Carters v Cancian
[2020] NZHC 2838
•29 October 2020
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2017-470-000166
[2020] NZHC 2838
BETWEEN CARTERS, a division of CARTER HOLT HARVEY LIMITED
Plaintiff
AND
DANNY JOHN CANCIAN
Defendant
Hearing: 21-22 October 2020 Appearances:
P J Morris and O J W Ward for Plaintiff
D J Cancian in person, assisted by D Simpson (a McKenzie friend)
Judgment:
29 October 2020
JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie On 29 October 2020 at 2.00 pm
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
Stace Hammond, Hamilton
Copy to:
Mr D J Cancian
CARTERS v CANCIAN [2020] NZHC 2838 [29 October 2020]
Introduction
[1] The plaintiff, Carters, a division of Carter Holt Harvey Ltd, is and was at all material times a supplier of building products, including in the Tauranga area. The defendant, Bella Vista Homes Limited (Bella Vista), was, again at all relevant times, a residential building company operating in Tauranga. It opened a credit account with Carters in October 2016 and, between November 2016 and October 2017, Carters supplied building products on that account to Bella Vista. Bella Vista failed to make payment to Carters for much of the product supplied and it is now in liquidation.
[2] The defendant, Mr Cancian, signed a deed of guarantee and indemnity in favour of Carters on 12 October 2016. Under that deed, he irrevocably guaranteed to Carters the due and punctual payment of all monies owing by Bella Vista to Carters. Carters seeks judgment in the sum of $1,078.668.23, together with interest, against Mr Cancian, pursuant to this deed for product supplied.
[3] The amount owing to Carters by Bella Vista is not disputed. Mr Cancian however denies that he is liable under the deed of guarantee and indemnity. He says that he was induced to enter into the deed by a representation made by Carters then Area Sales Manager, Daren Green. He says that Mr Green:
(a)represented to him that his liability under the deed would be limited to
$50,000;
(b)pressured him into signing the deed; and
(c)told him that he did not need to seek legal advice in relation to it.
He further argues (but did not plead) that Bella Vista’s credit limit on its trading account with Carters was initially $50,000, that this limit was unilaterally increased by Carters to $800,000, that this was done without notice to him, and that this amounted to a variation of the deed of guarantee and liability, sufficient to discharge him from liability.
Background
[4] Bella Vista’s primary business was developing residential sections and constructing new homes on those sections. In 2016, it was completing construction of 30 or more homes per year, the majority on land subdivided by it.
[5]Mr Cancian was its sole director.
[6] Bella Vista had several suppliers. One of its largest suppliers was PlaceMakers, through its Tauranga branch. PlaceMakers supplied Bella Vista with the majority of the building materials it required, including frames and trusses. The frames and trusses supplied by PlaceMakers were sourced from a subcontractor retained by PlaceMakers.
[7] Bella Vista became concerned about the quality of the frames and trusses being supplied by PlaceMakers. Matters came to a head in September 2016 and Mr Cancian asked Bella Vista’s then Project Manager, Ian Minnell, to investigate whether or not there was another frame and truss manufacturer who might be able to take over the manufacture of frames and trusses for the company.
[8] Ian Minnell’s nephew – Glenn Minnell – worked for Carters as an Account Manager. On 30 August 2016, Mr Minnell sent an email to his nephew, asking Carters to price two houses for “pre nail/Truss”. The email advised that Mr Cancian was not happy with the performance of PlaceMakers in supplying pre nail trusses, and that he had asked for other quotes. Mr Minnell advised his nephew that Bella Vista then had 45 houses “in Council and 80 sections sold so plenty of work ahead of us”. He subsequently sent plans for the two frame and truss jobs to his nephew (and to Mr Green). Carters provided the quotes requested and they were accepted by Bella Vista.
[9]There is then a conflict of evidence:
(a)Glenn Minnell says that he delivered an account application form and deed of guarantee and indemnity form to Bella Vista. He could not
recall who he handed the forms to, but thought that it was probably his uncle, Ian Minnell;
(b)Mr Green also says that it was Glenn Minnell who delivered the account application form and deed of guarantee and indemnity form to Bella Vista. He says that he attended a meeting at Bella Vista’s offices on 27 September 2016, and that, at that meeting, he and Mr Cancian had a general discussion regarding Bella Vista’s business direction and the business opportunities that might be available for both Bella Vista and Carters;
(c)Mr Cancian agrees that there was a meeting on 27 September 2016. He says however that the account application form and deed of guarantee and indemnity form were handed to him at that meeting by Mr Green.
[10] After returning from the 27 September 2016 meeting, Mr Green sent an email to Mr Cancian, Craig Carter (Bella Vista’s then General Manager), Ian Minnell and Ian Cooper (Carters’ pre nail and truss manufacturer), inviting them to Mr Cooper’s premises in Cambridge for a tour through the plant. The invitation was accepted and the tour went ahead. Mr Cancian was impressed by the quality of Mr Cooper’s work.
[11] Mr Cancian says that he instructed Bella Vista’s Accounts Clerk, Charmaine Hutchinson, to complete the Carters’ account application form. The form is headed “Credit Account Application and Terms of Agreement for Supply”. The form requested that an account be opened in the name of Bella Vista, advising that the anticipated value of its monthly purchases from Carters would be $400,000 and requesting a maximum credit limit of $700,000. It advised that Mr Cancian was the director of the company. It also set out Carters’ standard terms and conditions of sale.
[12] The account application was signed by Mr Cancian on 12 October 2016. On the same day, Mr Cancian also signed the deed of guarantee and indemnity. Again, there is a conflict of evidence as to the circumstances in which the documents were signed.
(a)Mr Cancian says that Bella Vista’s General Manager, Mr Carter, and Mr Green were both present when he signed the documents. He says that Mr Green advised him that the maximum credit limit on Bella Vista’s account would be $50,000, and that his personal guarantee would also be limited to $50,000. He says that he only signed the form because he was satisfied that his personal liability would be limited to
$50,000 and that he had a similar arrangement in place with PlaceMakers limiting the guarantee which he had given to that company;
(b)Mr Green denies attending any meeting with Mr Cancian on 12 October 2015, and he denies that he was present when the account application and the deed of guarantee and indemnity were signed. He also denies making any representation to Mr Cancian, or having any discussion with Mr Cancian at all about the credit limit that might be made available to Bella Vista.
Mr Cancian’s signature on the deed of guarantee and indemnity is witnessed by Bella Vista’s accounts clerk, Ms Hutchison. Mr Cancian accepts that she was not present when he signed but says that the documents were later put in front of her and that she was asked to witness his signature. Ms Hutchison was not however called to give evidence. Nor was Mr Carter, Bella Vista’s General Manager, who Mr Cancian says was present.
[13] Bella Vista’s application to open a credit account was forwarded to Carters Head Office. It was suggested that the account should be opened with an initial limit of $50,000, to get it “up and running”. The evidence established that this was normal practice for a particularly large customer such as Bella Vista.
[14] On 13 October 2016, Malai Grantley, who was Carters’ Risk Analysis Team Leader, approved a credit limit of $50,000 on the account. On the same day an “Outside of Credit Policy” form was signed on behalf of Mr Green and Carters’ then regional manager, Craig Lochhead, requesting that Bella Vista’s credit limit be set at
$800,000. This form was forwarded to Carters’ Head Office, for consideration by Carters Chief Financial Officer.
[15] On Friday 14 October 2016, Mr Cancian, Mr Carter and a third person from Bella Vista,1 and Craig Lochhead, Mr Green and Carters’ regional manager, Anthony Clere, met at Carters’ offices in Tauranga. Bella Vista’s business needs were discussed. The parties also discussed a service level agreement and a preferred supply agreement, both of which Carters had prepared in advance of the meeting. It is common ground that these agreements were discussed at the meeting. There is however dispute as to whether any other matters were discussed:
(a)Mr Cancian says that he emphasised at the meeting that he would only enter into the service level agreement and preferred supply agreement if the limit on his personal guarantee was set at $50,000. He says that he was given assurances in this regard. Further, he says that he was told that if at any time Bella Vista’s credit limit was raised, his personal guarantee would be revisited;
(b)Mr Clere and Mr Green say that Mr Cancian made it clear that he had had several disputes with PlaceMakers, that Bella Vista owed a large sum of money to PlaceMakers and that it was only prepared to pay the same if its disputes with PlaceMakers were first sorted out. They say that the fine detail of the service level agreement and preferred supply agreement with Carters were agreed at the meeting. They deny that there was any discussion as to Mr Cancian’s personal guarantee, or the credit limit on the Bella Vista account.
Mr Cancian, Mr Clere and Mr Green gave evidence. None of the other persons present (or said to be present) at the meeting was called to give evidence.
1 Messrs Green and Clere say that the third Bella Vista representative was Ian Minnell. Mr Cancian said that it was another Bella Vista employee – Dean Skipper. Nothing turns on this. Neither Mr Minnell nor Mr Skipper was called to give evidence.
[16] Mr Cancian took away the service level and the preferred supply agreements to consider over the weekend. He signed both documents on Monday 17 October 2016. They were subsequently uplifted from Bella Vista’s offices by Mr Green.
[17] There was a further meeting on 18 October 2016. This was essentially a “meet and greet” social gathering between Carters’ and Bella Vista’s key personnel.
[18] On 21 October 2016, Carters sent a letter to Bella Vista welcoming it as a new customer and advising that its application for a credit account had been approved with a credit limit of $50,000. The letter went on to advise that the approved limit had to be respected at all times; it also noted that, should the need arise, Carters would consider an increase or extension of the limit and advised that any requests for an increase or extension should be made through Carters’ Tauranga branch.
[19] On 31 October 2016, Carters’ Chief Financial Officer, Craig Bamfield, approved the Outside of Credit Policy application forwarded to him by Messrs Lochhead and Green on 13 October 2016 and increased the credit limit on Bella Vista’s account to $800,000. This approval was advised to Carters’ Tauranga branch on 1 November 2016 and it was then activated. That the increase had been approved was not advised to either Mr Cancian as guarantor or to Bella Vista as the account holder.
[20] On 2 December 2016, Carters signed the service level and preferred supply agreements and they were forwarded to Bella Vista on 16 December 2016.
[21] The preferred supply agreement recorded that Carters was to pay Bella Vista a one-off information technology support contribution of $10,000 plus GST to assist Bella Vista to transition its business to Carters. On 22 December 2016, Bella Vista sent an invoice for $10,000 to Carters for IT support and, on 16 January 2017, Carters paid $10,000 to Bella Vista pursuant to that invoice.
[22] The first supply of product by Carters to Bella Vista on the credit account was pursuant to an invoice dated 2 November 2016. Thereafter there were regular supplies. Up until early June 2017, Bella Vista made reasonably regular payments in reduction of its account balance with Carters. As at 7 June 2017, the account balance was
$46,732.11. Thereafter, supplies continued but credit payments by Bella Vista largely dried up. By 30 June 2017, Bella Vista owed $213,415.14 to Carters; by 31 July 2017, that debit balance had risen to $532,777.73; by 31 August 2017, it was $816,441.04; by 30 September 2017, it was $1,025,906.72; by 31 October 2017, it was
$1,078,668.23.
[23] On 1 November 2017, Carters’ solicitors sent a letter of demand to Mr Cancian seeking payment pursuant to the deed of guarantee and indemnity of the amount then outstanding plus default interest at the rate of 1.5 per cent from 31 October 2017 until payment was received in full. Carters threatened proceedings if payment was not made.
[24] In November 2017, Bella Vista was put into liquidation. No payments under the deed of guarantee and indemnity have been made by Mr Cancian.
Relevant documents
(a)The Credit Account Application
[25] By signing the application to open a credit account with Carters, Mr Cancian acknowledged that the credit application formed the basis on which Carters would transact business with Bella Vista, and that any credit extended to Bella Vista would be extended on Carters’ standard terms and conditions which formed part of the application. Bella Vista sought a credit limit of $700,000.
(b)Carters’ Standard Terms and Conditions of Sale
[26] Carters’ standard terms and conditions of sale recorded, amongst other things, that:
(a)payment was due by Bella Vista by the 20th of the month following the date of delivery;
(b)if Bella Vista did not pay the amount owing by due date, Carters could charge, and Bella Vista was required to pay, default interest at the rate
of 1.5 per cent per month, calculated daily on the amount owing from the due date until payment was received in full;
(c)if a default occurred, Carters could suspend or terminate the contract, and the amount owing would then immediately become due and payable;
(d)Carters was entitled to recover from Bella Vista all costs that Carters might reasonably incur in attempting to collect the amount owed (including actual legal costs and the expenses and costs of collection).
[27]They also provided as follows:
Carters may impose a credit limit on a customer’s account and alter the credit limit without notice.
(c)The Deed of Guarantee and Indemnity
[28]The deed of guarantee and indemnity provided as follows:
(a)Mr Cancian unconditionally and irrevocably guaranteed to Carters the due and punctual payment of all monies which were then, or might in the future, be owing or remain unpaid by Bella Vista to Carters under any contract with Carters, and the due observance and performance by Bella Vista of all its obligations contained or implied in any contract with Carters;
(b)if for any reason Bella Vista did not pay when due the guaranteed debt or any part of it, Mr Cancian would immediately on demand pay the relevant amount to Carters;
(c)Mr Cancian agreed that his obligations under the deed were by way of continuing security and were to remain in full force and effect until all of the monies for which Bella Vista was or might become liable to Carters had been paid in full;
(d)Mr Cancian was not to be discharged, nor were his obligations to be affected by any matter or thing whatsoever which would or might have discharged him or affected his obligations; and
(e)it was the intent of the parties that the guarantee and obligations of Mr Cancian were to be absolute and unconditional in any and all circumstances. Mr Cancian agreed to indemnify Carters against any loss Carters might suffer for any reason.
[29] As part of the deed of guarantee and indemnity, Mr Cancian signed an acknowledgment recording that he had had the opportunity to seek independent legal advice before signing the deed and that he had either obtained that advice or elected not to do so. He also acknowledged that he had read and understood his obligations to Carters under the deed and that he had agreed to enter into the deed voluntarily.
[30] It is clear that, but for the defences raised by Mr Cancian, the guarantee applies in its terms and Mr Cancian is liable for the amount outstanding and owing by Bella Vista, together with interest and costs as provided for in Carters’ standard terms and conditions.
(d)The Preferred Supply and Service Level Agreements
[31] The preferred supply agreement recorded that Bella Vista appointed Carters as its preferred supplier of goods. It covenanted to ensure that each Bella Vista business would comply with the terms of the agreement, with the Carters standard terms of sale, and with the service level agreement. The parties agreed that the goods were to be supplied to each Bella Vista business subject to the Carters terms of sale applicable to each trading account, and went on to provide for pricing and for the provision of rebates to Bella Vista. Carters agreed to provide marketing and show home support to Bella Vista.
[32] Relevantly, for present purposes, cl 13.1 of the preferred supply agreement provided as follows:
Entire agreement: This Agreement, the Carters Standard Terms of Sale and the Service Level Agreement constitute the entire agreement of the parties
about their subject matter and any other previous agreements, understandings and negotiations on that subject matter cease to have any effect. In the event of any inconsistency between this Agreement, the Carters Standard Terms of Sale and the Service Level Agreement, the following order of priority prevails:
(a)this Agreement:
(b)the Carters Standard Terms of Sale; and
(c)the Service Level Agreement.
[33] The service level agreement provided for the service level that Bella Vista could expect from Carters. Inter alia it recorded that Carters proposed that its branch managers would be responsible for arranging quarterly meetings:
… between Carters Area Sales Manager, Carters Branch Manager and Bella Vista key representatives (dashboard, credit limits, market updates, sales opportunities, industry changes, events).
Mr Cancian’s defences
[34] First, Mr Cancian argues that he was induced to enter into the deed of guarantee and indemnity by representations made by Mr Green that his liability under the deed would be limited to the sum of $50,000. He also says that he was pressured by Mr Green to sign the deed and that Mr Green told him that he did not need to seek legal advice in regard to it. If made out, these representations might entitle Mr Cancian to damages from Carters in the same manner and to the same extent as if they were a term of the deed that has been breached.2
[35] Mr Cancian’s defence relies on his own evidence, which is directly at odds with the evidence given by Mr Green and in part by Mr Clere and Glenn Minnell.
[36] I do not accept Mr Cancian’s evidence. Rather, I prefer the evidence of Messrs Green, Clere and Glenn Minnell. I note the following:
(a)Mr Cancian’s evidence is self-serving. In contrast, the evidence of Mr Green, Mr Clere and Glenn Minnell is not self-serving. None of them is still employed by Carters. None of them had anything to gain by giving untrue evidence;
2 Contractual Remedies Act 1979, s 6; now Contract and Commercial Law Act 2017, s 35.
(b)Mr Cancian’s evidence is uncorroborated.3 There is, for example, nothing to corroborative his assertion that his guarantee to PlaceMakers was limited to $50,000. He did not call Bella Vista’s General Manager, Craig Carter, to back up his version of events, and notwithstanding that he says that Craig Carter was present at the critical meetings:
(i)on 27 September 2016 (when he says Mr Green gave him the relevant forms);
(ii)on 12 October 2016 (when he says he signed the deed of guarantee and indemnity in Mr Carter’s presence and in the presence of Mr Green and when he says that Mr Green gave him the various assurances he claims to have relied on);
(iii)on Friday 14 October 2016, along with either Ian Minnell or Dean Skipper (when he says the limit on his personal guarantee was again discussed).
Nor was Ian Minnell or Dean Skipper called as a witness.
(c)Mr Cancian’s version of events makes little commercial sense. Why would Carters agreed to extend a credit limit to Bella Vista of $800,000, if Mr Cancian’s liability, as its sole director, was limited to $50,000?;
3 Mr Cancian did endeavour to adduce in evidence an email he claimed was sent to him by Bella Vista’s General Manager, Craig Carter, on Monday 17 October 2016. Relevantly, it read as follows: “When he talked he said that he would give us the same deal as Placemakers along with your limited guarantee of 50k”. This email was hearsay because Craig Carter was not called to give evidence and because it was offered in evidence to prove the truth of its contents. As such it was inadmissible – Evidence Act 2006, s 17. It did not fall within any of the exceptions to the hearsay rule. Pursuant to s 18, there was no reasonable assurance that the statement made by Craig Carter was reliable. Nor is there anything to suggest that Craig Carter was unavailable as a witness (in terms of the definition of the s 16(2) definition), or that unnecessary expense or delay would be caused if Mr Carter were required to be a witness. Mr Cancian asserted that he had endeavoured to get Mr Carter to appear as a witness but did not further elaborate. Mr Cancian argued that the email was a business record, admissible under s 19. I do not consider that the email was a business record (as defined). In any event, there was nothing to suggest that Mr Carter was unavailable or that the prerequisites to admission set out in s 19(1)(b) and (c) were met. Although I took in the email de bene esse, for the purpose of the hearing, I decline to admit it in evidence. I have put it aside.
(d)Mr Cancian was no stranger to personal guarantees. He accepted that he was aware of the nature of such documents and how they work, and that he was careful before entering into them. This tends to throw into doubt his assertion that he was persuaded by Mr Green that he did not need to seek legal advice in relation to it. Mr Cancian’s assertions are directly contrary to the express acknowledgement he signed, recording that he had had the opportunity to seek independent legal advice, and that either he had obtained such advice or that he had elected not to seek do so, and that he had read and understood his obligations to Carters under the deed of guarantee and indemnity and agreed to enter into the deed voluntarily. The terms of the guarantee are clear. Nowhere does it suggest that Mr Cancian’s liability was limited to $50,000. Mr Cancian’s answer when these matters were put to him was simply to say that he made a mistake and that he didn’t read or check the deed. He said that he trusted Mr Green. This explanation seemed to me to be implausible. There is no evidence to suggest that he knew Mr Green or that he had enjoyed a long-term business relationship with him. I have difficulty in accepting that Mr Cancian was so naïve as to accept such assurance as he asserts was made without ensuring that it was recorded somewhere;
(e)Mr Cancian said that he was pressured into signing the guarantee by Mr Green, but it was not obvious what pressure Mr Green could have applied. Bella Vista had an existing supply agreement with PlaceMakers. It had entered into two one-off agreements with Carters for the supply of pre nail trusses. If it wished to do so, it could have entered into further one-off agreements with Carters. It is difficult to discern on the evidence what pressure Mr Green would have been able to bring to bear to compel Mr Cancian to sign the deed of guarantee and indemnity;
(f)There were discrepancies between Mr Cancian’s evidence filed in support of the notice of opposition to Carter’s initial application for summary judgment and the evidence given at trial – for example, in
regard to the extent of his dissatisfaction with PlaceMakers. I was left with the clear impression that Mr Cancian was making up matters as he went along;
(g)It struck me that Mr Cancian was endeavouring to grasp at any passing straw in an endeavour to back up his argument. For example, he claimed that the limit on his personal guarantee followed on from the fact that Bella Vista was granted an initial limit on its account of
$50,000. The evidence however made it clear that Mr Green had no authority or ability to set the credit limit on the account. Rather the
$50,000 limit was proposed after the application had been signed and in order to get the account up and running. The credit limit of $50,000 was only approved by Carters’ head office on 13 October 2016, after Mr Cancian had signed the deed of guarantee and liability. His evidence suggesting that there was a link was, in my view, fabricated;
(h)Mr Cancian’s evidence overall did not impress me. I gained the impression that he was seeking to attribute the blame for Bella Vista’s ultimate collapse on other persons/entities, and to distance himself from any responsibility for what occurred. By way of example, he sought to attribute the request for a $700,000 credit limit on Bella Vista’s account to Bella Vista’s account manager, who he says filled in the form. This is notwithstanding that he signed the form himself. Mr Cancian simply did not strike me as a credible witness.
[37]I now turn to the second alleged defence.
[38] As noted, Mr Cancian sought to argue that the increase in Bella Vista’s credit limit was undertaken unilaterally by Carters, that that was done without notice to him and that this amounted to a variation of the deed of guarantee and liability, sufficient to discharge him from his liability.
[39] This argument was not pleaded, but Mr Morris, for Carters, did not take issue with it being raised. In any event, I am satisfied that it must fail.
[40] A substantial variation to the basis of the underlying contract between the creditor and the debtor, without the knowledge of the guarantor, can discharge a guarantor from liability.4 However, where the guarantee contains a clause which gives the creditor the power to make variations to the contract with the debtor, this principle does not apply.5 The question is one of construction of the guarantee, to determine whether the guarantor’s right to treat the guarantee as discharged has been effectively excluded.
[41] As noted, the guarantee at issue in this case required that Mr Cancian unconditionally and irrevocably guaranteed to Carters the due and punctual payment of all monies which were then due, or which might in the future be owing and remain unpaid by Bella Vista to Carters under any contract with Carters, and the due observance and performance by Bella Vista of all its obligations contained or implied in any contract with Carters. Mr Cancian agreed that his liability as a guarantor would not be discharged, nor would his obligations be affected by inter alia any variation or alteration in the terms of any contract between Carters and Bella Vista, or in the terms of any other security, guarantee, indemnity or other agreement.
[42] Further, the Carters’ standard terms and conditions of sale recorded that Carters could impose a credit limit on Bella Vista’s account, and alter that credit limit, without notice. Here, Carters increased Bella Vista’s credit limit at Bella Vista’s request, but without express notice to either Bella Vista or Mr Cancian. They were entitled to do so and the increase in the credit limit did not discharge Mr Cancian from his liability under the deed of guarantee and liability.
[43]Nor did cl 13.1 in the preferred supply agreement – set out above, see para [32]
– alter the situation. Mr Cancian pointed out that the preferred supply agreement could only be amended from time to time in writing by Carters and Bella Vista, and he argued that there was an inconsistency between the preferred supply agreement and the Carters standard terms and conditions of sale in this regard. He argued that pursuant to cl 13.1, the preferred supply agreement took priority over the standard terms and conditions.
4 Dunlop New Zealand Ltd v Dumbleton [1968] NZLR 1092 (SC).
5 Pogoni v R & W H Symington & Co (NZ) Ltd [1991] 1 NZLR 82 (CA).
[44] This argument assumes that there is an inconsistency. In my judgment, there is no relevant inconsistency. The terms on which credit is provided, and pursuant to which Carters supplied building product, were governed by Carters’ standard terms of sale, which inter alia permitted Carters to alter Bella Vista’s credit limit without notice. The preferred supply agreement was silent as to Bella Vista’s credit limit. The provision in the preferred supply agreement recording that it could not be amended except in writing applied to the supply agreement but did not create any consistency between the supply agreement and Carters’ standard terms and conditions of sale, for the simple reason that Carters’ standard terms and conditions of sale were not part of the supply agreement and did not fall within the definition of the word “agreement” used in that document.
[45] For the sake of completeness, I observe that the provision in the service level agreement noting Carters’ proposal to oversee its relationship with Bella Vista and to assume responsibility for arranging quarterly meetings, has no bearing on the issue. It seems that such meetings were not held. If they had been held, one of the matters that might have been discussed may have been Bella Vista’s credit limit. The fact that such meetings were not held does not however bear on Mr Cancian’s responsibilities as a guarantor of Bella Vista’s obligations.
[46] Accordingly, I find that Mr Cancian has no defence to Carters’ claim pursuant to the deed of guarantee and indemnity.
Result
[47]I grant judgment in favour of Carters against Mr Cancian in the sum of
$1,078,668.23, together with interest at the rate of 1.5 per cent per month calculated daily on the amount owing from the due date of each invoice until the date of this judgment. Thereafter, and until payment is made in full, interest is to be determined in accordance with the Interest on Money Claims Act 2016. Carters is also entitled to recover from Mr Cancian its costs reasonably incurred in attempting to collect the amount owing to it, including its actual legal costs (if reasonable) and expenses.
[48] Further calculation will be required to determine the interest and collection costs owing. In the event of dispute, I direct as follows:
(a)within 15 working days of the date of this judgment, Carters is to file a memorandum setting out the amounts claimed by way of interest and on account of its costs and expenses in recovering the amount owing;
(b)within a further 15 working day period, Mr Cancian is to file a memorandum in response.
I will then deal with any dispute as to quantum on the papers, unless I require the assistance of Mr Cancian and/or counsel for Carters.
Wylie J
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