Macquarie Equipment Rentals v Moshy Furniture Enterprises

[2009] NSWLC 16

Local Court of New South Wales

CITATION:	Macquarie Equipment Rentals v Moshy Furniture Enterprises and ors [2009] NSWLC 16
JURISDICTION:	Civil
PARTIES:	Macquarie Equipment Rentals Moshy Furniture Enterprises and ors
FILE NUMBER:
PLACE OF HEARING:	Downing Centre
DATE OF DECISION:	07/13/2009
MAGISTRATE:	Assessor Olischlager
CATCHWORDS:	CONTRACTS - capacity for undisclosed principal to sue - whether signature on agreement is the second defendant's signature
LEGISLATION CITED:	Civil Procedure Act 2005
CASES CITED:	White v Baycorp Advantages Business Information Services Ltd (2006) 200 FLR 125
TEXTS CITED:
REPRESENTATION:
ORDERS:	1. Macquarie Equipment Rentals PL was entitled to sue Moshy Furniture Enterprises PL on the doctrine of undisclosed principal.2. Mr Marconcini did sign the rental agreement.

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1 The plaintiff has initiated proceedings for money due under a rental agreement for telephone equipment dated 22 November 2006 between Australian Lease Underwriting Pty Ltd trading as CMS Asset Solutions and the first defendant Moshy Furniture Enterprises Pty Ltd. Proceedings have also been brought against the second defendant, Mr Marconcini as a director of the Moshy Furniture Enterprises Pty Ltd, who signed a personal guarantee in relation to any liability arising under the agreement.

2 The defendants have contested the claim on the basis that firstly, there was no agreement ever entered into between the plaintiff, Macquarie Equipment Rentals Pty Ltd and Moshy Furniture Enterprises Pty Ltd and that the signature on the rental agreement is not that of Mr Marconcini.

3 In order to succeed the plaintiff must establish that it is entitled to sue on the basis of the contract even though it is not referred to in the rental agreement.

4 Macquarie Equipment Rentals Pty Ltd submit that Australian Lease Underwriting Pty Ltd entered the agreement as agent for the plaintiff and that Macquarie Equipment Rentals Pty Ltd was an undisclosed principal.

5 Evidence has been presented to the Court establishing that Macquarie Equipment Rentals Pty Ltd purchased the telephone equipment from Truscom Communications for $11,670.92. Australian Lease Underwriting Pty Ltd referred the application by Moshy Furniture Enterprises Pty Ltd to Macquarie Equipment Rentals Pty Ltd on 19 October 2006 and on 20 October 2006 Macquarie Equipment Rentals Pty Ltd forwarded approval to Australian Lease Underwriting Pty Ltd for the rental agreement with Moshy Furniture Enterprises to be entered into.

6 I am satisfied that there was a relationship of agency between Macquarie Equipment Rentals Pty Ltd and Australian Lease Underwriting Pty Ltd whereby Australian Lease Underwriting Pty Ltd was authorized to enter into the rental agreement on behalf of Macquarie Equipment Rentals Pty Ltd.

7 Macquarie Equipment Rentals Pty Ltd refers to clause 10(a) of the terms and conditions of the agreement as evidence that the agreement anticipates the possibility that the agreement might be entered into on behalf of an undisclosed principal. That provision states:

“(a) The Renter and Guarantor acknowledge and agree that the Owner may be entering into this Agreement as agent for another party (whether disclosed or undisclosed) and that such other party may have or acquire property title or interest in the Equipment”.

8 The capacity for an undisclosed principal to sue on a contract has been recognized for reasons of commercial convenience as an exception to the rule of privity of contract. The plaintiff has referred the Court to the decision of White v Baycorp Advantage business Information Services Ltd (2006) 200 FLR 125, where Campbell J held that a rental agreement was inherently capable of being entered into by one party as agent for an undisclosed principal. I accept that this decision is relevant to the matter before me. There was no issue raised as to why it was important that Moshy Furniture Enterprises considered that it was dealing with Australian Lease Underwriting Pty Ltd rather than the plaintiff. It was suggested that the defendant may not have read and understood the terms of the agreement, however, I note that this was a commercial contract and no evidence has been presented to the Court which provides a basis to depart from holding the parties to the terms of that agreement. Clause 10(a) of the contract should have put the defendant on notice of the possibility of there being an undisclosed principal.

9 I am satisfied that Macquarie Equipment Rentals Pty Ltd was entitled to sue Moshy Furniture Enterprises Pty Ltd on the doctrine of undisclosed principal.

10 The second issue that has been raised by the defendant is that the signature on the rental agreement is not that of Rolando Marconcini. The defendants have pointed to discrepancies between the form of signature of Mr Marconcini that appears on the rental agreement and other documents such as his driver’s licence. There has been no expert evidence before the Court expressing the opinion that the signature on the rental agreement is not that of Mr Marconcini. Having regard to the following evidentiary matters I am satisfied that Mr Marconcini did sign the agreement:

a That it is not in issue that Moshy Furniture Enterprises Pty Ltd took possession of the telephone equipment and therefore enjoyed the use of that equipment.

b That direct debits were made from an account in the name of Moshy Furniture Enterprises Pty Ltd for a period of 22 months out of the term of 36 months. This is consistent with Moshy Furniture Enterprises being aware of the terms of the rental agreement.

c That the contemporaneous business records of Macquarie Equipment Rentals Pty Ltd refer to conversations between employees of the plaintiff and Mr Marconcini and Mr Marconcini is recorded as saying that the arrangement was fine until the supplier closed down and they no longer received any service or credits. These business records support the view that Mr Marconcini was aware of the agreement.

11 The plaintiff has provided evidence in the form of an account statement outlining the amounts due and received under the rental agreement. Clause 13 of the agreement provides that in the event that the Owner terminates the agreement following a repudiation of the agreement by the renter the rental shall pay the aggregate of all unpaid rent to the date of termination together with an adjusted amount for rent that would have been payable until the end of the rental period. The plaintiff terminated the agreement by letter dated 23 January 2009.

12 I am satisfied that Macquarie Equipment Rentals Pty Ltd is entitled to recover $5,370.06 under the contract from Moshy Furniture Enterprises Pty Ltd. I am further satisfied that Macquarie Equipment Rentals Pty Ltd is also entitled to recover this amount from Mr Rolando Marconcini under the terms of the personal guarantee.

13 Accordingly, I enter a verdict and judgment in favour of the plaintiff against the first and second defendants in the sum of $5,370.06. I allow interest under section 100 of the Civil Procedure Act 2005 from date of termination of the contract being 23 January 2009. I have calculated interest to 13 July 2009 in the sum of $233.93.

14 I will reserve the question of costs and give leave to both parties to make written submissions to me by close of business 27 July 2009. In the absence of any written submissions I will consider that costs should follow the event and allow costs in accordance with clause 14 of the Local Court (Civil Procedure) Rules 2005.

S Olischlager

Assessor, Local Court

13 July 2009