Eftekharzadeh-Mashhadi v Rogaris

[2025] NSWSC 523

Supreme Court

New South Wales

Medium Neutral Citation:

Eftekharzadeh-Mashhadi v Rogaris [2025] NSWSC 523

Hearing dates:

30 April 2025

Date of orders:

30 April 2025

Decision date:

23 May 2025

Jurisdiction:

Equity - Duty List

Before:

Slattery J

Decision:

Relief granted to the plaintiffs. See paragraph [37] for final orders.

Catchwords:

EQUITY — Equitable remedies – constructive trust – equitable compensation – the first defendant, who is not legally qualified held himself out as a legal practitioner and the second defendant as a legal practice – they obtained funds from clients on the basis that the funds would be applied in conveyancing transactions – funds misapplied and not used in the conveyancing transactions – plaintiffs seek to recover funds – defendants served but do not appear – final hearing in the absence of the defendants – remedies – constructive trust – Black v Freedman trust – equitable compensation – restitution – statutory remedy.

Legislation Cited:

Civil Procedure Act 2005

Legal Profession Uniform Law 2014

Uniform Civil Procedure Rules 2005

Cases Cited:

Black v S Freedman & Co (1910) 12 CLR 105

Briginshaw v Briginshaw (1938) 60 CLR 336

Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41

Konica Minolta Business Solutions Australia Pty Ltd v Vongkeneta [2013] NSWSC 486

Menzies v Perkins [2000] NSWSC 40

Shaw Building Group Pty Ltd v Narayan (No 2) [2015] FCA 585

Texts Cited:

J.D. Heydon, Cross on Evidence, Butterworths, Sydney, 2023, 14th ed.

Category:

Principal judgment

Parties:

(P1): Dr Amir Eftekharzadeh Mashhadi
(P2): Dr Pegah Meshkin Khoda

(D1): Mr Trent Rogaris
(D2): Castle Law Group Pty Ltd

Representation:

Counsel:
(P1 & P2): A Cheshire SC & F Maghami
(D1 & D2): No appearance

Solicitors:
(P1 & P2): Lehman Walsh Lawyers
(D1 & D2): No appearance

File Number(s):

2025/133589

Publication restriction:

Nil.

JUDGMENT

1. Until a 26 February 2025 telephone call, the plaintiffs, Dr Amir Eftekharzadeh Mashhadi and his wife Dr Pegah Meshkin Khoda, believed the first defendant, Mr Trent Rogaris, was acting as their solicitor. They thought he was doing the conveyancing for their purchase of a residence in Turramurra (“the Turramurra property”) in his legal practice conducted through the second defendant, Castle Law Group Pty Ltd (“Castle Law”).

2. On that day Dr Mashhadi telephoned Mr Rogaris, to enquire about $330,000 that the plaintiffs had transferred into what they thought was Castle Law’s trust account. Mr Rogaris’ mother unexpectedly answered his phone, starting a chain of inquiry that resulted in several painful revelations: Mr Rogaris is not a solicitor, Castle Law does not conduct a legal practice, their $330,000 is missing, and they have been defrauded a total of $456,093.84.

3. Kunc J granted ex parte relief to the plaintiffs on 8 April 2025, returnable on 30 April. The defendants were notified of this return hearing date. The plaintiffs applied in the Duty List on Wednesday 30 April 2025 for urgent final relief against the defendants.

4. Mr A Cheshire SC appeared for the plaintiffs, leading Mr F Maghami, instructed by Lehman Walsh Lawyers. The defendants were called outside Court but did not appear at this final hearing. The background to these unfortunate circumstances may be shortly stated.

The Defendants’ Fraudulent Scheme

5. From 2021 Dr Mashhadi and Dr Khoda retained Mr Rogaris to undertake conveyancing transactions for them from time to time. Mr Rogaris had been introduced to them by a relative and told them he was a solicitor practising through Castle Law. Mr Rogaris held himself out to third parties as Dr Mashhadi and Dr Khoda’s solicitor. Shortly before their acquisition of the Turramurra property, Mr Rogaris acted for Dr Mashhadi and Dr Khoda on the purchase of an investment property in the suburb of Waitara (“the Waitara property”) in mid-2024.

6. On 24 August 2024, the plaintiffs approached Mr Rogaris on the purchase of the Turramurra property and the sale of an existing property in the same suburb. Mr Rogaris advised them to acquire the Turramurra property based on his review of the contract for sale. On 5 September 2024 the plaintiffs offered $3.3 million to the vendor to acquire the Turramurra property, upon terms that a 5% deposit ($165,250) would be due on exchange and that settlement would occur on 29 January 2025. The vendor accepted the offer. Exchange of contracts occurred and the 5% deposit was paid to the vendor’s agent.

7. On 7 September 2024 the first plaintiff received an email from Mr Rogaris requesting that 50% of the anticipated stamp duty on the sale (being $82,000) be transferred into what Mr Rogaris’ email described as Castle Law’s trust account. The plaintiffs paid the sum requested to Mr Rogaris. The remaining 50% of the stamp duty was to be deducted from the sale proceeds of the residence that the plaintiffs were selling.

8. On 27 October, a consultant solicitor from another firm contacted Dr Mashhadi and introduced himself as Mr Rogaris’ colleague and advised that he had been asked to assist Dr Mashhadi with the settlement of the transactions on the sale of the plaintiffs’ existing home and the purchase of the Turramurra property.

9. On 28 October, the sale of the plaintiffs’ existing residence was settled via PEXA (“the North Turramurra property”). Upon receiving the settlement funds, the plaintiffs noticed that they received $80,932.12 less than they had expected. They raised this shortfall with Mr Rogaris. He told them he had withdrawn the $82,000 to satisfy the second half of the applicable stamp duty payment.

10. The New South Wales stamp duty applicable to a $3.3 million property at that time should have $163,909. But at this point Castle Law was holding a total of $187,000, on what the defendants said was on trust for stamp duty. Castle Law was therefore holding at this time $23,091 more than was required to meet any stamp duty obligations.

11. On 3 January 2025, Mr Rogaris requested the plaintiffs deposit the remaining 5% deposit of $165,250 into the Castle Law trust account for settlement. Before 5 January 2025 the plaintiffs transferred $165,250 into what was described as the second defendant’s trust account.

12. On or about 28 January, the day before settlement of the purchase of the Turramurra property, the consultant solicitor advised the first plaintiff that the settlement could not be completed as the settlement funds could not be verified by PEXA. The explanation for the delay was that Castle Law’s trust account had not been linked to the PEXA workspace with the required amount for stamp duty and the remaining 5% of the deposit. Dr Mashhadi was very surprised at this and tried to contact Mr Rogaris immediately that day but without success. The consultant solicitor told them that the settlement had been rescheduled for the following day.

13. Dr Mashhadi finally reached Mr Rogaris to enquire why the plaintiff’s trust funds had not been verified in the PEXA workspace and why the settlement was being delayed. Mr Rogaris offered the excuse that administrative errors by PEXA accounted for the delay. Mr Rogaris asked the plaintiffs for an additional $330,000 to be deposited in Castle Law’s trust account that day to ensure that the settlement proceeded from seeing that the additional money would be repaid later. With misgivings, the plaintiffs transferred the funds they had set aside for other purposes to ensure that settlement took place that day. They wanted to purchase the Turramurra property and did not wish to default on settlement of the contract for sale.

14. On 30 January 2025, Mr Rogaris and Dr Mashhadi exchange text messages in which Mr Rogaris offered several excuses for not being able to repay the money immediately. Mr Rogaris sent a text message to Dr Mashhadi stating that he would try and recover the money from PEXA. This was ploy designed to divert the plaintiffs. PEXA does not hold money for the settlement of property transactions. It merely facilitates the property transactions by passing funds between the linked bank accounts on the PEXA workspace, which are set up by the incoming and outgoing owners’ and mortgagees’ representatives in the PEXA workspace.

15. For several weeks after the end of January 2025 Mr Rogaris gave excuses to the plaintiffs for his failure to return their $330,000. Eventually Mr Rogaris stopped responding to the plaintiffs’ increasingly anxious telephone calls and text messages.

16. But on 26 February 2025 Mr Rogaris’ caller ID telephone number came up on Dr Mashhadi’s telephone. Dr Mashhadi answered. It was Mr Rogaris mother; at least that is who she claimed to be. She gave Dr Mashhadi the unsettling news that Mr Rogaris had been charged by police on matters unrelated to the purchase of the Turramurra property and had been refused bail. She explained that she would contact Mr Rogaris and get back to Dr Mashhadi, adding that “Trent is a good boy”.

17. Sporadically Dr Mashhadi received more text messages from the same telephone number that Mr Rogaris had used, apparently still from Mr Rogaris’ mother. She sought to assure the plaintiffs that her son would soon be released.

18. On 8 March, the plaintiffs received another unwelcome surprise: a letter from Revenue NSW, requesting payment of $18,401 in stamp duty for the Waitara property that they had purchased in June 2024 with the assistance of the defendants.

19. Conscious that Mr Rogaris was in prison, Dr Mashhadi telephoned the consultant solicitor, who had also helped Mr Rogaris with the conveyancing on the Waitara property for the plaintiffs. Dr Mashhadi asked the consultant solicitor to investigate why the stamp duty which the plaintiffs had funded to Castle Law was still unpaid.

20. The consultant solicitor informed Dr Mashhadi that Mr Rogaris had lodged a First Home Buyers Assistance Scheme application under their names. They had not given him permission to do this. They were not first-time buyers but an established investing couple. The plaintiffs investigated this further, as is recounted below.

21. The plaintiffs have not heard since from Mr Rogaris or from Castle Law. Their calls have gone unanswered. Castle Law’s telephone has been disconnected. Their funds have not been returned. Dr Mashhadi reported these events to police. He was told that the plaintiffs’ only prospect of recovery of their funds would be through the civil court system. The plaintiffs engaged new solicitors and commenced these proceedings.

The Plaintiffs Discover an Earlier Fraud in the 2021 Property Transaction

22. After the plaintiffs commenced these proceedings on 8 April 2025, they became aware that Mr Rogaris had defrauded them earlier, as far back as 2021 when they first engaged him to assist them with the conveyancing for another investment property 2021 (“the 2021 property transaction”). They learned that Mr Rogaris had applied, allegedly on behalf of Dr Mashhadi, for stamp duty exemption on the basis that the plaintiffs were eligible for stamp duty exemption under the category of “break-up of marriage, de facto relationship or domestic relationship”.

23. The plaintiffs are married and had never divorced or separated. The exemption application was a fiction invented by Mr Rogaris so he could keep the stamp duty that the plaintiffs had deposited with him. During the 2021 property transaction Mr Rogaris advised the plaintiffs they would be liable for a total of $108,442.84 in stamp duty. Upon that advice they paid this money to Castle Law on account of the stamp duty for the 2021 property transaction.

24. A Revenue NSW letter of 14 April 2025 first revealed to the plaintiffs that the stamp duty on the 2021 property transaction had not been paid. Without their knowledge, Mr Rogaris had applied for and received a full waiver of the stamp duty on the 2021 property transaction. They are seeking to rectify the position with Revenue NSW.

Commencement of Proceedings

25. The matter was commenced by Summons in the Duty List of the Equity division of this Court on 8 April 2025, when Kunc J made freezing orders against the defendant’s assets. Three affidavits of service have been filed, confirming service at the address of the second defendant, the correctional facility the first defendant is being detained in and via various email addresses and mobile phone numbers. The Court is satisfied that the plaintiffs have complied with the Court’s orders for service of these proceedings on the defendants.

26. Service was ordered on the lawyer appearing for Mr Rogaris in the criminal proceedings. That lawyer did not have instructions to appear in this current matter. But that lawyer indicated that he had informed Mr Rogaris of the return dates in these proceedings. No appearance has been filed, and neither defendant appeared on 30 April 2025 when the matter was called outside Court.

27. The plaintiffs have now filed an Amended Summons to include the recovery of the $108,442.84 defrauded from the plaintiffs in the 2021 property transaction. The plaintiffs moved on the amended summons and were granted final relief after a hearing and consideration of the evidence on 30 April 2025.

28. Plaintiffs claim a total sum of $456,093.84 which is made up of the individual transactions set out in order 3 below. The plaintiffs seek a declaration of a constructive trust over the sum of $456,093.84 they transferred to the defendants. The plaintiffs have also calculated interest up to 30 April 2025 in the sum of $43,886.

Consideration

29. The circumstances establish that the various funds the plaintiff paid to the defendants on account of the above conveyancing transactions were held on constructive trust for the plaintiffs and the defendants are liable to repay those funds to the plaintiffs and account to the plaintiffs for their use.

30. Several grounds of liability are established which will allow the plaintiff to recover these sums from the defendants and ultimately for the plaintiff to avail themselves of the equitable remedy of tracing.

31. The defendants held themselves out as professional advisers and created a relationship of trust and confidence, albeit a fraudulent one. That created a situation of vulnerability for the plaintiffs. That situation attracted the necessary elements for the creation of a traditionally accepted fiduciary relationship akin to the solicitor/client relationship which the plaintiffs were induced to believe existed: Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 96. The plaintiffs are entitled to a declaration constructive trust over the funds and equitable compensation on this ground.

32. Moreover, the defendants hold the funds on the institutional constructive trust established in the reasoning of the High Court in Black v S Freedman & Co (1910) 12 CLR 105 as applicable to stolen funds in the hands of the thief.

33. And the monies paid are also recoverable in restitution as monies had and received to the use of the plaintiffs. The application of the remedy in restitution to such circumstances was discussed in Shaw Building Group Pty Ltd v Narayan (No 2) [2015] FCA 585 by Foster J who said:

In order to succeed in an action for money had and received, the plaintiff must establish that the money which the defendant obtained as a result of the relevant wrong was ‘subtracted’ from the plaintiff. Money that has been stolen may be recovered from the thief…the defendant’s receipt of an obviously unjust enrichment has resulted from the defendant’s deception of the plaintiff or commission of a wrong against the plaintiff ... A victim of theft may also sue for money had and received a third party who has received stolen money from the thief without giving valuable and adequate consideration therefor... It relies upon the wrong to the plaintiff’s property done by the thief.

34. Finally, the Legal Profession Uniform Law (“Uniform Law”), ss 6, 9, and 10(1) provide criminal penalties for unqualified persons engaging in legal practice. And Uniform Law s 10(2) provides for a statutory remedy in debt for persons advancing money to unqualified persons conducting legal practice.

35. The defendants have not appeared to rebut the obvious inference of fraud that arises from the plaintiffs’ evidence, which is set out in the narrative of findings above. The Court has no reason not to accept the plaintiffs’ evidence which is consistent, cogent and compelling and which is accepted. The Court is mindful of applying the standard of proof required by Briginshaw v Briginshaw (1938) 60 CLR 336 in making findings of serious misconduct. But the evidence nevertheless clearly establishes that the defendants defrauded the plaintiffs.

36. The Court will not dismiss the Amended Summons but will allow the plaintiffs to continue recovery action through these proceedings. The defendants’ conduct has already been referred to the police, so it is not necessary for the Court to refer these reasons to the Attorney General.

Conclusion and Orders

37. For these reasons the Court makes the following orders, declarations and directions:

1. GRANTS leave to the plaintiffs to file in Court the Amended Summons.

2. ORDERS that there be judgment for the plaintiffs against the defendants in the sum of $456,093.84 together with interest up to today pursuant to section 100 of the Civil Procedure Act 2005 in the sum of $43,886.00.

3. ORDERS that by 4pm on 6 May 2025 the first defendant file and serve on the plaintiffs an affidavit setting out to the best of his knowledge, information and belief what became of the following funds, including any bank accounts into which the funds may have been paid, the items that may have been purchased or the liabilities that may have been satisfied with the funds:

1. the sum of $34,550 transferred by the plaintiffs to the bank account "CLG Trust" with BSB [redacted] and account number [redacted] on or about 11 May 2024;

2. the sum of $82,000, transferred by the plaintiffs to the bank account "CLG Trust" with BSB [redacted] and account number [redacted] on or about 7 September 2024.

3. the sum of $82,000 taken from the plaintiffs' sale proceeds of [the North Turramurra property] on or about 28 October 2024;

4. the sum of $165,250 transferred by the plaintiffs to the bank account "CLG Trust" with BSB [redacted] and account number [redacted] on or about 4 January 2025 and 5 January 2025;

5. the sum of $108,442.84 paid by the plaintiffs to the PEXA workspace in respect of the purchase of [the 2021 property transaction] on or about 23 March 2021.

4. DECLARES that the defendants hold on trust for the plaintiffs the funds referred to in order 3(a) to (e) of these orders (totalling $456,093.84) and hold on trust for the plaintiffs any assets into which the said funds (or any part thereof) can be traced ("the trust assets").

5. ORDERS that the defendants are restrained, whether by themselves, their servants or agents, from removing from Australia, or in any way disposing of, dealing with, the trust assets or diminishing the value of their assets within Australia below the unencumbered value of $499,979.84.

6. RESERVES for further consideration the questions of an account of profits, an order for an account, an inquiry as to damages and equitable compensation.

7. GRANTS LEAVE to the plaintiffs to issue a subpoena to Westpac Banking Corporation for the statements of the St George Bank account with BSB [redacted] and account number [redacted]for the periods from:

1. 20 March 2021 to 31 September 2021; and

2. 10 May 2024 to date.

8. DIRECTS that the subpoena in order 7 is to be filed and served by 10am on 1 May 2025 and may be made returnable at 9am on 6 May 2025.

9. ORDERS that the defendants pay the plaintiffs' costs of these proceedings to date as agreed or assessed.

10. ORDERS pursuant to UCPR r 10.14, that the plaintiffs may effect service of the Amended Summons and these orders on the defendants:

1. by email to be sent by 8pm on 30 April 2025 to:

1. [redacted]@gmail.com;

2. [redacted]@gmail.com; and

2. by delivering and leaving copies at the front doorstep of and in the mailbox to:

1. [redacted];

2. [redacted];

3. [redacted],

by 4pm on 1 May 2025.

3. by sending a text message by 8pm on 30 April 2025 to each phone number [redacted] and [redacted] which in addition to the documents is in the following terms:

1. "Dear Mr Rogaris, I am a solicitor acting on behalf of Dr Mashadi and Dr Khoda. Dr Mashadi and Dr Khoda have commenced proceedings against you. The Amended Summons filed with the Court, and the orders made by the Court, have been sent by email to [redacted]@gmail.com and [redacted]@gmail.com, and will be delivered to [redacted]; [redacted]; [redacted].
   Those orders restrict the ability of the Defendants to deal with their assets and require the First Defendant to take certain action.
   The matter is next listed at 10am on 8 May 2025.
   Yours faithfully, [name of author] of Lehman Lawyers"

11. STANDS the proceedings over to 10am on 8 May 2025 before the Equity Duty Judge.

12. GRANTS liberty to apply on 1 business day's notice.

13. ORDERS that these orders are to be entered FORTHWITH.

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Decision last updated: 23 May 2025