Valamios v Demarco

[2005] NSWCA 98

Reported Decision: 63 NSWLR 191

Court of Appeal

CITATION:	Valamios v Demarco [2005] NSWCA 98
HEARING DATE(S):	1 March 2005
JUDGMENT DATE:	6 April 2005
JUDGMENT OF:	Beazley JA at 1; Tobias JA at 2; Brownie AJA at 53
DECISION:	(1) Appeal allowed; (2) Orders made by Delaney DCJ on 10 June 2004 be set aside and in lieu thereof there be judgment for the appellant; (3) Order that the respondent pay the appellant's costs of the proceedings at first instance and the costs of the appeal but to have with respect to the latter a certificate under the Suitor's Fund Act 1951, if otherwise qualified.

CATCHWORDS:	CHEQUES - Liability of signatory - Dishonoured cheques - Name of drawer printed on cheques - Drawer a firm - Cheques signed by appellant - Whether appellant personally liable on the cheques pursuant to s 75 of Cheques Act 1986 (Cth) - Whether apparent on the face of the cheques that appellant did not sign intending to become liable - Whether appellant signed as representative of drawer
LEGISLATION CITED:	Cheques Act 1986 (Cth) Bills of Exchange Act 1909 (Cth) Bills of Exchange Act 1882 (UK) Companies Act 1985 (UK)
CASES CITED:	Bondina Limited v Rollaway Shower Blinds Limited [1986] 1 WLR 517 Commonwealth Bank of Australia v Muirhead [1997] 1 Qd R 567 Chapman v Smethurst [1909] 1 KB 927 H P Etlin Co Limited v Asselstyne (1962) 34 DLR (2d) 191 Dickinson v SA General Electric Co (Pty) Limited [1973] 2 SA 620 H Rowe & Co Pty Limited v Pitts [1973] 2 NSWLR 159
PARTIES:	George Valamios Patrick Demarco
FILE NUMBER(S):	CA 40523/04
COUNSEL:	A: N Cotman SC / M Condon R: R Bellamy / M Seymour
SOLICITORS:	A: Brown & Partners, Woolwich R: Diamond Peisah & Co, Sydney

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 589/02
LOWER COURT JUDICIAL OFFICER:	Delaney DCJ

CA 40523/04
DC 589/02

BEAZLEY JA
TOBIAS JA
BROWNIE A-JA

Wednesday 6 April 2005

GEORGE VALAMIOS v PATRICK DEMARCO

Judgment

1 BEAZLEY JA: I agree with Tobias JA.

2 TOBIAS JA: At all material times Efstratios Valamios and Constantina Valamios (the defendants) traded under the business name of V&P Produce as providores at Flemington Markets. In or about November 2001 Patrick Demarco (the respondent) agreed to sell and the defendants agreed to purchase on behalf of V&P Produce various quantities and types of onions which were duly supplied between 2 December 2001 and 12 February 2002.

3 As V&P Produce failed to pay for the onions, the respondent instituted proceedings against the defendants in the District Court of New South Wales in June 2002 claiming the sum of $210,546 for unpaid invoices with respect to goods sold and delivered.

4 Between February 2002 and May 2002, 16 cheques drawn on the account of V&P Produce and signed by George Valamios (the appellant) were dishonoured. In October 2002 the respondent amended his statement of claim to plead the defendants' liability on those cheques. Although the defendants filed notice of grounds of defence, when the matter came before the primary judge on 15 August 2003 they did not appear whereupon his Honour entered judgment for the respondent against the defendants in the sum of $210,546.

5 On that date the respondent applied, and leave was granted, to amend further his statement of claim to add the appellant as a defendant. Because each of the dishonoured cheques had been signed by the appellant, the respondent pleaded that he was liable on the cheques either as the drawer or, if he was not the drawer, because he was otherwise liable thereon.

6 The proceedings between the appellant and the respondent were heard by the primary judge who on 2 June 2004 found in favour of the respondent and on 10 June 2004 entered judgment against the appellant in the sum of $209,691.04. It is against that order that the appellant appeals to this Court.

The cheques

7 The 16 cheques the subject of the proceedings were drawn on the Flemington Markets branch of Westpac Banking Corporation (the Bank). Rather than describing those cheques in detail, I reproduce below an example of them:

8 It is apparent from the form of the cheque that, firstly, the account upon which the cheques were drawn was that of E&C Valamiou t/as V&P Produce as printed by the Bank in the bottom left hand corner of the cheque; secondly, the cheques were indorsed by the Bank with the computerised cheque, branch and account numbers; and thirdly, the signature (being that of the appellant) had been placed at the bottom right hand corner of the cheque on the printed line provided for the signature of the person or persons authorised to sign on the account.

The grounds of the respondent's claim

9 The respondent pleaded his cause of action against the appellant on two bases. The first alleged that the appellant by signing the cheques became the drawer thereof. Accordingly, the appellant was liable to the respondent as drawer for the value of the cheques: Cheques Act 1986 (the Act), ss 71 and 76.

10 The second and alternative cause of action alleged that the appellant by signing the cheques other than as drawer was conclusively presumed to have signed them with the intention of becoming liable upon them. All cheques were dishonoured when presented for payment whereby the appellant became liable to the respondent as indorser for the value of the cheques: ss 73, 75(2)(a) and 76.

11 In his notice of grounds of defence, the appellant admitted that he had signed the cheques but alleged that he had done so in his capacity as an employee of the defendants. He denied that he signed them in his personal capacity or that he intended to become personally liable upon them.

The relevant statutory provisions

12 It is a pre-condition to liability on a cheque that the person sought to be made liable has signed the cheque. Thus, s 31 of the Act relevantly provides as follows:

"(1) Subject to this section and section 75, a person is not liable as the drawer or an indorser of a cheque unless the person signs the cheque as the drawer or an indorser, as the case may be.
(2) Where a person signs a cheque in the person's business name or trade name or in a name other than the person's own name, the person is liable on the cheque as if the person had signed it in the person's own name."

13 Having signed the cheque as the drawer or an indorser, s 70 provides that

"[a] person who is the drawer or an indorser of a cheque that has been dishonoured is liable on the cheque whether or not the person is given notice by any person of the dishonour."

14 The liability of the drawer of the cheque is found in s 71 which relevantly provides that

"… the drawer of a cheque, by drawing the cheque, undertakes:
(a) that, on due presentment for payment, the cheque will be paid according to its tenor as drawn; and

(b) that:

(i) if the cheque is dishonoured when duly presented for payment; or
(ii) …
the drawer will compensate the holder or an indorser who is compelled to pay the cheque."

15 The liability of an indorser is provided for by s 73, which is essentially in the same terms as s 71.

16 Of particular importance to the manner in which the issues in the appeal were ultimately refined is s 75 which relevantly is in the following terms:

"(1) Where a person signs a cheque, otherwise than as the drawer or an indorser, intending to become liable on the cheque, the provisions of this Act … apply, mutatis mutandis , to the person as if the person were an indorser and the person's signature were an indorsement.
(2) A person who signs a cheque shall, for the purposes of subsection (1):
(a) as regards a holder in due course – be conclusively presumed to have signed the cheque intending to become liable on the cheque; or
(b) as regards a holder who is not a holder in due course – be presumed, unless the contrary is proved, to have signed the cheque intending to become liable on the cheque;
unless it is apparent, on the face of the cheque, that the person did not sign the cheque intending to become liable on the cheque."

17 Finally, s 33 provides for when the signer is not personally liable on the cheque where he or she signs as agent or in a representative capacity. Relevantly, s 33(1) is as follows:

"(1) Where:
(a) a person (in this subsection referred to as the signer ) signs a cheque for or on behalf of a principal or in a representative capacity;
(b) the signer adds words to the signature indicating that the signer signs for or on behalf of a principal or in a representative capacity; and
(c) the person for or on whose behalf the signer signs the cheque is named, or otherwise indicated with reasonable certainty, in the cheque;
the signer is not personally liable on the cheque."

The decision of the primary judge

18 It was submitted by the respondent before the primary judge that, by reason of having signed the cheques in his own name, the appellant was the drawer of the cheques. It was further submitted that, even if the appellant signed in his capacity as an employee of the defendants, he would still be liable on the cheques as the requirements of s 33(1) and, in particular, sub-paragraph (b), had not been complied with.

19 The appellant submitted before his Honour that on the face of the cheques the name of the drawer was self-evident being the defendants trading as V&P Produce, and that the signature of the appellant was not (on the face of the cheques) an act of drawing the cheques but an authentication of the act of the named drawer. Not being the drawer, it was then submitted that the appellant was not liable under s 75 of the Act, as the mere signing of the cheques did not indicate an assumption of liability on the appellant's part.

20 The primary judge, after stating the respective submissions of the parties and setting out the statutory provisions to which I have referred above, then considered the two authorities upon which the appellant had relied, namely, that of the English Court of Appeal in Bondina Limited v Rollaway Shower Blinds Limited [1986] 1 WLR 517 and that of the Court of Appeal of the Supreme Court of Queensland in Commonwealth Bank of Australia v Muirhead [1997] 1 Qd R 567. I shall return in more detail to these cases later in these reasons.

21 With respect to Bondina, it was submitted to his Honour on behalf of the appellant that that case governed the present and they were on all fours. However, after citing from the judgments in both cases the primary judge concluded (at [42]) that he "did not find these decisions helpful on the facts of this case".

22 The primary judge then referred to the documentary evidence constituted by the 16 cheques comprising Exhibit B. As to that, he said (at [44]):

"These cheques were drawn on the Westpac Bank at Flemington Markets addressed to Patrick Demarco. Each cheque, which was in a printed form, was said to have been drawn by E&C Valamiou t/as V&P Produce. One may assume from the way in which this was written that the drawers were E&C Valamiou t/as V&P Produce . However, the evidence supported the fact that each of the cheques was signed by George Valamios. His signature was confirmed by reference to other documents tendered." (emphasis added)

23 His Honour then referred (at [49]) to ss 31(2) and 33 of the Act. It would appear, although it is not clear, that in [52] of his judgment, his Honour rejected a submission on behalf of the appellant that he had signed the cheques for and on behalf of the defendants and not as an equal partner in the firm entitled to the use of the cheque account.

24 The primary judge then summarised (in [53]) s 75 of the Act. It is implicit in what he said that he correctly regarded the respondent as a holder but not a holder in due course so that s 75(2)(b) was the applicable provision. The presumption referred to therein is subject to proof to the contrary. His Honour then found (at [54]) that there was "no acceptable evidence to the contrary".

25 Under the heading "Decision", the primary judge made the following findings:

"55. The facts found on the balance of probabilities or following concessions made at trial.
(a) The defendant signed the cheques in Exhibit B to pay for produce delivered to V and P Produce in accordance with the affidavit evidence of Mr Furcciniti, whose evidence I accept.
(b) The defendant did not place any qualification on the cheques that he was signing in a representative capacity for agent for V P Produce.
(c) The defendant's name was on the notice of dishonour given to the plaintiff from the Commonwealth Bank. Although not written in full in these documents, the contents of Exhibit D confirm he was an account holder of the account on which the cheques were drawn.
(d) He did not comply with the provisions of section 33 Cheques Act to avoid liability on the cheques.
(e) The defendant was in the best position to explain the basis on which he signed and did not give evidence, although available to do so at the trial.
(f) I draw the inference that he signed as a person to be held liable on the cheque."

26 Sub-paragraphs (b) and (d) above were relevant to s 33(1)(b) of the Act. Sub-paragraphs (c) and (e) were irrelevant given the basis upon which Exhibit D was admitted into evidence, a matter which his Honour appears to have overlooked.

27 His Honour then concluded his reasons in the following terms:

"56. Because of the effect of the provisions of section 33 and section 75 of the Cheques Act I am satisfied that the defendant has not established that it is clear on the face of the cheque that he did not sign the cheque with the intention to become liable. I accept the plaintiff's evidence which establishes that he intended to be bound by his signature.
57. He did not comply with section 33 and an inference cannot be drawn that he did, particularly having regard to the contents of Exhibit D, even for the limited purpose for which it was tendered. The contents of the dishonour notices alone are enough to establish a connection with the account leading to the conclusion that the defendant had the right to operate it in his own right.
58. As there was no evidence called to the contrary from a source able to readily explain the relationship between the defendant and V and P Produce, the court can more comfortably draw this inference from the documents tendered by the plaintiff.
59. I find that the defendant George Valamiou is liable on the cheques he signed and gave to the plaintiff by operation of the provisions of the Cheques Act .”

The issues on the appeal

28 There are some obvious errors in the above passages. Paragraph 56 of his Honour's reasons has nothing to do with s 33. Furthermore, there was no evidence called on behalf of the respondent which established that the appellant intended to be bound by his signature on the cheques. The contents of [57] were simply irrelevant. The respondent expressly eschewed before his Honour that he was making a case (which was certainly not pleaded) that the appellant had the right to draw on the defendants' cheque account in his own right and/or that he was liable on the cheques as a partner in the firm of V&P Produce.

29 With respect to the primary judge, it is difficult to discern the true basis upon which he found the appellant liable. He made no finding that the appellant was the drawer on the cheque. If anything, his finding was to the contrary: see the sentence I have emphasised in the passage from [44] of his judgment reproduced in [22] above. His Honour appears to have considered that, because the appellant was not able to establish the condition referred to in s 33(1)(b), that fact alone rendered him personally liable on the cheques. In fairness to his Honour, [12] of the respondent's written submissions to this Court advanced a similar argument. It was in these terms:

"The consequence of section 33 is that absent the requirements of the section being met, the signature of a person on a cheque shall not be taken to have been signed in a representative capacity, but rather will be taken as the signature of the drawer, or as a stranger to the cheque."

30 However, in oral argument the respondent properly conceded that the effect of s 33(1), if complied with, was that the person who signed the cheque was not personally liable thereon, but that that provision did not provide that if its requirements were not met then the person who signed the cheque was personally liable thereon. Accordingly, it was conceded that s 33 was irrelevant to the present case.

31 Furthermore, and notwithstanding that his Honour appears to have found (or at least assumed) that the appellant was not the drawer of the cheques, the respondent in his written submissions on the appeal argued that he was the drawer of the cheques. However, no notice of contention had been filed to support such a submission and it was ultimately abandoned.

32 Ultimately, the issues in the appeal resolved themselves into one issue, namely, whether the appellant was personally liable on the cheques pursuant to s 75 of the Act. In this respect, it became common ground that, in terms of s 75(1), the appellant had signed the cheques otherwise than as the drawer or indorser. Furthermore, it was accepted that the presumption referred to in s 75(2)(b) applied – it not having been proved to the contrary that he did not intend to become liable on the cheques. The only live issue left in the appeal was whether it was apparent, on the face of the cheques, that the appellant did not sign them intending to become liable thereon. It is to that issue that I now turn.

33 As I have already observed, the appellant's submission was that it was clear on the face of the cheques that he did not sign them intending to become personally liable but signed them as the authorised signatory on the account of the defendants trading as V&P Produce. Reliance was placed upon the decision in Bondina.

34 In Bondina, two cheques were issued in favour of the plaintiffs in payment for goods supplied by them. The cheques were drawn on identical bank cheque forms containing the printed name and account number of the company and bearing the personal signatures of two directors of the company. The cheques were dishonoured. The plaintiffs commenced an action on the cheques against the company and the directors personally. One of the directors failed to serve a defence and the plaintiff obtained judgment against him by default. His application to have the judgment set aside and for leave to defend the action was refused. His appeal to the Court of Appeal was allowed on the basis that it was plainly arguable that a cheque drawn on a bank cheque form printed with a company name, bank account number and signed by a director of the company was drawn on the company's account and was not the personal liability of the signing director notwithstanding that he had given no indication that he was signing as a representative of the company and not on his own behalf.

35 The plaintiffs relied upon s 26(1) of the Bills of Exchange Act 1882 (UK) which provided as follows:

"Where a person signs a bill as drawer, indorser or acceptor, and adds words to his signature, indicating that he signs for or on behalf of a principal, or in a representative character, he is not personally liable thereon; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability."

36 It was submitted on behalf of the plaintiffs that the director had merely signed a printed form of cheque and had not added any relevant words to his signature. This argument was rejected by Dillon LJ, with whom Sir George Waller agreed, in the following terms (at 520):

"As it seems to me, however, when [the director] signed the cheque he adopted all the printing and writing on it; not merely the writing designating the payee and the amount for which the cheque was drawn, if that had been written out for him and not by himself, but also the printing of the company's name and the printing of the numbers which designate the company's account. The effect of this is to show that the cheque is drawn on the company's account and not on any other account. It is not a case of a joint liability of several people. It shows, plainly, as I construe it, looking no further than the form of the cheque itself, that the drawer of the cheque was the company and not [the directors]."

37 His Lordship then considered that this approach was in line with the judgment of the Court of Appeal in Chapman v Smethurst [1909] 1 KB 927 where a cheque had been issued with the stamp of the company's name and under it the signature of J H Smethurst, Managing Director. Vaughan Williams LJ said (at 928):

"Under the circumstances of the case it seems impossible to say that the defendant is personally liable merely because he placed the signature 'J H Smethurst Managing Director' under the words which indicated the note was made on behalf of the company."

Joyce J added (at 931):

"In my opinion the promissory note in question prima facie appears, and would be taken by any ordinary person to be, the note of the company and of no-one else … The signature of the managing director I consider to have been added merely as indicating the person by whom the name of the company was affixed or as otherwise validating the making of the note in the name of the company."

38 To these citations Dillon LJ added the following further observation (at 521):

"The position with the modern form of cheque with the name of the company printed and the number of the company's account also printed is, in my judgment, a fortiori."

39 Sir George Waller referred to the decision of McGillvray JA of the Ontario Court of Appeal in H P Etlin Co Ltd v Asselstyne (1962) 34 DLR (2d) 191. The case involved a printed cheque form carrying the name "Benson-Wilcox Limited" in bold type on its face and also in the place reserved for signature. The defendant, who was the president and manager of the company, signed his own name on a printed line below the "signature" of the company without any indication that he did so as agent or in a representative capacity. The defendant denied that he was the drawer of the cheque and asserted that his signature appeared solely as signing officer for Benson-Wilcox Limited which firm was liable for payment of the cheque and not he, the defendant. McGillvray JA upheld this submission. He said (at 192-193):

"At common law as well as under the Bills of Exchange Act … he who subscribes himself to a bill makes himself responsible therefor unless it is apparent upon the face of the bill that he signs as a mere scribe for another party."

40 His Honour then described the cheque which had the printed name of the company as drawer at the bottom. Immediately under the company's name a line appeared (also printed) designed to receive the signature, according to his Honour, of an authorised person necessary to give validity to the printed company name, and it was on this line that the name of the defendant appeared. His Honour then observed (at 194):

"These facts, namely, the cheque on printed stationery of the company, the size of the cheque number, the name of the company's bank printed on the cheque, the perforated stamp of a type in common use by business concerns and the signature of the defendant appearing upon the line provided for the signature of the signing officer, make this cheque prima facie that of Benson-Wilcox Ltd and no-one else. It would be taken by any ordinary person to be such."

41 His Honour therefore considered that as in Chapman v Smethurst, it was apparent on the face of the cheque itself that it was given as a company cheque and was one upon which the company and not the director was liable. His Honour placed particular reliance upon the fact that the defendant's name appeared on the line provided for the signing officer and that unless it was under seal, a company cheque would be of no effect unless counter-signed by an authorised agent of the company. In this case, the defendant's name was linked by the line to the printed name of the company.

42 In Muirhead, the facts of which are different to the present case, McPherson JA with whom Macrossan CJ and Davies JA agreed, cited with apparent approval the passage from the judgment of Dillon LJ in Bondina which I have recorded in [36] above. His Honour then cited the following passage from the judgment of the Appellate Division of the South African Supreme Court in Dickinson v SA General Electric Co (Pty) Limited [1973] 2 SA 620 at 628-629:

"It is common knowledge that the cheque forms supplied to their customers by banks which have adopted computerisation, have printed on them a name and a number. The number is that of the bank's customer in which the banking account is conducted; it is not, of course, a signature. The number is that by which the account is identified in the bank's records. Where, at any rate, a single signature is affixed to such a cheque, it may well be argued that, in the light of the circumstances to which I have just referred, that signature is intended to be and is to be interpreted as being the signature of the customer whose account it is. That may be so even where, as in the present case, the name of the customer as printed on the cheque is that of a company … and the signature is the unqualified signature of a natural person …
Prima facie when a person has signed a cheque form such as the present, he intends to write, and will be understood as writing, the signature of the customer of the bank whose name is printed on the cheque. If he intended to sign in his own person he would presumably strike out the printed name and number which appears on the cheque."

None of the foregoing authorities were concerned with a provision such as s 75.

43 The provenance of s 75 is to be found in s 61 of the Bills of Exchange Act 1909 (Cth). It provides as follows:

"Where a person signs a bill otherwise than as drawer or acceptor, he thereby incurs the liabilities of an indorser to a holder in due course."

44 This provision was referred to by Sheppard J in H Rowe & Co Pty Limited v Pitts [1973] 2 NSWLR 159. In that case the defendant was sued upon the basis that he had indorsed the relevant bill of exchange. It was accepted that he was not its drawer. Sheppard J's discussion as to the basis of the defendant's liability commenced with the following citation from Byles on Bills of Exchange 23rd ed, p 170 where the learned authors say:

"A third person signing a bill usually places his signature upon the back of it: hence he is said to 'back' the bill and his signature is commonly called an indorsement. The object of backing a bill is to increase its value by reason of the additional credit which it derives from the signature of the third person and it pre-supposes that the third person by his signature, has made himself liable upon the bill. This is clearly the case where the bill has been discounted and the bill is in the hands of a holder in due course: the third person comes under an obligation to all subsequent holders precisely similar to that of the drawer. The indorsement, however, does not impose a similar obligation to prior parties, except, it is submitted, in the case of a drawer-payee who is the holder."

See Byles , 27th ed p 200 [17-17].

45 After discussion of the authorities said to support this statement, his Honour held (at 167G) that a third party who "backs" a bill of exchange by placing his signature on the back of it will be liable to the drawer in the event of dishonour if it was his intention to make himself so liable when he signed the bill. His Honour gave consideration to s 61 but accepted that it only operated to confer rights upon the holder in due course and the plaintiffs were not such. Nevertheless, on the facts as found, his Honour held that the defendant intended to make himself liable not only to subsequent holders in due course of the bills but also to the plaintiff as the drawer-payee.

46 The Explanatory Memorandum to the Cheques Bill 1985 indicated that it was the intention of the legislature to place a person who "backed" a cheque in the same position in relation to a holder who was not a holder in due course as he was in relation to such a holder pursuant to s 61. As to clause 75(2), [363] of the Explanatory Memorandum noted that it used the test of apparentness which gave effect to the intention behind the clause, namely, that a person taking a cheque that a stranger has indorsed can safely act on the assumption that the stranger is liable to that person as an indorser unless it is apparent from the cheque itself that the stranger is not liable on the cheque, eg, the signature is merely that of a witness.

47 Dr A L Tyree, in his book "Australian Law of Cheques and Payment Orders", Butterworths 1988, refers in [12.27] to the presumptions referred to in s 75(2)(a) and (b) and observes:

"These presumptions do not apply if it is apparent on the face of the cheque that the person did not intend to become liable on the cheque. This might be, for example, if the person makes it clear that his or her signature is in a representative capacity only or where the form of the cheque makes it clear that the person was signing only in a representative capacity: see Bondina Ltd v Rollaway Shower Blinds Ltd ."

48 The respondent sought to distinguish Bondina upon the basis that the position of a company was different to that of a firm such as V&P Produce. This was because, at the time of the decision in Bondina, s 37 of the Companies Act 1985 (UK) provided that

"a bill of exchange … is deemed to have been made, accepted or endorsed on behalf of the company if made, accepted or endorsed in the name of, or by or on behalf or on account of, the company by a person acting under its authority."

49 In Paget's Law of Banking 12th ed, reference is made to this provision at p 150 [10.8]. The learned author, having cited the section, refers to the risk that the signor will be held personally liable on the instrument if he or she does not sign "by or on behalf or on account of" the company. Citing Bondina as authority, he then remarks:

"This risk is, however, greatly diminished if the instruments bear the printed name of the company and, in the case of a cheque, its account number. On this form of instrument there can be no question of the company and the signatory being jointly liable, the manifest intention being that the liability is that of the company alone. Even if such an instrument is signed without the addition of any words indicating a representative capacity, the signatory can be said to adopt all the wording of the instrument, including the company's name and account number and will in this event be under no personal liability."

50 It is noteworthy that the members of the Court in Bondina made no reference to s 37 of the Companies Act in their reasons for judgment. In principle, I can see no relevant difference between the position of a company and that of a firm where the latter's cheques are in the form of those the subject of the present litigation. Where, as here, there is only one signature on the cheque in the place expressly provided on the printed form for the signature of the person authenticating the cheque so that it is the only signature of, or on behalf of, the account holder, be it a company or a firm, it is manifest on the face of the cheque that that signatory is not signing in his or her personal capacity with the consequence that, within the meaning of s 75(2), it is apparent on the face of the cheque that he or she is not signing the cheque intending to become personally liable thereon.

51 Accordingly, in my opinion it is apparent on the face of the cheques that the appellant signed them as the representative of the defendants who were the drawers of the cheque. As such, it is equally apparent that he did not intend to be under a personal liability on the cheques. In other words, as the only signatory to the cheques, he was not "backing" the cheque in the sense of seeking to enhance its value by adding his name to it as, in effect, a quasi-indorser. In my view, the remarks of Dillon LJ in Bondina are applicable to the present case. Commercial common sense clearly requires a finding that, on the face of these cheques, it was apparent that the appellant, as the sole signatory thereon, did not intend to become personally liable thereon. It follows that the primary judge erred in finding to the contrary and that his judgment in favour of the respondents should therefore be set aside.

Conclusion

52 In my opinion the following orders should be made:

(1) Appeal allowed;

(2) Orders made by Delaney DCJ on 10 June 2004 be set aside and in lieu thereof there be judgment for the appellant;

(3) Order that the respondent pay the appellant's costs of the proceedings at first instance and the costs of the appeal but to have with respect to the latter a certificate under the Suitor's Fund Act 1951, if otherwise qualified.

53 BROWNIE A-JA: I agree with Tobias JA.

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