Will capacity, knowledge & approval and undue influence for lifetime transactions
Although this case is one of many recent cases on testamentary capacity and knowledge and approval, it usefully looks at the shifting evidential burden where the suspicions of the court are aroused. It also clarifies that for lifetime transactions undue influence can take not only the form of improper pressure or coercion but can also occur where a person takes unfair advantage of the influence they have over someone else without there being “any specific overt acts of persuasion”.
John Pearce died on 23 July 2008 leaving a Will dated 20 June 2007 which left everything to Elizabeth Beverley (the defendant). Following the breakup of his second marriage the deceased had been in a relationship of varying degrees of closeness with the defendant from late 2005 until his death. He entrusted her with looking after his financial affairs and she even took over negotiating his divorce settlement from his second wife replacing the solicitor originally instructed. The defendant had not divorced her own husband, but left him when she moved in with the deceased in 2005.
The deceased had a daughter, Colette Pearce, the claimant, by his first marriage which ended in divorce after 1971. Colette lived in a property owned by her father to whom she paid rent. She gave evidence, supported by the family, that the deceased had told her he would leave her this house on his death. Colette and other family members gave evidence that the claimant and her father were very close until at least 2006 and possibly into 2007, with regular visits by the deceased to see his daughter and three grandchildren. The deceased’s brother gave evidence that the defendant controlled and manipulated the deceased.
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The deceased suffered from various health issues, including partial kidney failure and difficulty speaking and Parkinson’s disease was diagnosed in November 2007. In September 2005 he stopped work on the grounds of ill health. There was no medical report on the deceased’s health or his mental capacity produced for the trial but reference was made to the contemporaneous medical records. There was a long standing history of anxiety and depression and by March 2007 he had been diagnosed with prostate cancer for which he was receiving treatment. In 2007, during consultations about his cancer, the doctors and a psychiatrist all found him severely depressed with one finding him “almost catatonic in clinic, sometimes forgetting his birthday and becoming mute”. The psychiatrist found “some evidence of memory loss both long term and short term.”
On 18 June 2007 the deceased had gone to a solicitor to give instructions for a Will. Although the solicitor did not make an attendance note, she gave evidence of the meeting from her clear recollection of it as it had been so unusual. The deceased had not spoken at all at the meeting and instructions were given by the defendant that he wanted to leave everything to her. As the solicitor was concerned about the deceased having testamentary capacity and to make sure the instructions were the deceased’s, she then contacted his doctor with the deceased’s consent, although the suggestion of contacting the doctor had upset the defendant who had abruptly left the meeting.
The doctor suggested that an upcoming psychiatric review would help in deciding on the deceased’s testamentary capacity.
On 20 June 2007 an employee of a will-writing firm attended the deceased and the file note of the meeting makes no reference to the mental health of the deceased but states that the deceased was deliberately excluding his daughter as he had a poor relationship with her. The defendant had been present at the meeting and had helped express the deceased’s instructions when his poor speech made it hard for them to be understood. The employee recorded that he did not believe the defendant was exercising undue influence over the deceased.
On the basis of undue influence Colette challenged various lifetime transactions her father had made involving transferring property into the joint names of himself and the defendant, the sale and purchase of properties and payments to the defendant. She also challenged the validity of his 2007 Will. The defendant acted as a litigant in person and defended the claims.
Undue influence and the lifetime transactions
As far as the lifetime transactions and undue influence were concerned, Judge Behrens said that the leading case was the House of Lords decision in Royal Bank of Scotland (RBS) v Etridge  2 AC 773. Undue influence can take the form of improper pressure or coercion and can also occur where a person takes unfair advantage of influence they have over someone else without there being “any specific overt acts of persuasion”.
If the complainant trusted the other person with the management of their financial affairs and there was a transaction which needed to be explained, that will normally be sufficient, failing satisfactory contrary evidence, to prove undue influence. The burden of proof then shifts to that person to show that they had not exercised undue influence over the complainant and the complainant had carried out the transaction by their own free will after “full, free and informed thought” RBS v Etridge  and Smith v Cooper  EWCA Civ 722. So for lifetime transactions there will be a presumption of undue influence if there is an influential relationship between the parties and no independent advice was considered. This is in addition to coercion. Contrast this with undue influence regarding Wills, where there is only actual undue influence which is not presumed but has to be proved in each case.
Judge Behrens stated that the Golden Rule as summarised in Re Key  EWHC 408 applied so a practitioner should arrange for a medical practitioner to confirm the capacity and understanding of the testator where the testator is aged. Compliance with this assists in avoiding disputes rather than showing the validity or invalidity of the Will.
The legal principles from Banks v Goodfellow (1870) LR 5 QB 549 applied and provide that:
It is essential that a testator shall:
- understand the nature of the act and its effects;
- understand the extent of the property of which he is disposing; and
- be able to comprehend and appreciate the claims to which he should give effect.
Judge Behrens stated that this test had not been displaced by the Mental Capacity Act 2005 in the present case in any event as the 2007 Will was made before the MCA 05 came into effect.
The burden of proof for mental capacity was summarised by Briggs J in Re Key:
(i) While the burden starts with the propounder of a will to establish capacity, where the will is duly executed and appears rational on its face, then a court will presume capacity.
(ii) In such a case the evidential burden then shifts to the objector to raise a real doubt about capacity.
(iii) If a real doubt is raised, the evidential burden shifts back to the propounder to establish capacity nonetheless.
Knowledge and approval
Knowledge and approval of the contents of a Will by a testator is presumed where an apparently rational and fair Will was properly executed, unless the suspicions of the court are aroused. If the court’s suspicions are aroused it is for the propounder of the Will to prove that the Testator knew and approved its contents – Fuller v Strum  1 WLR 1097.
Judge Behrens did not find the defendant a reliable witness and found it unsafe to rely on her evidence unless it was corroborated by other independent evidence.
Judge Behrens found that there was real doubt about the deceased’s capacity from the medical evidence and the evidential burden therefore shifted to the defendant to prove capacity. In June 2007 for no discernible reason, the deceased formed the view that the claimant was not his daughter and Judge Behrens found this “wholly irrational and may well have been the result of the mental disorder from which he was suffering.” The employee of the will writing firm did not set out that he had any qualifications to judge the deceased’s capacity and the defendant had been present throughout the interview. Only 2 days before that interview, the solicitor had expressed doubts about the deceased’s capacity and therefore, taken together, the defendant had not satisfied the judge that the deceased had the necessary capacity.
The suspicions of the court were aroused regarding knowledge and approval too. Judge Behrens found that the deceased was “a highly vulnerable adult suffering from mental and physical problems and who had for no good reason completely changed his relationship with his daughter and grandchildren.” The defendant had not proved knowledge and approval either so the 20 June 2007 Will was invalid. The deceased died intestate so all his estate passed to his daughter Colette.
Judge Behrens found that the deceased trusted the defendant with the management of his financial affairs and found that there was strong evidence of his vulnerability from at least the end of 2005. The transactions is question were all to the financial advantage of the defendant and required explanation by her to show that she had not exercised undue influence over the deceased. Lack of undue influence was not proved so all the transactions were set aside.
- Consider undue influence carefully and watch out for unfair advantage being taken of someone where the person in question is in a position of influence over them.
- If undue influence is alleged or likely to be alleged, ask the client to give proof of the complainant/deceased having exercised their own free will.
- Is there any factual evidence of impropriety in the arrangements for the making of the Will such that you should be suspicious of proving it because the person who was involved in its preparation also benefits under it? Try and be as objective as possible.
- It almost goes without saying that clear, detailed attendance notes, evidencing the care taken in obtaining instructions from clients and in explaining testamentary provisions to them are essential.
- Check capacity carefully and ask non-leading detailed questions to help you form your view, recording the questions asked and the answers given.
- Always look for and record hard evidence to support mental capacity and your views on knowledge and approval, but if the testator is aged or you are in any doubt, obtain a report from a suitably qualified medical practitioner.
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