Gemi Investors Pty Limited v Cetin

Judgment

1. The plaintiff and cross-defendant in these proceedings, Gemi Investors Pty Ltd (Gemi), seeks an order pursuant to s 66G of the Conveyancing Act 1919 (NSW) that the whole of the land at 1/21 Railway Parade, Lidcombe in New South Wales (the Property) be vested in trustees on statutory trust for sale.
2. The Property is owned by: 1. the first defendant and first cross-claimant, Mr Rahmi Cetin; 2. the second defendant and second cross-claimant, Mrs Nurten Cetin; 3. the third defendant, Mr Mehmet Cetin; and 4. the fourth defendant, Mrs Sevda Cetin, 5. as joint tenants.
3. Gemi claims to be entitled to an order under s 66G on the basis that it has a charge over the interests of Mr Rahmi Cetin and Mrs Nurten Cetin in the Property pursuant to charging clauses in guarantees that each of them entered into on or about 4 October 2018, by which they personally guaranteed the payment of all monies owing by Cetin Property Group Pty Ltd (CPG) to Gemi (the Guarantees). Gemi claims that CPG is indebted to it pursuant to a loan agreement between Gemi (as lender) and CPG (as borrower) dated 10 October 2018 (the Loan and the Loan Agreement), as varied by a deed of variation dated 29 January 2019 (the Variation Deed).
4. Mr Rahmi Cetin is the sole director of CPG. He is also a shareholder of that company, together with his wife Mrs Nurten Cetin, and her parents Mr Zeki Coskun and Mrs Meryem Coskun.
5. Mr Mehmet Cetin and Mrs Sevda Cetin are not alleged to have been parties to, or to have had any involvement in, the Loan Agreement, the Variation Deed or the Guarantees. They have been joined as defendants to these proceedings because their interests in the Property will be affected if the Court makes the order under s 66G appointing trustees on statutory trust for sale. Gemi seeks ancillary orders that the sale proceeds be applied: 1. firstly, in payment of the proposed trustees' expenses and costs of selling the Property; 2. secondly, by paying one quarter of the remaining sale proceeds to Mr Mehmet Cetin and one quarter to Mrs Sevda Cetin; 3. thirdly, by applying the remaining half share of the sale proceeds to repay the amount owing by Mr Rahmi Cetin and Mrs Nurten Cetin secured by the Charges given in their respective Guarantees; and 4. fourthly, by paying any remainder to Mr Rahmi Cetin and Mrs Nurten Cetin in equal shares.
6. Mr Rahmi Cetin and Mrs Nurten Cetin deny that CPG executed the Loan Agreement and Variation Deed, and deny that they executed the Guarantees. They contend that the signatures on those documents that appear to be their signatures, were not in fact made by them. That is the sole basis of their contention in these proceedings that they did not know about the Loan, the sole basis on which they oppose the relief sought by Gemi, and the sole basis of their cross-claim for declarations to the effect that they and CPG are not parties to and did not execute those documents. [1]
7. Mr Mehmet Cetin and Mrs Sevda Cetin did not file any defence in the proceedings. A solicitor appeared for them on the first three days of the final hearing, before informing the Court on the third day that they would abide by the orders of the Court. The solicitor then sought and was granted leave to be excused from further attendance.
8. In these reasons, references to Mr Cetin and Mrs Cetin should be understood as references to Mr Rahmi Cetin and Mrs Nurten Cetin, who were the active defendants in the proceedings. Where it is necessary to refer to Mr Mehmet Cetin and Mrs Sevda Cetin, I will use their first names in order to distinguish them from Mr Rahmi Cetin and Mrs Nurten Cetin.

The business of CPG and the role of Mr Kadir Ilgun

1. Mr Cetin is a carpenter by trade.
2. Mr Cetin gave evidence that, in 2015, he sought finance from National Australia Bank to purchase a property at 23 Railway Parade in Lidcombe for the purpose of developing townhouses (the Project). It was in that context that he met Mr Kadir Ilgun, who was a manager at National Australia Bank at that time. According to Mr Cetin's evidence, Mr Ilgun was involved in the financial side of the Project thereafter. Mr and Mrs Cetin gave evidence that it was Mr Ilgun who arranged for CPG to be incorporated as the vehicle to undertake the Project.
3. Mr and Mrs Cetin described Mr Ilgun as CPG's finance broker during the period of the Project. Ms Nicole Khattar and Mr Mohammed Sowaid worked with Mr Ilgun at his firm, Finance & Property Specialists (FPS). Mr Cetin gave evidence in relation to Mr Ilgun that "whatever he decided well we just follow him". Mr Cetin also gave evidence that Mr Ilgun had accountants and "we just followed his accountants because he's our broker". According to Mr Cetin, Mr Ilgun would have engaged those accountants to prepare any financial statements for CPG. When asked why Mr Ilgun would have dealt with accountants in relation to the financial affairs of CPG, of which Mr Cetin was the sole director, Mr Cetin said that Mr Ilgun "was doing basically the whole thing".
4. CPG was incorporated on 30 June 2016 and acquired the land at 23 Railway Parade. Mr Cetin gave evidence that CPG undertook the Project throughout 2018 and 2019, and that it was completed in about late 2019.
5. Mr Cetin gave evidence that CPG obtained a construction loan for the Project from Balance Securities. Mr Ammar Jamal-Eddine of Concordia Legal acted as CPG's solicitor in relation to that loan.
6. On 6 April 2018, CPG (as borrower) entered into two loan agreements with Property Management Corporation Pty Ltd (PMC). The first agreement provided for a loan of $245,000, and the second agreement provided for a loan of $105,000. Both loans were expressed to be "for the period of the construction at 23 Railway Parade Lidcombe 2141". There is no provision for the borrower to pay interest. Each loan agreement states that the loan is guaranteed by Mr Ilgun. Mr Cetin did not give evidence about those loan agreements, but Mrs Cetin accepted that she had signed them. Mrs Cetin could not recall the reason for CPG taking out the loans from PMC, but gave evidence that she assumed that it was for the Project.

Mr Cetin attends a meeting at Gemi's office in September 2018

1. On 20 September 2018, Mr Andrew Margi of First Finance Choice (FFC) sent an email to Mr Michael Cooper and Mr George Fleming of Gemi, copied to Mr Sowaid of FPS and Mr Gerrard Toltz of Toltz Lawyers. Toltz Lawyers were acting for Gemi at that time. Mr Margi's email stated: "Client is seeking finance on a caveat basis to assist with the repayment of private loans (family member). Funding was originally sought to assist with preliminary costs associated with the development of the subject security property. Facility is proposed for a 5 month basis, to be cleared via the sale of the completed development: Borrower: Cetin Property Group Pty Ltd Guarantors: Rahmi Cetin Nurten Cetin Loan Amount: $350,000.00 (Net) Purpose: Repayment of personal loan Security: 23 Railway Parade Lidcombe NSW 2141 The property has been DA approved for 5 residential townhouses. Construction is well advanced with Kitchens currently being Installed. Works are expected to be completed in November 2018, with settlement of sold townhouses to follow. Gross Realisation: $4,750,000.00 First Mortgage Loan: $2,575,000.00 First Mortgage: Balanced Securities Limited Term: 5 months + 1 month rollover Exit: Sale of completed townhouses. Currently there is 2 sales that = 1.9m. Client may keep residual stock and refinanced if they cant sell remainder 3 @ market value. If client keeps residual stock loan rollover of 30 days will be required."
2. I note that the loan amount of $350,000 stipulated in Mr Margi's email was the total sum lent by PMC to CPG under the two loan agreements signed on 6 April 2018. [2]
3. Either shortly before or shortly after he received Mr Margi's email, Mr Cooper attended a meeting at Gemi's offices with Mr Toltz, Mr Margi, Mr Ilgun, Mr Cetin and another gentleman. Mr Cooper did not recall Mr Fleming attending the meeting, but accepted in cross-examination that it was possible that Mr Fleming was present.
4. Mr Cooper gave evidence that Mr Margi was a broker who had worked closely with Gemi over many years, and that it was common practice for a broker seeking finance for a client to "tap another finance broker". In Mr Cooper's experience, both brokers would meet with the potential lender in those circumstances. In this instance, Mr Margi introduced Mr Ilgun and Mr Cetin to Gemi to discuss Mr Cetin's requirement for a loan. Mr Cooper described Mr Ilgun as "representing" Mr Cetin at the meeting.

Events following the September 2018 meeting

1. At 10.21am on 27 September 2018, Mr Margi sent an email to Mr Toltz, Mr Cooper, and Mr Fleming, which was copied to Mr Sowaid and Mr Ilgun. The subject of Mr Margi's email was "RE CETIN 350k". The email attached certain documents and evidence of a payment of $5,500, "so you commence docs ASAP". The email also stated that Mr Margi had requested appraisals for properties at 25 Railway Parade and 1A Helena Street. At that time, 25 Railway Parade, Lidcombe was the home of Mr and Mrs Cetin, and 1A Helena Street, Auburn was the home of Mr and Mrs Coskun.
2. Appraisals of the current market value of those two properties had in fact already been prepared on 26 September 2018 on the letterhead of First National Real Estate Waters & Carpenter, and signed with the initials "RC" on behalf of Mr Neil Wong, the sales director of that agency. Mr Sowaid forwarded the appraisals to Mr Margi, Mr Toltz, Mr Fleming and Mr Cooper by email at 10.27am on 27 September 2018.
3. In September 2018 Mrs Cetin worked at First National Real Estate Waters & Carpenter. Mr and Mrs Cetin's daughter, Ms Reyhan Cetin, also worked at that agency at that time.
4. Mr Cetin gave the following evidence in cross-examination (emphasis added): "Q. Can you offer any explanation was to why Cetin Property Group would have been getting appraisals as to the value of 25 Railway Parade, Lidcombe in September 2018? A. That would be through Kadeir. Like I, it would be through the broker. Q. Was the company, Cetin Property Group, trying to get finance around September 2018 that you recall? A. Not that I recall that were trying to get because it was still an ongoing project, but um. Q. Possible? A. Probably. Q. Possible that was happening? A. Well that's, that's Kadeir's, that's why I got a broker. So whatever he decided well we just follow him, so. Basically that's what it is. If we needed appraisals, he would have got appraisals so. Q. Doing the best that you can based on your understanding of the arrangements with Kadeir back in the September 2018, if there's an appraisal that we're looking at, your evidence is it was likely organised by Kadeir to get finance? A. Yep, well that's. Q. You're aware that the date of this document is in between when you say the meeting occurred at Gemi's offices and the advance of funds which are the subject of this case? A. Yeah it's very close. Q. Right in the middle, isn't it? A. Yeah. Q. Just over a week before Gemi advanced the money, wasn't it? A. Yes. Q. Does that help you remember? Are you starting to remember that there was a loan? A. No, there was no loan."

The Guarantor charges any interest in Land (as defined in the Real Property Act 1900) in favour of the Lender until the Loan has been repaid, to secure all monies payable by the Guarantor to the Lender under this guarantee and acknowledges that the charge is an equitable interest in the Land for the purposes of section 74F of the Real Property Act 1900 and that section 109 of the Conveyancing Act 1900 shall have full application to this charge."

1. Clause 10 of each Guarantee provides that the Guarantor must pay to the Creditor all amounts payable under the Guarantee on demand.
2. Clause 14.1 of each Guarantee provides that the agreement is a continuing security that is discharged only when CPG discharges the guarantor in writing. Clause 15 relevantly provides: "15.1 The Guarantor's liability is unconditional and is not affected by anything including: (a) a consent, concession, extension of time, waiver of default, release or agreement not to sue by the Creditor to the Debtor, Guarantor, Co-Surety or other person; … (c) variation (including material variation) or replacement of an arrangement (present or future) between the Creditor and the Debtor, Guarantor, Co-Surety or other person; … (e) unpaid Guaranteed Money being or becoming irrecoverable from the Debtor, Guarantor, Co-Surety or other person: … (m) a Collateral Security being or becoming void, voidable or unenforceable

(v) failure by the Creditor to obtain a guarantee or indemnity or Collateral Security from any person; …

(w) failure by a person named as a Guarantor to properly execute this agreement; …

(bb) any other act, omission, mistake or delay by the Creditor or other person. … 15.2 The Creditor is not obliged: (a) to make demand on or take action against the Debtor; (b) to make demand on or take action against any Co-Surety; (c) to enforce any Collateral Security; 15.3 If two or more persons comprise the Guarantor: (a) the Creditor may make demand on, or take action against, any one or more of those persons, jointly or severally, in any manner and order and at any time it thinks fit; (b) the Creditor is not obliged to take identical action against each of those persons."

1. The execution clause of each Guarantee provides for execution by the relevant guarantor. Each Guarantee bears a signature above the name of the guarantor and each of those signatures has been witnessed, or appears to have been witnessed, by Mr Jamal-Eddine.
2. As I have already mentioned, the signed Loan Agreement and Guarantees had been sent to Gemi's solicitors by Ms Khattar of FPS by email on 8 October 2018. Ms Khattar's email also attached a Guarantee and Indemnity between Mr Ilgun (as guarantor) and Gemi (as creditor) in respect of all money owed by CPG to Gemi, signed by Mr Ilgun, witnessed by Ms Khattar, and dated 6 October 2018.
3. In their affidavits sworn on 21 June 2021 and 18 June 2021 (respectively), each of Mr and Mrs Cetin denied attending Mr Jamal-Eddine's office on 4 October 2018 and deposed that they did not sign the Guarantees on that date or on any other date. Each of Mr and Mrs Cetin also denied signing the Loan Agreement or any documents for a loan from Gemi. Each of them denied any knowledge of a loan from Gemi to CPG, and deposed that, to the best of their knowledge, CPG did not receive $426,923 on 10 October 2018. In their affidavits, they describe Gemi's claim as "fraudulent". Mr and Mrs Cetin's affidavits are in almost identical terms. In their affidavits sworn on 5 February 2023, Mr and Mrs Cetin each denied (again, in identical terms) that Mr Jamal-Eddine advised them in relation to any facility or guarantee with Gemi.
4. Mr Cetin was shown the execution pages of the Loan Agreement during cross-examination, without the cross-examiner identifying that those pages were from the Loan Agreement. Mr Cetin gave evidence that the signatures appearing above both places in which his name was printed on those pages were probably his signature. Mr Cetin was more definite about the signature in the execution block for him in his personal capacity as guarantor. In relation to the signature appearing above his name as sole director and secretary of CPG, Mr Cetin gave evidence it looked similar to his signature, and might indeed be his signature.

Variation Deed

1. The Variation Deed is dated 29 January 2019. The named parties are Gemi (as lender), CPG (as borrower) and Mr Cetin, Mrs Cetin, Mr Coskun and Mrs Coskun (as guarantors). The Variation Deed provides for the term of the Loan Agreement to be extended by a period of five months, and provides that the Loan is increased by the "Additional Facility" in the sum of $62,115.38. That sum comprises the lender's and broker's fees totalling $35,000, the lender's legal fee of $1,500 and interest capitalised in advance for the additional five month period in the sum of $25,615.38.
2. The execution clause of the Variation Deed provided for execution by CPG in accordance with s 127 of the Corporations Act by Mr Cetin as its sole director and secretary, and for execution by each of the four named guarantors. A signature appears above Mr Cetin's name in his capacity as sole director of CPG. A signature appears above the name of each of the four guarantors. Each signature appearing above the name of a guarantor has been witnessed, or appears to have been witnessed, by Mr Jamal-Eddine.
3. In their affidavits sworn on 21 June 2021 and 18 June 2021 (respectively), each of Mr and Mrs Cetin deposed that the signature appearing to be theirs is not in fact their signature. Each of Mr and Mrs Cetin also deposed that CPG did not apply for the Additional Facility and did not receive any of the funds referred to in the Variation Deed. As I have already mentioned, those affidavits sworn by Mr and Mrs Cetin are in almost identical terms.
4. In their affidavits sworn on 9 February 2023, each of Mr and Mrs Coskun has denied that the signatures purporting to be theirs on the Variation Deed are their signatures. As referred to at [55] above, Mr and Mrs Coskun were overseas at the time that their signatures were purportedly witnessed on the Loan Agreement, Guarantees and Deed of Variation.

Events of mid to late 2019

1. Mr Cetin gave evidence that, towards the end of the Project in 2019, Balance Securities had stopped releasing funds from the construction loan, which had resulted in builders ceasing work on the Project. More money was required to finish the Project so that the townhouses could be sold.
2. It appears from email correspondence between Mr Ilgun and Mr and Mrs Cetin in July and August 2019 that a dispute was developing between them at that time, about financial contributions totalling $1,402,789 that Mr Ilgun claimed to have made to the Project.
3. Notwithstanding these difficulties, the Project was completed in late 2019, according to Mr Cetin's evidence. [3] Although Mr Cetin has given evidence acknowledging that CPG was in need of further funds in September 2018 in order to complete the Project, and acknowledging that he attended the meeting at Gemi's office for the purpose of seeking a loan for that purpose, [4] Mr Cetin has maintained that Gemi did not make any loan to CPG. [5] Mr Cetin has not given evidence of any alternative source of funds used by CPG to complete the Project.
4. On or about 8 November 2019, Mr and Mrs Cetin attended the office of Toltz Lawyers and inspected Gemi's file, including the Loan Agreement, the Guarantees, and the Variation Deed. The evidence does not disclose what prompted Mr and Mrs Cetin to undertake this inspection. Given that the term of the Loan Agreement (as varied) had expired in June 2019, I infer that Mr and Mrs Cetin had received some communication from Gemi about the Loan and the amount outstanding, including interest that was accruing.
5. In her affidavit sworn on 18 June 2021, Mrs Cetin gave evidence that she took photos and notes of the documents in the file provided to them at Toltz Lawyers' offices, and that she and Mr Cetin reviewed all of them that night. Mrs Cetin deposed: "45. On review I knew I didn't sign these loans and guarantees and Rahmi confirmed he didn't. We both knew my parents could not have signed given they were more than 14,000 km's away. As a result we did not know who to trust. We have grave concerns about who was involved in this fraud and intend to take that up with authorities with the help of our current solicitors."
6. Mr Cetin gave evidence in almost identical terms in his affidavit sworn on 21 June 2021.

It is not my signature and I would confirm this if there was any legal case about it. As to what Kadir has done there are things I cannot discuss that will shock you. I am more than concerned about this and worried people will start knocking on my door. I am leaving the offices at Silverwater to open an office in Drummoyne away from him. To save himself, Kadir would throw everyone else under the bus.' Rahmi: 'Can you look at the signatures on the loan agreement, guarantee and indemnity and the variations agreements more closely.' Ammar: 'The signatures on the variation agreement looking nothing like my signature. It is obviously fraudulent. At[sic-as] to the guarantee and indemnity agreement I did not witness the four signatures on those documents I do not recall giving advice to you in relation to them.

My signature looks different on each. I do not believe your signatures were witnessed by me.' Rahmi: How could anyone witness Zeki and Meryems signatures when they were overseas?' Ammar: 'I have only met them once or twice and I do not recall meeting them on 4 October 2018. It looks like I witnessed the signatures but I could not confirm the persons were Meryem & Zeki.'"

1. Insofar as Mr Cetin is aware, Mr Jamal-Eddine continues to practise as a solicitor. The defendants did not adduce any evidence from Mr Jamal-Eddine in these proceedings, notwithstanding their evidence that he had indicated his willingness to confirm in the event of "any legal case" that the signatures purporting to be his are not in fact his signatures.
2. As referred to at [48] above, each of the Guarantees contained a charging clause pursuant to which each Guarantor charged any interest in land in favour of Gemi as security for all monies payable to Gemi under the Guarantee. Gemi had lodged caveats against the title to Mr and Mrs Cetin's home at 25 Railway Parade, which was adjacent to the Project site at 23 Railway Parade. Mr and Mrs Cetin were endeavouring to sell their home in late 2019. On 5 December 2019, Mrs Cetin sent an email to Mr Toltz, Ms Byrne, and Mr Margi requesting that Gemi remove the caveats, and offering to pay Gemi 50 per cent of the net sale proceedings. Mrs Cetin's email stated: [CB3.248] "We have been misrepresented by Kadir Ilgun on many occasions including the loan from Gemi. We have been reviewing our documents and can confirm the loan signed on 4th October 2018 was used to pay Property Management Corporation (owned by Kadir's wife), which is part of the $1.4K claim Kadir is seeking. The caveat lodged by Property Management Corporation is no longer valid and we have requested immediate removal. There are other issues with regards to the Gemi loan that requires further investigation and time. I would like to propose an offer to Gemi through the caveats AN770918 & AP448787 from 25 Railway Parade, Lidcombe In order for the settlement to go through. Below is our current financial situation Our property has exchanged and waiting settlement. Sale Price: $1,330,000 Loan Amount: $1,160,000 approx Agent & Legal Fees: $30,000 approx Net Proceeds: $140,000 approx

Townhouses - 23 Railway Parade Lidcombe Current Market Value 5 units $4,250,000 approx Construction Loan Amount $3,300,000 approx Surplus: $950,000 approx As per the above figures there is more than sufficient surplus to cover the Gemi Loan from the sale of the 5 townhouses. We propose to offer $70,000 of the net proceeds of the sale of 25 Railway Parade Lidcombe for the removal of the caveats to ensure the settlement proceeds. Please advise your response by Wednesday 11th December 2019."

Request for documents from Mr Jamal-Eddine

1. On 26 February 2020, Mr James Frank, solicitor, wrote to Mr Jamal-Eddine in the following terms: "We confirm that we act for Rahmi and Nurten Cetin, Zeki and Meryem Coskun and Cetin Property Group Pty Ltd (ACN: 613 379 623) ("our clients"). We refer to the enclosed copy of the Loan Agreement dated 10 October 2018 ("the Loan Agreement") entered by our clients with GEMI Investors Pty Ltd. Please advise in writing whether you or Concordia Legal were instructed by our clients to provide advice in relation to the Loan Agreement. Please provide any letters or documents evidencing legal advice given to our clients in their capacity as borrower and/or guarantors in accordance with Regulation 11 off the Legal Profession Uniform Legal Practice (Solicitors) Rules (NSW) 2015. Please provide your response within 7 days of this letter."
2. I note that the letter does not suggest that any of the signatures on the Loan Agreement or related transaction documents were not genuine, or that any of Mr Frank's clients did not in fact enter into the Loan Agreement, the Guarantees, or the Variation Deed. On the contrary, the letter seeks documents evidencing legal advice "given to our clients in their capacity as borrower and/or guarantors".
3. Mr Jamal-Eddine replied on 4 March 2020, stating that he had recently moved offices and would be in a position to respond to Mr Frank's inquiry when he had searched and retrieved "the clients files" from storage.
4. Mr Jamal-Eddine wrote to Mr Frank again on 13 April 2020. Mr Jamal-Eddine was responding to a letter from Mr Frank dated 16 March 2020, which was not in evidence but which I infer from the response was a request for documents with reference to rule 5.3 of the Uniform Civil Procedure Rules 2005 (NSW), which confers power on the Court to make preliminary discovery orders against prospective defendants in certain circumstances. Mr Jammal-Eddine's response declined to provide the documents requested, but invited Mr Frank to make a further request identifying the prospective defendant and the nature of the claim for relief that the applicants for preliminary discovery may be entitled to make.

Discussion between Mr and Mrs Cetin and Mr Tweedy of Gemi on 15 April 2020

1. On 14 April 2020, Mrs Cetin sent the following text message to Mr Hamish Tweedy of Gemi: "Hi Hamish Our solicitors have advised we can have a discussion with you directly. Can we do this tomorrow afternoon around 5pm (so both Rahmi and I are available). Thanks Nurten"
2. Mr Tweedy agreed to Mrs Cetin's proposal.
3. Both Mr and Mrs Cetin participated in the telephone discussion with Mr Tweedy on 15 April 2020. Mr Cetin gave evidence in cross-examination confirming that he and Mrs Cetin had reviewed the Loan Agreement and Guarantees some months earlier, and that lawyers were acting for them in relation to those documents at the time they spoke with Mr Tweedy.
4. Mr and Mrs Cetin each made some handwritten notes during their conversation with Mr Tweedy. Mrs Cetin typed up a note of the discussion later that evening, and then discarded the handwritten notes.
5. Mrs Cetin's typed noted was produced in response to a notice to produce issued by Gemi, and was admitted into evidence during the hearing. It was common ground between the parties that the typed note is a relatively contemporaneous record of the discussion between Mr and Mrs Cetin and Mr Tweedy. Mr Cetin said in cross-examination that he had no reason to doubt the accuracy of the typed note as a record of the conversation, but that "I just can't remember a lot of the things, that's all. I'm trying to gather a lot of things." Gemi did not adduce any evidence from Mr Tweedy to contradict the account of the discussion recorded in the typed note.
6. The typed note records salient aspects of the discussion in the following terms: [6] "Telephone conversation Nurten & Rahmi with Hamish Tweedy 15th April 2020 (we called Hamish on Rahmi's mobile at approx. 5.30pm) Nurten: Hi Hamis, its Nurten, ive got Rahmi with me aswell. So Um what did you want to go through Hamish: I just wanted to understand from your perspective I mean there hasn't been a lot of contact between GEMI and both of you it's sort of been run through um through, a lot of it has been managed by Kadir, and I wanted to get clear on your understanding of where this loan is at and how we might be able to go about or how you see it as being resolved. Nurten: Umm so I'm not sure how much of it you know but like we basically did not have a lot of knowledge of this, how this loan was, what it was for and um like you said a lot of the communication I think was done with Kadir and the GEMI group directly. Now the only reason why things started, we started getting some sort of communication was late last year and when we had to get solicitor involved umm that's I think about November or December was the first time we received any sort of letter from the GEMI group. Hamish: OK, righteo Rahmi: Hamish can I just as a question, why, are you still with, your with the GEMI group obviously yeah? Hamish: I'm with GEMI yes, I started with GEMI late last year, sorry I haven't been here for very long and I guess I'm trying to clear up is there's a loan I'm looking at a loan document here and um it speicifies the loan, the term of the loan, and the amount of the loan and how its going to be conducted, And things like that things along those lines, and what I'm trying work out is that umm your I don't know but I suspect you've got some issues with the loan been conducting but I'm presuming that there was a benefit to you taking the loan at the time that it was advanced and that I presume that there was some intention to repay that loan. Nurten: Um, well the reason why its taken out is a bit of grey which we still need to resolve with our solicitors, umm cause that's not very clear to us at the time what it was for and where the funds actually went. You know in the whole investigation period we now know where the funds went to and what it paid and stuff. In the scheme of things, in the bigger scheme of things, yes obviously its been used in some way for our construction but the way the loan was taken out umm and I actually attended with Rahmi to your offices to view all the documents and that's where some other issues came up which requires more legal representation. So we're a bit, were very unhappy with the way things have been handled there. Rahmi: Because Hamish, if Gemi, they should have done it on the first go, like as soon as I took the loan out, they should have said this what your repayments are monthly yeah to me, I'm the person taking the loan out yeah Hamish: Sorry Im just having a bit of trouble hearing that, sorry Rahmi: No I just said if I took this loan out I should have been the first person from the day one to say look this what your repayments are this what you have to pay monthly or some sort of letter to us saying this is what you gotta pay. Now all of a sudden after a couple of years something happens with GEMI why is it all of a sudden, why wouldn't GEMI ring me like what your ringing me now why didn't they do that in the first instance. Hamish: Oh yes I'm trying to bring myself upto speed with what's been occurring on the loans, its on my desk to look at managing it and to ensure that we receive the funds back and things progress from there and what I, trying to determine, there's a document infront of me that says certain things, I've got some, I need to go through some correspondence to familiarise myself with that's occurred but I sort of had the feeling that, people sort of mentioned that there was a relationship between, I don't understand how the relationships worked so all I simply wanted to do, all I'm simply trying to do is understand there was a loan advanced by GEMI it was used by, I'm presuming you for a reason and you must have been aware that it would be required to be paid back at some point of time. Um you haven't, so what I'm trying to determine is, ok so things haven't gone correctly from your prospective, or been managed the way you would have expected them to be managed, what I'm trying to work out is what wasn't managed what didn't, put the past to an extent behind us, how do you see things moving forward from the point that I've picked up this file and given you a call. Nurten: OK Hamish I think from the first thing, if you've been handed that file I probably suggest you go through it with a fine tooth combe because we did and there's a lot of stuff that has happened on there that shouldn't have legally and its not just and I think there's more than one loan there that's affecting us with you guys I'll just say that much. Um late last year, cause what's happened is GEMI has put a caveat on my house where I was living my own personal house, because of everything now we've had to sell that because financially we are ruined. UM but that's another point now we can't sell that property because GEMI's got a caveat on it. Now late last year I found a buyer and I was trying to get out of there and I actually put proposal towards GEMI directly because the solicitors we had decided late last year around Christmas to pull out from us. and because I didn't have representation I actually emailed directly to Toltz saying look please remove the caveat, we can still resolve this loan but in the interim whatever surplus it is you know half half, you can take half and leave half so I can get somewhere with this battle. No one decided to reply to me I got no response what so ever. My biggest dilemma right now is I've still got this buyer sitting there waiting for settlement, and that's not … Hamish: OK how much is the bank owed on your property … Nurten: I can't remember all of its Hamish but ill forward you the email but I did do a breakdown for the solicitor I said look this is how much, and that was back then, and since then I haven't been able to put anything towards the instalment so its just rising do you know what I mean. So I've done a breakdown for the solicitors of what we think is owed, what the costs to sell it, and what's going to be left and then you know my offer to give some portion of it so that we can actually finish finalise that settlement. Ill forward you and you can have a read of that that give you an idea, and like I said that was late last year so the banks positions increased from there. … Rahmi: What's our loan now Hamish Hamish: Id need to request an updated balance, but before I did anything like I want to get comfortable with my, with what's occurred and what's going on. I just need to make sure, its its um its an information gathering exercise for me at the moment. Nurten: yeah we did that last year Hamish: sorry whats that Nurten: I said we did that late last year, it took us a long time but we actually finally started putting the pieces of the puzzles that we've had to do Hamish: Yeah, I think one of the advantages of not having the lawyers here is that we can be frank with eachother, so if you'e got particular things that you want us to say, you don't need to be concerned because this is a conversation between us. And I guess what I'm trying to, So there's just so I'm clear here, we've got property down here as 23 railway pde, 25 railway pde and 1 Helena auburn is what we've got as security properties; Nurten: yeah see for a loan that much I really don't understand why there was 3 properties secured against it either. Hamish: Yeah OK, and so, we've, but you've, we've got your, you've signed the loan you saw the loan terms and conditions and I'm trusting you were legally represented at the time that you signed the loan. Nurten: Ahh, there was multiple signatures done Hamish: yeah, no no there were, there's also Meryem Coskun and Zeki Coskun Nurten: They're my parents Hamish: And Rahmi you're the sole director of Cetin property group. Yep Ok righteo So at the moment we've got a project at 23 railway pde but its substantially complete, there's a residential property in Railway Parade that is sold but people living in under licence but it's got a mortgage, its mortgaged to a bank I'm assuming. What would be your estimate Rahmi of the value of 23 Railway Pde. Rahmi: Theres 5 townhouses there Hamish, so they're probably 850-900 in that vicinity each townhouse Hamish: yep so it sounds, I mean I don't know how much debt has accrued against those, so your looking 5 townhouses your looking lets call it 900,000 your looking at around about Rahmi: 4.5 Hamish: 4 and a half million dollars, OK look that's good…So I could just grab an email address that your happy for me to email to. Nurten: Sure Ill give you my email. Hamish: OK do you just want to hang on here for a second I'll just shoot you an email now so as, there'll be nothing in it, it will have my contact details, at least that way we know that you've got them. Nurten: but yeah just my advise Hamish I mean I've got nothing against GEMI, like you know if everything was done properly, it was a loan that was required obviously for whatever reason, its just my suggestion would be to really to look at our files closely and you'll see that it's just not right there's things that were done wrong. Hamish: yep okay righteo, let me get onto that and I'll probably get in touch with you tomorrow but if not you haven't heard from me please contact me, you should have received my email by now and well see if we could get this thing tied up."

Further request for documents from Mr Jamal-Eddine

1. As referred to at [69]-[72] above, Mr Frank, solicitor, had written to Mr Jamal-Eddine on behalf of Mr and Mrs Cetin, Mr and Mrs Coskun, and CPG on 26 February 2020, seeking any letters or documents evidencing legal advice provided to them in relation to the Loan Agreement, Guarantees and Variation Deed in their capacity as borrowers and/or guarantors.
2. On 6 May 2020, Mr Frank sent a further letter to Mr Jamal-Eddine in the following terms: "Dear Colleagues Transfer of property at 1a Helen Street Auburn NSW; and Advice for Guarantees & Advice on Loan Documents Transferor: Zeki and Meryem Coskun ("Coskun") Transferee: Cetin Property Group Pty Ltd ("CPG") We refer to the above. We confirm that we act for Rahmi and Nurten Cetin, Zeki and Meryem Coskun and Cetin Property Group Pty Ltd (ACN: 613 379 623) ("our clients"). We are writing to seek pre-suit discovery under Rule 5.3 to advise our clients on a possible negligence claim against Concordia Legal. The claim of negligence being in relation to: 1. The advice or lack thereof given on the GEMI Investors Pty Ltd (ACN 140 899 323) ("GEMI") loan agreements to: (a) Coskun; (b) CPG; and (c) Nurten and Rahmi Cetin. 2. The deeds of indemnity and guarantees with GEMI; and 3. The transfer of 1A Helena Street, Auburn NSW 2144 ("1A Helena Street"). Request for documents and information As part of our "reasonable inquiries" and in accordance with our obligations under Regulation 5.3 of the UCPR, we are instructed to request that you provide us with the following information and documents to assist our client in making a decision whether or not to commence proceedings. 4. All documents and correspondence given to you specifically in relation to the transfer of 1 A Helena Street; 5. All correspondence exchanged between GEMI, CPG, Coskun and you; 6. A copy of the contract for the sale of land; 7. All authorities received authorising payments; 8. All directions to pay; 9. All duly executed documents regarding the transfer of 1A Helena Street; 10. All invoices for payment; 11. All signed Engagement Agreements; (a) Any correspondence giving you instructions. 12. A copy of any document or letter evidencing legal advice given to CPG for this transaction; 13. A copy of any document or letter evidencing legal advice given to Coskun for this transaction; 14. Any other documentation that you hold on file on behalf of our clients du ring the period that you were engaged; and 15. The advice, file notes, transactions and correspondence in relation to the GEMI Loan Agreement and Deed of Indemnities and Guarantees. Failure to comply with our request In our view, we believe 21 days is a reasonably sufficient time period for you to supply the above requested documents and information. If you require an extension of time in order to gather the information and documents and to consider our request, please advise us of the am aunt of time required by return email. ln the event of your failure to comply with our request within 21 days from the date of this letter, an application will be made to the Court pursuant to Rule 5.3 of the UCPR seeking the appropriate orders. Please provide the above documents within 21 days of this letter."

Relevant events after April 2020

1. On 4 June 2020, Gemi served notices of demand and notices of default on Mr and Mrs Cetin.
2. These proceedings were commenced by summons filed on 23 April 2021.
3. Mr and Mrs Cetin filed a cross-claim on 30 July 2021 alleging that they did not sign, and Mr and Mrs Coskun did not sign, the Loan Agreement, the Guarantees or the Variation Deed, and that the signatures appearing on those documents are not in fact their signatures.
4. That cross-claim has been overtaken by the cross-claim in substantially the same terms that was filed on 8 December 2021 after directions were made for the matter to proceed by way of pleadings. However, the earlier cross-claim is relevant because it is the first occasion on which Mr and Mrs Cetin communicated to Gemi an allegation that that their signatures, and Mr and Mrs Coskun's signatures, had been forged. As I have already mentioned, there is no evidence that any such allegation was made to Gemi after Mr and Mrs Cetin inspected the transaction documents at the offices of Toltz Lawyers in November 2019. Neither Mrs Cetin's 5 December 2019 email to Mr Toltz, nor her contemporaneous note of the conversation with Mr Tweedy on 15 April 2020, mention any such allegation. [7]
5. As referred to at [64] above, Ms Cetin gave evidence in her affidavit sworn on 18 June 2021, that, when she reviewed the documents in November 2019, "I knew I didn't sign these loans and guarantees and Rahmi confirmed he didn't." Mrs Cetin deposed that: "We have grave concerns about who was involved in this fraud and intend to take that up with authorities with the help of our current solicitors". Mr Cetin gave evidence in identical terms in his affidavit sworn on 21 June 2021.
6. In cross-examination, Mrs Cetin was asked about whether she and Mr Cetin had in fact taken any steps to raise their fraud allegations with relevant authorities. Mrs Cetin gave evidence that she believed that she had "attempted to raise it with AFCA" and that she had "attempted to raise it with another body" which might have been ASIC. Although Mrs Cetin said that "obviously if it's fraud then I would consider police to be an option", she had not approached the police about the forgery allegations.
7. It is common ground that CPG has not made any repayments to Gemi in respect of the Loan. Gemi has recorded interest as accruing at the rate of 42% per annum. Mr and Mrs Cetin have not made any payments to Gemi in response to the demands made on 4 June 2020.

Consideration and determination

1. Having considered all of the parties' written and oral submissions, I have determined that Gemi is entitled to the relief sought under s 66G of the Conveyancing Act, and that Mr and Mrs Cetin's cross-claim must be dismissed. I will explain my reasons as succinctly as possible, referring to the substance of the parties' submissions where relevant, but without recording every detail of those submissions.
2. As the applicant for an order under s 66G of the Conveyancing Act vesting the Property in trustees on statutory trust for sale, Gemi bears the onus of proving that it has a charge over the Property. To this end, Gemi relies on the Loan Agreement, the Variation Deed, clauses 4, 7 and 10 of the Guarantees of Mr Cetin and Mrs Cetin, and the undisputed facts that CPG has not made any repayments under the Loan Agreement and Mr and Mrs Cetin have not paid any part of the amount demanded on 4 June 2020. Gemi has tendered copies of the Loan Agreement, the Guarantees, and the Variation Deed, which appear on the face of them to have been executed by Mr Cetin as sole director of CPG and by Mr and Mrs Cetin as guarantors, and to have been signed by Mr Jamal-Eddine as witness to Mr and Mrs Cetin's signatures as guarantors.
3. Mr and Mrs Cetin contend that Gemi's onus of proving that it has a charge over the Property is not discharged by the tender of the Loan Agreement, Guarantees and Variation Deed, because the signatures appearing above their names on those documents were not made by them, and are forgeries. As I noted at the outset of these reasons, that is the sole basis of Mr and Mrs Cetin's defence to Gemi's claim, and the sole basis of their cross-claim. [8]
4. In closing submissions, counsel for Mr and Mrs Cetin correctly accepted that, as the parties alleging forgery, they bear the onus of proving that they did not sign the Loan Agreement, the Guarantees and the Variation Deed. [9] As counsel for Gemi correctly accepted, this does not necessarily require Mr and Mrs Cetin to advance a positive case identifying the person by whom, and the means by which, the alleged forgery was committed. Mr and Mrs Cetin did not advance any such positive case, although they did seek to cast suspicion on Mr Ilgun in a vague and indirect way, as referred to at [140] below.
5. The Loan Agreement, Guarantees and Variation Deed were admitted into evidence without objection. I infer that the signatures described on those documents as signatures of Mr Jamal-Eddine - as witness to the signatures of Mr Cetin on the Loan Agreement and Variation Deed as sole director of CPG, and the signatures of Mr Cetin and Mrs Cetin as guarantors on the Loan Agreement, the Guarantees, and the Variation Deed - were in fact made by Mr Jamal-Eddine. I draw that inference on the basis of the contents of the documents themselves, together with the evidence that Mr Jamal-Eddine was copied into Ms Khattar's email sent to Ms Byrne on 8 October 2018 attaching scanned copies of the documents bearing his signature as witness. [10] There is no evidence that Mr Jamal-Eddine, having received that email, disputed or disowned the signatures appearing to be his on the documents attached to the email. Instead, Mr Jamal-Eddine began liaising with Gemi's solicitors, and conveyed to them his instructions about the disbursement of the net proceeds of the Loan on settlement. [11] I reject the submissions made by counsel for Mr and Mrs Cetin that the fact of Mr Jammal-Eddine being copied to Ms Khattar's email casts doubt on whether he had signed the attached documents because it suggests that he did not already have copies of those documents. The inclusion of Mr Jamal-Eddine as a recipient of that email merely indicates that Ms Khattar decided to include him in her communications with Gemi's solicitors in relation to the Loan. It was also submitted on behalf of Mr and Mrs Cetin that it was not clear how the Loan Agreement and Guarantee came to be held at Mr Ilgun's office rather than Mr Jamal-Eddine's office immediately before they were sent to Gemi's solicitors, or why Mr Ilgun's office rather than Mr Jamal-Eddine's office sent the signed documents to Gemi's solicitors. I also reject those submissions. Mr Ilgun was not merely CPG's finance broker. As referred to at [52] above, Mr Ilgun was also a guarantor of the Loan. On the face of the Loan Agreement and Guarantees, they appear to have been signed by the borrower and all guarantors other than Mr Ilgun on 4 October 2018. Mr Ilgun was the last party to sign on 6 October 2018. That most likely explains why Mr Ilgun's office collected all of the documents as they were signed, and then forwarded them to Gemi's solicitors once the suite of documents was completed by Mr Ilgun's signed guarantee.

Conclusion and orders

1. For all of those reasons, the orders of the Court are as follows: 1. An order pursuant to s 66G of the Conveyancing Act that the whole of the land at 1/21 Railway Parade, Lidcombe in the State of New South Wales, being the land contained in Folio Identifier 1/SP64344 (the Property), be vested in Nicola Craven, solicitor, and Joseph Daidone, estate agent (collectively the Trustees) subject to encumbrances affecting the entirety but free from encumbrances affecting any undivided shares, to be held by them on the statutory trust for sale. 2. An order that the defendants provide to the Trustees vacant possession of the Property within 28 days of making this order. 3. An order that the first defendant withdraw caveat AP645286 within 28 days of the making of this order. 4. An order that upon the sale of the Property, the sale proceedings be applied as follows: 1. Firstly, in payment of the Trustees' expenses and all costs of the sale of the Property; 2. Secondly, that one quarter of the remaining sale proceeds be paid to the third defendant and one quarter be paid to the fourth defendant; 3. Thirdly, that the remaining one-half share (or such amount as is then due under the plaintiff's mortgage, whichever be less) be paid to the plaintiff and applied in reduction of the plaintiff's mortgage over the first and second defendants' shares in the Property; and 4. Fourthly, any remained be paid equally to the first and second defendants. 1. An order pursuant to s 66H of the Conveyancing Act that any of, and any combination of, the defendants may purchase the Property at a sale conducted by the Trustees, whether at auction or otherwise, on terms on which permit the purchasers to set off those purchasers' entitlement to proceeds from the sale as against the purchase price of the Property. 2. Liberty to apply on 3 days' notice to the parties, the Trustees and any other person claiming an interest in the sale proceeds of the Property. 3. Order that the cross-claim is dismissed.
2. I will hear the parties in relation to costs.

Endnotes

1. Other claims for relief in the cross-claim were abandoned: T297.
2. See [14] above.
3. See [12] above.
4. See [27] above.
5. See [26] and [53] above.
6. Emphasis added; spelling and grammatical errors in original.
7. See [68] and [78] above.
8. See [6] above.
9. Damjanovic v York Agencies Pty Ltd [2003] NSWCA 22 at [25] (James J, with the concurrence of Meagher JA and Beazley JA, as Her Excellency then was).
10. See [39] above.
11. See [40] above.
12. Bluemine Pty Ltd (in liq) v AKA (Civil) Pty Ltd; Earth Civil Australia Pty Ltd (in liq) v AKA (Civil) Pty Ltd; Diamondwish Pty Ltd (in liq) v Ivana Cassaniti; Rackforce Pty Ltd (in liq) v Ivana Cassaniti; RCG CBD Pty Limited (in liq) v Borg Family Pty Ltd [2022] NSWCA 160 at [202]-[205] (Gleeson, Leeming and Mitchelmore JJA) and the authorities there referred to; Jagatramka v Wollongong Coal Limited [2021] NSWCA 61 at [49] (Bathurst CJ, Bell P and White JA).
13. Kuhl v Zurich Financial Services Australia Pty Ltd (2011) 243 CLR 361; (2011) 85 ALJR 533; (2011) 276 ALR 375; [2011] HCA 11 at [64]-[67] (Heydon, Crennan and Bell JJ).
14. Watson v Foxman (1995) 49 NSWLR 315 at 319 (McLelland CJ in Eq).
15. Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 at [15]-[18]; Warner v Hung; In the matter of Bellpac Pty Ltd (receivers and managers appointed) (in liquidation) (No. 2) (2011) 297 ALR 56; [2011] FCA 1123 (Emmett J) at [48].
16. See [53] above.
17. Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 at [15]-[18].
18. See [63]-[65] above.
19. See [68] above.
20. See [69]-[72] above.
21. See [68], [73]-[89] above.
22. See [50] above.
23. Conveyancing Act, s 66F(1); Chaudhary v Chaudhary [2016] NSWSC 1423 at [114] and the authorities there referred to; Boyd v Thorn (2017) 96 NSWLR 390; (2017) 18 BPR 37,101; [2017] NSWCA 210 at [20] (Macfarlan JA).
24. Williams v Legg (1993) 29 NSWLR 687; (1993) NSW ConvR 55-670 at 29 NSWLR 687, 691-693 (Handley, Sheller and Cripps JJA); Hogan v Baseden (1997) 8 BPR 15,723 at 15,723 (Mason P) and 15,726 (Beazley P, as Her Excellency then was); Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 at [36]-[43] (Tobias AJA, Bergin CJ in Eq agreeing) and [71] (Emmett AJA); Foundas v Arambatzis [2020] NSWCA 47 at [62]-[63] (White JA, with the concurrence of Bell P, as the Chief Justice then was, and Basten JA).

Amendments 12 September 2023 - Coversheet spelling error 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: 12 September 2023