James v James: capacity and estoppel trespassing on testamentary wishes

Posted: 12/04/2018

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The test for testamentary capacity has received significant attention recently; most notably, as part of the Law Commission’s consultation on reforming the law of wills, which was issued on 13 July 2017.

The case of James v James, heard earlier this year, is a case in point. The testator, Charles Frederick Allen James, made his last will on 16 September 2010 excluding his only son, Raymond Allen James (known as “Sam”). Charles and Sam operated a farming partnership with Charles’ wife (Sam’s mother), Sandra James, until this was dissolved. That business consisted of a farming and haulage business in Dorset.

Charles died on 27 August 2012, aged 81, and Sam brought a claim against his estate on two grounds that:

• the will was invalid for want of testamentary capacity; and
• he was entitled to land disposed of under the will by virtue of an equitable proprietary estoppel in his favour.

The matter came before His Honour Judge Paul Matthews sitting in the High Court in Bristol Civil Justice Centre who considered each of these issues in turn.

Testamentary capacity

In May 2010, Charles and Sandra instructed a solicitor to prepare wills for them. They had three separate meetings with their solicitor.

In her evidence before Judge Matthews, the solicitor stated that she was happy that Charles had sufficient capacity to execute his will, which he did at his home in the presence of the solicitor, the second witness and Sandra.

The judge was concerned that no capacity assessment had been undertaken to confirm that Charles had the requisite capacity to sign his will as he was known to a local Community Mental Health Team, and he had behaved strangely at the signing meeting (for example by refusing to sign anything at all on the belief that he would die if he signed his will).

The ‘Golden Rule’ provides that a solicitor who has doubts over an individual’s testamentary capacity should consider arranging for a medical practitioner (such as a GP) to prepare a report on capacity and potentially, if practicable, witness the signing of the will. Judge Matthews questioned why the Golden Rule was not followed in this case and was not impressed by the lack of evidence put forward as to why this would have been difficult. Ultimately, this was not fatal to the validity of the will but it does raise a practical point for will-drafters to consider.

Judge Matthews also considered the test for testamentary capacity. The judge referred to previous case law discussing whether the relevant test is that set out in Banks v Goodfellow or whether the statutory test under the Mental Capacity Act 2005 (MCA) applies. In his view, the MCA is concerned with assessing the capacity of living individuals and the common law test in Banks v Goodfellow should apply to testamentary capacity in line with previous case law.

Applying the common law test, Judge Matthews did not question that Charles knew that he was executing a will and knew the extent of his estate. The only question was in relation to whether Charles appreciated any claims that may be made against his estate; to which Judge Matthews held that, given that Charles’ estate was fairly straightforward (albeit of significant value), and because there were few potential claimants, the threshold of understanding is lower than it would be for a complex estate with many potential claimants.

As a result, the will was upheld.

Proprietary estoppel

The following criteria must be satisfied in order to succeed with a claim under proprietary estoppel: 

• an assurance or promise made by the promisor to the promisee;
• reliance on that assurance by the promisee; and
• the promisee suffered a detriment as a result of such reliance. 

Sam claimed that he was entitled to land previously belonging to Charles; most notably, Pennymore Pitt Farm. His expectation of inheriting the land had arisen due to a number of factors, including:

• a natural expectation to inherit the farm as Charles’ only son;
• a draft will, prepared for Charles on his instructions, in which Sam was the intended beneficiary of Pennymore Pitt Farm. Charles had also discussed his testamentary intentions with Sam;
• Charles asking for Sam’s opinion as to whether he should purchase more land and, on Sam’s evidence, Charles had said that he (Sam) would be farming it one day; and
• Sam having worked on the farm for over 30 years in the expectation that he would receive it on Charles’ death. In opposition to this, Sam had received a wage for his work at market rate and he had also been bought cars by Charles and was permitted to live rent-free in one of Charles’ properties. 

In determining the claim, Judge Matthews took into account Charles’ character and his natural tendency to keep hold of his assets for as long as possible. As Judge Matthews put it: “…[t]o the testator, money was God”.

Judge Matthews held that the claim failed as Sam could not establish a clear assurance; Charles had only expressed his intentions, he did not proffer any actionable assurances. The judge held that a statement of current intentions does not equate to a promise of future conduct, nor does it amount to an assurance upon which a person can rely in order to assert an interest in land.

In relation to Sam’s remuneration, Judge Matthews dismissed this argument and commented that: “[t]his is not the usual proprietary estoppel case where the claimant works for nothing, or very little, on the basis of a supposed assurance to be left the farm. Here, Sam was properly paid...".

Nor, in Judge Matthews’ view, did Sam succeed on demonstrating that he relied on the statements given by Charles. It did not appear to the judge that Sam would have acted any differently, even in the absence of the assurances given by Charles, as his nature was to work hard at things he enjoyed and he did not want to leave the family farm. 

Conclusion

The case provides helpful clarification as to the applicable test for testamentary capacity, which has been under judicial scrutiny for many years. We await the Law Commission’s proposals in this area.

It also highlights some of the dangers for solicitors when preparing wills, such as observance of the Golden Rule, and provides a useful summary of the current law and guidance on proprietary estoppel, including a summary of the aspects of the doctrine and the evidence required under each limb.

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