Tobaji and Anor v National Australia Bank Limited

Tobaji and Anor v National Australia Bank Limited - [2009] NSWSC 41 - NSWSC 2008 case summary — Zoe

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The 21 May 2004 Application to HomeSide 36 Wally Estephan prepared a mortgage application to be submitted to HomeSide Lending ("HomeSide"). HomeSide is a division of the Defendant. At all relevant times, it dealt directly with mortgage brokers. All loan applications were received from brokers and not applicants or customers directly. 37 On 21 May 2004, Wally Estephan sent a facsimile to the Broker Support Team of HomeSide, attaching the mortgage application by the Plaintiffs. The facsimile was sent on the letterhead of First Stop Mortgages, Suite 1, Level 1, 29 Grose Street, Parramatta. The transmittal sheet stated (Exhibit 1, page 103): "Dear Team, Following is a new application for Mr/Mrs Tobaji. Applicant has a current loan with NAB, and he wants to refinance it. Also get a peak performance for $322,000.00. Yours faithfully, Wally Estephan First Stop Mortgages" 38 Accompanying the facsimile of 21 May 2004 was a mortgage application to HomeSide completed on behalf of the Plaintiffs (Exhibit 1, page 104ff). I infer that the application was filled in by Wally Estephan. Each of the Plaintiffs admits signing the application. 39 The application sought a Plain and Simple Home Loan in the sum of $128,000.00 and a Peak Performance Equity Mortgage in the sum of $322,000.00. The sum of $128,000.00 was sought to refinance an existing loan and the sum of $322,000.00 as "equity/other investment". The total sum sought was $450,000.00. 40 The application stated that Mr Tobaji had been employed since 10 June 1999 as a foreman at RSS Formwork Pty Limited at 4/42 Highclere Avenue, Punchbowl. This was the business conducted by Sassine Bou Francis. According to the application, Mrs Tobaji had been employed since 15 July 2003 as a kitchen hand at La Luna Lounge at 178 Eldridge Road, Bankstown. The statement of assets and liabilities stated that the Punchbowl property had a present value of $600,000.00 and that $85,000.00 was money lent to the Plaintiffs' children. A 2003 Ford vehicle worth $44,000.00 was also disclosed as an asset. The liabilities column revealed the existing debt of $128,000.00 to the Defendant by way of mortgage over the Punchbowl property. 41 The application stated that Mr Tobaji had a gross annual income of $106,000.00 and a nett monthly income of $5,693.99. Mrs Tobaji was said to have a gross annual income of $10,400.00 with a nett monthly income of $758.33 (Exhibit 1, page 108). 42 Mr Tobaji's mobile phone number was provided as a point of contact to enable access for the purpose of valuation (Exhibit 1, page 110). 43 The name, address and telephone number of George Tobaji, the Plaintiffs' son, was provided by way of details of "nearest relative not living with you" (Exhibit 1, page 111). 44 A "100 point check" was completed with respect to Mr Tobaji for the purposes of the Financial Transaction Reports Act 1988 (Cth), with the requirement being satisfied by Mr Tobaji being a customer of the Defendant of at least 12 months' standing together with provision of a copy of his driver's licence, Medicare card and a council rates' notice. Mr Tobaji signed this document on 19 May 2004 (Exhibit 1, page 113). A "100 point check" form was also completed with Mrs Tobaji and was signed by her on 19 May 2004 (Exhibit 1, page 115). 45 Each Plaintiff signed a discharge authority on 19 May 2004 for the purpose of discharging the existing mortgage to the Defendant (Exhibit 1, page 116). Each of the Plaintiffs signed, on 19 May 2004, a Customer's Acknowledgement and Consent for Wally Estephan, as their mortgage broker, to make the loan application on their behalf (Exhibit 1, page 117). Each Plaintiff signed a declaration on 19 May 2004 concerning the completeness and accuracy of the information supplied in support of the loan application (Exhibit 1, page 122). 46 A HomeSide Serviceability Assessment Calculator was included with the application, which produced various calculations using the information concerning the value of the Punchbowl property, the Plaintiffs' income and liabilities. I infer that this document was prepared by Wally Estephan utilising a calculator apparently available on the HomeSide website (Exhibit 1, page 129). 47 Uncontroversial documents which accompanied the application were the following:

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(e) copy of the loan account summary for the Plaintiffs and Sassine Bou Francis for the mortgage account arising from the 2001 mortgage, revealing payments made under the mortgage between March and September 2002 and September 2003 to March 2004 (Exhibit 1, pages 137-139). 48 It may readily be inferred that the documents listed in the preceding paragraph were supplied by the Plaintiffs to Wally Estephan for the purpose of the loan application. 49 The Plaintiffs gave evidence that they had no knowledge of certain documents provided to the Defendant in support of the application and that the contents of these documents were false. These documents related to the employment and income of each Plaintiff. 50 A document purporting to be on the letterhead of RSS Formwork Pty Limited dated 17 May 2004, and purportedly signed by Sassine Bou Francis, certified the employment of Antoine Tobaji in the following terms: "To Whom It May Concern This letter is verification that Antoine Tobaji has been employed by RSS Formwork Pty Limited for the past five years. Antoine is the company's head foreman and is on a gross weekly wage of $2,038.46. If you have any further questions please contact me." 51 The letter contained the correct address, telephone and facsimile numbers for that business and the correct ABN. It was the fact that Mr Bou Francis (the son-in-law of the Plaintiffs) conducted such a business at that time. It was his evidence that the document was a forgery and that the letterhead was not the form of letterhead being used by him at that time, although the details contained in it were correct. I will return to this issue later in the judgment. Also accompanying the application were two pay advice documents purporting to record the employment of Antoine Tobaji in May 2004 with "RSS Formworks Pty Ltd" (Exhibit 1, pages 133-134). 52 In support of the application was a letter purporting to be from Jodie Maroun-Moeratea dated 19 May 2004 certifying the employment of Mary Tobaji, for the previous 12 months, at La Luna Lounge at Bankstown (Exhibit 1, page 135). Mrs Tobaji gave evidence that she had never worked at this establishment. No evidence was adduced at the hearing which shed light on the existence of such a business, nor the accuracy or otherwise of the address and other information provided on the letterhead.

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Consideration by HomeSide of 21 May 2004 Application 53 In May 2004, George Caratzas worked as an Applications Co-Ordinator with HomeSide. Upon receipt of the loan application dated 21 May 2004 from Wally Estephan, Mr Caratzas carried out a servicing calculation to ensure that the Plaintiffs were able to meet the loans they were requesting. For this purpose, he used the income details contained in the supporting employment and financial documents provided with the loan application (that is, the pay slips concerning Mr Tobaji and the letter of employment concerning Mrs Tobaji) rather than the figures contained in the loan application document which was provided by the broker. Mr Caratzas said that this was to ensure that the figures used were accurate. He was satisfied that the income details were the same. With respect to Mrs Tobaji's employment at the La Luna Lounge (where allegedly she earned a gross income of $200.00 per week), Mr Caratzas observed that a copy of her Commonwealth Bank passbook showed regular deposits being made into that account in excess of $300.00 per deposit. 54 Mr Caratzas stated that it is not standard practice to conduct business or company searches to verify employer details, unless the applicant is self-employed. He said that it is not necessary to conduct such searches or further investigations, particularly if the applicants have provided other financial source documents that verified the information contained in the employment letters, as is the case with the Plaintiffs' application. 55 Mr Caratzas arranged for a valuation of the Punchbowl property to be carried out as soon as the loan application was received, this being a standard practice with all applications. On 25 May 2004, Scott Adams, valuer, conducted a residential kerbside inspection of the Punchbowl property, giving an estimate of market value of $550,000.00 (Exhibit 1, page 151). Mr Adams undertook an external inspection only and recorded that "the property appears to be of neat presentation and to have been extensively renovated in recent years". 56 Mr Caratzas states that he reviewed the loan application to make sure that all signatures for Mr and Mrs Tobaji were consistent and that all supporting documents, such as bank statements, were properly aligned and did not appear to have been tampered with. They appeared to be legitimate. He did not see anything in the loan application, or supporting documents, that aroused his suspicions that the application or information contained in it was not genuine (affidavit, 13 December 2007, paragraph 18). As the documents all appeared to be legitimate, Mr Caratzas did not see any reason not to take the application, and information contained in it, at face value. He saw no reason to further investigate the application or question the documents that had been provided to him. On the information provided with the loan application, Mr Caratzas considered the Plaintiffs to be strong applicants, particularly on the basis of Mr Tobaji's employment and income status.

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The 26 May 2004 Supplementary Material Provided to HomeSide 57 Prior to 26 May 2004, Mr Caratzas had completed a Decision Tools Approval Checklist (Exhibit 1, page 146). This document contained a notation that a tax assessment or group certificate was required in connection with the application. I infer that a request for such a document was conveyed to Wally Estephan. 58 Wally Estephan was informed of the valuation which came in $50,000.00 below the estimate provided in the Plaintiff's application. On 26 May 2004, Wally Estephan sent a further facsimile to HomeSide, the transmittal sheet of which contained the following (Exhibit 1, page 140): "We have received advice of the low valuation. Applicant is happy to proceed with a unchanged [sic] refinance of his $128,000.00 and the line of credit at $312,000.00 as an 80% lend. Following is a copy of the Antoine Tobaji's group certificate. If you require anything further please advise." 59 Accompanying the facsimile was a PAYG payment summary for the year ending 30 June 2003, containing details of Antoine Tobaji's employment with RSS Formwork Pty Limited with a stated gross annual income between 1 July 2002 and 30 June 2003 of $105,842.00. Contained within the "signature of authorised person" field appeared (in print) "S Bou Francis" and the date "1 July 2003". The PAYG payment summary contained accurate address and contact particulars for both RSS Formwork Pty Limited and Mr Tobaji. 60 Mr Caratzas stated that the Plaintiffs had decreased the amounts they were requesting under the Peak Performance Loan, because the valuation on the security property was lower than expected, and HomeSide would not lend them the combined loan total of $450,000.00 they had initially requested. They requested that HomeSide proceed with a combined loan total of $440,000.00. Mr Caratzas observed that a copy of Mr Tobaji's group certificate was required under the conditional loan approval. He could not recall exactly why Mrs Tobaji's group certificate was not required, however, on review of the documents, he believed that it would have been because Mr Tobaji's stated income alone was sufficient to service the loan in any event. He explained that if one applicant has a sufficiently strong income position, and provided all applicants have supplied sound letters of employment and other records to confirm their employment and income position, group certificate or tax assessment notices are not always required for all applicants (Caratzas affidavit, 13 December 2007, paragraphs 27-28).

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The Plaintiffs' Application is Approved 61 Jazz Nevill worked as a Documents Co-Ordinator at HomeSide in 2004. This role essentially required him to receive loan application forms and supporting documents and to prepare the relevant loan documentation to send to customers. Mr Nevill explained his role in the 2004 loan to the Plaintiffs. He explained the procedure if an applicant for a loan from HomeSide was an existing customer of the Defendant. If an existing customer sought to refinance an existing loan with the Defendant and was applying for a new loan with HomeSide, their application is treated in the same way that it would be if they were refinancing the loan with any other financial institution. The loan application form would state that they have an existing loan with the Defendant, that HomeSide was not provided with a copy of the previous bank loan application or file, nor was it the usual practice of HomeSide to request a customer's previous bank file. He explained that this was because HomeSide operated as an independent division of the Defendant. All customers and files were maintained separately and the Defendant and HomeSide offered different products. If the customers had provided all required documentation and information to support their new application with HomeSide, there was no reason to request a previous bank file of the Defendant (Nevill affidavit, 13 December 2007, paragraph 11). 62 Mr Nevill stated that, once he had prepared the loan documentation, he was required to attempt to contact the customers by telephone in order to confirm that the formal information on the loan application was correct. This was referred to as the "interview" stage. In 2004, Mr Nevill stated that document co-ordinators were required to attempt to contact the customers directly to confirm these details. However, if they were not able to make contact after approximately three attempts, and the customer had a broker, it was standard procedure for all document co-ordinators at HomeSide to call the customer's broker to confirm the details. 63 By reference to contemporaneous records, Mr Nevill noted that he had contacted Wally Estephan on 31 May 2004. He recalled that he had spoken only once to Wally Estephan. He stated that his practice would have been to contact him directly only if he had been unable to contact Mr or Mrs Tobaji directly to confirm the loan details. Mr Nevill did not specifically recall his conversation with Wally Estephan, however, he believed he would have informed Wally Estephan that he was unable to make contact with either of the Plaintiffs and needed to confirm the loan details with him before sending the loan documentation to them. I accept Mr Nevill's evidence to this effect.

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The Evidence of Gina Assimakis 75 The Defendant called Gina Assimakis as a witness. Ms Assimakis has been employed since 2002 in the HomeSide division of the Defendant. She played no part in the assessment and approval process concerning the 2004 loan to the Plaintiffs. However, she examined the HomeSide lending file for the Plaintiffs and gave evidence with respect to the process followed. Ms Assimakis said that, as at May 2004, approximately 50 new loan applications were received by HomeSide from brokers every day (Assimakis affidavit, 13 December 2008, paragraph 18), 76 Ms Assimakis explained HomeSide's policy concerning verification of employment information and stated that the information provided with the Plaintiffs' application from employers together with the payslips, group certificates and Commonwealth Bank passbook records appeared to correlate with information contained in the loan application (Assimakis affidavit, 13 December 2007, paragraphs 15-17). Ms Assimakis stated that the Plaintiffs' bank account statements provided as part of the application showed a history of the Plaintiffs servicing their 2001 mortgage without default. Ms Assimakis concluded that, on the face of the loan application and supporting documents, "the application was straightforward and there was no reason to make further inquiries before the application was approved in the usual manner" (Assimakis affidavit, 13 December 2007, paragraph 21). 77 Ms Assimakis confirmed that the Defendant used HomeSide to do business with customers via brokers (T245). The broker was paid an upfront commission by the Defendant and also a trail on the life of the loan depending on the balance (T245-246). The upfront commission payable in relation to the Peak Performance equity loan was 0.65% of the loan amount (T246). 78 Ms Assimakis confirmed that HomeSide officers had access to the Defendant's database for customers (T249-250). She confirmed that a staff briefing note (Exhibit C) required the Applications Co-Ordinator, amongst other things, to see if the applicant had an existing profile with the Defendant and, if so, to print it off and include it on the paper file for the loan application (T250). Ms Assimakis was cross-examined concerning a computer printout headed "3200 Personal Summary" for Mr Antoine Tobaji (Exhibit A, page 552; T251ff). Given the submissions made on this topic, I will set out portions of the evidence of Ms Assimakis on this issue. Ms Assimakis was asked (T251-252): "Q. Do you see that's a document headed 3200 personal summary? A. Yes.

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Did Mr Lahood Witness the Plaintiffs' Signature on the Caveat ? 100 In an affidavit sworn 12 November 2008, Mr Lahood said that he did not sign the caveat and he did not know how or when the caveat was brought into existence (paragraphs 3-6). He said that he first became aware of the caveat when it was shown to him by the Plaintiffs in about February 2006. He said that he had informed the Law Society of New South Wales ("Law Society") in about late February 2006 of the caveat and the fact that the signature was not his (paragraph 10). Mr Lahood stated that he had sought and obtained advice from counsel and had come to the view that the caveat was not material to the present proceedings (paragraphs 11-12). 101 There are a number of troubling features in Mr Lahood's evidence. 102 Mr Lahood stated that he had informed the Law Society of the existence of the caveat bearing, on his account, a forgery of his signature (T159). He produced a file copy of a letter dated 25 February 2006 which he said reflected the letter sent by him (Exhibit 7). I observe that 25 February 2006 was a Saturday. The letterhead on Exhibit 7 states "Principal: James J Lahood" and "Senior Associate: Elias S Yamine". The letter is in the following terms: "Law Society of NSW DX 362 SYDNEY Dear Sirs Re: False Signature of James Joseph Lahood We advise that we have been provided with a caveat purportedly witnessed by the writer. We feel it prudent to advise the law society that the writer did not execute this document, a copy of which we enclose for your information. Should you have any queries please do not hesitate in contacting the writer. Yours faithfully James Lahood & Associates Per: James J Lahood Solicitor …" 103 Mr Lahood said he did not receive a reply to this letter (T160). The Defendant caused a subpoena to issue to the Law Society seeking production of the letter dated 25 February 2006 from Mr Lahood (Exhibit 5). Ms Lucy Pang, a solicitor employed in the Corporate Legal Department of the Law Society appeared in answer to the subpoena and gave evidence that, after all appropriate enquiries had been made, the letter had not been located and there was nothing on the Law Society's tracking system that revealed that the letter of 25 February 2006 had been received (T279-287). 104 A further difficulty for Mr Lahood arises from correspondence between the solicitors for the Defendant and his firm earlier this year. On 26 March 2008, a subpoena issued directed to Mr Lahood seeking production, amongst other things, of the caveat for the Caringbah property, described in the subpoena as the caveat "to which is subscribed the statutory declaration of the plaintiffs, witnessed by you". Following service of the subpoena, Mr Lahood corresponded with the Defendant's solicitors (Exhibit 4). Mr Lahood signed a series of letters directed to the Defendant's solicitors in this context, dated 3, 10 and 11 April 2008 and 7 July 2008, none of which asserted that Mr Lahood had not witnessed the Plaintiffs' signature on the caveat, let alone that the signature was a forgery. Other letters dated 24 April 2008 and 24 July 2008 signed by other persons within Mr Lahood's office did not contend that Mr Lahood's signature on the caveat was a forgery (Exhibit 4). 105 During his evidence, Mr Lahood stated that he had contacted the Land Titles Office and advised them of what he had discovered concerning the caveat (T182.2). A subpoena issued to the Proper Officer of the Department of Lands seeking a copy of any letter, telephone or file notes or any other records of any communication by Mr Lahood concerning the caveat or authorship or forgery of the signature of Mr Lahood on the statutory declaration appended to the caveat (Exhibit 6). In response to the subpoena, Joseph Steyns, a Public Enquiry Officer and Courts Officer with the Department of Lands, appeared and said that, after appropriate enquiries had been made, no record had been located of any contact by Mr Lahood concerning the caveat (T293-294). 106 A further issue raised with Mr Lahood concerned the description of Mr Yamine as a "Senior Associate" in the letterhead of the letter bearing the date 25 February 2006 (Exhibit 7). A series of letters from Mr Yamine, as a solicitor in Mr Lahood's office, sent to the Defendant's solicitors with respect to the present litigation, were tendered (Exhibit 8). The point of the tender was that Mr Yamine was described in the letterhead as an "Associate" and not a "Senior Associate" in letters dated 31 May 2006, 8 June 2006, 22 June 2006, 30 June 2006 and 31 July 2006. It was put to Mr Lahood in cross-examination, and denied, that the Law Society letter (Exhibit 7) was a recent invention given the variation in the description of Mr Yamine's status in the letterhead. 107 Mr Lahood said in evidence that he did not report the matter to the police but advised his clients to report the whole transaction to the police, including the caveat (T181.4). 108 During the course of his evidence, I asked Mr Lahood (T181-182): "Q. I just want to have an understanding of why you say in paragraph 11 of your affidavit that you had the view that the caveat was not material to the proceedings. Why did you have that view? A. My view, your Honour, was that or the reason it wasn't material it was part of, I guess, a group of documents in relation to Gillzan [sic] , if I can call it the Gillzan [sic] transaction, and that wasn't subject of the proceedings, in my mind. My view was that the client had borrowed what they believed to be was $12,000.

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Q. Between March 2004 and March 2005? A. Yes." 113 Following the calls upon subpoenas directed to the Law Society and the Department of Lands, Mr Lahood was recalled to give further evidence. A number of his answers were given with the benefit of a certificate under s.128 Evidence Act 1995. He acknowledged that the signature on the caveat was "similar to my signature" (T308.27). Mr Lahood maintained that he had not signed the caveat bearing the Plaintiffs' signatures. With respect to the variations in the firm's letterhead describing Mr Yamine as "Associate" or "Senior Associate", Mr Lahood said in re-examination that the computer system at his office required the manual insertion of changes to the letterhead on each occasion when a letter was generated and that this was not done consistently (T314.27). 114 A significant issue in these proceedings is whether Mr Lahood witnessed the signatures of the Plaintiffs on the caveat for the Caringbah property. After seeming to accept the possibility that he had signed the statutory declaration on the caveat at Parramatta on 25 June 2004, Mr Tobaji then sought to distance himself from that concession. Mrs Tobaji's evidence was surrounded by a level of uncertainty in this regard although she settled upon the position that all documents signed by her with respect to this loan arrangement were signed at the Punchbowl property. Mr Lahood maintains that he did not witness this document and that the signature on the document purporting to be his is a forgery. 115 In determining this issue, I have had regard to the gravity of the matters alleged for the purpose of s.140 Evidence Act 1995, the statutory formulation of the principle in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-363: Palmer v Dolman [2005] NSWCA 361 at [40]-[47]. I am comfortably satisfied, on the balance of probabilities, that Mr Lahood did witness the signatures of the Plaintiffs on 25 June 2004 in an office in Grose Street, Parramatta. At that time, Mr Lahood was performing work at that place and had associations with persons relevant to this transaction, including Mr Allem and Wally Estephan. 116 As the tribunal of fact, I am entitled to make a comparison between handwriting that is disputed and admitted: R v Doney (2001) 126 A Crim R 271 at 280 [61]; Jeans v Cleary [2006] NSWSC 647 at [157]. There is no expert evidence before the Court in this hearing. Mr White acknowledged that the Defendant determined not to seek an adjournment for such evidence to be obtained, given the further delay which would have been involved. Clearly, I must take care in giving weight to my own observations of the relevant signatures as part of the fact-finding process, in the absence of expert evidence. Nevertheless, I have to say that, to my observation, there is a close similarity between Mr Lahood's admitted signature and the signature appearing on the caveat for the Caringbah property. 117 Mr Lahood is not assisted by the content of the letter allegedly sent to the Law Society on 25 February 2006 (see [102] above) nor by the absence of evidence that such a letter was ever received by the Society. It must be said that the somewhat sparse content of the letter does not have the flavour of genuine communication by a solicitor to his professional body reporting the forgery of his signature on a statutory declaration forming part of a caveat registered under statute by the Department of Lands. It might be thought that the alarm would have been sounded clearly, consistently, and persistently by Mr Lahood if he believed that his signature had been forged in such a way. Not only would the professional and ethical consequences for himself be clear, but the commercial consequences for others (including the Plaintiffs) would have been such as to bring about a different level of communication to that claimed by Mr Lahood. A perfunctory letter, lacking in detail and unaccompanied by any follow up does not, in my view, ring true as a genuine communication in the circumstances which presented themselves. Mr Lahood's position is further complicated by the confusing picture presented by the differing descriptions of Mr Yamine in the letterhead. At the very least, this aspect serves to further undermine any confidence which could be placed in the genuineness of the letter as a contemporaneous communication sent by Mr Lahood on 25 February 2006. I regret to say that the strong probability is that this letter was created much later as a means of assisting Mr Lahood in a difficult situation. 118 I am comfortably satisfied that the Plaintiffs signed the caveat at Parramatta on 25 June 2004, in the presence of Mr Lahood, with each of the Plaintiffs knowing that the document was being signed as part of the arrangement made by Wally Estephan of a $300,000.00 loan to Gilzan from the proceeds of the loan obtained by the Plaintiffs from the Defendant. Far from the caveat being irrelevant to the proceedings, as claimed by Mr Lahood, I regard the caveat and its contents as being an important part of the body of accumulated evidence, comprising contemporaneous documents, which shed light upon the true nature of the loan arrangements between the Plaintiffs and the Defendant and, critically, the Plaintiffs' knowledge of those arrangements and their true purpose.

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The Conduct of the Plaintiffs After 25 June 2004 119 Both Plaintiffs claim that the first time that they learned that a loan of more than $12,000.00 had been obtained form the Defendant was when, on about 25 June 2004, their son George opened mail from the Defendant received at the Punchbowl property which revealed the true nature of the loan. Both of the Plaintiffs and George Tobaji gave evidence of a conversation occurring at that time in which the Plaintiffs are shocked to find that a large loan had been obtained, far exceeding $12,000.00. I do not accept the evidence of Mr and Mrs Tobaji and George Tobaji that a conversation to this effect occurred at that time. I am satisfied that both of the Plaintiffs were aware before then that a substantial loan had been obtained on their behalf by Wally Estephan from the Defendant for the purpose of the Plaintiffs making money through the further loan to Gilzan of the sum of $300,000.00. The documents sent by mail by the Defendant to the Punchbowl property in early June 2004 had made clear the true quantum of the loan. I am satisfied that the Plaintiffs were aware before then that a large loan was to be obtained, with the assistance of Wally Estephan, to permit the Plaintiffs to re-lend the bulk of the funds at a profit. 120 In my view, the Plaintiffs' conduct after 25 June 2004 is consistent with them having knowledge of the true position prior to that time. The Plaintiffs did not approach their long-standing family solicitor, Mr Shad, to seek advice as to what should be done. Nor did they contact the police. Although it might be said that reporting Wally Estephan to the police at that time might have been difficult given the Plaintiffs' long-standing friendship with his family, this would not be an impediment to obtaining advice from Mr Shad. It is the evidence of both Plaintiffs that they raised expressly with Wally Estephan, on 4 June 2004, the taking of advice from Mr Shad but were dissuaded from doing so, yet the Plaintiffs would have the Court believe that they did not approach Mr Shad concerning their major financial predicament between June 2004 and at least late 2005. I do not find this evidence credible. 121 Mr Tobaji maintains that he made efforts to contact Wally Estephan from late June 2004, but did not succeed in making contact until early September 2004 (A Tobaji affidavit, 7 November 2007, paragraphs 24-25). Mr Tobaji maintains that it was only then that Wally Estephan disclosed to him that the documents which the Plaintiffs had signed had involved a loan to Mr Allem. Mr Tobaji states that Wally Estephan promised to provide the money to service the loan and that, for approximately 14 months, he did provide Mr Tobaji with cash or cash cheques to deposit into the loan accounts, although sometimes the cheques would bounce and Mr Tobaji would get help from his children to pay the loan repayments. Mr Tobaji states that, towards the end of 2005, he could no longer get into contact with Wally Estephan and was concerned that the loan would not get paid. At this point, he tried to contact Mr Allem without success. Mr Tobaji states that his son, George, read the documents that Wally Estephan had given them and it was then decided that they should go to a lawyer and Mr Shad was approached who was unable to help "as he only practised in buying and selling property, not court matters" (A Tobaji affidavit, 7 November 2007, paragraph 26). According to Mr Tobaji, in early 2006, his wife's cousin referred the Plaintiffs to James Lahood and he commenced to act for them (A Tobaji affidavit, 7 November 2007, paragraph 27). 122 The contemporaneous documents reflect use by Mr Tobaji of monies advanced by the Defendant under the loan agreement. For example, on 1 July 2004, Mr Tobaji drew a $700.00 cash cheque on the equity mortgage account (Exhibit 1, page 321). On 2 July 2004, $6,384.00 was transferred from the equity mortgage account to the credit of the Plaintiffs' passbook account (Exhibit 1, pages 323, 437F, 439). In July and August 2004, other sums were credited to the equity mortgage account (Exhibit 1, pages 326, 327, 328, 329, 439, 440). In September and October 2004, further sums were credited to the equity mortgage account (Exhibit 1, pages 330, 331, 332, 442, 443). 123 By letter dated 10 November 2004, Smith Monti Legal wrote to Gilzan advising that they acted for Mr and Mrs Tobaji. The letter confirmed a loan agreement entered into between the Plaintiffs and Gilzan on 25 June 2004 in the sum of $300,000.00 with interest to be paid in the amount of $4,250.00 per month. The letter confirmed the existence of a caveat to protect the Plaintiffs' interest over the Caringbah property. The letter stated that Gilzan had failed to make monthly repayments and demanded that the sum of $300,000.00 be paid by 17 November 2004 and that if payment was not made, a creditor's demand seeking to wind up Gilzan would issue (Exhibit 1, pages 334-335). 124 On 18 November 2004, David Legal, for Gilzan, replied indicating that instructions were being sought from Gilzan (Exhibit 1, page 339). 125 On 20 December 2004, Smith Monti Legal informed David Legal that, given Gilzan's failure to respond to the demand, instructions were being sought to commence proceedings immediately against both Gilzan and Mr Allem (Exhibit 1, page 342). 126 On 24 December 2004, Martin John Green was appointed as voluntary administrator of Gilzan (Exhibit 1, page 495). The first creditor's meeting of Gilzan took place on 4 January 2005 (Exhibit 1, page 343A). Between 8 February 2005 and 18 July 2005, Mr Tobaji withdrew sums of money from the equity mortgage account on at least 22 occasions. These withdrawals were for sums between $100.00 and $3,750.00 and totalled the sum of $10,850.00 (Exhibit 1, pages 345, 346, 348, 349-357, 359, 367, 369, 370, 390, 391, 393, 394-395, 397, 398). At the same time, deposits were being made from time to time into the equity mortgage account. I accept that these payments were coming from Gilzan, probably through Wally Estephan. 127 On 5 May 2005, the Defendant issued a dishonour notice to the Plaintiffs with respect to a deposit of $3,750.00 by Business Accounting Solutions (NSW) Pty Limited (Exhibit 1, page 364). The registered office of that company was at Level 1, 29 Grose Street, Parramatta and company records reveal an association between that company and Mr Allem (Exhibit 1, pages 531, 533-534). 128 On 9 June 2005, Smith Monti Legal transmitted to GHK Green Krejci (Gilzan's voluntary administrators), copies of the Gilzan loan agreement, the caveat over the Caringbah property and a property search (Exhibit 1, page 371). On 23 June 2005, a meeting of Gilzan's creditors took place at the offices of GHK Green Krejci in Elizabeth Street, Sydney (Exhibit 1, pages 393A-393G). Amongst the creditors who were present were Mr Tobaji, who signed the list of attending creditors with the list disclosing the value of the debt payable to him as $300,000.00 (Exhibit 1, page 393G). 129 On 15 August 2005, an adjourned meeting of Gilzan's creditors took place (Exhibit 1, pages 401A-401G). Again present was Mr Tobaji, who signed the list of attending creditors with a disclosed value of a creditor's debt in the sum of $300,000.00 (Exhibit 1, page 401E). 130 On 8 November 2005, HomeSide issued letters to the Plaintiffs for overdue payments on the equity mortgage account, advising that the account had been in excess of the facility limit for 40 days (Exhibit 1, page 404). 131 On 31 March 2006, the Defendant wrote to the Plaintiffs cancelling the equity mortgage account facility and demanding repayment of the whole balance of $321,330.37 (Exhibit 1, pages 406-407). 132 On 4 May 2006, the Plaintiffs filed the Statement of Claim in these proceedings. 133 On 20 June 2006, the Defendant served notices pursuant to s.57(2)(b) Real Property Act 1900 on the Plaintiffs (Exhibit 1, pages 408-412) together with a default notice with respect to the new loan account facility (Exhibit 1, page 414). 134 On 24 July 2006, the Defendant served upon the Plaintiffs a demand for $329,073.24 with respect to the outstanding sum under the equity mortgage account facility (Exhibit 1, pages 416-417) and also served a demand for $124,780.88 being the sum outstanding under the new loan account facility (Exhibit 1, page 418). 135 On 13 November 2006, a further meeting of Gilzan's creditors took place with the sum of $300,000.00 again being disclosed as the debt due to the Plaintiffs (Exhibit 1, pages 420A-420B).

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(b) the second loan agreement for about $300,000.00 was, according to the Plaintiffs' loan application, taken out for investment purposes. 145 Mr White submits that the Defendant's Cross Claim is a simple claim for possession of the residential property which was secured by each of the loans. The second facility is in substantial default and has been for an extended period of time. The Defendant relies upon the Plaintiffs' defaults under the second facility as a cross-default under the home loan. No defence has been pleaded to that claim apart from the matters set out substantively in the Statement of Claim. 146 He submits that the Plaintiffs have received the incontrovertible benefit of the home loan, and no claim has been made that the 2001 loan was itself unfair or should be set aside. 147 Mr White observes that the Plaintiffs contend a liability to repay $12,000.00 only (plus interest) under the second facility upon the basis of their suggested belief that they were entering into an agreement to borrow that sum only for the purpose of concreting work to the Punchbowl property. He submits that this contention is not established by the evidence. In any event, should the Court decide that the second facility ought be set aside or otherwise limited to the extent of the Plaintiffs' liability under it, Mr White submits that further allowance must be made for receipt by the Plaintiffs of income from the investment which they received via the broker, and which they continued to pursue through solicitors and in the liquidation of Gilzan after they say they learned of their error in the nature of the loan. 148 Mr White submits that a claim of unjustness under s.7 CR Act involves a two-stage enquiry. First, was the contract unjust? Secondly, what, if any, orders should be made? The first stage may be described as a judgment and the second stage is clearly discretionary: Perpetual Trustee Company Limited v Khoshaba at [34]. If a contract, or one of its relevant provisions, is neither unfair nor unreasonable so far as the applicant for relief is concerned, it is difficult to see how the existence of inequality in bargaining power, or lack of independent advice, can render the contract, or a provision of the contract, unjust: West v AGC (Advances) Limited (1986) 5 NSWLR 610 at 621. If a lender has not engaged in conduct depriving the borrower of a real or informed choice to enter into a contract, and the terms of the contract are reasonable as between the parties, the contract cannot be considered unjust simply because it was not in the interests of the applicant for relief to make the contract or because he or she had no independent advice: West v AGC (Advances) Limited at 621. A contract will not be unjust as against a party unless the contract or one of its provisions is the product of unfair conduct on his part, either in the terms which are imposed or in the means which are employed to make the contract: West v AGC (Advances) Limited at 622; Perpetual Trustee Company Limited v Khoshaba at [70]-[73]. 149 Mr White relies upon the decision of Brereton J in Riz v Perpetual Trustee Australia Limited [2007] NSWSC 1153 at [75] and submits that evaluation of injustice requires that the Court have regard to the position of all the contracting parties. In circumstances where the Defendant is providing funds to be used for an investment purpose, the fact that the lender had no involvement of any kind in the investment was entitled to significant weight in its favour: Perpetual Trustee Company Limited v Khoshaba at [77]. 150 With respect to the discretionary second matter in the two-stage enquiry under s.7 CR Act, there is a discretion to decline relief, despite a determination that a contract is unjust: Perpetual Trustee Company Limited v Khoshaba at [94]-[95], [119]. 151 Mr White submits there is nothing pleaded to suggest that the terms of the second facility contain terms which are intrinsically unjust. The Plaintiffs' pleaded claim under the CR Act is limited to three particulars of unjustness:

[267]

(h) Mr Lahood gave implausible accounts of his giving notice to the Law Society and the Department of Lands about the existence of a caveat bearing his forged signature, and his failure to follow up the matter despite the lack of response and, in the case of the Department of Lands, a perception by him that the relevant officer had misunderstood his advice. 155 The Defendant submits that Mr Lahood had acted on behalf of the very company (Gilzan) that had caused loss to his clients, and resulted in them bringing the present proceedings. The only evidence of his involvement is the witnessing of the caveat. The Defendant submits that it stands to reason that Mr Lahood would not have remembered the Plaintiffs at the time he witnessed their signatures on the declaration. Mr White submits, however, that the evidence suggests that Mr Lahood must have realised this at some early stage of the present proceedings, yet he chose to continue to act for the Plaintiffs in the proceedings. The Defendant submits that the Court should find that Mr Lahood was professionally embarrassed by this potentially damaging revelation. 156 Mr White submits that the Plaintiffs proffer no explanation (logical or otherwise) as to what they thought they were doing executing the Gilzan loan agreement and caveat at the premises of Gilzan and Mr Allem, in the presence of Wally Estephan, the day after the substantial loan funds had been drawn down. On the Plaintiffs' account, this was the same day when the Plaintiffs assert that they became aware of a fraud or, at least, a very serious mistake as to the quantum of loan funds. The Defendant submits that the Court should infer from this that the Plaintiffs knew that they had committed the loan monies to an investment with Mr Allem or an entity associated with him. 157 Mr White submits that the evidence which linked Mrs Tobaji to the detail of the transaction is not as clear or plentiful as that available to support Mr Tobaji's knowledge about the detail of the transaction. He submits that an inference ought be drawn and a finding made that Mrs Tobaji had the same degree of understanding as her husband of the transactions, at least to the extent she knew that a large sum of money was being borrowed to invest, with that borrowing secured by a mortgage over the family home. He pointed to the statement in Micarone v Perpetual Trustees (Australia) Ltd (1999) 75 SASR 1 at 111 [591] that a wife deferring to the wishes of her husband must accept the consequences of relying upon her husband in that way. 158 With respect to the role of Wally Estephan, Mr White submits that the Court would not find that the Plaintiffs were simply duped into the loan for its true amount by Wally Estephan. Mr White notes that the Plaintiffs accept that Wally Estephan is not the agent of the Defendant, a proposition supported by authority: Con-Stan Industries of Australia Pty Limited v Norwich Winterthur Insurance (Aust) Limited (1986) 160 CLR 226 at 234; Micarone v Perpetual Trustees (Australia) Limited at 123 [632]; Steele-Smith v Liberty Financial Pty Limited [2005] NSWSC 398 at [104] and Hilton v Gray [2007] QSC 410 at [40]. To the extent that the Court may determine that Wally Estephan behaved dishonestly or in an unfair way short of dishonesty, Mr White submits that such behaviour cannot be sheeted home to the Defendant. 159 Mr White accepts that the question of the unjustness of the contract transcends a simple question of agency. He observes that it has not been suggested in evidence or submissions that the Defendant was motivated by asset lending considerations. 160 Mr White made submissions with respect to the issue raised in the cross-examination of Ms Assimakis (see [78]-[81] above). Although it had not been particularised, Mr White notes that the Plaintiffs contend that the Defendant had the means of detecting the alleged fraud by its possession of information (in the form of the 3200 BOBS screen dump) which indicated that Mr Tobaji had "unemployed" status (at least in or before 2003) and that the Defendant had failed to act. In cross-examination, Ms Assimakis agreed that there is "a risk" that when the bank deals with brokers for information, rather than directly with the customers, that the information that is being supplied comes from the broker rather than the customer (T257). Ms Assimakis acknowledged an inconsistency between the employment verification information received by HomeSide on the May 2004 application and the customer profile information as to employment status as updated on 31 May 2003 (T255, 263) and that such an inconsistency means that, in the absence of further enquiry, there is a risk that the employment information provided is false. Mr White pointed to the evidence of Ms Assimakis in cross-examination acknowledging an inconsistency and agreeing that it raised "alarm bells, in hindsight", but that "at the time it's not one of [the] most obvious inconsistencies when assessing an application" (T266.25). Mr White submits that this evidence must be assessed against the earlier evidence of Ms Assimakis which was based upon a false premise. In any event, Mr White observes that the customer profile information only contains what a customer tells the Defendant. He points to the evidence of Ms Assimakis that she would "take the [2004] application and the supporting documents as being the most current version and not necessarily question it" (T256.2). 161 Mr White refers to the evidence of Ms Assimakis that the customer's signature on the loan application is, in part, the way HomeSide addresses the risk of incorrect information in the application process although there are other factors (T258.41). He submits that the highest point to which evidence on this topic rises is that:

[271]

would have "alarm bells" ring. He submits that this is not sufficient to have placed the Defendant on notice of behaviour which should lead to the setting aside of the loan transaction. The existence of risk is inherent in all commercial organisations. Equally, he submits, there is a risk that information provided by a customer directly is also fraudulent. To acknowledge this does not present any solution to a problem and is certainly insufficient to taint the transaction as unjust. 162 Mr White submits that the Defendant was in no special relationship with the Plaintiffs which imposed on the Defendant a duty to investigate whether the Plaintiffs were telling the truth about their financial position or whether the Plaintiffs, in fact, had the capacity to repay which they represented they had: Steele-Smith v Liberty Financial Pty Limited at [84]. He submits that a prospective borrower is not entitled to expect the lender to be alert for fraud by or on behalf of the borrower and a lender is not required, in the interests of the borrower, to have "a high index of suspicion" for fraud by the borrower or the borrower's agent. He relies upon the statement of Brereton J in Riz v Perpetual Trustee Australia Limited at [78] that to "hold that the undetected provision of false information by or on behalf of a borrower to a lender in an attempt to obtain a loan resulted in the loan contract being unjust against the lender would be to invert commonsense, logic and justice by protecting the wrongdoer against the victim". 163 Mr White submits that an objective assessment of the position not only of the Plaintiffs, but of the Defendant, its behaviour in the circumstances and its motivation, compels the conclusion that the loan agreement was not unjust for the purposes of the CR Act. 164 Mr White makes three submissions with respect to the claim that the loan agreement was unfair due to the lack of independent legal advice for the Plaintiffs. Firstly, both Plaintiffs say that they were aware of the importance of getting legal advice in relation to a loan transaction before they entered into this one, that they turned their mind to the question when the loan documentation was provided to them and they determined not to seek advice although they had a solicitor (Mr Shad) at the time. Secondly, it is not universally incumbent upon the lender to ensure that a borrower obtains legal or financial advice: St George Bank Ltd v Trimarchi [2004] NSWCA 120 at [79]. Thirdly, reliance is placed upon the observations of Spigelman CJ concerning "independent advice" in s.9(2)(h) CR Act in Perpetual Trustee Company Limited v Khoshaba at [89]-[90]. It is submitted that the asserted denial of opportunity to obtain legal advice is without factual foundation and, in any event, as a matter of principle, no significant weight ought be given to the nature of the transaction. Mr White submits there is simply no evidence that the Plaintiffs sought to negotiate different terms to the loan agreement, and it cannot be said that they were denied any opportunity to do so. 165 With respect to the claim of serious disadvantage due to poor education and lack of English as a first language, Mr White submits that the serious disadvantage said to afflict the Plaintiffs was simply not productive of any unjustness in the loan transaction. They had experience in the loan and mortgage transactions they were undertaking and knew they were undertaking such a transaction in this case. The Defendant submits that the Plaintiffs did, in fact, understand the true extent of the financial commitment they were undertaking. Even if they did not, however, each turned their mind to the question of legal advice and decided against that course. 166 Mr White submits that if, contrary to the Defendant's submissions, the Court determines that the second facility was unjust, the Court should exercise its discretion not to grant relief. He submits that a similar approach to that taken by Brereton J in Riz v Perpetual Trustee Australia Limited at [84]-[85] ought be taken here, in circumstances where the lender has assessed the loan for serviceability and the Defendant has not demonstrated the indifference that was evident in Perpetual Trustee Company Limited v Khoshaba. 167 The Defendant observes that the Plaintiffs' claim, as pleaded under the Code, is limited to five particulars of unjustness, and that these particulars raise issues similar to those already considered in the context of the CR Act claim of the Plaintiffs. Mr White submits that the Code really replicates, in the context of consumer lending, the regime for setting aside an unfair contract that is already provided for under the CR Act. For reasons advanced by the Defendant with respect to the CR Act claim, Mr White submits that the Court would not find any unjustness for the purpose of s.70 of the Code that would justify the grant of relief to the Plaintiffs. 168 With respect to the controversy as to whether the provisions of the Code apply to the second facility, Mr White queries the necessity for separate examination of issues that relate solely to the question of application of the Code given the availability of CR Act. 169 With respect to the Plaintiffs' claim under the general law of unconscionability, Mr White submits that the Court would not grant the Plaintiffs equitable relief. The only special disadvantage which the Plaintiffs could arguably identify is poor education and their limited ability to speak or write English as their first language. Mr White invites a similar approach to that taken by Brereton J in Riz v Perpetual Trustee Australia Limited at [87], whereby the reasons for concluding that the loan was not unjust equally inform a conclusion that it was not unconscionable. He submits that there is no evidence that the Defendant had knowledge of any asserted disadvantage. He submits that, from HomeSide's perspective, the loan transaction was not an imprudent, let alone an improvident, one. Accordingly, he submits that there can be no basis for concluding that the Defendant unconscientiously took advantage of the Plaintiffs. 170 Mr White submits that there should be judgment for the Defendant on the Statement of Claim and judgment for the Defendant on the Cross Claim. He submits that the Court should direct the Defendant to bring in Short Minutes of Order giving effect to the reasons for judgment, accompanied by a final affidavit of debt.

[284]

(c) no officer of the Defendant contacted the Plaintiffs (as opposed to Wally Estephan) to check the accuracy of the information contained in the application - I accept the evidence of Mr Nevill (see [63] above) concerning this aspect - in any event, I am satisfied that any contact which an officer of the Defendant had made, in particular with Mr Tobaji or Mr Bou Francis (as his alleged employer), would have seen confirmation being given that this was true - any contact would not have revealed the true position. 175 The high point of the Plaintiffs' argument arises from the evidence of Ms Assimakis with respect to risk (see [78]-[81] above). Upon the basis of certain assumptions, an inconsistency or tension could be observed between the information provided in May 2004 concerning Mr Tobaji's employment and the information contained in the computer-generated customer file note. I do not accept, however, the Plaintiffs' submissions on this issue. There are a number of reasons for this conclusion. 176 Firstly, it is necessary to understand, and fairly read, the totality of the evidence of Ms Assimakis on this topic. Properly understood, it rises no higher than a hindsight assessment giving greater weight to the computer-generated customer file than is objectively warranted. I accept Mr White's submissions in this regard. 177 Secondly, particular care must be taken where the conduct of the parties is seen through the "prism of hindsight": Rosenberg v Percival [2001] 205 CLR 434 at 441-442 [16]. As Gleeson CJ there observed, there is a danger in a failure, after the event, to take account of the context, before or at the time of the event, in which a contingency was to be evaluated. The documents provided in support of the loan application on 21 May 2004 included letters purporting to certify the employment of both Mr and Mrs Tobaji. In the case of the letter purporting to come from Sassine Bou Francis of RSS Formwork Pty Limited, correct particulars and contact numbers were provided, together with an invitation that further information could be obtained by telephone contact with Mr Bou Francis. As it happened, officers of HomeSide sought additional information which came on 26 May 2004 in the form of a group certificate supportive of the original documentation. 178 In my view, there is an air of unreality in the Plaintiffs' submission that this body of direct and contemporaneous material with respect to Mr Tobaji's suggested employment ought to have been viewed with suspicion because of an entry in a computer-generated customer file. Proper analysis of the evidence on this issue, in my view, does not support the Plaintiffs' argument that this evidence warrants a finding of unjustness for the purpose of the CR Act. 179 The submissions of the Defendant at [148]-[150], [158], [162] and [164] summarise accurately the relevant principles. I agree with the observations of Palmer J in Steele-Smith v Liberty Financial Pty Limited at [84] and Brereton J in Riz v Perpetual Trustee Australia Limited at [78]-[79]. In the circumstances of this case, it would invert commonsense, logic and justice to hold that the undetected provision of false information by or on behalf of a borrower to a lender, in an attempt to obtain a loan, resulted in a loan contract being unjust against a lender. Such an approach would protect the wrongdoer (the Plaintiffs) against the victim (the Defendant). The evidence does not demonstrate any indifference or recklessness on the part of the Defendant: Riz v Perpetual Trustee Australia Limited at [78]. 180 The loans obtained by the Plaintiffs from the Defendant in May-June 2004 did not involve asset lending: Riz v Perpetual Trustee Australia Limited at [70]-[71]. There is no other intrinsic feature of the loans which supports a finding of unjustness with respect to them. 181 I have made a number of findings of fact adverse to the Plaintiffs. Given those findings, the Plaintiffs are driven to contend that they ought be granted relief under the CR Act because of the Defendant's failure to detect the Plaintiffs' wrongdoing. Even it if it was established that the Defendant or its officers had departed from their own lending guidelines and due diligence procedures, that alone does not establish the injustice of the loan. Rather, any departures would need to be part of a process of reasoning, the ultimate outcome of which is that the loan in question was unjust: Kowalczuk v Accom Finance Pty Limited [2008] NSWCA 343 at [117]. I am not satisfied that the circumstances of this loan leads to the conclusion that the contract and mortgage were unjust under the CR Act in the circumstances in which they were made. Even if such a finding had presented itself at the first stage of the inquiry (which it does not), I would decline relief, in any event, at the second stage of the inquiry. 182 Wally Estephan was the Plaintiffs' broker and thus their agent. This was so notwithstanding the fact that he apparently received commission from the Defendant: Micaroni v Perpetual Trustees Australia Ltd at 123 [632]; Hilton v Gray at [40]. 183 I am not satisfied that the Plaintiffs have established a basis for relief under s.70 of the Code. A consequence of my findings of fact is that the Plaintiffs were aware that the vast bulk of the money being borrowed from the Defendant in May-June 2004 was for investment purposes. The business and investment declaration signed by the Plaintiffs and witnessed by Wally Estephan was, in my view, a true indication of the purpose of the loan as understood by the Plaintiffs. My reasoning in rejecting the CR Act claim leads to the rejection of the claim under the Code. 184 Similar reasoning leads me to reject the Plaintiffs' claim based upon unconscionability under the general law. Although the Plaintiffs did not have a strong command of English, each of them had an accurate understanding of the quantum and purpose of the loan being obtained from the Defendant in May-June 2004. Each Plaintiff understood that the loan was secured by a mortgage over the Punchbowl property. 185 I do not consider that the Plaintiffs' case is advanced by the fact that officers of the Defendant at the Lakemba and Campsie branches would have had some knowledge of the language limitations of the Plaintiffs arising from the 2001 mortgage obtained through that branch with the assistance of the Plaintiffs' daughter. I do not accept that knowledge of some officers of the Defendant (in 2001) can be called in aid to advance materially the Plaintiffs' case arising from events, in different circumstances, involving other officers of the Defendant (in 2004): cf The Bell Group Ltd (In Liq) v Westpac Banking Corporation [No. 9] [2008] WASC 239 at [6138]-[6165]. 186 I am not satisfied that either Plaintiff suffered from a relevant special disadvantage with respect to their dealings with the Defendant for the purpose of these loans. I reject the Plaintiffs' claim for relief under the general law. 187 The Plaintiffs have failed to establish an entitlement to relief as sought by them in the Statement of Claim. 188 In closing submissions, Mr Batley advanced an alternative argument which sought to differentiate between Mr and Mrs Tobaji (see [141] above). Although there is a more substantial volume of direct evidence against Mr Tobaji, I have concluded that Mrs Tobaji was aware of the quantum and purpose of the loans being obtained from the Defendant in May-June 2004. This finding is not dependent upon any process of reasoning which deems Mrs Tobaji, as the wife, to be vested with the knowledge of Mr Tobaji, her husband. Rather, my findings with respect to the state of knowledge of Mrs Tobaji are based upon inferences to be drawn from her involvement in the substantial process of document completion to obtain the loans and the execution of the Gilzan loan agreement and caveat at Parramatta on 25 June 2004 in the presence of Mr Lahood. I do not accept Mr Batley's submission of an alternative approach differentiating the relief to be granted with respect to Mr and Mrs Tobaji. In my view, this case is far removed from the factual circumstances in Elkofairi v Permanent Trustee Company Limited. 189 Accordingly, the Plaintiffs have failed entirely with respect to relief sought in the Statement of Claim. 190 With respect to the Cross Claim, I agree that the Defendant's claim is a simple one for possession of the Punchbowl property which is secured by the loans and mortgage taken out by the Plaintiffs with the Defendant in June 2004. The Defendant has demonstrated substantial default on the part of the Plaintiffs under the mortgage and Mr Batley does not contend that a contrary finding ought be made. The Plaintiffs have not pleaded a Defence to the Cross Claim apart from agitating the matters advanced in the Statement of Claim which I have rejected. 191 Accordingly, I am satisfied that the Defendant has demonstrated an entitlement to relief as sought in the Cross Claim.

[285]

Referral to Law Society Concerning Mr Lahood 192 The witnessing of a signature on a registrable document is a solemn and important function: Graham v Hall (2006) 67 NSWLR 135 at 143 [58]-[59]. Mr Lahood's account to this Court (which I have rejected) was to the effect that someone had forged his signature on the caveat. If Mr Lahood's signature had in fact been forged, such a false attestation would constitute an attack on the integrity and reliability of the registration system: Graham v Hall at 143 [59]. If Mr Lahood had truly thought that his signature had been forged on the caveat, his response to such a gross and serious act of dishonesty would have far exceeded the modest steps which he says he took, and the response of the relevant authorities would have been of a type which recognised the gravity of the allegation as an attack on the integrity and reliability of the registration system. As I have concluded above at [114]-[118], it was in truth Mr Lahood who witnessed the Plaintiffs' signatures on the statutory declaration forming part of the caveat. Serious issues are accordingly raised concerning the professional conduct of Mr Lahood which warrants investigation by the appropriate authorities. 193 Having regard to the findings made by me with respect to Mr Lahood's witnessing of the signatures of the Plaintiffs on the statutory declaration forming part of the caveat dated 25 June 2004, I will direct that a copy of this judgment be furnished to the Chief Executive Officer of the Law Society for the purpose of investigation with respect to Mr Lahood. Conclusion and Orders 194 There should be judgment for the Defendant on the Statement of Claim. There should be judgment for the Defendant (as Cross Claimant) on the Cross Claim. I direct the Defendant to bring in Short Minutes of Order giving effect to these reasons for judgment, accompanied by a final affidavit of debt. 195 I direct that a copy of this judgment be furnished to the Chief Executive Officer of the Law Society of New South Wales for the purpose of investigation of the conduct of James Joseph Lahood.

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