When incapacity results in the lapsing of a power of attorney
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By Trevor Simon
Topics Contract Law
08 Jul 2021
A power of attorney is a formal document where a person (the principal) gives another person (the agent) the ability to act legally on his behalf. It is not a contract but rather an expression of will by the principal. Typically, a power of attorney allows an agent to manage the proprietary and financial affairs of the principal should the principal become unable to do so. Each power of attorney may vary in its content and the terms included therein will determine to what extent the agent will assume control of the principal’s affairs.
When the principal dies or is sequestrated as a result of insolvency, any power of attorney that may have been executed will automatically lapse by operation of the law. The rationale behind this is that since the principal can no longer act personally, the agent cannot act on his behalf.
Similarly, when a principal becomes incapacitated in such a way that he is unable to make his own decisions, any power of attorney which may have been executed by the principal automatically lapses by operation of the law.
There are steps that can be taken when a person becomes incapacitated to such an extent that he is unable to make his own decisions.
Rule 57 of the Uniform Rules of Court provides that any person may apply to the High Court for an Order declaring another person (the patient) to be of unsound mind and as such incapable of managing his affairs and following this, to have a curator bonis appointed to administer the patient’s financial affairs.
The curatorship application is usually brought by a member of the patient’s family. However, any person who can show sufficient interest can also do so, for example, a friend or business partner.
In a curatorship application, the Court is normally requested to make the following orders:
- to declare the patient of unsound mind and incapable of managing his or her affairs;
- to appoint a curator ad litem; and, following such appointment
- to appoint a curator bonis to administer the financial affairs of the patient.
It is not essential that a person be declared mentally ill for a curator bonis to be appointed to administer the affairs of the patient. This can minimise any embarrassment which may be caused to the patient and his family as a result of the bringing of the curatorship application.
The curatorship application is brought in 2 stages but on the basis of one founding application. The founding application must, as far as possible, be supported by:
- an affidavit deposed to by a person to whom the patient is well known, containing facts and information within that person’s knowledge about the patient’s mental condition as well as the current financial circumstances of the patient; and
- affidavits by two medical practitioners, one of whom must be a physician who is accepted by the Court as being an expert in diagnosing the mental competence of the patient such as a psychiatrist or a neurologist and the other affidavit by a medical general practitioner.
At the first stage of the application, the Court is asked to appoint a curator ad litem who is normally an Advocate and who is tasked with preparing a report for the Court wherein a recommendation is made that a curator bonis be appointed to manage the patient’s financial affairs.
The report is a comprehensive document which is drawn up after consultation with the patient, the medical practitioners who have examined the patient and relatives, friends and acquaintances of the patient.
The report is then submitted to the Registrar of the Court (with a copy of the report to the applicant) who in turn will submit a copy to the Master of the High Court.
The Applicant will then bring a further application to the Court on the same papers to have the curator bonis appointed.
In terms of the Mental Health Care Act 17 of 2002, the Master of the High Court may on consideration and processing of the prescribed application, appoint an administrator to manage the property of a person who has been positively diagnosed as mentally ill or a person with severe or profound intellectual disability.
The difference between the curatorship applications and the application in terms of the Mental Health Care Act is that the application to the High Court is applicable to any situation where the person becomes incapable of managing his own affairs, whereas the application to the Master of the High Court, can only be utilised if the person has a mental illness or a severe or profound mental disability.
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Trevor Simon brings formidable experience and industry knowledge to our highly regarded litigation and insolvency teams. With his local and international knowledge, having practised as an attorney in both South... Read more about Trevor Simon