Need advice or direction when acting under a Power of Attorney?
Nov 13, 2018If you are appointed as someone’s attorney, pursuant to a Power of Attorney, you have the right (pursuant to section 38 of the Powers of Attorney Act 2003) to seek advice and directions from the Supreme Court regarding the exercise of any function. Once that advice is received, then you cannot be held personally liable for acting in accordance with that advice.
This was the issue considered in the recent Supreme Court case of Application by Jayne Elizabeth Beamont [2018] NSWSC 1705. In that case, the applicant, Ms Beaumont, sought direction from the Court in relation to a Power of Attorney by which Ms Beaumont and her brother, Mr Peel, were appointed attorneys for their mother, Mrs Peel.
The application specifically arose in relation to Mrs Peel’s option to acquire shares in a company, Len Peel Holdings Pty Ltd (“LPH”), the option expiring on 27 October 2018. Both Ms Beaumont and Mr Peel were existing shareholders of LPH, therefore the question arose as to whether the exercise of the option on behalf of their mother would be breaching the fiduciary duties owed to her. It was noted that they “must avoid putting themselves in a position of conflict in relation to [their mother], or taking any unauthorised benefits as attorneys”.
It was acknowledged that whether or not the options were exercised, both attorneys had a personal interest in any decision made, as a result of their position as shareholders in LPH and other associated entities, and that “any decision could place them in a position of conflict between their own interests and the duties they owe as attorneys to [their mother].”
The Court considered the evidence presented (including expert opinion as to whether or not the exercise (or non-exercise) of the option was in Mrs Peel’s best interests, and how her interests would be best served), and gave advice and direction that the option should not be exercised and instead, LPH should be wound up.
Contact the Shire Legal team if you have any questions.
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