Potocki v Pham [2025] NSWSC 229 | Case summary | Zoe

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Potocki v Pham [2025] NSWSC 229 | Case summary | Zoe

The proceedings arose out of an advance of $1 million made by Ms Potocki in June 2021. The money was withdrawn by Ms Potocki from her bank by means of two bank cheques for $500,000 each, which Ms Potocki provided to Mrs Pham.
Within a few days, a contract was entered into to purchase a two-storey commercial building on Great Northern Road, Five Dock, for $1,750,000. The idea seems to have been that Mrs Pham would use the property for some sort of business venture.
The initial contract was in the name of Ms Potocki as purchaser and she paid the deposit of $175,000, but the purchase was eventually completed in the name of a company, MGP Investments Group Pty Limited (“MGP”), which was incorporated for that purpose. Mr Pham acted as solicitor on the purchase. He was also responsible for incorporating the company, in which Mrs Pham and Ms Potocki were recorded as equal shareholders. On settlement, Ms Potocki contributed a further $825,000. The remaining moneys presumably came from the $1 million which had been previously advanced by Ms Potocki.
Some interest payments were made to Ms Potocki on her loan, but they ceased. The Five Dock property fell vacant and control of MGP was deadlocked. Ms Potocki consulted solicitors, and the proceedings were commenced on her behalf in August 2022.
Initially, Mr Pham and Mrs Pham were the only defendants. MGP was joined as third defendant at a later point to allow an application to be made for it to be wound up.
At the time of the transactions which gave rise to the proceedings, the Phams were involved in other litigation in this Court. That other litigation formed an important part of the background to Ms Potocki’s claims, and is also a significant factor in the present show-cause application.
The litigation arose out of the purchase by the Phams in 2014 of a residential property at Chiswick, which they intended to use as their family home. The contract was dated October 2014. The vendor was Mr Robert Sebie.
Mr Sebie failed to complete the contract and instead transferred the property to an associated company. The Phams brought proceedings against him and the company to set aside the transfer and enforce specific performance of their purchase.
The proceedings resulted in what can only be described as a forensic horror story. The proceedings were commenced in February 2015. In April 2017 the Phams obtained a judgment in their favour. Orders were made setting aside the transfer to Mr Sebie’s company and requiring the property instead to be transferred to the Phams in accordance with the contract. The contract was eventually completed and then the purchase moneys were paid into Court (albeit, apparently, after a contempt application had to be made). But this did not bring the litigation to an end.
The Phams pressed for orders that their costs (assessed on a lump sum basis) be paid out of the funds in Court. Mr Sebie resisted. He also counterattacked with allegations that other associates of his had proprietary interests in the moneys in Court which would prevail over any costs liability to the Phams. The dispute grew to include appellate proceedings.
By this stage Mr Sebie was acting for himself. He appears to have been extraordinarily persistent. A summary of the litigation up to October 2021 is found in the judgment of the Court of Appeal in Sebie v Pham (No 3) [2021] NSWCA 277, which was delivered in November of that year. The judgment records that by that point over 35 judgments had been given, and the litigation did not end there. Later it spread to other courts. It was not until November last year that the High Court dismissed the last special leave application.
According to Ms Potocki the $1 million advance she provided in June 2021 was a loan to both the Phams, not merely to Mrs Pham. Ms Potocki alleged that the advance followed a request from Mr Pham for her to lend him money because he was in financial difficulties owing to the costs incurred in the Sebie litigation (at that stage the costs orders in the Phams’ favour were still the subject of contest and had not been satisfied).
Mr Pham acted for himself in the proceedings. He filed a notice of appearance and a defence for himself as first defendant in October 2022. In the documents he described the “legal representative for filing party” as himself giving the firm as “Andy Pham Lawyers” and his own name as contact solicitor. No appearance, nor defence, was entered for Mrs Pham at that point. At least so far as the record was concerned, she was unrepresented.
Ms Potocki’s affidavit in chief was served at the end of January 2023. Mr Pham’s affidavit in response was affirmed by him on 16 June and e-filed on the same day.
In early August, a defence was filed for Mrs Pham. The covering page described Mrs Pham as “self-represented” and gave her personal phone number and email by way of contact details. Large portions of that defence were identical in form to Mr Pham’s defence.
Shortly afterwards, Mrs Pham affirmed her affidavit in response to the case against her. The affidavit was dated 14 August 2023. Mrs Pham’s signature was witnessed by Mr Pham. The covering page of the affidavit again described Mrs Pham as “self-represented”, and provided her personal contact information.
This affidavit played a critical role in the trial and is also relevant to the present application. There is no record of it having been filed with the Court, although the plaintiff’s legal representatives certainly had a copy of it by the time they came to prepare for the hearing. The evidence before me on the present application does not identify how and when a copy of the affidavit was provided to Ms Potocki’s legal representatives.
In April last year, the proceedings were fixed for trial before me to begin on 3 December. I conducted a pre-trial directions hearing on 22 October, and further directions hearings took place in November.
In the course of these pre-trial hearings, the statement of claim was amended to simplify Ms Potocki’s claim. As ultimately presented, the claim was for judgment against both Mr Pham and Mrs Pham for repayment of the principal and outstanding interest on the loan. An order was also sought for the winding up of MGP.
There were also changes to the Phams’ representation. Mr Pham retained counsel to act for him, and on 6 November Mr Le, a solicitor, entered an appearance for Mrs Pham. Mr Le retained separate counsel for Mrs Pham who appeared for her at the trial.
The simplification of Ms Potocki’s claim resulted in the simplification and clarification of the Pham’s respective defences. As presented at trial, Mr Pham’s defence was to deny that he had been a party to the loan. Mrs Pham admitted that the $1 million was a loan to her, but alleged that the time for repayment as agreed between her and Mrs Potocki had not yet arrived.
The hearing duly began on 2 December. I first dealt with objections to the affidavits. Extensive parts of Mr Pham’s and Mrs Pham’s 2023 affidavits were objected to as being bad in form. I upheld the objection. The result was that there was no evidence from either defendant on most of the critical conversations and dealings in the case.
Ms Potocki then gave evidence, as did her former husband Mr Potocki, who had made an affidavit in support of her case. Both of them were cross-examined and the plaintiff’s evidence closed on the second day.
Meanwhile, counsel for both Mr Pham and Mrs Pham produced affidavits in an attempt to repair the evidentiary gap in the case left by the successful objections. These affidavits dealt extensively with the relevant transactions. I allowed the affidavits to be filed. But given that they were produced so late in the litigation, and would have required the adjournment of the hearing, I felt obliged to refuse to allow them to be read into evidence.
Mr Pham was cross-examined by counsel for Mrs Potocki. The cross-examination was extensive and lasted until the middle of the following day.
Upon resumption after the adjournment, I was told that the parties had conferred and had agreed on a settlement, apart from the “final mechanics”. I adjourned the proceedings at their request and on the following (fourth) day consent orders were made for the resolution of the claims against the Phams. The settlement also called for MGP to be wound up. I was satisfied that this order was appropriate and proceeded to make it, thereby resolving the whole of the proceedings.
One of the topics on which Mr Pham was cross-examined was the preparation of Mrs Pham’s affidavit. The issue was raised because large parts of Mrs Pham’s affidavit were the same as Mr Pham’s affidavit. This included some of the critical conversations.
Furthermore, during his evidence, Mr Pham said that his wife’s principal language was Vietnamese. He described her English as “vocational” only. The affidavit, however, was prepared in English and did not contain the interpreter’s certificate required for witnesses unable to speak the language. It also contained, in the passages which were the same as Mr Pham’s affidavit, sophisticated wording which appeared unlikely to have been part of Mrs Pham’s vocabulary, if her English language skills were as her husband described.
Counsel for Ms Potocki asked Mr Pham whether he had in fact prepared his wife’s affidavit by copying his own. Mr Pham denied this. He said that he had not been involved in the preparation of the affidavit. Instead, he had asked his daughter, Vanessa Pham, to prepare it.
Ms Pham is a university student who is employed in her father’s practice. She has no legal qualifications but appears to have worked as a paralegal. In that capacity she had access to the firms records, including Mr Pham’s affidavit, which was on the firm’s server. The inference was that she had used Mr Pham’s affidavit to prepare her mother’s affidavit, but Mr Pham said he had nothing to do with this. Although he witnessed the affidavit, he did not read it at the time.
Counsel for Ms Potocki did not accept Mr Pham’s explanation. Counsel continued to suggest that Mr Pham had prepared the affidavit himself. Mr Pham continued to maintain to the contrary.
At various points in his evidence Mr Pham was asked about the degree to which he supervised Ms Pham. His evidence included:

I do not doubt the stress caused to Mr Pham by the Sebie litigation, and by his mother-in-law’s illness and death. But his affidavit leaves the precise effect of these factors in August 2023 somewhat unclear.
So far as the Sebie litigation is concerned, there was no direct evidence about the nature of the proceedings which followed the Court of Appeal’s judgment in November 2021. Mr Pham in his affidavit said that in August 2023 he was dealing with litigation in this Court, the High Court and the Federal Circuit and Family Court of Australia. However, later in the affidavit, he stated that Mr Sebie brought proceedings in the Federal Circuit and Family Court in Brisbane, in an attempt to relitigate the specific performance proceedings in this Court, in August last year (which were dismissed at the end of October). The implication was that the final decision of the High Court, which was delivered in November last year, was an application for special leave engendered by those proceedings. Mr Pham did refer to a High Court decision in 2023 as well as the decision last year, but the precise nature of the proceedings with which he was dealing was August 2023 are not clear.
Similarly, Mr Pham’s evidence about the effect of his mother-in-law’s illness focussed on what he had to do at the time of her final hospitalization and death, which he described as having “occurred during the same period leading up to the trial in December 2024”. Again, the evidence does not describe precisely what stage her illness had reached, and what effect it was having on him, in August 2023.
In his affidavit Mr Pham apologised for what he described as an error relating to the “preparation and swearing of” Mrs Pham’s affidavit. He accepted that he was responsible for the “accuracy and integrity” of the document, as one “submitted to the Court under my supervision”.
Mr Pham deposed that he had engaged an independent consultant to conduct a review of his firm’s practices. But the report was not presented in an admissible form (it was unsigned and there was no affidavit from the person who had prepared it). I therefore did not admit it into evidence.
Mr Pham however did depose:

Like her father’s affidavit, Ms Pham’s affidavit is light on detail. There seems to be no doubt that Mr Pham instructed Ms Pham to prepare the affidavit, but what else was said between them remains unclear. Ms Pham only says that she “believes” her father asked her to call Mrs Pham and obtain “information” (unspecified) from her “in relation to her dealings with” Ms Potocki “in relation to the business the subject of the court case”. She does not say how she was to decide what was relevant for the purposes of preparing the affidavit.
Ms Pham’s account also leaves unclear how it was that she came to be aware of the contents of her father’s affidavit. She says that she was told to use the blank Supreme Court form as what she describes as the “templates folder” on the firm’s server. She says that she “mistakenly” used the case folder which contained affidavits, including her fathers. She does not say what the actual “mistake” was.
Submissions: Mr Titus took me through the affidavit evidence in support of the application. He submitted that the use of Mr Pham’s affidavit to draft Mrs Pham’s, whilst erroneous and regrettable, did not involve any deliberate or conscious wrongdoing on Mr Pham’s part. He also submitted that, having regard to the extraordinary strains which Mr Pham had been under at the time, his contrition, and the administrative steps he had taken to avoid any repetition, there was no need for referral to the Law Society.
Mr Baran reminded me of how the issue concerning Mrs Pham’s affidavit had come out. The affidavit had been prepared by Ms Pham, an unqualified person, on Mr Pham’s instructions. Mr Pham had been involved in putting the affidavit forward by serving it. Even when, on Mr Pham’s own account, he became aware of the duplication in the affidavit prior to the trial, he took no action. Mr Baran submitted that the disclosure should have been made, at the latest, by that point. Had that occurred, the affidavit would undoubtedly have been withdrawn and re-sworn.
Mr Baran noted Mr Pham’s claim that he had participated in the preparation of the affidavit only as a witness. He observed that this version of events had had to be extracted from Mr Pham in cross-examination. Regrettably, in Mr Baran’s submission, having regard to the way in which Mr Pham’s evidence came out, it should not necessarily be accepted as truthful. Mr Baran submitted that the more likely explanation remained that Mr Pham had directly instructed Ms Pham to use the existing affidavit for the purpose of preparing the new one.
Mr Baran submitted that in these circumstances it was important for the whole affair to be investigated by the Law Society. This should include the substantive basis of Mrs Potocki’s claim against the Phams, which raised serious professional questions about Mr Pham’s conduct.
In presenting these submissions, Mr Baran was sensitive and restrained. Properly, however, he reminded me of the importance of ensuring the highest standards of professional practice among solicitors of this Court. He also noted the effect on his client, who had had to deal with an affidavit (including by extensive, but not inappropriately so, cross-examination) which should never have been presented.
Mr Baran acknowledged that ultimately the Law Society might take no action against Mr Pham. But he submitted that if that was to be the decision, it should be a decision made by the Law Society after a full opportunity to consider the matter.
Conclusion: In my view these submissions have force. I think four points stand out.
First, I am not confident that the Court has received a full account of the circumstances surrounding the preparation of Mrs Pham’s affidavit. It may be accepted that Ms Pham actually did the interviewing of Mrs Pham and the copying of Mr Pham’s affidavit. But it is harder to accept that Mr Pham could have exercised no direction or control whatsoever over the process.
One would expect that a solicitor in Mr Pham’s position who was delegating to a junior employee the preparation of an affidavit of a party responding to allegations against that party would, in the ordinary course, give the junior solicitor a detailed briefing about the allegations and potential lines of response. One would also expect the solicitor to supervise the drafting process, or, at least, to check the affidavit before attestation. In the present case the party in question was Mr Pham’s own wife and the employee had no legal qualifications, which would, one would have thought, only have made the need for guidance and supervision more obvious. One would also expect the process to have left documentary traces, such as drafts and (possibly) file notes.
In the present application, no documentary records concerning the preparation of the affidavit have been produced, and there is not even any evidence before the Court as to whether any such documents still exist. I have already commented on the sketchy nature of the affidavit evidence. It does not contain any clear statement, even in gist form, from Mr Pham or Ms Pham of what they actually recall was said between them.
The only thing which was clear from the evidence given by Mr Pham at the trial was that he instructed Ms Pham to prepare the affidavit, and, in that context, he referred her to his earlier affidavit. His attempt to explain why he did so raised more questions than it answered. The further affidavit evidence from Mr Pham and Ms Pham does not, in substance, take matters any further.
Nor do I find compelling the explanation Mr Pham offered for failing to disclose the copying of his affidavit when he says he became aware of it before the trial. He may well have been under personal strain but disclosure would not have been difficult or time-consuming.
While I do not go so far as to accept the submission from Mr Baran that Mr Pham gave false evidence about how the affidavit came to be prepared, that submission was undoubtedly an available one on the material which has been presented to the Court. I do not think that the doubts surrounding what happened have been dispelled. I still cannot be satisfied that I have been provided with the full story.
The second point is that, on his own account Mr Pham procured the preparation of the affidavit, which was legal work, by an unqualified person, namely Ms Pham. To my mind this was a significant matter in its own right. Even if one accepts that Mr Pham was unaware of the copying which occurred, it is the very sort of thing which might have been expected if an unqualified person was asked to prepare an affidavit for the purpose of legal proceedings. Ms Pham cannot be blamed for not understanding the ethical obligations concerning the preparation of affidavits. Mr Pham ought to have known better than to put her in that position.
The evidence presented by Mr Pham in his show-cause application focused exclusively on the copying of Mrs Pham’s affidavit. He showed no appreciation that he never should have asked Ms Pham to prepare the affidavit in the first place, especially if, as he claims, he did not properly brief or supervise her.
The second point gives rise to a third, and related, point. It is unclear whether Mrs Pham ever had any defence of substance to Mrs Potocki’s debt claim. But defence or no defence, as a co-defendant and a co-participant in the transaction, Mr Pham clearly could not have acted for her.
Mr Pham in his own evidence acknowledges this. He insists that he did not act for Mrs Pham. But as a matter of substance, that was exactly what he was doing in making the resources of his firm available for the preparation of her affidavit. It is reasonable to infer that the same process was followed (by Mr Pham or someone working for him) in preparing Mrs Pham’s defence.
Again, this is not a point which was addressed in the show-cause application. Again, I think it is significant. It potentially involved misleading the Court and Ms Potocki’s legal representatives, while at the same time deriving a forensic advantage (by propounding a defence which a solicitor might not have been able to endorse as arguable).
It would have been understandable for the Phams to have been unwilling to incur the expense of paying for separate and independent legal representation for Mrs Pham. But the decision not to do so, and instead (it seems) for Mr Pham’s firm to provide “shadow” representation for Mrs Pham, ultimately did her a disservice as well. Again, this is the type of problem which Mrs Pham cannot have been expected to understand, but which should have been understood by Mr Pham as a solicitor. One wonders whether the full implications of that decision were ever discussed with her.
Finally, and most fundamentally, the allegations which gave rise to the proceedings have not been tested. Given the settlement, and the possibility of further investigation, I do not propose to discuss the evidence given by Mrs Potocki and the evidence given in response by the Phams in any detail. It is sufficient to say that the affidavits by Mr Pham leave questions unanswered and challenges, including challenges as to credit, available.
It is impossible not to be moved by the litigious and personal misfortunes that Mr Pham has suffered. But whether those misfortunes are sufficient to mitigate the need for disciplinary action, or to make disciplinary sanctions unnecessary, are not questions which should be answered now by the Court. They should be left to the Law Society to consider in the whole context of the case, including the results of any further investigations which the Society may choose to conduct.
For these reasons, I think the show-cause application fails. I propose to make an order referring the papers to the Law Society. It will be for the Society to decide whether it should investigate any of the issues raised in this judgment and, depending on the outcome, what further action to take.