INCAPACITY
GENERAL PRINCIPLES
(A) INCAPACITY OF THE CLAIMANT
Where the claimant lacks capacity to enter into a transaction this in itself should constitute a ground of restitution to enable the claimant to recover any benefits transferred to the defendant pursuant to the transaction. Two reasons can be identified to justify the recognition of incapacity as a ground of restitution in its own right.
(i) Absence or Vitiation of Intent
The effect of the claimant’s incapacity will be that he or she cannot be considered to have intended that the defendant should receive a benefit. This will either occur because the claimant is incapable of forming the necessary intent at all, or because the effect of the incapacity is to impair the claimant’s capacity such that he or she appears to have formed an intent but cannot be considered to have exercised a free will in transferring the benefit to the defendant.[1] As Fullagar J said in the Australian case of Blomley v Ryan,[2] ‘the primary question [is] as to the reality of the assent’ of the incapacitated person. The distinction between absence of consent and impaired consent is a matter of degree which depends on the extent of the impairment on the claimant’s awareness and understanding of what he or she was doing. Where capacity is absent any transaction entered into by the incapacitated person will be void and restitution should follow automatically. Where capacity is merely impaired, whether restitution should follow will depend on the extent of the impairment and the defendant’s awareness of the impairment.
