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Conflicts of interest

When an appointed attorney’s private interests conflict with their power of attorney obligations, elder abuse could be the outcome.

Last updated: 17 February 2024

One step an older person can take to safeguard their future is to make a power of attorney. This is a legal document that authorises someone the person (or ‘principal’) trusts to make decisions and manage their affairs if they became unable to act for themselves.

The authorisation is based on the principle that the appointed person (the ‘attorney) must always act in the best interests of the person they’re acting for. Unfortunately, even with the best intentions, it’s possible that an attorney may do something that is not in the person’s best interests.

If this happens, the action becomes a misuse of the power of attorney. It can be a serious issue, because it could constitute elder abuse and have legal consequences for the attorney.

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What is a conflict of interest?

An inappropriate action by an attorney may happen when there is a conflict of interest between the principal’s affairs and the attorney’s. A conflict of interest usually occurs when someone:

  • has personal interests that could compromise their judgement or actions

  • has concerns or aims are incompatible with another person’s concerns or aims

  • is in a position to benefit from actions or decisions they make in an official capacity, such as being an attorney, a politician or a committee leader.

With an enduring power of attorney, the conflict arises when the attorney’s private interests potentially clash with their obligations to the principal. So if the attorney has a personal interest in something they have to decide for the principal, it’s important to be clear about where that interest ends and the best interests of the principal begin.

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Understanding conflict transactions

Attorney transactions that have the potential to be a conflict of interest are sometimes called ‘conflict transactions’. Examples of these include:

  • the attorney lending the principal’s money to themselves, a family member or a friend, or to a business owned by themselves, a family member or a friend

  • the attorney renting or selling the principal’s property to themselves or a relative at less than market rental value

  • the attorney using the principal’s money for their own personal expenses, such as travel costs or meals.

Often, conflict transactions involve what we would consider to be ‘wrong’ actions – when the attorney does something they clearly shouldn’t. However, that’s not always the case: conflict transactions can be authorised as well as non-authorised.

Authorised conflict transactions are actions permitted by the principal (who must have the capacity to do so). Sometimes the transactions are be authorised on a case-by-case basis, but they might be covered by the terms of the enduring power of attorney, such as allowing the attorney to:

  • deal with property they co-own with the principal

  • use the principal’s money to pay for their own reasonable living and medical expenses or those of their spouse, children or grandchildren.

Non-authorised conflict transactions are actions not authorised by the principal or not set out in the terms of the enduring power of attorney.

Whether the conflict transaction was authorised or not, the attorney must still act in the person’s best interests. They may face legal proceedings if the conflict transaction causes the principal any kind of loss.

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Case study – the early inheritance request (KOI (Enduring Powers) [2011] TASGAB 7)

Petros* and his wife, Amelie*, had jointly owned their home in equal shares. In Amelie’s will, she left her husband the right to use and enjoy the property until his death. After that, her half-share in the home was to go to their children.

When Petros moved into residential aged care, the house was sold and he received half the proceeds from the sale. The Public Trustee held and managed the other half on behalf of Amelie’s estate for Petros’ continued use and enjoyment, in accordance with her will.

His son and attorney, Lucas*, applied to the Tasmanian Civil and Administration Tribunal for permission to distribute the funds held by the Public Trustee between himself and his siblings equally.

Lucas said that his father had no further use for the money and that it was being eaten away by high management fees. However, distributing the money would mean that Petros’ right to his own funds would be given up.

The tribunal refused the application because the transaction would not be in Petros’ best interests. Although the money was being diminished by management fees, it was still better for Petros to retain his right to it than to have no money at all.

The proposed transaction would have been of no benefit to Petros and only of benefit to Lucas and his siblings. As his father’s attorney, Lucas is obligated to take actions that would benefit Petros before anyone else.

Lucas was right to seek the approval of the relevant board or tribunal before doing something for which he may later have been found liable.


Consider what else you could do. Stop and think. Consult a lawyer before doing anything.

As an attorney, how can you avoid a conflict of interest?

  • Stop and think before you make a decision or taking an action. Ask yourself, ‘Is it in the principal’s best interests if I do this?’

  • If it’s not, or you’re not sure, consider what else you could do. It might be wise to talk to a lawyer or accountant about the decision.

  • If it’s potentially a conflict transaction, consult a lawyer before doing anything. The lawyer might suggest you resign as attorney, so that the proposed transaction can go ahead, or advise that the transaction should not be done at all.

Whatever the outcome, getting professional advice will help avoid any misuse of the power of attorney.

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How to resolve a conflict of interest

If you suspect that your appointed attorney is misusing their power, there are several steps you can take.

  1. First, revoke the enduring power of attorney and tell the attorney that you have done this.

  2. Next, notify your bank of the revocation and/or remove the person as a signatory of your bank accounts.

  3. Get legal advice about the time limits on starting proceedings for the return of money and property.

  4. Start legal proceedings for the return of money and property.

You can revoke a power of attorney at any time as long as you have mental capacity to understand what you are doing. While you can make the revocation either verbally or in writing, the best idea is to make it in writing. Give your attorney a copy and record when you did this.

Applying to a tribunal on the principal’s behalf

What can you do if you suspect that an older person’s attorney is planning to enter – or has entered into – a conflict transaction?

If you are family member, friend or other ‘interested party’ (which means, anyone with a genuine concern for the older person’s welfare), you can apply to the relevant state or territory tribunal for a review of the appointment of the power of attorney and the relevant transaction.

(The tribunal is known as the Civil and Administrative Tribunal in all states and territories except Western Australia, where it is called the State Administrative Tribunal.)

If there is not enough evidence of misuse of power, the tribunal may decide not to conduct a review. But if it does and it finds the attorney has misused their power, it can:

  • require the attorney to provide accounts

  • vary a power given to the attorney

  • remove a person from the position of attorney

  • suspend the attorney for further investigation, and/or

  • appoint a new attorney.

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Case study – the self-paying attorney: listening when someone speaks up (SKC [2014] NSWCATGD 39)

Samuel* was a 63-year-old man who lived in supported accommodation. His niece, Anna*, was his appointed attorney. When Samuel inherited about $55,000, Anna put the money into a bank account.

In 2014, Samuel told his care manager that he was concerned about Anna’s management of his finances. He said that every time Anna withdrew $1,000 from his account, she would give him $500 and keep $500 for herself. He wanted his neighbour and close friend to be appointed as his financial manager instead.

The care manager listened to Samuel and took his concerns seriously. They applied to the NSW Civil and Administrative Tribunal to have Samuel’s power of attorney and Anna’s appointment reviewed. During the review, it emerged that Samuel’s bank records showed lots of withdrawals in a short time. The inheritance money was almost totally gone.

The tribunal appointed Samuel’s neighbour as his attorney instead of Anna and put a financial management order in place. Samuel’s new financial manager was to work with the police to try to recover the missing money from Anna.

By listening to Samuel’s concerns, the care manager made it possible for the situation to be resolved.


Going to court

There may be the option of taking legal action against an attorney who has benefited financially from a conflict transaction. However, going to court can take a long time and cost more than the amount of money to be regained, so it may not be worth it.

It can also be hard to gather enough evidence to support the case if the principal’s capacity has diminished, especially where the attorney claims that the principal allowed them to do what they did.

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Take steps before problems arise

It’s far better to avoid having a conflict transaction arise in the first place, and there’s a lot you can do to reduce the chances of it happening in your affairs. Here are some tips:

  • When making a power of attorney, only appoint someone you fully trust as your attorney.

  • Consider limiting their powers or appointing more than one attorney (if that’s permitted in your state or territory).

  • Think about asking friends or family to monitor the attorney’s actions.

  • If you are concerned about an attorney’s actions, don’t hesitate – take steps immediately to resolve it. If you think it’s necessary, you can revoke their appointment.

  • If you have lost capacity and a family member, friend or other interested party is concerned about your attorney’s actions, they should apply to the relevant tribunal for a review of the power of attorney.

Other examples of conflict transactions

These legal cases show what conflicts of interest can look like and how attorneys might have to justify their actions.

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Case study – the holiday property: good intentions breach obligations (Ede v Ede [2006] QCS 378)

Francis had dementia and could no longer make his own decisions. He had previously appointed his son, Robert, as his attorney.

Robert decided to sell his father’s holiday home, as it wasn’t being used anymore. In February 2003, the property was valued at $75,000 if restored to a saleable condition. Robert, who was a builder by trade, estimated that the restoration work would cost between $15,000 and $20,000.

Robert’s daughter wanted to buy the home. Francis’ power of attorney document stated:

You must not enter into transactions that could or do bring your interests (or those of your relation, business associate or close friend) into conflict with those of the principal. For example, you must not buy the principal’s car unless you pay at least its market value …

Robert consulted the government guardianship organisation, his financial planner and his solicitor for advice. They all told him that he could sell the property to his daughter as long as it was for market value.

In October 2003 the house, not yet repaired, was valued again at the same amount. Robert then arranged for his daughter to buy it for $70,000. However, the title deeds had been lost, and the transfer wasn’t completed until January 2004. By this time the property’s market value had increased to $110,000, which meant Francis had suffered a financial loss.

The court found that while Robert had acted honestly and reasonably, he had breached his fiduciary duty and his daughter had profited from the breach. Robert was ordered to reimburse his father for the difference between the house’s increased value and its sale price.

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Case study – the suspicious house sale: a conflict transaction (NPG (Review Enduring Power) [2011] TASGAB 22)

In January 2011, 74-year-old Nell*, who didn’t have a power of attorney or guardianship in place, was assessed in hospital as needing to move into residential aged care.

Nell’s solicitor, Tara*, was told that Nell should move into residential care. Within 24 hours, Tara prepared a power of attorney document appointing herself as Nell’s attorney, had Nell sign it and two of her own staff witness it, and registered it. Nell was moved into residential care the same day.

Nell’s house needed to be sold to pay for her care and accommodation, so Tara got four valuations for it. In May, she signed with a real estate company to sell the house for $165,000. This was the second-lowest appraisal she received, which Tara explained by saying that Nell did not believe the house was worth very much.

In June, Tara refused a conditional offer on the property for $150,000. Soon afterwards, she presented Nell an offer of $145,000 to sign but did not tell her the buyer was her own daughter.

In July, the Tasmanian Civil and Administrative Tribunal received a complaint from a real estate agent, who claimed that Tara had entered into a contract to sell Nell’s house for less than its full value.

The tribunal investigated whether Nell had capacity when she made the power of attorney and whether Tara had acted as an attorney should. During the subsequent hearing, the tribunal learned that Tara also held $27,000 of Nell’s money in her trust account.

As Nell’s attorney, Tara had a duty to correct her misunderstanding of her home’s value and to protect her from being exploited through her lack of real estate knowledge. The tribunal found that Tara had breached her duty to Nell by entering into a conflict transaction.

The tribunal revoked Tara’s appointment as Nell’s attorney and appointed the Public Trustee instead.

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Case study – the mysterious mortgage: an order to provide accounts (PGB [2014] NSWCATGD 32)

Paula* was a 92-year-old widow with three children, Inge*, Tanya* and Hugo*. She had appointed Hugo as her attorney in 2009.

Paula, who had owned her home for many years, had been receiving regular in-home care from an aged care service provider for some time. But in 2014 the provider wrote to Hugo and Tanya, advising that their services were to be withdrawn because approximately $12,200 in fees were outstanding.

At this point, Inge and Tanya discovered their brother had sold their mother’s house earlier that year. Inge applied to the NSW Civil and Administrative Tribunal for a new financial manager to be appointed and review Hugo’s actions in relation to the house sale.

Hugo, who was a solicitor, did not attend the hearing in person but gave information over the phone. He told the tribunal that he had sold the house in 2014, used the money to pay off the mortgage and invested the rest in a company, of which his mother was a shareholder. Yet the tribunal also heard that in 2007, the house – which had then been worth around $1.8 million – had not been under a mortgage.

The house had been sold to a buyer, Lionel*, on the condition that Paula would rent it from him and continue to live there. However, Lionel told the tribunal that he intended to evict Paula because a substantial amount of rent was owing.

The tribunal appointed Inge and Tanya as their mother’s financial managers, to be reviewed in 3 months. This would allow the daughters time to gather more information to explain the mortgage, the reasons for the house sale and details of the investment. The tribunal ordered Hugo to provide the financial managers with full accounts of all transactions he had made as his mother’s attorney.

* Names have been changed for privacy reasons

Disclaimer: The information provided on this website is not a substitute for individual legal advice

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