Jeandin v Tzovaras - [2011] NSWSC 1254

Supreme Court

New South Wales

Medium Neutral Citation: Jeandin v Tzovaras [2011] NSWSC 1254
Hearing dates: 04/10/2011 and 05/10/2011
Decision date: 04 November 2011
Jurisdiction: Equity Division - Commercial List
Before: McDougall J
Decision:
Judgment for plaintiff against first and second defendants for $1,890,575.31 including interest. Judgment for plaintiff against third defendant for $1,500,000.00 with interest to be assessed. Plaintiff to have charge over LawCover policy. Defendants to pay plaintiff's costs.

Catchwords: CONTRACT - formation - whether oral retainer for provision of legal services - DUTY OF CARE - duty of solicitor to client in contract, at common law and as fiduciary - breach of duty - conflict of interest - failure to advise - DAMAGES - causation - whether, but for the failure to advise, plaintiff would have made unsecured financial investment.
Legislation Cited: Civil Liability Act 2002 (NSW)
Civil Procedure Act 2005 (NSW)
Law Reform (Miscellaneous Provisions) Act 1946 (NSW)
Cases Cited: Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420
Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1
Carr trading as Forshaws Neill v Swart [2007] NSWCA 337
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523
Hendriks v McGeoch [2008] NSWCA 53
Solicitors' Liability Committee v Gray (1997) 77 FCR 1
Category: Principal judgment
Parties: Jean-Pierre Louis Paul Jeandin (Plaintiff)
Ted Dorotheos Tzovaras (First Defendant)
George Tzovaras (Second Defendant)
Tzovaras Legal Pty Limited (ACN 092 725 829) (Third Defendant)
LawCover Insurance Pty Limited (ACN 095 082 509) (Fourth Defendant)
Representation: Counsel:
RJH Darke SC / M J Dawson (Plaintiff)
G Curtin SC / P W Arblaster (Fourth Defendant)
Solicitors:
Argyle Lawyers (Plaintiff)
No appearance (First, Second and Third Defendants)
HWL Ebsworth (Fourth Defendant)

File Number(s): 2009/322343

Judgment

HIS HONOUR: The plaintiff (Mr Jeandin) lent $1,500,000.00 to Country Landmark Pty Limited (the company), a company controlled by the first and second defendants (collectively "the brothers"). The brothers guaranteed the loan. The company has defaulted. Mr Jeandin sues the brothers pursuant to their guarantees.

In addition, Mr Jeandin says that he retained the first defendant (Mr Tzovaras), a solicitor, or his incorporated legal practice (the third defendant, Tzovaras Legal) to act for him in connection with the loan. In those circumstances, he says, Mr Tzovaras and Tzovaras Legal owed, and breached, fiduciary duties because Mr Tzovaras was personally interested in the loan both through his shareholding in the company and because he was a guarantor of the company's obligations. In addition, Mr Jeandin says, Mr Tzovaras and Tzovaras Legal breached their contractual and common law duties of care in various respects.

The brothers and Tzovaras Legal did not appear at the hearing. They terminated their solicitor's retainer shortly before the hearing. There is no doubt that the company has defaulted under the loan and that the brothers are liable on their guarantees. They alleged an estoppel defence, but (since they did not appear) there was no evidence to support it.

In addition, Mr Jeandin claims against the fourth defendant (LawCover) pursuant…

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.

Keep reading for free

Create a free CaseChat account to read Jeandin v Tzovaras and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2011] NSWSC 1254
Decision Date: 04 November 2011

CaseChat Overview and Summary

In the case of Jeandin v Tzovaras, the parties involved were a client, Jeandin, and a solicitor, Tzovaras. The nature of the dispute centred around the formation of a contract for the provision of legal services, the duty of care owed by a solicitor to a client in such a contract, and the consequences of a breach of that duty. The case was heard in the Supreme Court of South Australia. The central legal issues the court needed to address were whether an oral retainer for legal services constituted a binding contract, the extent of the duty of care owed by a solicitor to a client, and the implications of a breach of that duty, particularly in terms of conflict of interest and failure to advise. Furthermore, the court had to determine whether the failure to advise by the solicitor directly caused the client to make an unsecured financial investment, and if so, what the appropriate damages would be.

The court examined the evidence to establish if an oral retainer was indeed a binding contract. It considered the nature of the relationship between the client and the solicitor, the circumstances surrounding the retainer, and the expectations of both parties. Regarding the duty of care, the court assessed whether the solicitor breached any obligations under common law or as a fiduciary. It scrutinised the solicitor's conduct to determine if there was a conflict of interest and if the failure to advise the client constituted a breach of the duty owed. The court also explored causation in the context of damages, specifically whether the client's decision to make an unsecured financial investment was a direct result of the solicitor's failure to advise.

In reaching its decision, the court concluded that an oral retainer did form a binding contract, establishing a clear relationship of solicitor and client. It found that the solicitor owed a duty of care to the client, which included the obligation to avoid conflicts of interest and to provide appropriate advice. The court determined that the solicitor's failure to advise the client regarding a potential conflict of interest constituted a breach of that duty. Additionally, the court found that the client's decision to make an unsecured financial investment was indeed influenced by the solicitor's failure to advise, establishing a causal link between the breach and the investment. The court awarded damages to the client, reflecting the financial loss incurred as a result of the unsecured investment.

Orders