Prowse v Achilles Paffas t/as Paffas Lawyers

The late Mrs Anita Kazis owned a residential unit in the Sydney suburb of Tamarama. Upon her death, the unit formed part of her estate.

The executors of the estate (the fourth and fifth defendants) placed the property on the market. The plaintiff wished to purchase the property and engaged the first defendant (a solicitor) to act on her behalf.

The contract for the sale of the property (the contract) was exchanged on 30 May 2023. The sale price was $1.7 million. The sale was completed on 31 July 2023. On completion, an adjustment was made in favour of the plaintiff to take account of special levies in the sum of $83,810.48.

Under the contract the adjustment was supposed to also take into account loan amounts “struck prior to settlement”.

On 31 October 2023, the Owners Corporation resolved to raise a special levy to pay outstanding loans. The result was that a special levy was imposed upon the plaintiff in the sum of $541,892.72.

The plaintiff was aggrieved by the special levy and took the view that her solicitor should have ensured that the adjustment on settlement took into account the outstanding loans.

The second defendant was the vendors’ real estate agent and has been sued for representing that no special levies were to be struck by the Owners Corporation.

The third defendant, also a real estate agency, has been sued because it was named as agent on the contract and was said to have “commissioned the Second Defendant to have the day-to-day conduct of the sale as its sales representative in consideration for a share of commission … ”

The third defendant says that its entry on the contract was a mistake because a previous relationship with the second defendant had come to an end, and it had been replaced by a different agency, the sixth defendant.

The sixth defendant has agreed with the third defendant and stated in terms that it should have been the agency stated in the contract. This admission led to the sixth defendant being joined to the proceedings by the plaintiff.

On 26 February 2026 the third defendant filed an amended notice of motion in which it seeks an order that the proceedings against it be dismissed or, in the alternative that it be removed as a party. The basis for the requested orders is the mistake outlined above. Removal was argued as the primary order sought under the notice of motion.

The third defendant relied upon the affidavit of its solicitor, Mr Jacques Jacobs dated 5 December 2025. The plaintiff relied upon an affidavit of her solicitor, Mr Peter Ellis, dated 15 December 2025.

The second defendant agrees that there was a mistake. As noted above, the sixth defendant also agrees. The fourth and fifth defendants have said that they can neither confirm nor deny the asserted mistake. On 25 February 2026, their solicitors wrote, by email, “… our clients have no reason to doubt the Sixth Defendant’s acceptance that it was the relevant agent … and the Third Defendant’s position that it was not the relevant agent …”

Despite the position taken by the second and sixth defendant and the assertion made by the third defendant that it was included in the contract by mistake, the plaintiff opposes the motion because it says there is no positive confirmation of the mistake by the fourth and fifth defendants and the third defendant had the option to rectify the contract. In addition, the plaintiff was not a party to the Agency Agreement (and therefore was unaware of its contents) which should have led to the sixth defendant being listed on the contract. This background will be explained below.

Rule 6.29 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) states:

The third defendant did appear in the contract and therefore was not a person that had been improperly or unnecessarily joined. The real question is whether the third defendant has “ceased to be a proper or necessary party”.

In Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd [2022] NSWSC 234 Rees J, from [41] set out a number of authorities relevant to r 6.29 including the decision of Bellew J in Hayes v Lend Lease Darling Park One Pty Ltd [2017] NSWSC 1376, where his Honour said, at [18] in relation to rr 6.29 and 13.4:

The mistake is said to have come about in this way. On 11 September 2021 the third defendant entered into an Independent Contract Agreement with the second defendant pursuant to which the third defendant would act as the real estate agent on sales but would rely on the second defendant to have the “day-to-day conduct of the Sale.”

In April 2023, the Independent Contract Agreement between the second defendant and the third defendant came to an end and the second defendant entered into a fresh agreement with the sixth defendant to be the relevant ‘on the ground’ agent.

On 17 May 2023, the fourth and fifth defendants entered into an Exclusive Agency Agreement with the second defendant to sell the Tamarama property. This Exclusive Agency Agreement listed the third defendant as the agent for the sale. It should have listed the sixth defendant because, by May 2023, the sixth defendant had ‘replaced’ the third defendant as the agent working with the second defendant.

In my view the statement by the second defendant confirming the asserted mistake, the assertion of the mistake by the third defendant (albeit self-serving) and the coming forward as being the appropriate party by the sixth defendant, all combine to provide a strong basis to conclude that the third defendant is no longer a proper or necessary party.

The uncertain contribution from the fourth and fifth defendants is understandable given that their dealings were with the second defendant. There is certainly no statement that has emanated from the fourth and fifth defendants to confirm the proper inclusion of the third defendant in the proceedings.

Notwithstanding the explanatory statements of the error the plaintiff maintained her position that the third defendant should not be removed. To assist the plaintiff, I asked the sixth defendant to make a statement to the court which would be noted and, at the very least, raise an estoppel against the sixth defendant should the sixth defendant at some future time endeavour to assert that it was not the agent that should have been entered on the contract.

To this end the sixth defendant made a statement which has been noted on the court record. The note states:

Although the plaintiff did not regard the statement from the sixth defendant as ‘solving the problem’, I think it provides a sound basis, especially with the background of all the correspondence to the same effect, to comprehensively prevent the sixth defendant from asserting that the third defendant was involved in the contract for sale or that the sixth defendant was not involved.

A final matter is that on 13 February 2026, the first defendant filed a Withdrawal of Pleading pursuant to UCPR r 12.6(1) stating that it withdrew the paragraph in its defence asserting the third defendant was a concurrent wrongdoer.

The plaintiff made the observation that the withdrawal may not be effective because the withdrawal did not have the consent of the plaintiff for whose benefit the allegation in paragraph 13(b)(ii) of the defence might be seen to operate. I make no comment on the validity of the withdrawal, other than to emphasise its consistency with the position of all of the defendants.

Accordingly, I will order that the third defendant be removed from the proceedings.

In relation to costs, the third defendant was properly joined to the proceedings. It might be said that the plaintiff, when informed by the second and sixth defendants of the mistake should have agreed to remove the third defendant. However, I think the plaintiff was entitled to await the position of the fourth and fifth defendants.

Overall, in order to achieve a fair result, I think that there should be no order as to the costs of the notice of motion, or as to the inclusion of the third defendant in the proceedings.

The only exception I will make in respect of costs concerns the sixth defendant who wishes its costs to be paid by the second defendant because the second defendant had made the original mistake. There is merit in the submission but as the second defendant had been excused from the hearing of the motion, I will reserve the sixth defendant’s costs.

I make the following orders: