Vadasz v Pioneer Concrete (SA) Pty Ltd [1995] HCA 14

High Court of Australia Deane, Dawson, Toohey, Gaudron and McHugh JJ Vadasz v Pioneer Concrete (SA) Pty Ltd [1995] HCA 14

ORDER Appeal dismissed with costs

The Court delivered the following written judgment:—

16 August 1995 Deane, Dawson, Toohey, Gaudron and McHugh JJ

To understand the issues before the Court, it is necessary to mention in some detail the events giving rise to this litigation and the course it has taken.

The background

The appellant and his accountant, Nicholas John Storer, were the directors of Vadipile Drilling Pty Ltd (Vadipile), a company which carried on business as a foundation piling contractor. The appellant and Mrs Vadasz were the only shareholders of Vadipile. The respondent manufactured ready-mixed concrete and supplied Vadipile with its product between 1985 and 1987 and again between 1990 and 1992.

In January 1992 Vadipile was operating on extended credit from the respondent. In that month, because of its cash flow problems, Vadipile was granted an extension of trading credit from forty-five to sixty days. Vadipile's financial problems worsened so that, by July 1992, it was in debt to the respondent for more than $200,000. Discussions then took place between the appellant and Mr Storer, on the one hand, and Everett Merlyn Miller, the respondent's credit manager in South Australia, on the other. It was arranged that Vadipile would repay the existing debt by monthly instalments of $30,000 and that future debts would be incurred on forty-five day terms. At an early stage of the discussions Mr Miller told the appellant that the respondent would probably require a personal guarantee from him before agreeing to make further deliveries of concrete to Vadipile. The appellant, at first, was not agreeable to giving a guarantee and Mr Miller said that he would seek instructions from the respondent's head office in Sydney. There were further discussions between the parties and communications between Miller and the respondent's head office.