Tekin v Stratford

Case [2025] NSWSC 541


Supreme Court


New South Wales

  • Amendment notes
Medium Neutral Citation: Tekin v Stratford & Ors [2025] NSWSC 541
Hearing dates: 25 November 2024 – 3 December 2024
Date of orders: 29 May 2025
Decision date: 29 May 2025
Jurisdiction:Common Law
Before: Faulkner J
Decision:

See [339]

Catchwords:

NEGLIGENCE – professional negligence – where solicitor failed to draft notice to complete with reasonable care – client subsequently repudiated the contract – purchaser sued client for return of the deposit and damages – deposit repaid but no damages or costs awarded against client – whether unpaid deposit instalment would have been unrecoverable as a penalty in any event – causation of loss – whether client suffered loss by not lawfully terminating the contract

BREACH OF FIDUCIARY DUTY – where solicitor continued to act for client in defence of litigation brought against client about defective notice to complete – solicitor acted in circumstances where there was a conflict or possible conflict of interest and duty – where client nonetheless won the litigation – whether client suffered loss

BREACH OF FIDUCIARY DUTY – where solicitor acted for client on negotiation and implementation of refinance – where solicitor received payments from funds drawndown from new finance – payments for past legal costs and refinance expenses not properly accounted for – whether monetary benefit or profit received by solicitors when acting in circumstances where there was a conflict or possible conflict of interest and duty

Legislation Cited:

Australian Consumer Law 2010 (Cth), s 60

Civil Liability Act 2002 (NSW), ss 5, 5A, 5D, 5E

Civil Procedure Act 2005 (NSW), s 100

Evidence Act 1995 (NSW), s 140

Cases Cited:

Andrews v Australia New Zealand Banking Group Pty Ltd (2012) 247 CLR 205; [2012] HCA 30

Beach Petroleum NL v Abbott Tout Russell Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408

Bluth v Boyded [2024] NSWCA 67

Brickenden v London Loan & Savings Co [1934] 3 DLR 465

Briginshaw v Briginshaw (1938) 60 CLR 336

Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36

Chappel v Hart (1998) 195 CLR 232

Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1; [2018] HCA 43

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Furs Ltd v Tomkies (1936) 54 CLR 583

Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) [2024] NSWCA 232

Hasler v Singtel Optus Pty Ltd 87 NSWLR 609; [2014] NSWCA 266

Hillig v Darkinjung Local Aboriginal Land Council [2006] NSWSC 1371

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41

Hungerfords v Walker (1988) 171 CLR 125

Iannello v Sharpe (2007) 69 NSWLR 452; [2007] NSWCA 61

Law Society of New South Wales v Harvey [1976] 2 NSWLR 154

Luong Ding Luu v Sovereign Developments Pty Ltd [2006] NSWCA 40

Maguire v Makaronis (1997) 188 CLR 449; [1997] HCA 23

Mao v Bao [2023] NSWCA 298

Pilmer v Duke Group…

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Tekin v Stratford [2025] NSWSC 541
Case
[2025] NSWSC 541
Decision Date

CaseChat Overview and Summary

In Tekin v Stratford, the plaintiff, Mr Tekin, sought to recover damages for professional negligence from his solicitor, Mr Stratford. Mr Stratford had failed to draft a notice to complete for the purchase of a property with reasonable care, resulting in the purchaser repudiating the contract and suing Mr Tekin for the return of the deposit. Mr Tekin repaid the deposit but was not awarded damages or costs against him. The primary legal issues the court had to decide were whether Mr Tekin suffered a loss by not lawfully terminating the contract and whether any loss suffered was caused by Mr Stratford's negligence. Additionally, the court examined whether Mr Stratford's actions in continuing to act for Mr Tekin in litigation and in the negotiation and implementation of a refinance constituted a breach of fiduciary duty.

The court found that, even if Mr Stratford had been negligent, Mr Tekin would not have been entitled to damages because the unpaid deposit instalment would have been unrecoverable as a penalty. Furthermore, the court concluded that Mr Tekin did not suffer a loss by not lawfully terminating the contract. In relation to the fiduciary duty, the court found that Mr Stratford's actions in continuing to act for Mr Tekin in the litigation did not result in any loss to Mr Tekin. However, Mr Stratford's receipt of payments from funds drawn down from the new finance for past legal costs and refinance expenses, without proper accounting, constituted a breach of fiduciary duty. The court held that Mr Stratford's actions in this regard resulted in a monetary benefit or profit, which constituted a breach of his duty to Mr Tekin.

As a result of the findings, Mr Tekin was not entitled to any damages from Mr Stratford for professional negligence. The court did not make any orders for damages or costs against Mr Tekin, as he had already repaid the deposit. The court did not award any damages or costs against Mr Stratford for professional negligence but found that he had breached his fiduciary duty to Mr Tekin by improperly receiving payments from the refinance funds. The court made orders for Mr Stratford to account for the payments received and to pay any amounts found to be due to Mr Tekin.

Orders

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Background

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