Solar Juice Pty Ltd v Mintz - [2017] SADC 37

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
SOLAR JUICE PTY LTD v MINTZ
[2017] SADC 37
Judgment of His Honour Judge Soulio
13 April 2017
GUARANTEE AND INDEMNITY - THE CONTRACT OF GUARANTEE - OFFER AND ACCEPTANCE
The plaintiff entered into an agreement with the defendant's company for the supply of goods - company indebted to plaintiff in the sum of $145,431.90 for goods supplied - company wound up - whether defendant liable under contract of guarantee.
Held - no contract of guarantee - claim dismissed.
Moschi v Lep Air Services Ltd [1973] A.C. 331; Harris v Burrell & Family Pty Ltd (2010) 271 LSJS 326; WM Financial Trading Systems Pty Ltd v Zamac Property Holdings Pty Ltd [2015] VSC 639; Electricity Corp v Woodside Energy (2014) 251 CLR 640; Tasmanian Sandstone Quarries Pty Ltd v Tasmanian Sandstone Pty Ltd & Ors (2009) 263 LSJS 87; Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) (1988) 5 BPR 11; Dalgety Australia Ltd v Harris [1977] 1 NSWLR 324; Central Cleaning Supplies (Aust) Pty Ltd v Elkerton (2015) 296 FLR 25; Franklins Pty Ltd v Metcash Trading Ltd (2009) 264 ALR 15; Built Environs v Saunders International Ltd (2012) 281 LSJS 183; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; Empirnall Holdings v Machon Paull Partners (1988) 14 NSWLR 523; Quirke v FCL Interstate Transport Services Pty Ltd (2005) 92 SASR 249; Ballantine v Harold (1893) 19 VLR 465; Harvey v Edwards, Dunlop & Co Ltd (1927) 39 CLR 302; Smith v UMB Chrysler (Scotland) Ltd [1977] UKHL7; Toll (FGCT) Pty Ltd v AlphaPharm Pty Ltd (2004) 219 CLR 165; Vroon BV v Foster’s Brewing Company [1994] 2 VR 32; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; Northstate Carpet Mills Pty Ltd v BR Industries Pty Ltd [2006] NSWSC 1057; Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; L’Estrange v F. Graucob Ltd [1934] 2 KB 394; Parker v South Eastern Ry. Co 2 C.P.D. 416; Scottish Amicable Life Assurance Society v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909; Rawcliffe v Bianco Hiring Services Pty Ltd (2002) LSJS 266; Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd & Ors (1989) NSWLR 160; Print National v Helps [2007] NSWSC 1050; Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549, considered.

SOLAR JUICE PTY LTD v MINTZ
[2017] SADC 37
Overview

The plaintiff, Solar Juice Pty Ltd, (‘Solar Juice’) is a supplier of solar panels. Solar Juice entered into an agreement with Love Energy (Aust) Pty Ltd (‘Love Energy’) for the supply of solar energy equipment. At that time the defendant, Richard Mintz (‘Mr Mintz’) was the sole director and secretary of Love Energy.
Initially Solar Juice required payment prior to supply. In 2012, after the trading relationship had proceeded in that fashion for a period, Solar Juice supplied goods to Love Energy on a credit basis; that is, the goods were delivered, invoices rendered, and payment was made subsequently.
There is no dispute that goods were delivered, and that certain invoices totalling $145,431.90 were rendered by Solar Juice, and not paid by Love Energy. There is a dispute as to the terms of any credit agreement between Solar Juice and Love Energy.
Solar Juice instituted the within proceedings against Mr Mintz seeking payment of the sum owing, on the basis that it asserted he entered into a contract of guarantee in respect of the debts payable by Love Energy to Solar Juice.
By its pleadings, Solar Juice asserted that pursuant to a supply agreement, made in February 2012 which was in writing and contained in an undated document signed by Mr Mintz, and entitled “Credit Application/Directors Guarantee Form” (‘the Form’) it supplied goods on credit to Love Energy on the basis that all accounts would be payable by Love Energy within the credit terms approved, either from the date of invoice or as set out in invoices or statements of account issued by Solar Juice. Further, by clause 3 of the supply agreement the credit terms were “30 days nett”, with a credit limit of $20,000. Solar Juice asserted that by signing the Form, Mr Mintz guaranteed all payments and debts payable by Love Energy to Solar Juice in respect of goods supplied.
Solar Juice asserted that on 23 May 2012, at the request of Love Energy, by a new Form dated 4 May 2012, the supply agreement was varied, with the concurrence of Mr Mintz as guarantor, and the credit limit was increased to $150,000.
Solar Juice asserted that pursuant to the original supply agreement, and the supply agreement as varied, it supplied goods to Love Energy, and issued invoices, between 10 February 2012 and 20 December 2012. Love Energy paid the amounts as invoiced until late November 2012.
Between 27 November 2012 and 20 December 2012 Solar Juice supplied goods, and rendered invoices relating to such supply, totalling $145,431.90. Solar Juice asserted that in breach of the Agreement, as varied, Love Energy failed to pay invoices for goods sold and delivered totalling $145,431.90. I accept that Love Energy was indebted to Solar Juice in that sum and failed to make payment.
Solar Juice asserted that upon the winding up of Love Energy there would be no payment of a dividend to Solar Juice. Solar Juice further asserted that by reason of the guarantee, the defendant is liable to the plaintiff for that amount.
Mr Mintz denied that there was any contract of guarantee of the debts payable by Love Energy to Solar Juice. Further, Mr Mintz asserted that from about September 2012 until the appointment of the Liquidator on 12 April 2013, he did not authorise Love Energy to conduct any business with Solar Juice. He further asserted that any amount owing ceased to be a debt payable by Love Energy to Solar Juice upon Love Energy being voluntarily wound up on or about 12 April 2013.
I reject the contention of Mr Mintz that the indebtedness of Love Energy to Solar Juice was extinguished upon the winding up of Love Energy. I also reject the contention that Mr Mintz did not authorise Love Energy to trade with Solar Juice after September 2012. However, I find that there was no valid contract of guarantee, and that accordingly Mr Mintz is not liable to Solar Juice for the debts of Love Energy. I dismiss the plaintiff’s claim. I set out my reasons.
The Evidence
Documents
The plaintiff marked for identification a book of documents some of which were agreed and some not. Relevant documents were thereafter referred to and received into evidence. I shall refer to such documents, and other documents received into evidence, by exhibit number, description and by page number within the marked book as necessary.
Agreed Facts
The following uncontroversial matters arise from the facts agreed between the parties.[1] Andrew Burgess (‘Mr Burgess’) was the co-founder, and managing director of Solar Juice. Mr Mintz was at all times the sole director and secretary of Love Energy. Solar Juice supplied goods to Love Energy between November 2011 and December 2012. Up until 10 February 2012 the trading relationship was on prepaid terms whereby goods were delivered after payment had been made by Love Energy to Solar Juice. From 10 February 2012 Solar Juice and Love Energy traded on credit.
[1] Exhibit P12 – Statement of Agreed Facts.
It was agreed as a fact between the parties that initially the credit limit was $20,000 but from about 31 May 2012 the credit limit was increased to $140,000, and from about 3 August 2012 to December 2012 the credit limit was further increased to $160,000. For reasons I will refer to, I find that Solar Juice and Love Energy had not in fact mutually agreed the terms of the credit arrangement.
On 2 February 2012 Love Energy had requested a credit application form from Solar Juice.[2] On 3 February 2012 Love Energy emailed a blank Form to Solar Juice. That was a five-page form, each page of which was headed “Credit Application/Directors Guarantee Form”. The first page enabled the provision of the customer details, its directors and its trade referees. The second page enabled the provision of information as to the customer’s estimated purchase value per month, the credit limit sought, the credit term desired, and particulars relating to the directors. Pages 3 and 4 contained the supplier’s guarantee and trading terms. Page 5 was a signing page with a sub-heading “Guarantors Signatures”.[3]
[2] Exhibit P12 – Statement of Agreed Facts [16].
[3] Exhibit P12 at [17]; and see MFIP1 p 7ff.
Later that same day Love Energy emailed a completed page 1, and page 5, the signature page, signed by Mr Mintz. Still later on that day Solar Juice emailed a further copy of the blank Form to Love Energy, and requested that page 2 be completed and sent through. Page 2 was completed and sent by Love Energy to Solar Juice.
On 4 May 2012 Solar Juice emailed a further Form to Love Energy. Love Energy completed pages 1 and 2 and a signed page 5 of the Form and emailed that to Solar Juice. The signature page of the Form was again signed by Mr Mintz.
The wording of the supplier’s guarantee clause differs in each Form. The Form sent by Solar Juice in February 2012 contained two pages of conditions including what purported to be a guarantee in the following terms:[4]
1. Guarantee
I/We the above the names Guarantors hereby agree jointly and severally to be answerable and responsible to Solar Juice Pty Ltd for the due payment by the customer for all such goods and services as Solar Juice Pty Ltd may from time to time supply the customer. I/We acknowledge that this agreement shall be a continuing Guarantee to Solar Juice Pty Ltd for all debts whatsoever and whenever contracted by the customer with Solar Juice Pty Ltd in respect fo [sic] goods and servics [sic] supplied or to be supplied to the customer (including the administration fee payable under 3.0 below). It is hereby agreed and declared that, although as between the Guarantors and the Customer, the Guarantors may be a surety or sureties, yet as between the Guarantors and Solar Juice Pty Ltd, the Guarantors and each of them if more than one shall be deemed to be a principal debtor and liable jointly and severally accordingly. The Guarantors shall not jointly or severally be released by an act, matter or thing the happening of which would be release one liable one as surety [sic]. This Guarantee shall bind each of the persons executing it notwithstanding the one or more of the persons named in this Guarantee as Guarantor may not execute or may not be bound by this Guarantee.
[4] Exhibit D8 Tabs 1A & 3.
The Form sent by Solar Juice in May 2012 containing three pages of conditions including the following:[5]
1. Guarantee
1.1In consideration of Solar Juice Pty Ltd (“Solar Juice”) agreeing pursuant to the terms and conditions contained in this Application for Credit and Guarantee as amended from time to time in accordance with Clause 14 (“the Terms of Trade”) to supply the Customer with goods and services on credit, the Guarantors hereby agree and if more than one then jointly and severally agree to:
1.1.1guarantee to Solar Juice the due performance by the Customer of each and every obligation owed by it to Solar Juice under the Terms of Trade; or
1.1.2guarantee to Solar Juice the payment of all amounts owed and that become owed by the Customer to Solar Juice by way of credit.
1.2The Guarantee shall be a continuing guarantee to Solar Juice for all debts whatsoever and wheresoever owed by the Customer to Solar Juice in respect of goods and/or services supplied to it and in respect of any failure by the Customer to perform its obligations under the Terms of Trade.
1.3The Guarantors shall notify Solar Juice in writing of any change to their address or other contact details provided herein.
[5] Exhibit D8 Tab 5.
There is an issue to be determined as to whether the document transmitted by Love Energy back to Solar Juice on either occasion contained the two pages which set out what purported, in each case, to be the terms of the guarantee.
Solar Juice supplied and delivered goods to Love Energy, invoiced between 27 November 2012 and 20 December 2012, of a total value of $145,4331.90. Love Energy did not pay the invoices, and is indebted to Solar Juice in that amount.
Love Energy appointed a liquidator, by director’s resolution, on 12 April 2013, and was wound up by way of creditors’ voluntary liquidation. A Report as to Affairs[6] was completed and signed by Mr Mintz and provided to the liquidator on 12 April 2013. Solar Juice is an unsecured creditor of Love Energy, and filed a proof of debt in the liquidation in the sum of $145,431.90. The liquidator never formally adjudicated on the proof of debt. However it was the liquidator’s assessment that there was unlikely to be any dividend for unsecured creditors in the liquidation of Love Energy.
[6] Exhibit P4 - ASIC Report as to affairs regarding Love Energy; Exhibit P4A – Statement verifying report in Exhibit P4 signed by defendant; and see MFIP1 pp 136 & 152.
Andrew Burgess
Mr Burgess gave evidence that Solar Juice was a wholesale distribution business which supplied a national network of installers. In 2012 it had some 500 customers, some of whom operated on a prepaid trading arrangement. Customers could apply to become an account customer.[7] Administrative staff of Solar Juice would send out an application for the customer to complete, and a personal guarantee from the directors of the customer would be sought, although a director’s guarantee was not sought from major corporate clients.[8]
[7] T 35.
[8] T 36.
Mr Burgess had drafted the Form using, as a precedent, a similar document used by a company for which he had previously worked. There was no legal input into the creation of that document.[9]
[9] T 36.11.
Mr Burgess said that he created the five-page Form in late 2009, in order to be able to extend credit to customers, and to ensure that if a company was unable to meet its obligations, the director(s) of the company would be liable for the debt.[10]
[10] T 41.26.
Mr Burgess produced credit documents relating to Love Energy extracted from the files of Solar Juice.[11] The documents included a Form completed on behalf of Love Energy naming Mr Mintz as a director, nominating a monthly purchase value of $10,000 and seeking a credit limit of $30,000, with a requested credit term of “30 DAY END OF MONTH”.
[11] Exhibit P11 – Plaintiff’s credit documents relating to Love Energy.
The Form contained a section headed “Guarantors Signatures”, and page 5 of the Form, contained the signature of Mr Mintz. At the foot of that page there is handwriting, completed by Mr Burgess, recording that the credit limit approved was in fact “20K” and the credit approved was “thirty days nett”. That was initialled by Mr Burgess and dated 10 February 2012. Mr Burgess said that he had approved a credit limit of $20,000, payable “30 days nett”, after seeing a copy of a Dun and Bradstreet report verifying the company name and details, and verifying the name of the director and guarantor listed.
The copy of the Form completed in February 2012 and produced by Mr Burgess included two pages[12] containing the terms of the guarantee, clauses relating to retention of title, clauses setting out the payment terms, and other terms not presently relevant.
[12] Pages 3 & 4.
The plaintiff’s credit documents relating to Love Energy also contained a copy of the May 2012 Form whereby Love Energy had requested an increase in the credit limit to $150,000. Solar Juice had referred that request to its credit insurer, QBE. QBE had endorsed an increase in the credit limit, but only to $140,000.[13] The credit documents also contained a post-it note, apparently relating to the varied supply agreement signed in May 2012. Mr Burgess said that note was in the handwriting of Solar Juice’s accountant, Ms Sodaline Yin. It appears to read “applied with NIC for $150K 23/5. Increased to $120K”.[14]
[13] Exhibit P5 – QBE’s Trade Credit endorsement dated 29 May 2012.
[14] Exhibit P11 – the reference to NIC I take to be in fact a reference to National Credit Insurance (Brokers) Pty Ltd, the plaintiff’s broker.
In cross-examination questions were put to Mr Burgess relating to reimbursement under QBE’s credit insurance policy of the unpaid debts of Love Energy. I received the evidence de bene esse, but have concluded that the evidence is not relevant, and have no regard to it.
On the basis of what emerged in the cross-examination of Mr Burgess as to the difference in appearance between pages 1, 2 and 5 of the February Form compared with pages 2 and 3, and from the evidence of Ms Cardone, I find that the five-page February Form in the plaintiff’s records was a reconstructed document and that pages 3 and 4 were never transmitted by Love Energy to Solar Juice.
Anna Cardone
Ms Cardone was the office manager for Love Energy in 2012. She had formerly worked with Mr Mintz in his previous business, Two Hands Wines Pty Ltd as a personal assistant.
Ms Cardone was asked about the mechanism by which the February Form was completed and sent to Solar Juice. She said that she recalled receiving the Form in February 2012. She filled it out as far as she could, and took it to Mr Mintz.[15] She had placed an X at the point at which Mr Mintz was to sign the page, and she said he signed the form there.
[15] T 62.36.
The completed pages were sent in two separate emails on 3 February 2012 by Ms Cardone. She had sent through page 1 of the Form, completed by her, and page 5 in which she had inserted Mr Mintz’s name, and which he had signed, accompanied by an email at 1.24pm which said: “Please find attached completed and signed Credit Application Form for processing”.[16] She received an email at 1.32pm on 3 February 2012 from Ms Yin saying “Hi Anna, thank you [for] sending the account application through. Could you please fill out page 2 as well?”[17] In response to the request from Ms Yin, Ms Cardone said that she sent an email at 1.50pm on 3 February 2012 stating “Hi Sodaline please find attached the 2^nd page of the credit application form.” That page set out the information, to which I have previously referred, namely “Value Per Month: $10,000” “Credit Limit Desired: $30,000”; and “Credit Term Desiresd [sic] 30 DAY END OF MONTH”. It listed the “Director(s)/Proprietor(s)/Guarantor(s) details” as those of Mr Mintz.[18] Ms Cardone sent that single page.
[16] T 64.5; Exhibit D8 Tab 2.
[17] T 64.28; Exhibit D8 Tab 3.
[18] T 64.28; Exhibit D8 Tab 4.
Ms Cardone identified an email she had sent to Mr Rami Fedda of Solar Juice on 4 May 2012 following email exchanges as to the terms of trade and the credit limit. At 1.35pm on 4 May 2012 Mr Fedda had sent an email to Mr Paul Prince of Love Energy, which stated:[19]
Hi Paul,
After chatting with Accounts and customer service, they were not able to release the order due to the account being so close to the limit.
As per phone discussion we are in a position to release the below.
[refers to equipment]
The above equates to above $30K, on your limit you only have around $7K left.
Please get your payment in today, so we can release on Monday. Also the [sic] attached is the credit application.
Regards,
Rami
[19] T 65.15; Exhibit D8 Tab 5.
Ms Cardone’s email in response said “Hi Rami, please find attached to the email the credit application as requested”. The email to Mr Fedda attached pages 1, 2 and 5 of the Form, again completed by Ms Cardone, seeking a credit limit of $150,000, with a credit term of “30 day EOM”[20] with page 5 signed by Mr Mintz.
[20] Which I accept was a request for credit terms such that invoices be payable 30 days from the end of the month in which the invoice as rendered.

In cross-examination Ms Cardone said that she had filled in dozens of credit applications while working for Mr Mintz at Two Hands Wines and at Love Energy.[21] She said she could not remember whether she took the complete five-page form in to Mr Mintz although she might have done so.[22] She said that when she received the document back from Mr Mintz, signed, she scanned it and emailed it back to Solar Juice. When asked why she had only sent back two pages in the first email she said “that’s all I had at the time”.[23] She said further that when she received the request from Ms Yin asking for page 2 to be filled out and sent back she took that into Mr Mintz and went through what was needed to be filled out, and sent that off.[24]
[21] T 66.7.
[22] T 66.24.
[23] T 67.4.
[24] T 67.15.
Under further cross-examination she agreed that it was her general practice to fill in the forms for Mr Mintz, and just have him sign at the appropriate place. Further, it was her general practice to send only the populated pages of the documents, completed by her, back to the supplier. The other pages would be put aside in a folder to do with credit supply agreements.[25]
[25] T 68.18.
I accept Ms Cardone’s evidence. I find that she only initially sent back pages 1 and 5, and subsequently page 2 of the Form, because she had only provided the completed pages for consideration by Mr Mintz, and signing by him. She did not send pages 3 and 4 containing the operative clauses to Solar Juice.
Consideration
Does the Obligation of the Guarantor Survive Insolvency?
The defendant contended, by his second defence, that any indebtedness of Love Energy to Solar Juice “ceased to be payable as a debt payable by the company to the plaintiff upon the company being voluntarily wound up on or about 12 April 2013, being a date before these proceedings were commenced, accordingly, Mr Mintz is not liable to the plaintiff …”[26].That argument was pressed only faintly at trial.
[26] Second Defence at [7].
In Moschi v Lep Air Services[27] the appellant had argued that when, on a particular date, the respondent had accepted the company’s repudiation of its contractual obligation, the appellant was discharged from his liability as guarantor, not only in respect of instalments due after that date, but also in respect of any liability arising from the company’s failure to meet its contractual obligations up until that date.
[27] Moschi v Lep Air Services Ltd [1973] A.C. 331 p 354E.
Lord Simon held:[28]
The appellant's argument … involves that the primacy would lose the benefit of the guarantee at the very moment he most needs it - namely, on a repudiation by the principal promiser of his obligations under the contract.
The respondents' proposition is supported by the high authority of Rowlatt, The Law of Principal and Surety, 3rd ed. (1936), p. 144. The learned author was discussing the rule that on default of the principal promiser causing damage to the primacy the surety is, apart from special stipulation, immediately liable to the full extent of his obligation, without being entitled to require either notice of the default, or previous recourse against the principal, or simultaneous recourse against co-sureties. 'The reason for the rule,' wrote Rowlatt, 'is that it is the surety's duty to see that the principal pays or performs his duty as the case may be. ...' No other reason for the rule was proposed in argument before your Lordships, nor was the rule itself questioned; which suggests that Rowlatt's proposed reason is the correct one, which his own high standing would in any case vouch.
[28] Moschi v Lep Air Services Ltd [1973] A.C. 331 p 356G-357B.
I reject the defendant’s contention. The debt was not extinguished by the voluntary winding up of Love Energy.
Did Mr Mintz Authorise Love Energy to Trade With Solar Juice?
I accept the plaintiff’s contention that Mr Mintz, as sole director of Love Energy, was the controlling mind of Love Energy, and is to be taken to have known what Love Energy knew or did.
Further, as the plaintiff contended, Love Energy regularly sent to Solar Juice copies of Commonwealth Bank remittance advices, authorising the Commonwealth Bank to transfer sums of money from the account of Love Energy to the account of Solar Juice, and bearing the words “authorised - Richard Mintz”.[29]
[29] See for example Exhibit P16.
I reject the defendant’s contention that after September 2012 he did not authorise Love Energy to deal with Solar Juice. In any event, if there is a contract of guarantee it is not a requirement for liability under such contract that the guarantor must authorise each trade dealing between the entity, the debts of which he guarantees, and the creditor to whom the debt is owed.
Was There a Contract of Guarantee?
As I have said, Solar Juice asserted, by its pleadings, that Solar Juice and Love Energy entered into a supply agreement which was “in writing, undated, and is contained in the document entitled “Credit Application/Director’s Guarantee Form” signed by the defendant”.[30] Solar Juice asserted that Mr Mintz guaranteed all payments and debts payable by Love Energy, pursuant to a guarantee dated on or about 10 February 2012, in writing, and contained in the supply agreement.[31]
[30] Plaintiff’s Second Statement of Claim at [3].
[31] Plaintiff’s Second Statement of Claim at [6].
I am prepared to find, as contended by the plaintiff, that the goods in question were ordered by Love Energy, were supplied by Solar Juice, were valued at $145,431.90 including GST and were not paid for by Love Energy. I am also prepared to find that there will be nil return to Solar Juice from the liquidation of Love Energy.
The issue for determination, as is apparent, is whether Mr Mintz is personally liable to Solar Juice for payment of the sum of $145,431.90 pursuant to the terms of what is asserted to be a contract of guarantee.
It was put on behalf of the plaintiff that I should accept Mr Burgess’ evidence as to the commercial purpose of creating the Form, based on his evidence that he wished, on behalf of Solar Juice to be able to extend credit to customers, and wanted to ensure that if the customer was unable to meet its obligations the director(s) of the company would be liable for the debt. Mr Burgess had given evidence, as I have said, that upon receipt of applications for credit accounts, a report was obtained from Dun and Bradstreet to verify the trading name, the ABN, and the identity of the directors to ensure they matched the name on the directors’ guarantee. Mr Burgess had said that a Dun and Bradstreet report dated 6 February 2012 was considered when he was reviewing the three populated pages that Love Energy had sent to Solar Juice. The plaintiff contended that I should find that the plaintiff was acting in reliance on the guarantee in providing goods to Love Energy on credit.
The plaintiff also urged a finding that Mr Mintz in signing the Form did so in two capacities, both on behalf of Love Energy, and personally as guarantor.[32] The plaintiff made the same argument in respect of the February Form, as it did in respect of the May Form.
[32] Harris v Burrell & Family Pty Ltd (2010) 271 LSJS 326; and WM Financial Trading Systems Pty Ltd v Zamac Property Holdings Pty Ltd [2015] VSC 639.
The plaintiff contended that the defendant was an experienced businessman,[33] and a chartered accountant with an MBA, with access to the financial statements of Love Energy and who had signed a document which was headed “Credit Application/Director’s Guarantee Form”. The plaintiff contended that, knowing of the genesis of the transaction, the background, the context and the market in which the parties were operating,[34] an objective bystander examining the facts of the case would conclude from the whole course of dealings between Solar Juice and Love Energy that Mr Mintz knew that Love Energy was applying for a credit account with Solar Juice, and that as sole director of Love Energy Mr Mintz had signed a personal guarantee of his company’s indebtedness to Solar Juice.
[33] Based upon the ASIC Personal Name Extract, and the defendant’s LinkedIn personal profile - see Exhibits P13 & P14.
[34] Electricity Corp v Woodside Energy (2014) 251 CLR 640 at [35].
The plaintiff’s position was that the existence of a contract of guarantee may be inferred despite the absence of an identifiable offer and acceptance.[35]
[35] Tasmanian Sandstone Quarries Pty Ltd v Tasmanian Sandstone Pty Ltd & Ors (2009) 263 LSJS 87 per White J at [195].
The plaintiff relied on the following observation of McHugh JA in Integrated Computer Services v Digital Equipment:[36]
It is often difficult to fit a commercial arrangement into the common lawyers' analysis of a contractual arrangement. Commercial discussions are often too unrefined to fit easily into the slots of “offer”, “acceptance”, “consideration” and “intention to create a legal relationship” which are the benchmarks of the contract of classical theory. In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relationship. … A bilateral contract of this type exists independently of and indeed precedes what the parties do. Consequently, it is an error “to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed”: … Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. … The question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract. …
[36] Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) (1988) 5 BPR 11, 110.
The plaintiff contended that on the basis of the evidence of Mr Burgess, and the actions of Solar Juice and Love Energy, the supply of goods by Solar Juice on credit to Love Energy after mid-February 2012 was actuated by the provision of a guarantee signed by Mr Mintz.[37]
[37] See Dalgety Australia Ltd v Harris [1977] 1 NSWLR 324 per Glass JA p 328E.
The plaintiff further contended that if the existence of the contract is to be predicated upon offer and acceptance, the sending by Solar Juice of the blank Form was, in effect, an invitation to treat, and that by completing and executing the populated pages of the Form on 3 February 2012, Love Energy and Mr Mintz were making an offer capable of acceptance by Solar Juice. That acceptance, it was put, was constituted by the action of Mr Burgess on 10 February 2012, in completing the “office use only” section of the form on page 5 of the Form.
There is support for the general proposition that completion of a credit application form by a customer constitutes an offer, to be found in Central Cleaning Supplies v Elkerton.[38] There the Victorian Court of Appeal held that a credit application signed by a customer and submitted to the supplier of cleaning equipment, amounted to an offer from the customer that was capable of acceptance by the supplier. Central Cleaning was the supplier. Swan was the customer. The Court said:[39]
In the absence of any other communication by Central of its acceptance, the terms in the application would not become binding on either party unless and until Central supplied equipment to Swan and extended the 30 day credit which Swan had requested. As a matter of contract, therefore, Swan did not become bound by the “Credit Application Terms” until the first supply of equipment after the credit application was made.
…
Central’s acceptance of Swan's application for credit was an acceptance by conduct: Toll (FGCT) v Alphapharm (2019) CLR 165 p 189 [68]. The relevant conduct was the delivery of the equipment which Swan had ordered, and the sending of the invoice confirming that the supply was on 30 day credit. By that conduct, Central signified its acceptance of Swan as an account customer. …
[38] Central Cleaning Supplies (Aust) Pty Ltd v Elkerton (2015) 296 FLR 25.
[39] Central Cleaning Supplies (Aust) Pty Ltd v Elkerton (2015) 296 FLR 25 at [32]-[33].
The plaintiff contended that a court may look to post contractual conduct to determine whether a contract had been made, and relied upon the comments of White J in Built Environs v Saunders International:[40]
Evidence of the later conduct of the parties, or of one party, may be probative in a number of different ways. At a level of generality, it may be evidence from which an inference may be drawn as to the circumstances existing at an antecedent time. The evidence may be inconsistent with a party, considered objectively, having intended to be immediately bound at a particular time or, conversely, evidence of the party’s intention to be so bound.
[40] Built Environs v Saunders International Ltd (2012) 281 LSJS 183.
There seems to be considerable tension as to the extent to which it is legitimate to rely upon later conduct in the construction and interpretation of written contracts.[41]
[41] See Franklins Pty Ltd v Metcash Trading Ltd (2009) 264 ALR 15 at [6]-[13], [42]-[43], [58], [63], [322]-[329].
The acid test is whether, viewed as a whole and objectively from the point of view of reasonable persons on both sides, the dealings show a concluded bargain.[42] I do not have any difficulty with the concept that there was a concluded bargain between Solar Juice and Love Energy for the supply of the goods. Again, the issue for determination is whether there was a contract of guarantee.
[42] See Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 per Heydon JA at [75].
The plaintiff contended, in the alternative, that if Solar Juice was to be regarded as the offeror, then Love Energy, in filling in the Form and sending it back signed, had accepted the offer of credit, particularly when Love Energy had subsequently placed orders and received goods on 30 day credit terms. The plaintiff relied on what fell from McHugh JA in Empirnall Holdings v Machon Paull Partners, in considering whether it had been established that an agreement for supply had been concluded:[43]
Where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its term.
[43] Empirnall Holdings v Machon Paull Partners (1988) 14 NSWLR 523 p 535CD.
As I have said, I have no difficulty with finding that Love Energy contracted with Solar Juice on credit terms in February 2012.
The meaning of a contract of guarantee is also to be decided objectively.[44] The plaintiff contended that a purposive construction should be given to the Form as a whole, based on the language of the document, and the facts known by all parties, which it was put, made it clear that Mr Mintz was guaranteeing the credit facility requested by Love Energy of Solar Juice.
[44] Quirke v FCL Interstate Transport Services Pty Ltd (2005) 92 SASR 249 per Doyle CJ at [41].
The plaintiff contended that it did not matter that the completed pages sent by Love Energy to Solar Juice were sent in two separate emails, and absent the two pages containing the very terms upon which the plaintiff now relies.[45]
[45] See Ballantine v Harold (1893) 19 VLR 465 p 468 per Madden CJ; Harvey v Edwards, Dunlop & Co Ltd (1927) 39 CLR 302 p 307; Smith v UMB Chrysler (Scotland) Ltd [1977] UKHL7.
The plaintiff relied upon what fell from the High Court in Toll v AlphaPharm, namely that:[46]
It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents, as Latham CJ put it, whatever they might be.
[46] Toll (FGCT) Pty Ltd v AlphaPharm Pty Ltd (2004) 219 CLR 165 at [45].
And in Vroon v Fosters where the Court said that in commercial dealings:[47]
… the court should strive to give effect to the expressed arrangements and expectations of those engaged in business, notwithstanding that there are areas of uncertainty and notwithstanding that particular terms have been omitted or not fully worked out.
[47] Vroon BV v Foster’s Brewing Company [1994] 2 VR 32 at [67].
As was put by the plaintiff, the documents, including the covering emails to which they were attached, refer to the “credit application” and there had only been one such document, namely that sent by Solar Juice to Love Energy at 8.01am on 3 February 2012. The plaintiff contended that the documents should be read together to determine their proper construction and legal effect.
The plaintiff contended that there should be a finding that the Form was part of an application for credit facilities, and also constituted a guarantee. It was put that when Mr Mintz signed the two Forms in February and later in May 2012, in the place marked “guarantor’s signature” he knew the document would affect the legal relationship between Solar Juice and Love Energy. The plaintiff suggested that it was fanciful for Mr Mintz to suggest that he did not understand that he was personally entering into a legal relationship with Solar Juice as the supplier of goods on credit to his company. The plaintiff contended however, that the understanding, or lack of understanding, on the part of Mr Mintz that he was entering into a legal relationship, was ultimately irrelevant to the matters to be decided, given that the intention to create a legal relationship is to be assessed objectively.[48]
[48] Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at [25]; Toll (FGCT) Pty Ltd v AlphaPharm Pty Ltd (2004) 219 CLR 165 at [45].
The plaintiff relied on the fact that after page 2 of the Form which requires the setting out of details of the “Director(s)/Proprietor(s)/Guarantor(s)”, and in respect of which the details of Mr Mintz were inserted, page 3, which I find was not sent to Solar Juice, commences with the words “Hereinafter Call the ‘The Guarantors’ [sic]”. Accordingly, the plaintiff contended, Mr Mintz is bound by the contract of guarantee.
Discussion
I accept the fundamental proposition that a guarantee is a contract.[49] The parties to a contract must be ad idem as to the contents of that contract. I accept, subject to the qualifications referred to in the authorities discussed above, the fundamental proposition that a contract is formed by the making of an offer and the acceptance of that offer. That may be constituted, in the case of a guarantee, by an offer to guarantee and an acceptance of that offer; or an offer to do something subject to the signing of a guarantee; or the signing of a guarantee constituting an acceptance of an original offer.
[49] See Thomson Lawbook Co., Modern Contract of Guarantee, vol 1 (at update 70) [2.200]. I bear in mind however the observation made by Young CJ in Northstate Carpet Mills Pty Ltd v BR Industries [2006] NSWSC 1057 at [21].
It is necessary to ensure that the formalities of offer and acceptance are complied with. As Young CJ observed in Northstate Carpet Mills v BR Industries:[50]
It is fashionable to minimise the importance of complying with the law of contract. Unfortunately, this line of thinking, whilst it may reduce costs, leads to the present sort of problem, that is, where too little attention was given to the making of the contract as a result of which what the supplier thought was a guaranteed transaction was not.
[50] Northstate Carpet Mills Pty Ltd v BR Industries Pty Ltd [2006] NSWSC 1057 at [40].

The words of the offer must be clear and definite, must be promissory, and must show an intention to be legally bound.[51] In contrast, the acceptance need not be as formal, but must be an acceptance of the offer “which corresponds exactly with its terms”.[52]
[51] Thomson Lawbook Co., Modern Contract of Guarantee, vol 1 (at update 70) [2.300].
[52] Thomson Lawbook Co., Modern Contract of Guarantee, vol 1 (at update 70) [2.500].
Where, as here, the contract is said by the plaintiff to be in writing, the intention of the parties is to be identified from the document itself. It is not necessary to “search for the uncommunicated subjective motives or intention of the parties.”[53] It is not necessary to take into account the actual intentions of the parties.[54]
[53] Quirke v FCL Interstate Transport Services Pty Ltd (2005) 92 SASR 249 per Doyle CJ at [39].
[54] Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 p 352.
The defendant contended that on the plaintiff’s case, and on the evidence at trial, there was no written offer by Mr Mintz to give a guarantee, and the only communication was the application for credit. The offer by Love Energy, when accepted by Solar Juice, could not constitute an agreement by the defendant to guarantee the debts of Love Energy.
It is not controversial that a party will be bound by the terms of a signed written document, and that in an ordinary case where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents.[55]
[55] L’Estrange v F. Graucob, Ltd [1934] 2 KB 394; Parker v South Eastern Ry. Co 2 C.P.D. 416.
The defendant contended that the focus must be on the contents of the document;[56] the corollary of that being that a party will only be bound by that which is contained in the document signed by him.
[56] Toll (FGCT) Pty Ltd v AlphaPharm Pty Ltd (2004) 219 CLR 165 at [42]-[46].
The learned author of Contract Law in Australia,[57] expressed the view that the method of analysis of problems of the formation of a contract in terms of offer and acceptance was developed in the 19^th century:
… as a result of the need to provide a framework for the increasing number of cases where parties dealt with each other at a distance by communicating by letter or telegram (or more recently by telephone, email, telex or facsimile).[58]
[57] Carter, Contract Law in Australia 6^th ed p 41.
[58] See also Northstate Carpet Mills Pty Ltd v BR Industries Pty Ltd [2006] NSWSC 1057 at [17].
The defendant contended that where, as here, the plaintiff had confined its case to a contract in writing containing the document then:
The formation of the contract does not depend upon the actual intention of the parties. A contract exists because the law attaches rights and obligations to the external conduct of the parties, one of the least of whom has expressly or impliedly made a promise …
The present case, therefore, depends on what the parties did and not what they intended to do when they signed the Indemnity and the Agency Agreement. And what they did depends on the construction to be placed on the documents which they signed.[59]
[59] Scottish Amicable Life Assurance Society v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909 p 923 per McHugh JA.
Accordingly, despite the evidence of Mr Burgess as to the reason he prepared the form, and the steps he took when he considered what had been sent to Solar Juice, it is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations;[60] and the issue should not be resolved by evidence of the parties as to what they intended, as the subjective intention is not relevant in the determination of the issues.[61]
[60] Toll (FGCT) Pty Ltd v AlphaPharm Pty Ltd (2004) 219 CLR 165 at [40].
[61] Rawcliffe v Bianco Hiring Services Pty Ltd (2002) LSJS 266 at [37] per Lander J.
The task then is to determine whether or not a contract has been formed, by reference to what the parties have done, not by what they intended to do, and that intention is to be determined by reference to the document said to contain the agreement to guarantee.
In Clark Equipment Credit v Kiyose Holdings Giles J said:[62]
In the result I conclude that the proper approach is to inquire whether there is to be found an intention that the signatory be personally bound to the contract evidenced in the document, meaning thereby not a subjective intention but an intention to be found objectively, notwithstanding the qualification attached to the signature. That intention, or lack thereof, is to be found upon the construction of the document as a whole, including but limited to the qualifications attached to the signature, in the light of the surrounding circumstances to the extent of which evidence thereof is permissible
…
Whether a contract has been made, just as the meaning of the contract when made, is to be determined by seeking objectively the intention of the putative party or parties. …
[62] Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd & Ors (1989) NSWLR 160 p 174.
As Mason J observed in Codelfa v State Rail, the surrounding circumstances will only be admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible to more than one meaning.[63]
[63] Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 p 352.
The defendant contended that forwarding the blank proforma Form could not constitute an offer. I accept that contention. It is consistent with the approach taken in Central Cleaning Supplies v Elkerton.[64] The sending of the Form by Solar Juice to Love Energy did not constitute an offer. It contained no terms, such that an acceptance could constitute a contract.
[64] Central Cleaning Supplies (Aust) Pty Ltd v Elkerton (2015) 296 FLR 25.
The defendant contended that in the present case no writing had been offered by or on behalf of Mr Mintz which could have been construed as an offer by him, to guarantee the debts of Love Energy. I accept therefore that the offer was constituted by Ms Cardone sending the Form, completed by her, and signed by Mr Mintz, on 3 February 2012 by email to Solar Juice. That was an offer by Love Energy to purchase, on nominated credit arrangements, goods to be supplied by Solar Juice.
If, as I have held, the offer in the present case was constituted by the transmission of the documents in February, and then again in May, by Ms Cardone to Solar Juice, the offer so conveyed did not contain any clauses which could constitute a guarantee by Mr Mintz of the debts of Love Energy.
The fact that Mr Mintz may be seen to have escaped liability under what Solar Juice had assumed was a guarantee from him, on a technicality, is not to the point. It was incumbent upon the creditor to ensure that the formalities of offer and acceptance were complied with. A failure on the part of a creditor, to ensure compliance with the formalities may result in an inability to enforce what was mistakenly believed to be a valid guarantee.
In Quirke v FCL Interstate Transport Services Doyle CJ held:[65]
The surrounding circumstances, in truth, do no more than reflect and emphasise the fact that FCL has failed to prepare an appropriate form of guarantee.
…
I accept that what FCL asks the Court to do may be reasonable or fair in the circumstances, but the process of construction is not one which entitles the Court to substitute a reasonable or fair meaning for the meaning of the words used. Nor is the power of a court to construe a written agreement a power to correct mistakes.
[65] Quirke v FCL Interstate Transport Pty Ltd (2005) 92 SASR 249 at [46]-[48]; and see Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd & Ors (1989) NSWLR 160, and Northstate Carpet Mills Pty Ltd v BR Industries Pty Ltd [2006] NSWSC 1057.
A not dissimilar situation arose in Print National v Helps,[66] where Harrison J on appeal, noted that the magistrate at first instance had found that:[67]
It is undisputed that Mr Helps did execute the second page of the credit application form which stated “guarantor to sign”.
[66] Print National v Helps [2007] NSWSC 1050.
[67] Print National v Helps [2007] NSWSC 1050 at [19].
Harrison J went on to find:[68]
The Magistrate reached the view that Mr Helps could not be said to have accepted the terms of the guarantee as he did not execute the part of the document which would bind him personally for any debts of the company. Finally, Freund LCM stated that the credit application form was nothing more than an application for credit by Cromwell’s which constitutes an offer and the contract did not become complete until Print National accepted the application.
…
There was evidence to support the Magistrate’s decision. It was open to Freund LCM to come to the decision she did. There was no error of law.
[68] Print National v Helps [2007] NSWSC 1050 at [20]-[21].
Here, it is not in dispute that Mr Mintz signed page 5 of the Form, alongside the words “Guarantors signatures” but that did not elevate the document transmitted by Love Energy to Solar Juice, to a promise to guarantee.
I agree with the approach taken in Print National v Helps,[69] and find that the words “guarantors signatures” do no more than indicate where the document is to be signed. They do not, in the absence of other written words which constitute a written guarantee, convert the document to a contract of guarantee.
[69] Print National v Helps [2007] NSWSC 1050.
I note the defendant’s reference to the observations by the plurality in Ankar v National Westminster Finance:[70]
At law, as in equity, the traditional view is that the liability of the surety is strictissimi juris and that ambiguous contractual provisions should be construed in favour of the surety. The doctrine of strictissimi juris provides a counterpoise to the law’s preference for a construction that reads a provision otherwise than as a condition. A doubt as to the status of a provision in a guarantee should therefore be resolved in favour of the surety.
[70] Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 p 561.
Here there is not so much an ambiguity in the contractual condition said to constitute the guarantee, but rather an offer conveyed by Solar Juice which did no more than set out the desired credit limit and credit terms.
The defendant puts an alternative contention that, if the document sent by email by Ms Cardone to Solar Juice did constitute an offer which contained a promise to guarantee by Mr Mintz, that offer was not accepted by Solar Juice. That is put in respect of each of the documents. As I have said, by page 2 of the February Form, Love Energy sought a credit limit of $30,000, and credit terms of “30 day end of month”. However the application was subsequently endorsed by Mr Burgess with a credit limit of $20,000 and credit terms of 30 days nett. In respect of the May Form, by page 2 of the Form Love Energy sought a credit limit of $150,000 and credit terms of “30 days EOM”. That application was subsequently referred to QBE, the credit insurer, and a credit limit of $140,000 approved, and credit terms of 30 days from invoice were applied. As the defendant contended, there was no acceptance of the terms of offer contained in the emails sent by Ms Cardone.
Conclusion
The terms of an offer and acceptance must correspond. The offeree must accept all of the terms of the offer. Otherwise the purported acceptance is ineffective. As the learned author of Contract Law in Australia said:[71]
Acceptance must be unequivocal in that nothing further is left to be negotiated between the parties and the language used must clearly convey a decision by the offeree to be bound by the terms of the offer.
[71] Carter, Contract Law in Australia 6^th ed p 56.
It is trite to say that a credit term of 30 days from the date of invoice is different from a credit term of 30 days from end of month, which might, depending upon the date of the rendering of an invoice, provide a period of almost two months within which to pay the invoice.
As Young CJ observed in Northstate Carpet Mills v BR Industries:[72]
Guarantees must be strictly viewed. A person who is guaranteeing that someone will pay a debt within 45 days is in a different plight to a person who is guaranteeing that someone will pay a bill in 14 days. Ordinarily, if the contract between the principal debtor or the person who becomes the principal debtor and the creditor is varied, then the guarantee is discharged. On like reasoning, if one sends an application for a 45 day credit account in the same envelope as a guarantee for supply, a reasonable bystander would infer that the guarantee was in connection with that transaction and none other.
Accordingly, in my view there was no contract between the parties in respect of the matters contained in the application for credit account and the guarantee. There of course, was a contract between the supplier and the first defendant with respect to the supply of carpets, but the plaintiff has not shown to my satisfaction that the guarantee was part of that contract.
Some might think that this ruling is artificial. Unfortunately, courts have been noticing over the last few years that commercial enterprises have been cutting corners, mostly in the name of cost reduction and it has not been uncommon for finance companies not to send the debtor or its guarantor copies of the completed finance contracts and rely on the fact that the customer has the loan or product as the case may be. It is fashionable to minimise the importance of complying with the law of contract. Unfortunately, this line of thinking, whilst it may reduce costs, leads to the present sort of problem, that is, where too little attention was given to the making of the contract as a result of which what the supplier thought was a guaranteed transaction was not.
[72] Northstate Carpet Mills Pty Ltd v BR Industries Pty Ltd [2006] NSWSC 1057 at [38]-[40]
The three pages constituting the written documents completed by Ms Cardone, signed by Mr Mintz, and conveyed to Solar Juice in February and in May 2012, constituted the offers. The documents did not contain the promise which Solar Juice seeks to rely upon. Insofar as offers were made in relation to credit limits and credit terms the plaintiff did not accept such offers.
In view of my finding as to what constitutes the offer, and the fact that that offer did not contain any promise of guarantee, Mr Mintz is not bound to satisfy Love Energy’s debt to Solar Juice.
I dismiss the plaintiff’s claim. I will hear the parties as to consequential orders.