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Powers of Attorney (Amendment) Bill
Following is a speech by the Attorney General, Mr Jeremy Mathews, in moving the second reading of the Powers of Attorney (Amendment) Bill 1996 in the Legislative Council today (Wednesday):
time.
I move that the Powers of Attorney (Amendment) Bill 1996 be read a second
The purpose of this Bill is to introduce a uniform definition of mental incapacity, which will be applicable to any purpose relating to a power of attorney.
Mental capacity is a crucial issue in relation to powers of attorney for two main reasons. First, the person granting a power of attorney ("the donor") must possess the requisite capacity at the time he or she creates the power. Secondly, the subsequent onset of mental incapacity in the donor has the effect of revoking the attorney's authority to act on behalf of the donor under the power. That principle would not apply to enduring powers of attorney that could be made if the Enduring Powers of Attorney Bill is enacted, but it would still apply to ordinary powers of attorney.
Much difficulty and confusion has resulted from the fact that there are different tests to determine, on the one hand, whether a donor was mentally capable of creating a valid power of attorney and, on the other, whether the donor's mental capacity had subsequently declined to the point that his attorney was no longer permitted to act for him.
The present position is that, while it is sufficient for the creation of a valid power that the donor should understand the nature and effect of the power, the power can no longer be validly exercised once the donor loses the capacity to manage his property and affairs. The second of these tests of mental capacity is more stringent than the first.
The Bill proposes to eliminate this difference, and the uncertainty it causes, by adopting a single definition which is applicable for all purposes. The proposal is in line with a recommendation of the English Law Commission and is generally supported by the legal profession and other interested organisations.
The new definition is contained in clause 2 of the Bill. This provides that a person is regarded as suffering from mental incapacity for any purpose relating to a power of attorney in two situations. The first is where he or she is suffering from mental disorder and is either unable to understand the effect of a power of attorney or is unable, because of that disorder, to make a decision to grant such a power. The second situation is where a person is unable to communicate an intention or wish to grant a power of attorney.