A good example of bad gifts: Purvis v Purvis [2018] EWHC 1458 (Ch)

In a recent blog, we provided an update on the Court of Protection rules on gift making. We discussed the potential consequences that attorneys and deputies can face as a result of making unauthorised gifts and the powers of the Office of the Public Guardian (OPG) to investigate such gifts.

To follow on, we are looking at the Purvis v Purvis [2018] EWHC 1458 (Ch) case which, whilst extreme, demonstrates how the OPG can step in to attempt to safeguard the interests of persons within the protection of the Court of Protection and the consequences that may result for attorneys and deputies.

Purvis v Purvis [2018] EWHC 1458 (Ch): case facts

• The claimant was a protected party; she executed lasting powers of attorney (LPAs) in favour of her son in 2013 and he was made a joint bank account holder on her three bank accounts, a current account and two savings accounts.
• The claimant resided in a care home from 2013. In January 2016, the care home raised concerns with the OPG about the son’s management of his mother’s financial affairs. This resulted in the OPG carrying out a full investigation which in turn occasioned an application to the Court of Protection by the OPG. The outcome of that application was the revocation of the LPA’s and an order for the son to account for his dealings with his mother’s affairs between 2013 and 2016. The claimant’s daughter was appointed as deputy for her mother’s affairs. The account was never produced by the son.
• Following her appointment as deputy, the claimant’s daughter undertook an analysis of the claimant’s finances and instructed an accountant to analyse the payments into and out of the mother’s bank accounts.
• The accountant concluded that whilst over £940,000 had been paid into the accounts over the relevant period, only £212,000 has been spent on the claimant’s needs. There was only £5,000 remaining in the accounts. The rest had been paid to the son or at his direction.
• The claimant’s daughter, on behalf of the claimant claimed that her son, while administering her financial affairs under the LPA had misappropriated her money as well as two cars belonging to the claimant and was liable to pay damages or compensation for breach of duty and/or breach of trust. The son’s position was firstly that “the claimant made him the co-owner of the accounts, essentially as an immediate gift of the money then and thereafter in the accounts to him, to enable him to use that money as he wished, while retaining the ability to use it herself” and that in any event, most of the money was used for his mother’s benefit.

Result

Judgment was given for the claimant and it was held that the son was liable in damages for the misappropriated funds.

Amongst other things, it was held that:

• The payments were in breach of the son’s duty under the Mental Capacity Act 2005 to only apply money under the LPA for the claimant’s best interests.
• The son had spent over £400,000 improving his own property and a property in Spain that the claimant had never lived in. He had spent about £360,000 on living expenses, £150,000 on school fees and £100,000 on cars. Further, considerable gifts were made to him, including two of the claimant’s cars. It was concluded that there was no basis to concede that such expenditure was or could ever have been thought to have been in the claimant’s best interests.
• Even on the basis of the very limited evidence, it was quite likely that the claimant would have given her son her two cars for which she no longer had any use and as such that element of the claim failed.
• It was conceivable that the claimant would have made reasonable provision for presents to her son during the claim period and is likely that she would have been generous to him.
• The son should have an allowance of £20,000 a year over the claim period by way of annual cash gifts.
• The son was liable to repay the rest, of just under £670,000.

Comment

This case is inevitably an extreme case of unauthorised gift making by an attorney and indeed the sums taken are just as extreme. Nevertheless, the case highlights the role of the OPG and serves as a good warning to deputies and attorneys of the consequences of making unauthorised gifts.

If you wish to consider an application to the Court of Protection to make a gift or indeed you are concerned about any gifts that have already been made by an attorney or deputy then please contact the team.