Equity Law: Potential Claims and Liabilities for DPA, 2017

This report provides legal advice to Donna Paulsen & Associates (DPA), addressing potential claims and liabilities in equity law. The report examines two primary issues: the overcharging of equipment by Advisory Technology Supplies Pty Ltd (ATS) and the misuse of a power of attorney by Daniel Paulson, Donna's uncle, in the sale of her mother Edith's property. The letter of advice details the claims DPA has against ATS for breach of fiduciary obligation and against Daniel and his son Harold for the property sale. It explores potential remedies, including compensation and constructive trust, and references relevant legislation like the Power of Attorney Act 1998. The memorandum further analyzes the legal issues, identifying applicable laws such as fiduciary obligation and trust law, and providing legal analysis and application of the law to both scenarios. The report concludes by emphasizing the importance of adhering to legal obligations and the potential outcomes for DPA.

EQUITY

TABLE OF CONTENTS
LETTER OF ADVICE....................................................................................................................1
MEMORANDUM...........................................................................................................................3

LETTER OF ADVICE
A legal notice in which actions which needs to take against particular situation incurred
are provided to client is known as letter of advice. With the help of this specific document client
able to known that which laws can be applied on the occurred condition along with the actions.
For the present scenario client is Donna and Donna Paulsen & Associates to whom letter of
advice written which is stated below:
Donna Paulson & Associates (DPA)
Donna Paulson
123 Wall Street, Qld, 4000.
Date: 30th August 2017
Subject: Potential claims and liabilities in equity
The present letter is prepared for Donna in order to give advice about the property which is sold
and renovated by his uncle Daniel after misusing power of attorney. Along with this, letter gives
suggestions to DPA behind taking triple cost of equipments by ATS.
Under this case Donna Paulson has claim for selling house of her mother Edith against to Daniel
and his son Harold who is third party. In addition to this, DPA has claim against to the LLBS
and Jessica who is worker of ATS behind imposing triple cost of equipment1.
Prospect of success in the present case is that, there is possibility of getting suffered amount
from the against party up to the greater extent. Moreover, as per the acts and laws Daniel and
Jessica must compensate to suffered party.
According to the fiduciary obligation, relief available with DPA is in terms of compensation
which will be fulfilled by Jessica. Apart from this, with Donna relief of constructive trust is
available as per the POAA s73 which will be given by Harold. Under this also compensatory
1 McCullagh, Richard. "Guardianship: NCAT guardianship division's reviews of enduring
powers of attorney." LSJ: Law Society of NSW Journal. 28 (2016): 86.
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damages remedy is there with both the parties2.
In the present case, Edith Paulson provided enduring power of attorney to her brother Daniel
Paulson. Due to using second kind of the power of attorney Daniel has authority to take both
financial and personal decisions in behalf of her sister Edith. Moreover, for making decisions of
selling property it is mandatory that trustee died as per the act of enduring power of attorney.
In the mentioned case study, Daniel sold property or home of Edith on 30 April 2010 when she
is still living in the nursing home. Along with this, as per the Edith's valid will her daughter
Donna was supposed executor as well as sole beneficiary of her property. According to the
power of attorney act 1998 s73 Daniel has not legal rights to sale Edith's property and distribute
sales consideration with his son Harold Paulson. Therefore, Donna has right to sue upon Daniel
where he sold property3. In addition to this, Donna has right to sue upon Harold also because he
accepted the receipt after knowing all the situation and scenario.
Along with this, she has evidence also that house of Edith Paulson will be of Donna when her
mother died. The reason is that, Daniel uses Edith's property not only up to his level but sales
consideration distributed with his some Harold as well. It is totally unfavourable according to
the law of power of attorney act 1998 s73. Remedy available with Donna is that, she can claim
upon Daniel and Harold for returning property of her mother4. In addition to this, she has the
constructive trust as well because in this issue there is third party Harold who taken property of
Edith Paulson. On the other side, Donna has not right to take whole property which was worth
of $500,000 because Harold taken care and renovated that house. Due to using his skills and
2 Powers of Attorney Act 1998, 2017. [Pdf]. Available through:
<https://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PowersofAttA98.pdf>
[Accessed on 30th August 2017].
3 The Nature Of Property In Equity And Trusts, 2016. Available through:
<http://www.alastairhudson.com/trustslaw/natureofproperty.pdf> [Accessed on 30th
August 2017].
4 Park, So-Jung, Heather Astell, and S. Sankaran. "Prevalence of Enduring Power of
Attorney and barriers towards it in community geriatric population in Counties Manukau
Health." In Australasian Journal on Ageing. 35. (2016): 56-56.
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attributes Harold has right to take contribution from Donna in terms of amount. Moreover, the
court would be ordered for constructive trust as compared to equitable compensation.
Another scenario in the present case study is related to the financial on which statutory
obligations are applied. In order to purchase equipments for Donna Paulsen & Associates
company, Louis who is an employee of the DPA who approached up to the Advisory
Technology Supplies Pty Ltd (ATS) firm. In this ATS taken high price of the equipment which
is worth of $750,000. When Donna analysed about the mentioned equipment then she found
that market value is only $250,000. As per the scenario Louis breached fiduciary obligation
where he has to compensate damages suffered by DPA according to the act and laws in legal
manner. Further, he misused his senior designation for the sake of generating high amount of
profit5. Hence, it can be suggested to DPA firm that it should sue against Jessica Pearson
because ATS wound up in terms of imposing triple cost of the equipment as compared to real
market value. In addition to this, Donna should claim upon LLBS also because it is also
involved in this case and receive money of equipment purchasing. In this condition, ATS has to
pay extra cost taken from Loius which is worth of $500,000. Further, documents will be
required which are like employment contract, invoice of equipment bought along with date of
purchasing.
Rachel Zane
Your Supervising partner
MEMORANDUM
A way of communication in form of written where informal agreements, advices after
considering legal laws, informative matters etc. included is identified as memorandum. It is one
of the formal written paper and used within business entity in order to circulate information,
situations and advices of the firm. In the present study supervising partner Rachel Zane write
5 Fatoullah, Ronald A., Elizabeth Forspan, Jeffrey P. Gorak, and Sidney Kess. "The Critical
Importance of a Power of Attorney for Incapacitated Individuals."The CPA Journal. 87.
no. 5 (2017): 18.
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memorandum to Donna Paulson who is owner of DPA firm. Moreover, the memo for Donna is
presented below:
To: Donna Paulson
CC: Donna Paulsen & Associates (DNA)
From: Rachel Zane
Date: 30th August 2017
Subject: Legal issues in the equity applicable and their solutions
Identification of facts, issues and parties involved
Within workplace of DPA company there are basically two problems incurred which are
relating to the financial as well as personal. These both issues create huge loss for the owner
Edith Paulson up to the greater extent. From the study first issue identified is that, ATS imposed
huge amount or costs of the purchased equipment on DPA company. Price taken from DPA by
ATS is worth of $750,000 whereas actual market value is only $250,000. Parties which
involved in this particular problem are Donna Paulsen & Associates and Advisory Technology
Supplies Pty Ltd.
Another issue is regarding to the sale of property without taking permission of the owner who
shifted power to the person. As per this, Edith who is owner of the business DPA gives power
of attorney to her brother Daniel in order to take decisions on behalf of her6. Daniel misuses
power which is given to his where he sold house of Edith worth of $500,000. After that whole
sales consideration is to be distribute with his son Harold equally and not gives any amount to
Edith's daughter Donna. Moreover, in this issue generally two parties included which are like
Donna Paulson and Daniel Paulson.
Identification of suitable or relevant law
When considering to the first issue which is relating to the costing of purchased equipments
then it is one of the fiduciary obligation. The reason behind this is that ATS imposed more
amount on the equipment as compared to its market value which is unfavourable. As per the
6 McMillan, Jen. "Risk: Making enduring powers of attorney: Practical tips."LSJ: Law
Society of NSW Journal. 35 (2017): 80.
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laws and regulations any seller has not right to impose triple cost of product on buyer at the
time of selling. Under this, equity law is highly suitable where a person cannot use any kind of
techniques which not goes in favour of the another party7. This act is applicable on those issues
which are done by parties after knowing that condition. Moreover, appropriate law which can
be used for resolving this issue and taking compensation from ATS is equitable regulation in
legal manner.
In the second arisen issue between Donna and Daniel Paulson power of attorney is used in
improper ways. Along with this financial problem is also faced by Donna because her uncle not
giving any amount of her mother's property. In this trust law is highly appropriate along with
this it is fiduciary obligation. The reason due to which it comes under fiduciary is that, Edith
placed the utmost faith as well as confidence on Daniel in order to manage her business DPA
and protect her house as well8. Along with this, Daniel not completed all the obligations given
by Edith in an effective way. Further, under the trust law power of attorney act 1998 section
88(2) comes into consideration in which the suffered party can easily sue upon another party.
When one party provided enduring power of attorney to another then section 88(2) is used by
the court. Moreover, by considering this specific act issue has been resolved in an effectual
direction. Along with this, equitable remedies are available with the suffered party where she
has rights to take all the property which is used by Daniel and Harold Paulson.
Legal analysis and application of law
It has been analysed that, the above arisen issue among DPA as well as ATS is considered as
legal due to imposing higher amount which is totally against to the laws. Due to this condition
law of fiduciary obligation is applicable on the issue incurred within working environment. The
equity law applied on the issue where ATS taken huge sum of money from DPA which lead to
decline total liquid position of Donna's business9. As it applies on the condition then against
party i.e. ATS has to compensation of exceeded cost imposed on DPA. At the time of law
7 Hudson, Alastair. Equity and trusts. Routledge. (2012).
8 Gardner, Simon. An introduction to the law of trusts. OUP Oxford. (2011).
9 Klein, Mariette L., and Constance L. Coogle. "Living Wills, Durable Power of Attorney,
and Advance Directives." The Encyclopedia of Adulthood and Aging. (2016).
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application it is necessary that both the parties agreed on that act. For the fiduciary obligation
strict regulations and rules supplement which are mandatory to consider both parties. In case
one party abide the law for making solution of the issue and another neglect or refuse then this
legal obligation cannot be applied on the stated scenario. Moreover, it will be applicable when
DPA and ATS both ready to abide on the fiduciary obligation in legal manner.
Apart from this, trust law is proper for resolving second issue which is regarded to misusing
power of attorney. This law also has wide range of rules and remedies which are compulsory to
use at the time of application on issue. Moreover, all the duties as well as powers of trustee are
also needed to fulfilled and completed10. In the present scenario, trustee is Daniel Paulson to
whom enduring power is given by the beneficiary party i.e. Edith Paulson. For applying this
law, both the parties should have adequate knowledge about the rules involved in it. In the
present condition or issue, Daniel is under the breach of POAA s88(2) because he uses personal
property of Edith Paulson for the purposes of selling. As per the act, in the enduring power of
attorney trustee has not right to use personal property like home, farm house etc. of the
beneficiary party. In addition to this, because of breaking trust of his sister Daniel comes under
the breach of fiduciary obligation. Moreover, in this kind of system any type of legal contract is
not between two parties which is another reason of breaching fiduciary obligation. Donna has
equitable remedies to claim upon Daniel for returning amount on which house of Edith's sold by
him. The reason is that will is written by Edith of her property on the name of her daughter
Donna.
Resolution of legal issues
One of the significant part of any laws and legal problems is resolution in which issues are
resolved. In other words, conclusion of the analysis is made which supports to suffered party in
terms of taking appropriate decisions. In the present study, after considering equity and trust
law as well as power of attorney act the above mentioned both issues resolved. Further,
resolution of the legal problems is stated below:
According to the equity law, the DPA company has remedy to sue on ATS firm where Donna
can take sum of money which is taken more. Along with this, ATS must pay extra cost of
10 Tilse, and et.al. "Enduring powers of attorney: promoting attorneys' accountability as
substitute decision makers." Australasian journal on ageing. 33. no. 3 (2014): 193-197.
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equipment which is worth of $500,000 to the suffered party11. It can be resolved from the
analysis and application of equity law, ATS is liable in order to fulfil damages or losses which
are generated in workplace of DPA. In case the against party refuses to pay $500,000 extra cost
imposed then remedy is available with DPA to claim on it.
As per the power of attorney act 1998 and trust law, Daniel Paulson is liable to compensate
certain part of Edith's property or house to Donna12. The cause is that, will of Edith's home or
property is written for her daughter Donna and sold by Daniel without taking permission from
her. In addition to this, Daniel distributed sales consideration of sold house with his son Harold
Paulson equally. On the basis of power of attorney act 1998 section 73, Daniel has not right and
obligations to sale property of beneficiary. The reason for applying a73 is that, situation of
conflicts arisen between two parties which include Donna and Daniel. Further, the solution will
go in favour of Donna where trustee is liable to compensate losses suffered by her.
11 Pettit, Philip H. Equity and the Law of Trusts. Oxford University Press. (2012).
12 Power of attorney, 2017. [Online]. Available through: <https://www.qld.gov.au/law/legal-mediation-and-
justice-of-the-peace/power-of-attorney-and-making-decisions-for-others/power-of-attorney> [Accessed on
30th August 2017].
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