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The recent NSW decision determined proceedings brought by Mr Lofts (plaintiff) against Lawcover (insurer), regarding incorrect advice given by the plaintiff’s solicitor in relation to the transfer of property in a joint tenancy structure after death.
In issue
- Whether the solicitor breached their duty of care by failing to advise that the property held as joint tenants would pass by survivorship and not under the will.
- Whether the solicitor failed to advise that the joint tenancy should be severed to give effect to the client’s testamentary intentions.
- Whether it is sufficient for a plaintiff to prove on the balance of probabilities that a deceased person would have taken the simple, inexpensive legal steps to protect their interest in an inheritance had they been correctly advised.
The background
Jefferey Lofts (the deceased) and Regina Miller were in a de facto relationship, both had children from previous relationships and owned a property in Forster, NSW under a joint tenancy structure. Under this structure, when an owner dies, the property passes automatically to the survivor regardless of what is specified in a will. With the assistance of a solicitor in a law firm (the law firm), they made their wills in 2016 which included an arrangement for the survivor to keep living in the property until death or remarriage. If either scenario were to happen, each person’s share would go to their own children from previous relationships, which is contradictory to joint tenancy rules.
Following the death of Mr Lofts in 2023, his share in the Forster property was transferred to Ms Miller despite the specifications in his will. His only child Alexander Lofts (plaintiff) commenced a claim against the professional indemnity insurer since the law firm was liquidated. He alleged that the law firm breached the duty of care owed to the deceased, which consequently affected him, by failing to advise that the joint tenancy could be severed without affecting the provisions in the will.
The plaintiff sought damages equal to the value of the remainder interest in half of the Forster Property, to which he would have been entitled if his father’s will had been prepared in accordance with his testamentary intention
The decision at trial
The plaintiff’s claim against Lawcover in the District Court of New South Wales was successful. The Court held that:
- The solicitors owed a duty of care to the deceased because he was the intended beneficiary of the property. The solicitors had breached their duty of care by failing to advise on the need to sever the joint tenancy under s 97 of the Real Property Act 1900 (NSW).
- If the deceased and his partner had been advised correctly then they would have taken the simple and inexpensive steps needed to make their wills respond to the plaintiff’s father’s wishes.
Andronos SC assessed the damages at $510,000 but did not award any pre-judgment interest. Although the Forster property was valued at $1,500,000 at the time of Mr Lofts’ death, actuarial evidence valued the plaintiff’s interest at 34% of the purchase price because Ms Miller still had a right to live in the property. He also allowed both parties to reach an agreement regarding costs.
Implications for you
A solicitor’s duty of care extends beyond the client to the intended beneficiaries of a will. Because the deceased was misinformed, the plaintiff was able to bring a claim for his interest in the property. Other key takeaways for this case are that testamentary intention cannot override legal title of property. If a property is held as a joint tenancy, it passes automatically to the surviving owner, regardless of what is specified in a will. Legal practitioners should exercise caution with tenancy structures. In this case, the deceased intended for his son to have a share of the property following his death and the solicitors who assisted him in creating his will should have advised that the joint tenancy should have been severed to allow this.
Lofts v Lawcover Insurance Pty Limited [2026] NSWDC 68
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