Pakis & ors v Pakis [2011] NSWSC 1073

Supreme Court New South Wales

Medium Neutral Citation: Pakis & ors v Pakis [2011] NSWSC 1073 Hearing dates: Monday, 29 August 2011 Decision date: 29 August 2011 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: Summons dismissed Catchwords: POWERS OF ATTORNEY - Application by attorneys to vary general enduring power - attorneys seek deletion of circumscription on power precluding dealing with real property - propose to sell certain real property to fund nursing home bond - donee of power makes will shortly before giving power - will devises certain real property to son - inappropriate to vary power when contrary to donee's express intentions in will and terms of power. Legislation Cited: (NSW) Guardianship Act 1987 (NSW) Powers of Attorney Act 2003, s 22, s 26, s 27, s 33, s 36 Category: Principal judgment Parties: Argyro Pakis (first plaintiff) Vasso Paul Tsolakis (second plaintiff) Tim Tyler (third plaintiff) George Pakis (defendant) Representation: Counsel: R. D. Wilson Solicitors: Tsolakis Solicitors File Number(s): 2011/250036

Judgment (ex tempore) 1HIS HONOUR: By summons filed on 3 August 2011 the plaintiffs Argyro Pakis, Vasso Paul Tsolakis and Tim Tyler seek an order pursuant to (NSW) Powers of Attorney Act 2003, s 36(4), varying the terms of a general enduring power of attorney given to them on 24 March 2009 and registered on 14 October 2010 by the defendant George Pakis, by deleting clause 5(i) of the power, which provides "My attorneys are directed not to sell, mortgage or lodge any encumbrance against any of my real property". 2The evidence establishes that the deceased is in deteriorating health. Although it is not necessary that I make such a finding on this application, it is likely that he is incapable of managing his affairs, although the requisite medical evidence to establish that is not presently before the Court. In any event, the evidence establishes that he needs to be admitted to a nursing home. He is asset rich, owning many parcels of real property, but apparently income poor. The plaintiffs - who are respectively his wife, his solicitor and his accountant - wish to be able to sell one of the subject properties, principally for the purpose of using part of the proceeds to pay a nursing home bond. 3The power of attorney is in relatively simple form. After appointing the plaintiffs to exercise the authority conferred on attorneys by Part 2 of the Powers of Attorney Act to do on his behalf anything that he may authorise an attorney to do, subject to the conditions and limitations specified in Part 2 of the instrument, it is expressed to be given with the intention that it continue to be effective even if he lacks capacity through loss of mental capacity after its execution. 4Part 2 contains the following conditions and limitations: 5. This power of attorney is subject to the following conditions and limitations: i) My attorneys are directed not to sell, mortgage or lodge any encumbrance against any of my real property. ii) Any moneys received by my attorneys on my behalf is to be deposited into my accounts with Laiki Bank Pty Limited. iii) My attorneys are directed not to invest any moneys received on my behalf into anything other than an interest earning bank account. 5The defendant made a will on 16 March 2009, a week before executing the power of attorney. By the will, he made provision for various beneficiaries, including his wife, and various children and grandchildren, leaving specified properties to each of them. As to the property which the plaintiffs wish to sell, he gave his interest in it to his son, James Pakis, subject to a presently immaterial condition. 6Powers of Attorney Act, s 26, provides that both the Guardianship Tribunal and the Supreme Court are review tribunals for the purposes of Part 5 of the Act. Section 27 gives concurrent jurisdiction to each of those tribunals. Section 36 provides that a review tribunal may, on the application of an interested person, decide to review the making or the operation and effect of a reviewable power of attorney, or not to carry out such a review. The subject power of attorney is a "reviewable power of attorney" for the purposes of s 33 of the Act. 7Section 36(4) relevantly provides: A review tribunal may, if satisfied that it would be in the best interests of the principal to do so or that it would better reflect the wishes of the principal, make any one or more of the following orders relating to the operation and the effect of the power of attorney: (a) An order varying a term of, or a power conferred by, the power of attorney... 8The effect of acceding to this application would be to override a limitation deliberately inserted in the power of attorney. The significance of that is accentuated by the fact that the power of attorney was made so shortly after a will which dealt, in a specific way, with the deceased's real property including, in particular, that property the subject of these proceedings. It seems to me that this application, if acceded to, might result in a substantial interference with the testamentary intentions, and the intentions in respect of the power of attorney, of the donor of the power. It is true that, by operation of s 22 of the Act, the gift in respect of the surplus proceeds of the sale of the property would not be adeemed and James Pakis would retain a beneficial interest in any surplus proceeds, but that would depend on the surplus proceeds being preserved. 9It may well be that it is in the interests of the donor that real property be sold and proceeds applied to fund a nursing home bond. It is almost certainly in his interests that such funds be realised as are necessary for that purpose. But whether that should be from the particular real property targeted by the plaintiff (to the potential detriment of one beneficiary), or from other real property, or from other assets, is a matter that ought to be left to the judgment of a financial manager pursuant to (NSW) Guardianship Act, Part 3 A , if appointed, rather than the plaintiffs overriding the defendant's wishes as expressed in his will and the limitations of the power. 10In my view, in the context of this case, it would be quite inappropriate to accede to the application under the Powers of Attorney Act . In those circumstances, it is unnecessary for me to consider whether it would be appropriate to accede to the application that the first plaintiff be removed as a plaintiff so as to become the next friend of the defendant, but my prima facie view is that it is very difficult to see how the first plaintiff could be said not to have a conflicting interest, as a donee of the power, when an application is made effectively to extend the scope of the power. 11I therefore order that the summons be dismissed.