El-Hadi v Australian Timbers

Solicitors: Law Society of NSW (Plaintiff) Mitry Lawyers (Defendant) File Number(s): 2020/255471 Decision under appeal Court or tribunal: Local Court of NSW Jurisdiction: General Division Date of Decision: 07 August 2020 Before: Kennedy LCM File Number(s): 2018/349799

Judgment

1. HIS HONOUR: By Amended Summons, filed 13 November 2020, Mohamad El-Hadi, the plaintiff on this appeal (hereinafter, except in the orders, referred to as "the appellant"), appeals a judgment of the Local Court, issued by Kennedy LCM on 3 August 2020. Under the judgment of the Local Court, the appellant was ordered to pay Australian Timbers (NSW) Pty Ltd, the defendant on this appeal (hereinafter, except in the orders, referred to as "the respondent"), the sum of $81,451.90, plus costs and interest.

Background

1. The proceedings below were commenced by the respondent against the appellant. The proceedings below sought damages arising out of the alleged execution by the appellant of a Guarantee. It was alleged that the Guarantee covered contractual obligations of Alzco Carpentry and Construction Pty Ltd (hereinafter "Alzco") to the respondent. The appellant's son, Ali El-Hadi, is the sole Director of Alzco.
2. The appellant filed a Defence to the originating process and denied that he signed the Guarantee. The appellant gave evidence denying that he signed the Guarantee and the appellant relied on a series of what was said to be examples of his signature on other documents.
3. In the proceedings below, the appellant argued that those signatures were consistent within themselves and were completely inconsistent with that which appeared on the Guarantee. No expert handwriting evidence was adduced by either party.
4. Further, the appellant's son swore an Affidavit and testified orally before the learned Magistrate. That testimony was to the effect that he had forged the appellant's signature on the Guarantee.
5. The respondent, as the initiating party below, called evidence from a number of witnesses in the proceedings below. Included in the evidence was the testimony of Mr Van Akker, who gave evidence that he saw the appellant sign the Guarantee. Also called to give evidence were Mr Chehab; his granddaughter, Ms Chehab, and Mr Gorden Halabe. The issue raised in the appeal, broadly, relates to the correctness of the determination by the learned Magistrate that the appellant herein executed the Guarantee.

Grounds of Appeal

1. The appeal is agitated on the basis of grounds of appeal which purportedly raise separate questions of law. The grounds of appeal raised by the notice in the Amended Summons are in the following terms: "1. The learned magistrate erred at law: a. in finding (at [67]) that the plaintiff's signature on his driving licence was insufficient evidence on balance to prove that the appellant could not have signed the documents in a different way on other occasions; b. alternatively, by finding, when there was no evidence to allow such a finding, that either: i. the plaintiff had signed the guarantee in a deliberately different manner to his usual signature; or ii. the plaintiff actually had a different signature of any kind to that of his usual signature 2. The learned magistrate erred in law in finding in a manner which was procedurally unfair and a denial of natural justice to the plaintiff (at [67] and [86]) that the appellant signed the guarantee document in a manner different to that of his signature where: a. that different manner was not pleaded by the respondent below and it did not form part of its case; and b. the plaintiff was not on notice of the case concerning the purported alternate signature. 7. The learned magistrate erred at law by failing to consider, and by failing to give any or alternatively insufficient, reasons concerning the case advanced by the plaintiff that: a. the plaintiff's son had admitted under oath that the son had forged his father's signature on the purported guarantee; b. a Mr. Van Akkar did not have the authority to bind the defendant to the purported guarantee. 8. The learned magistrate erred at law by finding the plaintiff was legally bound by the purported guarantee where: a. the plaintiff was a volunteer to the transaction and received no benefit from it; b. no one associated with the respondent explained the effect of the purported guarantee to the plaintiff, particular [sic] in a language with [sic] the appellant could understand; c. it was common ground that the defendant: i. never informed any guarantor, as a matter of practice, as to the upper limit of any guaranteed amount(s); ii. gave itself liberty to increase the indebtedness under such a guarantee without giving any notice to any such guarantor. 9. The plaintiff seeks leave to appeal the following questions of mixed law and fact: a. where the evidence before the primary judge revealed a vast difference between the signature on the plaintiff's driver's licence and the purported guarantee document, whether the plaintiff should be bound at law by such a guarantee to pay the judgment sum of $81,451.90 to the defendant; b. where the primary judge's finding that the plaintiff signed the purported guarantee was glaringly improbable or contrary to available inferences, whether the plaintiff should be bound at law by a guarantee that is signed in a manner which is vastly different to the plaintiff's own signature."

Appeal and Leave to Appeal

1. The appeal to the Court from a judgment of the Local Court is governed by the terms of the Local Court Act 2007 (NSW). Pursuant to the terms of s 39(1), an appeal may be brought to this Court from proceedings in the General Division of the Local Court from a decision with which a party is dissatisfied.
2. Such an appeal is an appeal as of right, if the appeal is on a question of law. It is necessary to record that the proceedings before the Local Court were in the General Division.
3. Otherwise, an appeal on a ground that involves a question of mixed law and fact may be taken from the decision of the Local Court sitting in its General Division to this Court, but only by leave of this Court. [1] The relevant provisions of the Local Court Act are in the following terms: "39 Appeals as of right (cf LCA 1982, section 73) (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law." "40 Appeals requiring leave (cf LCA 1982, section 74) (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court."
4. While probably unnecessary, given the jurisdiction otherwise available to this Court, the determination of an appeal is governed by the terms of s 41 of the Local Court Act and allows the Court: to vary the terms of the judgment or order under appeal; to set aside the judgment or order under appeal; to set aside the judgment or order and remit the matter back to the Local Court for determination in accordance with the law and/or the Court's direction; or to dismiss the appeal. [2]
5. Thus, if the ground of appeal raised is on a question of law, there is an appeal as of right. If, on the other hand, the ground raised in the appeal is a ground which is a question of mixed law and fact, it is necessary to obtain the leave of the Court in order for the appeal to proceed. It is important to note that neither ss 39 nor 40 of the Local Court Act permits an appeal, either as of right or by leave, on a question which is a question of fact only.
6. As can be seen from the foregoing recitation of the grounds of appeal, one of them asserts that there was "no evidence" that the appellant had signed the Guarantee. Further, there is an allegation of a breach of the rules of procedural fairness or, otherwise expressed, denial of natural justice.

Error of Law

1. For the appellant to have a right of appeal, the matter on which the right exists must be a ground of appeal on a question of law. For the appellant to be granted leave to appeal, the ground must involve a question of mixed law and fact. As earlier stated, no appeal lies to this Court on a question of fact that is not a question of mixed law and fact.
2. That which amounts to a question of law has been described on a number of occasions and there is little controversy as to the description. Application of the description is more difficult. [3]
3. Earlier in these reasons I have referred to a ground which purports to rely upon a denial of procedural fairness and jurisdictional error. Jurisdictional error occurs, at least, where there is: a failure to take into account a relevant consideration; taking into account an irrelevant consideration; utilisation of the wrong test or asking oneself the wrong question; a misapprehension of the nature of the limits of the power of the decision maker; or a denial of procedural fairness. [4]
4. The reference to a failure to take into account relevant considerations is a reference to those considerations that are required to be taken into account in determining the relevant decision. A jurisdictional error may be an error of law or an error of fact. For present purposes the Court accepts that a denial of procedural fairness is an error of law in that procedural fairness is, unless expressly excluded, an aspect of the requirements of valid proceedings and a valid resulting decision.
5. The taxonomy of an error of law has been described on a number of occasions. The classic taxonomy was outlined by Sir Frederick Jordan CJ and is in the following terms: "In cases in which an appellate tribunal has jurisdiction to determine only questions of law, the following rules appear to be established by the authorities: (1) The question what is the meaning of an ordinary English word or phrase as used in the Statute is one of fact not of law: Girls' Public Day School Trust v. Ereaut; Life Insurance Co. of Australia Ltd. v. Phillips; Mc Quaker v. Goddard. This question is to be resolved by the relevant tribunal itself, by considering the word in its context with the assistance of dictionaries and other books, and not by expert evidence: Camden v. Inland Revenue Commissioners; In re Ripon (Highfield) Housing Confirmation Order, 1938. White and Collins v. Minister of Health; although evidence is receivable as to the meaning of technical terms: Caledonian Railway v. Glenboig Union Fireclay Co.; Attorney-General for the Isle of Man v. Moore; and the meaning of a technical legal term is a question of law: Commissioners for Special Purposes of Income Tax v. Pemsel. (2) The question whether a particular set of facts comes within the description of such a word or phrase is one of fact: Girls' Public Day School Trust v. Ereaut; Attorney-General for the Isle of Man v. Moore. (3) A finding of fact by it tribunal of fact cannot be disturbed if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences: Farmer v. Cotton's Trustees; Currie v. Inland Revenue Commissioners; Inland Revenue Commissioners v. Lysaght. (4) Such a finding can be disturbed only (a) if there is no evidence to support its inferences, or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences: In re Ripon (Highfield) Housing Confirmation Order, 1938. White & Collins v. Minister of Health, or (c) if it has misdirected itself in law: Farmer v. Cotton's Trustees; Colonial Mutual Life Insurance Society Ltd. v. Federal Commissioner of Taxation. Thus, if the facts inferred by the tribunal from the evidence before it are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law: Farmer v. Cotton's Trustees; Mersey Docks and Harbour Board v. West Derby Assessment Committee and Bottomley, etc. If, however, the facts so inferred are capable of being regarded as either within or without the description, according to the relative significance attached to them, a decision either way by a tribunal of fact cannot be disturbed by a superior Court which can determine only questions of law: Farmer v. Cotton's Trustees; Currie v. Inland Revenue Commissioners; Inland Revenue Commissioners v. Lysaght; Mersey Docks and Harbour Board v. West Derby Assessment Committee and Bottomley, etc." [5] (Footnotes and citations omitted)

Ground 1 - No Evidence and Reversal of Onus

1. As the Court understands the submissions of the appellant, he agitates Ground 1 in support of two separate questions of law. First, the appellant submits that there was no evidence before the primary judge to allow the conclusion that the appellant had either a second or alternate signature, referred to by the appellant as the "phantom signature", in the form of that affixed to the purported Guarantee and submits that the signature on the purported Guarantee was vastly different to his driver's licence.
2. Secondly, the appellant submits that, even if there were such a phantom signature, there was no evidence that the appellant ever used such a signature.
3. Further, the appellant submits that the primary judge erred by reversing the onus of proof. The appellant submits that the primary judge required the appellant to prove either that he did not have or use the phantom signature; or, assuming such a phantom signature existed, had ever used it.
4. The appellant submits that whether there is any evidence of a particular fact is a question of law. Such a proposition is, as can be seen from the foregoing comments in these reasons, trite.
5. However, the appellant submits that the question of fact, here in issue, is whether there was a phantom signature or whether it was ever used. Each of those propositions is an evidentiary fact, the effect of which may be to confirm or to refute the ultimate factual conclusion that the appellant executed the Guarantee.
6. The appellant submits that the finding of the learned Magistrate comprises two distinct but interrelated findings that together comprise the signature finding. First, on the appellant's submission, the Local Court preferred the evidence of Mr Van Akker over that of the appellant. Secondly, the Local Court was not satisfied that the appellant, on the evidence before the court, could not have signed the Guarantee in a manner different to his licence signature.
7. As stated, the appellant submits that there was no evidence before the Local Court that would have allowed the conclusion that the appellant either had a phantom signature or used a phantom signature to execute the Guarantee. The appellant submits that none of the evidence suggested that the licence signature was anything other than the appellant's genuine signature.

Ground 2 - Denial of Procedural Fairness

1. The appellant submits that there was no pleading that the form of the signature on the Guarantee was that of the appellant. The lack of pleading, coupled with the oral and objective evidence before the Local Court, meant that it was procedurally unfair to the appellant for the Local Court to have made any conclusion about the quality or the form of signature on the Guarantee and/or its use by the appellant.
2. Had that issue been on the cards, according to the appellant, then, as he has done in these proceedings, the appellant would have adduced evidence of his uniform use of the signature on his licence across a broader range of documentation. This is one of the reasons that the appellant seeks leave to rely upon his Affidavit of November 2020, which annexes further documentation evidencing uniform use of the signature on his licence.
3. As it was, according to the appellant's submission, the primary judge had at least three individual consistent instances of the appellant's licence signature: his driver's licence; the Affidavits of the appellant in the proceedings; and the three delivery dockets relied upon by the respondent. If the November 2020 Affidavit had been included in the evidence before the Local Court, those instances would have doubled in number.

Ground 7 - Inadequate Reasons

1. The appellant has submitted that the primary judge did not give adequate reasons for rejecting the sworn evidence of the appellant's son. That evidence, as has already been stated, was that he, the son, had placed the appellant's signature on the Guarantee.
2. No submissions were put before the Court seeking to agitate either Grounds 8 or 9 of the Amended Notice, the Court having been informed that the appellant did not press Grounds 8 and 9. Further, no submissions were made in relation to any apparent lack of authority in Mr Van Akker to bind the respondent to the appeal to the Guarantee.

Consideration

1. Before dealing with the submissions of the appellant on appeal, it is necessary to reiterate some principles that apply to the manner in which the Court, as presently constituted, may deal with the issue. First, it is appropriate to note that the Court's jurisdiction is governed by the terms of s 75A of the Supreme Court Act 1970 (NSW), the terms of which provide that the appeal from the Local Court to it, not being an appeal under the Crimes (Appeal and Review) Act 2001 (NSW), is an appeal by way of rehearing.
2. While, in some circumstances, the term "rehearing" may involve some ambiguity, fundamentally the first task for the Court, in such an appeal, is to determine the correctness of the judgment from which the appeal has been brought. In so doing, it is the Court's function to determine whether the judgment below is the result of some legal, factual or discretionary error, [10] or is the result of some significant procedural error. [11]
3. In SZVFW, supra, the High Court said: "[29] As appeals are creatures of statutes, incidents of appeals can vary from statute to statute. To describe a particular appeal as an appeal by way of rehearing can accordingly be to fail to identify all of the statutory incidents of that appeal. More than a century of case law expounding the ordinary incidents of an appeal by way of rehearing from a final judgment of a judge sitting without a jury nevertheless allows those ordinary incidents to be identified with relative precision. The answer to the first of the subsidiary questions involved in this appeal is to be found in those ordinary incidents. [30] Like an appeal in the strict sense, of which an appeal to the High Court under s 73 of the Constitution is the prime example, an appeal by way of rehearing is a procedure under which the appellate court is permitted and, unless the appellate court dismisses the appeal or remits the matter for rehearing, required to 'give the judgment which in its opinion ought to have been given in the first instance'. And like an appeal in the strict sense, an appeal by way of rehearing is a procedure for the correction of error. '[T]he existence of an error, whether of law or fact, on the part of the court at first instance is an indispensable condition of a successful appeal.' [31] For practical purposes, the difference between correction of error on an appeal in the strict sense and correction of error on an appeal by way of rehearing lies in the temporal perspective that the appellate court is required to adopt in examining the correctness of the judgment under appeal. An appellate court determining an appeal in the strict sense is required to determine the correctness of the judgment under appeal at the time that judgment was given: in an appeal from a final judgment of a judge sitting without a jury, the correctness of the judgment is to be determined on the evidence adduced at the trial and on the law as it then stood. An appellate court determining an appeal by way of rehearing, in contrast, is required to determine the correctness of the judgment under appeal in retrospect: in an appeal from a final judgment of a judge sitting without a jury, the correctness of the judgment is to be determined on the evidence adduced at the trial supplemented by any further evidence that the appellate court may allow to be adduced on the appeal, and on the law as it stands when the appellate court gives judgment on the appeal. [32] To the extent necessary to address the ground or grounds on which an appellant claims that a judgment under appeal is erroneous, an appellate court in an appeal (whether in the strict sense or by way of rehearing) from a final judgment of a judge sitting without a jury 'is obliged to conduct a real review of the trial and ... of [the] judge's reasons'. The appellate court 'cannot excuse itself from the task of weighing conflicting evidence and drawing its own inferences and conclusions'. [33] Performing its obligation to conduct a 'real review', the appellate court 'must, of necessity, observe the "natural limitations" that exist in the case of any appellate court proceeding wholly or substantially on the record'. Limitations of that nature can include: 'those occasioned by the resolution of any conflicts at trial about witness credibility based on factors such as the demeanour or impression of witnesses; any disadvantages that may derive from considerations not adequately reflected in the recorded transcript of the trial; and matters arising from the advantages that a primary judge may enjoy in the opportunity to consider, and reflect upon, the entirety of the evidence as it is received at trial and to draw conclusions from that evidence, viewed as a whole'. The appellate court needs to be conscious that '[n]o judicial reasons can ever state all of the pertinent factors; nor can they express every feature of the evidence that causes a decision-maker to prefer one factual conclusion over another'. The more prominently limitations of that nature feature in a particular appeal, the more difficult it will be for the appellate court to be satisfied that the primary judge was in error. [34] Natural limitations on an appellate court's ability to be satisfied of error on the part of a primary judge inhering in the need for the appellate court to proceed on the record play no part in this appeal. They have little impact in practice on the determination of an appeal from a judgment given in a proceeding for judicial review of administrative action. Ordinarily, as here, the trial of a judicial review proceeding will have been conducted wholly or substantially by reference to documentary and affidavit evidence which an appellate court is in as good a position to evaluate as was the primary judge." (Footnotes and citations omitted)

Endnotes

1. Local Court Act 2007 (NSW) s 41.
2. Ibid s 40(1).
3. See the history of the litigation in Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 and the differing results below: HIA Insurance Services Pty Ltd v Kostas [2009] NSWCA 292 and Kostas v HIA Insurance Services Pty Ltd [2007] NSWSC 315.
4. Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40.
5. The Australian Gas Light Company v The Valuer-General (1940) 40 SR (NSW) 126.
6. 43 FCR 280 at 287; [1993] FCA 456.
7. (1996) 186 CLR 389; [1996] HCA 36 (Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ).
8. Ibid.
9. Krishna v Director of Public Prosecutions (NSW) (2007) 178 A Crim R 220; [2007] NSWCCA 318; Williams v the Queen (1986) 161 CLR 278; [1986] HCA 88; Morris v the Queen (1987) 163 CLR 454; [1987] HCA 50; M v the Queen (1994) 181 CLR 487; [1994] HCA 63; R v R (1989) 18 NSWLR 74; 44 A Crim R 404.
10. Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40.
11. Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at 555-556 [29]-[31]; [2018] HCA 30 at [31]-[32].
12. Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390 at 410; [2010] HCA 32 at [60] (French CJ).
13. Supreme Court Act 1970 (NSW) s 75A(8).
14. Whall v Stamp [2019] NSWCA 163.
15. Akins v National Australia Bank (1994) 34 NSWLR 155 at 160.
16. Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 (Gleeson CJ, Gummow and Kirby JJ).
17. Court Book, Exhibit CB1, p 19 (Statement of Claim at [2]).
18. Court Book, Exhibit CB1, p 32 (Affidavit, Rod Van Akker, 14 May 2019, at [5]).
19. Court Book, Exhibit CB1, p 33 (Affidavit, Rod Van Akker, 14 May 2019, at [6]).
20. Court Book, Exhibit CB1, p 33 (Affidavit, Rod Van Akker, 14 May 2019, at [9]).
21. Court Book, Exhibit CB1, p 33 (Affidavit, Rod Van Akker, 14 May 2019, at [11]).
22. Re Building Workers' Industrial Union; ex parte Gallagher (1988) 62 ALJR 81 at 84; [1988] HCA 4 at [17], [18] (Mason CJ, Wilson, Deane and Gaudron JJ).
23. R v Sorlie (1925) 25 SR (NSW) 532 at 539.

Amendments 14 May 2021 - Typographical error. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 May 2021