Power of Attorney

The attorney is being given very broad powers to act in the name of the principal. The document empowering the attorney to act is called a power of attorney and is the written authority to do anything that the principal may lawfully authorise an attorney to do. If the attorney needs to know what they can or cannot do under the power of attorney, they should seek advice from the principal's lawyer. The attorney can apply to the Supreme Court or the Guardianship Tribunal for advice or directions about the scope of the appointment or the exercise of any function under the power.

If there is more than one attorney, and they are appointed to act jointly, then the attorneys must always act together. They cannot act independently of each other. If attorneys are appointed "jointly and severally" then they may use the power without reference to one another.

Whilst ever the principal has mental capacity, the attorney must always obey the lawful instructions that the principal gives the attorney. The power to act can be taken from the attorney by the principal, even verbally. If the attorney is told to deliver up the copy of the power of attorney document, for its destruction, the attorney is obliged by law to do so.

A power of attorney may be given to the attorney in contemplation that a time may come when the principal loses mental capacity, perhaps because of illness or accident. In those cases the power endures and the attorney can use it to look after the financial affairs of the principal during the period of incapacity. The attorney cannot make health care or lifestyle decisions for the principal unless the attorney has also been appointed as an "enduring guardian", and formally accepted that role.

The attorney has many duties, including the duty to manage the finances of the principal prudently. The attorney must keep their own money and property separate from the principal's money and property (unless the attorney and the principal are joint owners, or operate joint accounts). The attorney must keep reasonable accounts and records of the principal's money and property. The attorney must take care of the principal's property and keep it safe against loss. The attorney must not abuse the position of trust. The attorney cannot profit at the expense of the principal. The attorney must avoid conflict between the duty to the principal and their own interests. The duty is to act to the standard of care that may reasonably be expected of the attorney in all the circumstances.

The attorney has no right to be remunerated for their services unless it is agreed, expressly or by implication that the attorney will be paid by the principal. However, when the attorney acts correctly, the attorney is entitled to be indemnified by the principal and reimbursed for all expenses that the attorney reasonably incurs in acting for the principal. A professional adviser who acts as an attorney has the right to be paid reasonable fees for services rendered. If the attorney volunteers their services as attorney, meaning that the attorney is not paid to act, then the law does not require the attorney to do anything under the power of attorney if the attorney decides not to act.

If the power of attorney is to be used to sign a document which is to be registered with the Department of Lands then the power of attorney itself must first be registered with the Department. This can be done at any time after it has been signed and accepted.

The principal can terminate the power at any time so long as he or she has mental capacity. Equally, the attorney can end the attorneyship by renouncing it. An enduring power of attorney does not end when the principal loses mental capacity, as is the case with an ordinary power of attorney. If the power of attorney appoints two or more persons as "joint" attorneys, the power of attorney is terminated if the office of one or more of the attorneys becomes vacant. But if the principal appoints two or more persons as attorneys "jointly and severally", a vacancy in the office of one or more attorneys does not operate to terminate the power of attorney in relation to the other attorneys.

There is a vacancy in the office of an attorney if -

1. the appointment of the attorney is revoked or,
2. the attorney renounces the power, or
3. the attorney dies, or
4. the attorney becomes bankrupt, or
5. where the attorney is a corporation, the corporation is dissolved, or
6. the attorney by reason of any physical or mental incapacity, ceases to have the capacity to continue to act as an attorney, or
7. in such circumstances as the legislature may prescribe in the future.

If an attorney acts under a power of attorney knowing that it is suspended or terminated, the attorney is liable for a maximum penalty of 5 years' imprisonment.

The Supreme Court or the Guardianship Tribunal may review a power of attorney and can cancel it, remove an attorney from office, replace an attorney, order an attorney to furnish accounts or other information, order an audit, or require an attorney to submit a plan of financial management.