PERPETUAL LTD -v- BUTTARELLI [2012] WASC 512 (30 January 2013)

3 Perpetual further alleged that Ms Buttarelli had failed to pay monthly instalments due under the Loan Contract between July 2007 and February 2008 (Ms Chetty's affidavit, par 20). It served a notice of demand on Ms Buttarelli dated 22 February 2008. The demand was issued pursuant to s 106 of the Transfer of Land Act 1893 (WA) (Ms Chetty's affidavit, par 21 and attachment 'EC13'). Ms Buttarelli failed to satisfy the demand and consequently, the full amount owing under the Loan Contract and the Perpetual Mortgage became immediately due and payable according to the terms of those contracts (pars 21 and 27 of Ms Chetty's affidavit). Perpetual demanded that Ms Buttarelli vacate possession of the Bedford Property by notice dated 1 April 2008 (Ms Chetty's affidavit, par 28). Ms Buttarelli failed to comply with that demand (pars 31 35 of Ms Chetty's affidavit).

4 Perpetual commenced these proceedings by writ dated 9 May 2008. It claimed the sum of $273,193.64 (together with interest), being the amount allegedly owing under the Loan Contract and the Perpetual Mortgage, and an order for vacant possession of the Bedford Property. It was to be inferred from the indorsement to the writ that Ms Trajkoski had been joined as a defendant as it was thought that she was in possession of the Bedford Property jointly with Ms Buttarelli.

5 Ms Buttarelli entered an appearance on her own behalf. No appearance was entered for Ms Trajkoski.

6 A case management conference was held in June 2008. It appears from the court file that no orders were made at that conference. No further step was taken by Perpetual in the proceedings until March 2010 when it served a statement of claim. No defence was filed to that claim but Perpetual applied for summary judgment by summons dated 13 August 2010. Master Sanderson granted the application and on 11 November 2010 made orders (the Judgment) that:

(a) Ms Buttarelli pay to Perpetual the sum of $376,738.87 together with interest from 12 November 2010 until the date of payment calculated at 12.04% per annum;

(b) Ms Buttarelli deliver up possession of the Bedford Property within 28 days of the date of judgment;

(c) Ms Buttarelli pay Perpetual's costs of the application and of the action on an indemnity basis pursuant to the Mortgage.

7 A Property (Seizure and Delivery) Order was made on 21 December 2010 pursuant to the Civil Judgments Enforcement Act 2004 (WA) (the Act). The order required Ms Buttarelli and Ms Trajkoski to deliver up possession of the Bedford Property. It is not apparent from the court file what occurred following that order but Perpetual applied for a further Property (Seizure and Delivery) Order in February 2012. That application was granted and an order was made on 9 February 2012.

8 Ms Buttarelli applied in May 2012 to stay execution of the Judgment, alternatively for a suspension order under the Act. It is that application that is the subject of these reasons.

9 Ms Buttarelli denied in an affidavit that she made in support of her application that she owed Perpetual the amount that had been claimed. She stated that 'the loan accounts loan contract and mortgage relating to the principal sum of $310,000 ... do not accurately state the true account of monies that I allegedly loaned (as I have only ever loaned money in order to buy a specific property)' (affidavit of Vincenza Palma Buttarelli sworn 23 May 2012, par 11). Ms Buttarelli's position as the application unfolded was that:

(a) She had applied to Perpetual for a loan in about mid January 2003. The application was made through St James. The sole purpose of the loan was to fund the purchase of the Port Kennedy Property.

(b) She had not applied for a further advance of $155,000 to refinance other borrowings.

(c) She had not signed or authorised the Loan Application. An employee or agent of St James, Mr Anthony Esposito, had fraudulently prepared the Loan Application. Ms Buttarelli had dealt with him in the past in relation to obtaining finance.

(a) She had not signed the Loan Contract attached to Ms Chetty's affidavit nor had she signed the Perpetual Mortgage.

(b) She was only aware of a loan of $155,000 made by Perpetual for the purchase of the Port Kennedy Property - loan account no 60126261 (I will refer to this loan as Perpetual loan 60126261). She was not aware of a further loan of $155,000 allegedly made by Perpetual - loan account no 81721951 (Perpetual loan 81721951). She had not received any documents relating Perpetual loan 81721951 nor was she aware that the Bedford Property had been mortgaged.

(c) Perpetual loan 81721951 was part of a course of fraudulent dealings with her properties. Mortgages had been purportedly granted and registered over the properties without her authority, supposedly to secure the refinancing of loans that had been repaid some time earlier.

11 Ms Buttarelli contended that her application for a stay or a suspension order should be granted so that she could commence fresh proceedings to set aside the Judgment for fraud or to appeal from the Judgment on the ground that it had been obtained by fraud.

12 Perpetual denied that the evidence relied on by Ms Buttarelli established that the Loan Contract was the product of a fraud and contended that, in any event, there was no evidence that Perpetual knew that the Loan Application had been fraudulently prepared (if that is what had occurred). It also contended that the matters alleged by Ms Buttarelli did not comprise fresh evidence of a kind that would support an application to set aside the Judgment for fraud.

13 I have concluded that Ms Buttarelli's application for a stay of execution or a suspension order under the Act should be refused. Ms Buttarelli is required to establish that she would have a reasonable prospect of either setting aside the Judgment in a fresh action for fraud or successfully appealing from the Judgment if a suspension order was made or a stay was granted. I am not satisfied that she has discharged that onus.

14 There was a substantial body of evidence adduced across several hearings of Ms Buttarelli's application. It is necessary to recount that evidence in some detail to explain the many allegations that were made by Ms Buttarelli and why I have refused the application.

The evidence in support of Perpetual's application for summary judgment Ms Chetty's affidavit of 22 July 2010

15 Perpetual principally relied on Ms Chetty's affidavit in support of its application for summary judgment. The gist of her evidence as stated in her affidavit made on 22 July 2010 has already been summarised. The remaining aspects of her evidence that were relevant concerned the documentation and administration of the Loan Contract. Ms Chetty stated that:

(a) St James had been known as UBS Mortgage Corporation Pty Ltd. It acted as a mortgage originator for Perpetual (Ms Chetty's affidavit, par 8.1).

(b) Following its usual practice, a draft loan contract had been prepared by Perpetual's staff once the Loan Application had been granted. Perpetual's staff used a 'loan contract template' for that purpose. The draft contract had been sent to its then solicitors, Mony de Kerloy, for checking and to enable the associated mortgage to be prepared. The solicitors had been responsible for arranging for the loan contract and mortgage to be signed by Ms Buttarelli (Ms Chetty's affidavit, pars 8.4 8.6).

(c) The original of the Loan Contract could not be located despite searches and enquiries. Consequently, the copy of the Loan Contract produced by Ms Chetty (attachment 'EC6') was a 'reprinted copy of the Loan Contract using the contract template and the variables which should have been used to create the original contract' (par 10).

(d) Mony de Kerloy had provided the solicitors who appeared for Perpetual in these proceedings with 'an electronic file copy of the documents on its system in relation to [Ms Buttarelli]' (par 11.1). The electronic copies of the correspondence provided were automatically dated according to date on which the retrieved electronic copy was printed (15 September 2008) rather than the date on which the correspondence had been first produced.

(e) The electronic file provided by Mony de Kerloy included the following documents:

(i) A letter from Mony de Kerloy to Ms Buttarelli that referred to a number of documents as having been enclosed, including copies of the Loan Contract, the Perpetual Mortgage and directions to pay (attachment 'EC7'). Ms Buttarelli was requested to sign and return those documents.

(ii) A certificate given by Mony de Kerloy to Perpetual and others certifying, among other things, that the Loan Contract and the Mortgage were 'genuine, properly executed and ...the legal, valid and binding obligation of the maker...' and that 'the full amount of credit secured by the Mortgage will be advanced to or at the direction of the Borrower on settlement of the Mortgage' (attachment 'EC8').

(iii) A letter to St James confirming that settlement of the loan transaction had occurred on 27 February 2003 and that at settlement, the sum of $122,717.39 was paid to Perpetual Trustees Victoria Ltd; $106,407.32 to Australia and New Zealand Bank Group Ltd (ANZ); $37,873.86 to S R & K A Hooker; and $33,397.28 to Ms Buttarelli. The balance of the sum advanced ($310,000) had been utilised to pay various fees (attachment 'EC9'). The purchase price for the Port Kennedy Property was $145,000. I inferred that the payments to ANZ and Mr and Ms Hooker were to pay the purchase price for the property.

(f) Statements for Perpetual loan 60126261 and Perpetual loan 81721951 for the period February 2003 to June 2008 had been provided. Attachments 'EC11' and 'EC12' comprised bundles of statements for both accounts. The statements were directed to Ms Buttarelli at her address in Bedford (that is, the Bedford Property) or an address in Lesmurdie (225 Lesmurdie Road). The statements for each loan account commenced with a debit entry dated 27 February 2003 for $155,000 described as 'loan drawn down' (Ms Chetty's affidavit, pages 95 and 129). The first statement issued for each loan was addressed to Ms Buttarelli at her Bedford residence. The statements indicated that monthly instalments of more than $1,000 had been paid on each loan by direct debit. On occasions, direct debits had been reversed according to the loan statements for each loan, with a dishonour fee being paid. Generally, the due instalment had been paid shortly afterwards.

(g) Ms Buttarelli had sold the Port Kennedy Property in September 2005. She had paid the sum of $53,982.41 to Perpetual from the proceeds of the sale in reduction of the amount owing under the Loan Contract (par 17).

(h) Perpetual had advanced a further sum of $220,000 to Ms Buttarelli in October 2003 (loan account number 30591867: the 'Lesmurdie Loan'). That advance had been secured by a mortgage that constituted a first registered mortgage over property located at 6 Plume Street, Lesmurdie (the Lesmurdie Property) and a second registered mortgage over the Port Kennedy Property and the Bedford Property. The Lesmurdie Loan had been repaid in August 2005 and the mortgage discharged so far as it affected the Lesmurdie Property and the Port Kennedy Property. It had remained on foot insofar as it affected the Bedford Property (Ms Chetty's affidavit, pars 18 19).

16 It should be noted that Ms Buttarelli denied having received any correspondence or documents from Mony de Kerloy. Ms Chetty did not produce the documents that were said to have been enclosed with the letter nor did she produce any response from Ms Buttarelli (and there was no explanation as to why documents that were in a nonelectronic form that ought to have been held on Mony de Kerloy's file were not produced).

17 The letter that was said to have been written by Mony de Kerloy to Ms Buttarelli also stated that a certificate of currency of insurance for the Port Kennedy Property and the Bedford Property recording Perpetual's interests as mortgagee was required before settlement could occur. Ms Chetty did not produce any certificate of insurance that might have been provided by Ms Buttarelli. However, the solicitor's certificate said to have been given by Mony de Kerloy referred to policies of insurance having been issued with Perpetual's interest noted.

18 Perpetual also relied on four further affidavits in support of its application for summary judgment: the affidavits of Melanie Mei Na Byrne (sworn 7 April 2010; Ms Bryne was a principal of the firm of solicitors who appeared for Perpetual), Robert Carl Ioppolo (sworn 7 April 2010; Mr Ioppolo was a senior associate with Perpetual's solicitors), Shayne Graham Leslie (sworn 15 September 2010; Mr Leslie was also a principal of Perpetual's solicitors) and a further affidavit sworn by Ms Chetty on 10 November 2010.

19 Ms Byrne deposed to conversations between herself and Ms Buttarelli regarding payment of the amount owing under Perpetual's Mortgage. Ms Byrne stated that:

(a) She had a telephone conversation with Ms Buttarelli on 17 September 2008 regarding payment of arrears under the Perpetual Mortgage and in which Ms Buttarelli had 'confirmed she had 2 loan accounts with [Perpetual]' (par 9). A file note made by Ms Byrne of various telephone conversations with Ms Buttarelli on 17 September 2008 indicated that Ms Buttarelli had referred to various proposals for selling the Bedford Property and other property to pay Perpetual (attachment 'MMB2'). The file note included the following statement:

You queried whether any payment made would be applied towards the relevant loans because you had two. I told you the loan account details which I had on file.

(b) She had met with Ms Buttarelli on 18 September 2008. Ms Buttarelli provided Ms Byrne with a cheque and money orders for a total amount of $2,168 as payment towards the sum owing under the Perpetual Mortgage. However, Ms Byrne returned the cheque and money orders when Ms Buttarelli refused to sign a letter acknowledging that the payment would not prejudice Perpetual's rights to enforce its mortgage and the Loan Contract (pars 11 14).

20 Ms Byrne also attached to her affidavit a letter written by Ms Buttarelli to St James shortly after Perpetual had commenced proceedings. The letter had advised of steps that had been taken by Ms Buttarelli to sell the Bedford Property (attachment 'MMB1').

21 Finally, Ms Byrne produced a letter dated 17 September 2008 that was written to her by Ms Buttarelli (attachment 'MMB4'). The letter referred in its heading to 'Mortgage no 1401541 divided into two loan accounts: (60126261) account: (81721951)'. The effect of the letter was to state that Ms Buttarelli anticipated being able to meet her commitments under the Loan Contract and the Perpetual Mortgage in the future. She requested that her default be excused and that she be permitted to resume repaying the loans according to their terms. There was no suggestion in the letter that she had not borrowed the two amounts that were the subject of the loan accounts that she had identified in the heading to the letter.

22 Mr Ioppolo deposed to a conversation in December 2008 between himself and Ms Buttarelli in which a payout figure for the Perpetual Mortgage was requested. He attached to his affidavit an email from Ms Buttarelli (attachment 'RCI3') requesting a payout figure and in which it was stated that:

This figure is necessary to all parties involved in order to enable the quick repayment of the amount pending to Perpetual Limited. Also need to know where the amount, eg "Two Oxygen loans" on 74 Drummond St came from. Could you please forward Account No of Loan current statement. Also advice where these loans originated from and why.

23 The reference to 'Two Oxygen loans' in Ms Buttarelli's email was apparently to a fund known as the '02 Oxygen Fund 2002'. The Loan Application and the loan account statements allegedly provided to Ms Buttarelli carried a reference to that fund (see attachments 'EC 11' and 'EC 12' to Ms Chetty's affidavit of 22 July 2010; the role of the fund is further explained later in the reasons).

24 Mr Leslie's affidavit annexed a letter dated 14 September 2010 to a solicitor who had been engaged by Ms Buttarelli in relation to the application for summary judgment (attachment 'SGL1'). The letter had been apparently written in response to a request made by the solicitor for a copy of the Loan Application and 'details as to the cheque split when the loan was advanced'. Mr Leslie's letter referred to various documents attached to Ms Chetty's affidavit regarding the two loan accounts that were the subject of the Loan Contract and to Ms Buttarelli's letter of 17 September 2008 to Ms Byrne.

25 Mr Leslie also annexed to his affidavit a statement of account issued by 'Beneficial Home Loans' to Ms Buttarelli (attachment 'SGL3'). The statement of account was for the period 21 November 2001 to 30 September 2002. The statement disclosed that:

(a) Beneficial Home Loans was a division of Beneficial Lending Services;

(b) Beneficial Lending Services was the account manager for a fund managed by Interstar Securities (Australia) Pty Ltd and that the credit provider was Perpetual Trustees Victoria Ltd;

(c) the loan that was the subject of the statement was number MN28520003024422203, had a start date of 21 November 2001 and was in an amount of $112,500 (I shall refer to the loan as 'Perpetual Trustees Victoria loan 1');

(d) as at 30 September 2002, the amount owing by Ms Buttarelli in respect of the loan was $121,534.93.

26 Mr Leslie stated in his affidavit that he believed, 'on the basis of instructions I have received on behalf of [Perpetual]', that the account statement had accompanied the Loan Application and that it was this loan that was referred to as 'discharge present debt' in the Loan Application (Mr Leslie's affidavit par 5). Mr Leslie also stated that he believed that the payment of $122,717.39 to Perpetual Trustees Victoria referred to in the settlement statement provided by Mony de Kerloy related to the loan that was the subject of the account statement.

27 Ms Chetty's affidavit of 10 November 2010 dealt with the receipt and application of the proceeds from the sale of the Lesmurdie Property in August 2005 and the Port Kennedy Property in September 2005. She stated that the sale of the Lesmurdie Property had been settled on 26 August 2005. Solicitors for Perpetual had attended the settlement and received a cheque in the amount of $148,674.68 (that accorded with a settlement statement produced by Ms Buttarelli part of annexure 'VP 13' to Ms Buttarelli's affidavit sworn on 28 June 2012, page A40). That money had been applied to pay arrears on and partially discharge the Lesmurdie Loan and to clear arrears Perpetual loans 60126261 and 81721951 (pars 11 13).

(a) the sale of the Port Kennedy Property had been settled on 7 September 2005;

(b) as at that date, the amount required to fully discharge the Lesmurdie Loan had been $85,602.94 as at 7 September 2005 (par 17);

(c) Perpetual's then solicitors had attended settlement and collected a cheque in an amount of $141,829.29;

(d) Perpetual had applied the funds received to discharge the Lesmurdie Loan and distributed the balance between each of Perpetual loans 60126261 and 81721951 (in payment of arrears and a partial reduction of each loan) (par 19).

The hearing of the summary judgment application

29 Ms Buttarelli did not adduce evidence in opposition to Perpetual's application for summary judgment. She appeared in person at the hearing of the application and advised the court that she had approached a forensic accountant to '[go] through everything with a fine toothcomb' (ts 3). She sought an extension of time within which to file evidence. Master Sanderson refused that request on the ground that previous extensions of time had been granted and because the documents produced by Perpetual covered 'each and every aspect of the plaintiff's claim and they clearly show that the plaintiff is entitled to the relief they seek' (see the Master's reasons at ts 4 and ts 8).

30 It was apparent from the transcript of the hearing of the summary judgment application that:

(a) Counsel who appeared for Ms Buttarelli at a hearing prior to the final hearing of the summary judgment application had raised a query concerning the claim by Perpetual that Ms Buttarelli had borrowed $310,000 and not $155,000. That query had resulted in Mr Leslie making his affidavit.

(b) Notwithstanding the matters stated by Mr Leslie in his affidavit, Ms Buttarelli continued to dispute the claim that she had borrowed $310,000 she accepted that she had applied for a loan of $155,000 to fund the acquisition of the Port Kennedy Property but she disputed that she had applied for the second loan forming part of the Loan Contract.

The Loan Application and the account statements The form of the Loan Application

31 The Loan Application was in the form of a printed document that allowed for specified information to be inserted by hand. Each page of the application was headed 'O2 Oxygen Fund 2002', except for one page that was marked in hand '7'. The address of St James was printed at the bottom of the first page of the application.

32 The Loan Application made only one reference to Perpetual. That was on a page of the application headed 'Repayment and Transaction Authority'. The authority was addressed to Perpetual. Otherwise, the contents of the application apparently suggested that it was for the purpose of applying to St James for a loan see in particular that part of the application that appears under the heading 'Borrower's Signature'. There was, however, a reference to St James as a mortgage originator and mortgage manager and to 'funders' to St James in a part of the application that authorised the collection and disclosure of personal information concerning the applicant (appearing under the heading 'Applicant Declaration Authority and Acknowledgement').

33 The Loan Application referred to two loan accounts, each for $155,000 (Ms Chetty's affidavit of 22 July 2010, page 70). The application identified that the loans were for dual purposes: to fund the acquisition of the Port Kennedy Property and to refinance debt from Interstar Securities. The loan account statement attached to Mr Leslie's affidavit indicated that Interstar Securities was the fund manager for the Perpetual Trustees Victoria loan 1.

34 Ms Buttarelli had purportedly signed the Loan Application in three places: once on page 5 of the application (page 70 of Ms Chetty's affidavit of 22 July 2012) and twice on page 10 (page 74 of Ms Chetty's affidavit). She alleged that she had not made the signature appearing on page 5 of the application. She further alleged that she had signed the page that purported to be page 10 of the document but that the page had been copied from an earlier loan application form that she had completed (affidavit made by Ms Buttarelli on 28 June 2012, pars 33 and 37). Page 5 of the Loan Application recorded that the application concerned two proposed loan accounts, each for $150,000.

35 The page of the Loan Application that did not bear the '02 Oxygen Fund 2002' logo recorded details of a 100 point check for Ms Buttarelli. It was initially dated 19 January 2002 and then amended to 2003. The page carrying the signature of Ms Buttarelli that she did not dispute had also been dated 19 January 2002, amended to 2003 (page 10 of the Loan Application; page 74 of Ms Chetty's affidavit).

36 The page of the Loan Application that recorded Ms Buttarelli's personal details (page 67 of Ms Chetty's affidavit) noted that she had a particular mobile phone number (I will refer to the number as the 'Mobile Number'). Ms Buttarelli contended that she did not possess a mobile phone with that number until April 2005. It should be noted, however, that the application bore an imprint suggesting that it had been transmitted by facsimile on 31 January 2003.

Mr Horton's evidence regarding the Loan Application

37 Mr John Horton is a former police officer. He had at one time been in charge of the forensic division of the Western Australian Police Force. He is now a forensic consultant and licensed investigator. He was engaged by Ms Buttarelli to examine the Loan Application for the purpose of her application for a stay or suspension order. He provided two reports: annexure 'VB 1' to an affidavit made by Ms Buttarelli on 6 June 2012 and annexure 'SD-A1' to the affidavit of Simone Davies sworn on 27 August 2012 (Ms Davies is Ms Buttarelli's daughter).

38 Mr Horton examined the signature that purported to be Ms Buttarelli's signature on the Loan Application and which Ms Buttarelli claimed had been forged. He compared that signature with the signatures appearing on page 10 of the Loan Application the page that Ms Buttarelli claimed had been copied from an earlier loan application and added to the Loan Application. He also compared the disputed signature with other documents that Ms Buttarelli had signed and concluded in his first report that he had 'some doubt' about the authenticity of the signature that Ms Buttarelli claimed had been forged. He requested that he be given access to the original Loan Application to conduct a more thorough examination.

39 In his second report, Mr Horton compared the disputed signature with two further documents that were not tendered in evidence but which he assumed had been written by Mr Esposito. He concluded that:

(a) the handwriting appearing in the Loan Application and which provided further information regarding Ms Buttarelli and the application for finance was that of Mr Esposito;

(b) changes in the style of handwriting in the Loan Application might indicate that some pages of the application were taken from another document completed by Mr Esposito.

(a) page 7 of the Loan Application had been numbered by hand whereas the balance of the document carried printed numbers;

(c) page 1 of the document referred to a discharge authority on page 8 (for the purpose of refinancing a debt) but page 8 in the document was plainly not such an authority;

(d) there were slight differences in the facsimile marks between different pages and in the page dimensions.

41 He concluded that the Loan Application was a compilation of two documents. He did not comment further in his second report on the authenticity of the signature in the Loan Application that was disputed by Ms Buttarelli.

42 The statements for Perpetual loans 60126261 and 81721951 that were attached to Ms Chetty's affidavit of 22 July 2010 (attachments 'EC11' and 'EC12') were headed 'O2 Oxygen Fund 2002' and were apparently issued by St James. Grant Edwards is a default manager employed by Macquarie Bank Ltd. He stated in an affidavit made on 18 July 2012 and read by Perpetual that Macquarie Securitisation Ltd was a wholly owned subsidiary of Macquarie Bank. Macquarie Securitisation managed, in conjunction with St James and on behalf of Perpetual, the Perpetual Mortgage and Perpetual loans 60126261 and 81721951. St James managed the daytoday administration of the loans and the mortgage and Macquarie managed arrears and enforcement proceedings. However, he did not further explain the connection between the loans allegedly made to Ms Buttarelli and the 'O2 Oxygen Fund 2002'.

43 Three aspects of the Loan Contract and the Perpetual Mortgage were particularly relevant to Ms Buttarelli's application:

(a) The Loan Contract incorporated general conditions (attachment 'EC 2'). Clause 13.4 of the conditions permitted loan payments to be made by direct debit. Clause 13.5 required a borrower to provide the mortgage manager with a direct debit authority.

(b) Clause 2.4 of the Loan Contract permitted a borrower to open more than one home loan account with Perpetual. Clause 13.9 provided that Perpetual could apply any payment or other credit to an amount owed under a loan contract in any order it determined and, if there was more than one account, to any one or more of the accounts. Clause 13.10 permitted Perpetual to apply any payment made by a borrower to any one or more credit contract as it thought fit where the borrower had multiple credit contracts and the borrower had not directed otherwise in writing.

(c) The Perpetual Mortgage was an 'all moneys' mortgage (attachments 'EC 3', page 49 and 'EC 4', pages 53 54 of Ms Chetty's affidavit of 22 July 2010). Ms Chetty also stated that the mortgage granted in relation to the loan for the Lesmurdie Property was an 'all moneys' mortgage (par 19; and see attachment 'ARS 2.15' to the affidavit of Alana Rebecca Salsano sworn 19 September 2012 which was a copy of the mortgage and which expressly incorporated the memorandum of common provisions). Ms Buttarelli did not dispute that statement and attachment 'EC 4' was a memorandum of common provisions registered with Landgate and which provided for an 'all moneys' mortgage.

Ms Buttarelli's dealings with the Bedford Property and other properties

44 Ms Buttarelli's dealings with the Bedford Property and other properties that she has owned from time to time provided important context for the issues raised in her application. The dealings were summarised in a set of flow charts that were prepared by the solicitors for Perpetual (the Dealing Schedules) and which are annexed to the reasons.

45 The Dealing Schedules recorded information that was derived from documents that were tendered by Ms Buttarelli and Perpetual. However, Ms Buttarelli provided a response to the Dealing Schedules in the form of a flowchart and an accompanying document that were annexed to an affidavit that she had made on 11 October 2012 (annexure 'VB-1'). The flowchart and the accompanying document are further considered later in the reasons.

(a) Ms Buttarelli became the registered proprietor of land located at 74 Drummond Street, Bedford, being a portion of Swan Location W and being lot 52 on Plan 6079 and being all that land comprised in Certificate of Title vol 1148 folio 474, on 16 May 1984. A mortgage granted to Esporio No 3 Building Society was registered on the same day. That mortgage was discharged on 24 August 1990. Subsequently, three mortgages were granted to Town & Country Bank Ltd in 1992 (principal sum, $61,521), 1993 (principal sum, $12,461) and 1994 (principal sum, $62,300).

(b) The title comprised in certificate of title vol 1148 folio 474 was cancelled on 27 May 1998 on registration of a strata plan. The effect of that plan was to create three new lots: 74 Drummond Street, being lot 1 on strata plan 34370 and being all that land in Certificate of Title vol 2134 folio 86 (this is the property which has been referred to in the reasons as the Bedford Property); 74A Drummond Street, being lot 2 on strata plan 34370 and being all that land comprised in Certificate of Title vol 2134 folio 87 (Lot 2); and 74B Drummond Street, being lot 3 on strata plan 34370 and being all that land comprised in Certificate of Title vol 2134 folio 88 (Lot 3).

(c) The mortgages granted to Town & Country were registered against the titles for each of the lots created on the registration of the strata plan that is, on 27 May 1998.

(d) A discharge of the Town & Country mortgages was registered against the title to the Bedford Property on 21 June 1999 and a mortgage granted to the Police & Nurses Credit Society Ltd was registered on the same day. That mortgage was discharged on 21 November 2001. A mortgage granted to Perpetual Trustees Victoria Ltd (the Perpetual Trustees Victoria Mortgage) was registered on the same day.

(e) Simone and Stephen Davies became the registered proprietors of Lot 2 on the day that the title to the lot was registered. A discharge of the mortgages granted to Town & Country was registered against the title to Lot 2 on the same day. A mortgage granted to Westpac Banking Corporation was also registered against Lot 2 on that day. The mortgage was stamped to secure $104,000.

(f) A transfer of Lot 2 from Ms and Mr Davies to Ms Buttarelli was registered on 21 November 2001. The consideration for that transfer was $150,000. The Perpetual Trustees Victoria Mortgage was registered against the title to Lot 2 on the same day. A discharge of that mortgage was registered on 4 January 2006 and a mortgage granted to Liberty Funding Pty Ltd was registered on the same day.

(g) Ms Buttarelli transferred her title to Lot 3 to Alexander Buttarelli and Tina Marie May on 28 October 1999. A discharge of the mortgages granted to Town & Country was registered on that day, as was a mortgage granted to Police & Nurses Credit Society.

(h) A transfer of Lot 3 from Mr Buttarelli and Ms May to Ms Buttarelli was registered on 2 April 2002. The consideration was $150,000. A discharge of the mortgage granted to Police & Nurses Credit Society was registered on the same day, as was a mortgage granted to St George Bank Ltd.

(i) Ms Buttarelli became the registered proprietor of the Port Kennedy Property. A mortgage granted over that property to Perpetual was registered on 27 February 2003.

(ii) The Perpetual Trustees Victoria Mortgage registered against the Bedford Property was discharged.

(iii) The Perpetual Mortgage was registered against the title to the Bedford Property (the Perpetual Mortgage and the mortgage granted over the Port Kennedy Property being the same mortgage).

(j) A further mortgage granted to Perpetual was registered against the titles to the Bedford Property and the Port Kennedy Property in October 2003. It was to be inferred that this mortgage secured the Lesmurdie Loan.

(k) The mortgages over the Port Kennedy Property were discharged on 8 September 2005. A transfer of the property from Ms Buttarelli was registered on the same day. The consideration for the transfer was $249,000.

The application of the proceeds of the sale of the Port Kennedy Property

47 According to Ms Chetty, an amount of $36.77 was applied by Perpetual (in addition to the sale proceeds from the sale of the Port Kennedy Property) to repay the full amount owing on the Lesmurdie Loan (Ms Chetty's affidavit 10 November 2010, par 20). Reference was earlier made in the reasons to a settlement statement produced by Ms Buttarelli in relation to the Lesmurdie Property that showed that the amount that Perpetual claimed to have received from the sale proceeds corresponded with the amount that it was to have received. Ms Buttarelli also produced a settlement statement for the sale of the Port Kennedy Property (annexure 'VP 10' to Ms Buttarelli's affidavit of 28 June 2012). That statement indicated that Perpetual was to receive $141,866.06 from the sale proceeds for 'discharge of mortgage I401541 from Perpetual Trustees'. According to Ms Chetty, Perpetual attended settlement and received a cheque in the amount of $141,829.29. The difference between $141,866.06 and $141,829.29 is $37.77 the amount to which Ms Chetty referred in her affidavit as having been paid by Perpetual.

48 Ms Buttarelli also produced the customer's record for two bank cheques that indicated that cheques in the amounts of $91,829.29 and $91,866.06 were drawn in favour of Perpetual Trustees Australia Ltd on 5 and 7 September 2005 (attachment 'VP 11'). She provided no explanation for how she had obtained the records but asserted that they established that a total of $183,695.35 had been deposited with Perpetual from the sale of the Port Kennedy Property.

49 That assertion was inconsistent with the settlement statement that Ms Buttarelli had also produced and which she did not dispute. Selfevidently, the other disbursements to which the statement referred could not have been made had Perpetual received approximately $183,000 from the proceeds of the sale of the Port Kennedy Property. Further, the difference between each bank cheque was $36.77. Two inferences followed from those matters in my view: the amount of $36.77 represented interest on a short delay in settlement (deducted by the purchaser from the amount tendered at settlement) and the bank cheque issued on 5 September would not have been tendered and received by Perpetual at the settlement on 7 September 2005. That would be consistent with the difference between the settlement statement produced by Ms Buttarelli and the amount that Perpetual received at settlement according to Ms Chetty.

50 It will be necessary to return to this matter later in the reasons. However, it is to be noted that Perpetual's records and the settlement statements produced by Ms Buttarelli for the sale of the properties agreed on the amounts that were to be received and had been received by Perpetual. The differences between Perpetual and Ms Buttarelli over the application of the sale proceeds merely reflected the dispute over Perpetual loan 81721951.

51 Ms Buttarelli also emphasised that the settlement statement for the sale of the Port Kennedy had referred to the amount to be received by Perpetual as being for the discharge of mortgage I401541. She complained that the mortgage had not been discharged as it remained registered over the Bedford Property (that is, the Perpetual Mortgage) and implied that this was further evidence of the fraudulent conduct associated with the loans allegedly made by Perpetual. The mortgage was, in fact, discharged over the Port Kennedy to enable settlement of the sale to proceed; it remained on the Bedford Property as it was an all money's mortgage securing the money that Perpetual alleges that it is owed and which Ms Buttarelli disputes.

52 Ms Buttarelli's application commenced with an ex parte hearing at which her counsel had only limited instructions. The application then progressed across several hearings on ever more complicated affidavit material culminating in Ms Buttarelli's final affidavits sworn on 11 October 2012 and 2 November 2012. The 11 October 2012 affidavit was filed, with leave, after the final hearing of the application. The affidavit made on 2 November 2012 did not depose to any matter that was relevant to the application.

53 Ms Buttarelli primarily relied in support of her application on the affidavits that she made on 28 June 2012 and 11 October 2012 and on the two reports provided by Mr Horton. Ms Davies also made two affidavits and an affidavit was received from an employee of Vodaphone Hutchinson Australia Pty Ltd, Ms Hannah Bolton, regarding the Mobile Number.

54 As previously noted, Ms Buttarelli initially supported her application with an affidavit in which she stated that the principal sum recorded in the 'loan accounts, loan contract and mortgage' did not accurately reflect the 'true account' of the funds that she had borrowed from Perpetual. She did not further explain why that was so except with the comment that she had only ever borrowed money to purchase a specific property.

The hearing on 24 July 2012 - Ms Buttarelli's affidavit of 28 June 2012

55 The approach taken by Ms Buttarelli in her affidavit made on 28 June 2012 was to respond in detail to the evidence that had been adduced by Perpetual in its application for summary judgment. In summary, Ms Buttarelli stated that:

(a) She believed that she had applied for a loan, through Mr Esposito, on or about 19 January 2003. However, she had not signed the Loan Application nor had she authorised Mr Esposito to seek finance in the terms of the application (pars 30 31).

(b) She believed that the signature appearing at page 5 in the Loan Application (page 70 of Ms Chetty's affidavit of 22 July 2010) had been forged (par 33) and that page 10 of the document (page 74 of Ms Chetty's affidavit) had been copied from an earlier loan application that she had completed (par 37). The earlier loan application had been made in January 2002 and was for the purchase of Lot 3. The loan was secured by the mortgage granted to St George Bank that was registered on 2 April 2002 (par 37). Ms Buttarelli produced a copy of the mortgage (attachment 'VP 7') but no copy of the relevant loan application was produced by either party. Mr Esposito witnessed Ms Buttarelli's signature on the mortgage granted to St George.

(c) She disputed that she had signed the Perpetual Mortgage. Ms Buttarelli pointed to what she considered to be anomalies in the copies of the Perpetual Mortgage that had been produced by Ms Chetty. Two copies of the Mortgage had been produced (attachment 'EC3'). Different people had apparently completed the date by hand in each copy (according to a letter that Perpetual claimed had been sent by Mony de Kerloy to Ms Buttarelli (attachment 'EC7'), Ms Buttarelli was provided with two copies of the mortgage to be granted to Perpetual for dating and signing). It appeared that one copy of the mortgage had been stamped as the primary instrument (attachment 'VP 1' to Ms Buttarelli's affidavit) and the other copy had been stamped as a duplicate (attachment 'VP 3'; it should be noted that this document was stamped on 4 March 2003, the date on which the Perpetual Mortgage was registered against the title to the Bedford Property). According to Ms Buttarelli, attachment 'VP 1' was registered with Landgate but attachment 'VP 3' had not been registered. That would be consistent with the inference that I drew about the stamping of the documents. However, Ms Buttarelli gave compounded hearsay evidence that the document marked 'VP 1' had been stamped to secure $234,870, while the document marked 'VP 3' had been stamped to secure $310,000. Ms Buttarelli asserted that those matters cast doubt on the authenticity of the documents produced by Ms Chetty (par 26). She also stated that she was waiting for further details of the assessment of the two documents from the Office of State Revenue. However, she did not subsequently provide additional evidence regarding the stamping of the Perpetual Mortgage.

(d) She had received documents relating to Perpetual loan 60126261 but she was not aware of nor had she received any documents in relation to Perpetual loan 81721951 (pars 38 39). She had not sought a second advance nor had she authorised the opening of loan account number 81721951. She produced a letter dated 26 February 2004 written by St James (attachment 'VP 9') that referred to two loans under the heading 'Macquarie Bank'. The loan accounts to which the letter referred were numbers 60126261 (the balance outstanding was stated to be $154,883.81) and 30591867 (the loan account for the loan made by Perpetual to Ms Buttarelli in October 2003 to fund the purchase of the Lesmurdie Property). The letter did not refer to loan account number 81721951. Ms Buttarelli described the letter as 'stipulating the existence of only loan (being account number 60126261)'. The letter is further considered later in the reasons.

(e) She had been provided with a deposit card by the '02 Oxygen Fund 2002'. The accompanying undated letter contained a bar code that referred to 60126261 (attachment 'VP 8').

(f) She did not receive the documents referred to in the letter purportedly written to her by Mony de Kerloy prior to settlement (attachment 'EC7'). She had signed a contract for a loan of $155,000 in the presence of Mr Esposito (par 47). He brought the documents to her home for her to sign. She did not sign an authority for the various disbursements referred to in Mony de Kerloy's settlement statement provided to St James (par 52) and disputed the authenticity of the documents provided by Mony de Kerloy to Perpetual's current solicitors (pars 49 and 52 54). It is relevant to note that the solicitor's certificate that was apparently issued by Mony de Kerloy to Perpetual at the time of the Loan Contract identified Perpetual's reference as 60126261 and 81721951.

(g) She was not aware that the Bedford Property was mortgaged as security 'at the relevant time' (pars 23 and 60). She had informed Mr Esposito that she did not 'at any stage want to use my house as security for any loans' (par 24).

(h) She sold the Port Kennedy Property in September 2005. She believed that the settlement statement and the bank cheques that she had produced (considered earlier in the reasons in the section on the application of the proceeds of sale of the Port Kennedy Property) contradicted Ms Chetty's evidence about the funds that had been received by Perpetual and how the funds had been applied (pars 59 and 61). She was not aware of the matters to which Ms Chetty had referred regarding the receipt and application of the sale proceeds from the Port Kennedy Property (pars 62 66 and 68 71).

56 In relation to Ms Bryne's affidavit, Ms Buttarelli admitted that she had endeavoured to sell the Bedford Property (par 6i). She also admitted that she had offered Ms Bryne some money to 'prevent [Perpetual] from repossessing my Bedford residence' (par 6vi) and that she had handed to Ms Byrne the letter of 17 September 2008 that referred to, and identified by account numbers, Perpetual loans 60126261 and 81721951 (par 6vii). However, she stated that she had written the letter to prevent her house being repossessed and not because 'I personally believed I was liable for the monies claimed'. She also stated that Ms Bryne had advised her of the account numbers for the loans that were referred to in the letter (par 6vii).

57 As to Mr Ioppolo's affidavit, Ms Buttarelli stated that her communications with him were for the purpose of obtaining information to enable her to repay the debt claimed by Perpetual, 'failing which they would repossess my Bedford residence' (par 7).

58 In relation to Mr Leslie's affidavit, Ms Buttarelli denied that she was 'effectively' liable for the loan that was the subject of the Beneficial Home Loans statement attached to his affidavit (par 82). However, she did not state why she was not liable for that loan.

59 Ms Buttarelli complained about several matters relating to or arising out of Ms Chetty's affidavit made on 10 November 2010. So far as was relevant to her application, Ms Buttarelli alleged that the Lesmurdie Loan had been 'oversecuritised and crosscollateralised' and she complained that the loan, and the loan made in relation to acquisition of the Port Kennedy Property, ought to have been fully repaid from the proceeds of the sale of those properties (par 85). She did not apparently dispute that the mortgages granted to secure those loans were 'all moneys' mortgages but she alleged that the sale proceeds had been disbursed without her authority 'and spread across crosscollateralised loans'. She stated that (par 85):

As a result, none of the particular loans were discharged or released from the securities against them. This had the consequential effect of 'tying up' all my properties on a continuing basis. I am informed by Ms Davies and verily believe that better and more ethical practices should have been followed by [Perpetual], such as a release of my Bedford residence (particularly as I was never aware that they held that property as security against my other investment properties at any material time).

60 Ms Buttarelli also deposed to various matters which she described as being relevant to the background to her application: the difficulties that she had encountered in obtaining legal advice at the time of Perpetual's application for summary judgment and complaints that she had made to various persons to 'determine what Beneficial Home Loans and UBS/St James employees have done with all of my accounts being now in dispute and allegedly having debts' (par 98). She also alleged that 'the disbursement of funds upon the sale of all my properties were disbursed without my authority'; that 'this form of disbursement was unethical, unauthorised and deceitful' and 'after this debt and the fraud was established I have now discovered more loans were doubled, refinances/restructures done without my authority' (pars 101 - 103); and that 'I also have discovered a pattern of behaviour in regards to Perpetual Trustees Limited and St James/UBS Mortgages, whereby further double loans have been taken out in my name. In a few instances, one loan was taken for the mortgage and the other to pay that mortgage' (par 111). Further (par 15):

I had always maintained that 'there were fraudulent transactions but I did not have the financial or business know-how to be able to prove this. It wasn't until my daughter was asked by Mr Aristei ... if she could look at the documents to determine if there was something that she might be able to clarify due to her lending experience (gained from nearly seven years that she worked for the ANZ as Senior Banking Officer and Mortgage Specialist). She quickly detected discrepancies and we have proceeded from there...

61 There was no explanation in Ms Buttarelli's affidavit about the apparent inconsistency between this statement and the statement to Master Sanderson that a forensic accountant had been engaged to 'go through everything with a fine toothcomb' or why Ms Davies had not been asked to assist at the time of the summary judgment application.

62 Finally, Ms Buttarelli gave evidence about her relationship with Mr Esposito. In summary, she alleged that she had relied on him in making investment decisions as she had lacked financial knowledge; that she had established a close professional relationship with him; that her loan accounts were administered by St James with loan payments being made by direct debits; that she rarely received account statements and did not know 'what was being paid' and that she was asked to sign documents that were undated (pars 104 109). She considered that the 'unauthorised cross-collateralisation' of loans had contributed to the position that she had found herself in 2008 (pars 110 112).

Submissions made on behalf of Ms Buttarelli at the hearing on 24 July 2012

63 As previously noted, the electronic file provided by Mony de Kerloy to Perpetual's present solicitors included a letter to St James reporting on the settlement of the Loan Contract and the disbursement of the funds advanced. The disbursements were said to include a payment of approximately $122,000 to Perpetual Trustees Victoria.

(a) The mortgage granted to the Police & Nurses Credit Society over the Bedford Property was discharged and the Perpetual Trustees Victoria Mortgage was registered on 21 November 2001. The Perpetual Trustees Victoria Mortgage was also registered over Lot 2 on the same day.

(b) The Perpetual Trustees Victoria Mortgage over the Bedford Property was discharged on 4 March 2003. The Perpetual Mortgage was registered over the Port Kennedy Property on the same day.

(c) The Perpetual Trustees Victoria Mortgage was discharged over Lot 2 on 4 January 2006. A mortgage granted to Liberty Funding was registered on the same day. That mortgage was also registered over Lot 3. The mortgage that had been previously granted to St George Bank was discharged at the same time.

65 Counsel who appeared for Ms Buttarelli at the hearing on 24 July 2012 advised that he had been instructed that the debt secured by the Perpetual Trustees Victoria Mortgage had been repaid prior to the Loan Contract being made (ts 41). He further explained his instructions as follows:

(a) The three mortgages that had been granted to Town & Country were discharged over Lot 2 on 27 May 1998 when Ms and Mr Davies became the registered proprietors of the lot. Ms and Mr Davies granted a mortgage to Westpac that secured a loan that had been used to fully repay the amount owing to Town & Country (ts 68).

(b) The mortgages that had been granted to Town & Country remained registered against the titles to the Bedford Property and Lot 3 but they did not, in fact, secure any debt that was owed to Town & Country (ts 68).

(c) The loan purportedly made by Perpetual Trustees Victoria was for a loan that had already been repaid: 'my client says further - she submits that it [the Town & Country loans] was actually paid on a number of occasions' (ts 69).

66 The effect of those instructions was said to be that (ts 70):

... one loan pays out the next until it leads to the present one or the Beneficial home loan of November 2001, but the position put is that there were payments of loans that had already been repaid. There was a double dipping - a double payment. My client says there was a quadruple payment, but for present purposes the [Perpetual Trustees Victoria] loan was not payable.

67 The Dealings Schedules disclosed that the following chain of mortgages had been registered against the title to the Bedford Property: Town & Country to Police & Nurses Credit to Perpetual Trustees Victoria to Perpetual. Consequently, the mortgages purportedly granted to Police & Nurses Credit, Perpetual Trustees Victoria and Perpetual (in so far as it related to the Bedford Property) were alleged to have not been authorised and were, by implication, fraudulent according to Ms Buttarelli.

68 An affidavit made by Ms Davies was also read at the hearing on 24 July 2012 in support of Ms Buttarelli's application. She stated that she had analysed the information relevant to the claim made by Perpetual and she sought to verify most of the statements made by Ms Buttarelli in her affidavit of 28 June 2012. However, Ms Davies' evidence was very general and she purported to verify statements made by Ms Buttarelli about which she could not have had actual knowledge.

69 In addition to the evidence tendered in the application for summary judgment, Perpetual primarily relied on two affidavits sworn by Alana Rebecca Salsano to oppose Ms Buttarelli's application. Ms Salsano is a solicitor employed by the solicitors who appear for Perpetual.

70 The first affidavit made by Ms Salsano (sworn 16 July 2012) attached a copy of the Perpetual Trustees Victoria Mortgage (attachment 'AS2'). The affidavit also explained that Ms Chetty had sworn a further affidavit on 24 August 2010 for the purpose of the summary judgment application. The affidavit was in identical terms to the affidavit Ms Chetty had made on 22 July 2010, except that it had been updated to state the amount, including interest, allegedly owed by Ms Buttarelli.

71 Ms Salsano's second affidavit (sworn 19 September 2012) attached:

(a) A bundle of documents relating to dealings by Ms Buttarelli on the Bedford Property and other properties that she had owned from time to time. The documents formed the evidentiary basis for the Dealings Schedules.

(b) A discharge authority apparently signed by Ms Buttarelli, dated 19 January 2003 and addressed to the manager, Beneficial Lending Services. The authority requested a discharge of the Perpetual Trustees Victoria Mortgage over the Bedford Property and Lot 2 but was also endorsed with a note made by hand in which it was requested the mortgage only be discharged over the Bedford Property. The authority was a printed form bearing the heading '02 Oxygen Fund 2002'.

(c) Statements of account issued by Beneficial Home Loans to Ms Buttarelli. One statement was for the Perpetual Trustees Victoria loan 1. It stated that Ms Buttarelli owed an amount of $121,534.93 as at 30 September 2002. The second statement was for a loan account MN2852000324429403 (the 'Perpetual Trustees Victoria loan 2'). The statement for that account stated that:

(i) Perpetual Trustees Victoria was the credit provider, Beneficial Lending Services was the account manager and Interstar Securities was the fund manager;

(iv) the amount owing as at 30 September 2002 was $105,976.27.

The statements also indicated that payments had been made during 2001 and 2002 in respect of the amounts outstanding on both loan accounts.

(d) A facsimile dated 28 August 2002 from the business development manager of Beneficial Home Loans to Ms Buttarelli providing payout figures for two loans. I inferred the payout figures were for the loans apparently made by Perpetual Trustees Victoria to Ms Buttarelli. I drew that inference from the identity of the sender of the facsimile (Beneficial Home Loans), the amounts said to be owed and the contents of a letter dated 9 October 2002 from Ms Buttarelli to St James that is referred to below.

(e) A loan application prepared using the same printed form as was used for the Loan Application. The amount sought to be borrowed was $222,000. The application was apparently signed by Ms Buttarelli and dated by her, 14 August 2003. It also appears to have been signed by Mr Esposito. The apparent purpose of the loan was to fund the acquisition of the Lesmurdie Property. The form and contents of the application are further considered later in the reasons in a section dealing with Ms Buttarelli's allegations about the inclusion of the Mobile Number in the Loan Application.

(f) A facsimile on the letterhead of Mony de Kerloy bearing a facsimile transmission imprint date of 26 February 2003. The facsimile was addressed to the Manager, Macquarie Securitisation and Perpetual and related to settlement of the Loan Contract. The facsimile advised that the loan was ready to proceed to settlement on 27 February 2003. It referred to loan application numbers 60126261 and 81721951 and to a loan amount of $310,000. The facsimile provided details, among other things, of the insurance policies apparently effected by Ms Buttarelli over the Bedford Property and the Port Kennedy Property. The facsimile also included the solicitor's certificate issued by Mony de Kerloy to Perpetual.

(g) A letter dated 9 October 2002 from Ms Buttarelli to St James. The letter referred to 'reversals' on a home loan statement. Ms Buttarelli stated in the letter that 'it was agreed with Beneficial Lending Services the mortgage manager that the payments were to be debited on the last day of each and every month'. That apparently did not occur and was the explanation for the reversals on the home loan statement. The letter continued, '[t]his is the reason why I wish to refinance to UBS Home Loans to have a better loan and above all a better loan service in respect to my investment properties which I propose to use as the security' (emphasis added). The letter stated that Ms Buttarelli was including 'my other loan statement at St George Bank which shows excellent conduct'. She added that the loan statement indicated that her payments were always on time 'if only the direct debits are actioned when the appropriate day and date is adhered to'. I have inferred that the reference to the St George Bank loan was to the loan secured by the mortgage granted by Ms Buttarelli to St George over Lot 3, registered on 2 April 2002.

72 Perpetual made additional submissions based on the Dealing Schedules at a further hearing of Ms Buttarelli's application held on 26 September 2012. Leave was given to Ms Buttarelli to adduce further evidence in response to the schedules and the affidavit made by Ms Salsano. She did so by an affidavit sworn on 11 October 2012.

The affidavit made by Ms Buttarelli on 11 October 2012

73 In her affidavit made on 11 October 2012, Ms Buttarelli:

(a) Referred to and attached the flow chart and accompanying document (attachment 'VB-1') that were intended to respond to the Dealings Schedules. The flow chart was prepared by Ms Buttarelli with the assistance of Ms Davies. The accompanying document contained a commentary on the dealings to which the flow chart referred.

(b) Also referred to and attached documents that were said to be 'key documents' relied on in relation to the flow chart (annexure 'VB2').

(c) Attached a document that she described as being 'statements of fact by my daughter, Ms Simone Davies, in relation to the errors and information contained in the plaintiff's flowchart' (par 5; annexure 'VB-3') (I will refer to the document as 'Ms Davies' statement').

(d) Denied signing the discharge for the Perpetual Trustees Victoria Mortgage.

(e) Stated that documents annexed to the affidavit evidenced the 'true payment of the earlier loan from Perpetual Trustees Victoria'. The documents to which that statement referred concerned the loan made by Liberty Funding and included an undated disbursement authority advice in which it was stated that, among other things, the sum of $184,719.70 was disbursed by Liberty Funding in settlement of a loan to Perpetual Trustees Victoria.

(f) Also stated that, to the best of her recollection, she did not have a mobile phone with the Mobile Number prior to April 2005.

The flow chart, the accompanying document and Ms Davies' statement

74 Ms Buttarelli's flow chart recorded sequences of dealings with the Bedford Property, Lot 2, Lot 3, the Port Kennedy Property, the Lesmurdie Property and a property located at 35 Tyrall Avenue, Port Kennedy (this property was situated next to the Port Kennedy Property). The flow chart and the accompanying document were apparently prepared from a combination of the documents used to compile the Dealing Schedules, the documents annexed to Ms Buttarelli's affidavit of 11 October 2012 and other documents that were not in evidence. The documents incorporated a number of assertions regarding the circumstances in which loans were made and dealings were registered on the titles to the properties concerned.

75 Ms Davies' statement was in the form of a commentary that was not confined to explaining alleged inconsistencies in the Dealing Schedules but sought to also respond to written submissions from Perpetual dated 24 September 2012. It was, accordingly, tendentious in tone and content. Further, the statement reflected the breadth of the allegations made by Ms Buttarelli: it was alleged that Ms Buttarelli's flow chart demonstrated a pattern of 'the brokerage firm doubling and even tripling the loans all the way through when lodgement of the mortgage title occurs' (annexure 'VB 3', par 1); that 'someone' endeavoured to obtain funds by not discharging the mortgage over Lot 2 (par 2); that Ms Buttarelli had disposed of three properties the Port Kennedy Property, the Lesmurdie Property and the property at 35 Tyrall Avenue - for a total of $712,000 'collected' but she had been unable to find the 'true disbursements' (par 10); that 'representatives dealing with settlements of the properties took it upon themselves with general power of attorneys to discharge and change the loans amounting to misappropriation of funds' (par 12); that new mortgages were created without 'authority or need' from or by Ms Buttarelli (par 14); that 'none of the property loans have ever been paid in full and if so were only partially released from the land via the retaining of encumbrances and to conceal this action the issuance of new titles numbers for no apparent reason' (par 19); that the 'brokerage company' wrote up a $1 million loan in January 2006 'collateralising and refinancing 4 of Ms Buttarelli's properties without advising her' (par 45) and that the loan by Perpetual Trustees Victoria was not refinanced by a loan from Perpetual (that is, Perpetual loan 81721951) but was repaid from the funds advanced by Liberty Funding (par 46).

76 Further submissions were filed on behalf of Ms Buttarelli that referred to her affidavit of 11 October 2012 and which apparently acknowledged the difficulty in following the detail contained in the documents comprising the flow chart, the accompanying document and Ms Davies' statement:

Assuming that this honourable Court is unable to draw any particular inferences of fact from the voluminous information contained in the flow charts, the net effect is that no positive, nor negative inference is to be drawn from such evidence for the purposes of the present interlocutory application. Such an outcome does not in any way detract from the sequence of 'disturbing' facts and inferences that have now been documented in relation to the summary judgment earlier entered against the first defendant. (First defendant's outline of further submissions dated 12 October 2012, par 18)

77 It is necessary to further consider certain matters referred to in the flow chart and the accompanying document notwithstanding that submission.

78 The flow charts and the accompanying document stated that Ms Buttarelli purchased a property located at 35 Tyrall Avenue, Port Kennedy, in June 1999. Three points were made about the property in the flowchart and the accompanying document:

(a) As I read the flow chart and the accompanying document, it was said that the property was purchased with funds borrowed from the Police & Nurses Credit Society.

(b) As the Dealing Schedules disclosed, a mortgage granted to Police & Nurses was registered against the title to the Bedford Property on 25 June 1999. It was said in the flow charts that the mortgage ought to have been registered against the title to 35 Tyrall Avenue. It was further said that 'Perpetual stated monies used for double loan were to pay for old debt being above non-existent old loans paid out 27 May 1998. Relates to purchase of 35 Tyrall Ave, Port Kennedy. Issued and lodged Police and Nurses $140,000 what for?'

(c) According to the flow chart, a mortgage was registered against the title to 35 Tyrall Avenue on 21 November 2001.

(a) The submission made at the hearing on 24 July 2012 was apparently to the effect that Ms Buttarelli had not authorised any borrowings from Police & Nurses. However, the flow chart and the accompanying document indicated that funds had been borrowed from the credit society with Ms Butterelli's authority, the complaint being that a mortgage was registered over the Bedford Property rather than against the title to 35 Tyrall Avenue, Port Kennedy. A copy of that mortgage was attachment 'ARS 1.7' to Ms Salsano's affidavit (mortgage H142219 dated 12 May 1999).

(b) The mortgage granted to Police & Nurses that was registered over 35 Tyrall Avenue was among the documents attached to Ms Buttarelli's affidavit of 11 October 2011 (mortgage H935241 at pages 43- 47). It was dated 17 October 2001. Consequently, it would appear that Ms Buttarelli granted two mortgages to Police & Nurses.

(c) Each of the mortgages granted to Police & Nurses was stamped to secure $140,000. Further, the mortgage dated 17 October 2001 was stamped on the basis that the primary instrument was dated 12 May 1999 that is, the date of the mortgage registered against the Bedford Property.

(d) The mortgage granted to Police & Nurses over the Bedford Property was discharged on 21 November 2001. The Perpetual Trustees Victoria Mortgage was registered on the same day. That was stamped to secure $218,000.

(e) It was to be noted that the mortgage apparently granted to Police & Nurses over the Bedford Property was dated approximately one month prior to the date on which Ms Buttarelli stated that she had purchased the property at 35 Tyrall Avenue, Port Kennedy. It might reasonably be inferred that this would explain why the mortgage was granted over the Bedford Property rather than the property in Port Kennedy. It may also be reasonably inferred that the Police & Nurses agreed in about October 2001 to allow the mortgage over the Bedford Property to be discharged to enable the Perpetual Trustees Victoria Mortgage to be registered (apparently securing a loan for a greater amount) with substitute security being provided in the form of the mortgage granted over 35 Tyrall Avenue, Port Kennedy. That would explain the basis upon which the mortgage over 35 Tyrall Avenue was stamped. Further, that sequence of dealings would indicate that the Police & Nurses loan was not discharged in November 2001; rather, the mortgage over the Bedford Property was discharged on substitute security being provided by Ms Buttarelli.

80 Accordingly, there is a reasonable explanation available for the dealings with Ms Buttarelli's interest in 35 Tyrall Avenue, Port Kennedy. It was relevant that Ms Buttarelli did not deny that she had granted each of the mortgages to the Police & Nurses that were referred to in the evidence.

81 Significantly, there was no evidence that Perpetual had any connection with the loan made by Police & Nurses or the mortgages granted to secure the loan (indeed, there was no evidence that St James and/or Mr Esposito were involved in the loan apart from whatever might be inferred by Ms Buttarelli's evidence that she relied on Mr Esposito for financial advice and he arranged her borrowings generally). Consequently, the assertions that were made about the dealings on the title to 35 Tyrall Avenue, Port Kennedy had little relevance to Ms Buttarelli's application for a stay or a suspension order.

82 The flow chart and the accompanying document asserted that attempts had been made to register dealings on the title to Lot 2 for purposes that were not authorised (it is alleged in Ms Davies' statement that a mortgage was not discharged for the fraudulent purpose of obtaining funds). Reference was made to three documents that had been stamped 'rejected dealings'. Those dealings concerned a mortgage apparently granted by Ms and Mr Davies over Lot 2 to ANZ on 3 February 1999. Neither party put in evidence a copy of the certificate of title for Lot 2. However, as best as I have been able to ascertain from the documents attached to Ms Salsano's affidavit and Ms Buttarelli's affidavit of 11 October 2012:

(a) The mortgage was twice stamped on unknown dates to secure a total of $251,000 (see Ms Salsano's affidavit at page 39 Ms Buttarelli's affidavit at page 26).

(b) The mortgage was first accepted for registration on the title to Lot 2 on 22 February 1999 (dealing number H32584; Ms Buttarelli's affidavit of 12 October 2012 at page 25). Subsequently, the dealing was marked 'rejected dealings' on 22 April 1999 (Ms Buttarelli's affidavit, page 25). The accompanying document stated in relation to that rejected dealing:

This was a mortgage on Samona Katiuscia Davies and Stephen Lawrence Davies which was effected against their knowledge and issued due to a letter error in the name of Katiuscia by the Registrar of Titles, Ian Hyde (Mr and Mrs Davies did not have an ANZ mortgage of at this time. Also the name Katiuscia had now been amended in the amount of $102,000 and the other $449,000 relating to their purchase of another property in Bassendean).

(c) The mortgage was again registered on 16 September 1999 (dealing number H225066; Ms Salsano's affidavit, page 42; Ms Buttarelli's affidavit, page 29). The flow chart stated that the dealing was rejected on 16 September 1999. However, it is clear that the mortgage was registered on that date; the reference to a rejected dealing is to dealing H32584, rejected on 22 April 1999.

(d) Ms and Mr Davies apparently granted a further mortgage over Lot 2 to ANZ on 21 April 2001 (attachment 'ARS 1.4' to Ms Salsano's affidavit). That mortgage was registered on 4 May 2001. It was stamped to secure $102,000, the primary instrument date being given as 3 February 1999. The flow chart stated that the mortgage had been set up against the knowledge of Ms and Mr Davies and that it referred to 'the old debt of $102,000 paid out in 1998 by them' and that the mortgage had been 'issued against the rejected dealing H 225066'.

83 The Dealing Schedules disclosed that the mortgages granted to ANZ were discharged on 21 November 2001. That was the same day on which a transfer of Lot 2 from Ms and Mr Davies to Ms Buttarelli was registered and the Perpetual Trustees Victoria Mortgage was also registered.

84 I had difficulty in following all that was stated in the flow chart and the accompanying document about the dealings with the title to Lot 2. However, it was plain that Ms Davies denied that any mortgage had been granted to ANZ and asserted that any dealings regarding the supposed mortgage were unauthorised. It is difficult to understand how Ms Buttarelli could take and settle on a transfer of Lot 2 without knowing that there was a mortgage registered against the title to the property and that it was proposed to discharge the mortgage. In any event, there was no evidence that Perpetual, St James or Mr Esposito was involved in the mortgages or any dealing with the mortgages or the title to Lot 2 to which Ms and Mr Davies were, or purportedly were, parties.

85 Consistent with counsel's submissions at the hearing on 24 July 2012, the flow chart and the accompanying document suggested that the Town & Country loans had been fully repaid at the time that the Drummond Street property was subdivided utilising funds advanced by Westpac to Ms and Mr Davies (and presumably used to pay the consideration for the transfer of the property from Ms Buttarelli to Ms and Mr Davies). Consequently, it was alleged that the mortgages granted to Town & Country ought to have been discharged in May 1998 when, in fact, a mortgage was only discharged in relation to Lot 2. However:

(a) There was no direct evidence that the Town & Country loans were fully repaid utilising the funds borrowed from Westpac; there was merely an assertion by Ms Davies in her statement that this had occurred.

(b) The three mortgages granted to Town & Country were stamped to secure a total amount of approximately $136,000. The mortgage granted by Ms and Mr Davies to Westpac was stamped to secure $104,000. There was no evidence about the amount owing to Town & Country as at May 1998 or how the funds advanced by Westpac were applied (apart from the assertion that they were used to discharge the debt due to Town & Country).

86 As has been mentioned, Ms Buttarelli stated in her affidavit of 11 October 2012 that the 'true payment of the earlier loan from Perpetual Trustees Victoria' was established by documents annexed to the affidavit (attachment 'VB-5'). It is to be noted that Ms Buttarelli apparently accepted that money had been borrowed from Perpetual Trustees Victoria to her knowledge and with her authority when she made that statement.

87 The documents to which Ms Buttarelli referred disclosed that she had two loan accounts with Liberty Funding (account numbers 1159042 and 1152487) by which advances of $1 million and $502,425 had been made; that the advances had been secured by a mortgage granted over Lot 2, Lot 3, properties located at 104 Walter Road, Bedford, 225 Lesmurdie Road, Lesmurdie and 196 Grove Road, Lesmurdie and that the advances had been repaid on or by 26 June 2007.

88 The documents forming annexure 'VB-5' also included a disbursement advice for loan number 1159042. The disbursements included payments of $184,719.70 to Perpetual Trustees Victoria, $448,256.47 to St George Bank and $197,443.61 to Adelaide Bank. Ms Buttarelli did not provide any further evidence regarding those payments or indeed, about the circumstances surrounding the loans made by Liberty Funding (except through the allegation made in Ms Davies' statement that a loan of $1 million from Liberty Funding had been arranged by the St James without Ms Buttarelli being advised). There was also no evidence regarding her interest in the properties that had been mortgaged as security for the loans (apart, obviously, from Lot 2 and Lot 3). Consequently, there was no evidence as to when those properties had been acquired and how their purchase had been funded.

89 It will be recalled that there was evidence that Ms Buttarelli had two loan accounts by which funds had been advanced by Perpetual Trustees Victoria. The dealings with the Perpetual Trustees Victoria Mortgage as disclosed by the Dealings Schedules have already been explained. The inference from those dealings was that the funds advanced by Perpetual were used to repay the Perpetual Trustees Victoria loan 1 (consistent with the purpose stated in the Loan Application) and that the loan of $1 million made by Liberty Funding was used, in part, to repay the Perpetual Trustees Victoria loan 2.

90 Ms Buttarelli stated that the Mobile Number was first allocated to her when a SIM card for that number was registered in her name in about April 2005. She produced a letter from Ms Bolton, an employee of Vodafone, confirming that a mobile phone and SIM card for the relevant mobile phone number were sold in April 2005 (affidavit 7 September 2012, attachments 'VB A' and 'VB B'). The statements made in that letter were later confirmed in an affidavit made by Ms Bolton. Ms Buttarelli relied on the inclusion of the Mobile Number as confirmation that the Loan Application was a fabrication.

91 The Loan Application must have been prepared some time after April 2005 on Ms Buttarelli's allegations. However, the application, including the page recording the Mobile Number, bore a transmission imprint suggesting that the application was transmitted by facsimile on 31 January 2003.

92 Further, the loan application that Ms Buttarelli apparently completed for the purchase of the Lesmurdie Loan also recorded that the mobile phone number for Ms Buttarelli was the Mobile Number (annexure 'ARS 3.8' to Ms Salsono's affidavit of 19 September 2012; page 136). The application bore a facsimile transmission imprint date of 16 September 2003.

93 Perpetual referred to the inclusion of the Mobile Number in the application for the Lesmurdie Loan in a submission dated 24 September 2012. Ms Buttarelli responded in her affidavit sworn on 12 October 2012 that she had never seen nor 'completed' the application (par 9). She did not explain, however, how the loan for the purchase of the Lesmurdie Property came to be made (Ms Buttarelli did not dispute that the loan had been made and the inference from her affidavit of 28 June 2012 was that the loan had been made with her authority).

94 There were two further aspects of the application for the Lesmurdie Loan that were relevant:

(a) Page 7 of the application was substantially the same as page 7 of the Loan Application except that it carried the '02 Oxygen Fund 2002' logo. Further, page 7 of the Loan Application had a document identity number at the bottom left hand corner that was apparently missing on page 7 of the application for the Lesmurdie Loan. That suggested that page 7 of the Loan Application did come from another application form.

(b) As with the Loan Application, page 1 of the application for the Lesmurdie Loan referred to a discharge authority on page 8. However, page 8 of the application for the Lesmurdie Loan was identical to page 8 of the Loan Application - that is, it did not contain a discharge authority. That suggested that the reference to page 8 at page 1 of the Loan Application was a typographical error in the application forms used by St James and not evidence supporting the assertion that the Loan Application may have been compiled from two or more documents.

The principles relevant to the application Stay of execution/suspension order

95 It was not in issue that the principles relevant to the exercise of the discretion to grant a suspension order under s 15 of the Act are the same as those that govern an application for a stay or execution: Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203 [3] (McLure JA). Accordingly, the applicant for a stay or a suspension order must establish that:

(a) there are special circumstances that justify a departure from the ordinary rule that a successful litigant at first instance is entitled to enforce a judgment pending the determination of any appeal;

(b) a stay/suspension order is necessary to preserve the subject matter or the integrity of the litigation or that any right of appeal would be rendered nugatory if an order is not made;

(c) the applicant has reasonable prospects of succeeding on appeal;

(d) the balance of convenience lies in favour of granting the order.

96 See also Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; 28 WAR 308 [9].

97 Ms Buttarelli, nevertheless, submitted that her application was to be determined according to the test that would apply for an interlocutory injunction: whether there was a serious question to be tried (or a prima face case) that the Judgment had been obtained by fraud and whether the balance of convenience favoured the making of the orders sought. However, such an approach would not fully reflect the fact that Perpetual had the benefit of a judgment that it was entitled to enforce unless special circumstances were demonstrated. The right of the judgment creditor to enforce its judgment is reinforced by the requirements that an order will not be made unless it is necessary to preserve the subject matter of the litigation and the judgment debtor's prospective appeal has reasonable prospects of success. Those requirements reflect, among other things, the public interest in finality in litigation.

98 It was not in issue that an appeal court may set aside a judgment for fraud and order a new trial. However, it is generally preferable for the question of fraud to be tried in a new action: see Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691, 699 (Handley JA). Counsel for Ms Buttarelli eschewed the possibility that his client would apply to the Court of Appeal to set aside the Judgment at one hearing in the application. However, he left open the possibility that she might adopt that course rather than commence a fresh action alleging fraud at a later hearing.

99 Newnes M (as his Honour then was) identified in Ridout v O'Brien [2004] WASC 137 the elements of an action to set aside a judgment for fraud. His Honour concluded from a review of the relevant authorities that:

(a) it was necessary for the applicant to establish that it and the court had been deceived and that the applicant had 'discovered something material in the sense of fresh facts that either in themselves or in combination with previously known facts would prove fraud' since the trial [51];

(b) it followed from the public interest in the finality of litigation that a party could not seek to litigate matters that were the subject of earlier proceedings by relying on evidence which that party had adduced at trial [51].

100 His Honour also quoted from the judgment of Kirby P in Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 539:

In summary, [the applicant] must establish that the case is based on newly discovered facts; that the facts are material and such as to make it reasonably probable that the case will succeed; that they go beyond mere allegations of perjury on the part of witnesses at the trial; and that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud in such a way as to render it inequitable that such party should take advantage of the judgment.

101 Newnes M also referred to the judgment of Thomas JA (with whom De Jersey CJ and McMurdo P agreed) in Johns v Cosgrove [2002] 1 Qd R 57, 92:

... I am inclined to favour the view ... that a residual discretion [to decline to set aside a verdict after proof that it has been obtained by fraud] exists. A tension will always exist between the aversion of courts to fraud in its own process and recognition by courts of the danger of too readily granting a retrial. Some degree of materiality and causation is implied in the requirement that the judgment be 'tainted', 'affected' or 'obtained' by the fraud, and the concept of automatic extinction of a judgment upon an illdefined degree of connection by means of those terms seems too blunt an instrument with which to govern this area. Further, the need for some supervisory discretion on the part of the court seems recognised in Wentworth v Rogers (No 5) where it was stated that it was necessary for the party alleging fraud to show that the other party was 'responsible' for the fraud in such a way as to render it inequitable that such party should take the benefit of the judgment.

102 See also the reasons of the New South Wales Court of Appeal in Spies v Commonwealth Bank of Australia ( 1991) 24 NSWLR 691.

103 It was alleged in Ridout that a bank had obtained a judgment that was tainted by fraud as, among other things, someone on behalf of the bank had fraudulently altered a mortgage following its execution. The evidence was that Ms Dorothy Ridout had signed the mortgage on behalf of the plaintiff company. She stated in an affidavit made in support of the application that it was only after the trial that she had realised that the mortgage that had been tendered at trial had been altered after it had been signed. Newnes M concluded [59] [60]:

To set aside a judgment on the ground that it has been obtained by fraud is a drastic step. Fraud is a grave allegation and is not likely to be entertained. In an action of this kind, both the nature of the allegation and the public interest in the finality of litigation require that it be based on substantial grounds. In this case, nothing has emerged since the trial apart from Dorothy Ridout's recent, unsatisfactorily explained 'realisation' that, when she signed it, the mortgage was in its original, unaltered form rather than the amended form tendered at the trial.

104 There are authorities to the effect that a plaintiff who seeks to set aside a judgment for fraud must show that not just that there is fresh evidence establishing the fraud but that it could not have discovered that evidence prior to the judgment by exercising reasonable diligence: Owens Bank Ltd v Bracco [1992] 2 AC 443; Owens Bank Ltd v Etoile Commerciale SA [1995] 1 WLR 44; Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (No 2) [1992] FCA 367; (1992) 37 FCR 234 and Bourke v Beneficial Finance Corporation Ltd (1993) 47 FCR 264. Those authorities were considered by Handley JA (with whom Heydon and Hodgson JJA agreed) in Toubia v Schwenke [2002] NSWCA 34; 54 NSWLR 46. His Honour concluded that observations in those cases to the effect that the fraud must be proved by fresh evidence that was not available and could not have been discovered by reasonable diligence were obiter, did not reflect earlier authorities or what, as a matter of principle, a plaintiff must prove in an action in equity for fraud and, in any event, the issue had been 'foreclosed' by the decision of the High Court in McDonald v McDonald [1965] HCA 45; (1965) 113 CLR 529. The High Court drew a distinction in McDonald v McDonald between applications to set aside a judgment for fresh evidence and for fraud. It was only in the former instance that the applicant was required to show that the fresh evidence could not be found with reasonable diligence prior to the judgment. Handley JA concluded that the correct principle was that:

[i]n an action for fraud, a plaintiff must prove that he was deceived but need not prove that he was diligent. Where the action seeks the judicial rescission of a judgment, the plaintiff must prove that he and the Court were deceived and he can only do this by showing that he has discovered the truth since the trial. Where this is done, and the fresh facts are material, fraud is established [41]

105 See also Re Michelides; ex parte Chin [2008] WASC 256 in which Hasluck J accepted that there was no requirement for the applicant for a new trial on the ground of fraud to demonstrate that the fresh evidence on which they relied was not available at the trial or could have been obtained by using reasonable diligence [122]. That is the approach that I have adopted.

106 As the Queensland Court of Appeal indicated in Johns v Cosgrave, Ms Buttarelli was required to show that Perpetual was 'responsible' for the fraud alleged. As I understood his submissions, counsel for Ms Buttarelli argued this part of the application in two ways. First, it was said that Perpetual was a knowing participant in a fraud committed by Mr Esposito and St James; second, that Mr Esposito and St James were the agents of Perpetual and their knowledge of the facts constituting the alleged fraud was to be imputed to Perpetual.

107 The assertion that Ms Buttarelli possessed a claim against Perpetual as a knowing participant in a breach of fiduciary duty necessarily assumed that Mr Esposito and St James were her agents and as such, were in a fiduciary relationship with her. There was, however, only limited evidence concerning the relationship between Ms Buttarelli and Mr Esposito and/or St James whatever inferences might be drawn from the Loan Application and Ms Buttarelli's evidence to the effect that she relied on Mr Esposito for financial advice in her property dealings and funding requirements.

108 The High Court in Farah Constructions Pty Ltd v SayDee Pty Ltd [2007] HCA 22; 230 CLR 89 accepted that the first four of the five categories of knowledge agreed between counsel in Baden v Socéité Générale pour Favoriser le Développement du Commerce et de L'Industrie en France SA (note) [1993] 1 WLR 509; [1992] 4 All ER 161 were sufficient to hold a defendant liable in equity for knowingly assisting in a breach of trust or fiduciary duty [176] [177]. Those categories were actual knowledge; wilfully shutting one's eyes to the obvious; wilfully and recklessly failing to make such enquiries as an honest and reasonable person would make; and knowledge of circumstances that would indicate the facts to an honest and reasonable person.

109 Farah Constructions concerned allegations of knowing assistance. However, there is appellate authority that is binding on a judge at first instance that the first four Baden categories also apply to a claim for knowing receipt: see Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 [268] - [270].

110 The relationship between a lender and a mortgage originator was considered by the New South Wales Court of Appeal in Tonto Homes Loans Australia Pty Ltd v Tavares [2011] NSWCA 389. Allsop P (with whom Bathurst J and Campbell JA agreed) noted that:

(a) Not every independent contractor performing a task for, or for the benefit of, a party will be an agent and so identified as it, or as representing it, and its interests. Agency is a consensual relationship generally bearing a fiduciary character, in which, by its terms, the agent acts on behalf of, and in the interests of, the principal and with the necessary degree of control required for the purpose of the role. Central is the conception of identity or representation of the principal [177].

(b) Generally, an agent will act in circumstances where it is required or is under a duty not to act otherwise than in the interests of the principal in the performance of the consensual arrangement [177].

(c) A 'canvassing' or 'introducing agent' is 'on the fringe of the central agency principles used by the common law, since their powers to alter their principal's legal relations are at best extremely limited'. An 'introducing agent' will, however, often have authority to receive and communicate information on their principal's behalf and in doing so, will have the capacity to alter their principal's legal position [178] (his Honour citing from P Watts and FMB Reynolds, Bowstead and Reynolds on Agency (19th ed, 2010) [1019]).

111 The issue in Tonto Homes was whether knowledge acquired by a mortgage originator could be imputed to the credit provider. Accordingly, Allsop P reviewed the agreement between the mortgage originator and the credit provider to ascertain whether the originator had agreed to receive and communicate information and otherwise act on behalf of the credit provider in a capacity that had the necessary character of an agency relationship. He concluded that the agreement did not require the mortgage originator to represent the credit provider. Rather, the originator was canvassing for itself and it did not hold itself out as working for or as being in some way connected with the creditor provider or the relevant loan programme. The fact that the credit provider had left to the mortgage originator the task of interviewing prospective borrowers and collecting and submitting relevant information did not make the originator the agent of the credit provider. The trial judge's conclusion that an agency relationship existed had elevated 'the organisation or enterprise structure of the relevant business and activity as a key factor in determining agency' and deflected attention from the 'correct task ascertainment of the legal content of a consensual agreement between the parties' [192]. Further, the trial judge's finding failed to place the agreement between the parties in its proper commercial context:

It was an agreement between two entities each of which had its own business. One was to endeavour to introduce business from its own customer base for the mutual commercial advantage of both [193].

112 Accordingly, Allsop P concluded, 'Agency is to be determined by an analysis of the consensual legal relations between the parties, it is not merely a conclusion drawn from the performance by A of a function important, even necessary, to the operation or functioning of the business enterprise of P in question' [194].

113 There was no evidence of the agreement, if any, between Perpetual and St James, apart from the very limited evidence given by Mr Edwards that St James managed the day-to-day administration of the loans made to Ms Buttarelli and the Perpetual mortgage. No application was made in the course of the various hearings for Perpetual to produce any agreement relating to its relationship with St James. Accordingly, there was little evidence in the application that would enable a finding to be made about the nature of the relationship between Perpetual and St James the analysis of the consensual relationship to which Allsop P referred in Tonto Homes could not be undertaken.

114 Finally, I note also that there was no evidence of the relationship between Mr Esposito and St James. It was not clear whether Mr Esposito was an employee of St James or that he operated under some other commercial arrangement that might or might not constitute him an agent of St James.

Findings Special circumstances/preservation of the subject matter and the balance of convenience

115 I accept that Ms Buttarelli would be entitled to a stay or suspension order if she could establish that she has reasonable prospects of setting aside the Judgment. The effect of the Judgment is to require Ms Buttarelli to give vacant possession of her residence to enable Perpetual to realise on its security (contrast Raysun Investments Pty Ltd v Caruso [2013] WASCA 13). Further, a finding that she had reasonable prospects of setting aside the Judgment would necessarily entail preliminary findings on the possibility that the Judgment was tainted with a fraud in which Perpetual was implicated. Those considerations would satisfy the remaining requirements for a stay or suspension order if it was found that Ms Buttarelli had reasonable prospects of setting aside the Judgment.

The primary finding - no reasonable prospects of setting aside the Judgment

116 In my view, Ms Buttarelli has not demonstrated that she has reasonable prospects of establishing that the Judgment was tainted by fraud; alternatively, that Perpetual was 'responsible' for any fraud that may have occurred so that it would be inequitable for it to take the benefit of the Judgment.

117 There were numerous matters raised in the course of the application that each party relied on as inferentially supporting their position. It is convenient to separately consider the most significant of those matters and their implications for the ultimate issue to be determined.

118 As explained in the earlier section of the reasons on Perpetual's knowledge, there was little evidence about the relationship between St James and Perpetual. In my view, Ms Buttarelli has not established that St James or Mr Esposito was the agent of Perpetual in dealing with Ms Buttarelli having regard to the principles considered in that section.

119 Consequently, Ms Buttarelli must establish that Perpetual was a knowing participant in a fraud committed by St James or Mr Esposito according to the Baden categories of knowledge or that it was the principal in a fraud committed on Ms Buttarelli.

120 Ms Buttarelli alleged that Perpetual had not, in fact, made Perpetual loan 81721951. She relied on the letter dated 26 February 2004 from St James (annexure 'VP 9' to Ms Buttarelli's affidavit made on 28 June 2012) as evidence that only one loan had been made. The letter commenced, 'I refer to our discussions of even date ... and list hereafter the status of your loans with UBS Home Loans'. The letter then referred to a loan under the heading 'Adelaide Bank' and two loans under the heading 'Macquarie Bank' - Perpetual loan 60126261 and the Lesmurdie Loan. Ms Buttarelli contended that the letter listed all of the loans made by 'UBS Home Loans' and, therefore, that Perpetual loan 81721951 had not been made. However:

(a) The letter did not refer to the loan secured by the mortgage granted to St George Bank in April 2002. Ms Buttarelli did not deny that she had borrowed from St George Bank or that the loan had been made through St James (formerly UBS Home Loans). The St George Bank mortgage was not discharged until January 2006 using the funds advanced by Liberty Funding. It follows that the letter of 26 February 2004 did not refer to all of the loans made through St James.

(b) The letter was concerned with dishonoured direct debits. The statements for Perpetual loans 60126261 and 81721951 attached to Ms Chetty's affidavit of 22 July 2010 recorded a direct debit dishonour for Perpetual loan 60126261 on 4 February 2004 but no default on Perpetual loan 81721951 around that date. That would appear to explain why Perpetual loan 81721951 was not referred to in the letter.

121 Similarly, she claimed that account statements for Perpetual loan 81721951 were not sent to her but there was no evidence to suggest that the statements produced by Ms Chetty were false. They disclosed that there were occasions when there had been insufficient funds to meet an instalment by direct debit for Perpetual loan account 81721951 but funds had then been provided to enable the instalment to be paid.

122 The fact that Perpetual loan 81721951 was made was also evidenced by the discharge of the Perpetual Trustees Victoria Mortgage over the Bedford Property at the same time as the Perpetual Mortgage was registered and the advice given by Mony de Kerloy to St James about the settlement of the Loan Contract. Each of those matters is further considered below but I am satisfied that they confirm Ms Chetty's evidence regarding the Loan Contract and the making of Perpetual loan 81721951.

123 The evidence relating to the application of the sale proceeds from the Port Kennedy Property and the repayment of the loans made by Perpetual Trustees Victoria to Ms Buttarelli has been considered earlier in the reasons. I am satisfied by that evidence that Ms Buttarelli has not demonstrated that there was any fraud in the operation of the loan accounts by Perpetual pursuant to the Loan Contract. In particular, she has not established that Perpetual received more than it was entitled to receive from the sale of the Port Kennedy Property or that it has failed to account for the funds received and how they were applied. I am satisfied that the funds advanced by Perpetual loan 81721951 were applied to repay one of the two loans that had been made by Perpetual Trustees Victoria to Ms Buttarelli. That is consistent with the settlement advice provided by Mony de Kerloy to St James.

124 It follows that the remaining issues are whether Ms Buttarelli has established that the making of the Loan Contract was tainted by fraud and if so, whether Perpetual was a knowing participant in the fraud. Several matters are relevant to Ms Buttarelli's allegation that the Loan Application was a false document.

The course of dealing with Ms Buttarelli's properties

125 Title searches of Ms Buttarelli's properties by a potential lender such as Perpetual would not have disclosed any apparent irregularity that might have suggested the pattern of unauthorised lending that Ms Buttarelli alleged. Rather, the searches would have disclosed that apparently Ms Buttarelli had been able to obtain finance to acquire properties or to refinance borrowings. That would have suggested that she had been able to service borrowings and had substantially complied with the terms of previous loans. Indeed, an odd aspect of Ms Buttarelli's allegations was that there was no explanation for how instalments had been paid on loans that Ms Buttarelli claimed that she did not know about and had not authorised. She referred to the payments being made by direct debit but she must have surely noted that funds were being periodically debited from her bank account for loans that she alleged she had not authorised and which constituted part of a sequence of loans relating to money that had been repaid (to Town & Country) some time earlier.

126 The possibility of fraud could not be inferred from the fact that mortgages apparently granted to secure one loan were registered over more than one property. That is a common lending practice. The use of all moneys mortgages is also a common practice. The allegations concerning the 'cross-collateralisation' of securities did not disclose a fraud.

(a) the course of dealing summarised in the Dealing Schedules did not support Ms Buttarelli's allegations of fraud;

(b) in any event, Perpetual was not involved in that course of dealing prior to the making of the Perpetual loans;

(c) there was nothing in the course of dealing that would have alerted a reasonable and prudent lender in the position of Perpetual that there may have been past fraudulent transactions involving St James or any of its employees or agents and Ms Buttarelli.

128 The letter dated 9 October 2002 from Ms Buttarelli to St James was obviously consistent with the Loan Application. The only unexplained matter was why the whole of the borrowings from Perpetual Trustees Victoria were not refinanced. However, no inference can be drawn from that matter in the absence of further evidence.

129 The facsimile transmitted by Mony de Kerloy on 26 February 2003 to Macquarie Securitisation and Perpetual was significant for two reasons:

(a) It referred to the loan account numbers for Perpetual loans 60126261 and 81721951. That indicated that Perpetual must have received a loan application from St James that had requested that two loan accounts be established. It is, of course, possible that the loan application that Perpetual received falsely represented that Ms Buttarelli wished to borrow $310,000. However, the Loan Application must have been created some time after April 2005 according to Ms Buttarelli. If Perpetual was prepared to rely on a fraudulent loan application to obtain the Judgment, why would it produce a false application created some time after April 2005 rather than the application that it had received in January 2003? (The Loan Application did bear a facsimile transmission imprint suggesting that it was transmitted on 31 January 2003.)

(b) Ms Buttarelli maintained that she had not signed the Perpetual Mortgage and did not know that a mortgage had been registered against the Bedford Property. However, the facsimile contained details of insurance policies effected over the Bedford Property and the Port Kennedy Property. That was apparently consistent with the requirement that policies noting Perpetual's interests in the properties be obtained by Ms Buttarelli prior to settlement. Accordingly, the facsimile would suggest that Ms Buttarelli must have known that Perpetual intended to register the Perpetual Mortgage over the Bedford Property as well as the Port Kennedy Property. It is possible that St James provided false insurance details to Mony de Kerloy as part of the fraud alleged by Ms Buttarelli. However, that would merely demonstrate that a false representation had been made to Perpetual; that is, that Perpetual was a victim of the alleged fraud rather than complicit in its commission.

130 It is likewise possible that the solicitor's certificate provided by Mony de Kerloy was based on false documents supplied by St James. However, that would again merely indicate that Perpetual was a target of the fraud rather a knowing participant or perpetrator.

131 The other document generated by Mony de Kerloy that was significant was the letter advising St James of the settlement on the Loan Contract. The letter stated that Ms Buttarelli received approximately $33,000 at settlement. The receipt of that amount of money would be inconsistent with Ms Buttarelli's assertion that she had only authorised and known about a loan for the purpose of acquiring the Port Kennedy Property. Ms Buttarelli challenged the authenticity of the documents provided by Mony de Kerloy to Perpetual's current solicitors but I can see no reason why the letter advising on the settlement should not be accepted as genuine and accurate. The fact that a conveyancing file was maintained in electronic form was unremarkable.

132 There were aspects of Ms Buttarelli's dealings with Perpetual's solicitors after Perpetual commenced these proceedings that I found surprising. First, she did not make any allegation of fraud. Second, the effect of Ms Bryne's affidavit and the file note of her conversation with Ms Buttarelli on 17 September 2008 was that Ms Buttarelli knew that she had two loan accounts prior to speaking to Ms Bryne. To place weight on that evidence may be to read too much into the affidavit and file note for the purpose of an interlocutory application but it was surprising that Ms Buttarelli did not protest that she had not known of or authorised the making of two loans.

133 Ms Buttarelli explained that her response to Perpetual's claim for judgment on the Loan Contract and vacant possession of Bedford Property was conditioned by her fear of losing the property. However, she did not deny that she had endeavoured to sell the Bedford Property to meet the debt claimed by Perpetual. It might be possible to reconcile those matters but the fact that she felt compelled to sell the residence that she did not wish to lose makes it more difficult to understand why Ms Buttarelli would have not asserted that she did not owe the amount claimed by Perpetual - and in particular, that she was a victim of a fraud.

134 Although it is not easy to assess such matters in an interlocutory application, I consider that some weight should be attached to Ms Buttarelli's response to Perpetual's claim when determining whether she has discharged the onus of establishing that she has reasonable prospects of setting aside the Judgment.

135 The evidence regarding the inclusion of the Mobile Number in the Loan Application was difficult to assess in the context of an interlocutory application. The evidence of Ms Buttarelli and Ms Bolton regarding when the number was first made available was apparently contradicted by the fact that the Loan Application and the application for the Lesmurdie Loan were seemingly transmitted by facsimile in 2003. The difficulty in reconciling the evidence on an interlocutory application meant that a positive inference could not be drawn in Ms Buttarelli's favour from the allegations that were made about the inclusion of the Mobile Number in the Loan Application.

136 I find for the purpose of this application that:

(a) Ms Buttarelli has established that the Loan Application comprises a compilation of two documents - in particular, that the page marked 7 in hand came from a different document to the remainder of the Loan Application. However, that was not sufficient, in my view to establish that the application was a false document in the sense that Ms Buttarelli alleged.

(b) Ms Buttarelli has not demonstrated that she has reasonable prospects of establishing that her signature to the application has been forged and/or that the Loan Application was fraudulent.

137 Mr Horton's views on whether Ms Buttarelli's signature on the Loan Application was a forgery were qualified; he stated only that her signature might have been forged. The inferences to be drawn from the various matters that have been identified in this section of the reasons must be weighed against that evidence and Ms Buttarelli's denial that she signed the Loan Application or authorised an approach to be made to Perpetual for a loan in the terms contained in the application. In my view, Ms Buttarelli has failed to demonstrate that she has reasonable prospects of establishing that the Loan Application was fraudulently prepared and that she did not authorise an application to be made to Perpetual to borrow $310,000 for the purposes stated in the application when all of the evidence that has been adduced is assessed.

138 Further, I do not consider that Ms Buttarelli has reasonable prospects of establishing that Perpetual knew that the Loan Application had been fraudulently prepared if that is what had occurred. It was not obvious that the Loan Application was a false document containing a forged signature (Baden category 2) or that there was anything about the application or the circumstances in which it was submitted that would require a reasonable person to enquire (Baden category 3; and it must remembered that a negligent failure to enquire is insufficient the failure to enquire must be wilful and reckless). There were no circumstances known to Perpetual that would indicate to an honest and reasonable lender that the Loan Application was a false document and that Ms Buttarelli's signature had been forged (Baden category 4).

139 There was also no evidence that Perpetual committed a fraud on Ms Buttarelli in the making of the Loan Contract as the principal rather than as a participant in a fraud allegedly perpetrated by others.