Amendments Nos. 38 and 39 are related and may be taken together.
SECTION 13.
I move amendment No. 38:
In page 11, subsection (4), lines 37 to 39, to delete paragraph (a).
The subsection states:
Where the interest of a purchaser depends on whether a transaction between the attorney and another person was valid by virtue of subsection (3), it shall be presumed in favour of the purchaser unless the contrary is shown that the transaction was valid if:
(a) the transaction between that person and the attorney was completed within twelve months of the date on which the instrument was registered ..,
I propose the deletion of paragraph (a) as it is an unnecessary provision. Is it not more likely that an enduring power of attorney would be revoked years after its registration if, for example, relatives found out about it years later? The period immediately after registration is probably when problems would be least likely to arise. Rather than having this artificial period, I propose that the paragraph be deleted in full.
Both these amendments are concerned with the provisions in section 13 (4) relating to the protection of a purchaser of the donor's property from a person who had acquired it from the attorney at a time when the enduring power was no longer valid. The first transaction will be valid unless the person acquiring the property knew at the time that the enduring power was invalid or not in force. That is provided for in subsection (3) and corresponds with the general law on ordinary powers of attorney which is restated in section 18 (2).
Section 13 (4) is aimed at protecting a bona fide third party who subsequently buys the property. It creates a presumption in favour of that purchaser that the first transaction was valid in two cases. The first is dealt with in paragraph (a) and arises when the first transaction was completed within 12 months of the registration of the enduring power. The second is where the first purchaser makes a statutory declaration that he or she had no reason at the time of the transaction to doubt that the attorney had authority to dispose of the property. It is necessary to give this explanation of the background before coming to the amendment because of the complexity of the section.
Amendment 38 proposes to delete paragraph (a), which recognises that the enduring power has been registered and should on the face of it be entitled to be accepted as valid by persons dealing with the attorney unless they knew it was not. There is a corresponding provision in section 18 (4) (a) in relation to ordinary powers of attorney which have been revoked. Both provisions are in the interest of promoting certainty in conveyancing transactions and in line with those which have been in force in Northern Ireland for many years.
Amendment 39 refers to paragraph (b) of the subsection, which enables a purchaser of property acquired by the vendor from the attorney to benefit from a presumption that the first transaction was valid, notwithstanding that the enduring power was then invalid or not in force. For the purchaser to benefit from the presumption the vendor must make a statutory declaration that he or she had no reason at the time of the transaction to doubt the attorney's authority. Moreover, the declaration must be made before or within three months after the completion of the purchase.
The amendment proposes that such a declaration should not be made before the completion of the purchase and could be made only at the same time as completion or within three months afterwards. I see no objection to the declaration being made before the purchase is completed; a purchaser would wish to have it out of the way before completion. Paragraph (b) corresponds with section 18 (4) (b) which deals with a similar situation arising when an ordinary power of attorney was invalid at the time of a transaction entered into by a donee of the power. Corresponding provisions have also been in force in Northern Ireland for many years. For these reasons I regret I am unable to accept the amendments, which are in respect of a subsequent acquirer of the property.
Does the Minister not think the word "before" in paragraph (b) could be dangerous? The purchaser might be able to make a bona fide declaration weeks before the transaction but acquire knowledge after completion. I am told it would be better to deal with the statutory declaration at the completion of the purchase.
The transaction would be in existence from the time the contract was entered into and normally the declaration would be made between the contract and the completion. That is the crucial time, even more than the completion. It would be normal conveyancing practice for the declaration to be made shortly before completion.
Amendment, by leave, withdrawn.
Amendment No. 39 not moved.
Section 13 agreed to.