It is important for a principal to consider who they wish to appoint as their attorney or attorneys. In most circumstances, an attorney acts properly and acts in the best interest of the principal. However, situations may arise where an attorney acts dishonestly to obtain a financial advantage.
The Powers of Attorney Act 2014 (the Act) commenced on 1 September 2015. Section 77(1) of the Act provides compensation to a principal or the principal’s estate whereby a principal has suffered loss caused by the misconduct of the attorney.
The main elements are:
(to bring the principal to his or her former position prior to the loss)
(the principal must be able to show an actual loss that he or she suffered)
(c) Caused by;
(the loss suffered by the principal must have been caused by the attorney) and
(d) Acting as attorney under the power of attorney
(the attorney must be acting as attorney under the power)
A principal can obtain compensation for a loss caused by the attorney through Victorian Civil Administrative Tribunal (VCAT) or the Supreme Court. The attorney can be ordered to pay compensation even if:
(a)the attorney is convicted of an offence in relation to the attorney’s contravention;
(b)the principal has died (in which case compensation is payable to the estate of the principal); and
(c)the enduring power of attorney is invalid or has been revoked (cancelled).
An application for compensation can be made during the lifetime of the principal or following the death of the principal.
The Act provides that a person must have standing to bring an application for compensation. This includes the principal, any attorney under the enduring power of attorney, an executor or administrator of the principal’s estate, the nearest relative of the principal or any other person whom VCAT is satisfied has a special interest in the affairs of the principal.
The Act provides time limit for an application for order for compensation. An application must be made:
(a)within 6 months after that death of the principal; or
(b)within 6 months after that death the attorney has died; or
(c)if both the principal and the attorney have died, within 6 months after the first death.
However, VCAT and the Supreme Court may extend the above time limits.