| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : KETTRIDGES PTY LTD -v- FINLAYSON [2011] WADC 116 CORAM : REGISTRAR KINGSLEY HEARD : 14 JULY 2011 DELIVERED : 28 JULY 2011 FILE NO/S : CIV 594 of 2011 BETWEEN : KETTRIDGES PTY LTD Plaintiff
AND
RAYMOND JOHN FINLAYSON
First Defendant
DARREN JOHN FINLAYSON
Second Defendant
WAYNE GEOFFREY WATTERSON
Third Defendant
Catchwords: Practice - Application for summary judgment - Action based on guarantees – No new principles Legislation: Nil
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Result: Judgment given Representation: Counsel:
Plaintiff : Mr M Curwood
First Defendant : Mr A M Houghton
Second Defendant : Mr A M Houghton
Third Defendant : Mr A M Houghton
Solicitors:
Plaintiff : Curwood & Co
First Defendant : Arns & Associates
Second Defendant : Arns & Associates
Third Defendant : Arns & Associates
Case(s) referred to in judgment(s):
Nil
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1 REGISTRAR KINGSLEY: The plaintiff (Kettridges) supplied stock feed to Goldfin Enterprises Partnership, the Borrower, from time to time on a credit basis. The Goldfin Enterprises Partnership comprised of Goldfin Enterprises Pty Ltd as trustee for the J R Finlayson Family Trust No 2, the W L Watterson Family Trust No 2 and the D A Finlayson Family Trust No 2.
2 Kettridges plead, separately, against each of R Finlayson, D Finlayson and W Watterson that they each executed a deed of guarantee on or about 3 June 2010. The material term of each of the guarantees is that the debt was defined to mean the amount which the Borrower becomes liable to pay to the plaintiff up to an amount of $200,000. Kettridges plead that the Borrower is presently indebted to the plaintiff in the sum of $794,538.49 for invoices rendered between 3 September 2010 and 29 October 2010. 3 Kettridges goes on to plead that it has made demands on R Finlayson, D Finlayson and Watterson under the terms of the guarantee, and despite that demand, each of the defendants have failed to pay the sum of $200,000. 4 Kettridges' application, pursuant to O 14 Rules of the Supreme Court 1971, is supported by the affidavit of Mark John Christian Huisman (Huisman) sworn 25 March 2011. Huisman's affidavit verifies the claim against each defendant. 5 The defendants oppose the application on two grounds: firstly, that the quality of feed supplied by Kettridges was below standard, and secondly, an issue about the cost of the feed supplied. 6 As to the quality of feed, R Finlayson, in his affidavit sworn 7 June 2011, deposes that almost immediately on switching supply of feed from Inghams to Kettridges, it became apparent that the quality of feed supplied by Kettridges was below standard. In July 2009, D Finlayson, Watterson and R Finlayson met with a Des McDermott to discuss feed performance - I am not told who Des McDermott is and his relationship to the proceedings. However, it was agreed that the issue of quality of feed be taken up with Kettridges and this was done by R Finlayson. It was agreed at some point, I am not told when, that the chicken feed should be coated in oil and that Kettridges would arrange for equipment to be purchased to enable that to occur. 7 In August 2009, the defendants met with Huisman of Kettridges, who said that equipment to coat the feed with oil was being made in (Page 4)
New South Wales and that was delaying matters. Through September 2009 there were issues in relation to the pellet size of the feed and that there was too much dust in the sample bags. By the start of 2010, R Finlayson deposes that the feed had gradually improved. 8 R Finlayson goes on to depose that it is alleged by Huisman that Kettridges always charged the Borrower at a cost plus rate for the feed supplied. R Finlayson deposes that the defendants had repeatedly asked Huisman to confirm how the price had been calculated and to provide documentation supporting the calculation, but this was not often provided. However R Finlayson does say Kettridges would charge Finesse Foods – the trading name of Goldfin – on a cost plus basis. 9 In an affidavit sworn 2 June 2011, D Finlayson puts forward an argument to suggest that there are profits lost as a result of the plaintiff's failure to supply feed of a reasonable quality in the period from June 2009 to June 2010. The loss of profit is said to be $1,483,504.52. D Finlayson deposes that based on his analysis of the partnership records and the rate of growth of chickens, D Finlayson calculated in the period June 2009 to June 2010 the loss was $757,152.24. This loss is arrived at by calculating the weight of chickens using Inghams' feed as was previously supplied, and the weight of chickens using Kettridges' feed. 10 Additionally, D Finlayson deposed that because of the poor standard of the feed supplied by Kettridges, the chickens did not carry the same weight as would be expected. Based on his calculations between the period June 2009 to June 2010, D Finlayson calculates the loss in weight at 488,485 kg. Reviewing the price list at which various cuts of meat were sold, D Finlayson calculates the loss of profit between the period June 2009 to June 2010 to be $1,483,504.52. 11 Kettridges is suing only on the guarantees made 3 June 2010. On the evidence before me, by early 2010 the feed was satisfactory. Whilst D Finlayson calculates losses up to June 2010, there is no evidence that between early 2010 and June 2010 any losses were due to poor quality of feed. There is no evidence of any issue with feed by the time the guarantees were entered into. 12 In a supplementary affidavit sworn 16 May 2011, Huisman deposes that Kettridges issued to the Borrower separate tax invoices for feed ordered since August 2010, and attached to each of the copies of the tax invoices are the purchase order and loading docket and sales order. Huisman deposes that the plaintiff has always charged the Borrower at (Page 5)
cost plus and the pricing changed every month. This is because the pricing was established according to the relevant grains and pre-mixes that were available and requested, and the Borrower was charged at the current price with the inclusion of Kettridges additional price for mixing the feed. 13 The principles surrounding an application pursuant to O 14 Rules of the Supreme Court are well known. The entry of judgment pursuant to O 14 Rules of the Supreme Court is discretionary and should be exercised with care. In exercising the discretion, the court is not bound to accept uncritically every statement in an affidavit as raising a disputed fact. 14 Having regard to the principles in relation to O 14 Rules of the Supreme Court, I am not satisfied the defendants have raised any arguable defence. I will enter judgment against each defendant for $200,000, together with interest, and costs to be taxed.
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