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Chapter 10 – Enduring Powers of Attorney

Contents

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 tests10. 3. 1. The common law tests – used in New South Wales, South Australia,Western Australia and the Northern Territory10. 3. 2. Queensland and Tasmania10. 3. 3. Victoria10. 3. 4. Australian Capital Territory

10. 4. Assessing capacity to make and revoke enduring powers of attorney10.4.1 The generic aspects of capacity assessment10.4.2 The application of the specific tests to the assessment of capacity

10. 5. Appointing attorneys under enduring powers of attorney10. 5. 1. Who may be appointed?10. 5. 2. Appointment procedures

10. 6. Responsibilities of attorneys appointed under enduring powers ofattorney10. 6. 1. Obligations of enduring attorneys10. 6. 2. Administrative powers and responsibilities of enduring attorneys

10. 7. Legislative limitations on things that attorneys can do underenduring powers of attorney10. 7. 1. The giving of gifts10. 7. 2. The giving of benefits to themselves and others by attorneys

10. 8. Registration of enduring powers of attorney

10. 9. Recognition of enduring powers of attorney made elsewhere inAustralia

10. 10. Effect on enduring powers of attorney of guardianship tribunalsand courts making administration orders10. 10. 1. New South Wales10. 10. 2. Queensland10. 10. 3. South Australia

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10. 10. 4. Tasmania10. 10. 5. Victoria10. 10. 6. Western Australia10. 10. 7. Australian Capital Territory10. 10. 8. Northern Territory

10. 11. Role of guardianship tribunals and courts in reviewing the makingand operation and effect of enduring powers of attorney10. 11. 1. New South Wales10. 11. 2. Queensland10. 11. 3. South Australia10. 11. 4. Tasmania10. 11. 5. Victoria10. 11. 6. Western Australia10. 11. 7. Australian Capital Territory10. 11. 8. Northern Territory

10. 1. IntroductionIn 1925 in Tasmania a woman gave her nephew a power of attorney toempower him to manage her affairs “if and whenever and so long as I shall beincapacitated by illness from attending to business”. Three months later thewoman was certified insane and hospitalised. The nephew managed thewoman’s estate and financial affairs until she died in 1928. Nicholls CJ heldthat the nephew did not have any authority to manage his aunt’s financialaffairs while she was insane.1 He relied upon an English court of Appeal casein which it was stated that the authority of an attorney ended when the personwho gave them power of attorney became insane.2

It probably was the case that many powers of attorney were made where thecapacity of the person to make a power of attorney was in doubt and that thepower of attorney continued to be exercised by the attorney even though theappointor had clearly lost capacity. Nevertheless, it was not until the 1980s thatlegislation was enacted to provide for enduring powers of attorney which aperson could make if they wanted their attorney to continue to manage theirfinancial affairs after they lost the capacity to manage them themselves and torevoke the power of attorney.

Since the 1980s many enduring powers of attorney have been made by adultswith a diagnosis of dementia and others in anticipation of them losing theircapacity to manage their financial affairs. While most of these enduring powersof attorney will have been made while the person was still capable and mostattorneys will have carried out their responsibilities as an attorney bothcompetently and ethically, some will have been made when the maker wasalready incapable and some attorneys will have acted contrary to the interests

1 In re Coleman (1929) 24 Tas SR 77.2 Drew v Nunn (1879) 4 QBD 661.

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of the person who appointed them. Also, many attorneys do not know whattheir responsibilities as attorneys are.

These matters have been addressed in legislation that has been revised orenacted since 1998. With the exception of South Australia and the NorthernTerritory, State guardianship tribunals and ACAT in the Australian CapitalTerritory have been given the task of reviewing the making and the operationof enduring powers of attorney. They have also been given the power to revokeor vary enduring powers of attorney and to call attorneys to account. In SouthAustralia and the Northern Territory this supervisory role is held by theSupreme Court.

This chapter deals with the capacity of adults to make powers of attorney,aspects of the responsibilities of attorneys when acting as attorneys forincapable people and the role of the guardianship tribunals and the SupremeCourts in reviewing the making of enduring powers of attorney and thecarrying out of their functions by attorneys appointed under enduring powers ofattorney.

10. 2. What is an enduring power of attorney?An enduring power of attorney is a form of agency through which a competentadult appoints another person or the relevant Public or State Trustee or a trusteecorporation as their agent to do certain things of a financial nature that themaker of the power of attorney has a legal right to do themselves. Like allagents, an attorney under an enduring power of attorney has no more powers toact than the person who appointed them. However, they are given the power bylegislation to continue to act as their appointor’s attorney even after theirappointor has lost their capacity either to appoint or rescind their appointmentof an attorney.

10. 3. Capacity to make enduring powers of attorney and to revoke them –the legal testsFor the purposes of this chapter it is assumed that the tests for capacity to makeenduring powers of attorney are the same as the tests for capacity to revokethem.

10. 3. 1. The common law tests – used in New South Wales, South Australia,Western Australia and the Northern TerritoryIn New South Wales, South Australia, Western Australia and the NorthernTerritory the test for capacity to make an enduring power of attorney is foundin the cases set out below.

In Queensland, and following it in Tasmania, Victoria and the AustralianCapital Territory, the test for the capacity to make an enduring power ofattorney is found in the powers of attorney legislation.

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The starting point for the common law is its presumption that an adult has themental capacity to enter any legal transaction or make any legal document suchas a will or a power of attorney. However, where the question of mentalcapacity is relevant, the statement of Dixon CJ, Kitto and Taylor JJ in Gibbonsv Wright sets out the general principle. They said:

[T]he mental capacity required by the law in respect of any instrument isrelative to the particular transaction which is being effected by means ofthe instrument, and may be described as the capacity to understand thenature of that transaction when it is explained.3

The approach of the High Court judges in Gibbons v Wright acknowledges thatmany of us will not know the nature and effect of most legal documents unlessthose matters are explained to us. In Ranclaud v Cabban Young J set out someof the specific matters that a maker of an enduring power of attorney had tounderstand in order to be capable of making a valid enduring power ofattorney. He noted that enduing powers of attorney permit the attorney toexercise any function which the maker of the power of attorney may lawfullyauthorise an attorney to do and that when considering whether a person wascapable of making an enduring power of attorney it was necessary to be surethat they understood not only that they were authorising someone to look aftertheir affairs but also the sort of things the attorney could do without furtherreference to them.4

In a 2005 case also involving an elderly person making numerous enduringpowers of attorney, the then Queensland Guardianship and AdministrationTribunal noted that Ranclaud v Cabban was a case in which a 79 year oldwoman made six enduring powers of attorney in favour, alternatively, of twodifferent persons over a 8 ½ month period. Young J was concerned thatbecause the woman had executed so many powers of attorney in such a shorttime she did not appear to have the ability to weigh up alternatives, makedecisions and give instructions which were likely to remain constant for anyperiod.5

The Queensland Tribunal applied Ranclaud v Cabban and, after making itsfindings of fact, was satisfied that Mr CEJ did not have the capacity to make orrevoke enduring powers of attorney since a certain date.6

In England the test for capacity to make an enduring power of attorney hasbeen summed up into four points. The maker must understand the nature andeffect of an enduring power of attorney they are making. This means that theymust appreciate that:

3 (1954) 91 CLR 423, 438, [1954] HCA 17 [7].4 NSW (1988) Conv R 55-385.5 Re CEJ [2005 QGAAT 30[24].6 Ibid. [26].

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1. the attorney will be able to assume complete authority over the maker'saffairs (or all those covered by the enduring power of attorney),

2. the attorney will in general be able to do anything with the maker'sproperty which they could have done,

3. the attorney’s authority will continue if the maker becomes mentallyincapable, and

4. in the event that they become mentally incapable, the power will beeffectively irrevocable.7

In 2007 in Queensland, following an unreported Supreme Court decision, thethen Guardianship and Administration Tribunal accepted expert medicalopinion that for most members of the community enduring powers of attorneywere both more unfamiliar and more complex than a will.8 Consequently, theTribunal considered that a higher level of cognitive ability and therefore ahigher standard of capacity would be required for making an enduring power ofattorney than for making a will.9

In 2008, in a case involving an enduring power of attorney sworn in theAustralian embassy in Lebanon, but conforming with the requirements of theInstruments Act 1958 (Vic), Forrest J of the Supreme Court of Victoria adoptedthe suggestion made by the authors of Mental Capacity - Powers of Attorneyand Advance Health Directives10 that to apply Young J’s approach in Ranclaudv Cabban11, the following matters, at least, needed to be considered:

1. the nature and extent of the assets to be managed (at least in a broadsense);

2. the decisions likely to be made on the donor’s behalf; and3. the ability of the attorney to carry out the tasks involved.12

Forrest J then continued by noting that if the test in Gibbons v Wright wasapplied, the question would be; did the maker of the enduring power ofattorney understand its purport when they signed (executed) it? However, if theRanclaud v Cabban test were to be applied, the maker of the enduring power ofattorney would have to have had “a more intricate understanding” of the

7 Re K, Re F [1988] Ch 310, 316. See also Re W [2000] Ch 343 and Re W in the Court of Appeal inwhich it acknowledged that the four points were “a sound indication” of what the maker mustunderstand to make a valid enduring power of attorney, see Re W [2001] Ch 609 [20].8 Adult Guardian (In Re Enduring Power of Attorney of Vera Hagger) v Vera Hagger, Declan JamesBarry and Albert Craig Ray (Unreported Supreme Court of Queensland, SC Qld No 1083 of 2001).9 Re HAA [2007] QGAAT 6 [34], a case in which the Tribunal found the maker lacked the requiredcapacity when she made the challenged enduring power of attorney. See also, Re MV [2005] QGAAT46. The Tribunal followed the same approach Re CAC [2008] QGAAT 45, but found the makercapable of making the enduring power of attorney and the presumption of capacity not rebutted. Seealso Re CAC [2008] QGAAT 45.10 Sydney, Federation Press, 2005, 44.11 NSW (1988) Conv R 55-385.12 Ghosn v Principle Focus Pty Ltd [2008] VSC 574 [76].

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consequences of the enduring power of attorney, and in particular the actionsthat could be taken by the enduring attorney in relation to, in the case Forrest Jwas deciding, the companies and the trust properties that the maker of theenduring power of attorney owned or controlled.13

Forrest J took the view that the Ranclaud v Cabban test should be accepted. Heconsidered it was consistent with the English case referred to above, Re K14, inrequiring more than just an appreciation of the purport of a power of attorneyand not inconsistent with Gibbons v Wright. He went on to note that eachenduring power of attorney should be examined in accordance with itsaccompanying circumstances. In the circumstances of the case he was decidingthis meant that it had to be proved that the maker of the enduring power ofattorney knew, when he made the enduring power of attorney, that he wasgiving the enduring attorney control over trust properties in a real, if not alegal, sense. While the maker of the enduring power of attorney did not have tounderstand all the intricate parts of the transactions that the enduring attorneywas about to enter into, it had to be proved, given the significant assetsinvolved, that he understood at the time he made the enduring power ofattorney that his enduring attorney would have the ability to transfer theshareholdings and the directorship of the trust companies to others (includinghimself) and to effect the sale of the properties which were the subject of thetrust deed at a price determined by the enduring attorney.15

In the 2010 case, Szozda v Szozda, Barrett J of the Supreme Court of NewSouth Wales followed the Australian and English authorities set out above.16

He accepted suggestions in submissions that the degree of understandingrequired of a maker of an enduring power of attorney will vary with the extentand complexity of the maker’s affairs. So that it is likely that a finding of lackof capacity will more readily be made in relation to a person with a great dealof property of various kinds and who has interests in many businesses than inrelation to a person with objectively identical characteristics in relation tomental capacity but who has, say, only a house, its contents and a bankaccount.17

Barrett J was at pains to differentiate between the capacity needed to make awill and that required to make an enduring power of attorney which gave theattorney general and consequently wide powers. He noted that will-makersmust have the capacity to appreciate what their property is, to recognise thepersons who have a moral claim to the estate and to exercise a balancedjudgment as to those claims. These were not matters that makers of enduringpowers of attorney, which give the attorney general powers, have to put their

13 Ibid. [77]14 Re K, Re F [1988] Ch 310.15 Ghosn v Principle Focus Pty Ltd [2008] VSC 574 [78].16 Szozda v Szozda [2010] NSWSC 804.17 Ibid. [28]-[30].

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minds to. What they were doing was giving a “complete and lastingdelegation” to the attorney. He continued:

That concept of empowering another person to act generally in relationto one’s affairs raises two basic questions. First, is it to my benefit andin my interests to allow another person to have control over the whole ofmy affairs so that they can act in those affairs in any way in which Icould myself act – but with no duty to seek my permission in advance orto tell me after the event, so that they can, if they so decide, do things inmy affairs that I would myself wish to do (such as pay my bills andmake 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 seedone – sell my treasured stamp collection; stop the monthly allowance Ipay to my grandson; exercise my power as appointor under the familytrust and thereby change the children and grandchildren who are to beincome beneficiaries; instruct my financial adviser to sell all my bluechip shares and to buy instead collateralised debt obligations in NewYork; have my dog put down; sell my house; buy a place for me in anursing home? Second, is it to my benefit and in my interests that allthese things – indeed, everything that I can myself lawfully do – can bedone by the particular person who is to be my attorney? Is that personsomeone who is trustworthy and sufficiently responsible and wise todeal prudently with my affairs and to judge when to seek assistance andadvice? The decision is one in which considerations of surrender ofpersonal independence and considerations of trust and confidence playan overwhelmingly predominant role: am I satisfied that I want someoneelse to be in a position to dictate what happens at all levels of my affairsand in relation to each and every item of my property and that theparticular person concerned will act justly and wisely in makingdecisions?18

In this case three adult children of Mrs Szozda’s late son sought a declarationthat the enduring and general power of attorney she made on 28 September2006, when she was 95 years of age, was invalid. They sought other orders aswell. Mrs Szozda’s daughter, through a cross-claim, sought a declaration thatthe September 2006 power of attorney was valid and a declaration that each ofthe 2004 powers of attorney and the March 2006 power of attorney made byMrs Szozda had been revoked and were no longer effective. After aconsideration 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 atthe relevant times. He then continued:

The overall conclusion is therefore fourfold: first, that nothing in theevidence shows that Mrs Szozda was informed, on 28 September 2006,of the full meaning and significance of the power of attorney she was

18 Ibid. [34].

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about to sign; second, that Mrs Szozda’s statements and conduct in thepresence of the solicitors on that day suggesting comprehension andacceptance do not establish understanding by her of the nature,implications and far-reaching ramifications of the power of attorneydocument she was signing and the several acts the attorneys wereauthorised to do; third, that Mrs Szozda’s cognitive incapacity on 28September 2006 was such that she could not have understood the nature,implications and far-reaching ramifications of the appointment under thegeneral and enduring power of attorney document she signed or therange of circumstances, affecting herself and her property, in which theattorney would be empowered to act; and, fourth, that, according to theapplicable general law principles, Mrs Szozda did not possess, on 28September 2006, the capacity necessary to enable her to grant a generalpower of attorney in the form of the document she signed on that day.19

Consequently, Barrett J held that the enduring power of attorney Mrs Szozdamade on 28 September 2006 was invalid. He also made a number ofsubsequent orders.

It should be noted that in New South Wales the person who witnessed themaker signing the enduring power of attorney, must be a prescribed witnessand is usually a solicitor. Also, they must certify that they explained the effectof the enduring power of attorney to the maker who appeared to understandthat effect. 20 However, as Szozda v Szozda shows, such certification, evenwhen conscientiously made, is not necessarily proof that that the maker didunderstand the effect of the enduring power of attorney they were about tosign.21

10. 3. 1. 1. Standard and burden of proof of capacity to make an enduringpower of attorneyForrest J also dealt with the question of the standard and burden of proof ofcapacity to make an enduring power of attorney in the 2008 case Ghosn vPrinciple Focus Pty Ltd.22 He stated that, for the purpose of determiningcapacity, he could see no reason to distinguish between the burden (andstandard) of proof required to prove testamentary capacity and the burden (andstandard) of proof required to prove the capacity to execute (an enduring)power of attorney. Consequently, he applied the approach taken by theVictorian Court of Appeal in Kantor v Voshalo to the matter.23 The effect of hisdecision is that where the evidence in a case, taken as a whole, is sufficient tothrow a doubt upon the competency of the maker of the enduring power ofattorney, then the court (or tribunal) must decide against the validity of the

19 Ibid. [120].20 Powers of Attorney Act 2003 (NSW) s 19(1). The term “prescribed witness” is defined in s 19(2).21 Szozda v Szozda [2010] NSWSC 804 [119].22 [2008] VSC 574.23 [2004] VSCA 235.

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enduring power of attorney unless it is satisfied affirmatively that the makerwas of sound mind, memory and understanding when they made i.e. signed orotherwise executed it.24

10. 3. 2. Queensland and TasmaniaIn Queensland the Powers of Attorney Act 1998 specifically retains thepresumption of capacity.25 However, it also states that an adult may make anenduring power of attorney only if they understand the nature and effect ofsuch a power of attorney. Furthermore, it states that understanding the natureand effect of an enduring power of attorney includes understanding thefollowing matters:

1. that in the power of attorney the maker may specify or limit the power tobe given to an attorney and instruct an attorney about the exercise of thepower,

2. when the power of attorney begins,3. that once the power of attorney begins, the attorney will have full

control over, the (financial) matters included in the enduring power ofattorney, subject to terms or information in the power of attorney abouthow it is to be exercising,

4. that they may revoke the enduring power of attorney at any time theyare capable of making an enduring power of attorney giving the samepowers to the attorney,

5. that the power of attorney continues if they, the maker, becomes aperson who has impaired capacity, and

6. that at any time they are not capable of revoking the enduring power ofattorney, they are unable to effectively oversee its use by the attorney.26

In Tasmania the maker of an enduring power of attorney must understand thenature and effect of the document and that understanding includesunderstanding the matters as set out above for Queensland.27

10. 3. 3. VictoriaIn Victoria the legislation relating to enduring powers of attorney is found inPart XIA of the Instruments Act 1958. They were inserted in that Act in 2003and follow the Queensland provisions closely but not identically. TheInstruments Act 1958 (Vic) states that an adult may make an enduring power ofattorney only if they understand the nature and effect of such a power ofattorney. Furthermore, it states that understanding the nature and effect of anenduring power of attorney includes understanding the following matters:

24 Ibid. [49].25 Powers of Attorney Act 1998 (Qld), Schedule 1 s1.26 Ibid. s 41. A footnote to the section in the Act states: “If there is a reasonable likelihood of doubt, itis advisable for the witness to make a written record of the evidence as a result of which the witnessconsidered that the [maker] understood those matters.”27 Powers of Attorney Act 2000 (Tas) s 30(2)(a) and (3).

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1. that, in the power of attorney, the maker may specify conditions orlimitations on, or instructions about, the exercise of the powers given tothe attorney,

2. when the power of attorney is exercisable,3. that once the power of attorney is exercisable, the attorney has the same

powers as the maker had (when they were not under a legal incapacity)to do anything for which the power of attorney is given subject to anylimitations or restrictions on exercising the powers included in it,

4. that the maker may revoke the enduring power of attorney at any timethey are capable of making an enduring power of attorney,

5. that the power the attorney continues even if the maker subsequentlyceases to have legal capacity, and

6. that at any time that the maker is not capable of revoking the enduringpower of attorney, they are unable to oversee effectively the use of thepower of attorney.28

It should be noted that in Ghosn v Principle Focus Pty Ltd, in which Forrest Jof the Supreme Court of Victoria set down the tests for capacity to make anenduring power of attorney and for determining standard and onus of proofissues, the question of whether the powers of attorney under consideration didor did not conform with the provisions of the Instruments Act 1958 (Vic) wasnot argued.29

The witnesses to the enduring power of attorney must each sign a certificatestating that at the time the maker made the power of attorney they appeared tothe witness to have the capacity to make the power of attorney.30

10. 3. 4. Australian Capital TerritoryThe Powers of Attorney Act 2006 (ACT) restates the presumption of capacity sothat an adult making an enduring power of attorney is taken to understand thenature and effect of making the power of attorney, in the absence of evidenceto the contrary.31 Again following the Queensland model closely but notidentically, the Australian Capital Territory Act states that understanding thenature and effect of making an enduring power of attorney includesunderstanding each of the following:

1. that, in the power of attorney, the maker may state or limit the powersto be given to an attorney,

2. that, in the power of attorney, the maker may instruct the attorney aboutthe exercise of the powers given them,

28 Instruments Act 1958 (Vic) s 118. A footnote to s 118 is in the same terms as the footnote set out in(footnote 10).29 [2008] VSC 574.30 Ibid. s 125A.31 Powers of Attorney Act 2006 (ACT), s 18.

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3. when the powers given under the power of attorney can be exercised bythe attorney,

4. that, if the powers under a power of attorney can be exercised by theattorney, then the attorney has the power to make decisions in relationto, and will have full control over, the matter covered by the power ofattorney, subject to terms or information about exercising the powers,that are included in the power of attorney,

5. that the maker may revoke the power of attorney at any time they arecapable of making the power of attorney,

6. that the power of attorney continues even if the maker becomes a personwith impaired decision-making capacity, and

7. that, at any time the maker is not capable of revoking the power ofattorney, they cannot effectively oversee the use of the power.32

10. 4. Assessing capacity to make and revoke enduring powers of attorneyWhile the common law tests for making and revoking enduring powers ofattorney are used in New South Wales, South Australia, Western Australia andthe Northern Territory, specific but different statutory tests for capacity areused in the other three States and the Northern Territory. Consequently, thissection will deal first with the generic baseline approach to assessment thatapplies to all jurisdictions and then will discuss the application of the specifictests to the assessment of capacity.

It is important to note before embarking on any challenge to capacity that thepresumption that an adult has the capacity to make an enduring power ofattorney can be rebutted by satisfactory evidence. However, the onus is that ofproving positively that the maker lacked capacity at the time they made theenduring power of attorney and that onus lies with the person challenging thevalidity of the power of attorney.33

10.4.1 The generic aspects of capacity assessmentWhen a clinician is asked to assess capacity to appoint an attorney under anenduring power of attorney, it is helpful to place the specific assessment ofcapacity in the context of an estimation of the person’s overall mental functionand health status. A global assessment of the person’s mental state andcognitive function should be made as well as an assessment of the specificexecutive and functions of judgment, reasoning and planning which arerelevant to decision making.

Additionally, a task common to all assessments is to ensure that the maker ofthe enduring power of attorney is making the appointment freely andvoluntarily and is not being unduly influenced or “schooled” to make an

32 Ibid. s 17.33 Re Caldwell [1999] QSC 182. See also, Re MD [2005] QGAAT 29.

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appointment. 34 As has been noted elsewhere, dementia may affect a person’sappraisal of others.35 Therefore, when undertaking assessments of people whowish to make an enduring power of attorney, it is important to undertake theinterview in private.

Furthermore, regardless of the functions of the attorney (the “what” of theappointment), the rationale for appointing a particular person as attorneyshould be assessed (the “who” of the appointment). In doing so, it is importantto ascertain the following:

1. has the person made any appointments of attorneys under enduringpowers of attorney previously?

2. if so, how frequently have there been changes (i.e. revocations and newappointments)?

3. is this appointment in keeping with previous appointments (e.g. hassomeone else been consistently appointed as the attorney under anenduring power of attorney in the past)?

4. what is the history of the relationship between the person and theappointee and has there been any radical change in that relationshipcoinciding with the onset or course of dementia?

5. why has the person been selected for appointment as the attorney underthe enduring power of attorney?

10.4.2 The application of the specific tests to the assessment of capacityWhen assessing understanding of the following specific tests it is essential thatthe person is able to repeat, in their own words, their understanding of the testafter it has been explained to them. As previously stated, in New South Wales,South Australia, Western Australia and the Northern Territory the test forcapacity to make an enduring power of attorney is found in the following cases,outlined 10. 3. 1 above:

(i) Dixon CJ, Kitto and Taylor JJ in Gibbons v Wright which outlinedthe principle of understanding the nature and effect of the instrumentwhen explained;36

(ii) Ranclaud v Cabban Young J which emphasised the need for thedonor to understood not only that they were authorising someone tolook after their affairs but also the sort of things the attorney coulddo without further reference to them;37

34 Collier, B and others, Mental Capacity: Powers of Attorney and Advanced Health Directives,Sydney, The Federation Press, 2005, 52.35 Peisah C. Brodaty H, Quadrio C, “Family conflict in dementia: prodigal sons & black sheep”International Journal of Geriatric Psychiatry (2006) 21(5):485-492.36 [1954] HCA 17 [7], (1954) 91 CLR 423, 438.37 NSW (1988) Conv R 55-385.

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(iii) Ghosn v Principle Focus Pty Ltd38 in which Forrest J of the SupremeCourt explains and adopts the approach taken by Young J inRanclaud v Cabban.

In New South Wales, the functions given under a power of attorney relate tofinancial matters. Accordingly, the donor must understand that the “sort ofthings” the attorney can do without reference to them include selling theirhouse and operating their bank account. This is specified in Ranclaud vCabban. 39 So accordingly, the person might be asked, in addition toexplaining why they chose a particular person: “Can you please tell me the sortof things your attorney can do without consulting you?”

In Queensland, Tasmania, Victoria and the Australian Capital Territory, 40 41 42

43 the test for the capacity to make an enduring power of attorney is found inthe powers of attorney legislation, which specifies that the donor mustunderstand:

(i) that they can state, specify or limit the powers to be given;(ii) when the power of attorney begins;(iii) that once the power of attorney begins, the attorney will have the

power to make, and will have full control over the functions given tothem;

(iv) that they may revoke the enduring power of attorney at any time theyare capable of doing so;

(v) that the power of attorney continues if they become impaired, andthat at any time they are not capable of revoking the enduring powerof attorney, they are unable to effectively oversee its use by theattorney.

As stated in Chapter 9, when assessing a person’s capacity to appoint anattorney under an enduring power of attorney in Queensland and the AustralianCapital Territory, the clinician must be mindful of whether the person isappointing a decision-maker for either financial or personal decisions or bothsets of decisions.

The principles for assessment of capacity to appoint an attorney under anenduring power of attorney apply equally to the assessment of capacity torevoke. The “who” of assessment applies particularly in regards to revocation.It is important therefore to enquire why the donor no longer feels that theappointee is appropriate. This is because unfounded paranoid ideation andsuspiciousness often underlie such changes in the case of dementia.

38 [2008] VSC 574.39 Ibid NSW (1988) Conv R 55-38540 Powers of Attorney Act 2006 (ACT), s 18.41 Instruments Act 1958 (Vic) s 118.42 Powers of Attorney Act 2000 (Tas) s 30(2)(a) and (3).43 Powers of Attorney Act 1998 (Qld), Schedule 1 s1.

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10. 5. Appointing attorneys under enduring powers of attorney10. 5. 1. Who may be appointed?Only adult men and women may be appointed enduring attorneys, however notonly adults but also Public Trustees and trustee companies, and in all Statesexcept Victoria and in the Northern Territory but not the Australian CapitalTerritory, any company may be appointed attorney under enduring powers ofattorney (hereafter enduring attorneys).

In Victoria an enduring attorney must be at least 18 years old which creates theassumption that only natural persons who are adults may be appointed enduringattorneys in that State.44 In Queensland and the Australian Capital Territorycorporations that are neither the Public Trustee nor a trustee company cannotbe appointed enduring attorneys.45

10. 5. 2. Appointment proceduresThe legislation of each State and Territory sets out procedures for a capableadult to appoint an enduring attorney.46 It is not intended to discuss thoseprocedures here as helpful information is available on the websites ofguardianship tribunal or public guardian or advocate of each State and theAustralian Capital Territory.

Nevertheless, it should be noted that in New South Wales, Queensland, SouthAustralia, Victoria, Western Australia, the Australian Capital Territory and theNorthern Territory an enduring power of attorney does not come into effectuntil it is accepted and signed by the attorney or at least one of them. If morethan one attorney is appointed, each attorney may carry out their role under theenduring power of attorney only when they have accepted and signed it. Ifattorneys are given different functions under the power of attorney, they will beable to carry out the particular functions assigned to them if they have acceptedtheir appointment. However, if there are joint attorneys with the samefunctions, the safer position is that the power of attorney is not capable of beingoperated until all joint enduring attorneys have accepted it. If only some of thefunctions given attorneys require joint attorneys then all of them would have tohave accepted their role before that part of the power of attorney could beoperated.47 In Tasmania an enduring power of attorney is not legally effectiveuntil it is registered by the Recorder of Titles.48

44 Instruments Act 1958 (Vic) s 199(4).45 Powers of Attorney Act 1998 (Qld) s 29(1), Powers of Attorney Act 2006 (ACT) s 14(1).46 Powers of Attorney Act 2003 (NSW) s 19, Powers of Attorney Act 1998 (Qld) ss 29-31, 43 and 44,Powers of Attorney and Agency Act 1984 (SA) s 6, Powers of Attorney Act 2000 (Tas) ss 9 and 30,Instruments Act 1958 (Vic) ss 119 and 123-125A, Guardianship and Administration Act 1990 (WA) s104, Powers of Attorney Act 2006 (ACT) ss 19-22 and Powers of Attorney Act 1980 (NT) ss 13-14.47 Powers of Attorney Act 2003 (NSW) s 20, Powers of Attorney Act 1998 (Qld) s 44(8), Powers ofAttorney and Agency Act 1984 (SA) s 6(2), Instruments Act 1958 (Vic) s 125B, Guardianship andAdministration Act 1990 (WA) s 104(2)(b) , Powers of Attorney Act 2006 (ACT) s 23 and Powers ofAttorney Act 1980 (NT) s 13(b).48 Powers of Attorney Act 2006 (Tas) s 16.

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10. 6. Responsibilities of attorneys appointed under enduring powers ofattorneyWhen the maker of an enduring power of attorney loses capacity to understandthe nature and effect of the power of attorney they have made, this is usually,but not always, permanent state of affairs. Consequently, the enduring attorneythey have appointed becomes the effective manager of and decision-makerabout their financial affairs from that time on. While the initial relationshipbetween the maker and the enduring attorney is one of principal and agent,once the principal loses their capacity to remove the agent, the fiduciaryobligations of the enduring attorney come much more into play. Because of thegreatly increased numbers of enduring powers of attorney being made andcoming into effect, it is important that enduring attorneys and everyone elseunderstand the ethical responsibilities, some of which are now set out inlegislation, enduring attorneys have to the person who appointed them. Thesematters 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 theother Australian State and the two Territories to the same extent, unlessmodified 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 dutyand obligation to obey the instructions of the maker even when they are givenafter the power of attorney has been granted and even if given orally. Actingcontrary to those instructions is a breach of trust by the attorney. This wasestablished in the High Court of Admiralty in England in 1858 in a case inwhich an attorney sold a ship contrary to instructions not in the power ofattorney itself.49 The judge, Dr Lushington, said:

I apprehend that, as a general rule, the grantee of a power of attorney isbound to follow the directions and wishes of the grantor, as, forinstance, with respect to the power of attorney to sell stock, the granteemust exercise that power according to the orders of the grantor. Iconceive that to use a power of attorney contrary to the known wishesand directions of the grantor, is a breach of trust.50

This approach was adopted in Victoria in 1983 and 2002 and 2004 in NewSouth Wales.51 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 sealmay, so long as the instrument remains unrevoked, exercise the power itconfers in disregard of any subsequent orders of his principal conveyed

49 The Margaret Mitchell (1858) 166 ER 1174.50 Ibid. 1184. Also quoted in Dynayski v Grant [2004] NSWSC 1187, [19].51 Watson v Watson [2002] NSWSC 919, [49] and Dynayski v Grant [2004] NSWSC 1187, [19].

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to him… Subject to any contrary sense of the instrument there alwaysresides in the donor the right later to instruct the donee not to act on thepower, or to act only in a stated way.

That the effect of a power of attorney, even if given under seal, may bemodified by parol is made clear by the decision of The MargaretMitchell the authority of which has so far as I am aware never beendoubted.52

In the 2002 New South Wales case53 Berecry M adopted The MargaretMitchell approach and went on to quote from Thomas J in a New Zealand case:

The powers of attorney are specifically directed at the management ofthe principal’s affairs: it is not open to attorneys to either obtain anadvantage for themselves or to act in a way which is contrary to theinterests of their principals.54

In the case of enduring powers of attorney, the maker may give bindinginstructions only when they are still capable. Instructions by an incapablemaker need not be followed and must not be followed if they would place theattorney in breach of their obligation to apply the general principles and to actwith 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, theyhave to ensure their proper care and protection. It is suggested that this meansthat 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 wouldnot be in best interests of the maker.

10. 6. 1. Obligations of enduring attorneys10. 6. 1. 1. To apply the general principles relating to incapable people set outin the legislationIn Queensland, the Australian Capital Territory the powers of attorneylegislation sets out general principles that are relevant to enduring powers ofattorney for financial matters. These include encouraging self- reliance, givingthe now incapable maker the necessary support and information to participatein the making of financial decisions affecting their lives, applying substitutedjudgment so that the enduring attorney makes financial decisions that take intoaccount what they consider would be the maker’s views on the matter andexercises the powers given in a way that is appropriate to the maker’s needsand circumstances.55

52 (1983) 12 Aust Crim Rep 1, 14.53 Watson v Watson [2002] NSWSC 919, [49].54 Powell v Thompson [1991] 1 NZLR 597, 605.55 Powers of Attorney Act 1998 (Qld) Schedule 1 ss 6,7 and 10 and Powers of Attorney Act 2006 (ACT)Schedule 1 ss 1.6 and 1.7.

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Even though they are under no statutory obligation to do so, it is suggested thatenduring attorneys elsewhere in Australia should apply the general principlesthat apply in Queensland and the Australian Capital Territory when it isappropriate and practicable to do so.

10. 6. 1. 2. To act honestly and with reasonable diligenceEnduring attorneys must exercise the powers given them according to the termsof the power of attorney and honestly and with reasonable diligence to protectthe interests of the maker. The Queensland provision creates a criminal offenceas well as a right in the maker to seek compensation for losses caused by theenduring attorney’s failure to exercise their powers honestly and with duediligence.56

In South Australia and Western Australia the legislation requires an enduringattorney to exercise their powers with reasonable diligence to protect theinterests of the maker and makes them liable to the maker for any loss causedby their failure to do so.57

In Tasmania an enduring attorney is taken to be a trustee of the property andaffairs of the maker according to the terms of the power of attorney and mustexercise their powers to protect the interests of the maker.58

While enduring attorneys have no statutory duty to act honestly or withreasonable diligence in New South Wales, Victoria, the Australian CapitalTerritory and the Northern Territory, it is suggested that these are some of theessential obligations that apply to enduring attorneys and that enduringattorneys could be found liable in the courts for any provable loss caused bytheir failure to exercise their powers honestly and with due diligence.

10. 6. 1. 3. To exercise their powers according to the terms of the power ofattorneyWhile most enduring attorneys will have the full extent of the powers that amaker may give to an attorney under an enduring power of attorney, the termsof some powers of attorney may limit the attorney’s powers.59 In thosecircumstances the enduring attorney must act according to the terms of thepower of attorney. The Powers of Attorney Act 1998 (Qld) is specific aboutthese matters. 60 In Tasmania there are different forms for enduring powers ofattorney one conferring the particular powers set out in the form on the attorneyand the other conferring on the enduring attorney the power to do all the thingsthe maker may lawfully authorise an attorney to do.61 In South Australia, the

56 Powers of Attorney Act 1998 (Qld) s 66.57 Powers of Attorney and Agency Act 1984 (SA) s 7 and Guardianship and Administration Act 1990(WA) ss 107(1)(a).58 Powers of Attorney Act 2000 (Tas) s 32A(1).59 Powers of Attorney Act 2003 (NSW) s 9 and Powers of Attorney Act 1998 (Qld) s 77.60 Powers of Attorney Act 1998 (Qld) ss 67 and 77.61 Powers of Attorney Act 2000 (Tas) s 30(1)(b) and (c).

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form provides the maker with the same choices as the separate forms do inTasmania.62

It is suggested that in the States and Territories where the matter is not dealtwith in the legislation, that makers may give all the powers they can give at lawto enduring attorneys simply by saying so. Similarly, they can confine thepowers that they give to enduring attorneys by setting out the powers they wishto give the attorney in the power of attorney document. There are at least twodifficulties 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, anenduring attorney is likely to need more powers than a maker may thinknecessary. The time when this will become apparent is after the maker has lostcapacity and cannot give the required, or all, powers to the attorney.

Legislation may limit what enduring attorneys may do. This will be seen belowat 10. 7.

10. 6. 1. 4. To avoid conflict transactionsAgain in Queensland and the Australian Capital Territory the powers ofattorney legislation imposes an obligation of enduring attorneys not to enterinto a transaction that does or may result in conflict between that transactionand the enduring attorney’s duty towards the maker, unless the makerauthorises the transaction. The legislation describes what is and what is not aconflict transaction.63

Again it is suggested that, in the States and Territories where this matter is notdealt with in the legislation, the obligation to avoid entering into conflicttransactions arises out of an enduring guardian’s general duty to the personwho appointed them.

10. 6. 1. 5. Not to resign after the maker has lost capacityIn Queensland an enduring attorney may not resign while the maker isincapable, and thus legally unable to make a new enduring power of attorney,without the leave of QCAT or the Supreme Court.64 In South Australia theleave of the Supreme Court is necessary.65 In Victoria the leave of VCAT isrequired.66 In Western Australia if an enduring attorney wishes to resign whenthe maker is incapable, the process is to apply to WASAT to be removed andreplaced as an attorney.67 In the Australian Capital Territory the leave of

62 Powers of Attorney and Agency Act 1984 (SA) Schedule 1.63 Powers of Attorney Act 1998 (Qld) s 73 and Powers of Attorney Act 2006 (ACT) s 42. For examplesof conflict transactions, see Re FAA [2008] QGAAT 3 and Re MV [2005] 4664 Powers of Attorney Act 1998 (Qld) s 82 and 109A.65 Powers of Attorney and Agency Act 1984 (SA) s 9.66 Instruments Act 1958 (Vic) s 125M(2).67 Guardianship and Administration Act 1990 (WA) ss 107(1)(c) and 109.

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ACAT is required.68 In the Northern Territory an enduring attorney, onceappointed, may not resign without the leave of the Supreme Court.69

Sometimes an enduring attorney may wish or need to resign because of poorhealth. On other occasions the level of conflict between family members maylead the enduring attorney to wish to resign.70 In many cases if the attorneyunder an enduring power of attorney has to resign, it will appropriate to applyto the relevant tribunal or court for the appointment of an administrator and, insome cases, a guardian.71

In New South Wales and Western Australia there is no provision for anenduring attorney to resign after the maker has lost capacity. However, in NewSouth Wales an attorney or other interested persons may apply to either theGuardianship Tribunal or the Supreme Court to be removed and replaced as anattorney.72 In Western Australia, an attorney or a person who in the opinion ofWASAT has a proper interest in the matter may apply to the Tribunal for anorder substituting the attorney.73 It is suggested that making such an applicationis the appropriate course for an enduring attorney who wishes to or needs toresign.

In Tasmania the matter is dealt with by the single attorney or joint attorneysappointing the Public Trustee to replace them. This is achieved when the PublicTrustee accepts the appointment and the appointment document is registered bythe Recorder of Titles.74

10. 6. 2. Administrative powers and responsibilities of enduring attorneys10. 6. 2. 1. Power to execute documentsThe legislation in Queensland, Victoria and the Northern Territory provides,and it is suggested that elsewhere in Australia it is implied, that enduringattorneys may execute any document in order to carry out their functions asenduring attorneys.75

10. 6. 2. 2. Record keeping and keeping the maker’s property separateIn Queensland, Victoria, Western Australia and the Australian Capital Territorythe powers of attorney legislation imposes an obligation on enduring attorneysrequiring them to keep and preserve accurate records and accounts of all

68 Powers of Attorney Act 2006 (ACT) s 53(2).69 Powers of Attorney Act 1980 (NT) s 15(1).70 For an example see, Re GMAV [2006] QGAAT 8871 For an example QCAT’s predecessor tribunal granting leave to an attorney to resign, appointing anadministrator but dismissing an application for a guardianship order see, Re VGM [2003] QGAAT 22.See also Re MLA [2006] QGAAT 91.72 Powers of Attorney Act 2003 (NSW) ss 35 and 36.73 Guardianship and Administration Act 1990 (WA) s 109.74 Powers of Attorney Act 2000 (Tas) s 32A.75 Powers of Attorney Act 1998 (Qld) s 69, Instruments Act 1958 (Vic) s 125E and Powers of AttorneyAct 1980 (NT) s 10. As an example of such implication see, Powers of Attorney and Agency Act 1984(SA) s 13.

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dealings and transactions made under the power of attorney.76 In addition inQueensland and the Australian Capital Territory enduring attorneys must keeptheir property separate from the maker’s property unless it is jointly ownedproperty.77 While there is no statutory obligation to take these actionselsewhere in Australia, it is suggested that it is wise and in the interests of bothmaker and enduring attorney that such records are made and kept and that themaker’s property is kept separate from that of the enduring attorney.

The obligation to keep the maker’s property separate from that of the enduringattorney is not always understood as demonstrated in a 2006 case fromQueensland.78 The maker, RWM, had a brain injury acquired at birth. As anadult he appointed three family members as his enduring attorneys. RWMreceived a disability support pension and a mobility allowance as well as asmall and varying wage from his employer. He lived at home paid board andlodging. His personal spending was moderate yet he had no savings. A familymember used his automatic teller machine card to access RWM’s account. Theevidence showed that RWM’s pension was regarded as part of his family’sincome and was used accordingly and not necessarily for RWM’s solebenefit.79 The Tribunal concluded that it was necessary that a pattern of savingbe established for RWM so that he had funds available to meet expenditure inthe future. The family members who looked after him were on pensions andbecause of their age could not be expected to look after him for the rest of hislife.80 QCAT’s predecessor tribunal did not revoke the enduring power ofattorney but appointed the Public Trustee as administrator of RWM’s estate fora year to ensure that a savings scheme was established for him. The tribunalstated that, in the period of the Public Trustee’s appointment, [the person whoaccessed RWM’s bank account] “should be given as much opportunity as isappropriate to manage RWM’s day-to-day financial affairs”.81

10. 6. 2. 2. Right to informationIn the Australian Capital Territory an enduring attorney has a right to all theinformation that the maker would have been entitled to when they had capacityand a person who has custody or control of the information must disclose it tothe enduring attorney on request.82 The Queensland provisions are the sameexcept that the information that must be disclosed is that which is necessary tomake informed decisions about anything the enduring attorney is authorised todo.83

76 Powers of Attorney Act 1998 (Qld) s 85; Instruments Act 1958 (Vic) s 125D; Powers of Attorney Act2006 (ACT) s 47 and Guardianship and Administration Act 1990 (WA) ss 107(1)(b).77 Powers of Attorney Act 1998 (Qld s 86 and Powers of Attorney Act 2006 (ACT) s 48.78 Re RWM [2006] QGAAT 52.79 Ibid. [34].80 Ibid. [40].81 Ibid. [42].82 Powers of Attorney Act 2006 (ACT) s 45(2) and (3).83 Powers of Attorney Act 1998 (Qld) s 81.

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Enduring attorneys need access to information in order to carry out theirobligation to act with reasonable diligence to protect the interests of the makerby, for example, paying their gas and electricity bills and attending to othermundane but essential matters. The existence of privacy legislation, which wasnot intended to operate to preclude the substitute decision-makers of incapablepeople carrying out the roles they were appointed to carry out, is often usedelsewhere in Australia as an excuse for service providers and others not toprovide such information.

Nevertheless, where enduring attorneys are given information to help them tomake their decisions and carry out their functions, they should keep itconfidential and divulge it to others only when that is necessary in the interestsof the maker of the power of attorney. This is specifically provided for inQueensland.84

10. 7. Legislative limitations on things that attorneys can do underenduring powers of attorneyOne of the most commonly arising problems with enduring powers of attorneywas that of enduring guardians giving substantial gifts to themselves and othersand otherwise either dissipating the now incapable maker’s estate ortransferring it to themselves and others. In order to put an end to this and toclarify the responsibilities of enduring attorneys in this regard, most of therecently enacted powers of attorney legislation in Australia addresses at leastaspects of this issue. Otherwise the matter is dealt with by common law. Thiswill be seen below at 10. 7. 2.

10. 7. 1. The giving of gifts10. 7. 1. 1. New South WalesIn the Powers of Attorney Act 2003 (NSW) the most commonly used form ofenduring power of attorney is the “prescribed power of attorney”. It may alsobe used as a general or normal power of attorney which is not intended to andwill not operate if the maker loses capacity. However, a prescribed power ofattorney does not authorise an attorney to give a gift of any of the maker’sproperty whatsoever to any other person unless the power of attorney documentitself expressly authorises the giving of the gift.85

This provision amends the common law by setting out the extent of theauthority of enduring attorneys to give gifts on behalf of the maker of theenduring power of attorney. It allows enduring attorneys to give appropriategifts, on behalf of a maker who has lost capacity, to members of the maker’sfamily and other person’s or organisations the maker was accustomed tomaking gifts to or could be anticipated to wish to give gifts to, for example newmembers of the family through birth, marriage or other arrangements.Consequently, the Act provides that if the “prescribed expression” is included

84 Ibid. s 74.85 Powers of Attorney Act 2003 (NSW) s 11.

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in a prescribed power of attorney then the enduring attorney can givereasonable gifts to certain people. The prescribed expression is:

I authorise my attorney to give reasonable gifts as provided by section11(2) of the Powers of Attorney Act 2003.

If the prescribed expression is included in the power of attorney, then theenduring attorney may give a gift:

1. to a relative or close friend of the maker,2. of a seasonal nature or because of a special event such as a birth or

marriage, or3. in the form of a donation of the nature that the maker used to make

when they had capacity, or4. that they might reasonably be expected to make.

However, the value of the gift must not be more than what is reasonable havingregard to all the circumstances particularly the maker’s financial circumstancesand the size of their estate.86

10. 7. 1. 2. Queensland and TasmaniaThe Queensland and Tasmanian provisions are that unless there is a contraryintention expressed in the enduring power of attorney, the limits on the attorneygiving of gifts of the maker’s property are the same as in the New South WalesAct set out above in 10. 7. 1. 1. Gifts in the form of seasonal or special occasiongifts may be given to relations and close friends of the maker. Enduringattorneys may give gifts to themselves or to a charity with which they have aconnection.87 The terms “relation” and “close friend” are defined inQueensland but not Tasmania.88

10. 7. 1. 3. Australian Capital Territory

86 Ibid. s 11(2) and Schedule 3 cl 1. The term “close friend” of a maker means another individual whohas a close personal relationship with the maker and a personal interest in their welfare. The term“relative” of the maker means; a mother, father, wife, husband, daughter, son, step-daughter, step-son,sister, brother, half-sister, half-brother or grandchild of the maker. If the maker is a party to a domesticrelationship within the meaning of the Property (Relationships) Act 1984 (NSW), any person who is arelative of the kind just set out, of either party to the relationship, is a relative for the purpose of thegift-giving provision.

87 Powers of Attorney Act 1998 (Qld) s 88 and Powers of Attorney Act 2000 (Tas) s 31(3) and (4).88 In Queensland a “relation” of the maker is their spouse, a person related to the maker by blood,marriage or adoption or because of a de facto relationship, foster relationship or a relationship arisingbecause of a legal arrangement; such as a court order for custody or a trust arrangement betweentrustee and beneficiary. A “relation” is also a person on whom the maker is completely or mainlydependent, a person who is completely or mainly dependent on the maker or a person who is a memberof the same household as the maker. A “close friend” of the maker, means another person who has aclose personal relationship with the maker and a personal interest in their welfare. See, Powers ofAttorney Act 1998 (Qld) schedule 3.

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As in New South Wales, an enduring attorney appointed or recognised in theAustralian Capital Territory may not make gifts of the maker’s property unlessspecifically authorised to do so.89 If the enduring power of attorney contains ageneral authorisation to make gifts, the attorney is limited to making gifts onbehalf of the maker only to relatives or close friends of the maker, includingthe attorney if they fit either of those categories, or to or to a charity with whichthe attorney has a connection.90 These gifts are limited to gifts for a celebrationsuch as a birthday, Easter or Hanukah or an event such as a birth, marriage orgraduation.91 The gift must be one that it is reasonable that the maker mightreasonably be expected to give and no more than reasonable particularly giventhe maker’s financial circumstances and the size of their estate.92

10. 7. 1. 4. South Australia, Victoria, Western Australia and Northern TerritoryThere are no provisions in the South Australian, Victorian, Western Australianand Northern Territory legislation dealing with the giving of gifts.Consequently, there is doubt as to whether enduring attorneys in the threeStates can give gifts from the maker’s property to themselves and others. It ismuch clearer that enduring attorneys appointed or recognised in the NorthernTerritory cannot give gifts of an incapable maker’s property to themselves ormembers of the maker’s family without specific authority being provided in theenduring power of attorney.93 This matter is returned to below at 10. 7. 2.

10. 7. 2. The giving of benefits to themselves and others by attorneysThe common law in relation to powers of attorney was largely determinedwhen powers of attorney were mostly used for business purposes and oftengave detailed authorities to the attorney to act as agent for the maker and beforeenduring powers of attorney were legislated for. In 1893 the Privy Councilnoted 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 ofattorney is challenged as being in excess of the authority conferred bythe power, it is necessary to shew that on a fair construction of thewhole instrument the authority in question is to be found within the fourcorners of the instrument, either in express terms or by necessaryimplication.94

In a 1947 decision of the High Court, Dixon J pointed out that:

89 Powers of Attorney Act 2006 (ACT) ss 38 and 89.90 Ibid. s 39(1) and (2)(a). In the Australian Capital Territory a “relative” is a person related to themaker by blood, affinity or adoption. A “close friend”, of the maker, means someone who has a closepersonal relationship with the maker and a personal interest in their welfare.91 Ibid. s 39(2)(a).92 Ibid. s 39(2), (3) and (4).93 Powers of Attorney Act 1980 (NT) s 6A as to the recognition in the Northern Territory enduringpowers of attorney made interstate.94 Bryant v La Banque du Peuple [1893] AC 170, 177.

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Prima facie, a power [of attorney], however widely its general wordsmay be expressed, should not be construed as authorizing the attorney todeal with the property of his principal for the attorney's own benefit.Something more specific and quite unambiguous is needed to justifysuch an interpretation. "The primary object of a power of attorney is toenable 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, makepresents to himself or to others of his principal's property."95

Consequently, following the common law in New South Wales, as with giftsand 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 orothers unless the enduring power of attorney document itself expresslyauthorises the conferral of the benefit.96 If the enduring power of attorneycontains the prescribed expression to authorise the enduring attorney to conferbenefits on themselves or other named persons to meet their reasonable livingexpenses, the effect of that expression is that the enduring attorney may meetthe expenses they or the other named persons incurred for housing, food,education, transportation, medical care or medication. The benefit must bereasonable having regard to all the circumstances and, in particular, themaker’s financial circumstances and the size of their estate.97

In Queensland an enduring attorney may provide, from the maker’s estate, forthe needs of a person completely or mainly dependant of the maker without themaker 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 isreasonable having regard to all the circumstances, in particular, the maker’sfinancial circumstances. However, the maker can express an intention toprovide more in the enduring power of attorney.98

In Tasmania the matter is dealt with on a case by case basis. The Guardianshipand Administration Board may, on the application of an attorney or of its ownmotion and after a hearing, authorise the enduring attorney to make a gift ofany of the maker’s property to any person approved by the Board and for anypurpose approved by the Board.99

In the Australian Capital Territory, an enduring power of attorney mustexpressly authorise the payment of reasonable living expenses for a named

95 Tobin v Broadbent (1947) 75 CLR 378, 401. The sentence quoted by Dixon J is from Russell J inReckitt v Barnett Pembroke and Slater Ltd (1928) 2 KB 244, 268 a judgment approved in the House ofLords in Reckitt v Barnett Pembroke and Slater Ltd (1929) AC 176, at 183 (Lord Hailsham LC) and195 (Lord Warrington). See also, Wong v Wong [2008] NSWSC 330 [47].96 Powers of Attorney Act 2003 (NSW) ss 12 and 13.97 Ibid. schedule 3, items 2 and 3,98 Powers of Attorney Act 1998 (Qld) s 89.99 Powers of Attorney Act 2000 (Tas) s 31(5).

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person. Such an authorisation will allow only for the payment of reasonablecosts of housing, food, education, transportation, medical care and medication.When working out what are the reasonable costs of these matters and withoutlimiting what must be considered, the maker’s financial circumstances and thesize of their estate must be considered. However, the maker can authorise forgreater expense in the enduring power of attorney.100

Similarly, an enduring power of attorney must expressly provide from theneeds 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 reasonableconsidering all the circumstances, in particular, the maker’s financialcircumstances. However, the maker can authorise for greater expense in theenduring power of attorney.101

As already noted in 10. 7. 1. 4 above, there are no provisions in the SouthAustralian, Victorian, Western Australian and Northern Territory legislationempowering an enduring attorney to give a benefit to themselves or others fromthe maker’s property. Consequently, it is suggested that the better and saferview is that, unless the enduring power of attorney specifically provides forthat to be done or the authority to do so can “be found within the four cornersof the instrument … by necessary implication”, enduring attorneys in thoseStates and the Northern Territory cannot give benefits to themselves or others.

It could be argued in South Australia, Victoria and Western Australia that as itis an enduring attorney’s obligation to exercise their powers with reasonablediligence to protect the (social and emotional) interests of the maker, this mayjustify them giving gifts in the way legislated for in New South Wales,Queensland and Tasmania, despite the limits on their powers referred to in thediscussion of the common law, just set out, where the enduring power ofattorney contains no express words.102 The argument would be that thereasonable diligence provisions justify a “necessary implication”. Thisargument is not available in relation to enduring attorneys appointed orrecognised 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 inWestern Australia, WASAT, has the power to make an order “revoking orvarying the terms” of an enduring power of attorney. It could be argued thatthis language would allow those Courts or WASAT to add a term to anenduring power of attorney allowing attorneys to give benefits to themselvesand others from the property of the now incapable maker of the enduring power

100 Powers of Attorney Act 2006 (ACT) s 40.101 Ibid. s 41.102 Powers of Attorney and Agency Act 1984 (SA) s 7, Instruments Act 1958 (Vic) s 125D(5),Guardianship and Administration Act 1990 (WA) s107(1)(a).

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of attorney.103 In Victoria VCAT has the power to “vary the effect of anenduring power of attorney”.104 This language may be wide enough to allowVCAT to add such a term to an enduring power of attorney in appropriatecircumstances.

10. 8. Registration of enduring powers of attorneyIn Tasmania and the Northern Territory enduring powers of attorney must beregistered before they may be exercised by the enduring attorney.105

10. 9. Recognition of enduring powers of attorney made elsewhere inAustraliaAll the Australian States and the two Territories, except South Australia,recognise enduring powers of attorney made elsewhere in Australia and allowthem to be exercised in relation to either real or personal property within theirboundaries.106 In Tasmania and the Northern Territory an enduring power ofattorney must be registered before it may be exercised.107

10. 10. Effect on enduring powers of attorney of guardianship tribunalsand courts making administration ordersGuardianship tribunals will not revoke an enduring power of attorney andappoint an administrator where there is no issue about the person’s capacitywhen they made the enduring power of attorney. This is because themaintenance of the enduring power of attorney is seen as a less restrictivealternative than an administration order. Consequently in a 2010 case, WASATrefused to make an administration order where there was no real objection tothe way the enduring attorneys were managing the now incapable person’sfinances and when the evidence of the incapable person wanting to revoke herpower of attorney arose only from a time when there was doubt that she hadcapacity.108

10. 10. 1. New South Wales

103 Powers of Attorney and Agency Act 1984 (SA) s 11(1)(c), Powers of Attorney Act 1980 (NT) s15(2)(c) and Guardianship and Administration Act 1990 (WA) s 109(1)(c).104 Instruments Act 1958 (Vic) s 125Z(1)(b).105 Powers of Attorney Act 2000 (Tas) ss 4, 9 and 30, Powers of Attorney Act 1980 (NT) s 13.106 Powers of Attorney Act 2003 (NSW) s 25, Powers of Attorney Act 1998 (Qld) s 34, Powers ofAttorney Act 2000 (Tas) s 42, Instruments Act 1958 (Vic) s 116, Guardianship and Administration Act1990 (WA) s104A, Powers of Attorney Act 2000 (ACT) s 89 and Powers of Attorney Act 1980 (NT) s6A(5).107 Powers of Attorney Act 2000 (Tas) ss 4, 42, 43 and 47, Powers of Attorney Act 1980 (NT) ss 6A and13. Section 7 of the Northern Territory Act allows for the registration in the Northern Territory of anenduring power of attorney made interstate regardless of when it was executed interstate. This does notcountermand the requirement of registration enduring powers of attorney in the Northern Territory ofpowers of attorney to be used there wherever they were originally executed elsewhere in Australia orwhen. While an enduring power of attorney registered elsewhere in Australia may be taken to beregistered in Tasmania, it is a safer practise to obtain registration of that power of attorney in Tasmania.It is normal practise for powers of attorney to be registered before they may be used to effect dealingsin land. See Powers of Attorney Act 1980 (NT) s 8.108 PG and KRL [2010] WASAT 30.

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In New South Wales if the Guardianship Tribunal, Supreme Court or MentalHealth Review Tribunal makes a financial management (administration) order,the effect is to suspend the enduring power of attorney during the currency ofthe order.109 It should also be noted that when either the Guardianship Tribunalor Supreme Court conducts a review of either the making or the operation andeffect of an enduring power of attorney, it may decide to treat the review as anapplication for an administration order and make such an order.110

10. 10. 2. QueenslandIn Queensland if QCAT makes an administration order knowing that the personfor whose estate it has made the order had previously made an enduring powerof attorney that was in effect, the attorney may exercise the power only to theextent that the Tribunal authorises.111 If the administrator becomes aware of theexistence of an enduring power of attorney applicable to the person whoseestate they are managing, they must advise QCAT and their administration issuspended pending a review of their appointment by QCAT.112

10. 10. 3. South AustraliaIn South Australia if the estate of the maker of an enduring power of attorney isplaced under administration under the Mental Health Act 1977 (SA) or theAged and Infirm Persons' Property Act 1940 (SA) the enduring attorney isaccountable to the administrator as if they were the maker of the power ofattorney. The administrator may vary or revoke the power of attorney as if theywere the (still capable) maker.113

10. 10. 4. TasmaniaIn Tasmania the Guardianship and Administration Board may not make anadministration order in relation to the estate of a person who has made anenduring power of attorney so long as the enduring power of attorney is inforce. There are two exceptions. First, the Board may make an administrationorder in relation to any part of the maker's estate that is not subject to theenduring power of attorney. Second, in an emergency the Board may make anadministration order appointing the Public Trustee as administrator for up to 28days. Such an order takes precedence over any enduring power of attorney.114

However, the Board may, after a review initiated by itself or others, revoke anenduring power of attorney and appoint an administrator for the maker’sestate.115 This matter is dealt with below at 10. 11. 4. 2.

109 Protected Estates Act 1983 (NSW) s 75(5).110 Powers of Attorney Act 2003 (NSW) s 37, Guardianship Act 1987 (NSW) s 25F(d).111 Guardianship and Administration Act 2000 (Qld) s 22.112 Ibid. s 23.113 Powers of Attorney and Agency Act 1984 (SA) s 10. It is assumed that by necessary implication thatan administration order made by the Guardianship Board would have the same effect or at least wouldtake precedence over the power of attorney while the administration order was in effect.114 Guardianship and Administration Act 1995 (Tas) s 53.115 Powers of Attorney Act 2000 (Tas) s 33.

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10. 10. 5. VictoriaIn Victoria if VCAT makes an administration order for the maker of anenduring power of attorney, the attorney may exercise power under theenduring power of attorney only to the extent authorised by VCAT.116

10. 10. 6. Western AustraliaIn Western Australia if WASAT makes an administration order in relation tothe estate of the maker of an enduring power of attorney, it has a number ofoptions. WASAT may revoke or vary the power of attorney. Because WASATmay make limited forms of administration orders, it may revoke or vary theenduring power of attorney to remove any inconsistency between it and theadministration order. However, where WASAT makes an administration order,the enduring attorney is accountable to the administrator as if the administratorwere the maker of the power and the administrator has the same power to varyor revoke the power of attorney as the maker had when of full legal capacity. 117

10. 10. 7. Australian Capital TerritoryIn the Australian Capital Territory, ACAT may revoke the enduring power ofattorney when making an administration order.118

10. 10. 8. Northern TerritoryIn the Northern Territory when the Supreme Court makes an administration(protection) order, any enduring power of attorney is revoked to the extent towhich it authorizes the enduring attorney to deal with property the subject ofthe protection order.119

10. 11. Role of guardianship tribunals and courts in reviewing the makingand operation and effect of enduring powers of attorneyWhile most enduring attorneys carry out their responsibilities appropriately andgenerously, some do not.120 Some take advantage of their position, others havedifficulty carrying out their functions effectively and sometimes problems arisethat attorneys need assistance to resolve. Consequently, guardianship tribunalsand sometimes Supreme Courts have substantial powers to review the makingas well as the operation and effect of enduring powers of attorney. Applicationsto these tribunals and courts to exercise of these powers will often be linkedwith applications to make an administration order. There are some examples of

116 Instruments Act 1958 (Vic) s 125G.117 Guardianship and Administration Act 1990 (WA) s 108. For a case in which the Tribunal consideredthat the enduring power of attorney was not operating to protect the interests of the maker andconsequently appointed an administrator and then revoked the enduring power of attorney see, JJB &ERB [2006] WASAT 110.118 Guardianship and Management of Property Act 1991 (ACT) s 62(2)(c) and (4).119 Powers of Attorney Act 1980 (NT) s 18. See also Aged and Infirm Person’s Property Act 1979 (NT).120 For an example of a tribunal being satisfied that the management of the maker’s finances by herjoint enduring attorneys was appropriate and that it was appropriate for them to continue to act despitethe concerns of other relatives, see Re HIO [2006] QGAAT 75..

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this below, particularly from Queensland and Western Australia in 10. 11. 2. 2and 10. 11. 6. 2.

A 2005 Queensland case shows some of the more common ways an enduringattorney fails to carry out their responsibilities.121 In 1997 an elderly womanappointed her son and her daughter as her joint attorneys under an enduringpower of attorney. Her son had been assisting her with her financial affairs formore than a decade and she had become increasingly dependant on him.However in 2002 she revoked this power of attorney and appointed her son asher sole enduring attorney. This power of attorney authorised her son, as hismother’s attorney, to enter conflict transactions, contract with himself and hisrelatives, conduct business and make and receive fees for professional servicescarried out by him for her.

Immediately afterwards, he began the process of selling his mother’s unit, heronly significant asset. On the day of settlement the son acknowledged a debt tohis mother which his mother immediately forgave him. She also gave himanother substantial gift of money straight out.

The then Guardianship and Administration Tribunal found that the elderlywoman did not have the capacity to make the 2002 power of attorney. TheTribunal revoked that power of attorney. It also ordered that the joint attorneyswere no longer authorised to act under the 1997 power of attorney as it hadbeen overtaken by the Tribunal making an administration order. The Tribunalmade the administration order because it found that the son had:

1. unjustifiably refused to pay his mother’s nursing home fees allowingarrears to accumulate,

2. failed to pay his mother’s pharmacy accounts despite reminders from thepharmacy,

3. failed to pay his mother’s fees to a plastic surgeon, for surgery carriedout.122

Furthermore the Tribunal found that the evidence given in relation to the gifttransaction was inadequate to rebut the presumption of undue influence whichexists under the Powers of Attorney Act 1998 (Qld) or in equity, because of thefiduciary relationship that existed between the son and his mother as herenduring attorney.123 The Tribunal considered that these matters constitutedmaladministration of the elderly woman’s estate and appointed the PublicTrustee as the administrator of her estate.124

10. 11. 1. New South Wales

121 Re DEM [2005] QGAAT 59.122 Ibid. [103]-[105].123 Ibid. [106] and Powers of Attorney Act 1998 (Qld) s 87.124 Ibid. [107] and [137].

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In the 2010 case, Szozdz v Szozda, Barrett J of the Supreme Court of NewSouth Wales, noting that the question of the mental capacity of a maker of anenduring power of attorney could arise in a range of legal proceedings beforethe Supreme Court, held that the Powers of Attorney Act 2003 (NSW) did notcreate an exclusive code for the Court and the Guardianship Tribunal to dealwith that issue. Consequently the Supreme Court retained its establishedjurisdiction to deal with that matter.125 However, it is suggested that if thepurpose of the application to the Court is simply to review an enduring powerof attorney, the proper course is to make the application under the provisions ofthe Powers of Attorney Act 2003 (NSW).

10. 11. 1. 1. Who may apply for and be party to a review?In New South Wales both the Guardianship Tribunal and the Supreme Courthave the discretion decide whether or not to review either the making or theoperation and effect of an enduring power of attorney when an application ismade to them by any of the following “interested persons”:

1. an enduring attorney,2. the maker of the enduring power of attorney to be reviewed,3. a guardian or enduring guardian of the maker, or4. any other person who, in the opinion of the Tribunal or Court, has a

proper interest in the proceedings or a genuine concern for the welfareof the maker.126

In addition to the applicant, each of the following is a party to such anapplication:

1. any other attorneys under the enduring power of attorney,2. the maker of the enduring power of attorney to be reviewed, and3. any other person that the Tribunal or Court joins as a party.127

10. 11. 1. 2. Declarations of incapacity and invalidityThe Tribunal or Court may make either or both of the following orders aboutthe making of the enduring power of attorney:

1. an order declaring that the maker did or did not have mental capacity tomake a valid power of attorney at the time they made the enduringpower of attorney being reviewed, and

2. an order declaring that the power of attorney is invalid (either in wholeor in part) if the Tribunal or Court was satisfied that:

(a) the maker did not have the capacity necessary to make theenduring power of attorney,

125 Szozda v Szozda [2010] NSWSC 804 [16] and [19].126 Powers of Attorney Act 2003 (NSW) s 35(1).127 Ibid. s 35(2) and (3).

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(b) the enduring power of attorney did not comply with the otherrequirements of the Powers of Attorney Act 2003 (NSW)applicable to it, or

(c) the enduring power of attorney is invalid for any other reason,for example, the maker was induced to make it by dishonesty orundue influence.

If the review is about the operation and effect of an enduring power of attorney,the Tribunal or Court may make one or more of the following orders if it issatisfied that either it would be in the best interests of the maker to do so or itwould better reflect the wishes of the maker:

1. an order varying a term of, or a power conferred by, the power ofattorney,

2. an order removing an attorney from office,3. an order appointing a substitute attorney to replace an attorney who has

been removed from office or who otherwise vacates the office,4. 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 attorneyto replace the attorney who vacated office,

5. an order directing or requiring any one or more of the following:(a) that an attorney furnish accounts and other information to

the Tribunal or Court or to a person nominated by theTribunal or Court,

(b) that an attorney lodge with the Tribunal or Court a copyof all records and accounts kept by the attorney of dealingsand transactions made by the attorney under the power128,

(c) that those records and accounts be audited by an auditorappointed by the Tribunal or Court and that a copy of thereport of the auditor be furnished to the Tribunal or Court,

(d) that the attorney submit a plan of financial management tothe Tribunal or Court for approval,

(f) an order revoking all or part of the power of attorney, or(g) such other orders as the Tribunal or Court thinks fit.129

Although he decided the case on the ground that Mrs Szozda lacked the mentalcapacity to make the relevant enduring power of attorney in Szozda v Szozda,Barrett J also noted that s 17 of the Powers of Attorney Act 2003 (NSW) isrelevant to the scope of the authority given to an attorney under an enduringpower of attorney. He noted that while s 17 does not define or describe theextent or quality of mental capacity required for the creation of a valid power

128 For an example of a direction to lodge accounts and other records see, TKX [2009] NSWGT 6. For acase in which an applicant for a review of the operation of an enduring power of attorney furtherappealed their concerns to the Administrative Appeals Tribunal, see IS v Public Guardian & Ors[2009] NSWADTAP 24.129 Ibid. s 36(4).

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of attorney, it removes from the scope of the authority given by the power ofattorney the attorney’s power to do acts, as attorney, the nature of which werebeyond the maker’s understanding because of the extent of their mentalincapacity at the time of the creation of the power of attorney.130 It is suggestedthat both the Tribunal and the Court could use s 17 to limit the scope of thepowers of an attorney could exercise under an enduring power of attorney onthe grounds that the nature of some acts were beyond the maker’sunderstanding of because of the extent of the maker’s mental incapacity at thetime they made the power of attorney.

The term “such other orders as the Tribunal or Court thinks fit” can include anorder declaring that the maker of the enduring power of attorney lacked orlacks capacity because of mental incapacity at a specified time or during aspecified period or for the time being. If such an order is made, any revocationof the enduring power of attorney made during a time covered by the order isineffective. 131 If the order is that the maker lacks capacity through mentalincapacity for the time being, the effect is, for the purposes of the operation ofthe power of attorney, that the maker lacks such capacity for any periodspecified in the order or until further order of the Tribunal or Court makingit.132

As has been noted at 10. 10. 1 above, when either the Guardianship Tribunal orSupreme Court conducts a review of either the making or the operation andeffect of an enduring power of attorney, it may decide to treat the review as anapplication for an administration order and make such an order.133

10. 11. 1. 3. Advice or directionsAn enduring attorney may apply for advice or direction by the Tribunal orCourt on any matter relating to the scope of the attorney’s appointment or theexercise of any function by the attorney under the power of attorney. Whendetermining any such application, the Tribunal or Court may decide to:

1. approve or disapprove of any act proposed to be done by the attorney,2. give such advice or direction as it considers appropriate, or3. 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 applicationto review the enduring power of attorney.134

10. 11. 2. Queensland10. 11. 2. 1. Who may apply for and be party to a review?

130 Szozda v Szozda [2010] NSWSC 804 [41].131 Ibid. s 36(5).132 Ibid. s 36(6).133 Powers of Attorney Act 2003 (NSW) s 37, Guardianship Act 1987 (NSW) s 25F(d).134 Ibid. ss 36 and 38.

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In Queensland both QCAT and the Supreme Court have the power to deal withapplications for a declaration, order, direction, recommendation or advice aboutsomething in, or related to, an enduring power of attorney.135 The followingmay make such applications about an enduring power of attorney:

1. the maker of the enduring power of attorney,2. a member of the maker’s family,136

3. an attorney under the enduring power of attorney,4. the Adult Guardian or Public Trustee, or5. a person the Tribunal or Court considers an interested person.137

10. 11. 2. 2. Declarations of incapacity and invalidityQCAT or the Court may make a declaration about a person’s capacity at thetime they made the enduring power of attorney or at any other relevant time.138

QCAT or the Court may also decide on the validity of an enduring power ofattorney and may declare it invalid if satisfied that:

1. the maker did not have the capacity necessary to make it,2. the enduring power of attorney does not comply with the other

requirements of the Powers of Attorney Act 1998 (Qld), or3. the enduring power of attorney is invalid for another reason, for

example, the maker was induced to make it by dishonesty or undueinfluence.139

Nevertheless, if QCAT or the Court declares the document invalid, it may, atthe same time, appoint one or more attorneys for the maker in effect making anew enduring power of attorney.140 As an alternative it may, at the hearingabout the maker’s capacity to make the enduring power of attorney, also dealwith an application that the maker also did not have the capacity to revoke theenduring power of attorney subsequently and in addition appoint anadministrator and guardian for the incapable maker.141

135 Powers of Attorney Act 1998 (Qld) ss 109A and 110. Also, s 109 notes that the inherent parenspatriae jurisdiction of the Supreme Court is not affected by this legislation.136 For the purposes of these applications, the maker’s family consists of the following: the maker’sspouse, each of their children who is 18 years or more (including a stepchild, an adopted child, and aperson for whom the maker was foster-parent or guardian when the person was a child), each of themaker’s parents (including a step-parent, adoptive parent, foster-parent and guardian). If there is noneof the above, then each of the maker’s siblings who is 18 years or more (including a step-sibling,adopted sibling, and foster-sibling). See s 110(5).137 Ibid. s 110(3)(f) and (4). QCAT or the Court may join parties to these applications and allowinterested persons to take part. See s 110(4).138 Ibid. s 111. For examples see, Re CEJ [2005] QGAAT 30, Re MV [2005] QGAAT 46 and Re CAC[2008] QGAAT 45.139 Ibid. s 113.140 Ibid. s 113(3).141 See for example, Re LCG [2003] QGAAT 15, Re DEM [2005] QGAAT 59 and Re RWM [2006]QGAAT 52.

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10. 11. 2. 3. Advice or directionsIn relation to these applications, the powers of QCAT and the Court extend togiving directions or advice or making recommendations, order or declarationsabout:

1. the interpretation of the terms of, or another issue involving an enduringpower of attorney or advance health directive, or

2. the exercise of an enduring attorney’s power or another issue involvingtheir power.142

10. 11. 2. 4. The Tribunal or Court’s other powers when reviewing the making,operation and effect of an enduring power of attorneyIf 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, toundertake a transaction that they were not otherwise authorised to undertake.143

QCAT or the Court may, on its own initiative or on the application of themaker or an interested person order that:

1. the enduring attorney files with it, and serves on the applicant, asummary of receipts and expenditure or more detailed accounts ofdealings and transactions under the power of attorney for a specifiedperiod,

2. the accounts be audited by an auditor appointed by QCAT ot the Courtand that a copy of the auditor’s report be given to it and the applicant, or

3. the enduring attorney present a plan of management for approval.144

10. 11. 3. South AustraliaIn South Australia the Supreme Court, but not the Guardianship Board, has thejurisdiction to deal with enduring powers of attorney. It will deal withapplications from any person who, in its opinion, has a proper interest in thematter for orders 1, 2, 3 and 4 below. The enduring attorney may apply fororders 3, 4 and 5 while the Court may make the orders set out in 1 to 6 belowwhen dealing with any of these applications. The Court may, by order:

1. require an enduring attorney (or former one) to file in the Court andserve on the applicant a copy of all records and accounts kept by theenduring attorney of dealings and transactions made by the enduringguardian when exercising the enduring power of attorney,

2. require that such records and accounts to be audited by an auditorappointed by the Court and that a copy of the report of the auditor to begiven to the Court and the applicant,

3. revoke or vary the terms of the enduring power of attorney,

142 Ibid. s 118(1). For examples see, Re CEJ [2005] QGAAT 30 and Re CAB [2007] QGAAT 23.143 Ibid. s 118(2).144 Ibid. s 122.

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4. appoint a substitute enduring attorney,145

5. give advice and direction as to matters connected with the exercise ofthe enduring power of attorney or the meaning of its terms, and

6. make such other order (declaratory or otherwise) as to the exercise ofthe enduring power of attorney, or the construction of its terms, as theCourt thinks fit.146

10. 11. 4. Tasmania10. 11. 4. 1. Who may apply for and be party to a review?In Tasmania the Guardianship and Administration Board may hold a hearing toreview an enduring power of attorney of its own motion or on application bythe enduring attorney, by or on behalf of a maker or by any other person whothe Board believes has a proper interest in the matter.147 While the SupremeCourt does not have this jurisdiction, the Board may seek the Court’s advice byreferring a special case to it for its opinion. Also the Board’s decisions underthe Powers of Attorney Act 2000 (Tas) may be appealed to the SupremeCourt.148

10. 11. 4. 2. Orders the Board may make on review including declarations ofincapacity and invalidityAfter conducting the review the Board may, by order:

1. vary a term of, or a power conferred by, the enduring power of attorney,2. appoint a substitute enduring attorney,3. appoint an administrator of the estate of the maker of the enduring

power of attorney,4. declare that the maker did or did not have mental capacity to make a

valid enduring power of attorney,5. revoke the enduring power of attorney and, if the donor is over the age

of 18 years and the Board thinks fit, appoint an administrator of his orher estate,

6. make such other order as to the exercise of the power, or theconstruction of its terms, as it thinks fit, or

7. declare that the enduring power of attorney is invalid if it is satisfiedthat:

(a) the maker did not have the mental capacity to make it,

(b) it does not comply with the other requirements of the Powersof Attorney Act 2000 (Tas), or

145 As noted in 10. 6. 1. 5. above, an enduring attorney may not renounce their role under an enduringpower of attorney during the time the maker is incapable without the permission of the Supreme Court.146 Powers of Attorney and Agency Act 1984 (SA) s 11.147 Powers of Attorney Act 2000 (Tas) s 33(1).148 Ibid. ss 39 and 40.

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(c) it is invalid because the maker was induced to make it bydishonesty or undue influence or invalid for any other reason.149

When there is an urgent need to do so, the Board may suspend the operation ofan enduring power of attorney and, on doing so, the Board may also:

1. appoint the Public Trustee or any other person as a substitute attorney,and

2. make such other orders, and give such other directions, as to the exerciseof the power as it thinks fit.150

10. 11. 4. 3. Advice or directions and the exercise of other powersAn enduring attorney may apply for advice or direction by the Board on anymatter relating to the scope of their appointment or the exercise of any powerby the enduring attorney under the enduring power of attorney. Suchapplications can be made formally or informally to the Board. The Board mayrequire notice to be given or may exercise its powers without a hearing.

The Board may then exercise a wide range of powers. It may:

1. approve or disapprove of any act proposed to be done by the attorney,2. give such advice or direction as it considers appropriate, and3. vary the effect of the enduring power of attorney, or4. make any other order that it could have made on an application to

review the enduring power of attorney.

The Board also has power, of its own motion, to direct, or offer advice to, anenduring attorney in respect of any matter arising under the power of attorney.

It also may, of its own motion and without a hearing:

1. require an attorney to lodge with it a copy of all records and accountskept by the enduring attorney of dealings and transactions made by themunder the enduring power of attorney,

2. require those records and accounts to be audited by an auditor appointedby it and require a copy of the report of the auditor to be given to it, or

3. require the enduring attorney to submit a plan of financial managementto the it.151

10. 11. 5. VictoriaIn Victoria VCAT may deal with any matter or question relating to:

149 Ibid. s 33(2). For a description of the Board conducting a review of the appointment of an attorneyunder an enduring power of attorney see, KB and RB v Guardianship and Administration Board [2007]TASSC 45.150 Ibid. s 33(4).151 Ibid. s 35.

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1. the scope of an attorney's powers under an enduring power of attorney,2. the exercise of any power by an attorney under an enduring power of

attorney or3. any other thing in or related to the enduring power of attorney part of the

Instruments Act 1958 (Vic).

VCAT may make a declaration, order, direction or recommendation aboutthese matters as a result of an application.152

10. 11. 5. 1. Who may apply for and be party to a review?The following may apply to VCAT:

1. an attorney under the enduring power of attorney,2. the maker of the enduring power of attorney,3. the Public Advocate, or4. another person whom VCAT is satisfied has a special interest in the

affairs of the maker.153

The maker, any enduring attorney and the Public Advocate are entitled tonotice of the application, the hearing and any order made together with anyonein the following list that VCAT directs notice be given to:

1. the nearest relative of the maker,2. the primary carer (if any) of the maker,3. any guardian of the maker,4. any person appointed as alternative guardian of the maker,5. any administrator of the estate of the maker, and6. any person whom VCAT is satisfied has a special interest in the affairs

of the maker.154

10. 11. 5. 2. Declaration of invalidityVCAT does not have a direct power to make a declaration of incapacity inrelation to the making of an enduring power of attorney, but it can make anydeclaration it considers necessary in relation to an enduring power ofattorney.155 Also, it has the power to revoke an enduring power of attorney andmay do so if it is satisfied that it is in the maker’s best interests to do so andthat the maker currently lacks the capacity to make an enduring power ofattorney.156

However, VCAT may, on its own initiative or on application declare an

152 Instruments Act 1958 (Vic) s 125V(1).153 Ibid. s 125V(2).154 Ibid. s 125W(2) and (3). In s 125W(3) the terms “administrator”, “guardian”, “nearest relative” and“primary carer” have the same meanings as they have in the Guardianship and Administration Act1986 (Vic) – see s 125W(4).155 Instruments Act 1958 (Vic) s125Z(1)(a).156 Ibid. ss 125Q and 125X.

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enduring power of attorney to be invalid if it is satisfied that:

1. the maker lacked capacity at the time the enduring power of attorneywas made,

2. it does not comply with the requirements of the Instruments Act 1958(Vic),

3. it is invalid for another reason, for example, the maker was induced tomake it by dishonesty or undue influence. 157

Any enduring power of attorney declared to be invalid is void from the start.158

10. 11. 5. 3. Advisory opinions, directions and other powersVCAT may give an advisory opinion on any matter relating to an enduringpower of attorney that is referred to it by application.159

In addition VCAT, on its own initiative or on an application may:1. make a declaration or make recommendations or give any directions it

considers necessary in relation to an enduring power of attorney,2. vary the effect of an enduring power of attorney,3. suspend for a specified period an enduring power of attorney, either

generally or in respect of a specific matter,4. make any order it considers necessary in relation to an enduring power

of attorney, and5. may give directions to an attorney under an enduring power of attorney

in respect of any matter.160

VCAT, on its own initiative or on an application, may also order that:1. an enduring attorney lodges with it accounts or other documents relating

to the exercise of the power of attorney for a specified period,2. the accounts be examined or audited by a person appointed by it and that

a copy of the person's report be given to it and the applicant.161

10. 11. 6. Western AustraliaIn Western Australia, under the Guardianship and Administration Act 1990(WA), WASAT may, when application is made to it, make certain orders inrelation to enduring powers of attorney.162 The Act does not affect the SupremeCourt’s inherent jurisdiction.163 However, WASAT takes the view that it was

157 Ibid. s 125Y(1).158 Ibid. s 125Y(2).

159 Ibid. s125ZA160 Ibid. s 125Z.161 Ibid. s 125ZB.162 Guardianship and Administration Act 1990 (WA) s 109.163 Ibid. s 3A.

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given a general supervisory jurisdiction over enduring powers of attorney thatit may exercise even after the maker of the power of attorney has died.164

10. 11. 6. 1. Who may apply for the intervention of the Tribunal?Anyone who, in the opinion of WASAT, has a proper interest in the matter mayapply to WASAT for the limited kinds of orders listed below. When dealingwith an application, WASAT may hear only the applicant’s case making anorder (make an ex parte order) or give directions as to who shall be givennotice of the application and who shall be entitled to be heard before WASATmakes its order.165

10. 11. 6. 2. Orders the Tribunal can makeThe orders that WASAT may make are limited in nature. They do not includethe power to make declarations as to the capacity of a maker of an enduringpower of attorney or as to the validity of an enduring power of attorney. Theorders that WASAT may make on the application of a person with a properinterest, including an enduring attorney, are orders:

1. 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 ofdealings and transactions made by the enduring attorney in connectionwith the power166,

2. requiring such records and accounts be audited by an auditor appointedby it and requiring a copy of the report of the auditor to be given to itand the applicant for the order, or

3. revoking or varying the terms of an enduring power of attorney,appointing a substitute enduring attorney or confirming that a personappointed to be the substitute enduring attorney has become theenduring attorney.167

In addition to the orders just listed, ensuring attorneys may apply to WASATfor directions as to matters connected with the exercise of the power of attorneyor the construction of its terms.168

Even though the orders WASAT may make are limited in nature, applicationsto it to intervene in enduring powers of attorney are often linked with otherapplications, particularly applications for administration orders, so thatWASAT hearing the applications together can make a range of orders to meetthe now incapable current person’s needs.169

164 KS [2008] WASAT 29 and EW [2010] WASAT 91.165 Ibid. s 110.166 For an example see, EW [2010] 91 in which the audit was ordered after the death of the maker of theenduring power of attorney.167 Ibid. s 109(1).168 Ibid. s 109(2).169 For an example see, VM and Y [2006] WASAT 245, 44 SR (WA) 104.

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10. 11. 7. Australian Capital TerritoryIn the Australian Capital Territory, ACAT is empowered to make a number oforders in relation to enduring powers of attorney or their makers when themaker has lost capacity (has impaired decision-making capacity). ACAT maymake these orders when an application is made to it, but it may act on its owninitiative when it is hearing a matter under the Guardianship and Managementof Property Act 1991 (ACT).170 The Supreme Court may deal with applicationsabout the powers of an enduring attorney while the Public Trustee and thePublic Advocate also have roles.171

10. 11. 7. 1. Who may apply for and be party to a review?The following may make applications ACAT, as interested persons, in relationto enduring powers of attorney but usually only when the maker of the powerof attorney has impaired decision-making capacity:

1. the enduring attorney,2. the maker,3. a relative of the maker,172

4. the Public Advocate,5. the Public Trustee,6. the maker’s guardian,7. the manager (administrator) of the maker’s estate, or8. any other person, with the leave of the Tribunal.173

In addition ACAT may conduct a review of its own initiative.

10. 11. 7. 2. Declaration of incapacityOn application, ACAT may declare whether the maker of an enduring power ofattorney has decision-making capacity or impaired decision-makingcapacity.174

10. 11. 7. 3. Advice, directions or other ordersWhen dealing with an application at a time when the maker of an enduringpower of attorney has impaired decision-making capacity, ACAT may, byorder:

1. give a direction, not inconsistent with Powers of Attorney Act 2006(ACT) or the enduring power of attorney, that the enduring attorney door not do a stated act,

170 Powers of Attorney Act 2006 (ACT) s 62(2) and (4).171 Ibid. ss 80, 81, 83 and 84.172 A relative of the maker is a person related by blood, affinity or adoption to the makeror a domestic partner of the maker. See Powers of Attorney Act 2006 (ACT) Dictionary. The meaningof “domestic partner” is set out in the Legislation Act 2001 (ACT) s 169.173 Guardianship and Management of Property Act 1991 (ACT) s 62(3) and Powers of Attorney Act2006 (ACT) s 74.174 Guardianship and Management of Property Act 1991 (ACT) s 65.

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2. direct the enduring attorney to produce stated books, accounts or otherrecords of transactions carried out by the attorney for the maker,175

3. revoke the enduring power of attorney, or part of it or4. make a declaration about the interpretation or effect of the enduring

power of attorney.176

If ACAT revokes the enduring power of attorney, it may appoint either aguardian or administrator (manager) for the estate of the maker.177

Also when the maker of the power of attorney has impaired decision-makingcapacity and ACAT is satisfied that it is in the interests of the maker to removethe attorney, it may remove an attorney under the enduring power ofattorney.178

10. 11. 7. 4. Access to the maker of an enduring power of attorney who hasimpaired decision-making capacityWhen the maker of an enduring power of attorney has impaired decision-making capacity, the Public Advocate is entitled to reasonable access tothem.179 Also, ACAT may grant an interested person, as defined in 10. 11.7. 1above access to the maker, with or without conditions, if it is satisfied that anenduring attorney has denied the person access to the maker and it isreasonable to allow the access.180

10. 11. 8. Northern TerritoryIn the Northern Territory, the Supreme Court has the power to deal withenduring powers of attorney at any time after the maker of the enduring powerhas become legally incapacitated. The Public Trustee or any other person who(in the Court’s opinion) has an interest in any property which may be dealt withby the maker of an enduring power may apply to the Supreme Court for any ofthe following orders – an order:

1. requiring the enduring attorney to file in the Court and serve on theapplicant a true and accurate record of any transaction entered into bythe enduring attorney charging or otherwise disposing of, whether forvaluable consideration or otherwise, any of the assets of the maker,

2. requiring such records as referred to in the order to be audited by anauditor appointed by the Court, and requiring a copy of the report of thatauditor to be given to the Court and the applicant , or

175 If the Tribunal asks the Public Trustee to assist it by examining and reporting on books, accounts orother records of transactions carried out by the enduring attorney, the Public Trustee must assist. SeePowers of Attorney Act 2006 (ACT) s 83(2). See also s 83(3).176 Guardianship and Management of Property Act 1991 (ACT) s 62(2).177 Ibid s 62(4).178 Ibid. s 66.179 Ibid. s 84(2).180 Ibid. s 84(3) and (4).

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3. revoking or varying the terms of the enduring power of attorney in suchmanner as the Supreme Court thinks fit, including appointing the PublicTrustee or another person as a substitute enduring attorney.181

181 Powers of Attorney Act 1980 (NT) ss 11 and 15.