Paperlinx Australia Pty Limited v Edwards

Background

1. Some reference to the dealings between the parties is necessary to understand the context of the signed guarantee. The nuances in this case favour completeness over brevity.
2. Mr Edwards was a long-time customer of Paperlinx and its predecessor companies. In the period up to May 2011, his account was managed by Elizabeth Allwood, who was the joint National Credit Manager of Paperlinx as also was Luigi Caldararo. Good Impressions' allowable credit limit, current balance, and compliance with the 90 days term on which credit was provided, were regular topics of email correspondence between Ms Allwood and Mr Edwards for a number of years.
3. The question of a guarantee first arose in early 2010. On about 18 February 2010 Mr Winters and Ms Allwood discussed with Mr Edwards the possibility of Mr Edwards and his wife providing a personal guarantee. At that stage Good Impressions had a credit limit with Dalton, a subsidiary of Paperlinx, of $350,000 and a debit balance of about $235,000.
4. In August 2010, Ms Allwood notified Mr Edwards that the credit limit needed to be reduced to $250,000. A debit balance under $250,000 was achieved by late October 2010. In the course of email correspondence with Mr Winters, Mr Edwards on 28 October 2010 wrote: "I am still willing to have a time and value limited personal guarantee. It needs to have the instructing solicitor understand that it is not open ended."
5. In around early November 2010, Ms Allwood provided to Mr Edwards a guarantee and indemnity document. It stated: "Please find attached our PPX guarantee doc which you will need to review with your solicitor. Discussed with our legal counsel who suggest adding a clause 17 along the lines of: notwithstanding any other clause in this document each party acknowledges the maximum credit limit is capped at $750,000 and terms of 90 days. This is our suggest document. Could you please review and obtain independent advice. Look forward to hearing from you soon. Kind Regards Liz".
6. Mr Edwards sought legal advice from Paul Mattick. Mr Mattick gave advice by email dated 10 November 2010 to Mr Edwards in the following terms: "Peter I have read the Guarantee and it appears relatively standard. I direct your attention to Clause 14 - which is a charging clause and attempts to charge personal and real estate with the guaranteed debt. If you want to give no security it would need to be deleted. Also [to] achieve your objective of a limit and a sunset clause you would need to add the following: 1. Notwithstanding any other provision of this Deed the Guarantors liability under this Guarantee and Indemnity is limited to $500,000.00 in total in respect of all claims or demands hereunder and the maximum amount the Guarantor shall be required to pay Paperlinx in respect of all claims and demands under this Guarantee shall be $500,000.00 in total. 2. This Guarantee ends on the 30th June 2012 and as and from that date the Guarantor shall be released from this Guarantee notwithstanding any claim may have been made prior to that date and such claim has not been paid. I might have to tidy up the wording but [this is] the gist of what you want. Paul".
7. The following day Mr Edwards sent this email to Ms Allwood, stating: "I will leave clause 14 alone as you need some comfort with the security. Do the additional two clauses suit you?"
8. Ms Allwood ambiguously replied on 12 November 2010: "Hi Peter, Thank you for this, we will review and get back to you soon. Could you please forward the completed personal guarantee."
9. The absence of evidence to the contrary indicates that the two additional clauses were not accepted by Paperlinx, and Mr Edwards did not forward the completed personal guarantee. Good Impressions was at this stage failing to make payments within 90 days of the end of month due date.
10. By 18 November 2010, Mr Edwards was seeking a credit limit of $400,000. He wrote to Ms Allwood, suggesting: "If I provide Paperlinx with a guarantee for the $400K we can have that limit and 90 days."
11. Ms Allwood responded referring to the need for a "fixed charge over an asset" in order to "increase credit limit…beyond 250k". Ms Allwood also indicated a "bank guarantee…may be a better option…in the new year".
12. In the period from December 2010 through to April 2011, Good Impressions appeared to trade largely within its trading terms. As at 10 May 2011 the credit limit was $250,000.
13. Ms Allwood ceased working for Paperlinx on 13 May 2011. Mr Caldararo continued as the sole National Credit Manager, and he became responsible for managing the Good Impressions account.
14. Paperlinx had an insurance policy covering delinquent debtors. On 17 June 2011 Paperlinx was notified by its insurer that no protection was offered in respect of the Good Impressions account.
15. On 17 June 2011 Mr Winters and Mr Edwards had a discussion concerning the guarantee. Mr Winters asserts that Mr Edwards said, "I have given you guys a guarantee" whereas Mr Edwards' evidence is that he said: "I have previously offered to give you a limited guarantee, but my offer was not accepted. I am still prepared to offer you a guarantee with limitations". According to Mr Edwards, Mr Winters asked for "a look at the document she [Ms Allwood] sent you."
16. This difference in recollection may be due to Mr Edwards referring to a "guarantee" when speaking of the unsigned document, whereas Mr Winters assumed it was a reference to an executed guarantee. In any event, I prefer the recollection of Mr Edwards because, in response to Mr Winters' request for a copy Mr Edwards made no reference to a signed document and forwarded on 17 June 2011 the unsigned form of guarantee attached to an email stating: "Hi Ian, This was the guarantee that was sent. It was to be limited by time and value. Cheers, Peter".
17. The attached unexecuted guarantee included a year date of 2010 and Peter Bruce Edwards appeared as the sole name under the heading "The Guarantors". The reference to "that was sent" has some ambiguity as the sender is not identified.
18. Mr Winters deposed that he then engaged in a search for the executed guarantee notwithstanding that the email contained no suggestion of an executed guarantee. On the same date, 17 November 2011, Mr Edwards sent Mr Winters an email which included the words of the early November 2010 email from Ms Allwood providing the draft guarantee (quoted above in [10]).
19. Mr Winters spoke to the National Credit Manager, Mr Caldararo. As a result, Mr Caldararo also searched, unsuccessfully, for an executed guarantee. The emails between Mr Winters and Mr Caldararo indicate that Mr Winters suggested that the (draft) guarantee could be modified so that the "cap" is "reduced to say $400,000". Mr Caldararo responded, "[W]e can make the adjustments and get the document signed again".
20. The search by Mr Winters and Mr Caldararo for the limited guarantee may provide some support for a finding that they were willing to accept a limited guarantee.
21. Mr Caldararo forwarded to Mr Winters a copy of a charge given by Good Impressions in favour of Mr Edwards and his wife in 2006, and a credit report dated 17 June 2011. Mr Winters and Mr Caldararo discussed options to obtain some security in respect of the Good Impressions debt.
22. Mr Winters deposed that in late June 2011 he believed that there was a guarantee in place. This is difficult to accept. Both he and Mr Caldararo had searched unsuccessfully for one, Mr Edwards had sent him the unsigned draft, and on 29 June 2011 Mr Winters was explaining to Mr Caldararo other possibilities for security, such as revisiting the issue with the insurer, obtaining a charge over the building site owned by Mr Edwards, or obtaining from Mr Edwards some net proceeds from the sale of an individual unit. Mr Edwards had said nothing to indicate the existence of a signed guarantee.
23. On 1 July 2011 Mr Winters and Mr Caldararo agreed to put Good Impressions on a "2 for 1 COD" whereby Good Impressions would only receive supply by paying in advance for the delivery and also paying the same amount in reduction of the debt. Mr Winters informed Mr Edwards of this proposal and advised him that Paperlinx would need some security over assets before it would trade on a normal account with Good Impressions. On 7 July 2011 the "2 for 1 COD" arrangement was reluctantly accepted by Mr Edwards. Mr Winters agreed that the arrangement would be reviewed once Paperlinx received 2011 financials from Good Impressions. This COD arrangement operated in July, August and early September 2011.
24. By 18 August 2011 the 2011 financials for Good Impressions were provided to Mr Winters, who forwarded them to Mr Caldararo. They indicated net losses in 2009 and 2010, and a negative equity. On 25 August 2011 Mr Edwards in an email to Mr Winters stated, "As you have predicted this [COD arrangement] will kill the business if it continues." On 30 August 2011 Mr Edwards provided Mr Winters with the 2010 financials for his family trust and for the company which owned the premises. Together these showed a substantial positive net asset position.

Critical factual matters

1. The crucial matter in dispute occurred in early to mid-September 2011. At this stage Mr Edwards' financial circumstances indicate that he might have been inclined to press for an option such as a guarantee in order to continue trading. But Paperlinx also had a similar incentive, to preserve a customer and recover existing debt. These matters provide little guidance as to who raised the issue of a guarantee.
2. Mr Edwards says the matter of the guarantee was not raised until Mr Winters visited Good Impressions' offices on 12 September 2011 and on that occasion Mr Winters raised the issue. That account is given later in this judgment.
3. Mr Winters' account, denied by Mr Edwards, is different. He says that a few days prior to 12 September 2011 he had a conversation with Mr Edwards to the following effect: "I said: 'Peter, the bottom line is that we have no insurance cover on the account, no security over assets and you are overdue. We are already heavily exposed and do not want to get back into that position.' Edwards said: 'Well, can we revisit the guarantee issue?' I said: 'But we've been through that issue with you before and you insist on the guarantee being limited.' Edwards said: 'I don't care about a limit anymore, as I know I will trade out of the problem. If I give you an unlimited guarantee, can you open up the credit again for us?' I said: 'I will run it by head office and see what they say.'"

1. Mr Winter says he then spoke to Mr Caldararo in these terms: "I said: 'Lou. Edwards has just offered to give me another guarantee if he can get Good Impressions back on credit terms. I have told him I don't want any limits on it and he is OK with that. I think it is a good option, given that we can't find the other guarantee.' Mr Caldararo said: 'Yes, that is a good option. Do we think he is good for the money if we have to chase him?' I said: 'Yes, I think he is. With the change in structure that they are talking about happening soon, I think it will just help them trade out the old company and then move into the new one'. Mr Caldararo said: 'OK, but I want the account to be on very strict terms. If they default on payments due, the account goes straight back on hold' I said: 'OK'".

1. Apart from an immaterial difference - one sentence of this conversation - Mr Caldararo deposes to precisely the same recollection, notwithstanding that the conversation occurred three years previously. No contemporaneous notes or other documentary material provided evidentiary support for the conversation.
2. Mr Winters deposes that he then spoke to Mr Edwards as follows: "I said: 'Peter, I've spoken to Lou (Mr Caldararo) in Melbourne and provided you given [sic] another guarantee, this time with no limits, we will put Good Impressions back on credit terms.' Edwards said: 'That's great. Can you get the document ready and I will sign it.' I said: 'I can get it done, no problems, but Lou (Mr Caldararo) wants me to stress that you are on strict 90 days and if the account outside of that, we will be suspending the account again.' Edwards said: 'That's fine. Let's get it done so I can put these orders through.' I said: 'OK, I'll get Lou (Mr Caldararo) to send me the documents and I will drop them off at your office for you to sign and return. And don't forget to get independent legal advice.' Edwards said: 'Yep, no worries. What will you do with the other guarantee?' I said: 'What? The old one? The new one will take over because there are no limits on it. Do you want me to get it back to you?' Edwards said: 'Well, if this one takes over, then I don't really need it back, then.' I said: 'No, I wouldn't have thought so. The new one will be in place once you sign it so the old one doesn't matter.' Edwards said: 'Yeah, you're right. No need to get it back to me, just destroy the old one'. I said: 'OK, I will tear it up.'"

1. Mr Edwards denied this conversation occurred.
2. Again, no contemporaneous emails or other notes corroborate this conversation.
3. Mr Caldararo deposes that following the conversation with Mr Winters recounted above Mr Caldararo prepared a guarantee document and forwarded it to Mr Winters in the overnight post for him to arrange execution with Mr Edwards.
4. Mr Winters deposes that sometime before 12 September 2011 he was given a blank guarantee document by Mr Caldararo, which he personally delivered to Good Impressions' reception.
5. No copy of the draft guarantee document was annexed or exhibited to the affidavits of either Mr Winters or Mr Caldararo. A call for the draft guarantee prepared by Mr Caldararo was made during the trial, and a draft guarantee was produced. It listed "Peter Bruce Edwards and Lynn Frances Edwards" as the guarantors and a year date of 2010. As neither party claimed that any reference was made in November 2011 to Mrs Edwards being a party, and as the draft was allegedly created in November 2011 not 2010, and as the draft is different to the guarantee signed on 12 November 2011 by Mr Edwards (by reason of the reference to Mrs Edwards), I do not accept it as a draft guarantee created by Mr Caldararo in November 2011.
6. The non-production of the draft guarantee allegedly prepared by Mr Caldararo leads to the inference that no draft was created by him, and that Mr Caldararo's and Mr Winters' accounts of the draft being created are mistaken. This is a matter that impacts adversely on their credit. Their credit is not improved by having, after three years and without contemporaneous notes, a near identical recollection of a conversation about preparing the draft guarantee.
7. According to Mr Edwards, on 12 September 2011 Mr Winters attended the offices of Good Impressions and they had the following conversation: "On 12 September 2011, Mr Winters attended [Good Impressions'] offices and we had a conversation in words to the effect: Mr Winters: 'If we-revisit the guarantee, I can use it to try and get your credit terms re-instated. If you sign the form Liz Allwood gave you, I will take it and a copy of the limiting conditions you wanted to Melbourne to support the application. Once approved I will get it all incorporated into a new form, I will get it signed and bring it back for you to sign. While we wait for Melbourne's approval, I will allow your orders to be supplied and it can start from today if you give me the signed form. Me: 'I will sign it and here [are] the terms my solicitor wanted included. Please make sure they are included.' I then signed and dated the guarantee and provided Mr Winters with the copy of the email from Paul Mattick dated 10 November 2010 marked 'PBE2' hereto."
8. Mr Edwards continued: "Mr Winters then arranged for [Good Impressions'] orders to be supplied throughout September however on or about 5 October 2011, I received a telephone call from Mr Winters: Mr Winters: 'Melbourne won't accept the guarantee, therefore I can't re-instate your credit. Credit is withdrawn. Do you want me to send back the guarantee, or do you trust me to destroy it?' Me: 'I trust you to destroy it.' [Good Impressions] received no further credit from the Plaintiff, though it continued to purchase paper from other suppliers including Spicers on a COD basis through until an Administrator was appointed to [Good Impressions] on about 5 March 2012. The first I became aware the Plaintiff claimed to have retained the guarantee and asserted its intention to rely upon it was when I received notice that a caveat had been lodged against the title to my home by the Plaintiff in late March 2012 and I immediately instructed solicitors."
9. Mr Winters deposed that he has no specific recollection but believed he received a telephone call from Mr Edwards on about 12 September 2011 informing him that the guarantee document was ready for collection, and he thereafter collected it from Good Impressions' reception. It can be noted that Mr Winters' recollection of the previous conversation (at [35] above) indicated that it was for Mr Edwards "to sign and return" the guarantee.
10. On the other hand, Mr Winters asserted that certain things were not referred to "[d]uring the course of the discussion on or about 12 September 2011". Mr Winters also deposed that: "On or about 12th September 2011, the Defendant agreed to and did execute an unlimited guarantee and in the course of so agreeing said to me the words that are recorded in paragraph 58 of this affidavit" and refers to: "in particular the discussion on or about 12th September 2011 where it was agreed to allow Good Impressions to trade on credit terms again, were explicit insofar as the guarantee was to be unlimited." The words in paragraph 58 of Mr Winters' affidavit are quoted above at [35].
11. Thus, Mr Winters' affidavit is inconsistent. On the one hand, he deposes to a conversation occurring some days prior to 12 September 2011, with the preparation of the draft guarantee occurring after the conversation but before 12 September 2011. Yet he also says that the conversation, the signing of the guarantee, and the restoration of credit terms all occurred on (or about) 12 September 2011. These matters cast doubt upon Mr Winters' version of events and conversations.
12. Mr Caldararo said he received a copy of the guarantee document executed by Mr Edwards, and he then removed the suspension on the Good Impressions trading account so Good Impressions could place orders. If the signed guarantee was sent on 12 September 2011 to Mr Caldararo in Melbourne in the same way as the draft was said by Mr Caldararo and Mr Winters to have arrived - namely, in the Paperlinx overnight bag - then Mr Caldararo could not have received the executed guarantee on 12 September 2011 when the suspension of credit was lifted.
13. The original of the guarantee was not in evidence.
14. It is common ground that the provision of credit by Paperlinx to Good Impressions ceased on 7 July 2011 and recommenced on 12 September 2011. The supply of goods on 12 September 2011 is consistent with Mr Edwards' account of the conversation on 12 September 2011. Mr Winters' account makes no reference to what he did with the guarantee, how Mr Caldararo received a copy or by what precise means credit again became available to Good Impressions.
15. Goods were supplied in September 2011 on 12, 15, 16, 19, 20, 21, 22, 23, 26, 27, 29 and 30 September 2011.
16. On Friday, 30 September 2011 the June debt remained unpaid. Mr Edwards sent an email to Mr Winters and Mr Caldararo referring to cash flow problems arising from the previous COD arrangement and asking: "It would help if we could continue trading…I will be back on deck on the 5th. If you need to place the account on hold just let me know. Either way I will pay it down as quickly as I can."
17. Mr Winters responded: "As the account is over 90 days - I don't have much choice but to place it on hold on Tuesday - are you able to pay anything? I will talk to you on Wednesday". Credit was suspended on Tuesday, 4 October 2011 after the long weekend. Mr Edwards gives an account of what was said at that conversation "on Wednesday", set out in [43] above. Mr Winters makes no reference to it.
18. No further orders were placed on credit. On 26 October 2011 Mr Edwards sent an email to Mr Winters and Mr Caldararo seeking to explain Good Impressions' liquidity problems. The email ends with the comment, "I can only reassure you that we will sell our property rather than dud the creditors", a comment that might indicate an ignorance of an existing operative personal guarantee.
19. An email on 29 November 2011 was in a similar vein. Mr Edwards wrote: "I am not asking for an extension of credit or future trading and I am willing to sell assets to pay this debt. I am the first ranked secured creditor and I would rather pay this debt than be forced into administration or insolvency where creditors will suffer significant loss. I do have significant property assets which I am willing to sell and I will pay the debt as quickly as I can manage. The lack of continued supply has been a problem in the ongoing operation of the business. I have openly provided both the business and personal accounts. I cannot give you a firm payment plan as our customer base has changed significantly from a few large mail house companies (with reliable payment) to a large number of smaller accounts with variable payment patterns. I am aware of the significant pressure that both you and Ian will be under to have this resolved and I am sorry that I have caused this problem."
20. At this stage, the June, July and September 2011 invoices issued by Paperlinx to Good Impressions remained unpaid. Mr Winters reminded Mr Edwards of this in an email which referred to the need for interest based on the terms and conditions of trade and concluded: "5.6(b) - the seller is entitled to charge interest at the penalty rate (as gazetted from time to time) on all overdue amounts (including late payment charges and amounts other than the price), calculated daily on all monies due but unpaid, such interest charge to be computed from the due date. Payments received from the Buyer will be credited first against any interest charge and such charges will be payable on demand. So there are two options we can take - either we reach an agreement between both parties or I pass it through our debt collection agency, but either way I need to recover the costs involved in having this money outstanding and ultimately see the debt paid in full." Mr Edwards affirmed in an email dated 8 December 2011 that he would pay interest on the overdue amount.
21. No reference to the guarantee was made in any of the emails.
22. Paragraph 39(v)(iii) of the defence to amended statement of claim refers to an offer by Mr Winters to return or destroy the executed guarantee at the time of cessation of credit. Mr Winters accepts that he said this, and agreed to tear it up but says the conversation occurred before the 12 September 2011 guarantee was signed and was a reference to the earlier guarantee which he had been unable to locate. But this guarantee did not exist; it had not been located in Mr Winters' office or in the Melbourne head office, notwithstanding searches, and Mr Winters' conduct after those searches indicates that he did not then believe it existed.
23. The conversation about the destruction of the guarantee sits more comfortably with Mr Edwards' account quoted earlier that Mr Winters offered on 5 October 2011 to return or destroy the signed guarantee. On Mr Edwards' account, credit was put on hold on 4 October 2011 when the June invoices were not paid, but credit was withdrawn, not to be reinstated, on 5 October 2011 when the signed guarantee with the accompanying limitations was rejected.
24. On 26 March 2012 Mr Edwards sent an email to Mr Caldararo, copied to Mr Mattick and Mr Winters, referring to a "Caveat notice" and stating: "I have on two occasions offered personal guarantees to the PaperlinX group and on both occasions they were turned down. Liz Allwood supplied me with your standard documentation and I had my solicitor review the documentation. You can check your records, however the correspondence clearly covers a limit by time, amount and with Clause 14 to be excluded. At that time the guarantee did not proceed. Last year Ian Winters and I also spoke about providing a guarantee with the same conditions. This also did not proceed and Ian asked if I required the original documentation back and I responded that I was content for him to destroy the documentation. It was not sent to my solicitor which was a requirement." The email also said: "2 Ian will not perjure himself and he assured me the document I signed for him had been destroyed. 3 If it is the document I signed for Liz my [solicitor's] requirement for the specific removal of clause 14 is on record". Neither party asserted at trial that there existed a guarantee that Mr Edwards "signed for Liz" notwithstanding Mr Winters' earlier belief that one existed.
25. On 28 May 2012 Mr Winters sent an email to Mr Caldararo in regards to the question of destroying the guarantee. He stated: "In reference to the destroying the document when we placed the account back on hold - I did ask if he would like a document returned but I believe I was referring to the previous personal guarantee that we held that had been arranged by Liz Allwood, the problem is that I cannot be 100% certain that this is what we discussed". This email indicates that the discussion concerning the destruction of the guarantee occurred "when we placed the account back on hold", which occurred early October 2011, some weeks after the signing of the guarantee. It did not occur shortly prior to 12 September 2011 as Mr Winters deposes in his affidavit, see [35] above.
26. Paperlinx kept a personal guarantee register. It records a personal guarantee dated 12 September 2011 in respect of Good Impressions. The dates on the register indicate that it is not updated upon the receipt of a guarantee, as the guarantees are not listed in chronological order. Further, the guarantee on the register does not specifically state the guarantor, but refers to "Directors name/s" and lists "Peter Bruce Edwards, Elizabeth Harris". There was no evidence or assertion that such a guarantee by those directors exists. It is not the guarantee sued upon in these proceedings.

Conclusion

1. This review of the documentary record indicates that: 1. contrary to Mr Winters' and Mr Caldararo's evidence, no new personal guarantee was drafted by Mr Caldararo and provided to Mr Winters shortly before 12 September 2010; 2. Mr Edwards signed a guarantee on 12 September 2011, a draft of which had been provided to him a year earlier and which he had, at that time in late 2010, offered to execute if it contained conditions limiting the amount guaranteed and time period during which it was operative; and 3. Mr Winters had, on about 5 October 2011 when the account was put "back on hold", offered to destroy the signed guarantee and indicated, by the timing of this offer, by the absence of any other signed guarantee, and by his email to Mr Caldararo stating that he was not "100% certain that this is what we discussed", that his reference to the guarantee should be understood as a reference to the document signed on 12 September 2011 and not to any guarantee signed in 2010.
2. All of these matters are consistent with Mr Edwards' account and contrary to the version of events submitted by Paperlinx.
3. On the other hand, Mr Edwards did hand over a signed document. Ordinarily, a court would be reluctant to find that a signature on a guarantee bearing the name of the signatory did not operate to bind the signatory to the obligations in the document. But a signed document is not always binding on a party, see Iacullo v Remly Pty Limited; Iacullo v Iacullo [2008] NSWSC 1176 at [166]-[167]. And a deed to be effective must be delivered, unconditionally: see Pratap v Permanent Custodians Limited [2013] NSWSC 1918 at [8], Naas (Lady) v Westminster Bank Ltd [1940] AC 366 at 389, and Seddon on Deeds at [3.2]. As no original guarantee was in evidence, it is more difficult to infer that the solicitor's limitations as to time and amount were not attached to or accompanying the signed guarantee when Mr Edwards provided it.
4. Mr Mattick's conditions contemplate a limit of $500,000, far more than the credit limit. That may make the offer by Mr Edwards less then certain, but it is not probative of whether the conditions were attached, provided or otherwise incorporated by Mr Edwards as part of an oral offer that accompanied the signed guarantee.
5. Paperlinx submits that there was no reason for it to reject the limited guarantee, because the limited amount exceeded the credit limit and the debt. But that ignores the time limit. Unless recovery could be achieved by 30 June 2012 a guarantee so limited was worthless. In any event, what should have occurred with the wisdom of hindsight is a poor guide to what did occur at the time. A better guide is that a limited guarantee had been previously offered in 2010, and rejected. Similarly, Mr Winters' asserted conversation in September 2011 (see [32] above) suggests that a limited guarantee would not be acceptable to Paperlinx.
6. Furthermore, the real issue is not whether Paperlinx accepted the proffered guarantee, but what were the terms of that offer. If a conditional guarantee was offered it was not (nor could it be, given the lapsed time limit) sued upon by Paperlinx.
7. Mr Winters admitted during his cross-examination that he reconstructed his account from emails. He gave oral evidence of conversations with Ms Allwood where she purportedly confirmed a signed guarantee in 2010, conversations that were not in his affidavit. And yet he also admitted that he did not ask Ms Allwood about whether she obtained a guarantee, that he had no knowledge of whether a guarantee had been obtained in 2010, and that he assumed a guarantee had been obtained because of what Mr Edwards had said to him. Mr Winters accepted in his oral evidence the account of Mr Edwards proffering a guarantee with limiting conditions, accepted that prior to a meeting on 12 September 2011, Mr Edwards desired limitations on the guarantee and accepted that he had a meeting on 12 September 2011 where the guarantee was discussed, matters consistent with Mr Edwards' account and inconsistent with his own affidavit.
8. In my view, Mr Winters' conflicting accounts made him an unsatisfactory witness.
9. Mr Edwards, on the other hand, readily made concessions and his account sat much more comfortably with the documentary record. Mr Edwards was not cross-examined about Mr Winters' version of the provision, signing and collection of the guarantee. In my view, the weight of the evidence is more supportive of Mr Edwards' account.
10. Mr Edwards' evidence should be accepted as to the circumstances of the provision of the guarantee, its return and its promised destruction. The provision of the signed guarantee in those circumstances would lend the reasonable bystander to conclude that Mr Edwards had not delivered the guarantee intending to be immediately bound, but had made an offer which subsequently was not accepted. In any event, the parties accepted that if the Court accepted Mr Edwards' account, the guarantee was not binding.
11. Accordingly, no agreement resulted, the deed is not binding, and Mr Edwards is not obligated by the terms of the guarantee.
12. The orders of the Court are: 1. Judgment for the defendant. 2. Plaintiff to pay the defendant's costs.

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: 28 May 2015