Shtrambrandt v Hanscombe

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL & EQUITY DIVISION

COMMERCIAL COURT

No. S CI 2010 00078

ARKADY SHTRAMBRANDT FENEDISTO PTY LTD	Plaintiffs
v
KRISTINE HANSCOMBE ANTHONY NOLAN DAVID BAILEY ALDERUCCIO SOLICITORS GAD KOLSKY	Defendants

No. S CI 2010 06028

ANTHONY ALOYSIUS NOLAN SC	Plaintiff
v
FENEDISTO PTY LTD ARKADY SHTRAMBRANDT	Defendant

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JUDGE:	FERGUSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	30, 31 January, 1, 2, 6-9, 13-16, 20 February 2012
DATE OF JUDGMENT:	26 March 2012
CASE MAY BE CITED AS:	Shtrambrandt & Anor v Hanscombe & Ors
MEDIUM NEUTRAL CITATION:	[2012] VSC 102

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NEGLIGENCE – Standard of care - Barristers and Solicitors – Advice about removal of caveats – Failure to plead defence based on statute – Other allegations relating to pleading – Allegations relating to conduct of applications for transfer of proceedings, removal of caveats and discovery – No breach of duty

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A. Shtrambrandt appeared in person and on behalf of Fenedisto Pty Ltd
For the First to Fourth Defendants	Mr S. Marantelli	Lander & Rogers
For the Fifth Defendant	Mr S. Tatarka	Obst Legal

TABLE OF CONTENTS

Introduction......................................................................................................................................... 2

What happened before and during the litigation........................................................................ 4

What is required to establish negligence in this case?.............................................................. 36

Observations about the witnesses................................................................................................. 40

Mr Brott.............................................................................................................................................. 43

Allegations against Mr Kolsky...................................................................................................... 43

Allegation of antagonising Mr Brott........................................................................................ 44
Discussions with Mrs Shtrambrandt........................................................................................ 45
Allegation of “downplaying” the effect of the caveats......................................................... 45
Advice about removal of the caveats....................................................................................... 47

Allegations against the other defendants.................................................................................... 49

The defence based on the Credit Code.................................................................................... 49
Striking out the claim against Fenedisto................................................................................. 53
Alleged failure to follow instructions in email of 4 August 2006....................................... 55
Pleading that the Brighton Road property was trust property............................................ 56
The Cross-vesting application.................................................................................................. 57
Pleading Mrs Shtrambrandt’s alleged lack of informed consent......................................... 58
Plea that Mr Shtrambrandt acted to his detriment................................................................. 59
Alleged failure to obtain proper brief about the timing of the s 90D agreement............. 59
Advice about discrepancies in affidavit material.................................................................. 60
Allegation of ignoring facts in the Family Court proceeding.............................................. 61
Alleged failure to properly brief counsel regarding the family assets.............................. 61
Plea of lack of notice of costs agreement................................................................................. 62
Allegation of amending defence without authority.............................................................. 63
Alleged failure to consult with Mr Shtrambrandt and follow instructions....................... 63
Attending conferences with counsel without Mr Shtrambrandt.......................................... 64
Alleged unnecessary application for further discovery....................................................... 65
The 65% argument...................................................................................................................... 65
Alleged failure to advise as to complexity, costs and length of the proceedings............ 66
Alleged failure to advise as to merits of Mr Brott’s claim and the defences to it............. 67
Alleged failure to properly draw or settle defence............................................................... 67
Other allegations......................................................................................................................... 67

Was any loss caused and has the amount of any loss been established?.............................. 67

The assignments of Mr Shtrambrandt’s cause of action........................................................... 69

Mr Nolan’s fees................................................................................................................................. 70

Mr Bailey’s fees................................................................................................................................. 70

Conclusion......................................................................................................................................... 70

HER HONOUR:

Introduction

Mr Arkady Shtrambrandt (the first plaintiff) and his former company, Fenedisto Pty Ltd (the second plaintiff)[1] have been involved in various pieces of litigation since about 1999. Mr Anthony Nolan SC (the second defendant)[2] acted for them in some of that litigation. When some of Mr Nolan’s fees were not paid, he sued Mr Shtrambrandt and Fenedisto in the Magistrates’ Court for $32,870.70 plus interest. In response, Mr Shtrambrandt began proceedings in this Court against Mr Nolan and some of the other barristers and solicitors who had acted for him, alleging that they had been negligent. Apart from Mr Nolan, the other defendants are Dr Kristine Hanscombe SC, Mr David Bailey of counsel, Alderuccio Solicitors and Mr Gad Kolsky (a solicitor). The Magistrates’ Court proceeding was uplifted to this Court[3] and the two proceedings were heard together.
[1]In Supreme Court proceeding No. S CI 0078 of 2010.
[2]In Supreme Court proceeding No. S CI 0078 of 2010.
[3]Supreme Court proceeding No. S CI 6028 of 2010.

The background to the current proceedings begins with the Family Court proceeding between Mr Shtrambrandt and his former wife, Mrs Elena Shtrambrandt (now Semenova). In that proceeding, Mrs Janet Reid of Hogg & Reid acted for Mr Shtrambrandt and Mr Isaac Brott acted for Mrs Shtrambrandt. Mrs Shtrambrandt began satellite litigation in this Court which included as a defendant Fenedisto. That proceeding also involved Mr Allan Walker, Mr Shtrambrandt’s accountant (“the Watertreat proceeding”). Mr Brott acted for Mrs Shtrambrandt in that proceeding.

Mr Brott lodged caveats over two properties registered in the names of Mr and Mrs Shtrambrandt and a property registered in the name of Fenedisto. Mr Brott claimed that he was entitled to lodge the caveats because under a costs agreement, Mrs Shtrambrandt had given a charge over the three properties to secure the payment of his fees.

For some of the time, Mr Kolsky acted for Fenedisto in the Watertreat proceeding. He was instructed by Mr Shtrambrandt to collect outstanding costs that had been ordered against Mr Brott personally in that proceeding. Mr Kolsky also advised Mr Shtrambrandt as to the courses open to him and Fenedisto to have Mr Brott’s caveats removed. Mr Kolsky’s advice was that either an application for removal of the caveats could be made to the Court or an application could be made to the Registrar of Titles under s 89A of the Transfer of Land Act 1958 (Vic). Mr Kolsky advised that if the latter course was followed, Mr Brott would have to bring proceedings to substantiate his claim as caveator or else the caveats would lapse. Section 89A applications to the Registrar of Titles were made by Mr Shtrambrandt and Fenedisto. Mr Brott then began a proceeding in this Court to maintain the caveats against Mrs Shtrambrandt, Fenedisto, Mr Shtrambrandt and the Registrar of Titles (“the Brott proceeding”).[4] Subsequently, Fenedisto and Mr Shtrambrandt began their own parallel proceeding seeking orders for removal of the caveats over two of the three properties (“the Caveat removal proceeding”).[5] I will refer to the two proceedings together as “the Supreme Court proceedings”.
[4]Supreme Court proceeding no. 7374 of 2005.
[5]Supreme Court proceeding no. 9368 of 2005.

Throughout the course of the Supreme Court proceedings, various solicitors and counsel represented Mr Shtrambrandt and Fenedisto. They included the defendants (other than Mr Kolsky). Mr Nolan and Mr Bailey appeared for Mr Shtrambrandt and Fenedisto when the Brott proceeding came on for trial. After the trial had run for a number of days, it was aborted. At the conclusion of the aborted trial, the claim against Fenedisto was struck out and Mr Shtrambrandt was given leave to replead his defence. At the second trial (which began a few months later) Mr Shtrambrandt appeared in person. On day six of the trial, Beach J gave Mr Shtrambrandt leave to further amend his pleading to add a defence under s 40 of the Consumer Credit (Victoria) Code (“the Credit Code”). This defence was successful but, because it had only been raised on day six of the trial, his Honour would not make a costs order in Mr Shtrambrandt’s favour.

In the present proceeding, in broad terms, Mr Shtrambrandt claims that the defendants wrongly advised him as to how to deal with the caveats lodged by Mr Brott and in respect of the proceedings that arose out of the caveats. The instances of alleged negligence relied on by Mr Shtrambrandt include allegations against Mr Kolsky that his conduct provoked Mr Brott to take the action that he did and that he gave the wrong advice about how to deal with the caveats. The claims against the other defendants include allegations in relation to matters that were either pleaded or not pleaded and applications that were either not made but Mr Shtrambrandt says should have been made, or where advice was given in respect of opposing or making applications in the Supreme Court proceedings. Mr Shtrambrandt says that the alleged negligent conduct led to significant losses for both him and Fenedisto. The losses are alleged to be increased and unnecessary legal costs, loss of the opportunity to earn an income from a business that could have been purchased if the caveats had been removed at an earlier time and loss of use of the money spent on the proceedings. In closing submissions, Mr Shtrambrandt said that he would accept $1 as damages.

The defendants deny the allegations of negligence and also deny that anything that they did or did not do led to any loss by either Fenedisto or Mr Shtrambrandt.

For the reasons set out below, Fenedisto and Mr Shtrambrandt fail in their claims against all defendants.

At the end of these reasons is a schedule of the defined terms that I have used and also a list of some of the people to whom reference is made.

What happened before and during the litigation

To understand how the present claims are made, it is first necessary to have a more detailed understanding of the background relating to some of the litigation involving Mr Shtrambrandt and Fenedisto.

The Family Court proceeding between Mr Shtrambrandt and his former wife began in December 1999. In November 2002, their son, Loryan Strant, intervened in that proceeding. He claimed an interest in a unit at 10/131 Brighton Road, Elwood (“the Brighton Road property”), which was registered in his parents’ names.

In addition to the Brighton Road property, there was also a property registered in the names of Mr Shtrambrandt and Mrs Shtrambrandt at 6 Curraweena Road, Caulfield (“the Curraweena Road property”) and a property at 6 Cole Street, Brighton (“the Cole Street property”) registered in the name of Fenedisto.

As noted above, as an offshoot of the Family Court proceeding, Mrs Shtrambrandt began the Watertreat proceeding. That proceeding began in 2002 and also involved Mr Walker. As I have also noted above, Mr Brott acted for Mrs Shtrambrandt in that litigation. Mr Bailey was retained by Fenedisto. Mr Kolsky acted for Fenedisto from about mid 2004. When he was retained, there were outstanding costs orders against Mrs Shtrambrandt and Mr Brott. Mr Shtrambrandt instructed Mr Kolsky to collect the outstanding costs from Mr Brott. Mr Shtrambrandt’s view was that Mr Brott was the one pushing the litigation and he felt that he was in a tactical war with Mr Brott. Mr Walker also had the benefit of costs orders against Mrs Shtrambrandt.

In March 2005, Mr and Mrs Shtrambrandt resolved their differences and Mr Shtrambrandt told Mr Kolsky this.

On 17 March 2005, Mr Kolsky sent a letter to Mr Brott in which he observed that Mrs Shtrambrandt had terminated his retainer. Mr Kolsky stated that Mr Brott’s conduct and management of the case had been part of the problem rather than the solution and he invited Mr Brott to give an explanation for this. Further on in the letter, Mr Kolsky invited Mr Brott to make a proposal in respect of costs that Mr Brott was personally liable to pay. If a reasonable proposal was not forthcoming, Mr Kolsky stated that he would arrange for an itemised bill to be prepared and taxed. The letter put Mr Brott on notice that Mr Kolsky’s clients were considering bringing an application for a costs order against Mr Brott personally for the entire case because the proceeding was “doomed to failure” and because Mrs Shtrambrandt did not have the assets against which a costs order could be enforced. Mr Kolsky’s letter stated that Mr Brott may have a reasonable explanation for this and he invited Mr Brott to give an explanation. Mr Kolsky concluded the letter with an observation about Mr Brott’s conduct on another matter in which they had been opposed and requested that Mr Brott restrict all communications with Mr Kolsky to writing. Mr Shtrambrandt’s evidence was that this letter was sent without any input from him. However, from time to time, Mr Kolsky did inform Mr Shtrambrandt (in general terms) about the communications between him and Mr Brott. Mr Kolsky was adamant that throughout the time that he acted for Mr Shtrambrandt and Fenedisto, he discussed matters with Mr Shtrambrandt and only acted with his instructions. As will be seen from what I say below in [120]-[123], Mr Shtrambrandt was a less than satisfactory witness. Whilst it may be that Mr Shtrambrandt did not see a draft of Mr Kolsky’s letter before it was sent and did not give instructions as to the exact wording to be used, I have no doubt that the letter accords with Mr Shtrambrandt’s general instructions to collect the outstanding costs from Mr Brott.

Mr Shtrambrandt became dissatisfied with Mr Kolsky and on 18 March 2005 he sent an email complaining about the time that taxation of the costs to be paid by Mr Brott was taking. In part, his email stated, “You find plenty of time to plot new wars with Brott and discuss potential strategies with me. However my repeated questions re progress of the taxation matter remained unanswered.” Mr Shtrambrandt asked for a detailed account of the work that had already been performed as well as the timing and steps required to complete it. Later that day, Mr Kolsky sent a letter in response. In part, the letter stated:

As you know, you asked us to handle this matter and to take (using your words) a ‘go slow’ approach. Your instructions were based on your expectation that you would soon be able to settle matters with your wife, Mrs Shtrambrandt, without her lawyers’ intervention. It was your strong view that your wife’s solicitor, Isaac Brott, was fuelling all disputes, and that Mrs Shtrambrandt was unaware of his actions. You said you were concerned to minimise legal expenses.

The letter noted that a bankruptcy notice that had been issued and served on Mr Brott by Mr Kolsky was flawed insofar as there were amounts included for which Mr Brott was not responsible. In this regard, Mr Kolsky noted that no charge had been made for the work done and that a credit would be given for any disbursements that had been incurred. The letter noted that Mr Shtrambrandt had told Mr Kolsky on 11 March 2005 that Mrs Shtrambrandt wanted to bring her own ethics complaint against Mr Brott and that he had instructed Mr Kolsky to prepare a complaint for him against Mr Brott and to continue with the costs claims against Mr Brott. In an email the following day (19 March 2005), Mr Shtrambrandt disputed that he had given instructions to Mr Kolsky to prepare a complaint against Mr Brott and he stated that he only wanted Mr Kolsky to tax and collect the costs ordered against Mr Brott. There is also subsequent correspondence from Mr Shtrambrandt to Mr Kolsky to that effect.

On 21 March 2005, Mr Brott wrote to Mr Kolsky. The letter indicates that Mr Brott had not been advised that his retainer had been terminated by Mrs Shtrambrandt until he received that information from Mr Kolsky’s letter. The tone of the letter was sarcastic and combative. Indeed, the correspondence between Mr Kolsky and Mr Brott was, at times, expressed in unfortunate terms. It used colourful language and in some instances was unnecessarily aggressive and discourteous. On more than one occasion, Mr Brott referred to a “war of attrition.” Mr Kolsky threatened to report Mr Brott for misconduct and Mr Brott threatened to do the same in respect of Mr Kolsky.

In a letter of 12 April 2005, Mr Kolsky suggested to Mr Shtrambrandt that even though he had reached agreement with his former wife, he might want to leave the door open for a costs order against Mr Brott in the Watertreat proceeding. The letter then went on to state:

As I mentioned recently, Brott recently admitted to me he was near to bankruptcy. I think his back is to the wall, and you could just be the one to push him over if you were mindful to go down that path.

In late April 2005, Mr Brott lodged the caveats over the Curraweena Road property, the Cole Street property and the Brighton Road property.

Over a few days in early May 2005, Mr Shtrambrandt received various notices from the Registrar of Titles informing him that the caveats had been lodged by Mr Brott. Mr Shtrambrandt had a full understanding of what caveats are, how they operate and the effect that they have. He knew that he could not deal effectively with the properties by selling or mortgaging them while the caveats were registered on title.

Mr Shtrambrandt told Mr Kolsky about some of the caveats when he started receiving the notices. Mr Kolsky asked Mr Shtrambrandt to fax the notices through to him. Mr Shtrambrandt told Mr Kolsky that his matrimonial matter had been all but finalised with the agreement between him and his former wife about to be signed. Mr Shtrambrandt also told Mr Kolsky that his family law lawyer, Mrs Reid of Hogg & Reid, was looking after the settlement with his wife and that she was aware of the caveats. Mr Shtrambrandt instructed Mr Kolsky not to get involved in anything to do with the family law matter and not to contact Mrs Reid.

By 6 May 2005, Mr Shtrambrandt had received notices from the Registrar of Titles about all of the caveats. He faxed them through to Mr Kolsky on that day and at about the same time, he sent an email to Mr Kolsky. He informed Mr Kolsky that Mr Brott had lodged more caveats (in addition to the caveats that he had already told Mr Kolsky about). He instructed Mr Kolsky to write to the Law Institute of Victoria and to stress two points in his letter. First, that Mr Brott was (according to Mr Shtrambrandt) ignoring court orders to pay costs to him and, second, that the caveats on the Cole Street property were unlawful. Mr Shtrambrandt stated that he would like the Law Institute to handle these issues and that this would save him money and cause Mr Brott “additional grief.” Mr Shtrambrandt wanted the caveats to be removed on the cheapest possible basis. At the time, he thought that this could be achieved through the Law Institute.

On 9 May 2005, Mr Shtrambrandt sent an email to Mr Kolsky in which he stated that he would be signing the agreement with his former wife that day. He also stated:

Other Caveats are for your information only – I will deal with them after my ex removes her Caveats.

By this time, Mrs Shtrambrandt had lodged caveats over the Curraweena Road property and the Brighton Road property and it is those caveats that Mr Shtrambrandt referred to in the last part of his email.

On 10 May 2005, Mr Shtrambrandt signed a binding financial agreement with his former wife pursuant to s 90D of the Family Law Act 1975 (Cth) (“the s 90D agreement”) and minutes of consent to conclude the Family Court proceeding. The s 90D agreement stated that Mr Shtrambrandt and Mrs Shtrambrandt admitted and acknowledged that they held the Brighton Road property “on trust entirely for Loryan and have always done so”. The s 90D agreement provided for Mrs Shtrambrandt to transfer to her husband all shares held by her in Fenedisto and Watertreat Engineering Pty Ltd (both companies being defendants in the Watertreat proceeding), all units held by her in the Fenedisto Unit Trust and her interest in the Curraweena Road property. Under the agreement, Mrs Shtrambrandt agreed to withdraw the caveats she had lodged over the Curraweena Road property and the Brighton Road property. The agreement also provided that Mr Shtrambrandt would make no claim for any entitlement or interest in (amongst other things) the net proceeds of sale retained by Mrs Shtrambrandt from shop 4, 72-74 Church Street, Brighton (“the Church Street property”), which had previously been owned by them. The agreement also provided that Mr and Mrs Shtrambrandt would do what was necessary to transfer the Brighton Road property into their son’s sole name.

Certificates were annexed to the agreement in respect of independent legal advice being given to each of Mrs Shtrambrandt and Mr Shtrambrandt. The certificates are dated 10 May 2005, although the agreement is dated 3 May 2005. According to Mr Shtrambrandt, Mrs Shtrambrandt received approximately 65% of the matrimonial assets with him receiving the balance of 35%.

As is apparent from what I have said above, at the time that Mr Shtrambrandt signed the s 90D agreement, he knew that in addition to the caveats that had been lodged by Mrs Shtrambrandt, Mr Brott had also lodged caveats over each of the three properties and that he would still have to deal with their removal separately. He was exceptionally relieved and happy that the litigation with Mrs Shtrambrandt in the Watertreat proceeding and the Family Court was over and he was happy to deal with Mr Brott’s caveats later on. Mr Shtrambrandt thought that Mr Brott’s caveats had no basis. This view was supported by Mr Kolsky who told Mr Shtrambrandt that Mr Brott was “completely mad” and the caveats would not withstand scrutiny.

Mr Kolsky advised Mr Shtrambrandt that if an application was lodged with the Registrar of Titles under s 89A of the Transfer of Land Act 1958 (Vic), the caveats would lapse if Mr Brott did not begin court proceedings within 30 days. Mr Kolsky told Mr Shtrambrandt that he doubted that Mr Brott would start proceedings. This accorded with Mr Shtrambrandt’s view of Mr Brott. Mr Kolsky advised that the alternative was for Mr Shtrambrandt to bring his own proceeding against Mr Brott.

Mr Kolsky sent a letter dated 10 May 2005 to Mr Brott. He confirmed that he had been instructed to lodge an application under s 89A of the Transfer of Land Act 1958 (Vic) to remove the caveats over Fenedisto’s property. Mr Kolsky noted that he had previously informed Mr Brott of this, yet the caveats had not been removed. The letter was copied to Mr Shtrambrandt and, according to Mr Kolsky, was sent with Mr Shtrambrandt’s instructions. I accept that it was sent with instructions.

In his response of 11 May 2005, Mr Brott stated that Mr Kolsky had misunderstood the claim against Fenedisto. Mr Brott’s letter stated that he consented to the caveats over the Cole Street property being removed for commercial reasons and because Mr Shtrambrandt took objection to the caveats, even though in Mr Brott’s view the lodging of the caveats was legitimate. However, it seems that Mr Brott changed his mind as the caveats were not withdrawn by him. Instead, Mr Kolsky lodged an application under s 89A of the Transfer of Land Act 1958 (Vic) in respect of the caveats over the Cole Street property owned by Fenedisto.

On 30 May 2005, Mr Kolsky gave Mr Shtrambrandt advice about removal of the caveats over the Brighton Road property and the Curraweena Road property. Essentially, that advice was that there were a number of options:

· proceedings against Mr Brott could be brought to remove the caveats, but this would be costly and potentially unnecessary;

· an application could be made under s 89A of the Transfer of Land Act 1958 (Vic) which would be simple, much cheaper and quicker;

· Mrs Shtrambrandt could issue proceedings against Mr Brott;

· Mrs Shtrambrandt could pay Mr Brott what he claimed to be owed.

Mr Kolsky recommended that the s 89A application was the best option because it would force Mr Brott to elect whether to take action or not. In the absence of pressing circumstances to remove the caveats, Mr Kolsky’s view was that it was more prudent and cheaper for Mr Shtrambrandt to proceed with s 89A applications. That is the course that Mr Shtrambrandt followed. There was a problem with the applications when they were lodged because the fee had been underpaid. However, this was corrected and the applications were relodged.

Mr Kolsky did not give advice as to whether there was an option to have the Family Court deal with the removal of the caveats. As noted above, his instructions were: to stay out of the Family Court proceedings, that they had been effectively resolved and Mr Shtrambrandt did not want Mr Kolsky to take any involvement in any family law matter whatsoever.

Mr Kolsky spoke to Mrs Shtrambrandt after Mr Brott had ceased acting for her. In a letter dated 14 July 2005, Mr Kolsky reported to Mr Shtrambrandt about this. He said that Mrs Shtrambrandt had told him that she did not have a copy of her retainer agreement with Mr Brott and that he refused to give her a copy of it. The letter continued:

She was adamant that Brott never explained things to her about his terms of engagement, and that he just made her sign things quickly whilst making wild promises about her rosy future. At that time…I thought she was honest about that.

Mr Kolsky did not know that Mrs Shtrambrandt had consulted an independent lawyer about the costs agreement and its effect, although he later learned that she had done that.

Mr Kolsky also reported that he had been informed by the Titles Office that the caveats would be removed on 4 August 2005 if Mr Brott did not take action to protect them.

On 26 July 2005, Mr Brott began his proceeding to substantiate his claim as caveator (“the Brott proceeding”).[6] The defendants to the proceeding were Fenedisto, Mr Shtrambrandt, Mrs Shtrambrandt and the Registrar of Titles. Mr Brott sought declarations that he had the interest or estate claimed by him (as chargee) over each property. Mr Shtrambrandt sought advice from Mr David Bailey (the third defendant) about the claim made by Mr Brott. Mr Bailey’s initial view was that the Family Court may be the more appropriate forum for the proceeding and that an application might be made to transfer the proceeding to that court or to have it stayed in this Court. In an email dated 12 August 2005, Mr Bailey informed Mr Shtrambrandt that when the originating process came before the Court, he intended to raise technical issues, including whether the proceeding should be in this Court as opposed to the Family Court. Mr Shtrambrandt interpreted this as confirmation that Mr Bailey was confident that the proceeding would be moved to the Family Court. On that basis, he thought that there was no need for him to engage a new solicitor as his family lawyer, Mrs Reid of Hogg & Reid, could represent him and Fenedisto in the proceeding.
[6]Supreme Court proceeding number 7374 of 2005.

On 15 August 2005, Mr Shtrambrandt swore an affidavit in opposition to the application made by Mr Brott. Among other things, Mr Shtrambrandt deposed that the Brighton Road property was held on trust for his son and that Mrs Shtrambrandt was not a shareholder of Fenedisto. He exhibited the s 90D agreement to his affidavit and stated that since the various properties were the subject of the family law proceeding and the costs agreement related to legal fees in respect of Mrs Shtrambrandt in the family law proceeding, it was not appropriate that the matter be dealt with by this Court. Mr Shtrambrandt therefore sought orders that the proceeding be stayed. On the return of the originating process, the matter was adjourned to enable Mr Brott to serve Mrs Shtrambrandt and to give time for Mr Shtrambrandt and Fenedisto to make application for a stay of the proceeding or other orders.

Mr Bailey formed the view fairly early on that the caveats over Fenedisto’s Cole Street property were hopeless. On Mr Bailey’s advice, Mr Shtrambrandt instructed Mrs Reid to send a letter to Mr Brott inviting him to discontinue the claim against Fenedisto on the basis that it was misconceived and hopeless. Mr Bailey prepared that letter and it was sent to Mr Brott on Hogg & Reid letterhead, dated 1 September 2005. The letter drew the attention of Mr Brott to s 118 of the Transfer of Land Act1958 (Vic), which provides that if a caveat is lodged without reasonable cause, the person doing so is liable for any damage sustained because the caveat was lodged. The letter reserved Fenedisto’s rights to seek relief under that section.

On 8 September 2005, Mr Shtrambrandt sent an email to Mr Bailey asking if they could try to have the case against Fenedisto dismissed as soon as possible. He also asked Mr Bailey if he could recommend a solicitor to act for him in case Mr Brott persevered with the case against him.

In an email on 9 September 2005, Mr Bailey suggested waiting a week and then, if there was no response from Mr Brott to the Hogg & Reid letter, issuing an application to strike out the claim against Fenedisto. Mr Bailey said that as to the rest of the case and the issue of jurisdiction of the Family Court, this was a matter for Mrs Reid. He advised that it would require an application to be made in the Family Court seeking relief in respect of Mr Brott’s claim. Mr Bailey stated that the alternative was to fight out the matter when it was next before this Court. As to a solicitor, Mr Bailey suggested Alderuccio Solicitors who he worked with from time to time.

By summons dated 20 September 2005, Fenedisto made an application pursuant to r 23.01(1) of the Supreme Court (General Civil Procedure) Rules 1996 for orders dismissing the proceeding against it. In the alternative, it sought orders that the proceeding be stayed. In support of that application, Mr Shtrambrandt swore an affidavit on 19 September 2005. The summons and affidavit were drawn by Mr Bailey. Hogg & Reid were still representing Mr Shtrambrandt at this stage. The thrust of the affidavit was that Mrs Shtrambrandt had no interest in Fenedisto, nor was she a director, and that Fenedisto had not instructed Mr Brott nor did it receive any benefit from the costs agreement entered into between Mrs Shtrambrandt and Mr Brott. Mr Shtrambrandt deposed that the main business of Fenedisto was to act as a trustee of the Fenedisto Unit Trust.

By summons dated 4 October 2005, Mr Brott sought Mareva (freezing) orders restraining Mr and Mrs Shtrambrandt, their son (Mr Strant) and Fenedisto from encumbering or dealing with any of the three properties. At this time, Mr Strant was not a party to the proceeding. Ancillary orders were also sought.

Mr Bailey prepared written submissions in respect of each application. In regard to the strike out application, Mr Bailey’s written submissions on behalf of Fenedisto stated that the claim against it was hopeless. The submissions went on to state that the application ought to be dismissed in accordance with the principles in rule 23.01 as not being based on any supportable cause of action, particularly as the deficiency in the application was not capable of being cured. Jurisdictional questions were also raised and the submissions stated that the matters for determination might more appropriately be determined by the Family Court or in some respects by the Legal Profession Tribunal. A submission was also made that Mr Strant should be joined as a defendant to the proceeding. Additional written submissions in respect of the strike out application were also prepared by Mr Bailey.

On 8 November 2005, Mr Bailey sent an email to Mr Shtrambrandt and Mrs Reid. He asked about the Family Court settlement between Mr Shtrambrandt and his former wife. He also asked what Mr Strant’s position was in relation to the case because he was not a party but his interests may be adversely affected.

Mr Shtrambrandt swore a further affidavit on 10 November 2005 to supplement his earlier August affidavit. The affidavit was prepared by Mr Bailey. Amongst other things, Mr Shtrambrandt deposed that Mrs Shtrambrandt no longer had any interest in the Fenedisto Unit Trust. Mr Shtrambrandt also deposed that the division of the matrimonial assets resulted in Mrs Shtrambrandt receiving about 60% of the net assets and Mr Shtrambrandt receiving about 40% of the net assets.

Further written submissions dated 10 November 2005 were prepared by Mr Bailey.

Both the strike out application and the application for Mareva orders were heard by Hargrave J on 11 November 2005. Mr Bailey appeared on behalf of Mr Shtrambrandt and Fenedisto. His Honour did not strike out Mr Brott’s claim. Rather, he ordered that Mr Strant be added as a defendant and that the parties file pleadings in the Brott proceeding. The application for Mareva relief was adjourned to 18 November 2005.

On 16 November 2005, Fenedisto and Mr Shtrambrandt commenced a parallel proceeding against Mr Brott, Mrs Shtrambrandt and the Registrar of Titles by Originating Motion (“the Caveat removal proceeding”).[7] Orders were sought for the removal of the caveats over the Cole Street property and the Curraweena Road property. Hogg & Reid were still acting for Mr Shtrambrandt at this time. The application to remove the caveats over the Curraweena Road property was not pursued and therefore when Hargrave J heard the application on 18 November 2005, the only issue was whether the caveats over Fenedisto’s Cole Street property were to be removed. On the hearing before him, counsel for Mr Brott argued that the property was held on a resulting trust by Fenedisto for Mr and Mrs Shtrambrandt. His Honour noted that the evidence in the matter was far from complete and such evidence as there was had not been tested. There had been no discovery. His Honour stated:

“In my view, unless I can say that the evidence is incapable of establishing a resulting trust, I should exercise my discretion to order that part of the net sale proceeds of the sale of the Cole Street property which is proposed be held in trust, pending the hearing and determination of the Brott proceeding or further order. That amount should not exceed one half of the net sale proceeds”.[8]

[7]Supreme Court proceeding number 9368 of 2005.

[8]Fenedisto Pty Ltd & Ors v Brott & Ors [2005] VSC 459 at [28].

His Honour made orders to that effect on 23 November 2005. However, the Cole Street property was not sold. It has been subdivided into two lots – 6A and 6B. Mr Shtrambrandt lives in 6A and 6B is rented out.

A statement of claim in the Brott proceeding was filed on 2 December 2005. Mr Bailey prepared defences on behalf of Mr Shtrambrandt and Fenedisto and sent them to Mrs Reid at Hogg & Reid for filing and service. Mr Bailey had many meetings with Mrs Reid when he was taking instructions for the defence. He also inspected her files relating to the Family Court proceeding.

Mr Bailey also prepared a defence for Mr Strant. He did so on the basis of an affidavit that Mr Strant had sworn when he had intervened in the Family Court proceeding between his parents. He gave the draft to Mr Shtrambrandt to give to his son.

In an email to Mr Shtrambrandt of 10 March 2006, Mr Bailey noted that Mr Brott had not complied with the Court timetable in the Brott proceeding and foreshadowed preparation of an affidavit that would support an application to the Court about that. Mr Shtrambrandt responded the same day with instructions to keep pushing Mr Brott because Mr Shtrambrandt was confident that in 6 months’ time, Mr Brott would be looking for a way out of the litigation.

It seems that in mid June 2006, Mr Shtrambrandt may have been looking at acquiring an interest in PPIC Pty Ltd. There is very little evidence about this other than a letter of 16 June 2006 from his accountant, Mr Walker, suggesting that there had been some examination by him of PPIC’s business and that Mr Shtrambrandt might expect to earn an annual salary (consulting fees) of $165,000 per year. Mr Walker was not called to give evidence. Nor was anyone from PPIC called as a witness.

By early August 2006, Alderuccio Solicitors had been engaged by Mr Shtrambrandt to act for him and Fenedisto in the Brott proceeding. Mr Joel Burstyner, a junior solicitor in the firm’s employ, had the day to day conduct of the matter subject to the supervision of Mr John Alderuccio, a partner in the firm. According to Mr Shtrambrandt, Mr Burstyner’s role was to assist Mr Bailey and the work he was to do was to be limited to dealing with documentation required by Mr Bailey and “other mundane issues”. By this time, Mr Shtrambrandt believed that Mr Brott was trying to delay the proceedings. In an email of 4 August 2006, he told Mr Bailey and Mr Burstyner that he could not afford delays. He said that his plan was to “pull out the Curraweena Road property from under Mr Brott” (with no concessions being made to him) and then to “pull back” once that had been done. Mr Shtrambrandt commented that Mr Brott had never lasted the distance in litigation. His view was that Mr Brott’s claim was hopeless and because of the way that Mr Brott had prosecuted the case, Mr Shtrambrandt believed the Court would take the view that it was not a proper claim and he would get 100% of his costs on a full indemnity basis from Mr Brott.

Mr Alderuccio and Mr Burstyner inspected the files held by Hogg & Reid in respect of Mr Shtrambrandt’s matters. Mr Burstyner also attended the Family Court to obtain copies of the orders that had been made in Mr Shtrambrandt’s case in that court. Mr Burstyner reported this to Mr Shtrambrandt in an email of 23 August 2006. He also suggested that another application to strike out the claim against Fenedisto might be made if evidence could be put before the Court to refute the allegation that the Cole Street property was held by Fenedisto on a resulting trust. Mr Shtrambrandt responded to say that this was not what he wanted – rather, he wanted an application to be made to remove the caveats over the Curraweena Road property. Mr Shtrambrandt explained to Mr Burstyner that his priorities were not to fight Mr Brott and spend a fortune in this Court; rather, he did not believe that Mr Brott could succeed and sooner or later he would drop the case, as Mr Shtrambrandt had seen him do before.

By late August 2006, Mr Burstyner knew that Mr Shtrambrandt wanted to have the caveats over the Curraweena Road property removed so that he could use that property to obtain a loan for business purposes. It is not clear whether Mr Burstyner knew at this time what those business purposes were. In any event, Mr Shtrambrandt changed his earlier instructions about no concessions being made to Mr Brott - an offer was made to remove the caveats over the Curraweena Road property on the basis of an undertaking by Mr Shtrambrandt that $100,000 of any sale proceeds would be held in trust pending determination of the dispute. Mr Brott rejected that offer on 31 August 2006. Mr Burstyner recommended that the litigation should be attacked with force and that senior counsel should be engaged to lead Mr Bailey in a strike out application. On the basis that Mr Brott would have to pay costs in full, Mr Shtrambrandt gave instructions to “bring the biggest and best Silk, and start blasting from every barrel.” In a responding email of 1 September 2006, Mr Burstyner cautioned that costs are discretionary and that he could not give any guarantee that an order for indemnity costs against Mr Brott would be made. He estimated that the costs of the application would be between $25,000 to $30,000 and that it may take a couple of months for the hearing to be finalised. His email continued:

Given your instructions that you want Curraweena Road freed up, we could make the strike-out application and on the first return of the hearing (which will probably be within a few weeks) push for the removal of the Curraweena Road caveat on the same terms that we have discussed.

Mr Shtrambrandt responded the same day and in part stated:

Time is working for us. Let [sic] proceed with the Curraweena first. I need money now and have other pressing issues to concentrate on. Furthermore, the longer Brott is sitting on his hands, the more obvious is the fact that he is abusing process, and less work would require to finish him of [sic].

Mr Burstyner suggested to Mr Shtrambrandt that Dr Hanscombe be briefed and Mr Shtrambrandt accepted that recommendation. Mr Burstyner instructed Dr Hanscombe by memorandum of 4 September 2006. Dr Hanscombe was briefed to confer and advise in relation to the Brott proceeding. A conference was arranged for the next day but there was some discussion about whether the conference should be re-scheduled with one possibility being that it take place the following week. In relation to this option, Mr Burstyner said in an email to Mr Shtrambrandt, “By giving Kris [Dr Hanscombe] extra time, we’re really encouraging her to spend a lot of time reading everything?” As things transpired, the conference was not deferred and was held on 5 September 2006. Mr Shtrambrandt did not attend although he had been invited to participate. Dr Hanscombe advised against making a second strike out application. Dr Hanscombe was aware that an earlier strike out application had not succeeded and was of the view that there was no point in trying again to do what one judge had already refused to do.

Dr Hanscombe was also asked to advise how the caveats over the Curraweena Road property could be removed because Mr Shtrambrandt wanted access to the asset in order to raise funds for a business enterprise of his. Dr Hanscombe was instructed that the property was registered in the names of Mr and Mrs Shtrambrandt and that they had entered into a s 90D agreement under which Mr Shtrambrandt was to have the property.

Mr Burstyner confirmed to Mr Shtrambrandt by an email of 7 September 2006 that the conference had taken place. He said that he and Mr Bailey were in the process of preparing the application for the removal of the caveats over the Curraweena Road property. He asked for valuations and other instructions relevant to the application. Mr Shtrambrandt responded the following day and said that he would have material available to give to Mr Burstyner the next week including “Business Plan and Financials of the PPIC Pty. Ltd., the company I am negotiating to purchase.” Mr Burstyner and Mr Bailey then set about preparation of the application including preparation of an affidavit to be made by Mr Shtrambrandt in support of the application. By 21 September 2006 the application had been filed with a return date of 29 September 2006. The application was not heard and determined on the first return.

A conference between Dr Hanscombe, Mr Bailey and Mr Burstyner took place on 6 October 2006. Mr Shtrambrandt did not attend. Mr Burstyner reported to Mr Shtrambrandt about the conference in an email of Monday, 9 October 2006. By this time, Mrs Shtrambrandt (supported by Mr Brott) had applied to transfer both the Brott proceeding and the Caveat removal proceeding to the Family Court (the “Cross-vesting application”). At about this time, Mrs Shtrambrandt applied to the Family Court to set aside the s 90D agreement on the alleged basis of fraudulent non-disclosure of assets by Mr Shtrambrandt.[9] She engaged Mr Brott to assist her with that application.
[9]Ultimately, the s 90D agreement was not set aside.

The Cross-vesting application was one of the matters discussed in the conference. Mr Burstyner stated that as they had reviewed the issues, it became apparent that there were strong reasons for opposing Mrs Shtrambrandt’s application. The first reason was that the Family Court may not have the power to order the Registrar of Titles to remove the caveats. Mr Burstyner noted that that court’s powers may be limited to ordering Mr Brott to remove his caveats, and if he did not, making findings of contempt against him. Mr Burstyner said this could be a less desirable and less expedient form of relief for Mr Shtrambrandt.

A second reason given was that the first question to be determined in the dispute with Mr Brott was whether his claim for costs was superior to Mr Shtrambrandt’s claim in respect of the properties. Mr Burstyner stated that it was only if Mr Brott’s claim was superior that questions relating to the family law aspects of the case, including the quantum of Mr Brott’s costs, would be relevant. Other matters relating to applications to set aside the s 90D agreement were also referred to by Mr Burstyner as reasons why the application to transfer the Supreme Court proceedings should be opposed.

Mr Burstyner said that a conference with Dr Hanscombe, Mr Bailey and the barrister who had appeared for Mr Shtrambrandt in the Family Court proceeding was scheduled for the following day. The purpose of that conference was to confirm that opposing Mrs Shtrambrandt’s application would best fulfil Mr Shtrambrandt’s interests. Mr Burstyner invited Mr Shtrambrandt to attend the conference.

The conference went ahead. Mr Shtrambrandt says he did not attend. This is consistent with a typed note relating to the conference which does not list him as an attendee, but does include Mr Alderuccio among the attendees. Dr Hanscombe’s memory was that Mr Shtrambrandt did attend one conference and she thought it was this one. This was primarily based on a contemporaneous note that she made of the conference which listed the attendees by their initials. The last attendee (as distinct from others) was noted by only one initial, “A”, which Dr Hanscombe took to be a reference to Mr (Arkady) Shtrambrandt. I think that Dr Hanscombe’s recollection on this point is mistaken and that it is probable that Mr Alderuccio attended the conference, but Mr Shtrambrandt did not.

In addition to the three counsel and Mr Alderuccio, Mr Burstyner attended. There was discussion about the problems with transferring the proceedings to the Family Court. The first problem (according to Dr Hanscombe) was that the only way the s 90D agreement could be set aside was if there had been wilful non disclosure of assets by Mr Shtrambrandt and, if that precondition was satisfied, that would be tantamount to Mr Shtrambrandt admitting to fraud. Dr Hanscombe’s view was that there were also fundamental problems with whether the matters which were subject to the Supreme Court proceedings were even justiciable in the Family Court as the dispute in the Family Court concerned the marriage. In Dr Hanscombe’s opinion, Mr Brott’s claim could only be dealt with by the Family Court in its accrued jurisdiction and she was informed by Mr Shtrambrandt’s family law barrister that the issue of the validity of the costs agreement and whether it gave rise to a caveatable interest was not within the Family Court’s accrued jurisdiction. Even if it was, Dr Hanscombe did not believe that the Family Court could order the Registrar of Titles to remove the caveats. Dr Hanscombe understood Mr Shtrambrandt’s instructions to be that he did not want to go back to the Family Court because it involved undoing the s 90D agreement with his wife which had taken five years to achieve.

On 13 October 2006, Hargrave J heard both the application for removal of the caveats over the Curraweena Road property and the Cross-vesting application. Mr Shtrambrandt made an affidavit (which Mr Bailey settled) dated 11 October 2006 in relation to both applications. Amongst other things, Mr Shtrambrandt deposed that he wanted Mr Brott’s caveats over the Curraweena Road property removed because he wanted to use some or all of the capital it represented either by sale or by refinance. No detail was given as to the purpose for which the proceeds were required. He also deposed, in effect, that Mrs Shtrambrandt did not give her fully informed consent to the charge in the costs agreement with Mr Brott. In the present proceeding, Mr Shtrambrandt said that the affidavit was wrong and he did not check it thoroughly at the time he made it. He denied telling his lawyers that Mrs Shtrambrandt had not given her fully informed consent to the charge.

The Cross-vesting application was opposed by Dr Hanscombe and Mr Bailey on behalf of Mr Shtrambrandt and Fenedisto. The application was refused and Mr Brott was ordered to pay costs on an indemnity basis. Mr Shtrambrandt’s evidence was that for two years he had lived under the impression that either Mr Brott would drop his action or that the proceeding would be transferred to the Family Court where (according to him) Mr Brott and Mrs Shtrambrandt were clearly in breach of various court orders and that, together with their other behaviour, would clinch the case for Mr Shtrambrandt without excess costs and a trial. He gave evidence that he wanted the s 90D agreement re-opened. During cross examination, Mr Shtrambrandt said that the Cross-vesting application had been opposed by his lawyers (rather than by him) and he denied that he had given instructions to them to resist the transfer of the Supreme Court proceedings. Mr Shtrambrandt’s evidence was that the decision to oppose the Cross-vesting application was made “without much knowledge” of his. He also gave evidence that he thought that the application related to restraining Mrs Shtrambrandt from engaging Mr Brott to act for her. As will be seen below, that was a later application that was made. Mr Shtrambrandt was in Court when the Cross-vesting application was heard. Mr Bailey’s evidence was that Mr Shtrambrandt did instruct him to oppose the Cross-vesting application. As will be seen from [189] – [191] below, I accept Mr Bailey’s evidence on this point and do not accept that Mr Shtrambrandt wanted the Supreme Court proceedings transferred to the Family Court.

Hargrave J ordered that the caveats over the Curraweena Road property be removed on the basis that Mr Shtrambrandt was prepared to give an undertaking that one half of the net proceeds of sale or of the amount borrowed would be placed in trust, pending the hearing and determination of the Brott proceeding.[10]
[10]Shtrambrandt v Brott [2006] VSC 379.

On 8 December 2006, the caveats over the Curraweena Road property were removed. According to Mr Shtrambrandt, by that time, the opportunity to buy the PPIC business had passed as someone else had acquired it. Mr Shtrambrandt’s position was that the application took twice as long as it should have and that time was lost in seeking the removal of the caveats because instead of focussing on that issue, Mr Burstyner was focussed on a strike out application (which Dr Hanscombe advised against and which did not proceed).

A further application by Mr Shtrambrandt was brought before Hargrave J in November 2006. That application related to restraining Mr Brott from acting for Mrs Shtrambrandt in the Brott proceeding (in which she was the first defendant). Mrs Shtrambrandt gave an undertaking that she would not engage Mr Brott in either of the Supreme Court proceedings. His Honour ordered that Mrs Shtrambrandt pay the costs of the application on an indemnity basis, with Mr Brott to pay to Mrs Shtrambrandt the costs that she was liable to pay.[11] Mr Brott paid $22,000 and Mr Shtrambrandt received this amount.
[11]Shtrambrandt v Brott (No 2) [2006] VSC 483.

On 7 December 2006, Mr Burstyner informed Mr Shtrambrandt that Alderuccio Solicitors believed that his defence needed to be revised and reconsidered. He also provided advice in respect of caveats that had been lodged by Mrs Shtrambrandt. Mr Shtrambrandt responded with an email complaining about Mr Burstyner’s advice. In part it stated:

Your position and advice re Brott’s claim has turned almost 180 degrees. Only 3 months ago you insisted on bringing Kris [Dr Hanscombe] (at enormous expense) to dismiss the case outright but now you are preparing me for a Commercial Reality. You are also shifting any potential blame on Mrs. Reid by implying that she has set the case on a wrong track.

Mr Burstyner responded on Monday, 11 December 2006. He noted that Dr Hanscombe’s advice was that the proposal to make an application to have Mr Brott’s claims summarily dismissed was flawed; that they had advised Mr Shtrambrandt of this and had not pursued that course further. Mr Burstyner stated that on Mr Shtrambrandt’s instructions, Dr Hanscombe had been engaged after the first hearing of the application to remove Mr Brott’s caveats over the Curraweena Road property and that Dr Hanscombe was briefed in respect of that matter and in respect of the application by Mrs Shtrambrandt to transfer the proceedings to the Family Court. Mr Burstyner expressed his view that Hogg & Reid had made a serious mistake in not conducting a title search before submitting the minutes of consent discontinuing the Family Court proceeding, if not before advising Mr Shtrambrandt to execute the s 90D agreement. Mr Burstyner was unaware that when that agreement was signed, Mr Shtrambrandt knew that Mr Brott had lodged his caveats over the properties.

On 19 December 2006, Mr Shtrambrandt sent an email to Mr Burstyner. He stated that he was happy that the “Curraweena saga” was over. In relation to Mr Brott, he gave instructions that there was no need to prepare an amended defence at that stage. Rather, he instructed Mr Burstyner to keep pressing Mr Brott on discovery issues and what he referred to as technical points. Mr Shtrambrandt expressed his view that as time passed, Mr Brott would neglect the case even further. Mr Shtrambrandt said that he was not concerned about time, but, as usual, about costs. Mr Burstyner responded later that day. He said that he understood Mr Shtrambrandt’s instructions but still recommended that a few hours be spent with Mr Bailey in the new year in relation to (amongst other things) arguments to be raised and an upcoming discovery application.

In a letter of 17 January 2007 to Mr Shtrambrandt, Alderuccio Solicitors again recommended that an amended defence should be filed so that Mr Brott was on notice of the case that he and Fenedisto would be running at trial. At this stage, no trial date had been set, but Alderuccio Solicitors were of the view that the case was fast approaching a point where it may be ready for trial. The solicitors expressed the view that the matter had developed considerably since the defence had first been drafted and it did not accurately and completely disclose the case for Mr Shtrambrandt and Fenedisto. In an email to Mr Shtrambrandt the following day, Mr Burstyner again mentioned that the defence needed to be amended.

In a letter of 2 February 2007, Alderuccio Solicitors again advised that the defences filed on behalf of Mr Shtrambrandt and Fenedisto needed to be amended.

Mr Alderuccio was of the view that Mr Brott’s discovery was deficient. In this regard, Mr Shtrambrandt left it to his lawyers to make a decision as to what was to be done about this issue. Over a few months, Alderuccio Solicitors wrote multiple letters to Mr Brott complaining about the deficiencies that they saw in his discovery and issues with the documents being produced for inspection. An application against Mr Brott for further discovery was heard on 16 April 2007. Although orders were made for Mr Brott to file an affidavit of further discovery by 7 May 2007, the Court would not make orders for particular discovery by Mr Brott and ordered that Mr Shtrambrandt pay 80% of Mr Brott’s costs of that day. He did not pay Mr Brott’s costs. Mr Shtrambrandt maintains that the application was unnecessary – he says he wanted to save money and he wanted go to the Family Court. I accept that Mr Shtrambrandt wanted to limit costs but for the reasons which I have given elsewhere in these reasons, I do not accept his evidence that he wanted to be in proceedings in the Family Court.[12]
[12]See, [70] above and [189] – [191] below.

Mr Burstyner reported on the outcome of the discovery hearing in a letter of 18 April 2007. In part of the letter, Mr Burstyner recorded that Mr Shtrambrandt had provided instructions to amend the defence with the amendment to be made as late as possible for a cost of $2,000. The letter also stated that Dr Hanscombe had indicated that if she was to remain in the matter and appear at the trial, she must be briefed to settle the amended defence. Mr Burstyner suggested that Dr Hanscombe’s fees for settling the defence would be between $3,500 and $11,000.

Through Mr Bailey, in mid May 2007, Mr Shtrambrandt instructed Alderuccio Solicitors to brief Dr Hanscombe to settle the amended defence. They did not do this immediately. They said that they required outstanding bills to be resolved before doing so. Mr Shtrambrandt told them that Dr Hanscombe was to be briefed immediately and that “any further delay” would be reported to the Law Institute.

By memorandum dated 19 June 2007, Mr Burstyner instructed Mr Bailey to provide advice in relation to the defences filed in the Brott proceeding. Dr Hanscombe was also briefed.

Mr Burstyner left the employ of Alderuccio Solicitors at the end of June 2007.

The amended defence was dated 20 July 2007. It was prepared by Mr Bailey and settled by Dr Hanscombe. A copy of it was sent by Mr Bailey to Mr Shtrambrandt on 24 July 2007. Paragraph 7D pleaded that Mrs Shtrambrandt did not give her fully informed consent to the purported charge.[13] Mr Shtrambrandt had been informed by Mrs Shtrambrandt that before signing the costs agreement with Mr Brott, she had seen an independent solicitor about it. Although she could not remember the detail at the time she was speaking to Mr Shtrambrandt, she told him that at the time that she signed the agreement she understood everything and signed it with full knowledge of what it contained. In those circumstances, Mr Shtrambrandt was concerned with the plea in paragraph 7D and raised his concern in an email to Mr Bailey. He stated that as Mr Bailey knew, Mrs Shtrambrandt did see another solicitor regarding the costs agreement she entered into with Mr Brott. Mr Bailey responded to say that for Mrs Shtrambrandt to have given her fully informed consent she would have had to obtain an independent lawyer’s advice as to the fact that Mr Brott was taking a charge over her property before she signed the costs agreement. Mr Bailey noted that when Mr Kolsky spoke to Mrs Shtrambrandt, she told him that she did not know what a charge was and that when he informed her that it was security she had said that she had no intention of giving Mr Brott any security. Mr Shtrambrandt did not accept Mr Bailey’s advice. He responded to say that they were not on good ground because Mrs Shtrambrandt saw a solicitor before she signed the costs agreement. Mr Bailey said that he would follow this up, but that an odd thing was her response to Mr Kolsky which suggested that, even if she did see a solicitor, she did not understand what she was doing. Mr Shtrambrandt was adamant that Mrs Shtrambrandt had seen a solicitor and signed a standard acknowledgement that the solicitor explained the details of the agreement to her. Mr Shtrambrandt said that Mrs Shtrambrandt had denied what Mr Kolsky had reported of their discussion and that she had in fact told him the name of the solicitor that she had seen. Mr Bailey said that he would discuss the issue with Dr Hanscombe although the only acknowledgement he had seen did not refer to any solicitor by name or the fact that she had been advised. He had seen the letter of 14 July 2005 from Mr Kolsky that is referred to in [35] above, as had Dr Hanscombe. Mr Alderuccio believed that Mr Burstyner had been instructed by Mr Shtrambrandt that Mrs Shtrambrandt had not been properly advised as to the nature or effect of the charge. Mr Burstyner did not have a clear recollection of where the instructions for the plea in paragraph 7D came from, but he thought it may have originated from Mr Shtrambrandt as he did not recall any meetings with Mrs Shtrambrandt or her lawyers.
[13]As will be seen from what follows, the plea was removed from the version of the defence that was before Beach J when the proceeding was finally determined.

The amended defence also included a plea in paragraph 11M that Mr Shtrambrandt had acted to his detriment in entering into the s 90D agreement. Dr Hanscombe, Mr Bailey and Mr Alderuccio were all of the understanding that Mr Shtrambrandt was not aware of the caveats when he entered into the s 90D agreement. Mr Alderuccio’s evidence was that it was to Mr Shtrambrandt’s detriment to enter into the s 90D agreement because Mrs Shtrambrandt had received her cash settlement and Mr Shtrambrandt was left with properties over which Mr Brott had lodged his caveats, and which had to be removed. [14] Mr Alderuccio also gave evidence (which I accept) that Mr Shtrambrandt gave clear instructions that he did not want them to ask any questions of Hogg & Reid about the circumstances in which the s 90D agreement had been signed.
[14]This plea was also removed from the version of the defence that was before Beach J when the proceeding was finally determined.

At the end of August 2007, Mr Shtrambrandt terminated the services of Alderuccio Solicitors. He then engaged Mr Prospero Franzese of Franzese & Associates to act for him.

At a directions hearing on 17 September 2007, Mr Bailey appeared and sought to have the proceeding set down for trial but this was opposed by Mr Brott who raised, amongst other things, discovery issues.

On 8 October 2007, Mr Brott’s application against Mr Shtrambrandt for particular discovery came on for hearing before the Listing Master. Mr Shtrambrandt attended the hearing and Dr Hanscombe and Mr Bailey appeared for him. During the course of the hearing, an issue arose as to the adequacy of the particulars of that part of the defence that pleaded in paragraph 11M that Mr Shtrambrandt had entered into the s 90D agreement to his detriment. The Master was of the view that further particulars of the defence were required and she adjourned the further hearing of Mr Brott’s application for discovery. At the next hearing, the Master ordered that Mr Shtrambrandt and Fenedisto pay the costs of that day and adjourned the application for further hearing on 7 November 2007. Mr Shtrambrandt did not pay those costs.

On 9 October 2007, Dr Hanscombe sent an email to Mr Bailey in the following terms:

I have been thinking over yesterday’s hearing and it occurs to me that I (at least) have misunderstood the statement of claim. Hardly surprising given the way it is pleaded. the [sic] allegation is apparently not that Arkady’s interest is somehow affected by the alleged charge, but that he took a transfer from Elena subject to Brott’s alleged prior equity in that interest. So we need to plead, I think, that Arkady was a bona fide purchaser for value (being the settlement of the proceedings) without notice who took unaffected by that alleged prior equity. Am I missing the point?

Dr Hanscombe gave evidence that Mr Brott’s statement of claim was pleaded at the most broad level of generality so far as it affected Mr Shtrambrandt and Fenedisto. Consequently, it was largely as a result of how matters unfolded in the interlocutory disputes and how Mr Brott’s case was enunciated in different ways on different occasions that Dr Hanscombe began to understand exactly how many attacks Mr Brott envisaged making.

Mr Shtrambrandt’s defence was further amended in October 2007 by Dr Hanscombe and Mr Bailey. The amendments primarily went to providing further particulars of some allegations (including further particulars of the allegation that Mr Shtrambrandt had suffered detriment) and to include a plea that, at the time of the s 90D agreement, Mr Shtrambrandt was a bona fide purchaser without notice of the interest claimed by Mr Brott in the properties.

Mr Shtrambrandt then acted for himself in relation to the discovery issues which Mr Brott continued to raise. In an email to Mr Shtrambrandt of 18 March 2008, Mr Bailey commented that the amendment of the defence is what gave Mr Brott his second wind.

The trial was to start in early November 2008. Shortly before that, Mr Nolan was retained to appear for Mr Shtrambrandt and Fenedisto. As things transpired, the trial was postponed to March 2009 on the Court’s own motion due to other urgent business. In the interim, Mr Bailey and Mr Nolan continued to prepare for trial. There was also an unsuccessful mediation during that time. After the mediation, Mr Shtrambrandt raised with Mr Bailey and Mr Nolan the prospect of bringing a claim under s 118 of the Transfer of Land Act 1958 (Vic) because Mr Shtrambrandt felt that Mr Brott had lodged the caveats without proper cause.

There was a conference on 19 January 2009 between Mr Shtrambrandt, Mr Nolan and Mr Bailey. They discussed trial preparation and issues about a claim under s 118 of the Transfer of Land Act. Mr Nolan was concerned about several aspects of the pleading. In particular, he was concerned about the adequacy of the pleading in relation to the Brighton Road property being held on trust for Mr Strant. The trust issue was only referred to in the particulars. He raised this pleading issue during the conference. At some stage, (it is not clear whether it was during this conference or at some other time) Mr Shtrambrandt told Mr Nolan that he should not worry about Mr Strant because he had a separate arrangement with him. According to Mr Nolan, in substance, Mr Shtrambrandt told him that he had purchased the Brighton Road property back from Mr Strant (or substituted another property for it). Mr Nolan’s view was that this was irrelevant because if Mr Strant’s interest was first in time, it did not matter what Mr Strant subsequently did with the property. The issue from his point of view was whether Mr Strant had a beneficial interest in the property before Mr Brott’s claimed interest. From the evidence that he gave in the present proceeding, it seems Mr Shtrambrandt was also concerned about pleading the trust because, at least in his mind, there was no “trust”; his son’s entitlement to the flat was purely a family arrangement that was informal and not legal in nature.

Mr Nolan gave advice that the defence should be amended so that the trust issue was squarely pleaded. Following the conference, Mr Nolan and Mr Bailey confirmed this advice in writing. The written advice also confirmed their advice given in conference that any claim for compensation by Fenedisto under s 118 of the Transfer of Land Act was unlikely to be successful. Part of the basis for the advice was that there was insufficient evidence to support the claim.

Mr Nolan and Mr Bailey prepared a further amended defence in late January 2009. The main thrust of the amendments was to plead that the Brighton Road property was held on trust for Mr Strant. Mr Shtrambrandt did not want the pleading filed and served. Mr Shtrambrandt said he was concerned about the costs of the case and delay. Mr Nolan’s view was that if the amendment was made at that time, the trial would not be adjourned because of it. Mr Shtrambrandt’s evidence in the present proceeding was that he did not have confidence in the proposed pleading because the plea in paragraph 7D about Mrs Shtrambrandt not having given her informed consent to the charge in favour of Mr Brott remained in the pleading.

On 27 February 2009, Mr Nolan attended the offices of Hogg & Reid to inspect their file for Mr Shtrambrandt’s Family Court matter. Mr Nolan reviewed the affidavits and other sworn statements that Mr Shtrambrandt had made in that matter. He noticed that there were some inconsistencies in relation to what Mr Shtrambrandt said about the Brighton Road property and his son’s interest in it. Prior to 2002, there was no reference made in any of Mr Shtrambrandt’s sworn documents in the Family Court proceedings that Mr Strant had any interest in the Brighton Road property but that seemed to change after that date. From then on, there was a consistent account that Mr Strant was entitled to the property. Mr Nolan prepared a folder of those affidavits and colour coded them for Mr Shtrambrandt so that he could consider them and provide an explanation. According to Mr Shtrambrandt, Mr Nolan told him that he was very concerned about his evidence because it was very inconsistent but that Mr Nolan was nevertheless content because, after 2002, the affidavits were consistent. Mr Nolan’s evidence was that it was always a concern that before 2002 Mr Shtrambrandt had sworn affidavits that were contrary to what he swore after that time. He was concerned that this would expose Mr Shtrambrandt to hostile cross examination as to credit. Mr Nolan regarded it as a serious issue. He prepared Mr Shtrambrandt for this by questioning him about the inconsistencies. This accorded with Mr Nolan’s usual practice. Having done this, it was Mr Nolan’s practice to say to the person who was to give evidence, “Don’t worry, I’m doing this for a reason”, to explain the reason and then say, “I’m still on your side”.

The Brott proceeding came on for trial before Hansen J (as his Honour then was) in March 2009. Mr Nolan and Mr Bailey appeared for Mr Shtrambrandt and Fenedisto. Mr Strant attended the trial but took no active part in it. During the trial, counsel for Mr Brott suggested that the alleged interest of Mr Strant in the Brighton Road property was something that had been invented at the time that the s 90D agreement was entered into in 2005. To be in a position to respond to this allegation, Mr Nolan again reviewed Mrs Reid’s files (which by then had been subpoenaed) to confirm that since 2002 she had been instructed that Mr Strant had an interest in the Brighton Road property.

The trial proceeded over a number of days. At one stage, Hansen J raised a concern that the trust issue had not been fully pleaded. Mr Shtrambrandt was in Court and observed this. After court on that day, there was a conference in Mr Nolan’s chambers. After discussion, the decision was made to amend the defence. Mr Nolan and Mr Bailey drafted an amended defence with the trust matter pleaded out. Some other changes to the defence were made as well. Mr Nolan sent the pleading to Mr Shtrambrandt. On the next day that the matter was in Court, Mr Nolan sought leave to file the amended defence on behalf of Mr Shtrambrandt. The only part of the amendment that was opposed by Mr Brott, was the amendment to plead that the Brighton Road property was held on trust for Mr Strant. Hansen J was of the view that the amendment should be allowed to ensure that the real issues in the dispute were determined. However, his Honour ruled that Mr Brott would suffer prejudice in the conduct of his case if the amendment were permitted and that that prejudice could only be cured by the trial being aborted.[15] That is what occurred. At the time that the trial was aborted, the claim against Fenedisto was struck out and costs orders were made against Mr Brott.
[15]Ruling Hansen J (unreported, 17 March 2009).

Mr Nolan gave evidence that Mr Shtrambrandt’s instructions to him before the trial were that he had no notice of Mr Brott’s caveats on the properties at the time that he signed the s 90D agreement, but that during the course of the trial it became clear that those instructions may be flawed because of evidence that Mr Kolsky gave in the trial. In the amended defence that was filed before the trial was aborted, in addition to pleading the trust issue fully, the plea in paragraph 11M relating to Mr Shtrambrandt acting to his detriment was removed, as was the plea in paragraph 7D that Mrs Shtrambrandt had not given her fully informed consent to the charge in favour of Mr Brott.

About a month after the trial was aborted and in anticipation of the new trial, Mr Nolan and Mr Bailey provided a memorandum of advice dated 16 April 2009. Amongst other things, they advised that Mr Strant should be separately represented by competent counsel at trial. They also listed a number of other matters that in their opinion had to be attended to, even though they recognised that Mr Shtrambrandt was concerned about the cost of the litigation.

By about mid June 2009, Mr Shtrambrandt had terminated Mr Nolan’s retainer. Mr Nolan informed Mr Shtrambrandt that before he would release the files he had in his possession, his outstanding accounts needed to be paid. At the time, Mr Shtrambrandt said that he had paid Mr Nolan’s fees in full. During the course of cross examination, Mr Shtrambrandt accepted that not all of Mr Nolan’s fees had been paid. On Friday 19 June 2009, Mr Nolan informed Mr Shtrambrandt that he had instructed his solicitor to issue proceedings for recovery of his fees on Monday, 22 June 2009. Mr Shtrambrandt did not pay the fees owed and, as he had foreshadowed, Mr Nolan commenced proceedings in the Magistrates’ Court for the recovery of his fees in the amount of $32,870.

On 9 July 2009, Mr Shtrambrandt sent an email to Mr Bailey informing him that because Mr Nolan had sued him for his fees, he would have to bring a counterclaim which might mean that Mr Bailey, Dr Hanscombe and Mr Alderuccio would become involved in the litigation.

The Brott proceeding came on for trial before Beach J on 6 October 2009. The trial ran for a number of days. On the fourth day of the trial, Beach J raised the question of whether the Consumer Credit legislation had any impact on the case. His Honour said that on a first reading, and without hearing submissions, that legislation may pose some substantial problems to Mr Brott in recovering anything. His Honour expressed the preliminary view that it seemed arguable that the charges under the costs agreement were caught by and infringed that legislation. His Honour gave the parties an opportunity to consider that matter further and to make submissions about it. Although not appearing for Mr Shtrambrandt at the trial, Mr Bailey drafted a plea which principally relied on s 40 of the Credit Code (“the Credit Code point”) and Mr Shtrambrandt used this to seek leave to amend his defence. Beach J granted leave to amend the defence on the sixth day of the trial.

Beach J determined the case in favour of Mr Shtrambrandt. His Honour’s reasons are recorded in Brott v Shtrambrandt & Ors [2009] VSC 467. The findings of fact that his Honour made include the following:

(a) Mrs Shtrambrandt signed the costs agreement with Mr Brott after she received independent legal advice from Efron & Associates and after amendments had been made which were suggested by Efron & Associates;[16]
[16]Brott v Shtrambrandt & Ors [2009] VSC 467 at [18].

(b) Mr Shtrambrandt signed the s 90D agreement on 10 May 2005;[17]
[17]Ibid at [26].

(c) Mr Shtrambrandt entered into the s 90D agreement in full knowledge of the existence of Mr Brott’s caveats;[18] and

(d) from Mr Strant’s 21^st birthday, the Brighton Road property was treated by the family as belonging to him.[19]

In relation to this last finding, his Honour stated that to the extent that Mrs Shtrambrandt’s evidence differed from that of Mr Shtrambrandt, he preferred the evidence of Mr Shtrambrandt which accorded with the terms of the s 90D agreement. His Honour noted that in the s 90D agreement, Mr and Mrs Shtrambrandt each admitted and acknowledged that they held the Brighton Road property “on trust entirely for Loryan and have always done so”.[20]

[18]Ibid at [87].

[19]Ibid at [86].

[20]Ibid at [27].

His Honour held that the costs agreement between Mr Brott and Mrs Shtrambrandt was a mortgage within the meaning of the Credit Code and that it was regulated by the Credit Code. His Honour held that the charging clause was void pursuant to s 40(2) of that Code.[21] For this reason, Mr Brott’s claims failed in respect of both the Curraweena Road property and the Brighton Road property.[22] His Honour noted that having reached this conclusion, it was not necessary for him to consider the other arguments advanced by the parties but he thought it appropriate to set out briefly his conclusions in relation to the remaining issues.[23] In this regard, his Honour concluded that:
[21]Ibid at [53]-[83]. Section 40(2) of the Credit Code provided that a provision in a mortgage that charged all the property of the mortgagor was void.
[22]Ibid at [84].
[23]Ibid at [85].

(a) even if a valid charge existed, it did not cover the Brighton Road property. The relevant part of the charging clause in the costs agreement provided that Mrs Shtrambrandt charged “all estates or interests in real estate which I … now have….” Having concluded that from Mr Strant’s 21^st birthday the property was treated by the family as belonging to him, his Honour was not prepared to conclude that the property fell within the terms of the charging clause. His Honour elaborated:

That is, in giving any charge, Mrs Shtrambrandt was only purporting to charge property held by her beneficially – rather than any property she might have held on trust (notwithstanding the absence of any formal trust document). Further, Mrs Shtrambrandt certainly was not purporting to charge property to which she was not beneficially entitled.[24]
[24]Ibid at [86].

(b) Mr Shtrambrandt’s argument that there was no evidence of the charge during the five years of the Family Court proceeding must be rejected;[25]
[25]Ibid at [87]-[88].

(c) the fact that Mr Brott may have had an alternative remedy available against Mrs Shtrambrandt did not matter;[26]
[26]Ibid at [89].

(d) the existence of a prior mortgage over the Curraweena Road property would not defeat Mr Brott’s claims. His Honour stated:

If one joint tenant (Mrs Shtrambrandt) charges her interest in a property to a stranger (Mr Brott) and subsequently transfers her interest in the property to the other joint tenant (Mr Shtrambrandt), the transferee (Mr Shtrambrandt) is bound by the charge because he claims under the transfer…. It follows that if there had been a valid charge in respect of the Curraweena Road property, the charge would have been in respect of Mrs Shtrambrandt’s interest after payment of the prior mortgage. Further, as between the competing unregistered interests, Mr Brott’s (as first in time) would have taken priority over Mr Shtrambrandt’s. [27]

(e) the defence based on Mr Shtrambrandt being a bona fide purchaser for value without notice failed for a number of reasons including that Mr Shtrambrandt did not enter into the s 90D agreement without notice of Mr Brott’s alleged interests.[28]

[27]Ibid at [90]-[91].

[28]Ibid at [92].

His Honour was of the view that there should be no order as to costs in relation to the proceeding. In addressing Mr Shtrambrandt about costs, his Honour said:

You will see when you read the judgment that the basis upon which you succeeded was the basis that was raised on Day 6 of the trial, and that you lost many of the arguments on which the case had been defended up until that point. I had given the matter some thought as to whether you should get the costs and I had equally given the matter some thought as to whether Mr Brott should get some costs in respect of issues that you raised in respect of which you were unsuccessful. In the end I have determined that neither of you should get any costs.[29]

[29]Transcript 285.17-27, 19 October 2009.

Mr Shtrambrandt had sought a costs order in his favour (Fenedisto having already been the beneficiary of a costs order against Mr Brott when the claim against it was struck out by Hansen J). The costs in favour of Fenedisto were not paid because, in Mr Shtrambrandt’s words, Mr Brott “went broke.”

Mr Brott sought to appeal out of time. The Court of Appeal refused leave to do so.

What is required to establish negligence in this case?

Mr Shtrambrandt claims damages for negligence (in both tort and contract).[30] At common law, a lawyer has a duty to exercise reasonable skill and care when acting for a client.[31] The standard of care is that which could be reasonably expected of persons practising in the lawyer’s area of expertise at the date of the alleged negligence.[32] The duty is the same whether it is based on contract or tort.[33]
[30]Concurrent liability in tort and contract may arise: Astley & Ors v Austrust Ltd (1999) 197 CLR 1 at 23 [48].
[31]Heydon v NRMA Ltd (2000) NSWLR 1 (Heydon v NRMA) at 117 [362] (per McPherson AJA), 53 [146] (per Malcolm AJA). Common law principles determine whether a duty arises: Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420.
[32]Section 58 Wrongs Act 1958 (Vic). (Part X of the Wrongs Act 1958 (Vic) (which includes s 58) applies to any claim for damages resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise: s 44 Wrongs Act 1958 (Vic). The exclusions in s 45 of that Act do not apply in the present case.) The position is the same at common law: Heydon v NRMA at 117 [362] (per McPherson AJA), 53 [146] (per Malcolm AJA).
[33]Section 44 Wrongs Act 1958 (Vic). The position is the same at common law: Heydon v NRMA at 117 [363] (per McPherson AJA), 53 [147] (per Malcolm AJA).

As to the “pull back” part of the instructions in the 4 August email, the Cross-vesting application was brought by Mrs Shtrambrandt, supported by Mr Brott, at the same time as the application to remove the caveats over the Curraweena Road property. Prosecution of the Cross-vesting application was not within the control of Mr Shtrambrandt or his lawyers. As to other applications made after removal of the caveats over the Curraweena Road property, at least by mid December 2006, Mr Shtrambrandt’s instructions were to “Just keep harassing [Mr Brott] on discovery and some technical points.” That is what was done. In the circumstances, there was no failure by the solicitors to follow Mr Shtrambrandt’s instructions in the 4 August 2006 email.

At one stage of the trial, there was a vague suggestion that Mr Shtrambrandt also claimed that the application to remove the caveats over the Cole Street property had not been made quickly enough. He did not seem to press this, but for the sake of completeness, I note that such an allegation has no foundation. Those caveats were removed within four months of Mr Bailey being retained and at a time when Hogg & Reid acted for Mr Shtrambrandt and Fenedisto. There was no evidence that any greater expedition was required. Further, once the caveats were removed, Fenedisto did not sell the property.

Pleading that the Brighton Road property was trust property

Mr Shtrambrandt alleges that Mr Nolan failed to interview Mr Strant and to be informed of his previous and current situation in relation to the Brighton Road property. It is true that Mr Nolan did not take instructions from Mr Strant, but Mr Strant was not Mr Nolan’s client; Mr Shtrambrandt was and it was Mr Shtrambrandt who gave Mr Nolan instructions about the Brighton Road property. Mr Nolan knew that Mr Strant had intervened in the Family Court proceedings. As noted above, Mr Nolan’s view was that what Mr Strant had done with the property after Mr Brott’s caveats had been lodged was irrelevant. Mr Nolan told Mr Shtrambrandt that Mr Strant should be separately represented as he was also a defendant to the claim brought by Mr Brott. This advice was confirmed in writing. The trust point was pleaded by Mr Nolan and Mr Bailey and was successful in the trial before Beach J. There was nothing wrong with Mr Nolan not contacting Mr Strant or not taking instructions from him.

In stark contrast to the allegation made against Mr Nolan, Mr Shtrambrandt alleges that Dr Hanscombe and Alderuccio Solicitors failed to plead properly that the Brighton Road property was held on trust for Mr Strant. Mr Shtrambrandt’s evidence in the present proceeding in respect of Mr Strant’s entitlement to the property was, at best, unsatisfactory. Some of the evidence he gave cast doubt on the evidence that he had given before Beach J on this topic.

In any event, on the basis of the instructions that they had at the time, Mr Nolan and Mr Bailey pleaded the trust point before the matter was finally determined. That part of the defence required evidence to be given and tested at trial. It would not have been amenable to a successful application for summary dismissal of the claim before trial. So any failure to plead it at an earlier time has no consequence and is of no moment.

These claims must fail.

The Cross-vesting application

Mr Shtrambrandt alleges that Dr Hanscombe improperly advised against the transfer of the Supreme Court proceedings to the Family Court. As noted above, there was on foot at about the same time as the Cross-vesting application, an application in the Family Court to re-open the s 90D agreement.

I do not accept Mr Shtrambrandt’s evidence that he wanted the s 90D agreement re-opened and that he wanted the proceedings transferred to the Family Court. He had spent five years in the Family Court in a difficult battle with Mrs Shtrambrandt and he was very happy with the outcome of the s 90D agreement. Mrs Shtrambrandt was alleging that the s 90D agreement should be set aside on the basis that there had been fraudulent non-disclosure by Mr Shtrambrandt of his assets in the course of the Family Court proceedings. It makes no sense that in those circumstances Mr Shtrambrandt would want the s 90D agreement re-opened.

In addition, there were concerns about whether the Family Court would have power to grant the relief that he sought in relation to the caveats and this was another good reason why it was in Mr Shtrambrandt’s interests to oppose the application. These concerns were confirmed by Hargrave J, who stated that it was only this Court that could order the Registrar of Titles to remove the caveats.[51]
[51]Shtrambrandt v Brott [2006] VSC 379 at [29].

In any event, I accept Mr Bailey’s evidence that Mr Shtrambrandt instructed him to oppose the Cross-vesting application. Mr Shtrambrandt was closely involved in the litigation concerning him and Fenedisto. He attended Court and must have known that the Cross-vesting application was being opposed, yet he did nothing to prevent his lawyers opposing it. His evidence that he thought the application concerned restraining Mrs Shtrambrandt from instructing Mr Brott was unconvincing.

Further, there is no evidence that if the Supreme Court proceedings had been transferred to the Family Court that the dispute over the caveats would have been resolved any quicker or at less expense. Like many of the allegations that Mr Shtrambrandt makes, this allegation does not lead anywhere.

Pleading Mrs Shtrambrandt’s alleged lack of informed consent

Mr Shtrambrandt alleged that the plea that Mrs Shtrambrandt did not give her fully informed consent to the charges in favour of Mr Brott should never have been made and was an improper plea. The plea appears in the defences of 20 July 2007 (drawn by Mr Bailey and settled by Dr Hanscombe at a time when Alderuccio Solicitors were acting) and 20 October 2007 (drawn by Mr Bailey and settled by Dr Hanscombe at a time when Franzese & Associates were acting as solicitors). The claim is made against Alderuccio Solicitors in relation to the July pleading and against Dr Hanscombe in relation to the October pleading.

There are some difficulties for Mr Shtrambrandt with this allegation. The first is that in his affidavit of 11 October 2006 in support of the application to have the caveats removed over the Curraweena Road property, he effectively deposed that Mrs Shtrambrandt had not given her fully informed consent to the charges. As noted in [69] above, Mr Shtrambrandt says that the affidavit is wrong and that he did not read it fully. Whilst the issue of Mrs Shtrambrandt having seen a lawyer when she signed the costs agreement with Mr Brott was raised by Mr Shtrambrandt in the subsequent email chain in July 2007 (which I have referred to in [84] above), it is not clear from that chain of correspondence that there was no doubt about whether her consent was fully informed.

All of the lawyers involved in the pleading had understood that Mrs Shtrambrandt did not give her fully informed consent. This was based in some cases on what Mr Kolsky had said in his letter of 14 July 2005 (see [35] above) and also in some cases on the instructions from Mr Shtrambrandt.

The final difficulty for Mr Shtrambrandt in relation to this allegation is that the plea was not included in the final form of the defence at the trial before Beach J. There is no evidence that the inclusion of this plea in any way delayed the Supreme Court proceedings or had any effect on Mr Brott. The allegation leads nowhere even if it were proven.

Plea that Mr Shtrambrandt acted to his detriment
Alleged failure to obtain proper brief about the timing of the s 90D agreement

Mr Shtrambrandt alleges that in the 20 July 2007 and 20 October 2007 defences it was improperly pleaded that by entering into the s 90D agreement he acted to his detriment. The claim is made against Alderuccio Solicitors in respect of the July defence and against Dr Hanscombe in respect of the October defence. Mr Shtrambrandt also alleges that Dr Hanscombe and Mr Nolan failed to obtain a proper brief in respect of the timing of the caveats and his entry into the s 90D agreement.

It is beyond doubt that Mr Shtrambrandt knew about the caveats when he entered into the s 90D agreement and that this plea was not supported by his evidence. However, it is equally clear that his lawyers in the Supreme Court proceedings believed (based on what he told them) that he did not know about the caveats when he entered into the s 90D agreement with Mrs Shtrambrandt. He did not want any of the lawyers dealing with the Supreme Court proceedings to investigate this issue.

These allegations are not made out.

Advice about discrepancies in affidavit material

It is alleged that Mr Nolan advised Mr Shtrambrandt that discrepancies in his Family Court affidavits were of no concern.

As set out in [97] above, Mr Nolan reviewed the sworn written statements about the Cole Street property that Mr Shtrambrandt had made in the Family Court proceedings. He prepared the colour coded version of the affidavits to help Mr Shtrambrandt to prepare for what was likely to be difficult cross examination based on the discrepancies in those affidavits. Mr Shtrambrandt alleges that Mr Nolan told him that the inconsistencies were of no concern because, as from 2002, Mr Shtrambrandt’s affidavits were consistent. I accept that Mr Nolan may have told Mr Shtrambrandt not to worry when he was assisting him to prepare for trial and that Mr Nolan is likely to have pointed out that his position was consistent after 2002. I also accept that Mr Shtrambrandt may (wrongly) have interpreted this as some sort of assurance that the discrepancies were not an issue. Any discrepancies in sworn evidence are more than likely going to create difficulties for a witness and it is clear that Mr Nolan was alert to this. It is inherently unlikely that his advice was that the discrepancies were of “no concern”.

In any event, even if one assumes (for the purposes of the argument) that that was the advice that was given, it did not cause any loss. The evidence was relevant to the issue of who was beneficially entitled to the Brighton Road property. Beach J held that the evidence on this issue was “far from clear cut.”[52] However, his Honour was satisfied that on and from Mr Strant’s 21^st birthday it was treated by the family as belonging to him and, to the extent of any inconsistency, he preferred the evidence of Mr Shtrambrandt over Mrs Shtrambrandt on this point, which accorded with the s 90D agreement.[53] In short, Mr Shtrambrandt won the point.
[52]Brott v Shtrambrandt [2009] VSC 467 at [86].
[53]Ibid.

This part of the claim against Mr Nolan must fail.

Allegation of ignoring facts in the Family Court proceeding
Alleged failure to properly brief counsel regarding the family assets

A related allegation made against Mr Nolan is that he ignored critical issues and facts related to the Family Court proceeding even though they formed the background to the Brott proceeding.

Mr Nolan obtained documents from the Family Court proceeding from Mr Shtrambrandt and also from his review of Hogg & Reid’s file (both at the offices of those solicitors and a second time, when the files had been subpoenaed). Mr Nolan prepared the document that analysed the discrepancies in Mr Shtrambrandt’s affidavits about the Brighton Road property.

It is not absolutely clear what all the “critical facts” are that Mr Nolan is alleged to have ignored. However, one fact relates to what Mr Shtrambrandt had included in his first financial statement given in 2000 in the Family Court proceeding. During the trial before Hansen J (which was eventually aborted), counsel for Mr Brott argued that Mr Shtrambrandt’s contention that the Brighton Road property was held on trust for Mr Strant was a recent invention at the time of the s 90D agreement (that is, in May 2005). Mr Nolan had already undertaken a review of the material sworn by Mr Shtrambrandt in the Family Court proceedings and knew that Mr Shtrambrandt’s evidence had been consistent since 2002. When the recent invention issue was raised, Mr Nolan spent time going through Hogg & Reid’s files (a second time) searching for documents that showed that Mrs Reid had raised the issue since 2002, so it could not be a recent invention in 2005. He was then fully armed to meet the allegation of recent invention. Nothing turns on the suggestion that he was not in a position to do so immediately upon it being raised on behalf of Mr Brott. Mr Shtrambrandt says that in his first financial statement in the Family Court proceeding there was no reference to the Brighton Road property being matrimonial property. However, as Mr Nolan had evidence going back to 2002 it would not matter if he did not include the 2000 financial statement to support the contention that there was no recent invention. It was not necessary to go back any earlier than 2002 and failing to refer to (or using Mr Shtrambrandt’s terminology, ignoring) that first financial statement is of no consequence.

Mr Shtrambrandt also alleges that Alderuccio Solicitors failed to brief Dr Hanscombe properly about the family assets. The memorandum prepared by Mr Burstyner to brief Dr Hanscombe was lengthy. He stated that the Brighton Road property had been bought by Mr and Mrs Shtrambrandt and was held on trust for Mr Strant (that being the legal conclusion he formed based on Mr Shtrambrandt’s instructions). He included a chronological description of the Family Court proceedings including the application by Mr Strant to intervene. Included with the brief were various documents, including Mr Strant’s application to intervene. Dr Hanscombe spoke to the senior counsel who had acted for Mr Shtrambrandt in the Family Court litigation to get some background. Additionally, Alderuccio Solicitors organised the conference with Dr Hanscombe on 10 October 2006 that was attended by Mr Shtrambrandt’s Family Court senior counsel. In my opinion, there was no failure on the part of Alderuccio Solicitors to brief Dr Hanscombe about the family assets.

Plea of lack of notice of costs agreement

In the July 2007 and October 2007 amended defences, paragraph 7H was a plea that the third defendant (who was Mr Shtrambrandt) had no notice of the first retainer relied on by Mr Brott for his charges.

When Mr Nolan and Mr Bailey amended the defence in March 2009, Mr Nolan referred to the parties by their names rather than as a defendant or a plaintiff. One such change was made to paragraph 7H of the defence so that instead of referring to the third defendant, it referred to Mr Shtrambrandt by name. No other amendment was made to that paragraph. Mr Shtrambrandt complains against Mr Nolan about the change that he made. The complaint has no substance.

Allegation of amending defence without authority

Mr Shtrambrandt alleges that Mr Nolan acted without his authority and reasonable cause by amending the defence. There is no doubt that Mr Shtrambrandt gave Mr Nolan instructions to prepare the March 2009 amended defence and the allegation must fail in respect of that pleading.

To the extent that Mr Shtrambrandt complains about the preparation by Mr Nolan of a draft amended defence in January 2009, the allegation lacks substance. The document was never filed because Mr Shtrambrandt’s instructions were that it should not be used at that time. It did, however, form the basis of the March 2009 amended defence and, in this regard, the work that Mr Nolan did in January on the earlier draft was not wasted.

Alleged failure to consult with Mr Shtrambrandt and follow instructions

This allegation is made against Mr Nolan alone. At its heart it seems to be based on Mr Shtrambrandt’s view that during conferences, Mr Nolan ignored him and did not allow him to speak. Mr Nolan’s evidence was that he consulted Mr Shtrambrandt regularly and often for instructions but that sometimes, if there was a difference of opinion between them, he was quite vigorous in his discussions with Mr Shtrambrandt.

Mr Nolan found it difficult to obtain clear instructions from Mr Shtrambrandt as to what he wanted put forward. If Mr Nolan was of the view that a particular issue should not be put forward because it had no merit, Mr Shtrambrandt had difficulty understanding that.

Mr Shtrambrandt conceded that he was a “hands on” client. He wanted to control things. It is unlikely that if Mr Nolan had ignored him in relation to material matters that Mr Shtrambrandt would have accepted that. Rather, the more likely complaint that Mr Shtrambrandt has is that Mr Nolan’s manner did not sit well with him.

This allegation made against Mr Nolan is not made out.

Attending conferences with counsel without Mr Shtrambrandt

Mr Shtrambrandt alleges against Alderuccio Solicitors that they attended two conferences with counsel at which he was not present and for which they did not have his input. He did not attend conferences with Dr Hanscombe and others on 5 September, 6 and 10 October 2006. Mr Shtrambrandt was invited to attend all conferences. In relation to the first conference, Mr Burstyner sent a report to Mr Shtrambrandt on 7 September 2006 (to which I have referred in [62] above). As to the second conference, Mr Burstyner sent a lengthy email to Mr Shtrambrandt on 9 October 2006, reporting on what had been discussed at the conference, in particular, that there were strong reasons for opposing the application by Mr Brott to transfer the Supreme Court proceedings to the Family Court. The email foreshadowed that it was intended that a further conference would be held on 10 October 2006 which Mr Shtrambrandt was welcome to participate in and that would be attended by senior counsel who had represented Mr Shtrambrandt in the Family Court proceedings.

I accept Mr Alderuccio’s evidence that Mr Shtrambrandt was fully briefed about those conferences that he did not attend. That accords with the contemporaneous emails and is consistent with the fact that Mr Shtrambrandt was a client who wanted to be closely involved in the running of the litigation. He knew about the 10 October conference and if there had been no report to him about it or if he had not been happy with what occurred, he would very quickly have made his feelings known (as he did in respect of other things on other occasions).

This part of the claim against Alderuccio Solicitors must fail.

Alleged unnecessary application for further discovery

Mr Shtrambrandt alleges that the application for further discovery by Mr Brott that was determined in mid April 2007 was made without his authority, was unnecessary and without reasonable cause. The allegation is made against Alderuccio Solicitors. Essentially what was sought in the application were documents that were underlying the costs agreement between Mr Brott and Mrs Shtrambrandt and which related to the amount of Mr Brott’s bill of costs. The application for particular discovery was unsuccessful. Nevertheless, it is clear that Mr Brott’s discovery was deficient and that despite much correspondence from Alderuccio Solicitors, he had not provided proper discovery. In the absence of Mr Brott agreeing to provide proper discovery (which he had refused to do) an application for orders would have to have been made. Further, the application was in accord with Mr Shtrambrandt’s instructions in December 2006 to pursue Mr Brott in relation to discovery issues.

It is reasonable to expect that a lawyer faced with those facts would have made an application for further discovery, including an application for particular discovery. The fact that the particular discovery part of the application failed, does not make it unnecessary nor negligent.

The 65% argument

Mr Shtrambrandt alleges that Dr Hanscombe, Mr Nolan and Alderuccio Solicitors failed to read and use his financial statements and those of Mrs Shtrambrandt in the Family Court proceedings either to make an application to dismiss Mr Brott’s claim by showing that Mrs Shtrambrandt had already received more than 65% of the family assets or to provide a defence to Mr Brott’s claim. It was difficult to understand how Mr Shtrambrandt puts this part of his claim. It seems to be based on the following chain of notions:

· Mr Brott was only entitled under his charge to property to which Mrs Shtrambrandt was entitled;

· Mrs Shtrambrandt received more than 65% of the matrimonial assets in 2002 from the sale of the Church Street property;

· therefore, Mrs Shtrambrandt was never going to be entitled to any other matrimonial assets;

· Mrs Shtrambrandt had that 65% of the matrimonial assets before Mr Brott lodged his caveats;

· hence, Mr Brott was not entitled to lodge his caveats over the properties that went to Mr Shtrambrandt under the s 90D agreement.

However, that reasoning is flawed, not least because until the Family Court adjudicated on the property entitlement of each of Mr and Mrs Shtrambrandt, it is not possible to conclude that Mrs Shtrambrandt had no interest in those properties. The s 90D agreement circumvented the need for the Family Court to make such a determination.

This allegation fails.

Alleged failure to advise as to complexity, costs and length of the proceedings

Mr Shtrambrandt alleged that Alderuccio Solicitors failed to alert him and Fenedisto to the potential complexity, high costs and length of the proceedings.

Mr Shtrambrandt had been involved in litigation for over 5 years (both in respect of the Family Court proceeding and in the Watertreat proceeding) by the time that Mr Brott began his proceedings.

Mr Shtrambrandt’s original profession was engineering. He ran a consultancy business dealing with water treatment issues for 20 years. He also developed a number of properties. He is an intelligent and determined man and an astute litigant. He wanted to control and direct any litigation he was involved in and he wanted to be heavily involved in the strategy and tactics. Most of the time when applications were before the Court, Mr Shtrambrandt would attend. He accepted that his lawyers informed him about what was happening in the litigation and what it meant. He received fee estimates and monthly accounts and he was in regular contact with Mr Burstyner. Mr Shtrambrandt was very concerned to control costs and made this clear in many of the emails that he sent to Mr Burstyner. He knew that litigation involving Mr Brott was likely to be difficult and that it would not be over quickly. The allegation is not made out on the evidence.

Alleged failure to advise as to merits of Mr Brott’s claim and the defences to it
Alleged failure to properly draw or settle defence

These general allegations do not add anything to the particular allegations that have already been dealt with above.

Other allegations

For completeness, I note that Mr Shtrambrandt made a number of other pleaded allegations which he abandoned during the course of the trial.

Was any loss caused and has the amount of any loss been established?

Given the findings that I have made, it is not strictly necessary for me to consider additional causation issues to those with which I have already dealt nor to consider what Mr Shtrambrandt and Fenedisto claimed as the amount of their loss. However, I will make a few further observations briefly.

Based on his previous experience with court proceedings, Mr Shtrambrandt was of the opinion that regardless of the venue (Family or Supreme Court) the proceedings should have been resolved within two years. For this reason, Mr Shtrambrandt alleged loss suffered by Fenedisto from July 2007 (that being two years after Mr Brott commenced proceedings). Fenedisto’s loss was alleged to be $350,00 in extra legal fees[54] plus $1 million[55] which would have been earned by Fenedisto had it had the use of the money spent on the additional fees.
[54]Mr Shtrambrandt apportioned this amount as between the defendants as follows: Mr Kolsky - $150,000; Mr Bailey - $20,000; Alderuccio Solicitors - $100,000; Dr Hanscombe - $20,000; Mr Nolan - $60,000.
[55]Mr Shtrambrandt apportioned this amount as between the defendants as follows: Mr Kolsky - nil; Mr Bailey - $300,000; Alderuccio Solicitors - $560,000; Dr Hanscombe - $80,000; Mr Nolan - $60,000.

There was simply no admissible evidence that would establish what Fenedisto would have done with the money had it had the use of it. Further, Mr Shtrambrandt could not understand why there was any difficulty with the defendants and the Court accepting the figures that he put up as being the amount of his loss and that of Fenedisto. To him, this was just a commercial matter that could be verified by accountants. On numerous occasions, I reminded Mr Shtrambrandt that it was for him to prove his case through admissible evidence including that part of his case that related to any loss that he or Fenedisto may have suffered. I stressed that without the agreement of the defendants, this was not a matter that could be left for accountants to work out. Mr Shtrambrandt attempted to redress this deficiency in his case by producing, amongst other things, bank statements. The documents he produced had very little (if any) probative value in relation to his case. The bank statements simply show moneys going into and out of the account over the period that they cover.

Mr Shtrambrandt claimed loss of $600,000 (being $150,000 per year from 2006) that he says he would personally have earned as income if the PPIC Pty Ltd business had been acquired. He says that this loss was caused because the caveats over the Curraweena Road property were not removed quickly enough and by the time they were removed, the opportunity to acquire the business had been lost.

In relation to this claim, there is no probative evidence that establishes the likelihood of the PPIC business being purchased, nor any objective evidence that supports Mr Shtrambrandt’s evidence that it was not available for purchase when the caveats were removed. The only document that Mr Shtrambrandt produced was the letter dated 16 June 2006 from Mr Walker (as his accountant) which (as I have said) indicates that he had examined the business of PPIC Pty Ltd and information provided by Mr Shtrambrandt and that Mr Shtrambrandt could expect consultancy fees of $165,000 per annum. Although at one stage Mr Shtrambrandt proposed to call Mr Walker to give evidence, in the end he decided he would not do that. That letter and the evidence of Mr Shtrambrandt is insufficient to establish that there was an opportunity to acquire the PPIC Pty Ltd business or that, if it was acquired, Mr Shtrambrandt would have been likely to earn $150,000 per annum. There is no evidence from any person associated with PPIC Pty Ltd as to what occurred with its business and what it would have been likely to pay Mr Shtrambrandt had he been employed by the business. That no proof of the loss of opportunity was produced is consistent with Mr Shtrambrandt’s conduct when he raised the point with Mr Nolan and Mr Bailey in relation to a potential claim against Mr Brott. As they noted in their advice at the time, they had not been provided with sufficient instructions associated with the nature of the profit or the likelihood of Mr Shtrambrandt entering into the venture.

For completeness, I note that there can have been no loss sustained in respect of costs orders Mr Brott obtained against Mr Shtrambrandt in the proceedings as no amount was paid by him to Mr Brott.

In closing submissions, Mr Shtrambrandt said that all he was looking for was an award of damages of $1. However, for the reasons already given, I am not satisfied that even nominal damages ought be awarded.

The assignments of Mr Shtrambrandt’s cause of action

Mr Shtrambrandt claims that his cause of action was assigned to Letore Pty Ltd which then assigned it to Fenedisto. He relied on a purported assignment agreement dated 21 November 2011 between him and Letore and another undated purported assignment agreement between Letore and Fenedisto. Under the first document, the consideration is said to be $40,000. Mr Shtrambrandt’s evidence was that $15,000 had been paid by Letore to Mr Shtrambrandt’s controlling trustee (Mr Shtrambrandt having entered into a personal insolvency agreement under Part X of the Bankruptcy Act 1966 (Cth)). The second document (between Letore and Fenedisto) states that the consideration is $50,000. According to Mr Shtrambrandt, $25,000 was paid by Fenedisto to his controlling trustee in satisfaction of the balance that Letore owed to Mr Shtrambrandt under the first document. Mr Shtrambrandt said that no other money had been paid by Fenedisto to Letore. Mr Shtrambrandt denied that the purported assignments were a sham. He said that he had sold his claim for $40,000 because that was the best that he could get for it as the outcome of the case was far from certain.

In view of the findings that I have made, it is not necessary for me to determine whether the assignments were valid or not. I note that both Letore and Mr Shtrambrandt’s controlling trustee were given notice of the trial, but they did not seek to be heard.

Mr Nolan’s fees

Mr Nolan claims outstanding fees of $32,670 together with interest. Mr Shtrambrandt accepted that he had not paid those fees. Mr Nolan is entitled to an order for those fees and interest.

Mr Bailey’s fees

Mr Shtrambrandt paid $15,000 to Franzese & Associates on account of Mr Bailey’s fees. Mr Bailey is owed in excess of that amount in respect of outstanding fees. Those moneys are still held on trust by Franzese & Associates for Mr Bailey. Mr Shtrambrandt’s controlling trustee makes no claim to them. Mr Bailey does claim them and is entitled to them.

Conclusion

I am satisfied that none of the allegations made by the plaintiffs has been made out against any defendant and that orders ought be made in favour of Mr Nolan and Mr Bailey in respect of their fees.

SCHEDULE OF TERMS

Brighton Road property: 10/131 Brighton Road, Elwood registered in the names of Mr Shtrambrandt and Mrs Shtrambrandt.

Brott proceeding: Supreme Court proceeding no. 7374 of 2005 brought by Mr Brott against Fenedisto, Mr Shtrambrandt and Mrs Shtrambrandt to sustain his claim as caveator over the Brighton Road property, the Curraweena Road property and the Cole Street property.

Caveat removal proceeding: Supreme Court proceeding no. 9368 of 2005 brought by Fenedisto and Mr Shtrambrandt against Mr Brott, Mrs Shtrambrandt and the Registrar of Titles seeking removal of the caveats over the Cole Street property and the Curraweena Road property.

Church Street property: Shop 4, 72-74 Church Street, Brighton, which was sold, with the proceeds of sale paid to Mrs Shtrambrandt.

Cole Street property: 6 Cole Street, Brighton registered in the name of Fenedisto Pty Ltd.

Credit Code: Consumer Credit (Victoria) Code.

Credit Code point: The defence based on s 40 of the Credit Code relied on by Mr Shtrambrandt at the trial of the Brott proceeding before Beach J in October 2009.

Cross-vesting application Application by Mrs Shtrambrandt (supported by Mr Brott) to transfer the Supreme Court proceedings to the Family Court.

Curraweena Road property: 6 Curraweena Road, Caulfield registered in the names of Mr Shtrambrandt and Mrs Shtrambrandt.

Loryan: Loryan Strant, the son of Mr Shtrambrandt and Mrs Shtrambrandt.

Mr Strant: Loryan Strant, the son of Mr Shtrambrandt and Ms Semenova.

S 90D agreement: The binding financial agreement pursuant to s 90D Family Law Act 1975 (Cth) between Mr and Mrs Shtrambrandt entered into in May 2005.

Supreme Court proceedings: The Brott proceeding and the caveat removal proceeding.

Watertreat proceeding: Proceeding in Supreme Court of Victoria brought by Mrs Shtrambrandt against Fenedisto and Watertreat Engineering Pty Ltd.

LIST OF PEOPLE

Mr John Alderuccio A partner in the firm, Alderuccio Solicitors, the fourth defendant. Alderuccio Solicitors acted for Mr Shtrambrandt and Fenedisto for some of the time in the Brott proceeding and the Caveat removal proceeding.

Mr David Bailey The third defendant. Mr Bailey represented Mr Shtrambrandt and Fenedisto in the Watertreat proceeding, the Brott proceeding and the Caveat removal proceeding (other than at the trial of that proceeding before Beach J in 2009).

Mr Isaac Brott Mrs Shtrambrandt’s solicitor in the Family Court proceeding and the Watertreat proceeding. The plaintiff in the Brott proceeding and one of the defendants in the Caveat removal proceeding.

Mr Joel Burstyner An employee solicitor of Alderuccio Solicitors during part of the relevant time. Mr Burstyner had the day to day conduct of the Brott proceeding and the Caveat removal proceeding (subject to Mr Alderuccio’s supervision).

Mr Prospero Franzese A partner in the firm, Franzese & Associates who acted for Mr Shtrambrandt and Fenedisto and who took over the conduct of the Brott proceeding from Alderuccio Solicitors.

Dr Kristine Hanscombe SC The first defendant. Dr Hanscombe represented Mr Shtrambrandt and Fenedisto for some of the time in the Brott proceeding and the Caveat removal proceeding.

Mr Gad Kolsky The fifth defendant. Mr Kolsky acted for Mr Shtrambrandt and Fenedisto in relation to the Watertreat proceeding and gave advice about removal of the caveats.

Mr Anthony Nolan SC The second defendant. Mr Nolan represented Mr Shtrambrandt and Fenedisto in the Brott proceeding at the first (aborted) trial and for a few months after that time.

Mrs Janet Reid Partner in Hogg & Reid, Mr Shtrambrandt’s solicitors in the Family Court proceedings and originally in the Brott proceeding and the Caveat removal proceeding.

Mr Arkady Shtrambrandt: The first plaintiff.

Mrs Elena Shtrambrandt Mr Shtrambrandt’s former wife who is now known as Elena Semenova.

Mr Loryan Strant Mr and Mrs Shtrambrandt’s son.

Mr Allan Walker Mr Shtrambrandt’s friend and accountant who was involved in the Watertreat proceeding.

[2012] VSC 102

26 March 2012