Denny v Pirtek (Adelaide) P/L

[2013] SADC 144

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil: Minor Civil Review)

DENNY v PIRTEK (ADELAIDE) P/L & ANOR

[2013] SADC 144

Judgment of His Honour Judge Tilmouth

1 November 2013

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES

Review from a judgment given in a minor civil action affirmed on the merits.  Turns on own facts.

District Court Act 1991 (SA) s 42H(2), referred to.

DENNY v PIRTEK (ADELAIDE) P/L & ANOR
[2013] SADC 144

The Issue

1. This is an application for a review of the decision made in the minor civil jurisdiction of the Magistrates Court, by which the applicant was found liable to the respondent for an outstanding debt owed to the respondent, which the applicant had personally undertaken to pay.

   Underlying facts

2. The respondent is a supplier of fluid hoses, joiners and couplings.  It supplied to Fumigation World Pty Ltd, of which the applicant, Mr Denny, was Director, goods of that nature to the value of $9,957.13, invoiced on 10 June 2010.  There is no dispute that $4,500 of this was repaid, so the balance owing was $5,457.13.  The Magistrate gave judgment in favour of the respondent for that sum, plus costs and interest. 

3. At the hearing before the Magistrate, the issue was whether or not a new account application form executed by Mr Denny (Exhibit P1) constituted a personal undertaking by him for the payment of goods supplied to Fumigation World Pty Ltd by Pirtek.  The relevant part of the application form reads:

   As a Director(s) of the Company am/are personally liable for all debts owing to Pirtek (Adelaide) Pty Ltd and any other Pirtek Franchisees in Australia to whom the company is indebted.  I/we agree that the Pirtek company entering into this agreement does so both in its own capacity, and as agent for any other Pirtek Franchisees who provide goods and services to the Company.

4. The Magistrate concluded that these words were clear enough to have constituted a personal undertaking to pay the company’s debts.  He also accepted the evidence given by Mr Rench, a Director of Pirtek, that Mr Denny had previously acknowledged responsibility and had undertaken to arrange payment of the outstanding balance, a finding based upon emails also tendered before the Magistrate.

   The review

5. The focus of attention became somewhat different on review in this court.  Mr Denny pointed out that although the application was dated 1 February 2010, it was not transmitted by him to Pirtek until 2 June 2010.  A fax transmission imprint at the top of the document supports that contention.  The application for credit was not formally accepted by Pirtek until 30 June 2010.  Hence the agreement by which he assumed liability post-dated the supply and invoicing of the subject goods.  Mr Denny argued therefore that he could not be held personally responsible for the cost of goods supplied before the new account facility was established.  There is some force in this submission because there is little to indicate or suggest that it was mutually intended the personal undertaking was to operate retrospectively. 

6. However, it is not necessary to express a concluded view on this question.  Pirtek supplied the goods in good faith during a period when the application for credit was under review.  They were so supplied as a matter of urgency at the special request of Fumigation World, which is no longer trading and unable to satisfy the debt.  Mr Denny is himself financially straightened.  Processing the application was delayed because Fumigation World failed to notify of a referee it put forward as to its credit-worthiness.  Mr Rench pointed out that the previous arrangement was cash only and these goods would never have been supplied except on the understanding that Mr Denny personally guaranteed payment, in default of his company doing so.

7. Mr Rench referred to subsequent emails in which a meeting of 19 April 2011 was recorded.  At the meeting he claims Mr Denny ‘indicated that he’d be making … payment … and would do so, if need be, using his own funds.’[1]  The email was produced in the review dated 19 April 2011.  It read:

   Tom, Following our recent meeting that you attended at our office on 5 April at 11 a.m. can you please give me an update on the following.

   .You indicated that you would be making complete and final payment mid-May and you would do so if needed using your own funds.

   .You would have by now served legal action on Mark, former director and current shareholder, for the outstanding debt owed to Fumigation World as Mark was customer of this company as well, he had confirmed to you that the debt was his and he would be making full payment of it. You were confident that once served with the legal notice he would be making full payment to you.

   .You stated the total outstanding debts due would be sufficient to clear your Pirtek account …

   .       The current balance owed to Pirtek is $5,467.13.

   Mr Denny responded on 13 May ‘ … it appears we will have this by the end of next week.’[2]

   [1]    T5.25 - .25, 13/6/13, T10.19 - .34, 15/10/13

   [2]    T11.33 - .39, 15/10/13

8. The earlier emails of themselves are indecisive of personal liability, because although there is an undertaking to make payments, they are directed from and to Fumigation World’s own email address, and they are far from unequivocally clear that Mr Denny is acknowledging or assuming personal responsibility for the repayments.

9. However, the meeting as recorded in the email in April 2011 stands somewhat differently.  Clearly Mr Denny either acknowledged or assumed responsibility for the payment, quite apart from whatever other undertakings were given in the past.  So much is clear from the email recording the discussion of the meeting and more importantly, Mr Denny’s return acceptance of same.  Most significantly of all, he did not express dissent from or protest the assertion that he would have resort to his personal funds if required.

   Conclusion and orders

10. In the result therefore, the decision of the Magistrate to uphold the personal liability for payment of the debt must be affirmed. The application for review is dismissed accordingly. There will be no order for costs: s 42H(2) District Court Act 1991 (SA).