Re TQR

• Jurisdiction: Singapore
• Judge: Colin Tan
• Judgment Date: 04 August 2016
• Neutral Citation: [2016] SGFC 98
• Hearing Date: 04 August 2016
• Citation: [2016] SGFC 98
• Published date: 06 September 2016
• Court: Family Court (Singapore)
• Docket Number: Originating Summons No 420 of 2014
• Plaintiff Counsel: Chong Yue-En (M/s Mary Ong & Company)
• Subject Matter: Mental Capacity Act
• Year: 2016

District Judge Colin Tan:

This was a case involving the appointment of Deputies for a person (“P”) who lacked mental capacity. One of the more difficult issues for consideration in this case was whether the Deputies ought to be given powers to make investment decisions in respect of P’s assets and, if so, the extent of such powers.

In reaching a decision on this matter, I was fortunate to have the assistance of detailed research and submissions by the Applicant’s Counsel.

The starting point was section 24(9)(b) of the Mental Capacity Act (“MCA”) which permits Deputies to be given powers of investment in respect of P’s property.

The fact that section 24(9)(b) of the MCA provides that Deputies “may” be given such powers and the fact that section 20(4)(b) of the MCA provides that “the powers conferred on a deputy should be as limited in scope and duration as is reasonably practicable in the circumstances” means that powers of investment should not be routinely granted to Deputies but should only be granted when necessary and appropriate in the circumstances of the case.

Two key principles set out in the MCA which were particularly relevant to the issue of investment decisions were those set out in sections 3(4) and (5).

Section 3(4) of the MCA states:

“A person is not to be treated as unable to make a decision merely because he makes an unwise decision.”

Section 3(5) of the MCA states:

“An act done, or a decision made, under this Act for or on behalf of a person who lacks capacity must be done, or made, in his best interests.”

If a person has mental capacity, he is free to make any investment decision he wishes, and this remains the case regardless of whether such an investment decision is or is not in his best interests.

On the other hand, once a person loses mental capacity, a Deputy who makes an investment decision for him does not have the luxury of making unwise decisions but is instead required to make decisions that are in the incapacitated person’s best interests.

On the issue of determining what is in an incapacitated person’s best interests, section 6(6) of the MCA states:

“Where the determination relates to the disposition or settlement of the person’s property, he must be motivated by a desire to ensure, so far as is reasonably practicable, that the person’s property is preserved for application towards the costs of the person’s maintenance during his life.”

Section 6(7) of the MCA states: “(7) He must consider, so far as is reasonably ascertainable — (a) the person’s past and present wishes and feelings (and, in particular, any relevant written statement made by him when he had capacity); (b) the beliefs and values that would be likely to influence his decision if he had capacity; and (c) the other factors that he would be likely to consider if he were able to do so.”

Based on the above, it can be seen that while a Deputy making an investment decision for an incapacitated person must consider what the incapacitated person would have done in the same circumstances, the Deputy has to consider other factors as well and cannot make a decision on the sole ground that the incapacitated person would have done the same if he had mental capacity.

For example, if the incapacitated person was a reckless risk-taker, he may have, if he had mental capacity, made an investment decision to risk virtually all of his assets on some high risk investment with a potentially high yield and knowing full well that if the investment did not turn out well, he might end up losing almost all of his assets.

While many of us might classify such a decision as unwise, there is nothing to stop such a person from making this decision as it would be solely his right to decide what to do with his assets.

However, once such a person loses mental capacity, the entire situation changes. Even though he could, and would, have made such a decision himself if he had mental capacity, a Deputy does not have the same right to make such a decision.

Although a person, if he had mental capacity, would have every right to disregard his own best interests and to take risks with his assets, a Deputy cannot do so. Instead, a Deputy must not only consider what the incapacitated person would have done but, more importantly, whether the proposed course of action is in the incapacitated person’s best interests.

A decision which is not in the incapacitated person’s best interests cannot be taken by a Deputy even though the incapacitated person may well have made such a decision himself if he had mental capacity.

Likewise, if a person has mental capacity, he is fully entitled to disregard the issue of preservation of his assets when making decisions on his assets. However, a Deputy...