Re E (Enduring Power of Attorney)
|England & Wales
|Mrs Justice Arden
|18 February 2000
|Judgment citation (vLex)
| EWHC J0218-13
|18 February 2000
|Queen's Bench Division (Administrative Court)
 EWHC J0218-13
IN THE HIGH COURT OF JUSTICE
COURT OF PROTECTION
Royal Courts of Justice
London WC2A 2LL
The Honourable Mrs Justice Arden Dbe
Mr Robert Pearce of Counsel (instructed by Ferguson Bricknell, Chester House, George Street, Oxford OX1 2AH) appeared on behalf of the Appellant.
Mr Piers Feltham of Counsel (instructed by Darbys Mallam Lewis, 52 New Inn Hall Street, Oxford OX1 2QA) appeared on behalf of the Respondents.
I certify that the attached text records my Judgment in this mater dated 18 February 2000 (with amendments to preserve confidentiality) and pursuant to paragraph 1.12 of the Practice Direction supplementing rule 39 of the Civil Procedure Rules I give permission for this judgment to be reported or used by non parties.
(Date)Mrs Justice Arden
This is an appeal against the order of Master Lush, Master of the Court of Protection, dated 9 September 1999 whereby he dismissed objections of the appellant, Mrs X, and ordered that an instrument dated 24 November 1992 ("the 1992 power") be registered as an enduring power of attorney under the Enduring Powers of Attorney Act 1985 ("the 1985 Act") . This appeal is by way of rehearing. The discretion is that of the judge and the judge is not bound by the decision of the master ( ) . Counsel appearing on this appeal did not appear before Master Lush.
As is well known, the 1985 Act in large measure implemented recommendations in The Incapacitated Principal (Law Commission No. 122 (1983) Cmd 8977) and provides a means whereby powers of attorney ("EPAs") can be created so as to survive the subsequent mental incapacity of the donor. An EPA must be made in the prescribed form. When the attorney has reason to believe that the donor is, or is becoming, mentally incapable he must make an application to the Court of Protection for registration of the EPA. Before doing so, the attorney must give notice to the donor and the donor's relatives. Until registration, the powers of the attorney are limited. Thereafter, the attorney has the powers conferred by the EPA, which is not revoked by the supervening mental incapacity of the donor. Recourse may be had to the Law Commission's report to ascertain the defect in the law which the 1985 Act was intended to remedy, and in addition to help identify the policy behind the new legislation ( per Clarke LJ and 1239–1240 per Beldam LJ) .
If a valid notice of objection to the registration of an enduring power of attorney is received by the court within a specified time, the court must neither register the instrument nor refuse the application until it has made or caused to be made such enquiries (if any) as it thinks appropriate in the circumstances of the case (Section 6(4)) .. A notice of objection to the registration of an enduring power of attorney is valid if the objection is made on a number of specified grounds including
"(b) that the power created by the instrument no longer subsists; …
(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".
If any of these grounds of objection is established to the satisfaction of the court, the court must refuse the application for registration; in any other case the EPA must be registered (section 6(6)) . Furthermore, the court must not register an EPA, or refuse the application for registration, until completion of appropriate enquiries if it considers that those enquiries might bring to light evidence that one of the grounds of objection is satisfied (section 6(4)) . The 1985 Act makes provision for the revocation or cancellation of an EPA registration of which is refused (section 6(7) , (8)) . If, however, an EPA is registered it is irrevocable without the leave of the court. The attorney's authority to make gifts is strictly limited (section 3(5)) . Accordingly, if an attorney wishes to enter into a scheme to minimise inheritance tax payable on the donor's death, the leave of the court will generally be needed.
The background facts relating to the 1992 power are as follows. Mr and Mrs E had three daughters, Mrs Y, Mrs and Mrs X. Mrs Y and Mrs Z are the respondents to this appeal. Mr E died in 1998 and Mrs E is in her eighties. She is living in a nursing home and she has been diagnosed as having a form of Alzheimer's disease.
6. On 24 November 1992, Mrs E executed the 1992 power. It appointed Mrs Y and Mrs Z jointly to be her attorneys for the purposes of the 1985 Act with general power to act on her behalf in relation to all her property and affairs. However, it was subject to a restriction or condition that "My Attorneys shall not have my authority to sell charge or lease any land or other property in which I have an interest".
On 9 April 1997, Mrs E executed a further power ("the 1997 power") . This appointed all three daughters jointly to be her attorneys for the purposes of the 1985 Act with general authority to act on her behalf in relation to all her property and affairs. The words "save that any two of my attorneys may sign" were inserted in manuscript so as to follow the printed word "jointly". This appointment, unlike the 1992 power, was not expressed to be subject to any restriction or condition. The Master's judgment states that these words were drafted on the spot by Mrs E's solicitor because it was felt that it could be inconvenient and time-consuming to have to send all documents to Mrs Y, who lived some distance away, for her signature, but I have not taken that factor into account as it is common ground that this finding is not supported by the evidence on this appeal.
On 3 December 1998, Mrs X applied for the 1997 power to be registered. The Public Trust Office rejected her application on the ground that the condition imposed by the power was contrary to the appointment. Mrs X has not appealed against this rejection. Master Lush in his judgment stated that the additional words "save that any two of my attorneys may sign" were inconsistent with section 11(1) of the 1985 Act, which provides that "An instrument which appoints more than one person to be an attorney cannot create an enduring power unless the attorneys are appointed to act jointly or jointly and severally." (see also The Incapacitated Principal, paragraphs 4.91 to 4.98) . The 1997 power accordingly has effect at most only as an ordinary power of attorney and it is revoked by supervening mental incapacity.
On 5 February 1999, Mrs Y and Mrs Z applied to register the 1992 power. By a letter dated 10 February 1999, the donor's solicitors objected to the registration of the 1992 power on the grounds that it was revoked by the 1997 power and that the attorneys were unsuitable to be the donor's attorneys. From 26 March 1999, Mrs X objected to the registration of the 1992 power. Her grounds were those set out in the letter dated 10 February 1999. On 8 September 1999, following an oral hearing, Master Lush dismissed both grounds of objections and ordered that the 1992 power be registered forthwith. His reasons were as follows:
"The Enduring Powers of Attorney Act 1985 is silent on the question whether a later power revokes an earlier power, and I must admit that this is the first time I have been required formally to adjudicate on this particular issue.
The Law Commission's report, The Incapacitated Principal, which was published in 1983 and ultimately led to the 1985 Act, states, at paragraph 4.31:
We would like to sound a note of caution about the drafting of the attorney's authority under the EPA. Subject to the exceptions mentioned above, the donor would in general be able to insert in the prescribed form of EPA whatever provisions he thought fit whether they related to the subject-matter of the power or to the authority conferred under it. And he could grant as many EPAs in favour of as many attorneys as he liked. This would merely reflect the general principle that people should be able to make such arrangements for the management of their affairs as they please. It will be important, however, for the donor to ensure that the authority bestowed under his EPA (or EPAs if several are granted) effectively covers the whole of his property and affairs. If he leaves a 'gap' so that part of his property and affairs is not covered by an EPA, it may be necessary for the Court to intervene and appoint a receiver. And whilst we would not wish to prevent the donor giving his attorney such limited authority as he thought fit, the fact remains that the less authority that is given to the attorney, the greater is the risk that he would be unable to act for the donor at a later date. If by that time the donor were incapable so that he could not create a new power, the Court might have to take over.
I should emphasise two particular sentences in this paragraph: 'And he could grant as many EPAs in favour of as many attorneys as he liked. This would merely reflect the general principle that people should be able to make such arrangements for the management of their affairs as they please.'
I imagine that the reason why the law is deliberately silent on the question as to whether or not a later power revokes an earlier power is because it was envisaged that a donor might create more than one power and that such powers might not be created simultaneously.
Paragraph 4.31 of The Incapacitated Principal appears mainly to contemplate the situation in which a donor might appoint one attorney to manage one aspect of his or her affairs, and a different attorney to manage another aspect. For example, a donor might in one instrument...
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