A mortgage lender has sued a solicitor for failing to identify a borrower at a mortgage sign up meeting after the borrower denied signing the documents or ever having met the solicitor at all.

Permanent Custodians sued solicitor Phillip Symonds and all three borrowers – siblings Tony, David and Charbel Geagea over a loan Tony had arranged for the June 2003 purchase of a $2.9 million development and in which he instructed Symonds to act.

The borrowers settled the lender’s claim by payment of $300k with the law firm persisting with their defence, denying all fault.

On request from broker Yes Home Loans, Symonds sent it a copy of the buy contract. Yes then made a loan application in all three names.

The loan documents were in due course sent for execution. At a meeting in Symonds’ Sydney office, signatures were purportedly affixed on behalf of Tony and David. Symonds ID’d the signers by way of drivers’ licences and witnessed their signatures. He also certified he had given them legal advice.

When Permanent demanded arrears from the siblings, David denied signing the documents or ever attending the meeting.

Tony’s denial of the presence at the meeting of an impersonator for his brother David, was disbelieved.

“His evidence is worthless. I consider him both in terms of the content of his evidence and his demeanour to have been mendacious, dissembling and deliberately untruthful.”

Because it could not be proved either way who signed as David, Permanent was held to have failed to establish on the balance of probabilities, that Symonds had incorrectly identified the signer.

Defeated on that ground, Permanent further argued the solicitor wrongly witnessed the signature of the other sibling, Charbel who, imprisoned abroad at the time, could not possibly have been present.

But the solicitor testified he refused to witness that signature which was already present on the documents when the parties turned up for the meeting, a proposition readily accepted by Justice Stephen Rothman who considered him a “witness of truth”.

“Even in circumstances where he could easily have given uncontradicted evidence, the effect of which would have been to exculpate he and his partners from liability, Mr Symonds declined to do so.”

The third prong of Permanent’s attack was a claim that the transaction description in the heading of the law firm’s correspondence – referring to all three borrowers by name – was a representation that it acted for all three when in fact they were acting for only one.

Not so ruled the court. The description was insufficient of itself to constitute a representation to the lender that he acted for them all. It was merely a description of the transaction.

Unfortunately for our hapless practitioner, he was however eventually hung on Permanent’s fourth argument relating to his disbursement authority. By signing the authorisation to the lender’s solicitors instructing how to disburse the loan funds, he had impliedly represented that he had authority on behalf of them all.

So notwithstanding Tony Geagea’s “wrongful, tortious and criminal behaviour”, judgment was entered against Symonds and his law partners for Permanent’s loss and costs of the ten day trial.

The court left open the law firm’s entitlement to itself claim against Yes Home Loans – against whom he provisionally assessed 33% responsibility because it failed to adequately ID the borrowers and represented to Permanent that Symonds acted for all three – and of course, against Tony Geagea, as the architect of the debacle.

Permanent Custodians Limited v Geagea [2014] NSWSC 562
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