Recommendation 5–2               State and territory civil and administrative tribunals should have:

(a)         jurisdiction in relation to any cause of action, or claim for equitable relief, that is available against a substitute decision maker in the Supreme Court for abuse, or misuse of power, or failure to perform their duties; and

(b)         the power to order any remedy available to the Supreme Court.

5.82     Recommendation 5–2 covers misuse of powers by enduring attorneys/guardians, as well as guardians and financial administrators appointed by a court or tribunal.[84] In many instances of financial abuse (or abuse by a guardian which causes loss), there are limited options for an older person to seek redress, and few consequences for the representative who has misused their power.

5.83     An abused person may want their money or assets returned, but may not want police involvement, preferring to retain relationships and not see the person prosecuted. They also may not be willing or able to afford to commence a civil action in the Supreme Court.

5.84     In respect of enduring appointments, state and territory tribunals are typically responsible for supervising enduring arrangements, with the power to revoke or amend those arrangements on the application of an interested party.[85] Recommendation 5–2 would extend that power to enable the tribunal to order an enduring attorney/guardian to pay compensation where they have breached their obligations under an enduring document causing the principal loss. A number of jurisdictions have statutory compensation regimes, including Queensland and South Australia.[86] This recommendation would have the benefit of the tribunal being a ‘one stop shop’ for enduring power of attorney/guardianship matters.

5.85     Recommendation 5–2 builds on the Victorian model that provides a mechanism for redress in a non-cost jurisdiction—the Human Rights Division of the Victorian Civil and Administrative Tribunal (VCAT).[87] Applications for compensation to VCAT can be made by the person, any attorney or the executor, the public advocate, a family member, or any other person with a special interest in the affairs of the principal.[88] There is no financial cap on the amount that can be compensated. The provision of compensation is discretionary.

5.86     Nevertheless, VCAT can refer an application for compensation to the Supreme Court,[89] and it has been suggested that this may occur where the estate is particularly large or complex.[90] The Act provides an attorney a defence when acting honestly and reasonably.[91]

5.87     In respect of guardians and financial administrators appointed by a court or tribunal, the Queensland Civil and Administrative Tribunal (QCAT) has the power to order compensation where a guardian or administrator causes loss to the person due to failure to comply with the Act.[92]

5.88     Expanding this jurisdiction to other states and territories was supported by a number of stakeholders.[93] This recommendation should be easily implementable across mainland Australia as there is a civil and administrative tribunal in each of these state and territories.[94] Tasmania currently does not have a single civil and administrative tribunal but is actively considering implementing one.[95]

5.89     Vesting state and territory tribunals with the power to order compensation, where a substitute decision maker has acted outside their powers to cause loss, would serve two purposes. It would provide a practical way to redress loss for older persons unable or unwilling to take action in the Supreme Court. Tribunals aim to facilitate the just, quick and economical resolution of proceedings with a more flexible and informal approach to procedural and evidentiary matters than a court.[96] Having the power to make compensation orders for loss caused by a substitute decision maker fits well within this remit. It would also operate as a deterrent to misusing funds, especially as any interested party, including another family member with an interest in the affairs of the principal, can seek a tribunal order for compensation on behalf of the principal. The tribunals should have appropriate discretion to excuse breaches that are inadvertent or otherwise in good faith, recognising the onerous responsibilities that family members voluntarily assume when taking on the role of a substitute decision maker.

5.90     Recommendation 5–2 uses the Victorian approach as a model—with important variations. In Victoria, the jurisdiction given to VCAT by s 77 of the Powers of Attorney Act 2014 (Vic) is the power to order an attorney to compensate a principal for a loss caused by the attorney contravening any provision of the Powers of Attorney Act 2014 (Vic) relating to an enduring power of attorney when acting as the attorney.

5.91     The terms ‘compensate’ and ‘loss’ are not defined in the Powers of Attorney Act 2014 (Vic). Nor are there any provisions in the Act ‘detailing the nature of the remedy or orders that can be made’.[97] These provisions have not yet been judicially reviewed and accordingly, it is not clear how broadly they will be interpreted by the Supreme Court. Accordingly, there is some uncertainty as to the scope of the current jurisdiction granted to VCAT.

5.92     ARNLA suggested that there may be important differences in the nature and the amount of compensation that a tribunal may order to ‘compensate a principal for a loss’ than may be sought in the equitable jurisdiction of the Supreme Court.[98] Similarly, it has been noted that

[w]hile the Supreme Court and VCAT both have jurisdiction in relation to s 77, the Supreme Court has broad jurisdiction, including inherent jurisdiction and general equitable jurisdiction but VCAT is a creature of statute and has no inherent jurisdiction or general equitable jurisdiction.[99]

5.93     Importantly, the Supreme Court has available a range of remedies in equity that would extend beyond compensation. These remedies may be particularly important where an attorney has profited from their role, or acted in a situation of conflict of interest such as transferring a property owned by the principal to themselves.[100]

5.94     Accordingly, to avoid any potential for a claimant to receive a markedly different remedy, depending on whether they took their action to the tribunal or the Supreme Court, the ALRC has drafted Recommendation 5-2 in line with the suggestion of the Victorian Law Reform Commission (VLRC) in its Guardianship Report.[101]As formulated, Recommendation 5–2 would specifically avoid the situation where the same facts give rise to a different outcome, depending on where the matter was heard.

5.95     Importantly, as is the case in Victoria, the tribunal should have the power to refer a matter to the Supreme Court if the matter is complex or involves questions of law.[102]

Tribunal jurisdiction where the principal and attorney reside in different states

5.96     The ALRC notes that it is possible that a state or territory tribunal vested with the jurisdiction suggested in Recommendation 5–2 could receive a case where the principal and the substitute decision maker reside in different states. State courts are only able to hear matters involving residents of different states in accordance with the Judiciary Act 1903 (Cth).[103]

5.97     The NSW Court of Appeal, in a 2017 decision, found that states cannot confer jurisdiction on tribunals to make binding determinations on matters involving residents of different states. The Court held that any state legislation attempting to do so would be inconsistent with s 39 of the Judiciary Act 1903 (Cth) and thus invalid under s 109 of the Australian Constitution.[104] In making this finding, the Court noted that the ‘essence of s 39(2) is to invest federal jurisdiction conditionally, so as to ensure that appeals lay to the High Court, and to do so universally, in all matters falling within ss 75 and 76.[105]

5.98     The ALRC considers that implementation of Recommendation 5–2 would require an amendment to s 39 of the Judiciary Act 1903 (Cth) so that state and territory tribunals would have jurisdiction over disputes where the attorney and principal reside in different states. This may prove difficult, as commentators have queried whether the Commonwealth has the power to legislate with respect to the jurisdiction of state tribunals.[106] Alternatively, Recommendation 5–2 could be implemented by adopting a court registration process for tribunal orders where the case involves parties from different states.[107]