Challenging an Enduring Power of Attorney in Victoria: Financial Abuse, Revocation, and Compensation 

Families who suspect abuse of an enduring power of attorney in Victoria should act promptly. Where an attorney has misused an elderly parent’s funds, preferred one beneficiary, transferred property for personal benefit, or failed to explain significant withdrawals, VCAT or the Supreme Court of Victoria may intervene. Available orders can include suspending or revoking the attorney’s authority, requiring an account of dealings, setting aside a transaction involving an attorney’s conflict of interest, and making a compensation order for loss caused by a breach of duty. 

For high-net-worth individuals and families, suspected elder financial abuse may involve substantial property interests, investment portfolios, private companies, or trust distributions. The central issue is not simply whether relatives disagree with the attorney’s decisions. It is whether the attorney acted within the authority granted, complied with statutory duties, and protected the principal’s interests. 

The appropriate response depends on the available financial records, the principal’s current decision-making capacity, and their capacity to revoke the appointment personally. Where direct revocation is no longer available, an application for VCAT revocation, protective orders, or financial recovery may be required. 

What Laws Apply When Challenging an Enduring Power of Attorney in Victoria? 

The principal legislation is the Powers of Attorney Act 2014 (Vic). Section 63 requires an attorney to act honestly, diligently and in good faith, exercise reasonable skill and care, avoid unauthorised conflicts, keep the principal’s property separate, and maintain accurate financial records. These are enforceable obligations, not merely standards of good family conduct. A relative acting informally or without payment remains subject to them. Similar questions of fiduciary duties and financial accountability arise in estate administration, although attorneys and executors operate under different legal frameworks. 

Section 64 separately prohibits an attorney from entering a transaction involving an attorney’s conflict of interest where the attorney’s duty to the principal conflicts, or may conflict, with the interests of the attorney, a relative, business associate or close friend. Certain transactions may be expressly authorised by the enduring power or approved by VCAT, but an attorney cannot assume that a past family arrangement, an anticipated inheritance or the principal’s general generosity permits self-benefiting dealings. 

VCAT has significant supervisory jurisdiction under Part 8 of the Act. It may examine the validity and exercise of the power, determine whether a transaction is valid, require the attorney to lodge an account of dealings, order an audit, and make further orders considered necessary. Depending on the evidence, this may support VCAT revocation, suspension, or variation of the appointment. The Guardianship and Administration Act 2019 (Vic) may also become relevant where the principal lacks decision-making capacity, and an administrator is required to manage their financial affairs. 

Section 77 allows either VCAT or the Supreme Court of Victoria to make a compensation order where an attorney’s statutory contravention caused loss. Compensation may remain available after the power has been revoked, found invalid or after the principal’s death, in which case payment may be made to the estate. 

In XEC (Guardianship) [2017] VCAT 1064, VCAT considered compensation for losses attributed to an attorney’s conduct. In DLM (Guardianship) [2018] VCAT 1638, the Tribunal examined the operation of section 77 and confirmed that the applicant must identify a statutory breach causing the claimed loss. The decisions show that suspicion alone is insufficient. A successful claim ordinarily requires proof of the attorney’s conduct, the duty breached, the resulting financial loss, and the connection between them. 

How Does VCAT Assess Suspected Abuse of an Enduring Power of Attorney? 

What evidence shows that an attorney may have breached their duties? 

VCAT looks for objective financial evidence rather than family suspicion or disagreement. Relevant material may include bank statements, property transfer documents, loan records, company accounts, invoices, correspondence, and evidence showing who benefited from a transaction. An unexplained transfer to the attorney, a relative or an associated entity may warrant close examination, particularly where it was inconsistent with the principal’s previous financial practices. 

An application is stronger where the evidence identifies the transaction, the attorney’s involvement, the authority relied upon, and the financial consequence. VCAT may require an account of dealings or supporting records to determine whether the attorney acted honestly, diligently and in good faith as required by section 63 of the Powers of Attorney Act 2014 (Vic). 

When does a conflict of interest justify intervention? 

A transaction involving an attorney’s conflict of interest receives scrutiny because the attorney must place the principal’s interests ahead of their own. Examples may include transferring the principal’s property to the attorney, making loans on favourable terms, paying the attorney’s personal expenses, or redirecting investments to benefit another family member. 

Section 64 prohibits conflicted transactions unless they are authorised by the enduring power, approved by VCAT, or otherwise permitted by law. The existence of a family relationship, an expectation of inheritance or evidence that the principal had previously made gifts does not automatically authorise the transaction. The precise terms of the document and the surrounding evidence remain critical. 

How does the principal’s decision-making capacity affect the application? 

The principal’s capacity is often decisive. A person who retains decision-making capacity may have the capacity to revoke the appointment personally, appoint a replacement attorney or confirm a disputed transaction after receiving independent advice. Capacity is decision-specific and should not be treated as a medical label. 

Where the principal cannot understand the nature and effect of revocation, VCAT may need to determine whether the attorney should be suspended or removed and whether an administrator should be appointed under the Guardianship and Administration Act 2019 (Vic). The Tribunal will also consider the principal’s expressed wishes, preferences, and personal circumstances where these can be ascertained. 

When will VCAT revoke the appointment or order compensation? 

VCAT revocation is more likely where the attorney has breached statutory duties, failed to keep records, refused to account, acted beyond the authority granted or can no longer be relied upon to protect the principal’s interests. Revocation is protective. It does not automatically establish that every earlier transaction was invalid. 

A separate compensation order under section 77 requires proof that the attorney contravened the Act and caused an identifiable loss. VCAT or the Supreme Court may order compensation, including after the power has ended or the principal has died. The applicant must therefore connect the proven breach to the amount claimed rather than relying solely on evidence of poor judgment or family conflict. 

What Practical Disputes Commonly Arise When an Attorney Controls an Elderly Parent’s Finances? 

Disputes often begin with unexplained withdrawals, altered banking arrangements or property dealings that only become visible after another family member reviews the principal’s records. A recurring issue is the attorney using the principal’s account to pay household expenses that also benefit the attorney, then characterising those payments as reimbursement. Without invoices, contemporaneous records or a clear basis for the payments, the distinction between legitimate expenditure and personal benefit becomes difficult to sustain. 

Another common pattern involves the transfer of real property, shares, or investment assets to the attorney or an associated family member. These matters usually turn on whether the enduring power expressly authorised gifts or benefits, whether the principal gave informed instructions at the time, and whether the transaction involved an attorney’s conflict of interest. A stated intention to equalise inheritances later does not necessarily justify a present transfer that disadvantages the principal. 

Record-keeping failures also create significant difficulty. Attorneys may have managed finances informally for years, used cash, mixed funds, or relied on verbal family arrangements. When challenged, they may be unable to produce an adequate account of dealings. Poor records do not automatically prove dishonesty, but they can prevent the attorney from demonstrating that transactions were authorised and properly made. 

Disputes may also arise where one sibling alleges elder financial abuse while another argues that the attorney was simply carrying out the parent’s wishes. The principal’s decision-making capacity at the time of each disputed transaction becomes critical. Medical records, solicitor file notes, emails, and evidence of the principal’s established financial practices may be central to identifying evidence of elder financial abuse, particularly where dependency, isolation or sudden changes in financial control are present. 

A further practical issue is timing. Delay may allow assets to be sold, transferred again, or dissipated, making recovery more complex. In serious matters, the immediate priority may be protective relief, including suspension or VCAT revocation, before a full compensation order claim is prepared. A focused application should identify questionable transactions, preserve relevant records, and distinguish urgent protective measures from longer-term recovery proceedings. 

What Should Be Considered Before Challenging or Defending an Attorney’s Conduct? 

Before commencing proceedings, the central strategic question is whether the immediate objective is protection, investigation, or recovery. Where assets remain at risk, an application for suspension, VCAT revocation, or another protective order may need to be prioritised before the full financial case is assembled. A compensation claim usually requires more detailed evidence of breach, loss, and causation. 

Applicants should identify each disputed transaction precisely, including the date, amount, recipient, stated purpose, and source of the attorney’s authority. Broad allegations of elder financial abuse are less persuasive than a structured chronology supported by bank records, conveyancing files, company documents, tax records, and communications. Requests for an account of dealings should also be framed carefully so that they capture relevant records without becoming unnecessarily diffused. 

Capacity evidence requires care. The question is not simply whether the principal had a diagnosis, but whether they understood the specific decision when it was made. Medical opinions are important, but solicitor notes, banking records and contemporaneous communications may also assist in assessing the principal’s instructions and capacity to revoke. 

An attorney defending the claim should avoid relying on informal family understandings alone. Evidence should show how decisions were authorised, why they were considered to benefit the principal and how any transaction involving an attorney’s conflict of interest was permitted. Reconstructing records after a dispute has arisen may be necessary, but contemporaneous documentation will usually carry greater weight. 

Both sides should also consider proportionality. A narrowly framed application focused on the principal’s protection, and the principal transactions in issue is often more effective than attempting to litigate every historical family grievance. 

Frequently Asked Questions 

What Should You Do If You Suspect an Enduring Power of Attorney Is Being Abused? 

Suspected abuse of an enduring power of attorney in Victoria requires a focused response. The immediate priorities are usually to protect the principal’s remaining assets, obtain an account of dealings, and identify whether the evidence supports suspension, VCAT revocation, the reversal of an unauthorised transaction or a compensation order. Where the principal retains the capacity to revoke, direct revocation may also be available. 

These matters often involve sensitive family relationships and substantial financial interests. Early advice can help distinguish legitimate financial management from a breach of statutory duty and determine which protective or recovery orders should be pursued. 

Pentana Stanton Lawyers advises individuals and families on complex powers of attorney and estate disputes. Learn more about our wills and estates services or book a consultation to discuss the available options. 

This article is general information only and not legal advice. For advice specific to your circumstances, please contact our team.