Re A Power of Attorney

Decision date: 04 September 2025

Jurisdiction: Equity - Protective List

Before: Hammerschlag CJ in Eq

Decision: Enduring power of attorney for the purposes of the Powers of Attorney Act 2003 (NSW) not created

Catchwords: AGENCY – Powers of Attorney Act 2003 (NSW) (the Act) s 19(1)(c) – where a power of attorney is expressed to be given with the intention that it will continue to be effective even if the principal lacks capacity through loss of mental capacity after execution of the instrument but the requirement for a certificate to be endorsed on, or annexed to, the instrument by the prescribed witness stating that the person is not an attorney under the power of attorney is not complied with – whether instrument creates an enduring power of attorney for the purposes of the Act – HELD – it does not

Legislation Cited: Powers of Attorney Act 2003 (NSW) ss 19, 38

Category: Principal judgment

Parties: SS (Plaintiff)

Representation: Counsel:
DC Price (Plaintiff)
Solicitors:
David Landa Stewart (Plaintiff)

File Number(s): 2025/00310904

Publication restriction: Nil

JUDGMENT

Introduction

1. By Amended Summons filed with leave on 1 September 2025, the plaintiff seeks the advice and direction of the Court whether execution of an instrument (the Instrument) appointing him attorney of a principal and expressed to be given with the intention that it will continue to be effective even if the principal lacks capacity through loss of mental capacity after execution of the Instrument, created an enduring power of attorney for the purposes of the Powers of Attorney Act 2003 (NSW) (the Act).

2. References to sections are references to sections of the Act.

3. The question as to the efficacy of the Instrument arises because the requirement for the creation of an enduring power of attorney (under s 19(c)(iv) of the Act) there be endorsed on, or annexed to, the Instrument a certificate by a prescribed witness that the person is not an attorney under the power of attorney was not met when the Instrument was executed by the principal and witnessed by the prescribed witness.

4. Subsequently, there were attempts to meet this requirement, but at a time when the principal had lost mental capacity. A secondary question is whether those attempts were successful.

Powers of Attorney Act 2003 (NSW)

5. The Act is according to its preamble an Act to consolidate and revise the legislation relating to powers of attorney. Part 4 (which spans ss 17-25) is headed Incapacity and enduring powers of attorney. Division 2 of Part 4 is headed Enduring powers of attorney, it spans ss 19-25.

6. Section 38 provides:

Advice or directions concerning reviewable powers of attorney

(1) An attorney under a reviewable power of attorney may apply for advice or direction by a review tribunal on any matter relating to the scope of the attorney’s appointment or the exercise of any function by the attorney under a reviewable power of attorney.

(2) In determining any such application, a review tribunal may decide to—

(a) approve or disapprove of any act proposed to be done by the attorney, or

(b) give such advice or direction as it considers appropriate, or

(c) vary the effect of the enduring power of attorney or make any other order it could make in an application under section 36.

(3) No proceedings lie against an attorney under a reviewable power of attorney for or on account of any act, matter or thing done or omitted to be done by the attorney in good faith and in accordance with any approval, advice or direction given under this section.

7. The current application is made pursuant to s 38.

8. Sections 17 and 18 provide:

17 Initial mental incapacity

(1) Subject to this Act, a power of attorney is not ineffective only because any act within the scope of the power is of such a nature that it was beyond the understanding of the principal through mental incapacity at the time the power is given.

(2) However, a power of attorney does not authorise an attorney to do any such act unless it is authorised by or under this Act.

18 Supervening mental incapacity does not affect validity of acts principal understands

A power of attorney is effective to the extent that it concerns any act within its scope that is of such a nature that is not beyond the understanding of the principal through mental incapacity at the time of the act.

9. Section 19(1) provides:

Creation of enduring power of attorney

(1) An instrument that creates a power of attorney creates an enduring power of attorney for the purposes of this Act if—

(a) the instrument is expressed to be given with the intention that it will continue to be effective even if the principal lacks capacity through loss of mental capacity after execution of the instrument, and

(b) execution of the instrument by the principal is witnessed by a person who is a prescribed witness (not being an attorney under the power), and

(c) there is endorsed on, or annexed to, the instrument a certificate by that person stating that—

(i) the person explained the effect of the instrument to the principal before it was signed, and

(ii) the principal appeared to understand the effect of the power of attorney, and

(iii) the person is a prescribed witness, and

(iv) the person is not an attorney under the power of attorney, and

(v) the person witnessed the signing of the power of attorney by the principal.

10. Section 19(2) provides, relevantly:

(2) In this section—

prescribed witness means—

…

(b) an Australian legal practitioner, or

11. Subsections 21(1) and (2) provide:

Effect of enduring power of attorney

(1) Subject to this Act, an act done by an attorney that is within the scope of the power conferred by an enduring power of attorney and that is of such a nature that it is beyond the understanding of the principal through mental incapacity at the time of the act is as effective as it would have been had the principal understood the nature of the act at that time.

(2) This section does not save a power of attorney from being or becoming ineffective by reason of any matter other than mental incapacity of the principal arising after the execution of the instrument creating the power.

…

The Facts

12. On 18 July 2017, a principal executed an instrument appointing the plaintiff to be her attorney. The Instrument is expressed to be given with the intention that it will continue to be effective even if the principal lacks capacity through loss of mental capacity after execution of the Instrument.

13. The principal was born in 1942 and had capacity to execute the Instrument when she did so, but from about October 2022 has suffered from mixed dementia of the Alzheimer and Vascular types. She has been assessed by a geriatrician to not have the capacity to manage tasks including monetary or contractual arrangements. She has lost her mental capacity to manage her own affairs.

14. The Instrument satisfies ss 19(1)(a) and 19(1)(b). The principal’s execution of it was witnessed by a person who was a prescribed witness. He is an independent solicitor and is not an attorney under the Instrument.

15. There was endorsed on the Instrument a certificate by him which met the requirements of ss 19(1)(c)(i), (ii), (iii) and (v). However, the certificate made no statement, as required by s 19(1)(c)(iv), that he is not an attorney under the power of attorney.

16. The omission was discovered in about October 2022 when NSW Land Registry Services declined lodgment of the Instrument. NSW Land Registry Services issued a requisition seeking a verified alteration of the Instrument to rectify the omission.

17. The omission was supposedly rectified on 18 October 2022 by a handwritten insertion into the certificate of the following words: “I am not an attorney under this power of attorney.”

18. But this insertion was not made by the witness himself, but by a lawyer employed by the plaintiff (himself a solicitor) who was authorised by the witness, by email, to do so.

19. The attorney wishes to act under the Instrument with respect to a sale of an interest in real property owned by the principal which sale is necessitated to raise money for her care.

Consideration

20. By s 19(1) an instrument creates an enduring power of attorney if it complies with each of the requirements in that section. The plain meaning of the words if it complies with is that an enduring power of attorney for the purposes of the Act is created only if it complies, and not otherwise. Part 4 of the Act is a legislative scheme for the creation and operation of enduring powers of attorney. Whereas the Act (Division 3 of Part 5) contains provisions that enable the Court to confirm the operation of a power of attorney despite the mental incapacity of a principal at the time the power is given, there is no power to excuse non-compliance with s 19(1) and give general operation as an enduring power of attorney to an instrument which does not comply.

21. The words of the section make it clear, in terms that compliance is required when the witness witnesses execution of the instrument:

22. the chapeau to s 19(1) is in the present tense;

23. the chapeau to each of s 19(1)(a), (b) and (c) is in the present tense;

24. the certificate must state that the witness explained the effect of the instrument before it was signed and the principal appeared to understand its effect;

25. self-evidently the person must be a prescribed witness at the time of the witnessing and certify that he or she is not an attorney under the power of attorney;

26. the last requirement of s 19(c) is (iv) requires the witness to certify that he or she has witnessed the signing of the power of attorney by the principal. Logically and rationally the earlier requirements in 19(c) must be satisfied before or at the time the certificate is given.

27. There is no room for subsequent compliance. If there was, the enduring power of attorney could be created at a later and indeterminate point of time, which is inimical to the underlying policy of s 19 that specific requirements must be met at a specific time so that there is certainty whether an instrument which has potentially great significance has created an enduring power of attorney. A contrary conclusion would leave open the unpalatable possibility, as would be the case here, that an enduring power of attorney is created at a time when the principal has lost mental capacity to give it.

28. Even if such a certificate could effectively be given ex post facto by a prescribed witness (which I do not think it can) the amended certificate was not given by the prescribed witness. A certificate cannot be given by someone else on a prescribed witness’ behalf. Subsequently, and more recently, the witness has himself brought about an amendment to the certificate in an effort to make it compliant but this too cannot be effective for the reasons referred to above.

Conclusion

24. The Instrument did not create and has not created an enduring power of attorney for the purposes of the Powers of Attorney Act 2003 (NSW) and the questions, as framed in the Amended Summons as to whether it did, are answered: NO.

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Amendments

05 September 2025

Coversheet - typographical corrected.