Powers of Attorney- What Does Ghana Law Say? (2)
Barbara Ewoenam Afua Kukah Esq (Robert Smith and Adelaide Law)
7. Types of Powers of Attorney
Act 549 allows for two types of PoA – a general PoA that allows a Donee to deal with all affairs of the Donor without limitation and a limited or special PoA which specifies the ambit or scope of authority/power that the Donor is authorizing the Donee to exercise. This was aptly put in the case Dzanku v Afalenu[1] where Justice Kingsley-Nyinah stated:
“A power of attorney is a formal document whereby one person empowers another to stand in his stead or to represent him, for certain specific purposes. It may either be a special power or else a general power. In the case of the later, the general power, the person unto whom the power is given, the Donee, becomes invested with full power to do such periodic acts as carrying on a business or collecting debts belonging to the Donor of the power. Where the power is special however, the Donor of the power confines the Donee to the doing of certain specified acts.” (emphasis mine).
Thus, a Donor may prepare a limited PoA to appoint someone to specifically manage his finances and another one for someone to make to healthcare decisions on his behalf. Another person may prepare a general PoA to authorize another to generally manage all his affairs including his health and finances.
A PoA which is given as security to secure the performance of an obligation which the Donor owes to the Donee is usually specific about how it is exercised and the scope of its authority. However, per section 2 of Act 549, the Donee must have a proprietary interest for the PoA to be effective. Or the Donor must owe the Donee an obligation before the PoA is created. This kind of PoA is generally irrevocable.
8. Invalid Power of Attorney
Simply having a PoA does not mean a person has the authority to perform an act, as the PoA may be invalid. PoAs are terminated or become invalid for several reasons including the following:
- It was not prepared in compliance with the law.
- The Donor died. When this happens, the law automatically revokes the PoA.
- The Donor revoked the PoA.
- The period of validity has expired.
- The Donor ceases to have mental capacity. Like death of the Donor, the law automatically revokes the PoA when this happens.
Under Ghana law, it is a crime to act under an invalid PoA. In fact, according to section 3(3) of Act 549, a Donee who is found guilty of this can be punished in one of the following ways:
1.Payment of a fine of an amount between 100,000.00 cedis and a million cedis (GHC 10.00 and GHC 100.00); and/or
2.A term of imprisonment not exceeding six months.
The law takes this very seriously because, for good or evil, a Donee has great power – access to the Donor’s money, properties, and any other thing allowed under the document. In some cases, especially those concerning medical decisions, a Donee may have power over the very life of a Donor. Great harm can be occasioned if the Donee abuses this power.
On an individual basis, whether a Donee will be liable or not depends on whether he knew or ought to have known of the invalidity. A Donee who knowingly acts under an invalid PoA will be held liable for this. For a Donee who did not know, for instance, that the Donor was dead, had lost mental capacity or had revoked the PoA, the question that will be asked is, “in the circumstances, ought the Donee to have known?” Below are a few circumstances examining in what cases a Donee ought to have known;
- Example A
In the event a PoA is invalid because it was never validly granted, whether it can be said that the Donee ought to have known will depend on the circumstances. If it is because it was not properly attested as in the case of Asante-Appiah v. Amponsah (supra), the Donee cannot plead ignorance of the law. He ought to have known the provision of the law regarding this. In the words of John Selden,
“ignorance of the law avails no man, not that all men know the law, but because ‘tis an excuse every man will plead, and no man will know how to refute him.[2]”
- Example B
Revocation of the PoA is a slightly trickier issue. Unless it is expressly stated that the PoA is irrevocable, a Donor may revoke it at any time. A Donor can revoke a PoA without notifying the Donee. But if the Donor for instance published the revocation in the mass media, the Donee would be said to have been given sufficient notice. It must be noted that the revocation of a PoA inter vivos must be in writing executed by the Donor in the same way as the instrument creating the power.
If the duration of a PoA is specified, a donee is presumed to know when the period of validity has expired and will be held liable for acting under the invalid PoA.
- Example C
The death of a Donor also revokes a PoA. In the case of Essien v. Gordon (supra), the court noted that death automatically terminates an agency relationship because the concept of authority demands a continuing consent of the principal to the agent’s act on his behalf. With the death of the Principal the consent would not continue because the mind from which it issued had to exist. Whether the Donee knew or ought to have known about the Donor’s death is a factual question to be answered based on the circumstances of the case. In the Hussey v. Edah case (supra), the Plaintiff sued for a declaration of title to family land claiming that based on two PoAs granted to him by his deceased family head and two other relatives, he had succeeded the head of family. The Supreme Court on appeal to it held that all the Donors of the PoAs having died before suit was commenced, the PoAs had been terminated and no action could be commenced based on those documents.
What happens in cases where there is more than one Donor and one of them dies? In the case of Dzanku v. Afalenu (supra), the Plaintiff was given a PoA by two persons who authorized him to prosecute and defend suits relating to family land. One of the Donors had died by the time the Plaintiff/Donee instituted the present action. The court held that as long as one Donor was still alive, the death of the other Donor could not invalidate the PoA.
- Example C
Mental capacity refers to a person’s ability to make decisions for themselves, having sufficient understanding and memory to comprehend in a general way the decisions they make. It may be lost through illness, a mental health problem, or dementia. Once lost by a Donor, a PoA becomes invalid. However, unlike death, it can be difficult or almost impossible to prove this. A Donee’s liability will depend on whether on the facts, the Donee knew or ought to have known of the Donor’s mental incapacity.
Section 3(1) of Act 549 provides that “a donee of a power of attorney who acts under the power at a time when it has been revoked shall not incur any liability to any person if at that time he did not know that the power had been revoked.” Thus if it is proven on the facts that the Donee did not know and could not have known that a PoA has been revoked or invalidated, there will be no liability. But the Donee must have been acting under the PoA, not ultra vires it. Thus if the Donee goes beyond the authority outlined in the PoA, the Donee will be liable.
A Donee who does not know of the revocation and acted within the scope of authority outlined in the document, is truly free from liability whether criminal or civil, to the Donor or any other person.
9. How Can Parties to a PoA Protect Themselves?
Donors can protect themselves by stating clearly on a PoA the names and addresses of the parties, the date it is created, its duration, and the scope of the Donee’s authority. A Donor who decides to revoke the power should do so in clear terms in writing in the same manner as the original PoA and promptly bring it to the attention of the Donee. This allows a Donor to avoid liability for acts of the Donee which are done ultra vires or in abuse of the PoA.
Donees can protect themselves by acting under the terms of the document and not exceeding their powers under the document, regularly reporting to the Donor, acting with due skill and care and not putting themselves in a position where their interests conflict with those of the Donor. However, as was held in the case of Gordon v. Essien (supra), a Donee will not to be held to have acted ultra vires if the action taken by the Donee was a necessary consequential power to enable the Donor to properly fulfil the PoA even if that act was not specifically mentioned the in the PoA.
Donees must also not accept secret gain or commission as a result of their position as Donee. Donees are additionally required to act in the name of Donor. In the case of Ayisi v. Banda[3], the court held that an agent cannot maintain an action in his name on any contract made by him as such agent whether or not the principal is named or unnamed.
Finally, Donees should not delegate their powers under the PoA. This springs from the delegatus non potest delegareprinciple which is translated into English as “one to whom power is delegated cannot further himself delegate that power”. This maxim regulates the extent to which a person who has been entrusted with authority to act can further delegate the performance of that act to another. This is because of the presumption that the naming of a person to exercise some discretion or perform an act indicates that he was deliberately selected to because of some aptitude peculiar to himself[4]or because of some skill or judgment possessed by the Donee which the Donor places confidence in[5]. Because a PoA is a trust or confidence reposed personally in the Donee, the Donee cannot delegate those duties to another person unless the PoA specifically permits the Donee to delegate. It cannot be assigned to a stranger whose ability and integrity might not be known to the principal.[6] This does not mean delegation is impossible in a PoA. A Donee may delegate authority under a PoA if the PoA expressly authorizes the Donee to do so. A Donee may also appoint persons to assist him to perform his duties. This is acceptable and not regarded as delegation of authority.
10. How Can Third Parties Protect Themselves?
Due to the nature of their businesses, many institutions such as banks and courts deal with individuals who purport to act on behalf of others. The law authorizes third parties to inspect any PoA presented by a person who purports to act on behalf of another[7]. A Donor is, however, usually not liable for the actions of a Donee who acts ultra vires or under an invalid PoA. It is thus essential for third parties to protect themselves when dealing with persons with PoAs. That said, the following will be a useful guide to third parties when inspecting documents:
- What are the names of the Donor and the Donee? Do they match with the names the parties present or the names in your records? If not, do they have documents proving they are the same people (eg. Properly attested statutory declaration of change of name or a copy of the gazette publishing a change of name and valid national identity cards)?
- Was the document properly attested? Has it been witnessed by a commissioner for oaths or a notary public? Has it been registered and stamped at the Lands Commission?
- When was the PoA prepared? Was a duration specified? If so, has it expired or not? Take note that under section 5 of Act 549, PoAs prepared by trustees cannot exceed twelve months.
- What is the reason for which it was given? Section 3(4) of Act 549 allows third parties to assume that a PoA given as security by the Donor is irrevocable.
- What is the scope of the Donee’s authority? Remember, a Donor is not liable for a Donee’s ultra vires acts.
- Is the Donor still alive and possessing the requisite mental capacity? Depending on the circumstances, third parties may have to confirm this by phone call, email, or letter from the Donor.
11. Conclusion
As long as PoAs are executed and used under the law, they are very useful instruments that help people accomplish a lot without necessarily being physically present or doing it themselves. It is, however, the opinion of the author that Act 549 may have to be reviewed to make the fines mentioned in section 3(3) better suited to present-day conditions as the change in currency and other economic conditions have led to a devaluation of the prescribed amounts which in turn makes the sanction lose its deterrent power.
[1] [1968] GLR 792 – 794
[2] Table Talk, 1689
[3] [2013-2014] SCGLR 1259, see also Ghana Rubber Products Ltd. v Criterion[1984-86] 2 GLR 56-78
[4] John Willis, Canadian Bar Review, Volume XXI, page 257
[5] Henry Irving Gordon, The Power of an Agent to Delegate His Authority, 1892, Cornell Law Library, page 2
[6] Law Times Journal, http://lawtimesjournal.in/delegata-potesta-non-potest-delegari/
[7] Section 37(2)(a) of the Conveyancing Act, 1973, NRCD 175
