England and Wales Court of Protection Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COURT OF PROTECTION

		Royal Courts of Justice Strand, London WC2A 2LL
		18 February 2000

Mrs Justice Arden

Introduction

1. This is an appeal against the order of Master Lush, Master of the Court of Protection, dated 9 September 1999 whereby he dismissed objections of the appellant, Mrs X, and ordered that an instrument dated 24 November 1992 ("the 1992 power") be registered as an enduring power of attorney under the Enduring Powers of Attorney Act 1985 ("the 1985 Act"). This appeal is by way of rehearing. The discretion is that of the judge and the judge is not bound by the decision of the master (Re D (J) [1982] Ch 237, 245-7). Counsel appearing on this appeal did not appear before Master Lush..
2. As is well known, the 1985 Act in large measure implemented recommendations in The Incapacitated Principal (Law Commission No 122 (1983) Cmd 8977) and provides a means whereby powers of attorney ("EPAs") can be created so as to survive the subsequent mental incapacity of the donor. An EPA must be made in the prescribed form. When the attorney has reason to believe that the donor is, or is becoming, mentally incapable he must make an application to the Court of Protection for registration of the EPA Before doing so, the attorney must give notice to the donor and the donor's relatives. Until registration, the powers of the attorney are limited. Thereafter, the attorney has the powers conferred by the EPA, which is not revoked by the supervening mental incapacity of the donor. Recourse may be had to the Law Commission's report to ascertain the defect in the law which the 1985 Act was intended to remedy, and in addition to help identify the policy behind the new legislation (Yaxley v Gotts [1999] 1 WLR 1217, 1232 per Clarke LJ and 1239-1240 per Beldam LJ).
3. If a valid notice of objection to the registration of an enduring power of attorney is received by the court within a specified time, the court must neither register the instrument nor refuse the application until it has made or caused to be made such enquiries (if any) as it thinks appropriate in the circumstances of the case (section 6(4)). A notice of objection to the registration of an enduring power of attorney is valid if the objection is made on a number of specified grounds including..

"(b) that the power created by the instrument no longer subsists.

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(e) that, having regard to all the circumstances and in particular the attorney's relationship to or connection with the donor, the attorney is unsuitable to be the donor's attorney" (Section 6(5)).

4. If any of these grounds of objection is established to the satisfaction of the court, the court must refuse the application for registration, in any other case the EPA must be registered (section 6(6)). Furthermore, the court must not register an EPA, or refuse the application for registration, until completion of appropriate enquiries if it considers that those enquiries might bring to light evidence that one of the grounds of objection is satisfied (section 6(4)). The 1985 Act makes provision for the revocation or cancellation of an EPA registration of which is refused (section 6(7), (8)). If, however, an EPA is registered it is irrevocable without the leave of the court. The attorney's authority to make gifts is strictly limited (section 3(5)). Accordingly, if an attorney wishes to enter into a scheme to minimise inheritance tax payable on the donor's death, the leave of the court will generally be needed.
5. The background facts relating to the 1992 power are as follows Mr and Mrs E had three daughters, Mrs Y, Mrs Z and Mrs X Mrs Y and Mrs Z are the respondents to this appeal. Mr E died in 1998 and Mrs E is in her eighties. She is living in a nursing home and she has been diagnosed as having a form of Alzheimer's disease.
6. On 24 November 1992, Mrs E executed the 1992 power. It appointed Mrs Y and Mrs Z jointly to be her attorneys for the purposes of the 1985 Act with general power to act on her behalf in relation to all her property and affairs. However, it was subject to a restriction or condition that "My Attorneys shall not have my authority to sell charge or lease any land or other property in which I have an interest".
7. On 9 April 1997, Mrs E executed a further power ("the 1997 power"). This appointed all three daughters jointly to be her attorneys for the purposes of the 1985 Act with general authority to act on her behalf in relation to all her property and affairs. The words "save that any two of my attorneys may sign" were inserted in manuscript so as to follow the printed word "jointly" This appointment, unlike the 1992 power, was not expressed to be subject to any restriction or condition. The Master's judgment states that these words were drafted on the spot by Mrs E's solicitor because it was felt that it could be inconvenient and time-consuming to have to send all documents to Mrs Y, who lived some distance away, for her signature, but 1 have not taken that factor into account as it is common ground that this finding is not supported by the evidence on this appeal.
8. On 3 December 1998, Mrs X applied for the 1997 power to be registered. The Public Trust Office rejected her application on the ground that the condition imposed by the power was contrary to the appointment. Mrs X has not appealed against this rejection Master Lush in his judgment stated that the additional words "save that any two of my attorneys may sign" were inconsistent with section 11(1) of the 1985 Act, which provides that "An instrument which appoints more than one person to be an attorney cannot create an enduring power unless the attorneys are appointed to act jointly or jointly and severally " (see also The Incapacitated Principal, paragraphs 4 91 to 4 98). The 1997 power accordingly has effect at most only as an ordinary power of attorney and it is revoked by supervening mental incapacity.
9. On 5 February 1999, Mrs Y and Mrs Z applied to register the 1992 power. By a letter dated 10 February 1999, the donor's solicitors objected to the registration of the 1992 power on the grounds that it was revoked by the 1997 power and that the attorneys were unsuitable to be the donor's attorneys. From 26 March 1999, Mrs X objected to the registration of the 1992 power. Her grounds were those set out in the letter dated 10 February 1999. On 8 September 1999, following an oral hearing, Master Lush dismissed both grounds of objections and ordered that the 1992 power be registered forthwith. His reasons were as follows.

"The Enduring Powers of Attorney Act 1985 is silent on the question whether a later power revokes an earlier power, and I must admit that this is the first time I have been required formally to adjudicate on this particular issue.

The Law Commission's report The Incapacitated Principal which was published in 1983 and ultimate!) led to the 1985 Act. states at paragraph 431.

We would like to sound a note of caution about the drafting of the attorney's authority under the EPA. Subject to the exceptions mentioned above. the donor would in general be able to insert in the prescribed form of EPA whatever provisions he thought fit whether they related to the subject-matter of the power or to the authority conferred under it. And he could grant as many EPAs in favour of as many attorneys as he liked. This would merely reflect the general principle that people should be able to make such arrangements for the management of their affairs as they please. It will be important, however, for the donor to ensure that the authority bestowed under his EPA (or EPAs if several are granted) effectively} covers the whole of his property and affairs. If he leaves a "gap" so that part of his property and affairs is not covered by an EPA, it may be necessary for the Court to intervene and appoint a receiver. And whilst we would not wish to prevent the donor giving his attorney such limited authority as he thought fit, the fact remains that the less authority that is given to the attorney, the greater is the risk that he would be unable to act for the donor at a later date. If by that time the donor were incapable so that he could not create a new power, the Court might have to take over.

I should emphasise two particular sentences in this paragraph 'And he could grant as many EPAs in favour of as many attorneys as he liked. This would merely reflect the general principle that people should be able to make such arrangements for the management of their affairs as they please '

I imagine that the reason why the law is deliberately silent on the question as to whether or not a later power revokes an earlier power is because it was envisaged that a donor might create more than one power and that such powers might not be created simultaneously

Paragraph 431 of The Incapacitated Principal appears mainly to contemplate the situation in which a donor might appoint one attorney to manage one aspect of his or her affairs, and a different attorney to manage another aspect. For example, a donor might in one instrument appoint an attorney to manage his property in England and in another instrument appoint an attorney to manage his property in Wales.

Elsewhere in their report the Law Commissioners envisaged that a donor might create more than one power in order to achieve the effect of successive appointments. In footnote 214 on page 50 they said:

We do not recommend that an instrument should be able to provide for successive EPAs, that is one or more attorneys who would replace the original attorney or attorneys should he or they cease to act. Our main reason for this is that the benefit to be gained by including successive EPAs in our proposals would be out of all proportion to the complexity that such powers would create in relation to some of the more detailed areas of our scheme. In am event successive EPAs are rendered largely unnecessary because a joint and several EPA would permit the continuation of the EPA in the event of one of the attorneys ceasing to act. It would. however. be possible to create the effect of successiveness by a donor granting EPAs in separate instruments so that the authority of an attorney under one power could commence only upon the termination of the authority of an attorney under another power.

So, for instance, a donor might sign one instrument appointing his wife as his sole attorney and another - perhaps later - instrument appointing his children to be his attorneys if his wife were to predecease him or become otherwise incapable of acting as attorney.

In the absence of any statutory provision to the effect that a later instrument revokes an earlier power, it is necessary to look to the common law for assistance. However, there are no decisions - either reported or unreported - which directly address this point

There are a number of reported decisions on the revocation of wills, but they are mainly old authorities and are not always entirely consistent. In any event wills and enduring powers are completely different types of document. To revoke an enduring power the donor must give notice of revocation to the attorneys

However, some general principles do emerge in relation to the revocation of wills they are as follows

• whether a prior will or codicil has been impliedly revoked by a later will or codicil is a question of construction.

• there must be an intention to revoke (animus revocandi) on the pan of the testator,

• extrinsic evidence of the testator's intention is admissible.

• where there is more than one instrument the court should if possible, construe them so that both may stand, and

• if the instruments are so inconsistent that they cannot stand together, nether can be admitted to probate.

If one applies these rules, so far as they are relevant, to enduring powers of attorney, the following principles emerge

1 A later instrument does not automatically revoke an earlier instrument. This is because it was Parliament's intention that a donor should be able to create more than one enduring power of attorney if he or she wished. It might be necessary to create more than one power in order to deal with different aspects of the donor's affairs or to take effect at different times or in different circumstances

2 A later instrument which expressly revokes an earlier instrument will revoke the earlier instrument, but only when notice of the revocation is given to the attorney appointed in the earlier instrument. Where the instrument is registered, the revocation will only take effect when it is confirmed by the courts in accordance with section 8(3) of the Enduring Powers of Attorney Act 1985

3 In the absence of express revocation whether an earlier instrument is impliedly revoked by a later instrument is essentially a question of construction

4 The donor must have intended to revoke the earlier instrument

5 If there is more than one instrument, the court should attempt to construe them so that, wherever possible, both or all may stand. This reflects the general principle that people should be able to make such arrangements for the management of their affairs as they please

In my judgment. Mrs E's intentions were as follows:

In 1992 she made a conscious decision to appoint her daughters [Mrs Y] and [Mrs Z] but not her daughter [Mrs X], jointly to be her attorneys

In 1996 and 1997 there was closer contact and reconciliation between [Mrs X] and her parents as a result of [Mr E's] illness

In April 1997 both [Mr E] and Mrs E both decided to appoint [Mrs X] as an additional attorney for the purpose of the Enduring Powers of Attorney Act

The most convenient way of appointing [Mrs X] as an additional attorney was to sign a new instrument appointing all three of their daughters as attorneys

On 9 April 1997 when she signed the second power [Mrs E s] intention was not to revoke the appointment of [Mrs Y] and [Mrs Z], but (a) to confirm their appointment and (b) to appoint [Mrs X] as an additional attorney. In other words she did not have animus revocandi in respect of the earlier appointment

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The second ground on which [Mrs X] has objected to the registration of the 1992 power is that, having regard to all the circumstances her sisters are unsuitable to be the donor's attorneys

There are no reported decisions on the meaning of unsuitable to be the donor's attorney but Parliament's intention when including it as a ground of objection can be found in the Law Commission's report. The Incapacitated Principal (Law Com No 122) which was published in July 1983. At paragraph 429 the Commissioners said

This needs some explanation. It would amount in effect to a criticism of the donor's choice of attorney. But we would not wish this ground to be sustained merely} because the attorney was not the sort of person that a particular relative would have chosen. It is our wish that the donor's choice of attorney should carry considerable weight thus, for example, a mother might be content to appoint her son as her EPA attorney despite being aware of a conviction for theft. We would not want her choice of attorney to be upset simply because a particular relative would not want the son to be his attorney.

The question should be whether the particular attorney is suitable to act as attorney for the particular donor. In short, the Court should examine carefully all the circumstances - particularly the relationship between the donor and the attorney

[Mrs X's] objection in this case was expressed by her solicitors in the following terms

The attorneys are unsuitable to be the donor's Attorneys Relations between [Mrs E's] three daughters are not good because there is division of opinion as to how [Mrs E's] assets might be applied. It is believed that [Mrs Y] and [Mrs 2] favour some creative tax planning which [Mrs X] believes is inappropriate. We believe [Mrs E's] position would be best served and protected by the appointment by the court of a receiver "

10. The Master then referred to Re W [2000] 1 All ER 175, to which I refer below.
11. Master Lush continued.

"In my judgment Mrs E must have been aware of the hostility between her daughters when she created the power in 1992. and she appointed [Mrs Y] and [Mrs 2] as her attorneys notwithstanding that hostility.

I am not convinced that the animosity between her daughters will have an adverse impact on the administration of her estate. The main bone of contention seems to have been the desirability or otherwise of entering into a scheme to mitigate the impact of inheritance tax on her death.

Attorneys have the very limted powers to make gifts of a donor's property contained in sections 3(4) and (5) of the Enduring Powers of Attorney Act 1985. Larger gifts, such as the kind of contemplated by [Mrs Y] and [Mrs 2] must be authorised by the court in accordance with the provisions of section 8(2)(e) of the Act.

If the attorneys wish to enter into some tax planning scheme, they must make a formal application to the court, and the court will then consider whether having regard to all the circumstances, the proposed gifts are reasonable and will not impact adversely on [Mrs E's] present and future standard of living

In the circumstances I see no reason why the court should frustrate [Mrs E's] choice of attorneys and intervene on the ground of their unsuitability."

12. There are two issues on this appeal, both of which were argued before Master Lush.

(1) Is the 1992 power a subsisting power, or was it revoked by the 1997 power?

(2) Are Mrs Y and Mrs Z unsuitable to be Mrs E's attorneys?

I will take these issues in turn.

Issue 1: was the 1992 power revoked by the 1997 power?

13. There are three differences between the 1992 power and the 1997 power. The first difference is that Mrs X is not an attorney under the 1992 power, she is however an attorney under the 1997 power. The second difference is that the 1992 power contains the restriction on the disposition of land and other property set out above, which is not present in the 1997 power. The third difference is that the 1997 power provides that any two attorneys may sign..

The appellant's submissions

14. The appellant submits that the 1992 power was revoked by the 1997 power and that Master Lush was wrong to hold otherwise (The appellant did not argue that the 1992 power was invalid on any other ground as she had done before Master Lush)..
15. The appellant submits that although the 1997 power has not been registered as an enduring power of attorney, it was nonetheless valid as an ordinary power of attorney as soon as it was executed. As an ordinary power, however, it was revoked by Mrs E's supervening incapacity. The objection to the form of the power based on section 11(1) of the 1985 Act does not affect the validity of the 1997 power as an ordinary power. The power, on the appellant's submission, should be construed as a joint power which is enlarged in the particular respect that any two attorneys can sign. The appellant further submitted that the word "sign" in the 1997 power should be construed narrowly and as referring only to signing to implement transactions which all three attorneys had decided on..
16. The appellant submits that as between donor and attorney an ordinary power of attorney is revoked by the doing of any act by the donor which is inconsistent with the continuation of the power and of which the donee has notice. In support of this submission, the appellant relies on Bowstead and Reynolds on Agency, articles 119, 122, especially at page 674, note 61, and Heaton's Transport (St Helens) Limited v Transport and General Workers' Union [1973] AC 15 at 110C, per Lord Wilberforce, delivering the joint opinion of their Lordships The appellant also relied on the American Law Institute's Restatement of the Law of Agency (1958) (2nd ed) at page 302-4. The relevant passage in Bowstead and Reynolds reads " there may be implied revocation by an act which is inconsistent with the continuation of the agency, coming to the notice of the agent" and the authority cited for this at footnote 61 is Smith and Jennings's case (1610) Lane 97, 145 ER 329 (Another example is Cousins v International Brick Co Ltd [1913] 2 Ch 90, where a shareholder who had appointed a proxy to vote for him could nonetheless vote in person ). Likewise the Restatement states that a principal can revoke the agency by conduct which is inconsistent with its continuance as where he authorises another agent to act on his behalf. The Restatement states that in such a case it is a question of construction whether the agent intends to terminate the authority of the first agent or merely authorise another agent also to act. The appellant relies particularly on a statement in the Restatement that the conduct will terminate an agent's authority "if, reasonably understood " it indicates that the principal no longer consents to the agent acting for him. That the conduct must be such that it can be reasonably understood in this way is the issue for which the passage in the Heaton's case was cited. In that particular case the withdrawal of authority had been equivocal. What happened in that case was that the principals had merely given advice to the agent and it was held that that this did not amount to terminating their authority to act contrary to that advice. The appellant seeks to extend this principle by submitting that there is also a requirement that the conduct of the donor should also be reasonably construed in determining whether it was inconsistent with the continuation of the agency.

17 The appellant also submits that the execution of the 1997 power is inconsistent with the continuation of the 1992 power thereafter for the following reasons

(i) it would have been irrational for Mrs E not to have wished to express all the powers her daughters were to have in a single instrument

(ii) If the 1992 power continued after the execution of the 1997 power Mrs Y and Mrs Z would thereafter have been simultaneously authorised to act jointly with Mrs X in all matters and to act independently of her in all matters save dealings in land. The effect of this would be that Mrs X's participation would be superfluous in all matters save dealings in land. If in 1997 it had been Mrs E's intention to make Mrs X's participation necessary only in relation to dealings in land, and to achieve this by two instruments rather than one, the obvious course for her to take would have been to grant a further power appointing her three daughters to be her joint attorneys solely in relation to matters falling within the restriction in the 1992 power

(iii) It is unlikely that Mrs E would have chosen to specify expressly in the 1997 power that any two of her attorneys may sign and to leave un-stated that Mrs Y and Mrs Z could continue to act in all matters falling within the scope of the 1992 power independently of Mrs X if they saw fit

(iv) It is unlikely that Mrs E would have retained the word "jointly" and deleted the alternative "jointly and severally" in the 1997 power since if the 1992 power continued after the execution of the 1997 power the combined effect of both was more akin to a joint and several authority subject to restrictions

17. There is no evidence as to Mrs E's intentions when she executed the 1997 power. The only evidence is that of Mrs X who states that the 1992 power was never mentioned and that she believes that Mrs E had forgotten about it. There is no suggestion that at the date of the execution of the 1997 power Mrs E was concerned to distinguish between dealings in land and other dealings. Mrs Y and Mrs Z both had express notice of the execution of the 1997 power as they countersigned it. The appellant contends that there is no justification for Master Lush's conclusion that in 1997 Mrs E did not intend to revoke the 1992 power.

The respondents' submissions

18. The respondents accept that the authority of an agent may be revoked by express notice given by the principal to the agent. They also accept that there can be revocation by conduct of the principal. They submit, however, that there has to be communication of revocation and in addition the conduct must be unequivocal, as in the case of promissory estoppel (see Goldsworthy v Brickell [1987] Ch 378 at 410-411). Accordingly, it has to be shown that the 1997 power is inconsistent with the 1992 power. They submit that there is no inconsistency between the grant of the 1997 power and the continued subsistence of the 1992 power having regard to the following -.

(i) the 1992 power appoints Mrs Y and Mrs Z jointly and does not authorise them to sell, charge or lease any real property of Mrs E

(ii) The 1997 power is not so restrictive but requires the appellant and respondents to act jointly so that any two may sign

19. The 1992 power and the 1997 power therefore overlap but are very far from coextensive. The respondents also urge the court to take into account that the 1997 power did not take effect as an enduring power of attorney but only as an ordinary power of attorney. This meant that it could not operate after Mrs E became mentally incapable.
20. Accordingly, on the respondents' submission, no legal impasse was created by the coexistence of the powers side by side.

Conclusions

21. I accept the appellant's submission that the 1997 power takes effect as an ordinary power even if it cannot take effect as an EPA The 1997 power is therefore capable of being used prior to the donor becoming mentally incapable. However, in my judgment, the 1992 power has not been revoked by the execution of the 1997 power and the reasons for my conclusion are as follows.

(1) The general law of agency in my judgment shows that to amount to revocation by conduct, the conduct must be inconsistent with the continuation of the agency. Contrary to the appellant's submission, this in my judgment means more than that the conduct should be reasonably understood as amounting to revocation. To be inconsistent, it must be its unambiguous in its effect 1 approach the question of revocation in this way rather than by applying presumptions as a matter of construction, which was the approach of Master Lush

(2) The onus is on the appellant to show that the 1992 power has been revoked. Accordingly, she has to show that the donor must have intended to revoke the 1992 power. It is not enough to show that the donor must have forgotten about the 1992 power or made no reference to it. Indeed if she had forgotten about it that would suggest that she did not intend to revoke it. As the passages cited by the Master from the Law Commission's report show, it is not the policy of the 1985 Act to prohibit successive EPAs

(3) The 1997 power applies to land whereas the 1992 power does not. Had the 1997 power been limited to land it would have been clear that the two powers were not inconsistent. The present issue has arisen because there are some matters covered by both powers, for example the payment of bills

(4) There is no contemporaneous evidence as to the donor's intentions, or even any later evidence from her as to what she intended. All that is known is that she did not expressly revoke the 1992 power when she executed the 1997 power. On 4 January 1999, she wrote a letter saying that she agreed that her daughters could apply to register the 1992 power but this does not inform the court about her intentions in 1997 and I must also bear in mind that the donor had previously objected to the registration of the 1992 power

(5) I do not consider that it is clear that the 1997 power revokes the 1992 power. There is no reason why the donor should not want to preserve the possibility that the 1992 power might be used if for some reason the 1997 power could not be used. She did not know that the 1997 power was not valid as an EPA when she signed it, but there is no reason why she should not have wanted to cover the situation that it might be invalid. To have several simultaneous powers would be a legitimate and understandable wish, and not an irrational one as suggested by the appellant

(6) The appellant contends that the 1997 power requires unanimity, i e that all three sisters had to agree on each transaction to be carried out by the attorneys and that the additional words added by the donor ("save that any two of my attorneys may sign") merely enabled two out of the three attorneys to sign if they had all agreed on a transaction. In my judgment, this interpretation involves adding words that are not expressed; preventing two only from signing unless all three sisters had agreed on the transaction to which the signature related. In my judgment those words cannot be read in. They are not a necessary implication. It is more likely that the donor wished to cover the possibility that one of the sisters was unable to act, for example because she was abroad or ill, or because she was unwilling to agree to something that two sisters approved. This is another situation for which the donor may have wanted to have a contingency plan. There is also some evidence to the effect that the appellant had not been on good terms with her parents prior to the execution of the 1992 power though the appellant contests this evidence. Be that as it may, the effect of the 1997 power as properly interpreted is not in my judgment inconsistent with the 1992 power in any of the respects relied on by the appellant. Rather the 1997 power confirms the tenor of the 1992 power, that the donor was content that two only of the daughters should have power to act as her attorneys. The 1997 power should be seen as at one with the earlier power in this sense, and as an unsuccessful attempt to add the third daughter, Mrs X.

(7) The Master based his conclusions on general principles applicable to wills. I do not think that it is necessary to invoke these principles as there is sufficient guidance in the general law of agency. However I agree with him that a later instrument does not automatically revoke an earlier instrument. The donor must have intended to revoke the earlier power and this must also be the effect of the donor's words or conduct

(8) I have considered whether it would be appropriate to make enquiries as to the donor's wishes as to who should be her attorney, and I refer to this below. I do not, however, consider that it would be appropriate to make enquiries from the donor as to the position regarding the 1992 power at the time of executing the 1997 power. If her medical condition means that she has a significant and persistent memory loss, she will not be able to assist the court. If her medical condition is satisfactory, she would of course have been able to revoke, or express a wish to revoke, the 1992 power since this dispute has arisen if she had wished to do so. Moreover, if her medical condition is satisfactory, it is likely that one of the parties could have obtained her evidence and to have submitted it to the court. Finally, her intentions would not be conclusive by themselves. Revocation must be manifested and in my judgment that has not occurred

Issue 2: suitability of the attorneys

22. The appellant's second ground of appeal is that the respondents are not suitable to be the donor's attorneys. The appellant says that the evidence shows that the relations between the three sisters have broken down, principally over the management of the donor's affairs. The appellant points out that there is more significance to be attached to the fact of disagreement where it relates to the affairs of the donor than if it relates to extraneous matters. The appellant says that there is a history of her being excluded by her sisters. She says that the donor wished all three daughters to be her attorneys this is evident not only from the 1997 power but from a letter which the donor wrote to the court on 13 December 1998. In this letter the donor objected to the appellant applying for the registration of the 1997 power on the ground that "the decision to make this application should be made by my three daughters, not by one acting alone" Moreover the appellant wishes to play an equal part.
23. The respondents for their part rely on the fact that they are mature and responsible women with no ill-will to the appellant. The only disagreement relates to tax-planning. It is hoped to make potentially exempt transfers from the donor's assets among her children equally in order to avoid or mitigate inheritance tax. The appellant has expressed concern as to whether the donor will have sufficient assets left for her needs. It is accepted that the attorneys could not transfer any assets of the donor pursuant to a tax- planning scheme without the approval of the court pursuant to section 8 of the 1985 Act.
24. The court could in theory appoint all three sisters as receivers and in that way seek to put the three sisters in the same position as if the 1997 power had been valid. But neither party seeks that and there is no indication that that would be a viable course (The appellant says in her evidence that at the present time she has no contact with either of her sisters ). The choice before the court is either to appoint a third party as a receiver or to register the 1992 power. It is against that background that the court is asked to hold, having regard to all the circumstances, the respondents are unsuitable to be the donor's attorneys.
25. The matters on which the appellant relies revolve around discussions about tax planning for the donor in June to December 1998 in which she was not involved culminating in the execution by the donor of a deed agreeing to an advancement of property out of her late husband's estate in favour of her three daughters in equal shares. I refer to this deed below. The advancement has not taken place because the appellant objected to it. She is one of the executrixes of her late father's estate and the proposal cannot proceed without her concurrence.
26. There is evidence that prior to the death of Mr E both the donor and her late husband wanted to minimise the inheritance tax payable on their deaths by appropriate tax planning. For this purpose they had consulted Mrs Z's husband, Mr Z, who is an accountant. So it was natural that that Mr Z should be asked to advise on the donor's estate. The donor's property now consists principally of a life interest in her late husband's estate, a 50% share in their house, other real property, cash on deposit and some investments Mr Z produced plans to save up to £110,000 tax. The appellant was advised of these plans but she thought that the donor should keep £20,000 more than the scheme provided. This was agreed by the other sisters. In the course of preparing proposals, there was a meeting between Mr Z, the respondents and the donor's solicitor on 11 June 1998. The appellant was not invited to this, and the respondents at first said that they had not been present, contrary to what appears now to be the position. Likewise it appears that Mrs E's solicitor wrote a letter giving advice so that all the sisters could read it, but it was not shown to the appellant.
27. In due course Mrs E's solicitors (acting on Mr Z's instructions) produced a draft deed to give effect to the advancement which it was desired that Mrs E should make. They sent it to Mr Z to obtain his instructions on one point. In order to save time, Mr Z arranged for Mrs E and Mrs Z (as executrix of Mr E) to sign it, notwithstanding that it had not been engrossed and notwithstanding that Mrs E had not received any independent legal advice on it. This was also before the appellant had been told about the proposals. The appellant says with some justification that if meetings were being held with Mrs E's solicitor, to which the other sisters were invited, she too should have had the opportunity to attend.
28. In my judgment Mr Z, Mrs Y and Mrs Z are to be criticised for obtaining the donor's signature to the draft deed, given her medical condition and given the fact that it was only a draft and the fact that she had no independent legal advice. There is medical evidence that Mrs E was not in a position to manage her affairs by December 1998. Mrs E had not received advice about the deed from her solicitor at the stage she was asked to sign..
29. The court had to consider an objection on the grounds of unsuitability in the recent case of Re W [2000] All ER 175 to which the Master referred. In that case, an elderly lady, W, gave one of her children, X, an EPA Her two other children, who were hostile to X, objected to the registration of this power on the ground (among others) that X was unsuitable to be her attorney. X had made gifts on behalf of W without the consent of the court. The master held that he was not satisfied that W understood the nature and effect of the power and that the hostility between the children rendered them all unsuitable to be W's attorneys. On appeal Mr Jules Sher QC sitting as a deputy judge of the High Court held that the making of the gifts had been for sensible tax planning reasons and had been in favour of the three children equally. The other children did not object and there was some evidence that they had been in accordance with W's wishes expressed before she became incapable. Accordingly he held that matter should be kept in perspective. On the issue of hostility, the court held that it all depended on the circumstances whether hostility made an attorney unsuitable. In that particular case there was little need for consultation and therefore no real likelihood that the hostility would impact adversely on the administration of the estate, as might happen if there was a need for a high degree of consultation between the children. If the Public Trustee were to be brought in, substantial fees would be incurred.
30. A number of relatives or friends of the donor in this case have written letters to the court giving their views on the suitability of the three sisters to be the donor's attorneys, but I have given these letters limited weight. There are two main reasons for this. First, there has been no challenge to the ability of Mrs Y and Mrs Z to discharge the function of attorneys. Second, some of the letters contain views on the personality of the appellant, but it is not necessary for me to decide where the responsibility for any breakdown in relations between the parties may lie..

32 Having considered the submissions made on this appeal, I do not however consider that the respondents are unsuitable to be the donor's attorneys for the following reasons:

(1) Under both the 1992 power and the 1997 power, the donor appointed members of her family as act as her attorneys and her wishes in that regard should be upheld. It is part of the policy of the 1985 Act that the donor's wishes should if reasonably possible be upheld (see paragraph 4 29 of The Incapacitated Principal, set out in the Master's judgment). Thus for instance the 1985 Act does not give the court power to refuse to register an EPA except on one of a limited number of grounds. In addition, under section 6(5)(e) of the 1985 Act the court has to be satisfied not as to the chosen attorney's suitability, but rather to his unsuitability

(2) To appoint a receiver would mean that a third party would have to be brought into the donor's affairs and between her and her family. This is not in principle a desirable outcome where members of the family have been caring for the donor for a substantial period of time already. Moreover, as I have said, in neither the 1992 power nor in the 1997 power did the donor appoint a third party. The appellant says that she does not think that her mother would be upset if a receiver were appointed. However, the most reliable indications of her wishes that I have are those in the deeds themselves

(3) Mrs Z has had conduct of Mrs E's affairs for some time Mrs Y and Mrs Z are more likely to know what the donor would want than a receiver who may well be a stranger

(4) On the question of the hostility between the three sisters I agree with Mr Sher QC that this does not automatically mean that the attorney should be some other person. It must depend on the facts. The tax planning issue has been the only matter of controversy in this case and it will have to be decided by the court in any event. It has not been suggested that once that matter is resolved there will be have to be any great degree of consultation between the respondents and the appellant as to how the donor's affairs should be managed. Her estate, though presently not insubstantial, is not complex. It will consist mainly of a limited number of investments after the anticipated tax planning scheme has been implemented.

(5) On 15 December 1998, the respondents made a sensible suggestion to submit the outstanding issues on the tax planning scheme to mediation by a solicitor. This offer has been refused by the appellant. They have also offered to consult the appellant on all decisions if she would abandon the present appeal. These suggestions demonstrate their willingness to try to resolve any difficulties with the appellant by negotiation and compromise. I have criticised them for obtaining Mrs E's signature to the draft deed of advancement, but there was no intention to act otherwise than in Mrs E's best interests and in accordance with her wishes. I also consider that it is regrettable that the appellant was not kept properly informed of the steps being taken. However, I do not consider that what has happened in those respects should be seen in isolation. Mrs Z in particular has given a considerable amount of time to managing her mother's affairs and there has been no complaint about that. I do not consider that, given all the circumstances of this case, either she or Mrs Y could be held to be unfit or unsuitable to act as attorneys for the donor in the future management of her affairs. Moreover, they clearly have access to legal and accountancy advice if that is needed

(6) Another issue is whether the appointment of two out of the three sisters is likely to be against the donor's interests because it will lead to disharmony among the family which will have an adverse effect on her. No one, however, has suggested that this will happen. The three sisters are all responsible and mature individuals: one is a finance manager for a large UK subsidiary of a French company, one is a schools inspector and one (the appellant) has recently been in the employment of a firm of solicitors as a legal accounts assistant. I would not expect any of them to cause any distress or anxiety to the donor because of any disharmony between themselves

(7) There would be significant costs involved in appointing a receiver which would not be incurred if Mrs Y and Mrs Z are attorneys

(8) I have considered whether the court should make enquiries from the donor as to whether she would be concerned if two of her daughters were to be her attorneys, but not the third Counsel helpfully made suggestions as to the type of enquiries that could be made, such as whether the donor wanted the same people to continue to manage her affairs as at present. I do not however think that such enquiries would elicit significantly more information than I have at present and accordingly I do not consider that such enquiries would be appropriate. Moreover, the question is not what the donor would now prefer but whether Mrs Y and Mrs Z would be unsuitable to be her attorneys. I note that the Law Commission's report envisaged only a limited role for enquiries by the court and stated that the court would make independent enquiries of its own where there were suspicious circumstances or in cases where there were no relatives to be informed (see The Incapacitated Principal, paragraphs 4 46 and 4 48). That is not to say that enquiries will only be appropriate in such circumstances the court must form a view about the usefulness of enquires based on all the circumstances of the particular case

(9) I do not consider that the attorneys under the 1992 deed should be treated as unsuitable simply because they do not include the appellant. Naturally if circumstances permitted it, it would have been desirable that she should have the same role as her sisters in relation to her mother's affairs but as I see it this is not open to the court because the donor chose to appoint her two sisters under the 1992 power. I hope that she will now accept that this was a decision which her mother (for whatever reason) was free to make, and abide by it, as best she can.

31. For the reasons given above, I dismiss the appeal and direct that the 1992 power be registered forthwith..