62 Both Mrs Camilleri and Mr Tremolada gave an account that Frank Pugliese had said words to the effect "Liz, you are really the lender" during the course of the conference in the solicitor's office. The matter is significant. Had it been said, it put the solicitor on clear notice that the purpose of the loan was not as stated in the loan application. The solicitor denied that any such comment was made.
63 Ms Dowling, who appeared for Mrs Camilleri, submitted that I would accept Mrs Camilleri and Mr Tremolada since both had given an account of a remark of this character in their first statements. The solicitor did not recall the contents of the conference and his denial had to be viewed in this light.
64 Mr Pugliese submitted an application for loan to the solicitor stating that Mrs Camilleri was planning to carry out developments to her property. It is common ground that he repeated that this was the purpose of the loan at the commencement of the conference. I consider that it is somewhat improbable, against that background, that Mr Pugliese would have stated in the solicitor's presence that Mrs Camilleri's role was that of lender. Had such a comment been made I expect the solicitor would have noted the discrepancy and made an inquiry. There is no suggestion that anything of that sort occurred. Given the reservations I have concerning the evidence of both Mrs Camilleri and Mr Tremolada, I am not persuaded that it is more probable than not that Mr Pugliese said words to the effect "Liz, you are really the lender" in the course of the conference in the solicitor's office.
The content of the solicitor's advice
65 Mrs Camilleri and Edward Tremolada both gave an account that the solicitor had told Mrs Camilleri that she was borrowing $250,000 at an interest rate of 9.25%. The solicitor had otherwise not given any explanation of the terms and conditions of the transaction (although both recalled that the solicitor had raised an issue to do with the payment of interest "up front").
66 Mrs Camilleri said the conference occupied some ten to fifteen minutes. She said that Frank Pugliese had been running late when he picked her up. She described the solicitor as hurrying them out of the door at the conclusion of the conference. Mr Tremolada also described Frank Pugliese as running late on the day of the conference. He described the conference as not taking longer than fifteen minutes. He said that the solicitor had said "we'll make this quick because I've got another client".
67 In the first affidavit the solicitor said:
"The meeting on 23 April 1997 lasted about thirty minutes. In particular I said words to the effect:
"You're entering into a mortgage where you're giving your property as security for the principal sum of money you're receiving. The clauses in the mortgage contract deal with default. You pay a higher rate of interest if you're late in paying. You could lose the property if you default in the interest payments or fail to repay the capital amount".
I recall that she said jokingly in reply:
"Then I'd get you"."
68 In the second affidavit the solicitor expanded the account earlier given as to his advice to Mrs Camilleri concerning the transaction. He said that, in accordance with his usual practice, he would have informed her of a number of matters which he set out in paragraph 12 of the second affidavit. In the course of cross examination the solicitor agreed that the advice given to Mrs Camilleri during the conference may not have been as full as the account given in the second affidavit.
69 Thus, in the solicitor's second affidavit he asserted (again, in accordance with his usual practice) that he would have said "Mrs Camilleri there's a cheque to be payable to you in the sum of $250,000. What would you like to be done with it?" He stated that Mrs Camilleri would then have given him instructions in relation to how the cheque was to be dealt with. In oral evidence the solicitor did not seek to maintain that such an exchange had occurred.
70 Both Mrs Camilleri and Mr Tremolada in the course of their first statements recalled Mr Pugliese saying prior to the execution of the mortgage document words to the effect that it was just the legality about which he had spoken to Mrs Camilleri in the car. In the course of his cross examination by Ms Dowling the following was put to the solicitor:
"Q. The only thing that you said to Mrs Camilleri about the mortgage was that she was borrowing $250,000 at 9.25% and when you got that far Mr Pugliese said words to the effect of "This is the legalities of what I explained to you in the car" and you said, "Oh good", that is what happened, isn't it?
A. Yes, I recall that being said.
Q. And you were comforted by what Mr Pugliese said because you assumed that he had explained to Mrs Camilleri what she was going to be entering into?
A. Well, it led me to believe that she knew why she was in my office, to sign the mortgage, but that was not the only thing I said. I did go on to say that she could lose her house."
71 Mrs Camilleri and Mr Tremolada denied that the solicitor had informed Mrs Camilleri that she stood to lose her house in the event of default. Mrs Camilleri denied saying to the solicitor "well, then I'd get you".
72 In the course of his cross examination the solicitor asserted that Mrs Camilleri had twice said to him "well, then I'd get you". This was a detail in somewhat different terms to the version of this exchange which he had given in the first affidavit. It is an important matter and I had some difficulty in understanding how it might be that the solicitor had failed to refer to the repetition of this phrase at the time he prepared the affidavit.
73 I accept Mrs Camilleri's evidence that in conversations with Mr Pugliese prior to the conference with the solicitor on 23 April, she had been reassured that there was no risk to her associated with the investment proposal because both the AMA Group and the solicitor had indemnity insurance. Had the topic of default and the associated risk of loss of her home been raised during the course of the meeting on 23 April, it might be expected that Mrs Camilleri would have raised her belief that the indemnity insurance would protect her. None of those who gave evidence concerning the meeting suggest that the topic of indemnity insurance arose in the course of the conference at all.
74 The solicitor said that Mrs Camilleri did not say very much during the conference. Indeed, it was his evidence that she did not ask a single question. I consider it probable that the conference was a short one. The solicitor's concession that he said "oh, good" when Mr Pugliese said he had explained the legalities to Mrs Camilleri in the car seems to me to lend support to this view. I note that the solicitor's diary was tendered to show that he had not recorded any appointment following that allocated to Mrs Camilleri on 23 April 1997. The diary appeared to record very few appointments and I found it of little assistance in resolving this issue.
75 I am satisfied that it is more likely than not that the solicitor did not explain the terms and conditions of the mortgage (other than those relating to the principal sum being borrowed and the interest rate) believing that Mr Pugliese had done so. Importantly I do not accept that the solicitor explained the consequences of default to Mrs Camilleri nor do I find that she said to him "then I'd get you".