Powers of Attorney: Scope of Attorney’s Authority

When we talk about an “attorney” we are not talking about a lawyer. An attorney appointed under a Power of Attorney can be anyone appointed by you to be the person authorised to act on your behalf under that document.

Overview

An attorney as a matter of public policy is prevented from engaging in activities which are considered to be within the personal prerogative of the principal (the person granting the power of attorney). Secondly, the scope of the attorney’s appointment is governed by the actual terms of the power of attorney. Thirdly, the scope is also governed or constrained by legislative provisions which require express conferral of authority to carry out certain activities.

The principal’s personal prerogative

There are a range of actions that a principal cannot authorise an attorney to do such as:

• Performing personal contractual obligations such as employment;
• Making decisions about health care, medical treatment, welfare or lifestyle;
• Deciding to marry;
• Making a will;
• Swearing an affidavit or making a declaration about events within the personal knowledge of the principal;
• Acting as a business partner;
• Revoking a power of attorney, will, enduring guardianship and the like;
• Entering a plea to a criminal charge;
• Meeting requirement personally imposed on the principal by legislation.

Activities that may not be able to be authorised by an attorney Restrictions on authorising an attorney extend to:

• Voting subject to certain exceptions e.g. proxy votes allowed by a company’s constitution;
• Deciding to divorce;
• Acting as a trustee.

The activity must not be expressly disallowed

If the Power of Attorney expressly states some activity may not be performed by the attorney then it cannot. For instance if there is a condition that the attorney cannot “sell” real estate then the attorney is prohibited from doing so.

Activity performed in accordance with condition or limitation

As well the attorney must act in accordance with any condition or limitation specified in the Power of Attorney. For instance the principal may specify in writing a condition that the attorney cannot sell more than 1000 BHP shares in any one financial year. That condition must be followed by the attorney.

An activity that must be expressly allowed

The Powers of Attorney Act stipulates that an attorney may only perform certain nominated activities if they are expressly allowed in the Power of Attorney. These are:

• Giving a gift of all or any property of the principal;
• Giving or conferring a benefit to or on the attorney;
• Giving or conferring a benefit to or on a third party;
• Appointing a substitute, delegate or sub-attorney.

The contents of this article are general in nature. For advice specific to your circumstances, please contact your legal practitioner.

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