8 The appellants contend that the judge was wrong to reject their claim on account 1089. They submit that his Honour made a number of specific errors of fact and that his Honour erred in law as to the burden of proof in respect of the account 1089 passbook. In the alternative they contend that the judge's conclusion was against the evidence and the weight of evidence.
The facts
9 The first appellant, Mr Simonovski, was born in Macedonia in Yugoslavia[2] on 30 November 1946 and is a restaurant owner and businessman. The second appellant, Mrs Simonovksi, was born in Macedonia on 21 April 1955. Mr Simonovski migrated to Sweden in 1967 and Mr and Mrs Simonovski met and married in Macedonia in 1975.
10 Mrs Simonovski's brothers, Mick and Victor Janevski, migrated to Melbourne in the late 1960s or early 1970s and married and remained in Australia, and Mrs Simonovski's parents migrated to Melbourne in about 1976 and have lived here ever since. By the end of 1988, Mick and his wife, Olivera Janevski, had established three toy and gift shops and an import business.
11 In 1986, the appellants and their three children obtained permanent residency visas for migration to Australia. They were valid until 9 March 1987 for an indefinite stay. Mr Simonovski obtained a resident visa on 26 March 1987 for travel before 8 March 1990 and Mrs Simonovski and the appellants' children obtained a resident visa on 29 April 1988 for travel as migrants before 7 December 1988 and for travel before 7 December 1991.
12 Mr Simonovski first visited Australia over the period 8 March 1987 to 8 April 1987. He stayed with Mrs Simonovski's family in Melbourne, examining business opportunities and visiting Mick and Olivera Janevski's toy and gift business at the Sunshine Plaza Shopping Centre on a number of occasions. Their business was located a few shops from the Sunshine branch of what was then the Bendigo Building Society and is now the bank, and they were longstanding customers of the bank with several business and personal accounts and accounts in the names of their companies, Jenski Nominees Pty Ltd and Vicmar Pty Ltd. During Mr Simonovski's visit, they introduced Mr Simonovski to the manager of the Sushine branch, Frank Panebianco, with whom they had dealt since 1985. But Mr Simonovksi did not have any business dealings with Panebianco or otherwise with the bank during that visit.
13 On 4 December 1988, the appellants and their children returned to Australia. They brought with them a large amount of foreign currency and traveller's cheques resulting from what they alleged were sales of businesses and properties and other earnings. They had the opportunity of settling in Australia but they had not made a final decision.[3] Mrs Simonovski wanted to settle here with Mrs Simonovski's brothers and parents. But Mr Simonovski was not as enthusiastic. He came from a family that was wealthy before the communists came to power in Yugoslavia and his businesses and family were in Sweden and Macedonia. He also spoke little English and Mrs Simonovksi spoke none. They remained in Australia until 1 February 1989 and then returned to Sweden where they have since resided.
14 Before returning to Sweden, however, on 31 January 1989 the appellants went with Mick Janevski to the Sunshine branch of the bank and opened account 0801 with a deposit of Deutschmarks which, following conversion, came to the value of about $122,000. According to the evidence, they handed the Deutschmarks to Panebianco and signed a Letter of Instruction authorising the bank to pay and honour all withdrawals on the account if signed by Mr Mick Janevski of 48 Melaleca Drive, Thomastown 3074. Panebianco then entered the account and other details on the bank's retail finance system (RFS) computer system using one of the branch computer terminals, and produced from the system an account 0801 passbook recording the details of the deposit. The RFS system recorded the appellants as customers at 12.08 p.m. with the customer number of 1575604, and allocated to them an account number 0801 at 12.21 p.m. The judge found that the label on the rear side of the account 0801 passbook had been printed by a dot matrix printer used by the bank, probably an Olivetti PR 2845, connected to the RFS system. That type of printer was particularly equipped for use in a financial institution and could not be bought off the shelf.
15 There was a conflict of evidence about account 1089. Unlike account 0801 it was not established on the bank's RFS computer system. The appellants' evidence was that after leaving the meeting concerning account 0801 they chanced to meet Panebianco in a café where they were lunching near the bank and that he there persuaded them to return with him to the bank in order to make the deposit of $650,000 worth of Deutschmarks. They swore that once back at the bank they had handed over the Deutschmarks to Panebianco and that Panebianco had given them a passbook for account 1089 evidencing the deposit. They produced that book. Panebianco swore that there was only one meeting on 31 January 1989, and he denied ever receiving a deposit of $650,000 and any knowledge of the account 1089 passbook.
16 There was a considerable amount of expert evidence about the authenticity of the account 1089 passbook. It was established that the book was in the December 1988 form or print run, which was in use at the bank as at January 1989 but which ceased to be used in the early 1990's, and that the book label had been printed with a dot matrix printer which was the same as or similar to the printer used to print the label on the account 0801 passbook. Dr Found (who was one of the bank's experts) gave evidence that the labels on the account 0801 and 1089 passbooks were directly superimposable and he observed that they had a common font, with common spacing between the characters, spacing between the words where the pins struck the paper and the formatting of the account number and the address itself. The judge observed that the label on the account 1089 passbook closely matched the label produced for the account 0801 passbook.
17 Dr Found and Dr Whitehouse (who was one of the appellants' experts) were, however, both of the view that the book label could not have been printed by the RFS system. The account number 1089 was not capable of being allocated by the system and thus it followed that the label had to have been printed while the printer was off-line. The judge found that the label could not have been printed on-line.
18 It was common ground that the label could have been printed by a bank printer taken off-line. But Dr Found considered that it would have been an extremely difficult thing to do if starting from scratch. He stated that one would have "a devil of a time" purchasing a computer with the appropriate software drivers, and that one would have to "play around" with the output to get the correct font, formatting the actual information and the interline spacing; running a few test prints to see if they were superimposable, and then finally, assuming that one had a blank passbook, putting that through the printer and hoping that it printed correctly. Mr. de Simone, another of the appellants' experts, thought that it could be done more easily. But the judge was not persuaded that Panebianco had the time or skill to have done it on 31 January 1989.
19 Other evidence established that a carbon ribbon typewriter had been used to make two notations on the account 1089 passbook. The first was the words "Building Society Bank" on the front cover. The second was the words and figures on the first line of the inside portion. There was a carbon ribbon typewriter at the bank's Sunshine branch in January 1989. But there was no way of determining whether the entries had been made with that typewriter or another. Bank passbooks were ordinarily kept under lock and key and there was no evidence of physical or chemical erasure from the account 1089 passbook. But as at January 1989 the bank was not a bank and was known only as the Bendigo Building Society. No entries had been removed from the transaction line portion of the account 1089 passbook. But the stamp on the account 1089 passbook was not the stamp used by the bank to validate manual entries.
20 Panebianco was an experienced bank employee and had been employed by the bank since 1981 in a series of managerial positions. As at January 1989, he was a business development manager and a relieving branch manager. He was also self-taught in computers, and like a number of other bank officers he was able to operate the Sunshine branch computer terminals himself, and he had built and sold a number of computers to staff members. He was exposed as a thief following complaints by the Janevskis in about April 1998 about their inability to obtain information concerning the state of their accounts. A number of irregularities were then discovered. They included unauthorised transfers between accounts, paper work prepared for customer deposits without any record of the deposits in the bank's systems or records, and accounts held under aliases. Panebianco admitted to an internal auditor that he had made a number of unauthorised transactions on customer accounts. It then emerged that he had started misappropriating moneys from customers' accounts in 1982 or 1983. Customers thought that accounts had been created with the bank, but Panebianco had not created the account on the bank's computer system. Instead he held the cash in the safe over a period of months.
21 Further investigations revealed that Panebianco had been motivated by money worries, which were the product of mishandling bank accounts and gambling, and it was very probable that by early 1989 he was running a considerable number of alias accounts. He created a fictitious person "N. Simonovski" and a fictitious account number that could be thought to be related to the appellants. He made up fictitious account numbers. There were a lot of accounts where names where slightly changed in terms of the identity of the person. When interviewed by the police on 3 July 1998 Panebianco admitted that he made up printouts for Simonovski, [Jenski] and Farranella and he stated that he only started keeping records from the late 1980s or early 1990s. Before that he destroyed everything for fear of being caught. He said that in 1989 and onwards, he used customers' cash deposits to replenish or repay other customers' accounts coming due plus interest earned. He prepared a summary for police of accounts and printouts on accounts that had been used to deceive bank customers. It included account 0801 but not account 1089.
22 The appellants did not make any inquiries about account 1089 between 31 January 1989 and January 2001 and did not disclose the existence of the account to the Janevski's until January 2001. They first became aware of problems in 1998 when they were notified by the Janevskis that Panebianco was suspected of criminal conduct. At that time they gave instructions for the institution of proceedings for the recovery of the amount of account 0801. But they did not make any claim in respect of account 1089 until January 2001, after Mr Simonovski had come to Melbourne to attend the trial in the County Court of the claim for recovery of the amount of account 0801.[4]
23 On 6 September 1999 Panebianco pleaded guilty before the County Court at Melbourne to 13 counts of theft and obtaining financial advantage by deception, as follows: that on 7 July 1990 he stole $133,451.36 belonging to Anna Ellul; that on 5 May 1992 he stole $67,760.57 belonging to M & O Janevski; that on 7 July 1992 he stole $101,048.82 belonging to C. & E. Borg; that on 26 March 1996 he stole $30,000 belonging to Eileen Henry; that on 1 June 1994 he stole $80,000 belonging to Angelo Ciciulla; that between 30 June 1997 and 1 May 1998 he stole $10,000 belonging to Concetina Cutrale; that on 15 July 1996 he stole $118,910.23 belonging to the Estate of M G Jobling; that between 1 January 1989 and 12 February 1996 he stole $66,000 belonging to Paul Farinella; that between 25 July 1997 and 23 October 1997 he dishonestly obtained from Bendigo Bank $12,500 with the intention of permanently depriving Bendigo Bank of $12,500 by deception, namely, by falsely representing that an overdraft account no. 5721428/1401 in the name of Mihailo Nateski was opened and operated by the said Mihailo Nateski; that on 18 September 1997 he stole $20,000 belonging to Bendigo Bank; that on 23 October 1997 he dishonestly obtained from Bendigo Bank $7,000 with the intention of permanently depriving Bendigo Bank of $7,000 by deception, namely, by falsely representing that a revolving credit account no. 5820287/7601 in the name of Paraskeva Nasteski was opened and operated by the said Paraskeva Nasteski; that on 17 January 1998 he stole $50,000 belonging to TNR Investments Pty Ltd; and that on 6 February 1998 he stole $150,000 belonging to 31st Octelda Pty. Ltd. At the time of giving evidence in this proceeding Panebianco was at risk of being charged with further offences and therefore may have had reason to lie about account 1089.
The appellants' contentions
24 In written form the appellants' contentions occupy the better part of 40 pages of a document entitled "Outline of Submissions on Behalf of Appellants". In oral argument the appellants' counsel repeated most of the propositions contained in that document, sometimes several times and often with variations and gradations of emphasis. In the result, the appellants make many criticisms of the judge's findings and the criticism ranges over most of what his Honour said. It is therefore not practical to deal with each of the applicants' complaints individually. There are simply too many and in any event a large number of them are directed at one or other of the judge's findings of fact on peripheral issues. There are, however, several distinct themes of criticism in the appellants' submissions and it appears that most of the individual criticisms fall under the heading of one or other of those themes. I propose therefore to deal principally with those themes of criticism and in detail only with the major specific criticisms.
25 The first theme of criticism is of alleged inconsistency between the way in which the judge treated the appellants' evidence concerning account 0801 and their evidence concerning account 1089. They say that since the judge accepted their evidence about account 0801, and stated that he did not conclude that they were lying about 1089, it was nonsensical for his Honour not to be satisfied that the appellants had made out their claim in respect of account 1089.
26 I think that criticism is misconceived. Of course if one accepts the evidence of a witness about one aspect of a matter, it is more probable that one will accept the witness's evidence about another aspect of the matter. The process not only accords with forensic precepts of the assessment of credit and credibility but is consistent with good common sense. But the fact that one accepts a witness's evidence on some aspect of a matter does not compel one to accept everything that the witness says. Just as in everyday affairs, where one may be persuaded by what a person says about a matter and reject or not be persuaded by what that person may say about another matter, so in a trial it is open to accept a witness's testimony about some aspects of a matter and to reject other parts of what the witness says. Juries are inevitably told to do just that. In point of principle therefore, the judge was entitled to accept the appellants' evidence about account 0801 and be not persuaded by what they said about account 1089.
27 The second theme of criticism, as I discern it, is alleged inconsistency between the judge's observation that he did not say that the appellants were lying about account 1089 and the judge's expressed lack of satisfaction by what they said about that account.
28 I think that criticism is also misconceived. To say that one is not persuaded by what a witness says about a matter is not necessarily or even usually to conclude that the witness is a liar. It is to say only that the witness's version of events does not strike one as convincing; even allowing for the logical possibility that it may be true.
29 The third theme of criticism appears to be one of alleged inconsistency between the judge's unqualified rejection of Panebianco as a witness of truth, and his Honour's lack of persuasion as to what the appellants said about account 1089. The argument as I apprehend it is that because Panebianco denied what the appellants said about the $650,000 deposit, and because the judge rejected Panebianco as a witness of truth, it followed that the judge was logically bound to accept the appellants' version of events.
30 I think that process of reasoning is flawed. Where two witness give competing versions of events it does not follow from the fact that one of them is shown to be a liar that the other of them must be right. That is why juries are warned in civil and criminal trials that they are not to reason from a conclusion that the accused has lied about a subject matter that what the complainant says on that subject matter is necessarily so.[5] When there is a conflict of testimony of that kind, one logical possibility is that both witnesses are lying. Another is that one is lying and the other is mistaken. There is also a third possibility, which the judge found here to be the case, that one witness was a liar and while the judge could not and therefore would not say that the others were being untruthful, their story and the circumstances of it were so unlikely as to leave him unpersuaded. As the judge put it: