In the Estate of KEITH DUDLEY (DECEASED)

[2013] SASC 22

SUPREME COURT OF SOUTH AUSTRALIA

(Testamentary Causes Jurisdiction)

In the Estate of KEITH DUDLEY (DECEASED)

[2013] SASC 22

Judgment of The Honourable Justice Gray

21 February 2013

SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - GRANTS OF PROBATE AND LETTERS OF ADMINISTRATION - TO WHOM PROBATE GRANTED - PASSING OVER OF EXECUTOR AND OTHER MATTERS

Directions sought by the Registrar of Probates in respect of a power of attorney - where the executor named in the deceased's will resides interstate and is incapable of acting as executor - where the applicant who had been appointed as the executor's attorney sought a grant of probate - whether the power of attorney was a general power of attorney, an enduring power of attorney, or both a general and an enduring power of attorney - whether the restriction in section 5(4) of the Powers of Attorney and Agency Act 1984 (SA) applies - whether the power of attorney must contain a specific power to apply for a grant in order for it to be relied upon to bring an application for a grant of probate.

Held:  The power of attorney was an enduring power of attorney - an enduring power of attorney can confer authority to perform functions of the donor as a personal representative, but only when that is specifically provided for in the power of attorney - as the power of attorney did not allow for the delegation of the obtaining of a grant of probate, the applicant could not proceed with his application for a grant of probate as the executor's attorney - however, the applicant was entitled to an order pursuant to rule 44.01(b) of the Probate Rules 2004 (SA).

Administration and Probate Act 1919 (SA) s 8; Powers of Attorney and Agency Act 1984 (SA) s 4, s 5, s 6, Sch 1 and Sch 2; Probate Rules 2004 (SA) r 41 and r 44, referred to.
Tobin v Broadbent (1947) 75 CLR 378; Sweeney v Howard (2007) 13 BPR 24,381; Spina v Conran Associates Pty Ltd (2008) 13 BPR 25,435; Williams v Turner [2009] 1 Qd R 296; Bryant, Powis and Bryant Limited v La Banque du Peuple [1893] AC 170; Attwood v Munnings (1827) 7 B & C 278, considered.

In the Estate of KEITH DUDLEY (DECEASED)
[2013] SASC 22

Testamentary Causes Jurisdiction

GRAY J.

1. This matter was referred to me by the Registrar of Probates seeking directions under section 8 of the Administration and Probate Act 1919 (SA) in respect of a power of attorney.[1] 

   [1] Section 8 of the Administration and Probate Act 1919 (SA) provides:

   In any case where it appears to the Registrar doubtful whether probate or administration should be granted, or whether he should exercise any power or discretion appertaining to his office, he shall obtain the direction of a Judge, and act accordingly, and the Registrar shall be subject in all cases to the control and orders of the Court.

   Introduction

2. On 14 April 2012, Keith Dudley, the deceased, died aged 85 years.  Upon his death, the deceased possessed assets in both South Australia and Victoria, comprising a net total of $266,347.55.  By his will of 15 October 1981, the deceased appointed his widow, May Marjorie Elsie Dudley, as his sole executrix and trustee.  In particular, his will provided:

   I GIVE DEVISE & BEQUEATH the whole of my estate both real and personal whatsoever and wheresoever situate to my wife MAY MARJORIE ELSIE DUDLEY for her own use and benefit absolutely and I APPOINT her sole Executrix and Trustee hereof

3. Mrs Dudley is the sole beneficiary of her late husband’s estate.  Mrs Dudley is about 87 years of age and resides in a nursing home in Queensland. 

4. Graham John Dudley, a son of the deceased and Mrs Dudley, has sought a grant of probate of the deceased’s estate.  Graham has also been appointed as Mrs Dudley’s attorney.  Graham is presently resident in New South Wales.

5. Graham’s application for probate is brought pursuant to rule 41 of the Probate Rules 2004 (SA).  Rule 41 is in the following terms:

   41.01Where a person entitled to a grant resides outside the State of South Australia, administration may be granted to his or her lawfully constituted attorney for the use and benefit of such person, and until he or she shall duly apply for and obtain a grant:

   Provided that where the person so entitled is an executor, administration shall not be granted to such person’s attorney without notice to the other executors, if any, unless the Registrar dispenses with such notice.

   …

   41.03The power of attorney for the purposes of obtaining a grant must be under seal and witnessed by a disinterested person and must be lodged in the Registry with the application for the grant:

   Provided that if the power of attorney in addition to the specific powers required for obtaining administration, contains general powers required for other purposes, it may be given out after the grant has issued on an examined copy being lodged.

   41.04Every attorney who makes application for a grant or for the re-sealing of any grant on behalf of an executor or administrator shall be liable to make and file all estate and administration accounts, and to render all particulars and notices of succession and to file all succession accounts under any Act now or hereafter in force, and to pay all fees and duties, and shall be subject to the same liabilities and penalties as if the grant had been originally made by the Court to such attorney.

6. The power of attorney relied upon by Graham to bring the application relevantly provides:

   ENDURING POWER OF ATTORNEY

   (Pursuant to section 6 of the Powers of Attorney and Agency Act 1984)

   DONOR(S) May MARJORIE ELSIE DUDLEY

   …

   DO HEREBY NOMINATE CONSTITUTE AND APPOINT

   DONEE(S)  KEITH DUDLEY

   …

   AND-        GRAHAM JOHN DUDLEY

   …

   * JOINTLY/JOINTLY AND SEVERALLY TO BE MY ATTORNEY(S)

   I DECLARE THIS POWER TO BECOME EFFECTIVE

   *    UPON THE EXECUTION OF THIS DEED AND REMAIN EFFECTIVE NOTWITHSTANDING THAT I MAY SUFFER ANY SUBSEQUENT LEGAL INCAPACITY.

   *    ONLY IN THE EVENT OF MY SUFFERING ANY SUBSEQUENT LEGAL INCAPACITY.

   AND I AUTHORISE MY ATTORNEY(S) TO DO ON MY BEHALF ANYTHING I CAN LAWFULLY DO BY AN ATTORNEY.

   THIS AUTHORITY IS SUBJECT TO THE FOLLOWING CONDITIONS, LIMITATIONS OR EXCLUSIONS:

   NOT APPLICABLE

   [signature]

   [signature]

   CONDITIONS LIMITATIONS OR EXCLUSIONS cont….

   [signature]

   [signature]

   DATED 12th December 2005

   Execution

   IN WITNESS WHEREOF I/We the Donor/s have hereto set my/our hand and seal

   DATED 12^th December 2005

   SIGNED BY THE DONOR/S AS A DEED

   [signature]

   IN THE PRESENCE OF

   [signature]

   DONALD ALLAN PARSONS.

   FORM OF ACCEPTANCE

   I/We KEITH DUDLEY

   GRAHAM JOHN DUDLEY

   the person(s) appointed to be the donee(s) of the power of attorney created by the instrument on which the acceptance is endorsed accept the appointment and acknowledge:

   A)    That the power of attorney is an enduring power of attorney and as such may be exercised by me/us not withstanding any subsequent legal incapacity of the donor or in the event of any subsequent legal incapacity of the donor

   AND

   B) That I/We will, by accepting this power of attorney, be subject to the requirements of the Powers of Attorney and Agency Act 1984.

   SIGNED [signature]      DATED 12-12-05

   SIGNED [signature]      DATED 12-12-05

   The above power of attorney does not contain a specific power to apply for a grant of probate. 

   The Legislative Scheme

7. Before articulating the issue to be determined in the present proceeding, it is appropriate to set out the relevant provisions of the Powers of Attorney and Agency Act 1984 (SA). Section 4 establishes the application of that Act to the present proceeding. It provides:

   This Act applies in relation to a power of attorney, or any other power to act as an agent, of which the law of this State is the proper law, or which arises by virtue of a transaction of which the law of this State is the proper law.

8. Section 5 relates to general powers of attorney and is in the following terms:

   (1)A general power of attorney may be created by deed in the form set out in Schedule 1 or in a form to the same effect but expressed to be made in pursuance of this section.

   (2)The authority conferred by a general power of attorney may be expressed to be subject to specified conditions, limitations or exclusions.

   (3)Subject to subsection (4) and any conditions, limitations or exclusions to which it is expressed to be subject, a general power of attorney operates to confer—

   (a)     on the donee of the power; or

   (b)     where there is more than one donee, on the donees acting jointly or severally, as the case may be,

   authority to do on behalf of the donor anything that he can lawfully do by an attorney.

   (4)A general power of attorney does not operate to confer authority to perform functions that the donor has as a trustee or personal representative.

   The form set out in Schedule 1 is as follows:

   THIS GENERAL POWER OF ATTORNEY is made pursuant to section 5 of the Powers of Attorney and Agency Act 1984 this  day of  20 by AB of  

   1       I appoint CD of  [or CD of  and EF of  jointly or jointly and severally] to be my attorney[s].

   2      I authorise my attorney[s], subject to clause 3, to do on my behalf anything that I can lawfully do by an attorney.

   3      The authority of my attorney[s] is subject to the following conditions, limitations or exclusions:

   IN WITNESS etc

9. Section 6 is concerned with enduring powers of attorney. Section 6 provides:

   (1)     An enduring power of attorney may be created—

   (a)     by deed expressed to be made in pursuance of this section; or

   (b)     by deed containing words 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.

   (2)     A deed is not effective to create an enduring power of attorney unless—

   (a)     the attesting witness to the deed, or, where there is more than one attesting witness, at least one of them, is a person authorised by law to take affidavits; and

   (b) the deed has endorsed on it, or annexed to it, a statement of acceptance in the form set out in Schedule 2, or in a form to the same effect, executed by the person appointed to be the donee of the power.

   (3)An act done by the donee of an enduring power of attorney in pursuance of the power during a period of legal incapacity of the donor of the power is as effective as if the donor were competent and not incapacitated.

   The form appearing in Schedule 2 is entitled “Form of acceptance of enduring power of attorney” and provides:

   I,  , the person appointed to be the donee of the power of attorney created by the instrument on which this acceptance is endorsed [or to which this acceptance is annexed] accept the appointment and acknowledge—

   (a)     that the power of attorney is an enduring power of attorney and as such may be exercised by me notwithstanding any subsequent legal incapacity of the donor [or in the event of any subsequent legal incapacity of the donor]; and

   (b)     that I will, by accepting this power of attorney, be subject to the requirements of the Powers of Attorney and Agency Act 1984.

   Signed................................................

   (Donee of the Power of Attorney)

   The Issues

10. In the present proceeding the power of attorney is on a standard Land Titles Office panel form, is headed “ENDURING POWER OF ATTORNEY” and is expressed to be made pursuant to section 6 of the Powers of Attorney and Agency Act. The power of acceptance form set out in Schedule 2 of the Act is contained within the power of attorney. The conferral of authority in the power of attorney is in the following terms:

    … I AUTHORISE MY ATTORNEY(S) TO DO ON MY BEHALF ANYTHING I CAN LAWFULLY DO BY AN ATTORNEY.

    As is evident from Schedule 1, those are the words used to create a general power of attorney pursuant to section 5 of the Powers of Attorney and Agency Act. 

11. In his memorandum to me, the Registrar highlighted the fact that the power of attorney is not expressed to have been created pursuant to section 5 of the Act, but it is in a form substantially to the effect of that set out in Schedule 1 of the Act. The Registrar expressed concern that the restriction in section 5(4) of the Powers of Attorney and Agency Act on general powers of attorney may apply to the power of attorney in the present proceeding.[2] The Registrar, therefore, sought directions in respect of whether the document should be treated as both a general and enduring power of attorney and, if so, whether section 5(4) of the Act applies.

    [2] Section 5(4) of the Powers of Attorney and Agency Act 1984 (SA) provides:

    A general power of attorney does not operate to confer authority to perform functions that the donor has as a trustee or personal representative.        

12. Another issue to be resolved is whether the power of attorney must contain a specific power to apply for a grant in order for it to be relied upon by Graham in bringing his application for a grant of probate.  It is relevant to record that the Registrar in his memorandum advised that it has been the practice of this Court to require a power of attorney to contain a specific power to apply for a grant.

    Consideration

    Characterisation of the Document

13. Counsel for Graham submitted that the document is an enduring power of attorney made pursuant to section 6 of the Act. It was said that the document complies with the requirements in section 6 in that it:

    -contains words indicating an intention that the authority conferred is to be exercised notwithstanding the donor’s subsequent legal incapacity;[3]

    -the attesting witness is a person authorised by law to take affidavits;[4] and

    -the deed has endorsed on it a statement of acceptance in the form set out in Schedule 2 of the Act.[5]

    Counsel drew the Court’s attention to the fact that none of these are requirements of a general power of attorney. 

    [3] See section 6(1)(b)(i) of the Powers of Attorney and Agency Act 1984 (SA).

    [4] See section 6(2)(a) of the Powers of Attorney and Agency Act 1984 (SA).

    [5] See section 6(2)(b) of the Powers of Attorney and Agency Act 1984 (SA).

14. These contentions are supported by the fact that the power of attorney is entitled “ENDURING POWER OF ATTORNEY” and is expressed to have been made pursuant to section 6 of the Powers of Attorney and Agency Act. Graham’s case is also supported by the fact that section 6 does not provide any guidelines as to the wording to be used in an enduring power of attorney, save for the wording required in the form of acceptance of the appointment which is set out in Schedule 2 of the Act and which is contained in the power of attorney in the present proceeding. Accordingly, a donor may use such wording as is necessary to express the terms upon which the power is given. The use of the words “I AUTHORISE MY ATTORNEY(S) TO DO ON MY BEHALF ANYTHING I CAN LAWFULLY DO BY AN ATTORNEY”, which also appear in almost those precise words in the form set out in Schedule 1 for a general power of attorney, does not prevent the document from being an enduring power of attorney. In my view, the clear intention of the document is that it is an enduring power of attorney which was made pursuant to section 6 of the Powers of Attorney and Agency Act.

15. Depending on its terms, an enduring power of attorney can operate either only once a person is legally incapacitated, or both while a person has legal capacity and once the person has lost legal capacity.[6]  As noted above, the power of attorney in the present proceeding contains the following:

    I DECLARE THIS POWER TO BECOME EFFECTIVE

    *    UPON THE EXECUTION OF THIS DEED AND REMAIN EFFECTIVE NOTWITHSTANDING THAT I MAY SUFFER ANY SUBSEQUENT LEGAL INCAPACITY.

    To my mind, it is plain from the terms of the power of attorney that it was intended to operate both while Mrs Dudley has legal capacity and after Mrs Dudley has lost legal capacity.  In these circumstances, I am of the opinion that the power of attorney is an enduring power of attorney. 

    [6]    See South Australia, Parliamentary Debates, Legislative Council, 29 November 1983, 1985 (The Hon. C J Sumner) which relevantly provides:

    … An enduring power of attorney is a power by which a donor designates another his attorney in fact and the writing contains words to the effect that the power is not to be affected by the subsequent disability or incapacity of the donor, or that the power shall become effective upon the disability or incapacity of the donor.  The words used in the power show the intent of the donor that the authority conferred shall remain exercisable notwithstanding the donor’s subsequent incapacity. …

    …

    … Under the clause, an enduring power of attorney may be created by deed expressed to be made in pursuance of this provision or containing words indicating an intention that the authority conferred is to be exercisable notwithstanding any subsequent legal incapacity of the donor, or in the event of the donor’s subsequent legal incapacity. …

    Requirement for a Specific Power to Obtain a Grant

16. I turn now to consider whether a specific power in relation to obtaining a grant is required to be included in an enduring power of attorney in order for an attorney to obtain a grant.

17. As noted earlier, general powers of attorney are governed by statute.  They are restricted in that they do “not operate to confer authority to perform functions that the donor has as a trustee or personal representative”.[7] In my view, this restriction is limited to general powers of attorney and does not extend to enduring powers of attorney. Had Parliament intended for this restriction to apply to enduring powers of attorney, it may be reasonably inferred that the text of section 6 would have included a provision similar to section 5(4) of the Powers of Attorney and Agency Act. 

    [7] See section 5(4) of the Powers of Attorney and Agency Act 1984 (SA).

18. However, it is necessary for me to consider whether there are any restrictions on an enduring power of attorney.  At common law, it has been long held that a strict construction approach should be taken to the construction of terms of powers of attorney.[8]  In Tobin v Broadbent, Latham CJ observed:[9]

    [8]    See Williams v Turner [2009] 1 Qd R 296, [23]; Bryant, Powis and Bryant Limited v La Banque du Peuple [1893] AC 170; Attwood v Munnings (1827) 7 B & C 278.

    [9]    Tobin v Broadbent (1947) 75 CLR 378, 390-391.

    It is a long established rule that general words in a power of attorney are to be strictly construed: Attwood v. Munnings; Bryant v. La Banque du Peuple. …

    [Footnotes omitted.]

    Dixon J commented:[10] 

    … Prima facie, a power, however widely its general words may be expressed, should not be construed as authorizing the attorney to deal with the property of his principal for the attorney's own benefit. Something more specific and quite unambiguous is needed to justify such an interpretation. "The primary object of a power of attorney is to enable the attorney to act in the management of his principal's affairs. An attorney cannot, in the absence of a clear power so to do, make presents to himself or to others of his principal's property." Per Russell J., Reckitt v. Barnett Pembroke and Slater Ltd. a judgment approved in the House of Lords. …

    [Footnotes omitted.]

    McTiernan J expressed his concurrence with both Latham CJ and Dixon J.  Further, in Sweeney v Howard,[11] Windeyer J referred to the above observations of Latham CJ.  In particular, his Honour observed:[12]

    It is first necessary to consider whether Greg's application of the funds was within power based solely on the wording of the document itself. "[I]t 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" (Bryant, Powis, & Bryant v La Banque Du Peuple [1893] A.C. 170 at 177 per Lord Macnaghten). Furthermore, "[I]t is a long established rule that general words in a power of attorney are to be strictly construed" (Tobin v Broadbent (1947) 75 CLR 378, per Latham CJ); see also Attwood v Munnings (1827) 7 B & C; 108 ER 727. …

    [10]   Tobin v Broadbent (1947) 75 CLR 378, 401.

    [11]   Sweeney v Howard (2007) 13 BPR 24,381.

    [12]   Sweeney v Howard (2007) 13 BPR 24,381, [54].

1. In Spina v Conran Associates Pty Ltd, Austin J, having referred to the abovementioned observations of Dixon J, then commented:[13]

   It seems to me unlikely that the legislature would have intended to overturn this strongly expressed and persuasive approach to the interpretation of powers of attorney that are alleged to permit benefits to be conferred on the attorney. On its proper construction, s 163B does not purport to do so. Subsection (1) says that the attorney has the authority to do "on behalf of the person executing the instrument" anything that the person may lawfully authorise an attorney to do. That language echoes the observation of Russell J that the primary object of a power of attorney is to enable the attorney to act in the management of his principal's affairs. It also reflects the observation of Dixon J, distinguishing the case before him from a case where security is granted pursuant to an authority covering the borrowing of money on the principal's behalf. In my view the language of subs (1) preserves the reasoning of the cases, rather than overriding it. Therefore subsection (1) authorises the use of the power within the scope of the attorney's fiduciary agency, but it does not authorise the power to be used inconsistently with the fiduciary duty.

   A strict construction should be applied to a power of attorney governed by the Powers of Attorney and Agency Act.

   [13]   Spina v Conran Associates Pty Ltd (2008) 13 BPR 25,435, [82].

2. I am of the opinion that, properly construed, an enduring power of attorney can confer authority to perform functions of the donor as a personal representative, but only when that is specifically provided for in the power of attorney.  This is particularly so in the present proceeding given the nature of the delegated power. 

3. In the present proceeding, the power of attorney does not specifically allow for the delegation of the obtaining of a grant of probate.  Graham, therefore, cannot proceed with the present application. 

   A Further Matter

4. Rule 44 of the Probate Rules relevantly provides:

   44.01Where the Registrar is satisfied that a person entitled to a grant is by reason of mental or physical incapacity incapable of managing his or her affairs, the Registrar may order that administration for such person’s use and benefit limited during such person’s incapacity or in such other way as the Registrar may direct, be granted -

   (a)     in the case of mental incapacity -

   (i)    to the committee of a lunatic so found by inquisition, or

   (ii)to the administrator of the estate of such person appointed pursuant to section 35 of the Guardianship and Administration Act, 1993, or

   (iii)to the manager of the property of such person appointed under the Aged and Infirm Persons' Property Act, 1940.

   (b)     Where there is no such committee, administrator or manager appointed or in the case of physical incapacity -

   (i)if the person incapable is entitled as executor and has no interest in the residuary estate of the deceased, to the person entitled to the residuary estate;

   (ii)if the person incapable is entitled otherwise than as executor, or is an executor having an interest in the residuary estate of the deceased, to the person who would be entitled to the grant in respect of his or her estate if he or she had died intestate;

   or to such other person as the Registrar may by order direct.

   …

   44.06Unless the Registrar otherwise directs, no grant of administration shall be made under Rule 44 unless all persons entitled in the same order of priority as the person incapable have been cleared off.

   44.07In the case of physical incapacity the application for the grant under Rule 44 must, unless the Registrar otherwise directs, be supported by the consent of the person alleged to be so physically incapacitated.

   …

5. Mrs Dudley resides in the Special Care Unit (Secure Dementia and Low Care) of the Masonic Aged Care Home in Queensland.  In the last few years, Mrs Dudley has had several ACAT assessments that have consistently recommended that she be housed in a secure facility as she has a tendency to depart on important errands, but then forget where she is and become lost and disorientated.  The assessments also identified Mrs Dudley as suffering from mild dementia, manifesting itself as short term memory loss. 

6. A general practitioner at Mrs Dudley’s place of residence, Shabana Jalpurwala, confirmed that Mrs Dudley is suffering from moderate dementia.  In Dr Jalpurwala’s opinion, Mrs Dudley is having problems with her short term memory and can get confused at times, but she is able to understand legal documents if they are explained to her and can sign her name.  Nonetheless, Dr Jalpurwala concluded that, in her opinion, Mrs Dudley is not capable of performing the duties of the executor of the will of the deceased. 

7. It is also worth noting that the deceased’s daughter, the other person entitled to a grant of administration in the event that Mrs Dudley were to pass away intestate, consents to an order being made, pursuant to rule 44.01(b)(ii) of the Probate Rules, granting administration of the deceased’s estate to Graham.

8. In my view, it is appropriate to utilise rule 44 of the Probate Rules to make a grant to Graham.

   Conclusion

9. I provide the following directions to the Registrar:

   -The document should be treated as an enduring power of attorney made pursuant to section 6 of the Powers of Attorney and Agency Act.

   -The power of attorney does not specifically authorise Graham to act for and on behalf of Mrs Dudley to obtain a grant of probate.

   -Graham is not entitled to pursue the present application for a grant of probate as Mrs Dudley’s attorney. 

   -Graham is entitled to an order pursuant to rule 44.01(b)(ii) of the Probate Rules.

10. Counsel for Graham is to prepare minutes of order to give effect to these directions.