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EVERYDAY LAW – When power of attorney is given

Cecil McCarthy

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IN RESPONSE to last week’s article some questions have been raised about the nature and scope of powers of attorneys in Barbados. In responding to those queries, I revisit the subject of power of attorneys which was dealt with in this column about three years ago.Powers of Attorney are often used by persons who do not fully appreciate the scope, extent or limits of their operation. For example, it is often believed that a power of attorney is an instrument to be given by a person who is about to lose his mental capacity or worst still, has already done so, and therefore needs a person to look after his affairs.In some countries the law provides for a power of attorney to endure beyond the mental capacity of the donor. Therefore, the attorney or agent (that is the person to whom power is given) is given authority which continues when the donor becomes mentally incapable. Under our law a power of attorney comes to an end if the donor loses his mental capacity.A power of attorney is a document by which a person (“the donor”) grants to another person (the “attorney” or agent) the power to act on his behalf and in his name. Powers of Attorney may be general or limited.  A general power of attorney is one in which the agent is given general authority to manage the affairs of the donor. Alternatively, the power of attorney may be special or limited in character. In this case it has limited objects.  For example, a person may be granted power to sell a particular piece of land on your behalf and when that objective is achieved that is the end of the power.A power of attorney defines the scope of the agent’s authority. Therefore, what an agent can do as a result of the power of attorney is a question of interpretation of the power of attorney.A transaction that is entered into by the agent is invalid if it falls outside the scope of the powers granted by the instrument.It is recommended that if the power of attorney is intended to be general, that a comprehensive statement of the powers should be set out in the document.If it is intended to create a power of attorney only for a special purpose, then care should be taken to spell out that purpose in the power of attorney. A donor can appoint more than one attorney to act on his behalf. In such cases the agents may be appointed to act jointly or if the donor so desires, the power of attorney may be expressed to permit the agents to act severally, or jointly and severally.If the power only permits the agents to act jointly then they must act collectively, if they are appointed to act jointly and severally, then this permits them to act together or individually.A power of attorney can come to an end in several different ways. For example it may be terminated by effluxion of time. If a power of attorney is expressed to be granted for a specific time, when that period expires the power comes to an end.  Another very common way in which a power comes to an end is by the loss of capacity of the donor. Where the donor loses his capacity to do the acts for which he has delegated power to the attorney the power of attorney terminates. For example, if the donor loses his mental capacity the power of the attorney is revoked.Another method of bringing a power of attorney to an end is by express revocation. The donor of a power is entitled to revoke the agent’s authority by deed of revocation.Where a person has lost his mental capacity to look after his own affairs and it is necessary or desirable to have someone empowered to look after that person’s affairs, the correct procedure is to have an application made under the Mental Health Act Cap. 45 of the Laws of Barbados to have someone appointed as receiver.Section 22 of that Act permits the High Court to appoint a receiver for a patient (i.e a person suffering from mental disorder). That person is empowered to do all such things in relation to the property and affairs of the patient as the court, in the exercise of the powers conferred on it by sections 18 and 19, orders or directs him to do and may do such things in relation thereto as the court, in the exercise of those powers, authorises him to do.On the death of the donor any power granted ceases. If the attorney becomes aware of the death he should not purport to act on the donor’s behalf. An attorney can be held liable for any loss caused by his acts where he no longer has the power because his authority has come to an end.
• Cecil McCarthy is a Queen’s Counsel.Send your letters to: Everyday Law, The Nation, Fontabelle, St Michael. Send your email to [email protected]