When determining whether an individual with a mental disability is unable to make reasonable judgments in respect of matters relating to their estate, the Guardianship and Administration Act 1990 (WA) ("GA Act") sets out specific criteria that must be satisfied.
This blog post discusses these factors, drawing from the case Re RK [2021] WASAT 13, and examines how they can be applied in practice.
1. The Mental Disability Requirement
Section 64(1)(a) of the GA Act requires that a person be "unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all or any part of his estate".
This means that the person must have a mental disability, and their inability to make reasonable judgments must arise because of that mental disability.
In Re RK, the Tribunal found that RK had a mental disability, and that this was the cause of his inability to make reasonable judgments in respect of his estate.
2. Subjective and Objective Tests
The application of Section 64(1)(a) involves both subjective and objective tests.
The subjective test requires assessing the person's ability to make reasonable judgments in relation to their actual estate.
The objective test, on the other hand, considers whether the person has the ability to engage in the mental reasoning required to make such judgments.
3. Factors Affecting a Person's Ability to Make Reasonable Judgments
A person's ability to make reasonable judgments in respect of their estate may depend on a variety of factors, such as their health and mental health.
Ultimately, an individual must have the intellectual ability necessary to make decisions related to their estate.
This includes the ability to:
- Understand the need for and sources of income
- Comprehend the value of income relative to expenditures
- Identify and calculate necessary expenditures for daily living and long-term financial objectives
- Devise a budget to live within their means
- Assess the financial implications of various decisions and contracts
- Organize their affairs to meet debts as they fall due
- Identify and implement problem-solving strategies for resolving unexpected financial issues
4. Estate Definition
In the context of the GA Act, a person's "estate" refers to the aggregate of their property, assets, and liabilities.
This encompasses the entirety of their real and personal property and all financial affairs.
5. Causation
The phrase "by reason of" in Section 64(1)(a) of the GA Act implies a relationship of cause and effect between a mental disability and a person's inability to make reasonable judgments in respect of their estate.
In Re RK, the Tribunal found that RK's mental disability was the cause of his inability to make reasonable judgments, although he was still able to make occasional decisions regarding simple discretionary expenditure.
Key take-away
When assessing whether a person with a mental disability is unable to make reasonable judgments in respect of their estate, it is crucial to consider the relevant factors as set out in the GA Act and case law such as Re RK.