In the recent decision of Croft v Sanders  NSWCA 303, the NSW Court of Appeal provided some up-to-date guidance on the often contentious issue of testamentary capacity, determining that a testator, who had a history of delusions and hallucinations, had sufficient testamentary capacity when making his will.
Warwick Croft (testator) was the father of six daughters. He made a will in 2013, in which he had left $40,000 for five of the six daughters, whereas his remaining daughter, Anna, received the balance of his estate of approximately $3 million (2013 will). His previous will was more even.
He died on 4 January 2016
The Appeal was brought by two of testator's daughters, Leah and Esther alleging that he lacked the testamentary capacity at the time of making the 2013 will. It was asserted that he had dementia at the time, which prevented him from accurately weighing up the claims of each daughter to his estate as well as history of delusions or hallucinations.
These hallucinations or delusions purportedly included things such as thinking Leah was possessed by demons; that someone had kidnapped his wife (although they had been living separately for a number of years due to her health; that his daughters were running a brothel; and that he had seen a panther in his yard.
Justice Lindsay of the NSW Supreme Court found that the testator has testamentary capacity when he made the 2013 will. His Honour relied upon the "rationality" of the 2013 will in coming to that conclusion.
The decision was appealed.
The Court of Appeal dismissed the appeal.
It had been argued by the appellant daughters that focusing on the rationality of the 2013 will had diverted Justice Lindsay away from the question of capacity and that inadequate weight had been placed on the evidence of hallucination or delusions.
White JA held, with both Bathurst CJ and Gleeson JA agreeing, that treating the rationality of the 2013 will from the perspective of the testator was relevant to the assessment of capacity and that the Justice Lindsay had not equated it to enabling capacity itself.
A finding of schizophrenia could have changed the outcome of this case significantly; however, evidence from the testator's psychiatrists during from around the time of the 2013 will was found to imply that he had no more than mild cognitive impairment. It was ultimately held that appropriate regard to this had been given and the testator did not labour hallucinatory or delusional beliefs concerning his daughters when he made the 2013 will.
The Court also considered lay evidence from the testator's solicitors. The evidence of the solicitor taking the 2013 will showed that, pursuant to the Banks v Goodfellow test, he never doubted the capacity of the testator and the testator was clear in his instructions as to the reasons of wanting to change his will, and how he wanted it changed. The testator's brother-in-law also gave evidence that strengthened a finding of testamentary capacity.
On the balance of the solicitors' evidence with the medical evidence, the Court held that the hallucinatory or delusional beliefs about his daughters were episodic rather than continuous. White JA stated that had the testator "held such beliefs when he gave instructions to Mr Miller for his will it is likely that he would have expressed them when they discussed the provision, he proposed for his daughters other than Anna."
The Court found that the testator's will "was a rational, measured response to the domestic disharmony that had confronted him over the previous 11 months or so."
This decision highlights the high threshold that must be met in order to challenge a will on the basis of lack of capacity. This follows the overarching principle of fulfilling the wishes of a testator/testatrix to the fullest extent possible.
Ultimately, this reaffirms some well-established succession principles. As a risk management measure, however, particularly as more and more wills and estates claims are made, it demonstrates the problems that can ensue if all necessary steps are not taken to ensure capacity when taking a will.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.