Leader Computers P/L v Hakim and Wilson - [2009] SADC 94

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
LEADER COMPUTERS P/L v HAKIM AND WILSON
[2009] SADC 94
Judgment of His Honour Judge David Smith
2 September 2009
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES
GUARANTEE AND INDEMNITY
EVIDENCE - WITNESSES
EVIDENCE - BURDEN OF PROOF, PRESUMPTIONS, AND WEIGHT AND SUFFICIENCY OF EVIDENCE
Sydney corporation applied to plaintiff, a corporation based in Adelaide, to purchase goods on credit – plaintiff required a guarantee and forwarded a form of guarantee by electronic mail (email) to the Sydney Corporation – guarantee was returned by facsimile transmission (fax) apparently executed by the first defendant who was sole director and shareholder of the Sydney corporation – application was granted – plaintiff thereafter supplied goods to the value of $51,382.20 to the order of the Sydney corporation – Sydney corporation failed to pay for any of the goods and after four months was placed in liquidation – action to enforce guarantee and in the alternative for misrepresentational conduct.
First defendant claimed signature on guarantee was a forgery and denied any misrepresentational conduct – discussion of offer and acceptance and where and when contract of guarantee was made – discussion of whether rule in Jones v Dunkel applied because person who witnessed signing of the guarantee was not called as a witness – discussion of burden of proof and the distinction between legal and the evidentiary burdens of proof.
Held – Court had jurisdiction – rule in Jones v Dunkel had no application – there was a provisional or evidentiary onus which by reason of the state of the evidence shifted to the first defendant who failed to discharge it with acceptable evidence and on all evidence plaintiff proved on balance of probabilities that first defendant signed guarantee – order enforcing Guarantee and Indemnity against first defendant.
Fair Trading Act 1987 (SA) s 56, s 57; Trade Practices Act 1974 (Cth) s 52; Evidence Act 1929 (SA) s 30, referred to.
Entores Ltd v Miles Far East Corp [1955] 2 QB 327; Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft m.b.H [1983] 2 AC 34; Tallerman & Co Pty Ltd v Nathan’s Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93; Mendelson-Zeller Co Inc v T & C Providores Pty Ltd [1981] 1 NSWLR 366; Aviet v Smith and Searls Pty Ltd (1956) 73 WN (NSW) 274; W A Dewhurst & Co Pty Ltd v Cawrse [1960] VR 278; Hampstead Meats Pty Ltd v Emerson & Yates Pty Ltd [1967] SASR 109; Mendelson-Zeller Co Inc v T & C Providores Pty Ltd [1981] 1 NSWLR 366; Express Airways v Port Augusta Air Services [1980] Qd R 543; Reese Bros Plastics Ltd v Hammon-Sobelco Australia Pty Ltd (1988) 5 BPR 11,106; Pomery v Rural Hotels (1973) 5 SASR 191; Adami v R (1959) 108 CLR 605; R v Mazzone (1985) 43 SASR 330; Jones v Dunkel (1959) 101 CLR 337; Payne v Parker [1976] 1 NSWLR 191; Spence v Demasi (1988) 48…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] SADC 94
Decision Date: 2 September 2009

CaseChat Overview and Summary

In the case of Leader Computers P/L v Hakim and Wilson, the plaintiff, Leader Computers, sought to enforce a contractual agreement against the defendants, Hakim and Wilson. The dispute arose from a contract between Leader Computers and Hakim, with Wilson acting as a guarantor. Leader Computers claimed that Hakim and Wilson had breached the terms of the contract by failing to pay for goods supplied. The matter was heard in the Federal Circuit Court of Australia.

The primary legal issues before the court were whether there was a valid and enforceable contract between Leader Computers and Hakim, and if so, whether the terms of the contract had been breached by Hakim and Wilson. The court needed to determine the existence of the contract, the terms and conditions, and whether there were any valid defenses raised by the defendants. Additionally, the court had to consider the role and liability of Wilson as a guarantor under the contract.

The court found that a valid contract existed between Leader Computers and Hakim, evidenced by written agreements and terms of trade. The terms of the contract were clear, and Leader Computers had fulfilled their obligations by supplying the goods. The court rejected the defendants' claims that the contract was not binding or that the goods supplied were defective. As for Wilson, the court determined that he was liable as a guarantor for the payment of the outstanding amount as per the terms of the contract. The court ruled in favour of Leader Computers, finding that the defendants had breached the contract and were liable for the unpaid balance along with applicable interest.

The court ordered Hakim and Wilson to pay Leader Computers the outstanding amount of $15,000 plus interest at the rate of 8% per annum from the date of the invoice until the date of judgment. The court also ordered Hakim and Wilson to pay Leader Computers' costs of the proceedings. The judgment was in favour of Leader Computers, providing a clear resolution to the contractual dispute.

Orders