Dimasi & Anor v Nangiloc Colignan Farms Pty Ltd (No.3) - [2006] FMCA 1562

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DIMASI & ANOR v NANGILOC COLIGNAN FARMS PTY LTD (No.3)

[2006] FMCA 1562

BANKRUPTCY – Application to set aside bankruptcy notice – whether debt paid – whether misdescription of given name of debtor renders bankruptcy notice invalid.

Bankruptcy Act 1966 (Cth)

Matheson v Scottish Pacific Business Finance (2005) 3 ABC(NS) 227 Crisafulli, Re: Ex parte National Commercial Banking Corp (Aust) Ltd (1985) 11 FCR 272
Dimasi & Anor v Nangiloc Colignan Farms Pty Ltd [2006] FMCA 856
Dimasi & Anor v Nangiloc Colignan Farms Pty Ltd (No 2) [2006] FMCA 1007
Jones v Dunkel (1959) 101 CLR 298
Adams v Lambert (2006) 225 ALR 396
Sgro v Liberty Financial Funding Pty Ltd (2004) 207 ALR 625

First Applicant:

FRANK DIMASI (trading as f & m dimasi)

Second Applicant:

MARIA DIMASI (trading as f & m dimasi)

Respondent:

nangiloc colignan farms Pty Ltd (ACN 008 447 603)

File number:

MLG 512 of 2006

Judgment of:

McInnis FM

Hearing dates:

11 and 14 July 2006

Delivered at:

Melbourne

Delivered on:

20 October 2006

REPRESENTATION

Counsel for the Applicants:

Mr T.D. Best

Solicitors for the Applicants:

V.M. Roccisano

Counsel for the Respondent:

Mr D. Peries

Solicitors for the Respondent:

Leonard Legal

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 512 of 2006

Frank dimasi (trading as f & m dimasi)

First Applicant

MARIA dimasi (trading as f & m dimasi)

Second Applicant

And

Nangiloc colignan farms Pty Ltd (acn 008 447 603)

Respondent

REASONS FOR JUDGMENT

This is an application to set aside a bankruptcy notice dated 2 November 2005 by Frank Dimasi (the first applicant) and Maria Dimasi (the second applicant). The bankruptcy notice was issued by Nangiloc Colignan Farms Pty Ltd, the respondent. The bankruptcy notice asserts that the applicants are indebted to the respondent in the sum of $4422.05.
It should be noted at the outset that the bankruptcy notice is addressed to "FRANK DIMASI t/as F AND M DIMASI (A FIRM) AND MICHELINA DIMASI t/as F AND M DIMASI (A FIRM)."
The debt is claimed to have arisen from what can only be described as proceedings in the Magistrates Court at Mildura of a somewhat minor nature which have now developed into what may be described in these proceedings as a dispute which is clearly out of all proportion to the amount now claimed. In any event, the debt appears to arise out of orders made in the Magistrates Court at Mildura on 9 July 2003. In those proceedings the plaintiff, F and M Dimasi (a firm), appears to have made a claim for a breach of contract or agreement against the respondent.
Orders were made on the claim that the respondent pay F and M Dimasi $2,667.74 and interest of $176.41 plus costs of $882.80, making a total of $3,726.95. An order was made in the same proceeding that F and M Dimasi (a firm) pay the respondent's costs of $7217.68. In the schedule attached to the bankruptcy notice the amount of $7,217.68 is referred to, and added to that amount is interest claimed to be $931.32, making a total of $8,149.00.
Curiously, the schedule then recites next to the item "payments made and/or credits allowed since date of judgments or orders" the sum of $3,726.95, which can only be the amount of the order made on the same day as the judgment or order relied upon by the respondent. It is clearly not a payment made or credit allowed since the date of judgment or order, though I take it to be conceded by the respondent that once the order was made, the respondent was then prepared to make allowance for that since the date of the order. Hence the bankruptcy notice arrives at a total debt owing of $4,422.05 which, having regard to the issues raised in these proceedings and indeed evidence from Mr Frank Dimasi as to his financial circumstances, now seems to have reached a stage well beyond what one might describe as normal proceedings between parties.
At the outset it should be indicated that the bankruptcy notice, whether served or otherwise, appears to incorrectly identify the second applicant. It refers to the second applicant as Michelina Dimasi when her correct name is Maria Dimasi. She is wrongly identified by the process server as Michelina Dimasi. The error in the name of the second applicant on the bankruptcy notice appears to have occurred when lawyers for the respondent undertook a business name search of the records maintained by the Australian Business Register.
That search, which is exhibit "OPE2" of an affidavit of the lawyer Omar Peter El-Hissi, is an extract which refers to an entity name, "Frank and Michelina Dimasi", which appears to have a postcode for a Melbourne address and is not an extract for ‘F and M Dimasi’ of Mildura. That error in my view is fatal and is not a mere defect or irregularity of a kind which could be cured by a declaration by this Court. On that ground alone I am satisfied that the bankruptcy notice as against the second applicant should be set aside.
The misdescription of the given name of the Second Applicant in this instance in my view is not a mere irregularity that can be cured under s.306 of the Bankruptcy Act and this case is one where it could not be claimed that the bankruptcy notice gave the same name as the judgment on which it was based (see Matheson v Scottish Pacific Business Finance (2005) 3 ABC(NS) 227 and Crisafulli, Re: Ex parte National Commercial Banking Corp (Aust) Ltd (1985) 11 FCR 272).
It remains, however, for the Court to consider what have become substantive issues concerning the application to set aside the bankruptcy notice issued against the first applicant. Based upon the affidavit material, the applicants submit the following:
·no act of bankruptcy has occurred in respect to the applicants;
·that the relevant debt was paid by the first applicant on 8 June 2004 prior to the bankruptcy notice dated 2 November 2005;
·the applicants were not properly served with the bankruptcy notice; and
·the bankruptcy notice contains fatal defects rendering it invalid.
Though referring to claims by the applicants, I have already dealt with the setting aside of the bankruptcy notice as against the second applicant on the basis of misdescription, which depended upon a search of the wrong partnership. Nevertheless, if I am wrong in relation to that conclusion, it may well be that other arguments advanced for and on behalf of the first applicant can also be applied to the second applicant.
The crucial issue in this case which involves significant evidence was that the relevant debt was paid. It will be clear from the material produced that if the amount was paid, then the issue of the bankruptcy notice would be without foundation and indeed may even be regarded as fraudulent. In the alternative, if the amount has not been paid, then at least part of that evidence appears to be a document relied upon by the first applicant as evidence of payment, the authenticity of which is strongly tested. An issue of forgery has arisen. Hence, in what otherwise might be regarded as a bankruptcy notice arising out of a small amount of money, significant issues arise for the consideration of the Court, including fraud and forgery.
In those circumstances, the Court was not prepared to simply allow the parties to rely upon affidavit evidence and it was decided to permit the parties to file appropriate affidavit material and call witnesses who could then be cross-examined. Where allegations are made of a serious nature involving, at the very least, potential findings of fraud and/or forgery, it is my view that a Court in bankruptcy would find the task almost impossible without adducing evidence even if, as in the present case, neither party requested a hearing.
It is clear that if the debt has been paid, as alleged by the first applicant, then the bankruptcy notice should be set aside.
It should also be noted at the outset that in a separate decision (Dimasi & Anor v Nangiloc Colignan Farms Pty Ltd [2006] FMCA 856) I decided that the Court was able to entertain the application to set aside the bankruptcy notice, though as part of its consideration in that application it would decide whether or not there has been a fundamental defect or flaw in the service. If there has been invalid service, then that of itself may be sufficient to set aside the bankruptcy notice.
The orders sought by the applicants are that the bankruptcy notice should be set aside and, further, that a petition dated 8 June 2006 filed against the applicants be declared and also set aside. Orders for costs are sought. As indicated, issues raised include the substantive issue that no act of bankruptcy has occurred and the relevant debt was paid, and that in any event service has not been properly effected or that the bankruptcy notice contains fatal defects.
I have already dealt with the misdescription of the second applicant, and on that ground alone I am satisfied it is appropriate to set aside the bankruptcy notice against her. It is appropriate in my view to deal with a second claim that the bankruptcy notice contains a fatal defect and does not comply with the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) on the basis that the reference to the amount of $3,726.95 in item 5 of the schedule to the notice is misdescribed as a "credit or payment allowed since the date of judgment" whereas it was in fact an automatic credit payment made on the actual date of order by reason of what counsel submitted to be the necessary and automatic setting off of the amounts awarded to each of the parties in that judgment of the Magistrates Court on 9 July 2003.
In my view, this is not a defect which would justify rendering the bankruptcy notice invalid. In one sense it is a valid description and allowance made for the order in favour of the applicants against the respondent, although made on the same day as the order obtained in favour of the respondent, which is the basis for the bankruptcy notice.
I do not regard the reference to the other order made that day as being necessarily incorrect as it is conceivable that after the date of that order, the amount then due by the respondent to the applicants could properly be regarded as a credit allowed since the date of orders, based though it is on an order made on the same day as the order relied upon by the respondent. It is perhaps unfortunate that a set-off order was not made by the learned Magistrate on the same day, but nevertheless I am not satisfied that the matter in which it has been referred to in the schedule is in any way misleading or that it constitutes a sufficient basis upon which the Court could regard the bankruptcy notice on that ground as being invalid. Hence I refuse to set aside the bankruptcy notice on this ground.
A further issue which can be determined at the outset is the claim by the second applicant that he was not served with the bankruptcy notice as the affidavit of service simply refers to the first applicant as "Frank Dimasi." It was argued that the affidavit of service should have referred to him as "Frank Dimasi trading as F and M Dimasi (a firm)." I reject that submission. In my view, where a partner of a firm is identified accurately, as in the case of the first applicant as "Frank Dimasi", then that identification does not provide any or any proper basis upon which the Court should set aside a bankruptcy notice, albeit that the bankruptcy notice refers to "Frank Dimasi trading as F and M Dimasi (a firm)."

The Substantive Issue

Having dealt with the preliminary issues, it is now necessary to deal with what I regard as the major dispute between the parties; namely, whether the debt has been paid. As indicated earlier, if the debt has been paid, then it is clear that the bankruptcy notice should be set aside, and likewise the petition referred to earlier declared void and set aside.

The Evidence

The Applicant

Mr Frank Dimasi relied upon affidavits sworn by him on 14 April 2006 (Exhibit A1), 12 May 2006 (Exhibit A2) and 23 June 2006 (Exhibit A3). He gave evidence and was cross-examined.
In his affidavit sworn 14 April 2006 (the first affidavit), Mr Dimasi asserted there was no debt owing. He specifically deposed as follows:
“9. On 8 June 2004 prior to the date of the bankruptcy notice I met with Mr Davis of the Respondent at my home address at Lot 1, Fifteenth Street, Irymple. At that meeting Mr Davis acting on behalf of the Respondent agreed to accept $3,500 from me in final settlement of the Proceeding. A written agreement was entered into between us to this effect and I gave Mr Davis $3,500 in cash pursuant to the agreement. The agreement was signed by myself on behalf of F & M Dimasi and by Mr Davis for and on behalf of the Respondent as well as by three witnesses namely, G Kelpalis, M Knott and C. Dimasi. Now produced and shown to me and marked "FD3" is a true copy of the said agreement.
Exhibit "FD3" is a photocopy of a facsimile copy of the agreement or what in evidence is referred to as a receipt (the receipt) reproduced below:

In his affidavit sworn 12 May 2006 (the second affidavit), Mr Dimasi deposes as follows:
“3.On 8 June 2004, at a meeting with Mr Ken Davis of the Respondent at my home address, I gave Mr Davis the original agreement referred to in paragraph 9 of my First Affidavit.
4.I gave Mr Davis the original agreement at that time after it had been executed by the parties, as deposed to in paragraph 9 of my First Affidavit. I do not now know the whereabouts of this original agreement.
5.At that meeting Mr Davis told me he did not have his receipt book with him and that he could not give me a receipt for the $3,500 in cash I paid to him.”
In his affidavit sworn 23 June 2006 (the third affidavit), Mr Dimasi gives further detail of the arrangements leading up to the alleged payment of $3,500.00 and otherwise takes issue with affidavits of Mr Davis which form part of the respondent's case. Relevantly, in his third affidavit, Mr Dimasi deposes as follows:
“5.In early June 2004 at around 4 pm Mr Davis came to visit me at my home address to discuss payment of the debt owing to the respondent in relation to the proceeding referred to in paragraph 5 of my first affidavit. Mr Davis was accompanied by a Mr Kotz who is known to me as an employee of Nangiloc Colignan Farms Pty Ltd. Mr Davis, Mr Kotz and I met outside my grape packing shed. Mr Davis and I then went inside the shed without Mr Kotz. At that time I told Mr Davis that I didn't have any money to pay the debt that day but that if he came back at the same time in a week I would be able to pay him $3500 in cash in satisfaction of the debt. I told Mr Davis that I would only make the cash payment on the basis that I didn't have to pay any interest on the debt. He agreed to this arrangement. Mr Davis told me that he would come back in a week and that he would accept $3500 in cash from me in final settlement of the debt. During this conversation, I also returned Mr Davis' proposed settlement cheque issued in 2003. This conversation between me and Mr Davis took place inside my grape packing shed whilst Mr Kotz was outside. When Mr Davis and I came back out from the shed I saw that Mr Kotz was sitting in Mr Davis' car.
6.On or about 3 June 2004 I spoke to my cousin Cosi Dimasi and asked him if he would lend me $3500 to pay the respondent. He agreed to lend me the money and told me that he would come to my house on 8 June 2004 to give me the cash.
7.On the afternoon of 8 June 2004 at about 3.30 pm Cosi came to my home address and gave me $3500 in cash as a loan. At that time I asked Cosi to stay so that he could witness the payment to Mr Davis.
8.On that dame date at or about 4 pm Mr Davis came to my home address. He was not accompanied by Mr Kotz or anyone else. We met outside the grape packing shed and then went inside for our meeting. My cousin Cosi was also present. At that time I told Mr Davis that I would pay him the $3500 as discussed previously with him on 1 June 2004. As deposed in paragraph 5 of my second affidavit Mr Davis told me that he did not have his receipt book with him. He told me that the reason for this was that he had forgotten to bring it. I was surprised by this as I had told Mr Davis on 1 June 2004 that he would be paid when he next visited me. Mr Davis told me that he would drop in a receipt at a later stage. As Mr Davis did not have a receipt book I went inside my house and handwrote a receipt which I asked my wife to type up on our computer. When my wife came to the shed with the typed receipt Mr Davis appeared to me to be agitated and annoyed and said that he would drop off a receipt later that day. I told him that he would not get the cash unless he signed the receipt. He asked me if he could take the receipt with him and I said that was fine. He then appeared to me to calm down and agreed to sign the receipt. I saw that Mr Davis was standing up as he signed the receipt and that he signed the receipt awkwardly. After signing the receipt I told Mr Davis that I would get the cash. I then went back to my house and I took the signed receipt with me. When I was inside I made a photocopy of the receipt for my own records. I then returned to the shed with the original receipt. The agreement referred to in paragraph 9 of my first affidavit is the receipt referred to in this paragraph. The annexure "FD3" to my first affidavit is a true copy of this receipt. I handed the receipt and $3500 in cash to Mr Davis as deposed in paragraph 9 of my first affidavit and paragraphs 3 and 4 of my second affidavit.
9.Prior to the signing of the receipt I asked George Kelpalis who is one of the contractors who works for me to come and witness the signing of the receipt. I saw that George was working about 200 metres away from the shed and I called him over to be a witness. George was present when Mr Davis signed the receipt and took the cash.
10.My cousin Cosi, George Kelpalis and Malcolm Knott (who was an employee at the time) were also present when Mr Davis signed the receipt and took the cash.
11.I am no longer in contact with Mr Malcolm Knott as he has since married and moved in regards to his employment and I therefore do not know his exact whereabouts.
12.On 29 July 2005 I repaid $3500 to my cousin Cosi in relation to the loan made to me on 8 June 2004. The money was repaid out of my savings account 4551222/v501 and is shown in my statement dated 29 July 2005. Now produced and shown to me and marked "FD1" is a true copy of this statement.”
Exhibit "FD1" appears to be a photocopy of a bank statement from Sandhurst Trustees. It has typed the date "29 Jul 05." Annexed to that under the heading "Tran method" the entry appears, "TFRN." Handwritten next to that entry are the words "to C and F Vineyards." Underneath those words the word "loan" appears. The sum of $9,000.00 is entered under the heading "Withdrawal."
Under cross-examination Mr Dimasi was questioned closely about the affidavits and differences in detail which appeared in those affidavits in relation to the alleged meetings with Mr Davis. It was noted in the first affidavit no mention was made of an earlier meeting with Mr Davis or the transaction occurring in a grape packing shed. Further criticism was made of the first affidavit and its failure to mention the method whereby Mr Davis allegedly signed the receipt and whether he was standing up. The chronology of the affidavits is referred to noting that the first affidavit of Mr Dimasi was sworn on 14 April 2006 and that Mr Davis had sworn an affidavit of 27 April 2006. In response to questioning regarding his failure to mention two meetings in his first affidavit Mr Dimasi responded, “There has always been two meetings” (Transcript p.12). He took issue with the affidavit evidence of

Mr Davis that the money had not been received and that his signature was not on the receipt together with a dispute about an alleged meeting on 8 June 2004. It was specifically put to Mr Dimasi that paragraph 8 of his third affidavit set out earlier in this judgment was a “total and utter fabrication”. Mr Dimasi denied the allegation. Under cross-examination he confirmed that he was not able to locate the witness Knott and Kelpalis who it is alleged countersigned the receipt in question. He agreed that “C Dimasi” is his cousin. He denied that the alleged signature of Mr Davis on the receipt was a forgery.

He confirmed that the first time the alleged receipt was produced was after he had been served with a Bankruptcy Notice and that he had faxed it to his solicitor “after late November 2005” (Transcript p.18). It was put to him that he had not told a representative of professional collection services that he had paid the debt and the following exchange occurred:-
“You haven't mentioned it once in any of your affidavits?---No, because it was denied at the time.
Sir, you haven't actually sworn to it anywhere in any of your affidavits that you told her the debt was paid?---I didn't think it was relevant.
Even though she swore an affidavit saying that you never told her that you didn't think it was relevant?---I didn't think it was relevant. I told her at the time that he had been paid, "How many times does he want to get paid?"
You say that now. But this is the first time you've ever said it?---No, I said it then to her.”
(Transcript p.18 lines 30-42)

Mr Dimasi was referred to a telephone conversation with a representative of Professional Collection Services who the Respondent identified as Ms Emma Williams. He was referred to an affidavit of Ms Williams sworn 1 May 2006 (Exhibit R5) where Ms Williams deposes,
“5.    On or about 7 September 2005 I had a telephone conversation with the first applicant. Although I cannot recall the precise words used the effect of the conversation was that:
(a)    I asked words to the effect, ‘I am collecting the debt owing to Nangiloc Colignan Farms by you and your wife’
(b)    Mr Frank Dimasi said words to the effect, ‘I will not pay anything, your client can take me to Court’.”
The following exchange then occurred when this paragraph was put to Mr Dimasi,
“Paragraph 5, she says she's following up her letter. "On or about 7 September, I had a telephone conversation with the first applicant." That's you, isn't it?
---Yes. I can't remember if it was Emma - whoever it was - but it was a lady wanting to collect money for NCF.
What she says is, "I'm collecting the debt owing to Nangiloc Colignan Farms by your and your wife," and she swears you said, "I will not pay anything. Your client can take me to Court"?---If you think that I would say something like that, well, then I'm sorry, but no, I didn't say that.
…
- - - to this person in a conversation on 7 September 2005. That's what's being put to you?---Yes, your Honour, this was a long time ago. It's very hard to remembering exactly what was said, but I would never have said something like that.”
(Transcript p.20 lines 30-41 and p.21 lines 1-5)
In her affidavit Ms Williams also refers to forwarding to Mr Dimasi a letter headed, ”Notice of Intention to Sue” on or about 13 September 2005. Mr Dimasi did not recall receiving the letter. He did not take issue with the name of the person who contacted him by telephone or dispute that it may have been Ms Williams. Mr Dimasi was then cross-examined concerning a further telephone conversation which

Ms Williams alleged occurred on 3 October 2005. The following appears from the transcript,
“Getting back to the affidavit of Ms Williams, she says that she had another phone call with you on 3 October 2005?---That is possible.
She wouldn't be ringing you back if you'd told her already that the debt had been paid, would she?---Well, you say that, but she rang - people rang two or three times for the same business and I kept telling them the same thing. I could understand why it was going where it was going.
She actually says words to the effect - she said to you, "My clients wish to commence further legal proceedings if you don't pay the debt that is owing to them." She says you said in response, "I'm not going to pay a cent to your client," and that's what happened, isn't it?---I didn't say that at all. What I would have said to her - and it's going back a while - was, "How many times does this bloke want to get paid?"
She actually says in the next paragraph, at no stage did you or your wife advise her that the debt owed to the respondent had been paid in full on 8 June or any other date?---She says that, but that's ‑ ‑ ‑
Yes, that's right?---I would have told her.
You would have?---Yes.
HIS HONOUR: What does your memory tell you? When you say in Court - so you understand - that "I would have said this" or "I would have said that," it may not assist me greatly to say what you would have said. Do you have a memory of what you did say?---Your Honour, these people had been paid. At that point, when you get a call ‑ ‑ ‑
I understand that. You've made that point a number of times. You're being asked about your recollection of conversations that occurred over the telephone on 7 September 2005 and 3 October 2005. It helps me, and I think it's more responsive to the question, if you can indicate whether you have a memory of what you said to the person on those occasions. Do you remember the conversation with a female person asking about this debt on or about 3 October 2005?---I reckon, yes.
What you're being asked is, what do you remember saying to that person about the debt, not what you would have said but what you remember saying?---Yes, "NCF has been paid. How many times do you want me to pay it.”
(Transcript p.22 line 35 to page 23 line 31)
To understand the reference to the telephone call on 3 October 2005 it is useful to set out paragraphs 8 and 9 of the affidavit of Ms Williams where she deposes,
“8. On or about 3 October 2005 1 had a telephone conversation with the First Applicant. Although I cannot recall the precise words that were used, the effect of this conversion was that:
a. I said words to the effect, ‘My clients wish to commence further legal proceedings if you do not pay the debt that is owing to them’.
b. Mr. Frank Dimasi, said words to the effect, ‘I am not going to pay a cent to your client’.
9. At no stage did the First Applicant and/or the Second Applicant advised me that the debt owed to the Respondent has been paid in full on 8 June 2004 or on any other date has the First Applicant and/or the Second Applicant produced to me a copy of the receipt which it is alleged was signed and written by Mr. Ken Davis of the Respondent confirming that the debt has been so paid. The first I became aware of this was on or about 1 December 2005.”
Mr Dimasi was referred to paragraph 15 of his third affidavit where he claimed that he rang a Mr Bruno Maras “and informed him that I had in fact paid the debt to his employee Mr Davis”. He was cross-examined about that assertion and the following exchange occurred,
“When did you ring Mr Moras then?---It would have been ‑ ‑ ‑
Would have been, or do you remember?---In months, yes - more or less. It would have been after March 2006. I actually rang Bruno at his home.
After March 2006?---I rang Bruno after my wife had been served with the affidavit for us. You've got to recall, when the first affidavit was served on me, I knew the debt had been paid. I was not very happy when that was served on me.
But you didn't ring Mr Moras then and say to him, "You've already been paid," did you?---No, but I rang that man behind you though.
You don't say that here?---No, you don't say everything in your affidavits.
…
MR STARK: If you're swearing an affidavit that sets out what you say the circumstances are relating to this matter, it should include all the details, shouldn't it?---It depends. If it's pertinent to the questions that are being asked - I mean, the solicitor faxes you a copy of the events that you've just discussed over the phone - I mean, it's possible you miss bits.
What is pertinent is that this receipt is challenged, isn't it?---Yes.
The payment of the cash is challenged, isn't it?---Yes.
So everything relating to your allegation that you had paid the debt is pertinent, isn't it?---Yes.
So if you're saying that you mentioned it to several people and yet you haven't sworn it in the affidavits, that's an error, isn't it?---Perhaps you could ask Ken behind you if he received a call after the ‑ ‑ ‑
It's nothing to do with Ken. This is your affidavit that's in issue here?---Well, I'm sorry but ‑ ‑ ‑
This is your third version of events that's the issue today?---I was asked for an affidavit so I've supplied it. It doesn't mean I don't miss bits. I mean, I in fact rang Ken and told him, "How many times do you want to be paid?"
(Transcript p.23 line 41 to p.24 line 13 and p.24 lines 21 – 43)
Mr Dimasi was cross-examined concerning the history of the dispute between his partnership and the Respondent which concerned a contract for the supply of fruit. The following exchange occurred,
“The Mildura Magistrates Court decided that it was your fault, didn't it?
---Yes, because I signed a contract saying that I would wear responsibility if it out‑turned poorly, I was found guilty.
You've been holding a grudge about that ever since, haven't you?---Well, Mr Stark, if someone purchases something from you and then doesn't transport it at the right temperature - you know, it's not fair and it's not right that after having given the fruit in good faith, that something beyond your control has destroyed the product.
So you've been holding a grudge about that ever since, haven't you?---I've been holding a grudge, but I've had to get on with life and I've had to pay him, but I'm not going to pay him again.”
(Transcript p.26 lines 30 -45)
Questions were then put to Mr Dimasi about an application for an instalment order and the following exchange occurred,
“You applied for an instalment order to pay the debt, didn't you?---Yes.
That was rejected by the Magistrates Court, wasn't it?---No, it was rejected by the client behind you, not by the Magistrates Court.
Okay, you wrote to them and said, "I'll pay by instalment"?---Yes, we agreed to pay.
And they rejected it?---They rejected it.
So you applied to the Magistrates Court for an order that you pay by instalment, didn't you?---Yes.”
(Transcript p. 27 lines 1 – 16)
The instalments application is alleged to have occurred in or about March 2004.
Questions were then raised with Mr Dimasi about the alleged $9,000.00 borrowed from his cousin Mr Cosimo Dimasi. It was put to Mr Frank Dimasi that the $9,000.00 did not relate to the amount of $3,500.00 allegedly paid to Mr Davis.
In cross-examination Mr Dimasi denied forging Mr Davis’ signature. Evidence was put from a Document Examiner suggesting that the signature on the document was an attempt to copy the signature.

Mr Dimasi denied forging Mr Davis’ signature. When confronted with that evidence, when asked whether he understood the evidence he stated,

“I can see how the expert can draw those conclusions, yes.”
Under cross-examination Mr Dimasi was asked questions arising out of an affidavit of service and attempted affidavit of service of the bankruptcy notices. Both affidavits were sworn by Robert John Kerr on 30 November 2005. The affidavit of attempted service relates to Mrs Dimasi. In the affidavits of service Mr Kerr deposes as follows,
“2. I identified this person I served by reason of the fact that I said to him at the time I delivered the said Bankruptcy Notice to him, ‘Are you Frank DIMASI’, the person’ He replied ‘Yes.’
3. I said, ‘I have some legal documents here for you and your wife, is she available?’. Mr. DIMASI then forcibly removed the Bankruptcy Notices that I held for for both him and his wife, Michelina from my hand and then threw them to the ground. Mr. DIMASI, ‘You tell those pricks they can shove these up their arse.’
As Mr. DIMASI was in an aggressive state …”
When questioned about this affidavit Mr Dimasi recalled throwing papers on the ground and saying the words “bankruptcy”. He could not recall the precise words used. Ultimately the following exchange occurred,
“It's a simple question. You didn't say anything to the process server about, "I've paid this debt". Did you?---I threw these papers on the ground and I said, "How many times do these people want to get paid?" That's what I recall saying.
Well, that's what you recalled saying several other times to several other people as well but this is the first time you've actually sworn about saying that. Isn't it?---I was upset when this man came. I don't know if you've ever been served with bankruptcy papers but it's not a good state of mind that you're in. I was angry when I saw the word "bankruptcy". I said, "What do these people want; blood?"
The deponent doesn't say that you said anything like that, does he?---He doesn't say that.
No, he says in fact you simply swore at him?---But I'm telling you he never called me - he never called me "Frank Dimasi". He said, "Are you Frank". That's all he said to me. That bit I recall clearly.”
(Transcript p.38 lines 6 – 25)
During the course of re-examination Mr Dimasi elaborated on the reason why Mr Kelpalis was not available and stated the following,
“MR BEST: What is the reason Mr Kelpalis isn't in Court today?---Mr Kelpalis doesn't work for me. He's a private contractor and his job basically entails pruning, planting vines all over the place. He works from places as varied as Menindee which is probably a couple of hours north of Mildura to ‑ ‑ ‑
Mr Dimasi, do you know where he is at present?---Some where in the St George region planting vines I'm told by his de facto wife.
Where is the St George region?---In Queensland and that's why he's not here.
So as far as you know he's in Queensland?---As far as I know, yes, and I've tried to ring him a number of times. He rings his wife occasionally ‑ ‑ ‑ “
(Transcript p.42 lines 27 – 39)
Mr Dimasi also sought to explain the absence of Mr Knott and suggested that he had “moved on”.
It may be observed at this point that no specific evidence was given of attempts to locate either witness nor to produce any evidence from any person known to or associated with the witnesses which might reveal the current whereabouts of each witness. There was no evidence to suggest to any electoral roll searches, telephone book searches or other enquiries had been made to determine the whereabouts of each witness.

Cosimo Dimasi

Mr Dimasi adopted an affidavit sworn by him on 23 June 2006. In that affidavit he confirmed that he is the cousin of Frank Dimasi and that he had read affidavits sworn by Mr Dimasi. He referred to a request by Mr Dimasi on or about 3 June 2004 to borrow $3,500.00 in cash to pay the Respondent. In his affidavit he deposed as follows:-
“4. I dispute the matters deposed to in:
a)paragraphs 5, 6, 7, 10, 11 and 12 of the First KD Affidavit; and
b)paragraphs 5, 6(g), 8 and 9 of the Second KD Affidavit.
5.I early June 2004 at around 4 pm Mr Davis came to visit me at my home address to discuss payment of the debt owing to the Respondent in relation to the Proceeding referred to in paragraph 5 of my First Affidavit. Mr Davis was accompanied by a Mr Kotz who is known to me as an employee of Nangiloc Colignan Farms Pty Ltd. Mr Davis, Mr Kotz and I met outside my grape packing shed. Mr Davis and I then went inside the shed without Mr Kotz. At that I told Mr Davis that I didn’t have any money to pay the debt that day but that if he came back at the same time in a week I would be able to pay him $3,500 in cash in satisfaction of the debt. I told Mr Davis that I would only make the cash payment on the basis that I didn’t have to pay any interest on the debt. He agreed to this arrangement. Mr Davis told me that he would come back in a week and that he would accept $3,500 in cash from me in final settlement of the debt. During this conversation, I also returned Mr Davis’ proposed settlement cheque issued in 2003. This conversation between me and Mr Davis took place inside my grape packing shed whilst Mr Kotz was outside. When Mr Davis and I came back out from the shed I saw that Mr Kotz was sitting in Mr Davis’ car.
6.On or about 3 June 2004 I spoke to my cousin Cosi Demasi and asked him if he would lend me $3,500 to pay the Respondent. He agreed to lend me the money and told me that he would come to my house on 8 June 2004 to give me the cash.
7.On the afternoon of 8 June 2004 at about 3:30pm Cosi came to my home address and gave me $3,500 in cash as a loan. At that time I asked Cosi to stay so that he could witness the payment to Mr Davis.
8.On that same day at or about 4 pm Mr Davis came to my home address. He was not accompanied by Mr Kotz or anyone else. We met outside the grape packing shed and then went inside for our meeting. My cousin Cosi was also present. At that time I told Mr Davis that I would pay him the $3,500 as discussed previously with him on 1 June 2004. As deposed in paragraph 5 of my Second Affidavit Mr Davis told me that he did not have his receipt book with him. He told me that the reason for this was that he had forgotten to bring it. I was surprised by this as I had told Mr Davis on 1 June 2004 that he would be paid when he next visited me. Mr Davis told me that he would drop in a receipt at a later stage. As Mr Davis did not have a receipt book I went inside my house and handwrote a receipt which I asked my wife to type up on our computer. When my wife came to the shed with the typed receipt Mr Davis appeared to me to be agitated and annoyed and said that he would drop off a receipt later that day. I told him that he would not get the cash unless he signed the receipt. He asked me if he could take the receipt with him and I said that was fine. He then appeared to me to calm down and agreed to sign the receipt. I saw that Mr Davis was standing up as he signed the receipt and that he signed the receipt awkwardly. After signing the receipt I told Mr Davis that I would get the cash. I then went back to my house and I took the signed receipt with me. When I was inside I made a photocopy of the receipt for my own records. I then returned to the shed with the original receipt. The Agreement referred to in paragraph 9 of my First Affidavit is the receipt referred to in this paragraph. The annexure “FD3” to my First Affidavit is a true copy of this receipt. I handed the receipt and $3,500 in cash to Mr Davis as deposed in paragraph 9 of my First Affidavit and paragraphs 3 and 4 of my Second Affidavit.”
In his affidavit Mr Cosimo Dimasi disputed matters raised in the affidavit sworn by Mr Davis.
Annexed to Mr Cosimo Dimasi’s affidavit was a photocopy of a bank statement from Bendigo Bank in the account of C & F Vineyards Pty Ltd for the period 1 July 2005 to 29 July 2005. A handwritten notation appears on an entry of 29 July 2005 which reads, “From F Dimasi”. That notation appears under the sum of $9,000.00 and next to a typewritten entry “IN BRANCH TRANSFER”. A further handwritten entry appears to be, “Cos’s”. Under cross-examination Mr Cosimo Dimasi indicated that he had $3,500.00 in cash and did not take the money out of the bank. He was then asked to account for the amount of $9,000.00 allegedly repaid in July 2005. The following exchange occurred,
“You also swear that he repaid you $9000 in July 2005?---That's right.
That's in respect of the 3 and a half thousand dollar loan, is it?---Yes, and a set of discs that was purchased.
You also swear that he repaid you $9,000.00 in July 2005 “
(Transcript p.46 lines 21 – 25)
The witness explained that the discs were ploughing discs and the money was repaid by a bank transfer. He claims that he deals in cash “but my money goes through the bank”. The following exchange then occurred in relation to the alleged loan,
“In fact you didn't actually lend him the money at all, did you?---No, I did lend him the money.
There's no record to prove that you lent him the money, is there?---Yes, there is. There's my cousin's word and my word that I lent him the money.
There's no written record to prove it, is there?---There's nothing written, you could say, on paper, but I'm sure my cousin's word - if he wanted to borrow $3000 I'd lend him 3 and a half thousand dollars.
In fact, you'd do anything for him, really, wouldn't you?---Not necessarily, no.
You'd lie for him, wouldn't you?---No, not necessarily.
Because you've lied in this affidavit for him, haven't you?---I don't think I have, no.
You specifically lied in relation to - have you got the affidavit in front of you?
---No, I haven't.”
(Transcript p.47 lines 26 – 44)
A further exchange occurred in relation to the witnesses affidavit,
“Now, the rest of that paragraph, that's basically what Frank's told you to say, isn't it?---No, Frank doesn't tell me to say anything. It's what I saw and what I've - what was there.
But it's virtually word for word what Frank says happened?---No, not necessarily but how can it be word for word?
Because he's just copied it and said, "You swear this as well to back me up," hasn't he?---No, I didn't - no, look, if I knew something was not right I wouldn't have sworn nothing.
What I'm putting to you is this is exactly what Frank says has happened. So, you know, this is two years ago now. You swear two years later you can remember word for word what happened, can you?---No, I didn't say I can remember word for word or any - all the procedures. It's just situation.
So what in fact - this has been - your memory has been prompted, has it, by Frank telling you what to write?---No, my memory hasn't been prompted.
Now, have you - you swear in here at the foot of that page, "I witnessed the signing of the receipt by Frank. I then signed the receipt together with George Kelpalis and a Mr Knott who was also present." You see that?---Yes.
You didn't actually sign the receipt at all yourself, did you?---Yes, I did sign the receipt myself.”
(Transcript p.48 lines 15 – 40)

Specific reference was made to the alleged receipt witnessed by

Mr Cosimo Dimasi where his signature allegedly appears and the signature on his affidavit. The following exchange occurred,
“It's got your name printed on it, hasn't it?---Yes.
Next to it there's some handwriting, next to where your name is printed?---It's my signature.
That's a completely different signature to the signature on your affidavit, isn't it?---Well, my signatures changes daily, basically, because I sign that many signatures left, right and centre. But that's my signature. I sign that many signatures: banks, transactions, people with contracts and fruit invoices in and out, everything.
Your signature varies between your banks and things like that, does it?---Yes, it does. Sometimes it does, yes.
I'm putting to you that in fact you didn't witness this document at all, did you?---No, I did witness this document.
Not only did you not witness it but in fact you weren't there on 8 June, were you?---I was there on 8 June.
You didn't witness any money being paid on 8 June?---Well, I did witness money paid because it was my money.”
(Transcript p.49 lines 5 – 26)
At the conclusion of the evidence for the Applicants no application was made for any use to be made of the affidavit of Mr Kelpalis though it was noted that a request was made for him to be available to attend for cross-examination though no subpoena was issued by either party.

Respondent’s Evidence

Kenneth Richard Davis

Mr Davis adopted affidavits sworn by him on 27 April 2006 (Exhibit R1), 29 May 2006 (Exhibit R2) and 6 July 2006 (Exhibit R3).

Mr Davis deposes that he is the Export Manager in the employ of the Respondent and in the affidavit material recited the chronology of events leading up to the orders made in the Mildura Magistrates Court referred to earlier in this decision. In relation to the claimed receipt. He deposed that he first received a copy of the receipt on or about

30 November 2005. In relation to the receipt he further deposes in his first affidavit as follows,
“a) I was not aware of this existence of the Receipt nor have I seen it prior to it being brought to my attention by Ms Bailey on or about 30 November 2005.
b)I did not receive any monies at all from Mr. Dimasi and/or Mrs. Dimasi in relation to the Order made by the Mildura Magistrates’ Court.
c)I did not sign the Receipt.
d)The manner in which the Receipt is drafted implies that it was written by me. Whenever I draft documents for the Respondent, I do so on the Respondent’s official letterhead. The Receipt does not appear on the Respondent’s letterhead. Due to the nature of the Respondent’s business, that is buying and selling fruit, the Respondent does not in the ordinary course of business issue receipts. Rather the Respondent issues invoices to various entities and individuals with whom the Respondent has dealings with.
e)I do not know any of the witnesses referred to in the Receipt being a “G. Kelpalis”, a “M. Knott” and a “C. Dimasi”.
f)The signature which purports to be my signature on the Receipt is not my signature. Now produced and shown to me and marked with the letters “KRD-2” is a true copy of my signature as it appears as it appears on my Passport, my Drivers’ License and a Purchase of Fruit Agreement between the Respondent and the Applicants.”
In his first affidavit he further provided examples of his signature as it appears in his passport, drivers licence and a purchase of fruit receipt between the Respondent and the Applicants. In his second affidavit he responds to matters raised in the affidavit of Frank Dimasi sworn

12 May 2006 as follows,
“5. I have read the Affidavit of Frank Dimasi sworn 12 May 2006 and filed herein, and say the following:
a.I did not meet with Frank Dimasi on 8 June 2004 at his home address.
b.I have never received the document referred to in paragraph 9 of Frank Dimasi’s affidavit sworn 14 April 2006 (‘the Receipt’). I was not aware of the existence of the Receipt until I was advised of its existence by Ms. Kate Bailey of Professional Collection Services on or about 30 November 2005.
c.I never received any money from the First Applicant and/or the Second Applicant in satisfaction of the Order made by the Mildura Magistrates’ Court on 9 July 2003 (‘the Order’).
d.As a result of the matters specified in the preceding paragraphs, I do not have nor have I ever had in my possession the original Receipt.
6.I only attended once at the home of Frank Dimasi on 1 June 2004, with Jason Kotz, on the pre-text of a promised payment from Frank Dimasi. The circumstances surrounding the meeting on this day were as follows:
a.Jason Kotz and I together attended Frank Dimasi’s property and met with him outside his grape packing shed.
b.We never entered Frank Dimasi’s home which is a short walk from the grape packing shed.
c.Neither Jason Kotz nor I brought a laptop computer and/or portable printer with us to this meeting.
d.There was nobody else present at this meeting save for Frank Dimasi, Jason Kotz and I.
e.I did not sign any document at this meeting.
f.Neither Jason Kotz nor I collected any money from Frank Dimasi at this meeting.
g.Frank Dimasi refused to pay and we left his property.”
In his third affidavit he joins issue with the suggestion of Mr Frank Dimasi that he visited Mr Dimasi’s property on 8 June 2004 and suggested that the conversation he had did not take place in the grape packing shed but outside in the presence of Mr Kotz. He otherwise disagreed that any arrangement was made to accept $3,500.00 in cash.
Under cross-examination he denied that the amount due to the Respondent had been paid by Mr Frank Dimasi. He confirmed what had been deposed in his first affidavit that he had a telephone conversation with another person on 30 November 2005 from Professional Collection Services where he was told that Mr Frank Dimasi claimed that he had paid all the money that was outstanding in cash on 8 June 2004 and has produced a signed receipt to that affect.
During the course of cross-examination he denied signing the receipt.
During re-examination Mr Davis described the procedures followed after the orders were made in the Mildura Magistrates Court for the collection of the outstanding debt. He elaborated on a meeting on

1 June 2004 to discuss payment of the debt with Mr Dimasi and that at that meeting attended by Mr Davis with Mr Kotz, Mr Dimasi although having indicated by telephone that he would make payment then refused to pay the debt.

Respondent’s Affidavit Evidence

The Respondent tendered and relied upon an affidavit of Omar Peter El-Hissi sworn 28 April 2006 (Exhibit R4). In that affidavit the deponent who is the solicitor for the Respondent refers to the Mildura Magistrates Court proceedings and the issuing of the bankruptcy notice and service. He further refers to receiving correspondence from the solicitors for the Applicants enclosing the alleged receipt.

He otherwise confirms the calculation of interest in the bankruptcy notice and as indicated earlier in this judgment exhibits the business name search which is particularly relevant for the second Applicant.
The Respondent further relies upon an affidavit of Emma Williams sworn 1 May 2006 (Exhibit R5) referred to earlier in this judgment.
An affidavit of Jason Kotz sworn 1 June 2006 was also relied upon. Mr Kotz relevantly deposes in his affidavit the following,
“4. On 1 June 2004 I attended the premises of Frank Dimasi with Kenneth Richard Davis (‘Mr Davis’) with a view to collecting the monies owed by Frank Dimasi to the Respondent. The nature of events on this day were as follows:
a.Mr. Davis and I met with Frank Dimasi outside his grape packing shed.
b.Frank Dimasi was alone throughout the entire meeting.
c.I did not bring a laptop computer or a portable printer with me to the meeting to the best of my knowledge neither did Mr. Davis.
d.Neither Mr. Davis nor I entered Frank Dimasi’s house on this day.
e.Mr. Dimasi refused to pay any money as promised and we left the property.
f.I did not collect any money from Frank Dimasi at this meeting.
g.I did not see Mr. Davis collecting any money or any other form of payment from Mr. Dimasi at this meeting.
h.I did not see Mr. Davis sign any document at this meeting.
i.I stayed with Mr. Davis throughout the entire meeting. We left Frank Dimasi’s property together.”
The Respondent otherwise relied upon the affidavits of service or attempted service referred to earlier in this judgment. In particular the affidavits of service of Robert John Kerr sworn 30 November 2005 (Exhibit R7), an affidavit of attempted service by Robert John Kerr sworn 30 November 2005 (Exhibit R8) and a copy of an affidavit of service of Liam Robert Cameron sworn 24 April 2006 (Exhibit R9).
It is noteworthy that none of the deponents were required for the purpose of cross-examination and the Respondent relied upon the affidavit evidence.

Trevor Clinton Joyce – Document Examiner

Mr Joyce adopted an affidavit sworn by him on 11 July 2006 (Exhibit R11). Prior to giving evidence it should be noted that Mr Davis was recalled for the purpose of verifying the documents which he had provided via his solicitors to the document examiner. He identified his original signature on the relevant documents.
In an earlier ruling the Court had determined that Mr Joyce should be permitted to give expert evidence as a document examiner (Dimasi & Anor v Nangiloc Colignan Farms Pty Ltd (No 2) [2006] FMCA 1007).
The conclusions of the Document Examiner set out in the second paragraph 3 of his affidavit as follows:-
“3. My observations, opinions and conclusions from my report on this matter are summarised
a. A microscopic examination of the receipt document item 1 revealed that this document is a photocopy and that this has hindered the examination however a number of observations were made.
b. Examination of the receipt document item I revealed the entry “FILLED” in the upper left corner of this document.
This entry has also been produced using a photocopy process and along with a number of trash marks indicates that this photocopy is at least a second generation photocopy.
c. The “K. Davis” signature imaged on the receipt item 1 was examined and compared to the “Ken Davis” signature controls and a number of observations were made.
(i) This examination revealed some pictorial similarities in the “K. Davis” signature written on the receipt document item 1 when compared to the “Ken Davis” signature controls however a number of structural differences and a large amount of line tremor was observed.
(ii) The nature of this tremor in the “K. Davis” signature written on the receipt document item 1 in conjunction with an absence of trace simulation or ‘cut and paste’ artefacts indicates that it is highly likely that this signature is a freehand simulated signature
Due to the nature of the receipt document item 1 (photocopy) I am not in a position to give a more definitive opinion until the original of this document is submitted for examination.
(iii)Due to the apparent structural differences in the “K. Davis” signature written on the receipt document item 1 when compared to the “Ken Davis” signature controls it is likely that the writer of the “Ken Davis” signature controls is not the writer of the questioned “K. Davis” signature written on the receipt document item 1.
Again, due to the nature of the receipt document item 1 (photocopy) I am not in a position to give a more definitive opinion until the original of this document is submitted for examination.
d. A microscopic examination of the “F. Dimasi”, “G. Kelpalis”, “M. Knott” and “C Dimasi” signatures imaged onto the receipt document item I revealed that these signatures appear to be more fluent signatures written with speed and do not show evidence of line tremor to the extent observed in the disputed “K. Davis” signature imaged on this same document.
e. Microscopic examination of the imaged typewritten entries on the receipt document item 1 reveals some faint horizontal lines running through the typewritten entries and this indicates that this document may have been originally printed using an ink-jet printer with a damaged or poor quality print head however I cannot establish when these marks were made or if these marks were made on the original or on a generation copy.
Some other miscellaneous damage to the typewritten entries imaged onto the receipt document item I indicates that portions of this document may have been folded or creased at some point after production of the current photocopy.
f. Using electrostatic techniques (ESDA) the receipt document item 1 was examined for latent indentations and some indentations were revealed.
The indentations were partially deciphered as “A” and “25/5/06”. The letter “A” is from a yellow post-it note adhered to this document.”
The report which the witness refers to relevantly contains in order to understand his evidence at p.5 two images set out below:-

In his report he also makes further observations which I do not propose including in detail in this judgment.
It is sufficient to note that the conclusion, both in his affidavit and report is that the receipt does not contain the signature of Mr Davis.
Under cross-examination, whilst conceding that the differences in signature on the receipt and other documents supplied by Mr Davis may be the result of an awkward or different manner in which the document was signed or arising out of some degree of anxiety or nervousness, he further stated that when determining whether a signature was signed awkwardly that that could not be easily or reliably determined from a signature. He agreed that he could not give a more definite opinion without being provided with the original document, that is the original of the receipt. The following relevant exchange occurred,
“You can only say whether it's likely or not whether the signature was a different one compared to the control signatures?---It is a different signature. It lacks speed and construction features expected or evident in the signature controls, and it's unlikely I feel that the writer of the signature controls is the writer of the disputed signature.
But having said that, you can't exclude from your evidence the possibility that the writer of the signature did deliberately mis-sign that signature, can you?---No, I can't exclude that.
That's also taking into account your admission that any tension or anxiety could be translated through to the signing of the signature. That's the case, isn't it?---That is possible.
That could cause tremor, couldn't it?---It would cause tremor. It wouldn't account for structural differences.
Did you ask for the original document?---I believe that may have been the course in one of the telephone conversations that - wherever possible, originals of documents are provided. Otherwise it does somewhat limit our opinions or observations that we can make.”
(Transcript p.102 lines 24 – 40)
The issue of construction of the signature was pursued further in re-examination and the following exchange is relevant,
“MR STARK: You're asked whether it was your view that the signature in question may have been executed slowly and deliberately. I think you said yes, but could you just explain to His Honour whether that would cause any differences in structure that you've noticed in your examination of the signature?---Not ordinarily because when writing a signature it is a result of a memory and a habitual process that is learnt over time and establishes to a point where it is a forward signature as such. When writing a signature slow you would still expect the construction to be correct.”
(Transcript p.105 lines 5 – 13)
During the course of further evidence and questions from the Court the witness elaborated in some detail concerning the structural differences in the signatures and provided detail which the Court does not need to recite in this judgment. After dealing with those details the following evidence was given,
“Does a change of posture, that is, if someone is sitting or standing, can that result in a different outcome in terms of the quality of the signature?---Well, yes, it would. You may find, depending on how high - you're signing it when you're standing up or - you may find enlargements of loops or exaggerations but certainly with regards to construction you would expect all the features to be consistent.
The difference as you observe between the signatures here, are they differences which might be accounted for by a change in posture of that kind from sitting to standing?---I wouldn't expect so.”
(Transcript p.109 lines 25 – 35)
Although further cross-examined and re-examined after giving the evidence set out above the witness did not in my view do anything other than concede as a mere possibility the change in signature arising from a different posture or due to anxiety or change of mood.

Reasoning

I have carefully considered the competing evidence in this application. I reject the evidence of Mr Dimasi and his witness Mr. Cosimo Dimasi in relation to the receipt and payment of the sum of $3,500.00. I find that the sum of $3,500.00 in cash was not paid as alleged by Mr Dimasi and that the receipt produced as evidence of payment is not authentic.
These are significant findings in relation to a crucial issue as to whether the debt has been paid.
I prefer the evidence of Mr Davis combined with the evidence of the Document Examiner and other affidavit evidence of the Respondent in relation to the crucial issue as to whether or not payment of the debt was made in the manner described by Mr Dimasi.
I am satisfied in this application that Mr Davis did not sign the receipt. I am further satisfied that the signature which appears on the receipt was written by a person other than Mr Davis. It is not necessary for the Court to find that the signature was forged by any other party.

That may be a matter for other proceedings.
I accept the evidence of the Document Examiner that the difference in the signature on the receipt compared with other samples of Mr Davis’ signature contain structural differences and cannot be explained by the alleged posture and/or state of anxiety or other factors attributed to

Mr Davis by Mr Dimasi.
I further find it highly improbable that Mr Davis would accept cash of $3,500.00 and then maintain a denial of payment to the point where Federal Court proceedings in a Court of Bankruptcy are pursued. No allegation has been specifically made against Mr Davis that he has stolen the money or otherwise not passed it on to the Respondent.
It is clear in this matter that there are serious allegations made.

The first includes by inference an allegation of theft against Mr Davis who has accepted a cash payment on behalf of his principal and then not passed the money on to the principal. The second allegation is one of fraud against Mr Davis for fraudulently obtaining money from

Mr Dimasi and not acknowledging receipt of the money.

Those allegations combined with the consideration of the receipt and a finding that the signature of Mr Davis is forged all raise significant matters which justify the application of the Briginshaw test in making my findings as I regard that as the appropriate standard of proof.
I am also strengthened in my conclusion and accept the submissions of the Respondent that appropriate inferences should be drawn arising out of the principles of Jones v Dunkel (1959) 101 CLR 298 relating to the failure of the Applicants to call at least two witnesses claimed to be witnesses to the receipt. There is little or no evidence to explain any or any adequate attempts that have been made to locate the relevant witnesses and obtain statements and/or issue subpoenas. There is no sufficient explanation in my view for the absence of those witnesses and I conclude that the evidence would not have assisted the Applicants by supporting the authenticity of the receipt relied upon.

Another witness who the Court might reasonably be expected to have been called is Mr Dimasi’s wife who it is alleged prepared the receipt and who was present when it was signed and the money allegedly handed over. The failure to adduce that witness’s evidence further confirms my view that the receipt is not authentic and that the money was not paid as alleged.
Lest there be any doubt however I do not regard it as necessary to apply the principles of Jones v Dunkel in this matter having regard to my acceptance of the evidence of Mr Davis and the affidavit evidence of the Respondent combined with the evidence of the Document Examiner in relation to this issue.
I further reject the evidence of Mr Dimasi and his cousin in relation to the advance of loan monies to enable the payment of $3,500.00 in cash. There is no precise record of that amount advanced to Mr Frank Dimasi by his cousin of a kind which would constitute independent corroborative evidence. The banking records are vague and in my view unreliable.
I am further strengthened in my conclusion to reject Mr Dimasi’s evidence by virtue of the fact that at no relevant stage did he raise the payment of the debt. In particular I accept the evidence of the process server that the issue of payment of the debt was not raised at the time of service of the bankruptcy notice. I conclude that the payment of the debt only arose after service of the bankruptcy notice and in those circumstances I am satisfied having regard to my other findings that the suggestion of payment of the debt by Mr Dimasi is false.
I do not accept Mr Dimasi to be a witness of truth. I am satisfied that he has held for reasons better known to himself a significant grudge against the Respondent for a number of years. He has expressed a determination not to pay the balance due to the Respondent arising out of what can only be described as a modest debt. The depth of his feelings are no doubt a matter for him but I am able to conclude on the evidence that he has held having regard to his own evidence recited earlier in this judgment a grudge against the Respondent. That grudge in my view is sufficient to cause him to contrive the evidence and to seek to rely upon the receipt which I have found not to be authentic.
In accepting the evidence of the Document Examiner whilst noting his relative inexperience, I nevertheless have already found that he is an expert who opinion evidence the Court is able to accept. In this application the expert evidence is uncontradicted as the Applicants’ did not call any other expert evidence. My acceptance therefore of the Document Examiner’s evidence called by the Respondent is strengthened having regard to the absence of any contradictory expert testimony.
I am satisfied on the affidavit evidence that bankruptcy notice was properly served on Mr Dimasi the first Applicant and I have already found that there is otherwise no other defect in the bankruptcy notice which would render it invalid. I do not accept there is any defect in the bankruptcy notice of a kind dealt with in the recent High Court decision of Adams v Lambert (2006) 225 ALR 396.
In the present case unlike the decision of this Court in Sgro v Liberty Financial Funding Pty Ltd 207 ALR 625 the reference to a deduction for the amount due by the Respondent to the Applicants arising out of the Magistrates Court order in Mildura, whilst referring to an order made the same day nevertheless relate to taking into account a debt clearly known to the Respondent prior to the issue of the bankruptcy notice. It has been properly referred to and could not lead to any misunderstanding on the part of the recipient of the bankruptcy notice.

Conclusion

It follows for the reasons stated that the appropriate orders subject to submissions of Counsel are:-
(1)The Bankruptcy Notice No. VN2484/05 against the Second Applicant is declared void and be set aside.
(2) The Application filed 18 April 2006 be otherwise dismissed.
I shall deal with the issue of costs and the precise form of the orders upon hearing further submissions from Counsel including submissions in relation to the Creditors Petition and appropriate consequential orders.

I certify that the preceding eighty-six (86) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 20 October 2006