Remedies for breaches by enduring attorneys

Remedies for breaches by enduring attorneys

Meaning of terms

A dictionary in schedule 3 defines particular words used in the POA Act.

In simple terms:

An Enduring Power of Attorney (EPA) is a formal document used by an adult (the principal) to authorise one or more persons (the attorneys) to make personal and/or financial decisions on the principal’s behalf if the principal lacks capacity to make those decisions.

An attorney under an EPA means a person authorised to make decisions on behalf of another person.

A principal under an EPA means a person who appoints an attorney to make decisions on that person’s behalf.

Power for a matter means power to make all decisions about that matter.

A person’s capacity for a matter means the person is capable of:

understanding the nature and effect of decisions about the matter; and
freely and voluntarily making decisions about the matter; and
communicating the decisions in some way.

A person’s impaired capacity for a matter means the person does not have capacity to make decisions about the matter.

Personal liability of enduring attorneys

When an enduring attorney exercises a power authorised by a principal, the attorney must exercise that power in a way that complies with relevant general principles and discharges the attorney’s duties (section 6C POA Act), (see EPA 2 – Power of enduring attorneys and EPA 3 – duties of enduring attorneys).

Generally, enduring attorneys are not personally liable for losses and liabilities incurred by a principal.

However, an attorney can be held personally liable if a loss incurred by a principal was caused by the attorney’s failure to discharge his or her duties when exercising a power conferred by the principal.

Statutory remedies under the POA Act

Right to compensation

If a principal incurs a loss because of the attorney’s breach of the POA Act, the principal or the principal’s estate (if the principal has died) has a right to seek compensation from the attorney for that loss (sections 106 and 107 POA Act).

An application for a compensation order against an attorney under sections 106 or 107 POA Act is made to the Supreme Court. QCAT does not have jurisdiction to decide such application (Public Trustee of Queensland v BN and Ors (2011) QCAT 666).

If the principal or attorney has died, the application for compensation must be made within 6 months after the death. That time limitation can be extended by the court in exceptional circumstances (section 106 POA Act).

The court may relieve an attorney from all or part of the attorney’s personal liability for a loss if the court finds that:

the attorney acted honestly; and
the attorney acted reasonably; and
it would be fair to excuse the attorney’s breach (section 105 POA Act).

An attorney who is acting honestly would generally be found to be acting in good faith and in the principal’s interests. However, the attorney’s knowledge of a wrongdoing is not a necessary pre-requisite for a finding that an attorney acted dishonestly (Ede v Ede (2006) QSC 378).

Right to apply to QCAT or the Supreme Court to protect a principal’s interests

A principal, a member of the principal’s family, an attorney, the Public Guardian, the Public Trustee, or another person who has a sufficient and genuine concern for the rights and interests of the principal, can apply to QCAT or the Supreme Court for orders about something related to the POA Act (section 110 POA Act).

Direction, advice or recommendation

A principal or an interested person can apply for a direction, advice or recommendation about a matter related to the POA Act, including (section 118 POA Act):

how the terms of an EPA should be interpreted;
how an attorney’s power for a matter should be exercised; or
to authorise an attorney to undertake a transaction that the attorney may not be authorised to undertake.

Declaration

A principal or an interested person can apply for a declaration about matters relating to an EPA, including about:

a person’s capacity for a matter (section 111 POA Act);
the validity or invalidity of an EPA (sections 113 POA Act); and
whether an attorney’s power under an EPA has begun (section 115 POA Act).

Order

A principal or an interested person can apply for an order about something related to the POA Act, including:

an order to remove a power from an attorney and give that power to another attorney or a new attorney;
an order to change the terms of an EPA; or
an order to revoke all or part of an EPA (section 116 POA Act).

This may happen, for example, if a court or the tribunal finds that the circumstances of a principal or other circumstances have changed and one or more terms of the EPA are no longer appropriate to protect the principal’s interests (section 117 POA Act).

Right to records and audit

If a principal or an interested party has genuine concerns about how an attorney for a financial matter is managing a principal’s finances, an application can be made to QCAT or the Supreme Court for:

an order that the attorney provides a summary of receipts and expenditures for a specified period;
an order that the attorney provides detailed accounts of dealings and transactions undertaken by the principal for a specified period;
an order that the accounts provided be audited; or
an order that the attorney present financial management plan for approval (section 122 POA Act).

Complaints to the Public Guardian

The Office of the Public Guardian (OPG) is an independent statutory body created under the Public Guardian Act 2014 (Qld) (PG Act) to protect the rights and interests of vulnerable Queenslanders, including adults with impaired capacity.

Investigative powers

The OPG can investigate a complaint or allegations that an adult with impaired capacity is being or has been neglected, exploited or abused, or that decision-making arrangements are inappropriate or inadequate (section 19 PG Act).

Those investigative powers include:

the power to require an attorney for a financial matter or an administrator to produce records and accounts (section 21 PG Act);
the power to gain access to all information necessary to investigate a complaint (section 22 PG Act); and
the power to summon a person to answer questions or produce documents or things (section 25 PG Act).

Once an investigation is completed, the OPG issues a written report that can be used as evidence in legal proceedings or police investigations.

The OPG may require that the costs of an investigation be paid by:

the attorney or administrator if he or she has not acted as required by law; or
the person making the complaint if the complaint is frivolous, vexatious or without good cause (section 29 PG Act).

Protective powers

The OPG also has power to protect an adult with impaired capacity, including by:

suspending the operation of an EPA for up to 3 months if an attorney is not competent (section 34 PG Act);
applying for interim orders to protect a principal’s rights and interests;
applying for an entry and removal warrant if a principal is at immediate risk of harm (section 36 PG Act); and
bringing a claim for damages or to recover possession of a property or payment of money wrongfully dealt with (section 33 PG Act).

Equitable remedies

In addition to the statutory remedies set out in the POA Act, in some cases an equitable remedy may be available to protect the interests of a principal. A claim for an equitable remedy may be made together with a claim for a statutory remedy.

Equity is a complex area of law. The courts consider many factors when determining if an equitable remedy should be granted to a person, including a lengthy delay in seeking a remedy and the conduct and circumstances of the parties involved when they entered into a transaction.

Below are examples of common equitable claims made in the context of EPAs. This is not an exhaustive list of equitable claims that may be available to protect a person’s interests.

Breach of fiduciary duty

The relationship between a principal and an attorney gives rise to fiduciary duties owed by the attorney to the principal. These duties are inherent in the relationship of trust between an attorney and principal, which is also called a fiduciary relationship.

If an attorney breaches a fiduciary duty, for example, by making a profit at the principal’s expense, an application can be made for an order holding the attorney accountable for the profit made in breach of a fiduciary duty.

For an example of equitable compensation awarded for a breach of fiduciary duty by an enduring attorney, see Smith v. Glegg (2004) QSC 443 (9 December 2004).

Unconscionable dealings

A court may set aside a transaction if one party to that transaction is at a special disadvantage when compared to the other party, and the stronger party knew or ought to have known about it and takes an unfair advantage of that vulnerability to gain a benefit for himself or herself (Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447).

The special disadvantage of a principal in comparison to an attorney may arise, for example, because of a principal’s age, impaired capacity, illness or lack of assistance or explanation if assistance or explanation would be necessary for the principal to make an informed decision about his or her interests.

When considering a claim of unconscionable dealings, a court looks to the conduct of the stronger party trying to enforce a dealing or gain a benefit when dealing with a person with a special vulnerability.

Undue influence

A court may set aside a transaction procured by undue influence, which can arise as a matter of fact or where there is a presumption of undue influence between the parties that is not rebutted by evidence. For example, there is a presumption that in a conflict transaction between a principal and attorney (or between a principal and a relative, business associate, or close friend of the attorney), the attorney induced the principal to enter into that transaction by undue influence (section 87 POA Act). If that presumption is not rebutted by the principal, a court may set aside that conflict transaction.

When considering a claim of undue influence, a court looks to the quality of the consent for a transaction given by a vulnerable party For an example of an order setting aside a transfer of a house as a result of undue influence and unconscionable dealing by an enduring attorney, see Gillespie v Gillespie & Ors (2012) QDC 212).

Implied trusts

A trust is a legal relationship under which a person holds a legal interest in a property for the benefit of one or more beneficiaries and subject to certain duties.

Under exceptional circumstances, a court may make a declaration that a person’s legal interest in a property is held on trust for the benefit of another person. That could happen, for example, if it would be unconscionable to allow an enduring attorney to take an unfair advantage of a vulnerable principal who loaned the attorney money to buy a house on a promise that the principal could live in the home with the attorney.

For examples of cases where the court declared that the legal owner of a property held an interest on trust for another person, see Swettenham v Wild (2005) QCA 264 and Field v Loh & Anor (2007) QSC 350.

Unmeritorious complaints about enduring attorneys

Before commencing legal proceedings, it is recommended that a person considers if alternative dispute resolution (ADR) would be an appropriate way to try to resolve a conflict or legal problem. In ADR, an impartial person assists those in disagreement to solve the issues between them (see Alternative Dispute Resolution).

It is strongly recommended that a person obtains legal advice before making an application to QCAT or the Supreme Court.

An application that is found to be frivolous, trivial, vexatious, misconceived or lacking in substance can be dismissed and an order for costs can be made against the applicant.

An order can also be made prohibiting a person to make a new application about a matter without first obtaining authorisation from the court or tribunal (s 123 POA Act).

(see Unmeritorious proceedings and conduct causing disadvantage in QCAT; Costs orders in Queensland Courts)

This resource is current as of 30 June 2023

by Zoe Rienecker

Duties of enduring attorneys

Duties of enduring attorneys

Meaning of terms

A dictionary in schedule 3 defines particular words used in the POA Act.

In simple terms:

An Enduring Power of Attorney (EPA) is a formal document used by an adult (the principal) to authorise one or more persons (the attorneys) to make personal and/or financial decisions on the principal’s behalf if the principal lacks capacity to make those decisions.

An attorney under an EPA means a person authorised to make decisions on behalf of another person.

A principal under an EPA means a person who appoints an attorney to make decisions on that person’s behalf.

Power for a matter means power to make all decisions about that matter.

A person’s capacity for a matter means the person is capable of:

understanding the nature and effect of decisions about the matter; and
freely and voluntarily making decisions about the matter; and
communicating the decisions in some way.

A person’s impaired capacity for a matter means the person does not have capacity to make decisions about the matter.

General duties of enduring attorneys

An attorney must exercise power honestly and with reasonable diligence to protect the principal’s interests (section 66 POA Act).

Duty to comply with general principles

The general principles set out in s 6C of the POA must be applied by a person or other entity that performs a function or exercises a power under the POA or an enduring document. The general principles include:

An adult is presumed to have capacity for a matter.
An adult’s inherent dignity and worth, and equal and inalienable rights, must be recognised and taken into account.
Empower an adult to exercise the adult’s human rights and fundamental freedoms.
An adult’s right to participate to the greatest extent practicable in the development of policies, programs and services for people with impaired capacity for a matter.
The importance of maintaining an adult’s existing supportive relationships must be taken into account.
The role of families, carers and other significant persons in and adult’s life to support the adult to make decisions should be acknowledged and respected.
The important of maintaining an adult’s cultural and linguistic environment and set of values, including religious beliefs, must be taken into account.
For an adult who is Aboriginal or Torres Strait Islander, the importance of maintaining their cultural and linguistic environment and set of values must be taken into account.
An adult’s privacy must be taken into account and respected.
An adult’s personal information, including health information, must be protected on the same basis as other people’s personal information is protected.
An adult’s right to liberty and security on an equal basis with others must be taken into account.
An adult should not be deprived of the adult’s liberty except in accordance with the law.
An adult’s right to participate, to the greatest extent practicable, in decisions affecting the adult’s life must be recognised and taken into account.
An adult must be given the support an access to information necessary to enable the adult to make or participate in decisions affecting the adult’s life.
An adult must be given the support necessary to enable to adult to communicate the adult’s decisions.
To the greatest extent practicable, a person or other entity, in exercising power for a matter for an adult, must seek the adult’s views, wishes and preferences.
An adult’s views, wishes and preferences may be expressed orally, in writing or in another way, including, for example, by conduct.
An adult is not to be treated as unable to make a decision about a matter unless all practicable steps have been taken to provide the adult with the support and access to information necessary to make and communicate a decision.
A person or other entity in performing a function or exercising a power under the POA in relation to an adult or other enduring document for an adult must do so in a way that promotes and safeguards the adult’s rights, interests and opportunities; and in the way that is least restrictive of the adult’s rights, interests and opportunities.
A person or other entity in performing a function or exercising a power under the POA must recognise and preserve, to the greatest extent practicable, the adult’s right to make the adult’s own decision; and if possible, support the adult to make a decision.

Duty to comply with health care principle

An attorney exercising power for a health matter must also comply with the health care principle set out in s 6D of the POA Act.

When making decisions for a health matter, an attorney must also apply the general principles, as well as:

the principle of non-discrimination requires that all adults be offered appropriate health care, including preventative care, without regard to a particular adult’s capacity; and
any consent to, or refusal of, health care for an adult must take into account the principles of respect for inherent dignity and worth, individual autonomy and independence of persons.
Taking into account information given by the adult’s health provider, the nature of the adult’s medical condition and prognosis, any alternative health care that is available, the nature and degree of any risks with proposed or alternative health care, whether health care can be postponed, the consequences for the adult if proposed health care is not carried out, consideration of the benefits versus burdens of the proposed health care; and the effect of the proposed health care on the adult’s dignity and autonomy.
The wishes and views of an adult expressed when the adult had capacity in an advance health directive.

Duty to act in a principal’s best interests – an attorney must exercise a power granted by a principal in accordance with the terms of the EPA, and act honestly and with reasonable diligence to protect the principal’s interests (section 66 POA Act).

An attorney may be ordered to compensate the principal for losses or any other liability incurred by the principal as a result of the attorney’s failure to discharge this duty.

Duty of confidentiality

An attorney must not use confidential information gained by being an attorney, unless the attorney has a reasonable excuse or the use of such information is allowed by the POA Act (sections 74, 74A POA Act).

For example, an attorney may disclose confidential information about the principal’s affairs:

If authorised or required under a regulation or another law;
For a proceeding arising out of or in connection with this Act;
If authorised by the person to whom the information relates;
If authorised by the court or the tribunal in the interests of justice;
If necessary to prevent a serious risk to a person’s life, health or safety; or
For the purpose of obtaining legal or financial advice; or
If reasonably necessary to obtain counselling, advice or other treatment; or
In reporting a suspected offence to a police officer or assisting a police officer in the investigation of a suspected offence; or
In assisting the public guardian, the public advocate or a public service officer in the performance of functions of the POA or Guardianship and Administration Act or Public Guardian Act.

Duty to avoid conflict transactions

All enduring attorneys must avoid acting if there is, or may be, a conflict of interests or a conflict of duties, unless the EPA or the principal authorised that action while the principal had capacity to do so. In that case, it is recommended that an attorney applies to QCAT or the Supreme Court for a direction about the conflicting matter.

Attorneys for financial matters have an additional duty not to enter into a transaction if there is, or may be, a conflict between a duty the attorney owes to the principal and the attorney’s interests (or the interests of a relation, business associate or close friend of the attorney) (section 73 POA Act).

There is a presumption that in a conflict transaction between a principal and attorney (or between a principal and a relative, business associate, or close friend of the attorney), the attorney induced the principal to enter into that transaction by undue influence (section 87 POA Act).

If a principal does not have capacity to authorise a conflict transaction entered into by the attorney, the attorney must seek the authority of QCAT or the Supreme Court before entering into such transaction.

Certain conflict transactions are authorised by the POA Act and may not need to be authorised by QCAT or the Supreme Court first, for example:

certain dealings concerning property that is jointly owned between the attorney and principal (section 73(7) POA Act);
if an attorney gives a gift or makes a donation on behalf of a principal in accordance with section 88 POA Act; or
if an attorney provides for the needs of a principal’s dependants from the principal’s estate in accordance with section 89 POA Act. (See Powers of enduring attorneys)

Duty to keep records for financial matters

Attorneys for financial matters must keep accurate records and accounts of all dealings and transactions made on behalf of a principal (section 85 POA Act).

These records and accounts may be eventually audited by QCAT or the Supreme Court. It is recommended that attorneys for financial matters seek assistance from a book keeper or accountant to set up an appropriate recording system and budget for the principal if necessary.

A monthly statement of accounts is commonly used to record income and expenses incurred by a principal. Large expenses should be recorded separately and receipts for such expenses should be kept.

Duty to keep property separate

Attorneys for financial matters must keep their property separate from a principal’s property (section 86 POA Act), for example in separate bank accounts or storage places.

That obligation does not arise to property jointly owned by a principal and attorney before the EPA commenced. However, for jointly owned property, records must still be kept by the attorney clearly showing the principal’s share in the property.

This resource is current as of 30 June 2023

by Zoe Rienecker

Powers of enduring attorneys

Powers of enduring attorneys

Meaning of terms

A dictionary in schedule 3 defines particular words used in the POA Act.

In simple terms:

An Enduring Power of Attorney (EPA) is a formal document used by an adult (the principal) to authorise one or more persons (the attorneys) to make personal and/or financial decisions on the principal’s behalf if the principal lacks capacity to make those decisions.

An attorney under an EPA means a person authorised to make decisions on behalf of another person.

A principal under an EPA means a person who appoints an attorney to make decisions on that person’s behalf.

Power for a matter means power to make all decisions about that matter.

A person’s capacity for a matter means the person is capable of:

understanding the nature and effect of decisions about the matter; and
freely and voluntarily making decisions about the matter; and
communicating the decisions in some way.

A person’s impaired capacity for a matter means the person does not have capacity to make decisions about the matter.

General powers of enduring attorneys

An attorney’s power for a matter is limited by the terms of the EPA granting that power.
A principal can, for example, specify conditions and instructions in an EPA about when and how the attorney is to exercise a power given by the principal.

A person should carefully read the EPA presented by the attorney to ensure he or she has the necessary power to act for the principal in a matter.

Unless the EPA expressly states otherwise, an attorney is deemed to have maximum authority for a matter.

If a principal does not want an attorney to have powers for all financial and personal matters, the EPA must expressly state for what matters the power is being granted. For example, if an EPA simply states “I appoint Mary as my attorney”, Mary has power for all financial and personal matters for the principal (s 77 POA Act).

When an attorney exercises a power authorised by a principal, the attorney must exercise that power in a way that complies with relevant general principles and duties. (see Duties of enduring attorneys and Remedies for breaches by enduring attorneys)

Decisions that attorneys for all financial matters can make

Power for financial matters An attorney for all financial matters has power to make decisions for a principal about a number of financial and property matters, including one or more of the following (Schedule 2 POA Act):

withdrawing from or depositing money into the principal’s bank account;
paying maintenance and accommodation expenses for the principal;
paying the principal’s debts;
receiving and recovering money owed to the principal;
carrying on a trade or business of the principal;
performing contracts entered into by the principal;
discharging a mortgage over the principal’s property;
paying rates, taxes, insurance premiums or other outgoings for the principal’s property;
preserving or improving the principal’s estate;
undertaking a real estate transaction or a transaction involving the use of the principal’s property as security for the benefit of the principal; and
legal matters relating to the principal’s financial or property matters.

Decisions that attorneys for all personal matters can make

Powers for personal matters An attorney for all personal matters has power to make decisions about a principal’s care and welfare, including for one or more of the following matters (Schedule 2 POA Act):

daily issues such as diet, dress and general care;
living, work and education arrangements for the principal;
legal matters not relating to the principal’s financial or property matters (for example, applying for a domestic violence protection order for the principal);
whether to consent to a forensic examination of the principal; and
health care (other than special health care) by a health provider to diagnose, maintain and treat the principal’s physical and mental health.

When making health care decisions for a principal, an attorney must consider if the principal made an Advance Health Directive specifying the principal’s wishes about future health care. Directions made by the principal in an Advanced Health Directive will have priority over the attorney’s power for a health matter (section 35 POA Act).

If an EPA does not give an attorney power to make health care decisions for a principal, a statutory health attorney can make a decision for a principal with impaired capacity for a health matter (see GAA – Types of substituted decision making).

Decisions that attorneys for all personal matters cannot make

Special personal matters An attorney for all personal matters does not have power to make decisions for a principal about special personal matters regarding (Schedule 2 POA Act):

making or revoking the principal’s will;
making or revoking an enduring document of the principal;
exercising a principal’s right to vote in a election or referendum;
consenting to a principal’s marriage, civil partnership or sexual relationship, or to a dissolution of a marriage or civil partnership;
adoption of a child of the principal;
surrogacy arrangements for the principal;
entering a plea on a criminal charge for the principal; and
cultural recognition orders under the Meriba Omasker Kaziw Kazipa (Torres Strait Islander Traditional Child Rearing Practice) Act 2020.

Special health matters An attorney for all personal matters does not have power to make decisions for a principal about special health matters regarding (Schedule 2 POA Act):

removal of tissue from the principal while alive for donation to someone else;
sterilisation and termination of a pregnancy;
participation in special medical research or experimental health care;
electroconvulsive therapy or psychosurgery; and
special health care prescribed under the Guardianship and Administration Act 2000 (Qld).

Certain special personal matters and special health matters may be authorised by QCAT or the Supreme Court.

Other powers of enduring attorneys

Right to information An attorney can access all the information that the principal would have been entitled to access if the principal had capacity, if the attorney needs such information to make informed decisions authorised by the principal (section 81 POA Act).

Confidentiality If an attorney receives confidential information on behalf of a principal, the attorney must respect the principal’s right to confidentiality and only disclose such information to the extent necessary to protect the principal’s interests.

Execution of documents An attorney may execute a document on behalf of a principal, with the attorney’s own signature or seal, if that is necessary or convenient for the exercise of a power given to the attorney by the principal. The document must be executed in a way that shows that the attorney executed it as attorney for the principal (section 69 POA Act).

Reimbursement and remuneration An attorney is not entitled to remuneration or a wage for acting for a principal. However, an attorney is entitled to be reimbursed by the principal for reasonable out-of-pocket expenses incurred in performing the attorney’s duties (for example, photocopying charges and reasonable travelling expenses).

An attorney may not have the right to reimbursement for out-of-pocket expenses if:

the attorney is acting in a way not authorised in the EPA;
the attorney is in breach of his or her duties; or
the expenses are not reasonable having regard to all circumstances, including the principal’s financial position.

Gifts An attorney can give a gift or donate on behalf of a principal only if (section 88 POA Act):

the gift or donation is of the nature of the principal made when the principal had capacity; or
of the nature the principal might reasonably be expected to make; and

the value of the gift is reasonable having regard to all circumstances, in particular the principal’s financial position.

An attorney who is named a beneficiary under a will of the principal is not entitled to the inheritance until after the principal’s death.

Certain gifts may be a conflict transaction that must be authorised by QCAT or the Supreme Court before they are given (EPA 3 – Duties of enduring attorneys).

Maintaining principal’s dependants – an attorney for financial matters may provide for the needs of a principal’s dependants from the principal’s estate. However, what is provided must not be more than what is reasonable having regard to all circumstances, in particular the principal’s financial position (section 89 POA Act).

Certain maintenance payments may be a conflict transaction that must be authorised by QCAT or the Supreme Court before they are made (see EPA – Duties of enduring attorneys).

Investments An attorney for financial matters can make an investment for a principal (section 84 POA Act):

if the investment has been authorised by QCAT or the Supreme Court; or
which, if the investment were of trust funds by a trustee, would be an investment by a trustee exercising a power of investment under the Trusts Act 1973, guided by the prudent person rule (see sections 22 to 24 of the Trusts Act 1973).

If when an EPA commences a principal already had investment arrangements in place, an attorney for financial matters can generally continue those investments (section 84 POA Act). However, the attorney must invest with reasonable diligence, making prudent financial decisions to protect the principal’s interests (section 66 POA Act).

Can an attorney’s power change after the EPA commences?

QCAT or the Supreme Court may make orders about the powers that a principal is granted to an attorney (Chapter 6, POA Act). This could occur, for example:

if an attorney is not discharging his or her duties;
if a guardian and/or administrator is appointed for the principal;
if a principal did not have capacity to make the EPA;
if an EPA does not comply with the requirements of the POA Act;
if a principal was induced to make the EPA by dishonesty or undue influence; and
if a principal’s or other circumstances have changed since the EPA was made and the terms of the EPA are no longer appropriate to protect the principal’s interests.

What if there is more than one attorney?

An EPA can state how attorneys are to share the power given to them by the principal. For example, jointly (unanimously), severally (independently), jointly and severally, or by majority.
If a principal appoints more than one attorney for a matter, and the EPA does not state how the attorneys are to share the power given to them, the attorneys are jointly appointed and must make decisions for the principal unanimously (section 78 POA Act).
It is important to keep in mind that an EPA is an instrument created to protect the rights and interests of a principal. If an EPA is not working for a principal, for example because of a family conflict preventing joint attorneys from making decisions in a timely and objective manner, the powers of an attorney may be removed and an appropriate independent decision-maker may be appointed.

This resource is current as of 30 June 2023

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Disclaimer

The information in this resource is for general information purposes only and should not be relied on as legal advice. If you need legal advice, please contact LawRight or another lawyer. LawRight can only give advice to people who are eligible for our services.

by Zoe Rienecker

Costs orders in Queensland Courts

This factsheet provides an overview of the terminology, law and procedure in relation to costs orders in Queensland Courts. The rules governing costs orders in Queensland courts is the Uniform Civil Procedure Rules 1999 (UCPR).

Terminology

A costs order is where the court orders one party to pay the other party’s legal costs. Costs orders:

can be awarded at any stage of the proceedings or after the proceeding ends;
can be awarded in relation to the whole proceedings, a particular question or a particular part of the proceedings; and
are at the discretion of the court.

However, a costs order will usually be made at the end of the proceedings and will “follow the event”, unless the court orders otherwise. In other words, the unsuccessful party will generally be ordered to pay the costs of the successful party (rule 681, UCPR).

This means if you are unsuccessful in court proceedings, you may be required to pay a portion of the successful party’s legal fees.

The cost liability between parties to a court action is known as party and party costs. Party and party costs also refers to a type of costs assessment, to determine how much costs should be paid, now known as the standard basis of assessment. This is discussed in more detail below.

The cost liability between a client and their solicitor is known as solicitor and client costs, and is governed by the Legal Profession Act 2007 (Qld). This factsheet does not look at the liability of a client to pay their solicitor’s costs, although detailed information is available on the Legal Services Commission Website. Solicitor and client costs also refers to a type of costs assessment now known as the indemnity basis of assessment. This is discussed in more detail below.

Types of costs orders

The court may order payment of:

an amount of costs to be assessed;
a specified part or percentage of assessed costs;
assessed costs to or from a specified stage of the proceedings;
an amount for costs fixed by the court; or
an amount for costs to be decided in the way the court directs (rule 687, UCPR).

The court may order fixed costs where that will avoid undue delay and expense, but only if the court is confident that costs can be fixed on a reliable basis. Parties should at all times during the course of a hearing be in a position to inform the court of their realistic estimate of the amount of the recoverable costs, on a standard basis or indemnity basis (see below).

The court may also order that the amount of costs be agreed between the parties.

Assessment of costs

Normally, the amount of costs are not fixed by the court and need to be assessed. Assessment is carried out by an approved costs assessor who may be given certain powers including examining witnesses, directing or requiring a party to produce documents or giving directions about the conduct of the assessment process. The costs assessor’s fees will be paid by the person who has been ordered to pay the costs of the proceedings.

There are two types of assessment: on a standard basis and on an indemnity basis. Even if costs are ordered on a fixed basis or are to be agreed, it is important to understand these methods of assessment to ensure that the costs fixed or agreed reflect the appropriate amount.

Standard basis of assessment

Unless otherwise specified, costs are assessed on a standard basis. This means the amount of costs to be paid are calculated by taking into account only those costs actually incurred by the party which were necessary or proper for the attainment of justice or for enforcement or defence of rights (rule 702, UCPR). The costs assessor must apply the court’s scales of costs which are set out in the UCPR.

As a result, standard costs only compensate the successful party for part of the fees (around 60-75%) they pay to their solicitor. If the solicitor has charged more for work done than that specified in the scale of costs, or if there is an additional amount to be paid to the solicitor under the retainer, then this will not be included in an assessment of costs on a standard basis.

Where legal work involves or may involve litigation, the retainer between the solicitor and client must provide an estimate on how much the client may recover from the other side if successful. Conversely, the retainer must include an estimate of costs the client may have to pay to the other party if unsuccessful.

If the nature and importance, or the difficulty or urgency, of a proceeding and the justice of the case justify it, the court may allow an increase of not more than 30% of the lawyer’s costs allowable on an assessment under the relevant scale of costs (rule 691(5), UCPR).

Indemnity basis of assessment

If costs are awarded on an indemnity basis, then costs are calculated by taking into account all costs reasonably incurred and of a reasonable amount, having regard to:

The court’s scale of fees;
Any costs agreement between the party to whom the costs are payable and the party’s solicitor; and
Charges ordinarily payable by a client to a solicitor for the work (rule 703, UCPR).

The only ground for disallowing items of indemnity costs is if they are of an unreasonable amount or were unreasonably incurred.

Costs may be awarded on an indemnity basis where the court finds that the court proceeding had no legal basis. If the court awards costs to the successful party on an indemnity basis, the unsuccessful party may need to pay up to 90-95% of the fees and costs actually incurred by the successful party.

Assessment procedure

The basic process following an order for costs to be assessed is as follows:

Liability to pay costs arises, for example, a costs order. It is important to note that a liability to pay another party’s costs does not only arise from an order as to costs. That liability may also arise as a result of legislation, rules or under an agreement to pay costs.
Claiming party serves their bill of costs, known as a costs statement (Form 60A).
The paying party then has 21 days within which to object to any items in the costs statement, by serving a Notice of Objection (Form 61).
A costs assessor is then appointed which can be by consent between the parties or, if consent cannot be reached, by the court registrar.
The costs assessor performs an assessment and issues a certificate of assessment, which will state how much the paying party must pay. The paying party may, within a certain timeframe, request a statement of reasons for the certificate of assessment.
The paying party may appeal the assessment to a court officer, which will normally be heard by a judge. If there is no appeal, then the certificate of assessment becomes final and the paying party is liable to pay that amount.

Things may happen so that the above process is not strictly followed. For example, if the paying party does not serve a Notice of Objection, then a default process is followed. Another example is where the parties come to an agreement to settle costs; different procedures apply depending on whether agreement was reached before or after a costs assessor had been appointed.

For more information about the assessment procedure, see the Queensland Courts Website. Forms can be accessed here.

Seeking costs orders

It is up to you to ask the court for an order that the other party pay your costs if you are successful. This request should be made in the court document which commences the action, also known as an “originating process”.

You can only ask that the other party pay your costs if you have retained a lawyer to represent you. You cannot ask for a costs order if you are self-represented.

If you are successful in your court action, you will need to be prepared to make submissions on why you should be entitled to your costs and on what basis they should be assessed. The fact that you were successful in your case is often enough to persuade the court that you should be entitled to your costs (refer to Rule 681, UCPR). In addition, the court may increase fixed costs, order a higher percentage of standard costs or order indemnity costs if you can show that the other party has, for example, significantly delayed the matter, unreasonably rejected offers of settlement or otherwise acted unreasonably prior to or during the trial.

If the court orders costs in your favour then you will need to follow certain procedures as set out above such as serving a Form 60A costs statement. The time limit for enforcing a costs order is 6 years from the date of the order (rule 799(1), UCPR), or up to 12 years with the leave (permission) of the court (rule 799(2), UCPR and section 10(4), Limitation of Actions Act 1974 (Qld)).

Resisting costs orders

If the other party succeeds and asks for their costs, you may need to make submissions on why you should not have to pay their costs or that any costs order should be minimal. Again, relevant issues will be the conduct of the other party, your own conduct and whether the action could have reasonably been settled at an earlier time.

If you are ordered to pay costs to be assessed, then you will have an opportunity to object to any cost items claimed by the other party. You can also make a written offer to pay a fixed amount in full and final settlement of the matter in order to avoid the delay and expense of having them assessed.

If you cannot pay a costs order made against you, it is worth advising the other side about why you cannot pay and supplying evidence of this. You may be able to negotiate a suitable repayment plan or the other party may decide it is not worth pursuing recovery of their costs against you. However, if costs orders have been made against you, then the other party is entitled to commence enforcement proceedings to recover that money with interest within 6 years of the order, or otherwise with the leave of the court. This can lead to seizure and sale of your property, redirection of your earnings or bankruptcy.

by Ben Tuckett

Fee reductions in the Queensland Courts

This factsheet contains information about obtaining fee reductions in the District and Supreme Courts of Queensland.

The Uniform Civil Procedure Rules 1999 (UCPR) contain a number of prescribed forms. You can find templates of these forms on the Queensland Courts Website.

Filing fees

When you file a document you must also pay the relevant filing fee. If you don’t include the filing fee, then the registry may refuse to accept the document. Rule 971 UCPR.

In the Supreme, District and Magistrates Courts you must pay a filing fee when you commence proceedings, bring a counterclaim or a cross appeal.

If your matter is in the District or Supreme Courts (but not the Magistrates Court) you may be eligible to get a reduction of the court fees. To apply for a reduction, you must use a form 131 (if you are an individual) or a form 132 (if you are a company or incorporated entity).

Regulation 10 of the Uniform Civil Procedure (Fee) Regulations 2009 (the Fee Regulations) sets out the circumstances when a Registrar must approve a reduced fee for a party. These are:

You have been granted Legal Aid for the proceeding
You hold a current health care card, a pensioner concession card or a Commonwealth seniors health card.
You hold a current repatriation health card or repatriation pharmaceutical benefits card.
You receive a youth allowance, Austudy or Abstudy.

You must apply under regulation 10 in the approved form and must include proof of the ground you rely on for the reduction. A Registrar must make an order approving the payment of a reduced fee if a party has made a “properly made application.”

Regulation 10A gives an additional discretionary power to the registrar to allow a party to pay a reduced fee on the ground of hardship. The application must be made in the approved form. In considering this application, the registrar must consider the party’s income, day-to-day living expenses, bank balances and cash on hand. The registrar may decide an application summarily and without extensive investigation.

Regulation 10B allows a registrar to approve a reduced fee for a corporation if the registrar is satisfied that the corporation does not have and cannot reasonably obtain from another source, sufficient funds to pay the relevant fee.

If an order is made for the payment of reduced fees, the order must also include the date by which the reduced fee must be paid.

Setting down and hearing fees

If you are not eligible for a reduced filing fee, you may have to pay both setting down fees and hearing fees if the matter is set down for a trial that is expected to last more than 1 day. The Court may, on application by a party order otherwise (regulation 4A(2)). It is permissible for someone else to pay these fees. These fees must be paid:

For a proceeding started by Claim when a Request for Trial Date is filed.
For a District Court Appeal, when a Certificate of Readiness is filed.
For an Originating Application or an Appeal – by the earlier of:

(a) 10 business days after the Registrar sets a date for the hearing or trial or adds the Appeal to the List of Appeals under Rule 790(2) of the UCPR; or

(b) 9:30 am on the first date of the hearing or trial.

If additional dates are set – by the earlier of 10 business days after the additional dates are set or 9:30 am on the first day of the trial.

If you were refused a filing fee reduction, you can still apply separately to pay the reduced fee for both the Setting Down and Hearing Fees.

What about the Magistrates Court?

Fee reductions or exemptions are not available in Magistrates Court proceedings.

by Ben Tuckett

Class actions

This fact sheet is designed to assist you in determining whether a class action (known in the Australian courts as a “representative proceeding”) is an appropriate avenue for your given situation.

A class action allows one claimant to bring an action in court on behalf of a group of people. There are no limitations on the types of claims that can be brought through the class action system. Recent class actions have concerned a diverse range of issues including product liability claims, medical negligence, financial and securities matters, and immigration law.

What are the requirements for bringing a representative proceeding?

In the Federal Court

Section 33C(1) Federal Court of Australia Act 1976 (Cth) sets out the main requirements for bringing a representative proceeding in the Federal Court:

There must be seven (7) or more persons who have claims against one or more individuals or corporate bodies. If there are less than seven people, the court can decide whether they will allow the proceedings (Order 6 rule 2(b) Federal Court Rules (Cth) and section 33L Federal Court of Australia Act 1976 (Cth); and
The claims must be in respect of the same, similar or related circumstances; and
The claims must give rise to a substantial common issue of law or fact. This means that the claims would raise serious rather than trivial issues which are common to all persons on whose behalf the litigation is brought.

The Act sets out a structured regime for the conduct and management of representative proceedings.

In the Queensland Courts

There is no set framework under the court rules in Queensland for the bringing and management of representative proceedings. However, rule 75 of the Uniform Civil Procedure Rules 1999 (Qld) provides:

“A proceeding may be started and continued by or against one or more persons who have the same interest in the subject matter of the proceeding as representing all of the persons who have the same interest and could have been parties in the proceeding.”

The courts have held that this rule allows for representative proceedings to be brought in the Queensland Courts.

What is meant by the same interest and same, similar or related circumstances?

“Same interest” has been defined to mean: “a community of interest in the determination of some substantial issue of law or fact” (see Carnie v Esanda Finance Corporation (1994-1995) 182 CLR 398).

Having separate contracts or transactions, or separate acts or omissions, which give rise to the legal action does not by itself prevent the bringing of a class action.

The court will decide whether your individual circumstances are sufficiently related to allow them to be grouped together.

What are the advantages of representative proceedings?

It may speed up the litigation process by allowing the claimants to be represented by one representative as opposed to each claimant coming before the court as an individual.
It may be cheaper for all the claimants, because the financial costs of bringing the action is shared amongst the claimants.
It allows for encouragement and support among claimants, resolving common issues. In particular it provides a method of litigation in those cases where individuals with limited resources would be reluctant to take action against large companies with extensive resources without such support.
It reduces the amount of a potential adverse costs order by bringing only one action against the defendant. Rather than defending multiple actions, the defendant is faced with complaints of all claimants simultaneously in a single claim, reducing the defendant’s legal costs (and the claimants’ liability to pay costs if unsuccessful) on the application.
A representative proceeding can also share the risk of an adverse costs order. While a claimant nominated to represent the group may assume the entire financial risk in a class action, any number of represented persons can contribute to a pool of funds and be collectively liable for any costs which may be awarded against the group.
The Federal Court has power to divide claimants into sub-groups for the ease of dealing with specific issues of the claim (ss 33Q and 33R Federal Court of Australia Act 1976(Cth). That means that individual matters are not neglected.
In the Federal Court, the law creates clear and easy-to-follow rules for the conduct of representative proceedings that any potential litigants can follow.

What are the disadvantages of representative proceedings?

At least in the Federal Court, the court usually requires the claimants to release to the public notice of the class action (s 33X Federal Court of Australia Act 1976 (Cth)). This is required for all claimants and defendants to be aware of the imminent court action and of the public issues the action will raise. Such notices can be costly (e.g. by newspaper advertisement).
Federal Court representative proceedings cannot be settled or discontinued without the court’s agreement (s 33V Federal Court of Australia Act 1976 (Cth)).
The Queensland court rules do not provide for a framework for the bringing of and management of representative proceedings and therefore does not provide certainty to litigants as to the requirement for instituting, continuing and defending representative proceedings.

How to commence class action

In the Federal Court

Under section 33H of the Federal Court of Australia Act 1976 (Cth), an application commencing a representative proceeding must:

describe or otherwise identify the group members to whom the proceeding relates;
specify the nature of the claims made on behalf of the group members and the relief claimed; and
specify the questions of law or fact common to the claims of the group members.

Representative proceedings decide the issues for all persons with the same claims even if they are not aware of the proceedings. However, the Federal Court has an ‘opt out’ system which allows any persons who do not wish to be a part of the proceedings or proceed further with their claims to ‘opt out’ (section 33J). The Court fixes a date before which a group member can opt out. After this date you must apply for an extension from the court to opt out of group proceedings.

In the Queensland Courts

The Queensland UCPR does not set out detailed procedures or rules for representative proceedings. You need only comply with rule 75, which states that persons to a representative action must have the same interest in the subject matter of the proceedings and that the persons represented could have been parties to the proceedings.

If a person is suing or being sued in a representative capacity, the person bringing the action must state that representative capacity on the originating process (the document which commences court proceedings). If a claim is being made against someone in a representative capacity, then the claimant must also define with sufficient particularity the members of the group who are said to have the same interest in the subject matter of the proceeding: Minister for Industrial Development of Queensland v Taubenfeld [2003] 2 Qd R 655.

Judgment in representative proceedings

A judgment in a representative proceeding must describe or otherwise identify the group members who will be affected by it. Unless the court otherwise orders, an order made in a representative proceeding binds not only the parties named in the proceeding but all persons who have the same interest as a representative party and could have been parties in the proceeding themselves (sections 82 of the Supreme Court of Queensland Act 1991 (Qld)), other than those persons in Federal Court proceedings who have chosen to not be party to (opted out of) the proceedings (section 33ZB of the Federal Court of Australia Act 1976 (Cth)).

by Ben Tuckett

Civil litigation in Queensland

This factsheet is intended only as a brief overview of the civil litigation process. For more detailed information, the hyperlinks in the text or listed at the end will take you to relevant factsheets.

Before commencing proceedings

Before you go to court there are a number of things you should consider when Deciding to commence legal action. You should consider whether you have a cause of action, whether you have the appropriate standing to bring the case, and whether you have suffered Damages and loss.

You should also consider if you have sufficient evidence, whether or not your claim is inside the relevant limitation period, and the rules about calculating time. Note that you can sometimes get an extension of time and that there are a number of cases considering extensions of time.

If there are a number of people who are in the same situation as you, you might in some special cases be able to bring a class action.

Before you engage in court proceedings you should be aware of the possibility of an adverse costs order. In Queensland, the general rule is that ‘costs follow the event’, which means that the losing party is usually required to pay the costs of the winning party.

Alternative Dispute Resolution (ADR)

Rather than going to court, you should consider some form of alternative dispute resolution such as mediation. If you have commenced court proceedings, you should also consider these options to resolve your dispute. Remember that every step taken in court proceedings may involve costs. So if you can reach a mutually agreeable settlement, you will save yourself money and stress.

Commencing proceedings in the Queensland Courts

You can commence proceedings in court by claim or application. The pleadings are the key documents that set out the terms of the legal dispute between the parties. The main pleadings are the statement of claim, the defence and the reply.

Starting court proceedings requires a number of steps. In most cases you will also need to draft a statement of claim. This is the document that sets out the facts that you rely on to establish your case.

Once your claim documents are ready you will need to pay the required filing fee (fee reductions are sometimes available), file the documents and serve them on the other party.

Defending court proceedings

If you are served with a Claim and Statement of Claim, you will need to draft and file a Defence. If you also have a cause of action against the plaintiff, you can bring a Counterclaim.

If you do not file a Defence, the plaintiff can obtain a Default Judgment against you. You can apply to the court to set aside a Default Judgment. You also may have to respond to an Enforcement Warrant.

Pre-trial steps

There are steps that the parties to a court matter take before a matter is finally decided at trial. These are called interlocutory steps. These can involve applications to the court. If the other party is legally represented you will need to deal with the other party’s lawyer. In addition, there are a number of things that the court can do to ensure that a matter is on track. It is important that you comply with the rules as otherwise you may have a costs order made against you. The court rules provide a number of time limits that apply.

Hearings

You may also need to attend court hearings to hear an application or to make directions. At hearings, there are a number of formal rules that the Court will expect you to observe (these are called Court etiquette). The judge and the lawyers may use some words that you are not familiar with. In some cases you may have to provide written submissions (or you may do this as part of your preparation).

Finalising the pleadings

Once the plaintiff has received the defence, they can file a reply. The reply should not raise any new issues. If the defendant brings a counterclaim, and the plaintiff’s reply and answer to the counterclaim raises new issues, the defendant can file a further reply to that answer.

Disclosure

For proceedings started by a claim, after the pleadings are finalised the parties should complete disclosure. Disclosure is the procedure to ensure that both parties are aware of and have access to the other party’s documentary evidence. Once disclosure is completed, the plaintiff will usually apply to have the matter set down for trial.

Summary judgment

Any time after a defence is filed, the plaintiff or defendant can apply for a summary judgement to resolve the matter without the need for a full trial. A very strong case is needed to get summary judgment. The court can grant summary judgment if the other party has no real prospect of succeeding on all or part of their claim or defence.

Progressing the case

The Court has a number of special procedures in place to supervise court matters, and the court rules provide ways to move a proceeding forward if you believe that the other party is stalling.

Correcting errors

You can amend court documents at any time before a trial date is requested to better present a case. After the trial date has been requested, the pleadings can only be amended with permission of the court (called “leave of the court”). It is always important to amend any defect in the pleadings well before you get to trial otherwise your case could fail at trial. If you are allowed to amend you might have to pay the other party’s costs.

Offers to settle

The parties can make settlement offers to try and resolve the case by agreement.

Setting down for trial

Once the parties are ready for trial (as specially defined in the rules), the parties can then take steps to have their matter set down for a civil trial date.

Trial

After a matter has been listed for trial, you will then need to prepare for and attend the trial.

After the trial

Enforcement

If you are successful you may need to enforce the money order or other (non-money) order. If you are not successful, you will need to respond to an enforcement warrant.

Appeal

If you are not successful, you may want to bring an appeal (depending on which court your matter was in) to either the Court of Appeal or the District Court.

Factsheet list

Litigation guardian – information for self-represented litigants in Queensland superior courts factsheet

What is a litigation guardian?

Commencing proceedings factsheets

Deciding to commence legal action

Drafting a Statement of Claim – tips and examples

Applications in the Queensland Courts – a short guide

Fee reductions in the Queensland Courts

Filing documents in the Queensland Courts

Serving court documents

Defence factsheet

Drafting a Defence – tips and examples

Finalising pleadings factsheet

Drafting an effective reply and answer

Managing and progressing cases factsheets

Court supervision of cases

Court proceedings – making progress

Applications in the Queensland Courts – a short guide

Videos

Video 1 – Starting a Court Case

Video 2 – Defending a Court Case

Video 3 – Disclosure and Proving Your Case

Video 4 – Attending Court Hearings

Video 5 – The Trial

by Ben Tuckett

Video 5 - The Trial

The trial is the final destination in court proceedings. It’s where the judge makes a decision on the merits of a case. Representing yourself at trial requires preparation and a thorough understanding of your case.

After the trial, the Court will hand down its decision. The Court may either order that you may want to seek advice about appealing or enforcing the decision. There can be serious consequences to not complying with a court order, e.g. contempt of court.

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by Ben Tuckett

Video 4 - Attending Court Hearings

There are two types of hearings before the Court In a civil court case. One is interlocutory hearings, which take place before the matter gets to trial. The trial is the second kind of hearing, and is where the matter is finally decided by a judge. At most hearings the Court will ask for submissions. Drafting a written submission is a great way of preparing for a hearing, and also of telling the Court your case.

Resources from this video

Drafting Submissions

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by Ben Tuckett