Edna May Collins by her next friend Glenys Lesley Laraine Poletti v May

[2000] WASC 29

Supreme Court of Western Australia

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Interrogate

Catchwords

1. Contract
2. › Capacity
3. › Mental incapacity
4. › Voluntary disposition of property
5. › Gift of half interest in land to granddaughter
6. › Whether donor of sound mind at time of gift
7. › Donor suffering from early senile dementia
8. › Whether deprived of capacity to understand nature of transaction
1. Contract
2. › Capacity
3. › Mental incapacity
4. › Knowledge of other party
5. › Whether donee knew or ought to have known of donor's incapacity
6. › Constructive knowledge sufficient
1. Equity
2. › Voluntary dispositions
3. › Setting aside gifts
4. › Mental incapacity of donor
5. › Standard of mental capacity required for voluntary disposition equivalent to testamentary capacity
6. › Subject matter and value of disposition relevant to degree of understanding required

Quick Take

The degree of mental capacity required for a voluntary disposition of a donor's most significant asset is equivalent to testamentary capacity, requiring the donor to comprehend the nature and effects of the transaction, the extent and character of the property, and the claims of potential beneficiaries. Constructive knowledge of the donor's incapacity suffices — the donee need not have precise knowledge of the medical condition but must be taken to know what the surrounding circumstances would have revealed to a reasonable person.