About this case:

• Citation:
  [2024] NIFam 7
• Judgment:
  External link
• Court:
  NI High Court
• Judge:
  Judge David McFarland

Delivering judgment for the High Court, Mr Justice David McFarland remarked that “AB remains an unsuitable person to manage his mother’s affairs, by reason of his conduct and his current appreciation of what is required of an attorney. He has retained the money transferred to him. He has made no attempt to repay it. He expects the court to be satisfied that reliance can be placed on his stated intention to be bound by his military code of ‘honour and fidelity’.”

Background

On 5 January 2021, a 91-year-old woman, EF, executed an enduring power of attorney (EPA) appointing her two sons, AB and CD, to be her joint and several attorneys with unrestricted powers. On 26 November 2021, AB and CD took over the management of EF’s affairs.

Danske Bank alerted the High Court in respect of activity on EF’s bank account in December 2022 and March 2023. Investigations took place which revealed that during this period, AB had transferred in excess of £250,000 from his mother’s account for his and his daughter’s benefit.

CD complained to the High Court about his brother’s use of EF’s funds. The High Court appointed Ms Watson to represent the interests of EF, who compiled reports expressing concern as to AB’s actions in continuing to remove funds from his mother’s account.

In light of AB’s actions and his failure to acknowledge that he had done anything wrong, Ms Watson applied to the High Court resulting in the order of Master Wells on 16 June 2023 discharging AB as co-attorney due to his breach of authority under Article 5 of the Enduring Powers of Attorney (NI) Order 1987.

On 19 March 2024, AB applied to be reinstated as attorney on the basis that CD was inactive in managing EF’s affairs and challenged the decision to remove him. On 23 May 2024, Master Wells refused AB’s application, as inter alia AB refused to accept that he did anything wrong and believed that his mother consented to and approved his use of her money for his and his daughter’s personal use. Costs were awarded against AB.

AB appealed the Master’s decision of 23 May 2024, seeking a variation of the order by receiving an apology from the Office of Care and Protection and his re-instatement as joint attorney of EF without any restrictions.

The High Court

Mr Justice McFarland considered AB’s arguments that Article 5(4) of the 1987 Order permitted him to act as he did as there were no restrictions in the power of attorney document, that he did not require consent as his mother “might be expected to provide for [their] needs”, that the words ‘needs’ and ‘might’ in the 1987 Order must be construed broadly, and that his conduct was not unreasonable given the size of his mother’s estate and her expressed intentions in her will.

The court set out Article 5(4) and (5) of the 1987 Order, which state that an attorney without consent can act to benefit himself and others if the donor might be expected to provide for their needs, that an attorney can do whatever the donor might be expected to do to meet those needs, could make gifts of a seasonal or celebratory nature to persons (including himself) related to or connected with the donor, and could make gifts to any charity to which the donor made or might be expected to make gifts, provided the value is not unreasonable having regard to the size of the estate and the circumstances.

Noting that the question for the Master was whether there had been any developments since 16 June 2023 that would require her to re-instate AB as an attorney, Mr Justice McFarland highlighted that CD as sole remaining attorney did not sufficiently engage with the management of his mother’s affairs.

The judge explained that progress could only be achieved by reinstating AB as attorney, or by appointing an independent controller under Part VIII of the Mental Health (NI) Order 1986 and Order 109 of the Rules of the Court of Judicature.

Finding the attitude which had concerned the Master “persisted in the hearing before me”, the court commented that “AB relies on the widest of interpretation of the words ‘needs’ and ‘might.’ Denning LJ in Seaford Court Estates v Asher [1949] 2 KB 481 at 499 observed that the English language is ‘not an instrument of mathematical precision’.”

The court summarised that “[a]t its core, the relationship between AB and his mother under the EPA is one of agent, and as such he owes her a fiduciary duty”, setting out that AB had authorised transfers of £120,000 to discharge a mortgage on his home in France, £12,000 to discharge his personal loans, £76,500 to discharge university fees for one of his daughters, £30,000 to him to purchase a car and £18,600 to cover his ‘personal necessities.

AB argued that he was obliged to move from France to care for his mother, which restricted his earning capacity and his ability to maintain his lifestyle and the educational needs of his daughter, and so in the circumstances the expenditure is something that his mother might have been expected to pay had she been capable of doing so.

The judge emphasised: “When approaching the interpretation of the words ‘might’ and ‘needs’ it is important to consider the full phrase in the legislation – ‘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 … he may do whatever the donor might be expected to do to meet those needs.’ AB’s approach to the meaning of the word ‘might’ is that these are circumstances that his mother might have agreed to transfer the money, in the sense that is was a possibility, however remote.”

Disagreeing with the appellant, the judge pointed out: “Such a wide interpretation is not justified when one considers the legislation as a whole and its general purpose. It has to be determined objectively taking into account what EF might do but not to the extent that EF might do anything with her money. It could never have been parliament’s intention to allow for such a wide interpretation as argued for by AB.”

The court confirmed that the wording should be interpreted to permit payment if it is a payment which fell within a range of decisions that EF, if she had capacity, could have made.

Finding that AB had failed to appreciate how his transfers would impact other family members intended to benefit under EF’s will in various shares, the High Court considered: “Even with a total estate in excess of £1 million, the payments…will make a significant impact on the distribution of the estate.”

Mr Justice McFarland did not consider that the gifts could ever be regarded as ones which EF might have approved of, stating that court approval, however unlikely to be given, should have been sought.

Accordingly, the Master’s decision was appropriate and the court could see no reason why AB should not pay the costs of the appeal.

Conclusion

Accordingly, the High Court dismissed the appeal.

AB v Jane Watson (as Controller of a Patient) & CD [2024] NIFam 7