An enduring power of attorney (EPA) allows a person to appoint someone to make financial and property decisions on their behalf, even if they lose capacity (although it must only be executed before the donor has lost the capacity to make an EPA).

In Western Australia, the Guardianship and Administration Act 1990 (the GA Act) regulates EPAs.

This article explores the concept of conflicts of interest in the context of EPAs, drawing on the Western Australian State Administrative Tribunal decision ET [2021] WASAT 36 as an example.

Establishing an Enduring Power of Attorney

An EPA is created and regulated by the GA Act in Western Australia. It allows the donor to grant the donee the authority to make decisions on their behalf.

The power can be general, allowing the donee to make any decision the donor could, or limited to specific acts (KS [2008] WASAT 29) (KS). The EPA remains valid even if the donor loses capacity (ET [2021] WASAT 36, [240]).

Conflicts of Interest and the Duty of Attorneys

An attorney acting under an EPA has a duty to act in the best interests of the donor.

The GA Act obliges the attorney to exercise their power with reasonable diligence to protect the interests of the donor (GA Act, s 107(1)).

If the attorney fails to do so, they may be liable for any loss caused by their failure (ET [2021] WASAT 36, [242]).

A conflict of interest can arise if an attorney prefers their own interests over the donor's interests.

In Tobin v Broadbent (1947) 75 CLR 378, Dixon J stated that a power of attorney should not be construed as authorizing the attorney to deal with the donor's property for the attorney's own benefit, unless there is specific and unambiguous authorization (ET [2021] WASAT 36, [52]).

ET [2021] WASAT 36 Case Example

In this case, ET had executed an EPA in 2018 and had not revoked it before losing capacity (ET [2021] WASAT 36, [239]).

A conflict arose between the attorneys and ET's family members, leading to accusations of impropriety and overcharging by one of the attorneys, CR (ET [2021] WASAT 36, [246]).

The Tribunal ultimately found that despite some extreme actions and language, CR had acted with genuine concern for ET's best interests and had maintained a constant and earnest approach to his role (ET [2021] WASAT 36, [260]).

The Tribunal decided not to appoint an administrator for ET's estate, as it was in her best interests for the current attorneys to continue managing her affairs, with support from her enduring guardian (ET [2021] WASAT 36, [258], [262], [268]).

Key take-aways

Conflicts of interest can arise in the context of an EPA, and attorneys have a duty to act in the best interests of the donor.
The ET [2021] WASAT 36 case illustrates the importance of attorneys acting with reasonable diligence and considering the donor's interests above their own.
Attorneys should be mindful of potential conflicts of interest and ensure they are acting in accordance with their legal obligations under the GA Act.