Redress

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]

[84]           Guardians and financial administrators appointed by a court or tribunal are discussed in ch 10.

[85]           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.

[86]           Powers of Attorney Act 1998 (Qld) s 106; Powers of Attorney and Agency Act 1984 (SA) s 7.

[87]           Powers of Attorney Act 2014 (Vic) s 77.

[88]           Powers of Attorney Act 2014 (Vic) s 78.

[89]           Ibid s 80.

[90]           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?’ [2016] Greens List Breakfast Briefing 4.

[91]           Powers of Attorney Act 2014 (Vic) s 74.

[92]           Guardianship and Administration Act 2000 (Qld) s 59.

[93]           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; NSW Trustee and Guardian, Submission 120.

[94]           The Victorian Civil and Administrative Tribunal (VCAT) was established by the Victorian Civil and Administrative Tribunal Act 1998 (Vic), the State Administrative Tribunal (SAT) was established by the State Administrative Tribunal Act 2004 (WA), the ACT Civil and Administrative Tribunal (ACAT) was established by the ACT Civil and Administrative Tribunal Act 2008 (ACT), the Queensland Civil and Administrative Tribunal (QCAT) was established by the Queensland Civil and Administrative Tribunal Act 2009 (Qld), the NSW Civil and Administrative Tribunal (NCAT) was established by the Civil and Administrative Tribunal Act 2013 (NSW), the South Australian Civil and Administrative Tribunal (SACAT) was established by the South Australian Civil and Administrative Tribunal Act 2013 (SA), and the Northern Territory Civil and Administrative Tribunal (NTCAT) was established by the Northern Territory Civil And Administrative Tribunal Act 2014 (NT).

[95]           Department of Justice (Tas), A single tribunal for Tasmania, Discussion Paper (September 2015).

[96]           Jason Pizer, ‘The VCAT—Recent Developments of Interest to Administrative Lawyers’ [2004] (43) AIAL Forum 40, 42.

[97]           Elizabeth Brophy, ‘Wayward Attorneys—Financial Misconduct and Compensation for the Principal’ (2016) 86 Wills and Probate Bulletin 3, 4.

[98]           Australian Research Network on Law and Ageing, Submission 262.

[99]           Brophy, above n 97, 4.

[100]         Dyson Heydon and Mark Leeming, Cases and Materials on Equity and Trusts (LexisNexis Butterworths, 8th ed, 2011) ch 11.

[101]         Victorian Law Reform Commission, Guardianship, Final Report No 24 (2012) 410.

[102]         Powers of Attorney Act 2014 (Vic) s 80.

[103]         Commonwealth of Australia Constitution Act (Cth) s 77(iii); Judiciary Act 1903 (Cth) ss 39(1), 39A(1)(b), 39(2)(c).

[104]         Burns v Corbett [2017] NSWCA 3 (3 February 2017).

[105]         Ibid [75].

[106]         Section 77 of the Australian Constitution empowers the Commonwealth to legislate to invest state courts with federal jurisdiction. Whether it extends to investing a tribunal with such jurisdiction depends on how expansively the term ‘court’ is read: Anna Olijnyk, Burns v Corbett: The Latest Word on State Tribunals and Judicial Power (19 April 2017) AUSPUBLAW <https://auspublaw.org/2017/04/the-latest-word-on-state-tribunals-and-judicial-power/>.

[107]         Ibid.