Bank of Western Australia v Ellis J Enterprises Pty Ltd

Background 10On 22 September 1979 Christine Nassif met her husband Steve Nassif in Bulgaria. Christine Nassif was born in Bulgaria and speaks Bulgarian. She obtained the equivalent of the High School Certificate in Bulgaria. When they met they communicated in broken English. On 7 March 1980 they married. On 14 March 1980 they left Bulgaria as they agreed to move to Lebanon. During their marriage they have lived both in Australia and in Lebanon. 11Between 1980 and January 1984 they lived in Lebanon. In 1984 the Nassifs moved to Australia. In 1988 the Nassif family returned to Lebanon. In 1995 the returned to Australia. There are two, now adult, children of the marriage. Their first child, Sarkis was born in Lebanon in 1983. In 1985 their daughter Hanan was born. In 1988 the Nassifs returned to Lebanon so that their children could learn Arabic and spend time with Steve Nassif's family. In 1995 they returned to Australia and have remained here ever since. 12From the outset of their relationship Christine Nassif says she was fully dependent on her husband and that they did not have an equal relationship. She felt that she was expected to be a traditional Arab wife. 13In 1987, the Nassifs started their first business, a coffee shop in Burwood. It failed. In about 1988 they started a second coffee shop. While Steve Nassif's evidence is that Christine occasionally worked in the kitchen, she says she did do more than that. She served customers and dealt with payments. During this time Steve Nassif also started building work and developing land. 14In 2000, Steve Nassif commenced his first property development of a block of 38 units at Burwood. It was successful. 15In 2001, the Nassifs bought the cafe premises in Burwood from their landlord. The building comprised of five shops which were rented out and for which they received rental income. In 2002 they sold the cafe and Christine Nassif stopped work. They sold the building of shops for $3.3M. 16They found a house in Wentworth Falls. Steve Nassif's affidavit says they "wanted to buy a house in the Blue Mountains and that she looked at several houses", she deposed that she said to Steve, "Buy this house for me". He did so, paying cash in full for the house in her name alone. Christine Nassif elaborated on this by giving evidence that she wanted the house in her name as she wanted security and no longer wanted to be involved in her husband's development projects. She wanted her share of the proceeds of the sale from the cafe premises to be put towards her home. She was happy to stay at home looking after her family and her home. 17Steve continued his building and developing work and during that year Steve Nassif bought his second development of a block of 12 home units in Burwood. This development was successful. In 2003, Steve Nassif commenced a further development of a block of six units at Burwood. In 2004, he built a block of 23 units in Pennant Hills for a client. 18In 2005, Steve Nassif and the Sherene Group began the Speers Point, Lake Macquarie development. This development involved building 15 residential apartments and two commercial units over three storeys. The property is located on a corner site on The Esplanade at Speers Point opposite the Lake Macquarie Foreshore and has waterfront views. Speers Point is 2 kilometres west of Warners Bay and 15 kilometres south of Newcastle. It is the Speers Point development (Speers Point) for which Bankwest provided finance and gives rise to these proceedings. 19Steve Nassif has three brothers, Ray (Ramez), Milad and Joseph (Youssef). Together these brothers, through various legal entities, have been involved in property development projects. The Nassifs' son Sarkis and daughter Hanan were also involved in the Speers Point project. Sarkis ran the building arm with his father. Hanan was the bookkeeper.

Steve Nassif's Evidence 20It is convenient at this stage, that I record my observations and findings in relation to Steve Nassif. Counsel for Bankwest submitted that Steve Nassif was an advocate in Christine Nassif's case. 21I closely observed Steve Nassif when he gave evidence and was cross examined. I found him to be a most unimpressive witness. At times he was uncooperative, he deliberately provided non-responsive answers to questions, he suffered from convenient failures of recollection and an inability to understand questions. He also took many opportunities to volunteer irrelevant comments even when this court asked him to refrain from doing so and cautioned him to listen and answer the questions that were asked. Mostly he wanted to express his view that the bank was to blame for whatever had happened. Throughout this judgment I have referred to some of his evidence. 22It is my view that the evidence of Steve Nassif is unreliable. I do not accept it except where I say otherwise or where his evidence is corroborated by documents or another witness, other than Christine Nassif. I have made separate findings about Christine Nassif's evidence towards the end of this judgment.

Jones v Dunkel Inferences 23Before I leave the topic of evidence, both parties made submissions that I should draw Jones v Dunkel (1959) 101 CLR 298 inferences for the failure to call a number of witnesses. Counsel for Bankwest submitted that I should draw Jones v Dunkel inferences for Christine Nassif's failure to call Hanan Nassif and Sarkis Nassif and other family members. So far as Sarkis Nassif is concerned, at least for part of the hearing he was in Lebanon. In relation to Hanan Nassif and other family members, as said in Fabre v Arenales (1992) 27 NSWLR 437, at 450 per Mahoney JA, a Jones v Dunkel inference may not arise if a "witness has a reason for not telling the truth or refusing to assist and the party who may call [the witness] is aware of this." 24It would be difficult for the adult children to give evidence about their father's dominance over their mother, particularly as they still have regular contact with both parents. I do not draw a Jones v Dunkel inference arising from Christine Nassif's failure to call these witnesses. 25Counsel for Bankwest submitted that I should make Jones v Dunkel inferences against those who witnessed documents signed by Christine Nassif, such as solicitor Leny Cassano-Ramirez and Mrs Gloria Trevallion, her 92 year old friend and neighbour. 26In so far as this category of witness is concerned, I am prepared to draw Jones v Dunkel inferences that they would have given evidence to whether or not Christine Nassif was present when they witnessed documents signed by her. None of them were called and no explanation was given as to why this was so. I am prepared to draw Jones v Dunkel inferences that their evidence would have assisted Christine Nassif's case that her signature was not witnessed in front of them. 27Counsel for Christine Nassif submitted that a Jones v Dunkel inference should be drawn in relation to Bankwest failing to call its employee Michael Craven. I do not think Michael Craven's evidence was necessary. Bankwest's evidence was adequately covered by Grant Murphy. Hence, I do not draw a Jones V Dunkel inference in relation to Michael Craven.

Prior National Australia Bank dealings 28With respect to any dealings with the National Australia Bank, Christine Nassif says that she was generally aware that Steve borrowed money but she did not know that she was involved in any loan or guarantee with National Australia Bank or the nature of any documents that she signed. She signed the documents at Steve's direction and that she felt obliged and still feels obliged to sign all documents Steve directed her to sign. 29Christine Nassif signed guarantees with the National Bank on 21 March 2003, 7 August 2003, 11 March 2004, 26 August 2004, 21 February 2005 and 9 June 2005. It was in relation to the guarantee dated 9 June 2005 that Christine Nassif was required to provide a mortgage on the Wentworth Falls property to NAB. Further guarantees were provided on 27 July 2005, 15 December 2005 and 11 August 2005. With respect to day to day banking, she says that Steve's employees or himself would complete any bank documents such as deposit slips and she would simply take the documents and/or money and cheques to the bank. She says that she did not question her husband about any of his business dealings and that it was her obligation as his wife to do as she was told. 30On this topic, Steve Nassif's evidence is confusing and I have set some of it out below. Q. You agree that by 2003 Christine Nassif had been on a number of occasions been provided with information by the bank about what a guarantee and indemnity is? A. Most of the time I do give Christine advice that we're buying something, we have to sign some document for the bank, and yes that's what I - on my direction. Q. Steve Nassif, thank you so much for that but I'm asking you to accept that by 2003 on a number of occasions the bank had provided Christine Nassif with information about what a guarantee and indemnity is? A. I didn't - I wasn't with the bank when he was with her or how he explain to her. When we purchase the property in two-nine(?) I used to say it's good and let's sign the document, there was no legal advice there. HER HONOUR: That's not the question, try and listen to the question. BELLAMY Q. I'll ask the question one more time and if you don't answer it I'll make submissions adverse to your interests and Christine's interests about it and about your credit. I'm asking you to acknowledge that up to 2003 on a number of occasions Christine Nassif had been provided with information by the bank about what a guarantee and indemnity is, do you agree or not? A. The bank send me this document, yes, and she never went through. Q. Do you disagree, she was never provided with information by the bank about what a guarantee and indemnity is? A. When the bank manager signed(?) her document but he was talking to her he did explain to her, yes. Q. You accept that-- A. And then - I was the interpreter then. Q. Say that part again, please. A. When she sign the indemnity I was with her and the bank manager when we purchase something in our name and he used to tell her that this guarantee for this project, if we don't pay the money we'll take the - what we are buying and I used to say - explain to her in Lebanese and he used to - she was - in my direction she was - sign the document, yes. Q. So your evidence is that the bank manager would give her information about what a guarantee and indemnity is, you would then translate it to her and at the end of the translation you would say sign the document, is that right? A. Yes. ... Q. And I gather you'd tell her that in Lebanese, would you, to sign the document? A. Yeah, I say to her yes sign it because it's, you know, it's good for us. (T74-75, 8/2/12) 31Then in re-examination Steve Nassif's evidence was: Q. You recall Mr Bellamy asked you a number of questions in relation to explaining various documents to your wife Christine and that you would translate those documents in Arabic to Christine, do you recall that evidence sir? A. Yes. Q. And at time you recall that the bank officer was present and that the bank officer explained things to you and then you explained things to Christine? A. Yes. Q. Do you understand sir what the word 'translate' means? A. Yes if you speak English I translate to Lebanese. Q. Mr Bellamy asked you some questions in relation to a mortgage document which is found at page 102 and 103, volume 1 of 3 of the tender bundle. A. Sorry, what was the number? Q. Pages 102 and 103. And you see at page 103 the signature of Robert Noel Dudley on the top half of that page. Did Mr Dudley explain this document to you in the presence of Christine? WITNESS: He was asking me and I was explaining to Christine in that time, yes. (T 74-75, 9/2/12) 32I make a finding that Steve Nassif did translate what the bank officer said in relation to a guarantee and indemnity. This may have occurred on more than one occasion. However, this must be understood in the light of what occurred after the translation was completed. After the translation was completed, Steve Nassif said to Christine Nassif words to the effect "sign the document". Although this evidence only relates to the prior NAB facilities not the Bankwest ones, it is likely that Christine Nassif gained some basic understanding of the legal ramifications of signing a guarantee and indemnity from the explanation given by the bank officer.

Bankwest's evidence 33Messrs Grant Murphy and Kenneth Owens gave evidence on behalf of Bankwest. Mr Owens had little involvement in the management of the loan. Mr Grahame Murphy now holds the position of State Manager, Queensland with Bankwest. In 2007, Grant Murphy was newly employed as a Regional Manager at Bankwest. He was approached by a finance broker, Jason Ganis of iFish Finance, together with Steve Nassif. Grant Murphy had a prior existing business relationship with Mr Ganis. Most of Grant Murphy's initial dealings, comprising of 10 to 15 telephone calls in relation to providing finance for the Sherene Group, were with the solicitor who acted for Sherene Formwork Group, Mr John-Paul Shehata of Simpson Freed Lawyers. Grant Murphy understood from these conversations that Shehata and Steve Nassif required a complete refinance including personal liabilities of all parties. 34Bankwest proposed to lend funds to refinance NAB, clear up disclosed creditors and provide a modest amount for living, as the Speers Point project was only several months away from completion. The facilities that were required were an existing business edge loan with a limit decreased from $5.950M to $1,35M; an existing business bonus overdraft facility with a facility limit increased from $200,000 to $250,000; a new commercial advance facility with a limit of $2M; a new business edge loan with a limit of $2M and a new business bonus overdraft facility with a limited of $150,000. The purpose of the business edge loan included the refinance of the Sherene Group's NAB facilities. 35Grant Murphy prepared a credit risk submission. He noted firstly, that a number of major trends in housing were evident within the greater Newcastle area where there was a general demographic shift to high density living from the older residents, who were moving from larger homes to smaller, low maintenance, newer properties within the same locality such as residential units; secondly, the trend had seen a number of medium density developments constructed in recent years that had the backing from local council, in its desire to turn areas that were well located to shopping precincts and transport hubs into high density development areas; thirdly, there had been an increasing number of small/medium density developments in western Lake Macquarie which has generally been well received when placed on the open market, primarily due to transport and shops; and finally, the fact that residential vacancy rates were at very low levels, it was encouraging first home buyers to consider purchasing rather than renting and furthermore with strengthening rental investors would eventually return to the market. 36Grant Murphy in his submission made reference to the Nassifs being a traditional Lebanese construction family. By that he meant that all family members are heavily and actively involved in the business such as the son running the building company, the daughters running the financial company and paying all the creditors or the son-in-law being a shareholder and director in every one of the entities going from direct siblings, once removed to son-in-law (T32, 13/12/11). 37Grant Murphy recorded that Steven Nassif's group was heavily dependant on reputable third party advisors, whereby, they had engaged quantity surveyor, Rider Hunt and a valuer, Duponts prior to seeking finance with Bankwest. The submission also recorded that the director was Steve Nassif who had over 20 years experience in the commercial development industry. Grant Murphy recorded that due to Steve Nassif's experience in the industry and the successful completion of prior developments, he had been able to acquire many properties including his principal place of residence at Wentworth Falls which was at that time worth in excess of $2M, which total a net worth of $4.95M. 38The entities involved in the project were Sherene Formwork Group Pty Ltd, created for the sole purpose of the development at Speers Point, and Trioplex Constructions Pty Ltd, which was engaged via a fixed price building contract for the construction arm. The corporate diagram of Sherene Formwork Group is as follows: 39The sole director of Sherene was Steve Nassif. The directors of Trioplex Constructions Pty Ltd were Steve Nassif and Sarkis Nassif. 40On 16 March 2007, after considering the lending viability and three exit strategies, Grant Murphy recommended the facilities on the basis that Sherene obtained presales of $2,700 net of GST; a proven record with 75 percent of construction was already completed with the remaining to be completed by the end of April 2007 and the primary exit strategy was from the sale of individual lots within a 12 month period. From then on it was Grant Murphy who had most of his dealings with Steve Nassif. 41Grant Murphy knew as the relationship banker to Steve Nassif and the Sherene companies that Sherene had no other independent sources of income other than rental income and the sale of units in the development. (T43.35; 44.5-10).

Variation 1 (21 March 2007) 42On 21 March 2007, Bankwest agreed to refinance and to provide the following facilities to Sherene Formwork Group Pty Ltd. It agreed to provide a commercial advance facility in the amount of $4.6M; a business edge loan in the amount of $5.6M and an overdraft facility in the amount of $400,000 (CB 7 & 8). The facilities offered ("the Speers Point facilities") were for the completion of the construction of 18 residential units at the Esplanade, Speers Point NSW ("the Speers Point property"). Guarantees were provided by Steve Nassif, Hanan Nassif and Trioplex Constructions Pty Ltd. As at 21 March 2007, there was no requirement that Christine Nassif provide a guarantee. 43On 29 May 2007, by letter of variation, the Speers Point facilities were varied (Variation 1). The terms of this variation were an existing business edge account with a limit increase from $5.6M to $5.960M; an existing business bonus overdraft with a facility limit decrease from $400,000 to $200,000; a new commercial advance facility with a limit of $125,000 and an existing commercial advance facility with the limit remaining at $4.6M. Variation 1 did not require Christine Nassif to sign a guarantee. 44On 6 June 2007, Christine Nassif signed a statement of her assets and liabilities for Bankwest. She did not complete the form or write what her assets and liabilities were, nor did she insert the figures for those items. In that document she stated that her liability was the current amount owing on NAB for the loan (no amount was stipulated) and her assets were cash on hand $7,000, the Wentworth Falls property at a value of $1.3M (Ex 2), jewellery at $30,000 and furniture $200,000. I accept the handwriting on the document was Steve Nassif's, but the document was signed by Christine Nassif.

Variation 2 - Refinance of the NAB's Facilities (July 2007) 45In about July 2007 Sherene sought a refinance of its NAB facilities. Christine Nassif had previously given a guarantee to the NAB with respect to these facilities. In excess of $4M sought to be refinanced by Bankwest. The NAB facility was supported by a first registered mortgage on Christine Nassif's Wentworth Falls property. 46On 25 July 2007, by letter, Bankwest agreed to refinance the NAB facilities of the Nassif family. The NAB facilities were repaid and Christine Nassif was released from the guarantee to NAB. 47The facilities were now an existing business edge loan with a limit decreased from $5.950 to $1.350M, an existing business bonus overdraft facility with a facility limit increase from $200,000 to $250,00, a new commercial advance facility with a limit of $2M, a new business edge loan with a limit of $2M, a new business bonus overdraft facility with a limit of $150,000, an existing commercial advance facility with the limit remaining at $4.6M and an existing commercial advance facility with the limit remaining at $125,000. As previously stated, the purpose of the business edge loan included the refinance of the Group's NAB facilities.

The first guarantee given by Christine Nassif 48Guarantees were now required from Joseph Youssef, Steve Nassif, Hanan Nassif, Christine Nassif, Sarkis Nassif, Ellis J Enterprises Pty Ltd and Steve Nassif as trustee for the Nassif Family Trust. A fixed and floating charge was provided by Sherene, Ellis J Enterprises and Trioplex Constructions; and mortgages were provided by Sherene over the Speers Point Property and Hanan Nassif over the property at Wentworth Falls (Hume Avenue property). 49On 11 August 2007, the guarantors signed the guarantee and indemnity. All the signatures on this document were witnessed by George Aziz, a Justice of the Peace. 50George Aziz also witnessed Christine Nassif's statutory declaration, the contents of which read: "1. I am one of the Guarantors named in certain loan and security documents relating loans to be provided by Bank of Western Australia Ltd ABN 22 050 494 454 to Sherene Formwork Group Pty ltd ACN 099 220 747 and Ellis j Enterprises Pty Ltd ACN 101 549 428. 2. I have received independent legal advice regarding the loan and security documents referred to in paragraph 1. 3. I have freely and voluntarily signed the small business and consumer guarantee and indemnity forming part of the loan and security documents." 51The statutory declaration bears the date 1 August 2007. By signing this document Christine Nassif also is declaring that she had received legal advice and voluntarily signed the guarantee and indemnity, although she did not do so. This statutory declaration was only required for this Variation. 52On 11 August 2007, George Aziz also witnessed Christine Nassif's signature on the two mortgages over the Wentworth Falls property. 53Christine Nassif's evidence is similar in relation to every document that she was required to sign. That is she recalls seeing a document similar to the document (variation of facility documents) around the house. She has not read the document and cannot say for sure whether this is the document she saw around the house or not. She recalls signing a page (the signature page of the guarantee). At the time she signed it she says that her husband provided her with that page only and that she cannot recall the date she signed the document. Christine Nassif believes she signed the document at her home in Wentworth Falls when her husband asked her to. She recognises the name of the witness to her signature. She does not recall ever signing a document in the presence of that witness, although she recognises the signature of the witness, in this case George Aziz. 54So far as Variation 2 is concerned, Christine Nassif does recall signing the document in front of George Aziz. Christine came to know George Aziz as he had an office in the building in Burwood where the Nassifs had their café and he was a customer. George Aziz also witnessed the signatures of Joseph Youssef, Hanan and Sarkis Nassif on the guarantee. Christine Nassif recalls signing a document similar to the Statutory Declaration when her husband presented a single page to her. In each instance, she recognised the name of the witness to her signature but she does not recall signing it in front of George Aziz.

The claim by Boral and the proposed sale of the Wentworth Falls property 55On 24 August 2007, Boral Resources (Country) Pty Ltd obtained judgment against Steve Nassif, Sarkis Nassif and Christine Nassif in the sum of $73,544.58 in the District Court. 56Between 2006 and 2008, Christine Nassif recalls that sometimes a male person attended her home at Wentworth Falls. He asked, "Is Christine Nassif here? Is Steve Nassif here?" At the time Steve was not home. The person gave her a document and she gave the document to Steve on his return. As she had no interest in the document she did not ask the male person or Steve about it and did not know the nature or substance of the document. 57Christine Nassif says that at no point was she aware of her involvement with a company called Boral Resources. She did not know she was involved in any court proceedings to do with Steve or his company. She deposed that she first became aware that she had signed documents in relation to Boral Resources when documents were discovered in these current proceedings. 58On 5 October 2007, NAB's discharge of over the property was registered (discharge of mortgage number XXXXX). On the same day, Bankwest registered its mortgage over the property (registered mortgage numbers XXXXX and XXXXX). 59By the end of October 2007, Christine Nassif's evidence is that she knew that there were money problems and that her husband's business was not going well. Around this time in about November 2007, Grant Murphy of Bankwest also became concerned about Sharene's financial position and realised that the bank needed to take a greater degree of control on the Speers Point development and the file was transferred to Michael Craven. According to Grant Murphy, Michael Craven had the time and capacity to focus on the file and to try and mitigate the credit risk for the bank (T61.5, 13/12/11).

Variations 3 and 4 (16 December 2007 and 22 January 2008) 60An additional facility variation took place by letter of variation dated 10 December 2007 accepted by the borrower on 26 December 2007. The facility expiry dated was extended to 31 December 2007. A further facility variation, that took place by letter of variation dated 16 January 2008, was accepted by the borrower on 22 January 2008 and the facility expiry date was extended to 31 January 2008. 61So far as Variation 3 is concerned Christine Nassif recalls seeing a document similar to this document around the house. She did not read the document and cannot say for sure whether this is the document she has seen around the house or not. She recalled signing a page that appears at B983 (a guarantor's acknowledgement). The guarantor's acknowledgement at (g) says, "I have obtained independent financial and legal advice regarding their obligations under the guarantee and indemnity". At the time she signed it, her husband provided her with that page only and she cannot recall the date she signed the document. Christine Nassif believes that she signed the document at her home in Wentworth Falls when her husband asked her to. She recognises the name of the witness to her signature. She does not recall ever signing a document in the presence of Gloria Trevallion. 62Gloria Trevallion is now aged 92 and is a friend and neighbour at Wentworth Falls. She comes over to Christine Nassif's house a few times a week, as she loves the garden. Steve Nassif says that he asked Gloria Trevallion to witness Christine Nassif's signature at a time when Christine Nassif was not present. While Gloria Trevallion's signature appears on the documents, she was not called to give evidence by either party. 63So far as Variation 4 is concerned (a guarantor's acknowledgement) Christine Nassif's evidence is the same as before; she recalls seeing a document similar to this document around the house. At the time she signed it her husband provided her with that page only. She cannot recall the date she signed the document. Christine Nassif recognises the name of the purported witness to her signature. She does not recall ever signing a document in the presence of Suzanne Arabi. Suzanne Arabi is a bookkeeper who worked for the Nassifs. 64There was still no requirement that a Certificate of Independent Advice be provided by Christine Nassif in relation to the existing guarantee.

Variation 5 (7 March 2008) 65On 7 March 2008, Variation 5 was agreed to by the borrower. On 11 March 2008, as part of the variation, Christine Nassif (together with Steve Nassif as trustee for the Nassif Family Trust (and in his own capacity), Hanan Nassif, and Sarkis Nassif) gave a further guarantee and indemnity dated 11 March 2008, limited downwards to $8.842M. Joseph Nassif gave a guarantee limited to $1.2M. 66So far as Variation 5 is concerned, Christine Nassif once again recalls seeing a document similar to that document around the house. She has not read the document and cannot say for sure whether this is the document she had seen around the house or not. She recalls signing the signature page of the guarantee that was handed to her by her husband. She believes she signed the document at her home in Wentworth Falls when her husband asked her to. She recognised the name of the purported witness to her signature but she does not recall ever signing a document in the presence of Steven Bohm. Christine Nassif thinks that Steven Bohm is a neighbour. She says that she was not present when he witnessed her signature on the documents. She does not know whether Hanan or Sarkis were present when Mr Bohm signed the documents. 67On 8 September 2007, Porsche Lee Remington deposed that she served Christine Nassif personally with a bankruptcy notice at her address at Wentworth Falls. 68On 16 April 2008 at 6.22 pm, John Daley, a process server, deposed that he attended the premises to service Christine Nassif with a bankruptcy petition. He says that at the time of service he asked Sarkis Nassif if Christine Nassif was present to accept service, Sarkis Nassif replied, "Yes she is". Sarkis Nassif then called and motioned for Christine Nassif to come out of the house to accept service. Mr Daley says that Christine Nassif refused to come out and he then called out that he was leaving the documents. 69On 23 April 2008, Mr J P Shehata, solicitor employed by Simpson Freed, wrote to the solicitors acting for Boral. The letter states: "As you are aware one of our clients, Christine Nassif, owns the family home which is mortgaged to BankWest. The consequences of your client's application will be devastating to our client [Christine Nassif] and yours as the bank would then exercise its power of sale and there would be no funds available to your client as an unsecured creditor. Our clients commitment to satisfying the debt to your client is of utmost importance to them." 70Christine Nassif's evidence is that she did not speak to Mr Shehata nor did she provide this information to him. 71On 11 June 2008, Mr Shehata wrote to Gadens saying that he acted for Christine Nassif who had exchanged contracts to sell her property at Wentworth Falls. Mr Shehata confirmed that contracts were exchanged on 28 May 2008 and completion was due on 9 July 2008. The information contained in this letter is correct as Christine Nassif recalls that the property was to be sold to her sister-in-law Ms Gregory. 72On 12 June 2008, Mr Shehata wrote to Christine Nassif saying that the contract had been exchanged and that Bankwest had to agree to discharge the mortgage. Christine Nassif says that she knew about the subject matter of this letter from her family members.

Variation 6 (28 July 2008) 73On 28 July 2008, by letter of variation, an additional facility variation was accepted by the borrower. This variation was that the facility expiry date was extended to 13 December 2008, a new business edge loan with a facility limit of $9,023M, a new business bonus overdraft facility with a limit of $530,000 and a new business bonus overdraft facility with a limit of $180,000. The liability to the bank had now increased to $9.743M. 74On 4 August 2008, the offer of variation was accepted. Christine Nassif signed the guarantor's acknowledgment and the date 4 August 2008 appears. Her signature was witnessed by George Simeonov. 75As far as Variation 6 is concerned, as per her earlier evidence, Christine Nassif deposed that she recalls seeing a document similar to that document around the house. She has not read the document and cannot say for sure whether this is the document she had seen around the house or not. At the time Christine Nassif signed the guarantor's acknowledgement her husband provided her with that page only. She believed that she signed the document at her home in Wentworth Falls when her husband asked her and recognised the name of the witness to her signature as George Simeonov. She does not recall ever signing a document in the presence of George Simeonov. 76This time a Certificate of Independent Advice was required. On 11 August 2008 a solicitor, Robert Barraket, certified that he had provided legal advice to Christine Nassif concerning the letter of variation and the guarantee and indemnity. In that document, Christine Nassif acknowledged that she had read the certificate; that the certificate was provided at her request; that she did receive the explanations referred to and understood them and that the matters stated in the certificate were true and correct and that she signed the guarantee freely and voluntarily. 77There were three Certificate of Independent advice in relation to the guarantee entered into by Christine Nassif. One dated 11 August 2008 and another dated 20 January 2009 were signed by solicitor Robert Barraket. Robert Barraket gave evidence and was cross examined. On 17 November 2008, a Certificate of Independent Advice was signed by solicitor Clara Leny Cassano-Ramirez.

Evidence of Robert Barraket in relation to the Certificates of Independent Advice 78While counsel for Christine Nassif did not submit that Robert Barraket gave untruthful evidence, they submitted that he was mistaken. 79Robert Barraket, a solicitor who has been admitted as a solicitor for some 45 years, gave evidence and was cross-examined. I accept his evidence. He gave truthful evidence and made frank admissions even when his evidence was against his interest. He does not practice in banking law. Over the last 45 years he has only provided advice in relation to guarantees and obligations as guarantor on about 20 occasions. When he has given such advice, he is usually acted for the mortgagor in the transaction. 80In about 2005, Robert Barraket first met Steve Nassif. They became friends. From time to time they met for coffee and/or dinner. Through discussions with Steven Nassif over this time, Robert Barraket understood that he (Steve) was active in the property development industry. He also understood that in 2005, a property at Strathfield (actually the Burwood property) was sold and Christine Nassif had bought the Wentworth Falls property. 81In 2005, Robert Barraket and his partner together with Steve Elias (Steve Nassif's cousin) and his family went to lunch with the Nassifs at a restaurant in Leura. Over lunch all conversations were conducted in English. Robert Barraket observed that Christine Nassif spoke and understood English. A few months later Robert Barraket attended a family lunch of between 20 and 30 at the Nassifs and a wedding of a relative of the Nassifs. During these events, he observed Christine Nassif conversing with people in Arabic and English. At the Leura restaurant Robert Barraket observed Christine Nassif read a menu and order in English. 82In 2006, Robert Barraket recalled visiting Christine and Steve Nassif's home at Wentworth Falls for a family lunch. He also attended a number of other social events including Joe Nassif"s wedding at Bankstown and Anne's wedding. On these occasions Christine, Steve Nassif and Robert Barraket spoke in English. Robert Barraket formed the view that Christine Nassif understands English perfectly well. He did not observe that Christine Nassif was subservient to the wishes of her husband (T134, 15/12/11). 83In 2006, Robert Barraket became aware of the Speers Point development from Steve Nassif. He understood that Sherene had acquired a property for development. He also understood that Steve was a director of Sherene. He did not know the name of the company initially but was aware that Steve was the shareholder and a director, but that Christine was not. 84In late 2006/2007 Robert Barraket recalls a conversation with Steve and Christine Nassif in the kitchen at the Wentworth Falls property about which properties were in each persons names. He recalls the conversation as follows: Mr Barraket: "You really should be careful about having the properties in family members names. There are some real problems that could arise if Hanan and Joe were to get divorced or Christine, Joe or Hanan were to die. You need to make sure that there is some strategy in place so that is one of you or they were to die the assets go to the right family members." Steve: "I know that we have to get you to do this for use." Christine: "I own the house because Steve and Sarkis are directors of the companies. Steve and I need to make sure that the bank can't get the house if there was a problem." Me: "The problem is more about what happens when someone dies. If Christine died and you got the house you would lose any protection that you had if you inherited the house from Christine." 85So far as that Certificate of Independent Advice dated 11 August 2008 is concerned Robert Barraket does not have a specific recollection of providing Christine Nassif with legal advice. He does not have a file nor does he have any file notes in relation to this matter. The documents were signed in a social setting. He thinks that he signed this certificate in the kitchen of the Nassifs' house at Wentworth Falls on the morning of 11 August 2008 in the kitchen when Steve was also present. While Robert Barraket does not recall taking her through the acknowledgment in detail. The advice he gave her was general advice that she had signed a mortgage over the property and that she wanted to increase the amount of the mortgage and that there was an offer from the bank. He told her that she was providing a guarantee. Robert Barraket had had a discussion with Steve Nassif about asset protection. As this was a discussion he had had on prior occasions with both the Nassifs so he did not sit down and take Christine Nassif through it specifically but he did say to her that she did not have to sign it. But if she wanted the money to complete Speers Point she would be increasing the mortgage and she had provided the guarantee to the bank and that she would be liable as a guarantor and she could lose everything. 86Steve Nassif often asked Robert Barraket his view on how the Nassif family was structured. Christine Nassif on one occasion specifically said to him, "the house is in my name in case something goes wrong" (T134, 15/12/11). 87While Robert Barraket knew that there was to be an increase in Christine Nassif's exposure of several hundred thousand dollars, he did not know that the debt was greater than $9M (T143, 15/12/11). 88The relevant part of the certificate reads: PART B EXPLANATIONS GIVEN BY THE CERTIFYING SOLICITOR I certify THAT I GAVE LEGAL ADVICE IN RESPECT OF THE DOCUMENTS REQUIRED TO BE SIGNED BY THE Client and I EXPLAINED to the Client: the viability of the transaction with the Borrower was undertaking; the Borrower's ability to make the required payments to the Lender; the Client's ability to make payment to the Lender. I FURTHER INFORMED the Client that, if in any doubt on those aspects, the Client should obtain independent financial advice before signing the documents. PART D STATEMENTS BY THE PERSONS SIGNING DOCUMENTS FOLLOWING THE ABOVE EXPLANATIONS, the Client stated to me: that he or she understood my advice as to the obligations and risks involved in signing the documents; and that he or she was signing the documents freely, voluntarily and without pressure from any person. 89Likewise, Christine Nassif acknowledged that: I did attend the office of the certifying solicitor on the date recorded in the certificate for the purposes of receiving legal advice on the nature and effect of the documents referred to in the certificate; I have received the explanations referred to an have stated to the solicitor that I understand those explanations. 90On 4 August 2008, Christine Nassif signed the guarantor's acknowledgement at (d) she acknowledged that she had obtained independent financial and legal advice regarding her obligations under the guarantee and indemnity. I accept that Christine Nassif signed the guarantor's acknowledgment and the guarantee seven days prior to the solicitor, Robert Barraket, providing independent legal advice but nothing turn on this as had she known about this discrepancy in the date she would have signed the documents in any event. 91In cross examination Christine Nassif gave evidence that she remembers a man called Robert Barraket. She denies that in 2006 or 2007 she told him that the Wentworth Falls house was in her name. She says that she has never had a conversation with Robert Barraket about any guarantee and denies that he provided her with any legal advice. Christine Nassif says that the Certificates of Independent Advice signed by Robert Barraket are untrue (T18, 10/2/12). She says that she has never spoken to Robert Barraket at about her guarantee or about the mortgage (T21, 10/2/12). 92Christine Nassif gave the following evidence (T22-23, 10/2/12): Q. Do you remember that you sued Mr Barraket? A. WITNESS: Yes. Q. You took legal action against him? HER HONOUR: She's nodding her head yes. WITNESS: Yes. ... Q. And do you remember alleging that Mr Barraket provided you with legal services? A. INTERPRETER: That he provided me with? Q. Yes. A. INTERPRETER: She says not provided. Q. Anybody who said that Mr Barraket provided you with legal services would be telling a lie, wouldn't they? A. WITNESS: Yes. Q. Or they'd be absolutely wrong? A. WITNESS: Yes, wrong. Q. Just turn to paragraph 18 of the cross-claim. ... Q. Doesn't that say there-- A. WITNESS: Yes. Q. --that Mr Barraket provided legal services to the cross-claimant? A. WITNESS: Yes. Q. And the cross-claimant is you, isn't it? A. WITNESS: Yeah, it says like that. Q. So that's just wrong, isn't it? A. WITNESS: For me yes. 93Steve Nassif gave evidence that when he took the document to Robert Barraket it had already been signed. At T37-38, 9/2/12 he gave the following evidence: Q. Now Steve Nassif are you saying that in July 2009, you didn't think there was anything wrong with having people witness Christine Nassif's signature after the event? A. Maybe I did know and but in that time I was desperate to finish the project. ... Q. No, no but you're not being asked that. You're asked did you ever go to somebody to get them to witness Christine's signature when Christine wasn't present and they said no I'm not going to do it? Did that ever happen? A. Not that I recall, no. Q. No-one said well I can't do it unless you bring Christine here? A. No. Q. Do you remember anything like that ever happening? A. No. 94For reasons previously given, I do not accept Steve Nassif's evidence on this topic, nor do I accept the evidence of Christine Nassif (I have explained why later in this judgment). I prefer and accept the evidence of Robert Barraket.

Variation 7 (24 October 2008) 95This variation was that the existing business edge loan with a facility limit was increased from $9.023M to $9.463M, and existing business bonus overdraft facility with a facility limit decreased from $530,000 to $430,000 and an existing business bonus overdraft facility with the limit remaining at $180,000. 96On 7 November 2008, Christine Nassif signed the guarantor's acknowledgement. Her signature was witnessed by Sarkis Bou-Melham. Sarkis Bou-Melham is a relative of Steve Nassif. 97As far as Variation 7 is concerned Christine Nassif, once again recalled seeing a document similar to that document around the house. She had not read the document and cannot say for sure whether this was the document she had seen around the house or not. She recalls signing a page that her husband provided her with. She believes she signed the document at her home in Wentworth Falls when my husband asked her to. She recognises the name of the witness to her signature but does not recall ever signing a document in the presence of Sarkis Bou-Melhem. 98On 17 November 2008, solicitor Carla Leny Cassano-Ramirez certified the provision of legal advice to Christine Nassif concerning the letter of variation and the guarantee and indemnity. In that document Christine Nassif acknowledged that she had read the certificate; that the certificate was provided at her request; that she did receive the explanations referred to and understood them and the matters stated in the certificate were true and correct. The signature of Christine Nassif appears. 99Ms Cassano-Ramirez did not provide an affidavit nor was she called to give evidence. Steve Nassif gave evidence about the circumstances in which the certificate was signed. According to Steve Nassif, Ms Cassano-Ramirez was a good friend and his accountant. She was also admitted as a solicitor. Steve Nassif's evidence is that he said to her that he needed documents to be signed. She said "that's okay". Steve Nassif signed the documents in front of her. According to Steve Nassif, Ms Cassano-Ramirez then asked him to obtain the driver's licence numbers of Christine, Sarkis, Hanan and Joseph. Steve Nassif called them, relayed the licence numbers to Ms Cassano-Ramirez and she wrote them into the Certificates of Independent Advice and signed the Certificates. 100Even though Steve Nassif gave evidence that as far as he was concerned Ms Cassano-Ramirez knew that she was signing Certificates of Independent Advice for Christine, Sarkis, Hanan and Joseph without giving any of them any legal advice, I do not accept this evidence. Steve Nassif's evidence amounts to a serious allegation that Ms Cassano-Ramirez did not fulfil her obligations as a solicitor. This in my view is another attempt for him to bolster his wife's case and I do not accept his evidence particularly when Ms Cassano-Ramirez has not given her account of what occurred. Without the benefit of Ms Cassano-Ramirez's evidence, I am not prepared to make any findings of impropriety against her. However, I accept that the solicitor's Certificate of Independent Advice was given 10 days after the guarantor's acknowledgement was signed by Christine Nassif.

Variation 8 (20 January 2009 - 143 to 154) 101During either the first or second week of January 2009 (before Variation 8 was signed) Robert Barraket recalled having a conversation with Christine Nassif. Christine Nassif was in tears. The conversation was as follows: Christine: "I have to help Steve by giving a guarantee for the loan Bankwest gave to Sherene. I need a certificate of independent legal advice. Can you help?" Mr Barraket: "You do not have to sign a guarantee Christine. You could end up losing everything." Christine: "I have already signed documents for Bankwest and am already a guarantor under the loan." Mr Barraket: "If Sherene had no money and could not complete construction of units at Speers Point, or could not sell the units when they were finished, you could lose everything you own." Christine: "I know Steve and Sherene are in trouble and don't have the money to finish Speers Point. If I don't give the guarantee that the bank wants we will lose everything." "I don't care if I lose everything I own, I will do whatever I can to help Steve." 102On 14 January 2009, an additional facility variation was made and accepted on 20 January 2009 (Variation 8). Pursuant to Variation 8, Bankwest varied the facility expiry date to 27 February 2009 and made available to Sherene a business edge loan with a facility limit increased from $9.463M to $9.563M; an existing business bonus overdraft with a facility limit increase from $430,000 to $600,000; and an existing business bonus overdraft with a facility limit increase from $180,000 to $190,000. 103Once again, as far as Variation 8 is concerned Christine Nassif recalls seeing a document similar to that document around the house. She did not read the document and cannot say for sure whether that is the document she had seen around the house or not. At the time she signed it her husband provided her with that page only. She cannot recall the date she signed the document but believes she signed the document at her home in Wentworth Falls when her husband asked her to. She does do not recognise the name of the purported witness to her signature. The witness to her signature was Robert Barraket, a solicitor. Christine Nassif says that Robert Barraket did not provide her with legal advice in relation to the guarantee. 104Robert Barraket says that Steve Nassif called him and asked him to sign a document. Christine and Steve Nassif arrived in a car downstairs (he was not sure whether it was the Mercedes or the BMW) at the rear of Robert Barraket's (then) office in Milsons Point. Robert Barraket thinks that Steve Nassif was driving the car and that Christine Nassif was in the passenger seat. He cannot recall whether Christine got out of the car. He is not sure whether Steve Nassif handed him some documents or whether Steve gave him the guarantee and indemnity prior to that date. Robert Barraket walked over to the car. 105It took five to 10 minutes to explain and sign the documents. Robert Barraket completed the Certificate of Independent Advice and handed it to Christine Nassif. The legal advice he gave to Christine was very general. He signed the document on the roof of the sports car; it was either a Mercedes or BMW. The writing on the first page of the solicitor's Certificate of Independent Advice is not in Robert Barraket's handwriting. That was completed by someone else. Robert Barraket says that had it been blank, he would have filled that part of the form in in his handwriting (T150, 15/12/11). There was a lot of cross examination about telephone records of three mobile phones, times and places. The cross examination presupposed that Christine Nassif had one of these mobile phones in her possession on 20 January 2009 but in the end it does not usurp Robert Barraket's evidence that the Certificate was signed on 20 January 2009. 106Robert Barraket's evidence is that then words to the effect of the statements as set out in Part D of the 2009 certificate were said to Christine Nassif.

Conversation between Christine, Steve and George Aziz in July 2009 107Christine Nassif deposes that a conversation occurred at their Wentworth Falls home. It was between Christine, Steve and George Aziz. Christine and Steve were hosting a BBQ. George Aziz is Steve Nassif's business friend of 10 years standing. They had offices in the same building. George Aziz is a Justice of the Peace. He had previously witnessed Christine Nassif's signature on a mortgage (TB 919) over the Wentworth Falls property on 11 August 2007. 108In July 2009, when Christine Nassif became aware that Bankwest sought possession of her home, George Aziz came to her home and a conversation took place in a conversation of Arabic and English and words were spoken to the effect of: George: "What's going on with the house?" Steve: "Christine had to sign a document for the bank before a lawyer but Christine was not present. Christine should have been there. The document should have been explained to her." Christine: "I did not know that. How could that have possibly happened? When did John Paul call me and talk to me with about the house." Steve: "It is not John Paul." Christine: "Who is the lawyer then who signed for me to lose the house." Steve: "Bob Barraket." George: "You can take him to court." Christine: "I have no money. How can I pay?" George: "You can take him to court through legal aid." 109Christine Nassif knows "John Paul" to be a solicitor at Simpson Freed Lawyers and she was aware he was Steve's solicitor for many years. Not long after this conversation took place she went to Centrelink to make enquiries about Legal Aid and they directed her to Legal Aid in Penrith. Steve Nassif agreed that this conversation took place as recorded above but he denies that the words "through legal aid" were said. 110There is another matter I should comment upon. Christine Nassif's did not rely upon her affidavit dated 10 February 2010 (Ex F). Portions of it were relied on by Bankwest. In swearing this affidavit she did not rely on a translator. In all her subsequent affidavits she used a translator. However in the affidavit dated 10 February 2010 she explained at [19] "I have had to ask for help with this affidavit but understand it when I read it and I confirm that it is true." In that affidavit, Christine Nassif deposed, "I knew that I had to sign the bank documents for my husband to get the money from the bank for him to finish the project" [11] and at [18] "If I had known what I know today I would never have signed the bank documents. I would have divorced my husband. My children come first. My home, second. I could divorce my husband and my children would not lose their father, he would not be lost. That would be better than my home being lost." 111Christine Nassif's affidavit explained the circumstances surrounding the preparation of this affidavit. She attended the office of Robert Tinsey in the company of her husband to discuss the Bankwest action to take possession of her house. Robert Tinsey advised her that she needed to prepare an affidavit. She remembers telling Robert Tinsey only the basic facts about her education, family and background. She says that, on the day that she signed the affidavit, Robert Tinsey pressed something on his computer and printed out a document. He gave it to her to read and she understood generally the contents of the documents. She signed it in the understanding that the purpose of the affidavit was to prevent the bank from taking her house. She did not ask any question about the affidavit because she relied on her husband and Robert Tinsey and their knowledge of dealings with the bank. 112The affidavit was witnessed by Robert Tinsey's secretary Jocelyn Williams. Christine Nassif does not recall Jocelyn Williams asking her if she understood the contents of the documents nor does she remember Jocelyn Williams delivering the oath to her. Jocelyn Williams' evidence, it is fair to say, was not of much assistance. While she recalls Christine Nassif coming in to swear an affidavit, in the company of another person, she has no recollection of witnessing it. The parts of this affidavit that were relied upon by the plaintiff contain English that is not complex. It is my view that Christine Nassif would have been able to read and understand it before she signed it.

Notice of demand 113In June 2009, Christine Nassif recalls receiving the notice of demand and it was at this time she says that she first became aware that she was a guarantor on the loan. On 2 July 2009, Christine Nassif says that she first became aware that she was the guarantor on the loan. She reiterates that she did not agree to guarantee the debts of her husband, his companies or any other person. 114In cross-examination Steve Nassif's evidence was that from time to time he made Christine Nassif a director of a company. In 2010, after these proceedings had commence, he made Christine Nassif a director of a company of a lady who wanted to open a cafe business and she wanted Steve Nassif to work with her. Because he was a bankrupt he asked Christine to become the director. Christine Nassif agreed but it was because Steve Nassif told her she had to become the director. The name of the company was AMI & Christine Pty Limited. 115Steve Nassif gave evidence that Christine became a director of the company as a favour to the "lady" so she (the lady) could open a business and Steve Nassif could deal with her and help her so she could become an Australian citizen. Steve Nassif was going to run the business for the lady and Christine would be the director. Apparently the lady had been living with the Nassifs for two years and she loved Christine like a mum. Steve Nassif says that he asked Christine to become a director of the company and that she could have said no but didn't. He said that it was an emotional decision when they did if for the lady (T61-65, 9/2/12). 116Christine Nassif's evidence is that her husband asked her to become a director of AMI & Christine Pty Limited, as "we have no choice". She says that if her husband had not directed her to become a director of the company she would not have agreed to it (T91-92, 9/2/12). 117Christine Nassif gave the following evidence: Q. You understand that part of your case against the bank is that if you had known what you were signing you wouldn't have signed the documents. It's not a well-phrased question your Honour I think I'll rephrase it. Ms Nassif, do you understand that the bank in this case relies upon a document called a mortgage that you signed. Do you understand that? A. WITNESS: Yes. Q. And at some point in these proceedings one of your lawyers has explained to you what a mortgage is? A. WITNESS: Yes. Q. And you also understand the bank in this case relies on a document called a guarantee and indemnity that you signed? A. WITNESS: Yes. Q. And someone working for you as a lawyer has explained to you what a guarantee and indemnity is? A. WITNESS: Yes. Q. And part of your case is that when you were presented with guarantee and indemnity documents and mortgage documents from Westbank [Bankwest] you didn't know what they were? ... A. WITNESS: Yes. ... (T92-93) 118Christine Nassif says that Steve Nassif is everything in her family. He is the head; he says whatever must be done at home. She says that this was something she was happy to do. She was happy to sign things that he told her to sign (T93, 9/2/12). 119She gave evidence as follows: Q. It's the case that in 2010 like today if your husband told you to sigh something you'd sign it? A. WITNESS: I can say no. Q. Do you mean to say that in 2010 your position was different? A. WITNESS: Yes. Q. So today you'd sign anything your husband told you to sign? A. WITNESS: Yes. Q. In 2007 you'd sign anything your husband told you to sign? A. WITNESS: Yes. Q. But not in 2010? A. WITNESS: I didn't refuse. I say yes in 2010. I did it when he gave me to sign. HER HONOUR Q. I thought you gave evidence that you can say no. So when can you say no? A. WITNESS: It was for the AMI Christine company, I say yes. BELLAMY Q. You said yes because you wanted to say yes? A. WITNESS: Same, absolutely same like in 2007 and 2010. Always yes I have to do it because I can't say no to him. HER HONOUR: Maybe I - I thought she said I can say no but maybe I misheard. BELLAMY: Yes, that was understanding and indeed the witness said the position was different in 2010 compared to 11 and 7. WITNESS: I can't refuse to him. BELLAMY Q. You can't refuse him? A. WITNESS: No. (T 93-94) 120On 27 February 2009, pursuant to variation 8, all the facilities fell due for repayment. In breach of the terms of the Business Edge Loan, Sherene failed to repay the Business Edge Loan upon its expiry being 27 February 2009. In the light of the foregoing evidence, it is now convenient that I record my findings in relation to Christine Nassif's evidence.

Findings in relation to the evidence of Christine Nassif 121Christine Nassif says that she is able to speak limited English and that her English skills have improved as a result of her involvement in these proceedings. She has had no formal training in English and her English skills are limited to the extent of what she has learned as a result of living in Australia. She says that she cannot read and write English well. She can communicate with people in English at a very basic and informal level but cannot read and understand complex documents such as loan documents. She says that she does not understand the complexities of commercial dealings such as the loan facilities. She says that she has no experience in business and commercial dealings and that she has always relied on Steve's directions and expertise in relation to those areas of their lives. 122Counsel for Bankwest submitted that care should be taken with the evidence of Christine Nassif, particularly as her husband sought to bolster her case. I closely observed Christine Nassif when she gave evidence and was cross examined. When Christine Nassif gave evidence, she did so with the assistance of a Bulgarian interpreter. The manner by which she gave evidence was consistent with being a comfortable understanding and she was speaking conversational English. When she was asked conversational types of questions in the witness box she did not need the assistance of an interpreter. She used an interpreter when questions involved legal terms. She could read relatively difficult English but she explained to the court that while she can read the words she does not necessarily understand their meaning. I accept this evidence. 123Before the facilities were moved to Bankwest Christine Nassif had provided signed guarantees to the National Bank on 21 March 2003, 7 August 2003, 11 March 2004, 26 August 2004, 21 February 2005, 9 June 2005 27 July 2005, 15 December 2005 and 11 August 2006. Steve Nassif gave evidence about his translation of documents to Christine Nassif in front of a bank officer, albeit a NAB one. 124On 9 June 2005, Christine Nassif provided a mortgage on the Wentworth Falls property in relation to that NAB guarantee. With Bankwest, Christine Nassif provided guarantees on 11 August 2007, 4 August 2008, 7 November 2008 and 20 January 2009. It was on 11 August 2007 that the guarantee and indemnity was secured by the Wentworth Fall mortgages. Christine Nassif signed a statutory declaration in relation to the first guarantee with Bankwest signed on 11 August 2007 to the effect that she had received independent legal advice when she did not do so. 125Christine Nassif's evidence is similar in relation to every document that she was required to sign. This includes the guarantees and indemnities. Her evidence is as follows. She recalls seeing a document similar to the document (any of variation of facility documents) around the house. She has not read the document and cannot say for sure whether this is the document she saw around the house or not. She recalls signing a page (the signature page of the guarantee). At the time she signed it she says that her husband provided her with that page only and that she cannot recall the date she signed the document. Christine Nassif believes she signed the document at her home in Wentworth Falls when her husband asked her to. She usually recognises the name of the witness to her signature but she does not recall ever signing a document in the presence of that witness. 126To accept her evidence means that two solicitors, namely Robert Barraket and Ms Cassano-Ramirez and four justices of the peace, namely George Aziz, Ms Trevallion, Susanne Arabi and George Simeonov, falsely witnessed her signature. That means that no justice of the peace or solicitor acted properly. I cannot accept this as being correct. Hence, I do not accept her evidence that she never signed the documents in front of those who witnessed her signature. I have already made Jones v Dunkel inferences that their evidence would not assist Christine Nassif's case. Nor do I accept that Christine Nassif has no understanding of the contents of the financial documents she signed and did not know what they were. In my view, she deliberately played down her understanding of financial documents and of her knowledge of what was going on in the family business. 127Even though by the end of October 2007, Christine Nassif knew that there were money problems and that her husband's business was not going well, when she was personally served with a court documents she passed it onto Steve Nassif when he got home. There were numerous documents served on her in relation to the Boral, debt as it resulted in a judgment and bankruptcy being entered that would have required a number of notices being personally served upon her. 128Even when in 2008, an arrangement was made to sell one of her Wentworth Falls properties she says that she did not speak to Mr Shehata, the solicitor acting for her this time, at all. Her evidence is that heard about this plan for the sale of one of her properties from her family members. She was aware that the property was to be sold to her sister-in-law Suzanne Gregory. The sale did not proceed. 129The only independent evidence given about Christine Nassif's capacity to understand English and of her understanding of the documents she signed comes from Robert Barraket, a solicitor and friend of Steve Nassif. As previously stated, I accept and prefer his truthful evidence. On a number of occasions between 2005 and 2008 he heard Christine Nassif conversing in both English and Arabic. Christine Nassif spoke to him in English. Robert Barraket formed the view that Christine Nassif understands English perfectly well. He did not observe that Christine Nassif was subservient to the wishes of her husband (T134). This last observation is of limited value as it was made in a social setting. I will return to the topic of Steve's role in the marriage with Christine Nassif later in this judgment. 130In late 2006/2007, during a conversation Christine Nassif told Robert Barraket that she owned the house because Steve Nassif and Sarkis Nassif were directors of the companies. She said that she and Steve Nassif needed to make sure that the Bank could not get the house if there was a problem. But Christine Nassif's understanding at this time was incorrect because in June 2005, she had signed a guarantee that was secured by mortgages over the Wentworth Falls property. Hence, as at 2005 her property was at risk if the Sherene Group facilities went into default. 131On 11 August 2008, Robert Barraket signed Christine Nassif's Certificate of Independent Advice. It was signed in a social setting. They were in the kitchen of Christine Nassif's house at Wentworth Falls. Steve also present. Robert Barraket gave Christine Nassif general advice to the effect that she had signed a mortgage over the property and that she wanted to increase the amount of the mortgage and that there was an offer from the bank. He told her that she was providing a guarantee. As Robert Barraket had had prior discussions about asset protection with the Nassifs he did not recover that ground. Christine Nassif told him that she needed to make sure the Bank could not get the house. He did not take Christine Nassif through the guarantee and indemnity in its specific terms but he did say to her that she did not have to sign it, but if she wanted the money to complete Speers Point she would be increasing the amount of the mortgage and as she had provided the guarantee to the bank and that she would be liable as a guarantor and she could lose everything. While I accept that by this time a guarantee had been signed by Christine Nassif seven days prior to this legal advice being given it would not have altered whether or not she agreed to sign the guarantee and indemnity. If Christine Nassif had had the wrong belief that the Bank could not take her house, the statement "you could lose everything" should have disavowed her of this belief. It did not prompt her to take any action to seek to be discharged from her obligations to Bankwest. 132In the first or second week of January 2009, a further conversation occurred when Christine Nassif approached Robert Barraket saying, "I have to help Steve by giving a guarantee for the loan Bankwest gave to Sherene. I need a certificate of independent legal advice. Can you help?" Robert Barraket cautioned her by telling her, "You do not have to sign a guarantee Christine. You could end up losing everything." Christine Nassif acknowledged that she was aware that she was already a guarantor under the loan to Bankwest. Robert Barraket told her, "If Sherene had no money and could not complete construction of units at Speers Point, or could not sell the units when they were finished, you could lose everything you own" and she replied, "I know Steve and Sherene are in trouble and don't have the money to finish Speers Point. If I don't give the guarantee that the bank wants by signing the guarantee and indemnity we will lose everything. I don't care if I lose everything I own, I will do whatever I can to help Steve." This conversation portrays Christine Nassif in a very different light. Christine Nassif understood that she could lose everything she owned but she would de whatever she could to help Steve Nassif. 133On 20 January 2009, Robert Barraket signed a further Certificate of Independent Advice in another informal situation but this time Christine Nassif and Steve Nassif were in a car outside Robert Barraket's office. Robert Barraket went from his office to the street outside to the car (either a BMW or Mercedes) and provided a brief explanation to Christine Nassif that took between 5 and 10 minutes. This was the explanation of the guarantee and indemnity for Variation 9 and signed when she was conscious that the Speers Point project was not going well and she could lose everything. 134There are two other matters that I should comment upon. In an earlier affidavit (10/2/2010) in these proceedings, Christine Nassif deposed, "I knew that I had to sign the bank documents for my husband to get the money from the bank for him to finish the project" [11]. This statement is consistent with what Robert Barraket says was Christine Nassif's understanding. She continued at [18] "If I had known what I know today I would never have signed the bank documents. I would have divorced my husband. My children come first. My home, second. I could divorce my husband and my children would not lose their father, he would not be list. That would be better than my home being lost." 135On 29 September 2010, after these proceedings were already underway, Christine Nassif became a director of AMI & Christine Pty Limited (Ex H). Steve Nassif's evidence is that because he is a bankrupt he asked Christine to become the director. Christine Nassif's evidence is that her husband asked her to become a director as, "we have no choice". She says that if her husband had not directed her to become a director of the companies he would not have agreed to it. (T91-92, 9/2/12). 136Christine Nassif then gave evidence that Steve Nassif is everything in her family. He is the head; he says whatever must be done at home. She says that this was something she was happy to do. She was happy to sign anything that he told her to sign (T93, 9/2/12). While I accept that signing a document to become a director of a company is not the same as signing a bank document, it is an important piece of evidence because it shows that even after these proceedings were on foot and she had received legal advice about what can occur when she signs documents at her husband's behest, she elected to revert to her prior position that she would sign anything Steve told her to. These is totally at odds to her position that after receiving legal advice earlier in these proceedings that, had she known the position she would be in today she would not have signed the bank documents and she would have divorced Steve. I do not accept this last piece of Christine Nassif's evidence. The fact is that she did know the risks she took when she signed the last three guarantees and she did not take any steps to divorce Steve. 137Nor do I accept Christine Nassif's evidence that she never had these conversations with Robert Barraket (T18, 22-23, 10/2/12). Nor to I accept her version of a July 2009 conversation with George Aziz where she inferred that Robert Barraket (whom she wrongly thought was Mr John Paul Shaharta) did not explain the Certificates of Independent Advice to her. Nor do I accept her evidence that she first became aware that she was a guarantor on the loan when she was served with a notice of demand in June 2009. The only conclusion I have reluctantly arrived at is that Christine Nassif tailored her evidence to bolster her case by portraying herself as having little or no knowledge as to her legal obligations arising out if the documents she signed when her husband asked her to do so. 138This Court also needs to comment about the role of Steve Nassif in their relationship. Christine Nassif's has what she describes as a "very traditional relationship" with her husband, Steve Nassif. She says that she does what her husband demands of her, particularly in business affairs. Her opinion is that her husband is a dominating man and he looks after all of their business affairs and she signs documents when he asks her to. 139Christine Nassif recalls that there were about one or two occasions when she asked "Why do I have to sign" [documents]. If he answered her he would reply, "It is a document for the bank. It is for money". She felt that she could not ask any more questions of Steve Nassif and that she was always expected to do as she was told. She trusted Steve Nassif and relied upon him. As he worked hard for the family, she says that she felt obliged to do as she was told, and this included the signing documents. 140It is Christine's evidence that throughout her marriage Steve Nassif would physically abuse her whenever she questioned him or tried to defend herself. She feared that he would hit her if she did not do as she was told or if she asked too many questions. Steve Nassif corroborates his wife's evidence to some extent. He admitted to hitting his wife. More telling, when asked by counsel for Bankwest if he was aware that Christine had given sworn evidence that he beat her, Steve Nassif responded with, "You might beat your wife sometime too." Then he gave confusing evidence. Q. Do you agree that you would physically abuse Christine Nassif? A. Cannot be, that's family argument, always happen. Q. Yes or no please? A. Yes. (T19) 141Steve Nassif gave evidence that he has not hit his wife for a long time and that the last time could have been in 2005 but that he had a hot temper. When asked if it was with his hands Steve Nassif relied, "Yeah of course, I pushed her or something yeah. ... A push and a smack, yes." Asked if she fell over, Steve Nassif relied, "Yes, yes she fall over one yes." A neighbour called the police who attended the house (T21-22, 9/2/12). Christine Nassif spoke of an occurrence of physical abuse when she beaten with a stick by her husband in front of her children in 1996. When the Police arrived she hid. When describing this assault she said she felt shame and became visibly upset. Christine Nassif indicated that the last assault occurred some six to seven years ago when Steve Nassif put his fist to her jaw. He had put his fist to her jaw this on previous occasions. She gave evidence that when she did something he did not like he would stare at her intently with his eyes. 142I accept Christine Nassif's evidence that she has been assaulted by her husband a number of times but had not and that he can intimidate her by staring at her intently when she does not want to do as he says. Steve Nassif has not assaulted Christine Nassif since 2005. He was dominant partner in their marriage and she was financially subservient to him.

The cross claim of Christine Nassif 143By cross claim, Christine Nassif seeks the following relief against Bankwest. A declaration that the making of the loan, and procuring the guarantee and mortgage were unjust within the meaning of the Contracts Review Act 1980; a declaration that it is unconscionable for Bankwest to enforce the loan, guarantee and mortgage as against Christine Nassif; a declaration that Bankwest is not entitled to possession of the home; an order setting aside the loan mortgage and guarantee pursuant to s 7 of the Contracts Review Act 1980; alternatively an order setting aside the loan mortgage and guarantee pursuant the equitable principles of unconscionable conduct; an order directing Bankwest to provide to Christine Nassif two discharges of mortgage in registrable form the appropriate fee within 14 days; and interest and costs. Although not specifically pleaded the loan and guarantee that Christine Nassif is seeking to set aside must be the ones sued upon, namely the ones entered into on 20 January 2009. The mortgages that are sought to be set aside are the ones that were provided on 11 August 2007. 144Christine Nassif seeks relief, firstly, pursuant to the Contracts Review Act 1980 in respect of the Sherene facilities, mortgages and the guarantee and indemnity. Secondly, Christine Nassif seeks relief in respect of the principles of unconscionable conduct in equity in so far as she was at all relevant times subject to a special disability that affected her judgment and that this was something that Bankwest knew or ought to have known in respect of the Sherene facilities and the giving of the mortgages, the guarantee and indemnity; and finally, Christine Nassif says that she was fearful and signed documents for her husband out of a sense of obligation and without any clear explanation as to the meaning and effect of those documents such as the mortgages, guarantee and indemnity. Christine Nassif relied on the principles in Garcia v National Australian Bank [1988] HCA 48; (1998) 194 CLR 395. 145Relevantly, she submitted that she did not receive any benefit of the funds advance by Bankwest, but that Bankwest had the benefit of security flowing from the Sherene facilities, mortgages and the guarantee and indemnity. She submitted that Bankwest took no active steps to ensure that she actually understood the transaction and the consequences of default, Christine Nassif says she did not receive any financial advice about a set of transactions which were clearly improvident to her, that exposed her to significant risk to support the business activities of Steve Nassif and which on default would ultimately have the effect of her losing her only valuable asset, that is her home. 146I propose to deal with the Contracts Review Act 1980 issues first because as Young JA stated (with whom Tobias JA and Campbell JA agreed) in Spina v Permanent Custodians Ltd [2009] NSWCA 206 at [74]: "...it is always preferable to deal with the Contracts Review Act point first. Not only is the jurisdiction probably wider under that Act than when dealing with equitable principles of unconscionability, but where, as has happened time and time again through history, statute has been enacted to cover the same ground as an equitable principle, the equitable principle is usually put into abeyance. After all, equity only operates where the common law is inadequate." 147Christine Nassif being the person alleging unconscionable conduct, and unjust circumstances for the purposes of Contracts Review Act 1980, bears the onus of proof: see Perpetual Trustee Company Limited v Albert and Rose Khoshaba [2006] NSWCA 41 and Mathew Bransgrove et at, The Essential Guide to Mortgage Law in New South Wales, 1st ed (2008) LexisNexis Butterworths at [11.15].

The Contracts Review Act 1980 148The Contracts Review Act 1980 involves a two-step process. In Riz v Perpetual Trustee Australia Ltd [2007] NSWSC 1153 at [51] Brereton J noted that the relevant questions are: " whether the contract was unjust in the circumstances in which it was made, having regard to the factors referred to in s 9. This is a conclusion of fact, albeit one of ultimate fact involving a broadly based value judgment [Antonovic v Volker (1986) 7 NSWLR 151 at 154-155 (Samuels JA, Kirby P agreeing); Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 at 270E (Samuels JA); Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41, [34]-[40] (Spigelman CJ), [106]-[111] (Basten JA)]. The second, which arises only if the first is resolved in the affirmative, is whether any and if so what relief should be granted; this involves the exercise of a judicial discretion [Khoshaba, [34]-[36] (Spigelman CJ), [109] (Basten JA)]." 149Both parties referred to Fast Fix Loan Pty Ltd v Maldenko Samardzic & Anor [2011] NSWCA 260 as being instructive. 150The relevant provisions of the Contracts Review Act are: "7(1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part, (c) it may make an order varying, in whole or in part, any provision of the contract, (d) it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that: (i) varies, or has the effect of varying, the provisions of the land instrument, or (ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument. (2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order. (3) The operation of this section is subject to the provisions of section 19." 151Section 4(1) provides a non-exhaustive definition of "unjust". "Unjust includes unconscionable, harsh or oppressive, and injustice shall be construed in a corresponding manner." 152Assistance in ascertaining the intended content of "unjust" is derived from s 9: "9(1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: (a) whether or not there was any material inequality in bargaining power between the parties to the contract, (b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation, (c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract, (d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract, (e) whether or not: (i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or (ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented, because of his or her age or the state of his or her physical or mental capacity, (f) the relative economic circumstances, educational background and literacy of: (i) the parties to the contract (other than a corporation), and (ii) any person who represented any of the parties to the contract, (g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed, (h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act, (i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect, (j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act: (i) by any other party to the contract, (ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or (iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract, (k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and (l) the commercial or other setting, purpose and effect of the contract. (3) For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made. (4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made. (5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made." 153I will turn now to examine s 9(2). Some of the evidence has been referred to earlier in this judgment and the evidence under these headings set out below can overlap and be repetitive. I have only expressed my main conclusions under these headings and by doing so I should add that I have taken earlier evidence into account.

(a) Whether or not there was any material inequality in bargaining power between the parties to the contract 154Counsel for Bankwest submitted that the inequality of bargaining power, although a material consideration in the mortgages cases is only given weight in special circumstances. Counsel referred to Newman AJ in Permanent Trustee Co Ltd v Elkofairi [2001] NSWSC 1113 at [34]: "(b) material inequality in bargaining power between an institutional lender and an individual will rarely be of significance, as the courts recognise that the terms of contracts of that nature are generally fixed and there is usually little room for negotiation: Commonwealth Bank of Australia v Cohen (unrep, SCNSW, Cole J, 22/7/88). For inequality to have effect, one needs to identify "extreme" inequality." 155As is the general case, there was no room for negotiation between the institutional lender Bankwest and Christine Nassif. There was material inequality, but not extreme inequality, in the bargaining power between Bankwest and Christine Nassif.

(b) & (c) Whether or not prior to or at the time the contract was made its provisions were the subject of negotiation and whether or not it was reasonably practicable for Christine Nassif to negotiate for the alteration of or to reject any of the provisions of the contract 156Bankwest would not have allowed the guarantor to modify a guarantee and indemnity document (T97.25-98.30, 14/12/11). Had Christine Nassif asked to modify and negotiate any terms in relation to a guarantee and indemnity she would not have been able to do so. 157Once again, this falls into the general case with banks. There was material inequality but not extreme inequality in relation to the negotiation and the alteration of any of the previsions of the contract.

(d) Whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract 158Bankwest provided the facility documents and funds to enable the Sherene Group to complete the building project at Speers Point. The guarantee and indemnity are standard form documents. Between March 2007 and January 2009 the total amount of facilities although configured differently at times remained almost the same, with a slight decrease towards January 2009 from $10.6M to $10.343M. The provisions of the loan facilities including the loan and guarantee were not unreasonable nor were they difficult to comply with. I turn now to consider whether the provisions of the loan facility documents were not reasonably necessary for the protection of the legitimate interests of Christine Nassif. 159On 11 August 2007, Christine Nassif gave a guarantee in favour of Bankwest. She also provided security, namely mortgages, over the Wentworth Falls property. The amount of the facilities for which the guarantee was given was $11.675M (T53.15-27, 13/12/11), which was approximately three times more than was required to secure Bankwest's exposure on the refinance of the NAB facility (T82.42-83.1, 14/12/11). Counsel for Christine Nassif pointed out that this guarantee and indemnity was 7.5 times her asset position. 160Christine Nassif was not the only one who was required to provide a guarantee in order for the loan facilities to be made available. In August 2007, there were guarantees given by Joseph Youssef, Christine Nassif, Sarkis Nassif, Ellis J Enterprises Pty Ltd and Steve Nassif as trustee for the Nassif Family Trust. Other securities were provided, namely a fixed and floating charge by Sherene, Ellis J Enterprises and Trioplex Constructions; mortgages were provided by Sherene over the Speers Point Property and Hanan Nassif provided a mortgage over the property at Wentworth Falls (Hume Avenue property). I accept that Christine Nassif stood to lose a substantial asset (over $3M) should the facilities not be repaid. 161Bankwest's reasons for requiring a guarantee from Christine Nassif were twofold, firstly, that she had provided one to the prior lender NAB and secondly, because the construction loan was funding the Nassifs' personal living, car payments, personal amounts and for improvements to the Wentworth Falls property which underpinned Christine Nassif's security (T54.38, 13/12/11). 162Christine Nassif was aware that her husband borrowed money to fund a property development at Speers Point. She says that she did not receive any financial benefit from the Speers Point development. It appears that some payments of the moneys lent to Sherene Group were for her benefit. Christine Nassif was cross examined in relation to the Trioplex Constructions Pty Ltd bank statements for the period between 30 June 2007 and 1 February 2008. It shows that she received the following amounts: $1,022.18 on 20 August 2007; $250 on 22 August 2007; $1,019.68 on 27 August 2007; $1,019.68 on 26 September 2007; $15,000 on 30 November 2007; $100 on 4 December 2007 and $25,00 on 19 December 2007. The amounts of around $1,020 were for lease payments on a BMW, the motor vehicle she drove most of the time. 163I accept that from the Speers Point funding Christine Nassif derived some economic benefit, namely living expenses, car payments and for improvements to her residence (T73.47, 13/12/11). However, these benefits represented only a small portion of the overall funds made available to the Sherene Group. 164Overall it is my view that the provisions of the Bankwest loan facilities did not impose conditions, which were unreasonably difficult to comply with and these provisions were reasonably necessary for the protection of the legitimate interests of Bankwest.

(e) Whether Christine Nassif was not reasonably able to protect her interests in relation to the Bankwest facilities 165Christine Nassif was subservient to her husband in relation to financial matters. While she portrayed herself both in her affidavits and in court as not being cognisant with any of the financial dealings of her husband and Sherene, it is my view that Christine Nassif did have some basic understanding of their financial affairs. Certainly Christine Nassif was aware in October 2007, a few months after the Bankwest refinancing occurred, that there were money problems and that her husband's business the Speers Point development was not going well. 166In 20006/2007, Christine Nassif (wrongly) believed that the bank could not get the house if there was a problem as the Wentworth Fall property was solely in her name despite her obligations as a guarantor had been explained to her by an officer at NAB in about 2005. However, by August 2008, when Robert Barraket provided her with independent legal advice, she understood that the bank could take possession of her Wentworth Falls property if the moneys due to Bankwest were not repaid. Even though the explanation by Robert Barraket was brief, it was in clear terms "you could lose everything". 167A difficult part of this case is to determine why Christine Nassif continued to sign guarantees when she became aware that there was a real risk she could lose the Wentworth Falls property. Between 2000 and 2003, Christine Nassif was aware that her husband had been financially successful in developing properties. But she knew that this had changed by 2007 when she became aware that there were money problems with the Speers Point development. 168While I have made findings that Christine Nassif was aware of the consequences to her when she signed the guarantees in 2008 and onwards, I have formed the view that she continued to sign these documents in the belief there were still funds that could be used to support the family members including herself. I accept that she was subservient to her husband in financial matters. So far as business matters were concerned, she did what her husband told her to do and by doing so she believed that she and her family would be financially better off. I also have taken into account that had Christine Nassif refused to sign the guarantees Steve Nassif would have become difficult and overbearing. There was a possibility he could have assaulted her, although it is both Christine Nassif and Steve Nassif's evidence that assaults had ceased in 2005. That is at a time before the Bankwest facilities were in place.

(f) The relative economic circumstances, educational background and literacy of the parties to the contract 169Christine Nassif was educated in Bulgaria to the equivalent HSC standard. She can speak and understand conversational English well. She can write basic English, compose and send everyday type emails. While she can read relatively complex documents written in English such as loan documents she has only a partial understanding of their meaning. Bankwest is a lending institution.

(h) Whether or not and when independent legal and other expert advice was obtained by Christine Nassif 170Christine Nassif received independent legal advice in relation to guarantees she provided on three occasions on 4 August 2008, 7 November 2008 and 20 January 2009. While, in August 2007, Christine Nassif signed a statutory declaration to the effect that she had received financial advice, the reality is that she never did.

(i) The extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained to Christine Nassif and whether or not she understood the provisions and their effect 171It is my view that Christine Nassif, as at 7 August 2008, understood that by signing the guarantees to Bankwest if the Sherene Group defaulted in repayment of its loan obligations, she would lose her property at Wentworth Falls. 172On 20 January 2009, Robert Barraket again explained to Christine Nassif that she did not have to sign a guarantee and that she could end up losing everything. Christine Nassif told Robert Barraket that she had already signed documents for Bankwest and she was already a guarantor under the loan. Robert Barraket advised her that if Sherene had no money and could not complete constructions of the units at Speers Point, or could not sell the units when they were finished, then she could lose everything she owned. Christine Nassif knew that Steve Nassif and Sherene were in trouble and did not have any money to finish the Speers Point development and that if she did not give the guarantee that the bank wanted then they would lose everything. She also said that she did not care if she lost everything she owned, because she would do whatever she could to help Steve Nassif.

(j) Whether any undue influence, unfair pressure or unfair tactics were exerted on or used against Christine Nassif 173I accept that Bankwest itself did not exert any undue influence, unfair pressure or unfair tactics upon Christine Nassif. 174Bankwest submitted that it is a real question in this case as to who it was who should bear the responsibility of the alleged conduct of Steve Nassif. Counsel for Bankwest submitted that it is clear in this Act that the parties to a contract are to be treated as responsible for the conduct of those who act on their behalf. 175Counsel for Christine Nassif submitted that the court would find that the conduct of Steve Nassif and the approach taken to direct his wife amounts to unfair pressure or undue influence and that as a consequence of this Christine Nassif was not able, when considered with the lack of financial advice and legal advice, to protect her interests. On the basis of the findings I have made, the latter part of this submission is incorrect as she did receive legal advice on three occasions. 176Bankwest says that the alleged conduct of Steve Nassif and the alleged disadvantageous position of Christine Nassif was not known to it and referred to Riz v Perpetual Trustee Australia where Brereton J stated at [78] - [80]: "[78] The evidence does not demonstrate any indifference or recklessness on the part of Perpetual, and I do not accept that, although Perpetual did not know the true circumstances of Mr and Mrs Riz, it ought to have ascertained them, or should be regarded as having been wilfully blind as to the income of its borrowers. ... A prospective borrower is not entitled to expect the lender to be alert for fraud by or on behalf of the borrower; and a lender is not required, in the interests of the borrower, to have a high index of suspicion for fraud by the borrower or the borrower's agent. A lender's failure to detect fraud by or on behalf of a borrower does not weigh significantly in favour of a finding that the consequent loan contract is unjust. To hold that the undetected provision of false information by or on behalf of a borrower to a lender in an attempt to obtain a loan resulted in the loan contract being unjust against the lender would be to invert commonsense, logic and justice, by protecting the wrongdoer against the victim. To grant remedies under the Contracts Review Act on such grounds would be to convert an Act, intended to achieve just results, into an instrument of injustice. [79] This case has two important features that distinguish it from Khoshaba. First, in Khoshaba, the circumstances that the statement of the purpose of the loan was left blank, and that Perpetual made no inquiry about its purpose, were decisive: Spigelman CJ said that had Perpetual made any inquiries about the purpose of the loan (not extending to determining that the proposed investment was reasonable and capable of servicing the loan) his Honour would have allowed the appeal; and Basten JA observed (at [125]) that had the loan been expressed to be intended for investment purposes, rather than expenditure on consumables, it was at least arguable that it would be self-funding. In the present case, the purpose of the loan - refinance and further investment - was stated, and it was not as if Perpetual was prepared to proceed on the basis that for all it knew the funds would be paid away immediately; Perpetual's state of mind was that Mr and Mrs Riz proposed to refinance and invest the surplus proceeds, which imports the generation of a return and/or the acquisition of corresponding additional assets. Secondly, for reasons already explained, there is no basis for concluding that Perpetual was in this case engaging in "asset lending". [80] Mr and Mrs Riz were represented and advised by their own lawyer. Perpetual did not demonstrate the indifference referred to in Khoshaba, and did not engage in asset lending, but assessed the loan having regard to serviceability. ... Although Mr and Mrs Riz were the subject of unfair tactics, those were perpetrated not by or on behalf of Perpetual, but by the promoters... , or by their own agents . The false financial information, without which the loan agreement would not have been approved, was provided to Perpetual by QLS on behalf of Mr and Mrs Riz ... Perpetual was not required to have a high index of suspicion that it was being deceived by QLS acting for Mr and Mrs Riz, and its failure to discover the deception does not make a case of injustice." 177Bankwest submitted that it took every reasonable step to ensure that Christine Nassif was properly informed and voluntarily consented to the transaction. However, Bankwest did not have any direct contact with Christine Nassif prior to her providing the first guarantee. Bankwest, prior to requiring Christine Nassif to sign the guarantee and indemnity, made no independent assessment as to her level of income (T53.30; 72.48, 13/12/11). Bankwest did not it make any independent inquiry as to Christine Nassif's asset position (T54.11, 13/12/11), although it received a statement of assets signed by her. The contents of that document, although not in her handwriting, appear to be correct. It did not state that she earned any income. The only time someone from Bankwest spoke Christine Nassif occurred by accident when Grant Murphy met Christine Nassif briefly at Speers Point one day. They exchanged pleasantries. 178Bankwest did not have any actual notice that Christine Nassif was purportedly reliant to and subservient on Steve Nassif in relation to the Bankwest facilities. However, Bankwest did have notice at the time of the taking of the guarantee: that Christine Nassif was a married woman and hence there was a possibility of emotional subservience to her husband; that she was the sole owner of the property at Wentworth Falls that was worth about $3M; and that that property was her home and she had no income of her own with which to service the borrower's obligations, if her husband and other family members were unable to do so. Bankwest was aware that the value of the Wentworth Falls property was substantial and it was not the only property it had recourse to if the funds were not repaid. 179So far as Bankwest is concerned it was refinancing existing NAB facilities where Christine Nassif was already a guarantor and had already provided a mortgage over the Wentworth Falls property as security. Bankwest had received three certificates of independent legal advice in relation to the guarantees. When Christine Nassif provided the initial guarantee to Bankwest she signed a statutory declaration to the effect that she had received financial advice. 180Bankwest had lent the moneys for the completion of the Speers Point project. Christine Nassif had already been involved in this project prior to Bankwest refinancing. Bankwest had assessed the viability of the loan by having regard to its serviceability of the facilities. Christine Nassif received some payments from the funds advanced by Bankwest. 181Bankwest had been provided with Christine Nassif's statement of assets and liabilities, a statement that she had received financial advice and three certificates of independent legal advice. In my view Bankwest, as a lender, was not obliged to take any additional steps such as phoning Christine Nassif and providing her with advice as to whether or not she should sign the guarantees or check whether the advice she received in relation to certificate of independent advice was correct.

(k) The conduct of the parties to the proceedings in relation to similar contract or courses of dealing to which any of then has been a party 182Prior to accepting the facilities that Bankwest offered, Christine Nassif signed prior guarantees with the National Bank on 21 March 2003, 7 August 2003, 11 March 2004, 26 August 2004, 21 February 2005 and 9 June 2005. It was in relation to the guarantee dated 9 June 2005 that Christine Nassif was required to provide a mortgage on the Wentworth Falls property to NAB. Further guarantees were provided by her to NAB on 27 July 2005, 15 December 2005 and 11 August 2005. 183From the outset Bankwest was aware that Sherene had no other independent sources of income other than rental income and the sale of units in the development (T43.35; 44.5-10, 13/12/11). If the development was not completed, Bankwest had recourse to seek possession of Hanan Nassif's property and Christine Nassif's property at Wentworth Falls. Steve Nassif, Hanan Nassif and Trioplex Constructions Pty Ltd had also entered into guarantees. While they could be called up, they were only of value if they had any assets. Hanan Nassif's property had some value. Bankwest was also aware that Christine Nassif had no income and no assets (other than the Wentworth Falls property) from which to pay any default in the loan facilities.

(l) The commercial or other setting, purpose and effect of the contract 184Bankwest viewed the financing and development of the Speers Point Project as one being undertaken by the extended Nassif family. 185The purpose of the loan facilities, guarantees and mortgages were to finance through the Sherene Group the completion of the Speers Point project. Once these units were completed they were to be sold and the proceeds would pay out the Bankwest facilities.

Were the contracts unjust? 186The balancing of Christine Nassif's position against that of Bankwest, by reference to the foregoing criteria set out in s 9 of the Contracts Review Act 1980 and my analysis favours Bankwest. 187I have concluded that the guarantee and indemnity that was secured by a mortgage over Christine Nassif's property at Wentworth Falls is not unjust within the meaning of s 4 of the Contract Review Act. 188Christine Nassif's claim for relief under the Contracts Review Act 1980 fails.

(ii) Was the guarantee and indemnity unconscionable? 189Counsel for Christine Nassif submitted that there was a material inequality between Christine Nassif and Bankwest; Bankwest failed to exercise the judgment of a prudent lender in making a loan ostensibly for the benefit of another and secured by the home of Christine Nassif; and at the time the guarantee, loan and mortgage were entered into Bankwest knew or could have ascertained by reasonable inquiry of Christine Nassif at the time, that Christine Nassif could not pay in accordance with the terms of the loan or mortgage or not pay without substantial hardship. This, according to counsel for Christine Nassif constitutes unconscionable conduct. 190Bankwest submitted that if the circumstances of Christine Nassif amounted to circumstances of "special disadvantage" there is no evidence that Bankwest had knowledge of those matters. According to Bankwest this is especially so where from Bankwest's perspective the transaction was not an imprudent, let alone an improvident, one. 191Often the reasons for concluding that a contract was not unjust equally inform a conclusion that it was not unconscionable. 192In Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413 where Beazley JA said at [51]: "[51] In Teachers Health Investments Pty Ltd v Wynne (1996) NSW Conv R 55-785, a case which bore a particular similarity to this case, to which I shall refer, I said at 56,029: "... two matters need to be established to invoke the court's jurisdiction to set aside an unconscientious transaction. The first is that the party seeking to impugn the transaction was under a relevant disability. In describing this disability, Deane J at 476 referred to the statement of McTiernan J in Blomley v Ryan (1956) 99 CLR at 392 that: '... as taking surreptitious advantage of the weakness, ignorance or necessity of another. The essence of such weakness is that the party is unable to judge for himself.' ... The second element [required to establish an entitlement to relief under Amadio is that this disability], as Deane J said at 477: 'sufficiently evident to the [other party to the transaction] to make it prima facie unfair or 'unconscientious' of the [other party to the transaction] to procure [the] execution of the [contract] in the circumstances in which the execution was procured.'" 193Unconscionable conduct on the principles established in Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 at 474 per Deane J: "jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or "unconscientious" that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it." 194In Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362, at 405 per Fullagar J listed some examples of such disability to include: "poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary." 195As the Full Court of the Federal Court pointed out in Hurley v McDonald' s Australia Ltd [1999] FCA 1728; (2000) ATPR 41-741 at [22]: "For conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable must be demonstrated - Cameron v Qantas Airways Ltd [1995] FCA 1304; (1995) 55 FCR 147 at 179. Whatever ' unconscionable' means in s 51AB and s 51 AC the term carries the meaning given by the Shorter Oxford English Dictionary, namely, actions showing no regard for conscience, or that are irreconcilable with what is right or reasonable -Qantas Airways Ltd v Cameron [1996] FCA 1483; (1996) 66 FCR 246 at 262. The various synonyms used in relation to the term ' unconscionable' import a ' pejorative moral judgment' - Qantas Airways Ltd v Cameron [1996] FCA 1483; (1996) 66 FCR 246 at 283-4 and 298." 196Unconscionability is something which shows no regard for conscience or is irreconcilable with what is right or reasonable. Further, unconscionability is not to be lightly found. As Bryson J (as he then was) said in Burt v ANZ Banking Group Ltd (1994) ATPR 46-123: "The ordinary means of establishing in honesty and fair dealing that a person with whom one is dealing knows the nature and terms of a document which one proposes should be signed is to put the document before that person for signature. The opportunity to find out what is in the document is there, available to that person, who can use the opportunity in whatever manner is thought right. Unless the person with whom one is dealing is known to be at some special disadvantage, this is as much as conscience requires. There is no reason why it is unconscionable per se to deal with and take a guarantee from a person who is closely related to or otherwise well disposed towards a customer; indeed that is the ordinary case in which a guarantee is available. Unconscionability is not a slight matter, and behaviour is only unconscionable where there is some real and substantial ground based on conscience for preventing a person from relying on what are, in terms of the general law, that person' s legal rights. Previous judicial experience and established grounds on which reliance on legal rights would be unconscionable are reliable bases on which to act and the Court is not authorised to take idiosyncratic approaches." 197I have already referred to the following matters under the Contracts Review Act 1980 heading. I have summarised the relevant facts and findings here. 198Christine Nassif is a married woman and she deferred to her husband on business and financial matters. She signed legal and financial documents when Steve Nassif asked her to do so. While English is not her first language, she speaks and understands conversational English well. She can read formal documents but does not understand all of their meaning. I accept that Bankwest had no actual notice of these factors but that does not absolve Bankwest of any responsibility. 199Bankwest's reasons for requiring a guarantee from Christine Nassif were twofold, firstly, that she had provided one to the prior lender NAB and secondly, because the construction loan was funding the Nassifs' personal living, car payments, personal amounts and for improvements to the Wentworth Falls property which underpinned Christine Nassif's security (T54.38, 13/12/11). 200Bankwest did have notice at the time of the taking of the guarantee that Christine Nassif was a married woman and hence there was a possibility of emotional subservience to her husband, that she was the sole owner of the property at Wentworth Falls that was worth about $3M, that that property was her home and she had no income of her own with which to service the borrower's obligations, if her husband and other family members were unable to do so. 201Bankwest was aware that Christine Nassif had already been involved in the Speers Point project prior to Bankwest refinancing and had provided guarantees and security by mortgages over the Wentworth Falls property to the former lender NAB. Bankwest had assessed the viability of the loan by having regard to its serviceability of the facilities. 202Christine Nassif was not the only one who was required to provide a guarantee in order for the loan facilities to be made available. In August 2007, there were guarantees given by Joseph Youssef, Steve Nassif, Hanan Nassif, Christine Nassif, Sarkis Nassif, Ellis J Enterprises Pty Ltd and Steve Nassif as trustee for the Nassif Family Trust. Other securities were provided, namely a fixed and floating charge by Sherene, Ellis J Enterprises and Trioplex Constructions; mortgages were provided by Sherene over the Speers Point Property and Hanan Nassif provided a mortgage over the property at Wentworth Falls (Hume Avenue property). Bankwest was aware that the value of the Wentworth Falls property was substantial but it was not the only property it had recourse to if the funds were not repaid. 203When Christine Nassif provided the initial guarantee to Bankwest she signed a statutory declaration to the effect that she had received financial advice. Subsequently, Bankwest had received three certificates of independent legal advice dated 4 August 2008, 7 November 2008 and 20 January 2009 in relation to the guarantees. Bankwest was entitled to rely on these documents and accept that Christine Nassif had received independent financial and legal advice. 204It is my view that in these circumstances, it cannot be said that Bankwest acted without regard or conscience, nor did it act unreasonably. Christine Nassif's claim that Bankwest engaged in unconscionable conduct in its dealings with her fails.

(iii) The wife's equity principle 205Neither party made detailed submissions in relation to this issue. 206Both parties referred to Garcia v National Australia Bank [1998] HCA 48; (1998) 194 CLR 395, where the High Court (per Gaudron, McHugh, Gummow and Hayne JJ) stated at [31] and [41]: "31 The principles applied in Yerkey v Jones do not depend upon the creditor having, at the time the guarantee is taken, notice of some unconscionable dealing between the husband as borrower and the wife as surety. Yerkey v Jones begins with the recognition that the surety is a volunteer: a person who obtained no financial benefit from the transaction, performance of the obligations of which she agreed to guarantee. It holds, in what we have called the first kind of case, that to enforce that voluntary transaction against her when in fact she did not bring a free will to its execution would be unconscionable. It holds further, in the second kind of case, that to enforce it against her if it later emerges that she did not understand the purport and effect of the transaction of suretyship would be unconscionable (even though she is a willing party to it) if the lender took no steps itself to explain its purport and effect to her or did not reasonably believe that its purport and effect had been explained to her by a competent, independent and disinterested stranger. And what makes it unconscionable to enforce it in the second kind of case is the combination of circumstances that: (a) in fact the surety did not understand the purport and effect of the transaction; (b) the transaction was voluntary (in the sense that the surety obtained no gain from the contract the performance of which was guaranteed); (c) the lender is to be taken to have understood that, as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife; and yet (d) the lender did not itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her." 41 As is apparent from what was said in Yerkey v Jones the creditor may readily avoid the possibility that the surety will later claim not to have understood the purport and effect of the transaction that is proposed. If the creditor itself explains the transaction sufficiently, or knows that the surety has received "competent, independent and disinterested" advice from a third party, it would not be unconscionable for the creditor to enforce it against the surety even though the surety is a volunteer and it later emerges that the surety claims to have been mistaken." 207Bankwest the lender is to be taken to have understood that Christine Nassif, as a wife, may repose trust and confidence in her husband Steve Nassif in matters of business. Bankwest is also taken to have understood that the Steve Nassif may not fully and accurately explained the purport and effect of the loan facilities and her obligations in relation to her guarantees secured by the mortgages Christine Nassif. However, Bankwest required Christine Nassif to have guarantee that she entered into on 4 August 2008, 7 November 2008 and 20 January 2009 explained to her by a solicitor. As at August 2008, Christine Nassif understood that if the Sherene Group defaulted on its obligations, she would lose her property at Wentworth Falls yet she did not take any steps to extricate herself from them. 208Taking these matters into account, Christine Nassif's application for relief on the principles espoused in Garcia v NAB fails. 209The result is that Christine Nassif's further amended cross claim is dismissed and I enter judgment in favour of Bankwest in relation to the judgment and orders sought against Christine Nassif as sixth defendant in the amended statement of claim. 210Costs are discretionary. Costs usually follow the event. The sixth defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed.

The Court orders that: (1) The further amended cross claim filed 13 July 2011 is dismissed. (2) It is adjudged that the plaintiff have possession of the whole of the land in folio identifiers X/XXXX and X/XXXX situated at Wentworth Falls in the State of New South Wales respectively. (3) The plaintiff is to bring in short minutes in relation to the amount outstanding on the judgment debt. (4) The sixth defendant is to pay the plaintiff's costs of the proceedings as agreed or assessed. (5) I will hear short submissions on the issue of a writ of possession and the date of its issue.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 April 2012