Setting aside gifts – mental capacity

The High Court has recently stepped in to set aside gifts made by a donor shortly before his death, and when he was suffering from dementia so his mental capacity was in question.

Not strictly speaking a ‘will dispute’, but readers will recognise some of the issues in Connolly v Connolly & Anor [2017] NICh 8 relating to the donor’s mental capacity as similar to those that can arise in a challenge to a will on the grounds of testamentary capacity.

The facts of Connolly v Connolly

John Joseph Connolly was a farmer. He inherited land from his family in 1954, and married his wife, Maura, in 1956. The couple lived in a small cottage on the lands he had inherited. Maura supplemented income from farming, and paid for improvements to the property they lived in as well as making other contributions. The couple had 7 children, not all of whom got on, with various allegations being made between them. In the years before his death, Mr Connolly made 3 transfers of land to 3 of his sons. The effect of these transfers was to leave Maura, his widow, with nothing when he died. 2 of the transfers were challenged in these proceedings. It was accepted that Mr Connolly was suffering from dementia at the time he died, but there was a dispute about when the transfers of land had taken place, and whether the dementia affected his mental capacity at that time.

The judge overturned the transfers of land.

• It was his view, on the evidence, that the transfers of land had taken place in 2008
• At that point in time, the deceased, Mr Connolly, did not have capacity
• “[The] court however still exists to ensure that the law is upheld and most importantly that the rights of the weak, the vulnerable, and the infirm, both mentally and physically, are protected.” (para 41)

Handing over title deeds is not evidence of intent to transfer

The defendants in the case, 2 of the deceased’s sons, argued that when their father handed over the title deeds to the parcels of land concerned in the 1990s, this was in connection with his stated intention (as evidenced by the defendants) to transfer the properties to his sons. On the evidence, the judge considered that the transfer had taken place in 2008 when a deed had been executed effecting the transfer. It was the judge’s opinion that landowners often handed over title deed to their solicitor for safekeeping. The defendant sons could not rely on the action of their father handing over the title deeds as being an indication of their father’s wishes. This action was certainly not enough to effect the transfer of the land.

There may be incapacity, but not necessarily undue influence

It’s clear from reading the case report that the judge felt that the transfers of land “called out for an explanation”. He recognised that the actions of the deceased, leaving his wife with nothing, were disadvantageous. However, he did not think that there was a relationship between the deceased and the defendant sons that could arouse suspicion that the sons (or one of them) had exerted his influence on the deceased. On that basis, he did not consider there had been any undue influence.

The role of the solicitor in judging mental capacity

The test for mental capacity is the same for a transaction such as the transfer of land between 2 people (as happened in this case), as it is for making a will. Ultimately, the judge felt that the solicitors who had effected the transfers of land should have made enquiries similar to following the Golden Rule when drafting a will –

“ If the solicitor has any doubts about the capacity of the elderly person to give a gift or make a will then the solicitor should ensure that the donor is medically examined. …

Further, the prudent solicitor acting in the circumstances described above will keep a detailed written attendance note of all the steps he has taken to ensure that the donor has capacity and/or the gift is not tainted by undue influence. Memory can be slippery and unreliable. A prudent solicitor will appreciate that it is unwise, if not foolhardy, to have to rely on his or her memory alone should the circumstances of any transaction be challenged in court at a later date.”

In will dispute cases where capacity may be an issue, you should always ascertain what steps the solicitor took when drafting the will to make sure the Testator (or Testatrix) had capacity.