In tumultuous times such as fires, floods and pandemics (welcome to 2020!) it is not surprising that you are concerned to take steps that position you to be able to make decisions and give effect to transactions in circumstances where you may not be physically present and able to do so.
What is a Power of Attorney
One of the most common ways of doing this is to appoint an attorney by way of a general or enduring power of attorney which is a formal document giving another person the authority to make personal and/or financial decisions on your behalf.
When you appoint an attorney utilising this method you can have the appointment apply to any and all of your financial matters and express limitations (such as the type of matter, commencement and duration of the appointment) all within the POA.
A frequent use for a POA for financial matters is when you may be travelling overseas for a period of time and need a resident in Australia to execute documents on your behalf. It may be for a specific transaction, or more general in nature.
It is a very useful instrument and may even be used for sheer convenience amongst relatives and friends.
Statutory presumption of undue influence
In Queensland, it is essential that appointors and their attorneys are aware of the statutory presumption of undue influence that arises by virtue of section 87 of the Powers of Attorney Act 1998.
The Act specifies that:
The fact that a transaction is between a principal and 1 or more of the following:
(b) a relation, business associate or close friend of the attorney;
Interestingly, the presumption will apply even in circumstances where an attorney has been appointed, but is not a party to the transaction (ie did not sign documents pursuant to the attorney appointment). For example:
The son may have had no knowledge that the transaction was even taking place, however, the statutory presumption arises, not because the son took an active part in the transaction, but because he had authority under the POA to do so (even if not used).
The above scenario ultimately was considered in the matter of Birch v Birch Ors  QSC 289. The son successfully rebutted the statutory presumption and it is a useful decision in considering what elements will be considered to rebut the presumption.
Rebutting the Presumption
Relevant considerations going to rebut the statutory presumption are:
(a) Whether there was financial and or legal advice in respect of the presumption;
(b) Whether, in the absence of the POA the transaction would have been entered into anyway, or some other step taken to ensure or obtain the same outcome;
(c) Is the conduct historically consistent; and
(d) Actual evidence from witnesses as to pressure or influence (or lack thereof) employed by the attorney.
Balancing the convenience
It is important to bear the above in mind, when both making the appointment (as the attorney) or accepting the role pursuant to the POA. In circumstances where POA’s (particularly as to financial matters) are left open-ended for sheer convenience, consider whether there is a likelihood at some future date of a transaction that may not involve, but benefits, the attorney and whether such could result in unnecessary litigation putting either party to the cost of rebutting the statutory presumption.
That litigation may be at a third party’s instigation, such as a disappointed beneficiary under a Will.
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