Collis v Howard Recycling Services Pty Ltd

Medium Neutral Citation: Collis v Howard Recycling Services Pty Ltd [2025] NSWSC 1484

Hearing dates: 12 February 2025

Date of orders: 12 December 2025

Decision date: 12 December 2025

Jurisdiction: Common Law

Before: Garling J

Decision: (1) Appeal upheld.
(2) Vary the terms of the judgment in the Local Court entered on 27 March 2024 so that the judgment reads:
(i) Amended Statement of Claim filed 25 October 2023 is dismissed.
(ii) Howard Recycling Services Pty Ltd is to pay the costs of Garry Collis.
(3) Defendant, Howard Recycling Services Pty Ltd to pay the plaintiff, Garry Collis’ costs of these proceedings.

Catchwords: CONTRACTS – Formation – Uncertainty – Intention to contract – Whether a contract existed between the parties – Objective assessment of conduct and surrounding circumstances to demonstrate an intention to create legal relations – Where party has a history of dealing with the plaintiff in both a personal and professional capacity – Where history of friendly favours for reimbursement of expenses exists between the parties – Requisite intention not proved – Lack of specific terms and indicia suggesting intention to create legal relations – Ground of appeal upheld
CONTRACTS – Error of law – Where it is an error of law for a finding of fact to be made where there is no evidence to support that finding – Agency – Whether a party was acting as agent for the defendant when engaging the plaintiff – Where no evidence to suggest that the party had the authority as agent for the defendant – Where evidence suggests the contrary – Where party allegedly acting as agent an undischarged bankrupt – Error of law established – Ground of appeal upheld
APPEALS – From error of law – Appeal from Local Court to Supreme Court – Terms of the Local Court judgment varied

Legislation Cited: Local Court Act 2007 (NSW) ss 39, 40, 41

Cases Cited: Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1
Ermogenous v Greek Orthodox Community of S.A. Inc [2002] HCA 8; (2002) 209 CLR 95
Keighley, Maxsted & Co v Durant [1901] AC 240
Kelly v Mina [2014] NSWCA 9
Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141
Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146
R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270
US Manufacturing Co Pty Ltd v ABB Service Pty Ltd [2008] NSWSC 705
White v Baycorp Advantage Business Information Services Ltd [2006] NSWSC 441; (2006) 200 FLR 125

Texts Cited: Not Applicable

Category: Principal judgment

Parties: Garry Collis (P)
Howard Recycling Services Pty Ltd (D)

Representation: Counsel:
P Gaffney (P)
R Marshall SC (D)
Solicitors:
Nash Allen Williams & Wotton (D)

File Number(s): 2024/132500

Publication restriction: Not Applicable

JUDGMENT

1. On 29 October 2024, Mr Collis filed an Amended Summons, commencing an appeal and seeking leave to appeal from a Local Court judgment.

2. The judgment, the subject of these proceedings, was entered in the Local Court on 26 March 2024, in favour of Howard Recycling Services Pty Ltd (“Howard Recycling”) in the sum of $46,119.07. As well, Mr Collis was ordered to pay the costs of Howard Recycling.

3. The Local Court heard the proceedings over two days, at the end of which the Magistrate delivered an ex-tempore judgment.

Relevant Statutory Provisions

4. There is a limited right of appeal from the Local Court, in its General Division, to the Supreme Court of New South Wales.

5. Section 39 of the Local Court Act 2007 (NSW) (“Local Court Act”) provides for a right of appeal in the following way:

“39 Appeals as of right

1. A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law.

2. …”

6. There is a broader provision for an appeal by leave of this Court, where there are grounds involving mixed questions of fact or law. Section 40 of the Local Court Act provides for this path of appeal in the following terms:

“40 Appeals requiring leave

1. A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court.

2. …”

Leave

7. Having regard to the way in which the hearing of the proceedings in the Local Court unfolded, the fact that Mr Collis was unrepresented there, and the fact that the grounds of appeal in this Court are, on their face, worthy of careful consideration, I am of the view that it is appropriate to grant leave to Mr Collis, to the extent necessary to raise any question of mixed law and fact, as articulated in his three grounds of appeal.

8. It is now necessary to consider those grounds of appeal, without needing to differentiate in these reasons between questions of law, and mixed questions of law and fact.

Further Amended Summons

9. At the beginning of the hearing in this Court, with the consent of Howard Recycling, I granted leave to Mr Collis to file a Further Amended Summons (“FAS”), which set out the grounds of appeal in the following way:

“1. The acting magistrate made an error of law in holding that the plaintiff and the defendant entered into the contract the subject of the judgment (‘the Contract’), because the admissible evidence … was not capable of supporting a finding that:

…

(c) the agent who allegedly entered into the purported contract did so within the scope of authority conferred on him by the defendant.

2. Alternatively, the acting magistrate made an error of law, or alternatively an error involving a question of mixed fact and law, in holding that the plaintiff and the defendant entered into the Contract because, on the admissible evidence … the Court ought to have held that it could not be satisfied on the balance of probabilities that:

(a) the parties intended to enter into binding legal relations; or

…

(c) the agent who allegedly entered into the purported contract did so within the scope of authority conferred on him by the defendant.

3. The acting magistrate made an error of law in failing to provide adequate reasons for his findings that:

(a) the parties intended to enter into binding legal relations; or

(b) the purported contract was supported by a consideration; or

(c) the agent who allegedly entered into the purported contract did so within the scope of authority conferred on him by the defendant.”

10. Mr Collis submitted that those reasons for judgment:

11. did not identify or apply the correct tests for determining whether the parties intended to enter into binding legal relations and whether the defendant entered into the purported contract through an agent;

12. did not identify any facts explaining when and how the requisite authority was conferred on the putative agent by the time of the putative contract;

13. relied upon irrelevant matters, including that Howard Recycling was party to the putative contract; and

14. failed to take into account matters that were material to the issue of whether the parties intended to enter into binding legal relations.

Local Court Proceedings

11. As earlier indicated, the Local Court proceedings took place over two hearing days.

12. The claim by Howard Recycling against Mr Collis was for the sum of $33,350, plus interest and costs.

13. The subject matter of the proceedings was two marine outboard motors (“the motors”).

14. Howard Recycling claimed that there existed a contract between it and Mr Collis, for Mr Collis to transport the motors from the vendor, in Tweed Heads, to the premises of Howard Recycling, at Wyee on the Central Coast of NSW. The claim was that Mr Collis had collected the motors and taken them to his own home at Bootawa, where he had kept them in his shed and refused to deliver them to Howard Recycling, in accordance with his contractual obligations.

15. Accordingly, the causes of action upon which Howard Recycling relied were for damages for breach of contract, and for damages in detinue.

16. Prior to the hearing, and in accordance with the usual procedure in the Local Court, the matter had been referred for arbitration. The arbitration apparently occupied seven days.

17. The arbitration concerned two separate Local Court claims: one about an issue relating to fencing; and the other about the motors. Mr Collis succeeded on both of the claims at the arbitration. Initially, when Howard Recycling appealed, it included the judgment in favour of Mr Collis on the fencing dispute. However, that appeal was later withdrawn.

18. In substance then, the hearing before the Local Court, from which these proceedings arise, at which Mr Collis represented himself, occupied two days and concerned only the claims relating to the motors.

19. It is fair to say, and counsel for Mr Collis accepted, that the proceedings in the Local Court were made more complex and fractious by the behaviour of Mr Collis, whilst representing himself. He demonstrated an obvious tendency to engage in irrelevant debate and questioning. Nevertheless, the Court was obliged to determine the issues posed by the pleadings having regard to the evidence.

20. Perhaps this exchange between the Local Court Magistrate and Mr Collis adequately illustrates some of the flavour of the hearing at the Local Court at Forster:

“HIS HONOUR: I’ve read all the stuff. There’s some scallywags here.

[MR COLLIS]: Yeah, too right there is.”

21. The principal witness called by Howard Recycling was Mr John Howard. There is no doubt that Mr Howard and Mr Collis had known each other for a long time. They were long standing friends.

22. It was Howard Recycling’s case that an oral contract was entered into by Mr Howard, on its behalf, with Mr Collis for the transport of the motors. There was no suggestion from either party that there was any written contract. It was Mr Collis’ case that he had been asked for a favour by a friend, Mr Howard, and that he had been asked to collect and store the motors at his property in Bootawa because Mr Howard had no room at his property. Mr Collis’ case was that, in being asked to do this favour for Mr Howard, Mr Howard said that he would reimburse him for his petrol and time. He said that there was no contract, that he did his work in a “voluntary capacity”, as a favour to Mr Howard.

23. It was not in dispute between the parties that the discussion between Mr Howard and Mr Collis occurred in late January 2019, and that Mr Collis picked up the motors at Tweed Heads on 1 February 2019 and took them to his address at Bootawa, where the motors were unloaded from his truck, and stored.

24. Howard Recycling also brought its claim in detinue, as earlier noted. It claimed that Mr Collis had collected the motors, taken and kept possession of them and had never returned the motors, despite being requested to do so.

25. In answer to the case in detinue, Mr Collis gave evidence that, on 30 October 2019, Mr Howard had collected the motors and removed them from his property. His evidence was that he was not in possession of the motors at any time thereafter.

26. The issues of fact posed for determination, in respect of the case in detinue brought by Howard Recycling, occupied significant time and much evidence at the hearing. Ultimately, Brennan ALCM was not persuaded that the outboard motors had been collected by Mr Howard in October 2019, but equally, he was not satisfied, on the evidence, that Mr Collis was still in possession of the outboard motors at the time of the proceedings. He dismissed the claim in detinue brought by Howard Recycling.

27. There is no appeal to this Court by Howard Recycling against the Magistrate’s decision with respect to the claim in detinue.

28. Accordingly, that claim does not need to be further considered in this judgment.

Local Court Pleadings

29. In the Local Court proceedings, the plaintiff pleaded its cause of action in the following terms:

“Contract

2. At all material times the Defendant was a contractor employed by the Plaintiff.

3. On or about 14 August 2018, the Plaintiff purchased two Mercury outboard motors (the motors) more particularly described as:

3.1 2B467170 Mercury / 150 4 stroke; and

3.2 2B412665 Mercury / 150 4 stroke

at a total cost of $33,350.

4. In or about January 2019 the Plaintiff contracted the Defendant to transport the motors from Tweed Coast Marine, 32 Machinery Drive, Tweed Heads South, NSW, to the Plaintiff’s place of business at 40 Rutleys Road, Wyee, NSW.

5. On 1 February 2019 the Defendant, in part performance of the contract, uplifted the motors from Tweed Coast Marine.

6. In breach of the contract the Defendant took the motors to his residence at … Bootawa NSW.

7. Requests for delivery of the motors to the Plaintiff’s place of business have been ignored.”

30. In response to that part of the pleading, in a Further Amended Defence filed 26 October 2023, the following was pleaded:

“Contract

2. The Defendant denies paragraph 2 hereof.

3. The Defendant does not know and cannot admit the facts pleaded in paragraph 3 hereof.

4. The Defendant denies paragraph 4 and says that there was no contract to pick up and transport the motors or delivery them to … Wyee NSW. The Defendants says he agreed with John Richard Howard to pick up the motors from Tweed Heads as a favour to John Richard Howard and to keep them at the Defendant’s home in Bootawa for John Richard Howard to pick them up from there.

5. The Defendant does not admit paragraph 5 of the Statement of Claim.

6. The Defendant denies paragraph 6 of the Statement of Claim and says that he agreed to store 2 motors for John Richard Howard in his home from where John Richard Howard collected the motors on or about 30 October 2019 and the Defendant has not seen them since.

7. The Defendant denies paragraph 7 of the Statement of Claim and says that he cannot deliver something which has already been collected by John Richard Howard.”

Judgment of the Local Court

31. As earlier indicated, Brennan ALCM gave an ex-tempore judgment.

32. The judgment dealing with the contract claim is, relevantly, as follows:

“The matter before the court is claim under the Civil Claims Act between the company, Howard Recycling Services Pty Ltd, and the defendant, Garry Collis. The matter commenced, it appears, on 10 March 2021. There have been defences filed, amended statements of claim filed and amended defences, but put shortly it is the claim for $33,350 for the cost of replacing – or for the loss of a couple of outboard motors and there is interest involved, but not fees.

The prosecution [sic] case is that an agreement was reached between John Howard, who apparently works for the company, and the defendant, that the defendant would transport to Queensland some steel fixtures. He had to go up there to get some tires in his truck – well, he carried them on his truck, and it was agreed that he would collect these motors which had been purchased a few months prior and bring them back into NSW and down into this area.

It is disputed as to whether they were to go to a place at the request of the company, probably being Mr Howard’s property, or whether the defendant could retain them until they were either picked up or wanted by the Howards. Apparently, there was no problem with getting to Queensland, taking the steel up, bringing the motors back. The motors did not go to the Howards. They went to the defendant’s property.

Was there a contract? The defendant says there was not. He had a relationship with the company and Mr Howard, it was not only with Mr Howard. He used to do work for them. He seems to say that he would be paid in worksheets and there are worksheets here, and he would be paid in kind except for when he used his own money or when money was being paid back for two loans, one of $20,000 and one of $12,000 – which apparently came out of Mr Collis’ superannuation fund which he lent to Mr Howard.

There is evidence before the Court that when Mr Howard and the defendant spoke about taking steel to Queensland and bringing the motors back, that the defendant would be paid for his effort. In one of the timesheets, which is part of Belinda Giffen’s - I think it is Exhibit 4. The document is headed, for some reason ‘B15-2019’ and it looks like 30 and 31 January 2019, ‘Brizzy’ which is short for ‘Brisbane’… ‘9 hours, 9 hours’ so it is probably up and back. There’s lots of pages with lots of hours and there seems to be a monetary value placed on those hours.

Now, it is not clear in the evidence whether those monetary hours were actually paid to the accused or [sic] all the time in relation to what we might call bartering, ‘I’ll do this if you’ll do that, but we’ll put a value on what I do and a monetary value on what you give me, a tank or something for my farm’, or whether he got paid for some it, but there are units of hours which turned into either – to a cash value which either came back as payment to the defendant.

He did have, ‘he’ being the defendant, did have a relationship with the company. He says it was only helping a mate out, but I look at one of the documents attached to the timesheets and it is from Manning River Steel Supplies ‘Picked up by Gary’ with his phone number there, with Howard Recycling Services ‘Payroll at Howards’ and ‘Belinda’ and her phone number. So, he was certainly doing things for the company.

…

To my mind, he was engaged with the company. The motors were owned by the company. The credits in hours were billed to the company. To my mind, through the company’s agent, John Howard, the defendant had a contract to take the stuff to Queensland, bring the motors back.

…

… It is possible – I do not say probably – it is possible that John Howard did ask for the defendant to keep them on his property. I say that because the boat was not going anywhere fast, the boat that he was building. He did not need the motors until the build got to a certain stage. They probably would have had to have been in indoors and it seems that through his friendship with the defendant, it is possible that he asked him to shed them.

…

The defendant is unrepresented. He did struggle to put his case. He had a lot of paperwork here. He is not learned in the law, though for him, I think he did his best, but I had to pull him up and I had to stop him leading a lot of evidence he wanted to lead. These cases have to follow a certain course and the Court should focus on what the issues are.

It may well be that John Howard does not always walk the narrow path of straight and narrow, leading that sort of life. Not a lot of people do. But if he is a villain, as the defendant says he is, in my experience he did not do what villains do. He did not send people around with baseball bats and hammers. He went to the police and the police said ‘this is a civil matter’, so he came to – went and saw lawyers and came to court. That does not mean that he might not have some skeletons in his closet, but this case has not really been won or lost too much on people being cross-examined in the witness box. As I say, I gave a lot of weight to the text messages.

SO THAT BEING THE CASE, I PROPOSE TO FIND FOR THE PLAINTIFF AND ENTER JUDGMENT ACCORDINGLY.

Having found that there was a contract, I am dealing with this as a breach of contract, and proceeding on that basis, not a tort in detinue. …”

33. The Magistrate then went on to identify various amounts for costs and interest, and ultimately entered judgment in the following form:

“HIS HONOUR: SO THE ORDER IS JUDGMENT $33,350. COURT COSTS $160. INTEREST UNDER S 100 AS DETERMINED BY THE REGISTRAR FROM 1 FEBRUARY 2019. THE DEFENDANT TO PAY THE PLAINTIFF’S PROFESSIONAL COSTS AS AGREED WITHIN 28 DAYS OR AS ASSESSED.”

34. The order was formally entered on 27 March 2024.

Proceedings in this Court

35. This Court had the benefit of being assisted on the hearing of the appeal by Mr Gaffney of counsel, who appeared for Mr Collis, pursuant to a referral made by the Court to the Pro Bono Panel.

36. Howard Recycling was represented by Mr Marshall SC. The Court received considerable assistance from both counsel and expresses its gratitude to them. Because of that assistance, this Court was in a much-advantaged position to consider this matter than was the Local Court Magistrate.

37. Counsel for Mr Collis identified three principal areas which, he submitted, would lead to the relief sought. The first issue was whether there was an intention to create legal relations. The second issue was whether the conclusion of agency, i.e., Mr Howard’s capacity to bind the company (Howard Recycling) was, on the facts, simply not capable of being made out, and that such conclusion was erroneous. The consequence of either or both of these grounds, should Mr Collis succeed on argument, was that no contract existed between Mr Collis and Howard Recycling.

38. The third area identified by counsel for Mr Collis was that the Magistrate’s reasons for decision on those two subjects were wholly inadequate.

Legal Principles

Intention to Create Legal Relations

39. Given the content of the pleadings, and, specifically, the denial by Mr Collis that there was any contract in existence in addition to the assertion that he was doing a favour for a friend, counsel submitted that the onus fell on Howard Recycling to properly prove the existence of the contract, which necessarily involved, at the outset, proving an intention to create legal relations.

40. Counsel drew attention to the relevant legal test which he submitted could be found in the decision of the High Court of Australia in Ermogenous v Greek Orthodox Community of S.A. Inc [2002] HCA 8; (2002) 209 CLR 95, in the joint judgment of Gaudron, McHugh, Hayne and Callinan JJ, at [25], which is the following terms:

“[25] Because the inquiry about this last aspect may take account of the subject-matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not be found to exist, it would be wrong to do so. Because the search for the ‘intention to create contractual relations’ requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might be properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word ‘intention’ is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.”

41. In considering that question, the joint judgment drew attention to the fact that proceeding by way of presumptions was of doubtful utility. At [26], their Honours said:

“In this context of intention to create legal relations, there is frequent reference to ‘presumptions’. It is said that it may be presumed that there are some ‘family arrangements’ which are not intended to give rise to legal obligations and it was said in this case that it should not be presumed that there was an intention to create legal relations because it was a matter concerning the engagement of a minister of religion. For our part, we doubt the utility of using the language of presumptions in this context. At best, the use of that language does no more than invite attention to identifying the party who bears the onus of proof. In this case, where issue was joined about the existence of a legally binding contract between the parties, there could be no doubt that it was for the appellant to demonstrate that there was such a contract. Reference to presumptions may serve only to distract attention from that more basic and important proposition.”

42. Counsel for Mr Collis submitted that the Magistrate was required to pay attention to whether or not there was any intention to create contractual relations by objectively assessing the state of affairs between the parties and, in particular, examining what was said or done in the “contractual” negotiations to form an objective view as to whether any intention to create a contract existed. Counsel noted that, where the existence of the contract was challenged, it was a matter for Howard Recycling to prove, on the balance of probabilities, that such a contract existed.

43. Counsel, on the question of how a Court should go about determining the existence of an intention to create a legally binding contract, referred to the decision of Kelly v Mina [2014] NSWCA 9 where, at [96], Barrett JA with whom Ward and Leeming JJA agreed, said this:

“[96] But the objective theory of contract formation pays attention only to what the parties said and did before and at the point at which a contract allegedly came into existence. The question is as to intentions as they existed at that point. Those intentions are to be ascertained by reference to antecedent and contemporaneous words and actions. The fact that, after the relevant point, either or both parties act consistently with what one then alleges to be a contractually binding term is no indication that the term is of that quality; and, in the same way, inconsistent conduct of one or both parties does not indicate that the term is not binding.”

44. Finally, in submitting, with respect to this issue, that it was a question of law which fell within s 39 of the Local Court Act, and accordingly Mr Collis had a right of appeal, counsel drew attention to the decision of the plurality, French CJ, Kiefel and Bell JJ, in Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1 at [27], where their Honours said:

“[27] … It is certainly the case that the question as to what was actually agreed between the parties, which is to say the terms of the consensus reached, is a question of fact. … Questions as to the terms of any offer and any consensus reached, including the subject matter of any agreement, are questions of fact. But, questions whether a statement has a quality which the law requires and whether, objectively, it could be said to be intended to be contractually binding are questions of law.”

Contracting Through Agents

45. If a person (the agent) is entering into a contract on behalf of a principal, and the principal sues on the contract, then the principal must prove that the agent had the requisite authority to enter the contract on its behalf.

46. In Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1989) 170 CLR 146 at 172, Brennan J explained:

“A company is bound by an act done where the person who does it purports thereby to bind the company and that person is authorised to do so … Authority for the purpose id served either directly from the constitution of the company or from some antecedent act (typically a resolution o f the governing body) which is itself binding on the company … Conversely, the company is not bound when the person who does the act has neither actual nor ostensible authority to bind the company.”

47. Further, at 173, Brennan J said:

“In determining whether an act … does bind the company, it is not the character which would be attributed to an authorized act which matters. The material inquiry calls for identification of the particular act, the person who did it, and the authority – actual or ostensible – of that person to bind the company by the doing of that act.”

48. Where the agent does not disclose the existence of a principal on whose behalf the contract is being entered, that principal may sue on the contract, but only if the principal can, and does, prove the existence of the agent’s authority at the time the contract was entered into, and that the terms of the contract and the surrounding circumstances do not indicate that the agent was, in fact, the principal: see White v Baycorp Advantage Business Information Services Ltd [2006] NSWSC 441; (2006) 200 FLR 125 at [70]-[71].

49. If there is no actual authority for the agent to act for the principal, later ratification of the contract is unavailable: see Keighley, Maxsted & Co v Durant [1901] AC 240; Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141 at 150 per Hayne JA; Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270 at 276 per McHugh JA (Hope and Priestly JJA agreeing).

Evidence Before the Local Court

50. Counsel took this Court to what he said was the only evidence bearing on the issue of the parties’ intention to create legal relations. Counsel drew attention to the conversation recounted in affidavits which were put before the Local Court.

51. In an affidavit sworn 12 July 2021, which was apparently marked Exhibit 11, Mr Collis said this:

“3. I have never been employed by the Plaintiff Company in the capacity of an employee or contractor. I have, however, from time to time, helped out a man who I thought was my friend, namely, John Richard Howard, to undertake various jobs for which I was reimbursed my expenses.

…

6. I acknowledge that I agreed to travel to Brisbane to collect two motors on or about 30 to 31 January 2019. I was going there to buy wheels for my off-road camper truck.

7. When I told John Richard Howard I was going to Brisbane, he asked me ‘can you deliver some heavy steel stands and bring back two outboard motors if I pay your fuel and other expenses?’.

8. Because I thought John Richard Howard was my friend, I agreed to do that for him. As far as I was concerned, it was a favour for a mate. There was no contractual arrangement between myself and the company and I was not employed by the company. I was doing a favour for a person I considered to be a friend and for which I was given a reimbursement of expenses. The work was done in a voluntary capacity.

9. On 31 January 2019, I unloaded stands at Archer field Queensland and then went north to Brisbane and bought my wheels. Then I came back to Tweed Heads and picked up the two motors. There was no paperwork. I just collected them. … I then travelled back home.

10. John Richard Howard asked me ‘Can you store the motors at your place as I’ve got no room at mine, even my ski boat is in a storage facility. Please don’t tell anyone about the motors, not even Jodie’. Jodie is his wife.”

52. In a further affidavit sworn on 16 October 2021, which was marked Exhibit 12, Mr Collis said this:

“3. I’ve never been employed by the Plaintiff Company. I have, however, carried out some work for them for which I have had my expenses reimbursed. I have also from time to time helped out a man who works for the company and who I thought was my friend, namely John Richard Howard, to undertake various jobs for which I was sometimes … reimbursed my expense and sometimes was unpaid, doing the work as a favour for a mate.

…

5. In relation to the statement of Belinda Giffin filed in these proceedings dated 29 June 2021, in respect of paragraph 4 of that affidavit, John Richard Howard and I discussed that the motors would be stored at my place as he had no room at his place. He told me at the time, ‘Even my speed boat is at a storage facility. I do not have any room to keep them at my place and I do not want anyone to know about them’. I was told by John Richard Howard that he was an undischarged bankrupt at the time and he told me Jodie (being his wife) ‘does not know that I am buying the motors’.

6. In relation to paragraph 10 of Belinda Giffin’s affidavit dated 29 June 2021, I was going to Brisbane to pick up wheels for my off-road camper and John Richard Howard asked ‘Can you take the stands up?’. Because they were so heavy, I said ‘I’ll have to take my truck if you want me to take the stands’ and so he told me ‘I’ll pay for your time and fuel if you take your truck’. It was a good deal for John as he did not have to hire his own truck and I agreed to do it as his mate.

…

10. I acknowledge that I agreed to travel to Brisbane to collect two motors on or about 30 to 31 January 2019. I was going there to buy wheels for my off-road camper truck in any event.

11. John Richard Howard asked me to deliver some heavy steel stands and bring back two outboard motors and offered to pay my fuel and other expenses when he found out I was going to Brisbane anyway.

12. Because I thought John Richard Howard was my friend, I agreed to do that for him. As far as I was concerned it was a favour for a mate. There was no contractual arrangement between myself and the company and I was not employed by the company. I was doing a favour for a person I considered to be a friend and for which I was given a reimbursement of expenses. The work was done in a voluntary capacity.”

53. The affidavit went on to repeat the substance of what had earlier been said, to which I have already referred.

54. The evidence put before the Court by Howard Recycling on the issue of the contract, included the evidence of Ms Belinda Giffin who was not said to be present at any time during the interaction between Mr Collis and Mr Howard in January 2019. She did not give any evidence as to what transpired between Mr Collis and Mr Howard. In her statement of 29 June 2021, she said:

“2. The Defendant worked for the Company and provided handwritten Invoices upon which we paid.

…

4. From that Time Sheet you can see that the Defendant had recorded the trip to Brisbane to deliver the steel stands and pick up the motors.

5. That entry is 30 and 31 January 2019 with the word ‘Brisy’ next to the entry.”

55. The relevant entries to which Ms Giffin referred must have come into existence after the trip to and from Brisbane had been undertaken. Those entries are not capable of informing the issue about intention to enter into contractual relations.

56. In an affidavit, sworn 23 November 2021, Ms Giffin informed the Court that she was the “B**ookkeeper/Payroll O**fficer” for Howard Recycling. That affidavit was in addition to the previous witness statement and substantially described the contents of a running sheet recording a series of entries of monies paid to Mr Collis, or else invoices which had been paid on his behalf. It also recorded loans made by Mr Collis directly to Mr Howard for his personal purposes.

57. Mr John Howard also gave evidence in support of the case for Howard Recycling.

58. In a witness statement of 29 June 2021, Mr John Howard said this:

“4. The Defendant had done work for the Company on and off since early 2017.

5. On or about January 2019 he was hired by the Company to transport steel stands to Queensland.

6. He used his own truck on this occasion.

7. For the return journey the Company engaged the Defendant to pick up the outboard motors from Tweed Coast Marina and bring them back to the Company’s premises at … Wyee.

…

11. Instead of the delivering of the motors to the Company’s address, the Defendant took them to his property at … Bootawa.

12. I received a telephone call from the Defendant at this time and he said words to the effect: ‘I am taking the motors to my property (… Bootawa) and I will deliver them to you next week when I come down to Wyee’.

13. I think at this time I said to him words to the effect ‘These motors do not belong to me, they belong to Howard Recycling Services’.”

59. In a subsequent witness statement, Mr Howard asserted that the defendant was paid for the Brisbane trip, but did not give any account of the conversation leading up to the arrangement to travel to Brisbane and collect the motors on his return trip.

60. An account of the arrangements to collect the motors from Tweed Heads Marine was given by Mr Howard in his statement of the 12 November 2023. In that statement, Mr Howard did not recount the words that were exchanged between he and Mr Collis, but rather said this:

“6. On or about January 2019 he was hired by the Plaintiff to transport steel stands to Queensland.

7. He used his own truck on this occasion.

8. For the return journey, the Plaintiff engaged the Defendant to pick up the outboard motors from Tweed Coast Marine and bring them back to the Plaintiff’s premises at … Wyee.”

He then repeats the substance of the evidence to which I have earlier referred.

61. The extracts from the two witness statements of Mr Howard, to which reference has just been made, do not set out any detail of how the oral agreement was made, rather, they are framed to assert a conclusion that there was a contract entered into between Howard Recycling and Mr Collis. Stated in that way, the evidence provides no assistance in the analysis of either issue posed by grounds 1 and 2 in this appeal.

62. When Mr Howard was called to give evidence, his statements were tendered and became exhibits. He affirmed the truth of the material in those statements. He gave no further evidence-in-chief. In cross-examination, the following occurred:

“[Mr Collis]

Q: When I was going to Queensland to pick up those tyres for my 4WD campervan you were aware I was going up and you asked me to take some stands up. Is that correct?

A: That’s correct.

…

Q: I was going up and you said ‘could I take those stands up’.

A: That’s correct.

Q: Yes and then you asked me if I could pick up the motor and bring it back.

A: That’s correct.

…

Q: Was there any written agreement of such?

A: But you invoiced for the agreement and everything that you’ve done was on behalf of the company not on behalf of me.

Q: And you were a bankrupt weren’t you in that company?

A: I was still allowed to earn money at that time.”

63. With the exception of these answers in cross-examination, which covered some, but not all, of the relevant conversations leading to Mr Collis collecting the motors, Mr Howard did not give any evidence of the conversation, nor the circumstances surrounding it, or his role, if any, in Howard Recycling at that time. Nor did he give any evidence of his authority to enter any contracts on behalf of Howard Recycling.

64. Mr Collis gave evidence and affirmed the correctness of his affidavits, to which reference has been made above. He did not give any further evidence-in-chief about the agreement to collect the outboard motors.

65. In cross-examination, Mr Collis was asked questions about that part of the conversation where he said that he had been asked by Mr Howard to take the motors to his own home and store them there, rather than taking them to Wyee. Mr Collis said, in the course of his cross-examination, that he thought that the conversation about taking the motors back to his place occurred after he had picked the motors up.

66. Otherwise, it is apparent from the transcript of the Local Court proceedings that the version of the conversation given by Mr Collis in his written evidence was not challenged. To the contrary, the following exchange occurred between counsel for Howard Recycling and Mr Collis:

“Q: Yes. Paragraph 6, you say you said ‘I’ll have to take my truck if you want me to take the stands’. That’s what you said to him wasn’t it?

…

Q: Can you see your next evidence is John said to you ‘I’ll pay for your time and fuel if you take your truck’. Do you see that?

A: Yeah.

Q: And that was correct wasn’t it?

A: Well you’re not going to do it for nothing.

Q: … That was over two days wasn’t it?

A: That’s correct.

Q: And you charged for those two days didn’t you?

A: I charged my time.”

67. Later in cross-examination, an exchange took place concerning Mr Collis saying that the work was done in a voluntary capacity. The cross-examination by counsel for Howard Recycling was as follows:

“Q: Yeah, you were paid for the work?

A: Yeah, I volunteered my services.

Q: OK, that’s what you mean by voluntary is it? That you …

A: Well, --

Q: --volunteered your services.

A: I volunteered to help him. I was never engaged in a --

Q: No, no, that’s –

A: -- written contract.

Q: Sorry

A: There’s no written contract for this job. There’s no delivery --

Q: Look, nobody wants --

A: -- there’s no delivery cost.

Q: -- you to go on about that, it has no relevance at all?

A: And nor does you – we don’t want you to go on about the voluntary bullshit.

Q: What you meant by ‘voluntary’ was you decided to do it. Correct?

A: That’s correct.

Q: Because--

A: He asked me to come and work--

Q: Mr Collis I haven’t finished my question. Because you were a medically retired person at that time weren’t you?

A: I am, yes, that’s correct.”

68. In cross-examination, the subject of payment to Mr Collis came up. He said this:

“A: John said he will buy things for me when I work for him and that’s how he based it. …

Q: Mr Collis, just a few minutes ago you admitted you were paid for the trip to Brisbane.

A: I wasn’t paid in cash, no I wasn’t. It was ticked up.

Q: Well.

A: I never drew a wage each week or anything like that. He just ticked it up and if I wanted to buy a water tank or a water trough for my horses or something like that, he would buy it for me and that way he claimed the GST on it.”

69. Later in his cross-examination, Mr Collis reaffirmed that he gave the invoices to Ms Giffin “to keep track of his hours” in response to being told so to do by Mr Howard. He then added this description:

“No, he said ‘keep track of your hours’ and it was always an agreement that if I needed anything for the farm, like irrigation pipes, water troughs, steel, he would buy it so he could claim it through his GST. Ask him if he claimed his GST on it. And that was the sole purpose of it. It was only hours …”

70. I note that there was considerable cross-examination about the relationship generally and in particular about Mr Collis’ assertion that Mr Howard had collected the motors.

Contract Made Through Agent

71. Ground 1 of the Amended Notice of Grounds of Appeal is in the following form:

“The acting magistrate made an error of holding that the plaintiff and the defendant entered into the contract the subject of the judgment because the admissible evidence … was not capable of supporting a finding that

…

(c) the agent who allegedly entered into the purported contract did so within the scope of authority conferred on him by the defendant.”

72. It is to be recalled that the agent relevantly upon whom Howard Recycling relied, was Mr John Howard.

73. In his judgment, Brennan ALCM said of Mr Howard that “… he apparently works for the company …”. He later expressed his conclusion relevantly, in this way:

“To my mind, through the Company’s agent, John Howard, the defendant, had a contract to take stuff to Queensland and bring the motors back.”

74. To justify this conclusion, Howard Recycling had to prove that Mr John Howard was authorised to enter into the contract for the collection and transport of the motors.

75. To the extent that there was any evidence which touched upon Mr Howard’s authority to enter into a contract on behalf of the company in January 2019, it was contained in short compass.

76. Ms Zali Howard, who gave her occupation as an enrolled nurse, completed a witness statement, dated 9 November 2023. The statement was tendered and became Exhibit 5. Ms Howard stated that:

77. she was the sole director of Howard Recycling when the proceedings in the Local Court were commenced in 2021;

78. she said that she had given her father, John Howard, the authority to conduct all matters “… in relation to the legal proceedings in this matter”;

79. she annexed the minutes of a meeting held on 22 June 2021 in which the company resolved to execute a Power of Attorney appointing John Howard as its attorney to conduct “… all matters directly relating and incidental to court proceedings against Garry Collis”; and

80. the General Power of Attorney, which was executed by Ms Howard on behalf of the company, reflected the resolution.

81. Ms Howard gave no evidence about John Howard’s authority to enter into the contract sued upon by Howard Recycling.

82. In a statement of Mr John Howard dated 29 June 2021, he described his occupation at that time as “… the working supervisor for Howard Recycling …”. He then said that he had been given authority, by way of a corporate power of attorney, to conduct the proceedings against the defendant.

83. In that statement, and in a subsequent statement dated 25 November 2021, Mr Howard did not give any evidence, or make any statement, about his employment status, or the fact that he had been given authority to enter into any contract on behalf of Howard Recycling in January 2019, which was the relevant time. Mr Howard was one person who was well placed to give such evidence.

84. In a later witness statement dated 12 November 2023, which was tendered in the proceedings, Mr Howard again eschewed giving any evidence of his role with Howard Recycling at the time the arrangement was made for the plaintiff to collect the motors.

85. As noted at [52] above, Mr Collis had said that, when he was discussing the arrangement to collect the motors, Mr Howard had told him that he was an undischarged bankrupt. This evidence was not the subject of any challenge in the proceedings, nor was there any contrary evidence given.

86. Mr Collis asked these questions in the course of cross-examination:

“Q. And you were a bankrupt, weren’t you, in that company?

A. I was still allowed to earn money at the time.

Q. So, I put it to you that you ran the company?

A. No. I did not.

Q. Who ran the company?

A. I did not run the company. I did not run the company.”

83. After a somewhat lengthy re-examination, Mr Collis was allowed to ask some further questions of Mr Howard by way of cross-examination. That evidence was:

“Q. When were you signed off to be able to make decisions?

A. With what Garry?

Q. With decision for the company? Being a bankrupt, you’re not allowed to just waltz in willy-nilly and do everything: you have to be signed off properly?

A. Is that correct? Okay, well, it was around 2020, 2021. I was a discharged (sic) bankrupt in 2018.

Q. How many times have you been bankrupt?

A. Once.”

84. I would understand the answer above, given by Mr Howard in the context of his evidence, to be that in 2018 he was an undischarged bankrupt.

85. It is of significance to note that, at no stage during the course of Mr Howard’s time giving evidence, did counsel for Howard Recycling re-examine, or seek leave to examine Mr Howard further in-chief, to address the issue of his status as a bankrupt, the timing of it (seemingly being a bankrupt in 2018), and his authority on behalf of the company to enter into an arrangement with Mr Collis with the authority of the company.

86. On 10 November 2023, Ms Jodie-Anne Howard signed a witness statement which became Exhibit 9 in the proceedings in the Local Court. She deposed to being the Office Manager for Howard Recycling at that date.

87. Insofar as there was a contract or agreement to pick up the motors, Ms Howard said:

“In or about January 2019 the Defendant was hired by the Plaintiff to take steel stands to Queensland and pick up 2 x outboard motors … that the Plaintiff had purchased from Tweed Marine.”

88. Ms Howard annexed a bank statement demonstrating that Howard Recycling paid an invoice for the motors.

89. It is to be noted that the statement set out at [87] above, is not one which could have been made by Ms Howard except by acquired knowledge from an undisclosed source, because she was not present in 2019 when the arrangement was made, and she did not work for Howard Recycling at that time. Ms Howard gave no evidence, at all, about Mr Howard’s authority to bind Howard Recycling to any contract in 2019.

90. As earlier noted, Ms Belinda Giffin, who was the bookkeeper for Howard Recycling in June 2021, provided a witness statement, dated 29 June 2021, and a second statement, dated 23 November 2021, and was called to give evidence before the Local Court. She said that she knew Mr Collis, as a friend, and had visited his property in October and November 2019. Ms Giffen said in a third witness statement, which was dated 10 November 2023, that, at the time the Local Court proceedings were commenced, she was the bookkeeper for Howard Recycling.

91. Ms Giffin’s evidence touched upon her bookkeeping duties. She was responsible for the maintenance of a spreadsheet which related to Mr Collis and payments made to him, or on his behalf, and also recording the value of work done by Mr Collis, and amounts incurred by him in carrying out the work.

92. It is plain, and Ms Giffin accepted in her evidence, that the spreadsheet (or ledger) which she prepared included personal loans made by Mr Collis, including to John Howard, and payments made at the request of Mr Collis to third parties. In other words, whilst she maintained the spreadsheet, it recorded both business dealings between Howard Recycling and Mr Collis, and personal dealings between Mr John Howard and Mr Collis.

93. In her evidence, Ms Giffin was not asked any questions, either in-chief or in cross-examination, about what role Mr Howard had with the company at any time at all, including when Mr Collis was asked to collect the motors. She gave her occupation at the time of giving evidence as a book-keeper. When she was asked about details of costs relating to the construction (or renovation) of a “houseboat” or “boat”, upon which the motors were to be used, she said that she was the “business book-keeper and not their personal book-keeper”. The evidence about being ‘their’ personal book-keeper referred to Mr Howard and, seemingly, other members of his family.

94. Ms Giffin did not suggest that she was present when Mr Collis and Mr Howard discussed the arrangements about the collection of the motors. Her evidence did not inform this issue, namely, whether Mr Howard was authorised, as the company’s agent, to enter into a contract with Mr Collis for the transport of the motors.

95. Because of the contents of the spreadsheet, which included both matters personal to Mr Collis and to Mr Howard, as well as entries relating to work done by Mr Collis for Howard Recycling, neither the spreadsheet itself nor its contents were relevant to, nor could they be taken into account when determining, the question of whether Mr Howard had the authority to enter into the transport arrangement with Mr Collis on behalf of Howard Recycling, or whether there was an intention to enter into contractual relations.

Discernment

96. The first ground deals with whether an error of law occurred, with respect to the finding (albeit largely implicit) that Mr Howard was acting as the agent of the company when the arrangement was made with Mr Collis, upon which the company relies as giving rise to a contract.

97. It is an error of law for a finding of fact to be made where there is no evidence which supports that finding: see Kirby J in R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082 at [13]; Hall J in US Manufacturing Co Pty Ltd v ABB Service Pty Ltd [2008] NSWSC 705 at [54].

98. Having carefully reviewed the entirety of the record in the Local Court, I am satisfied that the plaintiff has demonstrated an error of law on the part of the Local Court Magistrate.

99. There was no evidence, at all, which could constitute evidence of the authority of Mr Howard in late January 2019, to enter into a contract on behalf of the company, Howard Recycling, or to bind it in any way.

100. My reasons for coming to that conclusion arise from the following.

101. There was no evidence, at all, that Mr Howard had been given any authority to bind the company in January 2019 to enter into the contract. Mr Howard did not say he had such authority. No officer of the company said that he had such authority. No resolution or other document was produced which evidenced the existence of the authority. No evidence was given that Mr Howard was employed by the company at that time or had any role in the management or control of its affairs.

102. The absence of such evidence addressing those matters is in contrast to the fact that there was evidence specifically addressed to Mr Howard’s authority to conduct the Local Court proceedings on behalf of the company. That authority was encapsulated in a resolution of the company which was put into evidence. That shows that the company, when considering what evidence to put before the Court in support of its claim, was alert to the issue of Mr Howard’s authority to act for it in the proceedings. It would have been very easy for the company, when providing such evidence of Mr Howard’s authority to conduct the proceedings, to include in that material, his authority to act as its agent at the time the arrangement to transport the motors was made. The absence of that evidence in those circumstances is, in my view, particularly telling.

103. The fact that Ms Giffin kept a ledger was not of itself, and without more, capable of proving that in January 2019, when the request was made to Mr Collis to collect the motors from Tweed Heads, that Mr Howard had authority to bind the company to a contract. There are two reasons for that:

(a) the ledger itself contains entries which record both personal debits and credits between Mr Collis and Mr Howard and also credits and debits between Mr Collis and the company. The entries are not themselves separated into sub-ledgers which record, separately, personal transactions and company transactions; and (b) the entries in the ledger were created after the arrangement was made in January 2019, and after the motors were collected and returned to Mr Collis’ property.

104. The only evidence of the oral conversation giving rise to the contract sued upon, was that given by Mr Collis, and as earlier noted, the words which he noted were not challenged, or the subject of specific cross-examination. Of importance is that, in paragraph 5 of the affidavit of Mr Collis dated 16 October 2021, to which reference is made above at [52], he records Mr Howard telling him that he was an undischarged bankrupt at the time, and that Mr Howard’s wife, Jodie, does not know that I am buying the motors”.

105. There are two features of this evidence which are telling. The first is that Mr Howard was, as he said, an undischarged bankrupt in January 2019. As an undischarged bankrupt, you cannot lawfully be responsible for the control and management of any company. It cannot, in those circumstances, be presumed that he was acting for the company with its authority. On the contrary, any inference would be that he was not authorised.

106. Secondly, what Mr Howard told Mr Collis was that he was buying the motors. He did not say that the company was buying the motors. Those words do not suggest that he was acting with the authority of the company, as its agent, to bind it. On the contrary, they tend to the opposite conclusion.

107. Howard Recycling, as the plaintiff, had the onus of proving that the contract sued upon was entered into by an agent on its behalf, and with its authority. There was no evidence that Mr Howard was authorised to act as its agent. Such evidence as was called more generally in the proceedings, did not give rise to any inference that Mr Howard had such authority. On the contrary, that evidence was either neutral, or gave rise to an opposing inference.

108. As the company had the onus of proving the authority of Mr Howard, and it was within its power and capacity to prove it, its failure so to do has the consequence that the finding to the contrary by the Local Court Magistrate was erroneous.

109. In the absence of any proof of the authority of Mr Howard to bind the company to the contract sued upon, the plaintiff’s claim must fail.

110. On this ground, I would uphold the appeal by Mr Collis.

111. The second ground of appeal dealt with the issue of whether there was an intention in January 2019, having regard to what was said and the surrounding circumstances, to create legal relations.

112. The context for this ground of appeal was that it was clear in the Local Court at the hearing of the proceedings, that Mr Collis disputed that there was any contract, and maintained that the discussion in January 2019, and the arrangements which were made to collect the motors, were nothing more than his doing a favour for a long-standing friend. Accordingly, a central matter to be addressed in the Local Court was whether, in the circumstances, there was any intention on the part of Mr Collis and Mr Howard to create legal relations.

Appropriate Outcome

127. Section 41 of the Local Court Act provides that this Court may determine an appeal by varying the terms of the judgment or order in the Local Court, or by setting aside the judgment or order. It may also remit the matter to the Local Court for determination.

128. In my view, the appropriate order, having regard to the matters established on this appeal, was that the Local Court ought to have dismissed the proceedings and ordered the company, Howard Recycling, to pay the costs of Mr Collis.

129. That conclusion was inevitable given that essential matters to be proved by the company, being the authority of Mr Howard, and the intention to create legal relations, were not proved. In the first of those two matters, the company, being the party with the onus, did not adduce any evidence of the existence of any authority.

130. In those circumstances, it seems to me that it would be inappropriate for this Court to remit the matter for determination to the Local Court.

131. In those circumstances, in my view, the correct approach is to vary the judgment entered in the Local Court so that it reads:

132. Amended Statement of Claim filed 25 October 2023 is dismissed.

133. Order the plaintiff to pay the defendant’s costs.

Costs in this Court

132. It follows that the company, Howard Recycling, which is the defendant in the Supreme Court, should pay the plaintiff’s costs in these proceedings.

Orders

133. I make the following orders:

134. Appeal upheld.

135. Vary the terms of the judgment in the Local Court entered on 27 March 2024 so that the judgment reads:

(i) Amended Statement of Claim filed 25 October 2023 is dismissed. (ii) Howard Recycling Services Pty Ltd is to pay the costs of Garry Collis.

3. Defendant, Howard Recycling Services Pty Ltd to pay the plaintiff, Garry Collis’ costs of these proceedings.

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