Q. What about the taxation department, which books did you show them?
A. I don't know what the taxation got. I didn't show them anything. I have no dealing with the taxation department. I haven't seen any one from the taxation department."
78 In his 2 May 2005 affidavit Mr Griffin said this:
"50. It is with regret that I must admit that during 1999 and 2001 I forged Lesley's signature on a number of documents. This was mainly for convenience and occurred when Lesley was not around or overseas for short periods visiting her mother in 1999 and 2000. I recall I purchased some cars and a BP fuel card using Lesley [sic] signature."
Consideration
The defendant's evidence
79 The only evidence that the defendant resigned as a director of the company in approximately September 2001 is the oral and affidavit evidence given by her and Mr Griffin, to the effect that she signed documents prepared by Mr McClymont and presented to her by Mr Griffin. The documents have never been sighted and Mr McClymont was not called to give evidence.
80 In contrast to this evidence, most of the documents that have been tendered support the plaintiff's contention that the defendant did not resign until February 2003. I find that the defendant signed exhibits D and E. I accept Mr Dubedat's evidence that the signatures on these documents are those of the defendant. I consider that the defendant's evidence that the signatures on those documents looked like her signature should be preferred to her latter day change of mind about it. I reject the evidence of Mr Griffin that he procured another person to sign these documents for the defendant (see below). I note that there is no evidence that the defendant signed exhibit G and that there is evidence that she did not. The question of when the defendant ceased to be a director of the company is not informed in any reliable way by exhibit G.
81 The Department of Immigration documents signed by the defendant are ambiguous. The 2001 documents in exhibit L support the defendant's case that she was by then not a director. The 2002 documents are to the opposite effect. The defendant's explanation that she described her usual occupation as a director because she was flying business class and wanted to feel important is on one view quite believable. However, the defendant was not without business acumen and experience and the attempts by her and Mr Griffin to portray the defendant as his malleable and innocent tool do not strike me as genuine. However, these documents contradict each other and no inference one way or the other can fairly or confidently be drawn from them in favour of either party.
82 Exhibit C is very strong evidence that the defendant was still a director for the financial year ended 30 June 2002. It says that she was. It is dated 23 March 2003, which is around the same time that Mr Griffin was apparently protesting to Mr McClymont that he should have effected the defendant's resignation as a director some years before. It is prepared by Mr McClymont of Mainstream Taxation & Accountancy Services "[o]n the basis of the information provided by the directors of [the company]". Mr McClymont did not incorporate the information said to have been given to him by Mr Griffin in the alleged conversation between them in February 2003. I find that that conversation never took place. Exhibit C supports the proposition that the defendant remained as a director at the end of the 2002 financial year and that she had not resigned in September 2001 as she contended.
83 I do not rely on exhibit J as supporting the plaintiff's contentions. The document is not the defendant's document. She never adopted it or what it asserted. It speaks in terms of "client" in the singular, notwithstanding the assertion that instructions to write it came from both Mr Griffin and the defendant. Exhibit K is also derivative of material that is not identified. If it relies on documents that are in evidence in these proceedings then the inferences that arise from those documents should be permitted to speak for themselves.
84 Exhibit S is a powerful piece of evidence. It is approximately contemporaneous with exhibit C. It was lodged with ASIC. It is presumably the document to which Mr Griffin referred at par [49] of his 2 May 2005 affidavit when he said, "[i]n any event Lesley was ultimately removed as a director early in 2003". The document wholly contradicts the combined version from the defendant and Mr Griffin about what they say occurred in September 2001.
85 The defendant's income tax returns are also inconsistent with her case. They describe her as a company director and her income is disclosed as having been received in that capacity. There is no evidence or suggestion that the defendant was a director of any other company. The same information that is contained in the taxation returns is mirrored in exhibit R. I reject the defendant's evidence that she was paid as an employee "after Christmas 2001, early 2002".
86 The evidence of cheques apparently signed in blank by the defendant is not wholly satisfactory. It is associated with the evidence about the defendant going to the bank to have her removed as a signatory to the company's cheque account. I have considerable difficulty accepting much of the evidence about these matters but only in a way that deprives me of any proper understanding of what actually occurred or what significance should be given to it. Principal among my concerns is the fact that the signatures on very many of the cheques that make up exhibit U do not appear to my inexpert and untrained eye to have been signed by the defendant at all. No expert report was obtained on this question, and the cheques were introduced into evidence at the last minute. I consider that the evidence about the cheques and the visit to the bank produces no inferences of any strength that assist in the resolution of the present issue and I do not rely upon it for any purpose.
87 I disbelieve the defendant about having been presented with or having signed documents giving effect to her resignation as a director of the company in or about September 2001. I do not do so on the basis that I was able to discern from her performance in the witness box that she was telling lies about these matters. I take account of the warnings and exhortations contained in cases such as Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [31] as follows:
"[31] Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical."
88 I do so upon the basis that there are unexplained and inexplicable contrasts and contradictions of the defendant's contention that she resigned as a director that are contained in the documents to which I have referred. By way of comparison, the documents on which the defendant places reliance, such as the Department of Immigration records, point in two directions. In my opinion the defendant's evidence cannot stand, or at least cannot do so comfortably, with the inferences and direct facts that arise from exhibits C, D, E, R and S, and the defendant's income tax returns. Moreover, the unfortunate result of the evidence given by Mr Griffin is that it detracts from the defendant's evidence rather than supports it.
Mr Griffin's evidence
89 In contrast to any assistance that is available to me solely from the defendant's demeanour, I have no doubt that Mr Griffin's evidence has been intentionally concocted by him in order to assist her in these proceedings. I have no confidence at all that anything said by him on a relevant and uncorroborated event can be believed. He struck me as willing to say anything at any time in response to questions that forced him to confront difficulties in the case for his former wife as he saw it. I have come to that view wholly accepting the force and binding effect of the wisdom patent in the passage from Fox v Percy (supra) quoted above. The most obvious manifestation of this is what appears to me to little more than a charade concerning the acquisition of the defendant's signature on a document, or perhaps two documents, in order to "remove" her as a director of the company. However, it is possible in my opinion to reach a similar conclusion about Mr Griffin's evidence on relevant matters without resort to the frailties of inferences and findings based solely upon demeanour. There are a number of examples of how this is so.
90 First, Mr Griffin was by his own admission happy to forge the defendant's signature on documents when it suited him. He showed little if any regard for the formalities of corporate administration. The significance of this is not that he was fraudulent or that his conduct was somehow reprehensible. It is that the apparent lengths he says he went to in order to have the defendant execute her resignation as a director show an uncharacteristic and incredible attention to detail not evident elsewhere. The clear and transparent reason for this would appear to be Mr Griffin's concern that the validity of the resignation, that both he and the defendant assert was effected, should not be impugned or invalidated by a defect in its execution.
91 Secondly, this approach is in obvious and relevant contrast to the one he took when arranging the execution of documents by others in the defendant's name. These documents were all documents that the defendant sought to rely upon to counter any contention that might be proffered by the plaintiff that they constituted an admission or recognition by the defendant that she was a director at the time they were signed. Exhibits D, E and G are in this category. I have found that exhibit G was not signed by the defendant but that exhibits D and E were. The underlying and illegitimate theme of Mr Griffin's evidence about these documents was that he arranged for them to be signed by others without the defendant's knowledge so that they could arguably not amount to evidence that she performed duties or functions as a director of the company after the time when she asserted that she had resigned.
92 Thirdly, much of Mr Griffin's evidence was on its face completely artificial and fabricated. The evidence about confronting Mr McClymont when told by him that he had never received the signed resignation is quite simply just silly. It was an obvious but clumsy attempt to make Mr McClymont appear to be both the reason why, and inferentially at fault because, that document was never lodged with ASIC or somehow otherwise put into effect. This follows from the awkward combination of Mr McClymont's alleged denial that he ever received the document and his later "concession" that he might have received it but probably lost it. Mr Griffin's assertion that the defendant subsequently signed another document to effect her resignation is equally incredible, particularly as the document has never been produced or otherwise verified.
93 Fourthly, and with particular relevance to Mr Griffin's evidence, Mr McClymont was never called to give evidence and there was not even a worthwhile attempt to explain his absence. He had been the accountant for the defendant and Mr Griffin or the company for some time. Mr Griffin said in par [28] of his 2 May 2005 affidavit that he and the defendant had known Mr McClymont "for approximately ten years" by 2001. He was closely involved in much of the company's affairs until at least March 2003 and could not be thought to be other than in the defendant's camp. I draw the inference that any evidence that could have been given by Mr McClymont would not have assisted the defendant's case in general or Mr Griffin's evidence in particular.
94 Fifthly, Mr Griffin admitted that he signed exhibit S on or about 17 February 2003. It was arguably not prepared with the assistance of Mr McClymont, as the form was out of date at the time, although Mr Griffin says Mr McClymont prepared it. It would certainly be somewhat curious if Mr McClymont had not been involved given what Mr Griffin describes Mr McClymont's role otherwise to have been with respect to the company at about that time and the dissatisfaction that Mr Griffin was expressing about Mr McClymont's performance concerning the resignation document that Mr Griffin said he gave him. Preparation of the document by Mr Griffin alone would certainly be inconsistent with the intended inference that Mr Griffin expected Mr McClymont to fix his mistake. In my opinion exhibit S was prepared without Mr McClymont's involvement. It recites that the defendant ceased to be a director of the company on 17 February 2003. It says nothing about the defendant having ceased to be a director in September 2001. That is material that alone casts all the rest of Mr Griffin's evidence on this topic into serious doubt. It is incompatible with any version of events from him that the defendant did not remain as a director of the company until 17 February 2003.
95 It is not clear what Mr Griffin says is the relationship between exhibit S and his evidence that a new document was prepared by Mr McClymont about which he allegedly said "I can't remember if Lesley signed it". That document is not in evidence but there would in any event have been no need for any other document to be prepared by Mr McClymont once Mr Griffin had lodged exhibit S. It is also not clear what Mr Griffin meant to convey in par [49] of his 2 May 2005 affidavit when he said, "[i]n any event Lesley was ultimately removed as a director early in 2003". That statement is ironically in accordance with exhibit S and is in terms in complete conflict with his evidence that the defendant had resigned in 2001. If exhibit S had been prepared to correct Mr McClymont's alleged failings in the past to lodge the appropriate documents from September 2001, it is remarkable, and unbelievable, that it did not record the September 2001 date as the date upon which the defendant ceased to hold office with the company.
96 Sixthly, exhibit R is also relevant. The document records in Mr Griffin's own handwriting the income received by the defendant as a director of the company until as late as 2002. That is inconsistent with the defendant having ceased to be a director in 2001. Even if the sums for directors' fees are calculated for the income tax year ending June 2002, it is difficult to accept that the whole of the sum of $52,000 allotted to the defendant was only for the period prior to September 2001. This is particularly so because the same amount is allotted to Mr Griffin for that income tax year. Furthermore, Mr Griffin's "explanation" that the defendant did not actually receive the money, and that it was in effect no more than an illegitimate entry in one of two sets of company books, can be discounted as false by reference to the fact that the defendant herself returned it as income for the relevant tax year.
97 Finally, and perhaps most fundamentally, if it were Mr Griffin's understanding that the defendant had resigned as a director of the company in September 2001, there would have been no need to "forge" her signature on anything. His discovery that the defendant was still a director was on Mr Griffin's evidence not made by him until 2003 when he had the conversation with Mr McClymont who allegedly told him that he never got the resignation document or might have lost it. According to Mr Griffin, this made him "a bit angry" at the time. This is presumably because he did not know it before then. If that is to be believed there can be no acceptable explanation of why Mr Griffin felt the need to use the defendant's signature on exhibit D on 3 October 2001 or on exhibit E on 16 December 2002 as he logically then remained unaware of what he would later discover to be Mr McClymont's alleged omission. It also flies in the face of the apparent importance or significance implicitly attributed by Mr Griffin to the formalities of the defendant's resignation as a director that led him to require her to sign the documents that he then allegedly returned to Mr McClymont "the following day". I completely reject Mr Griffin's attempts to explain these inconsistencies and contradictions, in particular those appearing in his evidence extracted at pars [72] and [73] above. I accept that exhibit G does not conform to this analysis.
Conclusion on the second issue
98 In my opinion the defendant remained a director of the company from 18 March 1999 until at least 17 February 2003.
The third issue
99 The defendant relies upon the defence provided by s 222AOJ(2) to the extent that she says that she did not take part in the management of the company "for some other good reason". The reason that the defendant proffers as a good reason is that she believed she had resigned as a director on August 2001: see par 5 of the further amended defence. Although a rejection of the defendant's case that she resigned as a director may intersect with her contention that she continued to have a reasonable belief that she had done so, it would not in every case entirely or necessarily foreclose upon the existence of such a belief. However, it does so in this case.
100 The defendant correctly contended that this defence does not arise for consideration unless she has failed on the first two issues. She submitted that her belief that she had resigned for the purposes of this argument is to be derived from the same evidence that supported her arguments on these other issues. The defendant submitted that her belief that she had resigned is demonstrated by her listing home duties as her occupation on the earlier immigration document in exhibit L within only months of when she said she resigned. The defendant submitted that a "belief that one has resigned must surely be a good reason for not participating in the management of the company for the purposes of s 222AOJ(2)." I am not satisfied that the defendant held such a belief or that she could have done so on reasonable grounds.
101 In Power v DCT (Qld District Court, 12 December 1995, unreported), referred to in DCT v Clark [2003] NSWCA 91; 52 ATR 526 at [49], Morley J made the following comments at pages 3-4 in relation to a defence under this section:
"The elements of this defence are that Power, first, must specify some phenomenon, second, prove its existence, third, prove that he did not take part in Power Administration's management, fourth, that he did not do so when, in this case, the directors ought to have caused Power Administration's remittals to have been made, fifth, that his not having taken part was caused by the phenomenon, and, sixth, that that phenomenon was illness or some other good reason within the meaning of that expression in subs 222AOJ (2).