5.61 The ALRC’s Equality, Capacity and Disability Report, recommended that the appointment and conduct of substitute decision makers be subject to appropriate and effective safeguards. A national register is an important safeguard against abuse. In addition, the ALRC has considered the range of safeguards that have been introduced recently across the states and territories. The following proposals seek, at a minimum, to ‘level up’ the protections against abuse that exist in state and territory legislation so that the strongest protections exist in all states and territories. This will ensure national consistency in safeguards. Also explored are the potential additional safeguards that could be afforded by a national register.
Question 5–2 Should public advocates and public guardians have the power to conduct random checks of enduring attorneys’ management of principals’ financial affairs?
5.62 As set out in Chapter 3, in each state or territory there is generally a body whose role is to promote and protect the rights and interests of people with disabilities known as either the public guardian or the public advocate. The public advocate/guardian’s powers could be extended beyond following up complaints regarding the actions of an enduring attorney or guardian and extend to proactively monitoring the actions of those with enduring powers through random checking.
5.63 Currently, there is no way for the public advocate/guardian to easily identify whether an enduring document has been made as they are typically stored in a solicitor’s office with a client’s will or in a person’s filing cabinet at home. One of the advantages of a register of enduring documents is that it would provide information as to the existence of all enduring documents made, as well as those that are in operation because the principal has lost decision-making ability. The creation of a national register has the potential to enable greater oversight of the use of enduring documents, which may safeguard against abuse.
5.64 One potential form of oversight is random checking by the public advocate of an attorney’s financial management of their principal’s affairs. This has potential to be a deterrent against abuse and may also identify financial anomalies earlier, reducing the losses suffered by a principal. It nevertheless has privacy implications as it will allow greater public scrutiny of a principal’s financial affairs and their management by the attorney.
5.65 Alternatives considered included requiring attorneys to report annually on their expenditure of their principal’s funds. The ALRC considers that annual reporting would be burdensome and may discourage individuals from agreeing to act as an attorney.
5.66 Some submissions suggested random checking would be an effective safeguard against abuse. The ALRC is keen to hear from stakeholders specifically on whether the public advocate/guardian should be given the power to randomly check on an attorney’s financial management of their principal’s affairs and whether the protective benefit from such a power would be sufficient to outweigh the potential impost on the attorney.
Proposal 5–4 Enduring documents should be witnessed by two independent witnesses, one of whom must be either a:
(a) legal practitioner;
(b) medical practitioner;
(c) justice of the peace;
(d) registrar of the Local/Magistrates Court; or
(e) police officer holding the rank of sergeant or above.
Each witness should certify that:
(a) the principal appeared to freely and voluntarily sign in their presence;
(b) the principal appeared to understand the nature of the document; and
(c) the enduring attorney or enduring guardian appeared to freely and voluntarily sign in their presence.
5.67 Enhanced witnessing has been an important reform in state and territory legislation. It assists in ensuring that enduring documents are made and operative only in circumstances genuinely authorised by an older person, upholding choice and control.
5.68 Enhanced witnessing responds to an identified problem raised by Community Legal Centres, elder abuse hotlines and other welfare groups. They have highlighted cases of older people being pressured into signing these instruments. In other cases, the instruments may have been signed by older people with reduced decision-making ability.
5.69 With some minor exceptions, under state and territory laws at least one witness must either be eligible to witness statutory declarations or the more restricted standard of being eligible to witness affidavits. Generally, a relatively wide group of individuals can sign statutory declarations, including public servants and post office staff. Statutory declarations are also unilateral and don’t involve duties arising in another person. Affidavits typically can only be signed by lawyers, JPs, public notaries, registrars, and clerks of a court. A more stringent list of prescribed witnesses enhances the protection around enduring documents. The ALRC proposes to include medical practitioners because of their expertise in assessing decision-making ability. This is consistent with the approach in Victoria.
5.70 The second part of the proposed enhanced witnessing requirement is the increased role of witnesses. Under the proposal, witnesses are not just confirming that they watched the principal and attorney/guardian sign the enduring document, they are also certifying that they were satisfied that the principal and attorney/guardian freely and voluntarily signed in their presence, and at the time the principal signed the enduring document, the principal appeared to have decision-making ability in relation to the making of an enduring document. These are important protections that seek to avoid an enduring arrangement being put in place under duress or in circumstances where the principal lacked decision-making ability. This proposal is consistent with more recent reforms across the states and territories.
5.71 An additional important protection is specific legislative exclusions of certain individuals from witnessing an enduring document. For example, in Queensland, a witness must not be:
the person signing the document for the principal;
an attorney of the principal;
a relation of the principal or a relation of an attorney of the principal;
a paid carer or health provider of the principal (if the power is a personal or non-financial power); or
a beneficiary under the principal’s will.
5.72 These restrictions are important in protecting against undue influence and should be adopted as part of the enhanced witnessing requirements.
5.73 The key disadvantage of enhanced witnessing requirements is that they may dissuade individuals from entering into such arrangements. This is a problem because enduring documents, despite being a source of abuse of older persons, are also an important protection.
5.74 The disincentive effect of enhanced witnessing requirements may be addressed in part by increasing community awareness of the role of JPs and their availability to witness the signing of enduring documents.
5.75 The ALRC is of the view that the advantage of enhanced witnessing to the integrity of the enduring document outweighs any potential disincentive that it may create. Enduring documents are important documents which give attorneys/guardians enormous powers, and appropriately stringent witnessing requirements are a necessary and important protection against misuse.
Proposal 5–5 State and territory tribunals should be vested with the power to order that enduring attorneys and enduring guardians or court and tribunal appointed guardians and financial administrators pay compensation where the loss was caused by that person’s failure to comply with their obligations under the relevant Act.
5.76 This proposal covers misuse of powers by enduring attorneys/guardians as well as guardians and financial administrators appointed by a court or tribunal.
5.77 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.
5.78 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; and/or
be willing or able to afford to commence a civil action in the Supreme Court.
5.79 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. This proposal 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 South Australia and Queensland. 
5.80 This proposal 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). 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. There is no financial cap on the amount that can be compensated. Nevertheless, VCAT can refer an application for compensation to the Supreme Court, and it has been suggested that this may occur where the estate is particularly large or complex. The Act provides a defence of acting honestly and reasonably.
5.81 In respect of guardians and financial administrators appointed by a court or tribunal, 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.
5.82 Expanding this jurisdiction to other states and territories was supported by a number of stakeholders.
5.83 State Trustees Victoria went further to recommend that tribunals be empowered to resolve all matters relating to financial elder abuse—including those perpetrated by administrators, guardians or those who perpetrate the abuse without financial authority through coercion or fraud.
5.84 The ALRC supports expanding the jurisdiction of tribunals to order compensation where loss has been caused to the person by the representative decision-maker (an enduring attorney, financial administrator, or guardian) in contravention of the relevant statute. The Victorian Act provides a useful model, which could be expanded to include tribunal appointed guardians and financial administrators.
5.85 Vesting the tribunal with the power to order compensation, where a representative 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 criminal action or action in the Supreme Court. Tribunals aim to facilitate the just, quick and economical resolution of proceedings. Having the power to make compensation orders for loss caused by representatives fits well within this remit.
5.86 It would also operate as a deterrent to misusing funds.
5.87 This proposal does not remove a person’s right to seek an equitable remedy through the superior courts. As is the case in Victoria, the proposal creates an alternative statutory scheme designed to operate independently from the equitable jurisdiction of the Supreme Court.
Restrictions on conflict transactions
Proposal 5–6 Laws governing enduring powers of attorney should provide that an attorney must not enter into a transaction where there is, or may be, a conflict between the attorney’s duty to the principal and the interests of the attorney (or a relative, business associate or close friend of the attorney), unless:
(a) the principal foresaw the particular type of conflict and gave express authorisation in the enduring power of attorney document; or
(b) a tribunal has authorised the transaction before it is entered into.
5.88 Transactions where there is, or there is perceived to be, a conflict between the personal interests of an attorney and the interests of the principal have been identified as a key source of financial abuse.
5.89 These arrangements may occur in situations where the principal and attorney used to be in a family business together and a number of assets of the business are owned by the principal and leased by the attorney. They can also involve the use of ‘family assets’ such as holiday homes.
5.90 Starting with a prohibition on conflict transactions means that when making an enduring document a principal must consider, having regard to their finances and their relationship with the attorney, whether conflicts are likely and in what areas. Having identified potential conflicts the principal has the choice whether to authorise the attorney to act in those areas. This ensures that the principal retains choice and control.
5.91 Once an enduring power of attorney is in effect, an explicit statutory prohibition on conflict transactions requires an attorney to identify potential conflicts of interests and sends a powerful signal that they must either avoid or seek approval for transactions where there are, or may be, conflicts of interests.
5.92 Prior authorisation by a principal or tribunal can also protect the attorney from subsequent accusations that a particular transaction turned out to be particularly advantageous to the attorney at the expense of the principal.
5.93 This proposal is modelled on specific prohibitions on conflict transactions in state and territory legislation such as Victoria and Queensland. The specific drafting of the conflict prohibition would need to take into account gifts and donations made by an attorney on behalf of the principal. Preferably decisions regarding the type and nature of gifts and donations would be guided by the principal’s wishes as expressed in the enduring power of attorney.
Proposal 5–7 A person should be ineligible to be an enduring attorney if the person:
(a) is an undischarged bankrupt;
(b) is prohibited from acting as a director under the Corporations Act 2001 (Cth);
(c) has been convicted of an offence involving fraud or dishonesty; or
(d) is, or has been, a care worker, a health provider or an accommodation provider for the principal.
5.94 This proposal builds on specific exclusions introduced in state and territory legislation for enduring documents.
5.95 Excluding inappropriate persons from acting as enduring attorneys is an important protection against abuse. Evidence suggests that, where individuals who have a history of dishonesty and fraud offences are appointed under an enduring document, there is a greater risk of abuse. The ALRC considers that, while not allowing a principal to appoint a person who has convictions for fraud and dishonesty offences necessarily reduces choice, the appropriate balance between choice and protection requires a full exclusion of those people from being an attorney.
Proposal 5–8 Legislation governing enduring documents should explicitly list transactions that cannot be completed by an enduring attorney or enduring guardian including:
(a) making or revoking the principal’s will;
(b) making or revoking an enduring document on behalf of the principal;
(c) voting in elections on behalf of the principal;
(d) consenting to adoption of a child by the principal;
(e) consenting to marriage or divorce of the principal; or
(f) consenting to the principal entering into a sexual relationship.
5.96 The proposal sets out in legislation those decisions which cannot be exercised by a representative because those decisions can only be exercised personally and cannot be delegated to an attorney/guardian. The list builds on extensive case law regarding powers of attorney and agents. Lists of this type have been introduced in many state and territory jurisdictions. Stakeholders have stated that having a straight forward statutory list of prohibited decisions can assist in understanding the limits of the roles of an attorney/guardian. A list that can only be distilled from the common law or individual pieces of legislation does not provide a simple and straightforward explanation. Addition prohibitions on attorneys are proposed in Chapter 9 with respect to superannuation binding death benefit nominations.
5.97 It would also be useful to set out in statute the specific powers of an attorney/guardian where there is some ambiguity under the common law. Clarity improves understanding which may mitigate against the risk of abuse.
Proposal 5–9 Enduring attorneys and enduring guardians should be required to keep records. Enduring attorneys should keep their own property separate from the property of the principal.
5.98 An explicit requirement to keep records and keep property separate is designed to protect the principal and the attorney. By keeping good records and not co-mingling property, the representative is upholding the distinction between their personal affairs and their role as an enduring attorney of the principal.
5.99 Good record keeping demonstrates the way in which the attorney has fulfilled their duties and can protect the representative in circumstances where accusations are made that the representative has failed in their duties.
5.100 The explicit requirement to keep records and property separate is also educative as it reinforces the nature of the fiduciary role of the representative as the manager of the principal’s affairs and the importance of doing so diligently and effectively.
5.101 Record keeping requirements are typically included in state and territory legislation.
Australian Law Reform Commission, Equality, Capacity and Disability in Commonwealth Laws, Report No 124 (2014) 114.
For more information see Chapter 3.
See, eg, Office of the Public Advocate (Vic), Submission 95.
Social Work Department Redland Hospital Queensland Health, Submission 10; Hervey Bay Seniors Legal and Support Service, Submission 75; Alzheimer’s Australia, Submission 80.
For example, compare the more restrictive approach in Victoria with that in Western Australia. See Powers of Attorney Act 2014 (Vic); Guardianship and Administration Act 1990 (WA).
See, eg, Oaths, Affidavits and Statutory Declarations Act 2005 (WA) Schedule 2.
Ibid s 9.
Powers of Attorney Act 2014 (Vic) s 35.
Ibid s 36.
Powers of Attorney Act 1998 (Qld) s 31.
Guardians and financial administrators appointed by a court or tribunal are discussed in Chapter 6.
See, eg, Powers of Attorney Act 1998 (Qld) ss 109A, 110. However, in SA, for example, the powers of the tribunal are narrower reflecting an expanded role of the Public Advocate to resolve disputes involving substitute decision makers—see Advance Care Directives Act 2013 (SA) pt 7.
Powers of Attorney and Agency Act 1984 (SA) s 7; Powers of Attorney Act 1998 (Qld) s 106.
Powers of Attorney Act 2014 (Vic) s 77.
Powers of Attorney Act 2014 (Vic) s 78.
Ibid s 80.
Elefteria Konstantinou, ‘Attorneys: Financial Misconduct and Asset Retrieval: Compensation for a Principal under the Powers of Attorney Act 2014. Which Jurisdiction? Supreme Court or Victorian Civil & Administrative Tribunal?’  Greens List Breakfast Briefing 4.
Powers of Attorney Act 2014 (Vic) s 74.
Guardianship and Administration Act 2000 (Qld) s 59.
NSW Trustee and Guardian, Submission 120 in reference to attorney legislation. Seniors Rights Service, Submission 169; Mid North Coast Community Legal Centre, Submission 161; National Seniors Australia, Submission 154; ADA Australia, Submission 150; Townsville Community Legal Service Inc, Submission 141.
State Trustees Victoria, Submission 138.
Law Reform Committee, Parliament of Victoria, Inquiry into Powers of Attorney: Final Report (August 2010) 175.
Powers of Attorney Act 1998 (Qld) s 73; Powers of Attorney Act 2014 (Vic) s 64.
See Powers of Attorney Act 2014 (Vic) s 28.
Law Reform Committee, Parliament of Victoria, Inquiry into Powers of Attorney: Final Report (August 2010) 142.
Claire McNamara, ‘How the POA Act Works: Some Key Features of the Reform’ (Presentation at Australian Guardianship and Administration Council (AGAC) 2016 National Conference, Reflecting Will and Preference in Decision Making, 17-18 October 2016).
See, eg, Guardianship and Administration Act 1990 (WA) s 107; Powers of Attorney Act 2000 (Tas) s 32AD.