Cheung v Burness

AND: CAPITAL FINANCE AUSTRALIA LTD (ACN 069 663 136) First Respondent

PAUL ANDREW BURNESS AND MATTHEW JAMES JESS (AS TRUSTEES OF THE BANKRUPT ESTATE OF KT CHEUNG) Second Respondent

JUDGE: MOSHINSKY j DATE OF ORDER: 21 NOVEMBER 2016

1. The matter be listed for hearing on a date to be fixed for submissions on the form of orders to be made (including as to costs). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

AND: PAUL ANDREW BURNESS AND MATTHEW JAMES JESS (AS TRUSTEES OF THE BANKRUPT ESTATE OF KT CHEUNG) Respondent

JUDGE: MOSHINSKY J DATE OF ORDER: 21 NOVEMBER 2016

1. The matter be listed for hearing on a date to be fixed for submissions on the form of orders to be made (including as to costs). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 On or about 10 July 2004, a guarantee and indemnity dated 10 July 2004 (the guarantee) was purportedly signed by Ms KT Cheung (Ms Cheung) in favour of Capital Finance Australia Ltd (Capital Finance). The guarantee related to a term purchase agreement for a Mercedes-Benz motor vehicle entered into by a company controlled by Ms Cheung's then husband. Ms Cheung separated from her husband in 2004 or 2005. At the time of the hearing below he was serving a lengthy term of imprisonment for fraud. 2 On 24 September 2010, following substituted service of the court documents, Capital Finance obtained judgment against Ms Cheung in the Magistrates' Court of Victoria for approximately $34,000 (including interest and costs), based on failure to pay a debt due under the guarantee. Ms Cheung did not appear and judgment was entered in default of filing a defence. 3 Subsequently, the Official Receiver, at the request of Capital Finance, issued a bankruptcy notice to Ms Cheung, relying on the judgment debt. This was served by post. On 2 February 2011, Capital Finance served a creditor's petition on Ms Cheung, relying on failure to satisfy the bankruptcy notice. 4 On 17 February 2011, a sequestration order was made by a Registrar of the then Federal Magistrates Court of Australia (now the Federal Circuit Court of Australia) in respect of the estate of Ms Cheung. Ms Cheung did not appear. Mr Paul Burness and Mr Matthew Jess (the Trustees) were appointed trustees in bankruptcy of her estate. Evidence subsequently filed by the Trustees in the proceedings below indicates that, at the time the sequestration order was made, Ms Cheung had a surplus of assets over liabilities of approximately $424,000. 5 At the time of the sequestration order, Ms Cheung owned two properties, one in Notting Hill, Melbourne (the Notting Hill property), the other in Docklands, Melbourne (the Docklands property). Ms Cheung lives in the Docklands property with her child. In February 2012, the Trustees sold the Notting Hill property. 6 In 2013, Ms Cheung brought an application for a re-hearing in the Magistrates' Court of Victoria. That application was refused in February 2014. 7 In May 2014, the Trustees commenced a proceeding in the Federal Circuit Court seeking directions in relation to taking possession of the Docklands Property (the Directions Proceeding). In July 2014, Ms Cheung commenced a proceeding in the Federal Circuit Court seeking to annul the bankruptcy (the Annulment Proceeding). In February 2015, Ms Cheung issued an application for leave to bring an application for review of the sequestration order in the proceeding in which that order had originally been made. In substance, this was an application for an extension of time in which to seek review of the sequestration order (the Extension of Time Application). 8 A hearing which was in effect a hearing of preliminary questions took place in the Federal Circuit Court. The questions were: (a) whether time should be extended to permit Ms Cheung to bring the application for review of the sequestration order; and (b) whether, as Ms Cheung asserted, the guarantee from which her bankruptcy stemmed was in fact a forgery. Ms Cheung appeared for herself. Capital Finance and the Trustees were represented by counsel and solicitors. 9 The primary judge decided, in summary, that: (a) an extension of time should not be granted; and (b) the guarantee was executed by Ms Cheung and was not forged. 10 After the primary judge handed down his reasons, the matter was stood down for a short time to enable the parties to consider the appropriate orders in the proceedings. Capital Finance and the Trustees then made submissions on the orders to be made. Ms Cheung made no submissions in opposition to the orders proposed by Capital Finance and the Trustees. The primary judge made orders to the following effect: (a) In relation to the Extension of Time Application, that the application be dismissed. (b) In the Annulment Proceeding, that Ms Cheung's application for annulment of bankruptcy be dismissed. (c) In the Directions Proceeding, that Ms Cheung deliver up vacant possession of the Docklands Property to the Trustees (and associated orders). 11 Ms Cheung seeks an extension of time and leave to appeal in relation to the order described in (a) above and appeals from the orders described in (b) and (c) above. It was ordered that Ms Cheung's applications for an extension of time and leave to appeal be listed for hearing together with any appeal in the relevant proceeding. 12 My conclusions and reasons can be summarised as follows: (a) The applications for an extension of time and leave to appeal in relation to the order described in 10 above should be dismissed. No error is shown in the primary judge's conclusion in respect of the Extension of Time Application. The period of extension sought by Ms Cheung was a lengthy one (approximately four years). She was on notice of the ability to apply for review of the sequestration order early on, but did not issue such an application. She has not provided an adequate explanation for the delay. (b) The primary judge erred in his consideration of the question whether or not Ms Cheung signed the guarantee. Having proceeded (correctly) on the basis that the Court should 'go behind' the judgment of the Magistrates' Court of Victoria, the primary judge appears to have proceeded on the basis that it was for Ms Cheung to establish that her signature had been forged. However, the onus of proof rested on Capital Finance to establish that Ms Cheung owed a debt to it (and thus to establish that she signed the guarantee). Further, the primary judge did not refer to or engage with several material matters which suggested that Ms Cheung did not sign the guarantee. Accordingly, the finding that Ms Cheung signed the guarantee cannot stand. In place of that finding, I find that Capital Finance has not discharged the onus of proving that Ms Cheung signed the guarantee. 13 I will list the matter for hearing on a date to be fixed for submissions on the form of orders to be made (including as to costs).

Background facts 14 The following statement of the background facts is drawn primarily from the reasons of the primary judge (the Reasons). I have also drawn on some evidence in Part C of the Appeal Book (AB) in relation to matters which appear to be uncontentious. To assist the parties' consideration of these reasons, I have included references to the Reasons and the Appeal Book. References to the transcript (T) are to the transcript of the hearing before the primary judge. 15 Ms Cheung's previous name was Katie Truong (Reasons, [28]). In her evidence before the primary judge, Ms Cheung said that "KT", "Katie" and "Katherine" are pretty much the same name, and that "Truong", "Zhang", "Chang" and "Cheung" are all different spellings of the same surname, depending on whether one takes the Vietnamese or Chinese version (Reasons, [82]). 16 Ms Cheung initially studied three years of Computer Science at Monash University. She then transferred to complete an undergraduate degree majoring in Psychology at Monash University. This was followed by a postgraduate qualification in Psychology and a Masters of Psychology (Counselling). Her employment history included management at a number of retail stores (Reasons, [48]). 17 As noted above, on or about 10 July 2004, a guarantee and indemnity dated 10 July 2004 was purportedly signed by Ms Cheung in favour of Capital Finance (AB tab 4). The guarantor is named as "KT Cheung". The customer is named as LWY Holdings Pty Ltd, a company controlled by Ms Cheung's then husband. The document has a Capital Finance logo at the top of the first page and is expressed to be given to Capital Finance. It is a two-page, standard form document. It purports to be signed by KT Cheung in the presence of BJ Lazzaro (Mr Lazzaro). 18 Another document, which formed part of a suite of documents which included the guarantee, is a six-page business finance application (the Business Finance Application). (A copy of the six-page application is at AB tab 10, exhibit "PAD-3". A better copy of pages 5 and 6 of the application is at AB tab 15, Annexure E, item (A) 2.) The document has the date 10 July 2004 typed into a field which appears at the top of each page. The last two pages - pages 5 and 6 - relate to the guarantee to be given by Ms Cheung. A number of fields on these pages have been completed with details which, Ms Cheung contended before the primary judge, were incorrect. The application purports to be signed on page 6 by Ms Cheung and by Mr Lazzaro. The date alongside each signature is 19 June 2004, which curiously is earlier than the date which appears in the date field for the application at the top of each page (10 July 2004). Nor does it match the date on which the document was printed as indicated at the foot of each page (also 10 July 2004). Thus the document purports to have been signed on a date before the date on which it was printed. Further, it appears from the time at which each page was printed, as appearing in the footer on each page, that pages 1-4 and 6 were printed at 10.13 am on 10 July 2004, but page 5 was printed at 12.50 pm on that day. The reason why this page bears a different (and later) print time was not explained in the evidence. 19 In 2004 or 2005, Ms Cheung separated from her husband, Mr Lai (Reasons, [42], [145]). At the time of the hearing below, he was in jail for fraud serving a sentence in excess of eight years (Reasons, [73]). 20 On 2 February 2011, a creditor's petition was personally served on Ms Cheung (Reasons, [110]-[113]). The creditor's petition had been filed on 7 October 2010 by Capital Finance. The petition was based on a debt the subject of a judgment of the Magistrates' Court of Victoria dated 24 September 2010 for approximately $34,000. The debt arose from the guarantee (Reasons, [1]). 21 On 17 February 2011, Ms Cheung was made bankrupt by way of a sequestration order of a Registrar of the Federal Magistrates Court, and Mr Burness and Mr Jess (of the firm Worrells) were appointed as joint and several trustees of the bankrupt estate (Reasons, [12]). 22 As at 17 February 2011, Ms Cheung was the registered proprietor of the Notting Hill Property and the Docklands Property (Reasons, [13]). 23 On 22 February 2011, Mr Burness wrote to Ms Cheung informing her of her bankruptcy and requiring production of a statement of affairs (Reasons, [14]). 24 On 4 March 2011, Chiodo & Madafferi Solicitors (Chiodo & Madafferi) wrote on behalf of Ms Cheung to the Trustees (Reasons, [14]). The letter stated that Ms Cheung was wholly unaware of any claim, summons or debt which resulted in the bankruptcy, and further details were sought. The letter included the following statement: We understand our client is seeking the assistance of an accountant to complete the statement of affairs and will be in attendance as required for the interview on Friday 11 March 2011. 25 Ms Cheung attended an interview with members of the staff of Worrells. She said that she would lodge her statement of affairs on 18 March 2011 and disputed signing the guarantee which had led to the judgment debt and subsequent sequestration order (Reasons, [15]). 26 On 28 March 2011, Worrells provided Ms Cheung with a copy of the judgment obtained against her by Capital Finance, a term purchase agreement with LWY Holdings Pty Ltd dated 14 July 2004, and the guarantee (Reasons, [16]). (Although the Reasons at [16] refer to the guarantee and indemnity as being dated 19 July 2004, I assume that this should be 10 July 2004, which is the date the document at AB tab 4 bears.) 27 On 31 May 2011, Mr Burness wrote to Ms Cheung putting her on notice that, if she did not respond to the letter within 14 days, he intended to instruct solicitors to apply for transmission of the Notting Hill Property and the Docklands Property in favour of the bankrupt estate with a view to selling the same (Reasons, [17]). 28 On 31 May 2011, Chiodo & Madafferi (on behalf of Ms Cheung) wrote to Worrells (Reasons, [18]). The letter stated: A search of the company LWY Holdings Pty Ltd, which was undertaken by our client shows that Mr James Wong, was a director amongst other people, our client had no interest in the said company. … the signature that appears next to her name is not her handwriting nor is it her signature, nor does she have any knowledge of whom the witness may be and that she has never attended upon Capital Finance for the purpose of guaranteeing the Loan … Out client has never been in possession of the motor vehicle as alleged in the Statement of Claim, which was filed in the Magistrates' Court. We are in the process of preparing a draft Affidavit which subject to our clients instructions will be completed and filed with the Court in an application to set aside the Bankruptcy. We understand that we are required to make such an Application and then proceed to the Magistrates Court if successful and make application to have the judgment obtained in the Magistrates Court set aside. 29 On 11 July 2011, Mr Burness wrote to Chiodo & Madafferi requiring written confirmation and evidence that Ms Cheung was seeking to set aside the sequestration order. He noted that the transmission application would proceed in the event that no such application was made (Reasons, [19]). 30 On 12 July 2011, Ms Cheung wrote to Worrells (Reasons, [20]). Her letter stated: … It is my understanding that you (Worrells) have been in frequent communication with Chiodo & Madaff[e]ri Solicitors to come to an agreement to take the matter to the Magistrates court to have the bankruptcy annulled. I have agreed to put forward my two estates to carry this matter forward. I have however not agreed to cover your costs, as I am neither responsible nor liable for the work that you have carried out to date. I would suggest that you follow up with the reckless parties involved in the unjust and wrongful pursuit of my bankruptcy. 31 The letter went on to indicate a possible lack of confidence in Chiodo & Madafferi (Reasons, [21]). 32 Nothing of relevance was heard by the Trustees, and so, on 21 October 2011, the Trustees took transmission of the interest of Ms Cheung in the Notting Hill Property. As Ms Cheung was yet to file her statement of affairs, the Trustees were unable to assess whether realisation of the Docklands Property was necessary at that time (Reasons, [22]). 33 On 10 December 2011, the Notting Hill Property was sold at auction for $457,500 (Reasons, [23]). 34 On 6 February 2012, Ms Cheung emailed Worrells. In the email she complained about the conduct of the Trustees and repeated that she did not sign the relevant documents which had given rise to her difficulties (Reasons, [24]). 35 On 7 February 2012, Mr Burness wrote to Ms Cheung (copied to Chiodo & Madafferi). The letter indicated that further assets needed to be realised to pay out Ms Cheung's debts and reminded Ms Cheung to file her statement of affairs (Reasons, [25]). 36 On 17 February 2012, Ms Cheung attended an interview with Mr Burness and Mr Matthew Kucianski of Worrells (Reasons, [26]). 37 On 20 February 2012, Mr Burness wrote to Ms Cheung (Reasons, [26]). The letter stated: … (iii.) You advised our office that you disputed the validity of the bankruptcy order on a number of potential grounds, including but not limited to: false affidavits being filed in the proceedings, potential fraudulent signing of documents and the non service of certain court documents. You were advised by the trustee that the onus is on you to bring an application before the court to have the validity of the order determined, as you will appreciate you have provided no evidence to this office of those matters; … (v.) You were advised that time is of the essence if you are to be making an application to contest the validity of the bankruptcy order; (vi.) You were made aware that costs in the bankruptcy would continue to accrue until all creditors were paid out in full, or until such time as the court annuls or sets aside the bankruptcy. You are again made aware therefore that time is of the essence if you are to be making an application to the court to contest the validity of the bankruptcy order; (vii.) You advised our office that you would be immediately seeking new legal representation, having asked Chiodo & Madaff[e]ri Solicitors to cease acting on your behalf. You noted that our office would hear from your new legal representatives by Tuesday 21 February 2012. (Emphasis in original.) 38 Ms Cheung sent a reply the same day, disputing that the points raised in Mr Burness's letter were explained or highlighted to her (Reasons, [27]). 39 Thereafter, Ms Cheung sought release of funds to obtain legal representation (Reasons, [28]). 40 On 22 March 2012, Mr Burness emailed Ms Cheung stating that he was unable to consider her request for funds until she furnished a complete statement of affairs. Ms Cheung provided responses, which the primary judge described as unhelpful, to the request for the provision of the statement of affairs (Reasons, [29]). 41 On 16 April 2012, Mr Burness wrote to Ms Cheung giving her 28 days to prove that she had filed an application to set aside her bankruptcy and stating that he had yet to receive her statement of affairs. This led to a further exchange of emails in which Ms Cheung made complaints against Mr Burness, which Mr Burness denied (Reasons, [30]). 42 On 18 May 2012, Ms Cheung sent a further email to Mr Burness stating that she was in the process of seeking alternative legal representation and that they would be in contact in due course (Reasons, [31]). 43 On 21 May 2012, Ms Cheung sent an email requesting court documentation regarding her bankruptcy, to which Mr Kucianski of Worrells replied on 31 May 2012. Ms Cheung responded with four further emails stating, among other things, that she wished to report Capital Finance for fraud (Reasons, [32]). 44 Thereafter, Mr Burness followed up with Capital Finance the question of fraud and was advised that the signature on the relevant document appeared to be similar to that of a driver's licence copy held by Capital Finance (Reasons, [33]). The response from Capital Finance relevantly stated: … the first reference to a suggestion of fraud was when our solicitors informed us on 2 June 2011 that M/s Cheung had written to yourselves to advise same. As we did not hear anything further and also that the signature on the guarantee appeared similar to the copy of a driver's licence we held, no further investigation took place. Not until some twelve months later on 4 June 2012 did we have a conversation with M/s Cheung in which she again raised the suggestion of fraud. On the 4 October 2009 we engaged a mercantile to conduct a field call to M/s Cheung's address. The agent proved successful wherein the customer acknowledged the debt and reported as follows "At the time of attendance our agent interviewed a female occupant who identified herself as your debtor. The debtor confirmed her residence at the given address. The debtor advised that she is employed on a full time basis but would not supply further details. The debtor stated that she is aware of the debt but she refused to enter into a payment plan at this time." Although we have not engaged a handwriting expert it is our opinion that the signatures are that of M/s Cheung on the basis that the signatures on the driver's licence and the guarantee appear to be similar enough not to be questioned and also that no objection had been raised regarding the signatures, despite acknowledgment of the contract in the intervening period, until some seven years after the contract had been signed. 45 On 22 August 2012, Mr Burness wrote to Ms Cheung giving her 21 days to file her application for a review of the sequestration order and further requesting that she file a statement of affairs (Reasons, [34]). 46 On 5 March 2013, Ms Cheung signed her statement of affairs. The statement of affairs annexed a draft affidavit of Ms Cheung. The draft affidavit set out a basis upon which one might infer that any cars the subject of legal proceedings were owned by her former husband (Reasons, [34]). 47 Between May and August 2013, Mr Burness engaged a handwriting expert to examine Ms Cheung's signature on the Capital Finance documentation. However, the handwriting expert was not able to arrive at a conclusion due to insufficient signature specimens (Reasons, [35]; Jess affidavit (AB tab 8) at [44]). 48 On 17 September 2013, Mr Burness wrote to Ms Cheung to advise her of his decision to admit the claim of Capital Finance in her bankruptcy. In the letter, Mr Burness also advised Ms Cheung that she was entitled to apply to review his decision to admit the claim (Reasons, [35]; Jess affidavit (AB tab 8) at [45]). 49 On 16 December 2013, Ms Cheung issued an application for re-hearing in the Magistrates' Court of Victoria in respect of the proceeding that had given rise to the judgment against her. In relation to her affidavit in support of the application, the following matters were noted by the primary judge (Reasons, [39]-[43]): (a) Ms Cheung stated that she was never served with any documents in relation to the Magistrates' Court of Victoria proceeding and that she was not served with the bankruptcy notice or creditor's petition prior to the sequestration order being made. (b) Ms Cheung stated at paragraph 18 of the affidavit: I lost 11 months time while engaged with Chiodo and Madafferi Solicitors as they were engaged by Mr Lai. The passing of 11 months significantly hindered my ability to challenge the Default Judgment. (c) Ms Cheung stated that the guarantee related to the lease of a vehicle for the use of her former husband, Mr Lai. Ms Cheung noted various errors and inconsistencies in the guarantee form and noted that the copy of the driver's licence relied upon was a photocopy or faxed copy. The affidavit made clear that fraud was alleged. (d) The affidavit annexed an affidavit of Mr Lai sworn 3 October 2013. In that affidavit he stated that he was the former husband of Ms Cheung and that the marriage failed in 2004. Mr Lai deposed: With Regards to the car leases taken out through Capital Finances, and Mercedes I am quite certain that she did not co-sign the guarantor. I have no reason to believe that she even knew there was a lease taken out in her names. I would also like to assert that KT never had anything to do with the running of either company that I was a director. I am prepared to stand up in any court again to say what I believe are the facts. (e) The affidavit of Ms Cheung also annexed an affidavit of Mr Lai's business partner, Richard Clinton John King, to the same effect as Mr Lai's affidavit. 50 In opposition to the re-hearing application, Capital Finance relied on an affidavit of Philip Andrew Duxbury. That affidavit included a report from Stoneink Pty Ltd (a debt collection agency) following an interview with Ms Cheung on 4 October 2009. This interview was described in Capital Finance's response, set out in [44] above (Reasons, [44]). 51 On 3 February 2014, the application for re-hearing was heard by the Magistrates' Court of Victoria. The application was dismissed (Reasons, [45]).

Procedural background 52 On 12 May 2014, the Trustees commenced the Directions Proceeding by which they sought directions in relation to taking possession of the Docklands Property (Federal Circuit Court proceeding MLG 881/2014). The Trustees were (jointly) the applicant to that proceeding, and Ms Cheung was the respondent. 53 On 16 July 2014, Ms Cheung commenced the Annulment Proceeding (Federal Circuit Court proceeding MLG 1426/2014). Ms Cheung was the applicant, the Trustees were jointly the first respondent and Capital Finance was the second respondent. 54 On 23 January 2015, Ms Cheung issued the Extension of Time Application in the proceeding in which the sequestration order had been made (Federal Circuit Court proceeding MLG 1701/2010). This application comprised an application in a case, seeking leave to bring an application for review of the sequestration order. The parties to the original proceeding were Capital Finance as applicant and Ms Cheung as respondent. The parties to the Extension of Time Application were Ms Cheung as applicant and Capital Finance and the Trustees as respondents.

The judgment below 55 A hearing took place before the primary judge over three days. As the primary judge noted in the Reasons (at [6]) another judge of the Federal Circuit Court had directed that the matters be heard together, but that a preliminary hearing take place to determine two questions. The primary judge summarised the preliminary questions in his Reasons at [6]: They are whether time should be extended to permit Ms Cheung to bring her Application to set aside her bankruptcy and whether, as Ms Cheung strongly asserts, the guarantee from which all this stems, already referred to, was in fact a forgery. 56 The primary judge set out his conclusions at [8] of the Reasons. His Honour concluded: For the reasons that follow, I am positively satisfied that the original guarantee was indeed executed by Ms Cheung and was not forged. I also decline the Application to extend time within which to allow the Application to be brought. 57 The primary judge dealt with background factual matters at [11]-[46] of the Reasons. I have drawn on this part of the Reasons in the section on background facts set out above. 58 His Honour then considered the evidence of Ms Cheung (Reasons, [47]-[85]) and the evidence of Philip Duxbury (Reasons, [86]-[88]). His Honour then considered the evidence of Mr Ganas, a handwriting expert (from QD Forensics) engaged by the Trustee pursuant to a direction of the Court (Reasons, [89]-[95]), and the evidence of Mr Holland, a handwriting expert engaged by Capital Finance (Reasons, [96]-[103]). Next, his Honour considered the evidence of Mr Lazzaro, who worked on-site at the Mercedes-Benz Berwick dealership (Reasons, [104]-[109]). Mr Lazzaro's signature appears on the Capital Finance documents, including as witness on the guarantee. The primary judge then considered Mr Lowe's evidence, relating to service of the creditor's petition (Reasons, [110]-[113]) and the evidence of Mr Burness (Reasons, [114]-[119]). His Honour made findings as to the credit of witnesses at [120]-[128] of the Reasons. He considered Ms Cheung to be a poor witness and stated that, where there was a conflict between the evidence of Ms Cheung and the witnesses called by the other parties, he preferred the evidence of the other parties (Reasons, [128]). 59 The primary judge's findings of fact, and conclusions, are set out in [129]-[163] of the Reasons. The primary judge stated at [145]-[147]: 145. I have already said what I have had to say about Ms Cheung's credit. By now, she may well believe the story she has been saying for so many years. It must be remembered that her response has been, since a relatively early stage, to the effect that the original Guarantee was a forgery. That document was executed at a time when it is not clear whether or not she was still in a relationship with her former husband, Mr Lai. I pay regard to the fact that he is undergoing an extensive period of imprisonment, apparently for fraud. 146. Mr Lai, of course (and Mr King), were not called to give evidence, and I give their affidavits no weight accordingly. It should be noted, moreover, that although Ms Cheung has asserted forgery from an early stage, she did not do so right from the beginning. It took her some time before this important assertion was made. 147. A finding such as this is one to which s.140 of the Evidence Act applies. It is not to be made lightly. Having regard, however, to the evidence as a whole, including the evidence of Mr Holland and, indeed, the evidence of Ms Cheung herself, I have no doubt that Ms Cheung did indeed execute the original Guarantee. The form may well have had errors, but as Mr Burness pointed out, such are not uncommon. 60 Having concluded that the Extension of Time Application should be dismissed, his Honour then noted that there were two further proceedings underway, namely the Directions Proceeding and the Annulment Proceeding (Reasons, [163]-[164]). His Honour stated that he would give the parties an opportunity to consider the reasons and then hear from them both as to the future conduct of the matter and as to costs (Reasons, [167]). I was informed by counsel for Capital Finance that, after the primary judge handed down his reasons, the matter was stood down for a short time to enable the parties to consider the appropriate orders in the proceedings. Capital Finance and the Trustees then made submissions on the orders to be made. Ms Cheung made no submissions in opposition to the orders proposed by Capital Finance and the Trustees. The primary judge made orders to the following effect: (a) In relation to the Extension of Time Application, that the application be dismissed. (b) In the Annulment Proceeding, that Ms Cheung's application for annulment of bankruptcy be dismissed. (c) In the Directions Proceeding, that Ms Cheung deliver-up vacant possession of the Docklands Property to the Trustees (and associated orders).

The applications and the appeals 61 Ms Cheung filed a notice of appeal in respect of each of the three proceedings below. Initially, Ms Cheung did not file an application for leave to appeal in respect of the dismissal of the Extension of Time Application. An application for leave to appeal was necessary as that judgment was interlocutory. Following a case management hearing, Ms Cheung filed applications for an extension of time and leave to appeal in respect of the dismissal of the Extension of Time Application. 62 The three proceedings in this Court are as follows: (a) Proceeding VID 255/2016, which is the appeal in relation to the Annulment Proceeding (MLG 1426/2014 below); (b) Proceeding VID 256/2016, in which Ms Cheung filed her applications for an extension of time and leave to appeal in respect of the dismissal of the Extension of Time Application (MLG 1701/2010 below); and (c) Proceeding VID 257/2016, which is the appeal in relation to the Directions Proceeding (MLG 881/2014 below). 63 An order was made for the applications for extension of time and leave to appeal to be listed for hearing together with any appeal in the relevant proceeding. All three proceedings were listed for hearing together. 64 In circumstances where Ms Cheung was representing herself, and the notices of appeal did not set out her grounds of appeal clearly, an order was made for her to file a summary of her submissions, not to exceed 10 pages, and for this to stand as her notice of appeal (or draft notice of appeal) in the proceedings. I set out this document in full: Worrells Legal Financial Control Duress 1. Worrells Trustee's had has legal and financial control and repeatedly exerted 'illegitimate' pressure to pay out claims that I did not owe. The collective actions and inactions, and inducement are deemed to be Duress as defined in the Competition and Consumer Act (Cth) (previously the Trade Practices Act 1974 (Cth)). 2. Worrell's consistent threats to sell the Nottinghill and Docklands property and be without 'home' is defined as Coercion Section 50(1). Worrells applied 'economic' and legal duress, by refusing legal avenues and funds to pressure into complying with the unlawful claims. 3. The actions of both Capital and the Trustees unfair tactics can only be seen as unconscionable (ACL Section 21), Colluding. It's motives and benefits, qualifies as Unconstitutional of Unjust Enrichment. For a claim of approximately $30,000, the Trustees are attempting to claim the value of two properties. Trustees Fiduciary Of The Court: Duty To Act 4. At each step, leading to today, Worrells Trustees also had the option to contest and dismiss all four contracts', including Capital's claim. The question then arises did Worrells' collude in the manner they handled the case and deliberately mislead the courts.. Both Capital and Worrell's had the competency to conclude the matter in a timely manner at each contact and failed to do so. As such the burden of costs can only be that of Capital and Worrells.. 5. Worrell's Trustees were made aware of the fraudulent nature of the contract at first contact and repeatedly informed through the years, it is the Trustees that bear the risk of theirs costs. Pattison V Hadjimouratis 35. 6. The Trustees failed to understand their role as fiduciary of the courts in Ex Parte James. What actions would a Court or Judge take. Worrells, with a laypersons' common sense, as professional accountant, legally bound by common law, and that of a trustee representative of the courts realize and acted on the matter with much more effectiveness and efficiency to an unjust circumstance of an INVALID and UNLAWFUL contract. 7. Each year 2011, 2012, 2013, 2014, 2015, 2016, year after year.. i. Requests for the Trustees to take the matter to court for directions were refused. ii. Requests for funds to pay for legal representations to carry the matter forward were refused, hindering justice and delaying the matter further. 8. Not a possibility, since the i. Trustees refuse to release funds, ii. I was unable to obtain a loan, 'bankrupt', iii. If I had that sum of money the Trustees would seize and hold control. 10. Mr Burness under oath concedes that frequent requests were made for funds to access legal representation of $10 000 - $20 0000 and were denied each and every time, year after year. Mr Burness however utilize the monies out of self interest for their costs and made an allowance of $65 000 for their own legal representations. 11. Worrells made false statements regarding undertaking a Forensics report. There was no report but an initial preliminary look. 12. The four claims and contracts in Worrell's control are fraudulent: i. the BMW contract had incorrect licence, name, address, signature. BMW recognised it's falsity and withdrew it's claim. ii. The QD found signatures on the first Mercedes Benz contract to be non genuine forged. Contract Dimissed. iii. The QD found the signatures on the second Mercedes Benz contract to be non genuine forged. Contract Dismissed. iv. The QD found the signatures on the Capital contract to be non genuine forged. 14. Worrells accepted all four fraudulent claims and failed to take any effective action. 15. Worrells made the false assertion that notification was sent out to the sale of the Nottinghill property. Worrells' has failed to provide any documentation to prove such an assertion. 16. The Trustees actions are a Deliberate Obstruction Justice, of my Civil Rights, and Constitutional Rights for Vested Self Interest and collusion.. Capital 17. There was Error in considering Facts by omitting documentation and application of logic in considering evidence. 18. As documented in Capital's records, 23rd Septemeber 2010, the only contact made was a brief phone call. Capital was aware that it was an Ex and that I did not know or have anything to do with the transaction of the vehicle. 19. Capital had knowledge of the legal issues and falsity of it's contract but took deliberate contradictory actions that can only be deemed to be misleading and deceptive, in accordance to Competition and Consumer Act 2010 (Cth) Section 18. 20. Capital CEO Bernie Campbell were given facts regarding the contract including their own documents demonstrating that Capital did not have a legal claim. May 9th, 2013 Capital's CEO made the deliberate choice to drag the matter out by failing to remedy the situation. Contact 21. Capital's Servers unlawfully entered private property and made false statements that they made contact, i. at times when I was not home. ii. to the wrong persons HIM instead of HER. iii. at the wrong address of 903 instead of 901, iv. on the wrong number 0400 140299 instead of 0400 330309 21. Capital's Server Mr Lowe unlawfully entered private property and was a physical threat as he lay in wait, stalking. Mr Lowe made false statements that he served the petition. 22. Mr Lowe alleges he iniitially stood behind the carpark door and served paperwork through the car window, then it fell to the lower level carpark. Paper can not penetrate through solid concrete. It is also claimed that Mr Lowe saw me pick it up at the lower level carpark. Mr Lowe can not out run a car, no man can out run a car. 23. To accept Mr Lowe's account, one would have to accept that i. A person can stand behind a door without being hit. ii. Paper can penetrate through closed car windows iii. Paper can penetrate through steel reinforced concrete floors iv. It is humanly possible to out run a car. Forensics 24. With the Signature on Capital's contract: i. Worrell's Preliminary Forensics indicated Differences. ii. Court Ordered Forensics. Report found signature Forged. iii. Capital PAID for FALSE report Mr Holland iv. Capital's forensics Mr Holland under oath testified Differences. 25. If S.140 of the Evidence Act applies. One can only conclude that the signatures could not be proven to be mine. The onus and burden of proof lies with Capital. 26. There is a pattern of behaviour and conduct in the manner the car dealership processes it's paper work, deliberately typing in false details as admitted to Police, "to get it over the line". Error in the Application of Law 27. The Sequestration Order of Registrar Burns on 17 February 2011 failed the legal requirements for it's approval. 28. Failing the legal requirements of Contract Law of Acceptance for it to be legally binding. 29. The Petition Debt was not proved, but was rubber stamped and approved on 17th February 2011. The courts was misled on a false path. 30. The debt was out of time. Contract was in 2004 and judgement in 2011. 7 years after contract date. Limitations of Action Act 1958. 31. No Application for Leave was not applied for by Capital. 32. No Application of Leave was not approved for Capital's contract. 33. This implies that Capital was aware of the questionable authenticity of the contract from onset. By Capital's own admission in Court, and paperwork as verified by Mr Duxbury on December 2nd and 4th 2015, Capital was aware that the contract was void at contractual date of 2004. 34. Capital's contract lack any supporting documentation, i. Capital has only a FAXED photocopied licence with a fax line down the page of photocopied licence. ii. There was No Solicitors Certificate or other identifications to corroborate the identity or contract. Witness to Signature 35. Mr Ben Lazzaro's admission he and I KT Cheung have never met. If we have not met, I can not possibly be present for the signing of the Contract nor Mr Lazzaro be present to witness. 36. If there is no witness to the contract, there can be no verification to contractual acceptance. Competition and Consumer Act 2010. Australian Consumer (Cth) Law. 37. The terms of witness was not has not been fulfilled. As such the 'Acceptance' to form a LEGAL contract has NOT been satisfied. Void 38. Most fundamental is the first order, overriding any other. The Capital Contract is VOID ab initio. The contract has no legal effect. It is a document void of no legal effect whatsoever an absolute nullity - the law, the courts should treat it had it never existed or happened. The Bankruptcy is reliant on a non legal binding contract, and as such the Bankruptcy as it is with the VOID contract also void, and should be treated as required by Law "to be treated as invalid from the outset". The Void contract has no legal force, "to support the purpose for which it was intended". The Bankruptcy has no legal force, "to support the purpose for which it was intended." (Errors and emphasis in original.) 65 It will not be necessary to address all of the matters raised in this summary. Plainly, some of the matters which Ms Cheung seeks to raise are outside the scope of the proceedings below and not matters that can be raised on the applications or appeals to this Court.

Whether the primary judge erred in refusing to extend time 66 Ms Cheung applies for an extension of time and leave to appeal in relation to the primary judge's decision to dismiss the Extension of Time Application. One of the issues to be considered on the present applications is the merits of Ms Cheung's challenge to the primary judge's decision in this regard. It will be convenient to commence with consideration of this issue. 67 Ms Cheung contends that the primary judge erred in dismissing her application for an extension of time in which to bring an application for review of the sequestration order. The main focus of Ms Cheung's submissions before me was her challenge to the correctness of the primary judge's conclusion that she signed the guarantee and her signature was not forged. Although I deal with that issue separately below, it is also relevant to the applications relating to the dismissal of the Extension of Time Application, as the primary judge needed to consider (and did consider) the merits of the application for review of the sequestration order. 68 In my view, no error is shown in the primary judge's conclusion in respect of the Extension of Time Application. His Honour correctly identified the relevant principles, referring to Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 334. See also Grundy v Wattyl Australia Pty Ltd [2002] FCA 1480 at [5]-[10] per Downes J; Sopikiotis v Owners Corporation RP017740 (2013) 211 FCR 321 at [41]-[42] per Kenny J. His Honour correctly applied the relevant principles. In particular: (a) The primary judge referred to the length of time of the extension sought, noting that the application was three years and 300 or so days out of time. An application for review should have been made within 21 days of the sequestration order (17 February 2011); the application in a case (effectively seeking an extension of time) was not made until 23 January 2015. As the primary judge said, "[t]he time extension sought by Ms Cheung is enormous" (Reasons, [154]). (b) The primary judge was justified in concluding that there was no satisfactory explanation for the delay (Reasons, [156]). Ms Cheung was put on notice at a very early stage of her bankruptcy of the procedural options that were open to her to challenge the bankruptcy. She did not provide any adequate explanation as to why she did not bring an application for review much earlier. One of the main arguments she advanced before the primary judge was that, apart from the initial period after the making of the sequestration order, when she was represented by Chiodo & Madafferi, she did not have legal representation. She pointed to her unsuccessful attempts to obtain funding for legal representation from the Trustee, as well as her other attempts to obtain legal representation. The primary judge evidently did not consider this to be an adequate explanation in the circumstances. I think it was open to his Honour to reach this conclusion. Ultimately, Ms Cheung issued the application in a case without legal representation. Although she did not have legal representation for much of the relevant period, she was clearly on notice of the procedural options available to her to challenge the bankruptcy. (c) The primary judge considered the prejudice to any other parties if an extension of time were granted, and considered that there would be "inordinate prejudice" to the Trustees and Capital Finance if the matter were allowed to proceed (Reasons, [157]). To some extent, at least, his Honour's conclusions on this factor reflect his conclusion in relation to the forgery issue. It is unnecessary for present purposes to reach a concluded view of whether prejudice was established because, even without this factor, the factors bearing on the exercise of the discretion referred to above pointed strongly to refusal of an extension of time. (d) The primary judge considered the prospects of success of the underlying application (namely, the application for review of the sequestration order). His Honour stated that, given that he had "roundly rejected" the central proposition on which Ms Cheung relied, namely that the guarantee was a forgery, the application for review could have no prospect of success (Reasons, [158]). The primary judge's conclusion on this factor reflected his conclusion in relation to the forgery issue. I discuss this issue in the next section of the reasons, below. Although I come to the conclusion that his Honour erred in relation to this issue, I think the matters discussed in (a) and (b) above point so strongly against the exercise of the discretion to extend time, that my conclusion below in relation to the forgery issue does not provide a sufficient basis to disturb his Honour's conclusion in relation to the Extension of Time Application. 69 For these reasons, I reject Ms Cheung's submissions in relation to the primary judge's dismissal of the Extension of Time Application. It follows that the applications for an extension of time and leave to appeal should be dismissed.

The conclusion the guarantee was executed by Ms Cheung and was not forged 70 Ms Cheung challenges the primary judge's finding that the guarantee was executed by Ms Cheung and was not forged (Reasons, [8]). This issue arises in Ms Cheung's appeals in proceedings VID 255/2016 and VID 257/2016, as well as in her applications for an extension of time and leave to appeal in VID 256/2016. In each of VID 255/2016 and VID 257/2016, Ms Cheung appeals from a judgment of the Federal Circuit Court to this Court under s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth). 71 An appeal from a judgment of the Federal Circuit Court to this Court under s 24(1)(d) of the Federal Court of Australia Act is not conducted de novo, nor is it an appeal in the strict sense. Like appeals from judgments of single judges of this Court, it is an appeal by way of rehearing: Zoltaszek v Downer EDI Engineering Pty Ltd [2011] FCA 744 at [3] per Flick J; RailPro Services Pty Ltd v Flavel [2015] FCA 504 at [77] per Perry J. 72 On an appeal by way of rehearing, the appellate court's powers are exercisable only if the appellant can demonstrate error of fact or law in the judgment under appeal: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at [22]-[25] per Allsop J (as his Honour then was), Drummond and Mansfield JJ agreeing. 73 In Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550, French CJ, Bell, Keane, Nettle and Gordon JJ said at [43]: A court of appeal conducting an appeal by way of rehearing is bound to conduct a "real review" of the evidence given at first instance and of the judge's reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings. But a court of appeal should not interfere with a judge's findings of fact unless they are demonstrated to be wrong by "incontrovertible facts or uncontested testimony", or they are "glaringly improbable" or "contrary to compelling inferences". (Footnotes omitted.) In the footnotes to the above passage, the High Court referred to Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479-481 per Deane and Dawson JJ; Fox v Percy (2003) 214 CLR 118 at [25], [28] and [29] per Gleeson CJ, Gummow and Kirby JJ; and Miller & Associates Insurance Pty Ltd (ACN 089 245 465) v BMW Australia Finance Ltd (ACN 007 101 715) (2010) 241 CLR 357 at [76] per Heydon, Crennan and Bell JJ. 74 In Devries, Deane and Dawson JJ stated at 479-480: An appellate court which is entrusted with jurisdiction to entertain an appeal by way of rehearing from the decision of a trial judge on questions of fact must set aside a challenged finding of fact made by the trial judge which is shown to be wrong. When such a finding is wholly or partly based on the trial judge's assessment of the trustworthiness of witnesses who have given oral testimony, allowance must be made for the advantage which the trial judge has enjoyed in seeing and hearing the witnesses give their evidence. The "value and importance" of that advantage "will vary according to the class of case, and, … [the circumstances of] the individual case". If the challenged finding is affected by identified error of principle or demonstrated mistake or misapprehension about relevant facts, the advantage may, depending on the circumstances, be of little significance or even irrelevant. If the finding is unaffected by such error or mistake, it will be necessary for the appellate court to assess the extent to which it was based on the trial judge's conclusions about the credibility of witnesses and the extent to which those conclusions were themselves based on observation of the witnesses as they gave their evidence as distinct from a consideration of the content of their evidence. Judges are increasingly aware of their own limitations and of the fact that, in a courtroom, the habitual liar may be confident and plausible, and the conscientious truthful witness may be hesitant and uncertain. In that context, it is relevant to note that the cases in which findings of fact and assessments of credibility are, to a significant extent, based on observation of demeanour have possibly become, if they have not always been, the exception rather than the rule. Indeed, as Kirby A.C.J. pointed out in Galea v Galea, in many cases today, judges at first instance expressly "disclaim the resolution of factual disputes by reference to witness demeanour". However, this does not deny that in many cases a trial judge's observation of the demeanour of witnesses as they give their evidence legitimately plays a significant and even decisive part in assessing credibility and in making factual findings. … (Footnotes omitted.) 75 In Fox v Percy, Gleeson CJ, Gummow and Kirby JJ stated at [25], [28]-[29]: 25 Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of "weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect". In Warren v Coombes [(1979) 142 CLR 531 at 551], the majority of this Court reiterated the rule that: "[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it." As this Court there said, that approach was "not only sound in law, but beneficial in … operation". … 28 Over more than a century, this Court, and courts like it, have given instruction on how to resolve the dichotomy between the foregoing appellate obligations and appellate restraint. From time to time, by reference to considerations particular to each case, different emphasis appears in such reasons. However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings. 29 That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being "incontrovertible", an appellate conclusion may be reached that the decision at trial is "glaringly improbable" or "contrary to compelling inferences" in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must "not shrink from giving effect to" its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process. (Footnotes omitted.) 76 Capital Finance's submissions on the challenge to the primary judge's finding that the guarantee was executed by Ms Cheung and was not forged can be summarised as follows: (a) Ultimately, the evidential contest was one between experts as Ms Cheung's credibility was the subject of an adverse finding by the primary judge. Aside from Mr Holland's depth of experience in the field of handwriting analysis, the fundamental advantage he had in forming his expert view (set out in his report) was that he had regard to original sample signatures of Ms Cheung both pre-dating and post-dating the guarantee. (b) Ms Ganas, the expert engaged by the Trustees, had no original sample signatures to study at the time he prepared the relevant report (though he had made a study of some original signatures at an earlier time for the sake of a different report). He had no samples pre-dating the guarantee at any time, which he specifically identified as "a limitation on the examination process" (page 4 of Mr Ganas's second report) and he did not account for his analysis of the guarantee in his report in the detail that Mr Holland did. (c) Mr Ganas concluded that there was "moderate support" for the view that the questioned signatures were not genuine, having regard to the copy documents he used and certain notes regarding his analysis of the original samples (which notes were not produced). In contrast, Mr Holland concluded that in his opinion the writer of the samples signed the guarantee entailing a positive indication that beyond all reasonable doubt the writer of the guarantee was the writer of the signatures on the samples ultimately relied upon (Holland Report, page 4, and annexure B). (d) The weight of the evidence supported the factual finding below. 77 Although there is no discussion in the reasons of the primary judge of the question whether or not he should 'go behind' the judgment of the Magistrates' Court of Victoria, by embarking on an examination of whether, as Ms Cheung asserted, the guarantee was a forgery, the primary judge in effect decided to 'go behind' the judgment. His Honour was correct to do so. There had not been a hearing on the merits in the Magistrates' Court of Victoria. The initial judgment was obtained in default of filing a defence, and Ms Cheung's application for a re-hearing was dismissed (for reasons which were not made clear in the evidence). Ms Cheung put forward evidence that she did not sign the guarantee. In these circumstances, it was appropriate for the bankruptcy court to 'go behind' the judgment and examine the underlying issue: see, eg, Corney v Brien (1951) 84 CLR 343 at 348 per Dixon, Williams, Webb and Kitto JJ, 357-358 per Fullagar J; Wren v Mahony (1972) 126 CLR 212 at 224-225 per Barwick CJ (with whom Windeyer and Owen JJ agreed); Wolff v Donovan (1991) 29 FCR 480 at 486 per Lee and Hill JJ. 78 Having decided (correctly) to 'go behind' the judgment, in my view the primary judge erred in law and fact in his consideration of the underlying issue. 79 In circumstances where the bankruptcy court decides to 'go behind' a judgment, the onus of proof in relation to the underlying issue falls on the party claiming to be a creditor. In Corney v Brien, Fullagar J said at 358: The question whether the judgment is to be reopened or "gone behind" at all will, of course, often involve some preliminary investigation of the merits of the attack on the judgment. But, when once the court decides that it will "go behind" the judgment, the cases which I have cited show, in my opinion, that the whole matter is open. When once it is considered proper to "reopen", the only question will be whether there was, in fact and in law, a debt which could legally found the judgment - whether there was in "Truth and Reality" an obligation not of record before there was an obligation of record. If the case should be one of those rare cases (I have not actually found one in the Reports since 1888, when Fry L.J. said that he knew of none) where it is legitimate to "go behind" a judgment entered after trial in court, there would be, I think, no alternative but to re-try the whole case. The matter to be decided is the existence or non-existence of a debt antecedent to the judgment. It has been said on several occasions that the judgment is prima-facie evidence of the antecedent debt. But, when once the inquiry is undertaken, I think that the ultimate burden of proof rests on the person claiming to be a creditor. As Lord Esher M.R. said in In re Fraser; Ex parte Central Bank of London: "The existence of the judgment is no doubt prima-facie evidence of the existence of a debt; but still the Court of Bankruptcy is entitled to inquire whether there really is a debt due to the petitioning creditor". (Footnotes omitted; emphasis added.) See also Wolff v Donovan at 487 per Lee and Hill JJ. 80 However, the primary judge appears to have proceeded on the basis that it was for Ms Cheung to establish that her signature had been forged, rather than for Capital Finance to establish that Ms Cheung owed a debt to Capital Finance. The primary judge framed the relevant preliminary question as: "whether, as Ms Cheung strongly asserts, the guarantee from which all this stems, already referred to above, was in fact a forgery" (Reasons, [6]). Paragraphs [145]-[147] of the Reasons, set out in [59] above, approach the matter by reference to Ms Cheung's assertion that her signature was forged. Although the matter is not free from doubt, the primary judge's reference to s 140 of the Evidence Act 1995 (Cth) at [147] of the Reasons appears to relate to a finding of forgery (with such a finding "not to be made lightly"). In the course of the appeal hearing, in response to a question from me, counsel for Capital Finance said that he understood the primary judge's reference to s 140 to indicate that Ms Cheung bore the onus (appeal transcript, page 102). The primary judge's later statement that he had "roundly rejected the central proposition upon which Ms Cheung relies, namely that the original Guarantee was a forgery" (Reasons, [158]) also suggests that he considered Ms Cheung to bear the onus. The primary judge thus appears to have proceeded on the basis of a mistaken principle, namely that it was for Ms Cheung to establish forgery, rather than for Capital Finance to establish that Ms Cheung owed it a debt (and thus that Ms Cheung signed the guarantee). If it is correct that his Honour proceeded on this basis, I do not think it is possible to say that this could not have affected his factual analysis and the finding he reached. 81 Further, the primary judge did not refer to or engage with several material matters which suggested that Ms Cheung did not sign the guarantee: (a) First, in considering the evidence of Mr Holland, the primary judge did not address the apparent differences between a number of the control signatures, or "signature standards", and the questioned signatures. The questioned signatures were items (A) 1, (A) 2, (A) 3 and 23. The standard signatures relied on by Mr Holland in his conclusion (page 4 of the report) were items (B) 4 to (B) 9 and (C) 13, (C) 16, (C) 17, (C) 18 and (C) 22. It should be noted that item (B) 5 is incorrectly labelled (B) 2 at the top of the relevant page in the annexures to the report (as explained by Capital Finance's counsel at T105). Of the standard signatures relied on by Mr Holland, it is fair to say that items (C) 13, (C) 16 and (C) 22 look different from the questioned signatures. During cross-examination, Mr Holland accepted that item (C) 13 looked different from the questioned signatures (T102.41) and then said that "it didn't really become a major part of my report" and "I didn't measure on C13" (T104). But the opinion in his report was that the questioned signatures were written by the same writer as the signature standards he relied on, which included (C) 13. Further, there is little apparent difference between (C) 13 and (C) 16, another signature standard relied on by Mr Holland. Item (C) 22 looks very different. Although there was no cross-examination specifically on item (C) 22, there was cross-examination generally on the lack of similarity between the signature standards and the questioned signatures (T102, T104-115). (b) Secondly, in relation to Mr Ganas's evidence, the primary judge stated at [140] of the Reasons that he did not accept the endeavours to discredit Mr Ganas's evidence on the footing that he did not have originals when he prepared his second report, but then went on to say that his source documents "appear to have been copies, something that he conceded was undesirable" (Reasons, [140]). I do not think these statements reflect the whole of the evidence given by Mr Ganas during cross-examination. Mr Ganas did have access to original control signatures when he prepared his first report (dated 14 August 2014). He was asked to use the same control signatures for the purposes of his second report (dated 27 January 2015). At that time, the documents were no longer available so he used the scans and notes from the first report (T92). He did not accept that this was a limitation (T93, T96-97, noted in the Reasons at [93]). (c) Thirdly, one of the main reasons given by the primary judge for preferring Mr Holland's evidence over Mr Ganas's evidence was that Mr Holland had access to control signatures which both pre-dated and post-dated the guarantee (Reasons, [141]). But most of the control signatures provided to Mr Holland which pre-dated the guarantee were signed "Katie" and he excluded them from consideration (items (C) 10, (C) 11, (C) 12, (C) 14, (C) 15, (C) 19, (C) 20, (C) 21). Only three of the control signatures relied on by Mr Holland pre-dated the guarantee and one of these was item (C) 22, discussed above. Moreover, the primary judge did not have regard to the frequency with which Ms Cheung appears to have signed as "Katie" in the years before the date of the guarantee. (d) Fourthly, the primary judge stated that it took Ms Cheung "some time" before her assertion of forgery was made (Reasons, [146]). I do not think this reflects the evidence. The sequestration order was made on 17 February 2011. Ms Cheung's then solicitors, Chiodo & Madafferi, wrote to the Trustees on 4 March 2011 that Ms Cheung was wholly unaware of any claim, summons or debt (Reasons, [14]). At Ms Cheung's first interview with the Trustees she disputed signing the guarantee documents (Reasons, [15]). (e) Fifthly, the primary judge stated that the "form may well have had errors, but as Mr Burness pointed out, such are not uncommon" (Reasons, [147]). This would appear to be a reference to the six-page Business Finance Application (AB tab 10, exhibit "PAD-3" and AB tab 15, Annexure E, item (A) 2). The primary judge did not address the many discrepancies with this document which potentially bore on whether or not Ms Cheung signed the suite of documents. The document has the date 10 July 2004 in the date field (which Mr Lazzaro typed in: T129) but purports to have been signed some time earlier, on 19 June 2004. Page 5 of the form contains details which Ms Cheung contended were incorrect (her mobile phone number, the number of dependents, the years at her present address, the description of her as a "Director-Guarantor", the time in industry, and her outgoings and expenses). There does not appear to have been any dispute below that these details were incorrect. If that be the case, it potentially bore upon whether she actually attended and signed this document (which in turn bore upon whether she signed the guarantee). (f) Sixthly, the primary judge stated that the report of the Financial Ombudsman Service "relied upon a report which I do not accept" (Reasons, [149]). Assuming that this is a reference to the first report of Mr Ganas, there does not appear to be an express finding, earlier in the Reasons, that the primary judge did not accept that report. And there does not appear to be any good reason not to accept that report. When one compares the questioned signatures with the control signatures considered in that report (which concerned guarantees allegedly signed by Ms Cheung in favour of Mercedes-Benz in 2007) they are markedly different: see AB tab 2, report dated 14 August 2004, page 4 (control signatures) and page 5 (questioned signatures). 82 I have considered whether there is a proper basis to disturb the primary judge's factual finding in circumstances where his conclusion depended, in part, on his assessment of witnesses in the witness box. Although I have read the whole transcript, I do not have the advantage of seeing and hearing the witnesses give their evidence. Nevertheless, I think there is a proper basis to disturb the primary judge's factual finding. Having rejected the evidence of Ms Cheung as lacking credibility, the relevant witness evidence was that of the handwriting experts and Mr Lazzaro. In relation to the handwriting experts, the primary judge considered both to be "excellent witnesses who were clearly experts in their field" (Reasons, [138]). Thus the weighing of their evidence is not enhanced to any significant extent by observation of their demeanour in the witness box; rather it turns on matters such as the contents of their reports and the cogency of their opinions. In relation to Mr Lazzaro's evidence, it is true that the primary judge considered him to be a "good witness" (Reasons, [122]) and his evidence to be "entirely compelling" (Reasons, [150]). But it should be noted that Mr Lazzaro did not recognise Ms Cheung at all (T122) and his evidence was therefore based on his practice. Further, in evaluating Mr Lazzaro's evidence about his practice, the primary judge did not engage with the issues concerning the Business Application Form discussed in 81 above. 83 The matters discussed in [81]-[82] above lead me to conclude that the primary judge's finding that the guarantee was signed by Ms Cheung and was not forged involved factual error. 84 Given the conclusions set out above, it is appropriate to make a finding in place of the primary judge's finding on the question whether or not Ms Cheung signed the guarantee. Approaching the matter on the basis that it is for Capital Finance to establish that it is owed a debt, and thus it bears the onus of proving that Ms Cheung signed the guarantee, I do not think Capital Finance has discharged this onus. My reasons are as follows: (a) In considering the matter, I have had regard to the primary judge's conclusions on the credibility of witnesses. I therefore put to one side the evidence of Ms Cheung herself. (b) There is a conflict in the opinions of the handwriting experts as to whether the questioned signatures were signed by the same writer as the control signatures. Both witnesses were well regarded by the primary judge, as noted above. Both reports are cogent and it is difficult to see a clear basis to prefer one report over the other. Although it is true that Mr Ganas was not provided (by the Trustee) with signatures which pre-date the date of the guarantee, he considered a body of control signatures from 2005 to 2014, and said that these were consistent (T96). (c) There are observable differences between, on the one hand, Ms Cheung's signatures on some of the control documents and, on the other, the signatures on the Capital Finance documents (including the guarantee). I refer in particular to items (C) 13, (C) 18 and (C) 22 in Mr Holland's report. (d) Notwithstanding the evidence of Mr Lazzaro that he would only ever sign as a witness if he had witnessed the signature being signed before him (T122), there are a number of discrepancies pertaining to the Capital Finance documents which raise doubt as to whether they were in fact signed by Ms Cheung. These have been referred to in 81 above. The inaccuracy of many of the details on page 5 of the Business Finance Application tends to suggest that she was not present, notwithstanding Mr Lazzaro's evidence to the effect that some of these details were not relevant to the decision whether or not to lend the money (T134). Further, although the matter was not explored in cross-examination, it is difficult to see how Ms Cheung and Mr Lazzaro could have signed the Business Finance Application on 19 June 2004, when the document was not printed until 10 July 2004 (as indicated by the footer). (e) Although I place little weight on this, I note that the guarantee relates to a term purchase agreement entered into by a company controlled by Ms Cheung's then husband and that he was subsequently convicted of fraud. As noted earlier, he was serving a long term of imprisonment at the time of the hearing below. (f) Similarly, although I place little weight on this, I note that Ms Cheung challenged three other claims against her estate based on guarantees she was alleged to have signed in relation to motor vehicles not for her own benefit. One claim was made by BMW Finance; two claims were made by Mercedes-Benz Finance. In each case, the companies ultimately withdrew their claims. The first report of Mr Ganas (in evidence below) concluded that the guarantees relied on by Mercedes-Benz were not genuine. 85 Taking these matters into account, I conclude that Capital Finance has not established that Ms Cheung signed the guarantee.

Conclusion 86 I note that it was common ground below and on the hearing of the appeal that Ms Cheung had a surplus of assets over liabilities at the time the sequestration order was made (AB tab 6). Solvency at the time the sequestration order was made potentially provides an independent basis for seeking annulment of the bankruptcy. This is a matter that can be the subject of further submissions, if necessary. 87 As noted earlier, I will list the matter for hearing on a date to be fixed for submissions on the form of orders to be made (including as to costs). I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky.