Culley & Russell Pty Ltd v Goyder - [1999] WADC 152

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: CULLEY & RUSSELL PTY LTD -v- GOYDER [1999] WADC 152

CORAM: COMMISSIONER REYNOLDS

HEARD: 4-5 NOVEMBER 1999

DELIVERED : 16 DECEMBER 1999

FILE NO/S: CIV 3649 of 1997

BETWEEN: CULLEY & RUSSELL PTY LTD
Plaintiff
AND
JOHN GOYDER
Defendant

Catchwords:

Contract for the sale of meat - Misleading and deceptive conduct - Plaintiff/vendor alleges defendant falsely represented that the purchaser was of good financial standing and would pay and that if it didn't, he would - Turns on own facts.

Legislation:

Nil

Result:

Defendant's conduct not misleading or deceptive. Plaintiff relied on defendant's words as amounting to a guarantee. Plaintiff's claim dismissed.

Representation:

Counsel:

Plaintiff: Mr P A Tottle
Defendant: Mr J C Curthoys

Solicitors:

Plaintiff: Tottle Christensen
Defendant: Slee Anderson & Pidgeon

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

Nil

Case(s) also cited:

Kabwand Pty Ltd & Ors v National Australia Bank Limited (1989) A Tort Rep 40-950

COMMISSIONER REYNOLDS:

Introduction

The plaintiff is a company with a long established history in the business of exporting meat. Its principal and its principal trader is a person by the name of Denis Culley ("Mr Culley") who has been involved in the export of meat from Australia to overseas markets for the last 30 years. The plaintiff is essentially Mr Culley's family company. In 1996/1997 the plaintiff transacted business worth about $15,000,000 of which about $5,000,000 related to exports to Asia. At that particular time the plaintiff had eight employees. At all material times Mr Culley was a consultant to the plaintiff and his day to day activities included overseeing the trading operations of the company and ensuring that the necessary documentation was completed in relation to the purchase, supply and sale of meat to overseas companies and countries.
At the beginning of 1996 Mr Culley had known the defendant for a period of approximately 10 years. By 1996 Mr Culley and his family were personal friends of the defendant and his family. Prior to 1996 the relationship between Mr Culley and the defendant was purely social. The position changed to some extent in 1996.
The defendant is and was at all material times a farmer. In 1993 the defendant was asked to travel to Indonesia to advise an Indonesian businessman who was keen to set up a Brahman breeding herd in Indonesia. The defendant was asked to inspect the countryside in a certain part of Indonesia and advise whether it would be suitable for Brahman cattle. The defendant travelled to Indonesia on a number of occasions and developed a relationship of sorts with a number of Indonesian businessmen. During the course of his visits a variety of business opportunities were discussed with the Indonesian businessmen including cattle breeding, mineral sands and gold exploration and mining.
In about early 1996 an Indonesian businesswoman travelled to Western Australia. The defendant showed her his farming property and cattle. The Indonesian businesswoman led the defendant to believe that a market existed in Indonesia for exporting live cattle and frozen meat. At the time the defendant's expertise was in breeding cattle and not exporting frozen meat. The defendant knowing that Mr Culley had expertise in exporting meat contacted Mr Culley with the view to introducing Mr Culley to the Indonesian market.
In April 1996 the plaintiff sold some frozen meat to an Indonesian company known as PT Semarak Nusa. Two Indonesians, Muhamad Azwar ("Azwar") and Benny Wahyudi ("Wahyudi") were representatives of PT Semarak Nusa at the time. One container of meat was sent to PT Semarak Nusa in Indonesia. The plaintiff did not receive full payment for the meat. In May 1996 both Mr Culley and the defendant travelled to Jakarta and while there had a meeting with Azwar and Wahyudi and resolved the issue of payment of the outstanding balance. As a result of this experience Mr Culley told the defendant that he did not want to have any more dealings with Azwar.
In August 1996 Mr Culley received a telephone call from Azwar who mentioned that he was associated with an Indonesian company known as PT Seraway Putra ("PT"). Azwar told Mr Culley that the defendant had told him that the plaintiff could export meat to PT. After Mr Culley finished speaking with Azwar he telephoned the defendant and told the defendant that he did not wish to deal with Azwar because of the problem with payment in relation to the earlier transaction in April 1996. The defendant told Mr Culley that Azwar was simply a salesman employed by PT and otherwise had no interest in PT.
Sometime thereafter and in August 1996 the plaintiff agreed to sell and PT agreed to purchase frozen beef to be shipped to PT in Indonesia. It was agreed that three containers of frozen beef would be shipped to Indonesia. The First Shipment pursuant to Order No 7073 was for one container of frozen A‑beef blades for A$41,235.74. The Second Shipment pursuant to Order No 7075 was for one container of frozen A‑forequarter beef for A$41,679.26 and the Third Shipment was pursuant to Order No 7074 for one container of frozen A‑beef knuckles for A$49,159.93. All of the beef was actually shipped to Indonesia. The First Shipment was shipped on or about 10 September 1996, the Second Shipment was shipped on or about 27 September 1996 and the Third Shipment was shipped on or about 4 October 1996.
PT received all of the three shipments of meat but did not pay for any of it. The plaintiff has claimed against the defendant (a) damages in the sum of $132,074.93 and interest up to 31 August 1997 in the amount of $19,388.93; (b) interest on any damages which are awarded from August 1996 to the date of judgment; and (c) costs, based on an allegation that the defendant engaged in misleading and deceptive conduct.
As at 3 September 1996 PT had not put a letter of credit in place for payment of any of the meat. This was a matter of concern for the plaintiff and in particular Mr Culley. The plaintiff alleges that on 3 September 1996 it by its personal representative Mr Culley decided not to ship any of the meat to PT in Indonesia and that as a matter of courtesy Mr Culley telephoned the defendant on that date to inform him of the decision. The plaintiff alleges that when Mr Culley informed the defendant of the decision the defendant said words to the effect that Syaiful Amrie ("Amrie") and Julius Achmad ("Achmad'), the principals of PT were personal friends of his with substantial assets and that there was no problem with the financial standing of PT and that he, the defendant, would guarantee payment for the three shipments with his life. The plaintiff alleges that it was only as a result of Mr Culley's reliance on this representation by the defendant concerning the financial standing of PT and the defendant's willingness to pay for the meat being exported to PT if PT did not pay that the plaintiff decided to go ahead with all of the three shipments to PT in Indonesia.
The defendant admits that there was a conversation between him and Mr Culley concerning Amrie and Achmad. The defendant says that during the conversation he informed Mr Culley that so far as he knew Amrie and Achmad were trustworthy and men of substance. However the defendant denies that he stated that there was no problem with the financial standing of PT and that he would guarantee payment for the shipments with his life.
The plaintiff's cause of action is that the defendant engaged in misleading and deceptive conduct when the defendant made the alleged statements to Mr Culley during their telephone conversation on 3 September 1996. The plaintiff does not rely on a cause of action based on guarantee. The plaintiff's case is that in the context of everything the defendant allegedly said to Mr Culley the alleged statements by the defendant that he would guarantee payment for the shipments with his life added further weight to his statements that Amrie and Achmad had substantial assets and that there was no problem with the financial standing of PT. The plaintiff's case is that in reliance upon the defendant's statements as a whole it proceeded with all three shipments to PT for which it has received no payment at all and has thereby suffered loss.
The issues in this case are those which commonly arise in misleading and deceptive conduct cases, namely, was the statement made? and, was there reliance upon the statement? and, was the statement misleading or deceptive? and did reliance upon the statement cause loss?

The pleadings

In due course I propose to comment on material differences between the plaintiff's case as pleaded on the one hand and the evidence of Mr Culley on the other.
Paragraphs 6 ‑ 13 inclusive of the plaintiff's substituted statement of claim provide as follows:
"6.On 15 August 1996, the Plaintiff applied in writing to the Export Finance & Insurance Corporation ("EFIC") for a credit insurance policy to cover PT in respect of payment for all of the Shipments in the amount of $150,000.00.
Particulars
The application was in writing and a copy of the application may be inspected at the plaintiff's solicitors' offices.
7.On 3 September 1996, Culley telephoned the Defendant and said to him that the Shipments were ready to be shipped and there was pressure on the Plaintiff because the Shipments were perishable but that PT were having difficulty in obtaining a letter of credit and had asked the Plaintiff to vary the Agreement to ship on 30 days open account.
8.Culley said to the Defendant that the Plaintiff did not want to vary the Agreement to ship on 30 days open account but that it could and would terminate the Agreement and seek an alternative buyer for the Shipments. Culley also said that he had applied to EFIC for credit insurance to cover PT as a buyer but that EFIC would not grant a credit insurance policy because it did not have enough information about PT and that in any event it would only consider insurance cover in respect of the First Shipment.
9.In the course of that telephone conversation, the Defendant said to Culley words to the effect that Amrie and Achmad were personal friends of the Defendant with substantial assets, that there was no problem with the financial standing of PT and that the Defendant would "guarantee payment for the shipments with his life".
10.The words spoken by the Defendant to Culley constituted a representation to the Plaintiff, the impression of which was:
(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 Plaintiff for the Shipments then the Defendant would pay the Plaintiff ("the Representation").
11.At the time the Defendant made the Representation the Defendant:
(a)intended that the Plaintiff should rely on the Representation; and
(b)knew that the Plaintiff would rely on the Representation,
for the purposes of:
(i)deciding whether or not to terminate the Agreement with PT and seek an alternative buyer for the Shipments;
(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 EFIC to persuade EFIC to grant the Credit Limit Approval in respect of the First Shipment; and
(iv)relying on the creditworthiness of the Defendant in making a decision whether to vary the Agreement to allow payment on 30 days open account.
12.On 3 September 1996, Mr Culley telephoned EFIC and repeated the Representation to Mr Johnson.
13.On or about 3 September 1996, in reliance upon the Representation EFIC issued to the Plaintiff an export credit insurance policy in respect of PT for the First Shipment.
Particulars
The export credit insurance policy was in writing and is the Plaintiff's discovered document No 1.21."
Paragraph 14 essentially provides that in or about early September 1996, in reliance upon the Representation and induced by it, the plaintiff agreed to allow PT 30 days open account in respect of each of the shipments and shipped all of the meat to Indonesia.
Paragraph 15 provides that the Representation was made in trade or commerce and was, insofar as it conveyed the impression that PT was a company of good financial standing, false. The plaintiff relies on the fact that PT has never paid for the shipments to establish PT was not a company of good financial standing. Paragraph 15 also provides that the Representation, insofar as it related to future matters, namely that PT would pay for the shipments and in the event that it did not do so, the defendant would pay for the shipments, was made without reasonable grounds.
A lot of evidence was led on the history of the relationship between Mr Culley and the defendant, how the plaintiff and PT came together to make the agreement whereby the plaintiff agreed to export the meat to PT in Indonesia, the credit arrangements in relation to the agreement, the documentation and changes to it in relation to the agreement, the potential rewards for each of the plaintiff and the defendant if they singularly or together developed a business relationship with Indonesian people and/or companies including Amrie, Achmad and PT, contact including written communications and visits to Indonesia by each of Mr Culley and the defendant with Indonesians including Azwar, Amrie and Achmad and communications between Mr Culley and the defendant both before and after 3 September 1996. A key purpose of all of this evidence was to assist me in arriving at a decision on the credibility and reliability of each of Mr Culley and the defendant.
On my assessment of each of Mr Culley and the defendant in the witness box and of the evidence as a whole I prefer the evidence of Mr Culley to that of the defendant where there is any conflict or inconsistency between the two. However, having said that, I should also say there are serious differences between the plaintiff's case as pleaded and the evidence of Mr Culley. Before I refer to the differences I wish to cover the evidence on the contacts that each of Mr Culley and the defendant had with Azwar, PT, Amrie and Achmad prior to Culley and the defendant having the important telephone conversation on 3 September 1996.
I have already mentioned that the plaintiff transacted some business in April 1996 with an Indonesian company known as PT Semarak Nusa, which was represented by Azwar and Wahyudi. The plaintiff was paid about $3,000 less than the amount agreed for the shipment. Payment of the shortfall was resolved after both Mr Culley and the defendant met with Azwar in Jakarta in May 1996. Mr Culley told the defendant at that time that he did not want to do business with Azwar again because Azwar was untrustworthy. It was on this occasion in May 1996 when the plaintiff was in Jakarta that he first met Amrie who was introduced to him by the defendant.
It was Azwar who first spoke to Mr Culley in August 1996 about the plaintiff supplying meat to PT. Mr Culley gave evidence that immediately after he spoke with Azwar he telephoned the defendant and told him that he would not deal with Azwar. Mr Culley gave evidence that the defendant told him that Azwar was a salesperson with PT and had no interest in PT at all. Shortly thereafter Azwar confirmed the purchase of meat by PT from the plaintiff and after that Mr Culley telephoned Achmad and confirmed the details of the arrangement. Originally the payment was to be by way of a down payment of 25 per cent with the balance payable on presentation at PT's bank. Mr Culley gave evidence that this arrangement was later changed after he spoke with Achmad who suggested that it would be better to proceed by way of a letter of credit. Mr Culley gave evidence that he naturally agreed to proceed by way of letter of credit because it provided more security.
Mr Culley gave evidence that he later spoke with the defendant and Amrie about the letter of credit because the plaintiff had not received it and needed it before it went ahead and booked a vessel and arranged to ship the meat. There was further delay with the letter of credit which caused Mr Culley to speak with Amrie who told him that they were in the process of negotiating a facility with their bank and that a facility had been granted but not sufficient to cover their future requirements. There was further delay with the letter of credit and Mr Culley spoke with Amrie again who assured him that the letter of credit would be forthcoming.
On about 16 August 1996 the plaintiff made application to EFIC for insurance cover for the three shipments of meat to PT in Indonesia. The plaintiff sought insurance cover in the sum of $150,000. At about the time when Mr Culley was receiving assurances from Amrie that the letter of credit would be forthcoming the plaintiff had still not received approval from EFIC on its application for insurance. Mr Culley contacted Mr Johnson of EFIC and asked why approval was taking so long and was informed by Mr Johnson that EFIC was using an English credit agency which was taking sometime because they were finding it difficult to get sufficient financial background on PT.
Towards the end of August 1996 the plaintiff's suppliers were pushing the plaintiff to nominate a vessel to ship the meat so that they could program their production. At this stage the plaintiff had still not received the letter of credit. Mr Culley gave evidence that there were two options open to the plaintiff. One option was not to go ahead with the sale in which case the meat could have been readily sold to other markets in Malaysia or Singapore or to other buyers in Indonesia. Mr Culley gave evidence that it was upon deciding to pursue this option that he telephoned the defendant as a courtesy to inform him of the decision not to ship the meat to PT.
This provides the background so far as the plaintiff and Mr Culley are concerned to the telephone conversation between Mr Culley and the defendant on 3 September 1996. As at that date Mr Culley had communicated with both Amrie and Achmad but only personally met Amrie. Mr Culley gave evidence that it was not until sometime in late September or December 1996 that he first personally met Achmad. The plaintiff gave evidence to the effect that prior to 3 September 1996 he did not know anything about either Amrie or Achmad other than what the defendant had told him which was they were men of substance and that they had substantial assets, that Achmad was the group treasury for a company that controlled the franchise for the Hilton Hotel in Jakarta and that they were very interested in importing Australian meat.
The defendant gave evidence that he first met Achmad when he was in Indonesia in December 1993. The defendant also gave evidence of a meeting he had with Achmad at the Hilton Hotel in which Achmad told him that he had a senior position with American Express and that he had recommended to Bam Bam Suharto that areas in Sumatra be looked at for cattle breeding. The defendant said that he was flown to Sumatra and met there by Achmad who drove him to a very large plantation of cocoa and palm oil owned by him. The defendant said that they then drove to another place called Manna where Achmad and his father owned property. The defendant said that they stayed there over night and on the following morning he and Achmad looked at various locations for cattle breeding. The defendant added that he advised Achmad that the locations were not suitable for cattle breeding.
The defendant gave evidence that he met Achmad again when he returned to Indonesia about five or six months later. He gave evidence to the effect that he was Achmad's guest at the Hilton Hotel. He also said that Achmad told him that he was working for a very large company which controlled the Hilton Group and that he was the Senior Director of Finance for the Hilton Hotel. The defendant gave evidence that Achmad purchased tickets for him to fly to Sumatra where he met Amrie who in turn showed him prospective areas for mineral sands and gold. The defendant gave evidence that rock samples were taken for gold which were later analysed producing good results.

The defendant gave evidence that he returned to Indonesia some months later and spent four days in the jungle in Sumatra looking at further prospective areas for gold. The defendant said that the terrain in the jungle was exceptionally difficult which caused him concern about his own welfare. He gave evidence to the effect that Amrie and Achmad gave him great assurance about his safety in the jungle. No mishaps occurred and he returned to Jakarta where he again personally met with Achmad and then returned home. The defendant gave further evidence that he returned to Indonesia on another occasion accompanied by a geologist.
It was by reference to these visits to Indonesia and contacts with Amrie and Achmad that the defendant gave evidence to the effect that he believed they were well connected somewhere along the way. He also said "they seem to have quite substantial plantations and things like this and I realize that they were people that I felt comfortable with and I was quite happy to discuss these propositions that we were looking at".
The defendant gave evidence that when he was contacted by Amrie about purchasing meat from Australia he passed the enquiry over to Mr Culley. The defendant gave evidence that he told Mr Culley that he would leave it in his hands and said "these chaps I know quite well. They seem to have good substance and well connected and I think they are quite genuine people".
This provides the background so far as the defendant is concerned to the telephone conversation between Mr Culley and the defendant on 3 September 1996.
Mr Culley gave the following evidence during his evidence‑in‑chief on the substance of the telephone conversation between him and the defendant on 3 September 1996:
"Did you communicate that decision to anyone outside of the plaintiff company?---Yes, I did.
Who was that?---Mr John Goyder.
How did you? What form did that communication take?---I telephoned him and I told him that we had not received the letter of credit from Indonesia despite assurances that it was on its way and that a letter of credit had been established. We had not received it. I was not prepared to go ahead with the shipments and out of common courtesy, I was advising him.
Yes, and did he say anything in response to that?---Yes, he did.
What did he say?---He said that Julius Achmad and Syaiful Amrie were people of substance with substantial assets, that we should go ahead with the shipment and that he would guarantee it with his life ‑ he would guarantee the payment with his life.
Did you say anything in response to those words?---Yes, I did.
What did you say?---I said to him quite deliberately, 'John, on your guarantee we will go ahead with the shipments.'
Was there any further discussion?---No.
As a result of that discussion did you form any views about PT Seraway Putra?---Yes, I did.
What views were they?---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.
Yes?---And that he would pay ‑ if the money was not forthcoming, he would pay it. There was no doubt.
Before the telephone conversation that you have just given evidence about you have told the court that you weren't going to ship the meat to Indonesia or to these Indonesians?---Yes.
Afterwards was that still your position?---Yes.
That you weren't going to ship---?---No. After I had spoken to Mr Goyder I had changed my mind because he had given a guarantee.
Yes, and if Mr Goyder had not made the statements about which you have just given evidence, what would you have done?---I would not have shipped the meat. I had given instructions."
Immediately after the evidence to which I have just referred Mr Culley gave further evidence that he contacted EFIC in an effort to finalize insurance for the three shipments of meat to Indonesia. He was asked and said:
"Following the conversation with Mr Goyder, did you have any further telephone conversations?---Yes.
With whom were they?---I called Mr John Johnson at EFIC Insurance.
What did you say to him?---I asked him if he had approved the application and he said, no, and I asked him, 'Why not?' and he said he still did not have sufficient financial information on the company.
Did you say anything else to him?---Yes. I told him I had had a telephone discussion with John Goyder. I explained who John Goyder was and that he had guaranteed the payment.
Thank you, and did Mr Johnson say anything to you in response to that?---Yes. He said that he would issue an approval for a credit limit of $42,000."
At different times during cross‑examination Mr Culley was asked about the alleged statement incorporating the use of the word "guarantee" made to him by the defendant in the telephone conversation on 3 September 1996. Mr Culley was asked and said:
"But you can't point to any agreement in writing with PT Seraway Putra?---Not in writing. PT Seraway Putra had requested at the end of August that we ship this. They told us they were having trouble with the letter of credit. I told John Goyder and I told them I was not prepared to ship without the letter of credit, I had no EFIC insurance, and it was only on John Goyder's guarantee and I told him straight out that was the only reason that we were prepared to ship that meat to Indonesia.
…
Are you suggesting to this court that for the sake of $340 a shipment, Mr Goyder would have guaranteed and put himself from a possible income of $1200 for a liability of $135,000? Is that what you're saying?---Firstly, those documents of Matthews were solely draft documents. They are not approved documents. There was nothing agreed. That's Matthew's interpretation of what a normal margin would be. Secondly, in our business it's a high turnover, low profit margin business. An average return on a sale of one container‑load of meat would vary from between 1 and 2 cents a pound. That is an average margin.
Whatever you look at it on---?---Half of 1 per cent.
- - - what you're asking this court to accept is that Mr Goyder was prepared to accept a potential liability of $135,000‑odd for a return of barely over $1000?---Yes, that is the business I'm afraid.
The simple fact is that he didn't give any such guarantee, did he?---John Goyder gave me an unconditional guarantee.
Firstly, yes or no?---The answer is yes, he did give me a guarantee.
…
You said that you met Achmad in September or December 1996. Mr Goyder didn't introduce you in September 1996, did he?---I had never met Mr Julius Achmad before in my life. He was introduced to me by John Goyder.
When?---As I said, I can't remember the exact date. It was either in September or December 1996.
It was December 1996, wasn't it, when you went to try and recover the funds?---My original recollection was September 1996. It had been suggested by John Goyder later on that it was December 1996 and, as I said, my memory doesn't differentiate between the two. I can't really remember whether it was the September 1996 trip or the December 1996 trip.
In the conversation that you had with John Goyder on 3 September 1996, what he said to you was that he trusted him with his life?---I don't know who told you that. That was definitely not what was said in that conversation, and I repeated it back to John Goyder that we were going to ship the meat on his guarantee.
That's simply not correct, is it?---That is the honest truth, I'm sorry.
…
Now, just if you could revisit your evidence concerning why - I think that your evidence was that you had a term draft payable 15 days after bill of lading instead of 30 days so that they would pay sooner. Is that correct?---Yes. My understanding of it was, and this emanated again from Deborah Tarabini East. I was in Jakarta at the time or on my way to Jakarta and she endeavoured to collect the moneys as quickly as possible and that's why she tightened the term draft to 15 days.
Changing the time period from 15 days for a term draft for quicker payment, that would be one thing, but if there was already an agreement as to open credit, why didn't you put, 'Open credit payable 15 days after bill of lading date'?---Again I go back to what I said before. It was an endeavour to collect the funds as quickly as possible.
As quickly as possible. Why not put it - What has open letter of credit or - - -?---Open letter of credit - - -
- - - term of draft got to do with it?---Well - - -
It has got nothing to do with - - -?---The letter of credit was not forthcoming. It was obviously - and we did not ship the meat until we had a guarantee from John Goyder that was voluntarily given by John Goyder. It was not requested by us at all. I rang John Goyder - - -
Isn't that the reason why in fact, Mr Culley, you were prepared to let it go on open credit because you were expecting more business from the Indonesians and you were prepared to let it go on open letter of credit because of your expectation of more business?---No, that is quite false. In fact, I have said before that I rang John Goyder and told him we were not prepared to ship it and I rang John Goyder to tell him that the shipments were not going to go ahead and it was at John Goyder's insistence and his guarantee and only on his guarantee that those shipments go ahead and I made it perfectly clear to John Goyder."
Deborah Tarabini East was an employee of the bank used by the plaintiff. Mr Culley was cross‑examined on the substance of some of the pleadings in the original statement of claim filed in these proceedings. Paragraphs 7, 8 and 10 of the original statement of claim provide as follows:
"7.In or about September 1996, in the course of a telephone conversation, the Defendant said to Culley words to the effect that Amrie and Achmad were personal friends of the Defendant with substantial assets, that there was no problem with the financial standing of PT and that the Defendant would 'guarantee payment for the shipment with (his) life'.
8.The words spoken by the Defendant to Culley constituted a representation to the Plaintiff, the impression of which was that PT was a company of good financial standing and that the Plaintiff would be paid for the Shipments ('the Representation').
…
10.In reliance upon the Representation and induced by it, in or about October 1996, the Shipments were shipped to Indonesia by the Plaintiff."
When Mr Culley was cross‑examined he was shown the original statement of claim and in particular paras 7, 8 and 10 and he was asked and said inter alia:
"They are not, are they? I mean, on a simple reading of them, Mr Culley, they're not, are they, because you say in paragraph 10 - - -?---The fact is that I called John Goyder, he gave a guarantee and I relied wholly and solely on that guarantee and I told John Goyder that and repeated it to him.
So despite the fact that you now say you relied wholly and solely on the guarantee, in fact what this statement of claim said is that comments made to you that PT was a company of good financial standing and that the plaintiff would be paid for the shipments is what caused you to ship the meat?---If you read paragraph 7 - - -
No, just look at 8. That's what it says, doesn't it?---Paragraph 8 says what it says, yes, it does, but I don't take paragraph 8 as being the whole document. I take it there's another - what is it - 13 paragraphs and clauses in that document.
Let's go back to paragraph 7. You've just said that what you relied upon was wholly and solely the guarantee from John Goyder?---Yes, and I told him that.
All right, so what you've said here about PT being of good financial standing and Amrie and Achmad were personal friends of the defendant with substantial assets, you now say had nothing to do with why you shipped it, because you've just said you shipped it wholly and solely on John Goyder's alleged guarantee?---I'm sorry. I may understand where you're trying to take me, but I don't understand the question. The plain fact of the matter is that John Goyder told me in that conversation that they were people of substance and with substantial assets and that he would guarantee the payment with his life. Now, he would guarantee it with his life, and that was what he said to me, and if these two paragraphs don't say that in a legalistic manner, I'm sorry, but that's how I read it.
Let's not worry about that. You've just said in your evidence that you relied wholly and solely on John Goyder's guarantee?‑‑‑I did and I told him I would ship the meat on his guarantee, and I repeated it to him.
So the position of Amrie and Achmad and the financial standing of PT had nothing, on your express evidence, to do with why you shipped the meat?---John Goyder gave me a guarantee. I shipped the meat on John Goyder's guarantee and I made it perfectly clear to John Goyder."
On 14 April 1997 Mr Culley on behalf of the plaintiff sent a facsimile memorandum to the defendant on the subject of the outstanding debt by PT to the plaintiff for the shipments of meat to Indonesia in which Mr Culley stated inter alia:
"… We were assured by Mr Syaiful (Paul) Amrie and Mr B Julius Achmad (we were led to believe that they were both Directors of PT Seraway Putra) that the letter of credit was being established. On the guarantee of John Goyder (a personal friend of Syaiful and Julius) and as the meat had been ready for shipment for some time, we decided to go ahead and ship. Frozen meat must be shipped within 90 days of production and we were being pressured by the supplier to ship.
…"
Mr Culley gave evidence that the defendant did not respond to this facsimile memorandum. The defendant gave evidence to the effect that he could not recall receiving a facsimile of the memorandum. I accept Mr Culley's evidence that he sent a copy of this memorandum to the defendant by facsimile on 14 April 1997.
During the defendant's evidence in chief he was asked about the substance of the conversation between him and the plaintiff on 3 September 1996. He was asked and said:
"Can you tell his Honour about that conversation?---Dennis said he was supplying them with some meat and he couldn't get a letter of credit and what would he do. I said, 'Well, Dennis, I have been into the jungle with them and my wife said to me that I had trusted them with my life,' and I said I felt that they were men of substance and they would still pay for the meat.
Did you ever use the word 'guarantee'?---I never used the word 'guarantee'.
Did you ever say anything about the status of the company?---I didn't know a lot about the company at all, to be quite honest. I knew the two gentlemen. I didn't know a lot about the company.
Did you say anything about the company?---To the best of my knowledge - I saw the letterheads and things but to the best of my knowledge, I knew that Paul and Achmad had good properties, good investments, and looked to be of solid standard, status."
I prefer and accept Mr Culley's version of what was said during the course of the conversation between him and the defendant on 3 September 1996. I have previously mentioned that there are serious differences between the plaintiff's case as pleaded and the evidence of Mr Culley. I now propose to outline these serious differences.
The evidence of Mr Culley on the substance of the conversation and in particular what the defendant said to him during the conversation 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 para 9 of the amended statement of claim. Further, there is no mention at all by Mr Culley that he told the defendant that PT had asked the plaintiff to vary the agreement to ship on 30 days open account as alleged in paras 7 and 8 of the amended statement of claim. Further again, there is no mention at all by Mr Culley that he told the defendant that he had applied to EFIC for credit insurance to cover PT as a buyer but that EFIC would not grant a credit insurance policy because it did not have enough information about PT and that in any event it would only consider insurance cover in respect of the First Shipment as alleged in para 8 of the amended statement of claim.
There being no mention at all during the telephone conversation of PT or PT's financial standing it is 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 para 10(a) of the amended statement of claim. Further, the defendant's statement that Achmad and Amrie were people of substance with substantial assets does not provide a basis for drawing the conclusion pleaded in para 10(a) of the amended statement of claim. There is no reliable evidence from which it can be concluded on balance that Amrie and/or Achmad were directors and/or shareholders of PT. In any event the fact that directors or other officers of a company might be of good financial standing does not provide a basis for drawing the conclusion that the company is of good financial standing.
Paragraph 12 of the amended statement of claim alleges that Mr Culley repeated "the Representation" as pleaded in paras 10(a) and 10(b) to Mr Johnson at EFIC. Paragraph 13 of the amended statement of claim alleges that EFIC issued to the plaintiff an export credit insurance policy in respect of PT for the First Shipment in reliance upon "the Representation" so pleaded. Mr Culley gave no evidence at all that he made any mention to Mr Johnson of the defendant saying that PT was a company of good financial standing and would pay for the shipments. When Mr Culley gave evidence about his conversation with Mr Johnson which lead to EFIC issuing the policy for the First Shipment all he said about his telephone conversation with the defendant on 3 September 1996 was that the defendant had said that he would guarantee the payment. It follows that it is simply not open on the evidence to conclude that EFIC issued the policy of insurance in reliance on something that the defendant had said about PT's good financial standing. I will expand on this aspect of the evidence in a moment.
In my opinion in light of the serious shortfalls of Mr Culley's evidence on the substance of what the defendant said during the conversation compared to the pleadings in the plaintiff's amended statement of claim to which I have just referred it would not be open to reach any conclusion on balance on any of the allegations set out in paras 11, 12, 13, 15(b) and 15(c) of the plaintiff's amended statement of claim. Further and in relation to para 15(b) of the plaintiff's amended statement of claim in my opinion the fact that PT has never paid for the shipments does not of itself provide a basis for drawing the conclusion that PT was not a company of good financial standing.
It is simply not open on Mr Culley's evidence to conclude that in the context of everything the defendant said to him that the defendant's words "that he would guarantee the payment with his life" bolstered other words to produce the result that the defendant represented that PT was of good financial standing and would pay for the shipments. Further, it is simply not open on Mr Culley's evidence to conclude that he relied upon the defendant's words "that he would guarantee the payment with his life" as adding weight to other words said by the defendant to produce a representation that PT was of good financial standing and would pay for the shipments. Neither of these two conclusions are open because the defendant made no mention at all about PT or PT's financial standing. Further, the second of these two conclusions is not open given the express evidence of Mr Culley reflected in the passages to which I have referred on how he understood and relied upon the defendant's words of guarantee.
This leads me to the fundamental difficulty which in my opinion the plaintiff faces in succeeding in this case. On my assessment and even accepting Mr Culley's version of his conversation with the defendant on 3 September 1996 the plaintiff's cause of action based on misleading and deceptive conduct is not supported by the evidence. It is arguable that the defendant's words "he would guarantee it with his life" do not amount to a guarantee. However, the plaintiff's case as pleaded is not based on guarantee and so I need not take that point any further. However I have no doubt and find as a fact that the plaintiff went ahead with the three shipments of meat to PT in Indonesia solely on Mr Culley's understanding that the defendant guaranteed payment. Even if the words used by the defendant amounted to a guarantee the plaintiff would not succeed on a case based on a guarantee because of the Statute of Frauds. The plaintiff may also have had a problem in establishing consideration if its case was based on a guarantee but this is not a point that I need to pursue in order to determine this case.

It is clear from Mr Culley's evidence of the conversation itself that he took the defendant's words "that he would guarantee the payment with his life" in isolation to the rest of what the defendant said. Upon the defendant using these words Mr Culley then deliberately stated to the defendant "John, on your guarantee we will go ahead with the shipments".
It is also clear from Mr Culley's evidence as a whole and in particular from all of the passages to which I have referred that he did not relate the defendant's words "that he would guarantee the payment with his life" to the defendant's earlier statement in the conversation about the financial standing of Amrie and Achmad. I repeat that Mr Culley made no mention at all of the defendant saying anything about the financial standing of PT. When Mr Culley spoke with Mr Johnson at EFIC he did not tell Mr Johnson that the defendant had said anything about the financial standing of Amrie and/or Achmad and/or PT. He simply said that the defendant has guaranteed the payment. In other words he spoke with Mr Johnson about the defendant guaranteeing payment in isolation from and without any reference to the statement by the defendant on the financial standing of Amrie and Achmad. Further, Mr Culley gave clear evidence that he relied "wholly and solely" on the guarantee given by the defendant. Further again, in the memorandum sent by Mr Culley to the defendant by facsimile on 14 April 1997 Mr Culley 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.
For all these reasons I find that the defendant did not engage in misleading and deceptive conduct. In particular I find that:
1.the defendant did not say anything at all about PT or the financial standing of PT during his telephone conversation with Mr Culley on 3 September 1996;
2.Mr Culley did not rely on anything the defendant said about the financial standing of Amrie and Achmad;
3.Mr Culley did not rely on the defendant's words "that he would guarantee the payment with his life" as adding weight to what the defendant had earlier said during the conversation about the financial standing of Amrie and Achmad;
4.Mr Culley did not rely on the defendant's words "that he would guarantee the payment with his life" as an assurance or representation by the defendant that PT would pay for the shipments. In any event a statement that if a company does not pay I will pay is not a representation that the company will pay;
5.the defendant's words "that he would guarantee the payment with his life" do not amount to a statement about future matters;
6.the plaintiff sent the shipments because Mr Culley understood what the defendant said to him in the telephone conversation on 3 September 1996 to mean that the defendant would personally guarantee payment and Mr Culley relied upon what the defendant said on that basis. The plaintiff has no cause of action based on guarantee.

Conclusion

For all these reasons I am of the opinion that the plaintiff's claim should be dismissed. I will hear from the parties on the question of costs.