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

1. [1]

   Coming for the first time to the evidence in this case, it would be reasonable to draw conclusions drawn from a witness’ messages:

2. [2]

   Nevertheless, it has been necessary to make sense of doctored documents, the transfer of millions of dollars offshore for unexplained purposes, non-existent cryptocurrency, “sovereign funds”, and apparently recurrent forged signatures. Also, persons, who must know important details of the transactions involved, have fled the jurisdiction or did not give evidence. Other witness testimony is inconsistent, such that some must at least be mistaken, if not lying. It has been impossible to explain the findings of the essential facts without a detailed recording of what occurred during many meetings, emails, phone calls and message exchanges.

3. [3]

   In these two proceedings being heard together, three third tier lenders advanced over $28 million on short term loans and have not been repaid and seek to enforce their security. Due to default interest rates over $80 million is now claimed to be owing.

4. [4]

   The two major lenders are, in chronological order, GEMI 169 Pty Ltd (GEMI) and GI 214 Pty Ltd (GI 214) (together, the GEMI lenders). In 2020 and early 2021, they loaned together over $25,000,000 to a corporate borrower, Suria Global (L) Pty Ltd (Suria Australia). The GEMI lenders share a common director and controller, Mr Justin Epstein, who is apparently a billionaire and also owns part of a cryptocurrency exchange. They respectively have first and second registered mortgages over F & L Violi Pty Ltd’s (FLV) properties, being a shopping centre in Griffith and a commercial property in Strathfield. Those properties were allegedly proffered as security for the loans.

5. [5]

   A third lender is Mr Elias Shamoon, who in March 2021 loaned $2,000,000 ostensibly to FLV in return for $4,000,000 being repaid in 70 days. Mr Shamoon claimed unregistered equitable mortgages over FLV’s properties.

6. [6]

   A fourth loan of $2,200,000 was made by a consortium of 14 investors to FLV in January 2022, secured with third registered mortgages over FLV’s properties (the 14 Lenders loan). They resolved their dispute with FLV shortly before the hearing on undisclosed terms.

7. [7]

   FLV’s sole director, Mr Francesco (Frank) Violi, claimed he never knew of or signed the relevant agreements or mortgages, and instead, in Mr Violi’s words, the loans and mortgages were “a stitch up” and his identity had been stolen, with his name having been fraudulently signed on various documents.

8. [8]

   The GEMI lenders, and it appears Mr Shamoon, accepted that the relevant documents do not bear Mr Violi’s usual signature, but nevertheless asserted that FLV is liable and they are entitled to rely on the mortgages. They say however the documents were signed, Mr Violi authorised the loans, knew of the mortgages and personally received the benefit of some of the money.

9. [9]

   A solicitor, Mr Fred David, claimed to have been acting for FLV in all the transactions. Mr David is a practising solicitor and a principal of Fairfield’s David Legal, together with his sister, Ms Suzy David. Mr David is not a transactional lawyer and does not regularly deal with loans or mortgages or conveyancing. His asserted experience is in commercial litigation and criminal matters. Nevertheless, he is the solicitor who was actively involved with the negotiations of the loans, mortgages and their documentation; he drafted the documents for the Shamoon loan. Mr David often met those involved in the loans on weekends and after ordinary business hours. Mr David further said he obtained instructions from Mr Violi and witnessed his signatures on the relevant documents.

10. [10]

    However, Mr Violi considered Mr David part of the “stitch up”, together with a Mr Jason La Rocca and a Mr John Ata Alan Lutui.

11. [11]

    Mr La Rocca was Mr David’s client in relation to a drug importation charge and also a friend of Mr Violi’s son, Anthony Violi. Mr La Rocca is a defendant in the proceedings, because he received some of the loan money, but he took no active part and did not give evidence. He has left the jurisdiction and is apparently in Thailand.

12. [12]

    Mr Lutui is a director of companies involved in the loans. In 2023, he fled the jurisdiction. His brother-in-law is Mr Alex Glenn. Mr Glenn and Mr La Rocca had known each other for close to 20 years.

13. [13]

    In about 2018, Mr Glenn was involved in an alleged crypto-currency scheme called “Carbon Dollar X” (CDX). He also worked with a Malaysian company, Suria Global (L) Ltd (Suria Malaysia), which apparently held a logging concession over a forested area in Fiji and may have been trying to obtain a Malaysian banking licence. Suria Malaysia apparently supported Mr Glenn’s CDX scheme. Suria Malaysia was the “parent” company of Suria Australia, the borrower of the GEMI loans, which was incorporated by Mr David in 2019.

14. [14]

    Suria Malaysia was Suria Australia’s sole shareholder between 19 November 2019 and 27 February 2020, and Mr Lutui was the sole director and more recent sole shareholder. However, none of the loan money from the GEMI lenders was paid to Suria Australia. For reasons which are not apparent from the evidence, almost $5,000,000 of the loan money was advanced to Pacific Carbon Group Pty Ltd (Pacific Carbon), trading as “CDX Australia”, a company controlled by Mr Lutui, which is now deregistered.

15. [15]

    Other loan money was advanced to persons including Mr Violi, Mr La Rocca and Mr David’s trust account on behalf of Mr La Rocca, Mr Glenn and others, and foreign entities.

Summary of conclusions

1. [16]

   In order to determine the primary issue, which is whether Mr Violi signed or authorised the loans and mortgages over FLV’s properties, it is necessary to make sense of conflicting evidence of witnesses in the context of volumes of emails, text messages and other documents, and without evidence from key persons such as Mr La Rocca and Mr Lutui and others. As noted below, I have given primary weight to contemporaneous documents, particularly where the oral testimony of witnesses is inconsistent.

2. [17]

   Because of the volume of material and the necessity to set out findings of fact in some detail, it is appropriate first to provide an overview of the conclusions for the various claims.

3. [18]

   As senior counsel for Mr Violi accepted, “the resolution or determination of this case comes down to a pretty simple factual issue; namely, whether Mr Violi signed or, if he didn't sign, whether he on behalf of [FLV] knew and approved of the loans”. If that finding is made in the GEMI lenders’ favour, the alternative claims brought by the GEMI lenders and the Violi parties, which I discuss further below, do not arise.

4. [19]

   As explained below, I have found that Mr Violi was aware of and authorised the execution of the GEMI loans (including variations) and security documents. That finding is based, in large part, on my assessment of Mr Violi’s credibility and my rejection of his evidence in relation to execution of the documents, where there is competing evidence from others and Mr Violi’s conduct, including written communication with others, is to the contrary. I accept that it is unlikely Mr Violi signed the documents personally, because the signatures do not bear any resemblance to his usual signature, as explained by handwriting experts and is apparent to the eye: Jeans v Cleary [2006] NSWSC 647 at [155]-[157] (Johnson J). It is more likely that Mr Lutui or Mr La Rocca signed or organised for someone to sign them on Mr Violi’s behalf. The result of these conclusions is that many forms of relief sought in Mr Violi and FLV’s second cross claim, including declarations that the GEMI loans and mortgages were fraudulently obtained, damages from Mr David and contribution or reimbursement from Mr Lutui and Suria Malaysia, is not available.

5. [20]

   It appears that Mr Violi was generally prepared to provide financial assistance to Mr Glenn, Mr La Rocca and Suria Malaysia and believed assurances from Mr Glenn that Suria Malaysia and CDX would receive sufficient funding or profit to discharge the GEMI lenders’ loans, and that FLV’s properties would not be called on by them.

6. [21]

   In reaching those conclusions, unless there is any corroborating documentary evidence, I placed no or very little weight on Mr David’s evidence generally. He demonstrated that despite his trusted position as a legal practitioner and officer of the Court, he has been prepared to make false statements in relation to documents, including his own trust records, and as to verification of identity. Those false statements were made in the context where Mr David was aware other legal practitioners and commercial lenders would place reliance upon them.

7. [22]

   I am not persuaded that Mr Violi was aware of or authorised the Shamoon loan for the reasons outlined below, including the fact that Mr Violi did not appear to receive any benefit from that loan; all the money was advanced to Pacific Carbon at Mr David’s direction, based on Mr Glenn’s instruction. FLV’s alternative claims, brought if it was found liable under the Shamoon loan, therefore do not arise.

8. [23]

   I consider that Mr David had a retainer with Mr Shamoon in relation to the transaction and was obliged to take reasonable care to document the loan terms, including the borrower’s promise of security, and to take reasonable care providing advice on the loan terms, including the security.

9. [24]

   For such a significant short-term transaction a solicitor exercising reasonable care would have ensured there was binding documentation and caveats or that mortgages promised in the loan were registered. Belatedly Mr David represented to Mr Shamoon that he had registered Mr Shamoon’s interests, but that was false. It may be that Mr David hoped the money would be repaid quickly by Suria Malaysia or Pacific Carbon and without Mr Violi’s knowledge of the terms Mr David drafted, including security over FLV’s properties.

10. [25]

    I also prefer the evidence of Mr Shamoon over that of Mr David in relation to discussions concerning Mr Shamoon’s advance of loan monies, which forms the basis of Mr Shamoon’s misleading or deceptive conduct claim.

11. [26]

    The effect of the conclusions I have reached is that the alternative claims brought by the GEMI and Violi parties, premised on the contention that the GEMI loans were not validly executed or authorised by FLV and Mr Violi, do not arise. A summary of those claims is as follows:

    1. (1)

       The GEMI lenders claimed against the Violi parties in estoppel, for ratification of the loan documents, knowing receipt and knowing assistance under Barnes v Addy (1874) LR 9 Ch App 244, claimed against various parties for restitution of monies had and received, claimed against the David parties, Mr La Rocca, Pacific Carbon and Mr Lutui for knowing receipt, knowing assistance, misrepresentation, misleading or deceptive conduct, deceit, and conspiracy to injure. The GEMI lenders also sought to rely on the statutory assumptions available under Part 2B.2 of the Corporations Act 2001 (Cth) in relation to the execution of the loan documents by FLV.

    2. (2)

       The Violi parties claimed for compensation from the Torrens Assurance Fund, pursuant to s 129(1) of the Real Property Act 1900 (NSW) (RPA) or for the mortgages to be cancelled by the Registrar-General for the GEMI lenders’ failure to comply with the requirements of s 56C(1). These claims do not arise. Counsel for the Registrar-General indicated that his client would have made a decision whether to act under s 56C(1) of the RPA and a declaration was not required. Further, had it been necessary, it would have raised the limitation to any recovery for FLV in s 129(2)(b) of the RPA.

12. [27]

    Mr Violi and FLV also claimed that, in the event the GI 214 loan was enforceable, the interest charged under that loan was unconscionable under s 12CB(1) of the Australian Securities and Investments Commission Act 2001 (Cth) and s 21(1) of the Australian Consumer Law (ACL), being sch 2 to the Competition and Consumer Act 2010 (Cth) (CCA). However, it was accepted that the issue would only arise if the Court found that FLV did not agree to the GEMI loans, because the default interest rate on the GEMI loan is 52% compounding, which means the debt exceeds the value of the secured properties. My findings that Mr Violi, on behalf of FLV, consented to the GEMI loans have the result that this claim also does not arise.

13. [28]

    In the Shamoon proceeding, Mr Violi and FLV brought alternative claims against Mr David and Pacific Carbon, in the event that the Shamoon loan is found to be enforceable against FLV. Those claims also do not arise.

14. [29]

    I am mindful that, as a matter of general practice, trial judges are encouraged to determine all issues in order to assist the appeal process and obviate the need for a retrial: Prince Alfred College Inc v ADC (2016) 258 CLR 134 at [113] (French CJ, Kiefel, Bell, Keane and Nettle JJ) (Prince Alfred College); Gulic v Boral Transport Ltd [2016] NSWCA 269 at [7] (Macfarlan JA, Gleeson JA and Garling J agreeing) (Gulic).

15. [30]

    The most common, although not the only, application of that practice is in the assessment of damages for personal injury in cases where liability has not been established: Peter Sleiman Investments Pty Ltd v Deputy Commissioner of Taxation [2017] NSWCA 81 at [70] (Leeming JA, Beazley P agreeing); see also Nevin v B & R Enclosures Pty Ltd [2004] NSWCA 339 at [74] (Tobias JA, Beazley and Sheller JJA agreeing).

16. [31]

    However, that practice is “a rule of convenience” and is “not something which should invariably be done without consideration of the appropriateness of that course of action in the circumstances of the case”: Prince Alfred College at [113]. That is because “the obligation of a court to give reasons is an obligation to explain the orders made, and that need not include resolving every issue presented by the parties”: PPK Willoughby Pty Ltd v Baird [2021] NSWCA 312 at [15] (Leeming JA, Basten JA and Simpson AJA agreeing).

17. [32]

    It will not always be appropriate or practicable to make findings on all non-dispositive issues. That may be because the issue was not fully argued, or it may be because deciding the non-dispositive issue would require a judge to make assumptions as to a party’s credit which are “diametrically opposed to the judge’s findings”: Gulic at [8].

18. [33]

    To make contingent findings in relation to the alternative claims here, I would be required to assume the veracity of Mr Violi’s evidence on the issue of the execution of the GEMI and GI 214 loans, contrary to my findings. I would also be required to assume facts contrary to the evidence of other witnesses, some of which I have accepted. Making findings in those circumstances would be a problematic exercise in hypotheticality. It would be particularly inappropriate in circumstances where the alternative claims are not necessarily simple, and the parties’ written and oral submissions focussed largely on the dispositive factual issue, and in that sense, the alternative claims were not fully argued. For those reasons, I do not consider it appropriate to make contingent findings in relation to alternative claims.

19. [34]

    Below I outline what happened and the appropriate factual findings as they arise.

Mr Glenn, Suria Malaysia and “CDX”

1. [35]

   At some time before 2017, Mr David had commenced acting as Mr Glenn’s lawyer, and also as Suria Malaysia’s lawyer.

2. [36]

   Mr Glenn’s cousin introduced him to Mr La Rocca “more than 15, close to 20 years ago”. In about 2017, Mr Glenn sought Mr La Rocca’s assistance raising capital for CDX. That year, Mr Glenn introduced Mr David to Mr La Rocca.

3. [37]

   Mr Glenn claimed that in about 2007 or 2008 he “conceived” of the idea of CDX. He claimed he was one of the first “in the industry” to realise that cryptocurrency is not backed by real assets, and he had a plan to develop a new cryptocurrency that was backed by timber in Fiji. He provided no substantive explanation as to how this system might work, what work had been done on building his “platform” since conception, how much money had been raised through investments or indeed spent on development. However, he indicated without elaboration that some investment money had been paid to him for his “expenses”.

4. [38]

   He did not explain where the alleged development is up to or why the project has ostensibly ceased. He did not explain how Suria Malaysia was involved in CDX. There is nothing to demonstrate that Suria Malaysia invested any money. He did not consider he had any responsibility to ensure that any person who raised money from investors in Australia for CDX on his behalf, such as Mr La Rocca, complied with financial laws and regulations, because he was not “personally” raising the funds and he did not “see how that’s an issue for [him]”.

5. [39]

   Mr Glenn said that his brother-in-law, Mr Lutui, was assisting him with CDX. Mr Lutui incorporated Pacific Carbon “to facilitate” Mr Glenn’s anticipated “licensing” of CDX. On 15 March 2019, the business name “CDX Australia” was registered to Pacific Carbon.

6. [40]

   Mr Glenn’s evidence was that from late 2019 an unexplained “we” explored ways Suria Malaysia could raise funds in Australia. He claimed that Mr Yassin instructed him to establish a subsidiary of Suria Malaysia as an Australian company, of which Mr Lutui became the director. Mr Lutui and Mr Glenn were involved in a family café business in Canberra, but Mr Lutui moved to Sydney when Suria Australia was set up and he was appointed sole director.

7. [41]

   To that end, Mr Glenn instructed Mr David to incorporate Suria Australia. His evidence in cross-examination was that Suria Australia did not conduct any business: “[i]t was just to receive investments into CDX… It was to receive investments from other people that raised the funds… it was the receiving account”. However, as explained below, Pacific Carbon and not Suria Australia, received large amounts of borrowed funds, including all of the money advanced under the Shamoon loan. Mr Glenn’s explanation for this was that Suria Australia “was unable to obtain a bank account … because it was wholly owned by a foreign corporation”, and Mr Shamoon’s money was directed by him to be paid to Pacific Carbon, so it could be used to pay a Barclays “bank fee”.

8. [42]

   In August 2017, Mr David had written to Suria Malaysia confirming Mr Glenn’s instructions that he was in discussion with “possible investors … in relation to providing funds to finalise the establishment of a bank in Labuan, Malaysia” and that David Legal was to hold $5,000,000 in trust to “distribute … as instructed by you at [the] appropriate time”. In September 2017, Mr La Rocca sent Mr David an “investor pack” for Suria Malaysia, that sought a short-term investment of $5,000,000 for the establishment of an investment banking licence in Malaysia. The document indicated that Mr Glenn would manage the investment sum that would be held in Mr David’s trust account.

9. [43]

   Mr Glenn claimed that he worked “with” Mr Omar Yassin bin Abdullah, the “chairman” of Suria Malaysia. Mr Yassin did not give evidence. His qualifications and business experience are not known. The extent and nature of Mr Yassin’s involvement in Suria Malaysia was not made clear, although there were some documents in evidence, which he had ostensibly signed.

10. [44]

    However, Mr David stated he had given legal advice to Suria Malaysia for many years, obtaining instructions from Mr Glenn, and that he had also met Mr Yassin once in Malaysia. Mr David’s evidence in cross-examination was that, although he charged Suria Malaysia for the work he performed, he was never paid and was owed “probably hundreds of thousands of dollars, if not more”. He did not explain why he was prepared to continue working for a client that did not pay.

11. [45]

    What exact work Mr Glenn did “with” Suria Malaysia was not clear from any of his evidence. His explanation of his involvement with Suria Malaysia was confusing. He did not know where its office in Kuala Lumpur was located, despite having allegedly worked with the company since about 2012. He did not explain what business Suria Malaysia operated and spoke vaguely about “projects”. He asserted that some projects were related to land in Fiji. The most detail of the work he actually did was allegedly sitting in on a phone call with Mr Yassin and Barclays Bank at one point. Mr Glenn has no qualifications in finance, banking or any discipline relevant to cryptocurrency. He had no knowledge of any regulation of financial services in Australia, despite claiming that for over 25 years he has been self-employed in “finance and finance markets”, through various corporate vehicles, of which he has been the director.

12. [46]

    Mr Glenn asserted that Suria Malaysia was simultaneously trying to obtain a banking licence in Malaysia, and also to transfer its own “sovereign funds” held in England to Malaysia. His explanation of “sovereign funds” was opaque. It was said to be money held by sovereigns, such as the British Royal Family, and was “backed” by “real assets”, such as gold. He did not explain which sovereigns had given Suria Malaysia their “sovereign funds”, why they would have done so, or on what terms. He attempted to explain, albeit obliquely, that the “sovereign funds” were allocated to Suria Malaysia’s “finance” business, as the “company was dealing with sovereign funds”. What exactly that means is unclear. He alleged that there had been delays with Barclays transferring the sovereign funds to the Central Bank in Malaysia, and that Suria Malaysia needed available funds to pay for necessary “bank fees”. He claimed that in early 2021, Barclays sought $3,500,000 in fees, but Mr Yassin negotiated that fee down to $2,000,000, to which Mr Shamoon’s borrowed money was put.

13. [47]

    Mr Glenn had no documentation that actually supported anything he said. His evidence about Suria Malaysia’s attempts to obtain funds and the process through which that was to occur was implausible and inconsistent, as discussed further below. I place almost no weight on Mr Glenn’s evidence, except where it is corroborated by another witness or a document.

14. [48]

    On a personal level, from before 2019, Mr Glenn was significantly in debt. On 25 June 2019, Mr Yassin had ostensibly written a letter on Suria Malaysia letterhead to support Mr Glenn in his defence of legal proceedings brought against him by the National Australia Bank Ltd and Credit Solutions Group Pty Ltd, a lender controlled by Mr Cacciola, a witness discussed further below. Mr David, acting as Mr Glenn’s lawyer, attached Mr Yassin’s letter to his 27 June 2019 letter to the lenders’ lawyers. In that letter, Mr Yassin claimed that Suria Malaysia was “about to invest” EUR8 billion “both in part in Australia and Fiji”. This was even though, on Mr Glenn’s evidence, Suria Malaysia could not access its sovereign funds at the time. There is nothing to demonstrate that Suria Malaysia ever possessed EUR8 billion, or if it did have such funds, why it or Suria Australia needed to borrow from the lenders in these proceedings. Mr David’s impression of Suria Malaysia was made evident in cross-examination:

15. [49]

    Mr Glenn also claimed that his “arrangement” for working with Suria Malaysia was that when it obtained funds, then he was entitled to be paid money to discharge his “investments” in Suria Malaysia, which he claimed was in the amount of $4,000,000. Neither his alleged investment nor his “arrangement” was documented. However, Mr Glenn asserted that when Suria Malaysia obtained loan funds the subject of these proceedings, Mr Yassin agreed that Mr Glenn could have his debts paid off, in the sum of over $3,500,000. Again, that “agreement” was not documented.

16. [50]

    Mr Glenn could not recall when he was bankrupted, but it may have been around 2019. His bankruptcy was extended for two years because he failed to provide a list of assets. It is not clear when, or if, his bankruptcy was discharged and how that impacted on Mr Glenn carrying on business as a director of any of his companies. In July 2021, he was still a bankrupt to Mr David’s knowledge.

17. [51]

    Generally, Mr Glenn’s evidence about Suria Malaysia, CDX, and the basis for, and payment of, the loans can only be described as incredible. It may be that he believed what he was saying, despite there being no objective evidence to substantiate that belief. Alternatively, it may be that he was involved in defrauding people out of money with stories of a nascent cryptocurrency, which after almost 20 years since alleged inception does not exist, and “sovereign funds” which have not been proved ever to have existed or belonged to Suria Malaysia.

Mr Violi’s relationship with Mr Glenn

1. [52]

   In 2018, Mr La Rocca, at Mr Glenn’s instigation, encouraged Mr Violi to invest in CDX. Mr Violi had hopes that his investment at $2 per “share” or “token” would each be worth $45, or $100 or $1000 when CDX was launched and the company was listed. Where and when CDX was going to be listed or licensed was not explained.

2. [53]

   In total, Mr Violi considered he owned 208,000 shares or tokens, even though he was never given any paperwork for his investment. Mr Glenn’s evidence was that he asked Mr La Rocca to keep records of investments he sourced for CDX “in case it was required”, but he had “not yet” asked for them and did not have any.

3. [54]

   From 2019 into 2021, Mr Violi sent repeated text messages asking Mr Glenn for updates. Mr Violi’s understanding of the relationship between Suria Malaysia and CDX was not clear. He appeared to consider that it was necessary for Suria Malaysia to receive a large sum of money by way of “swift” or “bond” in order to launch CDX. This may have been the “sovereign funds” Mr Glenn referred to, but Mr Violi never referred to such funds.

4. [55]

   In cross-examination, Mr Violi stated that he did not know what a “swift” was. It may be that Mr Violi had been told by Mr Glenn about Suria Malaysia’s activities in a vague way, and Mr Violi accepted what he was told at face value, never requesting any documentation or real proof, and never in fact meeting with Mr Glenn in person at any time. Mr Violi said in cross-examination that he understood that Mr David, Mr La Rocca and Mr Glenn were “selling a swift … or a bond” and were going to use the money to “float Carbon Dollar X”, purchase FLV’s Strathfield property and develop the Strathfield precinct.

5. [56]

   In 2019, Mr La Rocca introduced Mr Violi to Mr David as CDX’s lawyer, in the context of Mr Violi seeking to purchase the Griffith shopping centre. At the time Mr David was also Suria Malaysia, Mr Glenn and Mr La Rocca’s lawyer. While Mr Violi had previously engaged solicitors in Griffith for legal work, he decided to engage Mr David in relation to the Griffith shopping centre purchase, because Mr David “was the one that got the deal … he found out that it … wasn’t sold and … had the opportunity with him”.

6. [57]

   As explained further below, Mr La Rocca often acted as a go-between Mr David and Mr Violi in relation to communications concerning FLV’s properties.

7. [58]

   As noted, Mr La Rocca was a friend of Mr Violi’s son, Anthony. While Mr Violi swore in his affidavit that he did not know Mr La Rocca much before 2021, that was obviously not the case. Faced with evidence including telephone records and text messages between them, Mr Violi had to accept that Mr La Rocca had assisted him with his business dealings from 2019. His denial of something so contrary to objective evidence did not instil confidence in his other evidence. I also do not accept Mr Violi’s evidence that when Mr La Rocca was “unemployed”, Mr La Rocca offered to assist without pay with administrative tasks at the Griffith shopping centre. Instead, I find that Mr Violi trusted Mr La Rocca with providing administrative assistance generally, including in relation to his investments with CDX, Suria Malaysia and Suria Australia. Mr La Rocca created a Gmail for Mr Violi, frankvioli1812@gmail.com, and also set that Gmail up on Mr Violi’s mobile phone, which I find Mr Violi used, as discussed below.

8. [59]

   In early 2019, Mr La Rocca told Mr Violi:

9. [60]

   As will be seen, Mr Violi appears to have always transferred money as instructed by Mr Glenn and Mr La Rocca. Mr Violi agreed to provide more money to CDX in return for future shares or tokens. Mr Violi continued to transfer small amounts to assist Mr Glenn, including paying his hotel account in Malaysia, which he considered was further investment in CDX.

10. [61]

    Around that time, Mr Violi was considering whether to obtain finance for the purchase of the Griffth shopping centre, and he asked Mr David to make arrangements for finance. Steps were taken to obtain a loan through a broker, Axiom Mortgage Solutions Pty Ltd. Mr David asked Mr La Rocca to obtain Mr Violi’s signature for the loan application, and Mr Violi provided copies of various identification documents. A loan with the Commonwealth Bank of Australia was approved, and Mr La Rocca sent Mr David a mortgage in favour of the bank, which Mr Violi accepted he signed. However, Mr Violi changed his mind and did not proceed with the loan.

11. [62]

    In mid-2019, the settlement of the purchase of the Griffith shopping centre was approaching. Emails between Mr Violi and Mr La Rocca attached Mr Violi’s identification documents, including his Medicare card and his Heavy Vehicle Driver Licence.

12. [63]

    On 28 June 2019, settlement of the Griffith shopping centre occurred. Thereafter, Mr David and Mr Alex Smith at David Legal assisted Mr Violi with lease issues at the centre. Mr Smith worked in the property team at David Legal and was supervised by Mr David’s wife, Ms Sabrina Jajoo, who did not give evidence. However, sometimes Mr David supervised Mr Smith’s work, including in relation to Mr Violi’s matters. No explanation for Mr David acting outside his usual practice areas was given.

13. [64]

    On 19 September 2019, Mr Violi signed a joint venture agreement with Alnamaa Capital Holdings Ltd (Alnamaa). Alnamaa was supposedly represented by Sir Yasin Saad Alakhdar Abu Salem, who did not give evidence. Mr Glenn explained that Alnamaa was an intermediary engaged to deal with Barclays to assist Suria Malaysia in receiving the sovereign funds. There was no documentation demonstrating the relationship between Alnamaa and Suria Malaysia, other than one Alnamaa invoice dated 10 October 2019 for EUR25,000.00 for “Bank confirmation charges & swift operations” and another dated 25 February 2020 for USD329,500.00 for “Banking Service and Consultations Fee”. There was no evidence about what these alleged services involved.

14. [65]

    The purpose and substance of the Alnamaa joint venture is not apparent from the joint venture agreement, which includes:

15. [66]

    Mr Violi claimed he had no memory of signing the document, but accepted he may have done, as it appeared to bear his signature. This document was one of many in evidence in the proceedings which made little sense, or appeared designed to provide some basis for the later transfer from Australia of money borrowed on the security of FLV’s properties.

16. [67]

    Mr Violi paid the October 2019 Alnamaa invoice. Around that time, Mr Violi said that Mr David told him that Mr Glenn needed $60,000 for his mortgage, which Mr Violi then paid. At the time, neither Mr Glenn nor Mr David told Mr Violi that Mr Glenn was facing legal action from his mortgagee and Mr Cacciola’s lending company, or that he was bankrupt. Mr Violi again considered he was making further investments in CDX by paying the Alnamaa invoice and Mr Glenn’s expenses.

17. [68]

    On 14 November 2019, Mr Violi exchanged messages with Mr Glenn:

18. [69]

    Mr Violi continued to ask Mr Glenn “when will the money hit?”

19. [70]

    On 19 November 2019, Mr Violi sent a message to a “contractor”, Mr Haji Baryamai, providing the bank account details of Suria Malaysia. Mr Violi could not explain the purpose of that message, and claimed it must have been sent by Mr La Rocca using his phone. Mr Violi repeatedly blamed Mr La Rocca in a mantra-like manner whenever he was taken in cross-examination to a message or email that he could not explain in a way consistent with his case theory that he is a computer illiterate farmer who cannot understand matters of finance or commerce.

20. [71]

    However, I do not accept that evidence. There can be no doubt that Mr Violi was aware of Suria Malaysia, because of Mr Glenn’s communications with him in the context of CDX. When Anton Pillar orders were carried out at his home in June 2022, Mr Violi was recorded by independent lawyers as denying he knew of Suria Malaysia. However, he said in cross-examination that if he had said that to those lawyers he must have misunderstood the question, because he was aware of the company. This speaks against Mr Violi’s credit and suggests he appears to have answered the question in a way he thought might most assist him at the time.

21. [72]

    On 27 November 2019, Mr Glenn sent Mr Violi a screenshot of documentation suggesting Suria Malaysia was going to receive GBP250 million.

22. [73]

    On 3 December 2019, Mr Glenn and Mr Violi exchanged messages:

23. [74]

    This is one indication by Mr Violi that in 2019 he was assisting Mr La Rocca financially, which is quite different to his denial of knowing Mr La Rocca well at the time. The full extent of Mr Violi’s financial assistance of Mr La Rocca was not in evidence, however, Mr La Rocca did obtain the benefit of large amounts of the GEMI loan funds.

24. [75]

    On the same day, Mr Glenn also sent Mr Violi a copy of a letter ostensibly from IBH Investment Bank Ltd to Mr Yassin at Suria Malaysia, stating that “we have been actively promoting the [medium term note] and [have] contacted several potential buyers … they have expressed keen interest to purchase the paper when it is out in the market”. While medium term notes were referenced in the Alnamaa joint venture with FLV, it is unclear whether the reference in the letter to such a note was in any way connected.

25. [76]

    On 5 December 2019, Mr Glenn sent Mr Violi a screenshot of what he later described during cross-examination as a “Bloomberg terminal” purportedly confirming the issuance by IBH Investment Bank to Suria Malaysia of a bond (medium term note) in the sum of USD150 million. In cross-examination, Mr Glenn at first appeared confused as to how the bond operated, but then accepted that the net effect of the bond was that Suria Malaysia was borrowing money. In relation to the screenshot, I note that there is nothing to indicate that it was in fact a bond which had any connection to Suria Malaysia, as only page 1 of 4 was in the photograph and Suria Malaysia was not named. I have doubts as to the veracity of the document, which, at best, demonstrated that Suria Malaysia had no money and needed to raise money for whatever “projects” it had. There was no evidence that Suria Malaysia received the bond money, or if it did, what it did with the money and why it required further funds later by way of the loans in this case. In evidence was a letter from UOB Kay Hian to Singaporean entity “Suria Global (S) Pte Ltd” dated 16 March 2021 offering “credit approvals … with a financing quantum of up to an aggregate of USD135,000,000 on a sole basis, subject to further legal due diligence and documentation”. From that document it appears that Suria Malaysia was to provide security for the loan facility in the form of a “standby letter of credit” issued by Barclays for “not less than” USD150,000,000. Why Suria Malaysia was apparently intending to offer security, and seeking to borrow money, was not explained, nor was the relationship between Suria Malaysia and the Singaporean entity with a similar name. In any event, there is no evidence as to whether Suria Malaysia received and took up a firm offer of finance.

Financial needs of Mr La Rocca, Mr Glenn and Mr David in 2019-2020

1. [77]

   From 2018, Mr David was acting for Mr La Rocca in his criminal case. Senior and junior counsel were engaged. Criminal trials were held in February, November and December 2019. In December 2019, Mr La Rocca was convicted of attempting to possess a commercial quantity of a border-controlled drug (MDMA) secreted in candles imported from Singapore, and released on bail pending sentencing.

2. [78]

   Before the first trial, on 24 January 2019, the clerk of Forbes Chambers had emailed Mr David about requirements for money in trust for Mr La Rocca’s barristers:

3. [79]

   Less than an hour later, Mr David forwarded that email to Mr La Rocca.

4. [80]

   On 25 January 2019, Mr David forwarded a copy of David Legal’s trust account to Mr La Rocca “as per your request”. This showed $5,000 in trust.

5. [81]

   About 15 minutes later, Mr David forwarded to Mr La Rocca a trust account ledger held by David Legal for another client, together with an explanation that the entry in the ledger “TC” meant “trust cheque” and “TR” meant “trust receipt”. While Mr David attempted in cross-examination to suggest he would not intentionally send another client’s trust account ledger and claimed it was “privileged”, I do not accept his evidence. The email with the attachment and instructions was sent from his email address to Mr La Rocca and he must have intended to do so.

6. [82]

   Less than 30 minutes later, Mr La Rocca forwarded to Mr David a doctored version of his trust account ledger, so that it was identical, other than it recorded a balance of $200,000, instead of $5,000. Mr David accepted in cross-examination that he knew he did not hold that money in his trust account.

7. [83]

   Almost immediately, Mr David forwarded the doctored trust account ledger to the clerk of Forbes Chambers including in his email:

8. [84]

   In cross-examination, Mr David made various statements including:

9. [85]

   I find that in 2019, Mr David knowingly sent a false “trust account ledger” to a barristers’ clerk to assure counsel that he had money in trust for Mr La Rocca’s upcoming criminal hearing, when he knew it was false. Mr David’s protestation in cross-examination that he is “extremely ethical” was manifestly incorrect in this context.

10. [86]

    Mr David had also told the clerk of Forbes Chambers that Mr La Rocca was seeking a loan for his legal fees. It appears that Mr David was instrumental in a loan given by Mr Amir Awraham, who like Mr David (and Mr Shamoon) were members of the Assyrian community in Sydney. Mr David gave no evidence about this loan in his affidavits. However, the documentation revealed that:

    1. (1)

       Mr La Rocca sought funds for his legal fees.

    2. (2)

       In early March 2019, Mr Smith, under Mr David’s supervision, prepared a loan agreement for Mr Awraham to loan to Mr La Rocca’s mother $200,000 “for the purpose of improving and developing” her “architectural business practice”.

    3. (3)

       The loan was repayable on 2 July 2019. It is not clear how the La Rocca family intended to repay the loan.

    4. (4)

       The loan documents were enclosed in a letter addressed to Mrs Carmel La Rocca dated 5 March 2019, which indicated that David Legal acted on behalf of Mr Awraham. That letter advised Mrs La Rocca to have her signature on the documentation witnessed “preferably by a solicitor who may advise you in relation to the Loan Agreement”. The letter continued: “you … have the right and are entitled to seek the legal advice that you require to ensure that you are not prejudiced by this loan facility”.

    5. (5)

       All the documentation was sent to Mr La Rocca and not his mother, without explanation. Mr David’s evidence was that this was because Mr La Rocca was the “contact point”. There was no evidence that Mrs La Rocca had consented to Mr La Rocca being her agent.

    6. (6)

       Mr La Rocca sent documents apparently signed by his mother to Mr David.

11. [87]

    Mrs La Rocca did not give evidence.

12. [88]

    After Mr La Rocca’s second trial, in which he was found guilty by the jury, on 3 January 2020, Mr David sent Mr La Rocca an invoice totalling $457,982.60.

13. [89]

    Around this time Mr Violi was exchanging text messages with Mr Glenn, including:

14. [90]

    On 9 January 2020, Mr David sent Mr La Rocca an email including:

15. [91]

    Mr David’s evidence was that “that guy you borrowed from” was Mr Awraham.

16. [92]

    As will be seen below, money borrowed from the GEMI lenders was used to fund Mr La Rocca’s criminal case, including to pay Mr David’s fees and to repay Mr Awraham.

Alleged sale of Strathfield

1. [93]

   Mr Violi’s evidence was that if he needed emails, he would have them sent to an email account associated with the Kidman Wayside Inn (the Kidman email), in which he had an interest. Emails sent to that address would be printed for Mr Violi to go and read or have read to him. However, in his evidence he often stated that he had not received or ever seen emails sent to that address. I do not accept that evidence. It would seem unlikely that administrative staff at the hotel would make decisions about which emails were important or not for Mr Violi.

2. [94]

   At times, Mr Violi told Mr Glenn to send him emails to the Kidman email, and also his personal Gmail address. Repeatedly, Mr Violi suggested he could not read emails sent to that Gmail account on his phone and that Mr La Rocca had access to that email and caused emails to be sent to and from it. However, Mr Violi’s evidence changed when it was demonstrated to him that the email was being used for over a year, while Mr La Rocca was incarcerated. He finally accepted that his usual practice was to ask either his son or an assistant, who worked at the Griffth shopping centre to read emails to him. There is no doubt that important emails were sent to that Gmail address. For example, his accountant, Mr Jess, caused emails to be sent to Mr Violi at that address. Further, the evidence of Ms Panazzolo, the manager of the Griffith shopping centre, which I accept, was that Mr Violi was able to read emails on his phone and she saw him do so and that he only struggled using the computer in the office. I find that Mr Violi was aware of emails that were sent to and from both those email addresses.

3. [95]

   On 30 January 2020, a real estate agent sent an email to the Kidman email, and the email was then forwarded to Mr Violi’s personal Gmail. The real estate agent gave his explanation for why it was not possible to sell the Strathfield property for $50 million. Mr Violi was convinced the property was valuable because of its rezoning and development possibilities.

4. [96]

   In early 2020, Mr La Rocca allegedly told Mr Violi that a company operated by Mr Glenn would buy the Strathfield property for $50 million, and Mr David could act for FLV on the sale. Despite his denial, I find that Mr David told the managing agent of Strathfield, Mr Robert Pignataro, about that sale. I accept Mr Pignataro’s evidence. He was disappointed because he wanted to act as agent on any sale of Strathfield, and had an expectation from working for Mr Violi for years that he would be offered the opportunity to market and sell the property.

5. [97]

   There was no document in evidence that demonstrated any offer to purchase the property as Mr Violi alleged. He did not know the name of the purchaser or the likely timing of the purchase. However, in his July 2025 affidavit, Mr Violi stated the sale was to Suria Malaysia. Mr Violi asserted that most of his communications about the property and his receipt of money thereafter related to the proposed sale. Based on the chronology of events, messages from Mr Glenn in November 2021 (discussed below) confirming that he was buying Strathfield “at a premium” and “above market” and Mr Pignataro’s evidence, I accept that Mr Glenn had agreed with Mr Violi to purchase Strathfield for $50 million and develop the site.

6. [98]

   On 4 February 2020, Mr David’s assistant, Ms Fanola Pantelis, sent an email to Mr Violi’s Gmail account, copied to Mr La Rocca and Mr Smith, attaching a “mandate agreement” between FLV and AL Global Investments Pty Ltd, which was authorised to undertake negotiations for the sale of the Strathfield property. Mr Violi denied ever having seen the agreement. A version purportedly signed by Mr Violi was in evidence, but it did not bear his usual signature. While there would have been no need for an agency agreement if Strathfield had already been sold, I consider that various documentation in this case was prepared that provided some flexibility in terms of the approach that was finally taken by those involved.

7. [99]

   In February 2020, Mr La Rocca was in need of significant sums of money to fund the defence of his criminal case as noted above. On 7 February 2020, Mr Edward Kanaan, a solicitor at David Legal, sent Mr La Rocca an email including:

8. [100]

   On 11 February 2020, one of Mr La Rocca’s barristers emailed Mr David chasing payment:

9. [101]

   A few hours later, Mr David forwarded that email to Mr La Rocca asking him to “deal with this matter”. There is no doubt that around this time, Mr La Rocca was in need of funds, and Mr David had not been paid.

Deed of guarantee and indemnity

1. [102]

   On 13 February 2020, Mr Kaanan at David Legal emailed to Mr La Rocca, “from Fred” and copying in Mr David, an unsigned “Deed of Guarantee and Indemnity”, whereby Suria Australia made promises to FLV. The deed provided that Suria Malaysia would seek to borrow $15 million and FLV would guarantee the loan and offer the Strathfield property as security, and FLV would receive $5 million of the borrowed funds.

2. [103]

   Recitals F and G provided:

3. [104]

   On the same day, Mr La Rocca sent to himself a version of that Deed apparently signed by Mr Violi. However, the signature is not Mr Violi’s usual signature. Mr La Rocca sent a WhatsApp message to Mr Violi’s accountant, Mr Peter Jess, at 2:58pm, attaching the Deed of Guarantee and Indemnity. Mr Violi’s phone records on that date record phone calls with Mr La Rocca at 2:55pm and around 3:02pm. Mr Violi denied having seen or received that document. When pressed as to his knowledge of the Deed, and his phone calls with Mr La Rocca, Mr Violi reverted to his position that “Jason La Rocca had access to [his] phone almost every day” and that “stuff that’s missing on it … messages missing”. I do not accept Mr Violi’s evidence, particularly because Mr La Rocca called Mr Jess that day at 2:59pm from his own telephone and spoke for about 3 minutes, even though Mr Jess claimed he did not recall it. That timing fits with Mr Violi and Mr La Rocca’s calls.

4. [105]

   Mr Jess’ evidence was that he never received Mr La Rocca’s WhatsApp. However, the delivery status of that message on Mr La Rocca’s phone indicates it was received and read by a user of Mr Jess’ WhatsApp. Mr Jess stated he had searched his phone and not found the message, and quite vehemently denied that he had received the Deed of Guarantee and Indemnity or discussed that document with Mr La Rocca. The GEMI lenders suggested that Mr Jess’ evidence ought not be believed, because he had given unsatisfactory evidence in relation to production of documents pursuant to a subpoena issued to his firm. His response had been that he, personally, did not have any documents to produce, apparently drawing a distinction between himself and his firm. I do not consider his evidence in that regard tainted all his evidence. In any event, it is Mr Violi’s evidence that is critical, not Mr Jess’.

5. [106]

   Mr David received a signed copy of that Deed that day, but the evidence does not disclose how. It may be that Mr La Rocca emailed it in reply to Mr Kanaan, or to Mr David himself.

6. [107]

   Mr David’s evidence was that around this time he had spoken to Mr Glenn, who informed him that Suria Malaysia and Mr Violi wanted to borrow money and asked him to speak with brokers. Mr David did not state that he sought instructions from Mr Violi, and I do not consider that he did.

7. [108]

   Thereafter it appears that steps were taken to obtain a loan for Suria Malaysia with FLV’s Strathfield property as security as set out in the Deed.

8. [109]

   On 14 February 2020, Mr David’s evidence was he spoke with a mortgage broker, Mr John Radicchi, seeking a loan for $15 million to Suria Malaysia, secured by a mortgage over FLV’s Strathfield property. Mr David had represented to Mr Radicchi that the “funds will be used for the purpose of business use to pay out creditors and invest thereafter the balance of the funds. The exist strategy is to refinance the debt for a cheaper rate for a long term as settlement needs to be effected within 5 days in order to meet some of the demands.” Mr David did not explain what creditors Suria Malaysia wanted to pay out, and why there were immediate “demands”. This is particularly odd in circumstances where Suria Malaysia had months earlier represented it had EUR8 billion and also allegedly had the benefit of the $150 million bond, and Mr David considered Suria Malaysia was wealthy.

9. [110]

   A short-term lender, Curo Capital Pty Ltd, made an indicative offer of loan on the terms requested by Mr David. Mr David then sent the offer to Mr La Rocca for Mr Violi to consider and to Mr Glenn for Mr Yassin to sign. It is not clear why Mr David did not send the emails directly to Mr Violi or Mr Yassin. Mr David did not make any file note of giving any advice to Mr Violi, nor of having any conversation with him about the loan. Instead, it appears that Mr David considered discussing matters with Mr Glenn was sufficient.

10. [111]

    About 30 minutes after receipt, Mr La Rocca sent Mr David an email entitled “Suria Loan” with a copy of the Curo Capital letter of offer purportedly with Mr Violi’s signature, which did not accord with his usual signature. Mr David requested Mr La Rocca provide another version with a witnessed signature.

11. [112]

    Mr La Rocca appears to have sent back the same version with Mr Violi’s signatures, but now also with a witness’ signature, being Robert Johnson, who did not give evidence. I note that the signatures of both Mr Violi and Mr Johnson do not appear consistent in the two signature blocks, one above the other. Mr Violi said he knew a Robert Johnson who had previously worked on his farm, but not for years, and he denied signing the document. Mr Johnson was not called to give evidence.

12. [113]

    Two minutes later at 4.11pm, Mr David forwarded to Mr Radicchi the signed Curo Capital offer.

13. [114]

    On the same day, 14 February 2020, Mr Smith emailed to Mr La Rocca a St George mortgage discharge form “to be signed by Frank on Page 3”, that previous loan having been fully repaid. On 16 February 2020, Mr La Rocca emailed Mr Smith with the form signed by Mr Violi with his authentic signature.

14. [115]

    On 16 February 2020, Mr La Rocca emailed himself copies of Mr Violi’s identification documents, including one document described as “frank 2019 ID.pdf”. The copy of Mr Violi’s driver’s licence had an expiry date of 1 November 2019. In 2019, Mr La Rocca had helped Mr Violi obtain a new passport, which required an application for a birth certificate. Despite that, Mr Violi’s evidence was that he did not know how Mr La Rocca obtained his identification documents. I find that Mr Violi provided them to Mr La Rocca or authorised him to obtain them.

15. [116]

    On 16 and 17 February 2020, Ms Susie Apolloni, FLV’s bookkeeper sent to Mr Violi’s Gmail copies of Strathfield rates and land tax. An email from Mr Violi’s Gmail forwarded that email to Mr La Rocca. Mr Violi denied sending that email to Mr La Rocca. His evidence was that Mr La Rocca sent it and that Mr La Rocca was “always” taking his phone claiming that his own phone battery was flat. I do not accept that evidence. I consider Mr Violi sent Mr La Rocca the email or authorised Mr La Rocca to do so.

16. [117]

    On 17 February 2020, Mr David was organising a valuation of Strathfield. He asked Mr La Rocca to ask Mr Violi to provide answers to questions from the valuer.

17. [118]

    On 18 February 2020, Mr David took a file note of a 45 minute conversation with Mr Glenn, in which Mr Glenn asked Mr David to call Mr David Cacciola of Integrated Securities, who was owed about $1,500,000 by Mr Glenn, to seek a loan for Suria Malaysia with FLV as guarantor, and to tell Mr Cacciola that:

18. [119]

    Mr David’s explanation for taking a file note on this occasion was “I had come to feel under a degree of pressure to get finance arranged. I was concerned that I may be criticised for not acting sufficiently fast on my instructions, so I decided to document those instructions in a file note.” Mr David did not explain why he felt pressure, or why in those circumstances he did not seek instructions from Mr Violi directly. It was suggested by Mr Violi that Mr David was under personal financial pressure because he had not been paid by Mr La Rocca or Mr Glenn for legal work invoiced at millions, as detailed further below and in the context of Mr David’s credit.

19. [120]

    I consider Mr David was in significant financial stress at the time, despite his denial. Mr David’s insistence that he personally would pay Mr La Rocca’s counsel’s outstanding fees is difficult to reconcile with the fact he did not do so. Conversely, Mr David accepted that he felt under some pressure from Mrs La Rocca to ensure that Mr Awraham did not call on the debt, and he told Mr La Rocca on 9 January 2020 that he was under unbearable “financial pressure”. Mr David nevertheless suggested that his firm “could survive” a steadily increasing overdraft.

20. [121]

    On the same day, Mr La Rocca sent himself a “list of monies to be paid”, which included:

21. [122]

    It is possible to make sense of part of the list from other evidence around that time. Mr Glenn stated that he had an arrangement with Suria Malaysia that he was allowed to use money that it obtained to pay his debts and liabilities at the time, and that Mr La Rocca could do also.

22. [123]

    Mr Glenn owed the following amounts:

    1. (1)

       $1,500,000 seemingly to Mr David Cacciola, referred to as David C.

    2. (2)

       $1,000,000 to NAB on his home mortgage.

    3. (3)

       Several hundreds of thousands of dollars to Mr David for legal fees.

23. [124]

    Mr La Rocca at least needed money to fund his legal fees already incurred, to pay off his mother’s debt and to raise money for his upcoming sentencing hearing and appeal.

24. [125]

    As noted above, Alnamaa had previously sent Suria an invoice for EUR25,000. It may be that further money was “owed” to it.

25. [126]

    It is unclear what the other amounts are, including “Fred Debts”, unless that included some of the legal fees owed to Mr David by Mr Glenn and his family.

26. [127]

    On 19 February 2020, Mr David had a conversation with Mr Cacciola in which he asked questions as to who the parties were, including:

27. [128]

    Mr David’s further file notes suggest he spoke with Mr Glenn and Mr Violi and both indicated that if the other was comfortable with the terms then they would also agree.

28. [129]

    On the same day, Mr Smith emailed Mr Radicchi about an Ausgrid caveat on the Strathfield title.

29. [130]

    On the same day at 10.22pm, Mr David sent Mr La Rocca a copy of Suria Australia’s certificate of registration of a company. At 11.16pm, Mr David sent Integrated Securities a populated “Credit Submission”. Mr David had called Mr La Rocca and indicated that Mr Cacciola wanted the completed application “ASAP”.

30. [131]

    On 20 February 2020, Mr Glenn stated that a Joint Venture Deed had been signed by Mr Violi and Mr Lutui on behalf of Suria Australia, and a document bearing that date was in evidence. It provided that the joint venture “project” was to “maximise the profits … by purchasing the adjoining properties [to FLV’s Strathfield property] with the financial assistance” of Suria Malaysia.

31. [132]

    Further, recitals E and F provided:

32. [133]

    The document does not bear Mr Violi’s usual signature, and he said the signature was “fake”. However, the content of that document provides substance to Mr Violi’s understanding that Strathfield was being sold to Suria Malaysia and it was going to be developed with properties in the vicinity. That is also consistent with Mr Glenn’s assertions that Strathfield was purchased at a premium and Strathfield would be developed “at no cost” to Mr Violi.

33. [134]

    Oddly, it was only on 4 October 2021 that Mr David sent Mr Glenn a “draft” of a joint venture agreement for his consideration “before [he] had Alan sign the same tomorrow”. This is one of many documents that appears to have been created by or between Mr David, Mr Glenn and Mr Lutui, and not at around the date it purports to bear. Mr David has no file note of giving any advice to Mr Violi about this agreement at any time.

34. [135]

    On 20 February 2020, Mr Smith sought from Mr La Rocca Mr Violi’s signature on the Integrated Securities loan application form. Mr La Rocca returned it with a signature unlike Mr Violi’s usual signature. Mr Smith then forwarded the document to Mr Cacciola.

35. [136]

    On the same day, Mr David made a file note about an alleged telephone call with Mr Glenn and Mr Violi. Mr David asked whether there was a valuation for Strathfield. Mr Violi indicated that JLL had valued it at about $20 million about 4 years earlier. Mr Violi is recorded to have said that he would ask Mr La Rocca to send a copy of the valuation to Mr David the next day. The next day, on 21 February 2020, Mr La Rocca sent Mr David and Mr Smith a copy of a 2015 JLL valuation of Strathfield, which I find Mr Violi gave him.

36. [137]

    On 22 February 2020, Mr La Rocca received an email from REX attaching tickets for a flight from Griffith to Sydney for 25 February for Mr Violi and Mr La Rocca.

37. [138]

    On 23 February 2020, Mr David received a formal offer from Integrated Securities for a loan of $17,580,000 in favour of Suria Malaysia, with FLV, Mr Lutui and Mr Violi as guarantors and with security being given over Strathfield. That was sent to Mr La Rocca and also Mr Glenn with the instruction to “coordinate with Jason and frank in signing the agreement”. Mr La Rocca returned it to Mr David with a signature that is not Mr Violi’s usual signature.

38. [139]

    On 24 February 2020, Mr David requested an appraisal of Strathfield from Mr Pignataro for Mr Cacciola of Integrated Securities.

39. [140]

    On the same day, Ms Apolloni sent to Mr Violi’s Gmail Strathfield rates notices, which were then forwarded from that Gmail to Mr La Rocca.

40. [141]

    On the same day, Mr La Rocca’s barrister’s solicitors sent a letter of demand to Mr David, requiring payment of fees, including:

41. [142]

    On 25 February 2020, Mr Pignataro gave an appraisal of Strathfield of $35 million and sent it to Mr Violi at both the Kidman email and Mr Violi’s Gmail account. Mr Pignataro denied that he ought to have taken into account the alleged exchanged contract for Strathfield in preparing that appraisal. He was not relevantly challenged on that evidence, and did not detract from his evidence that Mr David told him he had sold the Strathfield property. The appraisal was sent from Mr Violi’s Gmail to Mr La Rocca. Mr Violi denied doing that, but I find he was aware of it.

42. [143]

    On 25 February 2020, Ms Bilson from Mr Jess’ office sent Curo Capital’s caveats to an email used by Ms Apolloni, FLV’s bookkeeper.

43. [144]

    That day, Mr La Rocca and Mr Violi flew from Griffith to Sydney, landing at 3.55pm. Mr Violi said he stayed with his relative Tony Violi in Camden. Mr Tony Violi did not give evidence corroborating that evidence or where Mr Violi was when he was in Sydney.

44. [145]

    As noted above on the same day, Alnamaa sent another invoice to Suria Malaysia (although addressed to FLV) in the sum of USD329,500, seeking payment into a Hong Kong bank account in the name of Yasin Saad Alakhdar Abu Salem.

45. [146]

    Mr David said that Mr La Rocca and Mr Violi attended his offices for a conference about Mr La Rocca’s criminal case. Mr Violi accepted that he may have attended Mr David’s offices, but not for a conference, but also it was more likely 26 February 2020, because he was going to lunch with his relatives and Mr La Rocca.

46. [147]

    On 26 February 2020, Mr Lutui sent Mr David an email outlining where Mr Cacciola’s loan funds ought to be paid, including:

47. [148]

    On 27 February 2020, Mr Violi accepted that he had a conversation with Mr David about removing an Ausgrid caveat off Strathfield’s title. However, he denied that the purpose of removal was for the lender to register caveats, but instead it was about the alleged purchaser of Strathfield registering an interest. I do not accept Mr Violi’s evidence. Mr David sent an email to Mr Cacciola indicating he had spoken to Mr Violi about removing the caveat to avoid delay. Mr David also sent an email seeking “urgent attention” in advancing the sums outlined in Mr Lutui’s email.

Meeting at David Legal offices 28 February 2020

1. [149]

   A critical meeting took place in the evening of 28 February 2020 at the offices of David Legal. Mr Violi’s evidence was that he did not attend that meeting and did not sign loan agreement documents, whereas the GEMI lenders contended that he did sign or was at least present or authorised the signatures. Mr Violi challenged the evidence of persons who said they saw him at the office and signing the documentation, on the basis that they were mistaken and they could not in fact remember seeing Mr Violi there at the particular meeting. He relied upon his telephone records with a view to demonstrating his phone was used that evening in places away from David Legal’s offices, and to support the truthfulness of his evidence that he was not present. He also demonstrated that Mr David did not in fact sight his original identification documents at the meeting, despite him certifying that he had done so, in order to discredit Mr David’s evidence of witnessing his signatures.

2. [150]

   On that day, Mr David was referred to GEMI for a potential loan. Mr David met Mr Epstein at GEMI’s offices in Martin Place. Mr Epstein’s evidence was that Mr David had a conversation to the effect with himself and Mr Fleming:

3. [151]

   Mr David did not explain the urgency in his evidence.

4. [152]

   That afternoon, Mr Violi called his son from Oran Park in Sydney, which is where he was allegedly staying with relatives while in Sydney.

5. [153]

   At about 5pm, Mr La Rocca, Mr Violi and Mr Lutui arrived at Mr David’s offices allegedly to execute the loan documents organised by Mr Cacciola’s Integrated Securities, “Bridge Street Capital” and “Saddleback”.

6. [154]

   Various people said that they saw Mr Violi attending Mr David’s offices that evening.

7. [155]

   First, Ms Pantelis, a paralegal at Mr David’s firm, saw Mr Violi and Mr La Rocca arrive at the offices at about 5-5.30pm on that day. She recalled the day because on the evening before she had sent an email to the lender asking for documentation. She understood Mr Violi and the others were attending the office to sign the documentation when it arrived. She left the office at a time she understood was before the loan documentation arrived. I accept her evidence.

8. [156]

   Secondly, Ms Zhela Said, then a solicitor at David Legal, recalled seeing at the office various men, including Mr Lutui, Mr La Rocca and Mr Violi. She specifically recalled hearing the men address each other by first name, including hearing “Frank”. She had seen Mr Violi at the office previously; he was known within the office as being a big client of Mr David and being very wealthy. With that reputation, she was surprised that he was dressed so casually. Ms Said assisted Mr David compiling documents for the meeting with the men before she left the office after 6pm. In preparing her recent affidavit, Ms Said was sent two photos and asked if she recognised the person in them. She identified the person as Mr Violi. It was not suggested that this visual identification evidence was inadmissible. It may be that it was impliedly suggested to Ms Said that the photograph was Mr Violi, because that was the subject matter of her evidence. However, Ms Said was clear in her recollection of seeing Mr Violi that evening and hearing the conversations between the men, including references to “Frank”. I accept her evidence.

9. [157]

   Thirdly, Mr Alex Smith, then a solicitor at David Legal, saw the men, including Mr Violi, arrive and saw them in Mr David’s office and walk into the conference room. However, he was not sure of the exact date on which they attended, but believed it was 28 February 2020. He accepted that the conference door was closed when he left work that day and could not absolutely say if Mr Violi had left the office, with the others remaining in the conference room. In the witness box, he had very little recollection of any clients or work he performed at Mr David’s firm. He was aware of Suria Malaysia being a client of Mr David and being a borrower on a loan, but could not otherwise recall any detail. Mr Smith’s evidence does not particularly assist, but is consistent with Mr Violi attending Mr David’s office that evening, which Mr Violi denied.

10. [158]

    Fourthly, Mr Pigott was called by his “good friend”, Mr La Rocca, to attend Mr David’s office to provide some legal advice to Mr Lutui about a loan and mortgage. He knew Mr La Rocca, having assisted him with some legal work, but also knew him socially. At the time, Mr Pigott was a solicitor in his own firm. He ceased practising as a solicitor at the end of June 2020, and now is a law teacher. He could not be precise about when he arrived at Mr David’s office, but thought it was at about 5pm. He recalled being introduced to Mr Lutui and Mr Violi. Mr Pigott sat in an office and spent about 30-40 minutes explaining the documentation to Mr Lutui. He then was part of a “signing ceremony”, where Mr David laid out the documentation and then asked Mr Violi and Mr Lutui to sign at various places on the documents, and Mr Pigott witnessed Mr Lutui’s signature and Mr David witnessed Mr Violi’s. Mr Pigott was relatively certain that he saw Mr Violi sign the documents. Mr Violi’s senior counsel submitted that Mr Pigott was not credible because he had not had his practising certificate renewed because he had failed to submit audited trust accounts on time. I do not accept that would be a reason not to accept his evidence on the issue of witnessing Mr Violi sign documents. I accept his evidence. I also note that on 2 May 2022 Mr Pigott made a statutory declaration about the events, which is consistent with his evidence in Court. His memory is likely to have been better a few years after the event. Even if Mr Pigott was mistaken about seeing Mr Violi sign the documents, his evidence places Mr Violi in Mr David’s office that evening, and being aware of the signing of documents.

11. [159]

    Finally, Mr David also said Mr Violi attended and he witnessed Mr Violi’s signature on the documents. He placed all the men leaving his office at about 9.30pm.

12. [160]

    Mr Violi submitted that Mr David did not witness his signature, and called into question Mr David’s credibility in asserting that he had, because his certification of identity documents was false.

13. [161]

    At 5.13pm on 28 February 2020, Mr La Rocca sent Mr Lutui a WhatsApp message attaching a PDF described as “frank2019 ID”.

14. [162]

    At 5.16pm, Mr Lutui exchanged WhatsApp messages with a person identified as “Gabe 2”, whereby Mr Lutui sent Mr Violi’s identification PDF document, and then another document was sent back with Mr Lutui stating “… It looks legit tho!”.

15. [163]

    At 6.03pm on that day an email was sent from Mr David’s computer to Mr La Rocca with subject “Hi” attaching photos of Mr Violi’s bank card, Medicare card and driver’s licence. The expiry date of the original driver’s licence had been altered, as had the signature. At 7.05pm Mr La Rocca sent the same documents to Mr David’s email address.

16. [164]

    Mr David signed a certification as “an Australian Legal Practitioner” and at the request of the law firm Cornwalls, being the lawyers for Bridge Street Capital and Saddleback. He stated that he carried out an identification of Mr Violi and saw the originals of Mr Violi’s driver’s licence, Medicare card and birth certificate. Mr David attached a copy of Mr Violi’s driver’s licence with the doctored expiry date of 1 November 2020 and doctored signature.

17. [165]

    Mr David had no explanation for the change in the date or signature. He accepted that he did not ask Mr Violi for, nor sight, his original identification documents. Mr David said Mr Violi handed him a copy of a page with his identification documents on it; he considered that his certification was sufficient. His certification was, therefore, false.

18. [166]

    At 11.09pm, Mr David emailed 16 documents to Integrated Security, including the executed facility agreement, general security deed, mortgages and waivers of acknowledgement of legal advice purportedly signed by Mr Violi and Mr Lutui. I was not taken to any file note of Mr David that he provided Mr Violi with any advice. However, there is an alleged file note contained in Exhibit 13, being Mr David’s “file” that was recreated after the commencement of the proceedings, noting that Mr David gave Mr Violi some advice and the documents were signed even though Mr Violi was not happy with the terms of the loan. The provenance of the file note, and the time at which it was composed, are unclear.

19. [167]

    On 29 February 2020, Mr Fleming from GEMI emailed Mr David outlining the loan amounts GEMI could make and timeframes. Later that day, Mr David sent an email to Cornwalls, indicating that his clients would not be proceeding with the Bridge Street Capital and Saddleback loan.

20. [168]

    As noted, Mr Violi asserted that he was not present at Mr David’s offices on that day, placing particular emphasis on his telephone records, which demonstrated that his telephone was used that evening far away from Fairfield.

21. [169]

    Mr Violi's telephone was used from Oran Park to call Tony Violi's daughter at 6.35pm and Mr Jess at 6.44pm. At 8.50pm his phone called Mr La Rocca from Cobbitty. Mr Violi claimed this demonstrated that he was not at Mr David's office that evening. Mr Violi’s evidence was that he only ever went to Mr David’s office twice briefly when Mr La Rocca was discussing his criminal matter and he waited outside or in the waiting area.

22. [170]

    One explanation as to how Mr Violi could have been at Mr David’s office and his phone was used elsewhere could be that Mr Violi left his phone with his relatives. He did not bring forward any person who claimed to have been with him during the evening. Mr Violi’s senior counsel said no Jones v Dunkel inference could be drawn in circumstances where the event was so long ago and no one could be expected to recall a particular evening with relatives. However, it does not appear that Mr Violi made any attempt to bring forward relatives, who may have had an ability to corroborate Mr Violi’s account. Mr Violi had served an affidavit of his niece, but did not call her to give evidence.

23. [171]

    In those circumstances, I consider it appropriate to infer that Mr Violi’s identified relatives would not have supported his assertion that he was not present at the office of David Legal on 28 February 2020 when the loan documentation was signed: see eg Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 384-5 (Heydon, Crennan and Bell JJ). Of course, that does not “permit the court to infer that the uncalled evidence would have been positively damaging to” Mr Violi’s case, but it does facilitate the “more ready acceptance of evidence which might have been contradicted but which was not”: RHG Mortgage Corporation Ltd v Ianni [2016] NSWCA 270 at [161] (Ward JA, as the President then was, Meagher JA agreeing).

24. [172]

    That makes the alternative possibility of Mr Violi’s phone having been left with someone else more likely than Mr Violi using his phone away from Fairfield. Alternatively, it may be the case that Mr Violi attended the office briefly, discussed the loan, and then departed, leaving execution of the documents to Mr La Rocca and/or Mr Lutui. He may well then have used his phone that evening elsewhere. Whatever the explanation be, it does not, in my view, lead me to find that Mr Violi was ignorant as to the conference at David Legal on 28 February 2020 or that the loan documents were executed with his signature.

25. [173]

    I do not accept Mr Violi’s evidence in preference to that of all the other witnesses, and find that he was at Mr David’s legal office on the evening of 28 February 2020. It is more likely that all the persons who placed Mr Violi at the office have more honest and accurate recollections than Mr Violi, who brought forward no corroborating evidence, beyond a submission based on his telephone records. However, in reaching that conclusion, I have identified conduct by Mr David that suggests he was cavalier with his duties as a legal practitioner.

26. [174]

    I accept that the signatures on the documents do not bear Mr Violi’s usual signature. I consider it most likely that Mr Violi authorised Mr Lutui or Mr La Rocca to sign the documentation for him, but it is unnecessary to decide in circumstances where, in any event, I am satisfied on balance that Mr Violi was aware of the loan and mortgage documentation and authorised a signature being placed on them. To find otherwise would:

    1. (1)

       ignore Mr Violi’s receipt of all the emails sent to Mr Violi’s Gmail or the Kidman email concerning the arrangements between Suria Malaysia and FLV and properties for loans.

    2. (2)

       find that all the witnesses with no interest in this litigation, who placed Mr Violi at the offices, were mistaken or had lied.

    3. (3)

       ignore Mr Violi’s later conduct that was consistent with his knowledge of the loans, including that he changed the properties’ insurance certificates to record GEMI as an interested person, and sent messages consistent with such knowledge, as detailed below.

27. [175]

    First, Mr Violi’s explanation for his position in this litigation was that it was all a “stitch up” and/or a “conspiracy” was not plausible. He was adamant that he had not signed any relevant documents. His best guess at who had signed his name was that it was Mr La Rocca, or that Mr La Rocca had “stolen his identity”. As noted above, I do not accept Mr Violi's evidence about Mr La Rocca using his email and telephone, particularly where both were used in ways that do not assist Mr Violi's version of events, when Mr La Rocca was incarcerated. I accept that the documents do not bear Mr Violi’s usual signature, however, I consider he knew and authorised the signatures and the loans and mortgages.

28. [176]

    Secondly, Mr Violi denied he had ever met Mr Lutui and had never heard of him. I do not accept that evidence for the following reasons:

    1. (1)

       There are witnesses who saw them together at Mr David's offices on 28 February and 1 March 2020.

    2. (2)

       Further, in March 2020, Mr Violi's bookkeeper, Ms Apolloni recorded payments in and out of FLV's bank account referencing “loan Lutui”. That could only have been done on Mr Violi's instructions, which demonstrates his knowledge of Mr Lutui.

    3. (3)

       On 18 April 2020, Mr Glenn sent a message to Mr Violi indicating that “Alan” would transfer funds to Mr Violi’s account on Monday. Mr Violi did not respond asking who Alan was, but instead engaged with Mr Glenn, and dealt with the money that was in fact transferred.

29. [177]

    Mr Violi’s denial of having met Mr Lutui appears to have been an attempt to distance himself from Mr Lutui, and the fact that Mr Lutui provided documentation with Mr Violi’s signature to Mr David and the fact that loan money was paid to Pacific Carbon controlled by Mr Lutui.

30. [178]

    Thirdly, Mr Violi similarly denied having met Mr Bart Vasic, Mr La Rocca’s barrister. I do not accept that evidence either, as detailed below.

Meeting on 1 March 2020 – GEMI loan documents signed

1. [179]

   On 1 March 2020 at about 8.50am, Mr Violi claimed he arrived at Sydney airport to catch a flight back to Griffith departing at 10.35am. At 9.21am, Mr Violi’s phone called Anthony Violi with a call origin of Mascot, Sydney.

2. [180]

   However, Mr Pigott stated that he attended Mr David’s offices at about 9am and saw Mr Violi, Mr Lutui and Mr La Rocca go into the conference room.

3. [181]

   At 11.24am, Mr David sent an email copying in GEMI’s solicitors attaching documents including an executed mortgage, loan agreement and statutory declaration by Mr Lutui and Mr Violi, but not being his usual signature.

4. [182]

   By this documentation GEMI agreed to advance $19,500,000 to Suria Australia. The loan was secured by, inter alia, mortgages ostensibly granted by FLV over its Strathfield and Griffith properties. Further, Mr Lutui gave a personal guarantee. The loan was repayable with interest and other charges, 6 months after the date of the loan, namely on 1 September 2020.

5. [183]

   One of the documents Mr David signed was a “verification of identity certificate” as a “solicitor admitted to practice in NSW”. He certified that at a face to face meeting he identified Mr Violi and saw his original driver’s licence and Medicare card, and that the verification was “conducted in accordance with the New South Wales Registrar General’s Verification of Identity Standard under the NSW Participation Rules” and that he witnessed Mr Violi sign the mortgage. Mr David accepted in cross-examination that he had not seen the original identification documents. His explanation was that he had seen Mr Violi sign documents before and had seen his identification documents before and so this approach was “no problem” and that he was “very comfortable” the copies were “genuine”. Such a lax approach is unacceptable.

6. [184]

   At 11.49am, Mr David sent an email to Mr Andrew Margi, a finance broker who sometimes referred transactions to GEMI, setting out various payment directions including USD329,500 to be sent to Yasin Saad Alakhdar Abu Salem. That email was forwarded to GEMI.

7. [185]

   At 11.57am, Mr Violi’s phone called his son; he said it was for his son to pick him up from the airport, off the flight that arrived at 11.55am. Mr Violi’s son did not give evidence corroborating that fact, but could have done so.

8. [186]

   On 2 March 2020, Mr La Rocca sent Mr David rates notices and land tax assessment of the Strathfield property. Mr David sent them to GEMI.

9. [187]

   Curo Capital had lodged a caveat against the title to the Strathfield property. On 2 March 2020, GEMI followed suit and lodged a caveat against the same property. On the same day, Bridge Street Capital and Saddleback did so as well. The next day, Land Registry Services sent letters to the addresses of the properties notifying FLV of those caveats. It may be that Mr Violi had no system in place for correspondence received at Strathfield to be collected, despite Mr Pignataro being an agent with the keys and apparently managing the property, because the property was vacant. However, I do not accept that excuse for Mr Violi’s claim that he did not receive the letters at the Griffith shopping centre. Ms Panazzolo’s evidence was that she would pass on letters received at the centre to Mr Violi. There is no reason to believe she did not give Mr Violi letters. The caveat in GEMI’s favour referenced a mortgage over the property by reason of a loan agreement. I find Mr Violi was aware of the caveat letters.

AON insurance certificates record GEMI as interested party

1. [188]

   An additional compelling reason why I consider Mr Violi was aware of the GEMI loan was the change of the AON insurance certificates for Griffith and Strathfield.

2. [189]

   One of the requirements under the loan was for GEMI’s interest to be recorded on the AON insurance certificates of the properties. I reject Mr Violi’s denial that he organised for that change to occur because:

   1. (1)

      On 2 March 2020, Mr Violi’s phone called the AON telephone number in Griffith. Shortly thereafter, AON sent copies of the insurance certificates to Mr La Rocca, who forwarded those to Mr David.

   2. (2)

      After money was advanced by GEMI on 19 March 2020, Mr Violi’s phone called AON. Shortly thereafter, an email was sent from Ms Amber Corner at AON to Mr Violi, at the Kidman email, and Mr Smith:

   3. (3)

      Mr Smith’s unchallenged evidence was that in his experience insurers must speak with the insured when changing insurance certificates. He said he had no recollection of speaking to AON for Mr Violi.

   4. (4)

      Also on 19 March, Ms Corner at AON forwarded the email to Mr Roy Catanzariti at AON stating:

3. [190]

   Mr Violi did not bring forward anyone from AON to dispel the obvious inference that Mr Violi spoke with the insurance company and requested the change. It is unlikely that Mr Smith spoke to AON without Mr Violi’s approval or instructions and it was not suggested to him that he did so.

4. [191]

   I do not accept Mr Violi’s evidence that all those communications were carried out by someone else, such as Mr La Rocca, without Mr Violi’s knowledge. Calls were made from Mr Violi’s phone to his son around the time of the calls to AON. I do not accept that just for the calls to AON Mr Violi had given his phone to Mr La Rocca to call AON, or even if he had, I consider he was aware of the calls being made and authorised them.

Advances of GEMI loan money

1. [192]

   On 2 March 2020, Mr David gave GEMI instructions for the payments of the first tranche of $5,600,000, including $510,000 that was paid to Mr Violi’s personal bank account. Mr David sent Mr La Rocca a remittance slip showing the $510,000 deposit from “GEMI 169 – Strathfield”, and appeared in Mr Violi’s account as “Gemi Investors Gemi 169 Fp & Lw V”. I do not accept Mr Violi’s evidence that he believed Mr La Rocca told him that money had been paid into his account by an unnamed CDX investor who required a “commercial bank account” in order to invest, and was therefore using Mr Violi’s account and required him to forward that money overseas.

2. [193]

   On 3 March 2020, Mr Violi went with Mr La Rocca to the Griffth branch of St George and Mr Violi signed a transfer of USD329,500 (being $528,637.90) to Yasin Saad Alakhdar Abu Salem, which appeared to relate to the invoice received by Suria Malaysia from Alnamaa on 25 February 2020. In evidence was a letter from Mr Violi, with his usual signature, to Mr Salem confirming the transfer of that amount of money. Mr Violi stated that he did not pay attention to the details Mr La Rocca had completed. Even if it were true that Mr Violi did not know where the money was going, which I do not accept, it would demonstrate that Mr Violi gave Mr La Rocca authority in relation to significant transactions on his account. Mr La Rocca was soon to be sentenced for a conviction for drug importation crimes; that might have given Mr Violi cause to be cautious about large amounts of money appearing in his account.

3. [194]

   On 3 March 2020, GEMI advanced a further $4.99 million, including:

   1. (1)

      $50,174.41 to ERA Legal, the solicitors for Curo Capital to discharge the debt claimed by Curo Capital in relation to the aborted loan to be secured by the charge notified in its caveat;

   2. (2)

      $412,008.82 to Cornwalls, the solicitors for Bridge Street Capital and Saddleback, in discharge of the brokerage fee debt claimed by them to be secured by the charge notified in their caveat. Mr David had that sum paid into his trust account. Mr David represented to counsel he sought to brief that he acted for Suria Australia, the borrower, which wanted to recover that fee. He expressly stated that he did not act for FLV. Mr David appeared to accept in cross-examination that he was obtaining instructions solely from Mr Glenn in this regard. Mr Violi submitted that Mr David did not seek instructions from him. That may in fact be correct in relation to some matters. However, as I have found that Mr Violi signed or authorised his signature on the GEMI loan documents, it would not matter that Mr Glenn and Suria Malaysia were seeking to recover the $412,000.

   3. (3)

      $1,500,000 into David Legal’s trust account, allocated to Mr La Rocca’s criminal matter. Of that, $350,000 was paid to Mr Awraham, ostensibly in repayment of Mrs La Rocca’s loan. Further sums were paid to Mr David’s invoices for Mr Glenn’s legal dispute concerning the Australian Taxation Office.

   4. (4)

      $250,000 to Mr La Rocca personally.

   5. (5)

      $88,350 to David Legal’s trust account where it was allocated towards a matter for Mr Glenn.

   6. (6)

      $1,939,825.59 to Pacific Carbon. Mr Lutui transferred that money received in Pacific Carbon’s account to foreign bank accounts.

4. [195]

   On 3 March 2020 at 2.20pm, Mr Violi sent a message to Mr David asking “Hi Fred, is the pexa settlement happening today or tomorrow?”. I do not accept Mr Violi’s evidence that he did not send that message. Mr Violi’s evidence was that he was chasing Mr David about the sale of the Strathfield property to Mr Glenn’s company. I reject that explanation. There would not have been any PEXA settlement in circumstances where no contract for sale had been created or signed, to Mr Violi’s knowledge. I consider Mr Violi was asking when he would receive his portion of the loan money.

5. [196]

   On 4 March 2020, Ms Byrne emailed Alex Smith indicating that settlement could not occur without the withdrawal of caveats in favour of Bridge Street Capital and Saddleback. Later that day, GEMI funds were used to discharge Curo Capital’s debt and to have the caveats removed.

6. [197]

   By 5 March 2020, Mr David had sent GEMI documentation concerning the Griffth property, including the then current leases, a copy of the purchase contract, land tax, council and water rates notices, and updated certificates of currency of insurance.

7. [198]

   On 5 March 2020, GEMI advanced $5 million, including $2.5 million to Mr Violi’s bank account. A text message conversation between Mr David and Mr Violi included:

8. [199]

   I accept Mr Violi’s evidence that he was told that the $2.5 million came from Suria Malaysia possibly as a 5% deposit for the Strathfield property purchase, but I consider he knew the money was coming from the loaned funds. However, as detailed elsewhere, I accept that Mr Violi understood from Mr Glenn that Suria Malaysia would purchase and develop the Strathfield property.

9. [200]

   That same day, Ms Bilson of Mr Jess’ office sent to Ms Apolloni, FLV’s bookkeeper, “another caveat for F&L Violi” and offered to post a copy. I do not accept that Ms Bilson sent that email without authority from someone within Mr Jess’ office. However, that is not inconsistent with Mr Jess personally not knowing about the caveats. I have no reason to believe that Ms Apolloni failed to provide the caveats to Mr Violi. He was aware of caveats over FLV’s properties at the time.

10. [201]

    Ms Apolloni recorded in FLV’s general ledger the receipt of $2.5 million as a “loan” from Mr David. I accept she did so on Mr Violi’s instructions. Also recorded was a “loan” of $510,000 and a “repayment” of $528,637.90. While the transfer in and out of Mr Violi’s bank account was accurate, there was no reason for Ms Apolloni to record them as a loan and a repayment, unless Mr Violi considered the money related to a loan. It appears that she sought instructions from Mr Violi when she was unsure of appropriate descriptions for the books. Had it been a transfer from a CDX investor, then it is unclear why it would not have been recorded differently.

11. [202]

    On 6 March 2020, GEMI registered a mortgage, and withdrew its caveats, over the Griffith property.

12. [203]

    On 6 March 2020, GEMI made the final advance of $6,566,250, which was disbursed as follows:

    1. (1)

       $1,311,660 to David Legal’s trust account where it was allocated to matters relating to Mr Glenn and his family; and

    2. (2)

       $3,004,590 to Pacific Carbon, the ultimate destination of which is unknown.

13. [204]

    On 10 March 2020, Ms Bilson of Mr Jess’ office emailed Ms Apolloni attaching a 4 March 2020 caveat over the Griffith property in favour of Bridge Street Capital and Saddleback. Again, I accept Mr Jess gave instructions to do so, even if he cannot now recall that.

14. [205]

    On that same day, a Deed of Variation was executed by Mr Lutui and witnessed by Mr David. A signature unlike Mr Violi’s usual signature was also affixed. The effect of the deed was to increase the loan by $220,000 plus GST being a “risk fee” in favour of GEMI. This fee was said to be in return for certain tranches of the loan funds being provided without agreed security, because registration of a mortgage had been delayed until about 19 March 2020 by the Ausgrid caveat.

15. [206]

    On 19 March 2020, GEMI registered its mortgage over the Strathfield property and Westpac’s mortgage was discharged.

16. [207]

    On 24 March 2020, Mr David sent to Mr La Rocca a GEMI term sheet for a further loan to provide to Mr Violi and Mr Lutui to consider. Later that day, Mr La Rocca returned the term sheet apparently having been signed by Mr Violi and Mr Lutui, however it too does not bear Mr Violi’s usual signature.

17. [208]

    Mr Violi asserted that, on 25 March 2020, he repaid $1.2 million of the alleged $2.5 million deposit for the sale of Strathfield that he had received on 6 March 2020. He claimed Mr David told him it was repaid to the buyer, because the settlement was going to be delayed. I do not accept that evidence, particularly in circumstances where there was no documentary evidence. Mr Violi’s bookkeeper recorded it as a repayment of a loan to Mr David. In fact, the money was paid to Mr La Rocca’s bank account. This might be another example of Mr Violi providing financial assistance to Mr La Rocca. However, later Mr Violi references the payment to Mr David and his expectation that it would have been repaid to him.

18. [209]

    On 26 March 2020, Mr Glenn sent Mr Violi messages showing $8,000 paid to Griffith Central and $18,637.90 to Mr Violi. That money was received by Mr Violi on 27 March 2020 with description “Repayment CDX Australia”. That amount is the difference between the $510,000 paid into Mr Violi’s account from the GEMI first tranche and the $528,637.90 paid by Mr Violi to Abu Salem on 3 March 2020.

19. [210]

    In an affidavit filed by Mr Violi about a week before the trial was due to commence, Mr Violi for the first time accepted that Mr La Rocca told him about mortgages over the properties in March 2020. He claimed the circumstances were:

    1. (1)

       Mr La Rocca attended his farm with a “large man”.

    2. (2)

       Mr La Rocca told him that he and Mr David had placed mortgages on the properties, to stop FLV from selling to anyone else until Suria Malaysia had completed the purchase of Strathfield.

    3. (3)

       Upon Mr Violi complaining that he had “not signed any mortgages or authorised anything like that”, Mr La Rocca told him “in a menacing tone” to “not go complaining to anyone about what he and Fred had done”. At the time, the large man was playing with his gun.

    4. (4)

       Mr La Rocca assured him that the sale would go through in a few weeks.

20. [211]

    Mr Violi stated that because of the “threats made by Jason” he did not see anyone or investigate or take issue with “whatever ‘mortgages’ had been registered.”

21. [212]

    When asked in cross-examination why he was prepared to speak up about the threats now, over five years later, Mr Violi’s evidence was:

22. [213]

    Mr Violi stated that he told his older brother Dominic about the incident. However, Dominic was not called to give evidence about this and I do not accept Mr Violi’s evidence on this matter.

23. [214]

    I accept that before this time Mr Violi knew about the loan and the mortgages over the properties. It may be that Mr Violi considered the loan was related to the purchase and development of Strathfield. However, I consider Mr Violi was prepared to provide security of the FLV properties to assist Suria Malaysia to progress that development and CDX, which would in time benefit him.

24. [215]

    On 30 March 2020, Mr La Rocca’s sentencing hearing took place. On that day, Mr Violi notified Mr Glenn that Mr La Rocca had been sentenced to 6 years.

25. [216]

    Mr Violi denied that he had provided a character reference for Mr La Rocca by sitting with barrister, Bart Vasic, and dictating it to him. That was despite his evidence that had someone asked for a reference he would have provided one.

26. [217]

    Mr Violi said he was "1000% sure" that in March 2020 he had not met with Mr Vasic. However, photographs taken by Mr Vasic at the time demonstrate that Mr Violi socialised with Mr Vasic, attending a winery around Griffith on the weekend, which was consistent with Mr Vasic’s unchallenged evidence, and which I accept.

27. [218]

    Mr Violi refused to identify Mr David in the photographs with him and Mr Vasic on the basis that the photos were too small as he did not have glasses, and denied having any memory of going to a winery with them, despite being shown the photographs.

28. [219]

    I find that Mr Violi was outside the court on the day of Mr La Rocca’s sentencing hearing. He had been asked to attend by Mr David as a character witness, and he did so. He was aware that he had provided a character reference as drafted by Mr Vasic in his presence. Mr David had sent the character reference in draft to Mr La Rocca for Mr Violi to sign. The reference does not bear Mr Violi’s usual signature, but I find that Mr Violi authorised the reference to be used and authorised it to be finalised, including with the attachment of a signature for him.

29. [220]

    On the date of the sentencing hearing, Mr La Rocca was incarcerated on his drug conviction. After that time, Mr Violi’s assertions that Mr La Rocca was sending emails and messages on his behalf from his email and phone cannot be true. That tells against Mr Violi’s assertions that Mr La Rocca otherwise controlled his communications without his knowledge.

30. [221]

    These are matters that detract from Mr Violi’s credit, including whether he signed the loan documents or authorised someone else to do so.

31. [222]

    On 17 April 2020, Mr Glenn sent Mr Violi a screenshot from IBH Investment Bank stating it was to be sent USD1,350,000 with the payment reference “Suria Malaysia”. Mr Violi variously said he did not know how to open the message, or he did not know why Mr Glenn had sent it to him and he did not ask. I do not accept that evidence.

32. [223]

    Mr Glenn asked Mr Violi to attend his local bank branch and to transfer $675,000 from his bank account to the account in the screenshot, which he did in two transfers, one for USD410 and the other for USD409,590 (which amounted to $673,778.58).

33. [224]

    On 20 April 2020, Mr Violi received $675,000 into another of his bank accounts with the description “CDX Australia”. Mr Violi understood this as a repayment of the amount he had transferred as Mr Glenn had requested. This demonstrates that Mr Violi was prepared to move money at Mr Glenn’s instruction without question.

34. [225]

    A day earlier, Mr Violi had sent a screenshot of an agreement dated 13 April 2020 with IBH Global Fund to Mr Glenn, with what appears to be his genuine signature. Mr Violi said he could not recall signing it. He also sent Mr Glenn a copy of his driver’s licence expiring on 1 November 2024 and his passport. This further appears to demonstrate that Mr Violi was aware of the various transactions occurring, even if not the detail of them.

35. [226]

    On 22 April 2020, $3,675.65 was deposited into Mr Violi’s account from Mr Lutui, $3,643.65 of which was then transferred overseas. Mr Violi may have been acting on a message from Mr Glenn to Mr Violi that day stating “2k Euro” and providing bank account details of a Ms Adele Coraci, who apparently resides in Rome. No evidence was adduced about who Ms Coraci is.

36. [227]

    On 29 April 2020, Mr Violi sent Mr Glenn two messages:

37. [228]

    I consider these messages reinforce that Mr Violi always was prepared to assist Mr Glenn with money and move it around as he wished. I consider he had been told of the reasons for the money and the movement of it. Further, from Mr Violi’s perspective, Mr David was intimately involved in all of the transactions. Mr Violi also had an expectation that Mr David would have repaid the “loan” to him of $1.2 million quickly.

38. [229]

    On 22 May 2020, Mr Violi exchanged messages with Mr Glenn, which are significant in terms of Mr Violi revealing what he knew about caveats and “loans”:

39. [230]

    I do not accept Mr Violi’s explanation for this message. He claimed that before he went to gaol, Mr La Rocca had left him with a script to send messages to Mr Glenn to put him “under pressure”. However, the message expressly states it is not to put Mr Glenn under pressure, and instead Mr Violi has financial commitments, which he claimed in cross-examination was a lie to pressure Mr Glenn to launch CDX. Further, the handwritten piece of paper Mr Violi claimed was the note dictated by Mr La Rocca did not include any reference to loans. It is further unclear how the message could pressure Mr Glenn to launch CDX if it was not ready.

40. [231]

    However, the message is telling because it demonstrates that:

    1. (1)

       Mr Violi and Mr Glenn accepted that Mr Violi had always came up with funds when Mr Glenn sought them.

    2. (2)

       Mr Violi was aware of caveats on the properties’ titles at this time.

    3. (3)

       Mr Glenn was drawing a distinction between the return of Mr Violi’s “funds” and having the “loan” paid back.

    4. (4)

       Mr David was organising for the repayment of the loan.

41. [232]

    I do not accept Mr Violi’s evidence that the reference to “loans” was a reference to the $2.5 million receipt Mr Violi claimed was a deposit for the purchase of Strathfield, or the “repayment” of $1.2 million as part deposit. Instead, Mr Violi expected $2.5 million of the loan funds, and expected Mr David to repay the $1.2 million.

42. [233]

    The fact that Mr Violi referenced that he had not “signed” anything on those loans most likely is a reference to the fact that Mr Violi knew that the signature on the GEMI loan documentation did not appear to be his, or had been signed by someone else on his behalf. Mr Violi also understood the loan was to be insured, which is consistent with the terms of the Deed of Guarantee and Indemnity, of which Mr Violi denied knowledge. I consider this message clearly demonstrates Mr Violi’s knowledge of the loans and more details of the transactions than he is prepared to admit.

43. [234]

    On 12 June 2020, Mr Violi and Mr David exchanged messages, in which Mr Violi was seeking information about money and his ability to borrow with caveats on the properties’ titles:

44. [235]

    Mr Violi appeared to be expressing disquiet that he had not received CDX riches and that the properties were still encumbered and preventing him from borrowing money against them for his supermarket. At the time GEMI had mortgages registered over both properties.

45. [236]

    Between 19-25 June 2020, Mr Violi exchanged messages with Mr Glenn:

46. [237]

    On 26 June 2020, Mr Violi sent Mr David the following further messages, again noting that the loan was meant to be insured, demonstrating his knowledge of the Deed of Guarantee and Indemnity:

47. [238]

    On 6 July 2020, Mr Violi sent Mr David a message: “Hi Fred, how did u go drawing up the contract with Strathfield?”. No response was received.

48. [239]

    On 7 July 2020, he sent a message to Mr David:

49. [240]

    On 13 July 2020, Mr David responded:

50. [241]

    No such call took place the next day. Instead, Mr David informed Mr Violi that Mr Glenn would “[tell him] overnight” about the funds.

51. [242]

    On 8 July 2020, Mr Violi sent Mr Glenn a message:

52. [243]

    On 24 July 2020, Mr David sent a message to Mr Violi:

53. [244]

    Between 28 July and 8 August 2020, Mr Violi and Mr Glenn exchanged messages:

54. [245]

    The GEMI loan was due to expire on 1 September 2020.

55. [246]

    On 14 August 2020, an agent at CBRE emailed Mr Violi at the Kidman email asking for the gross income of Strathfield. That email was forwarded some 12 minutes later to Mr Violi’s Gmail account.

56. [247]

    On 20 August 2020, Mr Violi and Mr Glenn exchanged text messages including:

57. [248]

    On 24 August 2020, Mr David emailed a broker, Mr Margi, at First Finance Choice in relation to a proposed extension for the GEMI loan, which included:

58. [249]

    If that email is truthful, then Mr David’s email is inconsistent with his affidavit evidence that, as at October 2020, he was unaware of any purchaser. However, it is consistent with Mr David having told Mr Pignataro that Strathfield had been sold, and that the purchaser was a foreign entity. It is also consistent with Mr Violi making such an assertion. I consider that Mr David and Mr Violi had been telling others that Strathfield had been sold, for whatever reason.

59. [250]

    Between 27 and 29 August 2020, Mr Glenn and Mr Violi exchanged the following messages:

60. [251]

    On 31 August 2020, Mr Andrews, a solicitor acting for GEMI, emailed Mr Smith, including that the parties had agreed to terms for an extension of the loan and attaching relevant documentation.

61. [252]

    Mr David asserted that he had conversations with Mr Lutui and Mr Violi about an extension of the GEMI loan. He had no file notes about either conversation.

62. [253]

    On 8 September 2020, Alex Smith emailed Mr Lutui, copying in Mr David, attaching a Deed of Variation of the GEMI loan. In that email, Mr Smith noted that Mr Lutui would be “signing in [his] capacity as the director of Suria as well as [his] individual capacity as guarantor” and that Mr Violi would be “signing in his capacity as director of F & L Violi Pty Ltd”.

63. [254]

    There is no evidence about how it is said Mr Lutui provided that Deed of Variation to Mr Violi, or how he sent it back — for example, there are no emails forwarding the documentation.

64. [255]

    On 11 September 2020, Mr Lutui emailed Mr David a Deed of Variation of the GEMI loan apparently executed by Mr Lutui and Mr Violi. It does not bear Mr Violi’s usual signature and the signature was not witnessed. The effect of the deed was to increase the balance of the loan to $21,580,103.85 and extend the term to 1 December 2020. In effect, GEMI loaned another $1,844,703.85.

65. [256]

    I consider that Mr Violi was aware of this extension of the GEMI loan, similarly to the entry into the GEMI loan itself. He knew that the loan had not been paid out and FLV’s properties were encumbered. Mr Violi was hopeful that Suria Malaysia would come into money to repay the loan debt.

66. [257]

    On 11 September 2020, Mr David and Mr Violi exchanged text messages:

67. [258]

    On 1 October 2020, Mr Violi sent a message to Mr Glenn:

68. [259]

    The attached “list” had names next to amounts of money totalling $4,534,250. Next to “F Violi” was $3,800,000 and $408,000. Mr Violi considered the $408,000 was the purchase of 204,000 “shares” or tokens in CDX for $2 each. Mr Violi’s explanation of the $3,800,000 was that it was:

69. [260]

    As noted elsewhere, I accept that Mr Violi had been told by Mr Glenn that he or Suria Malaysia would buy Strathfield for $50 million. It is also apparent that Mr Violi had been asked by Mr David to pay $1.2 million of the $2.5 million he had received, to Mr La Rocca, which he did. However, the sum of $5 million was also the amount that FLV was to receive pursuant to the Deed of Guarantee and Indemnity, which is the more likely explanation for the calculation.

70. [261]

    The GEMI loan was to be repaid by 1 December 2020. It appears that Mr Violi was becoming increasingly nervous as that date approached.

71. [262]

    Between 6 and 20 October 2020, Mr Violi sent Mr David various messages asking for updates about funds being received. Mr David consistently said that he had no information from Mr Glenn. He never referred to extensions of loans or loans at all. Mr Violi also continued to chase Mr Glenn for information.

72. [263]

    In October 2020, GEMI instructed a valuer for the Strathfield property, Mr Dean Galanos. He indicated that he had been requested to undertake a valuation “for and on behalf of the Violi family, for first mortgagee purposes”.

73. [264]

    On 27 October 2020, Mr David and Mr Violi’s exchanged text messages make it plain that Mr Violi was aware that the “lender” needed to value Strathfield and he did not question that:

74. [265]

    On 30 October 2020, Mr Smith sent an email to Mr Violi at the Kidman email requesting that Mr Violi send information “for valuation to occur”. Mr Violi stated he thought the valuation was for the incoming purchaser. However, in light of the messages above, I do not accept that evidence about “the lender”.

75. [266]

    On 6 November 2020, Mr Violi and Mr Glenn exchanged messages including:

76. [267]

    On 7 November 2020, Mr David sent Mr Violi a message:

77. [268]

    Mr David did not explain who Mr Violi’s “people” were.

78. [269]

    On the same day, Mr Violi sent Mr Glenn a message:

79. [270]

    On 11 November 2020, Mr David sent Mr Violi a message requesting financial documents “that I need. Can you please attend to that so that I can provide the same to these people”. Again, “these people” were not identified. Mr Violi sent a screenshot of that message to Mr Glenn and asked him to speak to Mr David.

80. [271]

    On 12 November 2020, Mr David sent an email to Mr Lutui attaching a letter of offer from First Capital Finance Group for a loan of the lesser of $23 million or 55% of the valuation.

81. [272]

    On 27 November 2020, Mr Galanos asked Ms Wood, the then manager of the Griffith shopping centre, to provide him with documentation about the leases in the shopping centre “for first mortgage purposes”. In his valuation report, which is dated 3 November 2020, but was likely intended to be 3 December 2020, he included information about the leases that he must have obtained with the consent of Mr Violi. The final report was provided to Mr Epstein on 15 December 2020.

82. [273]

    On 30 November 2020, Mr Violi sent Mr Glenn a message, the meaning behind which was unclear and unexplained by Mr Violi:

83. [274]

    It may well be that Mr Violi was in effect demanding that the loan was repaid on time, namely the next day. The only other possibility was an extension of the loan or a refinance.

84. [275]

    Mr David asserted that in late 2020 he had conversations with Mr Lutui and Mr Violi about a further extension to the GEMI loan for a period of 6 months.

85. [276]

    On 4 December 2020, Mr David emailed Mr Lutui attaching a GEMI term sheet for an extension. That proposal was updated by Summer Lawyers. This was the third variation of the GEMI loan. It increased the loan balance to $25,860,757.75.

86. [277]

    On 9 December 2020, Mr David sent an email to Mr Lutui attaching the updated Deed of Variation for consideration by him and Mr Violi. He did not explain why he did not copy Mr Violi into the email correspondence, as his office had on occasion previously.

87. [278]

    Mr David relied on the fact that his email included “We note that you will be discussing the said Deed with Mr Frank Violi directly prior to the said Deed being executed.” However, Mr David did not keep any file note of any conversation to that effect with Mr Lutui, nor about giving advice or receiving instructions from Mr Violi. Mr David also stressed that he was not required to witness Mr Violi’s signature on that document. The signature is not Mr Violi’s usual signature. Mr David stated that he witnessed Mr Lutui’s signature when he brought the original signed version to his office. However, that appears inconsistent with the fact that Mr Lutui emailed a copy of an allegedly executed version at 10.54am on 10 December 2020, and at 11.12am, Mr Smith emailed to GEMI’s lawyers the executed version with Mr David’s signature purportedly witnessing Mr Lutui’s signature. There would have been no reason for Mr Lutui to email Mr David’s office the signed document if he was attending in person with the document for Mr David to witness his signature. There is no email correspondence demonstrating that Mr Lutui sent the document to Mr Violi for his execution with a return email to Mr Lutui. I find that Mr Violi most likely did not sign the document personally, but he did authorise it as he was aware of the purpose of the valuation for “the lender” and the GEMI loan extension.

88. [279]

    On the same day, Mr Violi exchanged text messages with Mr Glenn:

89. [280]

    Between 16 and 17 December 2020, Mr Violi exchanged messages with Mr Glenn:

90. [281]

    At that time, Mr La Rocca was incarcerated. The message shows that Mr Violi knew:

    1. (1)

       details about Mr La Rocca’s court case and was trying to assist him with information;

    2. (2)

       Mr La Rocca was waiting on money for his legal expenses;

    3. (3)

       about valuations, which must have been of his properties, and that Mr David was involved.

91. [282]

    Again, it seems that Mr Violi was hoping that Mr Glenn and Suria Malaysia would come into some money soon or CDX would float and the loan would be repaid.

92. [283]

    On 18 December 2020, Mr Smith emailed Mr Violi at the Kidman email including:

93. [284]

    That email was forwarded to Mr Violi’s Gmail account about two hours later. It is unclear whether there were any Chinese buyers. However, it would appear inconsistent with Mr David and Mr Glenn informing Mr Violi that the Strathfield property would be purchased by a company associated with Mr Glenn, if he was asking about showing the property to other buyers. However, it may be the case that there was a plan to use the Strathfield property to pay out the GEMI loan or that the Chinese buyers would take over the GEMI loan with the existing security. Again, it is not possible on the evidence to know the meaning behind many communications.

94. [285]

    On 1 January 2021, Mr Violi still appeared to be hopeful that CDX would be successful. He exchanged messages with Mr Glenn:

GI 214 loan

1. [286]

   On 7 January 2021, default notices were issued in relation to the GEMI loan.

2. [287]

   On 11 January 2021, Mr Margi forwarded to Mr David a term sheet sent to him by Mr Epstein. It outlined a proposed loan of $2,529,974.81 from GI 214 to Suria Australia.

3. [288]

   Between 12 and 14 January 2021, Summer Lawyers, acting for GEMI and GI 214, loan documentation to Mr David. There were various requirements, including that Mr Violi obtain independent legal advice and that Summer Lawyers would carry out a “WebVOI assessment [of obligor’s] identification documents reviewed by the Australian Government’s Digital Verification Service”. Mr Epstein stated that those requirements were waived by GI 214 on the basis that Mr David said that there was too much verification needed, and it was “not market”. Further, Mr Epstein said that Summer Lawyers “had a reputation for being pretty difficult in terms of what they require.” Despite that, Summer Lawyers represented the GEMI lenders at the hearing.

4. [289]

   Mr Smith clarified that Mr Violi was to be removed as a personal guarantor, and FLV added as a guarantor. Mr Lutui remained as a guarantor.

5. [290]

   On 19 January 2021, Mr Violi sent Mr Glenn his identification documentation. Mr Violi stated that he did so because Mr Glenn had told him that it was necessary for the sale of Strathfield to the Malaysian company and that he asked Mr Glenn to provide the documents to Mr David. I do not accept this explanation. Mr David was acting as the vendor’s solicitor for the alleged sale and there would have been no reason for Mr Violi to provide identification documentation to Mr Glenn overseas. There is also no reason why Mr Violi could not have provided his documentation directly to Mr David, or asked whether Mr David still had that information on his file, considering the past dealings. Instead, Mr Violi knew the GEMI loan was in default.

6. [291]

   On 19 January 2021, the GI 214 loan documents were signed apparently by Mr Violi. He denied it was his signature, which does not appear to be his usual signature. At the time Mr La Rocca was incarcerated. Mr David claimed he had a video call with Mr Violi and explained the documentation to him and that he witnessed him signing the document. I do not accept that evidence for the reasons in this judgment. Mr David did not keep a file note of this alleged telephone call, which supposedly was when he provided his client important advice about a significant financial transaction. Further, Mr David must have understood the importance of being a witness. However, he had already shown himself to be less than honest with the way he had dealt with such issues previously.

7. [292]

   On 20 January 2021, GI 214 lodged caveats over the FLV properties. That same day Summer Lawyers wrote to Mr David indicating that the version of the executed documents was insufficient, including because Mr Violi’s signature had not been witnessed, or if it was witnessed by Mr David remotely that had not been confirmed or recorded on the documents. It would be expected that Mr David would have confirmed or recorded his witnessing if he had in fact done so and it was a requirement of Summer Lawyers. This also indicates that Mr David did not witness Mr Violi’s signature; if he considered it important enough to do, then he would have recorded it somewhere and he did not.

8. [293]

   On 21 January 2021, Mr David wrote to Mr Margi requesting a face-to-face meeting, because “I cannot provide detail issue by issue in respect of the various documents that we have concerns with”. Mr David gave no evidence about why he sought such a meeting and what was discussed in terms of the execution requirements.

9. [294]

   On 22 January 2021, the guarantor execution page was signed ostensibly by Mr Violi, but not with his usual signature. Mr David claimed in his affidavit that he had another video call with Mr Violi and witnessed his signature. However, in his affidavit he did not explain how Mr Violi received the documents and provided them back to Mr David. In cross-examination, Mr David indicated that “most likely I would have sent them to Mr Lutui for Mr Lutui to present them to Mr Violi for his signature … maybe sent by email”. It appears from the evidence that in 2021 it was Mr David’s practice to email only Mr Lutui with documents to be executed by him and Mr Violi. It was never explained by Mr David why he did not copy Mr Violi into those emails as well. There is no email train from Mr Lutui to Mr Violi to make good Mr David’s assumption.

10. [295]

    On 22 January 2021, Mr David completed a “KYC Information for individual” for Mr Violi as requested by Summer Lawyers. In that, Mr David certified he had carried out an identification of identity and saw “the original identification documents” during a “face to face meeting”. Mr David amended the final line item in hand in the certification; deleting “witnessed” and adding “known”:

11. [296]

    A signature of Mr Violi’s was on the document, which is not his usual signature.

12. [297]

    It makes no sense that Mr David crossed out “witnessed”, if he had in fact witnessed Mr Violi’s signature on a video call. This was not explained by Mr David. I do not accept that Mr David witnessed Mr Violi’s signature and I consider his evidence to the contrary was false.

13. [298]

    Mr David provided copies of Mr Violi’s identification documents to GI 214. Mr Violi claimed that the vehicle licence Mr David sent to GI 214 was a forgery, but it appeared similar to the one he provided to Mr Glenn on 19 January 2021.

14. [299]

    On 24 January 2021, Mr Glenn was chasing Mr Violi to send Mr David copies of his Medicare card and passport.

15. [300]

    On 25 January 2021, GI 214 entered into a loan with Suria Australia for an advance of $2,529,974.81 guaranteed by Mr Lutui and FLV. On the same day, Mr Violi sent Mr David a message enclosing copies of his Medicare card and passport and a copy of his heavy vehicle driver’s licence.

16. [301]

    The loan does not bear Mr Violi’s usual signature. Mr David’s evidence was that he witnessed Mr Violi signing the documents by audio visual link. In a letter dated 25 January 2021 to the GEMI lenders’ lawyers, Mr David represented that he had “witnessed Mr Violi’s signature and verified the necessary documents in support of that verification”. As before, however, there is a conspicuous absence of any file note recording the meeting, and I do not accept Mr David’s uncorroborated and unsubstantiated assertion that Mr Violi did execute the documents or that Mr David verified the identification documents, as he is not credible on such matters.

17. [302]

    On 27 January 2021, GI 214 advanced $2 million to Pacific Carbon via Mr David’s trust account and placed mortgages on FLV’s properties. The rest of the loan money was returned as prepaid interest and fees.

18. [303]

    In early 2021, Mr Violi sought and obtained a $2.5 million loan from the Commonwealth Bank of Australia to help him “fit out” the “Italian Fresh Mercato” supermarket at the Griffith shopping centre, by providing a personal guarantee. This also suggests that Mr Violi was aware that he could not use the properties as security because of the existence of the GEMI lenders’ mortgages on title. His threats to Mr Glenn and Mr David of offering mortgages over the properties for this purpose went nowhere.

Attempts to refinance the GEMI loans

1. [304]

   On 11 February 2021, Mr David emailed a finance broker, Mr Peter Di Prinzio, asking about refinancing the GEMI loan, against security of the FLV properties. Mr David recorded that the “current lender”, namely GEMI and GI 214 would consider assigning the debt without a complete refinance. At the time Mr David considered the payout figure was $27,092,000. Mr David was seeking a loan of about $32,000,000. It was several weeks before Mr Di Prinzio had an offer for Mr David, as discussed below.

2. [305]

   On 15 February 2021, Mr David sent Mr Violi a message, in answer to his query “get anything from Alex?” a few days earlier:

3. [306]

   Between 16-23 February 2021, Mr Violi sent Mr Glenn various messages:

4. [307]

   Mr Glenn’s responses included “no”, “not yet” and on one occasion:

5. [308]

   On 25 and 26 February 2021, Mr David and Mr Violi exchanged messages including:

Mr David seeking alternative loans - Shamoon loan

1. [309]

   Mr David’s evidence was that on about 17 or 18 March 2021, Mr Glenn told him that Suria Malaysia and Mr Violi wanted to borrow another $3.5 million for 70 days at 100% interest. Mr David claimed he confirmed those instructions with Mr Violi, but had no file note to corroborate that. I do not accept he sought Mr Violi’s instructions.

2. [310]

   In early March 2021, Mr David approached Mr Awraham about the possible loan, as he had lent money to Mrs La Rocca previously. Mr Awraham indicated he knew a colleague who could loan $2 million only, not $3.5 million that Mr David was initially seeking. Mr David claimed that he discussed this with Mr Glenn and Mr Violi. Again, he kept no file note and I do not accept he spoke with Mr Violi. This bears some similarity to Mr Glenn’s version of events, that the $3.5 million was sought to pay Barclays Bank a “fee” for the release of Suria Malaysia’s “sovereign funds”, but that $2 million would in fact be sufficient, because Mr Yassin had managed to negotiate Barclay’s fee down from $3.5 million.

3. [311]

   On 22 March 2021, Mr Awraham provided Mr Elias Shamoon’s contact details as the proposed lender.

4. [312]

   Mr Shamoon is a successful businessman, with annual turnover of between $12 to 25 million from his integrated property support business, run through Statewide Quality Services Pty Ltd.

5. [313]

   As mentioned above, Mr David and Mr Shamoon knew each other within the Assyrian community. Further, Ms David, Mr David’s sister, had acted as Mr Shamoon’s solicitor on various business transactions over several years, mainly involving employment issues. Apparently in about 2013, Mr David had acted for Mr Shamoon on a single matter.

6. [314]

   Mr Awraham had told Mr Shamoon that he could not loan millions of dollars, but he had lent $150,000 to Mrs La Rocca, a client of Mr David, and had later received $350,000 in return.

7. [315]

   On 24 March 2021, Mr David met Mr Shamoon to discuss the potential loan. Mr Shamoon took a few days to see if he could raise the money, and indicated to Mr David that he could only raise $2 million, with half of the loan coming from his business partner, Mr David Yako.

8. [316]

   Mr Shamoon’s version of what Mr David had told him in Assyrian was (emphasis added):

9. [317]

   Mr Shamoon’s evidence was that it was the first time he was lending money to someone and he trusted Mr David to protect his interests. However, he immediately signed a loan agreement with Mr Yako, in which Mr Shamoon promised Mr Yako a 5% return on his $1 million.

10. [318]

    On 24 March 2021, Mr David had “numerous” telephone calls with Mr Shamoon. A file note Mr David said he made on that day indicated that Mr Shamoon was chasing the “Mortgage doc’s” and also was to give Mr David the “details of the lender”.

11. [319]

    Later that day, Mr David emailed Mr Shamoon a draft unsigned loan agreement and borrower declaration. That draft of the documentation had Mr Shamoon as the lender personally. It had Mr Shamoon’s name spelled correctly as the lender and also in the execution block.

12. [320]

    A few days later, the men met again in Mr Shamoon’s carwash café. Mr David showed Mr Shamoon documentation he said was the loan signed by the borrower. Mr Shamoon’s son also gave evidence about being shown a loan agreement by Mr David that was signed by the borrower. I accept their evidence.

13. [321]

    I also accept that Mr David told Mr Shamoon:

14. [322]

    On 27 March 2021, Mr David sent Mr Shamoon a text message with the bank account details of Pacific Carbon for payment of the money, that he had received from Mr Lutui. Mr David did not claim to have received instructions from Mr Violi about those payment details, nor did he have any file note to that effect. It would appear very strange that if he was acting for FLV, Mr David would not have any such documented instructions, where the repayment terms of the loan were so onerous to his client.

15. [323]

    On 28 March 2021, Mr Shamoon had a telephone conversation with Ms David; he said he would not make a legal decision without consulting her. She sent Mr Shamoon a text message:

16. [324]

    Mr Shamoon told Ms David that he was doing his own research on the transaction, by speaking with his family. He also obviously had conversations with Mr Awraham.

17. [325]

    Ms David accepted that she did not know the terms of the proposed loan; she had not been told about any security being offered, nor did she know the identity of the borrower. Ms David also was not a transactional lawyer; she did not deal with loans. I do not therefore consider that Ms David’s message was advice on the loan that was in fact proposed, as drafted by Mr David.

18. [326]

    Even though Ms David ended her message indicating that she would wait for Mr Shamoon to give her a decision, she did not follow up. She was also aware that Mr David was communicating with Mr Shamoon.

19. [327]

    On about 29 March 2021, Mr Shamoon told Mr David he would proceed with the loan. This was after Mr David had showed him the loan agreement represented to have been signed by Mr Violi and explained the loan terms to him and indicated Mr Shamoon’s mortgages would be the only ones on the properties.

20. [328]

    I do not accept Mr David’s evidence that he did not talk about the quality of the security being offered. His own file note refers to Mr Shamoon’s knowledge of the Griffth shopping centre. Further, Recital (a) of the loan Mr David drafted refers to the purpose of the loan funds being for improving and developing the Griffith shopping centre, which would have brought that property squarely into the focus of any reader of the document.

21. [329]

    On that day, Mr Shamoon transferred $1,670,000 as directed. On 6 April 2021, Mr Shamoon transferred the balance of $330,000.

22. [330]

    Mr Shamoon accepted that in advancing the money without a fully signed loan agreement, there was some risk. However, his answers in cross-examination were convincing; he relied on Mr David, as his lawyer, including because he could not read English very well and always had a solicitor or an assistant help him with reading contracts. I accept his evidence:

23. [331]

    Further, Mr David’s conduct in relation to drafting the loan documentation and having it executed suggests he did not want a paper trail and did not want Mr Violi to know about it.

24. [332]

    Mr David did not finalise the documentation for either FLV or Mr Shamoon until the money was repayable. Not providing Mr Shamoon with documentation was apt to indicate to him that Mr David was keeping the documentation safe. However, if FLV was Mr David’s client, as he alleged, then it could have been expected that he would have attempted to negotiate better terms for his client, including a longer repayment date, with less interest and less security. One explanation for not finalising the documentation could be that Mr David considered that the loan money would be repaid, as Mr Glenn had promised, and documentation was unnecessary and therefore was not finalised. Such an explanation is consistent with the version Mr Shamoon signed in late 2022 being sloppily prepared. The execution block states “Executed by Maria La Rocca”. Mr David said he copied the agreement for Mr Awraham’s loan to Mrs La Rocca. Further, Mr Shamoon’s name was misspelled as "Shamoom" on the cover page. It is also consistent with Mr David’s later promise to register a caveat for Mr Shamoon and failing to do so, with the excuse that the money would be “paid soon”.

25. [333]

    If Mr David did want to “help” Mr Shamoon as he represented, then he might have finalised the loan documentation promptly. Instead, it appears that he decided to finalise documentation when it became apparent in 2022 that Suria Malaysia would not be providing funds to repay any loans, and there needed to be a paper trail for the transactions Mr David had brokered.

26. [334]

    I also consider Mr David generally a person who was prepared to stretch the truth and use documents he knew to be false, as explained above and below. It appears that Mr David was prepared to cut corners in relation to the execution of documents and certification of identification documents.

27. [335]

    I am not persuaded that Mr Violi was aware of the loan from Mr Shamoon, which Mr David claimed was signed by Mr Violi in David Legal’s office on 21 June 2021, discussed further below.

Attempts to extend GEMI and GI 214 loans

1. [336]

   Around the time of organising the Shamoon loan in March 2021, Mr David continued to be involved in attempts to refinance the GEMI loans.

2. [337]

   As noted above, Mr David had been in discussions with Mr Di Prinzio. Between 25 and 26 March 2021, Mr David and Mr Di Prinzio exchanged text messages:

3. [338]

   On 29 March 2021, Mr Violi exchanged messages with Mr David, in which Mr David was warning Mr Violi off speaking with anyone about a refinance, but demonstrating that Mr Violi was aware that Mr David was involved in refinancing:

4. [339]

   Mr Violi did not explain what he meant by not being sure if “we” still require a loan.

5. [340]

   In late March 2021, Mr Margi and Mr Epstein had a conversation in which Mr Margi told him:

6. [341]

   On 30 March 2021, Mr Epstein and Mr David and others had a telephone call to discuss a refinance for Mr Violi, which was recorded, and the transcript was in evidence. Mr Epstein referred to “putting a new third facility in”, and Mr David appeared to be putting pressure on Mr Epstein to finalise documentation quickly, saying, inter alia, “I’m going to sign this agreement with these guys, and I’m going to move away from you guys”.

7. [342]

   Mr Di Prinzio was joined to the call and stated:

8. [343]

   Mr Di Prinzio gave evidence, which was less than satisfactory. I accept he did not want to be involved in these proceedings, however, he did not at all times seem to appreciate his obligations as a witness to answer questions and tell the truth. He was offended that the phone call outlined above was recorded without his knowledge. He also was adamant that Mr Violi had told him he did not need any finance, even when that was inconsistent with the recorded call, in which Mr Violi asked about the “deal” and indicated that he understood other finance had already been obtained.

9. [344]

   At the end of the recording, only Mr Epstein was on the call with Mr Margi, and Mr Epstein stated somewhat prophetically:

10. [345]

    On 4 April 2021, Mr David sent Mr Violi a message without identifying “we”:

11. [346]

    On 13 April 2021, Mr Violi exchanged messages with Mr Glenn:

12. [347]

    Mr Violi sent a screenshot of that exchange to Mr David.

13. [348]

    Between 16-30 April 2021, Mr Violi and Mr David exchanged messages:

14. [349]

    On 12 May 2021, Mr David asked Mr Epstein for an additional month to pay the GI 214 loan. Mr Epstein responded by message:

15. [350]

    Mr David replied “Please Thank you”.

16. [351]

    On 13 May 2021 at 4.08pm, Mr David forwarded to Mr Glenn and Mr Lutui an email from the GEMI lenders’ lawyers a Deed of Forbearance with an email subject line “GI214 Pty Ltd advance to [Suria Australia]”.

17. [352]

    On 17 May 2021, Mr Lutui sent to Mr David only the execution pages of the documents, with a signature that does not appear to Mr Violi’s usual signature. That signature is dated 17 May 2021. Mr David claimed he had a video call with Mr Violi and witnessed him signing the documents. I do not accept that evidence, including because Mr David has no file note to that effect and for the other reasons explained above and below, indicating Mr Violi denying signing it.

18. [353]

    Mr Lutui’s signature on the document is dated 18 May 2021. On 19 May 2021, Mr David sent to the lenders’ lawyers a version of the documents with his signature as witness of Mr Lutui and Mr Violi’s signatures. Mr David claimed Mr Lutui signed the documents on 18 May 2021, when he brought the documents to Mr David’s office.

19. [354]

    Mr Violi sought to bolster his credit in this regard by relying on the fact that Mr Lutui appears to have emailed the unexecuted documents to the concierge of the Crown Melbourne which then emailed back to Mr Lutui a PDF of the executed documentation, which appears to be the version that Mr Lutui then forwarded to Mr David. Mr Violi also sought to tender what purported to be invoices from the Crown Melbourne made out to Mr Lutui, and other receipts for purchases apparently made by Mr Lutui around that time in Melbourne. Mr Violi made the submission that from the face of the emails it can be inferred that Mr Lutui was in Melbourne at a time when there was a COVID lockdown, and Mr Violi was in Griffith, and therefore he could not have signed the documents.

20. [355]

    Mr David objected to this evidence, and other documents which were not referred to by counsel or deployed in cross examination, either on the basis that the documents were not authentic, or they ought not be admitted by reason of their probative value being outweighed by the prejudice caused by them, because they could not cross-examine Mr Lutui. The objection to “authenticity” was despite an affidavit from Ms Robyn Smith, a paralegal in the employ of Mr Violi’s solicitor, to the effect that the documents were drawn from databases established by Mr Violi’s previous solicitors after the documents were seized from Mr Lutui. The parties provided written submissions and proceeded on the basis that I would deal with Mr David’s objections on the papers.

21. [356]

    I do not accept that the documents are inadmissible because their provenance or their chain of custody has not been established. That submission bears resemblance to the approach in National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309, which is no longer good law: see Gregg v R [2020] NSWCCA 245 at [362]-[372] (Bathurst CJ), [713]-[716] (Leeming JA). The question, in terms of the admissibility of the documents, is whether they are relevant, not whether they are authentic: Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448 (Air New Zealand Ltd) at [92] (Perram J). In determining the relevance of a document, the Court may examine it and draw any reasonable inference from it, including as to its authenticity: Evidence Act 1995 (NSW) s 58(1); Air New Zealand Ltd at [92]. If there is a reasonable inference that the receipt of the document will rationally affect the probability of a finding of fact, then it is for the Court to determine at the end of the trial whether the document is authentic and whether the fact is proved: Air New Zealand Ltd at [92]. Here, there is sufficient material from which a reasonable inference can be drawn that the documents are authentic. I also accept the documents are relevant, because the location of Mr Lutui and Mr Violi at the time documents were signed may rationally affect the probability of Mr Violi having signed or authorised a signature on the documents.

22. [357]

    However, the documents should be excluded under s 135 of the Evidence Act in relation to Mr David’s case, because their admission would be unfairly prejudicial to Mr David, as Mr Lutui is not within the jurisdiction to be questioned. And even if the documents were not excluded, I would consider they had very little weight, because the mere fact of an email or a telephone record does not demonstrate Mr Violi’s knowledge of the transaction documents, which is the primary issue in the proceedings. Even if Mr Lutui was in Melbourne and not with Mr Violi in Griffith, it does not mean that Mr Violi did not authorise a signature to be attached for him. As already noted, I consider that likely in all the circumstances, and having regard to all the evidence and Mr Violi’s credit generally.

23. [358]

    On 13 May 2021, the sum of $90,247.32 was paid to GEMI and GI 214 as a required interest payment. This was at Mr Glenn and Mr Lutui’s instructions to Mr David. Under the deed, the amount outstanding under the:

    1. (1)

       GI 214 loan was due on 15 June 2021; and

    2. (2)

       GEMI loan (as varied) was due on 18 June 2021.

24. [359]

    On 20 May 2021, Mr Violi sent Mr David FLV’s Financials for 2020.

25. [360]

    On 26 May 2021, Mr Violi asked Mr David “Did u find out if that document was authentic Fred?” The document in question was not identified in the evidence.

26. [361]

    On 31 May 2021, Mr La Rocca was released from prison. From that time, Mr Violi said he employed Mr La Rocca to assist with the management of the Griffith shopping centre, and he had access to an email account designated for the centre manager, and had a key to the office.

27. [362]

    On 2 June 2021, Mr David emailed Mr Lutui a term sheet to refinance the loans, asking for signatures “ASAP”. Mr David deposed that almost immediately, Mr Lutui returned the term sheet with signatures of Mr Lutui and Mr Violi. However, no copy was in evidence.

28. [363]

    On 3 June 2021, Mr Violi exchanged text messages with Mr Glenn:

29. [364]

    On 4 June 2021, Mr David recorded in a file note a conversation with Mr La Rocca in which he says he told Mr La Rocca that Mr Violi needed to sign Mr Shamoon’s loan agreement, and in relation to which Mr La Rocca said “I don’t know anything about this loan”.

30. [365]

    On 10 June 2021, Mr David sent Mr Epstein a message:

31. [366]

    On 13 June 2021, Mr Violi exchanged messages with Mr Glenn:

32. [367]

    On 18 June 2021, when the Deed of Forbearance had not been complied with and the loans were due, they exchanged further messages:

33. [368]

    On 21 June 2021, Mr Shamoon sent Mr David a message asking about repayment of his loan.

34. [369]

    Mr David claimed that on 21 June 2021, Mr Violi attended his office with Mr La Rocca at about 6.30pm and that he went through the loan documents with Mr Violi, who signed it and left to attend a dinner. Mr David relied upon a file note to that effect, which did not record any particular advice, only “went through the loan”. The signature on the loan document is not Mr Violi’s usual signature. Mr David brought forward no other witnesses who saw Mr Violi sign the document. Mr La Rocca was allegedly there, but he has fled the jurisdiction, and so he cannot corroborate Mr David’s evidence. Unlike with the other loans, Mr David does not suggest anyone from his office was present.

35. [370]

    I do not accept that Mr Violi signed the loan agreement or was aware of it for the following reasons.

36. [371]

    First, all the other loans in this litigation involved FLV as a guarantor, rather than a borrower. It is not obvious why Mr Violi would agree for FLV to be the borrower, particularly where all of Mr Shamoon’s money was paid to Pacific Carbon at Mr Glenn’s direction.

37. [372]

    Secondly, as noted above, as at March 2021 Mr Violi had already obtained a loan for the fit out of the Griffith shopping centre, which would obviate the need for a loan from Mr Shamoon for the purpose in the recital of improving the centre.

38. [373]

    Thirdly, at the time, Mr Violi understood that the GEMI loans were being refinanced, then it would make no sense that he would agree to a further small loan with such onerous terms as 100% interest repayable in 70 days. I do not accept Mr Glenn’s ridiculous evidence that a further “bank fee” of $2 million was required from Barclay’s bank for the release of the “sovereign funds”. There was no document to suggest such a fee had been sought in that amount at that time, nor that it was paid. There is no message or email that suggests Mr Violi was aware of that fee and he agreed to provide security for that amount.

39. [374]

    Finally, I have identified the peculiar features of the loan document above. Compared to every other loan agreement in this litigation, only Mr David was involved in the creation of the document. Mr David did not issue an invoice at the time to either Mr Violi or Mr Shamoon that would have provided a contemporaneous record of time spent on the matter. Unlike with the other loans, there were no brokers. Further, the lender, Mr Shamoon, does not accept Mr David’s versions of events, and I prefer his evidence over Mr David’s, because Mr David demonstrated that he is a person who is not truthful in serious ways.

40. [375]

    This conclusion means that Mr Shamoon’s primary case must fail; he is not entitled to enforce his loan and enforce an equitable mortgage. The consequence of that conclusion is that it is unnecessary to determine if Mr Shamoon had run a case that he was entitled to both enforce the loan and seek remedies against Mr and Ms David.

41. [376]

    On 24 June 2021, Mr David obtained an offer from CEG Direct Securities Pty Ltd to refinance the GEMI loans, which he forwarded by email to Mr Lutui. Mr Violi denied receiving this, and I accept that evidence. However, it does not mean that Mr Violi was not aware of what was happening with the proposed refinance. Mr David forwarded to Mr Epstein a copy of the term sheet executed by Mr Lutui and bearing a signature that was not Mr Violi’s usual signature.

42. [377]

    On 5 July 2021, Mr Galanos provided to Mr Epstein a draft valuation of Strathfield completed by Property Logic for Millbrook Funds Pty Ltd for “first mortgage security purposes”.

43. [378]

    On 7 July 2021, Mr David obtained an offer from Millbrook Funds for Suria Australia to borrow $19,000,000, with Mr Lutui providing a guarantee and security from FLV’s properties. He forwarded it to Mr Lutui to “have this offer executed and returned to me as soon as you can”. About 2 hours later, Mr Lutui emailed to Mr David a version bearing a signature that is not Mr Violi’s usual signature.

44. [379]

    On that same day, Mr Galanos sent Mr Epstein a final valuation of Strathfield of $27,000,000.

45. [380]

    On 8 July 2021, Mr Lutui sent Mr David an email with a loan application completed by himself and signed with a signature that is not Mr Violi’s usual signature.

46. [381]

    On 9 July 2021, Mr David instructed Mr Lutui to bring his passport and driver’s licence and indicated he would need to get independent legal advice about the Millbrook Funds loan.

47. [382]

    On 13 July 2021, Mr David sent an email to Mr Lutui with an attached statutory declaration in Mr Violi’s name to the effect that he had received independent legal advice about the Millbrook Funds loan and a mortgage over Strathfield. Mr David had already signed as a witness, even though the place for Mr Violi’s signature was blank. Mr David gave no explanation for why he would do such a thing, and it further demonstrates that he did not take his responsibility as a witness and as a legal practitioner at all seriously. Less than two hours later, Mr Lutui returned the document with a signature inserted that is not Mr Violi’s usual signature. Mr David did not suggest that he had any conversation with Mr Violi about this documentation.

48. [383]

    On 19 July 2021, Mr David sent Mr Lutui an email with a letter of offer from Integrated Securities for a loan of almost $33,000,000 to Suria Australia, with Mr Lutui and FLV giving guarantees. He asked him to have the document signed.

49. [384]

    On 2 August 2021, Mr La Rocca sent Mr Violi a text message asking for 2 years of tax returns and financial statements for FLV.

50. [385]

    Shortly thereafter, Ms Pantelis at Mr David’s firm sent Mr Violi an email to his personal Gmail, copying in Mr La Rocca, indicating:

51. [386]

    On the same day it appears a representative from Cornwalls approached Mr Jess’ office and sought financial information about the borrower, Suria Australia.

52. [387]

    On 3 August 2021, Mr Cacciola sent an email to Mr David attaching FLV’s financial information. Mr Violi’s evidence was that he was considering a loan for the purpose of buying a farming property for his son and he discussed this loan with Mr David and agreed for the financial information to be sent for that purpose. I do not accept that evidence; instead, I consider Mr Violi was discussing refinancing the GEMI and GI 214 loans.

53. [388]

    Mr David continued to finalise the Shamoon loan documentation. On 15 August 2021, Mr Shamoon collected a copy of the signed loan agreement from the Holy Apostolic Catholic Assyrian Church of the East’s archbishop’s office, where Mr David had left a copy. Mr Shamoon continued to agitate Mr David about the repayment. He raised concerns about the caveat not being registered, and Mr David told him there was no point because the money would be arriving soon. This is consistent with Mr David taking a very lax approach to the documentation, and not wanting Mr Violi to be aware of this additional loan taken out in FLV’s name before the loan was repaid.

54. [389]

    On 26 August 2021, Mr David sent Mr Shamoon a message:

55. [390]

    On 9 September 2021, Mr David sent Mr Shamoon a message:

56. [391]

    Between 22 and 29 September 2021, Mr Violi sent Mr Glenn messages:

57. [392]

    In October 2021, Mr David went to Griffith. Mr David took photos of Mr Violi with his passport.

58. [393]

    On 4 October 2021, Mr David sent Mr Glenn a “draft joint venture agreement” between FLV and Suria Australia, as noted above.

59. [394]

    On 19 October 2021, Mr David exchanged messages with Mr Violi:

60. [395]

    It may be that Mr Violi was not aware of the precise details of the loans or refinancing. However, I consider he was aware that FLV’s properties were being used to assist Suria Malaysia; he had received some funds from the loans and he had been promised that he would be repaid all his expenses and his properties would be safe. It appears that Mr Violi had accepted the assurances of Mr Glenn and Mr David.

61. [396]

    On 4 November 2021, Mr Jess sent an email to Mr Violi enclosing two caveats that had been lodged on FLV’s properties by IS200 Pty Ltd. Mr Violi forwarded that email to Mr David a few hours later. A minute after that, Mr Violi sent Mr David a copy of both caveats with the message “From Peter Jess!! What’s this about Fred??”

62. [397]

    Mr Jess’ evidence was that on a telephone call Mr Violi indicated that Mr David would have the caveats removed.

63. [398]

    That day, Mr Violi exchanged messages with Mr Glenn, which I consider to be important:

64. [399]

    These messages, which appear candid, as neither person expected others to see them, demonstrate inter alia:

    1. (1)

       Mr Violi was aware of a “transaction” or “transactions” being orchestrated by Mr Glenn.

    2. (2)

       Mr Glenn told Mr Violi that he did not have to “pay back anything”, which I consider could only refer to a loan that needed to be paid back.

    3. (3)

       Mr Glenn had promised that he or Suria Malaysia or Suria Australia was buying Strathfield at a premium and above market value, as Mr Violi had said. That is also consistent with Mr Pignataro’s evidence that Mr David had told him the property was sold and why he was asked to find a value of $50 million in the property. This is contrary to Mr David’s sworn evidence, which I do not accept.

    4. (4)

       By that time Mr Violi was aware that transactions had occurred without his permission and they would cost him up to $15 million. He was also of the view that Mr David had not disclosed matters to him. Mr Glenn accepted that they had not told Mr Violi everything, using a “confidentiality” requirement as the excuse.

65. [400]

    Mr Violi asked Mr Glenn to call Mr La Rocca and Mr David. It is not apparent what those conversations involved and whether they occurred.

66. [401]

    Mr Violi did not take any step to impugn or deal with the transactions he considered had been carried out without his authority.

Bridge Street Capital loan

1. [402]

   On 11 November 2021, Bridge Street Capital documents were signed. The guarantors listed were Credit Solutions Group, FLV, Mr Lutui and Mr Cacciola. Once more, Mr Violi’s signature on that document appears unusual.

2. [403]

   On 12 November 2021, Mr David emailed Mr La Rocca requesting that he obtain from Mr Violi documents in relation to the Griffith property because “the incoming lender requires them”.

3. [404]

   On 17 November 2021, Mr David flew to Griffith and met with Mr Violi and Mr La Rocca. Mr Violi denied that a new loan with Bridge Street Capital was discussed. Mr La Rocca took photos of Mr Violi with identification documents and sitting at his desk next to a Bridge Street Capital mortgage. Mr David “certified” that he took the photographs and verified Mr Violi’s identity. However, in cross-examination, Mr David accepted that he had not taken the photograph himself, despite the certification, and because he was there at the time he considered it appropriate to certify the way he did. I consider this another example of Mr David being prepared to twist, rather than to tell, the truth.

4. [405]

   Mr Violi claimed he was told the mortgage documents next to him were relevant to the registration of leases. I do not accept that evidence. The word “mortgage” can clearly be seen on the documentation. Further, as the chronology above demonstrates, by this time Mr Violi was well aware of encumbrances over FLV’s properties. I consider that at this time Mr Violi wanted the loans repaid and the mortgages discharged and was involved in trying to have that achieved.

5. [406]

   Consistently with that fact, on that day, Ms Apolloni sent council rates and land tax documentation to Mr David. There would have been no need for those documents for the purposes of leases.

6. [407]

   On 18 November 2021, Mr David emailed the signed loan documents to Summer Lawyers.

Mr Violi trying to pressure Mr Glenn and Mr David for loans to be paid out

1. [408]

   Mr Violi then appeared to be trying to put pressure on Mr David and Mr Glenn to resolve the loan issues through messages he sent them.

2. [409]

   On 25 November 2021, Mr Violi sent a message to Mr David:

3. [410]

   On 26 November 2021, Mr Violi and Mr Glenn exchanged messages:

4. [411]

   Mr Glenn repeated that he (or others) were buying the Strathfield property and “our deal is done, that’s 100%”, apparently in an attempt to calm Mr Violi.

5. [412]

   On 6 December 2021, Mr David sent Mr Violi a screenshot of a message from a financier, Armondo Shoostovian of Short-Term Funding Group, and his telephone number. The screenshot message appeared to be offering to involve Fred and others in a “deal”. Mr Violi’s response was “not doing it Fred!” However, Mr Violi did appear to receive a message from Mr Shoostovian explaining his business.

6. [413]

   On 8 December 2021, Mr Jess sent Mr Violi copies of the GEMI mortgages over the FLV properties. About 20 minutes later, Mr Violi forwarded the email to Mr David and stated:

7. [414]

   About 90 minutes later, Mr Jess sent a letter to GEMI on behalf of FLV, seeking copies of the documents said to support the mortgages. The letter stated: “My client advises that he has not agreed to any mortgages placed by your organization over the properties in Strathfield or [Griffith]”.

8. [415]

   Mr Epstein contacted Mr David and requested a Facetime call.

9. [416]

   On 9 December 2021, Mr David made a file note of a telephone call with Mr Violi, which recorded in part:

10. [417]

    Mr David sent Mr Violi an email including:

11. [418]

    Mr David commenced a facetime call with Mr Epstein. Mr Violi was joined to the call. The call was recorded, including:

12. [419]

    On 17 December 2021, Mr David and Mr Shamoon exchanged messages:

13. [420]

    Between 3 and 4 January 2022, Mr Shamoon and Mr David exchanged messages:

14. [421]

    On 7 January 2022, default notices were issued for the GEMI and GI 214 loans. Mr Violi’s evidence was that those notices were the first he knew of the loans and mortgages. I do not accept that evidence based on the findings above. It appears that shortly thereafter Mr Violi and Mr La Rocca fell out.

15. [422]

    On 10 January 2022, Mr Violi forwarded to Mr David a message he had received from Mr Jess including “Call me. You have been served with default notices for $34 million from GEMI. What the fuck is going on[?] Peter”.

14 Lenders’ loan

1. [423]

   In January 2022, Mr David conducted negotiations regarding a further borrowing on the security of the FLV properties with Mr Violi as guarantor.

2. [424]

   On 17 January 2022, Mr David recorded a file note of a telephone call with Mr Glenn in which Mr Glenn asked can “we push for $5.5m”, and Mr Glenn told Mr David that he had already spoken to Mr Violi.

3. [425]

   On 18 January 2022, Mr David recorded a file note of an alleged telephone call with Mr Violi ending at 11.30am including:

4. [426]

   At 12.01 pm, Mr Lutui sent to Mr David a version of the offer that had been executed, including a signature that was not Mr Violi’s usual signature. However, the email was sent to Mr David before Mr David recorded that he had spoken to Mr Glenn to receive approval from 1.28-1.43pm. Mr David did not record that he told Mr Glenn that Mr Lutui had already returned a signed version. I do not accept the accuracy of Mr David’s file note, nor do I accept that Mr David had received express instructions from Mr Violi in relation to the execution of the offer.

5. [427]

   On 24 January 2022, Mr David recorded in a file note an alleged telephone call with Mr Violi about a loan agreement and other documents, which he asked Mr Violi to sign and initial. He recorded part of their conversation:

6. [428]

   Oddly, Mr David then recorded: “I then spoke to Alan [Lutui] & A was scanning doc’s [sic] as soon as F was signing them so that he could put them together for me to witness & forward them to M.” There is no other evidence to suggest that Mr Lutui was with Mr Violi at this time. This also makes no sense, if Mr David had already received signed documents from Mr Lutui. I do not accept that the particular telephone call in the file note occurred as Mr David alleges. However, I do consider it likely that Mr Violi repeated his concerns about Suria Malaysia not obtaining the money necessary to discharge the loans.

7. [429]

   On 25 January 2022, Mr Violi sent a message to Mr David:

8. [430]

   On about 31 January 2022, a group of lenders, referred to in the proceedings as “the 14 Lenders” ostensibly entered into an agreement with FLV, with Mr Violi as guarantor, to loan to FLV the sum of $2.2 million. The loan was also secured by mortgages over FLV’s properties. The loan was repayable on 2 June 2022.

9. [431]

   On 2 February 2022, the 14 Lenders paid their net loan advance of $2 million to Pacific Carbon.

10. [432]

    In about February 2022, they registered mortgages on the title of each of the properties and became the third registered mortgagees behind GEMI and GI 214.

11. [433]

    Because of the common security with the other loans, the 14 Lenders’ claim for repayment was included in these proceedings in the following way:

    1. (1)

       Mr Violi denied that he signed any of the loans for FLV or as guarantor;

    2. (2)

       FLV commenced a cross-claim against the 14 Lenders, alleging that the 14 Lenders Loan was void and of no effect, and that the related mortgages had been fraudulently obtained and should be discharged; and

    3. (3)

       the 14 Lenders joined issue with this fraud allegation and cross-claimed against FLV and Mr Violi, alleging that Mr Violi had in fact signed the loan documents.

12. [434]

    As noted above, the cross-claims involving the 14 Lenders settled shortly before the hearing and therefore it is not necessary to determine whether Mr Violi was aware of this loan, whether he signed it and whether the mortgages are enforceable.

Mr David’s attempts to hold off lenders

1. [435]

   On 7 February 2022, Mr David sent Mr Shamoon a message saying: “They have signed everything. I need you to sign”.

2. [436]

   In February and March 2022, Mr Shamoon continued to demand repayment from Mr David.

3. [437]

   On 10 March 2022, Mr David exchanged text messages with Mr Epstein, in effect repeating assurances that were made by Mr Glenn:

4. [438]

   On 12 March 2022, Mr David sent Mr Epstein the following message, attaching a screenshot of a message from Mr Glenn:

5. [439]

   On 15-16 March 2022, Mr Shamoon exchanged messages with Mr David:

6. [440]

   On 29 March 2022, Mr David sent Mr Shamoon a message:

7. [441]

   I also accept Mr Shamoon’s evidence that at around this time, Mr David showed him documents, particularly the letter from UOB Kay Hian to the Singaporean Suria entity and a letter from Barclays to Suria Global in relation to a SWIFT “pre-advise” notification, to supposedly demonstrate that money was coming from the UK. I accept Mr David said words to him to the following effect:

8. [442]

   On 10 May 2022, Mr David sent Mr Shamoon a screen shot of a Barclays bank account, and stated:

9. [443]

   The fact that Mr David included his assurance in this message that “these people” will “compensate you for all your losses and more” is consistent with Mr Shamoon’s version of the conversations the men had before Mr Shamoon agreed to the loan on the terms proposed by Mr David; he had Mr David’s assurance of the security for the loan.

10. [444]

    I also accept that Mr David told Mr Shamoon:

11. [445]

    In June 2022, receivers were appointed in relation to the Strathfield property. Anton Piller orders were executed over Mr Violi’s home.

12. [446]

    In July 2022, Mr Shamoon sought a meeting with Mr David. He never received a timely answer to that request.

13. [447]

    On 10 August 2022, Mr David sent Mr Shamoon a message:

14. [448]

    On 15 August 2022, Mr Shamoon collected the loan agreement and mortgage documents, which bear a signature not like Mr Violi’s usual signature. Mr Shamoon asked Mr David why there were no dates “on the papers”.

15. [449]

    However, on 16 August 2022, Mr David met Mr Shamoon at his car wash and witnessed him sign the loan agreement. Mr David told Mr Shamoon he would “see what he could do” about registering caveats.

16. [450]

    In August 2022, Mr David and Mr Shamoon had a “without prejudice mediation” with the Assyrian Church’s archbishop.

17. [451]

    On 18 August 2022, Mr Shamoon sent Mr David a message asking whether the “documents” had been “registered”. Mr David did not respond.

18. [452]

    In September 2022, voluntary administrators were appointed to Suria Australia. As noted above, at some time in 2022, Mr Yassin decided to “pull [Suria Malaysia’s] money” back from Hong Kong. In cross-examination, Mr Glenn gave further unsubstantiated and incredible evidence that the money was “retracted from Hong Kong [after] many promises from the monetary authority” that it would be released, as Suria Malaysia had the “right to send the cancellation of that transfer”. That was apparently so, notwithstanding Mr Glenn’s unsubstantiated assertion in the witness box that, cancellation aside, the funds are “sitting in Malaysia” and that that was a “huge victory because it means the next stage is funds get released” and they would be released in the next 30 days.

19. [453]

    After a further request from Mr Shamoon, on 21 October 2022, Mr David told Mr Shamoon that the “document” had been sent for registration. That was false. Neither Mr David nor his firm lodged any caveats. I consider it likely that Mr David did not want Mr Violi to become aware of the Shamoon loan, because he expected it to be repaid quickly before Mr Violi ever became aware of it.

20. [454]

    The front of the caveat identified Mr David as the lodger with the reference “FD/SHAMOON”. Mr David did not explain why he included such details if FLV was his client, and not Mr Shamoon. This is certainly consistent with Mr David considering that it was Mr Shamoon, not Mr Violi, who was actually his client.

21. [455]

    On 6 November 2022, Mr David sent Mr Shamoon a message:

22. [456]

    On 16 December 2022, Mr Shamoon’s lawyers sent Mr Violi a letter of demand.

23. [457]

    On 7 March 2023, Mr David told Mr Shamoon that if he did not take further legal action then he would receive $100,000 per month every month “for the next couple of months, and thereafter the remaining money owed to you will be paid”. On 8 March 2023, $100,000 was deposited into Statewide’s bank account from the account of Mr La Rocca. Mr Shamoon did not know who Mr La Rocca was. Mr David did not explain how Mr La Rocca came to pay that money. Mr Shamoon did not receive any other money.

24. [458]

    In June 2024, the receivers sold the Strathfield property, with net proceeds of about $10 million being held pending the outcome of this litigation.

Concerns about Mr David’s conduct

1. [459]

   As outlined in this judgment, I have serious concerns about Mr David’s conduct in relation to the following:

   1. (1)

      He knowingly sent a false version of his trust account ledger to barristers to encourage them to retain a brief, by making a false representation that he had money in trust.

   2. (2)

      He knowingly sent another client’s trust account ledger containing confidential information to Mr La Rocca.

   3. (3)

      He knowingly made false representations when certifying that he had taken photographs for the purposes of identifying Mr Violi.

   4. (4)

      He knowingly made false representations that he had seen original identification documents, when he had not.

   5. (5)

      He knowingly signed a statutory declaration as a “witness” to Mr Violi’s signature, when the document had not been signed by anyone.

Shamoon case

1. [460]

   As I have found that Mr Violi did not know of or sign the Shamoon loan agreement, Mr Shamoon’s primary case based on enforcing the agreement against FLV fails. Therefore, it is necessary to determine Mr Shamoon’s alternative case against Pacific Carbon and Mr and Ms David.

2. [461]

   I accept that Mr Shamoon is entitled to judgment against Pacific Carbon, for money had and received in the amount of $1,900,000, which was paid under Mr Shamoon’s mistaken belief that the money was the subject of a loan agreement secured by FLV’s properties: see Australian Financial Services Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at 568 (French CJ).

3. [462]

   Pacific Carbon, and its director, Mr Lutui have not appeared and defended the matter. All defendants had been served and had filed commercial list responses. While Mr La Rocca, Suria Australia, Mr Lutui and Pacific Carbon did not appear at the hearing, I considered there was no unfairness in proceeding with the hearing against them in their absence: see eg Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333 at [8]-[26]; Satz v ACN 069 808 957 Pty Ltd [2010] NSWSC 365 at [68] (Barrett J). I note Mr Lutui was required for public examination by the liquidators of Suria Global, and after an attempt to delay the examination failed, and a warrant for his arrest was issued, Mr Lutui left Australia for the United States of America: David v Livingstone (Liquidator); Re Suria Global (L) Pty Ltd (recs and mgrs apptd) (in liq) [2023] FCA 1663 at [7], [18] (Perram J).

4. [463]

   Mr Shamoon claimed damages from Mr David and Ms David for:

   1. (1)

      Breach of an express or inferred/implied retainer or for negligence in:

   2. (2)

      Misleading or deceptive conduct under s 18 of the “Australian Consumer Law” by:

5. [464]

   I accept that Mr David had an express retainer with Mr Shamoon and represented him as his lawyer in relation to the loan transaction. I accept Mr Shamoon’s version of the conversation on 24 March 2021, during which Mr David indicated that he would protect Mr Shamoon’s interests, including by ensuring that the loan was secured against FLV’s properties as the only mortgage. That evidence is consistent with the circumstances in which Mr David approached Mr Shamoon, including where Mr Shamoon knew Mr David and Ms David from the Assyrian community and the church and clearly trusted them by reason of his previous dealings, in which they acted for him as his lawyers. English was not Mr Shamoon’s first language and he struggled to read English and relied on lawyers and others to read documents to him. Mr Shamoon would have also drawn comfort from the transaction with Mr Awraham, in which Mr David acted for Mr Awraham and prepared the relevant documentation for the loan agreement on his behalf and ensured eventual recovery of the full loan amount, interest and “damages”.

6. [465]

   The existence of a retainer is also strongly supported by Mr David’s preparation of the loan documentation and his subsequent communications with Mr Shamoon. It is also consistent with there not being one file note of any alleged conversation with Mr Violi about the loan, but several with Mr Shamoon. Similarly there are many text messages and emails between Mr David and Mr Shamoon and none with Mr Violi.

7. [466]

   Even if there was no express retainer, I accept the existence of an implied retainer. The proper inference to be drawn from the background to, and circumstances of, the transaction as found is that Mr David tacitly agreed to act for Mr Shamoon in relation to the transaction: Polon v Dorian [2014] NSWSC 571 at [681] (Hall J) (Polon v Dorian).

8. [467]

   And even if Mr David made clear that he was acting for the borrower, the fact that he accepted responsibility to prepare the relevant documents for Mr Shamoon strongly suggests the existence of an implied retainer: see eg Pegrum v Fatharly (1996) 14 WAR 92.

9. [468]

   The only term of the retainer pleaded by Mr Shamoon was an implied term that Mr David would “prepare the Transaction Documents [ie the loan agreement and the mortgages] and advise [Mr] Shamoon on the loan transaction with reasonable care.” That implied term was breached in a number of ways.

10. [469]

    First, as noted above, I do not accept that Mr Violi was aware of or authorised the Shamoon loan. I accept that Mr David showed Mr Shamoon a signed document when recommending the transaction. Mr David’s recommendation of the loan in those circumstances was an unmistakable breach of his duty to Mr Shamoon, as was his facilitation of the payment to Pacific Carbon, in circumstances where that entity was not a party to the loan agreement.

11. [470]

    Secondly, and relatedly, Mr David did not provide any advice to Mr Shamoon in relation to the intended purpose of the loan. Mr David accepted in cross-examination that the loan was for Suria Global, but he did not know its purpose. Seen in that light, Mr David’s representations to Mr Shamoon that the loan was required in relation to the Griffith shopping centre, and his drafting of the recital to that effect in the loan document, were plainly incorrect and constituted a breach of Mr David’s retainer.

12. [471]

    Thirdly, Mr David did not inform Mr Shamoon of the existence of the GEMI lenders’ mortgages or the fact that Mr Shamoon could not register a mortgage on title without their permission. He did not advise of the risk that the equity in the FLV properties would not be sufficient to secure Mr Shamoon’s loan. Even if Mr David was not aware that the equity in the properties was actually insufficient, having known of the existence of the GEMI lenders’ mortgages and the fact that they had not been repaid on their terms and that very high default interest was accruing on a compound basis, he ought to have made enquiries and provided advice to Mr Shamoon as to whether it was possible for repayment of the loan to be adequately secured. This was also inconsistent with Mr David’s statement that Mr Shamoon would be the only mortgagee.

13. [472]

    Fourthly, and in any event, Mr David did not take any steps to register Mr Shamoon’s interest on title. Mr David’s representation to Mr Shamoon that he had registered “a document” was false. In fact, caveats over FLV’s properties were only registered in December 2022, after Mr Shamoon consulted new lawyers.

14. [473]

    Although the claim was also brought against Ms David, who had historically acted for Mr Shamoon, I accept Mr Shamoon’s evidence that she did not act for him in the transaction, as it was Mr David who recommended the transaction, prepared the documents and took Mr Shamoon through them and generally communicated with him. In those circumstances the claim can be resolved by reference to the allegations against Mr David.

15. [474]

    A preliminary issue is that Mr Shamoon’s pleadings, and his senior counsel’s submissions, were ambiguous as to whether the claim for misleading or deceptive conduct was brought under s 18 of the ACL as sch 2 to the CCA, or by reference to s 18 of the ACL as applied by s 32(1) of the Fair Trading Act 1987 (NSW) (FTA). Mr and Ms David proceeded on the assumption that the claim against them is brought under the CCA, as they have relied on s 137B of that Act in their Amended Commercial List Response. But that regime only applies to contraventions of the ACL by corporations, or by persons in other circumstances not relevant or applicable to this case: see s 131(1) CCA; Zervas v Burkitt (No 2) [2019] NSWCA 236 at [57] (Bell P, Macfarlan and McCallum JJA agreeing). Rather, it is the ACL as given effect to by s 28(1) FTA that applies to the claims against Mr David and Ms David as persons carrying on business within this jurisdiction: see also s 32 FTA. However, in view of the ambiguity of Mr Shamoon’s pleadings, and the fact that the David parties have taken no issue as to the inapplicability of the Commonwealth regime (and indeed have relied on it in defence of the claim), I consider there is no denial of procedural fairness, and it appropriate to deal with the claim on the basis of the State regime.

16. [475]

    Mr Shamoon’s pleaded case is that Mr David made representations as to the identity of the borrower, the validity of the execution of the loan agreement, and that the loan was “guaranteed” and secured against the Griffith and Strathfield properties as the sole form of mortgage security, all of which were not true. Mr Shamoon says that if he had been aware of the inaccuracy of those representations, he would not have agreed to make any advance and would not have made the payment to Pacific Carbon. Mr Shamoon says that those representations constitute conduct which was misleading or deceptive or likely to mislead or deceive under s 18 ACL.

17. [476]

    I agree. I accept that, during their discussions in March 2021, Mr David represented to Mr Shamoon that FLV had executed the documents and agreed to be bound by its terms, and that the loan would be guaranteed and would be secured against the properties as the only mortgage. As noted above, I accept that Mr David told Mr Shamoon: “These two properties will only have the mortgage security for your loan registered on them.” Those representations constitute conduct in the course of trade or commerce: see McLennan v Clapham [2019] ACTSC 1 at [139] (McWilliam AsJ, as her Honour then was); Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205 at [328]-[351] (Campbell JA, Hodgson and McColl JJA agreeing). They also were false. They were likely to, and did, lead Mr Shamoon into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [39] (French CJ, Crennan, Bell and Keane JJ). As noted above, I accept that Mr Shamoon relied on Mr David as his lawyer and trusted him as a member of the Assyrian community, including because of his previous relationship with Mr David and his difficulties with English. I consider it is inherently unlikely that Mr Shamoon would have entered into the transaction without legal advice and without the assistance of a lawyer in preparing the relevant documents. Mr Shamoon’s evidence was that he always had a lawyer assist him with contracts, or at least have an assistant read contracts to him.

18. [477]

    I accept that Mr Shamoon's decision to lend money was, in part, influenced or motivated by his desire to achieve a similar return as that previously achieved by Mr Awraham. But that does not exculpate Mr David of liability to Mr Shamoon. It is “sufficient that the [deceptive] conduct be a cause” of Mr Shamoon’s loss, in the sense that it “materially contributed to the relevant loss”, rather than being the sole cause thereof: Skinner v Redmond Family Holdings Pty Ltd [2017] NSWCA 329 at [138] (Gleeson JA, Macfarlan JA and Barrett AJA agreeing), citing I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at 119-20 (Gleeson CJ); Re HIH Insurance Ltd (in liq) [2016] NSWSC 482 at [37] (Brereton J). I am satisfied that, but for Mr David’s representations, Mr Shamoon would not have provided the loan.

Shamoon remedy and David defences

1. [478]

   Having found that Mr David is prima facie liable, the pleaded defences must be considered before determining the appropriate remedy, to which Mr Shamoon is entitled.

2. [479]

   In his Amended Summons, Mr Shamoon sought damages for breach of the retainer, or alternatively damages for negligence, and further or alternatively damages for misleading or deceptive conduct. The measure of damages sought was described in the opening submissions provided by Mr Shamoon’s counsel as “damages equivalent to the loan principal, plus consequential losses, including any inability to recover from FLV or Pacific Carbon”. The opening submissions also indicated that relief was sought for breach of fiduciary duty; but that claim was not pleaded, and it is not appropriate to determine it.

3. [480]

   The contractual term which Mr David breached was a duty to exercise reasonable care and skill in preparing the loan documents and advising Mr Shamoon in relation to the transaction. Breach of that term entitles Mr Shamoon to damages that will, as far as practicable, place him in the same position as if that term had been performed: Robinson v Harman (1848) 1 Ex 850; 154 ER 363 at 365. The measure of damages depends on whether, had Mr David performed his contractual obligations, Mr Shamoon would have still advanced the money. I accept that, had Mr David not breached his retainer, Mr Shamoon would not have advanced the money. As at March 2021, FLV’s properties were subject to the GEMI lenders’ registered mortgages, and there was a real question as to whether the residual equity in those properties (if any) would be sufficient to secure Mr Shamoon’s loan. The issue of security was at the heart of the viability of the transaction for Mr Shamoon, such that Mr David’s advice and breach of duty was critical to Mr Shamoon’s decision to advance the money, particularly so when Ms David had advised that the loan, without reference to any security, was very risky. So understood, this is not a case where a lawyer has provided negligent advice in relation to one aspect of an otherwise risky transaction, such that it would be inappropriate to make the lawyer the “underwriter of the financial fortunes of the whole transaction”: Hughes-Holland v BPE Solicitors [2018] AC 599 at [41] (Lord Sumption JSC). The appropriate measure of damages is the outstanding amount of the loan principal that Mr Shamoon would otherwise have lost by reason of Mr David’s breach, namely, $1,900,000. The same measure of damages applies to Mr Shamoon’s ACL claim: cf Wyzenbeek v Australasian Marine Imports Pty Ltd (in liq) (2019) 272 FCR 373 at [108] (Rares, Burley and Anastassiou JJ).

4. [481]

   I do not consider it appropriate to make any allowance for any unpleaded and unidentified “consequential losses”.

5. [482]

   It was not in issue that, at the relevant time, Mr David was a member of the Law Society of New South Wales Professional Standards Scheme (the Scheme), approved under the Professional Standards Act 1994 (NSW) (PSA), under which Mr David’s liability is said to be limited to $1.5 million, inclusive of Mr Shamoon’s costs.

6. [483]

   The Scheme limits the civil liability (arising in tort, contract or otherwise) of a participating member for damages arising from a single cause of action founded on an act or omission in relation to the provision of legal services to the extent that those damages exceed a monetary ceiling specified in clause 4.4: see clause 4.1 of the Scheme; s 28 PSA. By dint of s 5(1) PSA, the Scheme does not operate to limit liability for damages arising from “a breach of trust” or “fraud or dishonesty”. If a member of the scheme is able to satisfy the Court that they have the benefit of an insurance policy insuring them against the liability to which the cause of action relates, and the amount payable under that policy is not less than the amount of the monetary ceiling, then the member is “not liable for damages in relation to that cause of action above the amount of that monetary ceiling”: clause 4.2. Damages are defined in s 4(1) to include costs and interests on damages or costs.

7. [484]

   No issue was raised as to the applicability of the Scheme to the claim against Mr David and Ms David. In those circumstances, I proceed on the basis that it applies and Mr David’s liability is limited to $1,500,000 including costs and interest.

8. [485]

   Mr David also pleaded that Mr Shamoon was contributorily liable for any loss he suffered and was wholly or partly responsible for that loss through a failure to take reasonable care. It was pleaded that any damages payable ought to be reduced to nil or to what is just and equitable, pursuant to either Part 1A, Division 8 of the Civil Liability Act 2002 (NSW) (CLA) or s 137B CCA. As I have explained, the CCA regime is inapplicable to the claim against Mr David.

9. [486]

   Part 1A of the CLA applies to the claim against Mr David for breach of retainer: see s 5A CLA. There is a question, which is unnecessary for me to resolve here, whether it applies to a claim under s 18 ACL as given effect to by s 28(1) FTA: see eg Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liquidation) [2011] NSWCA 367 at [87] (Macfarlan JA).

10. [487]

    The argument that Mr Shamoon failed to take reasonable care by advancing the loan money was premised on the “obviously risky” nature of the transaction, Mr David’s version of events that there was no signed agreement or arrangement for security in place at the time Mr Shamoon paid the advance, and Ms David’s advice to Mr Shamoon. Counsel for Mr David submitted that Mr Shamoon’s damages should be reduced “substantially, and at least in the range of 25 to 50%.”

11. [488]

    But as I have explained, I accept that Mr David showed Mr Shamoon an executed copy of the loan agreement and explained it to him. I have also found that Mr David made representations to Mr Shamoon as to the viability of the transaction, which influenced his entry into the transaction, and which tell strongly against a finding of contributory negligence in this case: see Polon v Dorian at [883]ff (Hall J). I am not persuaded that the advance of the loan money by Mr Shamoon, in the circumstances I have found, constituted a failure to take reasonable care. Rather, this is a case where it was reasonable for Mr Shamoon to rely on Mr David to perform his duty: Astley v Austrust Ltd (1999) 197 CLR 1 at [30] (Gleeson CJ, McHugh, Gummow and Hayne JJ).

12. [489]

    Therefore, it is not appropriate to reduce Mr Shamoon’s compensation entitlement at all.

How the case was run

1. [490]

   On 23 August 2024, the matter was set down for hearing with an estimate of 30 days commencing on 7 July 2025. The usual order for hearing was made. On 2 July 2025, Hammerschlag CJ in Eq vacated the hearing dates because the parties had not provided a court book in compliance with the usual order for hearing.

2. [491]

   The parties were granted liberty to apply to have the hearing dates reinstated, once the default in the preparation of the court books had been purged. On the morning of 4 July 2025, the parties sought that the matter be listed before Hammerschlag CJ in Eq and offered to provide court books to his Honour’s chambers by 4pm that day. His Honour refused to list the matter, because the breach had not been purged; no court books had in fact been provided to the Court and the parties’ lengthy written submissions were not annotated to the court books.

3. [492]

   On Monday 7 July 2025, after close of business, the GEMI lenders’ solicitors wrote to the Court indicating that compliant court books would be provided to the Court by 10am on 8 July 2025. By that time the hearing dates that had been otherwise allocated and were no longer available to the parties. His Honour listed the matter for directions on 11 July 2025.

4. [493]

   On that day, counsel for the parties appeared in the Commercial List seeking new hearing dates. The estimate of time had reduced from 30 hearing days to 12 hearing days. On the assurance of counsel that the previous breach of Court orders concerning the Court books had been rectified, new hearing dates were allocated. However, in fact there remained non-compliance with the orders for Court books, as still none had been delivered to the Court.

5. [494]

   When the Court book was finally provided to the Court on 15 July 2025 without apology for the delay, it comprised 17 large volumes of material. In addition to that, 13 exhibits were tendered. However, as so often is the case, only about 10-20% of the material was actually referred to in submissions or cross-examination. Further, not all documents were in chronological order, and there was duplication of documents. It should not be necessary to stress that it is incumbent upon parties to comply with Court orders and to assist the Court to facilitate the just, quick and cheap resolution of the real issues in the proceedings: see s 56(1)-(4) Civil Procedure Act 2005 (NSW). That obligation also extends to the legal practitioners representing the parties: see s 56(4)(a). The wholesale provision of documents in a court book upon which the parties do not actually rely not only contradicts the requirements of Practice Note SC Eq 3, but is also inimical to the duty imposed on the parties by s 56 CPA: see eg Adelaide Concrete Cutting & Drilling Pty Ltd v Marino (No 2) [2024] NSWSC 499 at [783]-[788] (Meek J).

Conclusion

1. [495]

   For the reasons above I have found the following.

2. [496]

   First, GEMI has succeeded in demonstrating that Mr Violi knew of and authorised the GEMI loan and its extensions. It is therefore not necessary to consider and determine any of GEMI’s alternative arguments. GEMI is therefore entitled to enforce its mortgages, which secured the loaned money.

3. [497]

   Similarly, GI 214 has succeeded in demonstrating that Mr Violi knew of and authorised its loan, and the Violi parties do not challenge the interest rate charged.

4. [498]

   Secondly, Mr Violi did not sign and did not authorise the Shamoon loan. Therefore, Mr Shamoon cannot enforce that loan. However, Mr David breached his retainer with Mr Shamoon and Mr Shamoon is entitled to damages of $1,500,000, in view of the operation of the Scheme limitation of liability. In the alternative, Mr David engaged in misleading or deceptive conduct, in relation to which Mr Shamoon is entitled to compensation in the same sum.

5. [499]

   Thirdly, I do not accept it is appropriate to reduce Mr Shamoon’s compensation entitlement by reason of any failure to take reasonable care.

6. [500]

   Mr Shamoon is also, at his election, entitled to an order for money had and received from Pacific Carbon for $1,900,000.

Appropriate orders

1. [501]

   For the reasons above, I direct that:

   1. (1)

      On or before 4pm on 4 September 2025, the plaintiffs in each proceeding serve on the defendants in each proceeding short minutes of order intended to give effect to these reasons for judgment together with the orders they propose in relation to costs and any necessary explanation;

   2. (2)

      On or before 4pm on 11 September 2025, the defendants in each proceeding: