Publications - General
Who says I can't decide? What is capacity and how does it affect a person's ability to make decisions about themself?
December 2018
Snapshot
The law presumes that every adult has the ability to make decisions about his or her life. These decisions include everything from how you would like your property and assets to be dealt with in the event of your death, whether or not you agree to undergo a certain medical procedure, and how you use and manage your finances on a daily basis, to where you live, what activities you participate in, and even what you eat and wear.
Sometimes, however, our ability to make certain decisions or act in a particular way is affected by an impairment. This might be a physical ailment (such as eyesight or hearing problems) or a language barrier (for example where English is not your first language or you have difficulties reading and writing) which impairs our ability to communicate with others, or it could be a cognitive problem (such as dementia, an acquired brain injury or a genetic condition). The impairment might only be temporary (for example a urinary tract infection or the side effect of a medication), or permanent (such as in the case of progressive dementia illnesses including Alzheimer’s disease).
Consequently, it is important to understand and recognise when a person may be suffering from an impairment that might mean that they do not have the capacity to make significant life decisions (such as whether to change their will or sell their house) before those decisions are made.
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This article explores some of the factors that need to be taken into consideration when determining whether or not a person's decision-making ability has been diminished such that they are unable to legally making a particular decision.
No single legal test
The term “capacity” does not have a definitive meaning, nor is there a single legal test to determine when a person’s abilities have been diminished such that the lack competency to make a certain decision or undertake a particular act.
Capacity is task specific, and so the relevant legal test that will apply will depend on the decision or act in question. As explained by the High Court in the case of Gibbon v Wright (1954) 91 CLR 423 and more recently discussed in the NSW Court of Appeal in the matter of Guthrie v Spence [2009] NSWCA 369, it is possible for a person to have the capacity to execute a will but not to consent to a particular kind of medical treatment. This is because the skills needed to make each of these decisions are different.
The warning signs
Recently, Justice Kunc of the Supreme Court of NSW added a postscript to a judgment setting out some “rules of thumb” about capacity for solicitors to consider when taking instructions from clients. Specifically, His Honour noted that if the person:
While the matter in question (Ryan v Dalton [2017] NSWSC 1007) was about the making of a will, Justice Kunc’s observations are equally applicable to other types of transactions, and to other professionals who take instructions or seek consent from those that they assist including but not limited to accountants, financial planners, doctors and other medical professionals, real estate agents, and bankers.
Things to consider when red flags are raised
So, what questions will your solicitor (or other professional) ask themselves if any of these warning signs are true about you?
Barrister Therese Catazariti of Thirteen Wentworth Selbourne Chambers has suggested that professionals ask themselves each of the following:
How does this affect me?
Impairments can happen to anyone at any time, and it may be frightening to think that you or a family member may find themselves in a situation where their capacity is limited in some way. It is important to understand, however, that the purpose of your solicitor coming to an understanding about those limitations is so that they, and others, can support you through the decision-making process and empower you to remain involved in your own affairs as far as is possible.
Where can I find more information?
The NSW Government Department of Justice has developed a capacity toolkit which is available at https://www.justice.nsw.gov.au/diversityservices/Pages/divserv/ds_capacity_tool/ds_capacity_tool.aspx. While the toolkit is designed for people who work for or with, provides services to, care for or support people who may have reduced decision-making capacity, it nevertheless provides some useful information about general capacity principles.
If we can assist you in relation to this or other legal matters, please contact us.
The law presumes that every adult has the ability to make decisions about his or her life. These decisions include everything from how you would like your property and assets to be dealt with in the event of your death, whether or not you agree to undergo a certain medical procedure, and how you use and manage your finances on a daily basis, to where you live, what activities you participate in, and even what you eat and wear.
Sometimes, however, our ability to make certain decisions or act in a particular way is affected by an impairment. This might be a physical ailment (such as eyesight or hearing problems) or a language barrier (for example where English is not your first language or you have difficulties reading and writing) which impairs our ability to communicate with others, or it could be a cognitive problem (such as dementia, an acquired brain injury or a genetic condition). The impairment might only be temporary (for example a urinary tract infection or the side effect of a medication), or permanent (such as in the case of progressive dementia illnesses including Alzheimer’s disease).
Consequently, it is important to understand and recognise when a person may be suffering from an impairment that might mean that they do not have the capacity to make significant life decisions (such as whether to change their will or sell their house) before those decisions are made.
___________________________________________________________________________________________________________________________________________
This article explores some of the factors that need to be taken into consideration when determining whether or not a person's decision-making ability has been diminished such that they are unable to legally making a particular decision.
No single legal test
The term “capacity” does not have a definitive meaning, nor is there a single legal test to determine when a person’s abilities have been diminished such that the lack competency to make a certain decision or undertake a particular act.
Capacity is task specific, and so the relevant legal test that will apply will depend on the decision or act in question. As explained by the High Court in the case of Gibbon v Wright (1954) 91 CLR 423 and more recently discussed in the NSW Court of Appeal in the matter of Guthrie v Spence [2009] NSWCA 369, it is possible for a person to have the capacity to execute a will but not to consent to a particular kind of medical treatment. This is because the skills needed to make each of these decisions are different.
The warning signs
Recently, Justice Kunc of the Supreme Court of NSW added a postscript to a judgment setting out some “rules of thumb” about capacity for solicitors to consider when taking instructions from clients. Specifically, His Honour noted that if the person:
- is over the age of 70;
- is being care for by someone;
- resides in a nursing home or other care facility; or
- if there is any other fact that might raise a possible concern about that person’s capacity,
While the matter in question (Ryan v Dalton [2017] NSWSC 1007) was about the making of a will, Justice Kunc’s observations are equally applicable to other types of transactions, and to other professionals who take instructions or seek consent from those that they assist including but not limited to accountants, financial planners, doctors and other medical professionals, real estate agents, and bankers.
Things to consider when red flags are raised
So, what questions will your solicitor (or other professional) ask themselves if any of these warning signs are true about you?
Barrister Therese Catazariti of Thirteen Wentworth Selbourne Chambers has suggested that professionals ask themselves each of the following:
- What is the transaction or act?
- What are the steps involved in undertaking that transaction or act?
- What are the issues in each step of the transaction?
- What are the relevant facts for each step of the transaction?
- What options or choices will the person have to make for each step of the transaction, and what will be the consequences of those options or choices?
- Can the person actually understand each of these steps and any implications flowing from those discrete acts (as compared to merely appearing to have an understanding)?
- What do you (the professional) already know about the person (this includes the warning signs set out above).
How does this affect me?
Impairments can happen to anyone at any time, and it may be frightening to think that you or a family member may find themselves in a situation where their capacity is limited in some way. It is important to understand, however, that the purpose of your solicitor coming to an understanding about those limitations is so that they, and others, can support you through the decision-making process and empower you to remain involved in your own affairs as far as is possible.
Where can I find more information?
The NSW Government Department of Justice has developed a capacity toolkit which is available at https://www.justice.nsw.gov.au/diversityservices/Pages/divserv/ds_capacity_tool/ds_capacity_tool.aspx. While the toolkit is designed for people who work for or with, provides services to, care for or support people who may have reduced decision-making capacity, it nevertheless provides some useful information about general capacity principles.
If we can assist you in relation to this or other legal matters, please contact us.
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Sarah Toomey Westcott
Senior Associate Bradfield & Scott Lawyers Level 1, 175 Macquarie Street Sydney NSW 2000 Telephone: 9233 7299 Email: swestcott@bradscott.com.au |
John Graves
Principal Bradfield & Scott Lawyers Level 1, 175 Macquarie Street Sydney NSW 2000 Telephone: 9233 7299 Email: jgraves@bradscott.com.au |
