Hill (ta R.F. Hill and Associates) v Van Erp

The High Court of Australia considered an appeal by R.F. Hill and Associates (the appellant) against a judgment of the Supreme Court of Queensland. The dispute arose from a claim by Ms. Van Erp (the respondent) for damages for breach of contract and negligence. Ms. Van Erp alleged that the appellant, a solicitor, had negligently failed to ensure that a power of attorney she had granted to her solicitor was validly executed, which subsequently caused her loss when the power of attorney was found to be invalid.

The central legal issue before the High Court was whether a solicitor owes a duty of care to a third party who is intended to benefit from the solicitor's retainer, even if that third party is not the solicitor's client. Specifically, the court had to determine if Ms. Van Erp, as the intended beneficiary of the power of attorney, could sue the solicitor for negligence when the document was not properly executed, thereby causing her financial detriment.

The High Court, by majority, held that a solicitor can owe a duty of care to a third party in circumstances where the solicitor knows or ought reasonably to know that the third party will rely on the solicitor's skill and care, and that the third party is likely to suffer harm if that reliance is misplaced. The court reasoned that the solicitor's undertaking to prepare a valid document for the benefit of a known third party creates a sufficient proximity to establish a duty of care. This duty arises independently of any contractual relationship between the solicitor and the third party, and is based on the principles of negligence established in cases such as *Donoghue v Stevenson*. The court found that the appellant had breached this duty of care owed to Ms. Van Erp.

The High Court dismissed the appeal, upholding the decision of the Supreme Court of Queensland.