Hill t/a R F Hill and Associates v Van Erp - [1995] QCA 10

No judgment structure available for this case.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 36 of 1994
Brisbane [Van Erp v. Hill]
BETWEEN:

RONA VAN ERP

(Plaintiff) Respondent

AND:

ROSEMARY HILL trading as
R.F. HILL & ASSOCIATES

(Defendant) Appellant

FITZGERALD P.

DAVIES J.A. PINCUS J.A.

Judgment delivered 13/02/1995

SEPARATE REASONS FOR JUDGMENT FITZGERALD P., DAVIES AND

PINCUS JJ.A., ALL CONCURRING AS TO THE ORDER MADE.

APPEAL DISMISSED WITH COSTS TO BE TAXED.

CATCHWORDS: NEGLIGENCE - duty of care, proximity - whether failure of solicitor to ensure proper execution of will - whether duty to do so - signature of witness invalidating bequest to beneficiary - pure economic loss suffered by beneficiary named in will

Counsel:	P.A. Keane Q.C. with him Mr J.D. McKenna for the Appellant R.G. Bain Q.C. with him Ms E. Ford for the Respondent
Solicitors:	Clayton Utz for the Appellant Chris Wlodarczyk & Co. for the Respondent
Date of Hearing:	8 August 1994
IN THE COURT OF APPEAL	[1995] QCA 010
SUPREME COURT OF QUEENSLAND	Appeal No. 36 of 1994
Brisbane
Fitzgerald P. Davies J.A. Pincus J.A.
[Van Erp v. Hill]
BETWEEN:

RONA VAN ERP

(Plaintiff) Respondent

AND:

ROSEMARY HILL trading as
R.F. HILL & ASSOCIATES

(Defendant) Appellant

REASONS FOR JUDGMENT - FITZGERALD P.

Judgment delivered 13/02/1995

This is an appeal from a judgment delivered in the District Court on 28 January 1994, awarding the respondent damages of $163,471.50 against the appellant, together with interest and costs. The sole issue on the appeal is whether the appellant owed a duty of care to the respondent; if she did, it is conceded that the appellant was negligent and that her negligence caused loss to the respondent in the amount awarded.

The appellant is a solicitor who prepared a document intended to be the last will of a client, Olive Eileen Currey, who signed the document as her will on 7 December, 1990, and subsequently died on 8 May, 1991.

Ms. Currey's signature was witnessed by the appellant and the respondent's husband, who signed the will as attesting witnesses. The will named the respondent as a beneficiary but, by section 15 of the Succession Act 1981, was to that extent void because it had been witnessed by her husband. Consequently, the respondent did not receive the benefit provided for her by the will.

The appellant knew that the other attesting witness to the will was the respondent's husband but the respondent was not a client of the appellant, who denies that she was under a duty of care to the respondent.

There is no decision binding on this Court which directly determines whether a solicitor who prepares and arranges for the execution of a will on behalf of a client is under a duty of care to a person named as a beneficiary in the will who is not a client. There are, however, conflicting views stated in a number of cases which decide or discuss that question; see, for example, Robertson v. Fleming (1861) 4

Macq. 167; Ross v. Caunters (1980) ch 297; Watts v. Public Trustee of Western Australia (1980) W.A.R. 97; Seale v. Perry (1982) VR 193; Gartside v. Sheffield, Young and Ellis (1983) NZLR 37; Weir v. J.M. Hodge and Son (1990) SLT 398; White v. Jones (1993) 3 WLR 730.

It would be possible to approach the present matter by an analysis of those cases, but that course would have disadvantages. There have undoubtedly been changes in the law of negligence, not only since Robertson v. Fleming but much more recently; thus, the decisions which favour the respondent, at least apart from White v. Jones, were influenced by, if not based on, Ross v. Caunters which, in turn, relied on Anns v. Merton London Borough Council (1978) AC 728, which it has now been held by the House of Lords was wrongly decided: Murphy v. Brentwood District Council (1991) AC 398. Nonetheless, the decision in White v. Jones is consistent with that in Ross v. Caunters, but White v. Jones is itself under appeal to the House of Lords. Secondly, it is open to doubt whether the law of negligence is developing along exactly the same lines in Australia and England. In the circumstances, the present case is best approached by reference to principles which are discernible in recent decisions of the High Court.

Not all foreseeable damage caused to one person by another's careless act or omission is recoverable in an action for negligence. Despite Brennan J.'s repeated rejection of his colleagues' opinion, and some passages in other individual judgments which seem to fall short of total endorsement, the majority of the High Court have, for a period of years, defined the additional requirement as a "relationship of proximity" between the person responsible for the careless act or omission and the person damnified.

In San Sebastian Pty. Ltd. v. Minister Administering the

Environmental Planning and Assessment Act 1979 (NSW) (1986)

162 CLR 340, Gibbs CJ., Mason, Wilson and Dawson JJ. said at
p.355:

"The relationship of proximity is an integral constituent of the duty of care concept. We refer to that relationship in its broader sense, namely, as embracing a general limitation upon the test of reasonable foreseeability, this being the sense in which it has been discussed and applied in recent judgments in this Court (Caltex (1976) 136 CLR at pp.574-576; Jaensch v. Coffey (1984) 155 CLR 549 at pp.552-553; Sutherland Shire Council v. Heyman (1985) 157 CLR 424, at pp.461-462, 506-507; Stevens v. Brodribb Sawmilling Co. Pty. Ltd. (1986) 160 CLR 16). The notion of proximity, because it limits the loss that would otherwise be recoverable, if foreseeability were used as an exclusive criterion of the duty of care, is of vital importance when the plaintiff's claim is for pure economic loss. When the economic loss results from negligent misstatement, the element of reliance plays a prominent part in the ascertainment of a relationship of proximity between the plaintiff and the defendant, and therefore in the ascertainment of a plaintiff and the defendant, and therefore in the ascertainment of a duty of care. But when the economic loss results from a negligent act or omission outside the realm of negligent misstatement, the element of reliance may not be present. It is in this sphere that the absence of reliance as a factor creates an additional difficulty in deciding whether a sufficient relationship of proximity exists to enable a plaintiff to recover economic loss."

In Cook v. Cook (1986) 162 CLR 376, Mason, Williams, Deane and Dawson JJ. said in a joint judgment at pp.381-382:

"For our part, we accept that a relevant duty of care will arise under the common law of negligence only in a case where the requirement of a relationship of proximity between the plaintiff and the defendant is satisfied: see, generally Jaensch v. Coffey (1984) 155 CLR 459 at pp.555, 585; Sutherland Shire Council v. Heyman (1985) 157 CLR 424 at pp.440, 460-461, 470, 496-499; Stevens v. Brodribb Sawmilling Co. Pty. Ltd. (1985) 160 CLR 16 at pp. 30, 51-54. As an overriding control of the test of reasonable foreseeability, that requirement of proximity of relationship can be traced to the judgments of Lord Esher M.R. and A.L. Smith L.J. in Le Lievre v. Gould [1893] 1 Q.B. 491: see Donoghue v. Stevenson [1932] A.C. 562, at p.581. It constitutes the general determinant of the categories of case in which the common law of negligence recognizes the existence of a duty to take reasonable care to avoid a reasonably foreseeable and real risk of injury to another.
A concomitant of the concern of the law of negligence to identify the categories, rather than the wilderness of single instances, of cases in which a duty of care will arise is that the measure for determining what constitutes reasonable care is an objective and impersonal one. ... The more detailed definition of the objective standard of care for the purposes of a particular category of case must necessarily depend upon the identification of the relationship of proximity which is the touchstone and control of the relevant category."

Gala v. Preston (1991) 172 CLR 243 concerned a claim for damages for negligence by a passenger in a stolen motor car who was injured by the driver's negligence. It was held that the passenger could not recover. At pp.252-253, Mason CJ, Deane, Gaudron, and McHugh JJ. said:

"Commencing with Jaensch v. Coffey (1984) 155 CLR 549, this Court, in a series of decisions, has accepted that a relevant duty of care will arise under the common law of negligence only in a case where the requirement of a relationship of proximity between the plaintiff and the defendant has been satisfied: see Sutherland Shire Council v. Heyman (1985) 157 CLR 424, at pp.461-462, 506- 507; Stevens v. Brodribb Sawmilling Co. Pty. Ltd. (1986) 160 CLR 16, at pp 30, 50-52; San Sebastian Pty. Ltd. v. The Minister (1986) 162 CLR 340 at pp.354-355; Cook v. Cook (1986) 162 CLR 376 at pp.381-382. The requirement of proximity constitutes the general determinant of the categories of case in which the common law of negligence recognizes the existence of a duty to take reasonable care to avoid a reasonably foreseeable and real risk of injury. In determining whether the requirement is satisfied in a particular category of case in a developing area of the law of negligence, the relevant factors will include policy considerations."

Dawson J. who had been party to the joint judgments in San Sebastian and Cook, delivered a separate judgment in Gala. At pp.276-277, he said:

"The requirement of proximity has been a useful means of expressing the proposition that in the law of negligence reasonable foreseeability of harm is not enough to establish a duty of care. Something more is required and currently it is described as a proximate relationship between the relevant parties. But the use of that term does not of itself indicate the content of the requirement. Indeed, 'proximate relationship' or 'proximity' may not be the happiest choice of terms because it suggests a nearness or closeness of some kind between the parties and it is now perfectly plain that proximity may express more than that. The use of the word 'proximity' is explained by its appearance in that famous, if somewhat ambiguous, passage in the speech of Lord Atkin in Donoghue v. Stevenson .... in which he describes who, in law, is one's neighbour. Whatever he intended to convey by the use of that word, it is now clear that it extends beyond nearness or closeness, physical or otherwise. This case is a good illustration. If it is said that, notwithstanding the reasonable foreseeability of harm to the plaintiff, there was no duty of care owed to the plaintiff by the first defendant because there was no relationship of proximity between them, it cannot mean that their relationship was not sufficiently close or near. The relationship of driver and passenger is in other circumstances a textbook example of a proximate relationship. What is meant in the present context is that the law does not recognize a duty of care in the circumstances in which the plaintiff sustained his injuries. In other words, proximity embraces considerations unrelated to closeness or nearness and in a case such as the present it is the identification of the underlying principle which is the important thing. Merely to describe it as a matter of proximity is to mask the problem.
I do not mean to suggest that the application of the test of proximity produces capricious or arbitrary results. But I think it may be going too far to say, as Deane J. does in Stevens v. Brodribb Sawmilling Co. Pty. Ltd. (1986) 160 CLR 16 at p.52, that 'the notion of proximity can be discerned as a unifying theme explaining why a duty to take reasonable care to avoid a reasonably foreseeable risk of injury has been recognized as arising in particular categories of case'. It is, however, true, as Deane J. also points out, that the test of proximity proceeds in accordance with the accepted modes of legal reasoning, particularly reasoning by analogy from decided cases. On the other hand, it would also be going too far to say that the notion of proximity is entirely without content and that no principles emerge from the process of extrapolation from decided cases or categories of decided cases: cf. Howarth, 'Negligence after Murphy: Time to Re- think', Cambridge Law Journal, vol.50 (1991) 58, at pp.70-71. For example, there are reasons of general, if not universal application, which lie behind the rule which, for the most part, denies recovery of damages for pure economic loss or the rule which restricts the recovery of damages for nervous shock to a particular kind of plaintiff. But it is obvious that the search for a single principle underlying the concept of proximity is bound to be unsuccessful. That is to be seen from this case itself."

In Burnie Port Authority v. General Jones Pty. Ltd. (1994) 120 ALR 42, a fire on premises occupied by the appellant, caused by its independent contractor, spread to the respondent's adjoining property and caused damage. It was held that the appellant was liable to the respondent for damages for negligence.

Mason CJ, Deane, Dawson, Toohey and Gaudron JJ delivered a joint judgment. At pp.55-56, they discussed the development from Fletcher v. Rylands (1866) LR 1 Ex 265; affd. (1868)

LR3HL 330, through Heaven v. Pender (1883) 11 QBD 503, to

Donoghue v. Stevenson (1932) AC 562, and noted that, to establish negligence, foreseeability was qualified by "a relationship of proximity".

At p.56 their Honours continued:
"The 'general conception' of a relationship of proximity was identified ((1932) AC at 580) by Lord Atkin as the 'element common to the cases where [liability in negligence] is found to exist' and as the basis of the duty of care which is common to all such cases. It has been stressed and developed in judgments in recent cases in the court (See, in particular Jaensch v. Coffey (1984) 155 CLR 553-4, 583-6; Sutherland Shire Council v. Heyman (1985) 157 CLR at 441, 461-2, 471, 495-8; Stevens v. Brodribb Sawmilling Co. Pty. Ltd. (1986) 160 CLR at 30, 49-53; San Sebastian Pty. Ltd. v. Minister (1986) 162 CLR 340 at 355; 68 ALR 161; Cook v. Cook (1986) 162 CLR at 381-2). As Deane J. pointed out in Stevens v. Brodribb Sawmilling Co. Pty. Ltd. ((1986) 160 CLR at 53; and see, generally, Cook v. Cook (1986) 162 CLR at 382, per Mason, Wilson, Deane and Dawson JJ.), that common element of a relationship of proximity 'remains the general conceptual determinant and the unifying theme of the categories of case in which the common law of negligence recognises the existence of a duty to take reasonable care to avoid a reasonably foreseeable risk of injury to another.' Without it, the tort of negligence would be reduced to a miscellany of disparate categories among which reasoning by the legal processes of induction and deduction would rest on questionable foundations since the validity of such reasoning essentially depends upon the assumption of underlying unity or consistency.
It is true that the requirement of proximity was neither formulated by Lord Atkin nor propounded and developed in cases in this court as a logical definition or complete criterion which could be directly applied as part of a syllogism of formal logic to the particular circumstances of a particular case; (See Donoghue v. Stevens [1932] A.C. at 580; and generally; Stevens v. Brodribb Sawmilling Co. Pty Ltd. (1986) 160 CLR at 51-3). As a general conception deduced from decided cases, its practical utility lies essentially in understanding and identifying the categories of case in which a duty of care arises under the common law of negligence rather than as a test
for determining whether the circumstances of a particular case bring it within such a category, either established or developing: (See, generally, Jaensch v. Coffey (1984) 155 CLR at 585; Stevens v. Brodribb Sawmilling Co. Pty. Ltd. (1986) 160 CLR at 53); Hedley Byrne and Co. Ltd. v. Heller and Partners Ltd. [1964] AC 465, at 524-5. That is, however, the basic function performed by general principles or conceptions in the ascertainment and development of the common law."

McHugh J. dissented in Burnie, but there is an interesting passage in his judgment where he said at p.95:

"Proximity, remoteness, reasonable care and breach of duty, the bench marks of negligence law, are not formulas for exactness. The wavering history of the law of negligence in relation to the recovery of damages for purely economic loss is eloquent evidence of the inherent indeterminacy of negligence law. "

Before this Court, particular attention was drawn to the circumstance that the respondent's person or property had not been damaged, but that she had lost the benefit intended for her by the will, so that her loss was solely economic.

Reliance was then placed by the appellant upon Hawkins v. Clayton (1988) 164 CLR 539 for the proposition that the respondent could not succeed unless it was established that it was her reliance on the appellant in some respect which led to her loss of the benefit for which the will provided.

Hawkins v. Clayton was a negligence action against solicitors in relation to a will, but the circumstances were very different. The negligence did not relate to the preparation of the will but was the solicitors' failure, over an extended period, to inform the executor named in the will of the will's existence. In consequence, the estate deteriorated. The executor succeeded in an action on behalf of the estate. He also sued as a beneficiary, but that claim was not fully discussed. Other considerations aside, he had at the time no claim to any of the assets of the estate which was still in the process of administration.

Mason CJ and Wilson J., who dissented, considered the relationship of proximity to be that which arose by reference to the professional relationship between the solicitors and the testatrix (and the executor in his capacity as her legal representative). They said (at p.545) that "the relevant inquiry is whether the professional relationship of solicitor and client gave rise to a relationship of sufficient proximity founded upon an assumption of responsibility by the respondents and reliance thereon by the testatrix. The context within which that inquiry is made is a claim arising from a failure on the part of the respondents to act. In our opinion, the question must be answered in the negative."

Later discussion (p.545-546)made it clear that the main premise underlying their Honours' conclusion was that there had been no responsibility assumed by the solicitors or implied by law "to take positive steps to ensure that the existence and contents of the will were known to the executor." Unnecessarily, it would seem, their Honours added at p.546:

"Nor is there any basis upon which it could be concluded that, if there were such an assumption of responsibility, either the testatrix or her executor relied on it."

A reliance by the executor on any act or omission of the solicitors formed no part of the judgment of Brennan J., who said at p.553-555:

"In my opinion, a duty of disclosure arises from custody of the will after the death of the testator, the nature of the will and the purpose for which custody is accepted as well as from the foreseeable consequences of non-disclosure.
...
The law imposes the duty on the custodian of a deceased testator's will for the protection of the executor and, derivatively, for the protection of the beneficiaries. It is not a duty owed to the deceased testator. The damage suffered in consequence of a breach of the duty is not a loss of title to the assets in the estate nor a loss of the executor's right to possession of the assets. A breach of the duty does not infringe any proprietary or possessory rights vested in the executor by the will. The loss is a loss of the exercise or enjoyment of the rights of ownership by an executor who does not know of his entitlement. As such a loss increases with the passing of time, the duty to disclose is a duty to disclose promptly.

...
... where the custodian has reason to believe that disclosure by him to the executor of the existence, contents or custody of the will is needed in order that the will may be made effectual, the custodian is under a duty promptly to take reasonable steps to find, and to disclose the material facts to, the executor."

At p.555, his Honour accepted that his approach did not involve an inquiry as to whether "the requisite relationship of proximity exists between a person who is said to owe a duty and a person to whom the duty is said to be owed", because such a test did not involve 'a legal criterion of such precision that it answered the question whether ... a duty of care exists."

Then, at pp. 556-558, he said:

"... When the existence of a duty in a new category of case is under consideration, the question for the court is whether there is some factor in addition to reasonable foreseeability of loss which is essential to the existence of the duty: see Jaensch v. Coffey (1984) 155 CLR 549, at pp.575-577. In many of the new categories of case in which a duty has been held to exist, reasonable foreseeability of loss has not been sufficient in itself to give rise to a duty to act or to abstain from acting in order to avoid the loss. In a case where a novel category of duty is proposed and the factors which determine its existence must be identified, the court may have regard to a variety of considerations the nature of the activity which causes the loss, the nature of the loss, the relationship between the parties and the contemporary community standards (especially where liability for breach of the proposed duty would be disproportionate to the risk which a person might reasonably be expected to bear as an incident of engaging in the particular activity if no limiting factor were identified). ... In a novel category of case, when it appears that the proposed duty depends on some factor additional to reasonable foreseeability of loss, the additional factor must be identified. In my opinion, the identification must be sufficiently precise to permit the tribunal of fact (whether judge or jury) to ascertain the existence of the relevant factor or factors: see San Sebastian Pty. Ltd. v. The Minister (1986) 162 CLR at pp.367-368. Indeed, it is only by reference to factors so precisely identified that it is possible to define the nature and content of a duty that it is possible to define the elements of the cause of action in tort for its breach. Having defined the duty of disclosure owed by the custodian of a deceased testator's will to the executor named in the will, it is necessary next to turn to the elements in the cause of action for its breach.
The elements which are essential to the existence of a cause of action for breach of a duty of disclosure owed to an executor include, of course, damage. The nature of the damage which a breach is apt to cause discloses other elements in the cause of action. The damage caused by breach of a duty of disclosure owed to an executor can flow only from his ignorance of the will or its contents or its custody. ... The damage recoverable for breach of the duty of disclosure thus exhibits uniformly this feature: the damage caused by the breach of duty is generated by events occurring when the executor is ignorant of his title to the estate and before he has elected whether or not to renounce the office of executor.
...
... A duty of disclosure, breach, ignorance of the will or its contents or custody, resultant failure to enter on the administration of the estate, resultant loss to the estate and assumption of office as executor must co-exist in order to establish the cause of action."
Commencing at p.576, Deane J. said:
"... As has been stressed in a number of recent cases in this Court (see, e.g., the judgment of the majority of the Court in Cook v. Cook (1986) 162 CLR 376, at pp.381-382), a relevant duty of care will arise under the common law of negligence only in a case where the requirement of a relationship of proximity between the plaintiff and the defendant is satisfied. In the more settled areas of the law of negligence involving direct physical injury or damage caused by negligent act, 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: see, e.g., Wyong Shire Council v. Shirt (1980) 146 CLR 40 at p.44; Jaensch v. Coffey (1984) 155 CLR 549 at pp.581-582. That cannot, however, be said of cases in the area where the plaintiff's claim is for pure economic loss. In that area, the categories of case in which the requisite relationship of proximity is to be found are properly to be seen as special in that they will be characterized by some additional element or elements which will commonly (but not necessarily) consist of known reliance (or dependence) or the assumption of responsibility or a combination of the two: see, generally, Sutherland Shire Council v. Heyman (1985) 157 CLR 424 at pp.443-444, 466-468, 501-502. As was pointed out in the judgment of the majority of the Court in San Sebastian Pty. Ltd. v. The Minister (1986) 162 CLR 340 at p.355.
'The notion of proximity, because it limits the loss that would otherwise be recoverable if foreseeability were used as an exclusive criterion of the duty of care, is of vital importance when the plaintiff's claim is for pure economic loss. When the economic loss results from negligent misstatement, the element of reliance plays a prominent part in the ascertainment of a relationship of proximity between the plaintiff and the defendant, and therefore in the ascertainment of a duty of care. But when the economic loss results from a negligent act or omission outside the realm of negligent misstatement, the element of reliance may not be present. It is in this sphere that the absence of reliance as a factor creates an additional difficulty in deciding whether a sufficient relationship of proximity exists to enable a plaintiff to recover economic loss.'

Implicit in that passage is the recognition that the requisite relationship of proximity must exist with respect to the allegedly negligent class of act and the particular kind of damage which the plaintiff has actually sustained.
...
The primary relationship for the purposes of the present case was that between the firm and the testatrix herself. The damage sustained was economic loss. That damage was a consequence of the failure of the firm to locate Mr. Hawkins and inform him that he was the executor and principal beneficiary under the testatrix's will. It was sustained not by the testatrix, for she was dead, but by Mr. Hawkins in his capacity as the executor of her estate. ... The question arises whether, in these circumstances, the case can be categorized as one in which the relationship between the firm and the testatrix (and the representative of her estate after her death) possessed the requisite element of proximity with respect to economic loss of the kind sustained by the testatrix's estate. The conclusion to which I have come is that it did.
The identity and relative importance of the factors which are determinative of the existence of a relevant relationship of proximity vary in different categories of case: see, e.g., Jaensch v. Coffey (1984) 155 CLR at pp.585; Heyman (1985) 157 CLR at pp.497, 498. It is so with respect to the factor of physical nearness, in the sense of space and time. In the case of an activity which involves a foreseeable risk of causing direct physical injury to those nearby, physical nearness will ordinarily suffice to create a relevant relationship of proximity: see per Lord Esher M.R., Le Lievre v. Gould [1893] 1 Q.B.491 at p.497. On the other hand, it is not necessary for the existence of a relationship of proximity in some other categories of case for there to have been any physical proximity between the parties concerned. Indeed, a relationship of proximity can exist with, and a duty of care can be owed to, a class of persons which includes members who are not yet born or who are identified by some future characteristic or capacity which they do not yet have. ... Cases, such as the present, involving economic damage which is, and was likely to be, sustained by the estate of an immediate party to the relationship provide examples where a relationship of proximity can exist with a person (perhaps unborn) by reason of some future characteristic or capacity which he does not yet have. If, for example, a professional man is in a relationship of proximity with a client which gives rise to a present duty of care to avoid future economic loss of a kind which obviously might be sustained either by the client or by his estate after his death, the relationship of proximity will ordinarily exist with a class which includes both the client, in respect of loss sustained during his life, and his legal personal representative in respect of injury sustained after his death. In such a case, the resultant duty of care will be presently owed both to the client and to the future legal personal representative (in his capacity as such).
The critical factors of the relationship between the testatrix and the firm which gave it the character of a relationship of proximity with respect to economic loss of the kind sustained in the present case are those related elements which lie at the heart of the ordinary relationship between a solicitor and his client, namely, assumption of responsibility and reliance. The solicitor, as a specially qualified person possessing expert knowledge and skill, assumes responsibility for the performance of professional work requiring such knowledge or skill. The client relies upon the solicitor to apply his expert knowledge and skill in the performance of that work. In the ordinary case, the only kind of damage which is likely to result from the negligence of the solicitor in the performance of his professional work is pure economic loss. In that context, the elements of assumption of responsibility and of reliance combine with that of the foreseeability of a real risk of economic loss to give the ordinary relationship between a solicitor and his client the character of one of proximity with respect to foreseeable economic loss. The present case fell within that category. It was also a case in which economic loss caused by negligence on the part of the solicitor might clearly be sustained either by the client or by her estate after her death. If the will was lost by the firm during the testatrix's life, she would personally sustain the economic loss comprising legal costs or other expenses involved in the preparation and execution of a new will. On the other hand, an obvious object of the arrangement under which the testatrix's will was entrusted to the custody of the firm was to ensure that it would be available on her death to the named executor to inform him of his nomination by the testatrix as the person appointed to protect and duly administer the assets comprising her estate. The risk of economic loss being sustained by the estate if the named executor remained unaware of his appointment was real and foreseeable. That risk would plainly be compounded if the person named as executor was also, for practical purposes, the sole beneficiary. In these circumstances, the relevant relationship of proximity which existed with respect to economic loss of the kind which was in fact sustained by the estate extended to include both the testatrix and her legal personal representative after her death.
The content of the duty of care in a particular case is governed by the relationship of proximity from which it springs. It may, in some special categories of case, extend to require the taking of positive steps to avoid physical damage or economic loss being sustained by the person or persons to whom the duty is owed. Apart from cases involving the exercise of statutory powers or where the person under the duty has created the risk, the categories of case in which a relationship of proximity gives rise to a duty of care which may, according to circumstances, so extend are, like those in which there is a duty of care to avoid pure economic loss, commonly those involving the related elements of an assumption of responsibility and reliance. The relationship of solicitor and client is, as has been seen, a relationship of proximity which ordinarily involves the combination of those elements with respect to foreseeable loss which may be caused to the client by the performance of professional work. It is a relationship of proximity of a kind which may well give rise to a duty of care on the part of the solicitor which requires the taking of positive steps, beyond the specifically agreed professional task or function, to avoid a real and foreseeable risk of economic loss being sustained by the client. Whether the solicitor-client relationship does give rise to a duty of care requiring the taking of such positive steps will depend upon the nature of the particular professional task or function which is involved and the circumstances of the case. While the present case is certainly a borderline one and I am conscious of the force of the reasoning which has led the Chief Justice and Wilson J. to reach a contrary conclusion, it seems to me that, for the reasons which follow, the solicitors were under a relevant duty to take such positive steps.
... In accepting responsibility for custody of the testatrix's will after her death, the firm effectively assumed the custodianship of the testatrix's testamentary intentions. If the firm simply retained custody of the will without disclosing its existence to anyone at all, those testamentary intentions would obviously be likely to be frustrated - by grant of probate of an earlier will, by grant of letters of administration on the basis that the testatrix had died intestate or by the estate remaining unadministered and the assets being neglected, misused or misappropriated. Those aspects of the relationship between the firm and the testatrix (and Mr. Hawkins, in his capacity as executor) combined with the foreseeability of a risk of damage of the kind sustained to bring the case within a category in which the relationship of proximity was such as to give rise to a duty of care which might, depending upon the circumstances, extend to require some positive action to avoid such damage. ... The relevant question is whether the failure of the firm to take any positive steps at all to locate Mr. Hawkins during a period of more than six years after it became aware of the testatrix's death constituted, as a matter of fact, a breach of the duty of care which the firm, as a matter of law, owed Mr. Hawkins as the testatrix's legal personal representative.
... in failing to take any positive steps at all to locate Mr. Hawkins during the period of more than six years after the death of the testatrix in circumstances where a few phone calls would have sufficed to locate him, the firm failed to discharge the duty of care which it owed him as the executor of her estate. It follows that Mr. Hawkins had a prima facie cause of action in negligence against the firm for the economic damage which the estate sustained by reason of the firm's breach of duty of care which it owed him as executor.
As has been said, the plaintiff's action in negligence was propounded as brought by Mr. Hawkins personally as well as in his capacity as executor. There may well be circumstances in which a failure by a firm of solicitors to communicate the existence or contents of a will in its custody to a person named in it as executor and principal beneficiary would constitute an actionable breach of a duty of care owed under the common law of negligence to that person in his personal capacity as a beneficiary. Circumstances where a failure of a firm of solicitors to disclose the existence of the will caused the assets of the estate to be irretrievably distributed to the next-of-kin or to persons claiming under an earlier will might provide an example of such a case if, upon analysis, it appeared that the estate itself could not properly be said to have directly sustained the relevant damage. In such a case, the assumption of responsibility by the solicitor, the unavoidable dependence for information of the beneficiary and the foreseeability of economic loss to the beneficiary in his personal capacity, could well combine to give rise to a relevant duty of care owed directly to the beneficiary. The present is not, however, such a case. The damage which it is sought to recover in the present case (i.e., the economic loss sustained by reason of the deterioration of the house, lost rental and the incurring of the fine for late lodgment of the death duty return) was all directly sustained by the estate before administration had been completed. That being so, any loss or damage sustained by Mr. Hawkins in his personal capacity (i.e. as a beneficiary) was indirect and remote. It consisted of the possibility of a reduction in the ultimate value of his interest in the unadministered estate by reason of the damage which the estate had sustained. ... . The right and the obligation to preserve the assets of the estate pending completion of administration and to bring proceedings for loss or damage sustained by the estate belong to the executor, acting on behalf of the estate, and not to a beneficiary acting directly on
his own behalf."
At pp.591ff, Gaudron J. said:
"In the development of the modern law of negligence the main focus has been on the ascertainment of a duty of care owed by one person to another by reason of a relationship of proximity between them, and the identification of the content of that duty. This development has recognized that an aspect of the duty of care that may arise in relation to another's person or property could involve the requirement that care be exercised in the provision of information: see e.g., Wyong Shire Council v. Shirt (1980) 146 CLR 40. It has also been recognized that a duty of care may arise in relation to a plaintiff's interest where interference with his interest results in economic loss alone, and such a duty may require the exercise of care in the provision of information: Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd (1964) AC 465; Mutual Life & Citizens' Assurance Co. Ltd. v. Evatt (1968) 122 CLR 556; Mutual Life & Citizens' Assurance Co. Ltd v. Evatt (1970) 122 CLR 628; San Sebastian Pty. Ltd. v. The Minister (1986) 162 CLR 340. So too, where a duty of care is owed in relation to another's person or property the duty may require disclosure of information: see, e.g., O'Connor v. Commissioner for Government Transport (1954) 100 CLR 225 at p.229. Where a duty of care is owed and the loss is purely economic, there is no reason in principle why a disclosure of information cannot be required to comply with this duty: see Sutherland Shire Council v. Heyman (1985) 157 CLR 424 at pp.503, 505 per Deane J.; Norwest Refrigeration Services Pty. Ltd v. Bain Dawes (W.A.) Pty. Ltd. (1984) 157 CLR 149. Failure to disclose is simply an omission which, as was pointed out by Gibbs CJ. in Heyman does not necessarily preclude the imposition of liability in negligence.
...
However, there is a special problem when it is sought to recover damages for economic loss by reason of a failure to disclose or volunteer relevant information. That difficulty lies in the importance which has been ascribed to reliance as indicative of a relationship of proximity sufficient to give rise to a duty to exercise care in the giving of information where the damage suffered is economic loss. The problem was identified in the judgment of Gibbs C.J., Mason, Wilson and Dawson JJ. in San Sebastian (1986) 162 CLR at p.355 where it was stated
'The notion of proximity, because it limits the loss that would otherwise be recoverable if foreseeability were used as an exclusive criterion of the duty of care, is of vital importance when the plaintiff's claim is for pure economic loss. When the economic loss results from negligent misstatement, the element of reliance plays a prominent part in the ascertainment of a relationship of proximity between the plaintiff and the defendant, and therefore in the ascertainment of a duty of care. But when the economic loss results from a negligent act or omission outside the realm of negligent misstatement, the element of reliance may not be present. It is in this sphere that the absence of reliance as a factor creates an additional difficulty in deciding whether a sufficient relationship of proximity exists to enable a plaintiff to recover economic loss.'

It may be that in a particular context failure to disclose some matter where other information is being imparted brings about a situation, foreseeable by the information giver, which amounts to the recipient treating that non-disclosure as a statement of some relevant fact. Shaddock Associates Pty. Ltd. v. Parramatta City Council [No. 1] (1981) 150 CLR 225 was such a case. In those circumstances reliance may be an appropriate and sufficient test of proximity. There may be other situations in which, although non-disclosure cannot in its context be regarded as equivalent to misstatement, the failure to disclose may give rise to a liability because of the reliance by the injured party upon care being taken to disclose all relevant information in circumstances where the other party ought to know of such reliance, whether or not that other party assumed a responsibility to impart all relevant information. Certainly that must be a possibility if assumption of responsibility and reliance are possible alternatives and not cumulative criteria for the relationship of proximity, as appears to have been accepted by Deane J. in Heyman and in the joint judgment in San Sebastian.
Reliance and assumption of responsibility are not the sole or necessary determinants of proximity. In Heyman Deane J., in whose judgment in Jaensch v. Coffey (1984) 155 CLR 549 the requirement for proximity was forcefully re-asserted, stated that 'both the identity and the relative importance of the factors which are determinative of an issue of proximity are likely to vary in different categories of case.'
I apprehend that the present case is in a different category from the cases of economic loss referable to negligent misstatement or failure to disclose which have hitherto attracted the consideration of this Court. The economic loss sustained by Mr. Hawkins was sustained in conjunction with and in consequence of the impairment of a legal right, namely, his right to exercise the powers of executor inhering in him as named executor of the will of the testatrix. The right was impaired because he did not know that the testatrix had died leaving in the custody of the respondents a will appointing him sole executor.
... It seems to me that where the act or omission complained of amounts to an interference with or impairment of an existing right which is known or ought to be known to the person whose acts or omissions are called into question then the issue of proximity may be open to determination by reference to factors somewhat different from those applicable where economic loss is occasioned without infringement or impairment of an otherwise recognized right. Of course that determination must be undertaken in accordance with the processes of legal reasoning and not divorced from consideration of what is fair and reasonable or from considerations of public policy relevant to the requirement of proximity: Heyman (1985) 157 CLR at p.498 per Deane J.; Stevens v. Brodribb Sawmilling Co. Pty. Ltd. (1986) 160 CLR 16 at p.52, per Deane J. However, it may be that the factors which I would regard as determinative of the issue of proximity in the present case are not materially different from those applicable where a duty is asserted in relation to the provision of information as the basis of an entitlement to recover damages for economic loss.
It is now accepted that liability for negligent misstatement causing economic loss involves application of the general principles of negligence: San Sebastian (1986) 162 CLR at pp.354-355, in the joint judgment; Heyman (1985) 157 CLR at p.502, per Deane J.; Cook v. Cook (1986) 162 CLR 376 at p.382. The basis of that liability is the rule expressed in Donoghue v. Stevenson [1932] A.C. 562 at p.580 that a person 'must take reasonable care to avoid acts or omissions which [he] can reasonably foresee would be likely to injure [his] neighbour'. If the statement of duty is transposed into a statement of right it constitutes an acknowledgment of a right not to be injured by or in consequence of the acts or omissions of one's neighbour in circumstances where the injury is reasonably foreseeable by that neighbour. It must be emphasized that it is the relationship of neighbour which is critical to the existence of a right not to be injured by or in consequence of the acts or omissions of another for reasonable foreseeability alone does not necessarily result in the imposition of a duty of care: Heyman {1985) 157 CLR at pp.466-467, 477-479; San Sebastian (1986) 162 CLR at p.355; Cook v. Cook (1986) 162 CLR at p. 382. Whilst the relationship of neighbour remains constant as between the person who owes and the person who is owed a duty of care, the criterion of the existence of that relationship is necessarily different depending on whether it is identified from the perspective of the person against whom a duty of care is asserted or from the perspective of the person who asserts a right which has been infringed.
The Donoghue v. Stevenson test of neighbour - 'persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question' - is formulated from the perspective of the person against whom a duty is asserted. Reliance, as a criterion of proximity, is a factor which is primarily relevant when the question of proximity is approached from the perspective of the injured party. However, reliance as a criterion of proximity viewed from the perspective of the injured party is by no means co-extensive with the test of neighbour formulated in Donoghue v. Stevenson from the perspective of the person who owes a duty of care. A more approximate formulation, in the context of economic loss, may be that of a person whom the injured party might reasonably expect would have his interests and the likelihood of injury to those interests in contemplation when directing attention to the acts or omissions called in question.
...
It seems to me that reliance, as a criterion of proximity, presented itself in cases concerned with the provision of information by reason that ensuing damage was consequential, not upon the provision of the information, but upon reliance on that information as the basis for action or inaction: see San Sebastian (1986) 162 CLR at p.353. Although the duty of care has come to be expressed in terms of the exercise of care in the giving of information and the breach has come to be expressed in terms of negligent misstatement, the duty which is asserted is, in essence, a duty to exercise reasonable care to give reliable information, information on which the other might rely as the basis for making an informed decision. If the duty is so identified then it seems to me that the relevant factor of proximity in the circumstances identified in the passage quoted from San Sebastian may be stated in terms of reasonable expectation, a concept which is more readily applicable to omissions than is the concept of reliance. Thus a relationship of proximity may be constituted by the reasonable expectation of a person (including a reasonable expectation that would arise if he turned his mind to the subject) that the other person will provide relevant information or give reliable information, if that expectation is known or ought reasonably to be known by the person against whom the duty is asserted. Of course, the foreseeability of the risk of injury is necessarily relevant to a consideration of the reasonableness of expectation.
Whether or not reasonable expectation (including in that concept one which would arise if the injured party turned his mind to the matter) is a suitable criterion of proximity in all cases where a duty is asserted in relation to the provision of information, it is one which I would adopt as appropriate where the information is necessary for the exercise or enjoyment of a legal right and the person against whom the duty is asserted knows or ought to know of that right and the necessity for the information before the right can be exercised or enjoyed. In the postulated circumstances a person entitled to the right might, if he turned his mind to the matter, reasonably expect that another, knowing that he is in a position to control (whether by possession of information or possession of some physical object) the exercise or enjoyment of that right in circumstances such that loss may ensue if the right is not exercised or its enjoyment is impaired, would take reasonable steps to inform him of the fact of that possession, especially if the provision of that information involves no risk of prejudice to any right or other duty inhering in the person possessed of the information or object. A person thus in a position of control ought to know that such expectation would arise. Put in conventional terms, a person in that position of control ought to have the other in contemplation as one affected by his failure to disclose the information when directing his mind to failure to give that information.
...
... in determining whether a person has a duty to volunteer information exclusivity of possession of that information is a matter of great significance. Particularly is this so in determining whether a person is in a position to control the exercise or enjoyment of a right by withholding information. However, there may be situations in which exclusivity of information is not essential to the existence of a duty of care.
...
... A person in the position of Mr. Hawkins might, if he turned his mind to the matter, reasonably expect that persons in the position of the respondents would take reasonable steps to inform him that they had possession of the will appointing him executor, and the respondents ought to have known that such expectation might arise.
Accordingly, in my view, by the end of February 1975, when the respondents had failed to locate a subsequent will, they came under a duty of care to take reasonable steps to inform Mr. Hawkins that they were in possession of the last will and testament of Mrs. Brasier by which Mr. Hawkins was appointed the sole executor of her estate. This they failed to do."

Many of the negligence cases dealing with pure economic loss have been concerned with inaccurate statements or omission to disclose information, and the judicial dicta relating to reliance or dependence must be taken in those contexts. The materiality of reliance in those cases is that it is not the statement or silence which causes the damage but reliance on that information or silence for action or inaction which results in damage. The point is made in the joint judgment of Gibbs C.J., Mason, Wilson and Dawson JJ. in San Sebastian in the passage at p. 355 cited in Hawkins by Deane J. at p.576 and by Gaudron J. at p.593. Further, in their joint judgment in San Sebastian, Gibbs CJ, Mason, Wilson and Dawson JJ. had earlier said at p.353:

"There is a special problem in defining the circumstances in which a duty of care arises in the context of statements. One facet of this problem is that it is more difficult to apply the standard of reasonable foreseeability to the consequences which flow from the making of a statement that it is to apply that standard to the consequences which flow from acts. This is because damage flows, not immediately from the defendant's act in making the statement, but from the plaintiff's reliance on the statement and his action or inaction which produces consequential loss."

If it were necessary to approach the present case by reference to reliance, I would conclude that a person who knew that he or she was named as a beneficiary under a will which a solicitor had prepared and arranged to have executed should be taken to have relied or depended on the solicitor's professional competence for which the solicitor had assumed responsibility. That would be sufficient to dispose of the present case, although the evidence is scanty.

It would be also possible to decide this case in favour of the respondent on the basis proposed by Gaudron J. in Hawkins; namely, that the respondent's damage was sustained in conjunction with a legal right not to be injured by or in consequence of the incompetence of the appellant whom the respondent might reasonably have expected would have her interests and the likelihood of injury to those interests in contemplation when directing attention to the preparation and execution of the will.

However, the respondent is entitled to succeed on a broader basis.

It is convenient to take once more part of the passage quoted above from San Sebastian at p. 355. Their Honours said:

"... The notion of proximity, because it limits the loss that would otherwise be recoverable if foreseeability were used as an exclusive criterion of the duty of care, is of vital importance when the plaintiff's claim is for pure economic loss."

Material considerations had earlier been referred to at p.
354:

"... The recovery of economic loss has traditionally excited an apprehension that it will give rise to indeterminate liability. And there is also an apprehension that the application of the standard of reasonable foreseeability may allow recovery of economic loss of such magnitude and in such circumstances as to provoke doubts about the justice of imposing liability for it on the defendant."

As earlier noted, in Gala the majority judgment said at p.
253:

"... In determining where the requirement [or proximity] is satisfied in a particular category of case in a developing area of the law of negligence, the relevant factors will include policy considerations."