LEGAL PRINCIPLE: CIVIL PROCEDURE — Agency — Power of Attorney — Construction — Authority to Institute Legal Proceedings
PRINCIPLE STATEMENT
A power of attorney authorising the donee "to act in all matters relating to" the donor's shareholding necessarily includes the authority to take all necessary steps, including legal action, to protect the donor's interest.
RATIO DECIDENDI (SOURCE)
Per Ogundare, JSC, in Melwani v. Five Star Industries Ltd (2002) NLC-151994(SC) at pp. 9–10; Paras C–A.
"I, the undersigned, Arjandas Hiranand Melwani residing in Hong Kong in my capacity of shareholder of Five Star Industries Ltd. Lagos hereby appoint Mr. Lateph Akingbade Adeniji of Lagos (Nigeria) to act as my attorney and as such to act for and on my behalf in all matters relating to my shareholding in Five Star Industries Ltd. Lagos." This authority must necessarily include taking all steps, legal action inclusive, that were necessary to protect plaintiff's shareholding in the company."
EXPLANATION / SCOPE
A power of attorney granting authority “to act in all matters relating to” the donor’s property includes the power to institute legal proceedings. The authority is broad and covers necessary steps to protect the donor’s interest. The principle applies to shareholding, land, and other property. The donee need not have express mention of legal proceedings. The court interprets the power of attorney according to its terms. The rule ensures that agents can effectively protect the principal’s interests. The donee must act within the scope of authority. The third party dealing with the donee is entitled to rely on the power. The principle promotes efficient management of property by agents.
