Re W (Enduring Power of Attorney)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PETER GIBSON,Sir Christopher Staughton,LADY JUSTICE ARDEN |
| Judgment Date | 11 December 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J1211-1 |
| Docket Number | A3/2000/6478 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 December 2000 |
[2000] EWCA Civ J1211-1
Lord Justice Peter Gibson
Lady Justice Arden
Sir Christopher Staughton
A3/2000/6478
A3/1999/1079
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COURT OF PROTECTION
(Mr Jules Sher QC)
Royal Courts of Justice
Strand
London WC2
MR DAVID REES (Instructed by Gaby Hardwick, Yearwood & Griffiths, 24 Eversley Road, Bexhill-on-Sea, East Sussex, TN40 1EX) appeared on behalf of the Appellant
MR ADRIAN JACK (Instructed by Max Barford & Co, 16 Mount Pleasant Road, Tunbridge Wells, Kent TN1 1QU) appeared on behalf of the Respondent
Monday, 11th December 2000
I will ask Sir Christopher Staughton to give the first judgment.
This appeal concerns the affairs of Mrs W, as I shall call her, a widow who is nearly 91 years of age. On 4th July 1996 she granted an enduring power of attorney to her eldest child, Mrs X. Two years later, on 27th April 1998, Mrs X applied for the enduring power of attorney to be registered under the Enduring Powers of Attorney Act 1985. Meanwhile, she had given notice of intention to register on 18th April to the other two children of Mrs W: I will call them Mrs Y, who is now 61, and Mr Z, who is aged 57. They became the objectors. They had already, on 21st February 1997, obtained a report from a Mr Connor on Mrs W's mental health, but no action had been taken on that report in the ensuing year.
On 13th May 1998 the objectors served notice of objection. That led to the present proceedings. The objections were upheld by Master Lush in the Court of Protection. However, his decision was reached in an unsatisfactory way in that Mrs X had not been notified of the hearing date and was not present. It seems to me, there having been real doubt as to whether she had been notified, that the Master would have been wiser not to proceed at that stage. In the event, we should disregard the conclusions of the Master. There might have been an order setting his decision aside and directing a fresh hearing before a new Master; but the parties instead agreed that on an appeal to a judge of the Chancery Division the matter should be reconsidered. That was done in order to save costs.
The assets of the estate are not large. They are somewhat less now than they were before, no doubt, as the Master ordered the costs to come out of the estate. So did the judge. In the judge's decision it is said the assets were a portfolio of investments valued in December 1998 at �211,000, �20,000 in premium bonds and a life policy written in trust of �30,000. At the time Mrs W was in a nursing home, which cost �2,000 a month. She had some other simple and fairly modest requirements. Of course, she also had on the income side the old age pension.
The grounds argued before the Master were these. First, that the power purported to have been created by the instrument was not valid as an enduring power of attorney. The reason put forward for that was that Mrs W did not have the necessary capacity and understanding at the time when she made it. Second, it was said that undue pressure was used to induce the donor to create the power. Third, that having regard to all the circumstances, and in particular the attorney's relationship to or connection with the donor, the attorney was unsuitable as an attorney of the donor.
The Master upheld the first and third grounds, that is to say lack of capacity and understanding and unsuitability, but not the second ground, which was undue pressure. The appeal came before Mr Julian Sher QC, sitting as a Deputy Judge of the Chancery Division. Before him only grounds one and three were argued, the ones upon which the objectors had succeeded before the Master. The Deputy Judge reversed the Master's decision on both points. He had, of course, additional evidence which was not before the Master.
There is now an appeal to this court by permission of Walker LJ.
The third ground, unsuitability, is no longer pursued by the objectors. So the only ground now is that the power of attorney was invalid through want of capacity.
Before the judge the objectors had accepted that the burden of proof as to that rested on them. The judge accepted that, and there was no challenge to it in the notice of appeal. But now the objectors seek to amend their notice of appeal to say that the burden was on Mrs X, the attorney. There has been no objection to leave to amend the notice of appeal being granted; and we do grant it.
The relevant provisions in the Enduring Powers of Attorney Act are as follows. Section 4 provides:
"(1) If the attorney under an enduring power has reason to believe that the donor is or is becoming mentally incapable subsections (2) to (6) below shall apply.
(2) The attorney shall, as soon as practicable, make an application to the court for the registration of the instrument creating the power."
That, of course, was done in this case.
Then section 6 says:
"(1) In any case where-
(a) an application for registration is made in accordance with section 4(3) and (4), and
(b)neither subsection (2) nor subsection (4) below applies the court shall register the instrument to which the application relates."
The provisions there referred to in subsections (2) and (4) deal with two cases. Subsection (2) deals with the case where it appears to the court that there is in force under Part 7 of the Mental Health Act an order appointing a receiver. But that is not this case. In such a case the court can act of its own motion. Subsection (4) provides:
"If, in the case of an application for registration-
(a)a valid notice of objection to the registration is received [within a certain period]; or
(b)it appears from the application that there is no one to whom notice has been given under paragraph 1 of that Schedule; or
(c)the court has reason to believe that appropriate inquiries might bring to light evidence on which the court could be satisfied that one of the grounds of objection set out in subsection (5) below was established, the court shall neither register the instrument nor refuse the application until it has made or caused to be made such inquiries (in any) as it thinks appropriate in the circumstances of the case."
So that deals with two cases: first, whether where there is a valid notice of objection; second, whether the court has reason to believe that appropriate inquiries might bring to light evidence which was relevant.
Then subsection (5) sets out for the purposes of the Act what grounds may be included in the notice of objection. Ground (a) is that the power purported to have been created by the attorney was not a valid and enduring power of attorney. That is the case which now remains to be considered in this court.
Then subsection (6), which is critical for this case, provides:
"If, in a case where subsection (4) above applies, any of the grounds of objection in subsection (5) above is established to the satisfaction of the court, the court shall refuse the application but if, in such a case, it is not so satisfied, the court shall register the instrument to which the application relates."
In this case there was a valid objection under subsection (4). The question is whether the ground of objection in subsection (5)(a), that is to say that there was not a valid enduring power of attorney, is established to the satisfaction of the court. If it is, the court must refuse registration. If not, the court shall register the instrument.
The law relating to this matter has been considered in two judgments to which we have been referred. First, there is the decision in Re K [1998] Ch 310. In that case Hoffman J said at page 313:
"The Act does not specify the mental capacity needed to execute an enduring power and the answer must therefore be found in the common law. It is well established that capacity to perform a juristic act exists when the person who purported to do the act had at the time the mental capacity, with the assistance of such explanation as he may have been given, to understand the nature and effect of that particular transaction: see In re Beaney, decd. [1978] 1 WLR 770. In principle, therefore, an understanding of the nature and effect of the power was sufficient for its validity."
Later, Hoffman J referred to what measures should be taken to achieve that. At page 316:
"Finally, I should say something about what is meant by understanding the nature and effect of the power. What degree of understanding is involved? Plainly one cannot expect that the donor should have been able to pass an examination on the provisions of the Act. At the other extreme, I do not think that it would be sufficient if he realised only that it gave Cousin William power to look after his property. Mr. Rawson helpfully summarised the matters which the donor should have understood in order that he can be said to have understood the nature and effect of the power. First, (if such be the terms of the power) that the attorney will be able to assume complete authority over the donor's affairs. Secondly, (if such be the terms of the power) that the attorney will in general be able to do anything with the donor's property which he himself could have done. Thirdly, that the authority will continue if the donor should be or become mentally incapable. Fourthly, that if he should be or become mentally incapable, the power will be irrevocable without confirmation by the court."
I would, for my part, agree that those four points are a sound indication of what the donor must understand if the power is to be valid.
Hoffman J went on to say:
"I do not wish to...
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