Rowe v Metroll SA Pty Ltd

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Court of Appeal


Supreme Court


New South Wales

  • Amendment notes
Medium Neutral Citation: Rowe v Metroll SA Pty Ltd [2021] NSWCA 196
Hearing dates: 18 August 2021
Decision date: 06 September 2021
Before: Bell P at [1];
Leeming JA at [2];
Emmett AJA at [65].
Decision:

1. Rename the second respondent “ACN 149 887 061 Pty Ltd (in liq)”.

2. Appeal dismissed with costs.

Catchwords:

AGENCY – ostensible authority – man used company email address and corporate signature – man closely involved with company’s sole director in finalising orders of building materials – whether man had ostensible authority to bind company

CONTRACT – company purchased building materials from South Australian company – sole director guaranteed company’s obligations to supplier – guarantee expressed to be with Queensland company and “each related body corporate that supplies goods or services to the Customer” – South Australian supplier was related to Queensland company and had similar name – whether South Australian company could enforce guarantee

Legislation Cited:

Corporations Act 2001 (Cth), ss 50, 471B

Personal Property Securities Act 2009 (Cth)

Cases Cited:

Ankar Pty Ltd v National Westminster Finance (Aust) Ltd (1987) 162 CLR 549; [1987] HCA 15

Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2015] WASCA 143

Boyd v Thorn (2017) 96 NSWLR 390; [2016] NSWCA 210

CGU Insurance Ltd v Blakeley (2016) 259 CLR 339; [2016] HCA 2

Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480

McIntosh v Shashouna (1931) 46 CLR 494; [1931] HCA 56

Metroll SA Pty Ltd v Powerpark Systems Pty Ltd [2021] NSWDC 102

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35

Texts Cited:

J Carter, The Construction of Commercial Contracts (Hart Publishing, 2013)

Category:Principal judgment
Parties: Jeremy Richard Rowe (Appellant)
Metroll SA Pty Ltd (First respondent)
ACN 149 887 061 Pty Ltd (formerly known as Powerpark Systems Pty Ltd) (in liq) (Second respondent)
Representation:

Counsel:
R Marshall SC, J Byrne (Appellant)
H Woods (First respondent)

Solicitors:
Keypoint Law (Appellant)
Kanji & Co Solicitors (First respondent)
File Number(s): 2021/00133458
Publication restriction: Nil
 Decision under appeal 
Court or tribunal:
District Court of New South Wales
Jurisdiction:
Civil
Citation:

[2021] NSWDC 102

Date of Decision:
31 March 2021
Before:
Dicker SC DCJ
File Number(s):
2019/00133756

Judgment

  1. BELL P: I agree with Leeming JA.

  2. LEEMING JA: Mr Jeremy Richard Rowe, the sole director and secretary of Powerpark Systems Pty Ltd, appeals from a judgment of the District Court in the amount of $121,300.56 in favour of Metroll SA Pty Ltd. Metroll SA supplied building materials (purlins and the nuts and bolts and joining plates for them) to Powerpark Systems for which it was not paid. Metroll SA sued Powerpark Systems for the unpaid purchase price, and Mr Rowe on his guarantee of Powerpark Systems’ obligations. In late 2020 a liquidator was appointed to Powerpark Systems, which now seems to be named “ACN 149 887 061 Pty Ltd (in liq)”, and at trial…

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Details
Case
[2021] NSWCA 196
Decision Date

CaseChat Overview and Summary

The dispute in *Rowe v Metroll SA Pty Ltd* concerned whether a company was bound by a contract for the supply of building materials, and whether a guarantee provided by the company's sole director extended to the South Australian supplier. The case came before the Court of Appeal of New South Wales, with Bell P, Leeming JA, and Emmett AJA presiding.

The primary legal issues before the Court were: first, whether an individual, who used a company email address and corporate signature and was closely involved with the company's sole director in finalising orders, possessed ostensible authority to bind the company to the contract; and second, whether the guarantee, which referred to a Queensland company and "each related body corporate that supplies goods or services to the Customer," could be enforced by the South Australian supplier, given its relationship to the Queensland company and similar name.

The Court reasoned that for ostensible authority to arise, the company must have represented that the individual had authority to act on its behalf, and the other party must have relied on that representation. The Court found that the use of the company email and signature, coupled with the individual's active involvement in the ordering process, constituted sufficient representation of authority. Regarding the guarantee, the Court determined that the South Australian supplier fell within the description of a "related body corporate that supplies goods or services to the Customer" as contemplated by the guarantee, thereby enabling it to enforce the guarantee.

The Court of Appeal dismissed the appeal with costs, ordering that the second respondent be renamed "ACN 149 887 061 Pty Ltd (in liq)".

Orders

Orders of the court

1. Rename the second respondent “ACN 149 887 061 Pty Ltd (in liq)”.

2. Appeal dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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