Feature

posted 1 Jul 1997 in Volume 2 Issue 5

Court of Protection Case Report

Denzil Lush, the Master of the Court of Protection, examines a recent case involving the appointment of a receiver.

He outlines the criteria available to be used in determining a decision and explains why, in this case, he decided to appoint an accountant to act as receiver rather than a relative.

Mrs B is 82. Her husband died in 1970 and their only child, an unmarried son, died two years later aged 27. She has never got over his death. It has preyed on her mind ever since. Her estate is worth £6 million. She lives in a flat in Mayfair and is looked after by a housekeeper and professional carers. She has Alzheimer's Disease, the onset of which was first noticed in 1993. Her two sisters and their children have become increasingly concerned about her friendship with a woman, L, whom she has known for over thirty years.

Recently she made a new will. Her brother-in-law, who is a solicitor, heard about this and the family leapt into action. A niece, S, employed a private detective to investigate L's activities, but his report was inconclusive. In November 1996 an answerphone was installed in the flat. Mrs B no longer takes calls from her relatives .

In December 1996 S applied to be appointed receiver. Mrs B objected. She was adamant that her family should not become involved in her financial affairs and would rather her accountant, T, were appointed receiver. The Lord Chancellor's Medical Visitor visited her on 13 March and concluded that she was no longer capable of expressing such preferences. A hearing was held on 11 April 1997.

An application for the appointment of a receiver invites the Court to exercise a discretion. This discretion can be found in the Mental Health Act 1983, s.99 and must be exercised in the patient's best interests.

The authorities acknowledge that there is an order of preference, rather than an order ofpriority, for the appointment of a receiver. Nobody has automatic rights of precedence. The Court of Protection has complete discretion as to whom it appoints. Nevertheless, when exercising that discretion, it has traditionally preferred relatives to strangers.

The order is:

the patient's spouse
any other relative
a friend
a professional adviser
a local authority; and finally
the Public Trustee, as receiver of last resort.

This is reinforced by The Court of Protection Rules 1994, r.27, which requires an applicant to give notice to all relatives of the patient who have the same or a nearer degree of relationship to the patient than the applicant or proposed receiver.

Adherence to any order of preference would, however, have the effect of negating the Court's discretion, and there are other important, and often overriding, considerations which the Court takes into account - especially in contested cases.

These include the following, but the list is not exhaustive.

1. General suitability.

Referees are sent a printed form (CP8) and are asked to answer the following questions: "Do you consider the proposed receiver to be a suitable person to undertake the responsibility, if necessary with professional help, for the management and administration of a patient's financial affairs and property? Do you consider him/her to be capable of keeping simple accounts in respect of his/her dealings with the patient's affairs? Do you know of any circumstances which might make the proposed receiver in any way unsuitable? From your knowledge do you consider the proposed receiver to be a person likely to take an interest in the welfare of the patient?" If the reference is unsatisfactory, the proposed receiver will not be appointed. The insurance companies providing security bonds also carry out enquiries to establish whether any County Court judgments are registered against the proposed receiver's name.

2. Size and complexity of the estate.

In Holt v. Protective Commissioner [1993] 31 NSWLR 227 the Court of Appeal of New South Wales said that "in a smaller estate it may often be appropriate to appoint a family member who will be entirely familiar with the assets and liabilities and ready to manage them with greater economy and possibly free of cost to the protected person. Different considerations may affect the management of an estate comprised of few liquid assets when contrasted to one which enjoys substantial and regular income."

3. Where the receiver lives.

Sir Henry Theobald, in The Law relating to Lunacy (1924), said "it is not desirable that the receiver should reside out of England and Wales". There are additional costs and delays in communications. There are also problems enforcing orders of the Court outside the jurisdiction, and some insurance companies are unwilling to provide security for the defaults of such a receiver: Re Hopper (1897) 66 LJ Ch 569. It is an advantage if the receiver lives within easy reach of the patient: Re Erring~on (1820) Jac 404. This means that they can be readily available in an emergency.

4. Age.

A receiver of advanced age is not favoured. Similarly, the attainment of the age of 18 is not in itself a reason for a person's appointment, since maturity of judgment and knowledge of life are essential qualities in a receiver.

5. Gender.

In Re Ludlow (1731) 2 P Wms 635, where there were competing applications between a male and female cousin, Lord Chancellor King decided in favour of the female since she, "being of the same sex, may probably better know how to take care of (the patient) and in this respect be more tender to her. "

6. Health.

The poor health of a proposed receiver may be a good reason for not appointing him or her: Re Birch (1808) Shelf.Lun. 180.

7. Ethnic and religious considerations.

When exercising its discretion as to whom to appoint, the Court has regard to any customs or conventional practices, strengthened by religious beliefs or social traditions, that any community to which the patient belongs would consider morally binding.

8. The patient's own wishes and feelings.

A footnote on page 25 of Heywood & Massey refers to a couple of cases - one Irish, Re Leacocke (1838) Lloyd & G. 498, and the other Scottish, Howden v. Sibbald(1833) 11 Shaw 561 - which establish the principle that, so far as possible, regard should be had to the wishes and inclinations of the patient. This is endorsed by the Law Commission's report on Mental incapacity (1995) which suggests that "in deciding what is in a person's best interest regard shall be had to, so far as ascertainable, his past and present wishes and feelings and the factors which he would consider if he were able to do so. "

9. Testamentary wishes of the patient.

The Court of Protection Rules ~994, r.72 allows the Court to require the production of any testamentary document executed by a patient. Whether the patient has appointed the proposed receiver as an executor or beneficiary may be relevant.

10. The wishes of the patient's family.

In Re Lord Bangou (1818) 2 Moll 518 it was held that "in the appointment of a receiver it was extremely proper, as far as it was consistent with the interests of (the patient), for the Master to look to the general wish of the family who was to be appointed. "

11. The ability of the patient to interact with the receiver.

In Holt (1993) Kirby P. commented on the importance of the ability of the patient, "if disabled, to interact with his or her manager so that, so far as possible, within the disability which has led to the appointment, such person may remain in charge of, or at least able to influence, the broad directions of the management of the estate." This accords with the recommendations of the Law Commission (1995) that there is a "need to permit and encourage (the patient) to participate, or to improve his ability to participate, as fully as possible in anything done for and any decision affecting him."

12. The ability of the receiver to interact with others.

The Law Commission (1995) also recommends that, in deciding what is in someone's best interests, regard should be had "if it is practicable and appropriate to consult them, (to) the views as to that person's wishes of (a) any person named by him as someone to be consulted on those matters, and (b) anyone (whether his spouse, a relative, friend or other person) engaged in caring for him or interested in his welfare. "

13. Conflicts of interest.

In Holt (1993) Kirby P. said that "ordinarily, a person who would face a conflict of interest and duty would not be appointed. However, such conflicts do not necessarily present an absolute bar to appointment, for otherwise this would exclude from consideration a range of family members in every other way appropriate. "

14. Love, affection and devotion.

In Holt (1993) Kirby P. said that one of the advantages of appointing a relative was "the ingredient of love and affection and unquestioning devotion which an appropriate family member can add to the task of management. "

15. The care regime.

In Re Hussey (1828) 1 Moll. 226 the judge said: "Look with the utmost jealousy at every point connected with the treatment of the persons, and the care of their estates especially, because the first will generally be found to hinge upon the second. "

16. Special qualities of the applicants.

Any special qualities of the applicant to act as a receiver may be relevant: for example, a professional qualification.

17. Special features of the case.

Are there any special features of the case which may require particular attention? For example, an intended divorce or proceedings under the Inheritance (Provision for Family and Dependants) Act 1975.

18. Carriage of the proceedings.

The party having carriage of the proceedings is not entitled to preference on that ground alone: Re Webb (1846) 2 Phill 10. Nevertheless, if the aggrieved party has delayed in making an application himself the Court will want to know the reasons why.

19. Matters to be investigated.

The Court of Protection Rules 1994, r.71 provides that "in any proceedings relating to a patient the court may make or cause to be made such inquiries as it thinks fit as to any dealing with the patient's property before the commencement of the proceedings and as to the mental capacity of the patient at the time of such dealings." A receiver cannot be appointed to investigate his or her own prior dealings with the patient's property: Re Dimmock (1934, Unreported), per Slesser W.

20. Expense.

The expense involved in managing the patient's property and affairs is also taken into account. One of the reasons why the Court has traditionally preferred to appoint a relative as receiver is that a relative usually acts without remuneration.

In this case the question was who, on the balance of probabilities and having regard to the patient's best interests, was the more suitable candidate for appointment as receiver: her niece S, or her accountant T?

I decided to appoint T.

All of the above points were considered to a greater or lesser degree. Probably the most important considerations in this case were:

Size and complexity of the estate. T is a partner in a well-known firm of chartered accountants which has been auditing the accounts of Mrs B's property companies and advising on her tax affairs for several years. He is already familiar with her business affairs and it was appropriate for him to act in connection with her private, domestic finances.
Matters to be investigated. There are concerns about L and the extent to which she may have influenced or taken advantage of the patient in recent years. These need to be investigated. It was felt that, although S would pursue such investigations with zeal, they would not be conducted with the appropriate degree of sensitivity.
The patient's own wishes and feelings. The Lord Chancellor's Medical Visitor concluded that Mrs B was no longer capable of expressing her present wishes and feelings. Accordingly, it was necessary to consider her past wishes and feelings. The evidence showed that over a considerable period of time Mrs B had consistently said that she did not want her family to be involved in her affairs.
The ability of the receiver to interact with the patient. Mrs B has taken a growing dislike to her family. She threatened to commit suicide if S were appointed receiver. I took into account the comments of my predecessor, Sir Henry Theobald, in ~he Law relating t~ Lunacy (1924), p.398: "A difficult question arises where a receiver, otherwise unobjectionable, is proposed and the patient expresses a strong dislike to him. This dislike may be irrational and based upon hallucination. At the same time it is, as a rule, unwise to appoint such a person, as the appointment may have a bad effect on the patient's mental and bodily condition and retard his recovery."
The ability of the receiver to interact with others. It was unlikely that S would be able to work satisfactorily with L or the housekeeper or carers. Rightly or wrongly, they would perceive her actions as authoritarian or oppressive. L might cease to visit her. The housekeeper and carers might resign. It was in the patient's best interests to remain in her flat, with 24 hour care and support from people with whom she is familiar and with whom she feels comfortable, for as long as is practicably possible and, ideally, for the rest of her life.

Denzil Lush, Master, The Court of Protection, Stewart House, 24 Kingsway, London, WC2B 6JX, DX 37965 Kingsway