Austrac Rail P/L v Hunter Premium Funding Limited

[18]

6 The document contains a "Borrowers' Acknowledgments". The Borrower acknowledges that no binding agreement between it and the Lender arises until the Lender signs the "memorandum of acceptance". That was never signed by the lender. But I am prepared to assume that the loan was advanced. It is true there may be some debate about that matter in terms of the precise figure outstanding, having regard to the fact that the Creditors' Ledger shows a return of premium totalling $83,417.29. The residue of the amount originally lent is shown at $39,546.95 as against an opening balance of $153,667.80. However, that matches the figure in the Loan Agreement after taking into account credit charges. It will be noted that the amount in the Statutory Demand is $40,431.57, not $39,546.95 but the discrepancy, though not explained, is slight. 7 Reverting to the significance of the failure by the lender to sign the relevant Loan Agreement, the Lender relies on the proposition that the relevant acknowledgment is a stipulation for the benefit of the Lender. Hence that the Lender is entitled to treat it as waived, in the circumstances, there being no prejudice to the borrower in that course. I shall accept that proposition for present purposes. 8 The Applicant raised for the first time at the hearing the issue of the quantum of the loan and whether the Lender had failed to show it had advanced the full amount of the loan. It relied on evidence given in brief cross-examination of the Lender's creditor's manager, Mr Isaacs, which I permitted. The Respondent objected to this late ground of challenge being so raised. 9 This is always a difficult question. These are on the one hand, quasi interlocutory proceedings, though they do have a final result. In a recent case involving statutory demands I permitted such a late ground in the interests of justice though it did not avail; see W & F Lechner Pty Limited v Drummond & Rosen Pty Limited (2001) 38 ACSR 42 at 52. 10 In the present case, the Defendant/Respondent could quite reasonably say that the late raising of this ground of attack put it to unfair forensic prejudice. I would accept that argument, basing my judgment on what I consider to be in any event the Applicant's best argument.

[21]

15 It will be observed that the question as Bowstead & Reynolds puts it is whether the contract shows that the agent "purports" to act solely on behalf of a disclosed principal and then adds the caveat "in the absence of other indications". The latter suggests an evidentiary onus upon the principal to refute liability. 16 I consider that the contention that the Applicant needs to make good, though only to the level of plausibility, is sufficiently made out to that modest level. One starts with the ambiguous statement that appears in the Loan Agreement itself. On the one hand, there is reference to "borrower" with its legal name being Austrac Rail Limited. Yet immediately following is a reference to what is clearly an incorporated entity and not a mere business name, "Australian Traction Corp P/L". The latter is described as "borrower's trading name". Yet one would not expect a trading name to include the reference to "Pty Limited", which implies rather a separate legal entity, not a business name for the first-named. While the signature at the bottom has Austrac Rail Limited that does not advance matters. 17 Bowstead & Reynolds explains that where the terms of a written contract made by an agent makes it sufficiently clear that he contracted personally, extrinsic evidence is not admissible to show that, notwithstanding the terms of the contract, it was the intention of the parties that he should not be personally liable on it. This is "because such evidence would be contradictory to the written contract"; see para 9-037. 18 Here we do not need to have more than the basis for a plausible contention requiring further investigation. That contention is that Austrac Rail Limited contracted on the basis that its principal, Australian Traction Corporation Pty Limited, was alone to be liable. 19 When resort is had to the extrinsic evidence, there are several indications to support that contention. Thus "HPI 1" contains a quotation from the Lender dated 19 July 2000. It is that company which appears under the heading "BORROWER DETAILS". There is no mention of Austrac Rail Pty Limited. There is also a fax from the lender appearing as annexure C to the Mr Buckland's affidavit from the Applicant dated 12 September 2000. It again refers to the funding agreement being for Australian Traction Corp Pty Ltd", with again no reference to Austrac Rail Pty Limited. That these communications emanated from the Lender reinforces the Applicant's contention that the lender understood its borrower to be Australian Traction Corporation Pty Limited. 20 The Respondent relied upon Kai Yung v Hong Kong and Shanghai Banking Corporation [1981] AC 787 at 795 where the Privy Council through Lord Scarman enunciates the following statement of principle: "It is not the law that, if a principal is liable, his agent cannot be. The true principle of the law is that a person is liable for his engagements (as for his torts) even though he is acting for another, unless he can show that by the law of agency he is to be held to have expressly or impliedly negatived his personal liability."

Austrac Rail P/L v Hunter Premium Funding Limited - [2001] NSWSC 654 - NSWSC 2001 case summary — Zoe

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Judgment (25 paragraphs)

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