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Legislative Assembly for the ACT: 2001 Week 5 Hansard (3 May) . . Page.. 1409..

� Firstly, that a person's wishes as to the management of his or her property should prevail over the view of the Tribunal that he or she is incapable of making reasonable decisions about financial matters; and

� Secondly, that the Act requires that the test for appointment of a manager requires simply 'legal incapacity' in relation to either a specific likely transaction or the preservation of the person's property, rather than the inability to make reasonable decisions.

Those two findings resulted in the Court holding that a person who requires a guardian, and was likely to squander his finances through irrational spending, was not 'legally incompetent', did not require a manager of his finances and he could deal with his money as he wished. The Court noted with concern that there was no definition in the Act of 'legally incompetent' and applied common law principles, which were developed for contract law.

The Court's decision thus appears to indicate that if a person knows how to enter a financial transaction, that person is competent to enter the financial transaction, and the financial soundness of such transactions may not be relevant. The potential outcome of such transactions can ultimately be destitution and homelessness.

Related to this issue is uncertainty under the current Act about the relative priority of principles to be applied by decision-makers who are acting for protected persons.

The Guardianship and Management of Property Amendment Bill 2001 addresses both of these issues.

Firstly, the Bill establishes a single consistent test for the appointment of both guardians and managers rather than the two separate tests under the current Act, which I have outlined above.

I believe that in deciding whether to appoint a manager of the financial affairs of those with impaired decision-making ability, it is necessary to take into consideration not only the person's capacity to enter contracts but their capacity to make reasonable decisions in relation to their interests prior to entering such contracts.

People who are incapable of decision-making to such an extent that they require a guardian to make personal decisions for them in relation to their day-to-day living are generally also at a distinct disadvantage in understanding financial implications compared to those who are able to manage their day-to-day affairs. They are less likely to be able to 'pick themselves up' and make good any losses they may suffer through unwise financial decisions. I am concerned to ensure that the financial resources of such people are also protected when this is necessary.

The Bill requires the Tribunal to apply a similar test for the appointment both of guardians and managers of property. The test will require:

� that the person concerned has impaired decision-making capacity in relation to his or her property (for appointment of a manager) or health and welfare (for appointment of a guardian); and

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