'Champagne Service for a Beer Price'what Is the Duty of Care Owed by a Conveyancer?

This may be the author’s version of a work that was submitted/accepted for publication in the following source: Dixon, William M. (2001) ’Champagne Service for a Beer Price’ What is the Duty of Care owed by a Conveyancer? Australian Property Law Bulletin, 16, pp. 31-32. This file was downloaded from: https://eprints.qut.edu.au/42421/ c Copyright 2001 LexisNexis This work is covered by copyright. Unless the document is being made available under a Creative Commons Licence, you must assume that re-use is limited to personal use and that permission from the copyright owner must be obtained for all other uses. If the document is available under a Creative Commons License (or other specified license) then refer to the Licence for details of permitted re-use. It is a condition of access that users recog- nise and abide by the legal requirements associated with these rights. If you believe that this work infringes copyright please provide details by email to [email protected] Notice: Please note that this document may not be the Version of Record (i.e. published version) of the work. Author manuscript versions (as Sub- mitted for peer review or as Accepted for publication after peer review) can be identified by an absence of publisher branding and/or typeset appear- ance. If there is any doubt, please refer to the published source. http:// www.lexisnexis.com.au/ en-AU/ products/ Australian-Property-Law-Bulletin.page “Champagne service for a beer price” What is the duty of care owed by a conveyancer? In Benson v MacLachlan t/as Sterling Conveyancers [2001] NSWCA 263 the New South Wales Court of Appeal (Meagher, Handley and Heydon JJA) considered the standard of care to be expected from a conveyancer licensed under the Conveyancers Licensing Act 1995 (NSW). Does a conveyancer owe the same duty of care as a solicitor would if handling a conveyancing matter? Facts C wished to purchase a block of land. For reasons unknown, C did not wish to purchase in his own name. C persuaded two of his friends, the appellant Benson and A, to act as his puppets in purchasing the land. The contract, as finally signed, described the purchasers as Benson and A, on behalf of a company yet to be incorporated. Following default by the purchaser in meeting its obligations under the land contract, the Vendors successfully sued the company ultimately incorporated to purchase the land, C, the appellant and A. The appellant made a cross claim against MacLachlan t/as Sterling Conveyancers that was dismissed by the trial judge. An appeal was made to the New South Wales Court of Appeal from that decision. The substance of the appellant’s claim was that the conveyancer failed to explain or advise him of the liabilities he would incur when he signed a contract as one of the apparent purchasers, on behalf of a company yet to be incorporated, and the effect of s183 (7) of the Corporations Law. Decision The New South Wales Court of Appeal held that the appellant, a qualified accountant, must have known that his personal liability was not purely fictive. Further, the trial judge had accepted that the conveyancer had explained to the appellant his liability in the event of default. On this basis, Meagher JA (with Handley JA and Heydon JA agreeing) dismissed the appeal with costs. Duty of Care Although not necessary to dispose of the appeal, Meagher and Handley JJA went on to consider whether a conveyancer owed the same duty of care as a solicitor would if handling a conveyancing matter. The difference of opinion on the conveyancer’s duty of care is worth highlighting. Justice Meagher was of the view that the duty of care owed by a conveyancer was the same as that owed by a solicitor. The Conveyancers Licensing Act 1995 (NSW) enabled qualified conveyancers to do any conveyancing work, not simply “easy” conveyancing work. According to Meagher JA this was “the pronounced will of the Parliament as the culmination of a long and virulent campaign by conveyancers who asserted that solicitors were not needed in the area of conveyancing. They achieved this objective, they are now placed on an equal standing with solicitors in that area of legal practice, and they ought to have the same liability.”1 By contrast, Justice Handley noted that conveyancers provide a basis service at a basic cost. “They should not be expected either by their clients, or by the courts, to provide a champagne service for what amounts to a beer price.”2 In reaching this conclusion, Handley JA referred to the principle applied in Philips v Wm Whiteley Ltd [1938] 1 ALL ER 566 where the plaintiff sued a jeweller who had pierced her ears. In that case, Goddard J said (569): “I do not think that a jeweller holds himself out as a surgeon…If a person wants to ensure that the operation of piercing her ears is going to be carried out with that proportion of skill… that a Fellow of the Royal College of Surgeons would use, she must go to a surgeon. If she goes to a jeweller she must expect that he will carry it out in the way one would expect a jeweller to carry it out.” Justice Heydon recognised that the question of what duty of care is owed by a conveyancer was important. However, as the result of the appeal would not be affected, Heydon JA did not consider it necessary to answer the question. Comment The divergent views of Meagher and Handley JJA are clearly based on different and, it is suggested, valid policy bases. It is likely that it will be only a question of time before a definitive answer is provided as to which policy ground should prevail. The ultimate resolution of this question will have significant ramifications for conveyancers (and indirectly solicitors) and insurers in New South Wales. Further, any decision is likely to be of great interest in Queensland where the debate concerning the introduction of licensed conveyancers continues to smoulder. Bill Dixon B.Econ, LLB (Hons) (UQ), LLM (QUT) Consultant, Pattison & Barry, Solicitors, Brisbane Member Centre for Commercial and Property Law Lecturer, Law School, Queensland University of Technology 1 [2001] NSWCA 263 at para [20] 2 [2001] NSWCA 263 at para [24] .

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