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Working Paper 10 (1973) - Powers of Attorney

Part 1 - Conveyancing Act, 1919

History of this Reference (Digest)

A. Section 38-Signature

4. Section 38 (1) of the Conveyancing Act, 1919, provides that:

Every deed, whether or not affecting property, shall be signed as well as sealed, and shall be attested by at least one witness not being a party to the deed; but no particular form of words shall be requisite for the attestation.

Our interest, for present purposes, lies in the meaning of the word “signed”. The question which arises is whether a person incapable of writing, or even of putting pen to paper, because of physical infirmity, can appoint an attorney under power. In other words, can he lawfully execute a power of attorney (and, we might equally ask, any other document) by having another person sign for him?

5. The question was agitated in commentary on the English Law Commission’s Published Working Paper No. 11 on Powers of Attorney. Such commentary related to:

the person who is of perfectly sound mind but physically incapable of executing any document because of paralysis or other serious bodily injury. Section 9 of the Wills Act 1837 has long enabled a person to execute a will by having it signed for him in his presence and by his direction in the presence of attesting witnesses. But at present there is no power enabling a power of attorney to be executed in this way, with the result that a patient who, for example, is in an iron lung, cannot give a power of attorney just when he needs to.

The Commission recommended that the same rule concerning signature for another person be adopted for powers of attorney as applies under the Wills Act, and, in pursuance of that recommendation, the Powers of Attorney Act 1971 (U.K.) provided by section 1 that:

(1) An instrument creating a power of attorney shall be signed and sealed by, or by direction and in the presence of, the donor of the power.

(2) Where such an instrument is signed and sealed by a person by direction and in the presence of the donor of the power, two other persons shall be present as witnesses and shall attest the instrument.

(3) This section is without prejudice to any requirement in, or having effect under, any other Act as to the witnessing of instruments creating powers of attorney and does not affect the rules relating to the execution of instruments by bodies corporate.

6. The Law Commission did not publish any analysis of the law relating to signature by one person for another, but we now do so. Our review of the law demonstrates, we believe, that the common law still ensures the validity of a deed and of any other document, signed by one person for another, and that statutory intervention is not warranted. Views to the contrary are invited.

Signing

7. We may first dispose of the suggestion, which has been sometimes raised, that “signing” for legal purposes means the affixing of a personal signature. ² Parker, C. B., expressed the opinion in 1754 that “the character and handwriting are necessary”. ³ Likewise, Best, C. J., in 1826, refused to accept a flourish of the pen as a sufficient signature within the Bankrupts Act 1825:

It may be an M, or it may be a waving line: but if it be an M, I am of opinion that it is not sufficient, as the statute requires that the promise be signed. It is not the signature of a man’s name. I have no doubt upon the subject . . .

Taddy, Serjt.

Perhaps your Lordship will allow us to produce evidence to show, that the defendant usually signed in that way.

Best,

C. J. - No, I will not.

⁴

8. Fortunately, having regard to the decline of good handwriting in the twentieth century, those propositions are not now sound law. The last-quoted case, although expressed not to be overruled, was nevertheless nullified by the decision in Labb v. Stanley ⁵ which held a completely unsigned letter commencing “Mr Stanley begs to inform” to be sufficiently signed under the Bankrupts Act 1825.

9. In 1838 the Queen’s Bench held that the execution of a will by a mark was a sufficient signing within the Statute of Frauds, regardless of the literacy of the party signing. ⁶ By 1855 it was held by Maule, J., in Morton v. Copeland that “signature does not necessarily mean writing a person’s Christian and surname, but any mark which identifies it as the act of the party”. ⁷ A sufficient conclusion to the matter, for our purposes, is to be found in the judgment of Willes, J., in Bennett v. Brumfitt, where he said:

Personal signature was only considered necessary in the case of the royal sign manual, which is said to be distinguished from every ordinary signature. This led to a special Act of Parliament

⁸

in the reign of Geo. 4 to enable his Majesty, who was labouring under severe indisposition which rendered it painful and inconvenient for him to sign with his own hand instruments which required the royal sign manual, to appoint certain persons to affix it.

⁹

But, if a statute were necessary to enable the King to have somebody else sign for him, that was not the case in respect of his subjects who might be illiterate or physically unable to write.

10. It seems probable that the practice of having one person sign for another was known in Anglo-Saxon times. As Blackstone records, signature was more important than sealing in those days, for seals were little used. “The methods of the Saxons was for such as could write to subscribe their names, and, whether they could write or not, to affix the sign of the cross: which custom our illiterate vulgar do, for the most part, to this day keep up.” ¹⁰ Further, it was observed in the second (H. J. Todd’s) edition of Samuel Johnson’s Dictionary of the English Language that:

to sign, as to sign a writing, is an expression drawn from the,practice of our ancestors the Anglo-Saxons, who, in attesting their charters, prefixed the sign of the cross to their names .... And I apprehend that such Saxons as could not write made their crosses,

and the scribe wrote their names.

¹¹

11. According to Sheppard’s Touchstone there were six requirements to a valid deed, including writing, sealing and delivery. ¹² But signature was not one of them.

It appeareth, that the putting to or subscribing of the parties [sic] name or mark to the deed he is to seal, is not essential; for a deed [even since the Statute of Frauds and Perjuries,] may be good, albeit the party that doth seal it doth never set his name or his mark to it, so as it be duly sealed and delivered. ¹³

That followed a line of authority of some venerability. In Cromwell v. Grunsden ¹⁴ (1699) it was held that a variation between the signature of a party and his name as stated in the body of the deed was not material, “because subscribing is no essential part of the deed; sealing is sufficient”. Holt, C. J., in The Queen v. Goddard & Carlton (1703) remarked that “signing is not necessary to a deed, and deeds antiently were not signed”. ¹⁵

12. A seventeenth century pronouncement in Lemayne v. Stanley that sealing amounted to signing, “for signum is no more than a mark, and sealing is a sufficient mark ¹⁶ was discredited in Ellis v. Smith ¹⁷ (1754), and overruled in Wright v. Wakeford (1811). There Lord Eldon gave this summary of the law:

So far is sealing from being equivalent to signing, that it is determined, that sealing is not necessary; and that sealing without signing is not a sufficient execution of a will; and that attestation by a mark is good: the converse holding as to a deed; which cannot be without sealing and delivery: if signed, it may be a writing: but, if delivered, it may be a good deed, whether signed or not.

¹⁸

13. Sheppard’s Touchstone had counselled that, although unnecessary, signing was desirable “for by this means the deed may be the better proved when the witnesses are dead”. ¹⁹ Blackstone expanded upon that view by saying that “it is requisite that the party, whose deed it is should seal, and now in most cases, I apprehend should sign also”. ²⁰ An attempt was made in 1820 to apply that opinion in support of an argument that a deed sealed and delivered, but unsigned, was invalid. In that case, Taunton v. Pepler, Sir John Leach, V.C., dismissed the suggestion, “There is no authority”, he said, “for saying that a release to be effectual must be signed as well as sealed and delivered”. ²¹ That continued to be the position until the coming into effect of the Law of Property Act 1925, of which more is said below. In Cherry v. Heming (1849) the following assessment of the law was made by Rolfe, B.:

I am strongly inclined to think that the Statute [of Frauds] does not extend to deeds, because its requirements would be satisfied by the parties putting their mark to the writing. The object of the statute was to prevent matters of importance from resting on the frail testimony of memory alone. Before the Norman time, signature rendered the instrument authentic. Sealing was introduced because the people in general could not write. Then there arose a distinction between what was sealed and what was not sealed, and that went on until society became more advanced, when the statute ultimately said that certain instruments must be authenticated by signature. That means, that such instruments are not to rest on parol testimony only, and it was not intended to touch those which were already authenticated by a ceremony of a higher nature than a signature or a mark.

²²

14. There existed ample authority on which the modern work Norton on Deeds could conclude that “Signing is not necessary to make a deed valid as such at common law, nor, contrary to Blackstone’s opinion, by the Statute of Frauds.” ²³

15. In England, the position changed with the passing of the Law of Property Act 1925, section 73 (1) of which provided that:

Where an individual executes a deed, he shall either sign or place his mark upon the same and sealing alone shall not be deemed sufficient.

A somewhat similar result had been earlier reached in New Zealand. Section 26 (1) of its Property Law Act 1908 provided that:

Every deed, whether or not affecting property, shall be signed by the party to be bound thereby, and shall also be attested by at least one witness.

It was upon that model that section 38 of the Conveyancing Act, 1919, of New South Wales was framed. In his Report as Royal Commissioner on the Bill for that Act, Mr Justice (later, Sir John) Harvey remarked of the proposed section:

By the common law, a deed did not require signature, but did require to be sealed, a rule dating from the days when writing was a rare accomplishment. in practice, every deed is signed. This section makes signature of a deed obligatory.

²⁴

So, from the operation of those respective statutes of the United Kingdom and of New South Wales, signature of a deed became essential to its validity.

16. The matter does not end there. Although the English section 73 seems to preclude signature by any other person than the party making the deed, the New South Wales section 38 is much less specific who is to sign. It seems that in New South Wales the common law rules governing signature apply to a deed, when the party making it directs some other person to sign for him (see Tennant v. London County Council, paragraph 24 below). As a starting point for a review of those rules we refer to the following opinion expressed in Williams on Title:

After 1925 [in England] a signature or the placing of a mark is essential but this does not necessarily involve signature by the actual party to the deed. A deed signed by a stranger with the name of the party by the direction and in the presence of that party is sufficient and so is a signature by an attorney duly authorized by a power of attorney . . . As a general rule a person should be authorized by deed where it is intended that he shall execute a deed for another person. There are, however, cases where the execution of the deed authorizing such execution presents as many difficulties as the execution of the deed itself, for example in the case of a blind person or a deaf mute. To meet such cases and other similar cases it has always been the law that a person is bound by a deed executed in his name by another so long as it is executed in his presence and by his direction.

²⁵

It is with the latter class of cases-those where a signatory of a deed is not himself authorized by deed to sign that we are here concerned. Our ensuing analysis is mainly confined to them.

Development of Common Law Principles

17. The earliest reported English case which explicitly dealt with, and confirmed the legality of, signature of a deed for a party by another person, was The King v. The Inhabitants of Longnor, ²⁶decided in 1833.

There an apprenticeship deed was signed for the apprentice and his father by a third person at their request, and afterwards delivered. The court unanimously found the execution to have been sufficient, the most extensive judgment on the point being that of Littledale, J., who said: “I think there was a sufficient delivery and execution of the deed; for the father and son met for the purpose of executing it, their names, by their authority, [being] written opposite to two of the seals”. ²⁷

18. Later cases of the nineteenth century confirmed the common law’s acceptance of signature by one person for another of a variety of documents. A striking instance was Lord v. Hall where the endorsement of a promissory note with the name of the endorser written, at the direction of the manager of his business, by a third party, was held valid. Citing with approval the decision in Ex parte Sutton, Maule, J., held that:

There was evidence that the wife had the general management of her husband’s business. And, when he authorized her to draw, accept, and indorse bills in his name, that may fairly be extended to authorizing her to select some person,

pro hac vice,

to write the name of her husband for her. It may be that this may lead to some inconvenience. But, her husband having trusted her to exercise her discretion as to drawing, accepting, and endorsing, may be assumed to trust her also to use her discretion to select the hand of another to carry her intention into effect.

²⁹

19. The Queen v. The Justices of Kent3l is also a helpful decision, though its facts were Emited to assessing the validity of a notice of appeal signed in the appellant’s name with his authority by his solicitor’s clerk. The court had no difficulty in accepting the signature. Blackburn, J., confirmed that, with statutory exceptions, “At common law, where a person authorizes another to, sign for him, the signature of the person so signing is the signature of the person authorizing it” ³¹ Quain, and Archibald, JJ., held that such cases fell within the maxim qui facit per alium facit per se, ³² and Quain, J., considered that the rule embodied in that maxim ought not to be restricted, unless a statute made personal signature indispensable. ³³

20. We have discovered no English decision directly covering the case of a person physically unable to write. The matter was raised by Byles, J., in Bennett v. Brumfitt, when he remarked of the statutory requirement that a notice of objection in respect of a borough election be “signed by the person objecting”, that “One has heard of people born with neither hands nor feet. How would such a person sign a notice of objection?” ³⁴ In more recent times an answer to that rhetorical question has been given by Denning, J.J., in London County Council v. Agricultural Food Products Ltd in the following terms:

There are some cases where a man is allowed to sign by the hand of another who writes his name for him. Such a signature is called a signature by procuration, by proxy, “per pro.,” or more shortly “p.p.”. All of these expressions are derived from the Latin “per procurationem”, which means by the action of another. A simple illustration is when a man has broken his arm and cannot write his own name. In that case he can get someone else to write his name for him; but the one who does the writing should add the letters “p.p.” to show that it is done by proxy, followed by his initials to indicate who he is.

³⁵

21. Aside from commercial cases where per procurationem signature has been authorized by statute, the common law supported the validity of such means of execution. Although Tupper v. Foulkes turned on the question of delivery, rather than of execution, it is a relevant authority. There Williams, J., held that:

The deed having been executed by the son in his own name, thus, - “John William Foulkes for Thomas Foulkes,” - it was brought into a room in which the defendant was, and, the deed being shown to him, he was asked whether his son had authority to execute it for him and whether he adopted the signature, and the defendant answered that his son had authority and that he adopted the deed as his: and there was proof that he subsequently acted as if the deed was a valid deed. This clearly amounted to a second delivery.

³⁶

22. In the third edition of Williams on Title the view is propounded thatthe common law recognition of signatures by one person for another has not been displaced by the Law of Property Act 1925. Of section 73 of that Act, partly quoted above (paragraph 15), the learned author remarks:

Some have argued that this section makes it essential that for the proper execution of a deed the actual party must himself sign his name upon it in every case. This it is submitted is an impossible construction of the section since it would nullify the provisions of s.123 which allows an attorney to execute in his own name. Nor, it is submitted, does this section overrule the decision in the line of cases of which R.

v. Longnor (Inhabitants)

³⁷

is the most often cited. Signature by a stranger in the presence and by the direction of the party still binds that party despite the provisions of s.73 ... Before its enactment sealing was sufficient, but sealing has become such a perfunctory operation, that the legislature has thought it proper that signature must be required. This, however, does not affect the previous law as to what amounts to a signature or a signing by the party.

³⁸

23. Three reported English cases since the passing of the Law’ of Property Act 1925 lend weight to the view put forward by Williams. Goodman v. J. Eban Ltd, ³⁹ a “rubber stamp signature” case before the Queen’s Bench Division, revealed some divergence on the principles involved. Evershed, M. R., thought the essential requirement of signing to be “the affixing in some way, whether by writing with a pen or pencil or by otherwise impressing upon the document, one’s name or ‘signature’ so as personally to authenticate the document”. ⁴⁰ Denning, L.J., in an otherwise dissenting judgment, took a somewhat similar view on this point: “In modem English usage, when a document is required to be ‘signed by’ someone, that means that he must write his name with his own hand upon it ... If a man cannot write his own name, then he can sign’ the document by making his mark, which is usually the sign of a cross: but in that case, he must write the mark himself”. ⁴¹ However, a much broader approach was taken by Romer, L.J., who said:

It is stated in

Stroud’s Judicial Dictionar y

(3rd ed.) under the title “Signed; signature” that “speaking generally a signature is the writing, or otherwise affixing, a person’s name, or a mark to represent his name, by himself

or by his authority

with the intention of authenticating a document as being that of, or as binding

on, the person whose name or mark is so written or afjixed”.

This statement appears to me to be in accord with the authorities.

⁴²

24. Romer, L.J., repeated that interpretation in London County Council v. Agricultural Food Products Ltd ⁴³ the case in which Denning, L.J., further acknowledged the validity of a signature by one person for another in his observations, already quoted (paragraph 20), on per procurationem signatures. Then, in Tennant v. London County Council, ⁴⁴ the enduring force of the common law in this area was clearly recognized by Jenkins, L.J. After a review of all pertinent cases from The Queen v. The Justices of Kent ⁴⁵ he concluded that:

The principle to be deduced from these cases . . . seems to me to be this, that prima facie when there is a provision in a statute requiring a document to be signed with nothing in the subject-matter or context of the legislation to indicate that personal signature is necessary, then the common law rule prevails and a signature duly authorized by a person affixed to a document by another person is the signature of the person giving the authority.

⁴⁶

25. That decision tends to support the opinion offered by the author of an article “Signing by Stamping” in The Law Journal for 1954, arising out of Goodman’s Case (see paragraph 23), that “presumably, now, the only occasions where a signature must be in the handwriting of the signatory are those for which a statute lays down that the signature must be ‘under the hand of’ the person concerned”. ⁴⁷

American and Australian Opinions

26. Without going into the details of the cases there cited, it is noteworthy that The American and English Encyclopaedia of Law, relying on The King v. The Inhabitants of Longnor ⁴³ and decisions of fifteen American State Courts, formed the view that:

Though it is a rule of the common law that authority to execute a sealed instrument cannot be given except by an instrument itself under seal, yet it may now be considered as well settled that power to sign a deed may be given by parol, provided the signature be made in the presence of the grantor and by his direction and authority. In such a case, although the actual physical signing is done by the agent, still the intent of the grantor is the cause behind the act, and it is as much the deed of the grantor as though he actually held the pen.

⁴⁹

27. Such slight Australian authority as exists accords with the state of the law desc-ribedab-ove. In R. v. Moore, a decision of the Full Supreme Court of Victoria, Higinbotham, J., held that “a signature is only a mark, and where a statute merely requires that a document shall be signed, the statute is satisfied by proof of the making of a mark upon the document by or by the authority of the signatory”. ⁵⁰ In Ex parte Dryden, a decision of the Full Supreme Court of New South Wales, it was heldthat certain ballot papers had not been signed by a returning officer under the Municipalities Act, 1867, when it appeared that a rubber stamp facsimile of his signature had been affixed to them by a clerk, without the officer’s authority, and merely out of curiosity to see how the stamp worked”. ⁵¹

28. We note two Australian published comments on the signature of a deed for a party by another person. One was a note “The Execution of Deeds in Victoria” by P. Moerlin Fox, which examined a suggested “Form of Attestation where a Deed is executed by an Amanuensis” contained in Ross’ Conveyancing Precedents. Fox argued that:

One might feet quite happy in following this precedent until it is realized, first, that the statutory authority for signing by an amanuensis is confined to wills and, secondly, that s. 73 of the Property Law Act, 1928 [Vic.] requires the maker of a deed to either sign his name to it or place his mark upon it.

This stat tory requirement of signing was introduced into Victoria . . . being copied from the similar requirement of the English Law of Property Act 1925 . . . Now that the signature (or mark) of the maker is a requirement of statute, can the signature of a mere amanuensis answer this requirement? It is suggested that it cannot, and that in Victoria a deed which, though sealed and delivered by its maker, is signed on his behalf by some other person, even “at his request and in his presence”, has no effect in law, and is a nullity. ⁵²

This view, depending on a statutory provision similar to. the, Law of Property Act 1925 (U.K.), s. 73, accords with that upon which section 1 of the Powers of Attorney Act 1971 (U.K.) proceeds. But it does not apply to the law in New South Wales. ⁵³

29. In the Sixteenth Report of the Law Reform Committee of South Australia “Relating to the Law on Sealing of Documents” an opinion by Sangster, A.J., is published in the following terms:

I have a personal preference for either a signature, or a mark, by the party or else execution by another pursuant to a power of attorney or other adequate authority . . . In my opinion, without much depth of consideration, execution by amanuensis should not be allowed. ⁵⁴

We think however that there is a growing need for the facility of signature on behalf of disabled persons. Modern medicine has managed to sustain life in patients severely restricted in, or disabled from, the use of their limbs. Accidents with modern drugs have produced a significant number of cases of physical deformities and even lack of limbs, precluding those afflicted from being able to write.

30. It seems to us that the common law already provides sufficiently for cases of the type we have mentioned, and sanctions the signing of a deed or other document by one person for another. The matter could be resolved by legislation, but we doubt that such action is called for. In a field like this, legislation may cause harm in some situation not adverted to by the draftsman. We think it better to rely on the common law. We invite comments.

B. Section 159-Execution under Power of Attorney

31. Section 159 of the Conveyancing Act, 1919, provides:

(1) The donee of a power of attorney may execute or do any assurance, instrument, or thing in and with his own name and signature and his own seal (where sealing is required) by the authority of the donor of the power; and every assurance, instrument, and thing so executed and done shall be as effectual in law, to all intents as if it had been executed or done by the donee of the power in the name and with the signature and seal of the donor thereof.

(2) This section applies to. powers of attorney created by instruments executed either before or after the commencement of this Act.

32. With an immaterial exception, this was a transcript of section 46 of the English Conveyancing Act 1881, 44 & 45 Vict. c. 41, as was section 123 of the English Law of Property Act 1925. The last mentioned section was repealed by the Powers of Attorney Act 1971 (U.K.), but its first subsection was there re-enacted in the following terms:

7.(1) The donee of a pow er of attorney may, if he thinks fit-

(a) execute any instrument with his own signature and, where-sealing is required, with his own seal, and

(b) do any other thing in his own name,

by the authority of the donor of the power; and any document executed or thing done in that manner shall be as effective as if executed or done by the donee with the signature and seal, or, as the case may be, in the name, of the donor of the power.

We think that such an arrangement of the section is clearer than the previous form of words and, subject to, any comments which we receive on the point, we may propose its adoption in the Conveyancing Act, 1919, “document” being replaced by “instrument”, for the, sake of consistency, and having regard to the definitions in section 7 (1) of that Act.

33. It was also, thought desirable in the Powers of Attorney Act 1971 (U.K.) to introduce the following subsection:

(2) For the avoidance of doubt it is hereby declared that an instrument to which subsection (3) or (4) of section 74 of the Law of Property Act 1925 applies may be executed either as provided in those subsections or as provided in this section.

Those subsections relate to the execution of instruments by an attorney for a corporation, or by a “corporation aggregate” acting under power of attorney or any statutory or other power. With immaterial variations, those subsections appear in section 51A (3) and (4) of the Conveyancing Act, 1919, (N.S.W.).

34. We do not see that the procedures under sections 159 and 51A (3) and (4) (equivalent to the repealed section 123, and the current section 74 (3) and (4) of the Law of Property Act 1925 (U.K.)) can be anything but alternative procedures. Each section is expressed to be permissive, not mandatory, and section 51A has a subsection (6) (virtually identical to section 74 (6) of -the Law of Property Act 1925 (U.K.)), which, states that “Notwithstanding anything contained in this section, any mode of execution or attestation authorized by law . . . shall (in addition to the modes authorized by this section) be as effectual as if this section had not been passed”. We think that the respective sections are already amply expressed to operate in the alternative and that no further statement is required.

C. Section 160-Effects of Revocation of Powers of Attorney

35. Section 160 of the Conveyancing Act, 1919, is concerned with notice of revocation of powers of attorney and, particularly, with the consequences of an attorney’s having acted under a revoked power without notice of the revocation. The legislative approach of New South Wales to these matters has always been somewhat different from that taken in England. Since the passing of the Poviers of Attorney Act 1971 (U.K.) the divergence is great. Not being fully persuaded which of the two systems is the more effective, we summarize below their respective development and consequences. We invite comments as to any preference which may be felt for either system, and suggestions as to any alternative procedure which may be more satisfactory.

The Law in New South Wales

36. Since the matter was first reduced to legislation in New South Wales, all persons dealing, without notice of revocation, bona fide and for value with an attorney under power, have been protected, by his declaring that he has no notice of the power’s revocation, from the consequences of the power’s having in fact been revoked. The Act 17 Vic. No. 22 , to give greater effect to powers of attorney”, which was passed in 1853, began that procedure. ⁵⁵ Its terms were retained ver batim, but split into two subsections, by the Conveyancing and Law of Property (Supplemental) Act, 1901.

37. Although not surviving in express terms in the Conveyancing Act, 1919, the old provision formed the basis of subsections (1), (2) and (3) of section 160 of that Act. Those subsections read:

(1) Subject to any stipulation to the contrary contained in the instrument creating a power of attorney, such power shall, so far as concerns any act or thing done or suffered thereunder in good faith, operate and continue in force until notice of the death of the donor of the power, or, until notice of other revocation thereof has been received by the donee of the power.

(2) Every act or thing within the Scope of the power done or suffered in good faith by the donee of the power after such death or other revocation as aforesaid, and before notice thereof has been received by him, shall be as effectual in all respects as if such death or other revocation had not happened or been made.

(3) A statutory declaration by the donee of the power in or to the effect of the form set out in the Seventh Schedule hereto, if made at the time such act or thing was done or suffered, or at any time after shall be taken to be conclusive proof of such non-revocation at the time when such act or thing was so done or suffered in favour of all persons dealing with the donee of the power in good faith and for valuable consideration without notice of such death or other revocation.

38. Subsection (4), where material, stipulates that a donee’s statement of having no notice of revocation at the time of making any instrument as attorney may be embodied in the instrument or expressed in a memorandum thereon. Such statement is to have the same force and effect as a statutory declaration under subsection (3).

39. Subsection (3A), added in 1930, prescribes who may make a declaration of non-revocation where the donee of a power is a corporation aggregate. Subsections (4A) and (4B) were added in 1943 in relation to powers given by those engaged on war service “for the duration of the present war between His Majesty and Germany and her allies”: their operation is spent. Subsection (6) is repealed. The remaining subsections are:

(5) In this section revocation includes the determination of the power otherwise than by the expiration of a fixed period of time.

(7) This section ‘applies to powers of attorney executed in or out of New South Wales, and whether executed before or after the commencement of this Act.

The Law in England

40. English legislation on the subject has been differently derived. Its starting point was section 47 of the Conveyancing Act 1881 (44 & 45 Vict. c. 41), re-enacted with modifications as section 124 of the Law of Property Act 1925, of which we need quote only the first two subsections:

(1) Any person making any payment or doing any act, in good faith, in pursuance of a power of attorney, shall not be liable in respect of the payment or act by reason that before the payment or act the donor of the power had died or become subject to disability or bankrupt, or had revoked the power, if the fact of death, disability, bankruptcy, or revocation was not at the time of the payment or act known to the person making or doing the same.

(2) A statutory declaration by an attorney to the effect that he has not received any notice or information of the revocation of such power of attorney by death or otherwise shall, if made immediately before or within three months after any such payment or act as aforesaid, be taken to be conclusive proof of such non-revocation at the time when such payment or act was made or done ...

41. Up to that point substantially similar principles operated in the respective laws of England and of New South Wales, but their legislative expression differed materially. Since the passing of the Powers of Attorney Act 1971 (U.K.), which repealed section 124 of the Law of Property Act 1925, the difference is no longer one of form, it has become one of substance also.

42. Section 5 of the Powers of Attorney Act 1971 (U.K.) contains the English revision. Its full text, which relates also to “irrevocable” powers, appears in Appendix A to this Working Paper, ⁵⁶ but we quote here four of its seven subsections:

(1) A donee of a power of attorney who acts in pursuance of the power at a time when it has been revoked shall not, by reason of the revocation, incur any liability (either to the donor or to any other person) if at that time he did not know that the power had been revoked.

(2) Where a power of attorney has been revoked and a person, without knowledge of the revocation, deals with the donee of the power, the transaction between them shall, in favour of that person, be as valid as if the power had then been in existence.

(4) Where the interest of a purchaser depends on whether a transaction between the donee of a power of attorney and another person was valid by virtue of subsection (2) of this section, it shall be conclusively presumed in favour of the purchaser that that person did not at the material time know of the revocation of the power if-

(a) the transaction between that person and the donee was completed within twelve months of the date on which the power came into operation; or

(b) that person makes a statutory declaration, before or within three months after the completion of the purchase, that he did not at the material time know of the revocation of the power.

(5) For the purposes of this section knowledge of the revocation of a power of attorney includes knowledge of the occurrence of any event (such as the death of the donor) which has the effect of revoking the power.

A Comparative Analysis

43. We proceed to an examination of the reasons which influenced the changes made under the Powers of Attorney Act 1971 (U.K.), and of the amenability of the laws of this State to similar, or other revision.

Notice or Knowledge

44. The Law Commission have, without assigning explicit reasons, used the concept of “knowledge” at the relevant time, rather than the concept of “notice”, of revocation. It was necessary that some consistency be employed as, although the expressions are not synonymous, ⁵⁷ section 124 of the Law of Property Act 1925 had, by subsection (1), used the phrase “known to”, and by subsection (2), the phrase “notice or information of”.

45. In this State it is usual for legislation in such contexts, to refer to notice. We instance sections 36 (9), 43 and 43A of the Real Property Act, 1900, and section 62 of the Trustee Act, 1925. We prefer, ⁵⁸ and adopt, that practice.

Good Faith and Valuable Consideration

46. New South Wales law has always required good faith on the part of the donee as a condition precedent to providing protection in cases where he has acted without notice of the power’s revocation. Section 160 (3) of the Conveyancing Act, 1919, extends protection, by means of the donee’s statutory declaration, to persons dealing with the donee bona fide, for value, and without notice.

47. Section 124 of the Law of Property Act 1925 (U.K.) was concerned with the existence of good faith, but not with valuable consideration. Under the changes made by the Powers of Attorney Act 1971, the English law is, in this connexion, no longer concerned either with good faith or with value.

48. According to the Privy Council in Mutual Provident Land Investing and Building Society Limited v. Macmillan, ⁵⁹ in regard to the New South Wales statute 17 Vic. No. 22, (there wrongly cited as No. 25), “the sole object of the [donee’s] statutory declaration is to protect a bona fide purchaser, without notice, against the fraud of the attorney”. Although section 160 of the Conveyancing Act is differently worded, that statement of the law may still apply to it. It should now be asked whether the section ought properly to be allowed to continue its involvement with questions of good faith and valuable consideration; or whether it should be confined to questions of notice? Other branches of the law regulate the relations and remedies between the parties in the event of fraud or bad faith by any of them. It seems reasonable, therefore, that the whole section should concern itself only with the consequences of the parties’ acting with or without notice of revocation. We favour adopting the English policy to that effect, but we invite comments.

Whom Does the Legislation Protect?

49. Section 5 of the Powers of Attorney Act 1971 (U.K.) makes clear which parties are entitled to statutory protection. By section 5 (1) the donee is protected if he acts under the power without knowing of its revocation. By section 5 (2) a third person, having no knowledge of the power’s revocation, is protected when dealing with the donee, the transaction between them, in that person’s favour, being as valid as if the power had not been revoked. Those subsections overcame ambiguities which the Law Commission disclosed on anzklysing section 124 of the Law of Property Act 1925. ⁶⁰

50. Subsection (1) of that section was clearly intended to protect the donee from suits by the donor, or by the third party with whom he had dealt: but it gave no reciprocal protection,to that third party. “Such a person can hardly be said to have made the payment or done the act ‘in pursuance of a power of attorney’ or ‘under or in pursuance of any power of attorney’. He has acted in reliance on the power, but not in pursuance of it”. ⁶¹

51. It followed that subsection (1) contemplated only the protection of the donee, ‘and subsection (2) only the protection of the third party. But, by reading the subsections together, it was possible “to produce the absurd result that obtaining a statutory declaration of non-revocation affords the third party no protection when it is he [who] has done the act or made the payment to the donee, but does protect him when it is the donee who has done the act or made the payment to him”. ⁶² The Commission quoted other instances in support of the con clusion that the old legislation was obscure and needed re-statement “so as to make it clear that the acts and payments covered by the [sub]sections refer to those by the third party as well as those by the donee and that the subsections protect the donee if he has acted in good faith and the third party if he has acted in good faith”. ⁶³

52. Somewhat similar criticisms may be made of subsections (1) and (2) of section 160 of this State’s Conveyancing Act, 1919. For example, the phrase “any act or thina done or suffered thereunder in good faith” in subsection (1) stands in juxtaposition to the phrase “every act or thing within the scope of the power done or suffered in good faith by the donee” in subsection (2). Such lack of uniformity in drafting invites inquiry whether “thereunder” means something other than “within the scope of”. Similarly, the express reference to the donee in the latter subsection causes uncertainty whether acts or things done or suffered by persons other than the donee are covered by the former subsection.

53. We generally agree with the relevant conclusions of the Law Commission, and we thinkth-at the express protection of donee and third parties in the manner effected by section 5 (1) and (2) of the Powers of Attorney Act 1971 (U.K.) could well be adopted here. Again, we invite comments.

Declaration of Non-Revocation

54. Before the passing of the Powers of Attorney Act 1971 (U.K.), the legislation of England and of New South Wales attributed qualities of “conclusive proof” of the subsistence of a power of attorney to a declaration by its donee of his having no notice of revocation of the power at the time of acting under it (Law of Property Act 1925 (U.K.) section 124 (2), Conveyancing Act, 1919 (N.S.W.), section 160 (3)).

55. By section 5 (4) of the Powers of Attorney Act, the English law has been changed. A conclusive presumption may arise in favour of a purchaser from a party who dealt with the donee, that such party had no notice of revocation. That presumption can be created either by the making, by the party, of a statutory declaration of lack of knowledge of revocation, or by the fact that the party dealing with the donee completed his transaction within twelve months of the operative date of the power.

56. The Law Commission recommended such a change because it found the practice under the Law of Property Act 1925 to be obscure and of doubtful value. Of section 124 (2) of that Act, the Commission remarked:

This subsection, introduced for the first time in 1925, obviously envisages protection of the person dealing with the donee-and no one else. It would be absurd to suggest that the donee can provide conclusive evidence in his own favour by himself making a statutory declaration-though that, on the face of it, is what the subsection says.

⁶⁴

In its Report, the Law Commission expressed another ground of objection to the requirement of a declaration by the donee:

A statutory declaration by the attorney appears, as some of our consultants have pointed out, to be a waste of money in any case. Unless the attorney is fraudulent he will not exercise the power once he knows that it has ended. If he is fraudulent he will not boggle at making a false statutory declaration.

⁶⁵

57. On that basis the Law Commission proposed the new procedure embodied in section 5 (4) of the Powers of Attorney Act. It gave the following reasons:

A third party dealing with the attorney [should] be projected unless he knew at. the time of events bringing the power to an end. There is no need to obtain a statutory declaration from the attorney. On the other hand, the transactions may form a link in the chain of title of the third party. The validity of his title will depend on his absence of knowledge. How is the purchaser from him to be sure of that? The answer . . . is that a purchaser from the third party is protected if the transaction between the attorney and the third party was completed within 12 months of the date of the power of attorney . . . If the transaction was after 12 months, then, as at present, the purchaser will not be fully protected unless he obtains a statutory declaration. But, in place of the somewhat pointless statutory declaration by the attorney, the declaration required is one by the third party confirming that he had no knowledge of the facts which caused the power to end.

⁶⁶

58. ln this State the requirement has always been for positive evidence from the donee of the power. The provisions of section 160 (4), (not found in any comparable English legislation) which permit a statement within, or memorandum endorsed on, the relative instrument, make for a simple and convenient procedure which is well understood. The same subsection renders the making of a false statement a misdemeanour, and probably provides as much protection as is reasonably possible against the ever-present risk of fraud. A party dealing with the donee is just as liable, if fraudulent, to make a false (and, hence, “somewhat pointless”) declaration or statement, as the donee would be if fraudulent.

59. We are not convinced tha[ there is any need !to change, or any advantage in changing, the Conveyancing Act system as it now applies. We think that a general presumption of non-revocation in favour of dealings made within twelve months of the coming into operation of a power is arbitrary. We, doubt that a declaration by the party dealing with the donee really has better probative value than a declaration or statement by the donee himself.

60. Our inclination is to prefer, for the purposes of this State, a continuance of the provisions of subsections (3), (3A) and (4) of section 160 of the Conveyancing Act, 1919, but, again, we invite comments as to the system best adapted to the needs of New South Wales.

D. Sections 161, 162 and 162A-Irrevocable Powers of Attorney

61. Sections 161 and 162 of the Conveyancing Act, 1919, make the following provisions about “irrevocable” powers of attorney:

161. (1) Where a power of attorney given for valuable consideration (whether executed in or out of New South Wales) is in the instrument creating the power expressed to be irrevocable, then, in favour of a purchaser,-

(a) the power shall not be revoked at any time, either by anything done by the donor of the power without the concurrence of the donee, or by the death, mental disability or bankruptcy of the donor; and

(b) any act done at any time by the donee of the power in pursuance of the power shall be as valid as if anything done by the donor without the concurrence of the donee, or the death, mental disability or bankruptcy of the donor, had not’been done or had not happened; and

(c) neither the donee of the power nor the purchaser shall at any time be prejudicially affected by notice of anything done by the donor without the concurrence of the donee, or of the death, mental disability or bankruptcy of the donor.

(2) This section applies only to powers of attorney created by instruments executed after the commencement of this Act.

162. (1) Where a power of attorney (whether executed in or out of New South Wales, and whether given for valuable consideration or not) is in the instrument creating the power expressed to be irrevocable for a fixed time therein specified, not exceeding two years from the date of the instrument, then, in favour of a purchaser,-

(a) the power shall not be revoked for and during that fixed time, either by anything done by the donor of the power without the concurrence of the donee, or by the death, mental disability or bankruptcy of the donor; and

(b) any act done within that fixed time by the donee of the power in pursuance of the power shall be as valid as if anything done by the donor without the concurrence of the donee, or the death, mental disability or bankruptcy of the donor had not been done or had not happened; and

(c) neither the donee of the power nor the purchaser shall at any time be prejudicially affected by notice, either during or after that fixed time, of anything done by the donor during that fixed time without the concurrence of the donee, or of the death, mental disability or bankruptcy of the donor within that fixed time.

(2) This section applies to powers of attorney created by instruments executed before or after the commencement of this Act.

62. These sections correspond almost exactly to sections 126 and 127 (since repealed) of the Law of Property Act 1925 (U.K.), and all had the common ancestry of sections 8 and 9 of the Conveyancing Act 1882 (U.K.), 45 & 46 Vict. c. 39. The only differences of any consequence are that section 162 refers to a fixed time not exceeding two years, section 127 to a fixed time not exceeding one year, and that the Conveyancino, Act, 1919, was amended in 1930 to include, inter alia, section 162A, to which we refer later.

63. It follows that a great deal of what has been said by the English Law Commission in criticism of sections 126 and 127 has direct relevance to sections 161 and 162 of the Conveyancing Act, 1919. Accordingly we, reproduce, in appendix B, that Commission’s detailed analysis of the matter in its Working Paper, which was confirmed in its Report. We note that, in pursuance of that analysis, repeal of the English sections 126 and 127 was proposed by the Law Commission and implemented under the Powers of Attorney Act 1971 (U.K.).

64. Each of the sections operates “in f avour of a purchaser” and “purchaser” is defined by section 7 (1) of the Conveyancing Act, 1919, as meaning “a purchaser for valuable consideration, and includes a lessee, mortgagee, or other person who for valuable consideration acquires an interest in property”. The Law of Property Act 1925 (U.K.) contains an almost identical definition, though “O’ood faith” is required as well as “valuable consideration” under its provisions.

65. An unsatisfactory qualification to the words “in favour of a purchaser” appears in subsection (1) (c) of each section, which begins neither the donee of the power nor the purchaser Professor Powell observes that “the last provision does not make very much sense. If it was intended to protect the purchaser, it is redundant because he is already adequately protected by the earlier provisions of the sections. If it was intended to protect a donee of the power dealing with a purchaser, then it is absurd to say that this protection is in favour of the purchaser”. ⁶⁷

66. The English Law Commission, after a detailed review of the problem, ⁶⁸ concluded that, “apart from the obvious absurdity of any other conclusion, -the wording of the sections makes it reasonably clear that ‘in favour of a purchaser’ governs the. whole of the sections notwithstanding the wording of paragraph (iii) [(c) N.S.W.] of each. Accordingly the words ‘then in favour of a purchaser . . . (iii) neither the donee of the power nor the purchaser can only be made to yield sense if they are treated as reading ‘then in favour of a purchaser (including the donee of the power when he is a purchaser) . . . (iii) neither the donee of the power nor other purchaser . . . .” ⁶⁹

67. If section 161 of the Convevancing Act, 1919, is otherwise to be retained, we consider that paragraph (c) of subsection (1) should be deleted from it, but we invite contrary views.

Valuable Consideration and Related Matters Under Section 161

68. In paragraph 35 of the Law Commission’s Working Paper (see our appendix B) some reasons are given for restricting irrevocable powers to those given for valuable consideration and by way of security. That Commission there stated -that it knew of “no case in which anyone has given valuable consideration for a power of attorney where the power was not by way of security” and that it was “wholly wrong that a power of attorney should be irrevocable unless it is given by way of security”. ⁷⁰ While that may be a fair summary of the position under the old common law, we think with respect, that cases decided since the passing of the Conveyancing Act 1892 (U.K.) justify the taking of a different view.

69. Cases declaratory of the common law on the point can be traced over at least a century before the passing of the Conveyancing Act 1882 (U.K.). They provide support for the notion that powers, in order to be irrevocable, must be given by way of security. The whole concept of irrevocability was, however, at first regarded with suspicion. Thus in Ex parte Mure ⁷¹ (1788), wherein a “warrant of attorney” was given as collateral security on a bond, Lord Chancellor Thurlow considered that “in the assignment there is a covenant for further assurance, and ... a letter of attorney irrevocable: to be sure a letter of attorney cannot strictly speaking be irrevocable, for if a new attorney be substituted, this will defeat the former”. ⁷²

70. Within a decade that pronouncement was varied, as regards powers given by way of security. In Walsh v. Whitcomb ⁷³ (1797) it was argued, alongthe lines of Ex parte Mure, that a power of attorney was, from its nature, revocable, and that the execution of a subsequent power would revoke a former power. Lord Kenyon rejected the argument:

There is a difference in cases of powers of attorney: in general they are revocable from their nature; but there are these exceptions. Where a power ‘of attorney is part of a security for money, there it is not revocable: where a power of attorney was made to levy fine, as part of a security, it was held not to be revocable; the principle is applicable to every case where a power of attorney is necessary to effectuate any security; such is not revocable.

⁷⁴

71. In 1802 Lord Eldon, in Bromley v. Holland, ⁷⁵ recoornized the irrevocability of a power of attorney executed for valuable consideration. We quote his principal pronouncement, to which there were added qualifying remarks suggesting that he looked as well to the existence of a security:

A power of attorney . . . is a revocable instrument; and in ordinary cases would not found the jurisdiction of this Court. But where it is executed for valuable consideration, this Court would not permit it to be revoked.

⁷⁶

72. In 1815 the new concept of a power “coupled with an interest” received judicial attention. Lord Ellenborough discussed it in two cases, Watson v. King ⁷⁷ and Alley v. Hotson, ⁷⁸ where powers had been given by way of security. In Alley’s Case he concluded that a power coupled with an interest was not revoked by the donee’s subsequent bankruptcy. But in Watson’s Caye he had held that “a power coupled with an interest cannot be revoked by the person granting it; but it is necessarily revoked by his death. How can a valid act be done in the name of a dead man?” ⁷⁹ The phrase “coupled with an interest” continued to be referred to in cases affecting powers of attorney and other vicarious authorities, the rule being that such powers and authorities could not be revoked.” ⁸⁰

73. The chief exposition of the common law was undoubtedly that of Wilde, C.J., in Smart v. Sandars.” ⁸¹ After quoting from Walsh v. Whitcomb (see paragraph 70) and the cases derived from it, he continued:

The result appears to be, that where an agreement is entered into on a. sufficient consideration, whereby an authority is given for the purpose of securing some benefit to the donee of the authority, such an authority is irrevocable. This is what is usually meant by an authority coupled with an interest, and which is commonly said to be irrevocable. But we think this doctrine applies only to cases where the authority is given for the purpose of being a security, or. . . . as a part of the security.

⁸²

74. In the 1869 edition of Story on Agency it was thought prudent to cast the net of irrevocability widely enough to catch all elements of value, security and “interest” which had been variously used in the authorities:

Where an authority or power is coupled with an interest, or where it is given for a valuable consideration, or where it is a part of a security, there, unless there is an express stipulation, that it shall be revocable, it is, from its own nature and character, in contemplation of law, irrevocable, whether it is expressed to be so upon the face of the instrument, conferring the authority, or not.

⁸³

75. It seems significant that section 8 of the Conveyancing Act 1882 (U.K.), in its introductory words, - “if a power of attorney, given for valuable consideration, is in the instrument creating the power expressed to be irrevocable . . .” - departed markedly from the formula of the common law. That departure was continued verbatim in the Law of Property Act 1925 (U.K.). It cannot reasonably be suggested that the drafting was inadvertent. Section 8 of the 1882 Act was one of several items omitted from the Conveyancing Act 1881 (44 & 45 Vict. c. 41) “owing to pressure of business, until they could be thoroughly considered”. They were so considered by a “strong Select Committee” of the House of Commons. ⁸⁴ The policy of the Acts of 1881 and of 1882 was reformative and innovatory. As pointed out by the Law Commission, the 1882 Act could not be said to have “merely codified the common law.” ⁸⁵ Its new approach is demonstrable, for example, in its reversal of the “rule”, derived from Watson v. King (see paragraph 72) that an “irrevocable”, power stood revoked by the donor’s death. ⁸⁶

76. There are, accordingly, good grounds for taking the introductory words of section 8 of the 1882 Act, especially the words “for valuable consideration”, to have been added with a purpose. That purpose went beyond stating the common law in its widest terms, to enlarging its scope. Thus, the section covers powers of attorney given for value and expressed to be irrevocable, in all cases, of which a power given by way of security is merely the most common instance. But, in contrast to the law propounded in Smart v. Sandars, it is no longer the only instance. ⁸⁷ In the following paragraphs we comment ,on the development of the common law after that decision.

77. In Frith v. Frith, ⁸⁸ decided in 1906, the Privy Council made it clear that it would took beyond the question of security alone, to the question of benefit conferred on the donee of the power. It distinguished the facts before it from such decisions as In re Hannan’s v Empress Gold Mining and Development Company: Carmichael’s Case. ⁸⁹ In that case, where authorities were given as part of a share underwriting contract, in the Board’s summary, “the donor of the power, for valuable consideration, conferred upon the donee authority to do a particular thing in which the latter had an interest, namely, to apply for the shares of the company which the donee was promoting for the purpose of purchasing his own property from him, and the donor sought to revoke that authority before the benefit was reaped”. ⁹⁰ Frith’s Case itself was determined irrespective of the question of security:

The essential distinction between this case and those cited is this, that in each of the latter power and authority were given to a particular individual [the donee of the power] to do a particular thing, the doing of which conferred a benefit upon him, the authority ceasing when the benefit was reaped, while in this case.... nothing of that kind was ever provided for or contemplated.

⁹¹

78. There are some Australian decisions which more clearly exemplify powers of attorney being given for valuable consideration, but not by way of security. They have arisen under liquor licensing laws. In Slatter v. Railway Commissioners (N.S.W.) ⁹² the appellant was the lessee of premises with which was enjoyed a wine licence the property of the respondents, under a lease containing a term appointing the lessors attorneys for the lessee to take certain action “for the better preservation of the licence”. The High Court held that to be “an irrevocable authority for the advantage of the persons authorized. Any act on the part of the appellant which would destroy the authority or impair its operation must be a breach of the conditions necessarily implied in granting an irrevocable authority exercisable exclusively for the benefit of the persons authorized”. ⁹³ Identical conclusions, on very similar facts, were reached by the Supreme Court of New South Wales in Griffin v. Clark, ⁹⁴ and by the Victorian Supreme Court in R. v. Victorian Licensing Court. ⁹⁵

79. We believe that, however unusual they may be in practice, it is possible to visualize other classes of power of attorney given for valuable consideration, but not by way of security. Such classes would not fall within the ambit of section 5 (3) of the Powers of Attorney Act 1971 (U.K.). Were we to recommend adopting that section in this State, we believe that the result would be to narrow the operation of section 161 of the Conveyancing Act, 1919. It is not apparent that the community would gain anything by such a change: rather, there would be a risk that prejudice and disadvantage might be created in some cases.

80. We are inclined to agree that the words “power of attorney given for valuable consideration” are not, in the context of the section as clear as could be wished. Redrafting of the section might be desirable, but we are taking no steps to that end until we know whether our interpretation of the law is favoured, or whether there is any desire in this State to follow the limited terms of section 5 (3) of the Powers of Attorney Act 1971 (U.K.), or to adopt any other course.

Irrevocable Powers Under Section 162

81. There is little authority on the scope of section 162 of the Conveyancing Act, 1919. Its counterpart used to be section 127 (now repealed) of the Law of Property Act 1925 (U.K.), both being derived from section 9 of the Conveyancing Act 1882. The difference between section 162 and section 161 is that the former relates to powers, whether or not given for value, having a limited term of irrevocability up to two years (one year in the repealed United Kingdom legislation). According to Halsbury’s Statutes of England “this section covers the case, for example, of a power of attorney not given for value by a person going abroad”. ⁹⁶ Tingley v. Muller ⁹⁷ demonstrates a similar use of, the section in the case of a power given for value.

82. However, the Law Commission’s Working Paper shows that section 127 was used in England as a conveyancing short-cut to raise a presumption of the subsistence of a power within its declared period of “irrevocability”. “At present”, it points out, “solicitors have the embarrassing task of explaining to their clients that though powers of attorney that they have drafted are expressed to be irrevocable this does not mean that in fact they are irrevocable, that actually they can be revoked at any time, and that the so-called irrevocability is merely a convenient device”. ⁹⁸ The Law Commission reiterated that view in .its Report, saying that:

To facilitate conveyancing by requiring powers, which are in fact revocable at any time, to be expressed as irrevocable for a period, is a clumsy Action.

⁹⁹

83. We doubt that section 162 of the Conveyancing Act, 1919, of this State has ever been used as a conveyancing device or fiction. We think that it has been accepted literally, to mean that a person may give a power of attorney with or without consideration for a period of up to two years and, in favour of a purchaser, render it irrevocable by expressing it to be so. It is difficult, however, to imagine cases where a donor would, without consideration, purport irrevocably to appoint an attorney under power. Perhaps there could be instances where a spendthrift donor might seek to protect himself from his own mismanagement; but the section would not prevent him from revoking the power, which would be irrevocable only “in favour of a purchaser”. Indeed, he could still handle his own affairs. ¹⁰⁰ We think that the section has never had any practical application in this State and, subject to any comments which -we may receive, our inclination is to recommend its repeal.

Section 162A

84. Under the Conveyancing (Amendment) Act, 1930, this new -section was added to the Conveyancing Act, 1919, as part of a clarifying process. The section provides that:

Any act done, whether before or after the commencement of the Conveyancing (Amendment) Act, 1930, in professed exercise of a power mentioned in either section one hundred and sixty-one or section one hundred and sixty-two of this Act, and within the time, if any, fixed by the power, shall, in favour of a purchaser without notice of the revocation of the power with the concurrence of the donee thereof, be as valid as if the power had not been so revoked.

These words obviously do not relate to acts done by the donor or purchaser for they could not be done “in professed exercise” of the power. The section protects a purchaser without notice when he deals with a donee who (acting, it may be assumed, dishonestly or mistakenly), has already concurred in revoking his own authority.

85. We think that the section could stand without amendment, other than may flow from repealing section 162, but we should be glad to be advised of any practical difficulties which it may have caused.

E. Section 163-Registration of Powers of Attorney

86. In New South Wales, before 1817, a casual system of deeds registration had been conducted in the office of the Judge-Advocate. ¹⁰¹ It left many openings for fraud, which persisted despite an attempt by Governor Macquarie to regularize the matter by proclamation on 18th January, 1817. ¹⁰²

87. One of the earliest local statutes - 6 Geo. IV No. 22 of 1825 - was directed to making deeds registration more efficacious, for “nothing tends more to increase the value of real property -than the prevention of secret and fraudulent conveyances”. The Act provided for the voluntary registration in the Supreme Court Office of “all deeds conveyances and other instruments in writing . . . of and relating to or in any manner affecting any lands tenements or other hereditaments”. Priority was accorded to registered deeds.

88. A separate registry office under the control of a Registrar General was opened in 1844 by authority of 7 Vic. No. 16 (1843). Powers of attorney in relation to land could be, and in practice frequently were, registered under its provisions.

89. The consolidating Registration of Deeds Act, 1897, provided that “all instruments affecting any estate in land in New South Wales” might be registered in the office of the Registrar General. Registration was, by section 12, to guarantee priority. Under this provision powers of attorney were, in practice, “constantly registered”. ¹⁰³

90. Meanwhile, the Torrens system of land title registration had been introduced by the Real Property Act, 1862, (26 Vic. No. 9). It recognized a special form of power of attorney for the executing of documents and other purposes under the Act. ¹⁰⁴ The form was not expressed to operate as a deed and did not require registration, but, by section 69, it was,to be “filed” in the office for notation of its particulars in the register book, a process which was, in practice, “manifestly cumbersome”. ¹⁰⁵ Somewhat more elaborate provision was made by Part X and schedules of the consolidated Real Property Act, 1900. The requirement still was for the appropriate power to be “filed”, not registered.

91. With the coming into effect of the Conveyancing Act in 1920, the operation of its section 163, the position changed. Subsection (2) of that section provided that no conveyance or other deed (not being a lease or an agreement for a lease for a term not exceeding three years) and no memorandum by that Act operating as a deed executed by the donee of the power in pursuance of that power should be of any “force or validity whatsoever” unless the instrument creating the power had been registered. Thus, powers to give effect to conveyancing transactions under the old system of title virtually had to be registered, because of that subsection.

92. For convenient reference we set out here the full text of section 163 of the Conveyancing Act:

163. (1) Any instrument (whether executed before or after the commencement of this Act) creating a power of attorney for any purpose whatever may be registered.

(2) Where such instrument is executed after the commencement of this Act no conveyance or other deed not being a lease or agreement for a lease for a term not exceeding three years, and no memorandum by this Act operating as a deed executed by the donee of the power in pursuance of the power shall be of any force or validity whatsoever unless the instrument creating the power ha’s been registered:

Provided that on registration of the instrument creating the power every such conveyance deed or memorandum executed by the donee of the power shall take effect as if the instrument creating the power had been registered before the execution of the conveyance deed or memorandum.

(3) Any instrument revoking any such power may also be registered.

(4) Every such conveyance and other deed and memorandum as is mentioned in subsection two executed by the donee of a power of attorney before the commencement of the Conveyancing (Amendment) Act, 1930, shall have the same effect as if that Act had been in operation at the time of the execution.

(5) Nothing in the last preceding subsection shall affect the rights of any party to any proceeding at law or in equity concluded before or pending at the commencement of the Conveyancing (Amendment) Act, 1930.

93. As regards land under the Real Property Act, 1900, the position in 1920 was less clear .The then current section 36 (4) of that Act provided:

Upon registration, every instrument drawn in any of the several forms in the Schedules hereto, or in any form which, for the same purpose may be authorized in conformity with the provisions of this Act shall, for the purposes of this Act, be deemed to be embodied in the register-book, as part and parcel thereof, and such instrument when so constructively embodied and stamped with the seal of the Registrar-General, shall have the effect of a deed duly executed by the parties signing the same.

It seemed to follow that, at the instant before registration, the statutory instrument was not a deed and, if made pursuant to a power of attorney, that power did not then require to be registered under section 163 (2) of the Conveyancing Act. However, at the moment of registration of the statutory instrument under the Real Property Act it became a deed for the purposes of the Conveyancing Act under section 7 (1) of which “ ‘Deed’ in relation to, land under the provisions of the Real Property Act, 1900, includes a dealing [as defined] having the effect of a deed under that Act”. Thus, at the moment of registration under the Real Property Act, the dealing would have the effect of a deed and, if made pursuant to. a power of attorney, would cease to have any force: or validity whatsoever if that power had not itself been registered by virtue of the Conveyancing Act.

94. The existence of that anomaly probably helped to stimulate a variation of the law under the Real Property (Amendment) Act, 1921, which, by section 6, repealed that portion of the principal statute requiring powers of attorney to, be filed. Instead, any instrument executed by the donee of a power of attorney was not !to be registered unless the relative power had itself been registered under the Conveyancing Act, 1919. Part X of the Real Property Act was repealed by the Real Property (Amendment) Act, 1970, but the requirement mentioned in the preceding sentence was substantially retained by section 36 (2):

A dealing executed under a power of attorney shall not be registered under this Act unless the power of attorney has been registered as provided for by the Convevancing Act, 1919.

Suitability of Present Practice

95. As to land under Old System title, the mandatory registration of powers of attorney is anomalous. No other deed is required to be registered in order to be efficacious: failure to register leads only to such disadvantages as the risk of lost priority. The only reason for changing the practice, adduced by Mr Justice Harvey in his report as Royal Commissioner on the Conveyancing Bill in 1917, was that registration of powers of attorney “should be of very great public advantage”. ¹⁰⁶

96. It is not apparent to us -that such public advantage has followed in practice. Ensuring a permanent record of any link in a chain of title is no doubt desirable, but hardly serves a public purpose. It would be possible, under the present law, for all links in the chain of title, excepting those being powers of attorney, to stand unregistered. That is an illogical and inconsistent position.

97. We propose the repeal of subsection (2) of section 163 of the Conveyancing Act, 1919, and also of subsections (4) and (5) of that section, which are derived from subsection (2).

98. Land under the provisions of the Real Property Act, 1900, has to be considered in the context of the practice of the Registrar-General’s Department. If, in the case of that land, registration were discontinued, the Registrar-General may have to adopt a different practice which, conceivably, might be less economical and less expeditious.

99. We have had regard to possible alternatives. One which may warrant further examination is whether the Registrar-General need retain evidence of the contents of powers lodged to support the registration of dealings. At present, as, we understand the Registrar-General’s view, such evidence is necessary to protect him should disputes arise concerning the authority o.f an attorney under power to have executed an instrument accepted for registration. If the Registrar-General were indemnified by statute against the consequences of registering a dealing which exceeded the scope of a covering power of attorney, his need to retain the text of such powers would doubtless disappear.

100. We seek here to open the way to the expression of further opinions about the matter. We do not contemplate taking any action on it without reference to the Registrar-General: and it may be that any changes which may be found practicable in this regard should more appropriately be initiated by him.

101. While we think that -the registration of powers of attorney should not be mandatory, we do not suggest that optional registration should be prevented. The provision of a State registry places New South Wales in a different position from that which prevailed in England before the passing of the Powers of Attorney Act 1971. Here the registry is a public utility the benefits of which should not be denied to parties wishing to register any appropriate instruments.

Photographic Copies of Powers of Attorney

102. Because of its proposal that the filing of powers of attorney at the Central Office be abolished in England, ¹⁰⁷ the Law Commission found it necessary to put forward an alternative procedure for the use of copies as evidence of original powers.

103. Section 3 of the Powers of Attorney Act 197L (U.K.) was accordingly enacted. It provides, so far as is relevant for our purposes, as follows:

3. - (1) The contents of an instrument creating a power of attorney may be proved by means of a copy which-

(a) is a reproduction of the original made with a photographic or other device for reproducing documents in facsimile; and

(b) contains the following certificate or certificates signed by the donor of the power or by a solicitor or stockbroker, that is to say-

(i) a certificate at the end to the effect that the copy is a true and complete copy of the original; and

(ii) if the original consists of two or more pages, a certificate at the end of each page of the copy to the effect that it is a true and complete copy of the corresponding page of the original.

(2) Where a copy of an instrument creating a power of attorney has been made which complies with subsection (1) of this section, the contents of the instrument may also be proved by means of a copy of that copy if the further copy itself complies with that subsection, taking references in it to the original as references to the copy from which the further copy is made.

(3) * * * * *

(4) This section is without prejudice to section 4 of the Evidence and Powers of Attorney Act 1940 (proof of deposited instruments by office copy) and to any other method of proof authorized by law.

(5) * * * * *

104. Although the same necessity for such provisions does not exist here as existed in England, we believe that many transactions could more conveniently be effected under powers of attorney by using a photographic copy of the relative power certified in the manner prescribed by the Powers of Attorney Act 1971 (U.K.).

105. In due course, as part of our reference to review the law of evidence, we will be examining procedures for authenticating documents generally. Meanwhile, powers of attorney could well be regarded as a special case, and independent provision made for them.

106. We drink that subsections (1) and (2) of section 3 of the Powers of Attorney Act 1971 (U.K.) should be adopted in this State for the purposes of most transactions under powers of attorney. Provisions touching section 28 of the Evidence Act, 1898, would have to be made along the lines of section 3 (4) of the Powers of Attorney Act 1971 (U.K.) and other provisions may have to be made covering special requirements. of pul3lic authorities,such as the Land Titles Office. The use of photographic copies should effect -a saving of time and expense in carrying out transactions under powers of attorney.

107. In amplification of that view we quote two passages from the Law Commission’s Report which, mutatis mutandis, could well apply to registration in New South Wales: Expense: “Filing can still add considerably to the expense of appointing an attorney. It requires the preparation and execution of a statutory declaration, and personal attendance at the Central Office both to ffle the documents and to obtain office copies. If, by an oversight (and this occurs not infrequently), the power is not filed in cases where this is compulsory, considerable trouble and expense can be incurred in putting the matter right. Retention of filing can therefore be justified only if the practical advantages are commensurate. Our consultations have persuaded us that they are not commensurate”; ¹⁰⁸ and, No Protection: “It would appear that the mere fact of filing does not afford any protection against, for example, a breach of trust, or other abuse such as forgery, for the officials of the Central Office merely ensure that the power is properly executed on the face of it ... The only advantage of filing is that it ensures, first, that the document will not be lost, and, secondly, that office copies of the power will always be available.” ¹⁰⁹

108. We invite the views of interested persons on the acceptability in this State of photographic copies as evidence of powers of attorney.

FOOTNOTES

1. Report, 13, para. 28.

2. See generally “What Does ‘Signing’ Mean?” (1953) 117 Justice of the Peace and Local Government Review, 559.

3. Ellis v. Smith (1754) 1 Ves. Jun. II at 12; 30 E.R. 205. Cf. a pronouncement of Denning, L. J., in 1954, that: “the virtue of a signature lies in the fact that no two persons write exactly alike, and so it carries on the face of it a guarantee that the person who signs has given his personal attention to the document”, Goodman v. J. Eban Ltd [1954] 1 Q.B. 550 at 561.

4. Hubert v. Moreau (1826) 2 Car. & P. 528 at 530; 172 E.R. 240.

5. (1844) 5 Q.B. 574; 114 E.R. 1366.

6. Baker v. Dening (1838) 8 Ad. & E. 94; 112 E.R. 771.

7. (1855) 16 C.B. 517 at 535; 139 E.R. 861.

8. 11 Geo. IV & 1 Will. IV c. 23.

9. (1867) L.R. 3 C.P. 28 at 31.

10. Commentaries, 4th ed. (1876), Vol. 11, 259.

11. 2nd ed. (1827), s.v. “to sign”: emphasis added.

12. 7th ed. (1820), 54.

13. 1bid., 60.

14. 2 Salk. 462; 91 E.R. 399.

15. 2 Ld. Raym. 920 at 921; 92 E.R. 114.

16. (1682) 3 Lev. 1; 83 E.R. 545.

17. 1 Ves. Jun. 11; 30 E.R. 205.

18. 17 Ves. Jun. 454 at 459; 34 E.R. 176.

19. Loc. cit., note 13.

20. Op. cit., note 10, 258.

21. (1820) 6 Madd. 166 at 167; 56 E.R. 1055.

22. 4 Ex. 631 at 6367; 154 E.R. 1367.

23. 2nd ed. (1928), 7.

24. Royal Commission on the Conveyancing and Law of Property Bill, Report, (1918), 4.

25. 3rd ed. (1966), 613-614.

26. 64 B. & Ad. 647; 110 E.R. 599. Earlier cases operating on the principle of estoppel were Ball v. Dunsterville (1791) 4 T.R. 313; 1 10 E.R. 1038; and Elliot v. Daviy (1800) 2 Bos. & Pul. 338; 126 E.R. 1314.

27. 4 B. & Ad. 647, at 649.

28. (1788) 2 Cox 84; 30 E.R. 39.

29. (1849) 8 C.B. 627 at 630-631; 137 E.R. 653.

30. (1873) L.R. 8 Q.B. 305.

31. At 3 07.

32. Cf. Tennant v. London County Council (1957) 121 J.P. 428 at 442.

33. (1873) L.R. 8 Q.B. 305 at 307.

34. (1867) L.R. 3 C.P. 28 at 32.

35. [1955] 2 Q.B. 218 at 222. A brief commentary on the decision appears in (195,5) 71 L.Q.R. 317. As to the concluding sentence of the quotation, it is pointed out concerning it in Williams on Title, 3rd ed. (1966), 614, that: “In the case of deeds it is the more usual course to set out all the facts of the signing in the attestation clause though some authorities prefer that the agent should sign the party’s name and add ‘by’ the agent”. See also the American decision of Gardner v. Gardner quoted in note 49 below.

36. (1861) 9 C.B. (N.S.) 797 at 809; 142 E.R. 314.

37. Cited above, note 26.

38. At 613, footnote (c).

39. [1954] 1 Q.B. 550.

40. At 557.

41. At 561.

42. At 563, emphasis added.

43. [1955] 2 Q.B. 218 at 223-4.

44. (1957) 121 J.P. 428.

45. Cited above, note 30.

46. (1957) 121 J.P. 428 at 438.

47. Vol. 104, 3 87. An Australian example of such a statutory requirement is to be found in section 56 (1) of the Commonwealth Inscribed Stock Act 1911.

48. Cited above, note 26.

49. 2nd ed. (1898), Vol. 9, 144. By way of illustration of the American decisions we refer to the judgment of Shaw, C.J., in Gardner v. Gardner (1850) 5 Cush. (Mass.) 483:

The name written by another hand, in the presence of the grantor (in this case a woman) is her act. The disposing capacity, the act of mind, which are’the essential and efficient ingredients of the deed, are hers, and she merely uses the hand of another, through incapacity or weakness, instead of her own, to do the physical act of making a written sign . . . To hold otherwise would be to decide, that a person having a clear mind and full capacity, but through physical disability incapable of making a mark, could never make a conveyance or execute a deed: for the same incapacity to sign and seal the principal deed would prevent him from executing the letter of attorney under seal.

50. (1884) 10 V.L.R. (L), 322 at 324; emphasis added.

51. (1893) 9 W.N. (N.S.W.) 114 at 115.

52. (1951) 24 A.L.J. 520.

53. Conveyancing Act, 1919, s. 38.

54. (1971), 8. 55. The Act recited that “difficulties frequently arise as to titles to land and other property by reason of conveyances or other instruments and acts affecting the same having been executed and done under Powers of Attorney from absent persons of whom it cannot be known whether they are alive or whether they may not have revoked such powers of attorney at the date of the execution of such conveyances or other instruments”. It then, in effect, provided that the donor of a power of attorney might stipulate therein that it should continue in force until notice of his death or of other revocation of the power were received by the donee. A “solemn declaration” by the donee “if made immediately before or after executing any such conveyance or other instrument as aforesaid or doing performing or submitting to any such act as aforesaid” was to be conclusive proof of non-revocation of the power, in favour of any person dealing with the donee, bona fide, for valuable consideration, and without direct notice of any revocation.

56. See paras 61 to 85.

57. For example, in various contexts, Burgh v Legge (1839) 5 M. & W. 418 (151 E.R. 177); Mildred & Co. v. Maspons (1883) :9 App. Cas. 874; Cresta Holdings Ltd v. Karlin [1959] 3 All E.R. 656.

58. Our preference is based upon such considerations as the following: “notice” provides a more positive and certain criterion than does “knowledge”-see per Evershed, M.R., Goodyear Tyre & Riibber Co. (Great Britain), Ltd v. Lancashire Batteries, Ltd [1958] 3 All E.R. 7 at 12; “notice” is not as fortuitous a process as “knowledge” sometimes is, and it may be easier of proof; “knowledge”, especially when associated with an element of time, as m section 5 of the Powers of Attorney Act 1971 (U.K.), may perhaps be extinguished by absentmindedness, inadvertence or forgetfulness.

59. (1889) 14 App. Cas. 596 at 600.

60. Working Paper, 27-34.

61. Ibid., 29, para. 44.

62. Ibid., 30, para. 46.

63. Working Paper 33, para. 50. However, the element of good faith was not pursued in the bill for the Powers of Attorney Act 1971.

64. Working Paper, 29, para. 45.

65. Report, 18, para. 34 (f).

66. Report, 18, para. 35.

67. The Law of Agency, 2nd ed., (1961), 397.

68. Working Paper, 17-19, paras 27-30: see appendix B to this Working Paper.

69. Ibid., 20-21, para. 30.

70. Working Paper, 22, para. 35 (2) & (3).

71. (1788) 2 Cox 63; 30 E.R. 30.

72. At 72.

73. (1797) 2 Esp. 565; 170 E.R. 456.

74. At 566.

75. (1802) 7 Ves. Jun. 3; 32 E.R. 2.

76.At 28; cf. Bennett v. Cooper (1846) 9 Beav. 252; 50 E.R. 340.

77. (1815) 4 Camp. 272; 171 E.R. 87.

78. (1815) 4 Camp. 325; 171 E.R. 104.

79. At 274; see note 77. See also on that point Spooner v. Sandilands (1842) I Y. & C.C.C. 390; 62 E.R. 939; but see the reporter’s discussion of it in Smart v. Sandars (1848) 5 C.B. 895; 136 E.R. 1132 at 1140-1141. See also, for equitable restrictions on the common law rule, Mackenzie, The Law or Powers of Attorney, (1913), 131.

80. For instance, Gaussen v. Morton (1830) 10 B. & C. 731; 109 E.R. 622; Raleigh v. Atkinson (1840) 6 M. & W. 670; 15,1 E.R. 581.

81. (1848) 5 C.B. 895; 136 E.R. 1132.

82. At 917-918. And see Clerk v. Laurie (1857) 2 H. & N. 199; 157 E.R. 83.

83. 7th ed. (1869), 605-606, para. 477.

84. Parliamentary Debates (Commons), 3rd Series, 25 May, 1882, 1692.

85. Working Paper, 16, para. 25.

86. See the authorities referred to in note 79 above.

87. Mackenzie, op, cit., 127, is content to say that “the section is sometimes useful in permitting a security, in the form of a power of attorney, to be given”.

88. [1906] A.C. 254.

89. [1896] 2 Ch. 643.

90. [1906] A.C. 254 at 260.

91. Ibid.

92. (1931) 45 C.L.R. 68.

93. At 78.

94. (1940) 40 S.R. (N.S.W.) 409.

95. [1964] V.R. 48. 96. 3rd ed., vol. 27, 538.

97. [1917] 2 Ch. 144.

98. 22-23, para. 36.

99. 17, para. 34 (a).

100. James v. Nesbitt (1954) 28 A.L.J. 482 at 484: “Section 161 gives an irrevocable authority to the donee of the power to do certain acts. It does not in itself strip the donor of his legal capacity, whatever it may be, by virtue of ownership or otherwise to do the same acts”. In relevant respects, we believe that the decision applies equally to section 162.

101. For a more detailed account see Sir John Harvey, “The Early History of Land Registration in New South Wales” (1917) 15 Weekly Notes Covers, 61, 65, 69.

102. Historical Records of Australia, IV/1, 219 and 220. That proclamation provided for the voluntary registration of “all deeds and conveyances ... whereby any houses, lands, tenements or hereditaments ... may be in any way affected in law or equity”. A registered deed was accorded priority over an unregistered one in that, on a dispute, the latter was to be “adjudged fraudulent and void against any subsequent purchaser or mortgagee for valuable consideration”.

103. Hogg, Deeds Registration in Australasia, (1908), 22.

104. First Schedule.

105. “Suggestions by the Registrar General for the Amendment of the Real Property Act, 1900” (1966), 11, para. 68.

106. Royal Commission on the Conveyancing and Law of Property Bill, Report, (1918), 9.

107. Report, 2-6, paras 2-10.

108. Report, 2, para. 3.

109. Ibid., 3, para. 4.

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