Penntrust Ltd v West Berkshire District Council & Anor [2020] EWCOP 48 (28 September 2020)

Background

PennTrust Limited was appointed as property and financial affairs deputy for P, a 93-year-old lady.  At all times during the deputyship, P’s liquid assets were below £16,000 but her total assets, including a property in which she lives, were substantially higher.

The terms of the deputyship order provided “the deputy is entitled to receive fixed costs in relation to their application and to receive fixed costs for the general management of the affairs of [AH].  If the deputy would prefer the costs to be assessed, the order is to be treated as authority to the Supreme Courts Costs Office to carry out a detailed assessment on the standard basis”.

By COP1 application dated 3 January 2019, PennTrust Limited applied for:

  1. its appointment as property and affairs deputy to be discharged;
  2. authority to bill costs which had been incurred between 6 October 2014 and 5 October 2017 and assessed in the sum of £34,935.95;
  3. authority to have costs from 6 October 2017 to the date of discharge assessed by the SCCO; and
  4. authority to secure a charge against 25CW in relation to all outstanding costs.

By order made on 6 November 2019, the case was transferred for initial consideration on the papers.  The issues to be considered were identified as follows:

  1. whether D should be discharged as a party to the proceedings;
  2. whether the OPG should be invited to join the proceedings;
  3. whether the Applicant should have applied to the SCCO for detailed assessment of its professional fees (and is entitled to charge the assessed bills) against [AH’s] estate pursuant to:
  4. paragraph 4 of the deputy order issued on 6 October 2014;
  5. Practice Direction 19B as applicable to professional deputy costs for remuneration periods ending on or before 31 March 2017; and/or
  • Practice Direction 19B as applicable to professional deputy costs for remuneration periods ending on or after 1 April 2017;
  1. Whether “net assets” for the purposes of PD19B as applicable to professional deputy costs for remuneration periods ending on or after 1 April 2017 does or does not include the property P is living in;
  2. in the event that the Applicant is/was not authorised to seek assessment of any or all of its assessed costs by the SCCO, whether the Court will grant retrospective authorisation in relation to any fees already assessed for which the Applicant was not entitled to seek assessment and whether the court will authorise details assessment in relation to any unauthorised fees for which the Applicant is not presently authorised to seek assessment and authorise the applicant to charge the same;
  3. in the event that the court determines that some or all of the Applicant’s fees (as assessed or to be assessed) are payable by [AH], whether it is in [AH’s] best interests for the court to make orders in relation to the charge against [AH’s] property proposed by the Applicant to discharge its professional fees and, if so, the appropriate orders to make.

Of the above issues, a and b were resolved before the final hearing.

The law

Section 19(7) of the Mental Capacity Act 2005 provides as follows:

(7) The deputy is entitled-

(a) to be reimbursed out of P’s property for his reasonable expenses in discharging his functions, and

(b) if the court so directs when appointing him, to remuneration out of P’s property for discharging them.

As set out by Charles J in Re AR [2018] EWCOP8, a decision as to remuneration is a best interests decision, to be determined by reference to the individual facts of a particular case.

Further provision regarding costs can be found in Part 19 of the Court of Protection Rules 2017 and Practice Direction 19B.

For the purposes of these proceedings, there were two versions of Practice Direction 19B which were relevant:

  1. “the old version,” which was effective between 1 February 2011 and 30 March 2017; and
  2. “the current version,” which has been in effect since 1 April 2017.

The two versions of Practice Direction 19B differ in the extent of information provided to aid interpretation of the term “net assets”.  The current version offers no explanation whereas the old version includes a footnote in the following terms:

* Net assets includes any land or property owned by P except where that land or property is occupied by P or one of P’s dependents”.

Findings

HHJ Hilder determined that “net assets” for the purposes of Practice Direction 19B as applicable to professional deputy costs for remuneration periods ending on or after 1 April 2017 should be understood to have its ordinary meaning of “total assets less total liabilities”.  P’s occupation of property does not exclude it from the quantification of assets for the purposes of the Practice Direction.  (Realisation of such costs is a separate issue.) [paragraph 95]

“Going forwards, it is not commonly the case that costs of deputyship higher than the fixed rate regime will be appropriate where P’s assets are less than £16,000 but such cases do occur.  In order to avoid the need for proceedings of this type in the future, where a deputy is appointed in respect of such an estate but with the authority to seek SCCO assessment of their costs, the authorisation should explicitly state that it applies in the context of such an estate.  If those are the circumstances when the appointment is made but the order does not explicitly confirm it, the deputy should make an application for clarification promptly upon the order being issued”.  [paragraph 97]

Learning points

This judgment will come as a relief to many Court of Protection practitioners.  As HHJ Hilder noted, payment of costs is a separate issue (and challenge) and practitioners may wish to consider ways to help ensure their costs will ultimately be paid.  Although it may not always be in P’s best interests for a separate application to be made to the Court of Protection to ensure professional costs are secured by charge, inserting a restriction against the title to ensure the permission of a named person before any disposition of the property may be possible and may offer some protection.  Such a restriction is relatively commonly made by deputies as a way to help protect P’s interest in property.

The full judgment can be found at: https://www.bailii.org/ew/cases/EWCOP/2020/48.html.

(Author: Holly Chantler)