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“ exercised for a purpose and with an intention beyond the scope of or not justified by the instrument creating the power”. 3
Abuse may be physical, sexual, financial, psychological, social and / or neglect. The abuse can be in any“ act occurring within a relationship where there is an implication of trust, which results in harm to an older person”, but in particular it may occur within the family group where family members abuse the position of trust placed on them by the older person. 4
Abuse of a POA is a well-recognised example of elder financial abuse. 5 Evidence of financial abuse can also include loss of jewellery, bank books or personal property, unprecedented funds transfers, unpaid bills where a third party has been entrusted to pay them, unexplained bank withdrawals and cashing of personal cheques. 6
“ Improper conduct” covers the attorney’ s breaches of duty that cause harm to the principal whether that harm is physical, sexual, financial, psychological, social and / or neglect.
VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL Recent POA amendments include:
• It is now an offence for someone to dishonestly obtain or revoke an enduring power of attorney to obtain financial advantage for them or for someone else, or to cause loss to the principal or another person.
• VCAT can now order attorneys to compensate the principal for loss caused by the attorney for breaches.
• Potential applicants can include the principal and the executor or administrator of the principal’ s estate.
• There is a time limit for applications where the principal or attorney has died( within six months after the death), and where necessary VCAT is able to refer these applications to the Supreme Court of Victoria.
However, despite the changes, VCAT is still not a court of law and its orders still require enforcement applications to the Magistrates’ Court involving yet further time and expense.
Note that because existing laws focus on proceedings for debt or asset recovery, 7 defences( often without supporting documentation) tend to fall into two categories: whether the assets received were a gift or a loan.
The following points are important in deciding whether to bring an action for recovery of assets and to call an attorney to account:
• The victim’ s health and capacity
• Who will pay the costs
• How to confirm that breaches have even happened( sometimes evidence can be circumstantial at best).
Actions to reclaim assets often stop when victims die, and it is then the executor’ s responsibility to pursue the issues. However, this can create difficulties when the executor and the attorney in breach are one and the same.
For example, the court in Watson v Watson 8 considered the case where the deceased had made a will giving the defendant and the plaintiffs equal shares in his estate, and had also made a financial power of attorney appointing the defendant as attorney. However, the defendant withdrew funds from the deceased’ s accounts prior to death and transferred the deceased’ s property into his name.
The court referred to the provisions of the Family Provision Act
1982( NSW) and held that:
• The attorney’ s actions were contrary to the intentions of the deceased.
• The defendant held the real estate and the funds in trust for the benefit of the estate and therefore they were estate assets.
• The defendant was required to reconvey the real estate and the funds to the estate.
• The defendant was ordered to bear his own costs and to pay the plaintiffs’ costs.
Costs are at the sole discretion of the court, but it is likely that the court would take a dim view of a defendant where unconscionability and undue influence had been demonstrated.
COORDINATED CENTRAL BODY AND REGISTER As a result of ongoing abuses, 10 years ago I was not alone in recommending that a national register of POAs be established 9 to prevent breaches from occurring in the first place, as there was no way of checking the validity of POAs when a principal’ s relative, friend or carer attempted to withdraw funds or transfer money or property. Some Australian jurisdictions such as Queensland and NSW already require POAs to be registered with their respective land titles offices where such documents are used in land transactions. I proposed a central national registry for POAs, including a fidelity fund with a bond to be paid by attorneys to enable them to act.
Little has changed since then, and more recently the Australian Law Reform Commission has emphasised the need for a national register. ALRC president Professor Rosalind Croucher made the following points: 10
• People describe powers of attorney as a licence to steal.
• There might be multiple powers of attorney.
• There is uncertainty as to which is the right one, which is the most recent, and which is the valid one.
In order to safeguard the elderly and ensure that attorneys do not breach their fiduciary duties, I also recommended that a combination of strategies involving legislation, law enforcement, education and information be implemented, 11 such as:
• Specific Australia-wide legislation Children have specific laws to protect them, but no such laws protect the elderly. We need laws that“ claw back” assets, laws for strict liability offences, and laws for mandatory reporting.
• Certificates of competency Certificates of competency for attorneys confirm that they have completed an approved course about their rights and obligations.
• Trained police Police would liaise with older people in the community to offer constructive information and advice about risks, suggest appropriate fraud prevention measures and prosecute misuses of powers of attorney.
• Education and information Education and information reinforce the risks and create strategies to prevent victimisation. Research shows that people who are already victims are more likely to become victims in the future, and efforts will focus on victims to break the cycle. Older people could also be encouraged to report their experiences to create a database to reveal patterns of victimisation so that appropriate preventive action can be initiated.
• Business and members of professional organisations Professionals in all fields play a large part in filtering transactions that lead to fraud. For instance, banks can be authorised to monitor accounts and raise concerns with the account holder where unusually large transactions or unusual patterns occur, and warn of the possibility of fraud.
Given the continuing uncertainty and risks, it is time for a national register of POAs to protect our elderly. ■
References at www. agedcareinsite. com. au
agedcareinsite. com. au 17