Cayman Islands: Mental Capacity Issues - Cayman Islands And British Virgin Islands

Rowena Lawrence and Tim Haynes of Walkers provide an overview of the relevant regimes for mental capacity legislation in the BVI and the Cayman Islands.

Hong Kong's ageing population and the ongoing popularity of offshore structures will make the legislation in the major offshore jurisdictions concerning mental capacity issues increasingly relevant. Perhaps conscious of this, the legislators in both the British Virgin Islands (BVI) and the Cayman Islands have recently updated their rules in this area.

The mental health legislation in both the Cayman Islands and the BVI has been reformed relatively recently to safeguard the rights of mentally incapacitated individuals. That legislation provides the courts with broad powers over the property and affairs of mental health patients. Given the constantly evolving jurisdictional arguments that arise in the courts of both Cayman and BVI, while it is unusual for individuals who are parties to Financial Services Division (Cayman) or Commercial Division (BVI) actions to be resident in those jurisdictions, there are circumstances in which it may be necessary to consider the application of laws of those jurisdictions when incapacitated persons are involved. An application to the offshore court may be made in a number of situations, for example where the individual concerned holds property (most obviously shares in an offshore company) in the offshore jurisdiction or where there is no obvious or effective order available in the jurisdiction in which the incapacitated individual resides. The relevant legislation, as it is applied in both the Cayman Islands and BVI, is considered below.

The Cayman Islands

The Mental Health Law, 2013 (MHL) gives the Cayman Islands Grand Court (the Grand Court) the power 'to do or secure the doing of all such things as appear desirable for the maintenance or benefit of" a mental health patient, his family and those for whom he might be expected to provide.¹ In exercising such powers, the Grand Court may, on behalf of the patient, arrange for another person to deal with relevant property, enter into any settlement, manage a business, dissolve a partnership, complete a contract, conduct legal proceedings and act as trustee.

The Grand Court may also appoint a receiver.² Where an application for the appointment of receiver is made, such application is made by way of originating summons issued by the patient, the spouse, the guardian appointed by the court, a near relative or the Solicitor General. The application is required to be supported by a medical report certifying the mental capacity of the patient, and an affidavit giving particulars of the patient's relatives and of the circumstances giving rise to the application.³

Further, the Grand Court Law (2015 Revision) states: 'The Court shall have the power to appoint guardians of the persons and estates of persons of unsound mind or suffering from mental illness and for that purpose to enquire into, hear and determine by inspection of the person the subject of such enquiry, or to examine on oath or otherwise the party in whose custody or charge such person may be, or any other person or persons, or use such other ways and means by the truth may be discovered'.

An application for appointment of a guardian may be necessary in order to administer a patient's properties and affairs in Cayman. That application would also be made by way of an originating summons issued by the patient, the spouse, any near relative, or the Solicitor General. The evidence in support would be the same as for the appointment of a receiver (referred to above).⁴ The MHL is unequivocal in that the authority of a guardian over a patient takes precedence over the authority of any other person.

Pursuant to O.80 r2 of the GCR, a mental health patient may only bring a claim by a 'next friend', and may only defend a claim by a 'guardian ad litem'. The next friend or guardian ad litem must be legally represented. Where the order appointing a guardian covers the power to conduct proceedings, there is no need to make a separate application for the appointment of next friend or guardian ad litem. In other cases, it will generally suffice for a written consent to act as next friend or guardian ad litem be filed with the court.⁵

The BVI

Section 33 of the Mental Health Act 2014 (the MHA) empowers the BVI Court to make orders for the following:

• for the maintenance or benefit of the patient or his or her family,
• to make provision for individuals whom the patient might be expected to provide, or
• to administer the patient's affairs.

Specifically, these powers include the making of orders for the management or dealing of property, the execution of a will, the carrying on a business, dissolution of partnership, carrying out a contract, conducting legal proceedings, payment of debts, appointment of trustees,⁶ and appointment of receivers.⁷

Section 38 of the MHA specifically provides that the BVI Court may direct the vesting of stock in the name of a curator appointed outside of the BVI, if the court is satisfied that the curator has been validly appointed under the relevant applicable law, and it is expedient in the circumstances for the BVI Court to do so.

As with the position in the Cayman Islands, part 23 of the Civil Procedure Rules provides that a mental health patient must have a next friend to conduct proceedings on his or her behalf. Further, such next friend must be legally represented.⁸ Generally speaking any person can be appointed a next friend without a court order by a certification in writing that the next friend can fairly and competently conduct the proceedings in question and has no interest adverse to that of the patient.⁹

Conclusion

Both the Cayman Islands and the BVI Courts are now able to provide a wide-range of assistance in dealing with the property and affairs of mental health patients. While the BVI statute specifically provides for the dealing with property in the jurisdiction, in the interests of comity, notwithstanding the absence of a specific provision, it is likely that the Grand Court would adopt a similar approach.

Footnotes

1 Section 18 of the MHL

2 Ibid. Section 19

3 Ibid. Order 80 Rules 17 and 20

4 Order 80 Rules 28 and 29 of the Grand Court Rules1995 (as amended) (the GCR)

5 Ibid. Order 80 Rule 3

6 Section 34 of the Mental Health Act 2014

7 Ibid. Section 37

8 Part 23.2 of the ECSCR

9 Ibid. Part 23.6

Previously published in the STEP Hong Kong Branch Newsletter (December 2015)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.