Crossman v Macquarie Leasing Pty Limited

Court of Appeal

New South Wales

Case Title: Crossman v Macquarie Leasing Pty Limited

Medium Neutral Citation: [2013] NSWCA 155

Hearing Date(s): 26 March 2013

Decision Date: 06 June 2013

Before: McColl JA at [1];
Basten JA at [9];
Emmett JA at [65]

Decision:
The Court orders that:
1. The appeal be allowed.
2. The orders made by the District Court on 6 December 2011 be set aside.
3. The matter be remitted to the District Court for a further trial as to whether or not the agreement dated 4 April 2007 was signed by the appellant.
4. The respondent pay the appellant's costs of the appeal, other than the costs of the amended notice of appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords: CONTRACT - guarantee and indemnity in relation to commercial hire purchase agreement - whether appellant signed guarantee - where signature of another guarantor contrived
EVIDENCE - expert evidence as to authenticity of signatures - where expert found appellant's alleged signature contrived - nature of expert's mention of "self-simulation" - characterisation of expert evidence - where expert not cross-examined - where signature of another guarantor was contrived

Legislation Cited: Supreme Court Act 1970 (NSW), s 75A
Uniform Civil Procedure Rules 2005 (NSW), r 51.53

Cases Cited: Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447

Category: Principal judgment

Parties: Barry Ian Crossman - Appellant
Macquarie Leasing Pty Limited - Respondent

Representation

- Counsel: Counsel:
J Loofs - Appellant
E Glover - Respondent

- Solicitors: Solicitors:
Mahony Taren - Appellant
Douros Jackson - Respondent

File Number(s): CA 2012/72186

Decision Under Appeal

- Before: Sorby DCJ

- Date of Decision: 06 December 2011

- Court File Number(s): DC 2010/115816

JUDGMENT

McCOLL JA: I have read the draft reasons of Basten JA and Emmett JA respectively.
I agree with Emmett JA's reasons and the orders his Honour proposes.
As both Basten JA and Emmett JA explain, the appellant has made good his principal submission on appeal that the primary judge erred in that he misconceived and misstated the evidence of the appellant's handwriting expert, Ms Novotny: Basten JA (at [19] - [22]; Emmett JA (at [112] - [114]).
Ms Novotny's report was tendered without objection at the trial. She was not required for cross-examination. The appellant relied on her report at trial as being critical to his case that he had not signed the guarantee the respondent sought to enforce. He also argued that the respondent had not advanced a case which dealt with the critical thrust of the report and that to succeed the respondent had to prove, on the balance of probabilities, that he had self-simulated his signature on the critical documents.
The respondent's case at trial, insofar as Ms Novotny's report was concerned, was that her report had to be evaluated in the light of all the evidence as she had been unable to exclude the possibility that the appellant had written one or more of the questioned signatures as a "self-simulation". It did not seek at trial, or on appeal, to challenge Ms Novotny's conclusions or, other than as I have outlined, to diminish the weight of her report.
Basten JA has concluded that, notwithstanding the primary judge's erroneous treatment of Ms Novotny's evidence, there has been no miscarriage of justice which would warrant a retrial, because, on the basis of his analysis of Ms Novotny's report, that evidence was of little weight: Basten JA (at [54] - [63]).
However, with respect, none of the points Basten JA makes concerning Ms Novotny's evidence was advanced by the respondent either at trial or on appeal. Each is a matter which should have been put to her in cross-examination and as to which she may have advanced a satisfactory explanation.
In my view, in such circumstances, it is not open to this Court in the exercise of its rehearing function to conclude that Ms Novotny's report was of "little weight" and that, accordingly, there has been no substantial miscarriage of justice warranting a retrial: see generally Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447.
BASTEN JA: By a commercial hire purchase agreement dated 4 April 2007 ("the 2007 agreement") the respondent, Macquarie Leasing Pty Ltd, provided financial accommodation to a company with a printing business known as Graphfix Plus Trade Pty Ltd. On 2 June 2009 the respondent gave a notice of termination, based on the company's failure to maintain repayments under the agreement. On the same day it gave notice to three guarantors, including the appellant, asserting their contractual liability to rectify the arrears.
On 10 May 2010 the respondent commenced proceedings in the District Court claiming an amount of approximately $116,000 from each of the guarantors, being the appellant, his wife Ms Jann Crossman and their company, Barry & Jann Graphics Pty Ltd.
The 2007 agreement was executed on behalf of Graphfix Plus Trade by the appellant and Mr Warwick Taylor, each of whom was a director of that company. There was no dispute that the company had entered into the 2007 agreement and had failed to comply with its obligations: Defence, paragraphs 2-4. Both the appellant and Ms Crossman signed as directors of the guarantor company, as did they and Mr Taylor, as guarantors in their personal capacities. Both the appellant and Ms Crossman denied that they had signed and were bound by the guarantees. On the pleadings, it appeared that the appellant accepted that he had signed the agreement on behalf of the borrower, but not the guarantees. The defence was filed on 2 August 2010. On 16 August 2010, the solicitor for the appellant instructed a handwriting expert that all his signatures on the 2007 agreement and the guarantees were forgeries. No amended defence was ever filed.
The trial judge accepted that the signatures purporting to be those of Ms Jann Crossman were quite different from specimen signatures she provided to an expert and was satisfied on the balance of probabilities that the signatures on the guarantees were not hers: at [45] and [49]. Accordingly, the claims against her and against the company on whose behalf she had signed were dismissed: [56] and [57]. There is no appeal against those orders.
The trial judge was satisfied, however, that the signature of the appellant on his guarantee was placed there by him and accordingly he was bound by the guarantee. The sole issue on the appeal was whether the trial judge erred in that factual finding. (No issue was raised as to his sole liability as one of three intended guarantors.)
There were two respects in which the reasons given by the trial judge were inaccurate. The appellant asserted that these errors warranted not merely that the judgment against the appellant be set aside, but that there be judgment in favour of the appellant. Recognising the difficulties with the latter proposition, in the course of the appeal the appellant sought leave to seek other relief in the alternative, namely a retrial. There was, however, ample support for the conclusion reached by the trial judge and the appeal should be dismissed.

Significance of errors

The evidence relied upon by the respondent to demonstrate the authenticity of the appellants' signatures fell into two categories, namely: (a) events and circumstances up to execution of the 2007 agreement, and
(b) post-agreement conduct of the appellant.
The appellant relied at trial upon his own evidence as to the circumstances both before and after the execution of the agreement and upon a report of a forensic document and handwriting examiner, Ms Michelle Novotny. There was a degree of obscurity in respect of Ms Novotny's opinion in relation to the signatures by which the appellant supposedly executed the agreement, but she was not required for cross-examination and accordingly did not give oral evidence.
After reviewing the evidence, the trial judge identified a number of matters which supported the view that the appellant had signed the agreement. The factors were identified at [37] in the following terms:
"The evidence establishes to my satisfaction on the balance of probabilities that, at the time of the signing of the Agreement, Mr Crossman:
(1) had had experience in signing an indemnity and guarantee in relation to at least one loan in the past;
(2) was aware from Mr Taylor that a loan application to Macquarie Leasing for $140,000 was to be made, the reason for the loan and the purpose to which the loan would be utilised;
(3) had signed documents given to him by Mr Burgess as he stated in his statement to police;
(4) was aware that when the $128,000 was deposited in the Graphics [sic] bank account it was not the correct amount applied for;
(5) when the $140,000 was ultimately deposited in the Graphics [sic] bank account Mr Crossman did not question Mr Taylor as to where such a large sum may have come from;
(6) did not, from the date of the first repayment of $2989.91 up until the last on 4 March 2009, question why such repayments were made to Macquarie Leasing;
(7) when spoken to by police in June 2007 (about two months after the documents were signed), about possible fraudulent activities by Mr Burgess, did not check any of the documents he said Mr Burgess had asked him to sign nor did he give the documents to police."
The significance of some of these factors will be explored below: their relevance for present purposes is that the last four items involved post-execution conduct and therefore were not extant "at the time of the signing of the Agreement". However, the mistake was clearly an infelicity of expression and cast no doubt on the validity of the findings. The first error can thus be acknowledged and dismissed as immaterial.
The second error was more significant, and occurred in the following passage, at [38]:
"Taking into account the expert's opinion that some of the signatures she examined were 'self-simulations' and without any explanation before me from Mr Crossman as to why he would simulate or fake his own signature, I have reached the conclusion that, on the balance of probabilities, Mr Crossman did sign the Guarantee and Indemnity documents for the Macquarie Leasing loan."
There is no doubt that this passage misstated the evidence of Ms Novotny. Ms Novotny had been given a number of specimen signatures of the appellant (which she referred to as "the Barry specimens") and had been asked to compare them with signatures taken from the agreement. She accepted that "[i]ndividual and collective comparative examinations of the questioned signatures in the name Barry Crossman and the Barry specimens revealed similarity in overall pictorial resemblance between them": Report, par 21. However, she also concluded from microscopic examination that "[n]otwithstanding the overall pictorial resemblance ... it is clear from the nature of the differences observed that the questioned signatures were not written in the normal style depicted by the Barry specimens": par 24. She concluded at par 25:
"It should be noted that while these observations allow a strong conclusion to be expressed as to the method of production of the signatures (ie simulation), in the context of these signatures, they do not allow for a strong conclusion as to who wrote them. Given the contrived nature of the questioned signatures (at least on Q1), scientifically, I cannot determine who wrote the signatures. For this reason, I am unable to express a conclusion in probability terms. The simple explanation for my observations is that the questioned signatures (at least on Q1) are the product of simulation by a person(s) other than Mr Crossman. However, the possibility must be considered that one or more of those questioned signatures was written by Mr Crossman as a 'self-simulation'."
It is clear that Ms Novotny was not expressing the opinion that the signatures were "self-simulations" but rather that the lack of "dynamic fluency" of the questioned signatures created by "interruptions caused by the pen stops and/or pen lifts" (par 22) allowed the possibility that they had in fact been executed by the appellant, rather than by another person seeking to copy his signatures.
It was also submitted, with justification, that since the appellant's case was that he had not signed the relevant document, he could hardly be expected to explain why he would purport to simulate his own signature. A possible inference might have been that he did so with the intention of later denying that he had signed the document, although, depending on the circumstances, the explanation might be thought implausible. More importantly, the trial judge drew no inference as to the possible reason and, in all likelihood did not intend to suggest that he accepted "self-simulation" as having been established. Nevertheless, the apparently erroneous approach cannot readily be explained in this way or treated as immaterial. It follows that there must be a retrial unless this Court, exercising its powers under s 75A of the Supreme Court Act 1970 (NSW), can properly resolve the issues for itself.
The trial judge must have made a credit finding against the appellant. In particular, the trial judge must have rejected the unequivocal evidence of the appellant in his affidavit of 21 April 2011 (eg at par 26) that the signatures and initials appearing on the commercial hire purchase agreement were not his. However, that description oversimplifies the manner in which the trial judge addressed the issue and the manner in which this Court should properly address the issue. As will be explained below, the strong position adopted by the appellant in his affidavit was abandoned in his oral testimony. Further, the global findings made by Ms Novotny were ultimately not shown to be tenable and therefore carried little weight. Other evidence, including admissions by the appellant and the objective circumstances, provide an ample basis for satisfaction that the appellant had signed the agreement, including his guarantee.

Assessment of facts

(a) pre-contractual circumstances

The appellant was cross-examined as to his previous experience in obtaining commercial finance, including from Macquarie Leasing. He agreed that he had obtained finance through Macquarie Leasing in the past and that his house was financed with Macquarie Bank: Tcpt, p 57(15). He agreed that he and his wife had previously provided personal guarantees for a commercial hire purchase agreement with Macquarie Leasing: Tcpt, p 57(35)-(50). He agreed that he was familiar with the practice of finance companies lending money to small businesses requiring personal guarantees from directors: Tcpt, pp 57-58. He had also provided a personal guarantee in relation to a lease of premises for the company: Tcpt, p 58(20)-(25).
With respect to the particular transaction, he explained in his affidavit (par 32) the conversations he had had with his co-director, Mr Taylor, in February 2007 as to the need for the company to raise finance to pay a tax debt and for working capital. He set out a conversation he had in which Mr Taylor stated:
"I have spoken to a broker I know, Aaron Burgess who thinks that we can borrow moneys using one piece of our existing equipment as security as it is valuable equipment even though it is not new. One of the Virkotype Ovens might be suitable security for a loan. I think that we should try to borrow about $140,000 to enable the current tax debt of about $40,000 to be paid so that the rest can be used for working capital and part of that to pay down our loan accounts."
He said he was shown what he believed to be "an application form for a loan" and was asked to check it. He did so, noting that it incorrectly showed him as owning a BMW and BHP shares worth $500,000. It also listed the security as "new", which it was not. In cross-examination (though not in his affidavit) he revealed he had taken the document to his solicitor and had been advised to change the description of the security. He returned it to Mr Taylor, noting the need for those corrections. He said in his affidavit:
"No other documents relating to the transaction the subject of what I believed was the said application form, were ever submitted to me for my approval or execution."
The appellant further stated in his affidavit that he had "only met Aaron Burgess several times": par 33. He was more forthcoming in the course of his cross-examination: at Tcpt, pp 62-63:
"Q. Did you ever have a conversation with Aaron Burgess about this particular transaction?
A. I signed a thing for a - to go through your financials with him, and that's when he had a copy - asked me for a copy of my driver's licence, to see if it was me, and it was $128,000 at the time.
Q. You provided him with a copy of your driver's licence?
A. Yes.
Q. He also asked you [for?] some details about your personal circumstances?
A. Yes.
Q. He asked you about what property you owned?
A. Yes.
Q. He asked you about any motor vehicles that you owned?
A. Yes.
Q. He asked you to provide some information - company information, didn't he?
A. Well, I had nothing to do with Graphfix Financials at the time.
Q. Sir, you were a director of the company?
A. I know, but I wasn't - I was - when I sold my old business I'd had three balloon stints and I only came into Graphfix so I could slow down a bit and take it easy.
Q. Aaron Burgess asked you to provide information to support the loan application?
A. He would have, yes, yes.
Q. That information included the asset register of the company?
A. I never had that. Mr Taylor had that.
Q. I put it to you that he asked you to provide the asset register of the company?
A. I never had the asset register, Mr Taylor had it.
Q. Are you denying that he ever asked you to provide the asset register?
A. Well, he might have. We were both in there together, so -
Q. ...How did you know how much instalment payments were going to be each month for this money?
A. I think we were told when we applied for it what the instalment payments were going to be.
Q. So Aaron Burgess told you, did he?
A. Yes.
Q. When did he tell you it was going to be Macquarie Leasing that would be lending this money?
A. I can't remember. I believe it might have been then; I'm not sure.
Q. But it's certainly the case, given the information that you had, you had no idea how long the term of this agreement was going to be in relation to the loan, did you?
A. Well, we usually go four to five years."
The appellant was also cross-examined in relation to his statement that no documents were submitted to him for approval or execution after the first incorrect loan application. In cross-examination he conceded that he had signed a "Privacy Act form" at Mr Burgess' office at some time in early 2007. A "Privacy Act form" (unsigned) was contained in a "loan application bundle" tendered by the appellant. A signed copy appeared in the contractual documents which were tendered by Macquarie Leasing. (This document has significance in the context of the handwriting expert evidence discussed below.) The cross-examination continued (p 79):
"Q. So it is the case that you are now saying that you did sign a document, being the privacy consent form?
A. Yes.
Q. Right. And your evidence is that you signed that at Mr Burgess's office?
A. Yes and that was -
Q. How do you know that the document you signed at Mr Burgess's office was a privacy consent form?
A. He said it was.
Q. No doubt you took an opportunity to read the document did you?
A. Pardon? I didn't read all of it but -
Q. Well how long was it?
A. It was about that long.
Q. One page?
A. Yeah.
Q. How many times did you sign your name?
A. Jesus, I can't remember to be honest.
Q. But it's your recollection that you were at Mr Burgess's office, he presents you what with a one page document?
A. Yes.
Q. He says to you it's a Privacy Act consent form?
A. Yes.
Q. It had a couple of paragraphs of writing on it, did it?
A. About that much, yeah, a third of the page or something.
Q. And you signed it?
A. Yes."

The appellant then reiterated his denial that he had signed any other documents: Tcpt, p 80(20). (That denial was significant in relation to a statement made to police some two months after the execution of the 2007 agreement, discussed below.)
The evidence included a copy of the application form containing a schedule with the names and addresses of the guarantors, a reference to the security describing the equipment as "new", and, two or three pages later, a "Statement of assets & liabilities" in the name of the appellant. That statement had a number of changes made to it in handwriting, including correction of the bank (from Westpac to Macquarie), the amount of cash in hand, the value of the appellant's home, the value of Graphfix Plus Trade, changes to the identification of investments, deletion of the reference under motor vehicles to "BMW" and replacement with "Mercedes" and correction of the mortgagee on the property (from "Homeside" to "Macquarie"). The corrections were consistent with the evidence given by the appellant that he had seen the statement and raised issues in relation to some of the items on it, as noted above. They demonstrated attention to a number of details not referred to in his evidence. They were evidently relevant to a personal guarantee.
The appellant said that he knew the precise amount being sought, the basis on which it was being sought and the party from which it was being sought, namely the respondent. He said that he was concerned to ensure that the price of the finance was not excessive. He agreed that he had provided information about his personal circumstances and that he was familiar with the practice of financiers to obtain personal guarantees from directors with respect to financial accommodation provided to companies, the following exchange being recorded at Tcpt, pp 126-129:
"Q. ... You gave some evidence yesterday to the effect that you were aware that personal guarantees were required in relation to this transaction?
A. Yes.
Q. And I put to you that you became aware of this fact because of discussions that you'd had with Mr Burgess?
A. Yes.
Q. And Mr Burgess told you that Macquarie Leasing will not lend the money unless personal guarantees are provided by the directors?
A. Yes.
Q. Mr Burgess provided you with this document [the agreement] and he asked you to sign page 56 of this document as a director of Barry and Jann Graphics Pty Ltd?
A. I say it's not my signature.
Q. And I also put to you that he asked you to sign this document in your own capacity as guarantor guaranteeing this agreement?
A. I say no.
Q. When Mr Burgess informed you that Macquarie Leasing would not lend the money unless there were personal guarantees by the director you agreed to provide a personal guarantee, didn't you?
A. No.
Q. Well how did you expect the money to be advanced by Macquarie Leasing?
A. Well if one person guarantees it does the other one have to?
Q. Mr Crossman, I've just put to you, and you agreed with me, that Mr Burgess told you that Macquarie Leasing would not lend the money unless personal guarantees were provided by the directors of the company?
A. Yes.
Q. You've agreed with that?
A. Yes.
Q. And I put to you that no funds would have been advanced unless you provided a guarantee you're aware of that fact?
A. Yes, and as I said if one person guarantees does the other person have to guarantee?
...
Q. I am putting to you that during your discussions with Mr Burgess you agreed to provide a guarantee as a director of the company and as a director of Barry and Jann Graphics, you agreed to guarantee the obligations of Graphfix Plus Trade?
A. No. Barry and Jann Graphics had nothing to do with the loan.
Q. But it's certainly the case that you as a director of Graphfix Plus Trade had a lot to do with the loan, didn't you?
A. I was a director of Graphfix Plus Trade, yes.
Q. And you had a lot to do with this loan, didn't you?
A. Well I started to apply for it, yes.
Q. Well lets go through it. You had dealings with a broker?
A. Yes.
Q. Mr Burgess?
A. Yes.
Q. You met him on a number of occasions.
A. Yes.
Q. You provided him with a signed privacy form allowing him and/or Macquarie to undertake certain inquiries in relation to you to assess your credit worthiness?
A. Yes.
Q. Your provided Mr Burgess with personal information about yourself, didn't you?
A. Well that's personal information if you like that, yes.
Q. You provided him with details of your house and what it was worth?
A. Yes.
Q. Where is [sic] was situated?
A. Yes.
Q. Whether there was a mortgage over that house?
A. Yes.
Q. Who the mortgage was with?
A. Yes.
Q. The amount of equity in the property?
A. Yes.
Q. Details of motor vehicles that you owned?
A: Yes.
Q. The value of those motor vehicles?
A. Yes.
Q. Details of any cash at the bank that you held?
A. Yes.
Q. And who that money was held with?
A. Yes.
Q. And you provided that information to him because that information was required because you were providing a guarantee to Macquarie guaranteeing the obligations of the company, that is the reason why you provided that information, isn't it?
A. It might have been but I did not guarantee the loan.
Q. That is the purpose for which you provided that information?
A. Yes. Go on.
Q. That is the case isn't it?
A. Well that's what you're saying, yes.
HIS HONOUR:
Q. Well why would you have provided it otherwise?
A. Pardon? Well -
Q. Why would you provide -
A. Well as I said I did not think the loan would even go through.
Q. But why did you provide the information, I mean it's very personal information, it's about your personal business?
A. Mmm.
Q. Why did you provide it?
A. I was being hammered all the time to -
Q. But why did you provide it?
A. It was known where I lived and - OK.
Q. Why did you provide it to Mr Burgess?
A. I didn't think the loan would go through and I just provided it to keep the other guy happy.
...
GLOVER [counsel for the respondent]:
Q. You were well aware from your discussions with Mr Burgess that you had to provide a personal guarantee. That's the case?
A. Yes, if I'd seen the contracts.
Q. And you provided all of your personal information I've just outlined for the purposes of Macquarie assessing your credit worthiness for the purpose of providing a guarantee? That's the case, isn't it?
A. Yes, go on.
Q. That was your understanding as to why you provided that personal information?
A. Yes, go on."
As an experienced businessman, and in the light of the evidence set out above, there can be no doubt that the appellant was satisfied that the company needed the money, that steps were being taken to obtain the money, that those steps would require him to execute an agreement on behalf of the company and to execute a personal guarantee of the company's indebtedness.
The appellant was cross-examined about his knowledge of a later agreement, executed in February 2009, at which stage the business of Graphfix Trade Plus was wound up and the company assets distributed between the shareholders. The appellant's company took over responsibility for the payments to Macquarie Leasing under the hire purchase agreement and one of the Virkotype ovens. Mr Taylor received the other oven. The appellant was cross-examined as to whether he obtained a full copy of the 2007 agreement at that time. He denied that he did in evidence which will be referred to below. He was then taken back to a page of the schedule to the 2007 agreement which contained at item 5 a description of the equipment which read: "Description: One only Used 2 X VIRKOTYPE OVEN WITH UV LIGHT SOURCE." Two serial numbers were given. He agreed that he had in his possession as at 13 February 2009 a copy of that page: Tcpt, p 112(30). He was then questioned about the apparent anomaly in the 2009 agreement, by which his company took responsibility for the liabilities to the respondent under the 2007 agreement, but obtained only one of the two ovens which formed security for that agreement. The questioning continued at p 114(5):
"Q. Why would enter into an agreement assuming the sole responsibility for an agreement to Macquarie and only obtain one of the items that are said to secure that agreement?
A. I was told I was getting both. It was only after I found it was one and we sent him an email and he virtually told us to get lost.
Q. So your previous evidence that you understood the Sunrays machine to be the other item of equipment is wrong?
A. No, I did understand the Sunrays to be the other item of equipment.
Q. You knew the Sunrays was not the equipment to secure the loan to Macquarie?
A. Well it [sic] was told one Verco type [sic] in the one I had, the copy I had. But on here it has two but - sorry, the original copy I saw had one Verco type.
Q. Ok. So is it your evidence now that the copy of the agreement, the copy of this one page that you received from Macquarie at the time that you entered into the agreement on 13 January [sic] in fact said, 'one only'? That hadn't been crossed out?
A: Well it had two machines on there, that's when I found out it was two. ... But when I first saw the agreement before anything had happened, it only had one.
Q. When did you first see the agreement?
A. When it was done in 07.
Q. When?
A. Would've probably - February March, and I took it to my solicitor and he said, 'Is that machine new' and I said, 'No'. He said, 'Have that changed'. That's the last I saw of it.
Q. Who gave you the agreement?
A. I presume it - I'm not sure if it came from Burgess or Taylor.
...
Q. So, Mr Crossman, your evidence is that in February or March of 2007 you obtained a copy of the agreement and you took it to your solicitors?
A. That's right.
Q. Which solicitors were these?
A. Bicknall & Monteith.
HIS HONOUR:
Q. And that's the loan agreement we're talking about, is that right, so we're clear?
GLOVER: [sic] Yes.
HIS HONOUR:
Q. You don't know how you got that agreement, you don't know where you got it from?
A. I'm not sure if Taylor gave it to me or Burgess but I took it to the -
Q. It was a full agreement, it wasn't just a page or two?
A. I believe most of it was there but."
This evidence appeared to be given for the first time in cross-examination. The appellant's cross-examination had commenced as follows:
"Q. Mr Crossman, as on the date of the agreement, the agreement is dated 4 April 2007?
A. What agreement?
Q. The commercial hire purchase agreement, you've seen that, haven't you?
A. I have not ever had a copy of that agreement.
Q. Really? You've seen Mr McCulloch's affidavit?
A. I've seen Mr McCulloch's affidavit, yes.
Q. You agree with me that there's a copy of that agreement in Mr McCulloch's affidavit?
A. How can I agree with it, I've never seen it.
Q. Have you never seen Mr McCulloch's affidavit?
A. I have seen his affidavit.
Q. When you saw his affidavit, did you read the annexures that were attached to the affidavit?
A. I - not really because if I haven't signed it how can you agree to something?"
The affidavit referred to was that of Gregory Angus McCulloch dated 22 December 2010, filed on behalf of the respondent. Mr McCulloch was the litigation manager of Macquarie Leasing. He annexed a number of documents, including a copy of the commercial hire purchase agreement, which was marked "GM-11". The appellant had not only read that affidavit, including perusing each page of GM-11, but had sworn an affidavit himself on 21 April 2011 which included a methodical rebuttal of many details in Mr McCulloch's affidavit, including reference to the signatures on seven pages of GM-11, which he denied were his. The point he appears to have been making in his oral testimony was that he had not previously seen a copy of the agreement with his signatures on it, he not having signed it.
It is necessary to note some later events to explain certain other evidence as to events before the 2007 agreement was executed. In late 2008 and early 2009, the business was apparently foundering. Further, the appellant and Mr Taylor were not in agreement as to the appropriate course to be taken. Mr Taylor thought that the company should be wound up. The appellant decided to take over part of the business himself, as a result of which the 2009 agreement, executed on 13 February 2009, was drawn up by solicitors for the parties. His company, Crossman Graphics Pty Ltd, acquired an interest in one of the Virkotype machines, subject to the liabilities under what was described in the schedule to the agreement as "lease from Macquarie Leasing Limited". The thrust of the cross-examination set out above was that if the appellant had known that both the Virkotype machines were held as security by Macquarie, he would not have allowed one of them to be transferred to Mr Taylor's company. That was the context which led to the statement that he had seen the 2007 agreement before and it referred to "one only" Virkotype machine.
In re-examination, the appellant confirmed that he had taken a copy of the original agreement to his solicitors (Tcpt, p 135(15)-(25)), although he gave no explanation for his earlier evidence which did not reveal that fact and indeed may have given the contrary impression. A bundle of papers identified as "application for loan", which included parts of the 2007 agreement, became Ex 3. The bundle included the schedule with the description of the equipment at item 5 as "One only New VIRKOTYPE OVEN ...". That appeared immediately under the names of the proposed guarantors (item 4) which were the appellant and Mr Taylor. A statement under item 11, two pages later, read "Equipment is New". The bundle also included an execution clause for each of the appellant and Mr Taylor to sign as guarantors, the statement of assets and liabilities in the name of the appellant, with the corrections already noted, a copy of an acknowledgement under the Privacy Act and a copy of an important notice to guarantors and a guarantor's acknowledgment, again including a clause for execution by the appellant and Mr Taylor.
Additional support for the proposition that the appellant had signed the 2007 loan agreement was to be found in the evidence of Mr Taylor, who was shown a copy of the executed hire purchase agreement and asked (Tcpt, p 42(5)):
"Q. Now have you seen that document before? Just have a look at it and the subsequent -
A. I'm not sure. I - we signed some documents that Aaron [Burgess] had brought to us. But whether these are the actual documents, I don't know."
When asked to look at the signatures which appeared to be his, he denied each of them. He also denied that any of the handwriting was his. The following cross-examination then took place, at Tcpt, pp 44(41)-45(22):
"Q. You've given some evidence earlier that Mr Burgess had given you some documents to sign?
A. Yes.
Q. Was that in February of 2007?
A. I'm not sure exactly what time it was but it sounds like it was around that time, yes.
Q. You signed those documents?
A. Yep.
Q. Then after signing them, did you go away, did you leave Mr Burgess?
A. I went downstairs.
Q. Right. Did you see Mr Crossman sign any documents?
A. Barry signed the documents with me while Aaron was there and then I left them and I went downstairs into production and they were probably there for a little while.
...
Q. Now you didn't see Mr Crossman sign that signature there on that page did you?
...
A. No, I wouldn't have, no.
Q. No. You don't know whether that's his signature or not, is that correct?
A. No, I don't."

(b) post-contract conduct

Given his expectations, prior to the approval of the finance by the respondent, it might be thought implausible that, not having signed any documentation, on discovering that finance had been made available, the applicant would ask no questions and take no steps to determine how that had occurred. Yet that was the evidence given by the appellant.
In his first affidavit, of 21 April 2011, the appellant explained his understanding, no doubt derived from the accounts, as to how the sum of $140,000 came to be paid to the company: at paragraphs 19-21. He also expressed his understanding of the transaction that Mr Taylor and Mr Burgess had arranged was that the respondent "was to lend to Graphfix $140,000 to be secured by a charge over one used Virkotype thermo unit, at that time owned by Graphfix": par 22. He did not indicate that he had been surprised when the money was received.
In a second affidavit of 10 October 2011 he said (par 12):
"In April 2007 Mr Taylor said to me 'the money has come in but they have ripped us off the GST.' I was very surprised that this had occurred, as I had assumed that a loan agreement would need to be signed."
This evidence was ambiguous as to the cause of his surprise. In his evidence, the following exchange occurred at Tcpt, pp 70(40)-72(17):
"Q. ... So do you recall at some stage on 4 April looking at the bank statement?
A. Well I was shown it, yes.
Q. And no doubt you were concerned because the amount that had been deposited the previous day had now been reversed?
A. Yes.
Q. What steps did you take at that point in time to understand why it was that those funds had been reversed?
A. I think Mr Taylor was on the phone to Aaron.
Q. What did you say to Mr Taylor?
A. I said, 'What's going on'? You know, I - as I said, I was trying to keep a - a low profile because of my heart conditions and - and take it easy; that's what I've been trying to do.
Q. But you didn't trust Mr Taylor did you?
A. No, not fully.
Q. Well on your own evidence your relationship was very strained at this point in time?
A. It was.
Q. And you had a lot to lose; you'd invested a lot of money in this company?
A. Yes.
Q. You and your wife and - well yourself and the other company that you and your wife were both directors of were the major shareholders?
A. Mmm.
Q. But you didn't speak to Aaron Burgess did you?
A. No.
Q. You didn't contact Macquarie Leasing?
A. No. As I said, I'm surprised that it even went through.
Q. You didn't say to Mr Taylor how could it be that the loan's gone through and I didn't sign anything as a director?
A. No I never.
Q. And you didn't say to Mr Taylor how could it be that the loan could go through when I haven't given a guarantee?
A. Well I assumed that he must have given the guarantee and -
Q. Did you ask to see the documents?
A. No.
Q. So you basically -
A. Well - go on.
Q. You basically did nothing, is that correct?
A. That's right.
Q. Now the next day, 5 April, when the secretary printed off the bank statement, do you recall seeing that on 5 April?
A. Yes.
Q. And when you saw that on 5 April, you would have seen there was a deposit, or a payment into the account in the amount of $140,000?
A. Yes.
Q. Now you must have been troubled at that stage, wondering what that was about?
A. I wondered what the hell was going on and I asked Mr Taylor and he said 'That's the GST on the other amount'. And I -
Q. But you're an experienced businessman; that wouldn't have made a lot of sense to you would it?
A. Well I added it up and it should have been $140,800.
Q. So what steps did you take as a director of the company to find out what was going on?
A. I didn't take any.
Q. So you didn't speak to Aaron Burgess?
A. No."
When asked as to his expectation with respect to the loan, in circumstances where he claimed not to have signed any relevant document, but the moneys arrived in the bank account, he merely said "surprise, surprise": Tcpt, p 59(44). He was asked whether he approached Mr Taylor and said, "No, I was surprised. I don't know how it got there": Tcpt, p 60(30). In further answer to the same question he added, "still don't". When asked what steps he took to find out how the money had come to be in the bank account he said, "I didn't": p 60(37). When pressed he said:
"Well, I was surprised it got there and I still don't know because if you haven't signed any documents, how does it get there.": p 60(46).
He said, when outlining his knowledge of the funds coming into the company's bank account, (Tcpt, p 70(13)):
"Q. At that time, on the morning of 3 April when you looked at the bank statement, were you puzzled as to what this money was?
A. I could see it was the amount that was applied for, but I don't know - as I said, if I sign nothing I don't know how it gets there. I thought someone else had guaranteed it, so -
Q. So you're aware that it was necessary for the funds to be guaranteed?
A. Well any loan - substantial loan's got to be guaranteed."

The "other guy" to be kept happy was apparently Mr Taylor. Yet the evidence was that the company needed cash to stay afloat, the appellant knew that and wanted it to stay afloat. He did not complain when cash arrived in the company's bank account. The issue identified by Mr Taylor with respect to the payment was that the amount received was only $128,000 and not $140,000. In cross-examination the appellant stated (Tcpt, pp 66-67):
"Q. You were aware in April of 2007 that the sum of $128,000 had been deposited into the company's bank account?
A. Yes.
Q. You're also aware that the very next day it was withdrawn?
A. Yes ....
Q. Mr Crossman I just put to you that you were aware on the next day, 4 April, that the sum of $128,000 with withdrawn from the company's bank account?
A. Yes.
Q. Did you at that point in time go and speak to Mr Taylor about why this money had been withdrawn?
A. Yes.
Q. What did Mr Taylor say to you?
A. He jumped up and down and carried on about it.
Q. No, what did he say to you?
A. Well, he said, 'They've ripped us off or something,' I don't know. I didn't know what he was on about, because I still don't know how it got there."
In about May 2007 officers working for the respondent became concerned as to the activities of Mr Burgess. In a statement dated 30 May 2007 Mr Craig Feodoroff, who worked in the collections department of Macquarie Leasing, made a statement to police in relation to the false invoicing on three loan applications where the payments had gone into the account of Mr Burgess and Macquarie was without security. In June 2007, the police obtained statements from both Mr Taylor and the appellant. The statement signed by the appellant was dated 26 June 2007. It set out briefly the background to the application for the loan and continued:
"5. Aaron [Burgess] went away and came back sometime later over the next coming weeks. He had compiled a series of documents relating to the loan. He told us that he was using Macquarie Leasing Pty Ltd in obtaining our finance. Aaron showed us a large amount of paperwork. I remember signing some documents but I'm not sure really what it was that I was signing. I was told by Aaron to sign in certain spots and I did so. At no time were we told or did we intend on buying new machines or equipment with fresh finance. A couple of weeks later Aaron told us that we had been approved.
6. In April 2007 we received $128,000 into our bank account. We were confused by this amount because we had applied and been approved for the amount of $140,000 as explained by Aaron Burgess. I contacted Aaron about this amount. He stated that it is a GST tax payment. I was angry with this and told Aaron that he doesn't take the GST tax amount. He told me that he would get back to me. The next day the money had disappeared out of the account. A few days later $140,000 appeared in our business account. We paid Aaron about 3 or 3.5 thousand for his services.
7. The company has been making the regular required payments on this loan to Macquarie leasing ever since. I have not seen Aaron Burgess or heard from him since the settlement."
This statement, made less than three months after the 2007 agreement had settled, involved an explicit acknowledgment that the appellant had signed "some documents", in "certain spots". He also indicated that the loan had been "approved" and expressed anger that an amount of $12,000 was initially unaccounted for. There was no suggestion that he had not signed any documentation for the loan, quite the contrary.
The appellant was cross-examined about his statement to the police and, somewhat grudgingly it would appear, acknowledged that the contents were true. However, he said the police put words in his mouth: Tcpt p 86(37). He denied he had contacted Mr Burgess about the discrepancy in the amount of the initial deposit, saying, "Mr Taylor contacted Mr Burgess": Tcpt, p 87(29). (The statement supplied by Mr Taylor contained similar language, namely that he, Mr Taylor had been angry and had contacted Mr Burgess.) The appellant did not accept that he had been shown a copy of the hire purchase agreement by the police. Nevertheless, Graphfix Plus Trade continued to make payments under the agreement, with his knowledge, for a further two years, the last payment being made on 4 March 2009. Graphfix Trade Plus went into voluntary administration on 17 March 2009, apparently as a result of a failure to pay amounts owing to the Australian Taxation Office: Tcpt, pp 144-145.

(c) factors relating to execution of 2007 agreement

The most plausible inferences available from the evidence summarised above are as follows.
(1) In early 2007, to the knowledge of the appellant, the company, Graphfix Plus Trade, was in need of working capital, including money to pay tax debts.
(2) His co-director, Mr Taylor, with the appellant's knowledge, sought to obtain a loan through a broker, Mr Burgess.
(3) An approach to Macquarie Leasing resulted in the preparation of a loan application and draft agreement, which named the appellant and Mr Taylor as guarantors.
(4) The appellant gave the broker, Mr Burgess, information as to his assets and liabilities.
(5) The loan application included a statement of assets and liabilities for the appellant (and Mr Taylor) which were clearly referable to their financial viability as guarantors. However, those contained in the draft loan application were incorrect in a number of respects, which were corrected by the appellant in handwriting.
(6) The appellant took the draft loan application (including the draft commercial hire purchase agreement) to his solicitor for advice. The only advice he recalled in evidence was being told to correct the description of the Virkotype machine from "New" (which it was not) to "used" (which it was). However, it seems unlikely that an experienced businessman would seek legal advice only in respect of that issue.
(7) The appellant made a statement to police some two months after the execution of the 2007 agreement to the effect that Mr Burgess had told him to "sign in certain spots" and he did. He said in his police statement that he was "not sure really what it was that I was signing", but proffered no evidence that there was any other documentation involving him and Mr Burgess to be signed at that time. Accordingly, his statement to police confirmed that he had signed at least parts of the loan documentation.
(8) The appellant knew that the 2007 agreement could not have been concluded unless he and Mr Taylor signed it, both as directors of the company and as guarantors.
(9) Although in his evidence the appellant said he was surprised when loan moneys were obtained, because he had not signed anything, that assertion was implausible for two related reasons. The first was that, on the assumption that he had signed nothing, the moneys must have been obtained as a result of fraud or forgery and, secondly, when the police obtained a statement shortly thereafter because they were investigating alleged fraudulent activities of Mr Burgess, he said nothing to suggest that somebody must have forged his signature on documents prepared by Mr Burgess.
(10) He knew that the company was, for about two years, making regular repayments to Macquarie Leasing.
(11) When the company was split in 2009, far from challenging its liability to Macquarie Leasing, his company took on sole responsibility for the repayments.
(12) The first denial of the validity of his signature on the agreement occurred after the business in effect collapsed and Macquarie Leasing threatened to proceed against him as a guarantor. Even then, his complaint was not that he had not signed the contract, but that he had not signed the guarantee.
(13) Mr Taylor saw him sign the documents brought by Mr Burgess, which he too had signed.
The circumstances set out above suggest, on a far stronger scale than a mere balance of probabilities, that the appellant executed the 2007 agreement. His admission in the witness box that he executed one document, which was known to have been shown to him by Mr Burgess and was contained within the loan application bundle, provided no objective support for his claim that he had not signed other documents. His statement in his affidavit that, if asked to sign a guarantee, he would not have, was inconsistent with the following combination of facts: (a) his knowledge that the company needed funds, (b) his involvement in applying for finance, (c) his knowledge that directors' guarantees were required, (d) his supply of personal information relevant to such a guarantee and (e) his failure to inquire when the finance was approved.
Further, there was the evidence of Mr Taylor. He also denied, with little plausibility, on a superficial perusal of his signatures, that he had signed the 2007 agreement. Thus, the trial judge was confronted with evidence that none of the three individuals associated with the receipt of the financial accommodation had signed the agreement by which they had benefited. Apart from the company and its shareholders (and Macquarie Leasing), the only person who stood to obtain a benefit under the 2007 agreement was Mr Burgess himself, who received brokerage fees. However, there is no reason to suppose that he signed for the other parties. The agreement was not a sham; the company, the appellant and Mr Taylor wanted the financial accommodation to be supplied. The idea that Mr Burgess would sign for all of them is simply implausible. Mr Burgess himself appears to have signed as a witness to the signatures of the guarantors. Unsurprisingly, Mr Burgess was not called by either party. But there was no evidence suggesting he had signed for all or any of the parties.
While Mr Taylor did give evidence, no one suggested that he had signed on behalf of anyone other than himself. Nor was there any suggestion that the signatures of the appellant resembled those of any other person who signed the agreement. Significantly, no case was run on the basis that he had signed on behalf of the company, but had not signed as a guarantor. Subject to the question of the handwriting report, addressed below, the Court would be entitled to be satisfied on the material set out above, at a very high level of probability, that the appellant signed the 2007 agreement, including the guarantee.

The handwriting evidence

The principal conclusions of the handwriting expert have been set out above. Although she was not cross-examined, the weight to be given to her conclusions is limited by a number of considerations. First, she was instructed by the solicitor acting for the appellant on 16 August 2010 in the following terms:
"None of Barry Crossman, Jann Crossman or Barry & Jann Graphics Pty Ltd signed either the lease agreement or guarantee on which they are being sued by Macquarie Leasing Ltd.
...
In relation to the document in question (the Hire Purchase Agreement), it is suspected that other signatories to that document, perhaps Rick Taylor or Aaron Burgess either forged or had forged our clients signatures."
On 23 February 2011 the appellant's solicitors wrote to Ms Novotny again stating:
"Examples of forgeries of Mr Crossman's signature which we believe may well have been forged by Mr Rick Taylor, whose signature also appears on one of the documents. We believe that the forgeries on the documents in question with Macquarie Leasing were also forged by Mr Taylor."
To state instructions in that manner was to risk tainting the formation of the opinions which were sought.
Secondly, Ms Novotny was given a series of "authentic" signatures to compare with the impugned signatures. A more persuasive result would have been achieved if she had not been categorically advised as to which signatures were impugned and which were not, or if she had been given signatures to consider some of which were acknowledged to be genuine, without Ms Novotny knowing which they were.
Thirdly, although she analysed of the variations between the specimen signatures, taken globally, and each of the impugned signatures, she made no attempt to compare differences amongst the specimen signatures which, as is no doubt common, reveal a degree of variation at a macroscopic level.
Fourthly, of the eight variations identified between the specimen signatures and the impugned signatures, only three were common to all, whereas all eight applied only to one of the impugned signatures. In most cases only four or five variations were identified (three of which were the global variations). In other words, there were variations amongst the impugned signatures, the significance of which were not discussed.
Fifthly, Ms Novotny reported (par 26):
"The isolated similarities observed between the questioned signatures and Barry specimens are not compelling evidence that any of the questioned signatures were written by the writer of the Barry specimens. They are features that one might reasonably expect could be identified and reproduced (or otherwise introduced by accident) by another person attempting to simulate the form of Mr Crossman's genuine signatures."
Ms Novotny then concluded that there was "no evidence to support a proposition that any of the questioned signatures ... were written by the writer of the Barry specimens": par 27. Given acceptance of the "overall pictorial resemblance" and the "isolated similarities", this conclusion was, at the very least, overstated. Further, the conclusion at par 26 indicated that the author accepted her instructions as correct (namely that the impugned signatures were forgeries) and sought "compelling evidence" to disprove that allegation, which was not found.
Sixthly, one of the impugned signatures was the certificate under the Privacy Act, which the appellant acknowledged in evidence to be his. If Ms Novotny were wrong in identifying that as a forgery, the rest of her evidence was of little value. Further, if the appellant's statement to police were accepted, there were other signatures which were legitimate, in which case Ms Novotny's evidence was worthless.

Conclusions

It is clear that the trial judge rejected the appellant's evidence that he had not signed the hire purchase agreement. In part, he did so on a misapprehension of Ms Novotny's evidence. However, for the reasons explained above, Ms Novotny's evidence was of little weight. Because she did not give evidence, this Court is in as good a position as the trial judge to assess the weight which should properly have been given to her report. Once the weight of that report is discounted, the trial judge's error is seen to be of no importance. His assessment of the appellant's testimony was soundly based. Accordingly there has been no miscarriage of justice which would warrant a retrial: Uniform Civil Procedure Rules 2005 (NSW), r 51.53(1).
The Court should make the following orders:
(1)Dismiss the appeal.
(2)Order the appellant to pay the respondent's costs in this Court.
EMMETT JA: This appeal is concerned with the question of whether the appellant, Mr Barry Crossman, signed a form of guarantee and indemnity in respect of contractual obligations owed to the respondent, Macquarie Leasing Pty Limited (Macquarie), by Graphfix Plus Trade Pty Limited (Graphfix). A judge of the District Court found that Mr Crossman had signed the guarantee and indemnity. Mr Crossman now appeals to the Court of Appeal from that decision.
On 4 April 2007, an instrument described as a commercial hire purchase agreement was purportedly signed (the Principal Agreement). The parties named in the Principal Agreement were as follows:
·Owner: Macquarie;
·Hirer: Graphfix;
·Guarantor: Barry & Jann Graphics Pty Limited (the Crossman Company), Mr Crossman, Mrs Jann Maree Crossman and Mr Warwick Allan Taylor.
At the time, Mr Crossman and Mr Taylor were directors of Graphfix. Mrs Crossman was not then a director of Graphfix. However, Mr and Mrs Crossman were both directors of the Crossman Company.
By the Principal Agreement it was agreed that, at the request of the Hirer and Guarantors, the Owner hired certain equipment to the Hirer and granted to the Hirer the option to purchase the equipment. It was also agreed that the Guarantors guaranteed the due performance of the Principal Agreement by the Hirer and indemnified the Owner against any failure by the Hirer so to perform. That guarantee and indemnity was expressed to be in the terms set out in the Owner's standard terms and conditions. Part of the Owner's standard terms and conditions was in evidence before the trial judge but not the entirety of the document. Specifically, the provisions of the document relating to guarantees appear to have been omitted.
The Principal Agreement purports to be signed by Mr Taylor and Mr Crossman on behalf of Graphfix. It also purports to be signed by each of Mr Crossman, Mr Taylor and Mrs Crossman as guarantors. Finally, it purports to be signed, by Mr and Mrs Crossman, on behalf of the Crossman Company as guarantor.
The equipment that was the subject of the Principal Agreement (the Equipment) was described as:
"Used 2 x Virkotype oven[s] with UV light source"
Model serial numbers were specified. The description stated expressly:
"Equipment is Used"
Shortly after 4 April 2007, Macquarie parted with the sum of $140,800. Graphfix received that sum through an intermediary, to whom reference will be made later. Thereafter, Graphfix made monthly payments to Macquarie of the sum of $2,989.91 up to and including 4 March 2009. Graphfix made no further payments to Macquarie after that time. On 17 March 2009, Graphfix was placed into liquidation.
On 2 June 2009, Macquarie served notice of termination of the Principal Agreement (the Termination Notice) on Graphfix and on Mr Crossman, Mrs Crossman, the Crossman Company and Mr Taylor. By the Termination Notice, Macquarie demanded payment of the amount owing under the Principal Agreement of $101,584.87. The Termination Notice also demanded delivery up to Macquarie of the Equipment. The sum of $101,584.87 has not been paid either by Graphfix or by any of the persons named as Guarantor in the Principal Agreement.
On 4 June 2009, Mr Crossman asserted to Macquarie that the signatures on the Principal Agreement purporting to be his signatures were forgeries. Macquarie subsequently commenced a proceeding in the District Court against Mr Crossman, Mrs Crossman and the Crossman Company, in which it claimed the sum of $108,013.22 together with interest. In their defence, Mr and Mrs Crossman and the Crossman Company asserted that at no time did any of them sign any guarantee of the obligations of Graphfix.
At the trial in the District Court, Mr Crossman and Mrs Crossman both gave evidence, in which they maintained their denial that they had signed the Principal Agreement, either on his or her own behalf or on behalf of the Crossman Company. In support of their defence, Mr Crossman, Mrs Crossman and the Crossman Company adduced opinion evidence of Ms Michelle Novotny as to the authenticity of the alleged signatures. Ms Novotny's opinion was contained in a written report dated 4 March 2011 (the Handwriting Report). The Handwriting Report was admitted as evidence, apparently without objection. Ms Novotny was not required for cross-examination.
In the Handwriting Report, Ms Novotny outlined her instructions and attached images of the questioned signatures of Mr Crossman and Mrs Crossman. Ms Novotny concluded, on the basis of her observations and within the limitations of the Handwriting Report, that it was unlikely that any of the questioned signatures in the name of Mrs Crossman was written by the writer of specimens of Mrs Crossman's signature that were accepted as genuine. Ms Novotny also concluded, on the same basis, that there was no evidence to support a proposition that questioned initials attributed to Mrs Crossman were written by the writer of specimens of Mrs Crossman's initials that were accepted as genuine. However, Ms Novotny was unable to express a conclusion, in probability terms, as to the initials.

On the basis of the Handwriting Report, and the denial by Mrs Crossman, the trial judge was satisfied, on the balance of probabilities, that the purported signatures and initials on the Principal Agreement purporting to be those of Mrs Crossman were not her signatures or initials written by her. Since the Principal Agreement was purportedly signed on behalf of the Crossman Company by Mrs Crossman as well as Mr Crossman, his Honour directed a verdict for Mrs Crossman and for the Crossman Company.
However, the trial judge reached a different conclusion concerning the purported signatures and initials of Mr Crossman on the Principal Agreement. His Honour reached the conclusion, on the balance of probabilities, that Mr Crossman did sign the Principal Agreement. His Honour gave reasons for that conclusion. However, the reasons are not compelling. In order to put the reasons in context, it is necessary to say something more about the circumstances in which the Principal Agreement was brought into existence and the involvement of Mr Crossman in those circumstances. It will then be necessary to say something about the Handwriting Report in so far as it dealt with the purported signatures and initials of Mr Crossman and the findings made by his Honour in relation to those questions.

The Signing of the Principal Agreement

The arrangement between Graphfix and Macquarie was negotiated by Mr Aaron Burgess of Burgess & Associates Pty Limited (Burgess & Associates), which carried on business under the name New Vision Finance. It appears that Mr Burgess was known to Mr Taylor as a finance broker, Mr Taylor having had prior dealings with Mr Burgess in obtaining finance.
Mr Taylor gave evidence that, in December 2006, he and Mr Crossman spoke to Mr Burgess about obtaining finance for Graphfix in the sum of $140,000. The funds were to be used for working capital for the business of Graphfix and to reduce a tax liability of Graphfix.
At some time within the next few weeks, probably in February 2007, Mr Burgess provided to Mr Taylor and Mr Crossman some documents for signing relating to proposed finance from Macquarie. Mr Taylor said that Mr Burgess gave them a pile of things to sign and that, although he did not thoroughly read all the paperwork, as there was a large amount, he was of the belief that Graphfix was borrowing money from Macquarie against its existing equipment. He said that Mr Burgess explained that to him and Mr Crossman. Mr Taylor accepted that Graphfix was not intending to buy any new machinery and that any new machinery could not have been fitted. Mr Taylor said that he signed documents and that he saw Mr Crossman sign documents while Mr Burgess was there. Mr Taylor then left Mr Burgess and Mr Crossman while he went elsewhere in the production area of the premises of Graphfix.
On 26 June 2007, Mr Crossman made a statement to the police in connection with enquiries that the police were making concerning the activities of Mr Burgess (the Crossman Statement). In the Crossman Statement, Mr Crossman said that, in January 2007, he and Mr Taylor discussed obtaining finance to pay a tax debt of Graphfix and Mr Taylor told him that he had spoken to Mr Burgess, whom he knew as a finance broker. Mr Crossman said in the Crossman Statement that, at some time in early February 2007, Mr Burgess came to the premises of Graphfix to talk to Mr Crossman and Mr Taylor about obtaining finance. The Crossman Statement said that it was made clear to Mr Burgess that Graphfix was obtaining finance with the intention of paying out a tax debt so that the money was basically working capital for its business.
In the Crossman Statement, Mr Crossman said that Mr Burgess went away and came back some time during the next few weeks and told them that he was using Macquarie to obtain finance. The Crossman Statement said that Mr Crossman remembered signing some of the documents but he was not really sure what it was that he was signing. It said he was told by Mr Burgess to sign in certain spots and he did so. It also said that at no time was it the intention of Graphfix to buy new machines or equipment with the proposed finance. The Crossman Statement said that, a couple of weeks later, Mr Burgess told them that the finance had been approved.
The Crossman Statement said that, in April 2007, Graphfix received $128,000 into its bank account and that Mr Crossman and Mr Taylor were confused by that amount, because they had applied for the sum of $140,000 and that sum had been approved. The Crossman Statement said that Mr Crossman contacted Mr Burgess about the amount and was told that there was a GST tax payment. The Crossman Statement said that Mr Crossman was angry about that and told Mr Burgess that he should not take the GST tax amount. It said that the next day the money disappeared out of the bank account of Graphfix and that, a few days later, $140,000 appeared in the Graphfix account. The Crossman Statement said in the Crossman Statement that Graphfix paid Mr Burgess about $3000 or $3500 for his services in arranging the finance.
In an affidavit sworn on 21 April 2011, which was relied on in the proceeding, Mr Crossman said that at no time was he involved in, and did not know, the precise finance arrangements between Macquarie and Graphfix. He said that all of those arrangements were organised by Mr Taylor and Mr Burgess, whom Mr Crossman understood to be a finance broker. He said that his understanding of the transaction was that Macquarie was going to lend to Graphfix $140,000 to be secured by a charge over a used Virkotype Thermo Unit, which was at that time owned by Graphfix. He said that he further understood at the time that Mr Taylor was obtaining the loan for the purposes of paying a then pressing tax debt owed by Graphfix.
Mr Crossman said in his affidavit that he became a director of Graphfix on 3 June 2005. Subsequent to his appointment, it came to his attention that Graphfix had outstanding assessments from the Australian Taxation Office (the ATO) for periods prior to June 2005. He said that, over the next few months, he discovered that taxation debts of approximately $400,000 to $500,000 for periods prior to June 2005 remained unpaid and were owing by Graphfix to the ATO. He said that, from that time on, his relationship with Mr Taylor became very strained and uneasy.
Mr Crossman said in his affidavit that, in early 2007, Graphfix still owed the ATO a significant sum of money. Mr Taylor told him, at that time, that he would like to finalise some of the debts of Graphfix, particularly outstanding tax. Mr Taylor told Mr Crossman that he would make investigations of a broker he knew to see if moneys could be borrowed and on what basis. Mr Crossman said that he responded that that was a good idea but that they would need to ensure that the finance was not too expensive.
Mr Crossman said in his affidavit that Mr Taylor spoke to him again a few days later, saying that he had spoken to Mr Aaron Burgess, who thought that they could borrow moneys using one piece of their existing equipment as security, since it was valuable equipment even though it was not new. He suggested that one of the Virkotype ovens might be suitable security and that they should try to borrow about $140,000 to enable the current tax debt to be paid. The rest would be used for working capital and to reduce the shareholders' loan accounts. Mr Crossman said that he responded that that was "ok as long as the interest charges [were] not too high".
Mr Crossman said in his affidavit that, a few days later, Mr Taylor showed him a document that appeared to be an application form for a loan. The document in question included a statement of assets and liabilities for Mr Crossman. Mr Taylor asked Mr Crossman if he could check to see if the information in the document was correct. Mr Crossman took the document and looked at it quickly later that day. At that time, he noticed that it was incorrect as it showed that he owned a BMW motor vehicle and owned 500,000 BHP shares. Mr Crossman said in his affidavit that he had never owned either.
Mr Crossman said in his affidavit that, the next day, he gave the document to Mr Taylor and told him that the document needed to be changed to show that the oven was used and not new. He also told that Mr Taylor that he did not own a BMW or 500,000 BHP shares. Mr Taylor took the document. Mr Crossman said that he assumed that Mr Taylor was intending to amend it and re-submit it to him for his approval. However, Mr Crossman said, no other document relating to the proposed transaction was ever provided to him for his approval or execution.
In a further affidavit sworn on 10 October 2011, which was relied on in the proceeding, Mr Crossman said that, had Mr Taylor told him that a guarantee was needed from him or his wife or the Crossman Company, he would not have signed it. He said that, if Graphfix had been liquidated, he would have tried to buy its business from the liquidator. He said that, in those circumstances, he could not see why he would ever have agreed to sign a guarantee. He also said that the first time he saw the Principal Agreement with writing on it was when he saw a copy attached to an affidavit sworn on behalf of Macquarie and filed in the District Court proceeding.
Mr Crossman accepted in cross-examination that, in his discussions with Mr Burgess, he provided all of the personal information required to assess his creditworthiness for the purpose of providing a guarantee. He accepted that he understood that that was why he was providing personal information.
In the course of cross-examination, Mr Crossman also said that, in February or March 2007, he obtained a copy of a form of commercial lease agreement and took it to his solicitors, Messrs Bicknell and Monteith. He said that he was not sure whether Mr Taylor or Mr Burgess gave the document to him. Mr Crossman confirmed that documents that he took to his solicitors included a statement of his assets and liabilities on which some hand-written amendments had been made. Changes were made to the documents, including the deletion of a reference to a BMW motor vehicle. Mr Crossman said that his solicitor asked him whether the Equipment was new and that, when he said it was not, the solicitor told him that the reference in the documents to the Equipment being new would have to be changed. Mr Crossman said that, after he had been to his solicitors, he took the documents and gave them back to Mr Taylor. He said that he has not seen them since.
Mr Crossman accepted in cross-examination that he signed a document in the course of "going through his financials" with Mr Burgess. At that time, Mr Burgess asked for a copy of his driver's licence, which Mr Crossman provided to him. He accepted that Mr Burgess asked for details about his personal circumstances and about the property he owned. Mr Burgess also asked about any motor vehicles that Mr Crossman owned.
Mr Crossman confirmed in cross-examination that, from 2008, Mr Taylor was no longer involved with Graphfix, having been removed as a director, although it appears that there was litigation in relation to the exclusion of Mr Taylor from the management of Graphfix. Mr Crossman was from that time effectively the controlling hand of Graphfix.
Mr Crossman accepted that he was aware that Graphfix was paying monthly instalments to Macquarie and that those payments continued after Mr Taylor was removed as a director. Mr Crossman said that, at the end of 2008, he tried to get a copy of the Principal Agreement from Macquarie. Macquarie sent him a copy of the front page in December 2008. In January or February 2009, Macquarie sent a copy of the guarantee part of the Principal Agreement showing the impugned signatures of Mr Crossman and Mrs Crossman. Mr Crossman accepted in cross-examination that when, some time during 2009, he found out about his and Mrs Crossman's signatures on the guarantee part of the Principal Agreement, he did not report anything to the police, notwithstanding that it is now his contention that somebody had forged his signature and his wife's signature on the Principal Agreement.

The Reasons of the Trial Judge

Mr Craig Feodoroff, an employee of Macquarie, gave evidence about a complaint made to the police by Macquarie concerning false invoicing on three loan applications received by Macquarie from Mr Burgess or Burgess & Associates. He said that the common feature was that invoices purporting to be from a supplier were found to be false. False documents were created to deceive Macquarie into funding loans. The false documents induced Macquarie to believe that it held a legitimate interest over particular products for which a loan was approved and funded. Mr Feodoroff said that Macquarie investigated other transactions referred by Burgess & Associates and uncovered four more loans where invoices were found to be false. The investigations disclosed that banking details that were said to be for the supplier were in fact the banking details of Burgess & Associates or Mr Burgess. That meant that payments that Macquarie intended to be made to a supplier actually went into the account of Mr Burgess or Burgess & Associates. Investigations indicated that the suppliers had no knowledge of the false invoices and had not provided any of the invoices to Macquarie. However, it appeared that the majority of the information in the loan applications was legitimate, including the details of the proposed borrower, the signatures of the borrower, and the compilation of the appropriate forms.
In his reasons, after setting out extracts from the Crossman Statement, the trial judge observed that, at no stage in the Crossman Statement did Mr Crossman claim that any signatures on the documents provided to him by Mr Burgess were not his signatures. His Honour said that Mr Crossman did not make that claim until 4 June 2009, when he informed Macquarie that he and his wife did not sign the documents and that the signatures on the documents were not theirs. Those observations appear to assume that Mr Crossman had been provided with copies of the document with the impugned signatures on them. However, his Honour did not make any finding to that effect. Further, there was no evidence that Mr Crossman had copies of the document with the impugned signatures as at June 2007. Rather, he said that he did not receive the document until early 2009.
The trial judge then set out extracts from Mr Crossman's affidavit of 21 April 2011 where he said that he was not involved in, and did not know, the precise arrangements between Macquarie and Graphfix. His Honour also referred to Mr Crossman's admission in cross-examination that he had had prior dealings with Macquarie in connection with another company of which he was a director, where both he and Mrs Crossman provided guarantees in respect of a commercial hire purchase agreement. The relevance of that evidence is not clear. Mr Crossman did not assert that he did not understand the nature of the guarantee or that he had never given a guarantee. His defence was simply that he did not sign a guarantee in respect of any obligation of Graphfix and that he would not have done so had he been asked to do so.
The trial judge referred to Mr Crossman's evidence concerning his knowledge of the deposit of the sum of $140,000 into the account of Graphfix, after the sum of $128,000 had been deposited and apparently withdrawn. His Honour also referred to the direct debit payments of $2989.91 per month made by Graphfix to Macquarie from 10 April 2007 until 4 March 2009.
The trial judge then dealt with the Handwriting Report, in so far as it expressed opinion about the impugned signatures purporting to be those of Mr Crossman. His Honour set out two critical passages from the Handwriting Report. In those passages, Ms Novotny said that, notwithstanding the overall pictorial resemblance between the questioned signatures and genuine signatures of Mr Crossman, it was clear, from the nature of the differences observed, that the questioned signatures were not written in the normal style depicted by the genuine signatures.
Ms Novotny said that the questioned signatures each exhibited the hallmarks of being the product of "a simulation process". She referred to a combination of overall pictorial resemblance, numerous pen stops or pen lifts, and a lack of dynamic quality, as well as differences in a number of features. Ms Novotny said that, while those observations allowed a strong conclusion to be expressed as to the method of production of the signatures, namely "simulation", they did not allow for a strong conclusion as to who wrote them.
Ms Novotny said that, given the contrived nature of the questioned signatures, she could not, scientifically, determine who wrote the signatures. For that reason, she was unable to express a conclusion in probability terms. Significantly, she said that the simple explanation for her observations was that the questioned signatures were the product of simulation by a person other than Mr Crossman. However, she said, the possibility must be considered that one or more of those questioned signatures was written by Mr Crossman as a "self-simulation". She went on to say that there may be other evidence in the case that assisted in assessing the validity of the possibilities of "simulation" and "self-simulation", but that she could not take any such other evidence into account. She said that "[t]he trier of fact may be able to consider this further".
In his reasons, the trial judge observed that Ms Novotny had not explained exactly what a "self-simulated" signature was. In that context, his Honour raised the question as to whether "the signatures that are 'self-simulated' were done by Mr Crossman". That is to say, his Honour posed the question whether they were Mr Crossman's signature signed by him. Significantly, his Honour expressed no conclusion in that regard.
Nevertheless, his Honour then said that the evidence established, to his satisfaction, on the balance of probabilities, seven matters at the time of the signing of the Principal Agreement. Curiously, several of those matters clearly post-dated the signing of the Principal Agreement. Having set out what those seven matters were, his Honour then said that, taking into account Ms Novotny's opinion that some of the signatures she examined were "self-simulations", and not having any explanation before him from Mr Crossman as to why he would simulate or fake his own signature, his Honour had reached the conclusion that, on the balance of probabilities, Mr Crossman did sign the Principal Agreement.
The first of the seven matters that his Honour said had been established to his satisfaction was that Mr Crossman had had experience in signing an indemnity and guarantee in relation to at least one loan in the past. However, it is difficult to see the relevance of that finding in the context of the defence advanced by Mr Crossman. Mr Crossman did not suggest that he did not understand the nature of a guarantee. His answer to Macquarie's claim was simply that he had not signed the Principal Agreement.
The second matter was that Mr Crossman was aware from Mr Taylor that a loan application to Macquarie was to be made and was aware of the reason for the loan and the purpose for which the loan would be utilised. That is to say, Mr Crossman had said in his affidavit that he understood that the loan was to be obtained for the purpose of paying a pressing tax liability owed by Graphfix. However, that fact appears to have no bearing on the question of whether or not the impugned signatures of Mr Crossman were genuine. Specifically, it has nothing to do with the question as to why Mr Crossman might have "self-simulated" the signatures.
The third matter was that Mr Crossman had signed documents given to him by Mr Burgess. Thus, Mr Crossman had received draft documents that showed that he was expected to be a guarantor and he showed those documents to his solicitors. Mr Crossman accepted that he subsequently signed some documents without taking care to understand them fully. On the other hand, while that conclusion may support a finding that Mr Crossman did indeed sign the documents, it does not have any bearing on the question of why Mr Crossman might have "self-simulated" the signatures.

In that regard, the impugned signatures of Mrs Crossman can be contrasted with the impugned signatures of Mr Crossman. Ms Novotny had no difficulty in concluding that Mrs Crossman's impugned signatures were not genuine. It is difficult to see any rationale for Mr Crossman to have self-simulated his own signatures. There was no suggestion that Mr Crossman forged his wife's signature.
The fourth matter was that Mr Crossman was aware that, when the sum of $128,000 was deposited into the bank account of Graphfix, it was not the correct amount. It is difficult to see where that fact leads. Mr Crossman said in his affidavit that he understood that the finance was to be for $140,000. It is not surprising that, when he found that only $128,000 had then credited to the account, he would raise a query about it.
The fifth matter was that, when the $140,000 was ultimately received by Graphfix, Mr Crossman did not question Mr Taylor as to where such a large sum may have come from. That seems to be adverting to the fact that Mr Crossman must have known that some documentation would need to be signed by Graphfix before it could obtain such a large sum of money. However, that observation appears to have nothing to do with the evidence of Ms Novotny that the impugned signatures of Mr Crossman were "self-simulations".
The sixth matter is that Mr Crossman did not question why the monthly repayments of $2989.91 were being made to Macquarie. Again, that might be a reason why Mr Crossman might have assumed that some documentation was required on behalf of Graphfix. However, it has no bearing on the conclusion in the Handwriting Report that the impugned signatures were "self-simulated", much less on why Mr Crossman might have "self-simulated" his own signature.
The seventh and final matter was that, when he gave his statement to the police in June 2007, Mr Crossman did not make any check of the documents that he said that Mr Burgess had asked him to sign. Further, he did not give those documents to the police. However, that observation appears to assume that Mr Crossman had the documents at the time when he spoke to the police in June 2007. Mr Crossman's contention was that he had only seen a draft and had not signed a guarantee. In any event, it does not appear to have any bearing as to why Mr Crossman had "self-simulated" his signature.

Deficiencies of the Trial Judge's Reasoning

The conclusion of the trial judge that the impugned signatures of Mr Crossman are genuine was reached after taking into account the following matters:
·Ms Novotny's opinion that some of the signatures she examined were self-simulations; and
·the absence of any explanation from Mr Crossman as to why he would simulate or fake his own signature.
Both matters involve misconceptions on his Honour's part.
First, his Honour appears to have misconceived the conclusion reached in the Handwriting Report. Ms Novotny did not conclude that any of the signatures she examined were self-simulations. Rather, her "simple explanation" was that they were the product of simulation by a person other than Mr Crossman. She merely adverted to the possibility that one or more of the questioned signatures was written by Mr Crossman as a "self-simulation". Ms Novotny did not give any indication as to why that was a possibility that "must be considered". There is certainly nothing in the Handwriting Report to indicate that that was a possibility. Thus, it appears that his Honour's conclusion was reached after taking into account a significant misconception as to the opinion of Ms Novotny, namely, his Honour's treated Ms Novotny's unfounded surmise about "self-simulation" as a conclusion, when it was expressed by her to be a "possibility".
Secondly, his Honour appears to have misdirected himself in so far as he took into account the fact that there was no explanation from Mr Crossman as to why he would simulate or fake his own signature. There was no forensic obligation on Mr Crossman to explain why he would simulate or fake his own signature. His case was simply that the impugned signatures were not his. In any event, that observation by his Honour is itself based on the misconception that Ms Novotny had expressed an opinion that some of the signatures were self-simulations.
It is clear that the conclusion reached by the trial judge as to the signatures of Mr Crossman is completely undermined by his having taken into account the two misconceptions described above. Neither of the matters relied on by his Honour is capable of supporting the conclusion that the signatures are genuine signatures of Mr Crossman's. His Honour gave no other reasons for reaching that conclusion. The conclusion, therefore, should not be allowed to stand. However, it does not follow that there should be a verdict in Mr Crossman's favour.

Relief

Mr Crossman's notice of appeal filed on 5 March 2012 sought an order that the judgment for Macquarie against him be set aside and that the order for costs be set aside. The notice of appeal sought orders that, in lieu thereof, there be a verdict for Mr Crossman and an order that Macquarie pay his costs. In the course of the hearing of the appeal, counsel for Mr Crossman sought, and was granted, leave to amend the notice of appeal to seek, in the alternative, an order that there be a re-trial of the question of Mr Crossman's liability under the Principal Agreement. Counsel for Macquarie was unable to refer to any prejudice that would flow from the grant of that leave. In the circumstances, it is necessary to consider whether or not there is a basis for ordering a new trial, rather than granting the relief claimed by Mr Crossman in his notice of appeal.
It should be noted that Mr Crossman's answer to Macquarie's claim is that he did not sign the document in question. He does not rely on any principle that, on the assumption that he signed the Principal Agreement, he should be relieved of liability because his co-guarantors were not bound by guarantee and indemnity in the Principal Agreement.
Macquarie contended that there was ample material before the trial judge, apart from the matters upon which his Honour based his conclusion, that would support a verdict against Mr Crossman. In particular, Macquarie contended that his Honour made it clear that he rejected the evidence of Mr Crossman that he did not sign the Principal Agreement. That, it says, is not inconsistent with the evidence of Ms Novotny that the purported signatures of Mr Crossman were the product of simulation. Further, Macquarie contends, the conflicting evidence necessitated an assessment of the credibility and reliability of Mr Crossman, as well as consideration of undisputed facts concerning the Principal Agreement. It says that the absence of express references to the demeanour and credibility of Mr Crossman does not exclude assessment of his credibility in that evaluative process. It says that, having regard to a number of matters, the finding that Mr Crossman signed the Principal Agreement was open on the evidence.
Mr Crossman asserted that he was not involved in, and did not know, the precise financial arrangements between Graphfix and Macquarie, since all financial arrangements were organised by Mr Taylor and Mr Burgess. However, in his affidavit of 21 April 2011, Mr Crossman set out the extent of his knowledge and involvement in the Principal Agreement at the time when it was entered into and the sum of $140,000 was received by Graphfix. The Crossman Statement, made on 26 June 2007, demonstrates that Mr Crossman was aware that the sum of $128,000 had been deposited into the bank account of Graphfix and that that deposit was subsequently reversed. Mr Crossman also gave evidence about his concern as to the cost of finance and the interest rate to be charged. He was also aware of the inaccuracies concerning his own financial affairs in at least one document provided to him by Mr Taylor.
Mr Crossman denied at one stage that he had ever seen a copy of the Principal Agreement that included the guarantee and indemnity. However, in cross-examination he said that, in February or March 2007, he obtained a copy of a draft agreement that included a guarantee and indemnity and that he took that to his solicitors. He made no mention of that in his affidavits or in the Crossman Statement.
Mr Crossman identified a commercial hire purchase agreement as the document that he received in February or March 2007 from Mr Taylor, which he took to his solicitors. That document is not a loan agreement providing for security over existing equipment. Graphfix is described in the document as the Hirer, Macquarie is described as the Owner and Mr Crossman, Mr Taylor, Mrs Crossman and the Crossman Company are described as the Guarantor. The only correction made by Mr Crossman following provision of legal advice was to change the description of the Equipment from "new" to "used" and to amend the description of his own assets and liabilities.
Mr Crossman conceded that Mr Burgess explained to him that Macquarie would require a personal guarantee from the directors of Graphfix. He gave details of his personal assets and liabilities to Mr Burgess, including details of real property, mortgages, motor vehicles and bank account balances. His only explanation in cross-examination for doing so was that he did not think that the loan would go through and he just provided the information to keep Mr Burgess happy. When it was put to Mr Crossman that he provided all his personal information for the purposes of Macquarie assessing his creditworthiness for the purpose of providing a guarantee, he responded "[y]es, go on". When it was put to him that that was his understanding as to why he provided the personal information, he responded "[yes], go on".
Mr Crossman asserted that he did not receive any documentation other than the application provided to him by Mr Taylor. He denied that he ever received any documentation from Mr Burgess and denied that any documentation was ever submitted to him for approval or execution. He asserted in cross-examination that he never signed any documents whatsoever in relation to the transaction that was the subject of the proceeding. However, he later conceded that he signed a one page document, being a Privacy Act consent form at the office of Mr Burgess.
In the Crossman Statement, Mr Crossman said that Mr Burgess went away and came back sometime later and showed them a large amount of paperwork. He said that he remembered signing some documents but was not sure really what it was that he was signing. He was told by Mr Burgess to sign in certain spots and he did so. He said that at no time did he and Mr Taylor intend to buy new machines or equipment with fresh finance. That evidence is hardly consistent with simply signing a single page Privacy Act form.
In cross-examination, Mr Crossman said that he had had no contact, including telephone contact, with Mr Burgess since March 2007 and that he did not have a conversation with Mr Burgess in April 2007. However, in the Crossman Statement, he said that, in April, Graphfix received $128,000 into its bank account and he contacted Mr Burgess about that matter and was told that the difference between $140,000 and $128,000 was a GST tax payment.
Further, Mr Crossman accepted that, in February or March 2009, he was aware, from looking at the documents he had received from Macquarie, that he, his wife and the Crossman Company were shown as having given a guarantee and indemnity to Macquarie. Notwithstanding that he subsequently asserted that the signatures were forgeries, he did not report that matter to the police or to Macquarie.
Mr Crossman gave evidence that he engaged his solicitors to draft an agreement under which the assets of Graphfix were to be split. The agreement dated 13 February 2009 provides that the Crossman Company was to be entitled to the right, title and interest of Graphfix in certain machinery, which included the Equipment. The agreement of 13 February 2009 stated that the Crossman Company was to take that machinery subject to a lease from Macquarie. The agreement of 13 February 2009 also provided that the Crossman Company was to be solely responsible for the payment of all moneys payable under that lease from the date of completion. It is unlikely that Mr Crossman's solicitors would not have had a copy of the Principal Agreement at the time that the agreement of 13 February 2009 was drafted. That suggests that Mr Crossman provided his solicitors with the Principal Agreement, which included the guarantee and indemnity.
In the light of the matters outlined above, it would have been open to the trial judge to infer that Mr Crossman had signed more than one document in the presence of Mr Burgess at the offices of Graphfix and that the documents presented to him did not consist of a single page Privacy Act form, but rather a large number of documents. It therefore would have been open to the trial judge to find, consistently with the Handwriting Report, that Mr Crossman did sign the Principal Agreement. On the other hand, it would also have been open to the trial judge to conclude that, notwithstanding all of the matters described above, the signatures were not those of Mr Crossman.
It would not be appropriate for the Court of Appeal to make an assessment of all of the relevant matters mentioned above, particularly the credibility of Mr Crossman. Accordingly, the Court of Appeal should not substitute a verdict for Mr Crossman. Rather, the matter should be remitted to the District Court for further trial. In that regard, I have read in draft form the reasons of McColl JA. I agree with her Honour's observations.

Conclusion

The appeal should be allowed. The orders made by the District Court against Mr Crossman should be set aside. The matter should be remitted to the District Court for further trial as to whether or not the Principal Agreement was signed by Mr Crossman.
Mr Crossman has been successful in the appeal. However, the relief he has obtained was not sought in the original notice of appeal. It was only sought after leave was given in the course of the hearing for him to file an amended notice of appeal. The Court reserved the costs of the amendment. Ordinarily, Mr Crossman would be required to pay the costs thrown away by the amendment. It is unlikely that Macquarie has incurred any costs in relation to the application to amend. In the circumstances, the appropriate order is that Macquarie should pay Mr Crossman's costs of the appeal, other than the costs of the amendment.
**********

[2013] NSWCA 155

06 June 2013

Key Legal Topics

Areas of Law

Contract Law

Evidence

Civil Procedure

Legal Concepts

Appeal

Expert Evidence

Costs

Remedies

Contract Formation

Case Title:	Crossman v Macquarie Leasing Pty Limited
Medium Neutral Citation:	[2013] NSWCA 155
Hearing Date(s):	26 March 2013
Decision Date:	06 June 2013
Before:	McColl JA at [1]; Basten JA at [9]; Emmett JA at [65]
Decision:	The Court orders that: 1. The appeal be allowed. 2. The orders made by the District Court on 6 December 2011 be set aside. 3. The matter be remitted to the District Court for a further trial as to whether or not the agreement dated 4 April 2007 was signed by the appellant. 4. The respondent pay the appellant's costs of the appeal, other than the costs of the amended notice of appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	CONTRACT - guarantee and indemnity in relation to commercial hire purchase agreement - whether appellant signed guarantee - where signature of another guarantor contrived EVIDENCE - expert evidence as to authenticity of signatures - where expert found appellant's alleged signature contrived - nature of expert's mention of "self-simulation" - characterisation of expert evidence - where expert not cross-examined - where signature of another guarantor was contrived
Legislation Cited:	Supreme Court Act 1970 (NSW), s 75A Uniform Civil Procedure Rules 2005 (NSW), r 51.53
Cases Cited:	Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447
Category:	Principal judgment
Parties:	Barry Ian Crossman - Appellant Macquarie Leasing Pty Limited - Respondent
Representation
- Counsel:	Counsel: J Loofs - Appellant E Glover - Respondent
- Solicitors:	Solicitors: Mahony Taren - Appellant Douros Jackson - Respondent
File Number(s):	CA 2012/72186
Decision Under Appeal
- Before:	Sorby DCJ
- Date of Decision:	06 December 2011
- Court File Number(s):	DC 2010/115816