Intentions, promises, reliance, and capacity by Emile Yusupoff
The High Court has clarified matters relating to the legal concepts of proprietary estoppel and testamentary capacity in the case of James v James and others  EWHC 43 (Ch). In short, proving that you are entitled to property on the basis of a promise and retrospectively showing that a will is invalid due to lack of capacity are both high hurdles
The case concerned the estate of Charles Frederick Allen James, who died on 27 August 2012 having made a will dated 16 September 2010. A self-made man, he had built up a farming and haulage business in Dorset, acquiring parcels of land on the way. After giving some land to his daughter, Karen, in 2007 and some more land and the haulage business to his son, Raymond (known as Sam), his will left the remaining land to Karen, his other daughter, Serena, and his wife, Sandra.
Sam sought to contest his father’s will on two bases. Firstly, he claimed that he was entitled to a greater part of the land given to Karen on the basis of a proprietary estoppel. Sam claimed that his father had promised the land to him, which caused Sam to act to his detriment in reliance on this promise by working on the farm and in the haulage business rather than pursuing another career.
Sam also claimed that his father’s will was invalid on the basis that he had been suffering from dementia at the time.
Intentions versus promises:
Matthews J noted that the fact that Sam could not demonstrate any particular promise or act creating an expectation was not fatal to his case. What matters is “the totality of what passed between the parties” and whether “a reasonable man would have taken it to have been intended” that there had been an effective assurance. Following Thorner v Major  1 WLR 776 and Walton v Walton  CA Transcript No 479, this is determined contextually but always requires unambiguous assurance that appears to have been intended to be taken seriously.
Whilst the court accepted that Sam’s father may have indicated that he intended to leave something to Sam, this was insufficient for assurance as, “a statement of current intentions as to future conduct is not a promise of that conduct”. Whilst Sam believed he had been promised the farm, this was irrelevant. It was precisely Sam’s eagerness to inherit that meant that he unreasonably believed his father had made a promise.
More strikingly, it was accepted that a draft will had been prepared, which would have left a significant portion of the land to Sam. Whilst this would never have been a valid will (it had not been signed), it also did not count as an assurance. In fact, even if it had been signed a previous will is insufficient for a promise. The fact that new wills can supplant old ones means that they are statements of current intent, not promises.
Taken together, this judgment clarified that English law is unambiguous that a landowner may express present intention to leave property by will to someone without making any promise that binds the property in future.
Evidence needed for reliance:
Matthews J went on to consider whether Sam had acted in reliance. Here, too, the difficulty of proving proprietary estoppel was emphasised.
Sam claimed that, by working on the farm for low wages for several decades rather than pursuing another career, he had acted to his detriment in reliance on his father’s purported promise. The court did not find this convincing. Whilst Sam had worked for low wages compared to other jobs, he had worked for the same rate as the other farmworkers. This contrasted with typical estoppel scenarios where people have worked for nothing in reliance.
In any case, not only had Sam eventually been made a partner, and had even received the (profitable) haulage business already, but, the court noted, there was no positive evidence to show Sam would not have worked (hard) for the family business in any scenario. Notably, Matthews J went out of his way to note that he was “not impressed” with the earlier judgment of Suggitt v Suggitt  WTLR 1607, which had allowed a proprietary estoppel claim without positive evidence that the claimant would have chosen an alternative career had it not been for the assurance they claimed they relied upon.
Any hopes that Suggitt may have raised about making it easier to claim for proprietary estoppel seem to have been quashed by this judgment.
Wills, statutes, common law, and dementia:
At common law the test for posthumously determining whether someone lacked capacity to make a will had remained consistent for over a century following the case of Banks v Goodfellow (1870) LR 5 QB 549. To be deemed to have capacity a testator needed:
(i) to understand the nature of his act and its effects;
(ii) to understand the extent of the property being disposing of;
(iii) to comprehend and appreciate the claims to which ought to give effect; and
(iv) to not be affected by a mental disorder that:
a. impacts on his relationships, sense of morality, or faculties; or
b. that caused him to have delusions that influenced how he distributed his property.
The question arose, however, of whether the Mental Capacity Act 2005, which applies to the position regarding determining capacity whilst a testator is still alive, applied to the dead. It was also unclear whether the Act changed the test at all or simply rephrased it.
In reviewing the case law to date, Matthews J followed the decision in Walker v Badmin  EWHC 71 (Ch),  WTLR 493 in preference to the contrasting views set out in Bray v Pearce (unreported, 6 March 2014).
The test under the Act was, indeed, different to that under common law. Whilst at common law, the burden of proving capacity lay on the propounder of the will, the Act presumes capacity. Under common law it is not necessary for the testator to remember and understand all relevant information, whereas it is under the Act. And, whilst the Act requires the testator to understand, use or weigh information as to the reasonably foreseeable consequences of the choices open to him, common law does not.
Concurring with the judgment in Walker, the court emphasised that there was nothing in the act that explicitly states it applies to the dead, which Parliament could have included if it felt it appropriate. As to the apparent disparity between there being two tests, it was noted that this needs to be taken in the context of the Court of Protection and the Chancery Division having different functions and mission statements.
Given the past conflicts between cases, this decision may provide important clarity for the future.
On the facts and (the balance of) expert evidence, Mr James was found to have capacity and to have executed a valid will under the Banks v Goodfellow test.
by Emile Yusupoff, Paralegal
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