Culley and Russell Pty Ltd v Goyder
[2001] WASCA 27
•15 FEBRUARY 2001
CULLEY & RUSSELL PTY LTD -v- GOYDER [2001] WASCA 27
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 27 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:206/1999 | 1 SEPTEMBER 2000 | |
| Coram: | IPP J WALLWORK J WHEELER J | 15/02/01 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| PDF Version |
| Parties: | CULLEY & RUSSELL PTY LTD JOHN GOYDER |
Catchwords: | Damages Claim for losses incurred from shipping contract Respondent alleged to have guaranteed payment for goods "with his life" Appellant said it had relied on that guarantee and shipped the goods Claim dismissed On appeal, held words a "puff" only |
Legislation: | Fair Trading Act 1987 (WA), s 10 Trade Practices Act 1974 (Cth), s 52 |
Case References: | Nil Bill Acceptance Corporation Ltd v GWA Ltd (1983) 50 ALR 242 Gardener Corporation Pty Ltd v Zed Bears Pty Ltd, unreported; SCt of WA; Library No 990181; 14 April 1999 Miba Pty Ltd v Nescor Industries Group Pty Ltd, unreported; FCA (Merkel J); 20 February 1997 Ravinder Rohini Pty Ltd v Krizaic (1991) 105 ALR 593; (1991) 30 FCR 300 Ting v Blanche (1993) 118 ALR 543 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : CULLEY & RUSSELL PTY LTD -v- GOYDER [2001] WASCA 27 CORAM : IPP J
- WALLWORK J
WHEELER J
- Appellant
AND
JOHN GOYDER
Respondent
Catchwords:
Damages - Claim for losses incurred from shipping contract - Respondent alleged to have guaranteed payment for goods "with his life" - Appellant said it had relied on that guarantee and shipped the goods - Claim dismissed - On appeal, held words a "puff" only
Legislation:
Fair Trading Act 1987 (WA), s 10
Trade Practices Act 1974 (Cth), s 52
(Page 2)
Result:
Appeal dismissed
Representation:
Counsel:
Appellant : Mr N W McKerracher QC & Mr J R Atkinson
Respondent : Mr J C Curthoys
Solicitors:
Appellant : Tottle Christensen
Respondent : Slee Anderson & Pidgeon
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Bill Acceptance Corporation Ltd v GWA Ltd (1983) 50 ALR 242
Gardener Corporation Pty Ltd v Zed Bears Pty Ltd, unreported; SCt of WA; Library No 990181; 14 April 1999
Miba Pty Ltd v Nescor Industries Group Pty Ltd, unreported; FCA (Merkel J); 20 February 1997
Ravinder Rohini Pty Ltd v Krizaic (1991) 105 ALR 593; (1991) 30 FCR 300
Ting v Blanche (1993) 118 ALR 543
(Page 3)
1 IPP J: I agree generally with the reasons of Wallwork J and the conclusions to which his Honour has come.
2 The appellant's cause of action was pleaded in simple terms. The appellant alleged that the respondent said to Mr Culley "words to the effect that Amrie and Achmad were personal friends of the [respondent] with substantial assets, that there was no problem with the financial standing of PT and that the [respondent] would 'guarantee payment for the Shipments with his life'". The appellant went on to plead that the words so spoken by the respondent to Mr Culley constituted a representation to the effect "(a) that PT was a company of good financial standing and would pay for the Shipments; and (b) that if PT did not pay the [appellant] for the Shipments, then the [respondent] would pay the [appellant] …". The appellant then pleaded that the representation so made by the respondent was false and constituted misleading and deceptive conduct on his part.
3 The learned Commissioner found, however, that the respondent did not say to Mr Culley that PT was a company of good financial standing and would pay for the Shipments and that if PT did not pay the appellant for the Shipments, then the respondent would pay the appellant. His Honour also found that there was no evidence that established that Amrie and Achmad were directors or shareholders of PT.
4 The appellant was therefore compelled to rely only on the statement by the respondent that he would "guarantee payment for the Shipments with his life". The appellant argued that this statement alone meant that PT was a company of good financial standing and would pay for the Shipments and if PT did not pay for the Shipments, then the respondent would pay the appellant.
5 In my opinion, however, the statement that the respondent would "guarantee payment for the Shipments with his life" does not have the meaning contended for by the appellant. Taken literally, the words in question mean that the respondent would stake his life as assurance for the payment. That, in essence, is an assurance that is without content and is meaningless. The words in question constitute a puff. They do not give rise to a false or misleading conduct.
6 In the circumstances, the appellant's claim fails.
7 WALLWORK J: The appellant appeals against a judgment of a learned Commissioner in the District Court, dismissing its claim against the respondent for damages arising from losses suffered by the appellant in
(Page 4)
- connection with three shipments of frozen meat which the appellant had made to a company in Indonesia.
8 In his reasons for judgment the learned Commissioner said that the appellant's case had been that in reliance upon the respondent's statements to the appellant's principal, Mr Culley, the appellant had gone ahead with the three shipments of frozen meat to an Indonesian company PT Seraway Putra (PT) for which it had received no payment at all and had thereby suffered loss.
9 The Commissioner said that the appellant's cause of action was that the respondent had engaged in misleading and deceptive conduct when he had made the alleged statements to Mr Culley during a telephone conversation on 3 September 1996. The appellant had not relied on a cause of action based on guarantee.
10 The alleged representation by the respondent was that two Indonesian persons connected with PT were personal friends of the respondent and that they had substantial assets. Further that there was no problem with the financial standing of PT and that the respondent would "guarantee payment for the shipments with his life."
11 In the amended statement of claim it had been pleaded that the words spoken by the respondent to Mr Culley had constituted a representation to the appellant that:
"(a) PT was a company of good financial standing and would pay for the shipments and
(b) If PT did not pay the appellant for the shipments then the respondent would pay the appellant ('the representation')."
12 It was pleaded that at the time the respondent allegedly made the representation, he had intended that the appellant should rely on it and had known that it would rely on it for the purposes of:
"(i) deciding whether or not to terminate the agreement with PT and seek an alternative buyer for the shipment;
(ii) deciding whether to agree to vary the agreement by allowing payment to be made on 30 days open account;
(iii) repeating the representation to the Export Finance and Insurance Corporation (EFIC) to persuade EFIC to grant
(Page 5)
- the credit limit approval in respect of the first shipment, and
- (iv) relying on the credit worthiness of the respondent in making a decision whether to vary the agreement to allow payment on 30 days open account."
13 In his evidence-in-chief, Mr Culley said that because the appellant had not received a letter of credit from Indonesia, despite assurances that it was on its way and that a letter of credit had been established, he had not been prepared to go ahead with the three relevant shipments. He said that out of common courtesy, he had advised the respondent that he was not prepared to go ahead with the shipments; that the respondent had said that Mr Achmad and Mr Amrie, the principals of PT, were people of substance with substantial assets and that the appellant should go ahead with the first shipment; that he (the respondent) "would guarantee the payment with his life".
14 Mr Culley was asked if he had said anything in response to those words. He said that he had said to the respondent quite deliberately: "John, on your guarantee, we will go ahead with the shipment." He was asked if there was any further discussion. He said "No". He was asked whether, as a result of that discussion, he had formed any views about PT. He answered that he had and:
"That it was a company with substantial assets that John Goyder had visited on many occasions. He had visited their plantations and that Achmad and Amrie were people of substance and people that you could rely on…and that he would pay - if the money was not forthcoming, he would pay it. There was no doubt."
- I note that the last words in quotes above were Mr Culley's views and not what the respondent had said.
15 Mr Culley said that after he had spoken to the respondent he had changed his mind about cancelling the shipments because the respondent had given a guarantee. He said that if the respondent had not made those statements he would not have shipped the meat.
16 In cross-examination, Mr Culley said that he and the respondent had had a very loose arrangement:
"We would have supplied the meat. He was to supply the contacts and there was nothing formally written about it at all
(Page 6)
- … He was to receive a commission on the conclusion of the business … A share of the profits or commission, whichever."
17 Mr Culley said:
"It was never formalised. In our business it's a very opportunistic business and it does not go on a margin or a percentage margin. It's just whatever the market can bear."
18 It was put to Mr Culley that at best the respondent was to receive a cent a pound of meat. The answer given by Mr Culley was:
"In some cases it would have been a cent a pound. It could have been. It would depend. Nothing had been finalised, bearing in mind that we had only done one deal previously - that was with Anwar and Benni - and the rest of it was never concluded."
19 The learned Commissioner came to the conclusion that the appellant had gone ahead with the three shipments of meat to PT solely on Mr Culley's understanding that the respondent had guaranteed payment. However, the Commissioner said that even if the words used by the respondent had amounted to a guarantee, the appellant could not succeed on a case based on a guarantee because of the Statute of Frauds. He said that was not a point he needed to pursue because the case had not been run on that basis.
20 The learned Commissioner found that Mr Culley had given evidence that he had "relied wholly and solely" on the guarantee given by the respondent. He said that in a memorandum sent by Mr Culley to the respondent by facsimile on 14 April 1997, Mr Culley had stated amongst other things that it was on the guarantee of the respondent and because the meat had been ready for shipment for some time, that the appellant had decided to go ahead with the shipment.
21 The Commissioner found that the respondent had not engaged in misleading and deceptive conduct; that the respondent had not said anything at all about PT or the financial standing of PT during his telephone conversation with Mr Culley on 3 September 1996 and that Mr Culley had not relied on anything the respondent had said about the financial standing of Amrie and Achmad.
22 The Commissioner found that the respondent's words that he would guarantee the payment with his life did not amount to a statement about future matters. He found that the appellant had sent the shipments
(Page 7)
- because Mr Culley had understood that what the respondent had said to him in the telephone conversation on 3 September 1996, meant that the respondent would personally guarantee payment and that Mr Culley had relied upon what the respondent said on that basis. He said the appellant had no cause of action based on guarantee. For those reasons he dismissed the claim.
23 On the appeal, counsel for the appellant argued that the words spoken by the respondent that he would guarantee the payment with his life, had amounted to a representation as to what would happen if the payment was not made by PT. He argued that the respondent had in effect said: "If payment is not made, I will make the payment." He argued that it had been solely in reliance on that assurance that the appellant had gone ahead with the shipment; that in response to what the respondent had said, Mr Culley had said: "Well, on that assurance I will go ahead." It was argued for the appellant that the effect of the words of the respondent had amounted to a representation as to what would happen in the future.
24 The difficulty facing the appellant is that the words "he would guarantee the payment with his life" could mean: "I warrant that the buyer will pay." They could also mean: "I give you a very strong assurance that those people are going to pay." The words could also mean: "I know these people, I am sure they will pay you."
25 Words such as "I will guarantee payment with my life" are obviously not meant to be taken literally. In my view the words are a different statement to: "I will pay you if he doesn't". There was no finding by the learned Commissioner as to what the relevant words meant.
26 It is significant that after the respondent had said that he would guarantee the payment with his life and Mr Culley had said "quite deliberately": "John, on your guarantee we will go ahead with the shipment", there had been no further relevant discussion between them before the meat was shipped.
27 In my opinion the preferable interpretation of the words "I will guarantee payment with my life", would be: "They will pay you." That is consistent with what the respondent had earlier said being that Mr Achmad and Mr Amrie were: "people of substance with substantial assets; that we should go ahead with the shipment…."
28 An alternative proposition advanced for the appellant was that whatever the meaning of the words was, they had amounted to a representation which had induced the appellant to ship the meat and to
(Page 8)
- incur a loss. It was claimed that the respondent's conduct had resulted in an entitlement in the appellant to damages which should be assessed.
29 The question is whether the respondent had "in trade or commerce" engaged in conduct which was misleading or deceptive or was likely to mislead or deceive - s 10 Fair Trading Act 1987 (WA).
30 In this case the appellant and the respondent were in some kind of "very loose arrangement" pursuant to which the respondent in Mr Culley's words, "in some cases" would have received: "a cent a pound. It could have been. It would depend. Nothing had been finalised, bearing in mind that we'd only done one deal previously … and the rest of it was never concluded."
31 Mr Culley said that at the time he had telephoned the respondent he had not been prepared to go ahead with the shipments "and out of common courtesy, I was advising him." In essence Mr Culley had been encouraged by the respondent's assessment of their joint clients, or more strictly, the persons behind PT.
32 The respondent had said in evidence that originally when he had been contacted by Mr Amrie concerning purchasing meat from Australia, he had passed the inquiry over to Mr Culley. He said he had told Mr Culley that he would leave it in his hands and had said "these chaps I know quite well. They seem to have good substance and be well connected and I think they are quite genuine people" - reasons for judgment, par 29.
33 The Commissioner found that the evidence of Mr Culley "… includes no mention at all of the defendant making any reference to PT's financial standing or their being no problem with PT's financial standing as alleged in par 9 of the amended statement of claim" - par 40 of reasons.
34 The Commissioner further found that there having been no mention at all during the telephone conversation of PT or PT's financial standing, it was "simply not open to argue that it could be reasonably concluded from what the defendant said that he created an impression that PT was a company of good financial standing and would pay for the shipments as alleged in par 10(a) of the amended statement of claim" - par 41.
35 The Commissioner made the point in par 47, that Mr Culley had given clear evidence that he had relied 'wholly and solely' on the guarantee given by the defendant. Further: "in the memorandum sent by Mr Culley to the defendant by facsimile on 14 April 1997, Mr Culley
(Page 9)
- stated inter alia that it was on the guarantee of the defendant and because the meat had been ready for shipment for some time that the plaintiff decided to go ahead with the shipment".
36 In my view, neither s 10 of the Fair Trading Act 1987 (WA) or s 52 of the Trade Practices Act 1974 (Cth) provide any cause of action for one "partner" against another arising from the type of conversation which took place between the appellant and the respondent in this case. At best for the appellant, the appellant and the respondent were discussing whether to proceed with a shipment to a third party for their mutual advantage. That is not the kind of activity which is contemplated by the provisions in the relevant statutes.
37 Neither of the appellant's arguments are made out. I would dismiss the appeal.
38 WHEELER J: I have had the advantage of reading in draft the reasons to be published by Wallwork J. I agree with his Honour's conclusion that the words said to have been spoken by the respondent did not amount to the representation pleaded, and I too would dismiss the appeal.
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