Supreme Court New South Wales Medium Neutral Citation: Bidmonta Pty Ltd v Georgiou [2011] NSWSC 227 Hearing dates: 3 March 2011 Decision date: 01 April 2011 Before: Gzell J Decision: Amended Statement of Claim dismissed as against mother and judgment entered in her favour. Judgment entered for mortgagee against son for amount of loan plus interest. Catchwords: MORTGAGES - Mortgages and Charges Generally - Remedies of Mortgagee - son raised loans secured by unregistered mortgages over mother's land - No payment of principal or interest - mortgagee claimed possession - whether son forged mother's signature Legislation Cited: Uniform Civil Procedure Rules 2005 Evidence Act 1995 Cases Cited: Bringinshaw v Bringinshaw (1938) 60 CLR 336 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Category: Principal judgment Parties: Bidmonta Pty Ltd (plaintiff) Niki Georgiou (First Defendant) Angelo Georgiou (Second Defendant) Representation: Counsel: J Turnbull (Plaintiff) Anthony Rogers (First Defendant) Solicitors: Ronayne Lawyers (Plaintiff) D'Agostino Solicitors (First Defendant) Martin Churchill Solicitors (Second Defendant) File Number(s): 2009/290685 Judgment 1On 7 July 2008 the plaintiff, Bidmonta Pty Ltd, through a broker, Rebfin Pty Ltd, lent $140,345.00 on the security of an unregistered mortgage over land in New South Wales. Niki Georgiou, the first defendant, and her deceased husband were the registered proprietors of the land. Bidmonta has received no repayments under the loan. 2Angelo Georgiou, the second defendant, gave no evidence. But Imre Soos deceased, a director of Bidmonta, swore an affidavit in which he said he had a conversation with Angelo Georgiou on or about 20 April 2009 in which Angelo Georgiou said he had forged the signature of his mother on the mortgage documents. On the other hand, Angelo Georgiou signed a statutory declaration on 8 April 2009 in which he declared that he had assisted his mother in obtaining the second mortgage from Bidmonta. 3The purported signature of Mrs Georgiou on the mortgage was witnessed by Andrew Walter Scott, the third defendant. The certificate was in the following terms: "I certify that the person(s) signing opposite, with whom I am personally acquainted or as to whose identity I am otherwise satisfied, signed this instrument in my presence." 4Warwick Bywater swore an affidavit in which he said he spoke with Mr Scott who acknowledged his signature on the certification. But Mr Scott said he did not know Mrs Georgiou and he did not identify the person who signed the document. His practice was not to ask for identification when witnessing signatures. The proceedings between Bidmonta and Mr Scott were settled. 5A caveat was lodged on Mrs Georgiou's land by Bidmonta on 22 July 2008 claiming under the unregistered mortgage. 6On 27 July 2008 a deed of amendment to increase the purported loan to Mrs Georgiou by $6,000.00 was purportedly executed by her. 7Simon Hall, the principal and a director of Rebfin, prepared a prior mortgage over Mrs Georgiou's land in favour of A Acme Plumbing Pty Ltd to secure a loan of $78,121.00 on 13 March 2008. He took instructions from Angelo Georgiou that the loan was to assist his business in developing computer software. No portion of the loan was paid to Mrs Georgiou. The loan was discharged from the moneys raised under the second mortgage of 7 July 2008 to Bidmonta. 8With respect to the second loan Mr Hall again took instructions from Angelo Georgiou as to the disposition of the loan moneys. Mrs Georgiou received none of them. 9Mrs Georgiou gave evidence through an interpreter. She claimed that she had no fluency at all in the English language notwithstanding that she had been in Australia for 50 years. She claimed that her late husband only brought Greek-speaking guests home. 10From my observation of Mrs Georgiou in the witness box and her anticipation of the translation of questions I formed the view that she had a better grasp of the English language than she claimed. 11Mr Hall said he called on Mrs Georgiou and gave the mortgage documents to her at her home. He said the woman who answered the door identified herself as Mrs Georgiou and he said: "This is the mortgage document over your house covering the loan that your son Angelo has discussed with me". Mr Hall said that Mrs Georgiou replied: "Thank you, I will not sign it now but will talk to my son Angelo about it". This was said in the English language and not in the Greek language. It was not put to Mr Hall that the conversation never took place because Mrs Georgiou only spoke Greek. 12Mrs Georgiou denied any conversation with Mr Hall or any visit by him to her home. In cross-examination Mr Hall said that he had had a telephone conversation with Mrs Georgiou in relation to the first mortgage inquiring whether she had signed the documents and she said she had in the English language, not in the Greek language. Again it was not put to Mr Hall that Mrs Georgiou could not take a telephone conversation in English. 13Much was made of this evidence. It was submitted that Mr Hall had no advantage to be had by giving evidence while Mrs Georgiou had every reason to deny the conversation. It was submitted that I should find against Mrs Georgiou on credit grounds and conclude that, far from her denial that she had signed the mortgage documents, she had done so. 14On the other hand, it was pointed out that Mr Hall had not mentioned a telephone conversation with Mrs Georgiou in his affidavit. And it had taken him a long time to respond to critical correspondence. Mr Hall received a letter of 8 October 2008 from Mrs Georgiou's solicitors stating that she had not approached Rebfin to obtain any finance and she had not executed any mortgage documents. Mrs Georgiou's solicitors sent a reminder on 27 October 2008 but it was not until 30 October 2008 that Mr Hall responded. It was submitted that the suggestion of a forgery should have activated Mr Hall immediately and that it told against his credit that it took him so long to respond. 15I was invited to conclude that the signature on the mortgage was not that of Mrs Georgiou. There was no handwriting evidence from an expert. In the absence of such evidence the court should be careful in its appraisal of handwriting. 16But in this case I am convinced that the signature on the mortgage document was a forgery most likely perpetrated by Mr Georgiou and that his confession to Mr Soos was correct. 17There was in evidence an expired passport of Mrs Georgiou issued on 11 August 1997 that contained her signature. It predated the purported signature on the mortgage documents. Two pensioner concession cards containing the signature of Mrs Georgiou were also in evidence. The first expired on 31 May 2010. It recorded a start date of 20 November 1996. The second expired on 31 May 2011 stating the same start date. It may be, therefore, that the signature on the earlier pension concession card was written by Mrs Georgiou in 2009, both thereby postdating the signature on the mortgage and the deed of amendment. 18But there was a consistent pattern to Mrs Georgiou's signature both before and after the signature on the mortgage documents. 19Mrs Georgiou's signature appears on two affidavits sworn by her in the proceedings and those signatures are like those on the pension concession cards and the passport. Each signature is characterised by a capital "N" for Mrs Georgiou's Christian name, the right hand leg of which does not reach the base of the other leg but kicks up. Then follow, after a space, the letters "Geo" in running writing. There is then another gap followed by the letters "rg" in running writing. After another gap the letters "iou" are printed with a gap between each letter. 20In contrast each of the purported signatures on the documents for the first and second mortgage, and in particular, the signature on the second mortgage and the deed of amendment showed the letter "N" with the right leg starting at the base level of the first leg with a kick-up and each of the letters "Georgi" separated, followed by the letters "ou" and an elongated letter "y" in running writing. The final letter is less elongated in some instances. 21The contrast between the signature with respect to the first mortgage on it, the legal advice acknowledgment certificate, the mortgage memorandum, the business investment loan application form, the declaration of purposes for which credit is provided and the letter of offer from Acme and with respect to the second mortgage, the letter of offer from Bidmonta, the mortgage and the deed of amendment and the signatures on Mrs Georgiou's passport, her pension concession cards and her affidavits, is striking. 22Notwithstanding that Mrs Georgiou's command of the English language was greater than she portrayed it to be, I find that she did not sign any of the mortgage documents and, in particular, she did not sign the mortgage to Bidmonta nor its deed of amendment. 23In my judgment Bidmonta's claim that the mortgage and the deed of amendment are valid and binding fails, as does its claim to judgment for possession of Mrs Georgiou's land. 24Bidmonta raised an alternative claim against Mrs Georgiou that she pay by way of restitution the amount of the second loan together with interest. That claim was not pressed in final address and it falls with my finding that Mrs Georgiou did not execute the Bidmonta mortgage nor its deed of amendment. 25When the affidavits in this matter were read, I struck out some portions with leave to re-tender. It was submitted that if I found for Bidmonta against Mrs Georgiou those portions of the affidavits should be admitted. Since I have found that Bidmonta is not entitled to judgment against Mrs Georgiou the passages should remain struck out. 26The amended statement of claim should be dismissed as against Mrs Georgiou and judgment should be entered in her favour. 27So far as Angelo Georgiou is concerned, Bidmonta sought damages for his forging of Mrs Georgiou's signature on the Bidmonta mortgage and deed of amendment. In addition Bidmonta alleged that it had lent Angelo Georgiou $13,850.00 which had not been repaid and it claimed that amount together with interest. 28Angelo Georgiou did not appear at the hearing. His solicitor informed the court that instructions were withdrawn by Angelo Georgiou the day before the hearing. There was no time to serve a notice of intention to file the notice of change. Being of the view that sufficient cause was shown to allow the filing of a notice of ceasing to act under the Uniform Civil Procedure Rules 2005, Pt 7 r 7.29. I granted that leave. 29Leave was given to Bidmonta to file a notice of motion seeking the striking out of Angelo Georgiou's defence and the entry of judgment against him for the relief claimed in the amended statement of claim pursuant to the Uniform Civil Procedure Rules , Pt 13 r 13.1. I stood the notice of motion over and will now deal with it. 30My finding that Mrs Georgiou's signatures on the Bidmonta mortgage and deed of amendment were forged is consistent with Angelo Georgiou's admission to Mr Soos that he forged his mother's signature on the mortgage documents rather than with his statement in the statutory declaration. 31While a finding of fraud is a serious matter that attracts the Evidence Act 1995, s 140(2)(c) and the need to feel an actual persuasion of its occurrence or existence before it can be found on the balance of probabilities ( Bringinshaw v Bringinshaw (1938) 60 CLR 336 at 361-362), in this case I hold that degree of conviction. 32It was Angelo Georgiou who obtained the mortgage documents with respect to the first loan from Acme from Mr Hall and who returned the documents, purportedly executed by his mother, to Mr Hall. 33Whether or not Mr Hall delivered the mortgage documents for the second loan from Bidmonta to Mrs Georgiou, it was Angelo Georgiou who delivered to Mr Hall the documents purportedly executed by his mother. 34Angelo Georgiou had the opportunity to forge the signatures consistently with his admission. There is nothing in the evidence to suggest that a third party had that opportunity. 35The execution of the documents by Angelo Georgiou would not come to the attention of Mrs Georgiou. She received no benefit under either mortgage. 36The first loan from Acme was for one month at a 120%. Instructions in relation to the disbursement of the $78,121.00, later increased by $10,000, were given to Mr Hall by Angelo Georgiou. Mrs Georgiou received no portion of that amount. 37Likewise, with respect to the second loan from Bidmonta of $140,345.00, later increased to $146,345.00, no portion of that amount was received by Mrs Georgiou. 38So the opportunity was there with Angelo Georgiou's mother in ignorance of his dealings, and his forgery of her signatures on the documents. 39The uncontroverted evidence of Mr Soos was that Bidmonta lent Angelo Georgiou $10,000.00 on 15 April 2009, $350.00 on 18 April 2009, $2,500.00 on 20 April 2009 and $1,000.00 on 22 April 2009, none of which has been repaid. 40The same principles govern a plaintiff's application and a defendant's application for summary termination of proceedings. Neither party will be denied a contested hearing on the merits unless the absence of a cause of action or a defence is clearly demonstrated ( General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129). 41In light of the unique opportunity Angelo Georgiou had to forge his mother's signature, and in light of his admission that he had, I am satisfied that the absence of a defence by him has been clearly demonstrated. 42Angelo Georgiou filed a defence to the original statement of claim. He admitted that his mother was a joint registered proprietor entitled to be registered as the sole registered proprietor by reason of her survivorship of the late Andreas Georgiou, her husband, and the other joint tenant. And he admitted that he was the son of Mrs Georgiou. 43The defence did not admit any other paragraph of the statement of claim save that he denied that despite demand he had refused, neglected or failed to repay to Bidmonta the monies lent. The defence was unverified. 44In my view this is an appropriate case for summary termination of Angelo Georgiou's defence which should be struck out and judgment should be entered for Bidmonta for damages assessed in the amount of the outstanding loan under the second mortgage plus interest together with the loan of $13,850.00 plus interest. In effect the pleading raised no defence and simply put Bidmonta to proof of its claims. 45I will hear the parties as to the appropriate terms of the orders and I will hear the parties on costs. I direct the parties to bring in short minutes of order reflecting my reasons. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 April 2011