Powers of Attorney
Nature of Powers of Attorney
A power of attorney is a grant of a power by one person (the donor) to another (the donee) to undertake legally significant acts on behalf of the donor. A power of attorney must be in writing and must be executed as a deed.
The person granted power under the power of attorney, the donee, can, if given authority, may do any act and execute and deliver any instrument as a deed in his own name, which the donor could himself have done. Every such instrument obtained is valid as if done by the donor himself.
The 1996 Act provides for a statutory general power of attorney. This is in a simple, short form of power of attorney which gives the donor the power to do everything which the donor could himself have done.
Exercising the Power
The Powers of Attorney Act now provides a certified copy, certified by a solicitor or a regulated stockbroker to be a true copy of the original, is sufficient evidence thereof.
Where an instrument is delivered and executed as a deed (formerly under seal) by an attorney, the deed will provide, in the so-called “testimonium” or execution clause, that the person enters the deed under power of attorney.
Creation Formalities
A power of attorney did not need to be witnessed, although it was very desirable that it was witnessed from an evidential perspective. Witnessing was not strictly necessary, provided the document was signed, sealed, and delivered.
Since the 2009 Land and Conveyancing reforms, deeds need not be sealed but must be witnessed and delivered. Where the attorney is not executed by the donor but at his direction, it must be signed in another person’s presence.
The Powers of Attorney Act removes the requirement that the grant of the power is under seal. In the case of a company or other corporation, it must comply with its own constitutional requirements for the execution of a document as a deed.
Optional Proof
It is possible to lodge a power of authority with the Central Office of the High Court, verifying its execution by affidavit, statutory declaration or other evidence. The advantage of this procedure, which is little used in practice, is that it obviates the necessity of producing the original copy.
Certain Powers
The 1996 Act makes special provision in the case of powers of attorney granted by companies to convey property. They may be signed and executed by the attorney/donee in his own name as such or may be executed by him as acting in the name of and on behalf of the company in the presence of one witness.
A company may grant the power to convey real property and a person so appointed by it may transfer the property in the name of the donor.
Revocation & Protection
A power of attorney is, as with any other agency, revoked by the death, insanity and bankruptcy of the donor. It may be irrevocable if it is coupled with an interest on the part of the donee.
There are protections for the donee of the power and for third parties who act in reliance on a power of attorney, where they have no knowledge of it being revoked. The donee of a power who does not know of a revocation is not liable by reason of revocation.
A donee of a power of attorney who acts in pursuance of the power at a time when it has been revoked shall not, by reason of the revocation, incur any liability (either to the donor or to any other person) if at that time the donee did not know that the power had been revoked.
Where a power of attorney has been revoked and a person, without knowledge of the revocation, deals with the donee of the power, the transaction between them shall, in favour of that person, be as valid as if the power had then been in force.
If he knows of an event which legally causes revocation (e.g. death of the donor), he is deemed to be aware of it, irrespective of whether he knows the legal consequence of the event.
Protections and Security Power
Where a power of attorney is stated to be irrevocable and is granted to secure a proprietary interest of the donee or protect a performance of an obligation owed to the donee, then it is irrevocable as long as the interest or obligation remains undischarged.
It is not automatically revoked on death, incapacity, or bankruptcy or winding up. These provisions apply retrospectively prior to the 1996 Act, which replaced the existing weaker protections provided for under the Conveyancing Act 1882.
It is presumed in favour of a purchaser that the third party did not know of the revocation, provided a transaction between the donee and third party was completed within a year of the date of the power or if it is outside of that period, that the third party makes a statutory declaration within three months of the purchase, that he did not know of revocation.