Tuesday, August 20, 2013

Delay in an attorney accepting their position

sign here
Photo Credit: Robin Hutton cc

Today’s post follows on from the recent post concerning signing of an enduring power of attorney (EPA) and considers the impact of an attorney not accepting their position immediately after the principal executes the document.

The leading case on this point is Whitney v National Australia Bank Ltd [2007] QSC 397. As usual, a full copy of the case is available here - http://www.austlii.edu.au/au/cases/qld/QSC/2007/397.html.

In this case, Mrs Murphy had executed an EPA in 2003 appointing Mr Whitney and Mr Walker as her attorneys. At some time between 2003 and 2007, Mrs Murphy developed dementia, although there was no question about her capacity at the time of her executing the EPA.

In 2007, the attorneys accepted their position by signing the EPA and shortly thereafter attempted to use it with a bank. The bank refused to accept the EPA, stating that it considered that Mrs Murphy did not have capacity at the time the attorneys signed the EPA.

Mr Whitney  applied to the Queensland Supreme Court for a declaration that the attorneys could exercise their powers under the EPA.

The Court confirmed that an attorney may accept their appointment at any time after a principal has validly executed an EPA, even if the principal has since lost capacity, primarily because an EPA is not revoked by a principal’s later loss of capacity.

In this case, the acceptance by the attorneys was therefore valid and the costs for the application were imposed on the bank, whose unequivocal refusal to accept the EPA was found to be unjustified.

Until next week.