- Chapter 10 - Enduring powers of attorney
- 10.1 Introduction
- 10.2 What is an enduring power of attorney?
- 10.3 Capacity to make enduring powers of attorney and to revoke them – the legal tests
- 10.4 Assessing capacity to make and revoke enduring powers of attorney
- 10.5 Appointing attorneys under enduring powers of attorney (and decision makers in the Northern Territory)
- 10.6 Responsibilities of attorneys appointed under enduring powers of attorney
- 10.7 Legislative limitations on things that attorneys can do under enduring powers of attorney
- 10.8 Registration of enduring powers of attorney or their equivalents
- 10.9 Recognition of enduring powers of attorney made elsewhere in Australia
- 10.10 Effect on enduring powers of attorney of guardianship tribunals and courts making administration orders
- 10.11 Role of guardianship tribunals and courts in reviewing the making, revocation or operation and effect of enduring powers of attorney
- 10.12 Liability for compensation and criminal liability and professional obligations of lawyers
- 10.13 Supportive attorneys
Chapter 10 - Enduring powers of attorney
Contributed by Nick O’Neill with input from Carmelle Peisah, current to 30 April 2021.10.1 Introduction
In 1925 in Tasmania a woman gave her nephew a power of attorney to empower him to manage her affairs “if and whenever and so long as I shall be incapacitated by illness from attending to business”. Three months later, the woman was certified “insane” and hospitalised. The nephew managed the woman’s estate and financial affairs until she died in 1928. Nicholls CJ held that the nephew did not have any authority to manage his aunt’s financial affairs while she was “insane”.(1). He relied upon an English Court of Appeal case in which it was stated that the authority of an attorney ended when the person who gave them power of attorney became insane.(2) It probably was the case that many powers of attorney were made where the capacity of the person to make a power of attorney was in doubt, and the power of attorney continued to be exercised by the attorney, even though the appointor had clearly lost capacity. Nevertheless, it was not until the 1980s that legislation was enacted to provide for enduring powers of attorney. The legislation allowed a person to make a power of attorney that continued to operate and for the attorney to continue to manage their financial affairs after they lost the capacity to manage them themselves. Since the 1980s many enduring powers of attorney have been made by adults with a diagnosis of dementia and others in anticipation of them losing their capacity to manage their financial affairs. While most of these enduring powers of attorney will have been made while the person was still capable, and most attorneys will have carried out their responsibilities as an attorney both competently and ethically, some will have been made when the maker was already incapable and some attorneys will have acted contrary to the interests of the person who appointed them. Also, many attorneys do not know what their responsibilities as attorneys are. These matters have been addressed in legislation that has been revised or enacted since 1998. With the exception of South Australia, State guardianship tribunals have been given the task of reviewing the making and the operation of enduring powers of attorney. In the Australian Capital Territory the ACT Civil and Administrative Tribunal (ACAT) has been given the task of reviewing the making and the operation of enduring powers of attorney. All these tribunals have also been given the power to revoke or vary enduring powers of attorney and to call attorneys to account. In South Australia this supervisory role is held by the Supreme Court. In the Northern Territory, since 17 March 2014, enduring powers of attorney have been replaced by advance personal plans made under the Advance Personal Planning Act (NT). Those plans not only replace enduring powers of attorney, they also allow the maker of such a plan to appoint a decision maker for care and welfare matters, including health care (personal decisions). In particular the Act allows adults to make what are commonly known as advance care directives; but are called advance personal plans in the Northern Territory. Those parts of the Act that deal with substitute decision-making in relation to financial matters are dealt with in this chapter. Other aspects of the Act are dealt with in Chapters 9, 12, 13 and 14. This chapter deals with the capacity of adults to make powers of attorney, aspects of the responsibilities of attorneys when acting as attorneys for incapable people and the role of the guardianship tribunals and the Supreme Courts in reviewing the making of enduring powers of attorney and the carrying out of their functions by attorneys appointed under enduring powers of attorney.10.2 What is an enduring power of attorney?
An enduring power of attorney is a form of agency through which a competent adult appoints another person, or the relevant Public or State Trustee or a trustee corporation, as their agent to do certain things of a financial nature that the maker of the power of attorney has a legal right to do themselves. Like all agents, an attorney under an enduring power of attorney has no more powers to act than the person who appointed them. However, they are given the power by legislation to continue to act as their appointor’s attorney even after their appointor has lost their capacity either to appoint an attorney or to rescind the appointment of an attorney they have already appointed. While powers of attorney developed in the common law, as well as in civil law countries, recently in Australia, the scope or subject-matter reach of powers of attorney, capacity to make them, the procedures for making them, the obligations of attorneys to those who empowered them and the role of tribunals and courts dealing with issues and problems arising in relation to the making and use of them have all been part of legislative reforms. (3) The most recent example has been the Powers of Attorney Act 2014 (Vic), which came into force on 1 September 2015. It states, in fewer words, that the maker of an enduring power of attorney (in Victoria) may authorise their attorney, by an enduring power of attorney, to do anything on behalf of them as the maker, that they, as a maker, can authorise an attorney to do lawfully on their behalf. (4) While this is a wonderfully circular definition, the relevant section goes on to state that a person may make an enduring power of attorney for personal or financial matters or both. (5) The Act defines a financial matter that an enduring attorney may handle on behalf of a maker of an enduring power of attorney as:[A]ny matter relating to the principal's [maker’s] financial or property affairs, and includes any legal matter that relates to the financial or property affairs of the [maker].(6)And then goes on to give a list of examples as follows:
- making money available to the maker for their personal expenditure;
- paying expenses for the maker and any for their dependants relating to the maintenance and accommodation of the maker and any dependants, including purchasing an interest in, or making a contribution to an establishment to accommodate the maker or any dependants of the maker or otherwise making payments in relation to such property;
- paying any of the maker’s debts, including any fees and expenses to which an attorney is legally entitled;
- receiving and recovering money payable to the maker;
- carrying on any trade or business of the maker;
- performing any contracts entered into by the maker;
- discharging any mortgage over the maker's property;
- paying rates, taxes and insurance premiums or other outgoings for the maker's property;
- insuring the maker or the maker's property
- otherwise preserving or improving the maker's property;
- making investments for the maker;
- continuing investments of the maker, including taking up rights to issues of new shares, or options for new shares to which the maker becomes entitled by the maker's existing shareholding;
- undertaking any real estate transaction for the maker;
- dealing with land for the maker;
- undertaking a beneficial transaction for the maker involving the use of the maker's property as security for an obligation, including taking out a loan on behalf of the maker or giving a guarantee on behalf of the maker;
- withdrawing money from or depositing money into an account of the maker with a financial institution.(7)
- where and with whom the maker lives;
- persons with whom the maker associates;
- whether the maker works and, if so, the kind and place of work and employer;
- whether the maker undertakes education or training, the kind of education or training and the place where it takes place;
- daily living issues such as diet and dress;
- health care matters, including matters provided for in Part 4A of the Guardianship and Administration Act 1986 (Vic).(11)(12)
- make or revoke a will for the principal (maker);
- make or revoke an enduring power of attorney for the maker;
- vote on the principal's behalf in an election for the State or the Commonwealth or another State or a Territory of the Commonwealth or a local election or a referendum;
- consent to the entering into or dissolution of a marriage of the maker or of a sexual relationship of the maker
- make or give effect to a decision
- about the care and wellbeing of any child of the maker; or
- about the adoption of a child under 18 years of age of the maker;
- to enter into, or agree to enter into, a surrogacy arrangement on the maker's behalf; or
- consent to the making or discharge of a substitute parentage order on the maker's behalf; or
- manage the estate of the maker on the death of the principle; or
- consent to an unlawful act (13).
10.3 Capacity to make enduring powers of attorney and to revoke them – the legal tests
For the purposes of this chapter it is assumed that the tests for capacity to make enduring powers of attorney are the same as the tests for capacity to revoke them.(17) While there are tests for capacity to make an enduring power of attorney that are set out and discussed below; it should be remembered that, in the absence of evidence to the contrary, the presumption of capacity will prevail.(18)10.3.1 The common law tests – used in New South Wales, South Australia, Western Australia
In New South Wales, South Australia and Western Australia the test for capacity to make an enduring power of attorney is found in the cases set out below. In Queensland, and following it in Tasmania, Victoria and the Australian Capital Territory, the test for the capacity to make an enduring power of attorney is found in the powers of attorney legislation of that State or the Territory. For Queensland and Tasmania see, 10.3.2; for Victoria see, 10. 3. 3 and for the Australian Capital Territory see 10.3.4. The starting point for the common law is its presumption that an adult has the capacity to enter any legal transaction or make any legal document such as a will or a power of attorney. However, where the there is a valid trigger for the questioning of capacity, the statement of Dixon CJ, Kitto and Taylor JJ in Gibbons v Wright sets out the general principle. They said:[T]he mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is explained.(19)The approach of the High Court judges in Gibbons v Wright acknowledges two important fundamental principles. First, many of us will not know the nature and effect of most legal documents unless those matters are explained to us. Conclusions about capacity cannot be made about us unless we have that explanation. This is the crucial “information step” discussed in Chapter 1. Second, the requisite understanding is determined by, and specific to, the particular transaction being carried out, which is, in this context, the making of an enduring power of attorney. This is the task specific nature of capacity also discussed in Chapter 1. In Ranclaud v Cabban Young J set out some of the specific matters that a maker of an enduring power of attorney had to understand in order to be capable of making a valid enduring power of attorney. He noted that enduring powers of attorney permit the attorney to exercise any function which the maker of the power of attorney may lawfully authorise an attorney to do. Accordingly, when considering whether a person was capable of making an enduring power of attorney it was necessary to be sure that they understood not only that they were authorising someone to look after their affairs but also the sort of things the attorney could do without further reference to them, including writing cheques (or caring out other financial transactions) on their behalf or selling their house. (20) This has particular relevance in the ACT, Victoria and Queensland where their respective Powers of Attorney Acts provide lists of financial matters that a maker, under an enduring power of attorney, can (and, as well, in Victoria cannot) authorise an attorney under that power to deal with. Even though, as mentioned above, the test for the capacity to make an enduring power of attorney is found in the powers of attorney legislation of Queensland, Tasmania, Victoria and the Australian Capital Territory, the Queensland Guardianship and Administration Tribunal, QCAT and the Supreme Court of Victoria have dealt usefully with cases which set out the common law requirements for capacity to make an enduring power of attorney. In a 2005 case also involving an elderly person making numerous enduring powers of attorney, the then Queensland Guardianship and Administration Tribunal noted that Ranclaud v Cabban was a case in which a 79 year old woman made six enduring powers of attorney in favour, alternatively, of two different persons over a 8 ½ month period. Young J was concerned that because the woman had executed so many powers of attorney in such a short time she did not appear to have the ability to weigh up alternatives, make decisions and give instructions which were likely to remain constant for any period.(21) Consistency of decision-making has since been a hallmark of capacity. The Queensland Tribunal applied Ranclaud v Cabban and, after making its findings of fact, was satisfied that Mr CEJ did not have the capacity to make or revoke enduring powers of attorney since a certain date.(22) In England, Hoffmann J, as he then was, applied the test to an enduring power of attorney in In re K . (23)Having pointed out that a maker of an enduring power of attorney could not be expected to pass an examination in relation to enduring powers of attorney, he identified the following four matters as key characteristics of such powers of attorney that a maker must understand, namely that, unless their proposed enduring power of attorney provides otherwise: 1. the attorney will be able to assume complete authority over the maker's affairs; 2. the attorney will in general be able to do anything with the maker's property which the maker could have done; 3. the authority will continue if the maker becomes mentally incapable; and if the maker should become mentally incapable, the power will be irrevocable without confirmation by a relevant court or tribunal In 2007 in Queensland, following an unreported Supreme Court decision, the then Guardianship and Administration Tribunal accepted expert medical opinion that for most members of the community, enduring powers of attorney were both more unfamiliar and more complex than a will.(24) Consequently, the Tribunal considered that a higher level of cognitive ability and therefore a higher standard of capacity would be required for making an enduring power of attorney than for making a will.(25) While this conclusion was appropriate for that particular case, this cannot be extrapolated to all cases, each of which should be considered in respect to the person’s individual situation and the complexity of the task at hand. Clearly, some wills are more complex than others, as are some enduring powers of attorneys. The following case illustrated just that point. In 2008, in a case involving an enduring power of attorney sworn in the Australian embassy in Lebanon, but conforming with the requirements of the Instruments Act 1958 (Vic), Forrest J of the Supreme Court of Victoria adopted the suggestion made by the authors of Mental Capacity - Powers of Attorney and Advance Health Directives (26) that to apply Young J’s approach in Ranclaud v Cabban(27) the following matters, at least, needed to be considered:
- the nature and extent of the assets to be managed (at least in a broad sense);
- the decisions likely to be made on the maker’s behalf; and
- the ability of the attorney to carry out the tasks involved.(28)
That concept of empowering another person to act generally in relation to one’s affairs raises two basic questions. First, is it to my benefit and in my interests to allow another person to have control over the whole of my affairs so that they can act in those affairs in any way in which I could myself act – but with no duty to seek my permission in advance or to tell me after the event, so that they can, if they so decide, do things in my affairs that I would myself wish to do (such as pay my bills and make sure that cheques arriving in the post are put safely into the bank) and also things that I would not choose to do and would not wish to see done – sell my treasured stamp collection; stop the monthly allowance I pay to my grandson; exercise my power as appointor under the family trust and thereby change the children and grandchildren who are to be income beneficiaries; instruct my financial adviser to sell all my blue chip shares and to buy instead collateralised debt obligations in New York; have my dog put down; sell my house; buy a place for me in a nursing home? Second, is it to my benefit and in my interests that all these things – indeed, everything that I can myself lawfully do – can be done by the particular person who is to be my attorney? Is that person someone who is trustworthy and sufficiently responsible and wise to deal prudently with my affairs and to judge when to seek assistance and advice? The decision is one in which considerations of surrender of personal independence and considerations of trust and confidence play an overwhelmingly predominant role: am I satisfied that I want someone else to be in a position to dictate what happens at all levels of my affairs and in relation to each and every item of my property and that the particular person concerned will act justly and wisely in making decisions?(34)This case led the way in regards to acknowledging the importance of the “who” of the appointment. That is, one of the considerations a person needs to put their mind to (and for some, this may be affected by mental disorders causing impairments in memory or judgment) when appointing an attorney under an enduring power of attorney, is the trustworthiness, responsibility and ability of the attorney. In this case, three adult children of Mrs Szozda’s late son sought a declaration that the enduring and general power of attorney she made on 28 September 2006, when she was 95 years of age, was invalid. They sought other orders as well. Mrs Szozda’s daughter, through a cross-claim, sought a declaration that the September 2006 power of attorney was valid, and a declaration that each of the 2004 powers of attorney and the March 2006 power of attorney made by Mrs Szozda had been revoked and were no longer effective. After a consideration of the evidence of the lay witnesses and the medical evidence, Barrett J made a series of findings of fact relating to Mrs Szozda’s capacity at the relevant times. He then continued:
The overall conclusion is therefore fourfold: first, that nothing in the evidence shows that Mrs Szozda was informed, on 28 September 2006, of the full meaning and significance of the power of attorney she was about to sign; second, that Mrs Szozda’s statements and conduct in the presence of the solicitors on that day suggesting comprehension and acceptance do not establish understanding by her of the nature, implications and far-reaching ramifications of the power of attorney document she was signing and the several acts the attorneys were authorised to do; third, that Mrs Szozda’s cognitive incapacity on 28 September 2006 was such that she could not have understood the nature, implications and far-reaching ramifications of the appointment under the general and enduring power of attorney document she signed or the range of circumstances, affecting herself and her property, in which the attorney would be empowered to act; and, fourth, that, according to the applicable general law principles, Mrs Szozda did not possess, on 28 September 2006, the capacity necessary to enable her to grant a general power of attorney in the form of the document she signed on that day.(35)Consequently, Barrett J held that the enduring power of attorney Mrs Szozda made on 28 September 2006 was invalid. He also made a number of subsequent orders. In a 2012 case in the NSW Supreme Court in which Lindsay J held that the maker (donor) of the enduring power of attorney had the capacity to make the appointment, he stated that he inclined “towards acceptance of Barrett J’s analysis in Szozda v Szozda”.(36) However, he took the view that understanding "the general nature" of what the maker was doing when executing an enduring power of attorney was sufficient to constitute a capability to make the enduring power of attorney. He did not accept the argument that the maker was required to understand the “far-reaching ramifications” of the appointment in order to make a valid enduring power of attorney.(37) Clearly, the common law has oscillated backwards and forwards between the requisite understanding for capacity to make an enduring power of attorney being an understanding of the key features or the general nature of the instrument at one extreme, and a detailed understanding of specific types of acts and transactions which the attorney is authorised to undertake and their far reaching ramifications, at the other extreme. This oscillation appears to be a manifestation of the tension between preventing financial abuse perpetrated by attorneys and making the bar so high that nobody can make an enduring power of attorney because nobody can predict what an attorney “might do” with the power. In a 2018, in an application in which the capacity to make a particular enduring power of attorney and an enduring guardianship appointment was in issue, NCAT reviewed the cases and the competing medical evidence on that issue.(38) This evidence included that the maker of the enduring power of attorney and the enduring guardianship appointment had; “the ability to understand the broad concepts of an enduring power of attorney and an enduring guardianship” but became; “a little confused when she [was] asked more specific questions around the powers an attorney would assume in relation to her specific assets”.(39) After setting out the general Gibbons v Wright test for capacity, NCAT noted that the High Court emphasised that capacity is; “determined by reference to criteria which depend, to a significant degree, on the nature of the transaction effected by means of the relevant instrument”.(40) NCAT then continued:
Several New South Wales cases have applied this general test in the context of questions as to the capacity of a donor to grant an enduring power of attorney, including by Young CJ in Eq in Ranclaud v Cabban, by Barrett J in Szoda v Szoda , and by Lindsay J in Scott v Scott.(41) All these cases proceed on the basis that since in granting an enduring power of attorney a donor [maker] confers on his or her attorney extremely wide powers for an indefinite period, the donor’s capacity to do so should be assessed by reference not to a general understanding that the attorney can in consequence perform acts or enter into transactions on the donor’s behalf, but rather to whether the donor had a detailed understanding of specific types of acts and transactions which the attorney was authorised to undertake. Because an enduring guardianship appointment is similarly wide in scope (within the limits of the particular functions conferred on the enduring guardian) and indefinite in duration, it follows in the [NCAT’s] view that a similarly granular understanding of its effect should be expected of a person who grants such an enduring guardianship.This leaves open the question what does the maker of an enduring power of attorney have to understand about the nature of the particular enduring power of attorney they are making when it is explained to them? While that is the test laid down by the High Court of Australia in Gibbons v Wright; the question is what does it mean in practice? (42) It should be noted that in New South Wales the person who witnessed the maker signing the enduring power of attorney, must be a prescribed witness and is usually a solicitor. Also, they must certify that they explained the effect of the enduring power of attorney to the maker who appeared to understand that effect.(43) However, as Szozda v Szozda shows, such certification, even when conscientiously made, is not necessarily proof that that the maker did understand the effect of the enduring power of attorney they were about to sign.(44) Our recommended methodology for health care professionals assessing capacity to make an enduring power of attorney, as outlined in 10.4.1, below, presents a synthesis of many of the aforementioned judgments. Specifically, we have adopted both Young J’s NSW and Hoffmann J’s (Re K), characteristics which define the “what” of the instrument, namely the kind of powers the attorney will have, when the enduring power of attorney commences, and in some complex cases, the effect, as articulated in Ghosn v Principle Focus Pty Ltd but “not necessarily the far reaching ramifications of” the instrument. (45) In addition there has to be an understanding of the “who” (e.g. the trustworthiness) of the attorney, as outlined in Szozda v Szozda.(46). See Section 10.4.1 for an elaboration of our approach. It is important, as the NCAT case shows, that psychiatrists, geriatricians, psychologists and other health professionals apply the same criteria when assessing whether a person has the capacity to make an enduring power of attorney; and that this not be conflated with other tests for other types of capacity. It is equally important that solicitors know what matters they must explain to their clients who are proposing to make an enduring power of attorney to clarify that they understand what they are doing and thus have capacity to make the enduring power of attorney that has been prepared for them.
10.3.1.1 Standard and burden of proof of capacity to make an enduring power of attorney- under the common law
Forrest J also dealt with the question of the standard and burden of proof of capacity to make an enduring power of attorney in the 2008 case Ghosn v Principle Focus Pty Ltd.(47) He stated that, for the purpose of determining capacity, he could see no reason to distinguish between the burden (and standard) of proof required to prove testamentary capacity and the burden (and standard) of proof required to prove the capacity to execute (an enduring) power of attorney. Consequently, he applied the approach taken by the Victorian Court of Appeal in Kantor v Voshalo to the matter.(48) The effect of his decision is that where the evidence in a case, taken as a whole, is sufficient to throw a doubt upon the competency of the maker of the enduring power of attorney, then the court (or tribunal) must decide against the validity of the enduring power of attorney unless it is satisfied affirmatively that the maker was of sound mind, memory and understanding when they made i.e. signed or otherwise executed it.(49) In 2012 in the NSW Supreme Court, Lindsay J noted Forrest J’s approach and that Harrison J of the NSW Supreme Court had declined to follow it and distinguished the Ghosn Case on its facts.(50) Lindsay J noted that Harrison J was attracted by the proposition that, as a consequence of the existence of a "presumption of sanity" operating in the general law, a person who asserts incapacity must prove it.(51) He went on to comment that:Where the burden of proof may lie in a case calling for an application of general law principles may depend upon the class of case concerned, whether there is accumulated judicial experience in dealing with cases of that class and considerations of fairness. From distillations of experience and considerations of fairness, legal rules may emerge. Such rules might be informed by a general precept that "he who alleges must prove", but that is no sure guide to every case. The operation of rules as to onus of proof might also be allowed practical scope for reasonable operation by a distinction being drawn between the location of the "legal" or "ultimate" burden of proof (a failure to discharge which results in the failure of a claim) and a shifting "evidentiary" burden (which, in the course of a hearing, generally means that each party may be at a forensic disadvantage if he, she or it fails to adduce evidence in answer to another party's evidence suggestive of a particular outcome).(52)Subsequently however Lindsay J went on to give legal policy reasons why he considered that attorneys appointed under enduring powers of attorney should not, unless there was an evidential basis for doing so, be required to prove that a maker had the required mental capacity to make the appointment. He explained that:
[T]he practical utility of a power of attorney would be severely diminished if, in all cases or even most, [an attorney] were required to prove that the [maker] had the requisite mental capacity to grant it. The nature of such an instrument requires that, in general, parties dealing with an attorney in circumstances in which the instrument appears to be regular on its face, should be able, in the ordinary course, to act upon an assumption that the instrument is valid. Whether such a conclusion is reinforced by reference to a "presumption of sanity" or some other form of presumption (such as a "presumption of regularity"), it is grounded upon the character of the instrument and the purpose it serves in the community served by the law.(53)
10.3.2 Queensland and Tasmania
In Queensland the Powers of Attorney Act 1998 specifically retains the presumption of capacity.(54) However, it also states that an adult may make an enduring power of attorney only if they understand the nature and effect of such a power of attorney. Furthermore, it states that understanding the nature and effect of an enduring power of attorney includes understanding the following matters:- that in the power of attorney the maker may specify or limit the power to be given to an attorney and instruct an attorney about the exercise of the power;
- when the power of attorney begins;
- that once the power of attorney begins, the attorney will have full control over, the (financial) matters included in the enduring power of attorney, subject to terms or information in the power of attorney about how it is to be exercised;
- that they may revoke the enduring power of attorney at any time they are capable of making an enduring power of attorney giving the same powers to the attorney;
- that the power of attorney continues if they, the maker, become a person who has impaired capacity; and
- that at any time they are not capable of revoking the enduring power of attorney, they are unable to effectively oversee its use by the attorney.(55)
10.3.3 Victoria
The original Victorian provisions relating to enduring powers of attorney were inserted into Part XIA of the Instruments Act 1958 (Vic) in 2003. They followed the Queensland provisions closely but not identically. However on 1 September 2015 the Powers of Attorney 2014 (Vic) commenced. While enduring powers of attorney made under the now repealed provisions of the Instruments Act 1958 (Vic) continue to have effect, many provisions of the Powers of Attorney 2014 (Vic) apply to them.(57) As noted in Chapter 9.1, the Act precludes the making of new enduring powers of guardianship. However, it leaves in place those appointments of enduring guardianship already made under the Guardianship and Administration Act 1986 (Vic) either already in operation or not yet in operation because the maker still has capacity.(58) The Act provides for enduring powers of attorney covering not only financial matters but also personal matters.(59) As a consequence, we have decided to deal with the Victorian enduring powers of attorney for both financial matters and personal matters in this chapter. We are aware that appointments of enduring guardianship made under the now repealed provisions of the Guardianship and Administration Act 1986 (Vic) already in operation or made and ready to come into operation are still valid. As a result we deal with them to some extent in Chapter 9, but because those appointments of enduring guardianship are now governed largely by the provisions of the Powers of Attorney Act 2014 (Vic), there are a number of cross references in relation to them in Chapter 9 to Chapter 10.(60) The Powers of Attorney Act 2014 (Vic) also deals with non-enduring powers of attorney, which are for financial matters only.(61) However, this chapter deals only with enduring powers of attorney under the new Act and enduring powers of attorney made under the provisions of the now repealed Instruments Act 1958 (Vic).(62) Nevertheless there are three matters to be noted. First, a person must have capacity to make or to revoke a non-enduring power of attorney and the tests for that capacity are the same as those for capacity to make or revoke an enduring power of attorney. Second, it should also be noted that a non-enduring power of attorney made by a person is not effective if the person loses the capacity to make a non-enduring power of attorney. Third, the non-enduring powers of attorney provided for in the Act and made according to the requirements of the Act have the effect of giving the attorney under the power authority to do anything on behalf of the maker that a maker can lawfully do by an attorney. In other words a power of attorney of the kind developed by the common law to allow attorneys, as agents, to conduct business, financial and property affairs for principals able to instruct or direct them. The new Act restates, in legislative form, the presumption of capacity developed in the common law by the judges while also stating, in legislative form, the tests that have to be met where there is a proper (evidential) basis for doubting that the person had decision-making capacity to make the enduring power of attorney they went through the process of making.(63)There is little real difference between the legislative statement of the tests and the common law versions of those tests. In Victoria a person may make an enduring power of attorney if they:- are of or over 18 years of age, and
- have decision-making capacity in relation to making the enduring power of attorney.
- understand the information relevant to the decision and the effect of the decision.(A person is taken to understand information relevant to a decision if they understand an explanation of the information given to the person in a way that is appropriate to the person's circumstances, whether by using modified language, visual aids or any other means.)(65); and
- retain that information to the extent necessary to make the decision; and
- use or weigh that information as part of the process of making the decision; and
- communicate the decision and the person's views and needs as to the decision in some way, including by speech, gestures or other means.(66)
- that they, as the maker of the enduring power of attorney may, in the power of attorney document, place conditions on the power given to the attorney and give instructions to the attorney about the exercise of the power given to the attorney,
- that they understand when the power of attorney commences(71)
- that once the power of attorney is exercisable in relation to a matter, the attorney has the same powers as they had when they, the maker, had decision-making capacity for that matter, and further, that the enduring attorney may do anything for which power is given in the power of attorney document,
- that they may revoke the power of attorney at any time when they have decision-making capacity to make an enduring power of attorney,
- that the power of attorney continues even if the principal subsequently becomes a person who does not have decision making capacity for a matter in the power of attorney, and
- that at any time when they do not have decision-making capacity in relation to revoking the power of attorney, they are unable to effectively oversee the use of the power.(72)
10.3.4 Australian Capital Territory
The Powers of Attorney Act 2006 (ACT) restates the presumption of capacity so that an adult making an enduring power of attorney is taken to understand the nature and effect of making the power of attorney, in the absence of evidence to the contrary. (75) Again following the Queensland model closely but not identically, the Australian Capital Territory Act states that understanding the nature and effect of making an enduring power of attorney includes understanding each of the following:- that, in the power of attorney, the maker may state or limit the powers to be given to an attorney;
- that, in the power of attorney, the maker may instruct the attorney about the exercise of the powers given them;
- when the powers given under the power of attorney can be exercised by the attorney;
- that, if the powers under a power of attorney can be exercised by the attorney, then the attorney has the power to make decisions in relation to, and will have full control over, the matter covered by the power of attorney, subject to terms or information about exercising the powers, that are included in the power of attorney;
- that the maker may revoke the power of attorney at any time they are capable of making the power of attorney;
- that the power of attorney continues even if the maker becomes a person with impaired decision-making capacity; and
- that, at any time the maker is not capable of revoking the power of attorney, they cannot effectively oversee the use of the power.(76)
10.3.5 “Planning capacity” in the Northern Territory
In the Northern Territory only an adult may make an advance personal plan.(77) The Advance Personal Planning Act (NT) requires an adult to have “planning capacity” in order to make such a plan. The Act also provides that a person has planning capacity if they have decision-making capacity for making an advance personal plan and do not have an (adult) guardian appointed for them.(78) However the Advance Personal Planning Act (NT) has a test for decision-making capacity, which is a restatement of the established common law test for capacity. It provides that a person has decision-making capacity for a matter if they have capacity to:- understand and retain information about the matter; and
- weigh the information in order to make a decision about the matter; and
- communicate that decision in some way.(79)
10.4 Assessing capacity to make and revoke enduring powers of attorney
While the common law tests for making and revoking enduring powers of attorney are used in New South Wales, South Australia and Western Australia, specific but different statutory tests for capacity are used in Queensland, Tasmania, Victoria, the Australian Capital Territory and the Northern Territory. Consequently, this section will deal first with the generic baseline approach to assessment that applies to all jurisdictions and then will discuss the application of the specific tests to the assessment of capacity. It is important to note before embarking on any challenge to capacity that the presumption that an adult has the capacity to make an enduring power of attorney can be rebutted by satisfactory evidence. However, the onus is that of proving positively that the maker lacked capacity at the time they made the enduring power of attorney and that onus lies with the person challenging the validity of the power of attorney.(81)10.4.1 The principles of assessment of capacity to appoint an enduring power of attorney
We use the generic approach to capacity assessment adopted across this text, namely:- The “why” of assessment;
- Global assessment of mental state and cognition;
- The “what” of assessment;
- The “who” of the assessment ;
- The “freedom” of the assessment;
- Opportunities for supported decision-making
What follows from this statement of principle is that each case must be considered on its own facts. Care needs to be taken not to over-generalise. There is no rule of general application relating to all powers of attorney without regard to particular facts. Attention must be focused on all the circumstances of the case, including the identities of the donor and donee of a disputed power of attorney; their relationship; the terms of the instrument; the nature of the business that might be conducted pursuant to the power; the extent to which the donor might be affected in his or her person or property by an exercise of the power; the circumstances in which the instrument came to be prepared for execution, including any particular purpose for which it may ostensibly have been prepared; and the circumstances in which it was executed. An exploration of all the circumstances of the case will, not uncommonly, call for consideration of events leading up to, and beyond, the time of execution of the disputed power of attorney, as well as on the focal point of the time of execution itself. A longitudinal assessment of mental capacity, along a time line extending either side of the focal point, may be necessary, or at least permissible, in order to examine the subject's mental capacity in context. Medicos and lawyers, alike, tend to embrace that approach. It is difficult to do otherwise. Context has a temporal as well as spatial and relational dimensions.(83)Capacity assessors need to be aware of the temporal, spatial and relational circumstances of the case as well as the assessing physical and mental health aspects of the maker of the enduring power of attorney.
10.4.1.1 The “why” of assessment
Acknowledging both the presumption of capacity and the intrusive nature of assessment, it is important to reflect on the “why” of the assessment, before embarking on any assessment. Who is requesting the assessment and why? Is there already a valid power of attorney in place and is the potential maker aware of such? Is there a valid trigger for rebutting the presumption of capacity? In some cases, the timing may be inappropriate, particularly in regards to maximising autonomy. For example, if the person is, or has been recently acutely ill, it may not be the best time to assess capacity, which should be postponed if possible. Regardless, the reasons for the assessment should be documented in any report.10.4.1.2 Global assessment
When a clinician is asked to assess capacity to appoint an attorney under an enduring power of attorney, it is helpful to place the specific assessment of capacity in the context of the person’s overall mental function and health status. A global assessment of the person’s mental state and cognitive function should be made including an assessment of the specific frontal and executive functions of judgment, reasoning and planning which are relevant to decision making.10.4.1.3 The “what” of assessment
When assessing whether a person understands the matters they are required to understand in order to make a valid enduring power of attorney, it is essential that the person is able to repeat, in their own words, their understanding of those matters after they have been explained to them. As previously stated, in New South Wales, South Australia and Western Australia.(84) the tests for capacity to make an enduring power of attorney are found in the common law in following cases (outlined 10. 3. 1 above):- Gibbons v Wright in which Dixon CJ, Kitto and Taylor JJ outlined the principle of understanding the nature and effect of the instrument when explained;(85)
- Ranclaud v Cabban in which Young J emphasised the need for the maker to understand not only that they were authorising someone to look after their affairs but also the sort of things the attorney could do without further reference to them;(86)
- But also Szozda v Szozda (87) and Scott v Scott (88) in which Barrett J and Lindsay J of the NSW Supreme Court explain and nuance to the decisions from other jurisdictions that they refer to in their respective judgments.
- that they can state, specify or limit the powers to be given;
- when the power of attorney begins;
- that after the power of attorney has come into operation, the attorney will have the power to make, and will have full control over the functions given to them. However, while the maker has decision-making capacity in relation to decisions about enduring powers of attorney, the maker may direct the attorney as to the powers the attorney may exercise;
- that they (the maker) may revoke the enduring power of attorney at any time they have the decision-making capacity to do so;
- that the power of attorney continues if they lose decision-making capacity in relation to decisions about enduring powers of attorney, but that at any time they are not capable of revoking the enduring power of attorney, they are unable to effectively oversee its use by the attorney.(90)
- understand and retain information about the matter; and
- weigh the information in order to make a decision about the matter; and
- communicate that decision in some way.(91)
10.4.1.4 The “who” of assessment
As articulated in Szozda v Szozda(92), the choice of the attorney is an important consideration in the decision to appoint an enduring power of attorney. Accordingly, the rationale for appointing a particular person as attorney should be assessed (the “who” of the appointment). In doing so, it is important to ascertain the following:- has the person made any appointments of attorneys under enduring powers of attorney previously?
- if so, how frequently have there been changes (i.e. revocations and new appointments)?
- is this appointment in keeping with previous appointments (e.g. has someone else been consistently appointed as the attorney under an enduring power of attorney in the past)?
- what is the history of the relationship between the person and the appointee and has there been any radical change in that relationship coinciding with the onset or course of dementia?
- why has the person been selected for appointment as the attorney under the enduring power of attorney
- is the person trustworthy, capable and responsible?
10.4.1.5 The “freedom” of the appointment
Additionally, a task common to all assessments is to ensure that the maker of the enduring power of attorney is making the appointment freely and voluntarily and is not being unduly influenced or “schooled” to make an appointment.(93) This is the “freedom” of the assessment. As has been noted throughout this text, in Chapters 2 and 4, dementia may affect a person’s appraisal of others.(94) Therefore, when undertaking assessments of people who wish to make an enduring power of attorney, it is important to undertake the interview in private. Beyond this, it is also prudent to consider the influence of the person who has brought the potential maker of the power of attorney to the solicitor, or who is in the waiting room. It is important here to be alert to the risk factors for undue influence, referred to in Chapter 4 in regards to will-making,(95) that are equally applicable to the making of enduring powers of attorney, particularly in regards to the procurement of the signing of the document and the circumstances surrounding this.(96) The usual checklist applies, and there is much overlap with the “who” considerations. For example, is the maker of the enduring power of attorney a regular client of the lawyer or is the appointee? Who is giving instructions? Is the appointee a new acquaintance of the person? Are there other documents being signed or changed at the same time? Again, given the mandate of health care professionals to screen for and identity situations of financial abuse, these issues should be addressed and documented in any report. For a case showing a guardianship tribunal dealing with assessments by psychiatrists, other doctors and lawyers of the capacity of a maker to execute an enduring power of attorney see, NPG (Review Enduring Power).(97) For a case showing a guardianship tribunal dealing with assessments by health professionals, particularly doctors, of the capacity of a maker of an enduring power of attorney to revoke that enduring power of attorney see, FFG.(98)10.4.1.6 Opportunities for supported decision making
Notwithstanding the fact that there are only legislative provisions for supported decision-making in Victoria; responsibilities under Article 12 of the CRPD mandate that opportunities for supported decision making be borne in mind in every capacity assessment. A risk – hierarchy approach can be a useful model for determining the role for supported decision-making in this context. For example of a typical clinical case, a man in his late 80’s has moderately severe dementia, which renders him unable to recall the meaning of an enduring power of attorney beyond three minutes. However, he responds to repeated rehearsal and cueing (e.g. “an enduring power of attorney appoints someone else to look after your…?” Is it money? Is it your health?). He has been in a longstanding de-facto relationship with the same man for 50 years. They have no other family. He repeatedly states that he loves and trusts his partner, and there is no evidence to the contrary. He understands that he owns his house, plus some “more money”. This is what we would consider a low risk case for the appointment of his partner as his power of attorney, rendering cueing and supported decision-making an ethical and safe process.10.4.1.7 Revocation
The principles for assessment of capacity to appoint an attorney under an enduring power of attorney apply equally to the assessment of capacity to revoke. The “who” of assessment applies particularly in regards to revocation. It is important therefore to enquire why the donor no longer feels that the appointee is appropriate. This is because unfounded paranoid ideation and suspiciousness often underlie such changes in the case of dementia.10.5 Appointing attorneys under enduring powers of attorney (and decision makers in the Northern Territory)
10.5.1 Who may be appointed?
Adult men and women may be appointed enduring attorneys. But so may Public Trustees and trustee companies, and in all States except Victoria and in the Northern Territory but not the Australian Capital Territory, any company may be appointed attorney under enduring powers of attorney (hereafter enduring attorneys). In Victoria persons at least 18 years old may be appointed as an enduring attorney, unless they are excluded from appointment for one of the reasons set out below, namely:- they are insolvent and under administration,
- have been convicted or found guilty of an offence involving dishonesty. (However they may be appointed even if they have been so convicted or found guilty of an offence if they have disclosed the conviction or finding of guilt to the maker and the disclosure of the conviction or finding of guilt has been recorded in the enduring power of attorney),
- they are a care worker, a health provider or an accommodation provider for the maker.(99)
- an individual who is at least 18 years of age (a person under 18 may be appointed, but the appointment has no effect until the person appointed turns 18); (109) or
- a licensed trustee company (as defined in section 601RAA of the Corporations Act 2001); or
- the Public Trustee; or
- the Public Guardian.(110)
10.5.2 Appointment procedures
The legislation of each State and Territory sets out procedures for a capable adult to appoint an enduring attorney (decision maker in the Northern Territory).(111) It is not intended to discuss those procedures here as helpful information is available on the websites of guardianship tribunal or public guardian or advocate of each State and the Australian Capital Territory. Nevertheless, it should be noted that in New South Wales, Queensland, South Australia, Tasmania, Victoria, Western Australia and the Australian Capital Territory an enduring power of attorney does not come into effect until it is accepted and signed by the attorney or at least one of them. If more than one attorney is appointed, each attorney may carry out their role under the enduring power of attorney only when they have accepted and signed it. If attorneys are given different functions under the power of attorney, they will be able to carry out the particular functions assigned to them if they have accepted their appointment. However, if there are joint attorneys with the same functions, the safer position is that the power of attorney is not capable of being operated until all joint enduring attorneys have accepted it. If only some of the functions given attorneys require joint attorneys then all of them would have to have accepted their role before that part of the power of attorney could be operated.(112) Because advance personal plans in the Northern Territory may cover many more matters than enduring powers of attorney for financial matters, the appointment procedures in relation to them are set out in Chapter 9 at 9. 4. 3. Although in the Northern Territory advance personal plans come into force when made, a decision maker appointed under such a plan may exercise their authority to make decisions in relation to matters given to them in the plan only when the maker has impaired decision-making capacity in relation to the particular matter.(113) It is a common practice elsewhere in Australia for the maker of an enduring power of attorney for financial matters to arrange for the power of attorney to commence so that the attorney under the enduring power, with or without directions from the maker, can handle the maker’s financial affairs on the maker’s behalf. The exercise of the attorney’s authority is not legislatively limited to when the maker of the power of attorney has lost decision-making capacity in relation to one, some or all of the their decision-making capacity in relation to their financial affairs. However, we note that while it has not been possible in the Northern Territory since 16 March 2014, that the Powers of Attorney Act currently in force in there preserves and supports common law powers of attorney that operate when the maker of the power of attorney has “legal capacity”. Such powers of attorney are revoked by a number of events, including “the legal incapacity of the [maker] or [attorney appointed under] the power at any time after the execution of the instrument creating the power”.(114)Where a person wishes to make an advance personal plan, but also have a trusted person managing their financial affairs before they lose the capacity to manage those affairs themselves, it would appear that, in the Northern Territory, they would have to make both a common law power of attorney and an advance personal plan appointing the same person or persons as their attorneys and decision makers in the relevant documents. However, a dealing in land made in the exercise of authority of a decision maker appointed under an advance personal plan does not take effect unless, or until, the plan is registered, with the Registrar-General.(115) In Tasmania an enduring power of attorney is not legally effective until it is registered by the Recorder of Titles.(116) In Victoria, in addition to the procedures required for the making of a valid enduring power of attorney referred to briefly above, there are provisions for the coming into force enduring powers of attorney whether they be for financial matters only or personal matters only or for both financial and personal matters. First, the maker may provide in the enduring power of attorney that the power for all matters or the power for specified matters is exercisable either:- immediately on the making of the power; or
- when the maker ceases to have decision-making capacity for the matters or matter; or
- any other time, circumstance or occasion.
10.6 Responsibilities of attorneys appointed under enduring powers of attorney
When the maker of an enduring power of attorney loses capacity to understand the nature and effect of the power of attorney they have made, this is usually, but not always, a permanent state of affairs. Consequently, the enduring attorney they have appointed becomes the effective manager of and decision-maker about their financial affairs from that time on. While the initial relationship between the maker and the enduring attorney is one of principal and agent, once the principal loses their capacity to remove the agent, the fiduciary obligations of the enduring attorney come much more into play. Because of the greatly increased numbers of enduring powers of attorney being made and coming into effect, it is important that enduring attorneys and everyone else understand the ethical responsibilities, some of which are now set out in legislation, that enduring attorneys have to the person who appointed them. These matters are set out in the greatest detail in the Powers of Attorney Act 1998 (Qld). It is suggested that they apply to enduring attorneys appointed in the other Australian State and the two Territories to the same extent, unless modified by legislation. It should be noted that it has long been established, and recently confirmed, that, notwithstanding the width of a power of attorney, attorneys have a duty and obligation to obey the instructions of the maker even when they are given after the power of attorney has been granted and even if the instructions are given orally. Acting contrary to those instructions is a breach of trust by the attorney. This was established in the High Court of Admiralty in England in 1858 in a case in which an attorney sold a ship contrary to instructions not in the power of attorney itself.(118) The judge, Dr Lushington, said:I apprehend that, as a general rule, the grantee of a power of attorney is bound to follow the directions and wishes of the grantor, as, for instance, with respect to the power of attorney to sell stock, the grantee must exercise that power according to the orders of the grantor. I conceive that to use a power of attorney contrary to the known wishes and directions of the grantor, is a breach of trust.(119)This approach was adopted in Victoria in 1983 and 2002 and 2004 in New South Wales.(120) In R v Holt, Tadgell J of the Supreme Court of Victoria stated:
It is not the law that an attorney given power by instrument under seal may, so long as the instrument remains unrevoked, [may] exercise the power it confers in disregard of any subsequent orders of his principal conveyed to him… Subject to any contrary sense of the instrument there always resides in the donor the right later to instruct the donee not to act on the power, or to act only in a stated way. That the effect of a power of attorney, even if given under seal, may be modified by parol is made clear by the decision of The Margaret Mitchell the authority of which has so far as I am aware never been doubted.(121)In a 2012 case a Master of the Supreme Court of South Australia, Judge Burley, used rather more modern language to make it clear that an attorney under an enduring power of attorney may not exercise powers conferred by the grant contrary to the wishes of the maker while the maker has the requisite capacity to give a competent instruction to the attorney (122)The maker’s wishes may be communicated either verbally or in writing. Another major responsibility of attorneys under either enduring or non-enduring powers of attorney is that by agreeing to carry out the responsibilities of an attorney, they are under a fiduciary duty not to obtain an advantage for themselves or to act in a way which is contrary to the interests of the maker of the power of attorney. In a 1991 case in the New Zealand High Court, Thomas J noted, in a case that involved powers of attorney given to their mother by two daughters going overseas, that:
An attorney cannot utilise a power of attorney to pay his or her personal debts. To do so contravenes the fundamental nature of an agency or fiduciary relationship. The powers of attorney are specifically directed at the management of the principal’s affairs: it is not open to attorneys to either obtain an advantage for themselves or to act in a way which is contrary to the interests of their principals.(123)In the 2002 Master Berecry of the NSW Supreme Court applied Thomas J’s statement in a case involving an enduring power of attorney.(124) The same approach has been applied to attorneys under enduring powers of attorney in a number of Australian States.(125) In the case of enduring powers of attorney, the maker may give binding instructions to the attorney, but only when they are still capable. Instructions by an incapable maker should be considered, but need not be followed and must not be followed if they would place the attorney in breach of their obligation to apply the general principles and to act with reasonable diligence. This is referred to below at 10.6.1.1. and 10.6.1.2. While attorneys are required to consider the maker’s views and wishes, they have to ensure the maker’s proper care and protection. It is suggested that this means that when the maker states views and wishes when they are not capable, enduring attorneys should not act on those views and wishes if to do so would not be in best interests of the maker.
10.6.1 Obligations of enduring attorneys
10.6.1.1 To apply the general principles relating to incapable people set out in the legislation
In Queensland and the Australian Capital Territory the powers of attorney legislation sets out general principles that are relevant to enduring powers of attorney for financial matters. These include encouraging self- reliance, giving the now incapable maker the necessary support and information to participate in the making of financial decisions affecting their lives, applying substituted judgment so that the enduring attorney makes financial decisions that take into account what they consider would be the maker’s views on the matter and exercises the powers given in a way that is appropriate to the maker’s needs and circumstances.(126) In 2015 the new Victorian Act came into force. The statutory principles in it relating to enduring powers of attorney reflect the underlying principles of the Act namely keeping the person involved in the decision-making about their finances both when their ability to make such decisions is impaired or is absent. Those principles impose a set of obligations on an attorney under an enduring power of attorney when making a decision about a matter on behalf of a maker who does not have decision-making capacity in relation to that matter, to:- give all practicable and appropriate effect to the maker's wishes, and
- take any steps that are reasonably available to encourage the maker to participate in decision making, even though they do not have decision making capacity, and
- act in a way that promotes the personal and social wellbeing of the maker, including by;
(i) recognising the maker’s inherent dignity, and
(ii) having regard to maker's existing supportive relationships, religion, values and cultural and linguistic environment, and
(iii) respecting the confidentiality of confidential information relating to the maker.(127)
Even though they are under no statutory obligation to do so, it is suggested that enduring attorneys elsewhere in Australia should apply the general principles that apply in Queensland, the Australian Capital Territory and Victoria when it is appropriate and practicable to do so.
For a general discussion of the responsibilities of attorneys appointed under enduring powers of attorney in the context of an application to the Supreme Court by the two surviving children of man’s first marriage for the man’s second wife to account to his deceased estate for her dealings with his property as his enduring attorney when he had dementia and lacked the capacity to manage his financial affairs, see the 2017 New South Wales Supreme Court case, Smith v Smith.(128)
10.6.1.2 To act honestly and with reasonable diligence
Enduring attorneys must exercise the powers given them according to the terms of the power of attorney and honestly and with reasonable diligence to protect the interests of the maker. The Queensland provision creates a criminal offence as well as a right in the maker to seek compensation for losses caused by the enduring attorney’s failure to exercise their powers honestly and with due diligence.(129) In South Australia and Western Australia the legislation requires an enduring attorney to exercise their powers with reasonable diligence to protect the interests of the maker and makes them liable to the maker for any loss caused by their failure to do so.(130) In Tasmania an enduring attorney is taken to be a trustee of the property and affairs of the maker according to the terms of the power of attorney and must exercise their powers to protect the interests of the maker.(131) In Victoria, an enduring attorney must act honestly, diligently and in good faith. They must also exercise reasonable skill and care.(132) In the Northern Territory a person appointed in an advance personal plan as a decision maker for financial matters under the Advance Personal Planning Act (NT) is required to act honestly and with care, skill and diligence.(133) While enduring attorneys have no statutory duty to act honestly or with reasonable diligence in New South Wales and the Australian Capital Territory, it is suggested that these are some of the essential obligations that apply to enduring attorneys and that enduring attorneys could be found liable in the courts for any provable loss caused by their failure to exercise their powers honestly or with due diligence.10.6.1.3 To exercise their powers according to the terms of the power of attorney
While most enduring attorneys will have the full extent of the powers that a maker may give to an attorney under an enduring power of attorney, the terms of some powers of attorney may limit the attorney’s powers.(134) In those circumstances the enduring attorney must act according to the terms of the power of attorney. The Powers of Attorney Act 1998 (Qld) is specific about these matters.(135) In Tasmania there are different forms for enduring powers of attorney one conferring on the attorney the particular powers set out in the form and the other conferring on the enduring attorney the power to do all the things the maker may lawfully authorise an attorney to do.(136) In South Australia, the form provides the maker with the same choices as the separate forms do in Tasmania.(137) It is suggested that in the States and Territories where the matter is not dealt with in the legislation, that makers may give all the powers they can give at law to enduring attorneys simply by saying so. Similarly, they can confine the powers that they give to enduring attorneys by setting out the powers they wish to give the attorney in the power of attorney document. There are at least two difficulties with giving only limited powers in an enduring power of attorney. First, questions of the extent of the powers given are likely to arise. Second, an enduring attorney is likely to need more powers than a maker may think necessary. The time when this will become apparent is after the maker has lost capacity and cannot give the required, or all, powers to the attorney. Legislation may limit what enduring attorneys may do. This will be seen below at 10.7.10.6.1.4 To avoid conflict transactions
In Queensland, Victoria and the Australian Capital Territory the powers of attorney legislation imposes an obligation on enduring attorneys not to enter into a transaction that does or may result in conflict between that transaction and the enduring attorney’s duty towards the maker, unless the maker authorises the transaction. The legislation describes what is and what is not a conflict transaction.(138) Again it is suggested that, in the States and Territories where this matter is not dealt with in the legislation, the obligation to avoid entering into conflict transactions arises out of an enduring attorney’s general duty to the person who appointed them. Family financial arrangements have the potential to create conflict of interest situations. Fortunately common sense has been applied by tribunals with jurisdiction to revoke or otherwise deal with the enduring powers of attorney of those who have lost the decision-making capacity in relation to such powers of attorney. In a 2018 case, VCAT noted an English House of Lords judgment in which the established test for conflict of interest was said to be what a reasonable person looking at the relevant facts and circumstances of the particular case would think was a real and sensible possibility of conflict.(139) VCAT went on to note that, similar to the New South Wales Guardianship Tribunal (now NCAT):[That] the fact that a person may hold more than one position of trust with duties to one or more persons within a family group presents a mere possibility of a conflict of interests. A finding of an actual conflict of interests requires further examination of the facts in each case. In other words, a finding that a person has responsibilities to more than one legal entity within a family’s financial structure does not create a “strict liability” situation in which he or she is disqualified to hold more than one position of trust.(140)VCAT continued:
It is in the nature of a family trust that family members are appointed. It is also natural and common that persons appoint close family members as their attorneys. Conflict between the roles in such circumstances must be demonstrated not assumed. To conclude otherwise would mean that in every circumstance where a family member holds: (i) one role in a family trust and (ii) another role as an attorney for a family member who is a beneficiary of that trust - there is a disqualifying conflict of interests. This would implicate a great many persons’ estates.(141)For a consideration of similar cases see, 10.12.2, below.
10.6.1.5 Not to breach a fiduciary obligation (duty)
It is well established in the common law that applies throughout Australia, that if an attorney under an enduring power of attorney enters into a transaction that breaches their fiduciary obligations or duty towards the maker of the power of attorney, the relevant Supreme Court has jurisdiction to grant relief including setting aside the transaction or awarding equitable damages or compensation. A 2016 decision from New South Wales provides a clear example. In that case a Mrs C appointed her son as her enduring attorney. In 2012 she moved into a residential aged care facility as her eyesight was deteriorating and she had memory loss. The power of attorney was registered and in 2013 her son proceeded to transfer to himself the residential unit she owned. This was Mrs C’s only asset. This was discovered when, in 2014, the manager of the aged care facility applied to NCAT for it to appoint a financial manager for her as Mrs C’s fees were not being paid. NCAT appointed the Public Trustee and Guardian who, in turn brought proceedings on Mrs C’s behalf in the Supreme Court. Hallen J was satisfied that the son had breached his fiduciary duty to his mother and made orders to ensure that Mrs C’s unit was transferred back to her.(142)10.6.1.6 Not to resign after the maker has lost capacity
In Queensland an enduring attorney may not resign while the maker is incapable, and thus legally unable to make a new enduring power of attorney, without the leave of QCAT or the Supreme Court.(143) In South Australia the leave of the Supreme Court is necessary.(144) In Victoria an attorney may resign if there is another attorney with the power or powers of the attorney who wishes to resign or there is an alternative attorney who is willing and able to act who would have the same power or powers of the attorney who wishes to resign. Otherwise the attorney who wishes to resign must seek, and obtain, the leave of VCAT or the Supreme Court.(145) In Western Australia if an enduring attorney wishes to resign when the maker is incapable, the process is to apply to WASAT to be removed and replaced as an attorney.(146) In the Australian Capital Territory the leave of ACAT is required.(147) Sometimes an enduring attorney may wish or need to resign because of poor health. On other occasions the level of conflict between family members may lead the enduring attorney to wish to resign.(148) In many cases if the attorney under an enduring power of attorney has to resign, it will appropriate to apply to the relevant tribunal or court for the appointment of an administrator and, in some cases, a guardian.(149) In New South Wales and Western Australia there is no provision for an enduring attorney to resign after the maker has lost capacity. However, in New South Wales an attorney or other interested persons may apply to either the Guardianship Tribunal or the Supreme Court to be removed and replaced as an attorney.(150) In Western Australia, an attorney or a person who in the opinion of WASAT has a proper interest in the matter may apply to the Tribunal for an order substituting the attorney.(151) It is suggested that making such an application is the appropriate course for an enduring attorney who wishes to or needs to resign. In Tasmania the matter is dealt with by the single attorney or joint attorneys appointing the Public Trustee to replace them. This is achieved when the Public Trustee accepts the appointment and the appointment document is registered by the Recorder of Titles.(152) In the Northern Territory an enduring attorney appointed under the Powers of Attorney Act (NT) made before 17 March 2014, when the Advance Personal Planning Act (NT) came into force, once appointed, could not resign without the leave of the Supreme Court.(153) Since the Powers of Attorney Act (NT) has remained in force in relation to the enduring powers of attorney created before the new Act came into force, it is reasonable to assume that enduring attorneys appointed under such powers of attorney still cannot resign without the leave of the Supreme Court. However, the Advance Personal Planning Act (NT) specifically provides a process via which a decision maker may resign.(154) But the Act also requires a decision maker, where the decision maker is still alive, to take all reasonable steps to provide for the orderly transfer of decision-making authority from them to the maker or to another agent for the adult, as appropriate.(155)The Act also provides for what is to happen if the maker has died.(156)There is also a process for endorsing an advance personal plan with the fact that a person has ceased to be a decision maker when the maker of the plan no longer has planning capacity.(157)10.6.1.7 Obligation to apply decision-making principles- Northern Territory
When a decision maker for financial matters appointed under an advance personal plan is exercising their authority to make decisions, they must exercise that authority in accordance with the relevant decision-making principles set out in s. 22 of the Advance Personal Planning Act (NT). The decision-making principles give precedence to the views of the maker of the plan whether those views were in the form of an advance care statement made in the plan or subsequently. Consequently, the Act requires that where a maker has made an advance care statement about a matter, the decision maker must exercise the decision maker's authority so as to give effect to the statement, unless the maker, having decision-making capacity to do so, has stated that they do not want effect to be given to the statement; or the decision maker is excused from doing so by operation of s. 23 of the Act. Further, in determining how to give effect to the advance care statement the decision maker must exercise their authority in the way they reasonably believe the maker would have done in the circumstances.(158) Where a maker has not made an advance care statement in their advance personal plan, the decision maker must, nevertheless, exercise their authority in the way they reasonably believe the maker would have done in the circumstances, unless the decision maker is excused from doing so under section 23. Section 23 will be returned to below. Whether or not the maker made an advance care statement, the decision-maker has to (try to) determine what the maker would have done in the circumstances. This obligation requires the decision maker to:- as far as is practicable, seek the maker's current views and wishes about the matter; and
- take into account:
- the maker's current and previously stated views and wishes about the matter; and
- the decision maker's personal knowledge of the maker and their views and wishes about the particular matter and matters generally.(159)
- take into account all relevant considerations; and
- weigh up those considerations, giving each of them the weight that the decision maker reasonably believes is appropriate in the circumstances.
- protection of the maker from harm, neglect, abuse and exploitation;
- providing appropriate care to the maker, including the taking of appropriate health care action;
- promotion of the maker's happiness, enjoyment of life and wellbeing;
- protecting the maker's freedom of decision and action;
- the maker’s ability to be as independent as is practicable;
- the maker’s ability to achieve their maximum physical, social, emotional and intellectual potential;
- the maker’s ability to live in the general community and take part in community activities;
- maintenance of the maker's right to be treated with dignity and respect;
- the maker’s ability to maintain their preferred living environment and lifestyle;
- maintenance or creation of a positive support network for the maker;
- protection of the maker’s property and financial resources from loss, damage or misuse;
- protection of the maker’s right to confidentiality of information about them.(163)
- provided when they had decision-making capacity for the matter (or might reasonably be expected to provide) and
- the benefit to the other person would be reasonable in the circumstances, and also would not significantly adversely affect the adult's best interests.(164)
- to give effect to an advance care statement;
- to exercise a decision maker's decision-making authority in the way they reasonably believe the maker would have done.
- exercising substituted judgment is impracticable;
- exercising substituted judgment would be unlawful;
- exercising substituted judgment would impose a burden on another person that is so unreasonably onerous that it is justifiable to override the maker's wishes;
- where the case is one of giving effect to an advance care statement, and there is no reasonable possibility the maker would have intended the statement to apply in the circumstances;
- exercising substituted judgment would be so unreasonable that it is justifiable to override the maker’s wishes.(165)
10.6.2 Administrative powers and responsibilities of enduring attorneys
10.6.2.1 Power to execute documents
The legislation in Queensland, Victoria and the Northern Territory provides, and it is suggested that elsewhere in Australia it is implied, that enduring attorneys may execute any document in order to carry out their functions as enduring attorneys.(167)10.6.2.2 Record keeping and keeping the maker’s property separate
In Queensland, Victoria, Western Australia and the Australian Capital Territory the powers of attorney legislation imposes an obligation on enduring attorneys requiring them to keep and preserve accurate records and accounts of all dealings and transactions made under the power of attorney.(168) In the Northern Territory these obligations are imposed on decision makers.(169) In addition, in Queensland and the Australian Capital Territory, enduring attorneys must keep their property separate from the maker’s property unless it is jointly owned property.(170) In the Northern Territory, decision makers with financial management powers must deal with the maker’s property as if it were trust property unless it is jointly owned property.(171) While there is no statutory obligation to take these actions elsewhere in Australia, it is suggested that it is wise and in the interests of both maker and enduring attorney that such records are made and kept and that the maker’s property is kept separate from that of the enduring attorney. The obligation to keep the maker’s property separate from that of the enduring attorney is not always understood as demonstrated in a 2006 case from Queensland.(172)The maker, RWM, had a brain injury acquired at birth. As an adult he appointed three family members as his enduring attorneys. RWM received a disability support pension and a mobility allowance as well as a small and varying wage from his employer. He lived at home and paid board and lodging. His personal spending was moderate yet he had no savings. A family member used his automatic teller machine card to access RWM’s account. The evidence showed that RWM’s pension was regarded as part of his family’s income and was used accordingly and not necessarily for RWM’s sole benefit.(173) The Tribunal concluded that it was necessary that a pattern of saving be established for RWM so that he had funds available to meet expenditure in the future. The family members who looked after him were on pensions and because of their age could not be expected to look after him for the rest of his life.(174) QCAT’s predecessor tribunal did not revoke the enduring power of attorney but appointed the Public Trustee as administrator of RWM’s estate for a year to ensure that a savings scheme was established for him. The tribunal stated that, in the period of the Public Trustee’s appointment, [the person who accessed RWM’s bank account] “should be given as much opportunity as is appropriate to manage RWM’s day-to-day financial affairs”.(175)10.6.2.3 Right to information
In the Australian Capital Territory an enduring attorney has a right to all the information that the maker would have been entitled to when they had capacity and a person who has custody or control of the information must disclose it to the enduring attorney on request.(176) The Queensland provisions are the same except that the information that must be disclosed is that which is necessary to make informed decisions about anything the enduring attorney is authorised to do.(177) The Northern Territory provisions are essentially the same as those of Queensland, but with some added provisions to ensure the necessary documents or information is provided.(178) In Victoria the right of an enduring attorney to obtain information relevant to the exercise of the powers given them by the maker under the power of attorney, particularly powers given to them in relation to personal matters, is provided for in different ways and subject to different limitations in the Disability Act 2006 (Vic), the Health Records Act 2001 (Vic) and the Privacy and Data Protection Act 2014 (Vic). It is implied by the existence of some of the provisions of the Powers of Attorney 2014 (Vic) itself.(179) Enduring attorneys, whether for financial or personal affairs or both, need access to information in order to carry out their obligation to act with reasonable diligence to protect the interests of the maker by, for example, paying their gas and electricity bills or ensuring that such bills are paid, attending to health care and the provision of services to the person they are an enduring attorney for as well as attending to other mundane but essential matters. The existence of privacy legislation, which was not intended to operate to preclude the substitute decision-makers of incapable people carrying out the roles they were appointed to carry out, is often used elsewhere in Australia as an excuse for service providers and others not to provide such information. Nevertheless, where enduring attorneys are given information to help them to make their decisions and carry out their functions, they should keep it confidential and divulge it to others only when that is necessary in the interests of the maker of the power of attorney. This is specifically provided for in Queensland.(180)10.7 Legislative limitations on things that attorneys can do under enduring powers of attorney
One of the most commonly arising problems with enduring powers of attorney was that of enduring guardians giving substantial gifts to themselves and others and otherwise either dissipating the now incapable maker’s estate or transferring it to themselves and others. In order to put an end to this and to clarify the responsibilities of enduring attorneys in this regard, most of the recently enacted powers of attorney legislation in Australia at least addresses aspects of this issue. Otherwise, the matter is dealt with by common law. This will be seen below at 10.7.2.10.7.1 The giving of gifts
10.7.1.1 New South Wales
In the Powers of Attorney Act 2003 (NSW) the most commonly used form of enduring power of attorney is the “prescribed power of attorney”. It may also be used as a general or normal power of attorney which is not intended to and will not operate if the maker loses capacity. However, a prescribed power of attorney does not authorise an attorney to give a gift of any of the maker’s property whatsoever to any other person unless the power of attorney document itself expressly authorises the giving of the gift.(181) This provision amends the common law by setting out the extent of the authority of enduring attorneys to give gifts on behalf of the maker of the enduring power of attorney. It allows enduring attorneys to give appropriate gifts, on behalf of a maker who has lost capacity, to members of the maker’s family and other person’s or organisations the maker was accustomed to making gifts to or could be anticipated to wish to give gifts to, for example new members of the family through birth, marriage or other arrangements. Consequently, the Act provides that if the “prescribed expression” is included in a prescribed power of attorney then the enduring attorney can give reasonable gifts to certain people. The prescribed expression is:I authorise my attorney to give reasonable gifts as provided by section 11(2) of the Powers of Attorney Act 2003.If the prescribed expression is included in the power of attorney, then the enduring attorney may give a gift:
- to a relative or close friend of the maker;
- of a seasonal nature or because of a special event such as a birth or marriage; or
- in the form of a donation of the nature that the maker used to make when they had capacity; or
- that they might reasonably be expected to make.
10.7.1.2 Queensland and Tasmania
The Queensland and Tasmanian provisions are that unless there is a contrary intention expressed in the enduring power of attorney, the limits on the attorney giving of gifts of the maker’s property are the same as in the New South Wales Act set out above in 10. 7. 1. 1. Gifts in the form of seasonal or special occasion gifts may be given to relations and close friends of the maker. Enduring attorneys may give gifts to themselves or to a charity with which they have a connection.(183)The terms “relation” and “close friend” are defined in Queensland but not Tasmania.(184)10.7.1.3 Australian Capital Territory
As in New South Wales, an enduring attorney appointed or recognised in the Australian Capital Territory may not make gifts of the maker’s property unless specifically authorised to do so.(185) If the enduring power of attorney contains a general authorisation to make gifts, the attorney is limited to making gifts on behalf of the maker only to relatives or close friends of the maker, including the attorney if they fit either of those categories, or to a charity with which the attorney has a connection.(186) These gifts are limited to gifts for a celebration such as a birthday, Easter or Hanukah or an event such as a birth, marriage or graduation.(187) The gift must be one that it is reasonable that the maker might reasonably be expected to give and no more than reasonable particularly given the maker’s financial circumstances and the size of their estate.(188)10.7.1.4 Victoria
The new Powers of Attorney Act 2014 (Vic) clarified the situation in relation to the giving of gifts of the maker’s property and using it for the maintenance of the maker’s dependants.(189) The Act provides that an attorney may make gifts of the maker’s property, subject to any condition or restriction in the enduring power of attorney itself, but subject to the following statutory limitations:- the gift is reasonable having regard to all the circumstances and, in particular, the maker's financial circumstances; and
- the gift is to a relative or a close friend of the maker and is of a seasonal nature or for a special event; or is a type of donation that the maker made when they had decision-making capacity for the matter or that the maker might reasonably be expected to make.
10.7.1.5 Northern Territory
The Advance Personal Planning Act (NT) allows a decision maker who has financial management powers to make a gift from the maker's property if the gift is of a kind the maker made when they had decision-making capacity for the matter or might reasonably be expected to make and the value of the gift is reasonable in the circumstances.(194) However, in the advance personal plan appointing the decision maker, the maker may restrict the decision maker's authority to make gifts or, conversely, authorise the decision maker to make a gift not otherwise permitted by the Act.(195) Also NTCAT, in the exercise of its jurisdiction under the Act, may authorise the decision maker to make a gift not otherwise permitted by the Act.(196) However, decision makers must not make gifts to themselves from the maker's property unless specifically authorised to do so in the advance personal plan appointing them the decision maker or authorised by NTCAT.(197) The Act provides for a similar approach in relation to the maker’s dependants. A decision maker with financial management powers may provide for the needs of the maker’s dependants from the maker's property in the way the maker had done when they had decision-making capacity for the matter.(198) The decision maker may also make a provision for the needs of a dependant of the maker that the maker might reasonably be expected to make.(199) The value of such provisions has to be reasonable in the circumstances; unless NTCAT authorises the decision maker to make a greater provision in relation to a dependant.(200) Note also however that the maker may, in the advance personal plan, either restrict the authority of the decision maker to provide for the needs of dependants, or authorise the decision maker to make provision for the needs of a dependant that would not otherwise be allowed under the Act.(201) Decision makers who are dependants of the maker must not make provision for their own needs from the maker’s property unless they are specifically authorised to do so by the maker’s advance personal plan.(202) However the Local Court may authorise a dependant decision maker to make provision for his or her own needs from the maker’s property.(203) We suggest that any provision made by a dependant decision maker, whether as a result of authority given to them by maker or by the Court, would have to be related to the decision maker’s needs as a dependant and not otherwise. In making such a provision, the decision maker would be required to act honestly, and with care, skill and diligence as required by the Act and according to their fiduciary duty under the common law.(204)10.7.1.6 South Australia and Western Australia
There are no provisions in the South Australian and Western Australian legislation dealing with the giving of gifts. Consequently, there is doubt as to whether enduring attorneys can give gifts from the maker’s property to themselves and others. This matter is returned to below at 10.7.2.10.7.2 The giving of benefits to themselves and others by attorneys
The common law in relation to powers of attorney was largely determined when powers of attorney were mostly used for business purposes and often gave detailed authorities to the attorney to act as agent for the maker and before enduring powers of attorney were legislated for. In 1893 the Privy Council noted in an appeal from Canada that:[It was not] disputed that powers of attorney are to be construed strictly - that is to say, that where an act purporting to be done under a power of attorney is challenged as being in excess of the authority conferred by the power, it is necessary to shew that on a fair construction of the whole instrument the authority in question is to be found within the four corners of the instrument, either in express terms or by necessary implication.(205)In a 1947 decision of the High Court, Dixon J pointed out that:
Prima facie, a power [of attorney], however widely its general words may be expressed, should not be construed as authorizing the attorney to deal with the property of his principal for the attorney's own benefit. Something more specific and quite unambiguous is needed to justify such an interpretation. “The primary object of a power of attorney is to enable the attorney to act in the management of his principal's affairs. An attorney cannot, in the absence of a clear power so to do, make presents to himself or to others of his principal's property.”(206)Consequently, following the common law in New South Wales, as with gifts and as set out in 10. 7. 1. 1 above, the Powers of Attorney Act 2003 (NSW) precludes an enduring attorney from conferring a benefit on themselves or others unless the enduring power of attorney document itself expressly authorises the conferral of the benefit.(207) If the enduring power of attorney contains the prescribed expression to authorise the enduring attorney to confer benefits on themselves or other named persons to meet their reasonable living expenses, the effect of that expression is that the enduring attorney may meet the expenses they or the other named persons incurred for housing, food, education, transportation, medical care or medication. The benefit must be reasonable having regard to all the circumstances and, in particular, the maker’s financial circumstances and the size of their estate.(208) In Victoria an enduring guardian may give a gift of the maker’s property to themselves, subject to the legislative provisions for the giving of gifts on behalf of the maker, as set out in 10.7.1.4 above. In Queensland an enduring attorney may provide, from the maker’s estate, for the needs of a person completely or mainly dependant of the maker without the maker having to include the power to do so in their enduring power of attorney. What the enduring attorney may provide must be no more than what is reasonable having regard to all the circumstances, in particular, the maker’s financial circumstances. However, the maker can express an intention to provide more in the enduring power of attorney.(209) In Tasmania the matter is dealt with on a case by case basis. The Guardianship and Administration Board may, on the application of an attorney or of its own motion and after a hearing, authorise the enduring attorney to make a gift of any of the maker’s property to any person approved by the Board and for any purpose approved by the Board.(210) In the Australian Capital Territory, an enduring power of attorney must expressly authorise the payment of reasonable living expenses for a named person. Such an authorisation will allow only for the payment of reasonable costs of housing, food, education, transportation, medical care and medication. When working out what are the reasonable costs of these matters and without limiting what must be considered, the maker’s financial circumstances and the size of their estate must be considered. However, the maker can authorise for greater expense in the enduring power of attorney.(211) Similarly, an enduring power of attorney must expressly provide from the needs of a person dependant on the maker to be provided the maker’s estate. Again, what may be provided must not be more than what is reasonable considering all the circumstances, in particular, the maker’s financial circumstances. However, the maker can authorise for greater expense in the enduring power of attorney.(212) As already noted in 10.7.1.5 above, there are no provisions in the South Australian and Western Australian legislation empowering an enduring attorney to give a benefit to themselves or others from the maker’s property. Consequently, it is suggested that the better and safer view is that, unless the enduring power of attorney specifically provides for that to be done or the authority to do so can “be found within the four corners of the instrument … or by necessary implication”, enduring attorneys in those States cannot give benefits to themselves or others. It could be argued in South Australia and Western Australia that as it is an enduring attorney’s obligation to exercise their powers with reasonable diligence to protect the (social and emotional) interests of the maker, this may justify them giving gifts in the way legislated for in New South Wales, Queensland and Tasmania, despite the limits on their powers referred to in the discussion of the common law, just set out, where the enduring power of attorney contains no express words.(213) The argument would be that the reasonable diligence provisions justify a “necessary implication”. This argument is not available in relation to enduring attorneys appointed or recognised in the Northern Territory because the Powers of Attorney Act 1980 (NT) does not contain any reasonable diligence provisions. In South Australia and the Northern Territory the Supreme Court and in Western Australia, WASAT, has the power to make an order “revoking or varying the terms” of an enduring power of attorney.(214) It could be argued that this language would allow those Courts or WASAT to add a term to an enduring power of attorney allowing attorneys to give benefits to themselves and others from the property of the now incapable maker of the enduring power of attorney.(215)
10.8 Registration of enduring powers of attorney or their equivalents
In Tasmania enduring powers of attorney must be registered before they may be exercised by the enduring attorney.(216) In the Northern Territory any advance personal plan may be registered at the Land Titles Office. However, any dealing in land conducted on the basis of an advance personal plan conferring authority to enter into the dealing has no effect unless the advance personal plan is registered.(217)10.9 Recognition of enduring powers of attorney made elsewhere in Australia
All the Australian States (but not South Australia) and the two Territories recognise enduring powers of attorney, or their equivalents, made elsewhere in Australia and allow them to be exercised in relation to either real or personal property within their boundaries.(218) As already noted, in Tasmania an enduring power of attorney must be registered before it may be exercised. (219) However it should be noted that the Western Australian State Administrative Tribunal, WASAT, takes a strict view of the sufficiency of the form and effect requirement in s. 104A of its Guardianship and Administration Act 1990 (WA) in relation to the recognition of powers of attorney created under the laws of another State, Territory or country.(220)10.10 Effect on enduring powers of attorney of guardianship tribunals and courts making administration orders
Guardianship tribunals will not revoke an enduring power of attorney and appoint an administrator where there is no issue about the person’s capacity when they made the enduring power of attorney. This is because the maintenance of the enduring power of attorney is seen as a less restrictive alternative than an administration order. Consequently in a 2010 case, WASAT refused to make an administration order where there was no real objection to the way the enduring attorneys were managing the, by then, incapable person’s finances and when the evidence of the incapable person wanting to revoke her power of attorney arose only from a time when there was doubt that she had capacity.(221)10.10.1 New South Wales
In New South Wales if the Guardianship Division of NCAT, Supreme Court or Mental Health Review Tribunal makes a financial management (administration) order, the effect is to suspend the enduring power of attorney during the currency of the order.(222) It should also be noted that when either NCAT or the Supreme Court conducts a review of the making, revocation or the operation and effect of an enduring power of attorney, it may decide to treat the review as an application for an administration order and make such an order.(223)10.10.2 Queensland
In Queensland if QCAT makes an administration order knowing that the person for whose estate it has made the order had previously made an enduring power of attorney that was in effect, the attorney may exercise the power only to the extent that QCAT authorises.(224) If the administrator becomes aware of the existence of an enduring power of attorney applicable to the person whose estate they are managing, they must advise QCAT and their administration is suspended pending a review of their appointment by QCAT.(225)10.10.3 South Australia
In South Australia if the estate of the maker of an enduring power of attorney is placed under administration under the Mental Health Act 1977 (SA) or the Aged and Infirm Persons' Property Act 1940 (SA), the enduring attorney is accountable to the administrator as if they (the administrator) were the maker of the power of attorney. The administrator may vary or revoke the power of attorney as if they were the (still capable) maker.(226)10.10.4 Tasmania
In Tasmania the Guardianship and Administration Board may not make an administration order in relation to the estate of a person who has made an enduring power of attorney so long as the enduring power of attorney is in force. There are two exceptions. First, the Board may make an administration order in relation to any part of the maker's estate that is not subject to the enduring power of attorney. Second, in an emergency the Board may make an administration order appointing the Public Trustee as administrator for up to 28 days. Such an order takes precedence over any enduring power of attorney.(227) However, the Board may, after a review initiated by itself or others, revoke an enduring power of attorney and appoint an administrator for the maker’s estate.(228)This matter is dealt with below at 10.11.4.2.10.10.5 Victoria
In Victoria if VCAT makes an administration order for the maker of an enduring power of attorney, the attorney may exercise power under the enduring power of attorney only to the extent authorised by VCAT.(229)10.10.6 Western Australia
In Western Australia if WASAT makes an administration order in relation to the estate of the maker of an enduring power of attorney, it has a number of options. WASAT may revoke or vary the power of attorney. Because WASAT may make limited forms of administration orders, it may revoke or vary the enduring power of attorney to remove any inconsistency between it and the administration order. However, where WASAT makes an administration order, the enduring attorney is accountable to the administrator as if the administrator were the maker of the power of attorney and the administrator has the same power to vary or revoke the power of attorney as the maker had when of full legal capacity.(230) For two related examples of where appointments of enduring guardians and attorneys under enduring powers of attorney were revoked by WASAT and replaced by guardianship orders appointing the Public Guardian as a limited guardian and the Public Trustee as a plenary administrator see, AF [2021] WASAT 58 and JF [2021] WASAT 59.10.10.7 Australian Capital Territory
In the Australian Capital Territory, ACAT may revoke the enduring power of attorney when making an administration order.(231)10.10.8 Northern Territory
As has already been noted in Chapter 8.10.1, the Guardianship of Adults Act 2016 (NT), which commenced on 28 July 2016, empowers the Northern Territory Civil and Administrative Tribunal (NTCAT) to make guardianship orders appointing guardians to make decisions about the financial matters of the person the subject of the order that NTCAT has given them authority in relation to.(232) Prior to the commencement of the Guardianship of Adults Act (NT), both the Supreme Court and, in a more restricted way, the Local Court had power to make administration orders in the Northern Territory. Under the new Act the Local Court’s role has been subsumed into NTCAT and any (financial) management order made by it which was current at the commencement of the new Act became a guardianship order under the new Act.(233) The Supreme Court’s statutory jurisdiction under the Aged and infirm Persons Property Act (NT) was abolished by the repeal of that Act.(234) Any protection order made by the Supreme Court that was current at the commencement of the Guardianship of Adults Act (NT) became a guardianship order under that new Act, the person whose estate was the subject of the protection order became a person the subject of an order under the new Act and the manager became a guardian (for financial matters) under the new Act.(235) We suggest that because it abolished the statutory jurisdiction of the Supreme Court to make protection orders and converted any current protection orders into guardianship orders for financial matters to operate under the provisions of the Guardianship of Adults Act 2016 (NT), the Legislative Assembly of the Northern Territory intended that all applications for orders to be made for the management of the estate of a person unable to manage their financial affairs be made to NTCAT with appeals to the Supreme Court only on questions of law and only with the leave of the Court.(236) However, the Legislative Assembly did not seek to reduce or abolish the Court’s inherent parens patriae jurisdiction by clear words; and we do not see that the structure of the legislation creates a necessary implication that such a reduction or abolition of that jurisdiction was intended. If there are problems with an advance personal plan and the maker is unable to amend or revoke it because of the lack of planning capacity, NTCAT has broad powers in relation to such plans including amending them if certain grounds are made out or replacing them with a guardianship order for financial matters in some circumstances.(237) This matter is taken up in much more detail at 10. 11. 8, below.10.11 Role of guardianship tribunals and courts in reviewing the making, revocation or operation and effect of enduring powers of attorney
While most enduring attorneys carry out their responsibilities appropriately and generously, some do not.(238) Some take advantage of their position, others have difficulty carrying out their functions effectively and sometimes problems arise that attorneys need assistance to resolve. Consequently, guardianship tribunals and sometimes Supreme Courts have substantial powers to review the making as well as the operation and effect of enduring powers of attorney. Applications to these tribunals and courts to exercise of these powers will often be linked with applications to make an administration order. There are some examples of this below, particularly from Queensland and Western Australia in 10.11.2.2 and 10.11.6.2, below. A 2005 Queensland case shows some of the more common ways an enduring attorney fails to carry out their responsibilities.(239) In 1997 an elderly woman appointed her son and her daughter as her joint attorneys under an enduring power of attorney. Her son had been assisting her with her financial affairs for more than a decade and she had become increasingly dependent on him. However in 2002 she revoked this power of attorney and appointed her son as her sole enduring attorney. This power of attorney authorised her son, as his mother’s attorney, to enter conflict transactions, contract with himself and his relatives, conduct business and make and receive fees for professional services carried out by him for her. Immediately afterwards, he began the process of selling his mother’s unit, her only significant asset. On the day of settlement the son acknowledged a debt to his mother which his mother immediately forgave him. She also gave him another substantial gift of money straight out. The then Guardianship and Administration Tribunal found that the elderly woman did not have the capacity to make the 2002 power of attorney. The Tribunal revoked that power of attorney. It also ordered that the joint attorneys were no longer authorised to act under the 1997 power of attorney as it had been overtaken by the Tribunal making an administration order. The Tribunal made the administration order because it found that the son had:- unjustifiably refused to pay his mother’s nursing home fees allowing arrears to accumulate,
- failed to pay his mother’s pharmacy accounts despite reminders from the pharmacy,
- failed to pay his mother’s fees to a plastic surgeon, for surgery carried out.(240)
10.11.1 New South Wales
In the 2010 case, Szozdz v Szozda, Barrett J of the Supreme Court of New South Wales, noting that the question of the mental capacity of a maker of an enduring power of attorney could arise in a range of legal proceedings before the Supreme Court, held that the Powers of Attorney Act 2003 (NSW) did not create an exclusive code for the Court and the then Guardianship Tribunal (now the Guardianship Division of NCAT) to deal with that issue. Consequently the Supreme Court retained its established jurisdiction to deal with that matter.(243) However, it is suggested that if the purpose of the application to the Court is simply to review an enduring power of attorney, the proper course is to make the application under the provisions of the Powers of Attorney Act 2003 (NSW). Nevertheless, if the application raises issues that NCAT lacks the jurisdiction to deal with, and the Court has that jurisdiction, then it is appropriate for NCAT to refer the application to the Court. The Court has power under the Act to refer an application made to it to NCAT, and NCAT may refer applications to it to the Supreme Court. A non-exclusive list of considerations either the Court or NCAT may take into account is set out in the Act. (244)10.11.1.1 Who may apply for and be party to a review?
In New South Wales both NCAT and the Supreme Court have the discretion decide whether or not to review either the making or the operation and effect of an enduring power of attorney when an application is made to them by any of the following “interested persons”:- an enduring attorney;
- the maker of the enduring power of attorney to be reviewed;
- a guardian or enduring guardian of the maker; or
- any other person who, in the opinion of NCAT or Court, has a proper interest in the proceedings or a genuine concern for the welfare of the maker.(245)
- any other attorneys under the enduring power of attorney;
- the maker of the enduring power of attorney to be reviewed; and
- any other person that NCAT or Court joins as a party.(248)
10.11.1.2 Reviewing the making or revocation of an enduring power of attorney - declarations of incapacity and invalidity
NCAT or the Court may make either or both of the following orders about the making of the enduring power of attorney:- an order declaring that the maker did or did not have the mental capacity to make a valid power of attorney at the time they made the enduring power of attorney being reviewed, and
- an order declaring that the power of attorney is invalid (either in whole or in part) if the Tribunal or Court was satisfied that:
(a) the maker did not have the capacity necessary to make the enduring power of attorney,
(b) the enduring power of attorney did not comply with the other requirements of the Powers of Attorney Act 2003 (NSW) applicable to it, or
(c) the enduring power of attorney was invalid for any other reason, for example, the maker was induced to make it by dishonesty or undue influence.(249)
In addition, NCAT or the Court may make either or both of the following orders in relation to the revocation of the enduring power of attorney: - an order declaring that the maker did or did not have the mental capacity to revoke the power of attorney at the time they did so in relation to the enduring power of attorney being reviewed, and
- an order declaring that the power of attorney remains valid (either in whole or in part) if the Tribunal or Court was satisfied that:
(a) the maker did not have the capacity necessary to revoke the enduring power of attorney, or
(b) the enduring power of attorney was invalid for any other reason, for example, the maker was induced to make the revocation by dishonesty or undue influence.(250)
10.11.1.3 Reviewing the operation and effect of an enduring power of attorney
If the review is about the operation and effect of an enduring power of attorney, NCAT or the Court may make one or more of the following orders if it is satisfied that either it would be in the best interests of the maker to do so or it would better reflect the wishes of the maker:(251) These cases demonstrate how family conflict often culminates in applications to the Tribunal, and the strong consideration by the Tribunal of financial capacity, need and the person’s wishes at the same time; as mandated by the Guardianship Act [1987] in making, or as seen in these cases, not making financial management orders. This is particularly important when the alternative to a validly made enduring attorney appointment by the person, is a more restrictive and more distant control over the person’s finances as a result of a financial management order appointing the NSW Trustee.- an order varying a term of, or a power conferred by, the power of attorney
- an order removing an attorney from office,(252)
- an order appointing a substitute attorney to replace an attorney who has been removed from office or who otherwise vacates the office,
- an order reinstating a power of attorney that has lapsed by reason of any vacancy in the office of an attorney and appointing a substitute attorney to replace the attorney who vacated office,(253)
- an order directing or requiring any one or more of the following:
(a) that an attorney furnish accounts and other information to NCAT or the Court or to a person nominated by NCAT or the Court,(254)
(b) that an attorney lodge with NCAT or the Court a copy of all records and accounts kept by the attorney of dealings and transactions made by the attorney under the power,(255)
(c) that those records and accounts be audited by an auditor appointed by NCAT or the Court and that a copy of the report of the auditor be furnished to NCAT or the Court,
(d) that the attorney submit a plan of financial management to NCAT or the Court for approval,
(f) an order revoking all or part of the power of attorney,(256) or
(g) such other orders as the NCAT or the Court thinks fit.(257)
(b) that an attorney lodge with NCAT or the Court a copy of all records and accounts kept by the attorney of dealings and transactions made by the attorney under the power,(255)
(c) that those records and accounts be audited by an auditor appointed by NCAT or the Court and that a copy of the report of the auditor be furnished to NCAT or the Court,
(d) that the attorney submit a plan of financial management to NCAT or the Court for approval,
(f) an order revoking all or part of the power of attorney,(256) or
(g) such other orders as the NCAT or the Court thinks fit.(257)
10.11.1.4 Advice or directions
An enduring attorney may apply for advice or direction by NCAT or the Court on any matter relating to the scope of the attorney’s appointment or the exercise of any function by the attorney under the power of attorney. When determining any such application, NCAT or the Court may decide to:- approve or disapprove of any act proposed to be done by the attorney,
- give such advice or direction as it considers appropriate, or
- vary the effect of the enduring power of attorney or make any other order (set out above) it could make if it was dealing with an application to review the enduring power of attorney.(262)
10.11.1.5 A power of attorney is suspended while the estate of the maker is under management
If NCAT, the Supreme Court or the Mental Health Review Tribunal makes an order placing the estate (the financial affairs) of a person under management, no power of attorney of the person is terminated by that order. However, any such power of attorney is suspended during the time the (financial) management order is in operation.(264) However, if NCAT makes an order excluding a specified part of the estate from the order, it may order that the power of attorney is to remain in force in respect of so much of the estate as is excluded from the financial management order concerned.(265)10.11.2 Queensland
10.11.2.1 Who may apply for and be party to a review?
In Queensland both QCAT and the Supreme Court have the power to deal with applications for a declaration, order, direction, recommendation or advice about something in, or related to, an enduring power of attorney.(266) The following may make such applications about an enduring power of attorney:- the maker of the enduring power of attorney,
- a member of the maker’s family,(267)
- an attorney under the enduring power of attorney,
- the Adult Guardian or Public Trustee, or
- a person the Tribunal or Court considers an interested person.(268)
10.11.2.2 Declarations of incapacity and invalidity
QCAT or the Court may make a declaration about a person’s capacity at the time they made the enduring power of attorney or at any other relevant time.(269) QCAT or the Court may also decide on the validity of an enduring power of attorney and may declare it invalid if satisfied that:- the maker did not have the capacity necessary to make it,(270)
- the enduring power of attorney does not comply with the other requirements of the Powers of Attorney Act 1998 (Qld), or
- the enduring power of attorney is invalid for another reason, for example, the maker was induced to make it by dishonesty or undue influence.(271)
10.11.2.3 Advice or directions
In relation to these applications, the powers of QCAT and the Court extend to giving directions or advice or making recommendations, order or declarations about:- the interpretation of the terms of, or another issue involving an enduring power of attorney or advance health directive, or
- the exercise of an enduring attorney’s power or another issue involving their power.(274)
10.11.2.4 QCAT’s or the Court’s other powers when reviewing the making, operation and effect of an enduring power of attorney
If QCAT or the Court considers it in the best interests of the maker, it may, authorise an enduring attorney, either generally or in a specific case, to undertake a transaction that they were not otherwise authorised to undertake.(275) QCAT or the Court may, on its own initiative or on the application of the maker or an interested person order that:- the enduring attorney files with it, and serves on the applicant, a summary of receipts and expenditure or more detailed accounts of dealings and transactions under the power of attorney for a specified period,
- the accounts be audited by an auditor appointed by QCAT to the Court and that a copy of the auditor’s report be given to it and the applicant(276), or
- the enduring attorney present a plan of management for approval.(277)
10.11.3 South Australia
In South Australia the Supreme Court, but not SACAT, has the jurisdiction to deal with enduring powers of attorney. It will deal with applications from any person who, in its opinion, has a proper interest in the matter for orders 1, 2, 3 and 4 below.(278) The enduring attorney may apply for orders 3, 4 and 5 while the Court may make the orders set out in 1 to 6 below when dealing with any of these applications. The Court may, by order:- require an enduring attorney (or former one) to file in the Court and serve on the applicant a copy of all records and accounts kept by the enduring attorney of dealings and transactions made by the enduring guardian when exercising the enduring power of attorney,
- require that such records and accounts to be audited by an auditor appointed by the Court and that a copy of the report of the auditor to be given to the Court and the applicant,
- revoke or vary the terms of the enduring power of attorney,
- appoint a substitute enduring attorney,(279)
- give advice and direction as to matters connected with the exercise of the enduring power of attorney or the meaning of its terms, and
- make such other order (declaratory or otherwise) as to the exercise of the enduring power of attorney, or the construction of its terms, as the Court thinks fit.(280)
10.11.4 Tasmania
10.11.4.1 Who may apply for and be party to a review?
In Tasmania the Guardianship and Administration Board may hold a hearing to review an enduring power of attorney of its own motion or on application by the enduring attorney, by or on behalf of a maker or by any other person who the Board believes has a proper interest in the matter.(281) While the Supreme Court does not have this jurisdiction, the Board may seek the Court’s advice by referring a special case to it for its opinion. Also the Board’s decisions under the Powers of Attorney Act 2000 (Tas) may be appealed to the Supreme Court.(282)10.11.4.2 Orders the Board may make on review including declarations of incapacity and invalidity
After conducting the review the Board may, by order:- vary a term of, or a power conferred by, the enduring power of attorney,
- appoint a substitute enduring attorney,
- appoint an administrator of the estate of the maker of the enduring power of attorney,
- declare that the maker did or did not have mental capacity to make a valid enduring power of attorney,
- revoke the enduring power of attorney and, if the maker is over the age of 18 years and the Board thinks fit, appoint an administrator of his or her estate,(283)
- make such other order as to the exercise of the power, or the construction of its terms, as it thinks fit, or
- declare that the enduring power of attorney is invalid if it is satisfied that:
- the maker did not have the mental capacity to make it,
- it does not comply with the other requirements of the Powers of Attorney Act 2000 (Tas), or
- it is invalid because the maker was induced to make it by dishonesty or undue influence or invalid for any other reason.(284)
- appoint the Public Trustee or any other person as a substitute attorney, and
- make such other orders, and give such other directions, as to the exercise of the power as it thinks fit.(285)
10.11.4.3 Advice or directions and the exercise of other powers
An enduring attorney may apply for advice or direction by the Board on any matter relating to the scope of their appointment or the exercise of any power by the enduring attorney under the enduring power of attorney. Such applications can be made formally or informally to the Board. The Board may require notice to be given or may exercise its powers without a hearing. The Board may then exercise a wide range of powers. It may:- approve or disapprove of any act proposed to be done by the attorney,
- give such advice or direction as it considers appropriate,(286) and
- vary the effect of the enduring power of attorney, or
- make any other order that it could have made on an application to review the enduring power of attorney.
- require an attorney to lodge with it a copy of all records and accounts kept by the enduring attorney of dealings and transactions made by them under the enduring power of attorney,
- require those records and accounts to be audited by an auditor appointed by it and require a copy of the report of the auditor to be given to it, or
- require the enduring attorney to submit a plan of financial management to the it.(287)
10.11.5 Victoria
Note that the jurisdiction of VCAT set out below in relation to enduring powers of attorney applies also to enduring powers of attorney made under the now repealed provisions of the Instruments Act 1958 (Vic).(288) In Victoria on application by a person referred to in 10.11.5.1, or on its own initiative in any hearing before it, VCAT may make an order about any one or more of the following matters in relation to an enduring power of attorney:- any matter for or with respect to an attorney's power under the enduring power of attorney including the following;the effect of any failure to comply with the method of execution of enduring powers of attorney or of instruments of revocation of enduring powers of attorney required by the Powers of Attorney Act 2014 (Vic);
- the scope of the power of attorney;
- the exercise of the power of attorney;
- the validity of the enduring power of attorney;
- the validity of a transaction by an attorney under the enduring power of attorney if VCAT is satisfied there has been a failure to comply with duties of attorneys or requirements of Part 6 of the Act, or for any other reason;
- the lodgement with VCAT of accounts or other documents relating to the exercise of the enduring power of attorney over a specified period by the attorney responsible under this Act for keeping them;
- the examination and auditing of accounts or other documents relating to the exercise of the enduring power of attorney over a specified period, including;
- determining the person to be responsible for examining or auditing the accounts or other documents; and
- whether the person responsible under subparagraph (i) for carrying out the examination or audit should be paid and the amount of any such payment;
- giving a report on any examination and audit conducted under an order under paragraph 6 to;any other matter VCAT considers necessary in relation to the enduring power of attorney.(289)
- VCAT; and
- the applicant or any other person ordered by VCAT;
10.11.5.1 Who may apply for an order?
The following may apply to VCAT for an order in relation to any of the matters listed 1 to 8 above:- an attorney under the enduring power of attorney,
- the maker of the enduring power of attorney,
- the Public Advocate,
- the nearest relative of the maker(290), or
- another person whom VCAT is satisfied has a special interest in the affairs of the maker.(291)
10.11.5.2 Who is a party and who is entitled to notice of different aspects of the hearing and determination of the application?
The following are parties to the hearing of an application in relation to an enduring power of attorney:- the applicant, namely one of the persons listed in 10.11.5.1 above;(293)
- (if not the applicant) the maker of the enduring power of attorney;
- (if not the applicant) any attorney under the enduring power of attorney(294); and
- any person joined as a party to the proceeding by VCAT.(295)
- any guardian, alternative guardian of the maker, administrator, domestic partner(296), the primary carer or the nearest relative(297) of maker;
- the Public Advocate; or
- any other person.(298)
10.11.5.3 Orders VCAT may make when reviewing enduing powers of attorney
When dealing with an application or on its own initiative, VCAT may do one or more of the following:- revoke all or part of the enduring power of attorney;
- revoke the appointment of an attorney under the enduring power of attorney;
- vary the effect of the enduring power of attorney;
- suspend the enduring power of attorney for a specified period, either generally or as to a specified matter;
- authorise or validate a conflict transaction;(300)
- make any other order it considers necessary in relation to the enduring power of attorney; or
- do any other thing that VCAT is required or permitted to do by this Act.(301)
10.11.5.4 Legislative criteria to be considered in an application or a VCAT initiated hearing in relation to revoking an enduring power of attorney
Before it may revoke the appointment of an attorney under the enduring power of attorney, VCAT must be satisfied that:- the attorney is not complying with provisions of the Act that relate to enduring powers of attorney; and
- the maker does not have decision-making capacity in relation to making an enduring power of attorney giving the same power.(303)
10.11.5.5 Legislative criteria to be considered in relation to compliance with execution requirements
VCAT has to power to decide that an enduring power of attorney is valid even though the requirements for execution of the power of attorney under the Act were not complied with. However, it may not do so unless is satisfied that:- the maker and attorney both intended the document to be an enduring power of attorney; and
- at the time the document was signed, the maker had decision-making capacity in relation to the making of the enduring power of attorney; and
- the maker, either signed the document freely and voluntarily; or freely and voluntarily directed the person who signed the document for the maker to do so, and was present when that person signed the document.(304)
10.11.5.6 Legislative criteria to be considered in relation to whether or not an enduring power of attorney was valid.
When dealing with the issue of validity, VCAT must not make an order declaring that an enduring power of attorney is invalid unless it is satisfied that:- the maker did not have decision-making capacity in relation to making the enduring power of attorney at the time the enduring power of attorney was made; or
- at the time the enduring power of attorney was made it did not comply with the requirements of the Act; or
- dishonesty or undue influence was used on the maker to make the enduring power of attorney; or
- the enduring power of attorney was legally invalid when entered into.(306)
10.11.5.7 Advisory opinions
VCAT may give an advisory opinion on any matter relating to an enduring power of attorney that is referred to it by application or on its own initiative.(308) The scope of this power is apparently very broad, but the limits of its reach may become apparent in future cases.10.11.6 Western Australia
In Western Australia, under the Guardianship and Administration Act 1990 (WA), WASAT may, when application is made to it, make certain orders in relation to enduring powers of attorney.(309) The Act does not affect the Supreme Court’s inherent jurisdiction.(310) However, WASAT takes the view that it was given a general supervisory jurisdiction over enduring powers of attorney that it may exercise even after the maker of the power of attorney has died.(311)10.11.6.1 Who may apply for the intervention of WASAT?
Anyone who, in the opinion of WASAT, has a proper interest in the matter may apply to WASAT for the limited kinds of orders listed below. When dealing with an application, WASAT may hear only the applicant’s case making an order (make an ex parte order) or give directions as to who shall be given notice of the application and who shall be entitled to be heard before WASAT makes its order.(312)10.11.6.2 Orders WASAT can make
The orders WASAT may make in dealing with such an application are limited to a degree. They do not include the power to make declarations as to the capacity of a maker of an enduring power of attorney or as to the validity of an enduring power of attorney.(313) However, WASAT may revoke a power of attorney on application.(314) Such applications are often linked with applications to WASAT to make an administration order in relation to the estate of the maker of the enduring power of attorney.(315) These matters are taken up in the following paragraphs. The orders that WASAT may make on the application of a person with a proper interest, including an enduring attorney, to intervene in relation to an enduring power of attorney are orders:- requiring the enduring attorney to file with it, and serve on the applicant, a copy of all records and accounts kept by the enduring attorney of dealings and transactions made by the enduring attorney in connection with the power,(316)
- requiring such records and accounts be audited by an auditor appointed by it and requiring a copy of the report of the auditor to be given to it and the applicant for the order, or
- revoking or varying the terms of an enduring power of attorney, appointing a substitute enduring attorney or confirming that a person appointed to be the substitute enduring attorney has become the enduring attorney.(317)
10.11.7 Australian Capital Territory
In the Australian Capital Territory, ACAT is empowered to make a number of orders in relation to enduring powers of attorney or their makers when the maker has lost capacity (has impaired decision-making capacity). ACAT may make these orders when an application is made to it, but it may act on its own initiative when it is hearing a matter under the Guardianship and Management of Property Act 1991 (ACT).(325) The Supreme Court may deal with applications about the powers of an enduring attorney while the Public Trustee and the Public Advocate also have roles.(326)10.11.7.1 Who may apply for and be party to a review?
The following may make applications to ACAT, as interested persons, in relation to enduring powers of attorney but usually only when the maker of the power of attorney has impaired decision-making capacity:- the enduring attorney,
- the maker,
- a relative of the maker,(327)
- the Public Advocate,
- the Public Trustee,
- the maker’s guardian,
- the manager (administrator) of the maker’s estate, or
- any other person, with the leave of the Tribunal.(328)
10.11.7.2 Declaration of incapacity
On application, ACAT may declare whether the maker of an enduring power of attorney has decision-making capacity or impaired decision-making capacity.(329)10.11.7.3 Advice, directions or other orders
When dealing with an application at a time when the maker of an enduring power of attorney has impaired decision-making capacity, ACAT may, by order:- give a direction, not inconsistent with Powers of Attorney Act 2006 (ACT) or the enduring power of attorney, that the enduring attorney do or not do a stated act,
- direct the enduring attorney to produce stated books, accounts or other records of transactions carried out by the attorney for the maker,(330)
- revoke the enduring power of attorney, or part of it or(331)
- make a declaration about the interpretation or effect of the enduring power of attorney.(332)
10.11.7.4 Access to the maker of an enduring power of attorney who has impaired decision-making capacity
When the maker of an enduring power of attorney has impaired decision-making capacity, the Public Advocate is entitled to reasonable access to them.(335) Also, ACAT may grant an interested person, as defined in 10. 11.7. 1 above, access to the maker, with or without conditions, if it is satisfied that an enduring attorney has denied the person access to the maker and it is reasonable to allow the access.(336)10.11.8 Northern Territory
On 29 July 2016, the Northern Territory Civil and Administrative Tribunal (NTCAT) replaced the Local Court as the tribunal with a broad jurisdiction to hear and determine matters relating to advance personal plans and other matters arising under the Advance Personal Planning Act (NT).(337) Also on that day NTCAT commenced its jurisdiction to make guardianship orders under the Guardianship of Adults Act (NT).(338) This means that since 29 July 2016 NTCAT, has had jurisdiction under the Advance Personal Planning Act (NT) to make declarations and orders about a range of matters relating to advance personal plans. These are set out in the next paragraph. In addition, while NTCAT is exercising it jurisdiction under the Guardianship of Adults Act (NT) to appoint guardians, it will from time to time, need to exercise its jurisdiction revoke or vary advance personal plans and dismiss the decision maker appointed by the maker of the plan or change, vary or amend the scope of authority of the decision maker appointed under the plan should now have in the light of the current circumstances and needs of the maker of the plan. When dealing the matters arising in applications before it under both Acts, NTCAT must act in accordance with the decision-making principles set out in the Advance Personal Planning Act (NT) as if it were a decision maker and the guardianship principles set out in the Guardianship of Adults Act (NT).(339) Among other things, it may make declarations as to one or more of the following which relate to financial matters and, for the purposes of this part of this chapter, personal matters as well:- whether the maker of the advance personal plan has impaired decision-making capacity for a matter;
- whether an advance personal plan is or is not valid;
- whether a statement in an advance personal plan about health care action is an advance consent decision or an advance care statement;
- whether an advance consent decision or advance care statement is or is not applicable in a particular circumstance;
- whether or not a decision maker has authority for a matter;
- the scope of the authority of a decision maker;
- any other matter relating to the validity, effect or meaning of an advance personal plan (including an advance consent decision, advance care statement or appointment in the plan);
- any other matter relating to the making of a consent decision about health care action for an adult who has impaired decision-making capacity for making the consent decision;
- and the “catch-all” provision any other matter arising for determination under the Act.(340)
- as to how the decision maker may, must, or must not, exercise their decision maker's authority so as to comply with their obligation act in accordance with the decision-making principles set out in the Act;(341)
- if 2 or more decision makers who are appointed to exercise their authority for a matter jointly are unable to reach a unanimous decision as required by the Act – to facilitate the resolution of their differences;(342)
- authorising the decision maker to act in certain ways in relation to the maker’s property;(343)
- authorising the decision maker to make a gift not otherwise permitted;(344)
- authorising the decision maker to make a provision for the needs of a dependant not otherwise permitted;(345)
- approving reimbursement for the decision maker from the maker for reasonable costs incurred in acting as decision maker;(346)
- approving remuneration for the professional decision maker from the maker;(347)
- approving reimbursement or remuneration to a person who is the or a decision maker for the maker, but who provides other services to the maker;(348)
- if the maker has 2 or more agents – to facilitate a reasonable and workable division of decision-making authority between the agents.(349)
- if maker is still alive – the orderly transfer of decision-making authority from that person to the maker or to another agent for the adult (as appropriate); or
- if the maker has died – the orderly transfer of the maker’s estate to the executor or administrator of the estate.(352)
- giving effect to the plan is, for all practical purposes, impossible;
- giving effect to the plan is unlawful;
- giving effect to the advance care statement in the plan would impose a burden on another person that is so unreasonably onerous that it is justifiable to override the maker's wishes;
- there is no reasonable possibility the maker would have intended the plan to have the effect that it has or will have;
- giving effect to the plan would be so unreasonable that it is justifiable to override the maker's wishes;
- when making the plan (or an amendment of it) the maker:
- was not acting voluntarily; or
- was adversely affected by the dishonesty or undue influence of another person;
- a decision maker appointed by the plan has failed to comply with s. 21(1) of the Act;
- there has been a major change in circumstances since the plan was made;(353)
- the maker has 2 or more agents and an amendment of the plan is necessary to facilitate a reasonable and workable division of decision-making authority between the agents.(354)
10.11.8.1 What matters must NTCAT take into account when considering making a guardianship order where the person the subject of the application has already made an advance personal plan
As has been noted in the last section, in the exercise of its jurisdiction of the Advance Personal Planning Act (NT), NTCAT may revoke an advance personal plan, dismiss a decision maker appointed by the maker of an advance personal plan or make changes to the provisions of the plan if certain criteria were met. Situations will arise in which it will be appropriate for NTCAT to take such actions while, at the same time make a guardianship order. When NTCAT forms the view that such a situation exists and decides to make a guardianship order, it must act in accordance with the guardianship principles set out in the Guardianship of Adults Act (NT) when making such an order.(359) These principles require NTCAT to exercise its decision maker’s authority in the best interests of the person the order is about.(360)In determining what is in the best interests of that person NTCAT must:- seek to obtain the current views and wishes of the person the subject of the application for a guardianship order, as far as it is practicable to do so; and
- take into account all relevant considerations; and
- weigh up the relevant considerations, giving each of them the weight that NTCAT reasonably believes is appropriate in the circumstances.(361)
- the person's current views and wishes and previously stated views and wishes;
- any views and wishes stated by an interested person for the person;(364)
- maintenance of the person's freedom of decision and action to the greatest extent practicable;
- the ability of the person to be as independent as is practicable;
- protection of the person from harm, neglect, abuse and exploitation;
- providing the person with appropriate care, including health care;
- promoting the adult's happiness, enjoyment of life and wellbeing;
- the ability of the person to achieve their maximum physical, social, emotional and intellectual potential;
- the ability of the person to live in the general community and take part in community activities;
- maintenance of the person's right to be treated with dignity and respect;
- the ability of the person to maintain their preferred living environment and lifestyle;
- maintenance or creation of a support network for the person;(365)
- protection of the person's property and financial resources from loss, damage or misuse;
- protection of the person's right to confidentiality of information about them
10.11.8.2 Transitional provisions relating to enduring powers of attorney made under the Powers of Attorney Act (NT)
As has already been noted, since 17 March 2014, enduring powers of attorney cannot be created in the Northern Territory. However, the Supreme Court has the power to deal with enduring powers of attorney, made before that date, at any time after the maker of the enduring power has become legally incapacitated. The Public Trustee or any agent of the maker of an enduring power of attorney may apply to the Supreme Court for any of the following orders – an order:- requiring the enduring attorney to file in the Court and serve on the applicant a true and accurate record of any transaction entered into by the enduring attorney charging or otherwise disposing of, whether for valuable consideration or otherwise, any of the assets of the maker,
- requiring such records as referred to in the order to be audited by an auditor appointed by the Court, and requiring a copy of the report of that auditor to be given to the Court and the applicant , or
- revoking or varying the terms of the enduring power of attorney in such manner as the Supreme Court thinks fit, including appointing the Public Trustee or another person as a substitute enduring attorney, and
- Appointing the Public Trustee as a substitute enduring attorney.(366)
10.12 Liability for compensation and criminal liability and professional obligations of lawyers
10.12.1 Liability for compensation and criminal liability
The Powers of Attorney Act 2014 (Vic) has broken new ground in Australia at least by empowering both VCAT and the Victorian Supreme Court to order an attorney under an enduring power of attorney to compensate the maker for a loss caused by the attorney contravening any provision of the Act relating to enduring powers of attorney when acting as attorney under the power of attorney.(368) The Act also makes it a criminal offence to for a person to obtain dishonestly:- an enduring power of attorney,
- the revocation of an enduring power of attorney, or
- use an enduring power of attorney
10.12.2 Professional obligations of lawyers
In Chapter 9 and also in the current chapter, Chapter 10, of this book we have described the legislatively created appointments of enduring guardians and enduring powers of attorney. These are key elements of the policy of allowing, and indeed encouraging, people to extend their decision-making capacity into times when they have lost that capacity either temporarily or permanently. Advance directives, by whatever name, and whether they are created under legislation or the common law, are also part of this policy and are dealt with in Chapter 13 and to a lesser extent in Chapters 12 and 14. Encouraging people to “plan ahead” by appointing trusted family members or others to make personal, including medical, and financial decisions for them, with or without conditions or directions, and also by making advance decisions about treatment at the end if life, has great advantages, but some disadvantages too. What we are going to touch upon here is in relation to financial matters essentially, and in particular the increasing number of situations when lawyers, particularly solicitors, are, and will continue to be, called upon to prepare and go through the processes required of them, either by legislation or by good professional practice, to draft, explain and/or witness a maker/principal/donor sign an enduring power of attorney (or equivalent document, depending what State or Territory the document has been created in). Solicitors, particularly those in general practices will occasionally find themselves approached by a family member, or “new-found friend”, seeking to instruct them to draft an enduring power of attorney for another, usually older and reasonably well-off, family member etc. Despite the source of the instructions, the proposed maker of the enduring power of attorney is, and always remains, the solicitor’s client. The solicitor must act in that person’s interests and ensure that any instructions received are given by that person, or given by another person with the approval of that person. Where the instructions given appear to be contrary to the interests of the person who will become the maker of the proposed enduring power of attorney, whether they are obtained from that person or another person, that fact, and the reasons why it is contrary to their interests must be explained to them, and in the absence of others. If the maker of the proposed enduring power of attorney does not understand that advice, that should operate as a warning that that person may lack the decision-making capacity to make the enduring power of attorney. The solicitor should then consider obtaining an assessment from a qualified person of the maker’s decision-making capacity to make the enduring power of attorney, or refusing to act in the matter. (370) In addition to the possibility of criminal charges and the payment of statutory compensation referred to in 10.12.1 above, solicitors need to be aware that failure to pay attention to proper professional practices and legislatively required procedures, may lead to investigation by the profession’s governing bodies and findings of unsatisfactory professional conduct or professional misconduct. Financial abuse of the elderly is a current and ongoing concern of the public, which often commences with the making of an enduring power of attorney by an elderly person not appreciating what they are doing, and leads to the improper use of that person’s financial resources. (371) A 2017 case from New South Wales shows the Occupational Division of NCAT making findings, among other things, of misuse of an enduring power of attorney, leading to findings of both unsatisfactory professional conduct and professional misconduct.(372) In 2018 the solicitor was struck off the roll of solicitors in New South Wales.(373) While the case involved very serious misconduct, it further illustrates the concerns of the profession’s disciplinary bodies to financial abuse of the elderly. There are indications from decisions of the High Court of Australia, the Full Court of the Federal Court, the New South Wales Court of Appeal and the Supreme Court that modern equity may develop to create liability in those who help others benefit from breaching their fiduciary duty to another person. There has been considerable discussion in judicial decisions and in equity textbooks about extension of the application of the rule in the 19th century English case Barnes v Addy.(374) As Lindsay J pointed out in Reilly v Reilly: “The rule in Barnes v Addy is conventionally treated as involving two forms of liability, respectively described as the “first limb” (involving a “knowing receipt” of trust property) and the “second limb” (involving “knowing assistance” in a dishonest and fraudulent design on the part of a trustee)”.(375) For a consideration of related cases see, 10.6.1.4, above.10.13 Supportive attorneys
10.13.1 Introduction
The concept of supportive attorneys was introduced into Victoria by the Powers of Attorney Act 1958 (Vic) which came into force on 1 September 2015. The role of a supportive attorney is to support the person who appoints them to make and then give effect to (act on) to decisions relating to financial or personal matters. The Act describes a supported decision as being a decision about a matter that, under a supportive attorney appointment, the supportive attorney is authorised to support the principal in making.(376) As the Attorney-General pointed out in his second reading speech introducing the legislation:The availability of such appointments will help promote autonomy and dignity for people with a disability who have the capacity to make various decisions for themselves, provided they have support to make and give effect to those decisions. It provides legislative acknowledgement that mechanisms other than substituted decision making can be used to allow people with a disability to engage in activities requiring legal capacity and to make and give effect to decisions that affect their lives.(377)As the Attorney-General also noted in his second reading speech, the Act allows an appointor to specify whom they want to support them in their decision-making, the types of decisions they want support to make and the types of support they want in order to make and give effect to those decisions. The Attorney-General suggested that this would also provide certainty for third parties, allowing them to deal with a supportive attorney more confidently than if the relationship were informal, and thus better enabling appointors to have their wishes and decisions respected and implemented.(378)
10.13.2 Who may appoint a supportive attorney?
In order to appoint a supportive attorney, a person must be 18 years or over and have decision-making capacity in relation to making a supportive attorney appointment they made. We suggest that a useful approach to the assessment of capacity to appoint a supportive attorney is to adopt the same schema of the “why”, the “what”, the “who” and the “freedom” of the appointment. In doing so, given that the intent of this legislation is to afford people with disability the autonomy and dignity aspired to in Article 12 of CRPD, it is important not to make the bar for capacity too high. Some thought needs to go into the “why” of the appointment of a supportive attorney, particularly in considering who might be appropriate candidates for making such an appointment. This goes to the common law presumption of capacity and the principle of preference for least restrictive and informal means of support for people with disability. There may well be pressure exerted on people with decision-making disabilities, and possibly those with disabilities not affecting their decision-making capacity, to make such appointments whether they want to or not. There may be an expectation that long term informal arrangements that have worked well in the past be formalised, raising the unwanted need to choose between informal supporters for the role of supportive attorney (or attorneys). Importantly, the appointment should not replace advance planning, which is advisable for all, with or without disability, particularly in light of provisions under s 116(2) of the Act where VCAT may make an order about the effect of the appointor not having decision-making capacity on the supportive attorney appointment. In regards to the “what” of the appointment, in order to have the required decision-making capacity, the appointor must understand the following matters:- that the appointment enables the appointor to make and give effect to their own decisions with support; and
- that the appointment allows the appointor to choose a person to support them to make and give effect to their own decisions; and
- that supported decisions are decisions of the appointor and not the supportive attorney; and
- when the appointment commences; and
- that the appointor may revoke the appointment at any time when they have decision-making capacity in relation to making the supportive attorney appointment.(379)
without more empirical evidence as to how supported decision-making functions in practice, it is too early to rule out the possibility it may actually disempower individuals with disabilities by facilitating undue influence by their alleged supporters.(383)Bigby et al(384) undertook an exploratory qualitative study into processes and dilemmas that arise in providing supported decision making to people with cognitive disability, with focus on people with intellectual disability and acquired brain injury. In-depth interviews and focus groups were held with 46 participants; including people with cognitive disability, family members, disability support workers and legal professionals. Some of the dilemmas and tensions identified included difficulties remaining neutral, managing conflicting perspectives amongst differing supporters, balancing rights with risk and best interests, resource constraints, managing power differentials and the risk of undue influence.
10.13.3 Who may be appointed a supportive attorney?
Only physical persons and not corporations or other bodies that have legal personality are eligible to be appointed as supportive attorneys. They must be:- 18 years of age or over; and
- not an insolvent under administration; and
- if to be a supportive attorney for financial matters—
- have not been convicted or found guilty of an offence involving dishonesty; or
- if the person has been convicted or found guilty of an offence involving dishonesty, has disclosed the conviction or finding of guilt to the appointor and the disclosure of the conviction or finding of guilt has been recorded in the supportive attorney appointment form; but
- cannot be a care worker, a health provider or an accommodation provider for the appointor.(385)
- are eligible to act as a supportive attorney; and
- understand the obligations of a supportive attorney under the Act and the consequences of failing to comply with it; and
- undertake to act in accordance with the Act.
10.13.4 Commencement of appointment and powers, duties and obligations of supportive attorneys
The appointor may specify in the appointment one of the following as the commencement of the appointment:- the time from which it is to operate,
- the circumstance in which it is to operate, or
- the occasion on which it is to commence.
- Information power;
- Communication power; and
- Power to give effect to decisions
- act honestly, diligently, and in good faith; and
- exercise reasonable skill and care; and
- not use the position for profit; and
- avoid acting where there is or may be a conflict of interest and, if acting where there is a conflict of interest, must ensure that the interests of the appointor are the primary consideration; and
- discuss anything about a supported decision with the appointor in a way the appointor can understand and that will assist the appointor to make the decision.(396)
10.13.5 What applications in relation to supportive attorneys can be made to VCAT?
On application by a person referred to in 10. 13. 5. 1, or on its own initiative in any hearing before it, VCAT may make an order about any one or more of the following matters in relation to a supportive attorney appointment:- the appointor’s decision-making capacity for the matters to which the supportive attorney appointment applies, whether at the time the appointment was made or any time after that, and the effect of the appointor not having decision-making capacity on the supportive attorney appointment;
- the effect on the supportive attorney appointment of any failure to comply with a requirement of this Act;
- whether the supportive attorney has failed to comply with the terms of the appointment or is exercising undue influence over the appointor;
- any other matter VCAT considers necessary in relation to the supportive attorney appointment.(399)
10.13.5.1 Who may apply for an order?
The following may apply to VCAT for an order in relation to a supportive attorney appointment:- any supportive attorney appointed under the supportive attorney appointment the subject of the application,
- the appointor of the supportive attorney appointment,
- the Public Advocate,
- the nearest relative of the appointor(401), or
- another person whom VCAT is satisfied has a special interest in the affairs of the appointor.(402)
10.13.5.2 Who is a party and who is entitled to notice of different aspects of the hearing and determination of the application?
The following are parties to the hearing of an application in relation to a supportive attorney appointment:- the applicant, namely one of the persons listed in 10.13.5.1 above;(403)
- (if not the applicant) the appointor of the supportive attorney appointment;
- (if not the applicant) any supportive attorney under the supportive attorney appointment(404); and
- any person joined as a party to the proceeding by VCAT.(405)
- any guardian, alternative guardian of the appointor, administrator, domestic partner(406), the primary carer or the nearest relative(407) of appointor;
- the Public Advocate; or
- any other person.(408)
10.13.5.3 Orders VCAT may make when reviewing supportive attorney appointments
When dealing with an application or on its own initiative, and making an order in relation to a supportive attorney appointment, VCAT may do one or more of the following:- revoke the supportive attorney appointment;
- revoke the appointment of one or more supportive attorneys under the supportive attorney appointment;
- vary the effect of the supportive attorney appointment;
- suspend the supportive attorney appointment for a specified period, either generally or as to a specified matter; or
- make any other order it considers necessary in relation to the supportive attorney appointment.(410)
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