Sanossian v Parisi and Associates Pty Limited

[2019] NSWDC 599

District Court

New South Wales

Medium Neutral Citation:	Sanossian v Parisi & Associates Pty Limited [2019] NSWDC 599
Hearing dates:	9, 10 and 11 October 2019
Date of orders:	25 October 2019
Decision date:	25 October 2019
Jurisdiction:	Civil
Before:	Russell SC DCJ
Decision:	(1)   Judgment for the defendant. (2)   Order the plaintiff to pay the defendant’s costs. (3)   Stand the proceedings over to a date to be fixed to deal with:         (a)   any application by the defendant for an indemnity costs order;        (b)   determination of the costs reserved by Judge Letherbarrow SC on 26 July 2019.
Catchwords:	PROFESSIONAL NEGLIGENCE – claim by client against solicitor who acted in Supreme Court proceedings – whether there was a failure by the defendant to give proper legal advice prior to settlement – whether there was a failure by the defendant to give timely advice regarding prospects of success – whether incorrect advice was given by the defendant to settle the proceedings – held: no negligence   FAMILY PROVISION – principles applicable – notional estate – discretionary nature of power to make provision for claimant out of notional estate
Legislation Cited:	Family Provision Act 1982 (NSW) Succession Act 2006 (NSW)
Cases Cited:	Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Category:	Principal judgment
Parties:	Joseph Sanossian (Plaintiff) Parisi & Associates Pty Limited (Defendant)
Representation:	Counsel: J Sanossian (Self-represented) I Griscti (Defendant)   Solicitors: Gilchrist Connell (Defendant)
File Number(s):	2017/224719

Judgment

Background

1. The plaintiff Mr Joseph Sanossian, who drafted his own pleadings and who appeared for himself at trial, sued his former solicitors, an incorporated legal practice. Mr Charles Parisi, the principal of that practice, acted for Mr Joseph Sanossian in two proceedings in the Equity Division in the Supreme Court of New South Wales. Mr Parisi briefed a barrister Mr Salama to advise and appear in those proceedings. The plaintiff, Mr Parisi and Mr Salama all gave evidence. A large volume of documentary evidence was tendered.

2. The plaintiff’s allegation that the defendant was negligent was informed in part by the plaintiff’s own views about the following matters of law:

1. The plaintiff asserted that he was the registered proprietor of a property at Belrose (Belrose), and that no order could be made under the Family Provision Act 1982 (NSW) (FPA) to disturb his sole ownership.

2. The plaintiff and his father had been joint tenants in the property and upon his father’s death, the plaintiff had become the sole owner by survivorship, and the joint tenancy could not be severed by an order under the FPA.

3. The plaintiff asserted that an order could only be made under the notional estate provisions in the FPA, if a party had taken some positive step to deal with or transfer a property with a view to defeating the claim of another person to an interest in the property.

4. There was no need for any provision to be made for the plaintiff’s mother under the FPA, as she already had provision made for her from other sources.

3. The plaintiff held these views about those legal matters not from anything the defendant had advised him. Rather, the plaintiff had reached those views based upon his own research, and opinions expressed to him by another lawyer, who was not instructed in the Supreme Court proceedings. All of the views summarised above were wrong in law. That is dealt with more fully later in this judgment.

Purchase of the Belrose property

4. The plaintiff was born in Syria in 1957. He migrated to Australia in 1977.

5. In April 1979 Belrose was purchased for $76,000. The property was initially purchased by the plaintiff, his father Avedis Sanossian and his brother Shahe Sanossian, as joint tenants.

6. Within a relatively short time Shahe Sanossian gave up his interest in the property, leaving Belrose owned by the plaintiff and his father as joint tenants.

7. The plaintiff’s evidence was that he paid the 10% deposit of $7,600 from his own monies (PX 1, Exhibit B, para 26).

8. There was no money borrowed from a bank. The balance of the funds to settle the purchase of Belrose came from an ANZ Bank account opened by the plaintiff at the Chatswood branch in March 1979. The plaintiff’s evidence was that the first deposit into that account was $22,000. This comprised $20,000 borrowed by the plaintiff’s father from his brother-in-law Mr Nalbandian, and $2,000 of the father’s own money (PX 1, Exhibit B, para 31).

9. The next deposit to that account was the sum of $25,500. The plaintiff’s evidence was that this deposit was funded by $16,000 from the plaintiff’s savings account, $4,500 from another account kept by the plaintiff and a loan of $5,000 from a friend of the father (PX 1, Exhibit B, para 35(i)). Later evidence established that this friend was Mr Krikor Georgian.

10. The next deposit to the ANZ account was for $5,000. The plaintiff’s evidence was that this was a further loan from Mr Georgian (PX 1, Exhibit B, para 35(ii)).

11. The final deposit to the ANZ account was for $18,000. The plaintiff’s evidence was that this was a telegraphic transfer to the account made by his father from Syria (PX 1, Exhibit B, para 35(iii)).

12. A photocopy of the bank book was in evidence (PX 1, Exhibit B, p 22). By the time of the last deposit of $18,000, the ANZ account was in credit for $69,573.40. The next entry in the bank book is a withdrawal of $68,275.66. These funds were used to settle the purchase of Belrose.

13. The plaintiff’s evidence concerning the repayment of the borrowings used to fund the purchase of Belrose was as follows:

1. The $20,000 borrowed from Mr Nalbandian the brother-in-law of the plaintiff’s father (the uncle of the plaintiff) was repaid by his father.

2. The $10,000 (two amounts of $5,000) borrowed from Mr Georgian was repaid by his father.

14. Thus according to the plaintiff the capital contributions to the purchase of Belrose made by the plaintiff were as follows:

Deposit	$7,600
From plaintiff’s savings account	$16,000
From another account of the plaintiff	$4,500
Total	$28,100

15. The evidence of the plaintiff was that the capital contributions made by his father to the purchase of Belrose were as follows (PX 1, Exhibit A, para 11):

Borrowed by Avedis Sanossian from his brother-in-law and later repaid by Avedis Sanossian	$20,000
Initial contribution by Avedis Sanossian	$2,000
Borrowed by Avedis Sanossian from a friend and later repaid by Avedis Sanossian	$5,000
Borrowed by Avedis Sanossian from a friend and later repaid by Avedis Sanossian	$5,000
Telegraphic transfer from Avedis Sanossian	$18,000
Total	$50,000

16. Of the total amount of $78,100 contributed by the plaintiff and his father towards the purchase of Belrose, the plaintiff contributed 36% and his father contributed 64%.

17. The plaintiff lived at Belrose as a single man from the purchase of the property in 1979 until about 1985. The plaintiff’s father and mother lived in Syria until that time. In about 1985 the plaintiff’s mother Shake Sanossian migrated to Australia. The plaintiff’s father remained living in Syria looking after his business interests. From 1985 to 1995 the plaintiff and his mother lived in Belrose. The plaintiff married in 1995. He and his new wife moved out of Belrose and his mother remained living there by herself. The plaintiff’s mother lived by herself between 1995 and 2011 when the property was sold pursuant to a settlement of the Supreme Court proceedings. Thus the plaintiff’s mother had lived at Belrose for 26 years, the first 10 years being a time when mother and son lived in the house, and for the last 16 years the mother lived alone in the house.

18. The plaintiff’s father died in Syria on 21 July 2007. He died intestate. As a result of his death, the interest of the father in Belrose passed to the plaintiff by survivorship. After the death of the father the plaintiff was the sole legal owner of the Belrose property. There was no evidence that Avedis Sanossian had any Australian assets, apart from his joint tenancy in the Belrose property.

19. The plaintiff was still the sole owner of Belrose when the plaintiff’s mother commenced Supreme Court proceedings in early 2009.

The Supreme Court proceedings

20. On 22 January 2019 Joseph Sanossian’s mother Shake Sanossian (the claimant) commenced proceedings against her son in the Equity Division of the Supreme Court of New South Wales, seeking orders under the FPA. The Summons sought provision for the claimant out of the estate and/or notional estate of the late Avedis Sanossian, the husband of the claimant Shake Sanossian. It also sought an extension of time to bring proceedings pursuant to s 16(2) of the FPA.

21. A second proceeding was filed in the Equity Division of the Supreme Court in September 2010. Once again Shake Sanossian was the plaintiff and Joseph Sanossian was the defendant. The relief sought in the Statement of Claim included:

1. A declaration that Joseph Sanossian held all of his interest in the property at Belrose in trust for his mother Shake Sanossian.

2. Consequential orders for the transfer of Belrose to Shake Sanossian.

3. An order that an account be taken of all dealings by Joseph Sanossian with an amount of $130,000 entrusted to him by his mother and father.

4. Interest, costs and other consequential orders.

22. The FPA Summons and the Statement of Claim (the trust claim) were listed for directions before a Registrar in October 2010 and were consolidated.

23. A Defence to the FPA proceedings was filed in November 2010. Shake Sanossian served her evidence in the FPA proceedings in February 2011. Her solicitors responded to a request for particulars made by Mr Parisi, in February 2011. Mr Parisi briefed Mr Salama of counsel in March 2011. In July 2011 the solicitor for Shake Sanossian served the Court Book.

24. In July 2011 Justice Rein heard a Notice of Motion by Shake Sanossian seeking leave to amend her FPA Summons. His Honour granted leave to amend.

25. While the original Summons had sought provision from the estate and/or the notional estate of the late Avedis Sanossian, the Amended Summons made it plain that an order was sought under s 23 of the FPA designating as notional estate an unencumbered one-half share in Belrose and an order that the one-half share in Belrose be vested in and transferred to Shake Sanossian free of any encumbrance.

26. After that amendment, the claim of Shake Sanossian had two limbs. The first was a claim under the FPA, which included a claim that the one-half share of the father should be designated as notional estate under the FPA, and vested in Shake Sanossian. The second limb to the claim was the trust claim, to the effect that Joseph Sanossian held Belrose upon trust for his mother Shake Sanossian.

27. In the Supreme Court proceedings the claimant relied upon the following affidavits:

1. Affidavit of Shake Sanossian sworn 22 June 2009 – this was not put into evidence in these proceedings.

2. Affidavit of Shake Sanossian sworn 14 February 2011 – this affidavit is at pp 58-66 of Exhibit CP to the affidavit of Mr Parisi sworn on 29 April 2019 (DX 1).

3. Affidavit of Shake Sanossian sworn 12 July 2011 – this was the administrator’s affidavit and was not put into evidence in these proceedings.

4. Affidavit of Shahe Sanossian (brother of Joseph Sanossian) sworn 4 August 2009 – this affidavit was not put into evidence in these proceedings.

5. Affidavit of Shahe Sanossian sworn 14 February 2011 – this affidavit is at pp 67-72 of Exhibit CP to the affidavit of Charles Parisi sworn 29 April 2019 (DX 1).

6. Affidavit of Anahid Khouladjian (the plaintiff’s aunt) sworn 12 February 2011 – this affidavit was not put into evidence in these proceedings.

7. Affidavit of Abraham Nalbandian (the plaintiff’s uncle) sworn 12 February 2011 – this affidavit is at pp 73-80 of Exhibit CP to the affidavit of Charles Parisi sworn on 29 April 2019 (DX 1).

8. Affidavit of Abraham Nalbandian sworn 12 July 2011 – this affidavit was not put into evidence in these proceedings.

28. In the Supreme Court proceedings Joseph Sanossian relied upon two affidavits:

1. Affidavit of Joseph Sanossian sworn 25 February 2010 – this affidavit is Exhibit A to the affidavit of Joseph Sanossian sworn 21 December 2018 (PX 1) in these proceedings.

2. Affidavit of Joseph Sanossian sworn 25 March 2011 – this affidavit is Exhibit B to the affidavit of Joseph Sanossian sworn 21 December 2018 (PX 1) in these proceedings.

29. Thus this court did not have all of the evidence upon which Shake Sanossian relied in the Supreme Court proceedings. In the three affidavits which were tendered, the following allegations were made:

1. Shake Sanossian denied that she and her husband Avedis Sanossian had been separated.

2. The car which Joseph Sanossian said that he left in Syria for the benefit of his father had been purchased by Shake and Avedis Sanossian for use by the family.

3. Joseph Sanossian did not work when he was in Syria as he was a student at university.

4. Shake Sanossian denied that Joseph Sanossian had a small leasehold retail shop in Syria.

5. An import licence, allegedly held by Joseph Sanossian, was not in any event a valuable asset and could easily be obtained in Syria by any person who wanted to be involved in import and export.

6. Joseph Sanossian was always asking Avedis and Shake Sanossian to send him money from Syria. They paid for his flight to Australia and for all of his living and education costs while he was in Australia.

7. It was not possible for Joseph Sanossian to have contributed $15,000 towards the purchase price of Belrose, as he was only a student who was financially dependent on his father and who had his living and education expenses paid by his parents.

8. Avedis Sanossian travelled to Australia to purchase Belrose to set up “a pathway for our family to immigrate to Australia”.

9. $130,000 was given to Joseph Sanossian by his parents to invest and to pay a return to his parents. It was not a gift.

10. Avedis Sanossian wanted to buy a house for the family, that Joseph Sanossian could live in for a while until the family migrated to Australia.

11. Avedis Sanossian borrowed $20,000 from his brother-in-law Abraham Nalbandian and the rest from a friend Krikor Georgian. Avedis Sanossian repaid these monies.

12. When Shake Sanossian came to Australia Belrose was empty. She and her husband furnished Belrose using joint monies they had brought from Syria.

13. Shahe Sanossian was asked by his father to transfer $130,000 to Joseph Sanossian , but it was not a gift and was transferred to Joseph to invest on behalf of his parents.

14. Abraham Nalbandian travelled to Syria in 1977, and arranged for Joseph Sanossian, who was then a student at university, to obtain a visa for travel to Australia, so that Joseph Sanossian could avoid compulsory military service in Syria.

15. Abraham Nalbandian arranged for Joseph Sanossian, who was required to leave Australia when his visa ran out, to marry the daughter of a friend Krikor. Joseph and the daughter married, but were divorced shortly afterwards.

16. Avedis Sanossian told Abraham Nalbandian that he was going to buy a house for the family and that he had $50,000 in cash to do so.

17. Avedis Sanossian asked Abraham Nalbandian for a loan of $20,000 to help him buy Belrose.

18. Avedis Sanossian told Abraham Nalbandian that he got the rest of the money from Krikor Georgian, who is a cousin of Mr Nalbandian. Krikor Georgian confirmed to Mr Nalbandian that he had lent money to Avedis Sanossian to assist in the purchase of Belrose.

19. When Abraham Nalbandian needed his money back in 1979, he asked Avedis Sanossian for repayment and he was sent $20,000 straight away by bank transfer.

20. Abraham Nalbandian was aware that Avedis and Shake Sanossian had sent money to Joseph Sanossian to enable him to buy properties at Harris Park and at Brookvale.

30. By the time the Supreme Court proceedings were listed for hearing before Justice Sackar on 25 July 2011 the battle lines were clearly drawn. Mr Salama, as counsel for Joseph Sanossian in the Supreme Court, prepared a Statement of Issues for determination (PX 7 in these proceedings). He identified the issues in the Supreme Court proceedings as follows:

1. Was the Belrose Property purchased by the Defendant (Joseph Sanossian) with his own funds and for his own benefit?

2. Who contributed to the purchase price of the Belrose Property and in what portions, if any?

3. Did the deceased intend to leave as a gift his share in the Belrose Property by virtue of what he owed to the Defendant?

4. Does the Defendant hold any share in the Belrose Property, if any, for the benefit of the Plaintiff?

5. Was the $130,000.00 paid to the Defendant held on trust for the Plaintiff?

6. Was there an oral agreement prior to the deceased’s death such that the Defendant would hold the Belrose Property on trust for the Plaintiff?

7. What was the agreement, if any between the deceased and the Defendant regarding the purchase and ownership of the Belrose Property?

8. Has adequate provision been made for the Plaintiff?

9. Is the Plaintiff a person who currently has needs?

10. Is the Plaintiff entitled to any relief in the nature of an imposition of a trust, constructive or otherwise over the Belrose Property?

11. Was the sum of $130,000.00 given to the Defendant a gift or a loan?

31. Joseph Sanossian denied most of the allegations made by the claimant and her witnesses in the Supreme Court proceedings. He made this denial in his affidavits in these proceedings and again in his oral evidence to this court. His evidence in relation to the capital contributions to the purchase of Belrose has already been recited above.

32. As can be seen from the 11 issues identified by counsel for Joseph Sanossian in the Supreme Court proceedings, the resolution of many of the issues depended upon whether Justice Sackar believed Joseph Sanossian, or believed the claimant and her witnesses. After determination of those factual issues, there were legal issues to be determined, including the FPA claim and the trust claim. In cases which involve events which happened many years ago, and where so many arrangements have been made verbally and informally, rather than by documentation, the result of any litigation cannot be predicted beforehand with any certainty.

33. Mr Salama, as counsel for Joseph Sanossian in the Supreme Court, turned his mind on several occasions to these issues, and gave advice regarding negotiation and settlement.

Advice given by Mr Salama

34. Mr Francois Salama swore an affidavit on 29 April 2019 (DX 2). He was admitted as a legal practitioner in 2005 and came to the Bar in 2006. He was first briefed for Joseph Sanossian on 6 October 2010 to appear at a directions hearing before the Registrar in the Equity List in the Supreme Court. The letter of Mr Salama reporting back to Mr Parisi concerning that appearance was dated 6 October 2018 and is to be found at pp 3-5 of Exhibit FS to DX 2.

35. On 29 March 2011 Mr Salama received a brief from Mr Parisi to advise and appear. On 7 July 2011 he was informed that the matter was to be listed before Justice Sackar as Shake Sanossian wished there to be a directions hearing.

36. On 7 July 2011 Mr Salama sent an email to Mr Parisi concerning a Calderbank letter dated 30 June 2011 received from the claimant’s solicitors. His email said:

“I have perused and considered the attached letters/correspondence to update my Brief and in particular I note the Calderbank Letter of 30 June 2011. I have had regard to the offer contained therein for the Defendant to transfer a 50% share in the Belrose Property (and the alternative offer regarding the sale) and advise that given general principles of intestacy the Plaintiff is not only an eligible person with needs, but no (or very limited) provision has been made for her.

In my opinion, pursuant to the Succession Act 2006 (NSW) it is my opinion that little or no provision has been made for the Plaintiff as the spouse of the deceased and that the Court in circumstances such as this will definitely make some provision. The 50% share sought in the Plaintiff’s Calderbank Letter is the minimum the Plaintiff can be expected to receive by way of a Court Order: Singer v Berghouse [references omitted]. In the Premise, it is my opinion the Defendant ought to accept the offer as contained in the Offer of Compromise dated 30 June 2011.”

37. Mr Sanossian gave evidence that this advice of Mr Salama was not conveyed to him at that time. Mr Parisi could not recall it being conveyed to Mr Sanossian. I accept the evidence of Mr Sanossian in this regard.

38. On 13 July 2011 Mr Parisi provided Mr Salama with a copy of the Court Book. On 14 July 2011 the FPA proceedings and the trust claim proceedings came before Justice Rein for the purpose of a Notice of Motion filed by Shake Sanossian seeking leave to file an Amended Summons. The proposed amendment is summarised above. Mr Salama appeared before Justice Rein on 14 July 2011. Before Justice Rein there were discussions between Mr Salama and counsel for the claimant, which resulted in Short Minutes of Order, in effect allowing the proposed amendment. Mr Salama’s letter reporting back to Mr Parisi is to be found at pp 28-32 of Exhibit FS to DX 2. His letter confirms that he advised that there was little prospect of Joseph Sanossian successfully opposing the orders sought for amendment of the pleadings.

39. In that letter, under the heading “Advice”, Mr Salama wrote to Mr Parisi as follows:

“I confirm my advice given in conference after attending at Court that the Defendant should seriously consider settling these matters before the final hearing. The basis for this opinion is that clearly the Plaintiff is entitled to have adequate provision made for her.

Should the court refuse to accept the defendant’s evidence and version of events as being untruthful or not accurate, the Court is most certainly entitled to make an order granting the Plaintiff some form of relief.”

40. The Advice section of the letter then set out the possible orders which could be made and advised that Mr Parisi should prepare an Offer of Compromise and a Calderbank letter in the terms discussed in conference. He said:

“It is my opinion that at the very least, an offer should be made granting the Plaintiff a life estate in the Belrose Property, alternatively at least a 50% legal interest in the title of the property, or alternatively, the payment of money to the plaintiff for the purposes of being able to procure other alternative forms of accommodation.”

41. The plaintiff gave evidence that the advice of Mr Salama contained in his letter dated 14 July 2011 was not conveyed to him at this time. Mr Parisi could not recall whether it was conveyed to Mr Sanossian. I accept the evidence of Mr Sanossian that this particular advice was not conveyed to him at that time by Mr Parisi.

42. In his affidavit Mr Salama gave no evidence concerning a conference with the plaintiff held towards the end of the week before the hearing due to commence on 25 July 2011 (a Monday). In his affidavit Mr Parisi gave evidence that he conferred with Mr Sanossian on 20 July 2011 when Mr Sanossian swore a further affidavit for the Supreme Court proceedings.

43. In his affidavit sworn on 21 December 2018 (PX 1) Mr Sanossian said that on 21 July 2011 Mr Salama advised him during a lengthy conference in his office of the advice which Mr Salama had given to Mr Parisi in his previous emails. Mr Sanossian also said that Mr Salama advised him to accept the claimant’s offer of settlement in the Supreme Court proceedings because “I had low chances to succeed and he could not do better even after giving lot of thoughts to the matter, and he added that it could be words [sic: worse]” – para 30(d) of PX 1.

44. Further, Mr Sanossian gave evidence that Mr Salama was satisfied that his advice was right and that he could not do much to improve the situation (PX 1, para 30(e)). Mr Sanossian annexed to his affidavit a copy of an email which he sent to Mr Parisi after the conference with Mr Salama (PX 1, annexure 21, p 41). In that email Mr Sanossian said to Mr Parisi that he had spoken with Mr Salama that day (21 July 2011) and “Today he sounded like defeated”. In the email Mr Sanossian recorded his understanding of Mr Salama’s reasons for his opinion (and Mr Sanossian’s own comments) as follows:

“1 – The house can be assumed as family home. What about if she was a tenant? Her home and family home was in Syria.

2 – She was still married. I think she can call herself anything.

3 – She spent all her money and has no money. So I am responsible for it.

4 – She wants money, home for living is not enough.

5 – There is claim for constructed trust. I explained to him that there was no [trust] between me and anybody and specially after 1994.”

45. Mr Sanossian concluded his letter to Mr Parisi as follows:

“There is no point to go to hearing if we are not ready or I do not know where I am standing in this matter. Please give me your opinion.”

46. While Mr Salama and Mr Parisi cannot specifically remember a conference with Mr Sanossian at that time, I find that in some fashion (whether in conference or by telephone) Mr Sanossian was informed, at the latest by 21 July 2011, of the pessimistic opinion and advice of Mr Salama regarding prospects of success. I have already found that I accept the evidence of Mr Sanossian that the written opinions and advices of Mr Salama, contained in the emails dated 7 July 2011 and 14 July 2011, were not conveyed on those dates by Mr Parisi to Mr Sanossian.

47. Mr Sanossian gave evidence that on 22 July 2011 Mr Parisi sent an email saying that he would talk to Mr Sanossian later in the day (PX 1, para 44(c)).

48. Mr Sanossian gave the following evidence (PX 1, para 44) concerning a conversation with Mr Parisi later on Friday, 22 July 2011:

“(d)   At the meeting, Parisi confirmed to me Salama’s previous day advices, that I had low chances of success in the court proceedings and the best option for me was either pay or sell the Belrose property and pay to the claimant. Then Parisi suggested to me to pay the claimant $350k and keep the Belrose property because he said that

‘in these days $350k is not much to buy a house’. And

(e)   I responded by saying that the sale of the Belrose property was and is out of question and I never suggested the selling of the Belrose property at any time to any person. And

(f) I asked Parisi the reasons for telling me now of having low chances of success. Parisi responded that he had told me before and the reasons he told me are in my SOC Clause [25]. And

(g)   Those reasons were known to Parisi since his engagement with my cases through my briefs, direct discussions and from court submissions and he had no issues with them as he stated in Annexure ‘3’. And then

(h)   I raised to Parisi and Salama the inconsistencies in the claimant’s allegations such as $50k claim that the deceased brought to Sydney to buy the Belrose property, which was refuted in my affidavits in Exhibits [A]&[B] alongside with many other allegations. Parisi and Salama immediately dismissed all of my arguments as being irrelevant to my cases. And

(i)   There were no notable discussions afterwards about the activities, processes or any preparation required by me for Monday hearing day.”

49. I accept that evidence given by Mr Sanossian. While neither Mr Parisi nor Mr Salama could directly recall those matters, it is highly likely that there would have been a conference at the end of the week prior to the commencement of the Equity proceedings, and it is highly likely that prospects of success and settlement would have been discussed at such a meeting. Further, the theme of low prospects of success and the need to settle, which according to Mr Sanossian was discussed at the meeting, was consistent with the advice given to Mr Sanossian earlier in the week by Mr Parisi, and with Mr Salama’s previous email written advices.

50. Mr Salama gave the following evidence in paras 23-25 of his affidavit (DX 2):

“23.    On 25 July 2011 I attended the Supreme Court of New South Wales to appear at the hearing of the FPA and the Equity Proceedings before Justice Sackar. Mr Parisi instructed me at the hearing. Mr Sanossian attended the hearing in person.

24.   I recall the following from the hearing day, noting I have used my best recollection and make such qualification, as candidly and frankly as I possibly can:

(a)   His Honour encouraged the parties to talk in an attempt to settle the matter. Both Mr Finnane of Counsel for the Plaintiff and I agreed to do so.

(b)   His Honour gave the parties time to discuss a settlement that both parties could live with, given the dispute involved a mother and son. Most of the morning was taken up with interchange, offers and counter offers between Mr Finnane and me.

(c)   Mr Sanossian was present when Mr Parisi and I were conferring. Mr Sanossian, Mr Parisi and I conferred about the different options and outcomes that could eventuate. At the time of swearing this affidavit, I do not have a specific recollection of each of those discussions, referrable to each and every offer and counter-offer. I am firm on my recollection, that Mr Sanossian was involved in the discussions with Mr Parisi and had those discussions, if not all of them, in my presence.

(d)   Mr Sanossian initially questioned His Honour’s invitation to discuss the matter in an attempt to settle the matter. 1 explained to Mr Sanossian that His Honour’s encouragement to resolve the matter was primarily so the parties could control the outcome. Mr Sanossian appeared to me to understand this and was accepting of the process.

(e)   Mr Sanossian throughout the day, expressed his reluctance to want to settle the matter, primarily for emotional reasons, relating back to historic disputes that he had had with his mother and previous discussions he had had about what he believed was an agreement he had with his deceased father. I recall giving advice about the operation of the family provision claim and what the effect of that legislation meant, in particular, what the legislation empowered the Courts to do.

(f)   Mr Sanossian expressed his annoyance that the legislation permitted the Court to effectively rewrite a will. Notwithstanding this, Mr Sanossian appeared to accept my advice, and he gave instructions to agree to the settlement set out in the Short Minutes of Order.

25    Agreement was reached in the FPA proceedings and the Equity Proceedings on or around lunch time. I cannot specifically recall if the Short Minutes of Order were handed up before lunch, or at or around 2PM. I recall that the Short Minutes of Order were signed by Mr Sanossian. The handwriting on the Short Minutes of Order was written by me. I recognise the handwriting and I recognise the fountain pen scripting, as this is my invariable practise when making amendments, drafting documents at Court and my general practice, especially when I am having clients execute documents confirming settlements that affect them.”

51. The Short Minutes of Order by which the Supreme Court proceedings were settled were in evidence as pp 41-44 of Exhibit FS to DX 2. The Short Minutes were signed by Mr Sanossian personally. They provided for the trust claim proceedings to be dismissed with no order as to costs. In the FPA proceedings, leave was granted pursuant to s 16(2) of the FPA to bring the proceedings. Pursuant to s 23 of the FPA an unencumbered one half share in Belrose was designated as notional estate of the late Avedis Sanossian. Provision for Shake Sanossian was made out of the notional estate by payment to her of one half of the nett proceeds of sale of Belrose. Any mortgage or other encumbrance on the property was to be discharged from the half share of Mr Sanossian in the property. Each party was to pay their own costs. The Short Minutes also set out a mechanism for the sale of Belrose.

Findings of Fact

52. The findings of fact set out in paras 4-19 above concerning the purchase of Belrose all come from the plaintiff’s own evidence and are uncontroversial.

53. The findings of fact set out above in paras 20-30 above come from the Supreme Court documents tendered in this case and are uncontroversial.

54. The findings of fact set out above in paras 34-51 above in relation to the advice given at various times by Mr Salama come from his evidence and copies of his emails and letters which are in evidence. I accept his evidence.

55. I pause to observe that the emails and letters by Mr Salama to Mr Parisi concerning court appearances, and his written advices, are clear, concise, and expressed in admirably plain language. As explained below, his advices have the added advantage of being both prudent and correct.

56. In paras 37, 41, 46 and 49 above I have also recorded my acceptance of the evidence of Mr Sanossian, who said that he was not told by Mr Parisi of the views of Mr Salama concerning prospects of success and settlement, until the end of the working week before the hearing due to start on 25 July 2011.

Family Provision Act 1982

57. While at various times both Mr Parisi and Mr Salama referred to the Shake Sanossian’s FPA proceedings as having been brought under the Succession Act 2006 (NSW), both were aware at the time of their advice to Mr Sanossian to settle that the FPA, and not the Succession Act, applied. Schedule 1 cl 11 of the latter Act made the FPA the applicable legislation, as Avedis Sanossian died before the commencement of the Succession Act.

58. The claimant Shake Sanossian fell within the definition of “eligible person” contained in s 6 of the FPA. Section 7 of the FPA provides as follows:

“7 Provision out of estate or notional estate of deceased person

Subject to section 9, on an application in relation to a deceased person in respect of whom administration has been granted, being an application made by or on behalf of a person in whose favour an order for provision out of the estate or notional estate of the deceased person has not previously been made, if the Court is satisfied that the person is an eligible person, it may order that such provision be made out of the estate or notional estate, or both, of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person.”

59. By s 9(1) of the FPA, the court must first determine in the case of certain eligible persons whether, having regard to all the circumstances of the case, there are factors which warrant the making of the application. However such a finding is not required where the claimant is a spouse of the deceased. By s 9(2) of the FPA, the court shall not make an order under s 7 in favour of an eligible person out of the estate or notional estate of a deceased person unless it is satisfied that the provision (if any) made in favour of the eligible person by the deceased person, either during the person’s lifetime or out of the person’s estate, was inadequate for the proper maintenance, education and advancement in life of the eligible person.

60. As the High Court explained in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 211-212, s 9(2) requires the trial judge to make a discretionary decision, and on appeal any appellate court must show restraint in disturbing such evaluative decision by a primary decision-maker.

61. Section 9(3) provides a non-exclusive list of the matters which the court may take into consideration in determining what provision, if any, ought to be made. The court may take into consideration:

“(a) any contribution made by the eligible person, whether of a financial nature or not and whether by way of providing services of any kind or in any other manner, being a contribution directly or indirectly to:

(i) the acquisition, conservation or improvement of property of the deceased person, or

(ii) the welfare of the deceased person, including a contribution as a homemaker,

(b) the character and conduct of the eligible person before and after the death of the deceased person,

(c) circumstances existing before and after the death of the deceased person, and

(d) any other matter which it considers relevant in the circumstances.”

62. By s 16(1) of the FPA, an application in relation to a deceased person must be made within 18 months after the death of the deceased person. Section 16(2) of the FPA gives the court a discretion to extend such time.

63. Part 2 Div 2 of the FPA deals with notional estate. This is a very difficult concept for non-lawyers to understand. In effect, it allows the court to take into account, and make orders against, property which is not in law part of the estate of the deceased person, but which has been in the ownership or control of the deceased person at some time prior to their death. Section 22 deals with prescribed transactions. By s 22(1) a person shall be deemed to enter into a prescribed transaction if the person does or omits to do any act, as a result of which the property becomes held by another person and full valuable consideration for doing or omitting to do an act has not been given.

64. Section 22(4) provides a non-exhaustive list of prescribed transactions. The second of these is contained in s 22(4)(b) which says that a person is deemed to have omitted to do an act by:

“(b) holding an interest in property which would, on the person’s death, become, by survivorship, held by another person (whether or not as trustee) or subject to a trust, the person is entitled, on or after the appointed day, to exercise a power to prevent the person’s interest in the property becoming, on the person’s death, so held or subject to that trust but the power is not exercised before the person ceases (by reason of death or the occurrence of any other event) to be so entitled.”

65. In short, if property is held by joint tenants, and action is not taken to sever the joint tenancy prior to the death of one of the owners, that failure to act can constitute an omission to do an act, which results in a deemed prescribed transaction. The obvious aim of s 22(4)(b) is to bring back into a person’s estate an interest as joint tenant in a property held prior to death, so that it can be distributed for the benefit of an eligible person.

66. As previously recited, the original Summons and the Amended Summons both made reference to provision being made out of notional estate. The Amended Summons made it plain that the proposed notional estate was the half interest of Avedis Sanossian in the joint tenancy of Belrose.

67. In para 2 of this judgment, I set out the fixed views held by the plaintiff concerning four matters of law. It can be seen that the first three beliefs of the plaintiff about matters of law are incorrect, having regard to the provisions of the FPA outlined above. That is because:

1. In spite of the plaintiff being the sole registered proprietor of Belrose, an order can be made under the FPA affecting his interest in the property.

2. While it is correct that the FPA cannot sever a joint tenancy (as said many times by the plaintiff during his evidence), after the death of Avedis Sanossian there was no joint tenancy in any event. The effect of an order for notional estate under the FPA would not be to sever the joint tenancy, but to recognise that Avedis Sanossian omitted to act to sever the joint tenancy.

3. It is not necessary for the court to come to the view that a transaction has been entered into with a view to defeating the claim of some other person. The failure to sever the joint tenancy, prior to death, is entirely innocent and is an omission rather than an act. The sweep of the FPA in relation to prescribed transactions and notional estate is much broader than the scope attributed to it by Mr Sanossian.

68. As to the fourth matter recorded in para 2 above, which is whether Shake Sanossian demonstrated a need for provision to be made under the FPA, that is a matter within the discretion of a trial judge hearing such an application. In these proceedings, it is impossible to make any firm assessment of the outcome on that issue, particularly as not all of the evidence in the Supreme Court proceedings was put before this court. However, I do note the view of Mr Salama, a counsel experienced in these matters, that there was evidence capable of satisfying a judge that no provision, or inadequate provision, had been made for Shake Sanossian from the estate of the late Avedis Sanossian, and that it was likely that provision would be made for her by court order.

The Trust Claim

69. I have recited above the plaintiff’s own evidence about the provision of the capital contributions which funded the purchase of Belrose. The analysis based on the plaintiff’s own evidence shows that the plaintiff contributed 36% of the purchase price and his father Avedis Sanossian contributed 64%.

70. On that basis alone, there is an arguable case for a constructive trust to be imposed upon Joseph Sanossian, arising from the substantial capital contribution made by Avedis Sanossian to the purchase price. No suggestion could be entertained that the contribution of Avedis Sanossian was a gift to his son, as Avedis Sanossian became one of the registered proprietors on the title to the property.

71. Thus on the plaintiff’s own evidence, the case for a constructive trust was strongly arguable. Where two persons contribute to the purchase of property which is conveyed to them in their joint names, the equitable presumption is that they hold the legal estate for themselves as tenants in common in shares proportionate to their contributions unless the contributions are equal – Calverley v Green [1984] HCA 81; (1984) 155 CLR 242.

72. Of course if Shake Sanossian’s evidence, to the effect that Joseph Sanossian never contributed to the purchase price as he was a student financially dependent on his parents, was accepted by Justice Sackar then the claim for a constructive trust over the entire property was strongly arguable. As Mr Salama correctly advised Mr Sanossian, the outcome in the Supreme Court proceedings could have been worse than the settlement offer made by the claimant. So much depended upon who the trial judge believed.

73. Whether the imposition of a trust arising from conversations between the parties was also arguable is not able to be determined, as not all of the evidence filed in the Supreme Court proceedings has been put before this court. Suffice it to say that on the limited evidence from the Supreme Court tendered in this case, there were conversations which would be relevant to the argument for the imposition of such a trust.

Liability

74. In para 32 of the Statement of Claim the plaintiff pleaded 15 particulars of negligence. Some of those particulars are expressed in confusing terms, which is not surprising given that the plaintiff drafted his own pleading. During the course of giving oral evidence, I asked the plaintiff to tell me what he said the defendant did wrong. His answer was less than clear. He said that he was not expecting the sale of the property. He said that the defendant “didn’t follow the rules of property”. He said that he lost confidence in his lawyers when they told that him they “can’t defend the case”.

75. In oral submissions the plaintiff said that the trust case was dismissed, and “everything related to that matter”. While it is correct that the trust case was dismissed, this was an order made by consent, in the context of the settlement of the FPA proceedings and the trust proceedings.

76. The plaintiff submitted that no evidence was served with the original FPA Summons. That is so, but by the time of the hearing many affidavits had been served for Shake Sanossian.

77. In submissions the plaintiff said that 21 July 2011 was the first time he was told that his case had problems and that this would lead to the house being sold. He said that three of the witnesses for Shake Sanossian knew nothing about it. He said that his mother knew nothing about the arrangement he had with his father. He said that in relation to the trust claim relating to the lump sum to be invested, he had “no case for me to answer”.

78. In oral submissions the plaintiff said that there was no such thing as prescribed transactions in 1979 when the house was bought. He also said that the whole reason for prescribed transactions being in the FPA was “where there has been avoidance – something done to keep people from the property”.

79. The plaintiff submitted that he had his name on a document (referring to the registered title) and that Shake Sanossian and her witnesses only had evidence of things that people said.

80. The plaintiff said in submissions that payment of 50% of the sale proceeds to the claimant meant that he had to sell the house. He wanted his mother to take a life tenancy, and for him to retain the entire interest in the property. The evidence in this regard was that the proposal for Shake Sanossian to take a life tenancy was put to her, and rejected. In the light of the serious disputes between family members, this was understandable. No lawyer can force the other side to accept an offer of settlement.

81. The plaintiff submitted that there was no evidence from his father about the property. He said - your name is on the property, and you pay the outgoings, and then suddenly it is said that the property was held on trust.

82. The plaintiff said in submissions that he had proposed a good solution. His mother was 70 years old and he was offering that she could stay in the property for her lifetime. He asked “why not say that to the other side?” The evidence shows that such an offer was put to Shake Sanossian and was rejected.

83. The plaintiff said in submissions that he had a piece of paper saying he was the owner. In those circumstances “how can another person say I am not the owner?”

84. The plaintiff submitted that the settlement was not ideal and beneficial for both sides. He said “my team did not help me by selling the property”.

85. The plaintiff submitted that if his lawyers had told him two weeks before the hearing that the case had problems, he could have retained someone else to run the case.

86. It is obvious from the above summary of the plaintiff’s submissions, that he had fixed, and wrong, views about many matters of law. Counsel for the defendant attempted to assist the court by providing a written outline of submissions (MFI 4). In relation to liability, those submissions said:

“18.   It is agreed that the defendant was retained to act by the plaintiff in respect of the FPA proceedings and the equity proceedings over the period of July 2010 to July 2011.

19.   The defendant acknowledges the existence of a duty to exercise reasonable care and skill in the provision of services to the plaintiff in accordance with the retainer.

20.   This duty is both an implied term in the retainer and a duty of care in tort.

21. Breach must be considered through the prism of s 5B of the Civil Liability Act 2002 (NSW) (CLA). This section applies equally to claims in contract and tort: s 5A CLA.

22. S 5B(1) provides:

(1) A person is not liable for harm caused by that person’s fault in failing to take precautions against a risk of harm unless —

(a)   the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and

(b)   the risk was not insignificant; and

(c)   in the circumstances, a reasonable person in the person’s position would have taken those precautions.

23.   It is necessary, therefore, to identify the relevant risk.

24.   The plaintiff’s complaints in respect of Mr Parisi appear to be that he failed to give proper legal advice prior to settlement, failed to give timely advice regarding prospects and the advice to settle the action was incorrect.

25.   The relevant risk would be that by reason of Mr Parisi’s advice, or omissions in respect of advice, the plaintiff entered into a settlement which was against his interest.”

87. Given the broad and discursive nature of the particulars of negligence in the Statement of Claim, I accept the submissions of counsel for the defendant set out above in relation to legal issues concerning liability. In particular, I accept the submission that the plaintiff’s complaints can be characterised as:

1. a failure by the defendant to give proper legal advice prior to settlement;

2. a failure by the defendant to give timely advice regarding prospects of success; and

3. incorrect advice was given by the defendant to settle the action.

88. I find that there was no failure by the defendant to give proper legal advice prior to settlement. I find that the advice given by the defendant to settle the Supreme Court proceedings was good advice, and was not incorrect.

89. On the plaintiff’s own evidence regarding the capital contributions to the purchase of Belrose, the claimant’s trust claim was arguable and could have succeeded. Shake Sanossian’s FPA claim could also have succeeded, given that there was no estate left by Avedis Sanossian in Australia and no provision made by him for his widow. Shake Sanossian was a 70 year old woman who only had a pension, and who had lived in Belrose for 26 years. The Supreme Court could well have come to the view that it was appropriate for provision to be made for her, and that the only way to make such provision would be by designating the half share as joint tenant of Avedis Sanossian in Belrose as notional estate, and transferring that to the claimant. I have already referred to the fact that a decision under the FPA is a discretionary judgment, and one which is very hard to overturn on appeal.

90. Against that background the advice given by Mr Salama, and relayed by Mr Parisi to Mr Sanossian, was sound and realistic advice. It was based upon a proper understanding of the law and consideration of all of the affidavit evidence filed by the parties in the Supreme Court proceedings.

91. As to the failure by the defendant to give timely advice regarding prospects of success, I have recorded my findings above. When Mr Salama gave advice from early July onwards that Mr Sanossian had low prospects of success, and that the action should be settled by a 50/50 split of the property, it was unfortunate that those matters were not conveyed by Mr Parisi to Mr Sanossian. However, even if they had been conveyed, the most was said by Mr Sanossian is that he could have terminated the retainer of Mr Parisi and Mr Salama, and obtained new representation. Given the conclusions reached above in relation to the correctness of the advice tendered by Mr Parisi and Mr Salama to Mr Sanossian, any competent new lawyer would have come to the same conclusion that they did. In any event, Mr Sanossian called no expert evidence in this case to the effect that the advice was wrong in any way. Thus even if there was a failure by Mr Parisi to promptly convey the views reached by Mr Salama, that did not cause Mr Sanossian any loss.

92. The proposal by Mr Sanossian for his mother to remain in Belrose as a life tenant was put more than once to the other side and rejected. Once that was the position of Shake Sanossian, the only means of settlement was the offer originally put on behalf of the claimant, for the property to be sold and the proceeds divided 50/50, with Joseph Sanossian to bear the burden of any mortgage or encumbrance out of his half share. Given that the property was purchased outright, in the sense that there were no bank loans or mortgages to purchase it in the first place, any subsequent mortgage or encumbrance must have been arranged by Mr Sanossian for his own benefit. There was no evidence about this one way or the other.

Conclusion and Orders

93. My conclusion is that the plaintiff has failed to make out his case that the defendant was in breach of duty in representing Mr Sanossian in the Supreme Court proceedings or in giving advice regarding their settlement. There will be judgment for the defendant.

94. My orders are:

1. Judgment for the defendant.

2. Order the plaintiff to pay the defendant’s costs.

3. Stand the proceedings over to a date to be fixed to deal with:

1. any application by the defendant for an indemnity costs order;

2. determination of the costs reserved by Judge Letherbarrow SC on 26 July 2019.

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Decision last updated: 25 October 2019