COTA SA response to the draft Powers of Attorney Bill (2016).

Recently COTA SA was asked to comment on the draft Powers of Attorney Bill (2016). This is our response.

We acknowledge the work of Martin Lewis and Graham Southern in the preparation of this response.


15 April 2016

The Hon John Rau
Deputy Premier
Government of SA
GPO Box 464

Dear Attorney-General

Thank you for inviting COTA SA to comment on the Powers of Attorney Bill (2016). COTA SA congratulates the Attorney on proposing reforms to the financial powers of attorney, an important area of law.

Following consultation with members and other stakeholders, we are pleased to provide feedback according to the areas of focus outlined in your letter -

a) ensuring that they make these arrangements of their own free will

This is largely achieved by ensuring that the Power of Attorney (PoA) is executed by the donor voluntarily in the presence of a witness who certifies that the donor understood the nature and effect of giving the power at the time of signing. (Clauses 8 and 9)

We support the definition of mental capacity covered in Clause 4 and particularly support the qualification of incapacity outlined in Clause 4(2).

We would like to see an explicit relationship between this legislation and an Advance Care Directive (ACD). Where an ACD exists it should form an important part of the guide to the wishes of the donor. Therefore we would like to see a more formal recognition of the ACD in this bill to enforce its stated aim of respecting the wishes and preferences of the donor and ensuring that the donee respects the ACD.

Otherwise we support the principles outlined in Clause 7 including the need to consider the current needs and wishes of the done as far as is reasonably practicable.

We believe this aim is achieved in the draft bill.

b) preventing these arrangements being used to exploit or abuse people whose decision-making capacity has become impaired

Clause 8 (5) defines who "a donor cannot be" and the conditions of appointment. Likewise the powers and obligations of the Attorney are clearly defined.

We would generally see these clauses as adequate to protect the interests of the Donor and they are strengthened by clauses covering False and Misleading Statements, Fraud and Undue Influence, Confidentiality and Victimisation.

However while the intent of Clause 11 to provide that a donor "under an enduring power of attorney may appoint a person (including the Public Advocate) as manager with the function of overseeing the exercise of powers by the donee" is supported, our members raised concerns that it may end up being ineffective and add complexity without delivering benefit.

The following sub-clauses provide for actions relative to the relationship between the Donor, the donee and the Manager:

(2) "The donor must provide the manager with a copy of the power of attorney specifying the appointment, but a failure to do so will not invalidate the appointment."

(3) "The power of attorney may require the donee to notify the manager of the donee's intention to take the following action (which notification must occur no later than the prescribed number of days before taking such action) ..."

(4) "A failure by a donee to notify a manager as required under subsection (3) does not invalidate the exercise of the power or the transaction."

Clearly, the intent of the clause is to provide for the appointment of a manager to oversee the actions of the donee to protect the interests of the donor by supervision.

However, the manager's position is weakened as there is no firm requirement to provide the manager with a copy of the power of attorney.

In addition, if the donee fails to notify the manager of the specified transactions, those transactions will proceed as valid transactions. Thus, the semblance of oversight in negated.

Further, there does not appear to be any remedy or penalty arising from the failure of the donee to notify the manager of the specified transactions and nor is there any penalty for the manager should they fail to exercise their responsibilities in the donor's best interests.

Thus Clause 11 may add a level of complication for the donor without providing the intended benefit. It adds requirements for action that, if not taken, will proceed as if the clause did not exist and so, in its present form, Clause 11 may waste both time and an opportunity to enhance protection.

c) punishing those who abuse a position of trust to coerce a vulnerable person to appoint them as a financial representative or who use their appointment for their own benefit rather than for the benefit of the vulnerable person

COTA SA supports the importance of both mechanisms to prosecute and the availability of adequate penalties for breaches of the Act.

d) improving and simplifying procedures for resolving disputes about such arrangements

COTA SA supports the provisions of Part 7 where authority is given to the South Australian Civil and Administrative Tribunal to resolve most of the matters that come into question about the operation and effect of a Power of Attorney.

Again we congratulate you for tackling this very important area of law reform. We trust that our feedback assists you in achieving the very proper aims you outline in your letter as your objectives for the Powers of Attorney Bill 2016.

Yours sincerely

Jane Mussared
Chief Executive

Download a copy of the response to the draft Powers of Attorney Bill (2016).