Frank Papalia and Julie Rance v Giuseppe Romeo
[2011] NSWSC 696
•06 July 2011
Supreme Court
New South Wales
Medium Neutral Citation: Frank Papalia & Julie Rance v Giuseppe Romeo & Anor [2011] NSWSC 696 Hearing dates: 16 & 25 February and 20 June 2011 Decision date: 06 July 2011 Jurisdiction: Equity Division Before: Sackar J Decision: 1. Motion to set aside the judgment dismissed
2. Defendant to pay the plaintiff's costs of motion
Catchwords: CONSENT - Judgment - Setting Aside - Principles Applied Legislation Cited: Uniform Civil Procedure Rules 2005 Cases Cited: Deputy Commissioner of Taxation v Meredith (No 2) 2008 NSWCA 133, (2008) 75 NSWLR 462
Donnellan v Watson (1990) 21 NSWLR 335
Field v Shoalhaven Transport [1970] 3 NSWR 96Texts Cited: Watts & Reynolds (2010) Bowstead and Reynolds on Agency, 19th Edition, Sweet and Maxwell: London Category: Principal judgment Parties: Frank Papalia & Julie Rance - plaintiffs
Giuseppe & Mary Romeo - defendantsRepresentation: S Docker - Plaintiff
D Allen - Defendants
Shaw Reynolds Bowen & Gerathy
Sydney Law Practice P/L
File Number(s): 1010/211436
Judgment
These proceedings were commenced by Notice of Motion filed on 26 October 2010 in which the first and second defendants (Mr and Mrs Romeo) sought an order for the review of the decision of the Registrar pursuant to Rule 49, Division 4 of the Uniform Civil Procedure Rules 2005 and to have set aside a judgment entered on 1 October 2010 against both of them in favour of the plaintiffs in the sum of $3,156,491, with interest and costs.
Although the motion was filed on behalf of both defendants I was informed at the commencement of the hearing that the second defendant (Mrs Romeo) no longer sought any relief.
Factual Background
On 29 April 2010 the solicitor acting for the plaintiffs wrote to each of the defendants demanding repayment of the amount of $3,435,314.30 on or before 6 May. The letter to each defendant was in identical terms.
The letter asserted that the defendants had entered into a deed of loan with associated mortgages on 16 December 2009. It further asserted that in breach of agreed arrangements the defendants had failed to pay monthly payments of $34,852.92, which were to commence on 25 September 2009.
On 3 May the plaintiffs' solicitor sent a further letter to the defendants to inform them that proceedings would be commenced in the Supreme Court in the event of there being non payment and it sketched the relief that would be sought including a judicial sale of property.
On 5 May a letter was sent to the plaintiffs' solicitors. It purports to be from the defendants and has two signatures on the second page purporting to be those of the first and second defendants. The letter indicates that certain properties were in the process of being sold and that there may well be a surplus subject to sale prices realised. In relation to a property at 235 Powderworks Road, Elanora Heights, there is reference to the likelihood of a re zoning and sub-division of it, in which event six vacant blocks would be available for sale, the letter estimated at $1.2 million each. If that were to occur it was asserted that the plaintiffs should expect repayment. However it was pointed out that without the re zoning and sub-division, sales would be unlikely to produce sufficient funds for the total repayment of the loans. The letter concluded:
"We trust your Clients will understand that we intend to make every possible effort to see them repaid."
On 30 June the plaintiffs' solicitor filed a statement of claim. The pleading contains a very detailed set of allegations setting out a history of numerous dealings between the plaintiffs and the two defendants, and numerous mortgages entered into from time to time by them. There are then pleaded allegations in relation to a deed of loan and sixth mortgage. It is asserted that the plaintiffs and the defendants entered into the deed of loan pursuant to which the plaintiffs agreed to forebear to sue the defendants provided that the defendants paid interest in the minimum amount of $34,852.92 per month on the 25 th of each month from 18 September 2009 for two years and then repay the principal sum. It is asserted that there has been a default under the deed and sixth mortgage by the failure of the defendants to make payments as agreed.
That pleading was served personally on the first defendant on 14 July and the second defendant on 16 July 2010.
The third defendant in the proceedings was the Permanent Trustee Australia Pty Limited (Trustee). The Trustee had commenced separate proceedings for possession. Judgment for possession was entered on 14 September 2010. As I understand it application to set aside that judgment has been the subject of proceedings before McCallum J, and the decision is reserved.
On 28 July the plaintiffs' proceedings were listed for directions before the court. On that occasion Mr Dominic Carbone solicitor appeared on behalf of the defendants. The proceedings were stood over for further directions on 18 August.
On 18 August when the proceedings were re-listed there was no appearance on behalf of the defendants. The proceedings were stood over to 15 September.
On 18 August the solicitor for the plaintiffs wrote to Mr Carbone requesting that an appearance be filed with his client's defence as a matter of urgency. In the event that he no longer had instructions he was invited to indicate as such so that the plaintiffs' solicitors could correspond directly with the defendants.
On 15 September the proceedings as planned were listed for directions. Mr Carbone appeared for the defendants. Ms Kirsten Farmer, who appeared on that day for the plaintiffs sets out a number of conversations in her 23 November affidavit which she had with the representatives of various parties and importantly Mr Carbone. Her affidavit was read without objection and she was not required for cross- examination. She states that she had a conversation with Mr Carbone in which he said:
"Mr Carbonne: My clients do not have any defence to the debt claim made by your clients and will consent to judgment.
Ms Farmer: If it is the case that your clients will consent to judgment for $3.1 million I would prefer the short minutes of order to record that the first and second defendants consent to judgment if that is their position."
Ms Farmer made some amendments to short minutes of order that had already been prepared to give effect to Mr Carbone's concession.
She states she had a further conversation with Mr Carbone to the following effect:
"Ms Farmer: Do you want to telephone your clients and get their instructions on these short minutes?
Mr Carbone: Yes I will do that."
Mr Carbone left the room and when he returned he said the following:
"I will sign those short minutes of order."
Ms Farmer, Mr Carbone and a Mr Rugless, solicitor for the fourth and sixth defendants, and Mr Shields, representing the seventh defendant, all signed the short minutes. The short minutes indicate in paragraph 2 that the first and second defendants were consenting to judgment on the plaintiff's claim.
Ms Farmer then had a conversation with all present and a Mr Sunman the solicitor for the third defendant (Trustee) by telephone who also consented to the short minutes.
The matter was called before Registrar Walton who was informed of what had occurred. She was handed the signed short minutes and she made orders accordingly.
On 16 September Ms Farmer wrote to Mr Carbone enclosing the consent judgment and requesting he return it for execution within 7 days.
She did not receive a signed copy of the consent judgment but as he had signed short minutes Ms Farmer determined that she need not have Mr Carbone sign any further document. Accordingly on 1 October she filed the consent judgment with the court. The judgment was entered on the same day.
The Contentions of the First Defendant
In the written submissions filed on behalf of the first defendant it was put that the defendant relied upon the inherent jurisdiction of the court, or alternatively relied upon Part 36 rule 15 and Part 36 rule 16(2)(b) of the Uniform Civil Procedure Rules 2005 , to set aside the judgment.
It was also submitted that he may or may not have been served with the statement of claim. There is no doubt in my mind that he was served on 14 July 2010 and I so find.
It was also submitted that Mr Carbone although purporting to act for the first defendant did not have any instructions to act for him and wrongly purported to represent him by consenting to judgment.
In their written submissions the plaintiffs submit that the consent judgment is final and cannot be set aside. They especially rely upon Deputy Commissioner of Taxation v Meredith at 464 where Basten JA (with whom Gyles and Ipp JJ agreed) said:
"6 In Bailey v Marinoff [1971] HCA 49; 125 CLR 529 at 530, Barwick CJ stated, in relation to this Court:
"Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed."
7 As explained in DJLv Central Authority [2000] HCA 17; 201 CLR 226 in relation to the Family Court, subject to limited exceptions, one being in relation to fraud, that principle continues to operate: at [50]; see also Gamser v Nominal Defendant [1977] HCA 7; 136 CLR 145 and Harrison v Schipp [2002] NSWCA 78; 54 NSWLR 612 at [2]-[4] (Handley JA) and [138]-[140] (Giles JA) and [216] (Ipp AJA). Accordingly, the power of this Court to entertain the present application depends upon two questions; first, whether the orders were entered prior to the application to vary them and secondly, if so, whether there is some statutory authority conferring power on this Court to re open entered orders."
It is further submitted that although the court as a superior court of record has inherent jurisdiction to set aside consent orders it would only do so if they were obtained by fraud or by an agreement which is void or voidable.
It is submitted that no such warrant exists here and that Romeos' solicitor Mr Carbone had at least ostensible authority to bind both defendants in a compromise of the proceedings even if the court accepts that Mr Carbone lacked actual authority. In the absence of it being suggested that Mr Papalia or Ms Rance had notice of any such lack of authority the compromise should be regarded as binding and the judgment entered as a result final: see Donnellan v Watson.
It is further submitted that rule 36.16 of the UCPR does not assist because the notice of motion was filed more than 14 days after the consent judgment was entered and time may not be extended. Further rule 36.15 cannot assist because there was no irregularity where Mr Carbone had at least ostensible authority to bind the Romeos.
Counsel for the defendant effectively conceded during argument as I understand it that his client could really only invoke the inherent jurisdiction of the court. He contended however that Mr Carbone lacked both actual and/or ostensible authority and in addition the first defendant had a defence to the various mortgages and the deed of loan and that he should be permitted to ventilate it otherwise an injustice would be worked. The defence as I best understood it was that his client did not sign various of the mortgages and the deed of loan nor did he authorise anyone else to do so, nor had he borrowed any monies from the plaintiffs and thereby should be permitted to argue that he should be relieved from any alleged indebtedness.
Discussion
The defendant submits the first question therefore for determination is whether Mr Carbone was Mr Romeo's agent. If so, it is submitted that the second question is whether the express authority given to Mr Carbone carried with it the implied authority to contract on behalf of Mr Romeo. It is said there was no holding out by Mr Romeo to the plaintiffs that Mr Carbone was his agent. Mr Romeo denied ever giving Mr Carbone any instructions in relation to the matter at all.
Agency can be created expressly or by implication. Implied agency as it were arises when it is the objective intention of the parties that one would represent the other. In determining whether there was such an objective intention the court looks primarily at what the parties did at the time of the alleged creation of the agency. Aspery JA in his judgment in Field v Shoalhaven Transport [1970] 3 NSWR 96 at 103 said:
"In general no formality is necessary for the appointment of an agent to contract on behalf of his principal. Regardless of the terms used by the parties if the facts fairly disclose that one party is acting for or representing another by the latter's authority the agency exists. The consent of both principal and agent is necessary to create the agency but the manifestation of assent of the respective parties thereto may be made in any way. The principal must intend that the agent shall act for him and the agent must intend to accept the authority and act on it: and the intention of the parties may be found either in words or conduct between them.
Professor Peter Watts and F.M.B. Reynolds in Bowstead and Reynolds on Agency , 19 th edition (chapter 8/013) puts it as follows:
"Where a person by words or conduct represents or permits it to be represented that another person has authority to act on his behalf he is bound by the acts of that other person with respect to anyone dealing with him as an agent on the faith of such representation to the same extent as if such other person had the authority that it was represented to have, even though he had no such actual authority."
Mr Carbone gave evidence before me that he had acted for Mr and Mrs Romeo in a large number of matters. Exhibit P15 is a printout from Mr Carbone's records. It indicates that he had acted for the first and second defendants in at least 49 separate matters.
He was originally introduced to the defendants by a mutual client. His retainer was terminated in 2010 and the defendant's current solicitors were thereafter retained.
He indicated that it was almost always Mrs Mary Romeo who instructed him. He never acted for either of the defendants alone. Occasionally he would receive instructions from an in house advisor called Mr Tony Murray. On one occasion however in relation to a construction dispute he recalled that instructions initially came from the defendant's son Mr Frank Romeo. He said that Mrs Romeo was heavily involved in all aspects of the matters he dealt with and that instructions came predominately by telephone. On some occasions Mr and Mrs Romeo would come and see him in his office and on rare occasions he would go to their premises at Church Point. Sometimes he had received a fax with instructions. It was Mrs Romeo who did most of the talking and most of the negotiating and who was to his observation in control of giving instructions.
In relation to the matter before the court he recalled that he received a fax from Mrs Romeo dated 20 May (Ex P20). That is a copy of a letter from the plaintiffs' solicitors dated 17 May and addressed to "G Romeo and A M Romeo". The letter indicates that they were instructed to commence legal proceedings without further notice. Mrs Romeo in a handwritten note at the foot of the letter said:
"Hi Dominic, I have received this letter and I don't know what to do about it. Thanks Mary"
Mr Carbone recalled having a conversation with Mrs Romeo on the same day or shortly after in which she said to him words to the effect that she owed her brother a lot of money and that she really had no defence to the claim but she needed to re develop Pasadena (the property at Powderworks Road) and hopefully would then be in a position to pay her brother back.
The next contact he had was some months later when he received a faxed copy of the statement of claim which had been served on the defendants he thought on about 14 July. He again spoke to Mrs Romeo who said that she was quite upset about the proceedings and reiterated that she owed her brother a large sum of money but wanted to pay him back and was hopeful that she could resolve proceedings if she could be given some time.
Mr Carbone said that he twice attended court: at the initial directions hearing (he thought) on 27 July and then again on 15 September. He said he attended because he said he had instructions to do so. He stated that those instructions had come from Mrs Romeo by telephone. In the previous month, in mid August, he recalled having a conversation with her in which he indicated that a defence would need to be filed if the proceedings were going to be defended. Again he asserted that Mrs Romeo told him that she owed money to her brother and that she did not have a defence. He said that he told her she needed to think about it but if a defence was not filed then judgment would be entered. Further in the discussion he asked her what she wished to do and asked whether she was going to consent to judgment to which he said she replied:
"We don't have a defence."
I note that Mr Carbone was not challenged on this account.
As a result of what he believed were his instructions he consented to the relevant short minutes and signed them accordingly on behalf of both defendants.
At the time he received a copy of the judgment which had been entered he believed Mrs Romeo was in his office seeing him on another matter. She had come to see him a couple of times asking for files that she needed to give her book keeper. At no time during early October when he saw her did she indicate that she or her husband had not consented to judgment against them. He had given her a copy of the judgment on one of the occasions in October when she visited him.
Although in cross-examination he accepted he could not remember precisely how many conferences he had over the years with the defendants, it is clear that he had many. It is also clear that from time to time in litigious matters he briefed counsel on their behalf. He said that Mr Romeo was the "silent partner" during meetings and simply signed documents when he had to sign them.
Mrs Romeo was not called in these proceedings. That is in my mind a very significant matter. By reason of her not being called I am able more comfortably to form the view that she, as Mr Carbone observed was the point of reference within the family in terms of providing instructions. Although from time to time Mr Carbone might have had to confer with Mr Romeo about particular evidence he might need to give in some proceedings there was no clear delineation between the defendants so as to distinguish their interests in relation to any of the matters in respect of which Mr Carbone acted. There is no suggestion that during the period Mr Carbone acted for the defendants there was any other law firm or lawyer other than persons perhaps employed by him who undertook any legal work on behalf of the Romeos. Whenever he received payment of his fees it was, unless one their corporate entities paid, paid on the account of "G and M Romeo".
Mr Romeo in his evidence accepted that he and his wife worked side by side in their various business activities, which included a number of property developments. He insisted however that his wife was the administrator. She looked after the staff and she dealt with the paperwork. She also dealt with the consultants he said who were engaged from time to time in relation to their developments. In relation to architects sometimes they dealt with architects together but most of the time his wife did. If properties were to be sold, again his wife would handle the sales. He was then asked the following questions:
"Q. When you need to deal with the lawyer, she deals with the lawyer, Is that right?
A. Yes"
Then he was asked:
Q. "When your wife is dealing with the lawyer in the course of your business you don't also deal with the lawyer, you leave it to her to do it?
A. None of my business
Q. In relation to your joint business, that is the case, isn't it?
A. Joint business?
Q. That is the business you and your wife carry out together?
A. Yes
Q. That is the case, if she is dealing with the lawyer for the purposes of your joint business, you don't deal with the lawyer, you leave it to her, that is right isn't it?
A. Not always
Q. Most of the time?
A. Most of the time."
Mr Romeo accepted that Mr Carbone had acted for him and his wife on many occasions since he thought, 2004. Mr Romeo agreed that units for example were sold "through Mr Carbone" but he did not recall Mr Carbone acting in relation to a construction litigation matter and for example proceedings in the Land and Environment Court. It is clear that Mr Carbone did act for the Romeos in those matters.
He did accept that he did not personally ring up and engage Mr Carbone on the various occasions but it was his wife who did so. He was insistent however that his wife did not engage Mr Carbone on his behalf in the matter before the Court.
I am quite convinced that over the years when Mr Carbone was retained Mr Romeo was well aware that Mr Carbone was being retained by his wife from time to time on his and his wife's behalf in all kinds of matters - litigious and otherwise. He not only knew it, he expected it because it is clear that until recently he and his wife trusted Mr Carbone with it seems all their legal work. When he was served with the statement of claim in these proceedings I reject his assertions that he either did not know or did not expect as it were Mr Carbone to be retained. Quite the opposite, in my opinion.
The Romeos have been married for approximately 49 years and they have worked side by side all that time in their business ventures. I consider it inconceivable that this litigation was not discussed between them before and after the service of the statement of claim. They must also have discussed what they could and should do in the circumstances. When Mrs Romeo spoke to Mr Carbone, she spoke on behalf of both of them and their respective family interests and Mr Romeo knew and assumed that that would happen. In my opinion he was content for his wife to organise various matters litigious and non litigious and in particular to deal as she did on all other occasions with this piece of litigation as well. I do not accept his protestations to the contrary and especially in circumstances where Mrs Romeo has not been called.
In a letter dated 5 May 2010 to the plaintiff's solicitors a plea for time is in effect made. It is an important letter because it is tantamount to an admission that there are monies owing and that there is no defence to the debt. Mr Romeo in his affidavit of 15 February 2011 denies having seen the letter before these proceedings and denies it is his signature on that letter. He was asked questions about the letter before me. He reiterated that it was not his signature but it was that of his wife's. He did not he said authorise her to affix his signature. He did however confirm much of the substance of the letter as true for example the proposed redevelopment and rezoning of the Powderworks Road property for example. I cannot accept his evidence that he did not sign that letter. His wife was present in court when he gave his evidence on this letter and indeed on various documents and yet she was not called. If it were true that some other person, she being the obvious candidate, had signed her husband's signature it would have been an easy thing for her to have been called to clarify the matter and to tell the court if it was not him then who it was. It is likely that her evidence would not have assisted Mr Romeo in that regard. I consider it highly probable it is his signature in all the circumstances. That he probably signed the letter at his wife's invitation and forgot for example is not to the point. It is, given the contents of the letter, entirely probable that he was content to go along with his wife in consenting to judgment at the relevant time.
In my opinion either Mr Romeo expressly agreed to his wife telling Mr Carbone to agree to the entry of judgment against he and his wife or alternatively left it entirely in her hands to make the decision as to what should be done in the circumstances. Mrs Romeo felt a great sense of shame and sadness as a result of letting her brother down by not being able to repay the loans. So much is clear from the letter to her brother written on 13 October 2010 and annexed to Mr Papalia's affidavit of 17 December.
In my opinion Mr Carbone had full authority, actual or ostensible to enter the agreement he did and there is no basis to set aside the judgment for lack of authority.
Does Mr Romeo have an Arguable Case?
Mr Romeo alternatively contended an injustice would occur if he were not allowed to defend the matter. His defence was that he knew nothing about loans from the plaintiffs and never signed any of the relevant documents.
It is beyond argument that over the years Mr and Mrs Romeo purchased a significant amount of real estate, some which they developed. They kept borrowing money in order to expand their investments and Mr Romeo accepted that he relied upon a mortgage broker called Mr Tony Murray. Mr Murray it seems provided advice to Mr Romeo and his wife about their finances.
The Romeos' indebtedness grew from around $5.5 million to almost $15 million. In his affidavit of 6 September Mr Romeo identified the multiple entities he and his wife had first, second and/or third mortgages with over the years. They total 9 entities with category 10, somewhat enigmatically described as "others." He makes no mention of the plaintiffs.
Much of the Romeos' borrowings were clearly from private sources, and interest rates no doubt proved in the end crippling.
Mr Romeo asserted that he had never spoken to either plaintiff about borrowing money that he had never signed any documents relating to loans from them and he denied ever having received any monies from them. In particular he alleged that he had never signed a deed of loan.
He was asked about the service of the statement of claim. He agreed he received some papers on 14 July. He did not read them but told his wife that they had been served upon him. He knew however they were court documents. He also knew he was being sued and he knew they were meant for him. He asserted however that he did not know that they related to a claim by the plaintiffs. He was asked about a document described as "independent contractor instruction form". This was a document completed in part by the person who served the statement of claim. He was asked whether his signature appeared in the middle of the page. He accepted that it was his signature but then he commenced what became a somewhat constant refrain in many answers he gave when being asked questions about his alleged signature. On the form, the letter immediately preceding the word "Romeo" is what appears to be a "J". Mr Romeo said in his evidence that it should be a "G" not "J". It is difficult to fathom precisely what point he was seeking to make because in his affidavit of 6 December he states very clearly that he was known as Giuseppe Joseph Romeo, Jo Romeo and Joseph Romeo. However he was quite certain that the word Romeo had been written by him.
He was asked about a number of mortgage documents. He questioned the authenticity of his signature in almost every case. One document however in respect of which he did not take issue was a mortgage entered into on 10 June 2003. That was a mortgage to Mary and Margaret Weinert and Korburn Properties Pty Ltd, the amount borrowed was $290,000. He accepted his wife's signature appeared on that document. Again on 23 March 2005 he agreed that he and his wife signed a mortgage document this time the mortgage was to Tomori Pty Ltd and Conran Associates Pty Ltd, totalling $300,000.
When shown a mortgage given to Permanent Trustee Australia Limited on 26 August 2006 in the sum of $3,250,000 he denied that his signature appeared on it. His reason for rejecting the signature was because the "R was totally different." He accepted that wherever indicated it was certainly his wife's signature. I observe that his and his wife's signature were witnessed it appears by a Mr Mathew Huntington who is a solicitor at Newport. The attestation clause makes it clear that Mr Huntington was asserting that Mr Romeo and his wife signed in his presence. There is a variation of mortgage attached to the documents executed it seems on 8 May 2008 again in favour of the Trustee for the sum of $3,577,500. Mr Romeo asserted again it was not his signature. In relation to the deed of variation Mr and Mrs Romeo's signatures were witnessed by their then solicitor Mr Carbone.
Mr Carbone confirmed when he gave evidence before me that indeed that was his signature on the variation of the mortgage and that he had a standard practice which involved explaining salient points of a document to a client and then if the client was happy having the document signed in his presence and he would then witness the signature. When he was cross examined it was not put to Mr Carbone that either it was not his signature on the variation of mortgage or that he did not witness Mr and Mrs Romeo's signatures at the time they signed the document.
I was informed for the first time at the resumed hearing on 20 June that Mr Romeo and his wife were seeking to set aside the judgment for possession which had been entered in favour of the Trustee and against the Romeos on 14 September 2010. Those proceedings as I have already observed have been heard by Justice McCallum and she is reserved. In those proceedings Mr Romeo swore an affidavit dated 11 November 2010, paragraph 37 of that affidavit is in the following terms:
"I have recently received the mortgage documents from my current solicitor relating to this transaction and which are Exhibited and marked "EX/GR/1". My signature appears on those documents however I did not know that:
(a) The mortgage was over my home being the Elanora Heights Property; and
(b) The mortgage was for $3,250,000; and
(c) Interest on the mortgage was 11.2% (or $364,000) reduceable to 8.20% or $266,500) if paid within seven days of the first of each month"
In paragraph 45 of the same affidavit he refers to the same documents but on this occasion describes his signatures as:
"the signatures on the documents appear to be my signatures....."
At the resumed hearing before me counsel for the plaintiffs sought leave to further cross-examine. I granted leave.
Counsel for the plaintiffs initially asked Mr Romeo about another affidavit also filed in the proceedings before Justice McCallum of 20 October 2010. He was simply asked whether his signature appeared at the bottom of each of the pages of that affidavit. As to the front page of the affidavit he said he did not think it was his signature because the "R" was not his "R." He was quite emphatic as to the second page. It was not his signature. As to the third page, he was not too sure about it but in relation to the first two signatures in doubting they were his signatures, he said:
"The other two I am 100%"
He said he did not remember signing any affidavits in relation to the proceedings concerning the Trustee. The difficulty for Mr Romeo was that the signature on the affidavit appeared to have been witnessed by Mr Phair, his current solicitor.
Somewhat importantly in the affidavit of 20 October at paragraphs 2 and 3 he said that his wife showed him a document and said to him "we are being sued by the lenders over our house (referring to the Trustee) but don't worry I have given it to the solicitor Dominic Carbone to look after it and he will go to court." He also indicated that he had no reason to believe that Mr Carbone was not looking after the matter. Of course, this is a different matter to the one I am dealing with but it is indicative of the way Mrs Romeo with Mr Romeo's acquiescence dealt with their various legal matters. After Mr Romeo left the witness box I asked counsel for the defendant whether there was any question, about whether Mr Phair's signature appeared on each of the 3 pages of the affidavit of 20 October. I was told there was no issue about that and that it was Mr Phair's.
After the short adjournment counsel for the defendant indicated to me that Mr Romeo was not a well man and that he had recently been told that his prostate cancer which he had believed to be in remission had come back. That had affected his ability to read documents and recognise his signature when documents were placed before him. He suffered from broken sleep and was extremely nervous. I was also informed that he had not been suffering from those symptoms earlier in the year (in February) when he first gave evidence before me. I was assured and accepted that counsel had only discovered this fact after Mr Romeo had left the witness box. I granted leave for Mr Romeo to be recalled.
When he returned to the witness box he detailed his recent medical history and how from time to time he suffered from blurred vision. When that happened he said he got frustrated and could not concentrate. He was taken back to his affidavit of 20 October by his counsel. He indicated that he could now see his signature clearly and he recognised it as his on each of the pages. When further cross-examined however about his blurred vision I have to say that his evidence became even less plausible than it had been in the first place. Counsel for the plaintiffs then took him to the affidavit of 11 November and asked him a number of questions. He was referred to the signatures at the bottom of each of the pages and asked to agree that they were his signatures. His answers were:
A. "I can't - look I can't. I am not 100% sure about these signatures.
Q. What is it that concerns you about them, Mr Romeo?
A. I am not saying they are not mine: I am not saying they are mine. I just can't - they are all different, most of them."
He was reminded of the evidence he had previously given in February this year before me about the mortgage and deed of variation of mortgage (Ex P4) and paragraphs 37 and 45 of his affidavit of 11 November read in proceedings before Justice McCallum were drawn to his attention. Again when asked about what appeared to be his signature on the variation of mortgage for example he said he was "pretty certain" it was not his. He simply could not explain why he had sworn an affidavit containing as it did paragraphs 37 and 45 on 11 November 2010.
On the above events alone I find myself in a position where I am simply unable to accept anything that Mr Romeo said in February or said again on 20 June concerning his signatures not appearing as they purport to on the mortgage and the variation of the mortgage granted to the Trustee. If I did not consider any other answers he gave before me on 16 February and only looked at the matters I have chronicled above in relation to the those mortgages I am forced to reject his assertions that his signatures did not appear on them. The truth of the matter is that his own signature does seem to vary from time to time. On occasions, such as the 14 July he even signed his name "J Romeo."
He has expressly invited another judge of this court to accept that his signatures appear on the Trustee's mortgages and yet before me he has expressly asserted that they do not bear them. I am sorry to have to say that I find his evidence on those points entirely untruthful and glaringly improbable. In his efforts to have the judgment set aside in these proceedings he has been prepared it seems to say anything that comes into his head which he considers helps his case however objectively absurd it is. I do not consider his evidence has relevantly been affected by the unfortunate return of his illness. I was told that he was not so affected in February this year nor was it suggested that he was so affected in late 2010 when he swore the affidavits which were read before Justice McCallum.
But he was asked about other documents.
He was asked about two caveats to which it was asserted he and his wife had consented. The caveator in both cases was M & V Endurance Pty Limited. Mr Romeo had already conceded in his affidavit of 6 December that M & V Endurance Pty Limited was an entity from which he and his wife had borrowed monies. Again Mr Romeo denied that his signatures appeared on either caveat. Again his reason for rejecting the signature was his, was that it was a different "R." I cannot accept his assertion that the documents do not contain his signatures.
He was asked about a mortgage dated 22 March 2002 in favour of the plaintiffs. Again he denied it was his signature on either page of the mortgage because this time it was not his "G." In addition it was the wrong "R." He did recognise his wife's signature. I note that on this occasion both Mr and Mrs Romeo's signatures appear to have been witnessed by "A R Murray." I infer that this is the Mr Tony Murray earlier referred to as the mortgage broker and/or consultant. Failure on the part of the defendant to call Mrs Romeo is itself significant. Equally significant however, given his apparent role, is the failure to call Mr Murray. On the face of the document he witnessed the signatures of Mr and Mrs Romeo with whom he asserts in the document, he was personally acquainted and that they signed in his presence. I cannot accept Mr Romeo's assertion that his signature does not appear on either page of that mortgage.
He was next shown a variation of mortgage dated 18 February 2003. Again the mortgagees are the plaintiffs. The amount is for $750,000. Mr Romeo was unable to recall an advance of a further $500,000. He accepted however that his and his wife's signatures appeared on both pages of the document. The signatures appeared to have been witnessed again by Mr Murray. It is obvious from this document alone that Mr Romeo appreciated at that time that he had borrowed at least these monies from the plaintiffs.
He was shown another document dated 22 April 2003. Again, this is a mortgage in favour of the plaintiffs. On this occasion it is for $600,000. Again Mr Romeo did not recall borrowing those monies. He was emphatic that his signature did not appear on either page as the "G" and the "R" were different. He did recognise his wife's signature. Again the signatures appear to have been witnessed by Mr Murray. I cannot accept Mr Romeo's assertions that they are not his signatures.
He was asked about a variation of mortgage dated 24 September 2004 again in favour of the plaintiffs. It was to extend the time for the repayment of the $600,000 previously borrowed. Again he denied that his signatures appeared on the document. It was not his "G" or his "M." He recognised the signature of his wife. Again it was it seems witnessed by Mr Murray. Again I cannot accept Mr Romeo's assertions that his signature does not appear on those documents.
He was next asked about a mortgage of 1 September 2004 again in favour of the plaintiffs. It was for $500,000 to be repayable in September 2007. Again Mr Romeo did not remember borrowing this amount. Again he emphatically asserted that it was not his signature on any page of the document because it was not his "R." It was however his wife's signature. Again these documents were witnessed before Mr Murray and sadly again I am simply unable to accept Mr Romeo's denials that he did not know of the loan and/or his assertion that they were not his signatures.
Next he was asked about a mortgage of 21 June 2006 and again it was in favour of the plaintiffs. It was for $400,000 again repayable in September 2007. Again Mr Romeo could not remember borrowing the monies. He insisted the signature was not his. It was the wrong "M" and the wrong "G" but he did again recognise his wife's signature. It appears it was witnessed by Mr Murray. I cannot accept Mr Romeo's evidence when he asserted that it was not his signature on either page of the document.
He was next asked about a mortgage of 18 August 2008 in favour of the plaintiffs. It was for $300,000 this time repayable in August 2009. Again he could not recall borrowing monies from the plaintiffs. Although it was his wife's signature on the document he denied his signatures appear as it was a different "R" and "G" and a different "M." This was also it seems witnessed by Mr Murray and I again cannot accept Mr Romeo's assertions that they were not his signatures.
He was next asked about the deed of loan. It appears that the loan document was prepared by Matthew Huntingdon and Co, Newport. Mr Romeo knew of Mr Huntingdon and that he was a solicitor. He denied that he knew that Mr Huntingdon acted for the plaintiffs. The document purports to bear a date 16 September 2009. He was asked whether his signature appeared on the first page and the last page of the document. He denied again that it was his signature because it was the wrong "R" and/or the wrong "G". He had no difficulty recognising his wife's signature. He had no idea how the words "G Romeo" came to be written twice on the document. Again I observe that Mr Murray appears to have signed the document and witnessed the signatures of Mr and Mrs Romeo whilst he was in their presence. I cannot accept Mr Romeo's assertions that these are not his signatures.
The absence of Mr Murray is, as I have already observed of some considerable significance. There was no suggestion that he was unavailable for example. On 14 January 2008 he wrote to Mr and Mrs Romeo summarising their then current debt position and suggesting ideas as to how they might meet their financial requirements over the next two years. It is plain from that detailed letter which I accept Mr and Mrs Romeo received, that apart from the debt said to be owed to the Trustee, Mr Papalia - one of the plaintiffs - is identified in that document as having a fourth mortgage for the amount of $2.4 million. It is also plain from that letter that in January 2008 the Romeos even before the global financial crisis hit hard, were in need of substantial funds to meet monthly interest obligations.
I have already observed that Mrs Romeo was in court for the whole of the morning of 16 February when Mr Romeo was first cross examined and when he denied many of the signatures that sat next to his wife's were not his. I am unaware whether she returned to the court on 20 June. What is clear is that if she could have given some credence to his various denials she would have been called to say so. To suggest that she copied his signatures and was not authorised to do so might be a step perhaps towards some sort of defence, weak though it might be. I can and do deal with this matter on the basis that no such scenario is provable. It is hard to imagine who else would have any motive in placing his signature on the documents apart from Mr Romeo himself.
In summary, Mr Romeo wishes to have the judgment set aside on the basis that he has an arguable defence to the alleged indebtedness on the basis that some mysterious person apparently not his wife, not Mr Murray and no one he could otherwise identify has it seems forged his signature on numerous mortgage documents and for example the deed of loan. I have to say that on the state of the evidence before me I do not think that Mr Romeo has an arguable case that the various documents do not bear his signatures. The only injustice worked in my view if the judgment were set aside would be to the plaintiffs. For those reasons I reject and dismiss the motion to set aside the judgment as I am firmly of the view that no injustice would be caused to Mr Romeo in not doing so.
I order the defendant pays the costs of the motion.
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Decision last updated: 07 July 2011
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