HL Deb 06 July 1987 vol 488 cc535-9

7.44 p.m.

Lord Lyell rose to move, That the draft order laid before the House on 6th April be approved.

The noble Lord said: My Lords, in moving this order, I hope that your Lordships will permit me to speak at the same time to the Enduring Powers of Attorney (Northern Ireland Consequential Amendment) Order 1987.

The two draft orders—the substantive Northern Ireland order and the consequential amendment order—are both based on the recommendations of the Law Commission's Report No. 122 entitled The Incapacitated Principal. The reason for this title will become evident to your Lordships as I proceed through my explanation of the orders before us. In doing so, both these orders closely correspond to the Enduring Powers of Attorney Act 1985 which relates to England and Wales.

As the law stands in Northern Ireland, a power of attorney automatically comes to an end if the donor becomes mentally incapable. As I am sure noble Lords will agree, however, that is the time when he (or possibly she, but for the purposes of the order before us this evening I shall continue in the masculine mode) most needs someone to manage his affairs. In such circumstances his relatives can apply to the office of care and protection in the High Court for the appointment of a controller.

However, noble Lords—and certainly the noble Lord, Lord Fitt-will be aware that that is a very formal and often expensive and somewhat cumbersome procedure. Accordingly, the Law Commission recommended that the law provide for a special kind of power of attorney known as the enduring power of attorney which would be capable of continuing beyond the donor's mental incapacity. The commission devised a detailed scheme with built-in safeguards for the donor, the attorney, and third parties dealing with the attorney. The scheme, which is closely followed in the substantive order provides a relatively informal means of managing a mentally incapacitated person's affairs without resorting to administration through the High Court. I draw attention at the bottom of page 3 to Article 4. This article sets out the characteristics of an enduring power of attorney. Unlike an ordinary power of attorney, an enduring power will be subject to certain requirements as to form and execution. It will be in a prescribed form, it will have to be executed both by the donor and the attorney and it will have to contain certain explanatory information making it plain to the donor the nature of the power he is creating.

The attorney has a duty under Article 6 to take steps to register the enduring power in the High Court as soon as he has reason to believe that the donor is mentally incapable of managing his affairs or that he is becoming so incapable. The attorney need not wait until the donor is totally incapable, but before applying to the High Court for the registration of the enduring power he must notify certain specified relatives as well as the donor himself, unless the court allows the attorney to dispense with such notices. Schedule 1 on page 14 gives an idea of some of the persons who might need to be notified, but this is not an exclusive list.

Once an enduring power is registered, the affairs of the donor are almost completely in the hands of the attorney, although the court has a supervisory role and may exercise certain functions in relation to the donor's affairs. These functions are set out in Article 10.

Thus far I have dealt mainly with the safeguards which the order provides for the donor, but the House will appreciate that it is important that third parties such as purchasers of the property of the donor should be able to deal with the attorney in good faith, confident in the knowledge that any such transactions would be effective and would not be liable simply to be set aside. Article 11 provides the necessary protection. It also protects the attorney who acts in good faith.

I go on briefly to the technical change in the order, as it was published as a proposal. Article 5(3) as it originally stood was in the same terms as Section 3(3) of the English 1985 Act, in that it enabled the attorney to assume all the donor's trust powers and give a valid receipt for capital money. Such a provision was necessary in English legislation primarily to cater for married co-owners to enable one spouse to act as attorney for the other and to deal effectively with the matrimonial home. This occurs because joint tenancies in England and Wales operate on the basis of statutory trusts for sale. But such a provision is not necessary in the current state of the law of property in Northern Ireland and its width was queried by some of those who commented on the proposals before us. The revised version in the order before us takes account of these comments.

In conclusion, I turn to the Northern Ireland consequential amendment order. The object of this amendment order is to amend Section 7(3) of the English 1985 Act, which provides for the reception of office copies of English registered enduring powers throughout the United Kingdom as evidence of their contents and also of the fact that they have been registered. The consequential amendment order extends this provision to office copies of Northern Ireland registered enduring powers. I beg to move.

Moved, That the draft order laid before the House on 6th April be approved.—(Lord Lyell).

Lord Prys-Davies

My Lords, the noble Lord, Lord Lyell, has once again given the House a comprehensive explanation of the provisions of the order and of its significance. The Enduring Powers of Attorney Act 1985 was welcomed in every corner of your Lordships' House when it was introduced in 1985. I am sure that relatives, friends and professional people who have charge of the property and affairs of elderly people in Northern Ireland will similarly welcome this important draft order.

The 1985 Act was not only well received in your Lordships' House, but it has been very well received in England and Wales. It has been extensively used. Clearly the concept of an enduring power of attorney—in other words a power of attorney that will endure in spite of the supervening mental incapacity of the donor of the power—has met a very real need. I welcome the draft order.

The Minister has explained what the order will achieve, but it will have to be read in due course in conjunction with the important regulations which are yet to be issued by the department. I confine myself for a minute or two to the order. I note that it reproduces all the sections of the 1985 Act apart from Section 3(3), which the noble Lord, Lord Lyell, has referred to, and also Section 2(6). As far as I can see it does not reproduce Section 2(6). The subsection reads: Where an instrument differs in an immaterial respect in form or mode of expression from the prescribed form the instrument shall be treated as sufficient in point of form and expression". That is a valuable saving provision. I may have missed this provision in the draft order, but, unless I have missed it, can the Minister explain why this has been omitted from the draft order? It is extremely important that the power when executed should be in the prescribed form as laid down by the regulations. But the power may not follow the prescribed form in some immaterial respect. In that event would the power be valid in Northern Ireland?

The noble Lord, Lord Lyell, has explained the significance of Article 5(3). I was fascinated by his explanation. I am sure that it must be acceptable to the people of Northern Ireland.

The order refers in a number of articles to the regulations to be made by the department. I should mention to the House that experience over the last 18 months has shown that the regulations which were made under the 1985 Act are by now seen to be in need of provision. A number of practical difficulties or uncertainties have been encountered. These have been the subject of two very important articles by Mr. P.D. Lewis, an Assistant Public Trustee, published in the Law Society Gazette. They are well worth reading. Some points have been the subject of a hearing before the Master, but I am not aware of a hearing before a judge of the Court of Protection.

I do not propose to detail the almost two dozen points of uncertainty and difficulty arising out of the regulations, but we want an assurance from the Minister that the regulations to be made by the Northern Ireland Office will incorporate all the lessons that have been learned in England and Wales since the regulations were made under the terms of the 1985 Act. With those few comments, I heartily approve the order.

Lord Hampton

My Lords, we are again on technical lawyers' ground and I do not propose to argue at length on a subject in which I am not qualified. I wish to raise one matter on which I am not quite clear but which interests me for personal reasons. It relates to Article 5(4). This enables someone who has enduring powers of attorney to look after his own interest if it is in line with what the donor might be expected to do or have done. If the donor is suffering from mental disability, who will, where reasonable, contest any such procedure for him or her? Subject to this point, I support the two orders.

8 p.m.

Lord Lyell

My Lords, I should like to thank the two noble Lords who have spoken. The noble Lord, Lord Prys-Davies, raised a number of points. He was kind enough to give me some indication of what might be in his mind on this measure so at least I had some warning. The noble Lord asked about Articles 5(3) and 3(3) in England and Wales. I hope that I covered that first query in my opening remarks.

The noble Lord also said that he was a little worried about the provision corresponding to Section 2(6) of the 1985 Act in England and Wales, which I am given to understand allows for immaterial departures from the prescribed form. I think the noble Lord, Lord Prys-Davies, the noble Lord, Lord Hampton, and, I believe, the noble Lord, Lord Fitt, will agree with me that we should leave this definition of immaterial departures et alia to the lawyers. I am advised that this point is already covered in the general provision, which may be in umbrella form, of Section 21 of the Interpretation Act (Northern Ireland) 1954. This allows for variations in statutory forms.

The noble Lord, Lord Prys-Davies, also inquired about the regulations. We are studying very carefully the form of the regulations, which, naturally, have yet to be made for Northern Ireland. We shall take account of the experience of the measures in England and Wales and indeed of the points made by the noble Lord. He has been merciful and has not raised 24 points with me this evening but I am sure that those 24 points will be known to my office and we shall certainly take notice of them. The noble Lord will be gratified that the order was generally welcomed when we had consultation around Northern Ireland. Two of the main bodies which welcomed the order were the Law Society of Northern Ireland and the General Consumer Society for Northern Ireland.

The noble Lord, Lord Hampton, although not a lawyer, courageously ventured into Article 5(4) dealing with the power which enabled the attorney to benefit himself or others without the consent of the donor to the extent that he—the attorney—acts as the donor might have acted or does what the donor might have been expected to do to meet the attorney's or any other person's needs. I hope that that goes some way to assisting the curiosity and concern of the noble Lord, Lord Hampton. However, I give this proviso. Provided the attorney acts within the limits of paragraph (4) as set out in Article 5, he does not need the consent of the court to any action which he may take. Article 5(4) spells out what the attorney might wish to do. The third line of paragraph 4 says, (without obtaining any consent) act under the power so as to benefit himself or other persons … to the following extent but no further". Subparagraphs (a) and (b) would give reasonable grounds for the attorney to act either as the donor would have been expected to act himself or as he, the donor, might have expected his attorney to have acted, given that the donor would have recognised that he would not be able to take action of the type which we are discussing this evening. Article 5(4) gives reasonable grounds to the attorney to act in accordance with the apparent wishes of the donor; and watching over all of his activities there is still the court. That is a fairly long-term hypothesis and goes a good way beyond what the noble Lord, Lord Hampton, had in mind.

I hope that I have covered the noble Lord's point. I salute him for his courage in venturing into something of a legal area. If I have not covered it totally tonight, I shall amplify as necessary in writing, with, I hope, clarity and brevity. I trust that I have covered all the queries on the order. I am immensely grateful to noble Lords who have spoken on the three orders.

On Question, Motion agreed to.