Simon v Byford



Judge: Court of Appeal (Sullivan, McFarlane and Lewison LJJ)

Citation: [2014] EWCA Civ 280

Summary: This is the appeal from the decision of Nicholas Strauss QC that we covered last year in the newsletter. In summary, one of the sons (‘R’) of a Mrs Simons (‘S’) brought proceedings in the Chancery Division challenging a will made by his mother, at her 88th birthday party in 2005. Mrs Simo’s previous will, made in 1996, was more generous to R than his other three siblings in that, although the majority of her estate was split equally between them, R also received a flat owned by C and shares in the family company. R was not present at the birthday party but other members of the family were there, including his brother J and sister H. The will made by C at the birthday party provided for her assets (with the exception of a relatively small sum) to be divided between her children in equal parts. There was evidence that S was suffering from mild to moderate dementia at the time she made that will and R argued that she lacked testamentary capacity. This was rejected by J and H. S died in 2009.

Nicholas Strauss QC held at first instance that S had had the requisite testamentary capacity, that she knew of and approved of the provisions of the will made in 2005 and that it was her last and valid will. Importantly, he considered that although S would not have been able to remember the terms of her previous will, she would have been able to ask to see that will if she wished to do so, when she was told at the time of making the 2005 will that it did not (as she believed) leave her property to her children equally.

R appealed to the Court of Appeal on the grounds that (1) the judge was wrong in his analysis of the requirement (deriving ultimately from Banks v Goodfellow) that the testator is able to comprehend and appreciate the claims to which he ought to give effect; (2) the judge was wrong to infer that S was capable of understanding the extent of her estate; and (3) the judge set the requirements of establishing knowledge and approval too low.

The appeal was dismissed, with Lewison LJ giving judgment on behalf of the Court of Appeal. As a preliminary point, he reminded himself (as he said in Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 at [114]) that a first instance’s judges findings about testamentary capacity and knowledge and approval are findings of fact, based on his appreciation of the evidence as a whole, such that an appeal court should be wary of interfering with them.

In relation to grounds (1) and (2), Lewison LJ considered the principles relating to testamentary capacity. He held that Banks v Goodfellow was the applicable test, although – interestingly – on the basis that the will was made before the MCA 2005 came into force (paragraph 39). Importantly, however, citing dicta of Peter Gibson LJ in Hoff v Atherton [2004] EWCA Civ 1554; [2005] WTLR 89, he (re)emphasised (at paragraph 39) that what one is dealing with is “capacity, in other words with potential” (paragraph 39, emphasis in original). In other words, “capacity depends on the potential to understand. It is not to be equated with a test of memory” (paragraph 40). As he noted, this was not a new point:

“40… [i[]n Harwood v Baker (1840) 3 Moo PC 282 Erskine J giving the judgment of the Privy Council said:

‘… in order to constitute a sound disposing mind, a Testator must not only be able to understand that he is by his will giving the whole of his property to one object of his regard; but that he must also have capacity to comprehend the extent of his property, and the nature of the claims of others, whom by his will he is excluding from all participation in that property.’ (Emphasis added)

He did not say that the testator must actually remember the extent of his property. Mrs Simon did in fact remember the extent of her estate, partly as a result of executing the deed of gift, and partly as a result of the discussions that followed. In my judgment, when the judge said that Mrs Simon was not “capable” of remembering why her earlier will had benefited Robert, he meant no more than that she had forgotten. Once I knew the dates of all the Kings and Queens of England, and the formula for Hooke’s law; and was “capable” of remembering them. Now I would have to look them up. The judge’s important finding was not that Mrs Simon had forgotten the terms of and reasons for her earlier will. It was that she was capable of accessing and understanding the information; but chose not to…”

The appellant’s more substantial point, Lewison LJ found, was the contention that, by dividing her shareholding equally between her children S must have overlooked the reason why in her earlier wills she had left them all to R. It was contended on R’s behalf, although S might, with the help of an explanation, have been able to understand why she had done that, in the absence of an explanation she could not. Thus while she might have understood that she owned the shares (as was apparent from the deed of gift) she did not understand their significance. Their significance was that if they all went to R then deadlock in the company would be prevented; whereas if divided equally among the children deadlock was possible. It was said, that, while it would have been open to S to change her mind about the desirability of leaving all the shares to R, she did not have capacity to do so without first understanding the consequences of doing that. This was not simply a failure of recollection. It was an inability to replicate the thought processes that had led her to her earlier disposition.

As Lewison LJ noted, “it seems to me that the question that divides the parties is whether a testator or testatrix must not only be capable of understanding what assets are at his or her disposal and the persons who have claims on those assets, but must also understand not simply the direct consequences but also the collateral consequences of disposing of them in one way rather than another” (paragraph 43).

Significantly, Lewison LJ held (at paragraph 45) that:

“I do not believe that previous authority goes to the length of requiring an understanding of the collateral consequences of a disposition as opposed to its immediate consequences. Nor do I think it desirable that the law should go that far. As Mummery LJ put it in Hawes v Burgess [2013] EWCA Civ 74; [2013] WLR 453 at [14]:

‘The basic legal requirement for validity are that people are mentally capable of understanding what they are doing when they make their will and that what is in the will truly reflects what they freely wish to be done with their estate on their death.”

46. The significance of the shares on their own was slight. What gave them significance (at least to Robert) was the fact that, combined with his existing shareholding in the company, acquisition of Mrs Simon’s shares would give him the power to avoid deadlock. But that would have required Mrs Simon to have understood (and remembered) not only what her own estate was, but also what Robert’s assets were. I do not think that any of the authorities requires as a condition of testamentary capacity that the testator should understand or remember the extent of anyone else’s property. Again, what Ms Reed’s submission really amounts to is a memory test. In fact the classic formulations of testamentary capacity … limit themselves to requiring the testator to understand no more than the extent of his property. They do not require him to understand the significance of his assets to other people” (emphasis in original).

In relation to knowledge and approval, Lewison LJ held that:

“what we are looking for is actual knowledge and approval of the contents of the will. But it is important to bear in mind that it is knowledge and approval of the actual will that count: not knowledge and approval of other potential dispositions. Testamentary capacity includes the ability to make choices, whereas knowledge and approval requires no more than the ability to understand and approve choices that have already been made. That is why knowledge and approval can be found even in a case in which the testator lacks testamentary capacity at the date when the will is executed. The reason for this requirement is the need for evidence to rebut suspicious circumstances: Perrins v Holland [2010] EWCA Civ 840; [2011] Ch 270 at [25]. Normally proof of instructions and reading over the will will suffice: ibid at [25]. The correct approach for the trial judge is clearly set out in Gill v Woodall [2010] EWCA Civ 1430; [2011] Ch 380. It is a holistic exercise based on the evaluation of all the evidence both factual and expert. The judge’s starting point in our case was one of ‘initial suspicion’, given that the disputed will was prepared and executed without a solicitor and without Mrs Simon having been medically examined: see [11]. But having heard the evidence he held that his initial suspicion had been dispelled. He found it clear that Mrs Simon knew that she was making a will, took a conscious decision to make it and approved its terms. This conclusion was, in my judgment, fully supported by the evidence that the judge accepted. In particular he accepted the evidence of Ms Schachter that she read the draft will to Mrs Simon twice; and having typed the will, she read it again to Mrs Simon who appeared to understand it. She did that because, as a former legal secretary, she understood that the will had to be read and understood by its maker. Mrs Simon also read it to herself. Given that the will was relatively simple, and that the judge had found that Mrs Simon had testamentary capacity, his finding of knowledge and approval is in my judgment unassailable.”

The appeal was therefore dismissed.

Comment: Lewison LJ’s restatements of the principles governing the test for testamentary capacity for pre MCA 2005 wills and those governing the test for knowledge and approval are helpful in their focus upon: (1) the realities of the situations in which wills are drawn up; and (2) the concrete requirements of a person choosing to make a will. His message – even if it relates to cases which formally do not engage the MCA 2005 – is very much in line with the spirit of the Act in terms of securing against the risk of (retrospectively) finding incapacity by asking too much of the testator.

For further commentary upon this case by Simon Edwards, see here, and by Alex see here.

CategoryMental capacity - Finance Date

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