Quirke v FCL Interstate Transport Services Pty Ltd - [2005] SASC 226

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
QUIRKE v FCL INTERSTATE TRANSPORT SERVICES PTY LTD
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Perry and The Honourable Justice Sulan)
24 June 2005
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
An appeal against the decision of a District Court Judge holding the appellant personally liable for company debts under a contract of guarantee - the appellant, as a company director, entered into a contract of guarantee to personally guarantee payments by the company for debts accruing under a transport contract - the guarantee, as worded, was for debts arising from the sales of goods - the transport contract, and the debt in question, were for the provision of services - on appeal - whether the guarantee was correctly construed by the Judge to include the debt for services provided under the transport contract - appeal allowed.
Codelfa Construction Proprietary Limited v State Rail Authority of NSW (1982) 149 CLR 337; Royal Botanic Gardens & Domain Trust v South Sydney City Council (2002) 76 ALJR 436, applied.
Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 79 ALJR 129, discussed.
Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447; Garcia v National Australia Bank Limited (1998) 194 CLR 395, considered.

QUIRKE v FCL INTERSTATE TRANSPORT SERVICES PTY LTD
[2005] SASC 226
Full Court: Doyle CJ, Perry and Sulan JJ

DOYLE CJ: This is an appeal against a decision by a Judge of the District Court.
The main issue on appeal is whether a contract under which Mr Quirke guaranteed “the due payment for all such goods as may be sold to …” Dayrise Produce Pty Ltd (“Dayrise”), entitles FCL Interstate Transport Services Pty Ltd (“FCL”) to judgment for an amount owed by Dayrise to FCL as payment for FCL transporting goods at the request of Dayrise. In the Statement of Claim FCL pleaded that the amount claimed was payment due and payable for “transport services”.
The Judge held that having regard to the circumstances under which Mr Quirke signed the guarantee, the guarantee applied to amounts owing for the provision of services. A claim for rectification of the contract of guarantee was not pursued at trial.
In my opinion the Judge was wrong. The judgment against Mr Quirke must be set aside. My reasons for so concluding are set out below.
Facts
FCL is in the business of transporting goods by rail. It collects goods from its customers, forwards them interstate by rail, and delivers them to the intended receiver. It provides a door to door service.
Dayrise was a packer of citrus fruit. Its packing premises were at Loxton. Mr Quirke is a director. He was involved mainly in the packing of fruit. Mr Lekakis is the other director. He…

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.

Continue reading Quirke v FCL Interstate Transport Services Pty Ltd

Details

AGLC: Quirke v FCL Interstate Transport Services Pty Ltd [2005] SASC 226
Case: [2005] SASC 226
Decision Date: 24 June 2005

CaseChat Overview and Summary

In the matter of Quirke v FCL Interstate Transport Services Pty Ltd, the Court of Appeal addressed an appeal concerning the interpretation of a contract of guarantee. Mr Quirke, a director of Dayrise, a citrus fruit packing company, had signed a guarantee for debts arising from the sale of goods, which was intended to cover the company's liabilities to FCL Interstate Transport Services Pty Ltd for transport services provided. The District Court had ruled that the guarantee also covered the debt for services provided by FCL, which Mr Quirke contested on appeal. The appeal centred on whether the guarantee should be interpreted to cover the debt for services, as the District Court had ruled, or if it was limited to debts arising from the sale of goods.

The court had to determine the precise meaning of the words used in the guarantee and whether the District Court had correctly interpreted the guarantee to include the debt for services provided by FCL. The appeal court noted that the guarantee was explicitly for debts arising from the sales of goods and that the contract between FCL and Dayrise pertained to the provision of services. The appeal court found that the District Court had erred in giving the words of the guarantee a meaning that departed from their ordinary and natural meaning. The appeal court held that the guarantee did not extend to cover the debt for services, as it was limited to debts arising from the sale of goods.

The Court of Appeal allowed the appeal and set aside the judgment of the District Court in favour of FCL. The court ordered that there be substituted a judgment in the District Court for Mr Quirke, dismissing the claim against him by FCL. The Chief Justice's reasons and proposed order were supported by the other judges, affirming that the guarantee did not cover the debt for services provided by FCL.

Orders

Orders of the court

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Background

Background to the litigation

In my opinion the Judge was wrong. The judgment against Mr Quirke must be set aside. My reasons for so concluding are set out below.Facts FCL is in the business of transporting goods by rail. It collects goods from its customers, forwards them interstate by rail, and delivers them to the intended receiver. It provides a door to door service. Dayrise was a packer of citrus fruit. Its packing premises were at Loxton. Mr Quirke is a director. He was involved mainly in the packing of fruit. Mr Lekakis is the other director. He was involved mainly in the administration of the company. Mr Parish provided accounting and administrative services to FCL, from his office in Adelaide. In early June 2002 FCL gave Mr Parish a quotation for transporting oranges for Dayrise to customers in Perth. The quotation stated that “… a credit application must be completed prior to first consignment”. Mr Parish accepted the quotation. Mr Quirke’s evidence indicates that he knew about this, although he was not directly involved in it. Within a few days Dayrise despatched a consignment of oranges to FCL for shipment to Perth. Ms Jensen, the relevant employer of FCL, contacted Mr Parish and told him that FCL could not move the freight without a credit application. However, she said that as the oranges were perishable, FCL would send them to Perth but would not deliver them to the intended recipient until the credit application was completed. Ms Jensen faxed to Mr Parish a one page printed document headed “Credit Application”; a one page printed document headed “Customer Account Information” and a one page printed document which set out the contract of guarantee. Each of the three pages was headed prominently “F.C.L.”, and below that in smaller print was the name of FCL in full. Each document contained spaces and lines in which it was clearly intended that Dayrise would enter information such as its name, address and telephone number, bank, names of persons who could be approached to provide a credit reference and other like matters. The “Credit Application” ended with a line for a signature “on behalf of the Purchaser”. The “Customer Account Information” did not call for any signature. The document containing the guarantee had at the bottom two lines, under each of which appeared the words “Signature of Guarantor” and, to the right of that, the word “Witness”. It also had a space for the insertion of a date between the text of the guarantee and the signatures. The evidence, accepted by the Judge, is that these documents were not completed by Dayrise by the time the oranges got to Perth. Ms Jensen told Mr Parish that the oranges would not be delivered until the documents were completed. Details printed by the facsimile machine on the documents indicate that Mr Parish sent the “Credit Application” and the document containing the guarantee by facsimile to the Loxton premises of Dayrise at 3.11 pm on 1 July 2002. The Judge found that Mr Parish had filled in the lines and spaces by hand with the required information, which meant that all that remained was for someone to sign the “Credit Application” and for the guarantee to be signed.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

In my opinion the Judge erred. It was not open to the Judge, in the process of construing the words used by the parties, to give to those words a meaning that departed from the meaning of the words used.Conclusion For those reasons I would allow the appeal. I would set aside the judgment of the District Court in favour of FCL. I would order that there be substituted a judgment in the District Court for Mr Quirke dismissing the claim against him by FCL. PERRY J: In my view, the appeal should be allowed. I agree with the reasons published by the Chief Justice and with the order proposed by him. SULAN J: I agree that the appeal should be allowed, for the reasons given by the Chief Justice and that the order proposed by him should be made.

Ratio Decidendi

Legal Principle Established

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