Compensation claims in the Guardianship List of VCAT

06 December 2022

An attorney appointed to manage the financial and legal affairs of a principal has legislative duties they must adhere to. When an attorney breaches these duties and causes financial loss to the estate of the principal, what actions can be taken?

Eligible claimants can apply for compensation in the Victorian Civil and Administrative Tribunal (VCAT) if an attorney appointed under an Enduring Power of Attorney (EPA) breaches their duties causing loss to the principal. However, not all claims will succeed. Particular attention should be paid to the time the attorney’s duties were breached.

There are a number of VCAT cases, including In ODY (Guardianship) [2016] VCAT 804, which are a reminder that a claim for compensation under section 77 of the Powers of Attorney Act 2014 (Act) cannot succeed if:

  • the breaches of the attorney’s duties occurred prior to the commencement of the Act on 1 September 2015; and
  • the applicant is unable to establish that the attorney contravened a provision of the Act as set out in section 63.

Applicants seeking compensation orders from VCAT should be aware that the Act is not retrospective, and therefore does not apply to transactions that were carried out prior to the Act commencing.

In YDM (Guardianship) [2016] VCAT 758, Deputy President Nihill dismissed an application that related to a principal who had died before the operation of the Act.

In DLM (Guardianship) [2018] VCAT 1638, Vice President Judge Harbison agreed with that approach saying: “It is clearly illogical to hold someone accountable for breaching a provision of an Act if that Act was not in existence at the date of the breach”.

Powers of Attorney Act 2014

Section 77 of the Act provides for compensation for acts of an attorney in contravention of any provision of the Act relating to EPA causing the principal loss. Even if the principal has died, an application for compensation can still be made, section 77 (2). There is a limitation period of six months from the date of death, however, section 79 (2) of the Act allows the Supreme Court to extend the time.

When making an application for compensation, applicants should bear in mind that under section 74 of the Act, an offending attorney may be excused. If VCAT or the Supreme Court considers that despite the breach, the attorney acted honestly and reasonably, the attorney may be relieved from all or part of their personal liability for the breach. This provision of the Act gives VCAT and the Supreme Court considerable discretion. It is important that all facts and circumstances related to the alleged breach are considered carefully before making an application for compensation. In certain circumstances where evidence of the breach is not strong, the costs of making and running a compensation case may not in fact be economical.

Examples of successful applications for compensation and successfully defending a claim for compensation

Case study 1

A professional attorney who was the accountant of the principal charged his hourly rate to attend to the principal’s financial and personal affairs. Notwithstanding that the EPA document included a charging clause permitting the professional attorney to charge the principal at his hourly rate, the charges were regarded as exorbitant for the nature of the work performed. For example, visiting with the principal and sharing moments over a cup of tea. The fees were reduced and refunded to the principal’s estate.

Case study 2

The attorney for financial matters was one of the principal’s daughters. The other daughter applied to VCAT claiming that her sister had withdrawn unexplained amounts of money from their mother’s bank accounts and that her estate should have been compensated accordingly. The attorney successfully defended the claim asserting that she was not exercising her authority pursuant to her appointment as her mother’s attorney. The sister successfully argued that she was acting strictly in accordance with the instructions of her mother who had not lost her decision-making capacity.

Case study 3

The attorney for financial matters was one of three sons of the principal. He transferred funds from the principal’s account to his own personal account claiming that it was easier to pay his father’s bills from his account. He was unable to account for all the funds transferred out of his father’s account over a period of three years. He had used his father’s funds to pay for his own personal expenses and debts. He was in breach of his fiduciary duties and was liable to pay compensation to his father’s estate.


Applicants should always seek legal advice prior to making compensation claims in the Guardianship List of VCAT or the Supreme Court. Rigby Cooke Lawyers’ Wills, Trusts and Estate team is well placed to provide advice in relation to breaches of attorneys’ duties causing financial loss to the principal or defending the actions brought against an attorney. For your reference, we have set out below the applicable sections of the Act.

Duties under section 63 of the Act

1. An attorney under an enduring power of attorney must:

a. act honestly, diligently and in good faith; and
b. exercise reasonable skill and care; and
c. not use the position for profit, unless permitted under; and
d. avoid acting where there is or may be a conflict of interest unless the power so authorises; and
e. not disclose confidential information gained as the attorney under the power unless authorised by the power or by law; and
f. keep accurate records and accounts as required by section 66.

2. Nothing in this section is to be taken to affect
any duty an attorney has at common law.

Who can apply for compensation?

Section 78 sets out who has standing A person may apply for an order under section 77 if the person is:
a. the principal; or
b. any attorney under the enduring power of attorney; or
c. an executor or administrator of the principal’s estate; or
d. the Public Advocate; or
e. the nearest relative of the principal; or
f. any other person whom VCAT is satisfied has a special interest in the affairs of the principal.

To discuss issues relating to enduring power of attorney, or a possible claim for compensation from VCAT, contact our Wills, Trusts & Estates team.

Disclaimer: This publication contains comments of a general nature only and is provided as an information service. It is not intended to be relied upon as, nor is it a substitute for specific professional advice. No responsibility can be accepted by Rigby Cooke Lawyers or the authors for loss occasioned to any person doing anything as a result of any material in this publication.

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