There have been controversies regarding the nature of a Power of Attorney within the context of conveyancing practice and the scope of the authority the instrument conveys. Divergent opinions continue to emerge which has created some confusion regarding the legality of some transactions that are consummated with the use of a Power of Attorney as a contractual instrument, not limited to mere delegation. This article is an attempt to succinctly examine the present trend with respect of the propriety of this instrument especially with respect of alienation of title.
THE NATURE OF A POWER OF ATTORNEY
A fitting discussion on the subject will require some context as to the true nature of what Power of Attorney denotes. It is now elementary law that a Power of Attorney as the name implies is an instrument that merely delegates, warrants, extends and offers limited powers to a person to do something or discharge an obligation on behalf and in the name of a donor. A Power of Attorney mirrors an agency relationship but it is sui generis and differs from other commercial agencies. The prevalent position of the law was that a Power of Attorney cannot and does not transfer, vest, confer or alienate the title and ownership of its donor. It is therefore wrong to use or have only a power of attorney as proof of ownership of title. Though some states allow the registration of power of attorney, it is actually registered as an instrument allowing and authorizing execution of another instrument for alienation, sale and transfer of ownership. So deed of assignment, deed of sale, deed of conveyance and deed of transfer are better options. See Section 2 of the Land Instrument Registration law Vol. 3 Law of Ogun State, 2006 and similar laws in other states of the Federation. This Position was clearly stated in the Case of UDE v. NWARA (1993) 2 NWLR Part 278, 647 under review and has been followed in plethora of cases with unwavering consistency.
To properly situate this argument, it is imperative to briefly highlight the unique dynamics of a Power of Attorney that sets it apart from other instruments or contract. A Power of attorney in its traditional nature is usually not inter partes, only a party is the donor of the power. This explains why a Power of Attorney is at times referred to as a “deed Poll” – a deed Poll in which the only party making it, executes it or binds himself by it as a deed. The donee is not a party (in the sense of parties with corresponding right in a regular inter-party contract). The categorization of a DONOR Vs. a DONEE as parties in the instrument of donation is only convenient for descriptive purposes.
However, a divergent legal position have been canvassed which tends to create a similarity between a Power of Attorney and other instruments of alienation, when it is made for valuable consideration. In such instance, it is structured in an irrevocable fashion. It is the writer’s position that it is only irrevocable to the extent that the consideration upon which it is given is unrealized. Where the consideration is realized, the power granted becomes revocable. What is contemplated under this circumstance is that where a Power of Attorney authorizes the execution of an instrument of transfer, such powers of attorney must be registered. Thus a power of attorney on its own, without more, cannot alienate land since it cannot confer, transfer, limit, charge or extinguish any interest in land. See AMADI v. NSIRIM (2004) 17 NWLR Part 901, Page 111 and OLORUNFEMI v. NIGERIA EDUCATIONAL BANK LIMITED (2003) NWLR Pt 812.
A recent survey conducted by THE CANVASS LEGAL (a legal resource clinic) in some southern states and the FCT revealed that the reason for this practice is that real estate merchants (sometimes on advise of counsel) in an attempt to evade the requirement of seeking consent of appropriate authorities due to the accompanying statutory fees, considered exorbitant and to avoid violation of some provisions of the Land Use Act resort to this. In other words, this enables holders of right of occupancy who desire to dispose of their interest not to go the normal route of conveyance, assignment, mortgage, or lease as the case may be. The ease and simplicity of the donating power of attorney to persons over land make the mode attractive- all that needs to be done is to register the instrument. The practice ensures that holders of the rights of occupancy who have no immediate need for them transfer them to persons who would use them without many complexities.
Now, the correctness or otherwise of this practice is very arguable. In UDE v. NWARA (Supra) under review, the Supreme Court of Nigeria restated clearly the timeless and fixed character of Power of Attorney as only an instrument of delegation and not an instrument which confers, transfers, limits, charges or alienates any title to the donee, but a vehicle through which these act could be done by the donee for and in the name of the donor to a third party. Contrariwise, only recently the Supreme Court of Nigeria took a radically different position in a case of ENGINEER YAKUBU IBRAHIM & ORS v. SIMON OBAJE (2017) SC/60/2006 delivered on the 15th day of December, 2017, where the Apex Court per Nweze JSC suo moto raised the issue of the propriety of the respondent’s title which was anchored on an unregistered power of attorney and invited parties to address the court on same by filing supplementary briefs of argument. Unfortunately, Justice Nweze was not on the panel that eventually heard and determined the appeal. The Apex Court was concerned about the criticism from academic journals as to the Position held by the Court in this regard especially with the principle enunciated in UDE v. UWARA.
The IBRAHIM v. OBAJE (Supra) decision thus presented a rare opportunity for the court to vary the law. The appellant was challenging the concurrent findings of the two lower courts on the grounds that the transaction upon which the respondent relied on for claiming title to land was void since the instrument used to consummate the transaction was incapable of such alienation, therefore the concurrent findings of the lower court was wrong in law and should be set aside. The appellant’s further contended that the power of attorney relied upon albeit improper for the purpose equally lacked the Governor’ consent contrary to Section 22 of the Land Use Act, having not been registered. The Supreme Court in its lead Judgment per Ogunbiyi JSC (Rtd) departed from the settled position of the law. The Court in displaying this age-long position carefully described the case as an exception to the general rule to allow room for the fulfillment of the intention of the parties to an agreement. It is the writer’s submission that from the tenor of the judgment, the court did not just create an exception but outrightly overruled the prevalent position, albeit it’s strenuous attempt to label it an exception. The implication, in the writer’s opinion, is the same and far reaching. The raison d’etre for the decision can be deduced at page 36-37 thus:
“ it is not the intendment of the legislature that Section 22 of the Land Use Act, consent would limit and deny parties of their right to use and enjoy land and the fruits thereof in a non-contentious transaction or alienation. The section cannot be given a literal interpretation as would be seen from the preamble. The preambles to the LAND USE ACT, if looked at carefully and relating it to the case at hand, would reveal that the provision for consent of the Governor must not be applied to transfer title or alienation of rights between private individuals where there is no overriding public interest or conflict between the parties. The application of the various sections and provisions of the land Use Act must be done with a view to the intendments of the drafters of the law, which is expressed often in the preamble.
This position lends credence to the position canvassed in the survey earlier referenced. To bolster this point, the Supreme Court relegated the consent clause as stipulated in Section 22 of the Land Use Act as mere technicality in the law, which should not defeat the intention of the parties transaction in whatever instrument they deem fit as long as there is a meeting of the mind. The Court described the principle in reaching the decision as considering “ the true import of the document” as contained in the recital to the instrument irrespective of the nomenclature. The inspiration of this decision was drawn from the preamble to the Act and its interpretation in the earlier decision in ABIOYE v. YAKUBU per Karibi-Whyte JSC where the Court held that the essence of the Act is to preserve and protect the right of Nigerians to enjoy and use land and further enjoy the fruit of the land without inhibitions. It is imperative to quickly state that the Supreme Court had earlier tamed the tyranny of Governor’s consent under the Land Use Act in SAVANNAH BANK v. AJILO by giving it an alternative interpretation given its inchoate label, saving land security from disaster in the commercial sector.
This decision (IBRAHIM v. OBAJE) will certainly elicit several perspectives. It is a welcomed development for real estate practitioners it will greatly ease transactions by abridging the unnecessary formalities in perfecting title to land and using same for bankable transactions. On the other hand, the consistency of our laws as a common law jurisdiction which pride itself on judicial precedents becomes questionable; especially, when the reasons adduced departs from its settled position, is arguably not founded on strong legal basis to create the kind of unpredictability it would attract.