Celtic Capital Pty Ltd as trustee for the Celtic Capital Trust v Ceccon
[2022] WASC 205
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: CELTIC CAPITAL PTY LTD AS TRUSTEE FOR THE CELTIC CAPITAL TRUST -v- CECCON [2022] WASC 205
CORAM: SMITH J
HEARD: 15 - 18 NOVEMBER 2021
DELIVERED : 21 JUNE 2022
FILE NO/S: CIV 1243 of 2020
BETWEEN: CELTIC CAPITAL PTY LTD AS TRUSTEE FOR THE CELTIC CAPITAL TRUST
Plaintiff
AND
CRISTINA CECCON
Defendant
CRISTINA CECCON
Plaintiff by counterclaim
CELTIC CAPITAL PTY LTD AS TRUSTEE FOR THE CELTIC CAPITAL TRUST
Defendant by counterclaim
Catchwords:
Contract - Loan agreement - Whether defendant liable to pay balance of funds outstanding - Whether signatures on the loan agreement are the defendants - Turns on own facts
Contract - Whether consideration given for the loan contract - Past consideration
Expert evidence - Forensic expert handwriting evidence considered
Legislation:
Nil
Result:
Defendant liable to pay the plaintiff balance outstanding under loan agreement entered into on 28 September 2018
Category: B
Representation:
Counsel:
| Plaintiff | : | M Howard SC & WAS Keane |
| Defendant | : | JC Yeldon |
| Plaintiff by counterclaim | : | JC Yeldon |
| Defendant by counterclaim | : | M Howard SC & WAS Keane |
Solicitors:
| Plaintiff | : | Tottle Partners |
| Defendant | : | Pacer Legal |
| Plaintiff by counterclaim | : | Pacer Legal |
| Defendant by counterclaim | : | Tottle Partners |
Cases referred to in decision:
Girgis v Poliwka [No 6] [2019] WASC 230
Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [2018] WASCA 90
Marsden v Barclays Bank plc [2016] 2 Lloyd's Rep 420
Re Gem Meat Productions Pty Ltd (in liq); Ex parte Lindquist [1960] WAR 105
Table of Contents
1.0 The action and the result
1.1 The action and the counterclaim
1.2 The issues raised in the action
1.3 The result
2.0 Background
3.0 Credit and reliability of evidence given by the lay witnesses
3.1 General principles
3.2 Cristina Ceccon
3.3 Philip Re
3.4 Jason Peterson
4.0 The events leading up to the entering into of the September 2018 Loan Agreement by Cristina Ceccon
4.1 The First Loan
4.2 The Second Loan
4.3 Reasons why the September 2018 Loan Agreement was entered into
5.0 The circumstances of entering into the September 2018 Loan Agreement
5.1 Cristina Ceccon was aware of the change of security on the Celtic loan facility in August 2018
5.2 The surrounding circumstances of the execution of the September 2018 Loan Agreement
5.3 Handwritten signatures of Cristina Ceccon on other documents
5.4 Text messages sent by Cristina Ceccon after the death of John Ceccon, and the meeting at the coffee shop on 4 August 2019
6.0 Dr Strach's expert evidence
6.1 Dr Strach's qualifications and experience
6.2 A preliminary issue - signatures on two non-market transactions forms provided to Dr Strach as authentic specimen signatures of Cristina Ceccon
6.3 Dr Strach's observations and conclusions in respect of the disputed signatures on the loan facility letter dated 24 August 2018 (the September 2018 Loan)
6.4 Should the expert opinion of Dr Strach be accepted?
7.0 Was there consideration for the September 2018 Loan Agreement?
8.0 Conclusion
SMITH J:
1.0 The action and the result
1.1 The action and the counterclaim
In the action, the plaintiff, Celtic Capital Pty Ltd as trustee for the Celtic Capital Trust (Celtic), seeks to recover from the defendant, Cristina Ceccon, the balance of funds it claims are due under a loan agreement entered into in writing on 28 September 2018 between Celtic as lender, and Cristina Ceccon, Giovanni Ceccon (known as John Ceccon and now deceased) and Nicoletta Ceccon as borrowers (September 2018 Loan Agreement).
Celtic claims against Cristina Ceccon the outstanding amount due under the September 2018 Loan Agreement, including interest at the rates prescribed by the September 2018 Loan Agreement, or alternatively damages for breach of the September 2018 Loan Agreement, including interest.
Cristina Ceccon claims that the signatures that appear on the loan facility letter for the September 2018 Loan Agreement claimed by Celtic to be hers are not hers. Thus, Cristina Ceccon denies having executed the September 2018 Loan Agreement. She seeks by counterclaim an order to discharge a mortgage on a property at 11 Canungra Road, City Beach (the City Beach property) registered as security for the loan advanced under the September 2018 Loan Agreement. The registered proprietors of the City Beach property are Cristina Ceccon and her mother, Nicoletta Ceccon.
Cristina Ceccon claims in her counterclaim that the mortgage was obtained by fraud by reason that Celtic, its servants and agents, failed to take all reasonable steps to verify her identity, or Nicoletta Ceccon's identity, and she (Cristina Ceccon) is entitled to have the mortgage discharged by operation of s 68(1) of the Transfer of Land Act 1893 (WA).
Although Celtic does not sue for a breach of the mortgage or seek possession of the City Beach property, shortly before the trial, Cristina Ceccon filed a chamber summons for leave to add Nicoletta Ceccon as the second defendant to the counterclaim and to amend her further amended defence and counterclaim dated 24 September 2021 (defence and counterclaim).
At the commencement of the trial, counsel appeared on behalf of Nicoletta Ceccon and opposed the very late joinder of Nicoletta Ceccon as a defendant to the counterclaim, on grounds of prejudice.
Following conferral between the parties and counsel for Nicoletta Ceccon, it was agreed that the counterclaim be adjourned sine die, together with the relief pleaded in the defence and counterclaim in pars A and D, and to the extent that par C of the defence and counterclaim is a claim for costs of the counterclaim.
Consequently, the trial of the action proceeded on the basis it was not necessary for the court to consider Cristina Ceccon's application to join Nicoletta Ceccon as a defendant to the counterclaim, or to consider the application to amend the defence and counterclaim.
1.2 The issues raised in the action
The central issue in dispute in the action is whether Cristina Ceccon executed the September 2018 Loan Agreement.
Not only does Cristina Ceccon claim she did not execute the agreement, she also claims she did not receive any monies from Celtic, whether under the terms of the September 2018 Loan Agreement or otherwise, and as such contends there was no consideration for the loan.
Whether Cristina Ceccon executed the September 2018 Loan Agreement turns upon an assessment of the reliability and credibility of her evidence. There is no direct evidence of any witness who saw her sign the loan facility letter dated 24 August 2018, or any other material document in these proceedings.
Celtic's case that Cristina Ceccon executed the September 2018 Loan Agreement principally relies upon:
(a)a forensic examination by a document and handwriting expert whose evidence it claims supports a finding by the court that the two signatures in issue on the original document comprising the September 2018 Loan Agreement, being a loan facility letter dated 24 August 2018, are as they purport to be. That is, they are the signatures of Cristina Ceccon in her own handwriting;
(b)admissions made by Cristina Ceccon in text messages as to her entry into the September 2018 Loan Agreement, and her liability to repay Celtic;[1] and
(c)a history of other loan agreements and transactions entered into by Cristina Ceccon together with John Ceccon and Celtic.
1.3 The result
[1] Exhibit 19.
I have found that Cristina Ceccon executed the September 2018 Loan Agreement, there was consideration for the September 2018 Loan Agreement, and Cristina Ceccon breached the express terms of this agreement by failing to pay the outstanding loan amount together with interest, when that amount fell due on 28 September 2019.
I have also found that Cristina Ceccon failed to remedy the breach, and by reason of the breach, Celtic has suffered loss and damage.
Accordingly, Celtic is entitled to the relief that it claims in its Further Amended Statement of Claim.
An order should be made that Cristina Ceccon pay Celtic the outstanding amount due under the September 2018 Loan Agreement, including interest at the rates prescribed by the September 2018 Loan Agreement.
2.0 Background
Celtic is a private funds management business established in or about 2006 which engages in lending money to investors for business purposes. Jason Peterson is the managing director of Celtic.[2]
[2] ts 115 ‑ 116.
Among other activities, Jason Peterson is a stockbroker. He is managing director of a stockbroking company named CPS Capital Group Pty Ltd (CPS). CPS holds an Australian financial services licence. He is also a director of Professional Payment Services Pty Ltd (PPS).
In the early 2000s, Jason Peterson was introduced to Cristina Ceccon's brother, John Ceccon. Jason Peterson was introduced to John Ceccon by a woman he worked with who later became John Ceccon's partner.
John Ceccon had an interest in the stock market and purchased stocks as a hobby. At the time they first met, Jason Peterson was working for a stockbroking firm, and John Ceccon became a client of the firm. As a result, Jason Peterson and John Ceccon struck up a close friendship.
After Jason Peterson established the businesses of CPS, PPS and Celtic, loans were provided to John Ceccon through these companies.[3] It appears these loans were principally for the purchase and sale of shares. Cristina Ceccon came to know Jason Peterson through her brother, John Ceccon.
[3] ts 117.
Cristina Ceccon has been a school teacher for at least 30 years. Since 2 September 2008, she has been employed by the Education Department continuously as a high school teacher. She has taught high school subjects such as English and mathematics; and career and vocational education.[4]
[4] Exhibit 13.
Celtic claims that Cristina Ceccon first became a joint borrower with John Ceccon when, on 9 September 2013, she executed a loan facility letter dated 6 September 2013 (First Loan).[5] Celtic also claims that Cristina Ceccon became a joint borrower with John Ceccon for two subsequent loan facilities, the last of which is the loan upon which it sues, the September 2018 Loan Agreement.
[5] Exhibit A, Tab 5.
Celtic claims Cristina Ceccon became bound by the second loan agreement when she executed a loan facility letter dated 19 February 2018 on 20 February 2018 (Second Loan), and she became bound by the September 2018 Loan Agreement when she executed a loan facility letter dated 24 August 2018 on or about 28 September 2018.[6]
[6] Exhibit A, Tab 66.
The terms of each of the three loan facilities were for substantial sums of over a million dollars, whereby drawdowns were, or could be, made up to the amount borrowed, and no repayment was required until the end date of each loan.
Notwithstanding there was no obligation to make regular repayments during the term of each loan, the loan statements for the First Loan and the September 2018 Loan Agreement record that funds were regularly credited to the facilities when shares were sold, and funds were drawn out when shares were purchased.
By late 2014, it appears that John Ceccon traded in shares through a company, Merlo Nominees Pty Ltd. Merlo was registered as a company on 7 October 2014. Despite the fact that it is common ground that John Ceccon traded shares through Merlo, at all material times from the date of registration of the company, Cristina Ceccon was and continues to be the sole director and shareholder of Merlo.[7]
[7] Exhibit 14.
In 2013, when Celtic made the offer of the First Loan, Cristina Ceccon was a joint registered proprietor of the property at 11 Canungra Road, City Beach together with her mother, Nicoletta Ceccon, and her brother, John Ceccon. It appears although by that time Cristina and John Ceccon's father, Ferdinando Ceccon, was deceased, his name was not removed from the title of the City Beach property as a registered proprietor until 2017.
It is clear that from at least the mid‑1990s, Cristina Ceccon and John Ceccon had shared interests in real property, and from time to time John Ceccon transferred his interest in real property to Cristina Ceccon and/or Nicoletta Ceccon.
The City Beach property was first purchased in February 1991. From 18 February 1991, Cristina Ceccon and John Ceccon, together with their parents, resided at the City Beach property and were each registered proprietors of the property. In 1993, John Ceccon moved out of the City Beach property. Cristina Ceccon continued to reside at the property with her parents. At the time of trial, Cristina Ceccon still lived at the City Beach property with Nicoletta Ceccon.
In 1994, Cristina Ceccon's parents, together with her and her brother, borrowed from Citibank Savings Ltd. The loan was secured by a mortgage and registered over the City Beach property and another property, 220 Lord Street, Perth (the Lord Street property). At the time the Citibank loan was secured, Cristina Ceccon and John Ceccon were the registered proprietors of the Lord Street property. It appears that the Lord Street property was purchased by their father in the 1950s.[8]
[8] ts 270.
On 18 June 1997, John Ceccon transferred his interest in the Lord Street property to Cristina Ceccon. On that day, the Citibank mortgage (being the mortgage also secured over the City Beach property) was partially discharged so as to release the Lord Street property, and a new mortgage to ANZ over the Lord Street property was registered.
On 27 March 2001, Cristina Ceccon became the registered proprietor of a property at 17 Latrobe Street, Yokine (the Yokine property). On that day, an ANZ mortgage over the Yokine property, and a mortgage to ANZ over the Lord Street property, were registered.
On 24 August 2009, the ANZ mortgage over the Yokine property and the second ANZ mortgage over the Lord Street property were discharged.
At the time the First Loan was entered into in 2013, Cristina Ceccon was the sole proprietor of both the Lord Street and Yokine properties, which were both unencumbered. At that time also, Cristina Ceccon, John Ceccon and Nicoletta Ceccon were registered proprietors of the City Beach property.
Celtic also claims that Cristina Ceccon was also a joint borrower of loans extended by Celtic in November 2015.[9] These loans were for a pizza business, Theo & Co. Pizzeria. Cristina and John Ceccon's father died in 2009.[10] It appeared that their father died of mesothelioma, and had at some time received a compensation payout, which money Cristina Ceccon claims she invested into the pizza business together with some of her own funds.[11] The joint borrowers of these loans were stated on the loan facility documents for these loans to be John Ceccon, Cristina Ceccon, and Theodore Kalogeracos and Elisabetta Kalogeracos. The loans were secured by a charge in favour of Celtic of all the assets and undertaking of the borrowers' rights, title and interest in the business of Theo & Co. Pizzeria Leederville Pty Ltd.
[9] Exhibit A, Tab 8.
[10] ts 212.
[11] Exhibit 19, 248 and ts 309 ‑ 310.
Celtic claims that Cristina Ceccon was a part owner of the pizza business through Merlo because Merlo owned 25% of the business.[12] The pizza business opened and operated two pizza shops. Although it is not entirely clear, it appears that the business failed not long after the death of John Ceccon when the marriage of Theodore Kalogeracos and Elisabetta Kalogeracos broke down.[13]
[12] ts 169.
[13] ts 316.
It is clear that the financial affairs of John Ceccon were from at least the mid‑2000s, at least in part, if not wholly, secured by Cristina Ceccon entering into joint obligations as borrower to various loans, and except for two loans for the pizza business,[14] she provided security for loans for funds used by her brother.
[14] Exhibit A, Tabs 8 and 11; being the loans extended by facility letters dated 1 February 2015 and 8 November 2015 to John Ceccon, Cristina Ceccon, Theodore Kalogeracos and Elisabetta Kalogeracos for the pizza business, executed on 10 November 2015. When she gave evidence, Cristina Ceccon denied signing these documents. However, it is not necessary in these proceedings to find whether the signatures on these documents are as they purport to be.
Part of the reason why this occurred is that it appears John Ceccon and Cristina Ceccon regarded their collective assets as assets of their family. Cristina Ceccon described 'the family' as herself, her brother, her mother and her brother's two daughters.[15]
[15] ts 276.
This assumption can be inferred from what Cristina Ceccon said to Jason Peterson in numerous text messages about protecting the interests of her nieces after her brother had died.[16] I also draw this inference from the fact that it is established and not in contest that John Ceccon transferred his interest in the Lord Street property to Cristina Ceccon in 1997, and in 2018 he transferred to Cristina Ceccon and Nicoletta Ceccon, his interest in the City Beach property.
[16] Exhibit 19, 9, 64, 177, 251 ‑ 252.
Further evidence that Cristina Ceccon regarded her property as property of the family is evidenced by the fact that in 2018 she agreed to provide further security for her brother over the Yokine and Lord Street properties by agreeing to enter into a loan with La Trobe Financial, through Perpetual Corporate Trust Ltd for an amount of $1,100,000. This loan and the transfer of John Ceccon's interest in the City Beach property allowed John Ceccon to be removed from the title of the City Beach property as part of a plan to provide a shield to protect him from creditors, who may have included her brother's former partner, Ms McLean (which plan Cristina Ceccon readily agreed to participate in).[17]
[17] Exhibit 19, 248.
Celtic claims that Cristina Ceccon participated in this plan by entering into the September 2018 Loan Agreement, which expressly required her to provide, as security, her interest in the City Beach property by a first registered mortgage in favour of Celtic.
John Ceccon died unexpectedly on 11 May 2019.
Despite her denials to the contrary, Cristina Ceccon entered into various loans as a joint borrower with John Ceccon, which loans she regarded as solely loans of her brother and he was responsible for all repayments.
3.0 Credit and reliability of evidence given by the lay witnesses
3.1 General principles
The most reliable indicator of a person's recollection is not what they say in court some years after events, but what they stated in documents or records of what they said and how they conducted themselves when events occurred or closer in time to when events occurred.
Contemporaneous, or near contemporaneous, documents provide more valuable and revealing information than what may be flawed attempts at recollection of those facts by witnesses, in particular, those with an interest in the outcome of the litigation.
Contemporaneous statements in the form of email communications and other records of contemporaneous communications, in light of the contemporaneous documentary record more generally, are likely to be a more accurate reflection of the underlying events than the later witness statements prepared for the purpose of the litigation at a time when false memories can intrude.[18]
[18] Girgis v Poliwka [No 6] [2019] WASC 230 [123].
Consequently, I have placed significant weight upon contemporaneous documents and upon inferences that can be properly drawn from that evidence. Where it is possible to establish objective facts from their evidence, I have assessed the written and oral testimony of each witness in light of the inherent probabilities of particular versions of events, in the context of facts I have found to be established from documentary records, including text messages sent by mobile telephone.
3.2 Cristina Ceccon
Cristina Ceccon is obviously still very distressed by the unexpected death of her brother in 2019, with whom she had a very close relationship and intermingled financial affairs with over many years. It is apparent that:
(a)Cristina Ceccon blindly trusted her brother in all financial decisions he made that bound her;
(b)she signed whatever he asked her to sign; and
(c)she did not keep any copies of any material documents that she signed.[19]
[19] Exhibit 19, 251 - 252 and 257.
Cristina Ceccon must understandably be aggrieved by the fact that it was her brother who requested and secured her agreement to be a joint borrower of more than one loan agreement for substantial amounts, leaving some of those loans unpaid at the time of his death.[20] When she gave her oral evidence, her sense of distress and grievance about these issues may in part have affected her recollection of events and the reliability of her evidence.
[20] Exhibit 19, 252.
Even making allowance for the fact that Cristina Ceccon was understandably distressed about the death of her brother and about the state of their joint business affairs, it was clear that Cristina Ceccon did not give truthful evidence about almost every material issue and matters put to her that could have been construed as damaging to her case.
When cross‑examined Cristina Ceccon was reluctant to accept that she had sent certain documents, even when some documents were not material to the case against her, and claimed not to have read documents which were damaging to her case even when contemporaneous records showed otherwise. In addition, in many respects, she gave implausible accounts of her actions in an attempt to bolster her case.
For example, during the course of a long cross‑examination about lengthy and numerous text messages she sent to Jason Peterson over approximately a period of six months after her brother's death, she attempted to reconstruct the plain meaning of many statements made by her in text messages in an attempt to suit her case.
Another example is when cross‑examined, Cristina Ceccon claimed that she did not know she was a director of Merlo or that it was used for the business of share trading, or that it had to have directors. She did, however, say that she knew that her brother had set up Merlo and that he used it for share trading but she did not regard this activity as a business.[21]
[21] ts 260.
One of the telling aspects about her lack of credibility in her evidence that she did not know she was a director of Merlo and a claim by her that she had no knowledge of signing a number of standard transfer forms for non‑market transactions transferring particular shares to Celtic (which were held as security for each of the three loan facilities including the September 2018 Loan Agreement) is that:
(a)in text messages she sent to Jason Peterson after her brother had died and before she had sought legal advice, she made statements to the effect that she knew that her brother had set up Merlo and that he was buying shares through Merlo;[22]
[22] Exhibit 19, 252, 273.
(b)when cross‑examined about her knowledge of Merlo being used as a vehicle for share trading, she conceded that she was paying tax on profit realised from her brother's share trading.[23] Her evidence on this point is consistent with the following exchange of text messages with John Ceccon in 2018:
[23] ts 274 ‑ 275.
(i)On Sunday 18 February 2018, Cristina Ceccon asked John Ceccon at 9.28 am:[24]
[24] Exhibit A, Tab 35, 222.
Hey. How's the toilet now?
Have you managed to provide my accountant with what he has asked for by any chance?
(ii)At 9.29 am on the same day, John Ceccon replied to her message as follows:[25]
[25] Exhibit A, Tab 35, 222.
All good
Don came and fixed it up
I'll do tax for you tomorrow
(iii)Approximately 10 minutes later at 9.38 am, Cristina Ceccon sent another message to John Ceccon in which she stated:[26]
Thanks for sending him those tax papers, I'm holding my breath on how much I owe the tax department from last financial year.
(iv)On the following day, Cristina Ceccon sent to John Ceccon another message at 6.46 pm in which she directed him to:[27]
Provide my accountant with whatever info he has asked for.
[26] Exhibit A, Tab 35, 222.
[27] Exhibit A, Tab 35, 222.
Although Cristina Ceccon at the trial denied being a borrower of any amount from Celtic for any purpose, or until after her brother died having knowledge that she was the sole director and shareholder of Merlo, it is clear that Cristina Ceccon actively participated in consenting to her brother using Merlo to trade in shares, and she agreed to become a joint borrower and to provide security over her real property.
In short, I found her to be an untruthful witness, and her oral evidence in respect of most matters to be unreliable. I have set out at length material inconsistencies in her oral and documentary evidence in 4.0 and 5.0 of these reasons.
3.3 Philip Re
Philip Re is a chartered accountant who has over 30 years practice as an accountant. He regularly witnesses documents for clients. In 2013, John Ceccon was one of his clients, and they were friends. Mr Re also knew Cristina Ceccon, having met her socially on a couple of occasions at the City Beach property. Mr Re was able to identify his signature and writing on the acceptance and acknowledgement pages of the First Loan. He did not recall witnessing the signature of Cristina Ceccon or the surrounding circumstances of the execution and witnessing of the First Loan facility letter.
I found Mr Re to be an honest and reliable witness who gave his evidence to the best of his recollection. Although it is clear that Mr Re is an independent witness, I did not find his evidence to be a great deal of assistance because he did not recall witnessing Cristina Ceccon's signature on the First Loan.
3.4 Jason Peterson
Although Jason Peterson is not a disinterested witness, I found him to be an honest and reliable witness who endeavoured to give his evidence as truthfully as possible, and to the best of his recollection. In all material respects, his oral evidence was consistent with contemporaneous records, including text messages.
4.0 The events leading up to the entering into of the September 2018 Loan Agreement by Cristina Ceccon
4.1 The First Loan
Celtic claims that Cristina Ceccon first became a joint borrower with John Ceccon to a loan when she executed a loan facility letter on 9 September 2013.[28]
[28] Exhibit A, Tab 5.
The First Loan was for an amount of $1,175,000. This amount was referred to as a cash advance in the loan facility letter. In fact, it was not a cash advance, it was a consolidation of previous loans and cash advances made to John Ceccon.
Counsel for Cristina Ceccon attempted to make much of the fact that each of the three loan facilities referred to cash advances of sums outstanding as at the date of the entering into of each loan, when in fact each of the sums, with the exception of part of the Second Loan, was an amount to be refinanced from a former loan, or in the case of the First Loan, what appeared to be more than one prior loan to John Ceccon. Nothing turns upon this issue because it is not uncommon for a loan agreement to state that the amount of the loan is advanced as cash, when in fact the amount said to be advanced is an amount of refinance for a former loan facility with the same lender.
This is reflected in the purpose of the First Loan, which was stated in the loan facility letter dated 6 September 2013 to be:[29]
[T]o assist the Borrower's with general working capital requirements and to consolidate all other facilities the borrowers have with Celtic and Professional Payment Services Pty Ltd ('PPS'). This facility shall replace all other facilities the borrowers have with Celtic, PPS and Jason Peterson.
[29] Exhibit A, Tab 5, 61.
The term of the First Loan was for a period of 12 months from the date of the facility, whereby the borrower was required to pay the sum of $1,175,000 plus any fees and interest due as one final payment at the end of the term of the facility.
The terms of the three loans were that each facility was granted for a particular amount, and if payments were made, subsequent drawdowns could be made by the borrowers. The borrowers could, however, prepay at any time, without penalty, all amounts outstanding under the loans.
It is Jason Peterson's uncontradicted evidence that the facilities were used for the trading of shares.[30] This is consistent with the fact that it was a term of the loans that repayment of the sum borrowed was repayable as one final payment at the end of the term of the facility and is reflected in each of the loan statements which were spreadsheet records kept by Jason Peterson. With the exception of the period between 19 February 2018 and 24 August 2018, being the period when the Second Loan was in operation, the loan statements record deposits of significant amounts when shares were sold and significant drawdowns when shares were purchased.[31] However, it also appears from the spreadsheets that some deposits may have been made which were not from the proceeds of the sale of shares.
[30] ts 119.
[31] Exhibit A, Tabs 87, 88, 89 and 90 and Exhibits 4, 5 and 9.
The interest rate of the First Loan was 10% per annum, payable on the 14th of each calendar month, commencing on 14 September 2013 with a default rate of interest of 20% per annum charged in monthly increments. There was no establishment fee. It was a condition of the First Loan that the borrowers provide a personal guarantee and indemnity, and a charge in favour of Celtic of the borrowers' rights, title and interest in the Yokine property, together with authority from the borrowers authorising Celtic to lodge a caveat against the title of the Yokine property. It was also a condition that the borrowers sign off market transfers for nine specified ASX listed securities in favour of Celtic and/or its nominee.[32]
[32] Exhibit A, Tab 5, 62 ‑ 63.
The loan facility for the First Loan letter was addressed to John Ceccon and Cristina Ceccon at 17 Latrobe Street, Yokine. At that time, Cristina Ceccon was the sole registered proprietor of the Yokine property. She did not, however, at any time, reside at the Yokine property. John Ceccon lived at the Yokine property with his partner, Ms McLean, and their daughters, from 2003 until December 2014.[33]
[33] ts 211 ‑ 212.
Cristina Ceccon denies that she executed the First Loan. On a page headed 'Acceptance of Facility Letter' and another titled 'Guarantors Acknowledgement' attached to the loan facility letter dated 6 September 2013, there are handwritten signatures on each page of the two pages which Celtic claims are the handwritten signatures of Cristina Ceccon. The handwritten signature of John Ceccon also appears on these two pages in two places. All four of the signatures appear to have been witnessed by Mr Re on 9 September 2013. Mr Re gave evidence in chief that his practice is to witness the signature of a witness after he has seen that witness sign a document in his presence.[34]
[34] ts 107.
In cross‑examination, Mr Re identified an email that had been sent to him by John Ceccon on 9 September 2013 at 2.01 pm, which attached an unexecuted copy of the loan facility letter, in which John Ceccon said, 'When you back? I'm in your boardroom working away till 3.15 if that's okay …'.[35] In cross‑examination, Mr Re also identified a second email sent from John Ceccon to a receptionist at his workplace at 2.27 pm on the same day, in which John Ceccon asked the receptionist to print a copy of the loan facility letter.[36]
[35] Exhibit 2 and ts 110 ‑ 111.
[36] Exhibit 3 and ts 112.
After Mr Re identified these two emails, it was put to him and he agreed that given he could not recall the circumstances of witnessing the signatures on the loan facility letter, he could not say whether he followed his practice (on this occasion) of always witnessing a document in the presence of a witness.[37]
[37] ts 113.
Consequently, there is no direct evidence that Cristina Ceccon executed the loan facility letter comprising the terms of the First Loan.
Although it appears that John Ceccon made almost all of the repayments credited to the First Loan, and made further drawdowns on the loan from time to time from the date of commencement of the First Loan on 6 September 2013 until 11 January 2018, in September 2014, Cristina Ceccon made two repayments to PPS, which payments were credited to the First Loan, being a payment of $20,000 on 17 September 2014 and $5,000 on 24 September 2014.[38]
[38] Exhibits 4, 11 and 12.
Cristina Ceccon concedes making these payments. She says she made the payments because her brother told her to do so, and he said the payments were for shares.[39] Her evidence to this effect is consistent with the character of the First Loan, that is, it was a loan facility for share trading by John Ceccon.
[39] ts 226.
On 18 October 2013, Celtic registered a caveat over the Yokine property as security for the First Loan.
I do not find it necessary to find that Cristina Ceccon executed the loan facility letter for the First Loan because Celtic does not sue on this loan. However, given her lack of credibility in respect of her evidence about her knowledge of documents she did in fact sign, which findings I make in 4.2 and 5.0, it is highly likely that she did execute the First Loan facility letter.
On 12 May 2017, Walthamstow Pty Ltd registered a mortgage over the Lord Street property to secure a loan of $440,000. On 24 May 2017, Cristina and John Ceccon's father (who had by this time been deceased for some time) was removed from the title of the City Beach property. When cross‑examined, Cristina Ceccon claimed that she did not recall the Walthamstow loan.
4.2 The Second Loan
In early 2018, Celtic, John Ceccon and Cristina Ceccon entered into the Second Loan.
The agreement to enter into the Second Loan came about after John Ceccon and Jason Peterson discussed and agreed sometime prior to early February 2018 that the amount outstanding on the First Loan was $1,532,000 and they agreed to enter into a new loan to refinance this amount and for an advance of a further sum of $150,000. This new loan was offered by Celtic to John Ceccon and Cristina Ceccon as borrowers in a facility letter dated 19 February 2018.[40]
[40] Exhibit A, Tab 31.
The terms of the Second Loan were substantially similar to the terms of the First Loan, except that:
(a)the amount stated to be advanced as a cash advance was $1,682,000;
(b)the default rate of interest was 18% per annum;
(c)there was an establishment fee of $1; and
(d)in addition to the charge in favour of Celtic of all the borrowers' rights, title and interest in the Yokine property, authority was to be given by the borrowers authorising Celtic to lodge a first mortgage against the title of the Yokine property.
Celtic's lawyers prepared a mortgage to be registered over the Yokine property, which it says Cristina Ceccon executed.[41] Cristina Ceccon claimed when giving evidence that she did not recall granting a mortgage over the Yokine property to Celtic.[42] I return to this point below.
[41] Exhibit A, Tab 40.
[42] ts 220.
Cristina Ceccon also claimed when giving evidence in chief that she did not recall seeing the facility letter for the Second Loan, and she did not recall executing the acceptance of facility attachment or the guarantor's acknowledgement.[43]
[43] ts 219.
Cristina Ceccon claimed that she had no knowledge of having borrowed funds from Celtic until she went to see an independent lawyer, Michele Kershaw,[44] on 15 November 2019. Cristina Ceccon met Ms Kershaw at the suggestion of Jason Peterson's solicitor, Mr Blackman, and after being pressed to do so by Jason Peterson.
[44] ts 325.
When text messages, which included photographs of a copy of the Second Loan facility letter, were put to her to read in cross‑examination, which plainly showed she had affixed her signatures on the loan facility letter indicating she accepted the offer for the loan, she did not accept that she had sent those text messages. When asked why she did not accept she had done so, she said it was because she did not remember sending those messages.[45] When further cross‑examined at length about these text messages, which included photographs of each page of the Second Loan facility letter during which she was handed and asked to view the actual text messages on John Ceccon's mobile telephone (having earlier conceded that she had downloaded copies of these text messages from her brother's mobile telephone,[46] and agreed that the phone number recorded as the sender of the messages containing the photographs of the letter was her mobile telephone number),[47] she finally reluctantly said that it was most likely that she had sent the text messages.[48]
[45] Exhibit A, Tab 35 and ts 243 and 251.
[46] ts 241.
[47] ts 252 ‑ 253.
[48] ts 243 ‑ 253.
The text messages of the photographs of the loan facility letter she sent to John Ceccon on which she had affixed in two places her signatures are particularly damaging to her case, because these text messages, including the photographs of the letter containing her two signatures, are highly probative and convincing evidence that she executed the loan facility for the Second Loan. In addition, her attempt to downplay these messages is telling evidence adverse to her credit as a witness.
It is clear from the text messages Cristina Ceccon exchanged with John Ceccon on 20 February 2018 that:[49]
[49] Exhibit A, Tab 35.
(a)on 20 February 2018, Cristina Ceccon had in her possession a copy of the facility letter dated 19 February 2018 for the Second Loan prior to it being executed by any other party. This is because the photographs of each page of the letter she sent to John Ceccon had no other signatures on any page other than hers;
(b)in the text messages exchanged with John Ceccon between 6.38 pm and 7.04 pm, Cristina Ceccon indicated that she was at a library and had printed two copies of the loan facility letter. The first had been sent to her by John Ceccon's personal assistant, Katie, and the second was sent to her by John Ceccon just before the library closed;
(c)Cristina Ceccon hand wrote her signatures on a copy of the loan facility letter (being the second copy of the loan facility letter sent to her by John Ceccon) indicating acceptance of the Second Loan. She then took photographs of each page of the letter including the two pages which she had affixed her signatures in handwriting (the acceptance of facility letter page and the guarantor's acknowledgement page) and sent the photographs to John Ceccon by text message at 7.11 pm; and
(d)Cristina Ceccon read the loan facility letter prior to sending the text messages to her brother containing the photographs of the letter. I make this finding of fact by inference from the following text messages that Cristina Ceccon exchanged with John Ceccon between 7.00 pm and 7.11 pm, having been sent the second copy of the loan facility letter at 6.38 pm and having printed a copy of that document before the library closed, which show:
(i)before Cristina Ceccon sent the photographs of the loan facility letter by text message, on which she had affixed her signature on two pages, at 7.00 pm, she sent a text message to John Ceccon in which she stated:
Looking closely at Katie's printouts, the document on‑screen is wider than A4 paper, so it has chopped off the signing boxes.
At 7.05 pm, John Ceccon said to her in reply:
Don't worry about hers for now
In reply to John Ceccon's message, at 7.07 pm, Cristina Ceccon stated:
Okay. From what I can see, & if I'm not wrong, there's only two boxes I have to sign on your paperwork. I've signed them. I'll leave them here for you to pick up tomorrow. They'll be in a plastic sleeve on your mail pile.
and;
(ii)when she sent the photographs of each page of the facility letter at 7.11 pm to John Ceccon, the photographs of the pages of the loan facility letter clearly showed she had in fact signed the letter on the two pages above where her name had been typed on the acceptance of facility and guarantor's acknowledgement pages and she wrote at the bottom of the photograph of the last page of the facility letter 'is it right that it has John & not Giovanni?', to which John Ceccon immediately replied by text message, 'Yep All good'.[50]
[50] Exhibit A, Tab 35, 226.
As Celtic properly concedes, it appears from the photographs of Cristina Ceccon's handwritten signatures on the loan facility letter for the Second Loan that she did not execute the document by handwriting each of her signatures in front of a witness, as no witness attestation appears on the photograph of the pages sent by text message to John Ceccon. However, the fact that her signatures were not witnessed is immaterial, as it was not necessary for Cristina Ceccon's signature to be witnessed to bind her in contract to the terms of the Second Loan.
From this evidence, it is clear that Cristina Ceccon executed the loan facility letter for the Second Loan, having read the contents of the letter before she sent a copy of it to John Ceccon by text message on 20 February 2018.
The only sum actually advanced of the amount of $1,682,000 of the Second Loan (as specifically required by the terms of the Second Loan) was the sum of $150,000. This amount was advanced on 7 March 2018 by Celtic and paid to Citibank. The amount was applied to the Citibank loan in order to discharge the mortgage over the City Beach property,[51] which discharge occurred on 24 May 2018.
[51] Exhibits 6, 7, 15, 16 and Exhibit A, Tab 42 and ts 131 ‑ 133 and 270.
Although the express terms of the Second Loan authorised Celtic to take a mortgage over the Yokine property, and Celtic claims that a mortgage to that effect was executed by Cristina Ceccon, it is not necessary to make a finding in respect of this issue because no mortgage was registered on the Yokine property title. In any event, Celtic's caveat remained on the title for the Yokine property until Celtic withdrew the caveat.
4.3 Reasons why the September 2018 Loan Agreement was entered into
On 12 July 2018, Celtic withdrew its caveat over the Yokine property. Jason Peterson explained that this occurred because John Ceccon told him in January 2018 that he wanted to withdraw the security over the Yokine property and use that property to refinance and reorganise his and Cristina Ceccon's financial affairs.[52]
[52] ts 135.
After Celtic withdrew the caveat over the Yokine property, it became necessary to obtain alternative security in favour of Celtic to secure the funds it had advanced to John Ceccon and Cristina Ceccon by the Second Loan.
In August 2018, Cristina Ceccon obtained a loan solely in her name secured over the Yokine property through Perpetual. In a letter dated 17 August 2018 addressed to Cristina Ceccon at her home at City Beach, La Trobe Financial Services Pty Ltd notified her that a loan for an amount of $1,050,000 through Perpetual for the purpose of refinance with equity/cash to payout the existing mortgage on the Lord Street property (the Walthamstow loan) and to be secured on the Lord Street property and the Yokine property.[53]
[53] Exhibit A, Tab 52, 284 ‑ 285, 290 and 297.
In cross‑examination, it was put to Cristina Ceccon that in 2018 she had borrowed money from Perpetual through La Trobe Financial (Perpetual) to allow John Ceccon to continue his share investments, and to discharge the loan that she had with Walthamstow (which was secured by a mortgage over the Lord Street property). In response, she said that she did not know what the loan was for and that 'he borrowed' the amount of 1.1 (million) because John Ceccon told her he wanted to get his name off the City Beach property title and 'she owed some people' money.
I do not find her claim that she did not recall the Walthamstow loan to be credible. This is because:
(a)at no stage during these proceedings did Cristina Ceccon indicate that she did not know about the Perpetual loan and the amount she borrowed from Perpetual and that this loan was secured over the Lord Street and Yokine properties that she was sole proprietor of; and
(b)on her own evidence, John Ceccon told that her part of the reason he wanted her to borrow money from Perpetual was because she owed money to others.
For some reason which was not revealed to the court, it appears that apart from the payment of $150,000 to Citibank recorded on the loan statement for the Second Loan, no further drawdowns and no repayments were made during the period of currency of the Second Loan.[54]
[54] Exhibit 5.
The only entries in the loan account statement between 19 February 2018 and 24 August 2018 for the Second Loan were: the outstanding balance carried forward of $1,532,000 as at 19 February 2018; the drawdown of the $150,000 on 7 March 2018 (paid to discharge the Citibank mortgage over the City Beach property); and seven entries of interest due at 10% per annum calculated monthly, being a total amount of interest in the sum of $87,571.59.[55] The last two entries on the loan statement were dated 24 August 2018. The first of these two entries records the balance of the loan was $1,769,571.59. The second entry records that an amount of $87,571.59 was 'interest refunded in good faith', leaving a balance at the date of 24 August 2018 of $1,682,000.[56]
[55] Exhibit 5.
[56] Exhibit 5.
Jason Peterson explained that this refund of interest was made after he and John Ceccon discussed the amount outstanding on the Second Loan, and agreed that Celtic would waive the interest that had accrued on the outstanding balance of the Second Loan (in effect for the entire period of the loan). Celtic claims this waiver of interest was and is the consideration for the September 2018 Loan Agreement. I return to this point below in 7.0.
Thus, because of this agreement, the loan facility letter dated 24 August 2018 for the September 2018 Loan Agreement was for the amount of $1,682,000, and it was for the same amount as the balance of the Second Loan following the advance of the payment of $150,000 paid to Citibank.
5.0 The circumstances of entering into the September 2018 Loan Agreement
Cristina Ceccon claims she did not execute the loan facility letter dated 24 August 2018, and gave evidence that:
(a)she did not see a copy of this loan facility letter until these proceedings commenced;[57] and
(b)she was not aware of the September 2018 Loan Agreement or that the September 2018 Loan Agreement would be secured by a mortgage over the City Beach property, until she spoke to the independent lawyer, Ms Kershaw, on 15 November 2019.
[57] ts 212.
Cristina Ceccon's evidence about these material issues is not credible.
Celtic claims, and I find for the reasons that follow, that Cristina Ceccon executed the loan facility letter dated 24 August 2018 on 28 September 2018.
I have found Cristina Ceccon's evidence about her knowledge of the September 2018 Loan Agreement, and her claim that she did not execute the loan facility letter dated 24 August 2018, not credible and unreliable for the following reasons.
First, I have found the documentary evidence shows that Cristina Ceccon was sent copies of correspondence referring to the September 2018 Loan Agreement prior to the execution of the loan facility letter on 28 September 2018.
Second, I have found when the evidence of Cristina Ceccon about this loan facility letter and her evidence about other documents that are claimed by Celtic to contain her handwritten signature is considered, her evidence so lacks credibility her claim that she did not sign this loan facility letter cannot be relied upon. Even when contemporaneous documents were shown to her, which evidenced that she had executed other documents which were not material to the outcome of this action, she refused to concede that she had executed these documents.
Third, what she writes in text messages to Jason Peterson after the death of John Ceccon is inconsistent with her evidence that she had not executed, and was not aware of, the September 2018 Loan Agreement.
Fourth, the contents of contemporaneous notes made by her at a meeting with Jason Peterson on 4 August 2019 are inconsistent with her evidence on these material issues.[58]
[58] Exhibit A, Tab 73.
Fifth, these findings are supported by the expert opinion of Dr Strach, who forensically examined the original of the loan facility letter dated 24 August 2018 together with a relatively large number of original documents said to contain undisputed signatures of Cristina Ceccon and other copy documents containing undisputed signatures of Cristina Ceccon, and formed the opinion that there was strong support for a finding that the signatures attributed to Cristina Ceccon on the loan facility letter for the September 2018 loan were signed by the same person who signed the undisputed specimen signatures.[59]
5.1 Cristina Ceccon was aware of the change of security on the Celtic loan facility in August 2018
[59] Exhibit 1, 9, par 32.
In late August 2018, Jason Peterson was in Europe.[60] On 21 August 2018, he sent an email to his solicitors, Sam De Vita and Jane Carrott at De Vita Legal, stating that he was away until 9 September 2018, and requested assistance to arrange for a first mortgage over the City Beach property to be substituted as the security for the Second Loan.[61]
[60] ts 136.
[61] Exhibit A, Tab 53.
At 2.50 pm on 22 August 2018, Jane Carrott sent an email to Jason Peterson recommending that a new facility be entered into rather than a variation of the Second Loan be prepared, which would need to involve a change in commencement date and the addition of Nicoletta Ceccon as a guarantor.[62] At 4.15 pm on the same day, Jason Peterson replied by email stating that he agreed with this advice. At 4.43 pm, Jane Carrott sent an email to Jason Peterson's professional assistant, Kelly Smith, and asked for a copy of the Second Loan facility letter dated 19 February 2018.[63]
[62] Exhibit A, Tab 54, 305.
[63] Exhibit A, Tab 54, 304.
On 24 August 2018, Jane Carrott sent to Jason Peterson by email a copy of a new loan facility letter dated 24 August 2018, and requested him to sign it, scan the executed copy and send it to her so that she could arrange for the borrowers to sign the letter at the time of signing the first registered mortgage and related documents.[64]
[64] Exhibit A, Tab 55.
The material terms of the September 2018 Loan Agreement as set out in the letter dated 24 August 2018 were as follows:[65]
[65] Exhibit A, Tab 55.
(a)the borrowers were Giovanni (John) Ceccon, Cristina Ceccon and Nicoletta Ceccon;
(b)the amount stated to be advanced as a cash advance was $1,682,000;
(c)the stated purpose of the facility was to assist the borrowers with general working capital requirements and to consolidate all other facilities the borrowers had with Celtic, PPS and Jason Peterson by applying $1,532,000 to the facilities with a further advance of $150,000 to the borrowers;[66]
(d)the date of the drawdown for the facility was 31 August 2018;
(e)the interest rate was 10% per annum, payable on the 24th of each calendar month, commencing on 24 September 2018, with a default rate of interest of 18% per annum charged in monthly increments if the facility was not repaid in full or not extended by mutual agreement by or on the due date;
(f)an establishment fee of $1, due and payable upon repayment of the facility; and
(g)as a condition precedent to the availability of the facility and to secure the borrowers' obligations, the following securities were to be provided in a form and substance acceptable to Celtic as follows:
(i)a personal guarantee and indemnity from the borrowers;
(ii)a first registered mortgage in favour of Celtic of the borrowers' rights, title and interest in the City Beach property; and
(iii)an authority from the borrowers authorising Celtic to lodge a first registered mortgage against the title of the City Beach property.
[66] This stated purpose replicated what was stated as the purpose of the Second Loan. In this letter, the latter stated purpose was incorrect because the amount of $150,000 had already been advanced pursuant to the terms of the Second Loan.
Attached to the loan facility letter dated 24 August 2018 were an acceptance of facility letter and a guarantor's acknowledgement, both of which were required to be signed by John Ceccon, Cristina Ceccon and Nicoletta Ceccon.
On the same day that Jane Carrott sent a copy of the loan facility letter dated 24 August 2018 to Jason Peterson, at 10.58 am that morning, Gavin Harrigan from Quantum Finance Australia (who appeared to be assisting the finance arrangements for La Trobe and the Perpetual loan to be secured on the Yokine property) sent an email to Sam De Vita, Jane Carrott, Cristina Ceccon, Jason Peterson and Sarah at Stella Settlements.[67] The subject of the email was 'Re: 11 Canungra Rd City Beach WA 6015'. In this email, Gavin Harrigan stated that: 'Sam deals directly with Sarah at Stella to get the caveat on city beach when the title goes from 3 names into 2' (being when John Ceccon was removed as a registered proprietor on the title of the City Beach property, leaving Cristina Ceccon and Nicoletta Ceccon as the two registered proprietors).
[67] Exhibit A, Tab 58, 338 ‑ 339.
In reply, Jane Carrott sent an email at 11.05 am that morning to Gavin Harrigan with a copy to Sam De Vita, Cristina Ceccon, Jason Peterson, Sarah Barrack and John Ceccon, in which she stated that she confirmed that her client would be taking a first registered mortgage over the City Beach property, not a caveat, and that she would liaise with Sarah at Stella Settlements.[68]
[68] Exhibit A, Tab 58, 338, and Exhibit 18.
When giving evidence, Cristina Ceccon claimed she did not know that Celtic were going to take a mortgage over the City Beach property as part of the September 2018 Loan Agreement. When cross‑examined, after being asked to read the email sent at 11.05 am on 24 August 2018, she conceded that the email informed her that a mortgage was being taken over the City Beach property. When it was then put to her that she knew that a mortgage was being taken over the property, she disagreed. When it was put to her that she was a recipient of this email because it was copied to her email address, she claimed she had not read the email until after seeing her lawyer and finding out that she was being sued by Celtic.[69]
[69] ts 272 ‑ 273.
Plainly, when all of her evidence is considered in 5.2, 5.3 and 5.4, this explanation is not credible.
5.2 The surrounding circumstances of the execution of the September 2018 Loan Agreement
There is no direct evidence that Cristina Ceccon signed the September 2018 Loan Agreement loan facility letter dated 24 August 2018.
The documentary evidence records that on 31 August 2018, Jason Peterson sent a signed copy of the loan facility letter dated 24 August 2018 as an attachment to an email sent to Jane Carrott, which email and attachment he copied to John Ceccon and Sam De Vita.[70]
[70] Exhibit A, Tab 59.
On 12 September 2018, Perpetual registered a mortgage over the Yokine property.
On 13 September 2018, the ANZ bank issued a cheque for $150,000 payable to Celtic,[71] and on the same day, John Ceccon transferred his interest in the City Beach property to Cristina Ceccon and Nicoletta Ceccon.
[71] Exhibit 6, ts 127; this amount was credited to the balance outstanding on the September 2018 Loan Agreement on 14 September 2018; Exhibit 9.
On 21 September 2018, Jane Carrott collected the certificate of title for the City Beach property from Sarah Barrack at Stella Settlements.[72]
[72] Exhibit A, Tab 62.
By Friday, 21 September 2018, John Ceccon and Cristina Ceccon had not signed the loan facility letter dated 24 August 2018 and the mortgage documents. It appears that John Ceccon had been interstate.[73]
[73] Exhibit A, Tab 62.
At 12.46 pm on that day, John Ceccon sent an email to Jane Carrott and Jason Peterson with a copy to Sam De Vita stating that mum (Nicoletta Ceccon) was away until Sunday night with a senior citizen group, and asked if they (presumably a person from De Vita Legal) could come to the City Beach property at 7.00 pm this Monday night (being the night of 24 September 2018).[74]
[74] Exhibit A, Tab 63.
It appears that that did not occur. On 27 September 2018, Jane Carrott sent an email to Jason Peterson in which she informed him that John Ceccon had collected the documents to arrange for signing, and that she was waiting for them to be returned.[75]
[75] Exhibit A, Tab 64.
It is not in dispute by Cristina Ceccon that the loan facility letter dated 24 August 2018 was executed by John Ceccon on 28 September 2018.
Each of the signatures on the acceptance of facility letter and guarantor acknowledgement pages are dated 28 September 2018 and appear to have been dated and witnessed by Theodore Kalogeracos, whose signature, name, address and occupation appears under the signatures of John Ceccon and four signatures of which appear on the face of the document to be the signatures of Cristina Ceccon. Each of the four signatures attributed to Cristina Ceccon are referred to in the expert report of Dr Strach as the disputed signatures.
Theodore Kalogeracos was not called as a witness. It is common ground that he left Australia some time ago, and resides in Greece at a place unknown.
The acceptance of facility letter and guarantor's acknowledgement pages of the loan facility letter dated 24 August 2018 bear the signature of John Ceccon in two places. The signatures attributed to Cristina Ceccon appear in four places, being on two pages of the acceptance of facility letter, and on two pages of the guarantor's acknowledgement.
In respect of each of the acceptance and acknowledgement pages, Celtic claims that Cristina Ceccon's signature appears in handwriting to indicate acceptance of the loan and as guarantor in the capacity of borrower, and in the capacity of attorney on behalf of Nicoletta Ceccon pursuant to a power of attorney N896088.[76]
[76] A copy of an enduring power of attorney dated 8 January 2009 and a statutory declaration sworn by Cristina Ceccon on 25 May 2018 and lodged pursuant to the provisions of the Transfer Land Act 1893 (WA) at Landgate on 31 May 2018, was one of the undisputed signatures of Cristina Ceccon examined by Dr Strach; Exhibit 1, 15 and 44 ‑ 47.
The central issue in the trial is whether each of these four signatures that appear on the loan facility letter dated 24 August 2018 were affixed on the letter in handwriting by Cristina Ceccon.
Cristina Ceccon denies that these signatures are hers. Her evidence about the signatures is not convincing.
When asked in her evidence in chief to look at the first of her signatures that appear on the loan facility letter dated 24 August 2018 above her typed name on the acceptance of facility letter page, she said that she did not recall signing a document in front of Theodore Kalogeracos.[77] When asked whether the second signature which appears above the typed words 'signed by Cristina Ceccon as attorney on behalf of Nicoletta Ceccon'[78] was her signature she said, 'I don't recall signing this'.[79] When asked again about the signature she said, 'I don't remember signing it'. When asked again about the signature by her counsel for the third time she said, 'I don't think so'. When her counsel then asked whether she thought or knew she said, 'No. I know it's not'.[80]
[77] Exhibit A, Tab 66, 382 and ts 221 ‑ 222.
[78] Exhibit A, Tab 66, 383.
[79] ts 221.
[80] ts 222.
When asked whether the third signature on the loan facility letter dated 24 August 2018 (being the signature that appears above the typed name Cristina Ceccon)[81] on the guarantor's acknowledgement page was hers, she said, 'No. I don't recall signing it'.[82]
[81] Exhibit A, Tab 66, 384.
[82] ts 222.
When earlier asked by her counsel about the fourth signature that appears on the second page of the guarantor's acknowledgement (above the typed words 'signed by Cristina Ceccon as attorney on behalf of Nicoletta Ceccon')[83] after she had said that she first saw this letter in these court proceedings, she said she did not recall signing the letter.[84]
[83] Exhibit A, Tab 66, 385.
[84] ts 212.
When questioned about this evidence in cross‑examination, in the following exchange between her and senior counsel for Celtic, her evidence at its highest appeared to be that she did not know about the September 2018 Loan Agreement or any of the terms of the loan because she did not remember signing the loan facility letter:[85]
[85] ts 254.
HOWARD, MR:.. So what I want to understand is - and it's really for the signatures at pages 382, 383, 384, and 385---Yes.
I really want to understand whether what your evidence is to her Honour is that you simply don't recall signing that document---Correct. Yes, I don't recall.
And because you don't recall signing it, you don't accept that you signed it---I still don't get that question.
I'm sorry. Well, I'm trying to understand whether you're telling her Honour positively that you did not sign it, or are you telling her Honour you simply don't recall whether you signed it or not---I don't recall signing it. I - I'm not trying to be difficult. I just can't remember signing it. I don't know about this document. I don't know about that signature.
Yes---That's what I'm - I'm trying to say.
And so are you telling her Honour that you don't recall, but it is possible you signed it---I don't think it's possible.
It's not possible---It's not possible that I signed it.
Because you - - ----Because I don't know about this document.
Because you don't remember it, it's not possible you signed it---I don't remember signing it. And I don't know the answer to that - is it possible or isn't - I don't know the answer. All I know is that I didn't sign - I don't know if I signed this. I can't remember signing it. And I didn't know about the contents of this.
Clearly, as set out in 5.4, Cristina Ceccon's evidence about these signatures is inconsistent with the matters that she stated in text messages sent to Jason Peterson and her handwritten notes of a meeting with Jason Peterson in a coffee shop on 4 August 2019.
5.3 Handwritten signatures of Cristina Ceccon on other documents
Cristina Ceccon gave similar evidence about the execution of other documents, which prior to the commencement of the trial, no notice had been given by her lawyers that she contested the authenticity of those documents.
Some of these documents were provided to Dr Strach as undisputed specimen signatures. The fact that Cristina Ceccon disputed the authenticity of these documents was not raised by her until she gave evidence in support of her case, and after Dr Strach had completed his evidence.
The first of these concerned the loans extended by Celtic to John Ceccon, Cristina Ceccon, Theodore Kalogeracos and his wife, and Theo & Geo Pty Limited for the pizza business. The term of the first loan facility was for a period of 36 months and the conditions of the loan were set out in a loan facility letter dated 1 February 2015. However, it appears that the loan facility was not executed until 10 November 2015.[86] It is not in dispute that John Ceccon signed the acceptance of facility letter as a director of Theo & Geo Pty Limited and in his personal capacity.
[86] Exhibit A, Tab 8.
When it was put to Cristina Ceccon in cross‑examination that this was a document that had been provided to the handwriting expert as one of her undisputed signatures, she said she did not remember signing this document.[87]
[87] ts 255.
When she was taken to a second loan for the pizza business which was extended by Celtic in a loan facility letter dated 8 November 2015,[88] (which appeared to be signed by Cristina Ceccon on the same day as the first loan facility letter for the pizza business) and informed that her lawyers had not taken any issue as to whether the signature on this document was hers and asked whether her signature appeared on the document, she said that she did not remember signing the document and she did not know anything about the contents of the contract.[89]
[88] Exhibit A, Tab 11.
[89] ts 256.
When taken to a guarantee and indemnity deed dated 10 November 2015 for the pizza business,[90] and asked whether her signature on that document was hers (and told this was also a document that her lawyers had not taken any issue with), she said she did not care what her lawyers thought, and that she did not know about the contents of the document so she did not remember signing it.[91]
[90] Exhibit A, Tab 12.
[91] ts 257.
Cristina Ceccon gave similar evidence about a second guarantee and indemnity deed for the pizza business dated 10 November 2015,[92] and a number of standard transfer forms ‑ for non‑market transactions transferring shares from her name, or from Merlo, to Celtic,[93] and an intermediary client application and agreement form dated 20 October 2015 establishing an account for Merlo with stockbrokers Patersons Securities Ltd authorising John Ceccon as agent on the account.[94]
[92] Exhibit A, Tab 13 and ts 257.
[93] Exhibit A, Tabs 15, 16 and 17 and ts 258 ‑ 262.
[94] Exhibit A, Tab 10 and ts 267.
The unreliability and lack of credibility of Cristina Ceccon's evidence about whether her signature was genuine on a number of documents produced to the court in the trial bundle was particularly evident when Cristina Ceccon was cross‑examined about an email that she sent to Jason Peterson's personal assistant, Kelly Smith, on 29 June 2015 at 11.40 am.[95]
[95] Exhibit A, Tab 9.
On Friday, 26 June 2015 at 1.12 pm, Kelly Smith sent an email to Cristina Ceccon with a copy to John Ceccon and to Jason Peterson forwarding an earlier email in which she (Kelly Smith) indicated it was necessary for shareholders to sign an off market agreement. The agreement referred to in the email was a deed and appeared to relate to the sale of shares of a company.[96]
[96] Exhibit A, Tab 9, 97 ‑ 98.
It appears that Cristina Ceccon did not respond to Kelly Smith's email. On 29 June 2015 at 6.58 am, Kelly Smith sent another email to Cristina Ceccon in which she made a request for the second time to sign the agreement and return it to her as soon as possible. At 11.40 am on the same day, Cristina Ceccon responded by sending an email to Kelly Smith stating, 'Good Morning Kelly Please find attached my signed, scanned copy. Regards Cristina Ceccon'. Attached to her email was a scanned copy of a signature page of the agreement, on which Cristina Ceccon's handwritten signature appeared above where her name was typewritten.[97]
[97] Exhibit A, Tab 9, 97 and 100.
When these emails and the signed scanned copy of the one page of the agreement containing her signature was put to her in cross‑examination, Cristina Ceccon said that she did not recall signing the document. When she was asked whether she accepted that she had signed the agreement (attached to the email) she said, 'Well, I don't remember this particular document, so I don't know whether I signed it'. When it was then put to her that she was not willing to accept that it was her signature even though it was attached to an email that she sent, she said, 'Yes'.[98]
[98] ts 266.
This evidence about the email that she sent attaching a signature page of an agreement which contained a handwritten signature above her typed name when she had earlier been emailed a blank copy of the agreement by Kelly Smith is particularly telling as to her lack of credibility.
This is because this evidence demonstrates that even when she was confronted with contemporaneous documentary evidence not material to Celtic's case, not in dispute or otherwise challenged by her prior to her giving evidence, and which showed a handwritten signature was as it purported to be, that is, it was hers, she refused to concede that the handwritten signature was in fact hers.
5.4 Text messages sent by Cristina Ceccon after the death of John Ceccon, and the meeting at the coffee shop on 4 August 2019
Cristina Ceccon sent lengthy and numerous text messages commencing shortly after the death of her brother until at least 16 November 2019. Once printed, the text messages comprised more than 300 A4 pages. Most of the messages were lengthy, rambling and contained emotional 'rants' and comments on many personal matters, including her love for her brother, her concern for her nieces, and her passion for music.
Without exception, Jason Peterson's replies to Cristina Ceccon's text messages were short and polite. A portion of the messages were tendered into evidence.[99] These text messages show that Jason Peterson spent a considerable amount of time and effort assisting Cristina Ceccon to sort out her financial affairs, including assisting her to make arrangements for the repayment of the Perpetual loan secured on the Yokine property.
[99] Exhibit 19.
These text messages show that shortly after John Ceccon died, Cristina Ceccon acknowledged that she owed Celtic a significant amount of money, and that she continued to acknowledge that she owed funds to Celtic over approximately a six month period.
The text messages tendered into evidence commence three days after John Ceccon unexpectedly died.
At 11.26 am on 14 May 2019, Jason Peterson sent Cristina Ceccon a text message in which he asked if he could help her or the girls (her nieces) with anything that day. Cristina Ceccon responded at 11.44 am the same day and said 'No' and indicated that she would see him and 'Katie' that night after dinner at John's place. They then had a discussion by further text messages over the next two hours about their shared distress at the death of John Ceccon, funeral arrangements and life insurance policies.[100]
[100] Exhibit 19, 6 ‑ 8.
At 3.35 pm that same afternoon, Cristina Ceccon sent Jason Peterson a long text message complaining about her brother's former partner, and her desire to ensure the future inheritance of family assets by her nieces. In this text message, she said:[101]
I don't want the girls to go pissing up again the wall my parents' house and my house that I worked hard to pay off. John's money is the girls' money, as far as I'm concerned. It is important to me that they inherit EVERYTHING I personally have paid off too. That's all I've ever wanted. They MUST inherit Lord Street. I know John & I have debts with you (& I don't know who else). I want to clear them but I'll fucking top myself if I have to give up Lord Street!!! NOT LORD STREET.
[101] Exhibit 19, 9.
When Cristina Ceccon was asked about what she had said in this text message about her knowledge of her and John Ceccon's debts 'with you', she said that she had not borrowed any money from Jason Peterson. When it was put to her that the reference to having debts was a reference to the borrowings from Celtic, she said, 'No', and then went on to say that the night after her brother died:
(a)she and her brother's former partner were looking through his things in his apartment and came across some sort of document or an email; and
(b)whilst they were both looking at the document or email, her brother's former partner remarked to her, 'Jeez, is that how much John owes Jason?'[102]
[102] ts 278.
Cristina Ceccon was then asked why she said in the text message, 'John and I have debts', to which she replied:[103]
… I was just being nice. I was being nice and I was thinking, 'Well, Maria doesn't have any money. I know she doesn't have any money. So how's she going to, if it's true, pay debts?'.
[103] ts 278 ‑ 279.
Clearly, this explanation is not credible. It is inconsistent with the evidence that she, Cristina Ceccon, was a joint borrower with John Ceccon for all the Celtic loans, not her brother's former partner.
By the middle of June 2019, Jason Peterson was assisting Cristina Ceccon to make arrangements to repay the Perpetual loan by selling the Yokine property. It appears that there had been some discussion in the past between her and John Ceccon about selling the Yokine property to his former partner. In a text message she sent to Jason Peterson on 14 June 2019 at 7.15 am, she said:[104]
I have gone from, as you know, 'no fkn way is Maria gonna have Yokine' to now deciding I want to sell it to her. For years I never wanted her to buy it off me but months before John got me to 'buy' his share of this house, I conceded and said I would. There was no further discussion on the topic once I said I'd sell it to her, and the next thing I knew I 'bought' his share of City Beach. This, I'm piecing together only now, was part of his plan to look after us all. I think he would have wanted to get Maria to buy Yokine … that's probably why he kept discouraging her from buying a property she was interested in putting an offer on. Yokine, if she's not stupid, will go to the girls anyway.
The money for the house I can put towards my loan. I will definitely be able to afford the repayments after that. I am conscious that Labtrobe Financial is not gonna be patient for much longer, so, I think that's a plan.
Think about my plan of attack?
[104] Exhibit 19, 60.
In response Jason Petersen said 'We need to sit down and chat about the whole thing'.
Four days later, on 18 June 2019, Cristina Ceccon sent a long text message to Jason Peterson speaking about how much her brother meant to her, in which she said at 7.20 am:[105]
You have my permission to sell Lord Street, Yokine and City Beach. Clear as much debt I've got with Labtrobe Financial and what John owes you and I'LL START ALL OVER AGAIN.
…
I am serious, Jason. I want to start from scratch again, or start paying back whatever's (sic) is left owing after selling of the properties. Selling off everything wouldn't be the end of the world for me. The end of the world for me was the 11th.
…
On the holidays I'm gonna put all three properties on the market. I've spoken to mum this morning & told her I have to to pay off debts.
Tell Latrobe Financial (or shall I?) that I'm selling to close that account.
I don't want ANY of John's life insurance. That is the girls' money.
[105] Exhibit 19, 64 ‑ 65.
In response, Jason Peterson said at 8.05 am:[106]
Let's have a chat and plan this Cris.
You need to be sensible nor emotional and not reactionary. I have a plan and everyone will be ok.
If you don't want that that's fine just tell me. Try and have a good day.
[106] Exhibit 19, 65.
On 23 June 2019, Jason Peterson sent Cristina Ceccon the following text message at 5.56 pm:[107]
Hi Cris. Just mindful I have to sort the Latrobe debt out. Per our previous chats are you happy that Labtrobe st is sold to sort out the debt on that property? And that I advise them that we will be doing this?
Cheers.
[107] Exhibit 19, 66.
In response, at 6.14 pm on the same day, Cristina Ceccon responded affirmatively as follows:[108]
Absolutely. Go right ahead and tell them please.
…
Just quickly: I DO NOT THINK JOHN LEFT ME IN THE SHIT. I DO NOT SEE IT THAT WAY AT ALL. I know I said in the past I didn't want to lose Lord Street (all because of its sentimental value) but I've lost both my Dad & brother. Who gives a toss now about properties!!! For real, man. FOR REAL. Let's offer Yokine to Latrobe and let's see what they say for now?
[108] Exhibit 19, 67.
On 7 July 2019, 8 July 2019 and 10 July 2019, they exchanged text messages about Cristina Ceccon making repayments of the Perpetual loan.[109]
[109] Exhibit 19, 72 ‑ 80.
On 2 August 2019, Jason Peterson sent Cristina Ceccon a text message in which he requested that they catch up for coffee. They subsequently made an arrangement to meet up at Koko Black at the Claremont Quarter on Sunday, 4 August 2019.[110]
[110] Exhibit 19, 106 ‑ 108.
When they met at the coffee shop, Jason Peterson handed Cristina Ceccon notepaper and they both made separate notes of their discussion.[111] After the meeting, Jason Peterson wrote the date of the meeting on the top of both sets of notes.[112]
[111] Exhibit A, Tabs 72 and 73.
[112] ts 143 ‑ 147.
In his evidence in chief, Jason Peterson said the purpose of the meeting was to sort out and assist Cristina Ceccon with her financial affairs, and that the following discussion occurred at the meeting:
I don't recall the exact, actual word-for-word, the conversation. But it was to the effect of sorting out a plan for her financial affairs now that her brother had gone and her – the various loans she had. We sat down and we went through a plan, which was essentially Cristina Ceccon had a property in – in Yokine, which we had the caveat on previously. She also had an additional property in East – in East Perth, in Lord Street. And then they had the City Beach property. So the objective of the meeting was to try and basically come out and – for her to keep her City Beach house and repay the other debts that she had in a orderly fashion. We discussed the values of the properties, the value – I asked Cristina what she thought the values were. She said they were – there was the Yokine property, which was worth approximately $850,000. Then she had the Lord Street property, which was also a similar value. And then the City Beach property, which I think we said was worth about $1.6 million. So then she had a loan out to Perpetual trustees organised through La Trobe Finance of circa $1.1 million. So – of which Perpetual had a mortgage over the Lord Street property in East Perth and the Yokine property. The – the two properties because there wasn't enough value in one of the properties to cover their – to cover their loan. We discussed that Celtic – the loan balance of approximately $1.6 million, and we discussed that there were shares held as security in Celtic's account of approximately $700,000. So discussing a plan to keep her in City Beach and keep the City Beach property. We came up with – to sell the Yokine property, to sell the East Perth property, which would realise circa $1.7 million, based on her valuations – what she thought they were worth. She had a loan of approximately 1.1 million to Perpetual. And repaying those off, there should be about $600,000 leftover, which would repay the Celtic facility in addition to the sale of the shares of 700,000, which would total about – a repayment of about $1.3 million off the debt of circa 1.55 – $1.6 million. And discussed, then, that at the end of it, she may end – end up having a small mortgage that's occurred against her City Beach property, in which she could service quite easily with her teachers wage at – going forward.
…
Do you recall anything else about the meeting?---That we would go away and get more formal valuations. The debts weren't disputed. She was quite comfortable talking about it.
The notes made by Cristina Ceccon:[113]
(a)appear to record that if the Yokine property was sold to her nieces, that would leave an amount of $150K (presumably an estimated balance of the Perpetual loan after sale of the property);
(b)record the available assets as shares (held by Jason Peterson as security) of $700K, the City Beach property as having a value of $1.6 million and the Lord Street property as $850K, being total assets of $3.15 million, and debt of $1.75 million, being a balance of $1.4 million;
(c)record a potential liability to Bruno (guess) of $200K;
(d)record a potential surplus taking account of the $200K, of $1.2 million;
(e)record that the $1.75 million debt could be reduced by selling the $700K worth of shares, which would leave $900K owing to Celtic and $150K to La Trobe (Perpetual loan); and
(f)record two options. The first was to sell the City Beach property for $1.6 million, leaving Lord Street (unencumbered) and $400K in cash. The second was to sell the Lord Street property for $850K, not sell the City Beach property leaving a debt of $400K, and this was the option preferred by Jason Peterson.
[113] Exhibit A, Tab 73.
When Cristina Ceccon was cross‑examined about these notes, she claimed that the notes were dictated to her by Jason Peterson, and that she just wrote down what he said because, 'I didn't understand what was going on. I didn't understand numbers. I didn't understand anything. So it was literally a dictation'.[114] When she was asked whether she recalled a discussion about her owing Celtic $1.6 million, she said she did not remember but agreed it was written in her notes, maintaining that she had no memory of that meeting. She also went on to say that she did not know that there was a Celtic loan and she only knew she owed La Trobe (Perpetual) $1.1 million. She also said that she was there to talk about her brother, she was not there to talk about money.[115]
[114] ts 280.
[115] ts 280 ‑ 283.
At 5.52 pm the same day, Cristina Ceccon sent Jason Peterson a text message in which she said that she had not heard from Ms Kershaw and that she would email her again tomorrow morning.[151]
[151] Exhibit 19, 261.
On 10 November 2019, just after midnight, Cristina Ceccon sent Jason Peterson a series of text messages in which she asked him, 'How much money do John & I really owe you?', to which he replied that he had told her and it was around $1.6 million. In doing so, he referred to what was set out in the memorandum and said that the shares and equity in Lord Street should cover the shops and hopefully allow her to keep City Beach but he did not know until everything was wound up.[152]
[152] Exhibit 19, 271 ‑ 272.
Cristina Ceccon sent further text messages not long after midnight that night complaining about Jason Peterson's response, and at 12.43 am Cristina Ceccon sent a text message to Jason Peterson in which she said:[153]
Close the shops and I'll sell EVERYTHING to pay you back, including City Beach. Get Paul Blackman to contact me directly and I'll tell him I don't need a lawyer/Michele. Please.
[153] Exhibit 19, 272.
At 6.41 am on 10 November 2019, Cristina Ceccon sent Jason Peterson a long text message expressing her outrage of not knowing exactly how much she owed, and complaining about, among other matters, the pizza business and a recent meeting at Victoria Park in which it was revealed to her that the shops had a huge loan to him.[154]
[154] Exhibit 19, 273 ‑ 274
When cross‑examined about this text message, Cristina Ceccon agreed that she was expressing her justifiable anger about being left holding 'the can on the supplier debts with pizza shops', which were brought about in part because of the marital split between the Kalogeracoses.[155]
[155] ts 316.
On 13 November 2019 at 3.46 am, Cristina Ceccon sent a text message to Jason Peterson in which she made a long apology for her behaviour, and said, 'I understand that you want your money back that John & I owe you. It was wrong of me to ask you to wear the debt'. She also said in this text message that she was going to see Michele on Friday and her intention was to do just as she suggests.[156]
[156] Exhibit 19, 294.
At 6.37 am the same morning, Cristina Ceccon sent Jason Peterson another long text message in which she asked for a copy of the 'loan that John, my mother & I signed of yours? Or my mum didn't sign because I had/have POA?'.[157]
[157] Exhibit 19, 295.
On 15 November 2019, Cristina Ceccon met with Ms Kershaw.
On 16 November 2019, Cristina Ceccon exchanged a number of text messages with Jason Peterson, in which she told him what she had discussed with Ms Kershaw and made the following statements, which are consistent with the finding that she knew that she was indebted to Celtic for the September 2018 loan. These statements were in answer to Jason Peterson's questions as to why a deed putting into effect the proposal in the memorandum had not been signed, and were as follows:[158]
At the end of the day, I want/have to pay you back as that was what was agreed upon by you & John, that I went guarantor for.
…
She (Michele Kershaw) was asking me know (sic) much I am in debt exactly with all the loans, including Theo's. I wasn't sure. I kept saying: 1M with LaTrobe & 1.6M for the contract, plus Theo's. She asked me about the shares, & again, I said I dunno. She was questioning me/referring to the contract I signed with John that Paul sent her, & not the memo I have a copy of too.
…
Jason, I am doing everything on that memo to pay you back as far as I can see. I'm not trying to stuff you around. I will pay you back. Ask Paul, maybe, to ask Michele? I dunno. I'm not gonna tell a lawyer how to do her job. Like I said, she thinks the memo is fair, as do I.
[158] Exhibit 19, 305 ‑ 308.
When questioned about this text message, Cristina Ceccon claimed she did not understand what was going on, and she could not explain why she made these statements in the text message.[159] However, the context of the text messages plainly reveals otherwise.
[159] ts 325 ‑ 329.
When the content of all of the text messages, emails and notes of meetings and memoranda are considered, it is clear that Cristina Ceccon was fully aware of the quantum of her debt to Celtic, in respect of the September 2018 loan, by 4 August 2019.
6.0 Dr Strach's expert evidence
6.1 Dr Strach's qualifications and experience
Dr Steven James Strach holds degrees of a Bachelor of Science and a Doctor of Philosophy. He is a member of the Australasian Society of Forensic Document Examiners Inc; the Australian and New Zealand Forensic Science Society; and the Australian Academy of Forensic Sciences. He is also a life member of the American Society of Questioned Document Examiners, a member of The Chartered Society of Forensic Sciences (UK), and a member of the Royal Australian Chemical Institute.
Dr Strach commenced training and working in the field of forensic document examination in 1974 in the Questioned Documents Section of the Metropolitan Police Forensic Science Laboratory in London. He has given oral evidence in civil and criminal proceedings, and has provided written evidence on many occasions in the form of affidavits and statements in Australian courts and in Hong Kong, Singapore, Berumda and England.
Dr Strach has undertaken research on various aspects of document examination. He has attended and presented scientific papers on forensic science and document examination and the results of his research at many meetings both in Australia and overseas. He is also the co-author of Chapter 95, Document Examination of Expert Evidence, edited by Ian Freckleton and Hugh Selby.
6.2 A preliminary issue - signatures on two non-market transactions forms provided to Dr Strach as authentic specimen signatures of Cristina Ceccon
When Dr Strach gave oral evidence, he was asked whether the conclusion and opinions he had reached in respect of the four signatures on the questioned document (the loan facility letter for the September 2018 Loan Agreement) would change if he disregarded two documents,[160] which had been provided to him as containing undisputed signatures of Cristina Ceccon. In response, he said, 'no' because there were other signatures on other documents that accounted for particular features of interest.[161]
[160] Exhibit 1, 3, pars 6 and 15, item 20 (renumbered S 12 by Dr Strach) and item 21 (renumbered S 13 by Dr Strach). The designations of the renumbering of S or FS relate to the first group of documents bearing specimen signatures and to later received further such documents, respectively).
[161] ts 77.
The documents he was asked to disregard were two original off market transfer forms. When Cristina Ceccon gave evidence she was asked by her counsel whether the signatures that appear on these two documents were hers. In response, she said that she did not know and she did not remember signing either document.[162]
[162] ts 235.
Cristina Ceccon's evidence in respect of these two documents was objected to on the basis that until the service of her witness outline dated 14 June 2021, no formal objection had been made to the authenticity of those documents (or any other documents referred to in the report of Dr Strach as containing specimen signatures).
Notice that Cristina Ceccon contested the authenticity of these two documents was given in this manner despite the fact that orders were made by consent on 3 February 2021 requiring notice to be given 11 June 2021 by a party who wished to challenge the authenticity of a document that the other party intended to include in the trial bundle.
The orders made by the court on 3 February 2021 were as follows:[163]
[163] Consent orders made by Le Miere J on 3 February 2021.
8.No later than 28 May 2021 each party will by notice in writing to each other party, specify the documents they intend to tender at the trial. Only those documents which will be tendered at trial should be included within the bundle, and a party including a document within the bundle should be able to justify to the Court the purpose for which the document is to be tendered upon request
9.Each document proposed by a party for inclusion within the trial bundle shall, in the absence of specific objection by another party, be taken to be:
(a)Authentic;
(b)Prepared by its apparent author;
(c)In the case of a communication, sent by the person appearing to have sent it, and received by the persons appearing to have received it on or about the date which it bears.
10.No later than 11 June 2021 each party will advise each other party in writing which of the specified documents may be tendered by consent, and whether the authenticity of any of the remaining documents (specify which) is disputed and give reasons in writing as to why consent to tender the remaining documents is withheld.
It is important that parties comply with orders made by the court. It is insufficient to claim that orders 8, 9 and 10 had been complied with by Cristina Ceccon referring in her witness outline, to these two off market transfer forms (together with seven other off market transfer forms) as documents that contained her purported signatures and were documents she did not recall signing.
Unless orders of the court which specify the manner in which challenges to the authenticity of documents are properly complied with, trial processes will fall into disarray.
For these reasons, I am of the opinion that Cristina Ceccon's evidence in respect of these two documents is inadmissible.
Even if I were to find her evidence in respect of these two documents to be admissible, I do not find her evidence about the execution of these documents to be credible for the reasons I have already given in 3.2, 4.0 and 5.0.
In any event, even if I was to find her evidence about these two documents admissible, her evidence in respect of these two documents is immaterial. This is because when asked to disregard these documents, Dr Strach did not alter his opinion about who was the writer of the four disputed signatures on the loan facility letter for the September 2018 Loan Agreement.
6.3 Dr Strach's observations and conclusions in respect of the disputed signatures on the loan facility letter dated 24 August 2018 (the September 2018 Loan)
Dr Strach examined each of the original specimen signatures macroscopically and microscopically. He also compared the specimen signatures with one another. His report documents his detailed analysis, including annotations pointing out specific features that he took into account and noted.
In his report, Dr Strach referred to the fact that his laboratory was aware of the potential for bias as a result of being exposed to unnecessary case related (textual) information. Consequently, in accordance with standard practice, he requested prior to the examination of the documents that Celtic's solicitors take care with the wording of instructions to him to avoid providing him with information that could later be claimed as having (or possibly having) influenced his examination results.
It is his opinion, and I agree, that Celtic's solicitors complied with his request.[164] In a letter from Celtic's instructing solicitors, dated 11 September 2020, Dr Strach was instructed to prepare an expert report. The proceedings and the scope of the enquiry to be conducted by Dr Strach were briefly described in the letter of instruction as follows:[165]
13.In the Proceedings, Celtic relies upon an agreement in writing made on 28 September 2018 between Celtic as lender and Nicoletta Ceccon, Cristina Ceccon and Mr Giovanni Ceccon collectively as borrowers ('Loan Agreement'), whereby Celtic agreed to lend and the borrowers agreed to borrow the sum of $1,600,000 ('Loan Amount') on the terms set out therein.
14.Celtic claims the Loan Amount together with interest thereon and costs.
15.In her defence, Cristina Ceccon disputes that she signed the Loan Agreement.
16.Our instructions to you are confined only to the signatures on the Loan Agreement.
[164] Exhibit 1, 3.
[165] Exhibit 1, 13.
The letter of instructions referred to the fact that Dr Strach had been provided with:[166]
(a)the original loan facility letter dated 24 August 2018, which is described in the letter of instructions as the Loan Agreement dated 28 September 2018;
(b)twenty‑three original undisputed documents signed by Cristina Ceccon (which were described in a schedule in the letter of instructions and subsequently renumbered by Dr Strach);
(c)nine undisputed copy documents signed by Cristina Ceccon (which were described in a schedule in the letter of instructions and subsequently renumbered by Dr Strach).
[166] Exhibit 1, 12 ‑ 16.
In the letter of instructions, Dr Strach was asked to answer whether or not, in his opinion, each of the (four) signatures of 'C Ceccon' on pages 5, 6, 7 and 8 of the original loan facility letter dated 24 August 2018 were written by Cristina Ceccon.[167]
[167] Exhibit 1, 16.
In conducting his examination of the documents, Dr Strach assumed that the undisputed specimen signatures attributed to Cristina Ceccon were written by the one person.[168]
[168] Exhibit 1, 5.
He explained the methodology he used to examine the original specimen signatures, the reproduction specimen signatures, and the four questioned signatures on the loan facility letter dated 24 August 2018 as follows:[169]
9.Original specimen signatures were examined macroscopically (that is with the unaided eye) and microscopically to study (and note) the pictorial and structural features of the signatures. Signature examination takes into account such features as: shapes; proportions; relative placement; relative size and height relationships; baseline alignment; spacing slant; signature component construction, including line directions and sequences; and apparent dynamics (such as qualitative level of fluency and relative pen force variations) within each of the signatures.
10.Reproduction specimen signatures were examined macroscopically to study (and note) the pictorial and structural features of the signatures as described in the previous paragraph insofar as was possible within the limitations of examination of reproductions.
11.The specimen signatures were inter‑compared with one another to determine whether or not there was any evidence to suggest more than one writer and to consider the range of variation of the signatures as a group.
12.The questioned signatures were examined in the manner described in paragraph 9 above. Each of the four questioned signatures was compared with the acceptable set of specimen signatures to determine whether or not the various features in the questioned signature are within the range of variation of corresponding features in the specimen signatures. Similarities and/or differences were assessed and a conclusion reached as to the qualitative degree of support for propositions that each questioned signature was or was not written in original form by the writer of the specimen signatures.
[169] Exhibit 1, 4.
After conducting his examination, Dr Strach found that for each questioned signature on the loan facility letter for the September 2018 Loan Agreement, there was strong support for the proposition that it was written by the writer of the specimen signatures attributed to Cristina Ceccon rather than for the alternative proposition that was written by another person. This conclusion is a level 2 conclusion on a scale used by Dr Strach for the results of signature hand writing comparisons, which scale he says is used in many European forensic science laboratories and elsewhere.
A copy of the scale that contains nine levels of conclusion is attached to Dr Strach's report in Appendix 'E'. A level 1 conclusion is that there is extremely strong support for the proposition that the questioned signature/hand writing was written by the writer of the specimens rather than for the alternative proposition that was not written by this person. A level 3 conclusion is that there is moderate support for this conclusion. A level 4 conclusion is that there is weak support for this conclusion. Level 5 is a finding that the comparisons are inconclusive (that is, the quality of levels of support for the conclusions that the question signature/hand writing was or was not written by the writer of the specimens cannot be distinguished). Levels 6 to 9 are conclusions: from level 6, there is weak support for the proposition that the questioned signature/hand writing was not written by the writer of the specimens; to level 7, there is moderate support; to level 8, strong support; and finally, to level 9, there is extremely strong support for that conclusion.
The reasons why Dr Strach concluded that there was strong support for the proposition that the four questioned signatures had been written by the writer of the undisputed specimen signatures was first, the amount of writing in the signatures (questioned or specimen) was small, with only a moderate level of complexity. It can be clearly seen from all of the signatures on the questioned and undisputed documents that the signature C Ceccon did not appear to be complicated script. To an untrained eye, each signature on all these documents can be easily read as C Ceccon.
Dr Strach explained the consequence of this style of writing is that simulation by another person of the normal genuine signature style of the writer, can in principle occur more easily and be less detectable than for more complex signatures. He also said that the simplest signature style can make it harder to distinguish between simulation by another person in disguise to the writer of the specimens.[170]
[170] Exhibit 1, 5, par 15 and ts 103.
Second, Dr Strach found that the specimen signatures attributed to Cristina Ceccon exhibited a large range of variation in terms of some structural features and also (for the originals) with the apparent pen force used to write them. Nevertheless, he found there were linking features between all of the specimen signatures.[171]
[171] Exhibit 1, 6, par 23.
Dr Strach examined the letters on each of the signatures on the specimen documents and the questioned document, and the effects of pen force by reviewing the backs of the paper of the four questioned signatures and the specimen signatures using oblique lighting under a microscope. He noted there was a substantial degree of variation in the embossment in writing particular letters, but saw there was consistency between the questioned signatures and most of the specimen signatures.[172] When he gave oral evidence, Dr Strach explained that this feature was important because when a person imitates a pictorial image of a signature, there is quite often associated a very uniform pen pressure so that the natural habit of the writer varying the pen pressure gets lost in the simulation process.[173]
[172] Exhibit 1, 4 and 8, pars 9 and 29.
[173] ts 76 ‑ 77.
Dr Strach also explained when giving oral evidence that it is not uncommon to find some degree variation between a person's signatures, and that the degree of variation varies from person to person. He said some people have a very uniform style of signature, and other people have quite varied signatures.[174] This point was made particularly clear when Dr Strach was cross‑examined. During cross‑examination, Dr Strach was asked to look at three signatures on three specimen documents, which showed there was variation across each of those signatures. Importantly, Cristina Ceccon did not claim any of these three documents were not signed by her. These documents were: a copy of an acceptance of a power of attorney, a copy of her driver's licence and a copy of the signature page of her passport.[175]
[174] ts 76.
[175] ts 93.
In reaching a conclusion on the issue of whether or not each questioned signature was or was not written by the writer of the specimen signatures in his report, Dr Strach took into account the following considerations:[176]
(i)I observed a strong overall resemblance of each of the question signatures to the forms of the specimen signatures. From this general observation, it is reasonable to state that each question signature was almost certainly written by a person having some detailed knowledge of the general style of signature, as exhibited in the specimens.
(ii)I observed many similarities (or part similarities) of details of form between all parts of two of the questioned signatures (on Q1.6 and Q1.7) and most (but not all) parts of the other two questioned signatures (on Q1.5 and Q1.8) in relation to the specimen signatures (as described at paragraph 25). Furthermore, I observed similarities in general features (as described at paragraph 28), in fluency and in the effects of pen force variation between the questioned and specimen signatures (as described at paragraph 29).
(iii)I also observed two slight differences, one on each of the questioned signatures on Q1.5 and Q1.8 in relation to the specimen signatures (as described at paragraph 26 above). Furthermore some of the similarities found are 'part similarities'. Given the slight nature of these differences, the slight departures from the forms of the specimen signatures that exist within the features marked as part similarities and the variation that exists within the specimen signatures I am of the view that these features are of little significance.
31.The observations are in accord with expectations if each of the questioned signatures was written by the writer of the specimen signatures, albeit with a variation slightly beyond what is observed within the specimens for two of the questioned signatures (part of propositions (i) described at paragraph 18 above). However, given the rather simple nature of the general signature style such observations might in theory also occur for each questioned signature if another person had produced it in what would have to be regarded as a highly skilful simulation (part of proposition (ii) described at paragraph 18 above). I am of the opinion that the observations made are much more likely to occur within proposition (i) than within proposition (ii).
[176] Exhibit 1, 8 ‑ 9, pars 30 ‑ 31. Note each of the questioned signatures on the loan facility agreement dated 24 August 2018 were numbered by Dr Strach as Q1.5, Q1.6, Q1.7 and Q1.8 each of which are reproduced on page 122 of the report as Q Chart 1.
These opinions of Dr Strach emerge from his examination of the disputed signatures and the specimen signatures and can be summarised as:[177]
(a)there is a strong overall resemblance of each of the questioned signatures and the specimen signatures;
(b)there are many similarities (or part similarities) of details of form between all parts of two of the questioned signatures and most (but not all) parts of the other two questioned signatures in relation to the specimen signatures, as well as similarities in general features, in fluency and in the effects of pen force variation between the questioned signatures and the specimen signatures; and
(c)there are two slight differences between two of the questioned signatures and specimen signatures, which features are of little significance.
[177] Exhibit 1, 8, par 30.
When it was put to Dr Strach that there were substantial differences in the way the specimen signatures were constructed, he did not agree that there were substantial differences, and said:[178]
The comparison is done with all of the specimen signatures. The process is whether features within each questioned signature can be accounted for within the range of variation that's seen in specimen signatures.
[178] ts 99.
When it was put to him in cross‑examination that there was a substantial variation in the specimen signatures, he referred to his findings at par 23, in which he said there was a large variation in terms of some of the structural features and also, for the originals, the apparent pen force used to write them, but then went on to say that the variation that exists within the specimen signatures are of little significance.[179] When questioned further about what is stated in his report, he said:[180]
I'm saying there is a wide variation in the specimen signatures, so it's not surprising to find something a little bit beyond what you find in those specimen signatures in two of the questioned signatures.
6.4 Should the expert opinion of Dr Strach be accepted?
[179] ts 104.
[180] ts 105.
The short answer to this question is yes.
Counsel for Cristina Ceccon put forward eight reasons why Dr Strach's evidence should not be accepted. These reasons and my findings in respect of each point are as follows.
First, counsel was critical of Dr Strach because it was evident from his report, and he conceded, that he had received instructions from Celtic's instructing solicitors, which were not included in the report. The difficulty with this submission is, as counsel for Celtic informed the court, Dr Strach's report was served on Cristina Ceccon at the end of October 2020 and there had been no request for further discovery relating to the instructions given to Dr Strach, and there was no call for documents containing any instructions not set out in his report during the course of the trial. Consequently, in the absence of a request and call for the relevant documents, this submission must be rejected.
Second, Dr Strach could not recall how many photographs that he had taken of the back of documents containing original signatures using oblique lighting. Consequently, it is put that his opinion should not be accepted because he based his conclusion on materials that are not before the court. In addition, it is submitted that he included only photographs of three original signatures in his report, which signatures are submitted to not be uniform. The difficulty with these submissions and why this submission should not be accepted, is that:
(a)Dr Strach took oblique lighting photographs of the back of each of the four questioned signatures and the back of signatures on three original documents with undisputed signatures, being three off market transfer forms;[181]
(b)irrespective of how many photographs Dr Strach took of the back of documents containing original signatures, his uncontradicted evidence was that he had, in fact, examined all of the original documents on their face, and also on the back to observe the pen pressure affects;[182]
(c)his finding was that many of the pen pressure effects on the original specimen signature documents showed the type of effect that was illustrated in the photographs in Chart 12;[183] and
(d)it was Dr Strach's opinion that the pen pressure on the back of the documents significantly varied, but there was general similarity of such variation of embossment effect associated with the questioned and specimen signatures.[184]
[181] Exhibit 1, 127, Chart 12 and ts 88 ‑ 89.
[182] ts 89.
[183] Exhibit 1, 127, Chart 12 and ts 89.
[184] Exhibit 1, 8, par 29.
Third, a submission was made that when Dr Strach gave oral evidence, he said that there was some substantial variation within the specimen signatures, which language was inconsistent with the language he used in his report that there was a large variation in terms of some of the structural features of the specimen signatures.[185] However, when it was put to Dr Strach that he had not written in his report that there was a substantial variation in the specimen signatures, Dr Strach reiterated that he had said in his report there was a large range of variation in terms of the structural features and the pen pressure variation. Consequently, it appears clear that it is Dr Strach's opinion that the difference between a substantial variation and a large variation is merely semantic.
[185] ts 90 ‑ 91 and Exhibit 1, 6, par 23.
Fourth, a submission was made that Dr Strach did not exclude the possibility that the four disputed signatures were written by more than one person. However:
(a)when it was put to Dr Strach that the specimen signatures looked like they had not been written by the same person, he said that he did not form that view;[186]
(b)when Dr Strach was asked whether it was plausible that someone who had seen and had knowledge of Cristina Ceccon's signature could imitate her signature, he said, yes, it was plausible,[187] but was still his firm opinion that there was strong support for the proposition that the questioned signatures were written by the writer of the undisputed specimen signatures.
[186] ts 96 ‑ 97.
[187] ts 86.
Fifth, a submission was made that Dr Strach's opinion was infected by confirmation bias because he had been given a bundle of documents to examine, one of which included an affidavit sworn by Cristina Ceccon in these proceedings. The difficulty with this submission is that part of Dr Strach's methodology is that he took steps to avoid confirmation bias, and it was his evidence that although he was sent copies of documents, he did not read the documents but concentrated on the signatures within the documents.[188]
[188] ts 80; see also ts 88.
Sixth, a submission was made that Dr Strach failed to directly answer the questions he was asked (by Celtic's solicitors in their instructions) about the four questioned signatures and the answer he gave was wholly subjective and speculative. There is no substance to this submission. This is because:
(a)Dr Strach considered whether the questioned signatures on the loan facility letter dated 24 August 2018 were genuine by comparing each of the four signatures that appear on the loan facility letter above the typewritten name of Cristina Ceccon, with the specimen signatures in the name C Ceccon, having assumed that each of the specimen signatures were genuine signatures of Cristina Ceccon, and found that there was strong support that the questioned signatures were written by the writer of the specimen signatures attributed to Cristina Ceccon; and
(b)Dr Strach said there was an element of subjectivity to his conclusion. This was because, as he explained in his report, a term such as 'strong support' is not based on a mathematical or statistical calculation but rather is a quality of expression and therefore there was an element of subjectivity in his determination (as a specialist in the field of examination of signatures) of the strength of the evidence that supported the particular proposition referred to, based on his examination of the documents submitted.[189] In cross‑examination, Dr Strach went on to explain that although his conclusion (in (a) above) has an element of subjectivity, his examination of the features of each of the questioned and specimen signatures was the most objective part of the process because the observations he made are factual features of what he observed under a microscope.[190]
[189] Exhibit 1, 4 ‑ 5, 13.
[190] ts 106.
Seventh, a submission was made that Dr Strach's conclusions must be found to be substantially limited because he was instructed to confine himself to the genuineness of the questioned signatures and to assume that all signatures on the specimen signatures were genuine signatures of Cristina Ceccon. Cristina Ceccon claims that the onus is on Celtic to prove the assumption.
Whilst it is generally correct to observe that where a defendant claims in proceedings that a particular document sought to be relied upon by the plaintiff is not authentic, it is for the plaintiff to prove the authenticity of the document. However, in circumstances where:
(a)Cristina Ceccon was on notice by the service of Dr Strach's report by 30 October 2020 that Dr Strach had been provided with 23 original documents and nine copy documents that contained undisputed signatures of hers; and
(b)where consent orders made by the court required Cristina Ceccon to give notice to Celtic if she disputed the authenticity of any document that Celtic intended to include in the trial bundle by 11 June 2021, and where no notice was given;
it must necessarily follow that the effect of orders 8, 9 and 10 of the consent orders made on 3 February 2021 was to relieve Celtic of the onus to prove the authenticity of any documents containing the specimen signatures.
Eighth, a submission is made that Dr Strach's evidence should not be accepted because John Ceccon had his own key to the City Beach property[191] and would have been able and was in a position to write the relatively simple signature of someone bearing his surname, and this could have been the reason why Dr Strach observed many similarities in the specimen signatures and the disputed signatures. Plainly, this submission should be rejected. It is simply speculative, was not a proposition put to Dr Strach in cross‑examination, and in any event, is contrary to the evidence given by Dr Strach that his observations of the pen force and variation of embossment effect undertaken under oblique light of the original specimen signatures and the disputed signatures is usually lost when a person simulates the signature of another person.
[191] ts 223.
7.0 Was there consideration for the September 2018 Loan Agreement?
The short answer to this question is yes.
In her defence and counterclaim, Cristina Ceccon pleads in par 3(c) that she did not receive any moneys from Celtic, whether under the September 2018 Loan Agreement, or otherwise.
In par 5 of the Further Amended Statement of Claim, Celtic pleads that in performance of the September 2018 Loan Agreement, Celtic advanced $1,682,000 to Cristina Ceccon and John Ceccon by applying that amount to repay a debt owed pursuant to the Second Loan agreement, between Celtic as lender and Cristina Ceccon and John Ceccon as borrowers. Cristina Ceccon contends this is a plea that the consideration provided was past consideration.
If an act claimed to be consideration takes place in the past, it is only past consideration, and as such is not valid consideration.[192]
[192] Re Gem Meat Productions Pty Ltd (in liq); Ex parte Lindquist [1960] WAR 105.
Celtic does not rely upon its plea in par 5 as constituting consideration, and claims that consideration did move from Celtic as promisee for the September 2018 Loan Agreement, and that was a compromise to waive the interest accrued during the term of the Second Loan (which agreement was reached between Jason Peterson and John Ceccon).
The loan account statement for the Second Loan records that interest became due and payable on the balance outstanding on the loan in monthly instalments from 19 March 2018 to 24 August 2018, which amount totalled $87,571.59. This amount was recorded on the statement as 'interest refunded in good faith', on the same day that the loan facility letter for the September 2018 Loan Agreement is dated. Regard must also be had to the fact that the parties entered into the September 2018 Loan Agreement because, at the request of John Ceccon, the security Celtic held over the Yokine property for the Second Loan was released and it was agreed that new security was to be taken over the City Beach property.
It is clear that the agreement to waive or forgo interest on the existing loan and for the balance outstanding on the existing loan to be transferred to the new loan was not past consideration but executed consideration, and as such, constituted valuable consideration for the September 2018 Loan Agreement.
In any event, even if it was the case that waiver of the interest was provided before the September 2018 Loan Agreement, the waiver of the interest by Celtic and the amount agreed to for the September 2018 Loan Agreement were part of the same transaction, and as such, cannot constitute past consideration, it is executed consideration.[193]
[193] Huntingdale Village Pty Ltd (Receivers and Managers Appointed) v Corrs Chambers Westgarth [2018] WASCA 90 [81] ‑ [86] (Martin CJ); see also Marsden v Barclays Bank plc [2016] 2 Lloyd's Rep 420 [31].
8.0 Conclusion
For the reasons I have found, Cristina Ceccon is a party to the September 2018 Loan Agreement, and has breached the terms of the agreement by failing to repay the outstanding amount owing on the loan, which has caused Celtic loss and damage.
I will hear the parties further as to the orders that should be made to reflect these reasons for decision, including orders as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
VV
Associate to the Honourable Justice Smith
21 JUNE 2022
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