Powers of attorney and enduring documents in South Australia 

This article states the law of South Australia. The Powers of Attorney and Agency Act 1984 (SA) creates two instruments that look similar and behave very differently: a general power of attorney, which lapses on the donor's legal incapacity, and an enduring power, which does not¹. The prior question in any problem is which was created, because the formalities that distinguish them are strict and a deed that misses them is not an enduring power at all.

The general power

Section 5(1) allows a general power of attorney to be created by deed in the form in Schedule 1, or in a form to the same effect expressed to be made under that section. Its authority may be expressed subject to specified conditions, limitations or exclusions (s 5(2)).

Subject to those limits, a general power confers on the donee — or on donees jointly or severally — "authority to do on behalf of the donor anything that he can lawfully do by an attorney" (s 5(3)). Section 5(4) carves out one category: it does not confer authority to perform functions the donor has as a trustee or personal representative. A donor who is a trustee cannot delegate the trusteeship through this instrument.

What makes a power enduring

Section 6(1) gives two routes. An enduring power may be created by a deed expressed to be made in pursuance of s 6, or by a deed containing words indicating an intention that the authority is to be exercised notwithstanding the donor's subsequent legal incapacity, or in the event of it. The second route is substantive rather than formulaic: the words need only indicate that intention.

Section 6(2) then imposes two requirements, and a deed is not effective to create an enduring power unless both are met:

• the attesting witness — or, where there is more than one, at least one of them — is a person authorised by law to take affidavits; and
• the deed has endorsed on it or annexed to it a statement of acceptance in the form of Schedule 2, or a form to the same effect, executed by the person appointed as donee.

The second requirement is the one most often overlooked. The donee must accept, in writing, and the acceptance must travel with the deed. An instrument perfectly expressed as enduring but lacking that endorsement fails s 6(2).

Where the power is validly enduring, s 6(3) states its effect: an act done by the donee under the power during a period of the donor's legal incapacity "is as effective as if the donor were competent and not incapacitated".

The donee's duties and exposure

Three provisions bear on the donee, and together they answer most financial abuse problems arising under an enduring power.

Section 7 imposes the central duty. During any period of the donor's legal incapacity, the donee must exercise the powers "with reasonable diligence to protect the interests of the donor", and if the donee fails to do so is liable to compensate the donor for loss occasioned by the failure. The remedy is compensatory and runs to the donor.

Section 8 creates an offence. A donee who fails to keep and preserve accurate records and accounts of all dealings and transactions made under the power is guilty of an offence, with a penalty recoverable summarily of not more than one thousand dollars. The record-keeping obligation is therefore not merely evidentiary — its breach is itself an offence, independently of whether any loss occurred.

Section 9 restricts exit. A donee may not renounce the power during a period of the donor's legal incapacity except with the permission of the Supreme Court. A donee cannot walk away at the point the donor is most exposed.

Interstate enduring powers, and the double limit

Section 14 recognises an interstate enduring power, but subject to two limits that operate together.

Under s 14(1), an interstate enduring power has effect in South Australia as if made under and in compliance with this Act, but only insofar as the powers it gives under the law of the jurisdiction where it was made could validly have been given by an enduring power made under this Act.

Section 14(2) then adds that such a power has effect subject to any limitations applying to it under the law of the place it was made, and does not confer any power on an attorney in South Australia that could not be conferred by an enduring power made in South Australia.

The practical result is a lesser-of-the-two rule. The interstate instrument is read down to whichever is narrower: what its home jurisdiction permitted, or what South Australia permits. An answer that recognises the instrument at full face value under the law of its origin has applied only half of s 14.

Where this instrument stops

The power of attorney is not the vehicle for every decision. Section 13 of the Advance Care Directives Act 2013 (SA) provides that an advance care directive cannot give a power of attorney², and the two instruments are kept deliberately distinct. A problem that raises both financial authority and health decisions engages two separate instruments and two separate statutes.

Applying this in a problem question

1. Identify which instrument was created — general under s 5 or enduring under s 6 — before asking what the donee could do.
2. For an enduring power, test both limbs of s 6(2), and check the Schedule 2 acceptance specifically.
3. If s 6(2) is not satisfied, the deed is not an enduring power, and the authority ends at the donor's legal incapacity.
4. For misuse of the power, plead s 7 for compensation and consider s 8 separately, since the accounts offence does not depend on loss.
5. For an interstate instrument, apply both s 14(1) and s 14(2) and read the power down to the narrower of the two laws.
6. Where health or personal decisions are in issue, go to the advance care directive regime rather than this Act.

Self-check

• Have I checked the Schedule 2 statement of acceptance before treating a power as enduring?
• Have I kept s 7 compensation distinct from the s 8 offence?
• Have I applied both limbs of s 14 to an interstate power?
• Have I named this as South Australian law?