The Public Guardian's Severance Applications (Rev 1)

The Public Guardian’s Severance Applications [2016] EWHC COP 0000 Neutral Citation Number: [2017] EWCOP 10 Case Nos: 12911669 and Others IN THE COURT OF PROTECTION IN THE MATTER OF THE MENTAL CAPACITY ACT 2005 First Avenue House High Holborn, London, WC1A 9JA Judgment delivered on: 19 June 2017 Before: DISTRICT JUDGE ELDERGILL - - - - - - - - - - - - - - - - - - - - - THE PUBLIC GUARDIAN’S SEVERANCE APPLICATIONS IN THE MATTER OF: JG (Case No 12911940) DH (Case No 12911905) SH (Case No 1291136T) SHH (Case No 12922074) SG (Case No 12921347) SR (Case No 12921353) MN (Case No 12922419) RH (Case No 12922448) JG2 (Case No 12905606) JR (Case No 12922477) JF (Case No 12925291) PG (Case No 12926046) GO (Case No 12918069) GB (Case No 12946433) JB (Case No 12946312) GD (Case No 1294678T) CW (Case No 12946813) The judge has given leave for this 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 donor and members of their family 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. The names of the parties have been anonymised. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 _________________________________ JUDGMENT _________________________________ 18 applications by the Public Guardian for the severance of clauses in instruments intended to have effect as Lasting Powers of Attorney — When severance is and is not necessary — Construction of section 12 (gifts) in relation to providing for the needs of others from the donor’s estate §1 — INTRODUCTION 1. This case involves 17 electronic applications made by the Public Guardian for Lasting Powers of Attorney to be severed. §2 — STRUCTURE OF THE JUDGMENT 2. This decision is structured under the following headings: §1 — §2 — §3 — §4 — §5 — §6 — §7 — Introduction Structure of the Judgment Parties and Interested Persons Procedure and Hearings Legal Framework The Individual Cases Concluding Remarks Page 2 Page 2 Page 2 Page 3 Page 3 Page 12 Page 40 §3 — PARTIES AND INTERESTED PERSONS 3. 4. 5. In order to keep legal costs proportionate, only the Public Guardian was invited to attend a 90-minute preliminary hearing on 15 September 2016. The purpose of that hearing was to understand better the Public Guardian’s reasons for referring each case to the court and his view concerning the underlying statutory provisions before giving directions and joining other persons as parties. The persons affected by the applications were then notified of a final two-hour hearing on 18 April 2017 so that they could attend and/or be legally represented if they wished. The final hearing was attended by the Public Guardian in person who was represented by Mr Sunil Teeluck (in-house counsel) and assisted by Mr Iain Dougall. I would like to thank all of them for their very helpful written and oral representations. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 §4 — PROCEDURE AND HEARINGS 6. 7. On 5 December 2016 I sent my written preliminary view on the applications to the Public Guardian and asked him to respond. In response the Public Guardian provided me with a detailed written reply (‘Reply’) followed by a position statement (‘Position Statement’) for the hearing on 18 April 2017. §5 — LEGAL FRAMEWORK 8. 9. 10. 11. 12. 13. 14. 15. 16. The legal framework is summarised in this section of the judgment. A power of attorney is a formal arrangement whereby one person (the donor) gives another person (the attorney or donee) authority to act on the former’s behalf and in their name. The law relating to powers of attorney forms part of the general law of agency and many of the general principles lie in the common law. One fundamental principle is that an act done by a person’s agent is in general to be treated as one done by the person themselves. The extent of an attorney’s authority turns primarily on the wording of the power itself. The fact that a Lasting Power of Attorney has to be in a prescribed form does not alter this fact. In principle the authority given to the attorney and the measure of control which s/he may exercise over the donor’s affairs is a matter to be decided on by the donor in consultation with the attorney. The donor can limit the authority by adding restrictions and conditions as s/he wishes. An attorney’s primary duty is to act only within the scope of the actual authority conferred by the power and, as between donor and attorney, s/he can only bind the donor to a transaction with a third party if it is within the scope of the authority. If the attorney fails in this duty, and the donor thereby suffers loss, the attorney will usually be liable to compensate the donor. The donor may give an attorney extremely wide powers. Nevertheless there are limitations to the attorney’s authority under even a general power. An attorney must act in good faith and the effect of the fiduciary relationship between principal and agent is that the attorney must not use their power otherwise than for the benefit of the donor without the latter’s specific authority. The attorney also owes their donor a duty of care when carrying out their functions. An attorney who is not being paid must use such care and skill as s/he would in the management of their own affairs. An attorney who breaches any of their duties as attorney is personally liable to the donor for any loss thereby sustained by the estate. Section 9 of the Mental Capacity Act 2005 17. Section 9 of the 2005 Act provides as follows: The Public Guardian’s Severance Applications [2016] EWHC COP 0000 9. Lasting powers of attorney (1) A lasting power of attorney is a power of attorney under which the donor (“P”) confers on the donee (or donees) authority to make decisions about all or any of the following— (a) P’s personal welfare or specified matters concerning P’s personal welfare, and (b) P’s property and affairs or specified matters concerning P’s property and affairs, and which includes authority to make such decisions in circumstances where P no longer has capacity. (2) A lasting power of attorney is not created unless— (a) section 10 is complied with, (b) an instrument conferring authority of the kind mentioned in subsection (1) is made and registered in accordance with Schedule 1, and (c) at the time when P executes the instrument, P has reached 18 and has capacity to execute it. (3) An instrument which— (a) purports to create a lasting power of attorney, but (b) does not comply with this section, section 10 or Schedule 1, confers no authority. 18. 19. 20. 21. (4) The authority conferred by a lasting power of attorney is subject to— (a) the provisions of this Act and, in particular, sections 1 (the principles) and 4 (best interests), and (b) any conditions or restrictions specified in the instrument In this context ‘an instrument’ is a document or form that purports to create a lasting power of attorney and, by section 9(3), an instrument which does not comply with sections 9 and 10 and Schedule 1 ‘confers no authority’. Paragraph 1(1) of Schedule 1 to the 2005 Act then provides that an instrument ‘is not made in accordance with Schedule 1 ‘unless – (a) it is in the prescribed form’. By paragraph 1(3), the prescribed form is that prescribed by regulations. The relevant regulations are the Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian Regulations 2007 (SI 2007 No. 1253) — referred to below as ‘the 2007 Regulations’ — regulation 5 of which provides that ‘The forms set out in Parts 1 [Property and Financial Affairs] and 2 [Health and Welfare] of Schedule 1 to these regulations are the forms which, in the circumstances to which they apply, are to be used for instruments intended to create a lasting power of attorney’. The 2007 Regulations were amended most recently by The Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian (Amendment) Regulations 2015 (SI 2015 No. 899). The latter, referred to below as ‘The Amendment Regulations’, came into force on 1 July 2015 and introduced a number of changes. These included replacing the LPA forms in Parts 1 and 2 of Schedule 1 with new forms to be used when creating property and affairs and health and welfare LPAs. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 22. Paragraph 3 of Schedule 1 to the 2005 Act deals with irregularities in the prescribed form of an LPA: Failure to comply with prescribed form 3(1) If an instrument differs in an immaterial respect in form or mode of expression from the prescribed form, it is to be treated by the Public Guardian as sufficient in point of form and expression. (2) The court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 23. 24. 25. Paragraph 3 is concerned therefore with ‘the prescribed form’ of the ‘instrument’ and with failure to adhere to ‘the prescribed form’ rather than with conditions, restrictions and other terms inserted in an ‘instrument in the prescribed form’ by a donor. The historical origin and purpose of paragraph 3(1) can be traced back to The Law Commission Report, The Incapacitated Principal (The Law Commission, Cmnd. 8977, July 1983). The Law Commission recommended that immaterial differences in the form or content of an Enduring Power of Attorney should not affect its validity. However, the Commission did not ‘envisage the Court being empowered to validate instruments that were invalid as EPAs’ (see para. 4.10, fn. 116). In consequence, section 2(6) of the resulting Enduring Powers of Attorney Act 1985 included a ‘different in immaterial respects‘ provision identical to what is now paragraph 3(1) but not an equivalent to what is now paragraph 3(2). As the years went by this strict approach to validity came to be viewed by many as unsatisfactory and unhelpful, and when the Law Commission returned to the subject in 1995 it recommended a more flexible approach. 26. The historical origin and purpose of paragraph 3(2) traces back to paragraph 7.55 of the subsequent Law Commission report, Mental Incapacity (Law Com No 231, February 1995): (1) A dispensing power 7.55 A number of our respondents expressed concern about the rejection of EPAs on “pettifogging” technical grounds. In some cases the donor will have suffered irreversible loss of capacity by the time the rejection of registration is made, with the result that a technically valid EPA can no longer be executed. The 1985 Act does provide that a document which “differs in an immaterial respect” from the prescribed form shall be treated as sufficient. This is a useful provision of general application and we have retained it in our draft Bill. Respondents did, however, give an enthusiastic welcome to our provisional proposal for a wider power whereby a judicial forum could “cure” technical defects in a document. This would enable the court to look to the intention of the donor in executing any document which fails to conform to all the prescribed formalities. We recommend that the court should have power to declare that a document not in the prescribed form shall be treated as if it were in that form if the court is satisfied that the persons executing it intended it to create a CPA [ie LPA]. (Draft Bill, clause 17(1).) 27. 28. 29. 30. 31. 32. 33. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 The Commission’s recommendation is carried into effect by paragraph 3 which contains two related provisions. Firstly, by paragraph 3(1), the Public Guardian must treat as sufficient, and therefore register, instruments which differ ‘in form or mode of expression from the prescribed form’ only in immaterial respects. The Law Commission referred to this as ‘a saving provision’. In Re Lane (unreported, 24 January 2012), it was held that the 2007 and 2009 versions of the LPA forms differed only in immaterial respects and that the donor’s use of the old 2007 form was to be treated by the Public Guardian as sufficient in point of form and expression. Paragraph 3(1) replicates section 2(6) of the Enduring Powers of Attorney Act 1985. As regards the latter, what is and is not material was considered in relation to EPAs by Master MacFarlane, the then Master of the Court of Protection, in Practice Direction (Power of Attorney: Form) [1989] 1 WLR 311, [1989] 2 All ER 64. The relevant regulation provided that a valid EPA form must include the requisite explanatory information and all the relevant marginal notes. On several occasions, solicitors had submitted an instrument bearing no marginal notes on the basis that it had been drawn up by the solicitor after the various choices had been explained to the donor who had then selected the options he wished to include and decided the precise terms of the power. The Practice Direction stated that marginal notes could only be omitted if they were irrelevant (reg 2(1)), corresponded to an omitted or deleted alternative (reg 2(2)) or constituted an immaterial difference from the prescribed form (s2(6)). There was no provision in the regulations for differences in forms prepared by donors and solicitors. Solicitors should therefore include all marginal notes unless they came within one of the exceptions mentioned. To my mind, the defects embraced by a ‘differs in an immaterial respect in form or mode of expression’ saving provision of this kind include minor misspellings of names and addresses, entering a person’s last name in the first names box and vice-versa, omitting a person’s title (Mr, Ms, etc), using and attaching continuation sheet 1 but not crossing the ‘More replacements’ box, and so on, all of which fall squarely within the ‘pettifogging’ category of defects. The second, related, provision is that the Court of Protection may declare that an instrument which is not in the prescribed form ‘is to be treated as if it were in the prescribed form if it is satisfied that the persons executing it intended it to create a lasting power of attorney’. The Law Commission referred to this as ‘a dispensing provision’ which enables the court, by reference to the obvious intention of the donor, to cure a technical failure to conform to all the prescribed formalities. The effect is to save the instrument from section 9(3) because it is to be treated as being in the prescribed form and therefore as complying with Schedule 1. This is a wide power because the court is empowered to cure technical defects which are material in order to give effect to the donor’s intention. Necessarily, court applications under paragraph 3(2) concern instruments which the Public Guardian considers he cannot register without a court order because they appear to him to differ from the prescribed form in a material way and involve discerning the intention of the donor. 34. 35. 36. 37. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 It must be acknowledged that on the surface Senior Judge and District Judge decisions do not appear to form a completely uniform or consistent body of case law. In part that is probably because in each case the judge has discerned the particular donor’s intention from a reading of the document as a whole and the nuances will be different in each case. Heywood & Massey (9-012, R.29, August 2015) give the following examples of cases where the court has invoked paragraph 3(2) and declared that an instrument is to be treated as if in the prescribed form:         Failure by a certificate provider to confirm that he was acting independently of the donor, was not ineligible to provide a certificate, or was over 18: Re Nazran (Unreported, 27 June 2008 cf Re Phillips (Unreported, 16 May 2012). Failure by the donor to confirm that he had chosen the certificate provider himself: Re Ker (Unreported, 21 September 2009). Failure by the donor to confirm that she intended her attorneys to have authority to act on her behalf if she lacked capacity: Re Helmsley (Unreported, 30 November 2009). Failure by certificate providers to confirm that they had discussed the power with the donor in the absence of attorney (attorney had in fact been present throughout): Re Bullock (Unreported, 15 December 2009). Failure by the donor to date instrument: Re M Crook (Unreported, 16 July 2010). Failure by a witness to state their address: Re Gunn (Unreported, 8 August 2012). Where the donor put his middle name in the box for “Last Name” and omitted his surname completely: Re Baker (Unreported, 4 February 2011). Failure by the donor to include attorney’s date of birth, in particular where it is not possible to infer from other information on the form that the donor is over 18: Re John (Unreported, 14 October 2010); Re Cretney (Unreported, 24 February 2011); Re Dadd (Unreported, 17 November 2010). In my opinion, paragraph 3(2) is also sufficiently wide to embrace not ticking a particular box on the LPA form or ticking the wrong box where it is possible from the instrument as a whole to ascertain the donor’s intention. The way in which paragraph 3(2) is phrased — the instrument under consideration must have been executed — and the nature of the power itself suggests that it cannot save an instrument which has not been adequately executed. For example, one executed in the wrong order (Re Sporne, unreported, 13 October 2009; Re Hurren, unreported, 28 September 2011) or one in respect of which the donor and attorney each executed the wrong parts of the form (Re Lodge, unreported, 14 March 2011). Paragraph 3 only concerned with prescribed form 38. Paragraph 3 is concerned only with the prescribed form of an instrument. Therefore there are other kinds of defect that it cannot be relied on to rectify. For example, the The Public Guardian’s Severance Applications [2016] EWHC COP 0000 donor may have inserted bespoke conditions, restrictions or other terms in ‘the instrument’ which are unlawful or ineffective. Because this is so, paragraph 11 of Schedule 1 to the 2005 Act deals with instruments ‘not made properly or containing ineffective provision’: Instrument not made properly or containing ineffective provision 11 (1) If it appears to the Public Guardian that an instrument accompanying an application [for registration] is not made in accordance with this Schedule, he must not register the instrument unless the court directs him to do so. (2) Sub-paragraph (3) applies if it appears to the Public Guardian that the instrument contains a provision which— (a) would be ineffective as part of a lasting power of attorney, or (b) would prevent the instrument from operating as a valid lasting power of attorney. (3) The Public Guardian— (a) must apply to the court for it to determine the matter under section 23(1), and (b) pending the determination by the court, must not register the instrument. (4) Sub-paragraph (5) applies if the court determines under section 23(1) (whether or not on an application by the Public Guardian) that the instrument contains a provision which — (a) would be ineffective as part of a lasting power of attorney, or (b) would prevent the instrument from operating as a valid lasting power of attorney. (5) The court must— (a) notify the Public Guardian that it has severed the provision, or (b) direct him not to register the instrument. (6) Where the court notifies the Public Guardian that it has severed a provision, he must register the instrument with a note to that effect attached to it.1 39. It can be seen that by paragraph 11 there are three circumstances in which the Public Guardian is prevented from registering an instrument unless the court directs him to do so: 1. 2. 3. The instrument is not made in accordance with Schedule 1: para 11(1) The instrument contains a provision which would be ineffective as part of a lasting power of attorney: para 11(2)(a) The instrument contains a provision which would prevent the instrument from operating as a valid lasting power of attorney: para 11(2)(b) 1) The instrument is not made in accordance with Schedule 1: para 11(1) Note that severance applications in relation to paragraph 11(4) are to be dealt with by the court under section 23(1) of the 2005 Act. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 Without a direction of the court, the Public Guardian must not register an instrument which appears to him is not made in accordance with the Schedule. By paragraph 1(1) of the Schedule, an instrument is not made in accordance with the Schedule in three circumstances: a) b) c) It is not in the prescribed form: para 1(1)(a); It does not comply with paragraph 2 of the Schedule: para 1(1)(b); The prescribed requirements in connection with its execution have not been satisfied: para 1(1)(c). With regard to (a), it has already been seen that paragraph 3(1) allows the Public Guardian to ignore immaterial differences and paragraph 3(2) enables the court to rectify instruments which are materially different from the prescribed form if satisfied that the persons executing the instrument intended it to create a lasting power of attorney. However, paragraph 1 lists two other categories of defect — failure to comply with paragraph 2 and improper execution — that fall outside this dispensing provision. By sections 22 and 23, which are the court’s only powers in relation to the second and third kinds of defect, the court may determine: a) b) any question relating to whether one or more requirements for the creation of a lasting power of attorney have been met (s22(2)(a)), and any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). Paragraph 2 states that an instrument is required to include the following ‘content’: a) b) c) d) e) Prescribed information about the purpose of the instrument and the effect of a lasting power of attorney. A statement by the donor that he has read this prescribed information or had it read to him and intends the authority conferred under the instrument to include authority to make decisions on his behalf in circumstances where he no longer has capacity. A statement by the donor naming those he wishes to be notified of any application for registration (or alternatively that there are no persons he wishes to be notified), and compliance with the regulations concerning such notification. A statement by each donee that he has read the prescribed information or had it read to him and understands the duties imposed on a donee by sections 1 (the principles) and 4 (best interests). A capacity certificate (in the prescribed form) by a prescribed person stating that in his opinion the donor understands the purpose of the instrument and the scope of the authority conferred under it, that no fraud or undue pressure was used to induce the donor to create the LPA and that there is nothing else which prevents an LPA from being created. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 The underlying purpose of paragraph 2 is to ensure that donors understand exactly what choices they have, what authority they are conferring on their attorney(s) and the effect of creating the LPA. The attorney(s) too should understand precisely what it means and what procedure needs to be followed. With regard to an instrument’s execution, the prescribed requirements are those prescribed by regulations (see Schedule 1, para 1(3)(a)). The relevant regulation is regulation 9 of the 2007 Regulations (as amended by the 2015 Amendment Regulations). This provides that an instrument intended to create a lasting power of attorney ‘must be executed in accordance with this regulation’ which requires that: a) b) c) d) The donor must read (or have read to him) the prescribed information and, as soon as practicable after this has happened, must then complete sections 1 to 7 of the instrument (or direct another person to do so); and then sign section 9 (Property and financial affairs LPA) or sections 5 and 9 (Health and welfare) in the presence of a witness. As soon as reasonably practicable after the donor has done all of this, the person providing the LPA certificate must complete the LPA certificate and sign it. As soon as reasonably practicable after the certificate provider has done this, each donee must read (or have read to him) all the prescribed information, complete section 11 of the instrument and (unless the instrument is signed at his direction) sign Section 11 in the presence of a witness. The donor may not witness any other signature; a donee may not witness any signature other than that of another donee; and each witness must give his full name and address. In the following cases, the court found that the failure to comply with Schedule 1 was fatal: a) b) Failure to execute the various parts of the form in the prescribed order: Re Sporne (Unreported, 13 October 2009). The donor not having read to him all of the prescribed information: Re H (Unreported, 24 January 2012). c) Failure of a witness to sign his own name: Re Smith (Unreported, 1 March 2012). Where an instrument appears not to be made in accordance with the Schedule, so that the Public Guardian must not register it without a court direction, there are two ways forward. If the donor still has capacity he can complete a new LPA. Alternatively, the donor or donee may apply to the court for a direction directing the Public Guardian to register the instrument. The court’s powers are set out in paragraph 3(2), if the problem is the form of the instrument, and in sections 22 and 23 of the 2005 Act. 2) The instrument contains a provision which would be ineffective as part of a lasting power of attorney: para 11(2)(a) Heywood and Massey (9-017, R.30, March 2016) gives as an example a property and affairs LPA which purports to confer additional powers on the donee relating to the donor’s personal welfare, or vice-versa. Other examples include clauses which purport The Public Guardian’s Severance Applications [2016] EWHC COP 0000 to permit a donee to make gifts in contravention of the statutory restrictions set out in section 12; authorise a donee to do something which a donee cannot do for a donor (e.g., to make a Will or vote); or permit a donee to consent to a marriage on the donor’s behalf. Perhaps surprisingly, where an instrument contains an ineffective provision the court procedure is different from that which applies in the case of instruments not made in accordance with Schedule. There is no need for the donor or donee to apply to the court for a determination. Rather, paragraph 11(3) requires the Public Guardian to apply to the court for it to determine the matter under section 23(1) — by which the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one — and, pending the court’s determination, the Public Guardian must not register the instrument. If the court agrees that the instrument contains a provision which would be ineffective as part of a lasting power of attorney, or would prevent the instrument from operating as a valid lasting power of attorney, it must either notify the Public Guardian that it has severed the provision or direct him not to register the instrument. The purpose of ‘severance’ is to sever the bad from the good, putting a ‘blue pencil’ through that part of the LPA that is ineffective or illegal and leaving the remainder of the LPA to stand. Part 3 of Schedule 1 contains similar severance provisions in respect of already registered LPAs: see paragraphs 19 and 24. 3) The instrument contains a provision which would prevent the instrument from operating as a valid lasting power of attorney: para 11(2)(b) Heywood and Massey (9-017, R.30, March 2016) gives as an example of an instrument that contains a provision which would prevent it from operating as a valid LPA that of a power of attorney which purports to appoint three donees to act jointly but then provides that ‘any two may sign’: see eg Re E (Enduring Power of Attorney) [2001] Ch 364. The process and procedure in such cases is identical to that which applies where it appears to the Public Guardian that an instrument contains an ineffective provision. The Public Guardian must apply to the court (‘make a severance application’ in the jargon). If the court agrees that the instrument contains a provision which would prevent the instrument from operating as a valid lasting power of attorney, it must either notify the Public Guardian that it has severed the provision or direct him not to register the instrument. The applications in this case 40. 41. All of the applications in this case are brought by the Public Guardian as severance applications under paragraph 11(3). Before turning to the individual cases it is important to emphasise that the Act is an enabling Act and the Public Guardian and the court should be as enabling as is legally The Public Guardian’s Severance Applications [2016] EWHC COP 0000 possible, a point made by Nugee J in Miles & Bill v The Public Guardian [2015] EWHC 2960 (Ch) at para 19: ’19 … it does seem to me that it is right that the Act should be construed in a way which gives as much flexibility to donors to set out how they wish their affairs to be dealt with as possible, the Act being intended to give autonomy to those who are in a position where they can foresee that they may in the future lack capacity to specify who it is that they wish to act for their affairs.’ §6 — THE INDIVIDUAL CASES 42. I now turn to the individual cases referred to the court. MC (Case No 12911669) 43. Section 7 of the new LPA forms introduced by the Amendment Regulations on 1 July 2015 is headed ‘Preferences and instructions’. The section contains two boxes which the donor can but need not complete (‘Most people leave this page blank’). One of them is headed ‘Preferences’ (‘Your attorneys don’t have to follow your preferences but should keep them in mind’) and the other ‘Instructions’ (‘Your attorneys will have to follow your instructions exactly … If you give instructions that are not legally correct they would have to be removed before your LPA is registered’). 44. Section 7 of the new forms is designed to give expression to section 9(4) of the 2005 Act. This provides as follows: 9(4). The authority conferred by a lasting power of attorney is subject to— (a) The provisions of the Act and, in particular sections 1 (the principles) and 4 (best interests), and (b) Any conditions or restrictions specified in the instrument. 45. 46. 47. 48. It is always risky to depart from the statutory language when drafting forms and the adoption of the headings ‘Preferences’ and ‘Instructions’ in the forms introduced by the Amendment Regulations is potentially misleading. The term ‘instructions’ is not synonymous with ‘conditions or restrictions’. Equally, the term ‘Preferences’ is not synonymous with ‘best interests’ or a donee’s duty when deciding what is in the donor’s best interests to consider anything written in section 7 of the form concerning the donor’s wishes, feelings, beliefs and values, and the other factors to be considered by their donee(s): see section 4(6) of the 2005 Act. The Public Guardian submits that the following words in the instructions box within section 7 of this instrument require severing because they ‘are incompatible with the nature of the appointment of the attorneys to act jointly and severally’: ‘Any financial decisions up to the value of £150.00 can be made independently by my attorneys. However any financial decisions over this amount must be agreed upon by both my attorneys.’ The Public Guardian’s Severance Applications [2016] EWHC COP 0000 49. 50. 51. 52. The Public Guardian accepts that it is lawful for a donor to authorise their attorneys to act jointly and severally in respect of some decisions, and jointly in respect of others. The Public Guardian’s objection is that the donor ticked the box on page 4 which states that her attorneys are to act jointly and severally (presumably thinking this meant that some decisions were to be joint and some several), rather than the box lower down the page to the effect that some decisions are to be made jointly and some jointly and severally. However, the donor’s intention is clear because section 7 is headed ‘Instructions (Your attorneys will have to follow your instructions exactly)’ and MC’s instruction is, ‘Any financial decisions up to the value of £150.00 can be made independently by my attorneys. However any financial decisions over this amount must be agreed upon by both my attorneys.’ This is a condition or restriction which only makes sense if the donor intended the authority conferred to be that her donees are authorised to make some decisions jointly and some jointly and severally. The question in this case is what weight to give to the fact that the wrong box on page 4 has been ticked and the answer, in my opinion, is not much. It was simply an error in completing the form. I do not think that the donor’s intention is ambiguous and to me it is wrong in principle to excise the condition or restriction in section 7 when it is the box on page 4 which is the error. 53. My order is therefore as follows: UPON considering the Application of the Public Guardian in respect of a Lasting Power of Attorney for Property and Financial Affairs executed by MC on 24 August 2015 in which she appointed EGB and AEC to be her attorneys (‘the instrument’) WHEREAS 1. Paragraph 3(2) of Schedule 1 to the Mental Capacity Act 2005 provides that the court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 2. Section 23(1) of the Mental Capacity Act 2005 provides that the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). THE COURT DECLARES THAT 3. The meaning and effect of the instrument is that MC’s attorneys are authorised by the donor to make financial decisions up to a value of £150.00 jointly and severally but may only make financial decisions above this amount jointly. AND ORDERS AS FOLLOWS 4. The instrument is to be treated as if it is in the prescribed form and as if the donor had ticked the box on page 4 of the instrument to the effect that some decisions are The Public Guardian’s Severance Applications [2016] EWHC COP 0000 to be made by her attorneys jointly and other decisions jointly and severally rather than the box on that page which states they are to act jointly and severally in all matters. 5. The Court directs the Public Guardian to register the instrument. 6. A copy of this Order shall be affixed by the donor and attorneys to the registered instrument and to all copies of the said instrument so that third parties have knowledge of this Order and the legal effect of the instrument. JG (Case No 12911940) 54. 55. 56. 57. 58. The Public Guardian submits that the following words in the preferences box of section 7 of the instrument require severing because they are ‘incompatible with the requirement in section 1(5) of the MCA that any act done or decision made must be done or made in the donor's best interests’: ‘I would like my attorneys to consider Thomas G (my son) as my main priority when making decisions.’ I noted above that the wording of section 7 of the LPA form departs from the statutory wording. As concerns ‘preferences’, the section states that ‘You can tell your attorneys how you’d prefer them to make decisions or give them specific instructions … Your attorneys don’t have to follow your preferences but they should keep them in mind …’ In Ms JG’s case, her preferences are: ‘I would like my attorneys to consider Thomas G (my son) as my main priority when making decisions.’ As concerns ‘instructions’, section 7 of the form states that ‘You can … give [your attorneys] specific instructions which they must follow when making decisions … Your attorneys will have to follow your instructions exactly … Be careful – if you give instructions that are not legally correct they would have to be removed before your LPA could be registered’. In Ms G’s case, her instructions are: None [thick diagonal black line across the box] and therefore she has not imposed any conditions or restrictions on the authority of the donees which prevent the instrument from operating as a valid lasting power of attorney or which are ineffective as part of a lasting power of attorney. All she has done, very sweetly, is to specify that she would ‘like’ her donees to consider her son as her main priority. The Act entitles her to make a written statement concerning her wishes and feelings (s.4(6)(a)) which the donees must consider when deciding what decision is in her best interests. She has done no more than exercise that right. It is also, in my view, a misunderstanding of the Act to take the view that acting in an incapacitated person’s best interests in some way precludes giving any weight to the interests of other persons dear to them. I tried to make that point in paragraph 3.27 of Court of Protection Handbook: A User’s Guide (Ed. Ruck-Keene, LAG, 2014) and therefore repeat it in this context: If a person lacks capacity to make a decision, so that someone else must make it for them, applying the best interests requirement does not mean that other people’s The Public Guardian’s Severance Applications [2016] EWHC COP 0000 interests are always irrelevant and must be given no weight. As an example, almost all parents want their children to be happy and free from worry. The Court of Protection may therefore authorise making a gift from the incapacitated person’s funds to a child ... If the incapacitated person still had capacity to make the gift they would wish to help in this way; and it is in their best interests to do on their behalf that which they themselves would obviously do if they could. Similarly, most people with capacity consider and take into account the wishes, feelings and needs of their spouse or partner when making decisions that affect them. It is in their best interests to have regard to these historic genuine feelings and values if they can no longer hold or express them. 59. My determination under section 23(1) of the meaning and effect of the words in section 7 is that they are not ineffective and do not prevent the instrument from operating as a valid LPA. As a result, I shall direct the Public Guardian to register the instrument. DH (Case No 12911905) 60. 61. The Public Guardian submits that the following words in the ‘preferences’ box within section 7 of the instrument require severing because they ‘seek to extend the scope of gifting authority given to the attorneys under section 12 of the MCA’: ‘I would like my Grand children to be each given, £1,000, I would like any funds left over, to be equally shared between my children S, P and C.’ Unless the words are severed, does that statement of wishes prevent the instrument from operating as a valid LPA or are those words ineffective as part of the LPA or does it? The Public Guardian says so: ‘The Public Guardian is accordingly referring this matter to the court, and asks the court to sever the words set out below so that the instrument may be registered as a valid LPA.’ 62. The Public Guardian relies on section 12(2)(a) of the 2005 Act which states that: 12 Scope of lasting powers of attorney: gifts (1) Where a lasting power of attorney confers authority to make decisions about P's property and affairs, it does not authorise a donee (or, if more than one, any of them) to dispose of the donor's property by making gifts except to the extent permitted by subsection (2). (2) The donee may make gifts— (a) on customary occasions to persons (including himself) who are related to or connected with the donor, or (b) to any charity to whom the donor made or might have been expected to make gifts, if the value of each such gift is not unreasonable having regard to all the circumstances and, in particular, the size of the donor's estate. (3) “Customary occasion” means— The Public Guardian’s Severance Applications [2016] EWHC COP 0000 (a) the occasion or anniversary of a birth, a marriage or the formation of a civil partnership, or (b) any other occasion on which presents are customarily given within families or among friends or associates. (4) Subsection (2) is subject to any conditions or restrictions in the instrument. The Public Guardian also points out that in his instrument the donor does not state that the gifts (including the gift of the residue to his children) are being made on a customary occasion. I understand and to some extent share the Public Guardian’s concern. However, it is necessary also to take into account section 23(4) of the 2005 Act. This states that, ‘The court may authorise the making of gifts which are not within section 12(2) (permitted gifts).’ In other words, the statutory framework is not that a donee may not make a gift or gifts of kind Mr DH wishes his donees to make from his property but that such a gift requires a court application and order authorising it as being in his best interests before it can be made. In my view, because Mr DH expresses all of this as a wish in the preferences box (what he would ‘like’), rather than as a binding condition on his donees in the instructions box (what they must do), it does not require severing. It is a statement of his wishes which the donees must consider when making decisions on his behalf. At the relevant time they will need to decide whether to apply to the court for authority to carry out the wishes expressed by him in what is a section 4(6) written statement on the basis that such gifts are in his best interests. Given that he has expressed a wish to give away all of his liquid funds, the court (and the donees) will need to consider at the time what weight to give to that statement when deciding whether such gifts and a court application are in his best interests, particularly given the ambiguity as to precisely what he intended by his statement. My determination under section 23(1) of the meaning and effect of the words in section 7 is that they are not ineffective and do not prevent the instrument from operating as a valid LPA. As a result, I shall direct the Public Guardian to register the instrument. Although I take that view, I do share the concern that in some of the home-made LPA cases the donor may be unclear as to the terms of sections 12 and 23. When registering such an LPA it would be helpful for the Public Guardian to remind the donor and donees that a court application will be necessary in order to give effect to such wishes. Obviously if the donor still has capacity in relevant matters, s/he can consider making gifts now or placing money in trust as alternatives. 63. 64. 65. 66. 67. 68. 69. As a final point, the instructions in section 7 of Mr H’s instrument may be more problematic although the Public Guardian does not seek to sever them: ‘My attorneys must ensure that PH receives £10,000 from my life insurance policies. My attorneys must ensure my funeral service is a cremation only and provide food and drink accordingly at a venue of their choice. My ashes to be placed in a casket next to Mrs NH’ The Public Guardian’s Severance Applications [2016] EWHC COP 0000 70. These conditions may be ineffective as part of an LPA insofar as they relate to Mr H’s financial affairs post-death. However, I am not asked to determine that. SH (Case No 1291136T) 71. 72. Ms SH appointed a number of attorneys jointly and severally. The Public Guardian submits that the following words in the instructions box within section 7 of the instrument require severing because they are ‘incompatible with the nature of the appointment of the attorneys to act jointly and severally’: ‘While my attorneys are authorised to act jointly and severally I specifically direct that all decisions must be made by at least two of my attorneys and that no attorney has the power to make decisions individually.’ 73. I agree that the words in section 7 require severing although the legal position is arguably unsatisfactory (see the JF case below). SHH (Case No 12922074) 74. 75. 76. Ms H appointed joint and several attorneys for personal welfare decisions. In section 5 of the instrument (‘Life-sustaining treatment’), she authorised her attorneys ‘to give or refuse consent to life-sustaining treatment on my behalf’. This is Option A. Option B is that the donor does not give their attorneys authority ‘to give or refuse consent to life-sustaining treatment on my behalf’. The donor then completed the preferences box of section 7 (‘Preferences and Instructions’) as follows: ‘If I am: (A) Unconscious and it is unlikely that I shall ever regain consciousness; or Suffering from an incurable or irreversible condition that will result in my death within a relatively short time; or So severely physically or mentally disabled that I shall be totally dependant on others for the rest of my life; (B) (C) Then (i) I would wish my attorneys to ensure that any medical treatment (which is to be regarded as including artificial feeding/hydration and ventilation and all that these procedures involve) to be limited to keeping me comfortable and free from pain (ii) I would wish my attorneys to refuse all other medical treatment or surgical treatment if: (a) Its burdens and risks outweigh its physical benefits; The Public Guardian’s Severance Applications [2016] EWHC COP 0000 (b) (c) It involves any research or experimentation which is likely to be of little or no therapeutic value to me; or It will prolong my life or postpone the actual moment of my death with no further benefit to me. (iii) If I am on a life support machine I wish that the machine be switched off. If I am in a coma I do not wish to be resuscitated. On reading the whole LPA form, the person who witnessed SHH sign the Option A box of section 5 was her solicitor, LD. However, she did not print her name and address next to her own signature in the space provided for the witness to do so. She did do so elsewhere on the LPA form, so her printed name and address are accurately recorded on the face of the instrument. Because of this failure to execute Option A properly, the Public Guardian states that no Option A authority to give or refuse consent to life-sustaining treatment was given to the attorneys ‘and as a result the chosen option with regard to life sustaining treatment defaults to Option B [the donor does not give her attorneys authority to give or refuse consent to life-sustaining treatment on her behalf]. Because Option B applies, it is necessary to sever the emboldened and underlined words in paragraphs (i) and (ii) of section 7 (‘my attorneys to ensure’; ‘my attorneys’: see relevant passage above) on the ground they are incompatible with Option B. Given that LD twice printed her name and address next to her signature elsewhere on the LPA form, I take the view that her omission to print her name and address next to her signature in section 5 is a defect in the prescribed form of the instrument that falls within paragraph 3. It is material given that it relates to life-sustaining treatment but can be rectified by the court under paragraph 3(2) given her clear intention. I would also make an appropriate declaration under section 23 in terms of the meaning or effect of the instrument, and in particular that Option A has effect. 77. 78. 79. 80. My order is therefore as follows: UPON considering the Application of the Public Guardian in respect of a Lasting Power of Attorney for Health and Welfare executed by SHH on 29 April 2015 in which she appointed RJH and GNH jointly and severally to be her attorneys (‘the instrument’) WHEREAS 1. Paragraph 3(2) of Schedule 1 to the Mental Capacity Act 2005 provides that the court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 2. Section 23(1) of the Mental Capacity Act 2005 provides that the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). 3. Witness LD omitted to state her full name and address on page 6 of the instrument (‘Life-sustaining treatment’) but did state her full name and address on pages 10 and 11 of the instrument. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 THE COURT DECLARES THAT 4. Notwithstanding witness LD’s omission to state her full name and address on page 6 of the instrument (‘Life-sustaining treatment’) the meaning and effect of the instrument is that Option A has effect in this case and that once the instrument has been registered SHH attorneys are jointly and severally authorised by the donor to give or refuse consent to life-sustaining treatment on her behalf. AND ORDERS AS FOLLOWS 5. The Court directs the Public Guardian to register the instrument. 6. The instrument is to be treated as if witness LD had stated her full name and address on page 6 of the instrument (‘Life-sustaining treatment). 7. For the avoidance of doubt, the attorneys must consider SHH’s preferences as set down by her in section 7 of the instrument before making any decision(s) concerning life-sustaining treatment. 8. A copy of this Order shall be affixed by the donor and attorneys to the registered instrument and to all copies of the said instrument so that third parties have knowledge of this Order and the legal effect of the instrument. SG (Case No 12921347) 81. The donor appointed her son, TWG, as her sole attorney for property and affairs and his wife, VVVE, as replacement attorney. 82. In the instructions box of section 7 of the instrument, the donor wrote: ‘Whereas I have appointed VVVE to be my Replacement Attorney in the event of my son TWG being unable to continue to act as my Attorney, I DIRECT that my Replacement Attorney VVVE shall only act as my Replacement Attorney if she remains legally married to my son TWG at the point he becomes unable to act as my Attorney.’ 83. 84. The donor repeated the instructions in the ‘How replacement attorneys step in and act’ box on continuation sheet 2. The Public Guardian has applied for the above words to be severed ‘because it is not in line with section 13(6)(a) to (d) of the MCA 2005. The dissolution or annulment of marriage between the attorneys is not one of the 5 reasons in which an attorney’s appointment would cease.’ 85. The relevant sections of the 2005 Act are sections 10(8) and 9(4)(b) which provide as follows: 10(8) An instrument used to create a lasting power of attorney— The Public Guardian’s Severance Applications [2016] EWHC COP 0000 (a) cannot give the donee (or, if more than one, any of them) power to appoint a substitute or successor, but (b) may itself appoint a person to replace the donee (or, if more than one, any of them) on the occurrence of an event mentioned in section 13(6)(a) to (d) which has the effect of terminating the donee's appointment. 9(4) The authority conferred by a lasting power of attorney is subject to— … (b) Any conditions or restrictions specified in the instrument. Section 13(6)(c) is concerned with the position of an existing donee, not a replacement donee (see the wording of s13(7)a)), and with marriages between donor and donee rather than the marriages of donees. The effect of section 13 is therefore to terminate a donee’s appointment and to revoke the LPA should the donor and donee divorce unless either the instrument provides otherwise or the donee can be and is replaced ‘under the terms of the instrument’. Section 9(4) enables a donor to insert conditions and restrictions in the instrument. By definition, the insertion of a condition makes an act or event conditional upon the specified condition being met. Nowhere in the Act is it stated that the terms of the instrument cannot include a condition which must be satisfied before a named person replaces a donee whose appointment has been terminated under section 13(6)(a) to (d). For example, one might insert a condition that a solicitor named to replace a donee on the occurrence of such an event must still be in practice or that the person named as a replacement must still be resident in England and Wales. Similarly, I can see nothing objectionable in inserting a condition that one’s daughter-in-law must retain a family relationship through marriage with the donor for the replacement appointment to take effect. That approach seems to me to accord with the general tenor of Nugee J’s remarks in Miles & Beattie v The Public Guardian [2015] EWHC 2960 (Ch) at para 19: ‘… it is right that the Act should be construed in a way which gives as much flexibility to donors to set out how they wish their affairs to be dealt with as possible, the Act being intended to give autonomy to those who are in a position where they can foresee that they may in the future lack capacity to specify who it is that they wish to act for their affairs.’ 86. 87. 88. 89. 90. Accordingly, I have decided that the condition does not need severing. SR (Case No 12921353) 91. The Public Guardian submits that the following words in the preferences box within section 7 of the instrument require severing because they are ‘incompatible with the nature of the appointment of the attorneys to act jointly and severally’: ‘Can act severally except on investment decisions of £50,000 or more where they should act jointly’ 92. The Public Guardian’s objection in this case therefore appears to be the same as in the case of MC (see above). The only real difference is that SR’s statement has been placed The Public Guardian’s Severance Applications [2016] EWHC COP 0000 in the preferences (wishes and feelings) box rather than the instructions (conditions) box in section 7, which was what MC did. 93. 94. And that does make a difference. As drafted, the donor has authorised her attorneys to act jointly and severally and simply expressed a preference (wish) that they endeavour to make investment decisions of £50,000 or more jointly. The donees are legally authorised therefore to act independently when making investment decisions of £50,000 or more provided that they comply with section 4 (i.e. they act in the donor’s best interests, which involves considering inter alia this written statement of wishes). That is not incompatible with a joint and several LPA. 95. For that reason I have decided that the condition does not need severing. MN (Case No 12922419) 96. The donor appointed one attorney, and two replacement attorneys jointly and severally. She directed that the LPA be effective as soon as it is registered. The Public Guardian submits that the following words in the ‘preferences’ box within section 7 of the instrument require severing because they ‘seek to extend the scope of gifting authority given to the attorneys under section 12 of the MCA’: ‘I would also like my replacement attorneys to consider making monthly assistance payments, in the region of £50 to my Granddaughter MIA, whilst she is in full time education and they may also consider assisting her with the repayment of education loans, up to a maximum of £4,000 per annum, including the monthly payments. I would also like my replacement attorneys to consider continuing the monthly assistance payments and annual payments to LA in relation to his education loan repayment fund, up to a maximum of £5,000 per annum, including the monthly payments.’ 97. For some reason the Public Guardian does not seek to sever the final paragraph which follows on from that quoted: ‘Whilst I am not making any payments to my son KS at the time of making this power, if there has been a reconciliation between myself and KS in the future, I would like my replacement attorneys to consider making gifts to KS at the same rate and frequency as my other children.’ 98. 99. This case is therefore similar to that of DH (see above) insofar as the court may authorise the making of gifts which are not within section 12(2) (permitted gifts). The statutory framework is not that a donee may not make a gift or gifts outside the terms of section 12 but that such gifts require a court application and order authorising them as being in the donor’s best interests before they can be made. In my view, because MN expresses all of this as a wish in the preferences box (what she would ‘like’), rather than as a binding condition on her donees in the instructions box (what they must do), the words do not require severing even if they constitute gifting in excess of that permitted by section 12. What would be required if these are gifts is a court application. 100. For that reason I have decided that the words do not need severing. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 101. MN’s words in the ‘preferences’ box within section 7 do raise a second issue which is not relevant to whether the words require severing but is relevant to whether or not in future her attorneys must apply to court before they can carry out her stated wishes. They must do so if the payments she has in mind constitute gifts in excess of those permitted by section 12, but are they? This question is considered below in relation to PG. RH (Case No 12922448) 102. In this health and welfare case, RH ticked the ‘Jointly for some decisions, jointly and severally for other decisions’ box in section 3 on page 4. The ‘instructions’ box in section 7 then includes the following words: I consent to the disclosure to my attorneys of all relevant information concerning me. My attorneys must not decide that I am to move into residential care unless my doctor says that I can no longer live independently. 103. He then completed ‘Continuation Sheet 2 — Additional Information’ to provide additional information concerning decisions which his donees should make jointly: My attorneys must act jointly in relation to decisions about where I live and may act jointly and severally for everything else. 104. The Public Guardian noted that some sections of the form had been executed in the wrong order. Following re-execution, the dates on which the relevant sections were executed seem to me to be as follows: Donor Section 5 Life-sustaining treatment Donor Section 9 Donor’s statement Replacement donee 1 Section 11 Donee’s statement Donor Continuation Sheet 2 Additional Information Certificate Section 10 Certificate provider’s statement Donee 1 Section 11 Donee’s statement May 24 May 30 May 30 May 30 May 28 July 22 The Public Guardian’s Severance Applications [2016] EWHC COP 0000 Donee 2 Section 11 Donee’s statement Replacement donee 2 Section 11 Donee’s statement Application Section 15 Application to register the instrument July 4 June 29 July 105. 106. 107. If I understand it correctly, the Public Guardian’s submission is that the continuation sheet is invalid because it was executed by the donor on 30 May 2016, six days after he had signed sections 5 (life-sustaining treatment) and 9 (donor’s statement) of the form. The effect, says the Public Guardian, is that the donor has given no instructions as to which decisions are to be made jointly and which may be made jointly and severally. The default statutory position is that donees act jointly. Therefore, the cross in the box in section 3 of the form needs to be severed by the court because it indicates the donees are to act ‘Jointly for some decisions, jointly and severally for other decisions’. Once severed, the form takes effect as a joint appointment. The legal issue is what to make of the fact that the continuation sheet was signed by the donor six days after he signed sections 5 (life-sustaining treatment) and 9 (donor’s statement) of the form? Is the error beyond rectification? Sections 5 and 9 and the continuation sheet were all signed on or before the date when certificate provider gave and signed his certificate, the continuation sheet does not require a witness as drafted, and in my view the intention of the donor is clear. On balance I would direct registration on the basis that the donor added the additional information before he had the instrument certified. 108. I shall make the following order: UPON considering the Application of the Public Guardian in respect of a Lasting Power of Attorney for Health and Welfare executed by RH on 24 May 2015 in which he appointed GH and BH to be his attorneys (‘the instrument’). WHEREAS 1. Paragraph 3(2) of Schedule 1 to the Mental Capacity Act 2005 provides that the court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 2. Section 23(1) of the Mental Capacity Act 2005 provides that the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). THE COURT DECLARES THAT The Public Guardian’s Severance Applications [2016] EWHC COP 0000 3. Notwithstanding the fact that the donor did not sign Continuation sheet 2 until 30 May 2015 the instrument is to be treated as if it is in the prescribed form. 4. The meaning and effect of the instrument is that RH’s attorneys are authorised by the donor to make all health and welfare decisions jointly and severally other than decisions about where he lives which must be made jointly. AND ORDERS AS FOLLOWS 5. The Public Guardian is directed to register the said instrument. 6. A copy of this Order shall be affixed by the donor and attorneys to the registered instrument and to all copies of the said instrument so that third parties have knowledge of this Order and the legal effect of the instrument. JG2 (Case No 12905606) 109. 110. 111. 112. 113. By her instrument the donor sought to authorise her donees jointly and severally to make decisions concerning her property and affairs. The Public Guardian submits that the following words in the instructions box within section 7 of the instrument require severing because they ‘are incompatible with the nature of the appointment of the attorneys to act jointly and severally’: ‘My Attorneys must make decisions jointly in respect of the sale of my property at X Lane, Leicester … including any property that I may be residing in that is considered as my main residence, jointly.’ The Public Guardian accepts that it is lawful for a donor to authorise their attorneys to act jointly and severally in respect of some decisions and jointly in respect of others. The objection is that the donor ticked the box on page 4 which states that her attorneys are to act jointly and severally (presumably thinking this meant that some decisions were joint and some several), rather than the box lower down the page to the effect that some decisions would be made jointly and some jointly and severally. However, the donor’s intention is clear because section 7 is headed ‘Instructions (Your attorneys will have to follow your instructions exactly)’ and JG2’s instruction is, ‘My Attorneys must make decisions jointly in respect of the sale of my property at X Lane, Leicester … including any property that I may be residing in that is considered as my main residence, jointly.’ The material facts are therefore identical to the MC case. The question in this case is what weight to give to the fact that the wrong box on page 4 has been ticked and the answer, in my view, is not much. It was simply an error in completing the form. I do not think that the donor’s intention is ambiguous and to me it is wrong in principle to excise the condition or restriction in section 7 when it is the box on page 4 which is the error. 114. My order is therefore as follows: The Public Guardian’s Severance Applications [2016] EWHC COP 0000 UPON considering the Application of the Public Guardian in respect of a Lasting Power of Attorney for Property and Financial Affairs executed by JG2 on 14 January 2016 in which she appointed JMR and DGB to be her attorneys (‘the instrument’) WHEREAS 1. Paragraph 3(2) of Schedule 1 to the Mental Capacity Act 2005 provides that the court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 2. Section 23(1) of the Mental Capacity Act 2005 provides that the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). THE COURT DECLARES THAT 3. The meaning and effect of the instrument is that JG2’s attorneys are authorised to make all decisions concerning the donor’s property and financial affairs jointly and severally other than decisions in respect of the sale of her property at X Lane Leicester and decisions in respect of the sale of any other property which she occupies as her main residence in the future which must be made jointly. AND ORDERS AS FOLLOWS 4. The Public Guardian is directed to register the said instrument. 5. The instrument is to be treated as if in the prescribed form and as if the donor had ticked the box in Section 3 on page 4 of the instrument to the effect that some decisions are to be made by her attorneys jointly and other decisions jointly and severally rather than the box on that page which states they are to act jointly and severally in all matters. 6. A copy of this Order shall be affixed by the donor and attorneys to the registered instrument and to all copies of the said instrument so that third parties have knowledge of this Order and the legal effect of the instrument. JR (Case No 12922477) 115. The donor ticked the box in Section 3 of page 4 which states that her two attorneys are jointly and severally authorised to make health and welfare decisions on her behalf. In section 5 of the LPA form (‘Life-sustaining treatment’), she authorised her attorneys ‘to give or refuse consent to life-sustaining treatment on my behalf’. This is Option A. 116. The donor then wrote the following words in the instructions box within section 7 (‘Your attorneys will have to follow your instructions exactly’): ‘If it is case of making a life or death decision then please make that decision together’. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 117. 118. The Public Guardian asks the court to sever the words in the instructions box because they are incompatible with the nature of the appointment of the attorneys to act jointly and severally. Again, the donor’s intention is clear. The question in this case is what weight to give to the fact that the wrong box on page 4 has been ticked and again the answer, in my view, is not much, the more so given that this is a life or death matter. It was simply an error in completing the form and it is far more important to give weight to the donor’s intention that both donees agree on life or death decisions than it is to give weight to ticking the wrong box. 119. I therefore make the following order: UPON considering the Application of the Public Guardian in respect of a Lasting Power of Attorney for Health and Welfare executed by JR on 9 June 2016 in which she appointed JDR and MR to be her attorneys (‘the instrument’). WHEREAS 1. Paragraph 3(2) of Schedule 1 to the Mental Capacity Act 2005 provides that the court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 2. Section 23(1) of the Mental Capacity Act 2005 provides that the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). THE COURT DECLARES THAT 3. The meaning and effect of the instrument is that JR’s attorneys are authorised by the donor to make all health and welfare decisions jointly and severally other than decisions concerning life-sustaining treatment which must be made jointly. AND ORDERS AS FOLLOWS 4. The Public Guardian is directed to register the said instrument. 5. The instrument is to be treated as if in the prescribed form and as if the donor had ticked the box in Section 3 on page 4 of the instrument to the effect that some decisions are to be made by her attorneys jointly and other decisions jointly and severally rather than the box on that page which states they are to act jointly and severally in all matters. 6. A copy of this Order shall be affixed by the donor and attorneys to the registered instrument and to all copies of the said instrument so that third parties have knowledge of this Order and the legal effect of the instrument. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 JF (Case No 12925291) 120. 121. 122. 123. 124. The donor appointed three attorneys jointly and severally (her husband or partner, OM, and her two daughters, it appears). The Public Guardian submits that the following words in the instructions box within section 7 of the instrument require severing because they ‘are incompatible with the nature of the appointment of the attorneys to act jointly and severally’: ‘My two daughters (if surviving) must always agree on any decision jointly before any actions regarding my estate can be implemented. OM may act as an attorney independently of my daughters.’ The problem with severing the condition is that it creates or brings into existence a Lasting Power of Attorney which is contrary to the clear intention of the donor. She only wished to authorise her daughters to deal with her property if they agreed that a particular decision or intervention was in her best interests. Severance overrides that and empowers them to act unilaterally which is the opposite of what JF intended. On the basis of the Public Guardian’s advice that the condition needs to be severed in order to be registered, JF consents to severance. I do not know if she was advised that she could achieve her desired end by creating two LPAs (one appointing her daughters jointly and the other her husband or partner solely). I cannot see that there is anything objectionable in the arrangement devised by JF or that it should be necessary to create two instruments in order to achieve a simple objective that can easily be achieved in one instrument with a few simple words. It is certainly not desirable. Under the general law of agency, a principal may appoint co- agents, giving power to a quorum to act on her or his behalf. It seems virtually eccentric that a person must authorise (say) four attorneys to all act jointly or all separately and cannot specify anything in between. The aim should be a statutory scheme that gives as much flexibility to donors to set out how they wish their affairs to be dealt with as possible. 125. However, I consider that I am bound by current case law to make one of two decisions: either not to sever and to direct the Public Guardian not to register the instrument (given that the result goes against JF’s manifest intention) or to sever and direct registration. Given the donor’s consent to severance, with considerable reluctance I have decided on the latter course. PG (Case No 12926046) 126. 127. By her instrument Mrs PG authorised her attorneys jointly and severally to make decisions concerning her property and affairs. The Public Guardian submits that the following words in the instructions box within section 7 of the instrument require severing because they are ‘incompatible with the requirements in section 1(5) of the MCA that any act done or decisions made must be done or made in the donor's best interests’: The Public Guardian’s Severance Applications [2016] EWHC COP 0000 ‘My attorneys must ensure that IBG [the donor’s daughter, I believe] who is unable to make decisions for herself because of her disabilities that her needs are met.’ 128. 129. 130. 131. 132. 133. The Public Guardian ‘is accordingly referring this matter to the court, and asks the court to sever the words so that it may be registered as a valid LPA’. This case is similar to that of JG except that in JG’s case she sought to provide for her son’s needs by inserting the relevant words in the preferences box within section 7. In PG’s case her words are inserted in the instructions box (‘You can … give [your attorneys] specific instructions which they must follow when making decisions … Your attorneys will have to follow your instructions exactly … ’). This section of the form is intended to enable donors to impose conditions or restrictions on the authority of their donees. The Public Guardian submits that the words in section 7 are incompatible with the requirement in section 1(5) that acts and decisions or the donees must be in Mrs PG’s best interests (not the best interests of a third party). For the reasons given in Ms JG’s case, I disagree that PG’s condition is on its face contrary to the requirements of section 1(5), is ineffective as part of an LPA or prevents it from operating as a valid LPA. It is not per se contrary to PG’s best interests that she exercises her right to impose a condition on her attorneys that they must ensure that her incapacitated child’s needs continue to be met from her estate. That her daughter is cared for appears to be her most important wish and feeling, and no doubt her core personal belief and value. As a second issue, I must consider whether or not there is a difference between gifting and providing for a person’s needs (see e.g. paragraph 3 of Schedule 4 to the Act in relation to EPAs) — and whether providing for the needs of the donor’s daughter from her estate will involve making gifts to her daughter in excess of those permitted by section 12 so as to require a court application and order before they can be made. Gifting and providing for the needs of others 134. The legal position set out in the Enduring Powers of Attorney Act 1985, and repeated in Schedule 4 to the Mental Capacity Act 2005, was explicit and clear, and it derives from The Law Commission Report ‘The Incapacitated Principal’ (The Law Commission, Cmnd. 8977, July 1983): 4.26 Our recommendations fall between these two extremes. We feel that to deny the attorney any authority to use his EPA to benefit persons other than the donor would deprive the EPA of much of its practical utility. Indeed we feel that it would be sensible for attorneys to have a limited authority in this area. On the other hand we feel it would be undesirable to allow attorneys unrestricted authority. 4.27 We accordingly recommend that all attorneys should have statutory authority to use their EPA to provide for the needs of anyone (including themselves) for whom the donor might have been expected to provide had he then been capable. This authority would be limited to doing whatever the donor might have been expected to do to meet those needs had he then been capable. We also recommend that all attorneys should The Public Guardian’s Severance Applications [2016] EWHC COP 0000 have statutory authority to use their EPAs to make gifts of the donor’s property provided that such gifts were either: (a) gifts of a seasonal nature or on the occasion (or anniversary) of a birth or marriage made to persons (including the attorney) who are related to or connected with the donor, or (b) gifts to any charity to whom the donor had made donations (or might have been expected to make had he then been capable) provided (in either case) that the value of each such gift was not unreasonable having regard to all the circumstances and, in particular, the size of the donor’s estate. 4.28 We recommend that attorneys should have both the authority to provide for needs and the authority to make gifts without the need for any enabling provision in the EPA itself and both authorities would be exercisable whether or not the donor was incapable and without the need for the attorney to obtain anyone’s consent.’ Both authorities would, however, be subject to any provision in the EPA that had the effect of restricting or excluding them. Thus if the donor provided in the EPA that the attorney was not to use the power for anyone’s benefit apart from the donor’s, the statutory authorities which we recommend would be excluded. And the same result would arise if the authority specified in the EPA were so limited as to exclude any possibility that other persons were to be benefited. Thus if, for example, the authority were merely to collect income and pay debts the attorney would not be authorised to maintain the donor’s relatives or make any gifts. 4.29 We accept that these limitations on the attorney’s authority may be considered by some people either unnecessary or arbitrary. Not for the first time in this project, however, we have had to balance considerations of simplicity and freedom of action against the need to protect donors against exploitation. On balance we feel that limitations are necessary. As for the limitations being arbitrary we have endeavoured to give such authority as we think most attorneys would be ever likely to need …. 4.53 Action pending registration … We envisage that there would be a period of at least six weeks between the date upon which the attorney’s duty to apply for registration arose and the date of actual registration. Clearly it would be no less important that the donor’s affairs be attended to during that period than at any other time. There might be bills to pay (nursing home fees, for example) or investments to sell. We accordingly recommend that once the attorney had made his registration application he should be given a limited authority to act under his power. This authority would enable the attorney to maintain the donor, prevent loss to his estate and provide for the needs of himself and others to the extent that he could have done but for the power being suspended. Once registration had been completed his normal authority would be restored. 135. The EPA provisions set out in Schedule 4 to the Mental Capacity Act include the following provisions carried over from the 1985 Act: ‘Enduring power of attorney to survive mental incapacity of donor …. 1-(2) Despite sub-paragraph (1)(b), where the attorney has made an application for registration of the instrument then, until it is registered, the attorney may take action under the power— The Public Guardian’s Severance Applications [2016] EWHC COP 0000 (a) to maintain the donor or prevent loss to his estate, or (b) to maintain himself or other persons in so far as paragraph 3(2) permits him to do so. Scope of authority etc. of attorney under enduring power 3 (1) If the instrument which creates an enduring power of attorney is expressed to confer general authority on the attorney, the instrument operates to confer, subject to— (a) the restriction imposed by sub-paragraph (3), and (b) any conditions or restrictions contained in the instrument, authority to do on behalf of the donor anything which the donor could lawfully do by an attorney at the time when the donor executed the instrument. (2) Subject to any conditions or restrictions contained in the instrument, an attorney under an enduring power, whether general or limited, may (without obtaining any consent) act under the power so as to benefit himself or other persons than the donor to the following extent but no further— (a) he may so act in relation to himself or in relation to any other person if the donor might be expected to provide for his or that person’s needs respectively, and (b) he may do whatever the donor might be expected to do to meet those needs. (3) Without prejudice to sub-paragraph (2) but subject to any conditions or restrictions contained in the instrument, an attorney under an enduring power, whether general or limited, may (without obtaining any consent) dispose of the property of the donor by way of gift to the following extent but no further— (a) he may make gifts of a seasonal nature or at a time, or on an anniversary, of a birth, a marriage or the formation of a civil partnership, to persons (including himself) who are related to or connected with the donor, and (b) he may make gifts to any charity to whom the donor made or might be expected to make gifts, provided that the value of each such gift is not unreasonable having regard to all the circumstances and in particular the size of the donor’s estate.’ 136. With regard to Lasting Powers of Attorney, these statutory provisions and restrictions in the 1985 Act and Schedule 4 concerning gifts are repeated in the body of the Mental Capacity Act 2005 in relation to an LPA attorney’s authority to make gifts from the donor’s estate. See section 12: 12 Scope of lasting powers of attorney: gifts (1) Where a lasting power of attorney confers authority to make decisions about P's property and affairs, it does not authorise a donee (or, if more than one, any of them) to dispose of the donor's property by making gifts except to the extent permitted by subsection (2). (2) The donee may make gifts— The Public Guardian’s Severance Applications [2016] EWHC COP 0000 (a) on customary occasions to persons (including himself) who are related to or connected with the donor, or (b) to any charity to whom the donor made or might have been expected to make gifts, if the value of each such gift is not unreasonable having regard to all the circumstances and, in particular, the size of the donor's estate. (3) “Customary occasion” means— (a) the occasion or anniversary of a birth, a marriage or the formation of a civil partnership, or (b) any other occasion on which presents are customarily given within families or among friends or associates. (4) Subsection (2) is subject to any conditions or restrictions in the instrument. 137. However, the provisions in the 1985 Act and Schedule 4 concerning maintaining a person or providing for their needs from the donor’s estate are not repeated in the body of the Mental Capacity Act 2005 in relation to Lasting Powers of Attorney. 138. Why was this and what was Parliament’s intention? It was suggested to me that because the LPA statutory regime does not repeat the previous explicit power permitting an attorney ‘to provide for his or that person’s needs respectively’ therefore I should conclude that Parliament intended that attorneys should no longer have such a statutory power. If Parliament had intended that LPA attorneys should continue to have such a power then surely it would have carried over the relevant paragraphs and included them in the LPA provisions? 139. 140. 141. 142. I do not think these points are as strong as they first seem. As with all such propositions it is necessary to reverse them and see if there is any loss of plausibility. In fact, it could equally plausibly be asserted that had Parliament intended that LPA attorneys should now be prohibited from having such a power, and intended that henceforth providing for a person’s needs should be placed on the same footing as gifting, then surely it would have made that explicit by adding ‘providing for needs’ to the restrictions on gifting in section 12. As enacted, an LPA attorney has ‘authority to make decisions about ‘all or any’ matters concerning the donor’s property and affairs (s9(1)) subject only to ‘any provisions of this Act’ (e.g. the limited scope to make gifts in section 12), the duty to act in the donor’s best interests and ‘any conditions or restrictions specified in the instrument’ (s9(4). There is no statutory prohibition in the Act which restricts an attorney’s authority or ‘scope’ to provide for a person’s needs in the way that there is for gifts. The decision not to include the old clauses reflects, I think, the different statutory frameworks of the Enduring Powers of Attorney Act 1985 and Mental Capacity Act 2005. The 1985 Act was a standalone Act concerned only with modifying the existing law concerning powers of attorney. It set out a statutory regime that amended the existing law in relation to powers of attorney by means of explicit statutory provisions concerning matters such as the effect of incapacity, the duties of an attorney in the event of impending incapacity, gifting, providing for people’s needs, registration, the court’s powers and so on. 143. 144. 145. 146. 147. 148. 149. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 In contrast, the LPA provisions in the Mental Capacity Act 2005 form one part of a comprehensive framework for decision-making on behalf of incapacitated people which starts with principles to be applied in all cases, stating that all decisions, including those of an attorney, shall in the best interests of the relevant person. Whereas the 1985 Act says that an attorney has ‘authority to do on behalf of the donor anything which the donor could lawfully do by an attorney’, the 2005 Act provides that an attorney under an LPA has authority to make decisions ‘about all or any’ matters concerning the donor’s ‘property and affairs’ (s9(1)) ‘subject to any provisions of this Act [eg the gifting restrictions] and, in particular, sections 1 (the principles) and 4 (best interests), and … any conditions or restrictions specified in the instrument’ (s9(4). The duties set out in section 4 as concerns determining what decision is in the relevant person’s best interests ‘apply in relation to the exercise of any powers which … are exercisable under a lasting power of attorney’ (s4(8)). When making a decision for a donor, an attorney only complies with section 4 if s/he reasonably believes that what s/he does is in the best interests of the person concerned (s4(9)). An attorney must decide whether making a payment to themselves or a third party from the donor’s estate would constitute a gift for the purposes of section 12. If it constitutes a gift then such a payment must both be in the donor’s best interests and either authorised by the court or of sufficiently low value as not to require such authorisation. If the payment is not a gift for the purposes of section 12 but the meeting of a need, and there is no condition or restriction in the instrument which prevents such payments, then the attorney must apply the principles in section 1 and the best interests considerations in section 4. The attorney must consider matters such as the donor’s past and present wishes and feelings, their beliefs and values, any written statements made by them including statements in the LPA itself and all other relevant considerations such as the donor’s own needs and the nature of their relationship with the potential recipient, and decide whether such a payment is in the donor’s best interests. It might be argued that all payments made from a donor’s estate other than those for consideration, including those made to meet say a child’s needs, are by definition ‘gifts’ and therefore caught by section 12. Unless the payment is one of limited value made on a customary occasion such as a birthday, or a reasonable donation to a charity, a court application and order will be required in all cases. I should be very surprised if that was the case although the precise distinction or boundary between a gift and a payment to meet a person’s needs is probably impossible to define at its cusp: See, for example, the glossary to the Law Commission Report, ‘Matrimonial Property, Needs and Agreements’ (Law Com No 343) which notes that ‘needs’ is ‘a very broad concept with no single definition in family law’ and also that the needs of the parties is a question of fact, to be determined ultimately by a court in difficult cases. In the first place, such an interpretation would be wholly impractical and undesirable. Where a couple who have been married for say 60 years appoint each other as attorneys, and one of them is then incapacitated by dementia, the spouse exercising the attorney role would need to apply for a court order in order to continue regular and historic contributions from the donor’s pension and assets to their partner and the running expenses of the household. Likewise, where a younger couple with children make LPAs and one of them then suffers a severe brain injury in an accident, the The Public Guardian’s Severance Applications [2016] EWHC COP 0000 150. 151. attorney spouse would need a court order in order to continue to make payments to meet the children’s needs or payments on their behalf. The legal consequence of the onset of incapacity in such cases would be a court application in all cases and a Court of Protection order authorising some division of the couple’s assets, income and expenditure not dissimilar to that required in cases of divorce or separation. It would be a nightmare. In the second place, during my seven years as a full-time resident judge of the Court of Protection I am not aware of any such applications being made to a resident judge. Although not strictly relevant to determining the correct legal position, I suspect this is because in practice couples, parents and children execute LPAs in order to be able to continue as far as possible their normal and historic family lives without court intervention or official regulation. They have a common-sense understanding of the limits of what kind of expenditure is permissible, which is reinforced by natural affection and a concern for the welfare of the person suffering incapacity. There will of course be cases where an unscrupulous attorney tries to excuse their failure to seek court authority for a substantial gift on the ground that the payment was one which met a ‘need’ of theirs so that no application was necessary. However, it is the nature of powers of attorney in relation to incapacitated people that they have always offered, and always will offer, the unscrupulous relative or acquaintance opportunities for fraud or self-enrichment. The criminal law imposes penalties for fraud and the civil law includes mechanisms for ordering attorneys to repay monies misused by an attorney. Insofar as that is insufficient to deter the unscrupulous, the system relies on the capacity and common-sense of a donor to pick suitable and trustworthy attorneys and to include appropriate restrictions and conditions in the instrument. Unless a system is introduced which requires a wholly independent professional to provide the necessary certificate, or one whereby attorneys can give security, that has to suffice. 152. Having regard to the above considerations, I would be of the view that the legal position is as follows: a) b) c) d) e) An act done by an attorney is in general to be treated as one done by the person themselves. An attorney’s primary duty is to act only within the scope of the actual authority conferred by the power. The extent of an attorney’s authority turns primarily on the wording of the power and the authority given to them is a matter to be decided upon by the donor in consultation with the attorney. There is nothing to prevent a donor who does not wish their estate to be used to meet the needs of family members or dependants from inserting in the instrument a condition or restriction to that effect. Likewise, a donor may impose conditions or restrictions in relation to gifting. If a general power to manage the donor’s property and financial affairs is granted to an attorney then the attorney has authority to make decisions about ‘all or any’ matters concerning the donor’s property and affairs, including therefore meeting the needs of other persons and making gifts, subject to: The Public Guardian’s Severance Applications [2016] EWHC COP 0000 i) ii) A statutory duty to comply with section 1 of the Act (principles) which, inter alia, requires an attorney to act in the best interests of an incapacitated donor; A statutory duty to comply with section 4 of the Act (best interests) which, inter alia, requires an attorney before deciding that a decision or payment is in the best interests of an incapacitated donor to consider the donor’s past and present wishes and feelings (and, in particular, any written statement made by them, including statements in the LPA itself), their beliefs and values, the factors which the donor would be likely to consider if s/he were able to do so, the views of any co-attorneys, the views of any non- professional carers, and any other relevant considerations such as the donor’s current financial position and own needs. iii) A statutory duty not to make gifts of the donor’s property without court authority if they exceed the level permitted by section 12. iv) A duty to act in good faith. v) vi) A fiduciary duty not to use the power for personal advantage in a way that is not in the donor’s best interests upon a proper application of section 4. A duty to use such care and skill of care when carrying out their functions under the power of attorney as the attorney would in the management of their own affairs. f) It is not possible to define precisely the boundary between a gift and a payment to meet a person’s needs because each person’s situation, circumstances and resources are unique. However, marriage and equivalent relationships typically create a relationship of interdependence and mutual support, and dependence is commonly created by the presence either of children or a family member with a significant disability. Such relationships commonly generate needs met by other loved ones within the circle. In very general terms, gifts lack the regularity of weekly, monthly and other periodic payments to meet the needs of family members and dependants, and often are not supported by a history of frequent similar periodic payments predating the onset of incapacity. g) Where a spouse or partner attorney applies part of the donor’s funds to meet their own continuing needs and those of other dependents in a way which — allowing for any reduction in family income and assets caused by care home fees or loss of earnings and any increase in the donor’s own needs — is consistent with the donor’s historical expenditure prior to the onset of incapacity then this is likely to be an indicator that it is a need that is being met, not a gift. Because the donor has entrusted such decisions to their attorney, rather than leave them to a court, the courts are likely to be reluctant to interfere without good evidence that the attorney has not applied the requirements of section 4 when making their best interests decision. Such expenditure is consistent with the donor’s historical expenditure which acts as a barometer of their wishes, feelings, beliefs and values, and the lifestyle enjoyed prior to the onset of incapacity sets a benchmark that is relevant to the assessment of need. In order not to allow for any doubt at all, a prudent donor may wish to make the matter explicit by including a condition The Public Guardian’s Severance Applications [2016] EWHC COP 0000 or statement in their LPA about future provision for the needs of specified persons. h) Payments on customary occasions such as birthdays will generally be gifts, not payments to satisfy a need. Likewise, the making of one-off payments in the absence of good evidence of a sudden present need which historically the donor would have met or be likely to meet from their own funds may be construed by a court as a gift. Therefore, given that an attorney who breaches any of their duties is personally liable to compensate the donor for any loss thereby sustained to the donor’s estate, the prudent course would be to apply for the court to authorise such a payment. 153. To return to PG’s case, to me this clearly a case of meeting a need and without more would not require a court application under section 12. Requiring her donees to ensure that her estate continues to be used as necessary to help provide for her disabled daughter’s needs is her wish. It is in her best interests that she knows that her wishes and feelings for her daughter will be honoured if she becomes incapacitated. In my view, there is nothing to prevent her from imposing that condition on her attorneys. 154. I make the following order: UPON considering the Application of the Public Guardian in respect of a Lasting Power of Attorney for Property and Financial Affairs executed by PG on 21 April 2016 in which she appointed YPG, RG and RA jointly and severally as her attorneys (‘the instrument’) WHEREAS 1. Paragraph 3(2) of Schedule 1 to the Mental Capacity Act 2005 provides that the court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 2. Section 23(1) of the Mental Capacity Act 2005 provides that the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). THE COURT DECLARES THAT 3. The condition imposed by the donor on her attorneys in section 7 of the instrument (‘My attorneys must ensure that IBG who is unable to make decisions for herself because of her disabilities that her needs are met’) is not incompatible with the requirement in section 1(5) of the MCA that any act done or decisions made must be done or made in the donor's best interests’ and it has legal effect. 4. Meeting the needs of IBG from the estate of PG insofar as it is possible to do so does not constitute making gifts to IBG from the donor’s estate for the purposes of section 12 with the effect that without more no separate application to the court for permission to make such payments is or will be necessary (unless the particular circumstances at the time mean that such an application is in PG’s best interests). AND ORDERS AS FOLLOWS The Public Guardian’s Severance Applications [2016] EWHC COP 0000 5. The Public Guardian is directed to register the said instrument. 6. A copy of this Order shall be affixed by the donor and attorneys to the registered instrument and to all copies of the said instrument so that third parties have knowledge of this Order and the legal effect of the instrument. GO (Case No 12918069) 155. 156. 157. 158. By his instrument GO authorised five persons jointly and severally to make decisions concerning his property and affairs. In section 5 of the instrument (‘restrictions and conditions’) the donor provided as follows: ‘1. My said wife LLO shall be entitled to act as my attorney without any restrictions or conditions being imposed. 2. The other four appointed Attorneys, AWO, SEO, HJT and LOR shall only be entitled to act as my Attorneys for the purpose of using my debit cards on my behalf. They shall not be entitled to act in relation to any other matter appertaining to my Property and Financial Affairs’ The Public Guardian asks the court to sever the underlined words because they are incompatible with the nature of the appointment of the attorneys to act jointly and severally. More particularly, the condition restricts the power given to the second, third, fourth and fifth attorneys. In substance this is a JF type case. There is nothing objectionable in the arrangement and it should not be necessary to create two instruments in order to achieve a simple objective that can easily be achieved in one instrument with a few simple words. However, I am bound by current case law to make one of two decisions: either not to sever and to direct the Public Guardian not to register the instrument (given that the result goes against GO’s manifest intention) or to sever and direct registration. Given his consent to severance, with reluctance I have decided on the latter course. GB (Case No 12946433) 159. 160. By her instrument GB (‘Mrs B’) authorised her husband JB (‘Mr B’) to be her attorney in relation to decisions concerning her property and affairs. She also appointed two replacement attorneys (JHLB and DJLB) and (clearly in relation to them) completed the preferences box within Section 7 as follows: ‘I would like them to act jointly for the sale or rental of properties and investments.’ 161. She then completed Continuation Sheet 2 (‘How replacement attorneys step in and act’) so as to provide that: ‘I want my replacement attorneys to act jointly and severally. Jointly for sale or rental of properties and investments.’ The Public Guardian’s Severance Applications [2016] EWHC COP 0000 162. 163. 164. The Public Guardian takes exception to the words in Continuation Sheet 2. He asks the court to sever the underlined words because they are incompatible with the … appointment … of the replacement attorneys to act jointly and severally.’ I do not take that view myself. The instrument is home-drawn and GB’s completion of the preferences box rather than the instructions box in section 7 creates an element of ambiguity. However, I think the donor’s intention is clear from an overall reading of the instrument. Her replacement donees are to act jointly in some matters (the sale or rental of properties and investments) but may act alone in all other matters. In other words, ‘jointly for some decisions, jointly and severally for other decisions’. Pursuant to paragraph 3(2), I am inclined therefore to declare that the instrument is to be treated as being sufficient and in the prescribed form and the replacement donees have been authorised to act ‘jointly for some decisions (specifically, the sale or rent of properties and investments) and jointly and severally for all other decisions. 165. I make the following order: UPON considering the Application of the Public Guardian in respect of a Lasting Power of Attorney for Property and Financial Affairs executed by GB on 28 July 2016 in which she appointed JB to be her sole attorney and also JHLB and DJLB to be her replacement attorneys (‘the instrument’) WHEREAS 1. Paragraph 3(2) of Schedule 1 to the Mental Capacity Act 2005 provides that the court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 2. Section 23(1) of the Mental Capacity Act 2005 provides that the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). THE COURT DECLARES THAT 3. The meaning and effect of the instrument is that GB’s replacement attorneys are authorised to make all decisions concerning the donor’s property and financial affairs jointly and severally other than decisions in respect of the sale or rental of her property and investments which must be made jointly. AND ORDERS AS FOLLOWS 4. The Public Guardian is directed to register the instrument. 5. A copy of this Order shall be affixed by the donor and attorneys to the registered instrument and to all copies of the said instrument so that third parties have knowledge of this Order and the legal effect of the instrument. The Public Guardian’s Severance Applications [2016] EWHC COP 0000 JB (Case No 12946312) 166. 167. By his instrument JB authorised his wife GB (see case immediately above) to be his attorney in relation to decisions concerning his property and affairs. He appointed two replacement attorneys and (clearly in relation to them) completed the instructions box in Section 7 as follows: “My attorneys must act jointly when deciding either sale or rental of my properties also what action to take regarding investments.” 168. He then completed Continuation Sheet 2 (‘How replacement attorneys step in and act’) so as to provide that: “I want my replacement attorneys to act jointly and severally. Jointly for sale of rental properties and investments” 169. Mr and Mrs B have both made LPAs the contents of which are, I think, intended to have the same effect. They were home-made and could have been more clearly expressed. However, as in Mrs B’s case, I think the donor’s intention is clear from an overall reading of the instrument. His replacement donees are to act jointly in some matters (sale or rental of properties and investments) but may act severally in all other matters. In other words, ‘jointly for some decisions, jointly and severally for other decisions’. 170. Pursuant to paragraph 3(2), I am inclined therefore to declare that the instrument is to be treated as being sufficient and in the prescribed form and the donees have been authorised to act ‘jointly for some decisions (specifically, the sale or rent of properties and investments) and jointly and severally for all other decisions. 171. I make the following order: UPON considering the Application of the Public Guardian in respect of a Lasting Power of Attorney for Property and Financial Affairs executed by JB on 28 July 2016 in which he appointed GB to be his sole attorney and also JHLB and DJLB to be his replacement attorneys (‘the instrument’) WHEREAS 6. Paragraph 3(2) of Schedule 1 to the Mental Capacity Act 2005 provides that the court may declare that an instrument which is not in the prescribed form is to be treated as if it were, if it is satisfied that the persons executing the instrument intended it to create a lasting power of attorney. 7. Section 23(1) of the Mental Capacity Act 2005 provides that the court may determine any question as to the meaning or effect of a lasting power of attorney or an instrument purporting to create one (s23(1)). THE COURT DECLARES THAT The Public Guardian’s Severance Applications [2016] EWHC COP 0000 8. The meaning and effect of the instrument is that JB’s replacement attorneys are authorised to make all decisions concerning the donor’s property and financial affairs jointly and severally other than decisions in respect of the sale or rental of his property and investments which must be made jointly. AND ORDERS AS FOLLOWS 9. The Public Guardian is directed to register the instrument. 10. A copy of this Order shall be affixed by the donor and attorneys to the registered instrument and to all copies of the said instrument so that third parties have knowledge of this Order and the legal effect of the instrument. GD (Case No 1294678T) 172. 173. By her instrument GD authorised two persons jointly to be her attorneys in relation to decisions concerning her property and affairs. She also appointed one replacement attorney. In section 5 of the instrument (‘When do you want your attorneys to be able to make decisions?) she ticked the box ‘As soon as my LPA has been registered’, rather than the box ‘’Only when I don’t have mental capacity’. 174. In section 7 of the instrument the donor then completed the preferences box as follows: ‘This power shall only come into effect when my Attorneys have reason to believe that I am becoming or have become incapable of making decisions and managing my property and financial affairs and such incapacity has been confirmed in writing by my General Practitioner (GP)’ 175. 176. The Public Guardian asks the court to sever these words because they are incompatible with the option chosen in Section 5 which states that the attorneys are able to make decisions as soon as the LPA has been registered. Clearly section 5 or 7 requires correction. The Public Guardian has kindly made enquiries of GD who states that her intention was that the attorneys be authorised to make decisions on her behalf as soon as the instrument is registered. Therefore it is section 7 that requires severing and I shall make an order accordingly. CW (Case No 12946813) 177. By her instrument CW authorised her mother EJW to be her attorney in relation to decisions concerning her property and affairs. She also appointed one replacement attorney, GD. 178. In the preferences box in section 7 of the instrument the donor stated: The Public Guardian’s Severance Applications [2016] EWHC COP 0000 ‘I wish that my attorney considers not only the use of my money for my own benefit but also to consider the use of my money for the benefit of my mother EJW and my daughter LAAW.’ 179. 180. 181. The Public Guardian asks the court to sever these words because they ‘seek to extend the scope of gifting authority given to the attorneys under section 12’ of the 2005 Act. This case is similar to that of JG who entered in the preferences box in section 7 the words, ‘I would like my attorneys to consider TG (my son) as my main priority when making decisions.’ The Act entitles the donor to make a written statement concerning her wishes and feelings (s4(6)(a)) which the donees must consider when deciding what decision is in her best interests and the donor has done no more than exercise that right. 182. My determination under section 23(1) of the meaning and effect of the words in section 7 is that they are not ineffective and do not prevent the instrument from operating as a valid LPA. As a result, I shall direct the Public Guardian to register the instrument. §7 — CONCLUDING REMARKS 183. The Public Guardian has had an opportunity to consider this judgment before it is handed down and agrees with it. DJ Eldergill 19 June 2017 40