Legislation Update: Amendment of Mental Capacity Act

The Mental Capacity (Amendment) Bill, Bill No. 11/2016 was passed on 14 March 2016. The key changes are:

(1) allowing the appointment of professional donees and deputies;

(2) better protection of individuals lacking mental capacity from abuse or exploitation by donees or deputies by expanding the grounds for a court to revoke an LPA or appointment of deputy;

(3) to clarify the protection of donees, third parties who deal with donees and purchasers claiming through the third parties where donees and third parties did not know that the LPA or power under the LPA is non-existent, revoked or suspended;

(4) improve operations of the Office of the Public Guardian which oversees the Act.

Apppointment of Professional Donees and Deputies

This was introduced to address the growing number of elderly singles and people without family support.

Professional deputies are people provide deputyship services for remuneration and registered with the Office of Public Guardian (OPG) as such. Professional donees are professional deputies or people qualified to be professional donees and who offer or provide donee services for remuneration. Individual professional donees can be appointed only if they are not related to the donor by blood or marriage. Licensed trust companies may be professional deputies or donees.

Better Protection from Abuse or Exploitation

The new grounds for the Court to revoke a LPA or revoke the appointment of a deputy or vary his powers are:

(1) the donee/deputy is convicted of an offence whenever committed of criminal misappropriation, criminal breach of trust, cheating, theft or extortion or any other offence involving fraud or dishonesty whether as against the donor or another person;

(2) where the donee/deputy is a professional donee/deputy, the registration of the donee as a professional deputy is cancelled or the donee no longer fulfils the eligibility criteria to be a professional donee, and the donor lacks capacity.

The Public Guardian is also empowered to appoint auditors to assist in examining the reports of donees and deputies, and other information to investigate fraud and exploitation.

A new section 36A empowers the Court to make an order to suspend all or any of a donee’s or deputy’s powers even where no application has been made to the Court and to give further orders or directions in relation to the order of suspension.

Clarification of Rights and Liabilities of Donees, Third Parties and Purchasers

A re-enacted section 16 clarifies that a donee who does an act which would have been within the scope of an LPA without knowing that the LPA was non-existent, revoked or suspended would not incur any liability to the donor or any other person.

Any third party who deals in good faith with a donee without knowledge of the non-existence, revocation or suspension of the LPA, is entitled to rely on the LPA or the power under the LPA in relation to that dealing or transaction as though the LPA exists or had not been revoked or suspended.

Further, it shall be presumed that a purchaser’s purchase from a third party who dealt or transacted with a donee in such circumstances is valid if the dealing or transaction was completed within 12 months after the date on which the LPA was registered or the third party makes a statutory declaration before, on or within 3 months after, the completion of the purchase by the purchaser, that the third party had no reason at the material time to doube the donee’s authority to deal or transact.

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