Mr Trajkovski and Mrs Trajkovski were married on 19 March 1992. According to Mrs Trajkovski, whose evidence in this respect the trial judge appears not to have doubted, she was physically abused by Mr Trajkovski during the marriage, and was intimidated by him.
Mr Simpson has practised as a solicitor in New South Wales since 1996, and at all relevant times was the sole director and secretary of the incorporated law practice Simpson & Partners Solicitors Pty Ltd. Ms Evelyn Newman was a paralegal employed in the practice. Simpsons acted for Mr and/or Mrs Trajkovski in several matters during their marriage, including on the purchase by Mrs Trajkovski of Skinergy Pty Ltd (Skinergy), a beauty salon business, in September 2004.
On 26 November 2002, Mr Trajkovski, Mrs Trajkovski, and Mr Trajkovski's parents Milan and Slavka Trajkovski, purchased a property in Dural ("Dural") for $2,125,000, which they held as joint tenants. Simpsons acted as solicitors for the purchasers on that transaction.
Mrs Trajkovski separated from Mr Trajkovski on 18 March 2006, when she left Dural and moved, with their two sons, to a townhouse.
[2]
The Family Law proceedings
Mr Trajkovski retained Simpsons to act for him in connection with the matrimonial dispute and in the Family Court proceedings that ensued. Mrs Trajkovski retained Mr David Chesters of Norwest Family Law ("Chesters") to act for her, and on 22 March 2006 informed Ms Newman that she had done so. On 23 March, Simpsons informed Chesters that they had been engaged by Mr Trajkovski; they disclosed that they had previously acted for Mrs Trajkovski in several matters, but that they understood that she did not object to their acting for Mr Trajkovski. Chesters replied, on 24 March, that Mrs Trajkovski did not object to Simpsons acting for Mr Trajkovski "in this matter", being a reference to the matrimonial dispute.
Proceedings for matrimonial financial adjustment were commenced in the Family Court of Australia on 29 November 2006. On 2 May 2007, Mr and Mrs Trajkovski executed consent orders, which were subsequently made by the Family Court on 10 May 2007 ("the Family Court orders"), in the following terms:
1. That on or before 14 May 2007 the Husband pay to the wife the sum of $50,000 and do all acts and things and sign all documents necessary to transfer to the Wife his right title and interest in the Mercedes motor vehicle registered number xxx.
2. That within four months the Husband shall pay to the Wife the further sum of $800,000 and do all acts and things and sign all documents necessary to discharge all loans in the joint names of the parties or in the names of the parties jointly with the Husband's parents or loans to entities in which the parties or either of them have an interest being loans guaranteed by the Wife other than the St George loan to Skinergy Pty Ltd.
3. Simultaneously with satisfactory compliance with Order 2 the wife will do all acts and things and sign all documents necessary to:
a) Transfer to the Husband her right title and interest in the property at xxx, Dural being that parcel of land referred to in folio identifier xxx.
b) Transfer to the Husband her right title and interest in the property at xx Chegwin Street, Botany being that parcel of land referred to in folio identifier xxx.
c) Transfer to the Husband her right title and interest in OKO Pty Limited.
d) Transfer to the Husband her right title and interest in MBS Holdings Pty Ltd.
e) Transfer to the Husband her right title and interest in the Milan Investment Trust.
f) Transfer to the Husband her right title and interest in the Trajkovski Family Trust.
g) Discharge the loan from St George to Skinergy Pty Ltd.
h) Resign as director or officeholder from OKO Pty Ltd and MBS Holdings Pty Ltd.
4. The Wife shall be declared the sole owner to the exclusion of the Husband of her right title and interest in Skinergy Pty Ltd.
The orders also made provision for Mr Trajkovski to pay, and indemnify Mrs Trajkovski in respect of, loans in the joint names of the parties (other than the St George loan to Skinergy); to indemnify her in respect of all liabilities relating to various Trajkovski family entities (namely the partnership Trajkovski Bobby Suzi Milan & Slavka, OKO Pty Ltd, OKO Painting Services Pty Ltd, the Milan Investment Trust, the Trajkovski Family trust, or MBS Holdings Pty Ltd); to indemnify her in relation to any taxation liability arising from or by reason of those entities; and that each of them otherwise retain all property then in his or her respective name or possession.
The consent orders were executed by each of Mr Trajkovski and Mrs Trajkovski, and also by their respective lawyers - in the case of Mr Trajkovski, by Mr Simpson (as is apparent from a comparison of his signature on the consent orders with the signature which appears on his affidavit in these proceedings).
The sum of $50,000 referred to in order (1) was paid by Mr Trajkovski to Mrs Trajkovski, several months after the due date.
[3]
The sale of Dural
During 2007 and into 2008, Simpsons continued to act in a number of matters in which Mr and Mrs Trajkovski were both interested, including the refinancing and sale of other properties owned by Mr and Mrs Trajkovski, their companies, and his parents.
On 8 October 2007, Simpsons wrote to Century 21 Prime Property Dural, asserting that they acted on behalf of Mr and Mrs Trajkovski (and Milan and Slavka Trajkovski) on the proposed sale of Dural:
RE: TRAJKOVSKI PROPOSED SALE
PPTY: xxx, Dural
We act on behalf of Bobby & Suzana Trajkovski and Milan & Slavka Trajkovski on their proposed sale of the above property.
We are instructed that you have been engaged by our client(s) to list their property for sale. Accordingly, we enclose a draft copy of the Contract for Sale for the abovementioned property.
On 1 February 2008, Chesters wrote to Simpsons, complaining that order (2) of the Family Court orders had not been complied with, noting that the only apparent attempt to comply involved listing Dural, and pressing for further action:
Re: SUZI TRAJKOVSKI and BOBBY TRAJKOVSKI
We note that Order 2 made on 10 May 2007 has still not been complied with.
Your client's attempts at compliance appear to be limited to listing the former home for sale at a price 30% greater than the value he estimated it to be worth for the purpose of the property settlement whilst remaining properties are apparently not listed for sale.
Interest payable pursuant to the Family Law Rules is now approximately $35,000 and accrues by over $7,000 each month.
Our client has been exceedingly patient but that is coming to an end. Please submit by return a proposal such as sale of other property or sale by auction that will enable your client to comply with the Orders and Family Law Rules as to payment of interest without unnecessary delay. If that is not received by close of business next week we envisage receiving instructions to either enforce the orders or, if that is not practicable, lodge an application pursuant to section 79A.
A sale of Dural was evidently negotiated in early June 2008, because on 12 June 2008, Chesters made a file note of a telephone attendance on Mrs Trajkovski, in the course of which she was advised to consider lodging a caveat "so that she can participate in the settlement and protect her position":
Suzy Trajkovski
FILE NOTE
Telephone attendance
With Suzy
12.06.08
The family home has finally sold. I am not sure how much for but Suzy is going to sign the contracts for sale in the next few days with Ian Simpson.
I indicated that she may want to consider having a caveat lodged after the exchange goes through or a couple of weeks after so that she can participate in the settlement and protect her position.
Suzy is a bit nervous about claiming the interest which is owed to her because she does not want to jeopardise the sale that again is something that we can deal with after we know the exchange has gone through.
Suzy is going to be in training until next Thursday and will give me a call after that and keep me updated.
Sometime prior to 3 July 2008, Mrs Trajkovski signed the contract for sale, in which the price was stated to be $3,025,000. Rejecting her evidence in this respect, the trial judge found that the contract was not signed by her (or by any of the vendors) in Simpsons' office, or in the presence of Mr Simpson or any of his staff, and that finding is not challenged. Contracts were exchanged on 3 July; Mrs Trajkovski was informed of this, and that the sale was due for completion on 14 August 2008, by email to her from Ms Newman on 31 July 2008.
Meanwhile, on 7 July 2008, at the written request of Simpsons, on the instructions of Mr Trajkovski and without the knowledge of Mrs Trajkovski, the estate agents released $123,000 from the deposit of $302,500, which was applied to the purchase by Mr Trajkovski and his parents of a property at Sans Souci.
[4]
The events of 7 and 8 August
According to Mr Chesters, whose evidence in this respect was accepted by the trial judge, in the period leading up to 8 August 2008, Mrs Trajkovski communicated with him in terms and in a manner which conveyed that she was in fear of her husband, to such a degree that "she had lost the ability to consider her self-interest or even consider basic methods of protecting her financial interests". Mr Chesters was aware that Mr Trajkovski intended to sell one or more of the matrimonial properties, that the $800,000 due to Mrs Trajkovski under order (2) of 10 May 2007 had still not been paid, and that she was "not in control of any of these intended sales"; in those circumstances, he again advised her, on or very shortly before 7 August 2008, that she should instruct him to lodge a caveat in respect of the properties which were intended to be sold, in order to ensure that the proceeds would be applied in payment of what was due to her.
On 7 August 2008, Mr Chesters had a phone conversation with Mr Simpson. According to his Honour's findings - derived in part from Mr Chesters' oral evidence and in part by inference from the terms of the letter he wrote the next day, and which are not challenged - Mr Chesters informed Mr Simpson that he was aware that Mr Trajkovski was intending not to pay Mrs Trajkovski the full balance due to her out of the proceeds of Dural - which was then due to complete the following week - and that he was advising Mrs Trajkovski to lodge a caveat to protect her entitlement to be paid. Later that day, Simpsons sent a letter to Mr Trajkovski, which he apparently received that day, presumably by email. The letter is not in evidence, but it can safely be inferred (as his Honour did), from the subsequent events and communications referred to below, that it informed him of Mr Chesters' proposal to lodge a caveat.
That evening, Mr Trajkovski attended, without warning, the townhouse to which Mrs Trajkovski and their two sons had moved upon separation. In the course of an emotional exchange, he threatened that he would kill their children and himself, saying:
Sign all documents to let the sale of the matrimonial home go through. If you don't tell your solicitors to drop the caveat I will kill the kids and kill myself, you will have destroyed everything I have ever worked for.
Mrs Trajkovski described her response as follows:
During and after Bobby's attendance at my home I felt terrified for the children and my own safety. I asked Bobby to leave which he did. I felt distraught, I was crying. I didn't know what to do. I felt extremely scared of Bobby. I knew from previous experience in our relationship that Bobby could be very violent. I had seen Bobby's violent tendencies in the past during our relationship. I was of the view Bobby was sincere when he said he would "kill the children and himself". I was terrified Bobby would carry out his threat.
At 9.49am on the morning of 8 August, Mrs Trajkovski telephoned Simpsons, and left a message asking that Ms Newman call her back urgently. Ms Newman returned the call at about 10.00am; her note of the conversation was as follows:
8 August 2008
RE: TRAJKVOSKI [sic] - FAMILY LAW
At about 10am I returned Suzi's call. She had words with Bobby last night regarding our letter to Bobby of 7.8.08.
Suzi said she never gave David Chesters instructions to put or consider putting a Caveat on the [Dural]. Suzi said she did not expect this from someone who is supposed to be helping her. She said David Chesters is just pressuring her for payment of his fees.
Suzi said she will try and borrow some money from her parents and just pay Chesters.
I asked if Suzi had seen our letter to Bobby - she said no. Suzi confirmed that Bobby told her that he would give her $100,000 on the sale of [Dural] and when the factories sell she can have the rest.
Suzi said that when she speaks to David Chesters today she will be telling him that as of today he is no longer to act for her.
Suzi mentioned that Bobby said he will not be calling Ian Simpson about his letter.
Thanks
Evelyn Newman
The trial judge rejected Mrs Trajkovski's evidence that she was told by Mr Simpson (whether in this or any other conversation), "You'll get your money when the sale goes through", and that finding is unchallenged.
After her telephone conversation with Ms Newman, Mrs Trajkovski attended Mr Chesters' office. According to Mr Chesters she was "extremely distressed, crying and shaking"; she would not go to his conference room, and he had to see her in the reception area; she would not even sit down. She was in such a state that he was unable to obtain clear instructions. However, she did convey at least some of what had occurred the previous evening, and that his instructions to act for her were terminated.
Mr Chesters telephoned Simpsons immediately after she left his office and had a conversation with Mr Simpson, in which he reported what he had observed of Mrs Trajkovski, what she had told him, and that he was no longer acting for her. According to Mr Chesters, the conversation was to the following effect:
Me: 'Hello Ian this is David. Suzi has just been in here and withdrawn instructions to me. I am extremely concerned for her. Your client has threatened to kill himself in front of her and the children. She is a mess. It's that bad that if we were still before the court I would be considering a next friend. You need to be careful'.
Simpson: 'There are a number of sales that are due for settlement. I understand what you are saying'.
In his affidavit, Mr Simpson said that he did not recall that conversation, but he did not deny it. In his oral evidence, he said:
Q. What conversation do you recall as you sit there now was said? What do you recall? Mr Simpson, if I could just have your attention. What conversation, as you sit there now, do you recall to the best of your recollection with Mr Chesters prior to receiving that letter?
A. He, he spoke to me and informed me of his position consistent with the wording in that letter.
HIS HONOUR
Q. Can you just put that as near as possible into his words when you say,
"Informed me of his position" he said, "I" what?
A. This is pretty, pretty rough, your Honour. "I've just seen Suzie" or "About to see Suzie" or something, "she is very fragile. She's concerned that there was a, a threat of suicide by Bobby Trajkovski. Further there was a threat to kill the children and care needs to be taken. It could be that she needs a, a friend appointed." That's the best of my recollection, your Honour.
Q. Then you received the letter?
A. Yes.
MCINTOSH
Q. Mr Chesters at his affidavit he says that he received no relevant rely from ... (not transcribable)... Within that conversation he says that you didn't respond to him in a way that was relevant; would you agree?
A. Well, I don't know what he means by "relevant".
Q. Responsive.
A. There was not a lot to respond, pardon me, to him. He was telling me what he saw as the position of Mrs Trajkovski.
Q. He said you made no comment with respect to you saying something to him with respect to you protecting yourself.
OBJECTION
EMMETT: I should leap to my feet. When my learned friend says that he said something, she appears to be reading from language that was rejected.
HIS HONOUR: Yes.
MCINTOSH: It was rejected, I apologise if I'm doing that.
HIS HONOUR: The portion concerning an obvious conflict of interest.
MCINTOSH: I don't have it earmarked.
HIS HONOUR: Okay.
Q. What do you recall your response to have been, as best you can recall?
A. The response I don't think was very long, your Honour, it may have been to the effect, "Look, I'll have a yarn to Bobby about it and see what's going on." I'm, I'm reasonably confident that that would have been the response.
Chesters then sent a letter to Simpsons ("the 8 August letter"), which the facsimile transmission imprint indicates was transmitted at 11.47am on that day:
Re: SUZI TRAJKOVSKI and BOBBY TRAJKOVSKI
We refer to our conversation yesterday.
Instead of agreeing to put the representations he made to our client to induce her to receive only a partial distribution of property at settlement next week your client threatened our client last night in the presence of the children with suicide and traumatised her.
Our client has withdrawn instructions and has been left with the impression that she will receive nothing and can do nothing about that because of the actions and threats of your client.
Our former client's last instructions to us was to notify you that she did not wish to file a caveat to protect her position or ensure that she has a say in distribution of the settlement proceeds.
You will now have to take instructions from our former client directly. In those circumstances we identified a professional responsibility to notify you of the duress our client has been put under even though she does not want it disclosed. If this matter was still being litigated we would have to consider the appointment of a next friend. That is the severity of our client's distress following the confrontation your client initiated last night.
We note that your office has taken no part in that duress and has at all times interacted with us in a manner that meets the professional standards required.
Mr Simpson recalled receiving that letter. He said he took note of the statements about the duress, the reference to a next friend, and the severity of Mrs Trajkovski's distress. In his affidavit evidence, he deposed:
6.2 At the time of receiving the letter, I recall taking note of the following statements:
'... the duress our client has been put under even though she does not want it disclosed. If this matter was still being litigated we would have to consider the appointment of a next friend. That is the severity of our client's distress ...
6.3 I do not recall having observed the plaintiff to exhibit an "extremely fragile state of mind" during the interactions I had with her which are referred to in my first affidavit, nor at or around the time of receiving the letter from Norwest Family Lawyers dated 8 August 2008.
6.4 I have 20 years of experience in family law litigation. In my interactions with the plaintiff, I did not observe her to be showing signs of stress to a degree greater than I would normally expect to observe in a party to a family law dispute.
However, there is nothing to suggest that Mr Simpson saw Mrs Trajkovski on, or after, 8 August - at least until a chance encounter long after he had ceased to act for her. Indeed, when asked whether after receiving the 8 August letter he took any steps to approach Mrs Trajkovski, he answered "No, I did not", and when asked why, "Because I approached my client … Bobby Trajkovski".
On or around 8 August, Mrs Trajkovski signed and provided to Mr Trajkovski the transfer of Dural. The trial judge's unchallenged finding was that it was not executed at Simpsons' office or in the presence of Mr Simpson or any of his staff.
On 13 August 2008, again at the written direction of Simpsons, on the instructions of Mr Trajkovski and without the knowledge of Mrs Trajkovski, the estate agents released a further $133,725 from the deposit, of which $53,144 was used to pay stamp duty on Mr Trajkovski's purchase of the Sans Souci property, and the balance ($80,581) to reduce the debt to ING secured on Dural.
On 15 August 2008, Ms Newman and Mrs Trajkovski spoke on the telephone. Later that day, in an email which stated that "circumstances have changed since we spoke on the phone this morning", and invited Mrs Trajkovski to "Let me know if you have any queries and we will see what we can do", Ms Newman notified Mrs Trajkovski that the settlement was not proceeding that day "due to the Purchaser's non-readiness", and that attempts were being made to reschedule settlement for 19 or 20 August. On 21 August 2008, Ms Newman informed Mrs Trajkovski by email that a notice to complete had been issued on 15 August, requiring settlement by 1 September, and that - the purchaser's solicitor having indicated readiness to settle on 25 August 2008 - settlement had been booked for that date. Mrs Trajkovski did not respond to either of these communications from Ms Newman. On 25 August, settlement was again deferred, this time to 3 September; Mrs Trajkovski was not notified of this last deferment.
The sale of Dural was ultimately completed on 3 September 2008. Directions to the purchaser for payment on settlement were provided by Simpsons in a letter signed by Ms Newman and dated 2 September 2008 to the purchaser's solicitor William O'Brien, as follows:
We refer to the settlement of this matter booked for 2.30pm on Wednesday, 3 September 2008 at Espreon, 5/77 Castlereagh Street Sydney.
Your client is directed to pay at the settlement of this matter the following cheques:-
1. BAULKHAM HILLS SHIRE COUNCIL $1,572.00 (Trust/Bank Cheq)
2. ROCKDALE CITY COUNCIL $1,470.92 (Trust/Bank Cheq)
3. SYDNEY WATER $139.04 (Trust/Bank Cheq)
4. JOHN B. HAJJE & ASSOCIATES $1,438.36 (Bank Cheque)
5. GADENS LAWYERS $374.00 (Trust/Bank Cheq).
6. ST GEORGE BANK LIMITED $1,107,974.83 (Bank Cheque)
7. SIMPSON & PARTNERS SOLICITORS $1,046.10 (Trust/Bank Cheq)
8. ING BANK (AUSTRALIA) LIMITED $1,164,110.89 (Bank Cheque)
9. MBS HOLDINGS PTY LTD $457,329.42 (Bank Cheque)
TOTAL $2,735,455.56
The sum payable to ING ($1,164,110.89) discharged debts of Mr Trajkovski and his companies secured on Dural, and was necessary to provide clear title on completion, and that to Gadens ($374.00) the legal costs of the outgoing mortgagee. Likewise the sum payable to Baulkham Hills Council ($1,572.00) was to adjust rates on completion, and the sum payable to Simpsons was presumably their costs for acting on the sale. These sums had to be paid on completion of the sale of Dural. However, the sums payable to Rockdale City Council ($1,470.92), Sydney Water ($139.04), John B. Hajje & Associates ($1,438.36) and St George ($1,107,974.83) were not referable to clearing any encumbrance on, or to costs of the sale of, Dural, but to Mr Trajkovski's purchase at Sans Souci. The payment to MBS Holdings ($457,329.42) was to a company through which Mr Trajkovski was then carrying on property development activities. These sums, totalling $1,568,352.57, were unrelated to the sale of Dural.
Those instructions were given effect at settlement, with the result that Mrs Trajkovski received nothing. In addition, of the deposit of $302,500, $176,144 had already been released at the direction of Simpsons and applied in accordance with Mr Trajkovski's instructions to the purchase of the Sans Souci property. The payments towards the purchase of the Sans Souci property and to Mr Trajkovski's development company, totalling $1,744,496.57, represented what would ordinarily have been regarded as the net proceeds available to the vendors. As each of Mr and Mr Trajkovski and his parents was a joint tenant of Dural, upon its sale, they were each prima facie entitled to one-fourth of those net proceeds; the net proceeds of Mrs Trajkovski's share was therefore $436,124.14.
[5]
Subsequent events
On 16 October 2008, Mrs Trajkovski retained Peter Cornock of Peter Cornock & Associates to act for her in the matrimonial proceedings, including to recover the money which remained outstanding under order (2) of the Family Court orders of 10 May 2007. It is clear that she remained reticent to upset Mr Trajkovski or to jeopardise his enterprises and undertakings by enforcement action. Ultimately, however, on 24 May 2010, further orders were made by the Family Court, by consent, to the effect that:
1. Mr Trajkovski pay Mrs Trajkovski the sum of $750,000 plus interest, being the balance owing pursuant to the Family Court orders of 10 May 2007;
2. Mr Trajkovski would cause the sale of Unit 4, 19 Baker Street, Banksmeadow to be completed by 16 August 2010, and would pay Mrs Trajkovski not less than $300,000 from the proceeds; and
3. Mr Trajkovski would by 16 August 2010 refinance certain other properties and make further payments to Mrs Trajkovski to bring the total paid to her up to $750,000 plus interest at 9.25% from the date of the orders.
Mr Trajkovski did not comply with the 24 May 2010 orders, and on 16 August 2010, further consent orders were made, by which Mr Cornock and Mr Simpson were appointed trustees for sale of Unit 4/19 Baker Street, and a property at 29 Violet Street, Revesby. The Revesby property was sold on 19 April 2011, and from the proceeds Mrs Trajkovski received $188,773.66, of which she subsequently had to reimburse $24,249.99 to a tenant. Before Unit 4 had been sold by the trustees, Bardom Pty Ltd lodged a caveat claiming an interest under an unregistered mortgage which Mr Trajkovski had caused to be granted by MBS Holdings Pty Ltd, the Trajkovski family company which was the registered proprietor of the unit. On 20 November 2012, Bardom was granted leave to intervene in the Family Court proceedings, in which it claimed that its unregistered mortgage had priority over Mrs Trajkovski's entitlement under the Family Court orders. Bardom's priority was evidently acknowledged by Mrs Trajkovski as well as by Mr Trajkovski; the earlier orders appointing Mr Cornock and Mr Simpson as trustees for sale of Unit 4 were discharged by consent on 20 November 2012. The trial judge inferred, and there is no reason to doubt, that after satisfying Bardom's claim, nothing would remain to be applied towards meeting Mr Trajkovski's obligations to Mrs Trajkovski. However, the 24 May 2010 orders remain in force insofar as they require Mr Trajkovski to pay Mrs Trajkovski the sum of $750,000 plus interest.
[6]
The issues
Although complaints that Simpsons had breached various professional duties in the course of acting on transactions other than the sale of Dural were initially pleaded, they were abandoned at trial. The only causes of action that were pressed at trial, and that are in issue on this appeal, relate to the conveyance of Dural, and Mrs Trajkovski's fundamental complaint is that Simpsons enabled her interest in the net proceeds of sale to be alienated, contrary to her interests and without her instructions.
The trial judge held that:
1. there was no relevant solicitor-client relationship between Simpsons and Mrs Trajkovski in relation to the sale of Dural, and Simpsons owed her no duty of care;
2. even if there was a solicitor-client relationship and a duty of care, there was no breach, because Simpsons disbursed the proceeds of sale in accordance with the instructions of Mr Trajkovski, and he had Mrs Trajkovski's ostensible authority to give instructions as to the disbursement of the proceeds; and
3. it had not been proved on the balance of probabilities that all reasonable prospects of recovery against Mr Trajkovski had been exhausted, and thus the alleged loss had not been established.
The appeal challenges those conclusions of the trial judge. A notice of contention seeks to uphold the trial judge's conclusions on alternative grounds, in particular:
1. that any breach of duty, at law or in equity, by Simpsons, did not cause the loss for which Mrs Trajkovski claims damages;
2. that Mrs Trajkovski was guilty of contributory negligence in failing to take reasonable steps to protect her interest in the proceeds of the sale of Dural; and
3. that Mr Trajkovski is a concurrent wrongdoer for the purposes of Part 4 of the Civil Liability Act 2002 (NSW).
Accordingly, the issues are:
1. Duty of care: did Simpsons owe Mrs Trajkovski a duty of care;
2. Breach of duty: if so, were Simpsons nonetheless entitled to disburse the proceeds of sale in accordance with the instructions of Mr Trajkovski as Mrs Trajkovski's ostensible agent;
3. Causation of harm: did any breach of duty by Simpsons cause harm to Mrs Trajkovski;
4. Quantification of loss: if so, what is the amount of Mrs Trajkovski's loss;
5. Defences: was Mrs Trajkovski guilty of contributory negligence in failing to take reasonable steps to protect her interest in the proceeds of the sale of Dural, and was Mr Trajkovski a concurrent wrongdoer.
Although Mrs Trajkovski filed a timely notice of intention to appeal on 14 June 2018, it was not served until 18 August 2018, with the consequence that when the notice of appeal was filed on 20 August 2018, it was out of time. However, in circumstances where the respondents had been notified, albeit informally, of the intention to appeal, at the hearing, without opposition, the Court ordered that time for the filing of the Notice of Appeal be extended to the date on which it was filed being 20 August 2018.
[7]
Duty of care
The trial Judge found that Simpsons were not retained by Mrs Trajkovski in relation to the sale of Dural, and did not owe her a common law duty of care:
68 The primary cause of action propounded by the plaintiff is negligent breach of duty by the defendants in the discharge an alleged retainer from her (and from her husband and her parents-in-law) to act on completion of the sale of the Dural property. I find that the defendants were retained in relation to this sale not by all four vendors but by Mr Trajkovski alone. The plaintiff was a necessary signatory to the contract and the transfer but she did not engage the defendants as her solicitors in the matter. It is open to one of several registered proprietors of a property to engage solicitors with respect to its disposition while the other proprietors are either separately represented or unrepresented. In this case, the plaintiff chose to be unrepresented. At the commencement of the sale process she had Mr Chesters as her solicitor in relation to the matrimonial dispute but she did not ask him to act on the conveyancing transaction.
Like other contracts, the retainer of a solicitor may be express or implied. It may be accepted that there is no evidence of any express retainer by Mrs Trajkovski of Simpsons to act on the sale. Indeed, there is no evidence of any costs agreement or written retainer with any client in relation to the sale of Dural, nor even of any such fee disclosure as Mr Simpson was obliged by law to make to his clients, [17] whoever they were. However, the evidence of the existence of a retainer includes:
1. the letter from Simpsons providing the draft contract to Century 21, referred to above, in which they state (emphasis added): "We act on behalf of Bobby & Suzana Trajkovski and Milan & Slavka Trajkovski on their proposed sale of the above property";
2. the cover sheet of the contract for sale, in which Simpsons are nominated as solicitors for the vendors, and the vendors are described as "Bobby Trajkovski, Milan Trajkovski, Slavka Trajkovski and Suzana Trajkovski";
3. the circumstance that on 31 July 2008 - before Chesters' retainer had been terminated - Ms Newman communicated directly with Mrs Trajkovski by email to inform her that contracts had been exchanged, and of the settlement date (and that such communication was not sent to Chesters);
4. the 8 August letter, in which Chesters stated: "You will now have to take instructions from our former client directly", which reflects the position that whereas in respect of the sale until that point Chesters might have served as an intermediary in conveying Mrs Trajkovski's instructions to those who were acting for the vendors (including her) on the sale, thereafter instructions would have to be taken from her directly;
5. the facts that on 15 August 2008, and again on 21 August, Ms Newman communicated developments concerning settlement directly to Mrs Trajkovski, including in the first case an invitation to contact her if there were any queries;
6. the objective fact that Mrs Trajkovski was not dealing directly with the purchasers, and no-one other than Simpsons was doing so on her behalf; and
7. the deduction by Simpsons from the gross proceeds of sale of what was presumably their costs of acting for (all) the vendors.
Mr Simpson was under no illusion in this respect; he twice accepted in his oral evidence that his clients included Mrs Trajkovski:
Q. On the sale of Dural you acted for Suzie, Bobby and the parents on the sale?
A. That's correct.
…
Q. You were acting for Suzie on the sale of Dural?
A. Yes.
Nor was Ms Newman; in her affidavit evidence she deposed:
Between about June 2008 and September 2008, Simpson & Partners acted on behalf of the plaintiff [Mrs Trajkovski], Mr Trajkovski and his parents in relation to the sale of their property at …, Dural.
The reasoning that supports his Honour's conclusion that Simpsons were not retained by Mrs Trajkovski and owed her no duty of care was articulated in the course of rejecting a contention that there was a duty of care owed to Mrs Trajkovski in connection with "the St George Bank facility increase", but it must equally have supported his Honour's like conclusion about the Dural sale:
55 All of these particulars proceed on the assumption that the defendants were, at the time of the St George Bank facility increase, under a duty of care to advise the plaintiff with respect to the impact of the transactions upon her matrimonial property position. But they were not under such a duty. They were not retained by the plaintiff to advise her on the matrimonial dispute. They were not retained by her even for the discrete purpose of documenting the St George Bank transaction. She knew that the defendants were retained by her husband to advise him on the matrimonial property dispute.
56 A solicitor does not owe a duty of care to advise or to protect the interests of his client's opponent in a contentious matter: Perera v Genworth Financial Mortgage Insurance (2017) 94 NSWLR 83 at 96-97; [2017] NSWCA 19 at [52]-[53]. A duty of care owed by the defendants to the plaintiff to advise her or act in her interests with respect to the St George Bank transaction, for example to warn her that it might compromise Mr Trajkovski's capacity to pay the $800,000, would be inconsistent with their duty to Mr Trajkovski. As stated by Gaudron J in Hill v Van Erp (1997) 188 CLR 159; [1997] HCA 9 at 196-197:
'[A] contract between solicitor and client obliging the solicitor to act in the client's interests and contrary to those of the third party excludes any relationship of proximity between the solicitor and the third party. Similarly, in my view, there can be no duty of care owed to a third party if the duty asserted is inconsistent with the duty owed to the client or of the solicitor is obliged to act exclusively in his or her client's interests.'
That reasoning involves propositions that:
1. Simpsons were not retained by Mrs Trajkovski to advise her on the matrimonial dispute;
2. Mrs Trajkovski knew that they were retained by Mr Trajkovski to advise him on the matrimonial property dispute;
3. a solicitor does not owe a duty of care to advise or to protect the interests of his client's opponent in a contentious matter; and
4. the existence of a duty of care owed by Simpsons to Mrs Trajkovski to advise her or act in her interests with respect to the sale of Dural would be inconsistent with their duty to Mr Trajkovski.
However, while it is correct that Simpsons were retained to act for Mr Trajkovski in respect of the matrimonial issues, and owed Mrs Trajkovski no duty of care in so acting, that does not mean that they could not and did not act for her, and/or owe her a duty of care, on the sale of Dural, in which she had an interest. It is commonplace in matrimonial property proceedings, when matrimonial property is to be sold pursuant to Court order or by agreement, for the conduct of the sale to be given to the solicitors for one of the parties (say the husband), while the solicitor for the other (say the wife) maintains a watching brief to ensure that the interests of that party are protected. It was this "watching brief" role that Chesters were fulfilling, at least until their retainer was terminated. In such a case, the solicitors with the conduct of the sale step outside the role of acting exclusively for one party in the matrimonial dispute, and incur responsibilities to both. In such a conveyancing transaction they are acting for both parties, and owe duties of care to both, notwithstanding that the wife has her own solicitor. Thus, for example, if upon exchange of contracts the solicitors with conduct of the sale failed to ensure that a deposit was paid, they would be liable to the wife as well as to the husband.
In Al-Kandari v J R Brown & Co, [18] solicitors acting for the claimant's husband in a matrimonial dispute agreed to hold his passport (which was also the children's passport) to the order of the court, because of a perceived risk that he might attempt to abduct the children and flee the country. The solicitors released the passport to an official at the Kuwaiti embassy, in order to permit the children's names to be removed from it. However, the husband obtained the passport, and absconded with the children. The solicitors were held liable to the wife, on the basis that in agreeing to hold the passport they stepped outside their role as solicitors for their client, and incurred additional responsibilities towards the wife. Similarly, in the present case, by acting for vendors on the sale of the jointly owned property, the solicitors stepped outside their role as solicitors acting exclusively for the husband in the matrimonial proceedings, and incurred responsibilities towards all the vendors - including Mrs Trajkovski.
In the course of conducting the conveyance, Simpsons would inevitably have to take steps that necessarily affected Mrs Trajkovski's interests. This is important: they were dealing with her property, and she was in a position of vulnerability as a result.
At one stage, counsel for Simpsons advanced an argument that they may have been her agent, but not her solicitor. This argument, which had not been pleaded nor advanced at first instance, was subsequently abandoned. The statement in Chesters' letter of 8 August, that "You will now have to take instructions from our former client directly", does not mean that Mrs Trajkovski chose to be unrepresented, but that whereas until that point her instructions to Simpsons were conveyed through her separate solicitor, thereafter they would have to be obtained directly from her.
Accordingly, there was a solicitor-client relationship between Simpsons and Mrs Trajkovski, and they owed her a duty of care, in relation to their acting on the sale of Dural.
[8]
Breach of duty
The trial Judge held that even if Simpsons were retained to act for Mrs Trajkovski on the sale and owed her a duty of care, there was no breach of duty in disbursing the proceeds of sale, because they properly proceeded upon instructions given by Mr Trajkovski, with Mrs Trajkovski's ostensible authority, and this authority extended to the disbursement of the proceeds:
70 The first defendant received instructions from Mr Trajkovski regarding distribution of the proceeds and he acted on those instructions. The first defendant treated Mr Trajkovski as the agent of all four vendors with respect to instructions regarding distribution. I find that the plaintiff acted in such a way as to hold Mr Trajkovski out to the defendants as her agent, with authority to instruct them regarding the distribution of proceeds.
[9]
Ostensible Authority
His Honour directed himself in accordance with the principles stated by Beazley P (with whom McColl JA agreed in this respect) in Feldman v GNM Australia Ltd: [19]
99 Whether or not a person has ostensible authority (also described at times as "apparent authority") is a question of fact: see Geissler v Accro Motors Pty Ltd (1955) 73 WN (NSW) 31; CIC Insurance Ltd v Bankstown Football Club Ltd (1995) 9 ANZ Insurance Cases ¶61-232 at 75,554. It usually involves an inference based upon a representation or representations made by the principal that the agent has authority to contract within the ambit or scope of the "apparent authority": Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 503.
100 The jurisprudential basis of ostensible authority is traditionally described in terms of estoppel by representation. Reliance is a necessary element of the estoppel: Freeman & Lockyer v Buckhurst Park Properties at 503; Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72; Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 200; G E Dal Pont, Law of Agency (3rd ed, 2014, LexisNexis) 460 [20-7]. In a case such as the present, the party seeking to enforce the contract must prove a change of position to its detriment.
It may be observed that that passage emphasises that "reliance is a necessary element", a matter to which it will be necessary to return. Having set out those passages, His Honour proceeded: [20]
78 Applying those principles I find that the plaintiff made representations to the defendants, by signing the contract and transfer, by omission of any qualifying instruction to the defendants and by express relinquishment of the control of the proceeds (conveyed to Ms Newman on 8 August 2008). The defendants acted upon these representations and treated Mr Trajkovski's instructions concerning disbursement as coming from the plaintiff's authorised agent. The defendants thus changed their position to their detriment. They acted on the understanding, which the plaintiff is estopped from disputing, that they had the plaintiff's authority through her agent to disburse the funds. Even if they had been under a retainer from the plaintiff with respect to completion of the sale they would not have acted negligently by implementing the directions of her ostensibly authorised agent.
In principle, one of two or more clients of a solicitor in respect of the same transaction is not entitled, without more, to give instructions to the solicitor both on his or her own behalf and on behalf of the other clients. A solicitor's contract of retainer is with each and every one of the clients, and the solicitor's duties are owed and must be discharged to each of them. A solicitor is not entitled to communicate with and take instructions from one alone of several clients, unless he or she has the authority of the other clients to do so. [21]
In Vukmirica v Betyounan, [22] to which the trial judge does not appear to have been referred, Ms Vukmirica, a solicitor, had agreed, at the request of Mr Betyounan, to act on behalf of Mr Betyounan and his wife in a borrowing transaction. The solicitor submitted that because her retainer to act on behalf of Mrs Betyounan was through the agency of Mr Betyounan, Mr Betyounan was therefore Mrs Betyounan's agent for the purposes of the whole of the retainer, including directing how the money advanced was to be paid, and that having acted in accordance with Mr Betyounan's directions, given also as agent for Mrs Betyounan, she had discharged her contractual and tortious duties. This submission was rejected by Giles JA, with whom McColl JA and Bell JA (as her Honour then was) agreed:
48 The submission was founded on the admission in the defence that the appellant "agreed to act on behalf of the plaintiffs" (plural) and the common ground that Mr Betyounan retained her. However, authority to create a solicitor/client relationship is not the same as authority thereafter to give instructions in the performance of the relationship. While Mr Betyounan may have retained the appellant on behalf of Mrs Betyounan, the appellant owed duties to Mrs Betyounan distinct from those owed to Mr Betyounan, and more was needed to establish his authority to give instructions on her behalf.
After referring to the statement in Farrer v Copley Singletons of the principles mentioned above, his Honour continued:
49 When retainer on behalf of both respondents came from the admission on the pleadings, and conferring of authority on Mr Betyounan to retain the appellant was not otherwise proved, without further evidence it could not be taken that Mrs Betyounan had left entirely to Mr Betyounan the loan and mortgage transaction so that in the discharge of the appellant's duties owed to her the appellant need look only to Mr Betyounan. …
A submission that actual or ostensible authority was established by the wife's return of signed transactional documents through the husband was also rejected:
50 Actual authority may be found from the putative principal and agent so conducting themselves that it should be inferred (see for example Equiticorp Finance Ltd v Bank of New Zealand (1993) 32 NSWLR 50 at 132 per Clarke and Cripps JJA). The appellant further submitted that it should be inferred from Mr Betyounan's dealings on both their behalves with the appellant with Mrs Betyounan's apparent acquiescence, reinforced by Mrs Betyounan providing the signed loan contract, mortgage and other documents to her husband for him to take back to the appellant. That falls short, in my opinion, of authority to direct how the loan was to be paid. Use of Mr Betyounan as a courier was not a conferring of general authority, and speaking of apparent acquiescence meant little when it was acquiescence in retainer of the appellant and Mr Betyounan's couriership.
51 The appellant also submitted that Mr Betyounan was acting with ostensible authority. That turns on Mrs Betyounan's conduct representing to the appellant that Mr Betyounan had her authority to direct how the loan was to be paid: Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 113 CLR 72 at 77; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; 218 CLR 451 at [36]. The only basis for such a representation was the return of the signed documents through Mr Betyounan. I do not think the submission is made out.
The trial judge identified six acts and omissions by which Mrs Trajkovski was said to have clothed her husband with ostensible or apparent authority to instruct Simpsons regarding the distribution of the proceeds of sale.
The first was that she executed the contract for sale and provided to it Mr Trajkovski, thus equipping him with the means to instruct Simpsons regarding completion of the sale of Dural under the mantle of her authority. However, that one vendor executes a contract and leaves it with another to deliver it to their solicitor does not convey anything about the authority of the second to instruct the solicitors "regarding completion of the sale". As in Vukmirica, use of Mr Trajkovski as a courier does not confer a general authority, nor convey a representation that he has such authority.
The second was that she executed the transfer and provided it to Mr Trajkovski, thus equipping him with the means to effect the sale and to assert his authority to act on her behalf with the hallmark of authenticity. However, ostensible authority requires a representation by the putative principal that the putative agent has authority, and while the provision of one's muniments of title to another may "arm" that other with the indicia of authority, a transfer is not a title document. That one of multiple vendors executes a transfer and leaves it with another to deliver it to their solicitor does not convey anything about the authority of the second to instruct the solicitors about how the proceeds are to be disbursed. Again, use of Mr Trajkovski as a courier does not confer a wider authority, nor connote that he has authority to give instructions for disbursement of the proceeds.
The third was that, knowing that Mr Trajkovski had retained Simpsons to act on the sale and that Mrs Trajkovksi had equipped him with the means to effect the sale, she failed to advise Simpsons that Mr Trajkovski "lacked her authority regarding any aspect of the completion, in particular regarding disbursements of proceeds". However, where there was nothing to suggest that he had her authority to do so, there was no occasion for her to advise that he did not.
The fourth was that after Simpsons contacted Mrs Trajkovski to notify her that completion would take place on 14 August 2008, she failed "to convey any particular instructions regarding application of the proceeds of sale or otherwise to qualify what would have been perceived as the full authority of her husband to instruct the firm concerning the sale". However, it is not for a solicitor's client, on being notified that settlement is impending, spontaneously to give instructions in respect of application of the proceeds. The client can safely assume that the solicitor would not allow them to be disbursed without, or except in accordance with, the client's instructions. In any event, there was no basis other than rash assumption for any perception that Mr Trajkovski had full authority to give instructions concerning the sale.
The fifth was that in the context of discussions regarding the possibility of Mrs Trajkovski lodging a caveat in respect of Dural, Mrs Trajkovski terminated Chesters' retainer, did not lodge a caveat, and informed Ms Newman that "she was content to rely on her husband's offer to pay her $100,000 out of the net proceeds". However, failure to lodge a caveat does not cloak Mr Trajkovski with any authority, nor convey any representation that he has such authority. And even if Simpsons were entitled to rely on Mrs Trajkovski's statement that "she was content to rely on her husband's offer to pay her $100,000 out of the net proceeds" - which, for reasons to which I shall come, they were not - it would still have required them to see that she receive $100,000 out of the proceeds. At the highest, it was express authority to disburse the proceeds upon condition that there be $100,000 from them for her - which condition was not satisfied, so that even on that basis there was no authority.
The sixth was that on each of 15 and 21 August 2008, Simpsons notified Mrs Trajkovski of successive dates to which settlement of the sale had been postponed, and she did not respond on either occasion; notably, she did not instruct them as to what was to be done with any part of the proceeds of sale, and she said nothing to reverse the position as it had been left on 8 August 2008. However, failure to respond to being informed that settlement has been deferred in no way conveyed that Mr Trajkovski was authorised to give instructions about the proceeds.
Permeating the above reasons is the notion that there was some necessity for Mrs Trajkovski to disabuse Simpsons of any assumption that Mr Trajkovski had her authority. That is plainly not the case. Moreover, in this case Simpsons knew that Mrs and Mr Trajkovski were estranged, and had been involved in matrimonial litigation, and that - until 8 August - Mrs Trajkovski had been represented by her own solicitor. That background provides a context in which - perhaps even more so than in the case of a happily married couple - a solicitor would ordinarily be astute to obtain instructions directly from each client, and not assume that one had the authority of the other. Moreover, Simpsons were in receipt of the 8 August letter from Chesters, which relevantly stated:
You will now have to take instructions from our former client directly. In those circumstances we identified a professional responsibility to notify you of the duress our client has been put under even though she does not want it disclosed.
In the light of that, a solicitor acting reasonably, having regard to the interests of their client Mrs Trajkovski, could not safely have assumed that Mr Trajkovski had her authority to give instructions about disbursement of the proceeds of sale.
The only representation that remotely conveyed that Mr Trajkovski had any authority to give instructions on behalf of Mrs Trajkovski was in her conversation with Ms Newman on 8 August, in which according to Ms Newman's note: "Suzi confirmed that Bobby told her that he would give her $100,000 on the sale of [Dural] and when the factories sell she can have the rest", and "Suzi said that when she speaks to David Chesters today she will be telling him that as of today he is no longer to act for her". In its terms it hardly amounts to a representation that Mr Trajkovski had her authority, and - as has been mentioned - at the very highest it was subject to a condition which was not satisfied. But in any event it could not be relied upon, because immediately after it was conveyed to them, Simpsons were placed squarely on notice that Mrs Trajkovski was acting under duress, and they took no, let alone adequate, steps to dispel the doubts which, acting prudently in Mrs Trajkovski's interests, they ought thereafter have entertained.
The trial judge concluded that Simpsons were neither actually nor constructively aware that Mrs Trajkovski was under duress or suffering under a "special disability" at or around the relevant time:
82 The plaintiff did not plead any case which squarely alleged, as a fact to be found by the Court, that her will was overborne by Mr Trajkovski's conduct on the evening of 7 August 2008 so that her actions in terminating Mr Chesters' retainer, in giving him the final instructions which she did and in communicating with Ms Newman on the morning of 8 August 2008, were all the product of duress. In any event I find that the defendants were not aware of circumstances from which they in fact concluded or ought to have concluded that the plaintiff acted at that time under such duress.
83 Mr Chesters' letter of 8 August 2008 expressed his concern about his client having been "traumatised" and placed under "duress". However the plaintiff's direct contact with Ms Newman consisted of denigrating Mr Chesters, asserting that it was he who had pressed her to seek payment out of the proceeds of the Dural property only to advance his own interest in payment of his fees, and stating that she had made an arrangement with Mr Trajkovski under which she would not seek to impede the sale by a caveat and would receive $100,000 thereafter. I have no hesitation in accepting the plaintiff's evidence that she was shaken by her husband's conduct on the evening of 7 August 2008. However I am satisfied she put on a brave front of composure to Ms Newman. By that conduct and by her criticism to Ms Newman of Mr Chesters she rebutted the latter's expressions of concern about her having been subjected to duress.
His Honour rightly described Mrs Trajkovski's pleading and submissions relating to unconscionable conduct as "unclear, incomplete and misconceived", essentially because Mrs Trajkovski did not identify a transaction between Mrs Trajkovski and Simpsons to which the principles of unconscionable dealing could apply. However, the present relevance of the question of duress is not as a material fact in a cause of action which had to be pleaded, but as an evidentiary response to the unpleaded contention advanced by Simpsons as defendants that they were entitled to rely on Mr Trajkovski's instructions alone. The question whether they were on notice that she was under duress - or at least undue influence - is of central importance to two matters: first, whether they were entitled to rely on the "instructions" given by her orally on 8 August 2008, such as they were; and secondly, what they ought prudently have done in discharge of their duty of care to her thereafter.
The gravity of what Simpsons were told by Chesters in the 8 August letter was enormous. Here, another solicitor informed them - as he explained, contrary to his client's wishes but as a matter of professional obligation - that the previous night she had been subjected to a threat that her husband would commit suicide, which had so traumatised her that she was acting under duress, and that in his judgment the effect on her was that she was not acting in her own interests, to the point that in a litigious context he would have considered her capacity to give instructions in her own interests to be impaired. In the preceding telephone conversation on the same morning, Mr Chesters had told Mr Simpson: "You need to be careful".
The respondents submitted that even if it were accepted that Mrs Trajkovski's will was overborne by her husband, the trial judge's conclusion that Simpsons had neither actual nor constructive knowledge of it should be upheld. In this respect, reference was made to Mr Simpson's evidence that he did not have any knowledge of any abuse, threats or violence directed towards Mrs Trajkovski by Mr Trajkovski; that while he acknowledged receiving the 8 August letter from Chesters he denied having "any direct knowledge of the incident described in that letter"; that he did not observe Mrs Trajkovski to exhibit an "extremely fragile state of mind" during the interactions he had with her, especially at or around 8 August 2008; that he did not observe Mrs Trajkovski to be showing signs of stress to a degree greater than he would normally expect to observe in a party to a family law dispute; and that none of these aspects of his evidence were challenged in cross-examination. However, receipt of the letter of 8 August was itself ample to alert Mr Simpson that she might be acting under duress, or undue influence. The 8 August letter mentions the threat of suicide made by Mr Trajkovski on 7 August 2008; "the duress Mrs Trajkovski has been put under even though she does not want it disclosed"; and that her state was such that, if the context were litigious, a next friend might be required. And despite Mr Simpson's evidence that he did not observe Mrs Trajkovski to exhibit an "extremely fragile state of mind" during the interactions he had with her, especially at or around 8 August 2008, Mr Simpson in fact made no observations of Mrs Trajkovski on or after 8 August.
Reference was also made to the evidence of Ms Newman that, until she received a copy of Mrs Trajkovski's affidavit in these proceedings, she did not have any knowledge of Mrs Trajkovski being "subjected to verbal abuse, physical threats, and abuse, sexual abuse or violence" by Mr Trajkovski, and did not recall ever being told that she felt intimidated by, bullied by or fearful of him; that in their conversation on 8 August, Mrs Trajkovski, though upset and frustrated, was "easy to follow" in the sense that she was expressing herself coherently; and that it was never put to Ms Newman that she was wrong or mistaken in these respects. However, Ms Newman did not dispute that she had become aware of the 8 August letter at about the time it was received; she deposed (emphasis added):
On 8 August 2008 at approximately 11:47 am, Simpson & Partners received a letter from Norwest Family Lawyers. Among other things, the letter informed us that Norwest Family Lawyers no longer acted for the plaintiff. A copy is at page 30 of Exhibit EN1. The letter also referred to threats having been made by Mr Trajkovski to the plaintiff. I do not recall hearing of such threats prior to reading this letter, nor do I recall being informed of this by the plaintiff or Mr Trajkovski at any time.
The fact that neither Mr Simpson nor Ms Newman had personally witnessed any instance of duress or undue influence does not detract from the circumstance that they were clearly informed of enough of what had happened to alert a reasonable solicitor to a very real possibility that Mrs Trajkovski was acting under duress or undue influence. Likewise, that the letter concludes by noting that Simpsons have "taken no part in that duress and [have] at all material times interacted with us in a manner that meets the professional standards required" in no way detracts from its effect as conveying that Mrs Trajkovski was acting under duress. From that letter, any reasonable solicitor acting in Mrs Trajkovski's interests would have at least entertained the possibility that she was acting under duress or undue influence. The respondents argued that the evidence of neither Mr Chesters nor Mr Simpson suggested that allusion was made to "mental capacity" or "soundness of mind" in the conversation between them on 8 August, nor in the letter that followed, but mental capacity and soundness of mind is not the point: the substance of the message conveyed was that she had been threatened, in the presence of her children, with the suicide of her husband, and as a result was acceding to his demands and not safeguarding her own interests. With that information, Simpsons could not safely act on any instruction that she might have given them an hour or so before they received the 8 August letter. At the very least, the information brought to their attention by Chesters required that Simpsons very carefully interview and examine their client Mrs Trajkovski, before discarding the possibility that she was acting under duress. Instead, they did nothing - other than perhaps to speak with Mr Trajkovski.
It may well be that, as the trial judge found, Mrs Trajkovski, though shaken by her husband's conduct on the evening of 7 August 2008, put on "a brave front of composure" to Ms Newman in their conversation on the morning of 8 August. But after that conversation, Simpsons were informed by Chesters, orally and in writing, that she was under duress, and that they needed to take care. In those circumstances, it is not apparent how it could have been concluded, as his Honour did, that "by that conduct and by her criticism to Ms Newman of Mr Chesters she rebutted the latter's expressions of concern about her having been subjected to duress"; it was after her conversation with Ms Newman that Simpsons were informed, both orally and in writing, of matters from which they should have entertained the possibility that she had given those instructions under duress.
A further reason for rejecting the contention that Mr Trajkovski had ostensible authority to give instructions on behalf of Mrs Trajkovski about disbursement of the sale proceeds is that reliance on his having such authority was not established. As has been noted, "reliance is a necessary element" of the estoppel by representation which founds ostensible authority. His Honour found that in disbursing the proceeds from the sale of Dural in accordance with Mr Trajkovski's instructions, Simpsons relied upon representations by Mrs Trajkovski to the effect that he had authority to give instructions regarding the sale on her behalf:
78 Applying those principles I find that the plaintiff made representations to the defendants, by signing the contract and transfer, by omission of any qualifying instruction to the defendants and by express relinquishment of the control of the proceeds (conveyed to Ms Newman on 8 August 2008). The defendants acted upon these representations and treated Mr Trajkovski's instructions concerning disbursement as coming from the plaintiff's authorised agent. The defendants thus changed their position to their detriment. They acted on the understanding, which the plaintiff is estopped from disputing, that they had the plaintiff's authority through her agent to disburse the funds.
However, there was not the slightest evidence that Simpsons assumed that Mr Trajkovski had Mrs Trajkovski's authority and acted on that assumption. Proof of such an assumption is an inherent aspect of proof of detrimental reliance on it. If anyone could have given evidence that they held such an assumption, it would have been Mr Simpson or Ms Newman. Neither did. In the absence of such evidence, the court should not be astute to infer it; especially in the context of a husband and wife who are estranged and engaged in matrimonial litigation, it is not an assumption lightly to be made.
Moreover, Mr Simpson gave evidence to the contrary; asked about his acts in response to the 8 August letter, he said (emphasis added):
Q. Did you at any time subsequent to receiving this letter take any steps to approach Suzie?
A. No, I did not.
Q. Why not?
A. Because I approached my client.
Q. Your client. There were three ---
A. I'm sorry, Bobby Trajkovski.
Q. When you approached your client what do you mean by "approached"?
A. I, I asked him certain questions.
Q. From that I take it whatever those answers were, which I can't ask, you formed the view from Bobby, whatever that response was, that you were relieved of any obligation to contact Suzie?
A. No.
It is not entirely clear whether his Honour rejected that last question and answer, because according to the transcript it was followed by:
OBJECTION
HIS HONOUR: It's a legal conclusion, isn't it?
EMMETT: Yes.
MCINTOSH: I'm asking that of a solicitor who -
HIS HONOUR: I know but whatever Mr Simpson may say, and with no disrespect to him, having regard to the terms of this letter, the circumstances that he was acting on a conveyancing transaction for four registered proprietors, it will be for the Court to decide whether, as a matter of law, he was constrained not to disburse the proceeds except with explicit authority from your client. I will have to decide that yay or nay but whatever he may think about it - I emphasise no disrespect to him - it won't make any difference, will it?
MCINTOSH: What I was attempting to avoid was a situation where you might - I may not have explored that to the satisfaction of the Court and I was mindful and I'll take -
HIS HONOUR: No, all you need to explore really is all the facts and circumstances surrounding his taking of instructions and the identification of who his clients were on the conveyancing transaction and what communications he had and then the Court will make a judgment taking into account counsel's submissions when the evidence is closed.
MCINTOSH: Thank you.
However, the answer was not struck out. Moreover, it would have been erroneous for it to be struck out, because Mr Simpson's view was highly relevant, in the context of the issue of ostensible authority, to reliance. The objection may be explicable on the basis that the question of ostensible authority was not distinctly raised in the proceedings until four pages later in the transcript.
Accordingly, there was insufficient evidence of any representation by Mrs Trajkovski that her husband had her authority to give directions as to the disbursement of the proceeds of sale. The only possible authority was that conveyed in the 8 August conversation, but it was insufficient, conditional, and in any event could not be relied on. There was no evidence of reliance on any such representation, and there was evidence to the contrary. Mr Trajkovski had no authority to give instructions on behalf of Mrs Trajkovski, and Simpsons were not entitled to assume that he did.
That conclusion renders it unnecessary to deal with the appellant's complaint that she was denied procedural fairness in being required to meet the case of ostensible authority, which did not appear on the pleadings and emerged with clarity only in the course of cross-examination of Mr Simpson, but which the appellant was afforded an opportunity, which was taken, to address at the trial by supplementary written submissions.
[10]
Breach
It remains to identify how the defendants ought to have acted in Mrs Trajkovski's interests, but did not. His Honour characterised her case at trial as follows:
69 … The plaintiff contends that it was within the scope of the defendants' common law duty to exercise reasonable care to cause $800,000 of the net proceeds of the sale to be paid to her in satisfaction of the orders of 10 May 2007. It is alleged that duty was breached by the defendants causing or permitting the whole of the proceeds to be applied in other ways.
In the light of the manner in which her case was put, and the conclusions I reach about it, it is unnecessary to consider whether, after receipt of the 8 August letter, Simpsons ought to have ceased to act for either or both of Mr and Mrs Trajkovski. What matters is that in continuing to act for Mrs Trajkovski, their duty to her was in no way modified or qualified by any conflicting duty they might have concurrently owed to Mr Trajkovski. Mrs Trajkovski was entitled to the benefit of their skill, care and attention as if they were acting for her exclusively. If that presented a problem for the solicitors, the solution of ceasing to act was in their hands.
It is plainly the duty of a solicitor acting on a transaction for a client to use reasonable care to avoid a client's rights and entitlements under the transaction being jeopardised or lost. In a sale, the vendor's principal interest is in receipt of the proceeds of the sale, and the whole formal process of settlement of a conveyancing transaction is intended to ensure that the vendor does not part with title without receiving the proceeds - or that part of them to which the vendor is entitled.
As has been mentioned, each of Mr and Mrs Trajkovski was a joint tenant of Dural, together with Mr Trajkovski's parents, and upon completion of the sale each was prima facie entitled to one-fourth of the net proceeds. However, to identify Mrs Trajkovski's entitlement in respect of the proceeds, which a solicitor acting exclusively in her interests would not have permitted to be disbursed except in accordance with her instructions, it is necessary to give consideration to the effect of the Family Court orders, and the nature of Mrs Trajkovski's rights under them.
[11]
The effect of the Family Court orders
The Family Court orders were made under Family Law Act 1975 (Cth), s 79. Such orders work an alteration in the equitable interests in the property to which they apply, as the High Court said in Mullane v Mullane: [23]
… s 79 on its proper construction refers only to orders which work an alteration of the legal or equitable interests in the property of the parties or either of them. An interest in property is a right of a proprietary nature, not a mere personal right.
Where the order is one for transfer of property (or an interest in property), it creates an equitable interest analogous to that of a purchaser under contract of the property (or interest); such an order, as Needham AJ explained in Craven v Official Trustee in Bankruptcy, "creates an equitable interest in the land which could be enforced just as a contract of sale could be enforced". [24]
Needham AJ's conclusion was relied on in Official Trustee in Bankruptcy v Mateo, [25] in which the Full Federal Court held that a consent order of the Family Court, that the husband transfer to the wife within 28 days all his right, title and interest in their former home, vested a beneficial interest in the wife. Wilcox J said that the orders of the Family Court "transferred the value of Mr Mateo's interest in the home to his wife". [26] Branson J, observing that s 79 was concerned to empower the Family Court directly to alter the interests of the parties to a marriage in property, and not merely to make an order requiring the parties or one of them to take steps which will result in their property interests being altered said: [27]
102 … Turning to the actual order made by the Family Court in this case … it seems to me that it is probably implicit in the terms of the order that the interests of the parties to the marriage in their matrimonial home were altered by operation of the order. That is, that the order itself vested in the wife all of the husband's beneficial interest in the matrimonial home … On this view of the order, the transfer which par 1 of the order required the husband to effect was necessary only to perfect the wife's interest by the transfer to her of the husband's legal interest in the matrimonial home …
103 Even if the Family Court order is not so construed, in my view, the order necessarily destroyed the value of the husband's interest in the property. The order gave the wife an entitlement to have the whole of the husband's interest in the property transferred to her within 28 days and, if necessary, the right to call on the Registrar of the Family Court to execute all necessary documents. For this reason the husband's remaining interest in the property was merely formal.
Merkel J observed that a court order settling property between husband and wife, including a requirement that there be a transfer of one party's interest to the other, had generally been regarded as vesting in the transferee an equitable estate or interest in the property pending the transfer of the legal estate or interest, [28] and concluded: [29]
The consent orders made by the Family Court on 22 June 2000 altered the interests in the matrimonial home of the bankrupt and his wife by transferring the equitable estate and interest of the bankrupt in the matrimonial home to his wife …
In Jones v Daniel, [30] the Family Court had ordered the husband, who was the subject of a creditor's petition, to transfer to the wife his interest in their jointly held home by a nominated future date; a sequestration order was made the following day, before the transfer was effected. Moore J said: [31]
14 The members of the Full Court in Mateo did conclude that when an order (of the type presently under consideration) is made under s 79 ordering that a person presently holding a legal interest in the property transfer that interest to another person, a beneficial interest is thereby vested in the other person. Wilcox J described the order as vesting an equitable interest (at [62]) and Merkel J as transferring an equitable estate or interest (at [136]). Branson J expressed her conclusion in qualified terms (at [102]) when she spoke of it being "probably implicit in the terms of the order that the interest of the parties to the marriage in the [property] were altered by operation of the order" …vesting in the wife all the husband's beneficial interest in the property. It appears Branson J viewed that as the preferable construction of the order and its affect. In any event the views of a majority were clear and an equitable interest was, by the order, transferred. A trust was created for the benefit of the other person.
15 Moreover, the conclusions of Wilcox J and Merkel J were an essential step in the reasoning leading to the ultimate conclusion in that matter. Accordingly, the conclusion concerning the transfer of an equitable interest and the creation of a trust forms part of the ratio of the Full Court in Mateo.
Allsop J (as his Honour then was) agreed with Moore J, [32] and added: [33]
20 Section 79 of the Family Law Act 1975 (Cth) deals, as the High Court said in Mullane v Mullane (1983) 158 CLR 436 at 445, with orders which work an alteration of the legal or equitable interests in parties or either of them. Thus, an express and immediate vesting order could be made. There was nothing to suggest in the reasons for judgment of Coleman J in the Family Court (or of the Family Court in Mateo, as far as can be gleaned from the judgment of the Full Court in Mateo) that any suspension of effect of the orders made was intended. It would perhaps have been clearer if the immediately dispositive effect of the orders here had been identified expressly. Nevertheless, the orders here, though not expressly dispositive, made as they were against the background of s 79 and in light of the reasoning in Mateo, should be taken to have the effect found by the primary judge.
These principles, particularly in their application to real property, were not doubted in Ellison v Sandini Pty Ltd, [34] which concerned not real property but shares in a publicly listed company, which were held not in the name of either party to the marriage but in a family trust. Jagot J, to whose consideration of the issues [35] I am indebted, and with whom Siopis J agreed, said:
115 Mateo and Jones both concerned real property. In both cases, despite the terms of the order requiring transfers at later dates, the orders were held to have an immediate dispositive effect. In Mateo, it is apparent that both Wilcox and Merkel JJ reasoned that the orders vested in the wife full beneficial interest in the property, leaving the husband with a bare legal title. While the reasoning of Branson J may appear more circumspect about the effect of the orders, it is reasonably clear from her Honour's statement at [103] that the orders destroyed the value of the husband's interest in the property, leaving the husband with a remaining interest that was "merely formal", that her Honour's reasons should be understood in the same way. Jones, however, is more circumspect than Mateo about the effect of such orders given the repeated references by Moore J, with whom Hill and Allsop JJ agreed, to the orders vesting in the wife "a" beneficial or "an" equitable interest in the property sufficient to defeat the claims of a trustee in bankruptcy under s 121 of the Bankruptcy Act.
Logan J, who dissented in the result, said: [36]
18 At first blush, one might have thought that the answer as to when and by what the requisite change in beneficial ownership occurred was straightforward. It occurred by virtue of the court order when that order was made on 21 September 2010. After all, the order made under s 79 of the Family Law Act spoke from the date of its making: Kennon v Spry (2008) 238 CLR 366 at [129] per Gummow and Hayne JJ. Of this order, the primary judge observed (at [142]):
As noted in Lysaght v Edwards (1876) 2 Ch D 499, a right to specific performance to compel the transfer of an asset can be equated with beneficial ownership. In this instance, Ms Ellison had a more substantive right than a right to obtain an order for specific performance. She already had an order of the Family Court for the transfer of the shares within seven days.
19 I respectfully agree with this observation. The order made under s 79 of the Family Law Act in respect of the shares at least worked an alteration in the equitable ownership of those shares: Mullane v Mullane (1983) 158 CLR 436 at 445 (Mullane v Mullane). The order is not materially distinguishable from those which this Court in Official Trustee in Bankruptcy v Mateo (2003) 127 FCR 217 and in Jones v Daniel (2004) 141 FCR 148, in the application of Mullane v Mullane, regarded as effecting a change in beneficial ownership.
Upon the making of the Family Court orders, Mr Trajkovski was, in respect of Mrs Trajkovski's interest in Dural, in at least an equivalent position to a purchaser with a right to obtain an order for specific performance to compel a transfer, which has been said to correspond with beneficial ownership; [37] thus, the orders for the transfer of Mrs Trajkovski's one-fourth share in Dural to him upon payment of the $800,000 gave him an equitable interest, analogous to that of a purchaser, in her share.
However, it does not follow that Mrs Trajkovski had no remaining interest. She was not required to transfer the legal interest until she was paid in full the $800,000 - just as a vendor under contract is not required to transfer the legal interest until the purchase price is paid on completion. Pending payment, the vendor's interest is an unpaid vendor's lien, as Chitty J explained in Re Thackwray and Young's Contract: [38]
As is well known, where there is a contract for sale which is valid and can be specifically performed the equitable interest in the lands at once passes to the purchaser subject to his payment of the money, and, on the other hand, the vendor has a lien on the land for the unpaid purchase-money.
In Davies v Littlejohn, [39] Isaacs J said:
The doctrine of 'vendor's lien' is one created by equity as part of a scheme of equitable adjustment of mutual rights and obligations applying, unless negatived, to every ordinary contract of sale of land.
In Reliance Finance Corporation Pty Ltd v Heid, [40] Hope JA (with whom Glass and Mahoney JJA agreed) said that this had on many occasions been stated to be the correct principle, but noting that there were observations in some cases that suggested that the lien arose on completion, [41] stated: [42]
The correct view would seem to be that in theory the lien may arise when an enforceable contract is entered into, but that the nature of the remedies available to the vendor as a result of the lien varies depending upon the extent to which the contract has been performed. However, even though it may arise earlier, it certainly arises or exists when completion has taken place and part of the purchase price has not been paid, unless a contrary intention appears.
This is reflected in the more recent description of the position pending completion in Tanwar Enterprises Pty Ltd v Cauchi, [43] in which Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ said:
One commences by identifying the "interest" of a purchaser in the land the subject of an uncompleted contract. In Lysaght v Edwards [(1876) 2 Ch D 499 at 506], Sir George Jessel MR described the position of the vendor at the moment of entry into a contract of sale as "something between" a bare trustee for the purchaser and a mortgagee who in equity is entitled to possession of the land and a charge upon it for the purchase money; in particular, the vendor had the right in equity to say to the purchaser "[e]ither pay me the purchase-money, or lose the estate". This way of looking at the relationship in equity between vendor and purchaser before completion appeared also in the works of eminent writers of the period in which the Master of the Rolls spoke. Later, Kitto J [Haque v Haque [No 2] (1965) 114 CLR 98 at 124] and Brennan J [KLDE Pty Ltd v Commissioner of Stamp Duties (Q) (1984) 155 CLR 288 at 301] preferred to treat what was said in Lysaght as indicating that "to an extent" the purchaser acquired the beneficial ownership upon entry into the contract.
Accordingly, where there is a contract for sale of land which is valid and can be specifically performed, the equitable interest in the land at once passes to the purchaser subject to payment of the money and the vendor has a lien on the land for the unpaid purchase money.
The Family Court orders did not increase Mrs Trajkovski's interest in Dural beyond her 25% proprietorship. Nor did they give her any security in Mr Trajkovski's (or, for that matter, his parents') shares; save as described below, her right to be paid the $800,000 was personal and unsecured. However, Mrs Trajkovski was under no obligation to transfer her interest in Dural - and the other property referred to in order (3) - unless and until she was paid the $800,000. She was obliged to transfer her one-fourth interest in Dural (and in the other property referred to in order (3)), only "simultaneously with satisfactory compliance with order 2", which required Mr Trajkovski to pay her the $800,000.
Just as an unpaid vendor under a contract for sale of land has an equitable lien for the unpaid purchase price, so the effect of the Family Court orders was that Mrs Trajkovski's one-fourth interest in Dural (and in the other property referred to in order (3)) became analogous to that of an unpaid vendor. She was entitled to retain her one-fourth interest (and her interests in the other property referred to in order (3)) - or its proceeds - unless and until she was paid the $800,000 in full. After the Family Court orders, her interest in the property - and any proceeds of it sale - was in the nature of an unpaid vendor's lien.
Absent payment in full of the $800,000 by Mr Trajkovski, Mrs Trajkovski was entitled to retain her interest in Dural, or its proceeds. It follows that, upon completion of the sale, and in the absence of payment by Mr Trajkovski of the $800,000 in full, Mrs Trajkovski was entitled to the proceeds of her interest - for which she would have to give credit against the $800,000.
[12]
Conclusion
Accordingly, in the events which transpired (including relevantly that Mr Trajkovski had not paid the $800,000), the net proceeds of Dural were divisible between the four vendors, as to one-fourth each. In the absence of agreement between the vendors as to the disbursement of the proceeds, the only course open to the solicitors would have been to have the net proceeds paid into their trust account, or to (or as directed by) the respective vendors according to their respective entitlements.
There could be no clearer breach of duty than enabling proceeds of a sale to which a client is entitled to be disbursed without that client's authority. Without instructions to the contrary, Simpsons, were they acting exclusively in her interests, and unconstrained by any conflicting duty to Mr Trajkovski, ought to have caused at least Mrs Trajkovski's one-fourth share of the net proceeds to be paid to her, or into their trust account for her benefit. Solicitors in their position would not have facilitated the dissipation of Mrs Trajkovski's interest by giving directions for payment that would have the effect of placing the funds which she was entitled to retain beyond her control.
Breach of duty is therefore established, by enabling that part of the proceeds of sale to which Mrs Trajkovski was entitled, being one-fourth, to be disbursed.
In addition to her claim in negligence, Mrs Trajkovski relied also on causes of action founded on unconscionability, at general law and under s 51AB of the Trade Practices Act 1974 (Cth) (now s 21 of Schedule 2 to the Competition and Consumer Act 2010 (Cth)). The conclusion I have reached on what was her primary cause of action, namely negligence, renders it unnecessary to consider these alternatives, save to note that, as His Honour rightly observed, the pleadings failed to address the concept of special disability which is fundamental to application of the equitable doctrine of unconscionability, and that in circumstances where there was no relevant transaction between Mrs Trajkovski and Simpsons, it is not apparent how it could be said that Simpsons acted unconscientiously to take advantage of any "special disability" of which they knew; and that as to statutory unconscionability, it is difficult to see in Simpsons' conduct behaviour that is exploitative, and their conduct is more appropriately characterised as careless than as unconscionable.
[13]
Causation of harm
Because his Honour found no duty or breach, he did not resolve the question of causation, which falls to be determined according to s 5D of the Civil Liability Act 2002 (NSW):
5D General principles
(1) A determination that negligence caused particular harm comprises the following elements:
(a) that the negligence was a necessary condition of the occurrence of the harm (factual causation), and
(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability).
(2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent:
(a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and
(b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest.
(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
At trial, and before this Court, Simpsons contended that any breach of duty on their part, if established, was not causative of Mrs Trajkovski's loss, which her pleadings particularised as the loss of moneys due and payable to her pursuant to the Family Court orders, or the loss of an opportunity to obtain moneys pursuant to the Family Court orders. The respondents submitted that even if their conduct fell short of the standard of care required of a solicitor in the circumstances, Mrs Trajkovski, out of fear of the repercussions of defying Mr Trajkovski, would not have done anything to interfere with or affect the distribution of the proceeds of Dural in accordance with his wishes; that there was no evidence of what she would have done differently, or how her financial fortunes would have changed, but for their alleged negligence; and that regardless of what they did, Mrs Trajkovski would have conducted herself no differently: she would have acted as she did, contrary to her own interests and the advice of her own legal representatives, out of fear of Mr Trajkovski. Thus, it was submitted, any negligence on the part Simpsons was not a necessary condition of Mrs Trajkovski's alleged loss.
Simpsons relied on a number of findings of the trial judge as supporting a conclusion that any loss suffered by Mrs Trajkovski was not referable to Simpsons' conduct, including that "on [Mrs Trajkovski's own] evidence she was intimidated by her husband, who was forceful and insistent about her signing documents as and when he required her to"; that she would sign documents at the insistence of her husband out of fear of the repercussions of defying him; and that she was so intimidated by her husband's conduct on the night of 7 August 2008 that she "felt the need to appease and reassure him by terminating the instructions of her solicitor", "decided not to insist upon payment from the proceeds"; and "resolved not to place any obstacle in the way of disbursement of the proceeds in whatever way her husband saw fit" in order to "calm her husband and dissuade him from the violence he threatened". Reliance was also placed on her evidence that she had left school at 15, was married underage at 17, was powerless in her relationship and would sign "what was put in front of [her]"; that she believed that she would get paid her entitlement under the Family Court orders if she did and signed what her husband told her to do and sign; that her decisions at this time "were based on avoiding making [her] ex-husband reactive or angry or upsetting him … based on fear"; that she did not feel that she could raise things with her lawyer, Chesters, without fear that they may get back to her ex-husband; that she was concerned that her ex-husband would be "furious" if she placed a caveat on Dural to protect her interest in the sale - which fears were confirmed when he learned of her intention to file a caveat; and that she was generally reluctant to insist upon her rights under the Family Court orders, because she was afraid of her ex-husband's intimidatory manner. Her submissive attitude in respect of Mr Trajkovski was confirmed by Chesters' evidence, including that Mrs Trajkovski "was always scared of doing anything or allowing me to do anything that would impact her husband's control of his property dealings". And even subsequently, when she had instructed Cornocks, from late 2008 and into 2009, she remained reticent and reluctant to take any steps to protect her interests out of concern that any enforcement action or caveat would imperil her ex-husband's business ventures and result in her getting nothing; she was prepared to wait in the hope that her ex-husband would comply with the orders if given enough time to arrange his financial affairs.
It must be accepted that, even with the benefit of proper and strong independent advice, Mrs Trajkovksi may well, had her instructions been sought, have agreed to the disbursement as requested by Mr Trajkovski of that part of the proceeds which she was entitled to retain. However, whether a solicitor acting exclusively for her, and aware of the pressures to which she was being subjected, would have been entitled to act on such instructions - or rather ought to have taken some measure for the protection of her interests, such as seeking the appointment of a guardian - need not be determined, because the respondents' arguments about causation - which are to the effect that, properly advised by solicitors acting exclusively in her interests and unconstrained by any conflicting duty to Mr Trajkovski (as she had been by Mr Chesters), she would nonetheless have authorised payment of the proceeds as demanded by Mr Trajkovski - misconceive the relevant chain of causation in this case. Here, the relevant duty was to use reasonable care not to impair Mrs Trajkovski's interest in Dural and its proceeds (being her vendor's lien in respect of her one-fourth interest in Dural). As against the purchaser, all the vendors were bound to complete and a notice to complete had issued, so failing to complete was not an option; in any event, both Mr and Mrs Trajkovski wanted the sale to proceed. The breach was in allowing her security to be released without preserving the proceeds for her benefit. Had the duty been performed, one-fourth of the net proceeds would have been preserved for Mrs Trajkovski. The relevant harm was that her security was sacrificed. Thus, properly understood, this is not a "reliance" case; the breach was not in connection with advice given, and the question of what Mrs Trajkovski, properly advised, would have done, does not arise. The breach involved the negligent sacrifice of her security. The relevant "counter-factual", to use terminology that appears to be in vogue, is not that Mrs Trajkovski's instructions were sought, but that in connection with the settlement Simpsons did not give directions to the purchaser for payment that enabled her interest to be disbursed beyond her control.
What Mrs Trajkovski lost was not a mere opportunity, but the right to retain the proceeds of her share, as security for performance of Mr Trajkovski's obligation under the Family Court orders. It is true that she retained other security, and that she has been able to obtain payment of some of the outstanding amount. But her right to retain the proceeds of her share of Dural was lost. It is beside the point that, had she been asked, she might have agreed to all or part of those proceeds being paid to or at the direction of Mr Trajkovski; she was deprived of a proprietary right, and the value of that right does not depend on whether or not, or how, she would have chosen to exercise it. This was no mere opportunity (such as to bring proceedings which might or might not result in a favourable judgment), but an accrued right. The harm was the loss of that right, and it does not matter whether it would or would not have been exercised. In those circumstances, the law merely values the right, and does not speculate as to whether she would - if asked - have enforced it, and if so to what extent. Rights, as distinct from opportunities, are not valued according to whether or not they would have been exercised. Thus it is irrelevant that Mrs Trajkovski might, voluntarily or involuntarily, have chosen or been pressured not to exercise her lien. The loss of a proprietary right is no less because the owner might not have chosen to enforce it, or might have intended to give it away. The loss is none the less, even if, had her instructions been sought, she might have, for whatever reason, consented to Mr Trajkovski's demands; the respondents cannot avail themselves of speculation as to what might have happened had they sought her instructions, when they did not do so and when, in the absence of instructions, their duty was clear.
Causation is therefore established: by settling the sale upon directions, conveyed by them to the purchaser, for payment of the purchase price in a manner which would not preserve Mrs Trajkovski's security interest in Dural and its proceeds, and instead allowing the disbursement of the proceeds of her share other than to her or for her benefit, Simpsons impaired, to the extent of her interest in the proceeds, the security she had for Mr Trajkovski's obligation to pay her $800,000.
[14]
Quantification of Loss
In quantifying Mrs Trajkovski's loss, it is necessary to consider:
1. the value of the security interest lost;
2. the fact that she still has a personal right to be paid the outstanding balance of the $800,000 by Mr Trajkovski; and
3. Mrs Trajkovski's claim for consequential loss, in particular the cost of enforcement proceedings against Mr Trajkovski.
[15]
The value of the security interest lost
Had Simpsons performed their duty, then upon completion of the sale one-fourth of the net proceeds - that is $436,124 - would have been preserved, which Mrs Trajkovski would have been entitled to retain against the $800,000 due to her. While she retained other security, none was as valuable or as readily realisable as this, and there is no suggestion that it has been or would be possible to realise from the other security the difference between the $436,124 and the unpaid balance of the $800,000. The right of which she was deprived was worth $436,124.
As has been pointed out, this was not a mere opportunity, and the value of the right which Mrs Trajkovski lost is not to be discounted on account of the possibility that, voluntarily or involuntarily, she may have chosen not to exercise it, in full or in part. Her loss was the loss of a right which was worth $436,124, whether or not she chose to exercise it.
I do not think it can be said that she lost the full $800,000 due from Mr Trajkovski. Save to the extent of the unpaid vendor's lien, her right to that sum was unsecured, and she still has that right - the order is still enforceable. She retained the lien in respect of the other property, and has been able to use it to obtain partial payment; to the extent there is an outstanding balance, it is not attributable to Simpsons' enabling her lien to be released. Although payment of the $800,000 was long overdue, and Mr Trajkovski was in default, it was not charged on Mr Trajkovski's interest in the property. Mr Trajkovski was entitled to give directions in respect of his interest in the proceeds, and Mrs Trajkovski had no interest in or charge over it.
[16]
The right to recover the outstanding balance
The trial judge found that Mrs Trajkovski had "not proved on the balance of probabilities that all reasonable prospects of recovery against [Mr Trajkovski] have been exhausted. She has therefore not proved her alleged loss". The respondents submitted that this Court too would conclude that Mrs Trajkovski had failed to prove her loss, as she still had the right to be paid so much of the $800,000 as remains unpaid by Mr Trajkovski, and had not shown that there were no prospects of recovering the outstanding moneys owed to her by Mr Trajkovski. It was submitted that before any alleged negligence on the part of Simpsons, Mrs Trajkovski had a legal right to be paid certain moneys by Mr Trajkovski pursuant to the Family Court orders, and that she still has that right. [44]
That analysis suffers from several defects.
First, it misconceives the true nature of Mrs Trajkovski's loss, which was not of the right to recover $800,000 from Mr Trajkovski personally, but of the security she held for it to the extent of $436,124, in circumstances where attempts to recover from him personally have been largely unsuccessful. It is beside the point that she retains a personal right against Mr Trajkovski, when her security for it, which would have been her first recourse, has been lost. But for the negligence of Simpsons, Mrs Trajkovski would have had the benefit of (1) Mr Trajkovski's (personal) liability to pay $800,000; (2) her security as unpaid vendor of her quarter interest in Dural; and (3) her security as unpaid vendor of the other property referred to in order (3). She retained (1) and (3), but lost (2). That loss was not immaterial, because despite retaining (1) and (3) there remains a shortfall.
His Honour found that "The plaintiff has received, from other sources and on other occasions, part of the $800,000. There is a shortfall which she has never recovered, and which has not been satisfactorily quantified in the evidence". However, there is nothing to suggest that she had received anything approaching the difference between the $800,000 and the amount she should have received from the proceeds of Dural. While there was a dispute as to how much she had been paid pursuant to the Family Court orders, this was apparently resolved by the orders of 24 May 2010, which fixed the outstanding sum at $750,000 plus interest. Since then, Mrs Trajkovski has admittedly received a further $188,773.66 from the proceeds of Revesby, less $24,249.99 which had to be reimbursed; this leaves outstanding principal of $585,476.33, plus interest. For present purposes, what matters is that such amounts as she has received were not referable to her vendor's lien in respect of Dural, but to her other rights against Mr Trajkovski, and that on any view the amount outstanding well exceeds the proceeds of her interest in Dural. Had her share of the proceeds been preserved, as they ought to have been, she would have been better off to the full extent of its value - that is, by $436,124. What she has managed to recover from other sources and by other methods is referable to her other rights against him, and on any view when subtracted from her total entitlement against Mr Trajkovski leaves a balance well in excess of the lost value of her vendor's lien.
Secondly, it assumes that Mrs Trajkovski must first exhaust all reasonable measures to enforce her other rights against Mr Trajkovski, before she can be said to have suffered loss. Although the duty to mitigate damages may sometimes require a plaintiff to bring fresh proceedings, it does not ordinarily require a plaintiff to undertake complicated and difficult litigation against a third party; the question is whether the plaintiff ought reasonably embark on such proceedings. [45] Once it is appreciated that what Mrs Trajkovski has lost is her security for the performance of Mr Trajkovski's obligations, the fallacy is exposed: the purpose of security is to avoid the need for cumbersome and potentially unproductive enforcement proceedings against the debtor personally. The considerable steps already taken to recover from Mr Trajkovski, with minimal success, serve to illustrate why loss of the security is so significant. Mrs Trajkovski has applied to the Family Court to enforce the Family Court orders against Mr Trajkovski, resulting in the 24 May 2010 orders, and then the 16 August 2010 orders appointing trustees for sale, which was ultimately frustrated by the intervention of Bardom. In my judgment it is not at all reasonable that she should be expected - as the respondents suggest - to make enquiries into the assets of the companies of which Mr Trajkovski has been or is a director or shareholder, or take steps to bankrupt him, or to ascertain his current financial position, let alone to make inquiries of accountant for documents relating to the companies in which she had been involved, before recovering compensation for the loss of a security which, had it been preserved, would not have required her to take any of those steps before enforcing it.
[17]
Consequential loss
Mrs Trajkovski also claimed the costs of the subsequent enforcement proceedings against Mr Trajkovski. However, those costs are referable to the enforcement of rights other than her vendor's lien, and would have been incurred in any event in enforcing those rights, in endeavouring to recover the balance of her entitlement beyond the $436,124 which ought to have been recovered from Dural. Preservation of her share of the proceeds of Dural would have satisfied her judgment only to their extent, and enforcement proceedings in respect of the balance of her judgment would still have been necessary.
Accordingly, I do not accept that the costs of enforcement proceedings against Mr Trajkovski form part of her damages. Mrs Trajkovski's loss was $436,124.
[18]
Defences
At trial, Simpsons argued that any damages recoverable by Mrs Trajkovski should be reduced on account of her alleged contributory negligence (which was submitted to be predominant), and that their liability should be reduced by reason of Mr Trajkovski being a concurrent wrongdoer, whose responsibility for any damage or loss was said to exceed their own. Because of the conclusions which the trial Judge reached on the questions of duty and breach, his Honour did not address these issues. They are now raised by the respondents' notice of contention.
[19]
Contributory negligence
The respondents submitted that Mrs Trajkovski failed to take reasonable steps to protect her own interests, and that her own acts and omissions were the predominant causes of her loss, so that as between them and her, she should bear the greater share of responsibility for any loss.
The acts and omissions attributed to Mrs Trajkovski on which the respondents relied - while eschewing any suggestion that Mrs Trajkovski was personally to blame for them - were (I have re-arranged them somewhat):
1. That understanding the effect of the Family Court orders, and in particular that she did not have to transfer any of her interests in the properties or the companies until she was paid the $850,000 owing to her, she agreed to or acquiesced in the transfer of Dural. However, while Mrs Trajkovski did not have to transfer her interest to Mr Trajkovski until paid in full, there was no want of reasonable care for her own interests in agreeing to the sale of the property to a third party, which would ostensibly facilitate payment. Once contracts were exchanged, she was bound (to the purchasers) to complete. Nor would allowing settlement of such a sale to proceed involve any failure to take reasonable care for her own interests, as solicitors acting in her interests could reasonably be expected not to allow her interest in the proceeds to be jeopardised. The only relevant risk she assumed by agreeing to or acquiescing in sale and settlement was that the solicitors might dissipate the proceeds of her share without her consent - a risk which a person in her position would rightly consider inconceivable. Thus, agreeing to the sale and transfer of the property in itself involved no failure to take reasonable care for her own interests, which would not have been jeopardised had Simpsons not allowed her interest in the proceeds to be sacrificed.
2. That she never requested copies of the documents she signed at the respondents' office, and failed to seek Chesters' advice with respect to the documents that she had signed or to raise matters with Chesters out of fear that it would get back to her ex-husband. However, she did not sign the Dural contract or transfer at Simpsons' office, and such documents as she may have signed there are irrelevant to the Dural sale. In circumstances where nothing turns on her understanding of the Dural contract and transfer, it is not apparent how consultation with Chesters would have made the slightest difference. In any event, Chesters' retainer was terminated a month before the relevant negligent act. There is no causal relationship between these matters and Mrs Trajkovski's relevant loss.
3. That she failed to instruct her solicitors to commence enforcement proceedings against her ex-husband, despite being repeatedly advised to do so, and understood that waiting to enforce her rights would involve the risk that she may end up with nothing. However, all the "repeated advice" to which reference was made occurred after completion of the sale of Dural, by which time her loss had already been incurred. In any event, her hesitancy to commence enforcement proceedings had no causal connection with the sacrifice of her interest in the proceeds of sale of Dural.
4. That she failed to lodge caveats over the properties in which her husband had an interest, despite being repeatedly advised to do so. This did not refer to Dural, but to other properties in which Mr Trajkovski or entities controlled by him had an interest. It is far from clear that Mrs Trajkovski had any caveatable interest in those properties; the Family Court orders gave her none, and any argument that she had such an interest would have depended on tracing her share of the proceeds of Dural into them. In any event, this was advice given to her after completion of the sale Dural, and any such omission could not have contributed to her relevant loss.
At first sight, there is more substance to an argument that Mrs Trajkovski did not - despite advice from Chesters to do so - lodge a caveat in respect of Dural before completion. As Mr Chesters told her, by lodging a caveat she could have ensured that she was represented at completion. However, Mrs Trajkovski did not wish to obstruct the sale; to the contrary, she wanted it to proceed. She was in any event going to be represented at completion by the solicitors acting for all the vendors, Simpsons. A vendor in her position who wanted the sale to proceed would reasonably expect that lawyers acting for her would ensure that her interest in the proceeds was preserved. A client does not fail to take reasonable care for his or her own interests by failing to anticipate and guard by caveat against the prospect that her or his own lawyer might allow the client's share of the proceeds to be dissipated.
For those reasons, Mrs Trajkovski should not be regarded as bearing any share of the responsibility for the loss of the proceeds of her interest, and there is no warrant under Law Reform (Miscellaneous Provisions) Act 1965 (NSW) s 9, for reducing the damages recoverable on account of contributory negligence.
[20]
Concurrent wrongdoer
The respondents submitted that Mr Trajkovski was a concurrent wrongdoer for the purposes of Civil Liability Act 2002 (NSW), Part 4, and that he was primarily responsible for any loss suffered by Mrs Trajkovski.
Mrs Trajkovski's cause of action is, relevantly, "a claim for economic loss … in an action for damages … arising from a failure to take reasonable care" which does not include "any claim arising out of personal injury", and so Part 4 of the Civil Liability Act applies, and her claim against Simpsons is, therefore, "an apportionable claim". [46] If Simpsons are "concurrent wrongdoers" in relation to that claim, their liability is limited to that amount that reflects the portion of Mrs Trajkovski's loss that the court considers just having regard to the extent of their responsibility for the loss. [47]
A "concurrent wrongdoer", in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. [48] As observed by the majority in the High Court in Hunt & Hunt Lawyers v Mitchell Morgan Nominees, [49] this involves two questions:
… what is the damage or loss that is the subject of the claim? Is there a person, other than the defendant, whose acts or omissions also caused that damage or loss?
This directs attention, first, to "the damage or loss that is the subject of the claim". Here, that is the loss or damage identified above - the loss of Mrs Trajkovski's vendor's lien in respect of the proceeds of her one-fourth share in Dural.
The second question, then, is whether acts or omissions of Mr Trajkovski also caused that damage or loss. The respondents contend that the simple fact is that Mrs Trajkovski has not received the moneys owing to her under the Family Court orders because he has not paid her the money he owes her, that the primary reason why Mrs Trajkovski did not receive the proceeds of sale from Dural is because he exerted duress or undue influence on her, which would suffice to make him chiefly responsible for Mrs Trajkovski's loss.
However, as will now be apparent, non-payment of the moneys owing under the Family Court orders is not the same loss and damage as that which is the subject of Mrs Trajkovski's claim: the loss and damage in issue here is the security she held for payment of those moneys, as distinct from the payment itself. It was precisely to reduce the risk of payment not being enforceable personally that the law, and the Family Court orders, gave her that security. Mr Trajkovski's recalcitrance in payment of the debt is not a destruction of the security held for it.
Further, Mr Trajkovski's undue influence did not cause the relevant loss. While it may well have caused Mrs Trajkovski to terminate Chesters' retainer and not to lodge a caveat, it was not a cause of the release of her interest in the proceeds of sale, which was solely attributable to Simpsons' acts and omissions in connection with settlement instructions. That they acted on Mr Trajkovski's instructions in giving those instructions does not make his undue influence on Mrs Trajkovski a contributing cause.
Moreover, that Mr Trajkovski is not a concurrent wrongdoer is confirmed by the failure of the respondents to identify any cause of action sounding in damages which Mrs Trajkovski would have against Mr Trajkovski in respect of acts or omissions on his part which caused that loss of the security. It is inherent in the notion of "concurrent wrongdoer" that the plaintiff has, or had, a good - albeit not necessarily recoverable - cause of action sounding in damages against the alleged concurrent wrongdoer. [50] Mr Trajkovski owed no duty of care to Mrs Trajkovski, and if his conduct towards her amounted to undue influence, while it might vitiate a transaction under which he took a benefit, it would not sound in damages.
Accordingly, Mr Trajkovski was not a concurrent wrongdoer in respect of the destruction of Mrs Trajkovski's security constituted by her unpaid vendor's lien in respect of Dural and its proceeds, and Civil Liability Act, s 35(1), which provides that any damages recoverable from Simpsons should be limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the relative extent of their responsibility and that of any concurrent wrongdoer, is not engaged.
[21]
Conclusion
My conclusions may be summarised as follows:
1. There was a solicitor-client relationship between Simpsons and Mrs Trajkovski, and they owed her a duty of care, in relation to their acting on the sale of Dural.
2. The evidence did not establish any representation by Mrs Trajkovski, on which Simpsons were entitled to rely, that Mr Trajkovski had her authority to give directions as to the disbursement of the proceeds of sale. In particular, any representation in the 8 August conversation was insufficient to convey such authority was conditional, and in any event could not be relied upon because Simpsons were on notice that Mrs Trajkovski was acting under duress or undue influence. Moreover, there was no evidence of reliance on any such representation, and there was evidence inconsistent with reliance.
3. The effect of the Family Court orders was that the equitable interest in Mrs Trajkovski's interest in Dural at once passed to Mr Trajkovski, and Mrs Trajkovski had an unpaid vendor's lien in respect of her interest and its proceeds, securing payment of the $800,000 to which she was entitled under the orders.
4. Without instructions to the contrary, Simpsons, were they acting exclusively in her interests, and unconstrained by any conflicting duty to Mr Trajkovski, ought to have caused Mrs Trajkovski's one-fourth share of the net proceeds to be paid to her, or into their trust account for her benefit. Breach of duty is therefore established, by enabling that part of the proceeds of sale to which Mrs Trajkovski was entitled, being one-fourth, to be disbursed.
5. Causation is established: by settling the sale upon directions, conveyed by them to the purchaser, for payment of the purchase price in a manner which would not preserve Mrs Trajkovski's security interest in Dural and its proceeds, and instead allowing the disbursement of the proceeds of her share other than to her or for her benefit, Simpsons sacrificed, to the extent of her interest in the proceeds, the security she had for Mr Trajkovski's obligation to pay her $800,000.
6. The right of which she was deprived was worth $436,124. This was a proprietary right, not a mere opportunity, and the value of the right lost is not to be discounted on account of the possibility that, voluntarily or involuntarily, Mrs Trajkovski may have chosen not to exercise it, in full or in part.
7. Given that what she has lost is her security for the performance of Mr Trajkovski's obligations, and that the purpose of security is to avoid the need for cumbersome and potentially unsuccessful enforcement proceedings against Mr Trajkovski personally, and the considerable steps already taken to recover from Mr Trajkovski with minimal success, Mrs Trajkovski is not required to prove that all reasonable prospects of recovery against Mr Trajkovski have been exhausted.
8. Mrs Trajkovski should not be regarded as bearing any share of the responsibility for the loss of the proceeds of her interest, and there is no warrant for reducing the damages recoverable on account of contributory negligence.
9. Mr Trajkovski was not a concurrent wrongdoer in respect of the destruction of Mrs Trajkovski's security constituted by her unpaid vendor's lien in respect of Dural, and Civil Liability Act, s 35(1), is not engaged.
The appeal should be allowed, and judgment for the plaintiff for $436,124 and interest substituted for the judgment in the Common Law Division. Interest on $436,124 from the date of the settlement (being 3 September 2008) to the date of the judgment below (being 21 May 2018) is $378,321.28, and the total substituted judgment should therefore be for $814,445.25.
[22]
Orders
I propose the following orders:
1. That the appeal be allowed.
2. That the judgment of the trial judge be set aside.
3. That in lieu thereof, there be substituted (with effect from the date of the trial judge's judgment), judgment that the defendants pay the plaintiff $814,445.25 (being $436,124 plus interest from 3 September 2008 to the date of the trial judge's judgment).
4. That the respondents pay the appellant's costs of the proceedings at first instance and of the appeal.
[23]
Endnotes
Rule 45 specified the approved practice to be followed by a solicitor when engaged to advise a proposed signatory to loan or security documents. The relevance of rule 45 to the respondents' role on the sale of the Dural property is not obvious. See generally Kowalczuk v Accom Finance (2008) 77 NSWLR 205; [2008] NSWCA 343 at [237] (Campbell JA, Hodgson and McColl JJA agreeing).
The calculations assumed interest rates varying over time from 10.25 to 8 per cent per annum.
Legal Profession Act 2004 (NSW) s 309(1) (now repealed and replaced by s 174 of the Legal Profession Uniform Law (NSW)).
As the primary Judge seems to suggest in the Primary Judgment at [19].
Voli v Inglewood Shire Council (1963) 110 CLR 74 at 84 (Windeyer J); [1963] HCA 15.
Heydon v NRMA Ltd (2000) 51 NSWLR 1; [2000] NSWCA 374 at [146] (Malcolm AJA), [362] (McPherson AJA). In New South Wales s 5O(1) of the Civil Liability Act 2002 (NSW) provides that a professional person does not incur a liability in negligence if he or she has acted in a manner that was widely accepted in Australia by peer professional opinion as competent professional practice.
Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15 at 544 (Mason CJ and Wilson J) citing Midland Bank v Hett, Stubbs and Kemp [1979] Ch 384 at 402-403 (Oliver J).
Vukmirica v Betyounan [2008] NSWCA 16 at [48] (Giles JA, McColl and Bell JJA agreeing), citing Farrer v Messrs Copley Singletons [1997] EWCA Civ 2127.
The 1995 Rules were made by the Council of the Law Society pursuant to s 57B of the Legal Profession Act 1987 (NSW). The Legal Profession Act 2004 (NSW) Sch 9, cl 24 provided that any rules made by the Law Society which were in force before the commencement day were taken to have been made pursuant to Part 7.5 of the 2004 Act: see Kowalczuk v Accom Finance at [237].
1995 Rules r 9.3. The Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 r 11 now governs "Conflict of duties concerning current clients". Rule 11 provides, among other things, that a solicitor must avoid conflicts between the duties owed to two or more current clients. Where there is a potential conflict the solicitor must not act except where permitted by r 11.3. The exception applies only if the client gives informed consent to the solicitor acting.
Primary Judgment at [48].
Primary Judgment at [32].
See at [168] below.
See at [21] above.
Primary Judgment at [48].
Trajkovski v Simpson [2018] NSWSC 720.
Under the Legal Profession Uniform Law (NSW) s 174.
[1988] QB 665 (CA).
[2017] NSWCA 107 at [99]-[100].
Trajkovski v Simpson [2018] NSWSC 720.
Farrer v Copley Singletons [1997] EWCA Civ 2127 (Leggatt, Morritt and Brooke LLJ).
[2008] NSWCA 16.
Mullane v Mullane (1983) 158 CLR 436 at 445; [1983] HCA 4.
Craven v Official Trustee in Bankruptcy (Supreme Court (NSW), Needham AJ, 26 July 1991, unreported); see also Harris v Walker (1969) 14 FLR 167 at 176.
Referring to Davies v Littlejohn (1923) 34 CLR 174 at 181 (Knox CJ, citing Dixon v Gayfere (1857) 1 De G & J 655; 44 ER 878; Winter v Lord Anson (1827-28) 3 Russ 488; 38 ER 658); [1923] HCA 64; Wossidlo v Catt (1934) 52 CLR 301 at 307, 308 (Rich J); [1934] HCA 52.
[1982] 1 NSWLR 466 at 478.
(2003) 217 CLR 315; [2003] HCA 57 at [47].
In closing submissions at trial, Mrs Trajkovski's counsel conceded that the Family Court orders of 24 May 2010, that Mr Trajkovski pay Mrs Trajkovski the sum of $750,000 plus interest, being the balance owing pursuant to the Family Court Orders made in May 2007, were still enforceable.
Pilkington v Wood [1953] Ch 770 at 777 (Harman J), cited in Bebonis v Angelos (2003) 56 NSWLR 127; [2003] NSWCA 13 at [99] (Handley JA, with whom Beazley JA and Heydon JA agreed); see also Treloar v Henderson [1968] NZLR 1085; Horsfall v Haywards [1999] PNLR 583; Walker v Geo H Medlicott & Son [1999] 1 WLR 727 at 743; [1999] 1 All ER 685 at 697.
Civil Liability Act, s 34(1)(a).
Civil Liability Act, s 35(1).
Civil Liability Act, s 34(2).
(2013) 247 CLR 613; [2013] HCA 10 at [19].
Shrimp v Landmark Operations Ltd (2007) 163 FCR 510; [2007] FCA 1468 at [58]-[59], [62]-[67] (Besanko J); Meandarra Aerial Spraying Pty Ltd v GEJ & MA Geldard Pty Ltd as Trustee for the G & M Geldard Family Trust [2013] 1 Qd R 319; [2012] QCA 315 at [60]-[62].
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: 26 March 2019
Parties
Applicant/Plaintiff:
Trajkovski
Respondent/Defendant:
Simpson
Legislation Cited (8)
Legal Profession Act 1987(NSW)s 57B
Legal Profession Act 2004(NSW)s 309(1)
Revised Professional Conduct and Practice Rules 1995(NSW)
Operations Ltd (2007) 163 FCR 510; [2007] FCA 1468
Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57
Trajkovski v Simpson [2018] NSWSC 720
Treloar v Henderson [1968] NZLR 1085
Voli v Inglewood Shire Council (1963) 110 CLR 74; [1963] HCA 15
Vukmirica v Betyounan [2008] NSWCA 16
Walker v Geo H Medlicott & Son [1999] 1 WLR 727; [1999] 1 All ER 685
Winter v Lord Anson (1827-28) 3 Russ 488; 38 ER 658)
Wossidlo v Catt (1934) 52 CLR 301; [1934] HCA 52
Category: Principal judgment
Parties: Suzana Trajkovski (Appellant)
Ian Garnet Simpson (First Respondent)
Simpson & Partners Solicitors Pty Ltd (Second Respondent)
Representation: Counsel:
Ms J McIntosh (Appellant)
Mr J S Emmett / Mr H Grace (Respondents)
Solicitors:
Peter Cornock & Associates (Appellant)
Yeldham Price O'Brien Lusk (Respondents)
File Number(s): 2018/184604
Decision under appeal Court or tribunal: Supreme Court of New South Wales
Jurisdiction: Common Law
Citation: [2018] NSWSC 720
Date of Decision: 21 May 2018
Before: Fagan J
File Number(s): 2014/203803