Derfell Pty Ltd v Pratico
[2005] VSC 146
•4 May 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 8639 of 2002
| DERFELL PTY LTD | Plaintiff |
| v | |
| ROCCO PRATICO AND ORS | Defendant |
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JUDGE: | KELLAM J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 4 May 2005 | |
DATE OF JUDGMENT: | 4 May 2005 | |
CASE MAY BE CITED AS: | Derfell Pty Ltd v Pratico and ors | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 146 | |
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GUARANTEE – Liability of guarantors – Certificate of officer of the plaintiff as to amount of debt – Undefended hearing.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Crennan | Macpherson and Kelly |
| For the Defendants | No appearance |
HIS HONOUR:
The plaintiff seeks to enforce the joint and several liability of the defendants under an agreement of guarantee and indemnity entered into by the defendants on 21 September 1999.
The case as outlined to me by Mr Crennan of counsel who appears for the plaintiff, is that Oasis Petroleum Pty Ltd, of which company each of the defendants was at all relevant times, a director, is indebted to the plaintiff in the sum of $6,189,305.41. It is submitted that the debt is secured by the guarantee and that the debt in full is outstanding and no part of it has been paid.
It is appropriate to outline something of the history of the proceedings, it being the circumstance that none of the defendants appeared here today when the matter was called on, to defend the matter or to make any submissions before me. The proceeding was commenced by a writ and statement of claim issued on 17 December 2002. Notice of appearance was filed on the behalf of the defendants by solicitors on 24 December 2002. A defence was filed on behalf of all three defendants on 4 February 2003, and subsequent to that and on 9 September 2003 the plaintiff filed and served an amended statement of claim, pursuant to orders of a Master made on 2 September 2003.
Soon after the filing of the amended statement of claim a Master gave leave for the defendants to file and serve an amended defence. That amended defence was ordered to be filed on or before 10 October 2003. No amended defence has been filed. None of the defendants has made discovery nor have any of them filed witness statements or outlines of argument. The solicitors on the record ceased to act for the second and third defendants on 21 July 2004 and were given leave to cease to act for the first defendant on 31 March 2005.
The plaintiff filed and served an affidavit of documents dated 5 July 2004 and filed further affidavits subsequently. An issue which did arise in the course of the hearing today and which, very properly, was raised with me by Mr Crennan is the fact that discovery by the plaintiff has not been as fulsome as it perhaps should have been. In particular books of account and business records upon which the plaintiff seeks to rely were not discovered, and neither were other financial records. In particular, a certificate of the appropriate officer of the plaintiff as to the debt was not provided by way of discovery. The guarantee provided that a certificate signed by an officer of the company shall be “conclusive evidence” of the truth of its contents save where there was manifest error on the face of the certificate.
I express no opinion as to whether the latter document needed to be provided by way of discovery, it being a matter relevant to proof of the debt, rather than a document which came into existence in the course of the transaction, but in any event it should be noted that the material which was not provided pursuant to the discovery process was provided to each of the defendants in court books which were served upon each of them on 19 April this year. I am satisfied that each of the defendants has notice of the fact of these proceedings; has notice of the nature of the claim made by the plaintiff; has notice of the amount claimed by the plaintiff and the basis upon which the plaintiff puts its claim. Furthermore, I am satisfied that service of the documents upon which the plaintiff seeks to rely has been effected upon each defendant and that each of them is aware of the fixing of this matter for hearing before the court.
To return to the issues before me, the plaintiff relies upon a number of admissions that have been made in the course of the pleadings and which were delivered by the defendant in the proceeding. In particular Mr Crennan relies upon admissions made in relation to the existence of the guarantee and its terms. Mr Crennan relies upon admissions by the defendants of supply by the plaintiff, of fuel and lubricants, pursuant to the supply agreement and admissions that Oasis did not pay for all motor fuels and lubricants supplied to it in the period February 2002 to October 2002. The defence filed on behalf of each defendant admits that by deed of guarantee and indemnity dated 21 September 1999 the defendants jointly and severally guaranteed the payment to the plaintiff (as an assignee) all moneys owing by Oasis to it.
Furthermore the giving of the guarantee and the indemnity is admitted by reason of the notice to admit which was served by the plaintiff and dated 14 September 2002. The first defendant was the only one of the three defendants to file and serve a notice of dispute in answer to the notice to admit, but there was no disputation by him of the fact of the giving of the guarantee and indemnity alleged in the notice to admit. I am satisfied on the evidence before me that the plaintiff is entitled to rely upon admissions of the defendants in relation to the existence and nature of the guarantee document. Furthermore, of course, the document itself has been produced before me and speaks for itself.
The documentary evidence before me establishes that Triton Petroleum (Vic) Pty Ltd entered into a “fuel and lubricant supply” agreement with Oasis Petroleum Pty Ltd on 28 September 1999 for a period of 36 months commencing on 1 August 1999. On 21 September 1999 each of the three defendants, together with one John Mirabito, executed the guarantee agreement. On 7 February 2001, Triton released Mirabito from his obligations under the guarantee. The deed of release was executed by each of the defendants. On 5 March 2002 Triton sold its business to the plaintiff, and assigned its rights under the charge guaranteed by the defendants and its rights to the fuel and lubricant supply agreement to the plaintiff.
In so far as the admission of the supply of fuel and lubricants is concerned, the notice to admit sought admission as to that matter and it is not disputed in the first defendant’s notice of dispute. Furthermore there is an allegation made by the defendants in the defence which was filed by solicitors, who were then acting on their behalf, that the supply of fuel and lubricants was pursuant to a fuel and lubricant supply agreement.
The defence filed on behalf of the defendants did not admit that the plaintiff is an assignee of Triton although that non-admission is inconsistent with the positive allegation made in paragraph 14 of the defence that Oasis purchased petroleum products from the plaintiff and “its assignor” pursuant to the supply agreement dated 28 September 1999. I am satisfied on the evidence before me that Triton did assign validly its rights under the guarantee and under the fuel supply agreement to the plaintiff.
The defence filed by the defendants does raise a number of other issues. First, the incorporation of the plaintiff is not admitted. That matter is resolved easily, the plaintiff having tendered before me a copy of the certificate of incorporation pursuant to the Evidence Act.
I heard evidence from Mr Robert Elston, the financial controller of the plaintiff at the relevant time. His evidence relates to the signing of the certificate of indebtedness in respect of the debt under the guarantee and indemnity.
I heard from David Parker, the director of Triton 2001 Pty Ltd, as to the obtaining of the guarantee and the indemnity from the defendants and the transfer of the business of Triton, including the benefit of the relevant agreements to the plaintiff.
I heard from Mr Ronald Gerard Willemsen, solicitor for the plaintiff, as to the sending to the defendants of letters of demand, and of the certificate of indebtedness.
Finally I heard from Harriet Yates, a credit analyst employed by the plaintiff, in relation to the books of account and records which evidenced the debt, and as to the evidence that the debt remains unpaid.
Turning to the quantum of the debt pursuant to the terms of the guarantee, as I have said, Mr Elston has certified that the amount of the Oasis debt is that claimed by the plaintiff. I accept the submission made by Mr Crennan that the certificate of Mr Elston, an office of the plaintiff company, is conclusive evidence of the amount of the debt. [1] Nevertheless, in addition, I have the benefit of the evidence of Ms Yates, whereby the accounts of the plaintiff were produced before me, and that evidence corroborates the certification made by Mr Elston.
[1]Dobbs v National Australia Bank (1935) 53 CLR 643.
The relevant term of the guarantee is pleaded in the amended statement of claim, in paragraph 4A(1) which pleading, subject to production of the guarantee at trial was admitted by the defendants. The certificate accords with the books of account and I am satisfied that the debt is as claimed and is unpaid.
Accordingly there can be no argument about the fact of the debt and its quantum, as between Triton and Oasis. The question is, “Has the plaintiff proved that the guarantors are liable to meet that debt?” I am satisfied on the evidence before me, as I have said, that the plaintiff acquired the business of Triton. I am satisfied that as part of that transaction the benefit of the supply agreement was assigned to the plaintiff, the plaintiff thereby becoming the assignee of Triton.
The Oasis debt is an amount secured by the guarantee. I am satisfied that demands have been made for payment of the debt and payment has not been made and accordingly, I am satisfied that the guarantee executed by each of the three defendants, in September 1999, does secure the debt.
Mr Crennan, very properly raised with me the fact that the defendants in the defence which was filed on their behalf by the solicitors who were then acting for them, raised three specific issues of defence. As stated above the defendants did not appear before me. No defence to the amended statement of claim was filed, nor have outlines of argument or court books been filed in relation to any of these defences.
However, to deal briefly with the issues raised in the defence, the first issue is that the plaintiff’s predecessor, Triton, engaged in deceptive and misleading conduct by not explaining the effect of the deed of release of Mirabito from the guarantee and indemnity dated 7 February 2001. This document is before me as part of the court book. As submitted by Mr Crennan, the defence is of no substance. The effect of the deed of release is clear, obvious and apparent on its face.
The second positive defence raised in the defence filed is an allegation of breach by the plaintiff of an implied term, of the supply agreement between it and Oasis. No particulars to this allegation in the defence are provided. However, it would appear to be that there is an assertion that the plaintiff, or Triton, was in breach of the fuel supply agreement because it measured fuel, when delivered, at ambient temperature rather than what is alleged to be the subject of an Australian standard of 15 degrees Centigrade.
I accept the submission made by Mr Crennan that there is no basis for the implication of such a term. As he submits it is neither obvious nor necessary for the contract to be effective.[2] In any event as Mr Crennan submits, if that is an issue it is an argument which should properly be made by Oasis. The defendants are not parties to the supply agreement. Mr Crennan took me to authorities which establish that a claim, which properly belongs to the principal debtor, cannot be brought by a guarantor unless the principal debtor is a party to the proceeding.[3] I accept that that is so but in any event, it is not a relevant issue in the circumstances where there is no basis for the implication of the pleaded alleged implied term.
[2]BP Refinery (Westernport) Pty LTd v Shire of Hastings (1977) CLR 266 at 283.
[3]Indrisie v General Credits Limited [1985] VR 251; Florgale Uniforms Pty Ltd v Order [2000] VSC 427.
Finally, there is an assertion made in the defence which was filed, that the plaintiff was in breach of s.46 of the Trade Practices Act. Once again no particulars were provided in relation to this matter, it being asserted that further particulars would be provided after discovery. No such further particulars were provided.
Mr Crennan drew my attention to s.3 of the Jurisdiction of Courts (Cross Vesting) Act 1987, and pointed out that a claim arising from a breach of s.46 is defined as a special Federal matter and there would require to be an order of this Court pursuant to the Cross Vesting Act proceeded by written notice to Attorney’s‑General to make such submissions as they consider appropriate on the matter. No such order has been sought. In any event, it appears to me to be the circumstance that there is no basis on which that defence could be considered seriously by me.
In the circumstances I am satisfied as stated, that Oasis is indebted to the plaintiff in the sum of $6,189,305.41. I am satisfied that the debt is secured by the guarantee. I am satisfied on the evidence before me that the debt is due and payable and remains outstanding. I am satisfied that the plaintiff has demanded payment, and I am satisfied by the evidence before me that none of the defendants has made payment and accordingly judgment ought to be entered in favour of the plaintiff against the defendants jointly and severally in the amount of $6,189,305.41 together with interest.
Interest upon the judgment from the date of issue to today is $1,696,166.43.
I order that the defendants pay the costs of the plaintiff to be taxed as between solicitor and own client pursuant to clause 1.5 of the guarantee agreement.
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