Defining Capacity 4A: Important Concepts of Capacity 4B: PPPR Act - Legal Tests 4C: MCA - Legal Tests Recommendation for a Single Test for Capacity

4B: PPPR ACT – LEGAL TESTS

  1. As with the MCA, a finding of impairment of capacity under the PPPR Act is fundamental to any resulting intervention that may be made on the person’s behalf, such as a court order or the activation of an EPOA.556
    The question of capacity to make the decision that is the subject of an application (under the Act) is a threshold question that must be considered in every case; because jurisdiction to make any order ... depends on it.
  2. In general, a person lacks capacity if they cannot understand the nature and foresee the consequences of decisions, or are unable to communicate them. However, there are four subtly different legal tests for incapacity in the PPPR Act, depending on the kind of substitute decision-maker appointed, and on whether care and welfare, or property decisions, are involved. Nevertheless, the different legal tests in the PPPR Act follow a common functional approach and in this respect are similar to the single legal test in the MCA, and codify the prior common law (case law).557

  3. The key difference between the tests in the PPPR Act and the MCA is that there is no disability precondition in the PPPR Act. Under the MCA, the inability to make a decision (the functional test) must have a causal link to “an impairment of, or a disturbance in the functioning of, the mind or brain” (the diagnostic test).558 There is no equivalent in the PPPR Act.
Four legal tests
  1. The four threshold tests in the PPPR Act and the corresponding interventions are as follows:
  1. “partly” lacks capacity: for making a personal order and appointing a property manager;559
  2. “wholly” lacks capacity: for appointing a welfare guardian;560
  3. “not wholly competent”: for activating a property-related EPOA; 561 and
  4. “lacks the capacity”: for activating a care and welfare-related EPOA.562
Test no. 1: “partly” lacks capacity – personal order
  1. Section 6 provides the foundation of the jurisdiction to make personal care and welfare orders. This jurisdiction is dependent on a finding that the “subject person” either:
    Lacks wholly or partly the capacity to understand the nature and foresee the consequences of decisions in respect of matters relating to his or her personal care and welfare; or

    Has the capacity to understand the nature and to foresee the consequences of such decisions but wholly lacks the capacity to communicate decisions in respect of such matters.

556 KR v MR (2004) 2 NZLR 847 at [25]. Also reported as X v Y (Mental Health: Sterilisation) [2004] 23 FRNZ 475.

557 The English cases that developed the functional test were mainly concerned with capacity to consent to or refuse medical treatment. For example, St George’s Healthcare NHS Trust v S [1998] 3 All ER 673, where a competent woman’s refusal of a Caesarean section in which the baby would die was overridden and carried out but was subsequently held to be unlawful, affirming the right to bodily integrity. See also Re C (Adult: Refusal of Treatment) [1994] 1 All ER 819, an influential case for the “use or weigh” criteria in the MCA test, where Thorpe J at 822 described the test as follows: (1) Can the patient take in and retain treatment information? (2) Does he believe it? (3) Can he weigh that information, balancing risks and needs?” Thorpe J referred to the developing test in Law Commission Mentally Handicapped Adults and Decision-making Consultation paper No 129 (HMSO, London, 1992) at [2.20].

558 Mental Capacity Act 2005, s 2(1), discussed below.

559 Protection of Personal and Property Rights Act 1988, s 6: personal order, s 10; order for the administration of property, s 11; and order for the appointment of a property manager, (“wholly or partly”), s 25 (2)(b).

560 Protection of Personal and Property Rights Act 1988, ss 6 and 12.

561 Protection of Personal and Property Rights Act 1988, s 94(1).

562 Protection of Personal and Property Rights Act 1988, s 94(2).

  1. Whether the person is partly or wholly incapable of managing their affairs is relevant to the kind of orders the court can make.563 A person need only partly lack capacity for the court to make a personal order, such as an order for medical treatment, provision of services or living arrangements under s 10, or a low-level order for the administration of property under s 11. Personal orders of this kind are frequently used by the Family Court as a fall-back order where the person does not met the threshold of “wholly” lacking capacity for the appointment of a welfare guardian. This reflects the primary objective of the Act, which is to impose the least restrictive intervention tailored to the person’s specific needs.564

  2. The problem lies in understanding what the legal test of “partly” lacking capacity actually means. Applying a decision-specific approach, partial lack of capacity suggests something less than incapacity for that specific decision. Alternatively, it could suggest that a person lacks capacity in respect of the decision regarding which the court is going to make an order and not other decisions. However, rather confusingly, section 6 refers to partly lacking capacity in respect of “decisions” in general and not in a specific sense.565

  3. Either way, with such an apparently low legal threshold for incapacity, significant decisions can be made regarding a person’s medical treatment or living arrangements, under this test.
Test no. 2: “wholly” lacks capacity – welfare guardian
  1. For the appointment of a welfare guardian, both ss 6 and 12 apply. In addition to the test set out in s 6, quoted above, for the appointment of a welfare guardian under s 12, the person must “wholly lack capacity”, the highest threshold in the Act. The Court must be satisfied that:566
  1. the person ... wholly lacks the capacity to make or communicate decisions relating to any particular aspect(s) of the personal care and welfare of that person; and

  2. the appointment of a welfare guardian ... is the only satisfactory way to ensure the appropriate decisions are made.... [emphasis added].
  1. Although “wholly” is a much more stringent threshold than simply “lacks” or “partly lacks” capacity, it has not been interpreted by the Court to mean that the threshold is crossed only where the person is totally incapable of making decisions at all, for example, where a person has advanced dementia or is in a persistent vegetative state. If a person has limited capacity to make some decisions but has no capacity to make others, it is sufficient that the person “wholly’” lacks the capacity in respect of “particular aspect or aspects” of their care and welfare over which decisions will be transferred.567 The notion that capacity is decision-specific is, however, undermined where Court orders are made in respect of “all aspects” of a person’s care and welfare, effectively making the welfare guardian a global decision-maker for a wide range of decisions.568

563 The Family Court can also choose not to make an order and instead make recommendations.

564 Protection of Personal and Property Rights Act 1988, s 8(1). The Family Court only has power to make an order to provide medical treatment (PPPR Act, s 10(1)f)); not to withhold or withdraw it; such applications for withdrawal or withholding treatment which would require an application to the High Court under the parens patriae jurisdiction which is recognised in the PPPR Act, s 114.

565 In Re L [2001] NZFLR 310, the threshold “partly” lacking capacity was interpreted to include a woman whose capacity fluctuated with the state of her mental health due to psychotic episodes in which she had impaired mental functioning. Such an interpretation is contrary to the decision specific nature of capacity and appears more focussed on a status approach in managing people with mental disabilities whose capacity for decision-making may fluctuate.

566 Protection of Personal and Property Rights Act 1988, s 12(2).

567 Re G [1994] NZFLR 445. See also G Rossiter “Capacity Issues under the PPPRA” (2005) NZLJ 204. There has been little case law on the meaning of “wholly” in the 20 years since the initial decisions after the enactment of the PPPR Act in 1988. The High Court in KR v MR (above, n 556) considered this issue. See also, R v R (2010) Fam-054-000472, where Judge Somerville held that a welfare guardian should be appointed for person with brain injuries. The order was made not on a global assessment, but in respect of task specific decisions from simple personal care decisions to more complicated aspects of care and welfare where the person’s capacity was said to be wholly lacking.

568 Under s 16(4)(a) of the MCA, a decision by the Court is to be preferred to the appointment of a deputy to make a decision and the powers conferred on a Deputy are to be limited in scope and duration as is “reasonably practicable in the circumstances”. There is said to be some “slippage” and that deputies may in fact make more decisions. (A Douglass, presentation to the Manchester School of Law, Manchester 30 April 2015).

  1. Yet there is a place for the appointment of the welfare guardian on an ongoing basis, where, for example, a person with severe dementia has a deteriorating condition, or in the case of a severely disabled young adult with high needs. These orders may allow some flexibility and understanding of a person’s needs in a range of circumstances, where some form of ongoing decision-making is pragmatically required to support a person whose capacity is impaired in many areas.

  2. It is unrealistic, however, to require a person to “wholly” lack capacity before a welfare guardian can be appointed, and it is unlikely that this test is strictly applied in practice. The test was initially interpreted as permitting the appointment of a welfare guardian only as “an extreme form of intervention”.569 Nevertheless, even though it is intended in this way to set a high threshold for instituting substitute decision-making in respect of specific decisions, in practice it is not always applied in this way.570
Test no. 3: “not wholly competent” – property EPOA
  1. The 2007 amendment to the PPPR Act added two further legal tests for the purpose of activating EPOAs relating to decisions about property, and care and welfare respectively.571 To confirm that the EPOA can be activated, capacity assessors are required to certify that the person is ”mentally incapable”.572 EPOAs for both property, and care and welfare decisions require this. However, two different tests apply.

  2. For the purposes of activating a property EPOA, the donor is mentally incapable if:573
    ... not wholly competent to manage his or her own affairs in relation to his or her property.
  3. This test of “not wholly competent” implies the threshold is something less than not “wholly” lacking competence. This again leaves some doubt about the level of impairment of decision- making required to activate a property EPOA.574 A further inconsistency is that, for the court to appoint a property manager, the person need only be “partly” lacking competence – a subtly different formulation.575

569 Re G, above n 567, at 448-449.

570 There are wider problems of how these welfare guardian orders are implemented, the limited ability of the Court to review and monitor the orders, and the lack of availability of people to be appointed as welfare guardians in the first place. See Chapter 1B: Overview of Mental Capacity Law in New Zealand.

571 Protection of Personal and Property Rights Act 1988, ss 94(1) and 94(2).

572 As at December 2015, the Statutes Amendment Bill 2015 proposed to make minor amendments to Part 9 of the PPPR Act and to amend the requirement for a prescribed certificate, instead requiring “prescribed information”, although what the nature and content of that information is not stated.

573 Protection of Personal and Property Rights Act 1988, s 94(1).

574 In Treneary v Treneary (2008) 27 FRNZ 78, the Court considered that loss of competence must be “total” and equated it to a s 12 test. While the High Court overturned much of the Family Court’s findings ([2009] NZFLR 1062) on the grounds that the judge erred in conflating the daughter’s lack of suitability to be her mother’s property manager with her suitability to be a welfare guardian, the High Court did not address Judge Murfitt’s statement that there must be total lack of competence before an EPOA for property is activated.

575 Protection of Personal and Property Rights Act 1988, s 25(2).

Test no. 4: ‘lacks the capacity” – care and welfare EPOA
  1. Section 94(2) provides a fourth incapacity test for the purpose of activating a care and welfare EPOA. The donor is “mentally incapable” if the donor:
  1. lacks the capacity –
    1. to make a decision about a matter relating to his or her personal care and welfare; or

    2. to understand the nature of decisions about matters relating to his or her personal
      care and welfare; or

    3. to foresee the consequences of decisions about matters relating to his or her personal care and welfare or any failure to make such decisions; or

  2. lacks the capacity to communicate decisions about matters relating to his or her personal care and welfare. [Emphasis added]
  1. This test is consistent with the functional approach in the MCA, and it is disjunctive (“or”), so only one of the criteria needs to be established. The person may satisfy the test if, for example, they understand the nature of the decision but do not foresee the consequences of it. There may be some circumstances where it is unclear why a person is unable to make a decision, for example, if the person has suffered a stroke and may be depressed. They may be “able” to communicate but do not do so. It is questionable, however, whether the stand- alone criterion of lacking capacity to “make a decision” under s 94(2)(i) adds anything to the overall test because the three functional criteria that follow are all grounds for being unable to make a decision: understanding the nature of decisions, foreseeing the consequences (and failing to make “such decisions”), and the inability to communicate.576 This test – of “lacks the capacity” – for the appointment of a personal care and welfare attorney is, however, a lower threshold than the “wholly” lacking capacity criterion for the appointment of a welfare guardian.
Multiple tests and no clear definition
  1. This use of multiple legal tests throughout the legislation produces unnecessary complexity, especially for health professionals who are required to understand the different legal thresholds and undertake capacity assessments in relation to each of them. Since the early decisions of the PPPR Act, there have been few cases that have examined the meaning of the different thresholds. Moreover, there are few reported cases under the PPPR Act where capacity has been contested, and the reports of some cases suggest that these thresholds have not been correctly applied.577 Even where careful consideration has been given to a person’s capacity,578 often little, if any, consideration is given to the relative difference between ”partly” lacking capacity and the higher threshold of “wholly” lacking capacity, for the purposes of establishing jurisdiction.

  2. In summary, the two original tests under the PPPR Act and subsequent additional tests for activating EPOAs, have created an unnecessarily complicated schema of legal tests, with a spectrum from an impossibly high threshold, “wholly”, through to an unacceptably low threshold of “partly” lacking capacity.
No definition of capacity in the HDC Code
  1. Capacity is an essential component of valid consent. A valid consent is generally taken to consist of four elements: information provision, voluntariness, the opportunity to deliberate, and capacity (or competence).579 Under the HDC Code, consent to treatment is necessary in many situations, as required by the HDC Code or by other legislation or the common law.580 Right 7 of the HDC Code enshrines the right to make an informed choice and give informed consent. This is buttressed by two important principles: the presumption of competence, and encouraging the participation of those with diminished competence.581 In addition, Right 7(4) provides a mechanism for making decisions for a person who is assessed as lacking capacity where there is no substitute decision-maker available.582

  2. Nevertheless, despite the fact that healthcare decisions involving people with impaired capacity are made every day, and the importance of capacity to informed consent, neither the Health and Disability Commissioner Act 1994, nor the HDC Code (a regulation issued under that legislation), defines the concept of capacity (referred to as “competence”) or provides clear legal standards against which capacity is to be assessed.583

576 Protection of Personal and Property Rights Act 1988, ss 94(2)(a)(ii), (iii) and 94(2)(b). By comparison, under the MCA the definition of being unable to make a decision in s 2 is further defined in s 3 entitled, “Inability to make decisions” followed by the four elements of the functional test.

577 See Appendix A for a review of selected PPPR Act cases accessed from the Ministry of Justice database.

578 See for example, VJM on behalf of the Hawkes Bay District Health Board v MH (2011) FAM 2011 041 516, where Judge Callinicos undertook a thorough analysis of the independent psychiatrist’s evidence and was satisfied that MH’s inability to make a reasoned decision about the arrangements for her discharge from hospital was a “tipping point”, and that the Court had jurisdiction.

579 Jonas, above n 549 at 255.

580 HDC Code, Right 7(1). See discussion by PDG Skegg “Justifications for Treatment without Consent” in P Skegg and R Paterson (eds) Health Law in New Zealand (Thomson Reuters, Wellington, 2015) at 188 and 214.

581 HDC Code, Rights 7(2) and 7(3).

582 An overview of the HDC Code is discussed above Part 1B.

583 Appendix B is a review of the Health and Disability Commissioner’s opinions where a person’s capacity has been at issue.

  © 2019 Alison Douglass