Court of Appeal (WA)|2011-02-22|Before: Pullin JA

BRIGGS -v- LUNT [No 3] [2011] WASCA 44 (22 February 2011)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : BRIGGS -v- LUNT [No 3] [2011] WASCA 44

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : LUNT -v- BRIGGS [2009] WASC 134

Contract - Remuneration for services - Whether findings about execution of documents were against the weight of the evidence - Whether trial judge decided all live issues - Whether possible for Court of Appeal to deal with issues not resolved by trial judge

Interest pursuant to s 32 Supreme Court Act 1935 (WA) - Whether erroneous calculation

First Appellant : Mr G R Donaldson SC & Mr P G McGowan

Second Appellant : Mr G R Donaldson SC & Mr P G McGowan

Hughes v St Barbara Mines Ltd [No 3] [2008] WASC 220

Lunt v Briggs [2009] WASC 134

Lunt v Briggs [2009] WASC 243

Morgan v Banning (1999) 20 WAR 474

1 REASONS OF THE COURT: The appellants appeal against two judgments of EM Heenan J for fees earned by the respondent (Mr Lunt) for consulting work carried out by Mr Lunt for the second appellant (once called WRS Pacific Pty Ltd (WRS)), the liability for part of which the first appellant (Mr Briggs) took over responsibility. One judgment was against Mr Briggs in the sum of $980,266 in action CIV 1501 of 2001. The other judgment was against WRS in the sum of $830,386 in action CIV 1974 of 2001. The two actions were consolidated by an order of Heenan J on 18 December 2008. The order read:

By consent, action CIV 1501 of 2001 and CIV 1974 of 2001 be consolidated; that CIV 1501 of 2001 be the leading action; that the plaintiff have the carriage of both actions; that they be tried together ... and, subject to any lawful objections in the course of the trial, evidence in one shall be evidence in the other and vice versa.

2 As a result the trial judge published one set of reasons for decision. Notwithstanding the consolidation order, two judgments were settled and sealed for the amounts referred to above. The judgment sums were for a principal amount in each case plus interest pursuant to s 32 of the Supreme Court Act 1935 (WA).

The pleadings in CIV 1501/2001: Lunt v Briggs

3 In CIV 1501 of 2001 the statement of claim alleged that as at 30 June 1997, Mr Briggs was indebted to Mr Lunt in the amount of $517,900 in respect of consultancy fees earned by Mr Lunt for the provision of services to WRS. The fees were said to be due pursuant to a written consultancy agreement dated 12 April 1991 between WRS and Mr Lunt (consultancy agreement) which was for a three year term commencing 12 April 1991, a letter from WRS to Mr Lunt dated 11 June 1993 extending that term for a further four years to 1997 (extension letter) and pursuant to an agreement constituted by two documents; those being a letter dated 20 June 1995 from Mr Briggs to WRS (novation letter) pursuant to which Mr Briggs assumed responsibility for the WRS debt to Mr Lunt up until 30 June 1994 and a letter from Mr Lunt to WRS dated 23 June 1995 (release letter) forgiving WRS for the debt up until 30 June 1994. In his reasons the trial judge referred to the novation letter as the 'Coco's letter'.

4 The statement of claim pleaded that the debt due by WRS as at 30 June 1994, the liability for which was assumed by Mr Briggs, was $652,900 which was reduced by a payment of $135,000 in 1996 leaving a balance due of $517,900. The prayer for relief sought judgment for that sum plus interest.

5 Before referring to the defence, it is necessary to mention that the consultancy agreement bore the seal of WRS, which was witnessed by what appeared to be the signature of a director, Robyn Briggs (Mrs Briggs) (the wife of Mr Briggs), and what appeared to be the signature of a director and secretary of WRS, Mr Kevin Bond. The extension letter appeared to be signed by Mrs Briggs and Mr Bond, and the novation letter appeared to be signed by Mr Briggs and witnessed by Mr Bond.

6 In the defence to this action, Mr Briggs pleaded that as to the consultancy agreement, he took 'issue with the authenticity of the pleaded document in that Robyn Briggs did not sign the consultancy agreement and the initialling and signature on the consultancy agreement which purport to be hers are not her initialling and signature'. Mr Briggs in his defence also denied that there was any extension letter extending the consultancy agreement and as to the novation letter, he pleaded that he took 'issue with the authenticity of [that letter] in that Peter Briggs did not sign that letter'.

The pleadings in CIV 1974/2001 - Lunt v WRS

7 In action CIV 1974 of 2001 against WRS, Mr Lunt pleaded the existence of the consultancy agreement, the extension letter, the provision of services to WRS, the rendering of invoices to WRS and the demand for payment of $482,000 leading to a prayer for relief for that amount plus interest. In the alternative, Mr Lunt pleaded that he undertook services and that he was entitled to reasonable remuneration for his services. Particulars were given of 'accounts' (invoices) rendered after 30 June 1994.

(a) it disputed the authenticity of the consultancy agreement in that ... [Mrs] Briggs did not sign the consultancy agreement and the initialling and signature on the consultancy agreement which purport to be hers are not her initialling and signature';

(b) it disputed 'the authenticity of the [extension] letter ... in that ... [Mrs] Briggs did not sign that letter'.

(c) Mr Lunt was a director of WRS and that the only financial reward he was to receive was to be via 'his interest in the success of ... [WRS] through the profits generated by ... [WRS] in the development of the business'.

9 The alternative claim by Mr Lunt for reasonable remuneration for the services he performed was denied. Finally, a limitation defence was raised. There was a reply filed by Mr Lunt in response to the limitation defence and a rejoinder filed by WRS. The pleadings regarding the limitation defence will be referred to later in these reasons.

10 Early in the trial, the trial judge pressed counsel for Mr Briggs and WRS about the pleading in both defences that Mr Briggs and WRS disputed the 'authenticity' of the consultancy agreement (ts 183 - 184). The discussion ranged over what the real issues were in relation to the consultancy agreement, the extension letter and the novation letter. Counsel for Mr Briggs and WRS stated that the only issue concerning the 'authenticity' of the consultancy agreement and the extension letter was whether Mrs Briggs had signed the documents (ts 184 and 309). In the rejoinder, which had been filed in CIV 1974 of 2001, there was a plea that Mr Bond had not signed the consultancy agreement, but counsel for Mr Briggs and WRS informed the trial judge that they were not advancing a positive case that Mr Bond did not sign the document (ts 341) and that there was no plea that the signature on the consultancy agreement was not that of Mr Bond (ts 342). As to the extension letter, counsel for Mr Briggs and WRS advised that it did not contend that Mr Bond had not signed it (ts 351).

11 Apart from requiring proof that Mr Bond signed the documents, the result was that there was a single issue in relation to each of the three documents. The issue in relation to the consultancy agreement and the extension letter was whether Mrs Briggs signed them. If Mrs Briggs signed the consultancy agreement and the extension letter, then the documents bound WRS by reason of the provisions of s 127 to s 129 of the Corporations Act 2001 (Cth). The issue in relation to the novation letter was whether Mr Briggs signed it.

12 In his reasons the trial judge stated in relation to the consultancy agreement that 'the case was conducted entirely on the basis of whether or not Mrs Briggs, and for that matter Mr Bond, had ever signed the document and it is on that basis I address the issues' [94].

The evidence about the consultancy agreement

13 The witnesses in the case gave evidence at trial in 2009 about events, some of which had taken place up to 18 years before the trial. Not unnaturally, witnesses were unable to say that they remembered all of the events they were questioned about.

14 Mr Lunt gave evidence that the consultancy agreement was signed by Mr Bond, Mrs Briggs and Mr Lunt at Mr and Mrs Briggs' house on 12 April 1991 in his presence. This seemed unlikely because other evidence revealed that the consultancy agreement was not prepared by WRS' solicitors until November 1991 (exhibit 130). Nevertheless, there was evidence that the consultancy agreement was signed by Mrs Briggs, but at a later date. The consultancy agreement was tendered as an exhibit.

15 Mr Bond did not remember the consultancy agreement being signed at the Briggs' home. He testified that he was appointed as secretary and alternate director of WRS to a Mr Skidmore on 27 June 1991. He produced notes he made of a meeting of the directors of WRS which he attended on 3 October 1991 stating that a consultancy agreement for Mr Lunt was being drafted by WRS' solicitors. He also testified that he attended a directors' meeting of WRS on Friday 13 March 1992, the other directors in attendance being Mr Lunt and Mr Czechowski. He made notes of the meeting recording that the consultancy agreement (which had been prepared by WRS' solicitors) was discussed and the subject deferred until the next meeting (ts 540). He testified that on 24 March 1992 he made an entry in the seal register of WRS recording the affixing of the seal to the consultancy agreement (ts 558). He also testified that on 22 May 1992 there was another directors' meeting attended by himself and Mr Czechowski. His notes of that meeting recorded Mr Czechowski as objecting to the commencement date shown in the consultancy agreement which showed as 1 April 1990; that the 'start' date was amended to '1/4/91' and that the consultancy agreement was signed on '1/4/91' (ts 540 - 541). A copy of three pages of the consultancy agreement sealed and signed by him was at some time placed onto the seal register. Although he could not recall actually signing the consultancy agreement, Mr Bond testified that he was sure he had done so. Mr Bond testified that the other signature on it 'looks like the signature of Mrs Briggs' (ts 542). Mr Czechowski testified that he had 'no direct contemporaneous knowledge of the consultancy agreement' (ts 683).

16 There was a considerable body of evidence corroborating Mr Bond's opinion that the other signature witnessing the seal was that of Mrs Briggs. This other evidence also revealed that before the trial WRS and Mr and Mrs Briggs regarded the document as having been signed by Mrs Briggs and that it was 'authentic'. This evidence consisted of the following:

(a) The audited accounts of WRS for the year ending 30 June 1992 which were filed at ASIC (the company's annual return). Under the heading 'Directors' Benefits' there was a statement that no director had received or would become entitled to receive any benefit because of a contract 'other than in respect of ... a consulting agreement with Mr W T Lunt [and] ... a consulting agreement with Mr R M J Skidmore' and in note 13 to the accounts there was an item which read:

Messrs W T Lunt and Mr R M J Skidmore have consultancy agreements with the Chief Entity for the provision of consultancy services to the company. The agreement provides for payments based on normal commercial terms and conditions.

The 'Chief Entity' was WRS. There were similar entries in the 1991 and 1993 accounts.

(b) Mr Lunt also produced the WRS financial statements for the year ended 30 June 1994. Under the heading of 'Directors' Benefits', there was a reference to Mr Lunt having received or having become entitled to receive fees 'pursuant to a consultancy agreement'.

(c) There was evidence from witnesses for both parties that in early 1997 there was a transaction involving WRS and a New Zealand company called Max Resources.

Mr T W Johnson was one of the witnesses called by Mr Lunt. He testified that he was a New Zealand director of Max Resources and that he had been instructed by two other directors of Max Resources, Mr Verheggen and Mr Langoulant, to travel from New Zealand to Western Australia with Mr McShane, another New Zealand director of Max Resources, to carry out due diligence (ts 409 - 410). Mr Johnson testified that Mr Verheggen and Mr Langoulant told him and Mr McShane that the proposal was that Max Resources should buy the shares in WRS (ts 410). As a result he said that he concentrated on the liabilities of WRS and in that respect he learned that Mr Lunt was owed a sum of about $1 million (ts 411).

Mr Johnson gave evidence that he and Mr McShane met with Mr Briggs on two occasions in Perth in early 1997. Mr Johnson testified that he and Mr McShane asked Mr Briggs during their first meeting about the liability of WRS to Mr Lunt. Mr Briggs told them that Mr Lunt had agreed to remove his debt to 30 June 1994 upon Mr Briggs agreeing to take personal responsibility for the debt (ts 411).

Mr McShane also gave evidence. His evidence was that he was told by Mr Briggs that a debt due to Mr Lunt for the period 1 July 1994 to December 1996 was still resting with WRS, although Mr McShane was unable to recollect the amount of that debt (ts 211). Mr Johnson testified that he told Mr Briggs that he would need to see documents confirming his statements that the debt to Mr Lunt had been forgiven and taken over by Mr Briggs and to see documents relating to moneys due under the consultancy agreement from 1 July 1994 onwards (ts 414).

Mr Johnson and Mr McShane gave evidence that at the second meeting with Mr Briggs in Perth in early 1997, Mr Briggs gave to Mr Johnson a copy of the novation letter and the release letter. Mr Johnson retained the copy of the novation letter and produced it at the trial (ts 415 - 416).

(d) Mr Johnson gave evidence that he and Mr McShane also met with Mr Cooke, the auditor of WRS who confirmed that Mr Lunt had removed part of his debt in return for Mr Briggs agreeing to pay the sum removed (ts 417). Mr McShane testified that he and Mr Johnson spoke to Mr Lunt who confirmed what Mr Briggs had told them. Subsequently, Mr Johnson and Mr McShane said that they recommended to the Max board that Max purchase the assets of WRS and not the WRS shares because of the liabilities of WRS to Mr Lunt (and Mr Skidmore) (ts 212 - 213).

(e) Mr Lunt tendered a transcript of evidence given by Mr and Mrs Briggs in a District Court action in 2003 in which Mr Lunt's wife had brought proceedings against WRS (ts 398), details of which it is unnecessary to relate. On 11 March 2003, during the course of the proceedings, the consultancy agreement was produced and shown to Mrs Briggs in the witness box. Mrs Briggs said she could not recall signing the document but that 'it appears to be my signature'. In the same action on the next day, 12 March 2003, Mr Briggs gave evidence when shown the consultancy agreement, saying 'it looks like my wife's signature'.

(f) In 2000, Mr Lunt brought a claim against WRS claiming that he was an employee of the company and entitled to payment for his services as an employee. WRS filed a document objecting to the jurisdiction of the Western Australian Industrial Relations Commission on the basis that Mr Lunt was not an employee and referring to the 'alleged' consultancy agreement. Mr Briggs gave evidence on 10 April 2001. His counsel produced and showed the consultancy agreement to Mr Briggs who testified that the company seal appeared on it and that he saw on it the 'signature of my wife'.

17 In his defence, Mr Briggs gave evidence and denied that Mr Lunt was entitled to any payment for his services. He said he had given no instructions to lawyers to prepare the consultancy agreement (ts 742), that the consultancy agreement was a 'forgery' and that he and his wife were not at home on 12 April 1991 when Mr Lunt said it was signed (ts 736). Mrs Briggs testified that she did not sign the consultancy agreement and that the signature on it was 'not at all like my usual signature' and that the initials were not hers. She was asked about her testimony in the District Court when she said that the signature 'looks like my signature'. She explained that she had only seen the document for the first time when she was in the witness box, that she was 'very nervous', that she had 'made a mistake' but that 'it is not my signature'. Mrs Briggs testified that the signature on the consultancy agreement did not look 'anything like' her signature (ts 705).

18 There was expert evidence to the effect that Mrs Briggs appeared to have two forms of signature, one like the upright signature on the consultancy agreement and another more cursive form (ts 627).

19 As to the extension letter, Mr Lunt produced a photocopy of it into evidence saying that he could not recall the exact circumstances surrounding the document as it was of 'little practical importance' given that he was 'still receiving instructions and payments from Briggs and was intimately engaged in promotion and development of WRS' (ts 351). Mr Lunt when pressed in cross-examination about the extension letter said that he believed that he saw Mrs Briggs sign the letter (ts 496).

20 When it was tendered it became exhibit 58 and the following exchange took place between the trial judge and counsel for WRS and Mr Briggs.

HEENAN J: Mr McGowan, I understand that it is alleged that this letter was not signed by Mrs Briggs.

McGOWAN, MR: Yes, your Honour.

HEENAN J: But it is not alleged, is it, that it was not signed by Mr Bond?

McGOWAN, MR: It is in the same category as our discussion before, that is

HEENAN J: So the allegation in this respect is that while Mr Bond signed that letter he did not do so as director or secretary or with the authority of the company.

McGOWAN, MR: Yes.

HEENAN J: Very well. Thank you.

21 Mr Bond subsequently gave evidence that he was appointed as alternate director of WRS on 27 June 1991, a full director in June 1992 and that he remained a director until he resigned in November 1996. He was therefore a director when the extension letter was signed. There was no cross-examination suggesting that he did not sign the extension letter in his capacity as an officer of the company or that he signed without authority.

22 Mr Bond could not remember signing the extension letter but he observed that the draft financial statements of WRS for the year ended 30 June 1995 presented to the auditors before he resigned as an officer of WRS disclosed that Mr Lunt had a consultancy agreement for that year (ts 546). As the passage from the transcript set out above shows, there was no positive case advanced by WRS that Mr Bond had not signed the extension letter (ts 351). Mrs Briggs in her evidence-in-chief said that she had not signed the extension letter, but in cross-examination the following exchange took place:

Alright, but you're telling us, are you, that the reason you say you didn't sign it is because Peter told you there was no consultancy agreement and no extension?---Yes, I agree with that.

So you have no recollection yourself and your denial of the letter is Peter's denial. Is that the case---Well, no, I don't remember the letter but that appears to be my signature (ts 708).

A little further on there was a further question and answer as follows:

The question though still is your denial of signing the letter of extension is because Peter told you that there was no letter of extension. Is that the case?---Probably, yes (ts 709)

23 Mr Briggs said, when shown the extension letter during cross-examination, that the signature was 'more like' Mrs Briggs' normal signature' (ts 790).

24 There was then evidence from a handwriting expert, a Mr Horton, who said that the signature of Mrs Briggs on the extension letter was identical to the signature on another document (ts 648). Another expert, Mr Gregory, said that signatures are never identical (ts 632 - 633).

25 Other evidence bearing on the subject was the important evidence of Mr Johnson and Mr McShane in which Mr Briggs told them that the liability of WRS after 30 June 1994 for consultancy fees remained with WRS (ts 413). There would only have been consultancy fees accruing due to Mr Lunt after 30 June 1994 if the extension letter had been signed and if the consultancy agreement existed in the first place.

Evidence in relation to the novation letter and the release letter

26 In relation to the novation letter, Mr Lunt gave evidence that there was a lunch at Coco's restaurant on 20 June 1995 at which the novation letter was signed by Mr Briggs and Mr Bond, that a photocopy of the letter was made in the restaurant, and that Mr Briggs gave Mr Lunt a copy of it and kept the original. Mr Lunt produced the copy of the novation letter and it became an exhibit. Mr Lunt testified that he then signed the release letter. It became an exhibit (ts 296 - 297).

27 Mr Briggs gave evidence that it was not his signature on the novation letter and he gave and led other evidence that he was not at the restaurant on 20 June 1995 (ts 739). He gave evidence that the release letter signed by Mr Lunt (the authenticity of which was not in dispute) was signed because he discovered the 'alleged debt' for consultancy fees in 1995 when he was shown the draft of the 1994 accounts (ts 738); that he called in Mr Lunt and demanded that he remove the debt because Mr Lunt was defrauding him (ts 817). Mr Briggs said that the release letter was signed by Mr Lunt in consequence.

28 Mr Bond could not remember the lunch and could not remember signing the novation letter but he said that it looked like his signature (ts 550) and that the other signature 'looks very much like the signature Peter Briggs signs his name with'.

29 Other evidence bearing on the issue about whether Mr Briggs signed the letter was the evidence given by Mr Johnson and Mr McShane and referred to above in detail. In short, when they asked for documents verifying Mr Briggs' advice that Mr Lunt had agreed to remove his debt and verifying that Mr Briggs had taken personal responsibility for the debt, Mr Briggs gave them a copy of the novation letter and the release letter.

30 Mr Langoulant and Mr Verheggen were two other directors of Max Resources. They were called by WRS and Mr Briggs to give evidence to counter one aspect of Mr Johnson's and Mr McShane's evidence. Their evidence was that there was never any proposal by Max Resources to buy the shares of WRS. The significance of that evidence was that if there was never any proposal to buy the shares of WRS, there would have been no reason for Mr Johnson and Mr McShane to ask questions about liabilities on the balance sheet of WRS. However, Mr Briggs was cross-examined and revealed that WRS's solicitors had prepared a draft agreement proposing the purchase of WRS shares by Max Resources (ts 822).

31 There was other evidence which bears on the limitation defence but that will be referred to later in these reasons.

32 The trial judge's findings about the credibility of the witnesses explains why he reached the conclusions referred to below and upheld Mr Lunt's claims. The trial judge made the following findings:

33 The trial judge referred to Mr Lunt's detailed evidence about the manner in which the consultancy agreement was executed at the Briggs' home on 12 April 1991. His Honour said that he did not accept that the document was executed on that occasion and that Mr Lunt's evidence 'is seriously wrong in this regard' [178]. His Honour said that he had given much attention to whether or not this was deliberate dishonesty or whether as a result of the storm of conflicts by which his 'entire reputation and fortune has more than once been placed in jeopardy' Mr Lunt had simply 'lost his way and been so overcome with bitterness and indignation at the way in which he believes Mr Briggs had acted towards him, that he had set out to 'embroider his case whenever and however possible'. His Honour concluded that there is 'quite an element of this approach in Mr Lunt's evidence'. The trial judge said that he was 'obsessive', 'preoccupied with demonstrating detail to the point where it is obviously unsustainable and he is capable of inventing facts and circumstances to advance his end without realising the full impact of his actions' [179]. Earlier the trial judge stated at [27] that he would only act upon Mr Lunt's evidence 'where the facts are clearly established or where there is corroboration by direct testimony or inference from other evidence'.

34 The trial judge said that except to the extent that his evidence was confirmed by contemporary documents, or acknowledged to be true, 'I am not prepared to act on it. His demeanour and attitude in the courtroom, his denial of any knowledge of the accounts of WRS or the existence of a consultancy agreement, his method of dealing with Max Resources' purchase, and his denial of meetings or discussions with the New Zealand directors are just some of many demonstrations that his evidence is not deserving of acceptance' [180]. Earlier the trial judge said at [28] that 'when it comes to the evidence of Mr ... Briggs ... he was simply not credible'.

35 The trial judge found that Mrs Briggs was an unreliable witness. At [175] he said that Mrs Briggs had 'only an extremely limited appreciation of her husband's business affairs and did not attempt to involve herself in them at all closely'. The trial judge found that she was 'disposed to trust her husband, act only at his direction and to sign documents, letters or other materials whenever he asked her to do so, relying entirely on his judgment in that respect without questioning him'. His Honour also found that '[h]er memory of events including major forensic contests in the District Court, in the Industrial Relations Commission and elsewhere involving Mr Lunt was extremely limited and unreliable'. Finally, his Honour found that Mrs Briggs 'adopted the role of respecting and protecting her husband' and that she did not have 'a sufficiently good acquaintance with, or memory of, the events or documents in question to give any reliable account of her role in dealing with them'.

36 The trial judge regarded Mr Johnson as a 'very careful, precise and experienced businessman of a traditional and conservative disposition who gave evidence in a plain and straightforward manner. He was a sophisticated and intelligent businessman who was ... utterly truthful' [54].

37 The trial judge said that when Mr McShane was giving evidence, he was 'very particular and careful in the testimony which he was giving, was at pains to be correct, was a very well educated and fastidious person, with a sense of obligation and propriety which was obviously the product of many years of responsible senior professional work' and that he was 'balanced, unaligned and independent' [40].

38 The trial judge noted that Mr McShane had been cross-examined on the basis that his memory was unreliable and had been affected by a serious cardiac disease which he experienced in 2007 and that he was personally hostile towards Mr Briggs. The trial judge rejected this and found that there was no reason to doubt or to question the evidence of Mr McShane 'and I accept it' [40].

39 The trial judge said that he was 'obliged to say that Mr Verheggen made a very poor impression and that he was quite naked in his disregard of Messrs McShane and Johnson'. His Honour stated that he could not 'regard his testimony as at all reliable or credible' [128].

40 The trial judge said [131] that Mr Langoulant did not impress as a person who was giving a full account of the dealings leading to the purchase by Max Resources of the business or assets of WRS and that it was 'quite evident' that he set out to 'diminish the role, importance and knowledge of Messrs Johnson and McShane'.

41 In relation to the contest between the evidence of Mr McShane and Mr Johnson and the conflicting evidence of Messrs Verheggen and Langoulant concerning the proposed transaction between Max and WRS, the trial judge said:

I reject the testimony of Messrs Verheggen and Langoulant that there was never a proposal for the acquisition to take place in the form of a purchase of the shares of WRS by Max Resources [56].

His Honour noted that Mr Briggs had ventured the same version of events at first, 'but acknowledged in cross-examination that there had, at a very early stage, been a proposal for the sale of all the shares in WRS to Max Resources' [56].

42 The trial judge said that he did not 'regard Mr Czechowski as a reliable, frank, or even honest witness. That he disclaimed any knowledge of a consultancy agreement with Mr Lunt or references to consultancy arrangements with Mr Lunt in earlier accounts of the company was, in the circumstances of this litigation, plainly incredible ... [that he] showed obvious partisanship with Mr Briggs and he is not, in my estimation, a witness whose testimony can be accepted' [122].

43 The trial judge regarded Mr Bond as 'independent, truthful and reliable' [71].

44 The trial judge also made some important express findings of fact which bore on the issues about whether Mrs Briggs and Mr Briggs signed the documents in issue. The trial judge found that:

(a) the consultancy agreement was prepared by Mr Briggs' solicitors with his knowledge and approval and despatched to Mr Bond and WRS on 6 November 1991 for execution [110], [135];

(b) Mr Bond had a discussion with Mr Czechowski leading to a decision that the company should execute the consultancy agreement [135];

(d) the consultancy agreement had the seal of WRS affixed to it with the knowledge and authority of Mr Bond who countersigned as secretary of the company [146];

(e) in April and May 2001, WRS and Mr Briggs were treating the consultancy agreement as valid and effective according to its terms [186];

(f) the allegations by Mr Briggs and WRS that the consultancy agreement was not validly executed by WRS because Mrs Briggs' signature was either 'not genuine or was forged' were of ' comparatively recent origin' [195];

(g) There were two recognisable but different styles of signature for Mrs R Y Briggs and that her apparent signature on the consultancy agreement (exhibit 14) was of the upright style, which contrasted with the cursive style which appeared on other documents [168];

(h) the true reason for the removal from the WRS 1994 balance sheet of the liabilities to Mr Lunt and Mr Skidmore as at 30 June 1994 was to facilitate the takeover of the shares of WRS by Max [197];

(i) there was objective and reliable evidence in the 1994 annual accounts of WRS [66] and in the 1995 unaudited accounts that a consultancy arrangement existed between WRS and Mr Lunt, and that the accumulated liability to 30 June 1994 for those services was $652,900 [67]; and

(j) Mr Lunt was justified and authorised to appropriate $135,000, which reduced the liability of Mr Briggs to $517,900 [200] and [201].

45 As already mentioned the critical issues in this case were about whether or not Mrs Briggs signed the consultancy agreement and the extension letter and whether Mr Briggs signed the novation letter.

46 The trial judge referred to the evidence bearing on these issues, but at no point in his reasons did he expressly state that Mrs Briggs did or did not sign the first two documents or that Mr Briggs did or did not sign the novation letter. It would have saved time for the parties and this court if he had done so. However, in relation to the consultancy agreement and after many references to the issue (see for example [104], [135], [146], [170], [198] and [199]) the finding was made at [199] that

I am satisfied, therefore, that the evidence establishes that [the consultancy agreement], although not bearing the date on which it was executed, was validly executed on behalf of WRS.

47 The issue about whether the extension letter was signed by Mrs Briggs was dealt with in the following way. At [16] his Honour noted Mr Briggs' evidence that the signatures of Mrs Briggs and Mr Bond on the extension letter was a 'fabrication and that those signatures ... [were] not genuine'. At [21] the trial judge referred to the controversy over whether the signature appearing on the extension letter was the genuine signature of Mrs Briggs and that this controversy resulted in expert evidence being called. At [80] his Honour referred to Mr Bond's evidence acknowledging that 'it appeared to be his signature on the [extension] letter and that the accompanying signature appeared to be that of Mrs Briggs'. At [91] the trial judge said that he accepted Mr Bond as a truthful and reliable witness and that 'as best he was able to do [Mr Bond] confirmed the authenticity of his signature on the extension letter'. We have read Mr Bond's evidence and we cannot find anything which justifies the trial judge's quoted statements at [80] and [91]. His Honour appears to have misinterpreted Mr Bond's evidence. His Honour refers to the 'extension letter of 23 June 1993'. In fact, the evidence of Mr Bond that his Honour refers to was in relation to the release letter (dated 23 June 1995). The extension letter was dated 11 June 1993. However, at [79] his Honour, after setting out the content of the extension letter, correctly referred to the fact that Mr Bond testified that he had no specific recollection of signing the extension letter. At [67] his Honour referred to the fact that the accounts of WRS revealed that it was acknowledged that a commitment existed for a 'continuing accruing liability for the 1995 and following years'. At [108] the trial judge referred again to the issue about whether the signature of Mrs Briggs appearing on the extension letter was 'genuine'. At [137] and [141] the trial judge then referred to the consultancy fees claimed by Mr Lunt after 1 July 1994. Then at [143] and [144] the trial judge said that:

The case was conducted on the footing that there had never been any entitlement by Mr Lunt to receive consultancy fees from the company and that the claim as advanced was completely false and contrived.

In these circumstances I consider that if the evidence establishes to my satisfaction that there was an agreement for Mr Lunt to be paid consultancy fees by the company; that it continued to have effect from 1 July 1994 until 1997.

With regard to the apparent signature of Mrs Robin Briggs on [the extension letter] Mr Gregory said that this had a pictorial resemblance to the comparison signatures of Robin Briggs but that it was not possible to determine if the signature was written on the original of the document or had been reproduced by electronic manipulation or a cut and paste method. He was simply unable to express an opinion about the authenticity of the signature on that document without the original being available.

49 At [158] the trial judge referred to the fact that Mr Horton's report did not address the authenticity of Mrs Briggs' apparent signature on the extension letter, but that his oral evidence did so. At [160] the trial judge then referred to two transparencies of signatures said to be those of Mrs Briggs. These became exhibit 140. The significance of this exhibit is referred to when dealing with ground 4 below.

50 At [167] the trial judge said that he did not consider that he could dismiss the possibility that the second style of Mrs Briggs' two apparent forms of signature, might be signatures in her name made by Mrs Briggs any more than he could dismiss the possibility that Mrs Briggs did on occasions sign in different styles. At [174] the trial judge referred to Mrs Briggs' evidence that she had no recollection of signing the extension letter but that Mrs Briggs acknowledged that it was possible that she had signed.

I am ... satisfied that the plaintiff has established that in the second action he is entitled to judgment against WRS, ... in the amount of $420,000.

52 As to the issue about the novation letter, the trial judge did not state in his reasons that Mr Briggs signed the novation letter. However, at [162] the trial judge rejected Mr Briggs' evidence denying that his signature was on the novation letter and concluded that the novation letter was 'genuine'.

The proper construction of the trial judge's reasons

(a) Mrs Briggs signed the consultancy agreement

53 Although they do not expressly say so, the trial judge's reasons must be read as implying a finding that Mrs Briggs signed the consultancy agreement because the trial judge concluded at [199] 'that the evidence establishes that ... [the consultancy agreement] although not bearing the date on which it was executed, was validly executed on behalf of WRS'. The statement that the document was 'validly' executed must mean that the inference can and should be drawn by this court that the trial judge found that Mrs Briggs signed the document. The inference is supported by the trial judge's conclusion that Mr Bond was a credible witness, that Mrs Briggs' evidence was unreliable, that Mr Johnson and Mr McShane were credible witnesses, and that Mr Briggs and Mrs Briggs had, before the trial, acknowledged that Mrs Briggs' signature appeared on the document.

54 Although they do not expressly say so, the trial judge's reasons must be read as implying a finding that Mrs Briggs signed the extension letter because the trial judge held that Mr Lunt was entitled to judgment against WRS for amounts which accrued due after the expiry of the first three years of the consultancy agreement. Apart from one potential aspect of uncertainty, this is the only finding open because it was supported by Mrs Briggs' admission in cross-examination that the signature on the document 'appears to be my signature'; by her admission in cross-examination that she only denied that she signed the extension letter (during her evidence-in-chief) because Mr Briggs told her that there was no consultancy agreement, by the acceptance by WRS that Mr Bond signed the extension letter, by the accounts of WRS which recorded a liability for consultancy fees after 30 June 1994 and by the evidence of Mr Johnson and Mr McShane. The accounts of WRS after 30 June 1995 and the Johnson and McShane evidence corroborate Mr Lunt's evidence about the execution of the extension letter and the trial judge said he would act upon Mr Lunt's evidence if there was corroboration by inference from other evidence. The potential aspect of uncertainty was whether the evidence of the handwriting experts, Mr Horton and Mr Gregory, made it impossible for the trial judge to have made such a finding, but that is dealt with below when dealing with the ground of appeal concerning the extension letter.

(c) Mr Briggs signed the novation letter

55 The rejection of Mr Briggs' evidence and finding that the novation letter was 'genuine' support only one construction of the reasons on this point, and that is that the trial judge must be taken to have found that Mr Briggs did sign the novation letter.

56 The trial judge believed Mr Bond, and Mr Bond testified that he recognised Mr Briggs' signature. The finding is powerfully corroborated by the finding that Mr Briggs proffered the novation letter to Mr Johnson as a valid document which he would not have done if he considered the document a forgery.

57 There were 23 grounds of appeal which may be grouped under nine headings. The grounds relate to both actions unless stated otherwise. Many of the grounds are prolix and some do not comply with the Supreme Court (Court of Appeal) Rules 2005 (WA). Recast, and abbreviated, they are as follows:

(i) The learned trial judge erred in fact in finding that the consultancy agreement was signed by Mrs Briggs, that finding being against the weight of evidence (ground 1).

(ii) The trial judge erred in fact in finding that Mr Briggs acknowledged in the Western Australian Industrial Relations Commission that the consultancy agreement was 'valid and effective' (grounds 2 and 3).

(i) The trial judge erred in law by failing in his reasons to address evidence that Mrs Briggs' signature on the extension letter was identical to her signature on another document and failing to address expert evidence that it was impossible for two signatures to be the same (ground 4).

(ii) The trial judge erred in fact in finding that Mrs Briggs signed the extension letter, this finding being against the weight of evidence (ground 4).

(i) The trial judge erred in fact in finding that Mr Briggs made admissions to Mr McShane to the effect that he had assumed personal liability for indebtedness of WRS, such finding being against the weight of evidence (ground 5).

(ii) The trial judge erred in fact in finding that Mr Briggs made admissions to Mr Johnson to the effect that Mr Briggs assumed personal liability for the indebtedness of WRS in that such finding was against the weight of evidence (ground 6).

(iii) The trial judge erred in fact in finding that Mr Briggs handed a copy of the novation letter to Mr Johnson, this finding being against the weight of evidence (ground 7).

(d) The novation letter - Mr Briggs CIV 1501 of 2001

(i) The trial judge erred in fact in finding that Mr Briggs signed the novation letter, such finding being against the weight of evidence (ground 16).

(ii) The trial judge erred in fact in finding that the signature of Mr Bond on the novation letter was 'genuine' when 'the learned primary judge ought to have found that it was not' (grounds 10, 11 and 12).

(iii) The trial judge erred in fact in finding that Mr Verheggen was not a witness of credit because he was not 'challenged in cross-examination' (ground 13).

(iv) The trial judge erred in fact in finding that Mr Langoulant was not a witness of credit on the basis that his evidence 'was not challenged in cross-examination' (ground 14).

(v) The trial judge erred in fact in finding that it was 'inherently implausible' that Mr Briggs did not pay regard to the financial affairs of WRS (ground 15).

(e) The limitation defence - WRS - CIV 1974 of 2001

WRS (and not Mr Briggs) complains that the trial judge erred in law in failing to deal with WRS's plea that it had a limitation defence to part of the claim against it (grounds 17, 18, 20, 21 and 22).

The trial judge erred in law in failing to make findings about when invoices for services performed after 30 June 1994 were delivered to WRS (ground 21).

(g) Invoices - outside scope of writ - WRS - CIV 1974 of 2001

The trial judge erred in law in failing to determine whether the claims relating to seven invoices referred to in the amended statement of claim were 'outside' the scope of the writ' (ground 22) - CIV 1974 of 2001

Ground 19 alleged error in relation to the calculation of interest.

The appellants contend that the trial judge erred in the exercise of his discretion in ordering that both Mr Briggs and WRS should jointly and severally pay the respondent's costs of the proceedings after consolidation (ground 23).

58 Mr Lunt filed a notice of contention to the effect that the judgment against WRS could be sustained on the basis of the alternative claim made by Mr Lunt for reasonable remuneration.

59 The appellants submitted that the trial judge's finding that Mrs Briggs signed the consultancy agreement was erroneous because it was against the weight of the evidence. This submission has no merit.

60 The trial judge accepted the evidence of Mr Bond who testified that the signature looked like Mrs Briggs' signature. The other evidence in support of the trial judge's finding was overwhelming. Mrs Briggs at trial denied signing the document but when she was first shown the document in the District Court in 2003, she acknowledged that her signature appeared to be on the document. Mr Briggs asserted in evidence that the signature did not look 'anything like' Mrs Briggs' signature but he had testified on oath on two earlier occasions that it 'looks like my wife's signature' (in the District Court) and that it was 'the signature of my wife' (WAIRC). The financial statements of WRS recorded that there was a consultancy agreement between Mr Lunt and WRS and reflected the growing liability for consultancy fees. In addition, there was the powerful corroborative evidence of Mr Johnson and Mr McShane about the information and documents they were given by Mr Briggs in 1997. This evidence has been referred to earlier and it is not necessary to repeat it. The overwhelming weight of evidence supported the finding that Mrs Briggs signed the consultancy agreement. It was open to the trial judge to make the finding. Ground 1 must be dismissed.

61 These grounds allege that the trial judge erred in fact in finding that Mr Briggs acknowledged in the Western Australian Industrial Relations Commission that the consultancy agreement was 'valid and effective'. Before he gave evidence, Mr Briggs' solicitors had filed with the WAIRC a 'schedule to notice of answer' referring to the consultancy agreement as an 'alleged' consultancy agreement. On behalf of Mr Briggs it was submitted on this appeal that the consultancy agreement was only tendered in the WAIRC in order to deal with the jurisdictional issue as to whether Mr Lunt was an employee or not.

62 That is beside the point because Mr Briggs gave evidence on oath in those proceedings and tendered the consultancy agreement in order to establish that Mr Lunt was a consultant and not an employee. Mr Briggs did not contend that the document was a forgery as he claimed it was in this trial. He acknowledged that his wife's signature was on the document. The trial judge did not err in finding that Mr Briggs acknowledged in the WAIRC that the consultancy agreement was 'valid and effective'. Grounds 2 and 3 must be dismissed.

63 This ground raises two points. The first point alleges that the trial judge erred in law in failing to address in his reasons evidence afforded by exhibit 140 that Mrs Briggs' signature on the extension letter was identical to her signature on another document and failing to address Mr Gregory's expert evidence that it was impossible for two signatures to be the same. The second point relates to whether the finding that Mrs Briggs signed the extension letter was against the weight of evidence.

Ground 4 - the extension letter - whether the trial judge failed to address the issue

64 Exhibit 140 was a transparency showing that the signature of Mrs Briggs on the extension letter and on another earlier document were identical. Exhibit 140 was not referred to in Mr Horton's expert report which had been produced before trial. About a week before the trial, the transparency was produced by Mr Horton and given to Mr Gregory. This happened during a conference between the two experts (ts 632).

65 Mr Horton said that the other document on which he had found the signature identical to that of Mrs Briggs on the extension letter, was a document which became exhibit 10A. This exhibit, which was an agreement involving WRS and two other companies, was dated 21 May 1991 and it was tendered by Mr Lunt to show the genesis of his dealings with Mr Briggs (ts 278). Mr Horton did not give evidence that the signature on exhibit 10A was the signature of Mrs Briggs (see ts 647). Mrs Briggs was not asked any questions in examination-in-chief or in cross-examination as to whether her signature was on exhibit 10A. Mr Horton testified that the signature on exhibit 10A was 'absolutely identical' to the signature of Mrs Briggs on the extension letter. He said 'in other words it had been cut and pasted onto the 'extension letter' (ts 647).

66 Mr Gregory was called to give evidence by Mr Lunt. He gave evidence before Mr Horton. Mr Gregory was cross-examined by counsel for Mr Briggs and asked whether he had met with Mr Horton to discuss their respective reports. Mr Gregory agreed that he had, and explained that during the meeting Mr Horton produced the transparencies. Mr Gregory said:

I glanced at them as he passed them over the table when we were having coffee together. I was totally unaware that he had done anything in this regard (ts 633).

He said he went to Mr Lunt's solicitors' office and he was instructed in writing the next morning that he was to do no more with it and 'overnight those particular documents remained locked in my case and they are locked away in my office currently and I have not examined any of those extra documents Mr Horton gave me.' He agreed in cross-examination that to find identical signatures would raise a suspicion, and that the only way to get an identical signature would be by an automatic writing machine.

67 This first part of ground 4 alleges that the trial judge did not address this evidence. That is not correct. At [159] his Honour referred to Mr Horton's evidence stating that Mr Horton provided 'two transparencies of disputed signatures said to be those of Mrs Briggs which were used in his report. These are within exhibit 140.' His Honour continued [160] that:

These transparencies (exhibit 140) show an apparent identical congruence between the signature 'R Y Briggs' ... (the extension letter ...) and an authentic sample of Mrs Briggs' signature on [exhibit 10A] suggesting, so the witness opined, that in some way the authentic signature of Mrs Briggs on [exhibit 10A] had been lifted or copied, traced or transposed, onto the copy extension letter.

In cross-examination it had been put to Mr Briggs that he may have on occasions signed his wife's signature on various documents with the knowledge and confidence that she would have approved of him doing so. It was suggested that he may well have done this during the period when he was disqualified from acting as a company director. Generally speaking, Mr Briggs rejected these suggestions but he did acknowledge that, on occasions of relative informality, he may have signed his wife's signature but the implication was that he would not have done so for any important legal document. I do not consider that I can dismiss the possibility that the second style of Mrs Briggs' two apparent forms of signature may, in fact, be signatures in her name made by Mr Briggs any more than I can dismiss the possibility that Mrs Briggs did, on occasion, sign in different styles. These remain uncertainties which need to be accommodated when addressing other aspects of the evidence in this case.

69 His Honour at [168] said that he accepted the evidence of Mr Horton as trustworthy, referred to the combination of his evidence and Mr Gregory's evidence to the effect that there were two recognisable but different styles of signature of Mrs Briggs being the 'upright style' and the 'cursive style' and then at [169] made the following observation about the unsatisfactory state of the evidence concerning documents which were said to provide evidence of Mrs Briggs' genuine signatures:

[There was] an attempt to identify the source of the documents containing what were said to be authentic copies of Mrs Briggs' signature which had been supplied to Mr Gregory but this was not entirely successful. It was asserted that all such documents had come from the solicitors for the defendants but I am not satisfied that that was ever affirmatively established or conceded. But the fact that there are more than one or two examples of both forms of Mr Briggs' signature among the various documents which have been supplied is itself not entirely insignificant.

70 Mr Lunt was not cross-examined to suggest directly or indirectly that he was in any way responsible for copying and pasting the signature of Mrs Briggs onto the extension letter.

71 Echoing what the trial judge said at [167], counsel for Mr Lunt submitted on this appeal, in effect, that it was not beyond the bounds of possibility that Mr Briggs might have kept a copy of Mrs Briggs' signature readily available to use to avoid the inconvenience of taking the document home to have it signed (appeal ts 126). That is speculation, just as it is a matter of speculation for Mr Briggs to assert in his testimony (without any supporting evidence) that Mr Lunt cut and pasted the signature onto the document (ts 291). However, the trial judge did make the point that Mr Briggs admitted he sometimes signed documents in Mrs Briggs' name.

72 The trial judge also referred in his reasons to evidence which revealed that Mr Briggs and Mrs Briggs were willing to sway with the wind and acknowledge or deny the authenticity of Mrs Briggs' signature as the circumstances suited them and that Mr Briggs was prepared to produce other documents signed by Mr Briggs or Mrs Briggs as valid when it suited him and to deny their validity when it suited him. As a result of all of the above, it is not surprising that the trial judge decided that the expert evidence was not determinative. His Honour said as set out in [170], that the question about the authenticity of Mrs Briggs' signature was more likely to depend upon other evidence and circumstances than upon the handwriting analysis.

73 The other highly significant point is that even if Mrs Briggs' signature on the extension letter had been copied and pasted on to it, WRS had accepted in its accounts that consultancy fees continued to accrue after the expiry of the term in the consultancy agreement. This meant that the extension letter was recognised as a document binding WRS to continue to pay consultancy fees to Mr Lunt and that Mrs Briggs' signature, however it was affixed, was treated by Mr Briggs and WRS as her authorised mark. Finally, Mr Briggs' advice to Mr McShane that more consultancy fees were due to Mr Lunt after 30 June 1994 by WRS is consistent only with an acceptance that the extension letter was a validly executed document.

Ground 4 - the extension letter - whether the finding that Mrs Briggs signed the extension letter was against the weight of evidence

74 The second point in ground 4 is that the inferred finding that Mrs Briggs signed the extension letter was erroneous because it was against the weight of evidence. It is true that Mrs Briggs said in evidence-in-chief that she did not sign the letter but in cross-examination she said that it looked like her signature. There is no dispute that Mr Bond signed the letter. Mrs Briggs admitted it looked like her normal signature.

75 The other evidence bearing on the point was the acknowledgment in the WRS management accounts that WRS had a debt to Mr Lunt for consultancy fees for an amount which increased after the three year period referred to in the consultancy agreement. Finally, there was the powerful corroborative evidence of Mr Johnson and Mr McShane that Mr Briggs told them that the liability of WRS for consultancy fees continued after 30 June 1994, which could only have been so if the extension letter were authentic. Thus, the weight of evidence favoured the inferred finding by the trial judge that the extension letter was signed by Mrs Briggs. The finding was open on the evidence.

77 This ground asserts that the trial judge erred in fact in finding that Mr Briggs made admissions to Mr McShane to the effect that he (Mr Briggs) had assumed personal liability for indebtedness to WRS, such finding being alleged to be against the weight of evidence. This ground depended entirely upon the assertion that the trial judge should have believed the evidence of Mr Verheggen, Mr Langoulant and Mr Briggs that Max Resources had only ever proposed purchasing the assets of WRS and not the shares and that in consequence, there was no reason for Mr McShane and Mr Johnson to examine the liabilities of WRS when they came to Western Australia. That submission is entirely unsustainable.

78 The evidence which emerged in the cross-examination of Mr Briggs was that not only was there a proposal whereby Max Resources was to purchase WRS shares, but that WRS's solicitors had been instructed to draft an agreement to that effect late in 1996. Thus, Mr Briggs' own evidence corroborated Mr McShane's evidence that he and Mr Johnson were instructed to examine the proposal by Max to purchase WRS's shares. The weight of evidence favoured the finding, which was open on the evidence. The appellants submitted that the trial judge attached no probative value to evidence that Mr McShane was affected by a medical condition which affected his recollection of events. However, this was an assertion made by the appellants but Mr McShane denied his memory was affected and there was no reason why that denial should not have been accepted.

Ground 6 - the admissions by Mr Briggs to Mr Johnson

80 The appellants submit that the trial judge erred in fact in finding that Mr Briggs made admissions to Mr Johnson to the effect that Mr Briggs assumed personal liability for the indebtedness of WRS in that such a finding was against the weight of evidence. This ground was supported by the same submissions that were made in support of ground 5. The reasons given in respect to ground 5 apply save that there was no contention that Mr Johnson's memory was affected by health issues.

Ground 7 - Mr Briggs handed a copy of the novation letter to Mr Johnson

82 This ground asserts that the trial judge erred in fact in finding that Mr Briggs handed a copy of the novation letter to Mr Johnson, such finding being alleged to be against the weight of evidence. The appellant supports this ground by the same argument that was advanced in relation to grounds 5 and 6. The reasons given in relation to ground 5 justify the dismissal of this ground.

Ground 16 - the novation letter - Mr Briggs - CIV 1501 of 2001

84 By this ground the appellant asserts that the finding that Mr Briggs signed the novation letter was against the weight of evidence. Contrary to that assertion, the overwhelming weight of evidence supports the finding. Senior counsel for Mr Briggs acknowledged that if the evidence of Mr Johnson and Mr McShane should be accepted (ie that grounds 5, 6 and 7 should be dismissed) then the evidence of Mr Johnson and Mr McShane was powerful corroborative evidence in support of the trial judge's finding that Mr Briggs did sign the novation letter. The trial judge found that Mr Briggs was not a credible witness. Grounds 5, 6 and 7 have been dismissed. The evidence of Mr Johnson and Mr McShane corroborated the finding that Mr Briggs signed the novation letter. The weight of evidence supported the finding. The finding was open on the evidence.

Grounds 10, 11 and 12 - whether the signature of Mr Bond on the novation letter was 'genuine' - Mr Briggs - CIV 1501 of 2001

86 These grounds contend that the trial judge erred in finding that Mr Briggs' signature was 'authentic' (grounds 12 and 13) or that the trial judge erred in finding that there was 'no evidence to suggest that the signature of [Mr Briggs] on the [novation letter] was not authentic' (ground 11). However, the grounds attempt to support the contention indirectly by alleging that the trial judge erred in finding that Mr Bond signed the letter and that if Mr Bond did not do so, then the court should infer that likewise Mr Briggs did not do so. The logic of this argument is faulty but in any event, the proposition that Mr Bond did not sign is not a proposition Mr Briggs should be permitted to make for reasons given below.

87 The grounds assert that Mr Bond's signature was not 'genuine' (ground 10) or that Mr Bond's signature had been 'transposed' onto the novation letter (grounds 11 and 12). The assertions that the trial judge 'ought to have found that it was not' Mr Bond's signature or 'ought to have found that it was ... obvious from visual inspection that Mr Bond's signature ... was transposed onto the' novation letter or that the trial judge 'ought to have found ... that it was obvious from visual inspection that Mr Bond's signature ... was transposed' onto the novation letter do not assert error of law or fact. Those assertions merely express a wish for a preferred outcome.

88 In any event, the contention that Mr Bond's signature on the novation letter had been cut and pasted onto the document by persons unknown and that it was not genuine is not a contention that Mr Briggs is permitted to make. Mr Briggs at trial, sought to lead evidence from Mr Horton about the genuineness of Mr Bond's signature. There was an objection taken by counsel for Mr Lunt and his Honour ruled that the evidence could not be adduced because there was no such issue raised on the pleadings (ts 651). That ruling is not appealed against. It is not open to Mr Briggs to argue these grounds.

Grounds 13 and 14 - the evidence of Mr Verheggen and Mr Langoulant

90 Mr Briggs contends that the trial judge erred in fact in finding that Mr Verheggen and Mr Langoulant were not witnesses of credit because they were not challenged in cross-examination. This is in effect to advance a proposition that the evidence of a witness who is not cross-examined must be accepted by a trial judge. The proposition is not correct.

91 In any event, the assertion that Mr Verheggen and Mr Langoulant were not cross-examined is not correct. They were cross-examined. The only significant issue in relation to these witnesses was whether they were correct when they said that Max Resources never planned to purchase the shares of WRS for the reasons mentioned earlier. Mr Verheggen was cross-examined on that subject at ts 659 and Mr Langoulant was cross-examined about the subject at ts 720. In each case it was put to the witness that the initial negotiations involved Max Resources purchasing WRS shares. Both witnesses denied that, but it was later proven through cross-examination of Mr Briggs that in fact WRS's solicitors had been instructed to prepare an agreement which involved Max purchasing WRS's shares.

Ground 15 - Mr Briggs and his regard to financial statements

93 By this ground the appellant contends that the trial judge erred in fact in finding that it was 'inherently implausible' that Mr Briggs did not pay regard to the financial affairs of WRS, such finding being against the weight of evidence. Mr Briggs did testify that he did not read the WRS financial statements (ts 740), and therefore had not noticed the relevant aspects of the financial statements for 1991, 1992 and 1993 showing that Mr Lunt had a consultancy agreement and showing an increasing liability of WRS to Mr Lunt for consultancy fees. It was open to the trial judge to reject this evidence of Mr Briggs as implausible and the trial judge had good reasons for doing so. This is another example of Mr Briggs giving whatever evidence suited his purpose. For example, he testified that in 1995 he did read the financial statements and noticed the liability to Mr Lunt in the 1994 draft of the accounts of WRS. He testified that he called Mr Lunt in to demand that he remove the debt as a liability of WRS (ts 738). That evidence alone provided support for the trial judge's conclusion that Mr Briggs' claim that he had not read the earlier financial statements as 'inherently implausible'.

Ground 19 - interest - Mr Briggs - CIV 1501 of 2001

95 This ground only concerns the judgment against Mr Briggs in CIV 1501 of 2001. In the supplementary reasons concerning interest (Lunt v Briggs [2009] WASC 243 [7]) the trial judge said:

In the first action [Mr Lunt] established that [Mr Briggs] was indebted to him in the amount of $652,900 as at 30 June 1994.

I have considered that the most reliable finding which could be made on the evidence was that the aggregate of the invoices, namely $652,000, had accrued due and was acknowledged by WRS to have accrued due by 30 June 1994. That, therefore, is the starting date for the calculation of any interest in relation to the debt established in the first action.

97 At [40] his Honour then calculated interest in the action against Mr Briggs from 30 June 1994 to 18 May 2009, being interest for 14 years and 321 days and amounting to $462,366. The interest was awarded under s 32 of the Supreme Court Act 1935 (WA). Ground 19 reads:

1The learned trial judge erred in fact in finding at [7] Supplementary Reasons that [Mr Briggs] was indebted to Mr Lunt as at 30 June 1994 when on the Respondent's own case the [novation letter] (exhibit 34) was not signed until 20 June 1995.

98 There were no written submissions filed in support, but at the hearing of this appeal, counsel for Mr Briggs made the following submissions (appeal ts 1 December 2010, 172 - 174):

Ground 19 is a short point. ... The short point ... is that His Honour has allowed - established an indebtedness as at 30 June 1994 against Mr Briggs when, on the respondent's own case, it could only have been from 20 June 1995.

We are simply putting as a matter of simple proposition that if you are assuming an obligation from a certain date and the agreement does not expressly make you liable for interest prior to that date, then if you had paid that debt as at 20 June 1995 it would seem odd that you would be liable for interest on that sum from 30 June 1994, so that if, as put by the respondent, there is a liability from 20 June 1995, one can understand in consequence of that why there would be interest on that sum from 20 June 1995, but not an arrear [sic] date.

99 Mr Lunt filed no written submissions about the grounds. The oral submissions at the hearing of the appeal were as follows (appeal ts 2 December 2010, 151):

Our submission on that is that when one construes the [novation] letter properly Mr Briggs is assuming the liability that the company had as at 30 June 1994.

One can test it as simply as this: that if at that time the company had been sued it was liable for pre-judgment interest up until the date of 30 June 1994. Mr Briggs came along nearly a year later, takes over the debt, and now argues, 'no, no, my liability for interest should only be from the date when I assumed the debt,' but what he was assuming was all the liabilities of the company up till 30 June 94 and that, in our submission, includes the liability to pay pre-judgment interest.

Neither counsel made any reference to the provisions of s 32(1) of the Supreme Court Act 1935. Section 32(1) reads:

In any proceedings for the recovery of any money ... the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect.

100 A cause of action is the factual situation, the existence of which entitles one person to obtain from the court a remedy against another person: Morgan v Banning (1999) 20 WAR 474, 484. The factual situation, the existence of which entitled Mr Lunt to obtain judgment against Mr Briggs, required proof of the novation letter. Until that came into existence, no action could have been brought against Mr Briggs. The cause of action therefore accrued against Mr Briggs on 20 June 1995, not 30 June 1994. Accordingly, the trial judge did not have the power to award interest before 20 June 1995.

101 The submission made on behalf of Mr Lunt about the construction of the novation letter has no merit. The novation letter involved a promise by Mr Briggs to 'meet any claim by Lunt on WRS to make payment of the debt'. 'The debt' was defined in the letter as the sum of $652,900. Mr Briggs did not promise to pay 'the debt' plus interest which might have been awarded by the court under s 32 if WRS had been sued.

102 As a result, ground 19 must be upheld. Interest will have to be recalculated to reduce it by the amount of interest which the trial judge awarded between 30 June 1994 and 20 June 1995. Section 32(1) allows interest to be calculated until judgment. The sealed judgment was dated 31 August 2009 but the trial judge calculated interest only until 18 May 2009, which he said in his supplementary reasons was the date of judgment. The 18 May 2009 was the date on which reasons for judgment in Lunt v Briggs [2009] WASC 134 were delivered. Reasons for judgment are not the judgment.

103 Ground 19 should be upheld, the appeal allowed in part, and the judgment against Mr Briggs in CIV 1501 of 2001 set aside. In lieu there should be judgment for the amount of the principal of $517,900 and interest from 20 June 1995 at 6% per annum until the date of judgment, which was 31 August 2009. It is clear from the trial judge's supplementary reasons at [42] that he meant interest to run until judgment. The parties should be given the opportunity to check the accuracy of this calculation before judgment is entered.

Ground 17, 18 and 22 - the limitation defence pleaded by WRS - CIV 1974 of 2001

105 These grounds only concern the judgment against WRS in action CIV 1974 of 2001. WRS, in its written submission in relation to these grounds, in effect, allege error of law because of the failure of the trial judge to determine the issues relating to that part of the WRS defence which asserted that certain parts of Mr Lunt's claim against WRS were barred under the Limitation Act. Ground 22 also alleges error because a part of the amount claimed in the statement of claim was 'outside the scope of the writ'. That aspect will be considered later in these reasons. The limitation and related issues arose on the pleadings and the 'outside the scope of the writ' point as explained below. The pleadings have already been referred to but this more detailed account concentrates on the issues now under consideration.

106 The writ issued on 11 July 2001 was indorsed with a statement of claim. It pleaded that pursuant to the consultancy agreement, Mr Lunt rendered accounts (invoices) for consultancy fees. Particulars were given of 26 invoices for various amounts totalling $372,000. The dates of the invoices were particularised. The first was dated 29 July 1994 and the last was dated 20 December 1996. At some later date the statement of claim was amended to plead, in the alternative, that Mr Lunt was entitled to reasonable remuneration for the services he provided.

The amendments to the statement of claim in 2008

107 In 2008 Mr Lunt was granted leave to amend the statement of claim. At the hearing of the appeal the appellants provided the court with a copy of the amended statement of claim dated 3 April 2008 which states that it was filed 'pursuant to the order of Justice Newnes made on the 6th March 2008'. It particularised the 26 invoices which appeared in the original statement of claim but added to the list a further seven invoices, bringing the total of the invoices to $482,000. No transcript of that hearing before Newnes J (as his Honour then was) was provided to the court. No details were provided of dealings between the parties about the proposed amendments, no details were provided about any submissions which were made before Newnes J or whether the appellant opposed or consented to the amendments and no details were given of reasons, if any, which were given by Newnes J.

108 In par 9 of the defence, WRS pleaded that it 'denies [Mr Lunt] ever rendered invoices to [WRS]'. In par 15 of the defence, WRS pleaded that 'to the extent that Mr Lunt's causes of action accrued on or before 11 July 1995', being a date six years or more before the date of the commencement of the action, 'it is barred pursuant to section 38 of the Limitation Act'. Particulars of this defence were given stating that if the consultancy agreement were found to be binding, then by cl 3 of that agreement, Mr Lunt's cause of action in respect of each invoice accrued on the seventh day after the date of the invoice or, if that day was not a business day, on the first business day thereafter. The particulars further set out 12 of the invoices particularised in the original statement of claim showing that the date of accrual of the cause of action (ie the date seven days after the date of each invoice) occurred before 11 July 1995 and for that reason were barred under the Limitation Act.

109 In par 16 of the defence, WRS pleaded that in the amended statement of claim, causes of action outside the scope of the writ were pleaded. The particulars identified seven invoices which were referred to in the amended statement of claim but not in the original statement of claim indorsed on the writ.

110 By par 17 WRS pleaded in the alternative that in relation to those seven invoices, the causes of action accrued more than six years before the date of the amended statement of claim and were therefore 'time barred pursuant to section 38 of the Limitation Act'. By par 18 of the defence, WRS pleaded that to the extent that Mr Lunt's causes of action were founded on equitable principles or sought a remedy in equity, Mr Lunt was barred from seeking such a remedy by reason of laches. By par 19 of the defence, WRS pleaded that the WRS general ledger trial balance for the year ending 30 June 1995 did not make any reference to any liability of WRS to Mr Lunt, and that by certain letters in 1997 Mr Lunt wrote to WRS concerning creditors without mentioning Mr Lunt's claim. In par 20 WRS pleaded that by reason of the 'above' Mr Lunt was 'estopped from pursuing his claim'.

111 By par 10 Mr Lunt pleaded that WRS was estopped from relying upon the Limitation Act 'as [WRS] has made part payment pursuant to clause 3 of the Consultancy Agreement'. Particulars were given of certain payments made between 1994 and 1998. Other particulars were given of conduct which was said to give rise to the estoppel including conduct in the form of alleged promises by WRS to make payment by reason of which conduct Mr Lunt pleaded that he refrained from issuing proceedings. In par 13 Mr Lunt pleaded that in relation to par 18 of the defence, Mr Lunt 'kept working for [WRS] and accruing his entitlements which were periodically referred to in annual accounts up to the 30th June 1993, management accounts for 1994 and 1995 and was the subject of constant assurances of payment'. In par 14 Mr Lunt pleaded to par 19 of the defence that in the finalised management accounts of WRS the 'entitlement of the [respondent] ... is recorded as $199,646.00'.

112 In par 4 of the rejoinder, WRS denied that there was any estoppel as pleaded in par 10. As to the pleading of acknowledgment in par 14 of the reply, WRS pleaded that if there were any acknowledgment in the financial records then the entries in those records were errors.

BRIGGS -v- LUNT [No 3] [2011] WASCA 44 (22 February 2011)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (241 paragraphs)

BRIGGS -v- LUNT [No 3] [2011] WASCA 44 (22 February 2011)

(a) Mrs Briggs signed the consultancy agreement

(c) Mr Briggs signed the novation letter

Ground 4 - the extension letter - whether the trial judge failed to address the issue

Ground 4 - the extension letter - whether the finding that Mrs Briggs signed the extension letter was against the weight of evidence

Legislation Cited (2)

Cases Cited (1)