Lofts v Lawcover Insurance Pty Limited

Catchwords: PROFESSIONAL NEGLIGENCE - legal - advice in connection with execution of will - whether failure to explain possibility of severance of joint tenancy - whether duty of care owed to deceased’s child – disappointed beneficiary
OCCUPATIONS — Legal practitioners — Solicitors — Professional negligence
NEGLIGENCE — Causation — Loss of chance
NEGLIGENCE — Essentials of cause of action — Accrual of — When damage suffered
WILLS AND ESTATES - whether terms of will reflected instructions of testator - evidence of instructions

Legislation Cited: Civil Liability Act 2002 (NSW), s 5B, s 5D, s 5E
Civil Liability (Third Party Claims Against Insurers) Act 2017
Family Law Act 1975 (Cth), s 90DA
Real Property Act 1900 (NSW), s 97
Uniform Civil Procedure Rules 2005, r 42.1, r 42.2

Cases Cited: Badenach v Calvert (2016) 257 CLR 440
Carr-Glynn v Frearsons [1999] Ch 326
Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm)
Hill v Van Erp (1997) 188 CLR 159
Lucantonio v Sticher [2014] NSWCA 5
R Lawyers v Mr Daily [2025] HCA 41; (2025) 99 ALJR 1504
Smeaton v Pattison [2002] QSC 431
Tabet v Gett [2010] HCA 12, (2010) 240 CLR 537
Vagg v McPhee [2013] NSWCA 29
Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375

Category: Principal judgment

Parties: Alexander Lofts (plaintiff)
Lawcover Insurance Pty Limited (defendant)

Representation: Counsel:
Mr I Griscti (plaintiff)
Mr S Philips (defendant)
Solicitors:
Wyatts Lawyers (plaintiff)
Wotton Kearney (defendant)

File Number(s): 2024/00447197

Publication restriction: Nil

JUDGMENT

1. On 29 July 2016, the late Mr Jeffrey Lofts (Mr Lofts) and Ms Regina Miller (Ms Miller) executed wills which had been prepared by Atkinson Vinden Lawyers (AVL). Mr Lofts and Ms Miller had been in a de facto relationship since 1994. They had no children together, but had children from prior relationships. The plaintiff, born in 1984, is the only child of Mr Lofts.

2. Mr Lofts and Ms Miller had resided in a property at Forster, New South Wales, which they owned as joint tenants (the Forster Property). The wills prepared by AVL were in broadly similar terms to each other. Each provided for the survivor of Mr Lofts and Ms Miller to have a conditional, portable life estate in the Forster Property, remainder to their own child or children from their respective earlier relationships.

3. Mr Lofts died on 23 January 2023. As the Forster Property was held in joint tenancy, it did not form part of his estate and Ms Miller succeeded to the whole of his interest by operation of the principle of survivorship. The plaintiff, who had been told by his father that he would succeed to a half interest in the Forster Property on Ms Miller’s death, learned in 2024 that he would not acquire any interest in the Forster Property at all.

4. AVL went into liquidation on 12 December 2023. The current proceedings are brought against the defendant, Lawcover Insurance Pty Limited, as the insurer of AVL, pursuant to the Civil Liability (Third Party Claims Against Insurers) Act 2017 (the Claims Act) arising from the alleged negligence of its insured, AVL.

5. The plaintiff alleges the following:

6. AVL owed contractual and common law duties to Mr Lofts and a complementary common law duty to the plaintiff:

(a) to exercise reasonable care and skill in the provision of legal services pursuant to its retainer; and (b) to act for Mr Lofts and Ms Miller in relation to estate planning generally, including providing advice regarding courses of action and documents recommended.

2. In breach of those duties, AVL:

(a) failed to inform Mr Lofts and Ms Miller that the fact that the Forster Property was held in joint tenancy meant that it would not enter the estate of whichever of them predeceased the other, with the effect that those parts of the wills then being drafted, which provided that a remainder interest in the Forster Property would eventually pass to the heirs of the first to die, would be ineffective; and (b) failed to inform Mr Lofts and Ms Miller that the joint tenancy could be severed by agreement between the two of them, or unilaterally by either of them by adopting a simple procedure, being the registration of a transfer that would sever the joint tenancy, at insignificant expense and without affecting any other aspect of their wills.

3. As a result of those breaches, Mr Lofts took no steps to sever the joint tenancy, which it may be inferred he would have taken, in order to give effect to the evident scheme of the wills.

4. The plaintiff has suffered loss as a result, being the value of the remainder interest in half of the Forster Property, to which he would have been entitled, had Mr Lofts’ will been prepared in accordance with his testamentary intention.

5. For the reasons which follow, I have found that the plaintiff is entitled to succeed. I have assessed his damages at $510,000 but have not awarded any pre-judgment interest. As the plaintiff has been successful, he is prima facie entitled to costs as assessed or agreed on the ordinary basis. I will, however, give the parties an opportunity to reach agreement on a costs order, or to seek a special costs order, prior to making any order for costs.

Evidence

7. The plaintiff relied on two affidavits affirmed by him, together with expert valuation reports of Tom McDouall and expert actuarial reports of Corey Plover. The defendant relied on affidavits from Ms Leora Tius and Ms Miller and the expert reports of David Bird (valuation) and Bruce Thomson (actuarial). Each of the plaintiff, Ms Tius and Ms Miller was cross-examined. The valuation experts were not far apart in their valuations and were not required for cross-examination. The actuarial experts agreed on a relevant discount rate in a joint report dated 5 March 2026 and were also not required for cross-examination.

Facts

8. There was little dispute as to the course of events. Mr Lofts and Ms Miller commenced living together in 1994. The plaintiff was then 10 years old and he is Mr Lofts’ only child. Ms Miller also has two children from a previous relationship.

9. Over the course of their relationship, Mr Lofts and Ms Miller bought and lived in three properties – a property in Mona Vale (in about 1999), a property in Warriewood, where they constructed a residence (in about 2004-05) and the Forster Property (in 2015). Both the Warriewood property and the Forster Property were held by Mr Lofts and Ms Miller as joint tenants.

10. Mr Lofts and Ms Miller kept separate finances, in terms of investments, but they shared mortgages and living and household expenses, to which they both contributed. Mr Lofts had superannuation, but Ms Miller did not.

11. There was some evidence that, prior to their acquisition of the Mona Vale property, Mr Lofts had told Ms Miller that he attributed his then lack of real assets to having held property as a tenant in common with his former wife. He apparently considered that that form of co-ownership had caused his loss of any interest in that property when he and his former wife divorced. I accord that evidence little weight. If Mr Lofts ever expressed such a view, there does not appear to be any rational basis for it. If it were explained to him that tenancy in common did not have that effect, it is difficult to see how he would have adhered to that view. In any event, the highest that evidence rises is that sometime prior to about 2005, Mr Lofts held that belief.

12. The plaintiff lived in Sydney but he maintained a close relationship with his father prior to his death. Mr Lofts often visited the plaintiff and his family in Sydney and the plaintiff and his family stayed with Mr Lofts and Ms Miller at the Forster Property a couple of times a year.

13. The plaintiff gave unchallenged evidence, which I accept, that on a number of occasions over many years, Mr Lofts told him that he wanted his assets to end up with the plaintiff when he died. He also said to the plaintiff that all of his assets would eventually be the plaintiff’s. There is no evidence that Mr Lofts ever changed his mind. The period over which Mr Lofts made these statements to the plaintiff appears on the evidence to have included the period during which he and Ms Miller owned the Warriewood property and the Forster Property in joint tenancy.

14. By 2016, Mr Lofts had retired and he and Ms Miller decided to update their wills. Mr Lofts and Ms Miller first instructed AVL to prepare wills on their behalf in 2005. They approached AVL to update their wills and met with their solicitor on 18 March 2016.

15. The solicitor’s file note of that meeting, which was redacted due to a claim for privilege that I was not asked to review, relevantly recorded:

“File Note

…

Defacto [sic] relationship

…

Jeffrey – previously married, divorced around 1998, no further arrangements in place

Child of that marriage – [name of the plaintiff and his date of birth] [plaintiff’s occupation]

Grandchildren:

[the plaintiff’s children and their actual or pending date of birth were listed]

Regina – [redacted]

ASSETS

| 1. Principal Residence – [the Forster Property] (Joint Tenants) | $800,000 | | [Redacted] | | 4. Honda Civic (Jeffrey) | $1,000 | | 5. Accounts: | | | a) CBA (Transaction Acc) (Jeffrey & Regina) | $100,000 | | | [Redacted] | | | e) CBA (Savings) (Jeffrey) | $6,000 | | | f) E-Trade CBA (Jeffrey) | $26,000 | | | g) Inheritance coming shortly from mother’s estate (Jeffrey) | $200,000 | | | h) Local Gov Super – commuted to cash (Jeffrey) Binding Nomination to Alexander | $960,000 | | | i) REST – commuted to cash (Jeffrey) Binding Nomination to Alexander | $50,000 | | 6. Shares | | | [Redacted] | | | k) Jeffrey | $46,000 |

Executors

Jeffrey – appoints Regina, then Alexander as substitute

Regina – [redacted]

…”

16. On 18 May 2016, by email AVL sent a covering letter to Mr Lofts and Ms Miller, a draft will for each of them and a costs disclosure. The costs disclosure, which the parties agreed recorded the solicitors’ retainer, described the work they would perform as follows:

“What we will do for you

To act for you in relation to estate planning generally including receiving instructions; general discussions and advice regarding courses of action and documents recommended; preparation of updated Wills; all necessary attendances including attending you on explanation and signature and reporting to you.”

17. The covering letter relevantly provided:

“3. You will grant to each other a right to continue to reside in your principal place of residence until death or re-marriage, following which your respective shares in the property will form part of your residuary estates.

4. The remainder of your estates shall pass to your respective children in equal shares. If any of your children predecease you, then their share of your estate shall pass to their children in equal shares.”

18. The wills were executed on 29 July 2016. On 3 August 2016, AVL sent copies of the wills to Mr Lofts and Ms Miller by express mail. The covering letter relevantly provided:

“We note that you have not sought from us (and we have not given) advice on the capital gains tax implications of the various appointments and gifts in your Wills. The Wills have not been prepared with a view to avoiding or minimising potential capital gains tax.”

19. There were no other exclusions referred to in the 29 July 2016 covering letter.

20. As indicated above, Mr Lofts died on 23 January 2023 and probate was granted in respect of his will on 17 July 2023. Ms Miller was appointed executor of Mr Lofts’ estate.

21. On 23 June 2023 AVL’s successor, Vinden Lawyers, commenced operation. AVL went into liquidation on 12 December 2023.

22. In February 2024, the plaintiff made enquiries of Vinden Lawyers concerning the title to the Forster Property. He was concerned about the complexities that might arise if Ms Miller moved into aged care. In March 2024, Vinden Lawyers informed him that the Forster Property had been held in joint tenancy and therefore did not form part of Mr Lofts’ estate.

23. Excluding any interest in the Forster Property, the plaintiff eventually received cash assets to the value of $639,473 (less tax) from Mr Lofts’ estate.

The Will

24. Four features of Mr Lofts’ will (the Will) are notable. First, Ms Miller was appointed executor and trustee, with the plaintiff to act as executor and trustee if she predeceased Mr Lofts or was unwilling or unable to act or continue to act. Secondly, it provided a gift to Ms Miller of a portable beneficial life estate in Mr Lofts’ interest in the Forster Property. That gift was to be held on trust for her by Ms Miller in her capacity as trustee. Thirdly, the gift was conditional. Fourthly, the residuary estate passed to the plaintiff.

25. Clause 3 of the Will provided:

“3. I GIVE my share or interest of the principal residence part owned by me at the date of my death, being at present [the Forster Property] or in such other property as, at the date of my death, is or has been my principal place of residence together with all my furniture, furnishings and articles of domestic use or ornament in that residence at the date of my death (together, ‘the property’) to my Trustee UPON TRUST to permit REGINA to use, occupy and enjoy the property during her life or until she sooner marries or enters into a permanent de facto relationship (“remarriage”) on the following conditions:

…”

26. There then followed, at cl 3(a) to (e), a page of conditions which related to maintaining the property (as defined), the payment of taxes and rates, the maintenance of insurance as well as a detailed mechanism for the Trustee to sell the Forster Property and apply the proceeds to substitute accommodation for Ms Miller to be held on trust on the same terms. It also provided that, if not all of the proceeds of sale were necessary to purchase the substitute property, the surplus would fall into and form part of Mr Lofts’ residuary estate. Similarly, on the death or remarriage of Ms Miller, the property or any substitute residence would fall into and form part of Mr Lofts’ residuary estate.

27. Finally, cl 5 of the Will provided that Mr Lofts gives all the rest of his real and personal estate to the plaintiff, provided the plaintiff survives him by more than 30 days. If the plaintiff does not so survive him, the residuary estate passes to the plaintiff’s children.

28. Ms Miller executed a will of her own on the same day. Clause 3, including sub-clauses (a) to (e), was relevantly identical to the Will, save for the substitution of a conditional gift to Mr Lofts in place of the conditional gift to Ms Miller in Mr Lofts’ will. Ms Miller further made provision for the gift of certain items of jewellery to her daughter and granddaughter and otherwise gifted her residuary estate to her two children on similar terms to those of Mr Lofts’ gift to the plaintiff in cl 5 of his will.

Liability

Duty of care

29. In Hill v V**an Erp (1997) 188 CLR 159 (Van Erp), Brennan CJ stated (at 167-8):

“Most testators seek the assistance of a solicitor to make their intentions effective. The very purpose of a testator’s retaining of a solicitor is to ensure that the testator’s instructions to make a testamentary gift to a beneficiary results in the beneficiary’s taking that gift on the death of the testator. There is no reason to refrain from imposing on a solicitor who is contractually bound to the testator to perform with reasonable care the work for which he has been retained a duty of care in tort to those who may foreseeably be damaged by carelessness in performing the work. The terms of the retainer determine the work to be done by the solicitor and the scope of the duty in tort as well as in contract. A breach of the retainer by failing to use reasonable care in carrying the client’s instructions into effect is also a breach of the solicitor’s duty to an intended beneficiary who thereby suffers foreseeable loss. If the solicitor’s carelessness results in the loss of a testamentary gift intended to be given to a beneficiary, ‘it is eminently fair, just and reasonable that the solicitor should be liable in damages to the intended beneficiary’, as Sir Donald Nicholls V-C said in White v Jones. Not only is the remedy of damages effective to compensate the beneficiary; it is necessary to enforce the duty owed to the client. ‘Otherwise’, as the Vice-Chancellor said, ‘there is no sanction in respect of the solicitor’s breach in his professional duty’.”

The facts in Van Erp concerned negligence in the witnessing of a will.

30. Badenach v Calvert (2016) 257 CLR 440 (Badenach) concerned the failure of a solicitor to advise his client (the testator) of the possibility that a daughter from a previous relationship might make a statutory family provision claim on the estate. The plaintiff, the son of the testator’s long time de facto partner, was the sole beneficiary under the will. The solicitor was unaware of the existence of the daughter but could readily have made inquiries to ascertain her existence. Provision for the daughter was ordered to be made for her from the testator’s estate, which was thereby substantially depleted.

31. The plurality (French CJ, Kiefel and Keane JJ) referred to the different judgments in V**an Erp (which they distinguished) and stated at [18] (footnotes omitted):

“Nevertheless it may be seen from most of the judgments that the duty found to be owed by the solicitor to Mrs Van Erp as the intended beneficiary had its source in the solicitor’s obligations arising from the retainer between the solicitor and her client. The solicitor was obliged to exercise care and skill in giving effect to her client’s testamentary intentions. The interests of the testatrix and the intended beneficiary in those intentions being carried into effect were relevantly the same. Recognising a duty to the intended beneficiary would not involve any conflict with the duties owed by the solicitor to her client, the testatrix.”

32. In the same case, relevant to the differential scope of the duty owed to the client and to the beneficiary, Gageler J (as his Honour then was) stated:

“[57] Subject to statutory or contractual exclusion, modification or expansion, the duty of care which a solicitor owes to a client is a comprehensive duty which arises in contract by force of the retainer and in tort by virtue of entering into the performance of the retainer. The duty is to exercise that degree of care and skill to be expected of a member of the profession having expertise appropriate to the undertaking of the function specified in the retainer. Performance of that duty might well require the solicitor not only to undertake the precise function specified in the retainer but to provide the client with advice on appurtenant legal risks. …

[58] The duty of care which a solicitor who is retained to prepare a will owes to a person whom the testator intends to be a beneficiary is more narrowly sourced and more narrowly confined. The duty arises solely in tort by virtue of specific action that is required of the solicitor in performing the retainer. …

[59] The solicitor’s duty of care is instead limited to a person whom the testator actually intends to benefit from the will and is confined to requiring the solicitor to take reasonable care to benefit that person in the manner and to the extent identified in the testator’s instructions. The testator’s instructions are critical. The existence of those instructions compels the solicitor to act for the benefit of the intended beneficiary to the extent necessary to give effect to them. The instructions define the intended benefit, absence of which constitutes the damage which is the gist of the cause of action in negligence. The instructions expose the intended beneficiary to carelessness on the part of the solicitor in giving effect to those instructions against which the intended beneficiary cannot protect. The instructions thereby give rise to a position of vulnerability on the part of the intended beneficiary of a kind which has been recognised to be ordinarily necessary to justify the imposition of tortious liability for damage comprised of purely economic loss. Confined to taking reasonable care to benefit the intended beneficiary in the manner and to the extent identified in the testator’s instructions, the solicitor’s tortious duty to that beneficiary is coherent with the solicitor’s contractual and tortious duty to the client, thereby allowing the two to co-exist. The duty is coherent because it admits of no possibility of conflict: the interests of the client and the interests of the beneficiary necessarily coincide completely.”

33. The scope of the solicitor’s duty of care to a person whom the testator intended to benefit under the will, therefore, extends to the exercise of reasonable care in undertaking the solicitor’s role to the extent that those tasks are for the purpose of giving effect to the testamentary intention of the testator. It must be coherent with, but need not be coextensive with, the duty to the client.

34. In Badenach, the High Court did not find that the solicitor’s common law duty to the plaintiff extended to advising the testator about the steps that might be taken to avoid exposing his estate to the possibility of a statutory provision claim. In this regard, the interests of the client and the intended beneficiary were not coincident. That is because the steps that would have been necessary to discharge the alleged duty would have concerned transactions anterior to the creation of the will, and the respective interests of the testator and the intended beneficiary were not in the capacity of testator and beneficiary but as parties to a different set of transactions.

35. In the present case, the terms of the retainer were recorded in AVL’s letter to Mr Lofts and Ms Miller of 18 May 2016, set out at paragraph 16 above. The purpose for which Mr Lofts and Ms Miller retained AVL was to update their wills, which had been prepared in about 2005 and did not account for their changed circumstances since the retirement of Mr Lofts. The plaintiff was a person whom Mr Lofts had identified in his instructions – recorded in the file note of 18 March 2016 and cl 3 of the Will itself – as a person whom Mr Lofts intended to benefit under the Will. A duty was therefore owed to him.

36. In my view, the extent of the duty to the plaintiff in this case was informed and circumscribed by the contractual duties owed to Mr Lofts in accordance with the retainer letter of 18 May 2016, even if it was not wholly coextensive with it. The common law duty to the plaintiff, for example, likely would not have extended to matters of estate planning beyond taking reasonable steps to ensure that the testamentary intention communicated by Mr Lofts to the solicitor, insofar as it disclosed an intention to benefit the plaintiff, was given effect to. To this extent, the plaintiff was vulnerable to any carelessness on the part of the solicitor. The plaintiff was powerless to protect his interest against such carelessness and it was foreseeable that, if reasonable care was not taken, he would be deprived of the benefit that Mr Lofts, as the client testator, intended to confer on him.

Breach of duty

37. As these proceedings are brought in negligence, s 5B of the Civil Liability Act 2002 (NSW) (the Act) applies. That section relevantly provides that a person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable, that it was not insignificant, and, in the circumstances, a reasonable person in the person’s position would have taken those precautions. In evaluating whether a reasonable person would have taken precautions against a risk of harm, relevant considerations include the probability that the harm would occur if care were not taken, the likely seriousness of the harm, the burden of taking precautions to avoid the risk of harm and the social utility of the activity that creates the risk of harm.

38. There have been a number of cases where the failure to advise, or to take steps, to sever a joint tenancy have been the subject of a claim for breach of duty. In Badenach, Gageler J stated in obiter (at [61]):

“[61] Taking reasonable care in carrying the testator’s instructions into effect might on occasions require a solicitor retained to prepare a will to do more than merely draft and ensure the proper execution of that will. An example is where taking steps to sever a joint tenancy is integral to carrying into effect a testator’s intention that specified property be given by the will such that the taking of those steps can properly be seen to form part of the will-making process.”

39. The caselaw does not extend the duty to the taking of steps, or giving of advice, in all cases to ensure that the assets of the estate are capable of giving effect to the testamentary intention. Accordingly, in Badenach it was held that failing to advise as to the steps which could be taken inter vivos to defeat a statutory claim for provision did not breach the common law duty to the beneficiary.

40. Similarly, in Vagg v McPhee [2013] NSWCA 29, a solicitor had not advised the testatrix that a joint tenancy could be severed unilaterally under the Real Property Act 1900 (NSW) (“RPA”). Rather, the solicitor drafted a provision in the will in which the testatrix requested that the house in which she resided, and owned jointly, with her husband be sold and the proceeds of sale be distributed to her children for their education. The Court of Appeal (Basten JA, Ward JA and Tobias AJA) found that the common law duty owed to the beneficiaries was not breached on the facts of that case. That is because it was not established that the testatrix had communicated an unconditional testamentary intention to dispose of only her half of the jointly owned property to her children. Her expressed wish was to have her husband sell the whole property (including his own interest) and to distribute the proceeds. Accordingly, there had been no breach.

41. The distinguishing criteria appear to be the communication to the solicitor of instructions of an unconditional testamentary intention and that the steps required to discharge the duty form part of the will-making process. In Carr-Glynn v Frearsons [1999] Ch 326, there was doubt as to whether a particular property was held in joint tenancy, however, the solicitor failed to take steps to obtain the deeds to clarify the position before the testatrix’s death with the result that the gift to the plaintiff was ineffective. The Court of Appeal (Butler-Sloss, Thorpe and Chadwick LJJ) held that a solicitor owes a duty of care to an intended beneficiary to ensure that effect is given to the testator’s testamentary intentions and the solicitors breached their duty to the plaintiff by failing to advise the testatrix of the need to serve a notice of severance immediately and in conjunction with the execution of the will.

42. In Smeaton v Pattison [2002] QSC 431 (at first instance, affirmed on appeal), a solicitor failed to properly advise on the mechanism to achieve the severance of a joint tenancy. The failure was held to breach both the contractual duty to the testator and the common law duty to the intended beneficiaries. The solicitor was aware that the relevant investment properties were held in joint tenancy with the testator’s second wife and had been instructed that the testator wished for his then wife to have the income from those properties until her death or remarriage, with his children eventually to inherit his half of the properties. Communication of testamentary intention was therefore established. The solicitor appears to have been unaware, however, of the mechanisms available in Queensland at the time to sever a joint tenancy. The methods advised and adopted were ineffectual to do so. Severance was found to be part of the will-making process. Breach of duty to the intended beneficiaries was therefore also established.

43. In the present case, I am satisfied that the AVL solicitor was aware that Mr Lofts’ testamentary intention was to confer on Ms Miller a right to continue to reside in the Forster Property until her death or re-marriage, following which Mr Lofts’ interest in the Forster Property would form part of his residuary estate and pass to the plaintiff. That was the basis for the whole of the scheme in cl 3. It is also clear that the AVL solicitor had been informed that the Forster Property was held in joint tenancy. This is demonstrated by the 18 March 2016 file note. On the basis of the oral evidence before me, I am satisfied that the solicitor was aware of the operation of the principle of survivorship in joint tenancy.

44. The fact of the joint tenancy meant that, unless it was severed before either of Mr Lofts or Ms Miller died, the scheme in cl 3 would fail. A competent solicitor exercising reasonable care in the drafting of the Will would have advised their clients of that fact and, unless that testamentary intention was changed, provided their clients with the means to have the joint tenancy severed. There were well known and straightforward mechanisms available with respect to Real Property Act land to achieve this, including a (unilateral) Transfer Severing Joint Tenancy or a (bilateral) Transfer Altering Tenancy, either of which could have been lodged with Land and Property Information (LPI) for registration that would have achieved severance.

45. The solicitor did not give that advice or, on the evidence of the communications between AVL and Mr Lofts and Ms Miller, take any steps to prepare or provide Mr Lofts, or Mr Lofts and Ms Miller, with the documents necessary to sever the joint tenancy. This is consistent with the file note of 18 March 2016, in which no reference to any such advice is recorded. While it was not conceded by the solicitor that such advice would have been there recorded, in my view, the creation of life estates was a significant matter in the overall design of the mutual testamentary scheme. It is likely that the fact of advice on such a significant matter, if given, would have been recorded. In any event, the absence of advice is consistent with the invoice provided on 3 August 2016, which does not refer to any such steps being taken (such as the preparation of an agreement or a Transfer under the RPA). It is likely, if any advice had been given as to the effect of the joint tenancy, it would have been recorded there as well.

46. Accordingly, by neither giving that advice or taking any steps to obtain instructions and act on them to sever the joint tenancy as part of the will-making process, I consider that AVL breached its duty of care to the plaintiff.

Causation

47. As causation forms part of the plaintiff’s cause of action, he bears the onus of establishing causation within the terms of s 5D(1) of the Act. Section 5D(1)(a) relevantly requires that the plaintiff establish factual causation, meaning that the negligence was a necessary condition of the occurrence of the harm. Section 5D(1)(b) requires that it is appropriate that the scope of liability extend to the harm so caused. The plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation: s 5E.

48. The relevant principles for a determination of factual causation are not controversial and were collected by McColl JA in Lucantonio v Sticher [2014] NSWCA 5 at [79]-[82]:

“79 In order to establish that any breach of duty on the respondent’s part caused the appellant harm, the appellant had to establish that that negligence was a necessary condition of the occurrence of that harm, an exercise the Act labels ‘factual causation’: s 5D(1)(a), Civil Liability Act 2002. That required the appellant establishing that the respondent’s negligence was a condition that must be present for the occurrence of the harm: Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182 (at [18], [20]) per French CJ, Gummow, Crennan and Bell JJ; (at [44]) per Heydon J.

80 Such determination ‘is entirely factual, turning on proof by the plaintiff of relevant facts on the balance of probabilities in accordance with s 5E’ (Wallace v Kam [2013] HCA 19; (2013) 87 ALJR 648 (at [14])) and is approached by applying common sense to those facts: Hunt & Hunt Lawyers (a firm) v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 (at [43]; [56]) per French CJ, Hayne and Kiefel JJ. It ‘involves nothing more or less than the application of a “but for” test of causation’: Wallace v Kam (at [16]); Adeels Palace Pty Ltd v Mourbarak [2009] HCA 48; (2009) 239 CLR 420 (at [45], [55]). ‘Proof of the causal link between an omission and an occurrence requires consideration of the probable course of events had the omission not occurred’: Strong v Woolworths Ltd (at [32]) per French CJ, Gummow, Crennan and Bell JJ.

81 The inquiry into causation is retrospective, seeking to identify what happened and why: Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 (at [124]) per Hayne J; Lesandu Blacktown Pty Ltd v Gonzalez [2013] NSWCA 8 (at [28]) per Basten JA (Davies J agreeing). It focuses on the particular conduct or omission which is found to constitute the defendant’s breach of duty: Kocis v SE Dickens Pty Ltd [1998] 3 VR 408 (at 419) per Phillips JA (Ormiston JA generally agreeing).”

49. A determination as to whether the appropriate scope of liability extends to the harm found to have been caused in a “but for” sense in any particular case is normative. As the High Court stated in Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375 at [14]-[15] and [24]:

“[14] The distinction now drawn by s 5D(1) between factual causation and scope of liability should not be obscured by judicial glosses. A determination in accordance with s 5D(1)(a) that negligence was a necessary condition of the occurrence of harm is entirely factual, turning on proof by the plaintiff of relevant facts on the balance of probabilities in accordance with s 5E. A determination in accordance with s 5D(1)(b) that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused is entirely normative, turning in accordance with s 5D(4) on consideration by a court of (amongst other relevant things) whether or not, and if so why, responsibility for the harm should be imposed on the negligent party.

[15] Thus, as Allsop P explained in the present case:

‘[T]he task involved in s 5D(1)(a) is the elucidation of the factual connection between the negligence (the relevant breach of the relevant duty) and the occurrence of the particular harm. That task should not incorporate policy or value judgments, whether referred to as ‘proximate cause’ or whether dictated by a rule that the factual inquiry should be limited by the relationship between the scope of the risk and what occurred. Such considerations naturally fall within the scope of liability analysis in s 5D(1)(b), if s 5D(1)(a) is satisfied, or in s 5D(2), if it is not.’

…

[24] A limiting principle of the common law is that the scope of liability in negligence normally does not extend beyond liability for the occurrence of such harm the risk of which it was the duty of the negligent party to exercise reasonable care and skill to avoid. Thus, liability for breach of a duty to exercise reasonable care and skill to avoid foreseeable harm does not extend beyond harm that was foreseeable at the time of breach. In a similar way, ‘a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all the consequences of that course of action’ but ‘only for the consequences of the information being wrong’. A useful example, often repeated, is that of a mountaineer who is negligently advised by a doctor that his knee is fit to make a difficult climb and who then makes the climb, which he would not have made if properly advised about his knee, only to be injured in an avalanche. His injury is a ‘foreseeable consequence of mountaineering but has nothing to do with his knee’.”

50. Mr Philips, who appeared for the defendant, referred me to R Lawyers v Mr Daily [2025] HCA 41; (2025) 99 ALJR 1504. In that case, a claim was brought against solicitors who had acted for the plaintiff in relation to a purported binding financial agreement between him and his prospective spouse, within the meaning of s 90DA of the Family Law Ac**t 1975 (Cth). The procedural history of R Lawyers was complex. It was principally a case about limitations, however, the questions of causation and loss were relevant.

51. The solicitors were held at first instance to have been negligent in failing to advise regarding the effect on the agreement of the birth of a child, as well as generally as to the risks of the agreement. There were two components of the plaintiff’s claim against the solicitors. First, he claimed and recovered wasted legal costs. The finding of negligence and the wasted costs component were not disturbed on appeal.

52. Secondly, the plaintiff’s claim included an allegation that the solicitors’ failure to draft an agreement that protected his interest following the birth of a child or children caused him loss. He contended that the loss was the diminution of his interest in securing a binding financial agreement that was not liable to be set aside under the Family Law Act and that would be effective on separation. The intermediate appellate court characterised the relevant component of the plaintiff’s claim against his solicitor to be a claim for a “loss of chance”, being the lost opportunity to negotiate a financial agreement that made provision for the birth of a child or children. The plaintiff disavowed any characterisation of his claim as being for a loss of chance and contended that the diminution of his interest was the compensable loss.

53. The High Court distinguished between loss by reference to the loss of an identified benefit that the plaintiff would have obtained but for the solicitor’s negligence and the loss of a chance or opportunity to enter into a different agreement and secure a more favourable property settlement. In the case of the former, the plaintiff had to prove, on the balance of probabilities, that a more favourable financial agreement would have been agreed, that it would not have been set aside and that it would have secured the plaintiff a better outcome. In the case of the latter, the plaintiff would have had to establish, on the balance of probabilities, that the solicitor’s negligence caused the plaintiff to lose the chance or opportunity to secure a better outcome and that chance or opportunity was a significant chance or substantial prospect that had some value. Only once the loss of a substantial and valuable chance is established, on the balance of probabilities, is the loss valued by reference to the degree of probabilities or possibilities of the chance or opportunity succeeding (at [146]-[149] per Gordon and Edelman JJ). As the plaintiff was unable to establish loss on either basis, his claim against the solicitors in respect of the second component was ultimately unsuccessful.

54. In the present case, I am satisfied that the solicitors’ breach of duty to the plaintiff has satisfied the requirements of both s 5D(1)(a) and (b) of the Act.

55. It was contended by the defendant that causation cannot be made out because it was not established that Mr Lofts would have agreed to sever the joint tenancy, even if advised that doing so was necessary to achieve his stated testamentary intention. This, it was submitted, was for the following reasons:

56. Ms Miller gave affidavit evidence that she would not have agreed to sever the joint tenancy. In circumstances where Mr Lofts and Ms Miller approached the question of their wills jointly and in agreement with each other, the plaintiff has not established either that Ms Miller would have agreed to the severance or that Mr Lofts would have done so unilaterally.

57. Both the Forster Property and Warriewood property had been held in joint tenancy.

58. Severance of the joint tenancy would have deprived Mr Lofts of the benefit of survivorship if Ms Miller predeceased him, which was a right he might have wished to retain.

59. On the other hand, severance of the joint tenancy might have entitled Ms Miller to make a statutory provision claim on his estate.

60. In any event, at its highest, the plaintiff’s case is a loss of chance case and there was no evidence as to what the range of counterfactuals would be and why the Court should accept that proffered by the plaintiff.

61. I have not accepted these submissions. First, I am not persuaded by Ms Miller’s evidence that she would not have agreed to sever the joint tenancy. Ms Miller’s affidavit was affirmed a week before the hearing. At the hearing, she acknowledged that she had no real recollection of the events surrounding the execution of the wills. While I do not doubt that Ms Miller made her affidavit honestly, I am mindful of the following words of Leggatt J in Gestmin SGPS SA v Credit Suisse *(*UK) Limited [2013] EWHC 3560 (Comm):

“[18] Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time.”

57. Moreover, Ms Miller’s affidavit evidence did not establish, as a predicate, that she would have had the effect of severance of the joint tenancy explained to her. When questions along those lines were put to her in cross-examination, she said she did not know what she would have done. There was a debate in closing submissions as to whether the plaintiff had sufficiently complied with the rule in Browne v Dunn in challenging Ms Miller’s affidavit evidence that she would not have agreed to sever the joint tenancy. In my view, the plaintiff had satisfied the requirements of the rule. It was plain that in giving her evidence Ms Miller was unable to express any confident view as to what she would have done with respect to severance of the joint tenancy as at July 2016. Relevantly, her cross-examination included:

“Q. Yes. You understand that that clause provides for in the event that you pass away before Jeffrey he has the right to continue to reside in the principal place of residence until death or remarriage? Then following his subsequent passing then the very end you can see point E on the following page point 9, just before 4, ‘On the death or remarriage of Jeffrey the property or any substitute residence shall fall into and form part of my residuary estate’; correct?

A. Yes.

Q. You understood that that was the effect of the will at the time; correct?

A. Yes, I ‑ well, I guess so. I just ‑ I don’t know whether I even ‑ I read it any detail or understood it in that particular way. I just understood that the property, whoever ‑ whatever was left of it would be distributed in our estates.

Q. I want you to imagine that you had received advice that in order for the property to be distributed in your estate should you pass away first, it was necessary to sever the joint tenancy, and‑‑

A. I wouldn’t ‑ I haven’t ‑ I wouldn’t have thought about it. You’ve just mentioned it. I’ve never thought about that.

Q. You’ve never thought about it because you were never advised about that; is that the case?

A. I don’t know whether I might have been advised. I really can’t say. I cannot remember, but I haven’t thought about it like that.

Q. And I want you to imagine that if you had been advised that you can achieve what your will sets out to do by the simple signing of a form that your lawyers could prepare or by signing an agreement that your lawyers could prepare, that you would have proceeded to do so, wouldn’t you?

…

WITNESS: I have no idea.

…

Q. Perhaps to stay on that point, Ms Miller, when you said you don’t know what you would have done had you received that advice, if you reflect on the possibility that if you did not take any of those steps, such as signing a form or an agreement prepared by your lawyers, if you had been advised that if you did not do those things it would be the case, should you pass away first, that your children, Tracey and Ben, would have no entitlement whatsoever to the property, I suggest to you that it’s certainly a matter that you would have given consideration to?

A. Yes. I probably would’ve been giving consideration to it, but I don’t know ‑ I haven’t had that happen, so I don’t know what my answer would be at the time.

Q. You say you don’t know what your answer would be at the time, and I appreciate we’re asking you to imagine a hypothetical, but‑‑

A. Yes.

Q. ‑‑we’re talking about your principal asset here, the property, correct?

A. Correct. Yes.

Q. At that time, the value was $400,000, correct?

A. Correct.

Q. Obviously, a will is made with a view to looking to the future, that’s right? And you would have appreciated at that time when you purchased the property there was a good chance that its value would increase?

A. I guess I think ‑ I don’t know. I don’t know what I would have assumed at that point in time. I guess it would have increased. I don’t know.

Q. But in any case, it was a significant asset. It’s a waterside property in Forster, and I think you probably had intentions to improve it with renovations at that time, correct?

A. Correct.

Q. So certainly the value would increase as a result of that, correct?

A. Yes. Obviously.

Q. It would be the case, wouldn’t it, that if it was a simple measure to sign either a form or an agreement, you would not have wanted to cut your children out of the prospect of inheriting your share of that property?

A. No. I probably wouldn’t have, but that’s one ‑ once again, that’s ‑ it didn’t happen like that, I don’t think. So I don’t really ‑ I can’t answer questions that didn’t ‑ about something that didn’t happen.” (Tcpt, 11 March 2026, pp 61(1)-62(41)).

58. In my view, this passage sufficiently traverses the same ground covered in Ms Miller’s relevant affidavit evidence. I prefer it as a more reliable account than her affidavit of the true state of Ms Miller’s recollection of the events of 2016. On the basis of the other evidence of the surrounding circumstances, in particular, the wills themselves and the schemes set out therein, I am satisfied that, had the effect of the joint tenancy on the proposed scheme in the wills been explained to her, Ms Miller would have agreed to its severance.

59. Secondly, I do not consider the fact of the joint tenancy of the Forster Property or the Warriewood property assists the defendant. The predicate in any severance case is that the property is held in joint tenancy. The evidence which purported reasons for Mr Lofts to have wanted to maintain joint tenancy, which appears to date back at least a decade before the Will was drawn and proceeds on a misconception of how co-ownership affects property rights on separation and divorce, is not persuasive.

60. Thirdly, I do not consider there to have been much, if any, prospect that Mr Lofts would have chosen not to proceed with the severance had he been advised as to the necessity to do so in order to give effect to his testamentary intention. On the evidence, I do not consider it likely that the possible benefits or avoidance of detriment that might have accrued to Mr Lofts if the joint tenancy were not severed would have made any difference. As was submitted for the defendant, the whole approach of Mr Lofts and Ms Miller was to draw their wills together, in such a way as to protect each other and leave their assets to their respective children. The evidence does not support a finding that it was ever a realistic possibility that Mr Lofts might have changed his mind in order to preserve a right of survivorship, in which he never expressed any interest.

61. In my view, causation in fact has been established for the following reasons:

62. Mr Lofts had clearly indicated in his communications with AVL that he wished to deal with his interest in the Forster Property in the manner recorded by them in cl 3 of the Will. This was consistent with the file note of 18 March 2016 and the covering letter of 18 May 2016.

63. The whole of the evidence, as it relates to the relationship between the plaintiff and Mr Lofts, indicates that their relationship remained close and loving at all times prior to Mr Lofts’ death. The Forster Property was a significant asset – indeed, it comprised about half of the value of all of the assets that Mr Lofts intended to leave to the plaintiff. It is doubtful that he would have been content to allow the form of co-ownership in which that Property was held to frustrate his intentions in this regard.

64. Although Mr Lofts and Ms Miller had been in a de facto relationship of long standing, they did not merge the whole of their finances. They only shared household and mortgage expenses. Even though they approached the drafting of their wills together, the scheme in cl 3, itself, demonstrates the limits of their shared approach to their wills. They each regarded their assets as their own.

65. Mr Lofts had significant financial assets which he intended to, and did, bequeath to the plaintiff. The full extent of Ms Miller’s independent financial holdings is not known, however, she did not have superannuation and Mr Lofts had nominated the plaintiff to succeed to his interest in his superannuation accounts. This further indicates to me that they each regarded themselves as independent financial actors and each kept in mind the financial position of their respective children, for whom they each sought to make provision after the death of the survivor of them.

66. On the whole, Ms Miller’s affidavit and oral evidence does not derogate from these findings. As already indicated, Ms Miller and Mr Lofts both intended to achieve the outcome contemplated in their respective wills and there is no satisfactory basis to conclude that they would not have taken such steps if they had been advised that they would be necessary to achieve that intention. Ms Miller’s testamentary intention and her own instruction to the solicitors was relevantly identical to Mr Lofts’. In a passage of cross-examination to which I have already referred, she said:

“Q. Yes. You understand that that clause [clause 3 of her will] provides for in the event that you pass away before Jeffrey he has the right to continue to reside in the principal place of residence until death or remarriage? Then following his subsequent passing then the very end you can see point E on the following page point 9, just before 4, ‘On the death or remarriage of Jeffrey the property or any substitute residence shall fall into and form part of my residuary estate’; correct?

A. Yes.

Q. You understood that that was the effect of the will at the time; correct?

A. Yes, I ‑ well, I guess so. I just ‑ I don’t know whether I even ‑ I read it any detail or understood it in that particular way. I just understood that the property, whoever ‑ whatever was left of it would be distributed in our estates.” (Tcpt, 11 March 2026, p 61(1)-(13)).

6. There is, therefore, evidence to establish that both clients agreed with the proposed outcome. Both the wills, themselves, and Ms Miller’s evidence support this conclusion.

7. It accords with the probabilities and the logic of events that, had Mr Lofts (and Ms Miller) been informed of the inexpensive and straightforward means by which they – or either of them – could have severed the joint tenancy so as to give effect to the testamentary intentions that each had unequivocally communicated to the solicitors, they would have done so.

8. On the balance of probabilities, therefore, I am satisfied that, had Mr Lofts been advised that cl 3 of the Will would be ineffective to achieve its evident purpose, he would have directed the solicitors to take steps to sever the joint tenancy. There were a number of comparatively straightforward and inexpensive ways this could have been achieved. For example, a Transfer Severing Joint Tenancy could have been lodged with the LPI under s 97 of the RPA unilaterally. Similarly, a Transfer Altering Tenancy could have been lodged by both Mr Lofts and Ms Miller. In any case, it was accepted in the oral evidence that the steps necessary to sever the joint tenancy were simple and could be taken unilaterally or by agreement. I am satisfied that Mr Lofts (at least) would have instructed the solicitors to take steps to sever the joint tenancy had he been advised of the effect of the joint tenancy on the scheme in cl 3 of his Will.

9. As for Mr Philips’ submission concerning the absence of evidence of counterfactuals, I consider the only counterfactual was that steps would be taken on Mr Lofts’ behalf (at a minimum) to sever the joint tenancy. This does not appear to me to be a case in which the plaintiff must establish any counterfactual other than Mr Lofts would have instructed the solicitors to take steps to register the severance of the joint tenancy, which I am satisfied on the balance of probabilities he would have done. The plaintiff’s loss was of an identified benefit, not the possibility of securing a better outcome, the prospects of which would have required valuation. There is no basis to conduct the analysis by which the loss is then valued by reference to the degree of probabilities or possibilities of the chance or opportunity succeeding.

10. In R Lawyers, the plurality (Gageler CJ, Jagot and Beech-Jones JJ) stated at [49]:

“In some lawyer negligence cases a court can infer the particular steps that might have been taken had the lawyer discharged their duty.”

65. In my view, this is such a case. Both Mr Lofts and Ms Miller wanted to achieve the same objective, which protected the interests of each other and otherwise made provision for their own children from earlier relationships. I am satisfied that if they had been told that the wills failed to achieve the latter of those objectives and that there was an inexpensive course open to them to rectify that failure without impacting on the former, they would not have hesitated to do so.

66. Finally, the scope of liability, in terms of s 5D(1)(b), was not seriously in contest. In my view, the harm suffered by the plaintiff – being the deprivation of a substantial property right – is such that responsibility for it should lie with the solicitors whose breach of duty to him had caused the loss.

Loss

67. The plaintiff characterises his loss as the deprivation of a property interest, being his lost right as a remainderman in Mr Lofts’ estate.

68. The expert evidence, which was largely uncontroversial, establishes:

69. The value of the Forster Property, at the time of Mr Lofts’ death, was $1,450,000 (Mr Bird) or $1,550,000 (Mr McDouall). Mr Lofts’ 50% interest as joint tenant was therefore worth between $725,000 and $775,000. As the range in valuations was less than 10%, I consider it appropriate to take a midpoint of $750,000 as the value of Mr Lofts’ interest as at the date of death.

70. Mr Plover and Mr Thomson agreed that the value of the plaintiff’s interest as remainderman as at the date of the joint report was 34% of the value of the Forster Property. This takes into account the value of Ms Miller’s life interest (being 16% of the value of the Forster Property), the possibility of early vesting as well as the fact that the plaintiff would be presently compensated for deprivation of an asset which would only vest in the future.

71. Accordingly, taking into account the valuers’ evidence, the plaintiff’s loss can be assessed as 34% of $1,500,000, which amounts to $510,000.

72. I have accepted this evidence and these calculations.

73. It was, however, submitted for the defendant that there should be a further discount of up to 80% of the value of the loss to take account of the probability that, absent a breach of duty by AVL, Mr Lofts would not have insisted that the joint tenancy be severed. As I have found that, on the balance of probabilities, Mr Lofts would have given instructions for the joint tenancy to be severed, I do not consider that this probability arises on the facts. In any event, I do not accept that this is the correct juridical approach to the question of either causation or the assessment of loss. See, in this regard, Smeaton at [24]-25].

Conclusion

71. Accordingly, I am satisfied that the plaintiff has made good his claim in respect of the negligence of AVL, which was an insured person within the meaning of the Claims Act. Accordingly, I find that the defendant is liable to pay the amount of that liability to the plaintiff, which I assess in the sum of $510,000.

Interest

72. The plaintiff has sought interest from the date of Mr Lofts’ death, on the basis that that is when his cause of action accrued.

73. The award of interest is discretionary relief, intended to compensate a successful plaintiff for the loss of use of monies ultimately recovered by way of judgment.

74. In the present case, the plaintiff would not have received any monies at all as at the date of Mr Lofts’ death and, indeed, had the solicitors not breached their duty to him, he still would not yet have received such monies. In the circumstances, I do not consider it appropriate to award interest and I decline to do so.

Costs

75. The plaintiff has been successful and, as costs generally follow the event, he would ordinarily be entitled to the costs of the proceedings as agreed or assessed on the ordinary basis: rr 42.1 and 42.2 of the Uniform Civil Procedure Rules 2005.

76. I will, however, give the parties the opportunity to agree on an appropriate costs order. If no agreement can be reached, I will set a timetable for the exchange of submissions and separate determination of the question of costs.

Orders

77. The orders of the Court are:

78. Judgment for the plaintiff against the defendant in the sum of $510,000.

79. In the event that the parties have not reached agreement on an order with respect to costs, and notified my Associate of such agreement by 5pm on 27 March 2026:

(a) direct the parties to file and serve any evidence and written submissions with respect to costs by 5pm on 2 April 2026; and (b) costs to be determined on the papers unless otherwise notified by the Court to the parties.

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