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    01:27 PM See Kwang Guan (Practice Trainee, Drew & Napier LLC) and Ng Bin Hong (Practice Trainee, Lee & Lee)

    Clarifications on the Mental Capacity Act

        

    What is the approach to be taken under the Mental Capacity Act (“MCA”) when there is an interaction between a person’s mental impairment and the possibility that the person is under the undue influence of others? Should the court have regard to the actual circumstances that the person is in, or should it adopt a more theoretical analysis that overlooks those circumstances? In the seminal judgment of Re BKR [2015] SGCA 26, the Court of Appeal endorsed the former approach by holding that courts must take into account a person’s actual circumstances in assessing his mental capacity under the MCA. The Court also offered some valuable comments on the procedure and practice that should apply in MCA proceedings. 

    Background 

    Re BKR concerned an application made pursuant to the MCA for a declaration that the third respondent (“BKR”) was unable to make decisions as to her property and affairs because of an impairment of her mind, and for a consequential order that deputies be appointed to make all decisions relating to her property and affairs on her behalf. The application was made by the two appellants, who are BKR’s sisters, and was opposed by BKR herself as well as the first and second respondents, who are her youngest daughter and son-in-law respectively.

    The critical events leading to the application occurred from late October 2010 onwards, as a result of BKR’s irregular behaviour. This behaviour consisted of (a) setting up a trust (“Trust”) on terms and in circumstances that might be said to be questionable, (b) giving a succession of contradictory instructions to her bankers in relation to the transfer of her assets held in UBS and JP Morgan accounts to her DBS account, and (c) living with the first and second respondents in Hong Kong and cutting off contact with her other children and siblings despite their efforts to gain access to her.

    At trial, the parties agreed that the functioning of BKR’s mind was impaired in some way. However, they did not agree on the nature or extent of that impairment. The appellants took the position that BKR had dementia which prevented her from making decisions relating to her property and affairs. The respondents, on the other hand, claimed that BKR had a condition called Mild Cognitive Impairment which affected her memory but was not so pronounced as to deprive her of the capacity to make decisions.

    Decisions below

    At first instance, the District Court (“DC”) agreed with the appellants that BKR lacked decision-making capacity due to her extremely poor memory. In reaching its decision, the DC disagreed with the assessment of BKR’s medical experts that BKR was a well-functioning individual. The DC found that the clinical interviews conducted by those experts had not been rigorous and probing, and that their evidence had been less than objective because they were in sympathy with BKR. The DC also found that BKR was vulnerable to undue influence, and that the first respondent had in fact been influencing BKR to act against her best interests. For the foregoing reasons, the DC granted the appellants’ application and appointed them as deputies to make “all decisions” on BKR’s behalf “in relation to her property and affairs”. The respondents appealed against the DC’s decision.

    The High Court (“HC”) allowed the appeal on two main grounds. 

    First, the HC held that the DC had no jurisdiction to hear the application under the MCA. As MCA proceedings relate to “persons who lack capacity”, the court only has jurisdiction under the MCA if the substantial dispute revolves around the mental capacity of an individual or matters connected therewith. The court will not have such jurisdiction if the dispute concerns the vulnerability rather than the mental capacity of the individual. On the facts, the HC found that the substantial dispute between the parties did not centre on BKR’s mental capacity but rather on the appellants’ allegations that BKR was being subjected to undue influence and that access to her was prevented. Thus, the DC had no jurisdiction to entertain the MCA application.

    The HC also set aside the DC’s findings on undue influence because they were irrelevant to the issue of mental capacity. Owing to the language of section 4(1), the HC held that the only causal factor to be considered under the MCA is an impairment of the mind. Accordingly, undue influence cannot be considered as a contributing factor to BKR’s lack of capacity.

    Second, the HC found that the test for incapacity was not satisfied. The HC held that the DC had misapplied the principles enshrined in the MCA, in particular, that all practicable help must be given before a person is found to be lacking capacity (section 3(3)), and capacity should be assessed when a person is at his highest level of function and, as far as possible, within an optimum environment. In that connection, the DC had erred by according too much weight to BKR’s performance under prolonged cross-examination (where she could not perform at her best, since cross-examination is characterised by the lack of assistance, adversarial nature and interrogative form of dialogue) and too little weight to BKR’s performance in the clinical interviews with her medical experts which strongly suggested that she was able to make her own decisions. In the view of the HC, the DC’s criticisms against the clinical interviews were unfounded, and there was greater probative value in considering how BKR fared in the gentler, more facilitative environment of the clinical interviews. Accordingly, the HC found that BKR would be able to make her own decisions if practicable assistance were given. The appellants appealed against the HC’s decision.

    Appellate decision

    Reversing the HC’s decision, the Court of Appeal (“CA”) allowed the appellants’ application, subject to hearing the parties on several matters (as elaborated below).

    Law on Mental Capacity under the MCA

    The CA first set out the law on mental capacity. Following the terminology of the MCA, “P” is the person whose capacity to make decisions is under consideration. Under the MCA, P lacks capacity if he is “unable to make a decision for himself” in relation to a matter “because of an impairment of, or a disturbance in the functioning of, the mind or brain” (section 4(1)). Section 5(1) elaborates that P is “unable to make a decision for himself” if he is unable to (a) understand the information relevant to the decision, (b) retain that information, (c) use or weigh that information as part of the process of making the decision, or (d) communicate his decision by whatever means. Further, section 3 sets out several principles that are of overarching importance (see, for example, section 3(3) as outlined above).

    Endorsing the HC’s observations, the CA held that the test for lack of capacity in section 4(1) contains a functional component that P is “unable to make decision for himself” (as defined under section 5) and a clinical component that this inability is caused by an impairment of the mind. While the CA observed that it would require the assistance of expert evidence when addressing the clinical component, the CA stressed that it is ultimately up to the court to assess the functional component and decide whether P lacks the ability to make decisions within the meaning of section 5(1) of the MCA; expert evidence on this issue should not be given weight. The CA also stressed that there must be a causal connection between the inability to make decisions and the mental impairment.

    Jurisdiction under the MCA

    After setting out the law on mental capacity, the CA proceeded to consider its jurisdiction to hear the MCA application. At this juncture, it should be recalled that the courts below had approached the issue of an interaction between mental impairment and undue influence differently. 

    The CA distilled the differences into one fundamental question: In assessing P’s mental capacity, should the court have regard to the actual circumstances that P is in, or should it adopt a more theoretical analysis that overlooks those circumstances? After a careful consideration of the UK position (a useful exercise in light of the fact that our MCA was based substantially on the UK Mental Capacity Act 2005 (“UK MCA”)), the CA held that courts must take into account a person’s actual circumstances in assessing his mental capacity under the MCA.

    In reaching its decision, the CA had to refute three arguments in favour of a theoretical analysis. The first argument relied on section 3(3) of the MCA that P “is not to be treated as unable to make a decision unless all practicable steps to help him to do so have been taken without success”. In response, the CA stressed that section 3(3) speaks of “practicable” steps to help P in the sense that it directs the courts to look at sensible possibilities and not fanciful ones. It followed that if in P’s actual circumstances there exists some positive impediment to his receiving assistance, it cannot be said that P has capacity just because he might theoretically be able to make decisions in some other imaginary set of circumstances in which that assistance might be forthcoming. In other words, where P’s actual circumstances are such that there is little realistic prospect of him getting the assistance he needs, the court is not obliged to disregard those actual circumstances by reason of section 3(3).

    The second argument was based on the legislative history of the UK MCA where a conscious decision was taken not to extend the UK MCA to adults who are vulnerable to undue influence. In response, the CA clarified that, at best, what could be extracted from the legislative history of the UK MCA was the uncontroversial proposition that the statute was not designed to deal with cases in which P is vulnerable but not at all as a result of mental impairment. There was no indication that the UK MCA should not apply when P’s decision-making ability is affected by a combination of factors which include mental impairment.

    The third argument concerned the strength of the causative nexus that is required to be shown between P’s mental impairment and his inability to make decisions. This causal requirement is found in section 4(1), as P will be declared to lack capacity under the MCA only where he is unable to make decisions “because of” a mental impairment. After considering the English authority of York City Council v C and another [2014] 2 WLR 1, the CA held that the words “because of” suggest nothing more stringent than a “but for” connection. Those words do not suggest that there can be no other cause of P’s inability to make decisions besides mental impairment. 

    In that connection, the CA reversed the HC’s holding that there was no jurisdiction to hear the MCA application. Rejecting the substantial dispute formulation put forth by the HC, the CA held that it is only where there is no material question of any mental impairment causing the alleged mental incapacity that a court ought properly to find that it has no jurisdiction under the MCA. For the same reason, the CA also held that the HC had erred in setting aside the DC’s findings of undue influence.

    Issue of BKR’s capacity

    The CA then addressed the preliminary question of the weight that ought to be accorded to BKR’s performance under cross-examination or her clinical interviews. Although the CA agreed with the HC that cross-examination was a less-than-ideal environment in which to measure BKR’s mental capacity, the CA also agreed with the DC that the clinical interviews had not been sufficiently “rigorous” and “probing”. In the circumstances, the CA did not disregard either evidence.

    Based on its consideration of all the materials, the CA held that the test for incapacity was satisfied. While it was difficult to state with any certainty as to the identity of BKR’s mental impairment, it was clear that this amounted to “an impairment of, or a disturbance in the functioning of, the mind or brain” within the meaning of section 4(1) of the MCA. It was also clear that BKR’s mental impairment had caused (a) a significant decline in her memory, (b) a deterioration in her executive functions – in particular, the ability to understand and use information and to weigh countervailing considerations against one another, and (c) the emergence of paranoid and false beliefs that affected her actions. Thus, there was a strong basis for the conclusion that BKR lacked the ability to make the decisions to establish the Trust and to transfer her assets to DBS.

    The CA also found that there was a strong case for inferring that BKR was acting under the undue influence of the first and second respondents instead of her own volition, when she made those decisions. This was because BKR’s decisions (a) did not appear to bring any discernible benefit to herself, (b) occurred without any evident prompt or reason, (c) were made secretly with unusual urgency, and (d) were subject to inexplicable reversals. Moreover, the evidence strongly suggested that, if BKR were completely at liberty to make her own independent decision, BKR would not want to cut off access and would instead wish to interact with the appellants and her other children. 

    For the foregoing reasons, the CA found that BKR lacked capacity because of a combination of mental impairment and the circumstances in which she lived. In the light of that finding, the CA set aside BKR’s decisions to establish the Trust and to transfer her assets to DBS. The CA also ordered deputies to be appointed under the MCA, subject to hearing the parties on several matters including, inter alia, who should be appointed as her deputy or deputies and the precise scope of the deputyship. Further, the CA added that it might consider the appointment of an independent legal advisor accountable to the court and invited parties to make submissions on that point.

    Postscript on procedure and practice in MCA proceedings

    The CA concluded the judgment with some valuable comments on the procedure and practice that should apply in MCA proceedings. 

    First, the CA noted that it was not ideal to have BKR’s capacity assessed under cross-examination. In this regard, it would have been much better if an independent medical expert had examined her. 

    Second, the CA found that the evidence, and in particular the medical evidence, was not often helpful in addressing the central issues. Time and costs could have been saved had the evidence been adduced in a more targeted manner. 

    Third, the CA added that such MCA cases may be better dealt with if the court were to direct the inquiry, if need be, with an assessor. In MCA proceedings, a more inquisitorial and court-directed approach is sensible, since the interests of P are paramount. As noted by the CA, its role is a protective one and it should not shy away from taking control of MCA proceedings and directing parties on the evidence that it requires in order to reach its decision. This applies with greater force in the context of expert evidence, which can be very technical and at times difficult to grapple with, and which thus has great potential to distract the court from the key issues. Following the UK approach to expert evidence in such cases, the CA noted that, where P’s mental capacity is challenged and there is disagreement between parties as to the appointment of experts, P should be independently examined in consultation with his own doctor, with the court appointing the independent expert if parties are unable to agree. Other experts may be called to give evidence on what the independent expert has said, and such evidence may be tested through cross-examination including the concurrent giving of evidence. 

    For the foregoing reasons, the CA referred its recommendations to the Rules Committee “for further study and if thought fit, for implementation through the making of appropriate amendments to the Rules of Court”.

    Commentary

    Given that there are at least 50,000 mentally incapacitated individuals in Singapore and that the figures are expected to rise as a result of our ageing population, it is paramount that our jurisprudence on mental capacity is sufficiently robust and developed to deal with a projected surge in MCA applications. In this regard, this decision is not only timely but also instructive as to the approach to be taken when there is an interaction between mental impairment and undue influence. 

    The CA’s approach is characterised by its significant ruling that courts must take into account a person’s actual circumstances in assessing his mental capacity under the MCA. Unlike the HC’s approach, the corollary of the CA’s approach is that the proven or potential presence of undue influence is now relevant to the issue of mental capacity. Although this approach is not expressly stated in the wording of the MCA, it is undoubtedly correct for giving due regard to the idea that capacity under the MCA is a highly context-dependent enquiry. Moreover, the CA’s approach is to be welcomed for avoiding a potential lacuna in the law where the operation of the MCA is excluded just because P’s inability to make decisions is caused by a combination of factors which include mental impairment. 

    Another positive aspect of the CA’s approach is its clarification that, in assessing the clinical component of the test for incapacity, the exact identity of P’s mental impairment is not critical, so long as it amounts to “an impairment of, or a disturbance in the functioning of, the mind or brain” (section 4(1) of the MCA). In doing so, the CA rightly recognised that the focus of the clinical component is on whether P’s inability to make decisions is caused by an impairment of the mind as defined under section 4(1); medical uncertainty over the exact identity of P’s mental impairment will not prevent the court from finding a lack of capacity. 

    However, this clarification should not be understood as diminishing the importance of the clinical component. In most cases, the identity of P’s mental impairment will remain relevant and should, as much as possible, be ascertained. This is because, in many instances, knowledge of the condition plays a critical role in ascertaining the nature and scope of P’s functional incapacity and correspondingly the scope of the deputyship. 

    Finally, the CA’s dissatisfaction with the current adversarial mode of litigation in MCA proceedings and its suggestion for a more inquisitorial model is rather noteworthy. In this regard, the CA’s suggestion is sensible in view of the two main objectives of deputyship applications under the MCA. The first objective is to assess the nature and extent of P’s mental capacity. If P lacks capacity, the second objective is to assess the suitability of the applicant(s) to be appointed as P’s deputy or deputies. While the CA has provided ample reasons why an inquisitorial model is better at addressing the first objective than the adversarial model, it is clear that an inquisitorial model is also better at addressing the second objective. This is because deputyship applications usually involve P’s immediate family members who might be less prepared to contest the application in an adversarial setting. In this context, it is unsurprising to see only 25 contested applications out of the 843 deputyship applications filed from March 2010 to October 2013. Out of those 25 contested applications, it is notable that only 9 applications were fully contested and the other 16 applications were resolved through court-initiated settlements, despite the lack of provision in the Family Justice Rules for resolving such applications through mediated settlements. Such statistics go some way to support the argument that, in MCA proceedings, a departure from an adversarial mode of litigation and a shift towards a more inquisitorial model will better address the two objectives of deputyship applications.          

    * This entry may be cited as See Kwang Guan and Ng Bin Hong, "Clarifications on the Mental Capacity Act", Singapore Law Blog (8 June 2015) (http://www.singaporelawblog.sg/blog/article/115)

    ** A PDF version of this entry may be downloaded here

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