Australia, June 30 -- New South Wales Land and Environment Court issued text of the following judgement on May 29:

1. These proceedings are brought by Mr Tekin, a former client of a firm of solicitors. Mr Tekin alleges professional negligence and breach of other duties during a retainer which relevantly started in 2014. I will refer to the solicitors as the Firm. The Firm acted for Mr Tekin on a contract to sell development land and in the litigation against the purchaser which followed. It is a case where there is no dispute that some negligence occurred and no serious dispute that thereafter the Firm had a conflict of interest yet continued to act. The real issues in the proceedings are questions of causation of loss and receipt of monetary benefits by the Firm when acting under a conflict.

2. Whilst not as extensive as that claimed, some loss was caused by the Firm's negligence and Mr Tekin is entitled to damages. In addition, the Firm received some monetary benefits in circumstances where there was a conflict or possible conflict of interest and duty. The Firm is liable to account for those benefits as a constructive trustee yet has not done so. Equitable compensation is an appropriate remedy for that failure.

3. The reasons for these conclusions are set out below. It is necessary first to address the credit of the witnesses.

Credit

4. Mr Tekin was the only lay witness who gave evidence for the Plaintiff. Some of Mr Tekin's previous business activities were relevant but Mr Tekin did not have much documentation about the various transactions which he has undertaken over the years. This meant that Mr Tekin was heavily reliant on his memory when giving evidence about conversations, his past plans and his perspectives from time to time. In his closing submissions, Mr Tekin accepted that he was not always a good historian and the concession was well made. Nonetheless, Mr Tekin was clearly a truthful witness, ready to make concessions and accept errors in his Affidavits when appropriate. I accept that he considered to be true all that he said in Court. However, like any person giving evidence about events which occurred nine or ten years ago, Mr Tekin's memory was sometimes shown to be unreliable by reference to the contemporaneous documents and other objective facts. In any such case the documents and objective facts are to be preferred.

5. Mr Tekin's imperfect memory does not just affect the reliability of his evidence about the couple of conversations which matter in this case, but also his evidence about what his plans were are any particular stage and, ultimately, what hypothetically he would have done had the Firm acted with reasonable skill and care. In some respects, Mr Tekin has naturally come genuinely to believe that he would have avoided adverse consequences which he has in fact suffered even though the objective facts demonstrate otherwise. Although it does not generally affect the outcome of the case, I have treated Mr Tekin's evidence with caution.

6. The two solicitors from the Firm who acted for Mr Tekin are Mr Stratford and Mr Doherty. They both gave evidence and both were cross examined as the nature of the case required. The solicitors were better placed than Mr Tekin because they had the benefit of the contemporaneous documents which solicitors usually produced when acting for a client. Mr Stratford generally took file notes which were better than average. Mr Stratford gave his evidence in an honest and straightforward manner. His evidence is to be accepted. Apart from one conversation, the only real point of challenge related to his non-perception of a conflict of interest when Mr Tekin got sued about the Notice to Complete which Mr Stratford had negligently drafted. Thereafter Mr Stratford left Mr Tekin in the hands of Mr Doherty and he may not have given the conflict the consideration he ought to have. It does not ultimately matter, but I think that it is more likely that Mr Stratford chose not to think about the conflict at the time. I do not find that he positively realised that there was a conflict in 2015 and then falsely denied it in these proceedings.

7. I also found Mr Doherty's evidence to be on the whole truthful although there were occasions where he was evasive and argumentative rather than forthright. He too said he saw no conflict at the time, although in his case it was because he planned to fix the problem by acting for Mr Tekin without charge in defence of the proceedings caused by the defective Notice to Complete.

8. Mr Doherty's evidence was also undermined by the fact that he had to explain the circumstances in which he provided documents to Mr Tekin in February 2016 about the application of the money received by the Firm from the drawdown of the funds which Balmain NB lent to Mr Tekin. However, to the extent that Mr Doherty was asked, he accepted some unattractive propositions which was more an indicator of honest evidence rather than the opposite. It does not generally matter, but I accept Mr Doherty's evidence with a suitable degree of caution.

9. I address below the competing evidence on the small number of factual matters which are material to the resolution of Mr Tekin's claims.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197148d144b8b5e804866877)

Disclaimer: Curated by HT Syndication.