FJ & SM Monaghan Pty Ltd v S & W Slade Pty Ltd & Ors (No 1) [2017] NSWDC 139

District Court New South Wales

Medium Neutral Citation: FJ & SM Monaghan Pty Ltd v S & W Slade Pty Ltd & Ors (No 1) [2017] NSWDC 139 Hearing dates: Hearing: 24 – 25 February 2016; and 13 – 16 February 2017 and Directions: 20 May 2016, 22 July 2016 and 26 August 2016 Date of orders: 09 June 2017 Decision date: 09 June 2017 Jurisdiction: Civil Before: Hatzistergos DCJ Decision: 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; and 3. Verdict for the Cross-Defendant on the Cross-Claimant's cross claim Catchwords: CONTRACT – FORMATION OF CONTRACT – whether acceptance implied by conduct – whether offer rejected – contract formed

PENALTY DOCTRINE – whether interest rate imposed was a penalty – whether interest rate out of proportion and unconscionable – whether party describing impugned clause as a penalty is dispositive – whether onus to prove stipulated rate is a penalty discharged

QUANTUM MERUIT – whether freestanding right to claim interest

GUARANTEE – whether as a matter of construction guarantee is enforceable – whether no consideration provided – whether guarantee applied to past or future indebtedness

LIMITATIONS – whether action statute barred – whether debt confirmed – whether account is a "running" account Legislation Cited: Contracts Review Act 1980 (NSW) s 7 District Court Act 1973 (NSW) s 44(1)(a)(i) Evidence Act 1995 (NSW) s 136 Fair Trading Act 1987 (NSW) s 72 Limitation Act 1969 (NSW) ss 14(1)(a) and 54(2) Trade Practices Act 1974 (Cth) s 87 Cases Cited: Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30 Arab Bank Australia Ltd v Sayde Developments Pty Ltd [2016] NSWCA 328 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Clydebank Engineering & Shipbuilding Co Ltd v Don Jose Ramos Yzquierdo Y Castaned [1905] AC 6 Conridge v Schaapveld [2015] NSWSC 663 Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599; [1999] HCA 15 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Fahey v MSD Speirs Ltd [1975] 1 NZLR 240 Guardian Mortgages v Miller [2004] NSWSC 1236 Heydon v NRMA and Ors (No 2) (2001) 53 NSWLR 600; [2001] NSWCA 445 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 97326 Crowe-Maxwell v Frost (2016) 91 NSWLR 414; [2016] NSWCA 46 Lahoud v Lahoud [2010] NSWSC 1297 Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 Lake Cumbeline Pty Ltd & Ors v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Unreported, Federal Court of Australia, Tamberlin J, 29 June 1995) Luxton v Vines (1952) 85 CLR 352; [1952] HCA 19 of Fahey v MSD Speirs Ltd [1973] 2 NZLR 655 Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28 Re Footman Bower & Co Ltd [1961] 2 All ER 161 Santos Coffee Co Pty Ltd v Direct Freight Express Pty Ltd [2010] NSWCA 14 Tak-Wong Wong & Anor v Mura [2001] NSWCA 366 Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2) (2011) 297 ALR 56; [2011] FCA 1123 Yuwana Nominees Pty Ltd v Jason Ong & Anor [2008] NSWSC 156 Texts Cited: Wayne Courtney, John Phillips and James O'Donovan, The Modern Contract of Guarantee (Sweet & Maxwell, 3rd ed, 2016) Category: Principal judgment Parties: FJ & SM Monaghan Pty Ltd (Plaintiff/Cross-Defendant) S & W Slade Pty Ltd (First Defendant/Cross-Claimant) Mr Stephen Garry Slade (Second Defendant/Second Cross-Claimant) Mrs Wendy Maree Slade (Third Defendant/Third Cross-Claimant) Representation: Counsel: Mr A Cornish (Plaintiff/Cross-Defendant) Mr J Stephenson (Defendant/Cross-Claimant)