Bentley & Anor v Bearing Traders Pty Ltd & Anor [2003] NSWSC 369

New South Wales Supreme Court

CITATION : Bentley & Anor v Bearing Traders Pty Ltd & Anor [2003] NSWSC 369 HEARING DATE(S) : 17 April, 2003 JUDGMENT DATE : 17 April 2003 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Interlocutory injunction granted restraining First Defendant from asserting Plaintiffs liable on guarantee of accounts in default.

CATCHWORDS : INTERLOCUTORY INJUNCTION - CREDIT RATING PUBLICATION - MISLEADING STATEMENTS - Second Defendant publishes credit rating information - First Defendant informs Second Defendant that Plaintiffs have guaranteed companies' trading accounts which are in default - Plaintiffs affected by adverse credit rating - Plaintiffs allege their signatures on guarantees are forged - serious question to be tried - balance of convenience in favour of granting interlocutory injunction - principles discussed. LEGISLATION CITED : Trade Practices Act 1974 (Cth) - s.51A, s.52, s.87 CASES CITED : Yorke v Lucas (1985) 158 CLR 661 Jon Bentley - First Plaintiff PARTIES : Gary Alexander Williams - Second Plaintiff Bearing Traders Pty Ltd - First Defendant Baycorp Advantage Business Information Services Limited - Second Defendant FILE NUMBER(S) : SC 2373/03 R. McKeand - First and Second Plaintiffs COUNSEL : D.A. Allen - First Defendant S. Jamieson - Second Defendant (excused) Tzovaras Legal - First and Second Plaintiffs SOLICITORS : Catalyst Partners - First Defendant In house - Second Defendant

JUDGMENT – Ex tempore

1 By Summons filed on 15 April 2003 the Plaintiffs seek injunctions restraining the First Defendant from making statements or allegations or publishing information to the effect that the Plaintiffs have a liability to the First Defendant pursuant to a guarantee which they are said to have signed in respect of the trading account of Minfox Pty Limited with the First Defendant. 2 Leave was given to file and serve a Summons on short notice. The Summons and the supporting affidavits were served in accordance with the directions given and the matter was called on today before me. 3 At the hearing Mr McKeand appeared for the Plaintiffs and Mr Allen appeared for the First Defendant. The Second Defendant informed the court that it would abide by the decision of the Court and if an injunction was granted against the First Defendant then it would act in conformity with it. The Second Defendant was, therefore, excused from further attendance. 4 The Plaintiffs say that the purported signatures on a credit application agreement guaranteeing the obligations of Minfox Pty Limited to the First Defendant are not their signatures. They say that they have never guaranteed such debts and they have never guaranteed any debts of the companies with which they were associated which have traded with the First Defendant. 5 The Plaintiffs have, after some delay on the part of the First Defendant, procured a copy of the credit application agreement which is said to contain their signatures. They have submitted that document to the examination of a handwriting specialist. 6 Bearing in mind the difficulty of ascertaining the genuineness of a signature from a photocopy document (and a poor photocopy at that), the expert is, nevertheless, of the opinion that the alleged signature of Mr Williams bears no resemblance to Mr Williams' usual signature and that the alleged signature of Mr Bentley is gravely suspect. 7 The problem arises because the First Defendant has reported to the Second Defendant, which is a credit reporting service, that the Plaintiffs are liable as guarantors for the trading accounts of three companies and that those trading accounts are in default. Statements to that effect appear in the credit information published by the Second Defendant in respect of the Plaintiffs. 8 The evidence of the Plaintiffs is that the publication of those statements has already had severe financial consequences to them. Mr Bentley's credit cards have been cancelled. He is about to depart for a business trip overseas and says that he will find it difficult, if not impossible, to conduct that business trip if his credit cards are cancelled. 9 Mr Williams, likewise, has encountered financial difficulties. He was about to engage in the acquisition of property which required finance. That finance is under threat by reason of the adverse credit reference against him which appears in the Second Defendant's report. 10 It is notorious that, in a society such as ours, a person's ability to conduct his or her everyday affairs, let alone his or her ability to engage in business transactions, may be severely affected by an adverse credit rating. One must take that circumstance into account in evaluating where the balance of convenience lies in a case such as this. 11 I will come to the question whether there is a serious question to be tried shortly, but at this stage it is sufficient to note that as far as the balance of convenience is concerned, if an injunction is not granted which has the effect of removing from the Second Defendant's credit reports the statements as to alleged liabilities and default of the Plaintiffs, they probably will continue to suffer considerable financial difficulty in the conduct of their personal lives and their business transactions. 12 On the other hand, the First Defendant is concerned only to obtain payment of the debt owing by Minfox Pty Limited. That debt is not disputed. The problem is that Minfox is unable to pay and has been placed in voluntary administration. The First Defendant's claim, therefore, is to recover the debt from the alleged guarantors, Mr Bentley and Mr Williams. That claim is a simple common money count and can be pursued in the ordinary way in the appropriate Court. 13 The absence of an adverse credit rating for Messrs Bentley and Williams in the Second Defendant's publication will not impede the ability of the First Defendant to recover its alleged debt from them. However, the continuing presence of that credit reference is having an adverse effect on the Plaintiffs' credit. That it does so certainly gives the First Defendant a strong lever of persuasion, if not of coercion, against the Plaintiffs to pay their disputed liability on the guarantee. I do not think that this is a proper benefit for the First Defendant to seek to retain. 14 The causes of action which the Plaintiffs seek to raise against the First Defendant are as follows. 15 The first cause of action is founded on s.52 of the Trade Practices Act 1974 (Cth). It is said that the First Defendant has been guilty of conduct contravening s.52 in making statements to the Second Defendant so that they may be repeated by the Second Defendant to the broader commercial community. The statements are to the effect that the Plaintiffs are liable as guarantors for accounts of companies which are in default and that the Plaintiffs have not honoured their obligations under the guarantees. It is said that those statements are misleading or likely to mislead, because, in fact, the Plaintiffs are not liable on guarantees. 16 The second cause of action is deceit, that is, a fraudulent misrepresentation by the First Defendant that the Plaintiffs are liable on guarantee for accounts of the company. It is said that that fraudulent misrepresentation has been made by the First Defendant in order to obtain a benefit for itself. 17 The third cause of action is defamation. I am not persuaded that there is a serious question to be tried in relation to that cause of action. The statements appearing in the publication of the Second Defendant concerning Mr Bentley are as follows: " Overdue Account(s):