N.B. & Anor -v- C.B. & Anor (Approved)

Factual and Procedural Background

This opinion concerns an application under the Powers of Attorney Act 1996 to register an enduring power of attorney executed by the donor in 2008. The application, brought by two of the donor's five children as named attorneys (Applicants), was opposed by two other siblings (Respondents), with a fifth sibling supporting the Applicants. The dispute arose from family tensions relating to inheritance, property distribution, and care of the donor, who has declining capacity. The conflict centered on the suitability of the named attorneys and decisions made regarding the donor's property, specifically the sale of shares to fund works on a family house. The Court considered affidavit and oral evidence, submissions, and cross-examinations before delivering judgment.

Legal Issues Presented

1. Whether the enduring power of attorney should be registered under section 10 of the Powers of Attorney Act 1996.
2. Whether the named attorneys are unsuitable within the meaning of the 1996 Act.
3. The legal effect of objections raised out of time concerning decisions made by the attorneys.
4. The impact of family hostility on the suitability of attorneys and administration of the donor's affairs.
5. The appropriate exercise of the court’s discretion regarding costs in enduring power of attorney proceedings.
6. The scope and nature of directions the court may give under section 12(2) of the 1996 Act in light of alleged mismanagement.

Arguments of the Parties

Applicants' Arguments

• The enduring power of attorney meets statutory criteria for registration under section 10 of the 1996 Act.
• The objections to the attorneys’ suitability are unfounded and primarily stem from family disputes rather than legal grounds.
• Decisions complained of, such as the sale of shares, were made by the donor herself who had capacity at the time, not by the attorneys.
• Any errors or missteps by the attorneys amount to mismanagement but do not meet the threshold of misconduct or unsuitability.
• Family hostility does not affect the attorneys’ suitability unless it adversely impacts estate administration.
• The objectors acquiesced to the contested transactions and cannot raise objections years later.
• The Applicants seek costs in accordance with the general rule that costs follow the event, supported by a Calderbank letter offering a more generous settlement than ultimately granted.

Respondents' Arguments

• The named attorneys are unsuitable, particularly due to decisions regarding the sale of shares to fund works on the donor’s property.
• The objection to one attorney is derivative, based on the conduct of the other.
• One respondent argued the attorney living abroad is unsuitable, though this was only faintly pressed.
• There were concerns about mismanagement of the donor's financial affairs.
• The respondents suggested that enduring power of attorney proceedings might warrant a different approach to costs, possibly analogous to will suits.
• There was an attempt to seek a payment related to the share sale proceeds.
• The respondents contended that the litigation was necessary due to the Applicants’ conduct, including threats to remove the donor from her nursing home.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully considered the evidence and submissions, noting the complex family dynamics and the potential for litigation to exacerbate tensions. It emphasized that the burden of proving the attorneys’ unsuitability rested on the objectors, who failed to meet this higher threshold. The court found that the contested decisions, including the sale of shares to fund works on the donor’s residence, were made by the donor herself while possessing capacity, not by the attorneys. Witness credibility was assessed critically, with particular rejection of the objectors’ evidence where inconsistent or evasive. The court held that family hostility alone does not constitute unsuitability unless it adversely affects estate administration.

Mismanagement or errors by the attorneys, while acknowledged, did not amount to misconduct sufficient to refuse registration. Instead, such issues could be addressed by directions under section 12(2) of the Act. The court also found that the objectors had acquiesced to the contested transactions by their prior conduct and communications, undermining their objections.

Regarding costs, the court analyzed the general rule that costs follow the event and considered arguments about special rules applicable in will suits. It concluded that enduring power of attorney proceedings are civil proceedings to which the general rule applies, absent exceptional circumstances. The court recognized the Applicants’ Calderbank letter offering a more favourable settlement and found that much of the objectors’ evidence was rejected or amounted to acquiescence. It also considered the proportionality of costs incurred due to the broad scope of objections versus a hypothetical limited hearing focused on directions. Consequently, the court decided to award costs to the Applicants with a discount reflecting unnecessary costs generated by the objectors’ approach.

The court gave detailed directions under section 12(2) of the 1996 Act concerning the donor’s care, financial management, and reporting obligations of the attorneys, reflecting a practical and flexible interpretation of the statute.

Holding and Implications

The court ordered the registration of the enduring power of attorney under section 10 of the Powers of Attorney Act 1996. The court found that the statutory criteria for registration were met and dismissed the objections based on unsuitability.

The court made directions under section 12(2) of the Act to regulate the attorneys’ management of the donor’s affairs and care arrangements. It also awarded six-sevenths of the costs of the proceedings to the Applicants, reflecting a discount for costs unnecessarily incurred due to the objectors’ approach.

No new precedent was established; rather, the decision reaffirmed established legal principles regarding the burden of proof for unsuitability, the distinction between mismanagement and misconduct, and the application of the general rule on costs in enduring power of attorney proceedings.