Milen T/A Jo-Anne N Milen & Associates v Stec - [2019] SADC 59

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MILEN T/A JO-ANNE N MILEN & ASSOCIATES v STEC
[2019] SADC 59
Judgment of His Honour Judge O'Sullivan
17 May 2019
PROFESSIONS AND TRADES - LAWYERS - DUTIES AND LIABILITIES - SOLICITOR AND CLIENT - NEGLIGENCE - GENERALLY
The plaintiff firm acted for the defendant in the Federal Circuit Court of Australia. The defendant failed to pay the plaintiff’s costs and counterclaimed against the plaintiff alleging the firm’s principal failed to act in accordance with his instructions and was negligent in the conduct of his matter before that Court. The defendant also alleged dishonest and fraudulent conduct on the part of the firm’s principal.
Held: The plaintiff (defendant by counterclaim) by its principal was not in breach of the duty of care owed to the defendant (plaintiff by counterclaim) nor did the principal of the firm fail to act in accordance with the plaintiff by counterclaim’s instructions nor did she engage in dishonest or fraudulent conduct. Counterclaim dismissed.
Legal Practitioners Act 1981 Sch 3, cl 44; Civil Liability Act 1936 s 41, referred to.

MILEN T/A JO-ANNE N MILEN & ASSOCIATES v STEC
[2019] SADC 59
Introduction

This matter commenced with a claim by the plaintiff in the Christies Beach Magistrates Court for professional fees rendered for representing the defendant in the Federal Circuit Court of Australia.
The defendant filed a defence to the claim in which he challenged the quantum of the fees and also filed a counterclaim in the sum of $101,424. As a result of the quantum of the counterclaim, the matter was transferred to this Court on 11 January 2016.
Since there was a challenge to the quantum of the plaintiff’s fees, the matter was referred to the Supreme Court for adjudication on 29 March 2016. As a result of that referral, pursuant to clause 44 of Schedule 3 to the Legal Practitioners Act 1981, the proceedings in this Court were stayed.
On 17 November 2017, the Supreme Court issued an allocator for the assessed costs. Although the defendant sought a review of the assessed amount, the quantum of the assessed costs did not change.
As a result of the Supreme Court issuing an allocator, on 17 April 2018, the plaintiff filed a Notice of Discontinuance of its claim.
On 5 February 2018, a Master of this Court ordered that this matter proceed to trial on the counterclaim only.
The Defendant’s Counterclaim
The particulars of the counterclaim plead that the defendant retained the plaintiff firm to represent him at a trial relating to matrimonial property in the Federal Magistrates Court, as it then was, now the Federal Circuit Court.

Ms Jo-Anne Milen, the principal of the firm, performed the majority of the legal work for the defendant, including representing him at the trial before the Federal Circuit Court.
As part of those Federal Circuit Court proceedings, the defendant claimed the sum of $96,125 in relation to a property in Poland (‘the Polish property’) which he alleged was owned by the defendant and his then wife, Mrs Stec. The Polish property was occupied by Mrs Stec’s brother who Mr Stec alleged held it on trust for the defendant and Mrs Stec. During the Federal Circuit Court proceedings, Mrs Stec denied she and the defendant owned the Polish property.
Specific allegations made by Mr Stec in his counterclaim are dealt with below.
Ignored Instructions
The trial proceeded in the Federal Circuit Court between 12 and 13 March 2015. It is alleged by the defendant in the counterclaim that the plaintiff ignored the defendant’s instructions in relation to: [1]
i.The disclosure and inspection of documents;
ii.The preparation [sic presentation] of documents to the Federal Circuit Court; and
iii.Representation at the trial.
[1] Counterclaim, [2].
Disclosure, Inspection and Presentation of Documents
As to the disclosure and inspection of documents and the presentation of documents to the Federal Circuit Court, the defendant alleges that prior to the trial in the Federal Circuit Court, the defendant gave to the plaintiff ‘very important documents’ which he asserts established the defendant’s case in relation to the Polish property. He alleges that he instructed the plaintiff to disclose the documents to Mrs Stec’s solicitors but the plaintiff ignored the instructions and never disclosed the documents.[2]
Representation at the Trial
[2] Counterclaim, [2], [3].
On the issue of representation, the defendant alleges that during the trial on 12 and 13 March 2015, the plaintiff misled the court in relation to the reasons for the non-disclosure of the ‘very important documents’ given by him to the plaintiff. [3]
[3] Counterclaim, [4].
The defendant says that because of the non-disclosure, the Federal Circuit Court did not receive the documents into evidence, a consequence of which was that the defendant did not establish that the Polish property formed part of the matrimonial property.
The defendant further says he was cross-examined over the non-disclosure of the documents which he asserted had a devastating effect on his credibility at the trial.
Forgery and Removal of the Defendant’s Case from the Court
The defendant further alleges that the plaintiff forged an affidavit of the defendant sworn 18 February 2015, by removing paragraphs related to the Polish property from the affidavit, and in so doing, removed the defendant’s case in relation to the Polish property from the Federal Circuit Court proceedings.[4]
[4] Counterclaim, [5], [6], [7].
Dishonest and Fraudulent Conduct
The defendant continues by alleging that the plaintiff acted dishonestly and fraudulently to the detriment of the defendant, committed a fraud and misled the Court. He asserts that as a consequence of those actions, not only was the Polish property removed from the proceedings, but that the removal resulted in the defendant losing $96,125, being half the value of the Polish property. The defendant claims that amount from the plaintiff.[5]
[5] Counterclaim, [7], [8].
Consent Orders
Still further, the defendant alleges that the plaintiff negotiated consent orders (‘Consent Orders’) with Mrs Stec’s solicitors in relation to the matrimonial property (including the Polish property) on 13 March 2015. The Consent Orders record that each party was to bear its own costs, yet in a letter of 21 August 2015 to the Legal Profession Conduct Commissioner (‘the Commissioner’), the plaintiff states that Ms Milen who appeared for the defendant in the Federal Court proceedings, negotiated an order that the defendant pay $85,000 which sum included $5,000 for costs. In so doing, the defendant alleges the plaintiff misled the Federal Circuit Court and the defendant by falsely representing those negotiations. As a consequence, the defendant paid $5,000 in costs to the wife which he says was consequent upon a fraud perpetrated on him.[6]
[6] Counterclaim, [9].
The defendant seeks recovery of the sum of $5,000 from the plaintiff.
Issues
As this matter is proceeding only on the issue of the counterclaim, the issues for determination taken from the counterclaim may be stated as follows:[7]
2.Did the plaintiff ignore the defendant’s instructions including: disclosure and inspection of documents, preparation [sic presentation] of documents to the Court and representation during the Federal Circuit Court trial?
3.Prior to the trial of 12 - 13 March 2015 the defendant gave to the plaintiff very important documents proving the defendant’s case and instructed the plaintiff to disclose them. Did the plaintiff ignore the instructions and not disclose the documents prior to the trial?
4.During the hearing of the trial in the Federal Circuit Court on 12 and 13 March 2015 did the plaintiff mislead the court twice in saying that the defendant did not provide the ‘very important documents’ prior to the trial such that the Federal Circuit Court refused to admit the ‘very important documents’ into evidence?
5.Did the plaintiff forge the defendant’s affidavit of 18 February 2015 in the Federal Circuit Court proceedings? Did the plaintiff remove paragraphs related to the Polish property from the affidavit?
6.Did the plaintiff ‘remove’ the defendant’s case in relation to the Polish property from the Federal Circuit Court proceedings?
7.Did the plaintiff’s actions result in detriment to the defendant, and was there dishonest and unprofessional representation, fraud and misleading of the Court such that the defendant’s case of the Polish property was ‘removed’ from the Court proceedings. Did the defendant lose $96,125 constituting half value of the Polish property?
9.The plaintiff negotiated a consent order related to the Australian matrimonial property (‘the Australian Property’). The negotiated order allowed for no order as to costs and the defendant accepted the negotiated order. The Court sealed the order showing no party to pay costs. In its letter dated 21 August 2015 to the Commissioner, the plaintiff says it negotiated the order that the defendant would pay $5,000 costs. Did the plaintiff mislead the Court and the defendant by falsely presenting the content and outcome of the negotiations. Did the defendant pay $5,000 costs as a result of any fraud?
[7] The following paragraph numbers reflect the paragraph numbers in the counterclaim.
As I have noted, by letter dated 21 August 2015, the plaintiff responded to a complaint made by Mr Stec to the Commissioner. That letter sets out a history of the plaintiff’s dealings with Mr Stec and forms Exhibit DST15 to Mr Stec’s affidavit sworn 6 April 2018.[8] It is clear that some of Mr Stec’s allegations against the plaintiff are based on matters contained in the plaintiff’s response to the Commissioner. I deal with each of the defendant’s allegations below.
[8] Exhibit P1, 113.
It is also apparent from the counterclaim that although not specifically pleaded, Mr Stec alleges a cause of action for breach of duty of care by the plaintiff. The plaintiff proceeded on the basis Mr Stec was alleging a breach of duty of care[9] and notwithstanding no breach of duty of care has been specifically pleaded, I deal with it.
[9] Summary of Argument of the Plaintiff, [15] – [42].
The Proceedings
This matter proceeded with evidence-in-chief being given by affidavit, supplemented by oral evidence. The defendant relies on:
1His affidavit sworn 6 April 2018 (filed 9 April 2018);
2His affidavit sworn and filed 12 June 2018;
3The affidavit of John Paul Edmond Bartley sworn 1 June 2018 (filed 12 June 2018); and
4The affidavit of Michael Winston Galea filed 19 June 2018 (it is not clear when the affidavit was sworn but no point was taken by the plaintiff).
The plaintiff relies on the affidavit of Ms Milen sworn 21 May 2018 (filed 22 May 2018).
Application for an Adjournment
At the commencement of the hearing Mr Stec applied for an adjournment on the basis that he had not been provided with certain documents. Consideration of the Court record, however, reveals that on 24 March 2017, in the Supreme Court adjudication proceedings, his Honour Judge Dart, Master of the Supreme Court, ordered the plaintiff to produce the defendant’s file (‘file’) and bring it to Court. That order was complied with on or about 28 March 2017, and certainly by 20 April 2017.[10]
[10] Supreme Court Record – Action No. SCCIV-16-395.
In an affidavit sworn 5 April 2017,[11] Mr Stec deposes that the plaintiff brought the file to Court, he inspected it and the Court copied the file for him. Nonetheless, Mr Stec filed an affidavit sworn 8 October 2018, in which he asserts at paragraph 113 that the plaintiff ignored the order of Judge Dart made 24 March 2017 (FDN 31). That is clearly wrong.
[11] Exhibit D2, [17].
Further, on 16 July 2018, Mr Stec filed an interlocutory application in which he sought further documents. On 30 July 2018, Master Norman of this Court, published reasons in which, amongst other things, he dismissed that application.
In the circumstances, I refused Mr Stec’s application for an adjournment. Mr Stec indicated at that stage that he might seek to appeal, at which time I informed him of his option to appeal against any judgment in this matter if dissatisfied with the result, but that the matter would proceed regardless.
Evidence
The Documentary Evidence
Prior to evidence commencing, the plaintiff tendered a book of documents which was received by consent as Exhibit P1 (‘Tender Book’). The Tender Book included all the affidavits that Mr Stec relied upon together with exhibits, as well as the plaintiff’s affidavit and exhibits.
Mr Stec identified the affidavits in Exhibit P1 upon which he relied as evidence-in-chief in this matter. They included affidavits of the witnesses Mr Bartley and Mr Galea. Both those witnesses were not initially required for cross-examination, however Mr Stec elected to call them.
Witnesses
Apart from documentary evidence, Mr Stec and Ms Milen of the plaintiff (defendant by counterclaim) gave oral evidence. At the commencement of his oral evidence, Mr Stec complained again that he was only able to conduct part of the trial and that he felt disadvantaged or mistreated because he had not received all the documents he considered the plaintiff possessed but did not disclose. I informed Mr Stec that he had already had numerous opportunities to agitate that matter and that the matter would proceed.
Four witnesses were called during the trial.
The two major witnesses were Mr Stec and Ms Milen.
Ms Milen
Ms Milen gave her evidence in a straightforward and truthful manner, conceding where appropriate, and I formed the view that she was genuinely trying to assist the court.
Mr Stec
Mr Stec is clearly an experienced litigator and I note he was declared a vexatious litigant on 27 August 1997 in action number 1315 of 1995 in the Supreme Court of South Australia. That of course does not mean he should not be believed, however although self-represented, he had a good knowledge of process and procedure and had the ability to present his case.
Mr Stec’s affidavits are somewhat rambling. In his oral evidence, Mr Stec varied between being truthful when it did not matter to his case to being argumentative and evasive when it did. I entertain no doubt that he is obsessed with what he perceives as being an injustice done to him and consequently tailored his evidence to fit his grievances. He is clearly unhappy with having to pay the plaintiff’s legal fees for representing him, and this resentment permeated his evidence and indeed into the various complaints he makes against the plaintiff, to the extent that his allegations are opportunistic and directed at trying to avoid responsibility for his legal costs.
I note in passing that the defendant’s attempts to assert that he had entered into a ‘fixed fee’ agreement with the plaintiff for a total amount of $8,000, was specifically rejected by his Honour Judge Roder on the adjudication.[12]
[12] See judgment and orders made 19 September 2016, Exhibit P1, 471-492, particularly at [53]-[80].
The remaining two witnesses, Mr Galea and Mr Bartley were truthful but their evidence does not advance Mr Stec’s case.
I consider the pleaded allegations and the resulting issues below.
Did the plaintiff ignore the defendant’s instructions including: disclosure and inspection of documents, presentation of documents to the Court and representation during the trial (Counterclaim paragraphs 2 and 3).
Paragraphs 2 and 3 of the counterclaim may be read together, since paragraph 3 comprises particulars of paragraph 2. Paragraph 4 also relates to the documents in question although I deal with the allegation in paragraph 4 of the counterclaim separately.
Paragraph 3 is in the following terms:
3. Prior to the trial of 12 – 13 March 2015 the defendant gave to the plaintiff very important documents proving the defendant’s case and instructed the plaintiff to disclose them. The plaintiff ignored the instructions and never disclosed the documents.
Paragraph 1 of the counterclaim asserts that the trial related solely to the matter of the Polish property. That is clearly not correct, and I note that the Consent Orders entered into in the Federal Circuit Court on 13 March 2015, dealt with both the Australian and Polish property.
The gravamen of the allegations in paragraphs 2 and 3 of the counterclaim relate to the defendant giving to Ms Milen ‘very important documents’ on 6 March 2015, allegedly related to the ownership of the Polish property.
In cross-examination before this Court, the defendant confirmed that the ‘very important documents’ were those between pages 265 and 272 inclusive of Exhibit P1.[13]
[13] T68.20-31.
It is common ground between the plaintiff and the defendant that Ms Milen did not send those documents to Mrs Stec’s solicitors before the start of the trial in the Federal Circuit Court on 12 March 2015. In cross-examination before this Court the defendant was asked how those documents established his claim that he owned the Polish property. [14] His answers did not assist in understanding how that might be the case other than to assert that there was a 1992 loan, which was for the Polish property, and a 1995 loan, which was for business.
[14] T70.24-71.18.
On the point of the purpose of the loans, Mr Stec confirmed in his evidence[15] that during the course of the trial in the Federal Circuit Court, Mrs Stec called a representative from the Dom Polski Polish Community Centre Credit Union, (‘Credit Union’), which advanced loan funds to Mr and Mrs Stec both in 1992 and 1995. He agreed that the Credit Union representative, Mr Sciezka, was involved in the two loans and that Mr Sciezka gave evidence before the Federal Circuit Court that the 1992 loan was not for the purpose of purchasing the Polish property. When confronted with that evidence, that is, that Mr Sciezka had sworn an affidavit which had been filed in the Federal Circuit Court to this effect, Mr Stec denied it was a problem for his case in the Federal Circuit Court.[16]
[15] T73.1-74.1.
[16] T74.2-8.
Further, notwithstanding the defendant’s characterisation of the documents as ‘very important’, he confirmed in his evidence before this Court, that he had no document that showed money being transferred from Australia to Poland in 1992. Rather, the defendant’s evidence was that he simply withdrew money and gave cash to Mrs Stec for friends to deliver in Poland.[17]
[17] T72.24-29.
As I have noted, there is no dispute between the parties that the documents at Exhibit P1 page 266-272 were given by the defendant to the plaintiff on 6 March 2015 and that the documents were not disclosed to Mrs Stec’s solicitors prior to trial. The ‘very important documents’ went to the question of whether there was one loan or two. Mrs Stec had contended there was only one loan whereas the ‘very important documents’ suggested there were two. Ms Milen cross-examined Mrs Stec in the Federal Circuit Court and produced the documents. As the documents had not been disclosed, Mrs Stec’s counsel applied for an adjournment to consider the documents After the adjournment, Mrs Stec conceded there were two loans, hence it was not necessary to tender the documents.[18]
[18] Exhibit P1 p 128, Exhibit DST15 at [1.49].
Ms Milen agreed that when the issue about non-disclosure of the documents arose, she informed the Court that she had received the documents from the defendant that day. Mr Stec was subsequently cross‑examined on the documents by the wife’s counsel and accused of holding the documents back in an attempt to ambush his wife.

During that process, an inconsistency emerged between what Ms Milen had said to the Court in relation to when she received the documents and when Mr Stec said he produced the documents to Ms Milen.
After a further adjournment to consider this conflict, Ms Milen realised that she had received the documents some six days prior. When the matter resumed, Ms Milen informed the Court that it was her fault rather than Mr Stec’s, corrected the record and apologised to the Court.[19] As is evident, Ms Milen took responsibility for the failure to disclose the documents.
[19] T224.9-25, T242.10-243.2.
Apart from this episode, the defendant was also cross-examined in the Federal Circuit Court about the transfer of $25,000 from one of his accounts. Mr Stec filed his first financial statement for the purposes of the Federal Circuit Court proceedings on 17 January 2014.[20] That financial statement failed to disclose in item 37, funds that Mr Stec held in a RaboBank account.
[20] Exhibit P4.
Page 458 of Exhibit P1 is a financial statement signed by Mr Stec, dated 18 February 2015 and filed in the Federal Circuit Court on 19 February 2015.[21] It reveals a RaboBank account with a balance of $13,897. Part of the cross-examination of the defendant by Mrs Stec’s counsel in the Federal Circuit Court concerned the inconsistency between the January 2014 financial statement[22] and the financial statement filed 19 February 2015.[23] That led to a further issue about a missing $25,000 upon which the defendant was cross-examined by Mrs Stec’s counsel. It was suggested to Mr Stec that he had withdrawn $25,000 in order to hide it from Mrs Stec.[24]
[21]   Exhibit JNM-4 to the affidavit of Ms Milen sworn 21 May 2018.
[22]   Exhibit P4.
[23]   Exhibit P1, 458.
[24]   T100.19-102.18.
When cross-examined in this matter as to where the $25,000 had gone, the defendant replied that he didn’t remember and that perhaps he had sent some of the money to his sister or used it as expenses on a car.[25]
[25] T102.9 - 18.
The defendant has alleged that the non-disclosure of the ‘very important documents’ in the Federal Circuit Court proceedings given to the plaintiff on 6 March 2015, had a huge negative impact on his case, however he denied that the transfer of $25,000 and his inability to explain properly what had happened to it impacted upon his credibility in the Federal Circuit Court.[26]
[26] T102.24 - 37.
A consideration of the documentation said to be the ‘very important documents’, reveals that the most that the ‘very important documents’ achieve is to establish that a guarantee for a loan was given in 1995 and not 1992.[27]
[27] Exhibit P1, 266.
The defendant contended that the guarantee revealed that he and his wife owned property in Poland. There seems to be no doubt about that on the basis of what Mr Stec referred to as the ‘trust contract’,[28] but it is difficult to see where that takes the matter. It was alleged by the defendant that his brother-in-law held the property in Poland on trust for him and Mrs Stec, a fact denied by Mrs Stec.
[28] Exhibit P1, 66.
I am not in a position to determine if the Polish property was held on trust for Mr Stec and his wife or not, but I note that Order k of the Consent Orders provides for a declaration that the wife shall have no interest, whether by way of legal registerable entitlement or equitable interest in any asset in Poland.[29] That being the case, even if the ‘very important documents’ did impact on the question of ownership of the Polish property, by the Consent Orders, there was a declaration that Mrs Stec had no interest in that property.
[29] Exhibit P1, 313.
Further, the agreed position between the parties was that Ms Milen confirmed to the Federal Circuit Court that she had overlooked the documents, had made an error and apologised to the Federal Circuit Court.
Taken individually or in combination, these matters lead me to the conclusion, as best I can in the circumstances, that the non-disclosure of these documents could not and did not have had the ‘huge impact’ Mr Stec asserts. On balance, if Mr Stec’s credibility was impacted, it was because of his inability to explain to where the sum of $25,000 had been transferred. Indeed, given Mr Stec’s inability to explain the transfer of $25,000 it is difficult to see why the plaintiff, by Ms Milen, is at fault.
Further, there was no judgment in the Federal Circuit Court proceedings. The matter resolved by Consent Orders and there is no credible suggestion that Mr Stec did not enter into those Consent Orders voluntarily or as a result of the conduct of the trial by Ms Milen.
In relation to the allegations in paragraphs 2 and 3 of the counterclaim, I find that the defendant gave the plaintiff documents which the defendant describes as ‘very important documents’ and instructed the plaintiff to disclose them. I also find that the plaintiff overlooked the documents and did not disclose them prior to trial in the Federal Circuit Court. However, I do not accept that the plaintiff ignored the defendant’s instructions in relation to disclosure and inspection of the documents.
I find that the non-disclosure was inadvertent and had no material effect on the defendant’s prospects of success or his subsequent decision to enter into the Consent Orders.
The allegations in paragraphs 2 and 3 of the counterclaim fail.
During the trial hearings of 12 and 13 March 2015 did the plaintiff mislead the court twice by saying that the defendant did not provide the documents prior to the trial such that the Federal Circuit Court refused to admit the very important documents into evidence (counterclaim paragraph 4)
Paragraph 4 of the counterclaim alleges that the plaintiff ‘two times misled the court that the defendant did not provide the documents prior to the trial.’
I have found that Ms Milen informed the court that she was in error and confirmed that the defendant had given the plaintiff the documents prior to trial.
I also find, for the reasons set out above, that the series of events about which the complaint is made did not in any way impact upon the defendant’s prospects of success in the matter or his credit. As I have noted, it is likely that if anything affected Mr Stec’s credit, it was his inability to explain what had happened to the sum of $25,000.
Did the plaintiff remove the defendant’s case of the Polish property from the Federal Circuit Court proceedings (counterclaim paragraph 6)[30]
[30] I deal with paragraph 5 of the counterclaim below.
I take the reference to ‘removing’ the defendant’s case as a reference to not pursuing the matter before the Federal Circuit Court. The findings I have made above are sufficient to deal with the allegation by the defendant in paragraph 6 of the counterclaim that the plaintiff ‘removed the defendant’s case of the Polish property from the Federal Magistrates Court proceedings’. That is clearly not the case as not only was the Polish property the subject of the Federal Circuit Court proceedings, it was specifically dealt with in the Consent Orders made on 13 March 2015.
To the extent that that allegation is related to or directed at the allegation that Ms Milen forged the defendant’s affidavit, I deal with that matter below.
Did the plaintiff forge the defendant’s affidavit sworn 18 February 2015 and filed in the Federal Circuit Court proceedings (counterclaim paragraph 5)
This allegation concerns the plaintiff crossing out paragraphs from the defendant’s affidavit sworn 18 February 2015. The affidavit is Exhibit DST24 to Mr Stec’s affidavit sworn 6 April 2018.[31] There are a number of passages in Mr Stec’s affidavit sworn 18 February 2015 which have been crossed out, specifically those in paragraph 9 on page 216 of Exhibit P1, paragraph 13 on page 217, paragraph 27 on page 219, paragraph 28 on page 219, paragraph 29 on page 220, paragraph 33 on page 220, paragraph 35 on page 220, paragraph 38 on page 221, paragraph 42 on page 222, paragraph 54 on page 224, paragraph 55 on page 224, paragraph 60 on page 225, paragraph 70 on page 227, paragraph 81 on pages 229-230, paragraphs 97 and 98 on pages 234-236, paragraph 100 on page 237, paragraph 105 on page 237, paragraph 126 on page 242 and paragraphs 146-153 on pages 246-247.
[31] Exhibit P1, 215.
The affidavit was first seen by Mr Stec in this form (that is, with handwritten deletions) when he saw the letter from the plaintiff to the Commissioner dated 21 August 2015 at page 114 of Exhibit D1,[32] specifically that part of the letter at paragraph 1.39.4.
[32] Exhibit DST15 to Mr Stec’s affidavit sworn 6 April 2018.
In the letter to the Commissioner, Ms Milen advises that the defendant’s affidavit sworn 18 February 2015 has various passages crossed out and which were crossed out by her to note the objections taken by Mrs Stec’s counsel during pre-trial discussions.
The fundamental point is that the deletions were on Ms Milen’s working copy of the affidavit only, done by her as a reminder of the objections that Mrs Stec’s counsel had taken.[33] The affidavit with the deletions was never tendered.[34]
[33] Exhibit DST15 to Mr Stec’s affidavit sworn 6 April 2018 [1.39.4]; T285.2 – 287.7.
[34] T288.1 - 288.11.
It is because of those deletions that the defendant alleges the plaintiff forged his affidavit sworn 18 February 2015.
I find there has been no forgery by the plaintiff of the defendant’s affidavit sworn 18 February 2015.
Did the plaintiff’s actions result in detriment to the defendant and was there dishonest and unprofessional representation, fraud and misleading of the Court such that the defendant’s case of the Polish property was removed from the Court proceedings? Did the defendant lose $96,125 constituting half value of the Polish property? (Counterclaim paragraphs 7 and 8)
There are a number of allegations contained within this complaint which is paragraph seven of the counterclaim. Paragraph 8 of the counterclaim claims the sum of $96,125.
Detriment to the defendant resulting from ‘dishonest and unprofessional representation, fraud and misleading of the court’.
It is not entirely clear what the dishonest and unprofessional representation refers to, although I assume it refers to the ‘very important documents’ and Ms Milen initially informing the Federal Circuit Court that the defendant had given her the ‘very important documents’ on the day they were produced in Court.
The allegation of misleading the Court refers to the explanation given by Ms Milen in relation to the ‘very important documents’ that I have dealt with above. As best I can understand, the allegation of fraud relates to the same issue, the alleged forgery, or the question of costs in the Consent Orders or all three.
For the reasons set out above, I do not accept that the plaintiff engaged in dishonest conduct, made an unprofessional representation or committed fraud. To the extent Ms Milen gave the Court wrong information about when she came into possession of the ‘very important documents’, I find that was inadvertent and was immediately corrected upon Ms Milen becoming aware of her error. As I have not accepted that the plaintiff engaged in dishonest conduct nor made an unprofessional representation, nor committed fraud, no question of detriment arises. As to Ms Milen’s error, no detriment flows from that event.
The defendant’s case of the Polish property was removed from the Court proceedings.
In Mr Stec’s affidavit sworn 6 April 2018, at page 21 of Exhibit P1, Mr Stec deals with the topics of the plaintiff not presenting his case of the Polish property and preventing him from presenting his case to the Court.
At paragraphs 106 and 107 of the affidavit, Mr Stec deposes that:
106The plaintiff had produced the untrue Case Outline (DST21) the untrue final Affidavit (DST24) and the untrue Amended Response DST19 by which she removed evidence, confirming the wife’s and my co-ownership of the property, from the Court proceedings.
107During the trial the Plaintiff did not present my case of the Polish property to the Court. The Plaintiff did not examine me in relation to my case of the Polish property and prevented me to present my case to the Court.
Again, there are a number of allegations contained in these two paragraphs.
Paragraph 106
The first is an allegation of an untrue case outline – Exhibit DST21, which is found at Exhibit P1 page 177. This is the case outline for Mr Stec lodged in the Federal Circuit Court and which is said by Mr Stec to be ‘unauthorised’ and ‘pretending to be my case outline’.[35] It commences under the heading ‘ORDERS SOUGHT BY THE HUSBAND’ seeking a declaration in paragraph 1:
That this Honourable Court do declare that the husband and wife do have a ONE HUNDRED PERCENT (100%) equitable interest in the property situated at 22 Opalowa Street, Lodz, Poland and that Piotr Lesnikowski does hold such property on trust for the parties.
[35] Exhibit P1, 13 at [55].
Piotr Lesnikowski was Mr Stec’s brother-in-law.
Ms Milen reported to the Commissioner in the plaintiff’s letter dated 21 August 2015,[36] that Mr Stec was aware that Ms Milen was going to prepare the case outline on his behalf on the basis that she was not happy to present a case outline she had not considered satisfactory, particularly in circumstances where she was to conduct the trial.
[36] See Exhibit P1, 127 [1.47].
Although there is an allegation that the case outline was ‘untrue’, there is no basis established as to why that is the case. I reject Mr Stec’s contention that the case outline filed by the plaintiff was ‘untrue’.
Insofar as there is a reference[37] to an ‘untrue final affidavit,’ Mr Stec’s affidavit sworn 6 April 2018, refers to Mr Stec’s affidavit sworn

18 February 2015, and filed in the Federal Circuit Court.[38] There is nothing to suggest the affidavit was ‘untrue’. It had been drafted by Mr Stec and settled by Ms Milen before being sworn by Mr Stec on 18 February 2015. I have dealt with the paragraphs being crossed out above. I do not accept that by reason of Ms Milen settling the affidavit filed by Mr Stec on 18 February 2015[39] the affidavit became ‘an untrue final affidavit’.
[37] Exhibit P1, 21 at [106].
[38] Exhibit P1, 215, Exhibit DST24, Exhibit P1 p 215.
[39] Exhibit P1, 215, Exhibit DST24.
As to the defendant’s assertion that his amended response was ‘changed’ by the plaintiff, the amended response, found in Exhibit P1 at pp 170-173, was signed by the defendant and filed personally by him. The defendant asserts that the amended response was ‘untrue’. I reject that assertion. It was always open for the defendant to consider the document, to complain to Ms Milen and require it to be changed or refuse to file it. None of those steps were taken.
The amendments to the response made by Ms Milen seem to relate, in part, to the removal of admissions made by Mrs Stec in a response to a Notice to Admit.
Whether Ms Milen’s decision was correct or not, the fact is that the notice to admit had been filed in the Federal Circuit Court along with a response.
Had the matter proceeded to judgment, Ms Milen would have been able to address the Court on the impact of Ms Stec’s response to the Notice to Admit in submissions, provided the response to the Notice to Admit was tendered at some stage. However, since the matter settled, that did not become necessary.
The consequence of the above actions is alleged by Mr Stec to be that Ms Milen removed evidence confirming he and Mrs Stec’s co-ownership of the Polish property from the Federal Court proceedings. There are two answers to that allegation.
The first is that at paragraph 3 of Mr Stec’s case outline,[40] an order is sought by way of declaration:
3.That the wife do retain the beneficial interest in the property situated at 22 Opalowa Street, Lodz, Poland without any claim from the husband and the husband shall do all things to transfer his beneficial entitlement in that property to the wife and the wife shall indemnify the husband in respect thereof.
[40] Exhibit P1, 179, Exhibit DST21.
On page 12 of the case outline,[41] the Polish property is dealt with under the heading ‘Summary of Husband’s Argument in Relation to Various Issues of Dispute’. A significant part of the document which deals with the Polish property then follows.
[41] Exhibit P1, 190.
The second is that in the Consent Orders Mr Stec obtained the benefit of Mrs Stec’s acknowledgment that she had no interest in the Polish property.
Accordingly, it is simply not that the defendant’s case that the Polish property was ‘removed from the Court proceedings’.
I reject the allegations made by Mr Stec in paragraph 106 of his affidavit sworn 6 April 2018.
Paragraph 107
By reason of the matters I have set out above, it is not correct to say the plaintiff did not present the defendant’s case for the Polish property to the Court.
The balance of paragraph 7 of the counterclaim alleges the ‘Polish matrimonial property was removed from the court proceedings’ and ‘no order was made to the matter’.
Insofar as the allegation that ‘no order was made to the matter’, the ‘matter’ being the Polish property, as I have noted above, on 13 March 2015, the parties negotiated Consent Orders[42] which included an order relating to the Polish Property. Paragraph k of the Consent Orders states ‘that there be a declaration that the wife shall have no interest, whether by way of legal registrable entitlement or equitable interest in any asset in Poland.’
[42] Exhibit P1, 311.
During Mr Stec’s closing address I raised this point with him. With no criticism of Mr Stec, it seems he did not understand that the effect of this paragraph of the Consent Orders was to confirm that Mrs Stec had no legal or equitable interest in the Polish property and that if he wished to pursue an interest in it he was at liberty to do so.[43]
[43] Transcript 21 November 2018, T9.25 - 18.21.
It is clear that an order was made in relation to the Polish property and I reject the defendant’s allegations in paragraph 107 of his affidavit sworn 6 April 2018.
Subject to the question of fraud which I deal with in relation to paragraph 9 of the counterclaim below, the defendant’s allegations in paragraph 7 of the counterclaim that he lost $96,125 constituting half value of the Polish matrimonial property, fails.
Did the plaintiff negotiate a consent order related to the Australian property? The plaintiff advised the defendant and the court the negotiated order allowed for no order as to costs – parties cover their costs. The defendant accepted the negotiated order. The court sealed the order showing no party costs. The plaintiff in the letter of 21 August 2015 to the Commissioner says it negotiated the order that the defendant would pay $5,000 costs. Did the plaintiff mislead the court and the defendant by falsely presenting the contents and outcome of the negotiations. In the aftermath of the fraud the defendant paid $5000 costs (counterclaim paragraph 9)
As I have noted, in paragraph 7 of the counterclaim there is an allegation of fraud. That allegation appears to relate to the question of costs arising out of the Consent Orders pleaded in paragraph 9.
Mr Stec complains of the negotiations of 13 March 2015 at paragraphs 112 – 119 of his affidavit sworn 6 April 2018.[44]
[44] Exhibit P1, 22-23.
At paragraph 112, Mr Stec deposes that during the Federal Circuit Court proceedings, Ms Milen proposed negotiations occur in relation to the Australian property. That is not correct because as I have noted, the Consent Orders also dealt with the Polish property.
Mr Stec describes the background to settlement negotiations at paragraph 113 where he deposes that on 24 May 2014, he and Mrs Stec agreed to share the Australian property on a 50/50 basis. He refers to

Exhibit DST30.[45] A consideration of that Exhibit, however, makes it clear that there was no agreement. On 27 January 2015, Mrs Stec was offering, on a without prejudice basis, for Mr Stec to retain the matrimonial property at Huntfield Heights, South Australia for the sum of $80,000.
[45] Exhibit P1, 301.

At paragraph 114, Mr Stec deposes that he instructed the plaintiff he would pay the wife $80,000. He does not depose to when that occurred. He continues that after the negotiations which occurred during the trial in March 2015, Ms Milen told him that Mrs Stec rejected his offer and required $85,000 in return for her 50% equity.
It is apparent from the Consent Orders made 13 March 2015,[46] that the parties agreed that Mr Stec was to pay Mrs Stec the sum of $85,000 in consideration of which Mrs Stec would transfer her interest in the matrimonial property at Huntfield Heights to Mr Stec, such that he would then become the sole registered proprietor.
[46] Exhibit P1, 311.
Subsequently, Mr Stec saw the plaintiff’s letter to the Commissioner dated 21 August 2015. Having read that letter, he formed the view that he had been misled and defrauded during the negotiations. In so doing he relies on paragraphs 1.50.9 and 1.50.10 of the letter, Exhibit DST15.
Those paragraphs read as follows:
1.50.9At the conclusion of Mr Stec’s evidence and before final addresses, the Court indicated that we should have one last attempt to resolve the dispute. There were negotiations which followed. I managed to negotiate a settlement for the husband which was that Mr Stec retain the former matrimonial home, it be transferred to him and that he pay to Mrs Stec the sum of $85,000.00. This sum was made up of half of the equitable value of the former matrimonial home together with $5,000.00 on account of costs. By the terms of the Minutes of Order Mr Stec was entitled to claim the Polish property without any claim from Ms Stec. Draft Minutes of Order were prepared in those terms and Orders were made quite late in the day. After the Orders were made His Honour made the usual comments congratulating the parties for resolving the dispute. His Honour then went on to direct a comment at me as to the fact that I had come into the proceedings late and had done a very good job for Mr Stec. It is my recollection that we did not leave the Court until around 5.30pm. I enclose copy of the sealed Minutes of Order to this effect. In relation to the Polish property, Mr Stec told me that he was going to take that up with a solicitor in Poland.
1.50.10The valuation which was used to calculate the amount of money was agreed to be Ms Stec’s valuation with an additional $5,000.00 to partially cover Ms Stec’s legal costs. I was of the view at the time that this was a reasonable compromise given that the matter did not appear to be going too well from Mr Stec’s perspective. I note also that essentially the settlement figure was only $5,000.00 more that the wife had proposed. I am of the view that the Court would have made costs Order against Mr Stec if it had been asked to do so.
I note that at paragraph 1.50.10 of the plaintiff’s letter, Exhibit DST15, the valuation which was used to calculate the amount of money was agreed to be Mrs Stec’s valuation, with an additional $5,000 to partially cover Mrs Stec’s legal costs.
That is consistent with the letter from Mrs Stec’s solicitors dated

27 January 2015[47] which indicates that if the offer of $80,000 was not accepted, then Mrs Stec would pursue a costs order against Mr Stec.
[47] Exhibit P1, 301, Exhibit DST30.
The amount agreed between the parties as a settlement sum was $85,000 with the Consent Orders confirming each party to bear their owns costs,[48] that is, there would be no separate costs payment.
[48] Exhibit P1, 313, [o].
Mr Stec does not complain about paying $85,000 in accordance with the Consent Orders, his concern is that he thought each party was to bear their own costs but has found out that the sum of $85,000 included a contribution of $5,000 towards the wife’s costs.
Mr Stec was cross-examined in relation to the Consent Orders.[49]
[49] T129.4-131.19.
The position may be summarised in this way. Mr Stec offered to Mrs Stec a total of $80,000 for the former matrimonial home at Huntfield Heights.[50] Following the negotiations, Ms Milen came to him and told him that Mrs Stec did not agree to the sum of $80,000 and instead wanted $85,000. Mr Stec agreed to pay that sum and did so.
[50] T130.35-38.
Mr Stec has since learnt from the letter dated 21 August 2015[51] that the extra $5,000 reflected a contribution to Mrs Stec’s costs.
[51] Exhibit P1, 114, Exhibit DST15.
Mr Stec’s complaint now may be characterised as resulting from either dismay at learning how Mrs Stec’s counsel characterised the additional $5,000, or as an opportunistic attempt to defray his legal costs. I consider it to be the latter.
I dismiss the allegation that Mr Stec was defrauded in some way in relation to the issue of costs by the plaintiff.
Other Evidence
Mr John Bartley
Mr Stec had arranged for Mr Bartley, who is an accountant, to attend the Federal Circuit Court to give evidence about the effect of a power of attorney. Ms Milen made a forensic decision about the running of the trial and decided not to call Mr Bartley as a witness.
Mr Stec called Mr Bartley to give evidence before this Court. It is unclear to me why he was called or what the effect of his evidence is other than to confirm that he had seen a contract authorising Mrs Stec’s brother to sell the Polish property at 11 Listopada Street, Lodz, Poland.
The Power of Attorney is the ‘trust’ document to which Mr Stec refers at page 66 of Exhibit P1. Ms Milen formed the view that the effect of a Power of Attorney and the proper construction of the ‘trust’ document, was a matter for the trial Judge and as I have noted above, did not call Mr Bartley.
Mr Stec makes a generalised complaint about Ms Milen’s decision not to call Mr Bartley, deposing in paragraph 21 of his affidavit sworn 6 April 2018[52] that Mr Bartley’s evidence would have been that Mrs Stec’s brother held the Polish property on trust for Mr and Mrs Stec.[53]
[52] Exhibit P1, 10.
[53] Paragraph 21 speaks of “expertise” and affidavit which is meant to refer to an opinion.
No evidence was adduced about Mr Bartley’s expertise to give an opinion on that topic and no opinion evidence was given by him. Even if Mr Bartley was qualified to give opinion evidence, there was no attempt to qualify him as an expert and it would not have assisted Mr Stec’s case. The evidence Mr Bartley gave does not advance Mr Stec’s case.
Mr Galea
Mr Galea gave evidence by telephone. He confirmed Mr Stec was employed full time by his company, Enviro Arc Design Pty Ltd from 2011 to 2013, and then between 2013 and 2015 on a permanent part-time basis. Mr Stec was again offered full time employment by Enviro Arc Design Pty Ltd in 2015 however Mr Stec was unable to meet the company’s contracted equipment requirements.
There was an issue between the amount of money Mr Stec was earning when working for Enviro Arc Design Pty Ltd. Mr Galea explained that the original weekly sum paid to Mr Stec was $1440.60 whereas the figure referred to in the 2015 proposed contract[54] with Mr Stec was $1596.
[54] Exhibit D8.
Mr Galea’s evidence does not advance the issues in this case nor does it assist Mr Stec’s case in any way.
Negligence
Each of the allegations made in the counterclaim are directed at an allegation of breach of duty of care on the part of the plaintiff in its representation of the defendant although as I have noted, there is no specific pleading of a breach of a duty of care.
I have dealt with each of the allegations in the counterclaim above.
There is little doubt that a solicitor representing his or her client owes a duty of care to the client to conduct the matter in a competent manner such that the solicitor acts in a manner that is widely accepted in Australia by members of the same profession as competent professional practice.[55]
[55] See Civil Liability Act (1936) s 41.
Apart from the provisions of s 41 of the Civil Liability Act to which I have referred, there is also a common law duty of care owed by the plaintiff to the defendant on the basis that the definition of negligence in s 3 of the Civil Liability Act is merely declaratory of the common law and does not exclude the common law.
I have considered the allegations made against the plaintiff which, although not pleaded as such, would constitute the particulars of an allegation that the plaintiff failed to perform the services provided to the required standard of care.
I have rejected each of those allegations. Consequently, there was no breach of duty of care on the part of the plaintiff towards the defendant in the conduct of the defendant’s matter in the Federal Circuit Court.
I observe that even if I am wrong in my conclusion there has been no breach of duty of care, I note that no complaint is made in relation to the Australian property and insofar as the Polish property is concerned, Mrs Stec has agreed in the Consent Orders that she has no interest in the property leaving it open to Mr Stec, if so advised, to pursue any claim for any alleged interest he may have in the Polish property.
In my view, even if the plaintiff had breached its duty of care to the defendant, the defendant has suffered no loss.
Advocates Immunity
The plaintiff has raised the issue of advocates’ immunity however in view of my findings, the question of advocate’s immunity does not arise.
Conclusion
The defendant’s counterclaim is dismissed. I will hear the parties on the question of costs.