Enduring powers of attorney in the ACT 

This article states the law of the Australian Capital Territory. The Powers of Attorney Act 2006 (ACT) puts property, personal care, health care and medical research matters into one instrument, and pairs its capacity test with a statutory list of things that do not indicate incapacity¹. The prior question in a capacity dispute is often not s 9 but s 91, because that is where most weak arguments fail.

What makes a power enduring

Section 8 defines an enduring power of attorney as a power of attorney under the Act "that is not revoked by the principal becoming a person with impaired decision-making capacity".

The definition is by consequence rather than by form: what makes the power enduring is that incapacity does not end it. The note to the section adds that an enduring power operates as a general power of attorney in relation to property matters while the principal has decision-making capacity, so it is not a springing power — it is live from the outset for property, and continues after capacity is lost.

That is a different design from Western Australia, where s 104(1)(b) lets the donor choose between immediate operation and operation only once the Tribunal has declared incapacity.

The capacity test

Section 9(1) provides that a person has decision-making capacity if the person can make decisions in relation to their affairs and understands the nature and effect of the decisions.

Section 9(2) mirrors it: a person has impaired decision-making capacity if they cannot make decisions in relation to their affairs, or do not understand the nature or effect of the decisions they make.

Note the conjunctions. Capacity requires both ability and understanding; impairment follows from the absence of either. A person who can make decisions but does not understand their effect has impaired decision-making capacity on this wording.

What does not indicate impairment

Section 91(1) is the provision that decides most capacity arguments. A person is not taken to have impaired decision-making capacity only because the person:

• is eccentric;
• makes unwise decisions;
• does or does not express a particular political or religious opinion;
• has a particular sexual orientation or expresses a particular sexual preference;
• engages or has engaged in illegal or immoral conduct; or
• takes or has taken drugs, including alcohol.

Section 91(2) then draws a careful line on the last item: while drug-taking alone does not indicate impairment, any effect of drug-taking on the person may be taken into account. The conduct is irrelevant; its effect is not.

This list does more work than an equivalent provision elsewhere. South Australia achieves part of it through s 7(2)(d) of its directives Act — capacity is not impaired merely because a decision may have an adverse outcome — but the ACT enumerates six grounds, including several that are really about disapproval of the person's life rather than their cognition. A student arguing incapacity must be able to point to something outside this list.

Who may be appointed

Section 13(1) allows an adult principal to appoint one or more people to do anything the principal can lawfully do by an attorney. Section 14 then limits that power for enduring powers.

For a property matter, the principal must not appoint a corporation other than the public trustee and guardian or a trustee company under the Trustee Companies Act 1947 (ACT), and must not appoint a person who is bankrupt or personally insolvent (s 14(1)).

For a personal care matter, health care matter or medical research matter, the principal must not appoint a corporation other than the public trustee and guardian (s 14(2)). Personal and health decisions are reserved to natural persons, with that one exception.

The inclusion of medical research matters is notable: the ACT contemplates an attorney consenting to research participation, which most of the other statutes examined do not address in the same instrument.

Who may not make one

Section 14(3) provides that a person for whom a guardian or manager is appointed under the Guardianship and Management of Property Act 1991 (ACT) cannot make an enduring power of attorney unless ACAT approves the provisions of the power.

That is a softer rule than the equivalent in the ACT's own health directions legislation, where s 7(3) categorically bars a person with an appointed guardian from making a health direction. Here the bar is conditional and ACAT can lift it. The same Territory takes different approaches to the same starting fact, and an answer should not carry one across to the other.

Applying this in a problem question

1. Establish whether the instrument is enduring by reference to s 8 — does incapacity revoke it?
2. For property matters, remember the power is live immediately, not on incapacity.
3. Apply s 9 with attention to the conjunctions: capacity needs ability and understanding.
4. Test the incapacity argument against s 91 before anything else, and distinguish drug-taking from its effects under s 91(2).
5. For appointment challenges, apply s 14(1) or s 14(2) according to the kind of matter.
6. Where the principal already has a guardian or manager, apply s 14(3) and ask whether ACAT approved the provisions.

Self-check

• Have I applied s 91 before accepting an argument of impaired capacity?
• Have I distinguished drug-taking from its effect?
• Have I used the right limb of s 14 for the kind of matter?
• Have I avoided importing the categorical bar from the health directions Act?