PSG Trust Corporation Ltd v CK & Anor
Summary
Practice Direction Practice Direction 9E supplements Part 9 of the Court of Protection Rules and deals with applications relating to statutory wills, codicils, settlements and other dealings with P's property.
Paragraph 9 of PD 9E provides that:
The applicant must name as a respondent - (a) any beneficiary under an existing will or codicil who is likely to be materially or adversely affected by the application; (b) any beneficiary under a proposed will or codicil who is likely to be materially or adversely affected by the application; and (c) any prospective beneficiary under P's intestacy where P has no existing will.
In BH v JH [2024] EWCOP 12, DDJ Weereratne had to decide whether to dispense with service on potential beneficiaries on an application to vary a statutory will. The decision, as a decision of a Deputy District Judge, does not have precedent value, but we note it here because it is the first reported case where the specific issue to which it gave rise has been considered.
There were 2 classes of beneficiary affected. One class were P’s carers who were potential beneficiaries under a discretionary trust. It was proposed that the size of the trust be increased so that they would stand to benefit from the changes.
The other class was a residuary class benefitting under a gift to unnamed charities. The increase in the trust reduced pro rata the potential value of the residuary gift.
The applicant (P’s deputy) argued that neither class should be notified. Regarding the carers, he argued that the fact that the effect was in their favour meant that the PD did not apply and that, in any event, there were exceptional circumstances pursuant to the guidance in Re AB [2014] COPLR 381 and I v D [2016] COPLR 432, namely that if they were notified, there was potential for discord and harm to P’s care regime.
Regarding the residuary beneficiaries, the applicant argued that there would be no point and that notification would be disproportionate and in some way paternalistic towards him.
The OS argued that the Practice Direction was in mandatory terms, that it applied whether the material effect was positive or negative, but she agreed that there were exceptional circumstances as described to dispense with service on the carers.
As regards the residuary beneficiaries, the Official Solicitor argued that there was no reason to dispense with service, natural justice required it and the cost was not disproportionate to the size of P’s estate (£12m).
DDJ Weereratne held that the Official Solicitor was correct in all respects, dispensing with service on the carers but not in relation to residuary beneficiaries (which would be on the Attorney-General). See paragraphs 40-52 of the judgement. In particular, the judge held that, in relation to the residuary beneficiaries, the deputy had fundamentally misunderstood the rationale behind the PD, namely that it is there to serve the interests of natural justice and is not in any sense dependent on P’s best interests (see paragraph 49).
That finding, in particular, led to the Official Solicitor applying for a departure from the usual order for costs in cases involving property and affairs (that is to say that all parties’ costs are borne by P’s estate). DDJ Weereratne gave a separate judgment on that issue [2024] EWCOP 9. By a given date before the hearing, the Official Solicitor had agreed that service on the carers could be dispensed with and had made clear her objections in relation to the beneficiaries, citing the relevant case law. DDJ Weereratne referred to the relevant rules, namely Court of Protection Rules 2017 (COPR) 19.2: "costs of the proceedings, or of that part of the proceedings that concerns P's property and affairs, shall be paid by P or charged to P's estate."
The court noted that it has a discretion to depart from the usual rule in COPR 19.2 "if the circumstances so justify": rule 19.5(1) and that rule 19.5(1) further provides that:
in deciding whether departure is justified the court will have regard to all the circumstances including -
(a) the conduct of the parties,
(b) whether a party has succeeded on part of that party's case, even if not wholly successful; and
(c) the role of any public body involved in the proceedings.
Rule 19.5(2) provides that the conduct of the parties includes -
(a) the conduct before, as well as during, the proceedings;
(b) whether it was reasonable for a party to raise, pursue or contest a particular matter;
(c) the manner in which a party has made or responded to an application or a particular issue;
(d) whether a party who has succeeded in that party's application or response to an application in whole or in part, exaggerated any matter contained in the application or response; and
(e) any failure by a party to comply with a rule, practice direction or court order.
DDJ Weereratne held that, after the Official Solicitor had agreed to dispensation with regard to the carers, the deputy should have agreed to that and a draft consent order would have been all that was required. DDJ Weereratne therefore found that the deputy’s conduct thereafter was unreasonable so from that date the deputy would have to bear his own and P’s costs.
