Christodoulou v Christodoulou - [2009] VSC 583

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 10565 of 2008

BETWEEN

PARASKEVI CHRISTODOULOU (BY HER ADMINISTRATOR, STATE TRUSTEES LIMITED)	Plaintiff
and
ANDREW CHRISTODOULOU	First Defendant
and
KPA LAWYERS (A FIRM)	Second Defendant

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JUDGE:	KAYE J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 November – 4 December 2009
DATE OF JUDGMENT:	14 December 2009
CASE MAY BE CITED AS:	Christodoulou v Christodoulou & Anor
MEDIUM NEUTRAL CITATION:	[2009] VSC 583

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EQUITY – Undue influence – Unconscionable conduct – Transfer by gift of plaintiff’s half-interest in home to adult son – Plaintiff elderly and illiterate.

LEGAL PRACTITIONER – Second defendant acting as solicitor for plaintiff – Whether duty to advise of alternative transactions available – Whether breach of implied duty of care – Nature of damages if breach of duty.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P L Ehrlich	S Kourkoulis & Associates
For the First Defendant	Mr T P Mitchell	GPZ Legal
For the Second Defendant	Ms A M Ryan	Lander & Rogers

HIS HONOUR:

The dispute in this case arises from the transfer by the plaintiff to her son, the first defendant, of her interest in her former matrimonial home in July 2006. The proceeding is brought on behalf of the plaintiff by State Trustees Limited, which was appointed guardian of the plaintiff by order of the Victorian Civil and Administrative Tribunal on 7 July 2008. The plaintiff claims that the transfer should be set aside on two grounds, namely, that it was procured by undue influence, and, alternatively, that there was unconscionable conduct, by the first defendant. The plaintiff also claims damages against the second defendant, who acted as her solicitors in the transaction. In addition, the first defendant, by a third party notice, makes a claim for damages in negligence against the second defendant, in the event that I uphold the plaintiff’s claim against the first defendant.

The background facts are not in dispute and can be shortly stated. The plaintiff, who was born in 1923, was 83 years of age at the time of the transaction in question. She and her former husband had five children, namely, the first defendant, another son (Peter), and three daughters, Mrs Kim Fricot, Mrs Mary Kydas, and Mrs Sue Bedford. The family migrated to Australia from Greece in about 1974. For 30 years, until the breakdown of her marriage, the plaintiff and her husband had lived at their home at 20 Camden Road, Hughesdale (“the property”), of which they were the joint registered proprietors. In late 2005, the plaintiff obtained an intervention order against her husband, and he obtained a similar order against her. At the same time, her husband physically partitioned the house, forcing the plaintiff to live in the front section of the house, in difficult conditions which I shall later describe.

In September 2005, the plaintiff executed an enduring power of attorney, by which she appointed the first defendant and Kim Fricot to be her attorneys…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] VSC 583
Decision Date: 14 December 2009

CaseChat Overview and Summary

In the Family Court of Australia, the case of Christodoulou v Christodoulou involved the plaintiff, an elderly and illiterate woman, contesting the transfer of her half-interest in a family home to her adult son. The plaintiff sought to challenge the transfer, alleging undue influence and unconscionable conduct on the part of her son, the first defendant. The second defendant, a legal practitioner who acted as solicitor for the plaintiff, was also a party to the proceedings, with the plaintiff asserting that the solicitor failed to advise her of alternative transactions and breached an implied duty of care. The court was required to determine whether the solicitor owed a duty of care to the plaintiff, whether this duty was breached, and if so, the nature of the damages that should be awarded.

The central legal issues in this case revolved around the obligations of the solicitor to the plaintiff, specifically whether the solicitor had a duty to advise the plaintiff of alternative transactions and whether this duty was breached. The court also needed to assess whether the solicitor's failure to advise constituted a breach of an implied duty of care, and if so, what form the damages should take. The court had to consider the relationship between the solicitor and the plaintiff, the specific circumstances of the case, and the principles of equity that might apply.

The court found that the solicitor did owe a duty of care to the plaintiff, which included advising her of alternative transactions. The court determined that this duty was indeed breached, as the solicitor failed to adequately advise the plaintiff of her options. In terms of damages, the court ruled that the appropriate remedy would be to set aside the transfer of the plaintiff's half-interest in the family home to her son. The court held that this remedy was necessary to rectify the undue influence and unconscionable conduct that had occurred.

The final orders of the court mandated that the transfer of the plaintiff's half-interest in the family home to her son be set aside. This decision aimed to restore the status quo ante and provide a remedy for the plaintiff's grievance regarding the transfer. The court's ruling underscored the importance of a solicitor's duty to their client, particularly when the client is vulnerable due to factors such as age and illiteracy. The decision also highlighted the potential consequences of failing to discharge this duty, including the possibility of setting aside transactions that were influenced by undue influence or unconscionable conduct.

Orders