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
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
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.