Dyson Ruth: Protection of Personal and Property Rights  Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Dyson Ruth: Protection of Personal and Property Rights  Amendment Bill — Second Reading 
[Sitting date: 11 September 2007. Volume:642;Page:11750. Text is incorporated into the Bound Volume.] 
Hon RUTH DYSON (Minister for Senior Citizens) 
: 
 I move  
That the Protection of Personal and Property Rights Amendment Bill be now read a second time 
. This bill improves the protections for vulnerable people in Part 9 of the Protection of Personal and Property Rights Act 1988. Part 9 allows people to complete enduring powers of attorney so that in the event that they lose mental capacity from whatever cause someone can continue to make decisions on their behalf. There are two kinds of enduring power of attorney—a personal care and welfare enduring power of attorney and an enduring power of attorney for property affairs. 
I begin my contribution to this second reading debate by expressing my appreciation to the Social Services Committee for the thorough and comprehensive consideration it has given to the bill and the careful thought that members have given to changes that will improve it. 
Part 9 of the Act is a very important measure for New Zealand’s ageing population in particular. The use of an enduring power of attorney that it provides for is a voluntary self-help measure that enables people themselves to arrange for someone else to make decisions on their behalf should they at some point in their future lives be unable to make them. The alternative that is provided for in other parts of the Act is for the courts to appoint someone to make those decisions. It is best for people to nominate and appoint someone they know and trust as their attorney. 
It is an unfortunate fact of life that not all decisions made by attorneys under enduring powers of attorney are made in the best interests of the person who has given that attorney. It is an even more unfortunate fact of life that some of the worst cases of abuse of enduring powers of attorney involve family members who have sought to benefit themselves rather than the person who appointed them as the donor. Although Part 9 of the Act works very well for the majority of people it does not have sufficient protection against attorneys who have mischief on their minds and who manipulate situations to their advantage or make decisions without being held accountable. 
So the bill sets out to do several things. Firstly it sets out to enable people to draw up enduring powers of attorney in such a way as to prevent problems from arising if and when their enduring power of attorney is activated. A key change is to the process for establishing enduring powers of attorney which will prevent coercion misrepresentation or undue influence of the person concerned particularly when that person is frail or unwell. This will require that the person’s signature on the enduring power of attorney must be witnessed either by a lawyer retained independently from the attorney or by an authorised officer of a trustee corporation. The witness must certify that he or she has explained to the person the effects and implications of the enduring power of attorney and other matters including the person’s right to revoke or suspend the enduring power of attorney and to specify monitoring arrangements. The witness must also certify that there is no reason to believe that the donor is mentally incapable. 
I agree with the select committee that the advice and witnessing provisions should be extended to appropriately trained and experienced legal executives who actually undertake much of this work in legal practices. Our Government believes that these measures will give people making enduring powers of attorney much more control over the way they are managed. The measures will also make it more difficult for attorneys to get people to sign enduring powers of attorney for the benefit of the attorney’s interests rather than the interests of the donor. 
The second area addressed by the bill is to provide the process and procedural changes that address specific problem areas such as consistency in the practices of activating enduring powers of attorney decision making and gifting arrangements. Most of the provisions in the bill are dedicated to these changes. The bill provides a clear statement of the purpose of Part 9—an element missing from the original legislation. It also makes it explicit that the obligations of an attorney are to act in a way that promotes and protects the best interests of the donor. 
For people who are losing capacity and to a lesser extent for those who act for them the transition of responsibility from donor to attorney is a very important one. The bill addresses and strengthens this process through three measures. Firstly donors of enduring powers of attorney are presumed to be mentally competent until established otherwise. Secondly a clear and consistent threshold is provided for the activation of a personal care and welfare enduring power of attorney when the person loses capacity. The threshold is measured against the person’s capacity to make or understand individual decisions rather than being a once-and-for-all activation. This change recognises that some medical conditions do not mean that a person loses capacity to make all decisions relating to his or her personal care and welfare all of the time. 
Thirdly the bill provides a clear process for activating an attorney’s authority to act under an enduring power of attorney. For significant personal care and welfare matters and for enduring powers of attorney relating to property affairs activation is based on a certificate by an appropriate health professional stating that a person is mentally incapable. The bill recognises that in some cases a health professional other than a medical practitioner may be an appropriate person. 
The bill also promotes the empowerment of donors by requiring the attorney as far as is practicable to consult the donor and any persons specified by the donor in the enduring power of attorney. The attorney is also required to encourage the donor to act for himself or herself and otherwise to involve the donor in decision making to the maximum extent of his or her capability. 
I accept the select committee’s recommendations in respect of clarifying when a medical certificate of incapacity is required for an attorney to act on significant personal care and welfare matters. This will relieve an attorney from the need to produce further medical certificates where the donor is certified to have a health condition that will continue indefinitely or for a specified period. Where an attorney is acting on behalf of the donor he or she will be required to provide information on the exercise of his or her powers to any person or persons specified in the enduring power of attorney. This is an important measure not just for maintaining the integrity of the decision making by attorneys but also for reducing the opportunity for the management of an enduring power of attorney to become a matter of discord amongst family members. 
The extra step recommended by the select committee of requiring property attorneys to keep records of the financial transactions they have made on behalf of a donor will provide transparency of the attorney’s actions. The limitation the bill places on the powers that attorneys currently have to benefit themselves and others will reduce the opportunity for abuse. The extent to which attorneys should be able to benefit themselves and make gifts or loans to people other than the donor are matters that people should consider when they are drawing up an enduring power of attorney. They should not be left to the discretion of the attorney as is currently the case. The new provision in the bill that allows the donor to suspend an attorney’s power to act recognises situations where the person might have recovered the capacity to act on his or her own behalf—for example when he or she has recovered from a severe head injury. 
The remaining area the bill targets is that of improving the opportunities for redress when attorneys misuse their representation and responsibilities. This is done by extending the range of people who can apply as of right to the Family Court for the review of an attorney’s actions. At present any person other than the donor can do so only with the leave of the court. I agree with the select committee’s recommendation that this right be extended to Elder Abuse and Neglect Prevention services. This freeing up of access to the Family Court will be of considerable help to such services. Frequently they have difficulty dealing with abuse arising from enduring powers of attorneys involving family members as attorneys. 
The enduring powers of attorney provisions of the Protection of Personal and Property Rights Amendment Bill represents a very important measure available to all New Zealanders not just older New Zealanders. The possibility that New Zealanders may lose capacity to make decisions for themselves either through disease or injury is a reality of life. This bill will give people and older people in particular greater confidence that enduring powers of attorney will work in their favour. It will provide more emphasis on drawing up enduring powers of attorney in a format that suits personal and family circumstances and provides processes that are sound and that back older people’s wishes. It also ensures if all else fails that the actions of the attorney can be more easily scrutinised by the Family Court. 
I expect that this bill will open up the way for many more people to draw up enduring powers of attorneys to safeguard themselves against future events. It is a very sensible and a prudent measure for New Zealanders to take not just for those in or approaching retirement. The changes that are outlined will when the bill is passed take 12 months to come into effect. In that 12-month period further work will be required to redraft the enduring powers of attorney forms and guidelines and other certificates to be set out in regulations. I look forward to the passing of this bill to the implementation of the changes and to the impetus the changes will give to enduring powers of attorney in New Zealand. This bill will allow for greater protection for the most vulnerable in our society.