Duties of Competence & Care

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This article is a topic within the subject Law, Lawyers and Society.

Required Reading

Y. Ross & P. MacFarlane, Lawyers’ Responsibility and Accountability: Cases, Problems and Commentary, Fourth Edition (Butterworth’s, 2012), pp. .

  • [1] Contract is a private relationship between parties in contractual terms; tort extends to public policy of reasonable foreseeability
  • [2] Duties assessed on expectation basis in contract and on reliance basis in tort
  • [3] Astley v Austrust Ltd (1999): Solicitors failed to advise a client on their liability in dealings with third parties. While the client was guilty of contributory negligence, the client could recover damages in contract and tort from the solicitors

Hill (t/a R F Hill and Associates) v Van Erp (1997)

Facts:
  • Hill was tasked with preparing her client’s will. The client died five months after signing
  • The client’s husband witnessed the client signing and made it void to Hill’s knowledge
  • Van Erp lost her bequest under this and sued Hill for negligence
Issues:
  • Brennan J: I follow White v Jones (1995) – a solicitor’s duty of care is only to their client, with whom they have a contractual relationship. No remedy is available in tort to a beneficiary, but only in contract
  • Yet there would be a blank gap in the law if there was no duty to the beneficiary in law
  • The very purpose of a testator’s retaining of a solicitor is to ensure that the testator’s instruction to make a testamentary gift to a beneficiary results in the beneficiary’s taking that gift on the death of the testator. That should impose a duty of care in tort
  • When an intended beneficiary suffers such a loss as the result of the negligence … (does) the loss … found an action for damages?
  • Consider Hedley Byrne – damages as a result of reliance on a statement – no existing right or interest was lost but the court still rules a duty of care
  • Need for reasonable foreseeability
  • Dawson J: One needs to prove more than mere reasonable foreseeability to prove a duty of care. That would destroy economic competition as we know it
  • Consider Caltex Oil – one had to prove awareness of a likelihood of damage and say it
  • Proximity in relationship is needed
  • Is this just a legitimate standard or economic win-lose situations? No.
  • Gaudron J: Recognising failure to exercise duty of care is law of common law countries
Result: Hill lost

Hilton v Noss (1995)

Facts:
  • Hilton and his wife purchased a hotel under the name of their company, Hanover
  • Carver conducted negotiations and retained Noss to act on Hanover’s behalf
  • Noss received a cheque that was given by Hilton to Carver for stamp duty to be settled by 6 July 1988
  • Carver told Noss to rescind the contract for purchase on 25 July 1988 and Hanover was dissolved in December 1992
Issues:
  • Did Carver and Noss have a duty of care to take care of the cheque?
  • The cheque was by Hanover but the lawsuit was by Hilton
  • Noss knew of the Hiltons’ reliance on him
  • Is there a relationship of proximity?
  • Negligence not by statement but by act
Result: Hilton won

Extract from Hawkins v Clayton &ors

  • [4] Limitations of actions: Six years for tort cases
  • Testatrix died in January 1975 but her house was allowed to fall into disrepair, at least until March 1981 when action was brought forward
  • Solicitors did not notify executor until March 1981 after which limitation had expired
  • Deane J: No established obligations in case
  • Asking whether a term implying an obligation cannot be answered by its necessity, however establishing a duty is relevant. Thus the common law must be consulted
  • [5] It is now commonly accepted that duty of solicitors is owed beyond mere contractual terms and goes into duty of care of tort
  • [6] … the reasonable foreseeability of such injury or damage is, of itself, commonly an adequate indication that the relationship between the parties possesses the requisite element of proximity (Shirt test; Jaensch v Coffey)
  • Proximity is often necessary to prove in pure economic loss cases based on misleading information
  • [7] The thing or subject which renders a relationship proximal need not yet exist. Consider an architect and his/her client: the building does not exist yet, but the relationship does
  • [8] There are occasions where failures of solicitors to communicate wills to executors or beneficiaries breach duties of care. But not in this case

End

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References

Textbook refers to Y. Ross & P. MacFarlane, Lawyers’ Responsibility and Accountability: Cases, Problems and Commentary, Fourth Edition (Butterworth’s, 2012).

  1. Textbook, p. 78
  2. Textbook, p. 79
  3. Textbook, p. 80
  4. Textbook, p. 86
  5. Textbook, p. 87
  6. Textbook, p. 88
  7. Textbook, p. 89
  8. Textbook, p. 90
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