SOME LESSER KNOWN ASPECTS OF POWERS OF ATTORNEY

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SOME LESSER KNOWN ASPECTS OF POWERS OF ATTORNEY

Various documents, for instance mortgages and leases, commonly contain a provision where the borrower/tenant appoints the lender/landlord his Attorney.

In such a case if the Power of Attorney is expressed to be irrevocable and is granted to secure
a) a proprietary interest of the attorney under the power, or
b) performance of an obligation owed to the Attorney.

then so as long as the Attorney has that interest or the obligation remains undischarged, the power shall not be revoked
c) by the donor without the consent of the Attorney or
d) by the death incapacity or bankruptcy of the donor, or if the donor is a body corporate by its winding up or dissolution.

This provision is contained in Section 109 (1) of the Instruments Act. Subsection (2) goes on to provide that a power of attorney given to secure a proprietary interest  may be given to the person entitled to the interest and the persons deriving title under him so that those persons shall be duly constituted Attorneys under the power for all purposes of the power.

The question sometimes arises to whether an Enduring Power of Attorney made in a State or Territory other than in Victoria is binding in Victoria.   Section 116 of the Instruments Act says that “if an Enduring Power of Attorney is made in another State or Territory and complies with the requirements of that other State or Territory then, to the extent the powers it gives could validly been given by an Enduring Power of Attorney made in Victoria, the Enduring Power of Attorney is to be taken to be an enduring power of attorney made under and in compliance in the requirements of the Victorian Act”.

Unfortunately the question remains unresolved as to whether a non Victorian Power of Attorney made before becoming into the operation of the relevant section of the Instruments Act is to be accorded validity in Victoria under this Section.

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