Gold Coast Publications Pty Ltd v Scholz Motor Group Pty Ltd & Ors
[2006] QDC 309
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- Unreported Judgment
- Gold Coast Publications Pty Ltd v Scholz Motor Group Pty Ltd & Ors[2006] QDC 309
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Gold Coast Publications Pty Ltd v Scholz Motor Group Pty Ltd & Ors[2006] QDC 309
Gold Coast Publications Pty Ltd v Scholz Motor Group Pty Ltd & Ors[2006] QDC 309
DISTRICT COURT OF QUEENSLAND
CITATION: | Gold Coast Publications Pty Ltd v. Scholz Motor Group Pty Ltd & Ors [2006] QDC 309 |
PARTIES: | GOLD COAST PUBLICATIONS PTY LTD Plaintiff/Applicant v SHOLZ MOTOR GROUP PTY LTD First Defendant and BRETT ANDREW SEYMOUR Second Defendant/Respondent and LESLIE SHOLZ Third Defendant/Respondent |
FILE NO: | 647/05 |
DIVISION: | Civil Jurisdiction |
PROCEEDING: | Applications |
ORIGINATING COURT: | Southport |
DELIVERED ON: | 25 August 2006 |
DELIVERED AT: | Southport |
HEARING DATE: | 8 May 2006 |
JUDGE: | Dearden DCJ |
ORDER: | the plaintiff be given judgment against the third defendant for all of the plaintiff’s claim against the third defendant, that being $78,275.47, being monies due and owing by the third defendant to the plaintiff, and interest in the sum of $6,090.47. |
CATCHWORDS: | APPLICATION – Summary Judgment – Guarantee – Material Variation – Guarantee Discharged by Breach – Questions of Fact Uniform Civil Procedure Rules 1999 Cases Cited: Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 ANZ Banking Group Pty Ltd v Barry [1992] 2 Qd R 12 Van Rowe v On The Path Investments Pty Ltd [2005] QCA 133 |
COUNSEL: | Mr C Jennings for the plaintiff Mr D Piggott for the third defendant |
SOLICITORS: | Quinn, Box & Muller, solicitors for the plaintiff Nyst Lawyers for the third defendant |
- [1]This is an application for summary judgment by the plaintiff/applicant (“the plaintiff”) against the third defendant/respondent (“the third defendant”). An application for summary judgment by the plaintiff against the second defendant resulted in an order being made, by consent, that the plaintiff be given judgment against the second defendant in the amount of $78,275.47 (i.e. the entire claim) plus interest[1].
FACTS
- [2]The plaintiff company publishes the Gold Coast Bulletin. The first defendant is now in liquidation[2]. The second defendant and third defendant were both directors of the first defendant and were joined in the substantive proceedings on the basis that they were jointly and severally liable as guarantors, pursuant to a contract for advertising services between the first defendant and the plaintiff.
- [3]The first, second and third defendants executed a document entitled “Account Application” on 31 July 2004[3]. As at 31 July 2004, both the second and third defendants were directors of the first defendant[4]. The “Account Application” was a request for advertising services from the plaintiff and included a term entitled “Guarantee” which provided as follows:
“…The guarantors jointly and severally (a) guarantee to you payment on demand of all monies which are or shall hereafter become due to you by the applicant/s. This guarantee shall be a continuing guarantee and shall not be affected by your giving time or any other indulgence to the applicant/s nor shall any of your rights to sue the applicant/s be affected thereby (b) acknowledges (sic) that notwithstanding as between the applicant and the guarantor, the guarantor is a surety for the applicant, it is agreed that as between the guarantor and the company this guarantee shall be a principal obligation.”
- [4]The plaintiff accepted the Account Application on 31 July 2004[5], allocated account number “2395142” to the first defendant’s trading name “Gold Coast European Automobile” (“GCEA”) on 23 August 2004[6] and notified the first defendant of the plaintiff’s acceptance of the Account Application and the allocation of the GCEA account number in a letter dated 25 August 2004[7].
- [5]Relevantly to the arguments traversed in these proceedings, the Account Application contained a line which read “anticipated monthly credit required;” besides which the figure “15000” (presumably an Australian dollar amount) was hand written[8], and the acceptance letter of 25 August 2004 stated (at paragraph 3) that “a limit of $25,000 has been placed on this account which should meet your present requirements”[9].
- [6]On 30 September 2004 the second defendant as “Dealer Principal” of the first defendant entered an agreement with the plaintiff to purchase “page 39 [of the Gold Coast Bulletin] in full colour for a 12-month period on behalf of Gold Coast European Automobiles from 25/9/04 to 25/20/05 … [at a] price … [of] $5,478 … weekly”[10].
- [7]In addition, on or about 1 April 2005, at the request of the first defendant, the plaintiff allocated to the Account Application a second account number “2398311” in respect of advertising services for “European Gold Coast Wholesale Centre (“EGCWC”),” a separate trading name of the first defendant. This second account number was requested by the second defendant on behalf of the first defendant so that the second defendant “could more easily keep track of the costs each business was incurring”[11]. Ultimately, the first defendant went into liquidation owing the plaintiff a total sum of $78,275.47 for advertising services, made up on $8,131.10 on the EGCWC account and $70,144.37 on the GCEA account[12]. The total sum of $78,275.47 was accepted by the liquidator as the debt outstanding to the plaintiff[13].
THE LAW – SUMMARY JUDGMENT APPLICATION
- [8]Uniform Civil Procedure Rules 1999 (“UCPR”) r 292(1) provides that at any time after a defendant files a notice of intention to defend, a plaintiff may apply to the Court for summary judgment against the defendant, and on such a hearing, the Court may give judgment for the plaintiff against the defendant for all or part of the claim if satisfied that:
- (a)the defendant has no real prospect of successfully defending all or a part of the claim; and
- (b)there is no need for a trial of the claim or part of the claim.
- [9]In Deputy Commissioner of Taxation v Salcedo[14] Williams JA set out the relevant test in these terms:
“The judge determining [a summary judgment application] is essentially called upon to determine whether the respondent to the application has established some real prospect of succeeding at trial”[15].
- [10]Atkinson J in Salcedo described the test in these terms:
“The Court must consider whether there exists a real, as opposed to a fanciful, prospect of success [and] If there is no real prospect that a party will be successful in all or part of a claim, and there is no need for a trial, then ordinarily the other party is entitled to judgment”[16].
- [11]Although the legal burden of proof is on the applicant to establish an entitlement to judgment, the evidentiary onus may shift to the respondent if the applicant discharges its burden of proof[17].
SUBMISSIONS OF THE THIRD DEFENDANT
- [12]The third defendant accepts that he executed the Account Application offering to guarantee certain indebtedness of the first defendant[18]. However, he asserts that he has no liability to the plaintiff on the following grounds:
- (1)
- (2)
- (3)
- (4)
- (5)
- (1)the plaintiff did not accept the guarantee
- [13]This submission by the third defendant is an argument that the phrase “anticipated monthly credit required: $15000” should be constructed as a term of the agreement restricting the advertising services to be supplied by the plaintiff to the first defendant to a value of not more than $15,000. In my view, this phrase is clearly no more than an estimate of the first defendant’s credit requirements and there is nothing in the Account Application which could be construed as restricting the amount of credit to be provided by the plaintiff to the first defendant. I similarly consider that the letter by the plaintiff to the first defendant of 25 August 2004[24] which stated that “a limit of $25,000 has been placed on this account” does not represent a variation of the Account Application, but rather an indication of the plaintiff’s view as to its then present intentions in respect of the level of credit. In fact, the letter of 25 August 2004 goes on to indicate to the first defendant that “it is your responsibility to observe the approved limit and accordingly you are liable for repayment of any amounts exceeding the approved limits”[25]. The letter also leaves open the clear possibility of variations in the level of credit to be extended by the plaintiff to the first defendant, including a possible increase in the credit limit[26].
- [14]It is clear that the offer of guarantee was not subject to a term that the monthly credit would not exceed either $15,000 or $25,000, but was rather an “all monies” guarantee, which was accepted by the plaintiff either on 31 July 2004[27], or on any view of it, by no later than 25 August 2004 when the plaintiff formally notified the first defendant of its acceptance of the Account Application [28]. This ground of the defence has no real prospect of success at trial.
- (2)the guarantee was discharged by material variation
- [15]The third defendant asserts that the guarantee was discharged by material variation, namely:
- (a)
- (b)the plaintiff providing credit to the first defendant in excess of $25,000;
- (c)the opening of the EGCWC account.
- [16]I do not accept that the letter from the plaintiff to the first defendant dated 25 August 2004 constitutes a counter-offer. At best for the first defendant, it is an acceptance of the “offer” contained in the Account Application. In the alternative, it is no more than a clarification of the then proposed terms of the credit to be made available to the first defendant.
- [17]I also do not accept that the letter of 25 August 2004 represents a material variation of the guarantee, but rather it was an indication by the plaintiff as to the then present intention of the plaintiff to place a limit on the credit to be extended to the first defendant. This view is supported by the relevant line of the correspondence which notes that the limit [of $25,000] “… should meet your present requirements” and states further, that the first defendant was “welcome to contact the credit department [of the plaintiff] to discuss an increase in [the first defendant’s] credit limit”[30]. It follows that the provision of credit by the plaintiff to the first defendant in excess of $25,000 did not constitute a material variation in the contract.
- [18]The opening of the EGCWC account by the plaintiff also did not, in my view, constitute a material variation. That was nothing more or less than an accounting convenience which enabled the second defendant to better keep track of costs incurred under each of the first defendant’s separate trading names[31], and was undertaken at the request of the second defendant on behalf of the first defendant for ease of accounting management.
- [19]In my view, there has been no material variation of the guarantee originally entered into by the third defendant. This ground of defence has no real prospect of success at trial.
- (3)the guarantee was discharged by breach
- [20]There was, in my view, no “fundamental term of the guarantee” that the plaintiff would not extend credit to the first defendant beyond either $15,000 in any given month, or alternatively $25,000[32]. The plain meaning and proper construction of the guarantee, in my view, clearly indicates that it was not subject to any term which capped the amount of credit which the plaintiff could extend to the first defendant. It was clearly open to the plaintiff to increase (or decrease) the level of credit to be provided to the first defendant. This ground of defence has no real prospect of succeeding at trial.
- (4)the guarantee did not extend to account number 2398311
- [21]As I have indicated above, neither the Account Application nor the terms of the guarantee place any limit or control as to whether the credit extended to the first defendant by the plaintiff should be administered through one account, or a myriad of accounts. All the advertising services utilised by the first defendant were services of the plaintiff, as requested by the first defendant, even though some of those services were in respect of the EGCWC trading name to which the plaintiff allocated account number 2398311. The allocation of this account number was nothing more or less than an accounting convenience to the first defendant (and presumably the plaintiff) and made no difference either legally or practically to the “all monies” guarantee entered into by the third defendant.
- [22]This ground of defence has no real prospect of succeeding at trial.
- (5)there are questions of fact that require a trial
- [23]In my view, all of the material facts relevant to the Court’s task on this application have been appropriately placed before the Court. The issue is clearly defined and arises out of the construction and operation of the guarantee entered into by the third defendant. No other documentation or evidence which could be placed before the Court has the potential to affect in any way the views which I have formed in respect of the construction and operation of the guarantee. I accept that the plaintiff has satisfied its burden of proof and demonstrated an entitlement to judgment and further that with the consequential shift of the evidential onus to the third defendant, nothing has been demonstrated on behalf of the third defendant that would establish a defence that has some real prospect of succeeding at trial[33].
CONCLUSION
- [24]The third defendant has been unable to persuade me that any defence is available which has a real prospect of success at trial. In my opinion, there is no need for a trial of the claim. It follows that the plaintiff is entitled to summary judgment for the entire claim.
- [25]I order that the plaintiff be given judgment against the third defendant for all of the plaintiff’s claim against the third defendant, that being $78,275.47, being monies due and owing by the third defendant to the plaintiff, and interest in the sum of $6,090.47.
COSTS
- [26]I will hear the parties on costs.
Footnotes
[1] Order of Dearden DCJ dated 8 May 2006 (document 19)
[2] Affidavit of Leslie Scholz sworn 2 May 2006, para 11
[3] Statement of claim paras 2 & 6, amended defence of third defendant paras 2 & 6(a); affidavit of Brett Sonder sworn 13 March 2006 paras 5 & 6; affidavit of Leslie Sholz sworn 2 May 2006 para 13
[4] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS1
[5] Affidavit of Brett Sonder sworn 13 March 2006 para 10
[6] Affidavit of Brett Sonder sworn 13 March 2006 para 11
[7] Affidavit of Brett Sonder sworn 13 March 2006 para 13, Ex BS5
[8] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS4
[9] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS5
[10] Affidavit of Brett Sonder sworn 13 March 2006 para 14, Ex BS6
[11] Affidavit of Brett Sonder sworn 13 March 2006 paras 15 & 16
[12] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS8, BS10
[13] Affidavit of Paul Box sworn 5 May 2006 para 7, Ex PRB3
[14] [2005] 2 Qd R 232
[15] Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 per Williams JA at para 17
[16] Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 per Atkinson J at para 47
[17] ANZ Banking Group Pty Ltd v Barry [1992] 2 Qd R 12, 19 per Derrington J; Van Rowe v On The Path Investments Pty Ltd [2005] QCA 133
[18] Affidavit of Leslie Sholz sworn 2 May 2006, para 13
[19] Amended Defence of the third defendant para 6
[20] Amended Defence of the third defendant para 7
[21] Amended Defence of the third defendant para 8
[22] Amended Defence of the third defendant para 9
[23] Amended Defence of the third defendant paras 10-13
[24] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS5
[25] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS5
[26] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS5, para 5
[27] Affidavit of Brett Sonder sworn 13 March 2006 para 10
[28] Affidavit of Brett Sonder sworn 13 March 2006 para 13, Ex BS5
[29] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS5
[30] Affidavit of Brett Sonder sworn 13 March 2006 Ex BS5, para 3
[31] Affidavit of Brett Sonder sworn 13 March 2006 paras 15 & 16
[32] Amended Defence of the third defendant para 8(a)
[33] Van Rowe v On The Path Investments Pty Ltd [2005] QCA 133