New Zealand Law Society - Lawyers Complaints Service: Client must have capacity to revoke EPOA

Lawyers Complaints Service: Client must have capacity to revoke EPOA

This article is over 3 years old. More recent information on this subject may exist.

A lawyers standards committee has found that a lawyer, B, did not have an adequate basis to satisfy himself that a client had the requisite capacity to revoke Enduring Powers of Attorney (EPOA) before revoking them.

The committee determined B’s conduct had been unsatisfactory.

In May 2012 the client’s daughter, Ms E, gained EPOA for her father covering his property and care and welfare. These were invoked in January 2014 after her father’s GP signed a certificate of mental capacity applying to both EPOA.

In June 2014, her father – apparently unhappy his bank was limiting his access to his accounts due to the activation of the EPOA – instructed B to revoke them.

B sought clarification of the grounds upon which the EPOA had been invoked. Around this time, the father was hospitalised. Following a discussion with a geriatrician at the hospital as to his client’s capacity, B prepared documents for revocation of the EPOA. Ms E’s father subsequently signed these and on the same day new EPOA were executed appointing B attorney for both property and personal care and welfare.

“Notably,” the committee said, Ms E’s father’s signature “was witnessed by … a legal executive employed by [B]’s firm”. The father then died a few days after revoking the EPOA.

Making enquiries

Ms E complained that B failed to make reasonable enquiries about her father’s capacity to revoke the EPOA, and hence that her father’s estate should not be liable for the fees incurred for B’s work in relation to those instructions.

She also complained that after her father’s death, B had initiated contact with her in an inappropriate way which had caused her stress and anxiety.

The standards committee noted that the letter written by the geriatrician stated that: “In my opinion, although [Ms E’s father] manifests evidence of cognitive impairment which may impact on his insight and judgment (sic), [Ms E’s father] nevertheless retains partial capacity to make decisions with regard to his place of residence and related matters.”

Presumption of capacity

The committee noted that ss 5 and 24 of the Protection of Personal and Property Rights Act 1988 establish a presumption that every person is presumed to have capacity, until the contrary is proved.

However, the committee found that the letter and discussions with the geriatrician did not provide an “adequate basis upon which [B] could have been satisfied that [Ms E’s father] had the requisite capacity to revoke the EPOA’s to his daughter or execute new EPOA’s in favour of B”.

The geriatrician’s letter “clearly raises doubt that [Ms E’s father] would have been assessed to have the requisite level of capacity to execute an EPOA or to revoke one,” the committee said.

The committee also said it did not consider that the legal executive, as an employee of B, was “sufficiently independent” of B, and that “it would have been prudent for [Ms E’s father]’s signature to the new EPOA’s to be witnessed outside his office.” B had communicated in earlier correspondence that both he and the legal executive employed by him had satisfied themselves that Ms E’s father had capacity.

The committee found that B acted appropriately in notifying Ms E of her father’s death, and that there were no grounds for a finding of unsatisfactory conduct on this aspect of the complaint.

As well as the unsatisfactory conduct determination relating to the EPOA, the committee fined B $500, ordered him to reduce his fees to not more than $300 plus GST for work done, and ordered that B undertake practical training or education on the preparation and execution of enduring Powers of Attorney.

Lawyer Listing for Bots