Accountant:
R L Goldspink & Co
Contact - Richard Goldspink
PO Box CC Newport Beach NSW 2106
Tel; 0411 7233 86 Fax; 02 9999 6467
23 This is relevant when it comes to considering a "Personal Particulars" document furnished to the plaintiff and referring to the defendant. It appears to be a form purportedly filled out by the prospective borrower, but bears no signature. The defendant's name, address and contact details appear on this document, along with the details of the Bligh Park property in a section titled "Property Offered as Security". In the section marked "Borrower's Contacts", the details of Herbert Weller, solicitor, and Richard Goldspink, accountant, have been filled in.
24 The defendant deposed to having had some dealings with Herbert Weller as a solicitor involved both in her divorce proceedings and in the purchase of her house in 1996. However, she said she had not had any dealings with him since then. She also said she had never heard of Richard Goldspink.
25 Mr Zajakovski was cross-examined on this document and accepted that the handwriting did not appear to be the same as that of the defendant on other documents. It is apparent that someone other than the defendant filled out this form instead of the defendant, inserting the details of Mr Rampling's solicitor and accountant. The "Personal Particulars" form shows evidence of having passed through several fax machines, one of them apparently being that of Mr Rampling's company, Essendon Constructions. I am satisfied that Mr Rampling played a part in the preparation of the document. I am also satisfied that the plaintiff took its contents wholly at face value, except by obtaining the rates notice for the Bligh Park property.
26 The next document is dated 19 April 2004. The following words appear on it:
"Emanuel,
In addition I have attached:-
Rate Notice for 14 Fulton Place North Richmond and Notice of Valuation. The Rate Notice is in the name of my partner Jennifer Maley as is the property.
Statement of Assets and Liabilities.
Should you require any further financial information please contact me or my accountant."
27 The document bears no signature or sender's name but the address and the mention of Ms Maley as "my partner" show that the author is Garry Rampling. It may be inferred that he sent this in order to furnish Sydney Home Loans with details of his own personal assets in an earlier effort to secure loan financing for a venture that clearly did not involve the defendant.
28 The third item is dated 14 May 2004. It is a transmission from Essendon Constructions, Mr Rampling's company, addressed to "Tony Atana" (Mr Atanasovski, a director of the plaintiff). In it Mr Rampling sets out terms and sums of the proposed loan for confirmation. At no point is the defendant's name mentioned.
29 The fourth item is also dated 14 May 2004. It is a cover sheet which indicates that the rate notice and the loan statement for the Bligh Park property are attached, along with a statement of the market value of the property as being $360,000 - $380,000. Again, these documents came from Mr Rampling with no mention of the defendant.
30 The fifth item is dated the same day and addressed to Mr Zajakovski. It indicates that a "bank confirmation" is attached for a deposit on the loan of $1,000. It is clear on the evidence that the defendant did not pay any deposit at any point in the proceedings. The deposit was paid by Mr Rampling and Mr Zajakovski must be taken to have known this.
31 According to Mr Zajakovski's evidence, he arranged for the defendant and Mr Rampling to attend the plaintiff's offices at 71-75 Princes Highway, Kogarah on 19 May 2004. Loan and security documents had already been prepared. He says he "insisted" on two things. The first was that Mr Rampling attend with the defendant so that there could be certainty that both the defendant and Mr Rampling were in agreement with the transaction. Second, he insisted that the defendant attend the premises in person to verify her identity and also to receive legal advice, because he generally did not trust borrowers to obtain independent legal advice.
32 The defendant denies that she was ever personally contacted by Mr Zajakovski. She also says that at no stage before 19 May did anyone advise her that a lawyer would be involved or that it was necessary for her to obtain legal advice. It is consistent with the evidence of both parties that Mr Zajakovski was at that stage dealing only with Mr Rampling and that these requests were communicated to him. It is clearly because of those requests that, on or about May 18, Mr Rampling telephoned Ms Miller and offered to drive her to Kogarah the next day.
33 There are several factual disputes about the events of 19 May 2004. Before dealing with them, I should note that, before the defendant and Mr Rampling arrived at the meeting, Mr Zajakovski, on his account, had already arranged for cheques to be drawn in anticipation of signing of loan documents and advance of the loan (this is a matter to which I shall return). There were two bank cheques copies of which are in evidence, plus a third cheque which was apparently not a bank cheque. There can be no doubt that details of desired payees and amounts were given to Mr Zajakowski by Mr Rampling in advance of the meeting. The payees named in the bank cheques were persons to whom payments were due by Mr Rampling or his companies in connection with the Queenscliff project, plus a balance (by means of the third cheque) in favour of Mr Rampling's company, Essendon Constructions.
34 It is also necessary to note that loan, mortgage and associated documents (at least ten in number) had been prepared by Mr Zajakovski in advance. These had not been sent by the plaintiff to the defendant (or, for that matter, to Mr Rampling) in advance of the meeting on 19 May 2004. The defendant had had no opportunity to read and consider them or to seek advice on them beforehand.
35 As I have said, there are factual disputes about the events of 19 May 2004. The only evidence is that of Mr Zajakovski and the defendant. A factor in the resolution of factual differences is the defendant's demeanour at trial. She presented as being extremely timid, hesitant, confused, and almost childlike. In cross-examination, she responded to many questions by saying "I don't know" or falling silent for a period.
36 On the morning of May 19 2004, Mr Rampling, by arrangement, picked the defendant up from Wyong station. He informed her that Mr Zajakovski would need a copy of her council rates notice. They drove to the Bligh Park property where the defendant obtained her rates notice. They then drove to Kogarah, where they attended the offices of the plaintiff at 71-75 Princes Highway.
37 The defendant says she was briefly introduced to Mr Zajakovski and then, along with Mr Rampling, shown into an office or conference room, where she was introduced to Alex Attapallil, a solicitor. In her affidavit she states that she understood he was a solicitor from Lexes Lawyers, a Rockdale firm, and that she received his business card at the end of the meeting. In cross-examination, however, she denied that he had introduced himself as a solicitor or explained his role in the proceedings that day. She says that Mr Attapallil merely began, in her words, to "read out" a large number of documents to her without introduction or explanation. She sometimes said positively that he did not explain his role and what he was doing, and sometimes that she did not remember him doing so. She also says that to the best of her recollection he did not actually converse with her other than by reading documents aloud to her. In spite of this, she says she did not inquire as to his role because, in her words, she trusted Mr Rampling and Mr Attapallil as they were "professionals" or "businessmen" and "knew what they were doing" in contrast to herself. She says that she trusted Mr Rampling and feared Mr Attapallil and later Mr Zajakovski.
38 The fact of Mr Attapallil's presence at the plaintiff's premises is confirmed by Mr Zajakovski's evidence. He also confirms having arranged for Mr Attapallil to be there. Mr Zajakovski also says that Mr Attapallil and the defendant were together in a conference room from which Mr Zajakovski himself was absent. It is the defendant's evidence that Mr Rampling was in the conference room with Mr Attapallil and herself throughout the whole time they were there. Mr Zajakovski was vague and unsure about whether Mr Rampling went into the conference room with the defendant and Mr Attapallil. He did say, however, that when he later went into the conference room (or, perhaps, saw the others as they came out of it), Mr Rampling was there with the defendant and Mr Attapallil. On the balance of probabilities, therefore, I find that Mr Rampling was with the defendant and Mr Attapallil throughout the period they were together in the conference room away from Mr Zajakovski.
39 The only evidence of what was said and done in the conference room is that of the defendant. There is no evidence from Mr Rampling. On the basis of evidence about the unsuccessful attempts to serve him with the cross-claim (showing that, despite reasonable efforts, he could not be located), I am satisfied that neither party can be criticised for failing to call him. But the same conclusion cannot be reached in relation to the absence of evidence from Mr Attapallil.
40 Mr Attapallil's attendance at the plaintiff's office on the day in question was, as I have said, arranged by Mr Zajakovski. It was his intention that Mr Attapallil should provide legal advice to the defendant. However, Mr Zajakovski's motive was related to the welfare of the plaintiff and only in a purely incidental way to that of the defendant. In other words, he was concerned with the defendant's welfare only because (and to the extent that) protection of her welfare served the interests of the plaintiff and, it was apprehended, would, from the plaintiff's perspective, avoid possible consequences adverse to the plaintiff.
41 Neither party called Mr Attapallil. There is no suggestion that he was not available. Indeed, there was evidence at trial that he continued in practice as a solicitor at Rockdale. Faced with the matters raised in the defendant's defence, the plaintiff ought logically have called in aid in reply the fact that Mr Attapallil had given legal advice to the defendant. There may have been an apprehension that any such attempt would be met by a claim that the communications between Mr Attapallil and the defendant were privileged, so that there was no point in persisting with the attempt. But, on the evidence, Mr Rampling was also present (so that privilege could not attach) and the defendant, in her affidavit, had already disclosed her recollection of what passed between her and Mr Attapallil. The plaintiff should therefore not have seen the possibility of a claim for privilege as an obstacle (or, at least, an insurmountable obstacle) to the calling of Mr Attapallil.
42 It is therefore open to me to have regard to the plaintiff's failure to call Mr Attapallil when I come to the question whether the plaintiff has made out its case: Jones v Dunkel (1959) 101 CLR 298. This, coupled with the defendant's evidence that Mr Attapallil really did no more than read out long passages from documents that she did not understand, leave me in a position where I cannot find that Mr Attapallil gave the defendant an explanation of the meaning and effect of the documents she was about to sign and of the implications of the transaction as it affected her.
43 That leads to the question of the defendant's understanding of the transaction and what it meant for her.
44 The defendant says that she had had no understanding of the function of any of the documents, although she says she knew that they were somehow important and that they involved her and her house in some way, but that she thought it was not important for her to understand what was going on. She says that her understanding was that she was giving permission for Mr Rampling to use her house for whatever it was that he was doing in relation to property development. She also knew that there was a loan being taken out, but that she thought Mr Rampling was the borrower. She says that at no time did she ever form in her mind a connection between the "loan" of her house and the loan she thought was being made to Mr Rampling. She professed at trial not to have ever turned her mind to the question of why her house was necessary to the loan agreement at all, at least until well after that day. She did, however, express a strong opinion that if she had known that she was borrowing money then she would not have entered into the agreement.
45 The defendant must have made some connection in her mind between her house and a loan of money. She had a general idea of what a mortgage was and, having made regular repayments on the mortgage of her home over a long period, must be taken to have understood the consequences of default. She says that she did not ever think that that was the nature of the transaction. She proceeded to sign and initial a number of documents. I think it unlikely that a person, even one who was merely doing what she was told, could put their name to so many without once encountering the word "borrower" or "mortgagor" in very close proximity to the space reserved for signature.
46 On her own evidence, the defendant had a reasonable apprehension of some kind of negative consequence that might affect her as a result of the agreement. She says in her affidavit that when Mr Attapallil was reading out the documents, she did in fact note that the words "borrower" and "lender" were being used frequently and that Mr Rampling's name was not coming up in connection with them. She then says that she became frightened and consulted Mr Rampling, saying:
"Are you sure about this, this sounds scary?"
47 She says that Mr Rampling proceeded to reassure her that everything would be "fixed up" in six weeks, and spurred on by this reassurance, she signed. The only inference that can be drawn from that evidence is that she knew there was a loan being negotiated, and if Garry Rampling's name was not being mentioned, then the only reason she would have cause for concern was that at least the possibility of her own involvement in the loan, however imperfectly grasped, must have been in her mind.
48 I am of the opinion that, when the defendant said, "This sounds scary", she was not frightened in the way that she says she is when she does not understand something, but rather that she was actually apprehensive that she might suffer some kind of liability or loss. This is the more natural and understandable reaction to a situation of this nature. I have difficulty, in all the circumstances, in accepting that when faced with the proposition of "lending" her home in some way to Mr Rampling or for his benefit the defendant would, precisely because she did not understand, agree and proceed with the transaction by signing so many documents. That is an extraordinary course of action. Accordingly, I find that she understood enough about the transaction to form an apprehension that there was some kind of risk involved for her; but that she decided to take that risk based on the assurances of Mr Rampling.
49 The subsequent events of that day are also contentious. Mr Zajakovski's account stands in total opposition to that of the defendant. His evidence is that when Mr Attapallil had finished his meeting with the defendant in the conference room, Mr Zajakovski had a conversation with the defendant, Mr Rampling and Mr Attapallil. According to Mr Zajakovski's account of this conversation, the defendant appeared quite informed and indeed somewhat relaxed. At paragraph 27 of his affidavit he gives the following account of the conversation which, he says, took place in the conference room:
"ME: My name is George, I represent the lender.