Pure Economic Loss To Contractual Parties And Third Parties From Professional Negligence (wills)

Question 0

General rule

Answer 0

Where a person does not receive a benefit which a testator intended to bestow upon them because of the carelessness of the professionals advice, a duty will arise.

Question 1

CLA ss 5O and 5P

Answer 1

As per (Rogers v Whittaker common law position of what you would need to establish a duty).

Question 2

Policy concerns

Answer 2

• When you have a lawyer/client relationship the normal duty is owed directly to the client (both in contract and tort). The only exception is wills where the duty is extended.
• Technical area of law; if you assume a responsibility then it is reasonable to pursue your obligations under that relationship (even when it extends to a third party). Technical specialist.
• if you extend the duty there is not indeterminate liability as there are finite beneficiaries.

Question 3

Hawkins v Clayton

Answer 3

Will drawn up in favour of a particular beneficiary who was also the executor.

Testator wanted to redraft it but will was in possession of the lawyer and testator dies before being able to make relevant changes.

Beneficiary and executor unaware of their status; bequeathed house falls into disrepair. They have suffered pure economic loss.

Does the defendant (lawyer) owe a duty of care to the executor/beneficiary?

Deane; discharge of duty (special skill) so yes. In administering the will the lawyer is required to complete the relationship (executor is the legal representative after death) Loss is only ever to be PEL.

Brennan; bailee argument; duty is limited to ensuring the will can be executed properly, thus fulfilling legal obligations to client.

Question 4

Hill v Van Erp

Answer 4

Defendant solicitor prepared a will which favoured the plaintiff.

Legal requirement that a will be witnessed properly and defendant did not comply with regulation.

Testator made to look like they died intestate and therefore the beneficiary did not receive what was bequeathed to them.

Duty found to be owed to a beneficiary despite the fact the loss is a mere expectancy.

Policy consideration;
- beneficiary has no rights under any other head of law, genuine gap.

• interests of the deceased and the beneficiary are the same.
• the courts are moving away from the reliance issue towards the Perre v Apand argument. (beneficiary does not have to rely and often are unaware of their status)

Question 5

White v Jones

Answer 5

English case - not Australian law.

Lawyer was asked to draw up a will but failed to do so.
Testator died intestate but managed to give instructions to lawyer regarding estate.

Similiar policy considerations as discussed in Hill v Erp but used Caparo test;

• reasonable foreseeability,
• remoteness and
• whether it is fair, just and reasonable.

Obviously, the testator needs to be deceased before the lawyer owes a duty to the executor or beneficiary.