HAWKINS v CLAYTON
164 CLR 53978 ALR 69
(Judgment by: DEANE J)
Between: HAWKINS
And: CLAYTON
Judges:
Mason C.J.
Wilson J.
Brennan J.
Deane J.Gaudron J.
Subject References:
Negligence
Limitation of Actions
Judgment date: 8 April 1988
CANBERRA
Judgment by:
DEANE J
The respondents were, at relevant times, members of a leading Sydney firm of solicitors ("the firm" or "the respondent solicitors"). They were sued in the Supreme Court of New South Wales by Mr. Claude Harold Hawkins who was named as executor and residuary beneficiary under the will of Mrs. Melinda Ellen Brasier ("the testatrix"). The action was for damages for an alleged failure to take reasonable steps to inform Mr. Hawkins of his interest under the will until some six years after the death of the testatrix. After the institution of proceedings, Mr. Hawkins died. The action was continued by the present appellant who is his widow and the executrix of his will and, by devolution, of the will of the testatrix. Neither side suggests that anything turns upon Mr. Hawkins' death and it will be convenient to use the phrase "the plaintiff" to refer indifferently to him and to Mrs. Hawkins in their successive roles as such .
The testatrix was a client of the firm. Her will was prepared for her by a senior partner, Mr. George Hardwick, who had acted for her over a period of some twenty years. It was executed in January 1970. It provided for a legacy of $200 to an adopted daughter of the testatrix and a bequest of all moneys standing to her credit in any bank account to a brother, Frederick Norman Lamb, if he should survive her. Otherwise, having appointed Mr. Hawkins as sole executor, it left to him the balance of the testatrix's estate. After the will had been executed by the testatrix, it was retained by the firm for safe keeping.
In August of the following year, the testatrix's brother, Mr. Lamb, died. On 18 September 1971, the testatrix wrote to Mr. Hardwick in the following terms:
"Would you kindly forward my Will to me, as I wish to make another one, I lost my brother last month, & it has upset things with me, trusting this finds you quite well. Thanking you."
On 27 September 1971, the firm wrote in reply to the testatrix. According to the copy which remained in the firm's file and again omitting formal parts, that letter read as follows:
"Thank you for your letter of the 18th instant and we enclose a photostat copy of the Will which you made.
We are indeed sorry to hear of the loss of your brother and we look forward to receiving instructions from you as to your new Will."
It should be noted that the above letter indicates that the testatrix's request that her actual will be forwarded to her was not complied with. Instead, the letter states that what was enclosed was "a photostat copy of the Will". No further instructions were received from the testatrix by the firm at that time .
Mr. Hawkins was not related to the testatrix. For some years prior to the making of the testatrix's will, he had lived, with his family, as a "tenant" in her home in the Sydney suburb of Blakehurst. He continued to live there until August 1973 when, after a quarrel with the testatrix and at the testatrix's insistence, he and his family left. Thereafter, there was no contact between them. The evidence indicated that the testatrix had obtained Mr. Hawkins' agreement to act as her executor before she made the will in 1971 but that she had not informed him, either then or subsequently, that she intended to include him as a beneficiary.
Some time after her quarrel with Mr. Hawkins, the testatrix telephoned Mr. Hardwick. His account of this telephone conversation was as follows:
"Mrs. Brasier said that she had had a row with Mr. Hawkins and 'I have kicked him out'. I replied 'That is bad. Do you know where he is?' and she replied 'No. I don't know where he is and I don't want ever to see him again.' I said, 'You will have to make a fresh will' and she said, 'Yes, I realize that. I will think about it and let you know.'"
About a month after that conversation, Mr. Hardwick telephoned the testatrix. He reminded her that she should make a fresh will and that she had not given him instructions. She replied:
"I am still thinking about the matter and I'll get in touch with you."
There was no further relevant communication between the testatrix and the firm prior to the testatrix's death on 18 January 1975.
When, on 20 January 1975, the respondent solicitors were informed that the testatrix had died, they acted on the basis that they still held the testatrix's original will in their custody. After discussion with a nephew of the testatrix, they did a number of things in respect of which they were, more than six years later, to render a memorandum of professional costs on the basis that they had been acting for the estate. They obtained details of the testatrix's account with the Commonwealth Savings Bank of Australia and inspected the contents of a safe custody packet which the bank held. They authorized payment by the bank of the testatrix's funeral expenses. They communicated the contents of the will to the nephew. They initiated inquiries to ascertain whether the testatrix had made a subsequent will of which they were unaware. They wrote to another relative of the testatrix and to the solicitor acting for yet another advising that the particular relative, according to the will of the testatrix which "we hold", had no interest in her estate. They failed, however, to take any steps to locate Mr. Hawkins or to inform him that the testatrix had died and that, no doubt contrary to any reasonable expectation which he might have had, he remained her executor and was, apart from the legacy of $200 to the testatrix's adopted daughter, the sole beneficiary under what they believed to be her last will. It was not until March 1981, which was after Mr. Hardwick's retirement, that any positive attempt was made by the firm to impart that information to Mr. Hawkins. Then, when told for the first time of his interest under the testatrix's will, Mr. Hawkins immediately took steps to safeguard and administer her estate. In the meantime, the testatrix's house, which was the main asset in her estate, had been permitted to fall into a state of disrepair and, for a considerable period, to lie vacant. When a return was subsequently lodged with the Stamp Duties Office for death duty purposes, a substantial fine for late lodgment was imposed. As I followed the argument, it is not disputed that the estate sustained loss by reason of Mr. Hawkins ' ignorance, in the period up until March 1981, of his appointment as the testatrix's executor and residuary beneficiary.
In May 1981, Mr. Hawkins instructed different solicitors to apply for a grant of probate of the will and to act on behalf of the estate. In early June 1981, a member of the firm, Mr. Sullivan, wished to forward the original will to the new solicitors. It could not be found. Subsequently, Mr. Hardwick and Mr. Sullivan each swore an affidavit to the effect that the testatrix's original will had been in the custody of the firm at the time of the testatrix's death but had subsequently been mislaid among the firm's papers and records. On the basis of those affidavits, probate was granted of a copy of the will to Mr. Hawkins as executor on 2 October 1981. The present proceedings were not instituted by Mr. Hawkins against the solicitors until 22 November 1982.
In the Supreme Court, the plaintiff's action was propounded as a claim both in contract and in tort. At first instance, little, if any, attention would appear to have been given in argument on behalf of the plaintiff to the distinction between a claim by Mr. Hawkins in his personal capacity and a claim by him as executor of the testatrix's estate. The claim in contract was apparently presented as a claim for damages for breach of a contract between the firm and Mr. Hawkins. The claim in tort was apparently presented as a claim for damages for breach of a common law duty of care which the firm had owed him personally as distinct from in his representative capacity as executor. The learned trial judge (Yeldham J.) dealt with the action on that basis. He dismissed it, holding that there had been no contract between the firm and Mr. Hawkins and that the firm had owed him no relevant duty of care. Accordingly, his Honour found it unnecessary to consider a defence, raised on behalf of the firm, that the action was not maintainable by reason of the Limitation Act 1969 (NSW), s 14(1). An appeal by the plaintiff from his Honour's decision was dismissed by the New South Wales Court of Appeal (Kirby P. and Glass J.A.; McHugh J.A. dissenting). In the course of argument, we were informed by counsel that, before the Court of Appeal, "it was argued that the action was brought (by Mr. Hawkins) as executor also." This is confirmed by the judgment of Kirby P. which identifies as one of the questions "debated in the oral and written submissions of the parties" the question whether "there existed a duty of care, arising in contract or tort, owed by the respondents to (Mr. Hawkins) as executor of the estate of the testatrix." The majority of the Court of Appeal held that, even if the plaintiff would otherwise have had a good claim, it was statute barred. Their Honours dealt with the appeal on that basis and accordingly found it unnecessary to determine whether, but for the Limitation Act point, the plaintiff would have been entitled to succeed. McHugh J.A., in dissent, was of the view that the firm had been in breach of a duty of care which it owed to Mr. Hawkins under the law of negligence and that s 14(1) of the Limitation Act did not prevent the maintenance of the plaintiff's action for damages for breach of that duty.
In this Court, the plaintiff's case is again put on the basis that the action was brought by Mr. Hawkins in his capacity as executor as well as in his personal capacity. Reliance is placed not only on breach of an alleged contract between the firm and Mr. Hawkins but also on breach of an alleged contract between the firm and the testatrix. In so far as the action in tort is concerned, reliance is placed not only on breach of an alleged duty of care owed to Mr. Hawkins personally as a beneficiary but also on breach of an alleged duty of care owed to him as the testatrix's legal personal representative. The pleadings are wide enough to encompass an action on behalf of the testatrix's estate and senior counsel for the respondent solicitors has not suggested that his client would suffer any unfair detriment if the case is dealt with on the basis upon which it is now put, without seeking to identify precisely which arguments were and which arguments were not advanced in the courts below. In the absence of technical objection on behalf of the respondents or suggested detriment to them, that appears to be the appropriate course to adopt.
One matter which has been accorded an importance in argument in this Court which it does not appear to have attracted in the courts below is the question whether the testatrix's original will was in fact held by the firm at the time of her death. That is a question which has caused me some concern. It is convenient to turn to it at once.
Mr. Hardwick was called as a witness at the trial of the action. In the course of his evidence in chief, he was shown the copy of the letter which had been sent to the testatrix in September 1971 in response to her letter requesting that her will be sent to her. His evidence was as follows:
"Q. Just look at the letter. Are you able to say whether there was an enclosure with that letter sent to Mrs. Brasier?
A. Yes, there would have been an enclosure.
Q. What was that enclosure?
A. She said that she asked for the will to be sent to her. I would imagine I would have sent the will although the letter says 'enclosed a photostat copy'. I can't be precise at this point of time, but I think I would have probably have altered the original copy but I did not alter the carbon copy.
Q. By that you mean that you think, although you cannot be sure, that you sent the original will to her at that time?
A. I would think so, yes."
This was apparently the first occasion after the testatrix's death on which it was suggested on behalf of the respondent solicitors that the original will had been returned to the testatrix with the letter of September 1971. The full significance of that suggestion would seem not to have been explored in argument in the courts below. If the original will had been returned to the testatrix, there was nothing at all in the circumstances to rebut the ordinary presumption of subsequent revocation (see, generally, Welch v. Phillips (1836) 1 Moo 299 (12 ER 828); McCauley v. McCauley (1910) 10 CLR 434 , at pp 438-439, 446-447, 451-452). Indeed, the contents of the testatrix's letter of September 1971 and the circumstances surrounding the end of her association with Mr. Hawkins would have reinforced that already strong presumption. The letter makes plain that the testatrix intended to revoke the will. The subsequent dispute with Mr. Hawkins, the testatrix's action in ordering him and his family from her home and the testatrix's subsequent conversations with Mr. Hardwick leave little room for doubting that the will did not reflect her testamentary intentions at the time of her death. If that presumption of revocation properly arose and was not rebutted, the grant of probate of the copy of the will was a miscarriage of justice to the advantage of Mr. Hawkins and his estate at the cost of the testatrix's next-of-kin. Moreover, in so far as the present case is concerned, it could scarcely be seriously argued that a solicitor who had, at the request of a testatrix, returned to her an original will which she had indicated she intended to revoke and which was not in her possession or otherwise to be found when she died, was under an obligation, either to the testatrix or to those named in the presumably destroyed will, to act on the basis that the will remained unrevoked and unaltered as the last will of the testatrix.
In his reasons for judgment, Yeldham J. stated that he accepted the evidence of Mr. Hardwick "in its entirety". As the above extract from that evidence indicates, Mr. Hardwick had not said that he could actually remember altering the letter to the testatrix or forwarding to her the original will. All that he said was that he supposed that that is what he did. In the context of the manner in which the plaintiff's case was presented to him, Yeldham J. was of the view that the action must fail regardless of whether the will was or was not in the firm's custody at the time of the testatrix's death. In those circumstances, his Honour, having pointed out that it was "not clear whether the original will was in fact retained" by the firm, assumed, for the purposes of his judgment, "in favour of the plaintiff that it was so retained." In the Court of Appeal, Kirby P. and Glass J.A. proceeded on the basis of Yeldham J's assumption that the will was in the firm's custody at the time of the testatrix's death. McHugh J.A. thought that, having regard to Yeldham J's acceptance of Mr. Hardwick's evidence, it should be accepted that the will had been returned to the testatrix and a copy retained by the firm.
Examination of the material in evidence fully confirms Yeldham J's conclusion that it is unclear whether the original will had remained in the custody of the firm. The affidavits of Mr. Hardwick and Mr. Sullivan, on the basis of which probate was granted, were, as has been said, to the effect that it did. Nowhere however is there any statement by any one that he or she actually saw the will after the testatrix's death. The basis of Mr. Sullivan's belief that the will had remained in the custody of the firm appears to have been the statement in the letter to the testatrix that a photostat copy of the will, and not the original, was forwarded to her. Mr. Hardwick's oral evidence in chief was, as has been seen, to the effect that that statement was probably incorrect. In his affidavit, Mr. Sullivan indicated that, when he took over supervision of the matter in February 1981, the instruction cover contained xerox copies which he believed to have been "made by the firm after the (testatrix's) death." His belief in that regard would, however, seem to conflict with the statement in Mr. Hardwick's affidavit that, shortly after "the original instructions were received", he caused xerox copies of the will to be made and caused the will to be placed in a section of the strong room reserved for documents relating to his matters. Regardless of whether one treats the reference to "original instructions" in that statement as a reference to the original instructions to act on the preparation of the testatrix's will or as a reference to the instructions to return it to the testatrix, the inference would seem to be that the xerox copies in the instruction cover, to which Mr. Sullivan referred, were prepared, at the latest, some four years before the testatrix died. On the other hand, the available evidence in relation to this aspect of the case lay exclusively within the knowledge and control of the respondent solicitors who include Mr. Hardwick and Mr. Sullivan among their number . The affidavits of both Mr. Hardwick and Mr. Sullivan, on the basis of which probate was granted, and which were made more than two years closer to the events than the hearing of the action, were plainly to the effect that the will had remained in the custody of the firm at the time of the testatrix's death. Under cross examination, Mr. Hardwick said that he "would not know at this stage" whether his suggestion that he would have sent the original will to the testatrix was correct and that he "wouldn't know" whether the will had been retained and "lost in the (firm's) strong room". Mr. Sullivan's affidavit, which was received as an exhibit, remained unqualified by any subsequent evidence from him since he was not called as a witness. In all the circumstances, it appears to me that the inferences which should properly be drawn, at least for the purposes of the present proceedings against the respondent solicitors, are that, notwithstanding the request for its return which the testatrix had made more than three years before her death, the will continued to be held by the firm pursuant to the arrangement for its safe custody and that it was misplaced among other documents in the firm's strong room after the testatrix had died.
In so far as the plaintiff's case is based on the terms of an alleged contract between Mr. Hawkins and the firm, it can be shortly disposed of. There was no relevant contract between them. Indeed, there was no communication at all between Mr. Hawkins and the firm prior to the time when Mr. Hawkins was contacted and informed of his appointment as executor and interest as residuary beneficiary under the testatrix's will. On the other hand, and notwithstanding that the evidence is meagre, it is clear that there was a contract between the testatrix and the firm pursuant to which the firm acted professionally in relation to the preparation and execution of the will and, thereafter, in relation to its safe custody. There is no suggestion that the firm made or proposed to make a separate charge for the safe custody facility. However, nothing turns upon that. The provision of the safe custody facility was an incident of the overall contract involving drafting, and supervising the execution of, the will, for which the testatrix was liable to pay ordinary professional fees. Moreover, the provision by the firm of the safe custody facility could not, in any event, properly be seen as an act of disinterested benevolence. It has long been recognized that wills held in safe custody represent an aspect of the goodwill of a solicitor's practice in the sense that they represent a source of possible future professional work in relation to any subsequent codicil or new will and in relation to the administration of the client's estate after his or her death.
While the evidence does not disclose the content of any express discussion between the testatrix and Mr. Hardwick about the terms upon which the executed will remained in the firm's custody, it is not suggested that the effect of any such discussion was to negative or modify any contractual terms which would otherwise be inferred or implied in the circumstances disclosed by the evidence. Indeed, it would seem clear that the contractual terms upon which the executed will remained in the safe custody of the firm were left largely unarticulated by the parties and must be so inferred or implied if the agreement between them is to be given any relevant content. In these circumstances, it is necessary to identify two distinct stages in the ascertainment of relevant terms. Those stages may well overlap and it will often be unnecessary to distinguish between them in practice. The first stage is essentially one of inference of actual intention : what, if any, are the terms which can properly be inferred from all the circumstances as having been included in the contract as a matter of actual intention of the parties? The second stage is one of imputation: what, if any, are the terms which are, in all the circumstances, implied in the contract as a matter of presumed or imputed intention?
A number of the contractual terms relating to the custody of the will can be readily inferred as a matter of actual intention. One is that, as a matter of joint contractual intention, the testatrix and the firm could, during the life of the testatrix, each bring the bailment to an end by reasonable notice to the other party: the testatrix could require that her will be handed to her; the firm could require that she remove her will from its custody. It was obviously in the contemplation of both testatrix and the firm that the will might remain in the firm's custody at the time of the testatrix's death. That being so, another term which can be inferred, as a matter of actual intention of the parties, is that, in that event, the firm assumed continuing responsibility for the safe custody of the will until such time as it was handed over to some person, institution or authority to whom or to which the firm was entitled to entrust possession of it. Closer to the borderline between inference and imputation, a further term which can be inferred is that the firm was authorized, when the testatrix died, to communicate the contents of the will to any person with a legitimate interest in them, including any person named in the will as executor or a beneficiary. Once one passes beyond that stage to the question whether it was a term of the contract that the firm was, when the testatrix died, under an obligation to take any (and, if so, what) positive steps to locate some or all of the persons named in her will, one passes beyond the stage of inclusion of terms by reason of inferred actual intention. It simply cannot be inferred or assumed as a matter of actual fact that the testatrix ever directed her mind to that question or that, if she did, there was any actual joint intention of herself and Mr. Hardwick which can be expressed as a contractual term. The likelihood is that the testatrix was content to rely upon Mr. Hardwick as the custodian of her will without troubling herself about whether he was to be under a duty to take any, and if so what, positive steps to ensure that effect could be given to her testamentary intentions. If a term spelling out the obligations of the firm in that regard is to be included in the contract between the parties, it must be implied as a matter of presumed or imputed intention.
Care must be taken to avoid an automatic or rigid application of the ordinary cumulative criteria for determining whether a term should be implied in a written contract to a case where the contract is oral or partly oral or where it is apparent that the parties have never attempted to reduce their agreement to complete written form (cf. Hospital Products Ltd. v. United States Surgical Corporation (1984) 156 CLR 41 , at p 121). The cases in which those criteria were laid down or accepted as the cumulative ingredients of an overall test were concerned with the question whether a term should be implied in a formal contract which was complete upon its face (see, in particular, B.P. Refinery (Westernport) Pty. Ltd. v. Hastings Shire Council (1977) 52 ALJR 20, at p 26; 16 ALR 363, at p 376; Secured Income Real Estate (Australia) Ltd. v. St. Martins Investments Pty. Ltd. (1979) 144 CLR 596 ; Codelfa Construction Pty. Ltd. v. State Rail Authority of NSW (1982) 149 CLR 337 ). In such cases, the insertion of an additional term effectively involves an alteration to what the parties have formally accepted as the complete written record of the compact between them. As the judgment of Mason J. in Codelfa (at pp 345-347; Stephen and Wilson JJ. concurring with his Honour's comments on this aspect of the case) clearly indicates, the cumulative criteria formulated or accepted in such cases cannot be automatically applied to cases such as the present where the parties have not attempted to spell out all the terms of their contract but have left most or some of them to be inferred or implied. Where that is so, there is no question of effectively altering the terms in which the parties have seen fit to embody their agreement; the function of a court is, as Lord Wilberforce pointed out in Liverpool City Council v. Irwin [1977] AC 239 , at p 254, "simply ... to establish what the contract is, the parties not having themselves fully stated the terms." In the performance of that function, considerations of what is "reasonable", "necessary to give business efficacy to the contract" and "so obvious that 'it goes without saying'" (B.P. Refinery (Westernport) Pty. Ltd., at p 26; The Moorcock (1889) 14 PD 64, at p 68; Shirlaw v. Southern Foundries (1926) Ltd. [1939] 2 KB 206 , at p 227) may be of assistance in ascertaining the terms which should properly be implied in the contract between the parties. There will not, however, be the need or the justification for the law to refuse to imply any imputed term which does not clearly satisfy all such requirements. This is particularly so where, as here, the contract has passed from the executory stage and has been executed by one or both parties.
Irwin's Case differed from the present in that there was a formal written agreement between the parties. It was, however, apparent that that written agreement, which was a tenancy agreement, did not spell out all the terms of the contract. It spelt out the obligations of the tenant but was silent about those of the landlord. The speech of Lord Wilberforce, with which Lord Fraser of Tullybelton agreed, offers guidance about the test for determining whether a particular term should be implied in such a case. His Lordship, focussing upon "the nature" of the contract, formulated (at p 254) the relevant test in terms of what is necessary or required in the circumstances:
"such obligation should be read into the contract as the nature of the contract itself implicitly requires, no more, no less."
Subsequently, his Lordship referred (at pp 254-255) to the "necessity to have regard to the inherent nature of a contract and of the relationship thereby established" as having been "stated" in Lister v. Romford Ice and Cold Storage Co. Ltd. [1957] AC 555 . Referring to that case, his Lordship said:
"That was a case between master and servant and of a search for an 'implied term.' Viscount Simonds, at p 579, makes a clear distinction between a search for an implied term such as might be necessary to give 'business efficacy' to the particular contract and a search, based on wider considerations, for such a term as the nature of the contract might call for, or as a legal incident of this kind of contract. If the search were for the former, he says, '... I should lose myself in the attempt to formulate it with the necessary precision.'" (p 576)
Quite apart from the difficulty to which Viscount Simonds referred in the above citation from Lister, there are sound reasons for resisting the temptation to attempt to formulate a precise mechanical test for determining what terms, if any, should be implied in a case where the parties have not sought to spell them out. Such a precise mechanical test would introduce an element of inflexibility which would be likely to lead to injustice in the circumstances of particular cases and would preclude proper observance of Lord Tomlin's sensible admonition "so to balance matters that without violation of essential principles the dealings of men may as far as possible be treated as effective and that the law may not incur the reproach of being the destroyer of bargains" (see Hillas & Co., Ltd. v. Arcos, Ltd. (1932) 43 Lloyd's LRep 359, at p 364). The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties.
In the present case, there was no finding in the courts below that there existed any settled professional practice defining what, if any, steps a solicitor in New South Wales is obliged to take to locate the executor or the beneficiaries under a will which is in his custody at the time of the testator's death. Nor is there any satisfactory evidence or other material before the Court upon which a finding of any such settled practice or of the effect of any relevant past dealing could properly be based. The only relevant evidence was that of a Sydney solicitor (Mr. Windeyer) who was, at the time he gave his evidence, the Chairman of the Insurance Claim Committee of the Law Society of New South Wales. Upon analysis, however, his evidence does no more than establish that he personally would, on learning of the death of a testator whose will he held, write to the executor and that, if he was unaware of the executor's address, he would look up the name in the telephone book. In a context where it is ordinarily in the interests of a solicitor's probate practice that the executor be located, that evidence is inadequate to base a finding of any general practice defining the professional obligations of a solicitor in the postulated circumstances. Indeed, I did not understand the contrary to have been argued by either side. That being so, the question whether there should be implied in the contract between the testatrix and the firm either a term imposing a specific obligation to locate the executor or beneficiaries under the testatrix's will or a term imposing some more general duty encompassing such an obligation falls to be answered by reference to whether it can be seen that the implication of such a term is necessary for the reasonable or effective operation of such a contract in the circumstances. The existence and content of any general duty of care under the law of negligence would seem, at least prima facie , to be relevant to any assessment of the need to imply such a contractual term. It is convenient to turn, at this stage, to consider whether the firm was under any such common law duty of care.
While assumpsit remained in its infancy, an action for breach of the duty of a solicitor to a client to be skilful and careful lay in case (see per Viscount Haldane L.C., Nocton v. Lord Ashburton [1914] AC 932 , at p 956; Poulton, "Tort or Contract", Law Quarterly Review, vol 82 (1966), 346, at pp 360-361 and Dwyer, "Solicitor's Negligence - Tort or Contract?", Australian Law Journal, vol 56 (1982), 524, at pp 526ff.). Subsequently, an action for breach of the duty of care and skill owed by a solicitor in the performance of professional work for a client came to be seen as lying also, and then exclusively, in assumpsit or contract (see, generally, the discussion of the authorities contained in the judgment of the Supreme Court of Canada (delivered by Le Dain J.) in Central Trust Co. v. Rafuse (1986) 31 DLR (4th) 481, at pp 489-499 and in the judgment of Oliver J. in Midland Bank v. Hett, Stubbs & Kemp (1979) Ch 384, at pp 405-411). Thus, in Groom v. Crocker [1939] 1 KB 194 , at p 205, Sir Wilfrid Greene M.R. commented that the "relationship of solicitor and client is a contractual one .... It was by virtue of that relationship that the duty (of skill and care) arose, and it had no existence apart from that relationship." In the same case, Scott L.J. (at p 222) said that "the mutual rights and duties" of a solicitor and his client "are regulated entirely by the contract of employment." The emergence and development of the modern law of negligence, particularly since the decision in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] AC 465 , inevitably led to a reappraisal of the isolation of a solicitor from the reach of the ordinary law of negligence in relation to his professional dealings with a client. The clear trend of modern authority is to support the approach that the duty of care owed by a solicitor to a client in respect of professional work prima facie transcends that contained in the express or implied terms of the contract between them and includes the ordinary duty of care arising under the common law of negligence (see, in particular, Esso Petroleum v. Mardon (1976) QB 801, at pp 819-820; Midland Bank v. Hett, Stubbs & Kemp; Aluminium Products (Qld) Pty. Ltd. v. Hill (1981) QdR 33; MacPherson & Kelley v. Kevin J. Prunty & Associates (1983) 1 VR 573; Vulic v. Bilinsky (1983) 2 NSWLR 472; Sacca v. Adam (1983) 33 SASR 429; Brickhill v. Cooke (1984) 3 NSWLR 396; Central Trust Co. v. Rafuse; Finlay v. Murtagh (1979) IR 249; Day v. Mead, unreported, New Zealand Court of Appeal, 31 July 1987). That approach is also supported by principle in that, in the context of the general scope of the modern law of negligence to which members of this Court have long sought to give effect (see, for example, the earlier cases in this Court referred to in Hackshaw v. Shaw (1984) 155 CLR 614 , at pp 646-653), there are no acceptable grounds for refusing to recognize the liability of a solicitor in tort for negligence in the performance of professional work for a client. That liability prima facie corresponds with what Windeyer J. described in Voli v. Inglewood Shire Council (1963) 110 CLR 74 , at p 84, a case concerning the liability of an architect for negligence in the performance of professional work, as "the ordinary liabilities of any man who follows a skilled calling." In the course of his judgment which was concurred in by the other members of the Court (Dixon C.J. and Owen J.), Windeyer J. went on to examine the content of those "ordinary liabilities". It suffices, for present purposes, to quote two extracts from his Honour's judgment (both at p 84):
"He is bound to exercise due care, skill and diligence. He is not required to have an extraordinary degree of skill or the highest professional attainments. But he must bring to the task he undertakes the competence and skill that is usual among architects practising their profession. And he must use due care. If he fails in these matters and the person who employed him thereby suffers damage, he is liable to that person. This liability can be said to arise either from a breach of his contract or in tort."
and (dealing with the question of liability of an architect to a third party):
"In the abstract the question, and it is an important question for architects, is can an architect be liable for negligence to a person who, after a building is finished and has been taken over by the building owner, lawfully enters it and, by reason of faults in its design and construction, comes to harm. Whatever might have been thought to be the position before the broad principles of the law of negligence were stated in modern form in Donoghue v. Stevenson [1932] AC 562 , it is now beyond doubt that, for the reasonably foreseeable consequences of careless or unskilful conduct, an architect is liable to anyone whom it could reasonably have been expected might be injured as a result of his negligence. To such a person he owes a duty of care quite independently of his contract of employment."
The above extracts from Windeyer J's judgment in Voli must be understood in the context that what was involved in that case was ordinary physical injury. 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. Minister Administering Environmental Planning and Assessment Act (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 . Thus, to take an obvious example, it would be irrelevant to a claim for economic damage which has been sustained by reason of negligent misstatement that a relationship of proximity with respect to ordinary physical injury had existed by reason of the fact that, at the time of the relevant misstatement, the defendant was the driver of a motor vehicle in which the plaintiff was a passenger.
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. It is true that all or most of that damage had been sustained by the time a grant of probate was made to Mr. Hawkins. However, the effect of s 44 of the Wills, Probate and Administration Act 1898 (NSW) is that a grant of probate relates back to the time of a testator's death and that the transient interest of the Public Trustee under s 61 of that Act can be disregarded for the purpose of determining, with the benefit of hindsight, the identity of the proper complainant when injury has been sustained by a deceased 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, at p 585; Heyman, 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 QB 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 involving damage by reason of a latent defect in property demonstrate the point. Thus, a relationship of proximity ordinarily exists between the architect or builder of a residential building (e.g. a maternity hospital) and the members of the class of persons who will in future years be born or housed in it. That relationship of proximity is such as to give rise to a duty of care to avoid a real risk of injury by reason of faulty design of the building. The duty of care is owed to each member of the class. If, by reason of the negligence of architect or builder, the building subsequently collapsed and a particular baby was injured, that baby would have a cause of action for the damage sustained by reason of the breach of the duty of care which may have been owed to him, and broken, by a person who has died before he was born. 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 plainly 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 drawing and supervising the execution of the testatrix's will and undertaking responsibility for its custody in the present case, the firm was acting professionally as the testatrix's solicitors. 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 any one 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. It is neither necessary nor desirable to attempt to define, in the abstract, the precise content of the firm's duty of care or the precise extent to which the firm was required to take positive action. 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. That question must be answered by reference to the standard or measure of care which was reasonable in the circumstances. In the present case, that standard or measure of care was that indicated by Windeyer J. in Voli (see above), namely, the care and skill to be expected of a qualified and ordinarily competent and careful solicitor in the exercise of his profession. In the courts below, only McHugh J.A. found it necessary to consider whether the conduct of the firm fell short of the standard of care which the firm was obliged to observe. In all the circumstances, it is appropriate for this Court to determine that question for itself.
After the testatrix's death, Mr. Hawkins, as the person appointed to be the testatrix's executor, became entitled to custody of her will for the purpose of applying for probate. It was unlikely that it would occur to Mr. Hawkins, after his dispute and loss of contact with the testatrix, that he might be the executor and, for practical purposes, sole beneficiary under her last will. It was obvious that, if no steps were taken by the firm to inform Mr. Hawkins of the contents of that last will, there was a real likelihood that he would remain ignorant of them. The evidence was to the effect that Mr. Hawkins' name was listed (at his then current address) in the Sydney telephone directory at relevant times. The evidence also disclosed that when, in March 1981, an employee of the firm (Mr. Church) decided to seek to contact Mr. Hawkins, there was no difficulty in so doing. The only explanation for the failure, in the intervening period, to take any positive step to contact Mr. Hawkins was that Mr. Hardwick had reason to believe that the police were seeking to locate him in connection with a hire purchase matter. Notwithstanding that explanation, the conclusion is unavoidable that, 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. If the estate has a good cause of action against the firm and recovers the amount of such damage, Mr. Hawkins will have sustained no relevant loss or damage at all in his personal capacity. The point is perhaps made more clearly if it be assumed that some person other than Mr. Hawkins had been appointed executor. In that event, Mr. Hawkins as a beneficiary in the estate would have had no more right to obtain damages from the firm for the loss sustained by the estate by reason of the firm's negligence than he would, for example, have had to obtain damages from the negligent driver of a motor vehicle for physical damage caused to another motor vehicle which constituted an asset of the testatrix's estate. 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.
The existence or content of a duty of care owed by a professional man to his client under the common law of negligence can, subject to the possible effect of particular overriding policy considerations or statutory provisions, be excluded or modified by the terms of any contract between them. As has been seen, there was no express term of the contract between the firm and the testatrix which could be construed as having directly or indirectly had such an effect in the present case. It is necessary, at this stage, to return to the question of the identification of any relevant implied terms of that contract.
Regardless of whether the traditional implication of a contractual term requiring that the solicitor exercise due skill and care is treated as being based upon the imputed intention of the parties in the circumstances or upon some general rule of law that such a term is to be implied in contracts of that kind unless the parties have excluded it (cf., e.g., per Lord Cross of Chelsea, Liverpool City Council v. Irwin [1977] AC 239 , at p 257-258), recognition that the ordinary law of negligence prima facie applies in respect of work done by a solicitor for his client removes a large part of the basis and justification for the implication of such a general contractual duty of care. The content of the solicitor's duty of skill and care under the contractual term which has traditionally been implied corresponds with the content of the ordinary duty of skill and care under the common law of negligence, (see, e.g., Central Trust Co. v. Rafuse, at p 525). It is, however, at least arguable that there are some important differences between the incidents of the contractual duty and those of the tortious or delictal duty at least in so far as the consequences of breach are concerned. Thus, an action for breach of the contractual duty lies when the breach occurs but an action for breach of the tortious duty lies only if and when damage has been sustained and the cause of action is complete (but cf., e.g., Schwebel v. Telekes (1967) 1 DLR (2d.) 470, at pp 473-474 (per Laskin J.A.)). Again, and notwithstanding the liability of a solicitor in negligence for economic loss caused to a client, it is arguable that there are differences, which could conceivably be of practical significance, between the measure of damage for breach of the contractual duty and the measure of damage for breach of the tortious duty. Yet again, it is arguable that the amount recoverable for breach of the contractual duty may vary from that recoverable for breach of the tortious duty according to what (if any) further contractual term is to be implied dealing with the consequence of contributory negligence.
To the extent that the content and incidents of the contractual duty of care correspond with those of the ordinary duty of care under the common law of negligence, the implication of a general contractual term is difficult to rationalize. If the implication of the term is based upon some perceived general principle of law, one is led to ask why the common law should imply a contractual term imposing a duty of care which the common law imposes in any event. If the implication of the term is based upon imputed intention of the parties, it is difficult to see how any of the ordinary tests for the implication of a term on that basis could properly be seen as satisfied. It could not be sensibly said that it is necessary for the business efficacy or the reasonable or effective operation of a contract to imply a contractual term imposing a general duty which corresponds with the general duty which already exists under the common law. If the contract between solicitor and client is in writing and complete upon its face, it cannot sensibly be said that the implication of a term imposing such a concurrent general contractual duty is so obvious that "it goes without saying". To the contrary, it would seem at least possible that the solicitor and client would, if asked whether they wished to complicate their contract by a term imposing a duty of care which was co-extensive with that which already existed under the common law, join in the answer that they did not.
To the extent that the incidents of an independent general contractual duty of care would differ from those of an independent tortious duty, it is even more difficult to rationalize the implication of a contractual duty. Once one accepts that the ordinary law of negligence can apply to render a solicitor liable for economic loss caused to a client by professional negligence, the content and incidents of the solicitor's common law duty of care must be seen as representing the law's judgment of the extent to which it is reasonable and desirable to render a solicitor liable for loss or damage suffered by his client. Why, one is led to ask, should the same common law formulate a general rule, or impute to the solicitor and his client a joint intention, that the solicitor should be under some superimposed and different contractual liability for such loss or damage notwithstanding the absence of actual agreement between them that that should be so? A positive response to that question must be founded upon a flawed perception of a continuing dichotomy between a law of contract and a law of tort. The rationalization and principled development of the law cannot but be prejudiced and impeded for so long as the law of contract and the law of tort are, on the basis of past distinctions between different causes of action, seen as operating upon the same set of circumstances to impose, independently of actual intention, consequences which a legal theorist might describe as concurrent but which any ordinary person would describe as conflicting. The law of contract and the law of tort are, in a modern context, properly to be seen as but two of a number of imprecise divisions, for the purpose of classification, of a general body of rules constituting one coherent system of law. Where rules classified in different divisions would otherwise conflict or compete, an essential function of the whole system is to avoid, resolve or rationalize such conflict or competition, not to induce or preserve it.
The problems involved in the perception of co-extensive contractual and tortious duties of care have not gone unnoticed in judgments in other courts or in learned writings. Indeed, appreciation of them has played no small part in the thinking of those who have vainly sought to keep the solicitor completely removed from the reach of the common law of negligence at least in so far as the performance of professional work pursuant to a contract with his client is concerned. I have already indicated my inability to accept that solution consistently with what I see as the proper and reasoned development of the common law. If one accepts the concurrent existence in the ordinary case of imputed general contractual term and tortious duty, one possible solution of the resulting tension might be to seek to identify the nature of the plaintiff's substantial claim so that the plaintiff's claim could then be limited to that "to which he is in law entitled, according to the true facts of the case and the real nature of the transaction" (Chinery v. Viall (1860) 5 H & N 288, at p 295; 157 ER 1192, at p 1195; Winfield, The Province of the Law of Tort (1931), at pp 80-81). Upon analysis however, that solution would create more problems than it would solve unless the need to identify the nature of the substantial claim was seen as the occasion for a new and unacceptable submission to the out-moded barriers of the old forms of action. A more acceptable solution was recently mentioned by Cooke P. in his penetrating judgment in Day v. Mead, namely, "to recognise that, subject to special contractual terms, the same duty of care arises in both tort and contract and has the same incidents. On this view, the duty is not to cause damage by failing to take reasonable care; and a cause of action for negligence does not arise in either tort or contract unless and until damage accrues." Plainly, there is much to be said for that approach. On balance however, it seems to me to be preferable to accept that there is neither justification nor need for the implication of a contractual term which, in the absence of actual intention of the parties, imposes upon a solicitor a contractual duty (with consequential liability in damages for its breach) which is co-extensive in content and concurrent in operation with a duty (with consequential liability in damages for its breach) which already exists under the common law of negligence. Put differently, the imputation of a relevant contractual term should be confined to what is justified by ordinary principles governing the implication of a term on the basis of the imputed intention of the parties, which, in a case such as the present where the parties have not sought to express all of the terms of the contract between them, is what can be seen to be necessary for the effective or reasonable operation of that contract. Plainly, it is not necessary for either the effective or reasonable operation of the contract between the firm and the testatrix that there should be superimposed upon the duty of care which the firm owed the testatrix under the common law of negligence a concurrent contractual duty of care of co-extensive content.
The above should not be read as indicating a view that a solicitor can never be under concurrent and co-extensive contractual and common law duties of care to his client. The contract between a solicitor and his client may expressly impose a general contractual duty of care upon the solicitor and make plain that that contractual duty is concurrent with, and not in substitution for or supplementary of, the ordinary common law duty of care. In such a case, the problems involved in the existence of concurrent duties with arguably different incidents will flow from the actual intention of the parties and not from the implication of a contractual term which can be justified neither by reference to actual intention nor by what is necessary or even reasonable. Nor does it follow from the foregoing that no term relating to the existence or content of the solicitor's duty of care is ordinarily to be implied in the contract between a solicitor and his client. A particular duty of care may well be necessarily implicit in the specification of the particular professional task or function which the solicitor undertakes. Again, it may, for example, be necessary to imply a term in the contract between a solicitor and his client entitling the client to terminate the contract in the event that the solicitor fails to observe the requirements of the ordinary common law duty of care. However, where it is necessary to imply a relevant contractual term, the existence of the ordinary common law duty of care should not be ignored in formulating the content of the term to be implied. The result will ordinarily be that any implied contractual term is framed to operate upon the existing common law duty of care rather than to create some concurrent or competing general contractual duty.
In the light of what has been said above, there is no basis in the present case for the imputation of a contractual term imposing upon the firm a duty of skill and care of co-extensive content and concurrent operation with that which arose under the ordinary law of negligence. Nor is there any basis for the implication of a contractual term relevantly extending or confining the duty of care which the firm owed to the testatrix's legal personal representative. Where, as here, the contract has been executed, it is neither necessary nor profitable to extend inquiry about the implication of contractual terms beyond what is necessary for the resolution of the particular case (cf. The Moorcock (1889) 14 PD 64, at p 67). There is, however, one further term which should be implied in the contract between the testatrix and the firm to which it would seem appropriate to make specific reference. It has been seen that, under the inferred terms of that contract, the firm assumed the professional responsibility of custody of the testatrix's will after her death. That being so, there should be implied in the contract a term to the effect that the firm would be entitled to charge the testatrix (i.e. her estate) reasonable professional fees for work done and time devoted to the proper discharge of the firm's professional responsibility as the custodian of the will at the time when the testatrix died.
There remains for consideration the firm's defence based on s 14(1) of the Limitation Act. That section provides, for present purposes, that an action on a cause of action founded on contract or tort is "not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom he claims".
A cause of action in negligence is complete when the damage caused by the breach of duty is sustained. It is at that time that, in the ordinary case, the cause of action "first accrues" for the purposes of a provision such as s 14(1) of the Limitation Act. It was submitted, on behalf of the plaintiff, that this Court should qualify that settled position by a general proposition that, at least in the case of a claim in negligence for damages for economic loss, time does not commence to run for the purposes of a provision such as s 14(1) until the stage is reached when the plaintiff discovers, or could on reasonable inquiry have discovered, that the damage has been sustained. In support of that proposition, particular reliance was placed upon the decision of the Supreme Court of Canada in Kamloops v. Nielson (1984) 10 DLR (4th) 641 (esp. at pp 681ff.); (1984) 2 SCR 2 (esp. at pp 35ff.) and a passage in the judgment of this Court in South Australia v. Johnson (1982) 42 ALR 161, at p 169. I do not think that those cases, upon proper analysis, support the broad proposition for which the plaintiff contends. Such support is, however, to be found in the judgment of the Supreme Court of Canada in Central Trust Co. v. Rafuse, at pp 535-536.
Kamloops, like the decision of the English Court of Appeal in Sparham-Souter v. Town and Country Developments (Essex) Ltd. (1976) QB 858 which the Supreme Court of Canada preferred to the subsequent decision of the House of Lords in Pirelli General Cable Works Ltd. v. Oscar Faber & Partners [1983] 2 AC 1 , was a case where economic loss had been sustained as a consequence of the development of a latent defect in a building. Commonly in such cases, the building never existed and was never owned without the defect and (in the absence of consequential collapse or physical damage or injury) the only loss which could have been sustained by the owner was the economic loss which would be involved if and when the defect was actually discovered or became manifest, in the sense of being discoverable by reasonable diligence, with the consequence that the damage was then sustained by the then owner (cf. Sutherland Shire Council v. Heyman (1985) 157 CLR 424 , at pp 503-505). The position is different in cases where all or some of the damage, be it in the form of physical injury to person or property or present economic loss, is directly sustained in the sense that it does not merely reflect diminution in value or other consequential damage which occurs or is sustained only when a latent defect which has existed at all relevant times becomes manifest. In those cases, damage is sustained when it is inflicted or first suffered and the cause of action accrues at that time. I do not read the passage in the judgment of the Court in South Australia v. Johnson upon which the plaintiff relied as intended to effect any considered qualification of that general rule. In so far as Rafuse establishes a different general rule for Canada in relation to the operation of Statutes of Limitation, I am not persuaded that it should be followed in this country. That is not, of course, to say that the general rule may not be subject to qualification in some special circumstances or that its application may not involve unresolved difficulties in special categories of case (e.g. cases where all that is involved at the time of a tortious act is a risk of future economic loss: cf. Schlosser, "Some Recent Developments in the Law of Limitation of Actions, Concurrent Liability and Pure Economic Loss", Alberta Law Review, vol 25 (1987), 388, at pp 393-394).
It can be assumed for the purposes of the present case that economic loss caused by the negligent failure to inform Mr. Hawkins of the existence and contents of the testatrix's will was first sustained, in the sense that rent was not earned, within twelve months of her death. In the light of the subsequent grant of probate which retrospectively vested all of the testatrix's real and personal estate in Mr. Hawkins as from her death, the damage which was then sustained by the estate can now be seen to have been sustained by Mr. Hawkins as the testatrix's executor. The question for the purposes of s 14(1) of the Limitation Act is not, however, when damage was sustained. The relevant question is when the cause of action first accrued "to the plaintiff or to a person through whom he claims". In the circumstances of the present case, that question gives rise to a miscellany of problems to which reference was made in argument or in judgments in the courts below. The cause of action obviously did not accrue to the testatrix for she was dead when the damage was sustained. It may be arguable that, viewed contemporaneously, the cause of action accrued to the Public Trustee at the time when damage was first sustained. The limited interest of the Public Trustee under s 61 of the Wills, Probate and Administration Act assumed an ephemeral quality, however, after the grant of probate to Mr. Hawkins and it is difficult to see how it could realistically be said that the Public Trustee was, for the purposes of s 14(1) of the Limitation Act, the person to whom the right of action had originally accrued (cf. the reference to the first of a class of owners in Pirelli, at p 18) or a "person through whom" the plaintiff in the present case claims. Nor is it easy to see how, in the context of s 61 and viewed objectively, it can realistically be said that the cause of action accrued to Mr. Hawkins as executor some six years before he decided to apply for, let alone obtained, a grant of probate of the testatrix's will. Finally, it is arguable that, in the circumstances of the present case, the duty of care owed by the firm was a continuing one, that the breach of that duty continued up until the firm finally took some positive step to locate Mr. Hawkins and inform him of the existence and contents of the will and that damages (which would include the loss of a right of action by the operation of the Limitation Act) continued to accrue in varying forms right up until the time when the Stamp Duties Office imposed a fine for late lodgment of the death duty return and when Mr. Hawkins incurred any additional legal costs involved in seeking probate of a copy will as distinct from the original document. In these circumstances, there is something to be said for the view that a distinct cause of action accrued each time new damage was incurred by reason of the continuing breach of duty. It is, however, unnecessary to pursue these problems involved in the firm's defence based on the Limitation Act. There is a more general answer to that defence. Its basis is to be found in the circumstance that, in the present case, the negligent failure of the firm to inform Mr. Hawkins of the existence and contents of the testatrix's last will not only caused the damage which was sustained by him in the capacity of executor of the testatrix's estate but also effectively concealed from him, for so long as he remained unaware of the contents of the will, the existence of the cause of action in negligence against the firm.
It is inevitable that a Statute of Limitations will, on occasion, lead to injustice in the special circumstances of particular cases. Such injustice, when it occurs, is an unavoidable cost of the benefits involved in ensuring that plaintiffs act promptly and that defendants are not subjected to the litigation of stale claims. The present case falls, however, in an anomalous category where the applicability of a limitation provision such as s 14(1) would invariably involve prima facie hardship and injustice and where any compensating public benefit, apart from protecting the courts from being required to determine issues of distant fact, is absent. If a wrongful action or breach of duty by one person not only causes unlawful injury to another but, while its effect remains, effectively precludes that other from bringing proceedings to recover the damage to which he is entitled, that other person is doubly injured. There can be no acceptable or even sensible justification of a law which provides that to sustain the second injury will preclude recovery of damages for the first. It would, for example, be a travesty of justice and common sense if the law provided that a cause of action lay for damages for false imprisonment but then went on to provide that that cause of action would be lost if the false imprisonment continued for six years after the cause of action first accrued. Likewise, it would be a travesty of justice and common sense if the law imposed a duty upon a solicitor to take positive steps to inform a third person of the contents of a document of which the solicitor was alone aware and then provided that any cause of action against the solicitor for damage caused by a negligent failure to perform that duty would be lost if the negligence continued for six years. It is arguable that the notion of unconscionable reliance upon the provisions of a Statute of Limitations which provides the foundation of the long-established equitable jurisdiction to grant relief in a case of concealment of a cause of action until after the limitation period has expired (cf. s 55(1) of the Limitation Act) should, by analogy, be extended to cover cases such as these where the wrongful act at the one time inflicts the injury and, while its effect remains, precludes the bringing of an action for damages. It seems to me, however, that the preferable approach is to recognize that it could not have been the legislative intent that the effect of provisions such as s 14(1) of the Limitation Act should be that a cause of action for a wrongful act should be barred by lapse of time during a period in which the wrongful act itself effectively precluded the bringing of proceedings. On that approach, the reference in s 14(1) of the Act to the cause of action first accruing should be construed as excluding any period during which the wrongful act itself effectively precluded the institution of proceedings.
In the present case, the negligent failure of the firm to notify Mr. Hawkins of the existence or contents of the testatrix's will effectively precluded the institution of the present proceedings against the firm until he was finally informed of his appointment as executor. The present proceedings were instituted within six years of that time. That being so the firm's defence based upon the Limitation Act fails.
The appeal should be allowed and the orders of the Court of Appeal should be set aside. Since the damage sustained by Mr. Hawkins in his capacity of executor of the testatrix's estate has not been quantified, it is not possible to make orders finally disposing of the case. The appropriate course would seem to be to stand the matter over, at this stage, to give the parties the opportunity to reach agreement on the amount of damages to be awarded. If agreement is not reached, it will be necessary to remit the case to the Supreme Court to enable the amount of damages sustained by the testatrix's estate to be ascertained.