Series on Family disputes relating to mental capacity issues: Testamentary capacity and potential challenges to Wills

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Authored by: Sherlynn Chan and Hazel Wong

How do we break the Asian taboo on the topic of death and Wills? With the increase in highly publicised contentious probate proceedings among tycoons, more people in Hong Kong are open to considering and talking about end-of-life issues, including succession planning and Will preparation.

However, when there is a Will, there is a way to challenge it. Testamentary capacity is one of the grounds of such challenges.

In Hong Kong, the Courts adopt the test for assessing testamentary capacity established in the UK landmark authority, Banks v Goodfellow (1870) LR 5 QB 549, which provides that a testator shall:

• understand the nature of the act and its effects;
• understand the extent of the property of which he is disposing;
• be able to comprehend and appreciate the claims to which he ought to give effect; and
• be free from disorder of mind or delusion that would poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties, which would influence his will or bring about a disposal of his property that would not have been made if the mind had been sound.

Furthermore, the “golden rule” was introduced in a later UK case, Kenward v Adams (1975) The Times 29 November 1975, to provide guidance to solicitors in preparing Wills. It was held that when a solicitor is drawing up a Will for an aged testator or one who has been seriously ill, it should be witnessed or approved by a medical practitioner, who ought to record his examination of the testator and his findings. If there was an earlier Will, it should also be examined and any proposed alteration should be discussed with the testator.

In the Hong Kong decision of Re Estate of Au Kong Tim [2018] 2 HKLRD 864, the Court of Appeal also highlighted the importance of ascertaining the testamentary capacity of testators and following the “golden rule”. The testator in this case had made two Wills in 2002 and 2008 respectively while the latter’s validity was in question in relation to the testator’s testamentary capacity due to severe illnesses. Under the 2002 Will, the testator’s residuary estate was given to his 6 grandchildren (being 2 grandsons and 4 granddaughters) in equal shares. However, in the 2008 Will, the residuary estate was left to the testator’s 2 sons and 2 grandsons in equal shares.

The Court held that the solicitors, while handling the 2008 Will, failed to follow the “golden rule” and the checklist set out in “Assessment of Mental Capacity: A Practical Guide for Doctors and Lawyers” published by the British Medical Association and the Law Society designed to ascertain whether the testator had the relevant Banks v Goodfellow testamentary capacity. As a result, the Court was not prepared to draw an inference that the testator was able to understand the relevant matters of his Will. As testamentary capacity was not established, the 2008 Will was therefore rendered invalid and the 2002 Will was accordingly upheld.

The “golden rule” does not lay down the law, it provides a guidance of prudence for solicitors. Thus, the mere failure to follow the Checklist or the “golden rule” would not automatically render a Will invalid. The Court would decide on the facts and evidence on a case by case basis¹.

As illustrated in a widely publicised case in Hong Kong, Re Estate of Lam Chok Wai [2020] HKCFI 3047, a challenge to the testamentary capacity of the testator can be a long battle with significant impact on the outcome of the distribution of the estate.

In this case, Mr. Lam, the owner of the well-known Tai Lin chain of retail shops for electrical and electronic appliances, passed away in 2005. Mr. Lam had 2 children with his wife, and 3 children with a Madam Tam, his co-habitee.

In 1987, Mr. Lam made a Will naming his wife and their 2 children as the beneficiaries. However, in 1999 and 2005 respectively, Mr. Lam made two other identical Wills giving his entire estate to Madam Tam, to the exclusion of his 5 children.  The wife and her 2 children challenged the validity of the 1999 and 2005 Wills based on the lack of testamentary capacity of Mr. Lam at the time of execution.

The High Court held that Mr. Lam had no capacity to make the 1999 and 2005 Wills as he lacked the capacity to appreciate his moral responsibility to look after his children.  In doing so, the Court referred to medical evidence that Mr. Lam had 2 strokes which affected his memory, and the assessment by the neurologist that he had no ability to manage a large company business.

This judgment made 15 years after Mr. Lam’s passing, is being appealed by Madam Tam. The decision on the appeal is still pending at the time of writing this article.

In order to minimise the risk of prolonged and costly litigation after the passing of a testator, it is important to seek legal advice on how to execute a proper and well thought-out Will. It is also prudent to involve medical practitioners in the assessment of testamentary capacity of elderly or seriously-ill testators, with full medical history provided to the doctor.

Our award-winning Family and Private Wealth team at Deacons is experienced in handling vulnerable client and contentious Wills and probate matters. Please reach out to us if you would like to know more.

¹ Re Estate of Wong Yin Sheung [2019] HKCA 452