Judge: Morgan J.
Citation:  EWHC 3005
Summary: In this case, Morgan J had cause to consider whether a Deputy could be required to make payments from the funds administered on behalf of a Mrs G to her adult daughter, C, by way of maintenance of C. It was common ground between the parties that he could only make an order in those terms if I was satisfied in accordance with the 2005 Act that such an order was in the best interests of Mrs G. Although the parties were agreed between themselves that he had power to make the order, and no one proposed to make submissions to the effect that he should not make the order, Morgan J recorded (at paragraph 9), that he felt that he would benefit from a detailed investigation of the matter and that he had invited counsel to assist him with their submissions as to why this part of the proposed order was in the best interests of Mrs G, within the meaning of the 2005 Act. Having considered those submissions, he reached his conclusion that it was in Mrs G’s best interests so to do, although he acknowledged that he had not had the benefit of adversarial argument on the point.
For present purposes, the decision is of particular importance for Morgan J’s consideration of what “best interests” means in the context of a lifetime gift. At paragraphs 34 ff, he held as follows:
“34. The phrase “best interests” is not defined. That might suggest that it was intended that the application of the phrase would be responsive to the particular issue which arises and the facts of the individual case.
35. The context in which issues as to “best interests” arise in the present case concerns the property and affairs of Mrs G, rather than her welfare and healthcare. As I have explained, the court is given power to make a lifetime gift of P’s property and to make a lifetime settlement of P’s property for the benefit of others: see section 18(1)(b) and (h). The court can also make a will for P: see section 18(1)(i). Further, I note that under section 12, the donee of a lasting power of attorney may make certain gifts and by section 9(4), the authority conferred by a lasting power of attorney is subject to the requirement that the donee acts in the best interests of the donor of the power. These various references to gifts, lifetime and testamentary, and settlements for the benefit of others, suggest to me that the word “interests” in the phrase “best interests” is not confined to matters of self interest or, putting it another way, a court could conclude in an appropriate case that it is in the interests of P for P to act altruistically. It seems unlikely that the legislature thought that the power to make gifts should be confined to gifts which were not altruistic or where the gift would confer a benefit on P (or the donor of the lasting power of attorney) by reason of that person’s emotional response to knowing of the gift.
36. Further help as to what is meant by “best interests” can be derived from section 4(6). Section 4(6)(a) refers to the past and present wishes and feelings of P. That suggests that giving effect to P’s actual wishes can be relevant to assessing P’s best interests. Section 4(6)(b) refers to the beliefs and values which would be likely to influence P?s decision if he had capacity. I regard section 4(6)(b) as considerably widening the matters which fall to be considered. The width of the relevant matters is further extended by section 4(6)(c) which refers to the other factors which P would be likely to consider if he were able to do so.
37. The provisions of section 4(6)(b) and (c) extend beyond the actual wishes of P. They refer to the matters which P would be likely to consider if he were able to make the relevant decision. P would be likely to consider any relevant beliefs and values and all other relevant factors. Therefore, the matters which the court must consider under these paragraphs of section 4(6) involve the court in drawing up the balance sheet of factors which P would be likely to draw up if he were able to do so. Of course, the ultimate question for the court is: what is in the best interests of P? The court will necessarily draw up its own balance sheet of factors and that may differ from P’s notional balance sheet. The court is not obliged to give effect to the decision which P would have arrived at, if he had capacity to make the decision for himself. Indeed, section 4(6) does not expressly require the court to reconstruct the decision which P, acting reasonably or otherwise, would have reached. Nonetheless, if the court considers the balance sheet of factors which would be likely to influence P, if P had capacity, the court is likely to be able to say what decision P would be likely to have reached. The court is not obliged to give effect to the decision which P, acting reasonably, would have made (the test of “substituted judgment”) but section 4(6) appears to require the court to consider what P would have decided (or, at least, the balance sheet of factors which P would be likely to have considered). My provisional view is that, in an appropriate case, a court could conclude that it is in the best interests of P for the court to give effect to the wishes which P would have formed on the relevant point, if he had capacity.”
Morgan J then considered the law as it stood prior to the enactment of the MCA 2005, and also the decisions in In re S (Protected Persons)  WTLR 315, In re P (Statutory Will)  Ch 33 and In re M  3 All ER 682 (aka ITW v Z). He held (at paragraph 52) that “the discussion in these three cases is of great help to me in identifying the general approach which I should adopt in the present case. However, those cases did not need to focus upon a matter which is of importance in the present case, namely, whether in the absence of any other competing consideration, a court could decide that it is in the best interests of P to give effect to the wishes which P would have formed (but had not in fact formed) on the relevant topic.”
He then concluded:
“55. The best interests test involves identifying a number of relevant factors. The actual wishes of P can be a relevant factor: section 4(6)(a) says so. The beliefs and values which would be likely to influence P’s decision, if he had capacity to make the relevant decision, are a relevant factor: section 4(6)(b) says so. The other factors which P would be likely to consider, if he had the capacity to consider them, are a relevant factor: section 4(6)(c) says so. Accordingly, the balance sheet of factors which P would draw up, if he had capacity to make the decision, is a relevant factor for the court’s decision. Further, in most cases the court will be able to determine what decision it is likely that P would have made, if he had capacity. In such a case, in my judgment, P’s balance sheet of factors and P’s likely decision can be taken into account by the court. This involves an element of substituted judgment being taken into account, together with anything else which is relevant. However, it is absolutely clear that the ultimate test for the court is the test of best interests and not the test of substituted judgment. Nonetheless, the substituted judgment can be relevant and is not excluded from consideration. As Hoffmann LJ said in the Bland case, the substituted judgment can be subsumed within the concept of best interests. That appeared to be the view of the Law Commission also.
56. Further, the word “interest” in the best interests test does not confine the court to considering the self interest of P. The actual wishes of P, which are altruistic and not in any way, directly or indirectly self-interested, can be a relevant factor. Further, the wishes which P would have formed, if P had capacity, which may be altruistic wishes, can be a relevant factor. It is not necessary to establish that P would have been aware of the fact that P’s wishes were carried into effect. Respect for P’s wishes, actual or putative, can be a relevant factor even where P has no awareness of, and no reaction to, the fact that such wishes are being respected.”
Having gone through the various items set down in the checklist at s.4 MCA 2005, Morgan J concluded on the facts of this case (at paragraph 65) that:
“Having identified the factors as best I can, it emerges that the principal justification, so far as Mrs G is concerned, for making the order for maintenance payments in favour of C, is that those payments would be what Mrs G would have wanted if she had capacity to make the decision for herself. I recognise that this consideration is essentially a “substituted judgment” for Mrs G. I am also very aware that the test laid down by the 2005 Act is the test of best interests and not of substituted judgment. However, for the reasons which I have tried to set out earlier, the test of best interests does not exclude respect for what would have been the wishes of Mrs G. A substituted judgment can be subsumed into the consideration of best interests. Accordingly, in this case, respect for what would have been Mrs G’s wishes will define what is in her best interests, in the absence of any countervailing factors. There are no such countervailing factors here. I therefore conclude that an order which provides for the continuation of maintenance payments to C is in the best interests of Mrs G.”
Comment: In the views of the authors, this decision is one that must be read with very considerable care and, in particular, is not authority for a return to the substituted judgment test (albeit that, on one view, it could be seen as a significant rowing back from the very clear statement in Re P that – at least in the context of statutory wills – this test is now entirely inappropriate). Rather, on a proper analysis, it is authority for the fact an element of substituted judgment can be subsumed into the consideration of best interests, and that, absent any countervailing factors, respect for what the Court can identify to have been P’s wishes can define what would be in her best interests.