Gemi 169 Pty Ltd v Suria Global (L) Pty Ltd; Shamoon v F & L Violi Pty Ltd (No 9)

Gemi 169 Pty Ltd and Shamoon brought claims against Suria Global (L) Pty Ltd and F & L Violi Pty Ltd, respectively, challenging the validity of mortgages registered over their properties. The disputes arose from loans advanced by third-tier lenders, secured by the mortgages, and loan agreements purportedly executed by the mortgagors. Gemi 169 contended that its director did not authorise the loans and mortgages, and that the signatures on the loan agreements were forged by impersonators. Shamoon argued that the loans were advanced for the development of a non-existent cryptocurrency, and that the signatures on the loan agreements were unusual and uncharacteristic. The central issues for the court were whether the mortgagors had authorised the loans and mortgages, and whether the mortgages were enforceable against the mortgagors' properties.

The court found that Gemi 169's director authorised the loans and mortgages, which were therefore enforceable. The unusual signatures did not negate the authority given by the director. For Shamoon, the court held that the purported equitable mortgage was ineffectual, as the mortgagor did not execute the loan agreement. However, the court found that the solicitor who acted for the mortgagor was liable for breach of retainer and misleading or deceptive conduct, as he had assured the lender that the repayment would be guaranteed by the mortgage. The court emphasised that the overriding purpose of civil procedure, to achieve a just, quick, and cheap resolution of cases, was not served by the parties' and their legal practitioners' failure to prepare and deliver court books in accordance with Court orders. The court noted that while the breach was rectified before the trial, the conduct was inconsistent with the obligations to further the overriding purpose.

The court ordered that the mortgages over Gemi 169's properties were enforceable, and that Shamoon was not liable for the loans. The court also held the solicitor liable for breach of retainer and misleading or deceptive conduct, and ordered him to pay damages to the lender. The court did not make any orders regarding the costs of the proceedings.