Rowe v Metroll SA Pty Ltd

[2021] NSWCA 196

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 in March 2021 Metroll SA proceeded only against Mr Rowe. It seems that the action brought by Metroll SA in the District Court against Powerpark Systems remains undetermined, subject to the stay effected by s 471B of the Corporations Act 2001 (Cth). That did not prevent Powerpark Systems being a proper party to Mr Rowe’s appeal, and at the hearing directions were made requiring Mr Rowe to file and serve an amended notice of appeal joining the company, but on the basis that no orders would be made affecting it without its liquidator being given an opportunity to be heard.

3. The invoices giving rise to the judgment debt were based on some eight orders placed in late September and October 2018, each of which involved Mr Scott Fitzpatrick. During the same period, Metroll also supplied construction materials pursuant to orders placed by Mr Ryan Ford, for which Powerpark Systems was held not to be liable (and therefore for which Mr Rowe was not liable as its guarantor). The distinction turned upon the fact that the primary judge found that Mr Fitzpatrick had ostensible authority to bind Powerpark Systems, while Mr Ford did not. There is no cross-appeal from Metroll SA’s failure in relation to the orders placed by Mr Ford. Mr Fitzpatrick used an email address “[email protected]” and his emails were signed “Scott Fitzpatrick Powerpark Projects Team” with a Powerpark logo underneath. The evidence showed that his email account was established in late 2017 and early 2018, but Mr Rowe maintained that this had not been authorised, and that he had never noticed the Powerpark email address and logo used by Mr Fitzpatrick, even though he was copied into to many of the emails.

4. Mr Rowe makes two submissions on appeal. First, he submits that the primary judge erred in finding that Mr Fitzpatrick had ostensible authority. There being no challenge to the adverse demeanour-based findings made by the primary judge concerning Mr Rowe, this turns on the contemporaneous documents, for it is submitted that there was no evidence to support a finding of ostensible authority. (Metroll SA’s case of actual authority was rejected, and there is no notice of contention.)

5. Secondly, Mr Rowe submits that the primary judge erred in construing the guarantee which was expressed to be in favour of “Metroll Queensland Pty Ltd and each related body corporate that supplies goods or services to the Customer” as extending to Metroll SA. This is a question of construction. It was common ground that Metroll Qld Pty Ltd and Metroll SA Pty Ltd have the same holding company and therefore are “related bodies corporate” within the meaning of s 50 of the Corporations Act 2001 (Cth). There was also no dispute, at least in this Court, that Metroll SA in fact supplied the building materials in accordance with the invoices.

6. There were many more issues debated over a three day trial than are maintained on appeal in this Court. The foregoing indicates the relatively discrete nature of the issues arising, and enables an abbreviated summary of the background.

Factual background

7. In December 2017, Powerpark Systems gave quotations for the manufacture and installation of structures holding solar panels above carpark spaces at Castle Plaza Shopping Centre and Elizabeth Shopping Centre, both in South Australia, in the amounts of $1,028,473 and $2,973,484. It seems that in April or May 2018, it succeeded in entering into Design and Construct contracts derived from AS4300-1995 with Energy Solutions Pty Ltd trading as Beon Energy Solutions at fixed price lump sums of $3,204,517.24 and $1,108,035.88, both exclusive of GST. By 31 August 2018, in the weeks leading up to the placement of the orders, Metroll SA appears to have been paid the first three milestones for each project. However, one Powerpark Systems document suggests that at this time the company was suffering cashflow difficulties (“cashflow has been hit hard”).

8. Mr Scott Fitzpatrick was a director of PV Structures Pty Ltd, a company with experience in installing columns, structural frames and purlins, including for solar carparks. Mr Rowe’s case, both at trial and in this Court, is that he had understood that Mr Fitzpatrick’s involvement in ordering construction materials from Metroll SA was on behalf of PV Structures. In particular, Mr Rowe denied noticing that Mr Fitzpatrick used a Powerpark email address and signature despite Mr Fitzpatrick copying Mr Rowe into emails by which he placed orders for construction materials from Metroll SA.

9. An example, highlighted in the re-examination of Mr Rowe at trial and at the commencement of Mr Rowe’s submissions in this Court, was Mr Fitzpatrick’s email to Mr Chad Porter of Metroll SA identifying a large number of purlins required for the Castle Plaza site. Mr Rowe gave evidence that the email as it appeared on his phone was as follows:

10. The email as it would appear on a PC screen was as follows:

11. Mr Rowe said that he did not see the signature lines at the end of the email, and that the email application on his mobile phone did not display the actual email address.

12. That email had been preceded by an email of 31 August 2018, in which Mr Paul Jensen, the “National Business Development Manager”, wrote to Mr Rowe attaching a document entitled “Metroll ‘National’ Credit App & T&C’s.pdf”, which was the four page form ultimately executed by Mr Rowe. Mr Jensen’s email said:

“Hi Jem,

Requires to be returned with a copy of Drivers Licence and a copy of company letterhead.

We can then use across all of our sites.

Thanks for the opportunity.”

13. On 5 September 2018, Mr Rowe wrote to Mr Porter attaching a plan described as “POWERPARK C20024 Purlin Version 3” identifying where in the body of the purlins holes were to be punched. His email stated:

“Mate, please see the detail below, ignore the overall length for now, as Scott is confirming to total lengths etc, but either way it will be about 85mm to the first centre hole then multiples of 1025 to next centre hole???”

14. The primary judge found that the reference to “Scott” was likely to be a reference to Mr Fitzpatrick: at [22]. Nothing in the evidence pointed to any other “Scott”, and of course Mr Fitzpatrick had, the previous week, supplied the spreadsheet dealing with the lengths. Metroll SA said that the email indicated an awareness on the part of Mr Rowe that Mr Fitzpatrick was involved in the process of ordering construction materials from Metroll SA.

15. The following day, 6 September 2018, Mr Fitzpatrick wrote to Mr Porter at Metroll SA attaching a spreadsheet relating to the order for purlins at Castle Plaza. His email included:

“We have changed things a tad to accommodate Jem’s need for the flanges to be punched as well (I believe he has been speaking with you on that) so hopefully you have that all sorted out with him..”

Mr Rowe was cc’d into the email. The reference to “Jem” in the email was to Mr Rowe.

16. Later that afternoon, Mr Porter sent Mr Rowe a quote for the punch and die. It was in the amount of $1,071.40, inclusive of GST. Mr Marshall, who appeared for Mr Rowe in this Court and at trial, noted the peculiarity that the delivery address and customer were stated to be “Trade Sales” and the address was that of Metroll SA. Mr Woods, who appeared for Metroll SA in this Court and at trial, submitted that that was explained by the fact that the die would physically be located on Metroll SA’s premises, to be used to punch holes in the purlins. Nothing turns on whether or not that explanation is correct.

17. On 21 September 2018, Mr Fitzpatrick emailed Mr Porter, copying in Mr Rowe, concerning the revisions to the quantities of purlins, but also asking “How have you gone with getting Jem’s die for the flange punches?”

18. On 28 September 2018, Mr Fitzpatrick emailed Mr Porter, copying in Mr Rowe, under the subject “Final revised orders for first order at Elizabeth and Castle”, and attaching a spreadsheet with those orders. By way of example, the spreadsheet included total lengths of 78.58m comprising 8 purlins each of length 9822.5mm, 65.6m comprising 8 purlins each of length 8200mm and 32.8m comprising 8 purlins each of length 4100mm. I shall return to these numbers momentarily.

19. On 9 October 2018, Mr Porter sent an important email to Mr Rowe, attaching quotations for both the punch and die and the supply of purlins for Castle Plaza and Elizabeth. The text of the email was as follows:

"Scott is just checking the punching details, once he has done that we are ready to proceed with the orders for both Castle Plaza & Elizabeth.

For us to proceed I either need the completed account application form or payment.

I've attached the quote for both projects as well as the punch & die."

20. The quantity of purlins corresponded precisely to the quantities identified on Mr Fitzpatrick’s 28 September 2018 spreadsheet. For example the quote included 8 purlins of length 9.822m, 8 purlins of length 8.2m, and 8 purlins of length 4.1m.

21. There were two responses to Mr Porter’s email. First, on 11 October 2018, Mr Rowe sent receipt details of an electronic funds transfer for the punch and die to Mr Porter, and it was established by the tender of a Metroll SA bank account that Mr Rowe had transferred funds into an account in the name of “Metroll SA Pty Ltd”.

22. Later that afternoon, Mr Fitzpatrick emailed Mr Porter, copying in Mr Rowe, referring to a discussion relating to his checking the various punches, and then stating “Just spoke to Jem, account form will be with you this afternoon”.

23. That expectation was not fulfilled, but on the morning of the following day, an employee of Powerpark Systems, Ms Hanley, operating from an email address “[email protected]” sent to both Mr Porter and Mr Jensen, copying Mr Rowe, a scan of the executed Credit Account Application. There were at least two irregularities with her email.

1. First, the subject was “Cash Only Account – Form” although the application was styled “Credit Account Application”, and Mr Porter had made it plain that in order to proceed what was needed was either a credit account application form or payment.

2. Secondly, the form incorrectly (and apparently in Ms Hanley’s handwriting) gave the email address “[email protected]” (that is to say, omitting the “.au”). There was evidence that the email address “[email protected]” may have been connected with a site in Norway and had no connection with Mr Rowe’s company.

24. I shall return to the details of the contractual documents below. Thereafter, over the next few weeks, as the primary judge uncontroversially summarised over three pages at [141], Mr Fitzpatrick (and also Mr Ford) placed various orders, including varying and cancelling some. These details are immaterial for present purposes. It was accepted, at least for the purposes of the appeal, that the materials purportedly ordered on behalf of Powerpark Systems were supplied on the relevant South Australian site by Metroll SA. Some were in fact seen by Mr Rowe when he visited.

25. Metroll SA sent its invoices to the email address handwritten on the application, rather than the email address from which the application had been sent to it. The invoices were not paid. The matter came to a head in the first quarter of 2019, and ultimately Metroll SA sued Powerpark Systems and Mr Rowe.

The guarantee and indemnity

26. It is fair to say that the guarantee and indemnity on which Metroll SA sued was lamentably drafted. It constituted the second of four pages of the “Credit Account Application” which Mr Rowe was invited to complete before work could commence on the first orders for each site. The first page was on the letterhead of Metroll Qld Pty Ltd but was headed:

“CREDIT ACCOUNT APPLICATION to Metroll Queensland Pty Ltd and each related body corporate from which the Customer orders goods or services (“the Company”)”

27. The first page was completed in hand to identify Powerpark Systems as the “Customer”. As noted above, the email address “[email protected]” was completed in hand seemingly by the administrative assistant who also witnessed Mr Rowe’s signature. The first clause identified the terms and conditions which constituted the third and fourth pages of the document and provided that “notwithstanding any other document, terms and conditions, and/or anything else except a written agreement signed by me/us and the Company any sale and delivery of goods and services to me/us shall be upon these Terms and Conditions of sale and no other except for such terms as are implied by or under any law and which cannot be excluded”.

28. The terms and conditions on the third and fourth pages purported to reserve title to the goods, to impose an obligation upon the customer to notify the owner of any land to which the goods were attached that the goods were subject to the reservation of title, to give Metroll SA rights under the Personal Property Securities Act 2009 (Cth) and to give a charge over any land owned legally or beneficially by the Customer. It is not necessary to express a view as to whether any of those provisions was actually effective to give Metroll SA any valuable rights in the event that its Customer failed to pay and went into external administration, as occurred here, and in light of the undetermined litigation between Metroll SA and Powerpark Systems, it would be inappropriate to do so.

29. The relevant clauses in the guarantee and indemnity were as follows:

"In consideration of the Company (being Metroll Queensland Pty Ltd and each related body corporate that supplies goods or services to the Customer) at my/our request (which I/we hereby make) agreeing to supply and/or to continue to supply the Customer and at my/our express request forbearing to sue for any monies now owing to the Company by the Customer I [Jem Rowe] ("the Guarantors") hereby JOINTLY AND SEVERALLY GUARANTEE to which Company the due and punctual payment of all monies owing or remaining unpaid to the Company by the Customer as follows:

1. The Guarantors will pay to the Company on demand without deduction or set-off, all monies now payable or may in the future be payable by the Customer including without limitation all interest, administration, collection and legal costs of recovery of such monies, and the Company need not first take recovery proceedings against the Customer."

30. Clause 2 stated that the guarantee was a continuing guarantee, unaffected by a wide range of circumstances. Clauses 3 and 4 were indemnities. Clause 5 purported to reinstate the guarantee if it were vitiated or suspended for any reason including by reason of a deed of arrangement. Clause 6 authorised credit information to be sought by “the Company and its associated companies”. Clause 7 purported to charge all interests in land held beneficially or as trustee in favour of the Company as security for the guarantor’s obligations. Clause 8 provided for revocation by service of a notice at “the Company’s registered office”. Clause 9 was a confirmation that the guarantors had obtained solicitor’s advice and understood the nature of the guarantee and the obligations under it.

31. It was contended that guarantees should be read strictly, and in favour of the guarantor, that “each related body corporate” had an indefinite meaning, and a meaning which might fluctuate from time to time depending upon corporate activities of Metroll Qld Pty Ltd or its parent without the knowledge or control of the guarantor, as a result of which it was uncertain and wholly invalid. Alternatively, it was submitted that the guarantee should be read as confined to a guarantee in favour of Metroll Qld Pty Ltd. Although submissions were not advanced by Mr Rowe based on cll 6 and 8, his favoured construction that “Company” meant only Metroll Qld Pty Ltd was supported by the fact that cl 6 referred to “the Company and its associated companies”, and cl 8 proceeded on the basis that there was a single registered office of the Company, to which a notice of revocation might be sent. Both clauses sat awkwardly with the definition of “Company” extending to related companies.

32. It is not necessary to express a view on many of the questions of construction prompted by the document. The parties’ submissions were, appropriately, confined to the dispositive questions, according with the point made by Professor Carter:

“It is also obvious that, in engaging in construction, a court does not always determine the full scope of the words at issue. All that is required is a solution to a particular problem or set of problems. The only relevant purpose lies in resolving the particular dispute”: J Carter, The Construction of Commercial Contracts (Hart Publishing, 2013), p 11.

33. All that presently matters is whether Metroll SA was entitled to sue on the guarantee, without joining as co-plaintiff Metroll Qld or any other company, and whether the guarantee extended to monies owed by Powerpark Systems to it.

33. As it turns out, that question and the question of Mr Fitzpatrick’s ostensible authority are resolved by regard to the immediate context in which the guarantee came to be executed.

The position as indicated by the contemporaneous documents when the guarantee was executed

35. To anticipate the issues arising concerning the construction of the guarantee, it is unambiguously clear that Powerpark Systems contracted with Metroll SA for the supply of the custom die. The money was paid to Metroll SA’s bank account, and the die itself was to be located in South Australia, applied to the purlins purchased by Powerpark Systems. As previously noted, the quotes to supply purlins were on Metroll SA letterhead. Further, Chad Porter, whose email described him as “General Manager, Metroll SA Pty Ltd” followed by details of the South Australian address and telephone and fax numbers, was by his email of 9 October 2018 indicating that if Metroll SA were to proceed to complete orders in accordance with the quotes attached to that email, “I either need the completed account application form or the payment”. Mr Rowe in fact supplied both. He supplied payments on 11 October 2018 personally, by transfer of funds to Metroll SA Pty Ltd. And, the following day, he caused Ms Hanley to send the completed Credit Account Application which he had executed to both Mr Jensen and Mr Porter.

36. True it is that there were a number of Metroll related companies, and Mr Rowe had been dealing with both the Queensland and South Australian company. So far as the evidence disclosed, Mr Rowe’s dealings with the Queensland company were confined to the establishment of a “national account” as summarised above. More importantly, it is plain that Mr Rowe, by transferring funds for the punch and die and returning the completed application, was accepting offers made by the quotations signed by Metroll SA for the supply of building materials to the sites in South Australia in respect of which Powerpark Systems had significant contractual obligations.

The reasons of the primary judge

37. The trial occupied 3, 4 and 8 March 2021, and his Honour produced a lengthy judgment, promptly, on 31 March 2021: Metroll SA Pty Ltd v Powerpark Systems Pty Ltd [2021] NSWDC 102. In light of the confined nature of the appeal, it may be addressed relatively concisely.

38. After summarising the pleadings, his Honour gave a detailed account of the documentary evidence at [8]-[44], and testimonial evidence at [45]-[93]. All that is significant for present purposes concerning the latter is his Honour’s findings at [93] that:

“Overall, I did not find Mr Rowe to be an impressive witness. I have referred to a number of areas where I do not accept his evidence. In my view, it was clear to Mr Rowe that in signing the CAA he was seeking credit and he was giving a guarantee to the plaintiff in relation to any liability of the first defendant to it. The email correspondence also clearly satisfies me that Mr Rowe was fully aware of Mr Fitzpatrick's involvement on behalf of the first defendant in ordering purlins from the plaintiff.”

39. After dealing uncontroversially with applicable principles of contractual construction, his Honour addressed whether Metroll SA was a party to the Credit Account Application. His Honour concluded that it was, on the basis that the relevant dealings were with Metroll SA, including the order of the punch and die, the quotes Mr Rowe received and the payment of monies into Metroll SA’s account. His Honour considered that the reference to “each related body corporate” extended to Metroll SA both as a matter of the understanding of an ordinary and reasonable businessperson and also in accordance with s 50 of the Corporations Act, noting that Metroll SA and Metroll Qld both had the term “Metroll” in their names and the context included the conversations concerning the desirability of having a national Metroll account.

40. His Honour addressed the authority of Mr Fitzpatrick and rejected Metroll SA’s submission that there was either express or actual authority at [130]-[131]. Critically, his Honour concluded that Mr Fitzpatrick had ostensible authority to bind Powerpark in making orders for purlins on its behalf. The dispositive reasoning is at [132]-[135]:

“132 … In my view, the failure by Mr Rowe in all the circumstances in the light of the emails which were copied to him from Mr Fitzpatrick and were directed to or copied to Mr Porter of the plaintiff, to inform the plaintiff that Mr Fitzpatrick had no authority to place orders on behalf of Powerpark Systems amounted to the holding out by Powerpark Systems through Mr Rowe of Mr Fitzpatrick as having the authority to make the orders on behalf of the first defendant. Similarly, Mr Rowe permitting Mr Fitzpatrick to send the emails also amounted to a grant of ostensible authority to him by the first defendant to order purlins on behalf of the first defendant. On all the facts, I accept that representatives from the plaintiff relied on the authority of Mr Fitzpatrick. However, in my view the evidence does not extend to ostensible authority being granted to Mr Ryan Ford.

133 Accordingly, if not from after the email dated 27 August 2018 from Mr Fitzpatrick to Mr Porter copied to Mr Rowe but certainly immediately after the 28 September 2018 email from Mr Fitzpatrick to Mr Porter copied to Mr Rowe, Powerpark Systems held out that Mr Fitzpatrick had its authority to make orders for the purlins and related parts on behalf of the first defendant. At no time did Mr Rowe on behalf of the first defendant raise any issue as to Mr Fitzpatrick’s authority until 2019 after the invoices were forwarded to Mr Rowe.

134 A number of the emails referred to the involvement or interaction of Mr Fitzpatrick and Mr Rowe: see Exhibit C pages 87 (reference to ‘Scott’); 89 (reference to accommodating ‘Jem's need’); 105 (‘getting Jem’s die’); 114 (reference to ‘Scott is just checking’); 121 (reference to ‘Just spoke to Jem’). These emails support the finding of the clothing by the first defendant through Mr Rowe of Mr Fitzpatrick with ostensible authority to order purlins and related goods from the plaintiff on behalf of the first defendant.

135 In addition, in my view from these emails the plaintiff could assume that Mr Fitzpatrick had authority as agent of Powerpark Systems to make the orders under s 129(3) of the Corporations Act.”

41. On that basis, his Honour found that Powerpark Systems was liable to Metroll SA, and Mr Rowe had guaranteed its obligations in respect of orders 1, 1A, 2, 5, 6, 7, 8, and 9, which totalled $100,640.54. Pre-judgment interest of $20,660 contributed the balance of the judgment entered against Mr Rowe from which this appeal is brought.

Grounds 1 and 2: Agency

Mr Rowe’s submissions

42. Mr Rowe commenced with the non-controversial proposition:

“The point is if you’ve got somebody who’s trying to order goods from a supplier, and that person doesn’t have authority but copies somebody who does have authority, the sole director of the proposed purchaser, to the email, does that bind the proposed purchaser to any order made and accepted by the person sending the email, and in my submission that just can’t be right.”

43. As refined in Mr Rowe’s written and oral submissions, the challenge to the finding that Mr Fitzpatrick had ostensible authority to bind Powerpark was framed in terms of there being no evidence to support Mr Rowe’s awareness that Mr Fitzpatrick was operating using a Powerpark email address. That forensic stance reflected the practical reality that there was no basis to set aside the adverse demeanour-based findings made by the primary judge about Mr Rowe.

44. The submissions focussed on Mr Rowe’s evidence that he viewed emails on his mobile phone, and, as indicated above, Mr Fitzpatrick’s email address and the signature to his emails were not necessarily displayed. Mr Rowe relied upon the absence of evidence that he had a computer, or if he did have one, that he had access to it, or that he viewed emails on a computer, and the limited cross-examination on these points. Understandably, Mr Rowe relied on the favourable finding that Mr Fitzpatrick lacked actual authority to bind Powerpark Systems. Accordingly, he challenged the reasoning at [132]. He said there was “no basis for the trial judge to go on to conclude that Mr Rowe had actually seen the offending emails in their full form on his computer”.

45. Mr Rowe also pointed to the preceding sentences by the primary judge:

“Mr Fitzpatrick copied a number of important emails to Mr Rowe with many of these being above the heading “Powerpark Projects Team”. Although Exhibit 2 does not have this footer, Mr Rowe merely said that he did not notice it on the relevant emails from Mr Fitzpatrick. He did not say that the footer was not replicated on his computer.”

46. Mr Rowe submitted that while that passage was accurate so far as it goes, Mr Rowe did not adduce evidence that he had a computer, or used it to read emails. Nor did Metroll SA. He maintained that there was no evidentiary onus upon him to prove that he did not see the emails on his computer.

47. Mr Rowe submitted that “[t]his no evidence error undermines the trial judge’s conclusion that Mr Fitzpatrick had ostensible authority to order the purlins on behalf of PowerPark”.

Consideration

48. I do not accept Mr Rowe’s submissions.

49. First, although it is true that the entirety of a longer email from Mr Fitzpatrick would not be entirely visible on the handset, as indicated in the screenshot reproduced above, there is nothing to suggest an impossibility of scrolling through an email on a handset, and common sense indicates that that must at least have been possible.

50. Secondly, some of the emails sent by Mr Fitzpatrick on Powerpark signature were very short, and Mr Marshall conceded that it was at least open to this Court to conclude that when Mr Rowe viewed one of Mr Fitzpatrick’s shorter emails, the fact that he was signing off as “Powerpark Projects Team” would have been apparent.

51. Thirdly, the reasoning in [132] and [133] was not the entire basis of the finding of the primary judge. Significantly, at [134], his Honour referred not to the form of the emails but to their content, which demonstrated that Mr Fitzpatrick and Mr Rowe were actively engaging with the communications each sent to Metroll SA concerning purlins and the location of the holes to be punched within them in the course of finalising the details of the company’s orders. The force of the recitation by the primary judge of details of the emails showing the close interaction between “Scott” and “Jem” concerning the ordering of the custom die and the purlins was to support the conclusion that Mr Fitzpatrick was working extremely closely on the order with Mr Rowe, thereby clothing him with ostensible authority to bind the company. From the perspective of Metroll SA, the details required for Powerpark Systems’ orders were coming from both Mr Fitzpatrick and Mr Rowe. Further, the emails were conveying to Mr Porter that Mr Fitzpatrick and Mr Rowe were talking directly to one another about the details to be fulfilled. Those exchanges, based on the substance rather than the form of the emails sent and received by Mr Fitzpatrick, amply suffice to conclude that there was (at least) ostensible authority on the part of Mr Fitzpatrick to bind Powerpark Systems.

52. The joint judgment of the High Court in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [36] summarised the general principles concerning ostensible authority, including Diplock LJ’s analysis in Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 503 that “[t]he representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract”. Here Metroll SA was dealing with a sole director and Mr Fitzpatrick. The two men were closely engaged on the details of the orders of the custom die and the purlins. Mr Rowe unquestionably had authority to bind his company. Mr Rowe’s emails confirmed that he was dealing with Mr Fitzpatrick at the level of detail concerning the order. Further, Mr Fitzpatrick was transparently dealing with Metroll SA at all times using a Powerpark email address and email signature. There was no challenge at trial or on appeal to Mr Porter relying on what was apparent on the face of the email. Finally, after the details of the purlin order had been established, and when Metroll SA stated on 9 October 2018 that payment or completion of the account application form was required in order for it to proceed on the order which had been formulated by Messrs Rowe and Fitzpatrick and which was attached to the email, that form was executed by Mr Rowe.

53. The upshot is that this was a clear case of ostensible authority, namely, where Mr Fitzpatrick was held out as having authority to bind the company, and Metroll SA relied on that apparent authority to enter into a contract with the company.

54. These grounds are not made out.

Grounds 3 and 4: Was Metroll SA entitled to sue on the guarantee?

Mr Rowe’s submissions

55. These grounds were developed in the parties’ written submissions and largely unelaborated orally.

56. By ground 3, Mr Rowe maintained that Metroll SA was not a party to the contract, and by ground 4 he maintained that he was not a party to any guarantee with Metroll SA.

57. No point was taken about whether Mr Rowe’s guarantee was joint or several, which is to say whether Metroll SA might sue without joining the joint promisees. Rule 6.20 of the Uniform Civil Procedure Rules requires all persons jointly entitled to the same relief to be joined as parties in any claim for that relief which is made by any one of them. If unwilling to be joined as a co-plaintiff, a joint promisee could be joined as a defendant in the manner explained by Nettle J in CGU Insurance Ltd v Blakeley (2016) 259 CLR 339; [2016] HCA 2 at [107]-[110], reflecting the procedural approach adopted in chancery prior to the Judicature legislation: see Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2015] WASCA 143 at [44]-[50]. It may be doubted whether relief on this ground would be available in this Court, no point having been taken below and the action being permitted to go to trial as constituted without joining any other Metroll company (cf McIntosh v Shashouna (1931) 46 CLR 494 at 504; [1931] HCA 56), and noting that for many decades, no proceeding has been dismissed for want of parties: see Boyd v Thorn (2017) 96 NSWLR 390; [2016] NSWCA 210 at [96]-[102]. But in any event, the obligation upon Mr Rowe was to guarantee “to each Company the due and punctual payment of all moneys owing or remaining unpaid to the Company by the Customer.” Of its nature, the Customer’s debt could only be to a single Metroll company. In the present case, that company was Metroll SA. I think the better view is that the guarantee properly construed is in favour of each Metroll company severally, in relation to the debt to that company owed by the Customer, and that is so notwithstanding that the guarantee took the effort to insist that where there is more than one guarantor, each obligation was joint and several, while not attending to whether the promisees of that obligation were joint or several.

58. Mr Rowe’s submissions did not fasten upon whether his guarantee was given to Metroll Qld and all its related companies jointly or severally. Rather, Mr Rowe contended that objectively Metroll Qld Pty Ltd was, as a matter of construction, the only party to the contract, and that because Powerpark Systems had no liability to Metroll Qld, he was not liable on his guarantee. He relied on a strict approach to the construction of guarantees, and the contra proferentem rule confirmed in Ankar Pty Ltd v National Westminster Finance (Aust) Ltd (1987) 162 CLR 549 at 561; [1987] HCA 15.

Consideration

59. Again, I am unable to accept Mr Rowe’s submissions, notwithstanding the infelicity of the drafting of the guarantee.

60. Mr Rowe’s construction gives no weight to the words “and each related body corporate that supplies goods or services to the Customer”. It may be accepted that there is scope for debate as to precisely what meaning is to be imputed to the parties by the words “each related body corporate”. Those words might be construed as importing the full width of “related” in s 50 of the Corporations Act or they might have some narrower meaning. It is unnecessary to express a concluded view on that point, because there was only ever a single Metroll company with which Powerpark was dealing for the supply of building materials. That company was Metroll SA Pty Ltd, and on any view of the meaning of the words, Metroll SA Pty Ltd was a related company to Metroll Qld Pty Ltd.

61. Powerpark Systems had been dealing expressly with officers of Metroll SA to supply building materials to two South Australian sites. Mr Rowe had days before signing the guarantee deposited funds into the account of Metroll SA in order for his company to buy a custom die from that company. Metroll SA had provided quotations which were to be accepted by, inter alia, the return of the completed Credit Account Application which was attached to the self-same email.

62. There may well be questions about whether other Metroll companies were parties to the guarantee and indemnity, but there can be no doubt that a related body corporate which supplied goods to Powerpark Systems was Metroll SA, and that Metroll SA was a party to the guarantee executed by Mr Rowe.

Conclusion and orders

63. For those reasons none of the grounds of appeal are made out. The appeal should be dismissed. There is no reason for costs not to follow the event. In those circumstances, it is not necessary to address the position of Powerpark Systems Pty Ltd (in liq) or its liquidator.

64. I propose the following orders:

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

2. Appeal dismissed with costs.

65. EMMETT AJA: The question in this appeal is whether the appellant, Mr Jeremy Rowe, has a liability to the respondent, Metroll SA Pty Ltd (Metroll SA), under a “Guarantee and Indemnity” dated 11 October 2018 (the Guarantee). Metroll SA sued Mr Rowe in the District Court of New South Wales on the basis that he was liable under the Guarantee for the price of goods sold by Metroll SA to Powerpark Systems Pty Ltd (Powerpark Systems). Mr Rowe denied liability on two bases. The first was that Powerpark Systems was not indebted to Metroll SA and the second was that the Guarantee was not given in favour of Metroll SA.

66. For reasons published on 31 March 2021, a judge of the District Court (the primary judge) found both that Powerpark Systems was liable to Metroll SA and that the Guarantee was addressed to Metroll SA. The primary judge therefore directed the entry of judgment for Metroll SA against Mr Rowe in the sum of $121,300.56, which included interest in the amount of $20,660. His Honour subsequently ordered Mr Rowe to pay Metroll SA’s costs of the proceedings. By notice of appeal filed on 12 May 2021, Mr Rowe appeals to this Court from the orders made by the primary judge.

Liability of Powerpark Systems

67. The primary judge considered that the question of whether Powerpark Systems was indebted to Metroll SA turned on whether or not Mr Scott Fitzpatrick was held out by Powerpark Systems as having authority to place orders for goods to be supplied by Metroll SA.

68. By an email dated 31 August 2018, Mr Paul Jensen sent to Mr Rowe a credit account application form. The email named Mr Jensen as the national business development manager of “Metroll”, without identifying any specific Metroll entity. The email said:

“Requires to be returned with a copy of Drivers Licence and a copy of company letterhead.

We can then use across all of our sites.

Thanks for the opportunity.”

The account application form consisted of four pages. The first was headed as follows:

“CREDIT ACCOUNT APPLICATION to Metroll Queensland Pty Ltd and each related body corporate from which the Customer orders goods or services (‘the Company’)”.

The second page was the Guarantee, which commences as follows:

“In consideration of the Company (being Metroll Queensland Pty Ltd and each related body corporate that supplies goods or services to the Customer) at my/our request (which I/we hereby make) agreeing to supply and/or to continue to supply the Customer and at my/our express request forbearing to sue for any monies now owing to the Company by the Customer.

I ………….. (‘the Guarantors’) hereby jointly and severally guarantee to each Company that due and functional payment of all monies owing remaining unpaid to the Company by the Customer ….”

The third and fourth pages consisted of “Terms and Conditions of Sale of Metroll Queensland Pty Limited and its related bodies corporate”.

69. On 9 October 2018, Mr Chad Porter of Metroll SA sent an email to Mr Rowe saying that Mr Fitzpatrick was “checking the punching die details” and that, once he had done that, Metroll SA would be ready to proceed with orders. Mr Porter said that, for Metroll SA to proceed, he needed either “the completed account application form” or payment. Mr Porter attached to his email three quotations, two for projects in South Australia and one for a “punch & die”.

70. On 12 October 2018 at 10.05 am, Ms Anna Hanley of Powerpark Systems sent an email to Mr Jensen and Mr Porter to which she attached a completed credit account application. Ms Hanley said in her email:

“Please let me know if I have filled this out correctly.”

The credit application form was completed with the name “Powerpark Systems” as “the Applicant” and Powerpark Systems was defined as “the Customer”. The Guarantee was completed with Mr Rowe’s name and address as guarantor and was signed by Mr Rowe. The witness to his signature was Ms Hanley. At 11.52 am on 12 October 2018, Mr Porter responded to Ms Hanley saying:

“Account is up & running.”

71. The punch and die were subsequently paid for by cash transfer and delivered to Powerpark Systems. The goods described in the other two quotations were subsequently manufactured by Metroll SA. Some of those goods were delivered to Powerpark Systems in South Australia. Others were not delivered because payment for them was not received.

72. It seems clear enough that Mr Rowe accepted the offer made by Metroll SA to supply the goods in question. Accordingly, there can be little doubt that Powerpark Systems became indebted to Metroll SA for the price of the goods.

73. The question as to the liability of Mr Rowe depends upon whether the Guarantee is addressed to Metroll SA. Clearly, the Guarantee is addressed to Metroll Queensland Pty Ltd (Metroll Qld). However, it is common ground that Metroll SA is a related body of Metroll Qld within the meaning of the Corporations Act 2001 (Cth), in that each of them is a subsidiary of Pacific Industrial Corporation SA.

74. While there are very significant difficulties with the language of the Guarantee, it is clear enough that it is addressed to any body corporate that is related to Metroll Qld and that supplies goods to Powerpark Systems. Thus, it is clearly addressed to Metroll SA, notwithstanding that that entity is not named in that way in the Guarantee.

75. However, Powerpark Systems is now in liquidation. It is unclear whether Metroll SA has proved in the winding up of Powerpark Systems. Powerpark Systems is a necessary party to proceedings in which the question of its indebtedness to Metroll SA is in question. A question therefore arises as to the competency of the appeal in circumstances where, following the winding up of Powerpark Systems, no order seems to have been made by the District Court in relation to the claim made against Powerpark Systems. Powerpark Systems was a defendant in the proceedings in the District Court but the claim against it does not appear to have been disposed of. Further, no leave to proceed has been granted to any party to continue proceedings against Powerpark Systems.

76. I have had the advantage of reading in draft form the reasons of Leeming JA for dismissing the appeal. I agree with his Honour’s reasons and the orders proposed.

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Amendments

06 September 2021 - Coversheet – catchwords reinserted following technical issue with publication

[24] – “details of the contractual documents before” changed to “details of the contractual documents below”

[51] – “was not entirely the entire basis” changed to “was not the entire basis”

Decision last updated: 06 September 2021