Should the appellant's submissions be accepted?
46 It is apparent from the submissions of the appellant summarised in (a), (b) and (c) of the preceding paragraph that the thrust of the appellant's argument is that whereas the primary judge has found that the parties adopted the common assumption that Construction would be liable to pay for materials supplied to Roofing, the finding of such an assumption was not open to the primary judge given that Mr Coutts was not at any relevant time aware that Construction existed. Accordingly, he could not have proceeded on the assumption that Construction had agreed to accept liability for materials supplied to Roofing.
47 In my opinion, this submission overlooks the fact that although Mr Coutts was the respondent's representative in relation to the sale of materials to Roofing, he was not the only person who was involved with the N-MGW account. Thus the appellant's argument fails to have regard to the critical facts that the respondent (or its relevant officers) issued written confirmations in the name of Construction of the orders placed by the appellant on behalf of Roofing, issued delivery dockets in the name of Construction and, critically, issued invoices for payment in the name of Construction.
48 In my opinion it is clear from these facts that it was well open to the primary judge to hold that the respondent, as a corporate entity, had adopted the assumption that materials the subject of purchase orders lodged by the appellant on behalf of Roofing were to be supplied on credit in accordance with the N-MGW account, being the Construction credit arrangement in respect of which Construction would be liable as the principal debtor and the appellant would be liable as guarantor. After all, that credit account was in Construction's name and, certainly, the appellant understood and intended that any materials purchased by Roofing would be supplied in accordance with the Construction credit arrangement and were therefore subject to the terms of that facility which included, to his knowledge, Construction's liability to pay the invoiced amounts which were guaranteed by the appellant.
49 Accordingly, when the position is looked at from the point of view of the respondent (as distinct from Mr Coutts personally), the assumption attributed to the respondent by the primary judge was clearly established.
50 A more controversial issue is whether Construction, as distinct from the appellant, played a relevant part in the adoption by the respondent of that assumption in terms of categories (b) or (d) referred to by Deane J in Verwayen to which I have referred in [44] above. Or, to put the matter in terms of that referred to by Samuels JA in Coghlan, was that assumption in any way fostered by Construction?
51 In my opinion the answer to the question so posed should be in the affirmative. Although Construction had stopped trading as at 30 June 1999, it continued in existence as evidenced by the fact that its annual returns were filed up to and including 2001. Further, the appellant was its sole director and shareholder and, therefore, its directing mind and will. Through the appellant, Construction was aware that the respondent was issuing confirmations of orders, delivery dockets and invoices for payment in its name. It thereby knew that the respondent was acting under the assumption that Construction was liable for the payment of the materials ordered by Roofing.
52 Furthermore, the deposit book which related to Construction's credit account and therefore belonged to Construction was, through the appellant, utilised for the purpose of enabling Roofing to pay those invoices. In these circumstances it is inevitable that, at the very least, Construction knew that not only was the respondent labouring under the assumption that the materials were being supplied pursuant to, and in accordance with, the Construction credit arrangement, but also that the respondent was assuming that in accordance with the terms of those arrangements, Construction would be liable to pay the invoices issued in respect of the materials so supplied. As Construction through the appellant did nothing to disabuse the respondent of those assumptions, it follows that it played a sufficient part in their adoption by the respondent that it would be unjust if it were now permitted to depart from them.
53 During the course of argument before this Court, it was suggested that the primary judge's finding that the common assumption extended to Construction being the debtor was unnecessary to enable the respondent to succeed against the appellant on the Construction guarantee. This is because on the findings made by the primary judge, there was clearly a common assumption adopted by the appellant and respondent that the supply of materials pursuant to the Construction credit arrangement, the payment of which was guaranteed by the appellant, extended to the materials the subject of Roofing's purchase orders. In other words the assumption common to both parties was that any materials supplied by the respondent pursuant to Roofing's purchase orders were covered by the Construction credit arrangement entered into in 1996 in respect of which the appellant guaranteed payment for the materials supplied. As both the respondent and the appellant were under the same assumption and as materials were ordered and supplied on the basis of that assumption, it follows that a conventional estoppel was established with the consequence that any departure from that assumption by the appellant would be unconscionable.
54 When this form of common assumption was put to the appellant's counsel, it was virtually conceded that he had no answer to it.
55 Nevertheless, it was contended by the appellant that whether the correct assumption was that found by the primary judge or that referred to above in argument, the debt was in truth that of Roofing to which the appellant's Construction guarantee did not, in terms, extend. The difficulty with this submission is that it overlooks the fact that the common assumption of the parties, about which they were both mistaken and on the basis of which materials were ordered and supplied on credit, was that the payment of the purchase price of those materials was guaranteed by the appellant. The concessions of the appellant in cross-examination referred to in [27] above make it abundantly clear that the appellant assumed that his Construction guarantee extended to materials the subject of purchase orders by Roofing. Although they were not the true terms of the guarantee, the effect of the common assumption adopted by the parties is that the appellant was estopped from denying that the guarantee so extended.
56 The appellant also submitted that it was not open to the respondent to rely on conventional estoppel as the mistake it made regarding the identity of the true debtor was self-induced in that Mr Coutts failed to make his usual enquiries to check, when the supply agreement was entered into by Roofing, that credit arrangements were in place with respect to that company. He made the erroneous assumption that the Construction credit arrangement applied.
57 In my opinion there is no substance in this submission. It was made in reliance upon the statement of McHugh JA in Coghlan (at 176D]) that:
"[e]stoppel is not concerned, however, with a self-induced mistake even if both parties have made the same mistake."
58 In my opinion, this statement of McHugh JA has no application to the present case. It was made in the context of his Honour's assertion that the party to be estopped must have conducted himself in such a way as to cause, induce or occasion another person to accept some fact or event as the basis of their dealings. As I have already indicated, that requirement was relevantly satisfied in the present case. In my opinion, his Honour was speaking of a mistake which was not induced by the conduct of the party to be estopped, but which was due only to the mistake of the party seeking the estoppel. It has no application where, to quote the sentence from his Honour's judgment appearing immediately after that cited above,
"[t]he person alleged to be estopped must have contributed to or occasioned the other party's mistake."
59 It follows from the foregoing that the appellant's challenges to the primary judge's finding, that he was estopped from denying that he is liable to the respondent under the Construction guarantee, should be rejected.