Borg v Stamatelopoulos

Supreme Court of South Australia
(Civil)
BORG v STAMATELOPOULOS & ANOR
[2022] SASC 61
Judgment of the Honourable Justice Bampton
EQUITY - GENERAL PRINCIPLES - UNCONSCIONABILITY, UNCONSCIONABLE DEALINGS AND OTHER FORMS OF EQUITABLE FRAUD - SPECIAL DISABILITY
The applicant, a short-term money lender, claims a monetary judgment against the respondents and possession of real property (“the property”) owned by them (“the claim’).
Whilst the first respondent was in Greece, the second respondent was called upon to return the monies she had been minding. The second respondent asked a mortgage broker to help her obtain a loan from the applicant. The applicant agreed to loan the second respondent $100,000 for three months. The second respondent, who had a five percent interest in the property, proffered the property as security having remembered she was the first respondent’s attorney pursuant to a deed of enduring power of attorney. The applicant asked the mortgage broker to contact the first respondent in Greece to ensure he was aware his property would be mortgaged to secure the short-term loan.
Following a telephone call with the first respondent, the mortgage broker reported to the applicant and second respondent the first respondent agreed to the registration of the power of attorney and to enter into the short-term loan using the property as security.
The second respondent executed in her name, and as attorney for the first respondent, a loan agreement for $120,000, a declaration as to purpose pursuant to s 13(5) of the National Credit Code, a waiver of independent legal advice, and a mortgage over the property. The monies were advanced by the applicant and disbursed by the second respondent and have not been repaid.
The first respondent denies the claim and the relief sought, alleging the transfer to second respondent of five percent interest in the property was without his consent or knowledge and he did not agree to the use of the power of attorney to loan monies against the property. The first respondent counterclaims against the applicant, alleging the second respondent did not have his actual or ostensible authority to enter into the loan agreement with the applicant.
Where second respondent consents to judgment in terms of the orders sought by the applicant – where first respondent has claimed contribution from second respondent for payment of any amount ordered to be paid by him to the applicant – whether the loan was procured without the first respondent’s actual or ostensible authority – whether the first respondent was under a special disadvantage – whether the loan was procured by unconscionable conduct.
Held: The loan was procured by unconscionable conduct.
Real Property Act 1886 (SA) Part 17; National Credit Code ss 13(5), 111, 112, 113; Australian Securities and Investments Commission Act 2001 (Cth) ss 2CB, 12CA, 12GM; Corporations Act 2001 (Cth); National Consumer Protection Regulations 2020 (Cth) reg 68; Stamp Duties Act 1923 (SA) s 71CA; Powers of Attorney and Agency Act 1984 (SA) s 7, referred to.
Jones v Dunkel (1959) 101 CLR 298; The Commercial Bank of Australia Ltd v Amadio & Anor (1983) 151 CLR 447; Kakavas v Crown Melbourne Ltd & Ors (2013) 250 CLR 392; Stubbings v Jams 2 Pty Ltd & Ors [2022] HCA 6, applied.
Garofano v Reliance Finance Corporation Ltd (1992) 5 BPR 11,941, distinguished.
Powell v Thompson [1991] 1 NZLR 597, discussed.

BORG v STAMATELOPOULOS & ANOR
[2022] SASC 61
Civil

BAMPTON J: This is a tragic tale of a fractured father-daughter relationship. The daughter, a conveyancer, lived beyond her means and spent monies she had been minding for a third party. Following the breakdown of her father’s domestic partnership, the daughter introduced her father to a mortgage broker with whom she was friendly and had a professional relationship. The mortgage broker assisted the father obtain finance to satisfy a property settlement. The mortgage broker facilitated a loan with the ANZ bank (“ANZ”) which records the father and daughter as co‑borrowers (“the ANZ loan account”). The proceeds of the loan allowed the father to refinance an existing mortgage and payout his former partner’s 50 percent interest in real property they owned at Sellicks Beach (“the property”). Upon transfer of the property pursuant to the property settlement, the daughter acquired a five percent interest in the property and the father’s interest increased to 95 percent.
In the months that followed the property settlement, the daughter’s relationship with her father deteriorated. In particular, following the daughter’s request for financial assistance, the father asserted he was unaware the daughter was a co-borrower on the ANZ loan account and denied agreeing to transfer a five percent interest in the property to her. Just prior to departing for Greece in July 2017, the father, who was in receipt of a disability support pension, asked the mortgage broker to help secure his financial position, which included attending Centrelink, making application to refinance the ANZ loan, attempting without success to transfer the daughter’s five percent interest in the property to him, depositing the proceeds of an inheritance into the ANZ loan account, and removing the redraw facility on the ANZ loan account.
Whilst the father was in Greece, the daughter was called upon to return the monies she had been minding. Apparently in a state of distress, she asked the mortgage broker to help her obtain a loan from a short-term money lender to whom they had both previously referred clients. The short-term money lender agreed to loan the daughter $100,000 for three months. The daughter proffered the property as security having remembered she was her father’s attorney pursuant to a deed of enduring power of attorney. The short‑term money lender asked the mortgage broker to contact the father in Greece to ensure he was aware his property would be mortgaged to secure the short-term loan. The mortgage broker, against a background of blurred professional relationships and conflicts of interests, telephoned the father whilst in her bathroom in Adelaide at around 7:00 am one morning. The father took the call having returned home from a night out. The time in Greece was about 1:00 am. The matters discussed during the two to three‑minute call are very much in dispute.
Following the phone call, the mortgage broker reported to the short-term money lender and the daughter. The daughter then registered the deed of power of attorney at the Lands Titles Office. Having done so, the daughter executed in her name, and as her father’s attorney, a loan agreement for $120,000, a declaration as to purpose pursuant to s 13(5) of the National Credit Code (“the Code”), a waiver of independent legal advice and a mortgage over the property. The monies were advanced by the short-term money lender and disbursed by the daughter.
The short-term money lender commences proceedings
On 6 December 2017, the short-term money lender, Frank Borg trading as Frank Borg Pawnbroking, (“Frank”), issued notices of demand to the father, Peter Stamatelopoulos (“Peter”), and the daughter, Joanna Moutzouris (“Joanna”).
As the short-term loan was not repaid, on 22 January 2018, Frank commenced proceedings by way of summons against Peter and Joanna under Part 17 of the Real Property Act 1886 (SA) (“the RPA”). The proceedings were transferred to the general division of the Supreme Court on 7 March 2019.
The pleadings
By his statement of claim, Frank claims:
A.An order that Peter and Joanna give him possession of the property.
B.Judgment against Peter and Joanna in his favour for the outstanding amount of the loan.
C.Interest.
D.Costs of these proceedings on an indemnity costs basis.
By her second defence, Joanna has consented to judgment “in terms of the orders sought in the statement of claim”.
By his third defence, Peter denies liability and entitlement to the relief sought, alleging the transfer to Joanna of five percent interest in the property was without his consent or knowledge and he did not ever agree to the use of the power of attorney to loan monies against the property.
By his second statement of counterclaim Peter alleges Joanna did not have his actual or ostensible authority to enter into the loan agreement with Frank (“the Borg loan”) on his behalf, and as a consequence he is not a party to the Borg loan. Peter alleges the Borg loan was regulated by the provisions of the Code in that the credit was procured to refinance Joanna’s house renovation and outstanding utilities accounts. He further alleges Frank procured a certificate under the regulations to the Code to the effect the loan was for “business purposes” without making any or any reasonable enquiries as to the purpose of the credit. Peter relies upon the provisions of the Code, the Australian Securities and Investments Commission Act 2001 (Cth) (“the ASIC Act”), the Corporations Act 2001 (Cth), the law of agency and equity, and seeks:
1.A declaration the Borg loan was procured without his actual or ostensible authority and orders giving effect to such a declaration including an order that Frank discharge the mortgage registered against the property.
2.A declaration pursuant to s 111 and s 112 of the Code that Frank contravened the key requirements of the Code and consequential orders pursuant to s 113 of the Code declaring the Borg loan void against him.
3.A declaration Frank acted unconscionably in equity and contrary to s 2CB and s 12CA of the ASIC Act and orders pursuant to s 12GM of the ASIC Act and in equity to give effect to such declaration including a declaration the Borg loan is void against him.
4.Costs.
Frank by his second defence to cross action by counterclaim alleges he entered into the Borg loan and mortgage with Peter’s express or ostensible authority under the power of attorney. He further alleges neither the Borg loan nor the mortgage were regulated by the Code and Peter is not entitled to the relief sought.
Peter has also issued a contribution claim against Joanna.
Joanna pleads in her defence to the contribution claim that she assisted Peter to refinance to pay his former partner pursuant to a property settlement agreement and, in turn, Peter agreed he would assist her when she received the call to pay the monies she was minding. Peter denies such an agreement.
ANZ, the first mortgagee of the property, did not wish to be heard in these proceedings.
The purchase of the property at Sellicks Beach
On 24 September 2002, Peter and Dimitroula Polihronas (“Toula”) purchased the property at Sellicks Beach as joint tenants.
The creation of the power of attorney
Peter created an enduring power of attorney on 22 April 2009 (“the power of attorney”) appointing his three children, Joanna, Nicholas Stamatelopoulos (“Nick”), and Alexandros Stama (“Alex”), jointly and severally to be his attorneys. Joanna, Nicholas, and Alex each accepted the appointment.[1]
[1] Exhibit 1D4.
The monies held by Joanna
Joanna pleads in her defence to contribution claim in about 2012 she held a fund of about $150,000 which was payable on demand to a person named George Vlahos (“the Vlahos monies”). Joanna pleads she used the Vlahos monies towards the purchase and development of a house at Flinders Park.
The division of property between Peter and Toula
Peter and Toula separated in 2015 and on 7 September 2016 entered into consent Federal Circuit Court orders regarding division of property which provided that upon Peter paying Toula $126,000 she would transfer her 50 percent interest in the property to Peter.[2] The Federal Circuit Court orders included an order which provided that Toula would advise Peter of a time and date when she would attend Peter’s property in Greece (which he retained under the Federal Circuit Court orders) to collect her personal items.
[2] Exhibit 1D5.
Peter was aged 66 at the time of the Federal Circuit Court orders and in receipt of a disability support pension.
The mortgage broker, the ANZ loan, and the transfer of the property
Peter was represented by the law firm Commercial & Legal in the Federal Circuit Court proceedings. Joanna was employed by Commercial & Legal as a conveyancer. Peter also engaged Commercial & Legal in relation to the conveyance of the property pursuant to the Federal Circuit Court orders. Toula engaged the law firm Janson Lawyers in relation to the Federal Circuit Court proceedings and the conveyance of the property.
Joanna introduced Peter to the mortgage broker Athena Lis (“Athena”) to assist him in obtaining finance to pay Toula the $126,000. A mortgage of $297,000 with the ANZ bank was obtained on 9 November 2016 which records Peter and Joanna as co-borrowers (“the ANZ loan”). An ANZ One account in the names of Peter and Joanna linked to the ANZ loan account (“the joint ANZ One account”) was also opened.
Toula’s 50 percent interest in the property was to be transferred into Peter’s name in accordance with the Federal Circuit Court orders. However, the transfer[3] registered at the Lands Titles Office on 23 November 2016 reveals the transferees are Peter (95 percent) and Joanna (five percent).
[3] Exhibit 1D8.
Joanna pleads in her defence to contribution notice she and Peter orally agreed Peter would convey a five percent interest in the property to her, she would be a co-borrower on the ANZ loan and when she received a demand from George Vlahos the equity in the property would be available to raise funds to meet the demand.
Peter denies knowing about George Vlahos, disputes agreeing to the transfer of the five percent interest to Joanna and contends he understood she was to be a guarantor not a co-borrower on the ANZ loan account.
Peter’s inheritance and his attempts to protect his money
In February 2017, Peter received an inheritance from his mother’s estate (“the inheritance”). The evidence at trial discloses that prior to July 2017 he paid his children, in particular Joanna, “bits and pieces” to assist them. For example, in the period of May to July 2017, he paid Nick $15,000 and Joanna $5,000 from a Commonwealth bank account in his name.
Peter planned to travel to Greece in July 2017 for prostate cancer treatment and a holiday. Peter’s relationship with Joanna deteriorated substantially before he left. The evidence suggests the reason for the deterioration was Joanna’s request for money.
In June 2017, Peter once again engaged the services of Athena. Athena attended at Centrelink with Peter for an interview in June 2017, “looking at [his] options to rent out the family home and live elsewhere and rent”.[4] Athena gave evidence she assisted Peter in transferring certain of the proceeds from his inheritance to the ANZ loan account in order to reduce the balance and lower repayments. Peter instructed Athena to cancel the redraw authority on the ANZ loan account and to remove Joanna’s five percent interest in the property so that he was the sole registered proprietor.
[4] Exhibit P35 (LIS 04.002): “Financial Information Service Record of Interview” prepared by Dept of Human Services dated 26 June 2017.
On 11 July 2017, an ANZ Access Advantage account (“ANZ Access Advantage account”) was opened in Peter’s name on Athena’s request and the sum of $125,000 deposited. On 28 July ANZ confirmed the ANZ loan repayments would be debited from this account.[5]
[5] Exhibit P35 (LIS 04.0034).
Athena made an online application to ANZ on 14 July 2017 on behalf of Peter seeking a loan of $200,000 (“the 2017 ANZ loan application”).
By email dated 14 July 2017,[6] Athena asked a solicitor at the law firm Charlton Rowley (who are Frank’s solicitors in this action) for:
assistance with the TOL for
Peter Stamatelopoulos to take 100% ownership
Currently tenants in common 95% Peter Stamatelopoulos & Joanna Moutzouris 5%
Please advise what you need form (sic) us
[6] Exhibit 1D35.
A draft transfer document transferring Joanna’s interest in the property for nil consideration to Peter was prepared by the solicitor at Charlton Rowley and emailed to Athena on 15 July 2017.
On 20 July 2017, ANZ was instructed by Athena’s office to proceed to consider the 2017 ANZ loan application for new loan amount of $182,000.
On 21 July 2017, Athena and Peter attended the Charlton Rowley offices. During that attendance the solicitor performed a verification of identity and Peter signed a Client Authorisation.[7]
[7] Exhibit 1D35.
It is of note that Charlton Rowley referred to having no contact details for Peter and asked Athena whether he had an email address. Athena responded by email; “Hmm I have to find it”. It appears none was provided to Charlton Rowley.
The draft power of attorney
On 24 July 2017, Athena emailed the Charlton Rowley solicitor stating a power of attorney was needed and “I will be his POA but he leaves tomorrow”. The solicitor prepared a draft power of attorney whereby Peter appointed Athena his attorney (to act in relation to the transfer of the property from Joanna to him).[8] The solicitor forwarded the draft power of attorney to Athena by email on 24 July 2017.[9] However, the transfer of Joanna’s interest did not proceed as Joanna refused to sign the transfer document.
[8] Exhibit P33.
[9] Exhibit 1D35.
On 24 July 2017, ANZ declined the loan application for $182,000 due to Peter “not being able to afford the level of lending sought, concerns that if the property was to become an investment and rental income received his disability support income would be affected, there was no exit strategy, no strong asset position, and he had failed to meet previous approval conditions on the original loan”.[10]
[10] Exhibit P21 (last page).
Athena’s office emailed ANZ on 25 July 2017 as follows:[11]
[11] Exhibit P35 (LIS.04.0036).
Client has opened up separated savings account (as below)
1.We need to coordinate a transfer of $100,000.00 into his home loan and then reduce the balance accordingly to recalculate lower repayments.
2.Link this new account for direct debits
3.link new account as an offset account
If you could please call me to discuss?
The client leaves for Greece tonight and we need to assist him with this before he leaves.
Peter left for Greece on 25 July 2017.
On 26 July, the Charlton Rowley solicitor emailed Athena asking whether the power of attorney was signed. Athena replied, “He left for Greece  no”. The solicitor asked, “is that going to be an issue or can it wait until he returns” and Athena replied: “We have no choice as bank anz declined him As last loan was approved 50/50 ownership Joanna did 95/5 shit hey!!!”.[12]
[12] Exhibit 1D35.
ANZ informed Athena on 26 July 2017, “It will not allow me to link offset just in Peter’s name to joint loan”.[13] On 27 July 2017, Athena asked ANZ whether the account could be linked for repayments without being an offset account. On 28 July 2017, ANZ advised that:[14]
The payments are coming out of the account, but I can not link offset to loan.
Does the customer wish to place funds on loan and he can then redraw when he needs them. So this will minimise his interest.
[13] Exhibit P35 (LIS.04.0035).
[14] Exhibit P35 (LIS.04.0034).
On 28 July 2017, Athena’s office forwarded a redraw deletion authority signed by Peter and Joanna to ANZ.
On 31 July 2017, $100,000 was transferred from the ANZ Access Advantage account to the ANZ loan account.[15]
[15] Exhibit P21 (p 0043 and p 0019).
On 2 August 2017, ANZ informed Athena that $100,000 had been transferred onto the ANZ loan account and the redraw facility deleted. ANZ reported the loan balance was $193,192.54 and payments had reduced to $975.70 per month.

I note by reference to subpoenaed ANZ documents Joanna was provided with copies of the ANZ loan statements by ANZ. There is no record in the ANZ documents indicating Peter was sent copies of the ANZ loan account statements.[16] I infer Joanna received a copy of statement no 9 for the period 7 July 2017 to 9 August 2017,[17] recording the deposit of $100,000.
[16] Exhibit P21.
[17] Exhibit P21 (p 0018-0019).
In an email dated 29 November 2017, Athena reported to Peter’s nephew, Nick Pezos,[18] attending on a solicitor with Peter on 21 July 2017:
before he left for Greece as Joanna had asked him to refinance her 5% share off the title. Cost was $300 I paid and he reimbursed me back.
Nothing happened as he could not get finance and was going to do it upon his return.
We went to a different lawyer as Joanna could not act for him nor her firm as a conflict of interest.
That day we also went to ANZ closed redraw of $100,000 and opened up other accounts for his money to be safe.
[18] Exhibit 1D34.
Athena said Peter wanted his money safe:[19]
Only because she had asked him for the money to pay out Mr George Vlahos and while he was away he didn’t want anything to happen without his knowledge.
[19] T1038.1-3.
Joanna receives a demand from George Vlahos
Whilst Peter was in Greece, Joanna received a demand from George Vlahos. Joanna enlisted Athena’s assistance in seeking a short-term loan from Frank to pay the demand. Frank asked Athena to contact Peter in Greece to obtain his agreement to use the power of attorney to enter into the Borg loan using the property as security. On or about 20 September 2017, Athena phoned Peter. As detailed later in these reasons, Peter and Athena have different versions of their conversation.
The registering of the power of attorney and Joanna’s entering into the Borg loan
On 22 September 2017, the power of attorney was registered at the Lands Titles Office. On 22 September 2017, Joanna entered into the Borg loan with Frank in her name and in Peter’s name using the power of attorney, whereby the sum of $120,000 would be advanced with a lower interest rate of 60 percent and an upper interest rate of 120 percent per annum. The repayment date was 90 days from the date of advance and the security was the property.
Joanna also signed on 22 September 2017:
1.A declaration as to purpose pursuant to s 13(5) of the Code and reg 68 National Consumer Protection Regulations 2010 (Cth), stating that she, as attorney for Peter and in her own right, declared that the credit to be provided to her and Peter by Frank was to be applied wholly for business purposes or investment purposes other than investment in residential property;
2.A waiver of independent legal advice in her own right and as attorney for Peter; and
3.A memorandum of mortgage (“the mortgage”) in her own right and as attorney for Peter, granting Frank a mortgaged interest in the property as security for satisfaction of her and Peter’s obligations under the Borg loan. The mortgage, which expressly incorporated the provisions of a memorandum registered at the Lands Titles Registration Office as number 8774896, was registered on 27 September 2017.
The payment of the loan monies and the withdrawals by Joanna
On 22 September 2017, Joanna, Athena, and Frank attended the ANZ at Woodville North, where Frank withdrew the sum of $119,000[20] from his bank account and transferred it into the joint ANZ One account. Thereafter, on the same day, Joanna dispersed the following sums from the ANZ One account:[21]
[20] The loan comprised $119,000 plus loan establishment fee of $840 and LTO registration fee of $160.
[21] Exhibit 1D17.
·$102,333.79 to Freidrick Vincent, Manila Philippines (to repay the Vlahos monies
·$74.31 to Origin Energy;
·$200 to Baycorp Trust;
·$206.73 to SA Water;
·$297.73 to Toyota Finance;
·$351.85 to City Charles Sturt;
·a withdrawal of $500;
·$600 to J Parasiers
·$1,000 to Origin Energy;
·$1,000 to NAB Cards;
·$3,000 to Optus billing; and
·$3,000 to CBC Adelaide.
On 9 October, Joanna transferred $590 to Comets and on 24 October 2017, transferred:[22]
·$200 to the tax office;
·$750 to Westpac flexi loan;
·$1,250 to Westpac cards;
·$1,644.86 to Optus billing; and
·$2,000 to CBC Adelaide.
All the monies advanced by Frank were spent by Joanna.
[22] Exhibit 1D7.
Peter’s return from Greece
Peter returned from Greece on 22 October 2017. Upon his return, he had meetings with Athena, then Athena and Joanna, and then Frank.
On 30 November 2017, Frank caveated Joanna’s property at Flinders Park.
The notices of demand
On 6 December 2017, Frank issued the notices of demand to Joanna and Peter.
The power of attorney revoked
On 17 December 2017, the power of attorney was revoked by Peter.
Trial commences, settlement terms recorded, settlement collapses, mediation attempted, trial recommences
It was agreed Peter would be dux litus and the trial commenced on 18 March 2019. On 27 March 2019, the Court was informed a settlement had been reached and the terms of settlement were, at the request of Peter’s then counsel, read onto the transcript. However, the settlement collapsed in the weeks that followed.
The parties attempted to mediate the matter without success in October 2019.
Delays in the resumption of the trial were occasioned by Peter’s ill‑health and surgical investigation for thyroid cancer, the COVID pandemic, and Peter’s attempts to obtain legal representation after he terminated the solicitors who acted for him up to the time the settlement collapsed. Peter instructed Campbell Law in August 2020.
The parties confirmed they had no objection to me hearing the continuation of the trial, despite the fact I heard the terms of the failed settlement read on to the transcript on 27 March 2019.
The witnesses
Peter gave evidence and called Toula as a witness.
Joanna, who was self-represented, gave evidence and called her brothers, Nick and Alex. She also called a conveyancer employed by Commercial & Legal, and a partner at Commercial & Legal. The conveyancer’s and partner’s evidence was not of assistance in determining the issues in dispute and is not discussed further.
Frank gave evidence and called his associate, Mark Lawrence, and Athena.
Peter’s command of English and level of comprehension
Before I discuss Peter’s evidence, it is important to detail my impression of Peter and his understanding of English. Peter was aged 69 when he commenced giving his evidence. At the commencement of his evidence when asked how to pronounce his name, he answered, “Peter”. My recollection of the interaction that followed this question was my clarifying question “Peter?” to which he responded “Peter Stamatelopoulos”. This is not reflected in the transcript which provides:[23]
Q.Please take a seat. Now, how do I pronounce your name correctly – is it –
A.Peter. Peter Stama-telopoulos.
Q.Stamatelopoulos. If I don’t pronounce it correctly, please forgive me.
A.That’s fine – excuse me, your Honour, my English is not that best.
[23] T34.5-11.
Not long after cross-examination commenced, Peter asked that he be assisted by a Greek interpreter. He gave evidence on a voir dire, at the request of his solicitor, regarding his level of understanding English and need for an interpreter. I refer to that evidence because it is of significance to his understanding of the transactions that occurred and the documents he signed.
Peter was 14 when he came to Australia from Greece and went to school for six months following his arrival. He said he can read some English and sometimes has problems reading words in English. I noted when asked to read documents in court some words were difficult for him. He said:[24]
A.… The only thing with the documents when they say to me look at this document it doesn’t mean anything to me.
Q.What do you mean by that.
A.Because I can’t read.
[24] T167.14-18.
He told me that when he was in business before his bankruptcy all the documentation and book work was dealt with by his ex-wife, who came to Australia at the age of two and was educated here. Peter speaks Greek at home and does not write in English; if he wants to send an email, he gets someone to write it for him in English “because I haven’t got interpretation in Greek”.[25] Peter’s counsel questioned him as follows:[26]
[25] T170.32.
[26] T164.14-166.6.
Q.You speak English.
A.Yes.
Q.Do you read English.
A.No.
Q.You have signed some affidavits for this court case have you not.
A.Yes.
Q.Can you explain to her Honour what happened with you getting the affidavits from your solicitor, understanding what they said and then signing them. Can you tell her Honour how you did that.
A.The emails I was getting I was going through with my partner. She was reading it out to me and then to agree or not to agree and things were changed. She was asking me if that was right and I would say yes or no and we went through all of those documents. It is words, you know, on the emails we were getting I didn’t understand. Then I was telling her to explain what that word means and it was explained to me in Greek.
Q.The emails were emails of your affidavits. Your affidavits were sent by email.
A.By emails, yes.
Q.Who sent them to you.
A.Steve.
Q.You said that you had them read out to you.
A.Yes.
Q.In English or Greek.
A.English and Greek.
Q.Did you make changes to the email drafts you were sent.
A.Yes.
Q.How would you put those changes. How would you tell your solicitor about those changes.
A.By email. My partner used to read the emails out and we were going through with it if that was right or wrong and I was changing emails if they were right or wrong few things we changed in it.
Q.Did that mean some of the words in English when it was read out to you you didn’t understand.
A.I didn’t understand at all.
Q.Did your partner translate them for you.
A.Translate in Greek, yes.
Q.Before today did you tell your solicitor that’s what you were doing.
A.No.
Q.So you signed the affidavits with your solicitor.
A.Yes.
Q.Can you tell her Honour how that would happen, where you would go and how that would happen and what conversation you had with your solicitor about them.
A.With my solicitor he used to read it out for me and he was explaining to me what the email is for and I agree, something I didn’t, I wasn’t happy I was telling that I’m not happy with it.
Q.There would be changes, is that correct.
A.Changes, yes.
Q.When you say emails do you mean the affidavits.
A.Yes, the affidavit, yes.
Q.The affidavits.
A.Yes.
Q.When you signed them were you in your solicitor’s office.
A.Yes.
Q.Did your solicitor produce the affidavit for you.
A.Yes.
Q.Did the solicitor ask you questions about whether you’d read it.
A.Yes. He was reading the questions out for me.
Q.Did you sign the affidavits.
A.Yes.
It is to be noted Joanna said during the voir dire:[27]
MS MOUTZOURIS:    In respect to the interpreter, as he’s my father, I understand he doesn’t really need an interpreter. It is just lack of reading in the illiteracy side of things and even if he did have a Greek interpreter, his Greek is obviously better than his English but it’s on par. So even some of the Greek words the interpreter may use from a legal point of view, it won’t be understood easily.
HER HONOUR:        So, technical words about for example, an encumbrance?
MS MOUTZOURIS:    Correct.
[27] T183.35.
Peter’s counsel said at the conclusion of the voir dire:[28]
Can I tell your Honour I’ve got some further instructions from my client, in particular following from the other questions that have been asked of him and he now discloses that in fact he’s having problems understanding the questions, not just the documents. Having said that, I am now concerned that he doesn’t have the advantage of an interpreter when that can be rectified. So in those circumstances I withdraw my opposition to an interpreter and it’s my view that having now provided me with that information I ought to ask the court to see if an interpreter can be arranged.
Thereafter, Peter gave his evidence assisted by a Greek interpreter and Frank’s counsel was permitted to restart cross-examination.
[28] T185.2-13.
I also note that Joanna concluded a text message sent to Peter on or about 17 September 2017 as follows: “If you don’t understand what I’ve written ask Toula to read it for you”. Peter said in evidence he got help from Toula, who read the text out for him in English. He did not reply to the message.
Athena said when she was communicating with Peter, she spoke with him in both English and Greek. She said a lot of times if she said something in English, she would repeat it in Greek. She used to be a Greek school teacher and majored in Greek at university. She said, “if somebody is of my native tongue that I think it’s best that I always explain it in both English and Greek”.[29]
[29] T896.37-897.1.
When it was suggested to Athena that the transfer of the property on a 95/5 percent basis was not understood, or that Peter did not understand the full conditions of the ANZ loan, Athena said she explained it in Greek and English and it was her impression Peter was aware Joanna had to help him.
However, Athena spoke in English when she called Peter in Greece on 20 September 2017:[30]
… to tell him about the transaction, that his daughter was in trouble and that we had to take out a short term loan for 100,000 with a private lender, Mr Borg, at 5% per month and that at the end of the day we had to register – utilise the power of attorney and that we would pay it back upon his return when he comes back so we can refinance.
[30] T964.6-13.
Frank said he asked Athena to call Peter to explain the loan Joanna wanted to enter into, as he was comfortable Athena spoke Greek and English and would be able to communicate with Peter. Frank said he had to be a bit wary because Peter was overseas, and he had to fully understand what was going on. Joanna had said to Frank, “look there should be no problem”[31] and Frank said in explaining why he enlisted the assistance of Athena:[32]
I said hang on, I have to clarify all this, I’m not just going to hand over $100,000 without this gentleman knowing and given that the people that were involved I thought she would be the best person to ring him.
[31] T1151.34-37.
[32] T1511.37-1152.3.
Frank said he was comfortable Athena had explained the loan transaction to Peter. He considered Athena was a good person to speak with him because of her background of finance, the past dealings she had had with Peter, and:[33]
… probably his understanding of the lending, whatever she could explain it better because she could speak his language and whatever. Like I said, I never spoke to Mr Stamatelopoulos before, I did not know how good his English was, you know.
[33] T1162.17-22.
Peter gave his evidence in broken English, often misusing words and phrases and misunderstanding questions asked. For example, when asked whether he was working in 2016, he said:[34]
A.No, I was on liability pension.
Q.On a what pension.
A.Liability.
Q.Okay, disability.
A.Disability, yeah, that’s the one.
[34] T39.13-17.
Peter was at times excitable, confused and on occasions appeared evasive. At times he appeared to understand or acknowledge a proposition being put to him and then refute it. I observed he often appeared to nod and say “yes” as he was listening to a question and then on occasions refute the proposition he had appeared to accept. Having closely reviewed the evidence, I am of the view that as English is Peter’s second language, he endeavoured to demonstrate he was following and understanding the questions being asked of him by saying “yes”, nodding, and repeating what had been put to him, not necessarily agreeing with what had been put to him. I also suspect what may be interpreted by others as acceptance and understanding may be based on or tainted by a misunderstanding or inability to fully comprehend a question, an assertion, or a document. Peter would have great difficulty reading and comprehending loan or other transactional documents.
Detailing Peter’s evidence has been a difficult task because of his broken English, his confused answers and the fact questions asked of him often did proceed in a sequential manner, moving from topic to topic. Added to this, he started giving evidence on 18 March 2019 and was in cross-examination when the matter settled on 27 March 2019. Cross-examination of him resumed on 26 October 2020 following the collapse of the settlement, by which time Peter had instructed new solicitors and counsel.
Peter’s evidence
Peter separated from Toula aged 65 and on what he described as a “liability pension”. He meant a disability pension. He said he had been on the disability pension since suffering an injury in 2000. Prior to receiving the disability support pension, Peter worked as a refrigeration mechanic. He said he did not have any qualifications “just learning by trade”.[35] He had a business named “A1 Washers” and “later I was under Peter’s Washing Machines”.[36] He explained he sold A1 Washers and was in partnership when he started Peter’s Washing Machines, which operated from a property at 92 Prospect Road. The Prospect Road property was mortgaged to the Commonwealth Bank. He agreed he signed all relevant paperwork to give effect to the mortgage and bought out his partners’ interest in the Prospect Road property. He agreed the business was trading profitably enough to purchase the Prospect Road property and to purchase a function centre and property at Littlehampton. He helped his ex-wife and Joanna afterhours with the running of the function centre. He agreed the function centre business did not do well and he lost the Prospect Road property and the property at Littlehampton through bankruptcy in 1985/86.
[35] T131.16.
[36] T131.27.
During the bankruptcy, Peter’s Washing Machines operated “under the children’s name”. Whilst he was in business, it was his ex-wife who did all the bookwork. I asked him:[37]
Q.When you were in business, you would have had lots of documents that you need to sign, tax returns and invoicing clients.
A.Yes. I never used to do that.
Q.Who did that.
A.To bill, to check, to fix ... fridges. My ex-wife, she is the one who was doing all the bookwork in all those years. Then my daughter later, when she finish school, she was helping her mother with all the documents.
[37] T170.1-9.
Peter said he did not receive any profits after he became bankrupt from Peter’s Washing Machines. He was asked:[38]
Q.So you got a wage.
A.* There was – how many years later, about three years later I was a little depressed, my shoulders and my back.
Q.* So it was shortly after that that you became injured and you claimed your disability pension.
A.* Yes. That was through depression when I lost everything
[38] T203.19-26 (The asterisk in quoted transcript indicates a question asked or answer given without the assistance of the interpreter).
The creation of the power of attorney
Peter detailed signing an enduring power of attorney in 2009. He said at the time he was going overseas, and he wanted to ensure his family could look after him or sell his property if something happened to him.
Borrowing money to pay Toula

Following a mediation in the Federal Circuit Court, Athena assisted Peter with refinancing in order to pay the agreed sum to Toula. He said as he would not have been able to afford the monthly repayments following refinance, he intended to rent the property and live with family. He said he stayed with Nick for a few weeks. When Peter’s mother died and he was diagnosed with prostate cancer, he moved back into the property.
Peter said attempts were made to obtain refinance from both ANZ and Westpac, but Westpac, “it said no at that time”.[39] Peter said that he understood Joanna was coming “as a guarantor on the loan”.[40] He said Athena told him that she would need to be a guarantor because he could not get the loan on his own as he was a pensioner. Peter gave evidence that when he signed the document,[41] “it was transferred 100% to me not 95 and 5% to Joanna”.[42]
[39] T49.24.
[40] T49.24.
[41] I infer he meant the transfer document when he was applying for the ANZ loan.
[42] T55-17-18.
Peter said he received an inheritance from his mother of $196,000, and “then all the trouble started and I got asked for money and I help her out, I gave a few, I paid some of her debts, $15,000.”.[43] He said he paid half of a debt Joanna owed her brother, Nick. He said, “She was in trouble and she asked her brother for $30,000 and was going to give the money back as soon as she was going to sell her house”.[44] Peter said at the time he paid Nick $15,000, he also paid Joanna $5,000 from his bank account and $1,000 cash.
[43] T51.11-13.
[44] T52.8-10.
Peter understood Joanna had financial difficulty in relation to building a house as she only had $50,000 deposit to buy a block of land.
Peter said Joanna asked for more money in June 2017. He said one day he received a phone call from his son Alex. Peter was sick at the time; he was having tests and could not come to Adelaide. Alex asked if he was going to help Joanna, when Peter said, “No, I can’t help youse anymore, enough is enough”, that is when everything started.[45]
[45] T54.15-20.
Peter thought it was in June 2017 he learned through Athena that Joanna had the five percent interest in the property. Athena said to him “… she got 5% on [the] property”.[46]
[46] T55.1-2.
Peter said upon finding out Joanna a five percent interest, he instructed Athena to prepare some documents. He also said Joanna asked him to take her name off the title and he tried to get refinance to do that. Peter went to Charlton Rowley lawyers with Athena, he saw a lawyer and he signed a paper for the transfer. He said he did not have any money at the time, so Athena paid for the lawyer’s fees with her credit card. Athena said she would drop the “paper” to Joanna at her place of work for her to sign. He then met Athena on Henley Beach Road and “refinance that money to her and I gave that money, 300, I think it was, $300 I paid out”.[47] He meant the fee that Athena had paid for the lawyers.
[47] T56.6-7.
Peter said at no time did Joanna give him any money for her five percent interest. Peter denied ANZ required that Joanna have an interest in the property at the time he obtained the ANZ loan.
Following a discussion with a friend in Greece who is a professor, Peter decided to go to Greece for prostate cancer treatment.
Peter said after separating from Toula, he thought he had all his documents at the property, but the power of attorney was probably “still on my suitcase, but it was, it was in Joanna’s possession”.[48] He said when he came back from Greece in 2017, he found out that the power of attorney had been used to get money from Frank.
[48] T46.24-25.
Peter was asked in examination-in-chief what happened to the balance of the inheritance money. He said he used $25,000 for his trip. He left $18,000 with the Commonwealth Bank. He said he left $125,000 in his personal account. He denied paying his mortgage off with any of the inheritance. He said he learned at some stage the money had been taken out of his personal account and put in a different ANZ account. He described when he went to the bank to find out exactly where the money was, it was sitting on the joint account and the bank manager said to him:[49]
‘Oh, you got $100,000 sitting there. You’d better take it – they can be on the other side, they can take the money’. I said ‘What money you talking about?’ It was $125,000 on that account. And then they can take that money out. Because that money, before I went away, it was secure – the hundred thousand dollars, no-one can touch it. And then really, you know, the manager there says to me ‘You better take the money, because they can be on the other side in the internet – they can take your money’.
[49] T504.13-22.
He said there was a joint account with Joanna because she was a guarantor on the mortgage. He said he told ANZ to close the joint account before he went overseas and Athena closed it for him. However, he then said he knew it was not closed:[50]
I done three attempts to close that account. Because the ANZ Bank was telling me at the time when we had the problems, it needs two signatures to close that account. At the end of the day when I find out it was my signature to close that account, which now it’s closed.
[50] T60.30-35.
Peter said Athena was doing all his documents and, because money was missing off the joint account, he said he wanted to close the account completely and open a new account.
Peter’s evidence about this topic was very confused. The evidence reveals that $100,000 was paid to the ANZ loan account on 31 July 2017.
Cross-examination of Peter by Frank’s counsel
The 2015 ANZ loan application
Peter was cross-examined about matters he deposed to in his affidavit sworn 25 September 2018,[51] wherein he said that at no time did he understand or could he remember how the finance to payout Toula was raised. He said, “Yes, I got my daughter come as a guarantor to secure the loan”.[52] Peter also said that at the time he signed the affidavit he was having treatment for his prostate, he was on medication, undergoing radiotherapy, in pain, depressed and did not know what was happening.
[51] FDN 34.
[52] T211.29-30.
During cross-examination, Peter produced the document received into evidence as exhibit P3. He said the document had been in Toula’s possession not his. This document appears to be a version of a letter sent by ANZ dated 5 December 2015 to Athena in relation to a conditional loan offer, exhibit P5.
Peter’s evidence was confused as to when he first applied for a loan through Athena. His evidence was that everything started in 2015. It was put to him that an ANZ mortgage broker distribution online supporting documentation kit dated 2 December 2015 (“the 2015 ANZ loan application”),[53] which has the same application number as the ANZ letter dated 5 December 2015 and exhibit P3, was an application by him and Joanna as co-borrowers. It was apparent during cross‑examination the 2015 ANZ loan application had not been seen by Peter or his lawyers prior to cross-examination, and counsel for Frank disclosed that it had been obtained from Athena.
[53] Exhibit P4.
It was put to Peter, by reference to exhibit P5, in December 2015 he was seeking a loan of $346,000, comprising two loan amounts. The first amount of $263,000 was to refinance his existing mortgage and pay Toula. The second amount of $81,000 was for Joanna. Objection was taken to this line of questioning whereupon Frank’s counsel said the document was not pleaded as he had only just been provided with the document by Athena. It became apparent attempts had been made to obtain Athena’s documents by Peter’s solicitors before trial. Documents were then delivered by ANZ and Athena in answer to subpoenas issued mid-trial.
Exhibit P3 dated 5 December 2015 makes no reference to Joanna or to the second loan amount of $81,000. In contrast, the copies of exhibit P5 on ANZ and Athena’s files do. Peter said that he obtained exhibit P3 and provided it to Toula when she requested proof the funds were available for payment to her. When asked how precisely it came into his possession, he said he asked Joanna for it and Joanna asked Athena to obtain a copy[54] which Joanna gave to him. When asked why Joanna would have the document, Peter said:[55]
* Well, they are friends, they used to see each other every day, and I ask for this and they provide that document for me.
[54] T218.24-25.
[55] T372.14-16.
Peter was asked why Joanna’s name did not appear at the top of or in exhibit P3, Peter said, “Yes, the loan I was going to borrow on my own”.[56] It was put to him there was no application for a loan on his own. He asserted he did attempt to obtain funding on his own but, because he was on a pension, he could not borrow the money and was told he needed a guarantor. It was put to him the 2015 ANZ application, predates exhibit P3. He asserted the signatures appearing on the 2015 ANZ loan application did not look like his signatures and there were “few little bits missing out of my signature”.[57] He then agreed they were his signatures. He asserted the 2015 ANZ loan application had never been properly explained to him. Significantly, in my view, he said in the following exchange:[58]
Q.* So you’re saying that you signed it and you provided the documents at the time but it was never explained to you properly now.
A.* Yes. With this borrowers or guarantor, they was saying guarantor – I was coming guarantee for the loan.
Q.I put it to you that you knew well the difference between a guarantor and a co‑borrower as at December 2015.
A.* No.
It was put to him that, as at December 2015, he could not get a loan on his own and his answer was:[59]
* Yes. On the time when I’ve got this paper, yes I was on my own and then they produce me this papers on later days.
[56] T226.31.
[57] T228.13-15.
[58] T229.8-16.
[59] T230.26-28.
Peter said he did not give Athena authority to speak to Joanna. He asserted Athena simply spoke to Joanna and dealt with her for the purpose of the ANZ loan application made only in his name. He said:[60]
I didn’t give permission to [Athena] to talk to my daughter. I was talking with my daughter and she was organising with [Athena], the application.
[60] T373.32-34.
Peter maintained that he did make an application in December 2015 for a loan amount of $263,833.
It was put to him that exhibit P3 was a forgery. Peter said:[61]
[61] T380.23-27; 381.3-10.
A.* Forgery, yes.
Q.* You accept that it’s forgery.
A.* Yes. I’m not really sure but – well, I’m asking for one thing and the production of the document, I think it is forgery.
…
Q.According to you that it’s a forgery and you know it’s a forgery, do you accept that.
A.* Well, it probably is a forgery.
Q.* So you accept that it’s a forgery.
A.* I don’t think that’s a forgery, that’s my proof. I don’t think that’s a forgery.
Q.* So you don’t think that P3 is a forgery.
A.* No.
Peter denied he knew if Joanna’s name was on the approval for finance Toula would not have cooperated in respect of the separation. He also denied manipulating the ANZ letter to Athena 5 December 2015[62] to remove Joanna’s name and reference to the $81,000 loan.
[62] Exhibit P5.
It would appear exhibit P3 has been altered to delete reference to Joanna and the $81,000 loan. Peter’s apparent initial acceptance of it as a forgery is confusing. However, there was no evidence Peter has the wherewithal or computer skills to alter the ANZ letter dated 5 December 2015 to the version that is exhibit P3. It is to be noted his evidence was that he obtained exhibit P3 from Joanna who obtained it from Athena. There is no record of any documents being forwarded to Peter by Athena and Joanna appeared to be the contact person between Peter and Athena.
The 2015 ANZ loan application was withdrawn in early 2016 as agreement had not been reached with Toula.
I note at this juncture the 2015 ANZ loan application[63] at pages five and six, is headed as follows:
ANZ Mortgage Broker Distribution – Online Supporting Document Kit
Applicant/Guarantor Declaration (p2 of 2)
Under the heading “Declaration Signature” on page six, the following appears:
Declaration required in respect of all products applied for pursuant to this application. It is to be signed by all applicants and intending guarantors.
(Empahsis added)
This reference to guarantor, bearing in mind Peter’s level of comprehension and his reliance on Athena and Joanna at the time, supports his evidence that he understood Joanna was a proposed guarantor for the ANZ loan.
[63] Exhibit P4.
I make the same observation in relation to the 2016 ANZ loan application.[64] Again, pages five and six of that application completed by Athena and signed by Peter and Joanna are headed “Applicant/Guarantor Declaration”.
The 2016 ANZ loan application
[64] Exhibit P15.
Peter acknowledged before he settled with Toula he badly injured his arm when he smashed a window to get into the property. He agreed Joanna organised an ambulance for him, she was very concerned for his safety and thereafter he lived with her for a period of time. Following his injury, he and Joanna agreed it was necessary to finalise arrangements with Toula. Peter then reached a settlement with Toula and Athena acted as broker regarding the 2016 ANZ loan application.
Peter acknowledged his signature appears on exhibit P1, an ANZ credit proposal incorporating preliminary assessment dated 7 September 2016. He said he could not recall signing it and never asked for $349,486.17. Peter asserted he was only after $126,000 to pay out Toula. He said, “Why did I need the money if I’m a pensioner?”.[65] He said:[66]
* What did they saying to me, ‘Sign here, sign there’. They never explained documents, I never saw the price 349,000 on it.
He also said in response to the following question:[67]
Q.* So you didn’t read the documents, you say.
A.* No, if I could have read the document, I would rely in Athena Lis. I thought she was truthful, that’s what I was asking for, $126,000 to pay Ms Polihronas out. What did I need the $349,000, for what purpose?
[65] T333.1-2.
[66] T340.5-7.
[67] T340.8-12.
Peter denied wanting a greater sum to be advanced in order to assist with Joanna’s financial issues and said there was no agreement to pay any of Joanna’s debts. Peter also said:[68]
A.* Well, they got me to sign. There’s a lot of documents are signed and then signatures appear afterwards.
HER HONOUR
Q.* So what do you mean, a lot of documents are signed.
A.* Well, like Athena Lis, I go there she says to me ‘I’ve got your loan. Sign here sign there.’ I trust her. My daughter was looking after my – I thought she was looking after me and Athena I thought was truthfully ... sign here sign there and I signed and then whose document is now, like those documents I’m looking now I never saw them before, like my signatures appear there.
[68] T349.15-27.
It was put to him that ANZ required Joanna to be a co-borrower and he said, “* Yes, as a guarantor to get the loan because I was on the pension”.[69] Peter asserted he was just told to “sign here, sign there”. He denied he signed any documents where he was aware that Joanna was a co-borrower.[70]
[69] T385.32-33.
[70] Exhibit P13.
Peter agreed Joanna had access to the joint ANZ One account. He denied as part of the refinancing he granted her a five percent interest in the property. He maintained Joanna’s interest was obtained without his knowledge or consent. It was put to him the condition of ANZ finance was that she was to have an interest in the property and he said, “* Well, no-one explained to me at the time”.[71]
[71] T390.5.
It was also put to him he authorised Joanna to facilitate the transfer of Toula’s share in the property to him and Joanna. Peter said, “No, no, your Honour, I never gave the authority to give the 5% to the second defendant”.[72]
[72] T390.10-11.
Peter agreed ANZ approved a loan of $297,000. He was asked whether his signature appears on the ANZ memorandum of mortgage dated 31 October 2016.[73] He acknowledged the mortgagors listed are Joanna and him, but he did not recall signing that document.
[73] Exhibit P7.
Peter’s evidence on this topic was confusing, however, from the following exchange I am of the view Peter meant to say “Well, I did not know that” where it is recorded that he said “Well, I did know that”:[74]
[74] T336.28-337.4.
Q.I put it to you that it was a condition of the ANZ Bank advancing you the money, that your income be supplemented by Ms Moutzouris’s to deal with the issue of serviceability.
A.* Well, if that’s the case, yes.
Q.* Yes.
A.* Yes.
Q.It was also a condition of the ANZ making the advance, that Ms Moutzouris be granted or demonstrate a legal interest in the property as a partial owner.
A.* Well, I did know that.
Q.* You say you don’t know that.
A.* No-one explained to me exactly what that mean. Not even a ..., not even the second defendant.
Peter asserted he first found out Joanna had a five percent interest in the property when Athena told him following a family argument a few days before July 2017.
Peter travels to Greece
Peter said he travelled to Greece in July 2017 and Toula arrived a month later. I asked whether they got back together, and he said:[75]
* No, our agreement was what we settled. She had the right to come to Greece once more to get the belongings left in Greece, …
[75] T391.16-18.
Peter asserted he did not get back together with Toula in Greece, that they stayed as friends.
Peter agreed Joanna sent him a message while he was in Greece, “* It was asking for money and I didn’t reply, I didn’t say nothing”.[76] He was asked whether he contacted anyone following that message and he said “No”. He was asked whether he contacted his sons and he said:[77]
* That was later when Athena Lis rung me when I was in Greece and she said to me ‘Your daughter, she’s got a – she’s sick’. I don’t know if she was in the hospital although she says to me ‘Your daughter, she is very sick, she is very depressed, she’s got financial problems’ and I said see what I can do. That’s when I rung my son, Nick, up and told him ‘Get your brother. Go and see your sister. Tell me exactly what’s going on? I want to find out what’s happening’, and then I rung my sister, Maria, as well the same time to get my other sister, the older sister, to go and see, well, we work something out. The reply I got back from my sister, Maria, everything has been taken care of. Mark – because before I left for overseas, she was asking for more money and I said no, because at the time, with my son, my youngest son, Alex rung me, they had a meeting there, the two brothers and the sister, and Alex rung me, he said ‘You going to give any more money to Joanna?’ and I said ‘No, enough is enough’, but the way I said it, still they ring me to tell me exactly how do I feel after the procedures I had for my prostate, I was bleeding that day and I couldn’t drive to come down to see them, and I said ‘No’. Then what the second defendant, she got so mad and says to me ‘I’ll help you and I want my name out of it’. That’s when I went to Athena Lis to get the – that was telling to refinance again and then Athena Lis, she took me to Luke Rowley’s chambers and I saw the lawyer there who prepare some documents to remove the 5% before I went overseas. And then Athena Lis, see what her were telling me, ‘You have to get refinance again’ and that’s what I was doing to get refinance, to get 5% off, which is – and then when I’ve got a letter from – Athena Lis rung me at the time, she says ‘You can’t get a loan on your own, you have to involve your sons in if you’re going to get a refinance to get ... the other 5%’. And then when she take me to Luke Rowley to remove 5% and then she couldn’t get the loan. Then once she told me she couldn’t get the refinance again for me and I said to her ‘Leave everything here as they are now until I come back from Greece’.
[76] T392.6-7.
[77] T392.14-393.16.

Peter said that, before he went overseas, Joanna asked for $20,000 to finish off her house, to finish the pool, and a few other bits and pieces. He said “no” because enough was enough, he could not afford it as he is a pensioner. Peter said he had already given Joanna $20,000 when he got the inheritance from his mother. I assume he meant the $15,000 he paid to Nick and the $5,000 he gave to her.
It was put to Peter that Joanna, since 2015, had been talking to him about her financial problems and, in particular, there would come a point when a significant loan would be called upon that she would have to repay. Peter said, “* She had a sort of a problem, she was building a house at the time, what financial problems she had?”.[78] Peter did not agree Joanna had discussed a loan with him she had to repay.
[78] T397.12-13.
Peter asserted the power of attorney permitted his attorneys to borrow any money, but only for the purpose of using it for his property and his affairs. It was put to Peter that if one of his children was in trouble in Australia and they needed to use or to borrow against his house, they could use the power of attorney. Peter said, “* Yes. From my authority, yes”.[79] He said:[80]
* Well if I knew about it. I probably said that ‘if she rings me’. If you could ring me, ring me and tell me exactly what was happening’ then she could have wait for another month I was back from overseas, we can discuss it and we can do something about it but what she did I could not forgive her.
[79] T444.29.
[80] T444.34-445.1.
Peter said Athena rang him at about 2:00 am one morning when he was in Greece (“the late-night phone call”). He had just got home, was waiting for his grandchildren to arrive home, and sitting out the back:[81]
… and I had a few drinks that night, to tell you the truth. She rang me and says to me your daughter is – she told me ‘Your daughter is very, has got problems, financial problems’, but we never discussed anything else. On the end of our conversation she asked me if I had a power of attorney. My words was ‘Yes, I’ve got a power of attorney, it’s uncomplete and it’s not registered’.
[81] T453.33-454.2.
Peter thought the power of attorney was incomplete because one of his sons, had not signed it. Peter asserted if someone had said to him, “Your daughter’s in financial problems and needs $120,000 or $140,000”, he could not afford that money because he was on the pension and not working. He said:[82]
… It was no way in the world. When I was coming back, I was going to sell my house and move close to the family. I was going to get something smaller and move close to the family.
Peter denied saying anything to Athena about registering the power of attorney. He asserted that it was raised by Athena, not him.
[82] T455.33-37.
It was put to Peter that Athena rang him to tell him Joanna had found a short-term lender to lend money to fix her problems, she wanted to use the property as security and would use the power of attorney to effect that. Peter said, “* It’s never been discussed that”.[83] It was put to him that that was the reason the topic of registration was raised. Peter said, “didn’t explain to me”.[84] He maintained he did not agree the power of attorney could be registered. He said he told Athena he would see what he could do. To that end he approached family to find out exactly what was happening, and his sister told him “‘Don’t worry about it, everything is being taken care of”.[85]
[83] T461.27.
[84] T461.30.
[85] T462.15-16.
It was put to Peter Athena told him a loan would be obtained in the order of $100,000-odd that would be high interest and that he could refinance upon his return from Greece. Peter said, “* No, nothing had been discussed”.[86]
[86] T462.21.
Peter denied saying to Athena “Do whatever you need to do to fix the problem”,[87] and said:[88]
A.* I said ‘I’ll see what I can do, if we can help it, we try to help it’, but I never discussed her to whatever she wants to do, who is Athena Lis? She’s a broker is she? Well, they are supposed to come from family members to have a word with one of my sons to ring me to tell me exactly what was – ... ever, ever discuss what sort of finance problems she had with her brothers, why Athena Lis?
Q.* Because Athena Lis was your finance broker.
A.* It was my finance broker, yes.
Q.* And she’d obtained loans for you on several previous occasions.
A.* Only once.
[87] T462.27-28.
[88] T462.29-463.3.
It was put to Peter as Joanna had a five percent interest in the property, a joint bank account with him, and was a joint borrower, it was reasonable for Athena to contact him because their affairs were intertwined. Peter said “Yes, in trouble, yes”.[89] Peter again said:[90]
* Okay, just before I went overseas I find out illegally she took the 5%, okay, we will come to your chambers, we will prepare the documents to remove the 5%. We closed all bank account, joint accounts, me and Athena Lis went together, she closed all the credit card and the banking accounts, that’s my understanding, if there is anything to do with my home loan I thought she was going to remove the 5%, but she didn’t.
[89] T464.3.
[90] T464.6-13.
Peter said his affidavit sworn 25 September 2018 makes no reference to a discussion about the power of attorney with Athena during the late-night phone call because he had since remembered the conversation with Athena. He maintained he told Athena he would call her back when he found what was happening after speaking with his family.
It was put to Peter his sons had deposed in statutory declarations he had said during phone calls with them, following the late-night phone call, they were to do whatever they could to help Joanna. Peter denied speaking with Alex, as deposed to by Alex and said he only spoke to Nick and told him; “Get together with your brother, go and see your sister, and let me know what’s happening”.[91] Peter said Nick did not rang back, and he got the information from his sister, Maria, and it was his understanding that his sister or sisters would help Joanna out.
Peter returns from Greece
[91] T475.28-30.
Peter said, upon his return from Greece, he received a phone call or message from Athena wherein she told him that she had his refinance ready, and for him to come in to sign the documents. Peter said:[92]
A.*She was talking the refinance I was asking before I went overseas.
Q.Well that’s what you thought she was talking about.
A.*Yep.
Q.Yes, but all she said, on your version of events is, she’s got your refinance organised, come in.
A.*Come in and discuss it, and we sign – we did sign some paper – we did sign paperwork at the time with a friend from Melbourne, he witness those papers. That’s the papers I want to see, was purple papers ... I don’t know what she got me to sign that day.
[92] T481.1-11.
Peter agreed he attended Athena’s office on 5 November 2017 and signed some purple papers. He signed the document but did not read it. He was referred to a BankWest loan application seeking an amount of $336,000.[93] Peter said that was not the loan amount he was seeking. He was asked about the reference in the BankWest application to the purpose of the loan being for refinancing obligations owed to Frank. Peter said he knew nothing about Frank.
[93] Exhibit P35 (LIS 03.0002-03.0022).
Peter said it was after signing the purple papers which he understood were to “remove the five percent”, he went to his sister’s house for a coffee. Whilst explaining what had happened during the meeting with Athena, his sister told him to “Find out if you got a caveat on your house”.[94] Peter rang Athena while he was with his sister and said, “Can you tell me if I got a caveat on my house?”. Athena told Peter she did not know and would find out for him. Athena rang him back two hours later and said, “Yes you have got a caveat on your property”.[95] Athena told him the caveat was put on by, “You don’t know him, he’s a nice guy, his name is Frank Borg”.
[94] T72.3.
[95] T496.24-25.
Peter asked Athena to make an appointment to meet with him and Joanna. Peter detailed what transpired in the meeting which took place 6 November 2017:[96]
The day after, it was the day after I went there to Athena Lis’s office, Joanna come to Athena Lis’s office and when I find out I had – I was told I had a caveat still on my house, I didn’t know I had mortgages and I said to Joanna and I said ‘What’s happening here?’ and what she said to me ‘What I done, I done it because I was - had a big financial –’, and I said to her ‘What have you done with all the money?’.
Her answer was to me ‘I don’t know’ and she got up and left, and her husband was supposed to be there, make the appointment with the husband to be there, the husband didn’t show up.
[96] T496.30-497.4.
It was put to Peter that there was no caveat on his property and Athena would not have said that to him. Peter said that that is what he was told.
Peter agreed he and Toula attended a meeting at Frank’s office. He said Athena was supposed to be there at the same time. He could not remember whether he made the appointment or Athena made the appointment to see Frank. Peter introduced himself and said to Frank, “I heard you got caveat on my house”[97] and Frank said “No, I haven’t got a caveat on your house. I’ve got mortgage on your house” and “We use your power of attorney”.[98] Frank said that they had registered it. Peter asked Frank, “How come you put a mortgage on my house. You didn’t put a mortgage on her house”.[99] Frank said that Joanna’s house was not worth anything and her husband would not sign anything. Peter said to Frank, “we’ll see what’s going to happen”[100] and “I mean if you give her money we’ll see who is going to be responsible. That’s the way I put it to him”.[101]
[97] T501.10-11.
[98] T501.12-13, 16.
[99] T501.18-19.
[100] T501.25-26.
[101] T501.32-33.
It was put to Peter that conversation never occurred, and he told Frank that he need not worry or be concerned because he was going to refinance the property. Peter said:[102]
It’s not my loan. I said to him ‘If it is not my loan how are you going to get the money – if I give you the money how am I going to get the money from her.’
[102] T502.6-8.
Peter gave evidence about drawing down $100,000 from the ANZ loan account on 30 November 2017 and transferring it to his ANZ Access Advantage account in his sole name. He then returned Frank’s call. During the call, Frank accused him of taking his money.
It was put to Peter he instructed his nephew, Nick Pezos, to go and see Frank. Peter said, “No, that’s where we going to get – Frank Borg is very good friends with my nephew”.[103] Peter denied instructing his nephew to offer money to resolve the matter.
[103] T507.9-10.
Peter denied he was fully aware of his obligation to Frank when he returned from Greece.
Peter confirmed he reported Joanna to the police, alleging fraud against her.
It was put to Peter he had consistently tried to assist his family and, in particular, his daughter, by trying to raise money to satisfy her financial obligations. Peter answered:[104]
* Well no, I never assist – family, you want me to go to the details? She had all the help she needs because she never took it. She offered a house for free to give, she didn’t accept it. She offered a house to go and live for $150 a week instead of paying $6-700 a week. She didn’t want it. That moneys where she spent, I want to know what’s she done with all that money, how much money was holding or we borrow from George Vlahos? Can someone tell me how much it was?
[104] T509.17-25.
Peter agreed Toula’s views about how much he helped his family had caused tension between him and Toula. It was put to him that every time he helped Joanna, Toula disapproved. He said, “* Not all the time. Even she help a few times as well with her money, and promised they were going to pay it back, which she never receive any money”.[105]
[105] T510.13-15.
Peter denied making a number of applications with Joanna as co-borrower seeking money to satisfy Joanna’s liability and denied those applications were explained to him by Joanna and Athena.
It was put to him that while he was overseas he tried to help Joanna by agreeing to the Borg loan. Peter said he did not know anything about the loan. It was put to him that when he came back to Australia he realised if Toula knew he had agreed to loan further money at the risk of the property, it would cause tension between him and Toula. Peter said, “* Toula, she know nothing about it but that loan”.[106] Peter denied he was in a difficult position and was forced to choose between Toula and Joanna. Peter denied resiling from his obligations.
[106] T511.25.
Peter denied he was aware the loan he applied for before he went to Greece had been declined and it was not possible to get a loan in his own name.
Cross-examination by Joanna
In cross-examination by Joanna, Peter asserted Joanna told him she was coming in as a guarantor to secure the ANZ loan because he was on a pension. Peter denied having any discussions with his sons about refinancing at the time he needed to comply with the property settlement agreement with Toula.
Joanna put to Peter he knew full well that if Toula knew Joanna was going to have an interest in the property she would not sign the transfer. Peter said, “* What’s the difference to her. She was moving out completely”.[107] Peter denied instructing Joanna not to let Toula’s lawyers know she was going to have a five percent interest in the property. Peter said, “* No. I never – never – I said to her that Moutzouris is coming as a currenter [guarantor] to help me out to get the loan now”.[108]
[107] T553.32-33.
[108] T558.11-13.
Joanna asked Peter what he said to her when they met at Athena’s office. He answered, “* What’s going on, Joanna – and then I asked you, well, what sort of money we looking for? Were you looking for?”.[109] Peter denied the first thing he said was “I’m not helping you unless you apologise to Toula”.[110]
[109] T561.31-33.
[110] T561.34-38.
Joanna put to Peter the power of attorney was created so she and her brothers could do what they needed to in order to be able to look after his affairs. Peter agreed saying, “* My affairs. If something happens to me, yes”.[111]
[111] T565.7.
Joanna put to Peter the only reason that they were in court was because he did not tell Toula she was on the title and she had helped him refinance. Peter said Toula knew nothing about it until all the trouble started when they came back from overseas.
Joanna put to Peter he knew she had to pay back $102,000 she had been holding and it was on that basis she helped him to refinance, knowing he was going to help her when a demand was made by George Vlahos. Peter said:[112]
* Yes. What she said to me at the time, she was going to use $50,000 of the loan she had. I don’t know if it was a loan or it was holding money or where the money come from I don’t really know, and says the loan will come beforehand, they ask for the money, the 50 – once she bought the block of land that’s when everything come up, I said ‘Where are you going to find the money to put $50,000’ supposed to pay the block of land, it was land and house together and says I’m holding some money she was holding some money, I don’t know from who, how you got the money I didn’t know and I’m going to use $50,000 to put a deposit for the house and if the loan come beforehand before I finish the house, once I’m going to finish the house can you help me then but once I finish the house I can revalue the house to pay that money back.
[112] T568.12-27.
Peter said he did help, “* And I pay, and I pay your brother and I gave you 5,000, that ... help”.[113] Peter said that he transferred her $5,000 and gave her $1,000 cash.
[113] T569.19-20.
Joanna asked Peter about the meeting that occurred with her brothers prior to Peter going overseas. Joanna said “we wanted you to come down so we can discuss where we were at with things, we realised that you were talking again with [Toula], we did, we realised that was happening and we just wanted to – but you didn’t come down but we rang you”.[114] Peter agreed Alex rang him “* And he asked me if I was coming down, instead of asking me how did I feel after my tests all my tests”.[115] Peter asserted:[116]
Alex says to me ‘Are you going to give any more money to Joanna?’ And I said ‘No, fucking enough is enough’ that was my words.
[114] T570.29-33.
[115] T571.2-4.
[116] T571.7-9.
Assessment of Peter
Frank submitted Peter gave the impression of being unsophisticated and the unwitting victim of Joanna, Athena, and Frank, whereas he has a reasonable level of sophistication and perhaps more. I am satisfied Peter’s comprehension of English, his ability to read and comprehend transactional documents is limited. As a consequence, I am not satisfied he fully understood the transactions the subject of this trial. I have no doubt he did not read the documents he signed, because of his English literacy difficulties. I am satisfied he trusted Joanna and Athena when the ANZ loan applications were made in 2015 and 2016, and when the property was transferred. Following the demise of his relationship with Joanna, in July 2017, he put his trust in and acted on Athena’s advice. Peter’s evidence has to viewed against my assessment of his language disadvantage discussed earlier in these reasons.
It was submitted that Peter gave four different accounts of the late-night phone call with Athena. Whilst each account provides more details than its immediate predecessor, I am unable to make an adverse finding about Peter’s credibility. I am unable to prefer Athena’s account of the late-night phone call. She is not impartial, she admitted not providing all the terms and conditions of the proposed Borg loan, did not know the amount to be advanced would be $120,000, does not know how powers of attorneys work, has no contemporaneous record of the late-night phone call, and felt under pressure to make sure Peter could help Joanna. In the result, I have concluded Peter was not given the benefit of independent, competent, and impartial advice regarding the use of the power of attorney to enter into the Borg loan.
Dimitroula Polihronas
Toula referred to the Federal Circuit Court mediation which resulted in the settlement and consent orders she entered into with Peter in 2016. She said it was a condition of the orders she transfer her 50 percent interest in the property to Peter for the sum of $126,000. She described how, during the mediation, when the settlement was achieved, the Registrar asked Peter whether he had the funds available to enter into the agreement. Peter went outside to ring his broker. When he returned, he said he could not get in touch with his broker, and he rang his daughter who was going to call him back. His daughter rang back and told him the funds were there and to go ahead and sign the consent orders.
Following the consent orders, Toula signed a Lands Title Registration Office transfer document (“the transfer document”). She identified the document, dated 7 November 2016, which records her as the transferor and Peter as the transferee, as the transfer document giving effect to the Federal Circuit Court settlement. Toula said she was shown a document by Peter’s former solicitor in these proceedings which records she transferred a 95 percent interest to Peter and five percent to Joanna. Having been shown that document, Toula obtained a certified copy of the Lands Title Office transfer form held by Janson & Co who represented her in the Federal Circuit Court proceedings[117]. Toula said it is a copy of the transfer document forwarded to Commercial & Legal in 2016.
[117] Exhibit 1D1.
Toula said she understood, the stamp duties declaration pursuant to s 71CA of the Stamp Duties Act1923 (SA) she signed on 4 October 2016, to be a declaration to the effect that she was transferring her 50 percent to Peter.[118]
[118] Exhibit 1D24.

Frank agreed he was relying on Athena. When it was put to him that she was acting for both parties at the time – that is, Athena was acting for Peter and Joanna – Frank said, “I suppose you could look at it that way”.[358]
[358] T1166.8.
Frank said Joanna was not really distressed when seeking the loan. Joanna told him she had to give the money to the gentleman who needed it for a “settlement or whatever” and the money was going to Asia. Frank said if Joanna had property available as security, “believe me, I would have taken it”.[359]
[359] T1167.29-30.
Frank said, having heard Athena’s evidence during the trial, he was of the view she should have probably taken more care in her work.[360]
[360] T1171.7-10.
Frank confirmed he did not read the power of attorney. Frank agreed his reference in his affidavit[361] to having read the power of attorney with Mark was wrong. He said Mark read it out to him. When it was put to him his evidence was wrong, he said, “I’m a bad boy. I worded it wrong. Sorry. I worded it wrong”.[362] He explained if he worded it correctly, he would have said:[363]
I got Mark Lawrence to look at the power of attorney, read it, and explain to me, could we do the deal, yes or no, and he has told me as long as Mr Stamatelopoulos gave Mrs Moutzouris authority, that she would be able to use the power of attorney. That’s what I was led to believe. If I’ve done it wrong, I’ve done it wrong. That’s what I was led to believe.
[361] Exhibit P38.
[362] T1177.5-6.
[363] T1177.10-16.
Frank also confirmed Peter did not know Joanna had asked for $120,000. Frank was asked whether Athena said she had spoken to Peter about a mortgage. Frank said Athena reported she told Peter, “that we had to use the property as security to borrow the funds of $100,000 for a short term on 5% from Frank”.[364] Frank said that was pretty well all that Athena said, and he was quite happy with that. He said he was comfortable and trusted Athena. I asked Frank:[365]
Q.What about having telephone link-up, you and Athena in the same room, ringing Peter in Greece.
A.To be completely honest, I didn’t even think of it at the time. I thought I’d give – you know, Athena come down to help Mrs Moutzouris, I thought well, you know, ‘You know the guy, you’ve spoken to him, you know him on a friendly basis, give him a ring. I didn’t know if he was gonna feel intimidated, he didn’t know who the hell I was that was gonna lend his daughter that kind of money and put a mortgage on his property, you speak with him, that way –’, like I said, ‘– make sure that he’s comfortable’.
Q.It would have given you a bit more insurance though.
A.Well, I honestly thought that I could trust Mrs Lis and she would relay the message that I wanted her to speak to Mr Stamatelopoulos.
[364] T1173.6-9.
[365] T1173.23-38.
Frank also confirmed the use of a power of attorney to enter into a loan contract is unusual. Frank asserted when Peter came back from Greece and met with him in his office, “I knew 100% he was fully aware of everything”.[366]
[366] T1175.13-14.
In response to whether he made enough enquiries of Joanna to make sure she was able to pay the loan back, and whether he asked about her husband’s income, what the house would be worth, what borrowings she had, etc, Frank said:[367]
To be completely honest with you, I didn’t realise that she was actually in debt. I just thought she had to pay this business partner or whoever it was back this money for some deal that she did when she was in business. I didn’t realise that she had other financial, you know – all I was told from Mrs Lis that they would be able to refinance.
(Emphasis added)
[367] T1182.17-23.
When asked whether he suggested Joanna get legal advice, he said:[368]
She had the opportunity, I will be completely honest with you, I've been doing this 17 years, when someone sits down in front of me and they know that I am going to give them the money and I say to them 'Hey listen, if you want to, don't sign, go and get some legal advice', do you know how many people have done that.
[368] T1183.3-8
Frank did not tell Athena to let Peter know he could get legal advice if he wanted to.
When asked what he would say about Joanna having used the money loaned for school fees, Toyota Finance, paying credit cards, living expenses, he said, “I lend just for business purposes only”.[369] He then said:[370]
They’ve had my money for three years and I’ve been waiting here for two and a half years to get up here, I’m not here to sell Mr Stamatelopoulos’ house, I don’t even want no interest …
Someone here owes me $120,000, maybe her or him, I’m not looking for no interest.
[369] T1184.15.
[370] T1184.18-22, 34-35.
Frank confirmed Athena did not tell him Peter had sought her assistance prior to going overseas, in trying to transfer Joanna’s interest in the property to him. Frank also confirmed Joanna did not tell him Peter was trying to remove her interest from the title of the property. He said if he knew that, there would be no loan as there would be two red flags.
Assessment of Frank
I accept Frank’s evidence other than his assertions about Peter’s awareness of and agreement to the use of the power of attorney and the Borg loan.
Submissions
Joanna’s submissions were, in effect, attempts to give further evidence. As such, I will proceed on the basis that she supports the submissions made by Frank.
Frank relied on the evidence given by Athena regarding her late-night phone call with Peter and the events Athena and he said transpired upon Peter’s return from Greece.
Frank submitted Joanna and Peter were engaged in dealings in 2015 and 2016 which represented a common purpose and mutual benefit. To support this submission, he referred to the 2015 and 2016 ANZ loan applications. Frank contended that in agreeing to co-borrow on the ANZ loan, Joanna exposed herself to a monetary liability in the sum of $297,000. Frank also contended that Joanna and Peter, from time to time, restructured their financial arrangements in order to obtain a benefit for one of them, or mutually (including the transfer of an interest in the property to Joanna to reduce or avoid stamp duty). Frank also referred to Peter living with Joanna and, from time to time, assisting Joanna in a financial sense by contributing capital to her benefit such as to discharge her liability to others (including his other children). Frank referred to Joanna performing acts of service to Peter’s benefit. For example, notwithstanding she obtained no benefit from the ANZ loan, she agreed to remain as co-borrower on the understanding that Peter would assist her repay the Vlahos monies. Further, through her law firm she performed conveyancing services on behalf of Peter, and she assisted with the refinance of the property.
It was submitted Joanna was comfortable being a borrower with Peter because there was security provided in respect of the borrowings, and she believed Peter had agreed to assist her when it came time to repay the Vlahos monies. This, on my assessment, was a fall back “buffer” for Joanna when ANZ declined to loan the amount requested in the 2016 ANZ loan application.
Frank submitted Athena was acting as Peter’s finance broker in arranging the Borg loan, including during the late-night phone call on 20 September 2017. Frank referred to Peter’s acknowledgement of this in his evidence. In my view, Peter was acknowledging Athena was his broker and had been his broker. I do not infer his evidence to be an acknowledgment he authorised her as his broker to agree to the registration of the power of attorney and the Borg loan. Athena denies acting as Peter’s broker and said she was merely acting as a friend during the late‑night phone call. Having heard Athena’s evidence, I was left with the very clear impression that she made the late-night phone call for the benefit of Joanna and Frank rather than Peter.
Frank argued the Borg loan represents the discharge of Peter’s obligations to Joanna (monetary or otherwise), arising by virtue of the common purpose and mutual benefit. He further submitted the discharge by Peter of his obligations to Joanna was a sufficient benefit such that it cannot be said Joanna was acting solely to her own benefit in taking the Borg loan. He argued Peter received a direct benefit from the Borg loan as a matter of law because it was paid into the joint account.
Frank submitted the execution by Joanna of the Borg loan documents for and on behalf of Peter was a valid use of the powers contained in the power of attorney. Frank submitted, absent fraud or forgery, he has an indefeasible title as a registered mortgagee in respect of the property under the mortgage by virtue of the operation of s 67 of the RPA.
Frank referred to the ratification clause in the power of attorney which he submitted ratifies the acts of Joanna purportedly done under the power of attorney. Frank also submitted the authority obtained from Peter during the late-night phone call with him constitutes an express variation or express authority to vary the terms of the power of attorney to permit Joanna to obtain the Borg loan. He submitted it was given to Joanna through Athena as Peter’s finance broker and agent.
Frank said that irrespective of whether Joanna deployed the power of attorney within power, Peter should be bound by the terms of the Borg loan and mortgage having regard to the applicable principles of authority, ratification, and agency. Frank submitted the issues in this matter should be resolved in a manner similar to Garofano v Reliance Finance Corporation Ltd,[371] where it was held that the mere acceptance that a signature is forged will not invalidate a transaction where it was actually authorised by the registered proprietor. Frank referred to the observation of Meagher JA (Priestley and Mahoney JJA agreeing) in Garofano that there was a long history of mortgages being executed by or on behalf of Mrs Garofano and her husband. The most recent mortgage to Reliance Finance Ltd was said to bear the purported signature of Mrs Garofano as forged by her husband. The Court affirmed a finding that Mrs Garofano had, in fact, authorised her husband to execute a mortgage on her behalf, having regard to the fact that her husband was in the habit of forging her signature and had admitted as much to her. He intercepted her mail and possessed her unrevoked power of attorney, that when the proceedings for possession under a forged mortgage had commenced, Mrs Garofano authorised him to fix it all up for her. She trusted her husband with her certificate of title when the subject mortgage was discharged. Mrs Garofano knew the mortgage could be discharged only from a further mortgage of a relevant property and it was therefore appropriate to draw the inference that she actually authorised her husband to enter into the mortgage.
[371] (1992) 5 BPR 11,941 at 11,944.
Peter’s situation has no correlation to that of Mrs Garofano. The power of attorney had never been registered or used prior to its use to transact the Borg loan. He received no benefit from the Borg loan. It was abundantly clear to Joanna and Athena, prior to his departure for Greece, that Peter did not want to give Joanna any further money and wanted to extricate himself from involvement with her as a co‑borrower and co-owner of the property. There was no question of special disadvantage applying to Mrs Garofano. It is also to be noted Mrs Garofano, whilst leaving the management of her affairs to her husband, had “some specialist training in real estate transactions and generally understood the concepts involved in ordinary conveyance”.[372]
[372] Garofano v Reliance Finance Corporation Ltd (1992) 5 BPR 11,941 at 11,942.
I am not satisfied there was a situation of common purpose and mutual benefit between Peter and Joanna, and if there were, any such common purpose and mutual benefit would have to be underpinned by Peter’s understanding and informed consent.
Frank referred to the fact that Peter did not contact Joanna or Athena, notwithstanding that on his evidence there was a discussion about the use of the power of attorney when he spoke to Athena. Frank relied on the fact that Athena’s evidence was to the fact that Peter met with Athena on 5 November 2017, following his return from Greece, and discussed repayment of the Borg loan and signed the BankWest application which referred to payment of the borrowings to Frank. He referred to Peter meeting with him on 30 November 2017 and discussing repayment of the Borg loan, and only querying how he could ensure that Joanna repaid the Borg loan. He also referred to the fact that Peter instructed the solicitor, Craig Roberts, to contact Joanna to try and reach agreement as to repayment of the Borg loan. Frank alleged Peter instructed Nick Pezos to contact him to try and negotiate repayment of the Borg loan.
Frank asserted the actions of Athena and Joanna have been entirely consistent with persons who genuinely believed they were acting with Peter’s authority and consent. He contended Peter’s actions, whilst in Greece and upon his return, were consistent with someone who authorised Athena and Joanna to do certain acts, was comfortable that Joanna was operating under the power of attorney for and on his behalf, and who appreciated that he had obligations to repay the Borg loan. Accordingly, Frank submitted that Peter should be bound by the Borg loan.
Discussion and findings
The meeting with Peter after his return from Greece
In my view, Peter’s behaviour following his return from Greece is consistent with a commercially unsophisticated person with Peter’s characteristics, labouring under a special disadvantage (as discussed below), trying to sort out the problem that enveloped him. He may well have said he will pay Frank or sort out the problem. Bearing this in mind, and his evidence about not reading documents, it is understandable, for example, he signed the BankWest application with its reference to Frank Borg (if it was on the application when he signed it), mistakenly thinking it was an application to refinance only the ANZ loan he had tried to organise before he left for Greece. It is to be noted that in signing the BankWest application Peter purportedly declared the 30-year loan was wholly or predominantly for business purposes or investment purposes.
Jones v Dunkel[373]
[373] (1959) 101 CLR 298.
Frank asks that an adverse inference be drawn by Peter’s failure to call Craig Roberts, Nick Pezos, Maria Pezos, and George Vlahos. In my view, having considered all of the evidence, the failure of Peter to call Craig Roberts, Nick Pezos, Maria Pezos, and George Vlahos is not sufficiently material to lead me to draw inferences adverse to Peter. With respect to the solicitor, Craig Roberts, I accept Peter’s evidence regarding the reason for the creation of the power of attorney. With respect to Frank’s assertion that Peter instructed Craig Roberts to contact Joanna to try and reach agreement with him as to the repayment of the Borg loan, it is Joanna who deposed in an affidavit, she “received a call from Mr Craig Roberts his then solicitor and tried coming to some resolution”.[374]
[374] Exhibit 2D1.
The pre-conditions for the operation of the principle in Jones v Dunkel[375] have not been satisfied. I would not expect Craig Roberts, Nick Pezos, Maria Pezos, and George Vlahos to be called by Peter rather than by Joanna or Frank.
[375] (1959) 101 CLR 298.
What was the purpose of the loan?
Joanna admits in the defence to contribution notice the Borg loan was for her use and benefit. I find the Borg loan was for Joanna’s benefit solely, and for her own personal use. The loan monies advanced by Frank into the joint ANZ One account were used to repay the Vlahos monies, all of which Joanna had spent on personal expenses. The payment into the joint ANZ One account is no protection for Frank. Upon deposit of the Borg loan monies on 22 September 2017,[376] Joanna promptly repaid the Vlahos monies and transferred to various payees around $10,000. By 24 October 2017, Joanna had spent the Borg loan monies and the balance of the ANZ One account was $4.46.
[376] Comprising $119,000 plus loan establishment fee of $840 and LTO registration fee of $160.
The Vlahos monies may have been characterised as the proceeds of or related to a business transaction, if Joanna held them without dispersing. Upon dispersing them for non-business purposes to purchase and develop her property and for personal expenses,[377] they lost that business characterisation. Joanna admitted she lived beyond her means and suffered financial stress. I find, having regard to her evidence and the transactions recorded in her daughter’s NAB account, Joanna used the Vlahos monies for personal not business purposes.
[377] As pleaded by Joanna in her defence to counterclaim.
I am satisfied that, had Frank made reasonable enquiries, he would have discovered the Borg loan was not for a business purpose. As Joanna’s “financial person”, I find Athena would have known or had access to documents in her own files, which include Joanna’s daughter’s NAB statements, recording how Joanna dispersed the Vlahos monies.
The declaration as to purpose of the Borg loan executed by Joanna in her own right and on behalf of Peter was a misrepresentation by Joanna.
Special disadvantage
Athena was tasked by Joanna and Frank to call Peter in Greece. Whilst Athena thought she was impartial, and Frank considered she was an independent third party; she unequivocally was and is not. I reiterate, I cannot use her evidence with respect to the meetings and telephone calls unless it is supported by other evidence I accept.
I find Peter’s comprehension of English and his ability to read and comprehend transactional documents limited. As a consequence, Peter’s understanding of and informed consent to the transactions the subject of this trial:
1.are doubtful in respect of the ANZ loan requirement that Joanna be a co‑borrower and have a registered interest in the property; and
2.clearly do not exist in respect to registration of the power of attorney and entry into the Borg loan.
I am satisfied Peter trusted Joanna and Athena when the ANZ loan applications were made in 2015 and 2016, and when the property was transferred. Following the demise of his relationship with Joanna in July 2017, he put his trust in and acted on Athena’s advice. Joanna’s, Athena’s, Mark’s, and Frank’s evidence about their impressions of Peter’s understanding has to be viewed against my assessment of his language disadvantage discussed earlier in these reasons.
Athena’s files comprise a morass of email trails with ANZ and not one file note of a telephone call or meeting with, or email or letter to Peter.
I find most of the communications regarding the 2015 and 2016 ANZ applications took place between Joanna and Athena. Athena, I infer at Joanna’s instruction, asked ANZ to send all correspondence to Peter and Joanna to Joanna’s PO box address. Athena was well acquainted with Joanna’s financial position as she had been her “financial person for numerous years”[378] and knew Joanna required money, in particular, when the 2016 ANZ loan application was made.
[378] T634.33-635.2.
Joanna, in the context of her strained financial position and need for “a buffer” to pay the Vlahos monies, should have referred Peter to another conveyancer in another firm at the time of the property settlement with Toula in late 2016. Joanna should not have referred Peter to Athena, a finance broker with whom she had a personal and professional relationship. Although Joanna thought she was helping Peter, this was a matter that required finance brokers and conveyancers at arm’s length. Had Peter retained a neutral finance broker and conveyancer, perhaps the ANZ requirement that Joanna be a co-borrower and co‑owner could have been independently explained to him and that explanation documented.

Athena was aware of ANZ’s views about Peter’s and Joanna’s ability to service a loan when:
1.ANZ informed her by email dated 19 October 2016 it was “only willing to consider a $ for $ refinance and cashout to payout 3^rd party – total lending $278K. No further cashout can be supported given scorecard…”;[379] and
2.on 28 October 2016 when ANZ emailed her saying “please note I could not go past the maximum loan amount of $297,000 – the application has an adverse credit score so this is the maximum we would consider”.[380]
[379] Exhibit P21, page 276.
[380] Exhibit P35 (LIS.08.249).
Athena was also aware ANZ declined the 2017 ANZ loan application made by Peter for $182,000. The 2017 ANZ loan application recorded the property had a value of $400,000, recorded an asset of $150,000 held in another financial institution (which I assume was the inheritance), and recorded the ANZ loan had an outstanding balance of around $295,000.
The payment into the ANZ loan account of $100,000 occurred on 31 July 2017. Peter left for Greece on 25 July 2017. There is no note on Athena’s file detailing Athena’s discussions with Peter or ANZ or letter from Athena to Peter confirming what they had discussed and his instructions regarding his financial affairs before he left for Greece. It is understandable Peter’s evidence about the $100,000 was confusing. There is no evidence he was told anything about the transfer of $100,000 after he left for Greece.
Athena had given Peter advice prior to him going to Greece and had attended with him at Centrelink. She had assisted him in attempting to transfer Joanna’s interest in the property to him, and to that end attended with him at Charlton Rowley lawyers. They could not effect the transfer and Athena suggested Peter leave it, and sort it out when he returned from Greece. Peter’s evidence, supported by Athena’s evidence, is to the effect he had unfinished business when he left for Greece which he intended to conclude upon his return from overseas. That unfinished business was applying for refinance and removing Joanna’s interest in the property. Having regard to Athena and Peter’s evidence on this topic, it is understandable Peter thought Athena had organised the loan he was trying to obtain in July 2017 when he spoke with her upon his return from Greece.
Athena is a friend and professional associate of Joanna’s, who has acted as broker for Joanna and her husband, and as a broker for Peter and Joanna (noting Peter’s assertion he understood Joanna would be a guarantor on the ANZ loan), who provided advice to Peter in July 2017, and who knew Peter did not want to give money to Joanna and wanted to keep his money safe.
Athena also had a professional relationship with Frank.
Athena considered she was the one to speak with Peter because, “obviously I could speak both Greek and English but I wasn’t his daughter and I’m not Mr Borg so I was somebody who was impartial”.[381] Her evidence makes clear she was more concerned for Joanna than Peter:[382]
I was there to help them, that’s absolutely correct and I felt that it was in their best interest for me to get involved because I was not only a friend of all three parties but I considered them part of the family and I wanted to make sure that if Joanna was in trouble Peter could definitely help her …
(Emphasis added)
[381] T963.27-29 (Emphasis added).
[382] T1062.20-25.
It is against this background she made the late-night phone call to Peter in Greece. In the circumstances, Peter required independent, competent, and impartial advice regarding the use of the power of attorney and the entering into the Borg loan. Athena was not the person to provide impartial, independent or competent advice.
Peter gave evidence he told Athena during the late-night phone call he would call her back after he spoke to his family. Crucially, Athena gave the following evidence about the late-night call:[383]
… when I told him everything and he told me yes, he did say he was going to call me back the very next day and he never did.
Athena said she did not follow up Peter when he did not call as she:[384]
….didn’t think about calling him after he didn’t call back because I gave the information to Joanna and to Frank and then, you know, Joanna may have called him to say thanks and find out the rest of the stuff. I remember – my position there, yes, I might be the responsible one that I took that upon myself to help both Frank and Joanna. At the end of the day though I was not the one facilitating this for Joanna, I’m trying to help the situation in a very extreme urgent position that she was in and I did feel sorry for her and of course, you know with her dad helping, that was great.
(Emphasis added)
The fact Peter said he was going to call Athena back suggests Peter had not concluded his discussion with Athena.
[383] T1056.9-11.
[384] T1056.25-36.
Athena’s usual practice was to explain documents in Greek and English if somebody is of her native tongue. She said the appointments with Peter were at times a couple of hours to go through everything. Yet she had a two to three‑minute conversation in English with Peter during the late-night phone call. She did not send a text to Peter confirming their conversation or make a contemporaneous record of what was discussed.
Athena put Joanna’s interests ahead of Peter’s and did not act in his best interests. She purported to obtain Peter’s informed consent to the use of the power of attorney and the Borg loan oblivious to her conflicts of interests. Neither Athena or Joanna informed Frank about the state of Peter’s and Joanna’s relationship prior to Peter leaving for Greece, or that Peter was trying to have Joanna’s interest in the property transferred to him. Athena did not tell Frank about the preparation of the draft power of attorney by Charlton Rowley, or the declining of the 2017 ANZ loan application.
Joanna did not tell Frank about Peter refusing to give her money before he left for Greece, or that her text to him[385] was unanswered.
[385] Exhibit 1D16.
Frank, unfortunately, relied on what he was told by Athena and Joanna. He did not know Peter and Joanna were “blueing”[386] or that Joanna was in debt.
[386] T1150.11.
Athena should have disclosed to Frank she had a conflict of interest and declined Frank’s request she speak to Peter.
Joanna’s and Athena’s conflicts of interests would be obvious to any onlooker. Frank was concerned about Peter’s knowledge of the short-term loan Joanna wanted to enter into. He was aware he was a pensioner and was overseas. He said he did not know how good his English was. Unfortunately, he relied on Athena without inquiring into her relationships, both personal and professional with Peter and Joanna.
Further, it should have been patently evident to Athena how inappropriate the Borg loan was given ANZ had declined Peter’s loan application in July 2017, raising concerns about his ability to service a loan, his status as a disability support pensioner with no prospect of employment, there being no exit strategy, no strong asset position, and the failure to meet previous approval conditions on the original ANZ loan. Overlaying this was Athena’s knowledge of Joanna’s strained financial situation and inability to borrow against the property she was building on with her husband.
I am satisfied in the circumstances of his difficulties with English literacy, his misguided trust in Athena, the lack of proper explanation during the late-night phone call from Athena, the lack of independent financial or legal advice regarding the use of the power of attorney and the Borg loan, that Peter was under a special disadvantage which seriously affected his ability to appreciate the significance of Athena’s two to three-minute conversation and make a judgement as to his own best interests regarding the matters she mentioned.[387]
[387] The Commercial Bank of Australia Ltd v Amadio & Anor (1983) 151 CLR 447 at 462.
Unconscionable conduct
Whatever Joanna and Athena believed about Peter’s state of mind at the time of the ANZ loan, they were both aware by July 2017 that Peter disputed agreeing to Joanna being a co-borrower on the ANZ loan and acquiring an interest in the property. Both knew at the time of the late-night phone call Peter trusted Athena. Joanna and Athena knew Peter was vehemently against giving Joanna any more money and wanted Joanna’s interest in the property transferred to him. Athena, a mortgage broker, and Joanna, a conveyancer, both had a working knowledge of loan transactions and conveyancing. Joanna gave evidence she knew how banks worked. They were both in a stronger position to Peter when it came to knowledge of matters of finance. Frank knew Peter was overseas, was a pensioner and language may be an issue. He unwisely entrusted the task of obtaining Peter’s consent to Athena. He unwisely accepted without further question Joanna’s declaration as to the purpose of the loan and the impression she conveyed about her relationship with Peter. Frank “looked at the council rates and the valuation from the ANZ” for the property and he “had a look at the ANZ, Mr Stamatelopoulos was making regular payment”.[388] Further, reasonable inquiries of Joanna and her “financial person”, Athena, would have revealed her financial situation was strained. A request to inspect statements recording the deposit of the Vlahos monies would have led to inspection of Joanna’s daughter’s NAB account and the raising of Frank’s suspicions regarding the use to which Joanna had put the Vlahos monies.
[388] T1156.3-9.
At the time of the late-night phone call, Athena said she felt she was under pressure as result of the demand on Joanna for the Vlahos monies. She considered Joanna’s position was “very extreme urgent” and she felt sorry for her. At the time of the late-night phone call, Peter laboured under a special disadvantage, had returned from a night out, had a few drinks, told Athena he would call her back after he spoke to family, and did not receive independent financial or legal advice regarding the use of the power of attorney and the Borg loan.
The power of attorney
The use of the power of attorney, the declaration as to purpose, the waiver of independent legal advice, the Borg loan agreement and the mortgage were not adequately explained to Peter. By Athena’s own admission, she did not know all terms and conditions of the Borg loan and made no mention of the mortgage. Further, if she did mention the loan amount of $100,000, the amount advanced by Frank and recorded in the Borg loan agreement is $120,000.
There can be no suggestion the Borg loan was for Peter’s benefit. It was to his disadvantage.
In my view, Peter did not provide his free, fully informed consent to the use of the power of attorney to enter into the Borg loan. As such, Joanna did not have Peter’s authority to execute, as his attorney, the declaration as to purpose, the waiver of independent legal advice, the Borg loan agreement or the mortgage.
The execution of the declaration as to purpose, the waiver of independent legal advice, the Borg loan agreement and the mortgage by Joanna as attorney for Peter by Joanna was not a valid exercise of the power of attorney and was not authorised by Peter. Joanna acted in breach of s 7 of the Powers of Attorney and Agency Act1984 (SA) in failing to exercise her powers as attorney with reasonable diligence to protect Peter’s interests. She failed to obtain Peter’s informed consent and entered into the Borg loan for her own personal gain and not for the purposes of Peter’s property or personal affairs.[389]
[389] Tobin v Broadbent (1947) 75 CLR 378 at 401 (Dixon J); Powell v Thompson [1991] 1 NZLR 597 at [25]-[30].
Conclusion
Athena impudently thought she was the person to speak to Peter. In reporting back to Joanna and Frank, she committed Peter, who had health issues, no prospects of employment, whose only income[390] was the disability support pension, whose only Australian asset was the property (with a value of approximately $420,000 in September 2016[391] and subject to a mortgage in September 2017 of around $193,000[392]) to increasing his liability by $120,000 plus Frank’s high interest to around $313,000 plus interest. Whilst Joanna gave evidence that she would service $120,000 of any refinance she and Peter were able to negotiate, none of the details were discussed with Peter.
[390] I note there is some evidence he may have rented or intended to rent the property.
[391] Exhibit P21, page 314.
[392] Exhibit P21.
Frank alleges that as at 8 February 2021, Peter and Joanna owed him $302,794 in respect of the loan of $100,000 and Joanna owed him an additional $60,558.96 in respect of the $20,000 extra she loaned. Peter is exposed to a liability to Frank of $302,794, plus Frank’s interest from 8 February 2021 to date, plus the ANZ loan which in September 2020 had a balance of around $180,000. It is very likely the ANZ loan and the Borg loan exceed the value of the property even in the current property market.
Joanna and Athena engaged in conduct which took unfair or unconscientious advantage of the opportunity created by Peter’s special disadvantage in order to enter a transaction to serve Joanna’s ends, thereby depriving Peter “of the ability to make a judgment as to what is in his best interests”.[393] Frank, without actual knowledge of Peter’s special disadvantage, was concerned about Peter’s consent being obtained to the use of the power of attorney to enter into the short-term loan. I am satisfied Frank was aware of the possibility that unfair advantage may be taken of Peter’s special disadvantage and/or “was aware of facts that would raise the possibility in the mind of any reasonable person” that may occur.[394]
[393] Kakavas v Crown Melbourne Ltd & Ors (2013) 250 CLR 392 at [6]; The Commercial Bank of Australia Ltd v Amadio & Anor (1982) 151CLR 447 at 462 and 467 (Mason J).
[394] Ibid.
Joanna’s, Athena’s, and Frank’s conduct in obtaining Peter’s purported consent to the use of the power of attorney and the Borg loan amounted to unconscientious exploitation of Peter’s special disadvantage.
Peter has established he is entitled to “relief against an unconscionable attempt to enforce legal rights”[395] because Joanna and Athena knew of his special disadvantage and Frank had sufficient appreciation of matters that would raise the possibility in the mind of any reasonable person of exploitation of Peter’s vulnerabilities.
[395] Stubbings v Jams 2 Pty Ltd & Ors [2022] HCA 6 at [46].
I find Joanna, Athena, and Frank acted unconscionably contrary to equitable principle. The Borg loan was procured by unconscionable conduct. As such, the mortgage must be discharged and the Borg loan declared unenforceable as against Peter.
Having found it is unconscionable in equity for Frank to insist upon his rights under the Borg loan and mortgage, it is unnecessary to consider s 76(8) of the Code or s 12CB of the ASIC Act.
To borrow Mark and Frank’s flag analogy; there were not one or two red flags, there was a bunting of red flags circling entry into the Borg loan.
Declarations and orders
In my view, practical justice between the parties requires that Peter be returned to a position where he has the property, subject only to the ANZ loan, free of obligation of possession and forced sale, as he had prior to the unconscionable transactions. Joanna has had the sole benefit of the $120,000 advanced under the Borg loan. She has consented to judgment in terms of the orders sought by Frank in the statement of claim.
Frank’s claim
1.Frank’s claim against Peter is dismissed.
Peter’s contribution notice against Joanna
1.I make no order on the contribution notice.
Peter’s counterclaim
I make the following declarations and orders:
1.Joanna, Athena, and Frank acted unconscionably in equity.
2.The loan agreement dated 22 September 2017 was procured without Peter’s actual or ostensible authority.
3.The loan agreement dated 22 September 2017, by which Frank agreed to advance the sum of $120,000, is declared invalid and unenforceable and set aside as against Peter.
4.The mortgage by Peter and Joanna to Frank dated 22 September 2017 and registered at the Lands Titles Office on 27 September 2017 (registration number 12800287) to secure the sum of $120,000 is declared invalid and unenforceable and set aside as against Peter.
5.Frank is to forthwith do all things necessary to cause any security of Peter given under the loan agreement dated 22 September 2017 to be discharged including but not limited to causing registered mortgage number 12800287 insofar as it relates to Peter’s interest in the whole of the land comprised in Certificate of Title Register Book Volume 5235 Folio 525, situated at Sellicks Beach to be discharged.

[2022] SASC 61

24 June 2022