IN THE MATTER OF THE MENTAL CAPACITY ACT 2005
IN THE MATTER OF SCHEDULES 1,2,3,4,5 AND 6
B e f o r e :
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THE PUBLIC GUARDIAN | Applicant | |
And | ||
MATRIX DEPUTIES LIMITED | ||
LONDON BOROUGH OF ENFIELD | Respondents |
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Mr. Nwokeji, Solicitor for the First Respondent
Mr. M. Paget, Counsel for the Second Respondent
HEARING DATES: 3rd, 4th and 5th July 2017
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Crown Copyright ©
The proceedings were heard in public subject to an order made on 13th April 2017 in the terms of the Practice Direction – Transparency Pilot.
This judgment is being handed down and delivered to the parties by e-mail on 19th July 2017. It consists of 9 pages and has been signed and dated by the judge. The numbers in square brackets and bold typeface refer to pages in the core hearing bundle.
INTRODUCTION
BACKGROUND
"..Matrix has failed in its duty of care to the individuals named in Schedule 1. Further, the general conduct of Matrix and pattern of behaviour gives rise to serious concern in relation to its management practices. This is compounded by the concerns…in relation to Matrix's involvement (without any ostensible authority) in Schedule 2 and 3 cases after [DW] and [OM] ceased working there."
"investigate the past dealings of [Matrix Deputies Ltd and DW] in the property and affairs of their allocated persons named in schedule 2 and 4…and to set out their findings in a written report to be filed and served by 4pm on 31st March 2016." [A45]
Mr. Paget confirmed that it was always the intention at that hearing, and made clear to Matrix Deputies Ltd, that those investigations would be conducted by an independent expert (as opposed to 'in house' by the Local Authority.)[3] As part of the investigative process, paragraph 13 of the order specifically required Matrix Deputies Ltd, DW and OM forthwith to deliver up all electronic and hard copy files in their possession relating to the persons named in schedules 2,3,4 and 5.[A54]
a. Excessive fee charging: fees were charged to individuals in excess of what the deputyship appointment permitted and/or irrespective of work actually done by the deputy;
b. Inappropriate/inadequate arrangements for holding/recording client funds and transactions: all clients' funds were held in a single account, with unexplained discrepancies between closing and opening balances, inconsistencies with reports submitted to the Public Guardian and no clear record of individual balances;
c. Conflicts of interest arising from inappropriate relationships with other bodies: individuals held positions in both Matrix and another company, or were family members of key personnel in those other companies, whose services were engaged to provide services to individuals at considerable cost and without appropriate evidence of competitive tendering and best interests decision making;
d. Failure to provide information requested/comply with orders for disclosure: the response to the February 2016 order for disclosure was insufficient for the completion of investigations such that a further application to court, and a second report, were required.
"A fiduciary duty means deputies must not take advantage of their position. Nor should they put themselves in a position where their personal interests conflict with their duties. For example, deputies should not buy property that they are selling for the person they have been appointed to represent. They should also not accept a third party commission in any transactions. Deputies must not allow anything else to influence their duties. They cannot use their position for any personal benefit, whether or not it is at the person's expense."
COSTS OF THESE PROCEEDINGS
"…
ii. In R (Boxall) v Waltham Forest LBC (2001) 4 CCL Rep 258 QBD (Admin), Scott Baker J confirmed that the court has power to make a costs order when the substantive proceedings have been resolved without a trial, but when the parties have not agreed about costs; specifically in relation to compromised cases…he observed that:
"at each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties."
"… is to disapply the requirement that, in addition to costs being reasonably incurred, they should also be proportionate to the sums and issues at stake in the litigation and that, in the event of the assessment judge having a doubt as to whether or not an item of cost has been incurred reasonably, the benefit of such doubt should go to the receiving rather than the paying party."
NEXT STEPS
Her Honour Judge Hilder
17th July 2017
Annex A Case No. Various
IN THE COURT OF PROTECTION
IN THE MATTER OF THE MENTAL CAPACITY ACT 2005
The relevant documents have now been disclosed and the Public Guardian has particularised the allegations in light of the disclosure, and submits that the following table contains the key findings for the court:
|
DATE |
ALLEGATION RAISED BY OPG IN WITNESS STATEMENTS/ PROFESSIONAL RELIED UPON |
RESPONSE TO DATE |
1. |
08/10/14 |
· Fixed fees charged to clients regardless of the amount of work done on the case or the level of assets held by the client. · Source: Assurance visit to Matrix Deputies Exhibit SM03
|
· Accepted - response from DW recorded in assurance visit report. Exhibit SM03 |
2. |
18/04/15 and 05/02/15 |
· Annual report fees exceed the amounts set out in the court orders · Source: Review of client annual reports. Exhibits SM18, SM19
|
· None to date |
3. |
08/10/14 |
· All client's funds are held in one account · Source: Assurance visit to Matrix deputies completed on 8 October 2014. Exhibit SM03 |
· None to date |
4. |
21/11/14 |
· Conflict of interest with regards to JW's positions at Matrix Deputies and London Borough of Enfield (LBE). JW was a consultant for LBE and a majority shareholder for Matrix Deputies. Many of Matrix Deputies clients have been referred from LBE. · Source: Copy of letter of OM's resignation letter addressed to JW dated 21 November 2014. Exhibit SM02 |
· Denied - letter from Matrix Deputies dated 23 February 2015. Exhibit SM04b |
5. |
2012 to 2015 |
· Enlisting the services of connected companies causing a conflict of interest. · Source: Review of client reports showing use of company H for performing refurbishments to clients' properties. Exhibits SM11, SM14 and SM16
|
· None to date |
6. |
23/02/15 |
· Relationship between G Accountants and Matrix Deputies · Source: Letter dated 23 February 2015 from DW declaring that he is a director and shareholder of G Accountants and that they acted for Matrix Deputies when it was originally formed. Exhibit SM04a
|
· None to date |
7. |
06/07/15 |
· Directors of company H (OM and Miss M) are former directors of Matrix Deputies and a current employee of Matrix Deputies (Mr P) is OM's son. · Source: Companies House records Exhibit SM07c
|
· None to date |
8. |
2012 to 2015 |
· High amounts paid to company H for property refurbishments of clients' properties. · Source: An amount of £215,471.95 paid to company H in three sample case reviews. Exhibits SM11, SM14 and SM16
|
· None to date |
9. |
21/11/2014 |
· Payments made directly to JW without evidence of contracts or invoices · Source: Copy of letter of OM's resignation letter addressed to JW Exhibit SM02
|
· None to date
|
10. |
21/11/2014 |
· An amount of £15,286.11 withdrawn from Matrix Deputies' accounts with no explanation · Source: Copy of letter of OM's resignation letter addressed to JW Exhibit SM02 |
· None to date |
11. |
29/09/2014 |
· Accountant reports filed with Court of Protection bearing the signature of G's Accountants but without their knowledge, approval or consent. · Source: Letter from G's Accountants. Exhibit SM20b |
· None to date |
12. |
04/02/15 |
· £7,087.50 professional fees charged to Mr W · Source: Annual report for period 5 February 2014 to 4 February 2015 Exhibit SM19 |
· None to date |
13. |
28/06/16 |
· Discrepancy in the case of FCU (Schedule 1) of £1,239.71 between the closing balance on 30 April 2016 and the opening balance on 1 May 2016 · Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016 |
· Accepted - letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause. |
14. |
28/06/16 |
· Discrepancy in the case of JWA (Schedule 1) between the closing balance on 30 April 2016 and the opening balance on 1 May 2016 · Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016 |
· Accepted - letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause. |
15. |
28/06/16 |
· Discrepancy in the case of AWI of £898.13 between the closing balance on 29 February 2016 and the opening balance on 1 March 2016. Further discrepancy of £4,186.01 between the closing balance on 30 April 2016 and the opening balance on 1 May 2016. · Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016 |
· Accepted - letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause. |
16. |
28/06/16 |
· Variance in the case of JDE (Schedule 1) of £7,392.31 between versions one and two of the annual reports for the starting balance on 1 February 2016. · Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016 |
· Accepted - letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause. |
17. |
28/06/16 |
· Variance in the case of GLY (Schedule 1) of £15,152.08 between versions one and two of the annual reports for the starting balance on 1 February 2016. · Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016
|
· Accepted - letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause.
|
18. |
28/06/16 |
· Variance in the case of RJO (Schedule 1) of £3,674.50 between versions one and two of the annual reports for the starting balance on 1 February 2016. · Source: Review of annual reports. Letter to Matrix Deputies dated 28 June 2016
|
· Accepted - letter from Matrix Deputies dated 21 October 2016. Acknowledged that error had been made but no explanation for root cause. |
LBE REPORT OF FINDINGS MAY 2016 (page reference below are this this report)
|
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19. |
Page 8-9 |
Matrix Deputies Ltd's Cooperation with LBE's review: · Delays in providing information · No data provided · Incomplete financial information · Inability to respond to queries raised
|
· See Matrix Deputies Limited response to LBE May 2016 report |
20. |
Page 10 |
Property works - conflict of interest: links between director of Matrix Deputies Ltd (OM) and company H (supposedly run by his son) This overlaps with items 4 and 5 above. |
· See Matrix Deputies Limited response to LBE May 2016 report |
21. |
Page 10 |
Property works- value for money · Rationale for works unclear · Value for money of works unclear · Differences between invoices and COP report · No evidence of alternate quotations in accordance with Matrix Deputies Ltd's own policies · SBE's boiler- replaced twice and HC used · No evidence on post works in section |
· See Matrix Deputies Limited response to LBE May 2016 report |
22. |
Page 12 |
Property works- no record of best interests decisions on file
|
· See Matrix Deputies Limited response to LBE May 2016 report |
23. |
Page 12 |
Property works- quality of the works: · No record of MDL ensuring works completed to required standard, no post works inspection report · Complaint from tenant and managing agent in relation to JWE's property
|
· See Matrix Deputies Limited response to LBE May 2016 report |
24. |
Page 13 |
Property sales- best interests decisions: · No best interests decision on file for sale of properties for BEB, SCR, DSC and TWO · No evidence of best interests decision to accept low offer
|
· See Matrix Deputies Limited response to LBE May 2016 report |
25. |
Page 13 |
Property sales- valuations: · No evidence of 3 independent valuations to sell properties · Guidelines require deputies to keep a record of offers for properties · DSL- offer 10% below asking price, no rationale for accepting · BEB- offer £5,000 below the asking price of £120,000 · JJA- electronic bests interests decision on file 4 December 2015 by DW
|
· See Matrix Deputies Limited response to LBE May 2016 report |
26. |
Page 14 |
Property sales- transactions with company C: · Payment of 0.5% commission on sale · Conveyancing fees £495 (£350 plus £75 plus VAT disbursement, fee on aborted sale)
|
· See Matrix Deputies Limited response to LBE May 2016 report |
27. |
Page 15 |
Property sales- Proceeds of sales: · TWO- trust fund sale, no final account and trust flow · DSL- destination of sale proceeds, historic loan dispute on sale of properties · BEB- destination of sale proceeds unclear, 3 payments none of which add up and delay in payments · SCR- no bank statements |
· See Matrix Deputies Limited response to LBE May 2016 report |
28. |
Page 15 |
Property Management Company: use of company B - previous fraud investigation
|
· See Matrix Deputies Limited response to LBE May 2016 report |
29. |
Page 16 |
Property Management Company- Rates and value for money: · Retention of company R- formal contractual arrangement not evidenced · No evidence of multiple quotations · Raven's quotations are high · Lock change and gardening- was company R used? · Property visits to collect post/insurance
|
· See Matrix Deputies Limited response to LBE May 2016 report |
30. |
Page 16 |
Property Management Company- missing supporting information: · Lack of supporting documents for payments to company R · IBO- 2 x payments to company R, no supporting documentation · IHA- 2 x payments to company R, 1 invoice does not match amount · JWE- £1,206.25 transferred, no invoice · MSE- invoice for inventory, no inventory on file
|
· See Matrix Deputies Limited response to LBE May 2016 report |
31. |
Page 17 |
Property Management Company- quality of Inventories: · Inventories prepared by company R inconsistent in description and no values
|
· See Matrix Deputies Limited response to LBE May 2016 report |
32. |
Page 17 |
Deputyship fees- summary of invoices: · 419 invoices provided, from bank statements only 44 seem paid · Table 4- 5 x invoices where payments did not match amount · Table 5- 22 x payments made prior to invoices raised · Table 6- 5 x clients, insufficient links between activity and costs, mismatch between OPG reports and invoices · KAB- invoices raised but not clear if paid, fees due but not charged · SBE- professional fees on OPG report does not match billing · ECO- professional fees on OPG report does not match billing · No evidence on MDL applying for SCCO assessment · DJA- 11 x invoices, before COP order amounting to £11,500, maximum fee is £1,050
|
· See Matrix Deputies Limited response to LBE May 2016 report |
33. |
Page 22 |
P Accountants: Used for client tax returns- DW is a director- conflict of interests
|
· See Matrix Deputies Limited response to LBE May 2016 report |
34. |
Page 26 |
DW deputyship: discrepancies over DW's resignation and subsequent involvement
|
· See Matrix Deputies Limited response to LBE May 2016 report |
On behalf of the Public Guardian
Note 1 Each of the deputyship orders in schedule 1 was made by an Authorised Court Officer. In all but one the appointment was of “the authorised officer for property and affairs deputyships of Matrix Deputies.” In respect of FCU 12502246 the appointment was of “Matrix Deputies.” The Court is mindful of the terms of section 19 of the Mental Capacity Act 2005. No issue has been raised on this by any party at any stage in these proceedings. [Back]
Note 2 There is a notable lack of clarity in the applications about quite whose appointment is sought. [Back]
Note 3 Matrix Deputies made, but withdrew, an application to appeal this order. Mr Nwokeji confirmed that the intention to instruct an outside investigator was indeed known to Matrix Deputies Ltd. [Back]
Note 4 Except in respect of the persons listed in schedule 6. Those individual applications were made by London Borough of Enfield but collectively linked to the ongoing Matrix litigation by order of the court. [Back]
Note 5 Excelsior Commercial & Industrial Holdings Ltd v. Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879 [Back]