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Texts Cited: PW Young, C Croft and ML Smith, On Equity (2009, Lawbook Co.)

Category: Principal judgment

Parties: Century 311 Pty Ltd (Plaintiff/Cross-Defendant)
George Anthony Confos (Defendant/Cross-Claimant)

Representation: Counsel:
PT Newton SC (Plaintiff/Cross-Defendant)
MW Young SC (Defendant/Cross-Claimant)
Solicitors:
ERA Legal (Plaintiff/Cross-Defendant)
Cadre Moss (Defendant/Cross-Claimant)

File Number(s): 2025/00124944

Publication restriction: Nil

JUDGMENT

1. HIS HONOUR: By Amended Statement of Claim filed on 27 November 2025, Century 311 Pty Ltd (“Century 311”) brings proceedings against Mr Geroge Anthony Confos seeking an order for possession of the land comprised in Certificate of Title Volume X/XXXXX (“the Dover Heights Property”) pursuant to a registered mortgage. It also claims recoupment of a debt advanced as a loan in the sum of $1.5 million secured by the mortgage and interest.

2. Mr Confos, by Cross-Claim filed 27 May 2025, seeks relief under s 7 of the Contracts Review Act 1980 (NSW) (“the CR Act”) in the form of a declaration that the loan agreements underpinning the mortgage are void or unenforceable. In the alternative, orders varying the loan and mortgage documents are sought under the same provision. Further or in the alternative, Mr Confos claims relief under various sections of the Australian Securities and Investments Commission Act 2001 (Cth) (“the ASIC Act”), and in equity for unconscionable conduct by way of undue influence. For reasons that will further be enunciated below, Mr Confos accepts that if he fails on his claim under the CR Act, he will likely also fail on his alternative claims. The success of his Cross-Claim largely turns upon the CR Act.

3. Mr Confos’s accepted that but for any entitlement he may have to relief on the Cross-Claim, Century 311 would succeed on its claim. The hearing therefore largely proceeded as a contest on the Cross-Claim.

Background

4. Despite the parties in these proceedings being limited to Mr Confos and Century 311, there is a somewhat tangled web of corporate entities and natural persons more than peripherally involved in various loans agreements which require some explanation to understand how the present dispute came to be.

Mr Confos and Mr Adgemis

5. Mr Confos was born in 1959 to a Greek Australian family. His mother purchased the Dover Heights Property in 1987 for his benefit, and shortly after transferred her interest to him. Mr Confos and his wife live at the Dover Heights Property. Mr Confos is a retired pharmacist. He qualified in 1985 and carried on his own business from 1987, first in Circular Quay and later in Maroubra Junction, before retiring in 2015.

6. Mr Jon Adgemis, 19 years his junior, is the cousin and Godson of Mr Confos. It is unnecessary to discuss much of Mr Adgemis’s background here but suffice it to say that he achieved considerable advancement in his professional life at a relatively young age. With this background, Mr Adgemis approached his Godfather in 2013, soliciting his investment in a new business venture. The years that followed saw Mr Confos frequently providing funding, or security for finance, for Mr Adgemis’s business ventures. These ventures enjoyed varying success. The exact number of transactions Mr Confos facilitated or enabled in compliance with Mr Adgemis’s wishes is unknown. As I will set out later in these reasons, despite being senior in years to Mr Adgemis, Mr Confos was under the thrall of the younger man due to his dynamism, charisma and apparent success in business.

7. On 24 April 2021, Rose Bay Property Holdings 2 Pty Ltd (“Rose Bay Holdings 2”) was registered as a private company with Mr Confos as its sole director. On 25 March 2024, Dover Heights Holdings Pty Ltd (“Dover Heights Holdings”) was registered as a private company, with Mr Confos as its sole director and shareholder. The company held no assets nor appeared to have any capacity to produce revenue. Both of these companies feature in the narrative below. The flavour of the narrative is that these companies were brought into existence at Mr Adgemis’s suggestion for the furtherance of his commercial ambition.

Mr Margi, Mr Shrestha and Associated Entities

8. Mr Andrew Margi is a mortgage broker who was involved in providing finance for Mr Adgemis’s ventures. Mr Margi was the director of a number of corporate entities (which were his financial vehicles) involved in the antecedent transactions to this dispute. Mr Rohit Ram “Roy” Shrestha is likewise a mortgage broker and a partner of Mr Margi.

9. Mr Margi is the sole director of FCFG Pty Ltd (“FCFG”), and a director of BC First 138 Pty Ltd (“BC First”). Mr Shrestha is also a director of BC First with Mr Margi and 2 others. He is the sole director and shareholder of Century 311.

The FCFG Mortgage

10. A mortgage, bearing identifier ATXXXXXX, over the Dover Heights Property in favour of FCFG securing a debt of $1.5 million was registered on 22 March 2024 (“the FCFG Mortgage”) (Exhibit F). That mortgage secured monies lent to Rose Bay Holdings 2 by FCFG. The purpose of those funds was not borne out in evidence, but Mr Confos and Mr Adgemis guaranteed the loan.

The NNW Financial Loan

11. In May 2024, NNW Financial Pty Ltd (“NNW Financial”) registered a mortgage over the Dover Heights Property, which secured a loan made to Dover Heights Holdings (“the NNW Financial Loan”). That mortgage secured a loan in excess of $8 million advanced by NNW Financial, which the evidence suggests was taken out to refinance existing mortgages over the Dover Heights Property.

12. The NNW Financial Loan was the subject of proceedings in the Possessions List in this Court: NNW Financial Pty Ltd v Confos [2026] NSWSC 434. In that matter, although Mr Confos filed a Defence and Cross-Claim that were in similar terms to their counterparts in these proceedings, he elected not to contest his position, after his solicitor had ceased to act, leaving him without representation. While the outcome of those proceedings will be of great importance to the parties in that matter, given the absence of contest, it is not of relevance to the determination of these proceedings. The NNW Financial Loan is, however, relevant insofar as it provides broader context to the entry into the agreements the subject of this litigation.

The Imputed Mortgage, Default & Assignment

13. On 17 May 2024, Dover Heights Holdings entered into a loan agreement (“the Loan Agreement”) with BC First. After a deed of variation (“the Deed of Variation”) was signed, the relevant part of the Loan Agreement provided for an advance of $1.5 million paid by BC First to Dover Heights Holdings (“the Advance”). The Advance, subject to some other deductions, was paid in satisfaction of the monies advanced by FCFG, and the FCFG Mortgage was discharged (Exhibit F).

14. A Deed of Guarantee and Indemnity was entered into by Mr Confos, which secured the debt owing to BC First through an irrevocable guarantee, as well as a mortgage over the Dover Heights Property, which was registered as AUXXXXX (Exhibit A). That is the mortgage that Century 311 sues to enforce.

15. Under the terms of the Loan Agreement, in the absence of any event of default, a discounted rate of interest would apply in lieu of the standard rate of 36% per annum. There is no dispute between the parties that should I find for Century 311, interest should be calculated at the standard rate of 36% per annum.

16. The Loan Agreement provided that the monies advanced were to be repaid six months following its execution. When, almost inevitably, it was not repaid, Mr Confos was served with a Notice to Remedy Default, which was not complied with. It is not in dispute that no repayments of any kind have been made to date. In February 2025, BC First assigned its interest under the loan and all associated security documents to Century 311 (Exhibit H).

Summary of the Parties’ Cases

Statement of Claim

17. Century 311 contended that given the above, it is entitled to an order for possession and judgment in the amount of the debt due under the Loan Agreement. That issue was, subject to the determination of the matters under the Cross-Claim, conceded by Mr Confos, and having regard to the documentary evidence before me, I consider that concession to have been properly made.

Cross-Claim

18. Consequently, the substance of this dispute is found in the Cross-Claim and the issues arising from those pleadings.

19. Mr Confos’s case is that BC First knew, or ought to have known, inter alia, that:

20. Dover Heights Holdings was not possessed of any assets nor any prospects of earning any funds by which it could service its obligations under the Mortgage, and indeed, its pre-existing obligations under the NNW Financial Loan reduced any prospect of repayment, essentially, to nil;

21. Given Mr Confos’s retirement, he had no capacity to meet any repayments if the guarantee was called upon, absent the equity in the Dover Heights Property;

22. Mr Confos was under the complete influence of Mr Adgemis with respect to financial matters, and consequently he was unable to appreciate the nature of the financial risks associated with his guarantee; and

23. The funds provided under the Loan Agreement were for the benefit of Mr Adgemis, rather than Mr Confos.

24. The above facts, on Mr Confos’s case, contributed to a material inequality of bargaining power between Mr Confos and BC First. Mr Confos was unable to engage, and in fact was neither expected nor invited to, in any meaningful negotiation of the terms. That was up to Mr Adgemis. Mr Confos did not know or understand the terms to which he ultimately acceded. As a result of the assignment between BC First and Century 311, Century 311 assumes the benefit of BC First’s rights and obligations under the contract and takes them subject to any pre-existing equities.

25. The case for Mr Confos was pleaded primarily under the CR Act. As Mr Young SC submitted, the scope for redress is wider under the CR Act than it is under the ASIC Act and in equity. Mr Young conceded that if his client failed under the CR Act, he would also necessarily fail under both other pleaded avenues.

26. The parties agree that the Cross-Claim requires engagement with the three-stage formulation established in Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; (2006) 14 BPR 26,369 (“Khoshaba”). I agree. The stages are: first, whether the entry into the relevant contract was tainted by unfairness; secondly, whether the contract itself was unjust at time it was made; and thirdly, whether the discretion to order the relief was thereby engaged. The first step involves fact finding, and the second is evaluative, but the third is fundamentally an exercise of my discretion in all the circumstances of the case, as informed by the first two stages.

Statutory Framework

23. By the terms of s 7 of the CR Act, the Court is endowed with power of considerable width to void, vary or render unenforceable contracts in part or in whole where a contract or provision of the contract is “unjust in the circumstances”, and the Court considers the particular exercise of the power just.

24. The application of the standard of “justness” for the purpose of exercising the statutory power is informed, non-exhaustively, by s 9(2) of the CR Act. That list is long and does not need to be extracted here. Suffice it to say, the circumstances which may be considered relevant to the “justness” question are numerous and broad.

25. But as the Court of Appeal observed in First Mortgage Managed Investments Pty Limited v Pittman [2014] NSWCA 110; (2014) 74 BPR 32,839 at [168] (Sackville AJA) (“Pittman”), the power to make orders under the CR Act s 7 is “not at large”. The power under s 7 of the CR Act is limited to the avoidance of unjust circumstances: S H Lock (Australia) Ltd v Kennedy (1988) 12 NSWLR 482 at 492 (Priestley JA). Also relevant is that the powers under CR Act s 7 are not punitive. They exist to prevent injustice, and the Court should not interfere beyond that point: E**sanda Finance Corporation v Tong (1997) 41 NSWLR 482 at 489 (Handley JA).

26. I remind myself of this to the end that any order must avoid giving Mr Confos an unwarranted benefit: Pittman at [173]. To do so would not be giving force to the statutory intent that any such order should be limited to avoiding unjust consequences.

Course of Evidence

Century 311’s Evidence

27. Century 311’s evidence took what is, without criticism, not the usual course in matters where unconscionability arises. That is to say, the evidence adduced by Century 311 was essentially silent on the point. Indeed, Century 311 called one witness, Mr Daren Anderson, its solicitor, whose evidence-in-chief was largely given by three affidavits dated 19 June 2025, 25 November 2025, and 12 December 2025 respectively. Exhibited to the affidavit of 19 June 2025 was DJA-1.

28. Mr Anderson is a principal solicitor at ERA Legal, who, in addition to being the solicitors for Century 311, also acted for BC First on the Advance which was the subject of these proceedings.

29. Mr Anderson was cross-examined. Answers elicited established that ERA Legal has also previously acted for FCFG, and that Mr Margi has been a client of the firm since around 2023.

30. I am satisfied that Mr Anderson is a truthful and reliable witness. But it is fair to say, again without criticism, that Mr Anderson was not actively involved in the negotiations or preparation of the legal documentation for the loans which gave rise to these proceedings. He is unable to cast any light on the issues arising under the CR Act. Given the concessions made by Mr Confos about Century 311’s prima facie entitlement to success, I need not say anything further, other than that, subject to the Cross-Claim, the documentary evidence clearly establishes Century 311’s right to possession.

Mr Confos’s Evidence

31. Mr Confos’s evidence in chief was primarily given by way of affidavit dated 15 September 2025 (“Confos Affidavit”). Exhibit GC-1 was annexed to the Confos Affidavit.

Evidence in Chief

32. Mr Confos was around 19 years old when Mr Adgemis was born. Mr Confos became his Godfather, and his evidence was that, despite being his senior, he always looked up to Mr Adgemis: Confos Affidavit [9]-[10]. Particularly, he was impressed by the success of Mr Adgemis in the corporate world at a young age: Confos Affidavit [11].

33. Mr Adgemis approached Mr Confos for the first time in relation to a business venture in 2013. Mr Confos’s evidence was that he “immediately agreed, because I wanted to be a part of what [Mr Adgemis] was doing”: Confos Affidavit [12]. Mr Adgemis was not forthcoming about what role Mr Confos would play in the business ventures, and Mr Confos was unable to elicit a straight answer about that from him: Confos Affidavit [14]. When Mr Adgemis established JAGA Group Pty Ltd (“JAGA Group”) in around 2014, Mr Confos was set up with an email address, but it was never quite clear what work he was actually to do within the business. The work he did perform consisted mostly of administrative work, as well as some maintenance type jobs around the various properties: Confos Affidavit [17].

34. Initially, funds advanced by Mr Confos to Mr Adgemis at the latter’s request came from a testamentary trust established in favour in Mr Confos and his siblings from the estate of his late mother: Confos Affidavit [13]. Mr Confos kept a crude ledger of the payments, which was page 2 of GC-1. That ledger was headed “from trust” and contained a list of dates with associated dollar amounts, beginning on 16 December 2013. 12 dates and dollar figures were provided under that heading, totalling $4,388,500.00, with the last date being 30 June 2018.

35. Eventually, however, the funds available from that trust were exhausted. Mr Adgemis asked Mr Confos to draw down on the equity in the Dover Heights Property by way of security for finance to continue to fund him: Confos Affidavit [18]. Mr Confos agreed, and the lower half of the ledger at GC-1 p 2 indicates drawn down funds against his home as at 27 September 2017. Setting aside the funds used to renovate the Dover Heights Property, this sum totals $3,104,420.00. By late 2017, and I interpolate here that I infer this to mean after 27 September 2017, the equity in the Dover Heights Property was exhausted, and Mr Confos turned to using the equity in an investment property in Rose Bay (“the Rose Bay Investment Property”) as an alternate source of funding: Confos Affidavit [21].

36. When Mr Adgemis would approach Mr Confos for funds, it tended to occur in the context of a looming settlement, with the consequence that things appeared urgent. Mr Confos never had direct dealings with the lenders. Rather, when Mr Adgemis asked him for financial support, which he estimated to have occurred a dozen times or so, Mr Confos would attend on Mr Chris Dalton, solicitor, on Mr Adgemis’s referral, to sign loan documents: Confos Affidavit [19], [22]. The “financial advisor” in relation to the loans was the CFO of the JAGA Group, Mr Alexander Andruska: Confos Affidavit: [48].

37. On his evidence, by 2020 Mr Confos came to appreciate he was now facing significant financial difficulty. He deposed that he felt he had “no choice” but to trust Mr Adgemis and continue to agree to his requests: Confos Affidavit [23].

38. The Rose Bay Investment Property was sold in late 2021, with a completion date of 16 December 2021. The Settlement Adjustment Sheet, extracted at GC-1 pp 6-7, record the parties to whom the proceeds of sale were paid. They do include any entities related to Mr Confos, and his evidence is that he received no benefit from this sale: Confos Affidavit [25]-[29]. The inference is the proceeds were paid for the benefit of Mr Adgemis to discharge debts incurred by him.

39. In March 2024, the FCFG Mortgage came into being. It had a standard interest rate of 24% and a discounted interest rate of 0% per annum: Confos Affidavit [44]. Mr Confos had no substantive recollection of entering into the FCFG Mortgage beyond that it was something that Mr Adgemis had suggested to him and to which he acquiesced. Mr Confos had no understanding of the purpose for which the monies secured by the FCFG Mortgage were used: Confos Affidavit [45]-[46].

40. It was around this time that Mr Confos received a telephone call from Mr David Lyall of Millbrook Funds Pty Ltd (“Millbrook”): Confos Affidavit [49]. While the specific detail of this is not in evidence, I infer that Millbrook had a mortgage in its favour over the Dover Heights Property (“the Millbrook Mortgage”). In any event, Mr Lyall came to the property to take photographs for the purpose of having the Dover Heights Property valued in anticipation of “enforcement action” being taken against it. Mr Adgemis counselled Mr Confos to refinance the existing loans to avoid that eventuality: Confos Affidavit [49]. The Millbrook Mortgage came to be refinanced in the NNW Financial Loan referred to above.

41. Mr Confos has no independent recollection of entering into the Loan Agreement. His understanding is that it was essentially a refinance of the FCFG Mortgage: Confos Affidavit [33]-[34]. I interpolate here that this would seem to be consistent with the documentary evidence. In any event, Mr Confos is unable to say how the funds were disbursed, with the exception of $300,000, which he believes was paid to JAGA Securities Pty Ltd, which I take to be a member of, or associated with, Mr Adgemis’s JAGA Group: Confos Affidavit [35]. Much of the evidence focussed on the entry into the FCFG Mortgage was garnered through email searches of Mr Confos’s inbox: Confos Affidavit [50].

42. The relevant correspondence begins on 10 March 2024. Mr Adgemis sent an email to Mr Confos requesting the Commonwealth Bank statement for the Dover Heights Property, to the end of “paying out Millbrook”: GC-1 p 101. Eight days later, Mr Confos received an email from the solicitors for Millbrook requesting Mr Confos to call them back: GC-1 p 102.

43. On 20 March 2024, Mr Adgemis forwarded an email to Mr Confos from a member of staff at FCC Commercial (a related entity to FCFG), writing “can you please sign”. The attachment in question was a term sheet for a loan from FCFG to Rose Bay Holdings 2 for a principal sum of $10,460,110.89. It granted two mortgages in favour of FCFG over the Dover Heights Property as security for that sum: GC-1 pp 103-108. The email itself, while addressed to both Mr Confos and Mr Adgemis, was only sent to Mr Adgemis. Mr Confos’s evidence was that he does not recall signing that document: Confos Affidavit [56].

44. Transaction documents were exchanged between Mr Dalton and solicitors for FCFG, ERA Legal, on 21 March 2024: GC-1 p 116. These appear to have been forwarded to Mr Confos, along with instructions from Mr Dalton to Messrs Adgemis and Confos to “bring Driver’s Licenses and Passports”: GC-1 p 115. Mr Confos’s evidence was that “I infer that I attended Mr Dalton’s office on the afternoon of 21 March 2024… I cannot recall if I signed any documents at Mr Dalton’s office.”: Confos Affidavit [59].

45. Later than evening, Mr Dalton sought instructions to “release funds received into our trust account in accordance with Jon’s instructions”: GC-1 p 119. Mr Confos replied just after midnight “yes please deposit funds into my trust account” and provided him with details: GC-1 p 126. “Jon” is Mr Adgemis.

46. The following day, 22 March, Mr Confos received a phone call at around 7:15 am from Mr Adgemis, informing him that Mr Dalton would shortly write to him requesting that he “approve some funds to JAGA Securities so you can just reply yes to that”: Confos Affidavit [64]. Mr Dalton wrote around 15 minutes later, requesting approval to draw down $200,000.00: GC-1 p 126. Mr Confos duly approved that in accordance with Mr Adgemis’s instructions: GC-1 p 125.

47. On 25 March 2024, Ms Taubman of FFC Commercial wrote the below email which is contained in GC-1 p 138:

“Hi George and Jon

Please see Pre-Approval for the refinance of second and third mortgage on Dover Heights.

May you please sign and return asap – I am trying to get this expedited before the long weekend so time is of the essence!”

48. Despite the email being addressed to him, Mr Confos has no record nor recollection of having received it: Confos Affidavit [78]. Rather, it was “forwarded” (my expression) to Mr Confos by Mr Adgemis with the comment (GC-1 p 137-138):

“George,

Pls confirm you are happy to proceed on this by replying all and approving

Many thanks

Jon”

49. Approval was duly given: GC-1 p 137. Mr Adgemis wrote to Ms Taubman on the same day (GC-1 p 140) “George is going away [the morning of 28 March] – if possible, could we arrange documents by [afternoon of 27 March] for signing”. It would appear that was attended to with due despatch. Documents, being for the registration of Dover Heights Holdings, were sent through that evening at 6:44 pm via DocuSign and Mr Confos signed them at 7:05 pm: Confos Affidavit [82]-[83], GC-1 pp 141, 143.

50. On 26 March 2024 at 3:56 pm, Mr Confos signed a direction to pay releasing $100,000.00 of the Rose Bay Holdings 2 loan to the trust account of Mr Dalton: GC-1 pp 217-219. At around 4:50 pm, Mr Adgemis called Mr Confos informing him that Mr Dalton would shortly be in contact, seeking his authority to release funds to JAGA Securities, “so can you please just reply ‘yes’”: Confos Affidavit [92]. Shortly thereafter Mr Dalton wrote seeking approval to “release [$100,000.00] in accordance with the instructions of Jon Adgemis?”: GC-1 p 125. Mr Confos wrote back with his approval: GC-1 p 125.

51. On 3 April 2024, Mr Confos received an email from CBA seeking completion of a consent form in relation to the registration of a subsequent mortgage, being FCFG’s. He forwarded that email to Mr Adgemis with the text “Do I need to sign this. Not sure what it is”: GC-1 p 225. There is no evidence of a response.

52. Some weeks later, on 22 April 2024, Mr Confos wrote to Mr Dalton that he had received an SMS from CBA in relation to a subsequent mortgage request and he was shortly to be called by their representative. Mr Confos was unsure what it was about and sought information from Mr Dalton: GC-1 p 234. Also, in this correspondence Mr Confos identifies that he had been suffering from Dengue Fever. No response to that email was in evidence.

53. The following day, Mr Confos wrote again to Mr Dalton that he had been contacted by Mr Lyall who was “insistent” that the new loan documentation was settled. Mr Confos asked Mr Dalton when the new loan documentation would be ready for signing: GC-1 p 235. Again, no response is in evidence.

54. By early-mid May, the correspondence shifts to the establishment of the NNW Financial Loan. As has been adverted to above, that matter was dealt with in other proceedings in this Court. However, evidence around its establishment is probative in matter.

55. Loan documentation in relation to the establishment of the NNW Financial Loan was sent to Mr Dalton on 13 May 2024. The NNW Financial Loan was between NNW Financial and Dover Heights Holdings, with Mr Confos as guarantor. The email was sent to Messrs Adgemis and Confos on the same day by Mr Dalton, writing “please let me know when you want to execute”: GC-1 pp 237-238. I pause to note here that Mr Adgemis is neither a party to the loan nor a director nor shareholder of Dover Heights Holdings. That he is involved in this correspondence, particularly given it is correspondence occurring in the context of the solicitor-client relationship, is evidence that he is ‘calling the shots’ in relation to the disposition of Mr Confos’s property.

56. Mr Adgemis wrote to Mr Confos “Could you please go in and sign”. Mr Confos, who at this stage was in Crescent Head, NSW, informed Mr Dalton that he was returning to Sydney and can either attend the office in the afternoon (14 May) or the day after (15 May). I infer that Mr Adgemis was a carbon copy to this email, as he then replied (GC-1 p 237):

“George

I think it’s best for you to go in late tomorrow pls”

Mr Confos then told Mr Dalton he would aim to be there at 4:30 pm.

57. Mr Confos did attend on 14 May. An employed solicitor sent Mr Confos an email at 5:02 pm (GC-1 p 241):

“Hi George,

Thank you for coming in this afternoon.

Please find attached certificate of independent financial advice to be completed by your accountant.”

In that email chain is an email from Mr Dalton to the employed solicitor, which includes the words “yet another new loan matter.”: GC-1 p 242.

58. On 15 May 2024 at 1:48 pm, the same employed solicitor sent an email seeking, inter alia, an update on the certificate of independent financial advice. Mr Confos forwarded this email to Mr Adgemis, asking: “Did [Mr Andruska, JAGA Group CFO] send the form regarding the financial advice back…”: GC-1 p 246.

59. At 2:14 pm, Mr Andrusaka sent a certificate of independent financial advice, signed by him, to Messrs Adgemis and Confos: GC-1 pp 247-248. Again, it is unclear why Mr Adgemis would be party to this correspondence. Mr Confos’s evidence was that he did not receive any such financial advice: Confos Affidavit [112]. That certificate was sent on to the aforementioned employed solicitor: GC-1 pp 250-251.

60. It is only now after these steps that we come to the Loan Agreement subject of these proceedings. On 17 May 2024, Mr Adgemis called Mr Confos and said words to the effect of “Geroge, you urgently need to go back to [Mr Dalton] to sign more documents so that the refinance will go through.”. Mr Confos’s evidence was that he was unsure why those documents were not able to have been signed when he was at Mr Dalton’s office a few days earlier. Nonetheless he agreed and attended on the same day: Confos Affidavit [115]-[116]. From the recitals in the Deed of Variation, it is evident that the Loan Agreement was entered into this day, 17 May 2024. I infer that this was one of the documents signed on that occasion. I note here that the “Loan Deed” has a date of document at the front of 21 May 2024, while the signature is dated 17 May 2024. I infer Mr Confos signed the document on 17 May 2024.

61. On 20 May 2024, an employed solicitor of Mr Dalton wrote to Mr Confos (GC-1 p 257)

“Hi George,

I refer to the above matter and note that you have agreed with the lender to vary the terms of the loan by reducing the proposed advance owing to the reduction in the payout figure of FCFG Pty Ltd. I will be sending you a Deed of Variation to review and sign via DocuSign.

Additionally, we will need the following documents :-

1. Financial statements for Dover Heights Holdings Pty Ltd (ACN 676 076 074), 480 King Street Pty Ltd (ACN 660 595 773) in its own right and in its capacity as trustee for the 480 King Street Trust (ABN 23 397 169 874) – these should include a current balance sheet, current asset register and a list of liabilities, verified by an independent accountant;

2. George Confos :-

1. A current asset and liability statement, verified by an independent accountant; and

2. A list of companies, trusts, partnerships, ventures and projects in which you directly or indirectly have an ownership interest, verified by an independent accountant, and documents to support the ownership and financial statements for each company, trust, partnership and/or joint venture.

3. A statutory declaration from each Guarantor detailing:

1. The purpose for which the net available proceeds of the Advance will be used by the Borrower including particulars of the debt Advance is refinancing; and

2. The commercial benefit each Guarantor is receiving by granting the Guarantee Deed.

Should I write to Darren Barkas (Fetch Advisers) requesting items 1 and 2 above? I will be in touch regarding item 3 above.”

62. Mr Confos forwarded this email to Mr Adgemis and asked, “Should I get Alex [I infer Mr Andrusaka] to respond to it?”: GC-1 p 257. No response from Mr Adgemis is in evidence. Where there is no written response to emails, I consider it likely an oral response had been given of which there is no record, or recall recounted, in evidence.

63. Later on 20 May, Mr Dalton wrote to Mr Confos (GC-1 p 259):

“Hi George – we are pushing to settle. Can you please confirm (both for yourself and for the entity [Dover Heights Holdings] that we can act on Jon’s instructions in respect of all loan proceeds?”

64. Mr Confos wrote back (GC-1 p 258): “Jon never told me the instructions were, but I assume it was to discharge the commonwealth bank loan and Millbrook, correct?” [sic]. Mr Dalton responded on 21 May (GC-1 p 258):

“Thanks George – yes – it is the payout of Millbrook and CBA and new mortgage over your property in favour of NNW Financial for $8.55m + interest and costs.”

65. Mr Confos then provided his approval. No more than a minute later he received a Verification of Identity request from staff at ERA Legal, acting for BC First. In the afternoon of 21 May, Mr Confos received a Deed of Settlement and Release for signature via DocuSign, as well as a Deed of Variation and a Direction to Pay. Mr Confos attended a Zoom conference with the employed solicitor of Mr Dalton, and at 5:05 pm, that solicitor witnessed Mr Confos sign the Deed of Settlement and Release, Deed of Variation and direction to pay: Confos Affidavit [132]-[140], GC-1 pp 262-275. Mr Confos does not have a strong recollection of the contents of what was said at this meeting: Confos Affidavit [139].

66. At 5:14 PM, Mr Confos sent the employed solicitor a scanned copy of a statutory declaration: GC-1 p 276. I note that the scan partially obscures the text of the document, but in essence, it provides that Mr Confos is receiving a commercial benefit from the guarantee. Mr Confos confirmed that he did not receive any financial advice in relation to that guarantee: Confos Affidavit [142]. I interpolate here that I understand this to be same statutory declaration as featuring in Exhibit B, which is unobscured. I find it difficult to determine that any commercial benefit accrued to Mr Confos.

67. The Deed of Settlement and Release facilitated the discharge of the FCFG Mortgage in consideration of the payment of $1,340,200.00 from Rose Bay Property Holdings 2 and Messrs Adgemis and Confos: GC-1 pp 281-282, 293. The Deed of Variation reduced the Advance under the Loan Agreement to $1,500,000.00 (GC-1 p 293). The Direction to Pay (GC-1 p 311) provided that the $1,500,000.00 was to be paid as follows:

68. $1,255,500.00 to discharge the FCFG mortgage;

69. $15,000.00 to ERA Legal for their fees; and

70. $229,500.00 to BC First, representing an establishment fee of $49,500.00 and $180,000.00 in pre-paid interest for 6 months.

71. On 22 May 2024, Mr Dalton forwarded correspondence from ERA Legal to Messrs Adgemis and Confos. That correspondence records the variation in the agreement, and includes a statement from Mr Garth Andrews (GC-1 pp 312-314):

“We otherwise reiterate that our client requires, prior to settlement, a statutory declaration from each Guarantor detailing the commercial benefit each Guarantor is receiving by granting the Guarantee Deed.”

In reply to Mr Dalton, Mr Adgemis enquired when the transaction was settling.

69. In around October or November 2024, Ms Taubman contacted Mr Confos about the NNW Financial Loan, asking for an update on the refinance. Mr Confos’s evidence was that the conversation was to the effect of (Confos Affidavit [150]-[151]:

“MS TAUBMAN: I’m calling to get an update about how the refinance is going for the NNW Financial loan. The loan is in default because of the second mortgage on your home and you need to pay it out quickly.

MR CONFOS: These loans don’t have anything to do with me. This is Jon’s loan.

MS TAUBMAN: Ok, let me pass you onto Andrew, hang on. (Andrew is Mr Margi.)

…

MR MARGI: Hi George, I want to know when everything is going to be paid.

MR CONFOS: I can’t answer this. Those loans are to do with Jon. You should contact him about this.

MR MARGI: Well, why don’t you send an email then confirming that you authorise me to take instructions from Jon about the refinances?

MR CONFOS: Ok well let me check with Jon. He’ll know.”

70. Mr Confos then called Mr Adgemis, who said words to the effect of “do not send that email”: Confos Affidavit [152].

71. Mr Confos gave very brief oral evidence at the hearing. It confirmed that he had provided security for loans for Mr Adgemis in the form of his real property “quite a few times” but could not identify a precise number: T36.22-27. He never spoke personally to the lenders, nor had anything to do with them: T36.29-39.

Cross-Examination

72. Mr Confos was cross-examined over the course of the afternoon of the first day of the hearing. The thrust of the cross-examination was to his sophistication and experience in financial matters, rather than towards his relationship with Mr Adgemis or the nature of his involvement with the financiers concerned.

73. Mr Confos had attained his Bachelor of Pharmacy in 1985 and thereafter commenced practise, first as an employee, and from 1987 onwards, as a sole proprietor in his own business: T37.15-31. He accepted that in his career he had reviewed medications for doctors, created ointments, advised customers, made recommendations in relation to over-the-counter medications and provided advice, including through working with doctors and other health professionals to create treatment plans: T37.37-38.17.

74. From 1987 to 2005, Mr Confos’s pharmacy was located at Circular Quay, the premises for which he leased: T39.1-15. He accepted he had a solicitor assist him in relation to the lease, and again with the sale of the business in 2005: T39.19-24. Mr Confos signed documents in relation to the sale, indicating his consent to the terms of the sale: T40.35-41.

75. In 2005, Mr Confos went into partnership with another pharmacist at Maroubra. He “assumed” that he had used a solicitor to prepare the partnership agreement: T41.2-5. Again, he “believed” that he also retained a solicitor in relation to the lease in respect of the premises from which that pharmacy was conducted: T41.35-38. In 2015, when Mr Confos decided to retire, he and his business partner sold their interests in the pharmacy. In doing so, Mr Confos again assumed that a solicitor was involved but said that his business partner attended to that: T41.2-24. Mr Confos accepted that he has understood, since at least 2005, that when a person signs a document, they express their agreement with the document: T42.31-40. I understood statements that Mr Confos “assumed” or “believed” something to be an affirmative response to the question, although his recollection was hazy.

76. Mr Confos believed that he had been the director of various companies over the years. It was put to him that he had been the director of 28 companies, but he was unable to confirm: T43.1-8. However, he accepted that he had been the director of several companies, including with his family. A table of companies for which he had been appointed a director is in evidence at Exhibit D.

77. One of those companies was Fairline Management Pty Ltd, which managed the maintenance of an apartment building which formed part of his mother’s estate: T44.30-45. I interpolate here that Mr Confos was ostensibly appointed a director of Fairline Management Pty Ltd at the age of 1: Exhibt D p 3. The apartment block contained 32 units. Mr Confos managed the leasing of those apartment blocks: T45.10-11. Mr Confos was also the director of Marton Sales (No 1) Pty Ltd, which held an interest in the non-prescription aspect of the business carried on at the Maroubra pharmacy: T45.26-36. He was also a director of Confos Holdings Pty Ltd, but he was unable to say with certainty what that company did: T46.23-26.

78. Mr Confos was likewise the director of Kennedy Flats Pty Ltd. Mr Confos identified this company as being from his father’s development business. He had no recollection of his appointment nor of attending any meetings: T50.18-22. His evidence was that he was not unaware he was a director of his late father’s development companies: T47.1-3. Mr Confos was also the director of Pendecon Pty Ltd, which was set up for his personal finances and the finances of his immediate family (wife and children). He was likewise a director of the Greek Orthodox Parish of St George: T47.27-48. I do not propose to exhaustively summarise the other companies of which Mr Confos was a director, save for where it is specifically relevant, but suffice it to say I accept that he was the director of numerous companies and his evidence was that he was not aware of every appointment to a directorship. Given that he was ostensibly appointed to directorship of 8 of those companies while in his minority, I am inclined to accept that: Exhibit D.

79. In relation to real property, Mr Confos originally stated he only ever owned the Dover Heights Property and the Rose Bay Investment Property, which was a single apartment: T54.12-15; 55.10-14. He later clarified that he had inherited (along with his siblings) an interest in a property at Maroubra from his mother, from which he later ran the pharmacy. That property contained the area comprising the pharmacy as well as an area for a dental surgery and an apartment, which was leased out: T55.18-33. Mr Confos accepted that he borrowed monies and guaranteed various loans over the years, and that this process involved the signing of documents, including mortgages: T55.40-56.10.

80. When Mr Confos signed the Loan Agreement on 17 May 2024, he assumed it was a refinance of his home loan. He understood that document created rights and liabilities between the lender and mortgagor, including that it gave rights over the Dover Heights Property. He accepted that by signing the Loan Agreement, he was conveying that he agreed to it: T56.1-25. I extract the following exchange among Mr Newton SC, Mr Confos and I at T56.27-48:

“Q. At the time you signed this document you understood that if you did not comply with the terms of the mortgage the mortgagee could sell your property to recover moneys owing to it.

A. I assumed it had the same risk as any other mortgage, and that it was a refinance, and that there would have been security from whatever my money was being used to buy.

HIS HONOUR: No, could you answer the question, please, Mr Confos. I mean you've kind of answered it, but you haven't answered it directly. One of the risks Mr Newton asked you about, I'll ask him to ask you about it again.

NEWTON

Q. Sir, at the time you signed this mortgage you understood that if you did not comply with the terms of the mortgage, the mortgage lender could sell your property to recover moneys owing to it.

A. Yes.

HIS HONOUR

Q. That was one of the risks that you referred to a moment ago, was it not?

A. Yes, it was, your Honour.”

81. When Mr Confos signed the Loan Agreement at Mr Dalton’s office, he drove himself there. He “assumed” he went alone. Mr Confos did not recall whether Mr Dalton’s employed solicitor gave him any advice in relation to the loan or the documentation: T58.13-22.

82. It was put to Mr Confos that he was aware that BC First was advancing him money and he signed that documentation, which conveyed his agreement to be bound. He responded (T59.40-42):

“A. I was asked to go sign documents. I signed them. I was not aware of the name BC First 138. I am now. I just thought that it was part of my refinance that I'd signed two days before and I had to go back and sign something else.”

83. The refinance he was referring to was of the NNW Financial Loan. Mr Confos denied receiving any advice in relation to the Loan Agreement from Mr Dalton’s employed solicitor: T60.3-5. Indeed, he denied actually reading the documents, and instead relied upon his solicitor: T60.19-21. Mr Confos’s evidence was that he was unaware that he had borrowed funds from FCFG, and consequently he did not understand that that these documents related to a refinance in relation to it: T60.27-49. He gave evidence that “I was refinancing my home, and I assumed that these companies were associated with the refinancing of my home loan”: T60.45-49.

84. There was cross-examination to the extent that Mr Confos had attended and signed “loan and security documents” at the office of Mr Dalton on 21 May 2024. Mr Confos agreed to these propositions: T61.1-13. I am not sure the objective evidence makes that out. Indeed, the photograph of Mr Confos signing documentation at Mr Dalton’s office was dated 17 May 2024 (DJA-1 p 167). I do not think the date of entry into the Loan Agreement is itself material, but I nonetheless break the narrative here to observe that discrepancy in his evidence (see above at [60]).

85. When Mr Confos signed the Deed of Settlement and Release, he did not read it, having assumed it was part of his refinancing; T62.25-37. Mr Confos accepted that he received that document when he was at home, and no one was preventing him from reading it, although he was limited to reviewing it on his phone due to not having access to a computer. He accepted that he could have gone elsewhere to review it: T62.39-63.3. Again, he accepted that by affixing his signature to it, he was agreeing to its terms, regardless of whether he had read it or not, but that he was relying upon his solicitor: T63.9-20.

86. It was put to Mr Confos that he knew that FCFG had a mortgage over the Dover Heights Property. He responded that (T64.5-9):

“A. I would have recognised that a company, or an entity had a mortgage over my home, and I was refinancing that mortgage. The exact names, I probably don't recall.”

87. Mr Confos gave evidence that when he refinanced, he did so because he “assumed that we were looking for a better deal”. The “we” in question was him and Mr Adgemis, but Mr Confos himself was not doing the looking, rather, he was presented with a deal and told to go in and sign: T64.16-22.

88. When the Commonwealth Bank emailed Mr Confos on 3 April 2024 (GC-1 p 225), he was still ill with Dengue Fever and missed the phone call with the Bank. He accepted that email contained the words “Notice of Subsequent Mortgage” and the address of the Dover Heights Property: T65.13-41. His evidence was that he was so sick that he simply forwarded the email to Mr Adgemis for advice, and he couldn’t recall if he had actually read the email and its attachments: T66.28-32.

89. Mr Confos accepted that he would have assumed at the time that part of the refinance would have been used to discharge the existing loans over the Dover Heights Property owing to FCFG, but he “wouldn’t have known it directly”: T67.7-15. He later qualified this by saying he would not have known it was specifically for FCFG: T67.22-26.

90. From June 2021, Mr Confos accepted that he provided services to the JAGA Group but denied that involved providing advice in relation to property. He was “project managing” building sites for properties that Mr Adgemis had acquired: T67.28-41. It was put to Mr Confos that he received $25,000.00 per month as a fee in relation to the services, in reply he said, “It wasn’t every month, but yes”: T68.1-3. There was no written agreement for these services, but they involved dealing with contractors and tradesmen: T68.9-20. The role extended to organising maintenance over existing properties as well: T68.30-32.

91. The first mortgage taken out by Mr Confos against the Dover Heights Property was in 1987 and was in favour of the National Australia Bank. That mortgage was subsequently discharged in 2007 and replaced with one in favour of ANZ Bank, which in turn was replaced in 2015 by one in favour of the Commonwealth Bank (Exhibit E pp 2-9). Mr Confos’s interest in the Rose Bay Investment Property came to him by way from transfer from his wife in 2001, and together, they granted a mortgage to the National Australia Bank over that property: Exhibit E pp 11-13. A mortgage in favour of Bligh Finance No.1 Pty Ltd was also registered over the Rose Bay Investment Property, but both of these mortgages were discharged in 2021: Exhibit E pp 15-18. Millbrook obtained two separate mortgages over the Rose Bay Investment Property on 28 June 2021, both of which secured debts owing by Rose Bay Property Holdings 2: Exhibit E pp 19-21.

92. On the death of Mr Confos’s mother, her interest in the Marobura property was transferred to him and his siblings in 2005. They subsequently transferred their respective interests to St Mary’s & St Kyrillos The Fourth Pty Ltd in consideration for $3,400,000.00: Exhibit E pp 27-28. The date is not present on the documentation, but Mr Confos gave evidence that it occurred on 7 May 2016: T70.43-49.

93. Mr Confos was taken to an email he sent to a solicitor in the employ of Mr Dalton’s firm on 4 March 2021 (Exhibit E p 38), which related to the discharge of a mortgage. Mr Confos wrote:

“…

I realise the mortgage accounts require tume [sic] for paperwork and procedures to discharge but is it possible in the meantime to repay the Maroubra Pharmacy trading account… which is in excess of its overdraft and its attracting higher interest and penalty charges.

…”

94. It was put to Mr Confos that he was able to give instructions to solicitors in relation to refinancing of his mortgages. Mr Confos distinguished the mortgage referred to above as being a personal mortgage, as opposed to one organised by Mr Adgemis, of which he was merely a guarantor: T71.49-72.2.

95. Mr Confos accepted that he had signed the FCFG Mortgage in the presence of Mr Dalton (Exhibit E pp 92-93). FCFG’s mortgage in respect of the Rose Bay Investment Property was also in evidence at Exhibit E pp 96-97. Mr Confos accepted that he and his wife had attended the office of Mr Dalton to sign that document: T73.9-11. He was aware that when he signed both of these documents he was mortgaging to FCFG both properties: T73.13-17.

96. A document described as a “Facility Summary” (Exhibit E pp 100-104) was in evidence. It showed an agreement for $1,900,000.00 between a lender, being FCFG, and a borrower, being Norfolk Holdings Co Pty Ltd, with Mr and Mrs Confos as guarantors. Of the mortgaged property, two were the Dover Heights Property and the Rose Bay Investment Property. Page 103 of Exhibit E has Mr Confos’s signature, under which is his name and the words “Sole Director and Sole Secretary”. That document was signed in the presence of Mr Dalton: T74.14-20. Page 104 contains a notice to the guarantors requiring them to take legal advice and notifying them of the consequences of a borrower’s default. That document was likewise signed in the presence of Mr Dalton (although it would appear Mrs Confos’s signature was witnessed by another solicitor). A drawdown authority for the same loan, as well as a borrower’s advice declaration was likewise in evidence (Exhibit E pp 112-114).

97. Mr Confos accepted that he attended Mr Dalton’s office in April 2021 for the purpose of signing this suite of documents which related to a loan from FCFG: T75.1-9. Again, he reiterated that he “assumed it was like a normal mortgage procedure; we were refinancing an existing loan”: T75.15-16.

98. On 21 March 2024, Mr Confos believed that he went to Mr Dalton’s office for the purpose of signing documentation relating to the establishment of the loan between Rose Bay Holdings 2 and FCFG: T75.28-3; Exhibit E p 150. I interpolate here that these documents give rise to the FCFG Mortgage.

99. Mr Confos said that when these documents were signed, he was hoping that he would have more of a role in Mr Adgemis’ business, but that he never became a decision maker. He accepted that he was involved in project management services, and for a time received $25,000.00 per month for the provision of project management services: T75.46-76.8.

100. In response to a Notice to Produce, an “Independent Contractor Agreement” was provided (Exhibit E pp 274-280). That document sets out an agreement between Mr Confos and JAGA Group for the provision of “services in the property advisory field”, and in return Mr Confos would be paid $25,000.00 plus GST per month from 1 June 2021 for a period of 3 years. Mr Confos’s evidence was that he received those payments a “few” times, but “not many”: T77.10-15. Payslips that were in evidence indicate that Mr Confos received that figure in the months of January, February, March, April and May of 2021: Exhibit E pp 281-285.

101. Mr Confos’s evidence was that he did not deal with the hotel managers nor the general running of the business, rather with the refurbishment and maintenance of the properties: T78.46-79.1.

102. Mr Confos was taken to the makeshift ledger of his accounts (GC-1 p 2). He prepared this document at home through going through his family trust account and his draw down facilities: T78.30-40. It was not an evolving document, rather it was created in one day for his personal recollection, but he couldn’t recall when: T80.6-14.

103. When Mr Confos was appointed the manager of the Lady Hampshire (a public house in Parramatta), he “did nothing himself”. He proffered that he was appointed as he had a liquor license, and “once the business was up and running it would have been transferred to whoever was the manager of the venue”: T81.9-20. The signature on the appointment notice was neither of Messrs Confos nor Adgemis: T81.45-49.

104. Mr Confos owned a beach bar called “The Lawn” in Bali with Mr Adgemis, which was managed by a man called Tai. An email dated 4 November 2022 from Mr Confos to Mr Adgemis about this was in evidence at Exhibit E p 316. It included the following:

“I took your advice and had a real good think about Bali and what I wanted. Much of my interest was driven by the fact that I'd very little to do and needed something to get involved in. Now after our discussion this week about crescent head etc my thinking has changed a bit. To be honest an investment of 6.7m was only appealing if there was a benefit for the group or us. Something I could drive for the group or us like an overseas surf hotel brand which we have often spoken about, something Tai would be a perfect partner in.”

105. The Lawn was established in 2016, but by the time of the email, they had sold it. Mr Confos did not know where the money went, but he assumed Mr Adgemis had invested in “the company”: T82.41-83.12. Mr Confos had asked Mr Adgemis about it but never received a straight answer: T83.26-32. Mr Confos had been over to the beach bar, but Tai was a “control freak”, and indeed Mr Confos never received any money from it: T83.42-49.

106. Mr Confos told Mr Adgemis that Tai was a control freak, and Mr Adgemis dealt directly with Tai. Mr Confos’s evidence was that Tai “was not going to reveal [financial records] to myself”, instead only dealing with Jon. This is despite Mr Confos going to the beach bar two or three times a year for the three-year period for which they owned it: T84.10-41. Any information Mr Confos did receive from Tai was nonspecific: T84.48-50.

107. Separate to The Lawn, and merely a couple of weeks after the above email, Tai brought Messrs Adgemis and Confos another business venture. The pair invested a further $250,000.00 into that venture (Exhibit E p 318) as a deposit. Further payments could not be made and consequently the deposit was lost: T85.25-28.

Assessment

108. If the above flurry of transactions between various seemingly disposable corporate entities seems confusing, that is because they are. My overall impression of the evidence was that Mr Confos was hopelessly overwhelmed by the quagmire into which his financial affairs had developed, and he was led into this predicament by the predations of Mr Adgemis. Even with the benefit of time, hindsight, lengthy evidence, and the submissions of two very experienced senior counsel, unravelling Mr Confos’s financial situation has been far from straightforward.

109. Mr Confos is perhaps not the textbook plaintiff in a contract review case. I accept he is a professional who conducted a pharmacy business for 30 years. He has a level of sophistication at least in small business and is not entirely devoid of financial acumen, as Century 311 submitted. Neither does he suffer from an intellectual or mental disability which is often present in such cases. While not a young man he is not elderly or vulnerable by reason of age-related frailty.

110. It is, however, clear to me that Mr Confos fell entirely under the thrall of Mr Adgemis. I accept his largely unchallenged evidence that he was overcome by the apparent success of Mr Adgemis in business and placed his financial assets at his disposal. It is very obvious from the evidence which I have summarised above Mr Adgemis was calling all the shots and Mr Confos was incapable of standing up to him.

111. The chain of emails in Exhibit 5 between Messrs Confos and Adgemis are illustrative of this. As a good example only, Mr Confos writes in October 2020, lamenting at his lack of a role (p 2):

“…

Anyway that aside what frustrates me the most is all the unanswered SMS’s and to be honest it made me think why I’m not excited about the project we are about to go on although I believe in the concept and want to work with work. I think its because I never know whats going on and have never been involved in the decision making. I still don’t know exactly what my role will be and how I will fit in. I feel you are keeping me on only because I helped you financially to get this off the ground and for me that’s not enough. Because I don’t want a job out of pity or more so it to [sic] ruin our relationship I want you to know that its ok if you have no place for me where I can really contribute you can just tell me without me getting upset. I have no idea what I will do please don’t keep me on unless I can really contribute as I could not handle being a passenger or feel insignificant.

…”

112. There are numerous emails which hold a nearly identical tone to this. Mr Confos writes, often without response, expressing frustration, anxiety and discontent at his financial position and lack of communication from Mr Adgemis, but then much of the correspondence descends into obsequious fawning over Mr Adgemis and often a not insignificant level of self-deprecation (“I feel like a leach”: Exhibit 5 p 23). He constantly seeks validation, approval and support from Mr Adgemis, who withholds it until Mr Confos is seemingly at a breaking point, before bestowing his favour to secure Mr Confos’s loyalty, and borrowing capacity, for an additional term. To illustrate this, I will extract a series of quotes from this correspondence:

113. Confos to Adgemis, 27 March 2021: “I trust u implicitly but I see these big numbers on documents that I’m guarantor and I get nervous and feel vulnerable especially as I’m in the dark for a lot of it”: Exhibit 5 p 12.

114. Adgemis to Confos, 28 March 2021 (in reply): “… we are on the final stretch of the final stretch… I need you, there is no doubt about that”: Exhibit 5 p 12.

115. Confos to Adgemis, 21 August 2021: “I gave till it hurts financially because I believed in in what you were creating but somewhere along the way I got left behind…”: Exhibit 5 p 20.

116. Adgemis to Confos, 21 August 2021 (in reply): “I’m truly excited about the journey we are about to embark on and there is genuinely a role for you”: Exhibit 5 p 19.

117. Confos to Adgemis, 15 February 2022: “Sorry to hit u with this again but I don’t want to bother you so I bottle it up which makes it worse. Basically I feel excluded, I gave all my spare cash and guaranteed my home and unit hoping to be more involved and part of something but I am not: Exhibit 5 p 30.

118. Confos to Adgemis, 25 May 2022: “I’m in a downward spiral and I cannot get out of it. I’m sorry but I can’t do this anymore… It made me realise how insignificant I am in the company as [the employees] must see me as nothing”: Exhibit 5 p 31.

119. Confos to Adgemis, 19 October 2022: “I have been promised so many things but none have come into reality… I’m appreciative of everything u have done for me… sorry to unload like this but I can’t seem to ever talk to you nor get replies to my messages… ”: Exhibit 5 p 42.

120. Confos to Adgemis, 9 March 2023: “I hoped I could hang on for a little longer but I’m realising that’s not possible… I don’t even own my house anymore. All I have is debt to leave behind. Hence why I feel like a failure especially as I’m not really part of the organisation I basically threw all my life saving into and went into debt for… if u can give me an idea what I have I would appreciate it as I have no idea”: Exhibit 5 p 52.

121. Confos to Adgemis, 7 May 2024: “its almost 3am and looks like another sleepless night… most of this debt is for the company, a company I have no say in nor do I ever know what I am. Am I a director, a shareholder or just an investor… I have no idea all I know is I’m broke and hanging on by a thread begging for money… sorry to speak like this Jon but that letter from the bank has sent me in a spin… I’m so depressed I am again not sleeping at night”: Exhibit 5 p 59.

122. These are not exhaustive. They are offered rather to provide further examples of Mr Confos’s high level of dependency on Mr Adgemis. Each time Mr Confos declares that the final straw has been reached and he is financially exhausted, he is nursed back to confidence by Mr Adgemis. Mr Adgemis doubtless knew that Mr Confos was particularly vulnerable to flattery and desperately sought to demonstrate his value. One might expect that a businessman comforting an investor would do so with assurances of the viability of the investment and forthcoming profit. But here, the assurances are ones of personal value (“I need you, there is no doubt about that”: Exhibit 5 p 12), and of affection (“I love you Nono [Greek for Godfather]. Thank you for being there for me. I don’t express my gratefulness and love enough to you”: Exhibit 5 p 7). In the context of the incredible level of debt that Mr Confos was absorbing, it is difficult to accept that these are truly (and purely) genuine expressions of familial love, rather than a predatory allaying of fear to secure his line of credit.

123. To the extent that Century 311 points to Mr Confos having independent legal advice, I do not accept that. The solicitors ostensibly representing Mr Confos’ interests were Mr Adgemis’ solicitors. Indeed, Mr Adgemis was carbon copied on correspondence that he had no apparent basis to receive. For example, when the loan documentation was being exchanged for the loan between FCFG and Rose Bay Holdings 2 (which I repeat, Mr Confos was the sole director and sole shareholder of), Mr Dalton first sent correspondence with the documents to Mr Adgemis alone: GC-1 p 115-116.

124. By the time of the entry into the Loan Agreement on 17 May 2024, Mr Confos was in a financially hopeless situation. While he had received, some 3 years earlier, 5 months’ worth of a salary for services rendered to the JAGA Group, that appears to have been, on the evidence before me, the extent of the monies actually received from Mr Adgemis or his companies. The fact that it was a salary, rather than say a share of profit, belies any ownership or beneficial interest in the Adgemis companies or enterprise. While the money he received as part of that package, for as long as it was paid, was not insignificant, and indeed may have been disproportionate to the work he actually performed, it was very clearly paid to him on the basis of a salary, and it was only done so for a relatively short period of time. Soon after, the proverbial well dried up, and Mr Confos was left with no way to service his increasing debt. Indeed, the effect of the continuing series of mortgages taken out by Mr Confos at the direction of Mr Adgemis has been nothing short of financial avunculicide.

125. I am satisfied that Mr Confos was under the undue influence of Mr Adgemis and completely incapable of exercising any independent financial judgment when he entered into the Loan Agreement. Mr Young SC submitted that Mr Confos was the “financial serf” of Mr Adgemis, and I consider that description of their relationship at in financial matters to be wholly appropriate.

126. As explained in PW Young, C Croft and ML Smith, On Equity (2009, Lawbook Co.) at [5.330] ff, undue influence may be established by evidence that the disposition of the property in question was in fact procured by the actual undue influence of another it does not depend upon the categories of relationship from which a presumption of undue influence arises. Undue in context means improper or unconscientious. As the learned authors observe:

“[t]he relevant inquiry in undue influence is not whether the transferor intended to transfer the property, but how that intention was produced. Accordingly, a claim of undue influence will not be defeated simply by establishing that the transferor consented to or understood the transaction.”

(Cited in Walton v Walton [2015] NSWSC 218 at [28]-[34], Stevenson J.)

This is, in my view, entirely apposite to the contract at hand. There is no question in my mind that Mr Confos entered into this mortgage, and the FCFG mortgage because Mr Adgemis told him to. I am also of the view that given the extensive course of dealing between them, regardless of the interposition of sundry corporate entities, Mr Andrew Margi, who was ERA’s “real client” knew of this relationship of dependency between Mr Adgemis and Mr Confos. Mr Margi knew that Mr Adgemis was the real borrower.

Unjust?

118. It is necessary for me to consider whether the contract constituted by the Loan Agreement and the Mortgage itself is unjust: Khoshaba at [107] (Basten JA). While an absence of knowledge of the facts said to give rise to the injustice by a defendant is not sufficient to negative the petitioner’s right to relief, it is a factor which will have “significant weight in its favour”: Khoshaba at [77] (Spigelman CJ). I stress, however, that is not a determinative factor. As I have said the evidence establishes that Mr Margi, whom I take to be the controlling mind of BC First and other private financiers involved with financing Mr Adgemis’s enterprises, knew the BC First loan was for the benefit of Mr Adgemis and not Mr Confos. Mr Confos’s exposure was due to his enlistment by Mr Adgemis as a guarantor acceptable to Mr Margi. He was also a volunteer, at least in the sense that none of the proceeds of the loan flowed to him.

119. Assessing injustice for the purpose of the CR Act is a process which involves evaluation and is highly fact specific. As Allsop P (as the Chief Justice then was) observed in Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36 at [7]:

“[an evaluation of unjustness] involves the normative evaluation of the totality of relevant circumstances. Inevitably minds may differ as to conclusions about such questions. Also, it is often not fruitful to compare other cases with the particular circumstances at hand, lest one be deflected from an appropriate overall assessment by focus on particular aspects relevant to any such comparison. Central to the normative evaluation is the recognition that there is a need for the protection of some people in some circumstances, who are not able fully to protect their own interests against factors that may cause injustice. That vulnerability may come from one or more of many circumstances, such as lack of education or of intelligence, from gullibility, from the predation of fraud and greed, and also sometimes from loyalty and love. The characterisation of a contract as unjust and the sheeting home to the other contracting party of the consequences of its unjustness may be a difficult evaluative exercise. At its heart, however, is the recognition of the inadequacy of one party to protect her or his interests in the circumstances….””

120. I also accept that an element of the standard of “justness” in this context is holding parties to the performance of their contractual obligations: Baltic Shipping Co v Dillon (1991) 22 NSWLR 1; [1991] NSWCA 19 at 9 (Gleeson CJ). Justness is not a one-sided consideration, the primacy of the contract as it relates to ensuring certainty of bargain and freedom of contract may be a powerful factor telling against relief under the CR Act.

121. I accept that one of the most powerful considerations in these cases is the extent to which an aggrieved party has received some benefit. That was a point of some contention between the parties. Mr Confos’ submission was that he did not receive a benefit at all, while Century 311 points to the discharge of the FCFG Mortgage as an incontrovertible benefit, cf Elkofairi v Permanent Trustees Company Limited [2002] NSWCA 413; (2002) 11 BPR 20,841 (“Elkofairi v Permanent Trust”).

122. I accept that the implementation of the Loan Agreement resulted in the discharge of the FCFG Mortgage. Prima facie, that is a benefit. But upon closer examination, that does not survive scrutiny. The undue influence that existed between Mr Adgemis and Mr Confos did not spring into being in the 2 months between the respective inceptions of the FCFG Mortgage and the Loan Agreement. The FCFG Mortgage was a product of the undue influence, just as much as BC First agreement was. It was just as much to fund Mr Adgemis’ enterprise as the Loan Agreement.

123. Even then, Mr Adgemis was a co-guarantor of the FCFG Mortgage. When that mortgage was discharged, Mr Adgemis sidestepped that potential personal liability, and left Mr Confos at greater exposure standing alone with no prospect of refinancing at the end of the term of the loan of only six months. The supposed exit strategy was either that or the sale of his home from under him and wife. This was the exit strategy specifically approved by Mr Margi: Exhibit 4, tab 10; email 20 May 2024, 12:44 pm. At its highest, the only benefit that Mr Confos received from the discharge of the FCFG Mortgage was a brief, ephemeral stay of execution for a period of six months. I do not think that counts for much at all in these circumstances.

124. “These circumstances” include the consideration that in truth Mr Adgemis was the borrower regardless of the interposition of a worthless, non-trading entity of which Mr Confos was put up as the controlling mind, to the knowledge of the controlling mind of BC First. There was no way Mr Adgemis was good for the money when due (short of a miraculous turn around in his fortunes) and Mr Adgemis would be walking away from direct personal liability even as a guarantor, leaving Mr Confos with his valuable security ‘holding the can’, to Mr Margi’s knowledge.

125. Neither FCFG nor BC First (sharing a common director in Mr Margi) could have seriously considered that either Rose Bay Holdings 2 or Dover Heights Holdings were in any position to repay the loans. Even their names would evince an absence of an intention to trade. Instead, FCFG and BC First fundamentally understood that in the event of a default, it was Mr Confos and his guarantee which would be called to answer. And his only prospect of answering the call, as I have said was the sale of his home. No lender operating on a commercial basis would lend a retired pharmacist of senior years the type of money necessary to pay out not only the Loan Agreement but also the NNW Financial Loan of which Mr Margi was well aware. Indeed, Mr Margi was concerned that the BC First mortgage should be subordinated to the NNW Financial mortgage in the sum of $8.55m: Exhibit 4, tab 11, email 21 May 2024 at 3:05 pm. When there was a hitch of some kind about compliance, Mr Margi instructed ERA, “I have spoken to [Mr Adgemis] he has agreed to have [Mr Confos] sign a deed of release” (my emphasis): Exhibit 4, tab 9, email 20 May 2024 at 12:29 pm. This is powerful evidence indicating that Mr Margi was well aware that Mr Confos was under Mr Adgemis’ command, especially in the absence of oral testimony from Mr Margi otherwise explaining his understanding.

126. I accept, as Mr Newton SC submitted, that BC First was not indifferent to the need to exercise care with the preparation of the paperwork which underpinned this loan. This was certainly undertaken by ERA with great diligence. The appearance is of an entirely arm’s length transaction from Mr Confos’s standpoint. Appearances can be deceiving. But BC First did not conscientiously evaluate the “application”, which in truth emanated from Mr Adgemis not Mr Confos, the guarantor. They accepted a formulaic statutory declaration from Mr Confos which provided that he was receiving a financial benefit, without ever enquiring what that benefit was.

127. No steps were taken to ascertain what capacity Mr Confos had to repay the loan in the event of default. As I have said, any step taken would have revealed a retired man with one about to be heavily encumbered asset, being his family home, as the only way of making good his obligations as a guarantor. No objective evaluation of the loan application from Mr Confos’s standpoint could have regarded the proposed loan as prudent. Some analogy may be made with Elkofairi v Permanent Trust*.*

128. Were this a case run solely on equitable principles, the factors to which I am referring may be enough to fix BC First with actual knowledge of Mr Confos’s vulnerability. But that is not the exercise I am required to undertake. Rather, I am to take a global approach to evaluating “justness” as it relates to this contract, and on balance, I am satisfied that Mr Confos’s entry into this contract was unjust. It was an entry predicated against the background of ten years of largely exploitative financial transactions, emotional manipulation by a family member, and a distinct lack of real benefit by Mr Confos.

129. When one looks at the considerations under the CR Act s 9(2), it is clear that many of these factors militate in favour of a grant of relief: there was no negotiation that Mr Confos was party to (s 9(2)(b)); the financially ruinous position of Mr Confos at time of entry into the loan agreement (s 9(2)(f)); the absence of truly independent legal and financial advice (s 9(2)(h)); and the actual relationship of undue influence I have found existed between Messrs Confos and Adgemis (s 9(2)(j)). I accept and take into account that Mr Confos understood the nature of the Loan Agreement and mortgage, but I consider this to be of less weight given the undue influence under which Mr Confos was labouring and BC First awareness of it through Mr Margi and his close business relationship with Mr Adgemis. As the Court of Appeal has held, the application of the standard of justness under the CR Act is not a matter of mathematical calculus: Khoshaba at [112]-[113]. Moreover, if there was no actual predation by BC First in the entry into the Loan Agreement and mortgage, Mr Margi’s attitude resembled it. He certainly turned a blind eye to Mr Confos’s financial position which at the very best was teetering on the brink of ruination in the event of any default, which even in prospect seemed likely, especially when one factors in the NWW Financial loan being negotiated with Mr Adgemis at the same time.

130. It is not without relevance that of the $1,500,000 advanced, $1,255,500 was to pay out Mr Adgemis’s debt due to FCFG. The balance of the funds was disbursed back to BC First by way of an establishment fee, the advance payment of interest, and its legal fees payable to its solicitor (Exhibit DJA-1, p 211; “Direction to Pay”). Nor is there any doubt that Mr Margi was well aware that Mr Adgemis was the borrower and that the funds were being used to pay out outstanding fees and commissions due to Mr Margi or another of his entities.

131. Mr Margi was not called to give evidence, though clearly, he would have been in a position to give evidence about his relationship with Mr Adgemis and his personal knowledge based upon his direct observations of the relationship between Mr Adgemis and Mr Confos. There are doubtless other matters relevant to the CR Act claim upon which he could have cast light. He was directly involved in the negotiation of the BC First loan. On 4 March 2024 at 10:29 am, Mr Margi sent a text message to Mr Adgemis in the following terms referable to the BC First loan (Exhibit 6, p 274):

“Jon can you send me a proposal on this loan now the borrower can’t be anyone else but you. I wasn’t going to do this if Joe was the guarantor as you noted his net asset position outside this property is 15m. I would only do max net 1.75m 750k to you, 750k for my previous outstanding fees and commissions and 250k as a risk fee on this loan.

I am not being a c[***] but please understand due to your situation it’s like a non recourse facility as you have PG debt way and above what can be recoverable.

If the above is all good how are we at day 1 value of 18m.” [sic] (My emphasis.)

The evidence does not really identify “Joe” or his part if any in Mr Adgemis’s scheme of things. He may have been the “Italian lender” referred to elsewhere in the evidence (see Exhibit 6, p 277). What can be said is that Mr Margi did not regard his net asset backing of “15m” sufficient to guarantee the loan given Mr Adgemis’s “situation… [and] debt way and above what can be recoverable”. Apparently, Mr Confos’s “net asset position” was considered by Mr Margi as acceptable for a guarantor of Mr Adgemis’ debt which was “way and above what can be recoverable”.

132. I am not in any serious doubt that when the BC First Loan was advanced, Mr Margi was under no illusions as to Mr Adgemis’s precarious financial position. This appears to be common knowledge among Mr Margi’s associates with whom he communicated. I draw this inference in part from the following text message from Mr Margi to Mr Adgemis of 14 March 2024 (Exhibit 6, p 276) and in part from the failure of Mr Margi to give evidence:

“Dude this technically easier as money hasn’t been repaid to me but much harder than you can ever believe to achieve the result we all require and not having any help or acknowledgement from Justin as he is very reserved. His exact words he has so much debt to you and not in a position to review my loan as its my job so he says good luck. (sic) [winking emoji]”

I have borne firmly in mind that Mr Margi was involved in the much larger NNW Financial Loan which was also premised on the consideration that it would be backed by Mr Confos’s equity in the Dover Heights Property.

133. Looking at the matter objectively, it is one thing for an investor to accept a high-risk-high-reward bargain whereby he or she puts equity in property on the line for the potential of a high-yield which does not come to fruition. Taking the risk justifies the high return when it comes off. It is entirely another for a party to be saddled an enormous liability following repeated emotional (and financial) assurances from the borrower without any prospect of even a small profit. The only prospect here was for creditors, inevitably, to come knocking to repossess the family home. I am satisfied that the facts of this case are such that Mr Confos’s entry into the Loan Agreement was unjust.

Discretionary Factors

134. The final stage of the claim is the exercise of my discretion to grant relief. In Khoshaba, Basten JA (at [109]) described this power as “truly discretionary”. The facts of the case will naturally inform my discretion to grant or refuse relief.

135. From my findings of fact above, I consider that Mr Confos was led into the guarantee through undue influence and that BC First were fixed with at least constructive knowledge of that circumstance. There is simply no evidence that the monies that he guaranteed under the Loan Agreement were ever capable of being repaid by him, other than through the sale of the Dover Heights Property. As I have said no commercial lender was ever likely to refinance the loan.

136. Mr Confos is retired, and while not an elderly man, his days of fulltime employment are long behind him. He had no exit strategy worthy of the name. He either stayed on Mr Adgemis’ roundabout of finance and re-finance until that bubble burst or sold his home to discharge Mr Adgemis’ debts. In all the circumstances I have identified, holding Mr Confos to these disastrous consequences does not in my opinion equate with current community understanding of the standard of justness.

137. Consequently, I am satisfied that I should exercise my discretion to grant relief. I accept that by analogy the maxim, “he who seeks equity must do equity” applies to relief under the CR Act. However, for the reasons I have sought to explain, I am not satisfied that Mr Confos received any commercial benefit from any of these transactions into which he was led for Mr Adgemis’ benefit by his improper influence.

Orders

138. My orders are as follows:

139. On the Amended Statement of Claim, judgment for the defendant.

140. On the Cross-Claim, judgment for the cross-claimant.

141. Under s 7(1)(b) of the Contracts Review Act 1980 (NSW) declare the Deed of Guarantee and Indemnity void.

142. Under s 8 of the Contracts Review Act 1980 (NSW) the mortgage bearing identifier AUXXXXX is set aside.

143. The plaintiff is to pay the defendant’s costs of the proceedings.

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