FJ & SM Monaghan Pty Ltd v S & W Slade Pty Ltd & Ors [2017] NSWDC 139 | Case summary

District Court of NSW|2016-02-25|Before: Tamberlin J, Mr J

Solicitors: Byrnes Lawyers (Plaintiff/Cross-Defendant) PJ Wood and Associates (Defendant/Cross-Claimant) File Number(s): 2013/164903

PRELIMINARY

These proceedings were listed for hearing before me on 24 and 25 February 2016. At the outset the Plaintiff advised that the matter was ready to proceed. [1] The Defendants foreshadowed a possible objection in that some of the matters raised in the statement of issues were outside the pleadings. [2] Nevertheless the matter proceeded with the reading of affidavits during which objections were taken on the basis that evidence which the Plaintiff sought to advance be restricted under s 136 of the Evidence Act 1995 (NSW) to evidence relating only to the question of whether the interest charged by the Plaintiff (pursuant to the alleged agreement) was a penalty. The Defendants contended that the quantum meruit claim was not particularised even though it was raised in the Amended Statement of Claim and the revised statement of issues. [3] For reasons given in my judgment of 25 February 2016, I declined to accede to the Defendant's request. I subsequently directed the Plaintiff to amend its pleadings to more properly reflect the claim it wished to advance. [4]
A proposed Amendment Statement of Claim was presented on 25 February 2016. The Defendants objected to leave being granted to file it. For reasons given in my judgment of the same day, I granted the Plaintiff leave. The Plaintiff thereafter sought to further revise it. The Defendants agreed to proceed with reading their affidavits ahead of any oral evidence. [5] This was a practical course to take in order to minimise cost bearing in mind the parties had travelled from rural New South Wales no doubt incurring significant expense. Accordingly no oral evidence was received on 24 and 25 February 2016, and the matter was thereafter the subject of detailed directions on 25 February 2016, 20 May 2016, 22 July 2016 and 26 August 2016. By and large the further directions were by consent. However as I previously informed both parties, the delay in completing the timetable and the revised time estimate meant that it was not possible for me to resume the matter until 2017. The matter ultimately resumed over four days concluding on 15 February 2017. These matters have regrettably delayed the resolution of these proceedings.

THE CLAIM

The Plaintiff conducted a petrol station business in Wauchope, NSW. The First Defendant conducted a trucking business in the same locality between 2001 and 2013.
The Plaintiff was owned and operated by Ms Wendy Monaghan.
Mr Paul O'Leary was the de facto partner of Ms Wendy Monaghan, and had been working with her in the running of the Plaintiff company. His tasks included administrative chores, such as chasing up customers when payments were late.
The Second Defendant, Mr Stephen Garry Slade, is the sole director of the First Defendant and the Third Defendant, Mrs Wendy Maree Slade is the wife of the Second Defendant and the sole shareholder of sixty ordinary shares in the First Defendant. [6]
Since 1 July 2000, Ms Susan Maree Johnson was the First Defendant's office manager. In this position, she was responsible for the day to day financial affairs of the First Defendant and had full access to all accounting records. [7] According to her evidence, the First Defendant purchased fuel from the Plaintiff since 2001 and ceased purchasing the majority of its fuel from them on 30 April 2010.
During the relevant period, the Plaintiff made available and the First Defendant utilised, an account for the purchase of fuel from the Plaintiff.
The final purchase of fuel was on 31 January 2013.
Essentially, the Plaintiff's claim is for:- 1. The balance of the fuel account at its close (said to comprise fuel charges in part and interest in part), totalling $402,355.07; 2. Continuing interest at the rate specified in the Plaintiff's written credit terms; 3. Alternatively (should it be determined that the term of the agreement imposing on unpaid overdue balances of the Company's fuel account was a penalty), the interest incurred on the Plaintiff's overdraft account maintained with the Commonwealth Bank of Australia for the purposes of conducting its business ("overdraft account") - representing the Plaintiff's actual loss in consequence of the company's late payment; and 4. Alternatively (should it be determined that there was no agreement between the parties as to the imposition of interest on unpaid overdue balances of the company's fuel account ("account")), interest on those overdue amounts at a reasonable commercial rate based upon (or alternatively comprising) the rates applicable to the overdraft account from time to time; and 5. Debt collection costs, being $24,455.99. [8]
The Plaintiff conceded that it can produce no evidence in relation to the debt collection costs. [9]
The Plaintiff submitted that in the event that the Court was not minded to grant interest at the rate specified in what was asserted as the Plaintiff's terms, then the Plaintiff's claim (as quantum meruit) was for payment for interest on amounts unpaid by the company for more than 21 days or, alternatively, 30 days after invoice, at the rates applied to the overdraft account used by the Plaintiff for the purpose of conducting its business - being market rates for credit at the relevant time, and representing both:- 1. The actual loss suffered by the Plaintiff as a result of the company's failure to pay within 21 days or 30 days; and 2. The First Defendant's gain as a result of having withheld the payments for fuel charges to which the Plaintiff was entitled. [10]
The Plaintiff further contends that the Second and Third Defendants are liable pursuant to a guarantee proffered on 29 July 2008 by the Second and Third Defendants in relation to the indebtedness of the First Defendant.
The Defendants submit that the Plaintiff's claim must fail for the following reasons:- 1. It was not a term of the agreement pursuant to which FJ & SM Monaghan supplied fuel to the First Defendant that interest at the rate of 2.5% per month would be payable on amounts unpaid after either 21 days or 30 days (to the contrary it was a term that no interest or finance charges be payable on the fuel account) and accordingly the First Defendant has overpaid the Plaintiff for the fuel which was supplied. ; 2. Even if, which is otherwise denied by the Defendants, it was a term of the agreement that interest was payable at the rate of 2.5% per month on amounts unpaid after 21 days or 30 days, any such term is void by virtue of being a penalty; 3. Even if, which is otherwise denied by the Defendants, interest is payable by the First Defendant on amounts unpaid after 21 days or 30 days at the rate of 2.5% per month, the Plaintiff should not be permitted to make any claim for interest (which is denied) for the period prior to 31 December 2009 or any claim for fuel (which is denied) for the period prior to 30 November 2009, including as a result of the limitation period and further, the quantum of any claim (which is denied), should be reduced as a result of the proper appropriation treatment of the payments made by the First Defendant; 4. Any claim on a quantum meruit basis must fail as a "freestanding" right to the recovery of interest on a quantum meruit basis is not available and, even if, which is denied such a claim is available, it would not be successful in circumstances where there is no injustice given the terms of the letter from the First Defendant dated 18 July 2006 [11] which stated that the First Defendant would not agree to pay any finance charges on the fuel account, and further even if such a claim were permissible (which is denied) it should be limited by the application of the relevant limitation period; 5. The Plaintiff's claim for the sum of $24,455.99 in relation to its retainer of Professional Collection Services, a mercantile agent, must fail as a result of no amounts being owing by the Defendants to the Plaintiff and/or there being no term in any agreement or agreements for the payment of that sum and in any even if, which is denied by the Defendants, the Defendants are responsible for the Plaintiff's costs, those costs should be dealt with as a part of any costs order made in the proceedings; 6. Even if, which is otherwise denied by the Defendants, any amount is owed by the First Defendant the Plaintiff, Mr Slade and Mrs Slade did not guarantee the payment of any such amount pursuant to the letter from the First Defendant to Plaintiff dated 29 July 2008 in circumstances where: 1. Any offer to enter into any guarantee was only in respect of any existing amounts then owed by the First Defendant to the Plaintiff for fuel supplied (and not interest) and did not cover any future indebtedness; 2. No consideration was provided by the Plaintiff to the Second and Third Defendants for the guarantee; 3. Any offer to enter into any guarantee was not accepted by the Plaintiff; and 1. If contrary to the Defendants' contention, the Court concludes that the Second and Third Defendants guaranteed any amount owed by the First Defendant, that guarantee is unenforceable against both Mr and Mrs Slade by reason of unconscionability and should also be held to be void pursuant to s 7 of the Contracts Review Act 1980 (NSW), s 87 of the Trade Practices Act 1974 (Cth), as in force prior to 1 January 2011 and/or s 72 of the Fair Trading Act 1987 (NSW), as in force prior to 1 January 2011. [12]
The First Defendant also claims that it is entitled to judgment pursuant to a cross-claim in the sum of $10,349.80 for the amount overpaid by it, together with any further sum paid by the First Defendant in respect of the alleged interest or finance charge (which payment is denied), together with interest. [13]

EVIDENCE

The Plaintiff relied on affidavits as follows:- 1. Affidavit of Ms Wendy Monaghan (the Plaintiff's sole director) and associated exhibits dated 12 May 2015 and 16 February 2016; 2. Affidavit of Mr Paul William O'Leary (Ms Monaghan's de facto partner) dated 12 May 2015; and 3. Expert accounting report of Mr Hugo Charles Loneragan (forensic account) dated 1 July 2016.
The Defendants relied upon affidavits from:- 1. Affidavits from the Second Defendant, Mr Stephen Garry Slade, sworn on 10 September 2015; 2. Affidavits from the Third Defendant, Mrs Wendy Maree Johnson, sworn dated 24 August 2015; 3. Affidavit of Mrs Susan Maree Johnson, dated 24 August 2015; 4. Affidavit of Mr Peter John Wood dated 7 February 2017 [14] and 14 February 2017; and 5. Affidavits of Mr Bruce Douglas Kitson (expert forensic accountant) dated 30 January 2017, 13 February 2017 together with a second supplementary report, dated 14 February 2017.
Oral evidence was heard from Ms Wendy Monaghan, Mr Paul William O'Leary, Mr Hugo Charles Loneragan, Ms Susan Maree Johnson, and Mr Stephen Garry Slade.

Initial trading terms

Ms Monaghan gave evidence that the Plaintiff's business was to supply fuel to the members of the public on a one-off basis, but also to "business" customers, who required regular large quantities of fuel for the operation of their enterprises. [15] She stated that the company operated an overdraft and utilised that overdraft to purchase fuel, for which it was charged the current overdraft interest rate. [16]
According to Ms Monaghan, the Plaintiff commenced supplying fuel to a business she knew, as "Slade Refrigerated Transport." Her evidence was that she had a conversation with the Second Defendant, in which words to the following effect were spoken: STEPHEN SLADE: "Wendy can I open an account with you for fuel? WENDY MONAGHAN: "Yes." STEPHEN SLADE: "What are your terms?" WENDY MONAGHAN: "Payment within 30 days of an account. STEPHEN SLADE: "Fine." [17]
In cross-examination, Ms Monaghan was challenged about her conversation with Mr Slade, where an initial agreement was reached of the 30 day payment term. [18] It was put to her that her recollection was based on what she said to customers generally. [19] She conceded that the reason why she says she would have had that conversation is that it was the conversation she usually would have had with customers. [20]
Mr Slade stated that when the account was opened he did not recall the terms of the conversation that he had with Ms Monaghan, being as described by her earlier. [21]
However in cross-examination, Mr Slade conceded that he had a conversation with Ms Monaghan in 2001 as to setting up an account for fuel along the lines suggested in Ms Monaghan's evidence including payment within 30 days of account. [22] He further conceded that he commenced purchasing fuel for the business thereafter [23] on a running account in the sense that purchases were debited and payments credited on an ongoing basis. [24] He accepted that payments to the account were made given the financial circumstances at the time [25] and that the First Defendant was consistently in arrears on the fuel purchased. [26]

First Defendant's indebtedness

According to Ms Monaghan, the First Defendant purchased fuel from the Plaintiff, adopting a procedure whereby, when a driver employed by it attended the Plaintiff's service station and obtained fuel, a record was kept of the quantity supplied and the cost. At the end of each month an invoice was sent detailing each occasion during that month that fuel had been supplied together with the quantity of fuel and the price per litre. [27] An example of such a tax invoice was annexed to Ms Monaghan's affidavit of 12 May 2015. [28]
Ms Monaghan stated that at the end of each month, she sent a statement listing the invoices which had been issued for that month, along with the payments that had been made. [29]
According to Ms Monaghan, fuel was supplied at a discounted rate to the First Defendant because of the bulk quantities of fuel that were being purchased. She stated that the discount varied at times but ordinarily it was a few cents per litre less than the rate displayed on the bowser. [30]
Ms Monaghan conceded that at the time of establishing the trading terms she had not discussed specifically what the consequences would be if payment was not made within 30 days or the financial cost to the First Defendant, if the terms were not complied with. [31]
Ms Monaghan stated that the First Defendant consistently failed to pay for the fuel supplied within the 30 day period and consequently, the balance owing continually increased over time. [32] The delay in payment resulted in greater cost to the Plaintiff, as the overdraft interest rate reduced the profit margin that otherwise would have been made. [33]
Ms Monaghan stated that on a number of occasions, she telephoned Mr Slade and informed him that the account was in arrears and needed to be brought up to date. [34] On such occasions, she asserts that Mr Slade informed her that he would make payment in the "near future" or he would "look after it" or "get onto it." [35] Thereafter, Ms Monaghan asserts that she left Mr O'Leary, to chase up Mr Slade. [36]
Mr Slade conceded that he had a conversation with Ms Monaghan between June and October 2005 where the fact of his account being substantially in arrears was discussed. [37]
Mr Slade accepted that according to the Plaintiff's invoices [38] the balance of the First Defendant's account thereafter had increased from $99,725.73 on 31 October 2005 to $116,871.24 as at 31 May 2006. [39] He further accepted that during that period Mr O'Leary visited and had discussions relating to the account. [40]
In the period prior to October 2005, Mr Slade acknowledged that Mr O'Leary had also been contacting the First Defendant to seek payment on the arrears on the accounts. [41] This involved conversations in which Mr O'Leary asserted that the First Defendant was being charged a discounted bulk price

Plaintiff's letter of 10 October 2005

Following a number of conversations with Mr Slade [42] and following other customers also being regularly late in making payments, [43] Ms Monaghan stated that she decided to notify all customers to whom fuel was sold in bulk that the terms of trade were being changed. [44]
On 10 October 2005, a letter was claimed to be sent to a number of customers advising of the changes to the terms of trade. The letter stated:- RE: RESTATEMENT OF TRADING TERMS Your account with this Company is currently operating outside our acceptable terms of trading. We have in the past been able to allow the arrears but due to the spiralling [sic] cost of Petroleum Products and the shortening of trading terms with our Supplier we herewith give notice that: "Payment in full by the 21st Day of the month following month of purchase." Your adherence to these terms are conditional upon the Credit Facility being available to you. Please find enclosed a copy of our Company's credit terms and conditions. Should there be extenuating circumstances for which you wish to discuss please contact the writer. Wendy Monaghan General Manager. [45]
Ms Monaghan's evidence was that the letter was a "pro forma" letter addressed to all customers whose accounts were in arrears at that time. She asserts that despite the fact that she had notified the First Defendant that interest would be charged on late payments, she held off doing that in the period immediately after 10 October 2005. However, the First Defendant's account arrears continued to increase. [46]
In cross-examination it was put to Ms Monaghan that she could not be certain that the letter dated 10 October 2005 was forwarded to the First Defendant. Ms Monaghan responded that she was positive that it was sent, but acknowledged that she did not have a copy of the letter other than the pro forma letter. [47] She nevertheless asserted that the letter was sent, because it was sent with tax invoices and that the Defendant did not request a copy of their tax invoices which they would have needed for their fuel rebate. [48]
Ms Monaghan maintained that they were definitely sent, and noted that the terms and conditions, showed a copyright notation of 2005, which is when she obtained them from EC Credit Control. [49]
Next it was put to Ms Monaghan that the Plaintiff never sought to claim interest for the period of 10 October 2005 to 30 September 2006 because the letter of the 10 October 2005 was not sent to the First Defendant. Ms Monaghan stated that the letter was sent but she was hoping that the account would be brought back into line with payment within the 30 days. [50]
It was put to Ms Monaghan that the assertion made in this case, for 21 day credit terms was based upon the letter of 10 October 2005 having been sent. She accepted this proposition. [51] Her attention was then drawn to the contents of the first Statement of Claim filed 28 May 2013, which it was asserted in 4, that the terms were seven days. She acknowledged that this was incorrect and should not be there. [52] She acknowledged that she verified the allegations of fact in the Statement of Claim as true [53] and that this was inconsistent with the case that she was now making in this Court. [54]
Mr O'Leary's evidence was that the Plaintiff was under financial pressure as a consequence of payments not being made on time. [55] Consequently in October 2005, he had a discussion with Ms Monaghan about changing the terms of trade under which the Plaintiff operated. [56] This discussion culminated in Ms Monaghan expressing a reluctance to charge interest, but accepting to do as it was the "only way to get people to pay on time …" [57]
Mr O'Leary stated that on 10 October 2005, he and Ms Monaghan drafted a letter to various customers advising that the Plaintiff's terms of trade were changing. [58]
The transcript records Mr O'Leary's responses in cross-examination:- Q. Is your evidence that sitting here today you have a recollection of putting the 10 October 2005 letter and the attachment into an envelope addressed to the first defendant? A. I don't have a good memory. Like, when we do a hundred or so invoices, I don't particularly remember putting it in that one, but I particularly remember helping put all those invoices and accounts together, which was standard procedure by the way. Q. Is it your evidence that over the years you have a recollection of sending out invoices from time to time to the plaintiff's customers? A. Yes. Q. Beyond that you don't have any specific recollection of the 10 October 2005 letter being sent to the first defendant? A. No. [59]
Mr O'Leary stated that the letter was not a "satellite letter" and was included in "every customer or any customer that was a problem." [60] He maintained that he had a good recollection however, that a letter was sent with invoices to customers and had the terms of trading included. [61]
He conceded that there was no mention in [18] of his affidavit of 12 May 2015, of any invoice being attached to the letter of the 10 October 2005. [62] He further acknowledged that he did not have a copy of the letter dated 10 October 2005, addressed to the First Defendant. [63] Notwithstanding this, he stated that part of the reassurance of a customer receiving a letter along with the change of conditions was that it was included with an invoice. He stated that should anyone not receive it, they would inquire as to the volume of sales for the previous month, as most persons would claim a rebate. Accordingly, that was why "things were together." [64] Although he conceded that this was not contained in his affidavit of 12 May 2015, he rejected that this was being made up for the purpose of reinforcing that the letter was sent. [65]
Mr Slade maintained that he did not receive a copy of the letter from the Plaintiff dated 10 October 2005 restating trading terms and including the credit terms and conditions, and to the best of his knowledge, it was not received by the First Defendant. He asserts that at no time did he have a conversation with Ms Monaghan regarding the payment of interest or finance charges, or having to pay fuel within 21 days of supply. [66] He maintained that the First Defendant had not been given a discounted rate for the fuel which it purchased and in fact paid the price shown on the bowser. [67]
In cross-examination, Mr Slade stated that he did not "do the mail" and cannot remember receiving the letter from the Plaintiff dated 10 October 2005. [68] He accepted he was unsure whether or not the document was sent to him [69] but conceded that the First Defendant's account had been trading well outside of the 30 days. [70]
Mr Slade conceded that the Plaintiff's letter of 10 October 2005 was consistent with the conversation Ms Monaghan alleges that she had with him. At first he definitely denied any conversation where he was told that he was to be charged interest, [71] but later stated he did not remember being so told. [72]
Mr Slade acknowledged that Ms Johnson was responsible for opening the mail addressed to the First Defendant as the office manager. He further acknowledged that Ms Johnson would determine whether or not correspondence should be brought to his attention although he would not suggest that a document which related to the terms of purchasing fuel would not be brought to his attention. [73]
Ms Johnson gave evidence that she had searched the files maintained by the First Defendant including correspondence filed, and to the best of her knowledge, a letter or document in the terms of that said to have been forwarded by the Plaintiff dated 10 October 2005 [74] was never received by the First Defendant.

Plaintiff's letter of 9 June 2006

On 9 June 2006, Ms Monaghan asserts that she sent a letter to Slade and a number of other customers of the Plaintiff, in the form as follows:- RE: CHANGES TO CREDIT FACILITIES I am writing to you concerning your credit facilities with our company. As you are aware fuel costs have risen dramatically over the past six months, placing extreme pressure on everyone. All fuel companies demand payment monthly and I am finding it very difficult to meet their demands financially. Therefore could you please ensure your fuel account is paid in full by the 30th of each month. From July 1st, 2006, overdue accounts will incur interest rate penalties at a rate of 2.5% per month. This cost will be added to your account monthly. So please ensure your account is paid in full monthly to avoid this penalty. Please understand that this policy is being introduced by necessity and not nastiness as I am left with no alternative. Yours faithfully, WA MONAGHAN. [75]
In cross-examination, Ms Monaghan maintained that the terms and conditions were not attached to a follow up letter of 9 June 2006 [76] but stated that the terms and conditions were attached to the earlier letter of 10 October 2005. [77] Ms Monaghan's attention was drawn to the letter forwarded by her previous solicitors, dated 11 June 2014 [78] in which it was asserted, in response to a request for further and better particulars:- The terms and conditions were forwarded to all clients of the Plaintiff under cover of a letter dated 9 June 2006 (copy attached), which notified the clients that due to rising fuel costs, from 1 July 2006 overdue accounts would incur interest rate penalties at a rate of 2.5% per month, which would be added to the account monthly.
Ms Monaghan conceded that that letter made no reference to the letter of 10 October 2005. [79] It was suggested to her that what was contained in the Plaintiff's previous solicitors' letter was inconsistent with Ms Monaghan's assertions in her affidavits, in that the terms and conditions were not annexed to the letter of 9 June 2006, but rather the letter of 10 October 2005. [80] Ms Monaghan acknowledged the inconsistency, stating that the solicitors could have misunderstood when she had sent the letter in October 2005, and the follow up letter in June 2006. [81]
Ms Monaghan asserts that as at 1 July 2006, the First Defendant owed an amount of $137,641.07 for petrol supplied and further, that at the end of the month, the overall amount owing had increased to $138,984.93. [82] She stated that she held off on administering the 2.5% interest charge that she had previously foreshadowed, hoping that it would not be necessary and that the arrears would be paid. However, by the end of September 2006, as there had not been any significant reduction in the outstanding amount, by the end of September 2006, she asserts that the Plaintiff company added an amount of $1,447.27 to the account issued to the First Defendant, and thereafter, accounts sent them showed a figure for a "financial charge" meaning the 2.5% interest per month. She further asserts that no time after the accounts commenced showing the financial charge, did Mr Slade or anyone else on his behalf, contact her to make inquiries about the charge or dispute it. [83]
The difference between the terms of the correspondence of 10 October 2005 and the correspondence of 9 June 2006 was said to amount to a variation in trading terms in that the latter letter amounted to a "revised terms of trade" to provide a compound interest rate of 2.5% per month after 30 days (previously said to be 21 days).
Mr O'Leary confirmed that the letter of 9 June 2006 was sent to the First Defendant. [84]
The First Defendant did not dispute that the letter of 9 June 2006 was received. [85] Mr Slade acknowledged as much. [86] He stated that he letter received did not have any attachments. [87] He accepted that as a result of receiving that letter he was aware that he was to be charged interest on the unpaid account at 2.5% per month. [88]

Defendant's letter of 18 July 2006

As at 9 June 2006 the First Defendant was not in a position to settle their fuel account by the end of the month. [89] Mr Slade acknowledged that at the time other suppliers were available to him in the market and that he could obtain a bulk rate. He stated that he did not change because of the loyalty of dealing local and because he owed the Plaintiff money and did not want to leave on bad terms. [90] He rejected that he did not leave because he did not want to have his debt called in. [91] When he did move in 2010 he went to Caltex and stated that the First Defendant did buy fuel with them locally although stated "the card works in any Caltex." [92] He estimated that in 2010 he purchased $1.7 million dollars of fuel. When he did move suppliers, Mr Slade claims he saved 8 cents or more per litre and conceded that this meant that between 2000 and 2010 he had foregone a very substantial sum of money by way of savings. [93]
Mr Slade maintained that during the period from 9 June 2006 to 18 July 2006, he had a conversation with Mr O'Leary in which he informed him that he would pay for fuel but not for any interest. To this Mr O'Leary is said to have responded:- MR O'LEARY: "You need to pay your fuel account." [94]
Mr Slade stated that on 18 July 2006, he prepared a handwritten draft of a letter to be typed up by Ms Johnson, the First Defendant's office manager, with instructions to type the letter on letterhead. Thereafter, he signed a copy of the typed letter on the First Defendant's letterhead. To the best of his knowledge and belief, that letter was sent by Ms Johnson to the Plaintiff on or about 18 July 2006. [95]
The letter read: Further to your letter regarding finance charges which are to be charged from 1 July 2006. You are charging Slade Refrigerated Transport bowser price for fuel and not a bulk rate that is available to other business. This extra fuel charge would cover any late payments on the account. Therefore I will not agree to pay any finance charges on the fuel account. I trust you will take the above explanation into consideration Yours sincerely STEPHEN-SLADE DIRECTOR
Ms Monaghan maintained that the letter of 18 July 2006 was not received by the Plaintiff. [96] She maintained that she did not see the letter. [97] When her attention was drawn to the contents of the letter from the First Defendant dated 29 March 2011 [98] she stated that she did not understand the reference to the letter dated 18 July 2006. [99] She acknowledged receiving the letter of 29 March 2011 [100] but rejected the suggestion that the reason she never wrote back to the Defendant was because she received letter of 18 July 2006. [101] She maintained that she had not received the letter of 18 July 2006 and if she was aware of the assertion, that the First Defendant would only purchase fuel on the basis of no interest or finance charge, she would have responded to the letter. [102]
Ms Monaghan further maintained that at no time after imposing the finance charge did either Mr Slade or anyone else at First Defendant contact her and inquire about the disputed charge. [103]
Ms Monaghan stated that Mr O'Leary followed up the question of payment. She was later informed by Mr O'Leary that payment was to be expected and as a consequence, the Plaintiff continued to supply fuel. [104]
Ms Monaghan states that the amounts owing continued to increase, and by 30 April 2008, the amount owed by the First Defendant was $250,466.67. [105]
Mr O'Leary rejected the suggestion that the First Defendant's letter of 18 July 2006 [106] was in fact read by the Plaintiff shortly afterwards. He stated that if that was the case. He maintained that it was not received. [107]
Mr O'Leary maintained:- Q. I suggest to you that you are mistaken and that that letter was actually received by FJ & SM Monaghan. A. The amount of money that was owed, I am sure we would be quite aware of this and had taken action a lot further a lot earlier, or at least after that, you know, so in no way were we aware that Steve in refused to cover finance charges. He's also saying in here that I yeah, that he wasn't receiving bowser price, which was another thing that wasn't discussed. To me this is not something I've seen in the past or was aware of until, whenever it was sent and the allegation was made. [108]
Mr O'Leary maintained that during the period of July to 27 November 2006, Mr Slade did not raise any issue regarding the imposition of the financial interest charge and did not raise the letter of 18 July 2006. [109] Mr O'Leary maintained that during the period of July to 27 November 2006, he had discussions about "chasing up" payment for fuel which had been supplied but not paid for, but at no time did Mr Slade refer to the imposition of the financial charge. Ms Monaghan stated that between 30 September 2006 and 30 April 2010, the Plaintiff had set out on regular statements, the financial interest charge which it was charging due to the indebtedness and no one from the First Defendant had questioned it or contacted her to dispute the charge. [110]
Mr O'Leary specifically rejected that in the period from September 2006, Mr Slade had three conversations with him in which he stated that he would not wear the interest charge. [111] Mr O'Leary gave evidence that he had a conversation with Mr Slade on 27 November 2006. He recounts this conversation as follows:- MR O'LEARY: "How are you going with your account?" MR SLADE: "That interest rate you are charging equates to about 30% per year." MR O'LEARY: "Steve we have been forced to do this because of the minimal margin we make and the fact you never pay your account on time. As it is we are going backwards having you as a customer." MR SLADE: "Oh well - if that's the way it is." MR O'LEARY: "If you don't like the interest rate then pay the account on time or take out an overdraft with the bank because the interest they will charge you is less than what we are charging." MR SLADE: "Yeah." MR O'LEARY: "Anyway, Steve, charging interest doesn't get us out of our predicament. Your account needs to be paid." [112]
It was put to Mr O'Leary in cross-examination that as he was sitting in Court, he did not have a precise recollection of the words said in that conversation. He maintained that he did have a recollection of what was said. [113]
On one occasion, he recalls Mr Slade saying words to the effect of:- MR SLADE: "Paul - I'm selling my house. I'll pay you out of the proceeds once it is sold." [114]
Mr O'Leary stated that sometime after that, he asked Mr Slade what happened in relation to the sale of the house, and Mr Slade responded:- MR SLADE: "The bank took all the proceeds of the sale. I don't have anything extra to give you." [115]
On another occasion, Mr O'Leary asserts that Mr Slade said words to the effect of:- MR SLADE: "I am selling a subdivision which I am part of and when it is sold I will pay you the money." [116]
Mr O'Leary was challenged on having these conversations in which Mr Slade proposed paying from the proceeds from the sale of a house or from a subdivision. [117]
Mr O'Leary acknowledged that after November 2006, payments were made by the First Defendant to the Plaintiff, [118] but stated that no lump sum was paid as had been suggested to him, by Mr Slade selling his property or subdivision. [119] As far as he was concerned, those payments were towards the account, and there was no division between fuel and interest. [120]
Mr O'Leary's evidence was that from 27 November 2006, neither Mr Slade nor anyone else from the First Defendant raised the issue of the financial interest charge during their conversations he had chasing up the overdue account. [121] He stated that the imposition of the financial interest charge did not have the desired effect and the First Defendant continued being late in paying the account, resulting in him having to chase up the payments on a regular basis. [122] He stated that when he telephoned the First Defendant he was always given assurances or promises that payment would be forthcoming in the near future. [123]
Mr Slade was referred to statements [124] and accepted that so far as he knew the Plaintiff did not charge interest on the account until October 2006 and as at 20 September 2005, the balance of the account had risen to $101,974.33. [125] He later qualified the latter statement by stating that he did not do the accounts so could not tell if this was correct. [126]
From September 2006, Mr Slade asserts that he had at least three conversations with Mr O'Leary, in which he maintained that he would not wear the interest charge and referred to the fact that he had made that plain in his letter. He asserts that Mr O'Leary responded:- MR O'LEARY: "You need to pay your fuel account." [127]
Mr Slade was cross-examined about whether he spoke to Mr O'Leary in November 2006. His evidence was : Q. All right. Well, this is a conversation in November of 2006. But how do you say the conversation differed from that, in substance? How do you say? A. I know I protested about the interest on conversations and we said we would pay our bill as quick as we could, which we did. Q. But you didn't say, "We're not paying interest"? A. I think I did at times, we had discussions about the interest rates that they were trying to charge. Q. Sir, I suggest to you that if you had been adamant about the fact that you were not paying interest, or if you intended to tell them that you weren't paying interest, you would have said in a conversation of that nature, "We're not going to pay this interest"? A. We sent it in writing. Q. I see. So you relied upon the fact that you had sent that letter and thereafter you didn't need to say, we're not going to pay the interest; is that right? A. I wasn't going to get into verbals every time I saw them. ……… Q. Yes? A. He Paul did come and see us about the overdue account and we did have things and I did speak to him about the interest rate, that we wouldn't pay. CORNISH Q. Well, I suggest to you that wasn't the effect of the evidence that you just gave. Now, is it the case that, having sent your letter where you said, we're not going to pay interest, you thereafter considered you didn't have to tell them you weren't going to pay interest? A. That's right. Q. So you didn't have to protest about the fact so when Paul raised the bill with you, you didn't really need to raise or address the question of interest, because you had sent this letter? A. Yes.
When asked if he orally referred to the letter of 18 July 2006 in conversation with Mr O'Leary, the transcript records: Q. I take it you now say that you did have conversations where you said you weren't going to pay the interest with Paul O'Leary; is that right? A. At times. Q. And when you said that did you refer to your letter? A. Again, it's too long ago, I don't remember whether I referred to it. Q. You don't remember. Did you remember when you made your affidavit? A. Which one? Q. Your affidavit of 10 September 2015? A. Yes. Q. You did remember then, but you don't remember now; is that right? A. What's the question? I don't understand what you're asking me. Q. The question is, when you before you look at your affidavit, just put it down for one moment, please. The question is you now say that you had conversations with Mr O'Leary where you said you told him verbally that you're not going to pay the interest that Monaghans were charging; is that right? A. We discussed the account, the arrears in the account, when he came looking, and yes, it was brought up with the interest component of it and I rejected it, I protested. Q. The imposition of interest? A. Correct. As in the letter we sent as well. Q. Do you say you referred to the letter that you had sent in your discussions with Mr O'Leary? A. No, I didn't say that. Q. But do you say that? Do you say that you referred to your letter? A. I honestly can't remember because it's too long ago. It's 11 years ago. Q. I see. Well, I ask you again, did you remember when you made your affidavit? A. Do I remember speaking to Paul O'Leary about the account in my affidavit? Q. Yes? A. Well, if the affidavit says it, yes, I did. Q. Well, in your affidavit, paragraph 8 this is your affidavit of 10 September 2015 you say, in the period from September 2006, which is the period we're talking about, you had at least three conversations with Mr O'Leary, in which you had a conversation to the following effect, "I will try to get you something for the account but I'm not going to wear this interest charge, I made that plain in my letter." Mr O'Leary said, "You need to pay your fuel account." Do you still say that? A. Along those lines in multiple discussions, we discussed the arrears in the account and the interest. Q. I see. I'll just pause for one moment there. Well, a few moments ago I asked you whether you were aware that Mr O'Leary said this. Mr O'Leary's evidence is that they never received your 2006 letter. Do you remember that? A. You said that, yes. Q. I said that. And you know that Mr O'Leary says he never received that letter; yes? A. Through his affidavit? Q. Yes? A. Yeah, I do recall, yep. Q. And you also gave evidence that you have no way of knowing whether or not Monaghans ever received the 18 July 2006 letter? A. I have no way of knowing whether they received it. Q. You have no way of knowing whether they did or not? A. I just know it was sent from the office. Well, I Q. I see, yes. I suggest to you, sir, that you never had any conversations with Mr O'Leary in which you referred to that letter, because if you had have had a conversation with Mr O'Leary which referred to that letter, you would now know, or you would have a way of knowing whether Monaghans had received that letter, because Mr O'Leary would have either understood well, Mr O'Leary would have said to you, "What letter are you talking about? I never received a letter." Do you accept that? A. No. [128]
Mr Slade maintained that he did not have a conversation with Mr O'Leary in the terms relating to the sale of his house and a subdivision from which funds would be utilised to discharge the account. [129] He was not cross-examined as to this evidence.
Ms Johnson acknowledged that the First Defendant was usually sent fuel invoices each month by the Plaintiff. In her role as office manager, she received the invoices and statements issued by the Plaintiff and that she arranged for payment of those invoices. [130] Her evidence was that on or around about 9 June 2006, the First Defendant received a letter from the Plaintiff dated 9 June 2006, [131] in relation to interest and that letter had no attachment. [132]
Ms Johnson's evidence was that Mr Slade handed her a sheet of paper and said words to the effect: "Please type this letter." The sheet of paper contained a draft letter from the First Defendant to the Plaintiff in response to the letter from the Plaintiff dated 9 June 2006, being a draft letter written in Mr Slade's handwriting. She asserts that she typed the draft letter onto the First Defendant's letter head, obtained Mr Slade's signature and notes that a copy of the signed letter of the First Defendant to the Plaintiff was retained. [133]
Ms Johnson's evidence was that it was her usual practice to place a stamp on the letter, and then place the letter in the mail box at the central post office in Wauchope. She did not have a specific recollection of posting the letter from the First Defendant to the Plaintiff. She stated that she usually attended the post office on the morning of each working day and had no reason to believe that she departed from her usual practice and to the best of her knowledge, that letter was sent by the First Defendant to the Plaintiff on or about 18 June 2006. [134]
She asserts that her usual practice was also her usual practice in July 2006.
According to her evidence and to the best of her knowledge, the First Defendant never agreed to pay any interest or finance charge to the Plaintiff. She states that when she received an invoice or statement from the Plaintiff in the period from 9 June 2006 that included a finance or interest charge, she would deduct that charge when making payment on behalf of the First Defendant. She asserts that the payments she would make on behalf of the First Defendant in the period from June 2006 were always by reference to the cost of the fuel supplied after deducting any finance or interest charge that had been claimed. She asserted that she never intended for the First Defendant to make any payment to the Plaintiff in respect of any finance or interest charge. [135]
Ms Johnson's evidence was that she reviewed entries in the Plaintiff's statement in the period from 1 June 2006 and after preparing a reconciliation, she concluded that the First Defendant overpaid the Plaintiff for the fuel which it supplied in the amount of $10,349.80. She noted that the total payments made by the First Defendant to the Plaintiff for the period from 1 June 2006 to 3 December 2014, was $1,905,393.23 as opposed to the invoiced amount of $1,895,043.43. [136] She stated that the overpayment was made as a result of her overlooking payments which had been made by the First Defendant to the Plaintiff. [137]
Ms Johnson notes that the statement sent under the cover of the letter from the Plaintiff's previous solicitors dated 23 May 2014 [138] contained a number of handwritten annotations. She asserts that those handwritten annotations were written on or about the date of the statements and then she returned the statements (with the handwritten annotations) to the Plaintiff shortly thereafter. Ms Johnson states that in the handwritten annotations she deducted the finance or interest charge imposed by the Plaintiff in order to make it clear that the payment that the First Defendant was making was only for fuel. [139]
In cross-examination, Ms Johnson conceded that in relation to fuel, generally speaking, she would receive a monthly invoice in relation to the account whilst it was in operation. [140] She recognised the type of invoice characteristic of that that she received from the Plaintiff in respect of the fuel account, as that being shown in Exhibit SMJ-1 to her affidavit, at page 77. She accepted that when she received an invoice from the Plaintiff, she would discuss payments with Mr Slade. [141] She further accepted that he would direct her as to payment of the Plaintiff. [142] Although if he was away, she would attend to this herself. [143] This was conceded to be infrequent. [144]
Ms Johnson conceded that the business had cash flow difficulties. [145] She conceded that the business had difficulties making payments on their fuel account for that reason, and throughout the period of 2001 until it stopped making payments on the account, it was characteristically in arrears. [146] She accepted that the payments which were made to the account during the period were determined by what the First Defendant had the capacity to pay at any particular time. [147] At no time did the First Defendant ever pay down to zero, the amount of money that was owing, prior to January 2011, in respect of fuel. [148]
Ms Johnson conceded that the amount of money that was being paid on the account was not determined by the amount owed in respect of fuel to the exclusion of the finance charge prior to January 2011, but rather, restricted by cash flow. [149]

Annotated invoices

Ms Johnson's evidence was that she maintained a spreadsheet from 2006 in which she used to list the finance charges every month and then deduct that from the account that had to be paid. [150] It was put to her that the schedule [151] was prepared for the purposes of the proceedings. Ms Johnson rejected this suggestion. [152] She maintained that she prepared the statement each month and that it would auto-sum the deduction of the finance charges so as to enable her to keep a running total. [153]
In cross-examination, Ms Monaghan's attention was drawn to the contents of Tab 9 of Exhibit SMJ-1, to the affidavit of Ms Susan Maree Johnson dated 24 August 2015. Under cover of a letter from the Plaintiff's solicitors dated 23 May 2014 were statements supplied by the Plaintiff to the Defendant from November 2009 to 31 March 2013. Those statements contained a series of handwritten annotations. [154] Ms Johnson's evidence was that she made those handwritten annotations on or about the dates of the statements and returned the statements (with the handwritten annotations) to the Plaintiff shortly thereafter. She stated that in the handwritten annotations she deducted the finance or interest charge imposed by the Plaintiff in order to make it clear that the payment that the First Defendant was making was only for fuel. Ms Johnson specifically referred to the handwritten annotations made on the statements dated 21 January 2010 and 22 February 2010. [155]
Ms Monaghan in cross-examination maintained that the annotated statements were not received. [156] Ms Monaghan drew attention to the fact that the statement of 13 January 2011 had annotations which appeared to suggest that they were sent to a different party. [157] It was put to Ms Monaghan that the only way that her previous solicitors could have received the statements was from her, or from someone at the Plaintiff. She maintained that she had not seen them. [158]
The First Defendant maintained that the letter of 18 July 2006 was sent and reinforced by the fact that the statements were sent to the Plaintiff deducting the interest charge. This it was claim was evidenced by the fact that the Plaintiff's former solicitors MSB Lawyers attached them to a response to a request for further and better particulars dated 23 May 2014. [159] Those statements are dated from 9 May to 31 March 2013. Ms Monaghan accepted that she gave the instructions to MSB Lawyers however maintained that the attachments with annotations did not come from her. [160] She maintained that no one from the Plaintiff could have provided those documents, [161] although accepted that other documents attached to the correspondence were provided by her. When asked to explain how those documents came to be provided to MSB lawyers, Ms Monaghan stated they may have been sent by the solicitors for the Defendants.
Mr Peter Wood, solicitor, gave evidence that he did not provide MSB lawyers with the copy of the statements and tax invoices attached to the letter from MSB Lawyers dated 23 May 2014 prior to that day. [162] Mr Wood was not required for cross-examination.
Ms Johnson was asked whether she sent the statement back every month to the Plaintiff with the annotations which she claimed she had made, deleting the finance charges. She responded by stating that if she had the annotations on them, she did and if there were errors, or if she found payments missing, but this did not occur every single month. [163] Ms Johnson accepted that she did not send back a statement showing the removal of the finance charges every month. [164] She accepted that the only reason she would send a statement back was when there was an error in a charge being applied or an error in credit payments being made. [165]
This evidence was further pursued in cross-examination, and the transcript records as follows:- Q. Yes. So you didn't in fact maintain correspondence in respect of the charging of interest charges with Monaghans? A. No, I just kept my own internal list. Q. So these sheets with handwritten annotations on them I'll withdraw that. So it's the case then, isn't it, that the evidence that you gave in paragraph 32 of your affidavit, which was that the statements appearing at pages 41 and following in your affidavit were not sent back to Monaghans at or about the date that you received them with the handwritten annotations on them to make clear that you weren't paying anything in respect of interest? A. Sorry? Q. The evidence that you've given, that you produced these statements for the purposes of removing the interest charges and sending them back to Monaghans to make it clear that you weren't paying interest is just mistaken in your affidavit? A. Yeah, well, I did send them, but not all the time. Q. I'm sorry, I suggest to you it's mistaken, because the evidence that you've just given is that you did not send statements back because of a dispute as to the existence of interest charges, but only if there were problems with payments and credits; that's right? A. And it showed that less any finance charges, that we weren't paying them. Q. Ms Johnson, which is it? A. Well, it showed both. Q. I suggest to you, you did not send these statements back to Monaghans to show that you were not paying money in respect of interest? A. Well, I would have, because it was on there. Q. I'm sorry? A. It was written on it, that we weren't less finance charges, that we weren't paying them. Q. Ms Johnson, let's take a step back. You accepted that you did not send statements back to Monaghans to show that you were disputing interest charges. You accepted that proposition; yes? STEPHENSON: I object. That's misleading. That wasn't her evidence. HIS HONOUR: She gave evidence that she sent them back sometimes. CORNISH Q. Well, let's be clear. You sent them back because you found errors as to credits or payments? A. Yes. Q. And I put to you that you didn't send them back to show that you because there were finance charges included on the statements? A. Well, sometimes there were just finance charges, that's all I took off sometimes, and the payments that we made, so they could see why we were paying. Q. So what you mean to say is that if there was both an error as to a credit or a debit and also a finance charge included on the statement, you would have sent those back? A. Not all the time. I did not send them every month, but I did send them on occasion. Q. So I suggest to you that the statements that you find at 41 to 54 of SMJ1 were not sent back to Monaghans by you; do you accept that? A. I wouldn't remember which ones I actually sent back. Q. I see. So the evidence that you gave in paragraph 32, that you made the handwritten annotations on the documents referred to in subparagraph 29(c) and just take it from me it include these documents and then returned those statements to Monaghans is mistaken? A. I probably should have said not always. Q. Well, you just don't know, do you, Ms Johnson? A. No, that's what I'm telling you. Sorry. [166]
Ms Johnson was further asked whether the evidence she provided in her affidavit in relation to the handwritten annotations was mistaken. She responded by stating: "Yeah, well, I did send them, but not all the time." [167]

Amended invoices

It appears clear that at times different invoices disclosing different amounts were issued by the Plaintiff. One statement dated 9 May 2013 disclosed a balance of $3655.55 as at 29 November 2009. [168] Another dated 16 September 2010, disclosed a balance for the same date of $205,264.46. [169]
It was put Ms Monaghan that the first statement was annexed to the letter forwarded by her then solicitors MSB Lawyer on 23 May 2014 and she subsequently amended the statement between that date and the date she made her affidavit. [170] Ms Monaghan initially sought to explain the difference on the basis of there being a computer failure. [171] She later accepted however that that occurred prior to 9 May 2013. [172] It was then put to Ms Monaghan that could not be the explanation for the subsequent variation. Ms Monaghan could not explain the variation except to contend that the first statement was clearly incorrect as it did not disclose payments from November 2000 to November 2009. [173]
The Defendants also drew attention to what were described as handwritten entries and discrepancies in the dates of the pages of the statement which forms Exhibit WM3 to Ms Monaghan's affidavit of 12 May 2015. It was contended that this also supported the conclusion that the Plaintiff varied its claim for interest in the period after 9 May 2013. It was argued that this contention was supported by the fact that as at 7 January 2011 there were three different versions of statements showing different amounts as at that date. [174] These variations were not drawn to the Ms Monaghan's attention in cross-examination.

Guarantee dated 29 July 2008

Ms Monaghan asserts that when she originally dealt with Mr Slade in 2001, she did not inquire about the nature of the entity which operated the business and assumed that she was dealing with him as an individual. However, she subsequently became aware that Slade Transport was operated by a company called "S & W Slade Pty Ltd" being the First Defendant. [175]
Mr O'Leary gave evidence that he consulted his solicitor and asked for the preparation of a guarantee by the Second and Third Defendants in respect of the money owing by the First Defendant. He stated that after the document was prepared, he spoke to Mr Slade and said words to the effect of:- MR O'LEARY: "Wendy has said that she won't keep supplying you with fuel unless you sign this." At that point, the document was handed to Mr Slade, who said:- MR SLADE: "I'll look at this and let you know." [176]
Thereafter, Mr O'Leary claims that he inquired of Mr Slade whether the document would be signed and was informed that instead of him signing the document which his [Mr O'Leary's] solicitor had prepared, he returned a document which he [Mr Slade] had prepared and which he and his wife had signed. [177] This is document which is annexed as Exhibit WM7 to the affidavit of Ms Wendy Monaghan dated 12 May 2015. [178]
Following a conversation with Mr O'Leary and Mr Slade, the Second and Third Defendants provided the Plaintiff with a guarantee on 29 July 2008, which stated:- Dear Wendy, This letter is to explain that we Stephen Slade and Wendy Slade are Directors of S & W Slade Pty Ltd trading as Slade Refrigerated Transport. We personally guarantee the debt with F & S Monaghan for fuel supplied to Slade Refrigerated Transport. Yours sincerely STEPHEN SLADE - WENDY SLADE Witness; SUSAN JOHNSON. [179]
Mr Slade conceded that he received a document from Mr O'Leary. Although he read it, he could not recall if it provided for him and his wife to guarantee the Plaintiff's fuel account. [180] In cross-examination, he stated that Mr O'Leary in his document did not differentiate between fuel charges and charges for interest in his demands for payment. [181] It is not in issue that Mrs Wendy Slade gave uncontested evidence that she was never the director of the First Defendant, and was only the holder of sixty ordinary shares. [182]
Mr Slade conceded that he signed a letter on the First Defendant's letterhead dated 19 July 2008, but added that he did not obtain any legal, accounting or financial advice in relation to the alleged guarantee and that no one on the part of the Plaintiff suggested to him that he should obtain such advice. [183] He stated that the terms, meaning and effect of the alleged guarantee were not explained to him by any person and that he did not have any accounting or legal qualifications. [184] Further, when he signed the alleged guarantee, he asserted that his understanding was that the guarantee would only apply in relation to existing amounts then owed by the First Defendant for fuel already supplied by the Plaintiff. [185]
Thereafter, the Plaintiff continued to supply fuel to the First Defendant although Mr Slade's evidence was that the quantities purchased decreased. [186]

Letter from Crescent Head Legal

Ms Monaghan asserts that on 1 June 2010, she wrote to the Second and Third Defendants requesting that the arrears be paid as a matter of urgency. [187] Thereafter on 20 February 2011, Crescent Head Legal sent a letter to the Defendants requiring payment of the amount of $209,232.06. [188] Ms Monaghan next stated that on 23 February 2011, a letter was forwarded to Crescent Head Legal by the First Defendant authored by Mr Slade. This letter read as follows:- RE: F & S Monaghan Pty Ltd In reply to your letter dated 20 February 2011. We did sign a personal guarantee to pay F & S Monaghan for the fuel supplied to Slade Refrigerated Transport. We have done this and all fuel supplied has been paid for up to and including January 2011. At no time did we agree or state that we would pay 2.5% interest per month which equates to approximately 35% compounded. All charges that are now being billed are for interest or compounded interest. Our company did pay for mainly diesel that was charged to us at the bowser rate not the bulk rate. This in itself would cover any late payments of our fuel account. I will [sic] away until Wednesday, 2 March 2011, and I will contact your client on my return. Regards STEPHEN SLADE. [189]
On 29 March 2011, a letter on behalf of the First Defendant was sent to the Plaintiff. [190] The letter read as follows:- Dear Wendy. We have been contacted by Crescent Head Legal re: finance charges. I refer to our letter to you dated 18 July 2006 stating that we won't pay any interest on the account due to the price of fuel we are being charged - bowser price, not bulk. If you have any queries please contact me on the above numbers. Yours sincerely STEPHEN SLADE DIRECTOR. [191]
Mr Slade asserts that his position as to not paying interest charges was reaffirmed in the letters sent to Crescent Head Legal, dated 23 February 2011 [192] and the letter dated 29 March 2011 addressed to the Plaintiff. [193] He asserts that he had never agreed, either on his own behalf or on behalf of the First Defendant, to pay any finance or interest charge to the Plaintiff. [194]
The Defendants assert that this indicates the First Defendant's objection to paying interest.
In cross-examination, Ms Johnson's attention was then drawn to the letter forwarded to Mr and Mrs Slade, dated 20 February 2011 by Crescent Head Legal in which the Plaintiffs were seeking recovery of a debt totalling $209,232.06 as at 7 January 2011. [195] It was said that this amount corresponded with the amount brought forward in the account, sent by the Plaintiff in a statement dated 11 November 2011. [196]
It was put to Ms Johnson that following the First Defendant receiving the legal letter, and on the understanding of Mr Slade's contention that they were not obliged to pay interest charges, a reconciliation of the account was prepared to identify whether or not, all fuel charges on the account had been paid for. [197] She accepted that the conclusion she had reached when she prepared the reconciliation for the purposes of dealing with the legal letter was that the money for the fuel had been paid by 27 January 2011. [198] She also stated that she identified the relevant fuel charges and the finance charges which were forming part of the claimed balance, and deducted them. [199]
The document was described by reference to Exhibit SMJ-1 to Ms Johnson's affidavit at pp 51 - 54. On the basis of this analysis, she ascertained that the First Defendant needed to pay $668.55 as at 27 January 2011. [200] Ms Johnson then accepted that on the basis of the reconciliation she prepared, Mr Slade wrote back to Crescent Head Legal to advise that the fuel purchased from the Plaintiff had been paid for. [201]
Ms Johnson next stated that in response to a letter from Professional Collections, Mr Slade on behalf of the First Defendant, wrote a response dated 22 May 2013 which was emailed the same day. [202] She stated that she would have enclosed only page 54 of the reconciliation document.
In further cross-examination, Ms Johnson rejected the proposition that the reconciliation which she said had been performed following the letter from Crescent Head Legal, comprised all of the pages of 51 to 54. She stated that she did the same reconciliation each month that she received the statement and that each month, there was an individual reconciliation. [203]
It was put to Ms Johnson that that was not her evidence earlier, she stated that she may have misunderstood, but maintained that she did it every month. [204]
It was then put to Ms Johnson that if that were correct, p 54 of Exhibit SMJ-1 would have been prepared in January 2011. She accepted that that was correct. It was put to her why she would have to prepare the document having received the letter from Crescent Head Legal of 23 February 2011. She then asserted that she did it for the Professional Collections letter in 2013. [205] She then recanted and stated that it was prepared "two years before [the Professional Collections letter]." [206] She thereafter stated that she did this every month just as part of her "normal work." [207]
At the Plaintiff's request, I ordered the First Defendant to produce an electronic copy of the document referred to in that letter. [208]

The Plaintiff engaged Professional Collection Services

In 2013, the Plaintiff engaged Professional Collection Services to pursue the unpaid amounts. Ms Monaghan stated that this organisation wrote to Slade Transport on 10 May 2013 and the Defendant company responded by a letter dated 22 May 2013, reiterating that they did not agree and would not agree to pay any interest that the Plaintiff company had sought to charge. [209]
Ms Monaghan stated in her affidavit that no further payments had been made on the First Defendant's account since 5 September 2012, when a payment of $696 was made. Thereafter, on 28 May 2013, the Plaintiff commenced proceedings in this Court. [210]
It was put to Ms Johnson in cross-examination that in 2013, she sent to Professional Collections, the document which was attached to the First Defendant's letter of 22 May 2013. [211] She reiterated that she would have only sent the last page, being page 54. [212]
Mr Slade accepted that the reconciliation reflected at pages 41 to 54 of Ms Johnson's Exhibit SMJ-1 and showing $668.55 as paid on 27 January 2011 was prepared in order to enable him to respond as he did to Crescent Head Legal as per his letter of 23 February 2011 in which he stated that all fuel had been paid for by January 2011. Although he drafted the letter to Professional Collections dated 22 May 2013, which asserted that the final payment for fuel was made on 27 January 2011, he did not have a recollection of the statement accompanying the letter but presumes it would have been. [213]

Fuel price

So far as the petrol discount was concerned, Ms Monaghan maintained that the discount provided to the Defendants varied between half a cent, to one cent per litre, from May 2005, from the bowser price. [214] She stated that it depended on the margin of fuel at the time and that the price changed daily with fuel. [215]
Ms Monaghan further detailed the discount that she applied to the Defendant at the bowser, compared to the bowser price during the period that she dealt with them, from 1 May 2005 to January 2008. [216] Ms Monaghan acknowledges that the discount was not applied thereafter as in light of the significant sum that she was owed, she did not believe that it was appropriate that the discount be continued. [217]
Mr O'Leary's evidence was that Mr Slade never raised with him that the rate he was being charged was the "bowser rate" other than the "bulk rate". He stated that from his perusal of the invoices which were sent to Slade Transport, it received a discount off the bowser rate, which was greater than many other customers of the Plaintiff, who also purchased fuel in bulk.
Mr Slade did not accept he was being charged a discounted rate and asserted that his knowledge in this regard came from looking at the bowser. [218] He stated that he spoke to Mr O'Leary a couple of time about the discount rate and that is what resulted in the moving of the account in 2010. [219]
Mr Slade conceded that it was financially significant to his business that he receive a bulk rate for fuel. Mr Slade was asked about the discussions he has with Mr O'Leary in the period in the lead up to 2005. The transcript records:- Q. And the issue of whether you were being charged a bulk rate as opposed to a bowser price was the subject of conversations between you, you agreed with me earlier, and Mr O'Leary in the period leading up to 2005; that's right? A. Yes. Q. And just to recap, he maintained that you were being provided a discounted rate? A. In his statement or verbally? Q. No, in the conversations that you had with him, he maintained that you were being provided a discounted rate? A. He would say that we were. Q. He would say that you were. And you didn't take any steps to ascertain whether that was true? A. I watched the bowsers. Q. But your evidence in your affidavit is that it was difficult for you to ascertain the answer to the question of whether you were provided a discounted rate by watching the bowsers because the invoices that you received for fuel arrived some six weeks, in some cases, after the purchase of fuel had been made, so it was difficult to correlate the bowser price with the price you were being charged; that's right? A. It could get confusing, yes. Q. But there are other steps you could have taken to ascertain whether you were being charged a discounted rate, weren't there? A. As? Q. You could have asked for proof from Monaghans for a record of what the bowser rate was and what the discounted rate was in respect of any purchase of fuel that your company made? A. Yes, I could have. Q. Yes. But you didn't take that step? A. No. [220]
Mr Slade maintained that he disbelieved that he was being charged a discounted rate but stayed with the Plaintiff because "there was a loyalty there to stay local" even though it was economically significant to his business. [221]

Legal principles

In Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, [222] McHugh JA (as his Honour then was) after analysing cases from the US, held:- … 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 terms. [223]
His Honour went on to hold:- The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted. .
Kirby P (as his Honour then was) arrived at the same conclusion, and made the following observations:- … the common law has provided relief from an apparently unfair operation of the general principle that silence is not regarded as acceptance is by an implied acceptance, derived from an objective consideration of all the relevant facts and circumstances. The circumstances in which assent may be inferred, although never specifically stated, vary with the infinite variety of facts which come before the courts in disputed contractual cases. From the facts, looked at objectively, a court may be willing to infer a party's acceptance. [224]
Relevantly, Kirby P further stated:- The relationship between the parties is also important. The law might less readily infer assent to an arrangement to be bound to a printed contract between individuals involved in a personal association than it would in circumstances of a contract allegedly arising out of an apparently regular business or professional association. Here, the relationship between the parties was a continuing one for commercial purposes. Work was done and accepted within that relationship. Progress payments were claimed and made. The relationship between a property developer and a firm of managing architects might possibly be explained by reference to an imputed contract or one agreed to orally. It is less likely that such parties would enter a protracted agreement, involving a substantial building project, and large sums of money without settling in some little detail the terms of their relationship. It is in this way that the identity of the parties and the nature of their relationship may more readily give rise to the inference that they had agreed to be bound by a printed contract than would be the case, say, in dealings between private individuals having no similar commercial attributes (emphasis supplied). [225]
In Brambles Holdings Ltd v Bathurst City Council, [226] the Court held that the uncontested fact that an offer was rejected, does not bar a finding of acceptance if there was mutual assent manifested by conduct. Heydon JA (as his Honour then was) held:- If offer and acceptance analysis is not always necessary or sufficient, principles such as the general principle that a rejection of an offer brings it to an end cannot be universal. A rejected offer could remain operative if it were repeated, or otherwise revived, or if in the circumstances it should for some other reason be treated, despite its rejection, as remaining on foot, available for acceptance, or for adoption as the basis of mutual assent manifested by conduct. [227]
Heydon JA went on to adopt the test of McHugh JA in Empirnall stating:- … it is relevant to ask: in all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of the Council and a reasonable person in the position of the defendant think as to whether there was a concluded bargain. [228]
Heydon JA also noted that there was the test could be put another way:- One way of putting the applicable test is the way that Scrutton LJ put it in Sullivan v Constable (1932) 48 TLR 369 at 370:- If the [defendant] had so acted that the plaintiff was reasonably entitled to believe that [the defendant] was assenting to the position which had been asserted by the plaintiff, the [defendant] was bound. [229]
The approaches of McHugh JA and Heydon JA (as they then were) in Empirnall and Brambles respectively, have been cited with approval in subsequent cases. [230]
The formulation adopted by McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd, [231] and later followed by Heydon JA in Brambles [232] was characterised as being "uncontroversial" most recently in Crowe-Maxwell v Frost. [233]

Conclusion

In assessing the evidence I am asked to draw an inference that the Plaintiff's letter of 10 October 2005 was sent to the Defendant based on what was a practice employed in sending the letters together with the monthly tax invoice which was designed to provide some assurance that the letter was received as account customers not receiving the statement would have had cause to call the Plaintiff and follow it up for the purpose of claiming their rebates. No evidence was presented of the monthly invoice or any associated correspondence being returned to the Plaintiff. No specific evidence was presented that the letter bore the correct name and address, contained the relevant document, affixed with the correct postage and was placed in the post. However such an inference may be open based on the practice of sending invoices in the past and their apparent receipt by the Defendant along with the postage of the invoices and correspondence on the occasion in question.
Mr O'Leary's evidence suggests that the letter of 10 October 2005 was not sent routinely to customers who purchased in bulk as Ms Monahan suggested but rather to customers who were "a problem."
The evidence of Mr Slade and Ms Johnson is that that they have no recollection of receiving such correspondence. They do not contest the monthly invoice being received. Moreover Mr Slade's evidence was that the correspondence of 10 October 2005 was consistent with the discussions he had been having with Mr O'Leary. He also had discussions with Ms Monaghan about the indebtedness. There is no question that the First Defendant had not been paying in accordance with trading terms Mr Slade accepted that, according to the Plaintiff's invoices, the balance of the account was $99,725.73 on 31 October 2005. [234]
The circumstances of the Defendant's indebtedness, the impact on the Plaintiff's overdraft, the oral discussions between with Mr Slade, the purchase of the revised terms and conditions in 2005 by the Plaintiff and the evidence of sending of the invoices as a matter of general practice go some way to establishing that the letter was in fact posted and received.
On the other hand the revised terms were not enforced in the period thereafter and interest was in fact first levied on 31 October 2006. [235] Furthermore there was an acknowledgement by Ms Monaghan of some reluctance on her part to send the letter and there was evidence on the part of Ms O'Leary that suggests not all bulk purchasers of fuel received the letter but only those that were considered a problem. It was not suggested that the First Defendant was not one of those.
The first Statement of Claim filed in this matter was verified by the Plaintiff and did not assert trading terms based on the letter of 10 October 2005 but rather based on payment within 7 days. The letter from the Plaintiff's then solicitors dated 11 June 2014 replied to a request made of them on behalf of the Defendants that the "terms and conditions" were forwarded to the Plaintiff under cover of a letter dated 9 June 2006. [236]
As will be noted below the Plaintiff's further correspondence of 9 June 2006 did not refer to this earlier correspondence and yet sought to impose more onerous interest terms even though the earlier proposal had not been implemented so that its impact could be assessed. Moreover it referred to introducing the policy and retained a 30 day trading period.
In assessing the evidence, I bear in mind what was stated by Tamberlin J in Lake Cumbeline Pty Ltd & Ors v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia):- "[Given the lapse of time] between the events and conversations raised in evidence and the hearing of the evidence before me, the only safe course is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence. In circumstances where the events took place so long ago, it must be an exceptional witness whose undocumented testimony can be unreservedly relied on." [237]
I also bear in mind what was stated by Emmett J (as his Honour then was) in Warner v Hung, In the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2): When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361-2). [238]
Much of the Plaintiff's case on the issue of the sending of the letter of 10 October 2005 depends on an acceptance of their testimony on this point. However when put alongside the surrounding evidence I have referred to I am unable to be satisfied that the Plaintiff has discharged the onus of establishing this fact. [239] Nor does there appear to be any subsequent discussion as to the receipt of that letter.
The Plaintiff's contention was that the sending of the letter of 10 October 2005 to the First Defendant would be a matter that points to an explanation as to why the First Defendant did in fact accept the 2006 letter going forward. [240] The force of that submission is dissipated in light of the fact that interest was not in fact charged until after the 9 June 2006 letter was sent.
It is not in issue that the Plaintiff's letter of 9 June 2006 was received by the First Defendant. Bearing in mind its content of that letter, neither party submitted that anything flowed from whether or not the printed terms and conditions [241] were received by the First Defendant at or prior to that time.
The background to it involved the First Defendant being pursued for late payment, Mr Slade asserting that he was not receiving a bulk rate and there was a significant saving to be made in his eyes. In such circumstances it is illogical that he would maintain his patronage because he wanted to "stay local" as he asserts. This is particularly so as he claims he ultimately transferred his business to Caltex with whom he bought at least some fuel locally. Furthermore the suggestion that he did not want to leave the Plaintiff on bad terms is implausible in circumstances the Plaintiff was seeking to impose a finance charge of the nature represented in its letter of 9 June 2006.
I am not satisfied that the letter of 18 July 2006 said to have been sent to the Plaintiff by the First Defendant was in fact sent. Ms Johnson had no specific recollection of sending it and relied on what she regarded as her usual practice as to mail. Ms Johnson's evidence as to the sending of the statements deducting the finance charges was variable and unreliable. I do not accept that she forwarded the statements making these deductions. If the First Defendant wished to make clear on an ongoing basis its non-acceptance of the terms proposed on the letter of 9 June 2006 one would expect it would have done so by much clearer means. It is implausible that such correspondence would be forwarded without further explanation as to the nature of the calculations she had made.
Although recollections of events so long ago need to be treated carefully, I found the evidence of Mr Slade to be unreliable and do not accept that he discussed the letter of 18 July 2006 with Mr O'Leary or Ms Monaghan. Indeed the only subsequent reference to it is the letter of 29 March 2011. Why a letter, such as that of 18 July 2006, would be written in circumstances where the First Defendant continued to order fuel on the fuel account some six weeks after advised of revised trading terms was not explained. Furthermore I found Mr Slade's evidence as to the discussions he had with Ms Monaghan and Mr O'Leary as variable and unreliable. In face of the circumstances confronting the Plaintiff it is difficult to contemplate it continuing to accept a growing indebtedness from the First Defendant without security in circumstances where the latter was struggling to meet its obligations. The continued patronage of the Plaintiff was in my view not connected with any desire to stay local but rather to maintain terms that practically allowed supplies to continue notwithstanding the accumulated debt. To that extent I do not accept that there was any protest against the interest charges until after the Plaintiff referred the matter to debt collection.
Mr Slade's assertions as to him advising of a refusal to pay interest based on not being charged a bulk rate cannot be accepted in circumstances where he did next to nothing to verify its accuracy. To have made such an assertion believed it and nevertheless retained his account with the Plaintiff in the circumstances he describes is implausible even more so when there is no effort undertaken to clarify the issue by reference to the Plaintiff at the time. I accept the evidence of Ms Monaghan and Mr O'Leary on this matter. These findings reinforce my view that the letter of 18 July 2006 was not sent to the Plaintiff and that the First Defendant accepted the revised terms of the Plaintiff's letter and that the first protest about fuel prices was made on 29 March 2011 when the First Defendant wrote to Crescent Head Legal, at which point it was clear that the price charged was no longer the bulk rate.
The variation in the Plaintiff's statements forwarded to the First Defendant was earlier described. Whatever the reasons that may account for this, it does not support the argument advanced that they demonstrate that the First Defendant did not accept any term regarding the payment of interest. [242] I do not accept Ms Johnson's statement that the variation is accounted for "presumably" on the basis that as at 23 May 2014, the Plaintiff "did not seek to claim a finance or interest charge in the period prior to 29 November 2009." [243] Whilst the inaccuracy of the statement issued on 9 May 2013 is acknowledged it does not support an inference that no interest was charged prior to that date. As acknowledged earlier the inaccuracy extended to a failure to record payments made. Further the evidence of both Mr O'Leary and Mr Slade is that they had discussions which on either version presupposed the Plaintiff's imposition of interest in 2006. In any event, Ms Johnson's presumption is at odds with her evidence that from October 2006 she maintained a schedule and finance charges on a monthly basis and deducted them.
Quite apart from this Ms Johnson's evidence as to when she prepared the reconciliation, I find her account to be inconsistent and unsatisfactory. I accept that the reconciliation was prepared for the purposes of determining the payment to be made on 27 January 2011 of $668.55 perhaps in anticipation of what was to come. Mr Slade's own evidence was that it was done to for the purposes of responding to Crescent Head Legal. Whatever be the position I do not accept that it was prepared on a monthly basis as asserted by the First Defendant nor do I accept that it was sent at any frequency or at all directly the Plaintiff as suggested by Ms Johnson in her evidence.
In this instance the proposal to charge interest had been clearly communicated to the First Defendant. The First Defendant continued to take supplies notwithstanding that fact. The Plaintiff's invoices indicated that that an interest charge was being applied. The payments made no suggestion that the proposed terms were not accepted. Rather they were referable to the First Defendant's capacity to pay. I am satisfied that no other protest was made until after the referral to Crescent Head Legal. The parties were not related and it was not suggest that they lacked commercial awareness.
It is acknowledged that the Plaintiff's invoices correspondence and discussions repeatedly referred the outstanding amounts including the interest charges. On my findings the First Defendant did nothing to reject them but otherwise transacted normally. However even if I am wrong in my conclusion that the First Defendant's letter of 18 July 2006 was not sent I would still regard the First Defendant as being bound by the revised trading terms. This is so, in accordance with the principles in Empirnall and Brambles, I am satisfied that bearing in mind the length of time the charges were imposed and the First Defendant's continuation in obtaining supplies a reasonable observer would in all the circumstances view it as having accepted the terms of the Plaintiff's revised offer.

Arguments

The Defendants argued that the stipulation of 2.5% interest monthly on overdue payments amounted to a penalty amounting to an annual effective rate which exceeds 30% per annum. It was contended that as such it amounted to as security for and in terrorem of the satisfaction of the primary stipulation. [244]
Ms Monaghan drew attention to the fact that it was not unusual for suppliers of fuel to provide for interest to be charged when there is late payment for fuel. Reference was made to trading charges by Neuman Petroleum Pty Limited at 2% per month, and Hastings Co-op of 18% per annum, when invoices were not paid by the due date. [245] She further asserts that during the period that the Plaintiff supplied fuel to the Defendant, it operated an overdraft account with the Commonwealth Bank and it was charged interest in respect of that overdraft account at varying rates during the period. [246] She asserts that all payments that the Defendant made to the Plaintiff, the invoices were placed in the overdraft account and that in order to inject funds into that account, she had to mortgage her property and loan that money to the Plaintiff. [247]
In cross-examination, Ms Monaghan's attention was drawn to the contents of [38] of her affidavit of 12 May 2015. She conceded that in her account of her conversation with Mr Slade about having to pay within 21 days not 30 days, no reference was made to having to pay fuel companies on time. She conceded that she paid them on time, but they had informed her that they would charge interest. [248]
So far as the rate of 2.5% per month, her evidence was that this was part of the terms and trading conditions from EC Credit Control which she purchased. [249] She acknowledged that the figure was higher than her overdraft account. [250] However, she stated that her intention was not to penalise the Defendant but rather, to secure payment. [251]
Ms Monaghan accepted that, as at 1 June 2006, on balances up to $150,000, the interest rate she was charged was 8.4% per annum. [252] For balances of over $150,000, the interest rate was 11.6% per annum. [253] Further she accepted that the rate of 11.6% per annum only applied to amounts in excess of $150,000. [254]
Ms Monaghan accepted that a similar position applied to all interest rates set out in her table in [12] of her affidavit of 16 February 2016. [255]

Legal principles

Lord Dunedin in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 at 86 - 88 stated:- "2. The essence of a penalty is a payment of money stipulated as in terrorem of the offending party; the essence of liquidated damages is a genuine covenanted pre-estimate of damage. 3. The question whether a sum stipulated is penalty or liquidated damages is a question of construction to be decided upon the terms and inherent circumstances of each particular contract, judged of as at the time of the making of the contract, not as at the time of the breach. 4. To assist this task of construction various tests have been suggested, which if applicable to the case under consideration may prove helpful, or even conclusive. Such are: (a) It will be held to be penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach. (b) It will be held to be a penalty if the breach consists only in not paying a sum of money, and the sum stipulated is a sum greater than the sum which ought to have been paid ... (c) There is a presumption (but no more) that it is penalty when 'a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others but trifling damage'. On the other hand: (d) It is no obstacle to the sum stipulated being a genuine pre-estimate of damage, that the consequences of the breach are such as to make precise pre-estimation almost an impossibility. On the contrary, that is just the situation when it is probable that pre-estimated damage was the true bargain between the parties. (citations omitted)"
The application of this test in Australia was considered most recently in Paciocco v Australia and New Zealand Banking Group Ltd. [256]
In Arab Bank Australia Ltd v Sayde Developments Pty Ltd, McDougall J at summarised the decision in Paciocco as follows:- [74] I turn to the decision in Paciocco. In that case, the High Court held by majority (French CJ, Kiefel, Gageler and Keane JJ) that a late payment fee imposed by the respondent bank on its credit card customers was not a penalty. Their Honours gave separate reasons: Kiefel J (with whom French CJ agreed on this point); Gageler J; and Keane J. The majority judgments paid close attention to the reasoning of Lord Dunedin in Dunlop. The following propositions emerge from the majority decision: (1) Lord Dunedin's propositions were not "rules of law", but "distillations of principle" (Gageler J at [143]; compare Kiefel J at [32] and Keane J at [260]). (2) The essence of a penalty is that it is a collateral stipulation, the (or a predominant) purpose of which is to punish the borrower for breach, and thus to compel performance (Kiefel J at [29]; Gageler J at [127], [159], [166]; Keane J at [254], [259], [273]). (3) One way of testing whether the impugned stipulation is penal - intended to punish - is to inquire whether the sum that it stipulates to be payable on breach (as I have indicated, the equitable origins and continuing equitable operation of the principle have no present relevance) is to ask whether the stipulated sum is extravagant or out of all proportion to, or unconscionable in comparison with, the maximum amount of damage that might be anticipated to follow from the breach (Kiefel J at [29], [54]; Gageler J at [158] to [162]; Keane J at [221]). (4) "Damage" in this sense is not limited to damages recoverable upon breach of contract, but may extend to damage, or losses, caused by the impairment of other legitimate commercial interests that were intended to be protected by the stipulation (Kiefel J at [33], [42] to [47]; Gageler J at [145], [160] to [162]; Keane J at [216], [283]). (5) The analysis is to be made at the time, and taking into account the circumstances applicable, when the contract was made; not at the time of breach; the analysis is prospective, not retrospective (or as is said in some judgments, is ex ante, not ex post) (Kiefel J at [62]; Gageler J at [169]). (6) Mere disproportion between the stipulated sum and the possible damage is not enough to indicate "penalty"; the disproportion must be such that it is unconscionable for the lender to rely on the stipulation (Kiefel J at [54], Gageler J at [164]; Keane J at [221], [240], [279]). [75] There are two remaining relevant points to be derived from the decision in Paciocco. The first is that the onus of proving that a contractual stipulation amounts to a penalty rests with the person asserting it. As Gageler J said in Paciocco at [167]: The customers bore the evidentiary and persuasive onus throughout that inquiry. [76] The second point relates to the "presumption" identified by Lord Dunedin in Dunlop at his point 4(c). That presumption is the subject of the first ground stated in the notice of contention. As Keane J said in Paciocco at [265], that presumption is "a weak one". Further, as Gageler J said at [168], the invariable nature of the penalty compared to the amount overdue or the length of delay, although it cannot be ignored, is "only weakly indicative of the character of the late payment fee as a punishment". [257]
The Defendants argued:- [26] The alleged provision for interest imposes a detriment on S & W Slade and gives an additional benefit to FJ & SM Monaghan (being the difference between the overdraft interest rate and interest at the rate of 30% per annum). That additional benefit is extravagant, out of proportion and exorbitant and unconscionable compared to the maximum loss likely to be suffered by FJ & SM Monaghan. [27] This was confirmed by the evidence given by Ms Monaghan during cross examination that the claimed interest rate of 2.5% would vastly exceed the amount of interest paid on the plaintiff's overdraft account and any loss suffered by the plaintiff as a result of any delay in payment by the first defendant. [258]
The Plaintiff submitted that the Defendants did not adduce any evidence capable of discharging the onus they bear in terms of the interest being a penalty. It argued that the range of considerations of relevance to determining whether a high rate of interest charged on an unsecured account were broader than simply the rate of credit that was available. [259]
The Plaintiff elaborated on this referring to the fact that: 1. Credit is being provided to a customer that admitted ongoing and serious cash flow difficulties (and the term requiring payment of interest is being imposed precisely because of a lengthy history of defaults); and 2. The credit provider (ie the Plaintiff) is itself subject to interest liabilities of comparable quantum to it suppliers;
The Plaintiff further elaborated:- … Your Honour sees there there is evidence that the plaintiff supplies imposed interest terms at significantly high rates, comparable rates to those provided by the interest term so that late payments to it placed it in peril of suffering similar consequences in terms of interest charges and the like. Your Honour also sees in this affidavit of Ms Monaghan's that at para 14 Ms Monaghan gives evidence that she had to inject her own funds into the business to allow it to remain operational during the period, in part because of the continuing late payment by Slades. It's also the case that if I'm sorry, your Honour, I'm just trying to remember if there's evidence about this your Honour would infer that if suppliers are not paid, suppliers may well stop supplying to Monaghans so that imperilling the cash flow of the business poses that risk which would be a material consideration in considering whether the interest term was a genuine pre estimate or was extravagant or unconscionable, and finally as I pointed to your Honour previously, the simple fact of the matter is it's now accepted that if you are providing credit to a credit risk, the imposition of a high rate of interest is not prima facie warrant characterisation of the terms of penalty, and that's the Arab Bank decision that I've referred to your Honour. There's no doubt here that Slades was absolutely in that category. [260]
In Yuwana Nominees Pty Ltd v Jason Ong & Anor, [261] Rein AJ considered the issue of what interest rate might constitute a penalty. Although the decision in predates those in Andrews v Australia and New Zealand Banking Group [262] and Paciocco v Australia and New Zealand Banking Group, [263] the decision is nevertheless instructive. His Honour adopted the passage of Wood CJ at CL in Guardian Mortgages v Miller (where there was an allegation that an interest rate of 12% per month, which rose to 14.5% per month on default, was a penalty):- The interest rate, although admittedly high, does not constitute of itself an unconscionable or unjust provision, in a case such as the present involving a commercial loan, where there was no unconscionable pressure, placed on the Defendant by the Plaintiff, to enter into the transaction. [264] Rein AJ went on to hold, similarly, that the requirement to pay interest at 4% per month was not a penalty. [265]
The Defendants also referred to the description used by the Plaintiff of the interest rate being a "penalty." [266] The Defendant submitted:- [28] It is also telling that even the letter dated 9 June 2006 refers to the alleged interest charges as being "interest rate penalties" and states "please ensure your account is paid in full monthly to avoid this penalty. [267]
In Clydebank Engineering & Shipbuilding Co Ltd v Don Jose Ramos Yzquierdo Y Castaned, [268] the impugned clause was:- "The penalty for later delivery shall be at the rate of £500 per week for each vessel"
In Clydebank, the fact that the clause was described as a "penalty" by its drafter was not dispositive and it remained necessary to engage with the language to determine whether the stipulated sum therein, was correctly characterised as a penalty. [269] This proposition has been endorsed in Australia, and most recently in the decision of Paciocco. [270]

Conclusion

I accept that the Defendants have not discharged the onus of establishing that the interest rate imposed was a penalty based simply by a comparison with the Plaintiff's overdraft costs. The clear evidence of Ms Monaghan is that she had to finance the delay in payment herself in part using her own funds and providing bank security. [271] The debt was not secured and it continue to climb. It posed a threat to her ability to maintain her business and supplies. The question has to be examined at the time of the charge being imposed not at the time of the breach. In all of the circumstances, I am not satisfied it constituted a penalty.

QUANTUM MERUIT

In the event I was in error in the determination of the Plaintiff's contractual claim to interest I would have allowed the Plaintiff's claim to interest based on the freestanding ability to claim interest in restitution. I accept the Plaintiff's argument that the permissibility of such a claim remains recognised in NSW for the reasons given by Ward J (as her Honour then was) in Lahoud v Lahoud. [272]
Expert evidence as to the calculation of the loss was presented by reports submitted on behalf of the Plaintiffs by Mr Hugo Charles Loneragan, [273] chartered accountant and the Defendants by Mr Bruce Kitson, [274] accountant. Mr Loneragan was required for cross-examination although Mr Kitson was not.
Despite claiming a larger amount [275] in oral submissions, the Plaintiff accepted that if the interest term is a penalty then it is enforceable to the extent there is proof of actual loss and the claim would be on the basis of the amounts identified by Mr Kitson. [276]
On the basis of 30 day payment terms, I would have found the amount to be $67,753.70 being the average figure deduced by him from the Plaintiff having to utilise its overdraft account for the period from 1 October 2006 to 30 June 2016 less the amount paid by the First Defendant in excess of the fuel of $10,349.80.

Arguments

The Plaintiff's argument was that the letter of 29 July 2008 constituted a valid guarantee by the Second and Third Defendants. The Plaintiff argued that by its terms the reference to fuel included interest and covered both past and future indebtedness bearing in mind that what was involved was a running account. [277] It argued that consideration was provided by the continued provision of the fuel account facility [278] and the guarantee was enforceable.
As noted earlier the Defendants contended that on its construction any guarantee related only to past fuel purchases, no consideration was provided and any guarantee was unenforceable.

Legal principles

In Fahey v MSD Speirs Ltd, [279] MSD Speirs supplied building materials to Fahey Construction Co Ltd and allowed for a discount for prompt payment. However, if an account was overdue for a certain period (three months), interest was applied at the rate of 1% per month. By December 1968, Fahey had eventually become liable for a sum of approximately $10,000 and was confronted by MSD Speirs. MSD Speirs declined to supply any further material unless the account was paid or security was provided. Mr Peter Fahey, director of the Applicant company, then signed a personal guarantee which included the following clause: I Peter T Fahey hereby guarantee to pay for any materials which are purchased from M S D Speirs Ltd by Fahey Construction Co Ltd in the event of Fahey Construction Co Ltd not being a position to do so.
MSD Speirs continued to supply Fahey Construction until May 1971. Fahey Construction went into liquidation, but contended that it had paid the requisite amount to discharge the principal debt. MSD Speirs sued to recover the interest owed under the guarantee.
On appeal to the Privy Council, Lord Morris endorsed the reasoning of the trial Judge and the NZ Court of Appeal:- … One of these [arguments] was that the guarantee did not extend to cover any such part of the amount claimed as consisted of an interest element. In their Lordships' view such a construction would put a meaning on the words of the guarantee which would be wholly divorced from business reality. What both parties undoubtedly had in mind was that the appellant was promising that in the event of the inability and failure of the Fahey company to pay, he (the appellant) would pay the amount which the Fahey company should have paid and had to pay for the materials which it purchased. The appellant knew fully and precisely the terms upon which the respondent would supply materials. The appellant himself, as was accepted, had agreed that "his" company would have to pay interest according to the arrangement made. What the Fahey company had "to pay for any materials" was the amount laid down according to the terms upon which purchases could be made. All the surrounding circumstances show that when the guarantee was signed both parties knew and had in mind the terms upon which supplies had been and were being purchased and the terms upon which future purchases of supplies would be made. They knew, therefore, what were the amounts that the Fahey company would have to pay for any materials which it purchased. Their Lordships are in agreement both with the learned Judge and with the Court of Appeal in rejecting the contention (emphasis supplied). [280]
In Yuwana Nominees Pty Ltd v Jason Ong & Anor, Rein AJ considered an analogous question and came to a similar view. [281]
As to the question of whether a guarantee covers past and future indebtedness the Privy Council in Fahey held in that case that "[the] matter must be resolved by construing the guarantee" [282] stating:- The next contention as to the construction of the guarantee related to the words "any materials which are purchased." As has been pointed out the amount owing by the Fahey company in respect of its purchases made before the date of the guarantee (2 December 1968) was $10,070.06. Did the guarantee apply to that indebtedness and to all future indebtednesses for materials purchased or did it apply only to the indebtednesses which were incurred after the date of the guarantee? On this question the conclusion of the learned Judge that the guarantee covered the company's indebtedness prior to the date of the guarantee was not shared by the Court of Appeal. Their Lordships think that this matter must be resolved by construing the guarantee. There is much to be said for the view that on the facts as found by the learned Judge it would have been reasonable for the respondent to require or to insist on having a guarantee which covered existing as well as future indebtedness and that it would have been only reasonable for the appellant to have given such a guarantee and so to avoid the risk that no further materials would be supplied until the account was cleared. Regard must be had, however, not to what might have been done or to what would have been reasonable but to what was actually done. Though the guarantee was not drawn professionally and appears to have been in a form drafted and written out by the appellant himself the respondent accepted it and cannot now alter it or improve its language. Giving to the language a fair and reasonable interpretation their Lordships consider, in agreement with the Court of Appeal, that the guarantee related to future purchases of materials (that is, to those made after the date of the guarantee). [283]

Conclusion

On my findings, the revised terms of supply were accepted by the First Defendant in 2006 and at the time, the debt included interest. Consistent with the approach taken by the Privy Council in Fahey, a construction of the reference to "fuel" that excluded interest would put a meaning on the document which would be divorced from the business reality which confronted the parties.
That question needs to be resolved first on the basis of the language used taking into account that the parties were not lawyers intending to record matters with the legal precision of skilled professionals. [284]
Whilst it may have been in the Plaintiff's interests to secure such a guarantee it is the language of the document that has to be examined. This cannot be altered or improved upon. In my view, the reference to "the debt" for "for fuel supplied" gives rise to no ambiguity and refers to past indebtedness.
Had I formed the view that the language was ambiguous, I would nevertheless have arrived at the same conclusion as it would be consistent with Mr O'Leary's evidence that he had sought from the Second and Third Defendants a guarantee for "the monies owing by [the First Defendant]" [285] and noting the Second Defendant's evidence to a similar effect. The past indebtedness was a significant amount at the time and it was open to the Plaintiff to take further action in light of any future circumstances should it have become necessary.
The Plaintiff accepted that no further payments were payable by the Second and Third Defendants unless the guarantee applied to past and future indebtedness. As such the Defendants argument that no consideration was provided for any guarantee does not require determination.
However had it been necessary to determine the matter, I would not have been inclined to accept the Defendant's contention. Mr O' Leary's unchallenged evidence was that he informed Mr Slade that supplies would cease unless the document he presented was signed. Ultimately a different document was presented by the Second Defendant. Thereafter, the First Defendant's account remained open. Accordingly, I am inclined to the view that the Plaintiff's forbearance of terminating the future credit on the account constituted consideration. [286]
It follows that the action against the Second and Third Defendants must fail.
In the circumstances, it is unnecessary to consider the Second and Third Defendants arguments as to the unenforceability of the guarantee. The Second and Third Defendants accepted that on the construction I have found this should be the case. [287] Should it have been necessary to decide the point however I would have accepted the Plaintiff's argument, the case for relief has not been made out, there being no basis to impugn the Plaintiff's conduct. [288]

IS THE CONTRACTUAL CLAIM STATUTE BARRED?

On 3 March 2016, I granted leave to the Plaintiff to file an Amended Statement of Claim reserving to the Defendants the opportunity to raise any limitation issue that may arise in recognition of the fact that it involved an expanded claim compared with the first Statement of Claim filed on 28 May 2013.
In their Defence to the Amended Statement of Claim, the Defendants pleaded that to the extent that the Plaintiff sought relief prior to 3 March 2010 that cause of action was statute barred including by virtue of s 14(1)(a) of the Limitation Act 1969 (NSW). [289] The Defendants maintained that in the first Statement of Claim filed on 28 May 2013 the Plaintiff only claimed interest in the period from 31 December 2009 and bearing in mind the terms of the leave granted it should not be permitted to claim any interest prior to 31 December 2009. [290]
The argument advanced was that in the first Statement of Claim the sum claimed totalled $402,208.35 and made no other claim other than a possible $3665.44 for the period prior to 30 November 2009. [291] Counsel for the Defendants summarised their argument orally as follows:- STEPHENSON: Putting to one side the $3,500 odd, the plaintiff's contention by way of statement of claim was that the amounts owing arose after 29 November 2009. Leave was given to file an amended statement of claim and with the exception of $100 the claim was still for $402,335 but it was reserved to the defendants to the right to raise any issues regarding the limitation period. As at the date of the filing of the amended statement of claim which was 3 March 2016, the plaintiff would not have been permitted to make any claim prior to 3 March 2010, being the date ten years prior to the amended statement of claim. In our submission in circumstances where the existing pleading only claimed interest in the period from 31 December 2009 and only claimed in respect of fuel from the period of 30 November 2009, they shouldn't be allowed to enlarge upon that by filing the amended statement of claim in circumstances where the amended statement of claim would only permit them to go back six years from the date of that filing. HIS HONOUR: Where is that outline in your submission? STEPHENSON: Paragraph 29 through to 33. Those limitation arguments also apply to the off contract quantum meruit claim. So we've made them in the context of the claim for 2.5% per month, but the arguments apply with equal force to the quantum meruit claim, so in relation to the quantum meruit claim for interest we say the plaintiff shouldn't be permitted to go back beyond 30 November 2009, but if you're not with us on that, in our submission there could be no basis to going back to 2006 in circumstances where the proceedings were commenced in 2013.
In cross-examination, Ms Monaghan was asked about her understanding of which amounts owing any credits she received would go to. Her response was as follows:- Q. What is your understanding as to which amounts owing those payments were to be applied? A. It would come off the last amount owing, like, you know, if it was in 90 to 120 days and I was given $10,000, it wouldn't come off the current bill, it'd come off the furthest part, the 120 the total owing it would come off the total owing off the total balance. And that's how the MYOB prints it out, if I put a payment in it just takes it off the furthest amount. Q. Is it your understanding that it would go off the oldest amount owing on the account or the latest amount owing on the account? A. The oldest amount on the account. [292]
She further conceded that, contrary to her affidavit at [106] of 12 May 2015, about not receiving payment from the Defendants since the commencement of proceedings, a sum of $5000 was paid to her lawyers or Professional Collections [293] and the statements show payment of $291.65 on 1 March 2013. [294]
In closing submissions, the Plaintiff argued that its debt was a single running account comprising interest and fuel charges combined. Accordingly it contended that any payment made by the First Defendant was confirmation of the whole debt by reason of s 54(2) of the 1969 Act. [295] In support of this contention it cited P Handford, Limitation of Actions at p 280, which was endorsed by Rein J in Conridge v Schaapveld. [296]
The Plaintiff argued that the First Defendant continued to make substantial payment to the fuel account until at least January 2011 when on its case the last charge on the fuel account was paid off. It maintained that that each payment constituted a confirmation of the debt comprising the balance of the account for the purposes of s 54(2) of the 1969 Act with the result that as at the filing of the Amended Statement of Claim on 3 March 2016 no limitation issue can arise. How the claim was characterised in the first Statement of Claim was in this sense argued to be irrelevant as the question was when did the debt arise and when did the limitation period commence. [297]
Counsel for the Defendants did not contest the principles pertaining to a running account but maintained that the First Defendant did not agree to pay interest and payments made were advanced only for fuel. [298]
I have found that the contractual agreement included the payment of interest. Having come to this view no argument was advanced that the account would not be a running account. The basis for the principle cited by the Plaintiff was explained by Buckley J in Re Footman Bower & Co Ltd as follows:- When, as in the present case, there is an account running between the parties which to the knowledge of both parties is of that kind and kept in that way, then, if the debtor makes a payment "generally on account" it appears to me that he must be taken to be making it on account generally of whatever is owing on the balance of the account. A payment "on account" imports an acknowledgment of a liability for a larger sum (see Friend v Young ([1897] 2 Ch at p 436), per Stirling J). When a payment is merely stated to be "on account" without the liability on account of which it is made being specified, one must first inquire what liabilities on the part of the payer to the recipient exist. If, on inquiry, it is found that the only liability is in respect of a balance due on current account, the natural conclusion to reach is, in my judgment, that the payment is made on account of that balance generally, not on account of any particular items contributing to that balance. Where, as may well have been the case as regards payments by the company to the applicant, a payment would, in accordance with the rule in Clayton's Case, be taken to discharge, say, three items on the debit side of the account entirely, and a fourth in part, it appears to me that it would be an abuse of language to describe the payment as made "on account" of those particular items. It would be still more fanciful, if at the date of payment the oldest outstanding debits were statute-barred. If (which has not yet, so far as I know, been decided) the inference that the debtor intended to appropriate the payment to non-statute-barred items to the exclusion of statute-barred items, is applicable in the case of a current account (the point left open by Lord Cranworth LC in Nash v Hodgson) an analysis of the account would be required before the particular item on account of which the debtor is to be supposed to have made the payment could be identified. [299]
Accepting this to be the case and the question of the last payment made by the First Defendant falling within the period of six years prior to the filing of the Amended Statement of Claim, it follows that the Defendants argument cannot be accepted and no limitation issue arises.

CROSS-CLAIM

The Defendants flied a cross-claim in which the First Defendant as First Cross-Claimant sought repayment of the sum of $10,349.80 "or such other sum as the Court may consider appropriate" in respect of the amount which was alleged to have been mistakenly overpaid for fuel supplied to it by the Plaintiff/Cross-Defendant.
In light of my conclusion as to the agreement to pay interest it follows that this claim cannot succeed.

DAMAGES

The parties accept that as at 30 April 2014 the total outstanding amount payable to the Plaintiff based on 2.5% interest form 1 July 2006 to 30 April 2014 is the $402,335.07. On this basis the amount of interest thereafter to date when combined would exceed the jurisdiction of this Court.
The Defendants have pleaded s 44(1)(a)(ii) of the District Court Act 1973 (NSW) and it follows that the Plaintiff's entitlement is restricted to the Court's jurisdictional limit of $750,000.
The Plaintiff accepts that if the guarantee applied only to fuel purchased prior to its date as I have found then no amount is owed by the Second and Third Defendants. [300]

ORDERS

For these reasons the orders of the Court are as follows: 1. Verdict and judgment for the Plaintiff against the First Defendant in the sum of $750,000; 2. Verdict for the Second and Third Defendants on the Plaintiff's claim; 3. Verdict for the Cross-Defendant on the Cross-Claimant's cross claim; and 4. I will hear from the parties as to costs.

Endnotes

T 1.19 - .21 (hearing commencing 24 February 2016)
T 19.22 - .25 (hearing commencing 24 February 2016)
T 29.40 - 30.20 (hearing commencing 24 February 2016)
T 39.25 - .34 (hearing commencing 24 February 2016)
T 73.48 - 74.8 (hearing commencing 24 February 2016)
Affidavit of Mrs Wendy Maree Slade, dated 24 August 2015 at [2]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [1] - [2]
Plaintiff's Written Submissions dated 16 February 2017 at [11]
Plaintiff's Written Submissions dated 16 February 2017 at [77] and T 191.47 - .49 (hearing commencing 13 February 2017)
Plaintiff's Written Submissions dated 16 February 2017 at [13]
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at Annexure B
Defendant's Written Submissions dated 16 February 2017 at [3]
Defendant's Written Submissions dated 16 February 2017 at [4]
In relation to a notice to produce for inspection
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [4] - [6]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [10]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [13]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [13]
T 40.37 - 41.3 (hearing commencing 13 February 2017)
T 41.1 - .3 (hearing commencing 13 February 2017)
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [17]
T 144.49 - 150.4 (hearing commencing 13 February 2017)
T 145.6 - .8 (hearing commencing 13 February 2017)
T 145.41 - .43 (hearing commencing 13 February 2017)
T 146.17 - .33 (hearing commencing 13 February 2017)
T 146.35 - .42 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [17]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM1 at p 16
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM2 at p 18
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [21]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [34]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [22] - [25]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [27] - [28]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [30]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [31]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [32]
T 161.33 - .36 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at pp 22 - 25
T 164.4 - .9 (hearing commencing 13 February 2017)
T 164.11 - .21 (hearing commencing 13 February 2017)
T 149.8 - .10 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [38]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [39]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [40]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at p 51
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [47] - [48]
T 32.35 - .41 (13 February 2017)
T 32.45 - .47 (13 February 2017)
T 33.4 - .10 (13 February 2017)
T 34.30 - .33 (13 February 2017)
T 41.10 - .20 (13 February 2017)
T 41.22 - .30 (13 February 2017)
T 42.23 - .25 (hearing commencing 13 February 2017)
T 42.14 - .17 (hearing commencing 13 February 2017)
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [14]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [16]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [17]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM4 at p 51
T 61.21 - .35 (hearing commencing 13 February 2017)
T 62.11 - .13 (hearing commencing 13 February 2017)
T 61.14 - .19 (13 February 2017)
T 62.26 - .28 (13 February 2017)
T 62.30 - .32 (13 February 2017)
T 62.34 - .41 (13 February 2017)
T 62.43 - .49 (13 February 2017)
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [21]
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [18] and [31]
T 148.38 - .40 (hearing commencing 13 February 2017)
T 148.45 - .46 (hearing commencing 13 February 2017)
T 148.48 - 149.2 (hearing commencing 13 February 2017)
T 161.43 - .45 (hearing commencing 13 February 2017)
T 162.23 - .44 (hearing commencing 13 February 2017)
T 151.3 - .31 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM4 at p 51
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM5 at p 54
T 30.42 - .45 (hearing commencing 13 February 2017)
T 30.46 - .50 (hearing commencing 13 February 2017)
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ-1, p 115
T 32.23 - .25 (hearing commencing 13 February 2017)
T 32.9 - .21 (hearing commencing 13 February 2017)
T 32.9 - .21 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [58] - [61]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [64] - [66]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [22], referred to in the Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM5
Defendant's Written Submissions dated 16 February 2017 at [10]
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [4] and Annexure A
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [4]
T 164.23 - .36 (hearing commencing 13 February 2017)
T 164.38 - .40 (hearing commencing 13 February 2017)
T 165.49 - 166.2 (hearing commencing 13 February 2017)
T 166.4 - .8 (hearing commencing 13 February 2017)
T 166.22 - .23 (hearing commencing 13 February 2017)
T 166.50 - 167.14 (hearing commencing 13 February 2017)
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [5]
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [6] and Annexure B
Affidavit of Stephen Garry Slade, dated 26 August 2015 at Exhibit B
T 35.1 - 36.3 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM11 at p 66
T 36.39 - .45 (hearing commencing 13 February 2017)
T 36.46 - .49 (hearing commencing 13 February 2017)
T 37.9 - .11 (hearing commencing 13 February 2017)
T 37.18 - 21 (hearing commencing 13 February 2017)
T 47.14 - .21 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [68] - [73]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [74]
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015, at Annexure B
T 63.22 - .32 (hearing commencing 13 February 2017)
T 63.41 - .50 (hearing commencing 13 February 2017)
T 64.16 - 39 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [89] - [90]
T 65.6 - .29 (hearing commencing 13 February 2017)
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [32]
T 66.16 - .18 (hearing commencing 13 February 2017)
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [37]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [38]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [39]
T 66.33 - .38 (hearing commencing 13 February 2017)
T 67.9 - .11 (hearing commencing 13 February 2017)
T 66.47 - 67.7 (hearing commencing 13 February 2017)
T 67.13 - .23 (hearing commencing 13 February 2017)
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [33]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [34] - [35]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [36]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at pp 20 - 49
T 147.37 - 148.9 (hearing commencing 13 February 2017)
T 148.11 - .12 (hearing commencing 13 February 2017)
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [8]
T 172.26 - 174.3 (hearing commencing 13 February 2017)
Affidavit of Mr Stephen Garry Slade, dated 26 August 2015 at [9.9] - [9.10] and Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [37]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [4] - [5]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM5 at p 54 and Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ-1; Tab 1at p 2
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [6]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [7] - [8]; Exhibit SMJ-1, Tab 2 at p 4
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [9] - [10]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [12]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [25] and [27]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [26]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015, Exhibit SMJ-1, Tab 9
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [32]
T 99.4 - .12 (hearing commencing 13 February 2017)
T 100.46 - .50 (hearing commencing 13 February 2017)
T 101.1 - .3 (hearing commencing 13 February 2017)
T 101.5 - .10 (hearing commencing 13 February 2017)
T101.12 - .13 (hearing commencing 13 February 2017)
T 101.15 - .17 (hearing commencing 13 February 2017)
T 101.19 - .25 (hearing commencing 13 February 2017)
T 102.15 - .18; and T 102.33 - .36 (hearing commencing 13 February 2017)
T 102.38 - .42 (hearing commencing 13 February 2017)
T 103.17 - .34 (hearing commencing 13 February 2017)
T 105.27 - .31 (hearing commencing 13 February 2017)
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ - 1, Tab 6 at pp 13 - 14
T 106.29 - 107.1 (hearing commencing 13 February 2017)
T 107.3 - .9 (hearing commencing 13 February 2017)
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Tab 9, pp 41 - 73
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [32]
T 27.31 - .33 (hearing commencing 13 February 2017)
T 27.39 - .41(hearing commencing 13 February 2017); see also Exhibit SMJ-1, Tab 9, at p 54
T 27.39 ( hearing commencing 13 February 2017)
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ-1, Tab 9 at pp 32 - 33
T 17.40 - .48 (hearing commencing 13 February 2017)
T 17.50 - 18.2 (hearing commencing 13 February 2017)
Affidavit of Mr Peter John Wood, dated 14 February 2017 at [4]
T 135.48 - 136.1 (hearing commencing 13 February 2017)
T 135.48 - 136.5 (hearing commencing 13 February 2017)
T 136.11 - .14 (hearing commencing 13 February 2017)
T 136.16 - 137.38 (hearing commencing 13 February 2017)
T 136.32 (hearing commencing 13 February 2017)
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ-1, Tab 9 at p 35
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at p 42
T 21.44 - 22.1 (hearing commencing 13 February 2017)
T 22.1 - .10 (hearing commencing 13 February 2017)
T 23.26 - .27 (hearing commencing 13 February 2017)
T 25.4 - .18 (hearing commencing 13 February 2017)
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ-1, Tab 9 at pp 37 and 54 and Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at p 47
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [75] - [76]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [43]
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [44] - [45]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM7 at p 57
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM7 at p 58
T 180.12 - .15 (hearing commencing 13 February 2017)
T 180.43 - .45 (hearing commencing 13 February 2017)
Affidavit of Mrs Wendy Maree Slade, dated 24 August 2015 at [2]
Affidavit of Mr Stephen Garry Slade, dated 30 June 2016 at [3] - [4]
Affidavit of Mr Stephen Garry Slade, dated 30 June 2016 at [4]
Affidavit of Mr Stephen Garry Slade, dated 30 June 2016 at [5]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [87]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [96] and Exhibit WM8 at p 60
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [98] and Exhibit WM9 at p 62
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [99] and Exhibit WM10 at p 64
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [100] and Exhibit WM11 at p 66
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM11 at p 66
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [9] and Annexure C
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [10] and Annexure D
Affidavit of Mr Stephen Garry Slade, dated 10 September 2015 at [11]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM9 at p 62
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at p 47
T 123.1 - .10 (hearing commencing 13 February 2017)
T 123.20 - .26 (hearing commencing 13 February 2017)
T 123.28 - .39 (hearing commencing 13 February 2017)
T 124.31 - .36 (hearing commencing 13 February 2017)
T 125.1 - .4 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM12 at p 68 and T 126.5 - .23 (hearing commencing 13 February 2017)
T 132.24 - .25 (hearing commencing 13 February 2017)
T 132.46 - .48 (hearing commencing 13 February 2017)
T 133.20 - .26 (hearing commencing 13 February 2017)
T 133.34 - .36 (hearing commencing 13 February 2017)
T 133.40 - .42 (hearing commencing 13 February 2017)
See Judgment of 14 February 2017 and Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ-1, Tab 6 at pp 13 - 14
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [101] - [103]; at Exhibit WM12 at p 68
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [105]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ-1, Tab 9 at pp 41 - 54
T 134.46 - .49 (hearing commencing 13 February 2017)
T 185.7 - .24 (hearing commencing 13 February 2017)
T 46.50 - 47.5 (hearing commencing 13 February 2017)
T 47.7 - .9 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [23]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [27] and T 47.11 - .12 (hearing commencing 13 February 2017)
T149.33 - .35 (hearing commencing 13 February 2017)
T 149.37 - .49 (hearing commencing 13 February 2017)
T 159.43 - 160.27 (hearing commencing 13 February 2017)
T 160.29 - .48 (hearing commencing 13 February 2017)
(1988) 14 NSWLR 523
(1988) 14 NSWLR 523, 535 (McHugh JA with whom Samuels JA agreed)
(1988) 14 NSWLR 523, 528 (Kirby P)
(1988) 14 NSWLR 523, 530 (Kirby P)
(2001) 53 NSWLR 153; [2001] NSWCA 61
(2001) 53 NSWLR 153; [2001] NSWCA 61 at [80] (Heydon JA)
(2001) 53 NSWLR 153; [2001] NSWCA 61 at [81] - [82] (Heydon JA)
(2001) 53 NSWLR 153; [2001] NSWCA 61 at [85] (Heydon JA)
Tak-Wong Wong & Anor v Mura [2001] NSWCA 366 at [25] - [26] (Fitzgerald AJA with whom Priestley JA and Rolfe AJA agreed); and Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 at [7] - [9] (Macfarlan JA with whom Beazley JA and Handley AJA agreed)
(1988) 5 BPR 97326 at 11,117 (McHugh JA)
(2001) 53 NSWLR 153; [2001] NSWCA 61 at [77] (Heydon JA)
(2016) 91 NSWLR 414; [2016] NSWCA 46 at [85] (Beazley P with whom MacFarlan and Gleeson JJA agreed)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at p 23
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at p 28
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at Exhibit SMJ-1, Tab 11 at p 115
(Unreported, Federal Court of Australia, Tamberlin J, 29 June 1995) at 122 - 123 (in a passage cited with approval by the High Court when it upheld his Honour's decision: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599; [1999] HCA 15 at [15])
(2011) 297 ALR 56; [2011] FCA 1123 at [48] (Emmett J)
Luxton v Vines (1952) 85 CLR 352; [1952] HCA 19
T 193.28 - .35 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at p 51
Defendant's Written Submissions dated 16 February 2017 at [15]
Affidavit of Ms Susan Maree Johnson, dated 24 August 2015 at [31]
Defendant's Written Submissions dated 16 February 2017 at [21]citing Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30 at [10]
Affidavit of Ms Wendy Monaghan, dated 16 February 2016 at [6] - [9]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [9] - [12]
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [14]
T 45.16 - .36 (hearing commencing 13 February 2017)
T 47.38 - .46 (hearing commencing 13 February 2017)
T 47.29 - .30 (hearing commencing 13 February 2017)
T 48.20 - .23 (hearing commencing 13 February 2017)
T 51.39 - .42 (hearing commencing 13 February 2017)
T 51.44 - .45 (hearing commencing 13 February 2017)
T 51.47 - .49 (hearing commencing 13 February 2017)
T 52.1 - .11 (hearing commencing 13 February 2017)
[2016] HCA 28
[2016] NSWCA 328 at [74] - [76] (McDougall J with whom Gleeson JA and Sackville AJA agreed)
This was restated in the Defendants' oral submissions at T 216.7-.19 (hearing commencing 13 February 2017)
Plaintiff's Written Submissions dated 16 February 2017 at [47]
T 207.34 - 208.3 (from hearing commencing 13 February 2017)
[2008] NSWSC 156
(2012) 247 CLR 205; [2012] HCA 30
[2016] HCA 28
[2004] NSWSC 1236 at [104] (Wood CJ at CL)
[2008] NSWSC 156 at [46] (Rein AJ)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM5 at p 54 and the words: "So please ensure your account is paid in full monthly to avoid this penalty"
Defendant's Written Submissions dated 16 February 2017 at [28]
[1905] AC 6
[1905] AC 6 at [11] and [20]
[2016] HCA 28 at [46] (Kiefel CJ with whom French CJ agreed)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [26] - [28] and [37] and Exhibit WM5 at p 54
[2010] NSWSC 1297 at [149] where Ward J adopted the principles referred to by Mason P (with which Beazley JA and Ipp AJA agreed) in Heydon v NRMA and Ors (No 2) (2001) 53 NSWLR 600; [2001] NSWCA 445
Affidavit of Mr Hugo Charles Loneragan, dated 10 February 2017
Affidavit of Mr Bruce Douglas Kitson, dated 30 January 2017; and Exhibits 1 and 2
Plaintiff's Written Submissions dated 16 February 2017 at [51]
T 208.10 - .12 (hearing commencing 13 February 2017)
T 230.39 - .46 (hearing commencing 13 February 2017)
T 231.31 - .37 (hearing commencing 13 February 2017)
[1975] 1 NZLR 240; see also: Wayne Courtney, John Phillips and James O'Donovan, The Modern Contract of Guarantee (Sweet & Maxwell, 3rd ed, 2016) 302 - 305 at [5-075] - [5-083]
[1975] 1 NZLR 240, 243 (Lord Morris)
[2008] NSWSC 156 at [36] - [38] and [42] (Rein AJ)
Wayne Courtney, John Phillips and James O'Donovan, The Modern Contract of Guarantee (Sweet & Maxwell, 3rd ed, 2016) 280 - 284 at [5-018] - [5-029]
[1975] 1 NZLR 240, 243 - 244 (Lord Morris)
[2008] NSWSC 156 at [36] (Rein AJ)
Affidavit of Mr Paul William O'Leary, dated 12 May 2015 at [42]
Wayne Courtney, John Phillips and James O'Donovan, The Modern Contract of Guarantee (Sweet & Maxwell, 3rd ed, 2016) 80 - 84 at [2-076] - [2-087]
T 234.29 - .30 (hearing commencing 13 February 2017) and Defendant's Written Submissions dated 16 February 2017 at [70] - [77]
T 233.50 - 223.27 (hearing commencing 13 February 2017). Although Ms Monaghan had a different understanding; see Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at [77], and [80] - [83] (note that [81] was subject to a limitation under s 136 of the Evidence Act 1995 (NSW))
Hereinafter referred to as the "1969 Act"
Defence to Amended Statement of Claim, filed on 25 August 2016 at [48]
Defendant's Written Submissions dated 16 February 2017 at [29]
T 44.1 - .11 (hearing commencing 13 February 2017)
T 45.41 - 49 (hearing commencing 13 February 2017)
Affidavit of Ms Wendy Monaghan, dated 12 May 2015 at Exhibit WM3 at p 49
Plaintiff's Written Submissions dated 16 February 2017 at [68] - [76]; and T 209.23 - 210.19 (hearing commencing 13 February 2017)
[2015] NSWSC 663 at [61] (Rein J)
T 229.15 - .20 (hearing commencing 13 February 2017)
Defendant's Written Submissions dated 16 February 2017 at [40]
[1961] 2 All ER 161, 165 (Buckley J) which was cited with approval in Santos Coffee Co Pty Ltd v Direct Freight Express Pty Ltd [2010] NSWCA 14 at [42] (Allsop P, Giles JA and Handley AJA)
T 233.1 - .3 (hearing commencing 13 February 2017)

Amendments 11 July 2017 - Amended title: (No 1) 06 October 2017 - [2] "By in large" corrected to: "By and large" [12] "The Plaintiff's gain" corrected to: "The First Defendant's gain" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 October 2017

Trade Practices Act 1974(Cth)s 87

District Court Act 1973(NSW)s 44(1)(a)(i)

Limitation Act 1969(NSW)ss 14(1)(a)

FJ & SM Monaghan Pty Ltd v S & W Slade Pty Ltd & Ors

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