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Memory: The ‘Grand Criterion’ in Determining Testamentary Capacity in Re: From Estate

From Estate 2019 ABQB 988 http://canlii.ca/t/j4859

In this recent will challenge case, the Alberta Court of Queen’s Bench reviewed the law and the role of memory and delusions when determining testamentary capacity. This case is important for two key reasons, discussed below.

Background

A father of two adult children died in 2017. He had executed a will in 2015 in which he left the entirety of his estate to his daughter. The son challenged the will on the basis that the father lacked testamentary capacity. Specifically, alleging that the father’s “impaired cognitive function, paranoia and delusional beliefs influenced his testamentary dispositions.”[1]

Since the age of 12 the son had worked in his father’s business, eventually rising in the ranks and purchasing the business from his father in 2007. The father agreed to the terms of the sale transaction, including the purchase price and was advised at the time by professionals. After the sale, the father remained on good terms with the son and he would come in and socialize at the business as well.

Then the father’s health began to deteriorate. He suffered three strokes over ten years with the last two in 2015 and 2016. In 2015, the father’s attitude toward the son started to change. He started questioning the fairness of the sale transaction that had occurred eight years earlier. At one point, the father became “enraged” since he believed that he owned a property that the business operated out of and he believed that the son had stolen it from him. He also told his son that he was forced to sell his motorhome since he had no money, when in fact he had assets that were over $1.4 million.

The 2015 Will

In 2015, the father attended at a lawyer’s office. The lawyer had not previously acted for the father. The lawyer met with the father alone for approximately 1 hour and 40 minutes. The father was able to list his children and grandchildren, as well as his assets. However, the father told the lawyer that he had “gaps in his memory” and that his “brain was shot” and that he had some strokes.[2] The father also told his lawyer that he had sold his business to his son, but, could not recall any details of the sale. He felt that the business sale may have been unfair and that he may not have received fair market value. The father wanted his daughter to be the sole beneficiary since he felt that the son benefitted greatly from the sale.

The Will Challenge: Testamentary Capacity

Justice Goss confirmed that the daughter had the legal burden with respect to the due execution, knowledge and approval of the will and testamentary capacity, aided by a rebuttable presumption. On proof that the will was duly executed after being read and understood by the father, it would be presumed that the father knew and approved of the contents of the will and had the requisite testamentary capacity.[3] However, if there were suspicious circumstances relating to capacity, the presumption would be spent and the sister would reassume the legal burden of proving testamentary capacity.

Justice Goss set out the criteria for assessing testamentary capacity as set out in Banks v Goodfellow[4] as restated by the Ontario Court of Appeal in Re Schwartz:

The testator must be sufficiently clear in his understanding and memory to know, on his own, and in a general way: (1) the nature and extent of his property; (2) the persons who are the natural objects of his bounty; and (3) the testamentary provisions he is making; and he must, moreover, be capable of, (4) appreciating these factors in relation to each other; and, (5) forming an orderly desire as to the disposition of his property. [5]

Memory 

Justice Goss focused on the concept of memory as it relates to testamentary capacity, noting that “memory is a critical requirement underpinning testamentary capacity.”[6] Citing passages from an historical line of cases,[7] Justice Goss explained that memory is the determining factor on whether a deceased had sufficient “mental soundness.” Quoting Lord Cringletie from Simpson v Gardners Trustees:

This may or may not injure or destroy the mind, and it appears to me that the grand criterion by which to judge whether it was injured or destroyed is to ascertain the state of the memory. It is memory that affords us all the materials on which to exercise judgement and to arrive at a conclusion or resolution. Without memory the mind cannot act, and it is the first of the intellectual faculties which fails, where the mind is in a state of decay. [emphasis added][8]

In Murphy v Lamphier, Chancellor Boyd discussed the role of memory, it being:

not sufficient that the testator be of memory when he makes his will, to answer familiar and usual questions, but he ought to have a disposing memory, so as to be able to make a disposition of his property with understanding and reason, and that is such a memory which the law calls sane and perfect memory…[9]

Testamentary incapacity can exist despite an ability to answer questions of ordinary and usual matters. Citing the Supreme Court of Canada case of Leger v Poirer,[10] Justice Goss went on to acknowledge that a “disposing mind and memory” is one able to comprehend, of its own initiative and volition, the essential elements of will-making, property, objects, just claims to consideration, revocation of existing dispositions and the like.[11]

Insane Delusions

The propounder of the will must also negate the existence of “insane delusions.” This is not met where the court concludes that the deceased may have been suffering from delusions at the time of the execution of the will that could have affected his testamentary disposition,[12] in other words, where the delusion influenced the testamentary dispositions made.

Summarizing the case law,[13] Justice Goss concluded that insane delusions are of two kinds: the belief in things impossible; and, the belief in things possible, but so improbably, under the surrounding circumstances, that no man of sound mind would give them credit. The question is whether, considering all the facts and circumstances, it is fairly shown that the will proceeded from and on account of a deranged mind.[14] Justice Goss went on to cite from John Poyser’s book, Capacity and Undue Influence,[15]that it is “fair to conclude that a court can overturn a will after finding that a delusion was present as to the character or motives of a potential beneficiary. . .”

Application of Law to the Facts

The evidence showed that around 2015 the father:

  • suddenly started incorrectly believing that he was the owner of the business property;
  • alleged that the son stole from him;
  • started speaking of a dispute regarding the ownership of assets;
  • would attend at the business premises and forget where he was or why he had come to the shop;
  • claimed he had no money, despite case and investments of about $1.4 million;
  • alleged that the son owed him more money for shares the son had purchased in 2007;
  • started calling “Elder Abuse” and accusing someone of embezzling $1 million; and,
  • told his lawyer that “his brain was shot and his memory was bad” and that he could not recall details of the sale but felt it was unfair.

Evidence regarding the father’s increasing memory issues and confusion was given by others who had known the father for several years and had frequent contact with him. “Each of these individuals knew [the father] well over a long period of time. Their observations were made during face-to-face contact with [the father]. Their evidence carries significant weight.”[16]

Justice Goss was satisfied that the son had adduced evidence that raised suspicious circumstances tending to call into question or negative [the father’s] testamentary capacity. Specifically:

[the father’s] memory issues, identified by [the father] himself, observed by a number of independent witnesses and exposed by the statements [the father] made both prior and subsequent to the date of the 2015 Will, call into question [the father’s]  testamentary capacity at the time of giving instructions and executing his 2015 Will. Memory is a key determining factor as to sufficient mental soundness to instruct and execute a will as it is memory that affords us all the material on which to exercise judgment, clearly discern and discreetly judge with understanding and reason. In this case, [the father] did not appear to have a clear understanding and memory of the extent of his property at the time of giving instructions on and executing his 2015 Will.[17] [emphasis added]

Since suspicious circumstances were found, the onus then shifted to the sister to prove testamentary capacity.

Justice Goss was satisfied that the father’s behaviour toward his son changed in 2015. The father became more abusive, which continued until his death. The change was noted by all of the witnesses, except the sister who did not see the father on a regular basis.

An example, the father felt slighted that the son was holding himself out as the founder of the business, when there was no evidence that he was. This “conclusion of [the father’s] appears to exist in his own mind without foundation. There is no basis for this belief in the evidence.”[18]

The father told his lawyer (as reflected in the will) that he did not want his son to inherit anything as he was already more than adequately provided for by the father through his benefit of the sale of the business. However, the facts were that the son purchased the business from the father and the father could not recall any of the details of the transaction:

The inability to recall such information would necessarily have inhibited [the father’s] ability to understand or assets whether and to what extent he had benefitted his son. [The father] was having memory issues more generally. In addition, [the father] was confused about his own financial picture, repeatedly stating that he had no money, while holding assets and investments of over $1 million.[19]

Justice Goss ultimately concluded that:

In these circumstances, considered together, it is difficult to conclude that a disorder of the mind had not poisoned his affections, perverted his sense of right, or prevented the exercise of his natural faculties. [The father’s] false beliefs appear to have informed or at least influenced his testamentary disposition.”

Considering all the facts and circumstances, Justice Goss was “satisfied that [the father] may have been suffering from delusions at the time of the execution of the will that could have affected his testamentary dispositions.”

The sister failed to meet her burden of negating the existence of insane delusions and thus proving testamentary capacity. The will was declared invalid.

Takeaways

Again, in summary, this decision is notable for the following two primary reasons.

First, it traces and endorses a line of cases that stand for the proposition that a delusion as to character, or motive, can invalidate a will, with or without a concurrent delusion as to fact.  An example of the former could involve for example, “my son is dishonest.”  An example of the later is, “my son stole my car.”  The two statements are different, but there is authority, now buttressed in some measure by this case, suggesting that a delusion of either category is sufficient to overturn a will.

Second, the decision cites earlier authority and joins a line of cases citing powers of memory as the “grand criterion” for testamentary capacity.  Without memory, there can be no valid will, as the test from Banks vs. Goodfellow draws heavily on the will-maker’s ability to recall and recount his or her assets and objects of bounty.

[1] Re From Estate, 2019 ABQB 988 at para 5.

[2] Re From Estate, 2019 ABQB 988 at para 40.

[3] Vout v Hay, [1995] 2 SCR 876 at para 26.

[4] (1870) LR 5 QB 549 at 565.

[5] Re Schwartz, 1970 CanLII 32, 2 OR 61 (OntCA), aff’d [1972] SCR 150 at para 34.

[6] Re From Estate, 2019 ABQB 988 at para 123.

[7] Citing Wasylynuk v Bouma, 2018 ABQB 159 at para 127, aff’d 2019 ABCA 234, application for leave to appeal dismissed 2020 CanLII 1842 (SCC) which cited a long line of historic cases for this concept: Simpson v Gardners Trustees, (1833) 11 Ct of Sess Cas  1049 (Scottish Ct of Sess); Murphy v Lamphier, 31 OLR 287 (HC), aff’d 20 DLR 906, 32 OLR 19 (CA); re Fraser Estate (1932), 26 Alta LR 551, [1932] 3 WWR 382 (CA) at para 19.

[8] Simpson v Gardners Trustees, (1833) 11 Ct of Sess Cas 1049 (Scottish Ct of Sess) at 1051-52.

[9] Re From Estate, 2019 ABQB 988 at para 124 citing Murphy v Lamphier at para 111 [emphasis added].

[10] [1944] SCR 152 at 161.

[11] Re From Estate, 2019 ABQB 988 at para 130

[12] Stekar v Wilcox, 2017 ONCA 1010 at para 12 & 13.

[13] Citing Banton v Banton, 1998 CanLII 14926 at para 32-33 & 35.

[14] Re From Estate, 2019 ABQB 988 at para 134.

[15] John E.S. Poyser, Capacity and Undue Influence, (Toronto: Thomson Reuters, 2014) at 164,  now updated: John E.S. Poyser, Capacity and Undue Influence, 2nd Ed (Toronto: Thomson Reuters, 2019)

[16] Re From Estate, 2019 ABQB 988 at para 157.

[17] Re From Estate, 2019 ABQB 988 at para 158.

[18] Re From Estate, 2019 ABQB 988 at para 170.

[19] Re From Estate, 2019 ABQB 988 at para 171.

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