On the perils of accepting the un-met wife’s instructions from the husband

Graham v Hall [2006] NSWCA 208 is a case about a solicitor who paid the price for taking what he thought to be a husband and wife’s instructions from the husband alone, lured by the husband into doing so by the preposterous lies that the wife was (i) stricken with cancer, too sick to attend on the solicitor and (ii) not willing to talk to him by telephone because she was upset at the way she and the husband had been treated when the solicitor was previously acting against them on behalf of one of their creditors. The solicitor admitted in cross-examination that he heard alarm bells, but he did not pay them enough attention.

The husband rejigged the mortgage on the matrimonial home, paid off debts the wife was ignorant of, and took the balance for himself. Then he died, and the wife got a nasty shock when she learnt of the new indebtedness secured against her home. The appeal was all about a justice of the peace who in breach of his oath of office represented that he had witnessed the wife’s execution of various documents when in fact he did not know the wife and had never met her or spoken to her. A new form of duty of care to avoid economic loss was discerned and the JP was found to have breached it, and to be liable in damages. The duty was said to be owed by any witness regardless of status as a JP or solictor, to a person whose interests are obviously going to be affected by the possibility of fraud which it is the very purpose of the witnessing provisions to guard against. Despite the fact that the JP’s conduct was intentional and dishonest but the solicitor’s was merely negligent, the apportionment went 60/40 against the solicitor. It would be interesting to read the trial judge’s judgment, which dealt with the case against the solicitor in order to see how the damages were found to be payable to a non-client, namely the wife.

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