Protection of Personal and Property Rights Amendment Bill

Hon RUTH DYSON (Minister for Senior Citizens) Link to this

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.

JUDITH COLLINS (National—Clevedon) Link to this

As deputy chair of the Social Services Committee, it is my privilege to be able to speak in favour of the Protection of Personal and Property Rights Amendment Bill. I would like to thank the Minister Ruth Dyson for acknowledging the work the select committee has done, because many Ministers acknowledge the work of the select committees only when it is in their favour.

In this particular case, having had the experience of being a lawyer for about 20 years, and having drafted many powers of attorney—in particular, enduring powers of attorney, acting on estates, and dealing with people who were, in some cases, in need of care—I found that these amendments were very appropriate, especially those relating to persons who can witness an enduring power of attorney. I was pleased to note that after about 19 years of enduring powers of attorney being available, experienced legal executives who are members of the New Zealand Institute of Legal Executives will be able to witness the documents. That is simply a sign of the times, because in the days when enduring powers of attorney first came in, I do not actually recall that legal executives—except for certain legal executives whom the Land Transfer Office, as it was, allowed—were able to witness an awful lot of documents.

The provision relating to the independence of witnesses is a sensible one. The law will make sure that witnesses must be independent, in terms of that witnessing. That is extremely important.

The provisions for certification of medical incapacity, and for decisions made by attorneys on reasonable grounds, are sensible, as is the requirement for attorneys to keep financial records.

One of the interesting aspects of this whole concept of enduring power of attorney is that the system was brought in to deal with the reality that many people who had given powers of attorney back in the 1980s, and earlier, had actually lost the capacity to give powers of attorney and therefore to maintain their relationship with the person to whom they had given power of attorney. In other words, they had lost mental capacity.

What happened in the legal profession was that quite a lot of people were working under powers of attorney from their parents, even though those parents had lost mental capacity. Effectively, the only way around it was, in many cases, to go to court constantly to get permission to do things and to make decisions for the benefit of the parent. That was one of the situations that had to be remedied, so it was.

Since then, we have had instances of children, in particular, who have abused their power of attorney. We have seen instances where people who have given an enduring power of attorney then want to change their minds. As the enduring power of attorney does not have quite the same flexibility as a normal power of attorney, it is important that we recognise that difficulty and try to put it right.

As the Minister correctly said, some very disturbing instances of elder abuse can be perpetuated, or certainly result from, the misuse of an enduring power of attorney. Our elderly—in particular, those who have lost mental capacity—are extremely vulnerable and extremely liable to abuse if we do not exercise these duties in a very, very caring and responsible way. As a lawyer brought in to look at a particular situation, I have seen this misuse at first hand. The situation was one whereby a lawyer actually allowed someone to misuse a power of attorney.

I think that the way we are addressing these issues with this bill is sensible. No doubt, in the next 20 years we will have to look at the matter again.

In summary, this bill is one that will have to be amended from time to time over the years. I hope we will be able to do that in the very sensible and sensitive way in which the committee has dealt with it this time.

RUSSELL FAIRBROTHER (Labour) Link to this

It is my pleasure to follow the previous speaker, who was the deputy chair of the Social Services Committee. I assumed the chairmanship midway through the consideration of the Protection of Personal and Property Rights Amendment Bill, and I agree with Judith Collins when she said she did not doubt that this amendment would need to be looked at again in the next 20 years. The reason I agree with her is that this amendment bill is amazingly important legislation. It is a bill that people may pick up and, when they see “enduring powers of attorney” and “protection of personal and property rights”, tend to yawn. But in my view, it is more important legislation than that relating to wills, because when one sets a will the circumstances under which the will becomes operative are crystal clear: the person is dead, and his or her wishes have to be carried out entirely by the administrators of the will. With an enduring power of attorney, the situation is a lot more complex, because the person is always alive and he or she may be in different states of capacity. To operate a power of attorney requires finesse and flexibility, so that there is an even flow between the wishes of the donor and of the person who holds the power of attorney. For a lawyer or the holder of a power of attorney this is a difficult area to operate in, just as it is a difficult area for a donor to operate in when making the decisions.

There are many, many parts of this bill that I would like to speak to tonight, but in the time available to me I want to move to the provisions in new section 93B, inserted by clause 6. Those are the presumption of competence provisions that build on the amendments to the principal Act set out in clause 7. The provisions inserted by clause 7 move away from the stage when all those who were unwell or incapacitated became institutionalised. In today’s world, people are institutionalised only in very rare circumstances. The amendments in clause 7 bring the law up to date and deal with people in rest home care, in hospital care, and in facilities within the meaning of the Health and Disability Services (Safety) Act 2001.

I come back to the presumption of competence. The amendments proposed in this bill are based on the assumption that the donor’s wishes are the rational wishes of the donor, even though those wishes may seem to be at odds with what the person who is operating the power of attorney would do. Of course, that is probably the most significant difference between the administrator of a deceased’s estate and the administrator of a living person who has limited capacity. So we see that new section 93B(1), inserted by clause 6, states: “For the purposes of this Part, every person is presumed, until the contrary is shown,—(a) to be competent to manage his or her own affairs in relation to his or her property: (b) to have the capacity—(i) to understand the nature of decisions about matters relating to his or her personal care and welfare; and (ii) to foresee the consequences of decisions about matters relating to his or her personal care and welfare or of any failure to make such decisions; and (iii) to communicate decisions about those matters.” New subsection (2) states: “A person must not be presumed to lack the competence described in subsection (1)(a) just because the person manages or intends to manage his or her own affairs in relation to his or her property in a manner that a person exercising ordinary prudence would not adopt in the same circumstances.”

There are further developments of that thought in subsections (3) and (4) of new section 93B. Subsection (4), particularly, deals with mental health patients, and it makes it quite clear that “just because the person is subject to compulsory treatment or has special patient status under the Mental Health (Compulsory Assessment and Treatment) Act 1992”, that does not take away the presumption of competence. I am familiar with a number of people who are subject to mental health orders and who need interventions in their mental health, but the interventions are limited to stabilising their health and they are otherwise capable of making rational and clear decisions.

This is an amendment for the year 2007. It is in keeping with current thought in this area, and it reflects the importance of the power of attorney. Powers of attorney are not matters to be taken for granted either when they are signed or when they are executed, and they do reflect the wishes of a living person. I am delighted that in this amending legislation we have a very clear statement of the presumption of competence, which allows people to do many things in different ways and in their own ways that are peculiar to those people, even though an objective observer may disagree and may not think they are entirely prudent. That is the way of the world, that is the way that people choose to live their lives, and that is the way that should be reflected if people come under the ambit of the enduring power of attorney legislation.

So I think this bill is enlightened legislation, which brings the role of powers of attorney, as I say, into the 21st century. I look forward to the fact that it may be amended fairly regularly hereafter, as we become more and more enlightened about the situation of older people and mentally disabled people in our community.

KATRINA SHANKS (National) Link to this

As well as the people who have spoken before me, it is my pleasure to support this Protection of Personal and Property Rights Amendment Bill tonight. It went through the Social Services Committee, which I am a member of, and it had support all the way through by the whole committee. I must commend the officials for the great work they did and the support that they gave us through the process, because they really were quite invaluable. At the same time, I would also like to recognise the Law Commission, which gave an absolutely fantastic submission on this legislation, guided us through the process, had a really good input into it, and added a lot of value to this bill we are looking at tonight.

This bill actually came about as a result of recommendations made by the Law Commission in 2001 in a report published on the misuse of enduring powers of attorney, so once again I congratulate the Law Commission on ensuring that enduring powers of attorney have been updated with this legislation for those who are using it from now going forward. The purpose of this bill is to increase the safeguards against the abuse of elderly and disabled people. By law, the enduring power of attorney allows people to be representatives on someone’s behalf because that person is no longer able to do so.

Some of the key points coming out of this good legislation are about legal executives. Legal executives came to the select committee and gave a fantastic submission—it was very, very articulate and well-written—saying that they feel they should be able to witness a donor’s signature to help reduce the cost of the enduring powers of attorney for those who were getting them. It was a very good submission that they gave. By the end of it the committee came out with the conclusion that, yes, legal executives should be recognised but on certain conditions—those who have 12 months’ experience, who are registered as a legal executive, and who are supervised by a lawyer will be able to witness a donor’s signature. So that is a good thing and it will help to keep the cost of the enduring powers of attorney down. These legal executives do a great job, they are very much hands-on with their clients, and they are in tune with what their clients need because they talk to them very regularly, so this is a good step forward.

One of the other changes that came about was that lawyers in the same firm can witness an enduring power of attorney signature. This was brought about to also ensure that the cost of enduring powers of attorneys were kept down and this will again add value to the process, as they were not allowed to do so before.

The other change is the need for medical certificates. Medical certificates are not needed to make decisions on matters of personal care and welfare that are not considered significant. This allows the holder of the enduring power of attorney or the lawyer to make insignificant decisions for an individual, and not have to go back and get a medical certificate every time they go to do something they consider to be minor and insignificant for the client. The bill does require that an attorney be satisfied that the donor is mentally incapable when making decisions on significant matters, and it was very important that we made the distinction between significant matters and insignificant matters in this point of law.

The donor has to pay for medical examinations that are reasonably required for the purposes of certifying the donor’s mental incapacity. We put that provision in there to say that if one has an enduring power of attorney and the lawyer is hunting around for someone who can be the certifier of the donor’s incapability, then he or she has to pay those medical expenses only once and after that the lawyer would have to pay for the rest. So it is to stop people from hunting around and trying to find someone to be the certifier.

Another adjustment to this bill is that where a donor is unlikely to gain capacity, a medical certificate can remain valid indefinitely. So for those people who are incapacitated, who are not going to get better, and have got deteriorating conditions, a medical certificate can be valid for them ongoing as obviously this could be very, very expensive for the client, and this also ensures that the process works smoothly.

The final thing I would like to raise is that attorneys must keep records of all financial transactions in relation to donors’ finances. It has been noted in the past that lawyers have done transactions on behalf of clients and not kept the records, which I find a little hard to believe because lawyers are normally very good at keeping records and understand tax law very well. I would assume they would keep them for 7 years, but this has not been happening and this legislation will change that, as well. So now lawyers will be required to keep all financial transactions for their own clients.

It is my pleasure to stand here tonight and endorse this good legislation that the select committee has worked on, and I also congratulate the officials and the committee and all the submitters themselves on adding value to this process.

BARBARA STEWART (NZ First) Link to this

I rise on behalf of New Zealand First to support the Protection of Personal and Property Rights Amendment Bill. I must say that New Zealand First has always acted very strongly in defence of the vulnerable within society. We have a great record of implementing policies and legislation that relate to the most vulnerable in society, and particularly to the elderly. So we are very pleased with this bill

KEITH LOCKE (Green) Link to this

The Green Party supports the Protection of Personal and Property Rights Amendment Bill and we generally support the comments that other speakers have made. My colleague Sue Bradford was on the Social Services Committee and found the discussion very interesting.

It is important to recognise that unless we make the sophisticated amendments proposed in the bill, rights can be taken away from people because some of those seeking power of attorney might be a bit paternalistic or power-hungry, in some respects. That can be a problem. Sometimes—as other speakers have alluded to—there can be eccentricities in a person, and some might define that person as not being in full control of his or her faculties so they might wish to take the power off him or her, for one reason or another. That is not a good course of action. The presumption of innocence and all the hoops that have to be gone through—medical retests, and all the rest of it—are important in controlling that situation.

The other factor that can sometimes come in is just straight-out greed. People often want to get control of other people’s affairs for their own pecuniary interests. It does not happen with great frequency in society, but it is this sort of thing that we want good systems to control against. This bill helps to provide those systems, so the Green Party will be supporting it. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Tēnā koe, Mr Deputy Speaker. Kia ora tātou katoa i tēnei pō. Few bills that come before the House reflect as perfectly our desire to live according to kaupapa handed down by our ancestors as the Protection of Personal and Property Rights Amendment Bill. This bill is ultimately about enhancing the protection and promotion of the personal and property rights of people who find themselves in a vulnerable position. In its provisions to strengthen the legislation, we see this bill as an awesome opportunity to apply kaupapa tuku iho—that is, those values that provide for the well-being of all. Uppermost in the bill’s intentions is the capacity for manaakitanga—the opportunity to create an environment where the personal care and welfare of others is important.

The bill makes explicit the obligation of the attorney to act in the donor’s best interests. By way of some sort of explanation, manaakitanga is behaviour that acknowledges the mana of others as having equal or greater importance than one’s own. We know that an enduring power of attorney must be established before it is required, before a person becomes incapacitated. We would expect from this requirement that people are able to choose someone they can implicitly trust to act in their interests.

The opportunity to appoint someone with an enduring power of attorney to make decisions on one’s behalf is an expression of rangatiratanga. What is rangatiratanga? The concept of rangatiratanga equates to oversight, responsibility, authority, control, and sovereignty. The onus, therefore, in ensuring that this legislation has validity is to ensure that, regardless of any provision to create an enduring power of attorney, the attorney has an obligation to encourage the donor to exercise his or her own competence. This bill establishes that as a requirement.

In the most basic of terms, the idea of getting someone to sign cheques on our behalf to deal with all our accounts, policies, and possessions that have meaning in our life is, I would think, a pretty scary prospect. The responsibility of signing over one’s enduring power of attorney is, therefore, a massive milestone in one’s life. In the Māori Party, we understand this best through making that ultimate connection to this concept of rangatiratanga—in other words, to respect the capacity for self-determination by Māori, which is in keeping with the rights defined by mana atua, mana tūpuna, and mana whenua. Within Māori world views, we believe that the concepts of cultural resilience, of spiritual and ancestral dimensions, and of genealogical importance—concepts such as these—are best addressed by the whānau.

This issue is of very personal relevance to our whānau, having recently lost my sister Hine about 2 weeks ago. Towards the end of my sister’s life her health was compromised as she battled with the effects of not one stroke but three of them. Over these last few years we cared for my sister at our home. My wife was placed with the responsibility of her day-to-day care and support while I was here in Wellington. Although my sister Hine never got to the point of signing over powers of attorney, my wife did have the financial authority to be able to act on her behalf as the situation required. It was a responsibility that my wife took extremely seriously. She was conscious of the privileged position that my sister Hine had placed her under. It was also a responsibility that, as a whānau, we knew had to be protected and respected in order to protect and respect my sister.

It was through that experience that we truly came to know that the exercise of authority on behalf of another must be safeguarded at all times, that we must make sure never to lose sight of the person who entrusts that confidence in us. It is absolutely about the essence of being whānau, and of honouring whanaungatanga—relationships—as the fundamental organisation of our community. By this we mean that the rights and reciprocal obligations consistent with being part of a whānau collective are paramount in determining and caring for the personal welfare and rights of its members.

As such, there are two particular concerns that the legislation has raised. The first significant change is the need to go to a lawyer or a trustee incorporation before an enduring power of attorney is granted. The second change is the need, in a number of situations, to go to a doctor before being able to use those powers. We consider that both of these changes reduce the accessibility and versatility of the enduring power of attorney.

This is where we face the greatest conflict, for although we support the need for strengthening accountability through the new witnessing requirements, we hope that the procedures are, as the Law Commission put it, “as swift, inexpensive, informal, and lawyer free as possible”. We endorse the comments made by the National Council of Women, which warned that the legislation must not make the process so cumbersome that whānau members—family members—avoid it and the benefits it provides. We agree with the council that a review of the provisions should take place in 5 years, to really test its effectiveness.

But in the trade-off between reducing bureaucracy and unnecessary paperwork, we would be reluctant to act in any way to open up situations of misuse of enduring powers of attorney. Again, the Law Commission described such misuse as including some of the following. There is outright embezzlement, which is sometimes rationalised by the attorney as “borrowing”; it is something like “I am sure if mum understood she wouldn’t mind.”—that sort of stuff. Other incidents that the Law Commission talked about were the attorneys helping themselves to the donors’ belongings; failure to support the donors going to an appropriate residence when that is clearly necessary, or, conversely, prematurely institutionalising the donors to suit the attorneys’ lifestyle; and, in the worst-case scenario, selling the donors’ home without their knowledge or consent.

Such actions are an outright breach of the spiritual and cultural guardianship derived from whakapapa. Kaitiakitanga demands that attorneys would take on active exercise of responsibility in a manner beneficial to the welfare of the whānau. Yet, tragically, all of the evidence is telling us that men and women of all ages and of all ethnicities are experiencing elder abuse and neglect, although it appears to be most common amongst those in their 70s and early 80s. And so we—reluctantly, it must be said—accept that the legal professionals and authorised officers, who are engaged independently of the attorney, are a vital means of providing an extra safeguard against undue influence.

I want to refer to the principle of kotahitanga as the expression of unity of purpose and direction. In the interests of kotahitanga, I believe that it is incumbent upon the Government and the Minister to ensure that full and informed dialogue and information sharing takes place amongst our communities about the procedures for creating enduring powers of attorney. The House would be shocked by the New Zealand Medical Journal article entitled “Doctors, elder abuse and enduring powers of attorney”, which described widespread ignorance amongst doctors and other professionals dealing with incapacitated patients of the scope and nature of the powers granted when an enduring power of attorney is donated. I want to share with the House one of the warnings of the article, and I quote: “The Enduring Powers of Attorney, properly used, should act as a shelter for the elderly from the vicissitudes of life,”—

JUDY TURNER (Deputy Leader—United Future) Link to this

I stand on behalf of United Future to speak on the second reading of the Protection of Personal and Property Rights Amendment Bill. The intention of this bill has been, of course, to reduce elder abuse, as recommended by the New Zealand Law Commission. On one hand we want to encourage the use of an enduring power of attorney by keeping it simple, straightforward, and affordable—we want to make sure that it is easily understood by both the donor and his or her appointed attorney—while at the same time we want to ensure that donors are safe from the attorneys using the power vested in them for their own benefit, rather than for the benefit of the donors.

I want to add to the comments of other members of the Social Services Committee who said it had been a pleasant experience working on this bill. We had some fantastic submissions from a wide range of people, who were well versed in these kinds of issues, with some very, very good recommendations.

One thing that became clear was that for an enduring power of attorney to be safe, it is important that both the way the enduring power of attorney is set up and the way it is implemented are enshrined in transparency. One of the things I had not considered prior to this bill was that people can have episodes in their lives where their capacity to act is impaired, but can then return to good health and be able to control their own affairs again. There was a lot of talk about the use of appropriate health professionals to determine capacity—particularly mental capacity—and, in particular, Age Concern New Zealand had quite a bit to say about that in its submission. However, this bill also talked about limiting the number of medical examinations that an attorney can request. That number needs to be reasonable to avoid rogue attorneys approaching multiple medical practitioners in search of a particular outcome.

It is a good thing that we amended what was put to us to now allow experienced legal executives to witness enduring powers of attorney. This is a cost-saving mechanism and one that they are well capable of doing and handling responsibly. We considered a recommendation that attorneys be required to keep financial records of any transactions engaged in during a time when the donor may be incapable of making decisions, so that they can be accountable to either the donor or to other family members who may request to see an account of expenditure.

A number of issues raised by submitters showed how complex these enduring powers of attorney can be. I think the National member Judith Collins made some reference to that, and to the fact that quite possibly this might not be the end of this issue. This is one of those matters that I think is well overdue for the amending that we are looking to put through at present. I imagine that it will need to bed down over time, and then we will see what else may need to be done if other holes and gaps develop.

But let me just tell members some of the interesting things that came out in submissions that this bill may not completely cover yet and we may need to consider in the future. One of the concerns was that, particularly, dementia sufferers could be signed on to participate in research by those who are attorneys on their behalf. There were questions as to whether they should have the right to enrol in research projects the people they were caring for.

There were concerns about what would happen if there were a divorce or separation and the ex-partner had an enduring power of attorney; how would that be managed in a divorce or separation situation? How was competence decided, and how does one differentiate between permanent loss of capacity and partial or temporary loss? What is the trigger for partial capacity? How does one determine when an attorney should then trigger the powers he or she has been given and when does the attorney need to pull back? How do we define a significant decision? There are a number of references in this amendment to the ability of an attorney to jump in and make decisions of a significant nature and of an insignificant nature. How do we determine what those two are defined as?

There was also some very interesting work from the New Zealand Law Society. The society talked about the need to perhaps standardise the documentation, and it made a recommendation to keep it simple. There were some concerns that if we allow this process to become too complicated, it will become off-putting. People would be less inclined to set up an enduring power of attorney and would walk away from the process, considering it too complex. So there was some discussion from certain submitters about how to keep the process safe but simple.

One of the other issues that was talked about was the fact that many trusts—particularly family trusts—have in place gifting programmes. What is the role of a person with power of attorney to maintain those gifting programmes or to oversee those gifting programmes from a family trust, when he or she has taken over being a spokesperson for the donor, who is incapacitated?

A huge number of issues are thrown up when we look at this type of situation. United Future is very happy to support the second reading, and we think some good progress has been made around this issue, but I signal that some very interesting issues were brought up by submitters that may not have been fully addressed in this bill and may need revisiting. I think, however, that it is a wise move to do what we are doing to date. We should let that settle down and see where we go from here.

STEVE CHADWICK (Labour—Rotorua) Link to this

It is nice to take a call on the Protection of Personal and Property Rights Amendment Bill. I was not on the Social Services Committee, so this is an outsider’s view of the bill.

People are saying that this bill has arisen from a Law Commission report. I want to give some acknowledgment to the Minister for Senior Citizens, Ruth Dyson, who is the one who decided that it was time to get things done for the population of older people. She rolled her sleeves up, had a report from the Law Commission, and got going. The reason why she got going is that this Labour-led Government decided that elder abuse and neglect is one of the key platform planks that we will take some notice of over the next 5 years and this fitted perfectly with what the Law Commission report found. This is a feel-good bill, as I have noticed from all members speaking in the House tonight, because we have been increasingly concerned about the abuse and neglect of older people and also about the misuse of the current enduring powers of attorney approach.

I want to go back to the context of 1988, when the legislation was first introduced. Most old people then—

Dr PAUL HUTCHISON (National—Port Waikato) Link to this

I rise to take a short call on the Protection of Personal and Property Rights Amendment Bill. Her Majesty’s most loyal Opposition worked very well with the other members of the Social Services Committee to get the submissions on this bill heard and to progress it through to the second stage.

As has been said, this bill is a result of the recommendations made in the Law Commission’s 2001 report, published as Misuse of Enduring Powers of Attorney. But one does wonder why it has taken 6 years under this Labour Government for the bill to finally reach the House. Yes, it is worthy legislation, but why has this tawdry Labour Government once again taken so long to get this sensible legislation here? It is good that we, Her Majesty’s most loyal Opposition, can support and add our—