District Court proceedings
6 On 14 March 2002, Marcia Gladys Miller, Jason Miller, William Miller, Tracie Ann Booby, Victoria Jane Peters and Ellen Louise Slavin began proceedings in the District Court against Mr Cooney and members of his firm claiming damages for negligence in failing to exercise due care and skill in drafting Mrs Lalor's will to the standard of a competent solicitor, and in particular to take care to ensure that effect was given to the testamentary intentions of Mrs Lalor. The plaintiffs were the sister, nieces and nephews of Mrs Lalor named as beneficiaries in her will. Mr Lalor's two nephews, who were beneficiaries named in the will, were not parties. The particulars of negligence were as follows:
"a. Failure to verify that the deceased was either sole registered proprietor or a registered proprietor as tenant in common of the properties.
b. Failure to ascertain by title search or otherwise the precise nature and extent of the deceased's interest in the properties.
c. Failure to advise the deceased to sever the joint tenancy with respect to each property and of the need to sever the joint tenancy in order to make the bequests referred to in paragraph 4 effective.
d. Failure to take such steps as would be effective to sever the joint tenancy with respect to each property.
e. Failure to advise the deceased of the need to verify the precise nature and extent of her interest in the property.
f. Failure to ensure that effect was given to the deceased's testamentary intentions."
7 His Honour Acting Judge Certoma heard the proceedings and entered judgment for the defendants. The trial Judge found that Mr Cooney received instructions from Mr and Mrs Lalor to make changes to their existing wills, which had been drafted by someone other than Mr Cooney and his firm. Mr Cooney had never met Mr or Mrs Lalor before taking instructions from them on this occasion. Mr Cooney said that when he took instructions, Mrs Lalor had in her possession a bundle of documents, including her and her husband's wills which were typed and, he believed, signed. She instructed Mr Cooney that certain of the beneficiaries, named in two specific gifts in her will, be deleted and replaced with new ones, and, that a further residuary beneficiary be added to the gift of residue. Mr Cooney said that in substance Mrs Lalor's instructions were limited to deleting certain beneficiaries and adding others, as was reflected in his file notes, which were tendered in evidence. Mrs Lalor did not instruct him to do anything else.
8 Mr Cooney said he was also instructed to make some changes to Mr Lalor's will. According to Mr Lalor's draft will in evidence, Mr Lalor appointed Mrs Lalor as his executrix and his nephew as the substitute executor in the event that his wife predeceased him. These were in substance the changes Mr Cooney made to Mr Lalor's will. Mr Lalor left his estate to his wife if she survived him by one month and otherwise to his nephews Jason Potter and Terry John Potter. Though Mr Lalor's will dealt with the contingency of Mrs Lalor predeceasing him, Mrs Lalor's will did not deal with, nor did Mr Cooney recollect discussing the contingency of Mr Lalor predeceasing his wife. The file notes reflect that there was no such discussion. The instructions to make the changes were substantially given by Mrs Lalor in the presence of her husband, who confirmed the instructions relating to his will. Mr Cooney gave effect to these instructions by making new wills. He copied them from the existing wills. The changes he was asked to make were incorporated. He did not keep the original wills from which the changes were made. Mr Cooney said that nothing in Mrs Lalor's demeanour or otherwise gave rise to any doubt about his instructions or Mrs Lalor's capacity to give them.
9 By letter dated 9 April 1998 Mr Cooney thanked Mr and Mrs Lalor for their instructions to prepare "new wills". He enclosed a memorandum of fees. The fees were discounted from $150 to $75 because Mr Cooney was only making changes to existing wills. Mr Cooney chose to give effect to his instructions by drafting new wills rather than codicils. He said he made new wills that were different to the wills that Mr and Mrs Lalor had before. He did not know the circumstances in which Mrs Lalor's previous will was made. He saw his duty as being to reflect the instructions he was given to make changes to Mrs Lalor's will by substituting certain beneficiaries for others. Mr Cooney regarded himself as limited by the instructions he received. Because she had an existing will he did not recollect discussing the ownership of property with Mrs Lalor and did not take any steps to ascertain if she was the owner of the properties. He accepted her instructions and said there was no reason to disbelieve that she owned the properties in question.
10 In answer to interrogatories, Mr Cooney said that at the time the will was made, neither he nor his firm had the possession, custody or control of any certificates of title to the properties.
11 Mrs Jeannette Marie O'Loughlin, who the plaintiffs called to give evidence, stated she knew Mrs Lalor from the mid-1960s and Mr Lalor from 1986 when he moved to Kempsey. She recalled Mrs Lalor discussing how she would leave her property on about four or five occasions, including one occasion six months before her death when Mrs Lalor told her she had made a new will. On each occasion, Mrs Lalor said she would leave her property and that her husband "would be looked after" and live out his life in the house property. Mrs O'Loughlin was aware that Mr Lalor owned the farm property for many years and that, after he had some difficulties, Mrs Lalor bought part of the property from him. She said quite definitely that Mrs Lalor always and adamantly described the farm property as "her farm" and the house as "her house".
12 Judge Certoma regarded the facts as straightforward. He observed, and this was not challenged, that the original will was clearly drawn by a lawyer. He said "this, though not in evidence, is clear from the language and form of the original will, which was copied by Mr Cooney in drawing Mrs Lalor's will." His Honour found that it was clearly established that there was no discussion between Mr Cooney and Mrs Lalor regarding the ownership of any of her property and that Mr Cooney did not take any steps to ascertain its ownership. There was no evidence to suggest that Mr Cooney or his firm had previously acted for Mrs Lalor or that they held any document which would have disclosed the ownership of the property. Mr Cooney regarded his instructions as limited to making the changes instructed by the deceased.
13 Two experts were relied upon. The expert relied upon by the plaintiffs was Ms Pamela Gaibrielle Suttor, who prepared a statement dated 5 June 2003. Ms Suttor was admitted as a solicitor in New South Wales in 1963 and had been in full time practice since then. She had always practised in the area of wills and estates. In 1995 she became an accredited wills and estates law specialist. She described her work in that area as involving will drafting, obtaining grants of probate and letters of administration and other special limited grants. She had acted in contested litigation matters concerning family provision issues, contested wills including testamentary capacity cases, informal wills under s18A of the Wills Probate and Administration Act 1898 and the rectification of wills. She had been and was involved with professional associations, in particular the Accredited Wills and Estates Specialists Group. In 1999, she chaired the Law Society's Probate Task Force and continued as a member. In 1999, she also chaired the Law Society's Property Committee. During 2003 she prepared and delivered seminars in the area of wills and estates for, amongst others, the College of Law and the NSW Young Lawyers (Law Society of NSW).
14 In her statement Ms Suttor set out the assumptions she had made which accord with the facts as I have recounted them. Based on these assumptions, her reading of the supporting documents and her knowledge of good practice in the area of wills and estates, she formed an opinion as follows:
"A prudent and competent solicitor acting for Mrs Lalor in the drawing and subsequent execution of her 1998 will would have verified that she in fact had a separate interest in the two properties which she could dispose of by will. This verification could have been done by:
i. Inspection of the solicitor's strong room deeds packet if that is in fact where the title deeds were, or
ii. Request of the client to let him have the Certificate of Title for inspection as to the manner of the joint holdings, or
iii. A formal title search.
Each of those steps involved little time or financial expenditure.
If it became apparent in the course of taking instructions for drafting the Will that the Testator's interest in the property to be disposed of by Will was as joint tenants in about April 1998 a prudent and competent solicitor would have advised:
i. That the disposition could only take effect if the deceased survived the other joint tenant.
ii. Used words in the will to convey this such as 'my right title and interest if any in X property'.
iii. That it was possible to sever the joint tenancy during the joint lives at little cost and without payment of stamp duty so that irrespective of the order of deaths the deceased would have had at least one half of the property able to be disposed of by will.
This would also be the case if the testator's instructions were only to make changes to a previous Will limited to deleting certain beneficiaries and substituting others."
15 At the trial, counsel for the defendants objected to Ms Suttor's statement. It was pointed out that Ms Suttor had not made any particular assumption as to the nature of the retainer involved and also that Ms Suttor did not define what she meant by good practice. Ultimately, counsel apparently decided to allow the document to be admitted subject to the proof of underlying assumptions. On that basis, it was admitted. Ms Suttor did not give oral evidence.
16 The defendants' relied upon a statement of 13 February 2003 and a letter of 7 July 2003 from a solicitor, Neville James Moses, who has been in practice as such in New South Wales since 1963. Mr Moses outlined his history in practice and said that in his many years of practice he had acted for many clients drawing wills on their behalf including, in particular, husbands and wives who have no children and who may wish to provide for a division of their jointly owned property on the death of the survivor of them so that their jointly owned property is divided between the relatives of the respective spouses. Mr Moses said that in his experience this occurred most often in situations where couples were recently married and had no children but it also occurred in elderly people with marriages of long standing who had no direct heirs. Mr Moses said:
"10 However, I would point out that the question of usual practice of a solicitor in particular circumstances is governed to a large extent by the solicitor's retainer and the nature of the instructions received by the solicitor from the client.
11 In the present case it appears from the solicitor's notes and also from the account rendered by the solicitor to the clients that the solicitor's retainer was simply to make substitutions in the existing Wills of the spouses. He was not instructed to prepare the Will de novo and was not retained to do this.
12 In such circumstances I believe that the usual practice of prudent and competent solicitors would be to carry out the instructions of the client accepting as given that the existing Wills reflected the legal position with regard to the properties referred to in the Will of Mrs Lalor and that the question of the ownership of the property had been taken into account when those Wills were previously drafted.
13 Assuming that the existing Wills were in similar terms to the Wills prepared by the solicitor except for the substitutions referred to in his notes, in my opinion it would have been assumed by the solicitor as a matter of usual practice that either Mrs Lalor was the owner of the properties in question outright and that Mr Lalor had no interest in them or that they were owned as tenants in common by Mr and Mrs Lalor.
14 This is entirely consistent with the provision in the Will for Mr Lalor to receive a life interest in the property which was obviously the family home.
15 I acknowledge that in circumstances where a solicitor is retained to carry out a task such as this there may be something in the surrounding circumstances which causes him or her to make further enquiries of the client and as a result to advise the client to instruct the solicitor to carry out additional work beyond that contemplated in the original retainer.
16 In this case, however, I see nothing in the surrounding circumstances which would have caused the solicitor to query the appropriateness of the provisions in the existing Wills. In making this statement I am of course assuming that in fact all the solicitor did was to make the alterations to the existing Wills which are reflected in the notes forming part of the bundle of documents.
17 Accordingly I conclude that the solicitor has acted in accordance with usual practice of competent and prudent solicitors in this matter."
17 In the letter of 7 July 2003 Mr Moses said that he had considered Ms Suttor's report and confirmed that nothing in that report changed the opinion he had given in the matter although he respected Ms Suttor's qualifications and her standing in the legal profession. Mr Moses gave oral evidence.
18 The trial Judge regarded Ms Suttor's statement as sufficiently furnishing the Court with criteria enabling evaluation of the validity of her report. He noted that the plaintiffs objected to the admissibility of Mr Moses' statement essentially on the basis that his expertise was limited to property law and that he had no specialist accreditation. His Honour, I think rightly, noted that even if specialist accreditation is evidence of expertise, the availability of formal accreditation did not exclude acquisition of expertise through other avenues, notably extensive experience, research and teaching. He also rejected the argument that Mr Moses' experience in property law denied him expertise in will making. The argument that Mr Moses had no experience in litigation in the succession field did not address the issue before the Court which concerned the usual practice of competent and prudent solicitors in matters of will drafting, not in matters of litigation. The contest was between Ms Suttor, who was of the opinion that even if the testator's instructions were only to make changes to a previous will limited to deleting certain beneficiaries and substituting others, a prudent and competent solicitor in drawing the will would have verified that the testator had in fact a separate interest in the two properties which she sought to dispose of by will. On the other hand, Mr Moses considered the usual practices of a solicitor in particular circumstances was governed to a large extent by the solicitor's retainer and the nature of the instructions.
19 His Honour set out that part of Mr Moses' opinion which I have quoted and observed that Mr Moses did not resile from it in oral evidence. He stated that, though a solicitor should consider the effective disposition of property when drawing a will from scratch, it was going beyond the solicitor's retainer to check the instructions given for a previous will that was being amended. When the retainer is limited to making changes to the beneficiaries, as in the present case, it was a question for the solicitor whether the client appeared capable of giving informed instructions. In any case, there was no need to verify what a client owned if the client instructed the solicitor as to what he or she owned. It was only important to ascertain or verify what property formed part of the estate if there was any doubt about this at the time of obtaining instructions.