AustLII

High Court of Australia

Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539 (8 April 1988)

HIGH COURT OF AUSTRALIA

 HAWKINS v. CLAYTON  (1988) 164 CLR 539

F.C. 88/012

Negligence - Limitation of Actions

High Court of Australia

Mason C.J.(1), Wilson(1), Brennan(2), Deane(3) and Gaudron(4) JJ.

CATCHWORDS

Negligence - Duty of care - Solicitor - Will held by solicitor - Failure to inform executor of death of testator and
of contents - Whether duty to do so - Loss to estate caused by executor's ignorance of death - Measure of
damages.
Limitation of Actions - Tort - Accrual of cause of action - Running of time - Commencement - Breach by
solicitor of duty of care to inform executor of testator's death - Loss to estate caused by executor's ignorance
of death - Limitation Act 1969 (N.S.W.), s. 14(1).

HEARING

1987, May 13.

1988, April 8. 8:4:1988

APPEAL from the Supreme Court of New South Wales.

DECISION

MASON C.J. AND WILSON J: We have had the advantage of reading the reasons for judgment prepared by
Deane J. Although we have reached a different ultimate conclusion, the extensive discussion by his Honour of
many aspects of the case relieves us from traversing much of the ground. We agree with the substance of all
that his Honour has written, save with respect to the matter to which we now refer.
2. This matter is fundamental to the resolution of the case. Deane J. concludes that, in failing to take any
positive steps to locate the executor, 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 respondents
failed to discharge the duty of care which it owed to him as the executor of her estate. His Honour finds the
source of that duty of care to rest in the relationship of proximity existing between the respondents and the
testatrix (and Mr Hawkins, in his capacity as executor) combined with the foreseeability of a risk of damage
arising from a failure to take reasonable care.

3. It is clear that any relationship of proximity that exists in this case would not have arisen but for the
professional relationship between the respondents and the testatrix. In determining the precise nature of the
relationship giving rise to the alleged duty of care, we find it helpful to start with the contract under which the
will was drawn and retained in the custody of the respondents. It is that contract which "indicate(s) the nature
of the relationship that gives rise to the common law duty of care" (Central Trust Co. v. Rafuse (1986) 31 DLR
(4th) 481, at p 521). Cf. Bowen v. Paramount Builders (1977) 1 NZLR 394, per Richmond P., at p 407. It was
said by Windeyer J. in Voli v. Inglewood Shire Council [1963] HCA 15; (1963) 110 CLR 74, at p 85, in the
context of ascertaining the duty of care which an architect owes to one who is a stranger to the contract
between the architect and the building owner, that the contract "is not an irrelevant circumstance. It
determines what was the task upon which (the architect) entered". So it is here. In the case of solicitors, the
remarks of Oliver J. in Midland Bank v. Hett, Stubbs and Kemp (1979) Ch 384, at pp 402-403, are particularly
pertinent:

"The extent of (a solicitor's duties to his client)

depends upon the terms and limits of (the) retainer

and any duty of care to be implied must be related

to what he is instructed to do.

his client are high, in the sense that he holds

himself out as practising a highly skilled and

exacting profession, but I think that the court

must beware of imposing upon solicitors - or upon

professional men in other spheres - duties which go

beyond the scope of what they are requested and

undertake to do."

4. The contractual terms upon which the will was left in the safe custody of the respondents were not
expressed by the parties to the contract and remain to be inferred or imputed. As Deane J. observes, a
number of terms can be readily inferred as a matter of actual intention. Either party could, during the life of the
testatrix, bring the bailment of the will to an end by reasonable notice to the other party. If the will remained in
the custody of the respondents when the testatrix died, they would maintain that custody until delivery to
some person entitled to possession of it. Furthermore, the respondents were authorized, in the event of them
having custody of the will after the death of the testatrix, to communicate its contents to any person having a
legitimate interest in them. We agree with Deane J. that, so far as the actual intention of the parties is
concerned, the contract goes no further than that.

5. If the respondents were under a contractual duty to take positive steps after the death of the testatrix to
ensure that effect be given to her testamentary intentions, such an obligation must be implied as a matter of
presumed or imputed intention. However, the implication of such a term is neither necessary for the
reasonable or effective operation of the contract in the circumstances nor so obvious that it goes without
saying. The problem which such an implied term would be seeking to redress - namely, the possibility that the
existence of the will and the executor's appointment therein as executor would not be known to him at the
time of the testatrix's death - could far more readily have been avoided by the testatrix taking the
commonsense course of informing the executor of the existence of the will and where it was to be found. The
instructions from the testatrix to the respondents did not encompass more than the preparation and execution
of the will and the safe custody of it by the respondents. It is not suggested in the present case that the terms
of the contract between the testatrix and the respondents were qualified or affected by any recognized
professional practice.

6. Returning to the question of liability in tort, the relevant inquiry is whether the professional relationship of
solicitor and client gave rise to a relationship of sufficient proximity founded upon an assumption of
responsibility by the respondents and reliance thereon by the testatrix. The context within which that inquiry is
made is a claim arising from a failure on the part of the respondents to act. In our opinion, the question must
be answered in the negative.

7. The linchpin of the finding of Deane J. of liability is the conclusion that in accepting responsibility for
custody of the testatrix's will after her death, the respondents effectively assumed the custodianship of the
testatrix's testamentary intentions. As we have said, we do not think that the contractual relationship alone is
sufficient to support such a conclusion. The absence of any contractual obligation to take positive steps after
the death of the testatrix to facilitate the implementation of her testamentary intentions makes it difficult to find
that the respondents assumed such a responsibility. We are unable to discern any other circumstance dehors
the contractual relationship between the testatrix and the respondents which could be said to have so
strengthened the professional relationship between them (and involving her executor) such as would import a
common law duty of care on the part of the respondents to take positive steps to ensure that the existence
and contents of the will were made known to the executor. We can see no basis for finding any assumption of
responsibility such as is alleged. There may be circumstances in which the law may imply a voluntary
undertaking to assume responsibility (see Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1963] UKHL 4;
(1964) AC 465, per Lord Devlin, at p 529) but in our opinion this is not such a case.

8. Nor is there any basis upon which it could be concluded that, if there were such an assumption of
responsibility, either the testatrix or her executor relied on it. The testatrix did not give any instructions for the
respondents to take positive steps. In 1973 she communicated with the respondents to mention the fact that
she had severed her relationship with the executor and principal beneficiary named in the will, and to say that
she intended to make a new will. A short time later the respondents reminded her that they were waiting for
instructions. The testatrix replied that she was still thinking about the terms of a new will and would get in
touch with the respondents in due course. That was the last occasion of any communication between them.
She died on 18 January 1975. There is nothing in the evidence to explain why she did not carry out her
expressed intenton to make a new will and there is simply no evidence to suggest that she was relying upon
positive action by the respondents to communicate with her executor after her death.

9. The consequences for other cases that may flow from a different conclusion could be far-reaching. There is
nothing particularly special about the circumstances of this case that would not be capable of application to
every solicitor having the custody of a will. If the fact of the custody is to make the practitioner the custodian of
the testator's testamentary intentions, it would seem to follow that he must take reasonable care to learn not
only of the whereabouts of the executor but also of the death of the testator. The obligation that thus arises
could extend over many years and prove onerous indeed. Further, is a solicitor to be held liable for inaction
when the executor knows of both the whereabouts of the will and his appointment as executor, but is not
aware of the testator's death? Where the named executor has predeceased the testator and there are no
family members or beneficiaries of the testator within the jurisdiction, what must a solicitor do? How far and
wide must he search? In our view, these matters are neither irrelevant nor fanciful. On the contrary, they
accurately test the correctness of determining liability in the present case on a finding that the respondents
assumed custody of the testatrix's testamentary intentions.

10. It was submitted for the appellant that the respondents came under a duty of care by reason of the actions
undertaken by them following the death of the testatrix. Those actions included advising a nephew of the
testatrix, Mr Ronald Lamb, in response to his request, of the contents of the will and taking steps, at his
request, to secure payment out of the estate for funeral expenses. The respondents also answered inquiries
made by relatives of the testatrix as to the contents of the will and, in the search for a later will, inspected
documents and made inquiries. These actions were taken in the context of a belief by the respondents, later
shown to be unfounded, that the executor had disappeared. They were taken on the instructions of Mr Lamb.
Years later, after Mr Hardwick, the solicitor dealing with Mr Lamb and the matter generally, had retired and
after the executor had been located by the respondents and had engaged new solicitors, the respondents
rendered an account on the estate for the services rendered after the death of the testatrix.

11. The difficulty which the appellant faces in mounting this submission is to establish a link between this
conduct of the respondents and a duty to take reasonable care by way of positive steps to locate the executor.
The only action initiated by the respondents was taken in response to Mr Lamb's representations to them. In
our opinion, their so-called intermeddling in the estate has no bearing on the existence or otherwise of the
requisite relationship of proximity between the testatrix or her executor and the respondents sufficient to found
the alleged duty.

12. Our conclusion then is that the respondents were not under any duty of care to Mr Hawkins, either in his
capacity as executor of the will of the testatrix or as a beneficiary. The appeal should therefore be dismissed.

BRENNAN J: The material facts are set out in the judgment of Deane J. Those facts give rise to a number of
questions. The first is: did Mr Hardwick send Mrs Brasier the original of her will on 27 September 1971 or did
Messrs Clayton Utz & Company ("the solicitors") continue to hold it until after her death? I agree with Deane J.
that the better view is that the solicitors continued to hold the original will until after Mrs Brasier's death, but I
would mention the evidence which, in my view, cogently supports that finding. If the original will had been
returned to Mrs Brasier the circumstances known to Mr Hardwick would have confirmed the presumption of its
subsequent revocation. But when Mr Hawkins applied for a grant of probate of a copy of that will, Mr Hardwick
and Mr Sullivan (another partner in the respondent firm) each swore an affidavit in support of the application.
Mr Hardwick deposed that a photostat copy of the will (not the original) had been sent to Mrs Brasier and he
annexed to his affidavit copies of two letters written by him, one dated 12 September 1978 the other dated 8
August 1979, referring, inter alia, to "the Will which we hold". Mr Sullivan's affidavit stated his belief that "the
xerox copies of the aforesaid Will ... were made by the firm after the deceased's death". Those affidavits,
made in 1981 in order to answer the question whether the instrument propounded for probate was a copy of
the last will of the testatrix, have much greater weight than Mr Hardwick's uncertain contrary impression when
he gave evidence at the trial of this action in 1984.

2. On that finding of fact, the next question is whether the solicitors were under a duty as custodian of the
original will to take steps promptly to inform Mr Hawkins as executor or as beneficiary of the existence of the
will. The plaintiff's statement of claim alleged that the solicitors owed Mr Hawkins a duty of care which the
solicitors breached by acting "without expedition" and in failing "to take any or any proper or adequate
measures to inform (Mr Hawkins) that he had been nominated as principal beneficiary and as executor of the
will of the late Melinda Ellen Brasier". Yeldham J. found there was no relevant duty of care. In the Court of
Appeal, the majority (Kirby P. and Glass J.A., McHugh J.A. dissenting) found it unnecessary to determine that
question, holding that any claim arising from breach of such a duty was statute barred. As time commences to
run under s.14(1)(b) of the Limitation Act 1969 (N.S.W.) from the date on which the cause of action first
accrues to the plaintiff or to the person through whom the plaintiff claims and as that date depends on a
precise understanding of the cause of action I must address the question whether the solicitors owed a duty to
Mr Hawkins, the person through whom the plaintiff (his widow and executrix) claims.

3. In the Courts below the plaintiff pleaded two causes of action each of which required proof of a duty owing
by the solicitors promptly to inform Mr Hawkins of the will: breach of contract and a tortious breach of duty.
The contract which the plaintiff sought to establish was a contract between Mr Hawkins and the solicitors. The
proposition that there was a contract creating such a duty seems to have been based chiefly on the
suggestion that the solicitors had purported to act on behalf of Mr Hawkins and that Mr Hawkins had ratified
their actions, the contract being inferred from the fact that Mr Hawkins met a demand for payment to the
solicitors of costs incurred by them before they informed Mr Hawkins of the will. The costs included items
relating to enquiries about Mr Hawkins and his whereabouts. It is not possible to infer from these
circumstances that the solicitors made a contract with Mr Hawkins by which they undertook a duty of care in
performing the professional services which they had performed before obtaining instructions from Mr
Hawkins. However, Yeldham J. found that a different contract was made between Mr Hawkins and the
solicitors. Mr Hawkins, for a brief period after being told of the will, had retained the solicitors to obtain probate
for him. But a finding of that retainer does not advance the plaintiff's case. The retainer could not be construed
as containing a term imposing retrospectively a duty of care on the solicitors or imposing on them a liability to
compensate Mr Hawkins for their earlier failure to tell him of the will. Contract between Mr Hawkins and the
solicitors may be put aside in considering whether there was any duty owed by the solicitors to Mr Hawkins to
inform him of the existence of Mrs Brasier's will. The fact is that there was no relevant relationship of solicitor
and client between the solicitors and Mr Hawkins.

4. Nor is there any evidence of a contract between the solicitors and the testatrix governing the solicitors'
obligations to disclose the will to the nominated executor or beneficiaries after the death of the testatrix. Had
there been such a contract, the benefit of the solicitors' promise would have passed on her death to her
executor, assuming the beneficial interest in any such promise was not conferred on him when the promise
was made: Marshall v. Broadhurst [1831] EngR 151; (1831) 1 C & J 403 (148 ER 1480). But it is unnecessary to
consider the possibility that a contract between the solicitors and the testatrix was the source of a duty owed
to Mr Hawkins to disclose the existence of the will after the death of the testatrix. No such contract was
pleaded; no such contract was relied on in the Courts below.

5. The more substantial cause of action which was litigated in the Courts below was a claim in tort for
damages for breach of a duty of care allegedly owing by the solicitors to Mr Hawkins. Though the duty for
which the plaintiff contends may be described as a duty of care, that description is not adequate to bring out
the nature of the duty which the plaintiff must establish. That is, a duty to act, a duty to disclose promptly to Mr
Hawkins the existence of the will. It is not a duty to be careful in doing something which, in the absence of
reasonable care, might foreseeably cause him loss. Nor is it a duty to be careful in giving him information in
reliance on which he intends to act in connection with some matter of business. The duty for which the plaintiff
necessarily contends is a duty to take some positive steps to find Mr Hawkins and inform him of the will, and
to take those steps promptly. The relevant circumstances out of which such a duty - I shall call it a duty of
disclosure - might arise are the solicitors' custody of the will after the death of the testatrix, the nature of the
will and its contents, the purpose for which the solicitors accepted custody of the will and the foreseeable
consequences of failure promptly to disclose the will to Mr Hawkins. To determine whether a duty of disclosure
arises out of these circumstances, it is helpful to recall the character of a solicitor's custody of a client's will.

6. A solicitor to whom a testator entrusts the custody of his will is a bailee of the will during the lifetime of the
testator. The solicitor is bound to deliver it to the testator at any time during his life - for the testator may wish
to alter it - and the solicitor can claim no lien upon it: Balch v. Symes (1823) Turn & R 87, at p 92 [1823] EngR
362; (37 ER 1028, at p 1030). Upon the death of the testator, the bailment is at an end. Walter J. in In re
Aebly's Will (1941) 29 NYS 2d 929, at pp 931-932; affirmed (1941) 31 NYS 2d 664, stated the change in the
character of the custody in this way:

" The mere fact of death works important

changes. There is no longer a bailor. The thing

bailed is transformed from an ambulatory

instrument into a muniment of title to property.

The bailment, as such, is at an end. The persons

entitled to the testator's property then have a

right to demand production and probate, not of

the ambulatory instrument that was bailed, but of

the muniment of their title, and the custodian

thereof is under a duty to comply with that

demand, but that right and that duty are a new

right and a new duty which arise by operation of

law and spring from the State's jurisdiction over

decedents' estates. They are not implied terms

of the contract of bailment, and before such new

duty can be said to exist knowledge or notice of

the fact which gives rise to it, the fact of

death, must be brought home to the person to be

charged with it."

From the time when the ecclesiastical courts enjoyed exclusive jurisdiction in probate matters, the custodian
of a will of a deceased testator has been compellable to produce it to the court. The law did not recognize a
solicitor's lien affecting that obligation: Georges v. Georges [1811] EngR 510; (1811) 18 VesJun 294 (34 ER 328).
In Lord v. Wormleighton [1822] EngR 477; (1822) Jac 580, at p 581 (37 ER 969) Lord Eldon L.C. said with
reference to a solicitor who has made a will for his client:
 " He engages to make an instrument effectual for

the purposes of the testator, which it cannot be

unless it is produced elsewhere. There is no

pretence for any lien."

7. Since the Court of Probate Act 1857 (U.K.) (20 & 21 Vict c77, s.26), the obligation to produce has been
statutory: see the Wills, Probate and Administration Act 1898 (N.S.W.), s.150, which authorizes any person to
make an application for an order that any testamentary writing be brought into the registry. Orders have been
directed to an executor (In the Goods of Shepherd (1891) P 323, at p 326) and to a solicitor retained by a
person claiming a right to have custody of the will: In the Estate of Harvey (1907) P 239. In the latter case, Sir
Gorell Barnes P. (at p 240) explained why no claim of professional privilege is recognized: "The will does not
belong to the client, but to the Court". It follows that a solicitor who has custody of a deceased testator's will
does not hold it under any retainer he may have had from the testator and his custody under any retainer from
a living person is subject to his obligation to bring it into the registry when ordered to do so. It may be that he
is entitled to bring the will of a deceased testator into the registry without waiting for instructions from the
executor (see s.30 of the Wills, Probate and Administration Act which is modelled on s.66 of the Court of
Probate Act 1857 (U.K.)), but it is not necessary to consider that question in this case.

8. The successful concealment of a deceased testator's will precludes enjoyment of the interests in property
created by the will. For that reason, the criminal law has proscribed the concealment of a will for any
fraudulent purpose: see the Crimes Act 1900 (N.S.W.) s.135. The need for such an offence was perceived
even in Roman times: see Sir James Stephen, A History of the Criminal Law of England (1883), vol.1, p 20
and, for later history, vol.3, p 148; s.22 of the Larceny Act 1829 (U.K.) (7 & 8 Geo IV, c.29) and Russell on
Crime, 12th ed., vol.2, pp 901-902. A testator who wishes to safeguard his executor against the possibility of
concealment has a facility available to him under s.32 of the Wills, Probate and Administration Act. That
section provides for the depositing of a will during the lifetime of a testator and casts on the registrar a duty on
the testator's death to deliver the will to the executor named in it. That Act does not impose a corresponding
duty on any other custodian of a will, so the question remains whether the law otherwise creates such a duty
or at least a duty to take some steps to inform an executor of the existence of the will and the custody out of
which he can secure its delivery.

9. Consider the usual purpose for which a testator entrusts custody of his will to his solicitor (or, for that
matter, to some other custodian of wills). The usual purpose is for safekeeping both before and after death so
that, after death, the will can be produced in order that it may be made effectual. That is the purpose for
which, in the ordinary case, custody is accepted. But if the executor is ignorant of the will, he will not call for
production of the will nor will he enter upon administration of the estate. If the custodian of the will has
reasonable grounds for believing that the executor is ignorant of the will, it is foreseeable that non-disclosure
of the will to the executor will result in the will not being produced and not being made effectual. Unless some
duty of disclosure be imposed on the custodian and be discharged by him, the will would have to continue in
the custodian's safekeeping indefinitely, and the purpose for which the custodian accepted custody would go
unfulfilled. Some duty of disclosure must be imposed on the custodian. That is not to infer a contract or
undertaking to disclose from acceptance of custody; it is merely to regard the acceptance of custody for the
stated purpose as material to the existence of a duty. The duty of the custodian "is cast upon him by law, not
because he made a contract, but because he entered upon the work", as Windeyer J. said of an architect in
Voli v. Inglewood Shire Council [1963] HCA 15; (1963) 110 CLR 74, at p 85. It is the nature of the instrument
which the custodian accepts for safekeeping which gives the relevant character to the work on which the
custodian has entered.

10. After the death of a testator, the will is not the testator's instrument of title to his property. Ex hypothesi, the
property is no longer his. Statute apart, the will of a deceased testator is an instrument which, subject to the
executor's right to renounce the office of executor, creates in the executor the proprietary rights of the owner
of the estate as from the death of the testator (Hollis v. Smith (1808) 10 East 293, at p 295 [1808] EngR 363;
(103 ER 786, at p 787); Meyappa Chetty v. Supramanian Chetty (1916) 1 AC 603, at pp 608-609; Ryan v.
Davies Bros. Ltd. [1921] HCA 53; (1921) 29 CLR 527, at p 536), albeit executors "are but ministers and
dispensers of the goods of the dead": Pinchon's Case [1572] EngR 289; (1611) 9 CoRep 86b, at p 88b [1572]
EngR 289; (77 ER 859, at p 863). It may be that by reason of s.61 of the Wills, Probate and Administration Act,
the real and personal estate of a deceased testator is vested in the Public Trustee from the death of the
deceased until probate; but s.44 provides that, upon a grant of probate to the executor, the real and personal
estate of a testator becomes vested in the executor as from the death of the deceased. The vesting of legal
title to the estate is one thing; knowledge of the title is another. Wherever the title to the estate may formally
vest on the death of a testator, the executor needs to know of the will and its contents before he can accept
the office and undertake administration of the estate in accordance with the will. Knowledge of the will and its
contents by the executor is necessary to make the will effectual. If the custodian owed no duty to disclose the
will to the executor, it would be legitimate for the custodian by silence to deny enjoyment of the estate to the
person entitled to it. That result is inconsistent with the purpose for which custody was accepted. Some duty
to disclose must exist, but it does not arise simply from foreseeability of loss if no disclosure takes place. The
duty is a duty to act and such a duty needs more than foreseeability of loss to summon it into existence. I
venture to recall what I said in Sutherland Shire Council v. Heyman [1985] HCA 41; (1985) 157 CLR 424, at p
479:

" Foreseeability of an injury that another is

likely to suffer is insufficient to place me

under a duty to him to act to prevent that

injury. Some broader foundation than mere

foreseeability must appear before a common law

duty to act arises. There must also be either

the undertaking of some task which leads another

to rely on its being performed, or the ownership,

 occupation or use of land or chattels to found

the duty: cf. Windeyer J. in Hargrave v. Goldman

[1963] HCA 56; ((1963) 110 CLR 40, at p 66)."

In my opinion, a duty of disclosure arises from custody of the will after the death of the testator, the nature of
the will and the purpose for which custody is accepted as well as from the foreseeable consequences of non-
disclosure.
11. Analogous duties are not numerous, for the occasions are few when a person with an interest in property
needs to be told of it in order to be able to enjoy it. In Hawkesley v. May (1956) 1 QB 304, Havers J. held that
the trustees under a deed of settlement had a duty to inform a beneficiary, on his attaining his majority, that he
had an interest in the capital and income of the funds of the trust. His Lordship accepted that he was bound
by the rule in In re Lewis. Lewis v. Lewis (1904) 2 Ch 656 that, in the absence of a direction in the will, an
executor owes no duty to inform a legatee of the terms of a legacy even though the executor takes a
beneficial interest in the legacy in the event of the legatee's failure to satisfy a condition attached to the legacy
- a rule which Havers J. said had "no attraction for me on the merits": p 322. However, his Lordship was able
to distinguish between an interest taken under a public document (a will in Somerset House) and a private
document (a trust deed). The ground of distinction may seem tenuous; another ground of distinction may be
that an executor's duty is to distribute to legatees who are entitled rather than to assist them to satisfy
conditions of entitlement. However that may be, the duty imposed in Hawkesley v. May is analogous to the
duty of disclosure which, in my opinion, arose in the circumstances of this case. It may be that there is a
broad principle, founded on general standards of honesty and fair dealing, that some duty of disclosure is
imposed on one who holds the property of another or an instrument of title to the property of another as a
bare custodian or trustee when the other does not know of his entitlement to the property and the holder has
reason to believe that the other does not know of his entitlement. In appropriate circumstances, such a broad
principle would support a duty of disclosure owed by the custodian of a deceased testator's will to a
beneficiary when the nominated executor is dead or cannot be found or renounces the office of executor. That
duty does not need to be considered in this case; in this case, the nominated executor accepted the office. An
executor's assumption of office is inconsistent with any further duty of disclosure. Thereafter the duty of
making the will effectual is his to discharge.

12. The law imposes the duty on the custodian of a deceased testator's will for the protection of the executor
and, derivatively, for the protection of the beneficiaries. It is not a duty owed to the deceased testator. The
damage suffered in consequence of a breach of the duty is not a loss of title to the assets in the estate nor a
loss of the executor's right to possession of the assets. A breach of the duty does not infringe any proprietary
or possessory rights vested in the executor by the will. The loss is a loss of the exercise or enjoyment of the
rights of ownership by an executor who does not know of his entitlement. As such a loss increases with the
passing of time, the duty to disclose is a duty to disclose promptly.

13. The extent of the duty to disclose promptly is not at large: it is limited by reference to the purpose of
making the will effectual. If the executor knows of the will, its contents and its custody, further disclosure by
the custodian is not needed. And when disclosure is required, the steps which need to be taken are those
which are reasonable in the circumstances including the contents of the will, the custodian's knowledge and
means of knowledge of the identity and location of the parties interested under the will and of their relationship
with one another. The cost of extensive enquiries and the expected value of the estate are relevant
considerations in determining what steps are reasonable. The cost of reasonable enquiries is a cost incurred
to make the will effectual and, I should think, a testamentary expense which the executor would be authorized
to pay out of the estate in due course: see Hurst v. Hurst (1886) 12 VLR 93, at p 99; and cf. In re Vincent.
Rohde v. Palin (1909) 1 Ch 810. I would state the common law duty which a custodian of a deceased testator's
will owes to the executor named in the will in this way: where the custodian has reason to believe that
disclosure by him to the executor of the existence, contents or custody of the will is needed in order that the
will may be made effectual, the custodian is under a duty promptly to take reasonable steps to find, and to
disclose the material facts to, the executor.

14. Such a duty would seldom be onerous to discharge. In earlier times, the summoning of interested parties
to a formal reading of the will was no doubt a means of discharging the solicitor's duty as custodian in many
cases. Nowadays, the formality may be dispensed with but, if some other reasonable and available steps are
not taken to make disclosure when disclosure is needed in order that the will may be made effectual, and the
executor's exercise or enjoyment of his rights in respect of the estate is adversely affected thereby, the
custodian may be liable in tort to the executor.

15. I am conscious that it has been said in recent judgments of this Court that the existence of a duty of care
depends on whether the requisite relationship of proximity exists between a person who is said to owe the
duty and a person to whom the duty is said to be owed and that I have not adopted that approach in
determining whether a duty of disclosure exists in this case. The notion of proximity as I understand it is
simply Lord Atkin's neighbourhood principle which depends on the reasonable foreseeability of loss. Others
have understood the notion to subsume foreseeability within a wider concept underlying the wide variety of
cases which may be gathered under the heading of "negligence". In deference to majority judgments in this
Court, I would be constrained to enquire whether "the requisite relationship of proximity" existed if that phrase
defined a legal criterion of such precision that it answered the question whether, in the present circumstances,
a duty of care exists. I do not understand the wider concept of proximity to furnish a test for determining
whether the particular facts of a case give rise to a duty of care. In San Sebastian Pty.Ltd. v. The Minister
[1986] HCA 68; (1986) 162 CLR 340, at pp 367-369, I explained the difficulties I see in attempting to apply the
wider concept of proximity to the facts of a particular case. Lacking the specificity of a precise proposition of
law, the wider concept remains for me a Delphic criterion, claiming an infallible correspondence between the
existence of the "relationship of proximity" and the existence of a duty of care, but not saying whether both
exist in particular circumstances. When the existence of a duty in a new category of case is under
consideration, the question for the court is whether there is some factor in addition to reasonable
foreseeability of loss which is essential to the existence of the duty: see Jaensch v. Coffey [1984] HCA 52;
(1984) 155 CLR 549, at pp 575-577. In many of the new categories of case in which a duty has been held to
exist, reasonable foreseeability of loss has not been sufficient in itself to give rise to a duty to act or to abstain
from acting in order to avoid the loss. In a case where a novel category of duty is proposed and the factors
which determine its existence must be identified, the court may have regard to a variety of considerations: the
nature of the activity which causes the loss, the nature of the loss, the relationship between the parties and
contemporary community standards (especially where liability for breach of the proposed duty would be
disproportionate to the risk which a person might reasonably be expected to bear as an incident of engaging
in the particular activity if no limiting factor were identified). In Sutherland Shire Council v. Heyman (at p 481) I
suggested that it is preferable for the law to develop new categories of negligence incrementally and by
analogy with established categories, for the established categories provide firm evidence of the kinds of
factors which condition the existence of the various categories of duties. It is one thing to speak in general
terms about the considerations which affect the development of the law; it is another to define the law as
developed. In a novel category of case, when it appears that the proposed duty depends on some factor
additional to reasonable foreseeability of loss, the additional factor must be identified. In my opinion, the
identification must be sufficiently precise to permit the tribunal of fact (whether judge or jury) to ascertain the
existence of the relevant factor or factors: see San Sebastian Pty.Ltd. v. The Minister, at pp 367-368. Indeed, it
is only by reference to factors so precisely identified that it is possible to define the nature and content of the
proposed duty. And it is only by reference to the nature and content of a duty that it is possible to define the
elements of the cause of action in tort for its breach. Having defined the duty of disclosure owed by the
custodian of a deceased testator's will to the executor named in the will, it is necessary next to turn to the
elements in the cause of action for its breach.

16. The elements which are essential to the existence of a cause of action for breach of a duty of disclosure
owed to an executor include, of course, damage. The nature of the damage which a breach is apt to cause
discloses other elements in the cause of action. The damage caused by breach of a duty of disclosure owed
to an executor can flow only from his ignorance of the will or its contents or its custody. That ignorance
prevents his assumption of the office of executor. It may be tautologous to say that the executor's ignorance of
the will or its contents or its custody is an element in the cause of action founded on breach of the duty. After
all, if the executor knows of the will, its contents and its custody, he cannot establish the necessary causal
relationship linking a breach of the duty of disclosure and any loss occasioned by his failure to exercise or
enjoy his rights in respect of the estate. Once the executor knows the material facts, no further failure to
disclose on the part of the custodian can be productive of damage. The damage recoverable for breach of the
duty of disclosure thus exhibits uniformly this feature: the damage caused by the breach of duty is generated
by events occurring when the executor is ignorant of his title to the estate and before he has elected whether
or not to renounce the office of executor. The damage recoverable for breach of the duty also exhibits
uniformly a further feature: the damage is not caused by an infringement of the proprietary or possessory
rights of the executor in respect of the assets in the estate. The executor's proprietary or possessory rights
are unaffected, but they are not enjoyed or exercised. The cause of action arising from a breach of a duty of
disclosure has a different origin from a cause of action arising from an infringement of the proprietary or
possessory rights of the executor over the assets in the estate. It does not devolve on the executor as an
asset in the estate of the testator. Nor does it arise out of the executor's administration of the estate. To the
contrary, it arises out of his failure to enter upon the administration of the estate. Though the cause of action
enures for the benefit of the estate, it is not complete when the estate suffers loss by reason of the nominated
executor's failure to enter upon administration of the estate: he may renounce the office and never enter upon
administration of the estate.

17. Although the title of an executor to the assets in the estate is derived from the will - I leave aside s.61 of the
Wills, Probate and Administration Act as immaterial to the point under discussion - the proprietary and
possessory rights derived from the will are not the source of the executor's cause of action for breach of a
duty of disclosure. In the event of an effective renunciation of office by the person appointed as executor, the
title to the estate - including the title to causes of action which survive the death of the testator - devolves as
though that person had not been appointed as executor (Williams on Executors, 14th ed. (1960), vol.1, p 48).
But the law of torts makes no provision for the divesting of a cause of action for damages for breach of duty. It
would be absurd to postulate the vesting of a cause of action for damages for breach of a duty of discharge in
a person who, though nominated as executor, is able to renounce and renounces the office. Until the person
nominated as executor elects to accept the office or precludes himself from renouncing it - that is, until that
person assumes the office of executor - it is uncertain whether he will be the one to suffer loss as executor. It
is only on his assumption of the office of executor that his cause of action is complete. Only then can it be said
that any damage to the estate caused by his failure to enter upon administration of the estate is in fact
suffered by him as executor. A duty of disclosure, breach, ignorance of the will or its contents or custody,
resultant failure to enter on the administration of the estate, resultant loss to the estate and assumption of
office as executor must co-exist in order to establish the cause of action.

18. In this case, the only elements in doubt were the duty of disclosure and breach. For the reasons stated,
the solicitors were under a duty of disclosure. The next question is whether they were in breach.
19. To establish breach, the plaintiff had to prove that there were reasonable steps which Mr Hardwick might
have taken to find Mr Hawkins and which, if he had taken them, would have avoided the loss which Mr
Hawkins suffered as executor. It is clear that any loss suffered by Mr Hawkins as executor could have been
avoided if Mr Hardwick had consulted the telephone directory - which contained an entry under Mr Hawkins'
name at all material times - and had telephoned him promptly after learning of Mrs Brasier's death. If evidence
of the obvious were needed, the evidence of Mr Windeyer established that consultation of the telephone
directory was a reasonable step to take. Had Mr Hawkins been informed of the will promptly, none of the items
by reference to which the plaintiff seeks to quantify the loss claimed would have been suffered. The relevant
items consist in the deterioration of a house property (the principal asset in the estate), the removal or
destruction of furniture that was in the untended house, the loss of any rent which should have been paid by
Mr Lamb (a nephew of the testatrix) in respect of his unauthorized occupancy of the house, the loss of income
which might have been derived from the house and a penalty incurred for late lodgment of a return for death
duty. These items occurred between January 1975 when the solicitors learnt of Mrs Brasier's death and March
1981 when they informed Mr Hawkins of the will. There is no reason to suppose that, if Mr Hawkins had been
informed of the will promptly he would not have promptly accepted the office of executor, taken possession of
the estate, occupied or let the house and made a death duty return in due time. When Mr Hawkins was
informed of his unexpected windfall, that is what he proceeded to do though it was too late to avoid the
penalty on the late return.

20. The breach of the solicitors' duty was not an absolute failure to take reasonable steps to inform Mr
Hawkins of the will; in March 1981 such steps were taken and Mr Hawkins was informed. The solicitors' breach
of duty consisted in a failure to take reasonable steps to inform Mr Hawkins promptly. The information given to
Mr Hardwick no doubt diverted his attention from pursuing the search for Mr Hawkins through the telephone
directory or other address lists available for public inspection. Though the diversion serves to explain the
failure to inform Mr Hawkins of the will promptly, it provides no excuse.

21. The natural and foreseeable consequence of the solicitors' failure to inform Mr Hawkins of the will promptly
was that, when Mr Hawkins accepted the office of executor and came into possession of the estate, he had
lost the benefit of possession of the estate which he would have had as executor if the solicitors had informed
him of the will. That loss must be distinguished from other and different losses which arose by infringement of
the proprietary or possessory rights which devolved on Mr Hawkins as executor. The loss caused by the
solicitors' breach of duty may be assessed by reference to, but is not, the rent which ought to have been paid
by Mr Lamb for his unauthorized occupation of the house or the damage done to the house by unknown
vandals or the loss of furniture occasioned by unknown persons who stole or broke the furniture. The executor
may have causes of action against the persons responsible but he is not required to enforce them in
exoneration of the solicitors' liability. What the plaintiff is entitled to recover from the solicitors is compensation
for the loss flowing from the delay in Mr Hawkins' taking possession of the estate as executor. The period of
his being out of possession by reason of the solicitors' breach of duty to inform him promptly commences from
the time when, if they had performed their duty, he would have been informed of the will and would have been
able to take possession of the estate; it terminates when he was able to take possession of the estate after
being informed of the will. Neither date has been precisely found, though it is likely that the period
commenced at some time in 1975 and ended in March 1981. No assessment has been made of the loss
sustained by Mr Hawkins as executor in being out of possession during this period, nor has a formal finding
been made that the penalty for late lodgment of the death duty return is a loss caused by the solicitors' breach
of duty.

22. In the Court of Appeal the majority did not find it necessary to consider these questions. The majority did
not find a breach of duty but, assuming in the plaintiff's favour that the solicitors were guilty of negligence,
their Honours held that any cause of action in negligence was extinguished by operation of s.14(1)(b) and s.63
of the Limitation Act. In my opinion this Court should now find that there was a breach of duty and that it
caused some loss. But that finding will prove a Pyrrhic victory for the plaintiff if the action is statute barred.
That leads us to the final question.

23. The solicitors in their defence pleaded that the action was statute barred and in argument they rely on the
Limitation Act as an ultimate defence if it should be found that they were otherwise liable for breach of duty.
The submission made on their behalf is that the damage caused by any breach of duty on their part began in
1975 or, in any event, not later than six years before the action was commenced on 22 November 1982. By
November 1976 at the latest, so the argument goes, the period of limitation had commenced to run so that the
plaintiff's cause of action was extinguished by the time the solicitors told him of the will or within a relatively
short time afterwards. Of course, the injustices occasioned by statutes of limitation have been seen in many
cases (see, for example, Cartledge v. E. Jopling & Sons Ltd. (1963) AC 758 where time was held to run before
the plaintiff discovered that he had contracted compensable pneumoconiosis) and have led to modification of
the bar in personal injury cases: see Pt III Div.3 of the Limitation Act. Wilson J. in Kamloops v. Nielsen (1984) 2
SCR 2; (1984) 10 DLR (4th) 641 observed that "perhaps the most serious concern is the injustice of a law
which statute-bars a claim before the plaintiff is even aware of its existence": p 40; p 685. It would not be
surprising if the application of s.14(1)(b) of the Limitation Act to cases of economic loss sometimes worked an
injustice. The Act may be pleaded by a defendant whether its operation will serve the ends of justice or not.
This was not a case in which the plaintiff's claim depended on a contest between the contradictory
recollections of opposing witnesses whose memories were likely to be dimmed by the passage of time; nor
was it a case where a disputed claim had been allowed to lie dormant while the limitation period ran. It was a
case in which the whole of the material evidence as to breach of duty came from the solicitors themselves and
from their own documents. Yet, if the argument founded on the Limitation Act is right, the solicitors' breach of
duty, persisted in throughout all or most of the limitation period, has successfully produced an exemption from
their liability to compensate an executor for loss which their breach of duty caused. It is not an attractive
argument. If the argument be right, there is an incentive for a solicitor whose breach of a duty imposed by law
causes damage to an executor to conceal it from the executor until six years have passed, even though
further damage may accrue from day to day so long as the concealment continues. The argument does not sit
easily with the public perception, sedulously cultivated by professional societies, that the professional
standards of solicitors assure substantial protection in the administration of the estates of deceased clients.
The argument is no more attractive if it is advanced at the insistence of professional insurers. The terms of a
policy which is apt to qualify the protection expected by the public are a matter of private contract or perhaps
of negotiation by professional societies.

24. Whether the raising of the Limitation Act in a case like the present is regarded as appropriate or not, the
issue raises questions which depend on the answer to a technical question: when does a cause of action in
tort for breach of a duty to disclose first accrue? The majority of the Court of Appeal held that such a cause of
action first accrues when damage occurs irrespective of the claimant's knowledge (per Kirby P.) or as soon as
the wrongful act has caused some damage beyond what can be regarded as negligible (per Glass J.A.).
There is no doubt that most causes of action for negligence first accrue when the plaintiff first suffers damage
caused by the defendant's breach of duty. The ordinary rule is restated in Cartledge v. E. Jopling & Sons Ltd.
in terms reproduced by Glass J.A. in the Court of Appeal. Difficulties in applying the rule have been
encountered in England in cases where damage has occurred on land or defects have occurred in the
construction of buildings, but there is no reason to doubt the applicability of the orthodox view: see the
discussion in Sutherland Shire Council v. Heyman, at pp 489-494. There are some observations in State of
South Australia v. Johnson (1982) 42 ALR 161 which suggest that time runs from discovery of damage rather
than from the occurrence of damage, but those observations are to be accounted for by the conventional
basis on which the parties chose to fight the case - a basis which precludes the judgment in that case from
being treated as a rejection of established legal principle. This case, however, is not an ordinary case in which
a plaintiff seeks damages for negligence. For reasons earlier stated damage is not temporally the last element
of the cause of action to occur. Unlike the ordinary case, the last element to occur in a case of the present
kind is the nominated executor's assumption of the office of executor. Until that occurs, the cause of action is
not complete. For the purposes of s.14(1)(b) of the Limitation Act, "time runs from the accruer of the cause of
action, but a cause of action does not accrue unless there be some one who can institute the action":
Meyappa Chetty v. Supramanian Chetty, at p 610; and see Thomson v. Clanmorris (Lord) (1900) 1 Ch 718, at
pp 728- 729. Until the nominated executor assumes the office of executor, the cause of action does not accrue
and time does not begin to run. If a cause of action is itself an asset which devolves on the executor or arises
from an infringement of the proprietary or possessory rights of an executor in respect of the estate, the
executor's ignorance of his title would not prevent the time from running: cf. Knox v. Gye (1872) LR 5 HL 656.
But where no action can be brought by the nominated executor until he assumes office, time runs only from
that event. Time commenced to run in this case only from Mr Hawkins' assumption of the office in March 1981.
The action was commenced within six years thereafter. The defence based on the Limitation Act fails.

25. The appeal must be allowed accordingly. There must be judgment for the plaintiff for damages to be
assessed by the Supreme Court unless the parties can agree on an assessment.

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.

2. 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.

3. 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.
4. 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.

5. 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.
6. 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.

7. 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.

8. 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
(N.S.W.), 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.

9. 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.

10. 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.

11. 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."

12. 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] EngR 1157;
(1836) 1 Moo 299 (12 ER 828); McCauley v. McCauley [1910] HCA 16; (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.

13. 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.

14. 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.

15. 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.

16. 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?

17. 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.

18. 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] HCA 64; (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] HCA 40; (1977) 52 ALJR 20, at p 26; [1977] HCA 40; 16 ALR 363, at p 376; Secured Income Real Estate
(Australia) Ltd. v. St. Martins Investments Pty. Ltd. [1979] HCA 51; (1979) 144 CLR 596; Codelfa Construction
Pty. Ltd. v. State Rail Authority of N.S.W. [1982] HCA 24; (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 [1976] UKHL 1; (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.

19. 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. [1956] UKHL 6; (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)
20. 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.

21. 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.

22. 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. [1963] UKHL 4; (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] EWCA Civ 4; (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] HCA 84; (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] HCA 15; (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 [1931] UKHL 3; (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."

23. 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] HCA 73; (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] HCA 12; (1980) 146 CLR 40, at p 44; Jaensch v. Coffey [1984] HCA 52; (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] HCA 41; (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] HCA 68; (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.
24. 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 (N.S.W.) 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.

25. 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).

26. 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.

27. 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.
28. 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.

29. 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.

30. 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.

31. 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.

32. 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 [1976] UKHL 1; (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.

33. 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.

34. 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.

35. 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; [1860] EngR 451;
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.

36. 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.

37. 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.

38. 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".

39. 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.

40. 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] HCA 41; (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).

41. 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.

42. 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.

43. 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.

44. 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.

GAUDRON J: The facts and circumstances giving rise to this appeal are set out in the judgment of Deane J. I
need not repeat them. For the reasons given by his Honour, I agree that the questions raised on this appeal
should be answered on the basis that Messrs Clayton Utz & Company ("the respondents") had custody of the
original will of Mrs Melinda Ellen Brasier ("the testatrix") at the time of her death. I agree also, and for the
reasons given by his Honour, that any damage sustained by reason of the matters complained of by the
plaintiff ("the appellant") was sustained by her late husband, Mr Hawkins, in his capacity as legal personal
representative of the estate of the testatrix.

2. The present action was instituted by Mr Hawkins in his capacity as executor of the estate of the testatrix as
well as in his personal capacity and has been continued by his executrix. No objection is made to this Court
treating the action as brought by Mr Hawkins in his representative capacity. Accordingly the questions which
arise on this appeal may be confined to a consideration of whether any relevant duty of care was owed by the
respondents to Mr Hawkins as executor of the estate of the testatrix, and if so, whether the resulting cause of
action was barred by s.14(1) of the Limitation Act 1969 (N.S.W.) before the action was commenced on 22
November 1982.

3. In the development of the modern law of negligence the main focus has been on the ascertainment of a
duty of care owed by one person to another by reason of a relationship of proximity between them, and the
identification of the content of that duty. This development has recognized that an aspect of the duty of care
that may arise in relation to another's person or property could involve the requirement that care be exercised
in the provision of information. See, for example, Wyong Shire Council v. Shirt [1980] HCA 12; (1980) 146 CLR
40. It has also been recognized that a duty of care may arise in relation to a plaintiff's interest where
interference with this interest results in economic loss alone, and such a duty may require the exercise of care
in the provision of information. Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1963] UKHL 4; (1964) AC
465; Mutual Life & Citizens' Assurance Co. Ltd. v. Evatt [1968] HCA 74; (1968) 122 CLR 556; Mutual Life &
Citizens' Assurance Co. Ltd. v. Evatt [1970] UKPCHCA 2; (1970) 122 CLR 628; San Sebastian Pty. Ltd. v. The
Minister (1986) 162 CLR 341. So too, where a duty of care is owed in relation to another's person or property
the duty may require disclosure of information: see, for example, O'Connor v. Commissioner for Government
Transport [1954] HCA 11; (1954) 100 CLR 225, at p 229. Where a duty of care is owed and the loss is purely
economic, there is no reason in principle why a disclosure of information cannot be required to comply with
this duty: see Sutherland Shire Council v. Heyman [1985] HCA 41; (1985) 157 CLR 424, per Deane J. at pp 503
and 505; Norwest Refrigeration Services Pty. Ltd. v. Bain Dawes (W.A.) Pty. Ltd. [1984] HCA 59; (1984) 157
CLR 149. Failure to disclose is simply an omission which, as was pointed out by Gibbs C.J. in Heyman (at pp
443-444), does not necessarily preclude the imposition of liability in negligence.
4. It is trite law that the existence of a duty owed by one person to another connotes a corresponding right in
that other person. In Seale v. Perry and Anor. [1982] VicRp 19; (1982) VR 193 Sir George Lush expressed this
idea in the context of an action for negligence stating that "(a) duty, however, cannot exist by itself. To the duty
seen as imposed on the defendant, there must be a correlative right in the plaintiff: for either to exist, both
must be capable of being identified" (at p 200). Thus the duty to exercise care in the imparting of information
imports a right in the recipient to receive such information as would be possessed or ascertained by persons
in the position of the information giver in the exercise of reasonable skill or knowledge. So too, a duty to
disclose or volunteer information imports a right in another to receive that information. At base the right which
exists by reason of a duty of care in relation to the provision of information is the same whether it is an act or
an omission which constitutes a breach of that duty.

5. However, there is a special problem when it is sought to recover damages for economic loss by reason of a
failure to disclose or volunteer relevant information. That difficulty lies in the importance which has been
ascribed to reliance as indicative of a relationship of proximity sufficient to give rise to a duty to exercise care
in the giving of information where the damage suffered is economic loss. The problem was identified in the
judgment of Gibbs C.J., Mason, Wilson and Dawson JJ. in San Sebastian, at p 355, where it was stated:

"The notion of proximity, because it limits the

loss that would otherwise be recoverable if

foreseeability were used as an exclusive criterion

of the duty of care, is of vital importance when

the plaintiff's claim is for pure economic loss.

When the economic loss results from negligent

misstatement, the element of reliance plays a

prominent part in the ascertainment of a

relationship of proximity between the plaintiff and

the defendant, and therefore in the ascertainment

of a duty of care. But when the economic loss

results from a negligent act or omission outside

the realm of negligent misstatement, the element of

reliance may not be present. It is in this sphere

that the absence of reliance as a factor creates an

 additional difficulty in deciding whether a

sufficient relationship of proximity exists to

enable a plaintiff to recover economic loss."

6. It may be that in a particular context failure to disclose some matter where other information is being
imparted brings about a situation, foreseeable by the information giver, which amounts to the recipient treating
that non-disclosure as a statement of some relevant fact. Shaddock & Associates Pty. Ltd. v. Parramatta City
Council (No.1) [1981] HCA 59; (1981) 150 CLR 225 was such a case. In those circumstances reliance may be
an appropriate and sufficient test of proximity. There may be other situations in which, although non-disclosure
cannot in its context be regarded as equivalent to misstatement, the failure to disclose may give rise to a
liability because of the reliance by the injured party upon care being taken to disclose all relevant information
in circumstances where the other party ought to know of such reliance, whether or not that other party
assumed a responsibility to impart all relevant information. Certainly that must be a possibility if assumption of
responsibility and reliance are possible alternatives and not cumulative criteria for the relationship of proximity,
as appears to have been accepted by Deane J. in Heyman (at p 498) and in the joint judgment in San
Sebastian (at p 357).

7. Reliance and assumption of responsibility are not the sole or necessary determinants of proximity. In
Heyman (at p 498) Deane J., in whose judgment in Jaensch v. Coffey [1984] HCA 52; (1984) 155 CLR 549 the
requirement for proximity was forcefully re-asserted, stated that "(b)oth the identity and the relative importance
of the factors which are determinative of an issue of proximity are likely to vary in different categories of case."

8. I apprehend that the present case is in a different category from the cases of economic loss referable to
negligent misstatement or failure to disclose which have hitherto attracted the consideration of this Court. The
economic loss sustained by Mr Hawkins was sustained in conjunction with and in consequence of the
impairment of a legal right, viz. his right to exercise the powers of executor inhering in him as named executor
of the will of the testatrix. The right was impaired because he did not know that the testatrix had died leaving
in the custody of the respondents a will appointing him sole executor.

9. The law of tort already protects contractual rights from intentional interference: Lumley v. Gye (1853) 2 El &
Bl 216; (118 ER 749). The torts of trespass, conversion, detinue and slander of title are intimately concerned
with the protection of legal rights accruing by reason of ownership or possession of property. It seems to me
that where the act or omission complained of amounts to an interference with or impairment of an existing
right which is known or ought to be known to the person whose acts or omissions are called into question then
the issue of proximity may be open to determination by reference to factors somewhat different from those
applicable where economic loss is occasioned without infringement or impairment of an otherwise recognized
right. Of course that determination must be undertaken in accordance with the processes of legal reasoning
and not divorced from consideration of what is fair and reasonable or from considerations of public policy
relevant to the requirement of proximity: (Heyman, per Deane J. at p 498; Stevens v. Brodribb Sawmilling Co.
Pty. Ltd. [1986] HCA 1; (1986) 160 CLR 16, per Deane J. at p 52). However, it may be that the factors which I
would regard as determinative of the issue of proximity in the present case are not materially different from
those applicable where a duty is asserted in relation to the provision of information as the basis of an
entitlement to recover damages for economic loss.
10. It is now accepted that liability for negligent misstatement causing economic loss involves application of
the general principles of negligence: San Sebastian, in the joint judgment at pp 354-355; Heyman, per Deane
J. at p 502; Cook v. Cook [1986] HCA 73; (1986) 162 CLR 376, at p 382. The basis of that liability is the rule
expressed in Donoghue v. Stevenson [1931] UKHL 3; (1932) AC 562, at p 580 that a person "must take
reasonable care to avoid acts or omissions which (he) can reasonably foresee would be likely to injure (his)
neighbour". If the statement of duty is transposed into a statement of right it constitutes an acknowledgment of
a right not to be injured by or in consequence of the acts or omissions of one's neighbour in circumstances
where the injury is reasonably foreseeable by that neighbour. It must be emphasized that it is the relationship
of neighbour which is critical to the existence of a right not to be injured by or in consequence of the acts or
omissions of another for reasonable foreseeability alone does not necessarily result in the imposition of a duty
of care: Heyman, at pp 466-467 and 477-479; San Sebastian, at p 355; Cook v. Cook, at p 382. Whilst the
relationship of neighbour remains constant as between the person who owes and the person who is owed a
duty of care, the criterion of the existence of that relationship is necessarily different depending on whether it
is identified from the perspective of the person against whom a duty of care is asserted or from the
perspective of the person who asserts a right which has been infringed.

11. The Donoghue v. Stevenson test of neighbour (at p 580) - "persons who are so closely and directly
affected by my act that I ought reasonably to have them in contemplation as being so affected when I am
directing my mind to the acts or omissions which are called in question" - is formulated from the perspective of
the person against whom a duty is asserted. Reliance, as a criterion of proximity, is a factor which is primarily
relevant when the question of proximity is approached from the perspective of the injured party. However,
reliance as a criterion of proximity viewed from the perspective of the injured party is by no means
coextensive with the test of neighbour formulated in Donoghue v. Stevenson from the perspective of the
person who owes a duty of care. A more approximate formulation, in the context of economic loss, may be
that of a person whom the injured party might reasonably expect would have his interests and the likelihood of
injury to those interests in contemplation when directing attention to the acts or omissions called in question.

12. In San Sebastian it was pointed out in the joint judgment that a request for information or advice is by no
means essential to the existence of a duty to exercise care in the giving of information or advice. It was stated
(at p 357):

"The maker of a statement may come under a duty to

take care through a combination of circumstances or

in various ways, in the absence of a request by the

recipient. The author, though volunteering

information or advice, may be known to possess, or

profess to possess, skill and competence in the

area which is the subject of the communication. He

may warrant the correctness of what he says or

 assume responsibility for its correctness. He may

invite the recipient to act on the basis of the

information or advice, or intend to induce the

recipient to act in a particular way. He may

actually have an interest in the recipient so

acting."

The circumstances there identified are capable of being analyzed in terms of reliance on the correctness of
the information by the recipient, although as was recognized in a later passage the relevance of reliance is not
constant in all of the identified situations. Thus it was stated (at p 358) that "(i)n cases where the defendant
intends the statement to operate as a direct inducement to action, the reasonableness of the reliance will not
be a critical factor, although in other cases the defendant's appreciation of the reasonableness of reliance will
be relevant."
13. It seems to me that reliance, as a criterion of proximity, presented itself in cases concerned with the
provision of information by reason that ensuing damage was consequential, not upon the provision of the
information, but upon reliance on that information as the basis for action or inaction. See San Sebastian, at p
353. Although the duty of care has come to be expressed in terms of the exercise of care in the giving of
information and the breach has come to be expressed in terms of negligent misstatement, the duty which is
asserted is, in essence, a duty to exercise reasonable care to give reliable information, information on which
the other might rely as the basis for making an informed decision. If the duty is so identified then it seems to
me that the relevant factor of proximity in the circumstances identified in the passage quoted from San
Sebastian may be stated in terms of reasonable expectation, a concept which is more readily applicable to
omissions than is the concept of reliance. Thus a relationship of proximity may be constituted by the
reasonable expectation of a person (including a reasonable expectation that would arise if he turned his mind
to the subject) that the other person will provide relevant information or give reliable information, if that
expectation is known or ought reasonably to be known by the person against whom the duty is asserted. Of
course, the foreseeability of the risk of injury is necessarily relevant to a consideration of the reasonableness
of expectation.

14. Whether or not reasonable expectation (including in that concept one which would arise if the injured party
turned his mind to the matter) is a suitable criterion of proximity in all cases where a duty is asserted in
relation to the provision of information, it is one which I would adopt as appropriate where the information is
necessary for the exercise or enjoyment of a legal right and the person against whom the duty is asserted
knows or ought to know of that right and the necessity for the information before the right can be exercised or
enjoyed. In the postulated circumstances a person entitled to the right might, if he turned his mind to the
matter, reasonably expect that another, knowing that he is in a position to control (whether by possession of
information or possession of some physical object) the exercise or enjoyment of that right in circumstances
such that loss may ensue if the right is not exercised or its enjoyment is impaired, would take reasonable
steps to inform him of the fact of that possession, especially if the provision of that information involves no risk
of prejudice to any right or other duty inhering in the person possessed of the information or object. A person
thus in a position of control ought to know that such expectation would arise. Put in conventional terms, a
person in that position of control ought to have the other in contemplation as one affected by his failure to
disclose the information when directing his mind to failure to give that information.

15. In Shaddock, Stephen J. recognized as material to the duty of care there in issue that the information was
exclusively within the knowledge of the council, stating (at p 243):

"Where, as in the present case, the supplier is the

exclusive possessor of essential information

concerning a matter of importance, such as the

buying and selling of property, and, being a local

government body, sets itself up as a centre from

which, in a quite formalized fashion, this

information is distributed to those who require it,

it requires no holding out of special skill or

competence in order to lead to the inference that

care will be taken in furnishing that

information."

So too, in determining whether a person has a duty to volunteer information exclusivity of possession of that
information is a matter of great significance. Particularly is this so in determining whether a person is in a
position to control the exercise or enjoyment of a right by withholding information. However, there may be
situations in which exclusivity of information is not essential to the existence of a duty of care. It may be, for
example, that the person against whom the duty is asserted knows or ought to know that the significance of
information of which he is possessed will not be apparent to others possessed of the information. However, it
is unnecessary to pursue this issue in the present case for the respondents had exclusive possession of the
original will of the testatrix, and that possession was critical to the right of Mr Hawkins to obtain a grant of
probate. To obtain a grant it was necessary for him to prove that the will remained unrevoked, including that it
had not been destroyed by the testatrix animo revocandi. Normally that would be proved by production of the
original will in its original form. Until it was so produced by the respondents or until they provided information
sufficient to establish that they had possession of the original will in its original form at the date of death of the
testatrix Mr Hawkins could not obtain a grant of probate.
16. The evidence is that after the respondents learned of the death of the testatrix they took steps to ascertain
whether there had been a subsequent will. It seems that those inquiries were completed by the end of
February 1975. At this time they must have known or ought to have known that Mr Hawkins was entitled to
apply for probate of the will in their possession but that information as to their possession of the will was
necessary before that step could be taken. Moreover they must have known that until he was so informed he
would effectively be precluded from exercising any powers as executor, whether those powers derived from
the will or from grant. The risk of financial loss if action was not taken to enable Mr Hawkins to exercise his
powers as executor was real and foreseeable. The provision of the information that they had possession of
the will involved no prejudice to any right or duty inhering in the respondents. Rather, it would have been an
effectuation of what they conceived to have been their duty for Mr Hardwick gave evidence that he told Mr
Lamb, a nephew of the testatrix, that he thought he (Mr Hardwick) should make inquiries, but refrained from
so doing by reason of his belief that it would be a waste of time. A person in the position of Mr Hawkins might,
if he turned his mind to the matter, reasonably expect that persons in the position of the respondents would
take reasonable steps to inform him that they had possession of the will appointing him executor, and the
respondents ought to have known that such expectation might arise. Accordingly, in my view, by the end of
February 1975, when the respondents had failed to locate a subsequent will, they came under a duty of care
to take reasonable steps to inform Mr Hawkins that they were in possession of the last will and testament of
Mrs Brasier by which Mr Hawkins was appointed the sole executor of her estate. This they failed to do.

17. It remains to be considered whether the cause of action arising from the respondents' failure to take
reasonable steps to inform Mr Hawkins of their possession of the will was barred by s.14(1) of the Limitation
Act when action was commenced on 22 November 1982. That sub-section provides that a cause of action
founded, inter alia, in 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".

18. As negligence is not actionable per se a cause of action only accrues when damage is suffered. It is clear
that as early as 1975 the assets of the estate were being wasted, at least in the sense that the real estate was
not being used to produce income. The respondents contend that the cause of action then accrued, and was
thus barred by s.14(1) of the Limitation Act in 1981. In support of this contention they rely on the decision of the
House of Lords in Pirelli General Cable Works Ltd. v. Oscar Faber & Partners (1983) 2 AC 1. On the other
hand, the appellant contends that the cause of action accrued when the damage was discovered or
discoverable and relies on the decision of the Supreme Court of Canada in Kamloops v. Nielsen (1984) 10
DLR (4th) 641; (1984) 2 SCR 2.

19. In Pirelli, the House of Lords expressly rejected statements in Sparham-Souter v. Town and Country
Developments (Essex) Ltd. (1976) QB 858, (a case concerned with economic loss consequent upon latent
defect in a building) that damage was sustained when the damage to the building was discovered or with
reasonable diligence ought to have been discovered. Pirelli too was concerned with economic loss referable
to a latent structural defect in a building. It was held that the cause of action accrued when the damage
occurred to the building. It is interesting to note the precise manner in which it was put in the speech of Lord
Fraser of Tullybelton, with whom all other members of the House agreed (at p 16):

"The plaintiff's cause of action will not accrue

until damage occurs, which will commonly consist of

cracks coming into existence as a result of the

defect even though the cracks or the defect may be

 undiscovered and undiscoverable."

The passage makes it clear that the cause of action did not accrue merely by reason of the sustaining of
economic loss, for in one sense that loss was sustained as soon as the defect came into existence: at that
stage the owner had something inherently less valuable than he would have had but for the defect in the
chimney. His Lordship did allow, however, that there might be cases "where the defect is so gross that the
building is doomed from the start, and where the owner's cause of action will accrue as soon as it is built" (at
p 16). In his Lordship's view, such cases would be exceptional. Save for the reference to a building "doomed
from the start", Pirelli has nothing to say as to the time of accrual of a cause of action for economic loss which
is sustained otherwise than in consequence of or in conjunction with physical damage to property. The brief
reference to a building "doomed from the start" seems to have been intended to enable a plaintiff to bring
action before physical damage actually occurred, as was allowed, for example, in Junior Books Ltd. v. Veitchi
Ltd. [1982] UKHL 4; (1983) 1 AC 520. Perhaps what his Lordship had in mind was that a cause of action in
negligence for economic loss sustained in consequence of or in conjunction with a defect to property accrues
when the property sustains damage, unless actual financial loss is sustained at an earlier time. The
subsequent decision of the House of Lords in Ketteman v. Hansel Properties Ltd. (1987) 1 AC 189, in which it
was claimed unsuccessfully that the buildings there in issue were doomed from the start, throws no further
light on the question of accrual of a cause of action for economic loss sustained otherwise than in
consequence of or in conjunction with physical damage to property.
20. In Kamloops (a case also concerned with latent defect in a building) Wilson J., speaking for the majority of
the Supreme Court of Canada, preferred the discovered or discoverability test enunciated in Sparham-Souter
on the basis that it was "much the lesser of two evils" (p 685 DLR; p 40 SCR). In Central Trust Co. v. Rafuse
(1986) 31 DLR (4th) 481, a case concerned with "pure" economic loss, the Supreme Court of Canada adopted
discovery or discoverability as the criterion for accrual of a cause of action for negligence involving economic
loss whether that loss was "pure" economic loss or was sustained in consequence of or in conjunction with
physical damage to property.

21. Notwithstanding the criticisms that may be and have been made of the Pirelli test (see, for example,
Rossiter and Stone, "Latent Defects in Buildings: When Does the Cause of Action Arise?" (1985) 59 Australian
Law Journal 606) the solution advanced in Kamloops and Central Trust Co. seems to have been based purely
on policy considerations.

22. Considerations other than those enunciated in Pirelli and Kamloops are arguably relevant to the answer
as to when a cause of action for negligence causing economic loss accrues. It may, for example, be relevant
to consider the precise interest infringed by the negligent act or omission. In actions in negligence for
economic loss it will almost always be necessary to identify the interest said to have been infringed to
determine whether the risk of loss or injury to that interest was reasonably foreseeable and whether a
sufficient relationship of proximity referable to that interest was present so as to establish a duty of care. If the
interest infringed is the value of property, it may be appropriate to speak of a cause of action in negligence for
economic loss sustained by reason of latent defect as accruing when the resultant physical damage is known
or manifest, for as was explained by Deane J. in Heyman (at p 505) it is only then that the actual diminution in
market value occurs. If, on the other hand, the interest infringed is the physical integrity of property then there
is a certain logic in looking at the time when physical damage occurs, as was done in Pirelli. So too, if the
interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual
of the cause of action when recoupment becomes impossible rather than at the time when the antecedent
right to recoup should have come into existence, for the actual loss is sustained only when recoupment
becomes impossible. The discoverability test adopted in Central Trust Co. seems to have been premised on
the assumption that the interest infringed was the possession of a right to recoupment rather than recoupment
itself. See Schlosser, "Some Recent Developments in the Law of Limitation of Actions, Concurrent Liability
and Pure Economic Loss" (1987) 25 Alberta Law Review 388, at p 390, where the point is made in relation to
Central Trust Co. that as the "mortgagors" made repayments until 1977 (notwithstanding that the mortgage
given in 1968 was void ab initio) no actual loss was sustained until 1977.

23. In Heyman, Deane J. pointed out (at p 502) that "the distinction between mere economic loss and ordinary
physical loss or injury remains important in determining whether the requisite proximity of relationship exists in
a particular case or category of case." It is a distinction which is equally important in determining when loss
has occurred. Physical loss imports damage sustained by a physical object whether it be property or person.
Economic loss, on the other hand, imports loss sustained by a juristic entity in relation to the assets or
liabilities of that entity. The various and complex economic relationships which are a feature of present day
economic organization suggest that loss may manifest itself in various forms, and it is for this reason that
there may be occasions when it is necessary to identify precisely the interest which has been infringed.

24. It would be too simplistic to restrict analysis of economic loss merely to a consideration of reduced value
or increased liability. However, a consideration of reduced value suffices in the present case, for the loss
sustained by Mr Hawkins was the difference between the value of the assets of the estate when they came
under his control as executor and the value they would then have enjoyed had he then held them in the same
capacity and had they been properly managed from the time of the death of the testatrix.

25. Until the assets came under the actual control of Mr Hawkins they had sustained damage by deterioration
and had been subject to waste, including that the real estate had not been put to income-producing use. But
that was not the loss sustained by Mr Hawkins. The property was not then vested in him, notwithstanding that
by s.44 of the Wills, Probate and Administration Act the grant of probate effected a vesting with retrospective
effect. Nor had he suffered a loss of income. Indeed it may have been that had the real estate been under his
control it would have been used for his personal occupation rather than for the production of income. What he
suffered was a loss in the value of the assets referable to their not having been properly managed in the
period prior to coming under his control. That loss was suffered by the executor only when the assets came
under his actual control. At the earliest, that occurred when he was informed of the existence of the will in
March 1981. Action was commenced within six years of that date.

26. The appeal should be allowed and the orders of the Court of Appeal of the New South Wales Supreme
Court set aside. As damages have not been assessed, I agree with the course proposed by Deane J.

ORDER

Appeal allowed with costs.

Order that the judgment of the Court of Appeal of New South Wales be set aside.

Adjourn the further determination of this appeal for 28 days to permit the parties if they be so advised to bring
in minutes of an order to be made by consent disposing of the action in accordance with the judgment of this
Court.

In default of the parties bringing in minutes of such an order within 28 days, order that in lieu of the judgment
of the Court of Appeal -

1. the appeal to that Court be allowed with costs;

2. the judgment of Yeldham J. be set aside;

3. in lieu thereof judgment be entered for the

plaintiff for damages to be assessed;

4. the action be remitted for determination by a judge

of the Supreme Court; and

5. the defendants to pay the plaintiff's costs to be

taxed.