CASE NOTE - wills - BADENACH V CALVERT PDF

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BADENACH V CALVERT
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CASE NOTE

BADENACHVCAL VERT1 Ful lc i t a t i o n

Ba d e n a c hvCa l v e r t[ 2 01 6]Hi ghCo ur tofAus t r a l i a1 8

Tr i a l

Ca l v e r tvBa d e n a c h[ 2 01 4]Sup r e meCo ur to fTa s ma ni a61

Ful lCo ur t

Ca l v e r tvBa d e n a c h[ 2 01 5]Sump r e meCo ur to fTa s ma ni a 8

Pa r t i e s

Ro be r tBa d e na c h& An or( Ap pe l l a nt s / s o l i c i t or ) Ro g e rWa y neCa l v e r t( Re s po nd e nt /I n t e nd e dBe ne fic i a r y )

Da t e Cou r t Cor a m

1 1ofMa y2 01 6 Hi ghCo ur to fAu s t r a l i a

French CJ, Kiefel J, Gageler J, Keane J & Gordon JJ

BACKGROUND INFORMATION I

1 Ba de na c hvCa l v e r t[ 201 6 ]HCA18

I IBRI EFSTATEMENTOFMATERI ALF ACTS J e ffe r yDod dr i d g e( C)c on t r a c t e dRob e r tBa d e n a c h( S)a sh i ss o l i c i t o rf o rt h ep ur p os e so f p r e pa r i n gh i swi l lwi t ht h ee ffe c toft r a n s f e r r i n gh i sc o mpl e t ee s t a t et oRod g e rCa l v e r t( I B) ,t h e s ono fh i sd ef a c t o p a r t ne ro fma n yy e a r s .Thep r i n c i pl ea s s e t so ft hee s t a t ewe r et wopr op e r t i e swhi c hwe r eo wn e ra s t e na nt si nc ommon( e q ua ls ha r e s )wi t hRod g e r .Du r i n gt h et i met ha tt hewi l lwa sdr a f t e dJ e ffe r y wa s77a ndt e r mi na l l yi l la nds ub s e q ue nt l yd i e dwi t hi nt hes a mey e a r . Hi sd a u gh t e rf r om ap r e vi o usma r r i a g ea p pe a l e dt h ewi l lu nd e rt heTestator's Family Maintenance Act 1 91 2Ta s ma ni a ,( TFM Ac t )a ndwa ss uc c e s s f u li no b t a i n i n gac o ur to r d e rt ha t 2 p r o vi s i onbema def orhe rou to fhe rf a t he r ’ se s t a t e . Roger brought proceedings against the solicitor and his firm for negligence as they failed to advise Jeffery on the probability that his daughter would make a claim under that act. He claimed that the solicitor should have advised to convert both the testator's and his own interests in the two properties to joint tenancies, so that those properties would pass him by survivorship, in order to avoid the claim made under the TFM Act. Or alternatively advising roger to make an inter vivos gift to his intended beneficiary. I I ILI TI GATI ONHI STORY On 24th of November 2014 Blow CJ3 at trial inferred that had if S had asked any existing family member that could make a claim, C would have disclosed the existence of his daughter and then S would have advised C of the risk to his estate of successful proceedings being brought under the TFM Act. That might have led C to make further enquiries about whether anything could be done to protect the IB. S would have been obliged to advise about the possibility that the properties could be held by the client and the respondent as joint tenants. However as there was no enquiry, S was not under a duty to volunteer advice about creating joint necessary and no duty was owed by S to IB. The Full Court of the Supreme Court of Tasmania4 (Tennent, Porter and Estcourt JJ) on the 25th of July 2015. Found that there was a duty to enquire of the client whether he had any children,

2 Doddridge v Badenach [2011] TASSC 34.

3 Calvert v Badenach [2014] TASSC 61 4 Calvert v Badenach [2015] TASFC 8

and to advise of the potential for a claim under the TFM Act and the impact such a claim might have upon his estate, but also to a duty to advise of the possible steps he could consider taking in order to, avoid that impact occurring even if the client did not make any enquiry about those steps. They found that the duty owed by S to the IB was coextensive with the duty owed to the C under the terms of his retainer, or in tort. The IB, was able to redefine the loss and now claimed "the loss of an opportunity to avoid a detriment" it was held that there was a more than negligible chance that C would have taken action to avoid a possible claim. Estcourt J held that the IB need only establish on the balance of probabilities C might have taken steps to protect the two properties from a claim under the TFM Act existed. I VLEGALI SSUES -

If the solicitor had a duty to advice the client to convert both the testator's and his own interests in the two properties to joint tenancies. Or alternatively advise to make an inter vivos gift to his intended beneficiary.

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Whether a duty was owed to the intended beneficiary for loss of opportunity VAPPLI CABLELAW

Hill v Van Erp5 : compensation was claimed for loss of property due to negligence by the solicitor (Mrs. Hill/S) acting for testatrix (C). The solicitor asked Mrs. Van Erp's husband to sign as the second attesting witness in the will. Which resulted in property that was meant to pass on to Mrs. Van Erp (B) rendered void under s 15(1) of the Succession Act 1981 (Q). S must act with care and skill to ensure her C's testamentary intentions are carried out. the duty found to be owed to B was found in the retainer between the S and C. It was held that the interests of C and B in those intentions were relevantly the same. Thus a duty was owed to B as it would not involve any conflict with the duties owed by S to C. Hawkins v Clayton6: “there could be no doubt that a solicitor owes a duty to his or her client in both contract and tort. The scope of a solicitor's duties with respect to the latter will usually be set by the terms of the retainer” VIAPPLI CATI ONOFTHELAW TOTHEF ACTS Fr e nc hCj ,Ki e f e la ndKe a n eJ :

5 Hill v Van Erp (1997) 188 CLR 159 6 Hawkins v Clayton (1988) 164 CLR 539 at 544-545; [1988] HCA 15.

They found it was necessary to consider the events which would have taken place had the solicitor exercised the requisite professional skill and care. On receiving the original instructions S would have observed that no provision had been made for any family member. An inquiry should have been made which would have led to the knowledge of the existence C’s daughter. It was clear that the solicitor had a duty to inform C to a possible claim might be brought by the daughter under the TFM Act. However, C was unlikely to have been able to provide S with information concerning the personal circumstances of his daughter. As he had no contact with her since 1973. In these circumstances the solicitor would be obliged to inform the client that he could not provide advice as to whether the daughter would qualify under the TFM Act for provision out of the client's estate. The solicitor would further advise that it could not be known whether the daughter would in fact make a claim as not all persons who are entitled to bring legal proceedings do. The retainer did not specify advice about how to avoid possible claims by making an inter vivos transaction of property interests and thus was inconsistent with Hawkins v Clayton. Hill was found to be inapplicable as that the interests of C and IB in those intentions were not found to be ‘relevantly the same’. “From the solicitor’s perspective it could not be assumed that the client would need this latter advice. The respondent’s case, understandably, is not put on the basis that the client, on hearing that a claim by the daughter was a mere possibility, would have instructed the solicitor that he wished to take all lawful steps to defeat such a claim. Such an approach is understandable because there is no way of knowing what the client’s instructions would have been”7 They also found that IB could not meet the statutory causation requirements of showing that the solicitor’s failure was the cause of him not receiving the client’s estate Gageler J: Agreed with the majority, but found the reasoning of the Full Court of the Supreme Court of Tasmania errored in treating the scope of the duty of care owed by the solicitor to IB as coextensive with the scope of the duty owed to C. He found that the duty owed to C is and more narrowly confined to preparing the will based on the retainer and rather than a broader duty to take reasonable care for contingent interests. the solicitor’s duty was to carry out the client’s instructions, to ensure that the IB was given a legally effective testamentary gift of the client’s estate8. He held that there may be a duty of inquiry but not to advice ways to avoid such possible claims. Gordon J:

Agreed with the majority but held that S did not owe a duty of care to the IB because the interests of C and IB were not the ‘same, consistent or coincident’. it was not clear what C would 7 Badenac hvCa l v e r t[ 2016]HCA1 8a t[ 3 1] 8 inbd at [64]

have done if he had inquired about other family members, and it is possible that he could have made a different decision. He held that even if there was a breach and a duty was owed, the IB failed to adduce evidence that proves C would have taken steps to protect the IB interests but only was able to show that it was more probable that he would have received the entirety. VI IDECI SI ON To set aside the orders made by Full Court of the Supreme Court in Tasmania order that the appeal be dismissed with costs. VI I IRATI ODECI DENDI It was held that there was no duty owed to respondent by the solicitor to advise on ways to circumvent a possible claim under the TFM act for varying reasons. It was by majority found to because the solicitor had no reason to think that the eventual claim was likely to occur or it could not be proved that the client would have taken steps to defeat a possible claim, the respondent could not prove causation and did not meet its requirements and furthermore their intentions were not found to be consistent with the test of Hill v Van Erp....