Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Osborne v Boral Resources (NSW) Pty Ltd [2012] NSWCA 155
• Hearing dates: 23 May 2012
• Decision date: 23 May 2012
• Before: Bathurst CJ at [1]; Allsop P at [13]; Macfarlan JA at [16]

Decision

Appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: CONTRACT - principal and agent - authority of agent - whether sufficient evidence to find agent had authority to incur liability under contract; EVIDENCE - admissibility - hearsay - business records - email purportedly sent by company officer - whether proof of officer's authority to order goods on behalf of company
• Legislation Cited: Corporations Act 2001 s 129(3)(b)
• Cases Cited: Equiticorp Finance Ltd v Bank of New Zealand (1993) 32 NSWLR 50
• Category: Principal judgment
• Parties: Mark Gregory Osborne (Appellant); Boral Resources (NSW) Pty Ltd (Respondent)
• Representation: Mr Allen (Appellant); Mr Locke (Respondent); Solicitors: Proctor & Associates (Appellant); Oliveri Lawyers (Respondent)
• File Number(s): 2009/00335437

Decision under appeal

• Date of Decision: 2011-05-11 00:00:00
• Before: Rolfe DCJ
• File Number(s): 2009/00335437

Judgment

1 BATHURST CJ: This is an appeal from a judgment of Rolfe DCJ of 11 May 2011, in which judgment was entered against the appellant in favour of the respondent in the amount of $263,619.59 plus costs. The appellant appeals from that decision on the ground that there was insufficient evidence to found the primary judge's findings. That ground is not made out, and the appeal should be dismissed with costs for the following reasons.

2 The appellant, Mr Osborne, was the sole shareholder and director of Development and Investments Australia Group Pty Limited ("DIAG"), now in administration. In early 2009, DIAG entered into a credit agreement with the respondent, Boral Resources (NSW) Pty Ltd, via its agent entity, Boral Shared Services Pty Ltd. The appellant signed the application on behalf of DIAG as its sole director. He also executed a personal guarantee which was incorporated as part of the contractual arrangement between DIAG and the respondent.

3 A large amount of concrete was ordered and delivered in multiple batches to an address in St Marys under the credit account. In each case it was invoiced to DIAG, and the invoices were sent to the PO Box address listed for DIAG in the credit application form. The primary judge was entitled to infer that from the invoices which showed that it was delivered to that address.

4 On 5 June 2009, the respondent filed a statement of claim against DIAG and the appellant in the District Court claiming approximately $217,000 for concrete supplied and invoiced, as well as the costs of recovery which were also the subject of the guarantee, and interest.

5 The appellant denied that the goods were delivered pursuant to the credit agreement, claiming that the St Marys' address to which the goods were delivered was not and never had been occupied or connected with him or DIAG, and that it differed from the address listed for delivery in the credit agreement. The appellant further contended that even if the concrete had been ordered, there was no evidence to suggest that it had been ordered by DIAG, or that if the person who ordered it was a Mr Craig James, there was no evidence that he was authorised to do so.

6 The primary judge rejected the evidence of the appellant, finding that he was "prepared to say anything in order to avoid liability" (primary judgment p 9). In making his factual findings, the primary judge relied on the affidavit evidence of the employees of the respondent, on the invoice and delivery dockets of the respondent, and on letters and emails between the parties to which I will refer. There is no reason to question the veracity of any of this evidence, or of the findings of the primary judge based upon it.

7 Mr James was an associate of the appellant and of DIAG. The evidence accepted by the primary judge established that Mr James and Mr Osborne worked together at the same address. It established, and the appellant conceded under cross-examination, that Mr James had, at least, completed the credit application form, which the appellant signed, and that Mr James had been responsible for lodging the application with the respondent. In an email dated 24 December 2008, Mr James submitted the credit application form to the respondent, describing it as a "new" application from DIAG. He explained this was because "the Group" had recently undergone a consolidation and restructure exercise, such that DIAG had now effectively replaced an entity referred to as "Mycorp Constructions". He signed off the email as "Craig James, General Manager, Finance & Operations, Development & Investments Australia Group Pty Ltd." The evidence showed that Mycorp was involved at the St Marys site. The phone number given for DIAG in the email of 24 December 2008 and on the credit application signed by the appellant was shown in evidence to be the same number previously used for Mycorp Constructions. The appellant also used an email address which linked him to Mycorp. The primary judge accepted that the appellant and Mr James were both associated to some extent with Mycorp, and characterised the relationship between the appellant and Mr James as "some sort of informal partnership arrangement" (primary judgment 12 I-J).

8 The primary judge also drew a Jones v Dunkel inference adverse to the appellant on the basis that Mr James was not called to give evidence, however he stated this inference was not significant to his findings.

9 The appellant further suggested that he had never received invoices for the concrete, however the evidence clearly established to the contrary. An email sent by a "Mr Aiche, Mycorp Projects, Project Coordinator" to the respondent on 16 March 2009 queried the rates used in some of the invoices. The primary judge found the invoices could only have been given to Mr Aiche by the appellant, as they had been sent to DIAG's PO Box address as specified in the credit application form. On 24 February 2009, the appellant also received a letter from the respondent, at the same address, confirming that his application for credit had been approved and that his guarantee and indemnity had been accepted. The appellant conceded during cross-examination that this PO Box address was in fact his address.

10 The primary judge found that the concrete orders were placed either by the appellant or by Mr James. There was no evidence to suggest they were made by anyone else. He found that, having expressly authorised Mr James to submit the credit application, the appellant as sole shareholder and director of DIAG had implicitly given Mr James actual authority to use the title "General Manager, Finance & Operations": Equiticorp Finance Ltd v Bank of New Zealand (1993) 32 NSWLR 50 at 132. Whether or not he had in fact expressly authorised Mr James to make the concrete orders, having implicitly authorised his use of the title, the appellant held Mr James out as an officer or agent of DIAG. Section 129(3)(b) of the Corporations Act 2001 was engaged, permitting the respondent to assume that Mr James had authority "to exercise the powers and perform the duties customarily exercised or performed by that kind of officer or agent of a similar company". The primary judge found that in a small company such as DIAG, a General Manager of Finance and Operations would customarily be authorised to place such orders.

11 This case can be dealt with shortly. The evidence plainly demonstrates that the respondent delivered concrete and invoiced the appellant in respect of concrete delivered. No complaint was made by DIAG that the concrete was not ordered. To the contrary, complaint was made about incorrect rates used in the invoices. These findings were not challenged on appeal. In these circumstances, the inference is overwhelming that DIAG ordered the concrete the subject of these proceedings.

12 Further, to the extent it is necessary to find that Mr James had authority to order the concrete, the email of 24 December 2008, a business record of DIAG, represents that Mr James was the General Manager, Development & Finance. It is open to this Court, as it was to the primary judge, to infer that DIAG had authorised Mr James to make this representation. In the present case it would fall, in my view, within the implied authority of a General Manager, Development & Finance, to order the concrete, which was in fact ordered and delivered.

13 For these reasons, the appeal should be dismissed with costs.

14 ALLSOP P: I agree with the orders proposed by the Chief Justice and with his reasons, but I would add the following comments. Perhaps the addition of them is unnecessary. Documents contained in Blue 71 and Blue 61, both of which are business records, are a clear basis for the conclusion as to the accuracy of what Mr James said in those documents, in particular the email at Blue 71. Thus, there was a clear basis for the drawing of a conclusion that DIAG had taken over the assets of Mycorp and, on that basis, that it was responsible for the concrete delivered to what was otherwise previously Mycorp's site.

15 There was no contrary evidence capable of rebutting this conclusion of any character that was reliable. To the extent that Mr Osborne's evidence sought to do so, his Honour disposed of that evidence on credit, which cannot be challenged.

16 MACFARLAN JA: I agree with what the Chief Justice and the President have said and add the following observations.

17 As their Honours have noted, there was in evidence a copy of an email dated 24 December 2008 purporting to be sent on behalf of Development and Investments Australia Group Pty Ltd ("DIAG") by Mr Craig James, General Manager, Finance and Operations.

18 By reason of s 161 of the Evidence Act 1995, that email is to be presumed, in the absence of evidence suggesting the contrary, to have been sent by DIAG. Utilising the power conferred by s 183 of the Evidence Act to draw inferences, it should be inferred that a copy of that email was retained by DIAG, for at least a short period, as part of the records of its business. As a result, it can be concluded that the document in evidence is a copy of a business record of DIAG within the meaning of s 69 of the Evidence Act.

19 By the email, Mr James impliedly represented that he held the position of General Manager, Finance and Operations of DIAG. He is a person who might reasonably be supposed to have had personal knowledge of the accuracy of that asserted fact (see s 69(2)(a)). As a result, the document was evidence of the truth of his representation, notwithstanding that the evidence was hearsay (see s 69(2)).

20 As the primary judge held, the respondent was entitled to assume, pursuant to s 129(3)(b) of the Corporations Act 2001, that a person holding that position with DIAG had authority to order on its behalf goods such as the subject concrete.

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Decision last updated: 30 May 2012