BGC (Australia) Pty Ltd v Marsh - [2013] WADC 133

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: BGC (AUSTRALIA) PTY LTD -v- MARSH [2013] WADC 133

CORAM: FENBURY DCJ

HEARD: 28-30 MAY & 20 JUNE 2013

DELIVERED : 21 AUGUST 2013

FILE NO/S: CIV 160 of 2012

BETWEEN: BGC (AUSTRALIA) PTY LTD
Plaintiff
AND
PHILLIP GORDON MARSH
Defendant

Catchwords:

Contract - Acceptance - Director's guarantee of inferred contract - Turns on own facts

Legislation:

Nil

Result:

Judgment for the plaintiff

Representation:

Counsel:

Plaintiff: Mr G J Douglas
Defendant: Mr G Nairn

Solicitors:

Plaintiff: Hotchkin Hanly
Defendant: Lavan Legal

Case(s) referred to in judgment(s):

Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
Branir Pty Ltd v Owston Nominees [No 2] Pty Ltd [2001] 117 FCR 424
MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125
RJ Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2010] WASCA 128

FENBURY DCJ: The plaintiff company, BGC (Australia) Pty Ltd (BGC) sues the defendant, Mr Phillip Gordon Marsh (Mr Marsh) upon a guarantee he gave as a director of Marsh Civil Engineering Contractors Pty Ltd (Marsh Civil).
The guarantee was signed by Mr Marsh on 13 November 2007. He guaranteed the performance by Marsh Civil of the terms and conditions of an agreement for the supply of goods and services on credit. That agreement was in respect of goods and services supplied by 'any of the … trading companies and businesses comprising BGC to Marsh Civil from time to time'.
At the conclusion of counsel for BGC's opening remarks, counsel for the defendant (ts 8) said:
I think my learned friend correctly pointed out, really, the two core issues in this case.
Given those remarks, it is convenient to recite parts of the opening in these reasons. Counsel advised that (ts 3):
… the plaintiff is a large, privately owned building company that, among other things, supplies building products and services in the construction industry, and of relevance to this case, where dealing with the supply and installation of concrete and asphalt.
And the defendant is the director of, and by way of a holding company, a shareholder of a company that purchased this concrete and asphalt from the plaintiff. And you will hear a lot about that company. It's called Marsh Civil Engineering Contractors Pty Ltd. I will refer to it as Marsh Civil.
Now the plaintiff's positive case is very straightforward, and the complexity arises in this matter from the defence and the reply. So the plaintiff's case is that in 2003, the plaintiff supplied Marsh Civil with its standard written application for a 30 day credit account. The defendant signed this application and returned it to the plaintiff, and then goods and services were regularly supplied, invoiced and paid for, for about four years under this signed, written application that had been returned by Marsh Civil, signed by the defendant.
… It's a standard credit account for the supply of goods and services.
So about four years later, in 2007, Marsh Civil got into arrears, and so the plaintiff requested that the defendant provide a director's guarantee of that credit account – that credit application in writing, and the defendant signed and returned that director's guarantee.
Now, because Marsh Civil then went into liquidation, the plaintiff now sues the defendant as the guarantor pursuant to that guarantee. So that's the plaintiff's positive case. We're suing for goods and services supplied under a standard credit application signed – supported by a director's guarantee, signed by the defendant.
But the defendant wants to say that it's not bound by that guarantee because Marsh Civil is not bound by the credit agreement. And the defendant makes two technical arguments in an attempt to escape this liability.
The first one is that the credit agreement was never binding on Marsh Civil because the application was not accepted.
… So the plaintiff supplied the blank application form to the defendant, Marsh Civil. The defendant signed it and returned it. But, the defendant says that wasn't formally accepted so there was no formation of an agreement. That's the first limb of the plaintiff's defence.
…
We say that it was accepted by conduct but the terms of the credit agreement itself actually define the conduct to accept it. So it says 'if orders are issued and we supply goods and services pursuant to that application, then that's what comprises acceptance'. And the evidence we will bring is that that's exactly what happened.
The second limb of the defence, put by the defendant, is that, well, if the credit agreement was binding on Marsh Civil, then it did not apply to the monies we are actually claiming. So we're claiming, as set out in the pleadings, a set of invoices for concrete and asphalt totalling $123,000.
And the defendant says 'well, even if there was a credit agreement, those invoices don't apply to the credit agreement. They apply to subsequent contracts for goods and services, purchase orders, and a sub‑contract'.
So there's a sub‑contract that deals with about $50,000 worth of the monies and purchase orders that deal with the remaining $70,000 odd and the defendant's case is that, well, that credit agreement is not an umbrella agreement. There was other agreements subsequent to the credit agreement which deals with those monies, so you can't say that it's the credit agreement, therefore the guarantee doesn't apply. That's the second limb of the defence.
Regarding the first limb, which is that – whether or not it was accepted, as I have suggested, we say there's a matter of a proper construction of the credit agreement. Those were supplied pursuant to the credit agreement, and as I've already said the agreed conduct was defined within the agreement.
Regarding that second limb, the plaintiff will demonstrate with reference to documentary evidence that the conduct of the parties show that they operated pursuant to the terms of the credit agreement, and that these subsequent purchase orders and sub‑contracts were adjuncts to that overriding credit agreement which applied to the supply of credit between the parties in the time subsequent to the application.
And we will take you to the specific provision that says it supersedes the prior agreements and, without written authorisation expressly stated, it applies to the provision of credit to any other agreement unless expressly agreed otherwise. So it's got this sort of clause within the credit agreement that says – and I'll take you to that clause for its proper construction – but it says that any variation must be agreed – expressly agreed in writing by the authorised person, which is the credit manager.
That, in very broad terms, is what this case is all about.
At trial approximately 1,500 pages of documents were provided to the court in three trial bundles. This quantity was reduced to one lever arch file containing a collation of documents in numerical order by reference to original trial bundle page numbers (exhibit 16). There were also some 15 other exhibits, some of which were small bundles of documents.
The documents, especially those in exhibit 16, being contemporaneous communications, largely tell the story in the case. It is convenient to make some reference to those communications before dealing with the oral evidence. Before doing that it seems to me that the following observations about background matters are worthy of mention.
BGC is a very large corporation with a number of subsidiaries separately providing goods and services in the construction industry. Through subsidiary companies specifically set up for the purpose, BGC deals with asphalt, bricks, cement, concrete and quarries, amongst other aspects of the building industry.
It is clear from the documentation that Mr Marsh, through Marsh Civil and its corporate predecessor being Gomar Pty Ltd trading as Marsh Earthmoving, received various goods and utilised various services of BGC from time to time over the several years before 2003 and since, until this matter arose in 2011. There was also a history of BGC agreeing to extend credit terms, for example, in 1997.
The commercial relationship evidenced by all of the documents was not unusual. When Marsh Civil was unable to pay BGC on time and would need further time to do so, it needed to make arrangements. Clearly Marsh Civil needed to have a line of credit with BGC to deal with these commercial realities. Access to such a line of credit seems to me to have been an essential arrangement in the construction industry, given the uncertainties from which it suffers. These matters are matters of common knowledge and experience and they are uncontroversial.
In early 2003, presumably having been requested by Marsh Civil to do so, or, perhaps because BGC felt it prudent given their commercial dealings, BGC sent Marsh Civil a pro forma application for credit to enable March Civil to obtain goods and services from BGC on credit and to enable BGC to obtain a director's guarantee.
Completing such an application was not an unusual event. It had occurred some years before in July 1997, when such an application was made by Gomar Pty Ltd trading as Marsh Earthmoving (exhibit 16, page 811 et seq).
Having received the pro forma application for a commercial credit account, Marsh Civil, through Mr Marsh, its director, completed the application on 5 February 2003 and sent it into BGC (exhibit 16, page 64 et seq) (the '2003 application') without objection as to its terms.
On 24 February 2003, BGC acknowledged receipt of the application (exhibit 16, page 799). The letter states:
We thank you for your request for credit facilities with this Group of Companies under your new Company structure.
BGC then advised Marsh Civil that:
For the application to be formally approved, the Credit Manager requires that the attached Deed of Guarantee & Indemnity be completed and signed by yourself.
Pausing there, at that stage, BGC was not accepting the application.
There was no evidence of any director's guarantee being provided by Marsh Civil after that date of 24 February 2003. Nor was there any evidence of any agreement that it not be provided.
However, it is uncontroversial that, thereafter BGC traded with Marsh Civil and provided Marsh Civil with a commercial credit account … a line of credit.
During the next four and a half years until September 2007 commercial activity repeatedly occurred between BGC and Marsh Civil.
On 13 September 2007 Marsh Civil, through its finance manager, wrote to the credit manager BGC (exhibit 16, page 800) a letter headed 'Credit Account Review' which commenced with the words:
We are in receipt of your Account Application Form. We have carefully read your terms and conditions and advise that we have difficulty in accepting some of the terms and conditions … .
…
With regards to terms & conditions of personal guarantee & indemnity, director's guarantees are not available.
The letter's reference to the receipt of an account application form and in particular the mention of various clauses in that form makes it plain, in my view, that the form provided in 2007 is in the same terms as that that had been provided by BGC to Marsh Civil in 2003 being an 'Application for a commercial credit account'. It could not be the case, in my view, that the 13 September 2007's letter's reference to receipt of your Account Application Form is a reference to the form which was received by Marsh Civil from BGC just prior to 5 February 2003, four and a half years earlier.
Eight days after Marsh Civil's letter of 13 September 2007 was sent to BGC indicating non‑acceptance of various aspects of the credit application form BGC responded somewhat perfunctorily by a letter dated 21 September 2007 (exhibit 16, page 802) as follows:
APPLICATION FOR 30 DAY ACCOUNT
We thank you for your application for credit facilities with this Group of Companies, but advise that we are unable to extend these facilities to you at this time.
In handwriting on the company's copy of the letter are the words 'All account COD. No credit allowed'.
Obviously the issues raised by Marsh Civil with respect to the account application form in its letter dated 13 September 2007, were not issues raised by Marsh Civil in 2003, but in any event, clearly, they were not acceptable to BGC in 2007. And whereas BGC was obviously prepared to extend credit to Marsh Civil without a director's guarantee in 2003, BGC was not so inclined in 2007.
Two months after credit facilities had not been extended, and on 23 November 2007(reproduced at exhibit 16, page 803) BGC's credit officer wrote to Marsh Civil as follows:
RE: 30 DAY ACCOUNT APPLICATION
We thank you for your request to reinstate your credit facilities with this Group of Companies, and are pleased to confirm that the application has been approved now that the directors have provided a directors guarantee.
Plainly, credit was only reinstated by BGC when Mr Marsh's guarantee was given.
Exhibit 1 is the original Deed of Guarantee and Indemnity signed by Mr Marsh on 13 November 2007 some 10 days beforehand.
This is the guarantee upon which BGC sues Mr Marsh.
On 27 August 2009, Marsh Civil gained an increase in its credit limit with respect to BGC Cement (exhibit 16, page 804). This request for an increase would seem to have been made in accordance with what BGC had advised Marsh Civil in the last paragraph of its letter of 23 November 2007 wherein it was stated:
If you should wish to increase your limit or extend credit to another BGC company, please send your request by mail or fax'.
Marsh Civil sought a further increase of credit in asphalt on 4 August 2010 which appears at exhibit 16, page 805. This increase was granted on 12 August 2010 (exhibit 16, page 806).
It is uncontroversial that evidence of the subsequent conduct of the parties is admissible on the question of whether an agreement was reached (Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153).
It seems to me that the seeking of increases in a credit limit, strongly suggests there had earlier been provided a line of credit with a limit, which is another way of saying that there was in place an agreement to provide credit.
BGC pleads a case in these proceedings based on an agreement to give credit that was said to have been reached in or shortly after February 2003.
The evidence to which I have referred above strongly suggests that whether or not agreement had been reached in 2003 (and in my view there must have been an agreement reached in that year because commerce followed), there was a further agreement (or 'reformation', or 'Credit Account Review') concluded in 2007. (See BGC letter dated 13 September 2007, exhibit 16, page 800.) This is the agreement for the supply of credit which was in place at relevant times for the purposes of these proceedings.
It is also clear from the history of the matter as evident in the correspondence that Marsh Civil would not have been able to obtain goods and services from BGC, in 2011, on credit to the extent that Marsh Civil did so, without Mr Marsh's guarantee of 13 November 2007 (exhibit 1).

The oral evidence

Michael Francis Murphy was called to give evidence on behalf of BGC. He was the BGC Group Credit manager. He had been in that position for more than 23 years. He explained that he answered directly to the board of directors and had exclusive responsibility for the provision, monitoring and enforcement of the credit functions for the BGC Group of companies which included BGC Asphalt, Quarries, Concrete and Transport.
Mr Murphy explained the process of the issuing of monthly statements. He said at ts 17:
The statements have a process which is run by my subordinate staff. That generates a computer file which is sent to a third party who then print off the statements and copy those statements to a CD and then send back the CD to the company for records.
…‑‑‑On the statements it's a summary of the month's spending detailing the client that we're dealing with, the month of supply, and the outstanding invoices by invoice number, date and amount, and also the aging of those invoices.
When asked about what he meant by the phrase 'aging of the invoices', Mr Murphy said, 'Whether they're at 30 days, 60 days or 90 days'. Mr Murphy explained what happens when a customer fails to pay by the due date and referred to the clause in the credit application where suspension of the delivery of goods and services is an option by explaining:
The suspension is done via my staff on my instruction by going to the computer and putting the account on hold so that future orders cannot be printed. Also, the instruction is given verbally to the division concerned that no further supplies can continue.
And why would you do that? What circumstances? What are the triggers for issuing a hold in that way?‑‑‑Basically in - in the commercial world the standard terms are that on 30‑day terms if the account is not paid by 45 days there is a restriction of supply, then comes 60 days, there's a demand notice, and then depending on the negotiations for the demand notice we proceed to this present position.
Mr Murphy described this as BGC standard policy.
Mr Murphy explained the significance of the account number 'Marsh 10' that appeared on various invoices, statements and other documents shown to him. Mr Murphy said it was the account number that was assigned 'to the account to identify it internally'. He said that any documents with the word 'Marsh 10' meant that they were related to the same credit account.
Mr Murphy explained how it could be that documents with the same credit account, 'Marsh 10' could have differences in or changes made to the title of the account. Thus, in the case at hand, the client was initially known as Marsh Earthmoving, Gomar Pty Ltd and then became known as Marsh Civil Engineering Contractors. Mr Murphy described the change as an update, 'with fresh spelling details'.
Mr Murphy said that it was he who approved the sending of a letter TB806 being a letter to Marsh Civil Engineering Contractors dated 12 August 2010 referring to Marsh Civil's request to increase the credit limit in asphalt and granting an increase to a total of $280,000.
Mr Murphy's attention was drawn to the deed of guarantee signed by Mr Marsh dated 13 November 2007 which appears at TB68 and he was asked under what circumstances would the deed have been requested and Mr Murphy replied:
There could be any number of reasons. If I felt uncomfortable with the limit or exposure of the account. If the account fell behind or arrears in payment, or I sought to secure the account by obtaining some form of security.
At ts 28 Mr Murphy was asked:
At that time, in 2007, do you recall any reason why you would have requested, or do you recall the reason why you requested the – or would have discussed – requested the guarantee?‑‑‑The account was continually overdue, apart from its agreed terms, and it came to the stage where, for this account to proceed further, I required the guarantee to be completed or I was going to close the account.
Mr Murphy was then taken to an email sent to him on 22 December 2010 reproduced at TB1099. The email is from the chief financial officer of Marsh Civil, one Sukumar Banala confirming the payment of $158,957 on 23 December (the next day) relating to various outstanding accounts with BGC Asphalt and Concrete.
From the tenor of the email it is quite plain in my view that there was in place an agreement that Marsh Civil had a line of substantial credit with BGC. The email explains why the debt had grown, and had not been paid earlier. It gives reassurances the problem was unlikely to recur. It says:
Given we have resolved all pending issues, I will endeavour to reconcile BGC account immediately upon receiving the credit notes to bring your account up to date. I sincerely hope this satisfies your concerns and look forward to a harmonious business relationship going forward.

In the final paragraph it requests that a 'temporary hold since this morning' be, by reference lifted, so that 'your operations manager at Yanchep' can 'commence the job'.
Mr Murphy was asked at ts 29 to explain the circumstance of the email and he said:
The circumstance was that the account had been placed on hold for non‑payment, as it was exceeding agreed terms. The email is from Sukamar Banala, who was the CFO of Marsh Civil Engineering at the time, detailing that he had resolved all of the issues regarding the payment of the account, and could he have further goods released to them on credit.
The email from Sukamar Banala to Tracey Newton of BGC reproduced at TB1101, confirms the accuracy of Mr Murphy's belief about the situation, and indeed it concludes with the words, 'The account will be up to date by 6/1/11 and please consider this email as a written guarantee for the same'.
Mr Murphy's attention was drawn to an email dated 18 January 2011 reproduced at TB1123. He explained it as follows (ts 30):
It's communications between Sukamar Banala of Marsh Civil Engineering and Tracey Newton of my office. The bottom communication is advising that the account has defaulted and a demand notice has been issued, and the amounts that are outstanding for December. And Sukamar has replied to that communication saying that they're experiencing cash flow problems, and that he's doing his best endeavours to get the payments made.
When you say there's a demand notice that's been issued, what circumstances cause a demand notice to be issued?‑‑‑Generally, a demand notice is issued if the account is beyond 60 days.
The phraseology and tenor of the email and BGC's earlier email of the same date and reproduced on the same page, is strongly indicative of the existence of a general credit term trade agreement. The email referred to invoice AS6748 dated 23 December 2010 (page 1308) for asphalt at a residential site in Yanchep. BGC's email sought payment of the invoice as being included in a requirement to bring 'the account up to date'.
Mr Murphy's attention was then drawn to the holding of a meeting on 3 February 2011 between representatives of BGC and Marsh Civil. When describing what happened he stated (ts 31):
At the meeting, it was discussed that the account was in arrears. I wanted some confirmation that the account would come back into terms and we talked generally about the future of Marsh Civil and its workload. There was also some discussions about corrector for some of the jobs, and that would speed up the process of getting invoices approved for payment.
In cross‑examination at ts 38 Mr Murphy accepted that BGC did not ever receive a directors' guarantee in 2003 as requested and indeed did not receive one at all until 2007. When it was put to him that consequently given the guarantee was never provided, that the credit application was never accepted Mr Murphy said:
No, that’s not the case. This is a standard letter which is sent to all P/L companies that don't provide directors' guarantees, or personal guarantees, in support of the application. We can only ask. If they don’t provide that guarantee then we must make a decision based on that fact.
Obviously, notwithstanding no guarantee was forthcoming in 2003, BGC agreed to, and obviously made a decision to, extend a line of credit to Marsh Civil.
Mr Murphy was then asked a number of questions about a contract in relation to the provision of asphalt for parking at John Septimus Roe, Anglican Community School (the 'JSR subcontract'). The contract is at TB910. Counsel for Mr Marsh referred to the reference on the second page of the four page document at the top entitled 'Annexure to AS2124' at TB911.
The document referred to as AS2124 (exhibit 16, page 917) is a set of standard conditions applicable to contracts in the construction industry. It is quite a lengthy set of conditions.
Mr Murphy was taken to several areas of difference between the standard conditions and the BGC credit contract. Mr Murphy said that although he was familiar with the standard conditions he knew that BGC would not have agreed to many of them, particularly those that were inconsistent with the conditions in the BGC credit agreement or application. His evidence was that BGC had not agreed that the general conditions should form a part of the JSR subcontract.
At ts 65 the following exchange took place:
Mr Murphy, we established I suppose a series of inconsistencies between the JSR subcontract and - and BGC’s credit agreement and I understand you suggest that it wasn't an authorised contract, but do you accept that the only rational explanation of why Marsh Civil proposed this sort of agreement is because they wanted to contract on terms other than the BGC credit agreement?‑‑‑I cannot answer that. That's up to them. I can only say that it would not be accepted, had it been made known.
In cross‑examination Mr Murphy repeatedly emphasised that when issues relating to credit and the extension of credit arose, he alone was responsible on behalf of BGC. He was asked at ts 75:
… do you accept that your office didn't really enforce or stick to a particular credit limit in respect of Marsh Civil?‑‑‑Well, we have absolute discretion in that area, it doesn't have to be done in writing.
I understand that, and in that sense it's not an important consideration from your perspective?‑‑‑It is an important consideration.
…
The fact that the credit limit might be exceeded. So if the credit limit is stated on the account to be $60,000, if it's outstanding for $120,000 ‑ ‑ ‑?‑‑‑If an order is received which exceeds the credit limit it is referred to me for approval. I'm the only one that can override that.
Mr Murphy was an impressive witness. I found him to be truthful and reliable on the issues about which he spoke.
Ms Tracey Lee Newton was a credit officer with BGC. Her duties included daily collections of outstanding accounts.
Ms Newton explained the process at ts 92 of dealing with a customer who has credit terms with BGC and has failed to pay for BGC goods and services within agreed time lines. Ms Newton was taken to documentation relating to precisely that issue concerning Marsh Civil. She explained her dealings with Sukumar, the Chief Financial Officer of Marsh Civil at ts 93 and following.
Ms Newton's evidence was largely unchallenged. Without going into the detail of her evidence, it seemed obvious that there was in place an agreement whereby BGC had provided Marsh Civil with the ability to delay payment of invoices ergo, a line of credit, a credit agreement.

Inferred agreement

A recent and useful exposition of the law on this topic is to be found in Newnes JA's analysis in RJ Baker Nominees Pty Ltd v Parsons Management Group Pty Ltd [2010] WASCA 128. His Honour at [92] commences by stating 'it is now established that it is not necessary that a contract be found using the 'classical theory of contract formation' based upon offer and acceptance' and he refers to Brambles Holdings Ltd v Bathurst City Council. His Honour then referred to the decision of Stephen J in MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125, 136:
This doctrine of the formation of contracts by offer and acceptance encounters difficulties when sought to be applied, outside the realms of commerce and conveyancing, to the every day contractual situations which are a feature of life in modern urban communities.
His Honour states that a contract may be inferred from the acts and conduct of parties as well as the absence of their words and he cites a lengthy section of the reasons of Allsop J with whom Drummond and Mansfield JJ agreed in Branir Pty Ltd v Owston Nominees [No 2] Pty Ltd [2001] 117 FCR 424 where the position was put as follows:
Contracts can also arise when business people speak and act and order their affairs in a way without necessarily stopping for the formalities of dotting Is and crossing Ts, or where they think they have done so … Sometimes this failure occurs because, having discussed the commercial essentials and having put in place the necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances … if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication. For my part, I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say 'and we hereby agree to be bound' in this or that respect. The essential question in such cases is whether the parties' conduct, including what was said and not said, and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract.
In my view the documentation, and inferences drawn from contemporaneous communications and the evidence of Mr Murphy and other witnesses called for the plaintiff all support the assertion that there was in place, at all relevant times, between BGC and Marsh Civil an agreement for the provision of credit.

When or which agreement was it?

Following some concerns and a request for further assistance from counsel after the court had reserved its decision, and following a brief further hearing on 20 June 2013, further written submissions were provided thereafter by counsel for the parties.
The court's concerns related to BGC's reference to, and emphasis on, an agreement to provide credit being agreed or reached in 2003, when subsequent documentation suggests that an agreement was reached in 2007. The issue of course arises in the context that either date preceded the giving of the guarantee by Mr Marsh in November 2007, being the basis of this litigation.
In my view, although there was no director's guarantee provided at the time as sought, given BGC and Marsh Civil engaged in commercial activity with each other thereafter on terms of credit, it should be inferred that agreement relating to credit in 2003 was reached.
However, it is also apparent that agreement was reached for the provision of credit in 2007, some 4 1/2 years later.
At first glance the plaintiff's case pleads and relies on there being an agreement reached in 2003. However, as counsel for the plaintiff has pointed out, 'a careful analysis of the statement of claim paragraphs 2 to 7 reveals that the plaintiff's case contemplates acceptance of the 2003 credit agreement and then reinstatement of the 2003 credit agreement in November 2007' (plaintiff's supplementary submissions par 4). The plaintiff further submits, and I accept that:
Even if the court were unable to find that the agreement was concluded prior to 2007, the material aspect of the pleading that it was reinstated in 2007 is that the agreement pleaded at par 2 of the statement of claim was accepted (whether formed, or reformed) in November 2007 upon the provision of the guarantee pleaded in par 5 in the statement of claim.
As counsel for BGC asserts, and again I accept, in par 5 of his submissions:
This issue is squarely addressed in cross-examination of the defendant at transcript pages 156 - 158, where the defendant admits that the 2003 credit agreement is what is being reinstated in November 2007 upon the provision of a personal guarantee, and that the guarantee is referable to the 2003 credit agreement.
Perhaps to sum it up, having considered the submissions of counsel, in my view, at times relevant to the execution of the deed of guarantee sued upon, either through the application for credit of 2003, or, more likely, through that made or reformed or 'reviewed' in 2007, there was in force an agreement to provide credit to which the deed of guarantee refers.

Did the credit agreement apply to the monies being claimed by BGC in the action?

It can be seen from the pleadings that BGC seeks a sum totalling $123,996.14 being for concrete and asphalt, goods and services provided to Marsh Civil.
I preface my remarks about this issue by expressing the view that it is objectively unlikely that BGC would have sought a director's guarantee from Mr Marsh that was only to have limited application. By its nature it is an arrangement that would make much more sense in the commercial realities of the relationship, and the situation, if it had general application and covered payment for all goods and services provided, whatever the documentary source or background of the particular transaction absent accepted written variation.
Furthermore cl 1 of the Deed of Guarantee also seems to me to be suggestive that the guarantee was to be of general application. It states:
If BGC accepts the application ('the Agreement') then the Guarantor agrees jointly and severally with each of the trading companies and businesses comprising BGC (as defined in the application) to guarantee the performance of the terms and conditions of the Agreement by the Debtor in respect of goods and services supplied by any of the said trading companies and businesses comprising BGC to the debtor from time to time.
In addition, by cl 13.1 of the application for a commercial credit application completed by Marsh Civil, it is stated:
The agreement supersedes all prior agreements, understandings and negotiations. No terms and conditions at variance with the conditions apply to the provision of credit, unless expressly accepted by the authorised representative in writing.
As I have indicated it was asserted on behalf of Mr Marsh that BGC, through its sales manager Jason Linton, entered into a variety of contracts with Marsh Civil, some of which contained specific credit terms. It was said that part of the sum claimed in the action related to monies owed for goods and services the subject of specific contracts with specific credit terms different to the credit agreement the subject of Mr Marsh's guarantee, and thus, it was put, the payment of those monies owed was not guaranteed by Mr Marsh.
Jason Linton gave evidence on behalf of the plaintiff. He was the sales manager for BGC at the relevant time. He said that Marsh Civil was a 'good client' of BGC. He was asked about having signed subcontracts such as the JSR agreement at ts 115 on behalf of BGC. At ts 117 he identified a meeting held in January 2011 at which BGC, Marsh Civil and Mr Marsh were represented. The meeting concerned the financial situation that existed between the companies and Marsh Civil's ability to continue dealing with BGC 'because things like this had been happening quite regularly' meaning issues with failure to pay. Mr Linton agreed that he signed quite a few contracts with Marsh Civil on behalf of BGC. Some of them contained references to AS2124. He said he did not know what that reference meant. He was unfamiliar with the Australian Standard form of contract. No copy of it was annexed to any contract.
In short it was suggested on behalf of the defendant that Jason Linton, in entering into various contracts and sub‑contracts with Marsh Civil on behalf of BGC, was an authorised representative and entering into those contracts he 'in writing' accepted terms and conditions at variance with the credit agreement.
At ts 136 - 137 Mr Linton was cross‑examined about the circumstance where there was a problem relating to a customer breaching credit terms and not paying BGC. Counsel put it:
Q.… but in terms of - if the credit - if the report came back that there was a problem and there was stop work order, if you like, that applied not just to the job - to the job that was coming up, but it would apply until further notice for all jobs?
A.They'd specify if it was just for that one job, or they'd ask for where we were at in regards to what work we were doing for that client.
Q.Right. So - but in terms of when the stop work order was in place … you wouldn't be performing any work for Marsh Civil?
A.No.
Q.And that would apply irrespective of what sub-contracts you'd entered, what purchase orders had been lodged, what invoices had been issued?
A.Yes.
Mr Phillip Marsh gave evidence and revealed that he had little personal knowledge of the actual transactions the subject of this litigation. He said that AS2124 was a common contract which he said ' we used all the time' (ts 147).
This evidence related to the issue raised on behalf of Mr Marsh to the effect that AS2124 allegedly contains provisions with respect to credit and payment that Mr Marsh says apply and therefore Mr Marsh says subcontracts to which AS2124 was annexed, were not the subject of the guarantee because it only refers to the credit account agreement.
Mr Marsh said he was unaware of any limitation on Jason Linton's authority. He asserted that when Marsh Civil became a trading entity on 1 July 2002, BGC was notified in writing as were all suppliers and clients but he was unable to produce a copy of that letter in spite of having searched.
Importantly at ts 158 Mr Marsh agreed that the increase in the credit limit after the guarantee in November 2007 is referring to the 2003 agreement.
At ts 159 Mr Marsh agreed that he would not normally annex a copy of the standard form of contract AS2124 to a sub-contract document.
I refer to the written closing submissions of the plaintiff par 32 and following. Counsel for BGC referred to the 2003 credit agreement at TB64. Consistent with my earlier findings, of course, the clauses of that agreement referred to by counsel are also contained in the documentation relating to the 2007 'agreement'. Counsel asserts that the clauses of the agreement 'govern all future supplies of goods and services on credit'. He refers to cl 13.1, 13.3 and cl I of the notes forming part of the document reproduced at trial bundle TB67. In my view a fair reading of those clauses supports counsel's contention.
I also accept counsel's submission that purchase orders mentioned in the course of the trial are not subsequent agreements with additional or concrete terms and conditions, but, rather, are part of the process of ordering goods pursuant to the credit agreement.
Counsel for the plaintiff submissions relating to the relevance of the credit terms in the JSR subcontract (TB910) commencing at par 36 of the submissions set out the argument supporting the assertion that any inconsistency between the JSR contract and the 2003 credit agreement is of no practical significance. As counsel put it:
Moreover, the fact that the subcontract is fundamentally consistent with the 2003 credit agreement by providing for payment in 30 days is an argument in favour of a finding that the two contracts are consistent with regard to their payment regime, rather than inconsistent.
I accept the submission.
I also accept counsel's conclusion in par 52 of the submissions, for the reasons that precede that paragraph that:
To the extent that the payment terms of the subcontract agreements are inconsistent with the 2003 credit agreement, the parties acted according to the terms of the 2003 credit agreement, which is consistent with the argument that the 2003 credit agreement was not varied as to its credit terms, pursuant to the express terms at clause 13.1 of the 2003 credit agreement.
I also accept par 56 of counsel's submissions where he states that the conduct of the parties demonstrates an intention that the 2003 credit agreement is intended to apply to all goods and services.

By cl 58 counsel submitted:
The fact that clause 13.1 of the 2003 credit agreement supersedes all prior agreements, and prevents any subsequent agreement regarding the provision of credit, means that the credit agreement will apply to any goods and services supplied on credit, as opposed to goods and services supplied on cash terms.
I accept the submissions in pars 57 – 61 and in particular I find that the 2003 credit agreement (identical to the 2007 credit agreement) was an umbrella agreement to the extent that it applied to all goods and services provided on credit terms by BGC to Marsh Civil, rather than cash terms.
A good deal of court time was taken up dealing with the question of whether Jason Linton had authority to contract on behalf of BGC and vary credit terms as the defendant maintains were so varied by the contracts that Jason Linton signed on behalf of BGC.
As set out in par 62 the plaintiff's position was:
62.The purchase orders and the subcontracts as a matter of construction, do not vary the 2003 credit agreement with regard to the provision of credit, but instead were an adjunct to the 2003 credit agreement. The purchase orders were simply for the purpose of placing an order for goods and services, and those goods and services were supplied pursuant to the terms of the 2003 credit agreement.
63.The JSR subcontract acted as a purchase order, but also provided for the stipulation of further more detailed specifications and drawings.
As I have indicated previously in these reasons I accept the plaintiff's analysis of the matter. Consequently I do not think that any examination of the authority, actual, apparent or implied, of Jason Linton is required. As set out in par 69:
69.The documentary evidence and the oral evidence of Tracy Newman and Mike Murphy supports the position that the plaintiff made it clear to Marsh Civil that no‑one has authority to deal with any issues regarding payment terms and the provision of credit except Michael Murphy.
I accept that the documentary evidence supports the oral evidence of Mike Murphy that Jason Linton did not have actual authority to vary the credit term in any event.
In my view the plaintiff is entitled to judgment in the sum of $123,996.14.
I shall hear counsel as to the appropriate orders including calculations of interest.