Anjoul v Westpac Banking Corporation & Antunes; Koura v Westpac Banking Corporation & Antunes; Koura v Westpac Corporation & Antunes

[2000] NSWCA 355

CITATION:	Anjoul v Westpac Banking Corporation & Antunes; Koura v Westpac Banking Corporation & Antunes; Koura v Westpac Corporation & Antunes. [2000] NSWCA 355
FILE NUMBER(S):	CA 40712/98, 40713/98, 40714/98
HEARING DATE(S):	22, 23 August 2000
JUDGMENT DATE:	14 December 2000
PARTIES :	Barkhos Anjoul and Sadie Anjoul v Westpac Banking Corporation and Margaret Cavaco Antunes; Sadik Koura and Sadie Koura v Westpac Banking Corporation and Margaret Cavaco Antunes; William Koura and Nouhad Koura v Westpac Banking Corporation and Margaret Cavaco Antunes.
JUDGMENT OF:	Meagher JA at 1; Sheller JA at 24; Brownie AJA at 25

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :	10826/92;
LOWER COURT JUDICIAL OFFICER :	Bainton J

COUNSEL:	Appellant: G. McVay/ Quinn First respondent: R J Weber Second Respondent: P. Garling SC/Habib
SOLICITORS:	Appellants: Richard Booker First respondent (Westpac): Henry Davis York Second respondent (Antunes): Mallesons Stephen Jaques
CATCHWORDS:	Appellable error - error of fact by trial judge - agreement between parties as to error - consequences of error - "no harm" to parties.
DECISION:	1. Appeals dismissed; 2. Parties to bring in appropriate orders for the Court's approval within seven days.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA: 40712/98

40713/98
40714/98

MEAGHER JA
SHELLER JA
BROWNIE AJA

Friday 14 December 2000

ANJOUL & ORS v WESTPAC BANKING CORPORATION & ANOR

FACTS In proceedings brought by the first respondent Bank as mortgagee for writs of possession against the appellant mortgagors and cross-claims against the second respondent solicitor in tort, the trial judge made mistakes of fact in his findings. All parties agree as to the findings of fact. The appellants appeal on grounds that the mistakes undermine the findings of credibility made by the trial judge favourable to the first and second respondents. HELD By Meagher JA; Sheller JA and Brownie AJA agreeing. 1. It is clear law that where a trial judges makes a finding on credit and also a mistaken finding on fact, the finding on credit cannot prevail if it is infected by the mistaken finding on fact. 2. In the circumstances of this case, the mistaken findings of fact were one of several findings supporting the findings of credit and in this instance do not warrant the setting aside of the findings on credit. 3. Learned counsel for the Bank has made clear the findings of fact as to the amount secured by mortgage can be rectified if necessary and in this circumstance the mistake has not caused harm. 4. The finding by the trial judge as to the credit of the second respondent was open to the trial judge. ORDERS 1. Appeal dismissed. 2. Parties to bring in appropriate orders for the Court’s approval within seven days. THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA: 40712/98

40713/98
40714/98

MEAGHER JA
SHELLER JA
BROWNIE AJA

Friday, 14 December 2000

ANJOUL & ORS v WESTPAC BANKING CORPORATION & ANOR

JUDGMENT

1   MEAGHER JA: These are three appeals from orders made by Bainton J. His Honour heard all three cases together, and we heard all three appeals together. The litigation before Bainton J consisted of three actions for leave to issue writs of possession in respect of certain parcels of land (together with judgments for monetary sums owing by the appellants to the respondent Bank), together with three cross-claims against the Bank (principally for relief under the Contracts Review Act), and three other cross-claims against a solicitor, Mrs Margaret Antunes, apparently in tort. His Honour found for the Bank on all three of its claims, and dismissed every one of the appellants’ cross-claims. 2   The litigation was the culmination of a large number of transactions between the Bank and members of a Lebanese family. Bank accounts were many, they were always being opened, varied, amended and closed. But rarely were they in credit. Overdrafts were given, but often (if not usually) not respected. Some accounts were those of a single debtor, others of joint debtors. Each (or nearly each) of the accounts was secured by mortgages, often third-party mortgages. Over the years, there were innumerable conferences between different bank officers and different members of the family. 3   I shall first indicate who were the various members of the family concerned in the litigation. 4   The family might be called the Koura family. There were (for present purposes) three members of that family: a woman named Hasna (who married a certain John Sacre), and her two brothers William (who married a woman whose first name is Nouhad and who died before the trial before Bainton J began, and Sadik (who married a woman whose first name is Sadie). Nouhad and William lived at West Ryde, Sadik and Sadie lived at Lane Cove, and Hasna and John lived at Roseville. John and Hasna Sacre had three children, two boys (Messrs Seid and Raymond Sacre), and a girl (nee Sadie Sacre), who married a certain Bakhos (called Bill) Anjoul. Sadie and Bill Anjoul, with their children, lived at North Ryde. 5   Of these people, Mr Raymond Sacre seemed to be the most commercially active. He was the most important entrepreneur in the family, and was forever visiting the Bank to arrange different financial aspects of his burgeoning activities. The Bank regarded him as, at least to some extent, the spokesman for the whole family. He specialized in real estate speculation, coffee shops and taxi-driving. It also should be recorded (particularly because the opposite was stated by counsel for the appellants) that the Bank, far from thinking that Raymond Sacre was unwelcome, or unsatisfactory, or a nuisance, regarded him as its best customer at the Macquarie Centre branch, a source of custom, an honest man. 6   For three days we wrestled with aspects of the Bank-family transactions. It was a difficult case to understand, partly because the underlying facts were of some complexity, partly because (if I may say so with respect) his Honour’s judgment was unnecessarily long and meandering, and partly because the appellants’ written submissions (which were also of inordinate length) were almost incomprehensible. However, despite these handicaps, we examined the details of a number of transactions. In the case of each transaction the version given by the appellants differed toto coelo from the version given by the respondents. It was for this reason that learned counsel for the Bank, Mr Weber, correctly submitted that the case was primarily a “credit case”: if the appellants’ oral testimony had been believed they were entitled to relief, if they were disbelieved they were not. And his Honour’s findings on credit were one-way and unambiguous. Of the Bank’s witnesses, his Honour said “I accept the evidence of these Bank officers whenever it is in conflict with that of any of the defendants”. His Honour made a similar finding in respect of Mrs Antunes. Of the appellants his Honour said: “Furthermore, some of the evidence from these unfortunate defendants was so improbable that one would not accept it without corroboration, which there was not, except from others of them, which has the opposite effect”. I have merely recited a sprinkling of his Honour’s words on the topic - whilst a number of transactions were examined carefully, I think I should limit myself much more to the same effect. 7   Whilst, as I have said, a number of transactions were examined carefully, I shall limit myself to consideration of the transaction of 31 July 1990, because it was agreed by all parties that if the appellants were unable to impugn that transaction, none of the other transactions mattered. 8   Immediately before 31 July 1990, the position of the family with the Bank will, I think, emerge with some clarity from the following table:

Type of loan Amount owing Debtor Security held
SBK/IPL 219,872.96 Raymond and Seid Sacre 2nd mortgage by R & S Sacre over 8/71 Union Street, McMahons Point. 2nd 3rd party mortgage by J & H Sacre over 34 Carnarvon Street, Roseville
TBK/OD 84,358.69 Sacre Investments P/L 3rd 3rd Party Mortgage by J & H
Sacre over 34 Carnarvon Rd, Roseville

SBK/IPL 872,648.24 Sacre Investments P/L 1st mortgage by Sacre Investments P/L over 238 Victoria Ave, Chatswood. 3rd 3rd Party Mortgage by J & H Sacre over 34 Carnarvon Rd, Roseville. 2nd 3rd Party Mortgage by W & N Koura over 45 Melville St, West Ryde. 1st 3rd Party Mortgage by S & S Koura over 49 Longueville Rd, Lane Cove.
SBK/MRL 161,638.38 John, Hasna, Ray Seid 1st 3rd party mortgage by J & H SBK/BRID Sacre over 34 Carnarvon Rd, Roseville. 2nd 3rd Party mortgage by R. Sacre over 11 Charles Street, Carlingford. 1st 3rd Party mortgage by S. Sacre over 63 Johnston Street, Harbord.

9   Some features of this table deserve comment.

1) Sacre investments Pty Limited was a company with a paid-up capital of $2, of which the shareholders and directors were Raymond and Seid Sacre;
2) The financial situation of the family looks unnecessarily complicated;
3) All members of the family must have been familiar with the idea of a Third Party Mortgage guaranteeing some other person’s debts, because they had all given them;
4) They must have been equally familiar with the notion of owing large sums of money;
5) The overall debt of the Kouras was $957,006.93 and of the Anjouls was $1,067,177.30;
6) The essentially messy situation was made more difficult by Mr Ray Sacre’s apparent inability to comply with Bank guidelines or stay within his overdraft limits.

10   The Bank in June-July 1990 decided to rearrange both its loans and mortgages. It decided to “lend” money (notionally) to pay out most of the accounts, and replace them with a (again notional) loan to Ray and Seid Sacre for $1.5 million; and at the same time it would “lend” the sum of $358,000 to the quartet of John, Hasna, Raymond and Seid; instead of the existing mortgages, the Bank proposed that the $1.5 million be secured by the following eight mortgages -

a) mortgage by Sacre Investments Pty Limited over 238 Victoria Avenue, Chatswood;
b) mortgage by Raymond Sacre over 11 Charles Street, Carlingford;
c) mortgage by Raymond and Seid Sacre over 8/71 Union Street, McMahon’s Point;
d) mortgage by Raymond and Seid Sacre over 5/71 Union Street, McMahon’s Point;
e) mortgage by Bakhos and Sadie Anjoul over 7 Ellen Street, North Ryde;
f) mortgage by Sadek and Sadie Koura over 49 Longueville Road, Lane Cove;
g) mortgage by John and Hasna Koura over 34 Carnarvon Rd, Roseville;
h) mortgage by William and Nouhad Koura over 45 Melville St, West Ryde.
Repayment was to be by way of interest only.

11   The $358,000 was to be secured by one mortgage only, viz. a mortgage by John and Hasna Sacre over 34 Carnarvon Rd, Roseville. All this is made clear by two letters of offer written by the Bank, one concerning the $358,000 loan of 25 June 1990 to Mr and Mrs Sacre and their sons Raymond and Seid, and one concerning the $1.5 million loan of 17 July 1990 to Messrs Ray and Seid Sacre only. It will be noticed that the Bank wanted the $1.5 million to be secured, in part, by third party mortgages, but not in respect of the $358,000. 12   According to Mr McCormack, the Bank manager, after explaining the above, he said to Ray Sacre:

“The Bank requires you to have these documents explained to each of the parties who will execute them by an independent solicitor before they are executed. I want to ensure that your parents, and all the parties, fully understand their liability under the documents.”

His Honour believed him.

13   Mrs Antunes was the solicitor chosen. She was Ray’s solicitor, not the Bank’s, nor of the other parties. 14   Mrs Antunes, in due course, repaired to 34 Carnarvon Rd, Roseville. The date was 31 July 1990. The whole family was present, enjoying a barbecue. Ray had suggested that she come to that house at that time. Her account of what happened on this occasion, which his Honour accepted, was as follows:

“When I arrived at the house I was shown into a large room which appeared to be both a lounge and a dining room. There was a large group of people seated in a circle facing each other talking in what seemed to be the lounge area of the room. I did not recognise any of them nor had I met any of them prior to this occasion. They appeared to me to be waiting for my arrival. At the other end of the room was a long table.
I have a recollection that I made some general remarks when I entered the room. To the best of my recollection I said words to the effect:
“Hello, my name is Margaret Antunes, solicitor.”
At this point they all nodded or acknowledged me. Some responded with a “hello”. As far as I could tell, no one looked surprised.
I then turned to Seid Sacre and said words to the effect, and at the same time, turning to look at a long table at the other end of the room and indicating to it:
“Perhaps I should sit there and you call them over.”
I then proceeded towards the table and sat at the far corner of it. I placed the Westpac documents handed to me on the table and arranged them in front of me. Raymond Sacre then came in and sat diagonally across from me.
I proceeded to look at each document one at a time (starting with the mortgage documents). I then said to Raymond Sacre words to the effect:
“Perhaps it’s best you call them over in turn. I will see these people as they are named in each of the mortgage documents.”
Raymond Sacre indicated either by nodding or saying words to the effect that he agreed to my suggestion. I then pointed to the names of the first two people listed in the mortgage on top of the pile of documents and showed the document to Raymond Sacre. I do not recall exactly who were the first two people called but the first and second defendant were called eventually to the table.
Each time that I pointed to the names of the persons listed in the particular mortgage document I was dealing with, Raymond Sacre turned around to the group at the other end of the room and indicated for the persons named in that mortgage document to come to the table.
When the first and second defendants came to the table, they sat next to me. I showed them the front page of the mortgage, pointed to the name typed in the space reserved for the names of the mortgagors and I said to each of them, whilst pointing to the name one at a time, words to the effect:
“Is this your name?”
Each one of them either nodded or said “yes” indicating that they understood me and that they were the persons named. I then said to them, words to the effect:
“Raymond Sacre and Seid Sacre are borrowing $1.5 million from the Westpac Banking Corporation. The Bank is taking a mortgage over your house to make sure the money to the Bank gets paid back to the Bank. This is a mortgage. This means that if Raymond Sacre or Seid Sacre don’t pay the money back to the Bank, the Bank will take your house and sell it to pay back the money. If Raymond Sacre and Seid Sacre don’t pay the Bank, you have to pay the Bank. Do you understand?”
They either nodded or answered “yes”. I then pointed where they had to sign and they did.
When I had finished explaining the mortgage documents, the mortgage was then signed by the first and second defendants, by Raymond and Seid Sacre and by myself.
I repeated the same process with each of the other pairs of persons named as mortgagors in the mortgage documents, including the first and second defendants. I explained to each pair of persons the documents in the same manner. I recall repeating this process every time. In each case, the persons indicated that they understood what I was saying to them by nodding their heads or saying “yes”. Again, each time I had completed my explanation, the persons named as mortgagors in the mortgage document, Raymond and Seid Sacre and I signed the document.”

15   A variety of attacks were made on Mrs Antunes, but in my view she did conscientiously exactly what she was retained to do. All the appellants swore that they did not know they were putting their houses on the line. She made it clear to them that was what they were doing, and in any event they had all done it before. That was the case put forward before his Honour by both respondents. 16   For the appellants, a different case was put. According to the appellants, all the various members of the Sacre and Anjoul families were having a barbecue at John and Hasna’s Roseville premises, when a lady who was a complete stranger to them walked in, carrying a bag; she said nothing, pulled papers out of the bag one by one, called out the name of each person in turn and asked him or her to come forward; she then said to that person “sign here” and he or she did; she then left and they returned to their barbecue. None of them even said to the others: “I wonder what that was all about.” Even restricting one’s examination of the event to the transcript, their credit must seem more than ordinarily suspect; indeed, in my view, without worrying about credit at all, a Judge hearing their version would reject it on the probabilities. And, as Sheller JA pointed out in argument, there was nothing which would permit a middle ground outcome. However, as I have said, his Honour did make findings of credit, favourable to the respondents and adverse to the appellants. 17   Unfortunately, in coming to his conclusions, his Honour did make a factual mistake. He seemed to be under the impression that the $1.5 million transaction on 31 July 1990 involved a fresh injection of cash, the purpose of which was to enable the purchase of a property at 238 Victoria Avenue, Chatswood. But it did not; and neither the appellants nor the respondents at trial suggested it did; both appellants and respondents agree that his Honour made this mistake. No injection of fresh funds was made or contemplated. The $1.5 million had nothing to do with the property at Victoria Avenue, Chatswood. The purchase of that property had been completed a year before. Indeed, at an earlier part of his judgment (see p.19) his Honour had held: “Settlement of the purchase of 238 Victoria Avenue, Chatswood took place on…..27 July 1989”. 18   One can only conclude that his Honour was distracted both by the complexity of the transactions and the bewildering nature of the evidence. In favour of his Honour, it can be said that at least two of the appellants or their witnesses seem to have made the same mistake. Thus, Mrs Anjoul in the course of her evidence (quoted by his Honour at p.124 of his judgment) said:

“I knew they were giving mortgages over their own homes to secure borrowings to pay for the house at Victoria Avenue”.

And Mr Ray Sacre, the family spokesman, speaking to the barbecue party said (quoted by his Honour at p.120 of the judgment): “The only reason they came was for Victoria Avenue”.

19   It is clear law that where a trial judge makes a finding on credit and also a mistaken finding of fact, the former cannot prevail if it was infected by the latter, in the sense that the finding of credit would not, or might not, be made if the mistake had not been made. Here, the existence of the mistake was but one of several bases supporting the findings of credit. His Honour also went through each of the appellants’ arguments (No one knew Mrs Antunes was coming, she explained nothing, she said nothing more than “sign here” etc) and disbelieved the appellants’ accounts of each on a conventional analysis of the evidence. I am unable to see why the findings on credit should be set aside. 20   There are only two more questions in the case, as far as the Bank is concerned. The third party mortgages are drawn as if they were security for the $358,000 as well as for the $1.5 million. This is a clear mistake. They were never meant to be. An examination of the Letters of Offer makes it clear enough that they were security only for the $1.5 million. Rectification of the mortgages could have been obtained if necessary. Learned Counsel for the Bank made all this clear to Bainton J below, and again to us. In these circumstances the mistake has done nobody any harm. 21   The other question concerns the accuracy of the amounts for which his Honour gave judgment. They are slightly askew. This is non-controversial. 22   As far as the appeal against Mrs Antunes is concerned, it must, on his Honour’s findings that her evidence was entirely credible, fail. The factual case against her, that all she said was “sign here”, was disbelieved. That she was Raymond Sacre’s solicitor, that she accepted a retainer from him and that she fulfilled that retainer, is now apparent. 23   I would direct the parties to bring in appropriate orders for the Court’s approval within seven days. 24   SHELLER JA: I agree with Meagher JA. 25   BROWNIE AJA: I agree with Meagher JA.

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