At the outset of nearly every challenge to the validity of a will, one party will allege that there were “suspicious circumstances” surrounding the drafting and signing of the will. However, the legal implications of “suspicious circumstances” are frequently misunderstood: they are not grounds to invalidate a will. Rather, a finding that there were “suspicious circumstances” shifts the burden of proof. The misapplication of this doctrine is grounds for an appeal, as was the case in McLeod Estate v Cole et al, 2022 MBCA 73.

In McLeod, the plaintiffs were the administrators of their estranged father’s estate. The deceased was an elderly retired farmer who was diagnosed with dementia shortly before he died.

In 2009, after his diagnosis of dementia, the deceased sold certain parcels of land to third parties. Following their father’s death, the plaintiffs sued the third party purchasers, the real estate agents, and real estate lawyer, alleging that the deceased lacked capacity to make the sale and that the properties were sold for less than fair market value. Accordingly, they sought to have the sale set aside under the equitable doctrine of rescission.

After a five week trial, the trial judge issued lengthy reasons setting out his findings, including that the plaintiffs had failed to rebut the presumption that the deceased had capacity to enter into agreements of purchase and that the evidence demonstrated that the deceased had full knowledge about the parcels of land when they were sold. In the result, the sale was upheld.

The plaintiffs appealed the decision. Among other reasons, they argued that the trial judge erred in his assessment of the evidence and in the application of legal principles relating to the deceased’s capacity. The Court of Appeal was not persuaded that the trial judge made any error in his assessment of the evidence. However, the Court of Appeal did find that the trial judge misapplied the doctrine of suspicious circumstances. While the error did not affect the outcome of the trial and the appeal was dismissed, the Court of Appeal nevertheless took the opportunity to clarify the doctrine of suspicious circumstances, including how it was misapplied in this case.

• The doctrine of suspicious circumstances was developed in English ecclesiastical courts in respect of proof of wills.
• The doctrine of suspicious circumstances impacts who has the burden of proof of the various elements relevant to proving the validity of a will.
• The leading Canadian on the doctrine of suspicious circumstances is Vout v Hay, [1995] 2 SCR 876.
• The propounder of a will always has the legal burden to prove three requirements: (i) that the will was duly executed in accordance with the formal rules; (ii) that the testator had knowledge and approval of the contents of the will; and (iii) that the testator had testamentary capacity.
• If the propounder of the will can prove that the will was duly executed, a rebuttable presumption arises that the last two requirements have also been met.
• If suspicious circumstances are shown to be present, the presumption is rebutted and the burden shifts back to the propounder of the will to demonstrate knowledge and approval or testamentary capacity, as the case may be.
• There is no closed category of what may constitute suspicious circumstances – it is fact specific.
• The presence of suspicious circumstances does not shift the burden of proving fraud and undue influence: the burden always rests on the party challenging the validity of the will to prove the existence of fraud or undue influence if those allegations are being raised.

The trial judge held that the existence of suspicious circumstances may shift the burden of proving capacity to enter into a contract onto the defendants. The Court of Appeal held that this was a mistake. Contract law and probate law arose from different legal traditions and have their own doctrines and principles. For example, a contract entered into by someone later found to have lacked capacity to do so is not automatically void; rather, it is voidable. In contrast, it is impossible for someone who lacks capacity to make a valid will. There are policy reasons for these differences: a contract for the mutual benefit of the parties should not necessarily be invalidated due to one party’s incapacity. In contrast, since wills are purely donative, its validity is justifiably subject to a stricter level of scrutiny. Because the doctrine of suspicious circumstances was developed in respect of probate and wills, it cannot easily be exported into other areas of law.

Despite finding that the trial judge erred in his application of the doctrine of suspicious circumstances, the Court of Appeal held that this legal error had no effect on the outcome. The trial judge held that there were no suspicious circumstances surrounding the sale of the property, meaning the burden remained (correctly) with the plaintiffs to prove lack of capacity. They failed to do so. As a result, the appeal was dismissed and the sale of the properties was upheld.