Provident Capital Ltd v Naumovski

On 18 July 2007, Provident Capital Limited ("Provident") entered into a loan transaction with accompanying mortgage security, with Dimitar Naumovski and Milica Naumovska ("the Naumovskis"). On that day, an amount of $420,000 was advanced by Provident to the Naumovskis.

The monies were used to repay existing loans, which were secured by mortgages over the home of Mr and Mrs Naumovski, which was situated in the Newcastle suburb of Wallsend.

The Provident loan has not been repaid and has fallen into default. Provident has commenced proceedings seeking to enforce its rights under the mortgage. The Naumovskis resist Provident's claim on a number of bases, and have cross-claimed for relief principally under the Contracts Review Act 1980

Ultimately, five separate parties came to be actively involved in the proceedings. The legal costs of these unduly complicated proceedings, which lasted for 19 hearing days, must now well exceed the total monies in issue.

This case is not easy of resolution. Evidence was in conflict. There were allegations of fraud, and misleading and deceptive conduct. Suggestions were made to witnesses, and findings were urged on the Court, that witnesses were lying and being deliberately untruthful in their evidence. Suggestions were made that evidence was not being adequately translated from the English language into the Macedonian language. Witnesses were being asked to recall events which had happened many years before, often in the case when there was no, or else at best incomplete, contemporaneous records. Expert evidence was given about the reasonable practice of solicitors in NSW. The experts could not agree with each other.

These issues all need to be considered, and where necessary, resolved.

Because of these complexities, this judgment has taken an unduly long time to produce. It cannot deal with every minor conflict in the evidence, and resolve it. Each one has been considered. But ultimately, it is the issues in the proceedings which need determination.

The dispute between Provident and the Naumovskis comprises in essence two separate streams, although the facts are largely common.

The first stream is based upon the general (and non-statutory) law. Provident pleads the existence of a loan contract and mortgage, and claims an entitlement to possession of the Wallsend property: Further Amended Statement of Claim (filed 15 February 2011) - paragraphs 1-12.

The Naumovskis respond by a plea of non est factum in respect of these documents: Defence filed 6 November 2008 - paragraphs 4-9.

In response to that defence, Provident pleads a claim for restitution of the loan principal on the basis that the monies were paid under a mistake, essentially that the Deed of Loan and Mortgage were binding documents, and, the Naumovskis would be unjustly enriched by retaining the benefit of the monies which were advanced: Sixth Cross-Claim filed 2 July 2010 - paragraphs 1-7.

In their defence, the Naumovskis deny receipt of, or retention of, any benefit from the discharge of the prior mortgages, and deny any unjust enrichment: Defence to Sixth Cross-Claim filed 30 July 2010 - paragraph 3.

The second stream of claims is the dispute between Provident and the Naumovskis relating to a statute, namely the Contracts Review Act and to the general law relating to unconscionability.

In this stream, Provident pleads, and relies upon, the existence of the loan contract and mortgage: Further Amended Statement of Claim - paragraphs 1-10.

The Naumovskis resist the claim by pleading a claim for relief under the Contracts Review Act, including pleading that they did not receive any benefit from the loan: Amended First Cross-Claim filed 9 March 2010 - paragraphs 2-10, see in particular paragraph 8(d).

In response, Provident pleads that the Naumovskis received a benefit from the monies comprising the refinancing of prior mortgages: Defence to Amended First Cross-Claim filed 2 July 2010 - paragraphs 1-9, see in particular paragraph 8.

In reply, the Naumovskis deny receiving a benefit from the discharge of the previous mortgages, and claim that the earlier loans and mortgages relied upon by Provident as constituting a benefit, were unjust within the meaning of the Contracts Review Act, and were unconscionable within the meaning of the general law: reply dated 4 April 2011 - paragraphs 1-2.

The pleadings filed on behalf of the Naumovskis did not suggest that their individual positions were different from each other. They were represented at the hearing by the same solicitors and counsel. Written and oral submissions by their counsel did not seek to differentiate their positions from one another. Nor was it ever submitted that any orders ought be made which differed between their positions. Accordingly, in this judgment, I have not considered their cases in any other way.

The fourth to sixth defendants were the partners of a firm of solicitors called Attwaters. Mr Kevin Anthony, who is the third defendant, was employed as a solicitor by the firm of Attwaters. Mr Anthony acted for the Naumovskis in 2006, and again in 2007, when the Provident transaction was entered into and completed.

Provident claims in its Statement of Claim, against Attwaters (by which term I include the partners of the firm and Mr Anthony, as there was no dispute that the firm was liable for his conduct) that:

Attwaters deny any misleading or deceptive conduct and deny that they were negligent. Mr Anthony says that he did, in the circumstances, all that was required of a reasonably prudent solicitor.

Attwaters also put in issue whether they did, or could, owe any duty of care to Provident, in circumstances where they were acting for the Naumovskis who were on the "opposite side" of the transaction to Provident.

Provident's claim against Attwaters was expressed to be in the alternative to its claim against the Naumovskis.

The Naumovskis filed a number of cross-claims. The First Cross-Claim is against Provident, which I have already described.

The Second Cross-Claim (filed 13 December 2010) was a claim by the Naumovskis against Attwaters. The Naumovskis claim that at no time did they retain Attwaters to act for them. They claim that the conduct of Attwaters in 2006 and 2007 in dealing with two separate mortgages and loan transactions was negligent and in breach of a duty of care owed to them. As well, the Naumovskis claim that the conduct of Attwaters, which was said to have been negligent, was in breach of s 42 of the Fair Trading Act.

Attwaters plead that they were instructed to, and did, act for the Naumovskis in 2006 and 2007, and that they were not negligent in the way they discharged their retainer. They plead contributory negligence on the part of the Naumovskis if Attwaters were found to be negligent.

As well, Attwaters plead that the Naumovskis' claim against them is an apportionable claim for the purposes of Pt 4 of the Civil Liability Act 2002, and that there are two other concurrent wrongdoers, within the meaning of s 35A of Civil Liability Act namely:

The Third Cross-Claim filed by the Naumovskis is that against the Registrar General of NSW. The form of this cross-claim is the Further Amended Third Cross-Claim filed on 30 August 2011.

In this claim, the Naumovskis plead that the Provident mortgage and earlier registered mortgages, occurred as a result of a fraud practised upon them by Suzana Nedanovski. They claim that they executed the mortgages in circumstances where they were fraudulently misled as to the nature and effect of the documents. As a consequence, the Naumovskis claim to be entitled to compensation from the Torrens Assurance Fund in accordance with s 129 of the Real Property Act 1980.

In addition to putting in issue the fact of the fraud and its causative effect, the Registrar General pleads in its defence filed 13 December 2010, that compensation is not payable because the Naumovskis failed to take reasonable care to ascertain the nature and effect of the relevant mortgage transactions, and further that any loss which they sustained was as a consequence of a negligent act or omission of a solicitor which was compensable under a compulsory policy of professional indemnity insurance (s 129(2)(b) of the Real Property Act), and was off-set by any benefit which the Naumovskis received.

The final cross-claim filed by the Naumovskis was that against Steven Harvey. This claim, the Seventh Cross-Claim, filed 13 December 2010, claimed damages from Mr Harvey for his alleged negligence in the course of the carrying on of his solicitor's practice, which was known as "Harvey Law Firm".

The Naumovskis plead against Mr Harvey that he purported to act on their behalf, having accepted instructions from Suzana Nedanovski and not them, with respect to their entry into a mortgage and loan transaction in December 2004. The mortgage and loan transaction was completed in the early part of 2005. The Naumovskis further plead that he was in breach of the duty that he owed them, and was negligent, as a result of which they suffered loss.

Mr Harvey pleads in his defence filed on 23 December 2010, that he accepted a retainer from the Naumovskis to act for them, and that he was not negligent in the discharge of that retainer.

Mr Harvey additionally pleads that the claim against him is an apportionable one under Pt 4 of the Civil Liability Act, and that Suzana Nedanovski was a concurrent wrongdoer within the provisions of that legislation.

The Registrar General has also filed two cross-claims. The first by him is the Fourth Cross-Claim in the proceedings.

The Registrar General pleads this claim against Suzana Nedanovski in the Fourth Cross-Claim filed on 21 September 2009. He claims that, pursuant to s 133(2) Real Property Act, that he is subrogated to the rights of the Naumovskis against Mrs Nedanovski because of the false representations made by her to them in the circumstances set out in their earlier pleadings. In short, relying upon their own pleadings he alleges that Mrs Nedanovski defrauded the Naumovskis.

Mrs Nedanovski did not file any defence to this claim. On 21 June 2010, the Court entered judgment in favour of the Registrar General on this cross-claim. Mrs Nedanovski did not appear at the hearing, nor was she legally represented. She gave evidence as a witness, having been called by the Naumovskis against Provident.

The second of the cross-claims brought by the Registrar General was that against Provident.

The Registrar General pleads in the Fifth Cross-Claim filed on 21 September 2009, that, again in reliance upon its entitlement to be subrogated to any claim of the Naumovskis, that having regard to the matters pleaded in the Naumovskis' pleading against Provident, that the Provident mortgage and loan transaction was unjust and liable to be set aside, or else varied under the Contracts Review Act.

Provident pleads a defence which, in essence, replicates its defences against the principal claims by the Naumovskis.

It is necessary to outline the facts which relate to the entry into various loans and mortgages by the Naumovskis. These facts are central to the various issues to which it will be necessary to turn.

Having bought vacant land in Wallsend, in September 1993, Mr Naumovski commenced constructing a house on it. The construction took a number of months. It seems likely that the Naumovskis moved into the house in 1994. Although not entirely clear, it seems that the purchase of the land, and the construction of the house were achieved without the need to borrow money or mortgage the land.

In December 2004, the Naumovskis attended a conference with Mr Harvey, during which they executed documents with respect to two loans:

The first Hamafam loan was secured by a registered first mortgage over the Wallsend property, and the Hely Nominees loan by a registered second mortgage. Both of these loans were obtained through a company, Bacchus Investments Pty Ltd, which was associated with a law firm, R L Kremnizer & Co.

Upon settlement of these loans on 17 January 2005, the balance after various legal and other loan-related fees, including the fees of the lenders' solicitors, was disbursed by the payment of $32,740 for interest in advance, and the sum of $289,396 to Suzana Nedanovski and her husband. No monies were paid from these loan funds to either of Mr and Mrs Naumovski.

On 22 February 2006, the Naumovskis attended a conference with Mr Kevin Anthony, at the office of Attwaters Solicitors. During this conference, the Naumovskis executed various documents which provided for two new loans as follows:

These loans were arranged through the Bleier Mortgage Corporation Pty Ltd, which was another company associated with the law firm R L Kremnizer & Co.

These loans were ultimately settled on 8 May 2006, when the new loan monies were used to repay the first Hamafam loan and the Hely Nominees loan. The mortgages securing those loans were discharged. It appears from the settlement directions that after the payment out of the previous loans, together with legal and other associated fees, all that remained was $7,786.46. A bank cheque in that sum was drawn in favour of the Naumovskis. To whom it was paid is not apparent from the transaction documents or the evidence. The Naumovskis deny receiving the money. I accept that denial. The probabilities are that the monies went to Suzana Nedanovski and her husband.

By November 2006, default had occurred with respect to, at least, the Lawteal loan. The solicitors for Lawteal served by post on the Naumovskis and Suzana Nedanovski, a Notice pursuant to s 57(2)(b) of the Real Property Act, notifying of the requirement to rectify the default, or, failing which, Lawteal would exercise its power of sale. Attwaters were sent a copy of the covering letter and Notice.

On 6 December 2006, proceedings were taken in the Supreme Court of NSW against the Naumovskis by Lawteal seeking a monetary judgment and an order for possession of the land. Mr Steven Price, a solicitor in Sydney, acted for the Naumovskis in the course of these proceedings. It will be necessary to return to the detail of these proceedings in due course.

On 16 January 2007, a conference was held at the offices of Attwaters at which the Naumovskis and Suzana Nedanovski attended. The conference was held with Mr Anthony.

A considerable number of documents were signed by Mr and Mrs Naumoski during this conference, as a result of which the Naumovskis would upon completion of the transaction to enter into a loan with Provident. The loan was an interest only loan in the sum of $420,000 for a period of 12 months at the rate of 10.95 per cent per annum. There was a default interest rate of 16.95 per cent per annum. A registered first mortgage over the Wallsend property was required as the security for this loan.

Settlement of the loan was delayed for a considerable period. Ultimately, settlement occurred on 17 July 2007. For present purposes, the explanation for that delay can be put to one side. As a consequence of the settlement, the two mortgages to Hamafam and Lawteal were discharged, and a mortgage in favour of Provident over the property at Wallsend was registered. All monies advanced by Provident were used to discharge the existing loans, and to pay fees and charges occasioned by the refinance, and owing to both the outgoing and incoming lenders.

Within a few weeks, the Provident loan had fallen into default. On 21 September 2007, notices under s 57(2)(b) of the Real Property Act were served on the Naumovskis by the solicitors for Provident. Proceedings were commenced in this Court in October 2007. Orders were sought for possession of the Wallsend property.

Whilst there are many other facts which are relevant, it is sufficient to note from this summary, that:

It is convenient now to consider the principal witnesses in the proceedings, and in particular their credibility.

Mr Dimitar Naumovski played an important role in the transactions that I have described, and was a critical witness of fact in the proceedings before me.

Mr Naumovski was born in Macedonia in 1940 and lived there until 1968. Together with his wife, whom he married in 1963, he came to Australia in 1968. He commenced living and working in Newcastle, and has been there ever since.

By the time he came to Australia he had two daughters, Suzana who was then aged 4, and Elena who was then aged 2.

He had a very limited formal education in Macedonia, attending school for only two years. He said that he could not read nor write in Macedonian. He claimed in his affidavit of 7 May 2008, that: "I do not understand English when it is spoken to me, nor can I read, speak or write English in any form."

From April 1968 to about mid-1981, Mr Naumovski worked for BHP Steel as a factory crane operator. He resigned from BHP to work for himself in his own fruit and vegetable shop. After about two years in operation, he sold that business. He has worked as a plasterer and gyprock fixer since that time. This work has been principally carried out with his son-in-law, Chris Majuroveski. This work seems to have continued, probably at different intensities, up until shortly before these proceedings were heard.

In the period commencing about 1994, Mr Naumovski commenced receiving an Invalid Pension. At age 65 in 2005, he was transferred onto the Aged Pension. Whilst a pensioner, he continued to work for one or two days a week.

His evidence in summary about the loan transactions and mortgages, which have been outlined earlier, was that:

I have concluded that I do not accept any of Mr Naumovski's evidence unless it is corroborated by independent facts and circumstances, or unless it amounts to an admission against his or Mrs Naumovska's interests.

His evidence, for reasons which appear, was in various respects false, disingenuous or simply misleading and self-serving. He pretended a failure of memory when he thought it suited his own purpose. He feigned a lack of understanding about many matters. His answers were often evasive and, I thought, deliberately so. His demeanour when answering questions often showed discomfort in being forced to give an answer which he thought did not assist his case. He regularly waited for significant periods of time, sometimes more than a minute would pass, whilst he apparently thought about an answer which would then be self-serving or perhaps, evasive.

His principal claim, and the one upon which many other findings, including those as to his credibility turn, was his capacity to understand and speak English.

As I have earlier noted, in his first affidavit, he said that he had no understanding of English and could not speak it. Very early on in his cross-examination by senior counsel for Provident, he reaffirmed this evidence unequivocally.

There were a number of occasions both in his evidence, and described in the evidence of others which I accept, which demonstrate that this statement was untrue. Having regard to the subject matter, namely his capacity to speak or understand English, the evidence must have been untrue to his knowledge. The following constitutes a sufficient sample to provide the basis of this conclusion. Mr Price, although Mrs Nedanovski was present, gave evidence that he spoke directly to the Naumovskis. Having spoken directly, in English, to Mr Naumovski, Mr Price said this: "I recall ... that I was satisfied, having regard to the appropriate answers which he gave, that he understood my questions. I formed the view that Mr Naumovski understood the English language to the extent that he would be able to understand my advice in relation to the situation he was in." Mr Price took proceedings on behalf of the Naumovskis in this Court to obtain a stay on the execution of a Writ of Possession. In support of that application, Mr Naumovski swore two affidavits, neither of which bore any indication that the affidavit had been translated to him before being sworn. The second affidavit was sworn on 6 June 2007, and was witnessed by Mr Price. Of this affidavit, Mr Price said: "I would not have had Mr Naumovski swear an affidavit if I was not satisfied that he understood each paragraph of the affidavit he was deposing to". Whilst Mr Price accepted in cross-examination that the Naumovskis capacity to speak English was limited, and that was immediately obvious to him, he remained of the view that he could communicate adequately with them in English without an interpreter. Although he was of this view, he also thought that Mr Naumovski's English was not good, or else it was correctly characterised, as Mr Naumovski himself had said in the affidavit, as "... very bad". It is clear from Mr Price's evidence, which I accept, that Mr Naumovski could speak and understand English, albeit to a limited extent. It follows that Mr Naumovski's evidence to the contrary is false. "... I gained the appreciation that [Mr] Naumovski's spoken English was good. He spoke with a heavy accent, but I gained the impression that he had possibly worked in an English speaking language environment and had picked up language as a consequence. His language was broken grammatically, but was functional and his vocabulary diverse". I accept this evidence, which demonstrates that Mr Naumovski had a capacity to speak and understand English, and to adequately communicate with Mr Harvey in English. Mr Anthony concluded that, from this and other interactions with Mr Naumovski, that he understood some basic English, but needed a translator for more complex words and concepts. Mr Anthony was not challenged by counsel for Mr Naumovski on his evidence about the direct request for the production of the driver's licence, or his conclusions to which I have just referred. I accept Mr Anthony's evidence on this issue.

Other examples were, so it was submitted, capable of proving that Mr Naumovski understood English and could speak it. I have not relied on these examples in coming to my conclusion. The first example was of Provident relying upon the evidence of Mr Krouglov, who said that he overheard a conversation involving Mr Naumovski which was being conducted in English. Whilst Mr Naumovski was present in the building at the time of that conversation, I am not persuaded that I can make a finding that he was doing the speaking or that he was a real participant in the conversation. Mr Krouglov's evidence did not demonstrate sufficient accuracy or attention to the detail of what occurred to enable me to rely upon it.

The second such example, was another submission, principally from counsel for Mr Harvey, that in 1983 when Mr Naumovski was interviewed by a Commonwealth Government official for the purpose of taking Australian citizenship, he was able to pass, or else satisfy, the requisite English language test. According to documents produced by the relevant government department, that meant that although he was not required to read or write in English, he was obliged to "... be able to speak and understand the language sufficiently well: (a) to enable [him] to engage in any ordinary occupation among English speaking people; (b) to enable [him] to procure without difficulty [his] everyday requirements, food, clothing etc; (c) to explain in English [his] knowledge of the responsibilities and privileges of citizenship".

There was no direct evidence of how, in fact, in 1983 that this test was applied or what level of spoken English was required to achieve satisfaction. All that is known from the 1983 records is that Mr Naumovski was able to satisfy the interviewing officer that he should be granted citizenship.

I am quite unable to conclude from these documents alone what Mr Naumovski's capacity in 1983 was. In any event, there is no necessary conclusion that even if, perhaps by learning or practice, Mr Naumovski was able to pass the English language test in 1983, by the period involved in this case, namely, 21 years later in 2004 and following, his English language skills would necessarily have been the same. I do not rely upon this material for the conclusion which I have reached.

The third example was that there was said to have been an incident which occurred outside the Court during the conduct of the proceedings which demonstrated that both Mr and Mrs Naumovski could understand and speak English. It is necessary to examine this incident separately, as it involves both of the Naumovskis.

Mrs Susan Harvey, the wife of the seventh defendant, said in an affidavit, and in oral evidence, that on Tuesday 22 February 2011, whilst she was in the Court building, but near the windows in the foyer on Level 10, she overheard a conversation between two people who were later identified to her as Mr and Mrs Naumovski. The conversation which she said she overheard was in English, and was said to be this effect: "Mrs Naumovska: How long do you think we are going to be here for? Mr Naumovski: I'm not sure. Mrs Naumovska: Looks like it's raining again. Mr Naumovski: Yes, its been raining all morning."

The significance of this evidence is obvious. If Mrs Harvey's evidence was accurate, then it would appear, contrary to their case in this Court, that both Mr and Mrs Naumovski could speak and understand English, and seemingly used English as their preferable language whilst engaging in small talk.

Mr and Mrs Naumovski denied having the conversation about which Mrs Harvey gave evidence, and denied ever speaking to each other in English. Their daughter, Mrs Majurovski gave evidence that her parents did not have any such conversation, and did not converse between themselves in English at any time, whether in the vicinity of the Court or anywhere else. She was not with her parents all of the time. There were some understandable breaks in their continuous presence, such as when she visited the toilet. However, she adhered to her view that such a conversation was not possible.

At one stage, it appeared possible that the conversation may have been one involving Mr Naumovski and Mrs Naumovska's younger sister. Mr and Mrs Naumovski also denied any such conversation.

In cross-examination of Mrs Harvey, counsel for the Naumovskis suggested to her that her evidence was a deliberate lie, invented to assist her husband's defence of the claim brought against him. She rejected this.

Accordingly, the Court is presented with a stark choice between conflicting evidence.

I am not satisfied that I should accept the evidence of Mrs Harvey, that the conversation occurred as she described. The Naumovskis were present outside the Court together with other relatives. I have little doubt that whatever be their facility with spoken English, the language in which the Naumovskis would ordinarily converse as between themselves and their relatives of their generation is Macedonian. A familial and casual conversation, is more likely to be spoken in Macedonian than in English.

I think the probabilities are that Mrs Harvey heard a short conversation of the type and content which she describes which did take place in English, but that it was not between, or else involving, either of Mr or Mrs Naumovski, although it probably took place in their presence. There were other people who knew the Naumovskis in the vicinity of the conversation, and I think that its more likely that she heard a conversation between other people. I do not accept counsel for the Naumovskis submission that Mrs Harvey deliberately lied about this conversation. I have simply concluded that her evidence was in one respect, namely the identity of the speakers, in error.

In summary I have concluded that Mr Naumovski can speak and understand English, and that his evidence to the contrary was knowingly untrue. However, such a conclusion does not go so far as to find that Mr Naumovski was fluent in the English language, nor that features of the language such as idiom and shorthand expression, nor complex concepts expressed in English, would necessarily be understood by him.

On the contrary, I think that the correct position is that described by both Mr Price and Mr Anthony, who each separately expressed the view that Mr Naumovski's English language was:

Although he may have been able to read English words, such as the address "Mayfield", or a bank statement and the content of mail, that is very different from reading loan applications, mortgages and similar documents. I am not satisfied that Mr Naumovski was capable of reading and understanding complex legal documents which were written in English, without the assistance of expert legal advice, and a capable interpreter.

I have earlier noted that I do not accept Mr Naumovski as a credible witness. My conclusion was reached, amongst other reasons, as a result of the content of the evidence which he gave. It is appropriate to examine those instances which lead to my conclusion.

In addition to the specific instances, which I will shortly deal with, clearly, what I have discussed immediately above, namely, that contrary to his sworn evidence, I am satisfied that Mr Naumovski does understand and speak English, albeit to a limited extent, is one feature which affects to a significant extent, his overall credibility.

The first of the specific instances, relates to his evidence about visiting Woods Roberts in December 2004, when he collected the Certificate of Title for his house. The context of this visit was that, on the same day, Mr Naumovski had been to a conference with Mr Harvey when he and his wife had signed, for the first time, a series of documents entering into the first Hamafam loan and the Hely Nominees loan. The obtaining of the Certificate of Title was necessary to enable the loan to proceed and be processed.

The evidence of Ms McClardy, a solicitor, made it clear that the only document which was signed at the offices of Woods Roberts on that day, was a page of the Security Register maintained by the firm. That page, which is Exhibit DDDD, records in typewriting the four documents held by Woods Roberts for safekeeping in the following terms: "1. Certificate of Title Folio Identifier ... 2. s149 Certificate from Newcastle City Council dated 5 April 1993. 3. Drainage plans. 4. Search papers."

On 23 December 2004, Ms McClardy handwrote the following on that page: "Received above documents 23/12/2004". Mr Naumovski signed immediately underneath this handwritten note.

Ms McClardy handed over the described documents in an envelope, which Suzana Nedanovski described as a "long envelope". Having regard to the nature of the documents, and their conventional size, I am able to accept that the probabilities are that documents held for safekeeping by Woods Roberts were in such an envelope.

Mr Naumovski was cross-examined on this subject. He agreed that he regarded the title deeds as being important documents that he would not let out of his control unless absolutely certain of what was going to happen to them. In contrast, he later said that he did not know where the title deeds were.

When asked if he went to the solicitors at Mayfield (Woods Roberts) on 23 December 2004, he said, in evidence on 24 February 2011, this: "I don't remember that. Maybe I gone there to do a will".

He denied that he ever went there to pick up the Certificate of Title, although he agreed that his signature was on the security register.

Pausing there, two things emerge from this evidence as at February 2011: first, that Mr Naumovski had no recollection of going to Woods Roberts, and secondly, that he speculated he might have gone there "to do a will".

Mr Naumovski gave further evidence on the subject in a later affidavit, and in further cross-examination. In his affidavit of 4 August 2011, he said he went to Woods Roberts because his daughter, Suzana, had advised him that his solicitor had called her to say that he had not signed a section of his will, and it was necessary to return to the office to correct that failure.

In cross-examination, Mr Naumovski gave evidence that he had made a will with solicitors at Mayfield "...maybe were there 25 years ago". He said he had not questioned his daughter as to why, if he had signed the will 25 years before, the solicitors had, without any explanation, telephoned to say that a section of it remained unsigned. She did not, herself, proffer any explanation.

He said that on his visit to the solicitors, the will was not produced to him, "they didn't show me nothing".

It is clear beyond argument that the page of the Security Register, which Mr Naumovski signed, was not a will, did not looking anything like a will, and could not be thought, even by someone in Mr Naumovski's position, to be a will. When asked about the resemblance (or the lack of resemblance) between the document he signed (Exhibit DDDD) and a will, he said: "I don't know - maybe it doesn't - I don't recognise any difference - I don't know what it looks like - I don't know nothing".

This further exchange also took place about Exhibit DDDD: "Q. ... it has nothing to do with your Will, that's obvious. A. Yes, maybe it has got nothing to do with it - I don't know."

He then denied that his daughter took any documents away from Woods Roberts, saying "I have no idea whether she took documents from there".

The evidence of Ms McClardy about this episode, which I entirely accept, was given in accordance with her invariable practice and in accordance with her best enquiries. She is a solicitor and gave her evidence without hesitation and in a straightforward manner. The effect of her evidence was that:

Nothing in Ms McClardy's evidence provided any support for any suggestion that a solicitor from Woods Roberts had contacted Mrs Nedanovski, and had suggested that it was necessary for Mr Naumovski to attend at their offices to sign a will or a part of a will, or otherwise correct any earlier inadequate execution of a will.

Suzana Nedanovski's evidence does corroborate Mr Naumovski's evidence in some respects, but not others. For reasons which will later be expressed, I do not necessarily accept everything which Mrs Nedanovski said in her evidence. Her evidence for the reasons which I set out when later considering her credibility, on this episode is part of her evidence which I could simply not believe. It therefore can, and ought, be put to one side as not providing any corroboration of any real weight to Mr Naumovski's evidence.

I do not accept Mr Naumovski's evidence on this episode. First, his evidence that Woods Roberts had a will of his was false. They did not ever prepare or have his will.

Secondly, it is implausible that, even if he was told by Suzana that he needed to correct some defect of his will, he believed that he was going to Woods Roberts for that purpose, because Woods Roberts did not have his will, and after 25 years, on his account, there was no reason given to him to explain the sudden discovery of a defect in signing, which unexplained discovery, was entirely coincidental in timing with the first Hamafam loan and the Hely Nominees loan. His failure to ask any questions about this apparently irrational reason to attend Woods Roberts does not support the accuracy of the account.

Thirdly, having gone to Woods Roberts, and the only signature being placed by him on the Security Register which was not, and did not, resemble a will, he left with no questioning of either Ms McClardy, or his daughter, about that fact. It would be very surprising if, as Mr Naumovski contends, he attended to sign a will or a part of a will, did not do so and yet left without raising any query, in circumstances where documents were handed over to him and his daughter.

Fourthly, his explanation fails to account for any need to produce to Ms McClardy, an authority signed apparently by his wife, to authorise him to receive the documents which he did. If he was there to sign a will, which was his will, his wife had no role to play in it, and any authority signed, apparently by her, was entirely irrelevant.

Fifthly, when he first gave evidence, he did not proffer any recollection of substance of what occurred. He said he did not remember visiting Woods Roberts, and suggested that, really as a matter of speculation, that it might have been to do, that is prepare, a will. Yet, months later in his evidence, he professed a much better recollection of what occurred, which when tested in cross-examination, was responded to by his proffering answers which essentially described, and relied upon, a lack of recollection.

I conclude that his evidence as to why he went to Woods Roberts, and what happened whilst he was there, was false and was false to his knowledge. He intended to cover up and conceal the fact that he obtained the Certificate of Title for his land from Woods Roberts and gave it to his daughter.

The second episode which merits close attention, is his evidence, or lack of it, about his retainer of Mr Stanley Price. Mr Naumovski's evidence in chief, which consisted of two affidavits sworn 7 May 2008 and 15 November 2010, made no mention at all of his dealings with Mr Price. These dealings were particularly relevant to his knowledge of the Provident transaction, and the obligations which he was accepting or taking on, as part of that transaction. The lack of any mention of his dealings with Mr Price prior to his cross-examination, could not in my judgment, have been blamed on ignorance or inadvertence. It was plainly deliberate.

The significance of Mr Price's evidence, and the interaction with Mr Naumovski's evidence, is not to be understated. During the retainer of Mr Price, Mr Naumovski had sworn two affidavits, the contents of which suggested a far greater knowledge of the mortgages and loans and the obligations created by them than did Mr Naumovski's affidavit and evidence in this case. Non-disclosure of this past episode in the affidavits in this case allowed two assertions to be advanced in these proceedings, which were essential to the success of the Naumovskis' claims in this case:

I am satisfied from Mr Price's evidence that during his retainer in 2007, at least the following events happened:

Each of these events is sufficient of itself, but in combination are such as to convincingly demonstrate that Mr Naumovski was not being truthful in his affidavit and oral evidence about his lack of knowledge of the existence of loans and mortgages over his property, nor of any claims to his home by lenders prior to April 2008. He was not being truthful when he, knowing of his interactions with Mr Price, said in evidence that he did not instruct Mr Price to take proceedings to delay an order for possession of his house. He was not being truthful when he said that he could not recall being in the Supreme Court building in May 2007.

Another important feature of this episode, which causes me not to accept Mr Naumovski's evidence, is that the contents of his two affidavits, both duly sworn and relied upon to obtain relief in this Court in 2007, are wholly inconsistent with his evidence in these proceedings.

The first of these affidavits was filed on 23 May 2007. It is unclear precisely when it was sworn in front of Mr Young, a Justice of the Peace, but it must have been no longer than a day or two prior to that time.

This affidavit contains these statements:

Whilst it is obvious from the nature of the English used, and the idiom, Mr Naumovski is not, and could not be, the author of these words, I have no reason to think that the effect of these statements and the effect of the contents of this affidavit was not known to him prior to the time when he signed it.

The second affidavit was witnessed by Mr Price who took some care, according to his evidence which I accept, to explain the contents of the affidavit to Mr Naumovski and to satisfy himself that he understood what was being said. This second affidavit contained in part the following: "4. I am presently in [arrears] with the payments under the current mortgage and the mortgagee is intent on having me and my wife evicted from our home. We are both 67 years of age and have nowhere else to live. 5. I have applied to Provident Capital for a new loan in the sum of $420,000 which loan has been formally approved, and all the mortgage documents duly signed. 6. The matter was supposed to have settled many weeks ago, however, the arrears were such that there was insufficient equity in the new loan to pay off the old mortgage ... ... 10. I admit that I have not conducted my affairs in a businesslike manner, but I am 67 years old, am a foreigner, my English is very bad, and I am not used to the way in which mortgages work. However, I have now spent time with Price who has carefully explained to me my obligations in terms of the new mortgage, and of the consequences of my failure to adhere to the provisions of such mortgages. ... 13. In the event of the Court refusing to such extension, it will mean my wife and I are losing everything that we have worked for all of our lives."

Again, it is clear that Mr Naumovski did not write the words in the affidavit. But I have no doubt that he had a sufficient understanding of them when he signed the affidavit. I am satisfied that the affidavit accurately represented his understanding at that time, which demonstrates that his evidence in these proceedings to the contrary is untrue.

There are a number of other episodes which are pointed to as demonstrating that Mr Naumovski's evidence was untruthful and inaccurate. There is no need to further examine these, because the episodes which I have analysed, together with my observations of Mr Naumovski's demeanour whilst giving evidence, and the manner in which he answered questions, sometime quite evasively and often after significant periods of delay, satisfy me that I cannot accept his evidence unless it is independently corroborated or represents a statement against his own interests.

Mrs Naumovska was born in Macedonia in 1940. It appears that she has no formal education. It does not seem that she ever attended any school whatsoever.

Her family history and dates of immigration to Australia which are the same as Mr Naumovski's, have been set our earlier in this judgment.

After her arrival in Australia, she worked as a labourer undertaking manual work at BHP Steel from 1973 to 1983, that is, from the age of 33 to the age of 43. She retired from BHP because of bad health. She has not worked since.

She gave evidence that she speaks only Macedonian and cannot speak, read or write English. She cannot read or write Macedonian. It does appear that her social milieu consists of family and friends who are all fluent in Macedonian which is the usual language used in their communications. With the exception of her time at BHP, which is now more than 25 years ago, she has not worked and therefore, unlike her husband has not had the experience and opportunity of being exposed to any need to speak English in the workplace and when dealing with members of the public.

It was readily apparent from her evidence that she is not a well-educated person. She often gave conflicting answers to similar questions within a few minutes of each other. Her evidence liberally contained throughout it responses to questions which were apparently quite simple, such as "I don't understand" and also "I can't remember".

She did say in her evidence that her English speaking capacity was limited to saying words such as "Good morning", "how are you", "good thank you", "me no speak English".

However, notwithstanding her lack of education and the fact that an interpreter was translating her evidence, a very real question arises as to whether her evidence is accurate and reliable, or whether, like her husband, she was simply not telling the truth. There were many examples of her evidence that caused that sort of query to arise.

One example is when she was being cross-examined by Senior Counsel for Provident about whether she had by one, or more than one, written notice or document, been told that she had to vacate her home. Her evidence was, I thought, evasive particularly having regard to what she had said in clear and definite terms in her affidavit. Her answer was "I don't know. I don't remember. I'm an old woman. I don't - my mind is going."

This answer is immediately followed in the next question by a further unresponsive answer "I can't say anything ...". A few questions later, she gave another answer along similar lines. She said: "Wherever you go, I can't remember. I've lost my mind. It is useless asking me".

When following this answer, senior counsel challenged her as to whether she was being truthful, this exchange occurred: "Q. Mrs Naumovska, you can remember very well, could I suggest to you, and you are saying you can't remember because you know that the truth won't help your case, isn't that right? Interpreter: I'm sorry? Q. Because you know that the truth which you indeed do remember, won't help your case, isn't that right? Interpreter: I don't know. Maybe I'll make a mistake. I don't know."

Another example of answers being given within a short time in conflict is to be found in Mrs Naumovska's cross-examination by senior counsel for Provident. This exchange occurred: "Q. Did you ask your daughter, 'How does this come about? I've already signed many documents. Why are you asking me to sign them again?' A. INTEPRETER: We still need to extend the time for the shop. Q. Did you say 'Well hang on, it is not my shop. I've got nothing to do with it. Why am I signing?' A. INTERPRETER: This is what she said to me, the owner of the shop had requested that we should sign in regards to be, like, guarantors that they will pay the rent regularly. So they can hold on to the shop. Q. Right. So you thought on that occasion that you were guaranteeing your daughter's rent payments, is that right? A. INTERPRETER: The rent for the shop. ... Q. Then you went back to see Mr Anthony another time, didn't you? A. INTERPRETER: Yes. Q. And you were asked to sign a lot of documents gain, weren't you? A. INTERPRETER: She told us the same thing, the same thing. Q. The same thing? A. INTERPRETER: Same thing. Q. Well now, the first time you were told it was something to do with the rent? A. INTERPRETER: For the rent, it's for the rent. I'm getting confused. It's for the rent. It's for the rent. Q. The second time you were told if was for you to guarantee the rent would be paid and the third time was the same as the second time. That is, guaranteeing that the rent would be paid, is that right? A. INTERPRETER: I'm confused. Q. Well, what was it for the third time - take your time. What are you confused about? A. INTERPRETER: Like, I'm afraid. Q. What are you afraid of? A. INTERPRETER: (No answer) Q. Are you afraid to tell a lie, Mrs Naumovska? A. INTERPRETER: I not telling lies, I tell the truth. I'm not telling lies, I'm telling the truth. Q. You tell me what the truth is, please? A. INTERPRETER: The truth is, I am there for the rent. That is why I signed, for the rent. Not for any guarantee. Q. Did you ever sign for any guarantee? A. INTERPRETER: No. Q. So when you said a little while ago that you were signing for a guarantee, that evidence was untrue, was it? A. INTERPRETER: It was wrong. Q. It was untrue. You knew it was untrue, wasn't it? A. INTERPRETER: I know it's untrue. Q. You are telling lies to his Honour, aren't you? To his Honour, the judge. You are telling lies? A. INTERPRETER: I'm not lying. I'm telling you the truth. Q. What are you afraid of? A. INTERPRETER: I don't feel well, I don't feel well. Q. Would you like a moment? A. INTERPRETER: Yes please."

The answers she gave were in conflict. It clearly concerned her, that she might have made an admission contrary to her interests and hence she became "afraid". When pressed as to the truth of her evidence, she said that the admission which she had made against her interest, namely that she had signed a guarantee, was untrue. And, when pressed again, found that she felt unwell and needed time by way of a short adjournment. I have no doubt that she felt unwell. But she felt unwell because, as is apparent from the transcript, having made an admission against her interest, in attempting to back away from it, she was not giving truthful evidence.

Another answer, which Mrs Naumovska gave to counsel for the Attwater interests, has caused me to pause and reflect on her evidence carefully in terms of whether she was telling the truth. In answer to the question about what Suzana Nedanovski had said to her during a conference in Mr Anthony's office, she said that Suzana had only discussed personal matters with her. When pressed further, she gave answers which suggested that Suzana had spoken to her about things such as "what are we going to eat when we get home" and "matters about domestic cleaning". Mrs Nedanovski denied any such conversation.

This exchange occurred: "Q. Did you talk to your husband about domestic cleaning and cooking during this conference? A. INTERPRETER: What am I going to talk with my husband about cleaning and cooking? That's my chore, it's a woman's chore."

I regard the evidence on these discussions about women's chores, as highly improbable. Mrs Naumovska was in attendance at the conference with Mr Anthony. She had put her signature on a large number of formal documents, and on many pages of those documents. This was done, apparently she says, only with the simplest explanation from her daughter about it needing to be done for the rent of her daughter's shop. In all of those circumstances, it does not seem possible, much less probable, that a conversation of the kind she described occurred. I find that it did not occur, and that Mrs Naumovska has simply made up her evidence about this in an attempt to downplay her role in signing the documents. As well, the fact that Mrs Nedanovski denies the occurrence of any such conversation about domestic cleaning and cooking provides some additional support for this finding.

During her evidence, Mrs Naumovska denied ever going to a conference in 2007 at Double Bay with Mr Price. I do not accept that denial. Nor do I accept that she could have forgotten any meeting with Mr Price. He is a memorable figure. I say, without intending any offence to him, that Mr Price is a bombastic man with a forceful personality, with a capacity to give a simple explanation in straight language without "pulling any punches". Given that he was talking in such terms about Mr and Mrs Naumovski's house and the Notice to Vacate which had been sent to them by the Office of the Sheriff, I have not the slightest doubt that his advice would have been direct, plain and to the point. In my judgment, it was not a meeting which could readily be forgotten.

As well, it is to be remembered that until, in the context of the present proceedings, Mrs Naumovska instructed her present solicitors, who have offices in Auburn, Mr Price was the only solicitor with whom she had consulted in Sydney. Again, such a fact is itself unlikely to be overlooked.

Having regard to Mr Price's evidence of what occurred at that meeting, including what was discussed and the nature of the advice which was given, I do not accept that Mrs Naumovska told the truth about not going to such a consultation. Rather, I think that she was attempting to deny the existence of the meeting in order to maintain the appearance of truthfulness of her evidence in this case, namely of a complete lack of knowledge about any borrowings, and any mortgage over her house.

In summary, I am unable to accept Mrs Naumovska's evidence unless it is independently corroborated or else an admission against her interest. She was an inaccurate and untruthful witness.

The third central figure, whose evidence requires careful evaluation and assessment, is Suzana Nedanovski.

At the start of her evidence, Mrs Nedanovski objected to answering any question upon the basis that the evidence may tend to prove that she had committed an offence under an Australian law. I granted a certificate under s 128 of the Evidence Act 1995. The entirety of her evidence was the subject of that certificate.

The gravamen of Mrs Nedanovski's evidence was:

In her affidavit evidence, she made no mention of visiting Woods Roberts in December 2004 to obtain the title deeds for her parents' house. Nor, did she mention any dealings with Mr Price, or the proceedings in this Court in 2007.

Mrs Nedanovski's credit, truthfulness and accuracy as a witness were challenged by all of the parties other than her parents who called her as a witness.

I do not accept the evidence of Mrs Nedanovski. Her evidence was generally not truthful, nor was it accurate. There are a number of episodes in her evidence which have caused me to come to that view. As well, her evidence is in conflict with other witnesses whose evidence I accept. In addition, her demeanour whilst giving evidence, and the content of her answers to questions which was often non-responsive and intent on reminding the questioner of the central elements of her version of events, both struck me as indicating that her evidence was unreliable and needed to be corroborated independently and checked carefully before acceptance.

The first episode is Mrs Nedanovski's denial that she was a guarantor of the second Hamafam loan, and the Lawteal loan to her parents. After initially denying that she was a guarantor, when confronted with her signature on the relevant documents, she said: "A. I signed it, so I guaranteed it. Q. Obviously you guaranteed it madam. Do you tell his Honour that you were carrying out plans that you have told us about, but did not know that you were a guarantor of the loans? A. Actually, I didn't know that I was. But no, they didn't even know about this loan anyway because it was a prepaid one year loan ... Q. Ignore what your parents may have known or didn't know. You knew you were a guarantor didn't you? A. I didn't know I was a guarantor. I knew that I took the loan out for them. Like, without their knowledge I took the loan. I was desperate, I needed the money at the time, but not like a guarantor, no. So I didn't know."

The evidence of Mrs Nedanovski in this extract was, I thought, indicative of two things:

I cannot accept that she was unaware that it was a condition of the two loans that she provided a guarantee, nor that having signed the documents indicating that she was a guarantor, and accepting that she had signed them, she continued to deny that she was a guarantor.

Her evidence on this issue was, in my judgment, untruthful.

The second episode dealt with the occasion of collecting the title deeds for her parents' property from Woods Roberts in December 2004. I have already discussed this episode earlier in this judgment in some detail. However, it is necessary to consider Mrs Nedanovski's evidence about it.

When being cross-examined initially about the question of what she did and in what circumstances she obtained the Certificate of Title, by senior counsel for Mr Harvey, she said that she had no memory of what she had done. She said: "Q. Where did you get that certificate of title from physically? A. It was from Woods Roberts, solicitors of Mayfield. Q. And did you give to those solicitors an authority, at least, purportedly in the name of your parents authorising them to give you the certificate of title? A. I don't remember what I done, no. I don't remember what I done but I remember going there to pick it up. ... Q. In substance, you stole this document to use for your own purposes? A. I didn't steal it, no. I asked for it and they gave it to me. Q. Without the owners' permission, being your parents? A. Yes."

This account of her limited recollection of what occurred and largely her lack of memory of what occurred, which was given in February 2011, is wholly inconsistent with what she later said in evidence about this episode when recalled to give evidence in August 2011.

On the second occasion, when giving evidence in chief, she said that she had taken her father with her to the offices of Woods Roberts and the excuse was: "...they had to sign for some half of their Will, or something wasn't complete at the time ..."

In cross-examination, she said that she had a clear recollection that she had forged her mother's signature on a document giving her authority to collect the Certificate of Title. However, when pressed by senior counsel for Provident, it was readily apparent that she had no recollection of what had actually happened, and was content, when giving her answers to engage in either a reconstruction of the event, in a way which apparently suited her purpose, or to simply invent the contents of her answers.

She could not consistently or adequately explain when, or in what circumstances, she prepared the false authority from her mother. She was unable to explain why she did not take her mother to Woods Roberts to sign for the deeds, as she had done by taking her to the offices of Mr Harvey on the very same day. She was unable to explain adequately how she knew that her father had, many years before, made a will, and that her knowledge was that the will was in the safekeeping of Woods Roberts. Nor was she able to explain adequately how her father, notwithstanding that Woods Roberts had never received instructions to prepare a will, nor had they done so, could have thought or believed that there was a will which he had made at those offices.

In my judgment, the entirety of her evidence, with the exception of the fact of attending at Woods Roberts with her father to obtain the Certificate of Title, with respect to this incident was untrue, and untrue to her knowledge.

The third episode which grounds my findings about the lack of credibility of Mrs Nedanovski, is her evidence about forging her father's signature on an affidavit which was filed, and relied upon, in the 2007 proceedings.

It is to be recalled that two affidavits in the name of Mr Naumovski were filed in the 2007 proceedings in which Mr Price acted for the Naumovskis. The first was sworn on 23 May 2007 and the second on 6 June 2007.

When first shown the affidavit of 23 May 2007, Mrs Nedanovski said in evidence that her father had not signed the document, but she had signed it using his name. However, in contrast to this, she said that her father had signed the Notice of Motion which was filed a few days after that on 6 June 2007.

In her initial evidence on the subject, she gave no explanation as to how she had signed a document in her father's name which was apparently witnessed by an entirely independent Justice of the Peace.

In cross-examination by senior counsel for Provident, Mrs Nedanovski initially said that the affidavit had probably been signed at Wallsend. Ultimately, after it was put to her that the Justice of the Peace was located at either Lindfield or else at the Land Titles Office in the city, she gave evidence that she had no recollection of the circumstances of the signing of the affidavit save that it was prepared prior to going Court on the first occasion to get a stay from the Duty Registrar.

When cross-examined by senior counsel for Mr Harvey, Mrs Nedanovski maintained that she signed her father's name as the deponent of the 23 May 2007 affidavit.

Some observations are here pertinent:

The probabilities to my mind favour Mr Naumovski signing the document in front of this Justice of the Peace, contrary to the sworn evidence of Mrs Nedanovski.

However, there is a more significant issue which reflects adversely on Mrs Nedanovski's credit. If I were to accept her evidence that she did sign the affidavit which purports to set out to his knowledge, that her father and mother had a loan which was in default, the loan was being refinanced, and they were seeking an exercise of the Court's discretion to stay an eviction notice, albeit for a limited period, and that affidavit was to Mrs Nedanovski's knowledge, entirely false, then she has perpetrated a most serious deceit on at least one, and probably two, Registrars of this Court.

In other words, if her evidence is true, she has knowingly and intentionally lied to obtain orders of this Court which were to her advantage and the benefit of her parents. Such conduct in a matter closely related to the issue in this litigation would be, of itself sufficient, but when combined with the other matters to which I have referred, is more than sufficient, for me to reject her evidence in this proceeding unless it is independently corroborated.

The alternative to this view of the circumstances, is that in fact her father did sign the affidavit and knew what its contents were. If that the fact, then she has lied in her evidence to this Court as to the circumstances in which the affidavit came to be sworn or affirmed.

It is for those reasons that I do not accept Mrs Nedanovski as a credible witness, nor do I accept any of her evidence unless it is independently corroborated, or else amounts to an admission against her interest.

I could not detect any reason to reject in its entirety or unless independently corroborated, the evidence of any of the other witnesses.

There was no reason arising from their manner of giving evidence, their demeanour or else their own conduct of which they gave evidence, which would have led me to decline to accept their evidence.

However, that does not mean that the evidence was necessarily entirely correct or reliable. It will be a matter to consider the evidence on each issue to see where, if there is a conflict in the evidence, the probabilities of what happened are to be found.

It is necessary now to turn to the issues.

The Naumovskis rely upon a plea of non est factum.

The onus of establishing the plea of non est factum rests on Mr and Mrs Naumovski.

The following principles are established by the authorities with respect to such a plea:

An important observation with respect to a person relying upon another when signing a document is to be found in the speech of Lord Pearson in Galle, where, at 1021, his Lordship says: "Suppose a man signs a deed without knowing or enquiring ... as to its nature or effect: he signs it because his solicitor or other trusted advisor advises him to do so. Then his intention is to sign the deed which is placed before him, whatever it may be or do. That is the intention in his own mind, as well as the intention which by signing, he manifests to others."

In this case, there is no doubt that the Naumovskis signed each of the significant and relevant documents which constituted the loan agreement and mortgage. In considering whether they are bound by the relevant documents which relate to the Provident loan, the question is whether they have discharged their onus of proving that the documents which they signed, and in particular the loan agreement, were essentially different in substance or of a kind radically or fundamentally different to the transaction which they understood or intended by their signing of the documents.

The Naumovskis claim that they signed the documents understanding and believing that they were signing documents relating to Mrs Nedanovski's lease agreement, and that they were doing so merely as witnesses for Mrs Nedanovski's signature. I cannot accept the evidence of the Naumovskis or Mrs Nedanovski because of their general lack of credibility as witnesses, and because there is no independent corroboration of what it is that they claim occurred in conference with Mr Anthony. Rather, the evidence points to the contrary of what they claim.

The conference during which the documents for the Provident loan were signed, took place in Mr Anthony's office on 16 January 2007.

The context, which included previous dealings between Mr Anthony and the Naumovskis, against which the 16 January 2007 conference, and the Naumovskis entry into the Provident transaction, needs to be considered. That context included:

Mr Anthony formally opened his file for the Naumovskis' refinancing with Provident Capital on 11 January 2007. On that day he received a letter from Bersten Pain, Provident's Solicitor, enclosing all of the documents required for the refinancing to be completed. It was apparent from that letter that an offer had been made by letter from Provident to the Naumovskis on 12 December 2007, and that the offer had been accepted subject to the satisfactory completion of the documents.

The conference of 16 January 2007, lasted for about an hour and 20 minutes. Mr Anthony gave evidence, which was unchallenged, and accepted as accurate by Mrs Nedanovski, that he explained in English for the benefit of Mr and Mrs Naumovski that the new loan was for 12 months, that the loan costs were exorbitant, and that, in particular: "If you take the loan, you will need to continue making the repayments, otherwise you will lose your house."

Mr Anthony used Mrs Nedanovski to translate what he was saying to Mr and Mrs Naumovski. He said that, from his observation, she appeared to be translating what he said appropriately. He said that there was nothing said by anyone in the room, and that there were no facial or other gestures, which led him to think or suspect that what he was saying was not being translated, nor that Mr and Mrs Naumovski did not adequately understand the purport of the transaction generally, and the documents about each of which he gave a short explanation. I accept Mr Anthony's evidence to this effect.

Mrs Nedanovski gave evidence that she did not translate accurately, or effectively at all, the advice given by Mr Anthony to her parents. Their evidence was to a similar effect. I have previously indicated that I do not accept their evidence generally, unless independently corroborated.

Their evidence about this conference, and the lack of accurate interpretation of Mr Anthony's advice, was not independently corroborated, and I do not accept it.

But, there are other pieces of evidence which cause me to reject the version of what occurred at this conference given by Mr and Mrs Naumovski, and as a consequence, find that Mr and Mrs Naumovski sufficiently understood the nature of the transaction into which they were entering.

First, Mrs Naumovska herself, when giving evidence, said that when meeting in conference with Mr Anthony, she thought she was signing a document at the request of Mrs Nedanovski's landlord "... to be like guarantors, that they will pay the rent regularly so that they can hold onto the shop". I have set out this transcript more fully at [131]. Although Mrs Naumovska later sought to change this evidence, I am satisfied that this evidence, being an admission against her interest, was substantially truthful. What Mrs Naumovska was acknowledging, in substance, was that she was entering into a financial transaction, the consequence of which was dependent upon her daughter discharging all of the financial obligations.

As well, it clearly related to the business being conducted by her daughter and, Mrs Naumovska's position was clearly dependent upon the successful conduct of that business.

Secondly, the contents of the affidavits sworn in May and June 2007 by Mr Naumovski, when attempting to obtain relief from this Court for failure to pay the Lawteal mortgage and loan, demonstrates that he had a full understanding of the nature and effect of the transaction into which he was entering with Provident Capital, and as well, an adequate understanding of the nature, effect and features of the Lawteal loan and mortgage, which was being paid out by the Provident loan.

Although the affidavits do not make specific mention of the state of mind, knowledge and understanding of Mrs Naumovska, having regard to the closeness of the relationship between the Naumovskis, the fact that assistance was being provided to their daughter, and that Mrs Naumovska was able to give evidence about a guarantee to which I have referred above, I would be prepared to infer that she had an understanding about the transaction upon which advice was sought in conference from Mr Anthony, that was similar to Mr Naumovski's. No submission was made that I should differentiate their position.

Thirdly, there was no suggestion in the previous Supreme Court proceedings, that either of the Naumovskis were propounding any defence (whether by way of defence or cross-claim) to the claims made by Lawteal upon its loan and mortgage, to the effect that either of them did not have any understanding of the true nature and effect of the Lawteal transaction. If the position was as Mr and Mrs Naumovski now assert, in their evidence in these proceedings, then such a defence was available, and one would ordinarily have expected it to have been relied upon, together with an application to set aside the default judgment. There was no hint of any such substantive defence in those proceedings.

Fourthly, the evidence of Mr Price, which I accept, satisfies me that he gave a direct and clear warning about the nature and effect of the Provident Capital transaction to both Mr and Mrs Naumovski. He had little doubt that his advice had been understood. Whilst the warnings and explanation were given after the various documents were signed in front of Mr Anthony, if either of the Naumovskis was hearing for the first time about the true nature and effect of the Provident Capital transaction, then I would have expected either or both of Mr or Mrs Naumovski to have raised that issue with Mr Price, and to have sought clarification and further advice from him. That did not occur. I am satisfied that it did not occur because what Mr Price was telling Mr and Mrs Naumovski was not new to either of them. It merely reinforced what they already knew, as a consequence of their conference with Mr Anthony.

For these reasons I am satisfied that the explanation given by Mr Anthony to Mr and Mrs Naumovski was understood by them. Their understanding of the documents and the nature of the transaction into which they were entering was, I am satisfied, not "radically different" from that which they in fact entered into. It was after Mr Anthony's explanation that they signed the document.

It follows that the defence of non est factum has not been made out by Mr and Mrs Naumovski.

I should also note, although the position of Mr and Mrs Naumovski was not argued to be materially different as between themselves, that there remains a possibility that their positions are different. However, it is clear that during the conference with Mr Anthony, and also with Mr Harvey, that Mr Naumovski would provide some information to Mrs Naumovska, who it seems was less familiar with the English language. To the extent that Mrs Naumovska was relying upon her husband to translate for her and to inform her about the transaction before she entered into it by the signing of the various documents, she did so because she was accustomed so to do, and was content to rely upon her husband for those purposes.

In those circumstances, even if Mrs Naumovska did not objectively have an adequate understanding of the documents and the nature and effect of the transaction, that was because she was content to rely upon her husband, and to follow him in signing the documents. Such self-generated reliance is sufficient, for me to reject the defence of non est factum on her part, if it was sought to be argued that her position is different from that which I have found, and different from that of her husband.

This defence fails.

The issue of the application of the Contracts Review Act 1980 is an entirely separate question and arises only if there is found to be an enforceable contract as I am satisfied that there is.

It is necessary now to consider whether the Provident loan contract was unjust. But before doing so, it is useful to set out the legislation and the legal principles by which the application of the Contracts Review Act to the facts of this transaction should be considered.

The Contracts Review Act was described by McHugh JA in West v AGC (Advances) Ltd (1986) 5 NSWLR 610 at 621 as: "... revolutionary legislation whose evident purpose is to overcome the common law's failure to provide a comprehensive doctrinal framework to deal with 'unjust' contracts."

Section 7 of the Contracts Review Act is the principal provision which enables relief to be granted by the Court. It is in the following terms: "7. Principal relief (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part, (c) it may make an order varying, in whole or in part, any provision of the contract, (d) it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that: (i) varies, or has the effect of varying, the provisions of the land instrument, or (ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument. (2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order. (3) The operation of this section is subject to the provisions of section 19."

As is apparent, the central provision in s 7 deals with a finding that a contract or a provision of a contract was unjust.

In reaching such a determination in any given matter, the Court is obliged to have regard to the matters set forth in s 9 of the Contracts Review Act.

It is in the following terms: "9 Matters to be considered by Court (1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: (a) whether or not there was any material inequality in bargaining power between the parties to the contract, (b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation, (c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract, (d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract, (e) whether or not: (i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or (ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented, because of his or her age or the state of his or her physical or mental capacity, (f) the relative economic circumstances, educational background and literacy of: (i) the parties to the contract (other than a corporation), and (ii) any person who represented any of the parties to the contract, (g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed, (h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act, (i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect, (j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act: (i) by any other party to the contract, (ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or (iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract, (k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and (l) the commercial or other setting, purpose and effect of the contract. (3) For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made. (4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made. (5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made."

A contract may be unjust:

Two distinct steps are involved in applying the Contracts Review Act. In Riz v Perpetual Trustee Australia Ltd [2007] NSWSC 1153, Brereton J said at [51]: "... The first is whether the contract was unjust in the circumstances in which it was made, having regard to the factors referred to in s 9. This is a conclusion of fact, albeit one of ultimate fact involving a broadly based value judgment. ... The second which arises only if the first resolved in the affirmative, is whether any and if so what relief should be granted; this involves the exercise of a judicial discretion ..." See also Antonovic v Volker (1986) 7 NSWLR 151 at 154-155 per Samuels JA and Kirby P agreeing; Beneficial Finance at 270E per Samuels JA; Khoshaba at [34]-[40] per Spigelman CJ, [106]-[111] per Basten JA; Kowalczuk v Accom Finance Pty Ltd [2008] NSWCA 343; (2008) 77 NSWLR 205 at [85]-[87] per Campbell JA (Hodgson and McColl JJA agreeing).

In other cases, particular elements have been found that have contributed to the consideration of whether the particular contract was unjust. These have included:

There is of course a need to keep firmly in mind the countervailing issue which is that there is a strong public interest in promoting certainty in commercial transactions and in holding people to the bargain which they sign. The terms of s 9 require the Court to have regard to the public interest.

In considering the application of the Contracts Review Act, in this case, it is necessary to concentrate, at least initially, on the Provident transaction.

The loan was for a period of 12 months. It was in an amount of $420,000. The interest rate was 16.95 per cent, which was reducible to 10.95 per cent if the mortgage interest payments were paid on time.

The monthly payments of interest, if made in a timely way, were about $3,800. If the payments of interest were not discounted for timely payment, they amounted to a little over $5,900 per week. No capital payments were required until the end of the loan period, which was 12 months.

The security for the loan was a registered first mortgage over the Naumovskis' home.

The entirety of the loan proceeds were disbursed by way of fees and charges for the incoming and outgoing lenders and their lawyers, and in repayment of the existing borrowings, which were secured over the property.

Previously, Mrs Nedanovski had been a guarantor of the second Hamafam loan and the Lawteal loan, but such a guarantee was not required by Provident, and accordingly, only the Naumovskis' home secured the loan.

The Provident loan was on interest terms which, at least in part, were significantly more favourable to the Naumovskis insofar as the Lawteal loan repayment was concerned, and overall slightly, more favourable to them with regard to total interest charges.

In advancing their claim under the Contracts Review Act, Mr and Mrs Naumovski rely upon the following facts, matters and circumstances in addition to the features of the loan and mortgage:

their inability to understand or read English;

their inability to comprehend complex documents, and the complex concepts embodied in the document;

the lack of an accurate or adequate translation of the advice which they were being given;

It will be appropriate to consider each of these factual matters and circumstances, so as to enable a proper consideration of the claim for relief under the Contracts Review Act.

Having regard to the significance of it, it is convenient to commence with the final matter, namely whether any fraud was perpetrated by Mrs Nedanovski. In his submission, counsel for the Naumovskis, described it as an essential, and the primary, issue of fact.

The only direct oral evidence of this fraud comes from Mr and Mrs Naumovski themselves, and from the evidence of Mrs Nedanovski. Mrs Nedanovski's husband, Tony Nedanovski, was not called as a witness. It seems to me that his evidence may well have included his knowledge of what was happening since he was a beneficiary of the loans, and what, if anything, Suzana, his wife, had told him. As well, he was present during the conference with Mr Price. His absence does not assist in establishing the existence of a fraud perpetrated upon her parents by his wife.

I have elsewhere expressed the view that I do not accept the evidence of Mr and Mrs Naumovski nor Suzana Nedanovski, unless it is independently corroborated.

There are a number of facts and matters which are relied upon by the Naumovskis as demonstrating independent support for the existence of a fraud. The first is the fact that judgment has been entered against Mrs Nedanovski on the fourth cross-claim. The fourth cross-claim was brought by the Registrar General of NSW and alleged that Mrs Nedanovski had engaged in conduct which was constituted by the making of knowingly and intentionally false representations to Mr and Mrs Naumovski, intending that they would act upon those representations to their detriment, and to Mrs Nedanovski's benefit.

Judgment was entered against Mrs Nedanovski on the claim on 21 June 2010, because she had not filed any defence. The Naumovskis submit that the existence of the judgment gave rise to an estoppel by judgment. The judgment was entered by default, and not after any contested hearing. Such a judgment does not give rise to any estoppel. The Naumovskis' evidence is not corroborated by this entry of judgment.

The fact that Mrs Nedanovski did not file a defence is consistent with her evidence that she engaged in fraudulent conduct towards her parents. But it is also consistent with other matters as well. For example, she is now without assets or financial means or support. The fact that she did not defend these proceedings is also consistent with her being financially unable to do so, and because she had no assets sufficient to satisfy any judgment.

I am not satisfied that this entry of judgment constitutes a sufficient, let alone an independent, corroboration of the alleged fraud.

The second matter relied upon as independently evidencing the fraud is the evidence of Mark Lazarevich, which described his dealings with the Naumovskis in the early part of 2008. This evidence is said to independently corroborate the absence of knowledge on the part of the Naumovskis as to what the nature and effect of the Provident transaction was, and the existence of the fraud perpetrated by Mrs Nedanovski.

Mr Lazarevich was enlisted to help the Naumovskis by Christopher, their grandson, who was then friendly with Mr Lazarevich's niece. Mr Lazarevich's help was sought because he was employed, in a reasonably senior position, by a bank.

His evidence, which was led as part of Provident's case, and which was not challenged as to its honesty, and which I accept, was to this effect: "... she had organised the loan without the defendants' knowledge and that it was never her intention that they would get into this mess".

In the course of his evidence, Mr Lazarevich said that, although he did not find out initially, he was later informed that there had been proceedings in the Supreme Court and that Mr Naumovski would have attended.

Mr Lazarevich arranged for the Naumovskis to see a solicitor for advice. At that time, he seems to have ceased to have any active involvement in their dealings with Provident.

It is clear that by the time the Naumovskis came to see Mr Lazarevich, they had been informed by Mr Price, at least, of their position. Mr Naumovski had sworn two affidavits which set out his knowledge and understanding of the financial transactions in which he and his wife had participated.

I have no doubt that by this time the Naumovskis believed that Mrs Nedanovski would have properly attended to making all payments which were due to Provident. I am well satisfied that whatever was said between the Naumovskis and their daughter, Suzana, at the time the Provident transaction was entered into and completed, it would have included her assurances that there would be no further default and that their home would not be at any further risk of being sold.

It is unsurprising then that, having received correspondence of the kind described, the Naumovskis would be both upset with and disappointed by their daughter, whose conduct had again put them in the position in which they were in. But, more importantly, I have no doubt that they were also thoroughly confused about what had happened, and what they were confronted with.

It seems that at this stage, they had not consulted with their other daughter or revealed the position to her, because what caused them to seek help from Mr Lazarevich was the service of a Statement of Claim in these proceedings. It was not until after they received a letter of eviction from the Office of the Sheriff, which was dated 21 April 2008, that they first discussed this matter with their daughter, Elena Majurovski.

Having regard to that chronology, I am satisfied that the ignorance, or lack of knowledge of the Naumovskis, together with their inability to adequately explain their position was a product of their confusion as to what was facing them, rather than any uncertainty about what had happened in the past.

Their denial to Mr Lazarevich of any knowledge that they had borrowed any money from Provident was false. The denial was wholly inconsistent with the events of 2007, which I have earlier described at some length. While I accept that they told Mr Lazarevich that they had not borrowed any money, I do not accept that this was an accurate statement of their knowledge.

Whilst I accept Mr Lazarevich with respect to Mrs Nedanovski's statements to him, her statements fell short of a confession of fraud, and do not corroborate her version in court. All that she is recalled as saying is that she organised the loan without the Naumovskis' knowledge. That statement was, interpreted narrowly, true. On the whole of the evidence, it is clear that she organised the loans without her parents' participation and hence knowledge. But she is silent in her statement to Mr Lazarevich about her parents' knowledge at the time the loans were completed, and the documents signed.

If it is a confession of fraud, and I am not satisfied that it is, it is certainly less than fulsome, and does not constitute any real corroboration of what she now says is the case.

The third matter relied upon as corroborating the existence of a fraud is the evidence of Elena Majurovski which was also said to provide independent evidence of the existence of the fraud. Mrs Majurovski, the younger daughter of the Naumovskis, first learned of her parents' troubles in late April 2008. At that time, she found "an eviction notice" which was in an opened envelope on the kitchen table. Upon discovering the document, she asked her mother about it and was told that they "... had signed a few documents with my sister", which they thought had something to do with her shop. "Her mother told her that they had signed the documents because Suzana had asked them to "... because she needed them for the shop or something like that ...".

When Mrs Majurovski told her mother that the letter required her and Mr Naumovski to leave the house, her mother became very upset and started to cry hysterically. Mrs Naumovska told her daughter that she had recently been to see solicitors with Suzana, but did not know why.

Not unnaturally, Mrs Majurovski's concern was to look after her parents, and so, as a consequence, she did not take it upon herself to enquire from her parents about the detail of any events occurring before 2008.

However, she did speak to her sister, Suzana, by telephone. The essence of the conversation was that Mrs Nedanovski said "I didn't mean to do it. I was desperate and I was about to be evicted" and also "It was only going to be for a short time and then I was going to pay it back".

It is also clear from Mrs Majurovski's evidence that she did not have a clear understanding at the time she became involved, of precisely what had happened, and it was not until much later, whilst these proceedings were on foot, that she had learnt what happened.

I accept that Mrs Majurovski was giving evidence truthfully, and accurately. Her evidence does not suggest that she was told that her sister had perpetrated any fraud on her parents. To the contrary, her evidence suggests that her parents understood that they were signing documents at the request of her sister because she needed assistance with her shop. This is consistent with non-fraudulent conduct on the part of Suzana, and willingness on her parents' part to provide assistance to her.

The fact that her mother was confused and was upset at the thought of being evicted from her home is unsurprising. Of itself, it suggests that eviction was an unexpected event. Again, this is unsurprising in circumstances where I am satisfied that the Naumovskis were expecting Suzana to attend to the timely payments of the Provident loan.

The totality of the evidence does not satisfy me that what occurred was as a consequence of fraud being perpetrated by Suzana on her parents.

That is not an end of the claim for relief under the Contracts Review Act. The other factors need to be considered, but the context in which they are considered, is that Mr and Mrs Naumovski have not been the subject of any fraudulent conduct on the part of their daughter Suzana.

It is not in any doubt that both Mr and Mrs Naumovski were poorly educated and incapable of reading for themselves complex legal documents, such as a typical loan and mortgage document, when these documents were written in English. They were commercially unsophisticated, and had no experience prior to the first Hamafam loan and Hely Nominees loan, of borrowing money for the benefit of a third party, and securing those loans by a mortgage over their home.

Both had some, but a limited, capacity to speak English. Mr Naumovski's capacity was greater than that of his wife. As I have earlier said, I accept from the evidence of Mr Price and Mr Anthony, that he had a capacity to speak and understand English, but it was a limited capacity and he would not be able to understand complex legal documents without the assistance of expert legal advice, and a capable interpreter.

But he was sufficiently capable of understanding and speaking in English to operate his own fruit and vegetable grocery business. He was also sufficiently intelligent to have conducted the financial aspects of the business, such as they were, apparently without help. He bought and sold produce, he transported it, he rented premises in which the store was conducted and seemingly ran this small business for a few years, albeit with some assistance.

Mrs Naumovska, I accept, rarely spoke in English. Macedonian was her native language and the one she usually used. She was clearly accustomed to relying upon, and depending upon, her husband in business matters and in matters involving conversations in English.

Nevertheless, after having worked for BHP for 10 years, she must have had, and I am satisfied did have, a capacity, albeit a limited one, to understand English.

Prior to these proceedings, both Mr and Mrs Naumovski clearly had a close relationship with their two daughters and their respective families. They all lived in the same street in Wallsend and they regularly visited each other. Suzana was their elder daughter, whom they obviously loved and with whom they shared a close familial bond.

I have no doubt that both Mr and Mrs Naumovski would have readily agreed to help Suzana in her business. I have no doubt that such ready agreement arose out of their love and affection for Suzana, and from their notion of family. As well, I have no doubt that they trusted her and regarded her as honest and reliable, and a person who would meet her promises.

At the time of the Provident loan, Mr and Mrs Naumovski were pensioners by reason of their age.

Accordingly, their combined income was in the order of a few hundred dollars each week. They were entitled to other benefits as well such as a reduction in council rates and energy costs.

They had, from time to time, a small amount of money in savings, no more than $10,000 or so. Their pension income was supplemented by Mr Naumovski's earnings from his casual work as a gyprocker and plasterer, and builder's labourer generally.

Their home at Wallsend was their principal asset. At the time it was first mortgaged, it was valued at about $500,000.

They had no superannuation, share portfolio or other retirement assets.

Since they completely owned their own home, and lived a very modest life, they were able to get by on their pension income supplemented by Mr Naumovski's earnings.

It needs hardly to be said that they did not have the means to pay the monthly interest on the Provident loan, nor did they have the capital resources to repay the loan except by selling their home. They were entirely dependent on Suzana to attend to the financial obligations created by the loan from Provident and the mortgage given to Provident as security for that loan.

It does not appear from the evidence that they had any understanding of the financial position of Mrs Nedanovski or her husband. Whilst no doubt they knew that they owned their house, and operated a fish and chip shop, it was not suggested that they had any appreciation of the nature or extent of any borrowings of Mrs Nedanovski, nor of the net financial position of either her or her husband.

It follows that they had no knowledge of the capacity of Mrs Nedanovski (or her husband), to service the loan from Provident and to discharge the financial obligations which the loan entailed.

Since the Contracts Review Act claim deals with the Provident loan, it is necessary to consider the advice provided by Mr Anthony in 2007, at the time the documents were signed.

But it is also necessary to consider the advice given by Mr Price at the time before the transaction was completed. That is because the transaction went ahead after the Naumovskis had received legal advice from both of these sources.

The content of the advice given in English by Mr Anthony was not challenged. I accept his account of what was said. His English account made, in my opinion, sufficiently plain the important features of the loan and associated mortgage, such as the amount of the loan and the period of it, the fact that the costs of the lender were very high and exorbitant and that: "If you take the loan, you will need to continue to make repayments, otherwise you will lose your house."

The context for this advice being given by Mr Anthony, was that the Provident loan was a refinancing transaction in circumstances where Mr Anthony had given comprehensive advice about 12 months earlier, and he understood that Mr Harvey had earlier given legal advice about the first loans. In other words, this was the third loan transaction about which the Naumovskis had received advice.

I regard the advice delivered in English as, in the circumstances of this case, adequate to bring home to the Naumovskis the nature and effect of the transaction. To the extent that Mr Bartels criticised the content of the English version of the advice in his report of 18 September 2009, I reject that criticism. Mr Bartels had no proper factual foundation to advance any adverse opinion as, at that stage, he did not know, nor was he asked to assume, what advice had in fact been given.

The advice given by Mr Price was direct and succinct. Although it was submitted by the Naumovskis that I should not accept his evidence, I disagree. I do accept that Mr Price told Mr and Mrs Naumovski in simple English, in the clearest possible terms, what would happen if the Provident loan was not paid. The expert solicitors were not asked to give an opinion on, and hence did not express any criticism of the advice given by Mr Price.

I accept this evidence of Mr Price: "A. Can I just say this. I remember before he left me on the last occasion that I laid down the law to him about what would happen if he didn't pay the new mortgage. In other words, Provident. And here we are ... RE-EXAMINATION BY MR MENZIES Q. When you say you laid down the law, can you remember what you said? A. Yes. I said to him that he has to pay every month, and if he doesn't, he will lose his house. 'Do you understand' Q. Did you ask him whether he understood. A. Yes, yes. Q. His response? A. He understood."

The remaining question is whether Mr and Mrs Naumovski sufficiently understood the advice being proffered in English by Mr Price to enable them to understand the nature and effect of the Provident loan and mortgage transaction.

I am satisfied that they did. As I have earlier concluded, their understanding of the Provident transaction was not radically different from the true nature and effect of it. Further, I accept Mr Price's evidence, that he as a solicitor experienced in dealing with people for whom English was not their first language, formed the opinion that his advice had been understood.

Finally, as I have earlier indicated, I accept that the accounts of Mr Naumovski in his two affidavits in the Lawteal proceedings accurately reflect his understanding of the position he was then in, and the nature and effect of the Provident transaction.

I am not satisfied that the legal advice proffered was inadequate, or not able to be understood. Whilst they may not have been able to read or understand the contents of, and concepts expressed in, the documents, I am nevertheless satisfied that the Naumovskis received advice about, and understood the true nature and effect of the Provident transaction, and the documents which created obligations for them.

The Naumovskis were not receiving any personal benefit from the transaction. The financial risks which they were taking were not secured in any way by an agreement with their daughter, Suzana, or her husband, to attend to the financial obligations, or to otherwise indemnify them.

So far as the evidence reveals, the Naumovskis receiving none of the money which was borrowed in any of the loans. There is no evidence that they were to be paid any money by either of Mr and Mrs Nedanovski to engage in the transaction.

The Contracts Review Act claim comes to be assessed on the basis that the Naumovskis, who are aged pensioners, largely uneducated with a limited capacity to speak English, borrowed a reasonably large sum of money on the security of their home which was their only asset of substance, for the purpose of providing financial assistance to their daughter in respect of her fish and chip shop, in which business the Naumovskis had no financial interest, nor were they to be financially rewarded for undertaking the transaction.

They did not receive any financial benefit for doing what they did, but they entered into the transaction having received advice from two lawyers which ensured that they were sufficiently aware of the nature and effect of the transaction.

It may be relevant in assessing all of the facts and circumstances upon which the Contracts Review Act claim is based to identify what the lender knew, what enquiries, if any, the lender made and whether in approving the loan, it followed its own guidelines and prudential practice Manual.

The loan made by Provident required little, if any, evidence of the financial capacity of the Naumovskis to repay the capital, or else to pay the monthly interest. At the time of the application for the loan, Provident was told that the Naumovskis were both aged 66, had no assets other than the Wallsend property, its contents and a low value motor vehicle. It was told that the loan was for business and/or investment purposes.

As well, Provident received a Self Certified Income Declaration in which the Naumovskis stated that they were aware that the monthly loan repayments were approximately $3,852 and that the Naumovskis were of the opinion that they could repay the loan in accordance with its terms and without hardship.

It is not relevant to any issue of Provident's knowledge whether or not these documents were actually signed by the Naumovskis. Provident were entitled to act on the basis that the documents had been correctly signed.

Provident received two further Self Certified Income Declarations. One in December, and one dated in February 2007. The terms of these declarations were identical to the initial one received in November, together with the application for a loan.

According to the evidence of Mr O'Sullivan, the Managing Director of Provident, in addition to the self certification form, Provident undertook a credit reference check and examined, so far as it could, the borrower's history with respect to the previous mortgage. Because, in this case, the credit reference check was "clear", and the previous borrowing history showed only a single default of one month's interest, Provident was sufficiently satisfied as to the capacity of the Naumovskis to repay the loan.

Provident had no information, or documentary evidence, which told it what the income of the Naumovskis actually was. It did not seek such information. The position with respect to this minimal information which Provident had about the capacity of the Naumovskis to repay the loan from the earnings and assets, other than their home, is in complete contrast to the information which it sought and obtained about the security property.

The information which Provident sought and obtained about the security property was:

I conclude with respect to this loan, having regard to Provident's conduct and the information which it required to be provided, that:

The failure of Provident to require any evidence of income or employment was part of their standard process for a "light and easy residential loan", which was what was provided to the Naumovskis.

The only apparent non-compliance with the light and easy loan requirements and Provident's lending manual, was that the Naumovskis both exceeded by a year or so, the maximum age for borrowers. In the context of this case, I do not regard this as counting in any way adversely against Provident.

I am well satisfied that the loan falls within the rubric of "asset lending" as that was described by Basten JA in Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41 at [128]. However, a loan of such a description does not necessary result in a conclusion that the loan was thereby unjust.

Provident's conduct was not otherwise significantly criticised or the subject of adverse submission by parties opposing its interests.

Counsel for the Naumovskis submitted that because the Naumovskis had signed a declaration that the monies were to be used for business purposes, Provident ought to have undertaken an enquiry into what their purpose was. I do not see any merit in this criticism in this case. The substantial purpose of the "business purpose declaration" from the perspective of Provident, was too exclude the provisions of the Consumer Credit Code. It did not require any further investigation by Provident.

As the evidence of Mr O'Sullivan made clear, because this was a "low doc loan", the interest rate charged reflected the lack of documentation supplied and verification required. He explained that depending upon the particular financial environment, interest rates for low doc loans could be between one per cent and five per cent higher than loans which required more thorough documentation and verification.

In other words, the risks associated with the absence of checking were taken into consideration in the fixing of the interest rate.

In my opinion, Provident did not know of, nor ought it to have known of, the various facts, matters and circumstances now relied upon by Mr and Mrs Naumovski in support of their claim for relief, other than those obvious matters to which I have drawn attention. Provident was in the circumstances "innocent" of the cause of the alleged unjustness.

The first question to be considered is whether the contract was unjust in the circumstances in which it was made, having regard to the factors set out in s 9 of the Contracts Review Act.

In answering this question, it is convenient to first note that s 9 of the Contracts Review Act requires the Court to have regard to "... the public interest and to all of the circumstances of the case ...".

Latham CJ in Wilton v Farnworth [1948] HCA 20; (1948) 76 CLR 646 at 649, emphasised the importance of adherence to the fundamental principle of contract law, namely, that a person is bound by the terms of the contract which they sign. He warned: "Any weakening of these principles would make chaos of everyday business transactions."

This reflects the general policy of the law, namely, that people should honour their contracts because to do so is just: Nguyen v Taylor (1992) 27 NSWLR 48 at [70]. As Gleeson CJ said in Baltic Shipping v Dillon (1991) 22 NSWLR 1 at 9: "The general policy of the law is that people should honour their contracts. That policy forms part of our idea of what it just".

This policy reflects the public interest because it is in the public interest to hold parties to their contract: Fisher v Marin [2007] NSWSC 1411 at [110] per Patten AJ.

The facts have already been sufficiently exposed in this judgment so far to enable them to be referred to here, in short form.

The Naumovskis were vulnerable because of their age, lack of education and lack of commercial experience, their difficulties with the English language and because it was their daughter who had asked them for help, and clearly their familial relationship inclined them so to do.

The loan transaction from the perspective of the Naumovskis was financially unwise and imprudent. They took on a debt which they could never hope to repay without selling their home, if their daughter did not repay it.

On the other hand, there was a period of five months or so between when they signed the loan documents in front of Mr Anthony and when the loan transaction was finally completed. During that period it was apparent to the Naumovskis that:

However, some weight has to be given to the circumstances in which they found themselves. Lawteal had obtained judgment for possession of their home. Unless the Lawteal and Hamafam loans were repaid, the Naumovskis would have lost their home. Whilst in theory, as I have said, they had a choice as to whether to enter into the Provident transaction, as a practical matter, if they wanted retain their home, they had no real choice.

The question then is whether in all of the circumstances to which I have made reference throughout this judgment, and in particular to the matters mentioned above, and including the public interest, I am persuaded that the loan transaction with Provident was unjust at the time it was made.

I am not satisfied that it was unjust. It is in the public interest that signed contracts are enforced. Whilst the Naumovskis were vulnerable and disadvantaged in the ways described, it is apparent that they knew what they were doing, and the nature and effect of the Provident loan transaction. To the extent that it was a financially unwise agreement, that was apparent to them. They were content to rely upon their daughter's promises to repay the financial obligations created by the Provident loan.

I conclude that they must have decided that their daughter's financial position merited their support, and they consciously gave that support. In short, I have concluded that this was a case of parents consciously providing financial support to their daughter who they knew was in some financial difficulty, at least to the extent that she required the loan funds to assist her business. They did so willingly and knowing of the potential consequences even if they had the belief, or perhaps hope, that those consequences would not happen.

Whilst I accept that the transaction was financially unwise, I do not think that factor is sufficient in the face of the matters to which I have just referred, to constitute the loan as unjust at the time it was made.

It is also necessary to note in respect of the facts, matters and circumstances to which I have had regard, that Provident had nothing to do with any of these features. True it is that it failed to make enquiries in a way which other more prudent lenders may have done. However, the particular loan product which Provident was making available, did not require them to do that, and they took the view that their risk was protected by the interest rate which they charged. That is entirely acceptable commercial practice.

It is also to be remembered that given the position of the Naumovskis as pensioners with limited financial repayment capacity and capital assets, the only loan which they were likely to obtain to assist their daughter was one of the "low doc" varieties of loans which were available. In those circumstances the criticism of Provident's failure to investigate does not carry much weight, in my assessment of all of the factors.

It follows from the conclusion that it was not unjust to have entered into the contract at the time it was made, that it is not unjust now for the loan obligations to be enforced.

Accordingly, I am not prepared to uphold the claim by the Naumovskis for relief under the Contracts Review Act.

For the same reasons as have persuaded me that the loan transaction was not unjust in accordance with the Contracts Review Act, I am not persuaded that the transaction was unconscionable within the meaning of the general law, and I would not uphold the Naumovskis' claim to that effect.

In summary, I am satisfied that Provident has succeeded on its claim against the Naumovskis in accordance with its Statement of Claim.

I am not satisfied that the Naumovskis have made out their defences and claims for relief to Provident's claim, nor those of the cross-claim against Provident.

Although it will be a matter for the parties to bring in short minutes of order, those orders ought provide for a judgment in favour of Provident for possession of the Wallsend property. Provident did not in its Statement of Claim seek a monetary judgment against the Naumovskis, although my conclusions of fact would enable such a judgment to be entered.

Whilst I will hear any argument about costs of the proceedings which the parties wish to advance, I can see no reason on the material presently before me, why an order for costs ought not be made in favour of Provident against the Naumovskis as provided for in r 42.1 of the Uniform Civil Procedure Rules 2005 (the UCPR).

It is necessary now to consider the balance of the claims. Both Provident and the Naumovskis make a claim against Attwaters, with respect to the acts (or omissions) of Mr Anthony. It is convenient to consider these claims next.

The claim of Provident against Attwaters is pleaded as being only an alternative claim to that made by Provident against the Naumovskis. It is not pleaded as an additional claim. Accordingly, as Provident has entirely succeeded against the Naumovskis, its claim against Attwaters does not arise for consideration. Orders must therefore be made entering a judgment for Attwaters on Provident's claim.

However, in the event that I have fallen into error with the respect to the claim of Provident against the Naumovskis, it is appropriate for me to proceed to determine Provident's claim against Attwaters. In so doing, I see no need to deal with it as comprehensively as I otherwise might.

Provident's claim against Attwaters comprises two legal causes of action which are each pleaded in the alternative, and a third cause of action which is an additional one.

The first cause of action is an allegation in negligence, namely, that Attwaters owed Provident a duty not to cause it economic loss in the course of providing independent legal advice to the Naumovskis to whom Provident was making a loan. The allegations of breach of duty are in summary:

they had been retained by the Naumovskis;

the Naumovskis had been given legal advice as to the effect of the transaction; and

the Naumovskis understood the nature and effect of the documents which were signed;

The making of the negligent misstatements were relied upon as constituting the second cause of action, namely one arising under the Fair Trading Act.

As well, the failure of Attwaters to have in place a retainer is relied upon as giving rise to a third cause of action resulting in a claim for damages for a breach of warranty of authority.

The damages which are claimed are described in Provident's submissions as "no transaction damages". By that expression, I understood them to mean that, but for Attwaters' conduct (whether by act or omission) Provident would not have entered into the loan and accordingly would not have suffered any loss.

The loss is crystallised, only in the event of the dismissal of Provident's claim against the Naumovskis, as being the whole of the monies lent to the Naumovskis and all outstanding interest thereon, as well as the costs of enforcement which, it is said, were reasonably incurred.

There are very real difficulties with respect to the negligence claim by Provident against Attwaters. I am not at all persuaded that in the circumstances of the claim, Attwaters owed Provident any duty of care at all, let alone the one pleaded. Whilst it can be accepted that if Attwaters were negligent in and about the discharge of their retainer with the Naumovskis, assuming one existed, economic loss may ensue to Provident, such foreseeability of loss alone is not sufficient to give rise to any duty of care on Attwaters to Provident.

Foreseeability of economic loss is a necessary but not sufficient condition for the existence of a duty of care: Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at [70] per McHugh J.

Here, Provident submits that the additional feature was that it was "vulnerable" as that term is used in the law of negligence. It says that it was vulnerable because necessarily, the giving of expert legal advice, which is independent of it, must be done by a person with whom it has no relationship and that therefore the content and effectiveness of the legal advice is entirely beyond Provident's capacity to control.

As McHugh J said in Perre at [129]: "The degree and nature of vulnerability sufficient to found a duty of care will no doubt vary from category to category and from case to case. Although each category will have to formulate a particular standard, the ultimate question will be one of fact. The defendant's control of the plaintiff's right, interest or expectation will be an important test for vulnerability."

Provident was not vulnerable in the sense understood by the law of negligence. It was a business engaged in lending money. That is a business with well-recognised risks. One such risk is that the loan will be unrecoverable because it is legally unenforceable. The likelihood of that occurring is able to be addressed in many ways, including ways wholly within Provident's control, such as by requiring evidence to be obtained in a meeting between the borrowers and Provident's staff or its own contracted agents to establish the capacity of the borrowers to understand the nature and effect of the transaction and the financial capacity of the borrowers to repay the loan.

Another way may be to require, in addition to requiring that the borrowers obtain their own legal advice, the borrower to attend at Provident's offices, or at their lawyers office, for that lawyer to give an explanation as to the nature and effect of the transaction in addition to the borrower's own lawyers. There may be many other ways, but these come readily to mind.

The reality is that Provident chose to effect this loan with a minimum of documentation, investigation and formality. It addressed the risk by pricing its loan accordingly. That is, it charged a higher interest rate than would otherwise be the case to protect itself from the well recognised risks of such loans.

It was not a vulnerable party. There is no reason to impose on Attwaters any duty of care to Provident to protect it from economic loss.

As well, given that Attwaters was retained by, and owed a duty to, the Naumovskis on the transaction, namely to the parties whose interests were opposed to Provident's interests, this is a powerful reason not to impose a duty on Attwaters of the kind that Provident claims.

I conclude that Attwaters did not owe any common law duty to Provident to protect it from economic loss arising from entry into the transaction.

But I am not satisfied, that even if a duty existed, Attwaters were in breach of it. Provident pleaded that Attwaters made negligent misstatements, or else failed to warn or inform Provident of the correct information. It is necessary to examine each of the allegedly misleading statements.

The first is that Attwaters were retained to act for the Naumovskis and hence were able to represent their interests in the transaction with Provident. This allegation depends on whether the Naumovskis had a sufficient understanding as to what was going on and why they were seeing Mr Anthony, and whether Suzana, their daughter, was acting on their behalf when she retained Attwaters.

Because I am not satisfied that the Naumovskis have established that they were defrauded by Suzana Nedanovski, and I am satisfied that they had a sufficient understanding as to the nature and effect of the Provident transaction into which they were entering, it follows that they knew that they were seeing Mr Anthony to obtain his advice, and for the purpose of satisfying Provident's requirements for the loan to proceed. I am satisfied that they retained Mr Anthony, and hence Attwaters, and over a period of time, ratified that retainer. They received his correspondence after the initial conference, and he received, albeit through Mrs Nedanovski, appropriate responses.

Mr Anthony, and Attwaters, did not mislead Provident, or misstate the true position by conveying, in whatever words were used, the proposition that Mr Anthony was the Naumovskis solicitor and was authorised to act for them.

Next, it was said by Provident that Mr Anthony had negligently misstated the fact that he had identified the Naumovskis and that their declarations were properly executed. There is no doubt on the evidence that Mr Anthony identified Mr and Mrs Naumovski. There is no doubt that they attended at his office. I accept Mr Anthony's account that this is what happened. He is not challenged on this. He also said that the declarations were taken in front of him and executed by the Naumovskis in his presence. I accept his evidence on this issue. Again, he was not challenged. There is no convincing evidence to the contrary. This allegation of misstatement is not proved.

The other significant particular of negligence deals with the issue of adequate interpretation. Provident argues that use of Suzana Nedanovski as an interpreter was inadequate and thus negligent in the circumstances. It submits that I ought find that an independent, accredited interpreter ought to have been used.

In so submitting, Provident relies upon the fact that the entry by the Naumovskis into the Provident loan had the result that Mrs Nedanovski was discharged as a guarantor, which all parties accepted is what occurred. It follows, so Provident submits, that Mrs Nedanovski's interests and the Naumovskis' interests were in conflict and that she should not have been used as an interpreter.

As well, Provident relies upon the expert opinion of Mr Bluth, solicitor, that an independent interpreter ought to have been retained, and that the failure of Mr Anthony in this case was negligent.

It is true that Mrs Nedanovski was no longer continuing as a guarantor with respect to the Provident loan, as she had been for the second Hamafam loan and the Lawteal loan. I am not satisfied that this was a change of any real substance. There are two principal reasons for this conclusion. First, by the time that the Provident loan was entered into, it was apparent that Mrs Nedanovski's financial position was dire. Even if the guarantee had been called upon, it was unsecured and she could not have satisfied it. She was in no financial position to have paid any money, thereby preventing Lawteal and Hamafam from taking possession of her parents' home. Her absence as a guarantor of the Provident loan did not, in any way, act to substantially disadvantage Mr and Mrs Naumovski, because that was the position at the time the Provident loan was entered into.

Secondly, it is clear that all of the monies raised by the loans secured over Mr and Mrs Naumovski's home, were either given to Mrs Nedanovski for use in her business enterprise, or else used to refinance the original loan which was used for that purpose. In other words, Mr and Mrs Naumovski were entitled to proceed to recover the monies which had been loaned to Mrs Nedanovski, whether she was a guarantor or not. Thus I conclude that there was no change to the substantive position between the Naumovskis and their daughter by her ceasing to be a guarantor.

In this circumstance, there was no need for Mr Anthony to have refrained from using Mrs Nedanovski as an interpreter, at least, whilst there was no reason for him to think that what he was saying was not being translated accurately.

The two expert solicitors did not agree on whether using a family member to interpret a solicitor's conference during which advice was being provided about a financial transaction, was necessarily negligent. I do not accept the proposition that there can be any general rule that regardless of the circumstances, a solicitor who provides advice to clients who are unable to speak or comprehend English, or else who only have a limited capacity so to do, without obtaining the services of an independent, and no doubt competent, interpreter is thereby negligent.

There is no legal authority which supports such a proposition, nor could the Court readily embrace such a proposition in the absence of convincing evidence and authority. The costs of such a proposition to the community is likely to be enormous. The effect it would have on ready and speedy access to justice would be significant, if such a blanket standard was to be imposed.

In the circumstances of this case, Mr Anthony was not negligent in using Mrs Nedanovski as an interpreter because she, in fact, interpreted sufficiently the nature and effect of the transaction and, as importantly, Mr Anthony had no reason to suspect that Mr and Mrs Naumovski were not receiving an adequate translation.

In all of the circumstances, Provident has not established any negligent conduct by Attwaters. That is, put in another way, upon the assumption that Attwaters owed to Provident a duty to take reasonable care to avoid causing economic it loss, there has not been a breach of that duty.

I record that the parties, for reasons which are unclear, argued the case without attention to the requirements of the Civil Liability Act, and in particular, the provisions of s 5B. I have elsewhere described in some detail the nature of, and elements in proof of, the requirements of the Civil Liability Act: Benic v State of New South Wales [2010] NSWSC 1039 at [70] to [105]. There is no need to repeat what is said there. But, had the submissions have been made by reference to the Civil Liability Act requirements, I would have reached the same conclusion as that which I have just expressed, because my conclusion is that a reasonable person in the position of Mr Anthony (and Attwaters) would not have taken the precaution of only using an independent interpreter and refraining from using Mrs Nedanovski as an interpreter.

My factual conclusions also have the result that there has been no misleading and deceptive conduct contrary to s 42 of the Fair Trading Act by Attwaters, nor have they breached their warranty of authority.

It follows that the whole of Provident's claim against Attwaters must fail. The short minutes of order should include a judgment for Mr Anthony and Attwaters on the Provident claim and, subject to any contrary submissions, an order that Provident pay Mr Anthony and Attwaters' costs of the claim against them.

Provident also filed a Sixth Cross-claim against Mr and Mrs Naumovski.

The cross-claim was made against the possibility that Mr and Mrs Naumovski succeeded in having the loan transaction set aside. It claimed an entitlement to restitution of the whole of the monies advanced because the advance was made on the basis of a mistake, and the retention of the benefit of the advance by the Naumovskis constituted an "unjust retention of the benefit flowing from the discharge ... under the Hamafam ... and Lawteal ... mortgages ...".

In light of the fact that Provident has succeeded on its claim, the issues in this cross-claim do not arise for determination.

The short minutes of order should make provision for the dismissal of this cross-claim. Costs ought be dealt with, subject to any contrary submissions, in the same way as on the principal proceedings brought by Provident.

It is now necessary to consider the other claims made by Mr and Mrs Naumovski. These are the second cross-claim against Attwaters, the third cross-claim against the Registrar General (NSW), and the seventh cross-claim against Mr Steven Harvey.

Mr and Mrs Naumovski claim that Attwaters were negligent, and in breach of s 42 of the Fair Trading Act, with respect to such advice as was given and their acts or omissions with respect to both of the occasions upon which loan transactions and mortgages were entered into in 2006, and then again in 2007.

It is to be remembered that Mr Anthony acted for the Naumovskis with respect to the second Hamafam loan and the Lawteal loan in 2006, as well as the Provident loan in 2007.

The essential factual basis for the allegations of negligence was that the Naumovskis did not ever instruct Attwaters to act for them, that Suzana their daughter was perpetrating a fraud upon them, that they did not know the nature and effect of the documents which they were signing, and because there was no independent interpreter present, through the negligence of Mr Anthony, they did not receive an accurate understanding of what it was that they were engaged in.

Central also to the allegations of negligence, is that there was a conflict of interest between Mr and Mrs Naumovski on the one hand, and their daughter Suzana on the other, which ought to have led to Suzana having no involvement whatsoever.

Ultimately, the Naumovskis contend that through the negligent conduct of Mr Anthony, they are bound to a contract which they did not understand, and that they did not understand the nature and effect of the documents which they signed.

The factual findings which I have already made, and the conclusions which I have already drawn, mean that this claim must fail. Those relevant findings ought be repeated:

In light of those findings, the case against Attwaters for the 2007 loans and transactions with Provident must fail.

In 2006, on two occasions, Mr Anthony gave advice to Mr and Mrs Naumovski about the second Hamafam loan and the Lawteal loan. In so doing, he did almost the same as he did in 2007. He used Mrs Nedanovski to interpret for him. The advice he gave in English was, if anything, more thorough than that which he gave in 2007. It was sufficient to enable Mr and Mrs Naumovski to understand the nature and effect of the loan transactions provided that it was sufficiently interpreted.

It is the Naumovskis' claim that they were given no explanation at all in Macedonian because they were being lied to, and defrauded by, their daughter Suzana. I have already found that I cannot accept this evidence in the absence of an independent corroboration. I am satisfied that the position in 2006 so far as the interpretation of Mr Anthony's advice was concerned, was no different from that in 2007, and that the Naumovskis did in fact understand what was happening and, knowing that, they entered into the loan transaction because they wanted to financially support their daughter.

They did not ever believe that their home would in fact actually be repossessed, but they understood that it was a possibility which may eventuate, particularly if their daughter was unsuccessful.

I conclude that they have not made out their claims against Attwaters for either the 2006 or 2007 retainers. Mr Anthony and Attwaters are entitled to judgment in their favour on the second cross-claim.

The short minutes of order should make provision for such a judgment and subject to any contrary submissions, the Naumovskis should pay Attwaters' (and Mr Anthony's) costs of the second cross-claim.

The third cross-claim is made by Mr and Mrs Naumovski against the Registrar General (NSW). It seeks declarations and orders which have the effect of requiring the Registrar General to pay compensation to Mr and Mrs Naumovski from the Torrens Assurance Fund "... as a consequence of the fraud in accordance with s 129(1) of the Real Property Act 1900".

The Torrens Assurance Fund was established by s 134 of the Real Property Act 1900. Its principal purpose is to meet any proper claim for compensation payable under or in connection with Pt 14 of the Real Property Act.

Section 129 of the Real Property Act sets out the circumstances in which compensation is payable. It provides relevantly for the claim of Mr and Mrs Naumovski that: "(1) Any person who suffers loss or damage as a result of the operation of this Act, in respect of any land, whether loss or damage arises from: (a) any act of omission of the Registrar General in the execution or performance of his or her functions or duties under this Act in relation to land; or (b) the registration ... of some other person as proprietor of the land, or of any estate or interest in the land; or ... (e) the person having been deprived the land, or any estate or interest in the land, as a consequence of fraud; ... is entitled to payment of compensation from the Torrens Assurance Fund."

Mr and Mrs Naumovskis' pleading, although it calls up each of these subsections as possible legal bases for their entitlement to compensation, relies upon the underlying factual assertion that as and from January 2005, their execution of mortgage documents with respect to their land in favour of Hamafam Pty Ltd and Hely Nominees Pty Ltd, then Hamafam Pty Ltd and Lawteal Seconds Pty Ltd, and finally Provident Capital Ltd, were all obtained as a result of the fraud of Suzana Nedanovski.

The Registrar General did not admit the existence of the fraud alleged. I have already found that I do not believe either of the Naumovskis or Mrs Nedanovski with respect to their evidence about the existence of the fraud. On the contrary, I have found that so far as the Provident transaction was concerned, they were aware of the nature of the transaction and the effect of it.

Against the background of that evidentiary finding, having regard to what Mr Anthony advised in 2006, and what Mr Naumovski said in his affidavits of May and June 2007, together with the absence of any defence being argued to the Lawteal claim for possession in 2007, which raised the issue of fraud, I am well satisfied that there was no fraud being perpetrated by Suzana in 2006 when the second Hamafam loan and the Lawteal loan was being entered into.

However, it is possible that the position in December 2004, when the Naumovskis entered into the first Hamafam loan (and mortgage) and the Hely Nominees loan (and mortgage) may be different, and hence this merits separate consideration.

In December 2004, it is clear that Suzana arrange for her parents to attend upon Mr Harvey for advice with respect to the initial loan and mortgages. I accept Mr Harvey's evidence that he was retained to provide legal advice about the nature and effect of the documents which were a part of the transaction, and hence about the overall nature and effect of the transaction.

The Naumovskis had not met Mr Harvey before, and this was the first loan and mortgage transaction into which they were entering which solely favoured a third party and which put their home at risk.

There is a significant disagreement between the evidence of Mr Harvey on the one hand, and the evidence of Mr and Mrs Naumovski and Mrs Nedanovski on the other, about what happened during the conference on 23 December 2004. The resolution of this disagreement is particularly important.

The Naumovskis' case is that at all times during the conference with Mr Harvey in his office, Suzana was present with them and was speaking in English to Mr Harvey and was then telling them, in Macedonian, to sign the various documents using the excuse that they were witnesses to her signature, and failing to truthfully inform them of the effect of the documents, or to translate Mr Harvey's advice.

This version of these events is sought to be corroborated, or at least supported, by the version of what occurred at the office of Woods Roberts, when Mr Naumovski and Mrs Nedanovski attended and collected the Certificate of Title which was held in the safe deposit facilities of that firm, namely that Mr Naumovski was asked to attend to again execute his will, because the original execution was deficient.

I have already explained that I do not accept the evidence of Mr Naumovski and Mrs Nedanovski as to what occurred at the offices of Woods Roberts. On the contrary, I am satisfied that Mr Naumovski, with Mrs Naumovski's consent, attended there to collect their Certificate of Title to give it to their daughter to be used by her for the initial loan transaction. Their evidence about this event does not provide any support for, or corroboration of, their evidence as to what occurred during Mr Harvey's conference. In fact, it stands contrary to their evidence.

On the other hand, Mr Harvey's evidence as to what occurred during the conference, at least with respect to who was in his office during the conference, is corroborated by his wife Susan Harvey, who was working at that time as his assistant. She gave evidence that only Mr and Mrs Naumovski went into Mr Harvey's office, and that Mrs Nedanovski did not go into his office with them.

Regrettably, there are no contemporaneous notes of the conference which may have assisted with the resolution of this evidentiary disagreement.

There is a letter which Mr Harvey sent to the lenders in January 2005, which records that he had "spoken" to the Naumovskis. This tends to support Mr Harvey's version, but it is not persuasive corroboration.

The evidence of both Mr and Mrs Harvey is subject to the appropriate criticism that they were first asked to remember these events many years after they had occurred, and with the exception of a single diary entry recording the fact of the conference, neither were able to refresh their recollection from any contemporaneous records. On the other hand, their evidence was apparently credible and did not vary significantly in the course of any challenge to it.

The Naumovskis' version, which is essentially of a short conference where they signed documents and were provided with no real explanation either in English, or via Suzana in Macedonian, is, regardless of their lack of credibility as witnesses, inherently an improbable one. On everyone's version, a formal conference was arranged and it took place. Its purpose was for the documents to be checked and signed. Time was allocated by Mr Harvey for the conference. He did not have any competing commitments. It is not said that he was interrupted by any telephone calls, or by other clients attending, perhaps without appointment, and seeking his assistance.

In those circumstances, in my view, it is most improbable that an experienced solicitor, as Mr Harvey undoubtedly was, with a good reputation amongst his regional colleagues, as Mr Anthony deposed to, would conduct himself in the way which the Naumovskis allege, which would effectively amount to a complete abrogation of his professional duties and obligations. Mr Harvey did not seem to me to be the sort of solicitor who would engage in conduct of that kind.

The conclusion which I have reached upon the probabilities of the facts of what occurred in 2004 and 2005, is that the Naumovskis have not proved the existence of any fraud surrounding their entry into the first Hamafam loan and the Hely Nominees loan. This conclusion is made stronger by the fact that neither the Naumovskis and Mrs Nedanovski were witnesses whose credibility I have accepted in the absence of corroboration.

In the result, I am not satisfied that the Naumovskis have proved that any pleaded loss and damage has arisen, in the circumstances of the initial loans "... as a consequence of a fraud".

Accordingly, the third cross-claim brought by the Naumovskis against the Registrar General (NSW) ought be dismissed. I can see no reason why an order for costs ought not be made against the Naumovskis.

Since short minutes of order are to be brought in, provision should be made for the disposition of the cross-claim in favour of the Registrar General. As I have said, it seems to me that costs ought follow the event, but the short minutes of order should make provision, if necessary, for there to be any contrary argument with respect to costs, if that is sought to be raised.

The fourth and fifth cross-claims were brought by the Registrar General (NSW) against respectively Mrs Nedanovski (fourth cross-claim) and Provident Capital Ltd (fifth cross-claim).

In light of my findings about the third cross-claim, neither of the claims made in these cross-claims are sustainable, and any issues arising need not be dealt with.

Short minutes of order should make provision for the disposition of these cross-claims, including any orders made necessary by the entry of default judgment against Mrs Nedanovski on the fourth cross-claim.

Although I will hear argument if necessary, I cannot see that these cross claims have, except for the drafting and filing of pleadings, incurred any additional legal costs over and above the other involvement of the parties. In the absence of argument, I would have thought that the appropriate order would be that each party pay its own costs of the cross claim.

By the seventh cross claim, Mr and Mrs Naumovski claim damages from Mr Harvey because of his negligence in the discharge of a duty of care owed to them in the course of the first loan transaction in 2004 and 2005.

Mr Harvey:

On the facts of what happened, Mr Harvey's admission that he owed a duty of care was correctly made.

Any consideration of breach of that duty needs, in light of my previous finding, to proceed in the context that I accept the version of events given by Mr Harvey as to what occurred during the conference in December 2004.

Again, regrettably, neither of the parties when dealing with the issues of breach of duty and causation of loss, turned their attention to the provisions of either s 5B or s 5D of the Civil Liability Act.

On Mr Harvey's version of the events of 24 December 2004, he held a conference with Mr and Mrs Naumovski without the assistance of any interpreter at all. The whole of the conference was conducted by him in the English language. He does not suggest that he moderated his use of the English language in any way to take account of the Naumovskis' limited capacity to understand English. Nor does he suggest that he tested their understanding of what he was saying during the course of the conference by asking them to repeat to him the substance or effect of his explanation.

The circumstances and context in which the conference was conducted was very different from the conference conducted in English about two and a half years later by Mr Price, with the consequence that I am not prepared to conclude with respect to the 2004 conference with Mr Harvey, as I have done with Mr Price, that Mr and Mrs Naumovski knew and understood the nature and effect of the initial loan transaction.

There are a number of reasons for this. First, the conference with Mr Harvey was in respect of a new loan being taken out by Mr and Mrs Naumovski who had no previous experience of a loan or mortgage in support of third party, whereas by the time Mr Price had his conference, there had been three previous conferences with Mr Anthony, including one only a few months before, where adequate explanation had been provide and that explanation had been interpreted from English into Macedonian.

Secondly, the legal context was very different. By the time of Mr Price's conference, default had occurred on the Lawteal loan. Proceedings had been commenced and several attempts to refinance the loans were underway. The Wallsend property had been visited by a valuer from Provident, and no doubt, amongst the Naumovskis and Mrs Nedanovski at least, there had been discussion about what had been happening. In other words, the context provided a much more familiar environment in which the advice delivered by Mr Price was being received. There was no such context at the time of Mr Harvey's conference.

Thirdly, Mr Price spoke using English terms that were far simpler and easier for Mr and Mrs Naumovski to understand than the words and expressions apparently used by Mr Harvey.

Having regard to these differences, I am not satisfied that any useful comparison can be drawn between what occurred at Mr Harvey's conference and with what occurred at Mr Price's conference. In other words, it does not necessarily follow because as a result of the advice delivered by Mr Price in English, that the Naumovskis had an adequate understanding of the Provident transaction, that they were capable of gaining an adequate understanding of the initial loan transaction from Mr Harvey, who also spoke to them in English.

To draw such a conclusion about the Naumovskis' knowledge and understanding, one has to concentrate on the evidence of Mr Harvey as to what occurred and what he said during the course of the conference in December 2004.

The principal features of the two initial loans (the first Hamafam loan and the Hely Nominees loan) which needed to be communicated to and apparently understood by Mr and Mrs Naumovski, were:

Accepting Mr Harvey's evidence as to what he said and did, I cannot be satisfied that, without the use of any interpreter whatsoever, Mr Harvey was able to communicate adequately each of these features to Mr and Mrs Naumovski. Their capacity to understand complex concepts in English, would not have been sufficient for them to have understood and appreciated what Mr Harvey was saying to them.

I have concluded that he was negligent, and in breach of his duty, for not using an accurate and competent interpreter for the purpose of his transaction. That does not mean that he was not able to use Mrs Nedanovski as an interpreter. But he could only discharge his duty in the circumstances of this case by using a competent interpreter.

Putting the finding in terms of s 5B of the Civil Liability Act, Mr Harvey did not do all that a reasonable person in his position ought to have done.

However, a very real question arises as to whether there has been any loss to the Naumovskis caused by Mr Harvey's negligent conduct.

The loan transactions which were entered into in 2005, namely the first Hamafam loan and the Hely Nominees loan, were discharged in their entirety and completely repaid by the second Hamafam loan and the Lawteal loan. The mortgages which secured those loans were discharged and new mortgages for a higher principal sum were entered into. The transaction was completed and finished, and nothing remained outstanding.

The current loss that the Naumovskis are suffering relates to an entirely separate transaction. There is no direct connection between the loan transactions with which Mr Harvey was concerned, and the Provident loan transaction.

It is to be remembered that s 5D of the Civil Liability Act requires the application of the "but for" test of causation. Applying it, I am not satisfied that but for the negligence of Mr Harvey, Mrs and Mrs Naumovski would not have suffered the losses which they now face.

If nothing else, the deliberate nature of the Naumovskis own conduct in entering into the Provident transaction having regard to the advice of Mr Anthony and Mr Price, and the contents of the affidavits of Mr Naumovski, is sufficient to break any "chain of causation" and to demonstrate that the conduct of Mr Harvey had nothing whatsoever to do with the Provident loan transaction.

In those circumstances, the seventh cross-claim ought be dismissed, and Mr Harvey is entitled to judgment in respect of it.

Again, the short minutes of order should make provision for any question as to costs, but I can see, on the material presently available to me, although I will receive argument to the contrary, any reason why costs ought not follow the event as provided for in r 42.1 of the UCPR.

I have now considered all of the claims. It is convenient to provide a short summary before formally pronouncing orders.

This is a case in which Provident made a loan to the Naumovskis. The Naumovskis have attempted to persuade the Court that they were the victims of a fraud perpetrated upon them by their daughter, Suzana. They have also attempted to persuade the Court that they ought be relieved from the consequences of the loan transaction by application of the Contracts Review Act or the general law.

I am not satisfied that the Naumovskis have established any of their defences and claims.

Their claims against their lawyers, being Attwaters, and their earlier lawyer, Mr Steven Harvey, have failed.

Their claim against the Registrar General for compensation from the Torrens Assurance Fund because they were defrauded has also failed.

In those circumstances, having regard to the complexity of the various orders which are possible, it is appropriate that counsel for Provident bring in short minutes of order to reflect the orders which I have made. Those short minutes should make provision as to costs.

If any party disagrees with those short minutes of order including the suggested costs orders, then, within seven days of the receipt of them, they should file a competing set of short minutes of order and any submissions in support of the orders for which they contend.

I make the following orders: