The Public Guardian v Matrix Deputies Ltd & anor Neutral citation: [2017] EWCOP 14

WTLR Issue: Winter 2018 #170






This judgment concerned proceedings brought by the Public Guardian seeking (1) discharge of all appointments of Matrix Deputies Ltd (Matrix) and its employees DW and OM as property and affairs deputy; (2) the refusal of any pending applications; and (3) the appointment of either the local authority or a panel deputy instead. 

There was ultimately no contested hearing in this matter. The appointments of OM and DW were discharged and they were discharged from proceedings with their consent. Matrix continued to contest the applications until a matter of days before the final hearing, at which point it reached an agreement with the Public Guardian effectively conceding the substantive applications on a basis of no admissions. Nevertheless, HHJ Hilder identified a public interest in an account of the proceedings being available. 

By way of background, HHJ Hilder described Matrix as being, on its own account, ‘a business with its core operations being supporting those people who are not able to manage their financial affairs by themselves’ [6]. It was incorporated on 8 December 2010 with a share capital of £3 divided equally between three directors. Matrix, and its three directors, were not subject to any professional regulatory body in respect of the day-to-day services they provide, other than the supervisory role of the Public Guardian. 

It appeared that the London Borough of Enfield (Enfield) entered into an arrangement with Matrix for referral of clients. Following a souring in relations Enfield brought this arrangement to an end. 

The core of the allegations made by the Public Guardian in a position statement 
for a hearing on 17 February 2016 was that Matrix had failed in its duty of care to the individuals named in Sch 1 and that the general conduct of Matrix and its pattern of 
behaviour gave rise to serious concerns in relation to its management practices. The Public Guardian alleged that this was compounded by the concerns in relation to Matrix’s 
involvement (without any ostensible authority) in Sch 2 and 3 cases after DW and OM ceased working there.

The order made at this hearing required Enfield as interim deputy to investigate the past dealings of Matrix in the property and affairs of their allocated persons and to set out their findings in a written report. The order specifically required Matrix, DW and OM to deliver up all soft and hard copy files in their possession relating to the relevant persons. The investigations were carried out by PwC. 

The first report detailed and identified many specific concerns, including incomplete disclosure of documentation by Matrix. Accordingly, on 18 May 2016 Senior Judge Lush granted an application by Enfield for ‘an entry order’, with the proviso that it would not be enforced if Matrix handed over further specified data by 22 July. Matrix duly did so. 

The allegations made against Matrix at the hearing were, inter alia, (1) excessive fee charging; (2) inappropriate/inadequate arrangements for holding/recording client funds and transactions; (3) conflicts of interest arising from inappropriate relationships with other bodies; and (4) failure to prove information requested/comply with orders for disclosure. 

Matrix did not admit most of the allegations. It did however accept some accounting discrepancies without giving any adequate explanation, and fully admitted that it received payments from an estate agency in respect of the sale of properties belonging to 
different Ps. 

This arrangement – which involved the receipt of a 0.5% commission by Matrix from a particular estate agency which charged each P 1.5% – was clearly in breach of the fiduciary duties owed to P not to profit from their position or put themselves in a position where their interest and duties could conflict (see para 8.58 of the Code of Practice). 

Due to the fact that, after 20 months of litigation, Matrix conceded the applications, 
HHJ Hilder was unable to make findings of fact. However, the judge considered that in deciding whether or not it was in the best interests of each P to make orders which determined the applications and gave effect to the agreement between Matrix and the Public Guardian, the court was entitled to have regard to the following factors: 

  1. (1) The nature of the allegations which formed the basis of the applications. 

  2. (2) The fact that Matrix chose not to contest the allegations. 

  3. (3) The limited admissions. 

HHJ Hilder concluded at [21] that she was satisfied that Matrix was not a suitable organisation for either continued or new appointment of its authorised officers as a property and affairs deputy for any of the individuals identified in the schedules, and it was in the best interests of each of the individuals in the schedules for such appointment to be discharged or refused.

As to costs: the Public Guardian and Matrix agreed that each of them would bear their own costs, in departure from r156 of the Court of Protection Rules. Costs between Matrix and Enfield were not agreed. Enfield sought an order that Matrix should pay its costs, including costs incurred in the investigative process, on an indemnity basis. 

Enfield’s counsel pointed to the increased costs occasioned by Matrix’s failure to disclose on time, and the power of the court referred to by Cobb J in JS v KB & MP [2014] EWCOP 483 to make costs orders where the substantive proceedings had been resolved without a trial. Enfield’s counsel also relied upon the conduct of Matrix before the issue of proceedings. 

Matrix made various arguments in response. It sought to characterise the proceedings as an aspect of the fallout between Matrix and Enfield [31]. Matrix’s representative also relied on two without prejudice letters, in the first of which Enfield’s position was the same as argued at the hearing, and in the second of which Enfield stated that it was willing to waive costs if Matrix relinquished all corporate appointees made under the May 2015 contract. 

HHJ Hilder was ‘wholly unimpressed’ by the arguments made on behalf of Matrix [36]. The second letter was a lifeline in respect of costs which Matrix chose not to take. The fact that Matrix chose not to take it indicated to the court that Matrix intended to continue offering the services of appointee (over which the court did not have jurisdiction) even as it had not contested serious allegations in respect of the conduct of its court-made appointments [37]. In this regard, HHJ Hilder noted that a copy of the order and judgment of these proceedings would be sent to DWP, as the allegations made against Matrix had clear relevance to its appointeeships. 

HHJ Hilder concluded at [39] that she was satisfied that the circumstances of the case justified a departure from r156 as the conduct of Matrix Deputies both before and after the issue of proceedings had fallen well below that which is expected of a court-appointed deputy. Matrix had admitted breach of fiduciary duties and had failed to comply with court orders. The applicant had wholly succeeded in the applications against Matrix, and that success had been substantially founded on the investigative reports which the court ordered London Borough of Enfield to obtain. In the circumstances, it was entirely appropriate that Matrix Deputies Ltd should bear the costs of London Borough of Enfield, to be assessed by the Senior Courts Costs Office. 

HHJ Hilder also decided at [42] that the costs should be assessed on an indemnity basis as she was satisfied that the case was ‘wholly outside the norm’ of proceedings before the Court of Protection. 

 [1] These proceedings concern some 44 individuals whose property and affairs either are already managed by a court-appointed deputy or are the subject of an application for such appointment. A further eight individuals were previously also the subject of these proceedings but they have died during the course of the litigation, …
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Counsel Details

Claire van Overdijk (Outer Temple Chambers, The Outer Temple, 222 Strand, London WC2R 1BA, tel 020 7353 6381, e-mail for the applicant. 

Obi Nwokeji (OJN Solicitors, 12 London Road, Enfield EN2 6EB, tel 020 3232 2135, e-mail for the first respondent.

Michael Paget (Cornerstone Barristers, 2-3 Gray’s Inn Square, London WC1R 5JH, 
tel 020 7242 4986, e-mail for the second respondent.

Cases Referenced

Legislation Referenced

  • Mental Capacity Act 2005