HL Deb 17 December 1984 vol 458 cc437-44
The Lord Chancellor (Lord Hailsham of Saint Marylebone)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD WELLS-PESTELL in the Chair.]

Clause 1 agreed to.

Clause 2 [Characteristics of an enduring power.]:

Lord Mishcon moved Amendment No. 1: Page 3, line 17, leave out ("he") and insert ("the donor").

The noble Lord said: On the Second Reading of this Bill a general welcome was given to the Bill by all sections of the House, because it was realised that in the present circumstances someone who becomes mentally unstable and unable to look after his or her affairs must have a remedy open to him or her in regard to his or her affairs at the Court of Protection. It is an informal procedure and the officers of that court behave with great kindliness, and have done so for a long period of time. But the formalities that have to be observed and the expense involved obviously make it an unnecessary procedure if an alternative procedure can be envisaged. Of course, the Bill aims to do just that. In those circumstances, but with due protection, the Bill seeks to offer as a remedy the giving of an enduring power of attorney, subject, as I have said, to various protective measures which are laid down in the Bill.

I have used those opening words only because they have a relevance to this first amendment. In regard to the amendments to which I shall speak, I have the privilege of saying that they have the full support of the Law Society. Indeed, in large measure, they are the initiative of the Law Society which, as usual, has received every consideration from the Lord Chancellor's Department in discussions on this Bill.

One of the provisions contained in Clause 2 deals with the question of the validity of the enduring power and says that it will not be an effective power if the attorney who is appointed has not attained the age of 18. Noble Lords may think that that is a very acceptable and sensible provision, but the Bill does not say when the proposed attorney has to attain the age of 18. It would seem from the reading of the Bill that the relevant date is the date when it is executed by the attorney. Does that mean that the donor of the power can execute the power and then the young attorney, if he happens to be 17 and a bit, can wait until he is 18 before he executes it, and then, and only then, the power of attorney becomes an enforceable, valid power of attorney? Surely the relevant date is not the date that the young attorney chooses; it must be the date when the donor of the power executes the power of attorney. If then the attorney is 18 years old, it is a valid power; and if he is not 18 years old, it is not a valid power.

Therefore, the amendment purely seeks to say that the relevant date for dealing with the validity of an enduring power of attorney ought to be the date of the execution of the power by the donor, and as to whether at that date the proposed attorney had attained the age of 18 years. I beg to move.

The Lord Chancellor

I am grateful to the Law Society for raising this question and to the noble Lord, Lord Mishcon, for ventilating it in the Committee. As the noble Lord has told the Committee, as drafted, the Bill allows the donor the power to appoint an attorney who is a minor, provided, but only provided, the attorney does not execute the instrument before he reaches the age of 18. That is not an oversight on the part of the draftsman. As I say, I am grateful to the Law Society for drawing attention to the fact, but what they have not done is to show why the present draft is objectionable. I have, of course, referred this question back to the Law Commission and to my own department, and neither can see why it should be objectionable, provided the minor executes the instrument after he has attained the age of 18.

It may very well be in the donor's interest to appoint an attorney as young as possible, particularly if the power is not to come into force until many years later, and the donor may wish to appoint one or more of his children as his attorney, particularly if they are nearing the age of 18. So far as we can see, there are no good legal or policy reasons why he should be denied this right and there is no danger to the donor in making such an appointment. If the donor's mental capacity supervenes at any time before the attorney executes the instrument, it would of course have the effect of revoking any ordinary power already in existence and preventing the creation of an enduring power. It is not possible for the power to be a valid enduring power unless and until both the donor and the proposed attorney have executed it. Clause 2(7)(a) makes it clear that when he executes the instrument the proposed attorney must have attained the age of 18.

There is probably an unintentional danger in the amendment, as drafted, because it allows the possibility of a bankrupt attorney to represent the donor. The proposed attorney could be solvent when the donor executes the instrument but bankrupt when executing it himself. This matter has been referred back to the Law Commission, with the result that I have sought to explain. I would respectfully suggest that, grateful as we are for the opportunity to discuss the matter, the draft as it exists is the better alternative of the two.

Lord Mishcon

I am sure that the Committee is most grateful to the noble and learned Lord for elucidating this matter. I have brought it before the Committee at the wish of the Law Society and I believe that the Committee will probably be more satisfied with the noble and learned Lord's answer than they were with my amendment. I therefore crave leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mishcon moved Amendment No. 2: Page 3, line 25, leave out from ("successor") to end of line 25 and insert ("shall only be valid as an enduring power so long as the attorney originally appointed by the donor himself acts as such attorney.")

The noble Lord said: Again I wish to raise a short point, if I may try to put it clearly. In the Bill there is a provision which this amendment seeks to deal with, which says that if you have an enduring power and that enduring power contains a provision that the attorney may have a substitute or an alternative, then the enduring power is void and nothing about it can be done because it is a void instrument ab initio. What this amendment seeks to do is to say this: there is surely no reason why the enduring power should cease to have any validity at all merely because this provision has slipped into it, as it were. It is quite effective as an ordinary power of attorney, and those of us who have to deal with these matters know that it is quite a normal provision in some powers of attorney to have the right to appoint a substitute and to delegate it that way.

We therefore say that we accept completely that an enduring power of attorney should not contain within it the ability for the power to go on as an effective instrument if indeed the original donor of the power is not carrying out his duties because he is no longer there able to do it. Therefore we say that it is not void ab initio, but, if I may turn to the wording of the amendment, it, shall only be valid as an enduring power so long as"— and if I may interpolate these words: only so long as— the attorney originally appointed by the donor himself acts as such attorney". That would prevent some provision which is put in, possibly accidentally, stopping the enduring power of attorney from being effective at all even while the original donor was acting perfectly properly under it. I beg to move.

The Lord Chancellor

This is again a matter in regard to which I am grateful to the noble Lord, Lord Mishcon, for ventilating. It involves a slightly more technical and possibly a slightly longer reply on my part. It is not easy to explain this in words of one syllable, but I shall try to be as simple as I can.

Under the Bill as drafted Clause 2(9) provides that a power of attorney which gives the attorney a right to appoint a substitute or successor cannot be an enduring power of attorney. The effect of the amendment, if passed, would be that such a power of attorney could be an enduring power but only so long as the attorney originally appointed acted in person. Once he attempted to appoint a substitute or successor the enduring power would cease to be valid.

I have now to make a short discursion on the existing law apart from the Bill. Under the existing law on powers of attorney an instrument in which the donor appoints an attorney but himself nominates substitutes or successors in his place is valid. Such an instrument, however, will not create a valid enduring power under the Bill, since Clause 11(1) provides that an instrument which appoints more than one person to be an attorney cannot create an enduring power unless the attorneys are appointed to act jointly, or jointly and severally.

Under the existing law it is not clear whether an instrument which gives an attorney the right to appoint a substitute or a successor—that is to delegate as it were, or to substitute somebody else for himself—can be valid. That is not clear under the existing law. But the Law Commission were quite clear that, whatever the position might turn out to be in relation to ordinary powers, such an instrument should not create a valid enduring power. It would strike at the special relationship of trust which must subsist between the donor and the attorney.

Moreover, since the substitute or successor attorney might be appointed after the donor had become mentally incapable, the donor would not be in a position to object to the person chosen by the attorney as his substitute or successor, though he might well have objected had he been in full possession of his mental faculties.

The amendment does not strike at this fundamental objection, but only seeks to validate an instrument which allows the attorney to appoint a substitute or successor so long as that right has not been exercised. However, the Law Commission on this, as on the previous amendment, were consulted and when consulted they were concerned that if the policy behind the amendment were adopted, the attorney could register the instrument, so creating the enduring power, and then appoint a substitute or successor, or purport to do so. The donor would be in no position to do anything about this, and the Court of Protection could not do so either because they probably would not get to know about its having been done.

There is also another danger, and that danger would be that third parties might deal with the substitute or successor in the belief that the power was still a valid enduring power. The Commission therefore thought it preferable to retain Clause 2(9) in its present form so as to prevent an instrument from ever being registered and so creating an enduring power. For those reasons, expressing again my gratitude for this rather esoteric point having been ventilated in Parliament, I stand by the Bill in its present drafted form.

Lord Denning

I hope your Lordships will not accept this amendment. It is contrary to principle that an attorney should himself appoint a successor. It is the donor of the power who appoints him. The right way to deal with any instrument such as this which purports to give him power to appoint, etc., is to say that it is completely invalid. It cannot be an excluding power.

Lord Mishcon

It was an esoteric point. It was, I hope, dealt with in ordinary English and with due simplicity and clarity, certainly by the noble and learned Lord. I turn, with the deference with which I always do, to the noble and learned Lord, Lord Denning, and would point out to him that it was not a question of the attorney having this right alone; it was a matter for the donor as well having this right which would vitiate the question of the enduring power of attorney under this Bill. However, the matter has been ventilated. Obviously I respect the reaction of the Law Commission to this matter, and I think it would be wrong for me to try to press the point. I have brought it before the Committee. I now ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 agreed to.

Clause 4 [Duties of attorney in event of actual or impending incapacity of donor]:

3.30 p.m.

Lord Mishcon moved Amendment No. 3: Page 5, line 8, leave out subsection (7).

The noble Lord said: Again a simple principle is involved with which I hope I can deal in proper simplicity. It is objectionable as a general principle that one duplicates criminal offences. In other words, if a criminal offence exists under statute, and it is already clearly there, it is objectionable to repeat that offence in another Act because this only leads to confusion.

My respectful submission is one which no doubt will be opposed by the noble and learned Lord, and if it is opposed, and opposed with reason, I shall immediately pursue the same course that I have pursued so far in regard to withdrawing the amendment. I am dealing at this moment with Clause 4, subsection (7), on page 5. That reads, as your Lordships will see: Any person who, in an application for registration, makes a statement which he knows to be false in a material particular shall be liable—on conviction on indictment"— and there the punishments are set forth, and on summary conviction"— and there, again, the punishment is set forth.

It is the opinion of the Law Society that the existing criminal law covers all these reprehensible actions; and indeed more reprehensible actions than are dealt with in this particular subsection which a naughty attorney might get up to. In particular Section 15 of the Theft Act would undoubtedly apply to such acts of dishonesty and it is in these circumstances, and only with this principle in mind, that I move the amendment to delete this subsection as being unnecessary, since it is already covered, in my respectful submission, by existing law. I beg to move.

Lord Denning

May I say that I have a good deal of sympathy with this amendment. Not only is it covered by the Theft Act but Section 5 of the Perjury Act 1911 deals expressly with false statements which are made in a document of a statutory nature which are required to be executed by statute. But there the offence is "knowingly and wilfully" making a mistake in a material particular. In other words, the wilfulness is an essential ingredient apart from the knowing. In Archbold's Pleading, Evidence and Practice, in referring to this Section 5 of the Perjury Act 1911, the form in which this section is cast has led to a subsequent proliferation of statutory offences related to making false statements.

The difficulty with the clause as it is is that it refers to something done "knowingly", whereas the report of the Law Commission deals with offences of dishonesty committed by the attorney. I suggest that the dishonest aspect of it could come in with the word "wilfully", as in the Perjury Act, or with the simpler words "with intent to defraud or deceive". In other words, this makes a criminal offence of just knowingly making a false statement in a material particular. I am not sure that to cover dishonesty, which the Law Commission wants, you ought not to have "with intent to defraud or deceive" or the "wilfully" of the Perjury Act. In other words, I do not like this criminal offence going so far as it does.

The Lord Chancellor

I would accept the premise of the argument presented by the noble Lord, Lord Mishcon, at once. There was a medieval philosopher called Occam who invented a saying called "the razor" which said, Entia non sunt multiplicanda praeter necessitatem". That means in relation to criminal offences, "Don't make more than you have to". Therefore, I start with the presumption that the premise of Lord Mishcon's argument is correct. It is also correct that there are cases which would be affected by the criminal offence which would be created by the Bill as drafted under subsection (7) of Clause 4 which would be covered by Section 15 of the Theft Act 1968. I have not myself considered Section 5 of the Perjury Act 1911, and I will therefore consider it between now and Report without expressing a concluded opinion upon whether that would or would not apply to the present case. At present I have some doubts in the matter but I would not venture to put my opinion in front of that or my noble and learned friend on the Cross Benches. I will therefore consider that further.

But Section 15 of the Theft Act 1968, which was the section referred to by the noble Lord, Lord Mishcon, does not cover the situation where the attorney makes a false statement while having no intention of depriving the donor of property. It is of course accepted, as I have indicated, that Section 15 will deal with attorneys who dishonestly appropriate the donor's property after registration but it does not deal with attorneys who make dishonest statements which might affect the attitude of the court of protection towards registration. The main purpose of the registration is to protect the donor, and it is for this purpose essential that the statements which are made to the court of protection are correct. It is not at all unusual for there to be a criminal sanction with regard to dishonest statements when people make official applications, as this is, in other areas of the criminal law, as for instance applications for a passport, or driving licence applications.

Moreover, the criminal offence as drafted in Clause 4(7) is not particularly wide. To attract the criminal sanction the statement must be false in a material particular and the maker of it must know that it is false when he makes it. Because the requirements of the offence are so strict there is therefore no danger that a person who innocently makes a statement which is false, particularly a statement on an unimportant matter, will be caught by the offence. It is considered better to have the chance to deal with the dishonest attorney at the point of registration rather than wait and see until he actually dishonestly appropriates the donor's property after the instrument has been registered.

Therefore, on the whole, recognising that there are things to be said in favour certainly of the premise of the argument founded by the noble Lord, Lord Mishcon, I would have stuck to the text as drafted because it is essential to support the court of protection and therefore to put a sanction behind the honesty of the statement, at the moment of registration, rather than at the moment of deprivation. For that reason I would have stuck to the text as drafted. As I say, I will consider the point of the noble and learned Lord, Lord Denning, and write to him if necessary; or we can have a further discussion on Report.

Lord Mishcon

I am grateful to both noble and learned Lords. The point raised by the noble and learned Lord, Lord Denning, is certainly worthy of examination. I tried to cover it in my own way by saying that in this regard there were existing provisions in the criminal law, but the noble and learned Lord, Lord Denning, went into it in greater detail, referring to the Perjury Act.

The noble and learned Lord the Lord Chancellor has agreed to look into the matter. Therefore, I ask him, if I may, for the courtesy of sending to me a copy of any letter he sends to the noble and learned Lord, Lord Denning. I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Lord Chancellor

I beg to move that the House be now resumed for the purpose of repeating the Statement.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.