Header Articles

Attorney used Enduring Power of Attorney for "personal use"

March 2017

A recent Court of Appeal decision highlighted what a news report headed “inheritance lost: son spends estate money before nephew can get his share”.


  • In December 2005 K signed his Will providing for his wife and, if she should predecease him, then providing equally for his son A and his grandson D (D’s father having already predeceased K) – A was aware of the terms of this Will.
  • Shortly afterwards K appointed A as his attorney under an Enduring Power of Attorney as to Property (“EPOA”) to apply as from the signing of the EPOA.
  • K’s wife died in early 2006, at which time K initially lived with A and his wife – at that stage K was 86 years and not in good health – in October 2008 K moved into a rest-home.
  • As at March 2006 K had assets worth nearly $330,000 – when K died in September 2011 he had just $1,400 to his name.
  • A opened a bank account in his father’s name with A having signing authority – within 3 days A had transferred $46,500 to his own bank account.
  • The evidence was that A used his father’s money for his own personal use – spending $17,000 to buy a car, paying for travel to Australia and paying for two overseas cruises in 2010 and 2011.

Court Proceedings

Proceedings were issued on behalf of D (A’s nephew) on the basis that but for A spending almost all of K’s wealth on himself (rather than on K) D would have received a sizeable inheritance.

The Decision

Following a decision in the High Court, A appealed to the Court of Appeal that held:

  • There was a breach of fiduciary relationship by A arising through his control of K’s accounts.
  • A was neither exercising care nor avoiding conflicts of interest.
  • A was aware of the provisions of his father’s Will and set about forestalling the possibility of his receiving only one half of K’s estate by transferring almost all of it to himself.
  • Accordingly, the Court held “that is sufficient to show [A] must have known his actions were dishonest. He can not have honestly believed that when entrusted with the power of protection of his father’s property he was acting in [K]’s interests in spending all [K]’s money on his own needs”.
  • A “systematically abused for his own benefit the power entrusted by his father” in appointing A as attorney.
  • A was ordered to pay the estate $280,354 plus interest and costs.