Bedford (who sues as Executrix of the Will and Estate of Lorraine Maureen Whitehead (deceased)) v Stojakovic
[2015] VCC 1692
•26 November 2015
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-14-01520
| LISA JOSEPHINE BEDFORD (who sues as the Executrix of the Will and Estate of LORRAINE MAUREEN WHITEHEAD (deceased)) | Plaintiff |
| v | |
| ZELJKO STOJAKOVIC | Defendant |
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JUDGE: | HIS HONOUR JUDGE JORDAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19, 20 and 23 November 2015 | |
DATE OF JUDGMENT: | 26 November 2015 | |
CASE MAY BE CITED AS: | Bedford (who sues as Executrix of the Will and Estate of Lorraine Maureen Whitehead (deceased)) v Stojakovic | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 1692 | |
REASONS FOR JUDGMENT
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Subject: LEGAL PROFESSIONAL NEGLIGENCE
Catchwords: Testamentary instructions to client
Cases Cited: Hill v Van Erp (1997) 188 CLR 159
Judgment: Judgment for the plaintiff.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr B Gillies | Rosemary Ryan Lawyers |
| For the Defendant | Ms R Burton | Collin Biggers & Paisley Pty Limited |
HIS HONOUR:
1 When a lay person retains a solicitor, the law is the solicitor’s duty is to exercise professional knowledge and skill with lawful protection and advancement of the client’s interests in the transaction in which the solicitor is retained.[1] Reasonableness is the essence of judging any alleged breach of such a duty.
[1]Hill v Van Erp (1997) 188 CLR 159
2 The defendant is a solicitor practising in St Albans in the field of wills and estates. The practice is extensive. He has 1,400 wills at the office, in addition to other clients who took theirs away.[2]
[2]Transcript (“T”) 96
3 On 26 September 2011, a lay person, Ms Kim Whitehead, attended his office. She retained the defendant to prepare a Will and he was so instructed. Her instructions could hardly have been more simple and straightforward. The retainer was really to put into effect her testamentary intentions, which means giving them legal effect.
4 Those intentions were to financially protect her young son, Alexander, by giving him all she had upon him turning 21, except for a bequest of $100,000 to her mother, who would look after him in the event of the deceased passing away. This was in anticipation of a large settlement sum that was likely to come the deceased’s way after a successful testator’s family maintenance (“TFM”) claim involving a former partner.[3]
[3]Plaintiff’s Court Book (“PCB”) PCB 21, 23; T100-102
5 The defendant’s handwritten notes of instructions indicate the deceased’s simple intentions with respect to her mother, Lorraine Whitehead, and Alexander. His bequest was to be held on Trust until he turned 21 years of age. If the mother could not perform the role as executor and trustee for Alex, then a sister, Lisa Bedford, was nominated as a sub executor and trustee.[4] She is the current plaintiff. The defendant drafted the Will and had it typed by his assistant law clerk. The law clerk rang the deceased and said it was ready to sign, presumably ready for execution by the deceased.[5]
[4]PCB 23
[5]PCB 26, T127-128
6 The reality is that the retainer was not just to prepare a Will to reflect her testamentary intentions, but to take all reasonable steps as her solicitor, to put those into legal effect. In other words, it was not just a retainer to prepare a Will and leave it unchecked by the lay client, not discussed with her in conference or by letter of advice and not executed. In the circumstances, the deceased, not being a lawyer, engaged the defendant as a professional person to do all that was reasonably required for her solicitor to carry out in order to put into effect on her behalf what she wanted done.
7 After the deceased attended on 26 September 2011 at his office, the Will was drafted and typed up that day. On all the evidence, precious little was done beyond that save for the law clerk telephoning the deceased to tell her it was ready to sign. The law clerk made an appointment in order for the deceased to come to the office to sign a costs agreement with respect to the TFM case.
8 Affidavits sworn by the defendant indicate that his understanding was that the deceased would come to the office with respect to the TFM case in which he was acting on her behalf following her obtaining a large judgment that was on appeal. When she attended on him as to that appeal, she would sign her Will. At no time did he believe she had withdrawn her instructions with respect to the Will. This state of knowledge of the defendant was first sworn to by him in an affidavit on 13 November 2012 and repeated in a further affidavit on 21 March 2013.[6] He understood that she would come to the office on 30 January 2012 with respect to the appeal and at that attendance on him, would sign her Will.
[6]PCB 21 and 29
9
In fact the deceased, for whatever reason, did not attend the appointment on 30 January 2012. The defendant asked his secretary to arrange another appointment and that was done. The deceased attended the office on
6 February 2012 although, on that occasion, she did not see the defendant. She saw one of his employee’s solicitors, Mr Tom Le, in conference with respect to signing the appeal costs agreement. There is nothing in the various documents tendered by the parties that indicate anything was discussed about her Will. I find the defendant did nothing to bring the unsigned Will to Mr Le’s attention.
10 The deceased saw the defendant personally on a number of occasions later in 2012 with respect to the appeal. The probabilities are that she attended at a conference with the defendant and counsel about the appeal at counsel’s chambers on 14 August 2012. Further to that, the probabilities are she attended, again in the presence of the defendant, two days later on 16 August 2012 at a mediation with respect to the appeal. In addition, the diary notes indicate on a number of occasions that there were telephone calls between the defendant’s office and the deceased in regard to matters pertaining to the appeal. Mr Tom Le seems to have been the solicitor who conducted these telephone conversations on behalf of the defendant.[7]
[7]Defendant’s Court Book (“DCB”)
11 On all the evidence, nothing was done in terms of enquiring about execution of the Will, nor any steps to ensure that the testamentary intentions and instructions of the deceased were carried out in terms of legal steps. The evidence establishes there was no follow-up procedure at all after a re-arranged appointment was made for 6 February 2012. The Will just sat in a file in the defendant’s room. It is a room only a couple of metres away from Mr Le’s room.
12 The deceased passed away some thirteen months after she attended in September 2011 and retained the defendant to prepare a Will for her and give legal effect to her intentions. She died on 27 October 2012.
13 Following her death, the defendant initially acted on behalf of her Estate in an attempt to have probate of the unsigned informal Will granted by the Supreme Court. In the end, this was not successful. The defendant swore several affidavits in the context of that attempt. On 19 September 2013, he swore that the deceased had talked only of her son, Alex, and her mother, Lorraine Whitehead, when she had given him testamentary instructions on 26 September 2011. He discussed with her having a Will to protect her child’s interests in the event that she passed away having been awarded $450,000 by the Supreme Court subject to appeal. The boy’s father, Mr Sam Scarfo, was never mentioned. The defendant also swore that he understood she did not have a previous Will.[8]
[8]PCB 40
14 The plaintiff is the deceased’s sister. Both were daughters of Lorraine Whitehead. The plaintiff, as Executor and Trustee of the Estate of Lorraine Whitehead, now brings this claim in negligence against the defendant. It is based on the failure of the deceased’s intentions being given legal effect with respect to the $100,000 bequest. The mother passed away on 11 August 2014. She had originally been the plaintiff in the attempts by the defendant to have the unsigned informal Will being granted probate. After she passed away, the plaintiff in the current action then became her daughter, Lisa Bedford.
15 The plaintiff puts the case of breach of her duty on two limbs: Firstly, a failure to ensure the Will was promptly executed; secondly, a failure to ensure the instructions given were carried into effect.[9]
[9]PCB 8
16 The defence is a denial of the duty of care as pleaded and also an allegation that, as to the first limb, the defendant was “unable to ensure the execution of a Will”.[10] The defendant says it was the deceased’s inactivity of her own volition that led to the Will never being signed
[10]PCB 11
17 On all the evidence, I find the retainer was to give legal effect to the deceased’s very simple testamentary intentions. Execution of a properly drawn Will was, of course, a necessary and really first step in that process.
18 The question is whether the defendant has taken reasonable steps in terms of his duty as the solicitor acting for the deceased’s instructions. He only has to act reasonably. Promptness needs to be measured by reasonableness. Of course he could not guarantee the prompt execution of a Will, or guarantee the testamentary instructions were carried into effect. He only had to act reasonably and take what steps were reasonable in the circumstances. I find he was negligent in not taking reasonable steps to ensure the Will would be signed promptly.
19 I do not accept the defendant’s submission that the claim should fail because there was nothing foreseeable that required prompt action by the defendant. An example would be a client’s ill health or age. In other words, there was nothing reasonably foreseeable that might frustrate the deceased’s testamentary intentions is the argument.
20 In all the circumstances of this case, I accept promptness did not amount to any specific time limit or actual date for the defendant to follow up and organise an opportunity to have the Will signed. However, after the 6 February 2012, opportunity was lost. The period of many months with fairly regular personal and telephone contact between the deceased and the defendant, as well as his office, amounted to negligent inactivity on his part.
21 Of course, you can lead a horse to water but no one can ensure it drinks. If the duty is to provide the water, it is satisfied. Here, the duty was to have a Will not only drafted, but put into effect. Naturally, the defendant cannot guarantee prompt execution but, in my view, he had to take all reasonable steps to ensure that it was executed. If reasonable steps to ensure that failed, then there was no breach of duty. Thirteen months passed with no follow-up in spite of a number of opportunities and no efforts made after the 6 February 2012 opportunity was lost. This was an unreasonable delay. Without execution there is no Will in the sense of what he had been retained to put into effect in all the circumstances at his client’s request. The Supreme Court refused the grant of probate on the unsigned informal Will.
22 If I am wrong on the first limb pleaded to take reasonable steps to ensure prompt execution of the Will, then the defendant in my opinion had a duty under the second limb to ensure the instructions given were carried into legal effect. Again, he could not guarantee that. His duty required reasonableness in regard to the steps the defendant had to take. On all the evidence, he really took none by way of activity. I find that amounted to negligence and made it certain her instructions were not going to be carried into effect.
23 I reject the defendant’s first argument, namely that the deceased’s inactivity was why the Will was not signed. It was submitted this indicated a change of mind in regard to her intentions and instructions. It is against the evidence. In fact, in November 2012, the defendant swore he believed that no instructions had been altered. He repeated that statement the next year in 2013.[11] I will say more about this topic later.
[11]PCB 21 and 29
24 I also reject the defendant’s argument that the deceased had knowledge of the legal requirements of execution. This lay person was involved in a TFM claim that became the subject of an appeal. That litigation was based on need and inadequate provision by a former partner of hers. I do not infer from involvement in such litigation that this lay person knew anything relevant about the need for, and details involved in, the strict legal requirements of executing a will. It is also relevant that the defendant swore in September 2013 that she had no previous Will.[12] Some reference in diary notes was made to a possible will kit she may have had but I cannot infer she had any knowledge about execution.
[12]PCB 40
25 In all the circumstances, including the involvement in a challenge to an estate in terms of TFM litigation, it was all the more incumbent on the defendant, in my view, to attend to proper and prompt execution of her Will to preserve the situation she desired with respect to protecting her son and her mother. In my view, it was appropriate for him, in the circumstances, as a reasonable solicitor, to take her through by letter or during an attendance on him or employees at the office of the requirements regarding signing the Will properly. When the first attendance did not achieve this, follow-up was required by letter, telephone call or personally on those occasions he saw her in 2012.
26 If instructions changed and she did not wish to pursue execution of the Will and did not wish to grant the bequests to her mother and her son as he had written down on 26 November 2011, then so be it. On the evidence, the probabilities are no such change ever occurred. Instructions remained as they were given and noted by him on that date until her death thirteen months later.
27 Depending on the circumstances of course, but if a lay person engages a solicitor to prepare a Contract of Sale in order to sell their house and the details are given of the parties and the property, contracts are drawn up and if there is no follow-up and contracts are not sent out, then the solicitor has probably not fulfilled his duty. He has only taken the first step or two. Similarly, if he was asked to prepare a Transfer of Land to effect transfer of property and took the details of the parties, the property and drew up a Transfer and did no more, he has probably not fulfilled his duty when instructed to prepare a Transfer so the client could legally transfer his land. Follow-up advice is usually incumbent when a solicitor is retained by any client to prepare a Will, or a Contract of Sale or Transfer in such circumstances. On all the evidence in this case, reasonable follow-up steps were required. I am satisfied that the solicitor has breached his duty and that has resulted in loss and damage being suffered by way of loss of benefit of the legacy in the sum of $100,000.
28 The defendant gave oral evidence. I found him an inconsistent and unreliable witness. His affidavits and oral evidence were not consistent. He was a defensive witness. He said the deceased wanted to come into the office in order to sign her Will.[13] This was put in the context of this being her preference as opposed to the Will being posted out to her. The defendant said there were reasons why he could not post the Will and he was very vague with respect to this. His evidence was not convincing.
[13]T101-108, 122
29 Generally, he put it in the context of some dispute between the deceased and her mother.[14] It is very inconsistent with all her testamentary concerns being for Alex and her mother as his own affidavit described.[15] It is inconsistent that on that very same day, he convinced her to uplift the gift to the mother from $20,000 to $30,000 to $100,000. He took down a relevant address on the day he took the instructions for the Will and that address was the mother’s address in Keilor Downs.
[14]T122
[15]PCB 40
30 When challenged about why he would not send the draft Will to the mother’s address, he also gave in my view an unsatisfactory answer that it had to do with some privacy concerns.[16] It was never adequately explained why the woman who was considered fit to raise Alex and be given $100,000 would not at least receive mail sent to her daughter, marked personal, confidential, or for private attention and not honour those warnings.
[16]T124 and 147
31 The defendant also tried to explain the failure to post the Will on the basis of ethnic clients.[17] If the deceased wanted to come to the office that was perfectly reasonable but in the circumstances when she did not execute the Will when at the office on 6 February 2012, done a letter and the draft could easily have been mailed. It should have been in these circumstances given the opportunity was lost on 6 February 2012 due to the defendant not seeing and having no inter-office follow-up procedure with other staff.
[17]T147
32 The mother’s address at Keilor Downs was typed into the Will. It would have been presented for probate as the address of the deceased by the solicitor. In fact, it was presented for probate with that address on it as an informal Will that was the subject of the unsuccessful application for probate. The defendant was prepared to represent it as the deceased’s appropriate address then.
33 I also found it very unsatisfactory that if there was some problem about sending mail to that address, or some problem generally with the usage of any address, why the defendant would not just use the address of his legal firm. He had inserted in Clause 7 of the Will, a clause about his firm being employed as the solicitors in proving the Will and transacting any legal business in relation to the administration of the Estate. His evidence was unreliable, in my view, in respect to these matters.[18]
[18]T123
34 It remains that the defendant really took no reasonable steps to ensure when he knew the deceased was coming into the office on 6 February 2012, her having missed the appointment on 30 January 2012, to give the Will to Mr Tom Le. It could have easily been executed at the same time that she had to sign a Costs Agreement for the appeal. He took no steps to give instructions to Mr Le or the law clerk who had been involved in making appointments to ensure that the Will was given to Mr Le, nor to see that he himself was notified when the deceased came into the office. He could have very quickly attended to the execution himself given the offices were only metres away.
35 The defendant deposed to personally asking the secretary to arrange another appointment for the deceased to attend, so he had personal knowledge of these matters. He still did nothing to make sure that arrangements were put in place for the day that she did come in at a renewed appointment.[19] This was not a case where he was let down by inadequate information from staff.
[19]PCB 29
36 I found the defendant’s evidence also unsatisfactory in terms of what he said about difficulties using telephone numbers to contact the deceased. There was both a landline number and a mobile number written in by staff beside the notations on 30 January and on 6 February 2012. Together with the mother’s postal address, it did not seem there was on the probabilities any real problem of reaching the deceased when required. The steps required for the appeal are seen from the notes and seemed to have reached her.
37 The defendant also appeared to concede that he knew the deceased had a poor memory. This again, in my opinion, should have prompted a reasonable solicitor to take some reasonable steps to jog the memory of his client with respect to the unexecuted Will that he said was just sitting in a manila folder on his desk for some many months.
38 The defendant had no satisfactory explanation as to why he did not attend to the execution of the Will, nor even ask the deceased about the Will on those occasions when he met her personally in the course of 2012 in regard to the appeal. There was ample opportunity when he knew that she was in receipt of a large sum of money, subject to an appeal upsetting that decision, in which he could have raised the question of the unsigned Will sitting on his desk. In the end, the defendant really did nothing to pursue the matter by way of attending to execution of the Will, reminding the deceased that it had not been done, or seeing whether or not instructions had ever changed. In all the circumstances, this was negligent.
39 Ms Ayesha Adbo gave evidence. She had worked as a law clerk for the defendant from 2008 until February 2012. She had typed up the Will on the same day as the initial attendance on 26 September 2011. She had made the diary notes with respect to 30 January 2012 and 6 February 2012. This witness gave evidence that she was able to contact the deceased for coming in to sign the Costs Agreement with respect to the appeal and she had made contact via the deceased’s mother.
40 Nothing was specifically done by Ms Adbo by way of attending to the execution of the Will at the appointment on 6 February 2012, but that does not appear to have been a matter that Ms Adbo seemed to have much if any, personal knowledge of. She had typed up the Will but she had never been told by the defendant to attend to the deceased signing. He carried the responsibility, to either do that personally or give instructions to staff to do so. Her employment ended in February 2012.
41 Evidence was given by Mr Tom Le, an employee solicitor, who, along with the defendant was involved with the defendant in the carriage of the appeal proceedings.[20] He was the author of a number of diary notes that were there as a reminder about steps that should be taken. There are many examples of various steps and things that had to be done in relation to the appeal proceedings.[21] No such reminder note appears in any of the material in this case as to attending to execution of this Will sitting in the defendant’s office from the defendant, Mr Le or any other staff member.
[20]T142
[21]DCB 4-48, 50-52
42 Interestingly, Mr Le had no trouble contacting the deceased by landline or mobile and this was in contrast to the evidence of the defendant, who sought to deflect attention from his inactivity to some extent by relying on communication difficulties. I do not accept there were any communication difficulties to speak of in this case. Not only was the deceased in fairly regular attendance at his office, but she was also able to be contacted on land or mobile telephone number or at her mother’s in Keilor Downs.
43 A number of emails and other documents were tendered by the defendant in order to illustrate that there was some tension at times between the deceased and her mother, Lorraine. Enquiries were made as to whether there were any concerns about the mother attending a conference with the deceased with respect to the appeal.[22] This evidence, it was submitted, met the criticism of not mailing out the Will to the mother’s address at Keilor Downs. I was not satisfied that those cryptic diary notes indicated any significant tension between the mother and the deceased at all. It did not provide any satisfactory reason why a Will that was bequeathing $100,000 to the mother should not be sent out to the deceased, care of the mother’s address.
[22]DCB 3-4, PCB 57
44 A number of diary notes were tendered which had been made by Tom Le that were designed to establish Mr Sam Scarfo had become involved in a relationship with the deceased. On all of the evidence, some cohabitation happened but I am not satisfied it was anything more than a temporary living arrangement. Some of those diary notes raised the prospect of an earlier Will being in existence. Sam Scarfo, it was suggested, may have had access to this so-called Will.[23] Also, Sam Scarfo had claimed, according to a note, that he was next-of-kin at the time of the deceased’s passing.[24] It appears ultimately there had been no Will.
[23]DCB 6-13
[24]DCB 13
45 This body of evidence was led in an attempt to support the defendant’s primary submission that the deceased had not signed because she had changed her mind about her testamentary intentions after her instructions on 26 September 2011. It was submitted this was relevant to the inactivity on the part of the defendant, as it was all the deceased’s fault. In my view, if there really was concern about this, which I do not accept, then further instructions should have been sought about the deceased’s altered testamentary intentions at some stage. That was simply never done. Two of the defendant’s affidavits in fact depose to unchanging testamentary intentions.[25] The reality is there was no attention by the defendant to the execution of the Will nor as to whether instructions had ever changed in the course of the many months that I have mentioned.
[25]PCB 21 and 29
46 Mr Sam Scarfo gave evidence that he was the father of Alex. He resumed cohabitation with the deceased as de facto partner in 2010. The deceased passed away at his premises Diggers Rest, as a result of “mixed drug toxicity”.[26] His evidence was led to support the defence that the plaintiff’s circumstances had changed from when she gave instructions on 26 September 2011. The change was she was back with Mr Scarfo. On Mr Scarfo’s evidence, they were back together from 2010. Yet, on 26 September 2011, the deceased gave clear instructions to the defendant to leave everything to her son, Alex, when he turned 21 and $100,000 to her mother, Lorraine. Even more to the point, clearly Lorraine was to look after Alex should the deceased pass away. The father, Mr Scarfo, was not even mentioned to the defendant.
[26]Exhibit 1, page 19, DCB
47 The deceased also gave her mother’s address to the defendant and not the Digger’s Rest address of Mr Scarfo. This also supports my rejection of the defendant’s argument that the Scarfo relationship was the reason the deceased did not come in and sign. Perhaps not surprisingly, custody of Alex was ultimately given by consent by Mr Scarfo to Lisa Bedford, the plaintiff, after the death of Lorraine.
48 The defendant’s third affidavit sworn on 19 September 2013 did not refer to any mention of Mr Scarfo by the deceased. This is also consistent with my view that Mr Scarfo was never included in her intentions up to the time of her death.[27] That state of mind had never altered. Every aspect of her instructions was to the contrary. On the probabilities, whatever was the situation between the deceased and Mr Scarfo between 26 September 2011 and her death, he never featured in her testamentary intentions.
[27]Exhibit A, page 20
49 On all the evidence, the probabilities are there had been no change to the deceased’s testamentary intentions as clearly expressed on 26 September 2011. Simply nothing was done to put them into effect after the Will was drawn up. I reject the defendant’s submission that the deceased, of her own volition due to changed circumstances with Mr Scarfo, simply decided not to come in and sign the Will as her intentions had changed. I reject thus the submission the Will was not signed because the deceased chose to take no steps.
50 I do not accept the defendant’s submission as to the second reason for the deceased’s inactivity, namely that appeal litigation was still ongoing. The parties agreed that the appeal hearing had finished and judgment had been reserved by the Court of Appeal when the deceased passed away. It is not probable that the plaintiff had put off signing the Will because of such litigation. She wanted a will thirteen months earlier when she knew about an appeal challenge to her legal win at first instance.[28]
[28]T101
51 It is improbable that having expressed her concern about Alex and her situation generally in September 2011 in requesting a will, that she would then do nothing until the appeal was over. The appeal was already on foot when she wanted the Will drawn on 26 September 2011. If the appeal worried her sufficiently to not sign a Will, then why ask for it in the first place at the time she did. She could have waited until the appeal was over and then asked the defendant to draw up the Will if the appeal was causing her to be inactive.
52 In my opinion, the plaintiff has satisfied the onus of proving negligence by the defendant. I am also satisfied causation as to loss has been proved. I reject the defendant’s submission that just because Mr Scarfo gave evidence of an intention to challenge even an executed Will, that would have impacted on the $100,000 gift. It is little more than speculation on this evidence.
53 I am not satisfied that any real resumption of the relationship had taken place at the relevant time even though the deceased was at his Diggers Rest address when she died. If anything, her express testamentary intentions, which I find did not change, tend to show Mr Scarfo played a very limited role in her life. However, I do not have to reach a conclusion about that. On all the evidence, it is little more than guesswork as to the effect of a challenge by Mr Scarfo to an executed Will, if indeed there ever was going to be a challenge.
54 The defendant’s negligence has caused a loss of $100,000 and for the reasons expressed, I give judgment for the plaintiff in that sum.
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