W House, if he was unable to raise that sum by way of mortgage. I consider that BB has failed to act in PP's best interests in making the PET. There is no evidence that this accorded with PP's past or present wishes or feelings, beliefs or values. It undermined her wishes as to the devolution of her estate under her will.

I also consider that BB did not act in PP's best interests in instructing an IFA to make investments whose primary purpose was for the saving of IHT. I consider that BB has a conflict of interest in carrying out a review of the IHT saving Octopus investments and deciding whether they are in PP's best interests and in making future decisions about investments solely in PP's best interests without regard to whether JB, he and their family will benefit.

I do not consider that BB's actions since he became aware of the Public Guardian's investigations and since he submitted to the jurisdiction of this court give cause for confidence that he will act in PP's best interests in the future. I am not satisfied that supervision by CD or directions given by the court would be sufficient to ensure that BB acts at all times solely in PP's best interests. I have therefore decided that BB's appointment under the LPA PA should be revoked.

As to CD, I do not consider that she has contravened her authority as attorney under the LPA PA. She was unaware that BB had made the gift or that he had failed to follow her advice to ringfence the money and used half of it in the purchase of the W House. It appears that she was not responsible for using PP's money to pay BB's legal fees to her firm.

However I consider that CD has not acted in PP's best interests. When she learned of the PET, she was quick to approve the decision that BB had made without conducting her own enquiry pursuant to section 4 of the Mental Capacity Act 2005 as to whether it was in PP's best interests. She has been uncritical of BB's management of PP's affairs. She instituted safeguarding measures but they failed to reveal either that BB had used £160,000 of PP's money in the purchase of the W House (when the PET had not been ratified) or that almost £20,000 of PP's money had been used to pay BB's costs in the application for ratification. In my judgment she has failed in her role as professional attorney to provide sufficient oversight of BB and ensure that he was acting in the best interests of PP. I am not confident that she would provide adequate oversight of BB in the future. She does not want to have sole responsibility for PP's financial affairs. I have therefore decided that CD's appointment under the LPA PA should be revoked.

For the reasons I have just set out, I do not consider that it is in PP's best interests that either BB or CD or both of them should be appointed as deputy for property and affairs for PP. I therefore direct that a deputy from the Public Guardian's panel of deputies should be appointed to act as deputy for property and affairs for PP and that he or she should undertake a review of PP's investments. The choice of deputy should take into account that the deputy will have to be able to manage the Rental Property, which is a task undertaken by many professional deputies. PP may prefer a female deputy, although she had no difficulty in her relationship with PS, previously her IFA.

Revocation of the Lasting Power of Attorney for Health and Welfare

As to the LPA HW, I am not convinced that either attorney fully understood, when they made personal welfare decisions for PP, that they had no authority to make those decisions if PP retained capacity to make them herself. Capacity is time and issue specific. Capacity to make decisions about accommodation or care are completely separate issues from capacity to manage property and affairs. Neither attorney appears to have sought advice as to whether PP had relevant capacity at any stage. Nor was I convinced that CD had taken the necessary steps on each occasion to elicit and weigh in the balance PP's wishes and feelings in relation to health and welfare decisions but had simply formed her own view, albeit in consultation with BB. However I accept that BB, having very regular contact with PP, was aware of her wishes and feelings. He had gone through a lengthy process of trying to find a home for PP and she had been unable to make a decision about any of the options he proposed. He consulted CD and JB although there was no consultation of any other family members or friends. I recognise that BB and CD are PP's choice as her attorneys for personal welfare decisions. I do not consider that the decisions they have taken on her behalf have been in contravention of their authority under the LPA PW or have not been in her best interests. In those circumstances I have decided not to revoke the LPA HW.

Article 8 of the European Convention of Human Rights

Section 1(6) of the Mental Capacity Act 2005 requires that before I make my final decision as to revocation:

"…. regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person's rights and freedom of action."

The purpose for which the decision to revoke the LPA PA is required is to ensure that PP's finances are managed for her own benefit and in her best interests, not for the benefit of others. That objective cannot in my judgment be achieved without revocation of the appointment of both attorneys under the LPA PA.

Section 3(1) of the Human Rights Act 1998 requires the court, so far as it is possible to do so, to read and give effect to the Mental Capacity Act 2005 in a way that is compatible with the European Convention on Human Rights. Article 8 of that Convention provides for the right to respect for private and family life as follows:

1. Everyone has the right to respect for his private and family life, his home and correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

The Court of Appeal considered the interrelationship of the Mental Capacity Act 2005 and Article 8 in the case of K v LBX [2012] EWCA CIV79. The Court of Appeal said that the trial judge should approach a decision in which P's Article 8 rights are engaged by ascertaining the best interests of the incapacitated adult in accordance with the checklist set out in section 4 of the Mental Capacity Act 2005. The judge should then ask whether the resulting conclusion leads to a violation of Article 8 and if so whether that violation is necessary and proportionate.

I have considered the best interests of PP with reference to the best interests checklist in section 4 of the Mental Capacity Act 2005 in relation to the revocation of the LPAs. I have considered whether there are less restrictive options and whether it is in PP's best interests that they should be adopted. I recognise that my decision to revoke the LPA PA, which reflects PP's own capacitous choice of her son in law BB and CD as attorneys to manage her property and affairs, constitutes an interference with her Article 8 rights. I consider that interference to be a necessary and proportionate one for the reasons set out above.

I will therefore make an order revoking the LPA PA and directing the Public Guardian to cancel its registration.

Costs of the ratification application as between BB and PP

The law

I turn to the question of whether I should depart from the general rule in property and affairs cases in the application for ratification of the PET. In that application BB was the applicant and PP through her litigation friend the Official Solicitor was the Respondent.

By Rule 156 of the Court of Protection Rules 2007 where proceedings concern the property and affairs of a person the general rule is that the costs of the proceedings or of that part of the proceedings that concerns his property and affairs shall by paid by the person or charged to his estate.

By Rule 159(1) the court may depart from Rule 156 if the circumstances so justify and in deciding whether departure is justified the court will have regard to all the circumstances including

a. the conduct of the parties

b. whether a party has succeeded on part of his case even if he has not been wholly successful

c. The role of any public body involved in the proceedings

By Rule 159(2) the conduct of the parties includes

i. conduct before as well as during the proceedings

ii. whether it was reasonable for a party to raise, pursue or contest a particular issue

iii. the manner in which a party has made or responded to any application or a particular issue and

iv. whether a party who has succeeded in his application or response to an application in whole or in part exaggerated any matter contained in his application or response; and

v. any failure by a party to comply with a rule, practice direction or court order

Before the implementation of the Mental Capacity Act 2005, the leading case on Court of Protection costs was Re Cathcart [1892] 1 Ch 549. It has been referred to in judgments on costs since the Mental Capacity Act 2005 came into force and recognised as still having relevance indecisions to depart from the general rule as to costs (see Heywood & Massie). In the case of In the matter of RC Deceased [2010] COPLR 11639140, Senior Judge Lush summarised the decision in Re Cathcart as follows:

The decision of the Lord Justices in Lunacy can be broadly summarised as follows:

1. Unlike proceedings in other civil courts, costs in the Court of Protection do not necessarily follow the event

2. Where an application is made in good faith, supported by medical evidence (where appropriate), in the best interests of the person to whom the proceedings relate ("P"), and without any personal motive the applicant is generally entitled to their costs from the P's estate, even if they are unsuccessful.

3. The court has an unlimited discretion to make whatever order for costs it considers that the justice of the case requires.

4. In exercising its discretion the court must have regard to all the circumstances of the case, including, though not confined to, the relationship between the parties, their conduct, their respective means and the amount of costs involved.

5. Where parties place themselves in a hostile position to P, or where their conduct results in the costs of the proceedings being more expensive than they might otherwise have been the court may consider it appropriate to penalise them as to costs.

Submissions on costs in relation to the ratification application