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[2011] NSWSC 1584
Supreme Court of NSW
2011-11-21
Schmidt J, Mr P
Original judgment source is linked above.
Judgment 1By statement of claim filed in February 2009, the plaintiffs, the five children of the late Mrs Julia Vagg, brought a claim for damages against the defendants, who were at the time, all partners of a firm of solicitors, McPhee Kelshaw, who had advised Mrs Vagg in 2001 and 2005. The children claim that Mrs Vagg was given inadequate advice as to how she could take steps to ensure that she could leave them her interest in a property at Winmalee where she lived, before her death; and that the will which was drafted for her, did not reflect her express intended wishes. 2Ms Margaret Vagg, the eldest child, was the executrix of the estate. All the children were beneficiaries under the will. It was executed in January 2005, not long before Mrs Vagg's death in March. There is no complaint about the drafting of the will itself, other than that the request made about the disposition of the property was not effective, because Mrs Vagg's interest in the property was held as a joint tenancy with her husband. The property went to him on her death and did not form a part of her estate. 3The children claim that Mrs Vagg sought advice from the defendants as to steps she could take so that the property would form a part of her estate and that the advice which she was negligently given, was that there was nothing which could be done. That is denied by the defendants, who also claim that they owed the children no duty of care in the circumstances. 4The statement of claim alleges that Mrs Vagg retained the defendants both to advise her and to draft the will and that as a result, the defendants owed each of the children a duty of care, to take all reasonable steps to ensure that they received the benefit of the assets of Mrs Vagg, as she wished. 5It was not in issue that the property did not form a part of Mrs Vagg's residual estate and that on her death, it passed to her husband under the survivorship rules. She left nothing to her husband under her will. All she had was left to her children in equal shares, apart from a number of specific bequests in relation to items of personal significance. It was also not in issue that there were a number of steps which could have been taken by Mrs Vagg, prior to her death, which might have resulted in her interest in the property passing to her children. 6What was in issue was the nature of the defendants' retainer in 2005; what advice was then sought by Mrs Vagg and given by the defendants; whether the will gave effect to Mrs Vagg's communicated wishes; whether the defendants were negligent in the advice given in 2005; whether, in the circumstances any duty of care was owed to the children and if so, what the content of the duty was; whether such a duty was breached, if it existed; and if it was, what damages resulted. 7The breaches of duty alleged were: "16. The defendants failed to: (a) advise Mrs Vagg that she could unilaterally sever the joint tenancy of the property pursuant to s.97 of the Real property(sic) Act 1900 (NSW); (b) advise Mrs Vagg that she could make an application to the Supreme Court of New South Wales for the sale of the property pursuant to s.66G of the Conveyancing Act 1919 (NSW) in order to obtain the monetary value of her half share of the property; (c) advise Mrs Vagg that she could make an application for a property settlement with her former husband in the Family Court of Australia or the Federal Magistrates Court of Australia which would have, inter alia involved obtaining orders for the severance of the joint tenancy of the property; (d) advise Mrs Vagg that upon her death her share of the property would automatically vest with her former husband by operation of law; (e) advise Mrs Vagg that her request contained in clause 11 of the will was unenforceable; or (f) seek instructions from Mrs Vagg to take any of the steps referred to in sub-paragraphs 16(a) to 16(b), inclusive."
The Will 8The will provided, as to the Winmalee property: "11. I REQUEST that the house that I reside in and own jointly with my husband CARL STANLY VAGG at XX XXXXXXX XXXXX Road, Winmalee, be sold and the money received from that sale be given to our children for their education, to enable them to pay any HECS debts that they may have or incur." 9That reflected a document which Mrs Vagg had prepared and provided Ms Woodward-Brown, the defendants' employed solicitor, when they met to discuss the preparation of the will. That document had provided: "I request that the house at Winmalee be sold and the money received be given to the children for their education as a priority - equal shares. Margaret has a huge HECS debt and Julia, Ben and Cecilia are also well on the way to these large loans. James will need educational expenses catered for too as he may do uni or tafe etc. There are other expenses that they have to incur and I would like to be able to assist them. James', Cecilia's and Ben's share are to be retained by Margaret until they are 25 - if something important comes up before they are 25 then she should use her discretion eg HECS debt. Julia can have access from 21 because she will need a new violin."
The evidence 10Mrs Vagg's three daughters, Margaret, Cecilia and Julia gave evidence. An affidavit was sworn in the proceedings by Mr Carl Vagg, but he was finally not called. The defendants' case is that certain Jones v Dunkel (1959) 101 CLR 298 inferences flow as a result. 11The defendants' 2001 file was not in evidence. It has been destroyed, although it was in existence in 2005. The 2005 file was in existence. Mr David Dunkley, who was at the time a partner at McPhee Kelshaw and advised Mrs Vagg in 2001, gave evidence, as did Ms Woodward-Brown, who prepared Mrs Vagg's will in 2005. 12Mr and Mrs Vagg had been married for many years, but separated in 2001. It was Mrs Vagg who intiated the separation, without first telling her husband what she proposed to do. Beforehand, Mrs Vagg took advice from Mr Dunkley, in the form of a free consultation. Mrs Vagg never divorced her husband or brought any other proceedings against him. 13Mrs Vagg was a school teacher. She had always looked after the family's financial affairs. In 2001, she arranged for a tenancy of the Winmalee property to be terminated, arranged a removalist and moved out of the family home to Winmalee with the children. 14Mr Vagg had been seriously injured in a car accident while in the navy many years previously, with the result that he had been discharged. He worked but very little afterwards and had not worked for many years, prior to his wife's death. It was Mrs Vagg who had gone to work both part-time and latterly full-time, in order to support the family. After the separation, Mr Vagg obtained a Veteran's Affairs pension to support himself, and Mrs Vagg continued working full-time as a teacher. 15Mr and Mrs Vagg arranged their affairs informally. They agreed that Mrs Vagg would live at the Winmalee property and Mr Vagg at the former family home at Faulconbridge. Before the separation, the family all lived in their home at Faulconbridge. They also owned a block of land next door, as well as the Winmalee property, which it seems was acquired with the proceeds of a compensation settlement received by Mr Vagg. Before Mrs Vagg moved to the Winmalee property, it was rented out, which generated income for the family. After Mrs Vagg's death, Mr Vagg sold all three properties and purchased a property at Coogee, where he continues to live. 16Mrs Vagg contracted breast cancer and when her health was deteriorating in 2005, instructed the defendants again, at least in relation to the preparation of a will. At the time of Mrs Vagg's death, the children were aged between 15 and 25 years. Only James, then aged 15 years was still living at home. He was then sharing his time living with both his mother and father and after Mrs Vagg's death, lived with his sister Margaret, 17Ms Margaret Vagg is a solicitor. At the time of her mother's death, she had completed her law degree and was undertaking a practical legal training course. She did not then seek any legal advice in relation to the estate, understanding at the time that, given its size, it was unnecessary to obtain probate. She did not know at the time that her circumstances and those of her brothers and sisters were such that they could have made an application under the Family Provision Act 1982, in respect of their mother's interest in the Winmalee property. It was common ground that it would have formed part of Mrs Vagg's 'notional estate' under the Family Provision Act. Mr Vagg would also have had standing to bring such an application, given his circumstances and that he was left nothing in his wife's will. 18These proceedings were brought some years later, after Ms Margaret Vagg discovered that steps could have been taken by Mrs Vagg, before her death, to sever the joint tenancy in the Winmalee property. It is common ground that if that had occurred, her interest in the property would have formed a part of her residual estate, which would have passed to her children under her will. The children's case is that this is what their mother wished to achieve when she sought the defendants' advice in 2005 and that the defendants were not only negligent in their failure to advise their mother as to the steps necessary to be taken to achieve that outcome, at the time that they drafted her will, but also in their failure to ensure that the necessary steps were implemented. 19On the evidence, the children's each faced financial hardship after their mother's death, at a time when they were each financially dependant on her in various ways, given their various ages and circumstances. The inheritance which they believed they ought to have received, would have been used to ameliorate that hardship. In the result, they seek an order for damages for the value of a 50% interest in the house, worth some $145,000 plus interest and costs. 2001 20Ms Margaret Vagg gave no evidence in her affidavit about conversations with Mrs Vagg in 2001, but in cross-examination she said: "Q. Did you discuss with your mother at this period, that is to say from about 2001 and in the year or two that followed, that she had reached an agreement with your father under which she was to have the Winmalee properties and he was to have the Faulconbridge properties? A. No. Q. You did not discuss with your mother any aspect of agreement that she might have had with your father? A. She told me she was just leaving things be, as they were, that she never mentioned an agreement, she moved out unilaterally. Q. Is this right, at no time from 2001 right up until her death did your mother express to you an intention or a desire to commence legal proceedings against your father? A. No, she expressed a desire to do that. Q. During that period it would be true to say, would it not, that she expressed to you from time to time concern about your father's well being? A. Yes." 21I observe that there appears to be an error here in the transcript. On my understanding of her evidence, Ms Margaret Vagg said that '[n]o, she expressed no desire to do that.' 22Ms Julia Vagg also gave no evidence about these matters in her affidavit. However, she gave oral evidence of her close relationship with her mother and of their discussions about the Winmalee property. It emerged that she had earlier prepared a note of her recollections, which were not included in her affidavit. There she said: "Mum sought legal advice about possible divorce and property settlement. She picked me up from school in Springwood one day and said she had been to the solicitors and that they had recommended that it would be better for her if she didn't initiate property settlement because the assets would probably be divided 60% to dad 40% to mum at best, because dad had no earning power due to his injuries and the fact that he hadn't worked for the last 20+ years. Therefore she would probably be left with very little to buy a house with. They thus recommended that it would be better for her to just stay in Winmalee and in 7 or 12 years (can't quite remember which) it would legally be hers anyway so then she could sell it and buy somewhere she liked. They also said that they would have to sell all three properties and then the money would be divided, which she didn't want to do as she knew dad would be devastated to have to sell our family home and she didn't want to hurt him any more than leaving him already had. After this we would often go looking at houses in the Mountains on the way to my violin lessons etc, to see the kind of place we would buy once she was able to sell the Winmalee house." 23From this account, it would appear that Mrs Vagg did not understand aspects of the advice which Mr Dunkley gave her in 2001, or her daughters have not understood what she told them, or misremembered what she said after receiving Mr Dunkley's advice. The suggestion that the Winmalee property would be 'legally hers' simply if Mrs Vagg lived in it for 7 to 12 years, has no foundation in law, nor was it put to Mr Dunkley that it was advice which he gave Mrs Vagg. 24Mr Dunkley's affidavit evidence was that this was not advice which he has ever given a client. That evidence must be accepted. It was not challenged in cross-examination. 25Ms Cecilia Vagg gave no evidence about relevant conversations with her mother until 2004, when her mother told her she wished the Winmalee property to be sold when she died, but 'she expected there would be difficulty with it because she didn't think Dad would sell the house or give us any financial support'. 2005 26Before she died in 2005, Mrs Vagg also discussed the Winmalee property with her children. That she was then concerned about their welfare, given her and her husband's health and the children's ages and circumstances, may well be accepted. 27Ms Margaret Vagg gave no affidavit evidence about discussions with her mother before or after she saw Ms Woodward-Brown. 28Her evidence in cross examination was: "Q. Is this right, at no time did your mother ever say to you prior to her death that all she wanted, for you and your brothers and sisters to have, was a half share in the Winmalee house? A. No, she never said anything like that. She was concerned about our financial future. That is what she said. Q. Correct me if I am wrong, the substance of what she was saying to you, came to the Winmalee house, was that she would like yourself and your brothers and sisters to be financially assisted when that house was sold by your father? A. She thought it would be fair if we received the proceeds of sale of the house. Q. In your conversation with her in relation to the house, prior to your mother's death, she mentioned that she and your father, were joint tenants of the house? A. Yes, she did mention that to me yes. Q. She used the term "joint tenants"? A. Yes, she did. Q. Did you have a conversation with her about what that meant? A. Yes, I can remember clearly having a conversation with her about what that meant. Q. You told her, that what that meant was that the property was passed on survivorship, depending on which of your father and your late mother passed away first? A. Yes, I can remember telling her that 29Ms Margaret Vagg also said further in cross-examination: "Q. When you had a conversation with you are late mother and described what a joint tenancy, was, what did you actually say to your mother? A. I can remember telling her, that my understanding was that the differences between a joint tenancy and a tenancy in common was that if she was a joint tenant when she died then the whole house would go automatically to Dad whereas if she had a tenancy in common she could leave her half in the will. Q. When you said that to your mother she appeared to understand I take it? A. Yes she did. Q. She was an intelligent woman? A. Yes. Q. And although she was seriously ill, when you had that conversation with her you left no room for doubt as to what would happen to the property if she predeceased your father? A. I said that I wasn't a lawyer and I don't know enough about this kind of thing so I said:" My limited understanding is the difference between joint tenancy and tenancy in common is that" and that was all I could tell her that she would have to go get more advice. Q. When was this conversation? A. I can remember that my clearest memory was when we were going to the station. She was driving me to the train station at Springwood; was from the house in Winmalee before she went to see the lawyer because I was apologising that I couldn't go with her to the appointment because I would have liked to have done that. Q. Would that make this conversation, sometime, prior to 20 January 2005? A. Yes, it would have to be yes. Q. Are we talking days or weeks or a month or? A. I think it was shortly before she went to see the lawyer. She had the appointment that week. Q. Did you discuss with her the preparation of written instructions for her visit to the lawyer? A. No I knew she was taping away on her computer about various things including the funeral but I didn't discuss." 30Again, there is an error in the transcript. Ms Vagg's evidence was that her mother was 'tapping' away. 31Ms Julia Vagg's affidavit evidence was: "When I was driving Mum to chemo one day she said that she had written her will, and told me what she had left to me and to the others. We continued to talk about it while she was having the chemo, and she said that while she didn't really expect dad to honour it, she had put in a request that the Winmalee house be sold and the money divided amongst us to help pay for uni and a violin for me etc, because it was the only thing she could do. I said that maybe dad would honour it because it was what she wanted and that I thought he would respect her wishes; she agreed that possibly he would." 32In cross-examination she was asked about the terms of the will: "Q. Are you aware it contains a clause 11? A. I am aware that it contains a request to have Dad sell the house and divide it amongst us. Q. And you became aware that that was your mother's will when you first, that was the terms of your mother's will when you first read a copy of the will? A. She told me of a conversation in 2005 that the only thing she could do was to put a request in and that is what she has done, and I also read it after she died of course." 33In Ms Cecilia Vagg's affidavit she recounted that in December 2004, her mother told her on at least two occasions that: "I want the house to be sold. I want you all to have the money now when you need it while you are young and poor students. I don't think your Dad will do anything." 34She also recorded that she discussed the house with her mother before her death: "I said; "Can you sell the house?" My mother said: "No. A lawyer in Springwood told me when I die the house will go into Dad's name because both our names are on the title, and there is nothing I can do about it and when I die it will be transferred into your Dad's name." I said; "That sucks". 35In cross-examination, she said: "Q. In paragraph 8 you attribute some conversation to your mother in which you use the words, "I want the house to be sold." May we take it as you understood what your mother was saying she was not talking about selling the house now, but selling the house after she passed away? A. Yes, I don't think she thought there was an option to sell the house when she was alive. Q. She wanted to live there? A. All I know she wanted to sell the house. Q. After she died? A. She didn't think she could sell the house when she was alive. Q. None of these conversations were about selling the house when she was still alive? A. Well, we were in Tasmania. She said she couldn't sell the house because she was told it would go into Dad's name. Q. Going into Dad's name after she passed away, I suggest? A. Yes. Q. But what is clear is she wasn't wanting anything at all to be done to this house in terms of its title whilst she was alive? A. I am not sure about that, but I know that she thought she was not able to sell the place when she was alive. Q. There is no basis in any of the conversation that you had with your mother to suggest that she wanted to sell it while she was still alive? A. She didn't have that option, I don't think she had that option."
The 2001 advice 36Before Mrs Vagg separated from her husband in 2001, she sought Mr Dunkely's advice. She saw him only once, for an initial free consultation about her position and never thereafter acted to pursue either a divorce or a property settlement, even though she separated from her husband in circumstances which were initially acrimonious. Some years later, after she fell ill, Mr and Mrs Vagg became closer, but they did not ever live with each other again, despite never divorcing. 37What Mr Dunkley advised Mrs Vagg in 2001 can be gleaned from his evidence as to his usual practice at the time; evidence given by Mrs Vagg's daughters as to what she told them subsequently; and from Mrs Vagg's conduct. Mr Dunkley had no particular recollection of Mrs Vagg, or the advice which he gave her. 38Mr Dunkely's evidence was that his usual practice when advising a person such as Mrs Vagg in an initial free consultation about family law and property matters, was to ask questions about the client's background; the relationship and details of the assets and liabilities of the client and the spouse; in order to obtain instructions about issues relevant to the matters falling within ss 75 and 79 of the Family Law Act 1975 (Cth). 39He would then explain the process involved in a Family Court settlement application and would usually say words to the effect: "Your case can be started in either the Family Court or the Federal Magistrates Court. I would recommend the Family Court because of the court negotiation processes. If your case is filed, there is a filing fee and a conference will eventually happen where you will meet with your husband and a Court Registrar, who will attempt to negotiate a settlement. I'll be at the conference but I'm not always allowed to sit in with you and the Registrar but you can consult with me about any agreement that you reach. More than 90% of cases settle at that type of conference. The conference should be conducted within 4-5 months of filing. If your case settles at that conference, your costs would be about $3,000. Settlements often involve the selling of property, particularly if you or your husband can't afford to buy out the other person's interest. That's a lot of information to take in, do you have any questions." 40In a typical conference of 1-3 hours, Mr Dunkley would also give advice as to property held in joint tenancy. He would advise: "It is wise to go through the process of severing a joint tenancy in case you die, otherwise the survivor of you or your [spouse] gets the whole property, unless Family Law proceedings have been filed." 41He would also discuss the equity which was held by the client and spouse in jointly held property and would advise as to costs. It was his standard practice: "... in circumstances where a client instructs me that they wish to proceed with the severance of a joint tenancy is that I would collect fees from them prior to commencing work to sever the joint tenancy, particularly the fees for title searches and Registrar Generals fees and other disbursements." 42The firm's records revealed that Mrs Vagg never gave such instructions, nor did she instruct that family law proceedings should be commenced. 43In cross-examination, Mr Dunkley explained: "Q. Under the provisions of the Family Law Act, parties are unable to enter into binding agreements unless certain steps are taken by way of independent advice is that right? A. That's right. Binding financial agreements yes. Q. The other aspect of family law settlement is if there are to be transfers of property between spouses there is no stamp duty payable on such transfers is that right? A. Provided that there is a court order or a binding financial agreement then there is no stamp duty payable. That's correct but if it is a inter party agreement without any of those then stamp duty is payable. Q. Sure. It is also the case that if two parties hold properties as joint tenants and their health status is so far as everyone knows reasonable and they are about the same age, it is not commonly the case that you would even contemplate severing a joint tenancy in circumstances where a matrimonial property settlement is being contemplated being initiated? A. No I don't agree with that. You would. It depend on what the clients instructions were. If the client, given those parameters and they were all in good health and everything swimming along and the client says no I am going to start proceedings then perhaps you might not at that point of time but if the client says: "Well I'm going to think about this". Or, "I don't want to start proceedings", then you would give them the options and say that, so that is one of the options that you would give." ... "Q. Would you have done nothing if you had known that they had a joint tenancy, that they had been separated from the husband for over 12 months and that it was the wishes of the to be deceased wife that her children be provided for as well as could possibly be done in the circumstances, that you would have done nothing to bring about some application in the Family Court? A. No, that is very wrong. Q. You certainly would make an application as a careful and prudent solicitor? A. If I was instructed to make that application I would have made it with as much haste as could be brought; probably that afternoon or the next morning. Q. May we take it your clients by and large are not familiar with the provisions of s. 79 and 75 of the Family Law Act? A. Most correct. Q. And you would have to explain to them that they have this option would you not? A. In the circumstances where you are laying out to me where there is an imminent death within days. ... "Q. You are unable to say whether you gave any advice about a joint tenancy agreement being severed in 2001? A. Without certainty, my general practice." ... Q. The wife was in good health and she did not intend a property settlement, no advice would have been necessary at that time? A. No, I always include that as part of the general discussion that I have with first time discussions." 44There is no reason for rejecting Mr Dunkley's evidence that in 2001 in accordance with his usual practice he explained to Mrs Vagg the effect of holding the Winmalee property as a joint tenancy and advised Mrs Vagg about the possibility of severing the joint tenancy, or of taking family law proceedings, in order to seek to obtain ownership of the house and the risks which might flow from such an application, given the respective needs and circumstances of she and her husband. That he gave such advice was consistent with evidence given by Mrs Vagg's daughters as to what she later told them about her position after the separation. 45On the evidence it must be accepted that Mrs Vagg understood, when she went to see Ms Woodward-Brown, that her interest in the Winmalee property would pass to her husband on her death. That was revealed not only by the document which she prepared for their meeting, but also by her discussion with her daughters. That understanding reflected the advice she had been given by Mr Dunkley.
The work performed in 2005 46Before Mrs Vagg saw Ms Woodward-Brown she prepared the document which dealt with her bequests to her children in relation to identified personal items, with bills, superannuation, the funeral, burial and the Winmalee property, in the terms earlier outlined. 47There is no question that Ms Woodward-Brown prepared a will reflecting Mrs Vagg's circumstances as they stood at the time the will was executed. It clearly had regard to the written document Mrs Vagg provided and made a request of her husband, as to what he would do with the property which would come into his complete ownership on her death. It made no bequests to her husband, but dealt with the equal division of her estate, questions of guardianship and other matters it is not relevant to refer to. 48That the will reflected instructions which Mrs Vagg gave at the meeting in relation to matters Ms Woodward-Brown raised with her, is apparent from its terms and from further information provided by Mrs Vagg after the meeting. She was sent the will in draft and later returned to execute it, a week later. 49The issue lying between the parties as to the terms of the retainer arises from Ms Margaret Vagg's understanding that Mrs Vagg intended to seek advice about the joint tenancy. The defendants' file sheds little light on the terms of the retainer. There is no correspondence or any other document recording the nature of the retainer, or any advice given. Ms Woodward-Brown kept no file notes of her discussions with Mrs Vagg and provided Mrs Vagg with no written advice, either before or after the will was executed. The only contemporaneous record of Mrs Vagg's instructions was the draft will forwarded to Mrs Vagg and a few handwritten notes made by Ms Woodward Brown on a copy of Mrs Vagg's document. The word 'request' was there written next to the instruction given in relation to the Winmalee property. 50The question of the retainer was explored prior to the hearing. Interrogatories were administered by the plaintiff. The relevant questions and answers sought and provided were: "Question c) In respect of each meeting what was the substance of the oral instructions received from the deceased? d) in respect of each meeting what was the substance of the advice given by, or on behalf of, the defendants to the deceased at each meeting? Answer c) 20 January 2005 - oral instructions received to prepare her will in accordance with her written note and any written notes 27 January 2005 - will signed and witnessed (as it appear that no amendments made to the will on that day when Mrs Vagg would not have given ay further oral instructions). d) 20 January 2005 - from written notes - Ms Woodward-Brown asked her re executor, superannuation and testamentary guardians. She asked details of her children, names and ages and she recorded her husband's name and address and that it was a request re the Winmalee property. (This is all from her notes; she obviously would have spoken to her about other things and would have gone through her prepared list with her. Ms Woodward-Brown does not recall anything else that she said in particular to Mrs Vagg. Her normal practice would be to go through the will instructions but Ms Woodward-Brown has no specific recollection of what she said to Mrs Vagg.) 27 January 2005 - Anne Woodward-Brown's normal practice would be to read through the will, summarise the paragraphs and explain, answer questions and ask if it is what they want/prepared in accordance with their instructions." 51In cross-examination, Ms Woodward-Brown agreed that she had been involved in the preparation of the answers to the interrogatories. From her evidence and the answers given, it is apparent that inadequate attention was paid to that task. Contrary to the advice that Ms Woodward-Brown had no specific recollection of the discussions, in her affidavit, she deposed as to her first meeting with Mrs Vagg: "I continued my review of annexure "A" with Mrs Vagg, and in particular the paragraph on the first page of Mrs Vagg's written instructions, being the words "I request that the house at Winmalee be sold and the money received be given to the children for their education as a priority - equal shares", my conversation with Mrs Vagg proceeded with words to the following effect: I said " "Who owns the house at Winmalee?" Mrs Vagg said " I own it as joint tenant with my husband Carl." I said "If you own the property as joint tenants with you husband, it will go to him by survivorship on your death, but if he goes first it will go to you. You will need to sever that joint tenancy if you wished your share to be given to your children. You also need to see one of our family law solicitors to get family law advice about your property. Mrs Vagg said "I have seen David Dunkley about a property settlement some time ago. This is just a request so that the children can pay off their HECS debt and that sort of thing." I said "Alright. What is the address of the property? Mrs(sic) said "XX XXXXXXX XXXXX Road, Winmalee." As Mrs Vagg spoke, I believe I wrote the words "request" - XX XXXXXXX XXXXX Road, Winmalee" where the they appear on the first page of annexure "B". I then said " What is your husband's full name and address? " Mrs Vagg said "Carl Stanley Vagg, XX XX XXXXXXX XXXXXXXX, Faulconbridge". I wrote those words down on annexure "B" as she spoke." 52Ms Woodward-Brown also there recollected that: "On 27 January 2005 Mrs Vagg attended my office. On that occasion, I read through the will; I asked Mrs Vagg " Is this prepared in accordance with your instructions? You understand it?" to which she replied " Yes, that is fine ."; and I witnessed the signature of Mrs Vagg on the will together with Ms Scott." 53In response to Ms Cecelia Vagg's affidavit evidence as to the conversation she had with her mother before her death, Ms Woodward-Brown's affidavit evidence was: "I have read paragraph 11 of the affidavit of Celia(sic) Anne Francis Vagg sworn on 17 May 2010 in which a conversation is recited. I did not at any time say any words to Mrs Vagg to the effect that there was nothing she could do about the property at XX XXXXXXX XXXXX Road, Winmalee going to her husband Carl Vagg on her death." 54In cross-examination, Ms Woodward-Brown denied that she had been instructed to advise Mrs Vagg as to how the joint tenancy could be severed, or to take such steps. She also denied giving Mrs Vagg advice that there was nothing that she could do about the property at Winmalee going to her husband on her death. She insisted that she had given advice about severance and family law advice, in terms she had deposed to in her affidavit. This evidence was challenged, on the basis of accuracy of the recollection to which Ms Woodward-Brown deposed in her affidavit, which was submitted to have been but a reconstruction, given the answers earlier provided to the interrogatories. 55In cross-examination, Ms Woodward-Brown said: "Q. You see, she was concerned, was she not, that if she decided the property would go to her husband and not to her children or her interest in that property? A. I told her her interest would go to her husband if she decided. Q. And your duty was to protect her interest if you could to ensure that didn't happen? A. If she instructed me to do so, I would have done. Q. Would you have to tell her there was a simple A. I could have told her she could have severed the joint tenancy. Q. You see, that is just a reconstruction on your part, is it not? A. No. Q. Only when you were asked to swear an affidavit for these proceedings did you give for the first time an explanation that you had, in fact, given that advice? A. I don't think so, I have been thinking about it for a long time and the last thing I did, my affidavit, I recall having a conversation with her about all these things." 56Ms Woodward-Brown insisted that her recollection in her affidavit was accurate. Having considered this evidence, I am not able to accept that Ms Woodward-Brown was being untruthful in her evidence. Clearly the answers given to interrogatories shows inadequate attention was paid to the matter at that time. That the evidence to which Ms Woodward-Brown swore in cross-examination, was a mere reconstruction, may not be accepted. Were that the case, one might have expected a suggestion that more complete advice on the matter which had been identified as requiring advice, would have been forthcoming.
Mr Vagg's position 57Mr Vagg was not called to give evidence. It appears that one of the results of his injury was an impact on his personality, which led to his estrangement from his wife and at times, his children. Despite this, it is apparent that Mrs Vagg had no desire to divorce her husband and that even now, the children maintain a relationship with their father, although as between them from time to time, it has been strained. 58Mrs Vagg sought no property settlement in 2001 or afterwards. She made an informal arrangement with her husband as to where they would each reside and where their children would live. It was apparently her stated desire not to hurt her husband further by bringing any legal proceedings, coupled with a concern that the result of such an application would not be favourable to her, which stopped her pursuing a property settlement . She took that course, having been advised about their respective positions by Mr Dunkley. On her daughters' evidence, she was also concerned that the result of such an application might be that she would have no place to live. 59Mrs Vagg's repeatedly stated wish to her children was that after her death, her husband sell the Winmalee property, in order that all of the proceeds could be used to assist her children with their financial needs, but she had a concern that he would not agree. She plainly understood that her will could not require him to agree. When Mr Vagg was later approached by Ms Margaret Vagg, with the request made in her mother's will, Mr Vagg considered his wife's wishes, but decided that after taking advice, it was a wish he could not accede to, given the impact it would have on his personal circumstances. 60Mr Vagg has sworn an affidavit in the proceedings but it was not tendered and he was not called. Clearly, in those circumstances, it must be concluded that his evidence would not have assisted the plaintiffs' case.
The expert evidence 61The experts, Ms Susan Pearson and Mr Kevin Emanuel, each provided a report, as well as a joint report. Some additional explanation was led from each of them, in relation to certain views which they had expressed in their reports, where proper explanation of the foundation for such views was not given. They then gave concurrent evidence, in which their disagreements were extensively explored. 62What was agreed was identified in the joint report to be: "5.1. A testator can express a wish in his or her Will which the executor may follow, but which does not bind a third party or affect the legal rights of that third party. 5.2. To confirm the Will of the Deceased her "request that he house at Winmalee be sold and the money received be given to the children for their education as a priority - equal shares", has no legal effect to bring about the sale of the property or distribution of the proceeds of sale. It did not have the effect of preventing Carl Vagg from becoming the sole registered proprietor of the Winmalee property. When a client wishes to make a Will which purports to dispose of an interest held as joint tenant, the ordinary practice is for the solicitor to advise the client that such an interest passes on survivorship with the result that the client's share cannot be disposed of by a Will unless the joint tenancy is first severed. The solicitor would satisfy themselves in the course of taking instructions that the client understood that steps could be taken to affect a severance of the joint tenancy, if that is what the client wished, and if the client was prepared to incur the costs of doing so. The solicitor would not take any steps in that regard without specific instructions from the client to do so. 5.3. If a solicitor is retained by a client, in this case the Deceased, to take steps to sever a joint tenancy in which she had an interest, the solicitor has a duty to the client to take all of the steps that were reasonably necessary to discharge that retainer and to exercise reasonable skill, care and diligence in and about carrying out that task. 5.4. Severance of a joint tenancy is a conveyancing task. 5.5. In January 2005, what was required to sever a joint tenancy was for one of the joint tenants to prepare and file a Transfer of his or her interest in the property to himself or herself as tenant in common. This required a title search, preparation for the Transfer verified by a statutory declaration signed by the transferor in the presence of a qualified witness, conference with the client, payment of a registration fee. 5.6. If a dispute emerged in relation to the severance the joint tenancy, litigation may occur. 5.7. An application under Section 66G of the Conveyancing Act could not have been completed in the Supreme Court between the date of the conference between the Deceased and the Solicitor on 20 January 2005 and the date of the Deceased's death, unless Carl Vagg consented to the application." 63Other agreements emerged between them during the course of the evidence, in relation to, for example:
The Plaintiffs' case 66The plaintiffs' case was that Ms Woodward-Brown's evidence as to the advice which she gave would not be accepted. Even if it was, the advice given was inadequate, even on the evidence given by Mr Dunkley. The consequence was that the defendants had failed in their duty to advise Mrs Vagg of the steps which could be taken to sever the joint tenancy, given her intention to maximise the size of her estate and to protect her children from financial adversity. The duty was to take reasonable care to effectuate Mrs Vagg's wishes. In the circumstances, proper, clear and appropriate advice had to be given about the property. 67Mrs Vagg's written document was couched in the form of a request. It was not a direction of a testamentary nature and was incapable of fulfilment, a matter about which Ms Woodward-Brown had to advise Mrs Vagg. Mrs Vagg was working as a school teacher and had assets which she wished to dispose of on her death. She was an intelligent, rational woman and it would be concluded that if the necessary advice had been given, there was absolutely no reason why she would not have taken it. 68Her advice to her children that there was nothing that could be done, left open only two possibilities, namely that she was given wrong advice, or that the advice given was in such a form that it was misunderstood. It was not likely that she was not being honest with her children. She was concerned to make an effective gift to them. If it was not possible to give the entire property to her children, what could be provided to them had to be explained to her. 69In the circumstances of his wife's imminent death, where Mr Vagg had a home he could continue living in, a family law application could have been urgently made and pursued, if necessary, by the estate. A transfer of the other half of the estate could thereby have been achieved, in addition to the half the children would have received by severance of the joint tenancy. Ms Woodward-Brown advised Mrs Vagg about none of the available options, which included the simple step of severing the joint tenancy. Mrs Vagg had not made a simple request for a will to be made, even if that was how Ms Woodward-Brown had interpreted her instructions. 70The claim did not seek to impose a duty upon a solicitor to take positive steps to advance the pecuniary interests of a beneficiary under a will, by seeking instructions to alter the client's property rights, or to commence litigation. It was accepted that the solicitor would need to obtain instructions after proper advice was given. Nevertheless, the evidence clearly established that if the advice had been received, the instructions would have been forthcoming. 71Mrs Vagg was desperate to do something for her children and had no rational reason not to do so. It was clear that she did not have complete faith in her husband and thought there was a good chance that he would not fulfil her request. In those circumstances, it would not be accepted that she would not have pursued any available step, out of kindness or solicitude for him. 72Mr Vagg's interests were contrary to his children's interests. He took benefits by virtue of her death, but not under her will. Neither pursuit of severance or family law proceedings depended on his consent. It followed that no Jones v Dunkel inferences could be drawn from the failure to call him, not even on the question of damages. 73The suggestion that there had been a failure to mitigate any damage by bringing family law proceedings was submitted to be fanciful, given the need then for Ms Margaret Vagg to resign as executrix; the need to obtain leave to bring proceedings out of time; the need to join Mr Vagg to the proceedings as an eligible person; and the very differing positions and circumstances of the plaintiffs which would have to be considered in such proceedings. Given the value of the property, the benefits of such proceedings would be illusory.
Did the defendants depart from the standard professional practice of a competent solicitor in 2005 in relation to the preparation of Mrs Vagg's will? 74It is unnecessary to come to a concluded view as to whether the defendants' retainer included not only the preparation of Mrs Vagg's will, but also giving advice about steps which could be taken in relation to the joint interest in the Winmalee property. That is because, taking the evidence at its highest in their favour, the evidence established that the defendants did not adhere to what standard professional practice of a competent solicitor retained to prepare a will for a person in Mrs Vagg's known circumstances required. If the defendants had also been retained to advise about the steps which she could have taken to sever the joint tenancy, the evidence also established that they did not adhere to what standard professional practice of a competent solicitor retained to give such advice to a person in Mrs Vagg's known circumstances required. 75That Mrs Vagg did not give broader instructions than the preparation of the will is supported not only by Ms Woodward-Brown's evidence, but also by the charge which the defendants made for the service provided. Had there been a broader retainer, as was claimed, it seems on the expert evidence that the necessary advice could not have been given within a 20 minute meeting of the kind which took place when Mrs Vagg instructed Ms Woodward-Brown. Such advice would certainly have cost more than the relatively small charge made for the preparation of this will. 76Even so, that the scope of the retainer was not to simply prepare a will in terms consistent with the written document Mrs Vagg provided at the initial conference, is apparent. That is certainly how Ms Woodward-Brown dealt with the matter. There is no issue that she identified a number of matters which required Mrs Vagg's consideration and other information which had to be obtained. Those matters were dealt with at the conference and later when the will was prepared, in accordance with her instructions. On her evidence Ms Woodward-Brown also identified the need to give Mrs Vagg some advice about the joint tenancy and the need to obtain family law advice. Even accepting her evidence, that cannot lead to the conclusion that standard professional practice of a competent solicitor was adhered to. 77The experts agreed that standard professional practice of a competent solicitor required that a file note should be kept of the instructions received from Mrs Vagg and of the advice which she was given, even in the case of preparation of a simple will. There is no question that this did not occur. There was no adequate record kept of either instructions received, or advice given. 78Ms Woodward-Brown's handwritten, one word note, 'request' on the document she received from Mrs Vagg adjacent to the request made in relation to the property, certainly contained one of Mrs Vagg's instructions. Ms Woodward-Brown made some other notes as to other instructions received about the terms of the will, but on her own evidence they were not a complete record of her instructions. There was no record kept of any advice given. 79Even if it be accepted that the draft will was the means by which the other instructions received from Mrs Vagg were recorded and then provided to Mrs Vagg for her consideration, that was not a means by which any record of the other matters discussed at the conference was kept, or the advice given about any of the matters discussed, was recorded. 80Importantly, there was no record kept of any advice sought by Mrs Vagg in relation to the joint tenancy in the Winmalee property, or of any advice given in relation to the steps available to be taken to deal with the property, other than by way of the request later contained in the will, consistent with the word 'request'. On Ms Woodward-Brown's evidence she did give Mrs Vagg advice about the nature of the joint tenancy and how it could be severed. In those circumstances, competent professional practice clearly required that the advice given be recorded. In Mrs Vagg's circumstances, having a will prepared at a time of very serious illness, in my view, competent professional practice required not only that a note of the advice given to the client to be kept on file, but also that written confirmation of that advice, even if short, be given. 81On Ms Woodward-Brown's evidence, the first conference took only some 20 minutes. The joint tenancy was a topic then discussed and advice was given about it. Even accepting Ms Woodward-Brown's evidence as to the advice which she gave, it is apparent that it was advice of the most cursory kind. The possibility of severance was referred to, as was the need to obtain family law advice. On her evidence, that reflected Ms Woodward-Brown's appreciation that Mrs Vagg was separated from her husband; she had children who depended on her for support; she intended that her estate would go to them on her death; and that her interest in the Winmalee property would not form part of that estate because of the joint tenancy, but there were steps available to be taken by Mrs Vagg to achieve that outcome, if she wished to pursue them. That Mrs Vagg might have wished do so was evident from the terms of the request she had written about, in her document. That was, no doubt, why Ms Woodward-Brown discussed the matter with her, advising that steps could be taken to sever the tenancy. 82On her own account of that discussion, Ms Woodward-Brown raised the possibility of severance, but made no mention of what its consequences for the estate might be; what it would involve, if pursued; what it might cost; how long it might take; what Mr Vagg's rights in relation to such a step if taken, might be; or whether he would seek to exercise them; and the possible consequences, if he did. She sought no instructions as to Mrs Vagg's wishes. On the expert evidence, these were all matters which could have been shortly addressed. 83It seems to me that in circumstances where a solicitor is retained to draft a will, where instructions such as those Mrs Vagg gave are received, with the result that the solicitor regards it to be necessary to give the client some advice about the possibility of severance, the advice which is given need not be complex; but it must touch on matters such as this, if the client is to be given a proper opportunity to make a decision as to the disposition of the property in a will. 84So far as the reference which Ms Woodward-Brown made to the need for family law advice is concerned, having identified that as something which Mrs Vagg might need to consider, given her circumstances, and thus having raised it with her, to be told that she had already received such advice, standard professional practice of a competent solicitor in my view, would require, at least that an enquiry be made of Mrs Vagg as to when that advice had been received and whether Mrs Vagg's circumstances had changed since then. Those instructions could easily have been elicited, even in a short conference of the kind here undertaken, either from Mrs Vagg, or if she could not recall, by a check of the file. 85That would have enabled Mrs Vagg to be properly advised as to the importance of revisiting the family law advice received some years previously, in the context of preparation of a will in the face of imminent death, at a time when there was an ongoing need to care for her children, one at least still a minor. Simply raising the need for family law advice and making no enquiry at all in relation to matters such as this, when told that family law advice had already been obtained, was, in my view, not in accordance with standard professional practice of a competent solicitor. 86In Miller v Cooney [2004] NSWCA 380, it was observed: "33 On the matter of principle the trial Judge said: "88 To suggest that it is a sufficient discharge of a solicitor's duty to a testator in circumstances such as these to simply inquire of him what he wishes and then to record and thereafter prepare the will without anything further is to relegate a solicitor and his obligations comparable to that of a parts counterman or order taker. The public is entitled to expect more from the legal profession." In the present case, there are no such comparable circumstances." 87This approach is consistent with the question of what a solicitors 'penumbral duty' may require in a particular case. In Dominic v Riz [2009] NSWCA 216, it was observed: "90 In David v David at [76], I said the following (with which Hodgson JA and Handley AJA agreed): "Some reliance was placed on Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 in argument. In Kowalczuk v Accom Finance Pty Limited [2008] NSWCA 343 at [267]-[294] Campbell JA undertook a detailed analysis of the precedential status of Waimond in particular after Heydon v NRMA Ltd [2000] NSWCA 374; 51 NSWLR 1 and Astley v Austrust Ltd [1999] HCA 6; 197 CLR 1. It is unnecessary to repeat that analysis. It is sufficient to say that the notion that a solicitor may owe a client a 'penumbral' duty that extends beyond scope of the retainer is doubtful. If, however, the solicitor during the execution of his or her retainer learns of facts which put him or her on notice that the client's interests are endangered or at risk unless further steps beyond the limits of the retainer are carried out, depending on the circumstances, the solicitor may be obliged to speak in order to bring to the attention of the client the aspect of concern and to advise of the need for further advice either from the solicitor or from a third party." 91 Neither party submitted that this expression of the matter either involved error or was inappropriate for application here. The passage in David at [76] was not meant, however, to be an operative legal principle. It was intended to do no more than posit the possibility that the performance of the retainer, and what is learnt during it, may affect how the retainer is properly discharged." 88In this case, Mrs Vagg's written instructions were not merely noted and a will prepared in those terms, without anything further. To the contrary, Ms Woodward-Brown's evidence reveals that facts came to her attention during her conference with Mrs Vagg, which caused her to advise Mrs Vagg about the possibility of severing the joint tenancy and the need for family law advice to be pursued. 89Having identified Mrs Vagg's circumstances as requiring such advice to be given about those matters, even if the retainer was only to prepare a will, on her own account the advice given was inadequate. As discussed in Riz at [94] - [96], it is the adequacy of advice given, when it is recognised that there is a need to advise, which has to be assessed in such a case. 90The question of what the result of that conclusion is, was also in issue between the parties, in the particular circumstances of this case. Was a breach of the duty owed to Mrs Vagg, in the circumstances such as to give rise to the duty which the children claimed were owed to each of them?
What duty is owed to a beneficiary? 91It was common ground that a solicitor may owe a duty of care to the beneficiaries of an estate. The experts agreed that there was no deficiency in the will, as drafted. It gave effect to Mrs Vagg's desire to leave her residual estate to her children. Given that the Winmalee property was held as a joint tenancy, clause 11 of the will was also an adequate and conventional way of conveying Mrs Vagg's request to her husband, as to what should be done with it, after her death. 92What they joined issue over was the adequacy of the advice given to Mrs Vagg about the severance of the joint tenancy, or the pursuit of family law proceedings and what steps were available to be taken, in the circumstances. They agreed that a solicitor could only act on instructions received, but disagreed as to the adequacy of the advice given and the steps taken, which might have resulted in instructions being given by Mrs Vagg to sever the joint tenancy. 93The defendants accepted that a solicitor preparing a will for a client upon the client's instructions to include a testamentary disposition in favour of a beneficiary, is under a duty to take reasonable care to give effect to the client's intentions, but argued that the broader duty claimed by the children was one which did not exist. 94In Miller v Cooney, the scope of the duty owed to a beneficiary was discussed: 22 Hill v Van Erp (1997) 188 CLR 159 is authority for the proposition that a solicitor preparing a will for a client upon the client's instructions to include a testamentary disposition in favour of particular beneficiaries is under a duty to take reasonable care to effectuate the client's intentions. In that case, a solicitor prepared a will for a client upon the client's instructions that it was to include a testamentary disposition to a friend of the client. When the will was being executed, the solicitor asked the husband of the intended beneficiary to attest it. The solicitor knew of the relationship between the intended beneficiary and the attesting witness. The attestation attracted s15(1) of the Succession Act 1981 (Queensland) with the effect that the disposition was null and void. After the death of the client the intended beneficiary sued the solicitor for damages in negligence. By a majority, the High Court held that the solicitor was in breach of a duty of care owed to the intended beneficiary and hence was liable in damages for the value of the intended disposition. Members of the majority of the Court, in separate judgments, held that a solicitor so retained has a duty to use reasonable care to carry the client's instructions into effect and that that duty is owed to the intended beneficiary who suffers loss as a result of the breach of the solicitor's duty; see 167, 170, 181, 183, 185 and 198. At 170 Brennan J said: "By accepting the testator's retainer, the solicitor enters upon the task of effecting compliance with the formalities necessary to transfer property from a testator on death to an intended beneficiary; it is foreseeable that, if reasonable care is not exercised in performing the task, the intended beneficiary will not take the property; the solicitor fails to exercise reasonable care whereby the formalities are not complied with; and the intended beneficiary thereby loses the property." 23 At 183 Dawson J referred to the client's reliance upon the solicitor to carry out those functions to effectuate the client's testamentary intentions. At 185 his Honour said that what was important was the position of a solicitor as a professional person of specialised skill and knowledge. That was significant with respect to the drawing up and execution of a will because the failure to exercise due care might affect not only the interests of the client but also the interests of others whom the client had in mind as beneficiaries. At 198 Gaudron J referred to the solicitor's control over the testamentary wishes of the client and control over whether the intended beneficiary would have the right which the testatrix clearly intended her to have, namely the right to have her estate properly administered in accordance with the terms of her will." 95In that case the claim by the intended beneficiaries depended upon their showing that the solicitor was under a duty to make inquiry about the ownership of the two properties in question, in circumstances where the solicitor was not aware and had no reason to believe that the testator was not the registered proprietor of the properties. 96Here, there is no question that the solicitor and Mrs Vagg both properly understood the nature of Mrs Vagg's interest in the property and the consequences of her death, so far as her intended beneficiaries were concerned. The advice given was inadequate, however the issue is whether that is enough to establish circumstances in which the defendants owed the children a duty. 97The children's claim depends on them showing not only that the solicitor was under a duty to give Mrs Vagg advice about steps available to be taken, so that her interest in the Winmalee property formed a part of her residual estate on her death, but also that:
Did the defendants' owe the duty claimed? 99The defendants' case was that a conclusion, in the circumstances, that they owed the children the claimed duty involves a considerable expansion of the duty owed by a solicitor to a beneficiary under a will. That submission, it seems to me, is one which must be accepted. The nature of a solicitor's duty to a beneficiary is as discussed in Miller v Cooney . It is essentially that:
Would Mrs Vagg have given the necessary instructions if properly advised? 108If I be wrong in that conclusion, it is also necessary to consider evidence which suggests that had the necessary advice been given, that the steps available to be taken in relation to the joint tenancy would not have been pursued by Mrs Vagg. 109On Ms Margaret Vagg's evidence, her mother never spoke of a desire that her children receive a 50% interest in the property, she always spoke of a belief that it would be fair if they were given the whole of the proceeds of the sale of the property, after her death, but she had a concern that this was not something to which Mr Vagg would agree. The children's case is that this was only because she was not properly advised that she could sever the tenancy. 110When they spoke about the matter of joint tenancy before Mrs Vagg went to see Ms Woodward-Brown, Ms Margaret Vagg told her mother of her understanding of what happened to such a tenancy on death. That understanding was correct. Even if Ms Woodward-Brown had not advised about the possibility of severance, Mrs Vagg had earlier received advice from Mr Dunkley. She had never wanted to act upon it, or to pursue family law proceedings. It is difficult to see that she would have been prepared to take such steps in 2005, in the face of her imminent death. 111There is no evidence that her desire that the property be sold and her concern about her husband's attitude, was a matter which Mrs Vagg herself raised with her husband. Had such evidence been available, no doubt it would have been called from Mr Vagg. On the evidence, it is a matter which Mrs Vagg could have raised with him had she wished, given the nature of their relationship at the time. 112Mrs Vagg never wished to act on the advice she was given in 2001. She told her children this was because of two concerns. One for her husband and the other for herself. In 2005, she made a will leaving her husband nothing, understanding that he would receive the Winmalee property, which she wanted him to sell for the benefit of their children. Mrs Vagg told her children that she believed that there was nothing else which she could do to deal with the joint tenancy. That is not an accurate reflection of Mr Dunkley's advice. There is no reason to believe that Mrs Vagg did not understand the advice which he gave her. She was unquestionably an intelligent woman. Even if Ms Woodward-Brown's evidence, that she also told Mrs Vagg that the joint tenancy could be severed was not accepted, or it was concluded that it was quite inadequate, it was advice which she had earlier received. 113If her children understood Mrs Vagg correctly, she believed there was nothing she could do about the joint tenancy. Either she had forgotten Mr Dunkley's advice, or she was not being entirely forthcoming with them, or the notion that there was nothing that she could do in relation to the joint tenancy, reflected a continuing personal view, given her understanding of the legal position. 114The latter possibility certainly accords with her daughter's evidence of the nature of the continuing relationship between Mr and Mrs Vagg, despite their separation. Even at a time when they were estranged, Mrs Vagg did not want to divorce her husband, or hurt him further, by pursuing any legal proceedings. With her ill health, they became closer. That evidence suggests the possibility that Mrs Vagg had the view that despite the legal avenues available to her, in relation to the Winmalee property, they were not ones she could pursue, given her ongoing attitude to her husband and a continuing desire not to become involved in any further dispute, let alone any legal proceedings with him. In 2001, she believed that the result may have been a need to sell all of the properties, to her personal detriment. Perhaps even when her death was imminent, such considerations were still weighing upon her. 115That is certainly consistent with her out of hand dismissal of a suggestion made by Ms Woodward-Brown that she should take further family law advice and not pursuing the possibility of severance. It is also consistent with her not raising with her husband the possibility of the sale of the property for the benefit of their children after her death, even though she was concerned that he would not comply with her wishes about the property, at a time that she believed her death was imminent. 116Her estate comprised personal items, about $64,000 superannuation and some $2,000 in a bank account. Her interest in the property was worth considerably more. On the evidence Mrs Vagg understood the effect of the provisions made in the will in respect of the property, namely, that it was of no legal effect and would not have the result she desired, unless her husband agreed. She executed the will knowing this. In all of the circumstances, that Mrs Vagg would have pursued any of the legal avenues available to her to ensure that the Winmalee property formed a part of her residential estate, if she had been given more detailed advice as to what they would involve and its cost, seems doubtful. 117Also to be considered is that, in respect of any of the possible avenues available, whether family law proceedings, severance or an application under s 66G of the Conveyancing Act 1919, Mr Vagg had interests which he could have pursued, if he wished. The eventual result, if such steps had been taken, might in the circumstances not have been that the estate would have achieved a 50% interest in the property. The expense of the conduct of such litigation would also have reduced, at least to some extent, the size of the estate. These are all matters which Mrs Vagg would have had to consider, in deciding whether to pursue an interest in the property in order that it form part of her estate. 118That Mrs Vagg would have been determined to pursue such a course, which would have not only required her to involve her husband in legal proceedings in her dying days, but might have left her children, particularly her daughter Margaret, the executrix of the estate, facing the need to pursue litigation with their father after her death, litigation which Mrs Vagg had never to that point wished to involve him in, seems to me unlikely on the evidence. 119Also to be considered is that there were no instructions ever given to the defendants after the advice which Mr Dunkley gave in 2001, to take any of the potentially available steps, not even to pursue the course which it was agreed was the quickest and potentially cheapest available, namely the severance of the joint tenancy. The experts agreed that this was a simple routine conveyancing task in itself, but one which could, nevertheless, have resulted in litigation, given Mr Vagg's interest in the property and his personal circumstances, which he could have pursued. It was not in issue that the presumption that a husband and wife holding a property in joint shares are entitled to a 50% share each, is a rebuttable presumption. On the expert evidence the costs of such litigation could be up to $50,000, a considerable risk in the circumstances confronting Mrs Vagg and having in mind the value of the property. 120Executing the will did not preclude Mrs Vagg from pursuing any such steps. Indeed, its execution was critical, even if they were pursued, because without the will, Mrs Vagg could have died intestate, with the result that her children would have been worse off. Mrs Vagg altered that situation in her children's favour by the will which she made. She gave no instructions that any further steps should be pursued. In telling her children only that nothing could be done, about severing the joint tenancy, she did not explain why and they did not enquire. 121In the circumstances, it seems to me that it must be concluded not only that the claimed duty did not exist, but that if it did, the children have not established that their mother would have taken the steps necessary to ensure that her residual estate was increased by an interest in 50% of the Winmalee property being achieved.
Damages 122In the event that I am incorrect in this conclusion, I should deal shortly with the question of damages. 123The order sought is $145,000 plus interest. 124The defendants' case was that there was no evidence that instructions to sever the joint tenancy had been given, or would have been given, if the claimed advice had been forthcoming. The result was that the claim failed for want of a causal link ( see Citicorp Australia Ltd v O'Brien (1996) 40 NSWLR 398 at 418). 125It could not be assumed that if instructions were given to either sever the joint tenancy or to pursue family law proceedings, that the result would have been an increase in the value of the Estate by $140,000. Mr Vagg had made a substantial contribution to the purchase of the property. He was a person of substantial disability, who upon his wife's death would have had substantially greater needs than hers, given that she was no longer alive. 126As discussed In Hendriks v McGeoch [2008] NSWCA 53 at [82] - [91] it is necessary to conclude that if the required advice had been given, that Mrs Vagg would have taken the necessary steps, before an order for damages can follow. This must be assessed on the balance of probabilities. Doing my best this can only be assessed as a low probability, something in the order of 20%, for all of the reasons I have already discussed. 127As to the possibility that the children might receive something from their father in future, that, it seems cannot be ignored, in the face of the evidence of their ongoing relationship, including the assistance given him with the sale of the three properties and the purchase of a new home in Coogee. While there have been estrangements from time to time, that is a reflection of the impact of his injuries. It does not seem to be from any other breakdown in the family relationship. The absence of evidence being called from Mr Vagg must also be considered. The Jones v Dunkel inference must be drawn. In the result, it must be considered that his evidence would not have assisted the plaintiffs. 128Accordingly, I assess the probability that they will in due course, receive the property which their father purchased with a part of the proceeds of the Winmalee property, at 80%. That this might not eventuate for some years, must also be accepted. 129In all of those circumstances, it is difficult to see, however, that anything other than relatively nominal damages would flow to the plaintiffs. Apportionable claim under the Civil Liability Act 2002? 130Section 35 of the Civil Liability Act 2005 provides: " 35 Proportionate liability for apportionable claims (1) In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss, and (b) the court may give judgment against the defendant for not more than that amount. (2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim: (a) liability for the apportionable claim is to be determined in accordance with the provisions of this Part, and (b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant. (3) In apportioning responsibility between defendants in the proceedings: (a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law, and (b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings. (4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings." 131The concept of an apportionable claim is dealt with in s 34: "34 Application of Part (1) This Part applies to the following claims (apportionable claims): (a) a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury, (b) a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 1987 for a contravention of section 42 of that Act (as in force before its repeal by the Fair Trading Amendment (Australian Consumer Law) Act 2010) or under the Australian Consumer Law (NSW) for a contravention of section 18 of that Law. (1A) For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind). (2) In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. (3) For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1). (3A) This Part does not apply to a claim in an action for damages arising from a breach of statutory warranty under Part 2C of the Home Building Act 1989 and brought by a person having the benefit of the statutory warranty. (4) For the purposes of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died. (5) (Repealed)" 132The notion that the plaintiffs' are 'wrongdoers' because they did not pursue an available application under the Family Provisions Act , is not very palatable, but the question must be considered in the face of the statutory framework. 133Clearly, these are proceedings involving an 'apportionable claim', being proceedings involving a claim for damages in tort arising from an alleged failure to take reasonable care (s 34(1)(a)). In such proceedings a 'concurrent wrongdoer' in relation to the claim is 'one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim'. In so far as the damage which the plaintiffs have suffered is the result of their failure to pursue an available application under the Family Provisions Act , that brings the plaintiffs within the term 'concurrent wrongdoer', subject to one further consideration. 134That is the provision made in s 34(3) that 'apportionable claims are limited to those claims specified in subsection (1).' Subsection (1) is limited to claims for:
Orders 138For the reasons given, the proceedings must be dismissed. The usual order as to costs would be that they follow the event. If necessary I will hear the parties on costs.
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: 19 December 2011
Vagg
McPhee
(1996) 40 NSWLR 398
(1959) 101 CLR 298
(1989) 18 NSWLR 642
(1997) 188 CLR 159