Family Dispute Turned Ugly [2016] SGCA 26

February 24, 2019


This case concerned an application for a declaration that a woman (“AWL”) was unable to make decisions regarding her finances and assets because of an impairment in the functioning of her mind. This application was made by two of AWL’s sisters (“the appellants”) and supported by a number of AWL’s other siblings and two of her three children, including her only son (“CK”). However, it was opposed by AWL herself, as well as, her younger daughter (“LWF”) and LWF’s husband (“AI”) (“the respondents”).

The relationship between AWL’s three children was far from harmonious. There had long been friction but matters deteriorated after their father passed away and the antagonism was strongest between CK and LWF. This animosity between her children vexed AWL and she often lamented their inability to get along and urged them to work past their differences. These family tensions eventually culminated in the appellants filing this MCA application.

The only point that all parties concerned could agree on was that AWL’s memory was significantly

impaired and that AWL started taking medication for “Senile Dementia” since 2006. In this regard, there were concerns from all parties who interacted with AWL about her mental fitness and her substantial memory deficits.

Comprehensive medical examinations were conducted to diagnose the full extent of AWL’s mental impairment. However, two contrasting conclusions were advanced. The respondent’s experts took the position that although she had “Mild Cognitive Impairment” (“MCI”), she did not lack the ability to make decisions. The appellants’ experts, on the other hand, were of the view that she was suffering from a mixture of Alzheimer’s disease and vascular dementia – which is dementia that is linked to inadequate blood supply to the brain – and that the effect of these conditions was that AWL did not have decision making capacity. Therefore, while it was common ground that the functioning of AWL’s mind was impaired to some extent, there was no consensus as to the nature or the degree of that impairment.

The critical events leading up to this application were: (a) AWL’s setting up a trust (“the Trust”) that appeared to bring benefit to LWF but not to herself, (b) AWL’s giving a succession of contradictory instructions to her bankers in relation to the transfer of her assets in two banks to a third bank, which culminated in an apparent decision to make such a transfer, and (c) AWL’s going overseas to live with LWF and AI while cutting off contact with her other children and her siblings despite their efforts to gain access to her. It was alleged by AWL’s sisters that AWL had been unable to make all these decisions because they had been made in the context of her dementia and the undue influence exerted by LWF and AI.

The key issue to be determined was whether AWL lacked mental capacity i.e. whether she was “unable to make decisions” within the meaning of s 5(1) of the MCA because of an impairment of her mind, as well as, the consequent implications of allegations of undue influence exerted on AWL.


AWL’s sisters took the position that AWL had dementia and that this had caused (a) significant deterioration in her memory, (b) a decline in her executive functioning and (c) the development of paranoid and/or false beliefs, such that it prevented AWL from being able to make decisions relating to her finances and assets.

Furthermore, the appellants alleged that LWF and AI had sought to take advantage of AWL’s diminished mental capacity to cut her off from her other family members and to manipulate AWL for financial gain. It was vigorously asserted by the appellants and those associated with them, especially CK, that AWL was subject to the undue influence of LWF and AI. One of their main allegations was that LWF and AI engineered the creation of the Trust and the transfer of AWL’s Bank A assets to Bank B in order that they could purchase a bungalow for $30 million using AWL’s money.


AWL denied that she had dementia. Her argument, which LWF and AI aligned themselves with, was that her condition was nothing more serious than MCI and that the effects of MCI were insufficient to deprive her of decision-making capacity. But AWL’s own belief was that this application was actually an attempt by her son, CK, abetted by her sisters, to achieve control of her substantial wealth.


In relation to the capacity to make decisions, there are definitions laid down in the MCA. Under those definitions, a person (“P”) lacks capacity if he is “unable to make a decision for himself” because of an impairment of, or a disturbance in the functioning of, the mind or brain (s 4(1)). The MCA then elaborates in s 5(1) to explain when P will be considered to be “unable to make a decision for himself”. In this regard, there are four possibilities: (a) he is unable to understand the information relevant to the decision; (b) he is unable to retain that information; (c) he is unable to use or weigh that information as part of the decision-making process; or (d) he is unable to communicate his decision by whatever means.

The legal test for the threshold of having capacity in s 4(1) of the MCA contains a functional, as well as, a clinical component. The functional component is that P is “unable to make a decision for himself”, and the clinical component is that such inability stems from an impairment of the mind. In this regard, there must be a causal connection between the inability to make decisions and the mental impairment. In other words, this requirement for a causative link is embedded in s 4(1) of the MCA, in the operative words “because of”; P will be declared to lack capacity under the MCA only where P is unable to make decisions because of a mental impairment. The starting premise is that a person is presumed to have capacity unless proven otherwise. As such, the question for the court is whether the lack of capacity has been established. Furthermore, another material principle is that P is not to be treated as unable to make a decision unless all practicable steps to help P to do so have been taken without success.


Evaluation of the medical evidence

The central dispute relating to the experts’ medical evidence was what AWL’s mental impairment was (i.e. whether it was MCI or dementia). The symptoms that MCI and dementia have in common is a deterioration in memory. However, the main difference between the two is that MCI sufferers generally manifest little or no other symptoms in addition to compromised memory, which means that any deficits in cognitive function are “subtle”, whereas a range of other symptoms may be observed in those with dementia. It was apparent that AWL’s lapses in memory were not merely trivial and incidental. On the contrary, they concerned documents and events with which AWL ought to have been intimately familiar; which involved substantial sums of money; or which pertained to her relationships with the people closest to her. The court was of the view that such lapses raised serious doubts about AWL’s ability to retain information relevant to the types of decisions relating to her finances and assets which she would have to make.

The summary of the medical evidence, cross-examination and clinical interviews with her experts suggested that AWL had an impairment or disturbance in the functioning of her mind, and that it was something in between MCI and dementia. In view of the above, the court was satisfied that this had caused: (a) a significant decline in AWL’s memory, (b) an observable deterioration in AWL’s executive functions, especially in her ability to understand information and to weigh countervailing considerations against one another, and (c) the emergence of paranoid and false beliefs that could and did affect AWL’s actions.

In any event, the court was of the view that it need not and did not make a definitive ruling as to whether AWL had MCI or dementia. The court held that AWL did have a mental impairment and whatever the precise diagnosis of such mental impairment might have been, it resulted in a significant deterioration of memory, a decline in executive function (i.e. the ability to understand and use information and to weigh countervailing considerations against one another) and the harbouring of paranoid beliefs. Hence, the court opined that AWL lacked the ability to make the decision to set up the Trust, as well as, the decision to transfer all her Bank A assets to Bank B.

Decision to set up the Trust

From an objective viewpoint, it was difficult to see any good reason for establishing the Trust. Taking into account the principle provided for in s 3(4) of the MCA that a person “is not to be treated as unable to make a decision merely because he makes an unwise decision”, even if the creation of the Trust could be characterised as an unwise decision, that by itself did not warrant a finding that AWL lacked the ability to make it. The test was whether AWL was able to understand the information relevant to the decision and, if she did, whether she was then able to use and weigh all that information in the process of coming to her decision. It was apparent that AWL was of the belief that, had she not established the Trust, CK would have pursued her money and eventually left her bereft. The court was of the view that this belief was problematic for two reasons. The first was that it seemed to have arisen suddenly in AWL’s mind without any apparent cause, and the second was that it did not appear to be a reasonable belief in that there was no perceptible factual basis for such a belief. As such, this raised the possibility that AWL’s decision to set up the Trust was largely, if not wholly, spurred by a paranoid belief that was caused at least in part by her mental impairment. In view of the above, the court held that the Trust was invalidly constituted and set it aside because, although the court acknowledged that AWL understood at least some of the information relevant to the decision to set up the Trust, the court was satisfied that AWL lacked the ability to use and weigh the information relevant to the decision due to the decline in her executive function, coupled with the fact that AWL’s mind was overborne by a paranoid belief caused by her mental impairment.

Transfer of assets

With respect to AWL’s decision to transfer her Bank A assets to Bank B and the inconsistent instructions that she gave in connection with it, AWL’s inability to recall her previous inconsistent instructions constituted a failure of her ability to retain information relevant to her decision. AWL’s persisting in giving instructions in respect of her Bank A accounts despite having confirmed the closure of those accounts cast serious doubts on whether she understood what was happening during meetings and hence suggested that AWL lacked the ability at the time to understand the information relevant to her decision. There was also evidence that AWL’s ability to use and weigh information relevant to her decision to transfer her Bank A assets to Bank B was compromised. AWL was unable to satisfactorily explain why her desire for security at Bank B and her trust in a banker from Bank B would translate into a decision to transfer all her assets in Bank A to Bank B, nor why such a decision had to be made at that particular time.

In addition, the evidence of AWL’s banking relations with Bank C fortified the court’s view that AWL lacked the ability to make the sort of banking-related decisions that someone of her substantial wealth would have to make. For example, during one of the meetings with her Bank C bankers, AWL’s participation was confined to nodding in assent at certain points and making small talk unrelated to the transfer of assets. The limited extent of AWL’s participation and her tendency to stray into irrelevant matters strongly hinted at an inability to understand the information relevant to her decision or to use and weigh it. In this regard, the totality of the evidence concerning AWL’s transactions with Bank A and Bank C resulted in the court declaring that this transfer of assets was void.

Undue influence & cutting off access

There was a strong case for inferring that AWL was acting under the undue influence of LWF and AI when AWL established the Trust and transferred her assets to Bank B. This was so because AWL was unable to explain why it was necessary or even desirable to create the Trust if her objectives were merely to provide for herself during her lifetime and to make donations to charity after her passing. The court opined that AWL did not seem capable of (a) considering whether one of these objectives would have been achieved by other trust arrangements already in existence; and (b) assessing the relative merits and demerits of setting up the Trust versus drawing up a will. As such, the court held that the establishment of the Trust and the transfer of assets to Bank B did not appear to bring any discernible benefit to AWL. In fact, they occurred without any evident prompt or reason; the Trust was set up in secrecy and the banking instructions were given with unusual urgency and were subject to inexplicable contradictions. Given the manner in which the transactions were carried out, it was difficult to believe that they were the considered expressions of AWL’s volition. It was evident that the choices made by AWL varied drastically depending on whether she happened to be with LWF and AI, and this strongly suggested, in the court’s view, that LWF and AI did, in fact, exercise undue influence over AWL and would have continued to do so for as long as other people were prevented from seeing AWL.

Simply put, the actual circumstances of AWL’s life did not furnish her with such help that would have enhanced her ability to make decisions and, in fact, supplied active hindrances to AWL’s decision-making independence, in that she was cut off from people who would otherwise have been able to give her advice and was subject to the undue influence of LWF and AI. The aforesaid conclusion was reinforced further by the evidence on LWF and AI limiting the access that others could have to AWL. The evidence strongly suggested that, if AWL were completely at liberty to make her own independent decision, AWL would not want to cut off access and would, instead, wished to meet and interact with her siblings and her children.


The threshold of what constitutes as “capacity” under the MCA is a highly context-dependent enquiry. It is “decision-specific” and it must take into account one’s actual circumstances. If a person is unable to retain, understand or use information relevant to a decision because of a combination of mental impairment and the circumstances that such a person finds himself or herself in, the statutory threshold for incapacity will be met, and it is no answer then to argue that such a person’s mental impairment would not necessarily have deprived him or her of decision-making ability in a different set of circumstances.

In addition to the two-step test for assessing mental capacity (i.e. both functional and clinical components), where there is an interaction between mental impairment and allegations of undue

influence, in which a person’s mental capacity is in question, the court has to have regard to the actual circumstances in which that person lived and ought not to adopt a theoretical analysis that overlooks such circumstances.


Lawrence Chan
Advocate & Solicitor