Lawcovernotes December 2016

The insured had acted for the testator over many years. In 2009, the testator instructed the insured to prepare a will providing for his wife through a superannuation fund. In June 2012, the testator instructed the insured to prepare a new will providing for his wife by way of a lump sumpayment in accordance with her request. In October 2012, the testator again instructed the insured to prepare a will, this time urgently. Each of his instructions was recorded and approved inwriting. The effect of the changes was to leave the wife 20% of the estate. The balance of the estate was shared between the testator’s children. The testator executed the will and died two days later. Inmid- May 2016, the wife alleged that the insured had breached his duty of care to her because the October 2012 will resulted in her having to pay $1 million in additional tax. She said the solicitor should have advised her husband to seek specialist tax advice before execution. The High Court decision in Hill v Van Erp (1997) 188 CLR 159 says that a solicitor can owe a duty to a disappointed beneficiary under a will. In that case the solicitor had prepared a will but the gift to the beneficiary failed because the will was witnessed by her husband. The more recent High Court decision in Badenach v Calvert [2016] HCA 18 has more clearly defined the duty a solicitor owes a beneficiary. In that case it was alleged that the solicitor had a duty to advise the testator of the possibility that his estranged daughter might make a claim under the Tasmanian Testator’s Family Maintenance Act . The beneficiary alleged the solicitor should have advised the ways in which such a claimcould be avoided by, for example, an inter vivos transfer of real property. The Court unanimously rejected the expansion of the duty of care saying instead that the duty to the beneficiarywas confined to giving effect to the testamentary instructions and did not extend to taking care for future and contingent interests of every prospective beneficiary and to hold otherwise would be to impose a duty which was “crippling”. Applying the principles of this important recent decision of the High Court to the Lawcover claim, and in accordance with Lawcover’s determined defence of unmeritorious allegations, the claim against the insured was denied. It has not been pursued further. Jennifer O’Brien Claims Solicitor 15.