Lack of business skills insufficient objection to power of attorney registration

The High Court has ruled against a man who objected to the registration of an Enduring Power of Attorney made on 20th July 2012 by his mother (the Donor) appointing her daughter as Attorney.

The objection was made pursuant to the provisions of s. 10 of the Powers of Attorney Act 1996.

The Enduring Power of Attorney was executed in 2012 following an examination of the Donor by a physician, who identified an “emerging dementia process” and recommended that an Enduring Power of Attorney be executed sooner rather than later.

The Attorney had been heavily involved in looking after her mother since the Donor had suffered a stroke in 2006, visiting her in her home and looking after her financial affairs through a joint bank account.

The judge noted that the Objector acknowledged that the Attorney had looked after their mother well, and that evidence of this had also been given by their other brother.

The judge also found that the Donor fully understood what she was doing at the time she executed the Enduring Power of Attorney and that she had the mental capacity to do so. Such a finding was necessary, as at one point the Objector had alleged that the Donor had not known what she was signing, although this argument was later withdrawn.

In 2015, the Donor was admitted to hospital suffering from pancreatitis. Having recovered from that condition, it became necessary for her to move into nursing home care, and since June 2015 she had been permanently resident at a nursing home in County Louth.

In September 2015, the Objector instructed his solicitor to write to the Attorney, objecting to her putting the Donor’s house up for sale. Although the Attorney explained that she believed the Donor had agreed to this, and that moreover it was necessary to pay for the Donor’s case, she withdrew the property from the market.

Also in September 2015, the Donor’s doctor wrote to her solicitor, stating that the Donor had reached a stage in her dementia where she was unable to manage her affairs, and that the Enduring Power of Attorney should therefore be registered and enacted.

The Objector wrote several times to express his objections to the registration of the Enduring Power of Attorney, often changing his grounds for objection.

The judge noted that these changes in mind also manifested themselves in the witness box. However, all objections bar one were abandoned, leaving the sole objection as being to the suitability of the Attorney, with her unsuitability arising from her decision to sell the Donor’s house.

The decision on the part of the Attorney to sell the house was based upon a number of factors. They included the shortfall of approximately €1,000 per month in the nursing home charges for her mother, maintenance and outgoings on the house and the fact that it had been broken into. For his part, the Objector believes that the house should be maintained and let.

The judge also noted that selling the Donor’s house would have implications for the Donor as the beneficiary of the provisions of the Nursing Home Support Scheme Act 2009. By turning her non-cash asset into a cash asset, the sale of the house would end the three year cap and 22.5% total cap placed on non-cash assets under the Contribution to Cost of Care Assessment.

The judge therefore considered whether a decision made by an Attorney to sell the Donor’s dwelling house in such circumstances is one which would render her a person unsuitable to act as Attorney.

Section 10(3) of the Act identifies five grounds which, if established, amount to a valid objection to the registration of an Enduring Power of Attorney. The only one identified as relevant is set out at s. 10(3)(d), namely, that having regard to all the circumstances, the Attorney is unsuitable to be the Donor’s attorney.

The judge cited with approval the case of In Re Hamilton 3 I.R. 310, in which Morris P. observed that “I believe that it is clear that for an objection to be upheld by the court a criticism far more fundamental than mere lack of management skills must be established”.

The judge also cited with approval the case of In Re SCR IEHC 308, in which Baker J. stated that “the burden lies on the objector … The legislation permits objection to be raised on a number of identified grounds and s. 10(4) provides that the court may refuse an application on any of these grounds. I accept counsel’s point that the objectors must do more than raise a hypothetical or formal ground of objection.”

The judge found that in the present case, the Objector had fallen short of demonstrating that the Attorney was unsuitable.

He noted that “the decision to sell on the part of the Attorney is a perfectly reasonable one in circumstances where the house is uninhabited, has to be maintained, has been broken into twice and has sustained water damage. No member of the family lives near to it and it is a drain on resources.”

To the extent that a decision to sell will convert the asset into a cash asset, the Attorney indicated that she considered the asset to be that of the Donor, and if all of it was to be expended on the Donor’s care, then, as she said “so be it”.

Further, the judge noted that he not believe that the Attorney could be criticised if she decided to let the house.

He noted “That would have the advantage of providing a rental income and would maintain the 22.5% cap. However, as against that, one has to consider the problems that are attendant upon the letting of a residential premises.”

Thus, the decision on the part of the Attorney to effect a sale was neither unreasonable, irrational nor irresponsible. The fact that the Objector would prefer that the house be let did not make the Attorney’s decision unreasonable or irrational or irresponsible, and did not render her unsuitable to act as Attorney.

Thus, the judge dismissed the objection and directed registration of the Enduring Power of Attorney.

  • by Rachel Killean for Irish Legal News
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