CONTRIBUTOR: LILIAN EKU
INTRODUCTION
In Nigeria, the use of a Power of Attorney is common in real estate transactions, business operations, and even personal affairs. It is used by individuals, families, and companies. A legal aphorism that ‘he who does a thing through another person, does it himself/herself’ is deep-rooted in the use of power of attorney. However, despite its widespread use, many individuals do not fully understand its scope, implications, limitations, and potential risks.
WHAT IS POWER OF ATTORNEY?
Power of Attorney (POA), also known as delegation of power, is both a transaction and a legally binding document. Power of Attorney (as a transaction) is an act of delegation of power, whereby a party known as the (the Donor/ the principal) appoints another party who is known as the (donee/ the Attorney) to act on his behalf, either generally, to do all things that the donor can do or on specific duties to represent the donee in specific transactions. Power of Attorney on the other hand is a legally binding document which evidences the delegation of power from the Donor to the Donee. It carries the specific transactions delegated to the Donee. Power of Attorney is a deed poll; it is a legal document signed by one person (or multiple jointly) that formally declares the intention of the donor.
A well-drafted Power of Attorney should specify:[1]
- The scope of authority granted
- The duration of the power
- Conditions or limitations (if any)
- The duties of the agent
It is pertinent to note that a power of attorney must be in writing to be legally enforceable. An oral power of attorney holds no legal weight in Nigerian courts. Also, where it is to be executed outside of Nigeria, it must be attested to by a notary public.
Also, a court can nullify a power of attorney if it is satisfied that such power of attorney has elements of fraud, duress or incapacity at the time of execution.
LEGAL FRAMEWORK GOVERNING POWER OF ATTORNEY IN NIGERIA.
- The Powers of Attorney Act
- The Land Use Act 1978
- The Companies and Allied Matters Act (CAMA) 2020
- Judicial Precedents
TYPES OF POWER OF ATTORNEY.
- General Power of Attorney
General power of attorney gives the donee the power to act in all matters in which the donor can lawfully act. It is a broad power without any limit as long as such matters or transactions in which the donee is to act are legal, and the donor himself could have carried out those transactions if he were to be around at that moment and time. This type of power of attorney is usually given when the donor is out of the country and needs the donee to manage all their affairs pending their return.
- Specific Power of Attorney
Specific power of attorney, unlike general power of attorney, specifies the particular matters the donee can transact. The donee is bound by those instructions, and any act done outside the confines of those instructions are void because a power of attorney is construed strictly.
REGISTRATION OF POWER OF ATTORNEY.
Whether or not a power of attorney is registerable depends on the relevant Land Instruments Registration Law of the state it is intended to be executed. Where the law of a state classifies it to be registerable, then non-registration renders it inadmissible as evidence in court, like any other deed.
The various State Land Laws provide for the acquisition of the Governor’s consent to transactions involving alienation of interest in land; therefore, any power of attorney authorizing the donee to sublease landed properties or to totally sell, alienate and transfer all the unexpired residue in a landed a property would require Governors consent.
Stamping precedes registration, and both are required when the Power of Attorney confers interest in land or landed property.
EXTENTS AND LIMITATIONS OF A DONEE’S POWER.
A donee of a Power of Attorney derives his powers for the legally signed Power of Attorney which dictates the transactions a Donee has been appointed for, part of which might include;
- Execution of sale deed on behalf of the donor.
- To appear at meeting on behalf of the donor.
- To recover debt owed by the donor.
- To register documents on behalf of the donor.
- To do all the the donor can lawful do in his absence.
- To prosecute a case in court on behalf of the donor: In this instance, the supreme court in MUSTAPHA v. C.A.C[2] held that;
“Where a party gives Power of Attorney to a person or counsel to sue on his behalf, the donee of the Power of Attorney has no locus standi to institute an action on behalf of the donor in his own name. He must sue in the name of the donor as he is merely an agent of the donor. In this case, even if the appellant was given a Power of Attorney to prosecute the suit on behalf of his clients, he could not have sued in his personal name.”
The extent of the power a donee can exercise on behalf of the donor is enormous, however there are certain limitations to those powers and one of those limitations has been a legal argument which arises from time to time whether or not a power of attorney transfers ownership of assets to a donee and whether it can be considered a good root of title. There is are plethora of judicial authorities to this effect.
The Supreme Court in UDE v. UWARA[3] stated that a Power of Attorney is a mere instrument of delegation which does not confer, transfer, or limit a change or alienable title to the Donee. NNAEMEKA AGU JSC in the above case said as a way of obituary:
“A Power of Attorney merely warrants and authorizes the donee to do certain acts in the stead of the donor and so is not an instrument which confers, transfers, limits, charges or alienates any title to the donee: rather it could be a vehicle whereby these acts could be done by the donee for and in the name of the donor to a third party. So even if it authorizes the donee to do any of these acts to any person, including himself, the mere issuance of such a power is not per se an alienation or parting with possession. So far, it is categorized as a document of delegation: it is only after, by virtue of the Power of Attorney, the donee leases or conveys the property, the subject of the power, to any person, including himself, that there is alienation. What the above means is that until the donee of an Irrevocable Power of Attorney leases or conveys the property to himself, there is no alienation. Nothing like that has occurred in this case.”
Also in the notorious case of CHIME v. CHIME,[4] the Supreme Court, with WALI JSC delivering the leading judgment held that:
“The fact that a Power of Attorney to alienate property is given does not divest the donor of the power to deal with the property so long as the donee had not yet executed his power of sale before disposition by the donor. The fact that a Power of Attorney has been granted does not prevent the donor of the power from exercising the powers donated. It was inconceivable that the right of a donor will be subordinated to that of a donee, by reason only that he has, as it were made a delegation of such power to the latter. The better view is that as long as the donee has not exercised the power comprised in the Power of Attorney; it is clearly open to the donor to exercise the same power. Therefore, where the donor has in fact exercised the power, under the Power of Attorney, the donee’s power in this regard expires.”
Not only can a power of attorney transfer ownership to a donee, a donee can as well not act beyond the authority granted in the power of attorney document, nor create or alter the principal’s will, nor continue acting after the power of attorney is revoked.
REVOCATION AND TERMINATION OF POWER OF ATTORNEY.
A power of Attorney can be revoked or terminated in any of the following ways:
- By express revocation
A power of attorney can be revoked expressly; however, its mode of revocation depends on the mode of the creation of such power of attorney. A power of attorney cannot be revoked through a mode less than the mode in which it was created. This means that where a power of attorney is granted in writing, then such power of attorney can be revoked in writing or by a deed. However, a power of attorney granted by Deed must be revoked by Deed.
- By implied revocation
The mere fact that a donor has executed a power of attorney does not stop such a donor from exercising the powers delegated therein as long as the donee is yet exercised them. The donor exercising the powers himself automatically implies a revocation of the power of attorney, and such power of attorney stands revoked.
- By operation of law.
Unless a power of attorney is declared irrevocable, the donee’s authority ceases upon the death or incapacity of the donor.
CONCLUSION.
The donee of a power of attorney is not left unprotected by law. where a donor grants another Power of Attorney in respect of the same subject matter, it cannot be taken to be an implied revocation of the original one. The subsequent grant of a Power of Attorney is invalid. Also, where a donor intends to include more instructions in a power of attorney, he can create a new power of attorney. In such instance, the latter power of attorney overrides and revokes the previous one; however it is advisable to formally revoke a power of attorney to prevent confusion and potential disputes that might ensue as to which power of attorney is currently in effect.
REFERENCE
