Ms Kirsty McLaren (in her capacity as executrix of the estate of Mr William George McLaren) v Hugo White Pty Ltd trading as Sautelle White Lawyers

A. Introduction

1. William McLaren, afflicted with early stage dementia, retained a solicitor, Hugo White, to prepare a new will in favour of his children, to revoke a power of attorney, and other matters. The existing power of attorney was granted to one Ms Finlay. [1] In the course of his services, Mr White obtained a title search of an unencumbered property owned by Mr McLaren in Warrandyte, Victoria. About a month later, Ms Finlay lodged a transfer for registration, making her and Mr McLaren registered proprietors as joint tenants of the Warrandyte property. Mr McLaren and his children did not become aware of the registered Transfer for some months, until about three weeks before he died. By his death, Ms Finlay became the sole owner through survivorship. Proceedings by the estate against Ms Finlay in Victoria were unsuccessful.
2. Mr McLaren's daughter, as the executrix of his estate, sued Mr White and his firm for the value of the lost Warrandyte property relying principally on the failure of Mr White to take steps to lodge a caveat on the title to the Warrandyte property after he obtained the title search. The proceedings against Mr White were commenced six years and one day after the date of registration of the Transfer by Ms Finlay.

B. Issues

1. The issues are: 1. whether, and at what date, Mr White had a duty to advise Mr McLaren to lodge a caveat on the Warrandyte property; 2. did Mr White's failure to advise Mr McLaren cause Mr McLaren to lose, or lose the opportunity to retain, the Warrandyte property, or alternatively, a half interest in that property; 3. was a claim for the loss of the half interest (obtained by Ms Finlay upon registration of the Transfer) statute-barred; and 4. what is the quantum of Mr McLaren's loss.

C. Background

1. The relationship between Mr McLaren and his former wife, Mrs Betty McLaren, produced four children: Kirsty, Susan, John and Tim McLaren, now adults. Mr and Mrs McLaren separated about 35 years ago. Mrs McLaren lives in Merimbula.
2. In the early 1980's, Mr McLaren commenced a relationship with Ms Finlay. Ms Finlay lived in Warrandyte and from 1983 owned a house there. In 2001 Mr McLaren purchased a residential property in Warrandyte. He resided at that property until about April 2008.
3. On 29 November 2006 Mr McLaren executed a Transfer of Land document, completed in handwriting, which purported to transfer his Warrandyte property to himself and Ms Finlay as joint tenants, for consideration described as "natural love and affection".
4. On 8 March 2007 Mr McLaren signed an Enduring Power of Attorney authorising Ms Finlay to do, on his behalf, anything he could authorise an attorney to do. Two witnesses, including a Victorian lawyer, certified the voluntary execution and capacity of Mr McLaren at the time. On the same date, Mr McLaren executed a will appointing the Victorian lawyer as his executrix and trustee, leaving his "furniture, paintings, pottery collection and equipment" to his children, and bequeathed the rest of his estate, real and personal, after testamentary expenses, half to Ms Finlay and half to his children. The will referred to "my home" in Warrandyte.
5. Mr McLaren's children were unaware of the Transfer in May 2008. Mr McLaren had apparently forgotten about it, and apparently disputed its validity when he became aware of it. [2]
6. In April 2008 Ms Finlay departed on a European holiday. Mr McLaren was left in Warrandyte in the care of his two adult daughters, Kirsty and Susan. Together the three decided to journey to Merimbula in New South Wales to visit Mrs McLaren. During the journey Mr McLaren repeatedly expressed a desire to leave Warrandyte "for good" and to "put his Warrandyte house on the market and move to Merimbula".
7. Mr White is a solicitor in Merimbula. Once Mr McLaren arrived in Merimbula, he retained Mr White to revoke the existing power of attorney in favour of Ms Finlay and appoint Mr McLaren's son, Tim McLaren, and Mrs McLaren as his guardians and new attorneys.
8. Mr White's records show that on 28 April 2008 Susan McLaren telephoned Mr White's office. She told an employee of Mr White that she was Mr McLaren's daughter, that Mr McLaren had given a power of attorney to his "lady friend", who was then in Italy but who had been managing Mr McLaren's affairs and "over time has gone through a lot of his money", that Mr McLaren was anxious about the situation, and that Mr McLaren had been assessed by a doctor and had early signs of dementia but was capable of understanding and signing documents. The employee recorded these matters in an email to Mr White and arranged for Mr White to visit Mr McLaren at Mrs McLaren's home. The email noted Ms Susan McLaren's instructions that Mr McLaren wanted to revoke the power of attorney and to discuss changes to his will.
9. The next day, 29 April 2008, Mr White attended upon Mr McLaren at Mrs McLaren's Merimbula house. Mr White's handwritten file note indicates that at the conference there was discussion of Mr McLaren's property at Warrandyte. Mr White recorded the address. He also noted a "van" and that at the house there was "no food" and "door handles removed from doors". The note also noted "refer matter to Law Institute". The note identified the address of Tim McLaren in Victoria and listed him and Betty McLaren as the persons to be appointed under a new power of attorney.
10. Mr White's costing records ("LEAP") in respect of the conference stated that it lasted one hour, that Mr McLaren was concerned about his finances, that the balance of his Commonwealth Bank interest bearing deposit account had reduced from $80,000 to $20,000, that Mr McLaren was concerned that Ms Finlay may be using a credit card in his name while overseas, and that Mr McLaren had been to the bank to have any authorities revoked and "will talk to other banks".
11. The LEAP records noted that Mr White would check on Mr McLaren's shareholdings, that Mr McLaren wanted a new will leaving everything to his four children, and that Mr McLaren was able to give Mr White his birthdate and children's names but "was a bit unclear about who the prime minister was". LEAP recorded Susan McLaren stating that "he'd got 21 out of 40 at a minimental conducted by the doctor" recently, that the local doctor was alarmed by the level of medication, and that Susan would write to the cardiologist.
12. The LEAP records also referred to the decision about the preferable person to hold the power of attorney and: "will call this afternoon to sign deed of revocation of current POA and sign and new one; want to update will at the same time; I to fix title search of Warrandyte property and company searches this afternoon; told him would limit costs to $600 at this stage". [3]
13. That afternoon, Mr White drafted the will, the power of attorney, the deed of revocation of the former power of attorney and the appointment of an enduring guardian. Susan McLaren telephoned Mr White about Mr McLaren's anxiety and Mr White stated that he would call by in the morning.
14. The next morning, 30 April 2008, Mr White did a title search of the Warrandyte property and found the title to be unencumbered with Mr McLaren as the registered proprietor. He also did a search of properties under Mr McLaren's name and found no other property. Mr White also obtained searches of Mr McLaren's shareholdings in public companies. He then attended upon Mr McLaren again for about 42 minutes, where the documents were signed and he obtained instructions to serve the revocation on Ms Finlay. Ms Kirsty McLaren gave evidence that Mr White informed her that he had checked the title to the Warrandyte property and found it to be in Mr McLaren's name and unencumbered. As there was no evidence to the contrary, and the imparting of such information would be expected as Mr White had completed a title search, I accept this evidence of the conversation.
15. The following day, Wednesday, 1 May 2008, Mr White wrote to Ms Finlay, advising her of the revocation of the power of attorney, enclosing the Deed of Revocation and asking, "Could you also please let us have a full account of all monies of Mr McLaren's that you have accessed as his attorney". A copy of the letter was sent to the Victorian lawyer. As noted earlier, the executrix of the earlier will and the witnesses to the revoked power of attorney were members of that lawyer's firm. In the covering letter, the firm was asked, "We would be pleased if you could let us know whether you have details of any transactions undertaken by the attorney on Mr McLaren's behalf".
16. Mr White then reported his work of that day in a letter to Mr McLaren, noting that he had requested Tim McLaren to sign and return the enduring power of attorney and that Betty McLaren was authorised to act for Mr McLaren, she having signed the power of attorney and guardianship consent. Mr White also enclosed a copy of the new will providing for Mr McLaren's children as beneficiaries and confirmed that Mr McLaren's shareholdings had not changed since Centrelink was last advised of them.
17. On 5 May Susan McLaren telephoned Mr White's office. She requested and subsequently obtained six certified copies of the power of attorney and guardianship documents for use in contacting "financial institutions and share companies" and for Mr McLaren's doctor. Susan complained about having contacted the Melbourne doctor, seeking medical records, and providing an authority, but that the doctor contacted Ms Finlay and had not sent through the records.
18. By this same date, Mr McLaren had informally agreed to purchase a block of vacant land at Merimbula. Mr White was recorded as Mr McLaren's solicitor. On 6 May 2008 Mr White commenced acting for Mr McLaren on this purchase.
19. On 12 May 2008 Susan McLaren telephoned Mr White concerning a demand by a guardianship assessment person in Victoria demanding to speak to Mr McLaren. Susan McLaren also told Mr White that she would drop off "the account and details of property that she wants returned".
20. On 14 May 2008 Kirsty McLaren emailed Mr White a list of property to be returned by Ms Finlay. The email referred to recent discussions, the visit by Ms Susan McLaren and notes and photos left by Susan. The email contained the contact details of Tim McLaren in Melbourne and suggested that the property be returned to him. The list referred to a number of pieces of art, including sculptures, prints, antiques, pottery, ceramics, an animation film, family photographs and other items. It also referred to credit cards, share certificates, bank statements, a Winnebago, and in respect of Mr McLaren's property at Warrandyte, the keys to the roller door and, perhaps importantly, the title deeds.
21. Susan McLaren sent Mr White another email that same day expressing concern about other unidentified investments of her father, saying she had "personally witnessed [Ms Finlay] removing dad's filing cabinet from his home and…returning it a few days later", and asked about forcing Ms Finlay to "reveal all her financial affairs and indeed any joint property or investment". She referred to a possible holiday home, and to common dinner discussions about "selling dad's home". She identified another ceramic item, a pig. She also stated "could you please check to see that [Ms Finlay] didn't marry dad before going off on her honeymoon with her mates" and voiced her "strong suspicion" about artwork having been removed.
22. Mr White answered Susan McLaren's email by saying that he had done searches of Mr McLaren's and Ms Finlay's landholdings in Victoria but had only located Mr McLaren's property (although his LEAP records suggest that he only searched Mr McLaren's landholdings, which may explain why he did not discover the property Ms Finlay owned in Warrandyte). Mr White said he could not search the Registry of Births, Deaths and Marriages but stated that Tim McLaren, with a certified copy of his power of attorney, could do that.
23. On 15 May 2008 Mr White, by mail, forwarded unchanged to Ms Finlay the requested list of items provided by Kirsty McLaren. Apart from the list the letter was brief, noting the list was "of property our client requires to be returned to him" and "to facilitate the return of the property please contact Mr Timothy McLaren and arrange the delivery of the items to his home".
24. Mr White received no response to this letter, and made no attempt to follow it up until prompted to do so on 23 July 2008.
25. On about 15 May 2008 Ms Finlay, having returned from Europe, made an application to the Victorian Civil and Administrative Tribunal ("VCAT") for guardianship of Mr McLaren. A statement Ms Finlay made in respect of this application reveals that she was aware of the revoked power of attorney and revoked Centrelink Nomination, and that Mr McLaren had "Given written and verbal permission to his son, Tim McLaren, to sell his house and handle his financial affairs". [4] In the application, Ms Finlay refers to Mr McLaren assets as "HOME, CAR, FURNITURE, SHARES, TERM DEPOSIT" and says she has been Mr McLaren's partner for 26 years. [5] A copy of the application was on Mr White's file, as was a letter from Ms Finlay dated 16 May 2008 seeking to have herself recorded as holding a power of attorney regarding "any share holdings of Mr McLarens" [6] and relying on the revoked power of attorney.
26. At least by 21 May 2008, Mr White was informed of the Tribunal proceedings by Ms Finlay. Mr White recommended that Victorian solicitors be retained though Mr White continued to represent Mr McLaren in those proceedings and sent a letter to VCAT dated 24 June 2008 to that effect. On the following day, Mr White received a copy of email correspondence in early May between Kirsty McLaren and Ms Finlay, referring, among other things, to "obvious animosity" between Ms Finlay and Susan McLaren.
27. Mr White on 25 May 2008 corresponded with Kirsty McLaren about the Tribunal proceedings.
28. Unbeknown to Mr McLaren, his daughters and Mr White, on 27 May 2008 Ms Finlay lodged the Transfer of Land signed 29 November 2006, presumably with the Certificate of Title, and thereby Mr McLaren and Ms Finlay became the registered proprietors as joint tenants of Mr McLaren's Warrandyte property. The Transfer included a "domestic partners statutory declaration" whereby Ms Finlay declared, somewhat inconsistently, that Mr McLaren and herself "are domestic partners…living…as a couple" and also "the transfer was made by reasons of a breakdown in a relationship".
29. From 27 May 2008 until 25 June 2008, Mr White was involved in communications regarding the guardianship application by Ms Finlay. In respect to a query from Kirsty McLaren about whether he would prefer not to receive all the emails, Mr White on 27 May 2008 stated, "I appreciate being kept in the loop but am conscious of the amount of time I'm spending on all this and dad's initial instructions to limit the costs". He gave advice discouraging the involvement of the Public Guardian. The email communications continued, and both Michael Rafter (the Victorian solicitor retained for Mr McLaren) and Mr White remained actively involved in the Victorian guardianship proceedings. In early June Mr McLaren arranged for a further medical assessment with his treating doctor, Dr Bonney, in Merimbula, which delayed the guardianship hearing until late in June.
30. On 15 June Kirsty McLaren emailed Mr White for advice regarding financing the purchase of the Merimbula land until funds became available when the Warrandyte property was sold.
31. In late June Ms Finlay withdrew her application for guardianship.
32. On 10 July 2008 Mr White wrote to Mr McLaren seeking instructions regarding the proposed contract to purchase the Merimbula property, and the contract was signed on 15 July 2008. On 22 July 2008 Kirsty McLaren by email requested Mr White to remind Ms Finlay about the return of the McLaren family property since no response had been received. Mr White sent another letter in that regard to the solicitors of Ms Finlay.
33. On 5 August 2008 Mr White, via a bank title search, became aware of the registration of Ms Finlay's interest in Mr McLaren's Warrandyte property. He informed the McLaren family. He forwarded a copy of the Transfer to at least Ms McLaren and Tim McLaren and advised "You should obtain immediate advice from a solicitor in Victoria as to the possibility of having the property returned to [Mr McLaren's] name". A caveat dated 6 August 2008 was recorded as having been lodged on the title on 8 August 2008.
34. On 13 August 2008 Mr McLaren's Victorian solicitor, Michael Rafter, sought from the Victoria State Revenue a copy of the statutory declaration lodged to support the Transfer. He envisaged legal action by Ms Finlay to remove the caveat. Mr Rafter was still awaiting the statutory declaration on 19 August 2008. On that date Mr Rafter advised Mr White in writing: "I have advised Tim [McLaren] that a letter should be sent to [Ms Finlay] requesting she make the title available so we can lodge a transfer to convert the joint tenancy into a tenants in common immediately. This would avoid the consequence of her gaining the whole property should Mr. McLaren die before we can pursue and succeed in a claim for the whole of the property to be returned to him. I would appreciate hearing your opinion in relation to this proposed course." [7]
35. On 21 August 2008 Tim McLaren asked Mr White whether he had received a response from Ms Finlay's lawyers regarding Mr McLaren's documents. On 22 August Mr Rafter wrote to Mr White stating: "Following is the letter I propose to send [Ms Finlay] subject to your approval and comments. If we obtain the Certificate of Title we can change the joint tenancy to a tenant in common, pending further action to have the whole property returned to Mr. McLarens name". [8]
36. On 22 August 2008 Mr Rafter provided copies of documents to Mr White noting "I am instructed that over the past few months [Mr] McLaren's condition has stabilized despite the threatening vicissitudes of Ms. [Finlay's] claims for unjust enrichment" and mentioning "the pressing need for a straightforward resolution". [9] The copy documents included a letter to Ms Finlay seeking the Certificate of Title and a response within seven days; a letter to Tim McLaren confirming "that the Transfer of Land has been prepared and I will arrange for you to sign and swear the document" and indicating that Mr Rafter was less than certain that Ms Finlay would return the Certificate of Title; and a copy self-dealing transfer where Mr McLaren transferred to himself his half share so as to sever the joint tenancy.
37. On 29 August 2008, the seventh day after the letter from Mr Rafter, Mr McLaren died. Mrs McLaren was listed as his "de facto". The death certificate indicates that he had pneumonia for "days" and acute respiratory failure for "12 hours". On that same day Ms Finlay's solicitor sent a letter by fax to Mr Rafter stating: "As you may be aware, our client is the long term partner of 26 years of William George McLaren ("Gus"). On 8 March 2007, Gus appointed our client as his Enduring Power of Attorney (financial). Subsequently, in June 2007, Gus was diagnosed with Alzheimer's disease. On 17 April this year our client went overseas for a planned holiday, during which time she arranged for Gus's daughters, Susan McLaren and Kirsty McLaren to stay at the Francis Street property to look after Gus. Whilst our client was overseas, Gus was taken to his former wife's property in Merimbula and our client has been denied any communication with him since this time. We understand that on 30 April 2008 Gus purportedly revoked our client's Enduring Power of Attorney (financial), and we have to hand a copy of that revocation. Our client has not been provided with a copy of the purported appointment of Tim McLaren as Gus's attorney and we would be pleased if you would provide us with a copy of this document. In view that Gus McLaren has established and progressive Alzheimer's disease we would be pleased if you would provide us with evidence and confirmation that he had legal capacity to revoke his Power of Attorney as at 30 April 2008 and appoint Tim McLaren. We have instructions to issue an Application to the Victorian Civil Administrative Tribunal seeking an Order, inter alia, that the revocation of our client's Enduring Power of Attorney is invalid." [10]
38. On 4 September 2008 Mr Rafter wrote to the Victorian Registrar of Titles stating: "Dear Sir, re Transfer McLaren to McLaren and [Finlay] I act on behalf of Timothy McLaren and the other children of William George ( Gus ) McLaren. Unfortunately William George McLaren died on the 29th August 2008. His son Timothy, as holder of an Enduring Power of Attorney from his father had signed a Transfer of Land on 25th August 2008 intended to sever the joint tenancy between William George McLaren and [Ms Finlay]. On 22nd August 2008 I made a written request to [Ms Finlay] to return the Certificate of Title. She has failed to do so. She had the Certificate in her possession having lodged a Transfer of Land dated 29th November 2006 at the Titles Office on 27th May 2008. She purported to do this on behalf of William George McLaren. A photocopy of this transfer is enclosed. William McLaren informed his family shortly before his death that he had no memory of signing this transfer. His purported signature on the transfer differs markedly from other examples of his signature witnessed by family members. It is requested that you exercise your power under Section 104(3) Transfer of Land Act to order production of the duplicate Certificate of Title so that we can apply to register the transfer to sever the joint tenancy. [Ms Finlay] currently resides at 16 Hall Road Warrandyte South. We understand that Mr McLaren's Executors will eventually take action to have the whole of the land contained in Certificate of Title Volume 07804 Folio 057 returned to the Estate. Yours Faithfully," [11]
39. On 8 September 2008 Mr Rafter received the statutory declaration from the State Revenue Office. On 9 September 2008 Mr Rafter, in a letter to Ms Finlay's solicitor, foreshadowed proceedings to have the Transfer to Ms Finlay set aside.
40. On Mr McLaren's death, Ms Finlay by survivorship became the sole registered proprietor of the Warrandyte property. The evidence did not disclose if the change in the Register occurred notwithstanding the caveat or subsequent to its removal.
41. Timothy McLaren was appointed executor and in early 2009 commenced Victorian proceedings against Ms Finlay to set aside the Transfer. Ms Finlay defended those proceedings and in September 2009, filed a claim for orders pursuant to Part IV of the Administration and Probate Act 1958 (Vic), for what in New South Wales would be termed a family provision claim. The parties before me agreed that Ms Finlay's claim was brought against the possibility that she was unsuccessful in the proceedings brought by Mr Tim McLaren. [12]
42. Both proceedings were dismissed by the Court on 6 May 2013 as a result of a compromise of the proceedings after a hearing but before judgment. In the orders Tim McLaren "acknowledges that the defendant is absolutely entitled to [Mr McLaren's Warrandyte property]". [13] No party in these proceedings challenged the reasonableness of the settlement.
43. The orders also noted the return of four items of art to Tim McLaren and payment by Tim McLaren to Ms Finlay of $48,942.95 from monies held in trust by Tim McLaren's solicitors. The genesis of this amount or purpose of the payment was not revealed. The orders included an order that "There is no order as to costs". [14]
44. On 28 May 2014 Ms Kirsty McLaren, as the then executrix of Mr McLaren's estate, commenced these proceedings.

(a) Susan McLaren

1. The plaintiff called Ms Susan McLaren. The defendants challenged her credit and the plaintiff expressly conceded that she "demonstrated a poor recollection of events… [and] that the Court would not accept her evidence unless it [was] supported by a contemporaneous document". [15] I shall adopt that position.

(b) Betty McLaren

1. Mrs Betty McLaren also gave evidence which was challenged in cross-examination. She accepted that she did not remember Mr McLaren saying anything about the title to his property, but asserted that she remembered him saying he had a house in Warrandyte which was unencumbered during one of the two visits. Her evidence of discussion about the absent filing cabinet in Mr White's presence in early May was uncertain - "I think he was there"; she could "not-not completely" recall it. "I just would have imagined he would have been there" she said. As Susan McLaren sent an email to Mr White some 14 days later stating, "A point of interest is that I personally witnessed [Ms Finlay] removing Dad's filing cabinet from his home and then returning it a few days later", I would infer that there was no earlier reference to the title missing from the filing cabinet, at least in Mr White's presence.
2. Mrs Betty McLaren's evidence about Mr McLaren expressing a desire to sell the Warrandyte property is also uncertain. She records him saying he wanted the property to go to his children, and subsequently, in the same conversation, records Mr McLaren stating "I want to put my house on the market" and "my intention is to sell Warrandyte and buy something here". In oral evidence, when asked about Mr McLaren's talk of selling Warrandyte, Mrs Betty McLaren said, "I think he might have come out with it. I don't know". She also accepted that he probably did not talk at the first meeting of buying a Merimbula property.
3. In these circumstances, Mrs Betty McLaren's evidence alone would not persuade me that discussions occurred with Mr White on 29 or 30 April about the whereabouts of the title to the Warrandyte property, of selling Warrandyte or buying a property in Merimbula. I prefer the contemporaneous documents as a more reliable record of the nature of the communication.

(c) Mr White's failure to give evidence

1. Mr White did not give evidence and no explanation for his absence was given. A Jones v Dunkel inference is available and may be drawn against Mr White. I was informed by the defendants that an affidavit of Mr White had been served, but it was not read, a matter that was also unexplained. In those circumstances, I would infer both that Mr White's evidence would not have assisted his defence, and that I can more readily draw inferences from other evidence in favour of the plaintiff. But the failure of Mr White to give evidence does not enable the Court to find evidence where there is none.

(d) The evidence of Kirsty McLaren

1. In her affidavit, Ms Kirsty McLaren recounted a conversation between Susan McLaren, Mr McLaren and Mr White where Susan raised the missing Certificate of Title and the removal of the filing cabinet. For the reason referred to in respect of Mrs Betty McLaren's evidence, in particular the subsequent email from Susan McLaren about the matter, I do not accept that this discussion occurred in Mr White's presence at any time prior to it being referred to in the Susan McLaren email to Mr White.
2. Accordingly, the affidavit evidence of each of Mrs McLaren and Susan and Kirsty McLaren about specific references to the missing Certificate of Title in the initial conferences is not especially persuasive.

(e) The notes of Mr White

1. Without other evidence I would conclude that the notes of Mr White record significant matters of discussion. However, given Mr White's failure to give evidence, without explanation, I would not infer that the notes are a complete record. Further, the times recorded in respect of the conferences suggest much more must have been said than is recorded in the notes.
2. As indicated earlier, I am satisfied that something about Mr McLaren's Warrandyte property must have been said during the initial conferences. Mr White recorded it as the first item on his file note, and he subsequently obtained, on instructions, a title search of the Warrandyte property. Mr White's LEAP records evidence repeated concerns in Mr McLaren about Ms Finlay dealing with his property generally: her general power of attorney needed to be revoked, she has "gone through a lot of his money", he is anxious and concerned about his finances, the balance in an account has reduced from $80,000 to $20,000, she may be using his credit cards overseas, and his shareholdings need to be checked.
3. Accordingly, I accept that Mr White was informed of and understood Mr McLaren's concerns about Ms Finlay's dealings with his real and personal property, including the Warrandyte house.
4. Whilst the precise terms of the discussion about Warrandyte are no longer clear, some guidance is provided by subsequent notes. On 5 May 2008 Kirsty McLaren wrote to Ms Finlay stating at the outset that Mr McLaren "almost immediately" upon her previous arrival told her "that he wanted to sell the [Warrandyte] house, and again part way through the trip to Merimbula, Mr McLaren expressed the same thoughts" and "he was totally adamant about it". This suggests that the sale of Warrandyte would likely have been a subject of conversation with Mr White. So also does the title search on 30 April and the informal decision to purchase a property in Merimbula five days later since the sale of the Warrandyte property was eventually to provide the funds to buy the Merimbula property. I would infer that any consideration of a new home for a person of the age and health of Mr McLaren would involve consideration of what was proposed in relation to the old one. This would also explain why Tim McLaren, residing in Victoria, was the first listed of those to receive a power of attorney.
5. Once Mr White received the title search on 29 April 2008, he was aware that no mortgagee held the Certificate of Title. A question about its whereabouts would be expected but there is no evidence that it was asked by Mr White or that anyone provided a satisfactory answer.
6. But at least by 15 May 2008 Mr White was aware that Ms Finlay was likely to be in possession of the Certificate of Title, for he passed on to her a request for the return of the title deed. The absence of any comment from Mr White about that request is consistent with it being earlier discussed, and with Mr White not perceiving it to be a matter of controversy that Ms Finlay had the Certificate of Title in her possession.

E. The duty of Mr White

1. The nature of the duty of care undertaken by Mr White is informed by the ambit of the retainer. For the reasons given, I conclude that Mr White was requested in the initial conference to provide advice and assistance to protect Mr McLaren's property, including the Warrandyte property, from Ms Finlay. I also conclude that Mr White was aware that there was no mortgage on the property, that neither Mr McLaren nor his daughters held the Certificate of Title, and by 15 May 2008, if not earlier, that the Certificate of Title probably was in Ms Finlay's possession.
2. Both parties obtained reports from expert witnesses as to the duty of Mr White in these circumstances. Dennis Bluth, a partner of HWL Ebsworth and an accredited property specialist since 1994 who has practised "in all the areas of property and conveyancing", was retained by the plaintiff. He gave the opinion that it would be common practice for a reasonably competent and prudent solicitor in the position of Mr White to seek instructions to enquire whether Ms Finlay had the Certificate of Title, to follow up in about two weeks, and then if no satisfactory response was received, to lodge a caveat on the title.
3. Peter Rosier, also an accredited specialist in property law since 1994 and who had practised as a solicitor or barrister since 1973, was retained by the defendants. His opinions were similar to Mr Bluth's save that perhaps he would have allowed two to three weeks for a response from Ms Finlay. He also referred to the need to engage a Victorian solicitor.
4. In a joint report, the experts agreed on the matters they were asked to consider, namely that a solicitor in Mr White's position would have sought instructions to write to Ms Finlay and her former solicitors seeking the Certificate of Title, and if it was not after a reasonable time located, or located but not returned, the matter would assume some urgency and the solicitor would seek instructions to lodge a caveat. The only difference between the experts was about when the caveat would reasonably have been lodged. It could have been lodged mid-May according to Mr Bluth, or because Ms Finlay was overseas, perhaps late May/early June according to Mr Rosier.
5. In oral evidence, both solicitors recognised the importance of lodging a caveat where they have been informed of possible dishonest conduct by Ms Finlay in misusing the power of attorney and misappropriating Mr McLaren's assets, and that a caveat should be immediately lodged. The oral evidence included the following: "HIS HONOUR: …Would I understand the effect of part of your evidence to be that if there are certain concerns about the behaviour of possible possessor of the certificate of title, that in some circumstances, that would warrant an immediate caveat, or not? WITNESS ROSIER: The thing, as Mr Bluth and I are both agreeing about, is the caveat is a relatively simple thing, and a registered proprietor as caveat, as Mr Bluth said, is pretty simple. So, if there were a little of concern that the person might deal with the property, as you would put it a caveat on it as promptly as may be. HIS HONOUR: Is that common view, or? WITNESS BLUTH: Yes, exactly. HIS HONOUR: …are you able to say what level of concern a solicitor must have, or what facts, a reasonable solicitor must be aware of, or some other guide as to this threshold which would cause a solicitor acting properly to put a caveat on a title, assuming that it's an unmortgaged property, and the registered proprietor doesn't have the title and the solicitor has some evidence about where a title may be. Perhaps doesn't have any idea where it may be, what sort of matters must the solicitor be aware of to cause … him or her, to take that action. WITNESS ROSIER: The latter circumstance, your Honour referred to there. The lack of knowledge; complete lack of knowledge of the whereabouts would encourage you to put it on pretty much straight away, as both Mr Bluth and I have noted, in this particular period of time, the incidents of mortgage and identity fraud in relation to certificates of title was quite significant, and so the absence of knowledge of the whereabouts of the CT would encourage a solicitor to recommend that his clients instruct him or her to put a caveat on pretty much straight away. If there were - if the whereabouts of the CT were known, or the client was strongly of the view that they knew of the whereabouts of the certificate of title, you'd want a little more evidence that there was a likelihood of fraudulent, or improper dealing, but I do come back to the point that I made, first of all is the simplicity of doing something sometimes suggests that you do it even though it may not be thoroughly warranted. HIS HONOUR: Is that sort of better to be careful? WITNESS ROSIER: Yeah, better to be careful if it - if you can do something that you know will give, which you believe would give, whether or not - in this circumstance it would indeed - had given any real protection, is - is a question your Honour will no doubt have to [ponder] over, but - and I won't. But the fact of the matter is, is that the ease with which it can be done is - is a factor in my view. HIS HONOUR: Yes, do you have anything to say about any of that, Mr Bluth? WITNESS BLUTH: No, I agree, I agree." [16] I accept this evidence. Against a background where Mr White has received complaints about dishonest conduct by Ms Finlay, who may hold the Certificate of Title, it is evidence that the solicitor should promptly advise that a caveat be lodged.
6. Section 5B of the Civil Liability Act 2002 requires the risk of harm to be foreseeable, not insignificant and involve precautions that would reasonably be taken, in order for there to be a duty of care to take those precautions. Here the risk of misuse of the Certificate of Title was foreseeable as misuse of Mr McLaren's property was foreseen in the instructions given to Mr White. It was not far-fetched or fanciful. [17] The potential consequence of loss of all or part of the property or equity in the property was plainly significant. The evidence of the experts establishes that a reasonable solicitor would take the precaution of advising that a caveat should be lodged. The burden of lodging a caveat was minimal, it would be a relatively secure protection against a serious loss involving the property, so the matter in s 5B(2)(c) of the Civil Liability Act 2002 supports a duty.
7. I conclude that once the location of the Certificate of Title is unknown or uncertain, or is believed to be in the hands of someone about whom suspicions are raised, a duty arose to protect Mr McLaren's real property by advising the client to lodge a caveat. Mr White might not have received any information about the possible location of the Certificate of Title in the initial conferences, but the uncertainty of its location should create concern, similar to the concern the solicitor would have when the Certificate of Title is known or believed to be in the possession of a person whose integrity is in doubt. The simplicity of the lodging of a registered proprietor caveat is a matter in favour of a duty to act expeditiously.
8. By 15 May 2008, Mr White had been instructed that Ms Finlay held the Certificate of Title, and he had received repeated accounts of her dealing inappropriately with Mr McLaren's property: using his credit cards, diminishing his bank balance, and removing his filing cabinet and his artworks. Whether this accurately described Ms Finlay's conduct or not, Mr White's duty was informed by what he was told. In my view, at least by mid-May 2008, he was under a duty to advise Mr McLaren of the prudence of lodging a caveat on his property.
9. Until 5 August 2008 Mr White had failed to advise Mr McLaren to lodge a caveat on the title of his Warrandyte property. That omission constituted a breach of duty from mid-May 2008 until 5 August 2008.

F. Causation

1. Section 5D of the Civil Liability Act 2002 requires, for liability in negligence, that there be "factual causation", namely that negligence is a necessary condition of the harm, and "scope of liability", namely that it is appropriate that Mr White's liability extend to that harm. Mr White made no submissions disputing the scope of liability. It seems appropriate that as his professional duty was to take reasonable care to protect Mr McLaren's property, by appropriate advice, a failure by Mr White to do so which resulted in loss should render him liable. The circumstance that the loss was also occasioned by Mr McLaren signing a transfer does not excuse Mr White. Part of his role was to take reasonable care to protect Mr McLaren against the consequences of his own conduct and limited incapacity, a matter apparent from Susan McLaren's warning about the possibility of Ms Finlay having married her father before her European trip. It is not necessary that the precise means of injury be foreseen. [18]
2. The real issue was the existence of factual causation, otherwise known as the "but for" test. [19]
3. It was not disputed that Mr McLaren would act on Mr White's advice to lodge a caveat. Nor was it disputed that once Mr McLaren gave instructions for a caveat to be lodged, Mr White would immediately become aware of Ms Finlay's interest in the property, either from a preliminary title search before lodgement or as a result of the action of lodging the caveat. This knowledge would be, as it was in actuality in August 2008, the catalyst that would prompt action to sever the joint tenancy.
4. Whether the registration of the Transfer would have been avoided, or whether joint tenancy would have been severed before Mr McLaren's death had he known about Ms Finlay's joint interest in May or early June 2008, is not certain. This uncertainty raises the application of the principles governing damages for loss of opportunity.
5. In Mal Owen Consulting Pty Ltd v Ashcroft, [20] the Court of Appeal gave recent consideration to the loss of opportunity principles arising from breach of duty by a solicitor. Neither party initially pressed a finding based on loss of a chance until the Mal Owen decision was delivered. Further submissions were then received.
6. In Mal Owen, the Court of Appeal by majority awarded damages to the appellant plaintiff. The reasoning of the members of the Court differed.
7. Basten JA held that one of the "principles…well established in the general law" [21] was that "where the claim is in contract…damage…must be proved on the balance of probabilities in order to complete the cause of action", [22] but that "actual occurrence of the harm is not an essential element of the cause of action". [23] With great respect to the learned judge of appeal, I find this distinction between "actual occurrence of the harm" which need not be proven, and "damage" which "must be proved" a little difficult to follow. This is especially so when harm is given a wide meaning in s 5 of the Civil Liability Act 2002 to include "economic loss", where s 5D requires proof that a failure to exercise reasonable care and skill was a necessary condition of the "harm", [24] whether the claim is brought in tort or contract, [25] and where all facts relevant to causation must be proved on the balance of probabilities. [26] Undoubtedly, proof of actual damages is not an essential element of the cause of action for breach of contract. But if substantial damages for breach of contract are the claimed remedy, then causation of those damages sought must be proved on the civil onus. Damages in tort, but not in contract, may be the "gist of the cause of action", [27] but the remedy of damages for breach of contract cannot be awarded without proof of loss. This does not mean that a lost valuable opportunity is not damages or that a less than probable prospect is valueless: "the loss of the chance…[is] for relevant purposes an actual loss" [28] so long as the chance has "value". [29]
8. The High Court in Badenach v Calvert [30] specified that a lost opportunity "may be compensable in tort", [31] but only if the opportunity is of some value. An opportunity will be of value if it involves "a substantial…prospect that a benefit will be acquired or a detriment avoided". [32] The plaintiff failed in Badenach because he did not prove "that there was any loss of a valuable opportunity". [33] Although Basten JA did not speak in terms of "proof" or the "balance of probabilities", his Honour did appear to require that the lost opportunity had "real value", [34] even in a contract case.
9. It is clear that there has to be "an actual loss of some sort". [35] If that is so, the apparent difference asserted by Basten JA between proof of loss in contract and tort may in this case be illusory. In either case, the lost "valuable opportunity" [36] is the actual loss.
10. Barrett AJA, the other majority judge in Mal Owen, noted in a separate judgment that no separate consideration was given at trial, or in the grounds of appeal, of a case in contract. [37] His Honour determined that there must be proof on the balance of probabilities of "a substantial prospect of a beneficial outcome", [38] whereas Macfarlan JA, dissenting, relying upon Badenach at [41], found that "proof of a substantial chance of a beneficial outcome" [39] was insufficient to prove causation; there must be proof that it was "more probable than not" that the "valuable opportunity" would have been received. [40]
11. The distinction appears to rest on the difference between "proof of a substantial chance of a beneficial outcome" but for the negligence, and proof of a lost "valuable opportunity". [41] The High Court in Badenach decided that the second was sufficient but the first was not. [42] Macfarlan JA in Mal Owen focused on the insufficiency of the first, whereas the majority focused on the sufficiency of the second. For my part, the differences between a "substantial chance of a beneficial outcome" and a "valuable opportunity" are not immediately obvious or easily applied. Perhaps the latter is concerned with the actions of the plaintiff, whereas the former may be entirely within the control of a third party.
12. Moreover, any distinction in the elements required to be proved in loss of opportunity cases in contract and tort [43] does not have an impact in this case, for two reasons. First, as the Executrix stands in the position of Mr McLaren, she has the benefit of an action in contract as well as in tort. And secondly, the opportunity to prevent by caveat the registration of Ms Finlay's interest as a joint tenant, and the three-month opportunity to sever a joint tenancy, are both valuable opportunities lost to Mr McLaren as a result of Mr White's failure to advise Mr McLaren to lodge a caveat. These lost valuable opportunities each satisfy the requirement of a lost valuable opportunity identified in the tort claim in Badenach. [44]
13. Accordingly, I am satisfied on the balance of probabilities that by reason of Mr White's negligence Mr McLaren lost a valuable opportunity to prevent the registration of Ms Finlay's interest by placing a caveat on the title before 27 May 2008.
14. I am also satisfied on the balance of probabilities that Mr McLaren lost a valuable opportunity to sever the joint tenancy by reason of the caveat not being lodged in the days after 27 May 2008. Because of Mr White's negligence after 27 May 2008 in failing to advise of the need for a caveat, Mr McLaren was denied the knowledge of Ms Finlay's registered interest until the month of his death. Absent that negligence, Mr McLaren would have received that knowledge about two and a half months earlier, and would then have had a reasonable period of three months to sever the joint tenancy. His prospects of severing the joint tenancy in that period are relevant to the assessment of damages, assessing the value of that opportunity.
15. I am also persuaded "on the balance of probabilities [that the] course of action [Mr McLaren] would have taken" [45] would have been to take steps to sever the joint tenancy. That is established by the course of action taken in August 2008, when Mr McLaren, his guardian and attorney, and those advising him became aware of the registered interest of Ms Finlay. On 5 August 2008 the co-ownership of Ms Finlay was discovered. Mr White advised that a Victorian solicitor should be retained. Mr Rafter was retained. Mr Rafter advised of the need to transfer Mr McLaren's interest to himself to sever the joint tenancy. He prepared a transfer, sent it to Tim McLaren for execution, and it was apparently executed on 25 August 2008. Mr Rafter was then awaiting the Certificate of Title. The day Mr McLaren died, Ms Finlay's solicitors responded to Mr Rafter's correspondence, although the Certificate was not produced.
16. As indicated earlier, Mr White did not argue that the scope of liability requirement in s 5D(1)(b) of the Civil Liability Act 2002 did not extend to a loss caused by a failure to sever the joint tenancy (when Mr White's duty was to advise of the need for a caveat). In the circumstances, taking steps to sever the joint tenancy was a consequence of knowledge of Ms Finlay's interest, which would necessarily result from the lodging of a caveat. Mr Rafter's conduct in August 2008 indicates as much.

G. The limitation point

1. Mr White pleaded a limitation defence. As noted earlier, the Executrix commenced the proceedings on 28 May 2014, six years and one day after Ms Finlay became registered as a joint owner on 27 May 2008. I have found that Mr McLaren lost the valuable opportunity to lodge a caveat and prevent the registration of the Transfer. That opportunity ended on 27 May 2008 with the registration of Ms Finlay's interest. It follows that Mr McLaren then has a cause of action that first accrued at the latest on 27 May 2008. Mr McLaren's estate thus appears to be out of time on 28 May 2014 to commence the proceedings relying on a failure to lodge a caveat by 27 May 2008, by reason of s 14 of the Limitation Act 1969.
2. The timing of these underlying factual matters is not disputed. Kirsty McLaren submits however that "time did not start to run until the loss was discovered on 5 August 2008". She advances three arguments, asserting that the commencement of the limitation period was postponed: 1. until the existence of a latent defect in title is reasonably discoverable; or 2. because the wrongful act effectively precluded the bringing of proceedings; or 3. until the judgment in the unsuccessful Victorian proceedings.

(a) Latent defect not reasonably discoverable

1. The Executrix relied upon Christopoulous v Angelos, [46] Registrar-General v Cleaver [47] and Scarcella v Lettice. [48] She says that the "latent defect" was the existence of a signed Transfer held by Ms Finlay.
2. Christopoulous involved a failure by the Registrar-General to register a right-of-way, and an incorrect reply to a requisition by the vendor's solicitor that the property was not so encumbered. The test expressed in that case was not when the loss was discoverable, but when it was first incurred. [49] Is this a case where Mr McLaren sustained no actual damage until a contingency was fulfilled? And until that occurred, was the loss prospective only and might never be incurred? [50]
3. Here actual damage occurred on 27 May 2008 when Ms Finlay became registered on the title. There was nothing prospective in the loss, for at that point Mr McLaren ceased to be a sole owner and became only a joint owner. The loss did not await someone ascertaining a right, or if it did, it occurred when Ms Finlay ascertained her right by registering the Transfer. The decision in Christopoulous does not assist the plaintiff.
4. Cleaver involved a height covenant that was not registered on the land intended to be burdened by the covenant. More than two decades after this failure by the Registrar-General, the registered proprietors of the burdened land sought to build above the height restriction. The Court of Appeal dismissed a limitation defence by the Registrar-General against a claim for damages by the owner of the land benefited by the covenant. Like Christopoulous, the latent defect was a matter not recorded on a title; whereas here Ms Finlay's interest was recorded on the title. In both Christopoulous and Cleaver, the defect would not have been discovered by ordinary conveyancing procedures. [51] Mr White's failure to discover the joint ownership of Ms Finlay cannot be described as a latent defect in title. Latent defects do not impact on the value of the property until they are discovered. The registration of Ms Finlay's half interest impacted on the value of the interest held by Mr McLaren immediately after it was registered.
5. Scarcella involved the failure of a solicitor to obtain the proper searches to identify the lack of right of way and so advise the purchaser. Like the present case, this was not a latent defect in title, [52] and the limitation period was not postponed. Like here, the loss in Scarcella was not contingent or prospective.
6. Accordingly, the failure of Mr White to advise on the lodgement of a caveat was not a latent defect in title operating to postpone the limitation period.

(b) Wrongful act precluding the bringing of proceedings

1. Kirsty McLaren referred to the statement of Deane J in Hawkins v Clayton, [53] but did not develop the argument. The passage quoted referred to where the "cause of action for a wrongful act [is] barred by lapse of time during a period in which the wrongful act itself effectively precluded the bringing of proceedings". But here proceedings were not barred by the wrongful act. Rather, from August 2008 until May 2014, everything about the solicitor's conduct and the loss was known, including the time the loss occurred.
2. Deane J also stated in Hawkins that "any period during which the wrongful act itself effectively precluded the institution of proceedings" should be "excluded" from the limitation period. Did this apply to the period from May to August 2008?
3. The plaintiff conceded that the status of Deane J's observations is unclear, as indicated in Issa v Issa & Anor. [54] In any event, I am not satisfied that proceedings were "effectively precluded" by the failure to lodge a caveat. Mr McLaren signed the Transfer and the Executrix eschewed any argument that the limitation period should not run by reason of any disability of Mr McLaren. Mr McLaren's failure to remember that he had signed a transfer is not a reason to postpone the limitation period.
4. I am not satisfied that this reason operates to postpone the limitation period in this case.

(c) The Victorian proceedings

1. The Victorian proceedings did not postpone Ms Finlay's ownership in the Warrandyte property being registered. Had the proceedings by the former executor been successful, it may be that some or all of the damages could have been recouped from Ms Finlay. But that does not postpone the cause of action any more than an action against one tortfeasor postpones a limitation period running against another. Mr McLaren suffered damage when he was no longer the registered owner, and that occurred on 27 May 2008.

(d) Conclusion

1. In my view, Mr McLaren first suffered damage by the registration of Ms Finlay's half interest. That occurred because a caveat was not lodged before 27 May 2008. The cause of action is thus "not maintainable". Mr McLaren cannot sue for the damage resulting from that failure of Mr White because the damage first accrued to Mr McLaren more than six years before the proceedings were commenced.
2. Any breach of duty by Mr White that allowed Ms Finlay to become a registered joint owner on 27 May resulted in damage first occurring outside the limitation period. That damage is not recoverable. The only potentially recoverable damage is that which resulted from breaches after 27 May 2008. That damage is alleged to be the loss of the remaining half interest.

H. Assessment of damages: lost opportunity of preventing registration

1. In case I am wrong about the application of the limitations defence, I propose to assess the value of the chance to preclude the registration of the Transfer.
2. The initial consequence of a caveat being lodged before 27 May 2008 would have been to preclude the registration of the Transfer. But I cannot suppose that the position would have remained that way. Ms Finlay was not averse to taking legal action. She applied to VCAT to become the guardian of Mr McLaren, an action that seemed to consume a lot of attention for about six weeks. Ms Finlay also resisted the subsequent action by the then executor, Timothy McLaren, in the Victorian Supreme Court. She filed her own "family provision" claim. She was successful in retaining the whole of Mr McLaren's Warrandyte property, and in obtaining a significant sum as part of the compromise of the proceedings, perhaps to cover her costs.
3. Any proceedings between Mr McLaren and Ms Finlay concerning Ms Finlay's entitlement to register the transfer may have been unresolved at the time of Mr McLaren's death. A question then arises, on which judicial views have differed, as to whether Ms Finlay would be entitled to register a transfer after the death of the transferee. Whether a transfer is registerable after the death of the transferee was given detailed consideration by Gzell J in Watt v Lord. [55] His Honour determined, after reviewing all the authorities, [56] that the efficacy of a transfer is unaffected by the death of the transferee. With respect, I found his Honour's reasoning persuasive.
4. The Executrix argued that Ms Finlay's failure to register her interest operated to deprive the other co-owner, Mr McLaren, of the opportunity to sever the joint tenancy. Certainly the existence of the Transfer would need to be known before steps to sever the joint tenancy would be available. But it is not apparent that all three modes of severing a joint tenancy mentioned in Corin v Patton [57] are unavailable until the Transfer is registered.
5. A related question concerns the interest that Ms Finlay obtains on registration after Mr McLaren has died: as a tenant in common or as a joint tenant with a right of survivorship? None of the authorities referred to in Watt, nor the judgments in Anderson v Anderson [58] and Isin v Ozen [59] indicate that the right of registration as a joint tenant possessed by Ms Finlay would change into the different but similar right as a tenant in common. In principle, the rights Mr McLaren granted her to become a joint tenant, including with a right of survivorship, should not be altered except by severance of the joint tenancy. If Mr McLaren did not do that in his lifetime, Ms Finlay's right to be registered as a joint tenant, and also to become the sole owner by survivorship, should continue. In the result, Ms Finlay would be entitled to registration after Mr McLaren's death even though she was a volunteer so long as she possessed, and had been given authority to use, the Certificate of Title to achieve registration of the Transfer. There was no evidence to the contrary of her authority to use the certificate. The reference to the title deeds in the letter of 15 May 2008 does not suggest any lack of authority, and the settlement of the subsequent Victorian proceedings in her favour supports her authority.
6. As Mr Rafter noted on 4 September 2008, the circumstance that Ms Finlay became registered on the title implies that she had the Certificate of Title. If she was lawfully in possession of the Certificate of Title, and I am not satisfied otherwise (even without her evidence), she had all she needed to register her interest. Nothing more was required from Mr McLaren to complete the gift to her of the half interest. In that event, she would be entitled to be registered as a joint tenant. [60]
7. Ms Kirsty McLaren submitted that: "but for Mr White's negligence in failing to advise that a caveat should be lodged any time prior to Ms [Finlay] lodging the Transfer on 27 May 2008, the Transfer would not have been lodged and Ms [Finlay] would not have become the registered proprietor of one-half of the Warrandyte Property, and as a result [Mr McLaren] would have retained the whole of his interest in the Warrandyte Property". [61]
8. This submission may be correct as far as it goes in relation to the initial result, but overlooks the circumstances that the gift was complete and the likelihood that Ms Finlay would have taken steps to have the caveat removed or commenced legal proceedings.
9. It may be, as Kirsty McLaren argued, that the Victorian proceedings were stacked in favour of Ms Finlay because by then she was the registered proprietor. The principle of indefeasibility gave her rights as a registered proprietor that she would not otherwise have had. But it would not protect her against fraud.
10. Even without being registered, Ms Finlay's position was not weak. She possessed a transfer to her of half the property as a joint tenant, signed by Mr McLaren, together with the Certificate of Title. The evidence indicates that Mr McLaren did not recall signing and providing Ms Finlay with the Transfer, yet that was not disputed in the proceedings before me. Mr McLaren may likewise have forgotten that he had provided Ms Finlay with the Certificate of Title. And any inference against Ms Finlay arising from her not registering the Transfer earlier, or because of the contents of the will, would not be incapable of explanation. As there is no evidence before me from Ms Finlay on these matters, I am left to draw inferences. But it would be folly to presume that the evidence would be the same in those anticipated 2008 proceedings as in these. Ms Finlay would clearly have been an active party in those proceedings but played no role before me.
11. Ms Finlay could also make a "family provision" application, as she did. Although she had a separate home, her position as a long time de facto spouse, a matter only weakly resisted by the plaintiff, would strengthen her claim.
12. In all the circumstances, I would infer that when he signed the Transfer Mr McLaren intended for Ms Finlay to at least get half of his Warrandyte property and with the Transfer, the Certificate of Title, the former will, the uncontradicted proof of a long period as Mr McLaren's partner, and her success in the subsequent Victorian proceedings, she would likely have obtained it.
13. But damages for a loss of opportunity involve not proof on the balance of probabilities but an assessment of the "probabilities or possibilities of…what would have happened". [62]
14. For the reasons given, I assess the possibility of Mr McLaren resisting the registration of the Transfer, and Ms Finlay's joint ownership, at 15%. As any damages are statute-barred, I need not proceed further with the calculation of these damages, although a calculation can readily be done utilising the findings later in this judgment.

I. Assessment of damages: the other half interest

1. Mr McLaren lost his remaining half interest in the Warrandyte property when it devolved upon Ms Finlay by survivorship. The question then is whether Ms Finlay would have obtained Mr McLaren's half interest by survivorship upon Mr McLaren's death had Mr White advised Mr McLaren earlier that he should lodge a caveat.
2. Mr White did not contend that the claim for damages for the loss of the other half interest in the Warrandyte property, to which Ms Finlay became entitled when Mr McLaren died, was statute-barred. Mr White continued to be under a duty to advise about the need for the lodgement of a caveat in the period from 28 May 2008 to 8 August 2008. His failure to do so in this period was a breach of duty. Although the lodgement of a caveat at that time would ultimately have been ineffective of itself to deprive Ms Finlay of ownership of the Warrandyte property (as was the caveat lodged 8 August 2008), yet the step of lodging a caveat would have revealed the Transfer, and prompted steps to sever the joint tenancy.
3. Mr White argued that any breach in this period did not cause any loss, because Ms Finlay would have become the sole owner by survivorship in any event. The force of this argument depends upon Mr McLaren's prospects of severing the joint tenancy before his death had he known earlier of Ms Finlay's registered half interest. If the joint tenancy was severed, Mr McLaren and Ms Finlay would own the property equally as tenants in common and Mr McLaren's half interest in the property would remain part of his estate (and would pass to his children under his new will).
4. Assessment of those prospects is informed by how long Mr McLaren would have taken to sever the joint tenancy. Would this have occurred before Mr McLaren died? If 22 days were insufficient in the circumstances that prevailed in August 2008, would an additional period, part of May plus June, July and early August, have made a difference? Would Mr McLaren have successfully severed the joint tenancy in three months when he did not do so in three weeks?

J. Severing the joint tenancy

1. The High Court in Corin [63] quoted a passage from the decision of Williams v Hensman [64] explaining the three ways of severing a joint tenancy: "A joint-tenancy may be severed in three ways: in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under the jus accrescendi. Each one is at liberty to dispose of his own interest in such manner as to sever it from the joint fund - losing, of course, at the same time, his own right of survivorship. Secondly, a joint-tenancy may be severed by mutual agreement. And, in the third place, there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. When the severance depends on an inference of this kind without any express act of severance, it will not suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested."
2. As in Corin, [65] the second and third methods seem inapplicable here. They involve some element of agreement or mutual intention of the parties, and there was no evidence to indicate that Ms Finlay was at all minded to sever the joint tenancy. But the first method requires Mr McLaren to transfer his own interest, a step which, at the death, he attempted unsuccessfully.
3. In New South Wales, s 97 of the Real Property Act 1900 (NSW) provides a means whereby the first method of severance can be effected: by one co-owner transferring their interest to themselves, apparently without producing the Certificate of Title. There was (and is) no equivalent provision in Victoria.
4. Unilateral severance of the joint tenancy involves "an act" of Mr McLaren "operating upon his own share" "to dispose of his own interest" so as to sever it from the joint fund. That may be by "a disposition…amounting at law or in equity to an assignment of the share of that owner". [66] The means of an effective disposition differ at law and in equity.
5. Severance is only effective at law if it produces a change on the Register. Generally, in Victoria, registration of a change in Mr McLaren's interest would only occur upon production of the Certificate of Title. [67] But Mr McLaren did not hold the Certificate. Section 104 of the Transfer of Land Act 1958 (Vic) has procedures to deal with this circumstance.
6. Under s 104, the Registrar could require the production of the Certificate of Title, [68] say from Ms Finlay, but only if at least 14 days' (now 30 days') notice is given. This process would involve persuading the Registrar of Titles that production of the Certificate was "necessary or appropriate", the Registrar then preparing and sending written notice, specifying a period of at least 14 days, and Ms Finlay complying with that notice. That period, because of the need for service of a written notice, might be expected to take at least three weeks after application is made to the Registrar. None of these steps, not even the initial application to the Registrar, appear to have occurred in the period before Mr McLaren died. However, Mr Rafter had requested the Certificate, had prepared the transfer, had achieved execution of the transfer, and immediately after Mr McLaren's death, made a request of the Registrar.
7. Section 104(3) of the Transfer of Land Act 1958 (Vic) allows the Registrar, at the Registrar's discretion, to dispense with the production of the Certificate of Title. This may have saved the 14-day-notice period, but may have required other matters to be established. For example, the Registrar may require information of the kind specified in s 97(2) and (3) of the Real Property Act 1900 (NSW). Whether Mr McLaren lacked capacity at that point was immaterial as Tim McLaren held an enduring power of attorney.
8. So a legal disposition required production of the Certificate of Title, dispensing with the Certificate of Title, or, under s 137 of the Transfer of Land Act 1958 (Vic), a replacement Certificate of Title. The third option required the Registrar to be satisfied of the "loss, destruction or obliteration" of the Certificate, which would have been unlikely as the evidence pointed to Ms Finlay holding the Certificate of Title.
9. If Ms Finlay did not comply with a request by the Registrar to produce the Certificate of Title, court proceedings to compel production would be necessary. Ms Finlay did not comply with Mr Rafter's request to produce the Certificate. Proceedings were foreshadowed by Mr Rafter, although it might be doubted whether those proceedings would have been expeditiously resolved.
10. The most likely means by which Mr McLaren could have obtained a legal disposition so as to sever the joint tenancy would be by the Registrar dispensing with the requirement for the Certificate to be produced. Whilst there is no evidence as to the attitude of the Registrar to such an application, or the expedition with which it would be finalised, there seems to be good reason why it might be dealt with speedily: the joint tenants were former partners who were estranged, one partner held the Certificate of Title, the other wished to sever the joint tenancy; the Certificate had been formally requested on 15 May 2008 (and in July and August) and had not been produced; Mr McLaren had some level of dementia and his life expectancy was uncertain; and Mr McLaren, by his attorney, wanted to register an interest only to sever the joint tenancy.
11. In this case, like in Badenach, [69] the prospect of severing the joint tenancy depended on the decision of a third party. In this case, it depended on the Registrar dispensing with the production of the Certificate of Title. But the Registrar is not in quite the same position as the third party testator in Badenach. The latter enjoyed the freedom as a testator to deal with his estate as he pleased. The former, as a public officer, is presumed to act reasonably and in accordance with Administrative Law requirements. The matters listed above persuade me that the Registrar would likely exercise his powers under s 104 to dispense with production of the Certificate, perhaps on condition that Ms Finlay be first notified of the dealing.
12. Would a transfer by Mr McLaren to himself (as was prepared and executed in this case) be effective? Section 72(3) of the Property Law Act 1958 (Vic) provided that "a person may convey land to or vest land in himself". In a New Zealand case, Samuel v District Land Registrar, [70] Moller J held that a transfer by a joint tenant to herself unilaterally severed the joint tenancy and established a tenancy in common. A similar approach was taken in Canadian cases: Re Murdoch & Barry [71] and Re Sammon. [72] That approach was followed in New South Wales although the self-dealing transfer was ineffective as it was not registered. In Freed v Taffel, [73] Helsham CJ stated: "I believe that a conveyance by one joint tenant of his interest to himself as tenant-in-common is capable of severing the jointure. A conveyance to a third party does so; a person may assure property to himself (Conveyancing Act 1919, s 24); there is no reason why a conveyance by a joint tenant to himself should not have the same effect in law. The Ontario Court of Appeal assumed it to be so…Needham J in McNab v Earle did not question it." [74]
13. In McNab v Earle, [75] Needham J held that a joint tenant cannot sever the joint tenancy unilaterally by execution of an unregistered and therefore revocable transfer to himself, but appeared to accept that if registered, the transfer to oneself would be effective to sever the joint tenancy.
14. This principle was considered but not decided in Corin v Patton. [76]
15. Accordingly, I would conclude that, on the present state of authority, a "self-dealing transfer" would be sufficient to sever a joint tenancy if registered, but not otherwise. [77]
16. I referred earlier to Mr Rafter's correspondence in August establishing that he was aware of what was required, and had taken steps to effect the severance: by preparing the self-dealing transfer, having it executed, and requesting the Certificate of Title. I referred also to the matters that provide a good reason for the Registrar to dispense with production of the Certificate of Title. There are also the lesser possibilities that Ms Finlay may have agreed to severance, or to the production of the Certificate of Title, or that proceedings compelling production of the Certificate may have successfully concluded before 29 August 2008. These matters persuade me that on the balance of probabilities, within three months after 28 May 2008 the self-dealing transfer would likely have been registered and that the joint tenancy would have been severed prior to 29 August 2008.
17. The other means of severing the joint tenancy unilaterally was in equity. But a contract with oneself is not a contract at all, and a gift to another would not be effective (as indicated above) unless everything necessary had been done by the donor. That would require provision of the Certificate of Title. That was unlikely to be available to Mr McLaren.
18. For these reasons, it seems doubtful whether, in this case, the joint tenancy could be severed in equity without a contract for valuable consideration. Of course Mr McLaren could have entered such a contract with his children, for example, but there was no evidence of willingness on anyone's part to do so. No steps to that end took place in August 2008.
19. Accordingly, I am satisfied that a self-dealing transfer would likely have been registered within the three-month period, but I am not satisfied that there were good prospects that any other method would have been effective within that period to sever the joint tenancy.
20. The severing of the joint tenancy meant that the half interest would not have devolved upon Ms Finlay by survivorship. In my view, this would have been the likely result if Mr White had advised of the need for a caveat in late May 2008, which would have revealed Ms Finlay's registered interest.
21. On the question of assessment of damages, establishing whether severance of the joint tenancy was more likely than not to have occurred is not the crucial question, although I am satisfied of it. Rather, valuing the chance or prospect of that occurring is necessary, notwithstanding Mr White's initial approach (until the recent supplementary submissions) that the Executrix should receive a half interest or nothing. Matters of assessment are not determined on the balance of probabilities.
22. The proper value of Mr McLaren's loss is the value of that opportunity to sever the joint tenancy in a three-month period. It is not certain that the joint tenancy would be severed in that period. But on the evidence of what Mr Rafter did in the three weeks from 8 to 29 August 2008, I think it is quite likely. In my view, the prospects of severing the joint tenancy in the three months either with or without the consent or cooperation of Ms Finlay should be assessed at 80%. That represents my assessment of the prospects of securing Mr McLaren's half interest in the property. The value of that opportunity in the three-month period should be 80% of the value of a half interest in the Warrandyte property.
23. The Executrix relied on an expert report to submit that the value of the Warrandyte property in 2008 was $430,000. In that report, the expert, Craig Kilby, gave an opinion of a land value of $300,000 and improvements of $130,000 in value. Mr White accepted the land value, disputed the value of the improvements, and submitted the proper value was $400,000. No other witness gave evidence.
24. Mr White challenged Mr Kilby's report on a number of bases: that the property was not inspected internally, that he saw no photographs of the internal or external presentation in 2008, that he assumed it was liveable and rentable, that he applied no discount for not seeing the property, and that the comparators suggest a lower value.
25. Because Mr Kilby did not internally inspect the Warrandyte premises, and not at all in 2008, the reliability of this assessment of value is diminished. But that does not lead to a discount, any more than it should lead to a premium if he were retained by the defendants. The matters raised by Mr White, apart from the reference to comparators, do not suggest a lower value. Although the reliability of Mr Kilby's report is diminished, it is the only evidence before the Court, it is relevant, and I have no other evidence upon which to base a decision about value, save for the comparable properties.
26. Mr White's submission that "the comparator improvements suggest a lower value" was not developed. On the other hand, Mr Kilby's oral evidence was that he was familiar with the location and features of the particular comparators, which tends to enhance the reliability of his valuation. I accept the submission by the Executrix that it was not established that the report was flawed, the values overstated or the methodology suspect. In my view, it would be inappropriate for the Court to engage in a valuation exercise afresh merely on the basis of the comparators identified by the valuer, Mr Kilby, but without his training, skill, experience and knowledge of the comparators. Without some specific and plain error identified, I am persuaded on the balance of probabilities that I should accept the valuation given by Mr Kilby, notwithstanding its limitations.
27. I assess the value of the Warrandyte property at $430,000, and a half interest in that property as a tenant in common is $215,000. No submissions were made that a half interest should have a value other than 50% of the value of the entire property.
28. Thus, the value of the lost half interest is $215,000. The value of the opportunity to avert that loss is 80% of $215,000, or $172,000, plus interest.
29. Interest should be calculated from 1 January 2009, almost five months after the bank search was received. This is the date I assess to be the time when the Warrandyte property would likely have been sold, bearing in mind that some delay would have followed the death of Mr McLaren in August 2008. That interest to date (27 July 2018) is $118,123.96.
30. I will hear the parties on costs.

K. Orders

1. Accordingly, the orders of the Court are: 1. Judgment for the plaintiff against the defendants in the sum of $290,123.96. 2. Costs reserved.

Endnotes

1. A pseudonym is used since Ms Finlay was not a party to the proceedings and thus unable to challenge any allegations made about her.
2. T222/38-46.
3. Exhibit 1, p 2.
4. Exhibit 1, p108.
5. Exhibit 1, p 111.
6. Exhibit 1, p 120.
7. Exhibit 1, pp 299-300.
8. Exhibit 1, p 302.
9. Exhibit 1, p 303.
10. Exhibit 1, pp 309-310.
11. Exhibit 1, p 312.
12. Exhibit 3.
13. Exhibit 1, p 339.7.
14. Exhibit 1, p 339.27.
15. Plaintiff's submissions ("PS"), 16/8/17, [6].
16. T460/33-T461/35.
17. Rosenberg v Percival (2001) 205 CLR 434 at [64].
18. Chapman v Hearse (1961) 106 CLR 112, 120-121.
19. See Wallace v Kam (2013) 250 CLR 375 at [16].
20. [2018] NSWCA 135.
21. At [13].
22. At [12].
23. At [12].
24. S 5D.
25. S 5A.
26. S 5B.
27. See e.g. Sellars v Adelaide Petroleum NL; Poseidon Ltd v Adelaide Petroleum NL (1994) 179 CLR 332 at 359 per Brennan J; [1994] HCA 4.
28. Sellars at 349.
29. Sellars at 348.
30. [2016] HCA 18.
31. At [39].
32. At [39].
33. At [40].
34. Mal Owen at [37].
35. Sellars (1994) 179 CLR 332 at 349; [1994] HCA 4 at [20].
36. Badenach at [41], see also Sellars [1994] HCA 4 at [38].
37. Mal Owen at [94].
38. Mal Owen at [99].
39. Mal Owen at [63].
40. See Badenach at [40]-[41], Mal Owen at [62]-[64].
41. Badenach at [41].
42. At [41].
43. Cf Basten JA in Mal Owen Consulting Pty Ltd v Ashcroft [2018] NSWCA 135 at [12]-[18], a distinction not apparent in the other judgments.
44. At [41].
45. Badenach at [34].
46. (1996) 41 NSWLR 700.
47. (1996) 41 NSWLR 713.
48. (2000) 51 NSWLR 302.
49. See p 705E.
50. See Christopoulous at 711B, Wardley Australia Ltd v State of Western Australia (Rothwells Loan case) (1992) 175 CLR 514 at 532.
51. Scarcella, p 307 at [22].
52. See p 307 at [23].
53. (1988) 164 CLR 539 at 590.
54. [2015] NSWSC 112 at [36]-[37].
55. (2005) 62 NSWLR 495 at [17]-[54].
56. J A Westaway & Son Pty Ltd v Registrar-General (1996) 7 BPR 14,773, McVey v Denis (1984) 73 FLR 45, Davis v Williams (2003) 11 BPR 21,313, Tierney v Halfpenny (1883) 9 VLR (E) 152, National Trustees, Executors and Agency Co of Australasia Ltd v Boyd (1926) 39 CLR 72, Brunker v Perpetual Trustee Co (Ltd) (1937) 57 CLR 555, Anning v Anning (1907) 4 CLR 1049, Currey v Federal Building Society (1929) 42 CLR 421, O'Regan v Commissioner of Stamp Duties [1921] QSR 283, Cope v Keene (1968) 118 CLR 1, Corin v Patton (1990) 169 CLR 540, Re Skinner (1894) 6 QLJ 68, Finucane v Registrar of Titles [1902] St R Qd 75, Wainewright v Elwell (1816) 1 Madd 627; 56 ER 231, Macedo v Stroud [1922] 2 AC 330.
57. (1990) 169 CLR 540 at [7]; [1990] HCA 12.
58. [2017] NSWCA 131 at [54]-[61].
59. [2017] NSWCA 316.
60. See Anning v Anning (1907) 4 CLR 1049 at 1057 (as per Griffith CJ); [1907] HCA 13, Corin v Patton (1990) 169 CLR 540 at 582-3, Motor Auction Pty Ltd & Brown as liquidator of John Joyce Wholesale Cars PL v John Joyce Wholesale Cars Pty Ltd (1997) 23 ACSR 647 at 655-666.
61. PS, 16/8/17, [128].
62. Sellars at 349.
63. [1990] HCA 12 at [7].
64. (1861) 1 J & H 546; (1861) 70 ER 862.
65. At [7].
66. In re Wilks; Child v Bulmer [1891] 3 Ch 59 at 61-62, see Corin v Patton (1990) 169 CLR 540 at 587 per Toohey J (underlining added).
67. See s 104, Transfer of Land Act 1958 (Vic).
68. Under the Transfer of Land Act 1958 (Vic), s 104(2).
69. [2016] HCA 18 at [95]-[99].
70. [1984] 2 NZLR 697.
71. (1975) 64 DLR (3d) 222 - Ontario High Court.
72. (1979) 94 DLR (3d) 594, 597 - Ontario Court of Appeal.
73. [1984] 2 NSWLR 322.
74. At 324.
75. [1981] 2 NSWLR 673, 676.
76. (1990) 169 CLR 540 at 562 (per Mason CJ and McHugh J), 584 (per Deane J).
77. See generally J Tooher, "Testate or Intestate: Is There Anything for the Estate? Unilateral Severance of a Joint Tenancy" (1998) 24 Mon ULR 422. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 August 2018