Ishak Cicek and anor. v The Estate of the late Mark Solomon and ors

Supreme Court of NSW|2013-10-08|Before: Bellew J, McCallum J

INTRODUCTION 1By a statement of claim filed on 13 October 2011 the plaintiffs commenced proceedings against three defendants, namely: (i)the estate of the late Mark Solomon, solicitor ("the first defendant"); (ii)the estate of the late Robert Tam ("the second defendant"); and (iii)the National Australia Bank Limited ("the third defendant"). 2Although three defendants were named, the plaintiffs had indicated prior to the hearing that the case against the second defendant was not pursued. 3The proceedings were listed before me for hearing commencing on 8 October 2013. Prior to that time, they had been the subject of various interlocutory judgments (see Ishak Cicek and anor v The Estate of the Late Mark Solomon and ors. [No. 1] [2013] NSWSC 1490 (Bellew J); Ishak Cicek and anor. v The Estate of the Late Mark Solomon and ors. [No 2] [2013] NSWSC 1479 (Bellew J); Ishak Cicek v The Estate of the Late Mark Solomon [2013] NSWSC 1348 (McCallum J)). 4As a consequence of the various matters canvassed in those interlocutory judgments, the plaintiffs appeared in person at the hearing. 5At the commencement of the hearing, the first plaintiff indicated an intention to rely upon an evidentiary statement of 29 January 2013, a copy of which had been served on the first and third defendants some time ago. Objection was taken by counsel for each of the first and third defendants to various parts of that statement and having ruled on those objections, the statement in its edited form was admitted as exhibit A in the proceedings. 6The second defendant had also prepared an evidentiary statement which was dated 21 February 2013. However, when asked, the second defendant indicated that she did not wish to rely upon the contents of that statement, at which time it became MFI 1. 7Following the resolution of those issues, a further issue arose regarding whether or not the plaintiffs should be granted leave to rely on further affidavit evidence which had been recently served. For the reasons given at that time (see Ishak Cicek and anor. v The Estate of the Late Mark Solomon and ors. [No 2] (supra)) I concluded that leave should not be granted. The material which was the subject of that application became MFI 2. 8Each of the plaintiffs was then asked whether there was any further material upon which either of them wished to rely. They each indicated that there was not. Accordingly, the case for the plaintiffs closed at that point, such that the only evidence before me was that contained in exhibit A. 9At the close of the case for the plaintiffs, and without adducing any evidence, counsel for each of the first and third defendants then made application pursuant to rule 29.10 of the Uniform Civil Procedure Rules, the terms of which are set out below. That rule confers a power on the court to give judgment for a defendant in circumstances where the evidence adduced could not support a judgment for the plaintiff.

The claims brought by the plaintiffs 10As against the first defendant, the plaintiffs allege that there were a series of retainers entered into between themselves and the late Mr Solomon between about 2003 and 2005. The plaintiffs allege that Mr Solomon was retained as their Solicitor in respect of the purchase of various properties, and the associated advancement of funds. The late Mr Tam (whose estate is named as the second defendant) was a party to some of those transactions. 11The relevant transactions in respect of which Mr Solomon is said to have been retained concerned: (i)the purchase of three lots of land at Blacktown in or about August 2003 and the associated financing of that purchase; (ii)the purchase of two lots of land at Gwandalan in or about May 2004; (iii)a loan advance secured by the property in (i) which was to be used for the development of the property in (ii) but which the plaintiffs allege was transferred to Mr Tam; and (iv)a further loan advanced by the third defendant for the purposes of re-financing the property in (i). 12On 5 March 2008 the third defendant served a notice pursuant to s. 57(2)(b) of the Real Property Act demanding payment of a sum of $305,733.00 owing under a mortgage over the Blacktown property. In May 2009 the third defendant sold the Blacktown property as mortgagee in possession and the sale proceeds were used by the third defendant to reduce the late Mr Tam's debts, in priority to the debts owed by the plaintiffs. 13The plaintiffs allege that Mr Solomon, having entered into the retainers, breached his duty towards each of them by (inter alia): (i)failing to properly advise them in relation to the nature of the transactions which had been entered into; (ii)preferring the interests of Mr Tam over their own; and (iii)failing to exercise reasonable skill, care and diligence. 14The plaintiffs also allege they were under a special disadvantage due to their limited ability to understand legal and professional terminology, their limited capacity to read and write English, and the absence of any relevant business, investment or legal experience. 15As against the third defendant, the plaintiffs allege unconscionable behaviour. In particular, the plaintiffs allege that in entering into the relevant loan transaction, the third defendant had an obligation to inform the plaintiffs of the fact that the transaction and mortgage which was entered into was securing additional debts of Tam.

The relevant legislation 16Rule 29.10 is in the following terms: 29.10 Judgment for want of evidence (1) An opposite party may apply to the court to give judgment for the opposite party, either generally or on any claim for relief in the proceedings, on the ground that, on the evidence given, a judgment for the beginning party could not be supported. (2) Such an application may be made at any time after the conclusion of the evidence for the beginning party in his or her case in chief. (3) The court may not give judgment under this rule unless the opposite party satisfies the court that, on the evidence given, a judgment for the beginning party could not be supported. (4) If the opposite party fails to satisfy the court that, on the evidence given, a judgment for the beginning party could not be supported, the opposite party may not adduce evidence or further evidence in the proceedings generally or on the claim for relief concerned, as the case may be, except by leave of the court. (5) If not all opposite parties apply to the court under subrule (1), the court must not deal with any such application before the conclusion of the evidence given for all parties.

Submissions of the parties 17Counsel for the first defendant submitted that in circumstances where the evidence upon which the plaintiffs were entitled to rely was confined to Exhibit A, there was no evidence at all of: (i)the retainer(s); (ii)the scope of the duty of care owed by Mr Solomon and, in particular, whether the scope of the duty encompassed a duty to advise as to the merits of particular transactions; (iii)whether such duty had been breached; and (iv)whether the plaintiffs had suffered any loss. 18Counsel for the third defendant submitted that the claim brought by the plaintiffs against his client was premised upon an allegation that there was a special relationship between the plaintiffs and the third defendant, such that the third defendant ought to have disclosed the pre-existing liabilities of Mr Tam. Counsel submitted that the claim was misconceived because there is no obligation on the part of a lender to disclose the private business affairs of another customer (see Winterton Constructions v Hambros (1992) 111 ALR 649 at 667). He also submitted that in any event, there was no evidence of loss. 19The plaintiffs made a number of submissions which can be summarised as follows: (i)they were misled by Mr Solomon; (ii)they had suffered a loss; (iii)Mr Solomon did not inform them of the risk in entering into the various transactions; (iv)they had not been informed by the bank of the fact that there were monies owing by them. 20I was reminded by counsel for the third defendant that these submissions did not constitute evidence, and that the evidence before me was restricted to the contents of exhibit A.

Consideration and conclusion 21Judgment may not be entered under rule 29.10 unless I am satisfied that on the evidence which has been adduced judgment for the plaintiffs cannot be supported. In making that determination, I must take the evidence adduced by the plaintiffs at its highest (see Hunt v Watkins (2000) 49 NSWLR 508 at 510 per Stein JA (with whom Fitzgerald and Heydon JJA agreed) citing Mailman v Ellison (CA NSW) 25 November 1993 unreported and De Gioia v Darling Island Stevedoring and Lighterage Co Limited (1941) 42 SR (NSW) 1 at 3 per Jordan CJ). 22As I have noted, the evidence in the plaintiffs' case is restricted to the contents of exhibit A. At its highest, that evidence establishes the following: (i)the first plaintiff is 51 years old and is married to the second plaintiff; (ii)the first plaintiff studied to year five, worked in labouring jobs for the majority of his life, and is a professional carpet layer; (iii)the first plaintiff does not consider himself well educated; (iv)the first plaintiff first met Mr Tam when Mr Tam was a salesman for a property developer and subsequently became closely acquainted with him; (v)the first plaintiff met Mr Solomon in the early 1990's following which Mr Solomon acted for him in the buying and selling of various properties; (vi)Mr Solomon was "an old man" whose body was "full of metal things"; (vii)at one point the first plaintiff sought advice from another solicitor, a Mr Gillard, who told him that he had a "very good case" but who failed to attend court when required to do so; (viii)in respect of the Gwandalan property, Mr Solomon "took the paperwork and did it for (the first plaintiff)"; (ix)Mr Tam and the first plaintiff went together to see Mr Solomon in circumstances where Mr Tam was assisting the first plaintiff in obtaining money to buy the property; (x)at about the same time the first plaintiff bought a Blacktown property in respect of which he "went into partnership" with Mr Tam; (xi)the first plaintiff had dealings with Nancy Yedgar from the National Australia Bank although he was not aware at the time that Ms Yedgar worked for the bank. 23It will be apparent from the above summary that even when the evidence is taken at its highest, it falls substantially short of supporting any cause of action pleaded in the statement of claim. 24As far as the case against the first defendant is concerned, and apart from the fundamental question of evidence of the various retainers and their precise terms, there is no evidence that Mr Solomon breached his duty towards either of the plaintiffs. Even if there was such evidence, there is no evidence of the plaintiffs having suffered any loss as a consequence. 25In respect of the third defendant, and leaving aside the question of whether the cause of action is misconceived in the sense submitted by counsel, the evidence at its highest does not establish any unconscionable conduct. Moreover, there is no evidence of loss. 26In these circumstances I am satisfied that on the evidence which is before me in the plaintiffs' case, a judgment for the plaintiffs cannot be supported against either the first or third defendants.

ORDERS 27For the forgoing reasons I make the following orders: (i)I enter a verdict and judgment for the first defendant. (ii)I enter a verdict and judgment for the third defendant. (iii)I order that the first and second plaintiffs are to pay the costs of each of the first and third defendants.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 October 2013

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