CHEP Australia Ltd v Flynn

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:	CHEP Australia Ltd v Flynn [2019] NSWDC 614
Hearing dates:	6 & 7 March 2019
Date of orders:	01 November 2019
Decision date:	01 November 2019
Jurisdiction:	Civil
Before:	Judge Levy SC
Decision:	1. Verdict and judgment for the second defendant on the plaintiff’s claim;  2. The plaintiff is to pay the second defendant’s costs on the ordinary basis unless otherwise ordered.
Catchwords:	MERCANTILE LAW – guarantee of contract for hire of pallets – whether guarantee enforceable; DAMAGES – whether claimed loss included unenforceable penalties – whether claimed loss has been proven: s 5D and s 5E of the Civil Liability Act 2002 (NSW)
Legislation Cited:	Bankruptcy Act 1966 (Cth), s 60(1) Civil Liability Act 2002 (NSW), s 5D, s 5E
Cases Cited:	Luxton v Vines (1952) 85 CLR 352; [1952] HCA 19 Andrews v Australia and New Zealand Banking Group Limited [2012] HCA 20 Helou v PD Mulligan Pty Ltd (2003) 57 NSWLR 74 Helvetic Investment Corporation Pty Ltd v Knight (1984) 9 ACLR 773 Jowitt v Callaghan (1938) 38 SR 512 McCrohon v Harith [2010] NSWCA 67 Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28 Pang v Byland Holdings Pty Ltd [2010] NSWCA 175 Re Carey Builders Pty Ltd (1997) 23 ACSR 754 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Zorom Enterprises Pty Ltd v Zabow (2007) 71 NSWLR 354; [2007] NSWCA 106
Category:	Principal judgment
Parties:	CHEP Australia Limited (Plaintiff) Anthony Barry Flynn (First defendant) Elizabeth Mary Flynn (Second defendant)
Representation:	Counsel: Mr SA Lees (Plaintiff) No appearance (First defendant) Mr C Simpson (Second defendant)   Solicitors: Law Squared (Plaintiff) No appearance (First defendant) Somerville Laundry Lomax (Second defendant)
File Number(s):	2018/42715
Publication restriction:	None

Judgment

Table of Contents

Nature of case	[1] – [3]
Parties, entities and undisputed factual background	[4] – [22]
Otiose defence by first defendant	[23]
Defence by second defendant	[24]
Issues	[25] – [28]
Evidence	[29] – [41]
Evidence of Ms Tadros – CHEP’s debt recovery officer	[30] – [32]
Evidence of Mrs Flynn – second defendant	[33] – [35]
Affidavit by Mr Sean Radburn – solicitor for second defendant	[36]
Absence of evidence of Company’s trading history	[37] – [41]
Determination of issues calling for decision	[42] – [81]
Construction of the application for commercial credit	[44] – [52]
Enforceability of the guarantee and indemnity	[53] – [63]
Quantum	[64] – [80]
Claim for indemnity costs	[81]
Disposition	[82]
Costs	[83]
Orders	[84]

Nature of case

1. This is an action brought by the plaintiff, CHEP Australia Limited (“CHEP”) against the first and second defendants, Mr Barry Flynn and Mrs Elizabeth Flynn, formerly a married couple, seeking damages together with interest in the sum of $695,296.53, claimed in reliance of a purported guarantee and indemnity.

2. The underlying contract for which CHEP seeks to enforce the guarantee entered into between CHEP and Flynn Transport (NSW) Pty Ltd (“the Company”) as…