Re Boff
Summary: In this case, Senior Judge Lush had cause to consider a short but important point of construction of the provisions of s.10(8) MCA 2005, to answer the question of whether the donor of a LPA can appoint a replacement attorney to succeed another replacement attorney. He also took the opportunity to outline practical problems that arise with the appointment of any replacement attorney.
Section 10(8) provides that:
"An instrument used to create a lasting power of attorney -
(a) cannot give the donee (or, if more than one, any of them) power to appoint a substitute or successor, but
(b) may itself appoint a person to replace the donee (or, if more than one, any of them) on the occurrence of an event mentioned in section 13(6)(a) to (d) which has the effect of terminating the donee's appointment."
The events mentioned in ss.13(6)(a)-(d) are disclaimer by the donee, death, bankruptcy, dissolution or annulment of a marriage or civil partnership (if the instrument does not provide that the appointment is to survive) or incapacity of the donee.
The donor, Dr Boff, sought to execute a property and affairs LPA appointing her husband to be her sole attorney, and then (in sequence), her two sons and then her niece as replacement attorneys. She sought to do so because she had been an attorney for her mother under a joint and several EPA, and wished to avoid the difficulties that she had experienced in practice with financial institutions declining to accept that she was empowered to act individually under the power. She therefore sought to grant powers successively, and that the succession be determined according to her clearly expressed wishes.
The OPG declined to register the LPA unless the provisions relating to the appointment of replacement attorneys were severed. The Public Guardian then brought an application for an order that the offending provisions be severed under the provisions of Paragraph 11 of Schedule 1 to the MCA 2005, and to direct the Public Guardian accordingly. Dr Boff and the putative attorneys resisted the application. It would appear that this was the first time that either a donor or an attorney had ever formally objected to an application by the OPG to sever an ineffective provision from an LPA, in the context of some 1,200 such applications being brought in the year 2012 alone. After an attended hearing, Senior Judge Lush granted the OPG's application. In a careful rehearsal of the learning in the area (which, as he noted, used to be an area where angels feared to tread), he noted that s.10(8) was ambiguous because (he considered) the draft Mental Incapacity Bill that had accompanied the Law Commission's report on Mental Incapacity had failed to give effect "to the true intention of the legislation, which was that replacement attorneys should only be available in circumstances where the original donee has ceased to act for a reason which can be established by objective evidence" (para 44). Senior Judge continued:
"45. What is striking is the complete absence of any reference, anywhere, to the possibility that a replacement attorney can replace a replacement attorney. Not only in its 1995 report, but also in its earlier report in 1983, the Law Commission spoke only of replacing the original donee, and there is no suggestion of the possibility that a replacement attorney might replace a replacement attorney either in the prescribed forms of LPA or in the guidance published by the OPG.
46. Having regard to all the circumstances, therefore, and considering the LPA scheme as a whole, including the wording of section 10(8)(b), its pre-legislative history, the guidance published by the OPG and the prescribed forms of LPA, I find that a replacement attorney can only replace an original attorney and cannot replace a replacement attorney."
Senior Judge Lush disagreed with the suggestion of the Legal Adviser to the OPG that the solution to Dr Boff's problem "would be to appoint two or more replacement attorneys to act jointly and severally, coupled with non-binding guidance expressing a wish (not a restriction) that they should act in turn" because this would be to defeat Dr Boff's object. Rather, Senior Judge Lush considered that "[t]o achieve what she intended within the existing legislative framework, Dr Boff should have made two LPAs: one appointing her husband to be the sole attorney and her son Edward to be the sole replacement attorney; and the other appointing her son Arthur to be the sole attorney and her niece Sarah to the sole replacement attorney, with a condition that the second instrument will not come into effect until the first instrument has ceased to be operable for any reason. I realise that this could involve the payment of an additional 'application to register' fee, but there would be no immediate need to register the second LPA, and it may never need to be registered and used, in any event" (para 48). He therefore directed that the ineffective provisions be severed.
Senior Judge Lush also went on – obiter – to make some observations about the complexities of the appointment of successive attorneys that he considered had never properly been addressed either by the Law Commission or by the Parliamentary draftsman formulating the MCA 2005. At paragraph 51, he noted some of the practical problems that arise with the appointment of replacement attorneys thus:
"(1) When the donor or an attorney makes an application to register an LPA, the named persons are not informed of the identity of any replacement attorneys on form LPA 001; they are only given the names and addresses of the original attorneys.
(2) There is no formal registration process for replacement attorneys and no facility whereby a named person, donor or co-attorney can object to the appointment of a replacement attorney, either when the original application is made to register the instrument, or when an event under section 13(6) of the Mental Capacity Act 2005 activates the replacement.
(3) Replacement attorneys are really only viable where the donor appoints a sole original attorney or more than one original attorney to act jointly and severally.
(4) Although a replacement attorney can replace an original attorney who has been appointed to act jointly, the outcome is unlikely to be what the donor intended. For example, if the donor appointed A and B to act jointly, and C to act as a replacement attorney, A's bankruptcy, death or disclaimer would terminate A and B's joint appointment, and C would become the sole attorney, rather than act jointly with B. Although the OPG guidance refers to this at the foot of page 19 of LPA 112, the prescribed form itself does not warn donors of the implications of appointing a replacement attorney where they have appointed their original attorneys to act jointly, or jointly for some decisions, and jointly and severally for other decisions."
Comment: It is difficult not to have a degree of sympathy for Dr Boff and her attempts to secure against the practical difficulties that she herself had experienced as an attorney. However, the outcome of the Public Guardian's severance application was in reality never in great doubt in light of the materials drawn upon by Senior Judge Lush in reaching his conclusion. Indeed, on one view, it could have been said that he could have reached it without the need for those materials, on the basis that s.10(8) only referred to the ability of the donor to appoint a replacement for the donee appointed under the instrument (or any one of them if more than one had been appointed), which on its face stands as a reference to the original donee alone. In any event, perhaps of greater significance for practitioners advising upon LPAs are the observations made by Senior Judge Lush at paragraph 51 of his decision. The first and second points indicate what might be considered to be failures in the statutory scheme, in that they render it more difficult to challenge the appointment of a replacement attorney; the third and fourth points represent advice that we suggest must be given whenever a donor is considering the appointment of joint and several attorneys but also wishes to consider the appointment of replacement attorneys.
