In the British Columbia case of Houston v. Houston, Dr. George Houston executed a power of attorney for property on July 22, 2005 appointing his wife, Angela Houston and his son, James Houston, jointly and severally, as his attorneys for property. George executed another power of attorney for property on March 12, 2008 appointing Angela as his primary attorney and James as his alternate attorney for property if Angela was unable to act.
James, in 2009, acting on his father’s instructions and using the 2005 power of attorney, severed the joint tenancy of the condo James and Angela owned shortly before George died.
James, having knowledge of the 2008 power of attorney, sought the advice of a lawyer as to whether he could still act under the 2005 power of attorney, and the lawyer confirmed the first power of attorney was “still active”.
A dispute arose after George’s death as to whether the severance of the joint tenancy was valid given George had executed a later power of attorney. At trial the judge confirmed both powers of attorney were valid because neither contained an explicit revocation clause and implied revocation was not applicable. The judge then looked at whether James had breached his fiduciary duty as an attorney by self-dealing when severing the joint tenancy, but determined since George directed James to preserve his estate, James was acting on George’s instruction and the severance was valid.
Lesson Learned: Ensure a power of attorney document contains an explicit revocation clause to avoid confusion.
Written on December 18, 2013 – 11:23 am | by Jasmine Sweatman