Deputies, fixed costs, detailed assessment and net assets

In Penntrust Ltd v West Berkshire District Council & Anor [2020] EWCOP 48, HHJ Hilder has returned to the vexed question of Practice Direction 19B and fixed costs in the Court of Protection.  In its current iteration, PD19B provides that “where the net assets of P are below £16,000,” the option for detailed assessment of costs of the estate “will only arise if the court makes a specific order.”

The Applicant trust corporation was formerly appointed as property and affairs deputy for a woman called AH. At all times during the deputyship P’s liquid assets were less than £16,000 but her total assets, including a property in which she lived, were substantially higher. The deputyship order included authorisation to seek SCCO assessment but made no explicit reference to the size or nature of AH’s estate. The Applicant contended that it was entitled to rely on the authorisation in its deputyship order to seek SCCO assessment of its costs. In the event that the court did not agree, the Applicant sought retrospective authority to obtain SCCO assessment.  The Respondent local authority, which was now the property and affairs deputy, wanted to understand what debt AH had incurred; the Public Guardian sought no specific outcome, but to seek to assist the court.  Neither the local authority nor the Public Guardian sought a specific outcome in relation to the Applicant’s application.

Section 19(7) MCA provides that deputies are 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 Charles J identified in Re AR [2018] EWCOP 8, a decision as to remuneration is a “best interests” decision, to be determined by reference to the individual facts of a particular case.

The range of options for remuneration is set out in Rule 19.13, and amplified by a Practice Direction, PD19B.  There have been two versions (for present purposes): the old version which was effective between 1 February 2011 and 30 March 2017; and the version which has in effect since 1 April 2017.  The old version had a footnote explaining that “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;” the new version has no explanation.  There has been no guidance or explanation for the removal of the footnote.  Neither the versions before 2011 nor the pre-Mental Capacity Act equivalent had the footnote in.   Contrary to the arguments of the Public Guardian that the footnote definition should be carried over into the new version, Senior Judge Hilder held that the 2011-2017 version was an outlier at (paragraph 72) that:

the definition from the 2011-17 version of Practice Direction 19B does not somehow “carry over” into the current version from which it is omitted. The term “net assets” in the version of PD19B effective from 1st April 2017 falls to be interpreted according to the ordinary meaning of the phrase, as “total assets minus total liabilities.”

On the facts of the case, and in light of this interpretation, Senior Judge Hilder held that the Applicant was always authorised by the deputyship order to obtain SCCO assessment of its costs.

Going forwards, Senior Judge Hilder (at paragraph 86) held that:

to avoid the necessity for proceedings such as these, where a deputy is appointed in respect of a net estate worth – at the time of appointment – less than £16 000 (within the meaning current at the time of appointment) but with authority to seek SCCO assessment, the decision-maker (either judge or Authorised Court Officer) should make explicit reference to the nature of the estate and paragraph 12 of PD19B in the wording of the order (as has been the practice at the central registry for some time.) Additionally, the deputy should check the terms of the costs authorisation carefully on first receipt of the order. If it includes the option of SCCO assessment but does not expressly confirm that such authorisation applies even where the net estate is worth less than £16 000 for the purposes of paragraph 12 of Practice Direction 19B, the deputy should make a speedy COP9 application pursuant to Rule 13.4 of the Court of Protection Rules 2017 for reconsideration. Such an approach would be of minimal cost to P and would avoid future argument.