The test for determining testamentary capacity is spelled out in Banks v Goodfellow (1870) 5 QB 549 by Cockburn CJ and involves an assessment of whether the testator:
(a) understands the nature and effect of the document, which requires the testator to understand that they are creating a will, as well as the practical effect of the central clauses within the will;
(b) understands the extent of their property, which requires a general knowledge of the state of the testator’s property, including what it consists of; and
(c) appreciates and comprehends any potential claims to which the testator ought to give effect.
“[T]he Court needs to be satisfied that the testator had the capacity to remember, to reflect and to reason and, generally, that he did so in a rational way”
King v Hudson [2009] NSWSC 1013 at 51-52
Background
On 8 April 1998, Frederick Allwood ( “the deceased”) executed a will appointing the Public Trustee for the Northern Territory (‘Public Trustee’) as the executor and bequeathing the whole of his estate to the Salvation Army. On 7 December 2018, the deceased executed a will appointing De Silva Hebron, Barristers and Solicitors, ( the plaintiff) as the executor, and bequeathing the whole of his estate to his friend, Victor Bastard (‘2018 Will’).
In January 2019, the Northern Territory Civil and Administrative Tribunal (‘NTCAT’) appointed the Office of the Public Guardian as the deceased’s guardian for personal and financial matters. In May 2019, NTCAT appointed the Public Trustee as the deceased’s guardian for financial matters and the Public Guardian as the deceased’s guardian for personal matters.
Following the deceased’s death, the Public Trustee wrote to the plaintiff suggesting that the deceased’s capacity to make a will in around December 2018 may have been impaired as he was suffering from dementia. The plaintiff replied by describing the circumstances in which the 2018 Will was prepared
On 14 October 2022, the plaintiff applied for a grant of probate in solemn form for the 2018 Will and the Public Trustee joined as the defendant. Notification of all interested parties is necessary for the grant of probate in solemn form. The Salvation Army and Mr Bastard were notified of the proceedings and both declined to participate.
The matter
The relevant issue In the Estate of Frederick Allwood [2023] NTSC 72 is whether the testator had an awareness of the nature, extent and value of the estate – the second limb in Banks v Goodfellow (1870) LR 5 QB 549.
The solicitor who prepared the deceased’s will on 7 December 2018, submitted that although the deceased suffered from dementia when he executed the 2018 Will:
(a) he understood he was making a will in which he would leave his entire estate to Mr Bastard upon his death;
(b) he was able to comprehend and appreciate that there were others (namely his family members) who might reasonably be thought to have a claim upon his estate, the basis for such a claim and the nature of those persons; and
(c) there were no delusions influencing his will to bequeath his estate to Mr Bastard – the deceased wished to give his estate to Mr Bastard as one of the only people who helped him and cared for him
The deceased estate consisted of around $70000 in the bank and a $280,000 refundable accommodation deposit. At the time the 2018 Will was prepared the deceased stated that he had about $3,000 in the bank and was living in a unit in Nightcliff. There is no evidence as to where the $280,000 came from for the accommodation deposit at the aged care facility, but the deceased did not appear to have any awareness of money or an asset of that value held by him.
The deceased’s estate was not one comprised of multiple properties or a share portfolio which provided him an income and which he might not be expected to know the details of.
Following a discussion of cases that gave some illustration of the situations in which Courts in various jurisdictions found that a testator did, or did not, have testamentary capacity by reference to an understanding of the nature and value of their estate [at 29-35] the Court held that the
evidence establishes that the testator was mistaken as to the value or extent of his property to a real and substantial extent, and throws considerable doubt upon whether he was of sound and disposing mind
In the Estate of Frederick Allwood [2023] NTSC 72 at 36
The decision
The Court found that despite having made a proper assessment, the solicitor who prepared the 2018 Will did not have accurate information about the true nature or value of the deceased’s estate.
“Consequently, her assessment that the deceased had testamentary capacity carries little weight and is insufficient to overcome the considerable doubt about the testator’s testamentary capacity. The facts that the testator had dementia and consequent cognitive impairment and an assessed incapacity to make decisions about financial matters such that a guardianship order was in place are also relevant and support the conclusion that the deceased lacked testamentary capacity when the 2018 Will was prepared’
In the Estate of Frederick Allwood [2023] NTSC 72 at 38
In refusing the application for a grant of probate in solemn form of the 2018 Will the Court concluded the 2018 Will was invalid because the testator lacked testamentary capacity at the time it was prepared and executed.