Understanding powers of attorney

VCAT has an extensive jurisdiction in relation to enduring powers of attorney (pt 8 Powers of Attorney Act 2014 (Vic) (‘POA Act’)).

VCAT can determine:

• the scope and exercise of the enduring power of attorney;
• the effect of any failure to execute the enduring power of attorney properly;
• the validity of the enduring power of attorney;
• the validity of any transaction made under the enduring power of attorney; and
• the lodging, examination and auditing of accounts (see s 116 POA Act).

The POA Act (s 119) sets out the elements VCAT must consider when determining matters such as the validity of an enduring power of attorney and its proper execution. If the enduring power of attorney is found to be invalid, it is void from the beginning.

There are limitations on who can apply to VCAT in relation to an enduring power of attorney. If a person can demonstrate a special interest in the affairs of the principal to VCAT’s satisfaction, they will have standing to apply (see s 122). The POA Act states who must be notified of an application (s 123) and who will be parties to the application (s 124).

There is scope for a rehearing to a more senior member of VCAT. An application for a rehearing must be made within 28 days of the making of the order (see divs 4 and 5 of pt 8 of the POA Act).

Both VCAT and the Supreme Court may order an attorney to compensate the principal for a loss caused by the attorney contravening a provision of the POA Act (ss 77–80). A claim (YDM (Guardianship) [2016] VCAT 758) for compensation for losses alleged to be prior to the commencement of the POA Act (1 September 2015) was unsuccessful as the attorney could not have contravened an Act not in existence. In the DLM case, VCAT awarded compensation, but in the MYJ and EMT cases, it did not (see ‘Case examples’ in ‘Attorney’s obligations’ in ‘An attorney’s duties‘).

VCAT may open and read the principal’s will; although, it declined to do so in WQN (Guardianship) [2020] VCAT 814.

In the matter of VIJ (Guardianship) [2020] VCAT 760, VCAT considered its powers to revoke a joint enduring power of attorney (financial) made under the Instruments Act 1958 (Vic).