This case concerned a family dispute over a residential property belonging to the mother of the claimant and the defendant.
In 2016, a lasting power of attorney was made by the owner, appointing the defendant, and covering both welfare and property/affairs, and lodged with the Court of Protection. The defendant in June 2018 proceeded to transfer the property into the names of herself and her mother, tenants in common equally. The transfer deed was signed by the attorney in her own capacity and also for her mother.
The transfer was then challenged by the claimant following the death of the mother in 2019. The defendant argued her mother had capacity and wanted to make the gift, the claimant argued her mother lacked capacity and the attorney had no power to make the gift.
The court did not consider the issue of capacity (because the transfer had not been signed by the transferor) but the question was whether or not the attorney had power to make the transfer.
It concluded that the attorney was not able to make such a transfer, an application to the Court of Protection would have been necessary, and ordered rectification of the title register to return the property from the joint names of the defendant and the mother to the sole name of the mother as original owner.
It is important to understand who, and how any document is being executed, in advance of completion. Any document which is executed under a power of attorney needs to be accompanied with a copy of the power (which actually authorises the disposal in question!) and that power needs to be acceptable to the Land Registry.
Execution under a lasting power should be heavily scrutinised. The Mental Capacity Act 2005 is very specific about what gifts are permitted by an attorney under an LPA, so dispositions pursuant to a lasting power of attorney need to be treated with great care.
It is key to consider the terms of any power of attorney and specifically should be aware that a lasting power of attorney is not sufficient to enable a gift of property. Be aware that the Court of Protection may authorised gifts outside s.12 under s.23 of the Act.