Added capacity

For practitioners involved in adults with incapacity law, several recent sheriff court decisions are worth reading.

Applications for directions

In both Application by the Public Guardian for Directions (Sheriff Baird, Glasgow, 30 June 2010) and Morton, Minute for Directions (Sheriff Holligan, Edinburgh, 21 July 2010), applications were brought under s 3(3) of the Adults with Incapacity (Scotland) Act 2000, seeking directions from the sheriff. And in YW v Office of the Public Guardian (Sheriff Lewis, Peterhead,

25 June 2010), the applicant also sought a direction from the sheriff, albeit as an ancillary order under s 3(1) of the 2000 Act.

Prior to these decisions (all available on the Scottish Courts website), there do not appear to have been any reported cases involving applications brought under s 3. Clearly applications of this nature are appropriate only in limited circumstances, where the applicant requires specific guidance from the court. These cases demonstrate the use of s 3 in the practical administration of guardianships and powers of attorney.

Thought must be given as to how directions are craved. The solicitor will require to frame specific questions within the craves and to narrate the relevant circumstances in the condescendence. Needless to say, depending on the facts and circumstances (and parties), the issues at large might be canvassed at some form of inquiry. The fluidity of the 2000 Act appears to sanction such inquiries, though that can lead to some procedural difficulties.

The method of any application needs consideration. The court must make such orders or directions as are appropriate, in accordance with s 1 of the Act. It may be that the result sought can be achieved through more than one section. However, practitioners should note that where there is an ongoing court process, any application should proceed by way of minute. Where there is no process (i.e. it would be a new action), the correct procedure is by summary application.

Enquiries as to an adult’s capacity

It is likely that applications brought under s 3 will be limited to cases of some novelty. Thus in Application by the Public Guardian, the Public Guardian (PG), faced with an unusual situation, sought directions in relation to the exercise of her powers under the 2000 Act. Of wider interest is the subject matter. An attorney raised concerns with the PG’s office about the adult’s capacity to purportedly revoke their existing power of attorney and confer a new power on a third party. When the revocation and new power of attorney were received by her office, the PG sought a direction from the sheriff as to whether the documents should be registered.

Ultimately, the sheriff fixed a proof about the adult’s capacity and the circumstances surrounding her instruction to her new solicitor. The court appointed a safeguarder who, in turn, instructed an expert medical report in relation to the adult’s mental health. It transpired that the adult had been admitted to hospital shortly prior to meeting with the new solicitor. During that time, the adult’s mental health had been assessed, and she was found to be suffering from dementia. Unsurprisingly perhaps, the adult did not make the solicitor aware about her health when instructing the new power of attorney. However, neither was there any relevant inquiry by the solicitor.

As the sheriff records, there is a presumption in favour of an adult’s capacity. Such presumption might add to the difficulty for practitioners in balancing their client’s instructions with the discharge of their statutory declaration concerning the adult’s capacity. Of help and interest to practitioners will be the sheriff’s comments about the type of enquiries which solicitors might undertake when receiving a client’s instructions – particularly where such instructions concern the revocation of an existing power of attorney. Also of interest will be the sheriff’s summary of the medical expert’s view: that capacity is decision-specific and while a person may appear lucid, they may be incapable of performing some functions.

Guardian as executor dative

In Morton, Minuter, the court was asked for directions as to whether the powers conferred in a standard guardianship order were sufficient to allow the guardian to be appointed as executor dative qua guardian to the adult, whose husband had died.

Given the wide-ranging terms of the guardianship order, the guardian took the view that power was conferred on him to seek appointment as executor dative. The first question before the court was whether the guardianship order did convey such power. The second question was whether an application was competent. There appeared to be no judicial authority on this matter. However, there is some analogous authority in Currie on Confirmation, which narrates the previous law relating to curators. On one reading of that authority, it might have been open to a guardian to simply lodge an inventory and sign it as executor dative. However, that would likely create practical problems for the guardian, not least in dealings with third parties, including sheriff clerks.

In the end, Sheriff Holligan held that the proposed application by the guardian for appointment as executor dative was competent and that it was the appropriate way to proceed. It is likely that this decision may have a positive effect in practice. The decision may also have a bearing on the position of attorneys who seek appointment as executor dative.

Access to funds order

The final case in which directions were sought under s 3, YW v OPG, was an appeal by an adult against a decision of the PG to grant a (court appointed) welfare guardian an access to funds order. Section 31D of the Act allows such a decision to be appealed to the sheriff. The circumstances are case specific. In short, the access to funds order was sought and granted due to concerns that the adult was mismanaging her financial affairs, due to her incapacity. The case proceeded to inquiry on the issue of whether and how to intervene in the financial affairs of the adult.

As in the preceding two cases, the adult sought a direction under s 3, to allow her to retain some control of her finances. Sheriff Lewis was persuaded that such order was appropriate, though the order was granted under s 24A of the Act as opposed to direction under s 3. This case demonstrates, again, the consistent attitude of the courts to considering the interests of the adult and making decisions which are the least restrictive under judicial intervention.

Expenses

Of perhaps more importance to practitioners is the authority offered by Petition by Matthew for renewal of a Guardianship (Sheriff Davidson, Dundee, 20 May 2010, Scottish Courts website).

This case concerns the level of expenses which should be awarded to guardians in respect of applications for appointment. It is normal that expenses in relation to applications under the 2000 Act should be taxed on the basis of agent and client, client paying. This practice has roots in previous, pre-2000 Act procedures for the regulation of the affairs of an incapacitated adult.

However, in Applications under the Adults with Incapacity (Scotland) Act 2000 by Francis Galashan and John Scott Lynn (Edinburgh, 7 July 2008), Sheriff Mackie decided that if expenses are sought and awarded on an agent and client basis, then this should be reflected in the interlocutor. In that particular case, the interlocutors in question simply referred to “the expenses of the application”. Sheriff Mackie held that expenses should be taxed on a party and party basis. There were a number of reasons for this, including the fact that the estates in question were relatively small and taxing expenses on an agent and client basis would reduce their value significantly (by 5% and 12% respectively).

Sheriff Davidson came to a different conclusion in Matthew, after analysing various authorities, including Sheriff Mackie’s judgment. It would do injustice to this decision not to recommend it for consideration. However, for the purposes of this article, practitioners may find the final paragraph (para 18) of most importance: the sheriff holds that the applicant was entitled to an award of expenses to be assessed on the basis of agent and client, client paying.

There are two caveats: the award of expenses must be appropriate, and the expenses are limited to those “reasonably and necessarily incurred”. Nevertheless, the sheriff observed that such an award “reflects the correctness of ensuring that someone prepared to take responsibility in a fiduciary capacity is not personally out of pocket for doing so”.

It might be prudent, however, to adhere to Sheriff Mackie’s comment that the interlocutor specifically notes the scale on which expenses are to be awarded. 

Exceptional expense

Another decision relating to expenses is worthy of note. In Remuneration of a Financial Guardian under Section 68 of the Adults with Incapacity (Scotland) Act (Sheriff Baird, Glasgow, 21 July 2010) two conjoined appeals were brought by the same guardian against decisions of the PG to limit the guardian’s expenses. The procedural history of these cases arises out of the conversion of former curatories into guardianships.

The appeals were brought under s 68(8) of the 2000 Act. The applicant contended that his requirement to undertake work to apply for guardianships was “exceptional” and thus merited an uplifted fee based on a “time and trouble” account (which the applicant himself limited). The PG contended that the information required was within the applicant’s knowledge, as he had acted as curator bonis to both adults for some years.

In reaching his decision that the cases were exceptional, Sheriff Baird considered the situation afresh (his function was not to judicially review the PG’s decision). He held that additional and unforeseen work was required to meet the applicant’s statutory duties in these cases.

However, there is a word of warning: the sheriff noted that guardians who know that they may require to renew applications in the future should budget for such costs going forward. In other words, under the present scheme, guardians will be aware of the duration of their orders and must know when a renewal is necessary from the outset.

Roddy MacLeod is an associate with Morton Fraser LLP

I am very grateful to Sandra McDonald, the Public Guardian, who commented on a draft of this article.

Powers of the sheriff

Section 3 of the Adults with Incapacity (Scotland) Act 2000 provides:

“(1) In an application or any other proceedings under this Act, the sheriff may make such consequential or ancillary order, provision or direction as he considers appropriate….

“(3) On an application by any person (including the adult himself) claiming an interest in the property, financial affairs or personal welfare of an adult, the sheriff may give such directions to any person exercising– (a) functions conferred by this Act; or (b) functions of a like nature conferred by the law of any country, as to the exercise of those functions and the taking of decisions or action in relation to the adult as appear to him to be appropriate.”

Stop press

A very recent decision, City of Edinburgh Council v D, Sheriff Reith, 1 October 2010, contains a further useful note especially on s 71(c) recall of guardianship