IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMERCIAL DIVISION	Revised
Not Restricted
Suitable for Publication	
  GENERAL CASES List
Case No. CI-20-01285

TW Timber Treatment Pty Ltd (ACN 081 533 404)	Plaintiff	
		
and		
		
Aaron Lyall Giddings	Defendant	
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JUDGE:	Judicial Registrar Burchell  	
WHERE HELD:	Melbourne	
DATE OF HEARING:	16 March 2021	
DATE OF JUDGMENT:	19 March 2021	
CASE MAY BE CITED AS:	TW Timber Treatment Pty Ltd v Giddings	
MEDIUM NEUTRAL CITATION:	[2021] VCC 275		

REASONS FOR JUDGMENT
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Subject:		Guarantee – credit application – consideration 

Catchwords: 	Director’s personal guarantee - enforcement against director for amounts owing by company – company deregistered – whether intention to enter into legal relations – whether consideration provided – liability for contractual interest after DOCA effectuated

Legislation Cited:	Corporations Act 2001 (Cth) ss444H, 444J and 601AH; Supreme Court Act 1986 (Vic) s58.

Cases Cited:	Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160; Harris v Burrell & Family Pty Ltd [2010] SASCFC 12; Glynn v Margetson & Co [1893] AC 351; Forbes v Git [1922] 1 AC 256; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; Temperzone Australia v Amabile [2016] NSWSC 1197; Benson-Brown v Smith [1999] VSC 208; Atco Controls Pty Ltd v Newtronics Pty Ltd (2009) 25 VR 411; Bofinger v Kingsway Group Limited (2009) 239 CLR 269; Pico Holdings Inc v Wave Vistas Pty Ltd (2005) 79 ALJR 825; Netglory Pty Ltd v Caratti [2013] WASC 364; Lakeman v Mountspehen (1874) LR 7 HL 17; Pitts v Jones [2008] QB 706; Central Cleaning Supplies (Australia) Pty Ltd v Elkerton (2015) 321 ALR 181; Coghlan v S H Lock (Australia) Ltd (1987) NSWLR 88; Ankar Pty Ltd v National Westminster Finance (Aust) Ltd (1987) 162 CLR 549; Australian Gypsum Industries Pty Ltd v Dalesun Holding Pty Ltd (2014) 283 FLR 471; Lam Soon Australia Pty Ltd v Molit (No 55) Pty Ltd (1996) 70 FCR 34; Hanson Construction Materials Pty Ltd v Davey [2010] QCA 246; Ali Shipping Corporation v Jugobank DD Beograd Jugobanka Split [1997] EWCA Civ 2705; Perrott v Newton King Ltd [1933] NZLR 1131; Quainoo v New Zealand Breweries Ltd [1991] 1 NZLR 161. 
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APPEARANCES:
	Counsel	Solicitors	
For the plaintiff	Mr D Gration	James Partners Lawyers	
			
For the defendant	Mr D Lorbeer 	Peer Legal	

JUDICIAL REGISTRAR:
1	In this proceeding, the plaintiff (“TW Timber”) seeks to enforce an alleged director’s guarantee of amounts owing by a company, Aarons Outdoor Living Pty Ltd (“Aarons Outdoor Living”), now deregistered, for goods supplied pursuant to a trading account.  
2	TW Timber claims the sum of $282,868.08, together with interest at 16% per annum from late 2016 to date of judgment and costs pursuant to the alleged personal guarantee given by the defendant (“Giddings”) in respect of goods purchased by Aarons Outdoor Living from TW Timber (“Products”). 
3	Giddings opposes the giving of judgment on the following grounds:
(a)	he did not manifest an intention to enter into legal relations in his personal capacity as a guarantor;
(b)	alternatively, TW Timber has not provided consideration for his (assumed) entry into the guarantee; and 
(c)	alternatively, Giddings was not be liable for interest pursuant to the terms of sale (“Terms of Sale”) accruing after the DOCA being wholly effectuated.  
4	In my judgment, the defendant has made out the ground that Giddings did not manifest an intention to enter into legal relations in his personal capacity as guarantor.  
5	There will therefore be an order that the proceeding be dismissed. There will also be an order that the plaintiff pay the defendant’s costs of and incidental to the proceeding on a standard basis, in default of agreement, unless either party has a basis for seeking a different order as to costs. I will invite the parties to prepare draft orders to give effect to these reasons and will determine any issue concerning costs on the papers.
Background facts
6	TW Timber supplies outdoor timber products and trades under the name “Outdoor Timber Treatment”.  
7	Between 11 August 2003 and 16 May 2018, Giddings was a director and secretary of Aarons Outdoor Creations (Moorabbin) Pty Ltd, subsequently named Giddings Holdings Pty Ltd and then Aarons Outdoor Living Pty Ltd. Administrators were appointed to the company on 31 January 2017 and it was deregistered on 16 May 2018.
8	TW Timber supplied timber to Aarons Outdoor Living and its predecessors for many years. Aarons Outdoor Living specialised in manufacturing outdoor living products and sold them through various outlets.
9	On or around 9 October 2010, the directors of Aarons Outdoor Living (then named Giddings Holdings Pty Ltd) made a request to open an account under a different entity. Garrie James, the managing director of TW Timber, responded to the request in a cover letter as follows:
“As you have had a strong & favourable trading relationship with our company, your application is likely to be processed favourably. We do, however, require that you completed [sic] fully all the required forms as supplied. This was done by the previous company. If you require the same trading conditions, you will be required to fully complete ALL forms. 
… 
Please find enclosed an Acknowledgement of Terms of Sale form. This enables us to assess your creditworthiness… 
… 
Please also find enclosed an Account Application; the director’s guarantee section must be fully completed. In the present financial climate, we do not offer accounts without this fully completed.”  
10	On 14 October 2010, Angela Stavrakis on behalf of Aarons Outdoor Living executed an “Application for 30 Day Trading Account” (“Trading Account Application”, CB36-40). At paragraph 4, the Trading Account Application provides “[w]e agree to the trading terms issued by TW Timber Treatment Pty Ltd as issued by TW Timber Treatment Pty Ltd.”
11	The Trading Account Application included a question “If a company, are directors prepared to sign directors guarantee?” to which the answer “No” is circled.
12	Notwithstanding this, Giddings completed an “Acknowledgement’s [sic] of Agreements” form within the Trading Account Application, which stated among other things that:
“I/We understand that in signing this form I/We give the following ACKNOWLEDGEMENT and enter into the following agreements and Guarantee.”
	and at paragraph 6:
“I/We being the Director(s) of the Applicant/Customer, hereby GUARANTEE TW Timber Treatment Pty Ltd the due and punctual payment and performance by the Applicant/Customer of all its obligations to TW Timber Treatment Pty Ltd at all times in respect of every order placed by the Applicant/Customer with TW Timber Treatment Pty Ltd and in respect of which credit is provided by Outdoor Timber Treatment. This GUARANTEE is a continuing GUARANTEE and is binding by [sic] my/our legal personal representative, successors and assigns.”
13	Giddings also completed the document headed in bold type:
“Please note that if the below section is not fully completed, we may not consider offering a trading account.”
14	Section C of the form is headed “THE GUARANTORS: Please complete below, sign and have witnessed” and goes on to state “We, being the directors or proprietors acknowledge the agreement to guarantee & indemnify and agree to your trading terms”. The document is signed by Giddings and witnessed by Ms Stavrakis.
15	It is common ground between the parties that TW Timber supplied timber products to Aarons Outdoor Living and its predecessors over the years including, from September to November 2016, the supplies the subject of the present proceeding, to the value of $301,504.87.
16	On or about 11 November 2016, Aarons Outdoor Living made a payment of $1,504.87 to TW Timber.  
17	On 1 December 2016, TW Timber’s solicitor made demands to Aarons Outdoor Living and Giddings for payment of amounts said to be owing by Aarons Outdoor Living.
18	On 7 December 2016, TW Timber issued a statutory demand on Aarons Outdoor Living for the sum of $220,449.95.  
19	In a text sent to Alison Gebbing of TW Timber on or around 14 December 2016, TW Timber submits that Giddings acknowledged his personal liability for the debt, saying:
“Hi Al,
This matter has got out of control. I have every intention to pay you in full ......
I've never not paid my bills in 20 years. 
As you know, my money comes through in the next 4 weeks so I'd like to propose a payment plan to have the full amount settled in a reasonable amount of time. 
To avoid unnecessary legal costs and headaches can we please have a chat?
Thanks, Aaron.” 
20	On 31 January 2017, Aarons Outdoor Living was placed into Voluntary Administration.
21	On 7 March 2017, TW Timber’s solicitor made a further demand for payment by Aarons Outdoor Living.  
22	On 17 March 2017, Aarons Outdoor Living entered into a Deed of Company Arrangement (“DOCA”).  
23	Pursuant to the terms of the DOCA, TW Timber received a payment of $17,131.94, leaving an amount of $282,868.06 owing.  
Procedural matters
24	Giddings sought leave of the Court to file and serve a further amended defence. By letter dated 14 March 2021, Giddings’ solicitor wrote to TW Timber’s solicitor on the issue of whether Giddings was presently indebted to TW Timber for interest payable to TW Timber under clause 5(h) of the Terms of Sale (statement of claim, paragraph 21; amended defence, paragraph 21) and in particular, whether any interest was payable to TW Timber after the termination of the DOCA on or about 24 October 2017 (at which time TW Timber’s claims against Aarons Outdoor Living were released, discharged and extinguished: DOCA, cl 12.3) or, alternatively, the deregistration of Aarons Outdoor Living.  
25	TW Timber submits that the effect of any defence in respect of deregistration could have been readily ameliorated by TW Timber making an application to reinstate Aarons Outdoor Living under s601AH of the Corporations Act 2001 (Cth). TW Timber would ask to be heard on the question of an adjournment should the defendant be permitted to run the defence and it appear that the plaintiff’s claim for interest from the date of deregistration might fail only by reason of the deregistration of Aarons Outdoor Living.  
26	In light of that submission, Giddings only pressed the proposed amendment that the DOCA extinguished Aarons Outdoor Living’s liability in respect of interest payable under the Terms of Sale. TW Timber acknowledged that this was a legal argument and no prejudice arose by reason of the amendment in relation to the DOCA being wholly effectuated. Leave to further amend the defence was so granted.  
27	There are five issues for determination:
(a)	Did the Giddings sign the documents? [Answer: Yes] 
(b)	Did Giddings intend to enter into legal relations in his personal capacity as a guarantor by signing the documents and did he do so on his own behalf? [Answer: No] 
(c)	Did TW Timber provide consideration for Giddings’ guarantee? [Answer: Not applicable] 
(d)	Whether the Terms of Sale governed the supply of goods? [Answer: Yes] 
(e)	Whether Giddings is liable under his guarantee for interest calculated at 16% per annum on the amounts outstanding in accordance with clause 5(h) of those Terms of Sale? [Answer: Not applicable]
Issue 1: Did the Giddings sign the documents?
28	Giddings did not put TW Timber to proof on the matters arising from paragraph 1 of the issues for determination. 
29	The opinion of TW Timber’s forensic handwriting expert is that “it is highly probable” that the signature of Giddings which appears on the documents at CB38 and 40 is the same as the signature appearing on various other documents that are purported to have been signed by him.
30	By letter dated 22 February 2021, Giddings’ solicitor said:
“Given the contents of your client’s expert report, our client will not be filing his own expert report or disputing the issue of whether he signed the document in question.”
31	I find that Giddings did sign the documents.  
Issue 2: Did Giddings intend to enter into legal relations in his personal capacity as a guarantor by signing the documents and did he do so on his own behalf?
32	Giddings contends that he did not manifest an intention to enter into legal relations in his personal capacity as a guarantor.
33	Counsel for Giddings relied on Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd in which Giles J stated:
“In the result, I conclude that the proper approach is to inquire whether there is to be found an intention that the signatory be personally bound to the contract evidenced in the document, meaning thereby not a subjective intention but an intention to be found objectively, notwithstanding a qualification attached to the signature. That intention, or lack thereof, is to be found upon the construction of the document as a whole, including but not being limited to the qualification attached to the signature, in the light of the surrounding circumstances to the extent to which evidence thereof is permissible. The inquiry is not limited to consideration of the signature and its qualification in order to determine whether or not the signature indicates an assent to be personally bound.” [Emphasis added] 
34	In Harris v Burrell & Family Pty Ltd, Doyle CJ, Bleby J and Sulan J agreeing, held:
“It is a matter of considering what the parties did, in the light of the surrounding circumstances, and then considering what that would have led a reasonable person in the position of the other party to believe.” [Emphasis added] 
35	Giddings claims that in circumstances in which, on the very first page of the Trading Account Application (CB36), the word “No” is circled in answer to the question “If a company, are directors prepared to sign directors guarantee”, a reasonable person in the position of TW Timber would not believe the signatures of Giddings on pages after the first page (CB38 and CB40) to manifest assent to a guarantee.
36	Giddings further contends that given the fact that the “Acknowledgment’s [sic] of Agreements” form contemplated and required a signature on behalf of Aarons Outdoor Living regardless of whether a guarantee was to be provided, the election “No” on the first page of the document would lead a reasonable person to believe Giddings’ signatures to signify Aarons Outdoor Living’s assent to the terms of the document only. 
37	Giddings relies on cases dealing with contradictory provisions, which hold that written terms prevail over printed standard terms to the extent of any inconsistency. Giddings refers to Glynn v Margetson & Coper Lord Halsbury as follows:
“[t]he words superadded in writing (subject indeed always to be governed in point of construction by the language and terms with which they are accompanied), are entitled nevertheless, if there should be any reasonable doubt upon the sense and meaning of the whole, to have a greater effect attributed to them than to the printed words, inasmuch as the written words are the immediate language and terms selected by the parties themselves for the expression of their meaning, and the printed words are a general formality adapted equally to their case and that of all other contracting parties upon similar occasions and subjects.”   [Emphasis added] 
38	Additionally, Giddings submits that it is also consistent with the presumption that where there are inconsistent and irreconcilable clauses of a deed or contract, the earlier in the document prevails.
39	In the alternative, Giddings argues that given the irreconcilable inconsistency, at most, the reasonable person in TW Timber’s position could not sensibly form a view one way or the other about whether Giddings’ signatures signified his assent to the guarantee, in which case TW Timber would not have discharged its burden.  
40	First, TW Timber contends that the documents signed by Giddings were plainly legal documents entered into in a commercial context. Applying the objective test, Giddings conveyed by his signing of the documents an intention to be legally bound by them. 
41	Second, TW Timber says it is plain that Giddings entered into the documents in his personal capacity, as stated at CB38 and 40. It would be absurd for Aarons Outdoor Living to purport to guarantee its own obligations.. 
42	In my view, little weight ought to be given to the extraneous and subsequent communications. The issue to be determined is an objective exercise, in particular, as to what the Trading Account Application would have conveyed to a reasonable person in the position of TW Timber.  
43	The Trading Account Application for a 30 day trading account comprises five pages that formed one facsimile signed on 14 October 2010. The Trading Account Application intermingles the credit application terms and the guarantee of payment and performance.  
44	Giddings argues that the “Acknowledgment’s [sic] of Agreements” form contemplated and required a signature on behalf of Aarons Outdoor Living regardless of whether a guarantee was to be provided, which means that a signature of a director could signify two different things: assent to the terms of the document in a dual capacity (both as agent for Aarons Outdoor Living and personally); or a signature only as agent of Aarons Outdoor Living.  
45	He says that the circling of “No” on the first page of the Trading Account Application resolves that choice in favour of the latter. It would lead a reasonable person to understand Giddings’ signature on CB38 to signify only Aarons Outdoor Living’s assent to the terms of the “Acknowledgement’s [sic] of Agreements” form.
46	Giddings contends that the issue resolves into whether the unequivocal and clear indication that the directors were not prepared to sign directors’ guarantees on the first page of the Trading Account Application is overcome by the defendant’s affixation of his signature on CB40.  
47	Giddings submits that the indication that the directors were not prepared to sign guarantees is not overcome, because a reasonable person in TW Timber’s position would not, in light of the indication on the first page, understand the signature on CB40 to convey assent to a guarantee. At most, the reasonable person in TW Timber’s position could not sensibly form a view one way or the other about whether Giddings’ signatures signified his assent to the guarantee and would inevitably lead that person to speculate about the reason for the inconsistency. In those circumstances, it is submitted that TW Timber has not discharged its burden.
48	TW Timber relies on the cover letter to Aarons Outdoor Living which provided that “the director’s guarantee section must be fully completed. In the present financial climate, we do not offer accounts without this completed.” Further, the words in the Trading Account Application provide that, “if the below section is not fully completed, we may not consider offering a trading account”.  
49	In my view, Giddings gave an unambiguous answer to the question of whether the directors were prepared to sign the guarantee. The cover letter’s instructions directed that the director’s guarantee be fully completed, which was done. The cover letter does not state that the director’s guarantee must be given, offered or in place. The section had been completed as requested but the document must be read in its entirety.  
50	The circling of the “No” on the first page of the five-page document must be read such that the provisions in relation to the guarantee have no effect and Giddings’ signature is to signify Aarons Outdoor Living’s assent to the terms of the “Acknowledgment’s (sic) of Agreements” form contained in the merged document.  Contrary to TW Timber’s submissions, Aarons Outdoor Living is not taken to be guaranteeing its own obligations (cf Benson-Brown v Smith), rather, the document must be read as though all references to the guarantee are struck out and Giddings is signing as agent of Aarons Outdoor Living only.  
51	There is the exception to the ordinary rules of contractual construction in the case of contracts of guarantee or indemnity. This means that a doubt as to the construction of a provision in a contract of guarantee or indemnity should be resolved in favour of the surety or indemnifier. 
52	Further and in the alternative, the director’s guarantee section was completed (as instructed by the cover letter), however, the form is qualified by the equivocal words at the top of CB40 “if the below section is not fully completed, we may not consider offering a trading account”. Given the permissive, rather than mandatory nature of the words, there is the possibility that TW Timber may consider offering a trading account “if the below section is not fully completed”, and in the present case, if the director’s guarantee was not offered by the company’s director. TW Timber’s reliance on Temperzone Australia v Amabile (“Temperzone Australia”) is distinguishable because in that case, the defendant claimed the guarantee was unenforceable against him on the basis of misleading and deceptive conduct as to the nature of the credit application and the incorporation of the guarantee. The facts and legal arguments in Temperzone Australia are not agitated in the present case.  
53	For the reasons outlined above, TW Timber has not proved that the defendant, on an objective assessment, manifested an intention to enter into legal relations in his personal capacity as a guarantor, and the plaintiff’s claim should be dismissed. 
Issue 3: Did TW Timber provide consideration for Giddings’ guarantee?
54	Giddings asserts that TW Timber has not provided consideration for his (assumed) entry into the guarantee. The guarantee clause in the Trading Account Application does not purport to recite TW Timber’s consideration for the guarantee.
55	Giddings further denies TW Timber’s allegation that TW Timber and Aarons Outdoor Living entered into an agreement pursuant to which TW Timber agreed to sell Aarons Outdoor Living the Products.  
56	This argument was developed further in closing submissions as follows. 
57	First, the Trading Account Application was devoid of any promissory content on the part of TW Timber as it was an application by Aarons Outdoor Living for 30 day credit. Although some of the expressions that were used contemplate the provision of credit by TW Timber to Aarons Outdoor Living, there is nothing in the nature of a promise that TW Timber will extend credit to Aarons Outdoor Living, and none of those expressions necessarily imply that TW Timber will become subject to an obligation to do so. Rather, reading the two pages as a whole, whilst headed “Acknowledgement’s [sic] of Agreements”, they constitute nothing more than a collection of (unenforceable) unilateral undertakings given to TW Timber by Aarons Outdoor Living and Giddings.
58	Second, it is inferred that the Terms of Sale applied at or proximate to the time of the Trading Account Application (it was acknowledged they did not form part of the facsimile comprising the Trading Account Application), and those terms provide that the mere opening of an account did not imposed any obligation on TW Timber. 
59	Third, on the evidence adduced by TW Timber, the Court cannot properly infer that TW Timber in fact provided a trading account to Aarons Outdoor Living in connection with the Trading Account Application. The words “we may not consider offering a trading account” contemplates the possibility only of a (subsequent) offer of a trading account. TW Timber has not adduced evidence of such an offer. 
60	In light of the written closing submissions, TW Timber sought to re-open its case to admit the invoices found at CB381-CB416. Ultimately, Giddings did not oppose the tendering of the invoices.  
61	Giddings claims that consideration must move from TW Timber. “The consideration to support a contract of guarantee must be “real and valuable and not illusory or a sham”. Further, “until there is a principal debtor there can be no suretyship.”
62	Giddings relies on the decision in Pitts v Jones in which Smith LJ concluded that there is a clear chronological link between the defendant’s offer of the undertaking and the claimants’ willingness to sign the documents, and that the natural inference to draw was that the two were directly connected. In that case, the relevant events took place on the same day. Here, the relevant events are nearly six years apart.
63	Giddings refers to Central Cleaning Supplies (Australia) Pty Ltd v Elkerton (“Elkerton”), which involved a customer completing a standard form credit application on 3 September 2009 and whether a retention of title clause in the application applied to supplies made between November 2012 and May 2013.  The supplier in Elkerton issued an invoice the day after the credit application was completed. The parties had incorrectly assumed that the completion of the application gave rise to a contract. 
64	Giddings concludes that TW Timber did not provide consideration for the guarantee and TW Timber’s alleged agreement to sell Aarons Outdoor Living the Products (which is also denied) did not constitute consideration for the guarantee.  
65	TW Timber says that in its cover letter dated 9 October 2010, TW Timber informed the directors of Aarons Outdoor Living in response to their request for a trading account, that it would not offer an account without a director’s guarantee. This was reiterated in the Trading Account Application signed by Giddings (at CB40). TW Timber contends that following the provision of the director’s guarantee, TW Timber in fact provided the trading account to Aarons Outdoor Living and thereby gave good consideration for Giddings’ guarantee.  
66	TW Timber refers to the Privy Council decision in Coghlan v S H Lock (Australia) Ltd, which states:
“It is, however, entirely clear that although the mere promise to consider or entertain a request cannot of itself constitute a valuable consideration for the sureties' promise, the actual advance of money in response to a request does provide a consideration for the sureties' liability.”   [Emphasis added]
67	In light of my finding that Giddings did not have legal intention to enter into a director’s guarantee, it is not necessary for me to answer this question.  
68	If I am wrong in my determination on issue 2, then I would find that there was consideration for the following reasons.  
69	As observed above, the cover letter does not provide that TW Timber would not offer an account without a director’s guarantee. It states that the section must be completed. Assuming an enforceable guarantee, then in my view, on a fair reading of the Trading Account Application, the Terms of Sale, the statement for the period ending 1 December 2016 and the invoices at CB381-CB416, on a balance of probabilities, TW Timber provided the trading account to Aarons Outdoor Living.  Thus if a guarantee (assumed) had been provided by Giddings, good consideration would have been provided by TW Timber.  
70	I make this finding on the following basis.  
71	It is common ground that the Terms of Sale applied to the goods between September 2016 and November 2016. The Trading Account Application at paragraph 4 provides “[w]e agree to the trading terms issued by TW Timber Treatment Pty Ltd as issued by TW Timber Treatment Pty Ltd”, and at paragraph 5 says, “We acknowledge that terms of sale may be subject to change as reflected by trading condition”.  
72	There is no evidence before the Court of a formal acceptance by TW Timber of the Trading Account Application. Further, Giddings submits that given the lapse of nearly six years between the Trading Account Application and the supply of the goods, and that the Terms of Sale contemplate replacing any previous terms and conditions of sale (CB41), there is a question as to whether TW Timber in fact provided the trading account to Aarons Outdoor Living.  
73	I adopt the application of the Court of Appeal in Elkerton in the present case in that:
(a) the mere signing of the credit application, here, the Trading Account Application, does not create a contract and the lodgement did not impose a contractual obligation to do anything;  
(b) acceptance of the Trading Account Application by TW Timber was acceptance by conduct of the parties in delivery of the goods ordered, sending of an invoice and confirming that the supply was on a 30 day credit; 
(c) the sending of the invoices was the critical step because that was the first communication of the credit being provided; and 
(d) the conditions set out in the invoices contained the Terms of Sale and appear in identical terms on every supply invoice.  
74	I also accept TW Timber’s reliance on Temperzone Australia, which involved a timeframe of a credit application made on or about 21 August 2009 and orders for goods during the period May to June 2013.  
75	In my view, the Court can properly infer that TW Timber in fact provided the trading account to Aarons Outdoor Living in connection with the Trading Account Application. Although TW Timber acknowledges that the Terms of Sale did not form part of the facsimile comprising the Trading Account Application, it is inferred that those terms applied at or proximate to the time of the Trading Account Application. The document was discovered as part of the “Copy Aarons Outdoor Creations – Application for a 30 Day Trading Account with TW Timber Treatment Pty Ltd” dated 14 October 2010. I find that the Terms of Sale applied at the time of the Trading Account Application.  
76	The evident connection between the supply and the Terms of Sale on the one hand and the trading account on the other gives rise to the existence of an overarching contract between the parties under the trading account.  
77	The credit application was for a 30 day trading account. The invoices apply the 30 day credit contemplated by the Trading Account Application by TW Timber. I therefore accept TW Timber’s submissions that the Terms of Sale pursuant to clause 5(a) to (f) (inclusive) under the heading “Account Terms” indicate that without the acceptance of a Trading Account Application, the request for supply of goods would be on cash on delivery terms. A proper reading of clause 5 must be that any payment terms beyond cash on delivery must be the subject of an accepted credit account, whether it be 7, 14 or 30 days.  
78	For the foregoing reasons, if the (assumed) guarantee had been provided, then the provision of the trading account to Aarons Outdoor Living was good consideration for the guarantee.  
Issue 4: Whether the Terms of Sale governed the supply of goods? 
79	Giddings’ solicitor wrote to TW Timber on 14 March 2021 advising that for the purposes of the proceeding and pursuant to the overarching obligations to narrow the issues in dispute, the answer to the fourth issue for determination is “yes”.  
80	I find that the Terms of Sale governed the supply of goods.  
Issue 5: Whether Giddings is liable under his guarantee for interest calculated at 16% per annum on the amounts outstanding in accordance with clause 5(h) of those Terms of Sale?
81	The issue that arises in this context is whether Giddings would be liable for interest pursuant to the Terms of Sale accruing after the DOCA being wholly effectuated.  
82	Giddings submits he is not liable after the DOCA being wholly effected because of the terms of the guarantee, which is expressed to be in respect of “the due and punctual payment and performance by the Applicant/Customer of all its obligations to [the plaintiff]” (“Acknowledgment’s (sic) of Agreement” form, cl 6). He says that to the extent that there is any doubt about the scope of the clause, it is an established principle of construction that such a doubt is to be resolved in favour of the surety. 
83	Giddings contends that under the DOCA, upon its termination, all Claims by any creditor would be discharged and extinguished. Claims are relevantly defined to include “all actions […] whether certain or contingent, present or future, ascertained or sounding only in damages, the circumstances giving rise to which occurred, or arose, on or before the Appointment Date” (CB204). Giddings claims that Aarons Outdoor Living’s liability to pay interest falls within the scope of this definition. 
84	Giddings refers to the Full Court of the Federal Court decision in Lam Soon Australia, as to the effect of a DOCA on future claims, which stated:
“There can be no doubt that where a financier has, before a company becomes subject to administration under Pt 5.3A, lent money to it on the security of a mortgage of its property, the claim of the financier for the principal sum lent, and its claim for interest, are ‘claims arising on or before the day specified’ in the deed […].”  [Emphasis added] 
85	Giddings argues that Aarons Outdoor Living’s liability to pay interest may also be similar to a company’s contingent liability under a guarantee, which is discharged under a DOCA, and a lessee’s obligation to pay future rent, which may also be discharged. Giddings contends that it follows that upon termination of the DOCA upon its being wholly effectuated (CB422), Aarons Outdoor Living’s liability to pay interest, which arose out of circumstances occurring or arising on or before the appointment date, was discharged.  
86	Giddings says that it further follows that because Aarons Outdoor Living’s liability to pay interest under the Terms of Sale was discharged, interest did not continue to accrue under the  Terms of Sale, and accordingly, Giddings would not be liable to pay any such contractual interest under the guarantee (the subject of which was Aarons Outdoor Living’s obligations).
87	TW Timber argues that s444J of the Corporations Act 2001 (Cth) provides that the release of a company’s debts under a deed of company arrangement pursuant to s444H does not affect a creditor’s rights under a guarantee or indemnity.  
88	Further, TW Timber relies on Chesterman JA in Hanson Construction Materials Pty Ltd v Davey:
If the debts of the company are released by deed of company arrangement, whatever terms the deed uses to express the facts of release, s 444J operates to exempt a creditor’s rights under a guarantee or indemnity from the release.[Emphasis added] 
89	TW Timber also refers to Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd for the proposition that the effect of s444J is that the DOCA does not release the guarantee.  
90	Giddings does not rely on the DOCA for the purposes of discharging the (assumed) guarantor from his liability to the creditor, but rather looks to the words of the guarantee itself (cf Ali Shipping Corporation v Jugobank DD Beograd Jugobanka Split). 
91	Both parties agreed that if Giddings was not liable for the interest payable under the Terms of Sale, then it was open to TW Timber to claim interest under s58 of the Supreme Court Act 1986 (Vic) from 1 December 2016, being the date of the demand made on Giddings under the (assumed) guarantee.  
92	In light of my finding that Giddings did have legal intention to enter into a director’s guarantee, it is not necessary for me to answer this question.  
93	If I am wrong in my determination on issue 2, then I would find that Giddings would be liable for interest pursuant to the Terms of Sale accruing until 24 October 2016 after the DOCA became wholly effectuated in light of the particular wording of the alleged guarantee. I do not rely on the clauses contained in the DOCA but rather the terms of the form of the guarantee itself, which confines the guarantor’s obligation to that of Aarons Outdoor Living to TW Timber. On the DOCA being wholly effectuated, Aarons Outdoor Living’s obligation to TW Timber ceased. This does not purport to discharge the guarantor from their obligation under the guarantee by way of the total amount outstanding (inclusive of contractual interest) at that point in time and thus does not fall foul of s444J of the Corporations Act 2001 (Cth). 
94	The terms of the guarantee are expressed to be in respect of “the due and punctual payment and performance by the Applicant/Customer of all its obligations to [the plaintiff]”. The guarantee is not drafted in terms of an indemnity, for example, that it contemplates an indemnification against loss suffered by TW Timber that is unenforceable because of the debtor’s death, insolvency and incapacity and that such indemnity is continuing and ongoing, including all monies and embracing interest payable on the principal debt advanced by the creditor.  
95	The DOCA does not affect the creditor’s rights under the guarantee or indemnity but those rights are only as good as what the guarantee stands for. I accept Giddings’ submissions that the terms of the guarantee in issue (expressed as it is by reference to Aarons Outdoor Living’s obligations), is such that the guarantor’s obligation to pay interest comes to an end upon the discharge of the corporate debtor after the DOCA became wholly effectuated as Aarons Outdoor Living was released from all claims by any creditor (DOCA, cl 12.3).
96	In light of my findings above, if the (assumed) guarantee was enforceable, then Giddings would be liable for interest on a daily rate of 16% per annum on overdue monies up until 24 October 2017 and thereafter from the date of the demand made on Giddings under the guarantee, being 1 December 2016, TW Timber would be entitled to interest on the outstanding amount pursuant to s58 of the Supreme Court Act 1986 (Vic).  
Conclusion
97	Accordingly, I find that the plaintiff’s claim ought to be dismissed.  

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Certificate
I certify that tit’s hese 18 pages are a true copy of the judgment of Judicial Registrar Burchell delivered on 19 March 2021.
Dated: 19 March 2021
Gillian Lee
Associate to Judicial Registrar Burchell