Gary Alexander MacDougall v Lloyd Philip Thomas & Ors

A will may be valid even if its dispositions appear unfair, surprising or irrational. Testamentary capacity, knowledge and approval, and testamentary undue influence are distinct questions. Testamentary undue influence requires proof of coercion which overbears the testator’s volition; persuasion, gratitude and dependence are insufficient. For lifetime gifts, presumed undue influence requires a relationship of influence and a transaction calling for explanation. An attorney must comply with the limited gift-making powers under the Mental Capacity Act 2005 and fiduciary duties. A specific legacy is not adeemed where an unauthorised transaction can simply be reversed, but it is adeemed where third-party rights prevent reversal. Compensation for an attorney’s breach may fall into residue rather than pass under a specific legacy.

The claimant challenged the 2011 Will of Jeanne Emily MacDougall, which substantially benefited her daughter Sandra and son-in-law Philip, and sought probate of an earlier 2008 Will. He also challenged lifetime gifts, property transactions and expenditure made by Jeanne or by Sandra and Philip under a lasting power of attorney.

The issues included testamentary capacity, knowledge and approval, testamentary and inter vivos undue influence, proprietary estoppel, mental capacity for lifetime gifts, attorney duties and ademption. The court also considered the validity of a 2013 Codicil and the consequences of transactions affecting specifically bequeathed property.

1. 2011 Will. The court found that Jeanne had testamentary capacity. Although the absence of contemporaneous medical evidence, the Facebook messages, Philip’s preparatory email and the unusual circumstances raised a real doubt, the evidential burden was discharged through the expert evidence and the wider factual evidence. The Banks v Goodfellow criteria were transaction-specific and did not require a complete mental balancing of all past gifts and family benefits.
2. Applying a holistic approach to knowledge and approval, the court found that Jeanne understood that the practical effect of the 2011 Will was to leave her estate to Sandra and Philip. Suspicious circumstances existed, but they were dispelled. The court rejected testamentary undue influence: Philip and Sandra had persuaded Jeanne, but had not coerced her or overborne her volition.
3. Lifetime transactions. The transfers of Peacehaven and Argyle Road were transactions calling for explanation. The presumptions of undue influence were not rebutted because Jeanne lacked independent advice and Philip controlled the arrangements. The transfers were rescindable, subject to further submissions concerning Argyle Road and third-party interests. The basement works were not tainted by undue influence.
4. The gift of 21 Avenue Crescent in 2015 was voidable for lack of capacity and undue influence. Jeanne had misunderstood which property she was giving and could not assess her wider financial needs. As the property remained with Philip and Sandra, there was no ademption; if avoided, it passed to them under the 2011 Will.
5. Philip breached his fiduciary duties by granting the ground-floor lease at 22 Avenue Gardens at an undervalue. The resulting £145,000 compensation claim formed part of residue. The sale of 45 Berrymead Gardens at market value lawfully adeemed its specific legacy. Unauthorised use of Jeanne’s bank accounts breached fiduciary duties and required an account, with compensation forming part of residue.
6. The 2013 Codicil was valid. The claim for proprietary estoppel concerning 21 Avenue Crescent failed. The court pronounced in favour of the 2011 Will and directed a further hearing on the account, quantum, consequential matters and costs.