Onsite Rental Group Operations Pty Ltd v Browne
[2014] WADC 73
ONSITE RENTAL GROUP OPERATIONS PTY LTD -v- BROWNE [2014] WADC 73
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WADC 73 | |
| Case No: | CIV:2412/2012 | 24-25 & 27 FEBRUARY 2014 | |
| Coram: | GOETZE DCJ | 23/05/14 | |
| PERTH | |||
| 31 | Judgment Part: | 1 of 1 | |
| Result: | Judgment for the plaintiffs in the sum of $279,659.17 | ||
| PDF Version |
| Parties: | ONSITE RENTAL GROUP OPERATIONS PTY LTD ONSITE INDUSTRIAL RENTALS AUSTRALIA PTY LTD ONSITE RENTALS PTY LTD GREGORY BRIAN BROWNE |
Catchwords: | Debt owed by corporation Guarantee from director Correct identity of creditor Whether guarantee varied by allowing principal debtor to hire in excess of estimated monthly amount on credit application and by creditor extending payment terms beyond that specified thereby increasing risk of guarantor Whether provision in guarantee for revocation complied with Turns on own facts |
Legislation: | Nil |
Case References: | Alinta 2000 Ltd v Petkov [2012] WASCA 258 Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1987) 162 CLR 549 Hickory Developments Pty Ltd v Brunswick Retail Investment Pty Ltd [2012] VSC 224 La Rosa v Nudrill Pty Ltd [2013] WASCA 18 Rinaldi & Parroni Pty Ltd v Precision Holdings Pty Ltd [1986] WAR 131 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- ONSITE INDUSTRIAL RENTALS AUSTRALIA PTY LTD
ONSITE RENTALS PTY LTD
Plaintiffs
AND
GREGORY BRIAN BROWNE
Defendant
Catchwords:
Debt owed by corporation - Guarantee from director - Correct identity of creditor - Whether guarantee varied by allowing principal debtor to hire in excess of estimated monthly amount on credit application and by creditor extending payment terms beyond that specified thereby increasing risk of guarantor - Whether provision in guarantee for revocation complied with - Turns on own facts
Legislation:
Nil
Result:
Judgment for the plaintiffs in the sum of $279,659.17
Representation:
Counsel:
Plaintiffs : Mr J M Healy
Defendant : Mr A P Rumsley
Solicitors:
Plaintiffs : Culshaw Miller Lawyers
Defendant : Alan Rumsley
Case(s) referred to in judgment(s):
Alinta 2000 Ltd v Petkov [2012] WASCA 258
Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1987) 162 CLR 549
Hickory Developments Pty Ltd v Brunswick Retail Investment Pty Ltd [2012] VSC 224
La Rosa v Nudrill Pty Ltd [2013] WASCA 18
Rinaldi & Parroni Pty Ltd v Precision Holdings Pty Ltd [1986] WAR 131
- GOETZE DCJ:
Introduction
1 The defendant, Mr Gregory Brian Browne, is and was at all material times, the sole director and secretary of Field Camp Services Pty Ltd.
2 On 22 October 2009, Mr Browne completed a pro forma commercial credit application on behalf of Field Camp Services seeking an ongoing trade credit facility from one company within a group of companies and which company, for introductory purposes, can be simply referred to as 'Onsite'.
3 The purpose of the application was to hire, on credit from Onsite, transportable buildings, including sleeping quarters, ablution blocks and kitchens for use in the mining industry.
4 The account contact name and the purchasing contact name given in the application by Mr Browne were, in both instances, his own.
5 When he completed the application form, Mr Browne estimated the required amount of the credit facility at $5,000 per month. He also acknowledged that credit may be given for a different amount than was asked for in the application.
6 The application contained a number of standard contract terms, including provisions that invoices were due and payable within 30 days from the end of the month in which they were issued and that failure to comply with such terms 'will cause the withdrawal of credit facilities'.
7 The application was supported by a guarantee and an indemnity executed on 22 October 2009 by Mr Browne 'in consideration of the Onsite Group' granting Field Camp Services an ongoing trade credit facility.
8 The application was successful and between October 2009 and May 2012, Field Camp Services hired mining equipment from Onsite on credit.
9 Although Field Camp Services did not always comply with the payment provision set out in the application, it was not largely indebted in respect of the hiring of mining equipment as at or about the end of July 2011. However, from about this time onwards, it fell into arrears. By 31 May 2012, Field Camp Services was indebted to Onsite for considerable outstanding hire costs, which Mr Browne was asked to satisfy pursuant to the guarantee. He has not done so. This action therefore seeks recovery of the outstanding debt from Mr Browne pursuant to the guarantee.
The change of plaintiff at trial
10 Until the first day of trial on 24 February 2014, the plaintiff in this action was Onsite Rental Group Operations (WA) Pty Ltd (ACN 146 857 365). It is not now a plaintiff. The plaintiffs' corporate identity changed at trial, as will be explained shortly.
11 In his original defence filed on 21 September 2012, Mr Browne admitted or pleaded that:
(1) the then sole plaintiff in this action, Onsite Rental Group Operations (WA) Pty Ltd, was the party to which he, on behalf of Field Camp Services, made application for commercial credit and which application, upon acceptance, formed a written agreement for the supply of mining equipment on credit from Onsite Rental Group Operations (WA) Pty Ltd to Field Camp Services;
(2) in consideration thereof, he executed a deed of guarantee and indemnity; and
(3) Field Camp Services subsequently hired mining equipment from Onsite Rental Group Operations (WA) Pty Ltd.
12 Further, in the pre-trial statement of agreed facts received at trial with the concurrence of both parties, it was agreed between them that:
(1) Mr Browne executed the deed of guarantee and indemnity in favour of Onsite Rental Group Operations (WA) Pty Ltd;
(2) Onsite Rental Group Operations (WA) Pty Ltd hired mining equipment to Field Camp Services between October 2009 and May 2012;
(3) between 30 June 2011 and 31 May 2012, Onsite Rental Group Operations (WA) Pty Ltd rendered invoices to Field Camp Services at a cost specified in the agreed facts; and
(4) Field Camp Services had not paid the invoices.
13 At trial, the outstanding cost was varied from that specified in the agreed facts to be the sum of $249,989.22.
14 Therefore, until just before trial, the corporate identity of the party to which application for credit was made, to which the guarantee was given, which hired the mining equipment to Field Camp Services, which issued the outstanding hiring invoices and which was owed the hiring cost by Field Camp Services, was not disputed. Nor was the quantum of the hiring costs, although that was varied and agreed at trial. Other matters were disputed, but at the commencement of the trial, those disputed matters, were reduced to those issues set out at [19.1] and [19.2] below. They need not be further identified here.
15 Then, on the last working day before trial, Mr A P Rumsley, solicitor and counsel for Mr Browne, gave notice to the then plaintiff's solicitors that the then sole plaintiff in this action, Onsite Rental Group Operations (WA) Pty Ltd, was not incorporated until 15 October 2010, being nearly one year after the execution of the commercial credit application and the guarantee and indemnity and the beginning of the hiring of the mining equipment to Field Camp Services. Hence, that plaintiff's claim could not succeed as pleaded.
16 In this circumstance 'of oversight and error … on both sides', as Mr Rumsley put it at trial, Onsite Rental Group Operations (WA) Pty Ltd ceased to be the plaintiff in this action and the following three companies were substituted as plaintiffs at the invitation of Mr Rumsley and with his client's consent:
• Onsite Rental Group Operations Pty Ltd (ACN 126 102 485);
• Onsite Industrial Rentals Australia Pty Ltd (ACN 098 073 708); and
• Onsite Rentals Pty Ltd (ACN 003 669 323).
17 The amendment of the writ of summons and the statement of claim was a proper course of action to take following Alinta 2000 Ltd v Petkov [2012] WASCA 258 [59] (Buss JA) in that, at all material times, Mr Browne was well aware that the Onsite company, which had intended to sue him, was that particular Onsite company to which he had applied for credit on behalf of Field Camp Services and to which he gave his guarantee and from which the hiring of mining equipment to Field Camp Services had taken place, such that the mistake in naming Onsite Rental Group Operations (WA) Pty Ltd as the plaintiff was not misleading, on an objective basis, or such as to cause any reasonable doubt, on an objective basis, as to the identity of the Onsite company intending to sue.
18 Given the change of plaintiffs, the trial was adjourned before lunch on the first day to permit the parties an opportunity to determine the need for amendments to the pleadings and whether any additional evidence was required. Upon return on the following day, amended pleadings were handed up and counsel advised that no evidence would be required apart from that already arranged.
The issues
19 At the conclusion of the trial, there were four issues to be resolved as follows:
1. The commercial credit application provided for an estimated monthly credit of $5,000 however, on many occasions, mining equipment was supplied in amounts exceeding this monthly estimate. Mr Browne pleaded that this resulted in a variation of the guarantee, such that he is not liable under the guarantee.
2. Outstanding invoices were not always paid by Field Camp Services within 30 days from the end of the month in which they were rendered, yet credit facilities were not withdrawn as mandatorily required by the standard contract terms. Mr Browne pleaded that, this too, varied the guarantee, such that he is not liable under it.
3. Mr Browne pleaded that by email dated 13 July 2011, he gave notice that he would no longer guarantee the debts of Field Camp Services.
4. Mr Browne pleaded that Field Camp Services hired the mining equipment, being the subject of this action, from Onsite Group Operations (WA) Pty Ltd, which is no longer a plaintiff in this action, and Mr Browne did not provide his guarantee to this company.
20 The first and second issues formed part of Mr Browne's original defence. The third and fourth issues arose from the amended defence. The fourth issue can be dealt with as a preliminary issue, as Mr Rumsley put it.
To which company was the guarantee given?
21 By his amended defence, Mr Browne now pleads that Field Camp Services applied for a commercial credit facility from Onsite Rentals Pty Ltd.
22 The original and amended defences do not specifically plead the name of the company to which the guarantee was provided, but they do admit that the guarantee was in relation to the obligations of Field Camp Services under the credit facility. Therefore, following the amended defence, the guarantee must surely have followed the commercial credit application to Onsite Rentals Pty Ltd and the credit facility granted by it, such that the guarantee must necessarily have been given to Onsite Rentals Pty Ltd.
Which company hired mining equipment to Field Camp Services from October 2009?
23 The commercial credit application was made to On Site Rentals and Access Holdings Pty Limited, the trading entities of which are stated in the application to be:
• On Site Industrial Rentals Australia Pty Ltd (ABN 70 098 073 708)
• On Site Rentals Pty Ltd (ABN 61 003 669 323).
24 Inspection of pro forma commercial credit application reveals that as part of that form and next to the name On Site Industrial Rentals Australia Pty Ltd is printed '(Access, Scaffold, Power and Air)'. Next to the name On Site Rentals Pty Ltd is printed '(Rentals)'. The commercial credit application also has a handwritten tick next to the printed field of '(Rentals)'. The words in brackets suggest the different roles played by these two different Onsite companies. The tick next to '(Rentals)' suggests that the application was made to On Site Rentals Pty Ltd.
25 Further, by the commercial credit application, Field Camp Services agreed to be bound by the standard contract terms when hiring equipment from the 'owner' which, by those standard contract terms:
means the owner of the Equipment being On Site Rentals Pty. Limited (ABN 61 003 669 323) or On Site Industrial Rentals Australia Pty Ltd (ABN 70 098 073 708) trading as On Site Access and Scaffolds, severally as the context requires and as set out in the Hire Contract.
26 If necessary, it can be inferred from this, that, the context in this matter requires the 'owner of the Equipment' to have been within the field of 'Rentals', rather than 'Access, Scaffold, Power and Air'.
27 None of the hire contracts were tendered into evidence. Only the invoices were so tendered, but they each refer to a hire contract by a specified number.
28 Common to the commercial credit application and each of the subject invoices is On Site Rentals Pty Ltd (ABN 61 003 669 323) and On Site Industrial Rentals Australia Pty Ltd (ABN 70 098 073 708).
29 Onsite Rentals Pty Ltd (ACN 003 669 323), as that company is described in this action, is now one of the named plaintiffs.
30 From the ABN for On Site Rentals Pty Ltd and the ACN for Onsite Rentals Pty Ltd, it can be seen that they are one and the same body corporate.
31 In his evidence, Mr Browne did not shed any light upon which Onsite company believed he dealt with on behalf of Field Camp Services. He said he:
essentially dealt with Onsite; and
… Onsite Group is – to me, is not an entity. I dealt with Onsite for rental buildings, all right? So suddenly all these names came up which are unrelated to the dealings I had, but Onsite Hire – Onsite was who I rented the buildings off.
32 On this basis, Mr Browne did not really direct his attention to any particular company within the Onsite Group of companies from which Field Camp Services hired equipment, and probably, he did not care.
33 However, from the amended defence, Mr Browne pleads that Field Camp Services entered the commercial credit agreement with Onsite Rentals Pty Ltd. The only purpose of Field Camp Services making the commercial credit application to that company was to hire mining equipment on credit from it.
34 Therefore, the irresistible inference is that it was Onsite Rentals Pty Ltd which, from October 2009, hired mining equipment to Field Camp Services.
35 The starting point then, is that, Field Camp Services hired mining equipment from Onsite Rentals Pty Ltd from October 2009.
Was there a change in the Onsite company which hired mining equipment?
36 The amended statement of claim pleads that:
5. Field Camp hired the Plaintiffs' Products from the Plaintiffs in accordance with the Agreement between October 2009 and May 2012.
37 The amended defence pleads only that the hiring was from Onsite Rental Group Operations (WA) Pty Ltd, without pleading when that hiring began. Otherwise, par 5 of the amended statement of claim is denied.
38 Obviously, any hiring from Onsite Rental Group Operations (WA) Pty Ltd could not have commenced prior to its incorporation on 15 October 2010.
39 By reason of the amended defence, it is necessary to consider whether the course of hiring changed from Onsite Rentals Pty Ltd to Onsite Rental Group Operations (WA) Pty Ltd.
40 In passing, advice was provided from the Bar table by Mr J M Healy, counsel for the plaintiffs, that, On Site Rentals and Access Holdings Pty Ltd named in the commercial credit application had since changed its name and is now one and the same company as Onsite Rental Group Operations Pty Ltd which issued the invoices. There was no objection to this advice being so given.
41 On this basis, Mr Healy submitted that one and the same company was the agent for the same disclosed principals in each of the credit application and the invoices and that therefore, there is consistency in the identity of the corporate plaintiffs being Onsite Rental Group Operations Pty Ltd as agent for its principals Onsite Rentals Pty Ltd and On Site Industrial Rentals Pty Ltd. The simplicity in Mr Healy's submission does not detract from its validity.
42 However, this is not a complete answer to the problem because of the amended defence.
43 The original and amended statements of claim both plead that the hiring to Field Camp Services was between October 2009 and May 2012. The amended statement of claim alleges that hiring to have been from 'the Plaintiffs'.
44 The amended defence however, pleads that Field Camp Services hired mining equipment from Onsite Rental Group Operations (WA) Pty Ltd. To support this, Mr Rumsley relied upon 'conduct' between what he submitted to be the correct hirer of the mining equipment, namely Onsite Rental Group Operations (WA) Pty Ltd, and Field Camp Services in that, mining equipment was ordered, supplied and invoiced as set out in affidavits filed in support of the former sole plaintiff's claim, but now relied upon by the present plaintiffs.
45 Each of the subject invoices involved in this litigation was introduced into evidence through the affidavit of Rodney Baxter, sworn on 19 November 2013. In his affidavit, Mr Baxter deposed to himself being employed as a product manager by Onsite Rental Group Operations (WA) Pty Ltd, which he defined as 'Onsite'.
46 Mr Baxter deposed to the fact that he commenced his employment with Onsite Rental Group Operations (WA) Pty Ltd in or about October 2007. He annexed to his affidavit a copy company search of Onsite Rental Group Operations (WA) Pty Ltd and deposed to the fact that on or about 22 October 2009, this particular company entered into a supply agreement with Field Camp Services. He said that this agreement comprised the pro forma commercial credit application and the guarantee and indemnity previously referred to. Copies of these documents were annexed to his affidavit.
44. Mr Baxter deposed in his affidavit as follows:
11. Between October 2009 and May 2012, Field Camp hired the Plaintiff's Equipment. The Process with respect to hiring equipment is described further below.
12. Onsite provided invoices to Field Camp between 30 June 2011 and 31 May 2012 totalling $269,770.12 ('Outstanding Invoices') as particularised in Schedule A and Schedule B of this affidavit.
13. I am aware from reviewing Onsite's books and records and from my position as Product Manager, that Field Camp has not paid the Outstanding Invoices as particularised in Schedule A and Schedule B of this affidavit.
…
22. The process for hire was that Field Camp would generally issue a purchase order and Onsite would arrange for the relevant portable buildings and ablution blocks to be delivered by Pigdon to the designated site of Field Camp.
…
30. In the period commencing from in or about July 2011, Field Camp stopped paying Onsite for the portable equipment and associated costs charged by Onsite.
31. Onsite did not hire any new portable buildings to Field Camp but continued to permit Field Camp to retain the buildings already on hire on a basis that Field Camp would continue to pay hire charges.
48 On their face, each and every invoice the subject of this action, was addressed to Field Camp Services from Onsite Rental Group Operations Pty Ltd (ABN 74 126 103 485) acting as agent for:
• On Site Rentals Pty Ltd (ABN 61 003 669 323)
• On Site Rental Group Operations (WA) Pty Ltd (ABN 19 146 857 365)
• On Site Industrial Rentals Australia Pty Ltd (ABN 70 098 073 708)
• Wasp Diesel Powerhire Pty Ltd (ABN 87 105 005 203).
49 By reason that Onsite Rentals Group Operations (WA) Pty Ltd was not incorporated until October 2010, Mr Baxter could not have been employed by it from October 2007. Contrary to his evidence, that company could not have entered into the supply agreement with Field Camp Services in October 2009, it could not have received the guarantee and indemnity from Mr Browne in October 2009 and it could not have hired mining equipment to Field Camp Services from October 2009.
50 Mr Baxter was not able to give evidence. His affidavit was tendered into evidence by the plaintiffs by consent, with the only comment from Mr Rumsley concerning the weight to be given to its contents.
51 Mr Rod McWade, the credit manager of the Onsite Rental Group of companies, swore an affidavit on 15 November 2013 in which he defined 'the Onsite Rental group of companies, including Onsite Rental Group Operations (WA) Pty Ltd', as 'Onsite', deposing to the fact that he commenced his employment with 'Onsite' on 3 March 2008. He deposed in his affidavit to arrears in the account of Field Camp Services in respect of which recovery was sought from Mr Browne under the terms of the personal guarantee provided by Mr Browne.
52 Mr McWade gave evidence via video link from Sydney. Mr McWade was not challenged as to the facts deposed by him in his affidavit concerning 'Onsite'. The following limited cross-examination as to corporate identity took place:
Thanks. Now, in your affidavit you speak to your role as being a credit manager and in particular in relation to an Onsite entity called Onsite Rental Groups; Rental Group Operations WA Pty Ltd?---Correct.
Okay. So that's a company that you are involved in working with as a credit manager, that's correct?---Yes, correct.
And in the context of this matter that's a company that you were dealing with Mr Browne or Field Camp Services in relation to?---It's - it's a parent company over here. We've had a company change of names during the course of our trading and - - -
I've – I've seen - - -?---the prior – the prior business name - - -
There have been a number of changes of names, Mr McWade, but just specifically you – you were dealing with that company that - - -?---Yes. We – we own that company and – and I represent that company, that's correct. Yes.
53 This evidence is equivocal and vague. It does not assist Mr Browne's defence.
54 Accepting that Mr McWade was the Onsite Rental Group credit manager, he could not have been the credit manager of Onsite Rental Group Operations (WA) Pty Ltd prior to October 2010.
55 It was not put to Mr McWade in cross-examination that the hiring of mining equipment by Field Camp Services was initially from Onsite Rentals Pty Ltd but that, at some unidentified time after 15 October 2010, the hiring changed to Onsite Rental Group Operations (WA) Pty Ltd.
56 Mr Frank Van Zon swore an affidavit on 18 November 2013 in which he deposed that, for seven years prior to his retirement in 2012, he was the production manager at GBL Investments Pty Limited, trading as Pigdon Portable Restorations. Pigdon stored portable buildings and undertook repairs and cleaning. It delivered and collected buildings on behalf of another business known as Rakkan, which cross-hired to other companies including, he said, to Onsite Rental Group Operations (WA) Pty Ltd, which then on-hired to other parties.
57 Mr Van Zon arranged for buildings to be packaged and delivered to Field Camp Services and he also arranged for the collection of portable buildings and ablution blocks to be returned from Field Camp Services.
58 It is clear, that, before October 2010, Rakkan could not have cross-hired to Onsite Rental Group Operations (WA) Pty Ltd and that Mr Van Zon could not have arranged such cross-hire so as to permit on-hire to other parties.
59 Mr Browne, by affidavit sworn on 17 February 2014, referred only to his
dealings with the Plaintiff Onsite in relation to buildings hired from it by Field Camp Services.
- Mr Browne's oral evidence as to corporate identity is detailed at [31] above.
60 Each of the abovementioned affidavits was sworn prior to the date upon which Mr Rumsley said he found the error in the identification of the original plaintiff. Each affidavit was drawn and sworn at a time when it was mistakenly accepted by all concerned that Onsite Rental Group Operations (WA) Pty Ltd was the correct company to be the sole plaintiff in this action.
61 It is clear that Mr Baxter, Mr McWade and Mr Van Zon were incorrect in swearing their affidavits as to the true identity of the particular Onsite company which entered into the supply agreement, received the guarantee and at least initially, hired mining equipment to Field Camp Services from 2009.
62 Mr Baxter was therefore wrong at [11] of his affidavit to depose to Field Camp Services hiring mining equipment during the entire period between October 2009 and May 2012 from Onsite Rental Group Operations (WA) Pty Ltd. It could not have done so throughout this entire period. This flaw as to corporate identity then infects the remainder of his affidavit, as detailed above.
63 The same difficulty arises with Mr Van Zon's affidavit as to cross-hiring to Onsite Rental Group Operations (WA) Pty Ltd throughout the entire period of seven years prior to 2012. Further, the recovery sought by Mr McWade under the guarantee from Mr Browne could not have been pursuant to a guarantee given to Onsite Rental Group Operations (WA) Pty Ltd.
64 It seems that the same error occurred in naming Onsite Rental Group Operations (WA) Pty Ltd as the original plaintiff in this action as has occurred in the preparation of these three affidavits.
65 Messrs Baxter, McWade and Van Zon each swore their affidavits without specifying any reason why they each believed Onsite Rental Group Operations (WA) Pty Ltd to be the relevant company for the purpose of their respective affidavits.
66 Mr Rumsley chose to not give an opening address. He simply called Mr Browne solely for the purpose of tendering his affidavit into evidence. That affidavit does not comment upon corporate identity save as already observed at [59]. Mr Browne did not deal with the issue of the plaintiffs' corporate identity in his evidence-in-chief. In the cross-examination of Mr Browne, it was not appreciated that the identity of the hirer of the mining equipment to Field Camp Services was alleged to be different from that of the company to which the guarantee had been given.
67 After Mr Browne was cross-examined, the defence case was closed. Mr Rumsley then made the submission, consistent with the amended defence, that Field Camp Services hired the equipment, being the subject of this action, from Onsite Rental Group Operations (WA) Pty Ltd.
68 Mr Rumsley further made the oral submission that Onsite Rentals Pty Ltd may have hired mining equipment to Field Camp Services until the incorporation of Onsite Group Rentals Operations (WA) Pty Ltd, but it certainly did not do so after that incorporation.
69 It was only at this time then, late on the second day of trial after the evidence had closed, that, this issue as to the identity of company hiring the mining equipment to Field Camp Services became apparent, notwithstanding the provision of the amended defence at the commencement of the second day of the trial.
70 Had the error in the name of the original plaintiff company been established earlier than the last working day before trial then, no doubt, each of Messrs Baxter, McWade and Van Zon could have been asked to reconsider their affidavits. Of course, it is not open to now guess or speculate as to what they may have each said apart from not being able to say that they were employed by, or worked with, Onsite Rental Group Operations (WA) Pty Ltd and that it accepted the credit application and guarantee and hired mining equipment to Field Camp Services, prior to its incorporation in October 2010.
71 The references in each of the affidavits of Messrs Baxter, McWade and Van Zon to Onsite Rental Group Operations (WA) Pty Ltd hiring mining equipment to Field Camp Services between October 2009 and May 2012 must be rejected by reason that:
(1) such hiring could not have occurred prior to October 2010 before the incorporation of Onsite Rental Group Operations (WA) Pty Ltd;
(2) the finding has already made that Onsite Rentals Pty Ltd was at least the initial hiring company from October 2009;
(3) it is plainly wrong to state that hiring from Onsite Rental Group Operations (WA) Pty Ltd occurred in a blanket fashion from October 2009 to May 2012;
(4) Messrs Baxter, McWade and Van Zon do not differentiate between the periods prior to, and subsequent to, the incorporation in October 2010 of Onsite Rental Group Operations (WA) Pty Ltd;
(5) Messrs Baxter, McWade and Van Zon do not purport to provide any explanation as to how Onsite Rental Group Operations (WA) Pty Ltd came to hire mining equipment to Field Camp Services in lieu of Onsite Rentals Pty Ltd; and
(6) the error in the affidavits of Messrs Baxter, McWade and Van Zon is consistent with the pre-trial error made by the solicitors and counsel for the plaintiffs, the defendant and by Mr Browne. So too Mr Browne's affidavit only refers to 'the Plaintiff Onsite'. The preparation of the affidavits must be viewed against that background.
72 However, this still leaves open the possibility of the hiring company of the mining equipment to Field Camp Services.
73 There could not have been a change in the hiring from Onsite Rentals Pty Ltd to Onsite Rental Group Operations (WA) Pty Ltd until at least October 2010 when it was incorporated. However, there is no evidence of such a change.
74 There is nothing in the affidavits of Messrs Baxter, McWade, or Van Zon to suggest any change in the 'conduct' of hiring and invoicing from Onsite Rentals Pty Ltd after 15 October 2010. Their evidence, individually and collectively, refers to one continuous period of commercial hiring, invoicing and accounting dealings from October 2009 to May 2012. They had each been employed in their respective roles prior to 2009. Indeed, it can be inferred from Mr Baxter's affidavit at [11], [12] and [22] alone, that, whichever company from the Onsite Group hired mining equipment to Field Camp Services, it was the same Onsite company from October 2009 to May 2012.
75 Mr Browne did not give evidence of any variation in the hirer of the mining equipment. Apart from the plaintiffs' affidavits, which were drawn at a time 'of oversight and error', there is no other evidence supporting Mr Rumsley's submission and the amended defence. This affidavit evidence as to corporate identity is not acceptable. However, the affidavit evidence otherwise as to the facts of hiring, invoicing and non-payment was received without challenge. Indeed, this evidence was relied upon by Mr Rumsley as 'conduct' proving the hiring and invoicing of mining equipment to Field Camp Services, although it cannot be accepted as having been from Onsite Rental Group Operations (WA) Pty Ltd.
76 The invoices provided by Mr Baxter are also consistent with Onsite Rental Group Operations Pty Ltd sending invoices as agent for Onsite Rentals Pty Ltd in respect of the hiring to Field Camp Services throughout the period from June 2011 to May 2012.
77 There is then simply no evidence that, at any time between October 2009 and May 2012, the course of hiring from Onsite Rentals Pty Ltd to Field Camp Services changed to any other Onsite company, including Onsite Rental Group Operations (WA) Pty Ltd.
78 It is not disputed that Field Camp Services hired mining equipment from an Onsite company. Nor is there any issue as to any invoice or hiring fee. It is not disputed that the subject invoices have not been paid. It is not disputed that Field Camp Services is indebted in respect of that hiring to an Onsite company in the sum of $249,989.22.
79 If there had been a change in hiring to Field Camp Services from Onsite Rentals Pty Ltd to Onsite Rental Group (WA) Pty Ltd then, it might reasonably have been expected that a fresh guarantee and indemnity would have been required from Mr Browne, as to which see [135] below.
80 In the absence of any, or any acceptable, evidence to the contrary, the only reasonable inference is that the original course of conduct from October 2009 continued from beginning to end, such that all hiring, the subject of this action being from June 2011 to May 2012, was from Onsite Rentals Pty Ltd to Field Camp Services: Rinaldi & Parroni Pty Ltd v Precision Holdings Pty Ltd [1986] WAR 131 [20] and La Rosa v Nudrill Pty Ltd [2013] WASCA 18.
Findings
81 In summary, the following findings can be made:
1. Mr Browne completed a pro forma commercial credit application on behalf of Field Camp Services.
2. That application was made to Onsite Rentals Pty Ltd.
3. In consideration of Onsite Rentals Pty Ltd granting credit to Field Camp Services, Mr Browne guaranteed the payment of monies due from Field Camp Services. His pleadings do not specifically admit to which company he gave that guarantee, but it follows that it must have been to Onsite Rentals Pty Ltd.
4. From October 2009 to at least October 2010, Onsite Rentals Pty Ltd hired mining equipment to Field Camp Services.
5. There is no evidence that the course of hiring from Onsite Rentals Pty Ltd to Field Camp Services changed at any time from Onsite Rentals Pty Ltd to any other Onsite company and in particular, to Onsite Rental Group Operations (WA) Pty Ltd.
6. There is no, or no acceptable, evidence that Field Camp Services hired mining equipment from Onsite Rental Group Operations (WA) Pty Ltd at any time, or at all.
7. The hiring from Onsite Rentals Pty Ltd continued after October 2010 until May 2012.
8. Until the last working day before trial, Messrs Baxter, McWade, Van Zon and Browne, their solicitors and counsel, all acted under the mistaken belief that, the credit application was made to, the guarantee was given to, and that all hiring between October 2009 and May 2012 was from, Onsite Rental Group Operations (WA) Pty Ltd. That was an error. Such company was not incorporated until October 2010.
9. It was correct to amend the defence to now admit that the application for credit was made to Onsite Rentals Pty Ltd, but incorrect to still plead that Field Camp Services hired equipment from Onsite Rental Group Operations (WA) Pty Ltd, and to rely on in the affidavits of Messrs Baxter and Van Zon in support thereof. Their affidavits, and that of Mr McWade, were prepared when all concerned were mistaken as to the correct identity of the hiring company. Those affidavits cannot be relied upon as to the identity of the hiring company being Onsite Rental Group Operations (WA) Pty Ltd. Otherwise, there is agreement between the parties as to the acceptance of their affidavit evidence.
10. Until in or about July 2011, Field Camp Services paid invoices in respect of the hiring.
11. Field Camp Services has not paid all invoices in respect of the hire of mining equipment from 30 June 2011 to 31 May 2012.
12. There is no dispute that the hiring occurred, as to the outstanding debt in respect of that hire, or to any of the invoices forming part of the outstanding debt or to the quality of any equipment hired to Field Camp Services.
13. The outstanding debt owed by Field Camp Services is agreed at $249,989.22.
14. Any indebtedness by Field Camp Services is to Onsite Rentals Pty Ltd.
15. Pursuant to the guarantee given to Onsite Rentals Pty Ltd by Mr Browne, it is able to demand payment from Mr Browne of the Field Camp Services debt owed to it, subject to any other matters of defence.
Variation of the guarantee
82 The amended defence pleads that the guarantee was varied first, by allowing Field Camp Services to hire an amount in excess of $5,000 per month and secondly, by extending payment terms for invoices beyond 30 days from the end of the month in which they were issued. Some of the invoices far exceeded $5,000 per month. Some were unpaid for many months and yet, notwithstanding such non-payment, credit facilities were not withdrawn. The defence therefore pleads, that, for these two reasons, Mr Browne's risk was increased and that, as a result, the guarantee was varied and he is now discharged from the guarantee.
83 Before dealing with these two matters, it is appropriate to observe that, as at July 2011, Field Camp Services was not largely indebted to Onsite Rentals Pty Ltd. However, from about this time, Field Camp Services stopped making regular payments. Thereafter, some periodic payments were made.
84 After about July 2011, Field Camp Services did not hire any new equipment however, it was permitted to retain equipment already on hire and that hire continued to attract rental payments, both to it and by it.
85 The unpaid invoices, the subject of this action, are dated between 30 June 2011 and 31 May 2012.
Estimated monthly hiring of $5,000
86 The commercial credit application provides:
Estimated amount of credit facility required (monthly): $5,000
87 This was an estimate was provided by Mr Browne when he completed the commercial credit application.
88 Mr Rumsley relied on Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1987) 162 CLR 549 when dealing with the effect of a variation. The High Court referred to a principle from English cases:
[18] … so as to discharge the surety when conduct on the part of the creditor has the effect of altering the surety's rights, unless the alteration is unsubstantial and not prejudicial to the surety. The rule does not permit the courts to inquire into the effect of the alteration. The consequence is that, to hold the surety to its bargain, the creditor must show that the nature of the alteration can be beneficial to the surety only or by that its nature it cannot in any circumstances increase the surety's risk, e.g, a reduction in the debtor's debt or in the interest payable by the surety. The mere possibility of detriment is enough to bring about the discharge of the surety.
…
[21] If the surety is to be discharged for breach of a promise return in the suretyship contract, the justification for the discharge must be that the creditor has failed to comply with the provision that, as a matter of interpretation, requires strict performance as a condition precedent to the surety's obligation or at least requires substantial performance of the promise such that the surety would not have entered into the contract if it had not been assured that there would not be a breach such as the breach which in fact occurred. If on its true interpretation the term is not intended to so operate, it is not easy to understand why the surety should be discharged by its breach. Of course, in construing the contract the court is entitled to look to the general setting in which the contract has come into existence …
89 However, Mr Healy observed that Hickory Developments Pty Ltd v Brunswick Retail Investment Pty Ltd [2012] VSC 224 [41] – [49] held that Ankar would not apply in circumstances in which the guarantor had knowledge of the increase in the provision of credit and consented thereto, even if implicitly.
90 Mr Browne was the sole director and secretary of Field Camp Services. As the commercial credit application completed by Mr Browne indicates, he was the account contact name and purchasing contact name.
91 Here, when looking at the estimated amount of the credit facility required, being $5,000 per month, it is necessary to remember that this was an estimate provided by Mr Browne himself. At first, Mr Browne was firm in his cross-examination:
You knew that the estimated amount of credit facility was $5,000 a month?---I don't know you can know an estimate but certainly at that stage of trading, $5,000 seemed a – a reasonable amount to put down at that level at that time.
…
In signing the credit application you understood that credit may be given by the Onsite Group for an amount different than $5,000?---No, I didn't. Certainly didn't. The reason we put $5,000 down was to put a limit on it for that purpose.
92 However, shortly after this, Mr Browne was evasive when he also gave evidence about the monthly estimate as follows:
Now, in the period October 2009 through to June 2012 you were involved in the placement of orders by Field Camp Services?---That's correct, yes.
And during that period of time you knew that orders were being placed for more than $5,000?---I don't have the statements in front of me or if I do if you can point them out to me. Possibly would be my answer but if I can look at a statement I can confirm that but I don't recall enough to say definitely.
But you don't deny that a credit was provided for more than $5,000 per month?---Well, again if I can see a statement I can confirm that.
All right. Let's assume that a credit has been provided for more than $5,000 per month?---But - - -
Well, let's assume that?--- - - - unless it's a fact.
Let's assume that?---Why should I assume it?
Let's assume that credit's been provided for more than $5,000 a month, can you accept that - - -?---No.
- - - assumption?---No. If someone can give me a statement I can accept it.
93 Mr Browne's answer in cross-examination as to the terms and conditions of the commercial credit application was less than satisfactory, as follows:
In signing the credit application you read and understood the attached terms and conditions?---No, not all of them but most of them and if I did I probably forgot them fairly quickly thereafter.
…
You – did you read the attached terms and conditions?---I read them, correct.
And you understood the attached terms and conditions?---I don't recall that far back but I should think I understood most of them.
94 The credit application specifically provided that 'credit may be given for a different amount than is asked for in this application'. This recognises the inherent nature of the monthly amount being merely an estimate.
95 In the period from 3 March 2010 to 6 September 2011, Field Camp Services paid an amount of $519,698.14 for the hire of mining equipment. Further, from June 2011 to May 2012 being the period the subject of this action, agreed outstanding hire fees and repairs total $249,989.22. Although not broken down at trial, this total is mostly from hire fees as indicated in the statement of agreed facts. It is self-evident from these figures that the monthly estimate was greatly exceeded, on average at least.
96 Mr Browne was involved in the placement of hiring orders. It is not disputed that the subject hiring orders were met by Field Camp Services.
97 Mr Browne said that he conducted dealings with Onsite until June 2010 when Mr John Carroll was appointed to manage the accounts of Field Camp Services. At [28] of his affidavit, Mr Browne deposed to the fact that:
From June 2010, John Carroll dealt with the running of the business of FCS accounts on a day to day basis.
98 Mr Browne agreed with this in cross-examination and said that it was a correct statement. He claimed that he advised Mr Baxter by email dated 1 July 2010 of Mr Carroll's appointment. Mr Browne claimed in evidence that he was probably unaware of most of what was going on once he employed Mr Carroll. However, the email contradicted Mr Browne's oral evidence. It advised:
John Carroll is our new accountant and can handle queries in future if I am away.
99 Further, Mr Browne claimed he 'didn't go into the office' after Mr Carroll's appointment. This evidence shows disregard for his role as the sole director and secretary of the company. It cannot be accepted.
100 Given the high level of hiring fees, Mr Browne's evidence that the $5,000 amount was a limit cannot be accepted. Nor can his evidence that orders exceeding $5,000 per month were 'possibly' placed, but that he would need to check statements. The emails referred to below at [119] seeking payment from Mr Browne also show his knowledge of the monthly orders exceeding $5,000 and the indebtedness of Field Camp Services.
101 Mr Browne was the only director and secretary of Field Camp Services. He must have known of monthly hirings exceeding the estimate of $5,000 per month. It is implausible to suggest that Mr Browne did not know of this level of hiring and that he did not approve of, or consent to, that hiring.
102 Mr Baxter deposed to the fact that once monthly payments began to fall behind, Mr Browne was extensively involved with respect to their collection. The emails below are self-explanatory and readily confirm Mr Baxter's evidence. It is the fact that from June 2010 onwards, Mr Browne remained the person from whom, and to whom, emails were received and sent on a regular basis regarding the indebtedness of Field Camp Services. Even after the appointment of Mr Carroll, Mr Browne continued to negotiate with Mr McWade on behalf of Field Camp Services in respect of outstanding invoices. There are very few emails in the affidavits which either originated from Mr Carroll, or were sent to him. These emails reveal that Mr Browne was fully aware of the outstanding hire costs and it follows, that, he was aware of such costs exceeding $5,000 per month.
103 In any event, after July 2011, Field Camp Services did not hire any new equipment. Rather, from then on, it was just the ongoing hire of equipment previously hired for which Field Camp Services incurred further debt. The monthly hiring fees then followed prior months' hiring fees. Further, by reason of Mr Browne having made all arrangements to July 2011 to ensure the payment in full of hiring debts in respect of such equipment, as evidenced in the emails below, he must have known the ongoing cost of hiring to exceed $5,000 per month and consented to those hiring fees continuing. It cannot be said that the outstanding debts of Field Camp Services, at any time, caught Mr Browne by surprise.
104 Examples from the emails show the following:
• Mr Browne advised by email dated 19 November 2010 of a payment to be made to Onsite after Field Camp Services collected payment from its debtor.
• Mr Browne sought to refinance Field Camp Services after a merger. He told Mr McWade that Field Camp Services would pay in full, as described by email from him dated 29 March 2011.
• Mr Browne told Mr McWade by emails dated 20 May 2011 and 15 June 2011that he was awaiting payment from debtors in order to pay Onsite. The reasons for non-payment included disputes between Field Camp Services and its debtors. Those disputes were resolved, but not for the full amount sought by Field Camp Services.
• By email dated 8 February 2012, Mr Browne sought to meet Mr McWade in Sydney to resolve payment issues.
These selected emails, as well as many others, demonstrate knowledge on Mr Browne's part of monthly hirings exceeding $5,000 and deferred payments by Field Camp Services.
105 The provision of a monthly estimate in the credit application does not, of itself, demonstrate that Mr Browne would not have entered into the guarantee and indemnity unless he had been assured of a strict or substantial compliance with such a monthly limit. It was not a clear indication of a fixed upper limit intended to be a fundamental obligation or to operate as a condition. It was not a condition precedent to his liability as the surety that such estimate be strictly enforced or require substantial performance. That such an assurance was not given is inherent in the amount being merely a monthly estimate; not an upper limit. The credit application itself stated that credit may be given for a different amount from that which was asked for in the application.
106 It cannot be said that Mr Browne would not have entered into the guarantee and indemnity unless he had been assured that credit would not be granted beyond $5,000 per month. He placed the orders. He accepted that he was responsible for matters until Mr Carroll's employment in June 2010 but, as can be seen from the emails commencing in June 2010 regarding payment of the outstanding hiring fees, Mr Browne was constantly involved in payment arrangements with Mr McWade after Mr Carroll's appointment in June 2010.
107 It is therefore not easy to understand why Mr Browne should be discharged because orders were placed exceeding $5,000 per month.
108 For these reasons and following Hickory, the defence regarding credit beyond $5,000 per month must be rejected.
Extending credit beyond 30 days
109 The commercial credit application provided by its terms that:
Failure to comply with your standard contract terms will cause the withdrawal of credit facilities and lead to subsequent legal action.
110 Mr Browne relies on the mandatory nature of the wording that failure 'will cause the withdrawal of credit facilities'. Credit was not withdrawn when Field Camp Services did not pay in accordance with the credit terms. The application also provided that credit may be stopped at any time.
111 As the sole director and secretary of Field Camp Services, Mr Browne can be taken to have known of its failure to make payment. In any event, Mr Browne does not dispute that only he was involved in the payment of outstanding invoices until June 2010. Mr Browne's evidence was that on 1 July 2010, he gave notice to Mr Baxter of Mr Carroll's employment but, as already seen, the notice was qualified as to 'queries in future if I am away'. Mr McWade continued to send emails to Mr Browne thereafter, not Mr Carroll.
112 Mr McWade, in his role as the Onsite Group credit manager, was intimately involved with Mr Browne to recover outstanding hire costs from Field Camp Services as demonstrated by the emails regarding the outstanding invoices detailed below. These show Mr Browne continued to be, and was constantly involved in, the management of outstanding invoices. His evidence that he was involved only 'as a courtesy' or as 'a messenger' to Mr Baxter was not only unconvincing, but palpably incorrect given the emails noted below. Even if he was just being courteous or just a messenger, he was nonetheless involved.
113 Mr Browne was aware that payment was not strictly enforced. His evidence proceeded as follows:
Now, the payment terms of those invoices, was that they were supposed to be paid within 30 days of the date of issue?---Well, you know, you've got to say by their behaviour I doubt it. You owe significantly greater payment terms than 30 days for over two years, so where do you get the 30 days from?
Well, let's go - - -?---The original agreement in 2009? I think they threw that out the door, didn't they?
Well, the original term in the agreement of 22 October 2009 entered into between the Onsite Rental Group and Field Camp Services was that invoices were to be paid within 30 days. Do you accept that?---Yes. But they never kept to that themselves.
Do you accept that?---No, not really.
So you don't - - -?---In the original agreement it was there, but I don't agree that they kept to that. They allowed variation to that frequently cos they wanted our business.
So the payment terms exceeded 30 days with respect to payment of invoices?---Yes, nearly always. They were always - - -
And the reason why it exceeded 30 days is because Field Camp Services didn't pay Onsite Rental Group within 30 days?---Well, we - we didn't because they were quite happy to agree to extended payment terms continually over a long period of time, not just once or twice.
It wasn't a variation in relation to the 30-day payment terms that extended that time period, was it?---By their - virtue of their behaviour, absolutely.
The reason why payments were made more than 30 days is because Field Camp Services refused to pay Onsite Rental Group?---We renegotiated payment terms to line up with our cash flows. I don't know where refusal comes in, but we negotiated and they agreed.
There's no evidence from you in relation to these renegotiated payment terms, is there?---Well, there is. It's littered throughout this where they're agreeing altered terms and timing, and - and they're agreeing with me. Find me one where they didn't until the end.
The reason why Onsite Rental Group agreed to payment outside the 30 days is because it was trying to collect its debts?---Everyone likes to get their money eventually. I understand that. But they were also after our business. And we were a hefty competitor in the market at the time, and they didn't want us alongside their competitors. And they were doing everything to keep us. They - they broke their own rules.
114 Further, the standard terms and conditions of the credit facility recognize that credit may extend beyond usual trading terms by reason that those conditions also permitted Onsite to charge interest not exceeding prevailing bank overdraft rates and to take security over the debtor's property.
115 Mr Browne knew of the failure by Field Camp Services to make payment within 30 days of invoices having issued and that credit was not withdrawn. This is amply demonstrated by emails passing to and from Mr Browne in respect of unpaid invoices. As he said, Onsite was:
quite happy to agree to extended payment terms continually over a long period of time …
- and
We negotiated payment terms to line up with our cash flows … we negotiated and they agreed.
117 From the emails passing between Mr McWade and Mr Browne, it can be seen that payment arrangements were re-negotiated but, even then, Field Camp Services did not pay in accordance therewith.
118 Mr Browne was well aware of the payment and non-payment of monthly accounts in the context of hiring orders having been placed by him and the contact with him by Mr McWade. He was intimately involved with the payment requirements by reason of his exchange of emails with Mr McWade. He well knew that this did not cause Onsite to withdraw the credit facility open to Field Camp Services. Mr Browne was the sole director of Field Camp Services.
119 Annexed to the affidavits of Messrs Baxter, McWade and Browne are copies of emails either received by, or sent to, Mr Browne as follows:
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120 Mr Browne was constantly in communication with Mr McWade about outstanding invoices from June 2010 to the issue of the writ of summons in this action on 16 August 2012. There are only three months from June 2010 to July 2012 in which emails were not sent, being August 2010, January and February 2011.
121 These emails also show that Mr Browne's evidence that he was not involved with debt recovery was incorrect and unreliable.
122 It cannot be said that Mr Browne would not have entered into the guarantee and indemnity unless he had been assured of a strict performance of the requirement for monthly payment.
123 It was not a condition precedent to the liability of the surety that withdrawal of future credit be strictly enforced.
Revocation of guarantee
124 In his amended defence, Mr Browne claims that he revoked the guarantee by email dated 13 July 2011 to Mr McWade.
125 However, the terms of the guarantee provided that notice of revocation could only be given by pre-paid registered mail to a specified address. Such notice was not to become effective until the expiration of 14 days from the date of posting. It is an agreed fact that such notice of revocation was not given.
126 This is enough to defeat this defence.
127 However, it should also be noted that in any event, the email dated 13 July 2011 from Mr Browne, was not a notice of revocation of the subject guarantee. The email method, by which he said revocation was delivered, was not simply a matter of 'semantics', as Mr Browne put it. The requirements of the notice provision are perfectly clear. Evidence from Mr Browne that he did not recall the notice provision in the terms of the guarantee was unconvincing and did not reflect well on him.
128 In any event, there was good reason from July 2011 for Mr Browne not to send a notice of revocation. That is because, from that time on, Field Camp Services already had Onsite's mining equipment on location and it was generating income for Field Camp Services.
129 Before examining revocation further, it is necessary to understand the extent of the outstanding debts from Field Camp Services to Onsite.
130 Mr McWade sent an email to Mr Browne on 18 April 2011 relating to the debt of $68,907.30 from Field Camp Services to Onsite, to which Mr Browne replied that it was to be paid
in the next few days… That account should be kept in line from there on as we are through our problems now.
131 On 20 May 2011, Mr McWade sent a further email to Mr Browne relating to the debt of $42,824.10 to Onsite. On 23 May 2011, Mr McWade accepted a repayment proposal for Onsite. This was to be paid by instalments, including on 8 July 2011 when there were to be two separate payments of $8,778 each.
132 In cross-examination, Mr Browne's claim that the payment of $17,556 was not the two payments of $8,778 on 8 July 2011, but a coincidental amount, was not credible.
133 As at 8 July 2011, the sum of $8,652.60 only was owing from Field Camp Services to Onsite for April invoices, and this amount was paid on 21 July 2011.
134 Further, in the months leading up to June 2011, the Onsite Group had purchased three other companies being Wasp Diesel Powerhire Pty Ltd, Redstar Equipment Pty Ltd and Statewide Equipment Hire Pty Ltd.
135 Field Camp Services and another company associated with it, Remote Camps Australia Pty Ltd, had previously dealt with Wasp, Redstar and Statewide by hiring mining equipment from each of them. There were outstanding debts from Field Camp Services and Remote Camps to these three companies. In this circumstance, Mr McWade sought a personal guarantee from Mr Browne in respect of the payment obligations of Field Camp Services and Remote Camps to Wasp, Redstar and Statewide in lieu of a bank guarantee. However, there were also disputes about these outstanding debts. Mr McWade and Mr Browne were involved together in the resolution of those disputes.
136 In his email to Mr Browne on 29 June 2011, Mr McWade referred to the outstanding debts owed to Wasp, Redstar and Statewide by Field Camp Services and Remote Camps.
137 The indebtedness of Field Camp Services to Onsite was also referred in that email as being settled monthly 'on a continuing basis'. Mr Browne did not challenge this and made the payment of $8,652.60 on 21 July 2011 as outlined above. This all suggests that money was owing from Field Camp Services to Onsite 'on a continuing basis' following the renegotiation of the payment terms to Onsite by Mr Browne.
138 Mr Browne responded to the 29 June 2011 email by his email on 13 July 2011 as follows:
I cannot guarantee corporate debt, whilst I am a director, I don't own the company and in any case I have no personal assets, so it would be a worthless guarantee and would only be a lever for you to cause me to go bankrupt, to which I obviously would not agree.
139 When Mr Browne refused to provide his personal guarantee by this email, he can only have been refusing in relation to the proposed security to be provided to Wasp, Redstar and Statewide respecting a total amount of $122,944.43, being a settlement of the outstanding $155,000 due to Wasp, Redstar and Statewide.
140 A draft deed of settlement referring to the debt owed to Wasp, Redstar and Statewide was prepared and sent to Mr Browne on 18 July 2011. This draft named Onsite Rental Group Operations Pty Ltd as agent for Wasp, Redstar and Statewide. The deed did not refer to any other Onsite company debts. It also sought an indemnity from Mr Browne, but he refused to sign such a document.
141 Mr Browne then executed a deed of settlement dated 29 July 2011 in respect of the $122,944.43. That deed recited that Mr Browne was the director of Field Camp Services and Remote Camps. The deed did not contain the indemnity previously included in the draft. Although Mr Browne executed the deed in his personal capacity, it did not call upon him to do anything.
142 Mr Browne gave evidence that the deed fixed any debt owed by Field Camp Services to 'Onsite Rental'. He was wrong about that. The deed of settlement was an entire document. It does not refer to any revocation of the guarantee and indemnity in favour of Onsite Rentals Pty Ltd. It clearly refers to a settled debt of $122,944.43 owed to Wasp, Redstar and Statewide as particularised in the recitals to the deed.
143 It was accepted by Mr McWade that the final version of the deed did not require Mr Browne to guarantee Wasp, Redstar and Statewide. He said the final deed did not relieve Mr Browne from his guarantee dated 9 October 2009 to Onsite. Mr McWade appreciated this when giving his evidence when he asked rhetorically
why would I forfeit a personal guarantee that I have prior to that already in my hand?
- There was no need to seek a further guarantee for Onsite Rentals Pty Ltd. I accept Mr McWade's evidence.
144 In all the circumstances, the subject guarantee to Onsite Rentals Pty Ltd was not revoked by the email dated 13 July 2011.
Conclusion
145 The plaintiffs' claim in the sum of $249,989.22 plus interest succeeds. The interest is to be calculated from 1 June 2012 at the rate of 6% per annum, being a daily amount of $41.09. At 722 days, interest totals $29,669.95.
146 Judgment will therefore be entered for the plaintiffs in the sum of $279,659.17.
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