Bunting (Receiver of M, a Patient) v W [2005] EWHC 1274

The applicant B, appointed under the Mental Health Act 1983 as a receiver in respect of a patient, (M), sought an order against the respondent (W) that the accounts W delivered in his capacity as previous receiver of M for the year ending April 1994 and thereafter annually until year ending April 2002 be re-opened or set aside.  M was involved in a road traffic accident and suffered severe injuries.  Personal injury proceedings were brought on his behalf and were later settled.  About eight months later W was appointed as M’s receiver. However, by a court order, W was removed as receiver and B was appointed in his place. At the hearing it was alleged that W had taken advantage of M financially over the last nine years.  In particular, it was alleged that the actual expenditure for M’s care and maintenance was far less than that obtained by W from the funds held on behalf of M. The court gave B authority to appoint an expert to calculate the quantum of the apparent profit made by W from his role of receiver.  B submitted that W’s conduct was fraudulent, alternatively a negligent misstatement, or pure negligence in relation to the accounts which he had produced year on year for approval from the Court of Protection, and that there was substantial diversions of money which was supposed to be spent on M, for the benefit of W and his wife instead.

The court held that the relationship of a receiver with a patient was that of a fiduciary and like all fiduciaries he was not entitled to benefit from that relationship.  However, he was entitled to recover general expenses where they related to the property or welfare of the patient.  The expert report produced by B showing how W’s expenditure had far exceeded the actual value of the services provided to M, was not accurate.  In particular, the maker of the report had no access to W and his wife to determine how they would value their services and what they did in order to attend to M’s needs.  W’s account had followed the same form as the approved accounts of previous receivers.  Although the payments total sum was substantially in excess of the monthly payments previously paid, that was attributable entirely to capital projects all of which were agreed in advance with the Court of Protection.  None of the accounts ever attracted a query from the court over the nine years of the receivership, and nothing was hidden. Therefore, it could not be said that the accounts were fraudulent or misleading.  B had not made out a sufficiently clear case for it to be said that there was material which justified the ordering of an account.  The evidence provided was speculative and not founded on any clear basis.  Further, where a fixed sum had been ordered in respect of maintenance of a patient, the court would not require an account, save in the case of fraud or misrepresentation or where the services had not actually been provided or the patient was not being properly maintained, Jodrell v Jodrell (1851) applied.  However, where the payments were not a fixed sum but a general permission to spend such sums as were necessary for the maintenance of the patient then the receiver would have to account under the Court of Protection Rules 2001 r.61.   That conformed to a general Court of Protection practice that the payments were to be a fixed sum payable for maintenance.  In the accounts for all the receivers the payments were identified as such. There was no fraud or mistake and no question of a failure to provide maintenance.

Application refused.

Commentary

This case shows how hard it can be to prove misuse of funds by a person entrusted and regulated by the Court of Protection.

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