Professional Documents
Culture Documents
BC00022
BC00022
By
Abstract
After a brief background, the article looks at the Powers of Attorney Act
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which is the principal act relating to the PA. It then proceeds to take a
step-by-step look at the various parts involved in preparing a PA (from
taking the client’s instructions right up to its revocation) with emphasis on
related provisions of the Powers of Attorney Act and how they have been
interpreted by the Courts. Where appropriate, suggestions on good
practice has been added. The article ends with a cursory review of other
legislation which has provisions relating to a PA. A checklist summarising
the various steps and matters to be considered when preparing a PA is
attached at the end for ease of future reference.
Introduction
Part 1
Background to the PA
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loan documents where financial institutions lend money to borrowers.
As a species, the PA falls under the area of agency which forms part of the
law of contract. In a PA, the Donor is the principal and the Donee, an
agent. As such, principles of the law of contract especially that of principal
and agent, i.e. the law of agency, will be applicable when issues arise
regarding the validity and interpretation of a PA.
Note, however, that not all PA’s are ‘stand-alone’ instruments. A PA may
appear only as a clause in a document. This is common in loan security
documents which contains a PA clause by which a borrower authorises a
financial institution to sign all documents (on behalf of the borrower) to
exercise certain rights, including the right to sell the borrower’s property,
if the borrower defaults on the agreed payment terms.
Part 2
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The principal statutory legislation in West Malaysia in respect of the PA is
the Powers of Attorney Act 1949 (Act 424) (‘the Act’). Section 1(2) of the
Act states that it “shall apply to the States of West Malaysia only”. In the
circumstances the contents of this article are confined only to matters
concerning the PA in West Malaysia.
The Act itself is rather brief with only fifteen (15) main sections and two
(2) schedules. It offers little guidance on what a PA should contain.
Instead, it focuses more on the legal formalities to make a PA valid as well
as administrative matters relating to the duties of Court officials who
register and maintain records of the instrument.
Thus, when preparing a PA, it is left to the solicitor’s legal drafting skills
to ensure that the client’s instructions are adequately covered while
ensuring that the legal formalities stipulated by the Act are also observed.
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For the latter, a PA that does not strictly comply with some provisions
specified in the Act may be held as invalid by the Courts rendering it unfit
for its purpose with the dire prospect of a claim in negligence against the
solicitor who prepared the instrument.
Part 3
Preparing a PA
This is a crucial part when preparing a PA. It involves two (2) main stages
where different considerations come into play. A chronological breakdown
of the actions to be taken during each of these stages and the matters to be
considered in each of them are as follows:
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This first stage is where a solicitor should make all effort to clearly
ascertain the requirements of the Donor and to determine whether a PA is
suitable for the Donor’s purposes.
The General PA
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properties. For this purpose, the Donor may need to grant a PA to a
Donee. As the powers needed to look after all the Donor’s
properties may be varied, especially when it is difficult to ascertain
the legal situations that may arise in the future, it is best that the PA
be drafted in broad terms and include a wide range of powers so as
to adequately arm the Donee. Standard, pre-printed forms for a
general PA are still available showing how a general PA may be
drafted to make it applicable for a wide range of legal situations.
The Specific PA
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Section 6 (Powers of Attorney given for valuable consideration)
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The above two sections thus show that a PA can be made irrevocable
by the giving of valuable consideration or by stating it to be granted
for a fixed period of time, either of which must be stated in the
instrument itself.
This stage solely involves the knowledge and drafting skills of the solicitor
appointed to prepare the instrument. As in other legal instruments,
structure, content and accuracy must be ensured to avoid challenges (by
third parties) or complaints (by the client). A well-structured instrument
will be of immense assistance especially if it is required to be construed by
the Court. This should take into consideration the following:
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Language of the PA
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Heading
Appointment Clause
This clause should state clearly and accurately the relevant details
(names, NRIC numbers/company registration numbers/and
addresses) of the Donor and the Donee. It should also expressly state
the appointment of the Donee as the Attorney of the Donor.
Recitals
Body
This is the main part of the PA. It should show the object of the
instrument and the various powers which the Donor grants to the
Donee, including its limits, if any. This part must be carefully
drafted to ensure that the powers which the Donor wishes to grant to
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the Donee are clearly expressed without any ambiguity. The need
for clarity of expression in a PA can be seen in the decision of
Suffian FJ (as he was then) in Subramanian Pillay v. Sudarammal
where his Lordship quoted the following lines from the Privy
Council case of Bryant, Powis and Bryant v. La Banque du Peuple:
Ratification Clause
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Execution and Authentication
Part 4
The Act does not specify that the signature of the Donor must be witnessed
or attested. Instead, Section 3(2) provides that:
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“Notwithstanding anything to the contrary contained in any written
law in force at the commencement of this Act, an instrument
purporting to create a power of attorney duly executed and
authenticated in accordance with this section shall be deemed to be
properly and validly executed and attested for all or any of the
purposes for which a power of attorney may be used under any such
written law”.
In relation to this see the decision of Hamid Sultan Abu Bakar, JCA in
Kenaga Investment Bank Berhad v. Swee Joo Berhd & 9 Ors where his
Lordship quoted the following statement from RHB Bank Berhad v.
Dominance Timer Industries Sdn Bhd & Ors to show the relationship
between the words ‘attesting’ and ‘witnessing’:
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“… At times, the word attested is loosely used to describe witnessing
of signatures. Document need to be attested when the law requires it
to be do so.” [5]
Further down (at page 57, paragraph 49 and 50) the learned Judge stated as
follows:
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The prescribed persons according to Section 3(1)(a) are:
a Magistrate;
a Justice of Peace;
a Land Administrator;
a Notary Public;
• a Notary Public;
• any Judge;
• a Magistrate;
•
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a representative of Her Britannic Majesty;
Note also that apart from prescribing only certain persons, the Act also
prescribes a specific format to be used for the authentication. For an
individual, it is Form I of the First Schedule. In the case of a company or
corporation, it is Form II of the First Schedule.
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on its execution before certain named personalities and it must be
authenticated in the appropriate form following what has been set
out in the First Schedule thereto. A power of attorney created in
some other way other than what is stated in s. 3(1)(a) of the Powers
of Attorney Act 1949 (Revised 1990) must be struck down as null and
void and of no effect.” [7]
Part 5
Stamping the PA
Section 4 of the Stamp Act 1949 (Act 378) provides that any instrument
specified in its First Schedule shall be chargeable with stamp duty. Item 59
of the First Schedule to Act 378 provides that a PA is chargeable with
stamp duty at RM10-00. Note that if the PA appears as part of a document
(as in loan security documents), it must be stamped separately in addition
to the document itself.
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Part 6
Registering the PA
Section 4(1) of the Act provides that for a PA to be valid within Peninsular
Malaysia, a copy has to be deposited into Court and marked as a ‘true
copy’. In practice this is commonly referred to as registering the PA. The
importance of this section can be seen in the case of Wan Salimah Wan
Jaafar v. Mahmood Omar; Anim Abdul Aziz (intervener) where, at page
513, the Court referred to a PA and ruled that:
“to be valid … (the PA) must strictly comply with ss 4 and 5 of the
Powers of Attorney Act 1949 (Revised 1990)……….” [9]
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Chettiar Alagappan (As Executor to SL Alameloo Achi (deceased) & Anor
v. Secure Plantation Sdn Bhd may be instructive:
Revoking the PA
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procedure in the Act. This can be seen in the case of Sidambaram
Torosamy v. Lok Bee Yeong where Hamid Sultan Abu Bakar JCA ruled as
follows:
Take note, however, of the effect the words in this section which states,
“so far as may be compatible with the terms of the instrument”. This was
considered in PG Md Yaakub Pg Hashim & Ors v. Ak Mahrup PG Hashim
where the Brunei High Court held as follows:
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“Section 4 of the Powers of Attorney Act (Cap 13) provides that a PA
continues to be in force until notice in writing of the revocation is
given by the donor or the donor renunciates the PA, ‘so far as may be
compatible with the terms of such instrument’. In this case the PA was
given for the lifetime of the donee. There was no provision in the PA
itself for an early termination of it. Therefore, however dissatisfied
the plaintiffs were with the performance of the defendant, there was
no way in which the PA could be revoked, short of an agreement by
both parties that the PA should no longer apply.” [12]
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referred to in Part 6 above.
Part 8
Although the Act is the principal act in terms of the PA itself, care must be
taken to ensure compliance to requirements in other Acts. Briefly, these
are as follows:
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granted to that person’s “lawfully constituted attorney … limited until such
person shall obtain a grant or in such other way as the Registrar may so
direct”. Order 71 r. 30 provides for the use of a PA by a trust corporation
or other corporate bodies.
Trustee Act
Under Section 3 (Interpretation) of the Trustee Act 1949 (Act 208) the
word “trust”, “where the context admits, includes a personal
representative”. The word “personal representative” is defined as “the
executor, original or by representation, or administrator for the time being
of a deceased person”.
Section 30(1) of this Act gives the power to a trustee (by definition this
includes an Executor or Administrator) the power “to delegate all or any
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trusts, powers and discretions vested in him” by way of a PA where a
trustee intends to stay out of Malaysia for a period exceeding 14 days.
Other important provisions in this section are:
Section 30(3): the PA shall not come into operation unless the
Donor is out of Malaysia and shall be revoked by the return or
entry of the Donor into Malaysia;
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than 3 years after the date of its execution.
The PA may be used for certain specified situations in the National Land
Code 1965 (‘NLC’). For this purpose, a PA which has been registered in
Court must also be registered in the relevant Land Registry / Land Office.
When registered, the Registrar of Titles will ascribe its own a registration
number to the PA. In practise, when a Donee signs an instrument for
presentation to the Land Registry pursuant to a PA, particulars of the name
of the Donee, the PA registration number and the date it was registered
should be stated, failing which, the instrument may be rejected. The
situations where a PA may be used under the NLC include:
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Division III (Alienated Lands: Incidents & Registration of Title)
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Section 309 (1) of the NLC provides to the effect that an instrument
presented for registration under Part Eighteen may be signed by a
Donee under a PA. . The procedure to be followed when a Donee
signs an instrument under Part 18 on behalf of the Donor is shown in
Section 310. As Section 309(1) confines itself to instruments
presented for registration under Part Eighteen (which are instruments
for dealings), it is questionable whether a Private Caveat may be
lodged under the authority of a PA as a Private Caveat falls under
Part Nineteen of the NLC.
Note also that Section 433F of the NLC does not permit a PA to be used
for an application under Section 433B (acquisition of land by non-citizens
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or foreign companies) or Section 433E (conveyance or disposal to non-
citizen or foreign company subject to approval and payment of levy etc.
Each State in West Malaysia except Penang and Melaka has its own
version of the Malay Reservations Enactment. It is intended to prevent
land in Malay reservation areas from being disposed to non-Malays.
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Restriction as to dealings by attorneys
Conclusion
2 Drafting the PA
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a. Decide language of PA
b. Heading
c. Appointment Clause
d. Recitals
e. Body
f. Ratification Clause
4 Stamp the PA
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* The old adage states that ‘every dark cloud has its silver lining’. This
article is my ‘silver lining’ resulting from the dark cloud of the Covid-19
MCO lockdown period. Hopefully, it will be of assistance to fellow
solicitors, specifically those who have just commenced practice.
Needless to say, this article is not the result of my own efforts. I had lots of
advice and assistance. My sincere thanks go to Dato’ Dr. Abd Shukor
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Ahmad, Advocate & Solicitor, for his guidance and advice and to Ms.
Deepa Nanthini Sundaran, Advocate & Solicitor, for assisting me in
research relating to this article. I remain solely responsible , however, for
all errors or omissions. To my wife and children who allowed me to spend
much of my time these few months on my laptop – thank you for your
patience and support.
Endnotes:
[1]
[2013] 5 CLJ, page 441, paragraph 61.
[2]
[2013] 8 CLJ 775, paragraph 85.
[3]
[1988] 1 CLJ 480, page 511.
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[4]
[1968] 2 MLJ, at page 116.
[5]
[2017] 1 LNS 2086, page 50 onwards.
[6]
See N.S. Bindras “Conveyancing – Draftsman & Interpretation of
Deeds”, (Delhi Law House: 2005), 7 th Edition, page 1808.
[7]
[1998] 1 CLJ, page 510.
[8]
[2017] 5 CLJ page 437 at paragraph 13.
[9]
[1998] 1 CLJ, page 513.
[10]
[2017] 5 CLJ page 431, paragraph 9.
[11]
[2018] 3 CLJ page 612, paragraph 21.
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[12]
[1997] 5 CLJ page 457, paragraph 2.