Mental Capacity Bill

House of Commons

Session 2004 - 05
Internet Publications
Other Bills before Parliament

Mental Capacity Bill

Mental Capacity Bill
Schedule 4 — Provisions applying to existing enduring powers of attorney
Part 4 — Registration
56

(b)
the powers conferred on the deputy would, if the instrument were
registered, to any extent conflict with the powers conferred on the
attorney,

the Public Guardian must not register the instrument except in accordance
with the court’s directions.
5
      (3)
The court may, on the application of the attorney, direct the Public Guardian
to register an instrument even though notice has not been given as required
by paragraph 4(3) and Part 3 of this Schedule to a person entitled to receive
it, if the court is satisfied—
(a)
that it was undesirable or impracticable for the attorney to give
10
notice to that person, or
(b)
that no useful purpose is likely to be served by giving him notice.
      (4)
Sub-paragraph (5) applies if, before the end of the period of 5 weeks
beginning with the date (or the latest date) on which the attorney gave notice
under paragraph 5 of an application for registration, the Public Guardian
15
receives a valid notice of objection to the registration from a person entitled
to notice of the application.
      (5)
The Public Guardian must not register the instrument except in accordance
with the court’s directions.
      (6)
Sub-paragraph (7) applies if, in the case of an application for registration—
20
(a)
it appears from the application that there is no one to whom notice
has been given under paragraph 5, or
(b)
the Public Guardian has reason to believe that appropriate inquiries
might bring to light evidence on which he could be satisfied that one
of the grounds of objection set out in sub-paragraph (9) was
25
established.
      (7)
The Public Guardian—
(a)
must not register the instrument, and
(b)
must undertake such inquiries as he thinks appropriate in all the
circumstances.
30
      (8)
If, having complied with sub-paragraph (7)(b), the Public Guardian is
satisfied that one of the grounds of objection set out in sub-paragraph (9) is
established—
(a)
the attorney may apply to the court for directions, and
(b)
the Public Guardian must not register the instrument except in
35
accordance with the court’s directions.
      (9)
A notice of objection under this paragraph is valid if made on one or more
of the following grounds—
(a)
that the power purported to have been created by the instrument
was not valid as an enduring power of attorney,
40
(b)
that the power created by the instrument no longer subsists,
(c)
that the application is premature because the donor is not yet
becoming mentally incapable,
(d)
that fraud or undue pressure was used to induce the donor to create
the power,
45
(e)
that, having regard to all the circumstances and in particular the
attorney’s relationship to or connection with the donor, the attorney
is unsuitable to be the donor’s attorney.

Mental Capacity Bill
Schedule 4 — Provisions applying to existing enduring powers of attorney
Part 5 — Legal position after registration
57

     (10)
If any of those grounds is established to the satisfaction of the court it must
direct the Public Guardian not to register the instrument, but if not so
satisfied it must direct its registration.
     (11)
If the court directs the Public Guardian not to register an instrument because
it is satisfied that the ground in sub-paragraph (9)(d) or (e) is established, it
5
must by order revoke the power created by the instrument.
     (12)
If the court directs the Public Guardian not to register an instrument because
it is satisfied that any ground in sub-paragraph (9) except that in sub-
paragraph (9)(c) is established, the instrument must be delivered up to be
cancelled unless the court otherwise directs.
10
Register of enduring powers
14
The Public Guardian has the function of establishing and maintaining a
register of enduring powers for the purposes of this Schedule.
Part 5
Legal position after registration
15
Effect and proof of registration
15    (1)
The effect of the registration of an instrument under paragraph 13 is that—
(a)
no revocation of the power by the donor is valid unless and until the
court confirms the revocation under paragraph 16(3);
(b)
no disclaimer of the power is valid unless and until the attorney
20
gives notice of it to the Public Guardian;
(c)
the donor may not extend or restrict the scope of the authority
conferred by the instrument and no instruction or consent given by
him after registration, in the case of a consent, confers any right and,
in the case of an instruction, imposes or confers any obligation or
25
right on or creates any liability of the attorney or other persons
having notice of the instruction or consent.
      (2)
Sub-paragraph (1) applies for so long as the instrument is registered under
paragraph 13 whether or not the donor is for the time being mentally
incapable.
30
      (3)
A document purporting to be an office copy of an instrument registered
under this Schedule is, in any part of the United Kingdom, evidence of—
(a)
the contents of the instrument, and
(b)
the fact that it has been so registered.
      (4)
Sub-paragraph (3) is without prejudice to section 3 of the Powers of Attorney
35
Act 1971 (c. 27) (proof by certified copies) and to any other method of proof
authorised by law.
Functions of court with regard to registered power
16    (1)
Where an instrument has been registered under paragraph 13, the court has
the following functions with respect to the power and the donor of and the
40
attorney appointed to act under the power.
      (2)
The court may—
(a)
determine any question as to the meaning or effect of the instrument;

Mental Capacity Bill
Schedule 4 — Provisions applying to existing enduring powers of attorney
Part 5 — Legal position after registration
58

(b)
give directions with respect to—
(i)
the management or disposal by the attorney of the property
and affairs of the donor;
(ii)
the rendering of accounts by the attorney and the production
of the records kept by him for the purpose;
5
(iii)
the remuneration or expenses of the attorney whether or not
in default of or in accordance with any provision made by the
instrument, including directions for the repayment of
excessive or the payment of additional remuneration;
(c)
require the attorney to supply information or produce documents or
10
things in his possession as attorney;
(d)
give any consent or authorisation to act which the attorney would
have to obtain from a mentally capable donor;
(e)
authorise the attorney to act so as to benefit himself or other persons
than the donor otherwise than in accordance with paragraph 3(2)
15
and (3) (but subject to any conditions or restrictions contained in the
instrument);
(f)
relieve the attorney wholly or partly from any liability which he has
or may have incurred on account of a breach of his duties as attorney.
      (3)
On application made for the purpose by or on behalf of the donor, the court
20
must confirm the revocation of the power if satisfied that the donor—
(a)
has done whatever is necessary in law to effect an express revocation
of the power, and
(b)
was mentally capable of revoking a power of attorney when he did
so (whether or not he is so when the court considers the application).
25
      (4)
The court must direct the Public Guardian to cancel the registration of an
instrument registered under paragraph 13 in any of the following
circumstances—
(a)
on confirming the revocation of the power under sub-paragraph (3),
(b)
on directing under paragraph 2(9)(b) that the power is to be revoked,
30
(c)
on being satisfied that the donor is and is likely to remain mentally
capable,
(d)
on being satisfied that the power has expired or has been revoked by
the mental incapacity of the attorney,
(e)
on being satisfied that the power was not a valid and subsisting
35
enduring power when registration was effected,
(f)
on being satisfied that fraud or undue pressure was used to induce
the donor to create the power,
(g)
on being satisfied that, having regard to all the circumstances and in
particular the attorney’s relationship to or connection with the
40
donor, the attorney is unsuitable to be the donor’s attorney.
      (5)
If the court directs the Public Guardian to cancel the registration of an
instrument on being satisfied of the matters specified in sub-paragraph (4)(f)
or (g) it must by order revoke the power created by the instrument.
      (6)
If the court directs the cancellation of the registration of an instrument under
45
sub-paragraph (4) except paragraph (c) the instrument must be delivered up
to the Public Guardian to be cancelled, unless the court otherwise directs.

Mental Capacity Bill
Schedule 4 — Provisions applying to existing enduring powers of attorney
Part 6 — Protection of attorney and third parties
59

Cancellation of registration by Public Guardian
17
The Public Guardian must cancel the registration of an instrument creating
an enduring power of attorney—
(a)
on receipt of a disclaimer signed by the attorney;
(b)
if satisfied that the power has been revoked by the death or
5
bankruptcy of the donor or attorney or, if the attorney is a body
corporate, by its winding up or dissolution;
(c)
on receipt of notification from the court that the court has revoked
the power;
(d)
on confirmation from the court that the donor has revoked the
10
power.
Part 6
Protection of attorney and third parties
Protection of attorney and third persons where power is invalid or revoked
18    (1)
Sub-paragraphs (2) and (3) apply where an instrument which did not create
15
a valid power of attorney has been registered under paragraph 13 (whether
or not the registration has been cancelled at the time of the act or transaction
in question).
      (2)
An attorney who acts in pursuance of the power does not incur any liability
(either to the donor or to any other person) because of the non-existence of
20
the power unless at the time of acting he knows—
(a)
that the instrument did not create a valid enduring power,
(b)
that an event has occurred which, if the instrument had created a
valid enduring power, would have had the effect of revoking the
power, or
25
(c)
that, if the instrument had created a valid enduring power, the
power would have expired before that time.
      (3)
Any transaction between the attorney and another person is, in favour of
that person, as valid as if the power had then been in existence, unless at the
time of the transaction that person has knowledge of any of the matters
30
mentioned in sub-paragraph (2).
      (4)
If the interest of a purchaser depends on whether a transaction between the
attorney and another person was valid by virtue of sub-paragraph (3), it is
conclusively presumed in favour of the purchaser that the transaction was
valid if—
35
(a)
the transaction between that person and the attorney was completed
within 12 months of the date on which the instrument was
registered, or
(b)
that person makes a statutory declaration, before or within 3 months
after the completion of the purchase, that he had no reason at the
40
time of the transaction to doubt that the attorney had authority to
dispose of the property which was the subject of the transaction.
      (5)
For the purposes of section 5 of the Powers of Attorney Act 1971 (c. 27)
(protection where power is revoked) in its application to an enduring power
the revocation of which by the donor is by virtue of paragraph 15 invalid
45
unless and until confirmed by the court under paragraph 16—

Mental Capacity Bill
Schedule 4 — Provisions applying to existing enduring powers of attorney
Part 7 — Joint and joint and several attorneys
60

(a)
knowledge of the confirmation of the revocation is knowledge of the
revocation of the power, but
(b)
knowledge of the unconfirmed revocation is not.
Further protection of attorney and third persons
19    (1)
If—
5
(a)
an instrument framed in a form prescribed as mentioned in
paragraph 2(2) creates a power which is not a valid enduring power,
and
(b)
the power is revoked by the mental incapacity of the donor,

sub-paragraphs (2) and (3) apply, whether or not the instrument has been
10
registered.
      (2)
An attorney who acts in pursuance of the power does not, by reason of the
revocation, incur any liability (either to the donor or to any other person)
unless at the time of acting he knows—
(a)
that the instrument did not create a valid enduring power, and
15
(b)
that the donor has become mentally incapable.
      (3)
Any transaction between the attorney and another person is, in favour of
that person, as valid as if the power had then been in existence, unless at the
time of the transaction that person knows—
(a)
that the instrument did not create a valid enduring power, and
20
(b)
that the donor has become mentally incapable.
      (4)
Paragraph 18(4) applies for the purpose of determining whether a
transaction was valid by virtue of sub-paragraph (3) as it applies for the
purpose or determining whether a transaction was valid by virtue of
paragraph 18(3).
25
Part 7
Joint and joint and several attorneys
Application to joint and joint and several attorneys
20    (1)
An instrument which appoints more than one person to be an attorney
cannot create an enduring power unless the attorneys are appointed to act—
30
(a)
jointly, or
(b)
jointly and severally.
      (2)
This Schedule, in its application to joint attorneys, applies to them
collectively as it applies to a single attorney but subject to the modifications
specified in paragraph 21.
35
      (3)
This Schedule, in its application to joint and several attorneys, applies with
the modifications specified in sub-paragraphs (4) to (7) and in paragraph 22.
      (4)
A failure, as respects any one attorney, to comply with the requirements for
the creation of enduring powers—
(a)
prevents the instrument from creating such a power in his case, but
40
(b)
does not affect its efficacy for that purpose as respects the other or
others or its efficacy in his case for the purpose of creating a power
of attorney which is not an enduring power.

Mental Capacity Bill
Schedule 4 — Provisions applying to existing enduring powers of attorney
Part 7 — Joint and joint and several attorneys
61

      (5)
If one or more but not both or all the attorneys makes or joins in making an
application for registration of the instrument—
(a)
an attorney who is not an applicant as well as one who is may act
pending the registration of the instrument as provided in paragraph
1(2),
5
(b)
notice of the application must also be given under Part 3 of this
Schedule to the other attorney or attorneys, and
(c)
objection may validly be taken to the registration on a ground
relating to an attorney or to the power of an attorney who is not an
applicant as well as to one or the power of one who is an applicant.
10
      (6)
The Public Guardian is not precluded by paragraph 13(5) or (8) from
registering an instrument and the court must not direct him not to do so
under paragraph 13(10) if an enduring power subsists as respects some
attorney who is not affected by the ground or grounds of the objection in
question; and where the Public Guardian registers an instrument in that
15
case, he must make against the registration an entry in the prescribed form.
      (7)
Sub-paragraph (6) does not preclude the court from revoking a power in so
far as it confers a power on any other attorney in respect of whom the
ground in paragraph 13(9)(d) or (e) is established; and where any ground in
paragraph 13(9) affecting any other attorney is established the court must
20
direct the Public Guardian to make against the registration an entry in the
prescribed form.
      (8)
In sub-paragraph (4) “the requirements for the creation of enduring powers”
means the provisions of—
(a)
paragraph 2 other than sub-paragraphs (8) and (9), and
25
(b)
the regulations mentioned in paragraph 2.
Joint attorneys
21    (1)
In paragraph 2(5), the reference to the time when the attorney executes the
instrument is to be read as a reference to the time when the second or last
attorney executes the instrument.
30
      (2)
In paragraph 2(6) to (8), the reference to the attorney is to be read as a
reference to any attorney under the power.
      (3)
Paragraph 13 has effect as if the ground of objection to the registration of the
instrument specified in sub-paragraph (9)(e) applied to any attorney under
the power.
35
      (4)
In paragraph 16(2), references to the attorney are to be read as including
references to any attorney under the power.
      (5)
In paragraph 16(4), references to the attorney are to be read as including
references to any attorney under the power.
      (6)
In paragraph 17, references to the attorney are to be read as including
40
references to any attorney under the power.
Joint and several attorneys
22    (1)
In paragraph 2(7), the reference to the bankruptcy of the attorney is to be
read as a reference to the bankruptcy of the last remaining attorney under
the power; and the bankruptcy of any other attorney under the power causes
45
that person to cease to be an attorney under the power.

Mental Capacity Bill
Schedule 5 — Transitional provisions and savings
Part 1 — Repeal of Part 7 of the Mental Health Act 1983
62

      (2)
In paragraph 2(8), the reference to the suspension of the power is to be read
as a reference to its suspension in so far as it relates to the attorney in respect
of whom the interim bankruptcy restrictions order has effect.
      (3)
The restriction upon disclaimer imposed by paragraph 4(6) applies only to
those attorneys who have reason to believe that the donor is or is becoming
5
mentally incapable.
Part 8
Interpretation
23    (1)
In this Schedule—
“enduring power” is to be construed in accordance with paragraph 2,
10
“mentally incapable” or “mental incapacity”, except where it refers to
revocation at common law, means in relation to any person, that he
is incapable by reason of mental disorder (within the meaning of
the Mental Health Act) of managing and administering his
property and affairs and “mentally capable” and “mental capacity”
15
are to be construed accordingly,
“notice” means notice in writing, and
“prescribed”, except for the purposes of paragraph 2, means
prescribed by regulations made for the purposes of this Schedule by
the Lord Chancellor.
20
      (2)
Any question arising under or for the purposes of this Schedule as to what
the donor of the power might at any time be expected to do is to be
determined by assuming that he had full mental capacity at the time but
otherwise by reference to the circumstances existing at that time.
Schedule 5
25
Section 62(4)

Transitional provisions and savings
Part 1
Repeal of Part 7 of the Mental Health Act 1983
Existing receivers
1     (1)
This paragraph applies where, immediately before the commencement day,
30
there is a receiver (“R”) for a person (“P”) appointed under section 99 of the
Mental Health Act.
      (2)
On and after that day—
(a)
this Act applies as if R were a deputy appointed for P by the court,
but with the functions that R had as receiver immediately before that
35
day, and
(b)
a reference in any other enactment to a deputy appointed by the
court includes a person appointed as a deputy as a result of
paragraph (a).
      (3)
On any application to it by R, the court may end R’s appointment as P’s
40
deputy.