Powers of attorney: another angle
The debate over validity of powers of attorney continues, with further comments following last month's critique of the NW decision, and another shrieval ruling that takes a different line
Developments and debate continue apace following the decision of Sheriff Baird in “NW” [W 2014 SLT (Sh Ct) 83] that the document before the court in that case was invalid as a continuing power of attorney.
This note provides an update following Roddy MacLeod’s article “Power and Authority” (Journal, September 2014, 16), which should be referred to for the story up to then. I make some comments below prompted by his article. A development of which he – and I – were unaware at the time of his article was the judgment of Sheriff Gregor Murray at Forfar in B and F v B, 7 August 2014), still not yet available on the scotcourts website. In B, on the document and facts before the sheriff in that case, he reached some opposite conclusions to those of Sheriff Baird in NW.
In this note all statutory references are to the Adults with Incapacity (Scotland) Act 2000. “POA” means (any) power of attorney. “CPA” and “WPA” refer to continuing and welfare powers of attorney respectively. MacLeod points out that he wrote without the benefit of having seen the document before the court in NW. So far as material, it is reproduced, and relevant parts of the text of the document in B are reconstructed, at: www.39essex.com/docs/newsletters/mc_newsletter_october_2014_scotland.pdf, which also contains more detailed comment on B than is possible within the scope of this note.
As MacLeod indicates, the appeal in NW has been withdrawn. I understand that the sheriff refused to warrant the further application by the Office of the Public Guardian, and that the time to appeal that refusal expired without appeal. It appears that there are accordingly now no “live” proceedings concerning NW. Practitioners are, of course, taking the view that they have a responsibility to raise the question of validity of POA documents where that could be relevant. I understand that the point has been taken in criminal proceedings where an accused faces certain charges relating to his role as an attorney, and pleads that he was not an attorney because the document purporting to appoint him was invalid; and that it has been raised in proceedings in England & Wales referring to a Scottish POA. The defender’s advocate raised the point in B.
A question of compliance
The starting-point for all such issues is that CPAs and WPAs, to be valid as such, must comply with ss 15(3) and 16(3) respectively. The question in each case is whether the document does comply, not whether it needs to comply. Any train of thought which examines the latter point, rather than the former, hits the buffers when it collides with s 18, which stipulates that a POA granted after 1 April 2001 has no effect during any period of relevant incapacity of the granter unless it was granted in accordance with s 15 or 16. Such thoughts would be relevant to any remaining POAs granted before 1 January 1991 – see my comments at para 6-3 in Adult Incapacity. Powers granted from 1 January 1991 to 1 April 2001 automatically survive incapacity unless the contrary is stated in them.
Concentrating on ss 15(3)(a) and 16(3)(a), the developing issues appear to be the extent to which the precise wording of the Act should be reproduced in the document, at one extreme, and at the other the extent to which the whole circumstances – including extraneous evidence – should be taken into account (as the sheriff did in B), to determine the clear question as to whether the granter in fact intended and understood that the powers granted should continue to be operable, or commence to be operable, following incapacity.
The very full style which I offered in appendix 5 of Adult Incapacity included: “I expressly declare that it is my intention that the powers conferred in terms of this provision [number] be continuing powers in terms of section 15 of said Act”. Some vulnerable granters simply would not understand that. Thus the simple style in para 6-19 of Adult Incapacity has, following appointment of the attorney and conferment on him of full powers to manage property and financial affairs “from now on”, the sentence: “I wish him to continue doing so if I lose capacity.” That in my view suffices. I adopted a similar approach in both cases regarding WPAs. Problems only arise in relation to poor draftsmanship. Thus in B the sheriff commented that the document could have been better drafted, and if partly derived from a style, “those who have used it appear to have overlooked the meaning and purpose of a style”.
Indications of intention?
Too accommodating an approach to “clearly expresses” in ss 15(3)(b) and 16(3)(b) could be double-edged. For example, it could create doubt as to whether a granter would not wish the attorney to be able to authorise a significant restriction of liberty under the opt-out provisions proposed in the Scottish Law Commission’s Report on Adults with Incapacity (Report no 240, October 2014). Against the eventuality of enactment, from now on it would be wise to take express instructions on the point and reflect them “clearly” in any WPA.
In B, in a thoughtfully researched and reasoned judgment worthy of careful consideration (see link quoted above), regarding ss 15(3)(b) and 16(3)(b) the sheriff noted that the Scottish Law Commission’s Report on Incapable Adults (Report no 151, September 1995) rejected prescribed wording for CPAs and WPAs in favour of a recommendation that any words showing clear intention should suffice. The legislation adopted that wording. The sheriff took the view that “‘Intention’ connotes the existence of an aim or plan, something… to be achieved”. He concluded that the granter’s intentions to create a CPA and WPA were, in context, clearly expressed. Section 18 was not engaged. He respectfully declined to agree with Sheriff Baird in NW that it was necessary to include a “specific statement” in every deed. “Every case must turn on its facts. In some, such a statement may be necessary, in others not”.
It does seem that to say that a requirement in statute for “a statement which clearly expresses the granter’s intention” does not necessitate a “specific statement” is to draw a very fine distinction to try to achieve validity, and relying upon extraneous facts to determine compliance could be queried. In B, the extraneous facts all pointed to a situation in which the granter “must have” intended to grant POAs conferring continuing and welfare powers. In the document, “the attorneys are appointed within an appropriate clause, preceded by an appropriate heading in upper case. The continuing and welfare appointments are made in separate paragraphs, suggesting independent thought and intent. The individual attorneys are fully designed. The relevant sections of the 2000 Act are specified. Full financial and welfare powers are specified. Where appropriate, the Act is mentioned throughout the deed”.
Regarding ss 15(3)(ba) and 16(3)(ba), having carefully considered the background including the proceedings of the Parliament’s Health Committee at stage 1 when these provisions were introduced in 2007, the sheriff concluded that granters had an option, rather than an obligation, to stipulate how incapacity should be determined, hence the need only to record that the matter had been considered.
Developments and debate will no doubt continue.
Adrian D Ward is a partner with TC Young, Solicitors