Schofield & Ors v Watts
[1999] QDC 258
•5 October 1999
DISTRICT COURT OF QUEENSLAND
[Schofield & Ors v Watts]
REGISTRY: ROCKHAMPTON
NUMBER: 11 OF 1998
Plaintiffs:
WILLIAM DOUGLAS SCHOFIELD, LYNN MARY GRAHAM,
ELSIE HANSEN and ALICE ROFE
AND
Defendant:
PAUL VIVIAN WATTS
JUDGMENT - SAMIOS D.C.J.
Judgment Delivered: 5 October 1999
Catchwords: PROFESSIONAL NEGLIGENCE - duty of care owed to intended beneficiaries - breach of duty of care by solicitor when taking instructions for preparation of will - damages for loss of opportunity
Hill v. Van Erp (1996-1997) 188 CLR 159
Midland Bank Trust Co Limited v. Hett Stubbs Kemp (1979) Ch. 384, 402-403 per Oliver J
Queensland Art Gallery Board of Trustees v. Henderson Trout (A Firm) 92/1750 Supreme Court Bne, Chesterman J, 98.11.10.
Sellars v. Adelaide Petroleum NL (1992-1994) 179 CLR 332
Counsel for the Plaintiff: Mr. G. Mullins
Counsel for the Defendant: Mr. D. Clothier
Solicitors for the Plaintiffs: Messrs Colin Fleming & Co
Solicitors for the Defendant: Messrs Grant & Simpson
Hearing Dates: 1 and 2 September 1999
DISTRICT COURT OF QUEENSLAND
REGISTRY: ROCKHAMPTON
NUMBER: 11 OF 1998
Plaintiffs:
WILLIAM DOUGLAS SCHOFIELD, LYNN MARY GRAHAM,
ELSIE HANSEN and ALICE ROFEAND
Defendant:
PAUL VIVIAN WATTS
JUDGMENT - SAMIOS D.C.J.
Delivered the 5th day of October 1999
The defendant was a solicitor practising under the name of Paul Watts & Associates at Yeppoon. In February 1992, the defendant employed Joanne Madden as a solicitor in his practice. On 12 February 1992, Ms. Madden, on behalf of the defendant, received instructions from Alfred Leslie Schofield (the testator) to prepare and effect the execution of a will on his behalf. After receiving those instructions from the testator Ms. Madden prepared a will. This will was executed by the testator in the presence of Ms. Madden and another witness on 13 February 1992. The testator died on 17 March 1992.
The will executed by the testator on 13 February 1992 (the Will) left all of his estate, both real and personal, to executors upon the following trusts:
to pay all of his just debts, funeral and testamentary expenses;
to apply the income of the rest and residue of his estate towards the maintenance and support of his wife, Violet Mary Schofield (the testator’s wife), for her lifetime;
upon the death of his wife to make certain pecuniary bequests totalling $22,000;
as to the rest and residue of his estate, to his brothers, William Douglas Schofield and Ernest Schofield, and his sisters, Elsie Hansen and Alice Rofe as survived him and if more than one then equally.
There is no dispute between the parties and I find on the evidence between when the testator gave instructions to Ms. Madden for the preparation of the Will, and until the testator’s death, the testator’s assets comprised:
bank accounts held jointly with his wife containing balances in the order of $48,000;
land and improvements situated at 17 Dolphin Crescent, Yeppoon (the house) held by the testator and his wife as joint tenants.
Again, there is no dispute between the parties, and as a matter of law, as a consequence of the death of the testator and the rules of survivorship, upon the testator’s death the testator’s interest in the bank accounts and in the house passed to his wife.
One of the testator’s brothers, Ernest Schofield, passed away on 27 July 1998, and his daughter, Lynn Mary Graham, was named as his executor and trustee under his last Will dated 14 January 1998. The testator’s brothers and sisters to whom the rest and residue of his estate was left pursuant to the terms of the Will (the plaintiffs), commenced this proceeding against the defendant alleging that they had suffered loss and damage due to the negligence of Ms. Madden. On 26 August 1999, I ordered that Lynn Mary Graham be substituted in lieu of Ernest Schofield in this proceeding.
The plaintiffs allege that the testator instructed Ms. Madden that he wished to leave all of the income of his estate during his lifetime to his wife and, upon her death, to leave specific bequests amounting to $22,000 to certain named persons, and to leave the balance of his estate to the plaintiffs . For the testator to have had any estate that could pass to the plaintiffs upon his death steps would have to have been taken before his death to alter his joint ownership with his wife of the bank accounts and to sever the joint tenancy in the house. The plaintiffs allege Ms. Madden owed a duty of care to them which she breached by failing to take all steps as were necessary to give effect to the testator’s instructions, and in particular to ensure that the bequests of the testator in favour of the plaintiffs were effective. The manner in which this duty was breached is alleged to have been:
by failing to take any, or any proper steps to ascertain the nature of the testator’s assets and the manner in which they were held;
by failing to advise the testator that to effect his intentions in the Will he needed to sever the joint tenancy and create a tenancy in common and transfer one half of the funds contained in the bank account to a separate account in his name;
by failing to fully and completely advise the testator as to the efficacy and cost of severing the joint tenancy and transferring the funds in the bank account so that he could make a full and informed decision as to the efficient and best method of effecting his intentions as contained in his Will.
Evidence before me assessed the market value of the house at 2 November 1996 at $85,000. 2 November 1996 is the date on which the testator’s wife died. The parties agreed during the hearing of this proceeding that if the plaintiffs were successful the quantum of the claim should be $41,037.50 with interest at $11.24 per day from 2 November 1996.
That is, the plaintiffs claim that as Ms. Madden breached the duty of care owed to the plaintiffs the plaintiffs suffered loss and damage to the extent of one half of the value of the house. The parties agreed that the total of the joint bank accounts was almost $50,000 and therefore would have been sufficient to meet the legacies provided for by the Will.
Counsel for the plaintiffs at the end of the hearing submitted that the plaintiffs’ damages could be assessed on a lost opportunity basis: (Sellars v. Adelaide Petroleum NL (1992-1994) 179 CLR 332). Counsel for the defendant objected to this submission. He submitted such a claim had not been pleaded and the defendant was prejudiced as the defendant had not conducted his case on that basis. I directed further submissions to be delivered by the parties on this point which I have received and have considered.
Counsel for the defendant referred me to authorities and to r.155 of the Uniform Civil Procedure Rules in support of his submission. I accept that a party who claims damages for loss of an opportunity or chance should say so in a pleading. As the plaintiffs did plead that in the premises, the plaintiffs have suffered loss and damage to the extent (my underlining) of one-half of the value of the house, I consider the defendant was on notice that he had to meet a case of damages being sought on some basis at least and on the facts alleged the most likely basis was either the sum of $41,037.50 or some lesser sum for a loss of opportunity to benefit from the testator’s Will.
As counsel for the plaintiffs submitted, it would be a very confident defendant who would run at trial his “second best” case on the basis that the standard of proof was potentially different. I accept the plaintiffs could have, and to avoid any doubt, should have, used more explicit words in the pleading. However, the case I consider was conducted by both parties on the basis of testing the proposition of what were the plaintiff’s prospects of benefiting under the Will. The options to achieve the testator’s alleged intentions, namely the testator and his wife signing a transfer to sever the joint tenancy or the Public Trustee intervening to manage her estate and severing the joint tenancy were the subject of the expert reports and evidence in the course of the trial. If it were necessary to plead the words “loss of opportunity” in the pleading, I would, for the same reasons, relieve the plaintiffs of that omission pursuant to rule 371 of the Uniform Civil Procedure Rules.
In support of the plaintiffs claim, Stella Ivory Schofield (Mrs. Schofield) gave evidence. Mrs. Schofield is married to the first named plaintiff, William Douglas Schofield, and was therefore the testator’s sister-in-law. She is now 81 years of age. Her evidence was that she had known the testator’s wife for many years and was very close to the testator and his wife. The testator and his wife did not have any children. In early 1991, the testator was diagnosed with bowel cancer and was hospitalised. On one visit to the testator in about July 1991, the testator told Mrs Schofield he did not have a Will and asked Mrs Schofield if she would ring the Public Curator and make arrangements for them to go to the hospital so he could make a Will. Mrs. Schofield did that. This led to a Will, a copy of which was produced in evidence and which was executed by the testator on 1 July 1991 (the 1991 Will). The 1991 Will appointed the Public Trustee of Queensland as executor and trustee and gave all the testator’s estate to his wife. The 1991 Will provided that if that gift did not take effect, then he gave all his estate by way of pecuniary legacies to his brothers and sisters and a nephew and friend and the rest and residue to the plaintiffs. Mrs. Schofield said before the testator made the 1991 Will he told her that he did not know what he was going to do as he had no family and he offered his assets to Mrs. Schofield and her husband. This offer was declined, however, Mrs. Schofield suggested to the testator that he had brothers and sisters amongst whom he could divide his assets. Regarding the testator’s wife, Mrs. Schofield said the testator asked Mrs. Schofield to look after his wife. The testator’s wife was suffering from Alzheimers disease and needed a lot of assistance. Mrs. Schofield provided that assistance to the testator’s wife. Mrs. Schofield also provided assistance to the testator in various ways. A copy of the 1991 Will was given by the testator to Mrs. Schofield. Mrs. Schofield said after the testator left hospital, he went home and stayed with his wife. Thereafter he was hospitalised again. In early 1992 at the Yeppoon Hospital, the testator expressed to Mrs Schofield his worry about his Will and his assets. He asked Mrs Schofield to ring the Public Curator and ask the Public Curator to come down again as he wanted to talk to him. Included in the testator’s worry was whether his wife was going to be looked after, after he died. The testator told Mrs Schofield that with respect to his assets he wanted everything to go to his wife while she lived, then after she died he wanted his assets to go to the plaintiffs. The Public Trustee apparently was too busy to attend. A document came into existence headed “amendment to my Will” which I will refer to hereafter as “the amendment”. Mrs Schofield said that the testator wanted it to be clear that his wife be given everything while she lived, and after he died he wanted it to go to the plaintiffs. Mrs Schofield said that the testator dictated the contents of the amendment which Mrs Schofield wrote out at the direction of the testator. Mrs Schofield said she invited the matron of the hospital to come in and be a witness to this document. Mrs Schofield’s evidence was that the matron heard the testator tell Mrs Schofield what to write, and then the matron witnessed the testator’s signature. The matron was one Lorraine Antonello. The text of the amendment is as follows:
“Amendment to my will
I give all my estate to my wife Violet Mary Schofield.
while she lives. Then I give all my estate as follows
House and contents to be sold and divided asstated in my will dated 1-7-91.”
Mrs Schofield said these events occurred on 6 February 1992. Mrs Schofield said that after the amendment came into existence Mrs Schofield spoke to a Dr. John Lloyd by telephone. Mrs Schofield said that Dr. Lloyd said that he had spoken to the testator about whether the testator had a Will and that the testator had responded he had a Will with the Public Curator and Dr. Lloyd said that he had told the testator he did not like the Public Curator and that he would like to get a solicitor to which Mrs Schofield did not object. Mrs Schofield said that Dr. Lloyd phoned her back and said that a solicitor was going to be there and for Mrs Schofield to be at the hospital at 9 o’clock the next morning which was 12 February 1992.
Mrs Schofield’s evidence was that Ms. Madden arrived. Ms. Madden introduced herself. Mrs Schofield was not asked to leave the room. Mrs Schofield handed to Ms. Madden the 1991 Will and gave Ms. Madden the amendment. The testator told Ms. Madden that he wanted his Will fixed up so that when he died there was nothing that his wife had to do because she was not capable with her Alzheimers disease and that he wanted her to have his estate for the rest of her life, and after his wife died his assets were to go to the plaintiffs. The testator wanted Mrs Schofield to be a trustee of the Will. Although in answer to the question whether a copy of the 1991 Will was ever referred to by Ms. Madden at that stage, Mrs Schofield replied “Never”. She added: “Oh, yes, she read it through and we told her that one of the sisters had died. I don’t know whether I told her or whether Alf told her that Lizzie that passed away”. Mrs. Schofield’s evidence was that Ms. Madden read through the 1991 Will. When asked whether she could remember Ms. Madden making any notations on the Will, Mrs Schofield replied: “No, I can’t remember that”. Mrs Schofield said Dr. Lloyd came in to the testator’s room at the hospital and Mrs Schofield suggested to the testator that Dr. Lloyd be made an executor to which Dr. Lloyd agreed and which was approved of by the testator. Regarding whether there had been any discussion about joint tenancies or tenancies in common during this meeting, Mrs Schofield replied “No, nothing. She didn’t explain anything to him at all”. According to Mrs. Schofield, Ms. Madden was in the room for no more than 15 minutes. Regarding the testator’s brothers and sisters, Mrs Schofield’s said that they helped the testator and his wife and they all did it as a family. After the testator died, Mrs Schofield cared for the testator’s wife right up until June 1996 when Mrs Schofield went to Perth, and while she was away, a nephew of the testator’s wife commenced to look after the testator’s wife.
Regarding the amendment, it was put to Mrs Schofield in cross-examination that the amendment was written out prior to it being witnessed by the matron. Further, it was put to Mrs Schofield that Mrs Schofield was not present when the matron signed it. Mrs Schofield denied these suggestions. The matron, Mrs. Antonello, was not called by either party. There was no suggestion made during the hearing that Mrs. Antonello could not have been called to give evidence. I consider that as counsel for the defendant made those suggestions to Mrs Schofield it was incumbent upon the defendant to call Mrs. Antonello or explain her absence. The failure to do so, in my view, must lead to the inference that Mrs. Antonello would not have been favourable to the defendant with respect to Mrs Schofield’s evidence about the dictation of the amendment by the testator in the presence of Mrs. Antonello, and Mrs. Antonello’s witnessing of the document after the testator had signed it. I consider this aspect of the proceeding lends support for Mrs Schofield’s credit as her evidence was in conflict with the evidence of Ms. Madden who did give evidence, and whose statement was also tendered as an exhibit.
In the course of cross-examination, Mrs Schofield was challenged regarding the reliability of her recollections of these events. She agreed that there was about a three year period intervening between these events and when she was required to turn her mind back to what happened. She readily agreed that people’s memories become a little faded and a little merged after such a lengthy period of time. Mrs Schofield rejected the suggestion that her memory in relation to these events on the relevant day was a little faded and a little merged and said that she could remember it as plain as yesterday. Mrs Schofield did say in cross-examination that Ms. Madden did tick some of the provisions in the 1991 Will while she was there in the room with the testator, although Mrs Schofield did not know what was actually ticked. Mrs Schofield denied in cross-examination that Ms. Madden went through each item in the 1991 Will with the testator. Although it is obvious on the face of the copy of the 1991 Will which was provided by Mrs Schofield to Ms. Madden that Ms. Madden has ticked off the items in para. 5 and has recorded Mrs Schofield’s correct name and that the sister, Elizabeth Hansen, had passed away, I do not accept that Mrs Schofield’s denial that Ms. Madden went through each item with the testator affects her credit. It may well be that the testator was asked a question by Ms. Madden to the effect whether he wanted the pecuniary legacies to remain the same which may have then led to the ticking of all the items. Further, Mrs. Schofield did not deny Mrs. Schofield’s correct name was provided and that Ms. Madden was told that the sister, Elizabeth Hansen, had died. It was submitted by counsel for the defendant that these matters showed Mrs Schofield was not a reliable witness. However, as I have said, I do not accept that Mrs Schofield’s answers in cross-examination bears out the criticism by the defendant of Mrs Schofield’s reliability.
At this point I should also deal with another criticism of Mrs Schofield. That is that she claimed that Ms. Madden was to prepare powers of attorney, and that Ms. Madden had not performed her task in that regard. When asked in evidence in chief whether the power of attorney ever arrived, Mrs Schofield said that it had never arrived. Mrs Schofield was taken to a letter from the defendant’s file addressed to Mrs Schofield and dated 2 April 1992. In the body of this letter is a statement confirming that the defendant had prepared a power of attorney appointing both Mrs Schofield and Dr. Lloyd the attorneys for the testator’s wife. This letter goes on to say:
“We would be pleased if you she could attend at our office sometime in the near future to sign the above document.”
This letter also requested that Mrs Schofield provide a list of assets held in the name of the testator. There appears in the file a note dated 10 April 1992 detailing the testator’s assets. Therefore, it was suggested that Mrs Schofield who denied receiving this letter must have received the letter to have provided this list of assets. Mrs Schofield said in evidence that she could have, in conversation with Ms. Madden, given Ms. Madden this information, but she did not remember telling Ms. Madden. I do not accept that it necessarily follows that just because there is a list of assets in the defendant’s file that Mrs Schofield did receive the letter dated 2 April 1992. No record was produced from the solicitor’s office, or explanation given that there was no such record kept, showing the despatch of mail from the defendant’s office. Although a copy of powers of attorney are in the file, it was not suggested to Mrs Schofield that she did attend at the defendant’s office to sign any document giving her a power of attorney for the testator’s wife. Indeed, no power of attorney executed by Mrs Schofield was produced which could affect Mrs Schofield’s credit. Further, Mrs. Schofield said in re-examination she thought she was to be power of attorney for both the testator and his wife. I consider the mere presence in the file of copies of powers of attorney being prepared for the testator’s wife does not contradict Mrs Schofield’s evidence that she did not receive that letter and that as far as she was concerned a power of attorney was not prepared as she understood it would be for the testator and his wife.
However, Mrs Schofield, who said she was present during the meeting between Ms. Madden and the testator, denied that Ms. Madden explained matters relevant to joint tenancy and tenancy in common, and in her evidence used emphatic expressions such as:
“No, she never, never said anything.”
“No, she didn’t explain anything like that at all”
“No, she didn’t tell him anything”.
Ms. Madden gave evidence and said, consistent with her practice, she asked all persons to leave the room so that she could be alone with the testator when she took instructions for the preparation of the Will. According to Ms. Madden, everyone did leave the room except for Ms. Madden and the testator. Ms. Madden said the testator at the beginning said he wanted to change the executors, that the Public Trustee was the executor on the Will he had and he nominated Dr. Lloyd as his executor. Ms. Madden suggested to the testator that it might be appropriate for him to appoint a family member as an executor as well and the testator then suggested Mrs Schofield. According to Ms. Madden, it was the testator who gave her Mrs. Schofield’s correct name whereas Mrs. Schofield had said in evidence she was pretty sure she gave her correct name to Ms. Madden. However, regarding the amendment, Ms. Madden said she did not have an independent recollection of how that came into her possession. Ms. Madden acknowledged that on the back of the amendment there appears writing in her hand. In her handwriting on the back of the amendment is the full name of Dr. Lloyd, and with respect to Mrs Schofield who was known as “Peggy”, that is crossed out and then her full name written with the description “sister in law” and then a phone number and then her address. Ms. Madden said this information was given to her by the testator. Ms. Madden said that the testator wanted his wife to have the house and she inquired whether his wife was on the title deed. He responded in the affirmative and Ms. Madden asked him how they held the title and she then explained to him the two methods that a person could hold property, namely joint tenancy or tenants in common. She further explained to him that with a joint tenancy both parties hold the whole of the property in its entirety and that if one dies, then the other person continues on holding the whole property and it will not form part of the estate. She told the testator that in the event of his death then his wife would have the house. It would transfer to her and it would not form part of his estate. Ms. Madden also explained tenants in common was where parties held the property in specific proportions, either a half or three quarters and that a person would then need to leave their interest in that property specifically in a Will and they would need to mention it. Ms. Madden said the testator raised life estates or life tenancies. That is, he asked her what was a life tenancy and she explained to him that one could create a life tenancy over property that you owned and that you could impose conditions or no conditions and that life tenancy could cease upon the death of a person and then the property would go to someone else, or it may be upon them leaving the property. Ms. Madden said she also told the testator one could impose conditions to their continuing use of that property. Ms. Madden then was asked this series of questions and gave these answers:
“Can you tell me what he told you he wanted to happen to the house?-- We had a discussion about how you could hold the property and then I - to seek clarity from him, said well, we’d - we’d get a title search and he said “Yes”. And I said to him, “Well, if I get a title search and I find that you’re joint tenants, what am I to do?” And he replied, “That means it would go to Vi and you do nothing” and I said, “Yes”. And then I said, “If I find you hold it as tenants in common, what am I to do” and his words were, “I want it to be Vi’s”. “I’ll leave it to Vi”. But at no stage did he mention a life tenancy at that time.
All right, or at any time did he mention life tenancy?-- Only when we had those general discussions. Then later on when he said that he wanted Vi to have the money and then for her life time and then it was to go to his brothers and sisters but that was the major discussion.
Alright. Was there any other discussion as best you can recall in relation to the house?-- No, I - I took then, my instructions to be quite clear from him, that he - as to what I was to do with the house. If it was a joint tenancy I was to do nothing. If it was a tenants in common I was to leave his interest in the property to his wife.”
Then regarding what the testator wanted to happen to the rest of his estate, Ms. Madden said that the testator wanted his wife to have it for her life, and then to go to his brothers and sisters. Ms. Madden said that she asked the testator if he had sufficient money to cover the specific bequests to which he replied in the affirmative. Ms. Madden said that Dr. Lloyd did not come into the room at any time during that meeting.
Ms. Madden’s evidence was that a draft of the Will was prepared and when she had satisfied herself that it followed the instructions she had been given by the testator she had the original engrossed and then went with an employee from her office to the hospital on 13 February 1992 to have the testator execute the Will. She said that again on this occasion she asked everyone to leave the room which they did. Her evidence was that she explained to the testator that she had done the title search and found out that the property was held in joint tenancy and said that meant the house would go to his wife and not form part of the estate. She said the testator replied: “Yes, that’s want I want” and she then gave him the Will to read. As he was obviously experiencing some difficulties in reading it, Ms. Madden asked him if he wanted her to read it to him which he did, and when she finished reading it she asked him did he understand what she had read and he replied in the affirmative. Ms. Madden then asked him was there anything he wanted explained and he replied in the negative and he then signed the Will and then Ms. Madden and the employee from her office witnessed his signature. Ms. Madden then left and it was then that Dr. Lloyd entered the room with the testator’s wife and Mrs Schofield.
As far as Ms. Madden was concerned, the Will reflected her instructions provided to her by the testator. However, as events have turned out she acknowledged in cross-examination there were no assets to distribute. Further, during cross-examination, Ms. Madden acknowledged that she must have had the amendment given to her at the first visit to the hospital but she did not recall it and therefore could not say when she read it, but was quite sure she would not have ignored it. She conceded having read it in the witness box that the amendment was clear and that the testator wanted to give his wife a life tenancy and that he wanted either his share or the remainder of the house in its entirety to go to his family after his wife’s death. Further, that faced with the 1991 Will and the amendment, if she were given instructions to draw a Will based upon those two written documents, she would create a life tenancy and then dispose of it as the testator said and that she would tell him that he could not do that with a joint tenancy and that he would have to have it severed or have his wife transfer her interest to him. Not only did Ms. Madden have no recollection of the amendment, she gave no evidence that she discussed the amendment with the testator at any time. As to the suggestion that was inconsistent with what Ms. Madden claimed were the testator’s instructions, and that it was likely in those circumstances that she would raise that with him, Ms. Madden replied that the life tenancy was discussed and that she could only presume that in light of that amendment and her understanding at the time was that when they got down to what he wanted to happen with the house, that there was to be no life tenancy. Ms. Madden confirmed again that she had no recollection of any discussion about the amendment, nor the amendment. However, she acknowledged that the Will was inconsistent with the amendment.
Ms. Madden’s evidence was that a search was conducted of the title immediately after she received the testator’s instructions. The result of that search which shows the house was held as joints tenants is in the file and does confirm the search was conducted on 12 February 1992, being the date of Ms. Madden’s first visit to the hospital. Therefore, it was submitted by counsel for the defendant that the title search is objective evidence in support of Ms. Madden’s evidence. That is, as there was such a search conducted, and as the Will is contrary to the amendment, and the Will does provide in para. 2(b) thereof for a life interest of the income of the rest and residue of the testator’s estate, (which would exclude the house) joint tenancy of the house and life interest issues must have been discussed by Ms. Madden with the testator. Therefore, it was submitted I ought to reject Mrs Schofield’s evidence and accept the evidence of Ms. Madden.
Although I am prepared to accept there was some discussion between the testator and Ms. Madden on 12 February 1992, regarding joint tenancy of the house and the concept of life interest, I do not accept that the conversations Ms. Madden had with the testator either when she took instructions for the Will or when she returned to have the testator execute the Will were as claimed by Ms. Madden in her evidence and in her statement (Exhibit 10). With that exception, I prefer the evidence of Mrs Schofield to that of Ms. Madden. This is because:
the respects in which Mrs Schofield’s evidence was criticised which I have dealt with above are not matters that I consider affect Mrs Schofield’s credit;
Mrs Schofield’s credit and her reliability I consider are supported by the inference I draw against the defendant because Mrs. Antonello was not called by the defendant or her absence explained, particularly as matters were put to Mrs Schofield which she denied;
Ms. Madden had no recollection of the amendment nor discussing the amendment with the testator which I consider, in the circumstances, is remarkable. I accept a person could completely forget something. However, I consider a solicitor giving proper attention to the task at hand is likely to have recognised the amendment as a significant document and that the testator’s oral instructions were contrary to it. Ms. Madden acknowledged the Will she prepared was contrary to the amendment and accepted her writing was on the back of the amendment. In these circumstances to not recollect the amendment or any discussion about it does not give me confidence in the evidence of Ms. Madden, especially when one has regard to the detail Ms. Madden claims to recall, yet the amendment is something she does not recall.
Although the language used in the amendment appears to have had some input from someone having some experience in the practice of law, there is no evidence before me that was so. Nevertheless, I consider that the circumstances in which the amendment came about reflects the testator’s solemn intentions. I am not prepared to accept his intention changed at any time after the amendment was dictated by him, signed by him and witnessed by the matron, Mrs. Antonello. When the testator dictated the amendment he had a terminal illness. There was urgency to prepare a will. His 1991 Will left everything to his wife. Even in that Will he wanted to benefit his brothers and sisters, including the plaintiffs, should his wife not survive him. He was concerned that his wife be looked after, after his death. Mrs. Schofield and other members of his family were already looking after his wife and the testator. Dr. Lloyd acknowledged in his evidence his intentions which he discussed with the testator was to keep the testator’s wife in the house for as long as possible;
Ms. Madden claimed in evidence that in her discussions with the testator on 12 February 1992, the testator claimed that Mrs Schofield and his wife did not get on. I do not accept that the testator would have said this as I do not consider if those were the true circumstances between Mrs Schofield and his wife according to the testator he would then have nominated as Ms. Madden claimed Mrs Schofield to be one of the executors for his Will. This is particularly so when according to Ms. Madden the testator nominated in the first instance Dr. Lloyd, and only at her suggestion that there be another family member did Ms. Madden claim that the testator nominated Mrs Schofield. It should be noted that Mrs Schofield was a person in whom the testator had reposed confidence to make arrangements for the preparation of his 1991 Will and left a copy with Mrs Schofield. Mrs Schofield was able to produce in the witness box the envelope in which the copy of the Will was forwarded to her for her to keep;
Ms. Madden made no inquiry regarding the status of the bank accounts. The testator was leaving $22,000 in legacies and the only question Ms. Madden asked was whether there was sufficient money to meet them, whereas had she asked or made inquiry about the status of the bank accounts, she would have learnt that they were held as joint bank accounts, and unless something was done about them, then the bequests would fail. I consider this is again indicative of Ms. Madden’s failure to properly attend to the task at hand;
although Mrs Schofield was challenged about the accuracy of her memory because of the years that have passed between these events and when she was first required to recall these events, it appeared to me that Ms. Madden only prepared her statement many more years later, and did not appear to have turned her mind specifically to these events until late in 1998 when her statement was prepared.
Dr. Lloyd’s evidence was that in his discussions with the testator the prospect of needing a ready asset which could be sold to be able to buy into a house in a retirement village for the testator’s wife was discussed. Further, the testator wanted to leave his house to his wife and Dr. Lloyd had no idea that the house was to be left to any relatives upon the death of the testator’s wife. It was submitted by counsel for the defendant that the amendment can stand with a change of instructions or a change of mind on the part of the testator, and that change of instructions or change of mind is consistent with the evidence of Dr. Lloyd. For the reasons I have given for why I prefer the evidence of Mrs Schofield as against the evidence of Ms. Madden, except that I accept some limited discussion about joint tenancy of the house and the concept of life interest took place, Dr. Lloyd’s evidence does not persuade me to reject Mrs Schofield’s evidence nor to accept that the testator changed his instructions nor changed his mind contrary to the amendment.
I consider that the testator had in mind when giving instructions to Ms. Madden to make a Will that achieved what the amendment intended to achieve, and in that way show the testator’s gratitude to his family because he envisaged there would be a need for family members to look after his wife in the future. It may well be that Dr. Lloyd was looking into the future when he considered it was possible that an asset may be required to be sold to purchase for the testator’s wife a home in a nursing village. Although it may be argued that possibility could have arisen sooner rather than later, and that could have been in the contemplation of the testator, I do not accept the testator looked at the circumstances in that light. Of course, by intending to leave his interest in the house to the plaintiffs after a life interest to his wife the testator may have reduced the resources from which a home in a nursing village may have been able to be purchased for his wife. Nevertheless, I find it is more likely than not his intention was to benefit the plaintiffs as provided for in the amendment and that remained his intention. Although Ms. Madden may have given the testator some explanation about the effect of a joint tenancy with respect to the house to the effect that if one person dies then the house would go to the other person, I consider the testator could have understood that explanation was consistent with his intention that his wife have a life interest in the house and that upon the death of the testator’s wife, his interest in the house could pass to the plaintiffs.
Although I accept more was discussed between Ms. Madden and the testator than Mrs Schofield’s “nothing”, I consider when giving that evidence along those lines, Mrs Schofield was answering in retrospect in that the Will was contrary to her knowledge of the testator’s intentions as evidenced by the amendment and that nothing was said in the meeting between Ms. Madden and the testator in which Mrs Schofield was present to amount to an alteration of those intentions as Mrs Schofield was concerned. As to that, I consider Mrs Schofield is correct.
That is, I accept the evidence of Mrs Schofield that she remained in the room while Ms. Madden took instructions from the plaintiff. I find Ms. Madden did not advise the testator that upon his death the house would not form part of his estate. I find Ms. Madden did not advise the testator that to give effect to his intentions the joint tenancy of the house would have to be severed. Further, I do not accept the evidence of Ms. Madden of the extent of the conversation with the testator when he executed the Will. Although Ms. Madden may have told him as the house was held as joint tenants the house could go to the testator’s wife on the testator’s death, I consider that could have been understood by the testator as achieving his intentions of leaving his wife a life interest.
Mr. McAdam, a legal officer with the Official Solicitor to the Public Trustee of Queensland in Rockhampton gave evidence that it was highly likely the Public Trustee would have executed a transfer on behalf of Mrs Schofield and sever the joint tenancy without the necessity for an application to the court. He expressed this opinion in a letter that was made an exhibit in these proceedings. In another letter by a different author, namely Mr. Clarkson, official solicitor for the Public Trustee, the point was made that the Public Trustee at Brisbane did not believe it was helpful to speculate about a decision he might have made in a hypothetical scenario set almost 10 years ago. Mr. Clarkson said that the advice contained in his letter should be taken to supercede that contained in Mr. McAdam’s letter. Mr. McAdam said in cross-examination he would defer to the views of Mr. Clarkson. Further, Mr. McAdam said a decision to sever the joint tenancy would not be a local one I took by this Mr. McAdam meant the decision would be made in Brisbane. Further, he agreed in cross examination that in the case of a joint tenancy where upon the death of one of the joint tenants the entire interest would go to the other spouse, it would be in the best interests of the surviving spouse to leave the joint tenancy in place. Notwithstanding these caveats on Mr. McAdam’s opinion expressed in his letter, I consider it was still possible depending on the reasons advanced to the Public Trustee, that the action referred to by Mr. McAdam in his letter may still have been taken. Mr. McAdam’s evidence was that within a week the joint tenancy could have been severed. Mr. Whitney, the expert witness who gave evidence referred to the relatively low costs to achieve the severing of the joint tenancy. That was not disputed.
Expert evidence about the duty of care owed by Ms. Madden and whether that duty was breached by Ms. Madden was given by solicitors, Mr. Whitney and Mr. Mann. Mr. Mann’s opinion contained in his report, Exhibit 11, was for the most part premised upon an acceptance by the court of Ms. Madden’s evidence. As I do not accept for the most part Ms. Madden’s evidence, Mr. Mann’s opinion does not resolve in this proceeding the issue of whether Ms. Madden breached the duty of care owed to the plaintiffs. On the other hand, Mr. Whitney was of the view:
“Ms Madden says she advised Mr. Schofield the house would not form part of his estate, but she does not say or carry on to say that because of that his brothers and sisters would receive no part of it ultimately. In all the circumstances I do not think a competent practitioner would be required to say any more than it would not form part of his estate, based on the previous conversations and also based on his confirmation referred to in 45, `good, that’s what I want’ particularly with reference to his earlier statement that, ` Peggy and Vi don’t get on’ (para 15)”
I accept Mr. Whitney’s opinion that at least for Ms. Madden to fulfil her duty of care she should have advised the testator that the house would not form part of the estate. I consider that alone is sufficient on the findings I make in this proceeding to judge Ms. Madden in breach of the duty of care owed to the plaintiffs. However, I consider it was a breach of the duty of care on the part of Ms. Madden to fail to go on to advise the testator that because the house would not form part of his estate, that the plaintiffs would receive no part of it ultimately. Although there was some urgency to prepare a new Will, I do not accept that could justify omitting to give the advice to the testator I consider should have been given. I find at best Ms. Madden told the testator that if the house was held as joint tenants it would pass to his wife which I consider the testator could have understood amounted to a life interest and would mean his wife would have the house for her life, and then his interest could go to the plaintiffs. I consider that is why the testator accepted the Will as engrossed. I do not accept that Ms. Madden on 13 February 1992 before the testator executed the Will told the testator the house would not form part of the estate and that the testator said “good, that’s what I want.”
I find Ms. Madden owed the plaintiffs a duty of care (Hill v. Van Erp (1996-1997) 188 CLR 159). The standard of care is that standard to be expected of a reasonably competent practitioner (Midland Bank Trust Co Limited v. Hett Stubbs Kemp (1979) Ch. 384, 402-403 per Oliver J; Queensland Art Gallery Board of Trustees v. Henderson Trout (A Firm) 92/1750 Supreme Court Bne, Chesterman J, 98.11.10). I find Ms. Madden and therefore the defendant breached the duty of care owed to the plaintiffs in that Ms Madden:
failed to advise the testator that upon his death his interest in the house would not form part of his estate;
failed to advise the testator that to effect his intentions in the Will he needed to sever the joint tenancy and create a tenancy in common and transfer one half of the funds contained in the bank accounts to a separate account in his name;
failed to fully and completely advise the testator of the efficacy and cost of severing the joint tenancy and transferring the funds in the bank account so that he could effect his intentions as contained in the amendment and in the Will.
I find had Ms. Madden not breached the duty of care owed to the plaintiffs it is more likely than not that the testator would have given Ms. Madden instructions to do whatever was necessary to sever the joint tenancy to achieve his intentions as reflected in the amendment.
It was submitted by the defendant that I should find the plaintiffs more likely than not would not have benefited at all under the Will. That was because of the evidence from Mr. McAdam that despite his opinion contained in his letter of the likelihood the joint tenancy would have been severed by steps taken by the Public Trustee, he accepted the decision would have been made in Brisbane, and therefore not by him. Further, Mr. McAdam was of the opinion that a person (a solicitor) making the decision was likely to consider it was not in the testator’s wife’s best interests to sever the joint tenancy so close to the expected death of the testator so that she would receive the entire interest in the house. It was also the opinion of Mr. Mann that a solicitor was likely to give the same advice to someone with the testator’s wife’s circumstances.
The opinions of Mr. McAdam and Mr. Mann I have just referred to do not persuade me that it was more likely than not the joint tenancy would not have been severed before the testator’s death. That is because there are, I consider, other considerations relevant to an assessment of what may have happened had the testator been properly advised by Ms. Madden.
The testator had a Will which left everything to his wife. He had gone to the trouble to dictate and sign the contents of the amendment. I have found his instructions to Ms Madden would have been to do whatever was necessary to achieve his intentions evidenced by the amendment.
It is possible that the testator’s wife could have signed a transfer to effect the severing of the joint tenancy. The testator’s wife may not have received advice from the Public Trustee nor anyone else. I consider it cannot be assumed that the testator’s wife would have refused to sign or was incapable of signing a transfer. That is, incapable as a matter of law in the sense of not having the mental capacity to validly do so. The testator’s wife may have been persuaded by the testator to do so. Even if the testator’s wife was persuaded by the testator to sign a transfer, the transfer may not have been set aside. The testator and his wife had no children to take an interest in what the testator and his wife did with their property. I consider the testator’s wife could have been persuaded by the testator to sign the transfer as being in her best interests so that the testator’s family, so far as the testator was concerned, would look after his wife upon his death. I pause here to say in no circumstances am I saying his family, including Mrs. Schofield, only looked after the testator and his wife upon the expectation of benefiting under his Will. I accept they did so through love for the testator and his wife. They had already been looking after the testator and his wife before the Will was prepared and looked after the testator’s wife for many years after the testator’s death.
The testator may have wanted to do what is reflected in the amendment because he appreciated what had already been done by his family, including Mrs Schofield, and to show his gratitude for what he expected they would do in the future. The testator may have avoided the Public Trustee being involved. Ms. Madden’s telephone message to attend upon the testator in Exhibit 3 refers to the Public Trustee. Her evidence which I accept was that the testator did not want the Public Trustee as executor (T 89/35). Dr. Lloyd’s evidence which I am prepared to accept, is that on some days the testator’s wife was lucid. If that were so, it is possible if someone was asked to advise the testator’s wife whether it was in her best interests that she should sign the transfer may have found the testator’s wife lucid or appearing to be lucid and prepared to sign the transfer despite advice not to sign.
On the evidence, I cannot find that it is more likely than not that the joint tenancy of the house would have been severed.
However, the considerations I have referred to above persuade me the plaintiffs had real prospects of benefiting under the Will, and because of the breach of the duty of care owed to the plaintiffs, the plaintiffs lost that opportunity. Either the testator’s wife could have signed a transfer to sever the joint tenancy or if given advice that it was not in her best interests to do so, could have despite that advice, signed the transfer to sever the joint tenancy. Against these possibilities is the possibility that advice could have been forthcoming from the Public Trustee (although I consider it not very likely the Public Trustee would have been involved) or from a solicitor either that it was against the testator’s wife’s best interests to sever the joint tenancy, or that it was too late because of the testator’s wife’s mental condition to effectively sever the joint tenancy, or both pieces of advice could have been forthcoming, which could have been accepted by the testator’s wife or the testator as the case may have been. I consider these latter possibilities to be much less likely than the former possibilities.
Weighing up the relevant considerations then, I consider the plaintiffs had a 75% chance of benefiting under the Will in the sum of $41,037.50.
Therefore, I assess the plaintiff’s damages in the sum of $30,778.12.
I give judgment for the plaintiffs against the defendant in the sum of $30,778.12. I allow the plaintiffs interest on the sum of $30,778.12 at the rate of 6% per annum from 2 November 1996 to the date of judgment.
I will hear submissions from the parties regarding costs.
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