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

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”).
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.
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.
Mr A Cheshire SC appeared for the plaintiffs, leading Mr F Maghami, instructed by Lehman Walsh…

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: [2025] NSWSC 523
Decision Date: 23 May 2025

CaseChat Overview and Summary

The plaintiffs, Eftekharzadeh-Mashhadi, sought to recover funds misappropriated by the defendants, Rogaris. The first defendant claimed to be a legal practitioner, and the second defendant operated as a legal practice. They collected funds from clients under the guise of handling conveyancing transactions but misapplied the funds. The plaintiffs sought to recover the misappropriated funds. The defendants were served with the proceedings but did not appear or plead. The final hearing was held in their absence.

The legal issues before the court were whether the first defendant, who was not legally qualified, could be held to account for misapplied funds under a constructive trust and whether the second defendant, a purported legal practice, was liable for the actions of the first defendant. The court also considered whether equitable compensation or restitution was appropriate and if statutory remedies were applicable. The central issue was the extent of the liability of the defendants for the misapplication of client funds.

The court found that the first defendant had held himself out as a legal practitioner and obtained funds from clients for conveyancing purposes. The funds were not used for the intended transactions, leading to a misapplication. The second defendant, as a legal practice, was also implicated as it facilitated the first defendant's actions. The court held that a constructive trust was appropriate in this case, akin to the Black v Freedman trust, where the first defendant held the funds on trust for the plaintiffs. The court also awarded equitable compensation for the loss suffered by the plaintiffs. The court did not find it necessary to consider statutory remedies or restitution as the constructive trust and equitable compensation adequately addressed the misapplication of funds.

The court ordered that the first defendant hold the misapplied funds on trust for the plaintiffs. Additionally, the court awarded equitable compensation to the plaintiffs for the loss suffered. The second defendant was also held liable for the actions of the first defendant. The court did not order any restitution or consider statutory remedies as the constructive trust and equitable compensation provided sufficient remedies for the misapplication of funds.

Orders