Grounds 1 and 3
12 The appellants contend that the primary judge erred in finding that "a Loan Statement was incapable of conversion to a bill of exchange as referred to in section 25" of the Bills of Exchange Act and that, as a result, s 50(1) had no application to the facts of this case. They also complain that her Honour's findings contradicted the unrebutted evidence and demonstrated a misunderstanding of the relevant statutory provisions.
13 The finding of most relevance to these grounds of appeal, at [29] of her Honour's Reasons, is:
… that the Loan Statement was not a bill of exchange under s 8(1) of the Act and, further, was incapable of conversion to a bill of exchange under s 25. Given that the Loan Statement was not and could never be a bill of exchange, s 50(1) could have no application.
14 Her Honour had also held at [27] that the relevant loan statement did not satisfy the conditions set out in s 8(1) of the Bills of Exchange Act and was, therefore, not a bill of exchange.
15 Section 8 of the Bills of Exchange Act provides relevantly:
(1) A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer.
…
(3) An order to pay out of a particular fund is not unconditional within the meaning of this section; but an unqualified order to pay, coupled with:
(a) an indication of a particular fund out of which the drawee is to re-imburse himself or herself, or a particular account to be debited with the amount; or
(b) a statement of the transaction which gives rise to the bill;
is unconditional.
(4) A bill is not invalid by reason:
(a) that it is not dated;
(b) that it does not specify the value given, or that any value has been given therefore; or
(c) that it does not specify the place where it is drawn, or the place where it is payable.
16 Section 25 of the Bills of Exchange Act provides relevantly:
(1) Where a simple signature on a blank stamped paper stamped with an impress duty stamp is delivered by the signer in order that it may be converted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any amount the stamp will cover, using the signature for that of the drawer or the acceptor or an indorser.
(2) And in like manner when a bill is wanting in any material particular, the person in possession of it has a prima facie authority to fill up the omission in any way he or she thinks fit.
17 The primary judge's conclusion that the loan statement itself was not a bill of exchange within the meaning of the Bills of Exchange Act was plainly correct and is not challenged in the appeal.
18 The primary judge found that the loan statement was incapable of conversion to a bill of exchange because:
(1) It is not a "simple signature on a blank stamped paper"; and
(2) It is not "stamped with an impress duty stamp" apart from an Australian 5 cent stamp which either Mr Waden or the appellants appeared to have affixed themselves.
19 Mr Paalvast argued that the RAMS logo on the loan statement was a "simple signature". We reject that argument.
20 The Macquarie Dictionary Online defines a signature relevantly to be:
1. a person's name, or a mark representing it, as signed or written by that person or by a deputy, as in subscribing a letter or other document.
21 Section 97 of the Bills of Exchange Act provides:
(1) Where, by this Act, any instrument or writing is required to be signed by any person, it is not necessary that he or she should sign it with his or her own hand, but it is sufficient if his or her signature is written thereon by some other person by or under his or her authority.
(2) In the case of a corporation, where, by this Act, any instrument or writing is required to be signed, it is sufficient if the instrument or writing be sealed with the corporate seal.
But nothing in this section shall be construed as requiring the bill or note of a corporation to be under seal.
22 In Muirhead v Commonwealth Bank of Australia (1996) 125 FLR 434, the Court of Appeal of Queensland held that, in the absence of any express provision or other indication to the contrary, s 97(1) of the Bills of Exchange Act is not to be taken to preclude signature by an agent. At 438, McPherson JA (Macrossan CJ and Davies JA agreeing on this issue) observed (quoting from Lord Denning's dissenting judgment in Goodman v J Eban Ltd [1954] 1 QB 550) that the "great virtue of a handwritten signature…lies in the fact that no two persons write exactly alike, and so it carries on the face of it a guarantee that the person who signs has given his personal attention to it." At 440, McPherson JA expressed approval of the statement in K Robson (ed) Riley's Annotated Bills of Exchange Act and Cheques and Payment Orders Act that "signature" may perhaps be defined as the writing of a person's name on a bill or notice in order to authenticate and give effect to some contract thereon. His Honour also referred to the United States Uniform Commercial Code definition of the term "signed" as including any symbol executed or adopted by a party with present intention to authenticate a writing, citing Brady on Bank Checks s 3.1, 4th ed (1969).
23 In Muirhead, McPherson JA also referred to the judgment of the Supreme Court of Ceylon, in Meyappan v Manchanayake [1961] LKCA 17; (1961) 62 NLR 529. In that case, the question was whether a cheque, upon the reverse of which had been placed a stamp of the name of the firm, had been signed by the firm. Samsoni J said (at 532):
The correct view, I think, is that unless there is added to the name so stamped a signature of a person verifying the so-called signature to show that it was placed there with the authority of the firm, the document cannot be regarded as validly signed. No case has gone so far as to hold that the mere stamping of the name of a firm, be it a company or a partnership, on a document is a valid signature by that firm.
24 In the context of s 25, the words "simple signature" refer to a mark which indicates that the document bearing the mark may be converted into a bill. In this case, there is nothing to indicate that the logo on the loan statement was intended to have that function. The mere reproduction of the logo on the loan statement, without more, does not perform that function and there is no other evidence suggesting that it was intended to perform that function. Accordingly, we agree with the primary judge that the loan statement does not satisfy the requirement in s 25 of "a simple signature on a blank stamped paper". It follows that the loan statement was not a document capable of being converted into a bill of exchange.
25 Section 50(1) provides:
Subject to the provisions of this Act, a bill must be duly presented for payment. If it be not so presented, the drawer and indorsers shall be discharged.
26 Since there was no bill, her Honour was correct in concluding that s 50(1) had no application.
27 This is sufficient to dispose of ground 1 of the appeal. However, we also note that s 25 requires the relevant paper to be delivered "by the signer in order that it may be converted into a bill". Even if the loan statement was signed, there was no evidence before the primary judge that it was delivered to Mr Waden with the intention of being converted into a bill of exchange. At the hearing of the appeal, Mr Paalvast argued that the loan statement was not expressed in a manner which excluded this intention. Further, he argued, if the bank did not have the relevant intention, it should have said so at the time and place nominated on the document and referred to at paragraph 4 of the primary judge's Reasons. That argument is unsustainable. Mr Paalvast's written submissions amply demonstrate that Mr Waden attempted to create a bill of exchange out of a loan statement, without reference to the bank. The bank never had any intention that the loan statement should be converted into a bill of exchange and the mere act of presenting the bank with a "filled up bill of exchange" did not cast any legal obligation upon the bank to deny an intention which it had never had or expressed.
28 At paragraph 15 of the appellants' written submissions, Mr Paalvast sets out the propositions that he submits should have been adopted by the primary judge. However, none of those propositions survive scrutiny for the following reasons. Proposition (a) is that the loan statement was converted into a bill of exchange. For the reasons given above, this proposition cannot be accepted. Proposition (b) includes the claim that the loan statement is a "statement of a transaction" within the meaning of s 8(3)(b) of the Bills of Exchange Act. This contention is not raised by the Notice of Appeal but, in any event, does not assist the appellants because the loan statement does not "give rise" to any bill of exchange. Proposition (c) assumes the existence of a bill of exchange, and thus does not assist the appellants' case. Proposition (d) merely describes the loan statement, albeit in contentious terms. The loan statement does not on its face require any payment. Propositions (e) and (f) assume the applicability of s 25 of the Bills of Exchange Act.
29 At paragraph 17 of the appellants' written submissions, Mr Paalvast identifies five pieces of evidence said to have been unrebutted "or not properly considered". The first item is a submission rather than evidence, the proposition being that Mr Waden had authority to "fill up" the "inchoate instrument" he received. For the reasons given above, s 25 conferred no authority on Mr Waden because he did not receive a document answering the description in s 25(1). The next propositions describe what Mr Waden did to create and deal with the purported bill of exchange. Precisely what Mr Waden did is of no moment because, whatever he did, he did not do it with the authority of the bank and therefore he was unable by any means to convert the loan statement into a bill of exchange affecting the bank.
30 We do not read the balance of the appellants' written submissions to add materially to the case raised by ground 3 of the notice of appeal.
31 In reaching our conclusion, we do not find it necessary to consider the judgment in Bertola v Australian and New Zealand Banking Corporation [2014] FCA 609.