Cherrycoast Enterprises Pty Ltd v Dr Francis John Roberts as Executor of the estate of Kennyth Peter Roberts (Dec)

[2002] WASC 28

CHERRYCOAST ENTERPRISES PTY LTD -v- DR FRANCIS JOHN ROBERTS as Executor of the estate of KENNYTH PETER ROBERTS (Dec) [2002] WASC 28

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2002] WASC 28
Case No:	CIV:1467/2001	Heard:	6-8 FEBRUARY 2002
Coram:	McKECHNIE J	Delivered:	11/02/02
No of pages:	17	Judgment Part:	1 of 1
Result:	Plaintiff's claim dismissed
Category:	B
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Parties:	CHERRYCOAST ENTERPRISES PTY LTD (ACN 054 800 216) DR FRANCIS JOHN ROBERTS as Executor of the estate of KENNYTH PETER ROBERTS (Dec)
Catchwords:	Licence agreement Payment in advance Whether receipt forged Turns on own facts No new principles
Legislation:	Nil
Case References:	Nil C­Shirt Pty Ltd v Barnett Marketing & Management Pty Ltd & Ors (1997) ATPR (Digest) 46­168 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 Hart v McDonald (1910) 10 CLR 417 Hawkins v Price [1947] 1 Ch 645 Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326 Johnson Matthey v AC Rochester Overseas Corp (1990) 23 NSWLR 190 Maredelanto Compania Naviera SA v Bergbau-Handel GmbH (The Midalis Angelos) [1971] 1 QB 164 Mills v Stokman (1967) 116 CLR 61 Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 3 All ER 479 Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Warmington v Miller [1973] QB 877

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION : CHERRYCOAST ENTERPRISES PTY LTD -v- DR FRANCIS JOHN ROBERTS as Executor of the estate of KENNYTH PETER ROBERTS (Dec) [2002] WASC 28 CORAM : McKECHNIE J HEARD : 6-8 FEBRUARY 2002 DELIVERED : 11 FEBRUARY 2002 FILE NO/S : CIV 1467 of 2001 BETWEEN : CHERRYCOAST ENTERPRISES PTY LTD (ACN 054 800 216)

Plaintiff

AND

DR FRANCIS JOHN ROBERTS as Executor of the estate of KENNYTH PETER ROBERTS (Dec)
Defendant

Catchwords:

Licence agreement - Payment in advance - Whether receipt forged - Turns on own facts - No new principles

Legislation:

Nil

Result:

Plaintiff's claim dismissed

(Page 2)

Category: B

Representation:

Counsel:

Plaintiff : Mr M Levitan
Defendant : Mr C B Edmonds SC & Mr D J Miller

Solicitors:

Plaintiff : Melvyn Levitan
Defendant : Marks and Sands

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

C­Shirt Pty Ltd v Barnett Marketing & Management Pty Ltd & Ors (1997) ATPR (Digest) 46­168
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Hart v McDonald (1910) 10 CLR 417
Hawkins v Price [1947] 1 Ch 645
Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326
Johnson Matthey v AC Rochester Overseas Corp (1990) 23 NSWLR 190
Maredelanto Compania Naviera SA v Bergbau-Handel GmbH (The Midalis Angelos) [1971] 1 QB 164
Mills v Stokman (1967) 116 CLR 61
Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 3 All ER 479
Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Warmington v Miller [1973] QB 877

(Page 3)

McKECHNIE J:

The parties

1 The late Mr Kennyth Peter Roberts was the owner of land known as No 21, Lot 5, Dayrell Road, Nowergup ("Lot 5"). The defendant, Dr Francis John Roberts, is the executor of his brother's estate.

2 The plaintiff Cherrycoast Enterprises Pty Ltd ("Cherrycoast") is a company, the directors of whom are Francesco Carmello (Frank) Mignacca and Vincenzina (Zina) Mignacca Gangemi. Their father, Carmello Mignacca ("Mr C Mignacca"), is a master builder and describes himself as "the consult" to Cherrycoast. He is 71. I gained the impression during the course of his evidence that he is in fact the driving force in Cherrycoast and other Mignacca entities. This impression was reinforced by the evidence of his two children, Frank and Zina, who, though notional directors, took little part in the business arrangements. It is difficult to separate the operations of Cherrycoast from other entities within the Mignacca family, so I will refer generally to the Mignacca interests when speaking about the business carried on by them.

3 One such business is the quarrying of limestone and the production of reconstituted limestone and cement mixed blocks.

Background

4 In 1998 the Mignacca interests were carrying out quarrying and subsequent manufacture of reconstituted limestone blocks pursuant to a licence agreement with Dress Circle Farm Pty Ltd on a property near Lot 5.

5 The supply of limestone on that block was coming to an end and the Mignacca interests wished to secure a further supply of stone.

6 According to Mr C Mignacca, in 1998 he became aware that Lot 5 was for sale. He entered into negotiations with a real estate agent Mr Chris Brown for the purchase of the lot. Those negotiations did not come to fruition.

7 Subsequently, while doing work for the agent Mr Brown, Mr Roberts arrived and asked if Mr C Mignacca could carry out work on Lot 5. Mr Roberts wanted fire-breaks, other work and rocks put each side of the gate so that he could put in a gate and lock. From that meeting, matters

(Page 4)

progressed between the parties for Mr Roberts to lease to the Mignacca interests the property at Lot 5 for the purpose of quarrying limestone.

8 Mr C Mignacca arranged for an engineering firm and for surveyors to draw up a plan. He engaged Mr Lindsay Stephens as a consultant. Mr Stephens, who trades as Landform Research, did an amount of work in progressing the quarry towards an application to the City of Wanneroo. Mr Stephens, whose evidence I accept, gave evidence that he did some preparatory work on Lot 5, but was not asked to continue work in 1999 or 2000.

9 Ultimately, in a deed, expressed to have been made on 10 April 1999, Mr Roberts and Cherrycoast entered into a Licence Agreement. Mr C Mignacca was unable to say who typed the agreement. He said neither he, nor any member of his family can type, so it may have been typed by his accountant. He gave evidence that he had used an existing agreement, probably the Dress Circle Farm Pty Ltd Ground Lease, as a precedent, blanking out the financial details and giving it to Mr Roberts.

10 Mr Roberts had given to Mr C Mignacca at some stage, a document entitled "Sign" (exhibit 58) suggesting certain changes chiefly of a typographical nature. It is noted, for example, that in cl 6.1, the word "wishes" is spelt "whishes". Mr Roberts drew attention to this error. Another typographical error occurred in par 4.11 where the word "for" was typed as "fore". In exhibit 20, a form of the Licence Agreement signed and witnessed, but not signed by Cherrycoast directors, Mr Roberts has made these corrections.

The licence agreement

11 The Licence Agreement (exhibit 21) provided (in the schedule p 13) that the licence year shall commence on 1 July 1999 and expire on 30 June 2004. Two further terms of five years each were provided for.

12 The rental was as follows:

"6. TEN THOUSAND DOLLARS ($10,000) per annum payable by equal and successive quarterly payments in advance of TWO THOUSAND, FIVE HUNDRED DOLLARS ($2500) and at that rate for any broken periods of less than THREE (3) months with the first of such payments due on the 1ST day of JULY 1999 and

(Page 5)

thereafter on the first day of each and every successive third calendar month."

13 The Licence Agreement had an entire agreement cl 6.10 "Exclusion of Previous Agreements.":

"The covenants and agreements contained or implied in this deed shall comprise the entire agreement between the parties and the parties agree that no other covenants, warranties, agreements, representations or otherwise in respect of the Licensed Land or otherwise shall apply to this transaction by reason of any promise, oral statement, representation, warranty, covenant or undertaking given or made by the Owner or his agents or employees on or prior to this deed becoming enforceable by any party."

14 The Licence Agreement clearly was intended to take effect from 1 July 1999. There is no evidence that Mr Roberts ever gave consent in writing, as required under cl 6.10, or otherwise, to an extension of the commencement day. Any extension potentially deprived him of royalties due under the agreement.

15 To complete the narrative, Cherrycoast asserts that shortly prior to the execution of this Licence Agreement, Mr Roberts asked Mr C Mignacca whether he could loan him the sum of $15,000 in cash by way of an advance for the rental payments. After some discussion, the directors of the company agreed and from their combined resources was found the sum of $9000.

16 Mr Giacomo (Jack) Fazio ("Mr J Fazio") was approached by Mr C Mignacca and agreed to contribute $3500. Mr C Mignacca then advised Mr Roberts they could give him $12,500 in cash, but he would require a receipt. At no stage did Mr Roberts indicate why he wanted the money.

17 Mr C Mignacca said that on 10 April 1999, at some time in the morning, Mr J Fazio attended at Lot 5 with $3500 in cash. Shortly after he arrived, Mr Roberts arrived in a yellow van. Mr Roberts had a blue folder (exhibit 65) containing the completed Licence Agreements (three copies) and a receipt (exhibit 18) for the money which already was typed out and signed by Mr Roberts. The money was given by Mr C Mignacca to Mr Roberts. Mr J Fazio witnessed this transaction. Mr Frank Mignacca, who was further away, witnessed some of the events. Both these men subsequently confirmed this evidence.

(Page 6)

18 Also included in the blue folder was an original Application for Approval to Commence Development, signed by Mr Roberts, together with an Application for Excavation Licence, also signed by Mr Roberts and dated 10 April 1999 (exhibit 19).

19 According to Mr C Mignacca, it was not the intention of Cherrycoast to immediately develop the Lot 5 quarry because the Dress Circle Farm quarry was still being worked. It was the intention to start work on Lot 5 in about 18 months time.

20 Unbeknown, it is said, to Mr C Mignacca, Mr Roberts died in on 2 February 2000.

21 In August 2000, Mr C Mignacca became aware of a notice of application to quarry on Lot 5 by Italia Limestone. He stamped the Licence Agreement (exhibit 21) on 21 August 2000:

"Because the law don't say you got to stamp immediately. The law say doesn't matter when you stamp provided you pay penalty."

22 Mr C Mignacca made enquiries of the City of Wanneroo and consulted his solicitor who, on 28 August 2000, wrote to the City of Wanneroo (exhibit 34) pointing out that there was a written Licence Agreement in existence.

23 This action elicited a response from Dr Roberts. In response, Cherrycoast's solicitor forwarded Dr Roberts a copy of the Licence Agreement and the receipt for rent. Dr Roberts responded on 6 September 2000 (exhibit 37) with a series of three questions as follows:

"1. The receipt document specified $12,500 in cash. Did that mean, strictly speaking Banknotes and coins, or was it in any other form such as a cheque or some credit to an account etc? It would be helpful for me to know the exact nature of the payment.

2. The receipt document does not appear to have been produced by my late brother as Kennyth is misspelt. He would not be expected to get it wrong. Hence I assume it was produced by another party. Did your client Mr Mignacca, or someone he delegated the task to, provide the receipt document for signing?

(Page 7)

3. Also I am curious to know why the receipt covered the first five payments whereas the agreement (Clause 6) called only for $2,500 at a time payments. Why would payments be made so far in advance? Can your client shed any light on this variation in the agreement?"

24 After taking instructions, Cherrycoast's solicitor replied on 18 September 2000 as follows (exhibit 38):

"... In answer to your queries I respond as follows:

1. Payment was made by means of bank notes.

2. The receipt was typed out at the same time that the Licence Agreement was executed and was typed up by my clients at that time; and

3. The amount was paid at the Deceased's request and my clients made the payment.

If you have any further queries please do not hesitate to contact my client."

25 On 12 October 2000, Mr C Mignacca wrote on a Cherrycoast Enterprises Pty Ltd tax invoice/statement letterhead (exhibit 43) to Dr Roberts, attaching a cheque for $2502 (exhibit 42) as rent for October, November and December 2000. He continued:

"... We intend to organize a fire break on the property, however, the lock on the gate seems to have been changed and we cannot access the property. Please organize a key to the existing padlock for the property and contact us to inform us of how we can retrieve the key. ..."

26 Dr Roberts engaged solicitors, Marks & Sands, who wrote back to Cherrycoast's solicitors on 16 October 2000 (exhibit 44) asserting that the Licence Agreement was not a contractually binding document, that the signature on the purported receipt was not that of the deceased, that no Application for Approval to Commence Development had been lodged with the City of Wanneroo.

27 After an interchange of correspondence and in due course these proceedings were commenced.

28 The plaintiff claims:

(Page 8)

"1. A Declaratory Order that the Licence Agreement dated 10 April 1999 is valid and subsisting subject to the Plaintiff paying the outstanding rent due to the Defendant within 30 days of this Declaration being made.

2. Damages;

3. Interest. ...

4. Costs"

The declaration is, in effect, one for specific performance.

The issues

29 The parties have agreed a statement of issues.

30 Some of these issues involve questions of law and other issues involve findings of fact. In the view I have formed of the facts, not all issues arise for decision.

31 The central issue concerns the events immediately prior to and including 10 April 1999. Put simply: Did Cherrycoast pay Mr Roberts the sum of $12,500 in cash on 10 April 1999, obtaining a valid receipt in return?

32 Mr C Mignacca has given direct evidence of the transaction. He is supported in part by the evidence of Mr J Fazio and Mr Frank Mignacca. Such an agreement to pay in advance is unusual. Mr Roberts did not know Mr C Mignacca well. He did not advance any reason for the loan of $15,000 in cash. There is no suggestion in the evidence that he linked his agreement to the licence with the payment of the money.

33 Of course it would have been an undoubted advantage to Mr Roberts to be paid in advance. There does not seem to be any corresponding advantage to the Mignacca interests to acquiesce, particularly if it was not their plan to develop the site immediately. It was difficult for them to raise the money. Part of it had to be borrowed from Mr J Fazio. One would have thought that it would have been easier to meet the advance payments from the normal income of the business as it arose.

34 There are a number of matters which impinge adversely on Mr C Mignacca's credibility. One is the letter written by his solicitor on 18 September 2000 (exhibit 38) in response to the direct question from Dr Roberts about the preparation of the receipt. Mr C Mignacca has

(Page 9)

sworn categorically that neither he, nor anyone associated with him, prepared the receipt. Because of his evidence, I considered that he had waived professional privilege in respect of instructions given as to that letter and allowed evidence to be led concerning the instructions given. His solicitor's note is consistent with the letter. Mr C Mignacca denies, however, that they were his instructions.

35 It is true that in February 2001 in a handwritten proof of evidence, exhibit 74, in respect of which I also held privilege had been waived, Mr C Mignacca's instructions were consistent with his sworn evidence. No step was taken on his instructions to correct the earlier "misleading" answer which had been given in the letter of 18 September 2000 (exhibit 38). There are other discrepancies in that proof of evidence with other parts of his evidence.

36 Then there is the receipt itself. There are a number of features about it before one proceeds to any forensic examination. First of all, Mr C Mignacca says that he only received a photocopy. Why? Why would Mr Roberts give Mr C Mignacca a photocopy? Surely he would give the original to Mr C Mignacca.

37 Then there is the content of the receipt (exhibit 18) which is as follows:

"10/04/1999

I Kenyth Peter Robertsof 80 Gibbs Rd Nowergup WA 6032,upon my request hereby acknowledge and accept receipt of $12500(twelve thousand five hundred dollars)in cash, from Mr Mignacca –on behalf of Cherrycoast Enterprises Pty Ltd in advance .Being for rent on lot no 5 Swan location no 3784 plan or diagram no 40456 certificate of title volume 1709 folio 569.Lease document executed on the 10/04/99 ,between myself and Cherrycoast Enterprises Pty Ltd.


I hereby accept and acknowledge payment of the above referred sum"

38 The spelling of the name Kennyth with a "y" is an unusual spelling. It is unlikely that any person, but particularly a person with a name spelt in an unusual manner, would misspell it. I recognise that it might be a typographical error. However, Mr Roberts was assiduous in detecting typographical errors in the draft Licence Agreement to which I have already made reference. I consider it highly likely that he would have detected and amended an error in his own name.
(Page 10)

39 There is the misdescription of the particulars of the property "plan or diagram 40456". It suggests the author of the note copied the Application for Excavation Licence signed by Mr Roberts and handed over at the same time. However, Mr Roberts did not make any mistake in the note and rough plan when he wrote out and gave to Mr C Mignacca (exhibit 59) where he refers to "Diagram 40456".

40 Then there are the receipt books (exhibit 77). Mr Roberts kept a number of them. Counsel for the Cherrycoast points to the absence of books from June 1999 and I take that into account. However, there was a book apparently used for miscellaneous receipts. It has receipts for 15 May 1999 and 10 July 1999. It is likely that that receipt book would have been available. More relevantly, however, the probabilities are that Mr Roberts would have simply used one of his own receipt books to write a receipt rather than go to the trouble of typing up a separate document. Furthermore, if Cherrycoast's version were correct, the simplest place to acknowledge receipt would be within the Licence Agreement itself.

Comments on Mr Carmello Mignacca

41 Mr C Mignacca is aged 71 and has been bankrupt. Although, on his evidence, he does all the work for the directors, tells them what he does and advises them what to do if they ask, it is clear from both his evidence and the evidence of Mr Frank Mignacca and Ms Zina Mignacca Gangemi that he (Carmello Mignacca) is in fact the operating mind and driving force behind the Mignacca interests, in whatever corporate entity they may be being carried on at any time.

42 Despite close cross-examination, Mr C Mignacca maintained throughout his evidence that he, and those associated with him, had never been responsible for the preparation of the receipt. In this he did not waiver. However, this stance is at substantial variance with letters written on his behalf from time to time by his solicitor and the instructions he gave in respect of those letters. I have referred to the letter of 18 September 2000 (exhibit 38). The instructions for that letter, exhibit 68, are consistent with the letter: "Receipt typed in client's office at the same time the lease was signed."

43 I note that in a letter dated 21 February 2001 (exhibit 49), Cherrycoast's solicitor wrote to Dr Roberts' solicitor:

"I confirm that currently I have in my file photocopies of a receipt dated the 10 April 1999 and my client appears to

(Page 11)

acknowledge that he does not have the original thereof ... I am currently awaiting my client's file to enable the relevant application to be drafted and shall revert to you should the original receipt come to light."

44 In a letter dated 4 February 2002 (exhibit 72), on the eve of the trial, Cherrycoast's solicitor wrote to Dr Roberts' solicitor:

"At the time I made my disclosure to yourself and Mr Chris Edmonds SC I said that a receipt was prepared by Mr Mignacca's younger son. This is not the same receipt that is the subject of the forgery. I never informed you that this fact was being confirmed by Mr Mignacca with his son. In any event my client's son has been unable to recall whether in fact he had written a draft receipt as my client's (sic) do not possess a computer. Further on my instructions if a receipt was drafted by Mr Mignacca's son it was to be a draft receipt to be used as an example for Mr Roberts to provide to my client upon receipt of the $12,500 payment in cash."

45 Mr C Mignacca was cross-examined as to his original instructions given to Mr Levitan, his solicitor, wherein Mr Levitan has recorded that $10,000 was said to have been paid for two financial years. This was Mr C Mignacca's original instruction. I am not inclined to put much weight on this apparent inconsistency which may be explained as short notes by the solicitor in relation to the Licence Agreement at a time of some urgency in taking instructions. I am not prepared to draw the inference from this instruction that there is an inconsistency.

46 Even before I turn to consideration of the forensic examination of the receipt purportedly given by Mr Roberts to Mr C Mignacca, I should say that I was not impressed by the truthfulness of Mr C Mignacca's evidence. The changing nature of his instructions to his solicitor, as made manifest by the letters from his solicitor from time to time, give rise to considerable doubts as to the circumstances whereby the receipt came into the possession of Mr C Mignacca and its authenticity. I simply do not believe that Mr C Mignacca gave consistent instructions to the effect that neither he nor his family had any part in the preparation of the receipt. Mr C Mignacca strikes me as a shrewd businessman. On his evidence his solicitor kept him informed as to progress and the correspondence. It is inconceivable that he would not have demurred immediately and instructed correcting letters to be written if he was aware that what was

(Page 12)

being conveyed was not in accord with his instructions to the effect that no party associated with him, nor he, had ever drafted the receipt.

47 As to the presence of Mr J Fazio, it is significant that in the proof taken on 27 February 2001 (exhibit 74) to which I have already referred, there is no mention of Mr J Fazio being present. The explanation advanced for this omission was not credible. In that proof Mr C Mignacca says: "I got the money from my son." This at variance with his evidence (confirmed by his son Frank and daughter Zina) that Frank contributed $3500, Mr C Mignacca $6000, and Mr J Fazio $3500 which Mr C Mignacca had arranged. Furthermore, no documentary evidence of any sort was produced to confirm the amounts of money said to have been provided and there was simply no document put before me.

48 Mr C Mignacca was cross-examined about the presence of Mr J Fazio who was not mentioned in earlier statements. His answers were not credible. It was logical for the witness to volunteer the information to his solicitor when being proofed. There was no reason to withhold it.

The execution of the lease

49 Both Mr C Mignacca and his son Frank and daughter Zina assert that the Licence Agreement was executed by Cherrycoast before being handed to Mr Roberts. This is important in the chronology Mr C Mignacca gives as to how the money came to be requested and handed over.

50 However, the partly executed Licence Agreement (executed by Mr Roberts alone) (exhibit 20) is strong evidence to the contrary. In any event, Mr Roberts would presumably require a copy of the executed Licence Agreement. He handed over three copies, according to Mr C Mignacca. In my view the substantial probabilities are that the Licence Agreement was executed by Mr Roberts first and by the Cherrycoast directors later.

51 Mr Frank Mignacca gave evidence that he and his sister Zina signed the Licence Agreement before Mr Roberts. He also gave evidence about the requirement to raise cash to pay Mr Roberts in advance. This evidence was confirmed by Zina. Additionally, Mr Frank Mignacca said that he was present at the quarry on the occasion when Mr Roberts arrived and was paid. Mr J Fazio was also present, having spoken to him on the morning. Mr Frank Mignacca was unaware of any receipt and any relevant time.

(Page 13)

52 The order in which the Licence Agreement was signed by the parties is an important element of Cherrycoast's case. On Cherrycoast's case, someone, no-one from Cherrycoast could say whom, prepared the draft Licence Agreement using the Dress Circle Farm Ground Lease as a precedent. The blank Agreement was given to Mr Roberts with copies. Mr Roberts returned the Agreement with the blanks, particularly the dates from which the Licence Agreement would run and the amount of rent and royalties, filled in. It was at this time that Mr Roberts asked for an advance of $15,000. The document executed by Cherrycoast was given back to Mr Roberts. Mr Roberts returned the copies of the Licence Agreement on 10 April 1999 in a blue folder (exhibit 65), in effect exchanging them for the payment of $12,500.

53 Comparison of the two documents indicates that exhibit 20 must have been a photocopy of exhibit 21 before the Cherrycoast directors executed it. This is confirmed by Mr Gregory, a handwriting expert called on behalf of Dr Roberts, who had conducted a forensic examination of the two documents and reached the same conclusion. In his opinion, a microscopic examination of exhibit 21 detected no signs of the signatures of the directors of Cherrycoast and the seal having been blanked out in order for the photocopy to take place. What follows from this is that it is probable, and I so find, that the Licence Agreement was in fact signed by Mr Roberts first, and by the directors of Cherrycoast later, contrary to their evidence. This being such a central issue, the credibility in particular of Mr Frank Mignacca about the subsequent visit to the quarry of both Mr J Fazio and Mr Roberts is adversely affected to the point where I do not accept his evidence.

54 I should mention briefly at this stage the evidence of Mr J Fazio. While the evidence of Mr J Fazio, standing by itself, is plausible, when I have regard to the whole of the evidence, I conclude that his evidence is not credible and should be rejected. There are important discrepancies, for example, between his evidence and that of Mr C Mignacca as to when the sum of $3500 was agreed. Mr C Mignacca puts the date much earlier. He then telephoned Mr Roberts who agreed to accept $12,500. On the other hand, Mr J Fazio says he did not tell Mr C Mignacca until 9 April he might be able to advance $3500.

55 I should add that I have heard evidence from Mr Vincenzo Fazio, Mr J Fazio's father, concerning a conversation which might be regarded as a prior inconsistent statement made on one occasion when Mr J Fazio was visiting his father's place.

(Page 14)

56 Mr J Fazio strenuously denied, in a way which was emphatic, that he and his father ever discussed any form of business. I am unable to conclude, listening to the two of them, which version is more probable than not and I therefore disregard any evidence of that conversation in assessing Mr J Fazio's credibility.

57 As I say, his evidence standing by itself is plausible but when regard is had to the whole of the evidence, I consider that it is not credible and should be rejected.

58 The ultimate issue is whether the receipt said to have been given by Mr Roberts to Mr C Mignacca is a fabrication. If it is a fabrication, then the credit of all the witnesses for Cherrycoast is severely undermined, this notwithstanding that some witnesses, including Mr J Fazio, did not purport to see the receipt. I have already dealt with the surrounding circumstances. I now turn to the receipt: exhibit 18.

59 The most important evidence is the signature above the typewritten misspelt name. I have received evidence from Mr Gregory to the effect that the name constitutes a fabrication by the placement of a reproduction of the same signature that appears on the Application for Excavation Licence dated 10 April 1999. Under the provisions of the Evidence Act 1906, s 31, I am able to accept expert evidence on the comparison of handwriting in order to assist me.

60 From my own observations, coupled with the evidence of Mr Gregory, I have no doubt the document was not signed by Mr Roberts and is in fact a forgery. Even before one examines the signature and compares it with the known signature of Mr Roberts on the Application for Excavation Licence, from which it is said to come, there are a number of unusual circumstances. These have been detailed by Mr Gregory, whose evidence I entirely accept. Indeed, he was not really challenged.

61 There are a number of matters which are also relevant. The first is that the document is a photocopy, in Mr Gregory's opinion, several generations from the first. As I have said, I accept the signature is a fabrication of the signature of exhibit 19, the Application for Excavation Licence.

62 On Mr Mignacca's own evidence, the Application for Excavation Licence (exhibit 19) was given to him by Mr Roberts. It is logical that Mr Roberts would have given it to him at the time he gave him the Licence Agreement which he had himself executed. That signature on the

(Page 15)

Application for Excavation Licence was used to create the fabrication in the manner described by Mr Gregory.

63 I have given very careful consideration to the possibility that Cherrycoast may have advanced $12,500 to Mr Roberts and not received a receipt. Then when Cherrycoast was ready to commence work in the middle of 2000, it discovered that Italia Limestone had an interest in the land and that Mr Roberts had died. Therefore a receipt was forged to advance, by dishonest means, what was nevertheless an honest claim. Although I have considered this carefully, I reject this theory, not least because there is no evidence to support it.

64 Mr C Mignacca has consistently denied any involvement in the preparation of receipt and there is no preponderant inference that the receipt was forged to advance an honest claim. In fact there are indications to the contrary.

65 Under the Licence Agreement Mr Roberts was entitled not only to rent, but also to royalties. It would have been in his interest that the matter proceed quickly. It was not suggested by Mr C Mignacca that Mr Roberts ever consented to a delay of at least a year, probably longer, before the procedures for obtaining development approval were finalised.

66 No reason is given in any evidence as to why a delay would be of advantage to Mr Roberts notwithstanding the fact that he had already been paid the rent portion in advance. Furthermore, Mr Roberts' dealings with Italia Limestone are suggestive that he did not regard himself as bound by any agreement with Cherrycoast.

67 In this, I use the statements attributed to Mr Roberts not as truth of their content, but simply as evidence of his state of mind. That state of mind suggests a man who did not consider there was a subsisting contract for a licence in respect of which he had been paid $12,500. I have not had regard to the diary entries. I have read them all and cannot comfortably understand the thought processes of Mr Roberts in his short entries so I have deemed it safer to put them to one side.

68 In the end, Cherrycoast has the affirmative burden of establishing that the Licence Agreement was in existence and that the essential term of payment of the rent in advance had been fulfilled by the payment to Mr Roberts of $12,500. I am quite unable to be satisfied on the balance of probabilities that any such payment was made.

(Page 16)

69 On the contrary, on the whole of the evidence, I consider that no payment of $12,500, or any other sum, was ever made. I am absolutely satisfied that the purported receipt was a forgery. There is no reason whatever for Mr Roberts to have forged a receipt. He would simply have given an original recept and signature.

70 There are compelling inferences that Mr C Mignacca forged the receipt himself or procured someone to forge it.

1. Motive

71 Cherrycoast is Mr C Mignacca's company in all but name. This is clear from the evidence of Mr C Mignacca, his son Frank and daughter Zina. Mr C Mignacca has advanced this claim, instructing solicitors and making all the decisions.

72 The Mignacca interests do have a benefit in acquiring a limestone quarry. The Dress Circle Farm quarry is all but worked out. The Mignacca interests have expensive limestone block machinery and other equipment.

73 The Lot 5 property appears to be a good source of limestone. Mr C Mignacca had taken no steps in respect of the Licence Agreement until August 2000 when he found out Mr Roberts had died. In order to preserve any claim under the executed Licence Agreement, which he did hold, he had to either explain why rent had not been paid since 1 July 1999 or show that rent had been paid, and in that I note that of course there would be nobody to argue to the contrary, Mr Roberts being dead.

2. Conduct

74 The conduct of Mr C Mignacca, reflected in the changing nature of the instructions provided by him alone to his solicitor, is evidence of an attempt to explain the shaky provenance of the receipt.

3. Opportunity

75 What is clear, and admitted by Mr C Mignacca, is that around 10 April 1999, Mr Roberts gave him a duly completed Application for Excavation Licence (exhibit 19). That was kept in a blue file in the constant possession of Mr C Mignacca. That document, or more precisely the original signature on that document, was used to forge the signature on the receipt: exhibit 18.

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76 I conclude and am satisfied to a high standard that Mr C Mignacca forged the receipt to advance the interests of Cherrycoast.

77 That forgery so infects Cherrycoast's action that, in combination with other evidence, such as the order in which the parties executed the lease, the lack of records, the lack of any apparent receival of money by Mr Roberts, as evidenced by no apparent change in his lifestyle or purchases, I consider that Cherrycoast has failed to establish its case.

78 I turn to the claim for relief.

Damages

79 Notwithstanding my finding that Cherrycoast has failed to prove its case, in any event, Cherrycoast has failed to prove any loss or damage flowing to Cherrycoast. The accounts of Cherrycoast Enterprises Pty Ltd for 2001 which were put into evidence, show a loss. However, no attempt has been made to link that loss with the loss of opportunity to engage in the Licence Agreement.

80 It is clear from Mr Stephens' evidence that while approval to quarry may ultimately be granted by the local authority, there are significant obstacles in the way. Mr Ferrara, on behalf of Italia Limestone, was more optimistic. I am not prepared to find that a licence would never be granted by the City of Wanneroo. However, on the evidence there is likely to have been some delay before a licence would be granted and some expense to be incurred. None of this material has been quantified in any way.

81 The state of the interrelationship between the companies comprising the Mignacca interests make it very difficult to quantify whether or not Cherrycoast has suffered any loss at all. I find that Cherrycoast has failed to prove it suffered any loss.

82 The claim for specific performance would fail on discretionary grounds. Damages would be an adequate remedy were they quantifiable. There is no evidence that Cherrycoast, though perhaps willing, is ready or able to proceed. The obscurity of the true relationship between the various Mignacca interests does not enable me to conclude otherwise and, of course, a claim founded on a forgery raises other reasons as to why specific performance would not lie.

83 The plaintiff's claim is dismissed.