Powers of attorney [Second edition.] 9780409337914, 0409337919

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Powers of Attorney Second Edition

G E Dal Pont Professor Faculty of Law, University of Tasmania

LexisNexis Butterworths Australia 2015

AUSTRALIA

ARGENTINA AUSTRIA BRAZIL CANADA CHILE CHINA CZECH REPUBLIC FRANCE GERMANY HONG KONG HUNGARY INDIA ITALY JAPAN KOREA MALAYSIA NEW ZEALAND POLAND SINGAPORE SOUTH AFRICA SWITZERLAND

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National Library of Australia Cataloguing-in-Publication entry Author: Title: Edition: ISBN: Notes: Subjects: Dewey Number:

Dal Pont, G E (Gino Evan). Powers of attorney. 2nd edition. 9780409337907 (pbk). 9780409337914 (ebook). Includes index. Power of attorney. Attorney and client. 346.029.

© 2015 Reed International Books Australia Pty Limited trading as LexisNexis. This book is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Neither may information be stored electronically in any form whatsoever without such permission. Inquiries should be addressed to the publishers. Typeset in Plantin. Printed in Australia by Ligare Pty Ltd (NSW). Visit LexisNexis Butterworths at www.lexisnexis.com.au

Preface

The first edition of this work appeared in 2010 and at the time represented the first discrete scholarly treatment of the increasingly pervasive topic of powers of attorney since 1992.1 In the intervening period, it retains that distinction. The opportunity has presented itself within this edition to bring to the fore the latest case law on powers of attorney in the common law world, albeit primarily to place Australian law in its context. Yet as Australian case law on powers of attorney is not extensive, I have retained and developed its focus on case authority from other common law jurisdictions to assist the reader in a hopefully broader understanding of the issues that can arise in this regard. At least from an Australian perspective, however, where the greatest change has ensued in the last five years or so derives not from the judiciary but from the legislature. These include significant amendments to the existing New South Wales and Tasmanian powers of attorney legislation, coupled with the introduction of a new statutory scheme in the Northern Territory for what were previously enduring powers of attorney. And after delivering the manuscript, but before receiving the first page proofs, the Victorian Parliament passed a dedicated Powers of Attorney Act 2014. While at the time of writing this Preface the 2014 Act had not entered into force, I have nonetheless included reference to its provisions (in addition to those of the existing legislation) in the text and notes, highlighting the salient (and important) changes. Like the first edition, this work does not purport to be a ‘how to’ manual, though its content can no doubt inform the creation and operation of powers of attorney in practice. Nor, again, does it develop the use of powers of attorney in the context of health and personal decisions, to which statute in some jurisdictions has extended the ‘power of attorney’ terminology, as this falls outside the traditional notion of a power of attorney. For her excellent proofreading and editing, I am (again) indebted to Felicia Gardner. For managing the project my thanks extend to Hayley Moore of

LexisNexis. I have benefited from correspondence with Paul Touhy of LawyerAssist, and Darryl Browne of Linkenbagh Legal Services, for which I am grateful. As always, the staff of the University of Tasmania Law Library very much deserve credit for their untiring assistance in securing access to relevant material. The law in this work is stated to material available to me as at 16 September 2014. G E Dal Pont Hobart

1.

Namely B Collier and S Lindsay, Powers of Attorney in Australia and New Zealand, The Federation Press, Sydney, 1992.

Table of Cases

References are to paragraphs 331399 Alberta Ltd v Worthington Properties Inc (2010) 77 BLR (4th) 136 . … 3.42 A A and J (2006) 48 SR (WA) 67; [2006] WASAT 359 .… 10.28 A & J Inglis v John Buttery & Co (1878) LR 3 App Cas 552 .… 6.10 AAGT Private Loans Pty Ltd v Ferguson [2009] QSC 113; BC200905092 . … 8.45, 8.49, 11.8, 11.9 Abbott v UDC Finance Ltd [1992] 1 NZLR 405 (CA) .… 2.4, 4.31, 9.26 ABL Custodian Services Pty Ltd v Wade [2013] VCC 878 .… 4.4 Abodeely v Cavras (1974) 221 NW 2d 494 (Iowa) .… 5.50, 5.51, 6.15 Advanced Magnetics Inc v Bayfront Partners Inc (1997) 106 F 3d 11 (2nd Cir) .… 2.27, 9.14 Advanced Realty Funding Corp v Bannink (1979) 106 DLR (3d) 137 (CA(Ont)) .… 8.90 Affairs of Hartigan, Re (SC(WA), Parker J, 9 December 1997, unreported) BC9707385 .… 9.40 Affluent Freight Sdn Bhd v Sumathi A/P Appukuttan Pillai [2001] MLJU 635 (LN) (HC) .… 2.4, 5.20, 8.86, 11.10 AI and OF [2008] WASAT 87 .… 10.28 Alerus Financial NA v Western State Bank (2008) 750 NW 2d 412 (ND) .… 2.3, 6.50

Alexopoulos v Dakouras (1970) 179 NW 2d 836 (Wis) .… 1.12, 1.15, 2.9, 4.2, 6.56, 8.58, 9.28 Anderson, Re [1909] VLR 465 .… 6.61 Andrews v Sinclair [1923] 2 DLR 903 (App Div (Alta)) .… 6.19, 6.20, 6.45 Apatu v Peach Prescott & Jamieson [1985] 1 NZLR 50 (HC) .… 8.28, 8.42, 11.17 Appleton v Binks (1804) 5 East 148; 102 ER 1025 .… 7.12 Arcweld Manufacturing Co v Burney (1942) 121 P 2d 350 (Wash) .… 1.11, 1.12, 4.2 Arpin v Leclaire [1930] 2 DLR 427 (KB (Man)) .… 6.32 Ashby v Guillot (1991) 593 So 2d 668 (La Ct App) .… 2.3 Attorney-General v Parnther (1792) 3 Bro CC 441; 29 ER 632 .… 3.25 Attwood v Munnings (1827) 7 B & C 278; 108 ER 727 .… 6.25, 6.32 Au Wai Ming v Kam Tze Ming Alfred [2010] 1 HKLRD 198; [2009] HKCA 241 .… 7.11 B Baillie v Charman (1992) 94 DLR (4th) 403 (CA(BC)) .… 8.32 Baker v Affoo [2014] QSC 46; BC201402012 .… 8.79 —v Biddle (1923) 33 CLR 188; BC2390103 .… 11.15, 11.16 Ball v Mannin (1829) 1 Dow & Cl 380; 6 ER 568 (HL) .… 3.20 Ballantyne v Coleman (1890) 9 NZLR 131 .… 6.23 Bangay v Sowa (2003) 125 ACWS (3d) 706 (QB(Alta)) .… 8.27 Bank Bumiputra Malaysia Bhd v Langgie [1990] 1 MLJ 296 .… 6.36, 6.50 Bank of Africa Ltd v Cohen [1909] 2 Ch 129 .… 2.6 Bank of America v Horowytz (1968) 248 A 2d 446 (NJ County Ct) .… 1.3, 6.41, 6.42, 6.43, 6.44, 9.28 Banks v Goodfellow (1870) LR 5 QB 549 .… 3.6, 3.7

—v National Westminster Bank plc [2005] EWHC 3479 (Ch) .… 9.40 Banton v Banton (1998) 164 DLR (4th) 176 (SC(Ont)) .… 2.10, 2.12 Barbulov v Huston (2010) 319 DLR (4th) 543 (SCJ(Ont)) .… 2.17 Barker, Goods of [1891] P 251 .… 7.14 Barnes (a protected person), Re [1983] VR 605 .… 3.11 Bartlett v First National Bank of Chicago (1910) 93 NE 337 (Ill) .… 9.25 Baxter, Re (No 2) (1863) 1 QSCR 99 .… 6.47 B(E) v B(S) (2010) 248 Man R (2d) 260 (QB) .… 8.57 Beaucar v Bristol Federal Savings and Loan Association (1969) 268 A 2d 679 (Conn Cir Ct App) .… 3.8, 11.6 Belfield v Belfield (2012) 16 BPR 31,177; [2012] NSWCA 416; BC201209897 .… 5.24 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1; [2008] WASC 239; BC200809492 .… 1.5 Berger v Council of the Law Society of New South Wales [2013] NSWSC 1080; BC201312244 .… 11.34 Berkeley v Hardy (1826) 5 B & C 355; 108 ER 132 .… 4.4 Blackburn, Low & Co v Vigors (1887) 12 App Cas 531 .… 1.19 Blair v Canada Trust Co (1986) 9 BCLR (2d) 43 (SC) .… 8.24 Blake v Lane (1876) 2 VLR(L) 54 .… 8.7 Bonfigli v Strachan (2011) 192 Cal App 4th 1302 .… 1.30, 11.7 Brassert v Clark (1947) 162 F 2d 967 (2nd Cir) .… 6.11, 6.32, 6.37 Breakspear v Ackland [2009] Ch 32; [2008] EWHC 220 (Ch) .… 8.29 Brimmer v Hartt (1956) 295 P 2d 985 (Wyo) .… 5.25 Bristol and West Building Society v Mothew [1996] 4 All ER 698 .… 8.31 Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420; BC8701426 .… 3.42, 3.43, 5.49 Brown v Andrew (1849) 18 LJQB 153 .… 4.51

—v Heffer (1967) 116 CLR 344; BC6700340 .… 9.39 —v Laird (1930) 291 P 352 (Or) .… 6.56, 8.7 —v Lefebvre (2007) 159 ACWS (3d) 312 (QB(Alta)) .… 8.27, 8.55 Brownett v Newton (1941) 64 CLR 439; BC4100028 .… 9.38 Bryant, Powis and Bryant v La Banque Du Peuple [1893] AC 170 .… 6.34 Bryant v Bryant (1994) 882 P 2d 169 (Wash) .… 6.56, 6.58 —v La Banque du Peuple [1893] AC 170 .… 6.25 Buckley, Re [2013] WTLR 373; [2013] EWCOP 2965 .… 8.52, 8.57, 8.59 Budgell v Hartley Estate (2008) 168 ACWS (3d) 895 (QB(Man)) .… 2.10 Burton, Re (1994) 126 ALR 557; BC9405738 .… 2.25, 6.64 Byer v Canadian Bank of Commerce (1937) 65 P 2d 67 (Cal) .… 6.32 C Caldwell, Re [1999] QSC 182 .… 3.30 Campbell v Pye (1954) 54 SR (NSW) 308 .… 9.13 Carlson Revocable Trust, Matter of (2009) 59 AD 3d 538 (NY App) .… 8.38 Casey (Estate of) v Commissioner of Internal Revenue (1991) 948 F 2d 895 (4th Cir) .… 5.45, 6.8, 6.10, 6.24, 6.37, 6.38, 6.39, 6.55, 6.56, 6.57, 6.58, 6.60 Chatenay v Brazilian Submarine Telegraph Co Ltd [1891] 1 QB 79 .… 2.6 Cheerine Group (International) Pty Ltd v Yeung [2006] NSWSC 1047; BC200607964 .… 5.24 Chen v Marcolongo (2009) 260 ALR 353; [2009] NSWCA 326; BC200909306 .… 8.40 Chesterfield and Midland Silkstone Colliery Co (Ltd) v Hawkins (1865) 3 H & C 677; 159 ER 698 .… 7.12 Chirnside, Re [1956] VLR 295 .… 2.17 Chow v Cheung [2008] NSWSC 843; BC200807343 .… 6.56

City Bank of Sydney v McLaughlin (1909) 9 CLR 615; BC0900009 .… 3.19, 5.50, 5.57 Clauss v Pir [1988] Ch 267 .… 5.23, 5.25, 7.10, 7.11 Clay v Clay (2001) 202 CLR 410; [2001] HCA 9; BC200100262 (FC) .… 2.30 Clazy v Registrar of Titles (1902) 4 WALR 113 (FC) .… 4.27 Clerk v Laurie (1857) 2 H & N 199; 157 ER 83 .… 1.31, 11.7 Clune, Re (1988) 14 ACLR 261 .… 8.90 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 49 CLR 337; BC8200083 .… 6.17 Coleman, Re (1929) 24 Tas LR 77 .… 11.25 Coles v Trecothick (1804) 9 Ves 234; 32 ER 592 .… 4.8 Colmup Pty Ltd v Mecair Engineering Pty Ltd (1988) 58 NTR 9 .… 5.28 Comerica Bank-Texas v Texas Commercial Bank National Association (1999) 2 SW 3d 723 (Tex Ct App) .… 1.3, 1.27, 5.32, 11.25 Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694 .… 2.18 Commissioner of Stamps (Vic) v Papalia (1982) 12 ATR 866 (SC(Vic)) .… 1.2, 1.4, 1.8, 1.10, 4.4 Consolidated National Bank v Pacific Coast SS Co (1892) 30 P 96 .… 6.44 Construction Engineering (Aust) Pty Ltd v Hexyl Pty Ltd (1985) 155 CLR 541; BC8501129 (FC) .… 2.12 Cooke v Lamotte (1851) 15 Beav 234; 51 ER 527 .… 8.36 —v Wilson (1856) 1 CBNS 153; 140 ER 65 .… 7.10 Coondoo v Watson (1884) 9 App Cas 561 .… 6.33 Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 .… 1.30, 1.31, 2.19, 2.21, 5.28, 5.55, 8.49, 8.50, 11.8 Cothay v Fennell (1830) B & C 671; 109 ER 599 .… 4.60

Cousins v International Brick Company Ltd [1931] 2 Ch 90 .… 2.19, 2.21 Cox v Goldcrest Developments (NSW) Pty Ltd (2000) 50 NSWLR 76; [2000] NSWSC 763; BC200004323 .… 4.60 Crabtree (Estate of ), Re (1996) 550 NW 2d 168 (Iowa) .… 6.58 Crago v McIntyre [1976] 1 NSWLR 729 .… 1.8, 3.5, 3.6, 3.7, 3.10, 3.19, 3.23, 3.42 Craven’s Estate, Re [1937] 1 Ch 423 .… 1.8, 1.16, 2.16, 9.3 Creasy v Henderson (1970) 173 SE 2d 823 (Va) .… 8.35, 8.38 Crossley v Magniac [1893] 1 Ch 594 .… 6.51, 8.38 Cymbol v Cymbol (1986) 122 AD 2d 771 (NY App) .… 5.25 D Dadswell v Jacobs (1887) 34 Ch D 278 .… 8.63 Daily Telegraph Newspaper Co v McLaughlin [1904] AC 776 .… 3.20, 3.21, 3.22 Danby v Coutts & Co (1885) 29 Ch D 500 .… 1.24, 5.32, 6.19, 6.20, 6.21, 11.4 D’Angibau, Re (1880) 15 Ch D 228 .… 3.46 Dayton Monetary Associates v Becker (1998) 710 NE 2d 115 (Ohio Ct App) .… 11.7 De Belardino, Matter of (1974) 77 Misc 2d 253 (NY Surr Ct) .… 8.34 De Bussche v Alt (1878) 8 Ch D 286 (CA) .… 8.66 De Comas v Prost (1865) 3 Moo PCC (NS) 158; 16 ER 59 .… 1.31 Debenham v Mellon (1880) 6 App Cas 24 .… 12.2 DeBoer Construction Inc v Reliance Insurance Co (1976) 540 F 2d 486 (10th Cir) .… 9.30, 9.33 Deputy Commissioner of Taxation v Boxshall (1988) 19 FCR 435 (FC) .… 5.28 Despot v Registrar-General (NSW) [2013] NSWCA 313; BC201313208 .…

1.2, 1.31, 1.32, 7.15 Dexter v Hall (1873) 82 US 9 .… 3.20 DFC Financial Services Ltd v Abel [1991] 2 NZLR 619 .… 1.15, 3.42 Dib v Green (2009) 236 FLR 348; [2009] FMCA 1174; BC200910930 .… 1.8, 9.15 Dimitrovski v Australian Executor Trustees Ltd [2014] NSWCA 68; BC201401980 .… 7.15 Dingle v Prikhdina (2011) 59 So 3d 326 (D App Fla) .… 6.38 Dobson’s Settlement, Re [1946] VLR 83 .… 2.23 Dooley (Estate of ) v Hickman 2006 Tenn App LEXIS 562 .… 3.8 Dowson and Jenkins’s Contract, Re [1904] 2 Ch 219 .… 6.30, 6.46 Drew v Nunn (1879) 4 QBD 661 .… 1.25 Dubois v Wilcosh (2007) 211 Man R (2d) 182 .… 3.18 Dudley (Estate of )(deceased) (2013) 115 SASR 328; [2013] SASC 22; BC201309027 .… 5.24 Dwyer v Herman (1881) 2 LR (NSW) L 280 .… 1.31, 12.2 —v Ross (1992) 34 FCR 463 .… 6.64 Dynayski v Grant [2004] NSWSC 1187; BC200408734 .… 8.28 E E (Enduring Power of Attorney), Re [2001] Ch 364 .… 3.50, 11.15, 11.16 E W, Re (1993) 11 FRNZ 118 .… 3.15 Easingwood v Easingwood Estate (2013) 361 DLR (4th) 304; [2013] BCCA 182 .… 5.25, 6.48 Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 .… 8.9, 8.14, 8.15, 8.16, 8.17, 8.18, 8.45 Egli (Committee of) v Egli (2005) 48 BCLR (4th) 90 .… 1.11, 1.25, 3.16 Eitel v Schmidlapp (1972) 459 F 2d 609 (4th Cir) .… 6.37

Elford v Elford [1922] SCR 125 .… 6.68, 6.69, 8.5, 8.6 Elderton, Goods of (1832) 4 Hagg Ecc 210; 162 ER 1423 .… 7.14 Emlen Pty Ltd v Walbrook Trustees (Jersey) Ltd (SC(WA), Anderson J, 19 June 1997, unreported) BC9702697 .… 6.61 English, Scottish and Australian Chartered Bank, Re [1893] 3 Ch 385 .… 2.19 Ensor v Frisby [2010] 1 Qd R 146; [2009] QSC 268; BC200908165 .… 9.40, 9.44 Ericksen Estate, Re (2008) 98 Alta LR (4th) 161 .… 2.10, 6.56, 8.24, 8.34, 8.35 Erikson v Carr (1945) 46 SR (NSW) 9 .… 1.10 Esdaile v La Nauze (1835) 1 Y & C Ex 394; 160 ER 160 .… 6.34 Evans (Estate of ), Re [2010] SASC 193; BC201005760 .… 10.3, 10.19, 11.16 Exponential Trading Pty Ltd v Anscombe-Black [2003] 2 Qd R 183; [2002] QSC 388; BC200207065 .… 8.78, 8.79 F F, Re [2004] 3 All ER 277; [2004] EWHC 725 (Ch) .… 3.50 Fender v Fender (1985) 329 SE 2d 430 (SC) .… 5.45, 6.58, 8.34, 8.35 Flynn v Butler (1905) 75 NE 730 (Mass) .… 11.16 Ford v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR 42; [2009] NSWCA 186; BC200905872 .… 3.42 Fort Dearborn Life Insurance Co v Holcomb (2000) 736 NE 2d 578 (Ill App) .… 6.32 Foskett v McKeown [2001] 1 AC 102 .… 8.37 Franzen, Matter of Trust of (1998) 955 P 2d 1018 (Colo) .… 6.17, 6.49, 6.53 Franzen v Norwest Bank Colorado (1998) 955 P 2d 1018 (Colo) .… 1.3 Fraser (Guardian ad litem of) v Fraser (2000) 31 ETR (2d) 52 (SC(BC)) .…

8.43 Freshfield v Reed (1842) 9 M & W 404; 152 ER 171 .… 4.8 Frith v Frith [1906] AC 254 .… 1.31, 1.33 G Gadsden’s Settlements, Re [1962] VR 522 .… 10.3 Gagnon v Coombs (1995) 654 NE 2d 54 (Mass Ct App) .… 8.34 Ganderton v Behre [2005] NZHC 61 .… 8.33, 8.34 Gaussen v Morton (1830) 10 B & C 731; 109 ER 622 .… 1.31 Gee v Lane (1812) 15 East 592; 104 ER 967 .… 4.60 General Legal Council Ex parte Whitter v Frankson [2006] 1 WLR 2803; [2006] UKPC 42 .… 5.25 Ghosn v Principle Focus Pty Ltd (No 2) [2008] VSC 574; BC200811609 .… 1.19, 3.9, 3.17, 3.25, 5.49 Gibbons v Wright (1954) 91 CLR 423; BC5400600 .… 3.5, 3.6, 3.9, 3.10, 3.11, 3.17, 3.19, 3.20, 3.42, 11.25 GM, Re [2013] EWHC 2966 (COP) .… 7.20, 7.21 Godsy v Godsy (1973) 504 SW 2d 209 (Mo Ct App) .… 1.9, 8.34 Golleher v Horton (1985) 715 P 2d 1225 (Ariz Ct App) .… 3.9 Goode v Harrison (1821) 5 B & Ald 147; 106 ER 1147 .… 3.46 Gorman, Succession of (1946) 26 So 2d 150 (La) .… 6.57 Grahame v Commissioner for Railways (1946) 46 SR (NSW) 430 .… 5.27 Graham (Estate of )(1975) 533 P 2d 1318 (Kan) .… 9.40 Gray-Grzeszkiewicz v Gray-Grzeszkiewicz [2000] ACTSC 95; BC200006430 .… 8.4 Gray v Haig (1855) 20 Beav 219; 52 ER 587 .… 8.55 —v Pearson (1870) LR 5 CP 568 .… 9.13 Graham (Estate of )(1975) 533 P 2d 1318 (Kan) .… 9.40

Green v Whitehead [1930] 1 Ch 38 .… 2.14 Grefeld v Grefeld [2010] FamCA 504; BC201050552 .… 8.33, 8.34, 8.41 Gregory v Hudson (1997) 41NSWLR 573; BC9701111 .… 2.23 —v— (1998) 45 NSWLR 300; BC9805959 .… 2.23 —v Turner [2003] 2 All ER 1114; [2003] EWCA Civ 183 .… 1.8 Griffin v Clark (1940) 40 SR (NSW) 409 .… 1.31 Guardianship of Lee, Re (1999) 982 P 2d 539 (Okla Ct App) .… 6.48 Guthrie v Armstrong (1822) 5 B & Ald 628; 106 ER 1320 .… 4.51 —v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369; BC200910295 .… 3.5 H Hall v Cosby (1972) 258 So 2d 897 (Ala) .… 6.22, 6.46 Hallani v Hallani (2013) 16 BPR 31,203; [2013] NSWSC 91; BC201301047 .… 8.30, 12.11 Hannan’s Empress Gold Mining and Development Co, Re (‘Carmichael’s case’) [1896] 2 Ch 643 .… 1.31 Harben v Phillips (1883) 23 Ch D 14 .… 2.21 Harcourt, Re [2012] WTLR 1779 (EWCOP) .… 8.62, 8.63 Harmond Properties Ltd v Gajdzis [1968] 3 All ER 263 .… 1.19 Harper v Godsell (1870) LR 5 QB 422 .… 6.32 Hart v John Frame, Son, and Co (1839) 6 Cl & F 193; 7 ER 670 .… 8.23 Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405; BC9203940 . … 8.29 Hawksley v Outram [1892] 3 Ch 359 .… 6.17, 6.50, 6.62 Hay v Goldsmidt (1804) 1 Taunt 349n .… 6.34 Hearle v Greenbank (1749) 3 Atk 695; 26 ER 1200 .… 3.46 Heatons Transport (St Helens) Ltd v Transport and General Workers’ Union

[1973] AC 15 .… 12.2 Hebb and Registrar of Titles, Re (1982) 142 DLR (3d) 729 (SC(NWT)) .… 1.4, 1.17, 2.12, 4.8, 9.11 Heine v Newman, Tannenbaum, Helpern, Syracuse & Hirschtritt (1994) 856 F Supp 190 (D NY) .… 9.33 Heller, Re [1999] 2 Qd R 579; BC9802682 .… 7.20 Hemming v Hale (1859) 7 CB(NS) 487; 141 ER 905 .… 8.72 Hendricks Property Management Corp v Birchwood Properties Ltd Partnership (2007) 741 NW 2d 461 (ND) .… 6.50 Hill Estate v Chevron Standard Ltd (1992) 37 ACWS (3d) 6 .… 3.21, 3.22 Hoarey, Re [1906] VLR 437 .… 6.32 Hodge v Combs (1862) 66 US 192 .… 6.47, 6.50 Hodges v Surratt (1978) 366 So 2d 768 (D App Fla) .… 1.2, 1.5, 5.45, 6.11 Hook v Day (1971) 2 SASR 440 .… 12.2 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; BC8400480 .… 8.31 Hotchkiss v Middlekauf (1899) 32 SE 36 (Va) .… 6.37 Houston v Houston (2012) 352 DLR (4th) 125; [2012] BCCA 300 .… 4.4, 11.16 Howard v Baillie (1796) 2 H Bl 618; 126 ER 737 .… 6.22 Hoyt v Jaques (1880) 129 Mass 286 .… 6.45 Hunt v Rousmanier (1823) 21 US 174 .… 1.31 I Imperial Bank of Canada v Begley [1936] 2 ll ER 367 .… 5.53, 8.5 Imperial Loan Co v Stone [1892] 1 QB 599 .… 9.19 International Contract Co (Pickering’s Claim), Re (1871) 6 Ch App 525 .… 7.12 International Harvester Co of Australia Ltd v Bowerman (1913) 9 Tas SR 43

.… 6.23 International Harvester Company of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Company (1958) 100 CLR 644; BC5800260 .… 1.10 J J (Enduring Power of Attorney), Re [2009] 2 All ER 1051; [2009] EWHC 436 (Ch) .… 1.2, 4.4, 4.56 J M Christie v Permewan, Wright & Co Ltd (1904) 1 CLR 693 .… 5.22 Jackson & Co v Napper (1887) 35 Ch D 162 .… 5.27 Jacobs v Morris [1902] 1 Ch 816 .… 6.44, 9.30 Jameison, Re Trust of (2000) 8 P 3d 83 (Mon) .… 6.48 JLJ Inc, Re (1993) 988 F 2d 1112 (11th Cir) .… 11.12 John McCann & Co (a firm) v Pow [1975] 1 All ER 129 .… 8.66 Johns v Cumming (1909) 11 WALR 14 .… 6.45 Johnson v Buttress (1936) 56 CLR 113 .… 3.45 —v Fraccacreta (1977) 348 So 2d 570 (Fla Ct App) .… 6.56, 6.57 —v Trotter (2006) 12 BPR 23,339; [2006] NSWSC 67; BC200600661 .… 2.17 Johnston v Maclarn [2002] NSWSC 97; BC200200525 .… 9.40 Jones v Canavan [1972] 2 NSWLR 236 .… 8.30 —v Cuthbertson (1873) LR 8 QB 504 .… 4.60 Jorss’ Caveat, Re [1982] Qd R 458 .… 3.43 K K (Enduring Powers of Attorney), Re [1988] Ch 310 .… 1.60, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.24, 3.30, 11.25, 11.27 Keay v Fenwick (1876) 1 CPD 745 .… 4.60 Kebbell v Reynolds [2012] QSC 88; BC201201882 .… 8.9 Kee v Kee (1995) 58 ACWS (3d) 316 (Gen Div(Ont)) .… 8.36

Kelly v Rounsevell (1885) 19 SALR 89 .… 8.23 Kendle v Melsom (1998) 193 CLR 46; BC9800311 .… 4.50, 4.51 Kiddill v Farnell (1857) 3 Sm & G 428; 65 ER 723 .… 1.30 King v Bankerd (1985) 492 A 2d 608 (Md Ct App) .… 1.3, 2.3, 6.15, 6.32, 6.41, 6.56, 6.57 The King v Registrar of Titles (1921) 27 ALR 236 .… 6.23 Kisselbach v County of Camden (1994) 638 A 2d 1383 (NJ App) .… 1.3, 4.2, 4.3, 6.13, 11.25 Klein v Weiss (1978) 395 A 2d 126 (Md Ct App) .… 6.37 Klotz v Neubauer (2001) 82 SASR 6; [2001] SASC 454; BC200108267 .… 8.44 Knight v Bulkeley (1859) 5 Jur NS 817 .… 8.49 Knox Street Apartments Pty Ltd v Flexman [2002] NSWSC 102; BC200201888 .… 6.22, 6.32 Kotsch v Kotsch (1992) 608 So 2d 879 (Fla Ct App) .… 6.48 KS(2) [2008] WASAT 167 .… 10.28 Kunewa v Joshua (1996) 924 P 2d 559 (Haw App) .… 5.45, 6.58 Kung Wing Chuen Francis v Marden [1990] 1 HKLR 540 .… 12.18 Kurrelmeyer (Estate of ), Re (2010) 992 A 2d 316 (Vt) .… 6.11 L Lambur (Estate of )(2013) 397 SW 3d 54 (Mo App) .… 8.45 Lampropoulos v Kolnik [2010] WASC 193; BC201005815 .… 3.9 Lawrie v Lees (1880) 14 Ch D 249 .… 7.10 LeCraw v LeCraw (1991) 401 SE 2d 697 (Ga) .… 6.57 Legal Services Commissioner v Comino [2011] QCAT 387 .… 4.9 —v de Brenni [2011] QCAT 340 .… 4.9 —v Ford [2008] LPT 12 .… 4.9

Lian Lee Construction Sdn Bhd v Joyous Seasons Sdn Bhd [2008] 8 MLJ 387 (HC) .… 1.31 Lim Eng Chuan Sdn Bhd v United Malayan Banking Corp Bhd [2005] 4 MLJ 172 (HC) .… 1.2, 1.11, 1.12, 3.3, 4.2 —v— [2013] 3 MLJ 161 .… 11.36 Lincolne v Williams (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 . … 1.8, 2.5, 2.6, 4.35, 8.88, 8.90, 11.25 Littlejohn (Estate of )(2005) 698 NW 2d 923 (ND) .… 1.9, 1.12, 4.2, 8.23 Liverpool Household Stores Association (Ltd), Re (1890) 59 LJ Ch 616 .… 4.51 Long v Schull (1981) 439 A 2d 975 (Conn) .… 11.34 Lord Chedworth v Edwards (1802) 8 Ves 46; 32 ER 268 .… 8.55 Losada v Senese Manufacturing Co (1953) 94 A 2d 616 (Conn) .… 11.6 Lundie v Rowena Nominees Pty Ltd (Receiver & Manager Appointed) (in liq) (2006) 32 WAR 404; [2006] WASCA 106; BC200604321 .… 7.9, 9.12, 9.36 M M (a debtor), Re (1909) 10 SR (NSW) 175 .… 1.33 MacDonald v Taubner (2010) 21 Alta LR (5th) 59 (QB (Alta)) .… 2.3, 2.9, 2.17, 6.22, 6.39, 6.56, 8.22, 8.23, 8.24, 8.27, 8.35, 8.55, 8.70, 8.71 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42; BC200807738 .… 10.3 MacKenzie v Carroll (1974) 53 DLR (3d) 699 (HC(Ont)) .… 11.34 —v MacKenzie (1998) 16 FRNZ 487 .… 2.17 Maenhoudt v Bank (2005) 115 P d 157 (Kan Ct App) .… 2.3 Mahood v Geange [1927] NZLR 780 .… 11.12 Makepeace v Rogers (1865) 4 De GJ & Sm 649; 46 ER 1070 .… 8.55

Malaguti v Rosen (1928) 160 NE 532 (Mass) .… 6.40 Mallory v Mallory (1982) 113 Misc 2d 912 (NY) .… 5.25 Mancini v Mancini (1999) 17 ACLC 1570; [1999] NSWSC 799; BC9904573 .… 5.24 Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3; BC201100994 .… 8.40 Margaret Mitchell, the (1858) Sw 382; 166 ER 1174 .… 2.9, 5.44, 8.7, 8.28, 9.33, 11.12, 11.17 Markwick v Hardingham (1880) 15 Ch D 339 .… 11.36 Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd (2001) 38 ACSR 404; [2001] NSWSC 448; BC200102976 .… 4.40 McCall v Australian Meat Co (Ltd) (1870) 19 WR 188 .… 11.38 McCarty, Re (1920) 53 DLR 249 App Div (SC (Ont)) .… 11.34 McCutcheon v Registrar of Titles [1927] VLR 93 .… 6.61 McLaren Gold Mines Co v Morton (1950) 224 P 2d 975 (Mont) .… 5.51, 6.6, 6.14, 6.17, 6.40, 6.61 McLaughlin v City Bank of Sydney (1914) 18 CLR 598 .… 3.19 —v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243 .… 3.19, 3.20, 3.21, 3.22, 9.19 McRae v Coulton (1986) 7 NSWLR 644 .… 5.28 Mercantile Trust Co NA v Harper (1981) 622 SW 2d 345 (Mo Ct App) .… 6.32, 6.43 Mehus, Matter of the Estate of (1979) 278 NW 2d 625 (ND) .… 1.5, 1.12, 4.2 Michaletos v Stivactas [1992] ANZ Conv R 90; BC9101807 .… 3.9 Midland Bank Ltd v Reckitt [1933] AC 1 .… 5.54, 9.30 Miller v Cameron (1936) 54 CLR 572; BC3600025 .… 2.12 —v Chatsworth Savings Bank (1927) 212 NW 722 (Iowa) .… 5.51

—v Miller (2010) 935 NE 2d 729 (Ind Ct App) .… 8.60, 8.61 Minnesota Stoneware Co v McCrossen (1901) 85 NW 1019 (Wis) .… 5.44, 5.45, 6.45 Molton v Camroux (1848) 2 Ex 487; 154 ER 584 .… 9.19 Monmouthshire Canal Navigation Co v Kendall (1821) 4 B & Ald 453; 106 ER 1003 .… 2.20 Montaignac v Shitta (1890) 15 App Cas 357 .… 9.26 Moss v Moss (No 2) (1900) 21 LR (NSW) Eq 253 .… 8.31 Mostyn v Mostyn (1989) 16 NSWLR 635 .… 4.8 Motel Marine Pty Ltd v IAC Finance Pty Ltd (1964) 110 CLR 9; BC6400080 .… 5.29 Moylan v Rickard [2010] QSC 327; BC201010256 .… 8.9, 8.15, 8.25, 9.44 Mulhall v Kelly (2006) 1 ASTLR 394; [2006] VSC 407; BC200608993 .… 9.40 Muller v Bank of America (2000) 12 P 3d 899 (Kan Ct App) .… 6.48 Murphy v Doman (2003) 58 NSWLR 51; [2003] NSWCA 249; BC200305305 .… 3.25 Mutual Provident Land Investing and Building Society Ltd v MacMillan (1889) 14 App Cas 596 .… 12.3 N Nash v Schock 1997 Del Ch LEXIS 174 .… 6.55 National Australia Finance Ltd v Fahey [1990] 2 NZLR 482 .… 9.33 National Trustees Executors & Agency Co of Australasia Ltd v Trainor [1974] VR 49 .… 2.23 Nelson v Nelson (1995) 184 CLR 538; BC9501517 .… 6.68, 6.69 Neuendorf v Public Trustee of Queensland [2013] QSC 156; BC201310253 . … 9.44 New South Wales Henry George Foundation v Booth (2002) 54 NSWLR

433; [2002] NSWSC 245; BC200201438 .… 2.21 Nicholas Trust, Re the (1986) 70 ACTR 10 .… 2.23 Nicholls (Estate of ) v Nicholls (2011) 960 NE 2d 78 (Ill App) .… 6.32 Nicholson v Morning Star (St Lukes Garden Apartments) Ltd (2008) 9 NZCPR 407; [2008] NZHC 599 .… 6.17, 6.63, 6.64 Nielsen v Capital Finance Australia Ltd [2014] QCA 139; BC201404392 .… 7.10, 7.11, 9.8 Nominal Defendant v Kisse (2001) Qld Lawyer Reps 110; [2001] QDC 290 . … 11.34 Noonan v Martin (1987) 10 NSWLR 402 .… 11.34 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9; BC6300080 .… 2.26, 9.14 Norwich and Peterborough Building Society v Steed [1993] Ch 116 .… 9.33 NRMA Insurance Ltd, Re (2000) 33 ACSR 595; [2000] NSWSC 82; BC200000493 .… 1.8 O Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306; BC9002922 .… 2.18 OHM Pacific Sdn Bhd v Ng Hwee Cheng Doreen [1994] 2 SLR(R) 633 (CA) .… 2.6, 2.11 Oil Well Core Drilling Co v Barnhart (1937) 67 P 2d 696 (Cal Ct App) .… 2.3 Olympic Fire and General Reinsurance Co Ltd, Re [1920] 2 Ch 341 .… 1.31 Oriental Bank Corporation, Re (1884) 28 Ch D 634 .… 12.2 Orix Australia Corporation Ltd v McCormick (2005) 145 FCR 244; [2005] FCA 1032; BC200505464 .… 7.6 Orr v Slender (2005) 64 NSWLR 671; [2005] NSWSC 1175; BC200510063 .… 7.2, 7.15 Overseas Trust Bank Ltd v Tang Chi-ching [1994] 2 HKLR 73 .… 4.4, 6.21

Owners – Strata Plan No 53441 v Walter Construction Group Ltd (2004) 12 BPR 22,639; [2004] NSWCA 429; BC200408103 .… 2.11 P Pakis v Pakis [2011] NSWSC 1073; BC201107324 .… 10.9 Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1; BC3700030 .… 2.13 Palliser v Ord (1724) Bunb 166; 145 ER 634 .… 8.67, 8.68 Park (Estate of ) [1954] P 89 .… 3.5 Parker v Higgins [2012] NSWSC 1516; BC201209588 .… 2.11, 8.62, 8.63, 10.3 —v Kett (1701) 1 Salk 95; 91 ER 88 .… 1.19 Parkin v Williams [1986] 1 NZLR 294 (CA) .… 6.34, 8.67, 8.72 Parnall (Attorney for) v British Columbia (Registrar of Land Titles) (2004) 26 BCLR (4th) 45 .… 1.24, 1.27, 1.29, 5.32, 5.36 Parr v Reiner (1988) 143 AD 2d 427 (NY App) .… 12.3 Parrott, Re [1891] 2 QB 151 .… 4.8 Parton v Robinson (1978) 574 SW 2d 679 (Ky Ct App) .… 3.20, 9.27 Payler v Homersham (1815) 4 M & S 423; 105 ER 890 .… 6.20 Pearse v Green (1819) 1 Jac & W 135; 37 ER 327 .… 8.55 Pecore v Pecore [2007] 1 SCR 795 .… 2.13 Pedley-Smith v Pedley-Smith (1953) 88 CLR 177; BC5300320 (FC) .… 2.23 Permanent Trustee Co Ltd v Bernera Holdings Pty Ltd (2004) 11 BPR 21,505; [2004] NSWSC 56; BC200400430 .… 5.24, 5.49 Perochinsky v Kirschner (2013) 16 BPR 31,481; [2013] NSWSC 400; BC201302003 .… 7.4 Perpetual Trustee Co Ltd v Aroney (1944) 44 SR (NSW) 313 .… 1.30, 5.55 —v Gibson (2013) 17 BPR 32,141; [2013] NSWSC 276; BC201301492 .… 7.5, 8.34 —v Smith (1938) 39 SR(NSW) 19 (FC) .… 6.60

Perry v Holl (1860) 2 De GF & J 38; 45 ER 536 .… 6.32, 9.25 Petelin v Cullen (1974) 132 CLR 355; BC7500030 .… 3.41 Petersen v Moloney (1951) 84 CLR 91 .… 1.10 Pole v Leask (1860) 54 ER 481 .… 1.14 —v— (1863) 8 LT 645 .… 1.12 Porteous v Rinehart (1998) 19 WAR 495; BC9804413 .… 2.17 Posner v Bayless (1882) 59 Md 56 (Md Ct App) .… 6.59 Powell v Thompson [1991] 1 NZLR 597 .… 8.35 Power v Power [2011] NSWSC 288; BC201102520 .… 7.2, 9.40 Praekfe v American Enterprise Life Insurance Co (2002) 655 NW 2d 456 (Wis Ct App) .… 3.8, 3.50, 5.4, 5.45, 6.37, 6.56, 6.58 Pratten v Pratten [2005] QCA 213; BC200504060 .… 8.37, 8.55, 8.56 Prosper Dynamics Sdn Bhd v MBF Property Services Sdn Bhd [2004] MLJU 416 (HC) .… 1.13, 9.11 Przekopski v Estate of Przekopski 2009 Conn Super LEXIS 110 .… 6.32 Public Trustee of Queensland v Ban [2011] QSC 380; BC20110962 .… 8.45 —v Lee (2011) 5 ASTLR 142; [2011] QSC 409; BC201110041 .… 9.40 —v Stibbe [2012] QSC 357; BC201210997 .… 9.44 Q Quest Rose Hill Pty Ltd v White [2010] NSWSC 939; BC201006067 .… 1.30, 1.34, 2.21 R R D Mackinnon Holdings Pty Ltd v Hind [1984] 2 NSWLR 121 .… 5.44, 11.12 R (Enduring Power of Attorney), Re [1990] 1 Ch 647 .… 1.60 R v Holt (1983) 12 A Crim R 1 (CCA(Vic)) .… 1.8, 5.44, 8.20, 11.12

—v Justices of Kent (1873) LR 8 QB 305 .… 5.28 —v Kerin (2013) 116 SASR 316; [2013] SASCFC 56; BC201310400 .… 6.50 —v Wait (1823) 11 Price 518; 147 ER 551 .… 11.12 Ranclaud v Cabban (1988) NSW ConvR ¶55-385; BC8802222 .… 3.9, 3.17 Rawlings v John Hancock Mutual Life Insurance Co (2001) 78 SW 3d 291 (Tenn Ct App) .… 3.8 Rayner v N J Sheaffe Pty Ltd [2010] NSWSC 810; BC201005176 .… 11.23 Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 (Del) .… 1.12, 1.15, 4.2, 4.4, 6.12, 6.13, 6.17, 9.28 Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 3 All ER 570 .… 6.17 Reckitt v Barnett Pembroke and Slater Ltd [1928] 2 KB 244 .… 6.56 —v— [1929] AC 176 .… 6.53, 9.24 Reed v Welsh (1875) 74 Ky 450 (Ky Ct App) .… 9.27 Renfro v City of Waco (1896) 33 SW 766 (Tex Ct App) .… 11.25 Ricetti v Registrar of Titles [2000] WASC 98; BC200001912 .… 4.30, 4.53 Richardson Estate v Mew (2009) 310 DLR (4th) 21 (CA(Ont)) .… 2.10 Ridenour (Estate of ) v Commissioner of the Internal Revenue Service (1994) 36 F 3d 332 .… 6.57 RL v NSW Trustee and Guardian (2012) 84 NSWLR 263; [2012] NSWCA 39; BC201201586. .… 9.41 Robinson v Green (1917) 36 DLR 631 (SC(NS)) .… 6.1, 9.25 Rolater (Estate of )(1975) 542 P 2d 219 (Okla Ct App) .… 6.53 Rooke v Lord Kensington (1856) 2 K & J 753; 69 ER 986 .… 6.20 Rosenberg v Suares (1980) 105 Misc 2d 611 (NY City Ct) .… 5.7 Rothschild v Brookman (1831) 1 Dow & Cl 188; 6 ER 699 .… 8.31 Rotorua and Bay of Plenty Hunt Club (Inc) v Baker [1941] NZLR 669 .…

6.50, 6.61 Rouse v IOOF Australia Trustees Ltd (1999) 73 SASR 484; [1999] SASC 181; BC9902313 .… 8.29 Ruch v Commissioner of Internal Revenue (1983) 718 F 2d 719 (5th Cir) .… 6.57 Russian Commercial and Industrial Bank v Comptoir D’Escompte de Mulhouse [1925] AC 112 .… 5.56 Rybolt (Estate of ), Re (1994) 631 NE 2d 792 (Ill Ct App) .… 8.36, 8.39 S Saad v Doumeny Holdings Pty Ltd [2005] NSWSC 893; BC200506715 .… 1.8, 5.24 SAL, Re [2007] QGAAT 76 .… 3.30 Salter v Cormie (1993) 108 DLR (4th) 372 (CA(Alta)) .… 9.38 Saunders v Anglia Building Society (sub nom Gallie v Lee) [1971] AC 1004 .… 3.41 Schmitz v Firstar Bank Milwaukee (2003) 658 NW 2d 442 (Wis) .… 6.13, 6.32 Schock v Nash (1999) 732 A 2d 217 (Del) .… 2.10, 6.11, 6.25, 6.55, 6.57, 8.33, 8.35, 8.36 Scott v Scott (2012) 7 ASTLR 299; [2012] NSWSC 1541; BC201210837 .… 3.5, 3.9, 3.17, 3.25, 3.28 Seal v Claridge (1881) 7 QBD 516 .… 4.8 Second East Dulwich 145th Starr-Bowkett Building Society, Re (1899) 68 LJ Ch 196 .… 8.15 Sevigny v New South Federal Savings and Loan Association (1991) 586 So 2d 884 (Ala) .… 1.3, 8.35 Sheldon v Phillips (1894) 15 LR (NSW) Eq 98 in Eq .… 2.20 Sheriffa Shaikhah v Ban Hoe Seng & Co Ltd [1963] 1 MLJ 241 (Singapore) .… 3.22, 3.39

Siahos v J P Morgan Trust Australia Ltd [2009] NSWCA 20; BC200901305 .… 7.17, 9.26, 9.31, 9.32 Simpson v Cunning (2011) 4 ASTLR 584; [2011] VSC 466; BC201107296 . … 9.40 Sinfra Aktiengesellschaft v Sinfra Ltd [1939] 2 All ER 675 .… 2.6 Skeats’ Settlement, Re (1889) 42 Ch D 522 .… 2.25 Skinner v Stocks (1821) 4 B & Ald 437; 106 ER 997 .… 4.60 Slater, Re [1907] 1 Ch 665 .… 9.39 Smally v Smally (1700) 1 Eq Cas Abr 6; 21 ER 83 .… 3.46 Smart v Sandars (1848) 5 CB 895; 136 ER 1132 .… 1.31, 1.33 Smith v Glegg [2005] 1 Qd R 561; [2004] QSC 443; BC200408515 .… 8.40, 8.79 —v Perpetual Trustee Co Ltd (1910) 11 CLR 148 .… 1.31, 2.27, 2.29, 11.10 —v Public Trustee (SC(Qld), Cullinane J, 5 May 1994, unreported) .… 11.19 —v Wachovia Bank NA (2009) 33 So 3d 1191 (Ala) .… 2.6 Spencer v Standard Chemicals Corp (1924) 143 NE 651 (NY Ct App) .… 9.14 Spina v Conran Associates Pty Ltd (2008) NSW ConvR ¶56-218; [2008] NSWSC 326; BC200802476 .… 7.3, 7.5 —v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 .… 1.12, 2.3, 6.6, 6.20, 6.25, 6.32, 7.3, 7.4, 7.5, 8.34 —v— (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 .… 1.12, 2.3, 6.6, 6.20, 6.25, 6.32, 7.3, 8.34 Spooner v Sandilands (1842) 1 Y & CCC 390; 62 ER 939 .… 11.7 St Ermins Property Co v Tingay [2002] 3 EGLR 53; [2002] EWHC 1673 (Ch) .… 5.29 Stafford v Crane (2004) 382 F 3d 1175 (10th Cir) .… 6.48 Standard Accident Insurance Co v Ayres (1940) 28 NE 2d 50 (Ind) .… 6.13,

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Ticehurst v Moore (1907) 7 SR (NSW) 202 .… 6.11 Tingley v Müller [1917] 2 Ch 144 .… 1.30, 8.49 Titus v Wallick (1939) 306 US 282 .… 9.14 Tobin v Broadbent (1946) SASR 191 .… 6.35 —v— (1947) 75 CLR 378; BC4700530 .… 5.54, 6.32, 6.35, 6.50, 6.51, 8.38, 9.32 —v Melrose [1951] SASR 139 .… 5.49 ‘Tony’, Re (1990) 5 NZFLR 609 .… 1.64, 3.15, 3.18 Torkington v Magee [1920] 2 KB 427 .… 2.26 Toronto-Dominion Bank v Salekin (2014) 239 ACWS (3d) 215; [2014] ABQB 168 .… 3.42 Totally & Permanently Incapacitated Veterans’ Association of NSW Ltd v Gadd (1998) 28 ACSR 549; BC9804347 (SC(NSW)) .… 2.20, 2.21 Trust Co Ltd v Gibson [2012] QSC 183; BC201205055 .… 9.41 Trustees Executors & Agency Co Ltd v Margottini [1960] VR 417 .… 2.23 Tusyn v State of Tasmania (2004) 13 Tas R 51; [2004] TASSC 50; BC200403099 .… 2.30 U Urquhart v Lanham (2002) 11 BPR 20,765; [2002] NSWSC 119; BC200200633 .… 1.16, 9.13 V V/O Rasnoimport v Guthrie & Co Ltd [1966] 1 Lloyd’s Rep 1 .… 9.38 Vatcher v Paull [1915] AC 372 (PC) .… 6.64 Veljkovic v Vrybergen [1985] VR 419 .… 8.30 Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333; [2002] NSWSC 782; BC200205296 .… 5.32, 11.5, 11.12, 12.13 Viertel, Re [1997] 1 Qd R 110 .… 9.40, 9.41

Villanueva v Brown (1997) 103 F 3d 1128 (3rd Cir) .… 1.15, 1.20, 1.40, 5.7, 5.19, 9.28 Vitek v Estate Homes Pty Ltd [2013] NSWSC 1764; BC201315248 .… 5.51, 7.4 Von Wedel v Clark (1949) 84 F Supp 299 (D NJ) .… 5.45, 6.32, 6.56 W W (Enduring Power of Attorney), Re [2001] Ch 609 .… 1.60, 3.14, 3.18 W R Huff Asset Management Co LLC v Deloitte & Touche LLP (2008) 549 F 3d 100 (2nd Cir) .… 2.27, 9.14 Wagner v Van Cleeff (1991) 5 OR (3d) 477 (Div Ct) .… 8.24 Wah Hing Strategy Co Ltd v Tang Wai Hung [2014] HKEC 821 .… 11.10 Walker, Re [1905] 1 Ch 160 .… 3.11 Walsh v Whitcomb (1797) 2 Esp 565; 170 ER 456 .… 1.31, 11.10 Ward v Ward (No 2) [2011] NSWSC 1292; BC201109231 .… 6.50, 8.34 Watkins v Vince (1818) 2 Stark 368; 171 ER 675 .… 3.46 Watson v King (1815) 4 Camp 272; 171 ER 87 .… 1.30 —v Watson [2002] NSWSC 919; BC200205921 .… 8.5, 8.34, 8.35, 8.39 Waugh v Waugh (1950) 50 SR (NSW) 210 .… 3.46 Webb v McCracken (1906) 3 CLR 1018; BC0600058 .… 2.22 Weiss (Estate of )(deceased) [1962] P 136 .… 5.21 Wellington Steam Ferry Company (Ltd) (in liq) v Wellington Deposit, Mortgage and Building Association (Ltd) (1915) 34 NZLR 913 (SC) .… 11.34 Wesley v Schaller Subaru Inc (2006) 893 A 2d 389 (Conn) .… 6.32 Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1; [2012] WASCA 157; BC201206001 .… 1.5 Westropp v Solomon (1849) 8 CB 345; 137 ER 542 .… 8.90 White v Tyndall (1888) 13 App Cas 263 .… 4.51

Whitford v Gaskill (1997) 480 SE 2d 690 (NC) .… 6.58 —v Whitford [1941] 2 DLR 701 .… 8.55 Whitley Partners Ltd, Re (1886) 32 Ch D 337 .… 4.2, 5.28 Wickham v Marquis of Bath (1865) LR 1 Eq 17 .… 4.8 Wilkinson v Wilkinson (1819) 3 Swans 515; 36 ER 958 .… 2.29 —v Young (1972) 25 DLR (3d) 275 (HC(Ont)) .… 1.31, 1.32, 11.7 Will of Page [1969] 1 NSWR 471 .… 11.17 Willey v Mayer (1994) 876 P 2d 1260 (Colo) .… 1.3, 6.17, 9.25 Williams, Re (1911) 28 WN (NSW) 119 .… 6.61 — [1917] 1 Ch 1 .… 11.34 Williams v Dugan (1914) 105 NE 615 (Mass) .… 6.43 —v Turner [2009] 1 Qd R 296; [2008] QSC 327; BC200811148 .… 2.9, 6.25, 8.7 Wilson v Gilbert (1965) 39 ALJR 348 .… 9.24 Withington v Herring (1829) 5 Bing 443; 130 ER 1136 .… 6.25, 6.34, 6.59 Wm and Y (2006) 44 SR (WA) 104; [2006] WASAT 245 .… 10.28 WOC Finance Co Ltd v Wing On Cheong Investment Co Ltd [2000] 2 HKLRD 713 (CFI) .… 12.18 Wong v Burt [2005] 1 NZLR 91; [2004] NZCA 174 .… 6.64 Woolley v Embassy Suites Inc (1991) 227 Cal App 3d 1520 .… 1.31 Y Yates v Hoppe (1850) 9 CB 541; 137 ER 1003 .… 1.30, 11.7 Yonge v Toynbee [1910] 1 KB 215 .… 1.25, 5.56, 9.37 Yongnam Development Pte Ltd v Springleaves Tower Ltd [2004] 1 SLR(R) 348; [2003] SGHC 301 .… 5.50, 5.52 Z

Zaubler v Picone (1984) 100 AD 2d 620 (NY App) .… 1.11, 5.22, 11.15

Table of Statutes

References are to paragraphs Commonwealth Australian Consumer Law s 18(1) .… 3.40 Bankruptcy Act 1966 .… 3.49, 11.39 s 58 .… 11.36 Competition and Consumer Act 2010 Sch 2 .… 3.40 Corporations Act 2001 s 52A .… 5.28 s 124(1) .… 3.35 s 124(2) .… 3.35 s 249X(1) .… 2.21 s 250A(1) .… 5.28 s 468 .… 11.36 s 1318 .… 8.13 Social Security Act 1991 Pt 3.18A .… 6.48 Statutory Declarations Act 1959 .… 4.11 Statutory Declarations Regulations 1993 Sch 2 .… 4.11

Australian Capital Territory Administration and Probate Act 1929 s 22(1) .… 7.14 s 22(2) .… 7.14 Associations Incorporation Act 1991 s 24 .… 3.37 s 25 .… 3.37 Civil Law (Property) Act 2006 s 205 .… 2.26 s 219 .… 7.13 s 227(4) .… 7.13 Evidence Act 2001 s 48 .… 4.48 s 146 .… 4.48 s 147 .… 4.48 Guardianship and Management of Property Act 1991 .… 1.38, 3.11, 12.10 s 7 .… 2.31, 11.23 s 8 .… 2.32 s 61 .… 10.4 s 62 .… 1.38, 2.32 s 62(1) .… 10.4, 11.41 s 62(2) .… 10.4, 11.41 s 62(2)(b) .… 8.64 s 62(2)(d) .… 8.94 s 62(3) .… 10.4 s 62(4) .… 10.4, 11.41

s 63(1) .… 10.4 s 63(2) .… 10.4 s 63(3) .… 10.4 s 64 .… 10.4 s 65 .… 5.36 s 66 .… 3.50, 4.56, 10.4 Land Titles Act 1925 .… 4.38 s 130 .… 4.39 Legislation Act 2001 s 54 .… 4.11 s 160(1) .… 3.49 s 169 .… 4.11, 7.20, 8.45, 10.4 s 255(4) .… 4.10 s 255(5) .… 4.10 Dictionary .… 3.34, 3.48, 11.32, 11.39 Mental Health (Treatment and Care) Act 1994 s 143 .… 5.26 Powers of Attorney Act 1956 .… 1.62 s 2(1) .… 1.39 s 11(2) .… 1.39 s 88 .… 1.40 Sch 1 Forms 1 and 2 .… 1.39 Powers of Attorney Act 2006 .… 1.37, 1.39, 1.62, 3.34, 4.10, 4.38 s 6 .… 1.37 s 7 .… 1.37 s 8 .… 1.38

s 9(1) .… 5.36 s 9(2) .… 5.36 s 10 .… 1.38, 1.48, 7.6 s 11 .… 1.38, 1.48, 7.6 s 12 .… 1.38, 7.6 s 13(1) .… 3.34, 5.22, 7.2 s 13(2) .… 1.38, 3.34, 5.26, 7.6 s 13(3) .… 3.48 s 14(1)(a) .… 3.49 s 14(1)(b) .… 3.49 s 14(4) .… 3.11, 12.10 s 15 .… 4.62 s 16(1) .… 5.32 s 16(2) .… 5.32 s 17 .… 3.26, 5.36 s 18 .… 3.26, 10.5 s 19(1) .… 4.11 s 19(2) .… 4.11 s 20 .… 4.11 s 20(2) .… 4.55 s 21(1) .… 4.11 s 21(2) .… 4.11 s 21(3) .… 4.11 s 22 .… 4.9 s 22(1) .… 4.11 s 22(2) .… 4.11

s 23 .… 4.11, 4.34, 5.38 s 25 .… 4.50, 4.51, 4.57 s 26 .… 4.51 s 27(1) .… 4.51 s 27(2) .… 4.51 s 28(1) .… 4.55 s 28(2) .… 4.55 s 28(3) .… 4.55 s 29(1) .… 4.5, 4.38, 11.43 s 29(2) .… 11.43 s 30 .… 9.3 s 31 .… 1.38, 5.34 s 32(1) .… 11.29 s 32(2)(a) .… 5.34 s 32(2)(b) .… 5.34 s 33(1) .… 8.73 s 33(2) .… 8.73 s 33(3) .… 8.73 s 33(4) .… 8.73 s 34 .… 7.15 s 35 .… 5.26 s 38 .… 7.20 s 39(1) .… 7.20 s 39(2) .… 7.20 s 39(3) .… 7.20 s 39(4) .… 7.20

s 39(5) .… 7.22 s 40(1) .… 7.24 s 40(2) .… 7.24 s 40(3) .… 7.24 s 41(1) .… 7.24 s 41(2) .… 7.24 s 42(1) .… 8.45 s 42(2) .… 8.45 s 42(3) .… 8.45 s 42(4) .… 8.45 s 44 .… 8.26 s 45(1) .… 8.94 s 45(2) .… 8.94 s 45(3) .… 8.94 s 45(4) .… 8.94 s 47 .… 8.62 s 48(1) .… 8.54 s 48(2) .… 8.54 s 50 .… 8.45 s 50(1) .… 8.9 s 50(2) .… 8.9 s 50(3) .… 8.9 s 50(4) .… 8.9 s 50(5) .… 8.9 s 51 .… 8.9 s 52(1) .… 8.13

s 52(2) .… 8.13 s 52(3) .… 8.13 s 53(1) .… 11.24 s 53(2) .… 11.23 s 53(3) .… 11.24 s 54 .… 1.34, 5.14, 11.9 s 56 .… 11.3, 12.4 s 57 .… 11.26 s 58 .… 11.32 s 59 .… 11.33 s 60 .… 11.34 s 61 .… 11.35 s 62 .… 11.39 s 63 .… 11.30 s 64 .… 11.39 s 65 .… 11.22, 11.30, 11.35, 11.39 s 66 .… 11.22, 11.30, 11.35, 11.39 s 67 .… 11.22, 11.30, 11.35, 11.39 s 69 .… 11.16 s 70 .… 12.8, 12.10 s 71(1) .… 10.5 s 71(2) .… 10.5 s 71(3) .… 10.5 s 72 .… 12.8 s 73 .… 12.9 s 74 .… 10.4

s 80 .… 10.11 s 80(1) .… 10.5 s 80(2) .… 10.5 s 81 .… 10.11 s 81(1) .… 10.6 s 81(2) .… 10.6 s 81(3) .… 10.6 s 82 .… 10.6 s 83 .… 10.4 s 87 .… 5.36 s 88 .… 4.49 s 89 .… 4.49 s 90 .… 3.40, 8.19 s 91 .… 5.36 s 96(1) .… 4.10 s 96(3) .… 4.10 Dictionary .… 1.37, 1.38, 4.11, 7.20, 8.45, 8.46, 10.4 Sch 1 .… 8.26 Sch 1 cl 1.10 .… 8.76 Public Advocate Act 2005 .… 10.4 Registration of Deeds Act 1957 .… 4.38 s 4(1) .… 4.38 s 4(2) .… 4.38 s 4A(1) .… 4.38 s 4A(2) .… 4.38 Testamentary Guardianship Act 1984 .… 2.30

Transplantation and Anatomy Act 1978 .… 1.38 Trustee Act 1925 s 14 .… 8.47 s 53 .… 2.14 s 58(1) .… 12.35 s 58(2) .… 12.35 s 58(3) .… 12.36 ss 64–68 .… 2.14 s 70 .… 2.12 s 85 .… 8.13 Wills Act 1968 s 14A .… 5.25 New South Wales Associations Incorporation Act 2009 s 19 .… 3.37 s 20 .… 3.37 Conveyancing Act 1919 .… 1.62 s 12 .… 2.26 s 38 .… 7.13 s 51A(3) .… 7.13 s 159(1) .… 7.9 s 159(2) .… 7.9 s 160(2) .… 11.9 s 161 .… 12.11 s 162(1) .… 12.12

s 162A .… 12.11 s 163 .… 4.40 s 163(1) .… 4.40 s 163(2) .… 4.40 s 163A(1) .… 4.48 s 163A(2) .… 4.48 s 163B(1) .… 4.5, 4.12, 7.2 s 163B(2)(a) .… 5.24 s 163B(2)(b) .… 7.15 s 163B(3) .… 1.41, 7.2 s 163D .… 3.28, 5.57, 10.8 s 163E(1) .… 3.27 s 163E(2) .… 3.27 s 163E(4) .… 3.28, 5.57 s 163E(5) .… 3.28, 5.57, 10.11 s 163E(6) .… 10.11 s 163E(7) .… 3.28, 5.57, 10.11 s 163F(1) .… 11.26 s 163F(2) .… 11.29 s 163G .… 10.7, 11.41 s 184D(1) .… 4.40 Pt 3 .… 4.5 Pt 16 Sch 7 .… 1.41 Pt 23 Div 1 .… 11.43 Evidence Act 1995 s 48 .… 4.48

s 146 .… 4.48 s 147 .… 4.48 Guardianship Act 1987 .… 10.8 s 6A .… 2.31, 5.26 s 25M .… 2.32 Pt 2 .… 1.42, 2.31, 5.26 Pt 3 .… 2.31 Pt 3A .… 2.32, 10.9 Guardianship of Infants Act 1916 .… 2.30 Interpretation Act 1987 s 80(1) .… 4.12 s 80(2) .… 4.12 Minors (Property and Contracts) Act 1970 .… 3.34, 3.48 s 6(1) .… 3.34 s 8 .… 3.34 s 10(1) .… 3.48 s 46(1)(a) .… 3.34 NSW Trustee and Guardian Act 2009 .… 2.32 s 83 .… 9.41 s 83 .… 9.41 Pt 4.3 Div 2 .… 2.32 Powers of Attorney Act 2003 .… 1.41, 1.42, 1.62, 4.12, 4.58, 10.7 s 3(1) .… 1.41, 4.13, 4.40, 12.12 s 4(1) .… 3.28, 5.57, 10.8 s 4(2) .… 10.8 s 7(1) .… 1.43

s 7(2) .… 4.5 s 8 .… 1.41, 4.5, 4.12 s 9.2 .… 1.41 s 9(1) .… 7.2, 7.7 s 9(2) .… 7.2 s 10 .… 5.24 s 11(1) .… 7.20 s 11(2) .… 7.20 s 12(1) .… 7.15 s 12(2) .… 7.17 s 13(1) .… 7.18 s 13(2) .… 7.18 s 15 .… 1.34 s 16(1) .… 1.34, 11.9 s 17(1) .… 3.27 s 17(2) .… 3.28 s 18 .… 11.26 s 19(1) .… 4.13 s 19(1)(a) .… 1.42, 5.34 s 19(1)(c) .… 4.9 s 19(2) .… 4.13 s 20(1) .… 4.13, 4.34 s 20(2) .… 4.50 s 20(3) .… 4.34 s 20(4) .… 4.34 s 21 .… 5.38

s 21(1) .… 11.29 s 21(3) .… 11.29 s 22(1) .… 9.42 s 22(2) .… 9.42 s 22(6) .… 9.42 s 23(1)(b) .… 9.42 s 23(2) .… 9.42 s 23(3) .… 9.42 s 23(4) .… 9.42 s 25(1) .… 4.49 s 25(2) .… 4.49 s 25(3) .… 4.49 s 26 .… 10.7, 11.41 s 27(2)–27(4) .… 10.7 s 28 .… 11.9 s 29 .… 10.11 s 30 .… 3.28, 5.57, 10.11 s 31(1) .… 3.28, 5.57, 10.11 s 31(2) .… 3.28, 5.57 s 32 .… 10.11 s 33(1) .… 10.8 s 33(2) .… 10.8 s 33(3) .… 10.8 s 34(1) .… 10.7 s 34(2) .… 10.7 s 35(1) .… 10.8

s 35(2) .… 10.8 s 35(3) .… 10.8 s 36 .… 2.32 s 36(1) .… 10.7 s 36(2) .… 10.9 s 36(3) .… 5.36, 10.9 s 36(3)(b)(iii) .… 3.40 s 36(4) .… 10.9 s 36(4)(b) .… 3.50, 4.56 s 36(4)(c) .… 4.56 s 36(4)(e) .… 8.64 s 36(4)(f) .… 11.41 s 36(5) .… 3.28, 5.36, 10.9 s 36(6) .… 10.9 s 36(7) .… 10.9 s 36(8) .… 10.9 s 36(9) .… 10.9 s 36(10) .… 10.9 s 36(12) .… 10.9 s 37 .… 2.32 s 38 .… 8.94 s 38(1) .… 10.10 s 38(2) .… 10.10 s 38(3) .… 10.10 s 43(1) .… 5.25, 7.9 s 43(2) .… 7.9

s 44 .… 8.19 s 44(1) .… 4.48 s 44(2) .… 4.48 s 44(4) .… 4.48 s 44(5) .… 4.48 s 45 .… 8.67, 8.68 s 45A(1) .… 4.58 s 45A(3) .… 4.58 s 45A(4) .… 4.58 s 46(1) .… 11.22, 11.30, 11.35, 11.39 s 46(1A) .… 11.22, 11.30, 11.35, 11.39 s 46(2) .… 11.22, 11.30, 11.35, 11.39 s 47 .… 12.11 s 48(1) .… 12.12 s 49 .… 8.19, 12.11 s 50 .… 2.32 s 50(9) .… 2.32 s 51 .… 11.43 s 51(1) .… 4.40 s 52(1) .… 4.40 s 52(2) .… 4.40 s 52(3) .… 4.40 s 52(4) .… 4.40 Pt 5 Div 3 .… 3.28 Sch 1 .… 1.41 Sch 2 .… 4.12

Sch 3 cl 1(1) .… 7.20 Sch 3 cl 1(2) .… 7.20 Sch 3 cl 1(3) .… 7.20 Sch 3 cl 2(1) .… 7.17 Sch 3 cl 2(2) .… 7.17 Sch 3 cl 3(1) .… 7.18 Sch 3 cl 3(2) .… 7.18 Powers of Attorney Amendment Act 2013 .… 1.41, 4.12, 4.58, 10.7 Powers of Attorney Regulation 2011 cl 14 .… 4.48 Sch 2 .… 4.7, 5.32, 5.34, 5.35 Sch 2 cl 4A(1) .… 1.41, 4.12 Sch 2 cl 4A(2) .… 1.41, 4.12 Sch 2 cl 4A(3) .… 1.41, 4.12 Probate and Administration Act 1898 s 72(1) .… 7.14 s 72(2) .… 7.14 Property (Relationships) Act 1984 .… 7.20 Real Property Act 1900 s 3(1) .… 9.42 Relationships Register Act 2010 .… 7.20 Succession Act 2006 s 44 .… 5.25 Trustee Act 1925 s 14 .… 8.47 s 53 .… 2.14

s 58(1) .… 12.35 s 58(2) .… 12.36 s 58(3) .… 12.36 ss 64–68 .… 2.14 s 70 .… 2.12 s 85 .… 8.13 Trustee Companies Act 1964 .… 4.13 Northern Territory Administration and Probate Act 1969 s 31(1) .… 7.14 s 31(2) .… 7.14 Adult Guardianship Act 1988 .… 1.44 s 3(1) .… 4.14 s 3(2) .… 4.14 s 8 .… 1.45 s 16A .… 1.45 s 17(1) .… 1.45 s 17(2)(d) .… 1.45 s 23B .… 1.45, 2.32 Pt II .… 2.31 Advance Personal Planning Act 2013 .… 2.31, 3.48, 4.42, 7.16, 8.25, 8.53, 8.84, 10.12, 11.23 s 3 .… 4.15 s 4 .… 3.29, 10.14 s 6 .… 5.36 s 6(1) .… 3.29, 3.30, 10.13

s 6(2) .… 3.29 s 6(3) .… 3.29 s 6(4) .… 3.29 s 6(5) .… 3.29 s 8 .… 5.26 s 8(1) .… 1.44, 3.29, 3.34, 7.6 s 8(2) .… 1.44 s 9(1)(a) .… 4.7, 4.15 s 10(1) .… 4.15 s 10(2) .… 4.15 s 10(3) .… 4.15 s 10(3)(b)(i) .… 4.9 s 10(4) .… 4.15 s 10(5) .… 4.15 s 11(b)(i) .… 5.39, 11.3 s 11(b)(ii) .… 11.10, 11.20 s 11(b)(iv) .… 11.34 s 12 .… 5.44, 11.12 s 12(1) .… 11.10, 11.20 s 13(2) .… 4.15 s 13(3) .… 4.15 s 14(2) .… 11.16 s 15(1)(a) .… 3.48 s 15(1)(b)–(d) .… 3.49 s 15(2) .… 3.48 s 15(3) .… 3.48

s 16(1) .… 1.44 s 16(2) .… 1.44 s 17(1) .… 4.57 s 17(2) .… 4.50, 4.53 s 17(3) .… 4.51 s 19 .… 11.24 s 19(1)(a) .… 11.35 s 19(1)(b) .… 4.34 s 20(1) .… 5.22, 7.9 s 20(2) .… 1.44, 5.34 s 21(1)(b)(i) .… 8.28 s 21(1)(d) .… 8.25 s 21(2) .… 4.51, 8.65 s 22(4) .… 8.26, 8.60, 8.84 s 22(5) .… 8.26 s 22(5A) .… 8.84 s 22(5)(a) .… 8.84 s 22(5)(b) .… 8.84 s 22(5)(c) .… 8.84 s 22(6A) .… 8.26 s 22(7) .… 8.26 s 22(7)(k) .… 8.76 s 22(8) .… 7.16 s 23(2) .… 8.27 s 23(3) .… 8.27 s 24(1)(a) .… 5.25

s 24(1)(c) .… 5.25 s 24(1)(d) .… 5.25 s 26 .… 11.29 s 27(1) .… 12.16 s 28(1) .… 8.94 s 28(2) .… 8.94 s 28(5) .… 8.94 s 30(1) .… 8.62 s 31 .… 2.11 s 31(1) .… 2.10, 4.35, 8.25, 8.54, 8.58 s 31(3) .… 8.53 s 32(1) .… 7.21 s 32(2) .… 7.21 s 32(4) .… 7.21 s 33 .… 7.23 s 35 .… 8.90 s 36(1) .… 8.88 s 36(2) .… 8.88 s 36(3) .… 8.88 s 36(4) .… 8.88 s 55A(1) .… 4.42 s 55A(2) .… 4.42 s 55A(5) .… 4.42 s 55B(1) .… 4.42 s 55B(3) .… 4.42 s 56 .… 10.13

s 58 .… 10.13 s 58(a) .… 5.36 s 59 .… 8.94 s 59(1) .… 10.13 s 59(2) .… 10.13 s 59(2)(d) .… 8.88 s 59(3) .… 10.13 s 60 .… 4.56 s 61(2) .… 10.14, 11.41 s 61(2)(f)(ii) .… 3.40 s 61(2)(h) .… 11.30, 11.33 s 61(3) .… 10.14, 11.41 s 61(4) .… 3.50, 10.14 s 61(5) .… 10.14, 11.30, 11.33 s 66(1) .… 10.13 s 66(2) .… 10.13 s 71(1) .… 10.15 s 71(2) .… 10.15 s 72(1) .… 10.15 s 73 .… 10.15 s 74(1) .… 10.15 ss 76–79 .… 8.19 s 77 .… 3.40 s 78 .… 8.10 s 83(2) .… 8.10 s 83(5) .… 8.10

s 86(1) .… 4.15 s 88 .… 4.49 Pt 4 .… 5.26 Advance Personal Planning Regulations 2014 reg 3 .… 4.15 reg 5 .… 8.62 reg 10 .… 4.48 Aged and Infirm Persons’ Property Act 1979 .… 2.32, 3.29, 4.15, 4.41, 10.14 s 22 .… 9.41 Evidence (National Uniform Legislation) Act 2011 s 48 .… 4.48 s 146 .… 4.48 s 147 .… 4.48 Guardianship of Infants Act 1972 .… 2.30 Interpretation Act 1978 .… 4.14 s 17 .… 3.34 s 68 .… 4.15 Justices Act 1928 .… 4.14 Land Title Act 2000 .… 4.41 s 148 .… 11.43 s 148(1) .… 4.41 s 148(6) .… 4.41 s 148(6)(a) .… 4.32 Law of Property Act 2000 s 47 .… 7.13 s 48(3) .… 7.13

s 182 .… 2.26 Local Court Act 1989 .… 4.14 Oaths, Affidavits and Declarations Act 2010 .… 4.15 Powers of Attorney Act 1980 .… 1.44, 1.62, 4.41, 12.14 s 5 .… 4.14 s 6(1) .… 4.14 s 6(2) .… 4.14 s 6(3) .… 4.5, 4.14 s 6(4) .… 4.14 s 6A(3) .… 4.49 s 6A(5) .… 4.49 s 7(1) .… 4.41, 11.43 s 8(1) .… 4.41 s 8(2) .… 4.41 s 10(2) .… 5.25, 7.9 s 10(3)(a) .… 7.11 s 11 .… 8.62, 8.63, 10.12 s 12 .… 8.19, 11.43 s 12(1) .… 4.48 s 12(2) .… 4.48 s 13 .… 4.14, 11.29 s 13(a) .… 5.34 s 13(aa) .… 1.44, 10.12, 11.23, 11.24 s 13(b) .… 4.34, 5.38 s 14 .… 4.14 s 15(1) .… 11.23

s 15(2) .… 10.12 s 15(2)(b) .… 8.64 s 15(2)(c) .… 3.50, 4.56, 11.41 s 15(3) .… 11.41 s 15(4) .… 4.56, 10.12 s 15(5) .… 10.12, 11.23 s 16 .… 4.41 s 16(a) .… 11.34, 11.35 s 16(b) .… 11.26, 11.30 s 16(c) .… 11.10, 11.24 s 16(d) .… 11.37, 11.39 s 17 .… 4.41 s 17(2)(a) .… 11.10, 11.24, 11.34, 11.35, 11.37, 11.39 s 17(2)(b) .… 11.30 s 19 .… 2.32 s 19(1) .… 1.34, 11.9 s 19(2) .… 1.34, 11.9 s 19(3) .… 4.41 s 20 .… 12.14 s 21 .… 12.14 s 21A(1) .… 2.31 s 139(aa) .… 8.64 Pt II .… 1.44 Pt III .… 1.44 Pt IV .… 1.44 Sch 1 .… 4.14, 4.34, 5.38

Sch 2 .… 4.14 Powers of Attorney Regulations 1982 .… 4.41 reg 3(1) .… 4.41 reg 3(2) .… 4.41 reg 5 .… 4.41 reg 5(3) .… 11.43 reg 5AA .… 4.41 reg 8 .… 11.34, 11.35 reg 9 .… 11.24 reg 10 .… 11.37, 11.39 reg 11 .… 12.5 Registration Act 1927 .… 4.14 Supreme Court Act 1979 .… 4.14 Trustee Act 1893 s 3 .… 2.14 s 14 .… 8.47 s 25 .… 12.35, 12.36 s 27 .… 2.12 s 49A .… 8.13 Wills Act 2000 s 43 .… 5.25 Queensland Acts Interpretation Act 1954 s 36 .… 3.34 s 49(1) .… 4.16

s 49(2) .… 4.16 Associations Incorporation Act 1981 s 26 .… 3.37 Evidence Act 1977 s 116 .… 4.48 Guardianship and Administration Act 2000 .… 1.49 s 8(1) .… 1.49 s 8(2) .… 1.49 s 22 .… 1.49, 2.32 s 23 .… 1.49, 2.32 s 33(1) .… 2.31 s 33(2) .… 2.32 s 60 .… 9.41 Ch 3 .… 2.31, 2.32 Ch 4 .… 2.31, 2.32 Sch 4 .… 8.76 Land Act 1994 .… 4.43 s 383(1) .… 4.43 s 383(2) .… 4.43 s 383(3) .… 4.43 Land Title Act 1994 .… 4.43 s 132 .… 4.43 s 133(1) .… 4.43, 11.43 s 133(2) .… 4.43 s 134(1) .… 4.43 s 134(2) .… 4.43

s 135 .… 4.32 Powers of Attorney Act 1998 .… 1.62, 3.30, 4.43, 9.44 s 1 .… 3.30 s 5(1) .… 1.46 s 5(2) .… 1.46 s 5(4) .… 1.48 s 6A(1) .… 1.49 s 6A(4) .… 1.49 s 8(a) .… 7.2 s 8(b) .… 7.2 s 9(1) .… 5.32 s 9(2) .… 5.32 s 10(1) .… 1.34, 11.9 s 10(2) .… 1.34, 11.9 s 11 .… 4.16 s 12(1) .… 4.17 s 12(2) .… 4.17 s 12(3) .… 4.17 s 13(1) .… 4.51 s 13(1)(a) .… 4.50 s 13(1)(b) .… 4.62 s 13(2) .… 4.62 ss 14(2)–14(4) .… 4.48 s 14(4) .… 4.48 s 14(6) .… 4.48 s 15 .… 11.13

s 16(a) .… 12.4 s 16(b) .… 12.5 s 17(1) .… 11.13 s 17(2) .… 11.13 s 18(1) .… 11.26 s 18(2) .… 11.26 s 18(3) .… 11.26 s 19 .… 11.34 s 20 .… 11.3 s 21 .… 11.24 s 22 .… 11.30 s 23 .… 11.39 s 24 .… 11.35 s 25(1) .… 4.43 s 25(2) .… 11.43 s 25(3) .… 12.5 s 26 .… 8.19 s 26(2) .… 3.40 s 28 .… 4.18 s 29(1)(a)(i) .… 3.48 s 29(1)(a)(iv) .… 3.49 s 30(1) .… 4.18 s 30(2) .… 4.18 s 30(3) .… 4.18 s 31(1) .… 4.18 s 31(2) .… 4.18

s 31(3) .… 4.18 s 32 .… 3.34, 7.6 s 32(1) .… 5.26, 7.6 s 32(1)(a) .… 1.48 s 32(2) .… 11.29 s 33(1) .… 5.34 s 33(2) .… 5.34 s 33(5) .… 5.36 s 34 .… 4.49 ss 35–40 .… 7.6 s 35(1) .… 1.48 s 35(3) .… 1.48 s 41(1) .… 3.30 s 41(2) .… 3.30 s 43 .… 4.53 s 43(1) .… 3.48, 3.49 s 43(2) .… 4.50, 4.57 s 43(2)(f) .… 4.51 s 44(1) .… 4.16 s 44(2) .… 4.16 s 44(3) .… 4.18 s 44(4) .… 4.9, 4.18 s 44(5) .… 4.9, 4.18 s 44(8) .… 4.18, 4.34, 5.38 ss 45(2)–45(4) .… 4.48 s 45(4) .… 4.48

s 45(6) .… 4.48 s 46(a) .… 12.4 s 46(b) .… 12.5 s 47(1) .… 11.13, 11.20 s 49(1) .… 11.13 s 49(2) .… 11.13 s 49(3)–49(5) .… 11.13 s 50(1) .… 11.16 s 51 .… 11.34 s 52 .… 11.32 s 52A .… 11.32 s 53 .… 11.33 s 53A .… 11.33 s 54 .… 11.3 s 55 .… 11.24 s 56 .… 11.30 s 57 .… 11.39 s 58 .… 11.35 s 59A .… 11.22, 11.30, 11.39 s 60(1) .… 4.43 s 60(2) .… 11.43 s 60(3) .… 12.5 s 61 .… 3.40, 8.19 s 62 .… 7.6 s 63 .… 7.6 s 63(1)(b) .… 3.48

s 65 .… 8.25, 8.46, 12.19 s 66(1) .… 8.25 s 66(2) .… 8.8 s 67 .… 8.25 s 69(1) .… 5.25, 7.9 s 69(2) .… 7.11 s 69(3) .… 7.9 s 69(4) .… 7.9 s 70 .… 1.49, 2.32 s 71 .… 8.25, 12.17 s 72 .… 11.24 s 73 .… 8.9, 8.14 s 73(1) .… 8.45 s 73(2) .… 8.45 s 73(3) .… 8.45 s 73(4) .… 8.45 s 74(1) .… 8.76 s 74(2) .… 8.76 s 74(3) .… 8.76 s 74(4) .… 8.76 s 74A(1) .… 8.76 s 74A(2) .… 8.76 s 76 .… 8.26 s 77 .… 7.6 s 78 .… 4.50, 4.51 s 79 .… 8.79

s 80(1) .… 4.51, 5.22, 8.65 s 80(2) .… 4.51 s 81(1) .… 8.94 s 81(2) .… 8.94 s 81(3) .… 8.94 s 82(1) .… 11.23 s 82(2) .… 11.23 s 84(2) .… 8.59 s 85 .… 8.62 s 86(1) .… 8.54 s 87 .… 8.78 s 88(1) .… 7.21 s 88(2) .… 7.22 s 89(1) .… 7.24 s 89(2) .… 7.24 s 96 .… 12.19 s 97 .… 10.16 s 98(1) .… 12.19 s 98(2) .… 12.17 s 99(1) .… 9.21, 12.20 s 99(2) .… 12.18 s 99(3) .… 12.18 s 99(4) .… 12.19 s 105(1) .… 8.13 s 105(2)(c) .… 8.13 s 106 .… 8.45

s 106(1) .… 8.9 s 106(2) .… 8.9 s 106(3) .… 8.9 s 106(4) .… 8.9 s 106(5) .… 8.9 s 106(6) .… 8.9 s 106(7) .… 8.9 s 107(1) .… 9.44 s 107(1A) .… 9.44 s 107(2) .… 9.44 s 107(3) .… 9.44 s 107(5) .… 9.44 s 108 .… 1.47, 10.16, 11.41 s 109A .… 9.44, 10.17, 11.41 s 110(1) .… 10.16 s 110(2) .… 10.16 s 110(3) .… 10.16 s 110(4) .… 10.16 s 110(5) .… 10.16 s 111 .… 5.36, 10.16 s 112 .… 10.16 s 113(1) .… 10.16 s 113(2) .… 10.16 s 113(2)(c) .… 3.40 s 113(3) .… 10.16 s 114 .… 10.16

s 115(a) .… 10.16 s 115(b) .… 10.16 s 116(a) .… 3.50, 4.56, 10.16 s 116(b) .… 4.56, 10.16 s 116(c) .… 10.16 s 116(d) .… 10.16, 11.41 s 117 .… 10.16 s 118(1) .… 8.94, 10.16 s 118(2) .… 10.16 s 122(1) .… 8.64, 10.16 s 135 .… 11.43 s 161 .… 4.16 Ch 3 Pt 3 .… 5.26 Sch 1 .… 3.30, 8.26 Sch 1 cl 11 .… 8.76 Sch 2 Pt 1 .… 1.48, 7.6 Sch 2 Pt 2 .… 1.48, 7.6 Sch 2 Pt 2 cl 3 .… 1.48 Sch 2 Pt 2 cl 4 .… 1.48 Sch 2 Pt 2 cl 5(1) .… 1.48 Sch 2 Pt 2 cl 5(2) .… 1.48 Sch 2 Pt 2 cl 6 .… 1.48 Sch 2 Pt 2 cl 7 .… 1.48 Sch 2 Pt 2 cl 8–17 .… 1.48 Sch 3 .… 1.46, 3.30, 7.24, 8.45, 10.16 Property Law Act 1974 .… 1.62

s 45 .… 7.13 s 46 .… 7.9 s 46(3) .… 7.13 s 199 .… 2.26 Property Law Amendment Act 1990 .… 1.62 Public Trustee Act 1978 s 89 .… 9.41 Queensland Civil and Administrative Tribunal Act 2009 Ch 2 Pt 8 Div 1 .… 10.17 Ch 2 Pt 8 Div 2 .… 10.17 Relationships Act 2011 .… 11.32 Succession Act 1981 s 33R .… 5.25 Pt 5A .… 2.30 Trusts Act 1973 s 21 .… 8.47 s 21(a) .… 8.59 s 54 .… 2.14 s 56 .… 2.14, 7.6 s 70(1) .… 12.35 s 70(2) .… 12.36 s 76 .… 8.13 s 80 .… 2.12 Uniform Civil Procedure Rules 1999 r 611 .… 7.14

South Australia Acts Interpretation Act 1915 s 25 .… 4.19 s 34 .… 4.20 Administration and Probate Act 1919 s 34 .… 7.14 Advance Care Directives Act 2013 .… 1.51, 2.31, 5.26 s 13 .… 1.51 s 56(1) .… 3.40 Aged and Infirm Persons’ Property Act 1940 .… 2.32 s 16A .… 9.41 Associations Incorporation Act 1985 s 27 .… 3.37 Consent to Medical Treatment and Palliative Care Act 1995 s 8(1) .… 1.51 Pt 2 Div 3 .… 1.51 Evidence Act 1929 ss 45A–45C .… 4.48 Guardianship and Administration Act 1993 s 25 .… 5.26 s 31 .… 2.31 s 31A .… 2.31 s 39 .… 2.32 Pt 3 .… 1.51, 2.31, 5.26 Pt 4 Div 2 .… 1.51, 2.31 Pt 4 Div 3 .… 2.32

Guardianship of Infants Act 1940 .… 2.30 Law of Property Act 1936 s 15 .… 2.26 Powers of Attorney and Agency Act 1984 .… 1.62, 4.44 s 5(1) .… 1.50, 4.5, 4.19, 4.44 s 5(2) .… 1.50, 7.2 s 5(3) .… 4.50, 4.51, 5.22, 7.2 s 5(4) .… 5.24 s 6(1) .… 4.5, 4.20 s 6(1)(b)(i) .… 5.34 s 6(1)(b)(ii) .… 5.35 s 6(2) .… 4.20 s 6(2)(b) .… 4.34, 5.38 s 6(3) .… 11.29 s 7 .… 8.8, 8.25 s 8 .… 8.19, 8.62 s 9 .… 11.23 s 10 .… 2.32 s 11(1) .… 8.64, 10.18 s 11(1)(c) .… 3.50, 4.56, 11.41 s 11(2)(b) .… 8.94, 10.19 s 11(3)(b) .… 10.19 s 11(4) .… 10.19 s 11A(1) .… 9.43 s 12(1) .… 12.21 s 12(2) .… 12.22

s 12(3) .… 7.14 s 12(5) .… 12.23 s 13(1) .… 7.12, 9.9 s 14 .… 4.49 s 18 .… 11.26 s 59A .… 11.35 Sch 1 .… 1.50, 4.19 Sch 2 .… 4.20, 4.34, 5.38 Powers of Attorney and Agency (Interstate Powers of Attorney) Amendment Act 2013 .… 4.49 Real Property Act 1886 .… 4.45 s 155 .… 4.45, 11.43 s 156 .… 4.45 s 157 .… 11.10, 11.13, 11.43, 12.5 s 159 .… 11.43 s 160 .… 12.23 Registration of Deeds Act 1935 .… 4.44 s 10(1) .… 4.44 s 10(2) .… 4.44 s 10(4) .… 4.44 s 11(1) .… 4.44 s 35 .… 12.23 Pt 2 .… 12.23 Trustee Act 1936 s 6 .… 8.47 s 17 .… 2.14

s 36 .… 2.12 s 56 .… 8.13 Tasmania Acts Interpretation Act 1931 s 10A(1)(c) .… 4.21 s 10A(2) .… 4.21 Administration and Probate Act 1935 s 17 .… 7.14 Conveyancing and Law of Property Act 1884 s 44(1) .… 3.34 s 86 .… 2.26 Evidence Act 2001 s 48 .… 4.48 s 146 .… 4.48 s 147 .… 4.48 Guardianship and Administration Act 1995 s 25 .… 2.31 s 32(5) .… 2.31, 5.26 s 53 .… 2.32 s 53(1) .… 1.53 s 56 .… 2.32 s 60 .… 9.41 Pt 4 .… 1.53, 2.31 Pt 5 .… 1.53, 2.31, 5.26 Pt 6 .… 1.53

Pt 7 .… 2.32, 10.20 Pt 8 .… 2.32 Pt 10 Div 1 .… 4.23, 7.22, 10.20, 11.41 Guardianship and Custody of Infants Act 1934 .… 2.30 Powers of Attorney Act 1934 .… 1.62 Powers of Attorney Act 2000 .… 1.62, 3.31, 4.22 s 3(1) .… 1.52, 4.21, 4.46 s 4(1) .… 4.46, 11.43 s 4(2) .… 11.43 s 4(3) .… 11.43 s 5(1) .… 4.46 s 6(1) .… 4.46 s 9(1)(b) .… 4.22 s 9(1)(ba) .… 4.22 s 9(1)(f)–(i) .… 4.22 s 9(2) .… 4.22 s 9(3) .… 4.22 s 9(4) .… 4.22 s 9(5) .… 4.22 s 9(6) .… 4.22 s 10(1) .… 4.22 s 10(2) .… 4.22 s 10(3) .… 4.23 s 11(1) .… 4.46 s 11(3)–11(5) .… 4.46 s 11(5A) .… 4.46

s 11(7) .… 4.46 s 12(1) .… 4.46 s 16(a) .… 4.46 s 17(1) .… 11.43 s 17(2) .… 11.43 s 18(1) .… 4.5, 4.21 s 20 .… 5.22, 7.2 s 21 .… 7.2 s 22(c) .… 11.6, 11.7 s 23(1) .… 5.25, 7.9 s 23(2) .… 7.9 s 24 .… 1.34, 11.9 s 25 .… 1.34, 11.9 s 26 .… 4.62 s 26(c) .… 5.25 s 26(d) .… 5.25 s 27 .… 11.34, 11.37 s 27(1) .… 12.3 s 27(2) .… 12.5 s 27AA(1) .… 11.37, 12.3, 12.5 s 28(1) .… 12.25 s 28(2) .… 12.25 s 29 .… 11.43 s 30(1) .… 1.53, 4.5, 4.21 s 30(1)(a) .… 5.34, 5.35 s 30(2) .… 3.31, 4.22, 4.34, 5.38

s 30(3) .… 3.31 s 30(4) .… 11.29 s 31 .… 5.22 s 31(1) .… 7.7 s 31(2) .… 7.7 s 31(2A) .… 7.7 s 31(2A)(r) .… 7.23 s 31(2B) .… 7.7 s 31(3) .… 7.21 s 31(4) .… 7.22 s 31(5) .… 7.22 s 32(1) .… 8.8, 8.25, 8.45, 8.54 s 32(1A) .… 8.25 s 32(1)(a) .… 2.10, 4.35, 8.47, 8.58 s 32(1A)(c)(ii) .… 8.60 s 32(1B) .… 8.25 s 32(2) .… 8.68 s 32(3) .… 8.54 s 32(6) .… 2.32 s 32A(1)(a) .… 11.23 s 32A(1)(b) .… 11.23 s 32A(2) .… 11.23 s 32A(3) .… 11.23 s 32AA(1) .… 8.94 s 32AA(2) .… 8.95 s 32AA(3) .… 8.94, 8.95

s 32AA(4) .… 8.95 s 32AB(1) .… 7.15 s 32AC(1) .… 8.45 s 32AC(2) .… 8.45 s 32AC(3) .… 8.45 s 32AD(1) .… 8.62, 11.10 s 32AD(4) .… 8.64 s 32AE(2) .… 11.34, 11.37 s 32AE(3) .… 11.33, 11.43 s 32AE(5) .… 11.30, 11.35, 11.39 s 32AE(6) .… 11.43 s 32AF .… 11.16 s 32AG(1) .… 12.25 s 32AG(2) .… 12.25 s 32AH(1) .… 9.42 s 32AH(2) .… 9.42 s 32AH(3) .… 9.42 s 32AH(4) .… 9.42 s 32AH(5) .… 9.42 s 33 .… 11.43 s 33(1) .… 10.20 s 33(1A) .… 10.20 s 33(1AA) .… 10.20 s 33(2) .… 10.20 s 33(2)(b) .… 3.50, 4.56 s 33(2)(d) .… 5.36

s 33(2)(e)(iii) .… 3.40 s 33(2)(f) .… 11.41 s 33(3) .… 10.20 s 33(4) .… 10.21 s 33(4A) .… 10.21 s 33(5) .… 10.21 s 33(6) .… 10.21 s 33(7) .… 10.21 s 34 .… 10.20, 10.22 s 35(1) .… 8.94, 10.22 s 35(2) .… 10.22 s 35(4) .… 10.22 s 35(6) .… 8.64, 10.22 s 35(7) .… 8.19, 10.22 s 36 .… 8.19 s 38 .… 1.53 s 39(1) .… 10.23 s 40(1) .… 10.23 s 40(2) .… 10.23 s 40(3) .… 10.23 s 40(4) .… 10.23 s 42(1) .… 4.49 ss 43–48 .… 11.43 s 43(1) .… 4.49 s 43(2) .… 4.49 s 44(1) .… 4.49

s 44(4) .… 4.49 s 45(2) .… 4.49 s 48(3) .… 8.19 s 49 .… 4.5 s 50(1) .… 4.23 s 50(2) .… 4.23 s 51(1) .… 12.24 s 51(1A) .… 12.24, 12.26 s 52 .… 12.25 s 55 .… 5.50 s 58B(2) .… 4.46 s 58B(11) .… 11.16 Form 3 .… 5.38 Form 4 .… 5.38 Sch 1 .… 1.52, 4.21, 4.34, 11.23 Powers of Attorney Amendment Act 2013 .… 4.22, 4.46, 7.7, 8.25, 8.45, 8.60, 8.95, 9.42, 10.20, 11.16 Relationships Act 2003 .… 4.22 Trustee Act 1898 s 6 .… 8.47 s 25AA .… 2.14 s 26(1) .… 12.35 s 26(2) .… 12.36 s 32 .… 2.12 s 50 .… 8.13 Wills Act 2008

s 58 .… 5.25 Victoria Administration and Probate Act 1958 s 86 .… 7.14 Associations Incorporation Reform Act 2012 s 35 .… 3.37 Children, Youth and Families Act 2005 Pt 4.9 .… 2.30 Pt 4.10 .… 2.30 Evidence (Miscellaneous Provisions) Act 1958 s 107 .… 4.26 s 107A .… 4.26 Evidence Act 2008 s 48 .… 4.48 s 146 .… 4.48 s 147 .… 4.48 Guardianship and Administration Act 1986 s 24 .… 2.31 s 48 .… 2.32 s 53 .… 9.41 Pt 3 .… 10.24 Pt 4 .… 2.31 Pt 4 Div 5A .… 2.31, 5.26 Pt 4A .… 1.55 Pt 5 .… 1.55, 2.32

Instruments Act 1958 .… 1.62, 3.30, 4.57, 12.36 s 104 .… 1.54 s 105(3) .… 5.24 s 106 .… 4.25 s 107 .… 1.54 s 107(1) .… 4.24, 4.50, 4.51, 5.22, 7.2, 8.68 s 107(2) .… 5.24 s 107(3) .… 5.24 s 108(1) .… 5.25, 7.9 s 108(2) .… 7.11 s 109(1) .… 1.34, 11.9 s 110(1) .… 12.28 s 110(2) .… 12.30 s 110(4) .… 12.30 s 110(5) .… 12.28 s 111(1) .… 4.48 s 111(1)(b) .… 4.48 s 114(1) .… 3.49 s 115(1) .… 1.55, 3.34, 7.7 s 115(2) .… 11.29 s 116 .… 4.49 s 117(1) .… 5.34 s 117(2) .… 1.55, 5.34 s 118(1) .… 3.30 s 118(2) .… 3.30 s 119(1) .… 4.50, 4.51

s 119(2) .… 4.51, 8.65 s 119(3) .… 4.51, 8.65 s 119(4) .… 3.48 s 120 .… 4.57 s 121 .… 3.49 s 122 .… 4.62 s 123(1) .… 4.24 s 123(2) .… 4.26 s 123(3) .… 4.26 s 124 .… 4.26 s 125(1) .… 4.26 s 125(2) .… 4.26 s 125(3) .… 4.26 s 125(5) .… 4.26 s 125A .… 4.9 s 125A(1) .… 4.26 s 125A(2) .… 4.26 s 125B .… 4.34, 5.38 s 125B(1)–125B(4) .… 4.26 s 125B(5) .… 4.26 s 125C .… 4.5 s 125D .… 8.62 s 125E(1) .… 5.25, 7.9 s 125E(2) .… 7.11 s 125E(3) .… 7.9 s 125F(1) .… 1.55

s 125F(2) .… 1.55, 2.31 s 125G .… 1.55, 2.32 s 125H(1)(a) .… 11.13 s 125I .… 11.10, 11.13 s 125J .… 11.16 s 125K .… 11.34 s 125L .… 11.3 s 125M(1) .… 11.24 s 125M(2) .… 11.23 s 125M(3) .… 11.24 s 125N .… 11.30 s 125O .… 11.39 s 125P .… 11.35 s 125Q .… 11.41 s 125R(1) .… 11.22, 11.30, 11.35, 11.39 s 125R(2) .… 11.22, 11.30, 11.35, 11.39 s 125S .… 12.29 s 125T .… 10.27 s 125U(1) .… 12.29 s 125U(2) .… 12.31 s 125V(1) .… 10.24 s 125V(2) .… 10.24 s 125W .… 10.24 s 125X .… 3.50, 4.56, 10.24, 11.41 s 125Y .… 10.24 s 125Y(1)(c) .… 3.40, 5.36

s 125Z .… 4.56, 8.94, 10.24 s 125ZA .… 10.24 s 125ZB(1) .… 8.64, 10.24 s 125ZB(2) .… 8.64, 10.24 s 125ZC(1) .… 10.25 s 125ZC(2) .… 10.25 s 125ZC(3) .… 10.25 s 125ZC(4) .… 10.25 s 125ZC(6) .… 10.25 s 125ZD(1) .… 10.25 s 125ZD(2) .… 10.25 s 125ZE .… 10.25 s 125ZE(1) .… 10.25 s 125ZE(2) .… 10.25 s 125ZG(2) .… 4.48 s 125ZG(3) .… 4.48 s 125ZH .… 4.48 s 125ZH(1) .… 4.48 s 125ZJ .… 4.48 s 125ZL .… 4.24, 4.26, 4.34 Pt XI .… 1.54 Pt XIA .… 1.55, 10.24 Sch 12 .… 1.54, 4.5, 8.68 Instruments (Enduring Power of Attorney) Act 2003 .… 1.35 Interpretation of Legislation Act 1984 s 53 .… 4.24

Marriage Act 1958 Pt VII .… 2.30 Medical Treatment Act 1988 .… 5.26 s 5A .… 1.55 Sch 2 .… 1.55 Powers of Attorney Act 2014 .… 1.6, 1.35, 1.36, 1.54, 2.31, 4.5, 4.24, 4.48, 4.51, 4.62, 5.26, 8.9, 8.26, 8.45, 10.24, 12.27 s 3(1) .… 1.36, 8.45 s 4(1) .… 3.30 s 4(2) .… 3.30 s 7(1) .… 4.25, 5.22, 7.2 s 7(2)(a) .… 8.68 s 7(2)(b) .… 5.24 s 8(1) .… 4.50 s 8(2) .… 4.51 s 8(2)(b) .… 4.51 s 10(1) .… 5.32 s 10(2) .… 5.32 s 11 .… 4.25 s 12(1) .… 7.9 s 12(2) .… 7.11 s 12(3) .… 7.9 s 15 .… 12.30 s 16 .… 4.48 s 16(4) .… 4.48 s 17 .… 1.35

s 18 .… 11.9 s 19 .… 1.35, 11.9 s 20 .… 12.30 s 22(1) .… 1.55, 7.7 s 22(2) .… 1.36, 5.26 s 22(3) .… 11.29 s 23(1) .… 3.30 s 23(1)(a) .… 3.34 s 23(2) .… 3.30 s 25 .… 8.67 s 26(a) .… 5.25 s 27 .… 7.9, 7.11 s 28(1)(a) .… 3.48 s 28(1)(b) .… 3.49 s 29 .… 4.62 s 30(1) .… 4.50 s 30(3) .… 4.51 s 30(3)(b) .… 4.51 s 30(4)(a) .… 4.51, 8.65 s 30(4)(c) .… 8.65 s 32 .… 4.24 s 33(a) .… 4.26 s 33(b) .… 4.26 s 34(1) .… 4.26 s 35(1)(b) .… 4.26 s 35(2) .… 4.26

s 35(2)(d) .… 4.26 s 36 .… 4.9 s 36(1) .… 4.26 s 36(2) .… 4.26 s 37 .… 5.38 s 37(a) .… 4.26, 4.34 s 37(b) .… 4.26 s 37(c) .… 4.26 s 38(a) .… 4.34 s 39(1) .… 5.34 s 39(1)(b) .… 5.35 s 39(2) .… 1.55, 5.34 s 39(3) .… 5.34 s 39(4) .… 5.36 s 43(1) .… 11.3 s 44 .… 11.10, 11.20 s 50 .… 12.4 s 51 .… 11.34 s 52 .… 11.35 s 53 .… 11.30 s 54(1)(a) .… 11.39 s 55 .… 11.16 s 56 .… 11.24 s 56(2) .… 11.24 s 57 .… 11.24 s 62(1) .… 11.22, 11.30, 11.35, 11.39

s 62(2) .… 11.22, 11.30, 11.39 s 62(4) .… 11.22 s 63(1)(a) .… 8.25 s 63(1)(e) .… 8.76 s 64(1) .… 8.45 s 64(2)(c)(i) .… 8.45 s 64(2)(c)(ii) .… 8.45 s 64(2)(c)(iii) .… 8.45 s 64(2)(c)(iv) .… 8.45 s 65(1) .… 8.45 ss 65(1)–65(3) .… 8.45 s 66 .… 8.62 s 67(1) .… 7.21 s 67(2) .… 7.22 s 68 .… 7.24 s 69(1) .… 8.54 s 69(2) .… 8.54 s 69(3) .… 8.54 s 70 .… 8.88 s 73 .… 12.29 s 74 .… 8.13 s 75(1) .… 12.29 s 75(2) .… 12.31 s 76 .… 10.27 s 77 .… 8.9, 8.45 s 79(1) .… 8.9

s 79(2) .… 8.9 s 81 .… 4.5 s 82 .… 4.48 s 83(1) .… 1.55, 2.32 s 116(1)(a) .… 8.94, 10.24 s 116(1)(b) .… 10.24 s 116(1)(e)–(g) .… 8.64, 10.24 s 117(1) .… 4.25 s 118 .… 10.24 s 118(a) .… 5.36 s 118(c) .… 3.40 s 119 .… 10.24 s 120 .… 4.56 s 120(1) .… 10.24 s 120(1)(b) .… 3.50, 10.24, 11.41 s 120(2) .… 3.50, 10.24, 11.41 s 121 .… 10.24 s 122(1) .… 10.24 s 123 .… 10.24 s 125 .… 10.25 s 126(a) .… 10.25 s 126(b) .… 10.25 s 126(c) .… 10.25 s 127 .… 10.25 s 128 .… 10.25 s 129 .… 10.25

s 130 .… 10.25 s 131 .… 10.25 s 132 .… 10.25 s 133(1) .… 10.25 s 135 .… 8.19 s 135(1) .… 3.40 s 135(2) .… 3.40 s 138 .… 4.49 Property Law Act 1958 s 74(3) .… 7.9, 7.13 s 74(4) .… 7.9, 7.13 s 134 .… 2.26 Trustee Act 1958 s 5 .… 8.47 s 28 .… 2.14 s 30 .… 2.14 s 35(2) .… 12.35, 12.36 s 48 .… 2.12 s 67 .… 8.13 Victorian Civil and Administrative Tribunal Act 1998 s 148(1) .… 10.26 s 148(2) .… 10.26 s 148(3) .… 10.26 s 148(5) .… 10.26 s 148(7) .… 10.26 s 148(8) .… 10.26

Wills Act 1997 s 48 .… 5.25 Western Australia Administration Act 1903 s 34 .… 7.14 Associations Incorporation Act 1987 s 15 .… 3.37 Evidence Act 1906 s 73A .… 4.48 Family Court Act 1997 s 71 .… 2.30 Guardianship and Administration Act 1990 .… 1.62, 4.29, 4.57, 12.33 s 45 .… 2.31 s 102 .… 4.30, 4.51, 4.53 s 104(1) .… 4.29 s 104(1a) .… 3.34 s 104(1)(b)(i) .… 1.56, 5.34 s 104(1)(b)(ii) .… 5.35 s 104(2)(a) .… 4.30 s 104(2)(b) .… 4.30, 4.34, 5.38 s 104(3) .… 4.30 s 104A(1) .… 4.49 s 104A(2) .… 4.49 s 104B .… 4.30, 4.53, 4.57 s 104C .… 3.48

s 105(1) .… 11.29 s 105(2) .… 11.29 s 106 .… 4.29, 5.36 s 106(5) .… 5.36 s 107 .… 8.19 s 107(1)(a) .… 8.8, 8.25 s 107(1)(b) .… 8.62 s 107(1)(c) .… 11.23 s 107(1)(d) .… 10.28, 11.39 s 108 .… 2.32 s 108(1) .… 1.56 s 108(1a) .… 1.56 s 109(1) .… 10.28, 11.39 s 109(1)(b) .… 8.64 s 109(1)(c) .… 3.50, 4.56, 11.41 s 109(2) .… 8.94, 10.28, 11.23, 11.39 s 109(3) .… 10.28, 11.39 s 109(4) .… 10.28 s 110 .… 10.28 s 110F .… 2.31, 5.26 Pt 5 .… 1.56, 2.31 Pt 6 .… 2.32 Pt 9 .… 1.56 Pt 9A .… 2.31, 5.26 Pt 9B .… 1.56, 2.31, 5.26 Sch 3 Form 1 .… 4.29

Sch 3 Form 1 cl 4(a) .… 1.56 Sch 3 Form 2 .… 4.30, 4.34, 5.38 Oaths, Affidavits and Statutory Declarations Act 2005 Sch 2 .… 4.30 Property Law Act 1969 s 10(4) .… 7.13 s 10(5) .… 7.13 s 20 .… 2.26 s 84(1) .… 5.25, 7.9 s 84(2) .… 7.9 s 85(1) .… 12.32 s 85(2) .… 12.32 s 85(3) .… 12.32 s 85(4) .… 12.32 s 85(5) .… 12.32 s 85(7) .… 12.34 s 86(1) .… 1.34, 11.9 s 87(1) .… 1.34, 11.9 Pt VIII .… 1.56, 3.34 Registration of Deeds Act 1856 s 13 .… 4.37, 11.42 State Adminstrative Tribunal Act 2004 s 105(1) .… 10.29 s 105(2) .… 10.29 s 105(3) .… 10.29 s 105(5)(a) .… 10.29

s 105(6) .… 10.29 s 105(7) .… 10.29 s 105(9) .… 10.29 s 105(10) .… 10.29 Pt 5 .… 10.29 Transfer of Land Act 1893 s 143 .… 12.34 s 143(1) .… 4.27 s 143(2) .… 12.34 s 143(3) .… 12.34 s 143(4) .… 12.34 s 145(1)(a) .… 4.28 s 145(1)(b) .… 4.28 s 145(2) .… 4.28 s 145(3) .… 4.28 Sch 19 .… 4.27 Trustees Act 1962 s 17 .… 8.47 s 53 .… 2.14 s 54 .… 2.14 s 69(1) .… 12.35 s 69(2) .… 12.36 s 75 .… 8.13 s 77 .… 2.12 Canada

Enduring Powers of Attorney Act 1990 (Nfld & Lab) .… 1.63 s 6 .… 8.13 s 6(2) .… 2.10 Power of Attorney Act 1996 (BC) .… 1.63 s 19(3)(d) .… 9.40 Power of Attorney Regulation 2011 (BC) .… 7.20 Powers of Attorney Act 1988 (PEI) s 5 .… 1.63 Powers of Attorney Act 1989 (NS) .… 1.63 Powers of Attorney Act 1996 (BC) s 20(1)(c) .… 7.20 Powers of Attorney Act 1996 (Man) .… 1.63, 3.16 s 10(3) .… 3.18 s 18 .… 4.51 Powers of Attorney Act 2000 (Alta) .… 1.63 s 5 .… 5.37 s 6 .… 5.37 s 7(b) .… 7.23 Powers of Attorney Act 2001 (NWT) .… 1.63 ss 7–10 .… 5.37 s 14 .… 7.23 s 19 .… 4.51 Powers of Attorney Act 2002 (Sask) s 2(1) .… 1.63 s 4(1) .… 1.63 s 9 .… 5.37

s 10 .… 5.37 s 16(1) .… 7.23 Pt II .… 1.63 Powers of Attorney Act 2006 (Man) ss 6–9 .… 5.37 s 19(2) .… 8.23 s 19(3) .… 8.23 Substitute Decisions Act 1992 (Ont) ss 7–14 .… 1.63 s 33 .… 8.13 s 35.1 .… 9.40 ss 46–53 .… 1.63 Hong Kong Powers of Attorney Ordinance (Cap 31) s 5(4) .… 12.18 s 5(4)(b) .… 12.18 s 6(1) .… 7.11 Ireland Enduring Powers of Attorney Regulations 1996 Sch 1 .… 4.8 Powers of Attorney Act 1996 s 5(2) .… 4.8 s 6(4) .… 7.23 New Zealand

Protection of Personal and Property Rights Act 1988 s 65 .… 8.62 s 93B(1)(a) .… 3.26 s 94(1) .… 3.18 s 94(3) .… 3.18 ss 97–99 .… 1.64 s 99A(1)(a) .… 8.83 s 99A(3) .… 8.83 s 99B .… 8.62 s 99C .… 8.62 s 102(2)(g) .… 8.47 s 102(2)(ga) .… 8.47 s 103B .… 9.33 s 104 .… 4.32 s 107(1)(a) .… 8.47 s 107(1)(b) .… 8.47 s 107(1)(c) .… 8.47 s 107(2) .… 8.47 Pt 9 .… 1.64, 3.15 Trustee Act 1956 s 13A .… 8.47 United Kingdom Enduring Powers of Attorney Act 1985 .… 1.60, 1.61, 3.14 s 1(1)(b) .… 3.14 s 3 .… 3.14

s 4 .… 3.14 s 6(5)(e) .… 3.14, 3.50 s 6(6) .… 3.18 s 8 .… 3.14 Judicature Act 1873 .… 9.15 Leasehold Reform, Housing and Urban Development Act 1993 s 99(5)(a) .… 5.29 s 99(5)(b) .… 5.29 Mental Capacity Act 2005 s 2(1) .… 3.24 s 3(1) .… 3.24 s 9(1) .… 1.61 s 9(2)(b) .… 1.61 s 9(3) .… 1.61 s 10(8) .… 4.58 s 12(2) .… 7.21 s 12(4) .… 7.21 ss 45–56 .… 1.61 ss 57–60 .… 1.61 Sch 1 cl 2(1)(c) .… 1.61 Sch 1 cl 6–10 .… 1.61 Sch 1 Pt 2 .… 1.61, 3.50, 4.37 Sch 4 .… 1.61 Sch 4 cl 4 .… 1.60 Sch 4 cl 13(9) .… 1.60 Powers of Attorney Act 1971 .… 1.60

s 1(1) .… 4.6 s 7(1)(b) .… 5.25 United States Cal Prob Code §4264 .… 6.48 Fla Stat ch 709.08(7)(b)5 .… 6.48 Mo Rev Stat §404.710(6) .… 6.48 Neb Rev Stat §30-3854(e) .… 6.48 Uniform Durable Power of Attorney Act 1979 .… 1.59 Uniform Power of Attorney Act 2006 .… 1.59 §201(a)(2) .… 7.20 Uniform Probate Code 1969 .… 1.59 Uniform Trust Code §602(e) .… 6.48 Utah Code Ann §75-5-503 .… 6.48 Wash Rev Code §11.94.050 .… 6.48

Table of Abbreviations Books and treatises F B Alcock, Powers of Attorney, New Era Publishing Co Ltd, London, 1935 T M Aldridge, Powers of Attorney, 10th ed, Aldridge Sweet & Maxwell, London, 2007 P Watts and F M B Reynolds, Bowstead and Bowstead Reynolds on Agency, 19th ed, Sweet & Maxwell, London, 2010 J W Carter, Contract Law in Australia, 6th ed, Carter LexisNexis Butterworths, Australia, 2013 B Collier and S Lindsay, Powers of Attorney in Collier & Lindsay Australia and New Zealand, The Federation Press, Sydney, 1992 D Lush, Cretney & Lush on Lasting and Cretney & Lush Enduring Powers of Attorney, 7th ed, Jordans, Bristol, 2013 G E Dal Pont, Law of Agency, 3rd ed, Dal Pont, Agency LexisNexis Butterworths, Australia, 2014 G E Dal Pont, Equity and Trusts in Australia, 6th Dal Pont, Equity & Trusts ed, Lawbook Co, Australia, 2015 Restatement of the Law — Agency, American Restatement (3d) Law Institute, 3d, 2006 Alcock

Law reform reports

ALRC

Australian Law Reform Commission, Community Law Reform for the Australian Capital Territory: Third Report, Enduring Powers of Attorney, AGPS, 1988

ALRI ALRI (DP)

BCLRC

ILRC Law Com 122 NLRC NSLRC (DP) NSWLRC

NSWLRC (WP)

NZLC

QLRC TLRC VPLRC

Alberta Law Reform Institute, Enduring Powers of Attorney, Report No 59, December 1990 Alberta Law Reform Institute, Enduring Powers of Attorney, Report for Discussion No 7, February 1990 Law Reform Commission of British Columbia, The Enduring Power of Attorney: Fine-Tuning the Concept, Working Paper No 62, 1989 Law Reform Commission, Ireland, Report on Land Law and Conveyancing Law: (2) Enduring Powers of Attorney, LRC 31 – 1989 Law Commission, The Incapacitated Principal, Law Com No 122, London, 1983 Newfoundland Law Reform Commission, Report on Enduring Powers of Attorney, NLRC – R2, December 1988 Nova Scotia Law Reform Commission, Powers of Attorney Act, Discussion Paper, March 2014 Law Reform Commission of New South Wales, Powers of Attorney and Unsoundness of Body or Mind, LRC 20, 1975 Law Reform Commission of New South Wales, Working Paper on Powers of Attorney, Sydney, 1973 Law Commission, New Zealand, Misuse of Enduring Powers of Attorney, Report 71, Wellington, New Zealand, April 2001 Queensland Law Reform Commission, A Review of Queensland’s Guardianship Laws, Report No 67, September 2010 Law Reform Commission of Tasmania, Report on Powers of Attorney, Report No 39, 1984 Victorian Parliament Law Reform Committee, Inquiry into Powers of Attorney, Final Report,

August 2010 WCLRA

Western Canada Law Reform Agencies, Enduring Powers of Attorney: Areas for Reform, Final Report, 2008

Court/jurisdiction abbreviations1 Alta App Div BC CA CCA Ct DC Div Ct Fam Ct FC FCA Fed HC HCJ HL Man Nfld NS NWT Ont PC PEI Sask SC

Alberta Appeal (or Appellate) Division British Columbia Court of Appeal(s) Court of Criminal Appeal Court or Circuit (depending on context) District Court Divisional Court Family Court of Australia Full Court Federal Court of Australia Federal Gen Div General Division High Court High Court of Justice House of Lords Manitoba Newfoundland Nova Scotia North Western Territories (Canada) Ontario Privy Council Prince Edward Island Saskatchewan Supreme Court

SCC SCJ

1.

Supreme Court of Canada Superior Court of Justice

Abbreviations for jurisdictions of cases from the United States omitted.

Contents Preface Table of Cases Table of Statutes Table of Abbreviations

Part I

Power Defined

1. Conceptualising Powers of Attorney 2. Powers of Attorney Distinguished From Other Legal Relationships

Part II

Power Created

3. Capacity of Principal and Attorney 4. Creating a Power of Attorney

Part III

Power Delimited

5. Authority of Attorney 6. Construction of Attorney’s Authority 7. Scope of Attorney’s Authority Under Statute

Part IV

Power Impacted

8. Relations Between Principal and Attorney 9. Relations With Third Parties 10. External Supervision of Attorneys

Part V

Power Ended

11. Termination of Attorneyship 12. When Termination Takes Effect Index

[page 1]

PART I

Power Defined Part I of this work is directed to giving colour to the legal concept of a power of attorney. Chapter 1 does so by, inter alia, defining the concept, by cataloguing the characteristics that powers of attorney exhibit, and by identifying the classifications the law adopts for powers of attorney. This conceptual focus operates in tandem with Chapter 2, which compares and contrasts powers of attorney with other related relationships known to the law.

[page 3]

Chapter 1

Conceptualising Powers of Attorney Definition and characteristics Terminology As an agency relationship Application of agency principles to authority and duties under power Breadth of application But not all agencies are powers of attorney But powers of attorney require greater formality Use of terms ‘agent’ and ‘principal’ in statute Function(s) of powers of attorney What powers of attorney are not Powers of attorney are not ‘proprietary’ Powers of attorney are not usually ‘contractual’ Classification of powers of attorney According to scope of authority — ‘general’ vs ‘special’ powers According to what triggers the power — ‘springing’ and ‘enduring’ powers ‘Springing’ powers ‘Enduring’ powers Establishing the occurrence of the triggering event According to revocability — ‘revocable’ vs ‘irrevocable’

1.2 1.3 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.16 1.16 1.18 1.19 1.19 1.24 1.24 1.25 1.28

powers At general law Under statute Powers of attorney regulated under statute Australian Capital Territory New South Wales Northern Territory Queensland South Australia Tasmania

1.30 1.30 1.34 1.35 1.37 1.41 1.44 1.46 1.50 1.52 [page 4]

Victoria Western Australia Historical backdrop to enduring powers of attorney legislation United States United Kingdom Australia Canada New Zealand

1.54 1.56 1.58 1.59 1.60 1.62 1.63 1.64

1.1 The legal vehicle of what is known as a ‘power of attorney’ is germane to various forms of legal practice, ‘essentially a matter of convenience’.1 In the commercial arena the effecting of transactions through an attorney is commonplace. No less so in the family arena, where the adoption of powers

of attorney as a means of vesting in a trusted family member or friend a defined authority has been an accepted practice for centuries. And the statutory recognition of powers of attorney that operate even in the event that their creator loses mental capacity — ordinarily termed ‘enduring powers of attorney’ — has served to further extend their utility. The frequency with which powers of attorney are created, and their value both in commercial and family applications, makes it surprising that, with limited exceptions,2 the law pertaining to powers of attorney has received relatively little dedicated coverage in monograph form.3 Not that relevant law in the field is lacking. In Australia, for instance, most jurisdictions have enacted legislation specific to powers of attorney. The recency of substantial amendments to, or the enactment of, these statutes highlights the topicality of legal issues generated by powers of attorney. Recent enactments also surface in other common law jurisdictions. These statutory incursions have frequently been staged against the backdrop of reports by law reform commissions.4 Indeed, the number of law reform commission [page 5] reports across common law countries belies the relative dearth of commentary, both academic and professional. What those reports highlight, over decades now, is that the antiquity of the law governing powers of attorney does not shield the need to engage in reform, whether minor or wholesale. At the same time, the reports reveal that the use of powers of attorney raise similar challenges across the common law world. Thus a work focused on powers of attorney cannot only reflect on statutory reforms in the main common law jurisdictions. Nor can it isolate itself to case law from one country — Australia — in which it is written. Little more than a cursory review of cases beyond Australia — from the United Kingdom, United States of America, Canada, New Zealand, Hong Kong, Singapore and Malaysia — brings a realisation that the common law of powers of attorney bears a

remarkable resemblance. Accordingly, no apology is needed for adopting a jurisdictional survey of the relevant law beyond the Antipodes.

Definition and characteristics 1.2 A leading legal dictionary defines a ‘power of attorney’ as ‘a formal instrument by which one person empowers another to represent him, or act in his stead for certain purposes’.5 What this definition reveals, beyond the term having ‘taken on a distinctive meaning in legal parlance’,6 is that characteristic of a power of attorney are three features: it it is formed via a document or instrument that is formal as opposed to informal; it is designed to effect a relationship whereby one person ‘represents’ another; and there may be limits to the scope of that representation. Each of these characteristics requires elaboration. As to the first one, a typical means by which the law recognises a formal instrument is via a deed. Indeed, case authority seems to favour the view that the term ‘power of attorney’ applies, at general law, only to an authority conferred by deed.7 Though most of the statutory form(s) nowadays no longer mandate use of a deed, it is not uncommon for statute to prescribe that a power following the statutory form is taken to be, or otherwise take effect, as a deed.8 Formality, though, remains consonant with a written document, and the law does not recognise an alleged power of attorney created orally.9 The prescribed formalities applicable to powers of attorney are discussed in detail in Chapter 4. The second characteristic — the ‘representative’ aspect — is what brings the law of powers of attorney within the realm of agency law. Although the law knows of persons acting in, or akin to, a representative capacity outside the law of agency,10 more so than any other discrete area of law it is agency that gives legal colour to one person being a representative of another. This explains why it is hardly uncommon for legal dictionaries to couch powers of attorney in the language of agency. An Australian [page 6]

legal dictionary, for instance, conceptualises a power of attorney as ‘[t]he authority for one person to act in the place of another as agent’.11 This draws support from copious judicial statements that describe powers of attorney as a species of agency. These statements, and their ramifications, are catalogued later in this chapter.12 As a confluence of the second and third characteristics noted above, the concept of ‘authority’ lies at the core of powers of attorney.13 That a person (B) represents another (A) dictates that B must have some authority to act on A’s behalf. As the scope of that representative capacity is aligned with the scope of that authority, it is legitimate to investigate how the authority in any given power of attorney is to be construed, a point developed in Chapter 6. The issue of authority may also go to terminology: a restricted authority is indicative of a ‘special power of attorney’, distinguished from the ostensibly unrestricted ‘general power of attorney’. This distinction is both developed and queried below.14

Terminology 1.3 Building on the characteristics mentioned above, perhaps a more encompassing definition of a power of attorney is the following, adopted in multiple American cases:15 an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal.

As this definition is phrased in agency law terms, the person who grants the power (A) is termed the ‘principal’ and the person to whom the power is granted (B) is the ‘agent’. Although this terminology is hardly inaccurate, it does little to mark powers of attorney as a specific form of agency. 1.4 Some instead refer to A and B, respectively, as the ‘grantor’ and ‘grantee’ of the power.16 In being shorn of obvious links to agency, it may be that this terminology goes too far the other way. Moreover, the terms ‘grantor’ and ‘grantee’ are frequently used in the context of a grant of interest in land or otherwise in the context of options, neither of which necessarily has any parallels with powers of attorney. More usual is the description of A and B as ‘donor’ and ‘donee’ of a power

of attorney. Also shorn of an ostensible link to the law of agency — the language of donor and donee is rarely used in the context of agency relationships in the main — what this terminology does is evidence a link to the law of powers. As discussed in Chapter 2, the concept of a ‘power’ at law or in equity knows various permutations,17 but it is [page 7] clear that it may encompass the power of attorney. Also, as a matter of practical reality, most powers of attorney do not involve the transfer of consideration between A and B,18 making the language of gift inherent in the terms ‘donor’ and ‘donee’ somewhat fitting. Yet as in the law the terms ‘donor’ and ‘donee’ are not unique to powers of attorney — aside from the law of powers generally, the terms are adopted to describe all transactions effected by way of gift — this terminology may also be prone to mislead. Not all powers of attorney, in any case, involve the characteristics of a gift. It is, therefore, more accurate to describe A and B, respectively, as ‘principal’ and ‘attorney’. Using the term ‘principal’ highlights the agency nature of that relationship, and the term ‘attorney’ marks the agency relationship in question as one of a power of attorney. Thus the description of the respective parties in this way serves to identify the relationship in question as unique: a power of attorney, and no other. It is, for this reason, the most targeted and accurate terminology. 1.5 That is not to say that the term ‘attorney’ is always used in the law solely in the context of powers of attorney. Historically in English law, a solicitor was described as an attorney.19 In the United States this remains common usage. Rather than being termed a principal, the person who confers authority on the attorney in this context is ordinarily termed a ‘client’. In any case, American law distinguishes the lawyer-attorney from an attorney under a power of attorney by branding the former an ‘attorney-at-law’ and the latter an ‘attorney-in-fact’.20 It is possible, nonetheless, for a lawyer to act in the capacity of attorney under a power, whether for a client or a third party, in which case the lawyer clearly acts as an agent. But although the lawyer-client relationship is often viewed in terms of agency, far from all aspects of that relationship function under a power of attorney — much of lawyers’

authority arising out of their agency under a retainer is implied authority rather than formal written authority21 — and aspects of that relationship display no agency characteristic(s) at all.22 1.6 Reflecting the variety of terminology adopted in the case law, the statutes dedicated to powers of attorney do not adopt a common terminological schema. The Northern Territory, Tasmania and South Australia use the terms ‘donor’ and ‘donee’, while Victoria currently prefers ‘donor’ and ‘attorney’. The Australian Capital Territory, New South Wales and Queensland Acts (as well as the Powers of Attorney Act 2014 (Vic), which is yet to commence) opt instead for ‘principal’ and ‘attorney’, in line with the approach suggested above. 1.7 The variable use of terminology makes it difficult, therefore, to be entirely consistent in the use of terms for the purposes of this work. That the distinctions lie in wording, not meaning, means that the interchangeable use of principal, grantor or donor, and of agent, grantee, donee or attorney, make no difference in substance. [page 8] Yet where possible, the book favours ‘principal’ and ‘attorney’ as descriptors of the relevant parties to a power of attorney.

As an agency relationship 1.8 That powers of attorney fit within the confines of the law of agency may explain, at least in part, why they have received relatively little discrete commentary, being instead relegated to filling small portions of established works on agency law. Certainly what judicial statements there are clearly describe powers of attorney as a form of agency. Beyond the definitions that use the terminology of agency, direct statements can be found to the effect that a power of attorney is ‘a species of agency’23 and ‘merely the appointment of an agent’,24 such that the term ‘attorney’ is a synonym for ‘agent’25 or at least ‘a particular type of agent’.26 It follows that a valid power of attorney creates a relationship of principal and agent,27 ‘is in principle no

more than the grant of a form of agency’,28 and so ‘depends for its efficacy’ on agency law.29 The foregoing has three main ramifications, catalogued below under separate sub-headings.

Application of agency principles to authority and duties under power 1.9 The most obvious ramification is that, in the words of an American court, ‘[b]ecause a power of attorney creates an agency relationship, agency principles are applicable in determining the authority and duties of the attorney in fact’.30 The scope of the authority conferred under a power of attorney, discussed in Chapters 5 and 7, is heavily influenced by the principles governing agency law in this regard. Yet it should not be assumed that agency law principles apply unadulterated for this purpose. The wellestablished notion that authority under a power of attorney is construed strictly31 does not enjoy unqualified application to agency relationships generally.32 The duties of attorneys do, though, align closely with those of agents at general law, albeit supplemented by specific duties under statute. These are developed in Chapter 8. Aside from the obvious duty to act according to, and within, the scope of the power of attorney, the law — in this case sourced from equity — superimposes on attorneys, like agents generally,33 fiduciary duties to their principal.34 That a principal, in vesting authority in an attorney, places (sometimes considerable) trust in the attorney not to abuse that authority, and cause detriment to the principal, marks the power of attorney as a worthy target for fiduciary law. In this sense American [page 9] courts describe the relationship as a ‘confidential’ one.35 The sole exception to this proposition is arguably the irrevocable power of attorney, which so differs in nature to the ordinary revocable power as to obviate the need to attract fiduciary duties.36 The rights of agents generally — which usually focus on remuneration (or

commission)37 and lien or indemnity38 — have limited relevance as regards powers of attorney, as the latter often do not involve the payment of reward or the incurrence of liability. That is not to say, though, that these rights cannot accrue to attorneys; as agents they indeed can,39 but it depends on the terms of, and the nature and scope of the authority conferred by, the power. Because powers of attorney are not infrequently used to confer upon attorneys an authority to contract on the principal’s behalf, agency law principles governing the rights and obligations of principal and agent in this context apply directly to the principal-attorney relationship. The discussion in Chapter 8 addresses these, as well as the potential rights and obligations of each party outside of contract arising out of the principal-attorney relationship, chiefly in tort and under statute. Again, the latter largely reflect agency law principles.

Breadth of application 1.10 A second ramification is that the latitude underscoring the legal concept of agency translates to powers of attorney. In its most traditional sense agency connotes ‘an authority or capacity in one person to create legal relations between a person occupying the position of principal and third parties’.40 A broader conception covers ‘a person who is able, by virtue of the authority conferred upon him, to create or affect legal rights and duties as between another person … and third parties’.41 Wider again is an agent as ‘a person who has authority to act on behalf of a principal, either generally or in respect of some particular act or matter’.42 As each of these manifestations of agency goes to the scope of the authority vested in the agent, a power of attorney can, subject to any restrictions imposed at general law or under statute, encompass any of them. For instance, while some powers of attorney may authorise the attorney to contract on behalf of the principal, others may be limited to authorising the attorney to act in the principal’s stead for a more limited purpose. It has been judicially observed, to this end, that an instrument appointing a person to receive interest or dividends on any shares, or appointing a proxy to vote, though it appoints a person ‘to act as an agent in a sense other than that person has authority to enter legal relationships on behalf of the grantor’, may nonetheless be a valid power of attorney.43

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But not all agencies are powers of attorney 1.11 Notwithstanding this breadth, while all powers of attorney involve an agency in some shape or form, not all agencies are powers of attorney. The incidents of agency that can characterise other types of legal relationships — including those between lawyer and client, receiver and company (or debenture holder), director and company, or partners in a partnership — do not mean that these relationships involve powers of attorney. As mentioned earlier in relation to lawyers,44 powers of attorney can be utilised in the course of other agency-type relationships. But this rests on the deliberate creation of a power of attorney within that relationship, not on any characteristic inherent in that relationship. In other words, whereas agency can in some relationships almost be deemed as a matter of law, the converse is the case regarding powers of attorney. As a particular species of agency, a power of attorney exhibits features inherent in an agency relationship, namely assent between principal and agent, authority conferred on the agent, and (possibly) control by the principal over the agent.45 A power of attorney, as noted earlier, clearly involves authority. In a sense, it requires a level of assent between the principal and attorney, at least for its effectiveness, although the assumption underscoring this — namely that powers of attorney are contractual in nature — cannot be accepted categorically.46 And control (or at least the ability to control) by principal over attorney may also mark a power of attorney — indeed arguably more so in the case of powers of attorney than ordinary agencies given that powers of attorney are ordinarily revocable at will of the principal47 — although this requires qualification in the case of irrevocable powers48 and enduring powers.49 More fundamentally, the ‘representative’ aspect inherent in the concept of agency is reflected in judicial characterisations of powers of attorney that variously speak of attorneys acting ‘on behalf of’,50 ‘for’,51 in ‘stead of’52 or as ‘essentially an alter ego of’53 the principal.

But powers of attorney require greater formality

1.12 Yet what marks a power of attorney as a particular species of agency is its formality. Multiple judicial statements speak in terms of a power of attorney being an ‘instrument in writing’,54 a ‘written document’,55 ‘a written authorization’56 or a ‘formal delegation’57 of authority. Chapter 4 discusses the formality requirements. Whether [page 11] or not a relationship of agency is created is a matter of substance rather than one of form; there is, accordingly, nothing to prevent an agency being created orally.58 But as powers of attorney require writing, and at general law were arguably required to be constituted by deed,59 inquiry into their creation is hardly independent of form. Part and parcel of this formality is the description of a power of attorney as a document that creates ‘express authority’.60 Beyond the notion that it is unlikely that a power of attorney, as distinguished from an agency generally, will be created solely by implication, reference to express authority in this context indicates that the basic authority conferred by the power should be in terms that are ‘certain and plain’.61 This does not mean that attorneys can never be vested with implied authority,62 but that the scope of any implied authority must clearly emanate from the terms of the express authority. Coupled with the focus on form, which has been given impetus by statute (which in most jurisdictions contains one or more prescribed forms), the power of attorney involves a unique species of agency in view of statutes dedicated to its formation, consequences and regulation. These set a framework that steps beyond the general law of agency, especially as regards the purely statutory creation of the enduring power of attorney.63 Within the latter concept, and also via other statutory concepts,64 whether or not under the power of attorney moniker, scope exists for attorneys to make personal decisions, including those relating to medical treatment, for a principal. At general law the personal nature of agency arguably precludes grants of this kind of authority.65

Use of terms ‘agent’ and ‘principal’ in statute

1.13 A third ramification of the law of agency enveloping powers of attorney is that if the terms ‘agent’ and ‘principal’ are used in a statute, this encompasses parties to a power of attorney; likewise, the statutory use of the term ‘agency’ includes a power of attorney.66 The foregoing is so unless the statutory language expressly or by necessary implication indicates otherwise.

Function(s) of powers of attorney 1.14 At its most basic, the purpose of a power of attorney is as a vehicle whereby one person (the principal) can vest in another person (the attorney) the power and authority to perform acts on his or her behalf. The scenarios in which powers of attorney may, to this end, have utility are manifold, and not amenable to exhaustive cataloguing. Yet as mentioned at the outset of this chapter, powers of attorney make as much a contribution to the conduct of family relations as to the conduct of business transactions, large and small. [page 12] 1.15 Inherent in the purpose of powers of attorney, though, is an evidential function. Judges have described a power of attorney as ‘a written authorization used to evidence an agent’s authority to a third person’,67 as ‘evidence that the holder of the power of attorney may act as agent for the principal to the extent set forth therein’68 and as ‘the donor’s statement to the world that the donee is authorised to act as agent for the donor’.69 Indeed, an American appellate court has gone so far as to mark the ‘primary purpose’ of a power of attorney as ‘not to define the authority conferred on the agent by the principal, but to provide third persons with evidence of agency authority’.70 Though it may be going too far to brand the evidential function as the ‘primary purpose’, the essential point emanating from the above judicial observations is that powers of attorney are more than about the relationship between the principal and the attorney. Consistent with the encapsulation of powers of attorney within agency law, and with its attendant ‘representative’ characteristic, powers of attorney are about granting the attorney a power to

impinge upon the principal’s individual autonomy, and thereby in most instances impact on the principal’s legal position vis-à-vis third parties. Stemming from the formality required of powers of attorney, it is unsurprising that the relevant written instrument should perform an evidential role. The foregoing explains why Chapter 9 discusses the legal effect of powers of attorney on the relationship between the principal and the third party effected via the attorney — which at general law is largely the product of agency law principles, but which in the case of powers of attorney is supplemented by specific statutory provision according protection to third parties in specified instances.71

What powers of attorney are not Powers of attorney are not ‘proprietary’ 1.16 As noted earlier in this chapter,72 powers of attorney, like agency, are about authority. They are not about property or ownership. It has been judicially observed, to this end, that ‘a power of attorney confers no interest in property, it merely confers authority’.73 This has important ramifications. It means, for instance, that although trusteeship and attorneyship exhibit some similarities, including fiduciary duties, they are different in substance.74 It also explains why the law distinguishes a power of attorney from an assignment;75 the latter, after all, is intended to effect the transfer of an existing proprietary right. The parting with dominion that lies at the core of transferring interests in property, whether by assignment or by way of gift,76 is foreign to the power of attorney. [page 13] 1.17 Stemming from the law of agency, in the usual case an attorney is not a contracting party to the transaction or dealing effected on behalf of the principal under the power of attorney.77 This means that, generally speaking, the attorney lacks any beneficial interest in the dealings he or she is

authorised to transact for the principal.78 The assumption of personal responsibility or liability in representing the principal may, though, convert the attorney’s position from one of ‘agent or facilitator’ to a party, at least for some purposes. Here the principles that render an agent personally liable to a third party apply with equal force to powers of attorney.79

Powers of attorney are not usually ‘contractual’ 1.18 Whereas agency law principles apply to attorneys contracting on a principal’s behalf, there is divergent authority as to whether or not the relationship between principal and attorney itself is contractual in nature. The case law that views powers of attorney as contractual seems to be influenced by the assumed contractual nature of agency generally. Yet this assumption can be challenged — the law recognises multiple instances of non-contractual agencies80 — and so there is a need to distinguish powers of attorney from contracts. This is addressed in Chapter 2,81 which also differentiates powers of attorney from certain other legal relationships.

Classification of powers of attorney According to scope of authority — ‘general’ vs ‘special’ powers 1.19 Agency law recognises the distinction between universal, general and special agents. An agent who is authorised to do anything that the principal has the power to do, and to bind the principal in this way, can be termed a ‘universal agent’.82 Other agents, often termed ‘general agents’, may represent the principal only in matters pertaining to a particular profession, trade or business, but within which they may exercise authority usually on a continuing basis.83 For example, the managing director of a company acts as a general agent for the company in carrying on the company’s business.84 An agent is a ‘special agent’ if he or she is authorised only to do a specified act or class of acts on behalf of the principal.85 The above classification is premised on the breadth of authority conferred on the agent. And on this ground powers of attorney are also sometimes

classified. The usual distinction made, and one that appears in statute in some jurisdictions, is that between ‘general’ powers of attorney and ‘special’ (or ‘limited’) powers of attorney.86 Although [page 14] it is by no means clear, the ‘general’ power appears to represent an amalgam of the universal agent and the general agent, whereas the ‘special’ (or ‘limited’) power aligns more closely with the special agent.87 1.20 Yet in agency law generally the utility of a classification based on the breadth of an agent’s authority has been queried by both English and American commentators,88 and the American Restatement on Agency states that ‘[t]he labels matter less than the underlying circumstances that warrant their application’.89 This has translated to at least one judicial statement in the context of powers of attorney, an American appellate court describing the distinction between a general and a limited power of attorney as ‘a distinction without a difference’ because, in going only to the scope of the authority vested in the attorney, ‘[i]t does not alter or diminish the right of a third party to rely upon it when dealing with a principal who appears to be acting within the scope of his or her authority’.90 1.21 The latter observation brings into play the doctrine of ostensible authority, which applies in the context of powers of attorney as it does in agency law generally. It is premised on the notion that a principal who has ‘held out’ an attorney as having broader authority than under the actual terms of the power is estopped, as against a third party who deals with the attorney within that broader ‘apparent’ authority, from maintaining that the attorney lacked authority to deal in the manner in question. As it relates to the relationship between the principal and a third party, ostensible authority, as it applies to powers of attorney, is discussed elsewhere.91 Yet it should not be assumed that attorneys always possess ostensible authority broader than the authority conferred by the terms of the power. As powers of attorney are by their very nature formal written documents92 and, as noted above,93 serve a key evidential function in third parties’ ability to ascertain the existence and scope of an attorney’s authority, it is less common

for ostensible authority broader than actual authority to surface as regards powers of attorney than in the case of agency generally. It follows that the potential applicability of the doctrine of ostensible authority in the context of powers of attorney is perhaps not as compelling a reason to query the distinction between general and special powers as it may first appear. Moreover, a distinction grounded in the scope of an attorney’s authority — in the one category apparently no limits on that authority (general power) and in the other limits on the authority specified by the power itself (special power) — appears to serve little more than a descriptive role. It suggests that any limitation on the scope of an attorney’s authority serves to mark a power as a special power, even if that limitation is minimal. In consequence, the upshot of the classification seems driven by an attempt to attribute terminology instead of a classification of legal concepts that differ in nature or substance. 1.22 The distinction also loses force because, notwithstanding what appears to be plenary authority vested in an attorney under a general power, restrictions apply to [page 15] that authority as a matter of law. Most significantly, powers of attorney operate against a fiduciary backdrop94 — except to the extent that the fiduciary proscriptions are expressly qualified by the terms of the power — and so even an ostensibly unbounded power is in truth one subject to controls. Otherwise a general power of attorney, for instance, would authorise the transfer of all the principal’s property to the attorney (or someone else) at the discretion (or whim) of the attorney. In this event the power of attorney would effectively traverse into the realm of property, as does, say, a general power of appointment.95 1.23 The general law further restricts the potential authority of an attorney, despite the terms of the power, by restricting the extent to which principals can delegate authority to others in respect of matters personal to the principal.96 Statute has intervened in this regard; it recognises the ability of a principal to delegate aspects of personal decision-making, for instance,

relating to health or medical treatment, but generally sets parameters to the scope of delegation.97 The upshot is that, whether at general law or under statute, there is arguably no true ‘general’, unbounded, power of attorney.

According to what triggers the power — ‘springing’ and ‘enduring’ powers ‘Springing’ powers 1.24 An alternative means of classifying powers of attorney is by reference to the event(s) that trigger their operation. It is common for a power of attorney to vest authority in the attorney from the moment its formalities are fulfilled,98 sometimes also including registration of the power.99 However, as is the case with contracts and trusts, for instance, there is nothing at general law to prevent a principal delaying the conferral of authority in the attorney until the happening of a certain event or condition. Making this distinction, at least at general law, is less common in Australia and the United Kingdom than it is in North America. Both Canadian and United States courts, in this regard, make reference to what they term a ‘springing’ power of attorney. In Canada it is because, in some provinces, the term ‘springing’ is adopted in the relevant legislation. For example, a Canadian appellate judge remarked that the term ‘springing’ refers to a power of attorney that enables an attorney to act upon the satisfaction of a condition,100 citing as an illustration the power of attorney that ‘springs’ upon the principal’s absence abroad.101 And a leading American law dictionary defines a springing power of attorney as one ‘that becomes effective only when needed, at some future date or upon some future occurrence’.102 This definition [page 16] highlights that it is possible that the authority of an attorney under a springing power may never be triggered, as it may depend on an event or condition that may never materialise.

‘Enduring’ powers 1.25 The general law, however, does not countenance the ability of a principal to prescribe, as the triggering event for a springing power of attorney, his or her mental incapacity. Imprisoned within the agency law principle that an agency is revoked by the principal’s incapacity103 — the logic being that an agent’s authority cannot exceed that of his or her principal, so that if the principal loses mental capacity the agent’s authority ceases — the courts found no leeway to except powers of attorney from it.104 This was notwithstanding the great potential usefulness of powers of attorney in the event of a principal’s incapacity, giving effect to the principal’s expressed wishes at a time of mental capacity105 (thus enhancing the principal’s autonomy), and avoiding the time, cost, stigma and otherwise discommoding effect of an application for guardianship (or the like), in which the principal is often no more than a passive participant. In any case, anecdotal evidence suggested that many principals (and attorneys) believed that powers of attorney could survive incapacity, and many attorneys continued to exercise authority once incapacity of the principal had taken hold.106 1.26 Driven by the above considerations, amongst others, statute has intervened in each Australian jurisdiction, and in the main common law jurisdictions generally, to recognise the validity of a power of attorney the operation of which is triggered by or survives the principal’s incapacity. In so doing, it has been remarked that:107 … legislators adopted a dramatic policy shift away from the pre-existing paternalistic regime that had existed for centuries and was heavily dependent on the court in its protective jurisdiction, to one where citizens would be facilitated in making their own arrangements … With the move to a regime more in keeping with modern philosophies of autonomy and selfdetermination, the responsibility for making the choice of substitute decision-maker in the event of loss of capacity has shifted from the court to the individual citizen …

The historical backdrop against which these powers received statutory force is discussed at the conclusion of this chapter.108 In Australia, statute terms these powers ‘enduring powers of attorney’ (with the exception of the Northern Territory, as from 17 March 2014, when enduring powers of attorney fall within the broader concept of

[page 17] an ‘advance personal plan’),109 as they endure the incapacity of the principal. In the United States the common terminology adopted to refer to the same concept is the ‘durable power of attorney’. And in its latest iteration, the English legislation uses the phrase ‘lasting power of attorney’. Whatever the terminology, the widespread use of these types of powers effectively ‘privatises’ an aspect of guardianship.110 1.27 To the extent that the power is triggered by incapacity of the principal but not before, it is more accurately described not as an ‘enduring’ or ‘durable’ power — which terms suggest a continuation of an existing position — but as a ‘springing’ power in the sense noted above. The point has not gone unnoticed by the courts.111 And like a springing power there is no guarantee that the triggering event will occur. Indeed, as springing powers are often created in the expectation that a triggering event may (or will) transpire, that future mental incapacity cannot be assumed dictates that whether or not an enduring power will take effect is, in the usual case,112 tinged with greater uncertainty than the non-enduring springing power. The terms ‘enduring’ or ‘durable’ are arguably more apt to refer to powers of attorney that confer authority prior to incapacity, but which authority survives, that is, endures (in the same or different form) the principal’s incapacity. In each jurisdiction statute makes provision for an enduring power of attorney (or equivalent) to operate in this fashion,113 which explains why the term ‘enduring’ (or ‘durable’) is adopted almost uniformly in legislation, and has accordingly become part of the vernacular in this field.

Establishing the occurrence of the triggering event 1.28 As a matter of principle, where a legal document, with legal consequences, is intended to take effect at a future time, there is a need for sufficient certainty in the identification of the event that triggers those consequences. The legal effect of testamentary documents, for example, is ordinarily premised on the death of the testator, an event that is ordinarily easy to establish with certainty. The same requirement applies to springing powers. In the common scenario of a power of attorney triggered by the

principal’s absence from the jurisdiction, for instance, the triggering event can be established by objective evidence, and thus with certainty. 1.29 It is more challenging, however, to determine with the same degree of certainty the triggering event tied to mental incapacity. This is because ‘the commencement of mental infirmity may be difficult to isolate in many cases, and indeed mental [page 18] infirmity may come and go’.114 There is accordingly a need for a yielding approach, or a procedure to ascertain legal incapacity, if typical enduring powers of attorney are to meet the requisite certainty.115

According to revocability — ‘revocable’ vs ‘irrevocable’ powers At general law 1.30 The concept of an ‘irrevocable power of attorney’ derives from the agency law notion of an ‘irrevocable authority’. Agency law dictates that if an authority conferred on an agent is irrevocable, it cannot be revoked by the principal — without the principal suffering liability for doing so — except with the agent’s consent. Nor is an irrevocable authority terminated at common law by the principal’s death,116 insanity or insolvency.117 Also, subject to any contractual provision to the contrary,118 as between principal and attorney an irrevocable power gives the attorney the power to act within the terms of the authority conferred independently of, and even contrary to, the directions of the principal.119 Thus it has been observed that this kind of power of attorney is not an ‘agency’ as that term is commonly understood.120 By its very nature, an irrevocable power of attorney is, it is said, ‘very different’ from a revocable power of attorney, so that, even though an irrevocable power constitutes the attorney as the principal’s agent, it ‘does not fasten upon the [attorney] the usual fiduciary obligations of an agent’.121 1.31

As a grant of authority, whether in the general agency or in the

specific power of attorney scenario, is ordinarily presumed in its nature to be revocable,122 the general law adopts a strict approach to construing an authority or power as irrevocable. The mere fact that a power or authority is expressed to be irrevocable is insufficient; the law requires that it be ‘coupled with an interest’ to have that effect.123 At a basic level, [page 19] this means that the power ‘accompanies, or is connected with, an interest’, wherein ‘[t] he power and the interest are united in the same person’.124 The power here is created for the benefit of the attorney so as to ‘protect some title or right in the subject of the [attorneyship] or secure some performance to him’.125 In the words of an English judge in the mid-nineteenth century, a power or authority is ‘coupled with an interest’ if it is an agreement ‘entered into on a sufficient consideration, whereby an authority is given for the purpose of securing some benefit to the donee of the authority’.126 For example, if a person (P) owes to another (A) money, and in order to discharge the debt P executes in A’s favour an authority to sell land owned by P, that authority cannot be revoked by P because it is coupled with an interest, being the payment of the debt.127 What brings the authority to an end, aside from agreement between attorney and principal, is that the benefit intended to be secured by the authority is satisfied.128 A leading case is Re Harmon’s Empress Gold Mining and Development Co (‘Carmichael’s case’),129 where an authority by C to P to apply for 1000 shares in a company promoted by P read: I further agree that this agreement and my said application shall be irrevocable on my part, and shall, notwithstanding any withdrawal on my part or any repudiation of my responsibility hereunder or thereunder, be sufficient to authorise or empower the directors of the company to allot to me the before-mentioned shares, and to enter my name on the register of members in respect thereof.

C purported to repudiate the agreement after the company was formed. P nonetheless applied for the shares on C’s behalf, and C was placed on the register. The English Court of Appeal held that C could not revoke the authority conferred on P because it was an authority coupled with an interest — its object was to enable P to obtain his purchase money, and therefore to confer a benefit on P as donee of the authority.130

By contrast, where the grant of a power is not expressed to be irrevocable, and can legitimately be explained for reasons other than securing an entitlement in the attorney to recover moneys due from the principal, there is no basis for finding the power to be irrevocable. In Despot v RegistrarGeneral (NSW),131 as part of a contractual arrangement whereby the appellant home owner (D) engaged a building company (S) to carry out renovations, D executed a power of attorney in favour of S’s principal (M). The New South Wales Court of Appeal refused to view the power as irrevocable for three reasons: it was not expressed to be irrevocable; D granted to S separate security to secure moneys owed for the renovations, to which the power of attorney made no reference; and the evidence revealed that, as D would likely be overseas for periods of time, the power could have been granted to enable M to do [page 20] that necessary on D’s behalf so as to lawfully commence and complete the renovations during D’s absence.132 1.32 The general principles in this regard were encapsulted by Addy J in Wilkinson v Young, a case involving powers of attorney, in the following terms:133 Where an agency is created, either for valuable consideration or by deed, and the purpose of the agency is to secure an interest of the agent, the authority cannot normally be revoked, ie, where the authority is coupled with an interest, the authority is generally irrevocable … Similarly, where a power of attorney is given to a purchaser for value and is expressed to be irrevocable, the authority is not revocable nor is it revoked by the death or disability of the donor. However, in all cases where the agency is gratuitously created and is created merely for the benefit of the principal, it terminates at law with the latter’s death or mental incompetency.

In Wilkinson the principal gave two powers of attorney, the second expressly revoking the first. The attorney under the first power alleged mental incompetence of the principal at the time of giving the second power, and the issue arose whether or not the principal’s insanity automatically revoked the first power in any event. On the facts there was no suggestion that the attorney under either power gave valuable consideration, was an agent with any personal interest in the title to the property or in the subject matter of the power, or was a purchaser for value from the donor. It followed that the

general law as to revocability applied, namely that ‘the mental incompetency of the donor revokes the power, in so far as the donee is concerned, even though the power might be expressed to be irrevocable’.134 What an irrevocability clause does in this context is to protect third parties dealing with the attorney; it does not add to the attorney’s rights.135 1.33 Merely because a principal engages an attorney for pecuniary reward in the shape of a fixed salary — clearly a benefit to the attorney — does not make the power irrevocable.136 Nor does the fact that an attorney makes advances to the principal give the attorney an irrevocable authority to sell in his or her own discretion for the purpose of self-reimbursement, unless the advances are made on the security of the goods in question.137 It is essential that the attorney’s interest arise collaterally to the agency, and that the interest in question benefits the attorney over and above his or her right to payment.138 [page 21]

Under statute 1.34 Statutory provision is made in respect of irrevocable powers of attorney given for value other than in the Australian Capital Territory and South Australia. The latter jurisdiction relies on the common law, whereas the former has taken the radical step of banning irrevocable powers of attorney, stating that a power may be revoked ‘whether or not the power states otherwise’.139 In New South Wales, Tasmania and Western Australia the relevant legislation provides that a power of attorney given for valuable consideration that is in the instrument creating the power expressed to be irrevocable cannot, in favour of a purchaser, be revoked by the principal without the attorney’s concurrence, nor is it revoked by the principal’s death, mental incapacity or insolvency.140 If the power of attorney meets these statutory requirements, for the purposes of the statute it is irrevocable, whether or not it meets the common law requirement of being coupled with an interest.141 The Tasmanian and Western Australian statutes prescribe the same outcome in the

case of a power of attorney expressed to be irrevocable for a fixed period (up to a maximum period).142 The Northern Territory, Queensland and Victorian legislation, being more closely aligned to the common law, is expressed to apply to powers of attorney given as security. It states that a power of attorney granted to secure a proprietary interest of the attorney, or the performance of an obligation owed to the attorney, that is expressed to be irrevocable cannot be revoked by the principal without the attorney’s consent, and is not revoked by the principal’s death, legal incapacity or insolvency, while the attorney has that proprietary interest or while that obligation remains undischarged.143

Powers of attorney regulated under statute 1.35 In all Australian jurisdictions there is legislation directed to powers of attorney. Other than in Victoria and Western Australia, each jurisdiction has passed an Act dedicated to this topic. In Victoria the relevant provisions are currently found within an Act dealing with instruments generally (although, pursuant to law reform recommendations,144 a dedicated Powers of Attorney Act 2014 has been enacted and is awaiting commencement) and in Western Australia they are scattered across multiple Acts. The relevant legislation in the Australian Capital Territory, New South Wales, Queensland and Tasmania has been renewed since 1998, and in Victoria major amendments took effect in 2003.145 Substantial amendments to the New South Wales (2003) and Tasmanian (2000) Acts were effected in 2013, the same year in which the Northern Territory Parliament passed the Advance Personal Planning Act 2013. [page 22] The latter, as from 17 March 2014, replaces the enduring power of attorney with a more encompassing concept — an ‘advance personal plan’.146 Due to the statutory infiltration into the general law of powers of attorney,

it is necessary to be familiar with the terminology adopted by the relevant statutes as well as to ascertain the relationship between the general law and statutory provisions. These two inquiries overlap in some ways, but the latter in particular must be viewed against the backdrop of the principle of statutory interpretation that statute is not presumed to alter or oust the general law unless it does so expressly or by necessary implication.147 There is no identity, albeit some similarities, between jurisdictions so far as statute is concerned. Accordingly, there is a need to address each jurisdiction separately or otherwise risk misleading generalisations. 1.36 What can be said in general overview is that each jurisdiction makes specific provision for enduring powers of attorney (in the Northern Territory, as from 17 March 2014, under the broader concept of an ‘advance personal plan’). After all, the general law, as noted earlier,148 did not recognise the validity of powers of attorney having effect subsequent to a principal’s mental incapacity. Enduring powers thus represent entirely a creature of statute. The detail of statutory regulation of enduring powers nonetheless varies between jurisdictions. The most substantial variation appears in the territories and Queensland, where the availability of enduring powers (in the Northern Territory, ‘advance personal plans’) extends to the making of personal, health or medical related decisions for an incapacitated principal.149 The same is envisaged in Victoria upon the commencement of the Powers of Attorney Act 2014.150 The logic is that the advantages of enduring powers apply as much to personal and health related decision-making as to the management of money and property, raising ‘a strong argument for combining management and guardianship roles in the same person when that person is a spouse or close relative’.151 In remaining jurisdictions equivalent provision exists within the more traditional route of guardianship and/or via other vehicles, including donor-controlled advance health directives (sometimes called ‘living wills’) and independent body consent to medical treatment.152 Each jurisdiction also makes statutory provision regulating, to varying extents, the general law applicable to powers of attorney (that is, the law applicable to non-enduring powers).

Australian Capital Territory

1.37 Aligned with the general law, the Powers of Attorney Act 2006 (ACT) defines an ‘attorney’ as a person who is authorised under a power of attorney to make decisions and do particular other things for the person (the ‘principal’) who made the power.153 The Act defines a ‘power of attorney’ to mean a ‘general power of attorney’ or an [page 23] ‘enduring power of attorney’.154 A ‘general power of attorney’ is defined as a power of attorney under the Act that operates only while the principal has decision-making capacity.155 1.38 An ‘enduring power of attorney’ is distinguished from a ‘general power of attorney’ under the Act for being a power of attorney that is not revoked by the principal becoming a person with impaired decision-making capacity.156 The Act envisages, moreover, that a principal may, via an enduring power of attorney, appoint an attorney to do anything in relation to one or more ‘property matters’,157 ‘personal care matters’158 or ‘health care matters’159 that the principal could lawfully do by an attorney if the principal had decision-making capacity for the matter when the power to do the thing is exercised.160 Provision is also made for a hybrid-type power — namely an enduring power of attorney operative while the principal has decision-making capacity — in which case the Act declares that, while the principal retains that capacity, the power operates as a general power of attorney in relation to property matters.161 Because the Act takes the enduring power of attorney beyond its traditional financial focus, there is potential for overlap with the concept of guardianship, which is the subject of separate legislation under the Guardianship and Management of Property Act 1991 (ACT). Accordingly, the latter empowers the ACT Civil and Administrative Tribunal to make various orders against an attorney under an enduring power, including the revocation of that power.162 [page 24]

1.39 The Australian Capital Territory legislation contains no provision explicitly directed at its interaction with the general law. It follows that the general law continues to apply in the Territory, at least to the extent that it can coexist consistently with the Act. This seems clear from Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd,163 although whether Nicholas J’s more specific conclusion directed at ‘special powers of attorney’ falling outside the Act necessarily follows, may be queried. His Honour reasoned, as to the latter point, that because the precursor to the 2006 Act — the Powers of Attorney Act 1956 (ACT) — was limited in its application to ‘general powers’ and ‘enduring powers’, and made no specific reference to ‘special powers’ of attorney, its terms arguably did not apply to special powers. ‘[T]he words of the Act when read as a whole show the legislative intention to be that it applies only to a general power of attorney or an enduring power of attorney’, his Honour remarked, noting that the Act’s definition of ‘power of attorney’164 was confined to such instruments ‘and makes no reference to a special power of attorney’.165 Supporting this conclusion were the statutory forms for general powers and enduring powers,166 which were ‘substantially different to special powers of attorney by which authority is restricted to the doing of specified things, or classes of things’.167 Fortifying his Honour’s view was that the distinction between general and special agents, and thus general and special powers of attorney,168 had long been recognised at general law. So by omitting reference to special powers of attorney the statute could not have been intended to impact on the general law in this regard. It meant that the consequences of non-registration set by the 1956 Act — that a conveyance or deed executed under the power of attorney had no effect169 — did not, according to Nicholas J, apply to special powers.170 1.40 The point is only of significance to the extent that statute makes alternative provision to, as opposed to replicates, the general law. That the 2006 Act, like its predecessor, refers only to ‘general powers’ and ‘enduring powers’, and not to ‘special powers’, means that there may be grounds to conclude that the reasoning of Nicholas J in Sydney Concrete ought to apply with equal force to the current legislation. It is interesting to note, though, that the current statute prescribes no consequences for non-registration,171 and to this end the specific point in issue in Sydney Concrete will not arise

under the 2006 Act. Nor does that Act contain any standard forms for powers of attorney, and so that aspect of his Honour’s reasoning cannot translate. More fundamentally, it may be pondered whether the ‘general power’ terminology is, in the statutory context, used simply to distinguish that power from an ‘enduring power’ of attorney rather than from a ‘special power’. That the 2006 Act recognises ‘interstate general powers of attorney’, which it defines broadly as a ‘power of attorney made under the law of a State or another Territory … that … is not expressed to [page 25] operate when the principal has impaired decision-making capacity’,172 distinguished from ‘interstate enduring powers of attorney’, is an indication in this direction.173 Also, as enduring powers of attorney are derived solely from statute, there is a need to distinguish these from the form of power of attorney accepted and understood outside of statute. And purely as a matter of logic, it may be queried why legislatures would include general powers within the statutory overlay at the expense of special powers, when the dividing line between them is no more than one of degree, and possibly minute in degree. Hence the reference, noted earlier in this chapter,174 to the judicial view that this dividing line generates ‘a distinction without a difference’.175

New South Wales 1.41 The Powers of Attorney Act 2003 (NSW) defines an ‘attorney’, in relation to a power of attorney, as a person to whom the power is given, and defines a ‘principal’, in relation to a power of attorney, as the person giving the power.176 It does not, however, contain a dedicated definition of a ‘power of attorney’. It instead adopts the terminology ‘prescribed power of attorney’ and, consistent with the statutory practice, ‘enduring power of attorney’. An instrument that is in or to the effect of the form prescribed by the regulations — in which is found two forms, a ‘General Power of Attorney’ and an ‘Enduring Power of Attorney’ — and is duly executed creates a ‘prescribed power of attorney’ for the purposes of the Act.177 There is no

necessary identity between a ‘prescribed power of attorney’ and a ‘general power’ at law, because the Act makes clear that a prescribed power ‘has effect subject to compliance with any conditions or limitations specified in the instrument creating the power’.178 It follows that the New South Wales legislation encompasses what would at general law be described as a ‘special power’, notwithstanding that the prescribed form is headed ‘General Power of Attorney’. The reasoning of Nicholas J in Sydney Concrete as regards the Australian Capital Territory statute179 therefore has no application to the current (or, for that matter, former)180 New South Wales statutory schema. [page 26] 1.42 In New South Wales the concept of an ‘enduring power of attorney’ comes within that of a ‘prescribed power of attorney’. Under the Act, an instrument that creates a power of attorney creates an ‘enduring power of attorney’ if, inter alia, ‘the instrument is expressed to be given with the intention that it will continue to be effective even if the principal lacks capacity through loss of mental capacity after execution of the instrument’.181 Unlike its Australian Capital Territory equivalent,182 the Powers of Attorney Act 2003 (NSW) does not envisage the use of a power of attorney to authorise an attorney to make health or lifestyle decisions on a principal’s behalf. Decisions of this kind are reserved to an ‘enduring guardian’ appointed under the Guardianship Act 1987 (NSW) Pt 2. 1.43 Any doubt regarding the relationship between the 2003 Act and the general law is addressed by the Act, which states that the Act ‘does not affect the operation of any principle or rule of the common law or equity in relation to powers of attorney except to the extent that this Act provides otherwise, whether expressly or by necessary intention’.183 This, in effect, represents what would have been assumed to have been the case, as a matter of statutory interpretation, absent such a provision.

Northern Territory 1.44 The Powers of Attorney Act 1980 (NT) does not define the concept of ‘power of attorney’, or even its main actors, the ‘principal’ and the ‘attorney’.

It follows that these terms take their meaning at general law.184 The Act serves to specify the requirements for the creation of powers of attorney,185 as well as the manner and effect of revocation of those powers.186 Its provision for the creation of enduring powers of attorney,187 however, only has application for powers created by an instrument executed before 17 March 2014, being the commencement of the Advance Personal Planning Act 2013 (NT).188 The latter addressed the statutory absence of an avenue to facilitate competent persons making future binding decisions about their health, or to appoint substitute decision-makers of their own choice should they lose decision-making capacity in the future.189 To this end, the 2013 Act allows an adult with the requisite capacity190 to make an ‘advance personal plan’ that:191 targets consent decisions about future health care action for him or her (‘advance consent decisions’); [page 27] sets out his or her views, wishes and beliefs as the basis on which he or she wants anyone to act if they make decisions for him or her (‘advance care statements’); and/or appoint one or more persons (‘decision-makers’) to make decisions should he or she lose decision-making capacity. In providing that decisions mentioned in the two last dot points may be ‘about all or any aspect of the adult’s care and welfare (including health care) and property and financial affairs’,192 it is evident that the Act brings within an advance personal plan that which could previously have been effected via an enduring power of attorney. Consistent with the concept of an enduring power, the Act makes explicit that ‘the decision-maker may exercise that authority only when the represented adult has impaired decision-making capacity for the matter’.193 The concept of an ‘advance personal plan’ is broader than the (former) enduring power in its extension to non-financial matters. A decision-maker may be appointed for one or more, or all, matters relating to the adult’s care or welfare (including health care), or property or

financial affairs,194 but if it fails to identify the matter(s) to which the appointment applies, the decision-maker is appointed for all matters.195 1.45 While statute now therefore provides for the private appointment of a decision-maker for health or lifestyle matters, it cannot be assumed that all adults will avail themselves of this avenue. There accordingly remains scope for applications to the Local Court for a guardianship order,196 which can vest ‘all the powers and duties which the guardian would have if he or she were a parent and the represented person his or her infant child’.197 Any authority so conferred is subject to Pt 4 of the Advance Personal Planning Act 2013 (NT), which regulates ‘advance consent decisions’.198 Statute, in any case, places restrictions on guardianship orders vis-à-vis a person who has made an advance personal plan,199 and addresses the consequences should the court make a guardianship order ignorant of a pre-existing advance personal plan.200

Queensland 1.46 The Powers of Attorney Act 1998 (Qld) defines an attorney as ‘a person who is authorised to make particular decisions and do particular other things for another person (the principal)’.201 The ‘principal’ is the person who appointed the attorney.202 The Act does not define a ‘power of attorney’, but states that principals may authorise attorneys by general powers of attorney, enduring powers of attorney or advance health directives, or by powers of attorney under the common law.203 Several points stem from this, each noted below. [page 28] 1.47 First, the Act envisages the validity of powers of attorney created outside of its parameters, that is, at common law. It therefore does not purport to oust the common law to this end, and actually gives stronger support to the distinction adopted by Nicholas J in Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd,204 discussed earlier,205 than does the present Australian Capital Territory legislation. But the Queensland Act does extend the court’s powers under the Act206 to powers of attorney made other

than under the Act, even to those made before its commencement.207 Also, various provisions of the Act are expressed to apply to powers of attorney at common law. 1.48 Second, like its counterparts elsewhere, the Queensland Act recognises enduring powers of attorney. Where it goes further than, say, its New South Wales equivalent, is in a broader coverage of what it terms an ‘enduring document’, a term that encompasses not only enduring powers of attorney but also advance health directives. By an ‘enduring power’, the Act envisages that a principal may authorise one or more attorneys to do anything in relation to one or more financial matters208 or personal matters209 (which includes health matters210 but not special health matters211 or special personal matters)212 that the principal could lawfully do by an attorney if the principal had capacity for the matter when the power is exercised.213 An ‘advance health directive’ is a document containing directions for a principal’s future health care, and may authorise an attorney to do particular things for the principal in relation to that care.214 Those things include giving directions about health matters and special health matters, and appointing one or more attorneys to exercise power for a health matter in the event the directions prove inadequate.215 A direction in an advance [page 29] health directive has priority over a general or specific power for health matters given to any attorney.216 1.49 Third, because the Powers of Attorney Act 1998 makes provision for attorneys in the context of personal and health matters, there is a need to read its provisions in conjunction with those in the Guardianship and Administration Act 2000 (Qld).217 The latter provides a scheme by which, inter alia, the Queensland Civil and Administrative Tribunal may appoint a guardian for an adult with impaired capacity for personal matters or an administrator for an adult with impaired capacity for financial matters, and may consent to the withholding or withdrawal of a life-sustaining measure and to particular special health care. It also provides a scheme for health care and special health care for adults with impaired capacity for the matter concerned. If there is an inconsistency between the 1998 Act and the 2000

Act, the latter prevails.218 And if a person is appointed as guardian or administrator, an attorney under the 1998 Act may exercise power only to the extent authorised by the tribunal.219

South Australia 1.50 Statute in South Australia does not define a ‘power of attorney’ or its main actors, the ‘attorney’ and the ‘principal’. These terms, therefore, take their meaning at general law.220 The Powers of Attorney and Agency Act 1984 (SA) does distinguish a ‘general power of attorney’ from an ‘enduring power of attorney’. It envisages the creation of a general power of attorney in the prescribed form,221 or in a form to the same effect provided that it is expressed to have been made in pursuance of the statutory requirement.222 There is no statutory intention, by the use of the term ‘general power’, to distinguish this from a ‘special power’; the Act makes clear that the authority conferred by a general power ‘may be expressed to be subject to specified conditions, limitations or exclusions’.223 The Act therefore applies to all nonenduring powers but operates against the backdrop of the common law except to the extent that the Act is inconsistent with the common law. 1.51 Like its counterparts elsewhere, the South Australian statute makes provision for the creation of ‘enduring powers of attorney’. Though the concept is not defined, that a means whereby it may be created is ‘by deed … indicating an intention that the authority conferred is to be exercised: (i) notwithstanding the donor’s subsequent legal incapacity; or (ii) in the event of the donor’s subsequent legal incapacity’224 reveals that it is no different in substance to that commonly understood. That the Advance Care Directives Act 2013 (SA) empowers a person to make decisions about his or her future health care, residential and accommodation arrangements and personal affairs, including through one or more substitute decision[page 30] makers, shows that authority to make these types of decisions falls outside the scope of enduring powers under the 1984 Act.225 That the two Acts

inhabit separate domains is evident from provision in the 2013 Act that nothing in it authorises an advance care directive to give a power of attorney, and declares void a provision of an advance care directive that purports to do so.226 Provision under the Guardianship and Administration Act 1993 (SA) for the Guardianship Board to appoint a guardian who exercises lifestyle and health-related powers227 likewise falls outside the domain of enduring powers.

Tasmania 1.52 The Powers of Attorney Act 2000 (Tas) does not define ‘power of attorney’. It simply defines an ‘attorney’ as a person to whom a power of attorney is given.228 Accordingly, the ordinary meaning of ‘power of attorney’ applies,229 which draws support from the wording of the prescribed statutory forms.230 That there are forms for what are described as a ‘general power of attorney’ and a ‘particular power of attorney’ (which is synonymous with a ‘special power of attorney’) suggests that the Act is intended to apply to all powers of attorney.231 Yet as the Act does not purport to oust the general law, the latter operates except to the extent of any inconsistency with the terms of the Act. 1.53 Part 4 of the Tasmanian legislation makes provision for enduring powers of attorney. It marks a power of attorney as an ‘enduring power of attorney’ if, inter alia, ‘it is created by deed containing words indicating an intention that the authority conferred is to be exercisable notwithstanding the donor’s subsequent mental incapacity or in the event of the donor’s subsequent mental incapacity’.232 Via its prescribed forms the Act envisages either a ‘general enduring power’ or a ‘particular enduring power’. It adds that, except as provided by Pt 4, nothing in that Part is taken to derogate from the law relating to powers of attorney.233 As a result, the general law continues to apply to the extent that it is not inconsistent with Pt 4. That the Guardianship and Administration Act 1995 (Tas) makes provision for both a donor-appointed enduring guardian234 and the external appointment of a guardian235 empowered to make lifestyle and (some) health-related decisions on behalf of a person, and also contains a procedure for securing consent to certain medical and dental treatment,236 indicates that an attorney’s authority under the Powers of

[page 31] Attorney Act 2000 cannot extend to these forms of decision-making. The primarily financial focus of enduring powers of attorney is reiterated by the fact that it is not competent for the Guardianship and Administration Board to make an administration order — which likewise has a financial focus — in respect of the estate of a person who has granted an enduring power of attorney.237

Victoria 1.54 Pending the commencement of the Powers of Attorney Act 2014, in Victoria the Instruments Act 1958 Pt XI is dedicated to powers of attorney. It does not purport to define the term, but defines an ‘attorney’ as a person appointed attorney under the power of attorney.238 Accordingly, the ordinary definition of ‘power of attorney’239 applies in Victoria. Although the Act prescribes a standard form for a ‘general power of attorney’,240 that its relevant provisions are otherwise phrased by reference to ‘powers of attorney’ rather than ‘general powers of attorney’ indicates that the Act is intended to apply to all powers of attorney.241 Yet, like in Tasmania, the Act does not purport to oust the general law, meaning that the latter operates except to the extent of any inconsistency with the terms of the Act. 1.55 Once the 2014 Act commences, the relevant parallel terminology is the ‘general non-enduring power of attorney’.242 This is distinguished from the ‘enduring power of attorney’, to which the Act devotes discrete regulation,243 which is presently the subject of Part XIA of the 1958 Act. The latter states that, by an enduring power of attorney, a person (‘donor’) may authorise one or more persons (‘attorneys’) to do anything on behalf of the donor that the donor can lawfully authorise an attorney to do, and to provide conditions and limitations on, and instructions about, the exercise of the power.244 Unless the terms of the power state otherwise, the Act decrees that an enduring power is exercisable once the power is made;245 there is no need to await the mental incapacity of the donor. The 1958 Act makes explicit that an enduring power of attorney does not authorise the attorney to make a decision about the medical treatment of the

donor.246 Provision for the creation of an enduring power of attorney (medical treatment) is instead made pursuant to the Medical Treatment Act 1988 (Vic).247 A procedure for the giving of consent to medical (and dental) treatment is prescribed under the Guardianship and Administration Act 1986 (Vic).248 To the extent that a decision made by a guardian under that Act — who may have authority to make lifestyle and (some) health-related decisions — in the exercise of his or her power conflicts with a decision of an attorney under an enduring power of attorney, the decision of the [page 32] guardian prevails.249 The relevant provisions of the 1986 Act will be repealed once the Powers of Attorney Act 2014 (Vic) takes effect,250 which extends the potential coverage of enduring powers of attorney under its auspices to ‘personal matters’.251 The latter are defined to include ‘health matters’, which include the lifestyle and health-related decisions noted above under the 1986 Act.252 The 2014 Act also introduces a new concept — the ‘supportive attorney’ — which, in an Australian legislative first, establishes a vehicle to facilitate (some) persons with a degree of mental incapacity to make their own decisions.253 The role of the supportive attorney is to assist more so than outright make decisions for the supported person. Unlike the position in Tasmania, if the Victorian Civil and Administrative Tribunal makes an administration order254 — which as in Tasmania is financially-focused — in respect of the person who is the donor of an enduring power of attorney, the attorney can only exercise power under the enduring power to the extent authorised by the tribunal.255

Western Australia 1.56 Western Australia has no dedicated powers of attorney statute. So far as non-enduring powers of attorney are concerned, relevant statutory provisions are located in the Property Law Act 1969 (WA) Pt VIII. These contain no definition of a ‘power of attorney’, and identify the parties to a power as the ‘donor’ and ‘donee’, whilst defining neither. The general law

thus gives meaning to these concepts,256 and continues to apply except to the extent that it cannot operate consistently with the terms of the Act. 1.57 In a unique approach to statutory taxonomy within Australia, enduring powers of attorney are given force through the Guardianship and Administration Act 1990 (WA).257 Again, though, there is no explicit statutory definition of an ‘enduring power of attorney’, but the standard form supplied highlights the basic element common to enduring powers as ordinarily understood, that is, the power ‘will continue in force notwithstanding [the principal’s] subsequent legal incapacity’.258 This suggests that the standard form does not premise the operation of a power on the triggering event of a principal’s mental incapacity. That the 1990 Act makes provision for guardianship orders, which focus on lifestyle and most health-related decisions,259 and (in provisions yet to enter into force) for persons to effect ‘advance health directives’ containing decisions in respect of their future medical, dental or other health treatment,260 indicates that these are matters that fall outside the authority able to be conferred under an enduring power of attorney. The latter focuses on financial or property related decision-making, a [page 33] point highlighted by provision for the State Administrative Tribunal to revoke or vary an enduring power where it makes an administration order — which likewise has a financial focus — in respect of the estate of the donor of an enduring power of attorney.261

Historical backdrop to enduring powers of attorney legislation 1.58 Though very common in the legal landscape today, the enduring power of attorney has been a relatively recent statutory innovation.262 Against a backdrop of multiple law reform bodies recommending the statutory recognition of enduring powers, parliaments in the main common

law jurisdictions have responded. Generally speaking, these responses have been similar in broad substance, but often divergent in detail. Some brief observations regarding the path to enduring powers of attorney legislation in the United States, England, Australia, Canada and New Zealand appear below.

United States 1.59 The validity of enduring powers of attorney (in the United States, commonly termed ‘durable powers’) was first recognised in the common law world, it appears, in the American State of Virginia, by statute enacted in the 1950s. In 1964 came a model durable power (albeit limited to small property interests)263 promulgated by the National Conference of Commissioners on Uniform State Laws. The Commissioners relied on this in 1969 in recommending the creation of durable powers as part of the Uniform Probate Code, which for the first time served to truly pique interest in the durable power. A decade later saw the Commissioners approve a separate Uniform Durable Power of Attorney Act, since amended on multiple occasions. The above initiatives saw widespread fruition, so that by 1984 all American states had enacted legislation legitimising durable powers of attorney. These initiatives have nonetheless failed to generate complete uniformity.264 The year 2006 saw the promulgation of the Uniform Power of Attorney Act.265 Evidence of abuse of authority by attorneys under durable powers266 led the 2006 Act to, inter alia, impose stricter requirements on the creation of durable powers, define default and mandatory duties owed by attorneys to their principals, and make provision for judicial review of attorneys’ conduct. To date the Act has seen implementation in 16 states.267 [page 34]

United Kingdom 1.60 In England the statutory impetus stemmed from the recommendation of the Law Commission in a 1983 report.268 It prompted the Enduring Powers of Attorney Act 1985 (UK), its main purpose being to allow the grant of a

power that would survive subsequent mental incapacity. As explained by an English judge, it ‘was intended to provide an inexpensive method by which a person could confer power to manage his affairs upon a person of his own choice which would remain effective notwithstanding any change in his mental capacity’.269 In other words, by breaking free of the shackles of agency law in this regard, the Act gave recognition to the principle of personal autonomy, particularly for the elderly, giving to individuals a power the law previously denied them. Not only did it foster personal autonomy, it reduced costs, obviating ‘the expense and … in the minds of some … the embarrassment of invoking the full jurisdiction of the Court of Protection’.270 English judges described the 1985 Act as ‘an important innovation’,271 a ‘new mechanism’272 heralding ‘a very remarkable change in the law’.273 The Act made detailed provision for the registration of enduring powers and required attorneys to notify the principal’s relatives of the intention to register.274 The relatives, in turn, were granted standing to object to the registration on any one of five specified grounds, including that the attorney was unsuitable.275 1.61 In 1995 the Law Commission released a second report on mental incapacity.276 One of its recommendations was to integrate the provisions for enduring powers of attorney into a ‘unified scheme’ for ‘substitute decisionmaking procedures’, including a ‘continuing power of attorney’.277 The latter would extend to ‘personal welfare decisions’, as well as the questions of ‘property and affairs’ that were the subject matter of enduring powers under the 1985 Act. It took longer on this occasion to see statutory fruition but, with effect from 1 October 2007,278 the Mental Capacity Act 2005 (UK) replaced the enduring power of attorney with what it termed a ‘lasting power of attorney’.279 Under the latter a principal may vest in the attorney(s) authority to make decisions about his or her personal welfare and/or his or her property and affairs — although there are separate prescribed forms for each — and that includes authority to make those decisions in circumstances where the principal no longer has capacity.280 The duty to notify relatives is confined [page 35]

by the 2005 Act to those persons named for this purpose in the power itself.281 The Act established a new Court of Protection with jurisdiction to deal with decision-making for adults who lack capacity,282 and appointed the Public Guardian to, inter alia, maintain a register of lasting powers of attorney (registrable at any time after being made283 and incapable of conferring authority before registration)284 and monitor the actions of attorneys acting under lasting powers.285

Australia286 1.62 Law reform bodies in several Australian jurisdictions provided the backdrop to enduring powers of attorney legislation.287 The first dedicated statutory provision for enduring powers of attorney in Australia took effect in Victoria, with amendments to the Instruments Act 1958 taking effect on 3 March 1982.288 In the year before, the Northern Territory had enacted the Powers of Attorney Act 1980, which made provision for enduring powers, but its commencement was postponed until 28 January 1983 (though from 17 March 2014, the former enduring power of attorney falls within the broader concept of an ‘advance personal plan’).289 The Powers of Attorney and Agency Act 1984 (SA), which likewise envisaged enduring powers of attorney, took effect on 1 June 1984. In New South Wales a 1983 Act, which did not commence until 1 March 1985,290 amended the Conveyancing Act 1919 to allow enduring powers, until its provisions, with amendments, were transferred to the Powers of Attorney Act 2003.291 In Tasmania the (then) Powers of Attorney Act 1934 was amended to include enduring powers from 20 January 1988.292 The 1934 Act was replaced, on 4 April 2001, by the Powers of Attorney Act 2000.293 The conclusion of the 1980s saw the then Powers of Attorney Act 1956 (ACT) also amended to recognise enduring powers,294 with effect from 30 October 1989. The Powers of Attorney Act 2006 has since replaced the 1956 Act.295 The remaining jurisdictions awaited the 1990s to effect a similar change to their law. Western Australia did so via the enactment of the Guardianship and Administration Act 1990, and the relevant provisions commenced on 1 July 1992. Two years earlier the Property Law Act 1974 (Qld) was amended to provide for enduring powers, as

[page 36] from 3 September 1990;296 the relevant law is now found in the Powers of Attorney Act 1998.297

Canada 1.63 As in Australia, the enduring powers of attorney legislation in each Canadian province has generally been enacted pursuant to a law reform body’s recommendation to this effect.298 Although the details of the statutory schemes vary between provinces, and there have been attempts to increase the uniformity of the law at least across Western Canada,299 law reform bodies’ recommendations consistently favoured recognising the validity of enduring powers via statute.300 In the provinces of Ontario and Saskatchewan statute envisages that the appointment of an attorney under an enduring power is not necessarily limited to financial matters but can encompass authority to make decisions relating to a principal’s personal affairs.301

New Zealand 1.64 The enduring power of attorney was also a ‘relatively recent invention’302 in New Zealand, via the Protection of Personal and Property Rights Act 1988 Pt 9 (NZ),303 which was subject to substantial amendment with effect from 25 September 2008.304 It was likewise designed to ‘provide for cases where a person wished to anticipate his incapacity by appointing an attorney whose authority would endure despite the mental incapacity of the donor’.305 Enduring powers are not limited to financial decision-making, but can encompass decisions related to the personal care and welfare of the principal.306 There is no dedicated legislation in New Zealand, though, regulating non-enduring powers, which largely resort to the general law.

1.

Standard Chartered Bank v Shem Yin Fun [2002] HKEC 582 at [83] per Deputy Judge Poon.

2.

The only other Australian monograph has been B Collier and S Lindsay, Powers of Attorney in Australia and New Zealand, The Federation Press, Sydney, 1992. In the United Kingdom see T M Aldridge, Powers of Attorney, 10th ed, Sweet & Maxwell, London, 2007; J Thurston, A

Practitioner’s Guide to Powers of Attorney, 7th ed, Bloomsbury Professional, West Sussex, 2010. In Canada see M J Sweatman, Powers of Attorney and Capacity: Practice and Procedure, Canada Law Book Inc, Ontario, 2014. 3.

One commentator has, to this end, described the power of attorney as occupying ‘one of those remote corners of agency that has received comparatively little attention’: R Munday, ‘The Capacity to Execute an Enduring Power of Attorney in New Zealand and England: A Case of Parliamentary Oversight?’ (1989) 13 NZULR 253 at 253.

4.

See, for example, Law Reform Commission of New South Wales, Powers of Attorney and Unsoundness of Body or Mind, LRC 20, 1975; Law Reform Commission of British Columbia, Report on the Law of Agency, Part I (The Termination of Agencies), Part II (Powers of Attorney and Mental Incapacity), 1975; Law Reform Committee of South Australia, Report Relating to Powers of Attorney, 1981; Law Commission, The Incapacitated Principal, Law Com No 122, London, 1983; Law Reform Commission of Tasmania, Report on Powers of Attorney, Report No 39, 1984; Australian Law Reform Commission, Community Law Reform for the Australian Capital Territory: Third Report, Enduring Powers of Attorney, AGPS, 1988; Newfoundland Law Reform Commission, Report on Enduring Powers of Attorney, NLRC – R2, December 1988; Law Reform Commission, Ireland, Report on Land Law and Conveyancing Law: (2) Enduring Powers of Attorney, LRC 31 – 1989; Law Reform Commission of British Columbia, The Enduring Power of Attorney: Fine-Tuning the Concept, Working Paper No 62, 1989; Law Reform Commission of Victoria, Enduring Powers of Management, Report No 35, 1990; Alberta Law Reform Institute, Enduring Powers of Attorney, Report No 59, December 1990.

5.

E Jowitt and C Walsh, Jowitt’s Dictionary of English Law, 2nd ed by J Burke, Sweet & Maxwell, London, 1977, vol 2, p 1399. See also Despot v Registrar-General (NSW) [2013] NSWCA 313; BC201313208 at [55] per Meagher JA, with whom Ward JA and Bergin CJ in Eq concurred (‘A power of attorney is a formal instrument by which authority or power to represent the donor is conferred on the donee’).

6.

Hodges v Surratt (1978) 366 So 2d 768 at 773 (D App Fla).

7.

See, for example, Commissioner of Stamps (Vic) v Papalia (1982) 12 ATR 866 at 869 per Crockett J (SC(Vic)); Re J (Enduring Power of Attorney) [2009] 2 All ER 1051; [2009] EWHC 436 (Ch) at [4] per Lewison J (‘At common law a power of attorney is an agency created by deed’). Cf Alcock, pp 1–3; Collier & Lindsay, pp 1–2 (each cataloguing the different views in this regard).

8.

See 4.5.

9.

See 4.1–4.3.

10. For example, a trustee in a sense represents the interests of beneficiaries but is not an agent of the beneficiaries in so doing. 11. Butterworths Australian Legal Dictionary, P E Nygh and P Butt (eds), Butterworths, Sydney, 1997, p 897. 12. See 1.8–1.13. 13. Lim Eng Chuan Sdn Bhd v United Malayan Banking Corp Bhd [2005] 4 MLJ 172 at [13] per Suriyadi J (HC) (‘In essence what is flowing from the donor to the donee is the authority’). 14. See 1.19–1.23. 15. See, for example, Bank of America v Horowytz (1968) 248 A 2d 446 at 448 (NJ County Ct); King v Bankerd (1985) 492 A 2d 608 at 611 (Md Ct App); Sevigny v New South Federal Savings and Loan Association (1991) 586 So 2d 884 at 886 (Ala); Kisselbach v County of Camden (1994) 638 A 2d 1383 at 1386 (NJ App); Willey v Mayer (1994) 876 P 2d 1260 at 1264 (Colo); Franzen v

Norwest Bank Colorado (1998) 955 P 2d 1018 at 1021 (Colo); Comerica Bank-Texas v Texas Commercial Bank National Association (1999) 2 SW 3d 723 at 725 (Tex Ct App). 16. See, for example, Commissioner of Stamps (Vic) v Papalia (1982) 12 ATR 866 at 867 per Crockett J (SC(Vic)); Re Hebb and Registrar of Titles (1982) 142 DLR (3d) 729 at 733 per de Weerdt J (SC(NWT)). 17. See 2.22–2.25. 18. See 2.4–2.6. 19. See R L Abel, The Legal Profession in England and Wales, Basil Blackwell Ltd, Oxford, 1988, pp 139–42. 20. See, for example, Hodges v Surratt (1978) 366 So 2d 768 at 773 (D App Fla); Matter of the Estate of Mehus (1979) 278 NW 2d 625 at 629 (ND). 21. See G E Dal Pont, Lawyers’ Professional Responsibility, 5th ed, Lawbook Co, Australia, 2013, [3.90]–[3.120]. 22. Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1; [2008] WASC 239; BC200809492 at [6177], [6178] per Owen J (varied on appeal but not on this point: Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1; [2012] WASCA 157; BC201206001). 23. Saad v Doumeny Holdings Pty Ltd [2005] NSWSC 893; BC200506715 at [24] per Burchett AJ. See also Dib v Green (2009) 236 FLR 348; [2009] FMCA 1174; BC200910930 at [9] per Raphael FM (‘a form of agency’). 24. Crago v McIntyre [1976] 1 NSWLR 729 at 749 per Holland J. See also Re Craven’s Estate [1937] 1 Ch 423 at 428 per Farwell J (‘The position of a donee of a power of attorney is merely to act as agent for the principal’). 25. Re NRMA Insurance Ltd (2000) 33 ACSR 595 at 649; [2000] NSWSC 82; BC200000493 per Santow J. 26. Commissioner of Stamps (Vic) v Papalia (1982) 12 ATR 866 at 867 per Crockett J (SC(Vic)). 27. Lincolne v Williams (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 at [4] per Blow J. 28. Gregory v Turner [2003] 2 All ER 1114; [2003] EWCA Civ 183 at [67] per Brooke LJ. 29. R v Holt (1983) 12 A Crim R 1 at 14 per Tadgell J (CCA(Vic)). 30. Estate of Littlejohn (2005) 698 NW 2d 923 at 925 (ND). 31. See 6.25–6.69. 32. See Dal Pont, Agency, [7.5]–[7.11]. 33. Cf Dal Pont, Agency, [10.17], [10.18] (regarding non-fiduciary agents). 34. As to fiduciary duties in the context of powers of attorney see 8.31–8.50. 35. See, for example, Godsy v Godsy (1973) 504 SW 2d 209 at 212 (Mo Ct App) (‘A confidential relationship exists when one … relies upon and trusts another in regard to handling property and business affairs, thereby creating some fiduciary obligation’). As to the concept of a ‘confidential relationship’ generally see G E Dal Pont, Law of Confidentiality, LexisNexis Butterworths, Australia, 2015, [2.3]–[2.6]. 36. See 8.49, 8.50. 37. See Dal Pont, Agency, Chs 15–17.

38. See Dal Pont, Agency, Ch 18. 39. See 8.87–8.89 (remuneration), 8.90, 8.91 (indemnity), 8.92, 8.93 (lien). 40. International Harvester Company of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Company (1958) 100 CLR 644 at 652; BC5800260 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ (emphasis supplied). 41. Petersen v Moloney (1951) 84 CLR 91 at 94 per Dixon, Fullagar and Kitto JJ (emphasis supplied). 42. Erikson v Carr (1945) 46 SR (NSW) 9 at 12 per Jordan CJ (emphasis supplied). 43. Commissioner of Stamps (Vic) v Papalia (1982) 12 ATR 866 at 869 per Crockett J (SC(Vic)). 44. See 1.5. 45. See Dal Pont, Agency, [4.3]–[4.13]. 46. See 2.2–2.7. 47. See 11.10. 48. See 1.30–1.34. 49. See 1.25–1.29. 50. See, for example, Lim Eng Chuan Sdn Bhd v United Malayan Banking Corp Bhd [2005] 4 MLJ 172 at [13] per Suriyadi J (HC). 51. See, for example, Egli (Committee of) v Egli (2005) 48 BCLR (4th) 208 at [29] per Hall JA (CA). 52. See, for example, Arcweld Manufacturing Co v Burney (1942) 121 P 2d 350 at 354 (Wash). 53. See, for example, Zaubler v Picone (1984) 100 AD 2d 620 at 621 (NY App). 54. See, for example, Matter of the Estate of Mehus (1979) 278 NW 2d 625 at 629 (ND); Estate of Littlejohn (2005) 698 NW 2d 923 at 925 (ND). 55. See, for example, Arcweld Manufacturing Co v Burney (1942) 121 P 2d 350 at 354 (Wash); Alexopoulos v Dakouras (1970) 179 NW 2d 836 at 840 (Wis). 56. See, for example, Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 at 454 (Del). 57. See, for example, Lim Eng Chuan Sdn Bhd v United Malayan Banking Corp Bhd [2005] 4 MLJ 172 at [13] per Suriyadi J (HC). 58. Pole v Leask (1860) 54 ER 481 at 486 per Romilly MR (affd Pole v Leask (1863) 8 LT 645 at 648 per Lord Cranworth). 59. See 4.4. 60. Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [105] per Hammerschlag J (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on the power of attorney issue). 61. Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 at 454 (Del). 62. As to attorneys’ implied authority see 6.22–6.24. 63. As to enduring powers of attorney see 1.25–1.29. 64. See 2.30–2.32. 65. See 5.26.

66. See, for example, Prosper Dynamics Sdn Bhd v MBF Property Services Sdn Bhd [2004] MLJU 416. 67. Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 at 454 (Del). 68. Alexopoulos v Dakouras (1970) 179 NW 2d 836 at 840 (Wis). 69. DFC Financial Services Ltd v Abel [1991] 2 NZLR 619 at 628 per Fisher J. 70. Villanueva v Brown (1997) 103 F 3d 1128 at 1136 (3rd Cir). 71. As to protection available to third parties see 12.6–12.34. 72. See 1.2. 73. Urquhart v Lanham (2002) 11 BPR 20,765; [2002] NSWSC 119; BC200200633 at [15] per Young CJ in Eq. 74. See 2.11, 2.12. 75. See 2.26, 2.27. 76. For example, to constitute a valid gift in contemplation of death (donatio mortis causa): Re Craven’s Estate [1937] 1 Ch 423, discussed at 2.16. 77. See 9.7. 78. Re Hebb and Registrar of Titles (1982) 142 DLR (3d) 729 at 733 per de Weerdt J (SC(NWT)). 79. See 9.5–9.17. 80. See Dal Pont, Agency, [4.14]–[4.20]. 81. See 2.2–2.7. 82. Blackburn, Low & Co v Vigors (1887) 12 App Cas 531 at 537–8 per Lord Halsbury LC (‘Some agents so far represent the principal that in all respects their acts and intentions and knowledge may truly be said to be the acts, intentions, and knowledge of the principal’). 83. See, for example, Stortroen v Beneficial Finance Co (1987) 736 P 2d 391 at 395 (Colo) (where the concept of a ‘general agent’ was defined as ‘an agent authorized to conduct a series of transactions involving a continuity of service’ and ‘who is an integral part of a business organization and does not require fresh authorization for each transaction’). 84. See, for example, Harmond Properties Ltd v Gajdzis [1968] 3 All ER 263. 85. Blackburn, Low & Co v Vigors (1887) 12 App Cas 531 at 538 per Lord Halsbury LC. 86. See, for example, Parker v Kett (1701) 1 Salk 95 at 96; 91 ER 88 at 89 per Holt J; Ghosn v Principle Focus Pty Ltd (No 2) [2008] VSC 574; BC200811609 at [36] per Forrest J. 87. Cf Collier & Lindsay, p 7. 88. Bowstead, p 38; P Mechem, Outlines of Agency, 4th ed, Callaghan, Chicago, 1952, p 46 (‘The most useful thing that can be said about a special agent is that he is one who falls outside the ambit of any useful generalisation’). 89. Restatement (3d) §2.01 cmt d. 90. Villanueva v Brown (1997) 103 F 3d 1128 at 1137 (3rd Cir). 91. See 5.18, 5.19, 9.23–9.33. 92. See 4.1–4.3.

93. See 1.15. 94. See 6.50–6.58, 8.31–8.50. 95. As to general powers of appointment being proprietary in nature see G Thomas, Thomas on Powers, 2nd ed, OUP, Oxford, 2012, pp 2–4. As to the difference between powers of attorney and powers of appointment see 2.22, 2.23. 96. See 5.20–5.29. 97. See 1.36, 2.30–2.32. 98. As to formalities see 4.1–4.30. 99. As to the registration of powers of attorney see 4.36–4.46. 100. Parnall (Attorney for) v British Columbia (Registrar of Land Titles) (2004) 26 BCLR (4th) 45 at [12] per Saunders JA (CA). 101. As in Danby v Coutts & Co (1885) 29 Ch D 500. 102. Black’s Law Dictionary, B A Garner (ed), 9th ed, Thomson, West, St Paul, Minnesota, 2009, p 1290. 103. See 11.25–11.27. 104. This did not prevent some judges calling for statutory reform in the field: see, for example, Egli (Committee of) v Egli (2005) 48 BCLR (4th) 208 at [29] per Hall JA (CA). In any case, the Australian Law Reform Commission has queried the authority in support of the proposition that a principal’s incapacity necessarily revokes a power of attorney, in that neither of the supposedly seminal cases (namely Drew v Nunn (1879) 4 QBD 661 and Yonge v Toynbee [1910] 1 KB 215) addressed the issue of powers of attorney: see ALRC, pp 5–6. 105. It has been observed that it is in the very circumstance of supervening mental incapacity ‘that many persons who create powers of attorney wish them to be valid’ (BCLRC, p 2) and that as a result of the general law ‘the power ceased to be effective in the very situation where it was most needed’ (NZLC, p 2). Accordingly, it has been remarked that ‘[w]hen a person has the foresight to make arrangements for his or her impending incapacity, it is most unsatisfactory if the law frustrates that planning’ (ALRC, p 7). 106. See ALRC, p 5. 107. J Cockerill, B Collier and K Maxwell, ‘Legal Requirements and Current Practices’ in B Collier, C Coyne and K Sullivan, Mental Capacity: Powers of Attorney and Advance Health Directives, The Federation Press, Sydney, 2006, p 28 (footnote omitted). 108. See 1.58–1.64. 109. See 1.44. 110. See R Creyke, ‘Privatising Guardianship – The EPA Alternative’ (1993) 15 Adel L Rev 79. 111. See, for example, Comerica Bank-Texas v Texas Commercial Bank National Association (1999) 2 SW 3d 723 at 726 (Tex Ct App) (viewing a ‘springing durable power of attorney’ as no different in substance from a power of attorney that was to begin when the principal left for Europe, when the principal purchased a new business, or some similar future event, as ‘[t]he difference is the authorization of the agency was triggered by a future event other than the disability of the principal’); Parnall (Attorney for) v British Columbia (Registrar of Land Titles) (2004) 26 BCLR (4th) 45 at [26] per Saunders JA (CA) (‘Just as a power of attorney may provide as a condition that ‘this power of attorney may not be exercised so long as I am resident in British Columbia’, a power

of attorney may provide ‘this power of attorney may not be exercised while I am not mentally infirm’). 112. Having said that, it is not infrequent that enduring powers of attorney are sought to be created at a time when the signs of mental incapacity in the principal are beginning to surface. In these circumstances the issue arises as to the principal’s capacity to create an enduring power: see 3.5–3.31. 113. See 5.34. 114. Parnall (Attorney for) v British Columbia (Registrar of Land Titles) (2004) 26 BCLR (4th) 45 at [32] per Saunders JA (CA). 115. See 5.33–5.38. 116. Kiddill v Farnell (1857) 3 Sm & G 428; 65 ER 723. Contra Watson v King (1815) 4 Camp 272 at274; 171 ER 87 at 87 per Lord Ellenborough. 117. Yates v Hoppe (1850) 9 CB 541; 137 ER 1003. See further 11.7–11.9. 118. See, for example, Quest Rose Hill Pty Ltd v White [2010] NSWSC 939; BC201006067 (where Ward J found that, in the face of a power expressed to be irrevocable, the parties’ agreement envisaged that the attorney nonetheless owed obligations to the principal as to the manner of exercising the power; specifically, the exercise of the power was agreed to be subject to the obligation of good faith, and only for the (limited) purposes for which it was granted: at [73]–[77]). 119. Tingley v Müller [1917] 2 Ch 144 at 165 per Warrington LJ; Perpetual Trustee Co Ltd v Aroney (1944) 44 SR (NSW) 313 at 318 per Nicholas CJ in Eq; Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [158] per Palmer J. 120. Bonfigli v Strachan (2011) 192 Cal App 4th 1302 at 1309. 121. Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [152] per Palmer J. See further 8.49, 8.50. 122. See 11.10. 123. Walsh v Whitcomb (1797) 2 Esp 565 at 566; 170 ER 456 at 457 per Lord Kenyon; Gaussen v Morton (1830) 10 B & C 731 at 734; 109 ER 622 at 623 per Lord Tenterden CJ; Smart v Sandars (1848) 5 CB 895 at 917–18; 136 ER 1132 at 1140–1 per Wilde CJ; Dwyer v Herman (1881) 2 LR (NSW) L 280; Re Olympic Fire and General Reinsurance Co Ltd [1920] 2 Ch 341 at 346 per Lord Sterndale MR, at 348 per Warrington LJ; Griffin v Clark (1940) 40 SR (NSW) 409 at 413 per Williams J; Wilkinson v Young (1972) 25 DLR (3d) 275 at 276 per Addy J (HC(Ont)); Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [152] per Palmer J. 124. Hunt v Rousmanier (1823) 21 US 174 at 204 per Marshall CJ. 125. Woolley v Embassy Suites Inc (1991) 227 Cal App 3d 1520 at 1532. 126. Clerk v Laurie (1857) 2 H & N 199 at 200; 157 ER 83 at 83 per Williams J. See also Frith v Frith [1906] AC 254 at 259–60 per Lord Atkinson. 127. These were the facts of Gaussen v Morton (1830) 10 B & C 731; 109 ER 622. See also De Comas v Prost (1865) 3 Moo PCC (NS) 158; 16 ER 59. Indeed, this would amount to an assignment of the debt from P to A (Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 158 per Griffith CJ; see further 2.26–2.29), and is accordingly sufficient to vest in A a caveatable interest in the land: Lian Lee Construction Sdn Bhd v Joyous Seasons Sdn Bhd [2008] 8 MLJ 387 at 397 (HC).

128. See 11.7. 129. [1896] 2 Ch 643. 130. Re Hannan’s Empress Gold Mining and Development Co (‘Carmichael’s case’) [1896] 2 Ch 643 at 647 per Lindley LJ, at 648 per Lopes LJ. 131. [2013] NSWCA 313; BC201313208. 132. Despot v Registrar-General (NSW) [2013] NSWCA 313; BC201313208 at [54]–[63] per Meagher JA, with whom Ward JA and Bergin CJ in Eq concurred. 133. (1972) 25 DLR (3d) 275 at 276 (HC(Ont)). See also Despot v Registrar-General (NSW) [2013] NSWCA 313; BC201313208 at [48], [49] per Meagher JA, with whom Ward JA and Bergin CJ in Eq concurred. 134. Wilkinson v Young (1972) 25 DLR (3d) 275 at 276 per Addy J. 135. Wilkinson v Young (1972) 25 DLR (3d) 275 at 276, citing Re Parks (1956) 8 DLR (2d) 155 at 161 per Bridges J (App Div(NB)). 136. Frith v Frith [1906] AC 254 at 260 per Lord Atkinson. In Frith the plaintiff manager claimed that the power of attorney, which authorised him to enter into possession of and manage an estate, and to receive rents and profits and pay debts due by the owners, was irrevocable because he had separately undertaken at their request to guarantee the payment of a debt secured by mortgage over the estate. He argued that if he was called upon as surety, the power would enable him to recover any amount paid. The Privy Council rejected that argument because the authority when conferred was not ‘expressed or intended to be used for the purpose of subserving [the manager’s] interest as guarantor and had no connection with it’: at 260. 137. Smart v Sandars (1848) 5 CB 895; 136 ER 1132. 138. Re M (a debtor) (1909) 10 SR (NSW) 175 at 178–9 per Street J. 139. Powers of Attorney Act 2006 (ACT) s 54. 140. Powers of Attorney Act 2003 (NSW) ss 15, 16(1); Powers of Attorney Act 2000 (Tas) s 24; Property Law Act 1969 (WA) s 86(1). 141. Quest Rose Hill Pty Ltd v White [2010] NSWSC 939; BC201006067 at [72] per Ward J. 142. Powers of Attorney Act 2000 (Tas) s 25 (maximum period is one year); Property Law Act 1969 (WA) s 87(1) (maximum period is two years). 143. Powers of Attorney Act 1980 (NT) s 19(1), 19(2); Powers of Attorney Act 1998 (Qld) s 10(1), 10(2); Instruments Act 1958 (Vic) s 109(1) (and see the equivalent provision in the impending Powers of Attorney Act 2014 (Vic) ss 17, 19). 144. VPLRC, p 35 (recommendation 1) (namely a dedicated Powers of Attorney Act that contains all laws about general (non-enduring) powers of attorney, enduring powers of attorney (financial) and enduring powers of attorney (guardianship), driven by a concern that the existing legislative framework ‘provides a confusing and often inconsistent approach to powers of attorney’: p xliv). 145. Pursuant to the Instruments (Enduring Powers of Attorney) Act 2003 (Vic). 146. As to advance personal plans see 1.44. 147. See D C Pearce and R S Geddes, Statutory Interpretation in Australia, 7th ed, Lexis Nexis Butterworths, Australia, 2011, [5.28]. 148. See 1.25.

149. See 1.38 (ACT), 1.44 (NT), 1.48 (Qld). 150. See Powers of Attorney Act 2014 (Vic) s 22(2) (see the definition of ‘personal matter’ in s 3(1)). 151. ALRC, p 24. See also R Creyke, ‘Privatising Guardianship – The EPA Alternative’ (1993) 15 Adel L Rev 79. 152. See 2.30–2.32. 153. Powers of Attorney Act 2006 (ACT) s 6. 154. Powers of Attorney Act 2006 (ACT) Dictionary. 155. Powers of Attorney Act 2006 (ACT) s 7. As to the meaning of ‘decision-making capacity’ for the purposes of the Act see 5.36. 156. Powers of Attorney Act 2006 (ACT) s 8. As to the meaning of ‘impaired decision-making capacity’ for the purposes of the Act see 5.36. 157. ‘Property matter’, for a principal, means a matter relating to the principal’s property: Powers of Attorney Act 2006 (ACT) s 10 (which, by way of note, lists various examples of property matters in this context, including paying maintenance and accommodation expenses for the principal; paying the principal’s debts and expenses; receiving and recovering amounts payable to the principal; carrying on the principal’s trade or business; performing contracts entered into by the principal; discharging a mortgage over the principal’s property; paying rates, taxes and other outgoings for the principal’s property; insuring the principal or the principal’s property; preserving or improving the principal’s estate; investing in authorised investments for the principal; undertaking transactions for the principal involving the use of the principal’s property as security for the benefit of the principal; undertaking a real estate transaction for the principal; withdrawing amounts from, or depositing amounts into, an account of the principal held with an authorised deposit-taking institution). It also includes legal matters in relation to the principal’s finances and property; a ‘legal matter’ is taken to mean: (a) the use of legal services for the principal’s benefit; or (b) bringing, defending or settling a proceeding on behalf of the principal: Powers of Attorney Act 2006 (ACT), Dictionary. 158. ‘Personal care matter’ means a matter (other than a health care matter, special personal matter or special health care matter, each of these terms being defined) relating to the principal’s personal care, including the principal’s welfare: Powers of Attorney Act 2006 (ACT) s 11 (which, by way of note, lists examples including where the principal lives; who the principal lives with; whether the principal works and, if the principal works, where and how the principal works; what education or training the principal gets; the principal’s dress and diet; whether the principal will go on holiday and where; legal matters relating to the principal’s personal care). 159. ‘Health care matter’ means a matter (other than a special health care matter) relating to the principal’s health care: Powers of Attorney Act 2006 (ACT) s 12 (which, by way of note, lists examples including consenting to lawful medical treatment necessary for the principal’s wellbeing; donations under the Transplantation and Anatomy Act 1978 (ACT); withholding or withdrawal of medical treatment for the principal; legal matters relating to the principal’s health care). 160. Powers of Attorney Act 2006 (ACT) s 13(2). 161. Powers of Attorney Act 2006 (ACT) s 31. 162. See generally Guardianship and Management of Property Act 1991 (ACT) s 62, discussed at 10.4. 163. [2004] NSWSC 530; BC200404323. 164. Powers of Attorney Act 1956 (ACT) s 2(1).

165. Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd [2004] NSWSC 530; BC200404323 at [92]. 166. Powers of Attorney Act 1956 (ACT) Sch 1, Forms 1 and 2. 167. Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd [2004] NSWSC 530; BC200404323 at [92]. 168. See 1.19–1.23. 169. Powers of Attorney Act 1956 (ACT) s 11(2). 170. Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd [2004] NSWSC 530; BC200404323 at [94]. 171. See 4.38, 4.39. 172. Powers of Attorney Act 1956 (ACT) s 88. 173. It is instructive, moreover, to note that the New South Wales prescribed form for a power of attorney, though headed ‘General Power of Attorney’, includes within its terms limitations on the authority of the attorney consistent with what would amount to a special power of attorney at general law: see 1.41. 174. See 1.20. 175. Villanueva v Brown (1997) 103 F 3d 1128 at 1137 (3rd Cir). 176. Powers of Attorney Act 2003 (NSW) s 3(1). 177. Powers of Attorney Act 2003 (NSW) s 8. This section saw amendment by the Powers of Attorney Amendment Act 2013 (NSW), with effect on 13 September 2013, to locate the prescribed form(s) in the Powers of Attorney Regulation 2011 (NSW) (see cl 4A(1) Sch 2). Locating the prescribed form(s) in the regulations aimed to provide a means to alter the form(s) quickly and easily to meet any changes in the law and in practice. Prior to 13 September 2013, a single prescribed form – used to create either a general power or an enduring power, depending on how the form was completed – was found in Sch 2 to the Act. While intended to make it easier and quicker to complete a power of attorney, the ‘single form’ approach instead proved confusing for many people. Unlike their predecessor, the new forms also contain ‘background information’ for donors, as well as explanations of the effect of the various clauses (and ‘notes for completion’), concluding with ‘important information’ regarding aspects of the law surrounding powers of attorney. Although the amending Act commenced on 13 September 2013, the old prescribed form of power of attorney could continue to be used until 28 February 2014: Powers of Attorney Regulation 2011 (NSW) cl 4A(2), 4A(3). 178. Powers of Attorney Act 2003 (NSW) s 9(2). 179. See 1.39, 1.40. 180. Namely Conveyancing Act 1919 (NSW) Pt 16 (see s 163B(3), Sch 7), which is included as Sch 1 to the Powers of Attorney Act 2003 (NSW). 181. Powers of Attorney Act 2003 (NSW) s 19(1)(a). As to the other formality requirements applicable to the creation of a valid enduring power of attorney see 4.12, 4.13, 4.34, 4.35. 182. See 1.38. 183. Powers of Attorney Act 2003 (NSW) s 7(1). 184. As to the meaning of ‘power of attorney’ at general law see 1.2. 185. Powers of Attorney Act 1980 (NT) Pt II: see 4.14.

186. Powers of Attorney Act 1980 (NT) Pt IV: see generally Ch 11. 187. Powers of Attorney Act 1980 (NT) Pt III: see 4.15. 188. Powers of Attorney Act 1980 (NT) s 13(aa). 189. The Powers of Attorney Act 1980 (NT) is limited to financial and property matters, and issues of health and welfare decisions could only be dealt with by appointment of a guardian under the Adult Guardianship Act 1988 (NT). 190. The terminology used is ‘planning capacity’, which is defined in Advance Personal Planning Act 2013 (NT) s 4: see 3.29. 191. Advance Personal Planning Act 2013 (NT) s 8(1). 192. Advance Personal Planning Act 2013 (NT) s 8(2) (emphasis supplied). 193. Advance Personal Planning Act 2013 (NT) s 20(2). ‘Impaired decision-making capacity’ is defined in s 6(3)–6(5): see 3.29. 194. Advance Personal Planning Act 2013 (NT) s 16(1). 195. Advance Personal Planning Act 2013 (NT) s 16(2). 196. See Adult Guardianship Act 1988 (NT) s 8. 197. See Adult Guardianship Act 1988 (NT) s 17(1) (authority of guardian under full guardianship order). 198. Adult Guardianship Act 1988 (NT) s 17(2)(d). 199. See Adult Guardianship Act 1988 (NT) s 16A. 200. Adult Guardianship Act 1988 (NT) s 23B (as soon as practicable after becoming aware of the advance personal plan, the Adult Guardianship Executive Officer must apply to the court for a review of the guardianship order, unless a decision-maker has already done so). 201. Powers of Attorney Act 1998 (Qld) s 5(1). 202. Powers of Attorney Act 1998 (Qld) Sch 3. 203. Powers of Attorney Act 1998 (Qld) s 5(2). 204. [2004] NSWSC 530; BC200404323. 205. See 1.39, 1.40. 206. As to which see 10.16. 207. Powers of Attorney Act 1998 (Qld) s 108. 208. ‘Financial matters’ are listed in Powers of Attorney Act 1998 (Qld) Sch 2 Pt 1. They align with the concept of ‘property matters’ under Powers of Attorney Act 2006 (ACT) s 10: see n 157. 209. ‘Personal matters’ are listed in Powers of Attorney Act 1998 (Qld) Sch 2 Pt 2. They align with the concept of ‘personal care matters’ under Powers of Attorney Act 2006 (ACT) s 11: see n 158. 210. A ‘health matter’ is a matter relating to health care, other than special health care, of the principal: Powers of Attorney Act 1998 (Qld) Sch 2 Pt 2 cl 4. ‘Health care’ is care or treatment of, or a service or a procedure for, the principal to diagnose, maintain, or treat the principal’s physical or mental condition, carried out by, or under the direction or supervision of, a health provider: cl 5(1). It includes withholding or withdrawal of a life-sustaining measure for the principal if the commencement or continuation of the measure for the principal would be inconsistent with good

medical practice: cl 5(2). 211. A ‘special health matter’ is a matter relating to special health care of the principal: Powers of Attorney Act 1998 (Qld) Sch 2 Pt 2 cl 6. ‘Special health care’ is health care of the following types: (a) removal of tissue from the principal while alive for donation to someone else; (b) sterilisation of the principal; (c) termination of a pregnancy of the principal; (d) participation by the principal in special medical research or experimental health care; (e) electroconvulsive therapy or psychosurgery for the principal; (f) prescribed special health care of the principal: cl 7 (and see further cll 8–17). 212. A ‘special personal matter’ is a matter relating to one or more of the following: (a) making or revoking the principal’s will; (b) making or revoking a power of attorney, enduring power of attorney or advance health directive of the principal; (c) exercising the principal’s right to vote in a government election or referendum; (d) consenting to adoption of a child of the principal under 18 years; (e) consenting to marriage of the principal: Powers of Attorney Act 1998 (Qld) Sch 2 Pt 2 cl 3. 213. Powers of Attorney Act 1998 (Qld) s 32(1)(a). 214. Powers of Attorney Act 1998 (Qld) s 5(4). 215. Powers of Attorney Act 1998 (Qld) s 35(1). 216. Powers of Attorney Act 1998 (Qld) s 35(3). 217. Powers of Attorney Act 1998 (Qld) s 6A(1); Guardianship and Administration Act 2000 (Qld) s 8(1). 218. Powers of Attorney Act 1998 (Qld) s 6A(4); Guardianship and Administration Act 2000 (Qld) s 8(2). 219. Powers of Attorney Act 1998 (Qld) s 70. See also Guardianship and Administration Act 2000 (Qld) ss 22, 23. 220. As to the meaning of ‘power of attorney’ at general law see 1.2. 221. The prescribed form is found in Powers of Attorney and Agency Act 1984 (SA) Sch 1. 222. Powers of Attorney and Agency Act 1984 (SA) s 5(1). 223. Powers of Attorney and Agency Act 1984 (SA) s 5(2). 224. Powers of Attorney and Agency Act 1984 (SA) s 6(1). 225. The Advance Care Directives Act 2013 (SA) commenced operated on 1 July 2014. Prior to this date, the relevant legislation was the Consent to Medical Treatment and Palliative Care Act 1995 (SA) Pt 2 Div 3, which made provision for ‘medical powers of attorney’ (whereby a person could, while of sound mind, appoint an agent with power to make decisions on his or her behalf about medical treatment: s 8(1)). 226. Advance Care Directives Act 2013 (SA) s 13. 227. See Guardianship and Administration Act 1993 (SA) Pt 4 Div 2. Prior to 1 July 2014, the 1993 Act (in Pt 3) also made provision for a person to appoint an enduring guardian in advance of any incapacity. This avenue is now subsumed by advance care directives pursuant to the Advance Care Directives Act 2013 (SA). 228. Powers of Attorney Act 2000 (Tas) s 3(1). 229. As to the meaning of ‘power of attorney’ at general law see 1.2. 230. These forms are found in Powers of Attorney Act 2000 (Tas) Sch 1.

231. Cf Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd [2004] NSWSC 530; BC200404323, discussed at 1.39, 1.40. 232. Powers of Attorney Act 2000 (Tas) s 30(1). 233. Powers of Attorney Act 2000 (Tas) s 38. 234. See Guardianship and Administration Act 1995 (Tas) Pt 5. 235. See Guardianship and Administration Act 1995 (Tas) Pt 4. 236. See Guardianship and Administration Act 1995 (Tas) Pt 6. 237. Guardianship and Administration Act 1995 (Tas) s 53(1) (but note exception in relation to ‘emergency orders’: Pt 8). 238. Instruments Act 1958 (Vic) s 104. 239. As to the meaning of ‘power of attorney’ at general law see 1.2. 240. Instruments Act 1958 (Vic) s 107, Sch 12. 241. Cf Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd [2004] NSWSC 530; BC200404323, discussed at 1.39, 1.40. 242. See Powers of Attorney Act 2014 (Vic) Pt 2. 243. See Powers of Attorney Act 2014 (Vic) Pts 3–6. 244. Instruments Act 1958 (Vic) s 115(1) (see Powers of Attorney Act 2014 (Vic) s 22(1)). 245. Instruments Act 1958 (Vic) s 117(2) (see Powers of Attorney Act 2014 (Vic) s 39(2)). 246. Instruments Act 1958 (Vic) s 125F(1). 247. See Medical Treatment Act 1988 (Vic) s 5A, Sch 2. 248. See Guardianship and Administration Act 1986 (Vic) Pt 4A. 249. Instruments Act 1958 (Vic) s 125F(2). 250. Namely Div 5A of Pt 4 of the Guardianship and Administration Act 1986 (Vic), which deals with ‘enduring guardians’. 251. Powers of Attorney Act 2014 (Vic) s 22(2). 252. Powers of Attorney Act 2014 (Vic) s 3(1). 253. Powers of Attorney Act 2014 (Vic) Pt 7. 254. See Guardianship and Administration Act 1986 (Vic) Pt 5. 255. Instruments Act 1958 (Vic) s 125G (see Powers of Attorney Act 2014 (Vic) s 83(1)). 256. As to the meaning of ‘power of attorney’ at general law see 1.2. 257. See Guardianship and Administration Act 1990 (WA) Pt 9. 258. Guardianship and Administration Act 1990 (WA) s 104(1)(b)(i), Sch 3 (Form 1, cl 4(a)). 259. See Guardianship and Administration Act 1990 (WA) Pt 5. 260. See Guardianship and Administration Act 1990 (WA) Pt 9B. 261. Guardianship and Administration Act 1990 (WA) s 108(1), 108(1a). 262. See Cretney & Lush, Ch 1.

263. Namely the ‘Model Special Power of Attorney for Small Property Interests’. 264. As to the background to the durable power of attorney in the United States see generally C L Dessin, ‘Acting as Agent under a Financial Durable Power of Attorney: An Unscripted Role’ (1996) 75 Nebraska L Rev 574 at 576–80; K E Boxx, ‘The Durable Power of Attorney’s Place in the Family of Fiduciary Relationships’ (2001) 36 Georgia L Rev 1 at 4–14; J L Rhein, ‘No One in Charge: Durable Powers of Attorney and the Failure to Protect Incapacitated Principals’ (2009) 17 Elder LJ 165 at 172–4. 265. See J L Rhein, ‘No One in Charge: Durable Powers of Attorney and the Failure to Protect Incapacitated Principals’ (2009) 17 Elder LJ 165 at 175–7. 266. See J A Black, ‘The Not-so-Golden Years: Power of Attorney, Elder Abuse, and Why our Laws are Failing a Vulnerable Population’ (2008) 82 St John’s L Rev 289; J L Rhein, ‘No One in Charge: Durable Powers of Attorney and the Failure to Protect Incapacitated Principals’ (2009) 17 Elder LJ 165 at 178–9. 267. See (accessed 8 September 2014). 268. Law Com 122, p 63. In an earlier report (Powers of Attorney, Law Com No 30, 1970), which had proven the catalyst for the Powers of Attorney Act 1971 (UK), the Commission noted, but did not pursue, suggestions for enabling such a power to continue notwithstanding incapacity of the donor (para 25). 269. Re K (Enduring Power of Attorney) [1988] Ch 310 at 311–12 per Hoffmann J. 270. Re R (Enduring Power of Attorney) [1990] 1 Ch 647 at 650 per Vinelott J. 271. Re W (Enduring Power of Attorney) [2001] Ch 609 at [46] per Arden LJ. 272. Re W (Enduring Power of Attorney) [2001] Ch 609 at [46] per Arden LJ. 273. Re R (Enduring Power of Attorney) [1990] 1 Ch 647 at 650 per Vinelott J. 274. The relevant provisions are reenacted as Sch 4 to the current Mental Capacity Act 2005 (UK) (see Sch 4 cl 4). 275. Mental Capacity Act 2005 (UK) Sch 4 cl 13(9). As to notices of objection generally see Cretney & Lush, pp 312–16. As to suitability of attorneys see further 3.50. 276. Mental Incapacity, Law Com No 231, February 1995. 277. Mental Incapacity, Law Com No 231, February 1995, p 104. 278. Enduring powers of attorney created before that date continue to have effect. The law applicable to those powers is contained in Sch 4 to the Mental Capacity Act 2005 (UK), which substantially reenacts the Enduring Powers of Attorney Act 1985 (UK). 279. As to the main differences between the (former) enduring powers and the (current) lasting powers see Cretney & Lush, Ch 2. 280. Mental Capacity Act 2005 (UK) s 9(1). 281. Mental Capacity Act 2005 (UK) Sch 1 cll 2(1)(c), 6–10. 282. Mental Capacity Act 2005 (UK) ss 45–56. See further Cretney & Lush, Ch 11. As to the role of the (former) Court of Protection vis-à-vis enduring powers of attorney see Cretney & Lush, Ch 19. 283. See Mental Capacity Act 2005 (UK) Sch 1 Pt 2. 284. Mental Capacity Act 2005 (UK) s 9(2)(b), 9(3). 285. Mental Capacity Act 2005 (UK) ss 57–60.

286. See R Creyke, ‘Enduring Powers of Attorney: Cinderella Story of the 80s’ (1991) 21 UWALR 122. 287. See, for example, Law Reform Commission of New South Wales, Powers of Attorney and Unsoundness of Body or Mind, LRC 20, 1975; Law Reform Committee of South Australia, Report Relating to Powers of Attorney, 1981; Law Reform Commission of Tasmania, Report on Powers of Attorney, Report No 39, 1984; Australian Law Reform Commission, Community Law Reform for the Australian Capital Territory: Third Report, Enduring Powers of Attorney, AGPS, 1988; Law Reform Commission of Victoria, Enduring Powers of Management, Report No 35, 1990. 288. Pursuant to the Instruments (Enduring Powers of Attorney) Act 1981 (Vic). 289. See 1.44. 290. Conveyancing (Powers of Attorney) Act 1983 (NSW). 291. The Powers of Attorney Act 2003 (NSW) took effect on 16 February 2004. 292. Pursuant to the Powers of Attorney Amendment Act 1987 (Tas). 293. As to the law under the 1934 Act see Collier & Lindsay, pp 16–17. 294. Pursuant to the Powers of Attorney (Amendment) Act 1989 (ACT). 295. Most of which commenced operation on 30 May 2007. As to the law under the 1956 Act see Collier & Lindsay, pp 30–2. 296. Being the commencement date of the Property Law Amendment Act 1990 (Qld). 297. Most of the Powers of Attorney Act 1998 (Qld) commenced on 1 June 1998. As to the law prior to this date see Collier & Lindsay, pp 22–7. 298. See, for example, Alberta Law Reform Institute, Enduring Powers of Attorney, Report No 59, December 1990; Law Reform Commission of British Columbia, Report on the Law of Agency, Part I (The Termination of Agencies), Part II (Powers of Attorney and Mental Incapacity), 1975; Law Reform Commission of British Columbia, The Enduring Power of Attorney: Fine-Tuning the Concept, Working Paper No 62, November 1991; Newfoundland Law Reform Commission, Report on Enduring Powers of Attorney, NLRC – R2, December 1988. 299. See Western Canada Law Reform Agencies, Enduring Powers of Attorney: Areas for Reform, Final Report, 2008. The Western Canada Law Reform Agencies represents a consortium, pursuant to which the Alberta Law Reform Institute, British Columbia Law Reform Institute, Manitoba Law Reform Commission and Law Reform Commission of Saskatchewan agreed to work on joint reform projects. 300. See Powers of Attorney Act 2000 (Alta); Power of Attorney Act 1996 (BC) Pt 2; Powers of Attorney Act 1996 (Man); Enduring Powers of Attorney Act 1990 (Nfld & Lab); Powers of Attorney Act 1989 (NS); Powers of Attorney Act 2001 (NWT); Substitute Decisions Act 1992 (Ont) ss 7–14 (‘continuing powers of attorney for property’); Powers of Attorney Act 2002 (Sask) Pt II. Cf Powers of Attorney Act 1988 (PEI) s 5 (which simply ousts the general law rule that the mental incapacity of a principal revokes a power (see 11.25–11.27) if the terms of the power envisage its continuing operation in this event). 301. Substitute Decisions Act 1992 (Ont) ss 46–53 (‘powers of attorney for personal care’); Powers of Attorney Act 2002 (Sask) s 4.1 (‘personal attorney’, defined in s 2(1)). 302. Re ‘Tony’ (1990) 5 NZFLR 609 at 620 per Judge Inglis QC. 303. See W R Atkin, ‘Enduring Powers of Attorney in New Zealand’ [1988] NZLJ 368. The New Zealand Law Commission noted that Pt 9 of the Protection of Personal and Property Rights Act 1988 (NZ) ‘was an afterthought’, having been inserted into the Act at select committee stage:

NZLC, p 1. 304. Pursuant to the Protection of Personal and Property Rights Amendment Act 2007 (NZ). 305. Re Tony’ (1990) 5 NZFLR 609 at 620 per Judge Inglis QC. 306. Protection of Personal and Property Rights Act 1988 (NZ) ss 97–99.

[page 37]

Chapter 2

Powers of Attorney Distinguished from Other Legal Relationships Compared to contract Compared to trust Similarities to trusts Distinctions with trusts Interaction with non-express trusts Appointment of attorneys by trustees Compared to gift Compared to executor Compared to proxy Compared to powers generally Compared to powers of appointment Compared to other powers Powers of administration and management Power of an appointor Compared to assignment Distinguished from assignment Overlap with irrevocable powers Compared to guardianship

2.2 2.8 2.9 2.11 2.13 2.14 2.15 2.17 2.19 2.22 2.22 2.24 2.24 2.25 2.26 2.26 2.28 2.30

2.1 Chapter 1 identified three characteristics of a power of attorney: it it is formed via a document or instrument that is formal; it creates a relationship whereby one person ‘represents’ another; and there may be limits to the scope of that representation.1 This ultimately served to mark a power of attorney as a species of agency or, put another way, a subset of the law of agency. It followed that these second and third characteristics [page 38] dovetail into an attorney being vested with authority (or power) to do something in the principal’s stead. Relationships that the law recognised as conferring upon one person some ability to affect the legal position of another, or otherwise represent another’s interests, are not confined to powers of attorney, or to agency law generally. Other legal vehicles that may be utilised to serve this function include contracts, trusts, executorship, proxies, powers (here used in a sense more expansive than powers of attorney per se), assignment and guardianship. By comparing and contrasting these vehicles with the power of attorney, an understanding of the particular nature of the power of attorney, as introduced in Chapter 1, can be sharpened.

Compared to contract 2.2 Contract is about agreement — a meeting of the minds (consensus ad idem) — and requires consideration, sufficient certainty, an intention to create legal relations and, where prescribed by statute, certain formalities. Because it is premised on agreement, contract exhibits the need for mutuality, which in turn also informs the need for consideration. 2.3 It is interesting to note the manifold judicial statements that describe powers of attorney in the language of contract. Judgments from American courts, in particular, are replete with these. For example, there are statements that describe a power of attorney as ‘a contract of agency that creates a principal-agent relationship’2 and as involving a contractual relationship,3 one judge going as far as to remark that ‘the relation between the parties

created by the power of attorney is a contract relation is beyond question’.4 Some Australian judges appear to hold the same view — a New South Wales judge describing a power of attorney as ‘the traditional name for a contractual document creating express authority when the principal gives an agent wide general powers to act on his behalf’5 — as do some Canadian courts.6 2.4 The drive towards bringing powers of attorney within the umbrella of contract is ostensibly the result of the following deductive reasoning: powers of attorney are a form of agency; agency is a form of contract; therefore powers of attorney must be contracts. Whereas the first premise is correct, the second knows exceptions and qualifications, thereby endangering the wholesale validity of the conclusion. Not all agencies are contractual; the law has recognised a variety of scenarios where contract is not essential to the existence of an agency.7 That duties in tort are not restricted to contractual relationships, and that agency relationships are subject to a fiduciary [page 39] overlay as well as (increasing) statutory obligations, has reduced pressure to find a contractual foundation for an agent’s responsibility or liability. The same applies in respect of powers of attorney, which may attract tortious,8 equitable9 and statutory10 obligations. But more fundamentally, there are aspects of the standard power of attorney that do not align with contract. It cannot be assumed, for instance, that mutuality underscores the creation of a power of attorney. Rather, it has been judicially said that ‘[t]he giving of a power of attorney is a unilateral act’, the validity of which does not depend on the agreement or acceptance of the attorney.11 Nor does mutuality necessarily emerge during the course of the relationship; in this sense the principal remains in control and, as a general rule, ‘[a]n attorney cannot question the actions of its principal’.12 The absence of mutuality dictates that nothing precludes the principal from revoking or varying the power at any time13 (unless it is an irrevocable power of attorney).14 Variation or termination of a contract, on the other hand, ordinarily requires agreement of each party. 2.5

Though enduring powers of attorney appear to display the ‘agreement’

element of contract — statute requires the acceptance of the attorney15 — the acceptance requirement here serves non-contractual purposes,16 and so it may be queried whether a contract is intended. To this end, a Tasmanian judge has held that ‘[w]hilst an enduring power of attorney might have some of the features of a contract, it remains in essence a unilateral instrument’, meaning that ‘the bare giving and acceptance of the enduring power of attorney could not have resulted in a contract coming into existence’.17 In any event, a contract claim arising out of any enduring power is largely superfluous given avenues of relief available under statute and in equity. Irrevocable powers of attorney, conversely, do have a contractual tinge, chiefly because a form of ‘consideration’ moving from the attorney supports them. 2.6 The foregoing is not to say that powers of attorney can never amount to a legally enforceable contract. In a business context, a power of attorney may indeed involve an exchange or giving of consideration (and not just for the purposes of being irrevocable). Occasions exist where powers of attorney are granted as part of a contract, or in the course of a broader contractual relationship. An example of the former is a power incorporated as part of a mortgage,18 and an example of the latter is where a client grants a power of attorney to his or her lawyer within the course of the retainer to facilitate the lawyer carrying out legal services for the client. Yet in a private family context, it is unusual for a power of attorney to involve the principal giving any consideration. The contractual analogy does not sit well here. The issue squarely arose in Smith v Wachovia Bank NA,19 involving a power of attorney granted by a husband (as principal) to his wife (as attorney). The Supreme Court of [page 40] Alabama found that the power was not supported by consideration, or a promise or performance, on the part of the husband, noting that:20 [The respondent] has not identified a promise by the husband given ‘in exchange’ for the wife’s performance of her duties under the power of attorney. The explicit terms of the power of attorney directed the wife to conduct the husband’s affairs ‘for [the husband’s] use and benefit’ only, and there is no other instrument or contract coupled with the power of attorney indicating that the wife was paid for her services or received anything from the husband other than the ability or authority to perform.

The court found no authority supportive of the proposition that the mere conferring of actual authority to perform under a purported contract can constitute the promise exchanged by the promisor for that performance.21 As the wife could receive no benefit from the power, it was unclear how that grant of power could constitute a ‘promise’ made by the husband to induce the wife’s performance. The latter was gratuitous, and so hardly the province of contract.22 The Singapore Court of Appeal had made the same point some years earlier, adding that in contract ‘[i]f no consideration moves from the donor to the donee of such a power, the latter is not obliged to exercise the power’.23 It seems, therefore, that assuming that all powers of attorney are contracts is incorrect. Heed should be paid to the description of Lindley LJ, who in 1891 branded a power of attorney ‘a one-sided instrument, an instrument which expresses the meaning of the person who makes it, but is not in any sense a contract’.24 This provides one reason, albeit not the only reason, why the general law arguably required powers of attorney to be constituted by way of deed.25 The general law imposed no such formality requirements on contracts. 2.7 Contract may nonetheless play some role in the law of powers of attorney. Aside from the scenario where a power of attorney is contractual, there is case authority to the effect that the contractual principles relating to capacity to contract,26 and the interpretation of contracts,27 apply to issues of capacity and interpretation in the context of powers of attorney. Yet not all case authority goes the one way. Issues of a principal’s capacity to create a power of attorney may raise different policy considerations to contracts generally, and the case law reveals some degree of variance as a result.28 And so far as construing the terms of powers of attorney is concerned, the fiduciary backdrop, inter alia, has spurred the general law to promote a strict construction of powers,29 which knows no generally applicable parallel in contract law. [page 41]

Compared to trust

2.8 An express trust is created when a settlor transfers property to a trustee, or declares himself or herself to be a trustee of property, for the benefit of beneficiaries. The trustee has legal title to the property, whereas the beneficiaries (collectively at the very least) are entitled in equity. It is because the trustee holds not for himself or herself but for others’ benefit that the general law (equity in this case, given the historical genesis of the trust) imposes on the trustee wide-ranging duties, including strict fiduciary duties. Otherwise, as legal owner of the trust property, the trustee could deal with the property without fetter.

Similarities to trusts 2.9 There are, accordingly, similarities between trusts and powers of attorney. Both involve trust placed in a person, within a defined domain, to act in the interests of another. Indeed, trusts can be used for purposes similar to powers of attorney, especially enduring powers, where a person can transfer title to his or her property to a trustee for management, according to the terms of the trust, that survives the principal’s incapacity. Its drawbacks are the need to transfer title at a time preceding incapacity, the fact that settlors do not ordinarily retain the power to revoke or amend a trust, and potential transactional costs (including taxes and duties). The position, respectively, of trustee (as legal owner) and attorney (as holder of power to deal on a principal’s behalf) places each in a powerful position vis-à-vis the persons to whom their duty is owed (beneficiaries and principal, respectively). This explains why the law imposes fiduciary duties on trustees and attorneys.30 And it explains why the courts on occasion align, at least by analogy, other duties of trustees and attorneys, such as the duty to account31 and the duty applicable to the exercise of a power of sale.32 There is also dicta to the effect that ‘to use a power of attorney contrary to the known wishes and directions of the [principal] is a breach of trust’,33 although in this latter sense it appears that ‘breach of trust’ is being used in more its ordinary dictionary meaning than its legal meaning. 2.10 A closer analogy with the law of trusts surfaces in the context of enduring powers of attorney. The reason for this is that, once the principal loses his or her mental capacity, he or she lacks the legal ability to exercise

dominion over, and revoke or vary, the power of attorney. Hence there is greater trust again being placed in the attorney. Courts in North America, which have generally favoured using the ‘trust’ concept more expansively than their Australian (or English) counterparts, have consequently been inclined to view attorneys under enduring powers as de facto trustees. An American court stated that the ‘fiduciary relationship created by a durable power of attorney is like the relationship created by a trust’,34 and a Canadian judge saw the status of an attorney for an incapacitated principal as ‘much closer to that of a trustee [page 42] than an agent of the donor’.35 The same judge, referring to fiduciary duties owed by attorneys generally to their principals, added that ‘these are pale in comparison’ with those of an attorney under an enduring power when the principal has lost capacity to manage property.36 More recently another Canadian judge held that after the principal becomes incapable, the attorney owes him or her an even higher duty of loyalty when exercising the power, namely ‘[a]s a fiduciary in a role rising to that of a trustee’.37 The obligations imposed on attorneys under enduring powers by statute in Australia also bear some resemblance to those applicable to trustees.38 The Tasmanian Act goes further; it states that an attorney under an enduring power, during a period of mental incapacity of the principal, ‘is taken to be a trustee of the property and affairs of the [principal] according to the tenor of the power’.39 The trustee’s duty of care, in this regard, is designed to ‘reflect the seriousness and importance of the [enduring power of attorney]’.40 And, so far as advance personal plans in the Northern Territory are concerned,41 a decision-maker with financial management powers is statutorily required to deal with the represented adult’s property as if it were trust property held on trust for the represented adult and, in dealing with the property, is subject to the duties and limitations that apply to a trustee dealing with trust property.42 The Northern Territory and Tasmania, though not unique in the common law world to make provision of this kind,43 evince a minority position, as other jurisdictions, when presented with this choice, have opted to eschew

trusteeship, whether because of the duty to invest that comes with it44 or for some other reason.45

Distinctions with trusts 2.11 The foregoing does not mean that an attorney is in fact a trustee at law. In using the term ‘trustee’, the intention is to express a conclusion about a degree of accountability for the exercise of the power. The attorney is treated, in this sense, as accountable as if he or she were a trustee.46 As the general law casts on trustees perhaps the greatest level of accountability known to the law, to describe an attorney in terms of trusteeship highlights the need for greater accountability in circumstances where [page 43] the person to whom fiduciary duties are owed has become mentally incapable. This explains why statute makes provision for some independent oversight of the exercise of enduring powers, discussed in Chapter 10. As an attorney is not, however, actually a trustee47 — after all, he or she does not ordinarily have legal title to the principal’s property, and so the duality of ownership that lies at the core of trusteeship is absent — any such accountability is personal in nature. It is not sourced from having title to property but in having authority to deal with the principal’s affairs. There is a parallel here with constructive trusteeship arising out of accessory liability, which usually does not involve the holding of property by the accessory and so is limited to expressing an outcome grounded in personal accountability.48 Conversely, an attorney vested with title to, in tandem with authority over, the principal’s property becomes a trustee.49 2.12 There are other distinctions between attorney and trustee. First, an attorney derives authority from the person to whom fiduciary duties are owed — the principal, who retains control over that authority and can revoke the power if mentally capable50 — whereas a trustee must follow the terms of the trust deed and is not, as a general rule, subject to the directions of the persons to whom he or she owes fiduciary (and other) duties (the beneficiaries). Second, trusts are, it is said, ‘imperative’,51 meaning that trustees cannot be

passive in carrying out the trust. Powers of attorney are, by contrast, ‘facultative’ in the main; they confer a discretion to act more so than a duty, although that is not to say that attorneys do not owe positive duties.52 Third, the trust deed ordinarily prescribes, and circumscribes, the trustee’s powers specifically, whereas it is not uncommon for an attorney’s powers to be defined with generality. Fourth, as appears from the foregoing, trustees will commonly be obliged to manage the property for the benefit of more than one beneficiary; attorneys’ obligations are usually directed to a single principal53 (although there is no impediment to joint principals).54 Fifth, unlike an attorney, a trustee contracts as principal and cannot bind beneficiaries unless the trustee enters a contractual obligation to that effect with the beneficiaries.55 An attorney, if he or she is authorised to contract on a principal’s behalf, does not ordinarily become a party to the contract; the contract is that of the principal.56 As explained by de Weerdt J in Re Hebb and Registrar of Titles:57 A power of attorney confers powers to deal with property for the use and benefit of others, not the grantee. The attorney is therefore not a party to the property transactions which he conducts for the [principal] with the other persons who become parties to those transactions; the attorney is only an agent or facilitator of those transactions for the [principal]. The attorney remains, however, a person named in the instrument by

[page 44] which he is appointed and in that sense is interested in the same way as a party to the transaction which it embodies. He very clearly has a substantial interest under the terms of that instrument in that transaction, even though he can have no beneficial interest in the dealings which he is thereby authorized to transact for the [principal].

It follows that an attorney, in the usual case, incurs no personal liability on dealings effected on the principal’s behalf. Trustees, as they contract as principals, assume personal liability for expenses incurred in the management of the trust. Both trustees and attorneys do, however, have a right to be indemnified against expenses incurred personally in carrying out their duties and powers.58 Sixth, a power of attorney can be revoked by the principal,59 or by the death or insanity of the principal or agent.60 Trusts are not generally terminable at the will of the settlor or trustee or by the death of the trustee.61

Seventh, courts have an inherent equitable jurisdiction to remove trustees, and appoint trustees in the stead of those who have been removed,62 which jurisdiction finds statutory parallel in trustee legislation in each jurisdiction.63 Courts possess no equivalent inherent jurisdiction to remove attorneys, although statute confers a jurisdiction to remove attorneys under enduring powers, and even revoke those powers, in defined circumstances, which may also extend to specified tribunals.64

Interaction with non-express trusts 2.13 There may be interaction between powers of attorney and non-express trusts. For example, the grant of a power of attorney over a bank account may constitute evidence, coupled with other admissible evidence, to rebut a presumption of resulting trust over the moneys in that account.65 And constructive trusteeship may be imposed on an attorney who profits in breach of fiduciary duty owed to the principal,66 and the proceeds of a fiduciary breach may be followed (‘traced’) by the principal and treated as a fund held upon a constructive trust in his or her favour.67

Appointment of attorneys by trustees 2.14 Trustees have a duty to act personally, which in turn precludes trustees, at general law, from delegating their duties, powers and discretions.68 This does not preclude trustees appointing agents to, inter alia, carry out or implement decisions properly taken by the trustees. It follows that it may be legitimate for trustees to appoint attorneys for this purpose, and the trustee legislation in most jurisdictions [page 45] reflects this.69 It does not, however, carry ‘any corresponding authority to depute similar powers to an agent or attorney’.70 In all jurisdictions the trustee legislation also confers on trustees a limited power to delegate, via a power of attorney, which applies if, for instance, a trustee is to be absent from the jurisdiction for a period. For this purpose, the

attorney is regarded as if he or she were the delegating trustee. Nonetheless, in recognition of the nature of a principal-attorney relationship, the legislation generally attributes liability to the delegating trustee for the attorney’s acts and defaults.71

Compared to gift 2.15 As the trust, at least historically, most frequently involved making a gift — the settlor uses the vehicle of a trust to distribute benefits on beneficiaries, who are usually volunteers — it is appropriate, under the ‘trust’ banner, to compare gifts to powers of attorney. The latter chiefly involve the grant of authority, plenary or limited, in an attorney over the decision-making of a principal rather than the gifting of money or property by principal to attorney, or to a person whom the attorney selects. It is possible for the terms of a power of attorney to empower the attorney to make gifts of the principal’s property, including to the attorney personally. Yet as principals who wish to gift their property will usually do so directly rather than through the auspices of an attorney, when coupled with the superimposition of fiduciary duties owed by attorneys to their principal,72 has meant that any gift-giving power in an attorney, to come within the scope of his or her authority, must be conferred in explicit terms.73 2.16 Beyond explicit provision for gift-giving, powers of attorney may exhibit two characteristics of gifts: they are often unilateral, and they are not supported by consideration. These two characteristics, where present, serve to locate power of attorney outside the ambit of contract. Yet as the law presupposes a principal’s retention of control over the exercise of an attorney’s powers,74 entitling the principal to revoke the power of attorney and reassume personal control,75 the power of attorney is different in nature to a gift, which involves the relinquishing of both possession and ownership of property. Expressed another way, powers of attorney differ from gifts (and also assignments)76 in that the principal does not part with dominion in the case of the former but does in the case of the latter. For example, in Re Craven’s Estate77 Farwell J held that the mere giving of a power of attorney to an attorney (donee) ‘is not such

[page 46] a parting with dominion’ as is required to constitute a gift in contemplation of death (donatio mortis causa).78 This was because, according to his Lordship:79 … the donee of the power is a mere agent and there is no question of the donor of the power parting with dominion to the agent at all although the agent is clothed with authority to deal with the property as far as the power permits, in the same way as the principal could have dealt with it.

Compared to executor 2.17 An executor is a person to whom the execution of a will is confided by the testator. Pursuant to this office, an executor must get in the assets of the deceased (in the sense of holding title to those assets), pay expenses and distribute the residue of the estate in accordance with the will (or intestacy or order of the court).80 Clearly, therefore, like an attorney, an executor is vested with authority to act on behalf of a principal.81 The trust that comes with executorship, like that in attorneyship, calls for the superimposition of fiduciary duties,82 and an attendant duty to account.83 2.18 Unlike an attorney, though, an executor receives full ownership, without distinction between legal and equitable interests, of the testator’s property.84 An attorney, conversely, receives no title, legal or equitable, to the property of the principal, only (limited) authority to deal on the principal’s behalf. Also, an executor’s function is triggered by the death of the testator; except in the case of an irrevocable authority,85 a power of attorney is terminated by the death of the principal. The termination of executorship rests on the executorial function being completed rather than revocation by the beneficiaries of the estate or (for obvious reasons) the testator.

Compared to proxy 2.19 Proxies and powers of attorney clearly inhabit similar ground. An Australian legal dictionary defines ‘proxy’ as ‘a person authorised to do

something for someone else; an agent’.86 The agency characteristic of a proxy is evident from judicial statements describing, in the context of a shareholder (as principal) granting a proxy a [page 47] right to vote at company meetings, the proxy as ‘merely the agent of the shareholder’87 or ‘[a] person representative of the shareholder who may be described as his agent to carry out a course which the shareholder himself has decided upon’.88 More generally, a proxy has been judicially described to mean ‘some agent properly appointed’.89 That a proxy may be appointed via a power of attorney90 reveals the close relationship between the agencyfocused nature of the two concepts. 2.20 But not all agencies are proxies, and not all proxies are powers of attorneys. A proxy is a form of agency, meaning only ‘substitute’ or ‘person acting by procuration’.91 It is usually directed at a specific task, the exercise of voting rights being typical. Authority conferred by powers of attorney, to this end, is usually drafted in far broader terms than that under a proxy. Owen CJ in Eq explained the point in Sheldon v Phillips as follows:92 … it ought to be a special appointment for a definite purpose, and to express the business or matter in respect of which the proxy is to act for the principal — that is to say, if it is a proxy to vote, the document appointing the proxy ought to express that the proxy is to vote for the principal at a particular meeting, or at all meetings for a specified time, or for a particular purpose, or to express in some definite form the matters in respect of which the proxy is to act.

Being, in the terms of the above quote, ‘a special appointment for a definite purpose’, a power of attorney is not necessarily a proxy. In Sheldon v Phillips, for example, where the appointment merely authorised a person to act as agent via powers of attorney, and gave that person no express power to vote at any of the partnership meetings in issue, Owen CJ held that these powers of attorney were not valid proxies for voting at those meetings within the meaning of the partnership agreement.93 At the same time, though, at common law a proxy did not require a particular form,94 whereas a power of attorney was (and remains) premised on a greater level of formality.95 2.21 The decision in Sheldon v Phillips must be seen against the backdrop that the common law recognised no right in a shareholder (and presumably a

partner) to vote at shareholders’ (or partners’) meetings either by proxy or by an attorney. Underscoring this judicial attitude was presumably the view that voting is an essentially personal exercise of discretion. Accordingly, the right of a proxy (or attorney) to vote in a shareholder’s (or partner’s) stead needed to be sourced from either the company’s constitution or statute.96 The Corporations Act 2001 (Cth) makes express provision [page 48] for shareholders to vote by proxy97 and, highlighting the close association between proxy and attorney, this provision has been held to encompass voting by attorney, as has the expression ‘instrument appointing a proxy’ in the relevant company constitution.98

Compared to powers generally Compared to powers of appointment 2.22 The law defines a ‘power’, or more accurately a ‘power of appointment’ (sometimes known as a ‘power of selection’), as an authority to dispose of real or personal property, whether or not any existing estate or interest in that property vests in the holder of the power.99 A power of appointment can therefore vest in a trustee as regards trust property, or in a person lacking any interest in the property in question, in which case it operates purely as an authority. There is accordingly some similarity between powers of appointment and powers of attorney, in the sense that both may involve authority granted by another over property not held beneficially by the person exercising that authority. The similarity translates to terminology, by reference to the ‘donor’ and ‘donee’ of a power, whether one of appointment or one of attorney. 2.23 Aside from the fact that a donee of a power of appointment may in some circumstances have vested in him or her some estate or interest in the property in question — attorneys rarely do — an important difference between the two is that powers of appointment are usually aimed at the

distribution of the donor’s property, via the auspices of the donee, by way of bounty (or gift) to the objects (or beneficiaries) of the power. Although powers of attorney could be used for this purpose, this is unusual, as they focus more on the attorney representing, or being in the stead of, the principal than the exercise of property distribution by the principal. Another difference between powers of appointment and powers of attorney is that the latter are almost invariably fiduciary powers — that is, they must be exercised according to the proscriptions imposed by fiduciary law — whereas the former need not be fiduciary. This is evident from the fact that a general power of appointment, unlike a general power of attorney, is equivalent to unencumbered title to the property,100 as donees are entitled to appoint to any person they wish, including themselves.101 [page 49] The fiduciary overlay to which powers of attorney are subject dictates that attorneys cannot, except pursuant to express authority under the terms of the power, exercise their authority to benefit themselves.102

Compared to other powers Powers of administration and management 2.24 The law recognises powers other than those involving appointment of property. For example, a trustee has various powers and discretions in the management of the trust estate that do not involve the distribution of the trust capital or income. These are powers of an administrative or management nature. The terms of a contract, including an agency agreement, may confer on one or more of the parties various powers exercisable for the purposes of their relationship. And decision-making powers vest, for instance, in administrative decision-makers. So far as powers of attorney are concerned, the concept of ‘power’ is directed mainly at the authority — essentially the power — to act in place of the principal. Like trustees, and contracting parties, attorneys may have vested in them the powers necessary for, and

incidental to, the exercise of their authority,103 which can likewise be described as administrative-type powers.

Power of an appointor 2.25 A different type of power recognised by the law is that vested, usually in a trust instrument, in an appointor. As this involves the power to appoint (and remove) trustees, the appointor can have considerable sway over the trust’s management. However, because the appointor’s power is granted for the purposes of the proper administration of the trust — that is, for the benefit of the beneficiaries — it is a fiduciary power, and cannot be exercised for the personal benefit of the appointor.104 It is possible for a power of attorney to provide for an appointor, with the power to remove and appoint an attorney, in which case the power clearly remains fiduciary in nature. But aside from this, and the fact that attorneys exercise their authority in the fiduciary realm, there is little commonality between an appointor and an attorney.

Compared to assignment Distinguished from assignment 2.26 The legal concept of an assignment has been defined as ‘the immediate transfer of an existing proprietary right, vested or contingent, from the assignor to the assignee’.105 Although in such broad terms it can include a change in legal or equitable ownership of land or chattels, it is more common, when referring to land or chattels, to adopt the term ‘transfer’. Ordinarily, the concept of an ‘assignment’ is most commonly used to describe the disposition of a chose in action — namely an intangible personal right enforceable through action,106 a debt being a common example — from its [page 50] holder (the ‘assignor’) to another person (the ‘assignee’). The assignment of ‘debts and other legal choses in action’ is governed by legislation in each

jurisdiction.107 Equity also recognises assignments, and performs a supplementary role for assignments that do not fulfil the statutory requirements, or otherwise fall outside the statute but are protected by equity.108 2.27 What lies at the core of an assignment, and serves to distinguish it from a power of attorney, is that an assignment requires an intention by the assignor to ‘part with his dominion’ over the property assigned,109 that is, ‘some distinct indication of intention to make over, to part with control over, the thing alleged to be assigned’.110 Conversely, under a power of attorney the principal does not part with dominion of, or ‘make over’, property over which the attorney is given authority, but retains the ability to revoke the power.111 There is, moreover, no transfer of money or property in the usual power of attorney; only (limited) authority to represent the principal is vested in the attorney. Because an assignment involves an assignor ‘making over’ or ‘parting with dominion’ of a chose in action to an assignee, the latter has standing to sue, in his or her own name, in order to enforce a debt due to the assignor within the scope of the assignment. This applies both at law and (at least once notice to the debtor is given in the view of some) in equity.112 As the grant of a power of attorney does not, generally speaking, effect an assignment, there is no entitlement in the attorney to enforce, in his or her own name, a claim for moneys due to the principal within the parameters of the attorney’s authority.113 Any such action must be brought in the name of the principal.114 This represents no more than the application of basic agency law in this context.115

Overlap with irrevocable powers 2.28 The above distinctions between assignments and powers of attorney are essentially nullified where the power of attorney is irrevocable. Powers of attorney in this context serve a different object to the usual revocable powers. That a power is expressed to be irrevocable by the principal, and is substantiated by being ‘coupled with an interest’116 — that is, it is for the purpose of securing a benefit to the attorney, often involving a debt due from the principal to the attorney — brings it far closer to an assignment than a power of attorney as ordinarily understood.

[page 51] 2.29 The issue arose squarely before the High Court in Smith v Perpetual Trustee Co Ltd.117 The appellant was entitled to an interest under his grandfather’s will, which interest was, under the terms of the will, to be forfeited should the appellant assign or charge it. Planning to leave the country, and being indebted to his own solicitor as well as others, the appellant effected a power of attorney in favour of his solicitor (D) empowering D to: … ask, demand, receive, sue for, and recover all money payable, or hereafter to become payable to me by the trustees of the estate of the late Captain Charles Smith … and to operate on an account opened in my name in the King Street branch of the Commercial Banking Company at Sydney for the purpose of liquidating and paying all my just debts, and to sign all cheques to be drawn on such account.

The power concluded with the usual declaration that ‘it shall continue in force until notice of my death, or of the revocation hereof shall have been received by [D]’. By a letter of the same date addressed to the respondent (the trustee under the will), the appellant indicated that he had instructed D to pay his creditors out of his income as it fell due, and proceeded, ‘Will you please pay all future income as it falls due to me in my grandfather’s estate to [D] personally or to his credit in his special account at the Commercial Banking Co, King Street branch, and his receipt will be a sufficient discharge for such payment’. The issue was whether, as a result of the power of attorney, the forfeiture clause in the will had been triggered. The respondent argued that a power of attorney given by debtor to creditor to receive money due to the debtor is irrevocable, and operates as an assignment of all moneys to be dealt with under it. The old decision of Wilkinson v Wilkinson118 was cited in support of that contention. In that case a power of attorney, given to a creditor, empowered him to receive certain rents, and out of them to reimburse himself all sums advanced by him to the maker of the power of attorney, and in the next place to pay them to another creditor until his advances were repaid. Plumer MR held that the power of attorney operated as an equitable assignment, and thus triggered a testamentary prohibition against ‘assigning’, reasoning as follows:119 A power of attorney given to a creditor is not revocable. It is an equitable security, conferring a right to receive and withhold the rents until the debts are paid; and the [debtor] had no longer dominion over the property.

On the facts in Smith, Griffith CJ observed that, apart from the fact that D was a creditor of the appellant, the power of attorney and the letter ‘prima facie show a mere authority creating the relation of principal and agent’.120 The question was whether the fact that D was a creditor caused an agency to become an assignment. What led the court to distinguish Wilkinson, and to conclude that the power of attorney had not effected an assignment, beyond evidence that the appellant had not intended to effect an assignment for fear of triggering forfeiture,121 was encapsulated in the following extract from the judgment of Barton J:122 The power of attorney did not authorize [D] to place the money to any bank account except that of the appellant, and it was placed to his credit, with an authority to [D] to operate on it. The appellant’s own right to operate on it remained. The power of attorney was revocable, and if it were revoked, as it might be next day, the letter

[page 52] would cease to operate with it. It cannot be said that the case comes within those in which a transaction has been held to be an assignment because of the giving of a power of attorney to a creditor, which is irrevocable, it is true, where not expressly made revocable. But where the document is on its face revocable the creditor who takes it does so with that incident, and [the appellant] had it in his power to revoke at any moment. No doubt the parties intended to make the transaction as near an approach to a security as they could without making an assignment or a charge. But I am clearly of opinion that the dominant intention was to avoid any such alienation, an intention as strong on the part of [D] as on that of the appellant.

Isaacs J saw the prima facie import of the documents to be that D was to act as the appellant’s agent, adding that ‘not a word can be found … which regards him in any other character’ or that ‘amounts to a transfer or a trust for creditors’.123 Higgins J opined that cases that seem to suggest that a power of attorney given to a creditor is a binding equitable assignment, such as Wilkinson, must be viewed against their factual backdrop. According to his Honour, generally speaking these were cases in which the power is given to the creditor in that capacity, and his or her receipt of the money was pro tanto in satisfaction of the debt. In other words, the power is virtually a making over to the creditor of some specific asset of the debtor towards payment of that creditor’s debt, and so the recipient of the power is the ultimate payee. The scenario presented before the court was different, Higgins J explaining the difference as follows:124 [I]n the present case nothing was further from the minds of the parties to the transaction than

that [D] was to keep the money received. He would receive as agent for [the appellant]; and it was incumbent on him to distribute the net proceeds (deducting his own charges …) as dividends among all the creditors pro rata. [D] certainly was not to keep out of the receipts the amount owing to himself … in priority to the other creditors.

The decision in Smith reveals two points of particular relevance: there are occasions where a grant of a power of attorney to a person indebted to the principal can effect an assignment of the debt; and, often related to the first point, an irrevocable power of attorney, by its nature, effects an assignment in favour of the attorney.125

Compared to guardianship 2.30 The law recognises the concept of guardianship as regards persons who are legally incapable. It therefore makes provision, through statute, for guardianship pertaining to persons under the age of majority,126 as well as those who suffer mental incapacity, noted below. The courts have declared the relationship between guardian and ward, like that of principal and attorney, as giving rise to fiduciary duties.127 Guardianship and attorneyship share other similarities too. Both involve a ‘representational’ aspect; a guardian represents, and to this end exercises a decision-making capacity in, the [page 53] interests of the ward (or protected person); within the scope of the power the attorney represents, and may be authorised to make decisions binding on, the principal. In this sense, guardianship is about authority just as much as attorneyship. 2.31 As an underage person ordinarily lacks the capacity to appoint an attorney,128 any discussion comparing and contrasting guardianship and attorneyship must centre on guardianship in its application to persons lacking mental capacity. Unlike a power of attorney, which is a private instrument created pursuant to the principal’s intention, guardianship has a ‘public’ dimension, as it stems from an order of a court, tribunal or other independent body (except where a person has made existing provision for the appointment

of an ‘enduring guardian’, noted below). It follows incapacitation of the principal. A principal, once mentally incapable, cannot create a valid power of attorney.129 And an existing power of attorney is revoked by operation of law upon the principal’s incapacity130 unless the power is the statutory creature known as an ‘enduring power of attorney’.131 It follows that overlap between attorneyship and guardianship may surface where an enduring power of attorney is in force, which by definition can have legal effect upon the incapacity of the principal.132 Having said that, powers of attorney by their nature exhibit a traditionally financial focus whereas guardianship targets lifestyle and health (that is, personal) decisions.133 Yet in the territories and Queensland statute explicitly envisages enduring powers of attorney (in the Northern Territory, advance personal plans, as from 17 March 2014)134 can extend to personal decisions, leaving statute to address the relevant interaction.135 Statute elsewhere, with the exception of the Northern Territory and South Australia, provides for the appointment of ‘enduring guardians’ by an individual at a time of mental capacity, invested with the power to make personal decisions if the principal becomes incapable.136 However, as from 17 March 2014 statute in the Northern Territory makes equivalent provision, through the appointment of ‘decisionmakers’ under the guise of advance personal plans.137 And, from 1 July 2014, statute in South Australia replaced enduring guardians138 [page 54] with an advance care directive regime.139 Once the Powers of Attorney Act 2014 (Vic) enters into force, Victoria will likewise supplant the former enduring guardian, but under the umbrella of an enduring power of attorney capable of extending to personal (including certain health) matters.140 2.32 In all jurisdictions the relevant court, tribunal or board may appoint an administrator (or the like) to conduct the financial affairs of a person lacking mental capacity,141 in which case the relationship between an operative enduring power of attorney and the appointment of an administrator must be determined.142

1.

See 1.2.

2.

King v Bankerd (1985) 492 A 2d 608 at 611 (Md Ct App). See also Ashby v Guillot (1991) 593 So 2d 668 at 670 (La Ct App) (‘A power of attorney is a contract’); Maenhoudt v Bank (2005) 115 P 3d 157 at 161 (Kan Ct App) (‘The [power of attorney] is a contract between [the principal] and [her attorney in fact]’).

3.

Alerus Financial NA v Western State Bank (2008) 750 NW 2d 412 at 419 (ND).

4.

Oil Well Core Drilling Co v Barnhart (1937) 67 P 2d 696 at 697 (Cal Ct App).

5.

Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [105] per Hammerschlag J (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on the power of attorney issue).

6.

See, for example, MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [243] per Graesser J (QB) (‘A power of attorney is a unique power that embodies the law of agency, borrows from the law of contract, and adopts the law of fiduciary obligations’).

7.

See Dal Pont, Agency, [4.14]–[4.20].

8.

See 8.4.

9.

See 8.5–8.7.

10. See 8.8–8.10. 11. Abbott v UDC Finance Ltd [1992] 1 NZLR 405 at 414 per McKay J (CA). 12. Affluent Freight Sdn Bhd v Sumathi A/P Appukuttan Pillai [2001] MLJU 635 at (LN) (HC). 13. See 11.10. 14. As to irrevocable powers of attorney see 1.30–1.34, 11.7–11.9. 15. See 4.34. 16. See 4.35. 17. Lincolne v Williams (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 at [9] per Blow J. 18. See, for example, Bank of Africa Ltd v Cohen [1909] 2 Ch 129. 19. (2009) 33 So 3d 1191 (Ala). 20. Smith v Wachovia Bank NA (2009) 33 So 3d 1191 at 1199 (emphasis in original). 21. Smith v Wachovia Bank NA (2009) 33 So 3d 1191 at 1200. 22. Contra Smith v Wachovia Bank NA (2009) 33 So 3d 1191 at 1201–2 per Murdock J dissenting (who maintained that it is the law, not the bargaining and exchanges between the parties, that made the wife’s obligations under the power of attorney contractual in nature). 23. OHM Pacific Sdn Bhd v Ng Hwee Cheng Doreen [1994] 2 SLR(R) 633 at 638 per LP Thean JA (CA). But this does not mean that positive duties cannot be sourced outside of contract: see 8.4, 8.20–8.22. 24. Chatenay v Brazilian Submarine Telegraph Co Ltd [1891] 1 QB 79 at 85. See also Sinfra Aktiengesellschaft v Sinfra Ltd [1939] 2 All ER 675 at 682 per Lewis J (‘A power of attorney is not a contract’); Lincolne v Williams (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 at [6] per Blow J (endorsing Lindley LJ’s view in Chatenay). 25. See 4.4.

26. See 3.8–3.11. 27. See 6.6–6.24. 28. See 3.8–3.18. 29. See 6.50–6.52. 30. As to the fiduciary duties of attorneys see 8.31–8.50. 31. See, for example, Alexopoulos v Dakouras (1970) 179 NW 2d 836 at 841 (Wis). As to the attorneys’ duty to account see 8.55–8.64. 32. See, for example, MacDonald v Taubner (2010) 21 Alta LR (5th) 59 (QB). See further 8.27. 33. The Margaret Mitchell (1858) Sw 382 at 400; 166 ER 1174 at 1184 per Dr Lushington, cited with approval in Williams v Turner [2009] 1 Qd R 296; [2008] QSC 327; BC200811148 at [23] per Wilson J. 34. Schock v Nash (1999) 732 A 2d 217 at 225 (Del). 35. Banton v Banton (1998) 164 DLR (4th) 176 at 239 per Cullity J (SC(Ont)). See also Re Ericksen Estate (2008) 98 Alta LR (4th) 161 at [19] per Marceau J. 36. Banton v Banton (1998) 164 DLR (4th) 176 at 239 per Cullity J (SC(Ont)). 37. Richardson Estate v Mew (2009) 310 DLR (4th) 21 at [51] per Gillese JA (per the CA(Ont)). See also Budgell v Hartley Estate (2008) 168 ACWS (3d) 895 at [27] per Lee SM (QB(Man)) (‘There appears to be a higher duty on an attorney acting under an enduring power of attorney following the event of the donor’s incapacity. The attorney is no longer acting strictly as agent but as trustee’). 38. See 8.24 (standard of care), 8.31–8.50 (fiduciary duties), 8.51–8.54 (duty to avoid mixing), 8.55–8.64 (duty to account), 8.66–8.73 (duty not to delegate). 39. Powers of Attorney Act 2000 (Tas) s 32(1)(a). 40. TLRC, p 16. 41. As to the nature of advance personal plans see 1.44. 42. Advance Personal Planning Act 2013 (NT) s 31(1). 43. See, for example, Enduring Powers of Attorney Act 1990 (Nfld & Lab) s 6(2) (for background to this see NLRC, pp 63–70). 44. See, for example, ALRI (DP), pp 69–70. That is not to suggest that attorneys, under enduring powers in particular, can blithely ignore the investment of the principal’s property: see 8.59–8.61. 45. See, for example, ALRC, pp 15–16 (which favoured a statutory list of the principal obligations of attorneys rather than duties aligned with trusteeship ‘modified by omitting some of the legislative requirements’, fearing that the difficulty of communicating the latter to laypersons ‘is too great’: p 16); WCLRA, p 28 (noting that ‘[t]he trust document which establishes the duties of the trustee automatically creates distance between the trustee and the settlor’ and that although ‘[s]ome of the duties of attorneys are trust-like … attorneys usually have a more personal relationship with the [principal]’). 46. As to attorneys’ duty to account see 8.55–8.64. 47. OHM Pacific Sdn Bhd v Ng Hwee Cheng Doreen [1994] 2 SLR(R) 633 at 638 per LP Thean JA (CA) (‘The donee of a power of attorney is not in the position of a trustee’); Parker v Higgins [2012] NSWSC 1516; BC201209588 at [55] per Slattery J; Advance Personal Planning Act 2013

(NT) s 31 (note). 48. See Dal Pont, Equity & Trusts, [38.65]–[38.95]. 49. Owners – Strata Plan No 53441 v Walter Construction Group Ltd (2004) 12 BPR 22,639; [2004] NSWCA 429; BC200408103 at [46] per Spigelman CJ, with whom Ipp and McColl JJA concurred. 50. See 11.10. 51. See Dal Pont, Equity & Trusts, [17.15]. 52. As to attorneys’ duties see 8.3–8.85. 53. Banton v Banton (1998) 164 DLR (4th) 176 at 240 per Cullity J (SC(Ont)). 54. See 4.59, 4.60. 55. Construction Engineering (Aust) Pty Ltd v Hexyl Pty Ltd (1985) 155 CLR 541 at 546; BC8501129 (FC). 56. See 9.7–9.9. 57. (1982) 142 DLR (3d) 729 at 733 (SC(NWT)) (emphasis in original). 58. As to an attorney’s right to indemnity see 8.90, 8.91. 59. See 11.10–11.20. 60. See 11.25–11.30 (insanity), 11.34, 11.35 (death). 61. As to the termination of trusts see Dal Pont, Equity & Trusts, [25.120]–[25.165]. 62. Miller v Cameron (1936) 54 CLR 572 at 580–1; BC3600025 per Dixon J. See further Dal Pont, Equity & Trusts, [21.65]–[21.80] (appointment), [21.105]–[21.130] (removal). 63. Trustee Act 1925 (ACT) s 70; Trustee Act 1925 (NSW) s 70; Trustee Act 1893 (NT) s 27; Trusts Act 1973 (Qld) s 80; Trustee Act 1936 (SA) s 36; Trustee Act 1898 (Tas) s 32; Trustee Act 1958 (Vic) s 48; Trustees Act 1962 (WA) s 77. 64. See generally Chapter 10. 65. See, for example, Pecore v Pecore [2007] 1 SCR 795 at [67], [68] per Rothstein J, at [100] per Abella J. As to the presumption of resulting trust and its rebuttal generally see Dal Pont, Equity & Trusts, Ch 26. 66. See 8.37. 67. Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1 at 30; BC3700030 per Dixon J; Walker v Corboy (1990) 19 NSWLR 382 at 388–9 per Clarke JA, at 396–7 per Meagher JA. 68. See Dal Pont, Equity & Trusts, [22.40]–[22.65]. 69. Trustee Act 1925 (ACT) s 53 (refers to an agent); Trustee Act 1925 (NSW) s 53 (refers to an agent); Trusts Act 1973 (Qld) s 54 (includes specific reference to an attorney); Trustee Act 1958 (Vic) s 28 (includes specific reference to an attorney); Trustees Act 1962 (WA) s 53 (includes specific reference to an attorney). 70. Green v Whitehead [1930] 1 Ch 38 at 45 per Eve J. 71. Trustee Act 1925 (ACT) ss 64–68; Trustee Act 1925 (NSW) ss 64–68; Trustee Act 1907 (NT) s 3; Trusts Act 1973 (Qld) s 56; Trustee Act 1936 (SA) s 17; Trustee Act 1898 (Tas) s 25AA; Trustee Act 1958 (Vic) s 30; Trustees Act 1962 (WA) s 54 (where an appointment in good faith and without negligence confers upon the trustee a defence).

72. See 8.31–8.50. 73. See 6.53–6.58. 74. See 5.39. 75. See 11.10. 76. See 2.26–2.29. 77. [1937] 1 Ch 423 at 428. 78. As to gifts in contemplation of death see G E Dal Pont and K F Mackie, Law of Succession, LexisNexis Butterworths, Australia, 2013, [1.15]–[1.23]. 79. Re Craven’s Estate [1937] 1 Ch 423 at 430. 80. Re Chirnside [1956] VLR 295 at 304 per Dean J; Porteous v Rinehart (1998) 19 WAR 495 at 502; BC9804413 per White J. As to the duties of executors generally see G E Dal Pont and K F Mackie, Law of Succession, LexisNexis Butterworths, Australia, 2013, Ch 12. 81. Barbulov v Huston (2010) 319 DLR (4th) 543 at [22] per Newbould J (SCJ(Ont)). 82. MacKenzie v MacKenzie (1998) 16 FRNZ 487 at 492–3 per Hammond J; Re Stewart [2003] 1 NZLR 809 at 815–16 per Laurenson J (HC) (revd on appeal but not on this point: Re Stewart [2004] 1 NZLR 354 (CA)); Johnson v Trotter (2006) 12 BPR 23,339; [2006] NSWSC 67; BC200600661 at [21]–[23] per White J. 83. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [232] per Graesser J (QB). As to attorneys’ duty to account see 8.55–8.64. As to executors’ duty to account see G E Dal Pont and K F Mackie, Law of Succession, LexisNexis Butterworths, Australia, 2013, [12.30]–[12.42]. 84. Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694; Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306; BC9002922. 85. See 1.30–1.34, 11.7–11.9. 86. Butterworths Australian Legal Dictionary, P E Nygh and P Butt (eds), Butterworths, Sydney, 1997, p 948. 87. Cousins v International Brick Company Ltd [1931] 2 Ch 90 at 95 per Luxmoore J (at first instance), at 102 per Lawrence LJ (on appeal). 88. Cousins v International Brick Company Ltd [1931] 2 Ch 90 at 100 per Lord Hanworth MR. 89. Re English, Scottish and Australian Chartered Bank [1893] 3 Ch 385 at 409 per Lindley LJ. 90. See, for example, Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 (where the company constitution recognised a shareholder’s right to vote by a proxy and that the proxy could be given by means of a power of attorney). 91. Monmouthshire Canal Navigation Co v Kendall (1821) 4 B & Ald 453 at 458; 106 ER 1003 at 1005 (in argument) (the word ‘proxy’ is an abbreviation of the word ‘procuracy’); Sheldon v Phillips (1894) 15 LR (NSW) Eq 98 at 103 per Owen CJ in Eq; Totally & Permanently Incapacitated Veterans’ Association of NSW Ltd v Gadd (1998) 28 ACSR 549 at 557; BC9804347 per Young J (SC(NSW)). 92. (1894) 15 LR (NSW) Eq 98 at 103–4. 93. Sheldon v Phillips (1894) 15 LR (NSW) Eq 98 at 104. 94. Sheldon v Phillips (1894) 15 LR (NSW) Eq 98 at 103 per Owen CJ in Eq. Cf the form required for

proxy voting by shareholders at company meetings: see Corporations Act 2001 (Cth) s 250A. 95. See 4.1–4.35. 96. Harben v Phillips (1883) 23 Ch D 14 at 35–6 per Bowen LJ; Cousins v International Brick Company Ltd [1931] 2 Ch 90 at 100 per Lord Hanworth MR; Totally & Permanently Incapacitated Veterans’ Association of NSW Ltd v Gadd (1998) 28 ACSR 549 at 557; BC9804347 per Young J. 97. Corporations Act 2001 (Cth) s 249X(1) (‘A member of a company who is entitled to attend and cast a vote at a meeting of the company’s members may appoint a person as the member’s proxy to attend and vote for the member at the meeting’). The rights of proxies in this context are catalogued in s 249Y. 98. New South Wales Henry George Foundation v Booth (2002) 54 NSWLR 433; [2002] NSWSC 245; BC200201438 at [20]–[26] per Gzell J; Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [24], [25] per Palmer J; Quest Rose Hill Pty Ltd v White [2010] NSWSC 939; BC201006067 at [109] per Ward J. 99. Webb v McCracken (1906) 3 CLR 1018 at 1023; BC0600058 per Griffith CJ. As to the legal concept of a ‘power’ in private law generally see G Thomas, Thomas on Powers, 2nd ed, OUP, Oxford, 2012, Ch 1. 100. Pedley-Smith v Pedley-Smith (1953) 88 CLR 177 at 190; BC5300320 (FC); Re the Nicholas Trust (1986) 70 ACTR 10 at 16–17 per Kelly J. Cf Re Dobson’s Settlement [1946] VLR 83 at 96–7 per O’Bryan J. 101. Tatham v Huxtable (1950) 81 CLR 639 at 656; BC5000510 per Kitto J; Trustees Executors & Agency Co Ltd v Margottini [1960] VR 417 at 420; National Trustees Executors & Agency Co of Australasia Ltd v Trainor [1974] VR 49 at 56–7 per Pape J; Gregory v Hudson (1997) 41 NSWLR 573 at 578–9; BC9701111 per Young J (affd Gregory v Hudson (1998) 45 NSWLR 300; BC9805959). 102. See 8.31–8.50. 103. See 6.22–6.24. 104. Re Skeats’ Settlement (1889) 42 Ch D 522 at 526–7 per Kay J; Re Burton (1994) 126 ALR 557 at 559; BC9405738 per Davies J. 105. Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 26; BC6300080 per Windeyer J. 106. Torkington v Magee [1920] 2 KB 427 at 430 per Channell J (noting that the term ‘chose in action’ describes ‘all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession’). 107. Civil Law (Property) Act 2006 (ACT) s 205; Conveyancing Act 1919 (NSW) s 12; Law of Property Act 2000 (NT) s 182; Property Law Act 1974 (Qld) s 199; Law of Property Act 1936 (SA) s 15; Conveyancing and Law of Property Act 1884 (Tas) s 86; Property Law Act 1958 (Vic) s 134; Property Law Act 1969 (WA) s 20. 108. See Dal Pont, Equity & Trusts, [3.40]–[3.115]. 109. Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 158, 159 per Griffith CJ. 110. Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 167 per Higgins J. 111. See 11.10.

112. See Dal Pont, Equity & Trusts, [3.120]–[3.150]. 113. Advanced Magnetics Inc v Bayfront Partners Inc (1997) 106 F 3d 11 at 18 (2nd Cir) (‘The grant of a power of attorney, however, is not the equivalent of an assignment of ownership; and, standing alone, a power of attorney does not enable the grantee to bring suit in his own name’); W R Huff Asset Management Co LLC v Deloitte & Touche LLP (2008) 549 F 3d 100 at 108 (2nd Cir). 114. See, for example, Advanced Magnetics Inc v Bayfront Partners Inc (1997) 106 F 3d 11 at 17–19 (2nd Cir); W R Huff Asset Management Co LLC v Deloitte & Touche LLP (2008) 549 F 3d 100 at 109–11 (2nd Cir). 115. See Dal Pont, Agency, [23.5]–[23.7]. 116. See 1.31–1.33. 117. (1910) 11 CLR 148. 118. (1819) 3 Swans 515; 36 ER 958. 119. Wilkinson v Wilkinson (1819) 3 Swans 515 at 527; 36 ER 958 at 962. 120. Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 159. 121. See Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 160 per Griffith CJ. 122. Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 162. 123. Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 162–3. 124. Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 169. 125. See 1.30–1.34, 11.7–11.9. 126. See Testamentary Guardianship Act 1984 (ACT); Guardianship of Infants Act 1916 (NSW); Guardianship of Infants Act 1972 (NT); Succession Act 1981 (Qld) Pt 5A (testamentary guardians); Guardianship of Infants Act 1940 (SA); Guardianship and Custody of Infants Act 1934 (Tas); Marriage Act 1958 (Vic) Pt VII (see also Children, Youth and Families Act 2005 (Vic) Pts 4.9 (‘protection orders’), 4.10 (‘permanent care orders’)); Family Court Act 1997 (WA) s 71. 127. Clay v Clay (2001) 202 CLR 410; [2001] HCA 9; BC200100262 at [40] (FC) (but rejecting the argument that a guardian equates to a trustee); Tusyn v State of Tasmania (2004) 13 Tas R 51; [2004] TASSC 50; BC200403099 at [10], [11] per Blow J. 128. See 3.32–3.34. 129. See 3.5–3.31. 130. See 11.25–11.27. 131. See 1.25–1.29. 132. See generally B Collier and C Coyne, ‘An Overview of the Relevant Legal Principles’ in B Collier, C Coyne and K Sullivan, Mental Capacity: Powers of Attorney and Advance Health Directives, The Federation Press, Sydney, 2006, pp 20–3. 133. See Guardianship and Management of Property Act 1991 (ACT) s 7; Guardianship Act 1987 (NSW) Pt 3; Adult Guardianship Act 1988 (NT) Pt II (esp s 17) (which explains why s 21A(1) of the Powers of Attorney Act 1980 (NT) states that the appointment of a guardian under the Adult Guardianship Act 1988 for a person who is the principal under an enduring power of attorney does not revoke that power); Guardianship and Administration Act 2000 (Qld) Chs 3, 4 (limiting guardians’ powers to personal matters: see s 33(1)); Guardianship and Administration Act 1993 (SA) Pt 4 Div 2 (esp ss 31, 31A); Guardianship and Administration Act 1995 (Tas) Pt 4 (esp s 25);

Guardianship and Administration Act 1986 (Vic) Pt 4 (esp s 24); Guardianship and Administration Act 1990 (WA) Pt 5 (esp s 45). 134. As to advance personal plans see 1.44. 135. See 1.38 (ACT), 1.45 (NT), 1.48 (Qld). 136. See Guardianship Act 1987 (NSW) Pt 2 (esp s 6A); Advance Personal Planning Act 2013 (NT); Guardianship and Administration Act 1995 (Tas) Pt 5 (esp s 32(5)); Guardianship and Administration Act 1986 (Vic) Pt 4 Div 5A (to be repealed once the Powers of Attorney Act 2014 (Vic) commences operation) (if a decision made by an enduring guardian in the exercise of a power as enduring guardian conflicts with a decision made by an attorney under an enduring power of attorney, the decision of the enduring guardian prevails: Instruments Act 1958 (Vic) s 125F(2)); Guardianship and Administration Act 1990 (WA) Pt 9A (esp s 110F). 137. Advance Personal Planning Act 2013 (NT), as to which see 1.44, 1.45. 138. Under the Guardianship and Administration Act 1993 (SA) Pt 3 (repealed). 139. Advance Care Directives Act 2013 (SA). A parallel regime already existed in Western Australia: Guardianship and Administration Act 1990 (WA) Pt 9B. 140. Powers of Attorney Act 2014 (Vic) s 22(2) (and see definition of ‘personal matters’ in s 3(1)). 141. See Guardianship and Management of Property Act 1991 (ACT) s 8 (managers); Guardianship Act 1987 (NSW) Pt 3A (‘financial management orders’, either to a suitable person or to the NSW Trustee: s 25M); NSW Trustee and Guardian Act 2009 (NSW) Pt 4.3 Div 2 (‘Orders for the Management of Estates of Mental Health Patients’); Aged and Infirm Persons’ Property Act 1979 (NT) (appointment of manager by the Supreme Court); Guardianship and Administration Act 2000 (Qld) Chs 3, 4 (limiting administrators’ powers to financial matters: see s 33(2)); Guardianship and Administration Act 1993 (SA) Pt 4 Div 3 (esp s 39) (administration orders); Aged and Infirm Persons’ Property Act 1940 (SA) (appointment of manager by the Supreme Court); Guardianship and Administration Act 1995 (Tas) Pt 7 (esp s 56); Guardianship and Administration Act 1986 (Vic) Pt 5 (esp s 48); Guardianship and Administration Act 1990 (WA) Pt 6 (estate administration). 142. Guardianship and Management of Property Act 1991 (ACT) s 62 (power of the ACT Civil and Administrative Tribunal vis-à-vis an enduring power of attorney in the event of the appointment of a manager); Powers of Attorney Act 2003 (NSW) ss 37 (Guardianship Tribunal [from 1 January 2014 the Civil and Administrative Tribunal] can make a financial management order upon an application for the review of a power of attorney under s 36: see 10.7, 10.9), 50 (a power of attorney not terminated by the estate of the principal becoming subject to management under the NSW Trustee and Guardian Act 2009 (NSW) (a ‘managed estate’) but instead a power of attorney is suspended while the estate of the principal is a managed estate; however, if the estate of a principal is a managed estate, the Supreme Court may terminate the power of attorney, or order that the power of attorney be subject to such conditions as the court thinks fit: s 50(9)); Powers of Attorney Act 1980 (NT) s 19 (upon the making of a protection order under the Aged and Infirm Persons’ Property Act 1979 (NT), a power is revoked to the extent to which it authorises the attorney to deal with property the subject of the protection order) (see also Adult Guardianship Act 1988 (NT) s 23B, which makes provision for the consequences if the court has made a guardianship order at a time when it was unaware of a pre-existing advance personal plan, as to which see 1.44, 1.45)); Powers of Attorney Act 1998 (Qld) s 70 (principal may exercise power only to the extent authorised by the Queensland Civil and Administrative Tribunal; see also Guardianship and Administration Act 2000 (Qld) ss 22, 23); Powers of Attorney and Agency Act 1984 (SA) s 10 (where the administration of the estate of the principal under an enduring power of attorney is vested in a manager under the Aged and Infirm Persons’ Property Act 1940 (SA), the

attorney is accountable to the manager as if the manager were the principal, and the manager has the same power to vary or revoke the power as the principal would have had were he or she competent and not incapacitated); Guardianship and Administration Act 1995 (Tas) s 53 (existing valid enduring power of attorney renders the Guardianship and Administration Board incompetent to make an administration order in respect of that part of the principal’s estate subject to the power except in the case of an emergency order under Pt 8); Powers of Attorney Act 2000 (Tas) s 31(6) (existing guardianship order prevails over a subsequent enduring power of attorney regarding the relevant estate); Instruments Act 1958 (Vic) s 125G (attorney may exercise power under the enduring power of attorney only to the extent authorised by the Victorian Civil and Administrative Tribunal; equivalent provision is made in the Powers of Attorney Act 2014 (Vic) s 83(1)), Guardianship and Administration Act 1990 (WA) s 108 (power of State Administrative Tribunal to vary or revoke an enduring power once it appoints an administrator).

[page 55]

PART II

Power Created Once the legal concept of a power of attorney is understood, as explained in Part I, it is necessary to focus on what underscores its creation. Chapter 3 highlights the importance of issues of capacity, for both principal and attorney, as it goes to the validity or otherwise of a power of attorney. Chapter 4 then catalogues the basic elements, specifically the formalities that go to substantiating the creation of a power of attorney. That chapter also discusses, inter alia, the impact of registration of powers of attorney, proof of copies of powers and the effect of joint appointments (of attorneys or principals).

[page 57]

Chapter 3

Capacity of Principal and Attorney Capacity of the principal Mental incapacity of the principal — at general law Inquiry into mental ‘capacity’ Mental capacity in will-making and trust creation Mental capacity to contract Translation to mental capacity to grant power of attorney Relaxation of mental capacity requirement for enduring powers of attorney? The Re K approach to capacity — understanding of ‘nature and effect’ Application of Re K in Australia? Effect of mental incapacity at general law Mental incapacity of the principal — under statute Australian Capital Territory New South Wales Northern Territory Queensland and Victoria Tasmania Capacity related to principal’s age Entity capacity to create power of attorney Companies

3.2 3.5 3.5 3.6 3.7 3.8 3.12 3.14 3.17 3.19 3.24 3.26 3.27 3.29 3.30 3.31 3.32 3.35 3.35

Incorporated associations Unincorporated associations and partnerships Other vitiating factors Non est factum Undue influence Capacity of an attorney At general law Under statute Suitability of an attorney

3.37 3.38 3.39 3.41 3.43 3.46 3.46 3.48 3.50

[page 58] 3.1 When, in private law, the creation of legal rights and obligations pursuant to a legal document is concerned, issues relating to the capacity of the party or parties to the instrument may surface. The validity of a legal transaction is premised on, inter alia, the parties having the legal capacity to enter into, and effect, the transaction. What underscores the issue of capacity is the need for those parties to exercise a true consent to entering into, or effecting, the transactions in question. Consent is an element that lies at the core of private law, and in a transactional environment its absence, at some level or another, may cause a transaction to be void or voidable, depending on the circumstances. It is therefore important to address capacity as an issue in creating powers of attorney, from the perspective of both the principal and the attorney.

Capacity of the principal 3.2 So far as capacity in the context of powers of attorney is concerned, in this chapter the main focus is on the capacity of the principal (or donor) to create a valid power of attorney. The reason for this focus is that, in one

sense, the grant of a power of attorney is unilateral in nature — it is distinguished from the mutuality inherent in contract1 — and so, as regards capacity, it is critical that the principal be possessed with the capacity to grant the power. The foregoing does not mean that the attorney’s capacity is irrelevant — the latter’s role likewise requires the element of capacity, and is addressed later in the chapter2 — but that the first inquiry (and the one most common in the case law) focuses on the capacity of the principal. 3.3 It has been judicially observed, to this end, that the delegation of authority inherent in a power of attorney ‘must be legally possible and within the capacity of the donor to give’.3 There are various nuances stemming from this remark. One is that the principal must have the mental capacity to create a power of attorney. Here the inquiry relates to whether or not, by reason of some cognitive impairment, the principal’s consent to granting the power of attorney has been vitiated. The case law on powers of attorney reveals that it is this form of incapacity that has been most commonly in issue, and the uncertainty surrounding the appropriate test of capacity at general law has led some parliaments to legislatively prescribe the relevant inquiry. The first part of the chapter below, dealing with mental capacity at general law, must therefore be read subject to any statutory modification, discussed immediately thereafter. A second aspect of incapacity relates to persons whom the law deems to be incapable to effect a particular dealing. An example centres on persons who are under the age of majority. A third aspect relates to artificial persons, namely bodies corporate, and any restrictions on the capacity of those bodies to enter into a form of transaction. Each of these is addressed, in its application to powers of attorney, during the course of this chapter.4 3.4 To the extent that true consent of the principal is the basic element of capacity, it is likewise legitimate to address other vitiating factors grounded in a lack of consent. On occasion, for instance, it is argued that a power of attorney should not have effect [page 59] because it is vitiated pursuant to the doctrine of non est factum or as a result of undue influence. Each is mentioned later in the chapter.5

Mental incapacity of the principal — at general law Inquiry into mental ‘capacity’ 3.5 The concept of ‘capacity’, at law, has an element of fluidity about it. There are at least two dimensions to this fluidity. The first is that there may be no clear dividing line between legal capacity and legal incapacity. Leaving aside persons who are mentally incapable from birth, or whose mental incapacity is triggered by an accident or sudden medical condition, a loss of capacity is ordinarily a more gradual experience. The moment at which such a person loses legal capacity is therefore likely to be difficult to identify with precision; indeed, it is not uncommon for incapacity and capacity to coexist at different times, including within the one day, in the same person. The point is relevant not only to the creation of a valid power of attorney, which is addressed below, but also to the event that may trigger the revocation of that power or the moment some enduring powers of attorney take effect, discussed elsewhere.6 The second dimension is that the legal standard of incapacity can vary according to the nature of the transaction in question. The law, it seems, envisages different degrees of mental capacity as required for different transactions, although this may reflect no more than the need to assess mental capacity relative to the nature, terms, purpose and context of the particular transaction.7 As explained by the High Court in Gibbons v Wright:8 The law does not prescribe any fixed standard of sanity as requisite for the validity of all transactions. It requires, in relation to each particular matter or piece of business transacted, that each party shall have such soundness of mind as to be capable of understanding the general nature of what he is doing by his participation … [T]he mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is explained.

Their Honours endorsed the remark of Hodson LJ in Estate of Park9 that ‘one cannot consider soundness of mind in the air, so to speak, but only in relation to the facts and subject-matter of the particular case’. Stemming from the foregoing, it cannot be assumed that some degree of mental incapacity will necessarily endanger the validity of every transaction. It is established, for example, that ‘a mind may be rendered partially unsound by the existence

of delusions or persecution mania or other aberration, and yet be capable of the management and disposition of property’.10

Mental capacity in will-making and trust creation 3.6 The highest degree of mental capacity is that required for the making of a valid will. The reasons stem from a combination of the following factors: the value the law [page 60] places on freedom of testation; that via a will the testator bequeaths his or her entire estate; that, once the will takes effect, the testator cannot monitor or control the disposition of his or her property; and that the disposition is a voluntary one (that is, it is not a transaction for consideration). The test of mental capacity here is found in the classic words of Cockburn CJ in Banks v Goodfellow:11 It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties — that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.

In so phrasing the test of capacity, the courts have endeavoured to reconcile acceptance of a testator’s right to dispose of property as he or she pleases with a desire to protect the interests of those whom society has accepted as having a moral claim on a testator’s bounty.12 For this reason, it is not enough that the testator knows and understands how he or she is leaving the property when he or she executes the will; the testator must also possess sufficient capacity to appreciate what that property is and recognise the persons who have a moral claim upon him or her, and a capacity to exercise a balanced judgment as to such claims. A New South Wales judge has opined that ‘there is much to be said for applying the same standard to a voluntary settlement by a settlor of his own property’.13 The creation of a trust inter vivos certainly exhibits some

similarities to a will; it likewise involves a disposition of the settlor’s property (thus attracting the freedom of disposition tenet of the law), does not usually entitle the settlor to revoke the trust (though it may empower the settlor to have some control over its management), and is often unsupported by consideration moving either from the trustee or the beneficiaries.

Mental capacity to contract 3.7 There are also parallels with a contract for the disposition of property; the law recognises that, generally speaking, persons may dispose of their property as they deem fit, and its disposition under contract ordinarily dictates that the disponer cedes any interest in, or entitlement to, the property once it is disposed. However, as consideration lies at the core of contract, the element of voluntariness that may characterise wills and trusts is lacking. So in the leading High Court case in the area, Gibbons v Wright,14 which involved a dispute arising out of the execution of a deed purporting to sever a joint tenancy, their Honours contrasted a ‘soundness of mind as to be capable of understanding the general nature of what he is doing by his participation’15 with an incapacity to understand ‘the nature of the acts or transactions which the particular power of attorney purports to authorise’.16 In other words, in contract the relevant standard of capacity is a ‘capacity to understand the general nature of the transaction, not merely the direct effect of [page 61] the document itself, but the general nature of the transaction that is designed to be achieved by the document’.17 This is a more lenient criterion than that prescribed in Banks v Goodfellow.

Translation to mental capacity to grant power of attorney 3.8

The perceived contractual link between contracts and powers of

attorney, though often inaccurate,18 has led some judges to align powers of attorney with contracts for the purposes of inquiring into capacity.19 The reasoning is that a person who lacks mental capacity to contract likewise lacks the capacity to appoint an agent, including an attorney, for that purpose.20 Yet powers of attorney are, like wills and (traditionally) many trusts, in the main unsupported by consideration — they ordinarily represent voluntary transanctions. And although they do not involve a direct disposition of property from principal to attorney, or even necessarily to third parties through the attorney, they often vest in attorneys significant powers to affect their principal’s financial and/or legal affairs, especially in the case of general powers of attorney.21 And in the case of enduring powers of attorney,22 like the testator (or the settlor in some trusts), once the principal loses mental capacity he or she cannot superintend the exercise of the power.23 3.9 There are reasons, accordingly, to make proof of a principal’s capacity more exacting than in the case of agencies, or for contracts, generally — that is, to require more than a capacity to know and understand the purpose of the transaction. But the law, it seems, goes the other way. Barrett J in Szozda v Szozda, in distinguishing testamentary capacity from capacity to grant a power of attorney, made the following observations:24 It seems to me that different considerations attend a decision to grant a general power of attorney without reference to any foreshadowed transaction and as a means of catering for the possibility that the donor might be unavailable or unable to act at some undefined future time when action is needed. The donor is prescribing no dispositions. He or she has no need to appreciate the extent and nature of moral claims and the extent and nature of the property available to meet them. Because no particular transaction is in contemplation, there is no specific dealing to be assessed as an indispensable concomitant of the giving of the power of attorney. The only matter that can sensibly become the subject of assessment is the creation of the power of attorney itself, for use as and when

[page 62] the need may arise in the future. It is the nature of that act (by which I mean to include its ramifications and consequences) that the donor must sufficiently understand.

In so remarking, his Honour purported to follow Gibbons v Wright,25 though their Honours in that case conceded that the ‘nature of the transaction’ may ‘in some cases … mean the effect of a wider transaction which the instrument is a means of carrying out’.26

Yet years earlier in Ranclaud v Cobban27 Young J more closely aligned the capacity inquiry for powers of attorney to that for wills. In a case involving an elderly principal, who had within less than a year executed six powers of attorney, each one replacing the former, his Honour remarked that, at least when a general power was concerned, ‘one would have to be sure not only that she understood that she was authorising someone to look after her affairs but also what sort of things the attorney could do without further reference to her’.28 This suggests a test directed at understanding of both the nature and effect of the dealing. Forrest J in Ghosn v Principle Focus Pty Ltd (No 2),29 in endorsing ‘the Ranclaud test’, emphasised that ‘[e]ach instrument and its execution is to be examined in accordance with the accompanying circumstances’. The ‘nature and effect’ test also has judicial adherents in the United States.30 At the same time, though, Barrett J in Szozda v Szozda saw Gibbons as aligned with Young J’s approach in Ranclaud. More recently, Lindsay J favoured a testamentary standard of capacity for enduring powers that authorise an attorney to dispose of the principal’s property to or for the benefit of the attorney or third parties, but a lesser standard in the case of a power more limited in its terms or effect.31 The degree of uncertainty as to the relevant capacity test may, as Lindsay J inferred, ultimately rest on a contextual inquiry in each case. 3.10 In any event, occasions may arise where the tying of a power of attorney to another instrument may incline the courts to adopt a more onerous capacity requirement. This occurred in Crago v McIntyre,32 involving a power of attorney given in aid of a deed of trust, designed to bring about or facilitate a transfer of the principal’s assets to his trustee under the deed. Holland J conceded that if the relevant test was that defined in Gibbons — that is, a capacity to know and understand the purpose of the transaction — the power of attorney, on his Honour’s findings as to the condition of the principal’s mind, was valid. But Holland J ruled that, as the power of attorney was a means of carrying out the trust, ‘[i]t would … be unreasonable … to apply a [page 63] different criterion of mental capacity to the power of attorney from that to be

applied to the deed of [trust]’.33 Applying the more stringent test of capacity led his Honour to conclude that, as the principal was at the time of the transaction incapable of making a sound judgment as to his own best interests or the interests of those to whom, in the future, he might owe obligations, this could raise grounds to impeach the validity of the power.34 3.11 Investigations into a principal’s (in)capacity are obviated where there has been a declaration at law that the principal is incapable.35 For instance, a principal who is a ‘protected person’ under relevant mental health legislation prima facie lacks the capacity to appoint an attorney for any of his or her affairs. Over a century ago the English Court of Appeal in Re Walker36 held that a person found to be a lunatic by inquisition cannot, for such time as the inquisition remains in force, even during a lucid interval, execute a valid deed dealing with or disposing of his or her property. This was endorsed by the High Court in Gibbons,37 reasoning that such a person is held incompetent to dispose of his or her property, not due to a lack of understanding — he or she remains incompetent even in a lucid interval — but because the control, custody and power of disposition of his or her property has passed to the Crown. In line with the material discussed below,38 any attempt by a protected person to deal with his or her property via a power of attorney is treated as null and void.39

Relaxation of mental capacity requirement for enduring powers of attorney? 3.12 The preceding discussion emanated chiefly from case law dealing with non-enduring powers of attorney. The mental capacity of a principal to create an enduring power of attorney, which is a creature entirely of statute,40 can present additional challenges. These stem from the fact that enduring powers of attorney, depending on their terms and the relevant legislation, are designed to either commence operation on the mental incapacity of the principal or otherwise continue in operation once the principal has become incapable.41 It is not unusual, to this end, for a principal to seek to create an enduring power of attorney at a time when the first signs of mental incapacity are surfacing. The value of enduring powers arguably piques in these cases; if valid, they avoid the time and cost involved in an application for

guardianship (or the like). These considerations weigh in favour of a less stringent mental capacity requirement. Yet because an enduring power the attorney’s authority operates at a time when the principal lacks mental capacity, the level of trust placed by the principal in the attorney is correspondingly increased. After all, a principal who has lost mental [page 64] capacity cannot exercise an effective degree of supervision and control over the exercise of the enduring power. This in turn calls for a more stringent approach to assessing mental capacity. 3.13 The foregoing considerations produce diametrically opposed pressures on the issue of mental capacity. As enduring powers of attorney are creatures of statute, the legislature carries the responsibility of setting appropriate controls over the exercise of authority by the attorney. It is open, for instance, to the legislature to prescribe procedures for certifying mental capacity in the case of enduring powers, or more simply to state the relevant threshold. Moreover, the statutory controls imposed over an attorney may, according to Hoffmann J in Re K (Enduring Powers of Attorney) ,42 justify greater leniency in approaching the mental capacity threshold, at least in the absence of any statutory prescription to the contrary.

The Re K approach to capacity — understanding of ‘nature and effect’ 3.14 The issue in Re K was whether an enduring power of attorney should be registered under the (since superseded) Enduring Powers of Attorney Act 1985 (UK) with a view to its exercise in future notwithstanding the principal’s loss of mental capacity.43 Hoffmann J accepted that a principal who is unable to exercise certain powers can confer them upon someone else by an appropriate juristic act — via an enduring power of attorney — stating that ‘[t]he validity of that act depends on whether she understood its nature and effect and not on whether she would hypothetically have been able to

perform all the acts which it authorised’.44 The reasoning for this conclusion was expressed as follows:45 I think that my conclusions are in accordance with what appears to be the general policy of the Act. In practice it is likely that many enduring powers will be executed when symptoms of mental incapacity have begun to manifest themselves. These symptoms may result in the donor being mentally incapable in the statutory sense that she is unable on a regular basis to manage her property and affairs. But, as in the case of Mrs F [the principal], she may execute the power with full understanding and with the intention of taking advantage of the Act to have her affairs managed by an attorney of her choice rather than having them put in the hands of the Court of Protection. I can think of no reason of policy why this intention should be frustrated.

Supporting this policy was that, unlike a gift, settlement or will, the power does not amount to an outright disposition of assets, but is fiduciary, and under the English statute was further restricted as to benefits to the attorney.46 The attorney’s statutory obligation to register47 or run the risk that exercise of the power would be invalidated,48 [page 65] served as additional protection that the power would be brought to the attention of the court and the relatives to whom notice must be given. The application for registration gave the court an opportunity to consider both the circumstances surrounding the execution of the power and the attorney’s suitability.49 After registration, moreover, the court retained supervisory powers.50 It followed, said his Lordship, that ‘[t]he exercise of the power is … hedged about on all sides with statutory protection for the donor’, thereby obviating the need to impose too high a standard of mental capacity for its valid execution.51 3.15 What the judgment of Hoffmann J in Re K suggests is that the beneficial purpose in the law recognising, via statute, the validity of enduring powers of attorney justifies a more yielding approach to mental capacity than may otherwise be assumed, and that pressure to intensify the mental capacity threshold is counterbalanced by the presence of various statutory controls over both the appointment of an attorney and the exercise of that person’s authority. Re K has been endorsed in New Zealand, the Family Court in Re ‘Tony’ reasoning as follows:52 The purpose in giving an enduring power of attorney is of course to ensure that in the event of

the mental incapacity of the donor … the attorney’s functions will not be terminated … It is therefore logical to suppose that in enacting Part IX [of the Protection of Personal and Property Rights Act 1988 (NZ), which addresses enduring powers of attorney] the legislature must have contemplated that the facility would be used by those who wished someone else to handle their affairs when they were themselves incapable of doing so. On that footing, the capacity required at the time of giving an enduring power of attorney is the capacity to appreciate the consequences of doing so rather than the capacity to manage the very affairs that are being placed in the charge of the attorney.

Judge Inglis QC doubted whether the principal (‘Tony’) was capable of managing property affairs of much greater complexity than basic day-to-day matters. In executing the enduring power of attorney, though, Tony was recognising that the management of his property affairs ought to be placed in the hands of someone capable of managing them for him. The evidence did not reveal that the decision to delegate the management of his property affairs, as opposed to personally managing those affairs, fell outside Tony’s mental capacity. After all, it revealed that, when Tony executed the enduring power of attorney, he had the ‘capacity to understand the broad essentials of an enduring power of attorney, including the understanding that he was placing his property in safe hands’.53 3.16 Conversely, where the statutory controls over the appointment and/or exercise of authority by an attorney under an enduring power are less extensive, there is logic in greater stringency in approaching the issue of mental capacity. The British Columbia Court of Appeal addressed the point in Egli (Committee of) v Egli.54 The English statutory regime, according to Hall JA in delivering the judgment of the court, contained more safeguards than the equivalent British Columbia statute. Under the latter, the power could continue indefinitely, and terminate only when a committee was appointed, making the possibility of abuse by an attorney greater [page 66] than seemed possible under the English legislation.55 His Honour was thus cautious in applying Re K in British Columbia, ruling that although the mental capacity required was not necessarily that of testamentary capacity, the principal ‘must have a general appreciation of the enabling power he or she is bestowing upon the [attorney]’ and ‘must be cognizant of the

circumstance that the [attorney] is being granted a broad power to deal with the [principal’s] property’.56

Application of Re K in Australia? 3.17 Australian authority dealing with capacity to create enduring powers is limited. To the extent that Young J in Ranclaud v Cabban57 and Forrest J in Ghosn v Principle Focus Pty Ltd (No 2),58 neither involving an enduring power, envisaged an inquiry phrased by reference to the principal’s understanding of the ‘nature and effect’ of the power, there is a parallel with Re K. In Szozda v Szozda,59 involving an enduring power, Barrett J endorsed the Re K approach, although Lindsay J in Scott v Scott,60 also involving an enduring power, was less categorical. At the same time, in Gibbons v Wright61 the High Court limited the inquiry to an understanding of the ‘nature’ of the dealing, which appears a less stringent test again in cases involving non-enduring powers. Complicating this is that the test in Ranclaud appears to incorporate into the test of initial incapacity the criteria for testing the lapsing of a power, and in this sense is more stringent than the one propounded in Re K.62 Against this uncertainty, which is hardly unique to Australia,63 those evaluating the capacity of a putative principal to a power of attorney, whether or not enduring, cannot rest assured in his or her apparent understanding of the nature of the document, without also inquiring into his or her understanding of its effect.64 3.18 The foregoing assumes that the relevant Australian statute does not expressly stipulate its own test of mental capacity; in some jurisdictions it does.65 Incursions of this kind — which even aside from the above uncertainty may dictate the unfortunate upshot that standards of capacity vary between jurisdictions66 — can be seen against the backdrop of Hoffmann J’s interpretation in Re K of the phrase ‘understanding the [page 67] nature and effect’ of the enduring power, as this commonly aligns with the statutory language. His Lordship made the following observations in this context:67

I should say something about what is meant by understanding the nature and effect of the power. What degree of understanding is involved? Plainly one cannot expect that the donor should have been able to pass an examination on the provisions of the Act. At the other extreme, I do not think that it would be sufficient if he realised only that it gave [the attorney] power to look after his property. [Amicus curiae] helpfully summarised the matters which the donor should have understood in order that he can be said to have understood the nature and effect of the power. [1] (if such be the terms of the power) that the attorney will be able to assume complete authority over the donor’s affairs; [2] (if such be the terms of the power) that the attorney will in general be able to do anything with the donor’s property which he himself could have done; [3] that the authority will continue if the donor should be or become mentally incapable; [4] that if he should be or become mentally incapable, the power will be irrevocable without confirmation by the court.

Barrett J endorsed this four-pronged approach for application in New South Wales in Szozda.68 And although it did not necessarily represent the salient points of the relevant New Zealand statute, it has been endorsed in that jurisdiction as expressing ‘in general terms what the donor of an enduring power of attorney needs to understand’.69 And in Dubois v Wilcosh70 the Manitoba Court of Queen’s Bench viewed the statutory provision that ‘[a]n enduring power of attorney is void if at the time of its execution the donor is mentally incapable of understanding the nature and effect of the document’71 as a codification of the common law test discussed in Re K.

Effect of mental incapacity at general law 3.19 At general law, an instrument conveying property for consideration is not void, only voidable, when made by a person (A) who lacks mental capacity (except where [page 68] its subject matter is necessaries as understood by the law, in which case it may be valid).72 As explained by the High Court in Gibbons v Wright:73 … we ought to regard it as settled law that an instrument of conveyance executed by a person incapable of understanding its effect, in the sense of its general purport, is not on that account void, though in the circumstances it may be voidable by the conveyor or his representatives.

It follows that, unless and until A (or A’s representative) elects to avoid it, the instrument in question is valid. It also dictates that the instrument may become binding if A’s subsequent conduct (including A’s inaction) serves to preclude A from denying its validity.74 An inter vivos voluntary settlement should be viewed the same way, according to Holland J in Crago v McIntyre,75 leading his Honour to preclude the principal relying on his incapacity due to, inter alia, his delay and acquiescence in seeking to have the settlement set aside. 3.20 So far as powers of attorney infected by the principal’s incapacity are concerned, however, it is clear that the power in question is void rather than voidable. The point has been established at High Court level for over a century, first in McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2)76 and later in Gibbons77 (although there are judicial views elsewhere to the contrary).78 Accordingly, if a principal lacks mental capacity to appoint an attorney, ‘the power of attorney is inefficacious as a source of authority to the [attorney] to act on behalf of the [principal]’.79 Aside from relying on case authority to support this outcome, the court in Gibbons explained the different treatment of powers of attorney in this context as follows:80 The conception of a power of attorney voidable by reason of lack of understanding in the [principal] would not be without its difficulty; it would mean that an authority to bind the [principal] would be retrospectively defeasible, with the result that acts done in exercise of that authority would be rendered void, not upon proof of such circumstances, amounting to the perpetration of a fraud by the other party to the act, as the [principal] would have had to establish if he had done the act himself, but upon proof of circumstances constituting a fraud by the [attorney], whose guilt might not be accompanied by any unfairness at all on the part of the other party.

3.21 The upshot is that, unlike a contract — which binds a mentally incapable person unless he or she can demonstrate that the other party knew or ought to have [page 69] known of the incapacity — a power of attorney granted by an incapable principal does not bind the principal even if the third parties dealing with the attorney lacked awareness of the principal’s incapacity.81 Any alleged unfairness to the attorney or to third parties stemming from this result, except

to the extent that it is addressed by statute,82 has not been perceived by the courts as sufficient to alter the legal rule. Both the attorney and third parties are, so it is reasoned, able to protect their own interests by sufficient vigilance. As explained by Huband J, delivering the judgment of the Manitoba Court of Appeal in Hill Estate v Chevron Standard Ltd:83 There was, and continues to be, good cause to distinguish a power of attorney from a contract. When an incompetent person signs a power of attorney, almost invariably the attorney will know or have the means of knowing of the mental disability. On the other hand, when an incompetent person enters into a contract, the other contracting party may or may not know of the disability, depending upon the particular circumstances. There is a great danger that a person who has been appointed as attorney, knowing the donor of the power to be mentally incompetent, will proceed to plunder the estate through profligate contracts, — unless those dealing with him make their own inquiries. But since a power of attorney conferred by an incompetent person is void ab initio, the responsibility falls upon third parties who are dealing with the attorney to make their own inquiries and satisfy themselves that the donor of the power had the necessary capacity when the power was granted, and that the appointment has not subsequently been terminated. This is a sensible protection for the estate of the donor of the power, yet it does not greatly inconvenience commercial transactions.

3.22 A power of attorney whose creation is vitiated by the principal’s incapacity, in being void ab initio, has essentially the same impact as a power of attorney that has been forged.84 As such, if a power of attorney is void, everything done under it is also void; the law treats all transactions entered into under it as nullities. The Privy Council has observed, to this end, that ‘if the power of attorney is mere waste paper, it is difficult to see how anything which rests on it as the foundation and groundwork of the whole superstructure can be of any validity, whether the transaction is beneficial to the [principal] or not’.85 So, for example, a contract made pursuant to it is also void, and cannot be saved by ratification or acquiescence,86 or any other defences grounded in the action or inaction of the principal. 3.23 The strict ‘void’ rule may, yield to a more flexible approach if the power of attorney is part and parcel of a broader transaction involving an instrument that, were it infected by incapacity, would be voidable. This occurred in Crago v McIntyre,87 discussed above,88 where a power of attorney was given in aid of a deed of trust. Holland J held that, as both the deed of trust and the power of attorney were vitiated by the principal’s incapacity, ‘it would … be unreasonable to hold that, whilst the [page 70]

deed was only voidable, the power of attorney was void, when they were both part and parcel of the same transaction’.89 His Honour treated both as voidable, so that the defences based on the principal’s affirming conduct that succeeded with respect to the deed also succeeded with respect to the power of attorney.

Mental incapacity of the principal — under statute 3.24 Where statute does not prescribe a relevant test of mental (in)capacity, general law notions of capacity are clearly relevant.90 The same applies where the statute phrases the relevant inquiry in terms equivalent to that recognised at general law. Where, however, the applicable statute stipulates a test that ostensibly differs from the general law test, a legislative intention to alter the general law can be assumed, at least to the extent of any inconsistency or any statutory expression of exhaustiveness. For example, the relevant United Kingdom legislation now states that a person lacks capacity in relation to a matter ‘if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain’,91 and then elaborates the circumstances where a person is ‘unable to make a decision for himself’.92 Hoffmann J’s views in Re K must therefore now be read subject to this statutory provision. In the Northern Territory, South Australia and Western Australia, the general law relating to capacity applies to the creation of all forms of powers of attorney (although, as from 17 March 2014, statutory provision is made in the Northern Territory as to the capacity to create advance personal plans),93 as no provision is made by statute in those jurisdictions as to the threshold of capacity. Also, as the standard of mental capacity for non-enduring powers is not statutorily prescribed in Queensland, Tasmania or Victoria, the general law applies here too. 3.25 In each case, whether at general law or under statute, the onus of proving incapacity lies on the persons alleging it;94 in other words, there is a presumption that ‘a person of full age is capable of managing his or her affairs’.95 The latter is made explicit in the Australian Capital Territory, Northern Territory (for advance personal plans), Queensland and forthcoming Victorian legislation, via a statutory presumption of capacity. An onus

therefore lies on the persons who allege incapacity to displace this presumption.96 But at general law, once those persons challenge the principal’s capacity by prima facie evidence, the onus ordinarily shifts to the proponent(s) of the power to show the presence of capacity.97 Whether the same approach should transpire in the face of a statutory presumption, though it may be queried, may ultimately make little difference.98 [page 71]

Australian Capital Territory 3.26 So far as capacity is concerned, the Powers of Attorney Act 2006 (ACT) commences with a presumption of understanding. For all powers of attorney, it states that, ‘[i]n the absence of evidence to the contrary, a principal who makes a power of attorney is taken, for this Act, to understand the nature and effect of making the power of attorney’.99 An onus, therefore, lies on the person(s) who allege incapacity; there is no initial onus upon the person(s) who seek to uphold the validity of the power. The Act gives an inclusive definition of what amounts to ‘understanding the nature and effect’ of making a power of attorney. It is stated to include each of the following:100 that the principal may, in the power of attorney, state or limit the power to be given to an attorney, or instruct the attorney about the exercise of the power; when the power under the power of attorney can be exercised; that, if the power under a power of attorney can be exercised for a matter, the attorney can make decisions in relation to, and has full control over, the matter subject to terms or information about exercising the power that are included in the power of attorney; that the principal may revoke the power of attorney at any time the principal is capable of making the power of attorney; for enduring powers of attorney only: –

that the power given by the principal continues even if the principal becomes a person with impaired decision-making capacity, and

–

that, at any time the principal is not capable of revoking the power of attorney, the principal cannot effectively oversee the use of the power.

New South Wales 3.27 The Powers of Attorney Act 2003 (NSW) declares that a power of attorney is not ineffective (that is, void) only because ‘any act within the scope of the power is of such a nature that it was beyond the understanding of the principal through mental incapacity at the time the power is given’.101 This provision, rather than defining the extent or quality of mental capacity required to create a valid power of attorney, ‘merely removes from the scope of the authority created by a valid power of attorney acts the nature of which mental incapacity at inception puts beyond the donor’s understanding’.102 It is ‘a form of pro tanto invalidity by statute’.103 3.28 As the legislation adds that a power of attorney does not authorise an attorney to do any such act unless it is authorised by or under the Act,104 and provides [page 72] (as noted below) for authority in this context to be granted or confirmed by the Supreme Court,105 aside from an order of the court the applicable test of mental capacity remains that applicable at general law.106 Under Div 3 of Pt 5 of the Act, the Supreme Court may confirm the operation of a power of attorney despite the mental incapacity of the principal at the time it was given. It empowers the court, on the application of a principal, to confirm (in whole or in part) any power to do an act under the power of attorney that was beyond the principal’s understanding through mental incapacity when the power was given, but only to the extent that it appears that the principal has affirmed the power before or during the proceedings on the application and had sufficient mental capacity to so affirm at the time of the affirmation.107 Yet even if it appears to the court that the principal is incapable of

affirming the power — due to the continuation of mental incapacity that affected the principal when giving the power, or because the principal is incommunicate108 — it is statutorily empowered to confirm (in whole or in part) any such power if ‘it is for the benefit of the principal that the power be confirmed’.109 This jurisdiction, though, is ousted to the extent that the instrument creating the power states a contrary intention, and is otherwise subject to the terms of that instrument.110

Northern Territory 3.29 With the availability of advance personal plans in the Northern Territory from 17 March 2014 — which encompass matters that formerly came within an enduring power of attorney111 — statute requires ‘planning capacity’ to make such a plan.112 An adult has ‘planning capacity’ if he or she has ‘decision-making capacity’ for making the plan, and does not have an adult guardian or a manager under the Aged and Infirm Persons’ Property Act 1979 (NT).113 For this purpose, ‘decision-making capacity’ for a matter requires that the adult possess the capacity to: (a) understand and retain information about the matter; (b) weigh the information in order to make a decision about the matter; and (c) communicate that decision in some way.114 An adult is presumed to have decision-making capacity for a matter until the contrary is shown.115 [page 73] An adult, conversely, is treated as having ‘impaired decision-making capacity’ for a matter if his or her decision-making capacity for the matter is impaired, whatever its cause.116 It stands to reason that a person has impaired decision-making capacity if, in relation to a matter, he or she does lacks the ability to understand the information relevant to making the matter, to retain the relevant information, to weigh up the relevant information or to communicate the decision in some way.117

Queensland and Victoria

3.30 Statute in these jurisdictions addresses the issue of capacity to create a power of attorney only in relation to enduring powers. The general law of capacity continues to apply to non-enduring powers. Like their Australian Capital Territory equivalent118 and the phraseology adopted at general law by Hoffmann J in Re K,119 the statutes direct the inquiry at an understanding by the principal of the nature and effect of the power; a principal may make an enduring power of attorney only if he or she understands its nature and effect.120 ‘Understanding the nature and effect’ of an enduring power requires, it has been said, ‘a high degree of cognitive ability’121 given that the phrase is expressed to include understanding of the following matters:122 that the principal may, in the power of attorney, specify or limit the power to be given to an attorney and instruct an attorney about the exercise of the power; when the power begins; that once the power for a matter begins, the attorney has power to make, and will have full control over, the matter subject to terms or information about exercising the power included in the enduring power of attorney; that the principal may revoke the enduring power of attorney at any time the principal is capable of making an enduring power of attorney giving the same power; that the power the principal has given continues even if the principal becomes a person who has impaired capacity;123 that at any time the principal is not capable of revoking the enduring power of attorney, the principal is unable to effectively oversee the use of the power. [page 74] That the Queensland Act provides that ‘[a]n adult is presumed to have capacity for a matter’124 has led the Supreme Court to conclude, in line with the Australian Capital Territory position, that the onus lies on those alleging

incapacity to prove that the principal did not understand the nature and effect of the power at the time it was executed.125

Tasmania 3.31 The Powers of Attorney Act 2000 (Tas) addresses the issue of a principal’s capacity only for enduring powers of attorney. Adopting a schema similar to that in the Australian Capital Territory and Queensland, it declares a deed or instrument to be ineffective (that is, void) to create an enduring power unless the principal understands its nature and effect.126 A principal is, under the Act, taken to understand the nature and effect of a deed or instrument only if he or she understands the prescribed matters,127 which parallel those listed in the Queensland and Victorian statutes.128

Capacity related to principal’s age 3.32 Mental incapacity, at least to the extent that it gradually surfaces, is frequently associated with advanced age. At the other end of the age spectrum, from the earliest times the common law has restricted persons under the age of majority from validly engaging in certain juristic acts. As the standard of mental capacity to create a power of attorney aligns, in the main, with that applicable to entering into a contract,129 parallel reasoning may suggest that minors’ capacity to create powers of attorney is, at general law, coextensive with their capacity to contract130 (even though a power of attorney is ordinarily not a contract).131 3.33 As a general rule, the law does not, other than in limited circumstances, render binding upon minors contracts they have entered into.132 The assumption is that a minor — being a person under the age of 18 years in the modern era — lacks the capacity to contract. If the law denies minors the legal capacity to contract, there are compelling reasons for it to do likewise vis-à-vis powers of attorney.133 In the latter case, moreover, there is arguably greater scope for abuse of a minor’s trust by an unscrupulous attorney than in the (often) more limited single-transaction contractual scenario. And unlike contracts entered into by minors, which the law commonly (but not exclusively) treats as voidable, powers of attorney

effected by minors are, in line with the principles discussed earlier,134 likely to be viewed as void. [page 75] 3.34 Statute in some jurisdictions reflects these principles. It is explicit in the Powers of Attorney Act 2006 (ACT), which speaks only of adults135 appointing attorneys, whether under enduring or non-enduring powers.136 The Minors (Property and Contracts) Act 1970 (NSW), in stating that a person is not under the disability of infancy in relation to a ‘civil act’ — which includes ‘an exercise of a power under a contract or under a settlement, will or other instrument’137 — in which the person participates when aged 18 years or more,138 implicitly suggests that where aged under 18 years of age a disability of infancy would remain.139 The legislation regulating enduring powers of attorney legislation in Queensland and Victoria speaks in terms of an ‘adult’ principal140 (as does the legislation regulating advance personal plans in the Northern Territory),141 and in Western Australia it is phrased by reference to ‘a person who has reached 18 years of age’ and who ‘has full legal capacity’, creating an enduring power of attorney.142 That the legislation in these jurisdictions makes no equivalent provision outside of enduring powers143 should not be construed as ousting the incapacity of infancy for non-enduring powers. Rather, as enduring powers of attorney are entirely a creature of statute,144 it is legitimate to surmise that the respective legislatures saw no need to replicate the general law of capacity by statutory force in this regard. The general law of capacity thus continues to apply in these jurisdictions, as it does in those jurisdictions that omit from their powers of attorney legislation any reference to minimum age. An exception to the foregoing applies in Tasmania for married women aged under 18. Statute provides that a married woman who has not attained full age has power, as if she were of full age, by deed, to appoint an attorney on her behalf for the purpose of executing any deed or doing any other act that she might herself execute or do.145 This provision must be seen against the backdrop of the old common law rule denying capacity to a married

woman to appoint an attorney, except possibly with her husband’s consent.146 Any such rule has since been removed by statute.147 [page 76]

Entity capacity to create power of attorney Companies 3.35 The principal, in the context of a non-enduring power of attorney, need not be an individual. As powers of attorney focus on financial or transactional authority, it is common for a corporate body — usually via its directing mind, frequently the board or a person pursuant to the board’s authority — to appoint an attorney to conduct one or more of its functions. It is not unusual, to this end, for managerial-level corporate employees to be expressly empowered, via a power of attorney, to conduct certain of the company’s affairs. With the abolition of the doctrine of ultra vires in the corporate environment,148 a company is not denied the capacity to appoint an attorney. Any dispute will focus not on capacity but on whether, as regards third parties who deal with and rely on the attorney’s authority, there has been an excess of authority by the attorney. In turn this often raises issues relating to whether or not the attorney acted within his or her ostensible authority.149 3.36 A corporate body cannot create an enduring power of attorney. The reason for this is that an enduring power of attorney is directed at commencing, or continuing, once the principal has lost his or her mental capacity. As a company is an artifical person, it cannot be deprived of its mental capacity, meaning that an enduring power makes little sense in this context.

Incorporated associations 3.37 The same principles necessarily apply to other incorporated entities, such as associations that are incorporated pursuant to associations

incorporations legislation. The ultra vires doctrine has been ousted by that legislation,150 other than in the Northern Territory and Tasmania, where there remains scope in this context for its application, and so the capacity of the association to appoint an attorney depends on the terms of its constitution or rules.

Unincorporated associations and partnerships 3.38 Outside of incorporated bodies, though, the appointment of an attorney by persons in a group, such as an unincorporated association or a partnership, requires that the appointment be made jointly by each member (or at least the governing body of the association) or partner in order to bind the association or partnership.151

Other vitiating factors 3.39 The validity of a power of attorney can be threatened by events other than the capacity of the principal to create the power. The law recognises a variety of [page 77] doctrines aimed at ensuring that those who enter into transactions exercise a ‘true’ consent in doing so. Though targeting primarily the contractual environment, their potential application is not so limited. Equity, for instance, has long enjoyed a broad jurisdiction to set aside transactions, not just contracts, infected by undue influence or unconscionable dealing. Together with the common law, it had a role in developing mistake, misrepresentation and duress as grounds to upset a transaction. On its own the common law, moreover, recognised the defence of non est factum, and granted relief in circumstances where the power of attorney, or the principal’s signature, was forged. Each of the foregoing doctrines or defences can, if their elements are met, provide a basis for denying the validity of a power of attorney. Unlike powers of attorney the creation of which is undermined by incapacity, which the law

generally treats as void,152 as a general principle powers of attorney vitiated by misrepresentation, undue influence, unconscionable dealing, duress and (often) mistake are treated as voidable. An instrument vitiated by non est factum or because it has been forged (whether itself or its signature)153 is, on the other hand, void. As it has been mainly pleas of non est factum and undue influence that have surfaced in the cases, these doctrines as potential vitiating factors are elaborated below. 3.40 It is nonetheless possible that statutory grounds may exist to set aside a power of attorney. There is scope, for instance, for the statutory proscription against misleading or deceptive conduct154 to apply to the creation of powers of attorney. Statute in some jurisdictions, moreover, makes it an offence to dishonestly induce someone else to make (or revoke) a power of attorney155 and/or vests in a court or tribunal the power to make an order declaring invalid a power because, inter alia, it was induced by dishonesty or undue influence.156

Non est factum 3.41 More than once in the reported case law the defence of non est factum has been pleaded in an attempt to vitiate the effect of a power of attorney. ‘Non est factum’ — a Latin expression that means ‘it is not my deed’ — is a plea directed to scenarios where, as its name suggests, the act of signature is, for various reasons, not the deed of the signer. These reasons have in the course of time expanded, but they nonetheless remain limited. In the leading Australian case, Petelin v Cullen,157 the High Court followed the then recent decision of the House of Lords in Saunders v Anglia Building [page 78] Society (sub nom Gallie v Lee)158 to highlight the few occasions in which the plea could succeed:159 The class of persons who can avail themselves of the defence is limited. It is available to those who are unable to read owing to blindness or illiteracy and who must rely on others for advice as to what they are signing; it is also available to those who through no fault of their own are unable to have any understanding of the purport of a particular document. To make out the defence a defendant must show that he signed the document in the belief that it was radically

different from what it was in fact and that, at least as against innocent persons, his failure to read and understand it was not due to carelessness on his part. Finally, it is accepted that there is a heavy onus on a defendant who seeks to establish the defence.

3.42 To this end, it has been observed that ‘[t]he literate defendant’s own carelessness, with nothing more, is insufficient’.160 Accordingly, non est factum was unsuccessfully pleaded in Broadlands International Finance Ltd v Sly,161 in an attempt to dispute the validity of a power of attorney employed in the execution of a mortgage, where a wife had granted the power to her husband without reading its terms or having its contents disclosed to her. That the wife was, said Foster J, ‘in a serious position of disadvantage in relation to the signing of the power of attorney’ did not bring her within the class of persons assisted by the plea of non est factum,162 although it did open the door to other (equitable) grounds for relief.163 A plea of non est factum likewise failed in DFC Financial Services Ltd v Abel,164 where Fisher J opined that the doctrine had no application to a power of attorney comprehended by the signatories and subsequently used to enter into an entirely different contract, and moreover one that was fully understood, authorised and intended, with an innocent third party. The making of a non est factum plea in the above cases unearthed a misunderstanding of its object and parameters. In Gibbons v Wright165 the High Court distinguished a plea that a deed is void for mental incapacity from a plea of non est factum, as the former admits signing of the deed but denies capacity to understand it, whereas the latter denies the signature of the deed. But this does not mean that proof of mental incapacity can never support a plea of non est factum. To do so, though, ‘the mental incapacity must be such as to deprive its victim of an understanding of what he is signing so that his mind cannot go with his signature’.166 The logic is that ‘a signer who has no understanding at all about what he or she is signing, because of incapacity, does not know what he or she is signing such that the mind does not go with the pen’.167 [page 79]

Undue influence

3.43 So far as the creation of a power of attorney is concerned, no presumption of undue influence arises as a matter of law between a principal and his or her attorney.168 It is possible, however, for such a presumption to be raised as a matter of fact by evidence of some special relation of confidence, control, domination or influence by the attorney over the principal. For example, in Broadlands International Finance Ltd v Sly169 the husband prevailed upon his wife to give a property she owned as security for a loan to purchase a hotel. The wife executed a power of attorney in her husband’s favour to effect this dealing. Foster J found the wife to have been the victim of undue influence and/or unconscionable dealing, concluding as follows:170 [The husband] made use of his long acquired position of superiority in commercial matters to convince his wife, against her protestations of disquiet, to provide her home as security and enter into the … mortgage … Whether his actions be labelled unconscionable conduct or the exercise of undue influence, does not, in my view, matter … [T]he husband acted with impropriety amounting to equitable fraud in his dealings with the [wife]. I am clearly of the view that, were the transactions of mortgage and granting of power of attorney confined to herself and her husband, she would be clearly entitled to have them set aside.

His Honour found that the wife had also made out her case against the plaintiff lender, which had knowledge that the husband signed the mortgage as attorney and was not the owner of the property given as security. By failing to ascertain whether the wife had been independently advised in relation to the mortgage, the plaintiff became fixed with the fatal defect occasioned by the conduct of the husband, and so was liable to have the mortgage set aside.171 3.44 As appears from the foregoing, a presumption of undue influence can be rebutted by evidence that the weaker party — here the principal — has been independently advised as regards the creation of the power of attorney. That advice was not supplied in Broadlands, but was in the Tennessee Court of Appeals case of Waller v Evans,172 leading to a different outcome on the facts. The court found that a presumption of undue influence arose where a wife occupied a position of ‘domination and control’ over her husband, whom she had recently married, due to his total dependence on her due to his terminal illness. However, evidence of independent legal advice supplied to the husband served to rebut that presumption as regards a power of attorney granted by the husband, shortly before his death, in favour of his brother, who had then designated his new wife as beneficiary.

3.45 Although the creation of a power of attorney gives rise to no presumption of undue influence as a matter of law between principal and attorney, once the principal-attorney relationship comes into being it may arise so far as dealings between principal and attorney are concerned.173 This is because the relationship between attorney and principal is [page 80] fiduciary in nature,174 and case authority supports the proposition that relationships that carry fiduciary duties likewise carry the prospect of influence.175 It follows that dealings between attorney and principal that are favourable to the attorney are liable to be set aside, if not for breach of fiduciary duty, for undue influence. In each case, though, the fully informed consent of the principal operates as a defence to the claim.

Capacity of an attorney At general law 3.46 As a power of attorney amounts to a form of agency,176 and so the attorney (being the agent) is conferred authority for the purposes of the power,177 there is logic in concluding that the test of capacity for agents applies, subject to any statutory modification,178 to attorneys. If so, any person of sound mind has the legal capacity to act as an attorney provided that he or she has sufficient understanding to appreciate his or her role as attorney and to perform the act(s) required.179 Infancy does not therefore automatically suggest incapacity, and so an attorney’s capacity is not limited to his or her capacity to act as a principal.180 An attorney who at law lacks capacity to, say, contract as a principal on the grounds of infancy181 may nonetheless be able to bind the principal by effecting a contract for the principal within the attorney’s actual or ostensible authority.182 Aside from the fact of contracting as agent,183 though, there is no scope for the attorney to be personally liable under that contract because of the attorney’s incapacity at law to effect it on his or her own behalf.184

3.47 Yet the younger the child appointed as attorney, the less likely he or she will have the requisite understanding, and thus the requisite capacity, to act as attorney, although the issue remains one of understanding more so than simply age. The issue of understanding also lies at the core of attorneys who lack mental capacity. Although there are indications in the law that a principal who lacks some aspects of mental capacity may nonetheless validly appoint an attorney — the test of capacity here is [page 81] not overly onerous185 — there are reasons in principle to be more exacting as regards the mental capacity of attorneys. After all, the degree of trust a principal may place in an attorney can be considerable, and delegation by a principal of authority to an attorney presupposes a level of capacity in the latter at least comparable to that of the principal and, in circumstances where a principal has sufficient mental capacity to appoint an attorney but not to carry out all that person’s intended functions,186 exceeding it. To this end, it has been observed that, at least so far as enduring powers of attorney are concerned, ‘it would be unrealistic to expect [minors] to undertake the responsibilities of managing the [principal’s] property and affairs’.187

Under statute 3.48 Whereas the general law does not preclude a person from being appointed, and from acting, as an attorney for being under age, in several jurisdictions statute alters this position. It is altered most explicity in the Australian Capital Territory, which stipulates that a person must not, by a power of attorney, appoint a child188 as an attorney,189 a restriction that applies to all powers of attorney under the Act.190 In New South Wales the Minors (Property and Contracts) Act 1970, in stating that a person aged 18 years or more may be appointed to any ‘fiduciary office’191 — which arguably includes an attorney192 — may suggest that persons aged under 18 years lack that capacity, although if this is intended to oust the general law, it is no more than via implication. In the Northern Territory, by way of the Advance Personal Planning Act

2013 — under which may fall what would have been an enduring power of attorney prior to 17 March 2014193 — the relevant ‘decision-makers’ (equivalent to attorneys), when individuals, must be persons aged at least 18 years of age.194 The legislation envisages, though, the appointment as a decision-maker of an underage person to take effect when the person turns 18.195 In Queensland, Victoria and Western Australia statute also requires attorneys under enduring powers to be aged at least 18 years,196 likewise reflecting the high degree of trust placed by principals in attorneys under enduring powers. 3.49 Statute in the Australian Capital Territory, Queensland and Victoria precludes an insolvent person being appointed as an attorney under an enduring [page 82] power.197 The concern, it seems, is to avoid placing person in a position to manage another’s funds or property who has ostensibly proven unable to manage their own. In the Australian Capital Territory neither can a corporation (other than the public trustee or a trustee company) act as an attorney under an enduring power.198 Similarly, in the Northern Territory scope exists for a licensed trustee company, the Public Trustee or the Public Guardian to act as decision-makers under an advance personal plan.199

Suitability of an attorney 3.50 Aside from having the appropriate capacity, neither the general law nor statute restricts who can be appointed as an attorney under a power.200 Of course, given the trusted (fiduciary) position held by most attorneys, there are good reasons for a principal to appoint as attorneys one or more persons whom he or she trusts. The need for trust is heightened where the principal lacks the ability or capacity to superintend the attorney’s exercise of authority under the power. This may be because, for instance, the principal is unable to be contacted or, more commonly, in the case of an enduring power, has lost his or her mental capacity.201 It is thus unsurprising that, in the latter context, statute makes provision for

a court or tribunal to receive applications from persons concerned about the exercise of an attorney’s authority and, if necessary, to make an order replacing an appointed attorney.202 Indeed, in the United Kingdom statute previously listed the (un)suitability of the attorney as a ground for an objection, at the registration stage, to an attorney under an enduring power.203 In order to refuse registration of the power on this basis, [page 83] the court had to be satisfied not of the chosen attorney’s suitability, but rather that he or she was unsuitable to be the attorney.204 The rationale for this was to give the principal’s choice of attorney considerable weight205 and, accordingly, the courts, on the whole, were reticent to interfere with the exercise of this freedom.206 There is no equivalent in the Australian statutory landscape, in large part because registration serves no overt certification function in this jurisdiction.207

1.

See 2.2–2.7.

2.

See 3.46–3.48.

3.

Lim Eng Chuan Sdn Bhd v United Malayan Banking Corp Bhd [2005] 4 MLJ 172 at [13] per Suriyadi J (HC).

4.

See 3.5–3.31 (mental incapacity), 3.32–3.34 (age-related incapacity), 3.35–3.37 (corporate incapacity).

5.

See 3.41, 3.42 (non est factum), 3.43–3.45 (undue influence).

6.

See 1.28, 1.29, 5.33–5.42 (enduring power), 11.25–11.30 (revocation of power).

7.

See the discussion in Scott v Scott (2012) 7 ASTLR 299; [2012] NSWSC 1541; BC201210837 at [199]–[205] per Lindsay J.

8.

(1954) 91 CLR 423 at 437–8; BC5400600 per Dixon CJ, Kitto and Taylor JJ (emphasis supplied). See also Crago v McIntyre [1976] 1 NSWLR 729 at 739 per Holland J; Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369; BC200910295 at [174] per Campbell JA.

9.

[1954] P 89 at 136.

10. Crago v McIntyre [1976] 1 NSWLR 729 at 739 per Holland J. 11. (1870) LR 5 QB 549 at 565. See further G E Dal Pont and K F Mackie, Law of Succession, LexisNexis Butterworths, Australia, 2013, [2.2]–[2.20]. 12. Crago v McIntyre [1976] 1 NSWLR 729 at 740 per Holland J.

13. Crago v McIntyre [1976] 1 NSWLR 729 at 741 per Holland J. 14. (1954) 91 CLR 423; BC5400600. 15. Gibbons v Wright (1954) 91 CLR 423 at 437; BC5400600 per Dixon CJ, Kitto and Taylor JJ. 16. Gibbons v Wright (1954) 91 CLR 423 at 445; BC5400600 per Dixon CJ, Kitto and Taylor JJ. 17. Crago v McIntyre [1976] 1 NSWLR 729 at 739 per Holland J. 18. See 2.2–2.7. 19. See, for example, Estate of Dooley v Hickman 2006 Tenn App LEXIS 562 at *6 (‘The mental capacity required to execute a power of attorney equates to the mental capacity required to enter into a contract’), citing Rawlings v John Hancock Mutual Life Insurance Co (2001) 78 SW 3d 291 at 297 (Tenn Ct App) (explaining that ‘to have an agency relationship under a power of attorney, the principal must have the capacity to contract’). 20. See, for example, Beaucar v Bristol Federal Savings and Loan Association (1969) 268 A 2d 679 at 687 (Conn Cir Ct App) (remarking that ‘[o]ne who is non compos mentis is incapable of executing a valid power of attorney’; on the facts the evidence supported the finding that the principal was incompetent to execute a valid power of attorney; an examination of the document showed a signature that was vague, wavering, and totally unlike his signature as known to the defendant banks from past transactions and their own records, which was held to be, in itself, enough to put the defendants on notice that due care required further investigation by them before parting with the depositor’s money). 21. As to general powers of attorney see 1.19–1.23. 22. As to enduring powers of attorney see 1.25–1.29. 23. Praekfe v American Enterprise Life Insurance Co (2002) 655 NW 2d 456 at 461 (Wis Ct App) (‘A durable gifting power is a particularly dangerous power in that it survives the principal’s personal ability to monitor its exercise’). 24. [2010] NSWSC 804; BC201005102 at [32]. 25. (1954) 91 CLR 423 at 438; BC5400600 per Dixon CJ, Kitto and Taylor JJ. See also Michaletos v Stivactas [1992] ANZ Conv R 90 at 93; BC9101807 per Waddell CJ in Eq (SC(NSW)) (applying an ostensibly more lenient test of capacity to the execution of a power of attorney than to a transfer of property). 26. It has been suggested the facts in Gibbons itself fell within the ‘in some cases’ descriptor (Lampropoulos v Kolnik [2010] WASC 193; BC201005815 at [97] per Simmonds J), as the instruments in question were mortgages and a transfer of land executed by three joint tenants, which had the effect of changing their interests from those of joint tenants to tenants-in-common. The ‘nature of the transaction’ was not or not simply the ‘direct effect of the instruments according to their terms’ but ‘the resultant severance of the joint tenancy’: Gibbons v Wright (1954) 91 CLR 423 at 439; BC5400600 per Dixon CJ, Kitto and Taylor JJ. 27. (1988) NSW ConvR ¶55–385; BC8802222. 28. Ranclaud v Cabban (1988) NSW ConvR 155–385 at 51,548; BC8802222. 29. [2008] VSC 574; BC200811609 at [78]. 30. See, for example, Golleher v Horton (1985) 715 P 2d 1225 at 1228 (Ariz Ct App) (‘the better test is whether the person is capable of understanding in a reasonable manner, the nature and effect of his act’).

31. Scott v Scott (2012) 7 ASTLR 299; [2012] NSWSC 1541; BC201210837 at [202]–[204]. 32. [1976] 1 NSWLR 729. 33. Crago v McIntyre [1976] 1 NSWLR 729 at 750. 34. However, because his Honour found that, as a result of the incapacity, the power of attorney was voidable (as opposed to void), various defences grounded in the principal’s subsequent affirming conduct served to preclude his reliance on that incapacity: see 3.19, 3.23. 35. For example, the Powers of Attorney Act 2006 (ACT) s 14(4) states that a person for whom a guardian or manager is appointed under the Guardianship and Management of Property Act 1991 (ACT) cannot make an enduring power of attorney unless the Australian Capital Territory Civil and Administrative Tribunal approves the provisions of the power. 36. [1905] 1 Ch 160 at 170–1 per Vaughan Williams LJ, at 179 per Cozens-Hardy LJ. 37. (1954) 91 CLR 423 at 439–40; BC5400600 per Dixon CJ, Kitto and Taylor JJ. 38. See 3.19–3.23. 39. See, for example, Re Barnes (a protected person) [1983] VR 605 at 609 per Beach J (involving an enduring power of attorney). 40. See 1.25–1.27, 1.59–1.64. 41. See 5.34, 5.35. 42. [1988] Ch 310. 43. As to registration of powers of attorney in Australia generally see 4.36–4.46. 44. Re K (Enduring Powers of Attorney) [1988] Ch 310 at 315. Contra R Munday, ‘The Capacity to Execute an Enduring Power of Attorney in New Zealand and England: A Case of Parliamentary Oversight?’ (1989) 13 NZULR 253 at 265–6 (who maintains that the distinction drawn by Hoffmann J – between the essential validity of an agency and the validity of the exercise of the powes of agency – ‘appears never to have been taken before’, and that ‘the weight of common law authority militates against such a view … as does the traditional logic of the law of agency that has always placed the accent on the principal’s possessing full capacity at the moment of conferment of authority’). 45. Re K (Enduring Powers of Attorney) [1988] Ch 310 at 315. See also Re W (Enduring Power of Attorney) [2001] Ch 609 at [24] per Sir Christopher Staughton (‘old people … are reluctant to believe that senility is coming upon them and therefore are reluctant to release the powers which they have hitherto enjoyed’). 46. By Enduring Powers of Attorney Act 1985 (UK) s 3. 47. Under Enduring Powers of Attorney Act 1985 (UK) s 4. 48. By Enduring Powers of Attorney Act 1985 (UK) s 1(1)(b). 49. Under Enduring Powers of Attorney Act 1985 (UK) s 6(5)(e). 50. Under Enduring Powers of Attorney Act 1985 (UK) s 8. 51. Re K (Enduring Powers of Attorney) [1988] Ch 310 at 316. 52. (1990) 5 NZFLR 609 at 621 per Judge Inglis QC (emphasis supplied). See also Re E W (1993) 11 FRNZ 118 at 120 per Judge M D Robinson (DC). 53. Re ‘Tony’ (1990) 5 NZFLR 609 at 623 per Judge Inglis QC.

54. (2005) 48 BCLR (4th) 90. 55. Egli (Committee of) v Egli (2005) 48 BCLR (4th) 90 at [32]. 56. Egli (Committee of) v Egli (2005) 48 BCLR (4th) 90 at [33]. Cf Young v Paillé (2012) 273 Man R (2d) 268; [2012] MBQB 3 (against the backdrop of the Powers of Attorney Act 1996 (Man) s 10(3) — which states that ‘[a]n enduring power of attorney is void if at the time of its execution the donor is mentally incapable of understanding the nature and effect of the document’ — which Suche J viewed as essentially a codification of the common law test stated in Re K: at [32]). 57. (1988) NSW ConvR ¶55–385; BC8802222: see 3.9. 58. [2008] VSC 574; BC200811609 at [78]. 59. [2010] NSWSC 804; BC201005102 at [33], [34]. 60. (2012) 7 ASTLR 299; [2012] NSWSC 1541; BC201210837 at [194]–[210]. 61. (1954) 91 CLR 423; BC5400600: see 3.7, 3.11. 62. ALRC, pp 9–10 (describing the test in Ranclaud v Cabban as ‘an unrealistic test, since it is impossible to know, at the time when a power of attorney is executed, what acts an attorney will perform under the power’, and is out of line with Gibbons v Wright, which requires only a general understanding of the ‘broad operation, the “genera1 purport” of the instrument’: p 10). 63. The position in Canada at general law is likewise bedevilled with uncertainty: see ALRI (DP), pp 57–9. 64. As to appropriate steps to evaluating the principal’s capacity see R M Smith, ‘Evaluating the Donor’s Competence to Sign an Enduring Power of Attorney’ (1996) 4 J Law & Med 82 at 86–8. 65. See 3.24–3.31. 66. See R M Smith, ‘Evaluating the Donor’s Competence to Sign an Enduring Power of Attorney’ (1996) 4 J Law & Med 82 at 85–6. 67. Re K (Enduring Powers of Attorney) [1988] Ch 310 at 316 (paragraph breaks and numerals inserted). See also Re W (Enduring Power of Attorney) [2000] Ch 343 at 348 per Jules Sher QC. Hoffmann J in Re K added that he accepted this summary ‘as a statement of the matters which should ordinarily be explained to the donor (whatever the precise language which may be used) and which the evidence should show he has understood’: at 316. In Re W Jules Sher QC opined that what Hoffmann J had done in this additional sentence, which formed no part of the reason for the decision, was to inadvertently turn the onus around ‘so as to make it a requirement that the evidence should positively show the necessary understanding’: at 348. Under the relevant legislation (namely s 6(6) of the (former) Enduring Powers of Attorney Act 1985 (UK)) to sustain the power the attorney did not have to satisfy the court that the principal understood the nature of the power; the objectors had to satisfy the court that the principal did not. This finding was affirmed on appeal: Re W (Enduring Power of Attorney) [2001] Ch 609 (see at [24]–[27] per Sir Christopher Staughton, at [47]–[50] per Arden LJ). Similar provision is made by statute in the territories (see 3.26 (ACT), 3.29 (NT)) and Queensland (see 3.30) but not in other Australian jurisdictions, although any difference it makes may be queried: see 3.25. 68. [2010] NSWSC 804; BC201005102 at [33], [34]. 69. Re ‘Tony’ (1990) 5 NZFLR 609 at 623 per Judge Inglis QC (Fam Ct). Provision in the Protection of Personal and Property Rights Act 1988 (NZ) s 94(1) that ‘the donor of an enduring power of attorney is mentally incapable in relation to property if the donor is not wholly competent to manage his or her own affairs in relation to his or her property’ is not intended to raise the capacity threshold for the creation of an enduring power of attorney. Not only are its terms ostensibly

directed to the loss of capacity that triggers an attorney’s authority under an enduring power, s 94(3) explicitly states that s 94(1) is not intended to affect ‘any rule of law relating to capacity to give or to revoke a power of attorney’. 70. (2007) 211 Man R (2d) 182 at [16] per Schulman J. 71. Powers of Attorney Act 1996 (Man) s 10(3). 72. McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243 at 274–5 per Griffith CJ (the necessaries exception being implied by law on the ground of public policy). As to necessaries in this context see Carter, [15–44]. 73. (1954) 91 CLR 423 at 449; BC5400600 per Dixon CJ, Kitto and Taylor JJ. 74. City Bank of Sydney v McLaughlin (1909) 9 CLR 615 at 626; BC0900009 per Griffith CJ (affd McLaughlin v City Bank of Sydney (1914) 18 CLR 598). 75. [1976] 1 NSWLR 729 at 742. 76. (1904) 1 CLR 243 at 276 per Griffith CJ. The leave application to the Privy Council was denied with reasons delivered by Lord Macnaghten, who could see ‘no reason to doubt that the judgment of the High Court is right’: Daily Telegraph Newspaper Co v McLaughlin [1904] AC 776 at 780. See also earlier case authority from England and the United States to the same effect: Thompson v Leach (1697) Carth 435; 87 ER 199; Ball v Mannin (1829) 1 Dow & Cl 380; 6 ER 568 (HL); Dexter v Hall (1873) 82 US 9 at 24–5 per Strong J. 77. (1954) 91 CLR 423; BC5400600. 78. See, for example, Parton v Robinson (1978) 574 SW 2d 679 at 682 (Ky Ct App) (ruling that even if the principal had lacked the requisite mental capacity to execute a power of attorney, the power would not necessarily be void, but merely voidable). 79. Gibbons v Wright (1954) 91 CLR 423 at 445; BC5400600 per Dixon CJ, Kitto and Taylor JJ. Ultimately, this is no more than an illustration of the general rule of law that a mentally incapable person cannot appoint an agent: see Dal Pont, Agency, [3.2]. 80. Gibbons v Wright (1954) 91 CLR 423 at 444–5; BC5400600 per Dixon CJ, Kitto and Taylor JJ. 81. McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243 at 274–6 per Griffith CJ. 82. See 12.6–12.34. 83. (1992) 37 ACWS (3d) 6 at [43], endorsing the ruling of Griffith CJ in McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243. See also Daily Telegraph Newspaper Co v McLaughlin [1904] AC 776 at 780 per Lord Macnaghten (PC) (advocating third parties protecting themselves ‘to some extent by making careful inquiries’). 84. McLaughlin v Daily Telegraph Newspaper Co Ltd (1904) 1 CLR 243 at 276 per Griffith CJ. 85. Daily Telegraph Newspaper Co v McLaughlin [1904] AC 776 at 780 per Lord Macnaghten. In the context of forgery, see, for example, Sheriffa Shaikhah v Ban Hoe Seng & Co Ltd [1963] 1 MLJ 241 at 243 (Singapore) (ruling that as a deed, the signature or seal to which is forged, is a nullity, the power of attorney on the facts, which was a forgery, was a nullity, and it followed that the execution of a mortgage under the forged power was also a nullity). 86. Hill Estate v Chevron Standard Ltd (1992) 37 ACWS (3d) 6 at [48] per Huband J (CA(Man)). 87. [1976] 1 NSWLR 729. 88. See 3.10.

89. Crago v McIntyre [1976] 1 NSWLR 729 at 750. 90. Re K (Enduring Powers of Attorney) [1988] Ch 310 at 313 per Hoffmann J. 91. Mental Capacity Act 2005 (UK) s 2(1). 92. Namely where the person ‘is unable: (a) to understand the information relevant to the decision, (b) to retain that information, (c) to use or weigh that information as part of the process of making the decision, or (d) to communicate his decision (whether by talking, using sign language or any other means)’: Mental Capacity Act 2005 (UK) s 3(1). 93. See 3.29. As to advance personal plans see 1.44. 94. Attorney-General v Parnther (1792) 3 Bro CC 441 at 443; 29 ER 632 at 634 per Thurlow LC. 95. Murphy v Doman (2003) 58 NSWLR 51; [2003] NSWCA 249; BC200305305 at [36] per Handley JA. 96. Szozda v Szozda [2010] NSWSC 804; BC201005102 at [26] per Barrett J; Scott v Scott (2012) 7 ASTLR 299; [2012] NSWSC 1541; BC201210837 at [237]–[240] per Lindsay J. 97. Ghosn v Principle Focus Pty Ltd (No 2) [2008] VSC 574; BC200811609 at [68] per Forrest J. 98. Scott v Scott (2012) 7 ASTLR 299; [2012] NSWSC 1541; BC201210837 at [240] per Lindsay J (‘the nature of the process of reviewing such an instrument in the context of a judicial review in which a question as to the donor’s mental capacity has arisen, means that it would be a rare case in which any question about who bears the onus of proof is determinative’). 99. Powers of Attorney Act 2006 (ACT) s 18. Cf Protection of Personal and Property Rights Act 1988 (NZ) s 93B(1)(a) (which states that, for the purposes of enduring powers of attorney, ‘every person is presumed, until the contrary is shown … to be competent to manage his or her own affairs in relation to his or her property’). 100. Powers of Attorney Act 2006 (ACT) s 17. Cf ALRC, p 11. 101. Powers of Attorney Act 2003 (NSW) s 17(1). Cf the former Conveyancing Act 1919 (NSW) s 163E(1) (which reads similarly to s 17(1) of the 2003 Act), 163E(2) (which stated that ‘a power of attorney does not authorise an attorney under the power to do an act of a nature which is, at the time when the power is given, beyond the understanding of the principal through unsoundness of mind’; see NSWLRC, pp 33–5); ALRC, p 10. 102. Szozda v Szozda [2010] NSWSC 804; BC201005102 at [41] per Barrett J. 103. Szozda v Szozda [2010] NSWSC 804; BC201005102 at [41] per Barrett J. 104. Powers of Attorney Act 2003 (NSW) s 17(2). 105. Note also that both the Supreme Court and the Guardianship Tribunal have the power to make an order declaring that the principal lacked or lacks capacity at a specified time or during a specified period or for the time being: Powers of Attorney Act 2003 (NSW) s 36(5) (see 10.9). 106. Szozda v Szozda [2010] NSWSC 804; BC201005102 at [27]–[42] per Barrett J; Scott v Scott (2012) 7 ASTLR 299; [2012] NSWSC 1541; BC201210837 at [173] per Lindsay J. 107. Powers of Attorney Act 2003 (NSW) s 30 (which is in similar terms to the former Conveyancing Act 1919 (NSW) s 163E(4)). 108. A person is ‘incommunicate’ if the person: (a) suffers from any physical or mental incapacity (whether of a temporary or permanent nature) that makes the person unable: (i) to understand communications respecting the person’s property or affairs; or (ii) to express the person’s intentions respecting the person’s property or affairs; or (b) is unable to receive communications

respecting the person’s property or affairs because the person cannot be located or contacted: Powers of Attorney Act 2003 (NSW) s 4(1) (cf the former Conveyancing Act 1919 (NSW) s 163D). 109. Powers of Attorney Act 2003 (NSW) s 31(1) (similar to the former Conveyancing Act 1919 (NSW) s 163E(5)). 110. Powers of Attorney Act 2003 (NSW) s 31(2) (similar to the former Conveyancing Act 1919 (NSW) s 163E(7)). 111. See 1.44. 112. Advance Personal Planning Act 2013 (NT) s 8(1). 113. Advance Personal Planning Act 2013 (NT) s 4. 114. Advance Personal Planning Act 2013 (NT) s 6(1). 115. Advance Personal Planning Act 2013 (NT) s 6(2). 116. Advance Personal Planning Act 2013 (NT) s 6(3), 6(4). Via s 6(5), the Act lists a variety of scenarios that do not, by themselves, justify a finding of impaired decision-making capacity for a matter. 117. This follows the text of a recommendation for a parallel provision in dedicated Victorian legislation (VPLRC, p 113 (recommendation 34)). 118. See 3.26. 119. Re K (Enduring Powers of Attorney) [1988] Ch 310: see 3.14, 3.15. 120. Powers of Attorney Act 1998 (Qld) s 41(1) (although it has been recommended that, in addition, the principal should be capable of making the enduring document freely and voluntarily: QLRC, Vol 1, p 358 (recommendation 8-5)); Instruments Act 1958 (Vic) s 118(1). 121. Re SAL [2007] QGAAT 76 at [25]. 122. Powers of Attorney Act 1998 (Qld) s 41(2); Instruments Act 1958 (Vic) s 118(2) (to be replaced by Powers of Attorney Act 2014 (Vic) s 23(2) to similar effect). In Victoria the recommendation that a dedicated powers of attorney statute provide for ‘decision-making capacity’ in terms equivalent to those in the Advance Personal Planning Act 2013 (NT) s 6(1) (see 3.29) (VPLRC, p 113 (recommendation 34)) has translated to the impending Powers of Attorney Act 2014 (Vic) (see s 23(1) and the meaning of ‘decision making capacity’ in s 4(1)). The Queensland Act makes provision for what a principal, who makes an advance health directive (see 1.48), to the extent it does not give power to an attorney, must understand: s 42(1). A principal may make an advance health directive, to the extent it gives power to an attorney, only if he or she also understands the matters necessary to make an enduring power of attorney giving the same power: s 42(2). 123. ‘Impaired capacity’, for a person for a matter, means the person does not have capacity for the matter: Powers of Attorney Act 1998 (Qld) Sch 3. 124. Powers of Attorney Act 1998 (Qld) Sch 1 s 1. The recommendation that Victorian legislation make equivalent provision (VPLRC, p 110 (recommendation 33)) has translated to the impending Powers of Attorney Act 2014 (Vic) (see s 4(2)). 125. Re Caldwell [1999] QSC 182 at [12], [13] per Mackenzie J. 126. Powers of Attorney Act 2000 (Tas) s 30(2). 127. Powers of Attorney Act 2000 (Tas) s 30(3). 128. See 3.30.

129. See 3.7–3.11. 130. Cf Alcock, pp 62–3; Collier & Lindsay, pp 80–1. 131. See 2.2–2.7. 132. See generally Carter, [15-02]–[15-35]. 133. Contra ALRI (DP), p 59 (which recommended that no minimum age for principals of enduring powers of attorney ought to be prescribed by statute, reasoning that as long as a person is mentally capable of understanding the nature and effect of appointing an attorney under an enduring power, he or she should be permitted to do so, regardless of age). 134. See 3.19–3.23. 135. ‘Adult’ means an individual who is at least 18 years old: Legislation Act 2001 (ACT) Dictionary. 136. Powers of Attorney Act 2006 (ACT) s 13(1) (general powers), 13(2) (enduring powers). 137. Minors (Property and Contracts) Act 1970 (NSW) s 6(1). 138. Minors (Property and Contracts) Act 1970 (NSW) s 8. Provision in s 46(1)(a) that a person under the age of 21 years ‘may appoint an agent by power of attorney or otherwise’ is directed at removing the vestiges of 21 as the age of majority rather than opening the door to underage persons appointing attorneys under a power of attorney. 139. Cf Collier & Lindsay, p 82 (who, contrarily, argue that the Act does not preclude a person under the age of 18 appointing an attorney). 140. Powers of Attorney Act 1998 (Qld) s 32 (‘adult’ means an individual who is 18 or more: Acts Interpretation Act 1954 (Qld) s 36); Instruments Act 1958 (Vic) s 115(1) (the impending Powers of Attorney Act 2014 (Vic) makes the age threshold explicit in s 23(1)(a)). 141. Advance Personal Planning Act 2013 (NT) s 8(1) (referring to ‘adult’ with planning capacity; ‘adult’ means an individual who is at least 18 years old: Interpretation Act 1978 (NT) s 17). As to advance personal plans see 1.44. 142. Guardianship and Administration Act 1990 (WA) s 104(1a). 143. In Western Australia, the Guardianship and Administration Act 1990 (WA) does not address nonenduring powers at all, leaving those powers to be (incompletely) statutorily addressed by Pt VIII of the Property Law Act 1969 (WA). 144. See 1.25–1.27, 1.58–1.64. 145. Conveyancing and Law of Property Act 1884 (Tas) s 44(1). 146. See Alcock, p 65. 147. See L Young, G Monahan, A Sifris and R Carroll, Family Law in Australia, 8th ed, LexisNexis Butterworths, Australia, 2013, [12.1]–[12.11]. 148. Corporations Act 2001 (Cth) ss 124(1) (‘A company has the legal capacity and powers of an individual’), 125(1) (‘The exercise of a power by the company is not invalid merely because it is contrary to an express restriction or prohibition in the company’s constitution’), 125(2) (‘An act of the company is not invalid merely because it is contrary to or beyond any objects in the company’s constitution’). 149. See 9.23–9.33. 150. Associations Incorporation Act 1991 (ACT) ss 24, 25; Associations Incorporation Act 2009 (NSW) ss 19, 20; Associations Incorporation Act 1981 (Qld) s 26; Associations Incorporation Act

1985 (SA) s 27; Associations Incorporation Reform Act 2012 (Vic) s 35; Associations Incorporation Act 1987 (WA) s 15. 151. See Alcock, pp 88–9 (in the context of partners). 152. See 3.19–3.23. 153. See, for example, Sheriffa Shaikhah v Ban Hoe Seng & Co Ltd [1963] 1 MLJ 241 at 243 (Singapore) (ruling that as a deed, the signature or seal to which is forged, is a nullity, the power of attorney on the facts, which was a forgery, was a nullity, and it followed that the execution of a mortgage under the forged power was also a nullity); Re Syed Eidrus Alsagoff [1966] 1 MLJ 75 (Sing). 154. Under the Australian Consumer Law s 18(1), found in Competition and Consumer Act 2010 (Cth)Sch 2. 155. Powers of Attorney Act 2006 (ACT) s 90; Advance Personal Planning Act 2013 (NT) s 77 (in the context of an ‘advance personal plan’: see 1.44); Powers of Attorney Act 1998 (Qld) ss 26(2) (general power), 61 (enduring document); Powers of Attorney Act 2014 (Vic) s 135(1), 135(2) (yet to commence). See also Advance Care Directives Act 2013 (SA) s 56(1) (‘A person who, by dishonesty or undue influence, induces another to give an advance care directive is guilty of an offence’). 156. Powers of Attorney Act 2003 (NSW) s 36(3)(b)(iii); Advance Personal Planning Act 2013 (NT) s 61(2)(f)(ii) (in the context of an ‘advance personal plan’: see 1.44); Powers of Attorney Act 1998 (Qld) s 113(2)(c); Powers of Attorney Act 2000 (Tas) s 33(2)(e)(iii) (also applies vis-à-vis revocation of the power); Instruments Act 1958 (Vic) s 125Y(1)(c); Powers of Attorney Act 2014 (Vic) s 118(c) (yet to commence). 157. (1974) 132 CLR 355; BC7500030. 158. [1971] AC 1004 (see at 1015–16 per Lord Reid, at 1019 per Lord Hodson). 159. Petelin v Cullen (1974) 132 CLR 355 at 359–60; BC7500030 (FC). 160. 331399 Alberta Ltd v Worthington Properties Inc (2010) 77 BLR (4th) 136 at [29] per Hanebury M. 161. (1987) 4 BPR 9420; BC8701426. 162. Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420 at 9421; BC8701426. See also Toronto-Dominion Bank v Salekin (2014) 239 ACWS (3d) 215; [2014] ABQB 168 (where a plea of non est factum similarly failed as no evidence revealed an inability to read or comprehend the terms of the power). 163. See 3.43. 164. [1991] 2 NZLR 619 at 633. 165. (1954) 91 CLR 423 at 442–4, 446; BC5400600 per Dixon CJ, Kitto and Taylor JJ. 166. Crago v McIntyre [1976] 1 NSWLR 729 at 737 per Holland J. See also Ford v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR 42; [2009] NSWCA 186; BC200905872 at [71] per Allsop P and Young JA. 167. Ford v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR 42; [2009] NSWCA 186; BC200905872 at [77] per Allsop P and Young JA. 168. See, for example, Re Jorss’ Caveat [1982] Qd R 458 (where the Full Court was unable to find in the relationship between mother and son any evidence upon which a presumption could arise that

undue influence was exerted upon the mother in executing a power of attorney in favour of her son). 169. (1987) 4 BPR 9420; BC8701426. 170. Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420 at 9425; BC8701426. 171. Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420 at 9428; BC8701426. Foster J added (at 9428) that, had he not found for the wife upon general equitable principles, he would have found for her under the provisions of the Contracts Review Act 1980 (NSW). 172. 2009 Tenn App LEXIS 301. 173. See 8.77–8.79. 174. See 8.31–8.50. 175. See, for example, Johnson v Buttress (1936) 56 CLR 113 at 135 per Dixon J. 176. See 1.8–1.13. 177. See 5.1–5.5. As to the authority of attorneys generally see Chapters 5 and 7. 178. See 3.24–3.31. 179. Agency cases that support this proposition include Watkins v Vince (1818) 2 Stark 368; 171 ER 675 and Re D’Angibau (1880) 15 Ch D 228 (see at 244 per Brett LJ, at 246 per James LJ). Case authority that a minor cannot act in respect of real property pursuant to a power of attorney (Hearle v Greenbank (1749) 3 Atk 695; 26 ER 1200) must be queried given its antiquity and subsequent attempts by courts to limit it (see, for example, Re D’Angibau at 246 per James LJ; contra at 240 per Cotton LJ in dissent). 180. See Collier & Lindsay, pp 102–3. As to the capacity to act as a principal see 3.2–3.38. 181. See 3.32–3.34. 182. Waugh v Waugh (1950) 50 SR (NSW) 210 at 211 per Street CJ. The following agency cases illustrate the point: Watkins v Vince (1818) 2 Stark 368; 171 ER 675 (where a guarantee was given as to the payment for the supply of bricks by a minor on behalf of his father, Lord Ellenborough held that, in view of evidence that the son had on other occasions signed documents on his father’s behalf, the father was liable on the guarantee through the agency of his son); Goode v Harrison (1821) 5 B & Ald 147; 106 ER 1147 (a partner who is a minor can bind the partnership in respect of acts done in furtherance of the objects of the partnership). 183. As to the effect of an attorney contracting as agent see 9.5–9.22. 184. Smally v Smally (1700) 1 Eq Cas Abr 6; 21 ER 83 (where it was held that an agent who was a minor could not be charged on a contract). 185. See 3.5–3.23. 186. See 3.14. 187. Law Com 122, p 23. 188. ‘Child’ means an individual who is under 18 years old: Legislation Act 2001 (ACT) Dictionary. 189. Powers of Attorney Act 2006 (ACT) s 13(3). 190. Cf the question whether the Act is limited in its application to ‘general powers of attorney’ and ‘enduring powers of attorney’, and so does not apply to ‘special powers of attorney’: see 1.39, 1.40. If the Act is so limited in its application, there are grounds to conclude that the limitation of an adult attorney does not apply to special powers of attorney.

191. Minors (Property and Contracts) Act 1970 (NSW) s 10(1). 192. As to the fiduciary status of attorneys see 8.31–8.50. 193. See 1.44. 194. Advance Personal Planning Act 2013 (NT) s 15(1)(a). 195. Advance Personal Planning Act 2013 (NT) s 15(2), 15(3). 196. Powers of Attorney Act 1998 (Qld) ss 29(1)(a)(i) (definition of ‘eligible attorney’), 43(1) (see also s 63(1)(b) (in the context of a statutory health attorney)); Instruments Act 1958 (Vic) s 119(4); Powers of Attorney Act 2014 (Vic) s 28(1)(a) (yet to commence); Guardianship and Administration Act 1990 (WA) s 104C (requiring the attorney to be of ‘full legal capacity’). 197. Powers of Attorney Act 2006 (ACT) s 14(1)(b) (which refers to a person who is bankrupt or has executed a personal insolvency agreement); Powers of Attorney Act 1998 (Qld) ss 29(1)(a)(iv) (definition of ‘eligible attorney’; not bankrupt or taking advantage of the laws of bankruptcy as a debtor under the Bankruptcy Act 1966 (Cth) or a similar law of a foreign jurisdiction), 43(1); Instruments Act 1958 (Vic) s 121 (‘insolvent’ means insolvent under administration: s 114(1)); Powers of Attorney Act 2014 (Vic) s 28(1)(b) (yet to commence). 198. Powers of Attorney Act 2006 (ACT) s 14(1)(a). For non-enduring powers, though, a power to appoint a person to do something, such as act as an attorney, includes a power to appoint a corporation to do the thing: Legislation Act 2001 (ACT) s 160(1). 199. Advance Personal Planning Act 2013 (NT) s 15(1)(b)–(d). 200. Cf the recommendation that a person who has been a paid carer for the principal within the last three years, or who has been convicted of an indictable offence involving personal violence or dishonesty in the preceding ten years, should be ineligible from being an attorney: QLRC, Vol 3, p 219 (recommendations 16-4, 16-5). The Powers of Attorney Act 2014 (Vic), once it commences operation, reflects this sentiment, by denying eligibility to be an attorney for financial matters under an enduring power to a person who has been convicted or found guilty of an offence involving dishonesty unless he or she has disclosed this to the principal and the disclosure has been recorded in the enduring power: s 28(1)(c). 201. Praekfe v American Enterprise Life Insurance Co (2002) 655 NW 2d 456 at 461 (Wis Ct App) (‘A durable gifting power is a particularly dangerous power in that it survives the principal’s personal ability to monitor its exercise’). 202. Guardianship and Management of Property Act 1991 (ACT) s 66 (see 10.4); Powers of Attorney Act 2003 (NSW) s 36(4)(b) (see 10.9); Powers of Attorney Act 1980 (NT) s 15(2)(c) (for enduring powers executed before 13 March 2014: see 10.12); Advance Personal Planning Act 2013 (NT) s 61(4) (for advance personal plans: see 10.13–10.15); Powers of Attorney Act 1998 (Qld) s 116(a) (see 10.16); Powers of Attorney and Agency Act 1984 (SA) s 11(1)(c) (see 10.18); Powers of Attorney Act 2000 (Tas) s 33(2)(b) (see 10.20); Instruments Act 1958 (Vic) s 125X (the equivalent in the impending Powers of Attorney Act 2014 (Vic) is s 120(1) (b), 120(2)) (see 10.24); Guardianship and Administration Act 1990 (WA) s 109(1)(c) (see 10.28). 203. Enduring Powers of Attorney Act 1985 (UK) s 6(5)(e) (‘a notice of objection to the registration of an instrument is valid if the objection is made on … the following grounds, namely … (e) that, having regard to all the circumstances and in particular the attorney’s relationship to or connection with the donor, the attorney is unsuitable to be the donor’s attorney’). Now see Mental Capacity Act 2005 (UK) Sch 1 Pt 2. 204. Re E [2001] Ch 364 at [32] per Arden J; Re F [2004] 3 All ER 277; [2004] EWHC 725 (Ch) at [15] per Patten J.

205. Law Com 122, p 37; Re E [2001] Ch 364 at [32] per Arden J (‘It is part of the policy of the 1985 Act that the donor’s wishes should if reasonably possible be upheld’). 206. See, for example, Re E [2001] Ch 364 at [32] per Arden J (reasoning that, as the principal had appointed members of her family to act as her attorneys, to appoint a receiver would mean that not only would significant costs be unnecessarily incurred, a third party would have to be brought into the donor’s affairs and between her and her family, which ‘is not in principle a desirable outcome where members of the family have been caring for the donor for a substantial period of time already’); Re F [2004] 3 All ER 277; [2004] EWHC 725 (Ch) (where Patten J reasoned that ‘to remove a chosen attorney because of hostility from a sibling or other relative, in the absence of any effective challenge to his competence or integrity, should require clear evidence either that the continuing hostility will impede the proper administration of the estate or will cause significant distress to the donor which would be avoided by the appointment of a receiver’ (at [20]); his Lordship refused to find that Mr A was unsuitable to be his mother’s attorney as neither of these conditions was satisfied by the evidence in the case, and the appointment of an independent receiver as a possible means of avoiding future strife between her children would only add expense and diminish his mother’s assets and income unnecessarily). 207. See 4.36–4.46.

[page 85]

Chapter 4

Creating a Power of Attorney Need for writing Powers of attorney as deeds At general law Under statute Formalities relating to form and execution Overview Enduring powers Witnessing Australian Capital Territory Approved Forms Signature and witnessing New South Wales Northern Territory Queensland Approved Forms Signature and witnessing South Australia Tasmania Approved Forms Signature and witnessing Victoria

4.1 4.4 4.4 4.5 4.6 4.6 4.7 4.8 4.10 4.10 4.11 4.12 4.14 4.16 4.16 4.17 4.19 4.21 4.21 4.22 4.24

Approved Forms Signature and witnessing Western Australia Under the Transfer of Land Act 1893 Enduring powers Acceptance and disclaimer of attorneyship Disclaimer Acceptance Registration of powers of attorney Australian Capital Territory New South Wales Northern Territory Queensland

4.24 4.25 4.27 4.27 4.29 4.31 4.32 4.34 4.36 4.38 4.40 4.41 4.43 [page 86]

South Australia Tasmania Proof of powers of attorney by copy Recognition of powers from outside the jurisdiction Joint appointments Appointment of multiple attorneys Joint appointment, or joint and several appointment? Number of attorneys Acceptance in the context of multiple attorneys under an enduring power Alternative or substitute attorneys Multiple principals Appointing an attorney by class

4.44 4.46 4.47 4.49 4.50 4.50 4.51 4.52 4.54 4.56 4.59 4.61

Need for writing 4.1 There is no requirement at general law that a contract or an agency be in writing or evidenced in writing; it is possible to create contracts and agencies by parol (that is, orally). In the field of private law transactions, the law’s focus is on intention ahead of form; indeed, private law in the transactional context is aimed at giving effect to the intention of the parties to a dealing. Were the law otherwise, it would not be possible to infer the existence of an agency or of agreement generally without some written evidence and, with this, some accepted form. 4.2 Although powers of attorney are a form of agency,1 and have been (inaccurately) described in contractual terms by some,2 the formality surrounding them dictates that, even at general law, powers of attorney must be in writing.3 Multiple judicial statements speak in terms of a power of attorney being an ‘instrument in writing’,4 a ‘written document’,5 ‘a written authorization’6 or a ‘formal delegation’7 of authority. Not infrequently the term ‘power of attorney’ is applied to a formal grant of power to act either made by, or contained in, a deed; and the balance of authority at general law appears to suggest that the validity of a power of attorney is premised on its formation via a deed.8 [page 87] 4.3 The general law must, of course, yield to statute where the two inhabit the same field. Statute in most Australian jurisdictions makes explicit provision for the formalities required for a valid power of attorney, and the relevant provisions are discussed below.9 In several jurisdictions the legislation specifies a prescribed form for powers of attorney, although it is usual for it to either recognise the validity of powers of attorney ‘to the effect of’ that form and/or to meet the statutory requirement by substantial compliance under acts interpretation legislation.

In each case, the validity of a power of attorney is premised on the statutory requirements being fulfilled. The point is of especial significance so far as enduring powers of attorney are concerned. As enduring powers, which by definition endure a principal’s mental incapacity, were not recognised at general law — under which a principal’s mental incapacity caused any power to terminate10 — their validity is necessarily premised on meeting applicable statutory requirements. These are also discussed below,11 and with no general law backdrop must be clearly met. As observed by an American appellate court, the court will not find an enduring power ‘by mere implication from the circumstances’.12

Powers of attorney as deeds At general law 4.4 The general law required a power of attorney to be created by way of deed if it purported to authorise the attorney to execute a deed on the principal’s behalf.13 Yet there are indications in the case law that, independent of such an object, inherent in the concept of a power of attorney is that, inter alia, it involves an authority conferred by deed.14 There appear to be at least three reasons for this. The first is that powers of attorney are recognised by law as formal instruments,15 as opposed to informal ones, and the typical way of creating a formal instrument is by way of deed.16 A second reason is that most powers of attorney do not involve the exchange of what the [page 88] law regards as consideration,17 and so cannot be enforced via the law of contract. Deeds, on the other hand, do not require consideration to be enforceable. And a third reason, which builds on the first two, is that because powers of attorney may vest in an attorney considerable power to affect the principal’s legal position, there is sense in documenting the validity of the relationship so created in a formal sense.

Under statute 4.5 That the powers of attorney legislation in the territories, New South Wales and Tasmania deems that a power of attorney that fulfils the statutory requirements is either taken to be a deed18 or otherwise is taken to be valid and effectual even though it is not under seal (a seal being a requirement of a deed at law),19 seems to presuppose that, at general law, a deed was required to constitute a power of attorney.20 Only the South Australian legislation explicitly requires powers of attorney to be effected by way of deed.21 That the form prescribed by the Victorian legislation for a general power of attorney makes provision for the elements of a deed — signature, sealing and delivering22 — indicates that a deed is envisaged. Even though it does not appear that this form is intended to be exhaustive of the form and language that may create a valid power of attorney, there may be no escape from the requirements of a deed if the general law in fact requires a deed. If the latter does represent the general law, then a deed is required in Queensland and Western Australia for the validity of powers of attorney outside the statutory forms.

Formalities relating to form and execution Overview 4.6 The statutory formality requirements target the form, execution and witnessing of powers of attorney. Whereas, as noted above, the general law commonly aligned formality requirements applicable to powers of attorney to those applicable to deeds [page 89] generally — namely, that the instrument in question be signed (but only by the principal, not the attorney),23 sealed24 and delivered — statute prescribes

its own requirements, which are in some respects and instances more onerous than those for deeds, and in others less. There are statutory provisions going to the registration of powers of attorney,25 as well as proof of copies of powers,26 each discussed under a separate heading later in this chapter.

Enduring powers 4.7 It is in the context of enduring powers of attorney that statutory formalities display their greatest impact. There are at least two reasons why the formality requirements for enduring powers exceed, in the main, those applicable to non-enduring powers. First, an enduring power is not infrequently made at a time when the principal perceives the onset of mental incapacity, when he or she may be particularly susceptible to the influence of the intended attorney(s). Second, upon the principal losing capacity, the scope for monitoring and review of the attorney’s exercise of authority is reduced. There is, as a result, a need to ensure that principal and attorney(s) understand the nature, function and implications of the power of attorney. The foregoing explains why statute uniformly requires that an intention of a principal that a power of attorney be ‘enduring’ be clearly expressed in the instrument itself. It explains why some law reform bodies have recommended that enduring powers include explanatory notes, setting out their essential nature and effect,27 which has seen translation in New South Wales28 and (for advance personal plans) the Northern Territory.29 And it explains why statute requires a formal acceptance by attorneys under an enduring power,30 and that the instrument creating the power be attested, that is, witnessed. These requirements know no counterpart at general law. Having a signature witnessed, it is said, ‘emphasizes the magnitude of the principal’s choice to grant decision-making power to another person’.31 It also provides third parties some degree of security, though no guarantees, as to the principal’s identity, capacity and free will.32 [page 90]

Witnessing

4.8 Statute identifies who may (and may not) attest a power. Law reform bodies have debated as to how many witnesses are necessary, and as to the identity of the witnesses. Some side with the need for only one witness,33 whereas others prefer two as an additional control.34 There is also debate as to whether enduring powers ought to be attested, or otherwise signed or certified, by a lawyer and/or medical practitioner witness. Most law reform bodies have rejected the need for a medical practitioner witness/signer,35 but some have favoured a lawyer-witness/signer,36 and some have also recommended that the lawyer provide a certificate of legal advice in the prescribed form.37 The Australian statutory provisions have not, generally speaking, been so prescriptive. Uniformly, though, the view is that witnesses must be independent of the relevant instrument. Parties to the power are therefore excluded from attesting it, and it is common for statute to place limits on signature by a spouse or relatives of the principal. Even without an express statutory limitation of this kind, the law implies that if statute requires attestation of a deed or other instrument, only a person who is not a party to, or named in, the deed or instrument, can validly attest it.38 The word ‘attest’, after all, ‘implies the presence of some person, who stands by but is not a party to the transaction’.39 This rule has been applied to powers of attorney.40 4.9 As will appear below, in the territories, New South Wales, Queensland and Victoria the legislation requires attesting witnesses to enduring powers of attorney (and, in the Australian Capital Territory, also general powers of attorney) to certify that in their opinion the principal appeared to understand the nature and effect of [page 91] the power in question.41 Phrased in terms of the capacity requirements of principals as originally drawn from the general law,42 this requirement serves as an additional control on a principal’s capacity. Accordingly, it casts upon attesting witnesses an important function, especially for lawyers who attest. Guidelines have been issued for lawyer-witnesses in this context,43 and it behoves lawyers to become familiar with their precepts and put them into practice.44 The guidelines, in any case, represent good practice for all

witnesses, whether or not they are statutorily required to certify the principal’s ostensible understanding. Each of these aspects is covered below, and the lack of uniformity (notwithstanding similarities in substance) between jurisdictions dictates that each must be treated separately, in the main, to eschew vague and potentially misleading generalisations.

Australian Capital Territory Approved forms 4.10 The Powers of Attorney Act 2006 (ACT), though it does not within its terms prescribe a form for powers of attorney, envisages that the Minister may approve forms for the purposes of the Act, and that an approved form is a notifiable instrument.45 The Minister has approved forms for ‘general powers of attorney’46 and ‘enduring powers of attorney’47 under the Act.48 If as a result, according to the view of one New South Wales judge,49 the Act has no application to special powers of attorney, these forms and the ensuing formality requirements do not govern the creation of special powers. Whether the Act is so circumscribed, however, may legitimately be queried,50 especially as it would involve different regimes depending on matters of form as opposed to substance. Substantial compliance with those forms is sufficient, except in relation to signature, with the additional requirements that: the form be prepared or completed [page 92] in a particular way; particular information be included in the form (or a particular document be attached to or given with the form); or the form (or information in it or a document attached to or given with it) be verified in a particular way.51

Signature and witnessing

4.11 In the Australian Capital Territory, common statutory signature and witnessing requirements apply, with limited exception, to both general powers and enduring powers. A power of attorney must be signed by the principal, or otherwise at the direction, and in the presence, of the principal, by someone eligible to sign52 for the principal.53 It must also be signed and dated by two adult witnesses in the presence of the principal and each other, and contain a certificate signed by each witness as prescribed.54 The certificate must state that the principal signed the power voluntarily in the witness’s presence and that, at that time, he or she appeared to understand the nature and effect of making the power.55 A person who signs the power of attorney for the principal, who is appointed as attorney, or who is a child, is disqualified from witnessing the power of attorney.56 Only one witness may be a relative57 of either the principal or a person appointed as attorney under the power.58 In the case of an enduring power of attorney, though, it is necessary that one witness be a person authorised to witness the signing of a statutory declaration,59 and that the attorney has accepted the appointment by signing the power.60

New South Wales 4.12 The Powers of Attorney Act 2003 (NSW) states that an instrument, whether or not under seal, that is in or to the effect61 of a form prescribed by the regulations for this purpose and is duly executed, creates a ‘prescribed power of attorney’ for the purposes of the Act.62 To this end, the regulations contain two forms, a ‘General Power [page 93] of Attorney’ and an ‘Enduring Power of Attorney’.63 These replace the former single prescribed form64 — which up to 28 February 201465 could be used to create either a general power or an enduring power, depending on how the form was completed — which had proven confusing for many people. Each of the new forms makes provision for its signature (by the principal) and witnessing (by a third party).

4.13 Additional requirements are imposed where an enduring power is intended. The Act states that an instrument66 that creates a power of attorney creates an ‘enduring power of attorney’ for the purposes of the Act if:67 it is expressed to be given with the intention that it will continue to be effective even if the principal lacks capacity through loss of mental capacity after its execution; its execution by the principal is witnessed by a prescribed witness68 (not being an attorney under the power); and there is endorsed on, or annexed to, it a certificate by the witness stating that: –

he or she is a prescribed witness who witnessed the principal’s signing of the power and is not an attorney under the power;

–

he or she explained to the principal the effect of the instrument before it was signed; and

–

the principal appeared to understand its effect.

Also, the Act specifies that an enduring power of attorney confers no authority until the attorney ‘has accepted the appointment by signing the instrument creating the power’.69

Northern Territory 4.14 The Powers of Attorney Act 1980 (NT) contains no prescribed form for powers of attorney but it makes clear that an instrument creating a power is valid and effectual even if not under seal.70 It does list signature and witnessing requirements applicable to all powers of attorney. It requires the relevant instrument to ‘be signed by or by direction and in the presence of the [principal]’.71 The principal’s signature must be effected in the presence of and attested by a prescribed witness72 or, if the instrument [page 94] is signed by direction of, and in the presence of, the principal, a prescribed

witness and another person.73 But the foregoing is expressed not to apply where an instrument creating a power is executed by a body corporate as a principal74 (which thus applies only in respect of non-enduring powers).75 Additional requirements apply to enduring powers of attorney executed before 17 March 2014. The relevant instrument must expressly evidence the principal’s intention that the power continue in effect notwithstanding his or her subsequent legal incapacity,76 have endorsed on it or annexed to it a statement of acceptance in or to the effect of the prescribed form,77 and be registered.78 Also, a person who witnesses an instrument creating an enduring power cannot be a party to it or a near relative79 of the attorney.80 4.15 As from 17 March 2014, what were previously enduring powers of attorney fall within the broader concept of an ‘advance personal plan’,81 regulated by the Advance Personal Planning Act 2013. Under that Act, an advance personal plan must be in the approved form82 if the plan includes the appointment of a decision-maker who is to have any financial management powers (in this sense, paralleling the enduring power).83 The adult making the plan must sign it84 in the presence of an authorised witness.85 The latter must certify in the plan that:86 the witness reasonably believes that the adult making the plan is who he or she purports to be, and is at least 18 years of age; it appears to the witness that ‘the adult understands the nature and effect of the advance personal plan’, and ‘in making the plan the adult is acting voluntarily without coercion or other undue influence’; and the plan was signed by the adult making it and in the presence of the witness. [page 95] If an attempted advance personal plan does not meet the statutory formalities, it is not effective to create a plan but may constitute a statement of the adult’s views and wishes that may be taken into account by an agent87 or other person acting for the adult.88 But if satisfied that the adult’s intention to make an advance personal plan is sufficiently clear, the Local Court may

declare the attempt to be effective to create a valid plan despite its informality.89 This does not, in any case, affect substantial compliance provisions in the interpretation legislation.90

Queensland Approved forms 4.16 The Powers of Attorney Act 1998 (Qld) states that a general power of attorney made under the Act must be in the approved form.91 Equivalent provision for an approved form is made for enduring powers of attorney92 (and advance health directives).93 An approved form is a form approved by the chief executive,94 and can (in both ‘short form’ and ‘long form’) be found at the Queensland Department of Justice and Attorney-General website.95 Substantial compliance with the form is sufficient except to the extent that the form requires that it be completed in a specified way, that specified information or documents be included in, attached to or given with the form, or that it (or its contents) be verified in a specified way.96

Signature and witnessing 4.17 The signature and witnessing requirements differ according to whether the power is a general (non-enduring) power or an enduring power, the latter being more exacting. The Act requires an instrument creating a general power to be signed by, or by direction and in the presence of, the principal.97 But this has no application to a power of attorney created by and contained in another instrument (for example, a mortgage or lease) that is signed by, or by direction of, the principal.98 Nor does it affect a requirement under another Act about witnessing instruments creating powers of attorney or the rules on execution of instruments by corporations.99 [page 96] 4.18 An ‘enduring document’ — a term that includes enduring powers of attorney100 — must be signed by the principal (or if the principal instructs,

for the principal and in the principal’s presence, by an eligible signer)101 and signed and dated by an eligible witness.102 It must also include a certificate, signed by the witness, stating the principal signed the document in the witness’s presence and, at that time, appeared to have the capacity necessary to make the document.103 Moreover, an enduring document is effective in relation to an attorney only if he or she has accepted the appointment by signing the document.104

South Australia 4.19 The Powers of Attorney and Agency Act 1984 (SA) states that a ‘general power of attorney’, a term used to distinguish it from an ‘enduring power of attorney’,105 may be created by deed in either the form set out in the Act106 or in a form to the same effect but expressed to be made in pursuance of the Act.107 That form makes general provision for signature and witnessing. 4.20 So far as enduring powers of attorney are concerned, there is no statutorily prescribed form. Instead the Act envisages that an enduring power may be created either by deed expressed to be made in pursuance of the Act, or by deed containing words indicating an intention that the authority conferred is to be exercised notwithstanding, or in the event of, the principal’s subsequent legal incapacity.108 Enduring powers are subject to witnessing requirements more rigorous than those applicable to general powers. The Act prescribes that a deed is not effective to create an enduring power unless the attesting witness (or, where there is more than one attesting witness, at least one of them) is a person authorised by law to take affidavits, and the deed has endorsed on (or annexed to) it a statement of acceptance in the [page 97] prescribed form109 (or in a form to the same effect) executed by the person appointed to be the attorney.110 Though the term ‘may’, in referring to the creation of a general power, could be interpreted as suggesting that the Act represents a non-exhaustive

avenue for creating powers of attorney, this is unlikely to have been the legislators’ intention. After all, ‘may’ is also used in respect of the creation of enduring powers, which can only be created pursuant to statute. It follows that ‘may’ in this context is aptly construed as ‘must’ or ‘shall’.111

Tasmania Approved forms 4.21 The Powers of Attorney Act 2000 (Tas) stipulates three alternative ways of creating a non-enduring power of attorney. It states that such a power may be made by deed, in accordance with Form 1112 (which confers particular powers specified in it, akin to a ‘special power’),113 or in accordance with Form 2114 (which confers power on the attorney to do all things that the principal may lawfully authorise an attorney to do, essentially a ‘general power’).115 Although phrased in permissive (‘may’) terms, these three methods of creating non-enduring powers of attorney are likely to have been intended as exhaustive.116 The Act also envisages three ways of creating an ‘enduring power of attorney’:117 by deed containing words indicating an intention that the authority conferred is to be exercisable notwithstanding the principal’s subsequent mental incapacity or in the event of the principal’s subsequent mental incapacity; by an instrument in accordance with Form 3,118 conferring on the attorney particular powers specified in it; or by an instrument in accordance with Form 4,119 conferring on the attorney powers to do all things that the principal may lawfully authorise an attorney to do.

Signature and witnessing 4.22 All powers of attorney must be signed by the principal, although the witnessing requirements differ according to whether the power is enduring or non-enduring. In the former event, the principal’s signature must be attested by two witnesses who were

[page 98] not a party to the instrument (or, as from 1 January 2014,120 or a close relative121 of a party) and each of whom witnessed it in the presence of the principal and each other. As from 1 January 2014, the power must include a declaration by each witness that he or she is neither a party to the power nor a close relative of a party to it.122 A deed or instrument is not, moreover, effective to create an enduring power of attorney unless, inter alia, it has endorsed on or annexed to it a statement of acceptance in accordance with Form 3 or 4 above, or in a form to the same effect, executed by the person appointed to be the attorney.123 In the case of a non-enduring power, the principal’s signature must be attested by a witness who is not a party to the instrument and who witnesses it in the presence of the principal.124 Unlike the corresponding provisions in other jurisdictions, the Tasmanian legislation delves into minutiae in this regard, requiring all powers of attorney to be on A4-size paper, for each page to be consecutively numbered and stapled or pinned in the top left hand corner, to be accompanied by a registration application,125 and to contain any matter that is intended to be in addition to, or to be inserted in and form part of, the power in a page of that power or in the form of an annexure.126 It adds that an alteration to a power of attorney is to be made by striking through the word(s) intended to be altered so as not to render illegible the original word(s), and must be initialled127 by the principal and the attorney.128 These details, in any case, represent good practice elsewhere. The foregoing requirements apply, so far as relevant, to an instrument that refers to a power of attorney and to an annexure to such an instrument.129 That instrument must clearly identify the power of attorney by reference to the names of the principal and the attorney, the date on which it was executed, and the distinctive number or other means of identification given on its lodgement for registration.130 4.23 An instrument creating a non-enduring power of attorney131 that is not executed personally by the principal may nonetheless be taken as validly executed if:132

[page 99] it is executed by another person in the presence, and by the direction, of the principal; the signature of that person is made or acknowledged by the principal in the presence of two or more witnesses present at the same time; and those witnesses attest and subscribe the power of attorney in the principal’s presence (but no form of attestation is necessary for that purpose). Where statute requires an instrument that refers to a power of attorney to be signed by the principal, the principal’s personal representative can sign it, accompanied with a statement as to how and in what capacity he or she has been appointed to act.133

Victoria Approved forms 4.24 The Instruments Act 1958 (Vic) envisages that a general power of attorney, as distinguished for this purpose from an enduring power of attorney (and, presumably, a special power),134 can be created in or to the effect of the form contained by the Act.135 The same translates to the impending Powers of Attorney Act 2014 (Vic).136 There is no indication that this form is intended to be exhaustive of the form and language that may be adopted to create a valid non-enduring power of attorney. The position is different as regards enduring powers of attorney, which being creatures of statute must be in the approved form,137 or at least any form in or to the like effect of the approved form.138

Signature and witnessing 4.25 The form prescribed in the Act for a general power of attorney makes provision for signature, sealing and delivering, aligning it with the requirements of a deed. It adds that an instrument creating a non-enduring power of attorney may be executed by, or by direction and in the presence of,

the principal, provided that two other persons are present as witnesses and attest the instrument.139 [page 100] 4.26 An enduring power of attorney must be signed by the principal, and if not by the principal, by an eligible person140 at the direction, and in the presence of, the principal.141 The instrument must also be signed and dated by two adult witnesses in the presence of the principal and each other.142 The Act restricts who can act as witnesses. Neither the principal nor a person (to be) appointed as attorney can be a witness for this purpose.143 Only one of the witnesses can be a relative of the principal or the (intended) attorney,144 and one must be a person authorised by law to witness the signing of a statutory declaration.145 The enduring power must, in addition, contain a certificate signed by each witness stating that the principal signed the power freely and voluntarily in the presence of the witness and, at the time, appeared to the witness to have the capacity necessary to make the enduring power.146 An enduring power of attorney is effective in relation to an attorney only if the attorney has signed and dated a statement of acceptance in the approved form,147 which is then endorsed on or attached to the power.148 The statement of acceptance must include the requisite undertaking by the attorney as to the exercise of his or her obligations as attorney.149

Western Australia Under the Transfer of Land Act 1893 4.27 Western Australia has enacted no legislation dedicated to powers of attorney. This has meant no general statutory prescription as to the form, signature and witnessing of non-enduring powers of attorney. The general law thus applies as regards the requisite formalities,150 except to the extent that the Transfer of Land Act 1893 (WA) impacts on it. The latter states that the proprietor of any land under the Act, or of any lease, mortgage or charge,

may appoint any person to act for him or her in transferring the same, or otherwise dealing with it, by signing a power of attorney in [page 101] (or to the same effect of) the prescribed form.151 Every such power may be filed by lodging the original with the Registrar, who must note its effect in a book to be kept for that purpose. The book is separate from the Land Titles Register, and so powers of attorney are not, via noting, registered on any title. Noting neither validates the power nor conveys or alters any interest in land owned by the principal. But because the foregoing is the only means by which a person other than the registered proprietor can deal with land in Western Australia, filing the power in this fashion is apt. 4.28 Such a power is deemed to be duly executed if the Registrar is satisfied that each signature is witnessed by a person:152 who is not a party to the instrument or power of attorney; who is not a minor and not under any other legal disability; and whose full name, address and occupation are stated on the instrument or power of attorney. If it appears to the Registrar that a signature of a party to an instrument or a power of attorney has not been witnessed as required, the Registrar may nonetheless register or file and note the instrument or power of attorney if the genuineness of the signature of the party is proved to his or her satisfaction by a statutory declaration of a person who knows the party and the party’s signature.153

Enduring powers 4.29 The statutory creature that is the enduring power of attorney is addressed within the confines of the Guardianship and Administration Act 1990 (WA). That Act provides for the creation of an enduring power of attorney via an instrument in (substantially) the prescribed form,154 in which the principal declares that the power will continue in force notwithstanding

his or her subsequent legal incapacity, or will be in force only at a time when a declaration that he or she lacks legal capacity is in force.155 4.30 So far as witnessing is concerned, the Act states that an instrument is not effective to create an enduring power of attorney unless there are two attesting witnesses. Those witnesses must be authorised by law to take declarations;156 if only one of them is so authorised, the other must not be a minor or appointed as an [page 102] attorney under the power.157 The instrument must have endorsed on (or annexed to) it a statement of acceptance in (substantially) the prescribed form158 executed by the person(s) appointed to be the attorney159 of the power.160

Acceptance and disclaimer of attorneyship 4.31 In contract the notion of acceptance of an offer is what evidences the consensus or agreement essential to contracts. The giving of a power of attorney, on the other hand, is a unilateral act, and so its validity does not depend upon consensus or agreement evidenced by ‘acceptance’ by the intended attorney.161 In this sense powers of attorney are not unlike trusts, the existence and validity of which do not depend on either the trustee(s) or the beneficiary(ies) accepting the trust.

Disclaimer 4.32 Yet for the same reason that a person cannot be compelled to act as trustee (or, for that matter, to accept a benefit as a beneficiary) — that one person should not be able to cast upon another an obligation (or vest an entitlement) without the consent of that other — there is no legal requirement that a person actually act as an attorney. As in the case of trusts, it is possible

for an attorney to disclaim his or her appointment, which is an outcome the more likely if the appointment has been made without the attorney’s knowledge, acquiescence or consent. For a disclaimer to be effective, it must, upon an analogy with disclaimers by trustees,162 be made once an attorney becomes aware of his or her appointment but before exercising any authority under the power.163 Once the attorney has commenced exercising that authority, the ability to disclaim is lost and, should he or she wish to be relieved of attorneyship, must take the appropriate steps to resign from that role.164 4.33 The prospect that an attorney may either disclaim or retire can be anticipated by the principal by express provision in the power of attorney dealing with the consequences of this event. The instrument itself can make provision for the appointment of another (substitute) attorney,165 or can at the outset appoint multiple attorneys to act jointly and severally.166 [page 103]

Acceptance 4.34 Although the general law does not require ‘acceptance’ by an attorney to create a valid power of attorney, the statutorily recognised concept of the ‘enduring power of attorney’ attracts an acceptance requirement. The legislation generally states that an enduring power is not effective to confer authority on an attorney unless the attorney has accepted the appointment, by either signing the power of attorney167 or executing a statement of acceptance in the form required.168 It follows that acceptance for this purpose must be express, not by acquiescence or otherwise inferred in some other informal way. The New South Wales legislation expressly envisages that an attorney may accept the appointment at the time the instrument creating the enduring power is executed or at any time thereafter.169 Although other jurisdictions make no equivalent statutory provision, the position is likely to be the same, as there is no requirement that the attorney sign at the time the power is executed by the principal and, where a form is prescribed for acceptance, the legislation states that the form can be annexed to the power.

4.35 The statutory requirement that an attorney accept an enduring power of attorney is not aimed at converting the power into a contract. Blow J made this clear in Lincolne v Williams, in the terms of the Tasmanian legislation:170 [T]he giving and acceptance of an enduring power of attorney, without more, cannot amount to the making of a contract. The legislative requirement of written acceptance contained … serves important non-contractual purposes. It protects the [attorney] against the risk of becoming a trustee without his or her knowledge and consent. It

[page 104] also protects the [principal] from the risk that, once it is too late to make alternative arrangements, the [attorney] will turn out to be unwilling to act. Whilst it is a consequence of the legislation that mental incapacity on the part of the [principal] will result in a relationship of trustee and beneficiary coming into existence,171 it by no means follows that there is any contractual relationship between the parties. There is no reason why the statutory and fiduciary duties of [an attorney] who becomes a trustee should also be contractual duties. Whilst an enduring power of attorney might have some of the features of a contract, it remains in essence a unilateral instrument. In my view the bare giving and acceptance of the enduring power of attorney could not have resulted in a contract coming into existence.

What acceptance is designed to do is to ‘convey to the attorney that he or she is accepting serious responsibilities’,172 and to reduce the prospect of an attorney later refusing to act, and therefore frustrating the principal’s purpose, as a result of not having agreed to act in the first place.173

Registration of powers of attorney 4.36 The issue of whether or not the law ought to require registration of powers of attorney is one periodically aired in law reform debates, before law reform bodies and by commentators.174 Generally speaking, one or more aims usually drive statutory prescriptions for the registration of instruments. These include providing a public record of an instrument to third parties with a (potential) interest in the matter, a means of determining priorities between competing interests (usually in property) affected by the transaction, giving validity to certain transactions, maintaining a formal record of a transaction and/or a process whereby formality requirements for specified transactions are vetted. Those who favour a registration requirement generally do so by reference to one or more of these aims,175 and some suggest that it may

discourage the abuse of authority. Those who prefer that registration remain optional fear that overlaying enduring powers by a bureaucratic procedure would discourage their use and unduly consume state and individual resources, while impinging on a principal’s privacy.176 4.37 In each jurisdiction except Victoria and Western Australia177 provision exists for registration of powers of attorney, whether via powers of attorney legislation, under property legislation and/or, more generally, under the banner of legislation on the registration of deeds. Substantial commonality in statutory approach exists [page 105] across most jurisdictions, generally in a discretion to register powers of attorney, but there is a requirement that any power of attorney authorising dealings with land be registered to give validity to those dealings. Only Tasmania bucks the trend, as it requires registration of all powers of attorney as a precondition to their effectiveness178 (although the same has been recommended in Victoria).179 This has some parallels with the United Kingdom registration requirements for enduring powers (now termed ‘lasting powers’), which dictate that the power cannot be used until it is registered.180 As detail variations between the Australian jurisdictions remain, they are catalogued separately below. Provision is also made in most jurisdictions for the registration of the revocation of powers of attorney, or of events that trigger revocation, and this is addressed in Chapter 11.181

Australian Capital Territory 4.38 The dedicated powers of attorney legislation in the Australian Capital Territory — the Powers of Attorney Act 2006 — makes no provision for registration of powers. This is reserved to a more general statute, the Registration of Deeds Act 1957, which vests in a person a discretionary entitlement to enter a deed in the ‘general register of deeds’ maintained by the Registrar-General.182 This entitlement is open in the context of a power of attorney because, whether or not a power takes the form of a deed in the

Australian Capital Territory,183 the 2006 Act deems a power of attorney that fulfils the statutory requirements to be a deed.184 Under the 1957 Act, registered deeds affecting any land (including an estate or interest in land) or other property, if made in good faith and for valuable consideration, have priority according to the sequence of their registration.185 This priority is not lost by reason only of bad faith in the conveying party if the party taking beneficially acted in good faith and gave valuable consideration.186 4.39 Accordingly, although registration is discretionary, securing of priority may in some contexts make registration of a power of attorney a prudent course of action. Moreover, registration of a power of attorney under the 1957 Act is essentially mandatory in the event that a registered proprietor of any land or interest under the Land Titles Act 1925 (ACT) vests, via a power of attorney, in an attorney the authority to act for and on the proprietor’s behalf in respect of the transfer or other dealing with that land or interest. This is because the 1925 Act precludes the registration for its purposes of an instrument executed under the power of attorney unless the power of attorney has been registered under the 1957 Act.187

New South Wales 4.40 The Powers of Attorney Act 2003 (NSW) envisages that any instrument that creates a power of attorney may be registered by the Registrar-General in the General Register of Deeds kept under the Conveyancing Act 1919 (NSW).188 Although it has been suggested, in obiter, that the predecessor to the relevant provision was only intended to refer to powers of attorney that relate to dealings in land,189 that the current provision is located outside a ‘property statute’ and that, in any case, the General Register of Deeds kept under the 1919 Act can include instruments ‘whether affecting or relating to land or not’,190 may suggest the contrary to be the case. The point may, in any event, be moot so far as land is concerned, as the 2003 Act stipulates that a conveyance191 or other deed192 affecting land, with the exception of a lease for a term of three years or less, under a power of attorney has no effect unless the instrument creating the power is registered at Land and Property Information NSW.193 If the instrument is registered after

the time when the conveyance or other deed was executed, the conveyance or other deed has effect as if the instrument had been registered before that time.194

Northern Territory 4.41 The Powers of Attorney Act 1980 (NT) makes provision for the registration of an instrument creating a power of attorney,195 but does not require it except, in effect, in relation to a dealing with land (excepting a lease of land for a period not exceeding one year) purporting to take effect in pursuance of the exercise of a power of attorney. In the latter event, the dealing is of no force or effect unless the instrument creating the power is registered.196 If the dealing is effected before the instrument creating the power is registered, the dealing is deemed to take effect as if the instrument had been registered before the instrument purporting to give effect to the dealing.197 Attendant to the foregoing, the Land Title Act 2000 (NT) provides that the Registrar-General may, in accordance with the Powers of Attorney Act 1980, register an instrument creating a power of attorney.198 [page 107] The Powers of Attorney Regulations 1982 (NT) require the RegistrarGeneral to maintain a Register of Powers of Attorney,199 to include the prescribed particulars,200 and make explicit provision for the process and formalities pertaining to registrable powers.201 4.42 The foregoing only has application to non-enduring powers, and to enduring powers that were executed before 17 March 2014. From that date enduring powers can no longer be created in the Northern Territory, as the equivalent notion is subsumed within the broader concept of an ‘advance personal plan’202 under the Advance Personal Planning Act 2013 (NT). Under that Act, a dealing in relation to land (excepting a lease for a period not exceeding one year)203 that purports to take effect as a result of the exercise of authority by a ‘decision-maker’ (equivalent to an attorney) is of no effect unless, at the time the authority was purportedly exercised, an advance personal plan conferring authority to enter into that dealing was

registered.204 If, however, a plan authorising the decision-maker was in force at the relevant time, and is subsequently registered, the dealing takes effect on its registration.205 The Registrar-General is required to maintain a register of advance personal plans under which a decision-maker is authorised to enter into dealings in relation to land,206 although registration of a plan remains optional and non-registration does not affect its validity or effect.207

Queensland 4.43 The Powers of Attorney Act 1998 (Qld) makes separate provision for the registration of non-enduring powers of attorney208 and enduring powers of attorney,209 although in neither case does it mandate registration. The Land Title Act 1994 (Qld) requires the Registrar to keep a power of attorney register,210 in which he or she may register a power of attorney by recording its particulars if a request to register it is lodged and the power of attorney is deposited with the request.211 But as in other jurisdictions, registration becomes de facto mandatory by virtue of the fact that an instrument executed under the authority of a power of attorney cannot be registered unless the power has been registered.212 For a registered power, an act done by the [page 108] attorney under and in accordance with its terms has the same effect as if the act were done by the principal, and the power is evidence that the attorney is authorised to do anything within its terms.213 All powers of attorney that allow dealings with land under the Land Act 1994 (Qld) must be registered in the register.214 A power of attorney registered under the Land Title Act 1994 is taken to be a power of attorney registered for the Land Act 1994, and authorises the attorney to deal with any interest in land that may be dealt with by the principal (other than as trustee)215 under the power of attorney and the Land Act 1994.216

South Australia

4.44 Like the Australian Capital Territory, the dedicated powers of attorney legislation in South Australia — the Powers of Attorney and Agency Act 1984 — makes no provision for powers of attorney to be registered. It leaves this to the Registration of Deeds Act 1935, which applies to powers of attorney because, inter alia, the 1984 Act requires that powers of attorney be created by deed.217 The 1935 Act provides for the registration of a deed whereby land may be in any way affected in law or equity,218 adding that such a deed is:219 fraudulent and void at law and in equity against any subsequent registered purchaser, mortgagee, or party for or upon valuable consideration unless a memorial thereof is registered under this Act before the registration of the memorial of the deed … under which the subsequent purchaser, mortgagee, or party claims.

The foregoing applies even if, before or at the time of the making of the subsequent deed, the subsequent purchaser or mortgagee had notice of the prior deed.220 4.45 The Real Property Act 1886 (SA) provides that any person may, before or after becoming the registered proprietor of any land under the Act, by power of attorney authorise any person to act for him or her in making applications to bring any land under the provisions of the Act, and to execute all or any instruments that may be necessary for giving effect to any dealing with any land.221 Unlike other jurisdictions, this Act does not explicitly tie the enforceability of any such dealing to the registration of the power of attorney. However, it does require a duplicate or attested copy of the power of attorney to be deposited with the Registrar-General.222 [page 109]

Tasmania 4.46 Tasmania diverges from the general registration model adopted in other jurisdictions. Rather than making registration discretionary, the Powers of Attorney Act 2000 imposes upon the Recorder of Titles a duty to maintain a register of all powers of attorney.223 The Recorder must not register any power of attorney unless it complies with the Act (although there is a discretion in the Recorder to register even in the event of non-compliance)224

and is accompanied by a registration application.225 Provision is made for the lodgement of a power of attorney with the Recorder via delivery of the original document or, as authorised by the Recorder, via a copy of that document or in some other form.226 The register and the powers of attorney lodged for registration are public records.227 Accordingly, the Recorder must, on application and payment of any prescribed fee, furnish a person with a certified copy of any part of the register.228 The importance of registration appears from the Act stating that any act, deed or instrument done, executed or signed under a power of attorney by the attorney, has no legal effect unless the power was registered before the act, deed or instrument is done, executed or signed.229

Proof of powers of attorney by copy 4.47 Given that powers of attorney may be directed to dealings with multiple third parties, it is usual for multiple copies of the relevant instrument to be made, and supplied as a record for those third parties (banks being a common example). Accordingly, provided that the copy of a power of attorney is appropriately certified or verified, there should be no entitlement in a third party to require the surrender or production of the original instrument. 4.48 The powers of attorney legislation in several jurisdictions makes specific provision relating to the proof of instruments that are copies of the original, and these apply beyond provisions that entitle the relevant registering body or person to retain a copy of a power of attorney on the register. In New South Wales a legible document that is a certified copy of an instrument creating a power of attorney is declared to be evidence as against the principal under the power of the execution and contents of [page 110] the instrument, and as against any other person of the contents of the instrument.230 For this purpose, a document is a ‘certified copy of an instrument’ if:231

there is endorsed on the document a certificate — to the effect that the document is a true and complete copy of the contents of the instrument of which it purports to be a copy — by either the principal or a person (or person belonging to a class of persons) prescribed by the regulations;232 and each page of the document bears the signature of the person who gives the certificate. The Northern Territory, Queensland and Victorian powers of attorney legislation follows a similar schema in this regard. It generally provides for a power of attorney to be proved by a copy of the instrument, certified as prescribed.233 The requirements as to certification centre on the person who must act as certifier (either the principal or, in Queensland and Victoria, a person of a class specified)234 and the location of the certification (at the end of each page). In each of the above jurisdictions (excepting Victoria on the commencement of the Powers of Attorney Act 2014) the legislation explicitly states that it does not prevent a power of attorney being proved in some other legitimate way.235 In any case, evidence legislation in all jurisdictions contains provisions directed at proof of copies or reproductions of instruments236 that may apply to proof of powers of attorney.

Recognition of powers from outside the jurisdiction 4.49 The powers of attorney legislation in most jurisdictions makes provision for the recognition of a power of attorney executed under the law in another Australian jurisdiction. As regards enduring powers of attorney, the statutes in the territories, New South Wales, Queensland, South Australia and Victoria deem the power of attorney to be made under, and in compliance with, the relevant state or territory Act to the extent that the powers it gives could validly have been given by a power [page 111]

of attorney made under the local Act.237 Equivalent provision is made regarding non-enduring powers in the territories.238 The statutory requirement of registration of powers of attorney in Tasmania239 has required a slightly different approach to interstate recognition of powers. The Tasmanian Act states that an instrument creating a power of attorney that is registered in another Australian jurisdiction under a law that corresponds to the Act is taken to be registered in Tasmania for the purposes of the Act.240 It also allows an instrument creating a power of attorney to be registered in Tasmania for the purposes of the Act, whether or not it was executed in accordance with the law of Tasmania.241 But if that instrument is not executed in accordance with Tasmanian law, it can only be registered in Tasmania if it was executed in accordance with the law of another Australian jurisdiction or with the law of the place in which it was executed.242 Whether in relation to the registration of a power of attorney elsewhere, or its execution in accordance with the law elsewhere, a certificate of a legal practitioner243 to this effect is evidence of that fact.244 Alternatively, the Recorder may register a power of attorney if a copy of it has been certified by an authority exercising functions similar to those of the Recorder under the Act to be a true copy of that power of attorney or other instrument.245 A different process applies in Western Australia, which has no dedicated powers of attorney legislation. Instead, the Guardianship and Administration Act 1990 (WA), which gives effect to enduring powers of attorney, entitles an attorney under an enduring power created under the laws of another state, territory or country to apply to the State Administrative Tribunal for an order recognising that power as an enduring power of attorney for the purposes of the Act.246 If the tribunal is satisfied that the power in question corresponds sufficiently, in form and effect, to a power of attorney created under the Act, and that it is appropriate to do so, it may make the order requested.247 [page 112]

Joint appointments

Appointment of multiple attorneys 4.50 According to agency law, a principal can authorise co-agents to act on his or her behalf unless prohibited by a contractual commitment or by statute.248 In most jurisdictions this principle is given statutory effect or recognition vis-à-vis powers of attorney,249 but as it represents the general law, that in other jurisdictions no explicit provision exists is by the way.

Joint appointment, or joint and several appointment? 4.51 Perhaps the most critical issue arising out of the appointment of multiple attorneys involves ascertaining whether appointment is intended to be joint, or alternatively joint and several. The difference is significant: an authority given jointly and severally may be acted upon by any or all of the co-attorneys so as to bind the principal,250 whereas a joint authority can be acted upon only by the co-attorneys jointly.251 The issue also surfaces in the context of the revocation or termination of the power of attorney.252 Ultimately, at general law, whether an appointment is joint, or joint and several, depends on the intention of the principal, as evidenced chiefly by the terms in which the appointment is expressed.253 There is case authority in the agency context [page 113] that the law presumes, subject to evidence to the contrary, that co-agents exercise joint authority,254 although this presumption awaits full endorsement by Australian courts.255 Statute addresses this issue in the Australian Capital Territory, which states that if two or more attorneys are authorised under a power of attorney in relation to a matter, and the power of attorney does not state how they are to share a power given to them, ‘[t]he attorneys are authorised to exercise the power together but not separately’.256 It therefore presumes a joint appointment, and a recommendation to the same effect in Victoria has translated to the impending Powers of Attorney Act 2014 (Vic).257 The Queensland legislation prescribes likewise albeit limited to enduring powers of attorney.258

Number of attorneys 4.52 An issue debated before law reform bodies has been whether the law ought to require enduring powers of attorney to appoint a minimum of two attorneys, an approach usually justified on the ground that two attorneys are a better safeguard on abuse of authority than a single attorney. Yet this view has not endeared itself to most law reform bodies, which have recommended that a single attorney should be sufficient.259 This has translated to the Australian statutes, none of which require more than one attorney to be appointed. 4.53 On the other hand, excepting Western Australia, the Australian powers of attorney legislation does not limit the number of attorneys that may be appointed.260 As a matter of practice, though, appointment of too many attorneys could create [page 114] havoc in the exercise of the power, whether that appointment is joint or whether it is several, albeit for different reasons. In Western Australia the legislation states that a ‘donee’ (that is, an attorney) includes ‘two persons appointed, whether jointly or severally, to act under [an enduring] power of attorney’.261 In Ricetti v Registrar of Titles262 Miller J construed this as a limit on the number of donees that may be appointed under an enduring power of attorney. His Honour conceded that this may have an unfortunate result for persons who wish to appoint more than two attorneys — as in the case in question where the plaintiff was anxious to have his wife and two sons act as his attorneys — but that the Parliament limited the number of donees to two was ‘apparent on a plain reading of the section’.263 One way to (partially) address this issue is for the power of attorney to make express provision for the appointment of a person as a substitute attorney, to become an attorney on the occurrence of events or circumstances specified in the instrument, an option envisaged by the Western Australian legislation vis-àvis enduring powers.264

Acceptance in the context of multiple attorneys under an enduring power 4.54 The appointment of multiple attorneys may also create difficulties arising out of the statutory requirement, where applicable, that an attorney under an enduring power accept the appointment.265 Little in the way of difficulty arises if the appointment is intended to be several rather than joint; in this event, as a matter of principle an attorney who validly accepts can exercise authority even if the others do not. It is where the appointment is intended to be joint that difficulties may arise. A joint appointment presupposes that all attorneys must act; if not all attorneys accept, then the principal’s intentions will be frustrated unless the principal has anticipated this possibility by provision in the power of attorney itself. 4.55 To ameliorate this problem, the powers of attorney statutes in the Australian Capital Territory and New South Wales oust what would otherwise be the outcome. In the former jurisdiction, if an enduring power of attorney authorises three or more attorneys to exercise a power jointly but not severally, and does not require a stated number of attorneys to accept the power of attorney before the attorneys may exercise the power, if at least two of the attorneys have accepted the power of attorney, they may exercise the power.266 The legislation makes clear, though, that if the power of attorney requires a stated number of attorneys to exercise a power together, it must not be exercised unless that number of attorneys accepts the power.267 In New South Wales the Powers of Attorney Act 2003 essentially removes the limiting effect of a joint appointment, as it does not premise the effectiveness of the power upon acceptance by all attorneys, provided at least one of them accepts. It states that if more than one attorney is appointed, the enduring power of attorney operates to confer authority only in relation to such of the attorneys who validly accept their appointments.268 [page 115]

Alternative or substitute attorneys

4.56 Statute generally makes provision for the appointment of substitute attorneys by the court or relevant tribunal in defined circumstances.269 Yet there appears nothing in principle to preclude the creation of a power of attorney under which the principal stipulates the occasions on which an alternative, substitute or additional attorney ought to take office. Indeed, this may likely be an appropriate course, especially in the case of an enduring power of attorney once the principal has lost mental capacity. Lewison J illustrated the flexibility of powers of attorney in this regard in Re J (Enduring Power of Attorney) as follows:270 [S]ince there is no limit to the number of enduring powers of attorney that a donor may create a donor may create one enduring power of attorney governing his bank account and another governing his home; or one enduring power of attorney dealing with his property in England, and another dealing with his property in Wales. Given the ability to place temporal conditions or limitations on the operation of an enduring power of attorney it is also possible to create powers which will have alternative operation. Thus a donor may create one power in favour of his wife and another in favour of his children, the latter being subject to a condition that it is not to come into operation unless his wife disclaims under the first power. The same technique may be used to create enduring powers of attorney that have successive operation. Thus a donor may create one power in favour of his wife and another in favour of his children, subject to a restriction that it is not to come into operation during his wife’s lifetime.

His Lordship thus had little difficulty in concluding that an instrument appointing successive or alternative attorneys was capable of being a valid enduring power of attorney under statute. He reasoned that as the appointment of successive attorneys is valid at general law, it should not be assumed that Parliament intended to alter the law, and inclined against a construction of a statute that would leave technical traps for principals. And as a will appointing alternative or successive trustees can validly deal with the management of the affairs of a deceased person after his or her death, there was no justification for the law to approach the matter differently for the management of those affairs during his or her lifetime.271 4.57 The point is addressed by statute in the territories and Queensland, which envisages that a principal (in Queensland, under an enduring power; in the Northern Territory, under an advance personal plan)272 may authorise different attorneys to act in different circumstances, on the happening of different events or in relation to different matters.273 Whether or not these provisions extend to the appointment of consecutive substitute attorneys is unclear, although an example

[page 116] attached to the Northern Territory suggests this as a possibility.274 At the same time, though, the Queensland provision, being phrased in the singular, may suggest otherwise. It is also unclear as to whether the original attorney’s appointment revives once the trigger for the substitute attorney has expired. This may ultimately rest on the terms in which the substitution is expressed.275 Provision is made for a principal to appoint an ‘alternative attorney’ under an enduring power by the Instruments Act 1958 (Vic), an appointment triggered by the death, absence or legal incapacity of the attorney for whom the alternative attorney is appointed.276 The language of the relevant section does not appear to envisage a successive alternative appointment but, as to absence or legal incapacity, suggests that the alternative appointment is effective only ‘during’ the period of the absence or legal incapacity. The original appointment, it seems, revives upon any resumption of residence or capacity. Once the Powers of Attorney Act 2014 (Vic) enters into force, specific provision will exist for the appointment of alternative attorneys for both enduring and non-enduring powers,277 the latter implementing a law reform commission recommendation.278 Also, the language of the new sections is amenable to a successive alternative appointment, especially for enduring powers, wherein the alternative appointment is, subject to any contrary indication, triggered by the death, incapacity, unwillingness or removal of the original attorney.279 The Guardianship and Administration Act 1990 (WA), in allowing a principal, in an enduring power itself, to appoint a substitute attorney, who becomes the attorney ‘only on, or during, the occurrence of events or circumstances specified in the instrument’,280 appears not to extend to successive substitute appointments. In using the term ‘during’ in this context, it countenances, it seems, a revival of the original attorney’s appointment of revival in the event that the events or circumstances in question pass. 4.58 As from 13 September 2013 the issue is also addressed by the Powers of Attorney Act 2003 (NSW), by way of a provision that entitles a principal to appoint a person as a substitute attorney for a specified person who is appointed by the principal as an attorney.281 This seeks both to clarify the

position of substitute attorneys, and put beyond doubt that a principal may appoint a substitute attorney. The relevant provision, in adding that the principal may appoint ‘one or more substitute attorneys’,282 does not make clear, however, whether that phrase refers only to the appointment of one or more concurrent substitute attorneys or can instead extend to the appointment of one or more consecutive substitute attorneys (in effect, a substitute for a substitute). The latter appears a sensible construction because it gives that provision a genuine role to perform and is, moreover, consistent with a core object of the amending legislation [page 117] — to provide for the continuation of the power of attorney in the event of a vacancy in office.283 The new provision adds that a substitute attorney may act as attorney ‘during’ a vacancy in the office of the specified attorney or a vacancy of a kind specified in the instrument creating the power of attorney.284 As in the case of the parallel Victorian and Western Australian provisions noted above, the statutory use of the term ‘during’ suggests scope for a revival of the original attorney’s appointment and corresponding revocation of the substitute appointment. Had the drafters wished to make it clear(er) that the substitute attorney’s role would be ongoing, they could have chosen a word such as ‘upon’ in place of ‘during’.

Multiple principals 4.59 It is less common to encounter multiple principals than multiple attorneys. And it makes little sense to have multiple principals under an enduring power of attorney because incapacity may come upon one principal and not another, or come upon each of them but at different times. For this reason, the powers of attorney legislation largely eschews the issue. There is a need, accordingly, to resort to the general law in its application to nonenduring powers. 4.60 Agency law principle dictates that where two or more persons (coprincipals) give authority to an agent, that authority is presumed to be a joint

authority to act for them. This dictates that the co-principals can jointly sue the agent for the agent’s defaults,285 are jointly liable to the agent in respect of the agent’s rights,286 and must each ratify an agent’s unauthorised acts to be bound.287 Determining whether an appointment is joint, as opposed to joint and several, is also important so far as the termination of agency is concerned. As a general principle, an agent’s authority derived from joint principals who are jointly interested in its execution ends on the death of one of the principals unless the appointment indicates otherwise.288 It may therefore be necessary to determine whether or not the authority is one intended to be joint, or rather several. Again, this rests heavily on the terms of the power, construed in the context of the parties’ relationship. The issue arose in Cox [page 118] v Goldcrest Developments (NSW) Pty Ltd289 whether a power of attorney granted by A and B (being husband and wife, Mr and Mrs Jeffrey) to C (the plaintiff, Mrs Cox) terminated on A’s death. Young J noted that, on a process of construction of the power, there were indications both ways as to ‘whether it is a power given by the jointure of the husband and wife or by each of them severally’.290 Yet his Honour ultimately sided with a joint and several grant for the following reasons:291 In the instant case there is evidence that the property was jointly owned, so that one could reasonably expect the power of attorney to be a power of attorney which would operate jointly whilst both survived and then for the survivor. There is also the use of the word ‘my’ in the power of attorney and the additional evidence by conduct that since the death of Mr Jeffery, Mrs Jeffery has on at least 10 occasions been involved in discharging mortgages through her attorney, Mrs Cox. Mrs Cox has met with Mrs Jeffery. Both the solicitors and Mrs Cox have reported to Mrs Jeffery what they are doing and Mrs Jeffery has always indicated complete satisfaction. On all these matters it is clear that the power of attorney was intended to operate and does operate as a grant of authorisation by Mr and Mrs Jeffery jointly and severally. This being so, the death of Mr Jeffery does not terminate Mrs Cox’s authority to act for Mrs Jeffery.

Appointing an attorney by class 4.61 In appointing an attorney, a principal need not necessarily specify one or more individuals by name. Provided that the intended attorney(s) are

identifiable, there is no proscription against their appointment by the occupant(s) of a particular position for the time being.292 This has the potential advantage of ensuring continuity of the attorneyship, which may otherwise terminate on the death293 or incapacity294 of an individual named as attorney. 4.62 The powers of attorney statutes in the Australian Capital Territory and Queensland make specific provision to this effect.295 The Tasmanian legislation adds that a non-enduring power of attorney is taken to be valid notwithstanding that the attorney is expressed to be appointed as a member of a specified class of persons.296 In Victoria the legislation allows a person who is a member of a religious order to appoint the person who is the holder of the position of Victorian head of that order, or the head of a local chapter of that order in Victoria, as the attorney under an enduring power of attorney.297 With the commencement of the Powers of Attorney Act 2014 (Vic), the position in Victoria will align, vis-à-vis enduring powers, with the broader provisions in the Australian Capital Territory and Queensland.298

1.

See 1.8–1.13.

2.

See 2.2–2.7.

3.

Cf Alcock, p 3, who suggests that ‘a mere parol authority may be sufficient to constitute an attorney’, but the case cited as authority (Re Whitley Partners Ltd (1886) 32 Ch D 337) does not support this proposition.

4.

See, for example, Matter of the Estate of Mehus (1979) 278 NW 2d 625 at 629 (ND); Kisselbach v County of Camden (1994) 638 A 2d 1383 at 1386 (NJ App); Estate of Littlejohn (2005) 698 NW 2d 923 at 925 (ND).

5.

See, for example, Arcweld Manufacturing Co v Burney (1942) 121 P 2d 350 at 354 (Wash); Alexopoulos v Dakouras (1970) 179 NW 2d 836 at 840 (Wis).

6.

See, for example, Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 at 454 (Del).

7.

See, for example, Lim Eng Chuan Sdn Bhd v United Malayan Banking Corp Bhd [2005] 4 MLJ 172 at [13] per Suriyadi J (HC).

8.

See 4.4.

9.

See 4.6–4.30.

10. See 11.25–11.27. 11. See 4.6–4.30, 4.34. 12. Kisselbach v County of Camden (1994) 638 A 2d 1383 at 1386 (NJ App) (where on the facts there

was no provision in the document in question that expressly provided, as required by the relevant statute, that the power would be enduring). 13. Berkeley v Hardy (1826) 5 B & C 355; 108 ER 132. 14. See, for example, Commissioner of Stamps (Vic) v Papalia (1982) 12 ATR 866 at 869 per Crockett J (SC(Vic)) (who opined that, although it may not be completely clear, the balance of authority appears to support the view that the term ‘power of attorney’ is applicable only to an authority conferred by deed); Overseas Trust Bank Ltd v Tang Chi-ching [1994] 2 HKLR 73 at 74 per Kempster JA, with whom Clough and Power JJA concurred (‘A power of attorney is a deed whereby the principal confers authority upon his agent’); Re J (Enduring Power of Attorney) [2009] 2 All ER 1051; [2009] EWHC 436 (Ch) at [4] per Lewison J (who remarked that at common law a power of attorney is an agency created by deed); Houston v Houston (2012) 352 DLR (4th) 125; [2012] BCCA 300 at [26] per Newbury JA, with whom Low and Groberman JA concurred (‘At common law, where an agency was granted by deed giving specified authority to the agent, it was called a “power of attorney”’; emphasis in original); ABL Custodian Services Pty Ltd v Wade [2013] VCC 878 at [30] per Judge Lacava. Cf Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 at 454 (Del) (‘no form or method of creation [was] mandated’ by the general law). 15. See 1.2. 16. In Commissioner of Stamps (Vic) v Papalia (1982) 17 ATR 866 at 869–70 Crockett J (SC(Vic)) observed that ‘[j]ust where the dividing line between formality and informality in a document may lie may not be easy to define’, an instrument under seal (namely, a deed) can be described as a formal document, and to this end can, if this is the intention, be a power of attorney. 17. See 2.2–2.7. 18. Powers of Attorney Act 2006 (ACT) s 29(1) (taken to be a deed, even though it is not expressed to be a deed or to be sealed); Powers of Attorney Act 2000 (Tas) s 49 (valid and effectual to all intents and purposes as if made by deed duly executed and acknowledged; in any event, the legislation identifies a deed as one of the three options whereby a power of attorney (including an enduring power) may be created: ss 18(1) (non-enduring powers of attorney), 30(1) (enduring powers of attorney): see 4.21). 19. Powers of Attorney Act 2003 (NSW) s 8 (an instrument, whether or not under seal, that is in or to the effect of that prescribed by the regulations, and is duly executed, creates a ‘prescribed power of attorney’ for the purposes of the Act (equivalent to the previous Conveyancing Act 1919 (NSW) s 163B(1)); Powers of Attorney Act 1980 (NT) s 6(3). See also Powers of Attorney Act 2003 (NSW) s 7(2) (which states that the Act does not affect the operation of the Conveyancing Act 1919 (NSW) Pt 3, which contains general provisions relating to the execution and effect of deeds, except to the extent that the 2003 Act provides otherwise, whether expressly or by necessary intention). 20. The same applies vis-à-vis enduring powers of attorney in Victoria — which are also taken to be and have effect as a deed even if not expressed to be executed under seal (Instruments Act 1958 (Vic) s 125C; Powers of Attorney Act 2014 (Vic) s 81 (yet to commence)) — but as enduring powers are created by statute, and not recognised at general law (see 1.25–1.27), this says nothing regarding the general law position. 21. Powers of Attorney and Agency Act 1984 (SA) ss 5(1) (general powers of attorney), 6(1) (enduring powers of attorney): see 4.19. 22. Found in Instruments Act 1958 (Vic) Sch 12; Powers of Attorney Act 2014 (Vic) Sch (yet to commence).

That the attorney was not required to indicate his or her assent by signature reflects the notion that 23. a power of attorney was not ordinarily viewed as a contract: see 2.2–2.7. 24. In TCB Ltd v Gray [1986] Ch 621, a case involving whether a document purporting to be a power of attorney had been ‘sealed by, or by direction and in the presence of, the donor of the power’ for the purposes of the Powers of Attorney Act 1971 (UK) s 1(1), Browne-Wilkinson VC (at 633) noted that ‘[t]he courts have gone a long way towards holding that any document delivered as a deed (even though nothing is done to the document itself at the time of execution) is proved to have been executed under seal’. Yet as on the facts there was no seal or other mark on the document to indicate that it had been sealed, nor was there any oral evidence to suggest that the intended principal did anything when executing it beyond signing it, to rule that the instrument had been sealed ‘would not only be flying in the face of what actually happened, but also disregarding the statutory requirement that the document should be sealed’. His Lordship’s ruling was affirmed on appeal: TCB Ltd v Gray [1987] Ch 458n. 25. See 4.36–4.46. 26. See 4.47, 4.48. 27. See, for example, ALRI, recommendations 8 and 9 (and the backdrop to this recommendation in ALRI (DP), pp 47–51); ILRC, p 10; Law Com 122, pp 24–5. 28. See the prescribed forms in Powers of Attorney Regulations 2011 (NSW) Sch 2. 29. Advance Personal Planning Act 2013 (NT) s 9(1)(a) (referring to the form approved under s 86(1), which is found at ). 30. See 4.34. 31. J L Rhein, ‘No One in Charge: Durable Powers of Attorney and the Failure to Protect Incapacitated Principals’ (2009) 17 Elder LJ 165 at 196. 32. ALRI (DP), p 40; ILRC, p 8; NLRC, p 32. 33. See, for example, ALRI (DP), p 41; ILRC, p 9; Law Com 122, p 26; NLRC, pp 34–5; WCLRA, p 21. 34. See, for example, ALRC, p 12; TLRC, p 14. 35. See, for example, ALRI (DP), p 43 (which believed that such a requirement would introduce ‘unnecessary complexity’); Law Reform Commission of Hong Kong, Enduring Powers of Attorney, March 2008, pp 5–9, 29–33 (opining that the minimal take-up for enduring powers of attorney under the original enduring powers legislation was largely due to its requirement that it be signed before both a medical practitioner and a lawyer; its recommendation that the medical practitioner witness requirement be removed was implemented via the Powers of Attorney (Amendment) Ordinance 2011 (HK)); NSWLRC, pp 19–20; NZLC, p 12 (which decided against a medical witness/signer, in favour of a solicitor witness/signer because ‘solicitors regularly make the same sorts of judgment as to capacity in relation to the execution of wills, and in practice consult with appropriately qualified medical practitioners if in doubt’, and ‘may be expected to approach the execution of enduring powers of attorney with the same caution, and of course they will be financially liable if any negligent breach of their professional obligations in this respect is causative of loss’). Ireland appears unique in requiring a medical practitioner witness: Powers of Attorney Act 1996 (Ireland) s 5(2); Enduring Powers of Attorney Regulations 1996 (Ireland) Sch 1. 36. See, for example, ILRC, p 9; Law Com 122, pp 26–7; NZLC, pp 11–12 (albeit limited to where: (1) the attorney is not the principal’s spouse or de facto partner; and (2) the principal is either aged 68 years or over, or is a patient or resident in any hospital, home or other institution).

37. See, for example, ALRI, Recommendations 4, 5 and 7. Contra WCLRA, pp 20–1. 38. Coles v Trecothick (1804) 9 Ves 234 at 251; 32 ER 592 at 599 per Lord Eldon LC; Freshfield v Reed (1842) 9 M & W 404; 152 ER 171; Wickham v Marquis of Bath (1865) LR 1 Eq 17 at 24, 25 per Romilly MR; Seal v Claridge (1881) 7 QBD 516 at 519 per Lord Selborne LC (‘the common sense of mankind has always rejected the notion that the party to a deed could also attest it’); Re Parrott [1891] 2 QB 151 at 153 per Cave J (‘Obviously, the requirement of an attesting witness is inconsistent with the grantor attesting his own signature’); Mostyn v Mostyn (1989) 16 NSWLR 635 at 639 per Young J. 39. Seal v Claridge (1881) 7 QBD 516 at 519 per Lord Selborne LC. 40. See, for example, Re Hebb and Registrar of Titles (1982) 142 DLR (3d) 729 at 732–6 per de Weerdt J (SC(NWT)). 41. Powers of Attorney Act 2006 (ACT) s 22 (see 4.11); Powers of Attorney Act 2003 (NSW) s 19(1) (c) (see 4.13); Advance Personal Planning Act 2013 (NT) s 10(3)(b)(i) (in the context of ‘advance personal plans’, as to which see 1.44); Powers of Attorney Act 1998 (Qld) s 44(4), 44(5) (see 4.18); Instruments Act 1958 (Vic) s 125A (to become Powers of Attorney Act 2014 (Vic) s 36) (see 4.26). 42. See 3.5–3.23. 43. These were issued in June 2005 by the Queensland Office of the Adult Guardian (titled ‘Guidelines for Witnessing Enduring Documents’), and are available on the website of that office: . 44. See, for example, Legal Services Commissioner v Ford [2008] LPT 12 (involving a client who was an elderly person residing in a nursing home, and was cutting her family out of her will and instead leaving everything to the person who was facilitating the arrangements, Fryberg J held that, in attesting a power of attorney for the client, the respondent lawyer had ‘failed to conduct appropriate inquiries to satisfy himself that [the client] fully understood the legal effect of the documents and was capable of executing them’, and had ‘permitted [the client] to sign the document in circumstances where he ought to have known that doubts might be raised about her capacity to sign the documents’; the lawyer was found to have committed unsatisfactory professional conduct, and was publicly reprimanded); Legal Services Commissioner v de Brenni [2011] QCAT 340; Legal Services Commissioner v Comino [2011] QCAT 387 (each involving cases similar to Ford) 45. Powers of Attorney Act 2006 (ACT) s 96(1), 96(3). 46. AF2007-54: see . 47. AF2007-52: see . 48. As to the meaning of ‘general power of attorney’ and ‘enduring power of attorney’ for the purposes of the Powers of Attorney Act 2006 (ACT) see 1.37, 1.38. 49. Namely Nicholas J in Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd [2004] NSWSC 530; BC200404323, discussed at 1.39, 1.40. 50. See 1.40. 51. Legislation Act 2001 (ACT) s 255(4), 255(5). 52. A person is ‘eligible to sign’ a power of attorney for the principal if the person: (a) is an adult; (b) is not a witness for the power of attorney; and (c) is not an attorney for the principal: Powers of Attorney Act 2006 (ACT) s 20.

53. Powers of Attorney Act 2006 (ACT) s 19(1). 54. Powers of Attorney Act 2006 (ACT) s 19(2). 55. Powers of Attorney Act 2006 (ACT) s 22(1). Equivalent provision is made for a certificate where another person signs the power of attorney for the principal: s 22(2). 56. Powers of Attorney Act 2006 (ACT) s 21(1). 57. ‘Relative’, of a person (‘the related person’), means: (a) a person related by blood, affinity or adoption to the related person; or (b) a domestic partner (defined in the Legislation Act 2001 (ACT) s 169): Powers of Attorney Act 2006 (ACT), Dictionary. ‘Affinity’ means affinity derived through marriage or any other domestic partnership: Dictionary. 58. Powers of Attorney Act 2006 (ACT) s 21(2). 59. Powers of Attorney Act 2006 (ACT) s 21(3) (see Statutory Declarations Act 1959 (Cth) and Statutory Declarations Regulations 1993 (Cth) Sch 2, which apply to the making of declarations in the Australian Capital Territory: Legislation Act 2001 (ACT) s 54). 60. Powers of Attorney Act 2006 (ACT) s 23. As to the role of acceptance in this context generally see 4.34, 4.35. 61. On this point see also Interpretation Act 1987 (NSW) s 80(1), 80(2) (which envisages substantial compliance with a form being sufficient, except to the extent that the Act requires the form to be completed in a specified manner, or requires specified information to be included in, attached to or furnished with the form). 62. Powers of Attorney Act 2003 (NSW) s 8 (paralleling the previous Conveyancing Act 1919 (NSW) s 163B(1)), as amended by the Powers of Attorney Amendment Act 2013 (NSW) (with effect from 13 September 2013). 63. Powers of Attorney Regulation 2011 (NSW) cl 4A(1) Sch 2. 64. Found in Powers of Attorney Act 2003 (NSW) Sch 2 (now repealed). 65. Powers of Attorney Regulation 2011 (NSW) cl 4A(2), 4A(3). 66. ‘Instrument’ includes a deed: Powers of Attorney Act 2003 (NSW) s 3(1). 67. Powers of Attorney Act 2003 (NSW) s 19(1). 68. For this purpose, ‘prescribed witness’ means: (a) a registrar of the Local Court; (b) a barrister or solicitor of a court of any state or territory of the Commonwealth; (c) a licensee under the Conveyancers Licensing Act 2003 (NSW), or an employee of the NSW Trustee and Guardian or a trustee company within the meaning of the Trustee Companies Act 1964 (NSW), who has successfully completed a course of study approved by the Minister, by order published in the Gazette, for this purpose; (d) a legal practitioner duly qualified in a country other than Australia, instructed and employed independently of any legal practitioner appointed as an attorney under the instrument; or (e) any other person (or person belonging to a class of persons) prescribed by the regulations for this purpose: Powers of Attorney Act 2003 (NSW) s 19(2). 69. Powers of Attorney Act 2003 (NSW) s 20(1). As to the role of acceptance in this context generally see 4.34, 4.35. 70. Powers of Attorney Act 1980 (NT) s 6(3). 71. Powers of Attorney Act 1980 (NT) s 6(2). 72. A prescribed witness is a person mentioned in Powers of Attorney Act 1980 (NT) Sch 2. It lists the following persons as prescribed witnesses: a Commissioner for Oaths; a member of the Legislative

Assembly; a legal practitioner; a person holding office under the Supreme Court Act 1979 (NT), Justices Act 1928 (NT), Local Court Act 1989 (NT) or Registration Act 1927 (NT); a police officer; a person licensed as a conveyancing agent or real estate agent under the Agents Licensing Act 1979 (NT); a Notary Public; and any other person approved by the Registrar-General. Where the instrument is executed outside of the Territory, a prescribed witness is any person approved by Registrar-General’s directions. 73. Powers of Attorney Act 1980 (NT) s 6(4). 74. Powers of Attorney Act 1980 (NT) s 6(1). 75. See 3.36. 76. ‘Legal incapacity’, in relation to a person, means such a state of mental or physical incapacity that he is not capable of managing his affairs: Powers of Attorney Act 1980 (NT) s 5. 77. The prescribed form is found in Powers of Attorney Act 1980 (NT) Sch 1 (‘Form of acceptance of enduring power of attorney’). As to the role of acceptance in this context generally see 4.34, 4.35. 78. Powers of Attorney Act 1980 (NT) s 13. 79. The phrase ‘near relative’ is not defined in the Powers of Attorney Act 1980 (NT) or the Interpretation Act 1978 (NT). It is, however, defined for the purposes of the Adult Guardianship Act 1988 (NT) (see s 3(1), 3(2)), which may supply an indication of what could come within the phrase. 80. Powers of Attorney Act 1980 (NT) s 14. 81. As to advance personal plans see 1.44. 82. The Minister may approve forms for this purpose: Advance Personal Planning Act 2013 (NT) s 86(1). The relevant form is found at . 83. Advance Personal Planning Act 2013 (NT) s 9(1)(a). 84. Advance Personal Planning Act 2013 (NT) s 10(1). The subsection envisages that, should the adult be unable to sign, the plan may be signed by a representative acting on the direction, and in the presence of, the adult. A representative must be is at least 18 years of age, and must not be, or be being appointed by the plan as, a decision-maker for the adult: s 10(4). 85. Advance Personal Planning Act 2013 (NT) s 10(2). ‘Authorised witness’ means: (a) a person who is authorised under the Oaths, Affidavits and Declarations Act 2010 (NT) to administer an oath; or (b) a person prescribed by regulation to be an authorised witness (see Advance Personal Planning Regulations 2014 (NT) reg 3): Advance Personal Planning Act 2013 (NT) s 10(5). 86. Advance Personal Planning Act 2013 (NT) s 10(3). 87. ‘Agent’ means a decision-maker, adult guardian, manager (under the Aged and Infirm Persons’ Property Act 1979 (NT)) or enduring attorney for the adult or other person who has lawful authority to manage the adult’s affairs: Advance Personal Planning Act 2013 (NT) s 3. 88. Advance Personal Planning Act 2013 (NT) s 13(2). 89. Advance Personal Planning Act 2013 (NT) s 13(3). 90. See Interpretation Act 1978 (NT) s 68 (‘Strict compliance with the forms prescribed by or under an Act is not necessary and substantial compliance, or such compliance as the circumstances of a particular case allow, is sufficient’). 91. Powers of Attorney Act 1998 (Qld) s 11. As to the meaning of ‘general power of attorney’ for the purposes of the Act see 1.46, 1.47.

92. Powers of Attorney Act 1998 (Qld) s 44(1). Recommendations have been made regarding the redrafting of the approved forms to make them clearer, by way (inter alia) of explanatory notes, to prospective principals and attorneys: QLRC, Vol 3, pp 220–1 (recommendations 16-11, 16-12, 1613, 16-16, 16-17). 93. Powers of Attorney Act 1998 (Qld) s 44(2). As to what are ‘advance health directives’ see 1.48. 94. Under Powers of Attorney Act 1998 (Qld) s 161. 95. See . 96. Acts Interpretation Act 1954 (Qld) s 49(1), 49(2). 97. Powers of Attorney Act 1998 (Qld) s 12(2). 98. Powers of Attorney Act 1998 (Qld) s 12(1). 99. Powers of Attorney Act 1998 (Qld) s 12(3). As to the rules about the execution of instruments by corporations see 7.13. 100. Powers of Attorney Act 1998 (Qld) s 28 (as well as advance health directives: see 1.48). 101. An ‘eligible signer’ is a person who is at least 18 years old, is not the witness for the document, and is not an attorney of the principal: Powers of Attorney Act 1998 (Qld) s 30(1). A person is not excluded from being an eligible signer merely because he or she is an attorney’s employee who signs the document while acting in the ordinary course of employment: s 30(2). For this purpose, ‘attorney’ means: (a) a person who is an attorney of the principal, whether under the document or otherwise; or (b) if the document is all or part of an enduring document — a person who will be an attorney of the principal under the enduring document: s 30(3). 102. Powers of Attorney Act 1998 (Qld) s 44(3). For this purpose, an ‘eligible witness’ is a person who: (a) is a justice, commissioner for declarations, notary public or lawyer; (b) is not the person signing the document for the principal; (c) is not an attorney of the principal; (d) is not a relation of the principal or a relation of an attorney of the principal; (e) if the document gives power for a personal matter – is not a paid carer or health provider of the principal: s 31(1). A person is not excluded from being an eligible witness merely because he or she is an attorney’s employee who is the witness for the document while acting in the ordinary course of employment: s 31(2). For this purpose, ‘attorney’ means: (a) a person who is an attorney of the principal whether under the document or otherwise; or (b) if the document is all or part of an enduring document — a person who will be an attorney of the principal under the enduring document: s 31(3). 103. Powers of Attorney Act 1998 (Qld) s 44(4). Equivalent provision is made for a certificate where another person signs the enduring power of attorney for the principal: s 44(5). 104. Powers of Attorney Act 1998 (Qld) s 44(8). As to the role of acceptance in this context generally see 4.34, 4.35. 105. See 1.51. 106. Namely Powers of Attorney and Agency Act 1984 (SA) Sch 1. 107. Powers of Attorney and Agency Act 1984 (SA) s 5(1). See also Acts Interpretation Act 1915 (SA) s 25 (‘Whenever forms are prescribed or approved under any Act, forms to the same effect are sufficient provided that deviations from the prescribed or approved forms are not calculated to mislead’). 108. Powers of Attorney and Agency Act 1984 (SA) s 6(1). 109. The prescribed form is found in Powers of Attorney and Agency Act 1984 (SA) Sch 2.

110. Powers of Attorney and Agency Act 1984 (SA) s 6(2). 111. This is so even though the Acts Interpretation Act 1915 (SA) s 34 states that where, in any Act, the word ‘may’ is used in conferring a power, it implies that the power may be exercised or not, at discretion, as this appears to be directed not at powers to create documents but at discretions vested in identified persons. 112. Form 1 is found in Powers of Attorney Act 2000 (Tas) Sch 1. 113. As to special powers of attorney see 1.19–1.23. 114. Form 2 is found in Powers of Attorney Act 2000 (Tas) Sch 1. 115. Powers of Attorney Act 2000 (Tas) s 18(1). As to general powers of attorney see 1.19–1.23. 116. Cf Acts Interpretation Act 1931 (Tas) s 10A(1)(c) (the word ‘may’ is to be construed as being discretionary or enabling, as the context requires), which does not apply to the Powers of Attorney Act 2000 (Tas) because the latter was passed before the date on which s 10A commenced: Acts Interpretation Act 1931 (Tas) s 10A(2). 117. Powers of Attorney Act 2000 (Tas) s 30(1). 118. Form 3 is found in Powers of Attorney Act 2000 (Tas) Sch 1. 119. Form 4 is found in Powers of Attorney Act 2000 (Tas) Sch 1. 120. Pursuant to the Powers of Attorney Amendment Act 2013 (Tas). 121. ‘Close relative’ is defined as: (a) a spouse; (b) a parent; (c) a person who has one or both parents in common; (d) a child; (e) a child of, or a parent of, the spouse; (f) a grandparent; and (g) an aunt or uncle: Powers of Attorney Act 2000 (Tas) s 3(1). ‘Spouse’, in relation to a person, means a person: (a) who is married to the person; (b) who is a party to a significant relationship, within the meaning of the Relationships Act 2003 (Tas), with the person, which relationship is registered under that Act; or (c) who is a party to a significant relationship, within the meaning of the Relationships Act 2003 (Tas), with the person, which relationship has been in existence for a continuous period of at least two years: Powers of Attorney Act 2000 (Tas) s 3(1). 122. Powers of Attorney Act 2000 (Tas) s 9(1)(ba) (inserted by the Powers of Attorney Amendment Act 2013 (Tas)). 123. Powers of Attorney Act 2000 (Tas) s 30(2). As to the role of acceptance in this context generally see 4.34, 4.35. 124. Powers of Attorney Act 2000 (Tas) s 9(1)(b). 125. As to the registration of powers of attorney in Tasmania see 4.46. 126. Powers of Attorney Act 2000 (Tas) s 9(1)(f)–(i). The Act also makes detailed provision for formalities application to an annexure to a power of attorney: s 9(2), 9(3). 127. The initialling by the principal of an alteration to a power of attorney or annexure must be witnessed as prescribed by Powers of Attorney Act 2000 (Tas) s 9(5), 9(6). 128. Powers of Attorney Act 2000 (Tas) s 9(4). 129. Powers of Attorney Act 2000 (Tas) s 10(1). 130. Powers of Attorney Act 2000 (Tas) s 10(2). As to lodgement for registration of powers of attorney in Tasmania see 4.46. 131. The relevant provisions can also apply to enduring power of attorney but only if the Guardianship and Administration Board, after a hearing (in accordance with the Guardianship and

Administration Act 1995 (Tas) Pt 10 Div 1), declares by order that it is to apply: Powers of Attorney Act 2000 (Tas) s 50(2). 132. Powers of Attorney Act 2000 (Tas) s 50(1). 133. Powers of Attorney Act 2000 (Tas) s 10(3). 134. As to special powers of attorney see 1.19–1.23. 135. Instruments Act 1958 (Vic) s 107(1). The form is set out in Sch 12. 136. Powers of Attorney Act 2014 (Vic) s 7(1). The form is found in the schedule to the Act. 137. Instruments Act 1958 (Vic) s 123(1); Powers of Attorney Act 2014 (Vic) s 32 (yet to commence). An approved form, in this context, is a form approved by the Secretary to the Department of Justice under s 125ZL of the 1958 Act. The form is available at the website of the Office of the Public Advocate (see ). It has been recommended that the Victorian Government ‘develop a consolidated document comprising a single form or package of forms for creating enduring powers of attorney (financial) and enduring powers of attorney (guardianship)’, so as to ‘allow different representatives to be appointed for different powers’: VPLRC, p 57 (recommendation 7). 138. Interpretation of Legislation Act 1984 (Vic) s 53. It has been recommended that a dedicated powers of attorney statute state that the Victorian Civil and Administrative Tribunal may declare valid an enduring power of attorney document that does not meet the formal requirements, if satisfied that the principal: (a) intended the document to be such a power of attorney; (b) had the necessary capacity to make a power of attorney; and (c) signed the document freely and voluntarily: VPLRC, p 90 (recommendation 24). This has translated to the impending Powers of Attorney Act 2014 (Vic) s 117(1). 139. Instruments Act 1958 (Vic) s 106; Powers of Attorney Act 2014 (Vic) s 11 (yet to commence). 140. A person is eligible to sign an enduring power of attorney for the principal if the person: (a) is at least 18 years old; (b) is not a witness for the power of attorney; and (c) is not an attorney for the principal: Instruments Act 1958 (Vic) s 124; Powers of Attorney Act 2014 (Vic) s 34(1) (yet to commence). 141. Instruments Act 1958 (Vic) s 123(2); Powers of Attorney Act 2014 (Vic) s 33(a) (yet to commence). 142. Instruments Act 1958 (Vic) s 123(3); Powers of Attorney Act 2014 (Vic) s 33(b) (yet to commence). 143. Instruments Act 1958 (Vic) s 125(1); Powers of Attorney Act 2014 (Vic) s 35(2) (yet to commence). 144. Instruments Act 1958 (Vic) s 125(2). Contra Powers of Attorney Act 2014 (Vic) s 35(2)(d) (yet to commence). 145. Instruments Act 1958 (Vic) s 125(3) (see Evidence (Miscellaneous Provisions) Act 1958 (Vic) ss 107, 107A). The recommendation that statute should require all power of attorney documents to be witnessed by two witnesses, one of whom is authorised to witness affidavits or is a medical practitioner (VPLRC, p 77 (recommendation 15)) has seen implementation in the impending Powers of Attorney Act 2014 (Vic) s 35(1)(b). 146. Instruments Act 1958 (Vic) ss 123(5), 125A(1); Powers of Attorney Act 2014 (Vic) s 36(1) (yet to commence). Equivalent provision is made for a certificate where another person signs the power of attorney for the principal: Instruments Act 1958 (Vic) s 125A(2); Powers of Attorney Act 2014 (Vic) s 36(2) (yet to commence). It has been recommended that the requirements in question apply

to powers of attorney generally, and not be confined to enduring powers: VPLRC, p 73 (recommendation 14). 147. An approved form, in this context, is a form approved by the Secretary to the Department of Justice under Instruments Act 1958 (Vic) s 125ZL. The form is available at the website of the Office of the Public Advocate (see ). 148. Instruments Act 1958 (Vic) s 125B(1)–125B(4); Powers of Attorney Act 2014 (Vic) s 37(a), s 37(b) (yet to commence). 149. Instruments Act 1958 (Vic) s 125B(5); Powers of Attorney Act 2014 (Vic) s 37(c) (yet to commence). 150. As to the general law in this context see 4.1–4.4. 151. Transfer of Land Act 1893 (WA) s 143(1). The prescribed form is found in Sch 19. It has been held that this imposes on the Registrar ‘a duty to see that powers of attorney which are filed in the office are in substance similar to those which are set forth in the Act’ but that ‘it was never intended that the duty should be put upon the Registrar … of forming an opinion in which they may be mistaken, or upon which others may take a different view, as to the meaning of strange and eccentric powers of attorney’: Clazy v Registrar of Titles (1902) 4 WALR 113 at 117 per Hensman J (FC). It follows that the greater the departure from the prescribed form, and the greater the complexity of the relevant power, the more likely it is that the Registrar may reject the power for noting. 152. Transfer of Land Act 1893 (WA) s 145(1)(a). Provision is made for the witnessing of a document executed outside Australia in s 145(1)(b), and for the execution of an instrument relating to land owned by the Crown or the state in s 145(2). 153. Transfer of Land Act 1893 (WA) s 145(3). 154. The prescribed form is found in the Guardianship and Administration Act 1990 (WA) Sch 3 Form 1. 155. Guardianship and Administration Act 1990 (WA) s 104(1). The declaration is one made by the Western Australian State Administrative Tribunal under s 106: see 5.36. 156. See Oaths, Affidavits and Statutory Declarations Act 2005 (WA) Sch 2. 157. Guardianship and Administration Act 1990 (WA) s 104(2)(a), 104(3). 158. The prescribed form is found in the Guardianship and Administration Act 1990 (WA) Sch 3 Form 2. As to the role of acceptance in this context generally see 4.34, 4.35. 159. The Guardianship and Administration Act 1990 (WA) s 104B uses the term ‘donee’ in place of ‘attorney’, and states that ‘donee’ includes two persons appointed, whether jointly or severally, to act under a power of attorney: s 102. This has been interpreted as a restriction to two as regards the number of donees that can be appointed under an enduring power: Ricetti v Registrar of Titles [2000] WASC 98; BC200001912 (a point discussed in more detail at 4.53). 160. Guardianship and Administration Act 1990 (WA) s 104(2)(b). 161. Abbott v UDC Finance Ltd [1992] 1 NZLR 405 at 414 per McKay J (CA). 162. See Dal Pont, Equity & Trusts, [21.90]. 163. In the Northern Territory and Queensland the land titles legislation makes provision for a disclaimer of attorneyship to be registered: see Land Title Act 2000 (NT) s 148(6)(a); Land Title Act 1994 (Qld) s 135. Cf Protection of Personal and Property Rights Act 1988 (NZ) s 104 (which prescribes formalities for an attorney’s disclaimer under an enduring power of attorney, namely by

written notice to the donor or, if the donor is mentally incapable, by filing a notice in a court coupled with a report containing the requisite statements). 164. As to the resignation of attorneys and its effect see 11.21–11.24. 165. See 4.56, 4.57. 166. See 4.50–4.55. 167. Powers of Attorney Act 2006 (ACT) s 23; Powers of Attorney Act 2003 (NSW) s 20(1) (which, ‘[t]o avoid doubt’, is stated to extend to substitute attorneys: s 20(4)); Powers of Attorney Act 1998 (Qld) s 44(8). 168. Powers of Attorney Act 1980 (NT) s 13(b), Sch 1 (which applies to a power created by an instrument that was executed before 17 March 2014; from this date onwards, what were previously enduring powers of attorney are subsumed into the broader concept of an ‘advance personal plan’ (see 1.44), to which no acceptance requirement applies, although provision is made for the resignation of a ‘decision-maker’ (equivalent to an attorney): Advance Personal Planning Act 2013 (NT) s 19(1)(b)); Powers of Attorney and Agency Act 1984 (SA) s 6(2)(b), Sch 2; Powers of Attorney Act 2000 (Tas) s 30(2), Sch 1, Form 3 or 4; Instruments Act 1958 (Vic) s 125B (form approved by the Secretary to the Department of Justice under s 125ZL); Powers of Attorney Act 2014 (Vic) ss 37(a), 38(a) (alternative attorney) (yet to commence) (note the recommendation that a dedicated powers of attorney statute require all attorneys, including under non-enduring powers, to formally accept their appointment, and that this acceptance be witnessed by a person authorised to witness affidavits: VPLRC, p 89 (recommendation 23)); Guardianship and Administration Act 1990 (WA) s 104(2)(b), Sch 3 Form 2. 169. Powers of Attorney Act 2003 (NSW) s 20(3). 170. (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 at [9] (footnote supplied). See also VPLRC, p 88. Cf NLRC, pp 36–8 (which, though accepting that written acceptance could serve important evidentiary and notificatory functions, did not believe that it should be made mandatory for fear that it would impinge upon the flexibility of enduring powers); WCLRA, pp 53–4 (recommending against an acceptance requirement, identifying the following as its potential drawbacks: (1) inconvenience and added expense to the principal; (2) legal uncertainties might arise with respect to the potential effect on validity where the acknowledgment is not signed in a timely fashion; (3) neither consent nor the acknowledgment of duties would deter an unscrupulous attorney from misappropriating a principal’s property; (4) there may be more convenient and effective ways to inform attorneys of their duties and promote compliance other than by conditioning the validity of an enduring power on the attorney’s consent and acknowledgment; in line with the latter observation, it recommended that ‘[t]he problem of lack of attorney awareness and acceptance of the attorney’s appointment should be dealt with through public education to encourage the attorney’s advance informed consent’); NSLRC (DP), pp 75–6 (likewise proposing no acceptance requirement on the ground that ‘it may be difficult to assemble all parties for the execution’: p 76). 171. This is countenanced only by the Tasmanian legislation (Powers of Attorney Act 2000 (Tas) s 32(1)(a)) and, more recently, in the Northern Territory vis-à-vis the position of decision-makers under advance personal plans (Advance Personal Planning Act 2013 (NT) s 31(1); as to advance personal plans see 1.44), but there is North American case authority at general law in the same direction: see 2.10. 172. ALRC, p 13. 173. That is not to say that attorneys under enduring powers have no means of resigning their appointment, but statute generally requires that any resignation be by leave of the relevant court or tribunal: see 11.23, 11.24.

174. See, for example, J L Rhein, ‘No One in Charge: Durable Powers of Attorney and the Failure to Protect Incapacitated Principals’ (2009) 17 Elder LJ 165 at 194–5 (who advocates the registration of enduring powers of attorney). 175. See, for example, ILRC, p 12; Law Com 122, pp 19–20, 31–8; TLRC, p 14; VPLRC, pp 225–7. 176. See, for example, ALRC, p 14; ALRI (DP), pp 54–6; NLRC, pp 44–7; NZLC, p 18; WCLRA, pp 62–4. 177. The Registration of Deeds Act 1856 (WA) s 13 entitles a person to deposit any power of attorney in the Western Australian Land Information Authority’s office for safe custody. This is not ‘registration’ in the strict sense, as it recognises no role for registration of powers of attorney except for safe-keeping. 178. See 4.46. 179. See VPLRC, pp 233–9 (recommendations 66–70). 180. Mental Capacity Act 2005 (UK) Sch 1 Pt 2. 181. See 11.42, 11.43. 182. Registration of Deeds Act 1957 (ACT) s 4(1) (which stipulates the means whereby this registration may be effected, most commonly by depositing the deed, or a copy verified by statutory declaration, with the Registrar-General), 4(2) (which prescribes requirements relating to verification of the due execution of the deed). 183. Even outside of the legislation, the balance of case authority at general law dictates that powers of attorney should be constituted by way of deed: see 4.4. 184. Powers of Attorney Act 2006 (ACT) s 29(1). 185. Registration of Deeds Act 1957 (ACT) s 4A(1). 186. Registration of Deeds Act 1957 (ACT) s 4A(2). 187. Land Titles Act 1925 (ACT) s 130. 188. Powers of Attorney Act 2003 (NSW) s 51(1) (equivalent to the former Conveyancing Act 1919 (NSW) s 163(1)). The background to registration provisions in New South Wales is catalogued in NSWLRC (WP), pp 49–53. 189. Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd (2001) 38 ACSR 404; [2001] NSWSC 448; BC200102976 at [102] per Bryson J (referring to the Conveyancing Act 1919 (NSW) s 163). 190. Conveyancing Act 1919 (NSW) s 184D(1). 191. ‘Conveyance’ includes any assignment, appointment, lease, settlement or other assurance by deed of any property: Powers of Attorney Act 2003 (NSW) s 3(1). 192. For this purpose, ‘deed’ includes any memorandum, dealing or other instrument affecting land that is deemed by an Act to have effect as a deed: Powers of Attorney Act 2003 (NSW) s 52(3). 193. Powers of Attorney Act 2003 (NSW) s 52(1), 52(4) (cf the former Conveyancing Act 1919 (NSW) s 163(2)). 194. Powers of Attorney Act 2003 (NSW) s 52(2) (cf the former Conveyancing Act 1919 (NSW) s 163(2)). 195. Powers of Attorney Act 1980 (NT) s 7(1) (which extends to the registration of an instrument creating a power of attorney executed in another Australian jurisdiction under the law of that jurisdiction: s 7(1A)).

196. Powers of Attorney Act 1980 (NT) s 8(1). 197. Powers of Attorney Act 1980 (NT) s 8(2). 198. Land Title Act 2000 (NT) s 148(1) (but note the limitations in s 148(6)). 199. Powers of Attorney Regulations 1982 (NT) reg 3(1). 200. Namely the name of the donor and the lodgement number and date of the instrument creating the power; where applicable the particulars should also include: (a) the date of the revocation of a power by the operation of the Powers of Attorney Act 1980 (NT) s 16; (b) the date of the revocation of a power by the operation of s 17; (c) a protection order under the Aged and Infirm Persons’ Property Act 1979 (NT); (d) an order of the Supreme Court revoking or varying the terms of an instrument creating a power under s 19(3): Powers of Attorney Regulations 1982 (NT) reg 3(2). 201. These are detailed in Powers of Attorney Regulations 1982 (NT) regs 5 (local instruments), 5AA (interstate instruments). 202. As to advance personal plans see 1.44. 203. Advance Personal Planning Act 2013 (NT) s 55A(5). 204. Advance Personal Planning Act 2013 (NT) s 55A(1). 205. Advance Personal Planning Act 2013 (NT) s 55A(2). 206. Advance Personal Planning Act 2013 (NT) s 55B(1). 207. Advance Personal Planning Act 2013 (NT) s 55B(3). 208. Powers of Attorney Act 1998 (Qld) s 25(1). 209. Powers of Attorney Act 1998 (Qld) s 60(1). 210. Land Title Act 1994 (Qld) s 133(1). 211. Land Title Act 1994 (Qld) s 133(2). The Registrar must keep a certified copy of the registered power of attorney and return the original to the person who deposited it: s 133(3). But note the limitations in s 134(4). 212. Land Title Act 1994 (Qld) s 132. 213. Land Title Act 1994 (Qld) s 134(1), 134(2). 214. Land Act 1994 (Qld) s 383(1). 215. Land Act 1994 (Qld) s 383(3) (which states that an individual who is a trustee of trust land cannot, under a power of attorney, authorise a person to deal with an interest in the trust land that may be dealt with by the individual as trustee; this ostensibly reflects the personal nature of trusteeship and the consequent precluding of trustees from delegating their discretions: see Dal Pont, Equity & Trusts, [22.45]). 216. Land Act 1994 (Qld) s 383(2). 217. Powers of Attorney and Agency Act 1984 (SA) s 5(1). 218. Registration of Deeds Act 1935 (SA) s 10(1). Registration is effected by a memorial brought to the registry office, together with the instrument: s 11(1). 219. Registration of Deeds Act 1935 (SA) s 10(2). 220. Registration of Deeds Act 1935 (SA) s 10(4).

221. Real Property Act 1886 (SA) s 155. 222. Real Property Act 1886 (SA) s 156. 223. Powers of Attorney Act 2000 (Tas) s 4(1). The manner in which the register may be maintained is prescribed by s 4(3). 224. Powers of Attorney Act 2000 (Tas) s 11(5A) (‘if the Recorder considers it appropriate to do so in the particular circumstances’). 225. Powers of Attorney Act 2000 (Tas) s 11(1). Provision is made for how the Recorder is to deal with powers of attorney that do not comply with the Act: s 11(3)–11(5). The Recorder is not personally liable for any damage or loss caused to a person by, or as a consequence of, the registration under the Act of a purported enduring power of attorney (or an annexure, alteration or correction thereto) signed by a witness who is a party to, or a close relative to a party to, the enduring power of attorney: s 11(7) (a provision that, although inserted by the Powers of Attorney Amendment Act 2013 (Tas), is expressed to apply to, and in relation to, a power of attorney created before its commencement: s 58B(2)). ‘Close relative’ is defined in s 3(1). 226. Powers of Attorney Act 2000 (Tas) s 12(1). See also s 13 (which empowers the Recorder to make an agreement with a person authorising him or her to lodge a power of attorney by electronic process). 227. Powers of Attorney Act 2000 (Tas) s 5(1). 228. Powers of Attorney Act 2000 (Tas) s 6(1). 229. Powers of Attorney Act 2000 (Tas) s 16(a). 230. Powers of Attorney Act 2003 (NSW) s 44(2) (equivalent to the former Conveyancing Act 1919 (NSW) s 163A(1); as to the background to these provisions see NSWLRC (WP), pp 55–8). 231. Powers of Attorney Act 2003 (NSW) s 44(1) (equivalent to the former Conveyancing Act 1919 (NSW) s 163A(2)). A person who gives a certificate for this purpose knowing it to be false commits an offence: s 44(5). 232. See Powers of Attorney Regulation 2011 (NSW) cl 4. 233. Powers of Attorney Act 1980 (NT) s 12(2) (in the context of non-enduring powers, and enduring powers executed before 17 March 2014); Advance Personal Planning Regulations 2014 (NT) reg 10 (as from 17 March 2014 in the context of advance personal plans: see 1.44); Powers of Attorney Act 1998 (Qld) ss 14(2)–14(4) (general powers), 45(2)–45(4) (enduring powers); Instruments Act 1958 (Vic) ss 111(1) (general powers), 125ZG(2), 125ZG(3), 125ZH (enduring powers); Powers of Attorney Act 2014 (Vic) ss 16 (non-enduring powers), 82 (enduring powers) (yet to commence). 234. See Powers of Attorney Act 1998 (Qld) ss 14(4) (general powers), 45(4) (enduring powers); Instruments Act 1958 (Vic) ss 111(1)(b) (general powers), 125ZH(1) (enduring powers); Powers of Attorney Act 2014 (Vic) ss 16(4) (non-enduring powers), 82 (enduring powers) (yet to commence). 235. Powers of Attorney Act 2003 (NSW) s 44(4); Powers of Attorney Act 1980 (NT) s 12(1) (in the context of non-enduring powers, and enduring powers executed before 17 March 2014); Powers of Attorney Act 1998 (Qld) ss 14(6) (general powers), 45(6) (enduring powers); Instruments Act 1958 (Vic) s 125ZJ (enduring powers). 236. Evidence Act 2001 (ACT) ss 48, 146, 147; Evidence Act 1995 (NSW) ss 48, 146, 147; Evidence (National Uniform Legislation) Act 2011 (NT) ss 48, 146, 147; Evidence Act 1977 (Qld) s 116; Evidence Act 1929 (SA) ss 45A–45C; Evidence Act 2001 (Tas) ss 48, 146, 147; Evidence Act 2008 (Vic) ss 48, 146, 147; Evidence Act 1906 (WA) s 73A.

237. Powers of Attorney Act 2006 (ACT) s 89; Powers of Attorney Act 2003 (NSW) s 25(1) (but note the limitations listed in s 25(2), 25(3)); Powers of Attorney Act 1980 (NT) s 6A(5) (applies to enduring powers executed before 17 March 2014; from this date see Advance Personal Planning Act 2013 (NT) s 88 dealing with the compendious concept of an ‘advance personal plan’, as to which see 1.44); Powers of Attorney Act 1998 (Qld) s 34; Powers of Attorney and Agency Act 1984 (SA) s 14 (as amended by the Powers of Attorney and Agency (Interstate Powers of Attorney) Amendment Act 2013 (SA), with effect on 19 September 2013); Instruments Act 1958 (Vic) s 116; Powers of Attorney Act 2014 (Vic) s 138 (yet to commence). 238. Powers of Attorney Act 2006 (ACT) s 88; Powers of Attorney Act 1980 (NT) s 6A(3). 239. As to which see 4.46. 240. Powers of Attorney Act 2000 (Tas) s 42(1). 241. Powers of Attorney Act 2000 (Tas) s 43(1). 242. Powers of Attorney Act 2000 (Tas) s 43(2). 243. For this purpose, ‘legal practitioner’ means an Australian lawyer or, in the case of execution or registration of a power of attorney outside Australia, a legal practitioner of that place of execution or registration: Powers of Attorney Act 2000 (Tas) s 44(4). Accordingly, a legal practitioner who gives the certificate may be a legal practitioner in Australia or in the other place of execution: s 44(2). 244. Powers of Attorney Act 2000 (Tas) s 44(1). 245. Powers of Attorney Act 2000 (Tas) s 45(2). 246. Guardianship and Administration Act 1990 (WA) s 104A(1). 247. Guardianship and Administration Act 1990 (WA) s 104A(2). 248. See, for example, Kendle v Melsom (1998) 193 CLR 46; BC9800311 (where it was held that a mortgagee had power to appoint multiple receivers (co-agents) according to the terms of the security instrument, the High Court deriving this power from a clause in the instrument that stated ‘words importing the singular number or plural number shall include the plural number and singular number respectively’). 249. Powers of Attorney Act 2006 (ACT) s 25 (which envisages not just that a principal may authorise two or more attorneys to act together or separately, or in any combination, but authorise different attorneys to act in different circumstances, on the happening of different events or in relation to different matters); Powers of Attorney Act 2003 (NSW) s 20(2) (implicitly recognises that more than one attorney can be appointed under an enduring power); Advance Personal Planning Act 2013 (NT) s 17(2) (in the context of ‘decision-makers’ under advance personal plans, as to which see 1.44); Powers of Attorney Act 1998 (Qld) ss 13(1)(a) (general power), 43(2) (similar to the ACT provision), 78 (enduring powers); Powers of Attorney and Agency Act 1984 (SA) s 5(3) (general power); Instruments Act 1958 (Vic) ss 107(1) (general power), 119(1) (enduring powers); Powers of Attorney Act 2014 (Vic) ss 8(1) (non-enduring powers), 30(1) (enduring powers) (yet to commence). 250. Guthrie v Armstrong (1822) 5 B & Ald 628; 106 ER 1320. This is explicitly recognised by statute vis-à-vis enduring powers of attorney in Victoria: Instruments Act 1958 (Vic) s 119(3) (if two or more joint and several attorneys are appointed, ‘all the attorneys can act together if they all agree and any documents can be signed by all of them’, or ‘any of the attorneys can act and sign documents together or alone’). 251. This is explicitly recognised by statute in some jurisdictions: Advance Personal Planning Act 2013

(NT) s 21(2) (in the context of ‘decision-makers’ under advance personal plans, as to which see 1.44); Powers of Attorney Act 1998 (Qld) s 80(1); Instruments Act 1958 (Vic) s 119(2) (vis-à-vis enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 30(4)(a) (yet to commence). Cf Powers of Attorney Act 2006 (Man) s 18; Powers of Attorney Act 2001 (NWT) s 19 (which oust the general law rule in the case of enduring powers of attorney by allowing attorneys appointed jointly to make majority decisions). The same, driven by a concern to avoid a stalemate, has been proposed in Nova Scotia: see NCLRC (DP), pp 102–4 (suggesting that, in the event of a tie, a decision by the first-named attorney should prevail). 252. See 11.22. 253. The relevant legislation in several jurisdictions makes reference to a power of attorney vesting authority in multiple attorneys, whether jointly or severally: Powers of Attorney Act 2006 (ACT) s 25; Advance Personal Planning Act 2013 (NT) s 17(3) (in the context of advance personal plans, as to which see 1.44) can be appointed to exercise their authority ‘jointly, severally or jointly and severally’); Powers of Attorney Act 1998 (Qld) ss 13(1)(a) (‘joint or several, or joint and several, attorneys’ under a general power), 43(2)(f) (‘joint or several, or joint and several, attorneys’ under an enduring power); Powers of Attorney and Agency Act 1984 (SA) s 5(3) (‘acting jointly or severally, as the case may be’); Instruments Act 1958 (Vic) ss 107(1) (‘attorneys acting jointly or acting jointly or severally, as the case may be’ under a general power), 119(1) (two or more ‘joint attorneys’ or ‘joint and several attorneys’ under an enduring power) (note that equivalent provision is made in the impending Powers of Attorney Act 2014 (Vic) ss 8(2) (non-enduring powers), 30(3) (enduring powers)); Guardianship and Administration Act 1990 (WA) s 102 (‘two persons appointed, whether jointly or severally, to act under [an enduring] power of attorney’). 254. Brown v Andrew (1849) 18 LJQB 153; White v Tyndall (1888) 13 App Cas 263 at 269 per Lord Halsbury LC; Re Liverpool Household Stores Association (Ltd) (1890) 59 LJ Ch 616 at 624–5 per Kekewich J. 255. For example, in Kendle v Melsom (1998) 193 CLR 46 at 69; BC9800311 Hayne J, rather than endorsing a presumption, phrased his statement in terms of ‘if there is some presumption that an authority given to two or more persons is given to them jointly’ (emphasis supplied), a point his Honour did not decide on. However, his Honour, together with Gummow and Kirby JJ did support the view that a power expressly conferred ‘jointly and severally’ need not be exercised jointly: at 64–5 per Gummow and Kirby JJ, at 68–70 per Hayne J. 256. Powers of Attorney Act 2006 (ACT) s 26. In the event that it is impracticable or impossible for the attorneys under an enduring power to exercise the power unanimously, provision is made for the application to the ACT Civil and Administrative Tribunal for directions or an order: s 27(1), 27(2). 257. Powers of Attorney Act 2014 (Vic) s 8(2)(b) (non-enduring powers), 30(3)(b) (enduring powers) (yet to commence), implementing VPLRC, p 148 (recommendation 42). 258. Powers of Attorney Act 1998 (Qld) s 78. If it is impracticable or impossible to exercise the power unanimously, one or more of the attorneys, or another interested person for the adult, may apply for directions to the court: s 80(2). 259. See, for example, ALRI, recommendation 17 (see the background to this recommendation found in ALRI (DP), pp 62–3); Law Com 122, p 18; NLRC, pp 60–1. 260. Cf Advance Personal Planning Act 2013 (NT), which vis-à-vis advance personal plans (as to which see 1.44) envisages that an adult ‘may appoint one decision-maker, or 2 or more decision-makers, for a matter or matters’ (s 17(2)), although the approved form makes provision for only up to four decision-makers (see ); QLRC, Vol 3, p 220 (recommendation 16–7) (recommending that the Powers of Attorney Act 1998 (Qld) s 43 be

amended to provide that a principal may appoint a maximum of four joint attorneys for a matter under an enduring power). 261. Guardianship and Administration Act 1990 (WA) s 102. 262. [2000] WASC 98; BC200001912. 263. Ricetti v Registrar of Titles [2000] WASC 98; BC200001912 at [11]. 264. Guardianship and Administration Act 1990 (WA) s 104B. As to substitute attorneys see further 4.56, 4.57. 265. As to the acceptance requirement see 4.34, 4.35. 266. Powers of Attorney Act 2006 (ACT) s 28(1), 28(2). 267. Powers of Attorney Act 2006 (ACT) s 28(3). 268. Powers of Attorney Act 2003 (NSW) s 20(2). 269. See Guardianship and Management of Property Act 1991 (ACT) s 66 (see 10.4); Powers of Attorney Act 2003 (NSW) s 36(4)(b), 36(4)(c) (see 10.9); Powers of Attorney Act 1980 (NT) s 15(2)(c), 15(4) (which applies to enduring powers executed before 17 March 2014: see 10.13; from this date, enduring powers are subsumed into the broader concept of an ‘advance personal plan’ (see 1.44), and provision is made in Advance Personal Planning Act 2013 (NT) s 60 for the substitution of relevant decision-makers); Powers of Attorney Act 1998 (Qld) s 116(a), 116(b) (see 10.16); Powers of Attorney and Agency Act 1984 (SA) s 11(1)(c) (see 10.18); Powers of Attorney Act 2000 (Tas) s 33(2)(b) (see 10.20); Instruments Act 1958 (Vic) ss 125X, 125Z (to become Powers of Attorney Act 2014 (Vic) s 120) (see 10.24); Guardianship and Administration Act 1990 (WA) s 109(1)(c) (see 10.28). 270. [2009] 2 All ER 1051; [2009] EWHC 436 (Ch) at [10]. 271. Re J (Enduring Power of Attorney) [2009] 2 All ER 1051; [2009] EWHC 436 (Ch) at [21]. 272. As to advance personal plans see 1.44. 273. Powers of Attorney Act 2006 (ACT) s 25; Advance Personal Planning Act 2013 (NT) s 17(1); Powers of Attorney Act 1998 (Qld) s 43(2). 274. Namely that an adult may appoint his wife while she is alive and then his son while he is alive and then his two grandchildren jointly. 275. A second example attached to the Northern Territory provision envisages, to this end, an adult who lives part of the time with her son and part of the time with her daughter, who ‘might appoint her son for times she is living with him and her daughter for times when she is living with her’. 276. Instruments Act 1958 (Vic) s 120. 277. Powers of Attorney Act 2014 (Vic) ss 9 (non-enduring powers), 31 (enduring powers). 278. See VPLRC, pp 148–50 (recommendation 44). 279. Powers of Attorney Act 2014 (Vic) s 31(2). 280. Guardianship and Administration Act 1990 (WA) s 104B. 281. Powers of Attorney Act 2003 (NSW) s 45A(1), as inserted by the Powers of Attorney Amendment Act 2013 (NSW). 282. Powers of Attorney Act 2003 (NSW) s 45A(3). 283. See further M Maynard, ‘New Powers of Attorney Laws’ (December 2013) 51 LSJ 34 at 36 (note

6) (who notes that this is the construction favoured by the Elder Law and Succession Committee of the New South Wales Law Society, which saw no policy reason for the amendment to be interpreted where ‘concurrent’ is inserted into the provision such as to exclude the appointment of consecutive substitute attorneys). Cf Mental Capacity Act 2005 (UK) s 10(8), under which an instrument used to create a lasting power of attorney cannot give the attorney(s) power to appoint a substitute or successor, but may itself appoint a person to replace the attorney(s) on the occurrence of a specified event (listed in s 13(6)(a)–(d)) that has the effect of terminating the attorney’s appointment. In Re Boff [2013] WTLR 1349 (EWCOP) Senior Judge Lush ruled that this provision did not encompass the prospect that a replacement attorney could replace a replacement attorney, noting ‘the complete absence’ of statutory language to this effect: at [45]. Accordingly, under this provision, which it should be noted is more restrictive than the Powers of Attorney Act 2003 (NSW) s 45A(3), his Lordship concluded that ‘a replacement attorney can only replace an original attorney and cannot replace a replacement attorney’: at [46]. 284. Powers of Attorney Act 2003 (NSW) s 45A(4). 285. Skinner v Stocks (1821) 4 B & Ald 437; 106 ER 997; Cothay v Fennell (1830) B & C 671; 109 ER 599; Jones v Cuthbertson (1873) LR 8 QB 504. 286. Keay v Fenwick (1876) 1 CPD 745. 287. As to ratification see 5.47–5.57. 288. See, for example, Gee v Lane (1812) 15 East 592; 104 ER 967 (where it was held that a joint warrant signed by two debtors authorising their attorney to enter judgment against them terminated on the death of one of them). 289. (2000) 50 NSWLR 76; [2000] NSWSC 763; BC200004323. 290. Cox v Goldcrest Developments (NSW) Pty Ltd (2000) 50 NSWLR 76; [2000] NSWSC 763; BC200004323 at [11]. 291. Cox v Goldcrest Developments (NSW) Pty Ltd (2000) 50 NSWLR 76; [2000] NSWSC 763; BC200004323 at [15], [16] (paragraph break omitted). 292. See Alcock, pp 6–7. 293. See 11.35. 294. See 11.30. 295. Powers of Attorney Act 2006 (ACT) s 15 (applies to both general and enduring powers); Powers of Attorney Act 1998 (Qld) s 13(1)(b), 13(2) (applies only to general powers). 296. Powers of Attorney Act 2000 (Tas) s 26. 297. Instruments Act 1958 (Vic) s 122. 298. Powers of Attorney Act 2014 (Vic) s 29.

[page 119]

PART III

Power Delimited Having understood the legal concept of a power of attorney, and then fulfilled the legal requirements for its creation, the next stage is to determine what the power of attorney authorises the attorney to do. This stems entirely from the basic notion that powers of attorney are about authority. The nature and parameters of that authority, and the scope and means of varying that authority, are developed in Chapter 5. The ensuing chapter investigates the extent to which the legal approach to construing an attorney’s authority follows conventional approaches to construing other written documents, and explains how the courts have, from early times, promulgated and applied a strict approach to construction. In Chapter 7 the statutory backdrop for an attorney’s authority is discussed, by reference to general provisions expressing that authority, and the statutory supplementation by conferral of specific forms of authority.

[page 121]

Chapter 5

Authority of Attorney Nature of authority Relationship to inquiry in general agency law Classification of powers of attorney grounded in scope of authority ‘General’ vs ‘special’ powers of attorney Enduring vs non-enduring powers of attorney Revocable vs irrevocable powers of attorney Forms of authority Express vs implied authority Actual (express or implied) vs ostensible authority Legal parameters to attorney’s authority Personal act required by contract Personal act required by personal nature of principal’s position Personal act required by law Personal act required by statute — signature requirements Temporal parameters to attorney’s authority Commencement of authority Non-enduring powers of attorney Enduring powers of attorney Duration of authority Variation of authority

5.1 5.1 5.6 5.7 5.10 5.12 5.15 5.16 5.18 5.20 5.23 5.24 5.25 5.27 5.30 5.31 5.32 5.33 5.39 5.43

Extension or contraction of authority Authority conferred via ratification Ratification and its application to powers of attorney Knowledge in the principal Evidence of ratification Attorney must have purported to act as attorney Prospective ‘ratification’ clauses in powers of attorney Court’s statutory power to confirm authority — New South Wales

5.44 5.47 5.47 5.49 5.50 5.53 5.54 5.57

[page 122]

Nature of authority Relationship to inquiry in general agency law 5.1 Given that the relationship between principal and attorney under a power of attorney is one of agency,1 and that agency as a concept centres on authority, it is hardly surprising that authority likewise lies at the core of powers of attorney. It should also dictate that principles applicable to determining the scope of an agent’s authority generally should have relevance in application to the specific agency created via a power of attorney. Yet as noted in Chapter 1, the peculiar agency that is the power of attorney cannot be assimilated to all forms of agency;2 while it may be that all powers of attorney are agencies, the converse is not true. 5.2 Unlike the general concept of agency, both the general law and statute require that a power of attorney be in writing3 and, to the extent that it must be created by way of deed,4 fulfil what the law stipulates are the elements of a deed. Even though legislation in most jurisdictions does not mandate that powers of attorney take the form of a deed, it commonly deems those powers

that meet the requisite formalities to be or have the effect of a deed. Those formalities, in any case, are not applicable to contracts (including agencies) generally, and often also surpass statutory formalities that do apply to contracts. Implicit in the foregoing is that statute in all jurisdictions exists, to a lesser or greater extent, that targets powers of attorney, independent of more general agency legislation also found in each jurisdiction. Were it not for these unique aspects of the law pertaining to powers of attorney, there would be little need to address the authority of attorneys except by reference to agents’ authority. All that would be required here would be a basic précis of the law regulating agents’ authority, which could then be supplemented by cross-reference to dedicated agency works. The very formality of powers of attorney, though, may dictate a potentially closer inquiry into the terms in which the relevant authority is couched than in a general agency context, coupled with a greater disinclination to imply authority.5 At the same time, the conferral of what can be described as a ‘general’ authority in a power of attorney (authorising the attorney to do anything that the principal could do) is perhaps more common than a ‘general’ authority in the broader agency scenario. What this has meant is a greater focus in powers of attorney law on the extent to which the law should, if at all, restrict the scope of a ‘general’ authority. This inquiry is the subject of detailed treatment in Chapter 6. 5.3 The above two features have brought with them the notion, which knows no parallel in agency law generally, that authority under a power of attorney must be construed strictly. In some respects, it seems an upshot of the fiduciary duties the law superimposes on attorneys in exercising their authority on behalf of a principal.6 Yet because agency authority is not subject to the same strict construction, and is nonetheless to be exercised in a fiduciary capacity,7 may suggest that there is something [page 123] sui generis about powers of attorney that justifies a gloss on the ordinary rules of construction. What the strict construction approach means, and how it applies, is also discussed within Chapter 6.

5.4 One further important feature of the law on powers of attorney that serves to differentiate it from the general law of agency is the statutory recognition of the enduring power of attorney. Following basic agency law, which treats an agency as terminated upon the mental incapacity of the principal,8 the general law refused to countenance the validity of a power of attorney once the principal became mentally incapable, irrespective of its terms.9 This led to statutory intervention, whereby in all Australian jurisdictions, in tandem with other comparable common law countries, statute validates powers of attorney expressed to endure the mental incapacity in the principal (in the Northern Territory, under the guise of an ‘advance personal plan’10 as from 17 March 2014).11 No equivalent provision is found in general agency legislation. As regards enduring powers in particular, the relevant legislation has impacted on the scope of an attorney’s authority, and its impact is discussed in Chapter 7. With the enduring power of attorney have come further challenges to determining where the boundaries of attorneys’ authority lie. A principal lacking capacity cannot effectively monitor and superintend the exercise of the attorney’s authority, and so greater trust, and a potentially broader discretion, is often placed in an attorney under an enduring power than under a non-enduring power.12 The enduring power scenario thus calls for even closer scrutiny of the scope of the attorney’s authority, which not only has (as noted above) been impacted upon by statute, it has, more generally, prompted the implementation of means whereby a court or tribunal can have, inter alia, allegations of abuse of authority vented and addressed. The latter receives a dedicated treatment in Chapter 10. 5.5 Following mention of how powers of attorney are classified by reference to authority, which appears immediately below, what this chapter discusses are the forms of authority that may vest in an attorney,13 the legal14 and temporal15 parameters of that authority, and how variation of an attorney’s authority may be effected by the principal.16

Classification of powers of attorney grounded in scope of authority 5.6 As powers of attorney are, like agency, chiefly about authority, it stands to reason that the means whereby they can be classified will likewise

focus on authority, its scope and the circumstances in which it applies. Below are the main classifications of powers of attorney grounded in the concept of authority. [page 124]

‘General’ vs ‘special’ powers of attorney 5.7 A traditional means of classifying powers of attorney is by reference to the scope of authority conferred by them. What is termed a ‘general’ power of attorney authorises the attorney to do anything that the principal could do.17 What makes the power ‘general’ is that the scope of the attorney’s authority is not limited by the express terms of the power. Where, on other hand, the scope of the attorney’s authority is restricted by the terms of the power, this amounts to a ‘special’ (or ‘limited’) power of attorney. Because the distinction between a general power and a special power goes only to the scope of the authority conferred upon the agent, it has been judicially branded ‘a distinction without a difference’.18 At the same time, it has not prevented an Australian judge from, incorrectly it is suggested,19 fostering the distinction in the context of determining the application of powers of attorney legislation phrased by reference to general powers but omitting reference to special powers.20 5.8 In any case, the description ‘general power of attorney’ is potentially misleading, at least to the extent that it carries the inference that the attorney under such a power has plenary authority to do anything on the principal’s behalf. Even the most general of powers of attorney are subject to limits imposed by law — whether by contract, by statute or by public policy — on what can, and cannot, be delegated to an attorney by a principal. As discussed elsewhere,21 tasks or duties that the law requires be performed personally cannot legitimately be delegated to an attorney. 5.9 Also, the scope of an attorney’s authority may, irrespective of the literal wording the power, be limited by either the powers of attorney legislation itself in some instances or the general law. As to the latter, the fiduciary backdrop to an attorney’s function22 has prompted the courts, in the

main, to construe the power as precluding the attorney from breaching fiduciary duty — the common scenario involves the attorney dealing with the principal’s property for the benefit of the attorney personally (or the family or an associate of the attorney) — unless the dealing is expressly authorised by the terms of the power itself.23

Enduring vs non-enduring powers of attorney 5.10 The scope of an attorney’s authority under a power of attorney also feeds into the division of powers between ‘enduring’ and ‘non-enduring’. What makes a power of attorney ‘enduring’ is that it can, according to its terms, authorise the attorney to act on the principal’s behalf even if the principal has lost mental capacity. The general law refused to recognise enduring powers, instead treating the onset of mental incapacity in a principal as terminating any authority under an existing power.24 So a power of attorney expressed to commence operation upon incapacity of the principal, or to continue in operation notwithstanding that incapacity, lacked validity at general law. [page 125] 5.11 Statute has, however, intervened to allow, and prescribe the requirements for, the creation of enduring powers of attorney (in the Northern Territory, under the guise of an advance personal plan25 from 17 March 2014).26 It has thus prompted a need to distinguish enduring powers of attorney from non-enduring powers, a distinction grounded in the authority of the attorney in a temporal sense, namely when the authority is to commence or continue. That statute in some jurisdictions allows principals to utilise an enduring power of attorney for delegation of health and lifestyle decisionmaking27 extends the distinction to matters of scope of authority too.

Revocable vs irrevocable powers of attorney 5.12 The division between ‘revocable’ and ‘irrevocable’ powers of attorney is also one grounded in authority. A principal may, in the usual case,

revoke his or her attorney’s authority, whether in whole or in part, at any time prior to yielding to mental incapacity.28 If the latter occurs, and the power is an enduring power of attorney, the principal can no longer revoke the authority of the attorney;29 if the power is a non-enduring power, the authority is in any case terminated.30 The principal’s ability to revoke or curtail an attorney’s authority is what, inter alia, serves to distinguish a power of attorney from an assignment.31 5.13 However, under an irrevocable power of attorney, the principal relinquishes the ability, at will, to revoke the attorney’s authority. What serves to constrict the principal in this fashion is not merely that the power is expressed to be irrevocable, but that the attorney has furnished to the principal (or a third party) consideration for the grant of the power.32 What this means is that, in effect, the power of attorney becomes contractual, which restricts the principal from taking back the authority he or she has conferred on the attorney. 5.14 The powers of attorney legislation in each jurisdiction except the Australian Capital Territory and South Australia makes provision for irrevocable powers of attorney given for value.33 But in the Australian Capital Territory any need to distinguish revocable from irrevocable powers is negated by express statutory provision entitling a principal to revoke a power ‘whether or not the power states otherwise’.34

Forms of authority 5.15 In addition to classifying powers of attorney according to the boundaries of the authority they confer on the attorney, in each power of attorney it is necessary to identify the relevant classes of authority that are conferred, and their ramifications. In this regard, the distinction is usually made between ‘express’ and ‘implied’ authority (collectively termed ‘actual authority’), and between ‘actual’ and ‘ostensible’ authority. Below are outlined the nature and consequences of each. [page 126]

Express vs implied authority 5.16 In agency law, the scope of an agent’s ‘actual’ authority — namely the authority conferred by the principal on the agent — is ordinarily subdivided into authority that is ‘express’ as opposed to that which is ‘implied’.35 The same distinction is recognised as far as powers of attorney are concerned. As its terminology suggests, ‘express’ authority is conferred in express terms in the instrument creating the authority. In the case of powers of attorney, their formality means that the boundaries of an attorney’s authority are ordinarily prescribed expressly under the power. It is for this reason that most of the case law on attorneys’ authority focuses on the interpretation of the actual terms of the authority as found in the power itself.36 5.17 The foregoing is not to say that attorneys cannot possess implied authority, namely authority conferred by the relevant instrument, even though not in express terms, that is incidental to the proper execution of the attorney’s express authority. Case authority on the scope of attorneys’ implied authority is discussed in the following chapter,37 but the fact that it is hardly extensive suggests that the formality inherent in powers of attorney reduces scope for argument in this context. It should also be seen against the backdrop of the courts’ strict construction of powers of attorney.38

Actual (express or implied) vs ostensible authority 5.18 The difference between actual and ostensible authority in the context of powers of attorney goes to the issue of authority, in particular, its scope. However, unlike the distinction between ‘general’ and ‘special’ powers, which is informed by the scope of authority between principal and attorney, the actual-ostensible dichotomy is informed by the scope of an attorney’s authority vis-à-vis third parties. In agency law the doctrine of ‘ostensible’ (or ‘apparent’) authority dictates that a principal can be bound to a third party by the acts of an agent, even if those are beyond the scope of the agent’s authority, if the principal has ‘held out’ the agent as having that (broader) authority.39 If so, the principal is estopped, as against the third party, from pleading the agent’s lack of actual

authority as a ground to avoid liability. Any cause of action the principal has against the agent for acting in excess of his or her authority remains. 5.19 As the law of powers of attorney is grounded in the law of agency,40 the concept of ostensible authority, and its distinction from actual authority, can assume relevance in this environment too.41 Yet the prospect for it creating liability for a principal, for acts of the attorney outside his or her actual authority, is arguably less than in the case of agency generally. The main reason for this is that powers of attorney are formal documents, the scope of authority conferred being usually clearly identified in writing, and as a precaution are often viewed by the third party. In fact, it has been judicially remarked that ‘[t]he primary purpose of a power of attorney is not to define [page 127] the authority conferred on the agent by the principal, but to provide third persons with evidence of agency authority’.42

Legal parameters to attorney’s authority 5.20 In most instances, the scope of an attorney’s authority under a power of attorney is determined by reference to the terms of the power itself. Apart from establishing the rules applicable to the process of construction, the law does not purport, generally speaking, to interfere with a principal’s choice to appoint an attorney and vest in that person authority on the principal’s behalf. To this end, ‘[t]he authority of an agent cannot exceed the limit of authority granted by the principal to the agent’.43 And the legal rules relating to construction, discussed in Chapter 6, in any case, are designed to give effect to the principal’s intention as reflected in his or her choice to arrange affairs via an attorney. 5.21 The foregoing does not entitle the principal to delegate to an attorney every task or function that the principal may perform. Fundamentally, there is no scope in the law to validly delegate to an attorney an act that the principal

is not legally allowed to perform. So, for instance, a principal cannot appoint an attorney with the object of the attorney performing a criminal act, or an otherwise illegal act,44 on the principal’s behalf. 5.22 Also, the law interferes with the principal’s freedom to confer authority via a power of attorney in those instances involving acts that, whether by their nature, public policy, statute or contract, require personal performance.45 These represent an exception to the agency law tenet expressed in the maxim qui facit per alium facit per se, namely that ‘what a person may do himself, he may do by an agent’.46 This tenet finds expression in the powers of attorney legislation in most jurisdictions, which provides that a power of attorney confers on the attorney authority to do on behalf of the principal anything the principal may lawfully do by an attorney.47

Personal act required by contract 5.23 Where a contract imposes on a principal an obligation to perform a duty or exercise a power personally, the principal cannot, without committing a breach of contract, appoint an attorney to perform that duty or exercise that power. The restriction in this context is contractual, and may be expressed or necessarily implied from the circumstances. As to the latter, an example often cited is a contract to paint a portrait; the artist has been chosen by the client precisely because of his or her personal [page 128] characteristics, and so even without an express term requiring personal performance the contract is treated as a personal one, thus incapable of delegation to an attorney to fulfil its obligations. As explained by an English judge, in more general terms, ‘a party cannot do by an attorney some act the competency to do which arises by virtue of some duty of a personal nature requiring skill or discretion for its exercise’.48

Personal act required by personal nature of principal’s position

5.24 Outside of contract there may also exist limitations on a principal’s ability to delegate to an attorney. Certain offices are treated by the law as personal, in which event their delegation to another person via a power of attorney is illegitimate. Trusts provide the typical illustration, as trustees’ decision-making is personal in nature — expressed in the trustees’ general duty to act personally, which in turn prohibits delegation of decision-making (except under statute)49 — and so trustees cannot delegate their decisionmaking to attorneys.50 Likewise, it is clear from the cases that as the office of a director is a personal responsibility, only the person who holds the office can discharge it, so that ‘a power of attorney is not available for the performance of a duty of a director’s office which is his own personal responsibility as a director’.51 A further illustration involves discretions vested in a person in public office, which the law requires to be exercised personally as opposed to being passed on to an agent or attorney.52

Personal act required by law 5.25 There are certain civil acts that, by their very nature, must be performed personally. This includes acts that centre around areas of personal concern, such as marriage or divorce.53 An American court has remarked, to this end, that although a principal might ‘be bound by acts of [an] agent if [the] agent were to purchase a car on behalf of the principal … or sell certain goods … such is not the case where an agent seeks to obtain a divorce’, which is an area of extreme personal concern rather than a commonplace affair of the marketplace.54 A person’s exercise of the right to vote is likewise characterised as inherently personal, and so incapable of delegation to an attorney.55 That the making of a will [page 129] was traditionally also seen as a personal act56 spawned the rule against testamentary delegation57 (though the rule is now ousted by statute in most jurisdictions),58 stemming, it appears, from the veritable status of testamentary freedom coupled with a belief that ‘to execute a last will and

testament is the most solemn and sacred act of a man’s life’.59 At the same time, there seems nothing inherently objectionable to giving authority to an attorney to renew a binding death benefit nomination in a superannuation context, as this falls outside the testamentary context.60 An obligation to swear an affidavit, which requires the deponent to apply his or her mind to matters that are or should be within his or her own knowledge is a duty of a personal nature requiring skill or discretion for its exercise, and thus falls outside the umbrella of delegation.61 The foregoing is not altered by the powers of attorney legislation empowering an attorney to, inter alia, ‘do any other thing in his own name, by the authority of the [principal]’,62 which has been interpreted in its content purely as an alternative procedure for the attorney to act on behalf of the principal, not to enlarge the scope of what an attorney may do on the principal’s behalf.63 5.26 Whereas the general law has found little difficulty in recognising a person’s right to delegate financial, business or transactional tasks to an attorney, it has shown less enthusiasm in giving effect to a delegation of decision-making over what could be [page 130] described as ‘personal’ or ‘health’ matters.64 These are, the law expects, domains over which a person should exercise their own discretion rather than delegating decision-making to a third party. However, acknowledging a need for persons to be able to make provision for decisions relating to their personal and health well-being in advance of later mental incapacity, statute supplies a vehicle to achieve this outcome in place of the appointment of a guardian by a court or tribunal.65 In the Australian Capital Territory, Queensland and Victoria (upon the commencement of the Powers of Attorney Act 2014) the powers of attorney legislation explicitly envisages that an attorney’s authority under enduring powers of attorney can extend to certain personal and health-related decisions for a principal.66 The same is the case, under the guise of an advance personal plan, in the Northern Territory from 17 March 2014.67 Elsewhere statute provides for a person, at a time of mental capacity, to appoint an ‘enduring

guardian’, thereby invested with the power to make personal and healthrelated decisions should that person later become incapable.68 In Queensland, South Australia and Victoria (and via an advance personal plan in the Northern Territory), moreover, statute empowers persons to make advance health directives to address aspects of their future health care needs.69

Personal act required by statute — signature requirements 5.27 If statute requires an individual to execute an act personally, the individual cannot appoint an attorney for this purpose. To the extent that statute in this regard interferes with a common law right — to do via an attorney what a person may do himself or herself — the interference must be found in the express terms of the enactment or via necessary implication.70 Here the common scenario in the case law involves signature requirements, specifically whether a person must sign personally or can delegate the task of signing to an attorney.71 The point is of especial significance for powers of attorney, as they frequently vest signing authority in an attorney. 5.28 Whether or not a statutory signature requirement can legitimately be delegated to an attorney (or, more generally, to an agent) rests on the terms in which that requirement is phrased, to be construed in context.72 The law approaches the issue via a presumption that ‘where a person authorises another to sign for him, the signature [page 131] of the person so signing is the signature of the person authorising it’.73 And it is a presumption that judges are, in the main, reluctant to upset ‘unless the Statute makes a personal signature indispensable’.74 There is no difficulty where the terms of the statute itself envisage that signature by an attorney is valid. For example, the Corporations Act 2001 (Cth) s 52A states that if the Act requires that something be signed, ‘it can be signed by an individual using a power of attorney from the person required to sign’. If the statute is silent on the point, the presumption generally applies, a

point that is established in agency law generally75 and has been applied in the specific power of attorney context. In Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd,76 for instance, dealing with a statutory provision phrased in terms that ‘[a]n appointment of a proxy is valid if it is signed … by the member of the company making the appointment’,77 Palmer J declared that, as that wording did not oust the presumption, a proxy signed by the company’s duly authorised attorneys could be valid. 5.29 Conversely, if the statute, say, requires that an instrument be ‘made and signed personally by the borrower’, this will ordinarily oust the presumption, as it is difficult to appreciate what other useful purpose the word ‘personally’ could serve.78 The relevant context of the statutory signature requirement may also provide evidence of an intention to require personal signature. In St Ermins Property Co v Tingay,79 a statutory provision for the giving of notice by tenants distinguished between, in the one case, a notice ‘signed by each of the tenants … by whom it is given’, and in remaining cases, ‘signed by or on behalf of each of the tenants … by whom it is given’.80 Lloyd J held that the difference in wording between the two limbs of that provision dictated that although a signature by an attorney, being ‘a signature on behalf of the tenant’, would be valid under the latter limb, it would not be valid under the former limb.81 It followed that the signature requirement under the first limb required personal signature, and signature by an attorney amounted to non-compliance with its requirements.

Temporal parameters to attorney’s authority 5.30 Because powers of attorney, as formal legal documents, create legal consequences — catalogued in Part IV — stemming from the authority conferred by a principal on [page 132]

one or more attorneys, it is important to determine when the authority of an attorney commences, and when it comes to an end.

Commencement of authority 5.31 Private law governing transactions seeks to give effect to the intentions of the party or parties to those transactions. Those intentions thus govern not only the existence of the legal vehicle to effect the relevant dealing, whether it be, say, a contract or a trust, but also when the dealing, and the rights and obligations thereunder, are to take effect. As a power of attorney involves a dealing or transaction within the field of private law, the same applies, as a matter of principle, in respect of powers of attorney. The principal, as the creator of the power, is the person who sets the temporal parameters of the power, most importantly when it is taken to commence, and thereby vests in the attorney the authority within its terms.

Non-enduring powers of attorney 5.32 It is common for non-enduring powers of attorney to commence operation, and with this trigger the attorney’s authority, from the moment that the instrument is executed (subject to statute to the contrary, for instance, which may require registration to make the power, and its authority, effective).82 There is, though, nothing to prevent a principal from stipulating some future date, or some condition or event, that triggers the attorney’s authority under the power. The latter is sometimes termed a ‘springing’ power of attorney,83 a typical event being that the principal has left the jurisdiction84 or has sold a property. The above finds explicit recognition in the Australian Capital Territory, Queensland and forthcoming Victorian powers of attorney statutes, which envisage that a principal may state in a power of attorney when, and how, power under the power of attorney is exercisable.85 If the power does not state when it is exercisable, the Acts declare, in accordance with the general law, it can be exercised once the power is made.86 The form prescribed for powers of attorney in New South Wales is to the same effect.87

Enduring powers of attorney

5.33 What the general law did not recognise is a ‘springing’ power the triggering condition or event for which was the mental incapacity of the principal. Instead, as noted elsewhere,88 incapacity in the principal caused any power of attorney to terminate, leaving only statutory intervention as a means to rectify the resultant difficulties. Statute in each jurisdiction now recognises the validity of what it brands [page 133] an ‘enduring power of attorney’89 (in the Northern Territory, as from 17 March 2014, under the guise of the broader concept of an ‘advance personal plan’),90 the effectiveness of which is not compromised by the principal’s mental incapacity. Being a creature of statute, when authority of an attorney under an enduring power is taken to commence rests on the terms of the statute(s) in question. 5.34 Excepting the Northern Territory from 17 March 2014,91 the statutes allow a principal to create an ‘enduring power’ that confers authority commencing at a time before mental incapacity,92 including from the date on which it is executed (or, more accurately, accepted by the attorney)93 or some other triggering event. The Queensland and Victorian legislation even sets a default position: an enduring power that does not specify a time or event that triggers the authority becomes exercisable once the power is made.94 There are compelling reasons for this default position, as explained by an American commentator:95 The principal’s need for a surrogate decisionmaker may be occasioned by a temporary circumstance, such as transient illness, physical disability, or unavailability to complete a transaction, which does not rise to the level of full-fledged incapacitation. Furthermore, if the principal is suffering from a medical condition that may cause a gradual decline in capacity, the agent may assume responsibilities as needed without the stigma of an incapacity determination to ‘trigger’ the springing power. [But] [p]robably the most compelling reason to execute an immediately effective power of attorney is the opportunity it affords for shared decisionmaking while the principal can still communicate with the agent. Sharing concurrent authority allows the principal to evaluate whether the agent is willing and able to carry out property management in a fashion consistent with the principal’s expectations. If the principal is dissatisfied with the agent’s performance, the principal still has the option of selecting a different agent.

Yet the converse appears to be the position in the Australian Capital Territory; if no triggering event is stipulated, that event is the incapacity of

the principal.96 If an event other than the principal’s incapacity is set to trigger authority under an [page 134] enduring power, but prior to this event occurring the principal becomes incapable, the power becomes operative on the principal’s incapacity.97 5.35 There is no restriction on a principal stipulating that the authority under an enduring power be triggered by his or her mental incapacity.98 As the authority here is triggered by an event, the power of attorney is perhaps better described as a ‘springing’ power than an ‘enduring’ one, for it ‘springs into being’ rather than endures. In this event, the need to identify the moment when a principal loses mental capacity is heightened, as it causes the authority to commence rather than merely continue, whether in the same or a different form. 5.36 It should not be assumed that, outside of an accident or sudden medical condition, a precise moment when a principal loses capacity can be identified. After all, ‘commencement of mental infirmity may be difficult to isolate in many cases, and indeed mental infirmity may come and go’.99 Nor should it be assumed that the principal will necessarily accept the attorney’s ‘interference’ in the principal’s affairs if he or she does not perceive a lack of capacity. As explained by a commentator:100 It is often not clear at what point the principal has become incapacitated. Incapacity usually creeps in as a gradual process, and taking over responsibility for the principal’s affairs can be a delicate matter. If the principal is having difficulty accepting his or her increasing need for assistance, then the attorney-in-fact will need to move slowly. The attorney-in-fact may make a determination that the principal is incapacitated and that the duty to act has been triggered, but the principal may not accept that conclusion. If the attorney-in-fact nevertheless takes over the affairs of the principal, the principal may resist, even to the point of revoking the power of attorney.

It may not, therefore, be easy to determine in every case whether, and when, authority under an enduring power is to commence; the same challenge surfaces in determining whether authority under a non-enduring power has terminated due to the principal’s incapacity.101 A medical assessment of the principal by an appropriately qualified medical practitioner is ultimately the only sure course to address the issue. And a third party who

deals with an attorney whose power depends on the principal having impaired capacity for a matter is justified in asking for evidence, such as a medical certificate, to establish that the principal has impaired capacity.102 The value of a medical opinion is expressly countenanced by the Powers of Attorney Act 2006 (ACT), which states that if, in a proceeding, a question arises about whether, on a particular day or during a particular period, the principal for an enduring power [page 135] of attorney had impaired decision-making capacity,103 whether generally or in relation to a particular matter, a certificate by a doctor on this point is evidence of that fact.104 Also, the relevant tribunal in that jurisdiction, and a court or tribunal in most other jurisdictions, is empowered upon application to make a declaration as to whether or not a principal for an enduring power of attorney has capacity.105 5.37 An alternative approach is one recommended by several Canadian law reform bodies,106 based on a New York law reform commission recommendation,107 which has since translated into statute in several Canadian provinces.108 Generally speaking, it envisages that, where an enduring power of attorney provides that it takes effect on the occurrence of a specified contingency, it may name one or more persons (who can be or include an attorney) on whose written declaration the contingency is conclusively deemed to have occurred for the purpose of bringing the power of attorney into effect. Where the specified contingency relates to the mental incapacity of the principal, but the power of attorney does not name a person who may make a written declaration, or the person named dies before the power of attorney takes effect, the specified contingency is conclusively deemed to have occurred when two medical practitioners declare in writing that it has occurred. 5.38 Importantly, though, irrespective of the moment that the instrument creating an enduring power of attorney identifies as the intended commencement of authority, the Australian powers of attorney legislation

uniformly prescribes that the instrument is not effective to vest authority until the attorney has accepted his or her appointment in the manner prescribed.109 [page 136]

Duration of authority 5.39 Once an attorney’s authority under a power of attorney has commenced, aside from the crucial issue of the scope of that authority (discussed above and in the following chapter), the remaining issue is the duration of that authority. As this dovetails directly into the termination of authority, which is the subject of Chapter 11, the matter is addressed only briefly here. Just as a principal has freedom to appoint an attorney, with authority generally, or in a limited domain, over the principal’s affairs or dealings, the principal also, as a general rule, may set temporal parameters on that authority. The instrument creating the power may itself prescribe a date the arrival of which, or an event the occurrence of which, brings the attorney’s authority to an end.110 Whether or not the instrument so prescribes, there is usually little to prevent a principal from revoking the attorney’s authority; just as the principal gives, he or she may take away.111 There are also events that, by operation of law, serve to revoke an attorney’s authority, such as the death or incapacity of the principal, or of the attorney.112 5.40 However, as discussed above,113 where a valid enduring power of attorney has been created, the mental incapacity of the principal does not cause the attorney’s authority to end. Instead, that authority ‘endures’ the principal’s incapacity. At any time prior to becoming incapable, there is ordinarily no hurdle to the principal revoking the attorney’s authority. But once incapacity has taken hold, the principal lacks the ability to revoke the power, and any revocation of the power or removal of the attorney can be effected only by the relevant court or tribunal.114 5.41 The creature that is the ‘irrevocable power of attorney’ falls outside most of the foregoing. This is because, by virtue of consideration being supplied by the attorney (the power, it is said, is one ‘coupled with an

interest’) pursuant to a power expressed to be irrevocable, both at general law and under statute the principal is deprived of the entitlement to revoke the power during the time within which its purpose remains unfulfilled.115 Because of this, there is a legitimate question as to an irrevocable power being sui generis. 5.42 The duration of authority under a power of attorney is relevant not only to the relationship between the principal and the attorney, but also as regards the attorney’s dealings with third parties pursuant to the power. In dealing with an attorney acting on a principal’s behalf, third parties rely both on the attorney’s actions being within his or her authority and on the authority being current. Third parties may, though, be unaware that the authority has been revoked; this could be because the attorney does not disclose this, or it may be that the attorney may not be aware of its revocation (for instance, that the principal has died). For this reason, statute makes provision for the protection of third parties (and also attorneys) lacking notice that the power has been terminated.116 [page 137]

Variation of authority 5.43 As the principal, except in the event of supervening incapacity or an irrevocable power, remains largely in control of the authority conferred on an attorney under the power, and for this reason can revoke the power at any time,117 it stands to reason that the principal can also vary or modify the scope of the attorney’s authority. As noted below, this can be done in advance of any act within the boundaries of the amended power but outside those of the original power. Otherwise, it can be done ‘after the event’ via the doctrine of ratification.

Extension or contraction of authority 5.44 A Victorian judge has noted that ‘[s]ubject to any contrary sense in the instrument there always resides in the [principal] the right later to instruct

the [attorney] not to act on the power, or to act on it only in a stated way’.118 In the alternative, it is possible for a principal to expand the scope of an attorney’s authority, or extend its duration, beyond the terms of the original power. The issue necessarily arises as to whether any such variation must be effected in writing. The case law does not speak entirely with one voice in this regard;119 there are cases that suggest an oral variation can be effective,120 whereas others favour a need for writing. The better view is the latter, namely that any variation to the attorney’s authority must be in writing. Even outside statute prescribing such a requirement,121 this rests on an analogy with the contract law principle that variation of contracts requiring written evidence can only be fulfilled in writing.122 The formality inherent in powers of attorney123 — which exceeds writing requirements applicable to contracts in the main — presents a compelling reason why contract law principle here analogises with even greater force to powers of attorney. This draws support from the fact that the scope of authority under a power of attorney will likely impact on the principal’s legal relationship with third parties,124 which need not be the case in the ordinary contractual context. So while the general law of agency, in line with contract law, may allow an agent’s written authority to be extended by later oral authority, this is not so where the authority is required by law to be in writing,125 as in the case of powers of attorney. 5.45 In the United States the case law reveals more than one attempt by an attorney to argue that the principal has extended his or her authority orally, almost invariably to authorise a personal benefit to vest in the attorney. Yet consistent with principle, American courts have approached arguments of this kind with considerable suspicion, [page 138] especially as they involve accepting the proposition that what would otherwise be a fiduciary breach could be authorised by parol. Although American courts do not speak entirely with one voice in the field, in accordance with principle the tide is against allowing the admissibility of oral evidence to broaden an attorney’s authority.

One of the strongest case authorities in support of the principle is Kunewa v Joshua,126 where the Intermediate Court of Appeals of Hawaii endorsed a ‘flat’ (‘bright line’) rule precluding the admission of extrinsic evidence in cases of this kind. It reasoned as follows:127 When one considers the manifold opportunities and temptations for self-dealing that are opened up for persons holding general powers of attorney — of which outright transfers for less than value to the attorney-in-fact [himself or] herself are the most obvious — the justification for such a flat rule is apparent.

Courts in several other American states have also adopted an unyielding rule,128 so requiring an extension of authority (especially for an attorney’s ostensibly self-serving purposes) to meet the relevant formality requirements. Endorsing the decision in Kunewa, the Wisconsin Court of Appeals in Praekfe v American Enterprise Life Insurance Co129 opined that ‘the interest of justice supports the application of this rule’, especially as regards alleged oral extensions of authority pursuant to an enduring power of attorney prior to the principal’s incapacity. That ‘people of advanced age, especially those who are isolated and dependent, commonly tell friends and family what they believe those individuals want to hear to promote harmony and companionship’130 was, in the court’s view, a further justification for a blanket rule. 5.46 Ultimately, when faced with an assessment of whether the principal’s intent is best expressed in written form, duly witnessed, or rather in later oral form propounded by a self-interested person, it is unsurprising that courts have sided with the former.

Authority conferred via ratification Ratification and its application to powers of attorney 5.47 The law of agency recognises that an agency relationship can be established by the ratification of an exercise of authority by a person who, at the time the authority was exercised, lacked the authority to act for the principal.131 The ratification is the act of the principal in retrospectively ‘creating’ the authority that substantiates the agency relationship. The concept of ratification can also be utilised in agency law to validate an agent’s excess of authority within an existing agency relationship. Again, it involves the principal according validity to an agent’s otherwise unauthorised

act, whether expressly or by inference. In each scenario, though, ratification can only be legally effective to retrospectively vest authority if the principal has full knowledge of all the material facts and circumstances pertaining to the agent’s unauthorised act(s).132 [page 139] 5.48 As powers of attorney comprise a subset of agency law, it stands to reason that the doctrine of ratification may have application in that context. However, because powers of attorney must, to be valid, fulfil the requisite formality requirements,133 there is no avenue for powers of attorney to be created by way of ratification. Rather, the doctrine of ratification can have relevance so far as powers of attorney are concerned in the principal subsequently confirming (‘ratifying’) an attorney’s acts that, at the time they were done, fell outside the attorney’s authority.134 The powers of attorney cases in this context centre on two issues: whether the principal had the requisite knowledge to effectively ratify the attorney’s excess of authority; and whether, with this knowledge, the principal actually ratified the attorney’s acts. Each is noted below.

Knowledge in the principal 5.49 As to the first issue, as noted above, ratification presupposes that the principal is possessed with full knowledge of all the material facts and circumstances pertaining to the attorney’s unauthorised act(s).135 The case law highlights various instances of principals who were incompletely informed as to those acts, leading to the rejection of arguments grounded in ratification.136 It also necessarily presumes that the principal is possessed with sufficient mental capacity to ratify the attorney’s acts, and in this context the capacity requirement aligns to that applicable to the principal’s conferral of authority in the first place.137

Evidence of ratification 5.50

So far as the second issue is concerned, namely what amounts to

evidence of ratification, the law holds that ratification need not be express. There is little difficulty when the principal, in unambiguous terms, either ratifies an attorney’s excess of authority138 or refuses to ratify it.139 More challenging are the occasions where the purported ratification is not express. The court must be satisfied that the principal [page 140] intended to ratify,140 but that intention can be implied from the principal’s actions or inaction. For example, in City Bank of Sydney v McLaughlin141 the principal, who regained his sanity four years before the proceedings in question, was found to have ratified his attorney’s unauthorised acts in making payments for his benefit. Griffith CJ reasoned as follows:142 If … during the lunacy claims are made against the lunatic which are settled by one assuming to act as his agent, and he after recovery with knowledge of the facts lies by until the time for asserting the claims if they have not been settled has elapsed, … he must be taken to have acquiesced in and ratified the terms of the settlement.

5.51 This decision reveals that a principal’s failure to disavow an attorney’s excess of authority within a reasonable time of securing the requisite knowledge may constitute ratification. Hence the judicial remarks, vis-à-vis powers of attorney, that ‘[s]ilence when one would naturally be expected to speak may be failure to repudiate and give rise to the inference of affirmance’ and that ‘[r]eceipt or retention of benefits of the unauthorized transaction may constitute intent’.143 What is a reasonable time depends on the circumstances, but in each case ties directly to the time after which the principal becomes vested, or should become vested, with full knowledge of the agent’s unauthorised acts.144 Certainly, where a failure to disavow is coupled with acts adoptive of the excess of authority (for instance, commencing or defending proceedings on the basis that the transaction in question is legitimate), it is difficult to avoid a finding of ratification.145 5.52 It should be noted that a finding that the principal’s inaction does not amount to a ratification of an attorney’s unauthorised act does not preclude a court finding that the principal ‘held out’ the attorney to third parties as having authority (‘ostensible authority’) broader than the attorney’s actual authority, thus rendering the principal potentially liable to those third

parties.146 But in this instance, unlike the case of ratification,147 the principal retains a cause of action against the attorney for acting in excess of authority.

Attorney must have purported to act as attorney 5.53 For ratification to be effective, the law requires that the act ratified purport to have been done by an agent for the person who ratifies.148 The application of this [page 141] requirement to powers of attorney was confirmed by the Privy Council in Imperial Bank of Canada v Begley.149 Essential to ratification, said Lord Maugham, ‘with its necessary consequence of relating back’, was that the attorney ‘shall not be acting for himself, but shall be intending to bind a named or ascertainable principal’.150 There was no room for the application of the doctrine of ratification on the facts because, in the attorney (illegitimately) transferring money of the principal to his own bank account, he had not purported to act as agent for the principal.

Prospective ‘ratification’ clauses in powers of attorney 5.54 A clause in a power of attorney whereby the principal ‘ratifies and confirms and agrees to ratify and confirm whatsoever the attorney shall do or purports to do’, or to the same effect, is not construed to extend the actual authority given by the power of attorney.151 The reason for this was explained by Lord Atkin in Midland Bank Ltd v Reckitt, referring to such a clause:152 [I]t may amount to a promise to adopt acts done within the ostensible authority; and this strengthens the position of those who rely on the ostensible authority by an express promise as well as by an estoppel. If this be so it is difficult to see how the promise could be available except to some one who was aware of it and who acted on the strength of it. But in any case it would appear to be a highly improbable construction to suppose that a principal using this form has precluded himself from objecting to a dealing with his property by a person who had notice in the ordinary circumstances that the agent was exceeding his authority actual and ostensible. It

would mean that the principal was saying either ‘I give you actual authority within defined limits but ostensible authority to do what you like with my property so long as you pretend (“purport”) to be doing it under this document’; or ‘I give you similar actual authority’. Such a construction would make powers of attorney a danger instead of a business facility and would certainly defeat the intention of any reasonable principal.

Moreover, to speak of prospective ratification seems to contradict an essential attribute of ratification, a retrospective creation of authority that did not previously exist. It is unsurprising therefore to find that Lord Atkin’s doubts regarding such clauses have been shared by at least one Australian judge.153 5.55 Alternatively, it has been suggested that a prospective ratification clause could be construed as an irrevocable power of attorney,154 in that both result in the attorney being independent of the principal.155 Yet the underlying assumption — that a prospective ratification clause reveals an intention that the power be irrevocable — may be queried without evdience in the terms to corroborate such an intention. By itself it is almost certainly insufficient, even if the power is indeed ‘coupled with an interest’ as required for an irrevocable power.156 This is especially so for an irrevocable power under the powers of attorney legislation, which requires that the power actually be expressed to be irrevocable.157 [page 142] 5.56 Perhaps more compelling explanations of the effect of prospective ratification clauses are that they validate exercises of authority otherwise vitiated by technical irregularity,158 or otherwise serve to protect the attorney for exercises of authority post-revocation by the principal but prior to being notified of the revocation.159 The latter would serve to mitigate the harshness of the principle in Yonge v Toynbee,160 under which an attorney who contracts with a third party on behalf of a principal, but without knowledge of (say) the principal’s death or mental incapacity, can nonetheless be held liable for breach of warranty of authority to the third party.161

Court’s statutory power to confirm authority — New South Wales

5.57 Statute in New South Wales makes provision for the Supreme Court to confirm the authority of an attorney that has been subsequently affirmed by the principal. It may, on the application of the principal, confirm (whether in whole or in part) any power to do an act under the power of attorney that was beyond the principal’s understanding through mental incapacity at the time the power was given, to the extent that it appears to the court that the principal has affirmed the power before or during the proceedings on the application, and had sufficient mental capacity to affirm the power at that time.162 Although, as is apparent from the High Court’s ruling in City Bank of Sydney v McLaughlin,163 the general law already recognises a principal’s ability to ratify, subsequent to regaining mental capacity, an agent’s unauthorised acts, the statutory jurisdiction goes further. It may, in its terms, extend to affirming a power of attorney itself that would otherwise have been void for lack of mental capacity at the time it was created.164 The New South Wales legislation clearly goes beyond the general law in also vesting in the court a power, again on the application of a principal, to confirm (whether in whole or in part) any power to do an act under the power if it appears to the court that the principal is incapable of affirming the power either because of the continuation of mental incapacity that affected the principal when he or she gave the power, or because the principal is incommunicate,165 and that it is for the principal’s benefit that the power be so confirmed.166 At general law, a principal who lacks mental capacity, or who is incommunicate, lacks the knowledge essential to effect a ratification of [page 143] an attorney’s unauthorised acts. The court’s jurisdiction here, though, is ousted by a contrary intention expressed in the instrument creating the power of attorney, and in any case has effect subject to the terms of that instrument.167 If the Supreme Court makes either of the above orders, it is statutorily prescribed that:168 … any act done by the attorney after the order takes effect that is within the scope of the power is, to the extent it is confirmed, taken to be as good for all purposes and between all persons as

if, at the time when the order took effect, the principal were of full capacity and had in due form confirmed the power of attorney to the extent of the order of confirmation.

1.

See 1.8–1.13.

2.

See 1.11.

3.

See 4.1–4.3.

4.

See 4.4, 4.5.

5.

As to implied authority in agency law see Dal Pont, Agency, Ch 8.

6.

See 8.31–8.50.

7.

See Dal Pont, Agency, [10.6]–[10.9].

8.

See Dal Pont, Agency, [25.19].

9.

See 11.25–11.27.

10. As to advance personal plans see 1.44. 11. See 1.25–1.29, 1.59–1.64. 12. Praekfe v American Enterprise Life Insurance Co (2002) 655 NW 2d 456 at 461 (Wis Ct App) (‘A durable gifting power is a particularly dangerous power in that it survives the principal’s personal ability to monitor its exercise’). 13. See 5.15–5.19. 14. See 5.20–5.29. 15. See 5.30–5.42. 16. See 5.43–5.57. 17. Rosenberg v Suares (1980) 105 Misc 2d 611 at 612 (NY City Ct). 18. Villanueva v Brown (1997) 103 F 3d 1128 at 1137 (3rd Cir). 19. See 1.39, 1.40. 20. Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd [2004] NSWSC 530; BC200404323. 21. See 5.20–5.29. 22. As to fiduciary law in its application to attorneys see 8.31–8.50. 23. See 8.48. 24. See 11.25–11.27. 25. As to advance personal plans see 1.44. 26. See 1.25–1.27, 4.6–4.30. 27. See 1.36. 28. See 11.10. 29. See 11.28, 11.29.

30. See 11.25–11.27. 31. See 2.26, 2.27. 32. See 1.30–1.34, 11.7–11.9. 33. See 1.34, 11.9. 34. Powers of Attorney Act 2006 (ACT) s 54. 35. See Dal Pont, Agency, [7.3]. 36. See 6.13–6.21. 37. See 6.22–6.24. 38. See 6.25–6.69. 39. As to ostensible authority in agency generally see Dal Pont, Agency, Ch 20. 40. See 1.8–1.13. 41. See 9.23–9.33. 42. Villanueva v Brown (1997) 103 F 3d 1128 at 1136 (3rd Cir). See also Bank of America v Horowytz (1968) 248 A 2d 446 at 448 (NJ County Ct). 43. Affluent Freight Sdn Bhd v Sumathi A/P Appukuttan Pillai [2001] MLJU 635 at [*11] (LN) (HC), although this must be qualified by reference to the doctrine of ostensible authority: see 9.23–9.33. 44. Estate of Weiss (deceased) [1962] P 136 at 144 per Scarman J (example given of where the principal instructs an attorney to deprive the principal’s creditors of their respective entitlements). 45. Zaubler v Picone (1984) 100 AD 2d 620 at 621 (NY App). 46. J M Christie v Permewan, Wright & Co Ltd (1904) 1 CLR 693 at 700 per Griffith CJ. 47. Powers of Attorney Act 2006 (ACT) s 13(1); Advance Personal Planning Act 2013 (NT) s 20(1) (in the context of ‘advance personal plans’, as to which see 1.44); Powers of Attorney Act 1998 (Qld) s 8; Powers of Attorney and Agency Act 1984 (SA) s 5(3); Powers of Attorney Act 2000 (Tas) ss 20, 31; Instruments Act 1958 (Vic) s 107(1); Powers of Attorney Act 2014 (Vic) s 7(1) (yet to commence). 48. Clauss v Pir [1988] Ch 267 at 272 per Francis Ferris QC. 49. See 2.14. 50. Express provision to this effect is made in the powers of attorney legislation in some jurisdictions: Powers of Attorney Act 2003 (NSW) s 10 (equivalent to the former Conveyancing Act 1919 (NSW) s 163B(2)(a); see Belfield v Belfield (2012) 16 BPR 31,177; [2012] NSWCA 416; BC201209897 at [67] per Campbell JA, with whom Sackville AJA concurred); Powers of Attorney and Agency Act 1984 (SA) s 5(4) (which has been interpreted as being limited to non-enduring powers of attorney: Estate of Dudley (deceased) (2013) 115 SASR 328; [2013] SASC 22; BC201309027 at [17]–[20] per Gray J); Instruments Act 1958 (Vic) s 107(2), 107(3) (which is confined to non-enduring powers of attorney: s 105(3)); Powers of Attorney Act 2014 (Vic) s 7(2) (b) (confined to non-enduring powers) (yet to commence). 51. Saad v Doumeny Holdings Pty Ltd [2005] NSWSC 893; BC200506715 at [17] per Burchett AJ, referring to Mancini v Mancini (1999) 17 ACLC 1570; [1999] NSWSC 799; BC9904573 at [30] per Bryson J. See also Permanent Trustee Co Ltd v Bernera Holdings Pty Ltd (2004) 11 BPR 21,505; [2004] NSWSC 56; BC200400430 at [39] per Young CJ in Eq; Cheerine Group (International) Pty Ltd v Yeung [2006] NSWSC 1047; BC200607964 at [10] per Young CJ in Eq.

52. See W B Lane and S Young, Administrative Law in Australia, Lawbook Co, Sydney, 2007, pp 139–43. 53. Specific provision to this effect is made in the Advance Personal Planning Act 2013 (NT) s 24(1) (c) and the Powers of Attorney Act 2014 (Vic) s 26(d) (yet to commence). 54. Mallory v Mallory (1982) 113 Misc 2d 912 at 915 (NY). 55. Specific provision to this effect is made in the Advance Personal Planning Act 2013 (NT) s 24(1) (a) and the Powers of Attorney Act 2014 (Vic) s 26(c) (yet to commence). In the context of proxy voting see 2.19–2.21. 56. Easingwood v Easingwood Estate (2013) 361 DLR (4th) 304; [2013] BCCA 182 at [49] per Saunders JA, with whom Levine and Bennett JJA concurred. Specific provision to this effect is made in the Advance Personal Planning Act 2013 (NT) s 24(1)(d) and the Powers of Attorney Act 2014 (Vic) s 26(a) (yet to commence). 57. As to the rule against testamentary non-delegation see I J Hardingham, ‘Rule Against Delegation of Will-Making Power’ (1974) 9 MULR 650. 58. Wills Act 1968 (ACT) s 14A; Succession Act 2006 (NSW) s 44; Wills Act 2000 (NT) s 43; Succession Act 1981 (Qld) s 33R; Wills Act 2008 (Tas) s 58; Wills Act 1997 (Vic) s 48; See G E Dal Pont and K F Mackie, Law of Succession, LexisNexis Butterworths, Australia, 2013, [2.78]– [2.82]. 59. Brimmer v Hartt (1956) 295 P 2d 985 at 1002 (Wyo). Cf R C Brashier, ‘The Ghostwritten Will’ (2013) 93 Boston UL Rev 1803 (who argues that with the increasing (statutory) recognition that an adult can appoint one or more substitute decision-makers for health and personal matters, as well as financial matters, with authority in the event of incapacity – which can accordingly impact on the adult’s personal and financial affairs inter vivos – there are few reasons in principle and policy to deny adults the ability to authorise the making of their will in the event of incapacity). In Australia, the making of wills for incapable persons is a ‘public’ exercise via application to the court for a statutory will: see R Williams and S McCullough, Statutory Will Applications: A Practical Guide, LexisNexis Butterworths, Australia, 2014. 60. See H Gray, ‘Enduring Powers of Attorney – Issues for Trustees’ (November 2012) 24 SLB 93. 61. Cymbol v Cymbol (1986) 122 AD 2d 771 (NY App); Clauss v Pir [1988] Ch 267 at 272 per Francis Ferris QC (who ruled that a requirement under the court rules to verify a list of documents by affidavit could not be performed by the defendant’s solicitors under a power of attorney, reasoning that it involved ‘a personal duty which [the principal] alone can perform because of the personal knowledge which is required’: at 273). It should not be assumed, though, that every instance of swearing an affidavit retains an intensely personal character for this purpose, as there may be occasions where the swearing of an affidavit does not require personal knowledge of the relevant circumstances: see, for example, General Legal Council Ex parte Whitter v Frankson [2006] 1 WLR 2803; [2006] UKPC 42 (where the relevant statutory provision empowered any person aggrieved by an act of professional misconduct committed by a lawyer to apply to a prescribed committee to require the lawyer to answer allegations ‘contained in an affidavit made by such person’; the Privy Council advised that, in this context, the relevant provision did not require the affidavit to have been sworn by the complainant (on the facts, the complainant had instructed her son to make the complaint via affidavit on her behalf), as the affidavit was in the nature of a pleading, to contain the allegations that the attorney must answer but no more). 62. The relevant provisions are discussed at 9.8, 9.9. 63. Clauss v Pir [1988] Ch 267 at 272–3 per Francis Ferris QC (dealing with the equivalent provision

in the English legislation, the Powers of Attorney Act 1971 (UK) s 7(1)(b)). 64. Cf Collier & Lindsay, p 42 (noting that the absence of authority makes it ‘entirely unclear to what extent an attorney can be authorised to make decisions about the personal life of his [principal]’). 65. See 2.30–2.32. 66. See Powers of Attorney Act 2006 (ACT) s 13(2) (see 1.38) (but note the limits in s 35; see also Mental Health (Treatment and Care) Act 1994 (ACT) s 143); Powers of Attorney Act 1998 (Qld) s 32(1) (see 1.48); Powers of Attorney Act 2014 (Vic) s 22(2) (yet to commence) (see 1.55). 67. See Advance Personal Planning Act 2013 (NT) s 8 (discussed at 1.44). 68. See Guardianship Act 1987 (NSW) Pt 2 (esp s 6A); Guardianship and Administration Act 1993 (SA) Pt 3 (esp s 25) (before 1 July 2014); Guardianship and Administration Act 1995 (Tas) Pt 5 (esp s 32(5)); Guardianship and Administration Act 1986 (Vic) Pt 4 Div 5A (to be repealed once the Powers of Attorney Act 2014 (Vic) enters into force); Guardianship and Administration Act 1990 (WA) Pt 9A (esp s 110F). 69. Advance Personal Planning Act 2013 (NT) Pt 4; Powers of Attorney Act 1998 (Qld) Ch 3 Pt 3 (‘advance health directives’: see 1.48); Advance Care Directives Act 2013 (SA) (see 1.51); Medical Treatment Act 1988 (Vic) s 5A; Guardianship and Administration Act 1990 (WA) Pt 9B (‘advance health directives’: see 1.57). 70. Jackson & Co v Napper (1887) 35 Ch D 162 at 172–3 per Stirling J; Grahame v Commissioner for Railways (1946) 46 SR (NSW) 430 at 438 per Davidson J. 71. See, in the context of agency generally, Dal Pont, Agency, [3.19]–[3.25]. 72. Re Whitley Partners Ltd (1886) 32 Ch D 337 at 340 per Bowen LJ; Deputy Commissioner of Taxation v Boxshall (1988) 19 FCR 435 at 438 (FC); Colmup Pty Ltd v Mecair Engineering Pty Ltd (1988) 58 NTR 9 at 12 per Kearney J. 73. R v Justices of Kent (1873) LR 8 QB 305 at 307 per Blackburn J. See also Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [31] per Palmer J. 74. R v Justices of Kent (1873) LR 8 QB 305 at 307 per Quain J. See also at 307 per Archibald J. 75. See, for example, Re Whitley Partners Ltd (1886) 32 Ch D 337; McRae v Coulton (1986) 7 NSWLR 644. 76. (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [33]. 77. Corporations Act 2001 (Cth) s 250A(1). 78. See, for example, Motel Marine Pty Ltd v IAC Finance Pty Ltd (1964) 110 CLR 9; BC6400080 (where the High Court held that, where a statute required a note or memorandum of a contract for the repayment of a loan to be ‘made and signed personally by the borrower’, as an incorporated company could not sign anything personally, the signature requirement was not directed at the protection of companies: at 12–13 per Dixon CJ, at 13 per Kitto, Taylor and Owen JJ; contra at 19–20 per Menzies J in dissent). 79. [2002] 3 EGLR 53; [2002] EWHC 1673 (Ch). 80. Being the distinction between the Leasehold Reform, Housing and Urban Development Act 1993 (UK) s 99(5)(a) and s 99(5)(b). 81. St Ermins Property Co v Tingay [2002] 3 EGLR 53; [2002] EWHC 1673 (Ch) at [35]. 82. This is the case in Tasmania: see 4.46.

83. Comerica Bank-Texas v Texas Commercial Bank National Association (1999) 2 SW 3d 723 at 726 (Tex Ct App); Parnall (Attorney for) v British Columbia (Registrar of Land Titles) (2004) 26 BCLR (4th) 45 at [12] per Saunders JA. Cf the terminology ‘power of attorney in escrow’, which has similarities to a springing power, as ‘[a] deed delivered in escrow is delivered conditionally, to take effect or become operative when a specified event occurs or some condition is fulfilled’ but differs from the ordinary power of attorney because it binds the maker of the deed, who cannot subsequently resile: Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333; [2002] NSWSC 782; BC200205296 at [10] per Austin J. 84. See, for example, Danby v Coutts & Co (1885) 29 Ch D 500. 85. Powers of Attorney Act 2006 (ACT) s 16(1); Powers of Attorney Act 1998 (Qld) s 9(1); Powers of Attorney Act 2014 (Vic) s 10(1). 86. Powers of Attorney Act 2006 (ACT) s 16(2); Powers of Attorney Act 1998 (Qld) s 9(2); Powers of Attorney Act 2014 (Vic) s 10(2). 87. Powers of Attorney Regulation 2011 (NSW) Sch 2. 88. See 11.25–11.27. 89. See 1.25–1.27, 1.58–1.64. 90. As to advance personal plans see 1.44. 91. Under the Advance Personal Planning Act 2013 (NT) s 20(2), which took effect on 17 March 2014 (see 1.44), the decision-maker may exercise that authority only when the represented adult has impaired decision-making capacity for the matter. 92. See Powers of Attorney Act 2006 (ACT) s 31 (limiting the scope of an attorney’s authority preceding mental incapacity to financial matters, given that enduring powers in this jurisdiction can extend to non-financial matters, namely personal and health matters: see 1.38); Powers of Attorney Act 2003 (NSW) s 19(1)(a) (which speaks in terms of an enduring power of attorney stemming from an intention that it will ‘continue to be effective even if the principal lacks capacity’; and see the prescribed form in Powers of Attorney Regulation 2011 (NSW) Sch 2); Powers of Attorney Act 1980 (NT) s 13(a) (phrased similarly to the New South Wales provision; it applies only to enduring powers created by an instrument executed before 17 March 2014); Powers of Attorney Act 1998 (Qld) s 33(1) (which also limits pre-incapacity authority to financial matters for essentially the same reasons); Powers of Attorney and Agency Act 1984 (SA) s 6(1)(b)(i); Powers of Attorney Act 2000 (Tas) s 30(1)(a); Instruments Act 1958 (Vic) s 117(1); Powers of Attorney Act 2014 (Vic) s 39(1) (yet to commence); Guardianship and Administration Act 1990 (WA) s 104(1)(b)(i). 93. As to acceptance in this context see 4.34, 4.35. 94. Powers of Attorney Act 1998 (Qld) s 33(2); Instruments Act 1958 (Vic) s 117(2); Powers of Attorney Act 2014 (Vic) s 39(2) (yet to commence). 95. L S Whitton, ‘Durable Powers of Attorney as an Alternative to Guardianship: Lessons We Have Learned’ (2007) 37 Stetson L Rev 7 at 21 (footnote and paragraph break omitted). 96. This can be inferred from the Powers of Attorney Act 2006 (ACT) s 32(2)(a), which states that a power under an enduring power of attorney can be exercised ‘while the principal has impaired decision-making capacity’. 97. Although only the Australian Capital Territory and forthcoming Victorian legislation contains a provision that makes this explicit (see Powers of Attorney Act 2006 (ACT) s 32(2)(b); Powers of Attorney Act 2014 (Vic) s 39(3)), as a matter of principle it stands to reason that the position

should be the same in other jurisdictions. 98. See, for example, Powers of Attorney and Agency Act 1984 (SA) s 6(1)(b)(ii); Powers of Attorney Act 2000 (Tas) s 30(1)(a); Powers of Attorney Act 2014 (Vic) s 39(1)(b) (yet to commence); Guardianship and Administration Act 1990 (WA) s 104(1)(b)(ii). See also the prescribed form in Powers of Attorney Regulation 2011 (NSW) Sch 2. 99. Parnall (Attorney for) v British Columbia (Registrar of Land Titles) (2004) 26 BCLR (4th) 45 at [32] per Saunders JA. 100. K E Boxx, ‘The Durable Power of Attorney’s Place in the Family of Fiduciary Relationships’ (2001) 36 Georgia L Rev 1 at 52. 101. See 11.25–11.27. 102. Although only the Queensland and forthcoming Victorian legislation makes express reference to this (Powers of Attorney Act 1998 (Qld) s 33(5); Powers of Attorney Act 2014 (Vic) s 39(4)), it is an appropriate precaution for third parties in all jurisdictions. 103. For this purpose, a person has ‘decision-making capacity’ if the person can make decisions in relation to the person’s affairs and understands the nature and effect of the decisions: Powers of Attorney Act 2006 (ACT) s 9(1). A person has ‘impaired decision-making capacity’ if the person cannot make decisions in relation to the person’s affairs or does not understand the nature or effect of the decisions the person makes in relation to the person’s affairs: s 9(2). A list of things that do not indicate impaired decision-making capacity is found in s 91 (namely that the principal is eccentric, makes unwise decisions, does or does not express a particular political or religious opinion, has a particular sexual orientation or expresses a particular sexual preference, engages or has engaged in illegal or immoral conduct, or takes or has taken drugs). The meaning of the phrase ‘understands the nature and effect’ is explained in s 17: see 3.26. The Advance Personal Planning Act 2013 (NT) s 6 contains parallel definitions of ‘decision-making capacity’ and ‘impaired decision-making capacity’ for advance personal plans: see 3.29. 104. Powers of Attorney Act 2006 (ACT) s 87. 105. Guardianship and Management of Property Act 1991 (ACT) s 65 (referring to ‘impaired decisionmaking capacity’); Powers of Attorney Act 2003 (NSW) s 36(3), 36(5); Advance Personal Planning Act 2013 (NT) s 58(a); Powers of Attorney Act 1998 (Qld) s 111; Powers of Attorney Act 2000 (Tas) s 33(2)(d) (also applies vis-à-vis revocation of the power); Instruments Act 1958 (Vic) s 125Y; Powers of Attorney Act 2014 (Vic) s 118(a) (yet to commence); Guardianship and Administration Act 1990 (WA) s 106 (referring to ‘legal capacity’; note also provision for revocation of such a declaration: s 106(5)). 106. See ALRI, Recommendation 25 (as to the background to this recommendation see ALRI (DP), pp 79–87); BCLRC, pp 7–14. 107. Law Revision Commission, State of New York, Report of the Law Revision Commission for 1988, published in Mckinney’s Session Law News, No 4, August 1988. 108. See, for example, Powers of Attorney Act 2000 (Alta) ss 5, 6; Powers of Attorney Act 2006 (Man) ss 6–9; Powers of Attorney Act 2001 (NWT) ss 7–10; Powers of Attorney Act 2002 (Sask) ss 9, 10. 109. Powers of Attorney Act 2006 (ACT) s 23; Powers of Attorney Act 2003 (NSW) s 20(1); Powers of Attorney Act 1980 (NT) s 13(b), Sch 1 (only applies for enduring powers created by instruments executed before 17 March 2014); Powers of Attorney Act 1998 (Qld) s 44(8); Powers of Attorney and Agency Act 1984 (SA) s 6(2)(b), Sch 2; Powers of Attorney Act 2000 (Tas) s 30(2), Form 3 or 4; Instruments Act 1958 (Vic) s 125B; Powers of Attorney Act 2014 (Vic) s 37 (yet to commence);

Guardianship and Administration Act 1990 (WA) s 104(2)(b), Sch 3 Form 2. The acceptance requirement is discussed in more detail at 4.34, 4.35 (generally), 4.54, 4.55 (where multiple attorneys are appointed). 110. This is made explicit for advance personal plans under the Advance Personal Planning Act 2013 (NT) s 11(b)(i). As to advance personal plans see 1.44. 111. See 11.10. 112. See 11.25–11.30 (incapacity), 11.34, 11.35 (death). 113. See 5.33–5.38. 114. See generally Chapter 10. 115. See 1.30–1.34, 11.7–11.9. 116. See 12.6–12.34. 117. See 11.10. 118. R v Holt (1983) 12 A Crim R 1 at 14 per Tadgell J (CCA(Vic)). 119. R D Mackinnon Holdings Pty Ltd v Hind [1984] 2 NSWLR 121 at 123 per McLelland J. 120. See, for example, The Margaret Mitchell (1858) Sw 382 at 400; 166 ER 1174 at 1184 per Dr Lushington (although the case involved alleged revocation of a power rather than its variation); R v Holt (1983) 12 A Crim R 1 at 14 per Tadgell J (CCA(Vic)) (although the purported variation in that case was effected in writing). 121. See, for example, Advance Personal Planning Act 2013 (NT) s 12 (which imposes the same formality requirements – as to form, signature and witnessing – on the amendment (and revocation) of advanced personal plans (as to which see 1.44) as to those application to the creation of those plans: see 4.15). 122. See Carter, [9-25]. 123. See 4.1–4.5. 124. See 9.5–9.22. 125. Minnesota Stoneware Co v McCrossen (1901) 85 NW 1019 at 1021 (Wis). 126. (1996) 924 P 2d 559. 127. Kunewa v Joshua (1996) 924 P 2d 559 at 565, citing from Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 898 (4th Cir). 128. See, for example, Minnesota Stoneware Co v McCrossen (1901) 85 NW 1019 (Wis); Von Wedel v Clark (1949) 84 F Supp 299 at 299 (D NJ); Hodges v Surratt (1978) 366 So 2d 768 (D App Fla); Fender v Fender (1985) 329 SE 2d 430 (SC). 129. (2002) 655 NW 2d 456 at 461. 130. Praekfe v American Enterprise Life Insurance Co (2002) 655 NW 2d 456 at 461. 131. As to ratification in agency law generally see Dal Pont, Agency, Ch 5. 132. On the knowledge issue generally see Dal Pont, Agency, [5.19]–[5.22]. 133. See 4.1–4.30. 134. A parallel notion is found in s 65(2) and 65(3) of the Powers of Attorney Act 2014 (Vic) (not yet commenced), which envisage that a principal may ‘validate’ the attorney’s entry into an otherwise

illegitimate ‘conflict transaction’ (as to which see 7.16). 135. Permanent Trustee Co Ltd v Bernera Holdings Pty Ltd (2004) 11 BPR 21,505; [2004] NSWSC 56; BC200400430 at [62] per Young CJ in Eq. 136. See, for example, Tobin v Melrose [1951] SASR 139 at 147 per Ligertwood J (who held that there could be no ratification because the transaction in question was never disclosed to the principal, but rather carefully concealed from him); Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420 at 9422; BC8701426 per Foster J. 137. Ghosn v Principle Focus Pty Ltd (No 2) [2008] VSC 574; BC200811609 at [105], [106] per Forrest J. As to the capacity requirements in this context see 3.2–3.34. 138. See, for example, Keay v Fenwick (1876) 1 CPD 745 (ratification effected by a power of attorney, which James LJ described ‘as complete a ratification as could be’: at 755); Syed Salim Alhaded v Shaika Amnah [1998] 3 SLR(R) 572; [1998] SGHC 324 (where Chao Hick Tin J held that even if the first power of attorney to conduct legal proceedings was invalid, it was ratified by a subsequent power of attorney: at [33]–[38]); Powers of Attorney Act 2000 (Tas) s 55 (which states that where a person confirms in writing any deed or other act purporting to be executed or done by the person by his or her attorney, the confirmation is ‘taken to be proof of the authority of the attorney to execute the deed or do the act at the relevant time, without production or proof of any power of attorney’). 139. See, for example, Yongnam Development Pte Ltd v Springleaves Tower Ltd [2004] 1 SLR(R) 348; [2003] SGHC 301 at [53], [54] (where S Rajendran J found that the principal did not expressly ratify the acts of the attorney, but on the contrary expressly informed the attorney that it would agree to the unauthorised transaction only if two stipulated conditions were satisfied, which ultimately were not). 140. Abodeely v Cavras (1974) 221 NW 2d 494 at 503 (Iowa) (‘Intent is a necessary element of ratification’). 141. (1909) 9 CLR 615; BC0900009. 142. City Bank of Sydney v McLaughlin (1909) 9 CLR 615 at 626; BC0900009. 143. Abodeely v Cavras (1974) 221 NW 2d 494 at 503 (Iowa). See further, in the context of agency generally, Dal Pont, Agency, [5.28]–[5.32]. 144. Miller v Chatsworth Savings Bank (1927) 212 NW 722 at 724 (Iowa); McLaren Gold Mines Co v Morton (1950) 224 P 2d 975 at 982 (Mont); Abodeely v Abodeely (1974) 221 NW 2d 494 at 503 (Iowa). See further, in the context of agency generally, Dal Pont, Agency, [5.23]–[5.25]. 145. See, for example, Vitek v Estate Homes Pty Ltd [2013] NSWSC 1764; BC201315248 at [44]–[47] per Rein J. 146. As to attorneys’ ostensible authority see 9.23–9.33. Cf the suggestion in Yongnam Development Pte Ltd v Springleaves Tower Ltd [2004] 1 SLR(R) 348; [2003] SGHC 301 at [57] that ‘there may be situations where a failure by the [principal] to keep a third party informed that [an attorney] has acted in excess of his authority can – depending on the circumstances – amount to unconscionable conduct’ for the purposes of an estoppel; in such a case, though, it is unclear how such a doctrine differs from one grounded in ostensible authority, which also has the law of estoppel as its base: see Dal Pont, Agency, [20.7]–[20.12]). 147. See Dal Pont, Agency, [5.35]–[5.37]. 148. As to this principle in the context of agency law generally see Dal Pont, Agency, [5.8]–[5.10]. 149. [1936] 2 All ER 367.

150. Imperial Bank of Canada v Begley [1936] 2 All ER 367 at 374. 151. See Collier and Lindsay, pp 172–4; Bowstead, pp 61–2; Aldridge, p 42. 152. [1933] AC 1 at 18. 153. Tobin v Broadbent (1947) 75 CLR 378 at 398; BC4700530 per Starke J. 154. As to irrevocable powers of attorney see 1.30–1.34, 11.7–11.9. 155. See Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [158] per Palmer J, referring as an example to Perpetual Trustee Co Ltd v Aroney (1944) 44 SR (NSW) 313, which his Honour mistakenly identified as involving an irrevocable power of attorney; the power was actually revocable by its terms. 156. As to the ‘coupled with an interest’ requirement see 1.31–1.33. 157. See 1.34. 158. Aldridge, p 42. 159. See, for example, Russian Commercial and Industrial Bank v Comptoir D’Escompte de Mulhouse [1925] AC 112 at 130–1 per Viscount Cave. 160. [1910] 1 KB 215. 161. See 12.3. Note that this unfairness is in any case rectified by statute: see 12.8 (ACT), 12.11 (NSW), 12.14–12.16 (NT), 12.17 (Qld), 12.21 (SA), 12.24 (Tas), 12.28, 12.29 (Vic), 12.32 (WA). 162. Powers of Attorney Act 2003 (NSW) s 30 (equivalent to the former Conveyancing Act 1919 (NSW) s 163E(4)). 163. (1909) 9 CLR 615; BC0900009, discussed at 5.50. 164. Where a principal who creates a power of attorney lacks the requisite mental capacity, the power so created is void rather than voidable: see 3.19–3.23. 165. For this purpose, a person is ‘incommunicate’ if he or she: (a) suffers from any physical or mental incapacity (whether of a temporary or permanent nature) that makes the person unable: (i) to understand communications respecting the person’s property or affairs, or (ii) to express the person’s intentions respecting the person’s property or affairs; or (b) is unable to receive communications respecting the person’s property or affairs because the person cannot be located or contacted: Powers of Attorney Act 2003 (NSW) s 4(1) (cf the former Conveyancing Act 1919 (NSW) s 163D). A person may be incommunicate even if the incapacity concerned is induced by any drug or by medical or other treatment: s 4(2). 166. Powers of Attorney Act 2003 (NSW) s 31(1) (equivalent to the former Conveyancing Act 1919 (NSW) s 163E(5)). 167. Powers of Attorney Act 2003 (NSW) s 31(2) (equivalent to the former Conveyancing Act 1919 (NSW) s 163E(7)). 168. Powers of Attorney Act 2003 (NSW) s 32 (equivalent to the former Conveyancing Act 1919 (NSW) s 163E(6)).

[page 145]

Chapter 6

Construction of Attorney’s Authority Process of construction At general law Under statute Approach to construction Focus on intention — objective vs subjective Focus on written terms Application of the parol evidence rule Alternatives to parol evidence Interpretation of written terms General approach to interpretation Ordinary vs technical meaning Factual matrix Utility of recitals Implied authority Strict construction Rationale Manifestations of the strict approach to construction Construction of general words by reference to specific words Construction of list of powers in the same sense

6.1 6.1 6.4 6.6 6.7 6.9 6.10 6.12 6.13 6.13 6.14 6.17 6.18 6.22 6.25 6.27 6.31 6.32 6.33

Reading down of expansive language (‘four corners’ approach) Authority generally limited to express terms of power Against whom is ambiguity construed? Interpretation of potentially ‘hazardous’ powers Power to borrow Power to authorise conveyance of land Power to create, modify or revoke a trust Interplay of fiduciary law Application in respect of gifts and voluntary transfers Application of a ‘flat rule’ vis-à-vis gifts?

6.34 6.37 6.41 6.43 6.44 6.46 6.48 6.50 6.53 6.57 [page 146]

Boundaries to strict approach No ‘reading down’ of literal wording But limited by doctrine of fraud on a power Ouster of strict approach where principal involved in illegality?

6.59 6.59 6.64 6.66

Process of construction At general law 6.1 Once a power of attorney has been created, pursuant to the requisite formalities,1 and confers an authority allowed by law,2 which authority is operative,3 the main issue remains one of ascertaining the scope of that authority. Because powers of attorney are formal instruments that are, as a

result, documented in writing, not infrequently in a standard form (without extensive variations), determining the scope of an attorney’s authority involves, in the main, engaging in a process of construing the words chosen by the principal in the relevant instrument. Even in the face of standard forms, though, subtle (and especially substantial) variations in terminology between different powers of attorney dictates that a question of construction decided under one power of attorney cannot be assumed to affect the question to be decided under another.4 6.2 In this sense, the relevant process is arguably little different to that which applies to other legal instruments, such as contracts, trusts and wills. The wording is carefully scrutinised in an effort to ascertain the intention of the relevant person(s). That contracts are premised on two or more parties reaching agreement — exhibiting what has been described as ‘mutuality’ — translates into the process of interpretation, because it is the intention of each of those parties that must be given effect to. As a power of attorney is ordinarily a unilateral document, the focus of any inquiry into intention is on the creator of the power, namely the principal. In this sense, there is a clear parallel between powers of attorney, on the one hand, and wills and (most) trusts, which as unilateral documents target the intention of the testator and settlor, respectively. A further distinction between powers of attorney and contracts, with a potential impact on the process of construction, is that powers of attorney attract fiduciary duties5 whereas contracts ordinarily do not (although contractual terms can support the imposition of fiduciary duties). As fiduciary duties are designed to foster loyalty from the fiduciary (here, the attorney) to the principal, and accordingly proscribe attorneys from engaging in conflict of interest scenarios, it stands to reason that a fiduciary overlay can potentially impact on how the authority under a power of attorney is to be construed. If so, then there are more compelling grounds to interpret powers of attorney according to the principles applicable to interpreting trust deeds, which also function against a fiduciary backdrop, than principles applicable to construing contracts. [page 147]

6.3 Yet consultation of the case law reveals that the courts have, with one exception the impact of which is not always clear, adopted essentially similar approaches to construction, whether the instrument is a power of attorney, a contract, a trust or a will. The one exception, that knows no generally applicable parallel in other contexts, relates to the proposition frequently endorsed in judgments that powers of attorney, or at least the authority thereby conferred, must be strictly construed. The bulk of this chapter is devoted to investigating the nuances of this proposition, and the extent to which it prompts a unique approach, whether or not in tandem with fiduciary law, to construing powers of attorney.

Under statute 6.4 What should also be noted at the outset of a discussion of interpretation of powers of attorney is the increasing role for statutory regulation. To the extent that standard forms are prescribed by statute, and that the scope of attorneys’ authority is phrased in statutory language, it may be that the process of construction is one of statutory construction. If so, it is legitimate to inquire whether the general law backdrop to the statute should inform its construction or whether the statutory language should be approached without existing preconceptions.6 6.5 Statute may impact not only on the approach to construction of powers of attorney. It may also impact upon the scope of authority vested in attorneys. To the extent that this chapter addresses issues relating to scope, it must be read in tandem with, and indeed subject to, the content of Chapter 7, which explains how statute impacts on attorneys’ authority, and the scope of that authority in particular.

Approach to construction 6.6 Most fundamentally, it has been judicially observed that the ambit of the authority conferred ‘pursuant to a power of attorney is derived by properly construing the terms of the instrument in accordance with accepted canons of construction’.7 As foreshadowed above, the aim of this exercise is to ascertain the intention of the principal; after all, as the person who creates the power, and who thereby vests in an attorney authority to effect the

principal’s affairs, it stands to reason that it is the principal’s intention that must be the overriding inquiry.8

Focus on intention — objective vs subjective 6.7 The focus on the principal’s intention should not be understood as an inquiry into the actual state of mind of the principal. Although there are areas of law that speak in terms of subjective intent, the reality is the actual processes of an individual’s mind, as they inform his or her intention, is an inquiry that falls outside the discipline of the law. Accordingly, the inquiry into a principal’s intention in the context of powers of attorney involves an objective exercise. It is the principal’s intention, objectively determined, that is the subject of examination. [page 148] 6.8 Powers of attorney, in this regard, present an inquiry no different from that involved in the law of contract, trusts or wills; in each case it is established that the inquiry into intention is an objective exercise. The need for objective examination cannot be avoided where the person whose intention is relevant is not available to give evidence. For example, a principal who has lost mental capacity can no longer provide cogent evidence as to his or her intention in creating the enduring power of attorney, and therefore in ascertaining the scope of the authority vested in the attorney. Similar issues surface here as in interpreting wills, given that evidence cannot be received from the testator as to his or her testamentary intention. Even if the principal is available to give evidence of his or her intention vis-à-vis the bounds of the attorney’s authority, there is no automatic assumption that every aspect of the principal’s evidence on this point should be accepted. A person’s recollection of his or her intention in creating a document some time earlier may, after all, fade with time. The elapsing of time may reveal events that lead a person to wish the relevant document were phrased differently. And expressions of intention at a later date may be little more than self-serving. Each consideration is directly relevant to a principal under a power of attorney; the issue is the principal’s intent at the time of

creating the power, ‘not what it might or should have been’.9 Accordingly, there may be a real dispute as to the principal’s intention, whether that dispute be with the attorney or with a third party with whom the attorney deals under the power.

Focus on written terms 6.9 In the quest to determine a principal’s intention in delegating authority to an attorney, the most compelling evidence, and obvious starting point, are the words in which the authority is phrased. There are good reasons for this. Statutory writing requirements, in whatever context, serve a primary evidentiary function as to the intention of the party(ies) to the document(s) in question. Importantly, the writing presents a contemporaneous record of that intention, not one that may be coloured by experience, hindsight or memory lapse. Writing requirements are also designed to encourage parties to a written instrument to carefully consider what they desire to document in writing, and how it should be documented (a ‘cautionary’ function).10 That the statutory formality requirements applicable to powers of attorney are more onerous than those prescribed for certain contracts, and generally prescribe witnessing,11 serves to accentuate the focus on their written terms as evidence of the principal’s intention.

Application of the parol evidence rule 6.10 The foregoing presents a reason why the parol evidence rule — which denies admissibility to extrinsic evidence to alter the terms of a written instrument where the party(ies) intended that their intention be documented in its written terms — should apply with greater strictness to powers of attorney than contracts generally. Referring to those who document their contract via a deed, traditionally being the vehicle required to create a power of attorney,12 Lord Blackburn phrased the judicial attitude in the following language:13 [page 149] I think it is quite fixed — and no more wholesome or salutary rule relative to written contracts can be devised — that where parties agree to embody, and do actually embody, their contract in

a formal written deed, then in determining what the contract really was and really meant, a Court must look to the formal deed and to that deed alone.

Also, unlike contracts, powers of attorney are rarely the product of negotiation, and so attempts to adduce pre-contractual negotiations, in apparent disregard of the parol evidence rule, that surface in the contractual context have no counterpart as regards powers of attorney. And so far as concerns the admission of that other main form of extrinsic evidence — subsequent conduct — the courts have displayed a marked disinclination to accept ostensibly self-serving evidence from an attorney that the principal has orally extended the attorney’s authority.14 This explains why an American appellate court made the following observations regarding the application of the parol evidence rule to powers of attorney:15 Where the instrument is a formal one, with comprehensively enumerated powers, the traditional rule that its author’s intent is to be sought entirely in the language of the instrument unless ambiguity makes that impossible, is complemented by the rule that courts may properly assume that such an instrument expresses the principal’s entire intent.

6.11 The foregoing is not to say that the parol evidence rule knows no exception in the context of powers of attorney. An American court has remarked that the rule ‘does not prevent the entire intent of the parties from appearing’,16 and in the old case of Ticehurst v Moore17 the New South Wales Supreme Court found nothing in the power of attorney in question to show that it was intended to be the sole and final instrument as to the powers conferred on the attorney. In that case, the evidence revealed an agreement between principal and attorney entered into prior to the power of attorney, which was recognised by the principal as valid. But parol evidence is most likely to be probative where it supports the strict construction of the power of attorney,18 as in Schock v Nash,19 where the Supreme Court of Delaware supported its decision against a liberal reading of the power by reference to, inter alia, such a reading being inconsistent with the formal expressions of the principal’s valid last will and testament. And in Hodges v Surratt20 testimony of a doctor and nurse relating to the principal’s purpose in executing the power of attorney was admitted, whose evidence was inconsistent with the gifting of the principal’s assets to the attorney, whom the principal had in any case excluded from the terms of his will.

Alternatives to parol evidence 6.12 Scope to circumvent the parol evidence rule in interpreting powers of attorney is nonetheless likely to be limited. In any case, challenges raised by ambiguous wording can often be addressed on a process of construction, and determined upon the strict [page 150] construction approach repeatedly propounded by the courts.21 There is also nothing to preclude the adoption of a ‘factual matrix’ technique — akin to that which applies in the law of contract — to shed light on the intended scope of the attorney’s authority,22 as this logically precedes the construction of the contract and so falls outside the strictures of the parol evidence rule. And except to the extent that statutory formality requirements prescribe otherwise, there seems no reason in principle why at least some of the terms of a power of attorney should not be incorporated by reference to another document23 (although ideally that document should be annexed to the instrument creating the power).

Interpretation of written terms General approach to interpretation 6.13 Manifold judicial remarks can be found to the effect that ‘[p]owers of attorney are construed in accord with the rules for the interpretation of other written instruments’.24 At the same time, and sometimes even in the same judgments, a longstanding and pervading theme is that powers of attorney are to be more strictly construed than other written instruments.25 At first blush the two streams seem incapable of intermingling, especially as other written instruments — namely contracts, trusts and wills — attract no general requirement that they be strictly construed. To see how they can coexist, the rules for interpretation of written instruments, in their application to powers of attorney, must first be canvassed, followed by illustrations of the strict construction approach. Importantly, whatever approach applies, the

interpretation of a power of attorney, as in the case of a contract or trust, presents a question of law rather than one of fact.

Ordinary vs technical meaning 6.14 In accordance with the rules for the interpretation of written instruments generally, words used in a power of attorney are, it has been judicially remarked, ‘to be understood according to their ordinary acceptation, having regard to the language employed in the instrument as a whole’.26 It follows that unless the power of attorney itself defines terms differently to their dictionary meaning, or the context in which the words appear suggests another meaning was intended, the court will not usually sway from the ordinary meaning. The Supreme Court of Montana, with specific reference to technical words, explained the curial approach as follows:27 The words used in the writing are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning, unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed. Technical words are to be interpreted as usually understood by persons in the profession or business to which they relate, unless clearly used in a

[page 151] different sense. The whole of the writing is to be taken together so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.

6.15 Yet there is also case authority suggesting that courts should give the terms used in a power of attorney a technical rather than a popular meaning, an approach justified by reference to powers of attorney ordinarily being very carefully drafted and scrutinised.28 The target here seems to be words whose legal (‘technical’) meaning may diverge in some way from their ordinary meaning, which squarely raises the issue of which meaning the principal intended. It assumes that persons who effect formal legal instruments use formal legal language, which in turn must, subject to evidence of intention to the contrary, take its legal meaning. No doubt the above assumption may be supportable in many instances, but it need not be that all principals are so inclined, even if they have utilised the

services of a lawyer in preparing the power of attorney. The legalese in which many powers of attorney are drafted may struggle to translate to some principals’ understanding. And the trend towards plain language in many of the modern statutory forms for powers of attorney may weigh more strongly in favour of an assumption in favour of ordinary as opposed to technical legal meanings. 6.16 Ultimately, it may be better to avoid making assumptions, and approach the interpretation of each instrument simply by reference to its wording, taken in context. The notion that powers of attorney should invite a special approach to interpretation, or at least one any different to other formal instruments, is therefore one best avoided.

Factual matrix 6.17 For the purposes of construing a contract, it has been said that ‘what the court must do must be to place itself in thought in the same factual matrix as that in which the parties were’.29 The so-called ‘factual matrix’ includes the circumstances surrounding the contract, as well as its aim, object or commercial purpose.30 Even though powers of attorney are infrequently contracts,31 the very breadth of scenarios whereby they may be utilised, coupled with the need to ascertain the intention of their creator, dictates that appreciating the factual matrix may assist — usually to confirm or reject an interpretation rather than establish one — in construing the scope of an attorney’s authority.32 Judicial remarks, in the powers of attorney context, that ‘[t]he authorization of an [attorney] is interpreted in light of the accompanying circumstances’,33 that ‘the relation of the parties and the nature [page 152] and character of business transacted by the agent should be considered’,34 and that ‘it is necessary to approach matters on the basis of attempting to determine what the objective and purpose was for giving the power of attorney’,35 are clearly suggestive of a factual matrix approach.

Utility of recitals 6.18 Where there is uncertainty regarding the scope of an attorney’s authority, the court looks first to the document itself, construing its terms in the context in which they appear in an attempt to ascertain the principal’s intention. This represents the standard legal approach to interpreting written instruments, and proceeds on the understanding that the meaning of terms or phrases is capable of being determined by, inter alia, comparing and contrasting the language adopted in other parts of the relevant instrument. Of course, if the ambiguous term or phrase is actually defined in the power of attorney itself, that definition is, as in the law of contract, assumed to reflect the intention of the principal, even if the term or phrase attracts a different dictionary or technical legal meaning. 6.19 Part of the contextual approach to construction may involve reference to words appearing at the outset of the relevant instrument. As in contracts and trusts, it is possible for a principal to preface a power of attorney with a set of recitals. Where recitals convey an indication of what the principal sought to achieve via the power of attorney, as is a common function of recitals, it is legitimate that they be used, if they are relevant and do not cut across the express terms of the power in the body of the instrument, to assist the court to determine the boundaries of the attorney’s intended authority. Although recitals may serve, in a sense, to supply a factual matrix for the power — that is, its objective and purpose36 — their use falls outside the factual matrix concept because it derives from the terms of the power itself. 6.20 Reference to the contents of recitals as an aid to interpretation presupposes some uncertainty or ambiguity in the terminology appearing in the body of the power of attorney. The rule has been phrased in terms that ‘you cannot control clear words … by words of recital’ but that, for this purpose, ‘general words are not within that description of clear words’.37 Kay J in Danby v Coutts & Co38 described this rule as ‘a canon of construction more satisfactory and of larger application than the other’, and opined that a power of attorney ‘seems to me precisely the kind of instrument [page 153]

which may be limited by a recital’. Over a century later an Australian judge has, to this end, stated the rule in terms that ‘[r]ecitals in a power of attorney which show its object will control general terms in the operative part of the instrument’.39 The decision of the Appellate Division of the Alberta Supreme Court in Andrews v Sinclair40 illustrates how recitals can have a restrictive effect on otherwise general wording in the body of the instrument. In the preamble to the relevant power, the principal expressed his desire to appoint a proper person with such powers and authority as may be necessary for enabling him to sell, call in and collect, or otherwise dispose of, or convert into money property in Canada belonging to the principal. Although the operative clauses of the power vested in the attorney an ostensibly general authority, Stuart JA construed the words in the preamble as revealing no intention to confer a power to borrow money, to execute a covenant to repay it and to mortgage the property in question.41 6.21 The rule of construction can serve to limit the duration of the power even though its operative clause(s) do not prescribe any limitation on its duration, and in this event the law usually assumes that the power lasts until it is revoked.42 The issue arose squarely in Danby v Coutts & Co,43 where although the operative part of the power made no reference to its duration, its recitals twice stated that it should have effect ‘during my absence from England’. As these statements were not ‘repugnant to anything in the operative part’, Kay J construed them as ‘used for expressing the limit of time during which the power was to be exercised’.44

Implied authority 6.22 As noted earlier in this work,45 the formality inherent in powers of attorney dictates that the boundaries of an attorney’s authority are ordinarily prescribed expressly under the power. This does not, however, preclude any role for implied authority, namely authority that is incidental to the proper execution of the attorney’s express authority. The general principle, and one that aligns with the strict construction given to powers of attorney,46 is that a power ‘is interpreted as giving only such authority as it confers expressly or by necessary implication47 Given the obvious link between authority and power, some phrase the same principle in terms of power, that ‘the

instrument creating the power will be held to grant only those powers which are expressly defined and such others as are essential in effectuating the expressed powers’.48 [page 154] 6.23 The concept of implied authority manifests itself in various powers of attorney cases in which courts have construed an express grant of authority to do one thing to give the attorney implied authority to do another thing. For example, in International Harvester Co of Australia Ltd v Bowerman49 Nicholls J held that an attorney given power to pay ‘with cash or with property or with both’ had the implied power to execute instruments to transfer property. Another example of implied authority stemming from express conferral of authority is The King v Registrar of Titles,50 where a power of attorney vested in the attorney power: … to sell any part … of the appropriated assets for cash or credit, with or without security, and on such terms and conditions as the said attorney shall think fit, and to convey any property sold to the purchaser … [and] to sign, seal and execute all such transfers … and instruments of every description as may be reasonably required, or as the attorney may think necessary to carry out any of the powers hereof.

Although the attorney sold land within the power, the Registrar refused to register the transfer without proof that the principal had received the purchase money. Schutt J held that the power to receive purchase moneys was implied from the express words of the power.51 The Registrar was accordingly not entitled to require proof that the principal had received the money. 6.24 The narrow parameters within which implied authority usually functions in the law of powers of attorney is revealed by the language in which the courts frame the relevant inquiry, namely ‘necessary implication’ or ‘essential in effectuating the expressed powers’. Being phrased in ‘necessary’ or ‘essential’ terms highlights that implied authority is not assumed merely because it is useful or practical in the circumstances. Especially where the alleged implied authority has the capacity to deplete the principal’s property — an authority to make gifts, for instance52 — or ostensibly involves an expansion of authority after the principal has lost mental capacity,53 courts will incline against the principal having intended this outcome. It has been judicially said, to this end, that ‘[c]ompelling policy

considerations counsel great care by courts asked to infer powers not expressly authorized by powers of attorney’.54 [page 155]

Strict construction 6.25 The case law reveals a consistent emphasis on strict construction when it comes to powers of attorney. This strict construction approach has lengthy antecedents,55 and continues to apply, without any sign of dissent, across the common law world. In 2008, for instance, a Queensland judge noted that ‘[p]owers of attorney are strictly construed’56 and a New South Wales judge branded powers of attorney as ‘instruments which have traditionally been strictly construed’.57 As powers of attorney are primarily about authority, the target for the strictness in construction is almost invariably the clause(s) dealing with the attorney’s authority. 6.26 It should be noted at the outset, though, that a New South Wales judge has refused to construe powers of attorney established pursuant to the statutory schema and form by reference to rules of construction propounded at general law.58 If correct, this view may downplay much of what appears in this chapter in its application to interpreting powers of attorney. Notwithstanding, it is argued in the following chapter that this view should not be followed, or at least not to its logical conclusion as to oust over a century of established law.

Rationale 6.27 Although established as a matter of law, the rationale for adopting a strict construction is one that seems assumed, as a matter primarily of policy, rather than explained. It may be a corollary of powers of attorney being created via a deed,59 and therefore being ‘a higher form of authority than a mere written or oral expression of consent’.60 It may be that powers of attorney are ordinarily unilateral and voluntary, and vest in an attorney (sometimes ostensibly plenary) authority to act for or on behalf of a principal.

And although a principal can monitor that exercise of authority, he or she has selected the attorney precisely because the latter is trustworthy, and so does not require constant superintendence. The law reflects this, in turn, by imposing on attorneys the full force of fiduciary responsibility.61 6.28 Yet the imposition of fiduciary responsibility cannot be the only justification for the strict construction approach. In another relationship that has traditionally been seen as unilateral and voluntary, and that attracts fiduciary duties — the trust — no corresponding strict approach to construing trustees’ power(s) or authority applies.62 Perhaps the reason for this is that the creator of the trust (the settlor), having created the trust, either ‘steps out of the picture’ or retains some interest in (as a beneficiary) or control over (as trustee or appointor) the trust. The control on a trustee’s abuse of position is ordinarily the beneficiaries. For powers of attorney, it is the creator of the power (the principal) who is positioned to control an abuse of an attorney’s authority [page 156] and, in the usual case, may revoke the power at any time.63 As such, there appear few grounds to distinguish the trust from a power of attorney as to the approach to construing power or authority, except as regards enduring powers of attorney upon the principal’s loss of mental capacity, and with this the loss of capacity to effectively monitor the exercise of the attorney’s authority. 6.29 Another reason that appears to sometimes underscore the strict construction approach is that powers of attorney are legal documents often couched in legal language, not infrequently with the input of lawyers, as opposed to being ‘home made’ documents. Persons who execute a legal document64 are assumed to have given the matter due consideration, and when coupled with the (potentially broad) authority (and trust) placed in the attorney, should not therefore be held to confer authority broader than the actual words used. Had they intended a broader authority, they would have used different or additional wording, it may be surmised. The extent to which this consideration should carry undue weight, though, may be queried, in that where a trust (or contract) is formally drafted, there applies no equivalent strict construction approach.

6.30 From another perspective, it has been judicially stated that powers of attorney ‘must be strictly construed according to their terms, because the rights of other persons may be affected’.65 It is unclear, though, how third parties’ interests should necessarily translate in this fashion. This presupposes that third parties dealing with an attorney are aware of the terms of the power — which in the case of a power of attorney is arguably more likely than in other agencies — and themselves adopt a strict construction of the authority conferred by it, or otherwise deal at their peril. Rather than a reason to construe powers of attorney strictly, it essentially casts a greater onus on third parties in dealing with attorneys. At the same time, as the doctrine of ostensible authority applies to powers of attorney as it does in agency generally,66 there remains scope for an attorney to create legal obligations for his or her principal even outside of the (strictly construed) terms of the attorney’s authority, if the principal can be seen to have ‘held out’ the attorney as possessing this broader authority. To this end, how the strict construction approach interacts with ostensible authority is not entirely clear.67

Manifestations of the strict approach to construction 6.31 Be that as it may, the strict construction approach to powers of attorney is entrenched. It is thus important to identify how the approach is manifested in its application to powers of attorney. It should be understood at the outset that it has multiple manifestations or iterations. It does not in every case dictate precisely the same inquiry, although these manifestations can overlap. The main such manifestations or iterations are catalogued and explained below. [page 157]

Construction of general words by reference to specific words 6.32

The High Court of Australia has characterised as ‘a long established

rule’ that ‘general words in a power of attorney are to be strictly construed’.68 Directed to the same end, although more pointedly, is the admonition to ‘discount or disregard, as meaningless verbiage, all-embracing expressions found in powers of attorney’.69 A common illustration of the application of this ‘rule’ is in interpreting general powers that follow, or otherwise coexist with, specific powers vested in the attorney. In this context it has been judicially observed that ‘[g]eneral words in it will be construed by reference to special powers conferred’.70 Or in the more expansive terms adopted by Cussen J over a century ago:71 … general words in a power of attorney are restricted to what is necessary for the proper execution of the special powers … and are construed as enlarging the special powers when necessary, and only when necessary, for the accomplishment of the purpose for which the authority is given.

His Honour opined that ‘[i]n the interpretation of such words a rule of construction has almost if not quite hardened into a rule of law’.72 The same has been explicitly recognised by judges in Canada73 and the United States.74 An example of the application of the rule, as well as the general contextual approach to construing powers of attorney,75 is found in the Supreme Court of Wisconsin’s decision in Schmitz v Firstar Bank Milwaukee,76 involving a power of attorney given in the following terms: [page 158] I, Eric M Schmitz, as owner of the life insurance policies identified below, do hereby designate Georgetown Financial Corporation as my attorney to act in my name, place and stead to do everything that is required, as fully as if done by me personally, to register and obtain acknowledgement of the Assignment of Life Insurance Policy form(s), and accomplish the surrender of the life insurance polic(ies) identified below and negotiation of their cash values, and including any other requested information … Power of Attorney also applies to stocks, bonds and other securities.

The court noted that, with the exception of the final sentence, applying the power of attorney to a variety of types of financial accounts or investments in addition to insurance policies, every other aspect of the power of attorney was narrowly crafted. The first sentence, the line providing the greatest detail, authorised the attorney to act in regard to life insurance policies ‘identified below’. Following the printed text of the power was a space for inserting the company name and the policy name and number. To read the final sentence

of the power broadly enough to encompass any other investments and accounts of the principal required, said the court, that ‘the final sentence … be wrestled free from its context’.77 A more natural reading of the power involved keeping the final sentence within the narrow confines of the rest of the document. In other words, in context, ‘the final sentence serves to modify the first sentence’, so that only the insurance policies and investments listed in the power were covered by the document.78 This reading of the power was, the court reasoned, supported by the title of the document, ‘Limited Power of Attorney’, which ‘point[ed] to a narrow reading of the powers granted’.79 And in the court’s view, it made no sense to say that ‘a document that requires a list of individual policy names and numbers and then applies the power of attorney to other investments grants broad authority over all investment accounts, whether listed or not’.80 The decision highlights that courts do not ignore the significance of restrictive clauses contained in instruments granting powers of attorney81 and, in line with the strict approach to construction, will not interpret a power of attorney in a fashion that renders a restrictive provision superfluous.82

Construction of list of powers in the same sense 6.33 The maxim copulatio verborum indicat acceptationem in eodem sensu — that coupling words together shows that they ought to be understood in the same sense — which is intended to aid in arriving at the meaning of the parties to documents, is equally as applicable in construing a power of attorney as any other instrument. This principle is commonly applied in the search for meaning of a word within a list, as appears in the leading case, Coondoo v Watson.83 There the power of attorney culminated in the words ‘[a]nd for the purposes aforesaid to sign for me, and in my name and on my behalf, any and every contract or agreement, acceptance, or other document’. The ‘purposes aforesaid’ were the following: From time to time to negotiate, make sale, dispose of, assign, and transfer, or cause to be procured and assigned and transferred, at their or his discretion, all or any of the government promissory notes or other government paper, &c, and also for me, and in

[page 159]

my name, and on my behalf, from time to time, at their or his discretion, to contract for, purchase, and accept the transfer into my name of any government promissory notes or other government paper, &c.

The appellant contended that the words ‘negotiate’ and ‘dispose of’ authorised the attorneys to pledge the promissory notes for money borrowed on the principal’s behalf. The Privy Council remarked that ‘[i]n order to see what was intended by these words, they must be looked at in connection with the context, as well as with the general object of the power’, and that doing so revealed that the power was aimed at authorising the attorneys to sell or purchase government promissory notes and other securities for the principal, not to borrow or lend money upon them.84 Had the word ‘negotiate’ stood alone, their Lordships advised, its meaning might have been doubtful, although when applied to a bill of exchange or ordinary promissory note, it would probably be understood to mean to sell or discount, and not to pledge it. In any event, as it did not stand alone, by looking at the words with which it was coupled, the court ruled that it could not have the effect contended by the appellant and, for the same reason, nor could the phrase ‘dispose of’ have that effect. The judgment also illustrates the courts’ reticence to construe general words as vesting in an attorney what has been termed a ‘hazardous’ power, a point developed later in this chapter.85

Reading down of expansive language (‘four corners’ approach) 6.34 Associated with the copulatio verborum indicat acceptationem in eodem sensu approach is the principle that expansive language is not interpreted to go beyond the scope (‘four corners’) of the power. In the words of Lord Macnaghten in Bryant, Powis and Bryant v La Banque Du Peuple,86 ‘it is necessary to shew that on fair construction of the whole instrument the authority in question is to be found within the four corners of the instrument, either in express terms or by necessary implication’. 6.35 Often cited as the leading Australian case is Tobin v Broadbent,87 where before going abroad the plaintiff executed a power of attorney in favour of a stockbroker (H), giving H the following wide powers over the plaintiff’s affairs: To Act in such manner as my attorney may think fit in relation to my affairs generally and the

conduct and management thereof and particularly in relation to: (1) my freehold and leasehold lands tenements and hereditaments; (2) my investments securities moneys bank balances income and personal property of every description; (3) my contracts loans mortgages and business affairs of every description; (4) any legal or arbitration proceedings to which I am or may be at any time hereafter become a party; And I Direct that my attorney may exercise the fullest powers in relation to real and personal property and my affairs and the conduct and management thereof including power in my name and on my behalf to execute sign and do all deeds instruments cheques acts and things in relation thereto as effectually as I myself could execute sign and do the same; And without prejudice to the generality of the foregoing powers

[page 160] (which I hereby declare are to be given the fullest and widest interpretation) and for the purpose merely of affording protection to the persons or corporate body dealing with my attorney or of complying with the rules and requirements of the court or other authority having jurisdiction in the premises I hereby expressly authorise my attorney in my name and on my behalf to do and execute all or any of the acts deeds and things specified in the Schedule hereto.88

The schedule included, inter alia, powers to ‘sell either by public auction or private contract or exchange any part of my … personal property or chattels or other effects for such consideration and subject to such covenants as my attorney may think fit’, ‘sell all or any stocks shares debentures inscribed stock bonds obligations and other securities or investments of a like nature’, and ‘deposit at my bank … any moneys which may come to the hands of my attorney and to withdraw any moneys now standing or hereafter to be standing on deposit in my name at any bank whether solely or jointly with another or others and to invest the same in such stocks shares funds or securities as my attorney may think proper’. H pledged certain share certificates, in fraud of the plaintiff, as part of the security for a loan H took personally from a third party. Before the South Australian Supreme Court Ligertwood J construed the words in the power of attorney ‘without prejudice to the generality of the foregoing powers (which I hereby declare are to be given the fullest and widest interpretation)’ as vesting in H express authority to pledge the plaintiff’s scrip certificates if he thought fit.89 In the High Court Latham CJ viewed a pledge as ‘essentially different from a sale’,90 but was willing to concede that some effect could be given to the ‘fullest and widest interpretation’ as contained in the power by interpreting it to include a power to pledge the plaintiff’s property in dealing

with his affairs. So construed the power would entitle H to pledge the plaintiff’s shares for the purpose of obtaining money for investment on the plaintiff’s behalf. Starke and Dixon JJ, in separate judgments accepted that this could be so, but together with the Chief Justice, rejected the conclusion of the lower court that the power was intended to authorise H to raise money for his own purposes on the security of the plaintiff’s shares.91 6.36 So while it may have been within the parameters (‘four corners’) of the power of attorney for its wide language to confer a power to pledge for the benefit of the principal, to engage in this form of transaction for the benefit of the attorney fell outside those parameters. The decision, accordingly, illustrates a related aspect of the strict construction approach, addressed later in greater detail,92 and stemming in part from the fiduciary duties inherent in a power of attorney — that the law is disinclined to interpret a power of attorney, even if it is phrased in expansive terms, for the use of the principal’s property for the attorney’s own benefit (or the benefit of an associate of the attorney), unless the words of the power expressly state this to be within the principal’s intention. Tobin v Broadbent also suggests a judicial disinclination to accept that powers that are potentially ‘dangerous’ or ‘hazardous’ to the principal’s affairs are authorised except in clear terms.93 [page 161] The case law reveals various other instances of the same principle being applied. For example, in Bank Bumiputra Malaysia Bhd v Langgie94 the defendant granted a power of attorney to his brother in respect of land. Purporting to exercise his powers as attorney, the brother charged the land to the plaintiff to obtain overdraft facilities and a letter of credit for use of a company in which the brother had an interest. The Malaysian High Court held that charging the land for his own benefit rather than for the defendant’s benefit was outside the boundaries of the power, the broad terms of which had to be read subject to the defendant’s objective in the power, being confined to the exercise of the power in respect of the development of the land, and construed so as to include all incidental powers necessary for its effective execution. Accordingly, the court refused the plaintiff’s application for an order to sell the land by auction.

A more recent Australian example is found in Sweeney v Howard,95 where the attorney was given authority to ‘sell or mortgage’ specified land, and the issue was whether this also gave the attorney power to apply the funds so received. Although Windeyer J expressed the tentative view that this would not come within the ‘four corners’ of the power, he categorically stated that ‘the power could not be interpreted as extending to directing payment of the mortgage money away from the [principal]’.96

Authority generally limited to express terms of power 6.37 A manifestation of the strict construction of powers of attorney is that the court ‘strictly limits the authority of an agent to the letter of his instructions’,97 so that ‘under no circumstances will the principal be bound beyond the plain import of the instrument’.98 Consistent with the notion that powers of attorney are formal documents, to which principals are assumed to give careful consideration before executing, there is, it is reasoned, little justification in interpreting the express terms of a power of attorney other than in strict accord with their language,99 or to encompass powers beyond those clearly delineated or specified.100 The underlying assumption is that, had the principal envisaged the attorney to exercise a broader authority, the terms of the power would have reflected this, and it should not fall to the court to interpret the power expansively to impute to the principal an intention he or she may not have had. 6.38 The courts are especially strict in this regard when requested to interpret a broad authority to include a power to benefit the attorney (or an associate) personally. That the principal, in what the law assumes to be carefully chosen language, omits reference to an authority to benefit the attorney will almost invariably lead the court to treat this omission as indicative of an intention not to confer this form of authority. The comparison between included and omitted authority is evident in Estate of Casey v Commissioner of Internal Revenue,101 where an issue was whether the principal had [page 162]

authorised her attorney to gift her property. In ruling against such an authority the United States Court of Appeal for the Fourth Circuit reasoned as follows:102 When one looks to the relevant language of the instrument here to discern [the principal’s] intent on the power at issue, the most powerful indicator of her intent is a glaring omission. Of the four principal purposes for asset transfer — sale, lease, mortgage, and gift — all but gift are expressly authorized, in specific terms, by the power of attorney. When one ponders the care with which this instrument enumerates these specific legal purposes for asset transfer, the omission of gift strongly suggests a positive intent rather than oversight or any opposing intent with respect to that power. And when one considers the feature that distinguishes gift from all the other purposes — the lack of value in exchange — a validating reason for the omission is obvious.

6.39 That is not to say that an attorney can never exercise implied authority.103 But it does indicate that the scope of an attorney’s implied authority will be carefully circumscribed ‘only to confer those incidental, interstitial powers necessary to accomplish objects as to which authority has been expressly conferred’104 or, expressed another way, the attorney’s authority is never extended beyond what ‘is absolutely necessary for carrying the authority into effect’.105 6.40 At the same time, though, the strict construction rule ‘does not go to the extent of destroying the purpose of the power’;106 if the language permits, ‘a power must be construed so as to carry out the purposes of the appointment’.107 For example, in Malaguti v Rosen108 the Supreme Judicial Court of Massachusetts construed authority to borrow money to include the authority to execute a promissory note in the principal’s name for a loan, and to give the lender the ordinary security for it (including bonds, notes or acceptances and collaterals). The power to borrow would otherwise have been unduly restricted and thus would have compromised the principal’s object in executing the power.

Against whom is ambiguity construed? 6.41 In certain contracts, ambiguity is construed strictly against the person who benefits thereunder. For instance, ambiguity in an exclusion clause has traditionally been construed strictly against the party in breach,109 and ambiguity in a costs agreement between lawyer and client has been construed strictly against the lawyer.110 Ambiguities in an instrument are resolved against the party who made it or caused

[page 163] it to be made, it is said, because that party ‘caused the uncertainty to exist’111 and ‘had the better opportunity to understand and explain his meaning’.112 This reasoning applies to lawyers vis-à-vis clients, and to many exclusion clauses, which are located in standard form contracts. 6.42 In this regard, despite the notion that powers of attorney are to be construed in accordance with the rules for the interpretation of written instruments generally,113 powers of attorney here largely fall outside the fold. The strict construction approach, as it applies to powers of attorney, is one that, in the main, favours rather than disfavours the author of the power — the principal. The presence of ambiguity, instead of broadening the authority of the attorney, is approached by way of a narrow construction. This is the converse of the rule of construction noted in the preceding paragraph. One qualification may be where the power of attorney is an instrument supplied by the attorney or third party for the principal’s execution, usually in a standard form, in which case provisions beneficial to the attorney or third party will be construed strictly.114

Interpretation of potentially ‘hazardous’ powers 6.43 One of the boundaries to inferring or implying authority from general words within a power of attorney relates to where the authority sought relates to acts or dealings that can be described as ‘hazardous’ or ‘dangerous’ to the principal. The law assumes that a principal who desires his or her attorney to exercise authority of this kind will confer the authority in express terms rather than trusting the attorney’s or court’s inference as to the principal’s intention, and the inherent uncertainty surrounding this. The following remark, uttered by the Missouri Court of Appeals, exemplifies the judicial attitude:115 Potentially hazardous powers, such as the power to borrow money on behalf of the principal, cannot be inferred from the power of attorney; it must be reasonably clear that the principal intended to grant such power … Language in a power of attorney that apparently grants broad power to convey the principal’s property, such as the power to convey ‘as sufficiently as [the principal] could do personally’, is deemed to be mere ‘window dressing’ and must be disregarded.

Below are catalogued the main powers that courts have identified as being

‘hazardous’ or ‘dangerous’ to the principal’s interests, thus requiring express conferral of authority.

Power to borrow 6.44 An attorney’s power to borrow is generally viewed as a ‘hazardous’ power. It has been branded as ‘among the most important and also dangerous powers which a principal can confer upon an agent’, because manifestly ‘there is a great possibility of the abuse of the power’.116 For this reason, lacking express authority, an attorney’s [page 164] authority to borrow on the principal’s credit is not inferred, and an attorney is not authorised to borrow, unless it is necessarily an incident to the performance of acts that the attorney is authorised to perform on the principal’s behalf.117 To this end, it is unlikely that general words encompass authority to borrow, and this lies in tandem with the rule of construction, discussed earlier,118 that general words in powers of attorney are construed by reference to specific words. For example, in Bank of America v Horowytz119 the power of attorney gave authority ‘to sign and endorse checks, notes and drafts and transact all business with your Day and Night Branch San Francisco Calif’. In line with the rule of construction noted above, the Bergen County Court of New Jersey noted that if a power to borrow was necessarily to be implied by the terms of the power, it needed to be expressed by the specific terms ‘sign … notes’ rather than the general term ‘and transact all business’.120 The court refused to make this implication, ruling that, when construed strictly, those terms did not encompass authority to borrow on the principal’s behalf. In so ruling, the court followed the English Court of Appeal’s decision in Jacobs v Morris,121 where the court refused to accept that an authority to purchase could, by itself, carry to authority to borrow, Vaughan Williams LJ stating the prima facie rule that an attorney ‘cannot borrow unless he has express authority’.

6.45 Likewise, a power ‘to sell and convey’ land ordinarily vests no authority to mortgage the land; sale and mortgage are ‘essentially different’ transactions.122 And in Johns v Cumming123 the Supreme Court of Western Australia held that a power to spend money in carrying on a business did not carry the authority to incur liabilities; any such power needed to be express. A further illustration of curial unwillingness to infer power to borrow, this time from Canada, is Andrews v Sinclair.124 The clause in the power alleged to confer authority to borrow vested in the attorney power: … generally to make, do, sign, deliver and execute all acts, deeds, matters and things whatsoever in or about my property, affairs and business in [Canada] whether hereinbefore alluded or referred to or not as fully and effectually, to all intents and purposes as I myself could do, etc.

The Appellate Division of the Alberta Supreme Court rejected the argument that the addition of the phrase ‘whether hereinbefore alluded or referred to or not’ widened the scope of the power, noting that its logical upshot was that the power became an absolutely general one without any restrictions. Instead Stuart JA formed the ‘clear impression’ that by this phrase the principal merely expressed what would have been the law anyway: ‘conferring such auxiliary powers as might be necessary for effectually doing what was specifically mentioned’.125 As a result, the court ruled that the power [page 165] of attorney did not authorise the attorney to borrow money and to give a mortgage as security for repayment.126

Power to authorise conveyance of land 6.46 It has been judicially stated that ‘[t]o authorize a conveyance of real estate, a power of attorney must be plain in its terms’.127 The reason, once again, is that the conveyance of land is usually a significant (‘hazardous’) transaction, and so the law requires that transactions of this kind, to come within an attorney’s authority, be the subject of clear expression by the principal in the terms of the power of attorney. This explains why, for

instance, Cozens-Hardy LJ in Re Dowson and Jenkins’s Contract128 said that ‘a mere power of attorney enabling an attorney to sue for, recover, and receive money due on a mortgage … does not authorize the attorney to sell … the property’. 6.47 The case law also reveals that general powers to conduct business are unlikely to be construed to authorise the sale of the principal’s land. In the 1863 Queensland case of Re Baxter (No 2)129 a power of attorney gave authority ‘to transact, manage, and conduct all the affairs, matters and concerns belonging to the [principal] … [and] generally to pay, do, and perform … all other matters and things in and about performing the aforesaid powers’. Lutwyche J found the power did not extend to the alienation of land, construing it as ‘a power to take than to bind’.130 His Honour saw the special powers listed as being ‘confined to matters connected with the collection and management of the personal estate’ and doubted whether the general words — ‘all other matters and things in and about performing the aforesaid powers’ — gave sufficient authority to the attorney to bring ejectment proceedings in the principal’s name.131 The year before the United States Supreme Court had reached a similar conclusion in Hodge v Combs.132 There an attorney was appointed as ‘my general and special agent to do and transact all manner of business in which I may be interested there, hereby ratifying and confirming the acts of my agent as fully as if done by myself’. Grier J described the power as one that ‘may be construed to confer almost any or no power’,133 but that it was clear, from the correspondence between the parties to it, that the principal, by this agency to ‘transact all manner of business,’ never supposed that he had authorised his attorney to sell his property. His Honour added that nor did the attorney so construe it until it became necessary to find an excuse for his abuse of trust in applying the proceeds of sale to his own use.

Power to create, modify or revoke a trust 6.48 Although not addressed in English and Australian case law, the weight of case authority from the United States suggests that the power to create,134 modify,

[page 166] or revoke135 a trust is personal, and non-delegable to an attorney unless expressly granted in the power of attorney. In some states this principle has been codified.136 The Uniform Trust Code takes the same position.137 This reasoning is compelling, although it may need qualification where the power is enduring and the principal has become mentally incapable.138 In this event there may be grounds for a more lenient approach to construing an attorney’s authority, as the establishment of a trust for the benefit of the principal and his or her dependants, if within the scope of the power, could be an appropriate course of action.139 6.49 That the power of attorney makes specific mention of an attorney’s power to create or revoke trusts, even if generally rather than by reference to a particular trust, is likely to be sufficient evidence of the principal’s intention to confer upon the attorney that authority. In Matter of Trust of Franzen140 the power authorised the attorney: … to manage … and in any manner deal with any real or personal property, tangible or intangible, or any interest therein … in my name and for my benefit, upon such terms as … [the attorney] shall deem proper, including the funding, creation, and/or revocation of trusts or other investments.

The Supreme Court of Colorado accepted that an authority to create or revoke trusts must be found in the express terms of a power of attorney, but that the above language was sufficient to empower the attorney to revoke a trust even though it made no mention of the trust specifically by name. It ruled that ‘the principal may confer authority to amend or revoke trusts on an agent without referring to the trusts by name in the power of attorney’.141 [page 167]

Interplay of fiduciary law 6.50 The relationship between attorney and principal, being one of agency,142 attracts duties of a fiduciary nature owed by the attorney to the principal.143 Indeed, the level of trust placed by a principal in his or her attorney can, particularly in the case of a general power and an enduring

power, exceed that in most agency relationships. This in turn presents a compelling reason for the law to apply the twin fiduciary proscriptions — to eschew conflict between interest and duty, and not to make an unauthorised profit — strictly in the context of powers of attorney. It is therefore unsurprising that fiduciary law should translate to the process of construing powers of attorney. Hence the judicial observation that an attorney’s authority ought to be construed in line with the rules for interpreting written instruments generally,144 ‘except to the extent the fiduciary relationship requires a special rule’.145 Various of the cases discussed earlier in this chapter, which involved (unsuccessful) attempts to argue that the application of the principal’s property to the attorney’s own use came within the attorney’s authority, were arguably underscored by fiduciary notions.146 As a counterpoint, it is instructive to note that other cases, also discussed earlier, where the court refused to ‘read down’ the terms of the power, in addition to reflecting a sensible business construction of the power, involved no tinge of fiduciary breach.147 6.51 The curial reticence to countenance the existence of custom or practice, independent of express authority, as a ground to dilute fiduciary proscriptions in this context,148 reveals how strictly those proscriptions apply. This is also evidenced by a general reluctance to find that a principal has consented to a fiduciary breach except by explicit language in the instrument creating the power of attorney.149 6.52 What appears below must be read subject to statutory infiltration in several jurisdictions so far as scope for the grant of benefits or gifts to attorneys is concerned. In many respects statute in this context replicates the general approach at law [page 168] — premising authority to personally benefit or to make gifts upon express provision in the power itself — but makes specific provision for the language and/or parameters within which the authority may be exercised. These provisions are discussed in Chapter 7.150

Application in respect of gifts and voluntary transfers 6.53 Though not the only illustration of the application of fiduciary principle to the interpretation of an attorney’s authority — the general principle has been phrased in terms that ‘[w]here a broadly worded power of attorney arguably authorizes acts that may be inconsistent with the principal’s interests or intent, the instrument should not be interpreted as allowing the agent to undertake such acts in the absence of specific authority’151 — a common illustration involves attempts to justify, usually in the context of an enduring power of attorney once the principal is no longer mentally capable, the gifting of the principal’s property to the attorney (or a family member or associate of the attorney). 6.54 Much of the case law derives from the United States, and is driven by attempts to reduce the incidence of death duties. The pre-death distribution of the principal’s property, via a gift (not exceeding the limit allowed by the applicable tax law) to the principal’s family by an attorney under an enduring power, is aimed at reducing the value of the principal’s testamentary estate, and thus the quantum of duty.152 That the policy issues that drive these decisions ostensibly differ from those that drive the strict construction of powers of attorney generally has not prevented the courts adopting an essentially identical approach to construction, rendering the case law in question of more general relevance, including for the purposes of the law in Australia, where death duties are a thing of the past. 6.55 The basic principle that surfaces in the case law, whether or not dealing with death duties, can be stated shortly: a court will not construe a power of attorney to authorise the attorney to gift the principal’s property (whether to the attorney or another person) unless the power expressly authorises the attorney to do so. The omission of a specific gift power in the power of attorney is, generally speaking, treated as ‘dispositive of the principal’s intent on the subject’.153 Where express authority to gift exists, the court will give this effect, as any fiduciary overlay has been ousted by the expression of consent by the principal in the power of attorney itself. It follows that, aligned with the application of fiduciary principle in other contexts,154 the law allows fully informed principals to validly consent — in advance by the terms of a written

instrument — to a fiduciary engaging in what would otherwise be a fiduciary breach. Where, on the other hand, the power of attorney [page 169] contains no language from which the court ‘could find a clear expression of [the principal’s] intent to waive the fiduciary duty of loyalty implied by law’,155 there is ordinarily no scope for the attorney to make gratuitous transfers. 6.56 Phrased in terms more general than gift-making, the Wisconsin Court of Appeals in Praekfe v American Enterprise Life Insurance Co156 couched the relevant proposition in terms that ‘a general authority to deal with assets is not sufficient to exculpate an [attorney] from a charge of self-dealing’. It identified the basic policy concern underlying the law as follows:157 That concern is not linked to any duty an agent may have to third parties, but is primarily addressed to the potential for fraud that exists when an agent acting pursuant to [an enduring] power of attorney has the power to make gifts, especially after the principal becomes incapacitated. A fiduciary will not be allowed to feather his or her own nest unless the power of attorney specifically allows such conduct. In short, where the fiduciary argues that the power of attorney allowed for self-dealing, that power must be specifically authorized in the instrument.

In addition to the fiduciary explanation, other judges have justified this approach by reference to the gift-making power being ‘potentially hazardous to the principal’s interests’ and that it is ‘most unusual’ for an owner of property to effect gift-giving through an attorney rather than by exercising his or her own will in this regard.158 The power of attorney in Praekfe contained broad language that authorised the attorney ‘to do and perform everything for the purpose of … managing, conveying … my property, real as well as personal … as fully as I could do and perform if personally present’, but the court held that this was insufficient to authorise the attorney to self-deal with the principal’s property. In King v Bankerd159 the Maryland Court of Appeals construed a general power authorising the attorney to ‘convey, grant, bargain and/or sell’ the subject property ‘on such terms as to him may seem best’ as not authorising a gratuitous transfer of the principal’s property. To this end, the Supreme Court of Washington has described ‘the consensus view’ as being that:160

… gift transfers or transfers without substantial consideration inuring to the benefit of the principal violate the scope of authority conferred by a general power of attorney to sell, exchange, transfer, or convey property for the benefit of the principal.

Australian authority supports the same outcome. In Chow v Cheung161 Barrett J saw the terms of a power of attorney, which authorised the attorney as regards ‘all matters and dealings in respect of or incidental to the sale of real property at [an identified [page 170] address]’, as ‘quite inapt for the case of a gratuitous transfer by the [principal] to the [attorney]’. Canadian courts have also toed the line,162 as have English courts.163

Application of a ‘flat rule’ vis-à-vis gifts? 6.57 The question necessarily arises as to whether the foregoing should be a ‘flat rule’ — no gift-making authority is conferred on an attorney except in express terms — or whether this form of authority should be capable of arising as a necessary implication from the conferred powers, or from the surrounding facts and circumstances. An example of the latter approach is found in the decision of the United States Court of Appeals for the Fourth Circuit in Estate of Ridenour v Commissioner of the Internal Revenue Service.164 The principal suffered acute renal failure due to congestive heart disease, and could no longer effectively communicate with others. He had appointed his son as attorney, and acting pursuant to the power the son made gifts from the principal’s bank account to himself, his wife, his four children and his three grandchildren in order to reduce the value of the principal’s gross estate and minimise death duties. What led the court to uphold this exercise of authority was that the phrasing of authority in very general terms (and preceding a list of specific powers were the words ‘[w]ithout limiting the generality of the foregoing’), and extrinsic evidence of the principal’s pattern of giving gifts while of capacity, revealed ‘a person well aware of the tax benefits associated with distributions of his assets’, so that all indications were that the principal ‘would have been likely to make the gifts himself had he been capable of doing so’.165

Ridenour arguably presented the most likely scenario for an inference of gift-giving authority, as there was no evident potential for abuse of trust by the attorney, the gifts were made to the natural objects of the principal’s bounty, and the evidence revealed that this appeared to align with the principal’s wishes. It was also decided against the backdrop of a statute amenable to an interpretation allowing attorneys to make gifts in accordance with the principal’s personal history of gift-making. It thus presents a special case, albeit one not devoid of parallels in other American cases,166 reflecting what has been branded as ‘a minority position’.167 In other instances, even courts that envisage a rule capable of yielding to implication or surrounding circumstances — one judge fearing that ‘[a]dopting a bright line rule might preclude a court from carefully considering all the surrounding circumstances to the detriment of the principal’168 [page 171] — have nonetheless been unwilling, when it came to decision time, to source a gift-giving authority in this fashion.169 6.58 Ultimately, the strict construction traditionally adopted in construing attorneys’ authority, when coupled with the fiduciary backdrop against which the exercise of that authority must operate, suggests that the ‘flat rule’ is preferable. Some American courts have explicitly said so. For example, the Supreme Court of South Carolina has ruled that ‘in order to avoid fraud and abuse, we adopt a rule barring a gift by an attorney in fact to himself or a third party absent clear intent to the contrary evidenced in writing’.170 Courts in several other states have followed suit.171 And the United States Court of Appeals for the Fourth Circuit, in a ruling distinguished in Ridenour, cited robust grounds for a ‘flat rule’, reasoning as follows:172 When one considers the manifold opportunities and temptations for self-dealing that are opened up for persons holding general powers of attorney — of which outright transfers for less than value to the attorney-in-fact herself are the most obvious — the justification for such a flat rule is apparent. And its justification is made even more apparent when one considers the ease with which such a rule can be accommodated by principals and their draftsmen.

It also justified a ‘flat rule’ by reference to the court’s traditional concern ‘to protect principals against self-dealing by their attorneys-in-fact even where the specific conduct might be thought to lie within the letter of their

general or specific instructions’, adding that ‘such a rule acts preventively to discourage the temptation to self-dealing by this means and thereby to forestall some destructive fraud litigation that otherwise would occur’.173 These justifications for a ‘flat rule’ are intensified in the event of an enduring power once the principal is incapable, in which case post-capacity protection is almost ‘wholly dependent upon the care with which powers are expressly conferred in the instrument’.174

Boundaries to strict approach No ‘reading down’ of literal wording 6.59 The strict approach to construing powers of attorney, however manifested, does not justify a court in ‘reading down’, or adopting an artificial construction of, the literal words of a power of attorney. After all, the process of construction is directed at ascertaining what the principal intended, and it is not the court’s role to superimpose its own intention on what is the clearly and unambiguously expressed intention of the principal.175 [page 172] 6.60 That a court believes the principal has acted foolishly or improvidently in granting an attorney authority in broad terms, or that this grant of authority is otherwise contrary to the principal’s best interests, presents no legitimate ground for the court to utilise the process of construction to avoid this outcome. As explained by an American appellate court:176 [The principal’s intention, as determined on a process of construction] may or may not coincide with the best interests of, or justice to, particular parties affected by the instrument as circumstances later develop. When they do not coincide, remedy to avoid perceived injustice or to serve unanticipated interests should be sought elsewhere than in a departure from or wrenching of the traditional rules of interpretation. Their maintenance is necessary to predictability in the counseling and drafting of these important instruments and in litigation of disputes over their intended meaning.

Improvidence or foolishness, or even unfairness, in this context may, however, be indicative of deficiencies in the procedure of entering into the

power of attorney, due to say, the lack of capacity177 or being subject to undue influence.178 An Australian judge has, to this end, remarked that ‘the Court is not at liberty to create ambiguities or to distort the language and effect of documents for the purpose of putting a forced construction upon them, merely because unless this is done a party to a document will suffer loss and a person not a party will acquire a benefit’.179 6.61 Consistent with the foregoing, where the words of authority contained in a power of attorney are clear, the courts have refrained from ‘cutting down’ or placing ‘a gloss’ on the words under the banner of strict construction. ‘A strained interpretation of the powers granted should never be given’, an American judge has remarked, warning against frittering away a grant of power ‘by very nice and metaphysical distinctions when the general tenor of the instrument is in favor of what was done under the power’.180 The case law contains multiple examples of courts resisting the temptation to ‘read down’ the expansive terms of a power of attorney where to do so is not warranted on the construction of those terms. In McCutcheon v Registrar of Titles,181 the Full Court of the Victorian Supreme Court construed a power ‘[t]o lend … on mortgage charge or lien of real estate any money belonging to me as ‘sufficiently explicit to cover a second mortgage’. In so ruling, Irvine CJ saw ‘no reason to cut down the language used … to anything less than the meaning which the actual words used are sufficient to convey’.182 Anderson J in Emlen Pty Ltd v Walbrook Trustees (Jersey) Ltd183 saw no reason why a broad power to sell shares should be restricted to selling on usual commercial terms. Where, in Rotorua and Bay of Plenty Hunt Club (Inc) v Baker,184 an attorney was granted full power to lease the principal’s land for the term the attorney thought fit, and to sell it on such terms as he thought fit, Johnston J held that, even on a strict construction, the power was wide enough to allow the attorney to lease the land to the plaintiff, and to grant the plaintiff an option to purchase the land. And a power authorising an attorney to ‘bring … any action suit or other proceeding for recovering [page 173]

or compelling payment’ of any money due to the principal has been held, even on a strict construction, to evince an intention to include the institution of insolvency proceedings as one of the means by which the money might be recovered.185 6.62 As noted earlier,186 the factual matrix within which the power was created can assist the court to confirm, more so than ascertain, the meaning the principal intended that words of authority should take. For instance, the nature of the relationship between the principal and the attorney, including a shared interest in the matter in question coupled with ordinary business experience, may provide a factual matrix for the power of attorney. The decision of the English Court of Appeal in Hawksley v Outram187 illustrates the point. There A, B, C, and D traded in partnership. The defendant (A), who lived abroad, gave a power of attorney to B, to act as follows: … for me and in my name to sell or concur in selling any of my real, leasehold, or personal property to any person or persons, company or companies whatsoever, and either by public auction or privately, upon such terms, subject to such special and other conditions, and in such manner as he shall approve … [a]nd also for me, and in my name and as my act and deed, to sign any deeds that, in the opinion of my said attorney, ought to be executed by me, and generally to do, negotiate, transact, and perfect all and every other act, deed, matter, or thing whatsoever which may be found requisite not only for the purposes before specified but also for the transacting, settling, and adjusting all other my estate, affairs, tradings, dealings, and concerns whatsoever …

B, C and D agreed to sell the partnership business as a going concern to the plaintiff (H), with a restraint of trade clause, and B signed the sale agreement as attorney for A as well as on his own behalf. The English Court of Appeal ruled that B was authorised to enter this transaction on A’s behalf under the power. Apart from being unable to ‘conceive a wider power’ than the one in issue, and thus ‘no reason whatever for cutting that down and confining it to property other than partnership property’, Lindley LJ was clearly influenced by the context in which the power was granted.188 His Lordship, ‘looking at this as a power of attorney given by one partner to another to sell, or concur in selling, his property in any way the attorney thinks best’, refused to construe it as excluding a power to sell the goodwill of the business to the best advantage in a business way, given that ‘as a matter of business … in order to get a good price for the goodwill of a business it is necessary that the vendor shall undertake not to compete with the purchaser in the same

business’.189 Lopes LJ reached the same conclusion, and was likewise influenced by the factual matrix involved, remarking as follows:190 It must be borne in mind that this was a power of attorney given by one partner to another, and it was a power of attorney which clearly authorized a sale of this partnership property. If that is correct, then, having regard to the very large words contained in the power of attorney, it would be a very strong thing to say that it was not the intention

[page 174] of the donor of the power to give to the attorney power to do everything which was incidental to the proper sale of that property and to [the] obtaining a good price for it; and it cannot be denied that the insertion of these two provisions [as to the vendors not carrying on the business within fifty miles and as to the purchaser being at liberty to carry on the business in the name of the old firm] would go far to improve and enhance the price that would be obtained for the property.

6.63 Even acts that may be detrimental to the interests of, or against the subsequent wishes of, the principal are capable of coming within the attorney’s authority where the wording adopted is sufficiently explicit. The ruling in the New Zealand High Court case of Nicholson v Morning Star (St Lukes Garden Apartments) Ltd191 provides an example. There the power of attorney authorised the respondent attorney to, inter alia, ‘withdraw any caveat lodged by the [principal] against the title to any unit or future development unit on Unit Plan 346086’. Doogue AsJ viewed the main purpose of the power as being ‘to provide the [attorney] with a simple, efficient mechanism which would enable him to reverse the act of the [principal] in lodging a caveat’,192 which in turn meant that, far from being exercisable in the interests of the principal, it was clear that the power of attorney was to be used for the benefit of the attorney. His Honour added that ‘[i]t seems to be obvious that the power could be exercised (indeed would probably only be exercised) in circumstances where some point of contention had arisen between the parties’.193 That the use to which the attorney planned to put the power in the case — namely to withdraw a caveat — was ‘an exercise of the power which the contract expressly anticipated’, coupled with the broad reference in the power to an entitlement to withdraw ‘any caveat’, made it difficult, according to Doogue AsJ, to envisage limitations on the exercise of the power to withdraw a caveat.194

But limited by doctrine of fraud on a power 6.64 Even an explicit power such as that in Nicholson v Morning Star may have its limitations, on a strict construction. Like other fiduciary powers, the law superintends their exercise to ensure that they are not exercised to commit a ‘fraud on a power’.195 The law requires that a donee of a power (including an attorney under a power of attorney) exercise that power bona fide and not for any purpose or design other than one within the intention of the donor (here the principal), as evidenced by the instrument creating the power. Where that power is exercised contrary to this principle, the law decrees it bad as a ‘fraud on a power’. The ‘fraud’ element here need not denote conduct that is dishonest or immoral; it merely means that the power has been exercised for a purpose, or with an intention, beyond the scope of or not justified by, the instrument creating it.196 With this in mind, in Nicholson v Morning [page 175] Star197 Doogue AsJ saw it as ‘unlikely that in conferring a power of attorney on the respondent, the applicant gave it carte blanche to act in contravention of the applicant’s contractual rights’. 6.65 The exercise by an attorney of authority for his or her own benefit, or otherwise contrary to the interests of the principal, can present prima facie evidence of fraud on a power unless, of course, the express terms of the power clearly authorise the attorney to do so. Although not usually discussed by reference to fraud on a power, the case law involving attorneys who gift the principal’s property to themselves (or an associate), or who engage in what are described as ‘hazardous’ or ‘dangerous’ transactions on the principal’s behalf, involves a fraud on a power, again assuming that those acts are not expressly authorised. It, moreover, explains why courts are most reticent to interpret general words as authorising attorneys to engage in behaviour of this kind, a point developed in more detail already in this chapter.198

Ouster of strict approach where principal involved in illegality? 6.66 It was suggested earlier in this chapter that, at least to some degree, the strict approach to construing powers of attorney derives from public policy.199 Yet as with any ‘rule’ based on public policy, it should not be assumed that no other public policy can impact on its application. As is not uncommon in the law, there may be competing public policies. 6.67 So far as powers of attorney are concerned, the protection of the principal against attorneys acting for their own benefit has inclined the courts against construing powers of attorney as giving authority to benefit the attorney personally except upon express language in the power itself.200 The policy is to protect principals, even those who vest authority in wide terms, from having their property dissipated in favour of an attorney, the assumption being that principals do not, in the main, intend attorneys to act in this fashion. The concern is that attorneys should not be encouraged to foster their own interests in the course of fiduciary responsibility. 6.68 It may be queried, though, whether all principals necessarily deserve this form of protection. If, for instance, the power of attorney is appurtenant to a scheme by the principal that involves an illegality, there may be grounds in public policy to construe the authority conferred in broader terms if to do so ensures that the principal does not ultimately secure the benefit of that illegality. In Nelson v Nelson201 the High Court of Australia, albeit not in the powers of attorney context, refused to be hamstrung by legal presumptions in determining the allocation of interests in property where this would otherwise frustrate a prevailing public policy. The issue arose, as regards powers of attorney, in the old Canadian Supreme Court decision of Elford v Elford.202 There a wife had granted her husband a power of attorney authorising him to sell and absolutely dispose of the wife’s property and in her name to execute transfers of that property. The power of attorney was granted, it appeared, following the husband having transferred the property in question to his wife in an illegal plan to defeat his creditors. Upon discovering that his wife had been unfaithful, [page 176]

the husband sought to exercise the power to re-vest the property in himself, which the wife opposed on the ground that the power, strictly construed, did not confer this authority. The wife’s (principal’s) participation in her husband’s (attorney’s) illegal plan did not impact on the majority’s judgment. Their Honours applied the orthodox approach to construing the power, and held that because the power did not expressly authorise the husband to transfer the property as he did, he had acted without authority in so doing. The husband could not, it was held, adduce evidence of the reason for the original transfer of the property to substantiate his authority under the power because this would involve adducing evidence of an illegality. In the words of Duff J:203 It is quite clear that the husband would not be heard in an action to impeach the wife’s title brought by himself to set up a claim based upon an arrangement of the character he now seeks to rely upon … and it is equally clear that the wife is entitled to assert her rights as owner, that is to say the rights incidental to her ownership against the husband as well as against a stranger, so long as it is not necessary for the purposes of her case to rely upon the fraudulent arrangement with her husband.

As there was no need for the wife to adduce evidence of involvement in her husband’s illegal plan — after all, she had title to the property, which the law presumed vested in her by way of gift204 — the majority held that the wife was not precluded by illegality from recovering the property in question. Because it was the husband (as attorney) whose case required adducing of evidence of illegality, it was the husband whose evidence was precluded. 6.69 This formulaic approach, with its refusal to look into the conduct of both of the parties, who were in effect co-conspirators to defeat the husband’s creditors, does not sit well with the High Court’s more flexible approach in Nelson v Nelson. It is likely that Australian law would more closely attune with the minority judgments in Elford v Elford, as they considered not only the interests of the husband and wife, but also the broader interests of the husband’s creditors. In effect, the minority judges did not consider that the wife’s claim could stand against that of the husband’s creditors, in view of her involvement in the husband’s illegality. The point was explained as follows by Brodeur J:205 It is disclosed in this case that the wife had conspired with her husband to deprive the creditors of the payment of their legitimate claims and that the power of attorney she gave her husband was given for the purpose of continuing the fraud intended against her husband’s creditors. She seeks, however, to have the Courts to transfer to her the properties in question. It seems to me

that … we should refuse to assist her. The properties should remain in the hands of the husband, to be sold for the payment of the legitimate claims of the husband’s creditors.

As such, the competing ‘equities’ were not between husband and wife, but between the wife and the husband’s creditors. The former having been tainted with illegality, there were grounds for the law to favour the latter, even if this meant construing the power of attorney expansively. Or from another (related) perspective, the wife should be prevented from pleading the husband’s excess of authority, vis-à-vis the husband’s creditors, due to her ‘unclean hands’.

1.

See 4.1–4.30.

2.

See 5.20–5.29 (as to boundaries to the authority that may be conferred by power of attorney).

3.

As to the commencement and duration of an attorney’s authority see 5.30–5.42.

4.

Robinson v Green (1917) 36 DLR 631 at 638 per Ritchie EJ (SC(NS)).

5.

See 8.31–8.50.

6.

The issue is discussed at 7.3–7.5.

7.

Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [118] per Hammerschlag J (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on the power of attorney issue).

8.

McLaren Gold Mines Co v Morton (1950) 224 P 2d 975 at 979 (Mont).

9.

Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 902 (4th Cir).

10. See Carter, [9–02]. 11. See 4.6–4.30. 12. See 4.4. 13. A & J Inglis v John Buttery & Co (1878) LR 3 App Cas 552 at 577. 14. See 5.44–5.46. 15. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 902 (4th Cir). 16. Brassert v Clark (1947) 162 F 2d 967 at 973 (2nd Cir). 17. (1907) 7 SR (NSW) 202 at 208 per A H Simpson CJ in Eq. 18. Cf Re Estate of Kurrelmeyer (2010) 992 A 2d 316 (Vt) (where extrinsic evidence was admitted, in the face of ambiguous language in the relevant power of attorney, to establish that a transaction that appeared contrary to the principal’s interests was in fact aligned with the principal’s wishes). As to the strict construction approach see 6.25–6.69. 19. (1999) 732 A 2d 217 at 226. 20. (1978) 366 So 2d 768 (D App Fla). As to the courts’ unwillingness to construe broad powers to authorise gift-giving see 6.53–6.58.

21. See 6.25–6.69. 22. See 6.17. 23. Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 at 454 (Del). 24. Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 at 454 (Del). To the same effect see Standard Accident Insurance Co v Ayres (1940) 28 NE 2d 50 at 53 (Ind); Kisselbach v County of Camden (1994) 638 A 2d 1383 at 1386 (NJ App); Schmitz v Firstar Bank Milwaukee (2003) 658 NW 2d 442 at 447 (Wis). 25. See 6.25–6.69. 26. Standard Accident Insurance Co v Ayres (1940) 28 NE 2d 50 at 53 (Ind). 27. McLaren Gold Mines Co v Morton (1950) 224 P 2d 975 at 979. 28. See, for example, Abodeely v Cavras (1974) 221 NW 2d 494 at 501 (Iowa); King v Bankerd (1985) 492 A 2d 608 at 612 (Md Ct App). 29. Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 3 All ER 570 at 575 per Lord Wilberforce. Although in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 350; BC8200083 Mason J, with whom Stephen and Wilson JJ concurred, limited the application of this statement to occasions where the terminology is ‘susceptible of more than one meaning’, it appears that modern Australian law recognises no such ‘ambiguity’ limitation: see Carter, [12-13]. 30. Carter, [12-13]. 31. See 2.2–2.7. 32. See, for example, Hawksley v Outram [1892] 3 Ch 359, discussed at 6.62. 33. Realty Growth Investors v Council of Unit Owners (1982) 453 A 2d 450 at 455 (Del) (adding that this includes ‘the relationship of the parties, general usage, and the method of doing business’). See also McLaren Gold Mines Co v Morton (1950) 224 P 2d 975 at 979 (Mont); Willey v Mayer (1994) 876 P 2d 1260 at 1264 (Colo) (the instrument must be construed ‘in light of the surrounding circumstances, including the customs and relations of the parties and the business in which the parties are engaged’); Matter of Trust of Franzen (1998) 955 P 2d 1018 at 1021 (Colo) (referring to ‘the unremarkable proposition’ that ‘a power of attorney giving an agent broad authority to act on behalf of the principal should be construed in light of the surrounding circumstances’). 34. Standard Accident Insurance Co v Ayres (1940) 28 NE 2d 50 at 52 (Ind). 35. Nicholson v Morning Star (St Lukes Garden Apartments) Ltd (2008) 9 NZCPR 407; [2008] NZHC 599 at [74] per Doogue AsJ. See also Hawksley v Outram [1892] 3 Ch 359 at 379 per Lopes LJ (‘general words inserted in a power of attorney are to be construed with reference to the objects which the persons giving the power have in view’). 36. Danby v Coutts & Co (1885) 29 Ch D 500 at 515 per Kay J (who saw ‘no difficulty’ in introducing the recital for the purpose of showing the motive for giving the power of attorney); Andrews v Sinclair [1923] 2 DLR 903 at 905 per Stuart JA (App Div(Alta)). 37. Rooke v Lord Kensington (1856) 2 K & J 753 at 769; 69 ER 986 at 992 per Lord Hatherley (in the context of a conveyance). See also, in the context of a release, Payler v Homersham (1815) 4 M & S 423 at 426; 105 ER 890 at 892 per Lord Ellenborough CJ (‘the general words of a release may be restrained by the particular recital. Common sense requires that it should be so, and in order to construe any instrument truly you must have regard to all its parts, and most especially to the particular words of it’).

38. (1885) 29 Ch D 500 at 514, 515. 39. Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [108] per Hammerschlag J (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on the power of attorney issue). 40. [1923] 2 DLR 903. 41. Andrews v Sinclair [1923] 2 DLR 903 at 905. 42. See 11.10. 43. (1885) 29 Ch D 500. 44. Danby v Coutts & Co (1885) 29 Ch D 500 at 515. See also Overseas Trust Bank Ltd v Tang Chiching [1994] 2 HKLR 73 at 76 per Kempster JA, with whom Clough and Power JJA concurred (noting that on the facts the recitals could not be ignored if the parameters of the attorney’s authority are correctly to be ascertained, as they were not included ‘merely as matters of history or explanation’). 45. See 5.2. 46. See 6.25–6.69. 47. Knox Street Apartments Pty Ltd v Flexman [2002] NSWSC 102; BC200201888 at [18] per Gzell J (emphasis supplied). 48. Standard Accident Insurance Co v Ayres (1940) 28 NE 2d 50 at 53 (Ind) (emphasis supplied). See also Howard v Baillie (1796) 2 H Bl 618 at 619; 126 ER 737 at 738 per Lord Longborough (referring to ‘all the means necessary to be used in order to attain the accomplishment of the object of the principal power’); Hall v Cosby (1972) 258 So 2d 897 at 899 (Ala) (referring to the ‘established rule that powers of attorneys will be given strict construction, restricting the power to those expressly granted, and such incidental powers as are essential to carry into effect the expressed power’); T & TT Enterprise Sdn Bhd v Lembaga Pembangunan dan Lindungan Tanah [2009] 2 MLJ 205 at 212 (CA) (remarking that the power must be construed in accordance with the purpose for which the authority is given, ‘and as necessary for that purpose, so as to include all incidental powers necessary for its effective execution’; emphasis supplied); MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [246] per Graesser J (QB) (‘the attorney’s authority is never extended beyond that which is expressly given, or is absolutely necessary for carrying the authority into effect’). 49. (1913) 9 Tas SR 43 at 45. See also Ballantyne v Coleman (1890) 9 NZLR 131 at 132 per Edwards J (who held that an authority ‘to raise money by way of mortgage upon the security of land’ necessarily included the power to execute the deeds, without which the money could not be raised, and ‘[t]o construe the power in any other way would be to reduce it to a nullity, and defeat the intention of the [principal]’). 50. (1921) 27 ALR 236. 51. The King v Registrar of Titles (1921) 27 ALR 236 at 238. 52. See 6.53–6.58. 53. See 5.44–5.46. 54. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 902 (4th Cir). 55. See, for example, Attwood v Munnings (1827) 7 B & C 278; 108 ER 727; Withington v Herring (1829) 5 Bing 443; 130 ER 1136; Bryant v La Banque du Peuple [1893] AC 170.

56. Williams v Turner [2009] 1 Qd R 296; [2008] QSC 327; BC200811148 at [23] per Wilson J. 57. Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [108] per Hammerschlag J (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on the power of attorney issue). 58. See 7.3–7.5. 59. See 4.4, 4.5. 60. S J Stoljar, The Law of Agency, Sweet & Maxwell, London, 1961, p 91. 61. See 8.31–8.50. 62. As to the interpretation of trust instruments see J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia, 7th ed, LexisNexis Butterworths, Sydney, 2006, Ch 8. 63. See 11.10. 64. And this has been held to include pre-printed standard form instruments: see, for example, Schock v Nash (1999) 732 A 2d 217 at 226 (Del). 65. Re Dowson and Jenkins’s Contract [1904] 2 Ch 219 at 223 per Vaughan Williams LJ. 66. See 9.26–9.28. 67. See 9.28. 68. Tobin v Broadbent (1947) 75 CLR 378 at 390; BC4700530 per Latham CJ. See also King v Bankerd (1985) 492 A 2d 608 at 612 (Md Ct App) (‘general words used in an instrument are restricted by the context in which they are used, and are construed accordingly’). 69. King v Bankerd (1985) 492 A 2d 608 at 612 (Md Ct App). See also Mercantile Trust Co NA v Harper (1981) 622 SW 2d 345 at 349 (Mo Ct App). 70. Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [108] per Hammerschlag J (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on the power of attorney issue) (though noting that this approach has been described as ‘somewhat unfashionable especially in the commercial sphere’: Bowstead, p 122). 71. Re Hoarey [1906] VLR 437 at 444, citing Attwood v Munnings (1827) 7 B & C 278; 108 ER 727; Harper v Godsell (1870) LR 5 QB 422. See also Perry v Holl (1860) 2 De GF & J 38 at 48; 45 ER 536 at 540 per Lord Campbell LC; Knox Street Apartments Pty Ltd v Flexman [2002] NSWSC 102; BC200201888 at [18] per Gzell J (‘Where authority is given to do particular acts followed by general words, the general words are restricted to what is necessary for the proper performance of the particular acts’). 72. Re Hoarey [1906] VLR 437 at 444. 73. See, for example, Arpin v Leclaire [1930] 2 DLR 427 at 431 per Dysart J (KB(Man)) (‘where specific powers are given, followed by general powers, the general powers will be construed as relating to the specific powers, and will be confined to them’). 74. See, for example, Byer v Canadian Bank of Commerce (1937) 65 P 2d 67 at 69 (Cal) (‘When authority is given partly in general terms and partly in specific terms, the general authority gives no higher powers than those specifically mentioned’); Brassert v Clark (1947) 162 F 2d 967 at 973 (2nd Cir) (‘It is well settled law when a written power of attorney contains within itself authority to deal with a specific subject, that, even though it also contains words in the most general terms extending the agent’s authority, that authority does not go beyond the specific subject’); Von Wedel

v Clark (1949) 84 F Supp 299 at 299 (D NJ) (‘broad general phraseology is to be interpreted in the light of the specific powers authorized’); Fort Dearborn Life Insurance Co v Holcomb (2000) 736 NE 2d 578 at 589 (Ill App) (‘No matter how the power is characterized, a “catchall” provision will not operate to expand powers expressly limited in other portions of the same instrument’); Estate of Nicholls v Nicholls (2011) 960 NE 2d 78 at 83 (Ill App) (‘A “catchall” provision will not operate to expand powers not expressly enumerated’). 75. As to which see 6.1–6.21. 76. (2003) 658 NW 2d 442. 77. Schmitz v Firstar Bank Milwaukee (2003) 658 NW 2d 442 at 448. 78. Schmitz v Firstar Bank Milwaukee (2003) 658 NW 2d 442 at 448. 79. Schmitz v Firstar Bank Milwaukee (2003) 658 NW 2d 442 at 448. 80. Schmitz v Firstar Bank Milwaukee (2003) 658 NW 2d 442 at 449 (emphasis in original). 81. Przekopski v Estate of Przekopski 2009 Conn Super LEXIS 110 at [*13]. 82. Wesley v Schaller Subaru Inc (2006) 893 A 2d 389 at 402 (Conn). 83. (1884) 9 App Cas 561. 84. Coondoo v Watson (1884) 9 App Cas 561 at 570 per Sir Richard Couch. 85. See 6.43–6.49. 86. [1893] AC 170 at 177, whose remarks have been endorsed in Australia (see, for example, Sweeney v Howard (2007) 13 BPR 24,381; [2007] NSWSC 852; BC200706435 at [54] per Windeyer J) and New Zealand (see, for example, Parkin v Williams [1986] 1 NZLR 294 at 299 per Richardson J, delivering the reasons of the Court of Appeal). See also Hay v Goldsmidt (1804) 1 Taunt 349n at 351 (‘The most large powers must be construed with reference to the subject-matter’); Withington v Herring (1829) 5 Bing 442 at 456; 130 ER 1132 at 1137 per Best CJ (‘an authority … is not, by mere general words, to be extended beyond the particular object in view’); Esdaile v La Nauze (1835) 1 Y & C Ex 394 at 400; 160 ER 160 at 163 per Alderson B. 87. (1941) 75 CLR 318; BC4700530. 88. Punctuation supplied. 89. Tobin v Broadbent [1946] SASR 191. 90. Tobin v Broadbent (1947) 75 CLR 378 at 391; BC4700530. 91. Tobin v Broadbent (1947) 75 CLR 378 at 391 per Latham CJ, at 398 per Starke J, at 400–1 per Dixon J; BC4700530. 92. See 6.50–6.58. 93. See 6.43–6.49. 94. [1990] 1 MLJ 296. 95. (2007) 13 BPR 24,381; [2007] NSWSC 852; BC200706435. 96. Sweeney v Howard (2007) 13 BPR 24,381; [2007] NSWSC 852; BC200706435 at [54]. 97. Eitel v Schmidlapp (1972) 459 F 2d 609 at 613 (4th Cir). See also Hotchkiss v Middlekauf (1899) 32 SE 36 at 37–8 (Va); Brassert v Clark (1947) 162 F 2d 967 at 973 (2nd Cir) (to same effect). 98. Texas Soil Recycling Inc v Intercargo Insurance Co (2001) 273 F 3d 644 at 651 (5th Cir).

Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 899 (4th Cir) (opining 99. that ‘[l]imiting authority to the letter of an instructing document is … most easily and confidently done by courts where the instrument is a formal and comprehensive one, with carefully enumerated specific powers’). 100. Klein v Weiss (1978) 395 A 2d 126 at 140 (Md Ct App); Praekfe v American Enterprise Life Insurance Co (2002) 655 NW 2d 456 at 459 (Wis Ct App). 101. (1991) 948 F 2d 895 (4th Cir). 102. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 900 (emphasis in original). See also Dingle v Prikhdina (2011) 59 So 3d 326 at 328 (D App Fla) (similarly noting that ‘when the language of the power of attorney is examined to discern the [donor’s] intent, the most persuasive indicator of its intent is the omission of the power to gift’, and that, on the facts, ‘[o]f the four principal purposes of asset transfer — sale, lease, mortgage, and gift — all but gift are expressly authorized by the power of attorney’); H A Lapping, ‘License to Steal: Implied GiftGiving Authority and Powers of Attorney’ (1996) 4 Elder LJ 143 at 168 (noting that as there are four principal mechanisms for transferring assets (sale, lease, mortgage and gift), ‘[i]f a power enumerates these specific legal purposes for asset transfer and omits the gift giving as an option, the omission strongly suggests a positive intent not to grant this power, rather than viewing it merely as a drafting oversight’). As to gift-making authority generally see 6.53–6.58, 7.19–7.22. 103. As to attorneys’ implied authority see 6.22–6.24. 104. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 901 (4th Cir). 105. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [246] per Graesser J (QB). 106. Malaguti v Rosen (1928) 160 NE 532 at 536 (Mass). 107. McLaren Gold Mines Co v Morton (1950) 224 P 2d 975 at 979 (Mont). 108. (1928) 160 NE 532. 109. See Carter, [14-03]–[14-21]. 110. See G E Dal Pont, Law of Costs, 3rd ed, LexisNexis Butterworths, Australia, 2013, [3.5]. 111. Bank of America v Horowytz (1968) 248 A 2d 446 at 450 (NJ County Ct). 112. King v Bankerd (1985) 492 A 2d 608 at 612 (Md Ct App). 113. See 6.13. 114. See, for example, Bank of America v Horowytz (1968) 248 A 2d 446 at 450 (NJ County Ct). 115. Mercantile Trust Co NA v Harper (1981) 622 SW 2d 345 at 349 (Mo Ct App). 116. Bank of America v Horowytz (1968) 248 A 2d 446 at 448 (NJ County Ct). See also Williams v Dugan (1914) 105 NE 615 at 615 per Rugg CJ (Mass) (‘The power to borrow money or to execute and deliver promissory notes is one of the most important which a principal can confer upon an agent. It is fraught with great possibilities of financial calamity. It is not lightly to be implied. It either must be granted by express terms or flow as a necessary and inevitable consequence from the nature of the agency actually created’). 117. Bank of America v Horowytz (1968) 248 A 2d 446 at 448–9 (NJ County Ct). 118. See 6.32. 119. (1968) 248 A 2d 446 (NJ County Ct). 120. Bank of America v Horowytz (1968) 248 A 2d 446 at 449 (NJ County Ct).

121. [1902] 1 Ch 816 at 828. See also at 834 per Cozens-Hardy LJ; Consolidated National Bank v Pacific Coast SS Co (1892) 30 P 96. Jacobs v Morris is discussed in greater detail at 9.30. 122. Hoyt v Jaques (1880) 129 Mass 286 at 288. See, for example, Minnesota Stoneware Co v McCrossen (1901) 85 NW 1019 at 1021 (Wis) (involving ‘the plainest kind of a mere grant of authority to sell and convey real estate’, in which case ‘the court is powerless to make it anything else by any legitimate exercise of judicial power’). 123. (1909) 11 WALR 14. 124. [1923] 2 DLR 903. 125. Andrews v Sinclair [1923] 2 DLR 903 at 905. 126. Andrews v Sinclair [1913] 2 DLR 903 at 906 per Stuart JA (with whom Clarke JA concurred), at 910 per Beck JA. 127. Hall v Cosby (1972) 258 So 2d 897 at 899 (Ala). 128. [1904] 2 Ch 219 at 225. 129. (1863) 1 QSCR 99. 130. Re Baxter (No 2) (1863) 1 QSCR 99 at 102. 131. Re Baxter (No 2) (1863) 1 QSCR 99 at 102. 132. (1861) 66 US 192. 133. Hodge v Combs (1862) 66 US 192 at 194. 134. See, for example, Kotsch v Kotsch (1992) 608 So 2d 879 (Fla Ct App) (strictly construing a power of attorney and concluding that although the power of attorney granted authority to a son to manage the father’s property during his lifetime, it did not authorise the disposition of the father’s property by means of a trust); Re Trust of Jameison (2000) 8 P 3d 83 at 87 (Mon) (noting that ‘[t]he Power of Attorney [did] not specifically grant the authority to create a trust, reflect [the beneficiary’s] intent to create a trust, or even mention a trust’ and that, as a result, ‘the Power of Attorney [did] not authorize [the purported trustee] to transfer … property to herself as trustee and, as a result, [the trust] was not properly created’); Stafford v Crane (2004) 382 F 3d 1175 at 1185 (10th Cir). 135. See, for example, Re Guardianship of Lee (1999) 982 P 2d 539 at 541–2 (Okla Ct App) (ruling that an attorney did not have power to revoke his principal’s revocable living trust when the power to revoke had been specifically reserved to the principal in the trust instrument and not specifically granted to the attorney in the power of attorney); Muller v Bank of America (2000) 12 P 3d 899 at 904 (Kan Ct App) (‘unless the settlor expressly states otherwise in the trust document or the power of attorney, the power to revoke a trust is personal to the settlor and is nondelegable’). 136. See, for example, Cal Prob Code §4264; Fla Stat ch 709.08(7)(b)5; Mo Rev Stat §404.710(6); Neb Rev Stat §30-3854(e); Utah Code Ann §75-5-503; Wash Rev Code §11.94.050. 137. See Uniform Trust Code §602(e) (‘A settlor’s powers with respect to revocation, amendment, or distribution of trust property may be exercised by an agent under a power of attorney only to the extent expressly authorized by the terms of the trust or the power’). 138. See, for example, Easingwood v Easingwood Estate (2013) 361 DLR (4th) 304; [2013] BCCA 182 (where a general enduring power was held to authorise the settlement of an inter vivos trust on the part of the principal: at [44]–[52] per Saunders JA, with whom Levine and Bennett JJA concurred). As to enduring powers of attorney see 1.25–1.27.

139. The statutory endorsement of ‘special disability trusts’ in Australia illustrates the point: see, for example, Social Security Act 1991 (Cth) Pt 3.18A. 140. (1998) 955 P 2d 1018 (Colo). 141. Matter of Trust of Franzen (1998) 955 P 2d 1018 at 1023 (Colo). 142. See 1.8–1.13. 143. See 8.31–8.50. 144. See 6.13. 145. Hendricks Property Management Corp v Birchwood Properties Ltd Partnership (2007) 741 NW 2d 461 at 465 (ND). See also Alerus Financial NA v Western State Bank (2008) 750 NW 2d 412 at 419 (ND); Ward v Ward (No 2) [2011] NSWSC 1292; BC201109231 at [3] per Brereton J (noting that notwithstanding the breadth of the language used in the power of attorney, it did not ‘exonerate the attorney from the fiduciary obligations by which an attorney under power is bound’); R v Kerin (2013) 116 SASR 316; [2013] SASCFC 56; BC201310400 at [149] per Peek J (‘the words of a power of attorney executed in such circumstances will be interpreted as meaning that the donor consents to the donee exercising the powers recited in the power of attorney but only within the terms of the relationship subsisting between the donor and donee’, making it ‘necessary to have regard to the precise nature of the fiduciary relationship in the particular case to delineate the precise content of the duty’; on the facts, involving a solicitor-client relationship between attorney and principal, his Honour ruled that notwithstanding the broad language in which the power was expressed, the principal ‘only consented to … performance [of the acts set out in the instrument] within the bounds of a fiduciary relationship’: at [150]). 146. See, for example, Hodge v Combs (1862) 66 US 192 (discussed at 6.47); Tobin v Broadbent (1947) 75 CLR 378; BC4700530 (discussed at 6.35); Bank Bumiputra Malaysia Bhd v Langgie [1990] 1 MLJ 296 (discussed at 6.36). 147. See, for example, Hawksley v Outram [1892] 3 Ch 359 (discussed at 6.62); Rotorua and Bay of Plenty Hunt Club (Inc) v Baker [1941] NZLR 669 (discussed at 6.61). 148. Crossley v Magniac [1893] 1 Ch 594 at 600 per Romer J. See, for example, Tobin v Broadbent (1947) 75 CLR 378 at 392; BC4700530 per Latham CJ (who rejected any custom or practice that ‘stockbrokers, by reason of the mere fact that they are entrusted with the possession or the custody of securities, have authority to pledge them for their own benefit’). 149. See 8.32, 8.41. 150. See 7.15–7.22. 151. Matter of Trust of Franzen (1998) 955 P 2d 1018 at 1021 (Colo). See also Reckitt v Barnett Pembroke and Slater Ltd [1929] AC 176 at 189 per Viscount Sumner (‘such self-sacrificing trust would be beyond the limits even of romance and it would be wrong to attach to words, which at most are ambiguous, a meaning which bears no relation to the realities of life’); Estate of Rolater (1975) 542 P 2d 219 at 223 (Okla Ct App) (‘In exercising granted powers, the attorney is bound to act for the benefit of his principal avoiding where possible that which is detrimental unless expressly authorized’). 152. See generally H A Lapping, ‘License to Steal: Implied Gift-Giving Authority and Powers of Attorney’ (1996) 4 Elder LJ 143. 153. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 901 (4th Cir). 154. See R P Meagher, J D Heydon and M J Leeming, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 4th ed, LexisNexis Butterworths, Sydney, 2002, [5-115].

155. Nash v Schock 1997 Del Ch LEXIS 174 at *13 (affd Schock v Nash (1999) 732 A 2d 217 at 226 (Del)). 156. (2002) 655 NW 2d 456 at 459, citing as authority Alexopoulos v Dakouras (1970) 179 NW 2d 836 (Wis). 157. Praekfe v American Enterprise Life Insurance Co (2002) 655 NW 2d 456 at 459. 158. King v Bankerd (1985) 492 A 2d 608 at 613 (Md Ct App). 159. (1985) 492 A 2d 608 at 615. 160. Bryant v Bryant (1994) 882 P 2d 169 at 172. See also Brown v Laird (1930) 291 P 352 (Or) (a power of attorney to sell was not the same as a power to make a gift); Von Wedel v Clark (1949) 84 F Supp 299 (D NJ); Johnson v Fraccacreta (1977) 348 So 2d 570 at 572 (Fla Ct App); King v Bankerd (1985) 492 A 2d 608 at 612 (Md Ct App) (‘a general power of attorney authorizing an agent to sell and convey property, although it authorizes him to sell for such price and on such terms as to him shall seem proper, implies a sale for the principal’s benefit … [such that it] does not authorize the agent to make a gift of the property, or to convey or transfer it without a present consideration inuring to the principal’); Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 901–2 (4th Cir). 161. [2008] NSWSC 843; BC200807343 at [28]. 162. See, for example, Re Ericksen Estate (2008) 98 Alta LR (4th) 161 at [43] per Marceau J (QB); MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [291] per Graesser J (QB) (‘Absent an express power, it is clear that the Attorney has no ability to make gifts’). 163. See, for example, Reckitt v Barnett Pembroke and Slater Ltd [1928] 2 KB 244 at 268 per Russell J (‘An attorney, cannot, in the absence of a clear power to do so, make presents to himself or to others of his principal’s property’). 164. (1994) 36 F 3d 332. 165. Estate of Ridenour v Commissioner of the Internal Revenue Service (1994) 36 F 3d 332 at 335. 166. See, for example, Succession of Gorman (1946) 26 So 2d 150 (La) (where the principal executed a power of attorney authorising her half-sister (the attorney) to withdraw her funds from a savings account in a bank, which the attorney withdrew for her own benefit; the court held (at 152) that ‘if the evidence satisfactorily shows that the power of attorney was executed as one of the means of establishing a donation of the funds and the volition of the [principal] to make the gift is still in operation at the moment the [attorney] actually receives the money from the bank, there would seem to be no good reason for holding the donation to be invalid’); Ruch v Commissioner of Internal Revenue (1983) 718 F 2d 719 (5th Cir) (a case factually similar to Gorman, in which Gorman was followed); LeCraw v LeCraw (1991) 401 SE 2d 697 (Ga). 167. H A Lapping, ‘License to Steal: Implied Gift-Giving Authority and Powers of Attorney’ (1996) 4 Elder LJ 143 at 163. 168. Schock v Nash (1999) 732 A 2d 217 at 230 (Del). 169. See, for example, Johnson v Fraccacreta (1977) 348 So 2d 570 at 572 (Fla Ct App); King v Bankerd (1985) 492 A 2d 608 at 612–15 (Md Ct App); Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 901–2 (4th Cir); Schock v Nash (1999) 732 A 2d 217 at 227–9 (Del). 170. Fender v Fender (1985) 329 SE 2d 430 at 431 (SC). 171. See, for example, Bryant v Bryant (1994) 882 P 2d 169 at 172 (Wash); Re Estate of Crabtree

(1996) 550 NW 2d 168 at 170 (Iowa); Kunewa v Joshua (1996) 924 P 2d 559 at 565–6 (Haw App); Whitford v Gaskill (1997) 480 SE 2d 690 at 692 (NC). 172. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 898 (4th Cir). See also Praekfe v American Enterprise Life Insurance Co (2002) 655 NW 2d 456 at 461 (Wis Ct App). 173. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 899 (4th Cir). 174. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 899 (4th Cir). As to enduring powers generally see 1.25–1.27. 175. Withington v Herring (1829) 5 Bing 442 at 456; 130 ER 1132 at 1137 per Best CJ; Posner v Bayless (1882) 59 Md 56 at 60 (Md Ct App). 176. Estate of Casey v Commissioner of Internal Revenue (1991) 948 F 2d 895 at 902 (4th Cir). 177. See 3.5–3.31. 178. See 3.43–3.45. 179. Perpetual Trustee Company Ltd v Smith (1938) 39 SR(NSW) 19 at 41 per Jordan CJ (FC). 180. McLaren Gold Mines Co v Morton (1950) 224 P 2d 975 at 979 (Mont). 181. [1927] VLR 93 at 97 per Irvine CJ. 182. McCutcheon v Registrar of Titles [1927] VLR 93 at 97. 183. (SC(WA), Anderson J, 19 June 1997, unreported) BC9702697. 184. [1941] NZLR 669 at 674–5. 185. Re Anderson [1909] VLR 465 at 467 per Cussen J. See also Re Williams (1911) 28 WN (NSW) 119 (where a power authorising the attorney ‘to commence, carry on, prosecute, or defend any action, suit, or other proceeding’ was held to authorise the institution of proceedings in bankruptcy against a debtor of the principal). 186. See 6.17. 187. [1892] 3 Ch 359. 188. Hawksley v Outram [1892] 3 Ch 359 at 375. 189. Hawksley v Outram [1892] 3 Ch 359 at 375. 190. Hawksley v Outram [1892] 3 Ch 359 at 378. See also at 380–1 per A L Smith LJ (reasoning that as the power ‘is as large a power of attorney as could well be drawn, and it has no recital at the beginning which cuts down the general words at the end’ (as to which see 6.18–6.21), ‘on [its] true construction … [A] gave [B] full power to sell and concur in selling the business in the manner in which he thought it best in the interests of all to sell it’). 191. (2008) 9 NZCPR 407; [2008] NZHC 599. 192. Nicholson v Morning Star (St Lukes Garden Apartments) Ltd (2008) 9 NZCPR 407; [2008] NZHC 599 at [75]. 193. Nicholson v Morning Star (St Lukes Garden Apartments) Ltd (2008) 9 NZCPR 407; [2008] NZHC 599 at [76]. 194. Nicholson v Morning Star (St Lukes Garden Apartments) Ltd (2008) 9 NZCPR 407; [2008] NZHC 599 at [78], [79]. 195. As to the doctrine of fraud on a power generally see G Thomas, Thomas on Powers, 2nd ed, OUP, Oxford, 1998, Ch 9; Dal Pont, Equity & Trusts, [8.50]–[8.85].

196. Vatcher v Paull [1915] AC 372 at 378 (PC); Dwyer v Ross (1992) 34 FCR 463 at 467 per Davies J; Re Burton (1994) 126 ALR 557 at 559–60; BC9405738 per Davies J; Wong v Burt [2005] 1 NZLR 91; [2004] NZCA 174 at [28] per Hammond J. 197. Nicholson v Morning Star (St Lukes Garden Apartments) Ltd (2008) 9 NZCPR 407; [2008] NZHC 599 at [79]. 198. See 6.43–6.49. 199. See 6.27. 200. See 6.50–6.58. 201. (1995) 184 CLR 538; BC9501517, as to which see Dal Pont, Equity & Trusts, [19.40], [19.45]. 202. [1922] SCR 125. 203. Elford v Elford [1922] SCR 125 at 129. See also at 129–30 per Anglin J (with whom Davies CJ concurred), at 133–4 per Mignault J. 204. Pursuant to the presumption of advancement, which applies to transfers of property from husband and wife: see Dal Pont, Equity & Trusts, [26.125]. 205. Elford v Elford [1922] SCR 125 at 132. See also at 127–8 per Idington J.

[page 177]

Chapter 7

Scope of Attorney’s Authority Under Statute General provisions relating to authority For non-enduring powers of attorney For enduring powers Specific provisions relating to authority Execution of documents by attorney Authority to execute instruments in the attorney’s own name Execution of instruments by or on behalf of corporations Administration under a power of attorney Personal benefit to attorney or third parties General statutory proscriptions Benefit allowed via use of prescribed expressions Scope for gift-making Limits on payments pursuant to enduring powers of attorney

7.1

7.2 7.2 7.6 7.9 7.9 7.9 7.13 7.14 7.15 7.15 7.17 7.19 7.23

Under the general law, the scope of an attorney’s authority is

determined almost exclusively by the terms of the power of attorney, construed in accordance with the principles discussed in the two preceding chapters. This authority must be read in tandem with the powers of attorney legislation in each jurisdiction, in both general provisions and specific provisions, subdivided in this fashion below, relating to attorneys’ authority. Consistent with the principles of statutory interpretation, these provisions alter the general law only to the extent that their terms purport to do so, or otherwise have that effect by necessary implication.

General provisions relating to authority For non-enduring powers of attorney 7.2 The powers of attorney legislation in most jurisdictions contains an express provision in terms, or to the effect, that a principal may, by a nonenduring power of attorney, appoint one or more persons to do ‘on behalf of’ the principal anything that the principal may lawfully authorise an attorney to do.1 In making this provision, [page 178] the legislation does no more than reflect the general law.2 It has been held that the Australian Capital Territory legislation here applies only to ‘general powers of attorney’ as understood by the law,3 but this view may be queried.4 That the legislation in most other jurisdictions specifically refers to a general power of attorney having effect subject to any restrictions specified in the instrument creating it5 — in which case the power would be a ‘special power of attorney’6 — suggests no intended diversion from the general law. 7.3 In New South Wales the above provisions, in applying to ‘prescribed powers of attorney’, have equal relevance to enduring powers of attorney.7 The case law there reveals a dichotomy of views regarding the extent to which general law concepts of construction should apply in the statutory

environment. In Spina v Permanent Custodians Ltd8 Hammerschlag J reasoned that because the scope of the attorney’s authority, pursuant to these provisions, derives from statute, the scope of the power vested in the attorney is strictly speaking not a matter of construction of the terms of the power but rather of the legislation, on the ground that a ‘prescribed power of attorney’ gives the authority described by the statute. As the only statutory limitation on an attorney’s authority is that a principal could not authorise the attorney to do what the principal could not lawfully do,9 his Honour rejected the application of rules of construction emanating from the general law that would restrict this authority. At issue was a clause in a power that read as follows: In the exercise of the authority conferred on my attorney by section 163B of the Conveyancing Act 1919, my attorney is authorised to execute an assurance or other document, or do any other act, whereby a benefit is conferred on my attorney.

Less than three months earlier Austin J in Spina v Conran Associates Pty Ltd10 had interpreted this very same clause as not authorising the attorney to enter into a contract with a third party solely for the benefit of the attorney. Conduct of this kind, his Honour reasoned, could not be construed as ‘on behalf of’ or ‘as attorney’ [page 179] for the principal ‘under the terms of the legislation. Hammerschlag J rejected this interpretation, remarking that ‘[a]s a matter of language a person may lawfully authorise another to do something on his or her behalf which is entirely inimical to the first person’s interests or entirely in the second’s’.11 He criticised Austin J’s approach for illegitimately allowing the general law to put a gloss on, and restrict the operation of, the plain wording of the statute,12 opining that:13 … to construe words in a written instrument or statutory provision by reference to fiduciary duties [to] which the relationship created by that instrument or provision gives rise, involves circularity and is contrary to accepted canons of construction and binding authority.

This seems odd, as it is not unusual for courts to construe instruments that give rise to fiduciary duties as not entitling the fiduciary to benefit except in express terms.14 And in the context of powers of attorney, this has been a

standard judicial approach.15 Moreover, the relationship of principal and attorney is not created by the statutory provision; it is arguably impacted upon by the requirements of the statute. 7.4 If Hammerschlag J is correct, the strict construction so redolent at general law has little or no application to a power of attorney created pursuant to the statutory form. And the similarity in statutory wording across most other jurisdictions, coupled with statutorily prescribed forms, would mean that at least in these Australian jurisdictions much of the restrictive interpretation of powers of attorney catalogued in Chapter 6 is inapplicable. Yet it is difficult to conceive that his Honour intended to consign to merely historical significance notions of strict construction merely because a power of attorney adopted a statutory form. The dichotomy in views appears to more accurately target whether an authority to do any act ‘whereby a benefit is conferred on [the] attorney’ (or the like) should be circumscribed in its interpretation by the fiduciary backdrop within which it operates. Austin J in Spina was unable to divorce this conferral of authority from its fiduciary context, whereas Hammerschlag J had no such compunction. Subsequent New South Wales case law reveals a continuing division of opinion. Like Austin J in Spina, White J in Perochinsky v Kirschner16 saw the statutory phrase ‘on behalf of’ as connoting the (fiduciary) sense of acting in the interest of or for the benefit of another, and thus casting a shadow over the breadth of the aforesaid benefit clause. That clause would have effect, but not unqualified effect, his Honour explaining the point as follows:17 It is not every benefit conferred on an attorney that amounts to the giving of a present. It is possible for an attorney to act to benefit his or her principal, although at the same time the attorney obtains a benefit for himself or herself. An example would be taking up an investment opportunity where neither the attorney’s own funds, nor those of the

[page 180] principal would be sufficient to take up the opportunity, but their combined funds would be sufficient. In the absence of [the benefit clause], the attorney would be required to account to his or her principal for a gain derived by the attorney from use of his fiduciary position … If the investment showed a loss, in the absence of [the benefit clause] of the power of attorney, the attorney would be required to account to his principal for the loss …

White J added that were the power construed so as to authorise the attorney to act for his or her own benefit, even if contrary to the interests of the principal, it would be difficult to conceive how the attorney could ever abuse his or her authority.18 Yet only a short time later, in Vitek v Estate Homes Pty Ltd,19 Rein J enforced the approach and reasoning of Hammerschlag J in Spina. His Honour focused on the statutory words authorising the attorney to do ‘anything [the principal] may lawfully authorise an attorney to do’, seeing these as ‘words of very wide import’.20 The statutory phrase ‘on behalf of’ was, according to Rein J, directed at signifying the representative character of the acts the attorney is to perform instead of being restrictive in nature.21 His Honour was also concerned to obviate the need for a third party to inquire as to whether the principal’s wishes are being effectuated. Like Hammerschlag J in Spina, Rein J rejected Austin J’s reading down of the term ‘benefit’ in the benefit clause — as limited to the bestowal of a benefit on the attorney in conjunction with some benefit to the principal as well — because ‘a benefit solely to the grantee is, as a matter of construction, a transaction which yields a benefit to the grantee’.22 While Rein J’s ultimate decision was affirmed, the judgments on appeal centred on the appearance of authority to third parties with whom the attorney deals (an issue of ostensible authority) rather than the validity of the attorney’s acts in an intra-agency context (an issue of actual authority). Emmett JA accepted that ‘[p]rima facie, a power, however widely its general words may be expressed, should not be construed as authorising the attorney to deal with the property or his principal for the attorney’s own benefit’,23 but saw the relevant statutory provision as ‘designed to ensure that a third party can deal with an attorney under a power with confidence, irrespective of whether the transaction is for the benefit of the principal or guarantor’.24 Leeming JA likewise focused on the appearance of authority as a prelude to endorsing the view of Rein J that the words ‘on behalf of’ are not words of restriction, and that an instrument may as a matter of law empower an attorney to do ‘anything’ the principal may lawfully authorise an attorney to do, ‘even if there is a benefit to the attorney and no benefit to the principal’.25 But this conclusion does not necessarily translate to the intra-agency scenario.

[page 181] 7.5 That both Rein J in an earlier case26 and Hammerschlag J in Spina27 were nonetheless willing to countenance that an attorney could abuse his or her fiduciary position by benefiting himself or herself, under a benefit clause, contrary to the interests of the principal suggests that there remains scope, even under their view, for fiduciary law to constrain the literal meaning of words used in a power of attorney. If so, the matter rests less on questions of construction than on judicial sensitivities (and attendant matters of degree) to applying the fiduciary proscriptions. In any case, to the extent that the approach of Hammerschlag J in Spina and Rein J in Vitek is driven by the terms of the relevant statutory provision, it may be queried because statute is not, as a general principle, presumed to alter the general law. Where the terms of a statute in effect replicate the position at general law, moreover, the presumption is fortified. As noted above,28 this appears so where the statutory expression of an attorney’s authority is concerned. Even in the face of statutory standard forms, therefore, it is not irregular to conclude that statutory provisions that do not expressly, or by necessary implication, alter the general law, operate against a backdrop of the principles espoused at general law. The strict construction of powers of attorney, so well established at law, would therefore not be a casualty of statutory intervention that is not expressed in terms aimed at ousting it.29 This derives support from the fact that the powers of attorney legislation in no jurisdiction purports to pronounce a code for the relevant law.

For enduring powers 7.6 Greater divergence between jurisdictions appears as to the authority conferred through enduring powers of attorney. The Australian Capital Territory statute states that an enduring power can authorise an attorney to do anything in relation to ‘property matters’,30 ‘personal care matters’31 or ‘health care matters’32 that the principal could lawfully do by an attorney if the principal had decision-making capacity for the matter when the power to do the thing is exercised.33 The Queensland Act makes similar provision as regards ‘financial matters’34 or ‘personal matters’,35 and adds that to the

extent the power does not state otherwise, an attorney is taken to have ‘the maximum [page 182] power that could be given to the attorney’ by the power.36 The latter, it has been said, ‘does no more than ensure that an enduring power of attorney will be as wide as [the legislation] would allow in the absence of terms within the power restricting its scope’.37 In Victoria, upon the commencement of the Powers of Attorney Act 2014, enduring powers can extend beyond financial matters, to encompass ‘personal matters’, which can include certain health matters.38 In the Northern Territory, as from 17 March 2014 there exists scope to create advance personal plans, which supersede enduring powers of attorney and can, unlike those powers, encompass also the making of ‘advance care statements’ by a person, and ‘advance consent decisions’ on behalf of a person.39 The latter target decisions about future health care action for the person; the former set out the person’s views, wishes and beliefs as the basis on which he or she wishes anyone to act in making decisions for him or her.40 7.7 The New South Wales legislation, as noted earlier,41 brings the concept of an ‘enduring power of attorney’ within that of a ‘prescribed power of attorney’.42 The latter can authorise an attorney, subject to any conditions or restrictions specified in the power, to do on behalf of the principal any act that the principal can lawfully do by an attorney.43 Similar provision is made vis-à-vis enduring powers in the Tasmanian and Victorian legislation.44 In these jurisdictions, as well as the remaining ones (in the Northern Territory, before 17 March 2014), the legislation does not, however, envisage the use of a power of attorney to authorise an attorney to make health or lifestyle decisions on a principal’s behalf.45 Authority to make these decisions is the province of guardianship or its equivalent.46 7.8 What the legislation in each jurisdiction makes clear is that what marks a power of attorney as an ‘enduring power’ (in the Northern Territory, an ‘advance personal plan’) is that the principal’s mental incapacity does not prejudice the attorney’s authority under it.47

[page 183]

Specific provisions relating to authority Execution of documents by attorney Authority to execute instruments in the attorney’s own name 7.9 Except in the Australian Capital Territory and South Australia, statute empowers an attorney, in exercising the power of attorney, to execute an assurance or instrument with the attorney’s own signature and, if sealing is required, with the attorney’s own seal, or do any other thing in the attorney’s own name.48 Any such assurance or instrument is as effectual in law as if it had been executed or done by the attorney with the signature and seal or, as the case may be, in the name, of the principal.49 7.10 The general law continues to apply in the Australian Capital Territory. At general law, it has been said, an attorney should express himself or herself to act in the name of the principal and to sign, if signing is required, not the attorney’s name but the principal’s name.50 Though this aligns with the basic agency law principle that ‘if a man signs a written contract, he is to be considered as the contracting party, unless it clearly appears that he executes it as agent only’,51 it should be noted that agency law allows an agent to sign in his or her own name, provided it is evident that he or she is signing on the principal’s behalf. But it should not be assumed that the general law pertaining to powers of attorney was quite so unyielding in placing form over substance. At least if a recent Queensland Court of Appeal decision is any guide, any such rule should not serve to invalidate signature by the attorney where it is clear that the attorney is executing the document in the name of the principal and is authorised to bind the principal.52 [page 184]

7.11 The legislation, it is said, is ‘remedial in nature’.53 It supplies ‘an alternative procedure for the attorney to act on behalf of the principal’,54 that is, an alternative to the general law. The relevant provisions are facilitative in nature, and so hardly purport to codify the law relating to the execution of instruments by attorneys. It follows that non-compliance with the statutory schema does not necessarily invalidate the signature of an attorney otherwise valid at law.55 Yet in that the Northern Territory, Queensland and Victorian statutes nonetheless require that any such instrument be executed in a way showing that the attorney executes it as attorney for the principal56 may indicate that in those jurisdictions whatever difference remains between the general law and statute is more confined.57 Although the suggestion has been made that the wording of the legislation in the other jurisdictions can be construed to attract a similar conclusion,58 its apparently unqualified terms lie against this. 7.12 The South Australian legislation follows its own schema. It states that where an agent executes a deed in his or her own name, but it is apparent from the deed as executed that the agent was acting on behalf of a principal, ‘the agent is not, by reason only of the manner in which he executed the deed, personally liable upon the deed, and the deed has effect as if the agent had executed it in the name of his principal’.59 This provision is ostensibly directed at altering the general law, under which an agent who executes a deed in his or her own name is personally liable upon it, whether or not he or she has disclosed the name or existence of the principal.60

Execution of instruments by or on behalf of corporations 7.13 The property law legislation in each jurisdiction except South Australia and Tasmania provides that a person who is authorised under a power of attorney to convey an interest in property in the name or on behalf of a corporation may as attorney execute the conveyance by signing his or her name in such way as to show that the person does so as attorney of the corporation in the presence of at least one witness (and in the case of a deed by executing the conveyance in line with the requirements

[page 185] of signature and attestation applicable to deeds).61 This takes effect and is valid in like manner as if the corporation had executed the conveyance.62 The legislation adds that where a corporation aggregate is authorised under a power of attorney to convey any property in the name or on behalf of any other person, a company officer appointed for that purpose by the governing body of the corporation may execute the assurance in the name of such other person, in which case the instrument is deemed, in favour of a purchaser in good faith, to have been executed by a duly authorised officer.63

Administration under a power of attorney 7.14 The probate legislation in most jurisdictions empowers the court to grant administration of a deceased estate, on terms it considers appropriate, to an attorney of a person (the principal) who is entitled to a grant of probate or administration in circumstances where the principal is out of the jurisdiction but the attorney is not.64 Equivalent provision is made via the court rules in Queensland.65 In the territories and New South Wales the legislation adds that the grant is to continue in force despite the principal’s death, unless its terms provide otherwise.66 The power so granted by statute arguably reflects no more than the courts’ jurisdiction at general law.67

Personal benefit to attorney or third parties General statutory proscriptions 7.15 As discussed in Chapter 6, the fiduciary backdrop against which powers of attorney function, coupled with the traditional strict construction applied to them, has led courts to find against an authority to personally benefit the attorney (or an associate or family member of the attorney), via a power of attorney, except where the terms of the power say so expressly.68 The powers of attorney statutes in the [page 186]

Australian Capital Territory, New South Wales and Tasmania replicate the general law,69 presumably for the avoidance of any doubt.70 Each is phrased in substantially identical terms, and the New South Wales provision reads as follows: A prescribed power of attorney does not authorise an attorney to execute an assurance or other document, or to do any other act, as a result of which a benefit would be conferred on the attorney unless the instrument creating the power expressly authorises the conferral of the benefit.

The phrase ‘as a result of which’ brings with it a causal element, interpreted as requiring ‘that there be, or would be, a direct link between the exercise of power and the benefit conferred or, in other words, that the relevant act of the attorney is, or would be, the effective cause of the benefit being conferred on him’.71 Had the legislature intended that the enquiry must include consideration as to whether a benefit would be conferred as an indirect result of the attorney’s act, it is reasoned, it would have chosen unambiguous language to effect such an intention.72 7.16 The Advance Personal Planning Act 2013 (NT) envisages the exercise of authority under an advance personal plan — which encompasses what was before 17 March 2014 an enduring power73 — in a way that may benefit a person other than the principal if:74 the benefit is of a kind that the principal provided, or might reasonably be expected to provide, when he or she had decision-making capacity for the matter; and providing the benefit would be reasonable in the circumstances, and not significantly adversely affect the principal’s best interests. It may be appropriate, the Act suggests by way of note, for a decisionmaker (equivalent to an attorney) to make provision out of the principal’s money for educational expenses for the latter’s children, even though that is not directly for the principal’s benefit and may mean that the money is unavailable to pay for the principal’s own expenses. In Victoria, upon the commencement of the Powers of Attorney Act 2014, explicit provision is made to proscribe an attorney for financial matters under an enduring power to engage in ‘conflicts transactions’, namely those in which there is or may be a conflict between the duty and interests of the attorney (or those of a relative,

[page 187] business associate of close friend of the attorney).75 The Acts envisages, however, that an attorney may enter into a conflict transaction if, before the time of the transaction, the principal authorises entry into that transaction, that kind of transaction or conflict transactions generally.76

Benefit allowed via use of prescribed expressions 7.17 Without limiting the foregoing, the New South Wales legislation adds that a prescribed power of attorney that includes the ‘prescribed expression’ authorises the conferral on the attorney of the kinds of benefits that are specified.77 The ‘prescribed expression’ is:78 I authorise my attorney to confer benefits on the attorney to meet the attorney’s reasonable living and medical expenses as provided by section 12(2) of the Powers of Attorney Act 2003.

However, the prescribed expression authorises the conferral of a benefit on the attorney only if the benefit meets any expenses (to be) incurred for housing, food, education, transportation, medical care and medication, and does not exceed ‘what is reasonable having regard to all the circumstances and, in particular, the principal’s financial circumstances and the size of the principal’s estate’.79 Because the statutory provision for the ‘prescribed expression’ is not intended to limit the main provision, which envisages that a principal can expressly authorise the conferral of a benefit on the attorney, it leaves open the prospect for the terms of the power of attorney to make express provision uninhibited by the limitations imposed by invoking the ‘prescribed expression’. But where there is no express conferral of this broader authority, and the ‘prescribed expression’ is not used, the legislation dictates that the attorney is not authorised to benefit himself or herself under the power of attorney.80 7.18 The New South Wales legislation contains an equivalent provision, again aimed at reflecting the general law,81 vis-à-vis the authority to confer benefits on third parties, which reads:82 A prescribed power of attorney does not authorise an attorney to execute an assurance or other

document, or to do any other act, as a result of which a benefit would be conferred on a third party unless the instrument creating the power expressly authorises the conferral of the benefit.

[page 188] Again without limiting the above, provision is made for inclusion of a ‘prescribed expression’ that authorises an attorney to confer on a third party the kinds of benefits that are specified.83 The ‘prescribed expression’ is as follows:84 I authorise my attorney to confer benefits on [insert name(s) and address(es) of each third party] to meet their reasonable living and medical expenses as provided by section 13(2) of the Powers of Attorney Act 2003.

The legislation limits the scope of authority pursuant to the ‘prescribed expression’ in the same way as it does relating to authority to confer benefits on an attorney.85 And the same remarks as to the interpretation of this statutory provision apply as to interpreting the latter authority.

Scope for gift-making 7.19 As discussed in Chapter 6, essentially the same reasons that have inclined courts to require that any authority to benefit the attorney be expressly conferred by a power of attorney have justified the same attitude vis-à-vis authority to gift the principal’s property.86 That the issue is of particular significance in the context of enduring powers of attorney — the concern is that a principal who has lost mental capacity lacks effective ability to monitor an attorney’s exercise of authority — has led respective parliaments to address the issue via statute (in New South Wales, in a manner not limited to enduring powers). 7.20 The Australian Capital Territory and New South Wales powers of attorney legislation, in line with the general law, states the basic rule in terms that an enduring power of attorney (in New South Wales, a ‘prescribed power of attorney’,87 which includes non-enduring powers) does not authorise the attorney to make a gift of all or any of the principal’s property to anyone else unless the power expressly authorises the making of the gift.88 But, in restricting what would be the position at general law, it proceeds to limit the

scope for gift-giving authority where the power contains a ‘general authorisation’ to make gifts (in New South Wales, if the ‘prescribed expression’89 is used), which it decrees authorises only:90 [page 189] a gift made to a relative91 or close friend92 of the principal for a celebration93 or special event;94 or a gift that is a donation of a kind that the principal made when he or she had capacity, or that the principal might reasonably be expected to make95 if he or she had the capacity.96 Even so, a general authorisation does not authorise making a gift if its value exceeds what is reasonable in the circumstances, which include the principal’s financial circumstances and the size of the principal’s estate.97 There has been no attempt in these jurisdictions, or indeed other Australian jurisdictions discussed below,98 to provide guidelines as to quantum in this regard,99 but the ‘reasonableness’ threshold, it has been suggested, is likely to be low.100 That these restrictions are limited to ‘general authorisations to make gifts’ (in the Australian Capital Territory) and ‘prescribed expressions’ (in New South Wales) suggests that a specific gift-giving authorisation falls outside their purview. It thus remains open in these jurisdictions for a principal to authorise the making of particular gifts, and thereby circumvent the statutory limits on gift-giving. Specific gift-giving power will receive a strict interpretation in line with the general law, though, and so is unlikely to be unlimited in its scope or application. [page 190] 7.21 The Queensland, Tasmanian and forthcoming Victorian statutes state that, unless a contrary intention is expressed in the power of attorney, an attorney may give away the principal’s property only in line with the restrictions equivalent to those imposed by statute in the Australian Capital

Territory and New South Wales.101 It follows that, in these jurisdictions, there is potential for gift-making, within the set parameters, even absent a specific provision authorising an attorney to engage in this act. The same applies vis-à-vis decision-makers with financial management power under advance personal plans in the Northern Territory,102 except as regards gifts to the decision maker, which must be specifically authorised.103 Equivalent provision is made in the relevant English legislation.104 In that context it has been said that the first and paramount consideration must remain whether the gift is in the principal’s best interests. This may be informed by matters including the extent to which the principal was formerly in the habit of making gifts of a particular size or nature, the principal’s anticipated life expectancy, the possibility that the principal may require residential or nursing care and its projected cost, and the extent to which any gift(s) may interfere with the devolution of the principal’s estate under his or her will or intestacy.105 7.22 The Australian Capital Territory, Queensland, Tasmanian and forthcoming Victorian statutes add, presumably so as to avoid any doubt, that the foregoing does not prevent the attorney, or a charity with which the attorney has a connection, from receiving a gift under the general authorisation.106 In Tasmania the Guardianship and Administration Board may on the application of an attorney or of its own motion, and after a hearing,107 authorise the attorney to gift any property of the principal to any person approved by the Board and for any purpose approved by the Board.108

Limits on payments pursuant to enduring powers of attorney 7.23 Apart from statutory qualification or restriction, there is nothing to prevent a principal, via the terms of an enduring power of attorney, to make provision for the attorney to make payments for living expenses or maintenance of specified persons. Indeed, in some Canadian provinces statute has gone further, to empower an attorney under an enduring power to exercise authority for the maintenance, education, benefit and advancement of the principal’s spouse and dependent children, subject to any conditions, restrictions or additions in the power itself.109 This has now seen

[page 191] statutory translation in the Northern Territory110 (under the guise of advance personal plans)111 and Tasmania.112 7.24 In the Australian Capital Territory, Queensland and (soon in) Victoria the powers of attorney legislation states that although an enduring power may provide from the principal’s estate for the needs of a dependant113 of the principal, unless there is a contrary intention expressed in the power, what is provided must not exceed what is reasonable considering all the circumstances and, in particular, the principal’s financial circumstances.114 In the Australian Capital Territory the legislation adds that an enduring power of attorney that expressly authorises the payment of reasonable living expenses (however described) for a named person, unless it expressly provides otherwise, only authorises the payment of reasonable costs of housing, food, education, transportation, and medical care and attention, in relation to the named person.115 The principal’s financial circumstances and the size of his or her estate are relevant, inter alia, in determining what are reasonable costs for this purpose.116 It may be queried, in any case, whether an attorney would, upon a strict construction of the power and in line with duties owed to the principal, and independent of statutory provisions, be justified in making ‘unreasonable’ disbursements from the principal’s estate for the benefit of dependants or other persons.

1.

Powers of Attorney Act 2006 (ACT) s 13(1) (‘power of attorney’); Powers of Attorney Act 2003 (NSW) s 9(1) (via what is termed a ‘prescribed power of attorney’: see 1.41, 1.42) (formerly Conveyancing Act 1919 (NSW) s 163B(1)); Powers of Attorney Act 1998 (Qld) s 8(a) (‘general power of attorney’); Powers of Attorney and Agency Act 1984 (SA) s 5(3) (‘general power of attorney’); Powers of Attorney Act 2000 (Tas) s 20 (‘power of attorney’); Instruments Act 1958 (Vic) s 107(1) (‘general power of attorney’); Powers of Attorney Act 2014 (Vic) s 7(1) (yet to commence).

2.

See 5.20.

3.

Sydney Concrete & Contracting Pty Ltd v BNP Paribas Equities (Australia) Ltd [2004] NSWSC 530; BC200404323.

4.

See 1.39, 1.40.

5.

Powers of Attorney Act 2003 (NSW) s 9(2) (‘has effect subject to compliance with any conditions

or limitations specified in the instrument creating the power’) (formerly Conveyancing Act 1919 (NSW) s 163B(3)) (see Orr v Slender (2005) 64 NSWLR 671; [2005] NSWSC 1175; BC200510063 at [27] per Nicholas J; Power v Power [2011] NSWSC 288; BC201102520 at [18] per Gzell J); Powers of Attorney Act 1998 (Qld) s 8(b) (‘provide terms or information about exercising the power’); Powers of Attorney and Agency Act 1984 (SA) s 5(2) (‘The authority … may be expressed to be subject to specified conditions, limitations or exclusions’); Powers of Attorney Act 2000 (Tas) ss 20 (‘the exercise of the power is subject to any conditions or limitations expressed in the power of attorney’), 21 (‘The authority conferred by the power of attorney, according to the tenor of the instrument by which it is conferred and, in the case of an enduring power of attorney, … may be unlimited or may be limited to specific acts and any such limitations may relate to the mode in which, or the time and place at which, the authority may be exercised’). 6.

See 1.19–1.23.

7.

See 1.41, 1.42.

8.

(2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [129], [135] (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on power of attorney issue).

9.

On the restrictions imposed by the law in this regard see 5.20–5.29.

10. (2008) NSW ConvR ¶56–218; [2008] NSWSC 326; BC200802476. 11. Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [149] (emphasis in original). 12. His Honour, in so doing, referred to the underlying policy of the relevant legislation (see Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [156]– [169]), including by reference to antecedents in the United Kingdom, as evidence of a statutory intention to ‘avoid argument about, or the necessity for inquiry into, the agent’s authority’: at [167]. 13. Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [142]. 14. For example, trustees cannot ordinarily secure remuneration (except pursuant to court application) unless pursuant to provision in the trust instrument: see Dal Pont, Equity & Trusts, [22.75]– [22.90]. 15. See 6.50–6.58. 16. (2013) 16 BPR 31,481; [2013] NSWSC 400; BC201302003 at [68]–[75]. 17. Perochinsky v Kirschner (2013) 16 BPR 31,481; [2013] NSWSC 400; BC201302003 at [76]. 18. Perochinsky v Kirschner (2013) 16 BPR 31,481; [2013] NSWSC 400; BC201302003 at [89]. On the facts, however, White J found sufficient admissible evidence to justify the conclusion that the principals, in granting a power of attorney (including the benefit clause) to the defendant, wished the attorney to transfer certain of their company shares to the defendant pursuant to the power. In this sense, his Honour reasoned, even though the transfer of the shares resulted in a benefit solely to the defendant, she was ‘acting in the interests of [the principals] and acting on their behalf, by effectuating their intention’: at [93]. The position would have been different, though, had the principals not said that they wanted to give the shares to the defendant: at [93]. 19. [2013] NSWSC 1764; BC201315248. 20. Vitek v Estate Homes Pty Ltd [2013] NSWSC 1764; BC201315248 at [33].

21. Vitek v Estate Homes Pty Ltd [2013] NSWSC 1764; BC201315248 at [33], endorsing the same point made by Hammerschlag J in Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [152]. 22. Vitek v Estate Homes Pty Ltd [2013] NSWSC 1764; BC201315248 at [33]. 23. Taheri v Vitek [2014] NSWCA 209; BC201405163 at [29]. 24. Taheri v Vitek [2014] NSWCA 209; BC201405163 at [34]. 25. Taheri v Vitek [2014] NSWCA 209; BC201405163 at [130]. 26. Perpetual Trustee Co Ltd v Gibson (2013) 17 BPR 31,141; [2013] NSWSC 276; BC101301492 at [30], [31]. 27. Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [155]. 28. See 7.2. 29. This was the view of Austin J in Spina v Conran Associates Pty Ltd (2008) NSW ConvR ¶56–218; [2008] NSWSC 326; BC200802476. 30. ‘Property matter’ is defined in Powers of Attorney Act 2006 (ACT) s 10: see 1.38. 31. ‘Personal care matter’ is defined in Powers of Attorney Act 2006 (ACT) s 11: see 1.38. 32. ‘Health care matter’ is defined in Powers of Attorney Act 2006 (ACT) s 12: see 1.38. 33. Powers of Attorney Act 2006 (ACT) s 13(2). 34. ‘Financial matters’ are listed in Powers of Attorney Act 1998 (Qld) Sch 2 Pt 1. They align with the concept of ‘property matters’ under Powers of Attorney Act 2006 (ACT) s 10: see 1.38. 35. Powers of Attorney Act 1998 (Qld) s 32(1). ‘Personal matters’ are listed in Powers of Attorney Act 1998 (Qld) Sch 2 Pt 2. They align with the concept of ‘personal care matters’ under Powers of Attorney Act 2006 (ACT) s 11: see 1.38. The Queensland powers of attorney legislation also makes provision for advance health directives (ss 35–40) (see 1.48) and for statutory health attorneys (ss 62, 63). In Re Wild [2003] 1 Qd R 459; [2002] QSC 200; BC200203922 White J held that s 32, when read in tandem with s 56 of the Trusts Act 1973 (Qld) (which provides for the delegation by a trustee via a power of attorney: see 2.14), entitled the attorney under an enduring power to make an application for the grant of probate on behalf of a mentally incapacitated testatrix, concluding that the Act ‘is comprehensive in its description of the powers of an attorney under an enduring document and those powers are apt to include an application for a grant of probate’: at [23]. 36. Powers of Attorney Act 1998 (Qld) s 77. 37. Orix Australia Corporation Ltd v McCormick (2005) 145 FCR 244; [2005] FCA 1032; BC200505464 at [76] per Graham J. 38. Powers of Attorney Act 2014 (Vic) s 22(2) (see the definition of ‘personal matter’ in s 3(1)): see 1.55. 39. As to advance personal plans see 1.44. 40. Advance Personal Planning Act 2013 (NT) s 8(1). 41. See 7.3. 42. See 1.41, 1.42. 43. Powers of Attorney Act 2003 (NSW) s 9(1).

44. Powers of Attorney Act 2000 (Tas) s 31(1), 31(2) (note also s 31(2A), inserted by the Powers of Attorney Amendment Act 2013 (Tas), which contains an inclusive list of acts that the attorney may do on behalf of a principal under an enduring power of attorney, subject to any conditions or restrictions specified in the relevant instrument); Instruments Act 1958 (Vic) s 115(1); Powers of Attorney Act 2014 (Vic) s 22(1) (yet to commence). 45. The point is made explicitly in Powers of Attorney Act 2000 (Tas) s 31(2B). 46. See 2.30–2.32. 47. See 1.25–1.27, 11.28, 11.29. 48. Powers of Attorney Act 2003 (NSW) s 43(1) (previously Conveyancing Act 1919 (NSW) s 159(1)); Powers of Attorney Act 1980 (NT) s 10(2) (‘unless the contrary intention appears in the instrument creating the power’); Advance Personal Planning Act 2013 (NT) s 20(1); Powers of Attorney Act 1998 (Qld) s 69(1) (‘[i]f necessary or convenient’) (which by s 69(4) is expressed to apply subject to the Property Law Act 1974 (Qld) s 46 (dealing with the execution of documents by corporations: see 7.13); Powers of Attorney Act 2000 (Tas) s 23(1); Instruments Act 1958 (Vic) ss 108(1) (non-enduring powers), 125E(1) (enduring powers); Powers of Attorney Act 2014 (Vic) ss 12(1) (non-enduring powers), 27 (enduring powers) (yet to commence) (which in Victoria present as an alternative to the provisions on execution of instruments by or on behalf of corporations found in the Property Law Act 1958 (Vic) s 74(3), 74(4): see 7.13); Property Law Act 1969 (WA) s 84(1). In Lundie v Rowena Nominees Pty Ltd (Receiver & Manager Appointed) (in liq) (2006) 32 WAR 404; [2006] WASCA 106; BC200604321 at [49] Steytler P remarked that the relevant provision merely addresses the case in which there is an attorney of a genuine power of attorney; if there is no power of attorney, it has no application, regardless of whether or not the signatory to the agreement claims to have executed it as agent, pursuant to a power of attorney. 49. Powers of Attorney Act 2003 (NSW) s 43(2) (previously Conveyancing Act 1919 (NSW) s 159(2)); Powers of Attorney Act 1980 (NT) s 10(2); Powers of Attorney Act 1998 (Qld) s 69(3); Powers of Attorney Act 2000 (Tas) s 23(2); Instruments Act 1958 (Vic) ss 108(1) (non-enduring powers), 125E(3) (enduring powers); Powers of Attorney Act 2014 (Vic) ss 12(3) (non-enduring powers), 27 (enduring powers) (yet to commence); Property Law Act 1969 (WA) s 84(2). 50. Lawrie v Lees (1880) 14 Ch D 249 at 256 per James LJ (‘where an attorney describes himself as an attorney, and professes to grant as an attorney and executes as an attorney, but does not execute in the name of and on behalf of his principal, that is a bad execution’); Clauss v Pir [1988] Ch 267 at 272 per Francis Ferris QC. See also Alcock, pp 132–3. In the event of attorneys appointed jointly, each attorney should sign; in the event of attorneys appointed jointly and severally, one or more of them can sign. As to joint, as opposed to joint and several, appointments of attorneys see 4.51. 51. Cooke v Wilson (1856) 1 CBNS 153 at 164; 140 ER 65 at 69 per Crowder J. On this principle generally see Dal Pont, Agency, [23.3]–[23.41]. 52. Nielsen v Capital Finance Australia Ltd [2014] QCA 139; BC201404392 at [24] per Margaret McMurdo P. See also at [41] per Muir JA, at [85] per Douglas J. 53. Nielsen v Capital Finance Australia Ltd [2014] QCA 139; BC201404392 at [75] per Muir JA. 54. Clauss v Pir [1988] Ch 267 at 272 per Francis Ferris QC. 55. Nielsen v Capital Finance Australia Ltd [2014] QCA 139; BC201404392 at [24] per Margaret McMurdo P, at [81] per Muir JA, at [87] per Douglas J. 56. Powers of Attorney Act 1980 (NT) s 10(3)(a); Powers of Attorney Act 1998 (Qld) s 69(2); Instruments Act 1958 (Vic) ss 108(2) (non-enduring powers), 125E(2) (enduring powers); Powers of Attorney Act 2014 (Vic) ss 12(2) (non-enduring powers), 27 (enduring powers) (yet to

commence). In Au Wai Ming v Kam Tze Ming Alfred [2010] 1 HKLRD 198; [2009] HKCA 241 the court rejected the submission that the equivalent Hong Kong provision (Powers of Attorney Ordinance (Cap 31) (HK) s 6(1)) enabled an attorney to sign an instrument with or without reference to this having been performed as attorney of the donor, remarking that as the provision was designed simply to provide an alternative way of execution, it did not enable an attorney to execute an instrument qua attorney but without referring to that capacity: at [23]–[26] per Yuen JA, with whom Stone J concurred. 57. Cf Nielsen v Capital Finance Australia Ltd [2014] QCA 139; BC201404392 at [26] per Margaret McMurdo P, at [79]–[81] per Muir JA, at [87] per Douglas J. 58. Collier and Lindsay, p 66 (who point to the phrase in the New South Wales legislation that the attorney act ‘in the exercise of the power’, and in the (former) Australian Capital Territory, Tasmanian and Western Australian legislation that the attorney must act ‘by the authority of the donor’). 59. Powers of Attorney and Agency Act 1984 (SA) s 13(1). 60. Appleton v Binks (1804) 5 East 148; 102 ER 1025; Chesterfield and Midland Silkstone Colliery Co (Ltd) v Hawkins (1865) 3 H & C 677 at 691–2; 159 ER 698 at 703 per Martin B; Re International Contract Co (Pickering’s Claim) (1871) 6 Ch App 525. 61. See Civil Law (Property) Act 2006 (ACT) s 219; Conveyancing Act 1919 (NSW) s 38; Law of Property Act 2000 (NT) s 47; Property Law Act 1974 (Qld) s 45; Property Law Act 1958 (Vic) s 74(3) (‘by affixing his own seal’). The Western Australian legislation makes no equivalent provision relating to deeds in this context. 62. Civil Law (Property) Act 2006 (ACT) s 227(4); Conveyancing Act 1919 (NSW) s 51A(3); Law of Property Act 2000 (NT) s 48(3); Property Law Act 1974 (Qld) s 46(3); Property Law Act 1958 (Vic) s 74(3); Property Law Act 1969 (WA) s 10(4). 63. Civil Law (Property) Act 2006 (ACT) s 227(4), 227(5); Conveyancing Act 1919 (NSW) s 51A(4); Law of Property Act 2000 (NT) s 48(4); Property Law Act 1974 (Qld) s 46(4); Property Law Act 1958 (Vic) s 74(4); Property Law Act 1969 (WA) s 10(5). 64. Administration and Probate Act 1929 (ACT) s 22(1); Probate and Administration Act 1898 (NSW) s 72(1); Administration and Probate Act 1969 (NT) s 31(1); Administration and Probate Act 1919 (SA) s 34 (see also Powers of Attorney and Agency Act 1984 (SA) s 12(3)); Administration Act 1903 (WA) s 34. Cf Administration and Probate Act 1935 (Tas) s 17 (which follows a different schema albeit one directed to the same end); Administration and Probate Act 1958 (Vic) s 86 (which states that a person duly authorised by power of attorney who has obtained the seal of the court to any grant or order of probate or letters of administration, and has satisfied or provided for the debts and claims of all persons resident in Victoria of whose debts or claims he or she has had notice, may pay over or transfer to or as directed by the executor or administrator of the estate in the country in which the deceased was domiciled at the date of his death, or to or as directed by the donor of the power of attorney, the balance of the estate without seeing to the application thereof, and without incurring any liability in regard to such payment or transfer, and must duly account to such executor or administrator or donor (as the case may require) for his or her administration). 65. Uniform Civil Procedure Rules 1999 (Qld) r 611. 66. Administration and Probate Act 1929 (ACT) s 22(2); Probate and Administration Act 1898 (NSW) s 72(2); Administration and Probate Act 1969 (NT) s 31(2). 67. See Goods of Elderton (1832) 4 Hagg Ecc 210; 162 ER 1423; Goods of Barker [1891] P 251. 68. See 6.50–6.58.

69. Despot v Registrar-General (NSW) [2013] NSWCA 313; BC201313208 at [48] per Meagher JA, with whom Ward JA and Bergin CJ in Eq concurred; Dimitrovski v Australian Executor Trustees Ltd [2014] NSWCA 68; BC201401980 at [16] per Gleeson JA, at [36], [68] per Emmett JA. 70. Powers of Attorney Act 2006 (ACT) s 34; Powers of Attorney Act 2003 (NSW) s 12(1) (the accompanying note to which explicitly recognises that this subsection restates a rule of the general law, so that ‘whether the conferral of a benefit on an attorney is expressly authorised by a prescribed power of attorney is to be determined by reference to the general principles and rules of the common law and equity concerning the interpretation of powers of attorney’) (cf the former equivalent in Conveyancing Act 1919 (NSW) s 163B(2)(b)); Powers of Attorney Act 2000 (Tas) s 32AB(1). 71. Orr v Slender (2005) 64 NSWLR 671; [2005] NSWSC 1175; BC200510063 at [29] per Nicholas J (who added (at [31]) that ‘the enquiry as to extent of authority required … is limited to a consideration whether the attorney’s act was, or would be, as a matter of practical reality and commonsense, a direct cause of a benefit to him’). The phraseology adopted by the equivalent Australian Capital Territory legislation, though different (‘that would result in’), is sufficiently similar in substance for the same approach to be adopted. 72. Orr v Slender (2005) 64 NSWLR 671; [2005] NSWSC 1175; BC200510063 at [31] per Nicholas J. 73. See 1.44. 74. Advance Personal Planning Act 2013 (NT) s 22(8). 75. Powers of Attorney Act 2014 (Vic) s 64(1). 76. Powers of Attorney Act 2014 (Vic) s 65(1). 77. Powers of Attorney Act 2003 (NSW) s 12(2). 78. Powers of Attorney Act 2003 (NSW) Sch 3 cl 2(1). 79. Powers of Attorney Act 2003 (NSW) Sch 3 cl 2(2). 80. See, for example, Siahos v J P Morgan Trust Australia Ltd [2009] NSWCA 20; BC200901305 at [22] per Macfarlan JA, with whom Giles and McColl JJA concurred (who ruled that an attorney who, allegedly pursuant to a power of attorney, authorised the respondent to direct a portion of loan moneys to a bank to enable him to complete a purchase of property, had acted outside his authority). 81. The accompanying note to Powers of Attorney Act 2003 (NSW) s 13(1) states that the subsection restates a rule of the general law, so that ‘whether the conferral of a benefit on a third party is expressly authorised by a prescribed power of attorney is to be determined by reference to the general principles and rules of the common law and equity concerning the interpretation of powers of attorney’. 82. Powers of Attorney Act 2003 (NSW) s 13(1). 83. Powers of Attorney Act 2003 (NSW) s 13(2). 84. Powers of Attorney Act 2003 (NSW) Sch 3 cl 3(1). 85. Powers of Attorney Act 2003 (NSW) Sch 3 cl 3(2). 86. See 6.50–6.58. 87. As to ‘prescribed powers of attorney’ see 1.41, 1.42. 88. Powers of Attorney Act 2006 (ACT) s 38; Powers of Attorney Act 2003 (NSW) s 11(1) (which, in the accompanying note, states that s 11(1) restates a rule of the general law, so that ‘whether a gift

of all or any of the property of a principal is expressly authorised by a prescribed power of attorney is to be determined by reference to the general principles and rules of the common law and equity concerning the interpretation of powers of attorney’). Equivalent provision is made in the United States via the Uniform Power of Attorney Act 2006 §201(a)(2). 89. The ‘prescribed expression’ is ‘I authorise my attorney to give reasonable gifts as provided by section 11(2) of the Powers of Attorney Act 2003’: Powers of Attorney Act 2003 (NSW) Sch 3 cl 1(1). 90. Powers of Attorney Act 2006 (ACT) s 39(1), 39(2); Powers of Attorney Act 2003 (NSW) s 11(2), Sch 3 cl 1(2). 91. In the Australian Capital Territory, ‘relative’, of a person (the related person), means: (a) a person related by blood, affinity or adoption to the related person; or (b) a domestic partner (defined in the Legislation Act 2001 (ACT) s 169): Powers of Attorney Act 2006 (ACT), Dictionary. ‘Affinity’ means affinity derived through marriage or any other domestic partnership. In New South Wales, ‘relative’ of a principal means: (a) a mother, father, wife, husband, daughter, son, step-daughter, step-son, sister, brother, half-sister, half-brother or grandchild of the principal; or (b) if the principal is a party to a registered relationship or interstate registered relationship, within the meaning of the Relationships Register Act 2010 (NSW), or a domestic relationship within the meaning of the Property (Relationships) Act 1984 (NSW), any person who is a relative, of the kind mentioned in paragraph (a), of either party to the relationship: Powers of Attorney Act 2003 (NSW) Sch 3 cl 1(3). 92. ‘Close friend’, of a person, means someone who has a close personal relationship with the principal and a personal interest in the principal’s welfare: Powers of Attorney Act 2006 (ACT), Dictionary; Powers of Attorney Act 2003 (NSW) Sch 3 cl 1(3). 93. For example, birthday, Easter, Hanukah. 94. For example, birth, marriage, graduation. 95. The words ‘might be expected to make’, it has been said, allow new gifting: Re GM [2013] EWHC 2966 (COP) at [64] per Judge Denzil Lush. 96. The phrase ‘if he or she had the capacity’ is supplied. It does not appear in the legislation but represents a logical reading of the relevant provision in its application to enduring powers of attorney: Re Heller [1999] 2 Qd R 579 at 584; BC9802682 per Fryberg J. 97. Powers of Attorney Act 2006 (ACT) s 39(3), 39(4); Powers of Attorney Act 2003 (NSW) Sch 3 cl 1(2). 98. Cf Powers of Attorney Act 2014 (Vic) s 67(3) (not yet commenced), which requires an attorney to keep a written record of any gift made to the attorney, a relative or close friend of the attorney or to an organisation with which the attorney has a connection, if its total value is $100 or more (or some other amount prescribed). 99. As, for instance, in British Columbia: Powers of Attorney Act 1996 (BC) s 20(1)(c); Power of Attorney Regulation 2011 (BC) (which combine to limit the total value of all gifts, loans and charitable gifts made by an attorney in a year to the lesser of ten percent of the principal’s taxable income for the previous year and $5,000). Cf NSLRC (DP), p 110 (proposing that, notwithstanding any authority in the power itself, an attorney should be proscribed from making a gift where it would compromise the estate’s ability to provide for the principal’s needs). 100. Re GM [2013] EWHC 2966 (COP) at [73] per Judge Denzil Lush (who, on the facts before him, disallowed extensive gifts to attorneys and their families because the gifts were not made in the principal’s best interests, as they are completely out of character with any gifts she made preceding

the onset of dementia, and there was no consultation with her before they were made and no attempt to permit and encourage her to participate in the decision-making process, or to ascertain her present wishes and feelings: at [94]). 101. Powers of Attorney Act 1998 (Qld) s 88(1); Powers of Attorney Act 2000 (Tas) s 31(3); Powers of Attorney Act 2014 (Vic) s 67(1) (yet to commence) (as per VPLRC p 202 (recommendation 58)). 102. Advance Personal Planning Act 2013 (NT) s 32(1), 32(2). As to advance personal plans see 1.44. 103. Advance Personal Planning Act 2013 (NT) s 32(4). 104. Mental Capacity Act 2005 (UK) s 12(2), 12(4). 105. Re GM [2013] EWHC 2966 (COP) at [67] per Judge Denzil Lush. 106. Powers of Attorney Act 2006 (ACT) s 39(5); Powers of Attorney Act 1998 (Qld) s 88(2); Powers of Attorney Act 2000 (Tas) s 31(4); Powers of Attorney Act 2014 (Vic) s 67(2) (not yet commenced). 107. The hearing must be in accordance with the Guardianship and Administration Act 1995 (Tas) Pt 10 Div 1. 108. Powers of Attorney Act 2000 (Tas) s 31(5). 109. See, for example, Powers of Attorney Act 2000 (Alta) s 7(b) (and see ALRI (DP), pp 76–7 for the background to this); Powers of Attorney Act 2001 (NWT) s 14; Powers of Attorney Act 2002 (Sask) s 16(1). See also Powers of Attorney Act 2006 (Ireland) s 6(4) (‘Subject to any conditions or restrictions contained in the instrument, an attorney under an enduring power, whether general or limited, may act under the power for the attorney’s benefit or that of other persons to the following extent but no further, that is to say, the attorney: (a) may so act in relation to himself or herself or in relation to any other person if the donor might be expected to provide for his or her or that person’s needs respectively; and (b) may do whatever the donor might be expected to do to meet those needs’). 110. Advance Personal Planning Act 2013 (NT) s 33. 111. As to advance personal plans see 1.44. 112. Powers of Attorney Act 2000 (Tas) s 31(2A)(r). 113. ‘Dependant’ is defined in the Queensland legislation to mean a person who is completely or mainly dependent on the principal: Powers of Attorney Act 1998 (Qld) Sch 3. It is not defined in the Australian Capital Territory or forthcoming Victorian legislation. 114. Powers of Attorney Act 2006 (ACT) s 41(1), 41(2); Powers of Attorney Act 1998 (Qld) s 89(1), 89(2); Powers of Attorney Act 2014 (Vic) s 68 (yet to commence). 115. Powers of Attorney Act 2006 (ACT) s 40(1), 40(2). 116. Powers of Attorney Act 2006 (ACT) s 40(3).

[page 192]

PART IV

Power Impacted This Part is directed to the effect, as between principal and attorney, and as between the principal or attorney and third parties, of the exercise of an attorney’s authority under a power of attorney. Chapter 8 targets the intraagency relationship, specifically the duties owed by attorneys to their principals (including all-important fiduciary duties), and the rights attorneys may have against their principals. Chapter 9 redirects the focus to the relationship between the main actors in a power of attorney — the principal and the attorney — and persons with whom the attorney deals under the power. It is chiefly in relation to contractual entitlement and responsibility that the chapter is devoted. The final chapter in this Part catalogues the avenues for external (that is, court or tribunal) supervision over the exercise by attorneys (usually under enduring powers) of their authority.

[page 195]

Chapter 8

Relations Between Principal and Attorney

Sources and boundaries of attorneys’ duties Civil liability At common law In equity Under powers of attorney legislation (including compensation as remedy) Relief from civil liability Exculpation clauses within powers of attorney Court’s statutory jurisdiction to grant relief Criminal liability Nature of attorneys’ duties Attorneys’ standard of care As per agents? As per trustees? As imposed by powers of attorney legislation Illustration — standard applicable in exercising power of sale Main duties of attorneys Duty to carry out the terms of the power

8.3 8.3 8.4 8.5 8.8 8.11 8.11 8.12 8.19 8.20 8.23 8.23 8.24 8.25 8.27 8.28 8.28

Principal’s statement of wishes Where instructions are ambiguous Fiduciary duties Nature of fiduciary duties Application of fiduciary duties to attorneys Consequences of fiduciary breach Illustrations of application of fiduciary duties to attorneys Commencement and duration of fiduciary duties Statutory impact on fiduciary duties Boundaries to fiduciary duties Duty not to mix property Duty to account Rationale Application vis-à-vis enduring powers Investment decisions

8.29 8.30 8.31 8.31 8.34 8.37 8.38 8.43 8.45 8.48 8.51 8.55 8.55 8.57 8.59 [page 196]

Accountability requirements Court or tribunal power to order account Duty to act unanimously if appointment is joint Duty not to delegate Non-delegation rule generally Application to powers of attorney Distinction between delegation and appointment of an agent Delegation of ministerial acts Impact of statute — Australian Capital Territory

8.62 8.64 8.65 8.66 8.66 8.67 8.70 7.72 8.73

Duty of confidentiality Undue influence by attorney Duty to consult? Rights of attorneys Right to remuneration sourced in contract Right to indemnity Right to lien Rights conferred by statute

8.74 8.77 8.80 8.86 8.87 8.90 8.92 8.94

8.1 The relationship between principal and attorney, being one recognised by the law, necessarily exhibits various legal incidents. Foremost are duties owed by attorney to principal, which stem from the principal having appointed an attorney to exercise authority on his or her behalf. The preponderance of the case law, also supported and expanded by statute in most jurisdictions, focuses on these intra-agency duties. A discussion of these therefore forms the bulk of this chapter.1 8.2 Duties owed by principal to attorney find infrequent expression in the cases. These are perhaps better described as ‘rights’ of an attorney, and at general law are confined to rights of lien and indemnity. Rights to remuneration, and indeed any other attorneys’ rights, are sourced from the terms of the power of attorney itself. These also find mention in this chapter.2

Sources and boundaries of attorneys’ duties Civil liability 8.3 The civil consequences for an attorney who acts outside the scope of his or her authority under a power of attorney are determined in the first

instance by the legal source of the duty that has been breached, and then by the loss (if any) that the principal has suffered as a result.

At common law 8.4 Unlike most agency relationships, which are constituted by way of contract, powers of attorney are not ordinarily contractual.3 Accordingly, by acting in excess [page 197] of authority an attorney is not, in the usual case, amenable to liability for breach of contract.4 Of course, should the power be created by way of contract, an excess of authority can be rectified via contractual avenues, as may a principal’s attempt to illegitimately revoke an irrevocable authority.5 As agency relationships can attract a tortious duty of care,6 independent of contract, it stands to reason that an equivalent duty of care could arise in the context of powers of attorney. It is conceivable, therefore, that an attorney who acts negligently in the course of exercising his or her duties or powers under a power of attorney may be found liable to the principal in tort, on the assumption that the principal can establish a loss to be compensated. The case law, though, reveals few examples of negligence as a foundation for attorney liability, and tort proves not to be the foundation for claims of attorneys acting outside authority. On one level this paucity of authority may seem odd, especially in view of the common absence of a contractual avenue for relief. It is, after all, possible for an attorney who exceeds authority to have done so negligently.

In equity 8.5 It may be that tort has seen relatively little infusion in attorneys’ liability to their principals because the scenarios that have driven attorney liability in the case law have focused primarily on an attorney’s breach of fiduciary duty. Like agents generally, attorneys ordinarily owe fiduciary duties to their principals,7 and the cases suggest that excesses of authority are

often driven by attempts to place an attorney’s interests ahead of those of the principal. These prima facie amount to breaches of fiduciary duty, namely a display of disloyalty to the principal. Where a breach of fiduciary duty is established, the errant fiduciary (attorney) may be liable personally to compensate the principal for his or her loss, may be required personally to account for any profit made in breach, or otherwise may be made accountable as a constructive trustee to hold property secured in breach of fiduciary duty for the benefit of the principal.8 8.6 Another reason why tort has had a limited airing, and one aligned with the fiduciary status of an attorney, is that the doctrine of ‘fraud on a power’ can supply a pathway to relief for excesses of authority. That doctrine, the application of which is not restricted to powers of attorney, requires the donee (attorney) of a power — defined generally as an authority to dispose of real or personal property irrespective of any existing estate or interest in the property — to exercise that power bona fide and not for any purpose or design other than one within the intention of the donor [page 198] (principal).9 Where the donee disposes of property (or appoints) contrary to this principle, equity holds the disposition (or appointment) bad as a ‘fraud on a power’.10 The term ‘fraud’ here does not require conduct that is dishonest or immoral. It merely means that the power has been exercised for a purpose, or with an intention, beyond the scope of, or not justified by, the instrument creating it. 8.7 Judicial statements as to the nature of attorney liability in this regard need to be viewed against the preceding backdrop. For instance, Dr Lushington’s often cited remark in The Margaret Mitchell11 that ‘to use a power of attorney contrary to the known wishes and directions of the grantor, is a breach of trust’ should not be interpreted as transposing the law of trusts to powers of attorney, but as a reference to breach of fiduciary duty. And the more recent statement that ‘an act of an attorney outside the scope of the authority granted by a power of attorney is ultra vires and void’12 should be viewed from the perspective of the doctrine of fraud on a power; as should

the statement that a wrongful use of a power of attorney can amount to a ‘legal fraud’.13 At the same time, not all excesses of authority by an attorney are necessarily fiduciary breaches or frauds on a power. An attorney who mistakenly exceeds his or her authority, whose action is not tinged by a conflict of interest, does not breach fiduciary duty. And excesses of authority can be manifested other than pursuant to the disposition or appointment of property, which lies at the core of fraud on a power. Also, as an attorney may possess ostensible authority beyond the scope of actual authority, not all acts outside actual authority are void; they may be valid as against third parties for coming within the attorney’s ostensible authority.14

Under powers of attorney legislation (including compensation as remedy) 8.8 Powers of attorney legislation commonly prescribes duties owed by attorneys to principals. In some respects these replicate or bolster those recognised at general law, but in other respects broaden them. Also, the lack of clarity at general law in the remedial avenues available against an errant attorney, in part stemming from the relative dearth of dedicated case authority directed to the point, has prompted legislatures in several jurisdictions to make statutory provision to order payment of compensation as a remedy. In Queensland, South Australia, Tasmania and Western Australia the legislation, which except in Queensland applies only to enduring powers, aligns the availability of compensation to a breach of a statutorily prescribed standard of care.15 It provides that an attorney who does not fulfil that standard may be ordered by the court to [page 199] compensate the principal for a loss caused or occasioned by the attorney’s failure.16 In Queensland and Western Australia, a breach of the standard may also generate a civil penalty. 8.9

In the Australian Capital Territory and Queensland, moreover, the

legislation envisages that an attorney under a power of attorney, whether or not enduring, and in Queensland whether or not created under the Act,17 may be ordered by the Supreme Court (in Queensland, any court)18 to compensate the principal (or, if the principal has died, the principal’s estate) for a loss caused by the attorney’s failure to comply with the Act in the exercise of a power.19 Upon commencement of the Powers of Attorney Act 2014 (Vic), equivalent provision will exist in Victoria vis-à-vis enduring powers.20 For example, in Ede v Ede21 the defendant, who as attorney for the principal under an enduring power sold a parcel of real estate owned by the principal to the attorney’s daughter, conceded that this was a breach of the statutory proscription not to ‘enter into a conflict transaction’.22 As the sale was made at $70,000, which was found to be less than its $110,000 market value at the time, Muir J ordered the attorney to pay the principal compensation of $40,000 (less $3,200 for commission that would have been incurred had the sale been on the open market).23 If the principal or the attorney has died, the application for compensation must be made within six months of that event (or, if both have died, within six months from the day of the first death),24 although in each case there is a broad discretion to extend time.25 Any compensation paid under a court order is to be taken into account in assessing damages in any later civil proceeding in relation to the attorney’s exercise of the power.26 8.10 Under the Advance Personal Planning Act 2013 (NT), with effect from 17 March 2014, a decision-maker who is convicted of an offence for improperly exercising an authority under an advance personal plan27 can be ordered by the [page 200] court to pay compensation to the principal if the conduct of the offender has caused the principal loss.28 This does not affect any civil liability the offender may have in relation to the relevant conduct, but any compensation ordered must be taken into account in assessing damages in a later civil action.29

Relief from civil liability

Exculpation clauses within powers of attorney 8.11 There is nothing to preclude a principal from including within the terms of a power of attorney a clause exempting an attorney from liability for breaching his or her obligations, or acting in excess of his or her authority, under the power. The principles applicable to setting the legitimate parameters of clauses of this kind, and to their interpretation, arguably parallel those applicable in the context of exculpation clauses in trust instruments. Accordingly, there is no scope to escape liability for dishonesty, irrespective of the terms of the power, and any such clause is to be interpreted strictly against the attorney.30 The most likely use of exemption clauses in the context of powers of attorney, as in the case of trusts, is to excuse an attorney who, by way of oversight or other negligent act, causes loss to the principal. They are less likely to be directed at intentional excesses of authority or, in the main, fiduciary breaches by attorneys.31

Court’s statutory jurisdiction to grant relief 8.12 If an attorney is found to have breached a duty to the principal, or to have otherwise acted in excess of power, the court has no jurisdiction at general law to relieve the attorney from any consequent liability, no matter how honest or reasonable his or her conduct. In this regard, liability is strict, and not premised on proof of known wrongdoing. 8.13 The position is modified by statute in the Australian Capital Territory, Queensland and (shortly) Victoria, in line with equivalent provisions in companies and trustee legislation.32 It empowers the court (or in Queensland and Victoria, the relevant tribunal) to relieve, wholly or in part, an attorney33 it considers is, or may be, personally liable for a breach of the Act if the attorney has ‘acted honestly and reasonably and ought fairly to be excused’ for the breach.34 In deciding whether an attorney under an enduring power should be relieved of [page 201] liability, in the Australian Capital Territory the court is directed to consider

the extent to which the attorney has acted consistently with the ‘general principles’.35 8.14 Given the longstanding provisions in companies and trustee legislation, which are well served with case law construing the terms ‘honestly’, ‘reasonably’ and ‘ought fairly to be excused’, it is little surprise that the curial attitude to exercising the jurisdiction to relieve attorney liability in this context aligns with that applicable in the company and trust environment.36 This clearly appears from the only reported judicial ventilation of the relevant provision vis-à-vis attorneys, the judgment of Muir J in Ede v Ede,37 where his Honour described it as ‘a remedial provision … not [to] be narrowly construed’. As noted earlier,38 the case involved an attorney who entered into a ‘conflict transaction’ proscribed by statute39 that caused the principal loss, and sought to invoke the court’s jurisdiction to relieve him from the consequent liability. 8.15 So far as the ‘honestly’ element was concerned, his Honour noted that the case law in the company and trusts fields equated honesty with absence of moral turpitude. Accordingly, an attorney who acts honestly is usually one who acts bona fide and in the interests of the principal.40 Though Muir J accepted that ‘acting in conscious disregard of the interests of a person to whom fiduciary duties are owed will normally, if not invariably, constitute dishonesty or moral turpitude’, he was unwilling to accept that ‘consciousness of wrongdoing is a necessary prerequisite to a finding of dishonesty’.41 On the facts, the attorney was found to have acted honestly, as he had endeavoured to ‘do the right thing’: he acted in accordance with legal advice; he was misled by the wording on the power of attorney; and he had no understanding that his conduct may not have been in the principal’s best interests.42 Had the acts of the attorney instead been made in disregard of the interests of the principal, they could not have been an honest exercise of the power.43 8.16 In giving colour to the ‘reasonably’ element, Muir J acknowledged that acting with such a degree of prudence as a person of ordinary intelligence and diligence may be expected to act with in the conduct of his or her own affairs was a test of reasonableness, but insisted that it could not be substituted for the statutory language of the section, or replace the duty to assess reasonableness on all the facts

[page 202] and circumstances of the case.44 On the facts, the attorney was found to have acted reasonably, on grounds that reveal an overlap with those that impacted on the finding of honesty:45 … it seems to me that the [attorney] can hardly be said to have acted unreasonably when he acted in accordance with an example provided on the power of attorney instrument, took legal advice and acted in accordance with it. He looked into the merits of the most recent valuation and considered that the sale was at a higher price than the market value disclosed by that valuation. He also had regard to current listings with real estate agents.

8.17 On whether the attorney ‘ought fairly to be excused’, Muir J remarked, in line with cases in the trusts environment, that ‘[t]he fact that an attorney is not acting for reward is a highly relevant consideration’, as is ‘the fact that the attorney took and followed legal advice’, which support the claim for relief.46 Also weighing in the equation was the ‘obvious relevance’ of whether the attorney (or relative, friend or associate) benefited from the breach, and had accounted for any such benefit to the principal. As the attorney’s daughter had benefited from the breach, by securing the principal’s property at a significant undervalue, to accede to the attorney’s claim for relief would, according to his Honour, in effect avoid application of the ‘strict equitable principle’ that a fiduciary being in breach of his fiduciary duty must account to the person to whom the duty is owed for the profit made in consequence of the breach. The curial attitude to an outcome of this kind via an otherwise remedial provision appears from the following statements in Muir J’s judgment:47 In my view, a court would not readily exercise its discretion to bring about such a result. The equitable principles were developed and have been applied rigorously for good reason. The defendant is now aware that he acted in breach of his fiduciary duty and it has been found that he caused his daughter to profit from the breach. There is no evidence that the defendant will suffer particular hardship if unsuccessful in his claim. It seems to me therefore that the defendant ought not be relieved of his personal liability for the breach unless he accounts for his daughter’s gain.

8.18 His Honour added that normally an applicant seeking relief from the consequences of a breach of duty would be ordered to pay the respondent’s costs, particularly if unsuccessful. Because the attorney had, in the circumstances, been misled by the notation on the instrument of power of attorney, been found to have acted honestly and reasonably, and had a substantial measure of success in disputing the principal’s valuation

evidence, Muir J foreshadowed that, subject to hearing submissions on costs, a different result might be warranted here.48

Criminal liability 8.19 Attorneys who exceed their authority may be exposed to criminal responsibility as a result of their actions. Where this involves the misappropriation of money or property, the criminal law relating to stealing may be a source of criminal responsibility.49 The latter may also arise out of legislation in each jurisdiction that [page 203] criminalises the receipt of a secret commission by an agent, which arguably includes an attorney.50 The powers of attorney statutes also generally prescribe offences for breaches of certain of their provisions.51

Nature of attorneys’ duties 8.20 Duties are, by their very nature, mandatory. It is confusing to speak of a discretionary duty. At the same time, powers of attorney are chiefly about authority — a power to do something on behalf of another — which targets discretion (facultative) rather than obligation (imperative). ‘In so far as a power of attorney confers authority on the donee as agent of the donor’, it has been judicially observed, ‘it operates merely as an authority to act and not as a direction to act’.52 This explains the need for Part III of this work to be devoted to attorneys’ authority. 8.21 But merely because powers of attorney are about authority does not denude attorneys of any legally enforceable duties to their principals. Even the most general discretions to act are rarely open-ended, and so must be exercised according to the parameters imposed by the principal or otherwise by the general law. And it is these parameters that constitute the primary sources of attorneys’ duties. The principal, via the terms of the power of attorney, can place boundaries on the scope of an attorney’s authority. The

principal may, by those terms, moreover impose on attorneys specific duties in the exercise of their authority. The general law superimposes on attorneys the proscriptive fiduciary duties, a manifestation of which are the limitations imposed by the doctrine of fraud on a power. 8.22 It should be noted at the outset that the duties imposed by the general law on attorneys apply equally to attorneys under an enduring power of attorney. Merely because enduring powers of attorney are ineffective at general law53 does not mean that their validation by statute in each jurisdiction limits their duties to those stipulated by statute. Except as modified by statute, enduring powers exhibit the basal characteristics of nonenduring powers, and so remain equally amenable to attracting general law duties (perhaps more stringently applied),54 again subject to statutory modification, as their non-enduring counterparts. So far as enduring powers are concerned, it has been cogently argued that the general law ought to recognise a positive duty to act, beyond merely an authority to act, once the principal is no longer capable of superintending the power. The proposition has been proffered that a person who knows that he or she has been named as the attorney under an enduring power ‘should not be permitted to do nothing for an unreasonable period of time and escape liability’.55 There is, it is reasoned, no need for an equivalent [page 204] duty on attorneys whilst the principal retains capacity, as a principal unhappy with the exercise of the attorney’s authority can revoke it.56 That is not ordinarily an option following the onset of incapacity, and for the law to allow the attorney to remain passive, in circumstances where the principal had expected the attorney to act, is to undermine the purpose for granting the power in the first instance.

Attorneys’ standard of care As per agents?

8.23 Largely because there are few Australian cases where attorneys have been sued for negligence in carrying out their principal’s instructions, it is difficult to state with certainty the applicable standard of care the law expects of attorneys. So far as agents generally are concerned, the law expects agents to act with reasonable care, skill and intelligence in performing their duties and exercising their discretions,57 but this will no doubt vary according to the circumstances, say, the nature of the service supplied and the expertise of the agent.58 So far as professional agents are concerned, the standard of care is impacted upon by civil liability legislation.59 There is nothing in principle to preclude the standard of care applicable to agents to apply to attorneys, who are, after all, a particular form of agent.60 Accordingly, where an attorney acts in a professional capacity, usually for reward, the law legitimately expects a standard exceeding that of an attorney who acts gratuitously.61 Acting gratuitously will likely occur more commonly in the context of powers of attorneys than most other agencies. It has been suggested, to this end, that some regard should be had to the actual knowledge and skills of the attorney, such that ‘[a]n attorney should not be held to a higher standard than the [principal] would expect of the attorney’.62

As per trustees? 8.24 There is authority emanating from Canada that aligns attorneys’ standard of care to that applicable to trustees, namely ‘to act as the reasonable and prudent business person would act’ in managing his or her own affairs.63 How this differs, if at all, from the tortious standard of care imposed by the general law, is unclear. [page 205] After all, equity’s need to prescribe a dedicated standard of care for trustees was driven by the absence of a common law duty of care between trustees and beneficiaries rather than any need to prescribe a different standard. The trust placed by a principal in an attorney, for general powers64 and enduring powers65 in particular, parallels that placed in a trustee.66 More significantly, as powers of attorney involve delegation of authority to an

attorney, pursuant to which the attorney acts ‘in stead’ of the principal, ordinarily involving financial decision-making on a principal’s behalf, there are compelling grounds to support a standard of care expressed by reference to the expectations of a ‘business person’ in managing ‘his or her own affairs’. The strictness with which powers of attorney are construed67 also ties in with the trust requirement of ‘prudence’. That the law of trusts recognises that the standard of care can be raised for professional trustees68 likewise ties in with equivalent tortious concepts in this regard.

As imposed by powers of attorney legislation 8.25 The general law is reflected, supplemented or supplanted by the powers of attorney legislation in several jurisdictions. In Queensland, for example, the legislation reflects the general law by requiring an attorney69 who may exercise a power under a document, when exercising the power, to do so subject to the terms of the document.70 Also reflecting the general law are the requirements that an attorney exercise his or her powers ‘honestly and with reasonable diligence to protect the principal’s interests’71 and not exercise those powers when he or she knows that the power of attorney has been revoked.72 These two latter requirements, beyond being enforceable inter partes, may generate a civil penalty order. Statute in Western Australia also obliges an attorney, under an enduring power, to ‘exercise his powers … with reasonable diligence to protect the interests of the donor’.73 The same applies for enduring powers in South Australia, restricted in its application to ‘any period of legal incapacity of the donor’.74 Equivalent provision vis-à-vis enduring powers is impending in Victoria.75 The Advance Personal Planning Act 2013 (NT) likewise obliges decisionmakers, in exercising an authority under an advance personal plan,76 to ‘act honestly and with care, skill and diligence’.77 It, however, requires that decision-makers with financial management powers deal with the principal’s property ‘as if it were trust property held by the decision-maker on trust for the [principal]’, and makes explicit that, in so [page 206]

dealing with the property, decision-makers are subject to ‘the duties, obligations and limitations that apply … to a trustee dealing with trust property’.78 Statute in Tasmania limits the application of the relevant duty to enduring powers too, and equally provides that, during the principal’s incapacity, the attorney is ‘taken to be a trustee of the property and affairs of the donor according to the tenor of the power’.79 It follows that in the Northern Territory and Tasmania the standard of care applicable to trustees clearly apply to attorneys in the instance prescribed. From 1 January 2014, the Tasmanian legislation adds the following to this end:80 An attorney … must at all times exercise his or her powers under an enduring power of attorney as far as is possible and reasonable in the circumstances: (a) in the best interests of the donor; and (b) in consultation with the donor; and (c) taking into account: (i) the wishes of the donor, in so far as those wishes have been, or can be, ascertained; and (ii) what would be reasonably likely to be the wishes of the donor, if he or she were not subject to a mental incapacity.

8.26 The Australian Capital Territory and Queensland powers of attorney statutes prescribe a set of ‘general principles’ with which attorneys must comply in exercising their attorney functions once the principal suffers impaired mental capacity.81 These are listed in relevant Schedules to those Acts.82 They include principles related to the principal’s human worth and dignity, valued role as a member of society, quality of life, participation in decision-making, maintaining of values, environment and relationships, and confidentiality. These statements of principles must be seen against the legislation extending the use of enduring powers for personal and healthrelated decision-making.83 In the Northern Territory, the Advance Personal Planning Act 2013 similarly directs a decision-maker, in determining the principal’s best interests under an advance personal plan,84 to take into account (and weigh) considerations paralleling the ‘general principles’ mentioned above.85 This obligation operates against a backdrop whereby decision-makers are expected to exercise their authority ‘in the way the decision-maker reasonably believes the [principal] would have done in the [page 207] circumstances’.86 The Act does, however, excuse the decision-maker from pursuing this course if he or she reasonably believes that to do so would be

impracticable, unlawful, impose an unreasonably onerous burden on another person, or otherwise so unreasonable that it is justifiable to override the principal’s wishes.87

Illustration — standard applicable in exercising power of sale 8.27 The exercise by an attorney of a power to sell the principal’s property — here assuming that the power is conferred expressly or by necessary implication,88 and is not exercised in breach of fiduciary duty89 — presents a useful factual illustration of the application of the attorney’s standard of care. Canadian judges here have displayed no reluctance in treating attorneys as equivalent to trustees, notwithstanding that the duties of trustees emanate from equity whereas attorneys’ duties in this context derive chiefly from the common law. The parallels made earlier regarding trustees and attorneys90 translate well as regards exercising powers of sale. The issue featured before the Alberta Court of Queen’s Bench in MacDonald v Taubner,91 in which Graesser J held that the trustee’s standard of care — in terms that ‘a trustee holds for the benefit of others and must make prudent decisions concerning the property’92 — was equally applicable to an attorney. An attorney was, accordingly, obliged to ‘seriously consider’ the principal’s welfare when taking steps to sell the latter’s property and in so doing exercise a standard of care and diligence ‘that would be exercised by a person of ordinary prudence in managing his or her own affairs’.93 This meant, said his Honour, that in reviewing the sale of the principal’s property, an attorney should conduct reasonable investigations into its value and the benefits of any sale to the principal.94 On the facts, prior to selling shares in the principal’s company, the attorney appointed an expert, who had a long history of being a trusted advisor to the principal, to set their value. In determining their value in this fashion, the court held that the attorney had fulfilled the requisite standard of care.95 Conversely, where, as in Brown v Lefebvre,96 the attorney sells the principal’s house without taking proper steps to determine its value — in the circumstances where the attorney had not even had the house properly appraised to determine its market value97 — the standard of care is not met.

[page 208]

Main duties of attorneys Duty to carry out the terms of the power 8.28 Whatever the terms of the power of attorney, to the extent that the authority conferred can be legitimately conferred at law,98 and does not involve the attorney in illegal conduct, a person who accepts the role of attorney must follow the terms of the power. After all, the power is one that emanates in its entirety from the principal, and so it stands to reason that the principal can determine when and how it is to be exercised. Were the attorney not obliged to follow what the principal prescribed, it would undermine the entire purpose and rationale for granting powers of attorney. Hence the judicial remark that ‘as a general rule, the grantee of a power of attorney is bound to follow the directions and wishes of the grantor’;99 this is so at least to the extent that, outside of the terms of the power, the principal possesses the requisite capacity to give a competent instruction.100 The duty of obedience in this regard applies not only to duties imposed by the principal; it also applies equally to restrictions on authority prescribed by the relevant instrument, as well as to requirements that the attorney obtain the consent of a third person (or even the principal) to an exercise of certain authority.101 The foregoing can extend beyond directions contained in the instrument creating the power of attorney; it may include subsequent (ideally written)102 instructions as to its exercise as well as instructions as to its suspension or revocation.103

Principal’s statement of wishes 8.29 There is nothing to preclude a principal including, whether within the terms of a power of attorney or perhaps better in a document ancillary to the power, an informal statement of his or her wishes or preferences. This avoids complicating the terms of the power itself, and may be useful in the event that

the principal wishes to give the attorney(s) guidance more than directives. It may be possible, in the alternative, for the document expressing wishes or preferences to be supplied on a confidential basis (albeit referred to in the power of attorney instrument itself), where the principal may not wish his or her preferences to be known by some family members or friends. In this event, the principles that govern equivalent documents attached to trust deeds may be useful points of reference.104 [page 209]

Where instructions are ambiguous 8.30 In the context of agency law generally, there is authority to the effect that:105 … if the agent’s mandate is conferred in such ambiguous terms or is so uncertain as to be fairly capable of more than one construction, every act done by him in good faith which is justified by any one of those constructions is deemed to have been duly authorised although the construction adopted and acted upon by the agent was not the one intended by the principal.

This statement does not absolve an agent from a duty to seek to clarify unclear or ambiguous instructions.106 Modern communication facilities make it inappropriate to cast on a principal liability for the actions of the agent’s misinterpretation of albeit ambiguous instructions where the agent had the opportunity to seek their clarification.107 It is therefore more likely that agents in modern times will risk liability for failing to act in accord with their instructions should they not seek clarification of ambiguous instructions, than the liability be cast on the principal. As a sub-set of the law of agency, it is unsurprising that the same should translate to powers of attorney. In Hallani v Hallani,108 for example, Lindsay J was not satisfied that the terms of the power of attorney possessed the clarity required to authorise the attorney to transmit overseas the proceeds from the sale of the principal’s property, beyond the principal’s practical reach. His Honour discerned sufficient ambiguity in its terms ‘to have imposed on the [attorney] an obligation to clarify his instructions with the [principal], personally, before transferring estate property otherwise than to the [principal] herself’.109

Fiduciary duties Nature of fiduciary duties 8.31 In a venerable statement, Lord Chelmsford LC explained the notion underlying fiduciary duties in Tate v Williamson in the following terms:110 Wherever two persons stand in such a relation that, while it continues, confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed.

The concern that ‘no man ought to be trusted in a situation that gives him the opportunity of taking advantage of the person who has reposed confidence in him’111 led courts of equity, in an attempt to foster loyalty, to impose two proscriptive (negative) duties — ‘fiduciary’ duties — on a person (B) in whom such confidence is placed by another (A):112 [page 210] B must not, except with A’s informed consent, enter a position where there is or may be a conflict between the duty as a fiduciary and his or her own interest or a duty to a third party (the ‘no-conflict’ duty). B must not make a profit out of a relationship with A except with A’s informed consent (the ‘no-profit’ duty). 8.32 Informed consent, for this purpose, presupposes ‘a full and complete disclosure [by B to A] of all material facts’ pertaining to the conflict or profit.113 Implicit in the foregoing is that the law imposes fiduciary duties in relationships that, because of the parties’ relative positions, require legal controls on abuse of power. The prospect that A may, via informed consent, neutralise the illegitimacy of a fiduciary breach dictates that the legal imposition of fiduciary duties will yield to alternative arrangement by the parties to the relationship. 8.33

Although courts and commentators not infrequently refer to ‘fiduciary

relationships’ to mark those relationships that attract fiduciary duties,114 the nomenclature is potentially misleading. To describe a relationship as fiduciary may convey the inaccurate impression that all aspects of that relationship, and all duties arising thereunder, are fiduciary in nature. That is not so, given that only the two proscriptive duties above-mentioned are truly fiduciary.115 Indeed, it is usual for a person who owes fiduciary duties to another to also owe coincident non-fiduciary duties to that other, for instance, in contract, tort or even in equity. As to the latter, for instance, not all duties owed by trustees to beneficiaries are fiduciary in nature — trustees owe various prescriptive duties in this regard116 — and so case law that aligns attorneyship (under enduring powers, usually) to trusteeship117 does not mean that all duties owed by attorneys are fiduciary duties. Rather, it is ‘[t]he fiduciary duty principles of trust law [that] must … be applied to the relationship between a principal and her attorney-in-fact’.118

Application of fiduciary duties to attorneys 8.34 As the very nature of agency involves the delegation of authority by a principal to an agent, to the effect that the agent will ‘represent’ the principal in some way and, commonly, have power to affect the principal’s legal relations with third parties, it is clear that a principal reposes in an agent a considerable degree of confidence.119 Though not all relationships that involve reposing of confidence necessarily attract fiduciary duties, the level of confidence placed by a principal in an agent, tied with the agent’s authority to affect the principal’s legal station, from early times led the [page 211] law to impose on agents fiduciary duties to their principals.120 In fact, the fiduciary duties arising in the agent-principal relationship have been described as the ‘supreme characteristic’ of that relationship.121 Being a species of agency,122 courts have shown no reluctance to treat the relationship between attorney and principal as giving rise to fiduciary duties.123 Yet for powers of attorney fiduciary duties appear to play a more central role than in other agencies, as many attorneys owe no coincident

contractual duties to their principal124 and, whether or not for this reason, the cases catalogue few instances of tortious claims by principals against their attorneys.125 As between principal and attorney most of the case law, rather, targets what are alleged to be breaches of fiduciary duty. This may, in turn, explain why judges, on occasion, describe attorneys’ fiduciary duties in terms more expansive than the limited twin proscriptive fiduciary duties noted earlier, a typical example being a reference to a duty to act ‘in good faith’.126 8.35 What underscores these two proscriptions is the need for an attorney (as a fiduciary) to display undivided loyalty to his or her principal.127 What they dictate, as regards attorneys, is that, in the words of an American court, an attorney ‘may not use his authority in a manner hostile to the principal for the benefit of himself or a third party’ and ‘absent express intention … may not utilize his position for his or a third party’s personal benefit’.128 Stated another way, this time phrased by a Canadian judge, ‘[a]n attorney has a duty to use the power granted to him for the benefit of the [principal] and not for his own benefit, unless it is with the knowledge and consent of the [principal]’.129 More briefly, an attorney ‘may not take a position inconsistent with the interests of the principal’.130 It follows that although fiduciary duties are proscriptive — they are prohibitions as opposed to positive obligations — the distinction between the proscriptive [page 212] and the prescriptive is one that is influenced by perspective. What an attorney is prohibited from doing, without consent of the principal, translates into a positive obligation to foster the principal’s interests.131 The objective of fostering loyalty that lies at the heart of fiduciary law dictates that, in carrying out the terms of the power, an attorney must treat the principal’s interests as paramount — ‘to act in the best interest of the principal’132 — except to the extent that the power itself makes clear provision otherwise.133 8.36 This duty translates into throwing onto an attorney who prima facie commits a fiduciary breach the burden of proving that he or she was authorised, whether by the clear terms of the power itself134 or otherwise by

the principal,135 to engage in the dealing in question.136 An American court has observed, to this end, that ‘strong evidence’ is required to overcome the ‘presumption of fraud’,137 using ‘fraud’ here to refer to breach of fiduciary duty. Accordingly, the burden is ‘a heavy one’.138 This reflects no more than the general principle identified back in the mid-nineteenth century by Sir John Romilly MR in Cooke v Lamotte:139 Where … relations exist, by means of which a person was able to exercise a dominion over another, the court will annul a transaction under which a person possessing that power takes a benefit, unless he can show that the transaction was a righteous one … The rule of the court, however, is not confined to such cases. Lord Cottenham considered that it extended to every case in which a person obtains, by donation, a benefit from another to the prejudice of that other person, and to his own advance; and that it is essential, in every such case, if the transaction should be afterwards questioned, that he should prove that the donor voluntarily and deliberately performed the act, knowing its nature and effect. It is not possible to draw the rule tighter, or to make it more stringent, and I believe it extends to every such case.

Consequences of fiduciary breach 8.37 Consistent with fiduciary law generally, a transaction effected by an attorney in breach of the fiduciary duty owed to the principal is voidable at the principal’s election. For example, where authority under a power is exercised to transfer the principal’s property to the attorney, and the power does not expressly or by necessary implication authorise this,140 the principal may elect to set aside that dealing. The law [page 213] treats the attorney in such a case as a constructive trustee of the property,141 to which the principal is beneficially entitled and therefore can call for. Money coming into the hands of an attorney on behalf of the principal is also treated as trust money, for which the attorney is liable to account to the principal, and which cannot be set off against moneys allegedly personally owed in an unrelated dealing.142 Where, however, the breach of fiduciary duty causes the principal’s property to vest, for value, in an innocent third party, the principal has no recourse against the third party — whether due to the attorney’s ostensible authority143 or, more generally, because the third party is a bona fide

purchaser for value without notice144 — and the principal’s recourse is limited to a personal remedy (whether compensation or an account of profits) against the attorney.

Illustrations of application of fiduciary duties to attorneys 8.38 The application of fiduciary principle to powers of attorney is exemplified in the courts being disinclined to find that an attorney is authorised to commit what would otherwise amount to a fiduciary breach except pursuant to express words in the instrument creating the power;145 an alleged custom or usage to this effect is insufficient.146 It appears out of courts’ reluctance to accept evidence, except from a principal of full capacity and understanding, that the attorney’s authority has been extended (usually orally) to allow the attorney to engage in ostensibly self-serving dealings.147 And it is revealed by the law’s treatment of a transaction that ostensibly amounts to a fiduciary breach as ‘presumptively fraudulent’.148 8.39 Perhaps the most obvious illustration of a fiduciary breach involves an attorney utilising his or her authority under the power to transfer the principal’s money or property to the attorney, or to a relative or associate of the attorney, without being [page 214] expressly authorised to do so. Not infrequently the case law involves attorneys under enduring powers, where the breach occurs at a time subsequent to the onset of incapacity in the principal, at which time the principal lacks effective ability to monitor or revoke the attorney’s authority. It has been judicially said, to this end, that ‘[a]s more of our population become aged, more will need financial assistance [and] [u]nfortunately, greed and the temptation to benefit oneself will exist’.149 This presents a paradigm example, therefore, of a relationship that fiduciary duties are designed to address, the principal here being, it has been said, ‘perhaps the most vulnerable of fiduciary protectees’, as most other relationships infused by

fiduciary duties have ‘some monitoring mechanism’.150 In turn this explains why some have called for statute to stipulate the attorney’s main duties.151 In Watson v Watson,152 for example, an attorney under an enduring power withdrew $55,000 from the principal’s bank account and conveyed to himself the principal’s residence. Berecry AM remarked that ‘any exercise by the [attorney] of his authority under the power … was to be done in a manner which was not inconsistent with the known intentions of the [principal] or contrary to the interests of the [principal]’.153 As those acts were prima facie inconsistent with the interests of the principal, the attorney had abused his position, so committing a fiduciary breach. The attorney thus held the money and property on constructive trust for the principal’s estate (the principal having died).154 8.40 Even outside of a principal’s incapacity, there may be occasions where, whether due to some other disability or some lack of superintendence over the exercise of the attorney’s authority, a fiduciary breach is practised by the attorney. In Smith v Glegg,155 for instance, the principal, an elderly widow estranged from two of her three daughters, appointed the remaining daughter as attorney under an enduring power. Ostensibly pursuant to the power, the attorney transferred to her son, for no consideration, the principal’s only substantial asset. The transfer was held to amount to a breach of fiduciary duty (as well as the exercise of undue influence),156 McMurdo J reasoning that the principal’s total dependence on the attorney’s exercise in good faith of her extensive powers under the power of attorney:157 … required the [attorney] to avoid any dealing or transaction by which her own interest could conflict with her duty to the [principal]. A critical part of her responsibilities as an attorney was her management of the [attorney’s] money and property. If the [attorney] was to be free to accept a gift of the [principal’s] only substantial asset, then her interest in maximising the value of what she would receive would conflict with her duty to manage and apply the [principal’s] property only for the support, health and comfort of the [donor], even if that involved some substantial expenditure.

As the house had since been sold, and its proceeds applied to partly fund the purchase of another property, his Honour ordered that the attorney repay the money [page 215]

to the principal. And in Chen v Marcolongo158 the New South Wales Court of Appeal described the scenario presented on the facts, where an attorney used a power of attorney to sell the property of the principal to himself, as ‘a classic case of a fiduciary benefiting at the cost of the person to whom he owed a fiduciary duty’. 8.41 Although a common event arising in the case law, as appears from the foregoing, is that of an attorney utilising the power to transfer the principal’s property, usually for no consideration, for his or her own benefit, breaches of fiduciary duty by attorneys are not confined to dealings of this kind. Any transaction where there exists, or may exist, a conflict between the interests of the principal and those of the attorney can raise the spectre of fiduciary breach. For example, an attorney who wishes to use the general terms of a power of attorney to borrow money from the principal,159 or who seeks to do so in the course of an existing attorneyship in any case, must establish that the principal has exercised an informed consent to this dealing. Absent informed consent, the attorney is in breach of fiduciary duty.160 8.42 Courts are particularly wary where the backdrop to the creation of the power of attorney is an existing relationship giving rise to fiduciary duties, such as that between lawyer and client. The point is illustrated by the New Zealand case of Apatu v Peach Prescott & Jamieson.161 A client (A) wished to sell one parcel of land in order to purchase another. To finance the purchase the defendant lawyer (J) arranged a six month loan of $110,000 from a finance company, giving a personal undertaking to refinance A’s loan. In return J was granted a power of attorney over A’s land. An option was sought by a third party to purchase A’s land, but A considered the offer too low. Disregarding A’s wishes, J granted the option. In so doing, the court held J to have breached his duty to A, reasoning as follows:162 … the solicitor’s obligation to do his reasonable best for a client cannot be fulfilled if that duty is owed to two or more parties in the same transaction whose interests are in opposition. These considerations apply a fortiori where as here the conflict is between the client and the solicitor himself. Here, essentially the difference that arose between solicitor and client related to A’s opinion as to what was best for himself as compared with what [J] thought was best in the combined interests of A and [J’s] firm. When J appreciated that A’s wishes were contrary to his own he could no longer advise his client in accordance with his duty which at that stage he could only fulfil by either giving way or ensuring that A was properly advised independently before proceeding. He did neither, and in the result I am satisfied that in proceeding with the option contrary to the plaintiff’s wishes, J was in breach of his duty.

Commencement and duration of fiduciary duties 8.43 The commencement of fiduciary duties under a power of attorney, like the commencement of duties under a power generally, rests upon the event that triggers its operation having occurred — whether it be immediate upon the execution [page 216] (or registration) of the power or upon an event specified in the power transpiring — and the attorney’s acceptance of responsibility under the power.163 If that event has not occurred,164 or an attorney disclaims the power,165 no corresponding fiduciary (or other) duties arise. 8.44 Fiduciary duties may nonetheless predate the commencement of a power of attorney, in which case those duties, so far as they affect dealings occurring prior to that commencement, are sourced other than from the relationship of principal and attorney. This may be one way of explaining the decision of Debelle J in Klotz v Neubauer.166 There an agreement was reached between a daughter (M) and her elderly parents that, in return for a $40,000 contribution by the parents, M (and her husband) would extend their home to accommodate the parents for the rest of their lives. After a short period of residence with M, and following disagreements with M, the father (the mother had since died) was transferred to a rest home, never again to reside with M. While being accommodated at M’s residence, the father granted a power of attorney to a son (S), who looked after his father’s affairs pursuant to the power until the father revoked that power some two years later. At that time, during which the father resided in a rest home, he granted a power of attorney to M and another son (G). S and a third son (J) brought proceedings to render M and G liable to account for the $40,000 paid to M to extend her home or for rest home fees. Debelle J held that, as their father was elderly and prone to periods when he was not competent to manage his affairs, M and G were subject to a fiduciary duty.167 His Honour reasoned that, as attorneys for their father, M and G had a duty as fiduciaries to him and his estate, which attracted an obligation not to profit from their father’s estate or otherwise an obligation to account for any

profit. As fiduciaries, M and G had the burden of proving that money expended by them on rest home fees was properly incurred, his Honour added; they, and in particular M, had a conflict of duty and interest, it was held, because M had been paid $40,000 in order to provide accommodation for the principal. Debelle J concluded that as M had profited from being able to use the extensions at her house by accommodating her father elsewhere, she should account for the profit.168 This outcome is not necessarily easy to explain by reference purely to fiduciary duties arising out of the power of attorney. This is because the $40,000 payment preceded any of the powers of attorney, indeed preceding the power of attorney granted to M by some three years. Debelle J conflated that payment with duties owed as attorneys at a later date, by ‘relating back’ events occurring years later to a payment otherwise untrammelled by fiduciary duties stemming from M’s position as attorney. [page 217] This seems an odd approach. A better explanation for the decision is that M owed a pre-existing fiduciary duty to her father, in view of his dependence on her, at the time of the $40,000 payment. Alternatively, and independent of fiduciary duties altogether, it could have been argued that M’s enrichment could justify an equitable charge over her home, as it has in multiple similar fact situations over the years.169

Statutory impact on fiduciary duties 8.45 Powers of attorney legislation in the Australian Capital Territory, Queensland, Tasmania (from 1 January 2014)170 and Victoria (upon the commencement of the Powers of Attorney Act 2014) replicates and, in some respects, impacts on the general law in this regard. It allows an attorney to enter a ‘conflict transaction’ only if the principal authorises the transaction, conflict transactions of that kind or conflict transactions generally.171 For this purpose, a ‘conflict transaction’ is a transaction that results, or may result, in conflict between the duty of an attorney towards the principal and either:172

the interests of the attorney, or a relative,173 business associate or close friend174 of the attorney; or another duty of the attorney. In this sense, a ‘conflict transaction’ is defined in terms aligned with fiduciary duties at general law. But the legislation is more lenient than the general law by stating that a transaction is not a ‘conflict transaction’ only because, by the transaction, the attorney in the attorney’s own right and on behalf of the principal deals with an interest in [page 218] property jointly held, acquires a joint interest175 in property, or obtains a loan or gives a guarantee or indemnity in relation to one of the preceding transactions.176 A breach of the statutory proscription can be rectified by a court order for compensation.177 8.46 The above provisions, though similar, differ in two main ways. First, the Queensland provision is expressed to apply not only to attorneys under the Act but also to powers of attorney made otherwise than under the Act;178 in the Australian Capital Territory only attorneys under the Act (that is, attorneys under a general power or an enduring power)179 come within its coverage. In Tasmania and Victoria their application is confined to enduring powers. Second, the principal’s authorisation for conflict transactions must, in the Australian Capital Territory and Tasmania, be contained in the power of attorney itself. No such restriction stems from the wording of the Queensland or (impending) Victorian Acts, suggesting that the authority can, if proven to the satisfaction of the court, emanate outside of the terms of the power. 8.47 An interesting statutory counterpoint in this regard is found in the New Zealand legislation that governs enduring powers of attorney. Like its Australian siblings, it proscribes attorneys from benefiting themselves at their principal’s expense except where authorised to do so,180 but it also envisages that the proscription does not apply, unless the power provides expressly to the contrary, to:181

if the attorney and principal are married to, or in a civil union or de facto relationship with, each other, and are living together and sharing their incomes — any action taken by the attorney in respect of real or personal property that the principal and the attorney own jointly; payments of out-of-pocket expenses (other than lost wages or remuneration) reasonably incurred by an attorney, or of professional fees and expenses reasonably incurred by an attorney who accepted appointment in a professional capacity or has undertaken work in any professional capacity to give effect to the decisions taken under the power;182 or any loan or advance or other investment of the principal’s property that a trustee could make of trust funds pursuant to the trustee’s statutory discretion to invest.183 It appears that the first dot point is directed, albeit more pointedly, to the property jointly held qualification to ‘conflict transactions’ in the Australian Capital Territory, Queensland and (impending) Victorian legislation. The second dot point reflects [page 219] what at general law encompasses the attorney’s right to indemnity for expenses properly incurred in carrying out the attorneyship,184 and so should not be seen as any extension of the law. The Australian Capital Territory, Queensland and (impending) Victorian provisions should, as a result, not be seen as ousting this general law right. Under the third dot point, an attorney under an enduring power is, while the principal is incapable, treated essentially as a trustee, a view that enjoys some support in case law outside Australia185 as well as in the Tasmanian legislation.186

Boundaries to fiduciary duties 8.48 As foreshadowed earlier,187 not all duties owed by an attorney to a principal are fiduciary; there may be duties sourced in contract, tort or under statute, for instance. Moreover, fiduciary duties represent default rules, which

can be modified by the terms of the power of attorney (or, for that matter, those in a contract or trust). If the power authorises the attorney to exercise it for the attorney’s own benefit, whether or not for the principal’s benefit, this indicates that the principal (assuming he or she had the requisite capacity when creating the power188 and that no other vitiating factors come into play)189 envisaged that the attorney may legitimately act in an otherwise fiduciary infringement, and evidences the principal’s consent to this. The scope of the fiduciary proscriptions is correspondingly reduced. 8.49 The greatest infringement on fiduciary responsibility, though, arises where the principal creates what is known as an ‘irrevocable power of attorney’. What marks a power as irrevocable, in addition to being expressed as irrevocable, is that its purpose is to secure the interest (or claim or entitlement) of the attorney (hence the terminology in this context of ‘power coupled with an interest’).190 To the extent that a power is incapable of revocation by the principal, at least not without liability to the attorney, the former has no effective control over its exercise. What control the principal retains rests on the scope of authority conferred by the terms of the power. As noted by a Queensland judge, ‘the only relevant wishes and directions are those expressed in the written instrument, granting the powers of attorney’.191 Outside of this, an irrevocable power makes the attorney ‘absolutely independent of the principal’ and ‘exclusively clothed with all the capacities of the principal in reference to the subject-matter [of the power]’.192 It follows that, provided that the attorney acts within the scope of the authority prescribed by the power, he or she may not only act independently of the principal, but may even ignore a direction given by the principal inconsistent with the terms of the power.193 It also means that an injunction may lie restraining the principal [page 220] from doing anything that would deprive the attorney of the intended interest, claim or entitlement.194 8.50 It is unsurprising, therefore, to find that the law is disinclined to impose duties of a fiduciary nature upon the attorney under an irrevocable

power. Indeed, it has been judicially observed that an irrevocable power is, by its very nature, ‘very different from a revocable power’, and ‘does not fasten upon the [attorney] the usual fiduciary obligations of an agent’.195 In this sense, the creation of an irrevocable power may be seen as the most extreme modification — essentially an ouster — of fiduciary duties by the expression of a principal’s intention. At the same time, though, the duration of irrevocability is necessarily confined to the moment when the attorney’s interest, secured under the power, is satisfied. Once this eventuates, ordinarily the power of attorney comes to an end, for its purpose has been served.

Duty not to mix property 8.51 In the context of trusteeship, a manifestation of fiduciary law is in proscribing a trustee from mixing trust property (including money) with his or her own property. The rationale for the ‘no mixing’ rule is not only grounded in ensuring that a distinction is made between trust property and other property, but also in deterring trustees from treating trust property as their own. As trust property is property to which fiduciary duties apply, any such admixture raises a prospect of a fiduciary breach. 8.52 Although attorneys, unlike trustees, do not ordinarily have title to the principal’s property, but only authority to deal with it, there is a sufficient analogy between attorneys and trustees for this purpose to justify the application of a ‘no mixing’ rule to attorneys.196 Indeed, there is usually a stronger basis to apply the ‘no mixing’ rule in the case of powers of attorney, because unless attorneys are authorised to transfer the principal’s property into their own name (or otherwise to treat it as their own)197 — which is the main way mixing can occur — any such transfer is an excess of authority, and most likely a breach of fiduciary duty.198 8.53 The rule must yield, though, to where the attorney and principal jointly own property, leading a Canadian law reform body to recommend a statutory expression of the relevant law as follows:199 An attorney must not co-mingle any property or fund of the donor with any property or fund of the attorney but must hold each legally separate from the other, except where:

[page 221] (a) the property was jointly owned or otherwise co-mingled by the donor and attorney before the donor became mentally incapable, or is purchased with the proceeds of disposition of such property after the donor became mentally incapable; or (b) the property or fund is subject to an established pattern of co-mingling by the donor and attorney which started before the donor became mentally incapable.

Provision directed to this end has, as noted earlier,200 seen enactment in the Australian Capital Territory, Queensland and Tasmania, and is forthcoming in Victoria, as an exception to ‘conflict transactions’. The Advance Personal Planning Act 2013 (NT), moreover, makes explicit that the obligation of a decision-maker under an advance personal plan201 to deal with the relevant property as if it were trust property202 does not prevent the continuation of joint ownership of property by the principal and the decision-maker (whether as joint tenants or tenants in common) if the joint ownership commenced before the decision-maker was appointed or after the appointment but while the principal had decision-making capacity for the matter.203 8.54 The Australian Capital Territory, Queensland, Tasmanian and (forthcoming) Victorian powers of attorney statutes address the ‘no mixing’ point explicitly. They require an attorney under an enduring power of attorney to keep the attorney’s property separate from the principal’s property,204 excepting property that the attorney and principal own jointly, or except as required by statute.205 That the Tasmanian legislation brands an attorney during a principal’s period of incapacity as a trustee for the principal206 would itself have attracted the trusts law proscription against mixing, and the same may be said vis-à-vis decision-makers under advance personal plans in the Northern Territory, whose duties are likewise assimilated to trustees.207

Duty to account Rationale 55.8 Agents are required by the general law to maintain accounts of all transactions effected within the course of the agency208 and to produce those to the principal upon request.209 There are accordingly remarks in the case

law directed at imposing the same obligation on attorneys under a power of attorney,210 which as in the [page 222] case of agency germinates at least partly from the fiduciary overlay to which the relationship is subject.211 8.56 Attorneyship often brings a power to effect financial transactions on a principal’s behalf, with potentially little oversight by the principal. It stands to reason, therefore, that independent of any provision in the relevant instrument, the law should expect attorneys to render their principals an account of the exercise of their powers. After all, they are being exercised at the direction of the principal, and most commonly for the principal’s benefit. It follows that money that comes into an attorney’s hands on behalf of the principal is treated as trust money; that is, money that must be applied exclusively for the benefit of the principal.212

Application vis-à-vis enduring powers 8.57 The duty to account is all the more important where the principal is not in a position to monitor or superintend the attorney’s exercise of authority. Historically this may have been because the principal was out of contact, whether as a result of travelling abroad or some other reason, but modern means of communication make this a less likely scenario today. With the recognition by statute of the validity of enduring powers of attorney,213 nowadays it is where the principal lacks mental capacity that a need for accountability, which is of little or no value if directed to the principal, is heightened. As explained by a Canadian judge:214 The rationale for the requirement to account is to scrutinize the attorney’s handling of an incompetent individual’s assets, thus protecting him/her from negligence or abuse of power by the attorney and to ensure that the attorney has acted in accordance with his/ her fiduciary or other duties mandated by statute.

8.58 This has led some courts to assimilate the position of an attorney under an enduring power, at least from the onset of the principal’s incapacity, with that of a trustee.215 Although the scope for concepts of trusteeship to

apply in this context may remain unclear — those that rest in the duality of ownership inherent in trusts cannot ordinarily translate to powers, for instance — trusteeship here is ostensibly being used as a vehicle to express a foundation for broad accountability216 (although the direction of that accountability differs, as attorneys are accountable to the person who created the power whereas trustees are accountable to beneficiaries, who are commonly not parties to the creation of the trust). In Tasmania, where the powers of attorney legislation explicitly states that an attorney in these circumstances ‘is taken to be a trustee of the property and affairs of the [principal] according to the tenor of the power’,217 this likewise appears directed to the attorney’s accountability; it is not intended to generate duality of ownership. The same may be said vis-à-vis decision-makers under advance personal plans218 in the [page 223] Northern Territory, who are required to deal with their principal’s property ‘as if it were trust property’.219

Investment decisions 8.59 As a principal who has lost capacity relies on an attorney to manage his or her finances, it stands to reason that part of an attorney’s accountability may well relate to the investment of the principal’s property. Other than in Queensland, the powers of attorney statutes do not target investment by attorneys and, to this end, it has been suggested that investment decisions should be informed by parallel considerations to which apply to trustees in investing trust property.220 In Queensland the legislation states that an attorney under an enduring power may invest only in investments authorised for the investment of trust funds by a trustee,221 but as the Trusts Act 1973 (Qld) now empowers trustees to ‘invest trust funds in any form of investment’222 in place of the former authorised list of investments, that attorneys should approach investment as if they were trustees seems to stem as much from the general law as statute in Queensland.

Investment decisions by attorneys, as in the case of trustees and other fiduciaries, must exhibit ‘such care and skill as is reasonable in the circumstances’, which duty of care is ‘even greater where attorneys hold themselves out as having specialist knowledge or experience’.223 And that trustees must not invest speculatively or hazardously, and in making investment decisions (as with other decisions) eschew fiduciary conflicts, suggests that the very same should inform investing by attorneys. So in Re Buckley,224 where the attorney ‘invested’ the principal’s property in the attorney’s own (reptile breeding) business, Senior Judge Lush branded this as ‘very high risk … highly unsuitable investment to make’, as to which the attorney obtained no proper advice from a qualified person. His Lordship added that in investing funds on behalf of older folk, ‘the perceived wisdom is that the investments should be safe and that very little risk is acceptable’ and that even when investing funds long term on behalf of younger persons, ‘a hazardous and speculative investment of this kind would have been inappropriate for anyone in a fiduciary position to make’.225 8.60 The foregoing discussion relating to investment by attorneys under enduring powers is premised upon the terms of the power being consistent with growing the principal’s estate. It should not be assumed, however, that every power of attorney is explicitly or even implicitly consistent with such an ultimate objective. The terms of the power can authorise the attorney to gift the principal’s property,226 and statute in some jurisdictions even envisages that (limited) gift-giving can fall within the attorney’s authority independent of express authorisation.227 And there will likely be scope to devote the principal’s property for his or her own maintenance or that of dependants.228 [page 224] Trustee investment principles, directed as they are to swelling the size of the trust estate, may therefore not translate precisely to attorneys. Moreover, as an enduring power is in the ordinary case created, it has been said, so that ‘a person who can no longer make her own decisions is able to have those decisions made for her in a way that comports with the way in which she lived her life’,229 it cannot be assumed that this will invariably align with

entirely investment-driven management. Indeed, the Tasmanian legislation directs attorneys to take into account ‘what would be reasonably likely to be the wishes of the donor, if he or she were not subject to a mental incapacity’,230 and decision-makers under advance personal plans231 in the Northern Territory are statutorily expected to exercise their authority ‘in the way the decision-maker reasonably believes the [principal] would have done in the circumstances’.232 Provisions of this kind ensued upon recommendations by the Australian Law Reform Commission in 1988.233 8.61 An inkling as to how these statutory provisions may operate is found in the approach adopted by the Indiana Court of Appeals, albeit not against a statutory backdrop, in Miller v Miller.234 The evidence revealed that throughout their lifetime, a husband and wife were philanthropists who enriched their community. Once the wife became incompetent, her attorneys managed her financial resources as she had always done. The beneficiary of their estate objected, contending that maintaining and increasing the wife’s wealth should take precedence over altruism. The court rejected this argument, reasoning as follows:235 When a person becomes incapacitated and has selected an [attorney] to act on her behalf, she should feel secure that her [attorney] will act for her. The [attorney] should endeavor to act as the principal could — and would — act were she not incapacitated. If the principal has chosen to live her life — and spend her money — in a certain way, she has the right to know that while she is still alive and her financial resources allow, those resources will continue to be spent in a way that comports with her desire and values. That she is incompetent does not alter her basic philosophy about life, family, and money, and while she is still alive, her [attorney] should try to honor that philosophy if at all possible.

Under the enduring power, the wife authorised the attorneys ‘[t]o take all action with respect to my property and affairs as I could fully and with the same effect as if I were competent and acting on my own behalf’. As the wife, while competent, ‘chose to spend a substantial portion of [her] wealth to enrich their community and provide for [her] family’, the court ruled that the belief that ‘the best way in which to honor her wishes, uphold her values, and act for her was to continue to manage her funds with these same goals in mind’ was appropriate.236 Indeed, in the view of the court, in so doing the attorneys were, in fact, acting for the wife’s benefit. [page 225]

Accountability requirements 8.62 Although courts speak of agents, and attorneys, being obliged to account to their principals, the general law remains relatively vague on detail. At a basic level accountability presupposes the maintenance of records of transactions, with sufficient particulars in readily accessible form, that afford the principal, or a third party in the principal’s stead, the ability to ascertain with clarity the dealings in which the attorney has engaged.237 At least at general law, there is no need, however, for the accounts and records to fulfil the trustee standard.238 Statute reflects, and on occasion extends, general law obligations in most jurisdictions, requiring that attorneys maintain accurate records and accounts of all dealings and transactions made under the power.239 8.63 Excepting the Northern Territory legislation, which requires the accounts be furnished ‘to the donor at the donor’s request and expense’,240 the statutes are silent as to when and to whom the records and accounts are to be supplied. It stands to reason, though, that these must be directed to the principal or, in the event of the principal’s incapacity, to person(s) prescribed by law,241 pursuant to a request by the principal or those persons. Certainly this is the way the general law approaches the point.242 It also stands to reason that, in the usual case, the cost of providing and maintaining the records should be recoverable, whether directly or by way of indemnity,243 from the principal.

Court or tribunal power to order account 8.64 In most jurisdictions statute vests in the court or relevant tribunal the power to order attorneys, usually those under an enduring power, to produce accounts to the [page 226] court (and other interested persons), to have those accounts audited, and to furnish the audit report.244

Duty to act unanimously if appointment is joint 8.65 Where a principal appoints more than one attorney under a power to exercise certain authority on the principal’s behalf, it must be determined whether the attorneys, in exercising that authority, must act together or can act separately. This in turn depends on whether the appointment is intended to be joint, or rather joint and several, an issue addressed in Chapter 4.245 In the case of a joint appointment, the co-attorneys can only act on that authority jointly. Like trustees, their actions must be unanimous.246 Where a joint and several appointment is intended, one attorney can act separately from another, and nonetheless bind the principal.247

Duty not to delegate Non-delegation rule generally 8.66 Contracts of agency are subject to the maxim delegatus non potest delegare (a delegated power may not be delegated). What this dictates is that an agent cannot delegate his or her authority, and so cannot establish a relationship of principal and agent between his or her own principal and a third person.248 The rule is based on the assumption that a principal who, by granting an agent authority, reposes trust, confidence or discretionary power in the agent, countenances that the agent will, in exercising that authority, not delegate it to another person. The very same notion underscores why trustees are likewise subject to a non-delegation duty.249

Application to powers of attorney 8.67 Being a species of agency, the same principles apply to the exercise of authority under a power of attorney.250 To this end, a New Zealand judge has said that ‘there is no reason in principle why the general principles governing the exercise of authority by a nominee of the agent are not equally applicable where the agent derives his authority under a power of attorney’.251 In most powers of attorney — which operate within a family nucleus, or otherwise within a close business association — the personal

[page 227] element in the exercise of authority lies at the core of the appointment, making the justification for non-delegation rule the more compelling.252 8.68 The foregoing does not place an absolute bar on delegation. Delegation may be legitimate in three main circumstances. First, a principal may, in drafting a power of attorney, provide for its delegation, in whole or in part, by the attorney to another.253 This option is apparently not available in Tasmania as regards enduring powers, given that statute declares an attorney under an enduring power as not competent to appoint another person to perform any functions or exercise any powers in his or her capacity as such.254 Second, the rationale for the rule against delegation does not apply where what is delegated does not involve the exercise of trust, confidence or discretionary power in the delegate, but is a mere ‘ministerial’ act or function.255 Third, statute may provide for broader avenues for delegation, and in the Australian Capital Territory practically ousts the non-delegation rule.256 8.69 The legal effect of a valid delegation, as between attorney and principal, and as between sub-attorney and principal, is determined on the same general principles as apply in agency law.257

Distinction between delegation and appointment of an agent 8.70 The legal rule is directed to proscribing delegation; it is not directed at precluding an attorney from engaging the services of an agent if this represents what a prudent business person in the position of the attorney would do in the management of his or her own affairs.258 It follows that the distinction between a delegate and an agent must be understood. An agent, where properly appointed, is engaged to provide to the attorney advice that may be taken into account in the exercise of the attorney’s power. An agent does not exercise the attorney’s power, but merely supplies information aimed at assisting the attorney in personally making an informed exercise of that power. A delegate, on the other hand, is a person who is engaged to

actually exercise an attorney’s power or authority, and that is what the nondelegation rule prohibits. [page 228] For example, in MacDonald v Taubner259 Graesser J held that the attorney had not delegated his functions to a valuer (G) to determine the value of the shares the subject of the power, but had contractually appointed G as an agent for this purpose. As the attorney had appointed an agent with experience in valuation, and who had had a long association with the principal and with the business represented by the shares, the attorney was held to have acted prudently in making the appointment.260 8.71 However, merely because an agent is properly engaged to assist in the process of exercising the attorney’s decision-making function does not mean that the law allows the attorney to blindly accept whatever the agent advises. The attorney must turn his or her mind to the exercise of the power conferred by the principal. He must ensure, to the extent possible in view of his or her knowledge and experience, that the advice supplied by the agent aligns with the task requested, and that the exercise of that power is the attorney’s own decision, albeit informed by the agent’s advice. In MacDonald v Taubner261 Graesser J held that the attorney had failed to ensure that the valuation was performed in accordance with his subjective expectations; he had simply accepted G’s advice without any independent thought, analysis or explanation, and in so doing had failed to exercise the requisite standard of care.262

Delegation of ministerial acts 8.72 As foreshadowed above, the proscription against delegation does not apply where what is the subject of delegation is no more than a ‘ministerial’ act. Emphasis on the absence of confidence and discretion in the performance of ministerial acts is what takes acts outside the rule, or as otherwise as within implied authority from the principal.263 The issue in Parkin v Williams264 was whether, where an attorney for the vendor instructed an auctioneer to sign a contract for the sale of the vendor’s property, the

delegation of signature had been impliedly authorised by the power of attorney. Richardson J, in delivering the judgment of the New Zealand Court of Appeal, could perceive no reason in principle why an attorney’s delegation of the execution of a memorandum satisfying statutory formality requirements, ‘which can only be characterised as ministerial when all the terms of the contract have been agreed … should not be regarded as within the implied authority conferred under the power of attorney’.265 What made the signing a ‘ministerial’ one was that it involved no discretion or confidence, making whether it was done by the attorney, or by a nominee, ‘a matter of perfect indifference’ to the principal.266 His Honour expressed the relevant law in the following terms:267 We do not read any of the cases … as going so far as to preclude the agent from having the purely ministerial act of signing the memorandum completed by a nominee. No exercise of judgment is required at all. Certainly if there is an element of discretion or confidence involved the signing will not be a mechanical or ministerial act and

[page 229] other considerations will apply. But if the skill and discretion reposed in the agent has been exercised it is immaterial who performs the necessary mechanical acts needed to implement the agent’s decision.

Impact of statute — Australian Capital Territory 8.73 In those jurisdictions that make no statutory provision relating to delegation, the general law as discussed above continues to apply. In the Australian Capital Territory, however, statute entitles an attorney under a general power of attorney268 to authorise someone else — as a substitute decision-maker, delegate or sub-attorney — to exercise all or any of the attorney’s powers, even without an express power to do so in the power of attorney instrument.269 This is a complete reversal of the general law position. But it does not extend to enduring powers of attorney once the principal has impaired decision-making ability270 unless it is pursuant to an express authorisation in the relevant instrument (in which case the attorney can authorise a person to exercise the attorney’s powers if that person could be appointed as an attorney under an enduring power271 and was known to the principal when the principal had decision-making capacity).272 A person

authorised under the foregoing to exercise an attorney’s powers is taken to be the attorney for the legislation.273

Duty of confidentiality 8.74 The law superimposes no overarching duty of confidentiality by attorney to principal. A duty of confidentiality, if it is to apply, must be sourced from the terms of the power of attorney itself, from some additional contractual obligation, from the equitable doctrine of confidential information or, in the case of some attorneys who act in a professional capacity (lawyers being a typical example),274 requirements imposed on those persons at law or professionally. 8.75 There is nothing to preclude the instrument creating a power of attorney, or a document allied to it, from imposing on the attorney a duty of confidentiality. Aside from where this may have contractual force, the obligation is likely to be enforced in equity, which places on a confidant a personal obligation to preserve the confidentiality of confidential information.275 Equity may serve the same function outside of express provision, because equity is concerned more with intention than form. It can infer, for instance, that information a principal communicated to his or her attorney is intended by the principal to be, and should have been understood by the attorney as being, confidential. This may certainly be the case regarding non-public personal (or family) or business information that comes to the attorney’s knowledge as a result of his or her role as attorney. Fiduciary law overlaps in this regard, and prohibits the attorney using, for his or her own benefit, confidential information secured in the course of attorneyship unless the principal has authorised the attorney to do so.276 [page 230] 8.76 In the territories and Queensland the statutory ‘principles’ applicable to an attorney’s exercise of authority pursuant to an enduring power (in the Northern Territory, an advance personal plan),277 in circumstances where a principal lacks mental capacity,278 emphasise that the principal’s right to confidentiality must be respected.279 A corresponding duty of confidentiality

is found in the forthcoming Vicotrian legislation.280 But only the Queensland Act gives substance to a duty of confidentiality, by making it an offence for an attorney to use confidential information gained because of being an attorney, or because of an opportunity given by being an attorney, unless the person has a reasonable excuse.281 ‘Confidential information’, for this purpose, includes information about a person’s affairs, but not information in the public domain (unless its further disclosure is prohibited by law), information that could not reasonably be expected to result in the identification of the person to whom it relates, or information about a guardianship proceeding.282 Despite the foregoing, the Queensland legislation allows an attorney to disclose confidential information that relates only to a particular person to the particular person.283 It also allows an attorney to use284 confidential information for the purposes of the Act if that information is gained because of being an attorney, or because of an opportunity given by being an attorney.285 It may also be used in any of the following circumstances:286 if authorised or required under a regulation or another law; for a proceeding arising out of or in connection with the Act; if authorised by the person to whom the information relates; if authorised by the Supreme Court or the Queensland Civil and Administrative Tribunal in the interests of justice; if necessary to prevent a serious risk to a person’s life, health or safety; for the purpose of obtaining legal or financial advice; if reasonably necessary to obtain counselling, advice or other treatment; in reporting a suspected offence to a police officer, or assisting a police officer in the investigation of a suspected offence; or assisting the adult guardian, the public advocate or a public service officer in the performance of functions under the Act or the Guardianship and Administration Act 2000 (Qld). [page 231]

Undue influence by attorney 8.77 It is possible for the creation of the principal-attorney relationship to be vitiated by undue influence by the attorney over the principal, a prospect discussed elsewhere.287 Within an existing principal-attorney relationship, there is no presumption as a matter of law that the relationship is one of influence, such as to cast doubt over dealings between attorney and principal outside of those already addressed by way of fiduciary law. This follows from the fact that agency law knows no presumption as a matter of law between agent and principal.288 8.78 The foregoing, though, does not preclude a presumption of undue influence being raised on the facts as between attorney and principal. As in the case of agency, where the relative position of attorney and principal gives rise to, respectively, dominion and dependence, grounds may exist to characterise the relationship as capable of raising that presumption. This may be especially so if the power of attorney is entered into precisely because of the principal’s relative inequality to the attorney, in which case transactions effected between attorney and principal may be presumed to stem from undue influence. Of course, the presumption can be rebutted by evidence that the dealing in question represents the free and independent exercise of the principal’s will. Yet the latter is difficult to establish once, in the case of an enduring power of attorney, the principal has lost mental capacity.289 8.79 The issue is addressed by statute only in Queensland, where the Powers of Attorney Act 1998 s 87 states that a transaction between a principal and an attorney under an enduring power (or a relation, business associate290 or close friend of the attorney) gives rise to a presumption that the principal was induced to enter the transaction by the attorney’s undue influence. While the section, it has been observed, ‘operates to create a statutory category of presumptive relationship of undue influence in the case of a gift by a principal to an attorney’, the consequence of the presumption, including scope for relevant equitable remedies, ‘is left to the operation of the rules of equity’.291 That s 87 aimed to go beyond the general law appears from the following remarks by McMurdo J in Smith v Glegg:292 Absent s 87, a presumption of influence would not arise in the context of every transaction between a principal and an attorney, or between a principal and a relation, business associate or close friend of the attorney. Applying only the principles of equity, many of those transactions would not give rise to the presumption, because they would not fall within a recognised

category of presumed influence or involve circumstances in which a relation of influence could be proved. The interpretation for which the plaintiff contends would undoubtedly impose the presumption in many cases where it would not otherwise arise. But that is the apparent purpose of s 87. Because of a perceived risk of [page 232] undue influence in the context of principal and attorney, the evident intent is to provide strong protection against the risk of some misconduct by an attorney, by requiring the recipient in all cases to justify the transaction.

His Honour added that, on its face, s 87 is engaged simply from the fact that the transaction is one between a principal and an attorney or a related person, there being no expressed limitation that the transaction involve an exercise of the attorney’s power. Accordingly, if its elements are satisfied, the section applies ‘whether or not the transaction was effected by the exercise of the powers under the enduring power of attorney’.293 On the facts, McMurdo J found that not only had the presumption of undue influence been raised under s 87, even apart from the statute the principal had proved a relation of influence at law, arising out of her complete dependence on her attorney for domestic and health care, financial assistance and company. His Honour saw ‘a very high level of dependence and trust in this relationship’, which in turn made the case for a presumption of influence ‘a compelling one’.294 The same outcome ensued a decade later in Baker v Affoo,295 where the attorney, a neighbour and friend of the principal who provided ongoing care and support to the principal, received from the principal a gift of the latter’s farm. The principal, who had recently become widowed and lacked emotional support beyond the attorney, made the gift in order to preclude a family provision claim against his estate, and in the anticipation of the attorney’s continuing support. A presumption of undue influence by attorney over principal was raised under s 87, Jackson J found, reasoning as follows:296 In those circumstances, for [the attorney] to take a gift of a large amount from [the principal] was on its face unconscientious because [the attorney] was in a position where great confidence was reposed in him by [the principal]. [The attorney], with the benefit of legal advice as well as financial advice, ought to have realised that it was necessary to establish that [the principal’s] decision was made with the benefit of independent advice. That [the principal] was doing it apparently without telling his children made that even more important.

His Honour was unprepared to find that the attorney had discharged the onus of rebutting the presumption of undue influence.297

Duty to consult? 8.80 As a general principle, an attorney owes no duty to the principal to consult the principal, or other persons, in the exercise of the attorney’s authority under the power. Provided that the attorney acts within the scope of the power, and not otherwise in fiduciary breach298 or in a fashion that fails to meet the applicable standard of care,299 there are few grounds, if any, to substantiate a challenge to the exercise of that authority. 8.81 The foregoing does not preclude the instrument creating the power of attorney imposing on the attorney an obligation to consult the principal, or a third party, before exercising one or more aspects of the authority under the power. In this event, the attorney must follow that instruction. In some instances, especially where the [page 233] exercise of authority under a power is outside of the attorney’s expertise, or must be informed by specialist advice, the relevant standard of care may dictate that an attorney’s failure to consult is negligent. 8.82 More generally, it has been argued that, in the context of enduring powers of attorney, the lack of any effective oversight vis-à-vis the attorney’s exercise of authority upon the onset of mental incapacity in the principal — with the consequent greater autonomy, stemming from an unsupervised discretion,300 in the attorney — makes a case for a duty to consult the principal compelling. The lack of a duty to consult in this event is usually explained on the ground that the principal is mentally incapable of expressing his or her wishes. Yet this is not always so. A person suffering the onset of incapacity may nonetheless express his or her desires regarding the exercise of the power. Capacity, after all, is not ‘all or nothing’; there are clearly issues of degree.301 Accordingly, a commentator has suggested the following:302 To continue to allow [attorneys] to act without communicating with principals is to ignore [attorneys’] basic duty of obedience. Moreover, the benefits of such communication far outweigh any additional burden it may place on the parties. Communication clarifies the [attorney’s] role, discourages the [attorney] from acting in a manner inconsistent with the principal’s wishes and values, reduces the extent to which the relationship can be expected to

disempower the principal, and increases the chance of discerning misuse by putting the principal in a better position to monitor the relationship for exploitation.

The same commentator urges that a duty to consult be imposed for ‘fundamental transactions’ — a transaction ‘of such importance that it can significantly alter the principal’s lifestyle’303 — in an attempt to curb overreaching and allow elders greater control over their own lives and, more generally, ‘break down ageist notions that elders must cede control over themselves to others’.304 8.83 In a handful of American states, statute requires attorneys to keep in contact or communicate with the principal once incapacity has commenced.305 And legislation in New Zealand requires an attorney, as far as is practicable, to consult the principal in this context.306 It provides that the attorney may follow any advice or directive from the principal, and is not liable for anything done or omitted in following that advice or directive, unless done or omitted in bad faith or without reasonable care.307 [page 234] 8.84 An alternative approach is found in the Advance Personal Planning Act 2013 (NT) vis-à-vis decision-makers under advance personal plans.308 Against a backdrop of a duty to exercise his or her authority ‘in the way the decision-maker reasonably believes the [principal] would have done in the circumstances’,309 the Act requires a decision-maker to:310 as far as is practicable, seek the principal’s current views and wishes about the matter; take into account the principal’s current and previously stated views and wishes about the matter; and take into account the decision-maker’s personal knowledge of the principal and his or her views and wishes about the particular matter and matters generally. It also envisages that a decision-maker may consult other persons whom he or she believes may have information relevant to determining what the principal would have done in the circumstances.311 If the decision-maker can identify what the principal would have done in the circumstances, he or she is

obliged to exercise the authority in that fashion even if doing so may not be in the principal’s best interests.312 Directed ostensibly to the same objective, the impending Powers of Attorney Act 2014 (Vic) requires an attorney under an enduring power, in making decisions at a time when the principal lacks capacity, to do so ‘in a way that is as least restrictive of the principal’s ability to decide and act as is possible in the circumstances’ and to ensure that the principal is ‘given practicable and appropriate support’ to enable him or her to participate in decisions ‘as much as possible in the circumstances’.313 The Act also requires the attorney, in exercising decision making on an incapable principal’s behalf, to ‘give all practicable and appropriate effect to the principal’s wishes’, ‘take any steps that are reasonably available to encourage the principal to participate in decision making’, and act in a way that promotes the principal’s personal and social wellbeing.314 8.85 Of course, whatever the test or duty imposed, where the principal suffers severe incapacity, and as a result expresses wishes that are patently inconsistent with his or her own interests, or that are otherwise nonsensical, any duty to consult, and obey, these wishes, is diluted.

Rights of attorneys 8.86 The case law is scant on attorneys’ rights against their principals. Judicial remarks such as that ‘[a]n attorney cannot question the actions of its principal’315 convey the impression that the relationship between principal and attorney goes the one way. After all, the relationship is not one ordinarily punctuated by [page 235] mutuality or agreement in a contractual sense,316 and the authority vested in the attorney emanates wholly from the principal, which the principal can, in the usual case, revoke at any time.317 Attorneys are not, however, completely deprived of rights against their principals; in various circumstances attorneys

may exercise rights to remuneration, rights to an indemnity or lien, or rights pursuant to statute. Each is mentioned below.

Right to remuneration sourced in contract 8.87 The terms of a power of attorney may be a source of those rights. Perhaps the most obvious right sourced in this way is a right to remuneration or commission. In this event, the amount of remuneration, and the events that trigger any such entitlement, are determined on a proper construction of the power itself. A clear expression of a principal’s intention that an attorney be remunerated will be given effect, and not read down. Where an attorney is remunerated, the power of attorney is likely to exhibit the elements of a contract, and therefore the entitlement to remuneration is one enforceable in contract. If the power does not prescribe its quantum, or the manner in which it is to be calculated, the amount is quantified on a quantum meruit basis.318 8.88 The foregoing flows from the basic principles applicable to the remuneration of agents319 and, as an attorney is a particular species of agent,320 there is sense in so applying them. Having said that, many attorneys act gratuitously, especially within the family environment. In the business environment, an attorney may be on the principal’s payroll, but it is unusual for the exercise of his or her functions as attorney to be separately remunerated. This explains the dearth of case law on attorneys’ remuneration. Given the context in which many powers of attorney operate, there are arguably less compelling grounds to infer or imply an intention to remunerate than in the case of ordinary agencies.321 That is not to deny any scope for inference or implication, and in the case of a professional adviser (typically a lawyer)322 acting as attorney, this may ensue.323 But at general law in each case the claim relies on contract, Blow J in Lincolne v Williams324 unearthing no reported cases ‘in which courts have held that powers of attorney can contain implied terms imposing noncontractual obligations on their [principals]’. What this meant, on the facts, was that an attorney’s claim for remuneration under an enduring power, devoid of contract, could not be substantiated.325 [page 236]

In the Northern Territory the point is addressed by statute vis-à-vis remuneration for what are described as ‘professional decision-makers’326 under advance personal plans.327 Such a person is entitled to reasonable remuneration from the principal as authorised in the relevant advance personal plan or otherwise as approved by the local court by order.328 But the court must not approve payment of remuneration contrary to an express provision in the plan,329 although this does not affect any right of the Public Trustee or a trustee company to remuneration under another statute.330 8.89 Even a contractual entitlement to remuneration may, however, be trumped by misconduct by the attorney. It is sensible to assume that, in line with cases of agents generally,331 an attorney’s breach of fiduciary duty or dishonesty can prejudice a claim to remuneration.

Right to indemnity 8.90 The general law recognises that an agent is entitled to an indemnity from his or her principal for expenses and liabilities properly incurred in carrying out the terms of the agency.332 This right, in contractual agencies, ‘derives from a term of the contract that will be implied if not clearly excluded’.333 In other words, the implication is effected in law; a term that entitles the agent to an indemnity is presumed to apply because of the nature of an agency contract. In cases where a power of attorney is constituted by way of contract, the same right vests in the attorney.334 If the agency relationship is not contractual — commonly the case for powers of attorney335 —the right is arguably not to an indemnity (unless the agent is entitled in equity to an indemnity, say, where the agent is also a trustee) but to reimbursement to the extent that the payment has conferred a benefit on the principal.336 Whatever may be the correct approach — whether it is a right of indemnity or a right to reimbursement — it appears to be accepted that an attorney has a right of this general kind.337 The rationale for the right is compelling; to downgrade its status where a contractual link is absent only because the attorney is not paid seems to illegitimately link the availability of a right to remuneration to the conceptually distinct right to indemnity.

[page 237] 8.91 Of course, the foregoing does not mean that any expenditure incurred by an attorney on behalf of the principal is properly the subject of indemnity or reimbursement. By analogy to the law applying to agents (generally) and trustees, the expenditure must not only be authorised by the power and properly incurred in the conduct of the attorneyship, it must also be reasonable in amount given the circumstances.338

Right to lien 8.92 Where an attorney has an entitlement to remuneration or an indemnity from the principal, and that right has yet to be satisfied by the principal, the attorney has a right of lien, recognised by the general law, as security vis-àvis the principal for the fulfilment of that entitlement. The lien is exercisable over property (which includes choses in action represented by documents, such as share certificates or cheques, and possibly even money)339 of the principal of which the attorney has secured lawful possession in the course of the attorneyship. Because it is limited to property secured in the course of the attorneyship, it is a ‘particular lien’. A ‘general lien’, on the other hand, could extend to any property of the principal lawfully in the attorney’s possession. The latter could only surface in the context of attorneyship in the event that the attorneyship forms part of a larger relationship recognised by law to entitle the person whose function includes acting as attorney to a general lien. The most likely example is a solicitor, whom the law recognises to be entitled to a general lien.340 8.93 The above, again, stems entirely from an attorney being a form of agent, and is premised on the rationale that has led the law to entitle agents to liens over their principals’ property being one equally applicable to the specific manifestation of agency that is a power of attorney.341

Rights conferred by statute 8.94

It is possible for statute to be a source of rights of attorneys against

their principals. Yet the powers of attorney legislation, though it imposes duties on attorneys, vests little in the way of rights in them, at least not vis-àvis their principals. The legislation does, however, prescribe certain rights exercisable other than against their principals, but to assist attorneys in the proper conduct of their duties under the power. For instance, it is common for the legislation to entitle attorneys to seek the opinion or directions of a relevant tribunal or court in the exercise of their authority.342 In the territories, Queensland and Tasmania, moreover, attorneys under an enduring [page 238] power (in the Northern Territory, under an advance personal plan)343 are, once the principal is incapable, statutorily conferred the right to retrieve all the information to which the principal would have been entitled had the principal not been incapable.344 This right is given effect by imposing on a person who has custody or control of that information, a duty to disclose it to the attorney on request.345 8.95 Even these provisions, however, arguably do not extend so far as to entitle an attorney to access the principal’s will. And the general law confers no such entitlement, underscored (it seems) by the notion that an attorney cannot make, revoke or amend the principal’s will.346 Yet there are legitimate reasons why an attorney under an enduring power may wish to know the content of the principal’s will, chiefly in order to ensure that the principal’s estate is managed consistently with his or her intended scheme of testamentary disposition. Knowledge of the latter may be futile in preventing what would otherwise be an ademption,347 where there is, say, a choice of assets to be sold to fund the principal’s care, or specific gifts of sentimental items. The attorney could then take reasonable steps to ensure that these items are retained. The issue is of potential significance for lawyers who have custody of client wills and thus owe client confidentiality to this end. To address these matters, the Victorian Law Reform Commission has recommended amending guardianship legislation to entitle a person acting under an enduring power of attorney to apply to the Victorian Civil and Administrative Tribunal for a full or redacted copy of a will made by the principal who lacks testamentary capacity.348 It may, in any case, be that

pursuant to giving directions, the relevant tribunal is empowered to order the production of the will.349 An order by a tribunal serves, within its terms, to oust any client confidentiality vis-à-vis the will for the limited purpose of the application. The issue has been addressed more directly by statute in Tasmania, with effect on 1 January 2014, by vesting in an attorney under an enduring power, whose principal has become mentally incapable, a right to obtain, from a person who has possession of a will of the donor a copy of the will,350 subject to any contrary intention, or express limitation, in the power itself.351 It directs a person with possession of the will to acceded to the request, or suffer a penalty.352 [page 239]

1.

See 8.3–8.86.

2.

See 8.87–8.95.

3.

See 2.2–2.7.

4.

Cf Gray-Grzeszkiewicz v Gray-Grzeszkiewicz, [2000] ACTSC 95; BC200006430 (where Connolly M ruled that an attorney who has illegitimately used a power of attorney to pay money for his or her own benefit was liable to the principal to repay the amount in question as a debt; it is unclear whether or not this amounted to a debt in a contractual sense, given that the event in question constituted a fiduciary breach).

5.

As to irrevocable authorities see 1.30–1.34, 11.7–11.9.

6.

See Dal Pont, Agency, [10.3], Ch 11.

7.

See 8.31–8.50.

8.

See, for example, Elford v Elford [1922] SCR 125 (where a husband who exceeded the scope of his authority under a power of attorney to transfer his wife’s property to himself, it was held that the wife was ‘entitled to have the husband declared trustee for her’: at 128 per Duff J); Imperial Bank of Canada v Begley [1936] 2 All ER 367 at 371 per Lord Maugham (PC) (who held that an attorney, in signing a cheque in his own favour on the authority of the power of attorney, became a constructive trustee of the sum in question); Watson v Watson [2002] NSWSC 919; BC200205921 at [52] per Berecry AM (discussed at 8.39).

9.

As to the doctrine of fraud on a power generally see G Thomas, Thomas on Powers, 2nd ed, OUP, Oxford, 2012, Ch 9; Dal Pont, Equity & Trusts, [8.50]–[8.85].

10. See, for example, Elford v Elford [1922] SCR 125 (where, as regards a husband who exceeded the scope of his authority under a power of attorney to transfer his wife’s property to himself, it was held that ‘[a]ny attempt to acquire a title by such a use of the authority vested in him would be a

fraud upon the power’: at 128 per Duff J; see also at 130 per Anglin J, with whom Davies CJ concurred). 11. (1858) Swab 382 at 400; 166 ER 1174 at 1199. 12. Williams v Turner [2009] 1 Qd R 296; [2008] QSC 327; BC200811148 at [23] per Wilson J. See, for example, Blake v Lane (1876) 2 VLR(L) 54 at 57 per Fellows J (who held that ‘where a lease is executed under a power [of attorney], and contains a covenant not within the power, the lease is altogether void, and not the covenant only’). 13. Brown v Laird (1930) 291 P 352 at 353 (Or). 14. See 9.23–9.33. 15. As to the statutorily prescribed standard of care see 8.25, 8.26. 16. Powers of Attorney Act 1998 (Qld) s 66(2) (which makes it explicit that this is in addition to any other liability the attorney may incur); Powers of Attorney and Agency Act 1984 (SA) s 7; Powers of Attorney Act 2000 (Tas) s 32(1); Guardianship and Administration Act 1990 (WA) s 107(1)(a). 17. Powers of Attorney Act 1998 (Qld) s 106(7). 18. Powers of Attorney Act 1998 (Qld) s 106(7). 19. Powers of Attorney Act 2006 (ACT) s 50(1); Powers of Attorney Act 1998 (Qld) s 106(1). The jurisdiction applies whether or not the attorney is convicted of an offence in relation to that failure: Powers of Attorney Act 2006 (ACT) s 50(2); Powers of Attorney Act 1998 (Qld) s 106(2). 20. Powers of Attorney Act 2014 (Vic) s 77 (which extends the jurisdiction to the Victorian Civil and Administrative Tribunal). 21. [2007] 2 Qd R 323; [2006] QSC 378; BC200610380. 22. The statutory proscription is found in the Powers of Attorney Act 1998 (Qld) s 73, as to which see 8.45–8.47. 23. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [12]–[16]. 24. Powers of Attorney Act 2006 (ACT) s 50(3), 50(4); Powers of Attorney Act 1998 (Qld) s 106(3), 106(4); Powers of Attorney Act 2014 (Vic) s 79(1) (not yet commenced). 25. Powers of Attorney Act 2006 (ACT) s 50(5); Powers of Attorney Act 1998 (Qld) s 106(5); Powers of Attorney Act 2014 (Vic) s 79(2) (not yet commenced). See, for example, Moylan v Rickard [2010] QSC 327; BC201010256 (extension of time granted in view of the lack of information in the applicants, the time needed to consider the information once it was supplied (in the Christmas vacation period) and that the applicants had not been guilty of undue delay in making enquiries and ultimately in instituting proceedings for relief: at [115] per Peter Lyons J); Kebbell v Reynolds [2012] QSC 88; BC201201882 (extension of time granted where the respondent attorneys delayed in providing a copy of the power of attorney to the applicant). 26. Powers of Attorney Act 2006 (ACT) s 51; Powers of Attorney Act 1998 (Qld) s 106(6). No equivalent provision is made by the Powers of Attorney Act 2014 (Vic). 27. Advance Personal Planning Act 2013 (NT) s 78. As to advance personal plans see 1.44. 28. Advance Personal Planning Act 2013 (NT) s 83(2). The standard of proof is the balance of probabilities: s 83(4). 29. Advance Personal Planning Act 2013 (NT) s 83(5). 30. In the context of trustees see Dal Pont, Equity & Trusts, [24.140]–[24.155]; G E Dal Pont, ‘The Exclusion of Liability for Trustee Fraud’ (1998) 6 APLJ 41.

31. As to fiduciary breaches see 8.31–8.37. 32. As to companies see Corporations Act 2001 (Cth) s 1318. As to trusts see Trustee Act 1925 (ACT) s 85; Trustee Act 1925 (NSW) s 85; Trustee Act 1893 (NT) s 49A; Trusts Act 1973 (Qld) s 76; Trustee Act 1936 (SA) s 56; Trustee Act 1898 (Tas) s 50; Trustee Act 1958 (Vic) s 67; Trustees Act 1962 (WA) s 75. Similar provision is made vis-à-vis enduring powers of attorney in two Canadian provinces (Enduring Powers of Attorney Act 1990 (Nfld & Lab) s 6; Substitute Decisions Act 1992 (Ont) s 33) and proposed in another (see NSLRC (DP), pp 139–40). 33. In Queensland ‘attorney’ includes an attorney under a power of attorney made otherwise than under the Act: Powers of Attorney Act 1998 (Qld) s 105(2)(c). 34. Powers of Attorney Act 2006 (ACT) s 52(1), 52(2); Powers of Attorney Act 1998 (Qld) s 105(1); Powers of Attorney Act 2014 (Vic) s 74 (confined to enduring powers) (not yet commenced). 35. Powers of Attorney Act 2006 (ACT) s 52(3). As to the ‘general principles’ see 8.26. 36. In the companies context see R P Austin and I M Ramsay, Ford’s Principles of Corporations Law, 15th ed, LexisNexis Butterworths, Australia, 2013, [8.420]. In the trusts context see Dal Pont, Equity & Trusts, [24.200]–[24.215]. 37. [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [49]. 38. See 8.9. 39. The proscription on ‘conflict transactions’ is found in the Powers of Attorney Act 1998 (Qld) s 73, as to which see 8.45–8.47. 40. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [27]. 41. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [28], referring to Re Second East Dulwich 145th Starr-Bowkett Building Society (1899) 68 LJ Ch 196 at 197–8 per Kekewich J (with reference to legislation excusing trustees for breach of duty where they acted ‘honestly and reasonably’). 42. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [29]. 43. See, for example, Moylan v Rickard [2010] QSC 327; BC201010256 (where Peter Lyons J found that the respondents, who in acting under an enduring power of attorney while the deceased was suffering from Alzheimer’s Disease sold the deceased’s house and gifted the proceeds to themselves, had not acted ‘honestly’, remarking that ‘the respondents could not have honestly considered the distributions to have been in the interests of the deceased’: at [79]; see also at [89]– [91]). 44. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [31]. 45. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [32]. 46. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [41], [42]. 47. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [50]. 48. Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 at [52]. 49. See S Bronnit and B McSherry, Principles of Criminal Law, 3rd ed, Lawbook Co, Australia, 2010, Ch 12. 50. See Dal Pont, Agency, Ch 14. 51. Powers of Attorney Act 2006 (ACT) s 90 (see 3.40); Powers of Attorney Act 2003 (NSW) ss 44 (see 4.48), 49 (see 12.11); Powers of Attorney Act 1980 (NT) s 12 (see 4.48); Advance Personal

Planning Act 2013 (NT) ss 76–79; Powers of Attorney Act 1998 (Qld) ss 26, 61 (see 3.40); Powers of Attorney and Agency Act 1984 (SA) s 8 (see 8.62); Powers of Attorney Act 2000 (Tas) ss 35(7) (see 10.22), 36, 48(3); Powers of Attorney Act 2014 (Vic) s 135 (not yet commenced); Guardianship and Administration Act 1990 (WA) s 107. 52. R v Holt (1983) 12 A Crim R 1 at 14 per Tadgell J (CCA(Vic)). 53. See 1.25. 54. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [372] per Graesser J (QB) (‘An attorney acting for a person without capacity is expected to take greater care for the benefit of the donor than when the donor is capable of giving some guidance or input’). 55. C L Dessin, ‘Acting as Agent under a Financial Durable Power of Attorney: An Unscripted Role’ (1996) 75 Nebraska L Rev 574 at 607. 56. As to the revocation of authority by the principal see 11.10–11.20. 57. Hart v John Frame, Son, and Co (1839) 6 Cl & F 193 at 209–11; 7 ER 670 at 676–7 per the Lord Chancellor; Kelly v Rounsevell (1885) 19 SALR 89 at 92 per Way CJ. Cf MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [256] per Graesser J (QB) (who conceded that the word ‘negligence’ does not appear to be a specific consideration in the various pronouncements on the duties of an attorney; instead ‘prudence, discretion and intelligence are used as guide-posts’). 58. See Dal Pont, Agency, [11.23]–[11.25]. 59. See Dal Pont, Agency, [11.26]. 60. Estate of Littlejohn (2005) 698 NW 2d 923 at 925 (ND) (‘Because a power of attorney creates an agency relationship, agency principles are applicable in determining the … duties of the attorney’). 61. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [372] per Graesser J (QB); Alcock, pp 149– 52 (showing that the variance in standard of care between paid and unpaid attorneys has been well known to the general law at least since the early 1700s); Aldridge, p 76. Cf Powers of Attorney Act 2006 (Man) s 19(2) (‘An attorney who does not receive compensation for acting as an attorney shall exercise the judgment and care that a person of prudence, discretion and intelligence would exercise in the conduct of his or her own affairs’), 19(3) (‘An attorney who receives compensation for acting as an attorney shall exercise the judgment and care that a person of prudence, discretion and intelligence in the business of managing the property of others is required to exercise’). 62. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [372] per Graesser J (QB). 63. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [251] per Graesser J (QB) (describing this as ‘settled law’), referring to Blair v Canada Trust Co (1986) 9 BCLR (2d) 43 (SC); Wagner v Van Cleeff (1991) 5 OR (3d) 477 (Div Ct); Re Ericksen Estate (2008) 98 Alta LR (4th) 161 (QB). As to the trustee’s standard of care generally see Dal Pont, Equity & Trusts, [22.20]. 64. As to what is meant by a ‘general power of attorney’ see 1.19. 65. As to enduring powers of attorney see 1.25–1.27. 66. This is not without prejudice to the significant distinctions between trusts and powers of attorney: see 2.11, 2.12. 67. See 6.25–6.69. 68. See Dal Pont, Equity & Trusts, [22.25]. 69. Here ‘attorney’ also includes all attorneys under a power of attorney made otherwise than under the Act: Powers of Attorney Act 1998 (Qld) s 65.

70. Powers of Attorney Act 1998 (Qld) s 67. 71. Powers of Attorney Act 1998 (Qld) s 66(1). In this context the term ‘honestly’ attracts the same meaning as in s 105 (relief against breach: see 8.13–8.18): Moylan v Rickard [2010] QSC 327; BC201010256 at [77]–[79], [89]–[91] per Peter Lyons J. 72. Powers of Attorney Act 1998 (Qld) s 71. 73. Guardianship and Administration Act 1990 (WA) s 107(1)(a). 74. Powers of Attorney and Agency Act 1984 (SA) s 7. 75. Powers of Attorney Act 2014 (Vic) s 63(1)(a), (b) (not yet commenced). 76. As to advance personal plans see 1.44. 77. Advance Personal Planning Act 2013 (NT) s 21(1)(d). 78. Advance Personal Planning Act 2013 (NT) s 31(1). 79. Powers of Attorney Act 2000 (Tas) s 32(1). Cf ALRC, pp 15–16 (which favoured a statutory list of the principal obligations of attorneys rather than duties aligned with trusteeship ‘modified by omitting some of the legislative requirements’, fearing that the difficulty of communicating the latter to laypersons ‘is too great’: p 16); WCLRA, p 28 (noting that ‘[t]he trust document which establishes the duties of the trustee automatically creates distance between the trustee and the settlor’ and that although ‘[s]ome of the duties of attorneys are trust-like … attorneys usually have a more personal relationship with the [principal]’). 80. Powers of Attorney Act 2000 (Tas) s 32(1A), inserted by the Powers of Attorney Amendment Act 2013 (Tas). The amendment adds that an exercise of a power under an enduring power of attorney is not to be taken to constitute a failure to protect the donor’s interests, and is to be taken to be in the donor’s best interests, if: (a) it is an exercise of a power that the donor would have been likely to make were he or she not subject to a mental incapacity; or (b) its exercise consists of providing for those persons who the donor would expect to provide for, were he or she not subject to a mental incapacity: s 32(1B). 81. Powers of Attorney Act 2006 (ACT) s 44 (‘comply to the maximum extent possible’); Powers of Attorney Act 1998 (Qld) s 76. The same, though recommended in Victoria (see VPLRC, pp 42 (recommendation 3), 174 (recommendation 49)), has not translated to the Powers of Attorney Act 2014 (Vic). 82. Powers of Attorney Act 2006 (ACT) Sch 1; Powers of Attorney Act 1998 (Qld) Sch 1. 83. See 1.36. 84. As to advance personal plans see 1.44. 85. Advance Personal Planning Act 2013 (NT) s 22(6A) (an inclusive list of relevant considerations being found in s 22(7)). 86. Advance Personal Planning Act 2013 (NT) s 22(4). This in turn involves the decision-maker, as far as is practicable, seeking the principal’s current views and wishes about the matter, and taking into account the principal’s current and previously stated views and wishes, coupled with the decisionmaker’s personal knowledge of the principal generally: s 22(5). 87. Advance Personal Planning Act 2013 (NT) s 23(2). In this event, the decision-maker must keep a written record of the grounds on which he or she formed this belief: s 23(3). 88. See 6.46, 6.47. 89. As to what amounts to a breach of fiduciary duty see 8.31–8.37.

90. See 8.24. 91. (2010) 21 Alta LR (5th) 59. 92. Bangay v Sowa (2003) 125 ACWS (3d) 706 at [3] per Veit J (QB(Alta)). 93. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [254]. 94. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [258]. 95. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [373]. This did not ultimately prevent a finding of a breach of duty by the attorney (albeit one that generated no liability for lack of causation), as he had failed to give due consideration to the advice of the person engaged to effect the valuation: see 8.71 . 96. (2007) 159 ACWS (3d) 312. 97. Gill J opined that ‘[t]he minimum steps required would have been to obtain a written valuation of the property from at least one realtor. The alleged verbal appraisal was inadequate’: Brown v Lefebvre (2007) 159 ACWS (3d) 312 at [51] (QB(Alta)). Damages were assessed against the attorney in the amount of $9,000, being the difference between the sale price and an estimate of the ‘minimum’ value of the house at the time of sale. 98. As to authority that cannot be conferred by power of attorney see 5.20–5.29. 99. The Margaret Mitchell (1858) Swab 382 at 400; 166 ER 1174 at 1199 per Dr Lushington. See also Apatu v Peach Prescott & Jamieson [1985] 1 NZLR 50 at 64 per Eichelbaum J (HC) (an attorney must ‘obey all lawful and reasonable instructions of his principal in relation to the manner in which the agent is to carry out his duties’); Dynayski v Grant [2004] NSWSC 1187; BC200408734 at [19] per Macready M (‘notwithstanding the width of the power of attorney, a donee has a duty and obligation to obey the instructions of the donor’). 100. Sutton v Sutton [2012] SASC 186; BC201208055 at [20] per Judge Burley. 101. This is explicit in the Advance Personal Planning Act 2013 (NT) s 21(1)(b)(i). In place of a requirement that an attorney obtain the consent of a specified third person to the exercise of authority, the principal may simply appoint the attorney and that third person as joint attorneys: see 4.51. 102. It is arguable that oral variations or amendments to powers of attorney are ineffective: see 5.44–5.46. 103. As to the revocation of a power of attorney by the principal see 11.10–11.20. 104. See Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405; BC9203940; Rouse v IOOF Australia Trustees Ltd (1999) 73 SASR 484; [1999] SASC 181; BC9902313; Breakspear v Ackland [2009] Ch 32; [2008] EWHC 220 (Ch). See further G E Dal Pont, ‘I Want Information! Beneficiaries’ Basic Right or Court Controlled Discretion?’ (2013) 32 U Tas L Rev 52 at 63–8. 105. Jones v Canavan [1972] 2 NSWLR 236 at 248 per Asprey JA. 106. Veljkovic v Vrybergen [1985] VR 419 at 423 per Marks J (‘if [the agent] does see the ambiguity and gambles on what was meant he or she might well be liable in negligence’). 107. See Dal Pont, Agency, [19.18]. 108. (2013) 16 BPR 31,203; [2013] NSWSC 91; BC201301047. 109. Hallani v Hallani (2013) 16 BPR 31,203; [2013] NSWSC 91; BC201301047 at [94]. 110. (1866) LR 2 Ch App 55 at 61. On fiduciary relations see generally Dal Pont, Equity & Trusts, Ch 4.

111. Rothschild v Brookman (1831) 1 Dow & Cl 188 at 197; 6 ER 699 at 702 per Lord Wynford. 112. Moss v Moss (No 2) (1900) 21 LR (NSW) Eq 253 at 258 per Simpson CJ; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 67; BC8400480 per Gibbs CJ; Bristol and West Building Society v Mothew [1996] 4 All ER 698 at 711–12 per Millett LJ. 113. Baillie v Charman (1992) 94 DLR (4th) 403 at 412 per Toy JA (CA(BC)). 114. See, for example, Grefeld v Grefeld [2010] FamCA 504; BC201050552 at [102] per Barry J (‘The effect of executing a power of attorney document is to create a fiduciary relationship between the parties’). 115. A point made in the context of powers of attorney by Venning J in Ganderton v Behre [2005] NZHC 61 at [73]. As to the point more generally see Dal Pont, Equity & Trusts, [4.10]–[4.45]. 116. For example, the duty of impartiality, the duty to invest and the duty to pay correct beneficiaries. 117. See 2.10. 118. Schock v Nash (1998) 732 A 2d 217 at 225 (Del) (emphasis supplied). 119. This in turn explains why some judges characterise relationships giving rise to fiduciary duties as ‘confidential relationships’. This is not directed chiefly at the communication of confidential information (although it may include this), but at a relationship where ‘one … relies upon and trusts another in regard to handling property and business affairs’: Godsy v Godsy (1973) 504 SW 2d 209 at 212 (Mo Ct App). As to the phrase ‘confidential relationship’ see further G E Dal Pont, Law of Confidentiality, LexisNexis Butterworths, Australia, 2015, [2.3]–[2.6]. 120. See Dal Pont, Agency, [10.9]. 121. Gagnon v Coombs (1995) 654 NE 2d 54 at 60 (Mass Ct App). 122. See 1.8–1.13. 123. See, for example, Watson v Watson [2002] NSWSC 919; BC200205921 at [48] per Berecry AM; Ganderton v Behre [2005] NZHC 61 at [72] per Venning J; Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [105], [115] per Hammerschlag J (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on power of attorney issue); Re Ericksen Estate (2008) 98 Alta LR (4th) 161 at [17] per Marceau J (QB) (describing a power of attorney as ‘an agent-like relationship’ between the attorney and the principal, which attracts ‘a fiduciary duty to act in accordance with the authority granted by the [principal]’); Grefeld v Grefeld [2010] FamCA 504; BC201050552 at [102] per Barry J; Ward v Ward (No 2) [2011] NSWSC 1292; BC201109231 at [3] per Brereton J; Perpetual Trustee Co Ltd v Gibson (2013) 17 BPR 32,141; [2013] NSWSC 276; BC201301492 at [15] per Rein J. 124. As to most powers of attorney being non-contractual see 2.2–2.7. 125. See 8.4. 126. See, for example, Matter of De Belardino (1974) 77 Misc 2d 253 at 256 (NY Surr Ct) (an attorney ‘must act in accordance with the highest principles of morality, fidelity, loyalty and fair dealing’); Fender v Fender (1985) 329 SE 2d 430 at 431 (SC) (a duty to ‘act with the utmost good faith’); Ganderton v Behre [2005] NZHC 61 at [72] per Venning J; Spina v Permanent Custodians Ltd (2008) 13 BPR 25,463; [2008] NSWSC 561; BC200805086 at [115] per Hammerschlag J (revd Spina v Permanent Custodians Ltd (2009) 14 BPR 26,923; [2009] NSWCA 206; BC200906292 but not on the power of attorney issue) (attorney’s ‘duty to act in good faith towards and for the benefit of his principal’).

127. Schock v Nash (1999) 732 A 2d 217 at 224 (Del) (‘The creation of a power of attorney imposes the fiduciary duty of loyalty on the attorney-in-fact’). 128. Fender v Fender (1985) 329 SE 2d 430 at 431 (SC). 129. Re Ericksen Estate (2008) 98 Alta LR (4th) 161 at [17] per Marceau J (QB). See also Powell v Thompson [1991] 1 NZLR 597 at 605 per Thomas J (‘it is not open to attorneys to either obtain an advantage for themselves or act in a way which is contrary to the interests of their principals’). 130. Creasy v Henderson (1970) 173 SE 2d 823 at 828 (Va). 131. See, for example, Fender v Fender (1985) 329 SE 2d 430 at 431 (SC) (‘Absent intention to the contrary, an agent must further the principal’s interests’); Sevigny v New South Federal Savings and Loan Association (1991) 586 So 2d 884 at 886 (Ala) (‘when one accepts the power of attorney, she impliedly covenants to use the powers bestowed upon her for the sole benefit of the one conferring that power on her, consistent with the purposes of the agency relationship represented by the power of attorney’). 132. Schock v Nash (1999) 732 A 2d 217 at 225 (Del). 133. Watson v Watson [2002] NSWSC 919; BC200205921 at [48] per Berecry AM; MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [248] per Graesser J (QB). 134. See 6.50–6.58. 135. Any extension of authority must ordinarily be conferred in writing: see 5.44–5.46. 136. Schock v Nash (1999) 732 A 2d 217 at 226 (Del). 137. Re Estate of Rybolt (1994) 631 NE 2d 792 at 795 (Ill Ct App) (where a grandchild who took care of an aged grandmother was given a power of attorney by the grandmother but used it to, inter alia, transfer money from the grandmother’s bank account to his own; the court held that this transfer created a presumption of fraud that could not be rebutted on the facts). 138. Kee v Kee (1995) 58 ACWS (3d) 316 at [37] per Sheard J (Gen Div(Ont)) (who held that, where a son (attorney) alleged that his mother (principal) had gifted him $20,000, the son’s bare assertion that this transaction, one of many that he effected under the power, was intended as a gift to him, fell short of discharging the burden of proof). 139. (1851) 15 Beav 234 at 239; 51 ER 527 at 530. 140. As to this point see 6.46, 6.47. 141. See 8.5. 142. See, for example, Pratten v Pratten [2005] QCA 213; BC200504060 (where the respondent had a power of attorney with respect to the appellant’s affairs, and sold the appellant’s cattle on the latter’s instructions, but sought to set off the sale proceeds against an amount she claimed the principal owed her for breach of a lease; Jerrard JA held that the attorney had acted in breach of fiduciary duty in so doing because ‘[t]he fiduciary duty she owed when exercising the power with which he had entrusted her required her to deal with those proceeds of sale honestly, in accordance with his directions, and not as her private property’ and the principal ‘had a proprietary right as against her to the proceeds of sale of his cattle, not just a personal remedy … [which] right derived from her agency, his incapacity, his ownership, and the obligations she had as holder of his power of attorney’: at [9]; see also at [52] per Muir J). 143. See 9.23–9.33. 144. See Foskett v McKeown [2001] 1 AC 102 at 130–2 per Lord Millett.

145. See 6.50–6.58. 146. Crossley v Magniac [1893] 1 Ch 594 at 600 per Romer J (‘I do not think any such custom or usage would be held valid by this Court which purported to justify an agent, having his principal’s money in his hand, in ignoring that principal, and applying the moneys in payment of money due to himself from a third person’). See, for example, Tobin v Broadbent (1947) 75 CLR 378 at 392; BC4700530 per Latham CJ (who rejected any custom or practice that ‘stockbrokers, by reason of the mere fact that they are entrusted with the possession or the custody of securities, have authority to pledge them for their own benefit’). 147. See 5.44–5.46. 148. See, for example, Creasy v Henderson (1970) 173 SE 2d 823 at 828 (Va) (where the attorney ‘was participating in a transaction by which her daughter would acquire the principal’s property for an inadequate consideration without a fair appraisal … and the bedridden principal would lose the right of possession as well as legal title to her home’, which act was declared by the court as ‘presumptively fraudulent’, a presumption the attorney proved unable to oust); Matter of Carlson Revocable Trust (2009) 59 AD 3d 538 at 540 (NY App) (where the attorney, by amending a trust deed and naming herself as sole beneficiary, in effect made a gift to herself of money the subject of her attorneyship, which act ‘carried with it a presumption of impropriety and self-dealing’). 149. Estate of Rybolt (1994) 631 NE 2d 792 at 795 (Ill Ct App). 150. See K E Boxx, ‘The Durable Power of Attorney’s Place in the Family of Fiduciary Relationships’ (2001) 36 Georgia L Rev 1 at 40, 44 (having earlier described the attorney for an incapacitated principal as ‘perhaps the closest’ to the expectation of entire selflessness in fiduciary law: at 38). 151. See, for example, ALRC, p 15. 152. [2002] NSWSC 919; BC200205921. 153. Watson v Watson [2002] NSWSC 919; BC200205921 at [50]. 154. Watson v Watson [2002] NSWSC 919; BC200205921 at [52]. 155. [2005] 1 Qd R 561; [2004] QSC 443; BC200408515. 156. See 8.79. 157. Smith v Glegg [2005] 1 Qd R 561; [2004] QSC 443; BC200408515 at [61]. 158. (2009) 260 ALR 353; [2009] NSWCA 326; BC200909306 at [163] per Young JA, with whom Allsop P and Giles JA concurred (revd but not on this point: Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3; BC201100994). 159. General powers are not presumed to give attorneys an authority to borrow money from their principal: see 6.44, 6.45. 160. See, for example, Grefeld v Grefeld [2010] FamCA 504; BC201050552 at [107] per Barry J (where the attorney committed a fiduciary breach in this manner, and the court ordered that the property purchased in the attorney’s own name from the borrowing be held on (constructive) trust for the principal: at [122]–[126]). 161. [1985] 1 NZLR 50. 162. Apatu v Peach Prescott & Jamieson [1985] 1 NZLR 50 at 64 per Eichelbaum J. 163. Enduring powers of attorney require a formal acceptance by the attorney(s) appointed in order to be valid: see 4.34. The validity of non-enduring powers is not premised upon acceptance by the attorney(s), but the duties imposed and authorities conferred by those powers do require a

willingness to act as attorney(s): see 4.32, 4.33. 164. See, for example, Stewart v McLean (2010) 54 ETR (3d) 59 at [84]–[88] per Punnett J (SC(BC)) (where an enduring power of attorney was never delivered by the deceased (the principal) to the intended attorney (the defendant, her son); the court held that, as the principal did not intend the power to be used by her son until either she chose to allow him to use it or, presumably, she became incapacitated, the son was never in a position to use the power, and so the son did not owe his mother fiduciary duties). Cf Fraser (Guardian ad litem of) v Fraser (2000) 31 ETR (2d) 52 (SC(BC)) (where the power of attorney had been perfected by delivery to the intended attorney). 165. As to disclaimer by attorneys see 4.32, 4.33. 166. (2001) 82 SASR 6; [2001] SASC 454; BC200108267. 167. Klotz v Neubauer (2001) 82 SASR 6; [2001] SASC 454; BC200108267 at [33]. 168. Klotz v Neubauer (2001) 82 SASR 6; [2001] SASC 454; BC200108267 at [34], [35]. 169. See Dal Pont, Equity & Trusts, [38.270]. 170. Being the commencement date of the Powers of Attorney Amendment Act 2013 (Tas). 171. Powers of Attorney Act 2006 (ACT) s 42(3); Powers of Attorney Act 1998 (Qld) s 73(1); Powers of Attorney Act 2000 (Tas) s 32AC(1); Powers of Attorney Act 2014 (Vic) s 65(1) (not yet commenced). An amendment to the Queensland provision, to make explicit that the conflict transaction must be prospectively authorised (albeit without prejudice to the principal retrospectively authorising or ratifying an otherwise unauthorised transaction) has been recommended: QLRC, Vol 3, p 281 (recommendations 17-1, 17-2). The above Victorian provision makes this explicit: Powers of Attorney Act 2014 (Vic) s 65(1)–65(3) (not yet commenced). 172. Powers of Attorney Act 2006 (ACT) s 42(1); Powers of Attorney Act 1998 (Qld) s 73(2); Powers of Attorney Act 2000 (Tas) s 32AC(2); Powers of Attorney Act 2014 (Vic) s 64(1) (not yet commenced). See, for example, Ede v Ede [2007] 2 Qd R 323; [2006] QSC 378; BC200610380 (where an attorney, in selling to his daughter a parcel of real estate owned by the principal, breached s 73); AAGT Private Loans Pty Ltd v Ferguson [2009] QSC 113; BC200905092 at [67], [68] per A Lyons J; Public Trustee of Queensland v Ban [2011] QSC 380; BC20110962 at [26]– [33] per Boddice J. 173. In the Australian Capital Territory, ‘relative’ of a person (the related person), means: (a) a person related by blood, affinity or adoption to the related person; or (b) a domestic partner (defined in the Legislation Act 2001 (ACT) s 169): Powers of Attorney Act 2006 (ACT), Dictionary. ‘Affinity’ means affinity derived through marriage or any other domestic partnership. In Queensland ‘relation’ of a person means: (a) a spouse of the first person; (b) a person who is related to the first person by blood, marriage or adoption or because of a de facto relationship, foster relationship or a relationship arising because of a legal arrangement (for example, a court order for custody, a trust arrangement between trustee and beneficiary); (c) a person on whom the first person is completely or mainly dependent; (d) a person who is completely or mainly dependent on the first person; or (e) a person who is a member of the same household as the first person: Powers of Attorney Act 1998 (Qld) Sch 3. In Victoria ‘relative’ means: (a) spouse or domestic partner; (b) child; (c) parent or step-parent; (d) sibling or step-sibling; (e) grandparent; (f) grandchild; (g) uncle or aunt; (h) nephew or niece: Powers of Attorney Act 2014 (Vic) s 3(1) (not yet commenced). The Tasmanian legislation contains no definition of ‘relative’. 174. ‘Close friend’ of a person means someone who has a close personal relationship with the person and a personal interest in the person’s welfare: Powers of Attorney Act 2006 (ACT), Dictionary; Powers of Attorney Act 1998 (Qld) Sch 3; Powers of Attorney Act 2014 (Vic) s 3(1) (not yet

commenced). ‘Close personal relationship’ is not statutorily defined. The Tasmanian Act contains no definition of ‘close friend’. 175. This includes an interest as a joint tenant or tenant in common: Powers of Attorney Act 2006 (ACT) s 42(4); Powers of Attorney Act 1998 (Qld) s 73(4); Powers of Attorney Act 2014 (Vic) s 64(2)(c)(i), (iii) (not yet commenced). 176. Powers of Attorney Act 2006 (ACT) s 42(2); Powers of Attorney Act 1998 (Qld) s 73(3); Powers of Attorney Act 2000 (Tas) s 32AC(3); Powers of Attorney Act 2014 (Vic) s 64(2)(c)(ii), (iv) (not yet commenced). This represents an attempt to avoid transactions being set aside wherein an attorney benefits via dealings in jointly owned property: see, for example, Estate of Lambur (2013) 397 SW 3d 54 (Mo App). 177. Powers of Attorney Act 2006 (ACT) s 50; Powers of Attorney Act 1998 (Qld) s 106. Cf Attorney Act 2000 (Tas) s 32(1); Powers of Attorney Act 2014 (Vic) s 77 (not yet commenced). See 8.9. 178. Powers of Attorney Act 1998 (Qld) s 65. 179. See Powers of Attorney Act 2006 (ACT) Dictionary (meaning of ‘power of attorney’). 180. Protection of Personal and Property Rights Act 1988 (NZ) s 107(1)(a) (by the instrument creating the enduring power), 107(1)(b) (by a court order pursuant to s 102(2)(g) or 102(2)(ga)). 181. Protection of Personal and Property Rights Act 1988 (NZ) s 107(1)(c). 182. Protection of Personal and Property Rights Act 1988 (NZ) s 107(2). 183. Namely under Trustee Act 1956 (NZ) s 13A. Equivalent provisions for trustee investment are found in each Australian jurisdiction: see Trustee Act 1925 (ACT) s 14; Trustee Act 1925 (NSW) s 14; Trustee Act 1893 (NT) s 14; Trusts Act 1973 (Qld) s 21; Trustee Act 1936 (SA) s 6; Trustee Act 1898 (Tas) s 6; Trustee Act 1958 (Vic) s 5; Trustees Act 1962 (WA) s 17. 184. As to the attorney’s right to indemnity see 8.90, 8.91. 185. See 2.10. 186. Powers of Attorney Act 2000 (Tas) s 32(1)(a). 187. See 8.30. 188. See 3.2–3.38. 189. See 3.39–3.45. 190. See 1.30–1.34. 191. AAGT Private Loans Pty Ltd v Ferguson [2009] QSC 113; BC200905092 at [66] per A Lyons J. 192. Tingley v Müller [1917] 2 Ch 144 at 165 per Warrington LJ. 193. Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [158] per Palmer J. See, for example, AAGT Private Loans Pty Ltd v Ferguson [2009] QSC 113; BC200905092 at [63]–[66] per A Lyons J (attorney under an irrevocable power not required to follow a wish or direction by the principal that the attorney avoid acting in accordance with the express written terms of the powers of attorney). 194. See, for example, Knight v Bulkeley (1859) 5 Jur NS 817 (where the principal assigned to an attorney a pension receivable for war wounds to secure the payment of an annuity by the attorney to the principal, and executed a power of attorney enabling the attorney to collect the pension; when the principal later sought to revoke the power of attorney by collecting the pension payments himself, Sir John Stuart VC granted a mandatory injunction requiring the principal to execute

another power of attorney enabling the attorney to receive the pension, and a perpetual injunction restraining the principal from revoking that power of attorney or ‘doing any act whereby the [attorney’s] right to receive the pension might be prevented or intercepted’: at 818). 195. Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [152] per Palmer J. 196. Re Buckley [2013] WTLR 373; [2013] EWCOP 2965 at [42] per Senior Judge Lush (‘attorneys should keep the donor’s money and property separate from their own or anyone else’s’). 197. See 6.50–6.58. 198. WCLRA, p 36 (mixing ‘is a serious matter because it blurs attorney accountability in key areas like the duty to keep records, the duty to use assets for the benefit of the [principal] and the overarching duty to act honestly, in good faith and in the best interests of the [principal]’). 199. WCLRA, p 36. 200. See 8.45. 201. As to advance personal plans see 1.44. 202. See 8.25. 203. Advance Personal Planning Act 2013 (NT) s 31(3). 204. Powers of Attorney Act 2006 (ACT) s 48(1) (applies while the principal has impaired decisionmaking capacity); Powers of Attorney Act 1998 (Qld) s 86(1) (breach is liable to penalty); Powers of Attorney Act 2000 (Tas) s 32(3) (breach is liable to penalty); Powers of Attorney Act 2014 (Vic) s 69(1) (not yet commenced). 205. Powers of Attorney Act 2006 (ACT) s 48(2); Powers of Attorney Act 1998 (Qld) s 86(2), 86(3); Powers of Attorney Act 2000 (Tas) s 32(3); Powers of Attorney Act 2014 (Vic) s 69(2), 69(3) (not yet commenced). 206. Powers of Attorney Act 2000 (Tas) s 32(1)(a): see 8.47. 207. Advance Personal Planning Act 2013 (NT) s 31(1): see 8.25. 208. Lord Chedworth v Edwards (1802) 8 Ves 46; 32 ER 268; Gray v Haig (1855) 20 Beav 219; 52 ER 587; Whitford v Whitford [1941] 2 DLR 701 at 708 per Sir Joseph Chisholm CJ (SC(NS)) (‘when you employ a man as general agent, he can receive money to an amount which you have no means of finding out, unless he keeps regular accounts of his receipts and payments’). 209. Pearse v Green (1819) 1 Jac & W 135; 37 ER 327; Makepeace v Rogers (1865) 4 De GJ & Sm 649; 46 ER 1070. 210. See, for example, Pratten v Pratten [2005] QCA 213; BC200504060 at [9] per Jerrard JA, at [52] per Muir J; Brown v Lefebvre (2007) 159 ACWS (3d) 312 at [20], [21] per Gill J (QB(Alta)); MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [250] per Graesser J (QB). 211. As to fiduciary duties in the context of powers of attorney see 8.31–8.50. 212. See, for example, Pratten v Pratten [2005] QCA 213; BC200504060 at [9] per Jerrard JA, at [52] per Muir J, discussed at n 142 above. 213. See 1.25–1.27, 1.58–1.64. 214. B(E) v B(S) (2010) 248 Man R (2d) 260 at [40] per Burnett J (QB). See also Re Buckley [2013] WTLR 373; [2013] EWCOP 2965 at [20]–[23] per Senior Judge Lush. 215. See 2.10.

216. See, for example, Alexopoulos v Dakouras (1970) 179 NW 2d 836 at 841 (Wis) (which applied the trustee’s duty to account to an attorney under a power). 217. Powers of Attorney Act 2000 (Tas) s 32(1)(a). 218. As to advance personal plans see 1.44. 219. Advance Personal Planning Act 2013 (NT) s 31(1) (the note to which states that s 31 ‘does not constitute a trust nor cause the property to vest in the decision-maker’). 220. Re Buckley [2013] WTLR 373; [2013] EWCOP 2965 at [41] per Senior Judge Lush. See also NSLRC (DP), pp 133–4. As to the considerations that impact upon trustee discretion to invest see Dal Pont, Equity & Trusts, [22.175]–[22.220]. 221. Powers of Attorney Act 1998 (Qld) s 84(2). 222. Trusts Act 1973 (Qld) s 21(a). 223. Re Buckley [2013] WTLR 373; [2013] EWCOP 2965 at [25] per Senior Judge Lush. 224. [2013] WTLR 373; [2013] EWCOP 2965 at [49]–[51]. 225. Re Buckley [2013] WTLR 373; [2013] EWCOP 2965 at [49]–[51]. 226. See 6.53–6.58. 227. See 7.21, 7.22. 228. See 7.23, 7.24. 229. Miller v Miller (2010) 935 NE 2d 729 at 742 (Ind Ct App). 230. Powers of Attorney Act 2000 (Tas) s 32(1A)(c)(ii) (as amended by the Powers of Attorney Amendment Act 2013 (Tas)). 231. As to advance personal plans see 1.44. 232. Advance Personal Planning Act 2013 (NT) s 22(4). 233. ALRC, p 18 (recommending that a modified ‘substituted judgment principle’ as a standard of decision-making by attorneys once a principal loses mental capacity, under which attorneys would be required ‘to act, so far as possible, as the [principal] would have acted if the [principal] were not incapacitated’; the Commission envisaged that the attorney should take into account ‘the need to preserve the [principal’s] property and money to ensure that the [principal] does not become destitute’ and ‘the desirability of maintaining, so far as possible, the style of life of the [principal] as it was before the incapacity’). 234. (2010) 935 NE 2d 729. 235. Miller v Miller (2010) 935 NE 2d 729 at 739. 236. Miller v Miller (2010) 935 NE 2d 729 at 740, 741. 237. Re Harcourt [2012] WTLR 1779 at [43] per Senior Judge Lush (EWCOP). 238. Parker v Higgins [2012] NSWSC 1516; BC201209588 at [54], [60]–[64] per Slattery J (citing paragraphs [8.55] and [8.56] of the first edition of this book with approval). 239. Powers of Attorney Act 2006 (ACT) s 47 (limited to an enduring power of attorney, while the principal has impaired decision-making capacity); Powers of Attorney Act 1980 (NT) s 11 (applicable to non-enduring powers, and to enduring powers executed before 17 March 2014) (requiring the keeping of ‘a true and accurate record of any transaction entered into by him as donee of the power charging or otherwise disposing of, whether for valuable consideration or

otherwise, any of the assets of the donor of the power’); Advance Personal Planning Act 2013 (NT) s 30(1); Advance Personal Planning Regulations 2014 (NT) reg 5 (applicable to decisionmakers under advance personal plans, as to which see 1.44); Powers of Attorney Act 1998 (Qld) s 85 (limited to enduring powers of attorney); Powers of Attorney and Agency Act 1984 (SA) s 8 (limited to enduring powers of attorney; breach is an offence); Powers of Attorney Act 2000 (Tas) s 32AD(1) (applicable to enduring powers); Instruments Act 1958 (Vic) s 125D (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 66 (limited to enduring powers) (yet to commence); Guardianship and Administration Act 1990 (WA) s 107(1)(b) (limited to enduring powers of attorney; breach subject to penalty). See also Protection of Personal and Property Rights Act 1988 (NZ) s 99C (limited to enduring powers of attorney; breach is an offence). 240. Powers of Attorney Act 1980 (NT) s 11 (applicable to non-enduring powers, and to enduring powers executed before 17 March 2014). 241. Cf Protection of Personal and Property Rights Act 1988 (NZ) s 99B (which requires an attorney under an enduring power to promptly comply with any request for information relating to the exercise of the attorney’s powers if the person making the request: (a) is specified in the power as a person to be provided with this information and the information requested is of the kind specified in the power to be provided to that person; or (b) is a lawyer appointed by the court to represent the principal (under s 65) and the information requested is records of financial transactions that the attorney must keep under s 99C). 242. Dadswell v Jacobs (1887) 34 Ch D 278 at 282 per Cotton LJ, at 286 per Lindley LJ; Parker v Higgins [2012] NSWSC 1516; BC201209588 at [64] per Slattery J; Re Harcourt [2012] WTLR 1779 at [43] per Senior Judge Lush (EWCOP). 243. As to an attorney’s right to indemnity see 8.90, 8.91. 244. Guardianship and Management of Property Act 1991 (ACT) s 62(2)(b); Powers of Attorney Act 2003 (NSW) s 36(4)(e); Powers of Attorney Act 1980 (NT) s 15(2)(b) (for enduring powers of attorney created by an instrument executed before 17 March 2014: s 13(aa)); Powers of Attorney Act 1998 (Qld) s 122(1); Powers of Attorney and Agency Act 1984 (SA) s 11(1); Powers of Attorney Act 2000 (Tas) ss 32AD(4), 35(6); Instruments Act 1958 (Vic) s 125ZB(1), 125ZB(2); Powers of Attorney Act 2014 (Vic) s 116(1)(e)–(g) (not yet commenced); Guardianship and Administration Act 1990 (WA) s 109(1)(b). See generally Chapter 10. 245. See 4.51. 246. This is explicitly recognised by statute in the Northern Territory, Queensland and Victoria: Advance Personal Planning Act 2013 (NT) s 21(2) (in the context of ‘decision-makers’ under advance personal plans, as to which see 1.44); Powers of Attorney Act 1998 (Qld) s 80(1); Instruments Act 1958 (Vic) s 119(2) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 30(4)(a) (limited to enduring powers) (yet to commence). 247. This is explicitly recognised by statute vis-à-vis enduring powers of attorney in Victoria: Instruments Act 1958 (Vic) s 119(3); Powers of Attorney Act 2014 (Vic) s 30(4)(c) (not yet commenced). 248. De Bussche v Alt (1878) 8 Ch D 286 at 310 per Thesiger LJ (CA); John McCann & Co (a firm) v Pow [1975] 1 All ER 129 at 131 per Lord Denning MR. As to non-delegation by agents generally see Dal Pont, Agency, Ch 9. 249. See Dal Pont, Equity & Trusts, [22.45]. 250. This point was established at least as early as Palliser v Ord (1724) Bunb 166; 145 ER 634.

251. Parkin v Williams [1986] 1 NZLR 294 at 299 per Richardson J (CA). 252. The general law proscription on delegation is replicated in the Powers of Attorney Act 2003 (NSW) s 45 (which prohibits an attorney from, whether or not irrevocably, appointing a substitute, delegate or sub-attorney unless the instrument creating the power expressly provides for the attorney to do so). It is also replicated vis-à-vis enduring powers, without qualification in s 25 of the Powers of Attorney Act 2014 (Vic) (not yet commenced). 253. See, for example, Palliser v Ord (1724) Bunb 166; 145 ER 634. This is clearly envisaged by the wording of the New South Wales legislation: Powers of Attorney Act 2003 (NSW) s 45. The Victorian legislation states that a general power of attorney in or to the effect of the prescribed form (found in the Instruments Act 1958 (Vic) Sch 12) ‘shall operate to confer … authority to do on behalf of the donor anything (other than delegate his powers under the power of attorney) which he can lawfully do by an attorney’: Instruments Act 1958 (Vic) s 107(1) (emphasis supplied). This does not mean that a power of attorney in Victoria cannot modify the common law non-delegation rule, only that if the wording of the prescribed form is adopted, it will not have that effect. Equivalent provision is made in the Powers of Attorney Act 2014 (Vic) s 7(2)(a) (not yet commenced). 254. Powers of Attorney Act 2000 (Tas) s 32(2). 255. See 8.72. 256. See 8.73. 257. See Dal Pont, Agency, [9.7]–[9.18]. 258. This represents the standard of care applicable to attorneys in the exercise of their functions: see 8.23–8.25. It also explains why an attorney is entitled to an indemnity from the principal for the costs of a properly engaged agent: see 8.90, 8.91. 259. (2010) 21 Alta LR (5th) 59 (QB). 260. MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [363]–[374] (QB). 261. (2010) 21 Alta LR (5th) 59 at [380]–[402] (QB). 262. Ultimately, though, as there was no clear causal connection between that failure and any loss to the principal’s estate — even had the attorney met the standard of care, Graesser J was not satisfied that G would have revised his valuation — there was no monetary liability in the attorney: MacDonald v Taubner (2010) 21 Alta LR (5th) 59 at [404] (QB). 263. Parkin v Williams [1986] 1 NZLR 294 at 300 per Richardson J (CA). 264. [1986] 1 NZLR 294. 265. Parkin v Williams [1986] 1 NZLR 294 at 299. 266. Parkin v Williams [1986] 1 NZLR 294 at 299, citing from Hemming v Hale (1859) 7 CB(NS) 487 at 498; 141 ER 905 at 910 per Williams J. 267. Parkin v Williams [1986] 1 NZLR 294 at 300. 268. As to ‘general powers of attorney’ in the Australian Capital Territory see 1.37–1.40. 269. Powers of Attorney Act 2006 (ACT) s 33(1). 270. As to the meaning of ‘impaired decision-making ability’ see 5.36. 271. As to who can be appointed as an attorney see 3.48. 272. Powers of Attorney Act 2006 (ACT) s 33(2), 33(3).

273. Powers of Attorney Act 2006 (ACT) s 33(4). 274. See G E Dal Pont, Lawyers’ Professional Responsibility, 5th ed, Lawbook Co, Australia, 2013, Ch 10. 275. As to the equitable doctrine of confidentiality see Dal Pont, Equity & Trusts, Ch 6. 276. As to fiduciary law (the ‘no profit’ rule) in this context see 8.31–8.36. 277. As to advance personal plans see 1.44. 278. As to the ‘general principles’ see 8.26. 279. Powers of Attorney Act 2006 (ACT) Sch 1 cl 1.10 (‘general principles’); Advance Personal Planning Act 2013 (NT) s 22(7)(k) (‘decision-making principles’); Powers of Attorney Act 1998 (Qld) Sch 1 cl 11 (‘general principles’). 280. Powers of Attorney Act 2014 (Vic) s 63(1)(e) (not yet commenced). 281. Powers of Attorney Act 1998 (Qld) s 74A(1). 282. Powers of Attorney Act 1998 (Qld) s 74A(2) (referring to the meaning of ‘confidential information’ in s 74(4)). As to guardianship proceedings see Guardianship and Administration Act 2000 (Qld) Sch 4. 283. Powers of Attorney Act 1998 (Qld) s 74(1). 284. ‘Use’ of confidential information includes disclose or publish: Powers of Attorney Act 1998 (Qld) s 74(4). 285. Powers of Attorney Act 1998 (Qld) s 74(2). 286. Powers of Attorney Act 1998 (Qld) s 74(2), 74(3). 287. See 3.43–3.45. 288. See Dal Pont, Agency, [12.62]. 289. Cf Exponential Trading Pty Ltd v Anscombe-Black [2003] 2 Qd R 183; [2002] QSC 388; BC200207065 at [37] per Helman J (involving the rebuttal of the presumption provided for by the Powers of Attorney Act 1998 (Qld) s 87). 290. In Exponential Trading Pty Ltd v Anscombe-Black [2003] 2 Qd R 183; [2002] QSC 388; BC200207065 at [8] Helman J held that it does not put a strained interpretation on the reference to ‘business associate’ to conclude that it includes a corporation so closely connected to its director and substantial shareholder. According to his Honour, such an interpretation best achieved the chief purpose of the Act, which is to protect those empowering attorneys, and so was preferable to any other interpretation. That the phrase ‘business associate’ was located in a list the other members of which are natural persons did not lead Helman J to reject that interpretation, which was a natural one in the context. 291. Baker v Affoo [2014] QSC 46; BC201402012 at [85] per Jackson J. 292. [2005] 1 Qd R 561; [2004] QSC 443; BC200408515 at [39]. 293. Smith v Glegg [2005] 1 Qd R 561; [2004] QSC 443; BC200408515 at [40]. 294. Smith v Glegg [2005] 1 Qd R 561; [2004] QSC 443; BC200408515 at [41]. 295. [2014] QSC 46; BC201402012. 296. Baker v Affoo [2014] QSC 46; BC201402012 at [98]. 297. Baker v Affoo [2014] QSC 46; BC201402012 at [100].

298. As to fiduciary breaches see 8.31–8.37. 299. As to the applicable standard of care see 8.23–8.25. 300. An attorney under an enduring power has been described as possessing ‘an unusual level of discretion’: K E Boxx, ‘The Durable Power of Attorney’s Place in the Family of Fiduciary Relationships’ (2001) 36 Georgia L Rev 1 at 3–4. 301. See 3.5. 302. N A Kohn, ‘Elder Empowerment as a Strategy for Curbing the Hidden Abuses of Durable Powers of Attorney’ (2006) 59 Rutgers L Rev 1 at 52. 303. N A Kohn, ‘Elder Empowerment as a Strategy for Curbing the Hidden Abuses of Durable Powers of Attorney’ (2006) 59 Rutgers L Rev 1 at 49. 304. N A Kohn, ‘Elder Empowerment as a Strategy for Curbing the Hidden Abuses of Durable Powers of Attorney’ (2006) 59 Rutgers L Rev 1 at 53. 305. See N A Kohn, ‘Elder Empowerment as a Strategy for Curbing the Hidden Abuses of Durable Powers of Attorney’ (2006) 59 Rutgers L Rev 1 at 18–19. See, for example, in Re GM [2013] EWHC 2966 (COP) (where Judge Denzil Lush disallowed extensive gifts to the attorneys and their families because, inter alia, there had been no consultation with the principal before they were made, and no attempt to involve her in the decision-making process, or to ascertain her present wishes and feelings: at [95]). 306. Protection of Personal and Property Rights Act 1988 (NZ) s 99A(1)(a). The backdrop to this statutory provision is outlined in NZLC, pp 15–16. 307. Protection of Personal and Property Rights Act 1988 (NZ) s 99A(3). 308. As to advance personal plans see 1.44. 309. Advance Personal Planning Act 2013 (NT) s 22(4). 310. Advance Personal Planning Act 2013 (NT) s 22(5)(a), (b). 311. Advance Personal Planning Act 2013 (NT) s 22(5)(c). 312. Advance Personal Planning Act 2013 (NT) s 22(5A). 313. Powers of Attorney Act 2014 (Vic) s 21(1) (not yet commenced). 314. Powers of Attorney Act 2014 (Vic) s 21(2) (not yet commenced) (the latter by, inter alia: (i) recognising the inherent dignity of the principal; (ii) having regard to the principal’s existing supportive relationships, religion, values and cultural and linguistic environment; and (iii) respecting the confidentiality of confidential information relating to the principal). 315. Affluent Freight Sdn Bhd v Sumathi A/P Appukuttan Pillai [2001] MLJU 635 at (LN) (HC). 316. See 2.2–2.7. 317. See 11.10. 318. See Alcock, pp 126–7. 319. As to which see Dal Pont, Agency, Ch 15. 320. See 1.8–1.13. 321. In Victoria the recommendation that a proposed dedicated powers of attorney statute provide that an attorney is not entitled to be paid unless payment is specifically authorised by the power of attorney document (VPLRC, p 181 (recommendation 52)) has seen implementation in the

impending Powers of Attorney Act 2014 (Vic) s 70. 322. It should be noted, however, that when lawyers are appointed as attorneys, and seek to be remunerated for this function, it is premised upon fulfilment of the costs disclosure requirements (as to which see G E Dal Pont, Law of Costs, 3rd ed, LexisNexis Butterworths, Australia, 2013, [2.19]–[2.38]) and a relevant charging clause, which are subject to fiduciary strictures paralleling charging clauses in wills: see G E Dal Pont and K F Mackie, Law of Succession, LexisNexis Butterworths, Australia, 2013, [24.16]–[24.19]. 323. Collier and Lindsay, p 172. 324. (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 at [15]. 325. Lincolne v Williams (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 at [16]. 326. ‘Professional decision-maker’ means the Public Trustee, the Public Guardian, a licensed trustee company, or another person who carries on the business of, or including, providing services as a decision-maker: Advance Personal Planning Act 2013 (NT) s 36(4). 327. As to advance personal plans see 1.44. 328. Advance Personal Planning Act 2013 (NT) s 36(1) (the order being pursuant to s 59(2)(d)). 329. Advance Personal Planning Act 2013 (NT) s 36(2). 330. Advance Personal Planning Act 2013 (NT) s 36(3). 331. See Dal Pont, Agency, [15.69], [15.70]. 332. See Dal Pont, Agency, [18.8]–[18.20]. 333. Re Clune (1988) 14 ACLR 261 at 266 per French J (emphasis supplied). 334. Westropp v Solomon (1849) 8 CB 345; 137 ER 542. 335. See 2.2–2.7. 336. Re Clune (1988) 14 ACLR 261 at 266 per French J, citing R Goff and G Jones, The Law of Restitution, 2nd ed, Sweet & Maxwell, London, 1978, p 258. Cf Bowstead, p 329 (suggesting that the restitutionary remedy is narrower in scope than indemnification). But see Advanced Realty Funding Corp v Bannink (1979) 106 DLR (3d) 137 at 142 per Arnup JA (CA(Ont)), who considered that even apart from any express contract between the parties, an agent would be entitled to be indemnified for expenditure incurred on behalf of the principal. 337. See, for example, Lincolne v Williams (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 at [5] per Blow J (who spoke in terms of an attorney’s ‘common law right to be indemnified in respect of expenditure incurred in carrying out his or her role’). See also Advance Personal Planning Act 2013 (NT) s 35 (subject to the terms of the advance personal plan, as to which see 1.44). 338. See Dal Pont, Agency, [18.14]–[18.18]. As to trustees see Dal Pont, Equity & Trusts, [23.135]– [23.150]. 339. As to money as the subject of an agent’s lien see Dal Pont, Agency, [18.24]. 340. As to lawyers’ general liens see G E Dal Pont, Law of Costs, 3rd ed, LexisNexis Butterworths, Australia, 2013, Ch 26. 341. As to agents’ liens generally see Dal Pont, Agency, [18.21]–[18.46]. 342. Guardianship and Management of Property Act 1991 (ACT) s 62(2)(d) (see 10.4); Powers of Attorney Act 2003 (NSW) s 38 (see 10.11); Advance Personal Planning Act 2013 (NT) s 59 (see

10.13); Powers of Attorney Act 1998 (Qld) s 118(1) (see 10.16); Powers of Attorney and Agency Act 1984 (SA) s 11(2)(b) (see 10.18); Powers of Attorney Act 2000 (Tas) s 35(1) (see 10.22); Instruments Act 1958 (Vic) s 125Z (its equivalent under the Powers of Attorney Act 2014 (Vic) being s 116(1)(a)) (see 10.24); Guardianship and Administration Act 1990 (WA) s 109(2) (see 10.28). 343. As to advance personal plans see 1.44. 344. Powers of Attorney Act 2006 (ACT) s 45(1), 45(2) (subject to any contrary intention, or express limitation, in the enduring power of attorney: s 45(4)); Advance Personal Planning Act 2013 (NT) s 28(1); Powers of Attorney Act 1998 (Qld) s 81(1); Powers of Attorney Act 2000 (Tas) s 32AA(1). 345. Powers of Attorney Act 2006 (ACT) s 45(3); Advance Personal Planning Act 2013 (NT) s 28(2) (and gives a provider of the information acting in good faith immunity, in this regard, from civil and criminal liability, or breach of a professional code of conduct: s 28(5)); Powers of Attorney Act 1998 (Qld) s 81(2) (which is expressed to overrides: (a) any restriction, in an Act or the common law, about the disclosure or confidentiality of information; and (b) any claim of confidentiality or privilege, including a claim based on legal professional privilege: s 81(3)); Powers of Attorney Act 2000 (Tas) s 32AA(3). 346. See 5.25. 347. As to ademption see 9.39–9.44. 348. Victorian Law Reform Commission, Succession Laws, Report 26, August 2013, p 53. 349. See, for example, CA [2010] QCAT 196. 350. Powers of Attorney Act 2000 (Tas) s 32AA(2), inserted by the Powers of Attorney Amendment Act 2013 (Tas). 351. Powers of Attorney Act 2000 (Tas) s 32AA(4). 352. Powers of Attorney Act 2000 (Tas) s 32AA(3).

[page 239]

Chapter 9

Relations with Third Parties Attorneyship does not affect the principal’s power to act Relations between principal and third parties in contract General principles Identity of contracting parties Enforcement of contract Enforcement by principal Attorney bringing proceedings on the principal’s behalf Relationship between attorney and third parties Impact of principal’s incapacity Impact of ostensible authority Concept of ‘ostensible authority’ Application to powers of attorney No ostensible authority where third party aware of limitation on authority Liability of attorney for breach of warranty of authority Doctrine of breach of warranty of authority Application to attorneys No operation where knowledge of lack of authority Effect of ademption by attorney’s exercise of power

9.3 9.5 9.5 9.7 9.11 9.11 9.13 9.16 9.18 9.23 9.24 9.26 9.29 9.34 9.34 9.35 9.38 9.39

9.1 As a power of attorney, being no more than a specific form of agency,1 involves conferral of authority on an attorney to act ‘in stead of’ the principal, the parameters of the relationship between the principal and persons with whom the attorney deals on the principal’s behalf (for this purpose, termed ‘third parties’) is properly the subject of legal inquiry. In the context of powers of attorney, the most common conferral of authority is one to contract with third parties on a principal’s behalf. This emanates from powers of attorney being directed traditionally to the delegation of financial-type decisions by principal to attorney, which in turn often involve some form of contractual authority. As a result, this chapter focuses, with one exception, on relations of a contractual nature facilitated by an attorney on a principal’s behalf, and investigates the consequences for both principal and attorney in this regard. The exception concerns [page 240] the impact of the exercise of a power of attorney on those who may, as beneficiaries of the principal’s will, be deprived of their intended legacy.2 9.2 That this chapter targets chiefly contractual relations does not mean that a principal or attorney cannot be exposed to liability in, say, tort or under statute, as regards persons with whom the attorney deals on the principal’s behalf. Agency law recognises that a principal may be liable for an agent’s tortious conduct, or statutory breaches, and also envisages the prospect of personal liability in agents as a result.3 Yet in practice case examples of liability of this kind arising under the auspices of powers of attorney are rare, and so they are omitted from this work.

Attorneyship does not affect the principal’s power to act 9.3 At the outset, it is important to note that the appointment of an attorney does not, generally speaking, oust the principal’s authority or power to act in matters within the scope of the attorneyship. This is consistent with the

notion that the principal, being the genesis of the attorney’s authority, retains complete control over its exercise,4 and is not to be held to restrict his or her own authority except by express words. It has been judicially observed, to this end, that ‘[t]he position of [an] attorney is merely to act as agent for the principal and there is nothing to prevent the principal dealing with the property notwithstanding it’.5 The same is expressed, in order to remove any doubt, by the powers of attorney legislation in the Australian Capital Territory.6 The foregoing is one of the reasons why the grant of a power of attorney does not amount to an assignment, whether at law or in equity.7 It is also a reason why the mere giving of a power of attorney is not sufficient to constitute a valid gift in contemplation of death (donatio mortis causa).8 In each of these instances, what is required is a parting with dominion over property that goes beyond the mere conferral of authority that lies at the heart of attorneyship. 9.4 Where, however, the terms of a power of attorney reveal the principal’s intention to relinquish some or all of his or her capacity to exercise authority on his or her own account, or to control or superintend the authority of the attorney, there is a legitimate question as to whether in so doing the principal has created a relationship beyond mere attorneyship. Certainly the incidents of the typical example of this kind — the irrevocable power of attorney9 — mark it as a creature distinct from the orthodox power of attorney. [page 241]

Relations between principal and third parties in contract General principles 9.5 Elementary agency law dictates that, an agent who, within the scope of his or her actual or ostensible authority, contracts on behalf of a principal binds the principal to the contract(s) in question.10 The same applies vis-à-vis

powers of attorney. An attorney vested with authority to contract for the principal, and who acts within the scope of that authority, thereby creates legal rights and obligations in contract for the principal. As with agency law generally, those rights and obligations in the principal may ensue even where an attorney acts beyond his or her actual authority, if the attorney’s acts are nonetheless within his or her ostensible authority. It follows that critical to determining the circumstances in which a principal can be liable to third parties in contract arising out of an attorney’s acts is the identification of the scope of the attorney’s actual and ostensible authority. An attorney’s actual authority was the focus of Part III of this work, which highlighted that the terms of the authority itself, construed strictly in the main, are the chief inquiry in this regard.11 9.6 As the existence or breadth of ostensible authority is not determined by the terms in which the authority is cast, it falls outside of the coverage of Part III (although passing mention was made of it in that Part).12 Instead, ostensible authority involves an inquiry into the extent to which the principal has ‘held out’ the attorney — to those with whom the attorney is to deal on the principal’s behalf — to possess authority more extensive than is conferred by the terms of the power of attorney. That a principal cannot escape liability to third parties for an attorney’s acts within the latter’s ostensible authority does not preclude the principal from proceeding against the attorney for acting beyond his or her actual authority, if this has occurred. The rationale for, and the scope for the operation of, the doctrine of ostensible authority in the powers of attorney environment are discussed below. Preceding it, however, is an inquiry into who is responsible in contracts entered into by an attorney. The point logically precedes any discussion of ostensible authority because, in the first instance, the identity of the parties to any contract allegedly brokered through an attorney must be determined. The point is significant because rights and responsibilities arising in contract, as well as the capacity to enforce them, is limited by the doctrine of privity, generally speaking, to parties to the contract itself.

Identity of contracting parties 9.7 In the ordinary contractual context, little difficulty usually surfaces in identifying the parties to the contract, as they are named in the agreement in

question. As the law recognises the concept of agency, it stands to reason that a person who enters into a contract as agent for a principal is not to be taken as a party to that contract. The principal is the relevant party, as the agent does no more than stand in the principal’s stead for this purpose. In agency law, there is nothing to preclude an agent signing the contract personally, and nonetheless escape responsibility under the contract, if it is evident that he or she contracts on behalf of a principal.13 Where the latter is not [page 242] evident, including the scenario where an agent signs for an undisclosed principal, the law treats the agent as a party to the contract, with consequent ramifications.14 9.8 While the basic principles of agency law mentioned above largely translate to powers of attorney, an exception appears to be that, at general law, an attorney must express himself or herself to be acting in the name of the principal and to sign, where signing is required, not the attorney’s name but the principal’s name.15 Yet the extent to which this should be allowed to place form over substance has been queried. In a recent Queensland Court of Appeal decision, while accepting that prudent attorneys ‘would state in the document that they are acting in the name of the principal and sign the principal’s name’, Margaret McMurdo P did not discern an absolute general law rule requiring an attorney to sign the principal’s signature if the circumstances of the case — particularly the terms of the document being signed and the mode of execution — make it clear that the attorney is executing the document in the name of the principal and is authorised to bind the principal.16 9.9 The general law, seemingly qualified in its strictness, continues to represent the law in the Australian Capital Territory in this regard. The position elsewhere is addressed by statute. Other than South Australia, it empowers an attorney, in exercising the power, to execute an assurance or instrument with the attorney’s own signature and, if sealing is required, with the attorney’s own seal, or do any other thing in the attorney’s own name.17 The South Australian legislation states that where an agent executes a deed in his or her own name, but it is apparent from the deed as executed that the

agent was acting on behalf of a principal, ‘the agent is not, by reason only of the manner in which he executed the deed, personally liable upon the deed, and the deed has effect as if the agent had executed it in the name of his principal’.18 9.10 The above assumes that not only does the attorney have the authority to contract on behalf of the principal, but that that authority is capable of being delegated to an attorney19 and that there are no statutory requirements that prevent an agent contracting in that fashion. As to the latter, if a statute requires that the principal sign a certain contract, according to basic agency law the principal cannot delegate its signature to an attorney.20

Enforcement of contract Enforcement by principal 9.11 Where an attorney signs a contract, and it is clear that the attorney does so not personally but on behalf of a principal, the attorney is not a party to the contract.21 The principal, rather, is a contracting party, as this reflects the intention of both the principal and the other contracting party(ies). It follows that the attorney can neither [page 243] sue nor be sued under the contract; rights and liabilities under the contract accrue in or are enforced against the principal.22 Any allegation of breach of contract must be made against the principal, and any attempt to enforce the contract must also be made in the name of the principal (although the attorney may be authorised to pursue this). On the other hand, if the attorney has entered into a contract on his or her own behalf (whether or not also on behalf of a principal), the attorney can sue and be sued thereunder. It follows that whether or not an attorney has contracted personally, or instead as attorney for a principal, may be in issue if there is ambiguity in the terms in which the contract is executed or otherwise entered into. Resolving this ambiguity here involves no more than the application of general principles of construction directed at ascertaining the intention of the parties.

The case law in a general agency context reveals multiple illustrations of the judicial approach,23 but at the same time emphasises that each case must turn on the terms and context of the relevant contract. 9.12 If an attorney executes a contract, say, ‘as attorney’, it is difficult (though not impossible) to discern an intention to assume personal responsibility. And this remains so even if the contract does not expressly identify the intended principal. For example, in Lundie v Rowena Nominees Pty Ltd (Receiver & Manager Appointed) (in liq)24 each loan agreement in question contained a clause under which the applicants agreed that the respondent would execute the agreement ‘for the Lender’ pursuant to a power of attorney granted by the ‘Lender’. According to Steytler P, with whom McLure JA concurred, while the ‘Lender’ was not identified, this clause made it obvious that it was someone other than the respondent. His Honour noted that although a summary of loan contracts — contained in the prospectus, which identified the ‘parties’ as the respondent ‘as agent for various of its clients (“The Lenders”) who may vary with such Loan Agreement, the grower and any guarantor of the grower’ — could lend support to the contention that the respondent was to be a party, that contention was negated both by the terms of the above clause and the way in which the respondent executed each agreement, namely ‘as attorney for and on behalf of the Lender’.

Attorney bringing proceedings on the principal’s behalf 9.13 Where an attorney has decided to bring legal proceedings action under the authority granted by the power of attorney, it is well established that the proceedings must be brought in the name of the principal.25 The attorney cannot sue in his or her own name. This derives from the notion, noted above,26 that a contract or other dealing that an attorney has entered into on a principal’s behalf is that of the principal, not the attorney. It also derives from a power of attorney being about no more than authority, and not about creating or transferring ownership interests.27 9.14

Because of the foregoing, a power of attorney is distinct from an

assignment. It is clear that the grant, via a power of attorney, of the authority to sue on and collect [page 244] on a claim is not the same as an assignment of ownership of that claim.28 Were they to equate, the attorney (assignee) could bring suit in his or her own name, as legal or equitable owner. As discussed in Chapter 2,29 unlike a power of attorney, the focus of which is authority ahead of property, an assignment involves ‘the immediate transfer of an existing proprietary right’ from the assignor to the assignee.30 Where an attorney authorised to conduct litigation on a principal’s behalf acts for reward (for example, a lawyer-attorney acting for a client), that the attorney has an interest in recovering his or her fees is no ground by itself to give standing to sue in his or her own name, and does not constitute any form of assignment that would have that effect.31 9.15 History nonetheless reveals an interplay between assignments and powers of attorney. Prior to the Judicature Act 1873 (UK), a power of attorney was viewed as an indispensable adjunct to assignments of a chose in action. Because the latter were only recognised in equity, the assignee would lack the power to enforce the subject matter of the assignment without a power of attorney granted by the assignor to this effect.32 The administrative fusion of common law and equity triggered by the Judicature Acts meant that combining assignment and power of attorney is no longer as indispensable as it once was. But the practice remains, for another reason, namely that where an assignment remains an equitable one because notice has not been served upon the debtor,33 it is essential that the assignee has the power — via a power of attorney granted by the assignor — to sue in the name of the person that the debtor (third party) believes is his or her creditor (the principal or assignor).34 Once notice has been served and the legal assignment is perfected, the power of attorney becomes otiose, there being nothing left in the hands of the assignor that he or she can grant an attorney authority over.

Relationship between attorney and third parties

9.16 Where an attorney contracts on behalf of a principal, and does so within the scope of his or her actual or ostensible authority, the attorney assumes no duties, at least not in contract, to the other contracting parties. What duties an attorney owes under the power of attorney are owed to the principal, and are discussed in Chapter 8. 9.17 The foregoing does not mean that attorneys can never be liable other than to their principal. The law recognises that an attorney may be liable to third parties, whether or not in the course of contracting for a principal, in tort, equity or under statute. The principles that govern agents’ liability to third parties outside of contract [page 245] apply to attorneys,35 as do the agency law principles applicable to determining the occasions in which a principal may be liable for an attorney’s defaults in tort, equity or in breach of a statute.36

Impact of principal’s incapacity 9.18 A principal with mental capacity can create a power of attorney that either takes effect upon his or her subsequent incapacity, or continues in effect notwithstanding that incapacity (known as an ‘enduring power of attorney’). Yet this is possible only because enduring powers of attorney are validated by statute;37 the general law assumes that the onset of incapacity causes a power to terminate.38 But where a principal lacks the requisite mental capacity at the time of creating a power of attorney, the general law declares void the power so created.39 Being ‘void’, it has no legal effect, whether for the purposes of authorising the attorney to act on the principal’s behalf, or in creating rights in third parties as a result of the attorney’s actions for the principal. 9.19 However, as an attorney or a third party may be unaware of the principal’s mental incapacity in creating the power, to render any action thereunder void could prove unfair, for the attorney and the third party. The general law was not insensitive to this issue. Contract law recognised that a contract cannot be impeached if A contracts with B without notice of B’s lack

of mental capacity.40 This translated to agency law as regards the contract between agent and principal,41 and has seen application in the context of powers of attorney even though these are not usually constituted by way of contract.42 In this event, assuming that the attorney does not know of the principal’s incapacity, it stands to reason that a third party with whom the attorney deals on the principal’s behalf should receive equivalent protection from the law.43 9.20 So far as third parties are concerned, though, they deserve legal protection via an analogy with the doctrine of ostensible authority. The latter protects third parties in dealings with an agent who exceeds his or her actual authority but not the authority that the principal has ‘held out’ the agent as possessing (the agent’s ‘ostensible’ or ‘apparent’ authority). The doctrine applies with equal force to agencies in the form of powers of attorney.44 It stands to reason that if third parties merit legal protection in circumstances where an attorney is not actually authorised to act, but nonetheless appears to have that authority, they should likewise receive protection in circumstances where the attorney’s appearance of authority is false due to an event outside of the third party’s knowledge. 9.21 The need for third party protection is of especial importance in the powers of attorney context, as third parties may often have no direct contact with the principal, and so, unlike an attorney, will likely be unable to make any informed assessment of [page 246] the principal’s capacity.45 There is, as a result, no justification to treat a third party differently according to whether the attorney did or did not know of the principal’s incapacity to create the power of attorney. In each case, the principal can be viewed as having ‘held out’ the attorney to have the requisite authority via the appointment of the attorney under the power. Admittedly this ‘holding out’ is artificial; after all, the attorney’s appointment is void at law. And ostensible authority is premised on ‘holding out’ by the principal, not the attorney;46 in the event that the attorney knows that the power is void due to the principal’s incapacity at its creation, the

‘real’ holding out is likely to emanate from the attorney. Policy nonetheless supports the relevant analogy. An alternative approach is to construe the attorney’s ‘holding out’ as a warranty of his or her authority, which in turn creates personal liability for the attorney vis-à-vis the third party.47 9.22 Protection for attorneys and third parties who are unaware that a power of attorney is void by reason of the principal’s mental incapacity is not restricted to the general law. Statute in each jurisdiction makes express provision for the protection of both attorneys and third parties who deal under a power that is not valid, and premise that protection on the attorney’s or third party’s lack of knowledge or notice of that invalidity. The grounds for invalidity to which the statutory protection applies are specified, and because they invariably include the revocation of the power, they are discussed in detail in Part V, in Chapter 12, of this work.

Impact of ostensible authority 9.23 As a general principle, an attorney who acts outside of his or her authority conferred by the terms of the power of attorney, construed according to principle, creates no legal rights or obligations as between the principal and the third party, but may be liable to the principal for acting in excess of authority. This represents no more than basic tenets of agency law.48

Concept of ‘ostensible authority’ 9.24 An important qualification to the above principle is the doctrine of ostensible authority. Under this doctrine, a third party who deals with an agent who appears to have authority to enter into the relevant transaction, because the principal has ‘held out’ the agent as having that authority, can enforce the transaction against the principal even though in reality the agent lacked the actual authority to enter into it. The vehicle to secure this outcome is not contract — after all, there can be no contract between the principal and the third party as a result of an agent exceeding his or her authority — but estoppel by representation. A principal who has ‘held out’ an agent as having authority beyond the

agent’s actual authority is viewed at law as having made a representation upon which the [page 247] third party relied to his or her detriment in transacting with the agent, such as to estop the principal from denying the agent’s lack of actual authority as a ground to avoid the transaction.49 But if that representation simply aligns with actual authority, actual and ostensible authority coincide.50 9.25 The rationale for ostensible authority in agency law reflects the notion that where two parties are equally without fault51 — here the principal and the third party — and one must suffer by the wrong of another (here the agent acting in excess of authority), ‘the loss must fall upon the one who put it in the power of the wrongdoer to cause the loss’.52 The doctrine also knows various subsidiary justifications, which appear in the following extract:53 There are several policy reasons why it is preferable to place the risk that an agent may abuse his authority for his own benefit on the principal, rather than on the holder in due course who takes without notice of the principal-agent relationship. First, this rule increases the principal’s incentive to exercise care in selecting honest and reliable agents. Second, the principal is in a better position to supervise the agent’s conduct than is the holder in due course. Finally, because the principal enjoys the many benefits of the agency relationship, it is not unfair to require that it also bear the costs of its agent’s abuses of authority where they harm innocent third parties.

Application to powers of attorney 9.26 The doctrine of ostensible authority, as a foundation for a principal’s liability to a third party, is equally applicable to agencies that take the form of powers of attorney.54 It has been judicially observed, to this end, that ‘a third party who reasonably relies on the wording of the power of attorney or the representations of the principal is still protected by the doctrine of ostensible authority’.55 The foregoing remark envisages that ostensible authority may play a role not only where the principal has ‘held out’ the attorney as having authority beyond that actually conferred, but in the case where the power of attorney is phrased in terms that lead the third party to reasonably believe that the attorney was authorised to act when in reality that may not be so. The latter is

a scenario most likely to surface where the power of attorney confers power in general terms — which according to its literal [page 248] terms may indeed appear broad to an ordinary person reading it — but the law adopts a stricter construction of the power.56 9.27 Third parties are not expected, it is reasoned, to be familiar with the nuances of the law’s strict construction of powers of attorney57 (although third parties who are experienced in the field, such as financial institutions, should arguably be subject to a higher standard, and accordingly less amenable to successful reliance on ostensible authority in this context). In any event, the principal, as the creator of the power of attorney, is best positioned to phrase the power in terms that mitigate the prospect of ambiguity, for both the attorney and third parties. 9.28 As agency agreements are not subject to the same strict construction approach that applies to powers of attorney, in the usual agency context there is less scope for ostensible authority to exceed actual authority due to the wording of the agreement. Where the scope of an agent’s authority is ambiguous in terms of the agency agreement, an available reasonable interpretation of the words adopted will, for both the agent and third parties, have those consequences that accrue to an exercise of actual authority, not ostensible authority.58 In the case of powers of attorney, though, it is not unusual for a third party to request to view the actual power of attorney document, to satisfy itself that the attorney has authority to act for the principal in the circumstances. This explains judicial remarks that locate the primary purpose of a power of attorney as being not to define the authority conferred on the attorney by the principal, ‘but to provide third persons with evidence of agency authority’.59 Being privy to the terms of the power, the third party cannot ordinarily rely on any representation by the principal allegedly extending that authority through conduct. It follows that there is far greater scope for the principal’s ‘representation’ being that which appears in the document itself in the case of powers of attorney than in the case of orthodox agencies.

No ostensible authority where third party aware of limitation on authority 9.29 There is no scope in agency law for a third party to successfully plead ostensible authority if he or she knows that the agent lacks the authority he or she is professing to exercise. And this is so irrespective of any representation of the principal or, for that matter, of the agent. Under the doctrine of estoppel by representation, a third party who knows of the relevant limitation on an agent’s authority can hardly be seen as relying upon any representation by the principal that appears to broaden that authority.60 [page 249] 9.30 The same restriction on the application of ostensible authority applies to agencies that take the form of powers of attorney.61 A third party who is privy to the actual terms of the power, and nonetheless deals with the attorney outside of those terms, cannot be heard to say that he or she relied on any representation by the principal as to the attorney’s authority. The same is the case where the third party is presented with, but does not read, the terms of the power, and proceeds to transact with the attorney in a dealing that proves unauthorised. The point is illustrated by the English Court of Appeal’s ruling in Jacobs v Morris.62 An attorney authorised to purchase on behalf of a principal, secured a loan from the defendants, representing that he had authority to borrow money on the principal’s behalf. The attorney produced the power of attorney itself, which the defendants did not read, relying instead on the attorney’s assurance as to his authority. The attorney applied the funds borrowed to his own use, and the issue was whether the principal should be liable to the defendants for the attorney’s default. The attorney was held to have acted beyond both his actual and ostensible authority in borrowing the money. The defendants could not rely on any ostensible authority, in any case, because, they ‘must be taken to have had full notice of the terms of the power of attorney’,63 and thus that the attorney lacked authority to borrow on the principal’s behalf.64 The primary cause of that loss was not anything done or omitted to be done by the principal, according to Stirling LJ, ‘but the neglect

of ordinary business precautions by the defendants’.65 The foregoing made it unjust to hold the principal liable for the attorney’s excess of authority. 9.31 There are occasions in the case law where, even without the opportunity to view the power of attorney itself, it has been held that the third party should be treated as having had notice that the attorney’s actions were unauthorised. The most common scenario where this has occurred is where the attorney purported to effect a dealing that was for the attorney’s own benefit, and so prima facie in breach of fiduciary duty (unless authorised expressly by the power).66 It has been judicially observed, to this end, that:67 … a third party who enters into a transaction which is, apparently in the interest of the agent exclusively, without reference to the principal or the authorising document to ascertain the transaction’s legitimacy, cannot appeal to the law of agency for protection.

Whether the above statement of principle should be confined to transactions ‘exclusively’ for the benefit of the attorney may be queried.68 A third party arguably takes a risk where the transaction is primarily for the attorney’s benefit too. Ultimately [page 250] it may depend on the facts of each case, which would be influenced by the sensible precautions, and the sophistication and experience of the third party in dealings of this kind. 9.32 The case law reveals several examples of the principle in action. The High Court of Australia in Tobin v Broadbent69 held that stockbrokers do not, by reason of being entrusted with possession or custody of securities under a power of attorney, have authority, whether actual or ostensible, to pledge them for their own benefit. The respondent’s assumption ‘without any inquiry’ that the stockbrokers (attorneys) were acting in line with their authority thus did not amount to reasonable reliance on any representation. A more recent illustration is the New South Wales Court of Appeal’s decision in Siahos v JP Morgan Trust Australia Ltd.70 There Macfarlan JA, with whom Giles and McColl JJA agreed, accepted that the respondent could rely on the power of attorney as clothing the attorney with at least ostensible authority to do acts that he was apparently authorised by the power to do, even if the attorney was not in fact so authorised because an act apparently

for the benefit of the principal was in truth for the attorney’s own benefit. But as on the facts the act in question was known by the respondent to be for the attorney’s own benefit, it fell outside the ambit of the ostensible authority vested in the attorney.71 9.33 It has been suggested, more broadly, that ‘the law imposes a duty to exercise reasonable care to ascertain the authority of an [attorney] and to investigate facts that would put a reasonable man on inquiry’.72 It follows that knowledge (or notice) for this purpose is not necessarily limited to actual knowledge (which itself encompasses recklessness and wilful shutting of the eyes to the obvious), but can arguably include constructive knowledge. If so, it aligns with what appears to be the prevailing view in agency law.73 On the other hand, if a dealing has been effected by an attorney ‘apparently acting within the terms of the power’, a person with whom the attorney deals ‘does not … have to inquire further into the substance of the transaction’.74 There is certainly no need that a third party verify with the principal each instruction given by an attorney to that party. Were the law to impose such a duty, the authority given to attorneys would be ‘eviscerated’, and the entire role and function of powers of attorney would be compromised.75 [page 251]

Liability of attorney for breach of warranty of authority Doctrine of breach of warranty of authority 9.34 Agency law recognises potential liability in an agent for what is termed ‘breach of warranty of authority’. Under this doctrine, an agent who purports to have authority to make a contract, or otherwise engage in a business transaction, but lacks authority to such an extent as to bind an alleged principal, may be liable to the other party to the contract or transaction.76 The action is for breach of warranty, namely a promise by the agent that he or she in fact possessed the authority claimed. The grounds for

this liability need not be confined to breach of warranty of authority; an agent’s conduct of this kind may generate liability under the tort of negligent misstatement,77 or under statutory proscriptions against misleading and deceptive conduct.78

Application to attorneys 9.35 As a power of attorney creates an agency relationship,79 an attorney who warrants his or her authority under a power to a third party to engage in one or more dealings, but who lacks that authority, may be liable personally for breach of warranty of authority. The principal bears no corresponding liability in this context because the attorney acts without authority, except where the principal has also ‘held out’ the attorney as possessing that broader authority (in which case the principal may be liable to the third party under the doctrine of ostensible authority).80 An illustration of the application of the doctrine of breach of warranty of authority to attorneys is found in Starkey v Bank of England.81 There a broker, believing himself to be authorised by the bondholders, applied to the respondent bank for a power of attorney to sell to a third party the bonds held by the bank. The broker induced the bank to effect the sale but it proved that one of the bondholder’s signatures had been forged. The bondholder whose signature had been forged, upon discovering this, brought an action against the bank for restitution, and the broker was made a third party upon a claim of indemnity by the bank. The broker was held to have given an implied warranty of authority, and so was ordered to indemnify the bank against the claim of the bondholder. 9.36 A scenario that could also be amenable to the doctrine of breach of warranty of authority is that which surfaced in Lundie v Rowena Nominees Pty Ltd (Receiver & Manager Appointed) (in liq)82 — namely where there is no power of attorney but the attorney nonetheless purports to act under a power — even though Steytler P made no reference to the doctrine. The applicants argued that if a person purports to execute an agreement as attorney, but there is no power of attorney, the agreement purportedly executed by the alleged attorney is a nullity, on the same grounds as apply to an existing power of attorney that is void for incapacity or forgery.83 His Honour, with whom McLure JA concurred, was unwilling to accept this

argument, distinguishing the incapacity and forgery cases on the ground that they involved an existing (albeit [page 252] void) power of attorney whereas the facts in issue involved no power of attorney at all.84 This led him to conclude that:85 … in the absence of any other authority to this effect (none was referred to and I have not, through my own researches, been able to find any), I would not be prepared to accept the proposition that the absence of a power of attorney, without more, renders any agreement purportedly made pursuant to it invalid.

On the assumption that the attorney has, as is likely, warranted his or her authority under the (non-existent) power to engage in the dealing in question, that dealing will not be invalid, at least not as between the attorney and the other party to the dealing. Instead, the attorney would be personally liable to that other party under the doctrine of breach of warranty of authority. 9.37 That an attorney could be liable to a third party, under the doctrine of breach of warranty of authority, in circumstances where the attorney could not reasonably have known that the power had been revoked (say, by the death or incapacity of the principal),86 seems rather unfair to the attorney.87 It is also inconsistent with the accepted notion that third parties who deal with an agent (or attorney) are not affected by the principal’s death or incapacity, provided that they are unaware of this.88 As a result, the powers of attorney legislation makes specific provision to protect attorneys from liability in circumstances of this kind.89

No operation where knowledge of lack of authority 9.38 Importantly, the doctrine of breach of warranty of authority cannot give rise to liability in an attorney if the other party knows that the attorney lacks the authority he or she is warranting. In these circumstances the claim to enforce the warranty fails because the evidence reveals that the other party did not rely upon the warranty in entering into the transaction. This reflects no more than the ordinary law of contract, pursuant to which warranties have no legal force in the absence of reliance.

So where the other party either knows the truth relating to the attorney’s lack of authority,90 or is privy to all the material facts from which the nature and extent of the attorney’s authority may be inferred,91 no claim for breach of warranty can stand. The law does not go so far, however, as to require that other party to inquire in the absence of anything to raise his or her suspicion.92

Effect of ademption by attorney’s exercise of power 9.39 As a general principle, a ‘specific’ gift of some part of the testator’s estate — identified and separated from the rest of the estate — will fail by ‘ademption’ if its subject matter ceases to exist as part of the testator’s property at the time of death. [page 253] So if the testator sells the specific property, or it otherwise ceases to exist (say, by being destroyed) before the testator’s death, the gift is ‘adeemed’ — that is, in effect revoked — and the beneficiary will take nothing.93 If the property is sold, therefore, the beneficiary cannot trace its proceeds into other property.94 9.40 At general law can be found case law suggesting that an attorney who knows that the principal’s will provides for specific bequests should avoid exercising his or her authority so as to defeat (adeem) those bequests.95 In circumstances where this nonetheless occurs, most likely where the attorney is unaware of the contents of the principal’s will,96 there is a line of case authority evincing a disinclination to accept that an ademption has taken place.97 The main case is Re Viertel.98 There the testator devising her house, furniture and effects to beneficiaries, and executed an enduring power of attorney appointing the beneficiaries as attorneys. Upon her subsequent mental incapacity, the attorneys, ignorant of the will, sold the house and invested the proceeds in debenture stock in the name of the deceased. In

ruling that there had been no ademption, thus entitling the beneficiaries to the proceeds of sale under the will, Thomas J saw the circumstances as justifying an exception to the doctrine, placing emphasis on the attorneys’ action having been in ignorance of the will and the ignorance of the testator of the attorneys’ action. As to the latter, the testator lacked any opportunity to alter the will. The trend of ensuing case authority, until recently, endorsed this exception to the doctrine of ademption.99 The exception is ostensibly based on the deceased’s presumed intention, so that the court must be satisfied that ‘the deceased, if possessed of testamentary capacity, would have intended the donee of the asset in the will to have [page 254] the remaining proceeds of sale’.100 And it also presupposes that the proceeds of the sale are identified with sufficient certainty. While the relevant case law targets instances of applications by a public officer to have the testator’s home sold to fund nursing home accommodation,101 the Viertel exception has, more generally, been justified as a matter of policy, namely:102 People are living longer than in the past and their physical health is outlasting their mental capacity. It is commonplace for properties owned by incapacitated persons to be sold under the authority of enduring powers of attorney, to fund accommodation bonds and other necessities and comforts for an aging population. Further … there is no good reason why the position should be different if, in the absence of an applicable enduring power of attorney, it is necessary to appoint an administrator under the [guardianship legislation] to sell property of an incapacitated person for such purposes.

9.41 Yet in RL v NSW Trustee and Guardian103 a detailed review of the history of English lunacy laws led Campbell JA, with whom Young JA and Sackville AJA agreed, to reject Re Viertel and its progeny. There the testator devised a lock-up garage to A, the residue being left to RL (the testator’s eldest niece) and her two siblings. When the testator lost mental capacity, RL was appointed as the testator’s financial manager by the Guardianship Tribunal, pursuant to which RL sold the garage. The issue of ademption was triggered by a statutory provision under which the court could direct the investment of the proceeds from the sale of a specific bequest in a separate

fund,104 which order was made as regarded the sale proceeds ($75,000) in the circumstances. RL challenged this decision. Campbell JA ruled, notwithstanding Re Viertel, that had the testator retained mental capacity and sold the garage, the bequest to A would have been adeemed. The same therefore ensued when RL sold the garage with proper legal authority, aside from the said statutory provision.105 The historical review led Campbell JA to brand Re Viertel as an unjustified extension to the established exceptions to ademption. His Honour added that the approach in Re Viertel would render otiose a provision in the New South Wales powers of attorney legislation,106 with counterparts directed to the same object in Queensland, South Australia and (most recently) Tasmania,107 that empowers the [page 255] court to redress inequity in this context. RL v NSW Trustee and Guardian has been followed in Queensland,108 suggesting a shift from the Re Viertel approach. 9.42 Under the New South Wales and Tasmania powers of attorney statutes any person who is named as a beneficiary109 (a ‘named beneficiary’) under the will of a deceased principal who executed an enduring power of attorney is declared to have the same interest in any surplus money or other property arising from dealing110 with property by the attorney under the power as the named beneficiary would have had in that property had no dealing been made.111 That surplus money or other property is taken to be of the same nature as the property sold, mortgaged, charged, disposed of or dealt with.112 The legislation therefore ousts the operation of the doctrine of ademption in these circumstances. This outcome can, however, be altered by the Supreme Court if, on an application by a named beneficiary or such other person as the court determines has a proper interest in the matter,113 it considers that the outcome would result in ‘one or more named beneficiaries gaining an unjust and disproportionate advantage, or suffering an unjust and disproportionate disadvantage, of the kind not contemplated by the will of the deceased

principal’.114 In this event, the court may make such other orders as it thinks fit to ensure that no named beneficiary gains such an advantage or suffers such a disadvantage. And any such order may provide that it has effect as if it had been made by a codicil to the will of the deceased principal executed immediately before his or her death.115 9.43 In South Australia the Supreme Court is vested with an equivalent jurisdiction, subject to the same basic parameters, which likewise applies ‘to ensure that no beneficiary gains a disproportionate advantage, or suffers a disproportionate disadvantage’. It is triggered by the death of a principal of an enduring power of attorney where, at his or her death, in consequence of an exercise of power by the attorney when the principal was suffering legal incapacity, the share of any beneficiary under the principal’s will has been affected.116 The foregoing presumably covers cases of ademption. 9.44 The Powers of Attorney Act 1998 (Qld) follows a slightly different schema, albeit aimed at a similar objective. It states that if a person’s benefit in a principal’s [page 256] estate — whether under the principal’s will, on intestacy or by another disposition taking effect on the principal’s death — is lost because of a dealing with the principal’s property by an attorney of the principal (even if the person whose benefit is lost is the attorney in question), the person, or the person’s personal representative, may apply to the Supreme Court (or the Queensland Civil and Administrative Tribunal)117 for compensation out of the principal’s estate.118 The compensation cannot exceed the value of the lost benefit.119 The foregoing applies to enduring and non-enduring powers, as well as to attorneys under powers made other than under the Act.120 This provision has been held to apply when there has been an ademption, rather than to alter the circumstances where an ademption occurs at general law.121 Accordingly, if there has been no ademption, there is nothing upon which the section in question can operate.

1.

See 1.8–1.13.

2.

See 9.39–9.44.

3.

See Dal Pont, Agency, Chs 22 (liability of principal), 24 (liability of agent).

4.

See 1.11.

5.

Re Craven’s Estate [1937] 1 Ch 423 at 428 per Farwell J.

6.

Powers of Attorney Act 2006 (ACT) s 30 (‘To remove any doubt, the giving of a power of attorney does not affect the principal’s power to do anything that the principal is otherwise legally capable of doing’).

7.

See 2.26, 2.27.

8.

Re Craven’s Estate [1937] 1 Ch 423 at 428–30 per Farwell J.

9.

As to irrevocable powers of attorney see 1.30–1.34, 11.7–11.9.

10. See Dal Pont, Agency, [19.1]. 11. See Chapter 6. 12. See 5.18, 5.19. 13. See Dal Pont, Agency, [23.3]–[23.41]. 14. See Dal Pont, Agency, [23.42]. 15. See 7.10. 16. Nielsen v Capital Finance Australia Ltd [2014] QCA 139; BC201404392 at [24]. See also at [41] per Muir JA, at [85] per Douglas J. 17. See 7.9, 7.11. Yet that the Northern Territory, Queensland and Victorian statutes nonetheless require that any such instrument be executed in a way showing that the attorney executes it as attorney for the principal suggests that the difference between general law and statute is limited in those jurisdictions: see 7.11. 18. Powers of Attorney and Agency Act 1984 (SA) s 13(1). 19. See 5.20–5.29. 20. See 5.27–5.29. 21. Re Hebb and Registrar of Titles (1982) 142 DLR (3d) 729 at 733 per de Weerdt J (SC(NWT)). 22. Prosper Dynamics Sdn Bhd v MBF Property Services Sdn Bhd [2004] MLJU 416 at *4 (HC). 23. See Dal Pont, Agency, [23.10]–[23.41]. 24. (2006) 32 WAR 404; [2006] WASCA 106; BC200604321. 25. Gray v Pearson (1870) LR 5 CP 568; Campbell v Pye (1954) 54 SR (NSW) 308; Urquhart v Lanham (2002) 11 BPR 20,765; [2002] NSWSC 119; BC200200633 at [16] per Young CJ in Eq; Steinecke v Wayne [2011] NSWSC 428; BC201103356 at [5], [6] per Brereton J. 26. See 9.7. 27. See 1.16, 1.17. 28. Spencer v Standard Chemicals Corp (1924) 143 NE 651 (NY Ct App); Titus v Wallick (1939) 306 US 282 at 289–90 per Stone J; Advanced Magnetics Inc v Bayfront Partners Inc (1997) 106 F 3d 11 at 17–19 (2nd Cir) (where instruments that merely conferred on the plaintiff ‘power to

commence and prosecute to final consummation or compromise any suits, actions or proceedings’ on behalf of company shareholders were found to be powers of attorney to bring suit in the names of the individual shareholders, not assignments of title or ownership to the plaintiff); W R Huff Asset Management Co LLC v Deloitte & Touche LLP (2008) 549 F 3d 100 at 108–11 (2nd Cir). 29. See 2.26, 2.27. 30. Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 26; BC6300080 per Windeyer J. 31. See, for example, W R Huff Asset Management Co LLC v Deloitte & Touche LLP (2008) 549 F 3d 100 (2nd Cir). 32. See J B Ames, Lectures on Legal History, Harvard University Press, Cambridge, Massachusetts, 1913, pp 210–18. 33. As to the impact of notice in the context of equitable assignments see Dal Pont, Equity & Trusts, [3.55]–[3.75], [3.135]. 34. Dib v Green (2009) 236 FLR 348; [2009] FMCA 1174; BC200910930 at [10] per Raphael FM. 35. See generally Dal Pont, Agency, Ch 24. 36. See generally Dal Pont, Agency, Ch 22. 37. See 1.25–1.27. 38. See 11.25–11.27. 39. See 3.5–3.31. 40. Sometimes termed the doctrine of Molton v Camroux (1848) 2 Ex 487; 154 ER 584. See also Imperial Loan Co v Stone [1892] 1 QB 599 at 601–2 per Fry LJ. 41. See Dal Pont, Agency, [19.19], [19.20]. 42. See, for example, McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243 at 275 per Griffith CJ. As to the primarily non-contractual nature of powers of attorney see 2.2–2.7. 43. McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243 at 275 per Griffith CJ. 44. See 9.26–9.28. 45. This explains why, for instance, statute in Queensland makes express provision entitling a person who deals with an attorney and does not know, or have reason to believe, the principal did not have capacity to make the power of attorney, to rely on the certificate of the witness to the document as evidence of the principal’s capacity to make the document: Powers of Attorney Act 1998 (Qld) s 99(1). 46. See Dal Pont, Agency, [20.32]–[20.35]. 47. As to the application of the doctrine of breach of warranty of authority to attorneys see 9.34–9.38. 48. See Dal Pont, Agency, [19.3], [19.4]. 49. See generally Dal Pont, Agency, [20.1]–[20.12]. 50. In the context of powers of attorney see, for example, Reckitt v Barnett, Pembroke and Slater Ltd [1929] AC 176; Wilson v Gilbert (1965) 39 ALJR 348. 51. Judges concede that ‘[i]t is always a difficult task to decide which of two innocent parties should suffer’: Re Syed Eidrus Alsagoff [1966] 1 MLJ 75 at 84 per Winslow J (Sing) (remark made in the context of ostensible authority arising out of a power of attorney).

52. Robinson v Green (1917) 36 DLR 631 at 643 per Chisholm J (SC(NS)). See also Perry v Holl (1860) 2 De GF & J 38 at 54; 45 ER 536 at 542 per Lord Campbell LC (‘although both parties are innocent, one is, generally speaking, not sorry to see that the loss has fallen on that innocent party who employed and authorized the fraudulent person, and thereby was remotely the cause of the fraud being committed’); Bartlett v First National Bank of Chicago (1910) 93 NE 337 at 340 (Ill) (‘When one of two innocent parties must suffer loss by reason of the wrongful acts of a third party, the rule is almost universal that the party who has made it possible, by reason of his negligence, for the third party to commit the wrong must stand the loss’). 53. Willey v Mayer (1994) 876 P 2d 1260 at 1266 (Colo) (a power of attorney case). 54. Abbott v UDC Finance Ltd [1992] 1 NZLR 405 at 414 per McKay J (CA) (noting that the absence of actual authority ‘will not affect the validity of a transaction which the attorney enters into on behalf of his principal with a third party, where the attorney is acting within his apparent authority and the third party is acting in good faith’). See, for example, Montaignac v Shitta (1890) 15 App Cas 357. 55. Sweeney v Howard (2007) 13 BPR 24,381; [2007] NSWSC 852; BC200706435 at [56] per Windeyer J, endorsed as correct by Macfarlan JA, with whom Giles and McColl JJA concurred, in Siahos v JP Morgan Trust Australia Ltd [2009] NSWCA 20; BC200901305 at [27]. 56. As to the strict construction of powers of attorney see 6.25–6.69. 57. Reed v Welsh (1875) 74 Ky 450 at 458 (Ky Ct App) (a good faith purchaser will ‘not be bound to … look for subtle rules of law, or to make a hypercritical analysis of the language of the power, but must be protected in his purchase made in good faith’); Parton v Robinson (1978) 574 SW 2d 679 at 682 (Ky Ct App) (‘a third party dealing with the attorney in fact is only required to look at the language of the power of attorney to determine the extent of the power’). 58. See Dal Pont, Agency, [19.17], [19.18]. 59. Villanueva v Brown (1997) 103 F 3d 1128 at 1136 (3rd Cir). See also Bank of America v Horowytz (1968) 248 A 2d 446 at 448 (NJ County Ct); Alexopoulos v Dakouras (1970) 179 NW 2d 836 at 840 (Wis); Realty Growth Investors v Council of Unit Owners of Pilot Point Condominium (1982) 453 A 2d 450 at 454 (Del) (‘A power of attorney is a written authorization used to evidence an agent’s authority to a third person’). 60. In the context of agency generally see Dal Pont, Agency, [20.39]–[20.47]. 61. Midland Bank Ltd v Reckitt [1933] AC 1 at 17 per Lord Atkin; DeBoer Construction Inc v Reliance Insurance Co (1976) 540 F 2d 486 at 491 (10th Cir) (‘Knowledge that an agent has limited authority defeats any right to rely on apparent authority’). 62. [1902] 1 Ch 816. 63. Jacobs v Morris [1902] 1 Ch 816 at 834 per Cozens-Hardy LJ. 64. Jacobs v Morris [1902] 1 Ch 816 at 830 per Vaughan Williams LJ (who held that the defendants had ‘constructive notice’ of the agent’s lack of authority to borrow). 65. Jacobs v Morris [1902] 1 Ch 816 at 833. Similar events transpired, with the same outcome, in DeBoer Construction Inc v Reliance Insurance Co (1976) 540 F 2d 486 (10th Cir) (where the plaintiff, as third party, failed to read the power of attorney and to discover the attorney’s lack of authority). 66. As to the requirement of express authorisation in this context see 6.50–6.58. 67. Sweeney v Howard (2007) 13 BPR 24,381; [2007] NSWSC 852; BC200706435 at [56] per Windeyer J (emphasis supplied), endorsed as correct, with minor qualification mentioned in the

text, by Macfarlan JA, with whom Giles and McColl JJA concurred, in Siahos v JP Morgan Trust Australia Ltd [2009] NSWCA 20; BC200901305 at [27]. 68. Siahos v JP Morgan Trust Australia Ltd [2009] NSWCA 20; BC200901305 at [27] per Macfarlan JA. 69. (1947) 75 CLR 378 at 394 per Latham CJ, at 398–9 per Starke J, at 406 per Dixon J; BC4700530. 70. [2009] NSWCA 20; BC200901305. 71. Siahos v JP Morgan Trust Australia Ltd [2009] NSWCA 20; BC200901305 at [29]. 72. DeBoer Construction Inc v Reliance Insurance Co (1976) 540 F 2d 486 at 492 (10th Cir). 73. See Dal Pont, Agency, [20.41]–[20.44]. 74. Norwich and Peterborough Building Society v Steed [1993] Ch 116 at 129 per Scott LJ. See also The Margaret Mitchell (1858) Swab 382 at 393; 166 ER 1174 at 1181 per Dr Lushington (referring to circumstances where the third party is ignorant of the attorney’s excess of authority ‘and was not called upon by circumstances to make enquiry’); National Australia Finance Ltd v Fahey [1990] 2 NZLR 482 at 484 per Fisher J (‘In general the law does not require innocent third parties dealing with a group to delve into the domestic arrangements of that group where it has appointed a representative having its apparent authority’; accordingly, the principal could not plead the alleged illegality of the domestic arrangements as a ground to deny liability to the innocent third party). Cf Protection of Personal and Property Rights Act 1988 (NZ) s 103B (‘A person dealing with an attorney acting under an enduring power of attorney in respect of any matter within the power of attorney: (a) does not have to inquire about the concurrence or otherwise of the donor or any other person; and (b) is not affected by notice that the donor or any other person has not concurred’). 75. Heine v Newman, Tannenbaum, Helpern, Syracuse & Hirschtritt (1994) 856 F Supp 190 at 195 (D NY). 76. As to the doctrine of breach of warranty of authority generally see Dal Pont, Agency, [23.80]– [23.94]. 77. See Dal Pont, Agency, [24.23]–[24.27]. 78. See Dal Pont, Agency, [24.29]–[24.38]. 79. See 1.8–1.13. 80. See 9.26–9.28. 81. [1903] AC 114. 82. (2006) 32 WAR 404; [2006] WASCA 106; BC200604321. 83. As to which see 3.19–3.23. 84. Lundie v Rowena Nominees Pty Ltd (Receiver & Manager Appointed) (in liq) (2006) 32 WAR 404; [2006] WASCA 106; BC200604321 at [53]. 85. Lundie v Rowena Nominees Pty Ltd (Receiver & Manager Appointed) (in liq) (2006) 32 WAR 404; [2006] WASCA 106; BC200604321 at [53]. 86. As appears from the judgment of the English Court of Appeal in Yonge v Toynbee [1910] 1 KB 215. 87. ALRI (DP), p 106. 88. See 12.2, 12.3. 89. See 12.8 (ACT), 12.11 (NSW), 12.14–12.16 (NT), 12.17 (Qld), 12.21 (SA), 12.24 (Tas), 12.28,

12.29 (Vic), 12.32 (WA). 90. Salter v Cormie (1993) 108 DLR (4th) 372 at 377 (CA(Alta)). 91. Brownett v Newton (1941) 64 CLR 439 at 445; BC4100028 per Starke J. 92. V/O Rasnoimport v Guthrie & Co Ltd [1966] 1 Lloyd’s Rep 1 at 11 per Mocatta J. 93. Brown v Heffer (1967) 116 CLR 344 at 348; BC6700340 per Barwick CJ, McTiernan, Kitto and Owen JJ. As to the doctrine of ademption in this context see generally G E Dal Pont and K F Mackie, Law of Succession, LexisNexis Butterworths, Australia, 2013, [7.23]–[7.41]. 94. Re Slater [1907] 1 Ch 665 at 672 per Cozens-Hardy MR; Re Stokell (1913) 9 Tas LR 7. 95. See, for example, Estate of Graham (1975) 533 P 2d 1318 (Kan) (where, in order to avoid an ademption, the court refused to allow an attorney under an enduring power to sell property specifically bequeathed by the principal). In British Columbia and Ontario this is given effect by statute (Power of Attorney Act 1996 (BC) s 19(3)(d); Substitute Decisions Act 1992 (Ont) s 35.1) and the same has been proposed in Nova Scotia (see NSLRC (DP), pp 136–7). Cf WCLRA, p 38 (which rejected any broader duty to preserve the principal’s testamentary intentions because it would require an attorney to have a copy of the principal’s will, which would in turn be an ‘unjustified intrusion’ into the principal’s privacy; however, it accepted that if the principal’s testamentary wishes are known by the attorney, the attorney should respect those wishes). 96. After all, at general law the attorney has no entitlement, in that capacity, to access the principal’s will: see 8.95. 97. Cf Banks v National Westminster Bank plc [2005] EWHC 3479 (Ch) (where the attorney’s sale, under her authority under an enduring power, of property the subject of a specific gift in the principal’s will, was held to adeem the gift; Judge Rich QC reached this conclusion reluctantly, but saw it as a matter for Parliament, and ‘not within the scope of amendment by judicial pronouncement to avoid this result’: at [30]). 98. [1997] 1 Qd R 110. 99. See, for example, Re Affairs of Hartigan (SC(WA), Parker J, 9 December 1997, unreported) BC9707385 (who ‘found the analysis of the position and reasoning of Thomas J helpful and persuasive’, adding that ‘[t]he heart of that reasoning turns on the sale of property by a person other than the testator at a time when the testator is incapable of selling the property or of altering an existing will to give effect to the testator’s intentions in the changed circumstances’: at 10); Johnston v Maclarn [2002] NSWSC 97; BC200200525; Mulhall v Kelly (2006) 1 ASTLR 394; [2006] VSC 407; BC200608993; Ensor v Frisby [2010] 1 Qd R 146; [2009] QSC 268; BC200908165; Power v Power [2011] NSWSC 288; BC201102520 at [36] per Gzell J (who did not, however, express a concluded view because on the facts that the sale under the power of attorney was made without authority); Simpson v Cunning (2011) 4 ASTLR 584; [2011] VSC 466; BC201107296; Public Trustee of Queensland v Lee (2011) 5 ASTLR 142; [2011] QSC 409; BC201110041. 100. Simpson v Cunning (2011) 4 ASTLR 584; [2011] VSC 466; BC201107296 at [46] per Hargrave J. 101. See, for example, Re Affairs of Hartigan (SC(WA), Parker J, 9 December 1997, unreported) BC9707385 (application by the Public Trustee, although Parker J phrased the relevant principle more broadly, such that ‘it ought not to be a material distinction whether or not the person effecting the sale knew of the terms of the will’: at 10); Simpson v Cunning (2011) 4 ASTLR 584; [2011] VSC 466; BC201107296 (application by the Public Advocate, although Hargrave J also phrased the relevant principle more broadly, opining that ‘[t]here is no good reason to limit it to circumstances where the attorney has no knowledge of the terms of the will, and thus of the

possible effect of the ademption principle following a sale’: at [47]). 102. Simpson v Cunning (2011) 4 ASTLR 584; [2011] VSC 466; BC201107296 at [45] per Hargrave J. 103. (2012) 84 NSWLR 263; [2012] NSWCA 39; BC201201586. 104. NSW Trustee and Guardian Act 2009 (NSW) s 83. 105. RL v New South Wales Trustee and Guardian (2012) 84 NSWLR 263; [2012] NSWCA 39; BC201201586 at [91]. 106. Parallel statutory provisions exist in most jurisdictions relating to persons subject to guardianship orders: Aged and Infirm Persons’ Property Act 1979 (NT) s 22; NSW Trustee and Guardian Act 2009 (NSW) s 83; Guardianship and Administration Act 2000 (Qld) s 60 (see also Public Trustee Act 1978 (Qld) s 89); Aged and Infirm Persons’ Property Act 1940 (SA) s 16A; Guardianship and Administration Act 1995 (Tas) s 60; Guardianship and Administration Act 1986 (Vic) s 53. 107. Cf ALRI (DP), pp 77–8 (which recommended that the proposed enduring powers legislation should not address this issue because ademption resulting from the act of someone other than the testator is not an issue which is peculiar to enduring powers, and should be considered in the context of reform of the law of ademption as a whole, rather than in the limited context of enduring powers); Law Com 122, pp 40–1 (which proposed no special rules to cover the possibility of ademption); TLRC, p 16. 108. Trust Co Ltd v Gibson [2012] QSC 183; BC201205055 at [21]–[28] per Mullins J. 109. In New South Wales the legislation states that a person is named as a beneficiary under a will for this purpose if he or she: (a) is referred to by name in the will as being a beneficiary; or (b) answers a description of a beneficiary, or belongs to a class of persons specified as beneficiaries, under the will: Powers of Attorney Act 2003 (NSW) s 22(6). 110. ‘Dealing’ is defined in Real Property Act 1900 (NSW) s 3(1); Powers of Attorney Act 2000 (Tas) s 32AH(1). 111. Powers of Attorney Act 2003 (NSW) s 22(1); Powers of Attorney Act 2000 (Tas) s 32AH(2) (inserted by the Powers of Attorney Amendment Act 2013 (Tas), and applies to, and in relation to, an enduring power of attorney created before the provision commences (1 January 2014), but only if the donor of the power is not mentally incapacitated before it commences: s 58B(12)). 112. Powers of Attorney Act 2003 (NSW) s 22(2); Powers of Attorney Act 2000 (Tas) s 32AH(3). 113. In New South Wales this application must be made within six months from the date of the grant or resealing in New South Wales of probate of the will or letters of administration unless the court, after hearing such of the persons affected as it thinks necessary, extends the time for making the application: Powers of Attorney Act 2003 (NSW) s 23(3). An extension of time may be granted on such conditions as the court thinks fit, and whether or not the time for making an application has expired: s 23(4). No explicit time limit is placed on applications in Tasmania. 114. Powers of Attorney Act 2003 (NSW) s 23(1)(b); Powers of Attorney Act 2000 (Tas) s 32AH(4). 115. Powers of Attorney Act 2003 (NSW) s 23(2); Powers of Attorney Act 2000 (Tas) s 32AH(5). 116. Powers of Attorney and Agency Act 1984 (SA) s 11A(1). 117. The Queensland Civil and Administrative Tribunal is given the same jurisdiction and powers for enduring powers of attorney as the Supreme Court: Powers of Attorney Act 1998 (Qld) s 109A. 118. Powers of Attorney Act 1998 (Qld) s 107(1), 107(1A), 107(2). 119. Powers of Attorney Act 1998 (Qld) s 107(3). In Neuendorf v Public Trustee of Queensland [2013]

QSC 156; BC201310253 at [22] Martin J noted that while the matters that might be the subject of consideration when determining an appropriate level of compensation will vary from case to case, some matters will always be of general interest, including: (a) the size of the estate; (b) the identity of the other beneficiaries and the nature of the gifts to them; (c) the proportions that the gifts to the applicants bear to the whole estate; (d) the actions of the attorney; (e) whether there was any default by the attorney; (f) whether any action could or might have been taken under s 106 (see 8.9); (g) what was done with the funds after the sale took place; (h) the costs which have been incurred and which will be paid out of the estate; and (i) what the position would have been had the property not been sold. In Neuendorf a principal had executed an enduring power of attorney appointing the first applicant as attorney. The principal’s will bequeathed a house to the applicants, and the first applicant was appointed executor of the will. As a bond was required for the principal’s nursing home, the first applicant sold the house in question ignorant of the contents of the will. The applicants succeeded in an application for compensation pursuant to s 107, Peter Lyons J seeing this as a case where actions properly taken have resulted in a loss to the attorney and in which s 107 should respond in the attorney’s favour with an award of appropriate compensation: at [32]. See also Moylan v Rickard [2010] QSC 327; BC201010256; Public Trustee of Queensland v Stibbe [2012] QSC 357; BC201210997. 120. Powers of Attorney Act 1998 (Qld) s 107(5). 121. Ensor v Frisby [2010] 1 Qd R 146; [2009] QSC 268; BC200908165 at [20] per McMurdo J.

[page 257]

Chapter 10

External Supervision of Attorneys

Australian Capital Territory At tribunal level At Supreme Court level New South Wales ‘Reviewable powers of attorney’ Standing Jurisdiction Application for advice or directions concerning reviewable powers of attorney Court orders confirming power understood or affirmed by the principal Northern Territory Enduring powers of attorney preceding 17 March 2014 Advance personal plans from 17 March 2014 Jurisdiction relating to court declarations and orders Jurisdiction to amend (or revoke) advance personal plan Appeals to the Supreme Court Queensland South Australia Tasmania

10.4 10.4 10.5 10.7 10.7 10.7 10.9 10.10 10.11 10.12 10.12 10.13 10.13 10.14 10.15 10.16 10.18 10.20

Guardianship and Administration Board hearing in respect of enduring powers Advice or directions by the Guardianship and Administration Board Jurisdiction of the court Victoria VCAT jurisdiction regarding enduring powers VCAT rehearings Appeals from VCAT to the Supreme Court Protection for attorney complying with advice, direction or recommendation

10.20 10.22 10.23 10.24 10.24 10.25 10.26 10.27

[page 258] Western Australia Application to the State Administrative Tribunal regarding enduring powers Appeals to the court

10.28 10.28 10.29

10.1 Aside from causes of action recognised at general law as between principal and attorney, or as between principal or attorney and third parties, courts have no inherent or general jurisdiction to hear matters relating to powers of attorney and their administration. Courts lack the inherent jurisdiction, as they have assumed over the administration of trusts, for instance, in the case of powers of attorney. Of course, courts (or relevant tribunals) can entertain applications aimed at enforcing statutory duties or claims, provided that legislation vests in the relevant body the jurisdiction to do so. Mention has been made of the jurisdiction to order compensation conferred by statute,1 and the statutory

power to relieve attorneys from their breaches of duty in the Australian Capital Territory, Queensland and (shortly) Victoria.2 Appearing below is an overview of how the curial jurisdiction at law has been broadened by statute and its extension to tribunals whose entire jurisdiction arises out of statute. The lack of detail commonality between jurisdictions (unfortunately) requires each to be treated separately. In each case, though, the statutory jurisdiction is not directed at ousting existing jurisdiction in courts to hear matters derived from the general law.3 10.2 What the following reveals is that provision for external superintendence over the exercise of an attorney’s authority is, almost exclusively, directed to the enduring power of attorney. There is good reason for this. Having lost mental capacity, a principal’s practical ability to monitor the proper exercise of the attorney’s authority may be minimal,4 especially as there is no encompassing duty on the attorney to inform, or consult with, the principal in this event.5 There may, nonetheless, be others with an interest in the principal’s affairs (family and friends being the most obvious candidates), who may perform an oversight function. However, those persons cannot (except as prescribed by the power itself) direct an attorney in the exercise of authority, and so must rely on standing to bring their concerns to an independent body. The extension of standing in this context to ‘interested persons’ (or the like) in each jurisdiction is a step aimed at reducing the potential for an attorney abusing his or her authority and thereby undermining the trust invested in him or her by the principal. 10.3 The ensuing discussion also reveals that statute in several jurisdictions empowers the court to give attorneys under enduring powers advice or direction in [page 259] the exercise of their authority. Unlike in the case of trusts,6 the court arguably lacks the power to give this advice outside of statute,7 although pursuant to the latter it is arguable that the approach to the giving of advice aligns with that applicable in the trusts context.8 For attorneys under enduring powers this may be of significance, as attorneys in these circumstances cannot, once

the principal has lost mental capacity, necessarily be directed by the principal.

Australian Capital Territory At tribunal level 10.4 The Guardianship and Management of Property Act 1991 (ACT) vests in the ACT Civil and Administrative Tribunal (ACAT) various, potentially extensive, powers over enduring powers of attorney where the principal has impaired decision-making capacity.9 It empowers ACAT, whether on application or on its own initiative, on hearing a matter under the Act, to:10 give a direction, not inconsistent with the Powers of Attorney Act 2006 (ACT) or the power of attorney itself, that the attorney do or not do a stated act; direct the attorney to produce stated books, accounts or other records of transactions carried out by the attorney for the principal;11 revoke the power of attorney, or part of it; or make a declaration about the interpretation or effect of the power of attorney. Such an application may be made by an interested person12 or, with leave of ACAT, someone else.13 If ACAT revokes the power, it may appoint a guardian or manager [page 260] for the person who was the principal.14 ACAT is also empowered, in relation to an enduring power of attorney if the principal has impaired decisionmaking capacity, to order the removal of an attorney if satisfied that this is in the interests of the principal.15 Pursuant to an application, ACAT may refer the matter, or part of the

matter, to the Supreme Court.16 In deciding whether to refer a matter, ACAT may take into consideration anything it considers relevant, and must take into consideration whether the matter relates to the effect of the power on people other than the attorney or principal, and whether it is likely to raise for consideration complex or novel legal issues that the court is better suited to decide.17

At Supreme Court level 10.5 The Supreme Court has jurisdiction to hear a reference from ACAT as noted above. If the court, or ACAT, gives an order or direction in relation to the exercise of power under a power of attorney, an attorney who acts in accordance with the order or direction is taken to have complied with the Powers of Attorney Act 2006 (ACT)18 (unless the attorney knowingly gave the court or ACAT false or misleading information relevant to the order or direction).19 The court’s jurisdiction extends by the 2006 Act to the confirmation of powers understood, or later affirmed, by a principal. It entitles a principal who has decision-making capacity20 to apply to the court for an order confirming that an attorney had power under a power of attorney to do an act.21 The court may, in response, make an order confirming (completely or in part) the attorney’s power if satisfied that the principal understood the nature and effect of making the power of attorney when granting that power.22 10.6 If a principal had impaired decision-making capacity23 when making a power of attorney, and an attorney acted (or purported to act) under that power, the principal may likewise apply to the court for an order confirming that the attorney had power under the power of attorney to do the act.24 The court may confirm (completely or in part) the attorney’s power if satisfied that the principal affirmed the power of attorney before or during the proceeding on the application, and had decision-making capacity when affirming the power of attorney.25 If the court makes either of those orders, any act of the attorney after the order takes effect that is within the scope of the power confirmed is taken to be ‘as valid for all purposes and between all people as if, when the order took

effect, the principal did not have impaired decision-making capacity and had confirmed the power of attorney to the extent of the order of confirmation’.26 [page 261]

New South Wales ‘Reviewable powers of attorney’ Standing 10.7 The Powers of Attorney Act 2003 (NSW) provides that a ‘review tribunal’ — which means the Civil and Administrative Tribunal (NCAT)27 or the Supreme Court28 — may, upon the application of an ‘interested person’, decide whether or not to review the making (or, from 13 September 2013, the revocation)29 or the operation and effect, of a ‘reviewable power of attorney’.30 If a function is conferred on a ‘review tribunal’, rather than the court or NCAT by name, the jurisdiction to exercise it vests in each review tribunal concurrently, but an applicant to one review tribunal for the exercise of a function is precluded from applying to the other review tribunal for the exercise of the same function in respect of the same (or substantially the same) matter.31 Provision is made for each review tribunal to refer an application to the other review tribunal.32 10.8 It follows that the scope of the relevant jurisdiction rests on identifying the parameters of the phrases ‘reviewable power of attorney’ and ‘interested person’. The Act identifies a power of attorney as a ‘reviewable power of attorney’ if the review tribunal to which the application is to be made has jurisdiction to deal with the application as prescribed by the Act.33 It vests in both NCAT and the Supreme Court the jurisdiction to deal with an application in respect of an enduring power of attorney, including a revocation of that power.34 Only the court, though, also has jurisdiction to deal with an application in respect of any other power of attorney given by a principal who is incommunicate35 for the time being.36

[page 262] In addition to an attorney (including an attorney whose appointment has been purportedly revoked), the principal and any guardian of the principal,37 an ‘interested person’ encompasses ‘any other person who, in the opinion of the review tribunal, has a proper interest in the proceedings or a genuine concern for the welfare of the principal’.38 Each of the following persons is a ‘party to an application’: the applicant; each attorney under the power (if the attorney is not the applicant); the principal (if the principal is not the applicant); and any other person that the review tribunal concerned has joined as a party.39

Jurisdiction 10.9 As a consequence of reviewing the making or operation and effect of a reviewable power of attorney, a review tribunal may, despite anything to the contrary in the instrument creating the power,40 decide whether or not to make an order of the kind listed in the legislation, subject to such terms and conditions as it thinks fit41 (except in relation to irrevocable powers).42 The listed orders fall within the following categories: Orders relating to the making or revocation of a power of attorney. Orders of this kind encompass an order declaring that the principal did or did not have mental capacity to make or revoke a valid power of attorney, and/or an order declaring that the power of attorney is invalid (either in whole or in part) if satisfied that the principal lacked sufficient capacity to make or revoke it, the power did not comply with other requirements of the Act, or the power or its revocation is invalid for any other reason (for example, it was induced by dishonesty or undue influence).43 Orders relating to the operation and effect of a power. If satisfied that it would be in the best interests, or better reflect the wishes, of the principal, a review tribunal may make:44 –

an order varying a term of, or a power conferred by, the power of attorney;45

–

an order removing a person from office as an attorney;

–

an order appointing a substitute attorney to replace an attorney whom it has removed from office or who otherwise vacates the office; [page 263]

–

an order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of an attorney,46 and appointing a substitute attorney to replace the attorney who vacated office;

–

an order requiring: (i) an attorney to furnish accounts and other information to the tribunal or to a person nominated by the tribunal;47 (ii) an attorney to lodge with the tribunal a copy of records and accounts of dealings and transactions made under the power; (iii) that those records and accounts be audited, and a copy of the audit report be furnished to the tribunal; and/or (iv) an attorney to submit to the tribunal for approval a plan of financial management;

–

an order revoking all or part of the power of attorney; and/or

–

such other orders as the review tribunal thinks fit.

Orders relating to the mental capacity of the principal. If the review tribunal makes an order declaring that the principal lacked or lacks capacity at a specified time or during a specified period or for the time being, the principal cannot lawfully revoke an enduring power of attorney during the duration of that order.48 If the order declares a principal under a reviewable power of attorney to lack mental incapacity for the time being, the principal is taken, for the purposes of the operation of the power of attorney, to lack that capacity for such period (if any) specified in the order or until further order of the tribunal.49

Application for advice or directions concerning reviewable powers of attorney

10.10 An attorney under a reviewable power of attorney may apply to a review tribunal for advice or direction on any matter relating to the scope of the attorney’s appointment or the exercise of any function by the attorney under the power.50 In determining any such application, a review tribunal may decide to approve or disapprove of any act proposed to be done by the attorney, give such advice or direction as it considers appropriate, or vary the effect of the power or make any other order it could make in an application to review the making, or operation and effect, of a ‘reviewable power of attorney’.51 No proceedings lie against an attorney for or on account of any act, matter or thing done or omitted to be done by the attorney in good faith and in accordance with any such approval, advice or direction.52

Court orders confirming power understood or affirmed by the principal 10.11 Statute in New South Wales vests jurisdiction in the Supreme Court to confirm powers understood, or later affirmed, by a principal in essentially the same [page 264] terms as the equivalent jurisdiction vested by statute by the Australian Capital Territory legislation.53 But it adds a unique provision that entitles the court, on the application of a principal under any power of attorney, to confirm (whether in whole or in part) any power to do an act under the power of attorney if it appears to the court that:54 the principal is incapable of affirming the power because of the continuation of mental incapacity that affected the principal when giving the power, or because the principal is incommunicate;55 and it is for the benefit of the principal that the power be confirmed in whole or in part. The foregoing only applies, however, if and to the extent that a contrary intention is not stated in the instrument creating the power of attorney, and has effect subject to the terms of the instrument creating the power.56

Like its Australian Capital Territory equivalent, though, the legislation states that any act done by the attorney after the confirming order takes effect that is within the scope of the power is, to the extent it is confirmed, ‘taken to be as good for all purposes and between all persons as if, at the time when the order took effect, the principal were of full capacity and had in due form confirmed the power of attorney to the extent of the order of confirmation’.57

Northern Territory Enduring powers of attorney preceding 17 March 2014 10.12 For enduring powers of attorney created by an instrument executed before 17 March 2014,58 the Powers of Attorney Act 1980 (NT) entitles the Public Trustee or any other person who has an interest in any property that may be dealt with by the attorney, at any time after the principal is legally incapacitated, to apply to the Supreme Court for an order, that may be subject to such terms and conditions as the court thinks fit:59 requiring the attorney to file in the court and serve on the applicant for the order, a copy of the accounts required to be kept;60 requiring those accounts to be audited, and that a copy of the audit report be furnished to the court and the applicant for the order; or revoking or varying the terms of the instrument creating the power in such manner as the court thinks fit (including by the appointment of a substitute attorney, which can be the Public Trustee). [page 265]

Advance personal plans from 17 March 2014 Jurisdiction relating to court declarations and orders 10.13

The Local Court has jurisdiction to hear and determine all matters

arising in relation to the Advance Personal Planning Act 2013 (NT),61 which establishes a regime that subsumes the former enduring power of attorney into a broader advance personal plan. The Act empowers an adult to confer upon a decision-maker authority under such a plan not only for financial matters but also specified health and lifestyle matters.62 In proceedings under the Act, the court may make a declaration as to, inter alia:63 whether an adult has impaired decision-making capacity64 for a matter; whether or not an advance personal plan is valid; whether or not a decision-maker has authority for a matter; the scope of the authority of a decision maker; any other matter relating to the validity, effect or meaning of an advance personal plan. A proceeding must be started by way of application by either the affected adult or an interested person for the affected adult.65 The court may, on hearing the matter, make orders as to the exercise by a decision-maker of his or her authority,66 including to address a deadlock between joint attorneys and approving reimbursement or remuneration for the decision-maker,67 but not contrary to an express provision of the advance personal plan in issue.68

Jurisdiction to amend (or revoke) advance personal plan 10.14 Where a person who has made an advance personal plan loses planning capacity,69 there are ‘grounds for amending’ the plan if one or more of the following applies:70 giving effect to the plan is, for all practical purposes, impossible; giving effect to the plan is unlawful; there is no reasonable possibility the adult would have intended the plan to have the effect that it has or will have; giving effect to the plan would be so unreasonable that it is justifiable to override the adult’s wishes;

[page 266] when making the plan (or an amendment of it) the adult was not acting voluntarily, or was adversely affected by the dishonesty or undue influence of another person; a decision maker appointed by the plan has failed to comply with the terms of the plan and applicable decision-making principles;71 there has been a major change in circumstances since the plan was made;72 the adult has two or more agents and an amendment of the plan is necessary to facilitate a reasonable and workable division of decisionmaking authority. If there are ‘grounds for amending’ the advance personal plan, the court may do so if satisfied that the amendment is reasonably necessary to address those grounds and that, if the adult had planning capacity, he or she would agree to the amendment.73 However, the court may amend the advance personal plan so as to terminate the appointment of a person as a decisionmaker only if satisfied that doing so is the only practicable way to address those grounds.74 The Act makes provision for the court to revoke an advance personal plan if satisfied that to do so is the only practicable way to address existing grounds for amending the plan and that, if the adult had planning capacity, he or she would agree to the revocation.75

Appeals to the Supreme Court 10.15 An appeal to the Supreme Court against a decision of the Local Court may be made by a party to the proceeding or, with leave of the Supreme Court, by another interested person for the affected adult.76 At the hearing of an appeal, fresh evidence or evidence in addition to, or in substitution for, the evidence before the Local Court may be given.77 After hearing an appeal, the Supreme Court must either confirm, vary or set aside the original decision. In the event that the original decision it set aside, the Supreme Court may either replace it with the court’s own decision or refer the matter back to the Local Court for reconsideration.78

Queensland 10.16 The Powers of Attorney Act 1998 (Qld) makes provision for an application to be made to the Supreme Court for a declaration, order, direction, recommendation or advice about something in, or related to, the Act.79 Importantly, unlike in the other jurisdictions, this is not limited to enduring powers; it can encompass non-enduring [page 267] powers, whether or not made under the Act.80 An applicant may be the principal, a member of the principal’s family,81 an attorney, the adult guardian or public trustee, or an interested person.82 A person joined as a party to a proceeding under the Act, or a person the court considers an interested person, may participate in the proceeding.83 Pursuant to an application, the Act locates in the court wide-ranging powers, namely the powers to: make a declaration about a person’s capacity,84 and a declaration that the principal has impaired capacity for a matter or all matters;85 decide the validity or otherwise of a power of attorney,86 and to make a declaration of invalidity if satisfied that the principal lacked the capacity necessary to make it, the power did not comply with the other requirements of the Act, or it is invalid for another reason (say, that it was induced by dishonesty or undue influence).87 If the power is declared invalid, it is void from the start,88 but the court may at the same time appoint one or more attorneys for the principal;89 make a declaration that a power, under a power of attorney, has begun;90 by order, remove an attorney and appoint a new attorney in his or her stead, or remove a power from an attorney and give the removed power to another attorney or to a new attorney;91 by order, change the terms of a power of attorney, or revoke all or part of a power92 (which it may do, inter alia, if it considers the principal’s or other circumstances have changed to the extent that one or more terms

of the power are inappropriate);93 give directions or advice, or make a recommendation, order or declaration about a matter related to the Act, including about the interpretation of the terms of a power of attorney or the exercise of an attorney’s power.94 An attorney who acts in compliance with the court’s advice, directions or recommendations is taken to have complied with the Act unless the attorney knowingly gave the court [page 268] false or misleading information relevant to the court’s advice, directions or recommendations;95 for an attorney under an enduring power of attorney, order the attorney to file in the court, and serve on the applicant, a summary (or a more detailed account) of receipts and expenditure under the power for a specified period, that the accounts be audited and a copy of the auditor’s report be given to the court and the applicant, or that the attorney present a plan of management for approval.96 Without limiting the court’s power in the penultimate dot point, if the court considers it in the best interests of the principal, it may, subject to the terms it considers appropriate, authorise an attorney, either generally or in a specific case, to undertake a transaction that the attorney is not, or may not be, otherwise authorised to undertake.97 10.17 The above powers, to the extent that they involve an enduring power of attorney, also come within the jurisdiction of the Queensland Civil and Administrative Tribunal (QCAT).98 Under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) provision exists for QCAT decisions to be appealed to an appeal panel of QCAT99 or to the Supreme Court.100

South Australia 10.18

The Powers of Attorney and Agency Act 1984 (SA) states that any

person who has, in the opinion of the Supreme Court, a proper interest in the matter may, at any time, apply to the court for an order:101 requiring the attorney (or former attorney) of an enduring power to file in the court and serve on the applicant a copy of all records and accounts kept by the attorney of dealings and transactions made by him or her in pursuance of the power; requiring those records and accounts to be audited, and a copy of the audit report to be furnished to the court and the applicant for the order; or revoking or varying the terms of an enduring power or appointing a substitute attorney of such a power.102 10.19 The Act also empowers the court to receive applications from attorneys under enduring powers for advice and direction as to matters connected with the exercise of those powers or the construction of their terms.103 Such an order, declaratory or otherwise, may be made subject to such terms and conditions as the court thinks fit.104 [page 269]

Tasmania Guardianship and Administration Board hearing in respect of enduring powers 10.20 The Powers of Attorney Act 2000 (Tas) empowers the Guardianship and Administration Board — whether on its own motion, or pursuant to an application105 by an attorney, the principal (or a person on the principal’s behalf) or any other person who it believes has a proper interest in the matter — to hold a hearing106 to review an enduring power of attorney.107 The Board may dismiss an application for review if it is of the opinion that the application is frivolous, vexatious or lacking in substance.108 On any review, the Board may, by order:109

vary a term of, or a power conferred by, the power of attorney; appoint a substitute attorney; appoint an administrator110 of the estate of the principal if he or she is over the age of 18 years; declare that the principal did or did not have mental capacity to make or revoke a valid power of attorney; declare that the power of attorney or its revocation is invalid if satisfied that the principal lacked mental capacity, it does not comply with the other requirements of the Act, or it has been induced by dishonesty or undue influence or is invalid for any other reason; revoke the power of attorney and, if the principal is over the age of 18 years and the Board thinks fit, appoint an administrator of his or her estate;111 or make such other order as to the exercise of the power, or the construction of its terms, as the Board thinks fit. 10.21 If the Board considers it proper to do so by reason of urgency, it may suspend the attorney under an enduring power of attorney, upon which the attorney ceases, for the period of the suspension, to be authorised to take any action under the power of attorney. The Board may appoint the Public Trustee or any other person as a substitute attorney to act in the place of the suspended attorney for the period for which the suspension remains in force, and make such other orders, and give such other directions, as to the exercise of the power as it thinks fit.112 As from 1 January 2014, equivalent provision for suspension is made for an attorney’s failure to comply with a direction of the Board, and for both the revocation of that suspension as well as the revocation of the power itself depending on the attorney’s attitude to compliance.113 [page 270] The Board is not required to give notice to any person or to hold a hearing before making any of the above orders, but must make inquiries or investigations as are appropriate. It may act on a request made, or information

received, by telephone or any other means that it considers appropriate in the circumstances.114 Orders of this kind may be made subject to such terms and conditions as the Board thinks fit, remains in effect for a period, not exceeding 28 days, as the Board determines, and may be renewed once only for a period not exceeding 28 days.115

Advice or directions by the Guardianship and Administration Board 10.22 An attorney under an enduring power may apply116 for advice or direction by the Guardianship and Administration Board on any matter relating to the scope of his or her appointment or the exercise of any power under the enduring power.117 The Board may approve or disapprove of any act proposed by the attorney, give advice or direction as it considers appropriate, vary the effect of the enduring power, or make any other order that it could have made on an application under the preceding sub-heading.118 An attorney who contravenes the court’s direction is guilty of an offence and is liable on summary conviction to a fine.119 Without limiting the above powers, the Board may require an attorney to lodge with it a copy of all records and accounts kept by the attorney pertaining to dealings and transactions under the power, require those records and accounts to be audited and a copy of the audit report to be furnished to the Board, or require the attorney to submit a plan of financial management to the Board.120

Jurisdiction of the court 10.23 The Supreme Court’s jurisdiction over enduring powers of attorney, except as conferred by other statutory provisions or by the general law pursuant to claims available at general law, arises out of the hearings or determinations of the Guardianship and Administration Board. There are two ways, as regards the latter, that a matter comes before the court. The first is that a question of law arising in a hearing before the Board may, whether on the Board’s own motion or on the application of a person to whom notice of the hearing has been given, be reserved in the form of a special case stated for the opinion of the court.121

The second is by an appeal to the court from a determination of the Board, brought by either the principal, the attorney, or a person who appeared (or was entitled to appear) before the Board at the relevant hearing or who would have been entitled to appear with the leave of the Board.122 An appeal may be brought as of right on a question of law, but only with the leave of the court on any other question.123 It must be instituted within 28 days of the day on which the Board’s determination was made, [page 271] or within such further time as the court may allow.124 The court, having heard and determined the appeal, may make an order confirming the Board’s determination, setting aside the determination and remitting the matter to the Board with directions, or substituting its own determination.125

Victoria VCAT jurisdiction regarding enduring powers 10.24 The Instruments Act 1958 (Vic) makes provision for applications to the Victorian Civil and Administrative Tribunal (VCAT) for a declaration, order, direction or recommendation about any matter or question relating to the scope of an attorney’s powers under an enduring power of attorney, the exercise of any power by an attorney under an enduring power, or any other thing in or related to Pt XIA of the Act (which governs enduring powers).126 Equivalent provision is made in the Powers of Attorney Act 2014 (Vic),127 which upon its commencement will replace the relevant sections in the 1958 Act. Persons granted standing to apply are the Public Advocate,128 the principal, an attorney or another person whom VCAT is satisfied has a special interest in the affairs of the principal.129 The Act also lists those persons to whom notice must be given of any such application.130 Pursuant to an application, or on its own initiative, VCAT has broad powers in relation to the operation of enduring powers. These include the power to:

revoke the appointment of an attorney under an enduring power if satisfied that it is in the best interests of the principal to do so and that the principal lacks the capacity to make an enduring power;131 declare an enduring power to be invalid if satisfied that the principal lacked capacity at the time the enduring power was made, the enduring power does not comply with the requirements of the Act, or the enduring power is invalid for another reason (say, due to it being induced by dishonesty or undue influence), in which case the power is void from the start;132 make a declaration or recommendations, or give any directions it considers necessary in relation to an enduring power, vary its effect, suspend it for a specified period (either generally or in respect of a specific matter), or make any order it considers necessary in relation to the power of attorney;133 [page 272] give an advisory opinion on any matter relating to an enduring power that is referred to it by a person with standing to make an application;134 or order the attorney to lodge with VCAT accounts or other documents relating to the exercise of the enduring power for a specified period, that the accounts be examined or audited and that a copy of the resulting report be given to VCAT and the applicant.135

VCAT rehearings 10.25 If VCAT makes an order in respect of an application referred to above (other than an order suspending an enduring power of attorney), a person entitled to notice of the application may, within 28 days after the day of the order, apply to VCAT for a rehearing of the application.136 Leave is required if the applicant (excepting the Public Advocate) was not, or did not become, a party to the original application.137 But a person cannot apply for a rehearing of an application if the order was made by VCAT constituted by

the President, whether with or without others, or the application was for a rehearing or for leave to apply for a rehearing.138 A party to the original application is a party to a rehearing of the application, in addition to any other parties.139 Persons entitled to notice of the making of the original application are entitled to notice of an application for a rehearing.140 VCAT may make an order staying the operation of an order pending the determination of the rehearing pertaining to that order, but otherwise an application for a rehearing does not affect the operation of the original order.141 On an application for a rehearing, VCAT has all the functions and powers that it had regarding the matter at first instance.142 It may, in determining a rehearing, affirm its original order, vary that order, or set aside that order and make another order in its place.143

Appeals from VCAT to the Supreme Court 10.26 Any scope to appeal VCAT’s order rests on the general appeal provisions found in the Victorian Civil and Administrative Tribunal Act 1998 (Vic) Pt 5. Under that Act, a party to a proceeding may appeal a VCAT order in the proceeding, on a question of law and with leave of the court, to the Court of Appeal (if the tribunal was [page 273] constituted for the purpose of making the order by the President or a Vice President, whether with or without others) or otherwise to the Trial Division of the Supreme Court.144 An application for leave to appeal must be made no later than 28 days after the day of the VCAT order, and if leave is granted the appeal must be instituted within 14 days of that grant,145 although in each case the court may at any time extend or abridge these time limits.146 On an appeal, the court may make an order affirming, varying or setting aside the VCAT order, an order that VCAT could have made in the proceeding, an order remitting the proceeding to be heard and decided again

by VCAT in accordance with the directions of the court,147 and any other order the court thinks appropriate.148

Protection for attorney complying with advice, direction or recommendation 10.27 An attorney under an enduring power who acts in compliance with the advice, directions or recommendations of VCAT or the court in relation to that power is deemed to have complied with the statutory requirements relating to enduring powers unless the attorney knowingly gave the court or VCAT false or misleading information relevant to the advice, directions or recommendations.149

Western Australia Application to the State Administrative Tribunal regarding enduring powers 10.28 The Guardianship and Administration Act 1990 (WA) grants standing to a person who has, in the opinion of the State Administrative Tribunal, a proper interest in the matter, to apply to the tribunal for an order:150 requiring the attorney under an enduring power of attorney to file with the tribunal, and serve on the applicant, a copy of records and accounts kept by the attorney of dealings and transactions made in connection with the power;151 requiring those records and accounts to be audited, and a copy of the audit report to be furnished to the tribunal and the applicant; or revoking152 or varying153 the terms of an enduring power, appointing a substitute attorney, or confirming that a person appointed to be the substitute attorney of the power has become the attorney. [page 274]

Also, the attorney under an enduring power may apply to the tribunal for an order referred to in the third dot point above, or for directions as to matters connected with the exercise of the power or the construction of its terms.154 Upon an application or upon receiving a report of an attorney’s bankruptcy,155 the tribunal may make any of the above orders, or any other order as to the exercise of the power or the construction of its terms as it thinks fit.156 Any such order may be made subject to such terms and conditions as the tribunal thinks fit.157 An application for an order may be made ex parte, or the tribunal may give directions as to the persons to whom notice of the application must be given and who is entitled to be heard.158

Appeals to the court 10.29 Any scope to appeal the tribunal’s order rests on the general appeal provisions found in the State Administrative Tribunal Act 2004 (WA) Pt 5. An appeal can be brought on a question of law only, and then only with leave of the court.159 The relevant court is the Supreme Court, but if a judicial member made the tribunal’s decision, or members including a judicial member constituted the tribunal, the appeal lies to the Court of Appeal.160 An application for leave must be made within 28 days of the tribunal’s decision being given,161 and if leave is granted the appeal must be instituted within 21 days,162 although in each case the court may extend these time limits.163 In dealing with the appeal, the court may affirm, vary, or set aside the tribunal’s decision, make any decision that the tribunal could have made in the proceeding, send the matter back to the tribunal for reconsideration in accordance with directions or recommendations that it considers appropriate,164 or make any order it considers appropriate.165

1.

See 8.8–8.10.

2.

See 8.11–8.18.

3.

Szozda v Szozda [2010] NSWSC 804; BC201005102 at [16]–[19] per Barrett J.

4.

This is not to suggest that all principals will necessarily monitor their attorney’s action before the

onset of mental incapacity. In some circumstances, especially involving family members, (often elderly) principals will entrust their affairs to a trusted family member without exercising any form of active superintendence. For example, an elderly person who has recently lost their spouse may, in circumstances where that person had relied on the deceased for the management of financial affairs, place complete trust in a son or daughter in this regard, and not wish any involvement in the exercise of that authority. 5.

See 8.80–8.85.

6.

As to the general law right of trustees to seek the advice and directions of the court (which is in any case supported by statute or court rules in most jurisdictions) see Dal Pont, Equity & Trusts, [23.170]–[23.185].

7.

Cf Collier & Lindsay, p 143 (who suggest that an attorney can seek directions from the Supreme Court under the inherent equitable jurisdiction of that court on an originating summons, giving as an example Re Gadsden’s Settlements [1962] VR 522; but this case involved trusts rather than powers of attorney).

8.

Re Estate of Evans [2010] SASC 193; BC201005760 at [15]–[17], [34], [35] per Gray J (referring to the High Court’s trusts decision in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42; BC200807738); Parker v Higgins [2012] NSWSC 1516; BC201209588 at [50] per Slattery J.

9.

As to the meaning of ‘impaired decision-making capacity’ see 5.36.

10. Guardianship and Management of Property Act 1991 (ACT) s 62(1), 62(2). 11. In relation to an enduring power of attorney, if the principal has impaired decision-making capacity, the public trustee must, if asked by ACAT, assist ACAT by examining and reporting on the books, accounts or other records of transactions carried out by an attorney for the principal under the power of attorney: Powers of Attorney Act 2006 (ACT) s 83. Also, in the case of an enduring power where the principal has impaired decision-making capacity, the Public Advocate (see Public Advocate Act 2005 (ACT)) may require the attorney to produce stated books, accounts or other records of transactions carried out for the principal under the power of attorney: Guardianship and Management Act 1991 (ACT) s 64. 12. The phrase ‘interested person’ is defined in the Powers of Attorney Act 2006 (ACT): Guardianship and Management of Property Act 1991 (ACT) s 61. Section 74 of the 2006 Act states that each of the following is an ‘interested person’ in relation to a power of attorney: an attorney; the principal; a relative of the principal; the public advocate; the public trustee; a guardian of the principal; a manager of the principal. ‘Relative’ of a person (the ‘related person’) means: (a) a person related by blood, affinity or adoption to the related person; or (b) a domestic partner (the latter being defined in the Legislation Act 2001 (ACT) s 169): Powers of Attorney Act 2006 (ACT) Dictionary. 13. Guardianship and Management of Property Act 1991 (ACT) s 62(3). 14. Guardianship and Management of Property Act 1991 (ACT) s 62(4). 15. Guardianship and Management of Property Act 1991 (ACT) s 66. 16. Guardianship and Management of Property Act 1991 (ACT) s 63(1), 63(2). 17. Guardianship and Management of Property Act 1991 (ACT) s 63(3). 18. Powers of Attorney Act 2006 (ACT) s 71(1), 71(2). 19. Powers of Attorney Act 2006 (ACT) s 71(3).

20. As to the meaning of ‘decision-making capacity’ see 5.36. 21. Powers of Attorney Act 2006 (ACT) s 80(1). 22. Powers of Attorney Act 2006 (ACT) s 80(2). In the absence of evidence to the contrary, the principal is taken to have understood the nature and effect of making a power of attorney when the principal made the power of attorney: see s 18. 23. As to the meaning of ‘impaired decision-making capacity’ see 5.36. 24. Powers of Attorney Act 2006 (ACT) s 81(1), 81(2). 25. Powers of Attorney Act 2006 (ACT) s 81(3). 26. Powers of Attorney Act 2006 (ACT) s 82. 27. Prior to 1 January 2014, the Guardianship Tribunal. 28. Powers of Attorney Act 2003 (NSW) s 26. 29. An amendment made pursuant to the Powers of Attorney Amendment Act 2013 (NSW), designed to make clear that the tribunal has the jurisdiction to consider disputes relating to the revocation of an enduring power of attorney. It serves to oust the practice of the tribunal referring any matters relating to revocations to the Supreme Court, thus making dealing with issues of revocation cheaper and quicker. 30. Powers of Attorney Act 2003 (NSW) s 36(1) (cf the former Conveyancing Act 1919 (NSW) s 163G; the background to this provision is discussed in NSWLRC, pp 35–9). 31. Powers of Attorney Act 2003 (NSW) s 27(2)–27(4). 32. Powers of Attorney Act 2003 (NSW) s 34(1). In determining whether or not to refer a matter to the other tribunal, a review tribunal may take into account matters including: (a) whether the application relates to the effect of the enduring power of attorney or its revocation on third parties; (b) whether the application is likely to raise for consideration complex or novel legal issues that the Supreme Court is better suited to determine; (c) any other matter it considers relevant: s 34(2). 33. Powers of Attorney Act 2003 (NSW) s 33(1). 34. Powers of Attorney Act 2003 (NSW) s 33(2). 35. For this purpose, a person is ‘incommunicate’ if the person: (a) suffers from any physical or mental incapacity (whether of a temporary or permanent nature) that makes the person unable to understand communications respecting the person’s property or affairs, or to express the person’s intentions respecting the person’s property or affairs; or (b) is unable to receive communications respecting the person’s property or affairs because the person cannot be located or contacted: Powers of Attorney Act 2003 (NSW) s 4(1) (cf the former Conveyancing Act 1919 (NSW) s 163D; see NSWLRC, p 38). Without limiting the foregoing, a person may be incommunicate even if the incapacity concerned is induced by any drug or by medical or other treatment: s 4(2). 36. Powers of Attorney Act 2003 (NSW) s 33(3). 37. This includes a guardian whether under the Guardianship Act 1987 (NSW) or any other Act or law, and an enduring guardian of the principal under the Guardianship Act 1987 (NSW) (see 2.30–2.32). 38. Powers of Attorney Act 2003 (NSW) s 35(1). 39. Powers of Attorney Act 2003 (NSW) s 35(2). A review tribunal may, on its own initiative or on the application of an interested person, decide to join, as a party to any proceedings before the tribunal, any person who, in the opinion of the tribunal, should be a party to the proceedings (whether

because of the person’s concern for the welfare of the principal or for any other reason): s 35(3). 40. Powers of Attorney Act 2003 (NSW) s 36(11). 41. Powers of Attorney Act 2003 (NSW) s 36(2), 36(7). 42. Powers of Attorney Act 2003 (NSW) s 36(12). As to irrevocable powers see 1.30–1.34, 11.7–11.9. 43. Powers of Attorney Act 2003 (NSW) s 36(3) (making the power), 36(3A) (revoking the power). As to undue influence in this context see 3.43–3.45. 44. Powers of Attorney Act 2003 (NSW) s 36(4). The removal or appointment of an attorney, or the alteration or revocation of a power of attorney, has effect as if: (a) it were done in due form by the principal; and (b) the principal were of full capacity and were, to the extent necessary, authorised to do the thing in question by the instrument creating the power: s 36(10). 45. Cf Pakis v Pakis [2011] NSWSC 1073; BC201107324 (where Brereton J refused the applicants (attorneys under an enduring power) an order the effect of which would be to override a limitation deliberately inserted into the power of attorney and could result in substantial interference in the principal’s testamentary intentions; his Honour saw this as a matter that ought to be left to the judgment of a financial manager pursuant to the Guardianship Act 1987 (NSW) Pt 3A, if appointed: at [8], [9]). 46. If a review tribunal makes an order reinstating a power of attorney that has lapsed by reason of a vacancy in the office of an attorney, the order may also direct that it has effect from the time at which the power of attorney originally lapsed: Powers of Attorney Act 2003 (NSW) s 36(9). 47. If a review tribunal makes an order directing an attorney to furnish accounts or other information, it may decide to make further orders for limiting the disclosure of accounts or other information by the attorney, and inquiry and report on the conduct of the attorney: Powers of Attorney Act 2003 (NSW) s 36(8). 48. Powers of Attorney Act 2003 (NSW) s 36(5). 49. Powers of Attorney Act 2003 (NSW) s 36(6). 50. Powers of Attorney Act 2003 (NSW) s 38(1). 51. Powers of Attorney Act 2003 (NSW) s 38(2). As to orders on a review of the making, or operation and effect, of a ‘reviewable power of attorney’ see 10.9. 52. Powers of Attorney Act 2003 (NSW) s 38(3). 53. Powers of Attorney Act 2003 (NSW) ss 29 (orders confirming powers understood by principal), 30 (orders confirming powers subsequently affirmed by principal). The equivalent Australian Capital Territory provisions are in Powers of Attorney Act 2006 (ACT) ss 80, 81: see 10.5, 10.6. 54. Powers of Attorney Act 2003 (NSW) s 31(1) (formerly Conveyancing Act 1919 (NSW) s 163E(5)). 55. As to the meaning of ‘incommunicate’ see n 35 above. 56. Powers of Attorney Act 2003 (NSW) s 31(2) (formerly Conveyancing Act 1919 (NSW) s 163E(7)). 57. Powers of Attorney Act 2003 (NSW) s 32 (formerly Conveyancing Act 1919 (NSW) s 163E(6)). 58. Powers of Attorney Act 1980 (NT) s 13(aa) (being the commencement date of the Advance Personal Planning Act 2013 (NT)). 59. Powers of Attorney Act 1980 (NT) s 15(2), 15(4), 15(5).

60. Namely the accounts required under the Powers of Attorney Act 1980 (NT) s 11: see 8.62, 8.63. 61. Advance Personal Planning Act 2013 (NT) s 56. 62. See 1.44. 63. Advance Personal Planning Act 2013 (NT) s 58. 64. An adult has ‘decision-making capacity’ for a matter if he or she has the capacity to: (a) understand and retain information about the matter; (b) weigh the information in order to make a decision about the matter; and (c) communicate that decision in some way: Advance Personal Planning Act 2013 (NT) s 6(1). 65. Advance Personal Planning Act 2013 (NT) s 66(1), 66(2). 66. Advance Personal Planning Act 2013 (NT) s 59(1). 67. Advance Personal Planning Act 2013 (NT) s 59(2). 68. Advance Personal Planning Act 2013 (NT) s 59(3). 69. An adult has ‘planning capacity’ if he or she has ‘decision-making capacity’ for making the plan, and does not have an adult guardian or a manager under the Aged and Infirm Persons’ Property Act 1979 (NT): Advance Personal Planning Act 2013 (NT) s 4. 70. Advance Personal Planning Act 2013 (NT) s 61(2). 71. See 8.26. 72. The note to the sub-section suggests that major changes in circumstances might include the following: (a) a person appointed as decision-maker losing decision-making capacity; (b) the adult getting divorced or becoming estranged from other family members; (c) a decision maker being convicted of an offence that makes it unsuitable for him or her to continue to be a decision maker. 73. Advance Personal Planning Act 2013 (NT) s 61(3). 74. Advance Personal Planning Act 2013 (NT) s 61(4). 75. Advance Personal Planning Act 2013 (NT) s 61(5). 76. Advance Personal Planning Act 2013 (NT) s 71(1). The appeal must be lodged with the Supreme Court within 28 days after the original decision was made, or a longer period allowed by the Supreme Court: s 71(2). Pending determination of an appeal, the Supreme Court may stay the operation of the original decision and/or make any other interim order it considers appropriate: s 72(1). 77. Advance Personal Planning Act 2013 (NT) s 73. 78. Advance Personal Planning Act 2013 (NT) s 74(1). 79. Powers of Attorney Act 1998 (Qld) s 110(1). 80. Powers of Attorney Act 1998 (Qld) s 108. 81. For this purpose, ‘family’, of a principal, consists of the following members: (a) the principal’s spouse; (b) each of the principal’s children who is 18 years or more (including a stepchild, an adopted child, and a person for whom the principal was foster-parent or guardian when the person was a child); (c) each of the principal’s parents (including a step-parent, adoptive parent, fosterparent and guardian); (d) if there is no person mentioned in paragraph (a), (b) or (c) who is reasonably available — each of the principal’s siblings who is 18 years or more (including a stepsibling, adopted sibling, and foster-sibling): Powers of Attorney Act 1998 (Qld) s 110(5). 82. Powers of Attorney Act 1998 (Qld) s 110(2), 110(3). ‘Interested person’, for another person, means

a person who has a sufficient and continuing interest in the other person: Sch 3. 83. Powers of Attorney Act 1998 (Qld) s 110(4). 84. Powers of Attorney Act 1998 (Qld) s 111. A declaration about whether a person had capacity to enter a contract is binding in a subsequent proceeding in which the validity of the contract is in issue: s 112. 85. Powers of Attorney Act 1998 (Qld) s 115(b). 86. Powers of Attorney Act 1998 (Qld) s 113(1). 87. Powers of Attorney Act 1998 (Qld) s 113(2). 88. Powers of Attorney Act 1998 (Qld) s 114. This reflects the position at general law in the case of mentally incapable principals: see 3.19–3.23. 89. Powers of Attorney Act 1998 (Qld) s 113(3). 90. Powers of Attorney Act 1998 (Qld) s 115(a). 91. Powers of Attorney Act 1998 (Qld) s 116(a), 116(b). 92. Powers of Attorney Act 1998 (Qld) s 116(c), 116(d). 93. Powers of Attorney Act 1998 (Qld) s 117. 94. Powers of Attorney Act 1998 (Qld) s 118(1). 95. Powers of Attorney Act 1998 (Qld) s 97. 96. Powers of Attorney Act 1998 (Qld) s 122(1). 97. Powers of Attorney Act 1998 (Qld) s 118(2). 98. Powers of Attorney Act 1998 (Qld) s 109A. 99. Queensland Civil and Administrative Tribunal Act 2009 (Qld) Ch 2 Pt 8 Div 1. 100. Queensland Civil and Administrative Tribunal Act 2009 (Qld) Ch 2 Pt 8 Div 2. 101. Powers of Attorney and Agency Act 1984 (SA) s 11(1). 102. See, for example, Sutton v Sutton [2012] SASC 186; BC201208055 (in the face of concern that an attorney under an enduring power would sell the donor’s business allegedly contrary to what would have been the donor’s wishes). 103. Powers of Attorney and Agency Act 1984 (SA) s 11(2)(b). See, for example, Re Estate of Evans [2010] SASC 193; BC201005760 (in the context of a dispute relating to the management of a farming property by an attorney under an enduring power). 104. Powers of Attorney and Agency Act 1984 (SA) s 11(3)(b), 11(4). 105. The formalities for an application are prescribed in Powers of Attorney Act 2000 (Tas) s 34. 106. The hearing must be in accordance with the Guardianship and Administration Act 1995 (Tas) Pt 10 Div 1. 107. Powers of Attorney Act 2000 (Tas) s 33(1). For this purpose, a reference to an enduring power of attorney includes a reference to a purported enduring power of attorney: s 33(1AA). 108. Powers of Attorney Act 2000 (Tas) s 33(1A) (inserted by the Powers of Attorney Amendment Act 2013 (Tas)). 109. Powers of Attorney Act 2000 (Tas) s 33(2).

110. See Guardianship and Administration Act 1995 (Tas) Pt 7. 111. This appointment has the same effect as if it had been made under the Guardianship and Administration Act 1995 (Tas) Pt 7: Powers of Attorney Act 2000 (Tas) s 33(3). 112. Powers of Attorney Act 2000 (Tas) s 33(4). 113. Powers of Attorney Act 2000 (Tas) s 33(4A) (inserted by the Powers of Attorney Amendment Act 2013 (Tas)). 114. Powers of Attorney Act 2000 (Tas) s 33(5). 115. Powers of Attorney Act 2000 (Tas) s 33(6), 33(7). 116. An application may be made in accordance with the formalities prescribed by s 34 or informally: Powers of Attorney Act 2000 (Tas) s 35(2). 117. Powers of Attorney Act 2000 (Tas) s 35(1). 118. Powers of Attorney Act 2000 (Tas) s 35(4). 119. Powers of Attorney Act 2000 (Tas) s 35(7). 120. Powers of Attorney Act 2000 (Tas) s 35(6). 121. Powers of Attorney Act 2000 (Tas) s 39(1). 122. Powers of Attorney Act 2000 (Tas) s 40(1). 123. Powers of Attorney Act 2000 (Tas) s 40(2). 124. Powers of Attorney Act 2000 (Tas) s 40(3). 125. Powers of Attorney Act 2000 (Tas) s 40(4). 126. Instruments Act 1958 (Vic) s 125V(1). 127. Powers of Attorney Act 2014 (Vic) s 116(1)(a), (b). 128. As to the Public Advocate see Guardianship and Administration Act 1986 (Vic) Pt 3. 129. Instruments Act 1958 (Vic) s 125V(2); Powers of Attorney Act 2014 (Vic) s 122(1) (adds the nearest relative of the principal) (not yet commenced). 130. Instruments Act 1958 (Vic) s 125W; Powers of Attorney Act 2014 (Vic) s 123 (not yet commenced). 131. Instruments Act 1958 (Vic) s 125X; Powers of Attorney Act 2014 (Vic) s 120(1)(b), 120(2) (not yet commenced). 132. Instruments Act 1958 (Vic) s 125Y; Powers of Attorney Act 2014 (Vic) ss 118, 119 (not yet commenced). The void ab initio outcome reflects the position at general law in the case of mentally incapable principals: see 3.19–3.23. 133. Instruments Act 1958 (Vic) s 125Z; Powers of Attorney Act 2014 (Vic) s 120(1) (not yet commenced). 134. Instruments Act 1958 (Vic) s 125ZA; Powers of Attorney Act 2014 (Vic) s 121 (not yet commenced). 135. Instruments Act 1958 (Vic) s 125ZB(1), 125ZB(2); Powers of Attorney Act 2014 (Vic) s 116(1) (e)–(g) (not yet commenced). 136. Instruments Act 1958 (Vic) s 125ZC(1), 125ZC(4); Powers of Attorney Act 2014 (Vic) ss 125, 126(a), 133(1) (not yet commenced).

137. Instruments Act 1958 (Vic) s 125ZC(2), 125ZC(3); Powers of Attorney Act 2014 (Vic) s 130 (not yet commenced). 138. Instruments Act 1958 (Vic) s 125ZC(6); Powers of Attorney Act 2014 (Vic) s 126(b), 126(c) (not yet commenced). 139. Instruments Act 1958 (Vic) s 125ZD(1); Powers of Attorney Act 2014 (Vic) s 132 (not yet commenced). 140. Instruments Act 1958 (Vic) s 125ZD(2); Powers of Attorney Act 2014 (Vic) s 131 (not yet commenced). 141. Instruments Act 1958 (Vic) s 125ZF; Powers of Attorney Act 2014 (Vic) s 128 (not yet commenced). 142. Instruments Act 1958 (Vic) s 125ZE(1); Powers of Attorney Act 2014 (Vic) s 129 (not yet commenced). 143. Instruments Act 1958 (Vic) s 125ZE(2); Powers of Attorney Act 2014 (Vic) s 127 (not yet commenced). 144. Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148(1). 145. Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148(2), 148(3). 146. Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148(5). 147. If the court makes this form of order, it must give directions as to whether or not VCAT is to be constituted for the rehearing by the same members who made the original order: Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148(8). 148. Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148(7). 149. Instruments Act 1958 (Vic) s 125T; Powers of Attorney Act 2014 (Vic) s 76 (not yet commenced). 150. Guardianship and Administration Act 1990 (WA) s 109(1). 151. See, for example, KS(2) [2008] WASAT 167 (order made following a transaction benefiting the attorney). 152. See, for example, A and J (2006) 48 SR (WA) 67; [2006] WASAT 359 (power revoked, inter alia, in view of intense conflict between the principal’s adult children); AI and OF [2008] WASAT 87 (power revoked because of attorney’s illegitimate profiting from the exercise of authority). 153. See, for example, Wm and Y (2006) 44 SR (WA) 104; [2006] WASAT 245 (power varied via a direction to the attorneys not to use it except for a limited purpose, against a background of allegations that the attorneys had been using the power for their own interests). 154. Guardianship and Administration Act 1990 (WA) s 109(2). 155. Under the Guardianship and Administration Act 1990 (WA) s 107(1)(d): see 11.39. 156. Guardianship and Administration Act 1990 (WA) s 109(3). 157. Guardianship and Administration Act 1990 (WA) s 109(4). 158. Guardianship and Administration Act 1990 (WA) s 110. 159. State Administrative Tribunal Act 2004 (WA) s 105(1), 105(2). 160. State Administrative Tribunal Act 2004 (WA) s 105(3). 161. State Administrative Tribunal Act 2004 (WA) s 105(5)(a).

162. State Administrative Tribunal Act 2004 (WA) s 105(6). 163. State Administrative Tribunal Act 2004 (WA) s 105(7). 164. If the court sends the matter back to the tribunal, it must give directions as to whether or not the tribunal reconsidering the matter is to be constituted by the member or members who made the original decision: State Administrative Tribunal Act 2004 (WA) s 105(10). 165. State Administrative Tribunal Act 2004 (WA) s 105(9).

[page 275]

PART V

Power Ended Just as it is critical to appreciate once a power of attorney is created, and its implications (catalogued in Parts III and IV), it is equally important to identify once the power has come to an end. Ultimately, this is because those implications, by and large, also come to an end at this end. Hence Chapter 11 explains the means whereby attorneyship can terminate, and culminates with mention of circumstances where registration of termination is appropriate. The final chapter is devoted to the moment — vis-à-vis the attorney and third parties — the termination takes effect. Its chief focus is on statutory provisions that protect attorneys and third parties from the consequences of acting on powers that are invalid because, inter alia, they have terminated.

[page 277]

Chapter 11

Termination of Attorneyship Legal significance of termination Termination of power according to its terms Terminating moment or event prescribed in power Termination inferred from the terms and circumstances Power stipulated to be irrevocable At general law Under statute Termination of power by the principal or attorney Termination by the principal Written and oral notification of revocation Oral revocation Where revocation must be in writing Revocation by inference or implication (including by a later power) Partial revocation? Capacity of principal to revoke power Termination by attorney disclaiming, resigning or retiring At general law Impact of statute Termination by operation of law Mental incapacity of the principal Non-enduring powers of attorney

11.1 11.3 11.3 11.4 11.7 11.7 11.9 11.10 11.10 11.11 11.12 11.13 11.15 11.17 11.19 11.21 11.21 11.23 11.25 11.25 11.25

Enduring powers of attorney Mental incapacity of the attorney Marriage (or divorce) of the principal At general law Under statute Death Death of principal Death of attorney Insolvency Insolvency of principal Insolvency of attorney Termination by court or tribunal Registration of termination

11.28 11.30 11.31 11.31 11.32 11.34 11.34 11.35 11.36 11.36 11.38 11.40 11.42

[page 278]

Legal significance of termination 11.1 This chapter catalogues the circumstances in which the relationship between principal and attorney comes to an end. This is clearly a matter of some significance. As a power of attorney is about authority — specifically the authority to impact on the affairs of the principal — the termination of the power of attorney brings with it a termination of authority. Accordingly, the termination dictates that, subject to the attorney and third parties having notice of the power coming to an end, the attorney can no longer impact on the principal’s affairs under the power. Any purported dealing by the attorney on the principal’s behalf that, to the knowledge of the third party dealing with the attorney, transcends the termination of the attorney’s authority, is not

capable of being enforced against the principal (although it may potentially be enforceable against the attorney through breach of warranty of authority).1 The termination of the principal-attorney relationship also dictates that the duties to which the attorney is subject under the power come to an end. Any duty of care in tort terminates,2 as do the strictures of fiduciary law,3 the duty to account4 and any supplementary or additional duties imposed by statute.5 Duties sourced from the instrument creating the power, as well as rights deriving from it or the general law,6 likewise disappear. Beyond a contractually assumed duty expressed to survive the termination of attorneyship (if it is valid),7 it is the attorney’s duty of confidentiality to the principal8 — to the extent that the attorney has secured information confidential to the principal in the course of acting as attorney — that persists, at least until the information in question loses its confidentiality by becoming public. This is because information does not lose its confidentiality in equity (or in contract if the relevant contractual terms so indicate) merely because the relationship within which it was communicated or received has come to an end. 11.2 Termination of the relationship between principal and attorney can occur under the terms of the power itself, by the act of the principal or the attorney, by operation of law, or pursuant to a power vested by statute in a court, tribunal or body. This chapter is therefore divided into these three modes of termination. It concludes with mention of the registration of the revocation of powers of attorney.

Termination of power according to its terms Terminating moment or event prescribed in power 11.3 A power of attorney may itself prescribe the moment at which, or the event on the occurrence of which, it is to terminate. Once that moment has come (say, a particular date) or event occurred (say, the sale of a house or the return of the principal from abroad), the law treats the power as having been

revoked according to its terms. This gives effect to the intention of the principal as expressed in granting [page 279] the authority in the first place. The powers of attorney legislation in some jurisdictions replicates this general law notion.9

Termination inferred from the terms and circumstances 11.4 It has been judicially remarked that ‘[i]t is only a conclusion of law, that if … a power is silent as to its duration it must last during the donor’s life, or until he revokes it’.10 The terms of the power, and the circumstances in which it was entered into, may however reveal an intention of the principal that it terminate at a certain time or on a certain event. In Danby v Coutts & Co,11 for example, although the terms of the power made no reference to its duration, its recitals on two occasions stated that it should have effect ‘during my absence from England’. As these statements were not ‘repugnant to anything in the operative part’, Kay J viewed them as ‘used for expressing the limit of time during which the power was to be exercised’.12 11.5 Even without clear statements of duration in the recitals, it may be possible for the court, on a process of construction, to infer what the principal likely intended. In Vickery v JJP Custodians Pty Ltd,13 for instance, Austin J found the circumstances surrounding the creation of the power ‘very significant’, involving a father, just before departing on an overseas holiday, directing his son to use the power of attorney, which the father had recently executed, while he was away. This led his Honour to infer that the son’s authority thereunder was limited to the period of the overseas trip, reasoning as follows:14 In the circumstances, the direction implied … that the father’s intention was for his son to use the power of attorney while he was away, but not to use it after he returned unless he gave particular authority. I find it implausible in the extreme that [the father] would have intended to create a situation in which his son would have general authority in respect of all and any of the affairs of his father, after his father had returned to Australia and was competent to handle those

affairs himself. It is consistent with this conclusion that the power of attorney was left with [the father’s solicitor] for safe keeping, rather than being delivered to [the son] for general use.

11.6 There is even suggestion that authority under a power of attorney may expire by the effluxion of time. The obvious scenario is where the purpose for which the power was created has been fulfilled.15 But outside of this scenario, there may be scope for effluxion of time to prompt the termination of a power where an attorney, expected to exercise the power proximately, omits to do so. A relevant inquiry is whether ‘under all the circumstances the lapse of time had been unreasonable or had brought about an implied revocation’.16 For example, in Beaucar v Bristol Savings and Loan Association17 it was [page 280] argued that the power of attorney, because of the attorney’s nine month delay to present it to the banks (as third parties), had terminated. The Appellate Division of the Circuit Court of Connecticut stated that ‘[i]f no time is specified in the power of attorney, the authority terminates at the end of a reasonable period’,18 and that what constitutes a reasonable time is determined by, inter alia, the nature of the act(s) authorised, the formality of the authorisation, and the likelihood of changes in the purposes of the principal. In the circumstances, the court upheld the first instance ruling that the delay had been unreasonable, and so the power, even had it been valid, had expired.

Power stipulated to be irrevocable At general law 11.7 Just as the termination of a power of attorney can be prescribed by its terms, the principal can in the same fashion prescribe that the power is irrevocable. Except in circumstances where a power of attorney is irrevocable at law, which are explained below, the usual assumption that the power is revocable at the will of the principal here is displaced. Indeed, the revocability of powers by the principal’s unilateral act is one of the main features distinguishing a power of attorney from an assignment.19 To render

irrevocable an authority under a power of attorney, it must not only be clearly expressed to be irrevocable, it must also be ‘coupled with an interest’. What this means, in the classic words of Williams J in Clerk v Laurie, is the following:20 What is meant by an authority coupled with an interest being irrevocable is this — that where an agreement is entered into on a sufficient consideration, whereby an authority is given for the purpose of securing some benefit to the [attorney], such an authority is irrevocable.

In other words, the purpose of granting the power of attorney is to secure the interest (or claim or entitlement) of the attorney,21 and it is for this reason that the power is not revocable by the principal, without liability to the attorney, until that interest is satisfied.22 It explains why, unlike ordinary powers of attorney,23 an irrevocable power does not terminate upon the death or incapacity of either the principal or the attorney;24 after all, neither of these events necessarily satisfies the interest that the power is aimed to secure. 11.8 An irrevocable power of attorney thus differs in substance from the usual power of attorney, which is often gratuitously created for the benefit of the principal. This supplies a reason why a principal’s death or incapacity serves to terminate the power. A lack of ability to superintend the exercise of the power moreover dictates that the attorney can ignore a direction given by the principal inconsistent with the terms [page 281] of the power,25 meaning that there is little scope to superimpose upon the attorney fiduciary duties.26

Under statute 11.9 Statutory provision is made in respect of irrevocable powers of attorney given for value other than in the Australian Capital Territory and South Australia. The latter jurisdiction relies on the common law, whereas the former has taken the radical step of ousting irrevocable powers of attorney, stating that a power may be revoked under the Powers of Attorney Act 2006 (ACT) ‘whether or not the power states otherwise’.27

In the remaining jurisdictions the legislation prescribes the requirements for the creation of an irrevocable power of attorney,28 and expressly stipulates that the principal cannot revoke a valid irrevocable power without the attorney’s concurrence, nor is it revoked by the principal’s death, mental incapacity or insolvency.29 It goes without saying, although only the Northern Territory, Queensland and Victorian legislation so provide, that the power cannot be revoked while the attorney’s interest secured under the power remains undischarged.30 Once there has been a discharge of that interest, ordinarily the power of attorney comes to an end, because its purpose for being granted has been served. The New South Wales statute, moreover, empowers the Supreme Court to order the termination of an irrevocable power of attorney, and that the instrument creating the power be delivered up for cancellation, if it considers that the objects of the power have been carried out, its objects have become incapable of being carried out, or the power of attorney is otherwise exhausted.31

Termination of power by the principal or attorney Termination by the principal 11.10 A power of attorney is ordinarily presumed in its nature to be revocable,32 ‘without prejudice to the fact that such revocation may be wrongful as between principal and [attorney]’.33 There is, accordingly, no cause of action by the attorney against the principal for exercising the right to revoke the power, except to the extent [page 282] that the principal has assumed a coincident contractual obligation in this regard,34 or there are grounds to plead an estoppel. Of course, the foregoing is to be read subject to the preceding discussion on irrevocable powers,35

which can in any event be viewed as contractual in nature. Otherwise, the principal may revoke a power of attorney.36

Written and oral notification of revocation 11.11 There is little difficulty, as between principal and attorney, where the principal delivers to the attorney a written direction unambiguously revoking the power. At general law, the attorney’s authority vis-à-vis the principal comes to an end as soon as notification is received. Although a written notice of revocation is the most foolproof way of effecting this outcome, the case law supports the proposition that an oral notification, or even termination by implication,37 can be effective. In each case, an oral or implied revocation should, to avoid potential confusion in the mind of the attorney(s) and third parties, be confirmed in writing as soon as possible.

Oral revocation 11.12 Even though a power of attorney must be created in writing,38 and there is a compelling case to maintain it must also be varied in writing,39 case authority flows in the direction of recognising a principal’s ability to revoke a power of attorney orally.40 A reason for this, it has been said, is that ‘if formal revocation were necessary, the [principal] could be seriously prejudiced by acts of the [attorney] in the time before preparation of the requisite instrument of revocation’.41 It also presents an analogy with the contract law principle that contracts required to be in writing, though they must be varied in writing, can be rescinded orally.42

Where revocation must be in writing 11.13 The aforesaid is subject to formality requirements applicable to revocation imposed by statute in some jurisdictions. These target mainly enduring powers of [page 283]

attorney, which are in any case creatures of statute.43 In Queensland the legislation speaks in terms of a principal revoking an enduring power in writing, albeit in the context of a provision directed to the capacity of the principal to revoke the power,44 and in the approved form.45 The latter prescribes requirements for signature by the principal and a witness, as well as certification by a witness.46 So far as a non-enduring power is concerned, the legislation states that it may be revoked by an instrument in the approved form executed in the same way as the power of attorney.47 This is not intended to be exhaustive of the manner of revocation, as the relevant provision is expressed not to limit ‘the events by which, or circumstances in which, a power of attorney is revoked orally’.48 In Victoria, a revocation by a principal under an enduring power may, according to statute, be in writing and in the approved form.49 The term ‘may’ remains permissive, as the legislation contains a provision identical to its Queensland counterpart noted immediately above.50 However, the recommendation by the Victorian Law Reform Commission that statute provide that the revocation of powers of attorney be in writing in the approved form, and that the revocation be witnessed in the same way as a document creating a power of attorney,51 will see effect, at least for enduring powers, upon the commencement of the Powers of Attorney Act 2014.52 In South Australia, in the limited context of powers authorising dealings with land under the Real Property Act 1886, revocation of a power must be effected ‘by executing an instrument in the appropriate form’.53 11.14 Statute in several jurisdictions also makes provision for the registration of the revocation of a power of attorney. As this is not necessarily limited to revocation effected by the principal, it is addressed under its own heading.54

Revocation by inference or implication (including by a later power) 11.15 The general law’s acknowledgment that powers of attorney may be revoked orally sits well with the case law recognising that, subject to statutory formality requirements, a principal may revoke a power of attorney by inference or implication. As explained by an American appellate court, an

attorney’s authority ‘may be revoked by the principal either expressly or impliedly through words or conduct which are inconsistent with the continuation of authority’.55 [page 284] An Australian case example is Baker v Biddle.56 A written agreement (titled ‘power of attorney and covenant’) there recited that: (1) the plaintiff agreed to assist the defendant in acquiring the lease and licence of a hotel and to finance her for that purpose; and (2) the defendant appointed the plaintiff her attorney to, inter alia, sell the lease. Attached to the latter was a proviso enabling the plaintiff to call the defendant, at any time during its term, to sell him the lease. Upon obtaining the lease, the defendant immediately executed a bill of mortgage and a bill of sale in favour of the plaintiff, by which she mortgaged to the plaintiff her estate and interest in the lease (with a right to redeem at any time) and assigned to the plaintiff the chattels in and about the hotel (subject to a proviso for redemption or reassignment). The defendant later discharged her indebtedness to the plaintiff. Later on, the plaintiff called upon the defendant to sell to him the lease of the hotel in accordance with the above agreement and, upon her refusal to do so, unsuccessfully sought specific performance of the agreement. Knox CJ was unable to see how the power of attorney could remain in force ‘having regard to the bill of sale and bill of mortgage subsequently taken’, reasoning that the provisions of the bill of sale were ‘inconsistent with the view that the power of attorney remained in force after execution of these documents’.57 His Honour viewed the right to redeem, the power to sell on default and the covenant for quiet enjoyment contained in the bill of sale as inconsistent with the original power of attorney, and concluded as follows:58 I think the true view of the facts is that the power of attorney was taken as a temporary measure to protect the lender until the lease should be granted and the bill of sale and bill of mortgage executed, and that upon execution of those securities it ceased to have any effect. If it remained in operation, the appellant could sell whether default was made or not, and even after payment of the mortgage debt, which entitled the mortgagor to a reassignment of the premises. But even if it could be treated as remaining in force I think it is clear that it was given as security for the repayment of the amount agreed to be advanced, and in this view the option would be obnoxious to the rule which invalidates provisions inconsistent with or repugnant to the right to redeem.

11.16 Baker v Biddle indicates that, for revocation to be effected by conduct, the conduct must be inconsistent with the continuation of the attorneyship. Given the consequences of revocation, there is a need for more than conduct ‘reasonably understood’ as amounting to revocation; rather, that conduct must be ‘unambiguous in its effect’.59 As explained by Gray J in Re Estate of Evans:60 [W]here a party alleges that a power has been impliedly revoked, the Court will be reluctant to impute to the [principal] an intention to revoke the power of attorney in the absence of conduct or words unambiguously inconsistent with the continued operation of the power.

[page 285] Such a threshold was met in Flynn v Butler,61 where the principal was held to have impliedly revoked a power of attorney that authorised the attorney to pursue legal action on the principal’s behalf, by commencing legal proceedings on his own behalf. But the threshold was not met in Re E (Enduring Power of Attorney), 62 where Arden J rejected that, by creating a later power of attorney (in 1997), the principal had impliedly revoked an earlier power of attorney (created in 1992). The first power was a nonenduring one, and appointed as attorneys two sisters (Y and Z). The second one, which was an enduring power (although ineffective as an enduring power for failing to fulfil applicable statutory requirements), appointed not only Y and Z as attorneys, but also a third sister (X). Arden J rejected X’s contention that the 1992 power had been revoked by the 1997 power, for reasons including the following. First, X had not discharged the onus of showing an intention on the part of the principal to revoke the 1992 power. It was insufficient, her Ladyship stated, to argue that the principal must have forgotten about the 1992 power, or made no reference to it, and that, indeed, if the principal had forgotten about it ‘that would suggest that she did not intend to revoke it’.63 Second, the subject matter of each power was not identical, in that the 1997 power applied to land whereas the 1992 power did not. Third, without contemporaneous evidence as to the principal’s intentions, Arden J remained unconvinced that it was clear that the 1997 power revoked the 1992 power, it being open to conclude that the principal may have wished to preserve the possibility that the 1992 power might be utilised if for some reason the 1997 power could not.

More generally, her Ladyship opined that ‘a later instrument does not automatically revoke an earlier instrument’; to generate this outcome, the principal ‘must have intended to revoke the earlier power and this must also be the effect of the [principal’s] words or conduct’.64 This does not mean that an earlier and a later power must necessarily coexist in their entirety. After all, in Re E there were some matters covered by both powers, including the payment of bills, and so it was legitimate to query whether, at least to some extent, the latter should prevail. If there is an inconsistency between the operation of each power, it stands to reason that, to the extent of that inconsistency, they both cannot inhabit the same sphere.65 In turn this explains why, reflecting the position at general law, the powers of attorney legislation in some jurisdictions states that a principal’s power of attorney is revoked, to the extent of an inconsistency, by a later power of attorney of the principal.66 [page 286]

Partial revocation? 11.17 As to whether a power of attorney can be revoked partially, a New Zealand judge has branded this ‘an interesting point which my own researchers have not resolved to my satisfaction’.67 It appears, though, that there is nothing to preclude this outcome, if the court is satisfied that it is the principal’s intention in the circumstances. This appeared to have been accepted as far back as 1858, where an English judge expressed the opinion, on the facts before him, that ‘though the power of attorney was not expressly revoked, yet … it was substantially’.68 And implicit in the fact that a principal’s earlier power of attorney can continue to operate, except to the extent it is inconsistent with a later power granted by the principal, is that a later power can partially revoke an earlier power. Here an analogy can be drawn with the law of wills, which likewise acknowledges scope for partial revocation of an earlier will to the extent of any inconsistency with a later will not expressed to revoke the earlier will.69 11.18 Alternatively, a partial revocation can be described as a variation of the power, which the law has no difficulty countenancing. If so characterised,

though, the issue of formality may arise, at least to the extent that variations must be in writing whereas revocation need not. The parallel distinction between variation and rescission of contracts requiring written evidence may provide some assistance here in drawing this distinction.70

Capacity of principal to revoke power 11.19 Revocation of a power of attorney by the principal, as discussed above, presupposes that the principal has sufficient mental capacity to perform this act. A principal who lacks that capacity cannot validly revoke the power. In any case, unless an enduring power of attorney is involved, the onset of mental incapacity in the principal causes the power to terminate by operation of law.71 As the act of revoking a power is in substance similar to the act of creating the power — they each involve an election by the principal relating to the authority vested in an attorney to deal with (some of) the principal’s affairs — it stands to reason that the test of capacity for revocation of a power should equate with that applicable to the creation of that power.72 11.20 In the case of an enduring power, which by definition may operate at a time when the principal lacks mental capacity, there is no scope for the principal to validly revoke that power once he or she suffers mental incapacity. Prior to the onset of mental incapacity, the principal can, in an enduring power like a non-enduring power, revoke the power.73 That mental incapacity ousts the principal’s ability to revoke the power explains why statute prescribes various avenues aimed at superintending the attorney’s exercise of authority in this event, which are discussed in Chapter 10. [page 287]

Termination by attorney disclaiming, resigning or retiring At general law 11.21

A person cannot be compelled to act as an attorney (except pursuant

to statutory appointments of those holding public office that includes this function, such as the Public Trustee). It follows that, at general law, a person who is appointed as an attorney under a power but who — due to being unaware of the appointment or disinclined to assume the role of attorney at a time when the power is intended to commence operation74 — does not wish to act as attorney, may disclaim that function before doing an act that could be construed as an acceptance of the power.75 Once an attorney has accepted that position under the power, he or she can no longer disclaim. The means of avoiding future responsibility as an attorney lies in resigning or retiring from the position, by notice to the principal. There is no reason in principle preventing an attorney doing so, and without liability to the principal in this regard. In the case of a sole attorney, though, his or her resignation or retirement dictates that there is no one to exercise the authority intended by the principal. There is accordingly no basis for the power of attorney to continue, and so it ends. The court lacks the inherent jurisdiction, which it possesses in the law of trusts,76 to appoint another attorney so as to preserve the power. 11.22 The position may differ if the power of attorney makes provision for a substitute attorney, who accepts that role.77 It also differs where one of multiple attorneys78 resigns or retires, in which case, even without express provision for the appointment of a substitute attorney, the power can continue to function if the appointment of the attorneys was not joint, but rather joint and several.79 A joint appointment reveals an intention that the attorneys act jointly, not separately, and so the retirement or resignation of one of them undermines that intention.80 This outcome is ousted by statute in the Australian Capital Territory and Queensland for enduring powers of attorney,81 and can be ousted in New South Wales for all powers if the terms power of attorney so provide and at least one attorney remains in office.82 [page 288]

Impact of statute 11.23 The powers of attorney legislation modifies the general law chiefly in relation to enduring powers of attorney. This is not surprising, given that

enduring powers are creatures of statute, and may operate at a time when the principal is incapable.83 At that time, giving notice of resignation to the principal cannot be effective.84 Except in New South Wales and Tasmania, the legislation states that once a principal under an enduring power has lost mental capacity, an attorney cannot resign or retire without permission of the relevant court or tribunal.85 The issue is addressed differently in Tasmania, by provision for an attorney under an enduring power intending to resign to appoint, in the prescribed form,86 the Public Trustee to act as attorney in his or her place.87 Also, where the enduring power appoints multiple attorneys, those attorneys jointly may appoint the Public Trustee to act as sole attorney in their places.88 An appointment is of no effect until registered by the Recorder of Titles.89 The position in Victoria will see modification upon the commencement of the Powers of Attorney Act 2014, which envisages the resignation of an attorney under an enduring power, without court or tribunal permission, if there is another attorney who has power in the matter, or otherwise an alternative attorney able and willing to act in the matter.90 These initiatives are clearly designed to avoid the prospect that a principal’s affairs are left ‘in limbo’ as a result of an attorney’s resignation. 11.24 Outside of the above, the legislation in most jurisdictions replicates the general law by stating that a power of attorney is revoked by the retirement or resignation of a sole attorney.91 In the Australian Capital Territory, Queensland and Victoria (for enduring powers), the legislation requires that retirement or resignation be effected by written notice to the principal (and signed in Queensland and Victoria).92 In the [page 289] Northern Territory, the attorney under a registered power must, within 14 days of his or her retirement, serve notice of the retirement on the RegistrarGeneral.93

Termination by operation of law

Mental incapacity of the principal Non-enduring powers of attorney 11.25 An agency comes to an end once the principal loses his or her mental capacity.94 Underscoring this is the proposition that an agent can have no more authority to act than his or her principal — they are co-extensive — so that if the principal loses mental capacity the agent’s authority ceases. As a species of agency, it is unsurprising that courts have applied the same principle to powers of attorney, so that the mental incapacity of the principal serves to bring the power of attorney to an end.95 A subsidiary reason given for not allowing powers of attorney to subsist in the face of incapacity is that statutes provide for the appointment of a guardian or the like when a person lacks capacity.96 11.26 The general law is reflected by statute in the territories and Queensland.97 But in Queensland it adds that if a principal becomes incommunicate,98 the court may by order confirm that, from the date of the order, all or part of the power of attorney remains in full force and effect if the court is satisfied that the confirmation is for the benefit of the principal.99 And in New South Wales statute modifies the general law by recognising the validity of an act by an attorney — and with this the continuing existence of the power — even in the face of the principal’s supervening mental incapacity if that act ‘is of such a nature that is not beyond the understanding of the principal through mental incapacity at the time of the act’.100 In South Australia, a statutory exception applies where the Public Trustee has been appointed as attorney; subject to the terms of the power, the Public Trustee may continue to act under the power despite the principal’s legal incapacity. The power nonetheless ends if an administrator or manager of the principal’s property is appointed, or the court revokes the power.101 [page 290] 11.27 Although the incapacity of the principal is commonly described as ‘revoking’ the power, that term is used metaphorically. This is because to revoke a power ordinarily means intentionally to perform a juristic act that

terminates its legal effect. But a principal who becomes mentally incapable has not performed any act. Rather, what happens is that the power has ceased to have effect as if the principal had revoked it. It follows that the rule is concerned with whether the power can be validly exercised rather than with its essential validity.102 Having said that, there is little of substance that stems from the distinction.

Enduring powers of attorney 11.28 That the general law caused a power of attorney to terminate upon the mental incapacity of the principal, whether or not it was expressed to continue notwithstanding that incapacity, meant that principals could not appoint persons to act on their behalf in the event of the onset of mental incapacity. The transpiring of this event dictated the inconvenience and expense of an application to a court or tribunal for guardianship, and it could not be assured that the court or tribunal would necessarily appoint a person as guardian whose identity and outlook reflected the principal’s intentions. This led judges and law reform bodies, hamstrung by the general law, to call for statutory intervention to recognise the validity of powers of attorney that could function once a principal no longer possessed the requisite mental capacity. 11.29 The call for intervention has been heeded in each Australian jurisdiction, and indeed in most common law countries, through the statutory recognition of an ‘enduring power of attorney’, that is, a power of attorney that endures the principal’s incapacity.103 In addition to prescribing the requisite formalities for the creation of enduring powers,104 the enactments either state that an enduring power of attorney is not revoked by the principal becoming incapable105 or that an act done by an attorney under an enduring power within its scope during a period of incapacity in the principal is as effective as if the principal had not lacked capacity.106 Either way, where the statutory requirements are met, the general law rule is ousted.

Mental incapacity of the attorney 11.30 At general law, a person who lacks mental capacity cannot, generally speaking, enter into valid dealings with others, unless those others

are unaware of that incapacity. As the main reason for creating a power of attorney is to authorise an attorney to deal on behalf of a principal, it follows that the power is frustrated where [page 291] an attorney lacks the capacity to deal. At general law, therefore, a power of attorney is terminated when a sole attorney loses capacity. The same applies where one of multiple attorneys loses capacity if the power is joint107 (except in the Australian Capital Territory and Queensland, where statute ousts this outcome for enduring powers,108 and in New South Wales where the terms of the power, enduring or not, envisage its continuation)109 but not so where the power is joint and several.110 Statute reflects the general law position in the territories, Queensland, Tasmania and Victoria, to the effect that the incapacity of an attorney causes the power to terminate.111

Marriage (or divorce) of the principal At general law 11.31 At general law, the marriage or divorce of the principal has no effect on the status of any power of attorney he or she has granted unless the principal has either stipulated this in the power itself or takes steps to terminate the power upon that event. By operation of law, there is no consequence to marriage or divorce. This makes sense, because there is no reason to assume that marriage or divorce should relate to matters under the power, and that should they do so, there is every reason to assume that the principal will turn his or her mind to the matter. The position is different in relation to wills, where statute generally operates to revoke a will of a person upon his or her marriage or divorce.112 The rationale is that whereas parties to a marriage are likely to wish to benefit one another pursuant to their wills, divorce will likely deprive the parties of that intention. No equivalent rationale supposedly applies to powers of attorney, even if they are granted as between spouses, although it may be

queried in this regard why the law should assume that parties to a former marriage should wish that a power of attorney between them, effected at a time when marital relations persisted, should remain operative. [page 292]

Under statute 11.32 The issue is addressed by the powers of attorney legislation, in the context of enduring powers of attorney, in the Australian Capital Territory and Queensland. In the former jurisdiction, if a person is appointed as attorney under an enduring power, and thereafter the principal marries or enters into a civil union or civil partnership113 with someone other than the attorney, the enduring power is revoked in relation to the attorney unless the power expressly states that it is not revoked in the circumstances.114 More concisely, the Queensland legislation, directed to the same end, states that the principal’s marriage (or entry into a registered relationship)115 after making an enduring power causes the power to be revoked to the extent it gives power to someone other than the principal’s husband or wife (or registered partner), unless there is a contrary intention expressed in the enduring power.116 11.33 Corresponding statutory provision operates when the principal divorces. In the Australian Capital Territory, if a person appointed as attorney under an enduring power is, at that time or later, married to or in a civil union or partnership with the attorney, the ending of the marriage, union or partnership causes the power to be revoked in relation to the attorney.117 In Queensland, it is provided that an enduring power made by a principal prior to his or her divorce (or termination of registered relationship) is revoked to the extent it gave power to the divorced spouse (or previous registered partner).118 Equivalent provision is made in Tasmania as to the termination of the principal’s marital or personal relationship.119 In the Northern Territory the principal getting divorced, or even becoming estranged from other family members, is presented by way of example as a ground for the court amending an advance personal plan120 and possibly even justifying the court in revoking the plan if satisfied of the prescribed

matters.121 Although not cited by way of example, the same could arguably be said of a principal getting married.

Death Death of principal 11.34 The effect of the death of the principal on the power of attorney was stated about a century ago by a New Zealand judge in terms that ‘a power of attorney is cancelled by the death of the donor if the latter is a natural person, or by dissolution if the donor is a corporation’.122 This is no more than an application of basic agency law, [page 293] which dictates that a principal’s death brings an agency to an end.123 As the authority of the attorney derives entirely from the principal, and has been conferred for the benefit of the principal (or at least to foster the principal’s interests or wishes), there is sense in treating the authority as expiring once the principal dies.124 Statute in several jurisdictions replicates this general law rule.125

Death of attorney 11.35 On similar logic as applies to bring a power of attorney to an end, vis-à-vis an attorney, when the attorney has become mentally incapable,126 the general law dictates that an attorney’s death has the same effect. After all, an attorney who is deceased cannot exercise the authority that the principal intended to confer via the power of attorney, which brings with it no prospect that the power will be exercised unless it provides for a substitute attorney or multiple attorneys had been appointed under the power to act jointly and severally.127 Again, the powers of attorney legislation in several jurisdictions replicates the general law to this end.128

[page 294]

Insolvency Insolvency of principal 11.36 Whether or not, at general law, a power of attorney terminates, by operation of law, once the principal has become bankrupt, entered liquidation or otherwise applied to take the benefit of a law for the relief of bankrupt or insolvent debtors, remains unclear. As a matter of principle, it seems that insolvency should not by itself cause the power to end,129 but one older English case appears to suggest otherwise.130 What is clear is that, to the extent that a power confers on the attorney authority to deal with the money or property of the principal, or money or property due to the principal, the insolvency of the principal, for practical purposes, serves to oust the attorney’s authority. This is because, on the making of an order of bankruptcy or liquidation, the principal is denied control over what was his or her property, which vests in a trustee-in-bankruptcy or liquidator.131 The consequent infringement on the principal’s capacity generates a corresponding infringement on the attorney’s authority. 11.37 The powers of attorney legislation in the Northern Territory and Tasmania gives effect to this practical reality. In the former jurisdiction it states that a power of attorney is revoked upon the principal becoming bankrupt, applying to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounding with creditors or making an assignment of remuneration for their benefit.132 In Tasmania a non-enduring power of attorney is revoked once the attorney is notified of the bankruptcy or insolvency of the principal and, if it is registered, is revoked upon notification being lodged with the Recorder of Titles.133 But so far as an enduring power of attorney, whether or not it is registered, is concerned, the legislation declares that it is revoked if the principal becomes bankrupt or insolvent.134

Insolvency of attorney 11.38 The insolvency of the attorney does not, at general law, cause the termination of the power of attorney.135 An attorney simply exercises

authority, within the scope of the power, over matters relating to the principal’s affairs. By taking advantage of the insolvency law, the attorney is not deprived of the capacity to exercise this authority, and the principal’s money or property, to the extent that it comes within the attorney’s [page 295] authority to deal with it, is not endangered by any order against the attorney (except, potentially, where the power is irrevocable).136 11.39 Statute modifies the general law position in several jurisdictions. Insolvency137 of an attorney in the territories and Queensland causes the power of attorney to be revoked to the extent that it gives power to the attorney in relation to property or financial matters.138 The same applies in Tasmania and Victoria, albeit limited to attorneys under enduring powers.139 Where one of multiple attorneys becomes bankrupt, the power does not terminate if the appointment was joint and several,140 or if the power itself makes provision for the appointment of a substitute attorney. The Western Australian statute adopts a different tack, simply requiring an attorney under an enduring power, who becomes bankrupt, to report that bankruptcy to the State Administrative Tribunal,141 pursuant to which the tribunal may exercise various powers vis-à-vis the attorney.142 [page 296]

Termination by court or tribunal 11.40 Statute in each jurisdiction grants to a prescribed court, tribunal or body the power to revoke a power of attorney, usually confined to enduring powers, in defined circumstances. This power to revoke has been described as ‘one of the most fundamental and necessary safeguards’ in enduring powers legislation, as once a principal loses mental capacity to monitor the attorney’s conduct and to revoke the power, ‘it is essential that there be a mechanism for reviewing the attorney’s conduct and terminating the

appointment’.143 It represents the most intrusive of an arsenal of powers so vested, which are discussed in Chapter 10. What follows below, therefore, is only a brief overview in the context of the jurisdiction to revoke powers. 11.41 The ACT Civil and Administrative Tribunal (ACAT) may, in the case where a principal under an enduring power of attorney has impaired decision-making capacity, on application or on its own initiative on hearing a matter under the Guardianship and Management of Property Act 1991 (ACT), by order revoke the enduring power (or part of it), in which case it may appoint a guardian or manager for the person who was the principal for the power.144 In New South Wales the power to revoke an enduring power of attorney, whether in whole or in part, is vested in a ‘review tribunal’ — namely, the Civil and Administrative Tribunal (NCAT)145 or the Supreme Court146 — in the exercise of its jurisdiction to review the making, or operation and effect, of an enduring power of attorney.147 For enduring powers executed before 17 March 2014, in the Northern Territory it is the Supreme Court, upon application at any time after the principal under an enduring power is legally incapacitated, that may revoke the instrument creating the power.148 The same applies in South Australia, except that there is no requirement that the principal lack capacity.149 In the Northern Territory, from 17 March 2014, the Local Court may revoke an advance personal plan150 if satisfied that doing so is the only practicable way to address existing grounds for amending the plan151 and if the principal had planning capacity, he or she would agree to the revocation.152 In Queensland the Supreme Court’s jurisdiction to revoke a power of attorney is not limited to enduring powers; it can extend to non-enduring powers, including powers not made under the legislation.153 So far as enduring powers are concerned, though, the jurisdiction is one shared with the Queensland Civil and Administrative Tribunal.154 In Tasmania it is the Guardianship and Administration Board that has the jurisdiction to revoke an enduring power of attorney pursuant to a hearing155 to [page 297]

review that power.156 In Victoria and Western Australia the respective administrative tribunals are vested with jurisdiction to revoke an enduring power.157

Registration of termination 11.42 Legislation in each jurisdiction except Victoria and Western Australia158 makes provision for registration of powers of attorney, whether via the powers of attorney legislation, under property legislation and/or, more generally, under the banner of legislation on the registration of deeds. Generally speaking, registration in this context serves a similar object to registration in other contexts, namely to provide a public record of an instrument to third parties with an interest in the matter, and to validate certain transactions. 11.43 It is unsurprising, therefore, that statute should also provide for registration of the revocation of powers of attorney. To the extent that registration is directed to supplying a public record of an attorney’s authority, there is good reason why a withdrawal of that authority should likewise be the subject of notification. In the Australian Capital Territory, a power of attorney that complies with the relevant Act is, for all purposes, ‘taken to be a deed’,159 and deeds may be registered under the Registration of Deeds Act 1957. As, for this purpose, ‘power of attorney’ includes a revocation of a power of attorney,160 it follows that a revocation may likewise be registered. In New South Wales, an instrument revoking a registered power of attorney — that is, a power of attorney registered by the Registrar-General in the General Register of Deeds161 — may be registered by the RegistrarGeneral in that Register.162 In the Northern Territory statute provides that an instrument revoking a power of attorney may be registered in the Register of Powers of Attorney maintained by the Registrar-General.163 The relevant regulations require an instrument revoking a power of attorney to be in accordance with the approved form, and add that a duplicate or attested copy may be registered, to be dealt with by the Registrar-General in the same manner as an equivalent copy of an instrument creating a power.164 Statutory provision specifies the

means by which contents of an instrument revoking a power may be proved by means of a copy of the instrument.165 In Queensland the Powers of Attorney Act 1998 states that an instrument revoking a power of attorney may be registered.166 Registration is effected in the power of [page 298] attorney register maintained by the registrar under the Land Title Act 1994.167 The latter Act adds that a registered power of attorney may be revoked by registering an instrument of revocation or disclaimer.168 In South Australia, where a power of attorney authorises a person to deal with land under the Real Property Act 1886, the principal may revoke the power by executing an instrument in the appropriate form.169 The RegistrarGeneral must enter a note of the revocation, when produced to him or her, and the day and hour of its production, on the duplicate or copy of the power of attorney filed in his or her office.170 The same applies upon proof to the Registrar-General of the death of the principal.171 In Tasmania the register of powers of attorney maintained by the Recorder of Titles172 consists, inter alia, of copies of all instruments revoking a power of attorney.173 Provision is made for the registration of the principal’s death, bankruptcy, insolvency or other means of ending the power.174 Specific provision is also made for the registration of the revocation of interstate and foreign powers of attorney.175 In circumstances where a power of attorney is not registered, and the attorney cannot be found or it is impracticable to notify the attorney of the revocation of the power (including due to the principal’s death, mental incapacity, bankruptcy or insolvency), it may be revoked by lodging notice of the revocation together with a copy of the power with the Recorder of Titles.176

1.

As to the application of the doctrine of breach of warranty of authority to attorneys see 9.34–9.38.

2.

As to the tortious duty of care of attorneys to their principals see 8.4.

3.

As to fiduciary duties owed by attorneys to their principals see 8.31–8.50.

4.

As to attorneys’ duty to account to their principals see 8.55–8.64.

5.

As to attorneys’ statutory duties to the principals see 8.8–8.10.

6.

As to attorneys’ rights against their principals see 8.86–8.95.

7.

For instance, a restraint of trade clause.

8.

As to attorneys’ duty of confidentiality to their principals see 8.74–8.76.

9.

Powers of Attorney Act 2006 (ACT) s 56; Powers of Attorney Act 1998 (Qld) ss 20 (general powers), 54 (enduring powers); Instruments Act 1958 (Vic) s 125L (enduring powers); Powers of Attorney Act 2014 (Vic) s 43(1) (enduring powers) (not yet commenced). See also Advance Personal Planning Act 2013 (NT) s 11(b)(i) (in the context of advance personal plans, as to which see 1.44).

10. Danby v Coutts & Co (1885) 29 Ch D 500 at 515 per Kay J. 11. (1885) 29 Ch D 500. 12. Danby v Coutts & Co (1885) 29 Ch D 500 at 515. As to the use of recitals in construing powers of attorney generally see 6.18–6.21. 13. (2002) 11 BPR 20,333; [2002] NSWSC 782; BC200205296 at [30]. 14. Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333; [2002] NSWSC 782; BC200205296 at [30]. 15. Powers of Attorney Act 2000 (Tas) s 22(c) (‘A power of attorney remains in force until … the purpose or time for which it was created has been fulfilled or has passed’). 16. Losada v Senese Manufacturing Co (1953) 94 A 2d 616 at 618 (Conn). 17. (1969) 268 A 2d 679 (Conn Cir Ct). 18. Beaucar v Bristol Federal Savings and Loan Association (1969) 268 A 2d 679 at 687 (Conn Cir Ct). 19. See 2.26, 2.27. 20. (1857) 2 H & N 199 at 200; 157 ER 83 at 83. 21. Wilkinson v Young (1972) 25 DLR (3d) 275 at 276 per Addy J (HC(Ont)). See further 1.30–1.33. 22. Cf Powers of Attorney Act 2000 (Tas) s 22(c) (‘A power of attorney remains in force until … the purpose or time for which it was created has been fulfilled or has passed’). 23. As to termination of powers of attorney by death see 11.34, 11.35. As to termination of powers of attorney by incapacity see 11.25–11.30. 24. Spooner v Sandilands (1842) 1 Y & CCC 390; 62 ER 939; Yates v Hoppe (1850) 9 CB 541; 137 ER 1003; Wilkinson v Young (1972) 25 DLR (3d) 275 at 276 per Addy J (HC(Ont)); Dayton Monetary Associates v Becker (1998) 710 NE 2d 115 at 1156 (Ohio Ct App); Bonfigli v Strachan (2011) 192 Cal App 4th 1302 at 1311–12. 25. Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd (2005) 55 ACSR 185; [2005] NSWSC 1005; BC200507646 at [158] per Palmer J; AAGT Private Loans Pty Ltd v Ferguson [2009] QSC 113; BC200905092 at [65], [66] per A Lyons J. 26. See 8.49, 8.50. 27. Powers of Attorney Act 2006 (ACT) s 54. 28. See 1.34.

29. Powers of Attorney Act 2003 (NSW) s 16(1); Powers of Attorney Act 1980 (NT) s 19(1), 19(2); Powers of Attorney Act 1998 (Qld) s 10(1), 10(2); Powers of Attorney Act 2000 (Tas) ss 24, 25 (irrevocable for a fixed period); Instruments Act 1958 (Vic) s 109(1); Powers of Attorney Act 2014 (Vic) ss 18, 19 (not yet commenced); Property Law Act 1969 (WA) ss 86(1), 87(1) (irrevocable for a fixed period). 30. See, for example, AAGT Private Loans Pty Ltd v Ferguson [2009] QSC 113; BC200905092 at [63]–[66] per A Lyons J. 31. Powers of Attorney Act 2003 (NSW) s 28 (equivalent to the former Conveyancing Act 1919 (NSW) s 160(2)). 32. Walsh v Whitcomb (1797) 2 Esp 565 at 566; 170 ER 456 at 457 per Lord Kenyon; Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148 at 162 per Barton J (who refused to construe as irrevocable a power of attorney that was ‘on its face revocable’: see 2.29). 33. Affluent Freight Sdn Bhd v Sumathi A/P Appukuttan Pillai [2001] MLJU 635 at [*11] (LN) (HC). 34. See, for example, Wah Hing Strategy Co Ltd v Tang Wai Hung [2014] HKEC 821 (where the terms of the power constrained the principal’s power to revoke by reference to the prior consent of another). 35. See 11.7–11.9. 36. This is explicitly stated by statute in some jurisdictions: Powers of Attorney Act 1980 (NT) ss 16(e) (general powers), 17(2)(a) (enduring powers executed prior to 17 March 2014; after this date see Advance Personal Planning Act 2013 (NT) ss 11(b)(ii), 12(1) in the context of advance personal plans, as to which see 1.44); Real Property Act 1886 (SA) s 157 (in the context of land under that Act); Powers of Attorney Act 2000 (Tas) s 32AD(1) (‘An enduring power of attorney, whether registered or unregistered, is revoked if notice of revocation by the donor is given to the attorney’); Instruments Act 1958 (Vic) s 125I (enduring powers); Powers of Attorney Act 2014 (Vic) s 44 (enduring powers) (not yet commenced). 37. See 11.15, 11.16. 38. See 4.1–4.3. 39. See 5.44. 40. See, for example, R v Wait (1823) 11 Price 518 at 531; 147 ER 551 at 555; The Margaret Mitchell (1858) Sw 382 at 401; 166 ER 1174 at 1185 per Dr Lushington; Mahood v Geange [1927] NZLR 780 at 799 per Adams J; R v Holt (1983) 12 A Crim R 1 at 14 per Tadgell J (CCA(Vic)); R D Mackinnon Holdings Pty Ltd v Hind [1984] 2 NSWLR 121 at 123 per McLelland J; Re JLJ Inc (1993) 988 F 2d 1112 at 1116–17 (11th Cir); Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333; [2002] NSWSC 782; BC200205296 at [15]–[18] per Austin J. In the Northern Territory, vis-à-vis advance personal plans (as to which see 1.44), this draws support from the Advance Personal Planning Act 2013 (NT) s 12, which prescribes formalities for amendment (see 5.44) but not for revocation. 41. Collier and Lindsay, p 220. 42. As to this principle see Carter, [9-26], [9-27]. 43. See 1.25–1.27, 1.58–1.64. 44. Powers of Attorney Act 1998 (Qld) s 47(1). The reference to writing here presumably aims to exclude from its coverage revocations effected by operation of law. 45. Powers of Attorney Act 1998 (Qld) s 49(1). But a written revocation of an enduring power of

attorney, to the extent it gives power for a health matter (see 1.48), or a written revocation of an advance health directive (see 1.48), need not be in the approved form: s 49(2). 46. Powers of Attorney Act 1998 (Qld) s 49(3)–49(5). 47. Powers of Attorney Act 1998 (Qld) s 17(1). The execution requirements for the power of attorney are prescribed by s 12: see 4.17. This does not, however, affect the rules about the execution of instruments by corporations: s 17(2) (as to which see 7.13). 48. Powers of Attorney Act 1998 (Qld) s 15. 49. Instruments Act 1958 (Vic) s 125I. 50. Instruments Act 1958 (Vic) s 125H(1)(a). 51. VPLRC, p 96 (recommendation 26). 52. Powers of Attorney Act 2014 (Vic) ss 44–50 (not yet commenced). 53. Real Property Act 1886 (SA) s 157. 54. See 11.42, 11.43. 55. Zaubler v Picone (1984) 100 AD 2d 620 at 621 (NY App). See also Re E (Enduring Power of Attorney) [2001] Ch 364 at 373 per Arden J. 56. (1923) 33 CLR 188; BC2390103. 57. Baker v Biddle (1923) 33 CLR 188 at 194–5; BC2390103. 58. Baker v Biddle (1923) 33 CLR 188 at 195; BC2390103. See also at 198 per Isaacs J (‘the parties, settling … their contractual relations respecting the property, have settled those relations on a basis and on terms inconsistent with the arrangement originally arrived at’), at 198, 199 per Starke J (‘the bill of sale and the bill of mortgage were substituted for the security constituted by the power of attorney’; ‘it amounted to a cancellation of the power of attorney as between the parties’). 59. Re E (Enduring Power of Attorney) [2001] Ch 364 at 373 per Arden J. See also Houston v Houston (2012) 352 DLR (4th) 125; [2012] BCCA 300 at [43] per Newbury JA, with whom Low and Groberman JA concurred. 60. [2010] SASC 193; BC201005760 at [24]. 61. (1905) 75 NE 730 (Mass). 62. [2001] Ch 364. 63. Re E (Enduring Power of Attorney) [2001] Ch 364 at 373. 64. Re E (Enduring Power of Attorney) [2001] Ch 364 at 374. See also Re Estate of Evans [2010] SASC 193; BC201005760 at [20], [21] per Gray J; Houston v Houston (2012) 352 DLR (4th) 125; [2012] BCCA 300 at [43] per Newbury JA, with whom Low and Groberman JA concurred (‘the mere fact a donor has executed a power of attorney in favour of A and later executes another in favour of B will not by itself be regarded as conduct that unambiguously reflects an intention to revoke the first’). 65. See C S Thériault, ‘Powers of Attorney — Some Fundamental Issues’ (1999) 18 ETPJ 227 at 244– 5. 66. Powers of Attorney Act 2006 (ACT) s 69; Advance Personal Planning Act 2013 (NT) s 14(2) (in the context of advance personal plans, as to which see 1.44); Powers of Attorney Act 1998 (Qld) s 50(1) (applies only to enduring powers of attorney); Powers of Attorney Act 2000 (Tas) s 32AF (limited to enduring powers of attorney created before 1 January 2014 (the commencement date of

the Powers of Attorney Amendment Act 2013 (Tas)) if a subsequent power of attorney referred to in s 32AF and to which that section relates is made after that date: s 58B(11)); Instruments Act 1958 (Vic) s 125J (applies only to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 55 (not yet commenced) (cf VPLRC, p 98 (recommendation 27)). 67. Apatu v Peach Prescott & Jamieson [1985] 1 NZLR 50 at 64 per Eichelbaum J. 68. The Margaret Mitchell (1858) Swab 382 at 401; 166 ER 1174 at 1185 per Dr Lushington. 69. See, for example, Will of Page [1969] 1 NSWR 471. 70. See Carter, [9-27]. 71. See 11.25–11.27. 72. Smith v Public Trustee (SC(Qld), Cullinane J, 5 May 1994, unreported) at 13–19. As to the requirements of mental capacity applicable to the creation of powers of attorney see 3.5–3.31. 73. This is expressly noted in the Powers of Attorney Act 1998 (Qld) s 47(1) (‘A principal may revoke an enduring power of attorney in writing only if the principal has the capacity necessary to make an enduring power of attorney giving the same power’) and the Powers of Attorney Act 2014 (Vic) s 44 (not yet commenced). To the same effect vis-à-vis advance personal plans in the Northern Territory (as to which see 1.44) see Advance Personal Planning Act 2013 (NT) ss 11(b)(ii), 12(1). 74. As to when a power of attorney commences operation see 5.31–5.38. 75. As to disclaimer by attorneys see 4.32, 4.33. 76. The court has an inherent jurisdiction to appoint a trustee in circumstances in which the trust would otherwise fail for lacking a trustee: see Dal Pont, Equity & Trusts, [21.65]–[21.85]. 77. As to substitute attorneys see 4.56–4.58. 78. As to the appointment of multiple attorneys and its consequences see 4.50–4.58. 79. This finds explicit expression by statute in some jurisdictions: Powers of Attorney Act 2006 (ACT) s 65; Powers of Attorney Act 2003 (NSW) s 46(2); Instruments Act 1958 (Vic) s 125R(1) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 62(2) (limited to enduring powers) (not yet commenced). Distinguishing between a joint, and a joint and several, appointment is addressed at 4.51. 80. This finds explicit expression by statute in some jurisdictions: Powers of Attorney Act 2006 (ACT) s 66 (limited to general powers of attorney); Powers of Attorney Act 2003 (NSW) s 46(1); Instruments Act 1958 (Vic) s 125R(2) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 62(1) (limited to enduring powers) (not yet commenced). 81. Powers of Attorney Act 2006 (ACT) s 67 (limited to where the principal has ‘impaired decisionmaking capacity’; the latter is statutorily defined: see 5.36); Powers of Attorney Act 1998 (Qld) s 59A. 82. Powers of Attorney Act 2003 (NSW) s 46(1A) (with effect from 13 September 2013). The amendment was, according to the Second Reading Speech for the relevant Bill (the Powers of Attorney Amendment Bill 2013 (NSW)), driven to foster flexibility in appointing family members jointly but without the risk that the power of attorney would terminate if one of the attorneys dies or vacates office. See also Powers of Attorney Act 2014 (Vic) s 62(4) (not yet commenced). 83. See 1.25–1.27. 84. Rayner v N J Sheaffe Pty Ltd [2010] NSWSC 810; BC201005176 at [96]–[98] per Lindgren AJ. 85. Powers of Attorney Act 2006 (ACT) s 53(2) (leave of the ACT Civil and Administrative Tribunal,

which may appoint a guardian for the principal: see Guardianship and Management of Property Act 1991 (ACT) s 7); Powers of Attorney Act 1980 (NT) s 15(1) (leave of the Supreme Court, which may be granted subject to such terms and conditions as the court thinks fit: s 15(5)) (for enduring powers executed before 17 March 2014: s 13(aa); no equivalent provision for advance personal plans (as to which see 1.44) from this date under the Advance Personal Planning Act 2013 (NT)); Powers of Attorney Act 1998 (Qld) s 82(1) (leave of the Supreme Court, which may appoint a new attorney to replace the attorney: s 82(2)); Powers of Attorney and Agency Act 1984 (SA) s 9 (permission of the Supreme Court); Instruments Act 1958 (Vic) s 125M(2) (leave of a court or the Victorian Civil and Administrative Tribunal); Guardianship and Administration Act 1990 (WA) ss 107(1)(c), 109(2) (leave of the State Administrative Tribunal). 86. The appointment must be in accordance with Form 6 (found in Powers of Attorney Act 2000 (Tas) Sch 1), signed by the attorney, and accepted by the Public Trustee in accordance with that form: Powers of Attorney Act 2000 (Tas) s 32A(2). 87. Powers of Attorney Act 2000 (Tas) s 32A(1)(a). 88. Powers of Attorney Act 2000 (Tas) s 32A(1)(b). 89. Powers of Attorney Act 2000 (Tas) s 32A(3). 90

Powers of Attorney Act 2014 (Vic) s 59(1) (not yet commenced). The resignation of an alternative attorney, however, requires leave of the court or tribunal: s 59(2).

91. Powers of Attorney Act 2006 (ACT) s 53(3); Powers of Attorney Act 1980 (NT) ss 16(c) (general powers), 17(2)(a) (enduring powers executed before 17 March 2014: s 13(aa); from this date see Advance Personal Planning Act 2013 (NT) s 19); Powers of Attorney Act 1998 (Qld) ss 21 (general powers), 55 (enduring powers); Instruments Act 1958 (Vic) s 125M(3) (enduring powers); Powers of Attorney Act 2014 (Vic) s 56(2) (enduring powers) (not yet commenced). 92. Powers of Attorney Act 2006 (ACT) s 53(1); Powers of Attorney Act 1998 (Qld) s 72; Instruments Act 1958 (Vic) s 125M(1); Powers of Attorney Act 2014 (Vic) ss 56, 57 (in the prescribed form) (not yet commenced). 93. Powers of Attorney Regulations 1982 (NT) reg 9. 94. Re Coleman (1929) 24 Tas LR 77 at 79 per Nicholls CJ; Gibbons v Wright (1954) 91 CLR 423 at 444–5; BC5400600 per Dixon CJ, Kitto and Taylor JJ. See further Dal Pont, Agency, [25.19], [25.20]. 95. See, for example, Re K (Enduring Powers of Attorney) [1988] 1 Ch 310 at 313 per Hoffmann J; Kisselbach v County of Camden (1994) 638 A 2d 1383 (NJ App); Comerica Bank-Texas v Texas Commercial Bank National Association (1999) 2 SW 3d 723 (Tex Ct App); Lincolne v Williams (2008) 18 Tas R 76; [2008] TASSC 41; BC200807225 at [7] per Blow J. As to what is meant by ‘incapacity’ in this context see 3.5–3.31. 96. Renfro v City of Waco (1896) 33 SW 766 at 767 (Tex Ct App). As to guardianship compared to attorneyship see 2.30–2.32. 97. Powers of Attorney Act 2006 (ACT) s 57 (power of attorney revoked upon the principal becoming a person with ‘impaired decision-making capacity’, a phrase statutorily defined: see 5.36); Powers of Attorney Act 1980 (NT) s 16(b); Powers of Attorney Act 1998 (Qld) s 18(1) (power of attorney revoked where the principal becomes a person who has impaired capacity). 98. For this purpose, a person becomes ‘incommunicate’ if the person becomes incapable of communicating decisions about the person’s financial, property or legal affairs in some way: Powers of Attorney Act 1998 (Qld) s 18(3).

99. Powers of Attorney Act 1998 (Qld) s 18(2). 100. Powers of Attorney Act 2003 (NSW) s 18 (equivalent to the former Conveyancing Act 1919 (NSW) s 163F(1)). 101. Public Trustee Act 1995 (SA) s 18. 102. Re K (Enduring Powers of Attorney) [1988] 1 Ch 310 at 314 per Hoffmann J. See also Collier & Lindsay, pp 218–19. 103. See 1.25–1.27, 1.58–1.64. 104. See 4.6–4.30. 105. Powers of Attorney Act 2006 (ACT) s 32(1); Powers of Attorney Act 1998 (Qld) s 32(2); Instruments Act 1958 (Vic) s 115(2); Powers of Attorney Act 2014 (Vic) s 22(3) (not yet commenced); Guardianship and Administration Act 1990 (WA) s 105(1) (using the phrase ‘not affected’ in place of ‘revoked’). 106. Powers of Attorney Act 2003 (NSW) s 21(1) (equivalent to the former Conveyancing Act 1919 (NSW) s 163F(2)) (applies only if and to the extent that a contrary intention is not expressed in the instrument creating the power and has effect subject to the terms of that instrument: s 21(3)); Powers of Attorney Act 1980 (NT) s 13 (for powers of attorney executed before 17 March 2014; from this date, equivalent provision is made vis-à-vis advance personal plans (as to which see 1.44) by the Advance Personal Planning Act 2013 (NT) s 26); Powers of Attorney and Agency Act 1984 (SA) s 6(3); Powers of Attorney Act 2000 (Tas) s 30(4); Guardianship and Administration Act 1990 (WA) s 105(2). 107. This finds explicit expression by statute in some jurisdictions: Powers of Attorney Act 2006 (ACT) s 66 (limited to general powers of attorney); Powers of Attorney Act 2003 (NSW) s 46(1); Instruments Act 1958 (Vic) s 125R(2) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 62(1) (enduring powers) (not yet commenced). 108. Powers of Attorney Act 2006 (ACT) s 67 (limited to where the principal has ‘impaired decisionmaking capacity’; the latter is statutorily defined: see 5.36); Powers of Attorney Act 1998 (Qld) s 59A. 109. Powers of Attorney Act 2003 (NSW) s 46(1A) (commences 13 September 2013). 110. This finds explicit expression by statute in some jurisdictions: Powers of Attorney Act 2006 (ACT) s 65; Powers of Attorney Act 2003 (NSW) s 46(2); Instruments Act 1958 (Vic) s 125R(1) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 62(2) (enduring powers) (not yet commenced). As to the distinction between powers that are joint, and joint and several, see 4.51. 111. Powers of Attorney Act 2006 (ACT) s 63 (where an attorney becomes a person with ‘impaired decision-making capacity’, a term statutorily defined: see 5.36); Powers of Attorney Act 1980 (NT) ss 16(b) (general powers), 17(2)(b) (enduring powers executed before 17 March 2014; from this date the loss of decision-making capacity in a decision-maker under an advance personal plan is presented as a ground for the court amending the plan (under the guise of a ‘major change of circumstances’) or even justify the court revoking the plan if satisfied of the prescribed matters: Advance Personal Planning Act 2013 (NT) s 61(2)(h), 61(5): see 10.14)); Powers of Attorney Act 1998 (Qld) ss 22 (general powers), 56 (enduring powers); Powers of Attorney Act 2000 (Tas) s 32AE(5) (enduring powers); Instruments Act 1958 (Vic) s 125N (enduring powers); Powers of Attorney Act 2014 (Vic) s 53 (not yet commenced). 112. See G E Dal Pont and K F Mackie, Law of Succession, LexisNexis Butterworths, Australia, 2013 [5.43]–[5.41].

113. The terms ‘civil union’ and ‘civil partnership’ are defined in the Legislation Act 2001 (ACT) Dictionary. 114. Powers of Attorney Act 2006 (ACT) s 58. 115. Under the Relationships Act 2011 (Qld). 116. Powers of Attorney Act 1998 (Qld) ss 52, 52A. 117. Powers of Attorney Act 2006 (ACT) s 59. 118. Powers of Attorney Act 1998 (Qld) ss 53, 53A. 119. Powers of Attorney Act 2000 (Tas) s 32AE(3). ‘Personal relationship’ takes its meaning from the Relationships Act 2003 (Tas). 120. Under the guise of a ‘major change of circumstances’ mentioned in the Advance Personal Planning Act 2013 (NT) s 61(2)(h): see 10.14. 121. Advance Personal Planning Act 2013 (NT) s 61(5): see 10.14. 122. Wellington Steam Ferry Company (Ltd) (in liq) v Wellington Deposit, Mortgage and Building Association (Ltd) (1915) 34 NZLR 913 at 915 per Stout CJ (SC). See also Re Williams [1917] 1 Ch 1 at 7 per Lord Cozens-Hardy MR (‘A power of attorney … becomes inoperative on the death of the person conferring it, and the recipient cannot claim to exercise the power after that person’s death’); Berger v Council of the Law Society of New South Wales [2013] NSWSC 1080; BC201312244 at [113], [114] per Beech-Jones J. 123. MacKenzie v Carroll (1974) 53 DLR (3d) 699 at 701 per Lieff J (HC(Ont)); Long v Schull (1981) 439 A 2d 975 at 977 (Conn); Noonan v Martin (1987) 10 NSWLR 402 at 407 per Bryson J; Nominal Defendant v Kisse (2001) Qld Lawyer Reps 110; [2001] QDC 290 at [9] per Judge McGill. See further Dal Pont, Agency, [25.19], [25.20]. 124. In Re McCarty (1920) 53 DLR 249 (App Div(SC (Ont)) Sutherland J opined (at 257) that if a power of attorney contains ‘plain words’ providing that it ‘shall not be revoked by the death of the person executing’ it, such words ‘must be given effect to and held to be valid and effectual’; see also at 260–1 per Clute J. In suggesting that the general law rule that a power of attorney terminates upon the death of the principal can be ousted by the terms of the power itself, these remarks are incorrect. If the general law had no means of validating powers of attorney expressed to survive the principal’s mental incapacity, the reasons underscoring this are arguably the more persuasive when dealing with the principal’s death. Moreover, statute in no jurisdiction has intervened to validate the expression of such an intention. This, of course, must be read subject to where a power is irrevocable, and the death of the principal precedes the satisfaction of the interest that the power was intended to secure: see 11.7–11.9. 125. Powers of Attorney Act 2006 (ACT) s 60; Powers of Attorney Act 1980 (NT) ss 16(a) (general powers), 17(2)(a) (enduring powers executed before 17 March 2014) (see also Powers of Attorney Regulation 1982 (NT) reg 8, which prescribes a duty, in the case of a registered power, on the attorney and the principal’s executor to notify the Registrar-General of the principal’s death); Advance Personal Planning Act 2013 (NT) s 11(b)(iv) (vis-à-vis advance personal plans (as to which see 1.44) from 17 March 2014); Powers of Attorney Act 1998 (Qld) ss 19 (general powers), 51 (enduring powers); Powers of Attorney Act 2000 (Tas) ss 27 (non-enduring powers), 32AE(2) (enduring powers of attorney); Instruments Act 1958 (Vic) s 125K (enduring powers); Powers of Attorney Act 2014 (Vic) s 51 (enduring powers) (not yet commenced). 126. See 11.30. 127. The latter finds explicit expression in statute in some jurisdictions: Powers of Attorney Act 2006

(ACT) s 65; Powers of Attorney Act 2003 (NSW) s 46(2); Instruments Act 1958 (Vic) s 125R(1) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 62(1) (enduring powers) (yet to commence). A joint appointment of attorneys, on the other hand, would dictate that the death of one attorney brings the power to an end (an outcome explicitly countenanced in Powers of Attorney Act 2006 (ACT) s 66 (limited to general powers of attorney); Powers of Attorney Act 2003 (NSW) s 46(1); Instruments Act 1958 (Vic) s 125R(2) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 62(1) (enduring powers) (not yet commenced), except in the Australian Capital Territory and Queensland, where statute ousts this outcome in the case of enduring powers of attorney (Powers of Attorney Act 2006 (ACT) s 67 (limited to where the principal has ‘impaired decision-making capacity’; the latter is statutorily defined: see 5.36); Powers of Attorney Act 1998 (Qld) s 59A) and in New South Wales where the power of attorney, enduring or not, makes provision for its continuation (Powers of Attorney Act 2003 (NSW) s 46(1A); commences 13 September 2013). As to the impact of joint and several appointments of attorneys see 4.50–4.55. 128. Powers of Attorney Act 2006 (ACT) s 61; Powers of Attorney Act 1980 (NT) ss 16(a) (general powers), 17(2)(a) (enduring powers executed before 17 March 2014) (see also Powers of Attorney Regulation 1982 (NT) reg 8, which prescribes a duty, in the case of a registered power, on the principal and the attorney’s executor to notify the Registrar-General of the attorney’s death); Advance Personal Planning Act 2013 (NT) s 19(1)(a) (as from 17 March 2014, a person ceases to be a decision-maker under an advance personal plan (as to which see 1.44) if he or she dies); Powers of Attorney Act 1998 (Qld) ss 24 (general powers), 58 (enduring powers); Powers of Attorney Act 2000 (Tas) s 32AE(5) (enduring powers); Instruments Act 1958 (Vic) s 125P (enduring powers); Powers of Attorney Act 2014 (Vic) s 52 (enduring powers) (not yet commenced). 129. Lim Eng Chuan Sdn Bhd v United Malayan Banking Corp [2013] 3 MLJ 161 at 173–5 per Zainun Ali FCJ (favouring the view that a power of attorney is not revoked upon the winding up of a donor company but accepting that its dissolution would effect a revocation). 130. Markwick v Hardingham (1880) 15 Ch D 339. See further Collier & Lindsay, pp 232–4. 131. Bankruptcy Act 1966 (Cth) s 58; Corporations Act 2001 (Cth) s 468. 132. Powers of Attorney Act 1980 (NT) ss 16(d) (general powers), 17(2)(a) (enduring powers executed before 17 March 2014). Where the power is registered, and the principal becomes bankrupt, applies to take the benefit of a law for the relief of bankrupt or insolvent debtors, compounds with creditors or makes an assignment of remuneration for their benefit, he or she must, within 14 days, serve notice of the bankruptcy or insolvency on the Registrar-General: Powers of Attorney Regulations 1982 (NT) reg 10. 133. Powers of Attorney Act 2000 (Tas) ss 27AA(1), 27. 134. Powers of Attorney Act 2000 (Tas) s 32AE(2). 135. McCall v Australian Meat Co (Ltd) (1870) 19 WR 188 (which directs the relevant inquiry to the attorney’s fitness to perform his or her duties rather than adopting any automatic assumption that insolvency per se denotes unfitness and thus termination). Cf Alcock, pp 175–6. 136. As to irrevocable powers see 1.30–1.34, 11.7–11.9. 137. In the Australian Capital Territory ‘insolvency’ refers to the attorney becoming ‘bankrupt or personally insolvent’ (as defined in the Dictionary of the Legislation Act 2001 (ACT)). In the Northern Territory ‘insolvency’ refers to the attorney becoming bankrupt, applying to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounding with creditors or making an assignment of remuneration for their benefit. In Queensland ‘insolvency’ refers to an

attorney becoming bankrupt or insolvent or taking advantage of the laws of bankruptcy as a debtor under the Bankruptcy Act 1966 (Cth) or a similar law of a foreign jurisdiction; in the case of an attorney that is a corporation, it refers to the attorney being wound up or dissolved or a receiver (other than a receiver for a limited purpose) or administrator being appointed for the attorney. 138. Powers of Attorney Act 2006 (ACT) ss 62 (individual attorney), 64 (corporate attorney); Powers of Attorney Act 1980 (NT) ss 16(d) (general powers), 17(2)(a) (enduring powers executed prior to 17 March 2014) (see also Powers of Attorney Regulations 1982 (NT) reg 10, which adds that an attorney of a registered power who becomes insolvent must, within 14 days, serve notice of the insolvency on the Registrar-General); Powers of Attorney Act 1998 (Qld) ss 23 (general powers), 57 (enduring powers). It should be noted that in the Australian Capital Territory and Queensland enduring powers of attorney can be utilised other than for property or financial matters (such as personal and health matters): see 1.38 (ACT), 1.48 (Qld). 139. Powers of Attorney Act 2000 (Tas) s 32AE(5) (where the attorney ‘becomes bankrupt or insolvent’); Instruments Act 1958 (Vic) s 125O (applying to where the attorney is insolvent under administration); Powers of Attorney Act 2014 (Vic) s 54(1)(a) (not yet commenced). 140. This finds explicit expression by statute in some jurisdictions: Powers of Attorney Act 2006 (ACT) s 65; Powers of Attorney Act 2003 (NSW) s 46(2); Powers of Attorney Act 2000 (Tas) s 32AE(5); Instruments Act 1958 (Vic) s 125R(1) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 62(2) (enduring powers) (not yet commenced). A joint appointment of attorneys, on the other hand, would dictate that the insolvency of one attorney brings the power to an end (an outcome explicitly countenanced in Powers of Attorney Act 2006 (ACT) s 66 (limited to general powers of attorney); Powers of Attorney Act 2003 (NSW) s 46(1); Instruments Act 1958 (Vic) s 125R(2) (limited to enduring powers of attorney); Powers of Attorney Act 2014 (Vic) s 62(1) (enduring powers) (not yet commenced)), except in the Australian Capital Territory and Queensland, where statute ousts this outcome in the case of enduring powers of attorney (Powers of Attorney Act 2006 (ACT) s 67 (limited to where the principal has ‘impaired decision-making capacity’; the latter is statutorily defined: see 5.36); Powers of Attorney Act 1998 (Qld) s 59A), and in New South Wales where the power of attorney, enduring or not, makes provision for its continuation (Powers of Attorney Act 2003 (NSW) s 46(1A); commences 13 September 2013). As to the impact of joint and several appointments of attorneys see 4.50–4.55. 141. Guardianship and Administration Act 1990 (WA) s 107(1)(d). 142. Namely to make any order referred to in Guardianship and Administration Act 1990 (WA) s 109(1) or 109(2), or such other order as to the exercise of the power or the construction of its terms as the tribunal thinks fit: Guardianship and Administration Act 1990 (WA) s 109(3). 143. ALRI (DP), p 92. 144. Guardianship and Management of Property Act 1991 (ACT) s 62(1), 62(2)(c), 62(4). See 10.4. 145. Before 1 January 2014, the Guardianship Tribunal. 146. Powers of Attorney Act 2003 (NSW) s 26. 147. Powers of Attorney Act 2003 (NSW) s 36(4)(f) (cf the former Conveyancing Act 1919 (NSW) s 163G). See 10.9. 148. Powers of Attorney Act 1980 (NT) s 15(2)(c), 15(3). See 10.12. 149. Powers of Attorney and Agency Act 1984 (SA) s 11(1)(c). See 10.18. 150. As to advance personal plans see 1.44. 151. The grounds for amending advance personal plans are listed in Advance Personal Planning Act

2014 (NT) s 61(2): see 10.14. 152. Advance Personal Planning Act 2014 (NT) s 61(3). 153. Powers of Attorney Act 1998 (Qld) ss 108, 116(d). See 10.16. 154. Powers of Attorney Act 1998 (Qld) s 109A. 155. In accordance with the Guardianship and Administration Act 1995 (Tas) Pt 10 Div 1. 156. Powers of Attorney Act 2000 (Tas) s 33(2)(f). See 10.20. 157. Instruments Act 1958 (Vic) ss 125Q, 125X (see 10.24); Powers of Attorney Act 2014 (Vic) s 120(1)(b), 120(2) (not yet commenced); Guardianship and Administration Act 1990 (WA) s 109(1) (c) (see 10.28). 158. The Registration of Deeds Act 1856 (WA) s 13 entitles a person to deposit any power of attorney in the Western Australian Land Information Authority’s office for safe custody. This is not ‘registration’ in the strict sense, as it recognises no role for registration of powers of attorney except for safe-keeping. 159. Powers of Attorney Act 2006 (ACT) s 29(1). 160. Powers of Attorney Act 2006 (ACT) s 29(2). 161. The General Register of Deeds is kept under the Conveyancing Act 1919 (NSW) Pt 23 Div 1. 162. Powers of Attorney Act 2003 (NSW) s 51. 163. Powers of Attorney Act 1980 (NT) s 7(1); Land Title Act 2000 (NT) s 148. 164. Powers of Attorney Regulations 1982 (NT) reg 5(3). 165. These are contained in Powers of Attorney Act 1980 (NT) s 12, and are those that apply in the context of an instrument creating a power of attorney: see 4.48. 166. Powers of Attorney Act 1998 (Qld) ss 25(2) (non-enduring powers), 60(2) (enduring powers). 167. Land Title Act 1994 (Qld) s 133(1). 168. Land Title Act 1994 (Qld) s 135 (applies to both enduring and non-enduring powers). 169. Real Property Act 1886 (SA) ss 155, 157. 170. Real Property Act 1886 (SA) s 157. 171. Real Property Act 1886 (SA) s 159. 172. Powers of Attorney Act 2000 (Tas) s 4(1). The manner in which the register may be maintained is prescribed by s 4(3). See further 4.46. 173. Powers of Attorney Act 2000 (Tas) s 4(2). 174. Powers of Attorney Act 2000 (Tas) s 17(1). For this purpose, what must be registered is: (a) a declaration by a person of the fact of the death, bankruptcy or insolvency of the principal, or of an attorney under an enduring power of attorney, made before a person having authority to administer an oath in the place where the declaration is made; (b) an instrument of revocation of a power of attorney; (c) a notice of revocation under the hand of the principal; (d) notice of the revocation of an enduring power of attorney by virtue of s 32AE(3) (see 11.33), under the hand of the principal, or the attorney, of the enduring power of attorney; or (e) in the case of an enduring power of attorney that is revoked, by an order of the Guardianship and Administration Board under s 33 of the Act (see 10.20, 10.21), a copy of that order: s 17(2). 175. Powers of Attorney Act 2000 (Tas) ss 43–48.

176. Powers of Attorney Act 2000 (Tas) ss 29 (non-enduring powers), 32AE(6) (enduring powers).

[page 299]

Chapter 12

When Termination Takes Effect At general law Statutory protection arising out of invalidity of power General protection for attorneys and third parties Australian Capital Territory New South Wales Northern Territory Queensland South Australia Tasmania Victoria Western Australia Protection for trustees

12.1 12.6 12.8 12.8 12.11 12.14 12.17 12.21 12.24 12.27 12.32 12.35

At general law 12.1 In theory, it is at the moment when the event giving rise to the termination occurs — whether it be prescribed by the terms of the power itself,1 whether it occurs as a result of the acts of the principal or the attorney,2 whether it arises by operation of law3 or whether it follows an order of the relevant court or tribunal4 — that the authority under the power

of attorney, as between attorney and principal, and between attorney and third parties, comes to an end. Yet it cannot be assumed that, on every occasion when a terminating event has transpired, the attorney or third parties dealing with the attorney will necessarily know of the occurrence of that event, and thus the termination of the authority, contemporaneously with the event. It may be that notice of the event comes to the attorney or third parties some time thereafter. To hold an attorney in breach to the principal, or to deny effect vis-à-vis the principal to dealings by an attorney with third parties, in circumstances where either the attorney or the third parties had no knowledge, actual or constructive, of the termination of the power, is to cast liability on the innocent, which the law is, as a matter of policy, loathe to do. [page 300] 12.2 The foregoing explains why agency law dictates that where a principal terminates an agent’s authority — for the termination to be effective against both the agent and third parties with whom the agent deals on the principal’s behalf — it must be communicated to the agent and the third parties in terms that would be reasonably understood as forbidding the agent from continuing to do for the principal that which he or she was previously authorised to do.5 The termination takes effect from the time when it has been made so known to the agent (or one of two or more co-agents appointed jointly),6 and as to third parties, when it was made known to those third parties.7 The same applies, as a matter of logic, to agencies terminated by, say, the death, insanity or insolvency of the principal,8 even though, excepting insolvency, there is no effective ability for the principal to communicate this event. 12.3 As powers of attorney are merely a species of agency,9 the same law applies. Accordingly, no liability in an attorney exists vis-à-vis the principal for acting pursuant to a power that has been terminated if he or she lacks knowledge, actual or constructive,10 of that termination.11 The attorney may not be so lucky vis-à-vis third parties, to whom he or she may be liable for breach of warranty of authority.12 Third parties who deal with an attorney in the reasonable belief that the power remains operative, and thus lack actual or

constructive knowledge that the power is no longer operative,13 are not denied their rights, vis-à-vis the principal or possibly even the attorney, if it transpires that the power has been terminated. As far as the principal’s liability is concerned in this context, it draws support from the doctrine of ostensible authority, as the principal has ‘held out’ the attorney to possess the authority that, because of the terminating event, the attorney in fact lacks.14 12.4 Importantly, the potential liability of attorneys who act within their authority without knowing of its termination, and the entitlements of third parties who deal with the attorney in this event, is the subject of specific provisions in the powers of attorney legislation designed to protect both attorneys and third parties, discussed in the second part of this chapter.15 That legislation in some jurisdictions requires a [page 301] principal who revokes a power to take reasonable steps to tell all attorneys affected by the revocation.16 12.5 As an important purpose of registration of a power of attorney, which statute provides for other than in Victoria and Western Australia,17 is to give notice to third parties of the existence and scope of a power of attorney, it stands to reason that notification to the relevant registrar of the revocation of a power can substantiate third parties’ (at least constructive) knowledge that the power has terminated. For a registered power of attorney, in some jurisdictions the legislation requires the principal to take the appropriate steps to have it deregistered.18 In Queensland, subject to statute or a contrary intention in the power itself, a registered power of attorney does not cease to authorise the attorney to do for the principal anything relevant to the purpose for which it was registered until an instrument revoking the power has been registered.19 Similar provision is made in Tasmania vis-à-vis non-enduring powers.20

Statutory protection arising out of invalidity of power

12.6 In each jurisdiction statute makes express provision for the protection of attorneys and third parties where a power is exercised without the attorneys or third parties having knowledge or notice of its invalidity. As perhaps the main scenario where the spectre of invalidity may arise in this context is where the power of attorney has been revoked, these statutory provisions are aptly discussed in this Part. Though obvious similarities between the jurisdictions exist, the detail variations between them justify separate treatment. 12.7 In all jurisdictions except South Australia, moreover, statute eases the burden underscoring trustees’ duty to pay trust income and capital to the correct beneficiaries by granting relief when paying under powers of attorney. Mention of these provisions completes this chapter.21

General protection for attorneys and third parties Australian Capital Territory 12.8 The protection accorded to attorneys by the Powers of Attorney Act 2006 (ACT) applies where a power of attorney22 is invalid, and the attorney purports to exercise a power under the power of attorney without knowing the power of attorney [page 302] is invalid, or where a power exercised under a power of attorney is invalid, and the attorney purports to exercise it without knowing the power is invalid. In either of these circumstances, the attorney incurs no liability (either to the principal or anyone else) because of the invalidity, and anything done by the attorney in the exercise of the power is, for all purposes, taken to have been done as if the power of attorney or power were not invalid.23 12.9 So far as third party protection is concerned, the Act provides that if a person deals with an attorney (or someone who purports to act as an attorney) under a power of attorney, and at the time of the dealing did not know that the power of attorney (or power under the power of attorney) was invalid, a

transaction between the attorney and the person is, in favour of the person, as valid as if the power of attorney or power were not invalid.24 12.10 As the threshold for liability is premised on an attorney or third party ‘knowing’ of the power’s invalidity, the Act supplies an inclusive definition of the term ‘know’ for this purpose. It states that to ‘know’ of the relevant invalidity includes to know of an event that invalidates the power of attorney or power, or to have reason to believe the power of attorney or power is invalid.25 In effect, the statutory formulation comes close to encompassing constructive knowledge. The Act defines ‘invalidity’ of a power of attorney to mean invalidity because:26 the power of attorney purports to have been made under the law of a state or territory and does not comply with the requirements of that law; the person making the power of attorney could not make the power of attorney at the time the person purported to make it;27 or the power of attorney has been revoked, either completely or in relation to the person purporting to exercise power under the power of attorney. It also includes invalidity of the power of attorney for any other reason. ‘Invalidity’ of a power under a power of attorney means invalidity because the power is not exercisable at the time it is purportedly exercised, and includes invalidity of the power for any other reason.28

New South Wales 12.11 The Powers of Attorney Act 2003 (NSW) gives protection for an attorney in the event that a power of attorney is terminated or suspended, and the attorney does an act that would have been within the scope of the power but without knowing of its termination or suspension. In this event, the attorney can rely on the power of attorney in relation to that act ‘in the same manner and to the same extent as if the power had not been terminated or suspended’.29 This, it is said, ‘is predicated on an [page 303]

assumption that a power of attorney can be “terminated” prior to communication to the attorney of any intention on the part of the principal to terminate it’, and that it ‘is directed towards protection of an attorney who is entitled to assume that a sufficient power has continuity as well as sufficiency’.30 At the same time, the Act makes it an offence for an attorney under a power of attorney that is terminated, or where the attorney’s authority has been suspended, to do any act or thing under the power if the attorney knows of the termination or suspension at the time the attorney does the act or thing.31 12.12 Equivalent protection operates vis-à-vis third parties. The Act states that if a power of attorney is terminated or suspended, a third party32 who deals or otherwise transacts in good faith with the attorney, without knowing of the termination or suspension, is entitled to rely on the power of attorney in relation to that dealing or transaction, again ‘in the same manner and to the same extent as if the power had not been terminated or suspended’.33 12.13 No statutory definition or amplification of the concept of ‘knowledge’ for this purpose exists. Reliance must therefore be placed on the case law. In the relevant provision in the legislation preceding the 2003 Act, the term ‘notice’ was used in place of ‘knowledge’. There is authority suggesting that, irrespective of the term used,34 it goes beyond actual knowledge, extending to where ‘circumstances surrounding the use of the power create reasonable grounds for suspicion and therefore reasonable grounds to make further inquiries which, if made by the third party, would have led him to discover the revocation’.35 Again, this equates to what can be described as constructive knowledge, and is consistent with the test of knowledge applied by the general law as regards the attorney’s ostensible authority in this event.36

Northern Territory 12.14 Attorneys receive protection, as against the principal or any other person, under the Powers of Attorney Act 1980 (NT) where they act pursuant to a power that has been revoked unless they have actual notice of the revocation of the power. If the power was created by an instrument that has been registered,37 the protection applies to an act with respect to a dealing in

relation to land (excepting a lease for a period not exceeding one year) unless an instrument revoking the power has been registered [page 304] or, in any other case, unless 30 days from the registration of an instrument revoking the power has elapsed.38 Protection extends to a third party who transacts with an attorney after the power is revoked; that transaction is deemed to be valid and effectual in favour of the third party unless he or she is denied that protection on the same grounds that deny protection to the attorney.39 12.15 By adopting the threshold of ‘actual notice’, the legislation has evinced a clear intention not to impose any ‘constructive’ notice or knowledge trigger for liability. ‘Actual notice’, in its usual meaning, encompasses notice (or knowledge) to which a person would have been privy had he or she not been reckless or otherwise closed his or her eyes to the obvious. Hence, even in the Northern Territory an attorney or third party cannot secure protection if, even though he or she may not actually know of the revocation, he or she was reckless in not discovering it or closed his or her eyes to the obvious in relation to it. Having said that, although the ‘actual notice’ threshold ostensibly provides attorneys and third parties greater protection in the Northern Territory than in other jurisdictions, its interaction with the parameters of protection accorded by the registration of powers and their revocation suggests that this ‘greater protection’ may be ephemeral to a degree. In effect, the provisions throw on the principal the onus of registering the revocation of the power, and when that onus is satisfied, the attorney or third party cannot plead a lack of any notice or knowledge as a basis for protection. 12.16 Under the Advance Personal Planning Act 2013 (NT), which essentially subsumes the former enduring powers of attorney under the broader concept of an ‘advance personal plan’,40 if a decision-maker (equivalent to an attorney) purports to exercise authority for a matter in good faith and reasonably believing that circumstances exist that entitle the decision-maker to do so, and those circumstances do not in fact exist (say, the

principal may lack capacity), what is done under that authority will bind the principal.41

Queensland 12.17 The Powers of Attorney Act 1998 (Qld) protects an attorney — who purports to exercise a power of attorney without knowing it was invalid — from liability, to the principal or anyone else, because of the invalidity.42 At the same time, it renders an attorney who exercises, or purport to exercises, a power he or she knows has been revoked liable to a penalty.43 12.18 The Act validates, in favour of the third party, a transaction between an attorney purporting to use a power that is invalid if the third party does not know of its invalidity.44 If the interest of a purchaser depends on whether a transaction between an attorney and a third party was valid because of the foregoing, it is conclusively [page 305] presumed in favour of the purchaser that the third party did not at the material time know of the invalidity of the attorney’s power if:45 the third party makes a statutory declaration before, or within three months after, the completion of the purchase that he or she did not at the material time know of the invalidity of the attorney’s power;46 or the transaction between the attorney and the third party was completed within one year after the power of attorney was made. 12.19 For the above purposes, ‘attorney’ refers not just to attorneys under the Act, but also to powers of attorney made otherwise than under the Act.47 ‘Invalidity’ refers to invalidity because the document was made in another state and does not comply with the other state’s requirements, the power is not exercisable at the time it is purportedly exercised, or the document has been revoked.48 And the concept of ‘knowledge’ is defined in terms of knowledge of the happening of an event that invalidates the power or having ‘reason to believe the power is invalid’.49 It follows that it extends beyond actual knowledge towards constructive knowledge.

12.20 The Powers of Attorney Act 1998 (Qld) also protects a person who deals with an attorney under a general or enduring power of attorney made under the Act, and does not know, or have reason to believe, the principal did not have capacity to make the document. The protection takes the form of an entitlement to rely on the certificate of the witness to the document as evidence of the principal’s capacity to make the document.50

South Australia 12.21 Under the Powers of Attorney and Agency Act 1984 (SA), which in this regard applies to all agents and not merely attorneys:51 A person who acts in good faith in the purported exercise of authority as an agent after termination of the authority by the death or legal incapacity of the principal does not, by reason of the termination, incur any liability in respect of the act if it was done without knowledge of the principal’s death or incapacity.

12.22 Protection for third parties extends to those who enter into a transaction — purportedly in the exercise of the agent’s authority after termination of that authority by the death or legal incapacity of the principal — in good faith and without knowledge of the principal’s death or incapacity. In this event, the transaction is, as between the principal and the third party, as effective as if the authority had not been terminated by the principal’s death or incapacity.52 [page 306] 12.23 The lack of a statutory definition of ‘knowledge’, coupled with the statutory language referring to ‘knowledge’ as opposed to ‘actual knowledge’, suggests that concepts of knowledge as they are understood at general law, inclusive therefore of constructive knowledge, apply here. Like its Northern Territory counterpart (which, however, adopts the phrase ‘actual notice’),53 the South Australian legislation makes explicit provision for the interaction of the above protection with the registration of powers.54 It does so by giving priority to registration, to the effect that all acts or instruments executed under any registered power of attorney, but before registration of its revocation, are valid notwithstanding the revocation or death.55

Tasmania 12.24 Under the Powers of Attorney Act 2000 (Tas) protection for attorneys extends to the making of a payment or doing any act, in good faith, under a power of attorney in circumstances where the termination or revocation of the power was not at the time of the payment or act known to the attorney. In these circumstances, the attorney is not liable in respect of the payment or act by reason of the termination or revocation.56 12.25 Statutory protection applies to third parties — as to acts within the scope of authority conferred by a power of attorney registered under the Act57 — who in good faith and without notice of the termination or revocation of the power have dealt with the attorney. The dealing is treated as valid and effectual as if the termination or revocation had not taken place.58 The Act adds that where a power of attorney has been revoked or terminated, a person dealing in good faith with the attorney without notice of the revocation or termination is not affected by the revocation or termination.59 But this is qualified where the power is registered, in which case the person’s rights are not preserved if notice of the revocation or termination has been given to the Recorder.60 12.26 Consistent with the law in most other jurisdictions, the references to ‘knowledge’ and ‘notice’ are apposite to extending beyond actual knowledge or notice or, to constructive knowledge or notice.61

Victoria 12.27 The Instruments Act 1958 (Vic) makes separate provision for the protection of attorneys, and for the protection of third parties dealing with attorneys, depending on whether the power is enduring or non-enduring. Parallel provision is made under the Powers of Attorney Act 2014 (Vic), which upon its commencement will replace the relevant sections of the 1958 Act. [page 307]

12.28 Protection under a non-enduring power under the 1958 Act accrues to an attorney who does an act within the scope of the power at a time he or she does not have notice that the power had been revoked. In this event, the attorney is entitled to rely on the power, as against the principal and other persons, notwithstanding its revocation, in the same manner and to the same extent as if the power had not been revoked.62 ‘Notice’ is not statutorily defined, and so presumably includes both actual and constructive notice. The position is made ostensibly clearer under the 2014 Act. It provides that an attorney under a non-enduring power, who acts in good faith, does not incur liability merely because, when exercising the power, he or she does not know that the power of attorney (or a power under it) is invalid or has been revoked.63 The Act makes explicit that knowledge of invalidity or revocation includes knowledge of an event that invalidates or revokes the power (or a power under it)64 and having reason to believe that the power (or a power under it) is invalid or has been revoked.65 12.29 As far as enduring powers are concerned, the protection applies to attorneys who, in good faith and without knowing the power to be invalid, purport to exercise the power.66 ‘Know’ here is defined to include knowing of the happening of an event (say, the death of the principal) that invalidates the power, or to ‘have reason to believe’ that the power is invalid.67 It follows that constructive knowledge could trigger liability. 12.30 Under the 1958 Act third parties’ protection as regards acts of attorneys otherwise authorised under non-enduring powers is premised on them not having notice that the power had been revoked before the time of the attorneys’ acts. Lacking this notice, third parties (and persons claiming under them) are entitled — as against the principal, the attorney and any other persons — to rely on the power, notwithstanding its revocation, ‘in the same manner and to the same extent as if the power had not been revoked before the time of the act of the attorney’.68 The same applies to a third party dealing with an attorney under a power that is expressed to be irrevocable and given by way of security; unless the third party has notice that the power has been revoked, he or she is entitled to assume that the power is indeed irrevocable, even if this proves incorrect.69 Equivalent provision is made, albeit by reference to ‘knowledge’ rather than ‘notice’, under the 2014 Act.70 12.31 Under enduring powers of attorney, protection extends to a person (and any person claiming under that person) who, in good faith and not

knowing the power is invalid, acts in reliance on the purported exercise of the power by an attorney.71 ‘Knowledge’ takes the same meaning here as noted above. [page 308]

Western Australia 12.32 The Property Law Act 1969 (WA) states that, subject to any stipulation to the contrary in the power of attorney itself, so far as concerns any act or thing done or suffered under the power in good faith, the power operates and continues in force until notice of the principal’s death or notice of other revocation has been received by the attorney.72 Prior to notice being received, every such act or thing within the scope of the power is effectual in all respects as if the death or other revocation had not happened or been made.73 Accordingly, third parties dealing with the attorney can rely on this protection through the attorney. Again, ‘notice’ for this purpose is likely to encompass constructive notice. Third parties secure specific protection, moreover, via a statutory declaration by the attorney74 to the effect that he or she has not received notice or information of the revocation of the power by death or otherwise. If this declaration is made immediately before or is made after any such act as is mentioned above, it operates as ‘conclusive proof’ of the non-revocation at the time when the act was done in favour of all persons dealing with the attorney in good faith and for valuable consideration without notice of the death or other revocation.75 12.33 The foregoing arguably does not apply to enduring powers of attorney, given that the Act does not define ‘power of attorney’, which in turn means that the phrase should take its meaning as understood by the general law. As the latter does not recognise enduring powers as valid,76 it stands to reason that the Act was not intended to apply to those powers (which were, in any case, given statutory validity by the later Guardianship and Administration Act 1990 (WA)).77 12.34

Also, the above provisions of the 1969 Act do not affect the

operation of the Transfer of Land Act 1893 (WA) in providing for the registration of powers that authorise an attorney to transfer or deal with land under that Act.78 Under the 1893 Act, where a power of attorney is filed with the Registrar within three months from the day shown as that on which it was executed, the Registrar may79 presume that it is in force at the time of filing, unless a revocation has been previously registered,80 though it adds that this ‘shall not be construed so as to affect the force of a power of attorney filed at any time after the lapse of the period of 3 months’.81 [page 309]

Protection for trustees 12.35 The trustee legislation in all jurisdictions except South Australia protects trustees who, for the purpose of carrying out their duty to pay trust income or capital to the correct beneficiaries of the trust, rely on a power of attorney.82 It states that a trustee, acting or paying money in good faith under or in pursuance of a power of attorney (in Queensland and Western Australia, and on a statutory declaration or other sufficient evidence that the power of attorney had not been revoked), is not liable for any such act or payment by reason of the fact that, at the time of the payment or act, the principal under the power was dead (in Queensland, Victoria and Western Australia, or was bankrupt or subject to any disability) or had done some act to avoid the power, if this fact was not known to the trustee at the time of so acting or paying.83 12.36 The above provision does not, however, affect the right of any person entitled to the money against the person to whom the payment is made, and that the person so entitled has the same remedy against the person to whom the payment is made as he or she would have had against the trustee.84 In Victoria, nor does it apply to any act done or payment made by a trustee after revocation of the power has been registered under the Instruments Act 1958 (Vic).85

1.

See 11.3.

2.

See 11.10–11.24.

3.

See 11.25–11.39.

4.

See 11.40, 11.41.

5.

Debenham v Mellon (1880) 6 App Cas 24 at 36–7 per Lord Blackburn; Re Oriental Bank Corporation (1884) 28 Ch D 634 at 640 per Chitty J; Hook v Day (1971) 2 SASR 440 at 445 per Bright J; Heatons Transport (St Helens) Ltd v Transport and General Workers’ Union [1973] AC 15 at 110 per Lord Wilberforce.

6.

As to joint, as opposed to joint and several, appointments of agents (and attorneys) see 4.50–4.55.

7.

Dwyer v Herman (1881) 2 LR (NSW) L 280 at 283 per Martin CJ.

8.

See Dal Pont, Agency, [25.41]–[25.44].

9.

See 1.8–1.13.

10. Unless the power of attorney itself provides that notice or knowledge must be actual rather than constructive, in which case the law gives effect to the principal’s intention evident in this stipulation: see, for example, Parr v Reiner (1988) 143 AD 2d 427 at 429 (NY App) (where the power of attorney expressly provided that actual notice or knowledge of the revocation would be the sole means of terminating the powers conferred upon the agent, and so the attorneys were entitled to rely upon the unambiguous terms contained in this instrument). 11. The Tasmanian legislation makes express provision to this effect vis-à-vis non-enduring powers: Powers of Attorney Act 2000 (Tas) ss 27AA(1), 27(1) (‘A power of attorney, whether registered under this Act or not, is revoked if the attorney is notified of its revocation by the donor’). 12. See 9.34–9.38. 13. If there is actual or constructive knowledge in the third party, he or she cannot enforce a claim either against the principal or the attorney: see, for example, Mutual Provident Land Investing and Building Society Ltd v MacMillan (1889) 14 App Cas 596 (involving constructive knowledge). 14. See 9.23–9.33. 15. See 12.6–12.34. 16. Powers of Attorney Act 2006 (ACT) s 56; Powers of Attorney Act 1998 (Qld) ss 16(a) (general powers), 46(a) (enduring powers); Powers of Attorney Act 2014 (Vic) s 50 (enduring powers) (not yet commenced). 17. See 4.36–4.46. 18. Powers of Attorney Regulations 1982 (NT) reg 11 (which requires the principal of a registered power, within 14 days of revoking the power, to serve notice of the revocation on the RegistrarGeneral); Powers of Attorney Act 1998 (Qld) ss 16(b) (general powers), 46(b) (enduring powers). As to the registration of powers of attorney see 4.36–4.46. 19. Powers of Attorney Act 1998 (Qld) ss 25(3) (general powers), 60(3) (enduring powers). See also Real Property Act 1886 (SA) s 157 (from and after the date of entry into the register of the revocation of the power, the Registrar-General must not give effect to any application or other instrument executed pursuant to that power). 20. Powers of Attorney Act 2000 (Tas) ss 27AA(1), 27(2) (‘A power of attorney that is registered under this Act is revoked if notification of its revocation is lodged with the Recorder of Titles’). 21. See 12.35, 12.36. 22. For this purpose, ‘power of attorney’ includes a document purporting to be a power of attorney:

Powers of Attorney Act 2006 (ACT) s 70. 23. Powers of Attorney Act 2006 (ACT) s 72. 24. Powers of Attorney Act 2006 (ACT) s 73. 25. Powers of Attorney Act 2006 (ACT) s 70. 26. Powers of Attorney Act 2006 (ACT) s 70. 27. For example, a person purports to make a power of attorney but a guardian has been appointed for the person and the ACT Civil and Administrative Tribunal has not approved the provisions of the power under the Powers of Attorney Act 2006 (ACT) s 14(4) (which states that a person for whom a guardian or manager is appointed under the Guardianship and Management of Property Act 1991 (ACT) cannot make an enduring power of attorney unless the tribunal approves the provisions of the power). 28. Powers of Attorney Act 2006 (ACT) s 70. 29. Powers of Attorney Act 2003 (NSW) s 47 (equivalent to the former Conveyancing Act 1919 (NSW) s 161). 30. Hallani v Hallani (2013) 16 BPR 31,203; [2013] NSWSC 91; BC201301047 at [107], [109] per Lindsay J. 31. Powers of Attorney Act 2003 (NSW) s 49 (equivalent to the former Conveyancing Act 1919 (NSW) s 162A). 32. ‘Third party’ means a person other than the principal or an attorney on which a power is conferred by the power of attorney: Powers of Attorney Act 2003 (NSW) s 3(1). 33. Powers of Attorney Act 2003 (NSW) s 48(1) (equivalent to the former Conveyancing Act 1919 (NSW) s 162(1)). 34. The assumption appears to be that by replacing the word ‘notice’ with the word ‘knowledge’ the legislation intended no more than to update the statutory language, and not to alter the substance of the law. In any case, the law has regularly struggled with the distinction between ‘notice’ and ‘knowledge’, and indications that the former sets a less yielding threshold are met with the challenge of identifying that threshold, beyond merely semantically, in a fashion that sets it apart from the knowledge threshold. 35. Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333; [2002] NSWSC 782; BC200205296 at [93] per Austin J. His Honour applied this test to the facts, and found an accumulation of circumstances that created reasonable grounds for suspicion and therefore a duty of inquiry on the part of the third party as to whether the power of attorney had been revoked: at [100]. 36. As to a third party’s knowledge in the context of ostensible authority see 9.29–9.33. 37. As to the registration of powers of attorney in the Northern Territory see 4.41. 38. Powers of Attorney Act 1980 (NT) s 20. 39. Powers of Attorney Act 1980 (NT) s 21. 40. See 1.44. 41. Advance Personal Planning Act 2013 (NT) s 27(1). 42. Powers of Attorney Act 1998 (Qld) s 98(2). 43. Powers of Attorney Act 1998 (Qld) s 71. 44. Powers of Attorney Act 1998 (Qld) s 99(2).

45. Powers of Attorney Act 1998 (Qld) s 99(3). 46. It has been held, dealing with equivalent provision in the Powers of Attorney Ordinance (Cap 31) s 5(4) (HK) s 5(4)(b), that the statutory declaration must be made before or within three months of the purchase by the purchaser whose interest is called into question, not within three months of the transaction between the attorney and any other person: Kung Wing Chuen Francis v Marden [1990] 1 HKLR 540; WOC Finance Co Ltd v Wing On Cheong Investment Co Ltd [2000] 2 HKLRD 713 at 717 (CFI) per Deputy Judge Tong (adding that the provision ‘covers a subsequent purchase and is not restricted to the first transaction made between the donee and the person dealing with the donee’). 47. Powers of Attorney Act 1998 (Qld) ss 65, 98(1), 99(4). 48. Powers of Attorney Act 1998 (Qld) s 96. 49. Powers of Attorney Act 1998 (Qld) s 96. 50. Powers of Attorney Act 1998 (Qld) s 99(1). 51. Powers of Attorney and Agency Act 1984 (SA) s 12(1). 52. Powers of Attorney and Agency Act 1984 (SA) s 12(2). 53. See 12.16. 54. Powers of Attorney and Agency Act 1984 (SA) s 12(5) (stating that the preceding sub-sections do not affect the operation of the Real Property Act 1886 (SA) s 160 or the Registration of Deeds Act 1935 (SA) s 35). 55. Real Property Act 1886 (SA) s 160; Registration of Deeds Act 1935 (SA) s 35 (applies to powers of attorney registered under Pt 2 of the Act: see 4.44). 56. Powers of Attorney Act 2000 (Tas) s 51(1) (non-enduring powers), 51(1A) (enduring powers). 57. As to the registration of powers of attorney in Tasmania see 4.46. 58. Powers of Attorney Act 2000 (Tas) s 52. 59. Powers of Attorney Act 2000 (Tas) ss 28(1) (non-enduring powers), 32AG(1) (enduring powers). 60. Powers of Attorney Act 2000 (Tas) ss 28(2) (non-enduring powers), 32AG(2) (enduring powers). 61. See also Powers of Attorney Act 2000 (Tas) s 51(1A) (phrased in the language of ‘known’, ‘reasonably be expected to have been known’ or ‘by reasonable inquiry [could] have been known’). 62. Instruments Act 1958 (Vic) s 110(1). 63. Powers of Attorney Act 2014 (Vic) s 14. 64. Parallel provision is found in the Instruments Act 1958 (Vic) s 110(5), albeit by reference to ‘notice’. 65. Powers of Attorney Act 2014 (Vic) s 13. 66. Instruments Act 1958 (Vic) s 125U(1); Powers of Attorney Act 2014 (Vic) s 75(1) (not yet commenced). 67. Instruments Act 1958 (Vic) s 125S; Powers of Attorney Act 2014 (Vic) ss 15, 20 (not yet commenced). 68. Instruments Act 1958 (Vic) s 110(2). 69. Instruments Act 1958 (Vic) s 110(4). As to irrevocable powers see 1.30–1.34, 11.7–11.9.

70. Powers of Attorney Act 2014 (Vic) ss 15, 20 (not yet commenced). 71. Instruments Act 1958 (Vic) s 125U(2); Powers of Attorney Act 2014 (Vic) s 75(2) (not yet commenced). 72. Property Law Act 1969 (WA) s 85(1). 73. Property Law Act 1969 (WA) s 85(2). 74. Where the attorney is a corporation aggregate, the statutory declaration is sufficient if: (a) it is made by any director, manager, or secretary of the corporation, or by any officer thereof discharging the functions usually appertaining to any of those offices or by any officer of the corporation appointed for that purpose either generally or in the particular instance by the board of directors, council or other governing body by resolution or otherwise; and (b) it is to the effect that to the best of the declarant’s knowledge and belief neither the attorney nor any servant or agent of the attorney has received any such notice or information as is mentioned in s 85(3): Property Law Act 1969 (WA) s 85(4). A statement that the declarant is a director etc for the above purpose is conclusive evidence in favour of the persons mentioned in s 85(3): s 85(5). 75. Property Law Act 1969 (WA) s 85(3). 76. See 1.25, 11.25. 77. See 1.57. 78. Property Law Act 1969 (WA) s 85(7), referring to the Transfer of Land Act 1893 (WA) s 143: see 4.27, 4.28. 79. Nothing contained in the Act or in any other written law precludes the Registrar from requiring evidence to his satisfaction that a power of attorney is not revoked: Transfer of Land Act 1893 (WA) s 143(4). 80. Transfer of Land Act 1893 (WA) s 143(2). 81. Transfer of Land Act 1893 (WA) s 143(3). 82. The background to the relevant provisions is catalogued in NSWLRC (WP), pp 59–63. 83. Trustee Act 1925 (ACT) s 58(1), 58(2); Trustee Act 1925 (NSW) s 58(1); Trustee Act 1893 (NT) s 25; Trusts Act 1973 (Qld) s 70(1); Trustee Act 1898 (Tas) s 26(1); Trustee Act 1958 (Vic) s 35(2); Trustees Act 1962 (WA) s 69(1). The Australian Capital Territory provision is phrased in more modern language than its counterparts, but the substance is the same. 84. Trustee Act 1925 (ACT) s 58(3); Trustee Act 1925 (NSW) s 58(2), 58(3); Trustee Act 1893 (NT) s 25; Trusts Act 1973 (Qld) s 70(2); Trustee Act 1898 (Tas) s 26(2); Trustee Act 1958 (Vic) s 35(2) (provisos (a) and (b)); Trustees Act 1962 (WA) s 69(2). 85. Trustee Act 1958 (Vic) s 35(2) (proviso (c)). As to registration of the revocation of a power of attorney under the Instruments Act 1958 (Vic) see 11.43.

Index

References are to paragraphs A Acceptance attorneyship, of …. 4.31 acceptance …. 4.34 disclaimer …. 4.32, 11.21 enduring powers …. 4.34 multiple attorneys, context of …. 4.54 Account attorney’s duty to …. 2.9, 8.55 accountability requirements …. 8.62 court, power to order account …. 8.64 enduring powers, application vis-à-vis …. 8.57 investment decisions …. 8.59 rationale …. 8.55 tribunal, power to order account …. 8.64 executor’s duty to …. 2.17 trustees’s duty to …. 2.9 Ademption attorney’s exercise of power, by …. 9.39 Administration

power of attorney, under …. 7.14 vesting of powers of management and …. 2.24 Advance health directives enduring power of attorney …. 1.36, 1.48, 1.51, 1.55, 5.26, 10.13 Age principal’s, capacity related to …. 3.32 Agency appointment of agent, delegation distinguished from …. 8.70 breadth of authority, utility of classification in agency law based on …. 1.20 contract, whether essential to existence of …. 2.4 control by principal over agent, and nature of agency relationship …. 1.11 general agents …. 1.19 irrevocable authority, agency law notion of …. 1.30 non-contractual agencies, examples of …. 1.18 powers of attorney as …. 1.8, 1.13 all agencies not powers of attorney …. 1.11, 5.1 application, breadth of …. 1.10 authority under power, application of agency principles to …. 1.9, 5.1 duties under power, application of agency principles to …. 1.9 formality, powers of attorney and requirement for greater …. 1.12, 5.2 ‘principal,’ use of term in statute …. 1.13 ratification …. 5.47 standard of care …. 8.23 statute, use of term ‘agent’ in …. 1.13 third parties, relation of principal with …. 9.5

rights of agents …. 1.9 special agents …. 1.19 universal agents …. 1.19 writing, need for …. 4.1 Ambiguity authority, in respect of, against whom construed …. 6.41, 8.30 Assignment debts, of …. 2.26 definition …. 2.26 equity, recognition by …. 2.26 irrevocable powers, overlap with …. 2.28 parting with dominion, requirement for making over property by assignor …. 2.27 power of attorney, comparison with …. 1.16, 2.26, 9.3 Attorneys account, duty to …. 2.9 alternative …. 4.56 attorney-at-law, distinction from attorney-in-fact …. 1.5 authority of see Authority breach of warranty of authority, liability for …. 9.34 application of …. 9.35 knowledge of lack of authority …. 9.38 capacity of …. 3.46 general law, at …. 3.46 mental incapacity …. 11.30 statute, under …. 3.48

civil liability of …. 8.3 common law, at …. 8.4 equity, in …. 8.5 powers of attorney legislation, under …. 8.8 relief from …. 8.11 court’s statutory jurisdiction to grant …. 8.12 exculpation clauses …. 8.11 class, appointment by …. 4.61 criminal liability of …. 8.19 death of …. 11.35 definition New South Wales …. 1.41 Queensland …. 1.46 Tasmania …. 1.52 Victoria …. 1.54 delegate, duty not to …. 8.66 agent, appointment of, distinction from …. 8.70 application of …. 8.67 Australian Capital Territory, statute in …. 8.73 ministerial acts, delegation of …. 8.72 documents, execution by …. 7.9 duties of see Duties of attorneys exercise of power, ademption by …. 9.39 external supervision of …. 10.1 Australian Capital Territory …. 10.4 New South Wales …. 10.7

Northern Territory …. 10.12 Queensland …. 10.16 South Australia …. 10.18 Tasmania …. 10.20 Victoria …. 10.24 Western Australia …. 10.28 insolvency of …. 11.38 invalidity of power see Invalidity of power multiple, appointment of acceptance in context of …. 4.54 to act in different circumstances …. 4.57 alternative attorneys …. 4.56 joint or several appointment, compared …. 4.51 number of attorneys …. 4.52 substitute attorneys …. 4.56 personal benefit to …. 7.15 gift-making, scope for …. 7.19 prescribed expressions, allowance via …. 7.17 principals, relations between attorneys and …. 8.1 retirement of …. 4.32 substitute attorney, appointment of …. 4.33 termination of attorneyship by …. 11.21 rights of …. 8.86 agents, as …. 1.9 indemnity, to …. 8.90 lien, to …. 8.92

remuneration sourced in contract, to …. 8.87 statute, conferred by …. 8.94 solicitor, description as …. 1.5 standard of care …. 8.23 agents, as per …. 8.23 illustration …. 8.27 powers of attorney legislation, as imposed by …. 8.24 trustees, as per …. 8.24 substitute …. 4.33, 4.56 suitability of …. 3.50 third parties authority to confer benefits on …. 7.15 relations with see Third parties Authority ambiguity in respect of, against whom construed …. 6.41, 8.30 concept of …. 1.2, 5.1 construction of see Construction executor, vested in …. 2.17 forms of …. 5.15 actual authority …. 5.15 ostensible authority, distinction from …. 5.18 express authority …. 1.12, 5.15 duty of attorney to carry out …. 8.29 implied, distinction from …. 5.16 terms of power, general limitation of authority to …. 6.37 implied authority …. 5.15

construction, and …. 6.22 express, distinction from …. 5.16 ostensible, distinction from …. 5.18 ostensible …. 5.15, 9.23 actual authority, distinction from …. 5.18 companies’ capacity to appoint attorney, and …. 3.35 concept of …. 1.21, 9.6, 9.24 limitation on, third party aware of …. 9.29 powers of attorney, application to …. 9.26, 9.38 general agency law, relationship to inquiry in …. 5.1 gift-making, for …. 7.19 irrevocable authority, agency law notion of …. 1.30 legal parameters to …. 5.20 contract, personal act required by …. 5.23 illegal act, delegation of authority to commit …. 5.21 law, personal act required by …. 5.25 personal nature of principal’s position, personal act required by …. 5.24 statute, personal act required by …. 5.27 scope of …. 1.19, 5.6 breadth of application, and …. 1.10 enduring vs non-enduring powers …. 5.10, 7.2 general vs special powers …. 5.7 revocable vs irrevocable powers …. 5.12 statute, under …. 7.1 general provisions relating to …. 7.2 enduring powers of attorney …. 7.6

non-enduring powers of attorney …. 7.2 specific provisions relating to …. 7.9 administration under power of attorney …. 7.14 documents, execution by attorneys …. 7.9 payments persuant to enduring powers, limits on …. 7.23 personal benefit to attorney or third parties …. 7.15 temporal parameters to …. 5.30 commencement of authority …. 5.31 enduring powers …. 5.33 non-enduring powers …. 5.32 duration of authority …. 5.39 third parties, relations with see Third parties variation of …. 5.43 contraction of authority …. 5.44 extension of authority …. 5.44 ratification, authority conferred via …. 5.47 attorney, requirement to have purported to act as attorney …. 5.53 court’s statutory power to confirm (NSW) …. 5.57 evidence of …. 5.50 powers of attorney, application to …. 5.47 principal, knowledge in …. 5.49 prospective ratification clauses …. 5.54 B Borrow power to, interpretation of …. 6.44 Breach of warranty of authority

liability for …. 9.34 application of …. 9.35 knowledge of lack of authority …. 9.38 Business power to conduct, construction of …. 6.47 C Capacity attorney, of …. 3.46 general law, at …. 3.46 statute, under …. 3.48 suitability, of attorney …. 3.50 delegation of authority inherent in power of attorney, and …. 3.3 law of contract and issues of …. 2.7 loss of, as gradual experience …. 3.5 principal, of …. 3.2 age, related …. 3.32 entities …. 3.35 companies …. 3.35 incorporated associations …. 3.37 partnerships …. 3.38 unincorporated associations …. 3.38 general law, at …. 3.5 inquiry into …. 3.5 mental see Mental capacity statute, under …. 3.24 Australian Capital Territory …. 3.26

New South Wales …. 3.27 Northern Territory …. 3.29 Queensland …. 3.30 Tasmania …. 3.31 Victoria …. 3.30 termination of attorneyship, for …. 11.19 vitiating factors …. 3.39 non est factum …. 3.41 undue influence …. 3.43, 8.77 testamentary …. 3.6 capacity to grant a power, distinction …. 3.9, 3.10 Civil liability overview of …. 8.3 common law, at …. 8.4 equity, in …. 8.5 negligent action …. 8.4, 9.2 powers of attorney legislation, under …. 8.8 relief from …. 8.11 court’s statutory jurisdiction to grant …. 8.12 exculpation clauses …. 8.11 Class attorneys, appointment by …. 4.61 Companies execution of instruments by or on behalf of …. 7.13 powers of attorney, capacity to create …. 3.35 enduring powers …. 3.36

Compensation remedy, as …. 8.8 Confidentiality duty of …. 8.74 Consent private law, as element at core of …. 3.1 vitiating factors grounded in lack of …. 3.4 Consideration contracts, need for …. 2.2 interpretation, and issues of …. 2.7 irrevocable powers and …. 2.5 deeds, need for and enforceability …. 4.4 gifts and powers not supported by …. 2.16 Construction approach to …. 6.6 intention, focus on …. 6.7 written terms …. 6.9 interpretation of …. 6.13 factual matrix …. 6.17 implied authority …. 6.22 ordinary vs technical meaning …. 6.14 recitals, utility of …. 6.18 parol evidence rule …. 6.10 alternatives to …. 6.12 process of …. 6.1 general law, at …. 6.1

statute, under …. 6.4 strict …. 1.9, 5.3, 6.25 boundaries to …. 6.59 fraud on a power, limitation by doctrine of …. 6.64 illegality, ouster where principal involved in …. 6.66 literal wording, ‘reading down’ of …. 6.59 fiduciary law, interplay of …. 6.50 gifts, application in respect of …. 6.53, 7.15 gifts, flat rule vis-à-vis …. 6.57 voluntary transfers, application in respect of …. 6.53 hazardous powers, interpretation of …. 6.43 borrow, power to …. 6.44 conveyance of land, power to authorise …. 6.46 trust, power to create, modify or revoke …. 6.48 manifestations of …. 6.31 ambiguity, against whom construed …. 6.41, 8.30 expansive language, reading down of …. 6.34 express terms of power, general limitation of authority to …. 6.37 general words, constructed by reference to specific words …. 6.32 list of powers, in same sense …. 6.33 rationale for …. 6.27 Contract agreement, requirement for consensus ad idem …. 2.2 powers of attorney distinguished …. 2.5 appointment of attorney where personal act required by …. 5.23 capacity, and issues of …. 2.7

consideration, need for …. 2.2 interpretation, and issues of …. 2.7 irrevocable powers and …. 2.5 construction of …. 6.2 mental capacity to …. 3.7 minors, capacity in respect of …. 3.32 mutuality, need for …. 2.2, 6.2 powers of attorney as legally enforceable …. 2.6 third parties, relations with principal in …. 9.5 enforcement of contract …. 9.11 attorney bringing proceedings on principal’s behalf …. 9.13 principal, by …. 9.11 third parties, relationship between attorney and …. 9.16 general principles …. 9.5 identity of contracting parties …. 9.7 writing, need for …. 4.1 Conveyance power to authorise …. 6.46, 7.13 Copy powers of attorney, proof by …. 4.47 certified copy of instrument, definition …. 4.48 Corporations execution of instruments by or on behalf of …. 7.13 Court account, power to order …. 8.64 administrator, power to appoint …. 2.32

external supervision, powers of …. 10.1 Australian Capital Territory …. 10.5 New South Wales …. 10.7 Northern Territory …. 10.12 Queensland …. 10.16 South Australia …. 10.18 Tasmania …. 10.20 Victoria …. 10.24 Western Australia …. 10.28 termination of attorneyship by …. 11.40 Criminal act construction, ouster of strict approach where principal involved in …. 6.66 performance of, delegation for …. 5.21 Criminal liability attorneys, of …. 8.19 D Death death duties, fiduciary principle applied to …. 6.54 deceased estate, administration of …. 7.14 donatio mortis causa …. 9.3 irrevocable authority, termination by common law …. 1.30 statute …. 1.34 principal, of …. 2.18, 11.34 termination of attorneyship …. 11.34 attorney, of …. 11.35

principal, of …. 2.18, 11.34 Deeds consideration, need for and enforceability …. 4.4 formal instruments, creation by …. 4.4 powers of attorney as …. 4.4, 5.2 authority conferred by, and …. 1.2 general law, at …. 4.4 statute, under …. 4.5 validity of power, premised on formation via …. 4.2 Delegation criminal act, performance of …. 5.21 non-delegation rule …. 8.66 agent, appointment of, distinction from …. 8.70 Australian Capital Territory, statute in …. 8.73 ministerial acts, delegation of …. 8.72 powers of attorney, application to …. 8.67 personal matters, by principal of authority in relation to …. 1.23, 5.25 signature requirement …. 5.27 trustees, by …. 2.14, 5.24 Director company and, nature of legal relationship …. 1.11 Disclaimer attorneyship, of …. 4.32, 11.21 Dishonesty validity of power of attorney induced by …. 3.40 Divorce

principal, of …. 11.31 Documents attorneys, execution by …. 7.9 corporations, execution of instruments by or on behalf of …. 7.13 Donatio mortis causa giving of power of attorney not sufficient to constitute …. 9.3 Duress validity of power of attorney vitiated by …. 3.39 Duties of attorneys account, duty to …. 2.9, 8.55 accountability requirements …. 8.62 court, power to order account …. 8.64 enduring powers, application vis-à-vis …. 8.57 investment decisions …. 8.59 rationale …. 8.55 tribunal, power to order account …. 8.64 civil liability …. 8.3 common law, at …. 8.4 equity, in …. 8.5 negligent action …. 8.4, 9.2 powers of attorney legislation, under …. 8.8 relief from …. 8.11 court’s statutory jurisdiction to grant …. 8.12 exculpation clauses …. 8.11 confidentiality, duty of …. 8.74 consult, duty to …. 8.80

fiduciary see Fiduciary duties joint appointment, duty to act unanimously if …. 8.65 nature of …. 8.20 property, duty not to mix …. 8.51 sources and boundaries of …. 8.3 standard of care …. 8.23 agents, as per …. 8.23 illustration …. 8.27 powers of attorney legislation, as imposed by …. 8.24 trustees, as per …. 8.24 terms of power, duty to carry out …. 8.28 ambiguous instructions, with …. 8.30 wishes, principal’s statement of …. 8.29 undue influence by …. 3.43, 8.77 E Enduring powers of attorney acceptance by attorney under …. 4.34 contractual law of agreement, acceptance element and …. 2.5 authority commencement of …. 5.33 acceptance by attorney …. 5.38 contingency, approach to establishing occurrence of …. 5.37 gift-giving, for …. 7.19 scope of …. 5.10, 7.6 capacity incapacity …. 1.25, 5.33

springing power …. 1.27, 5.33 termination of attorneyship by attorney, of …. 11.30 principal, of …. 11.25 triggering event …. 1.28, 1.29, 5.33 Re K approach to …. 3.14 relaxation of …. 3.12, 3.13 companies, capacity to create …. 3.36 durable, terminology in United States …. 1.26, 1.27, 1.59 duration of …. 5.40 duty to account …. 8.57 external supervision of attorneys …. 10.12, 10.24, 10.28 formalities for …. 4.7 New South Wales …. 4.13 Northern Territory …. 4.15 Queensland …. 4.18 South Australia …. 4.20 Victoria …. 4.26 Western Australia …. 4.29 general law, position at …. 1.25, 1.35, 5.4 general power of attorney, distinction from Australian Capital Territory …. 1.38 New South Wales …. 1.42 historical backdrop to legislation …. 1.58 Australia …. 1.62 Canada …. 1.63

New Zealand …. 1.64 United Kingdom …. 1.60, 1.61 United States …. 1.59 lasting, terminology in English legislation …. 1.26 legislation making specific provision for …. 1.36, 5.11 New South Wales, distinction …. 1.41, 1.43 Northern Territory, and position in …. 1.44 South Australia …. 1.51 Tasmania …. 1.53 Victoria …. 1.55 Western Australia …. 1.57 multiple principals under …. 4.59 payments pursuant to, limits on …. 7.23 Queensland, position in …. 1.48 trusts, analogy with concept of …. 2.10 validity, and applicable statutory requirements in respect of …. 4.3 Equity civil liability of attorneys in …. 8.5 unconscionable dealing, power to set aside transactions infected with …. 3.39 undue influence, power to set aside transactions infected with …. 3.39, 8.77 Evidence authority conferred via ratification …. 5.50 by copy …. 4.47 certified copy of instrument, definition …. 4.48 Executor

account, duty to …. 2.17 attorney, comparison with …. 2.17 authority vested in …. 2.17 fiduciary duties of …. 2.17 ownership, full, of legal and equitable interests …. 2.18 termination of executorship …. 2.18 Express authority overview of …. 1.12, 5.15 duty of attorney to carry out …. 8.29 implied, distinction from …. 5.16 terms of power, general limitation of authority to …. 6.37 F Factual matrix written terms, interpretation of …. 6.17 Fiduciary duties agents and attorneys, imposed on …. 1.9 application to attorneys …. 8.34 illustrations of …. 8.38 boundaries to …. 8.48 breach of …. 8.37 commencement of …. 8.43 construction, interplay with fiduciary law …. 6.50 gifts, application in respect of …. 6.53, 7.15 gifts, flat rule vis-à-vis …. 6.57 voluntary transfers, application in respect of …. 6.53 duration of …. 8.43

nature of …. 8.31 property, duty not to mix …. 8.51 statutory impact on …. 8.45 ward and guardian, relationship between giving rise to …. 2.30 Forgery validity of power of attorney vitiated by …. 3.39 Formalities overview of …. 1.12, 4.6 enduring powers …. 4.7 New South Wales …. 4.13 Northern Territory …. 4.15 Queensland …. 4.18 South Australia …. 4.20 Victoria …. 4.26 Western Australia …. 4.29 signature see Signature statutes, explicit provisions for …. 4.3 Australian Capital Territory …. 4.10 New South Wales …. 4.12 Northern Territory …. 4.14 Queensland …. 4.16 South Australia …. 4.19 Tasmania …. 4.21 Victoria …. 4.24 Western Australia …. 4.27 witnessing see Witnessing

written documents, and …. 1.2 Four corners approach expansive language, reading down of …. 6.34 Fraud fraud on a power, doctrine of construction limited by …. 6.64 G Gifts ademption, failure by …. 9.39 attorneys, authority to make …. 7.19 characteristics of …. 1.4 construction, application in respect of …. 6.53, 7.15 flat rule vis-à-vis gifts …. 6.57 powers of attorney, comparison with …. 1.16, 2.15 Guardianship administrator, power of court or tribunal to appoint …. 2.32 age of majority, pertaining to persons below …. 2.30 authority, scope of …. 5.26 concept of …. 2.30 mental capacity, application to persons lacking …. 2.31 powers of attorney, comparison with …. 2.30 statutory extensions Australian Capital Territory …. 5.26 New South Wales …. 1.42 Northern Territory …. 1.45, 2.31 Queensland …. 1.49, 5.26

South Australia …. 1.51, 2.31 Tasmania …. 1.53 Victoria …. 1.55 Western Australia …. 1.57 ward and guardian, relationship between …. 2.30 Guardianship and Administration Board (Tas) advice or directions by …. 10.22 enduring powers, hearing in respect of …. 10.20 H Hazardous powers interpretation of …. 6.43 borrow, power to …. 6.44 conveyance of land, power to authorise …. 6.46 trust, power to create, modify or revoke …. 6.48 I Illegality attorneys, criminal liability of …. 8.19 construction, ouster of strict approach where principal involved in …. 6.66 delegation of authority to commit illegal act …. 5.21 Implied authority overview of …. 5.15 construction, and …. 6.22 express, distinction from …. 5.16 ostensible, distinction from …. 5.18 Incapacity see Mental capacity

Incorporated associations powers of attorney, capacity to create …. 3.37 Indemnity right to …. 8.90 Insanity irrevocable authority, termination by common law …. 1.30 statute …. 1.34 Insolvency irrevocable authority, termination by common law …. 1.30 statute …. 1.34 termination of attorneyship by …. 11.36 attorney, of …. 11.38 principal, of …. 11.36 Intention authority, vesting of …. 5.20 construction, focus in …. 6.7 Invalidity of power statutory protection arising out of …. 12.6 Australian Capital Territory …. 12.8 New South Wales …. 12.11 Northern Territory …. 12.14 Queensland …. 12.17 South Australia …. 12.21 Tasmania …. 12.24

third parties lacking notice, for …. 5.42 Victoria …. 12.27 Western Australia …. 12.32 third parties, protection of …. 5.42 trustees, protection for …. 12.35 Irrevocable powers of attorney advances to principal, where attorney makes …. 1.33 assignments, overlap with …. 2.28 authority, scope of …. 5.12 banning of, in Australian Capital Territory …. 1.34 duration of …. 5.41 interest, coupled with …. 1.31, 1.32 nature of …. 1.30, 5.13 pecuniary reward, where attorney employed by principal for …. 1.33 prospective ratification clause, construction as …. 5.55 security, given as …. 1.34 statute, under …. 1.34 termination, where power stipulated to be …. 11.7 general law, at …. 11.7 statute, under …. 11.9 valuable consideration, given for …. 1.34, 5.14 J Joint appointments overview of …. 4.50 alternative attorneys …. 4.56 enduring power, acceptance under …. 4.54

joint or several appointment, compared …. 4.51 limiting effect …. 4.55 multiple principals …. 4.59 number of attorneys …. 4.52 substitute attorneys …. 4.56 unanimously, duty to act …. 8.65 L Land conveyance of, power to authorise …. 6.46, 7.13 Law reform bodies number of attorneys, views on …. 4.52 Liability breach of warranty of authority …. 9.34 application of …. 9.35 knowledge of lack of authority …. 9.38 civil see Civil liability criminal …. 8.19 Lien right to …. 8.92 M Marriage principal, of …. 11.31 Medical treatment enduring power of attorney …. 1.36, 1.48, 1.51, 1.55, 5.26, 10.13 Mental capacity

commencement of authority, at …. 5.34 to contract …. 3.7 third parties, impact on …. 9.18 different degrees of …. 3.5 duties of attorney, and consult with principal …. 8.82 undue influence …. 8.78 enduring powers, with …. 1.25 general law, effect of mental incapacity at …. 3.19 medical assessment of principal to determine …. 5.36 onus of proving …. 3.25 power of attorney, to grant …. 3.8 enduring powers, relaxation of mental capacity requirement for …. 3.12, 3.13 protected person, where principal is …. 3.11 Re K approach to …. 3.14 Australia, application of Re K in …. 3.17 termination of attorneyship by mental incapacity …. 11.25 attorney, of …. 11.30 enduring powers of attorney …. 11.28 non-enduring powers of attorney …. 11.25 trust, in respect of creation …. 3.6 validity of power …. 1.25, 5.35 mental incapacity, in event of …. 5.33, 5.36 will-making, in …. 3.6 Ministerial acts

delegation of …. 8.72 Minors attorney, infancy and capacity to act as general law, at …. 3.46 statute, under …. 3.48 power of attorney, capacity to create …. 3.32 Misleading or deceptive conduct creation of powers of attorney, application of proscription against …. 3.40 Misrepresentation validity of power of attorney vitiated by …. 3.39 Mistake validity of power of attorney vitiated by …. 3.39 Mutuality contract, need for …. 2.2, 6.2 powers of attorney, and creation of …. 2.4 unilateral nature of exercise of power to grant …. 3.2 N Negligence liability in tort for …. 8.4, 9.2 Non est factum power of attorney, pleading defence to vitiate effect of …. 3.41 O Ostensible authority actual authority, distinction from …. 5.18 companies’ capacity to appoint attorney, and …. 3.35

concept of …. 1.21, 9.6, 9.24 impact of …. 9.23 limitation on, third party aware of …. 9.29 powers of attorney, application to …. 9.26, 9.38 Ownership executor, full, of legal and equitable interests …. 2.18 proprietary, powers not …. 1.16 P Parol evidence rule alternatives to …. 6.12 application of …. 6.10 Partnership partners in, nature of legal relationship …. 1.11 power of attorney, capacity to create …. 3.38 Personal benefits attorney or third parties, to …. 7.15 gift-making, scope for …. 7.19 prescribed expressions, allowance via …. 7.17 Personal matters delegation by principal of authority in relation to …. 5.26 Powers administration and management, of …. 2.24 appointment, of …. 2.22 distribution of donor’s property, aimed at …. 2.23 appointor, of …. 2.25 Powers of attorney

administration deceased estate, under …. 7.14 vesting of powers of management and …. 2.24 agency relationship, as …. 1.8, 1.13 all agencies not powers of attorney …. 1.11, 5.1 application, breadth of …. 1.10 authority under power, application of agency principles to …. 1.9 duties under power, application of agency principles to …. 1.9 formality, powers of attorney and requirement for greater …. 1.12 ‘principal,’ use of term in statute …. 1.13 statute, use of term ‘agent’ in …. 1.13 appointor, distinction from attorney …. 2.25 assent between principal and attorney, and nature of agency relationship …. 1.11 assignment, distinction from …. 1.16, 2.26, 2.29 attorney see Attorneys authority see Authority beneficial interest of attorney, in transactions for principal …. 1.17 capacity to create see Capacity characteristics …. 1.2, 2.1 classification …. 1.19, 1.34 commercial applications, use in …. 1.1 comparison with other legal relationships appointment, powers of …. 2.22 assignment …. 1.16, 2.26, 9.3 irrevocable powers, overlap with …. 2.28

contract …. 2.2 contractual, powers usually not …. 1.18 deductive reasoning concerning …. 2.4 language of contract, use of …. 2.3 legally enforceable contracts, powers of attorney as …. 2.6 executor …. 2.17 gifts …. 1.16, 2.15 guardianship …. 2.30 powers, generally …. 2.22 administration and management, powers of …. 2.24 appointor, power of …. 2.25 proxy …. 2.19 trusts …. 2.8 account, attorneys, trustees and duty to …. 2.9 accountability, and level of …. 2.10 appointment of attorneys, by trustees …. 2.14 delegation by trustees …. 2.14 distinctions from trusts …. 2.11 express trust, creation of …. 2.8 non-express trusts, interaction between powers of attorney and …. 2.13 sale, attorneys, trustees and exercise of power of …. 2.9 similarities to trusts …. 2.9 trusteeship, distinction from attorneyship …. 1.16 conceptualising …. 1.2 construction see Construction creating …. 4.1

appointment of attorney by class …. 4.61 attorneyship …. 4.31 acceptance …. 4.34 disclaimer …. 4.32, 11.21 enduring powers …. 4.34 deeds, as …. 4.4, 5.2 authority conferred by, and …. 1.2 general law, at …. 4.4 statute, under …. 4.5 validity of power, premised on formation via …. 4.2 formalities see Formalities joint appointments …. 4.50 alternative attorneys …. 4.56 enduring power, acceptance under …. 4.54 joint or several appointment, compared …. 4.51 limiting effect …. 4.55 multiple principals …. 4.59 number of attorneys …. 4.52 substitute attorneys …. 4.56 unanimously, duty to act …. 8.65 powers from outside jurisdiction, recognition of …. 4.49 proof by copy …. 4.47 certified copy of instrument, definition …. 4.48 registration …. 4.36, 4.46 Australian Capital Territory …. 4.38 interstate recognition of powers,

and …. 4.49 New South Wales …. 4.40 Northern Territory …. 4.41 Queensland …. 4.43 South Australia …. 4.44 statutory prescriptions for, aims of …. 4.36 Tasmania …. 4.46 termination, of …. 11.42 definition …. 1.2 American cases, adopted in multiple …. 1.3 Australian Capital Territory …. 1.37 New South Wales …. 1.41 enduring see Enduring powers of attorney evidential function …. 1.15 family applications, use in …. 1.1, 1.14, 2.6 fiduciary duties see Fiduciary duties functions …. 1.14, 1.15 general …. 1.19 fiduciary backdrop, restriction of plenary authority by …. 1.22 limited powers, distinction from …. 1.19, 5.9 personal acts, delegation of …. 5.8 special powers, distinction from …. 1.19, 5.7 general law, position at …. 1.25, 1.35, 5.4 Australian Capital Territory …. 1.39, 1.40 New South Wales, distinction …. 1.41, 1.43 Northern Territory …. 1.44

Queensland …. 1.47 South Australia …. 1.50 Tasmania …. 1.52 Victoria …. 1.54 Western Australia …. 1.56 grantor, description of parties as grantee and …. 1.4 guardianship and extension to guardianship role …. 1.36, 1.49 Australian Capital Territory …. 1.37 Queensland …. 1.49 interpretation, law of contract and issues of …. 2.7 irrevocable see Irrevocable powers of attorney limited …. 1.19 general powers, distinction from …. 1.19, 5.9 medical …. 1.51 mutuality, and creation of …. 2.4, 3.2, 6.2 non-enduring scope of authority and …. 5.10, 5.12, 7.2 non est factum, pleading defence to vitiate effect of …. 3.41 prescribed, New South Wales …. 1.41 principal see Principal proprietary, not …. 1.16, 1.17 protected person, power to make valid power …. 3.11 recognition of, from outside jurisdiction …. 4.49 removal of attorneys, courts’ powers in respect of …. 2.12 representative capacity, as aspect of …. 1.2, 1.11

reviewable …. 10.7 advice or directions concerning, application for …. 10.10 jurisdiction …. 10.9 standing …. 10.7 revocability, classification according to …. 1.30, 1.34 general law, revocable and irrevocable powers at …. 1.30 special …. 1.19 general powers, distinction from …. 1.19, 5.7 springing powers …. 1.24 definition …. 1.24 event triggering operation, classification by reference to …. 1.24, 5.36 scope of authority …. 5.33 statute, regulation under …. 1.35, 1.57 legislation directed to …. 1.35 termination see Termination of attorneyship terminology …. 1.3, 1.7 undue influence …. 3.43, 8.77 writing, need for …. 4.1, 5.2 variation of authority …. 5.44 Principal attorney and description of parties …. 1.3 duty to consult …. 8.80 power to act, effect of attorneyship on …. 9.3 attorneys, relations between principals and …. 8.1 capacity of …. 3.2

age, related to …. 3.32 entities …. 3.35 companies …. 3.35 incorporated associations …. 3.37 partnerships …. 3.38 unincorporated associations …. 3.38 general law, at …. 3.5 inquiry into …. 3.5 mental see Mental capacity statute, under …. 3.24 Australian Capital Territory …. 3.26 New South Wales …. 3.27 Northern Territory …. 3.29 Queensland …. 3.30 Tasmania …. 3.31 Victoria …. 3.30 vitiating factors …. 3.39 non est factum …. 3.41 undue influence …. 3.43, 8.77 co-principals, proceedings by and against …. 4.60 death of …. 2.18, 11.34 definition New South Wales …. 1.41 Queensland …. 1.46 South Australia …. 1.50 divorce of …. 11.31

insolvency of …. 11.36 intention of authority, vesting of …. 5.20 construction, focus in …. 6.7 marriage of …. 11.31 multiple principals …. 4.59 power to act, affect of attorneyship on …. 9.3 statute, use of term in …. 1.13 termination of attorneyship by …. 11.10 capacity of principal for …. 11.19 implication, revocation by …. 11.15 inference, revocation by …. 11.15 later power, revocation by …. 11.15 oral revocation …. 11.11 partial revocation …. 11.17 written revocation …. 11.11 formality requirements …. 11.13 third parties, relations with see Third parties wishes, statement of …. 8.29 Probate power of attorney, administration under …. 7.14 Proof powers of attorney, of by copy …. 4.47 certified copy of instrument, definition …. 4.48 Proxy agency, as form of …. 2.20

appointment of, by power of attorney …. 2.19 definition …. 2.19 formality, levels of …. 2.20 instrument appointing to vote, as valid power of attorney …. 1.10 powers of attorney, comparison with …. 2.19 voting by …. 2.21 Q Qui facit per alium facit per se agency law tenet, exceptions to …. 5.22 R Ratification authority conferred via …. 5.47 attorney, requirement to have purported to act as attorney …. 5.53 court’s statutory power to confirm (NSW) …. 5.57 evidence of …. 5.50 powers of attorney, application to …. 5.47 principal, knowledge in …. 5.49 prospective clauses, in powers of attorney …. 5.54 Receiver company and, nature of legal relationship …. 1.11 Recitals utility of …. 6.18 Registration overview of …. 4.36, 4.46 Australian Capital Territory …. 4.38

interstate recognition of powers, and …. 4.49 New South Wales …. 4.40 Northern Territory …. 4.41 Queensland …. 4.43 South Australia …. 4.44 statutory prescriptions for, aims of …. 4.36 Tasmania …. 4.46 termination, of …. 11.42 Remuneration contractual right to …. 8.87 Resignation attorney, of …. 11.21 Retirement attorney, of …. 4.32 substitute attorney, appointment of …. 4.33 termination of attorneyship by …. 11.21 Reviewable powers of attorney advice or directions concerning, application for …. 10.10 jurisdiction …. 10.9 standing …. 10.7 Revocation termination of attorneyship by …. 11.10 capacity of principal for …. 11.19 implication, revocation by …. 11.15 inference, revocation by …. 11.15 later power, revocation by inference from …. 11.15

oral revocation …. 11.11 partial revocation …. 11.17 scope of authority and …. 5.12 written revocation …. 11.11 formality requirements …. 11.13 Rights of attorneys overview of …. 8.86 agents, as …. 1.9 indemnity, to …. 8.90 lien, to …. 8.92 remuneration sourced in contract, to …. 8.87 statute, conferred by …. 8.94 S Sale power of, exercise of …. 2.9 standard of care applicable …. 8.27 Signature attorneys, execution by …. 7.9 corporations, execution of instruments by or on behalf of …. 7.13 statutory requirements Australian Capital Territory …. 4.11 delegation of …. 5.27 Northern Territory …. 4.14 Queensland …. 4.17 South Australia …. 4.19 Tasmania …. 4.22

Victoria …. 4.25 Solicitor attorney, description as …. 1.5 retainer, solicitor-client relationship arising from …. 1.5 Standard of care attorneys, of …. 8.23 agents, as per …. 8.23 illustration …. 8.27 powers of attorney legislation, as imposed by …. 8.24 trustees, as per …. 8.24 Supervision of attorneys overview of …. 10.1 Australian Capital Territory …. 10.4 New South Wales …. 10.7 Northern Territory …. 10.12 Queensland …. 10.16 South Australia …. 10.18 Tasmania …. 10.20 Victoria …. 10.24 Western Australia …. 10.28 T Termination of attorneyship overview of …. 11.1 attorney, by disclaiming, resigning, or retiring …. 11.21 general law, at …. 11.21

statute, under …. 11.23 court, termination by …. 11.40 death …. 11.34 attorney, of …. 2.35 principal, of …. 2.18, 11.34 divorce of principal …. 11.31 general law, at …. 11.31 statute, under …. 11.32 insolvency …. 11.36 attorney, of …. 11.38 principal, of …. 11.36 irrevocable, where power stipulated to be …. 11.7 general law, at …. 11.7 statute, under …. 11.9 legal significance of …. 11.1 marriage of principal …. 11.31 general law, at …. 11.31 statute, under …. 11.32 mental incapacity, by attorney, of …. 11.30 principal, of …. 11.25 principal, by …. 11.10 capacity of principal for …. 11.19 capacity of principal to revoke …. 11.19 implication, revocation by …. 11.15 inference, revocation by …. 11.15

later power, revocation by …. 11.15 oral revocation …. 11.11 partial revocation …. 11.17 written revocation …. 11.11 formality requirements …. 11.13 registration of …. 11.42 terms of power, according to …. 11.3 terminating moment or event, prescribed in power …. 11.3 terms and circumstances, inferred from …. 11.4 tribunal, termination by …. 11.40 when effective …. 12.1 general law, at …. 12.1 invalidity of power, statutory protection arising out of …. 12.6 Australian Capital Territory …. 12.8 New South Wales …. 12.11 Northern Territory …. 12.14 Queensland …. 12.17 South Australia …. 12.21 Tasmania …. 12.24 Victoria …. 12.27 Western Australia …. 12.32 trustees, protection for …. 12.35 Third parties overview of …. 9.1 attorney’s exercise of power, ademption by …. 9.39 breach of warranty of authority …. 9.34

application to attorneys …. 9.35 knowledge of lack of authority …. 9.38 contract, in …. 9.5 enforcement of contract …. 9.11 attorney bringing proceedings on principal’s behalf …. 9.13 principal, by …. 9.11 third parties, relationship between attorney and …. 9.16 general principles …. 9.5 identity of contracting parties …. 9.7 principal’s incapacity, impact of …. 9.18 invalidity of power, protection for see Invalidity of power ostensible authority …. 9.23 application of …. 9.26 concept of …. 9.24 limitation on, awareness of …. 9.29 personal benefit to …. 7.15 gift-making, scope for …. 7.19 prescribed expressions, allowance via …. 7.17 principal’s power to act, affect of attorneyship on …. 9.3 termination of authority, protection after …. 5.42 Tort negligent action, liability in …. 8.4, 9.2 Tribunal account, power to order …. 8.64 administrator, power to appoint …. 2.32

external supervision, powers of Australian Capital Territory …. 10.4 New South Wales …. 10.7 Queensland …. 10.16 Victoria …. 10.24 Western Australia …. 10.28 termination of attorneyship by …. 11.40 Trusts capacity, in respect of creation of trusts inter vivos …. 3.6 construction of …. 6.2 invalidity of power, protection for …. 12.35 powers of attorney, comparison with …. 2.8 account, attorneys, trustees and duty to …. 2.9 accountability, and level of …. 2.10 appointment of attorneys by trustees …. 2.14 delegation by trustees …. 2.14 distinctions from trusts …. 2.11 express trust, creation of …. 2.8 non-express trusts, interaction between powers of attorney and …. 2.13 sale, attorneys, trustees and exercise of power of …. 2.9 similarities to trusts …. 2.9 trusteeship, distinction from attorneyship …. 1.16 power to create, modify, or revoke …. 6.48 property, duty not to mix …. 8.51 standard of care …. 8.24 trustees’ power to delegate decision-making power …. 5.24

U Ultra vires abolition of doctrine, and companies’ capacity to create powers of attorney …. 3.35 Unconscionable dealing validity of power of attorney, as ground for denying …. 3.39 Undue influence attorney, by …. 8.77 pleading to vitiate effect of …. 3.43 Unincorporated associations powers of attorney, capacity to create …. 3.38 V Variation of authority overview of …. 5.43 contraction of authority …. 5.44 extension of authority …. 5.44 ratification, authority conferred via …. 5.47 attorney, requirement to have purported to act as attorney …. 5.53 court’s statutory power to confirm (NSW) …. 5.57 evidence of …. 5.50 powers of attorney, application to …. 5.47 principal, knowledge in …. 5.49 prospective ratification clauses …. 5.54 Victorian Civil and Administrative Tribunal (VCAT) appeals to Supreme Court from …. 10.26 enduring powers, jurisdiction regarding …. 10.24

protection for attorney complying with advice, direction or recommendation …. 10.27 rehearings …. 10.25 Voluntary transfers fiduciary principle applied to …. 6.54, 7.15 W Wills capacity, testamentary …. 3.6 capacity to grant a power, distinction …. 3.9, 3.10 construction of …. 6.2 Witnessing powers of attorney …. 4.8 attesting, to enduring powers of attorney …. 4.9 independence of witnesses, requirement for …. 4.8 requirements Australian Capital Territory …. 4.11 Northern Territory …. 4.14 Queensland …. 4.17 South Australia …. 4.19 Tasmania …. 4.22 Victoria …. 4.25 Western Australia …. 4.30 Writing construction, in see Construction need for …. 4.1, 5.2

variation of authority …. 5.44 termination of attorneyship in …. 11.11 formality requirements …. 11.13