I sometimes think that I’m on a one person crusade to rid the world of confusion, at least as it relates to law. (If only I could put that to music a la Bob Dylan!) Today my crusade is the confusion around capacity. Before anyone can enter into a legal transaction the person must have capacity, right? But what does that mean?
Capacity has three aspects to it. Two of those aspects are essential for any legal engagement to be valid. Firstly there’s legal capacity. The difference between the various aspects is best illustrated in the context of making a will. In that context, legal capacity means being 18 years or older (although the court can allow a will for a person of a younger age, but rarely does so). This aspect is essential.
Secondly there’s physical capacity. In the context of making a will, physical capacity requires the testator to sign the will (in the presence of two competent and preferably independent witnesses) although, again, there is an exception. The exception is that someone else may sign the will for the testator provided that happens in the presence of and at the direction of the testator.
The third type of capacity is by far the best known. It is so well known that mental capacity (which is sometimes called sanity) can be (wrongly) treated as the only type of capacity. For example, there are statements about “the presumption of capacity” which means that mental capacity is assumed unless disproved. There’s no such thing as a presumption that a person is aged 18 or more, ie there’s no presumption of legal capacity. Mental capacity is also essential.
Mental capacity is well known because it’s most commonly the basis of dispute. (It’s rare that there’s a dispute about the age of the testator or whether he or she signed the will.) And it’s a difficult dispute because it involves a subjective assessment. An example is the case of Van der Meulen. There the court found that a person who had suffered brain damage 23 years earlier but had lived in the community in the meantime, bought and sold real estate in the interim, and purported to make two wills in that time, lacked testamentary capacity. And that’s the rub: the subjective assessment is both time and task sensitive. This means that a finding of mental incapacity in relation to one type of legal transaction does not automatically mean that mental capacity is lacking in relation to another legal transaction. It does not establish lack of mental capacity at a later or earlier date.
Another recent example of the difficulty assessing mental capacity is Estate Cockell; Cole –v- Paisley, which concerned the testamentary capacity of Bill Cockell. At the time he executed his last two wills he suffered delusional thinking in the form of a belief that he had a special relationship with the Kingdom of Belgium. The court concluded that from time to time Cockell plainly lacked testamentary capacity. At the time of his last will a protected estate management order was in place because he was incapable of managing his affairs. Notwithstanding that, the court concluded that he had testamentary capacity and granted probate in respect of his last will.
But whilst acknowledging that assessing mental capacity can be difficult, let’s make sure it’s not confused with legal or physical capacity.