INSTRUMENTS (ENDURING POWERS OF ATTORNEY) BILL 2003 Explanatory Memoranda
INSTRUMENTS (ENDURING POWERS OF ATTORNEY) BILL 2003
Instruments (Enduring Powers of Attorney) Bill
Victorian Legislation and Parliamentary Documents
Circulation Print
EXPLANATORY MEMORANDUM
Clause Notes
Clause 1 provides that the purpose of the Bill is to amend the Instruments
Act 1958 to revise the laws relating to enduring powers of
attorney.
Clause 2 provides for the commencement of the Bill on a date to be
proclaimed. If the Bill is not proclaimed to come into operation
before 1 July 2004, then it will come into operation on that day.
Clause 3 amends Part XI of the Instruments Act 1958 to repeal the
definitions of "enduring power of attorney" and "Public Trustee"
in section 104; repeals sections 114 to 118; and provides that
Part XI will no longer apply to enduring powers of attorney,
unless expressly provided in the new Part XIA.
Clause 4 inserts a new Part XIA to cover specifically enduring powers of
attorney:
Division 1 inserts definitions applying to Part XIA.
Division 2 specifies how to make an enduring power of
attorney--
· new section 115 inserts a definition of an enduring
power of attorney--where an adult person (the donor)
gives one or more persons (the attorneys) legal authority
to make financial and legal decisions on the donor's
behalf, and where this power continues to be valid even
when the donor subsequently loses legal capacity.
A donor may also specify how they want the attorney(s)
to carry out their responsibilities to the donor by placing
special conditions and issue instructions about the
exercise of the power.
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551078 BILL LA CIRCULATION 29/8/2003
· recognises enduring powers of attorney validly made in
other States and Territories as if the power had been
made under, and in compliance with, new Part XIA and
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with the extent of the powers limited to the powers
given under the new Part XIA. (see section 116)
· provides that a donor may now specify in the enduring
power of attorney form when a power is to commence,
and where the time of commencement is not specified
then the power becomes exercisable immediately on
completion of the document. (see section 117)
· provides in new section 118 that a donor can only make
an enduring power of attorney while they have capacity,
that is, while they understand the nature and effect of
the enduring power. Sub-section (2) includes a test for
legal capacity which requires an understanding of the
nature and effect of the enduring power of attorney
including understanding the following--
· that the donor may place conditions and
limitations on, and give instructions about, the
exercise of the power to be given to the attorney;
· when the power becomes exercisable;
· that once the power becomes exercisable, the
attorney has the same powers as the donor,
subject to any restrictions or limitations specified
in the enduring power of attorney;
· that the donor may revoke or withdraw the power
at any time while the donor retains the capacity
to do so;
· that the power continues even if the donor
subsequently ceases to have capacity;
· that when the donor becomes incapable of
revoking the power then the attorney can operate
without supervision by the donor.
· a note at the end of section 118 advises a witness to
make a written record of any evidence that shows that
the donor understands these matters. This is
recommended in particular where there may be some
doubt in the future as to the donor's capacity at the time
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of signing, and as the Act will require witnesses to
certify that the donor signed freely and voluntarily and
appeared to have the necessary capacity.
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· provides that a donor may appoint either one or more
attorneys who must be at least 18 years of age, and
distinguishes between attorneys appointed "jointly" and
"jointly and severally". (see section 119)
· where attorneys are appointed "jointly" then the
attorneys can only act if they all agree, and any
documents must be signed by all of them;
· where attorneys are appointed "jointly and
severally" then they can act either jointly, or any
of the attorneys can act and sign the documents
together or alone.
· provides for the appointment of an alternative attorney
in the event of the death, absence or legal incapacity of
the original attorney. (see section 120)
· specifies that a person who is insolvent cannot be
appointed as an enduring attorney. (see section 121)
· provides that a member of a religious order may appoint
the person who is the head of that Victorian order or the
head of the local chapter of that order in Victoria as
their enduring attorney, and subsequently that the
person who from time to time fulfils that position of
head of the order will be deemed to be the attorney
under the enduring power of attorney. (see section 122)
· specifies the formal requirements for making an
enduring power of attorney (see section 123)--
· an enduring power of attorney must be in, or to
the like effect of, the approved form (where
approved forms are specified under
section 125ZL);
· an enduring power of attorney must be signed
either by the donor or under the direction of the
donor by an eligible person;
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· an enduring power of attorney must be signed
and dated by 2 adult witnesses in the presence of
the donor and each other;
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· the witnesses must be as specified under
section 125 which provides--
· a witness cannot be the donor, or the
person appointed as attorney;
· only one of the witnesses can be a relative
of the donor or of the attorney;
· one of the witnesses must be a person
authorised to witness the signing of
statutory declarations;
· the enduring power of attorney must contain a
certificate signed by each witness in accordance
with section 125A, namely that--
· the donor signed freely and voluntarily in
the presence of the witness; and
· at the time, the donor appeared to the
witness to have the capacity necessary to
make the enduring power of attorney;
· where a person signs on behalf of the
donor, that the donor directed the person
to sign, and that the donor gave that
direction freely and voluntarily in the
presence of the witness and that the donor
appeared to have the necessary capacity.
· specifies a new requirement that the attorney must sign
and date a statement of acceptance of the enduring
power of attorney, and that the statement of acceptance
must be in, or to the like effect of, the approved form.
(see section 125B) The statement of acceptance must
either be endorsed on the enduring power of attorney
document or else attached to the enduring document,
and it must include an undertaking by the attorney to--
· exercise the powers given under the enduring
power of attorney with reasonable diligence to
protect the interests of the donor;
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· avoid acting where there is any conflict of
interest between the donor and the attorney;
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· exercise the powers given in accordance with
Part XIA.
· provides that an enduring power of attorney that
complies with Division 2 is to be taken to be, and to
have the effect as, a deed even if it is not expressed to
be executed under seal. (see section 125C)
Division 3 sets out the role of an attorney--
· specifies that an attorney must keep and preserve
accurate records and accounts of all dealings and
transactions made under the enduring power.
(see section 125D)
· provides that an attorney under an enduring power may
execute an instrument under the attorney's own
signature and do any other thing in the attorney's own
name which will be as effective as if it were executed or
done by the donor. Any instrument executed or thing
done by the attorney must clearly show that the attorney
does so on behalf of the donor. (see section 125E)
· specifies that an enduring power of attorney does not
authorise the attorney to make decisions about the
medical treatment of the donor, and that where a
decision made by a guardian or enduring guardian
appointed under the Guardianship and
Administration Act 1986 conflicts with a decision by
an enduring attorney then the decision of the guardian
or enduring guardian will prevail. (see section 125F)
· specifies that where the Tribunal makes an
administration order under the Guardianship and
Administration Act 1986 in respect of the donor then
the attorney may only exercise the enduring power to
the extent authorised by the Tribunal.
(see section 125G)
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Division 4 provides how an enduring power of attorney may be
revoked--
·
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by the donor (see sections 125I to 125K);
· according to the terms of the document or
instrument (see section 125L);
· by the attorney (see sections 125M to 125P);
· by the Tribunal (see section 126Q and
Division 6);
· the effect of revocation where more than one
attorney appointed (see section 125R).
· specifies that Division 4 does not provide an exhaustive
list of how a power of attorney can be revoked either
orally or in writing or in any other way or where it is
terminated by implication or operation of law.
(see section 125H) (It should be noted that an enduring
power of attorney can be revoked in the same way that a
power of attorney can be revoked.)
· the ways in which the donor may revoke a power
include--
· by telling the attorney their power is withdrawn;
· by destroying the document and any copies;
· in writing; for example, by written notification or
by completing the approved form;
· where there is inconsistency between earlier and
later appointments of attorneys, with the later
power revoking the earlier power to the extent of
the inconsistency; for example, where the donor
appoints a later attorney to have exclusively the
same powers as an earlier attorney;
· with the death of the donor;
Division 5 provides for protection from liability for an attorney
or third persons--
· section 125T provides that where an attorney acts in
compliance with advice, directions or recommendations
of the Court or the Tribunal then the attorney will be
deemed to have complied with Part XIA unless the
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attorney knowingly gave false or misleading
information relevant to the advice, directions or
recommendations made by the Court or the Tribunal.
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· provides that where an attorney acts in good faith
without knowing a power is invalid, then the attorney
will be able to rely on the power despite its invalidity as
against the donor or any other person; and a person who
in good faith and without knowing a power is invalid
acts in reliance on the exercise of the power by an
attorney is entitled to rely on the power despite its
invalidity. (see section 125U)
Division 6 extends the jurisdiction of the Tribunal (without
limiting the powers of the Supreme Court) in relation to matters
involving enduring powers of attorney including--
· the power to make declarations, orders, directions,
recommendations or advice. For example, the Tribunal
will now be enabled to make a declaration to declare an
EPA to be invalid on the grounds that the donor did not
meet the criteria of the test for competency specified in
the legislation at the time the document was created.
· providing for re-hearings of orders in certain
circumstances thereby establishing an internal review
system at the Tribunal. For example, the Tribunal in the
first instance makes an order to suspend an EPA in
circumstances where an urgent decision appears
necessary to protect the interests of the donor.
Subsequently, further information in relation to the
application is made available which should also be
considered by the Tribunal, in light of its original
decision. Subdivision 2 provides that applications for
re-hearings may be made by persons entitled to be
notified of the original application for that order.
(see sections 125ZC to 125ZF)
Division 7 is a general division which--
· sets out a procedure whereby an enduring power of
attorney may be proved by a copy of an enduring power
of attorney where each page of the copy, apart from the
last page, must be certified to the effect that the copy is
a true and complete copy of the corresponding page of
the original, and where the last page of the copy must be
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certified that the copy is a true and complete copy of the
original. (see section 125ZG)
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· lists those persons who can certify a copy of an
enduring power of attorney. (see section 125ZH)
· provides that where a copy of an enduring power of
attorney has been certified in accordance with sections
125ZG and 125ZH then that certified copy may also be
proved by the procedure set out under those sections; so
that it certifies that it is a true and complete copy of a
certified copy of the original. (see section 125ZI)
· provides that this procedure for proving an enduring
power of attorney does not prevent an enduring power
of attorney from being proved in any other way.
(see section 125ZJ)
· specifies that where it is required for a document under
Part XIA to be in an approved form, then it is sufficient
if the document is to the like effect of the approved
form. It also provides that the Secretary may approve
forms and, where approved, forms must be published in
the Government Gazette. (see section 125ZL)
· provides for a regulation making power.
(see section 125ZM)
Division 8 provides for transitional provisions as follows--
· an enduring power of attorney, made under Part XI of
the Instruments Act 1958 and existing immediately
before the commencement of this new Part XIA, has
effect as if it were made under Division 2 of Part XIA.
(see section 125ZN)
· provides that new section 116, which recognises an
enduring power of attorney made in another State or
Territory, will also apply to an enduring power of
attorney made before or after the commencement of this
new Part XIA. (see section 125ZO)
· provides for the continuation of provisions for protected
persons existing prior to the commencement of this new
Part XIA. (see section 125ZP)
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Clause 5 repeals Schedule 13 which contains the form of enduring power
of attorney for the purpose of Part XI. This Schedule is no longer
required as new Part XIA now provides for enduring powers of
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attorney and contains an approval procedure for forms.
Clause 6 inserts a new clause 40F in Part 12 of Schedule 1 to the
Victorian Civil and Administrative Tribunal Act 1998 which
specifies that the constitution of the Tribunal for the purposes of
a re-hearing under Sub-division 2 of Division 6 of Part XIA is as
follows (it should be noted that for the purposes of Part XIA for
any proceeding, including a re-hearing, the Tribunal must be
constituted by at least one member who is a legal practitioner as
provided under section 64 of the Victorian Civil and
Administrative Tribunal Act 1998)--
· a senior member or a presidential member must preside
over any re-hearing where in the first instance an order
was made by an ordinary member of the Tribunal;
· a presidential member must preside over any re-hearing
where in the first instance an order was made by a
senior member;
· a judicial member must preside over any re-hearing
where in the first instance an order was made by a
Deputy President;
· a Vice-President must preside over any re-hearing
where in the first instance an order was made by more
than one member (except where one or more members
was a Vice-President);
· the President must preside over any re-hearing where in
the first instance an order was made by a Vice-President
(whether with or without others);
Clause 7 amends Part 12 of Schedule 1 to the Victorian Civil and
Administrative Tribunal Act 1998 to delete any reference to
old section 118 (which limited the powers of the Tribunal to
revoke an enduring power only where it was in the best interests
of the donor) and to replace it with a reference to Division 6 of
Part XIA (which extends the jurisdiction of the Tribunal so that
its powers are concurrent with the Supreme Court in relation to
matters involving enduring powers of attorney).
Clause 8 repeals section 86(2) of the Guardianship and Administration
Act 1986 as a similar provision is now inserted by
section 125F(2) in the Part XIA.
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