Klapsis v Formosa

1. [1]

   HER HONOUR: The plaintiff in these proceedings seeks to appeal from the whole of the decision of his Honour Local Court Magistrate Curran dated 2 November 2015 where the Magistrate entered judgment for the defendant on his claim for breach of a contract of bailment of a pleasure boat.

2. [2]

   By amended summons filed 17 May 2016, the plaintiff seeks firstly, an order pursuant to r 51.44 of the Uniform Civil Procedure Rules 2005 (NSW) suspending the operation of the judgment of the decision of Magistrate Curran dated 2 November 2015 in the Local Court, pending determination of this appeal; secondly, leave to appeal the decision of Magistrate Curran dated 2 November 2015 in accordance with s 39 of the Local Court Act 2007 (NSW); thirdly, that the appeal be allowed; fourthly, in lieu of the judgment entered in the Local Court proceedings 2014/199879, orders that (a) the claim in the Local Court proceedings 2014/199879 be dismissed; and (b) the defendant pay the costs of the defendant; and fifthly, in the alternative, an order that the matter be remitted to the Local Court for rehearing. The plaintiff has made an application to stay the execution of the judgment in the Local Court. It has been listed to be heard but it has not yet been assessed. (T49.9-10, 15/9/2016).

3. [3]

   The plaintiff in this Court is George Klapsis who was the defendant in the Local Court proceedings. The defendant in this Court is Michael Formosa who was the plaintiff in the Local Court proceedings. For convenience and to avoid confusion, I shall refer to the parties by name.

4. [4]

   Mr Carolan of counsel appeared for Mr Formosa. Mr Klapsis appeared self represented both in this Court and in the Local Court. The parties relied on the documents contained in the court book (volumes 1 and 2). During the hearing, a copy of the defence filed in the Local Court proceedings was handed up and was placed in the court book at pp 17a to 17d. Both parties relied upon written submissions. Mr Klapsis’ submissions were prepared by counsel. While Mr Klapsis was articulate, he had not prepared his arguments in either the Local Court or this Court.

The appeal

1. [5]

   Section 39(1) of the Local Court Act provides that a party to proceedings before the Local 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]

   Section 40(1) of the Local Court Act provides that a party to proceedings before the Local 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.

3. [7]

   Section 41 of the Local Court Act provides that this Court may determine an appeal made under ss 39(1) or 40(1) either (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court’s directions, or (d) by dismissing the appeal.

Grounds of appeal

1. [8]

   Briefly the grounds of appeal are that the Magistrate erred in a matter of law by firstly, failing to afford the plaintiff procedural fairness (“Ground 1”); secondly, finding that a bailment existed between the plaintiff, personally, and the defendant (“Ground 2”); and thirdly, giving any weight to the evidence of the handwriting expert, Mr Anderson (“Ground 3”). In his written submissions, Mr Klapsis also included a further ground of appeal that the decision reached by the Magistrate is afflicted with legal unreasonableness. It is a ground that was not pleaded in the amended summons. I shall briefly address this ground in my reasons.

2. [9]

   It is difficult to discern whether leave to appeal is required. I will deal with the grounds of appeal on the basis that they raise errors of law.

The Local Court proceedings

1. [10]

   On 7 July 2014, Mr Formosa filed a statement of claim seeking breach of bailment or alternatively misleading or deceptive conduct or unconscionable conduct pursuant to the Competition and Consumer Act 2010 (Cth).

2. [11]

   The following is not in dispute. Mr Klapsis is and was the sole director and secretary of a company known as ACN 142 499 018 Pty Ltd (in liquidation). The company operated a business of selling new and second hand boats, as well as repairing boats. Until 20 January 2015, the company was known as Nowra Power Boats Pty Ltd (“the company”). (S/C [1] to [3]).

3. [12]

   From approximately April 2009, Mr Formosa was the owner of an Ebbtide 2700 power boat (“the boat”). From about December 2009, Mr Formosa stored the boat at the business premises of the company. (S/C [10] and [11]).

4. [13]

   The following is in dispute. In early December 2013, Mr Klapsis telephoned Mr Formosa and advised him that he had sold the boat for the sum of $86,755.70. During this conversation Mr Formosa indicated that Mr Klapsis had no authority to sell the boat. (S/C [12] and [14]).

5. [14]

   Subsequent to the conversation, Mr Formosa accepted that the boat had been sold and asked Mr Klapsis if he (Mr Formosa) could remove the battery charger prior to the boat leaving the premises. Mr Klapsis agreed to this action. (S/C [15]).

6. [15]

   On or about 13 December 2013, Mr Klapsis said to Mr Formosa that he should receive the proceeds of sale from the sale of the boat, being approximately $67,500, in January 2014. Despite requests for payment, Mr Klapsis has not paid the proceeds from the sale of the boat to Mr Formosa. (S/C [16] and [17]).

7. [16]

   Mr Klapsis produced a motor vehicle and vessel consignment agreement (“the consignment agreement”) dated 5 December 2013 to Mr Formosa containing a signature allegedly of Mr Formosa. Mr Formosa says that the signature on the purported consignment agreement is not his. (S/C [18] and [19]).

8. [17]

   Mr Formosa is uncertain as to whether Mr Klapsis sold the boat personally or through the company. (S/C [20]).

9. [18]

   Mr Formosa pleaded further or in the alternative that Mr Klapsis was a bailee of the boat and had an obligation to return it to Mr Formosa upon request. Mr Klapsis has failed to return the boat or the proceeds from its sale to Mr Formosa. (S/C [21]).

10. [19]

    In essence Mr Klapsis claims that the boat was sold by the company after having been placed on consignment with Mr Klapsis and Mr Formosa’s claim is against the company and not him personally. (D 30/12/14, [4], [5], [9] and [11]).

11. [20]

    At the hearing in the Local Court, the parties agreed that the quantum of damages was $75,000. (T4.24-28, 2/11/2015).

12. [21]

    On 16 September 2014, in the absence of a defence being filed by Mr Klapsis, default judgment was entered in the Local Court.

13. [22]

    On 20 November 2014, Mr Klapsis filed a notice of motion seeking to set aside the default judgment.

14. [23]

    On 18 December 2014, the Registrar made an order setting aside the default judgment and ordered Mr Klapsis to pay the costs of $1,000 thrown away within 28 days.

15. [24]

    On 7 April 2015, the matter was listed for case management before Magistrate Keogh who made directions that:

    1. (1)

       Leave be granted to serve expert evidence in relation to the authenticity of a signature on a document;

    2. (2)

       Mr Formosa to serve evidence by 5 May 2015;

    3. (3)

       Mr Klapsis to serve evidence by 2 June 2015;

    4. (4)

       The matter to be listed for pre trial review on 7 July 2015; and

    5. (5)

       The matter to be listed for hearing on 7 August 2015.

16. [25]

    On 4 June 2015, on Mr Formosa’s application, Magistrate Stapleton vacated the hearing date and ordered:

    1. (1)

       Mr Formosa to serve any evidence, including expert evidence, by 2 July 2015;

    2. (2)

       Mr Klapsis to serve any evidence, including expert evidence, by 30 July 2015;

    3. (3)

       The proceedings to be fixed for hearing for two days on 7 and 8 October 2015; and

    4. (4)

       The proceedings to be listed for review on 8 September 2015.

17. [26]

    On 8 September 2015, the matter was again before Magistrate Keogh for review. On this day, Mr Klapsis sought to vacate the hearing dates. Her Honour confirmed the hearing dates of 7 and 8 October 2015, but informed Mr Klapsis that if he wished to vacate the hearing dates, an application should be made by notice of motion and that motion was to be filed by 15 September 2015 and made returnable on 23 September 2015. Magistrate Keogh also directed Mr Klapsis to serve his evidence by 23 September 2015 and noted on the file review sheet that the “defendant’s evidence in chief may not be relied on at the hearing unless served in accordance with this order subject to leave.”

18. [27]

    This final order is in accordance with cl 15.4 of Local Court of New South Wales Practice Note Civ 1 – Case Management of Civil Proceedings in the Local Court (“the practice note”) which states:

19. [28]

    On 23 September 2015, the proceedings went before Magistrate Milledge for review. Her Honour noted that no notice of motion seeking to vacate the hearing had been filed. Her Honour confirmed the hearing dates.

20. [29]

    In summary, Mr Klapsis had been in default of the court timetable on a number of occasions, resulting in an order that his evidence in chief may not be relied upon at the hearing unless served in accordance with an order to serve evidence by 23 September 2013 subject to leave. He had been given the opportunity to apply for an adjournment prior to the hearing date but he chose not to do so.

21. [30]

    On 6 October 2015, the day before the hearing, Mr Klapsis served a statement of Andrew Klem, an employee of the company sworn 2 October 2015 upon Mr Formosa’s solicitors. Prior to the hearing, Mr Formosa’s solicitor advised Mr Klapsis that he required Mr Klem for cross examination.

22. [31]

    On 7 October 2015, the matter came before Magistrate Curran for hearing at the Local Court, Downing Centre, Sydney. Mr Welch, solicitor appeared for Mr Formosa. Mr Formosa was not present in court. Mr Klapsis was not present when the matter was called.

23. [32]

    Prior to Mr Klapsis arriving at court, Mr Formosa’s solicitor informed the Magistrate that he would object to the affidavit of Mr Klem being relied upon and that Mr Formosa would be relying upon the affidavits of Mr Formosa; Lisa Formosa, Mr Formosa’s wife; Jamie Borg and Anthony Greed, employees of Mr Formosa’s company; and Chris Anderson, a handwriting expert.

24. [33]

    The Magistrate was cognisant of the history of these proceedings, namely that default judgment had been set aside, Mr Klapsis had not complied with prior court timetables, a prior hearing date had been vacated on the plaintiff’s application (due to the handwriting expert’s report not having been served) and finally, a guillotine type order had been made in relation to Mr Klapsis serving affidavits after the due date for service. The Magistrate adjourned to await Mr Klapsis’ appearance.

25. [34]

    When Mr Klapsis appeared, he was self represented. The Magistrate asked Mr Klapsis why he had not served any evidence other than the Klem statement. Mr Klapsis replied, “Your Honour, I don’t really have much evidence to serve.” (T11.8, 7/10/2015). The Magistrate outlined the five documents that Mr Formosa was relying upon. Mr Klapsis agreed that they had been served upon him. (T11.22-28, 7/10/2015).

26. [35]

    The following exchange took place between the Magistrate and Mr Klapsis:

27. [36]

    After the Magistrate outlined the issues in dispute, Mr Klapsis sought to rely on the statement from Mr Klem. Mr Welch objected to it being tendered and stated that Mr Klem’s statement raised an issue concerning Mr Formosa attending the company’s premises on 5 December 2013 and that it was an attempt to put into evidence that somebody witnessed or was close to being a witness to the signing of the alleged consignment agreement.

28. [37]

    Another exchange then took place between the Magistrate and Mr Klapsis:

29. [38]

    There was a short adjournment. Upon resumption the Magistrate asked Mr Klapsis if he had any application for an adjournment. Mr Klapsis replied, “No.” (T20.37-43, 7/10/2015).

30. [39]

    The issue of whether Mr Klem’s affidavit should be admitted was revisited at the close of Mr Formosa’s case. The Magistrate heard argument as to whether Mr Klapsis should be allowed to rely upon the affidavit of Mr Klem. Once again leave was opposed by the solicitor for Mr Formosa. (T105 to T113, 8/10/2015). His Honour concluded that service of the document “literally hours before the matter comes on for hearing” was not appropriate. (T113.15-16, 8/10/2015).

31. [40]

    In his ex tempore reasons for his decision, the Magistrate stated:

32. [41]

    I now turn to consider the grounds of appeal.

Denial of procedural fairness (Ground 1)

1. [42]

   This ground of appeal is that the Magistrate erred in a matter of law by failing to afford Mr Klapsis procedural fairness by (i) refusing to allow Mr Klapsis to rely on evidence that had previously been filed or served in the proceedings by the defendant (“Ground 1(i)”); (ii) refusing to allow Mr Klapsis to rely on evidence that had not been served in accordance with the practice note (“Ground 1(ii)”); (iii) advising Mr Klapsis that he would “almost certainly have to pay the costs of the plaintiff [in the Local Court] thrown away as a result of any adjournment application” in circumstances where he did not understand the impact of not having any evidence and did not receive direction regarding what costs “thrown away” were (“Ground 1(iii)”); and (iv) failing to allow Mr Klapsis the ability to present evidence viva voce in circumstances where this may have addressed the procedural unfairness arising from the refusal of Mr Klapsis’ request to rely on evidence that had previously been filed or served by Mr Formosa and evidence prepared by Mr Klapsis that had not been served in accordance with the practice note (“Ground 1(iv)”).

2. [43]

   I will first deal with Ground 1(iii) then Grounds 1(i), 1(ii) and (iv).

3. [44]

   In Mr Klapsis’ submission, he was denied procedural fairness when the Magistrate advised him that he would almost certainly have to pay the costs of Mr Formosa thrown away as a result of any adjournment application.

4. [45]

   Mr Klapsis submitted that the manner in which the Magistrate raised the prospect of applying for an adjournment effectively meant the he did not feel as though he had any real option but to proceed with the hearing. Mr Klapsis stated that the way in which the Magistrate communicated to him failed to indicate that the exercise of discretion to grant an adjournment may more readily be granted to an unrepresented litigant who has misunderstood procedural requirements and who is, as a consequence, not in a position to present his evidence.

5. [46]

   Counsel for Mr Formosa submitted that it is clear that Mr Klapsis was given ample time and opportunity to prepare and serve his evidence and that Mr Klapsis has offered no explanation as to why he personally did not prepare and serve an affidavit of his own evidence of the circumstances of the bailment in light of the fact that he had been directed on three occasions to serve evidence. Counsel for Mr Formosa referred to the circumstance that Mr Klapsis was also given the opportunity to apply to vacate the hearing dates as a consequence of the directions made by the Local Court on 8 September 2015 and he did not make such an application.

6. [47]

   Counsel for Mr Formosa further submitted that, while Mr Klapsis now says that he wished to obtain expert handwriting evidence in reply, the approach to the expert was not made until a week prior to the hearing, and there is no explanation for the delay, bearing in mind that this was a matter identified by Mr Klapsis when the matter was before the Court on 11 March 2015.

7. [48]

   Finally, counsel for Mr Formosa submitted that the Magistrate made it abundantly clear to Mr Klapsis that it was open to him to make an adjournment application to enable the affidavit of Mr Klem to be relied upon and evidence in reply to be prepared and served. The Magistrate explained to Mr Klapsis that the likely consequences of that application succeeding would be that he would be required to pay the costs thrown away. There is no doubt the Magistrate’s explanation of those consequences was forthright, but, in the circumstances, hardly unusual.

8. [49]

   The decision to grant or refuse an adjournment is a discretionary one. The guiding principles in relation to an appeal against such an exercise of discretion are set out in House v The King (1936) 55 CLR 499; [1936] HCA 40 at 504-505 where the High Court said:

9. [50]

   Counsel for Mr Formosa referred to Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 (“Lam”) and Italiano v Carbone [2005] NSWCA 177 (“Italiano”).

10. [51]

    In Lam, Gleeson CJ stated at 14:

11. [52]

    In Italiano, Basten JA stated at [85] to [88]:

12. [53]

    I note that Basten JA’s statement of principle at [85] has been referred to and applied by this Court subsequently: see Brennan v Consumer, Trader & Tenancy Tribunal & Anor [2010] NSWSC 1240 per Hoeben J at [47]-[48].

13. [54]

    Mr Klapsis referred to Kelly v Westpac Banking Corporation [2014] NSWCA 348 (“Kelly”) and Titan v Babic (1994) 49 FCR 546; (1994) 126 ALR 455 (“Titan”).

14. [55]

    In Kelly, the Court of Appeal (per McColl and Gleeson JJA and Sackville AJA) determined that Mr Kelly, a litigant in person, had not been afforded adequate opportunity to assess and respond to the late service of evidence by Westpac. The Court of Appeal at [33] stated:

15. [56]

    But what occurred in Kelly is not what occurred here. In Kelly, the defendant, who was a litigant in person, sought and was refused an adjournment on the basis of late service of affidavits by the plaintiff, Westpac. In this appeal it is the litigant in person, Mr Klapsis who is seeking to rely on further evidence. He is not the one on the receiving end of further evidence.

16. [57]

    In Titan the Full Court of the Federal Court reviewed the question of whether the Master of the ACT Supreme Court should have allowed an unrepresented party an adjournment. The Full Court concluded at 464:

17. [58]

    Titan also does not assist Mr Klapsis. In the Local Court, as in Titan, the Magistrate was not obliged to afford procedural fairness to Mr Klapsis, who had no legal representation, as there was no relevant application for an adjournment or explanation in relation to Mr Klapsis’ failure to prepare affidavits or call witnesses.

18. [59]

    In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 French CJ made the following remarks in relation to the granting of an adjournment:

19. [60]

    In Aon, Gummow, Hayne, Crennan, Kiefel and Bell JJ in their joint judgment, stated at [116] that, “[t]here may be some point of distinction in our views as to what J L Holdings Pty Ltd v State of Queensland (1996) 71 FCR 545 holds”, however their Honours made similar conclusions to that of French CJ. Their judgment also emphasises that a court, in granting applications which might cause undue delay, must consider case management and the role of the courts in serving the public:

20. [61]

    In the lead up to the hearing in the Local Court, Mr Klapsis had failed to file a defence on time, default judgment had been set aside, he had not complied with prior Court timetables on three occasions, a prior hearing date had been vacated on Mr Formosa’s application (due to the handwriting expert’s report not having been served), a guillotine type order had been made in relation to Mr Klapsis serving affidavits after the due date for service and he had been given the opportunity to apply for an adjournment prior to the hearing. The only attempt Mr Klapsis had made to comply with the Court timetable was to serve the statement of Mr Klem on Mr Formosa’s solicitors the day before the hearing. By the time of the last review Mr Klapsis had not applied for an adjournment. The Magistrate took into account ss 56, 57, 58 and 61 of the Civil Procedure Act 2005 (NSW) when explaining to Mr Klapsis the consequences of making an application for an adjournment. The Magistrate informed Mr Klapsis that he could make an application for an adjournment but foreshadowed that it would be unlikely to succeed and that if it did so he would have to pay the costs thrown away by the adjournment of some thousands of dollars.

21. [62]

    The Magistrate also informed Mr Klapsis that if he chose to apply for an adjournment the Magistrate would hear from Mr Formosa’s solicitor and then exercise his discretion. By his responses Mr Klapsis understood what he had been told. In particular he was aware that there would be costs awarded against him as he asked the Magistrate “so what would the costs be incurred be if I wanted to [apply for an adjournment?]” (T18.23, 7/10/2015).

22. [63]

    When Court resumed after a short adjournment, the Magistrate asked Mr Klapsis if he had any application for an adjournment, to which he replied, “No.” Hence, Mr Klapsis was advised that he could apply for an adjournment, he understood the consequences and he elected not to do so.

23. [64]

    Mr Klapsis was given the opportunity to cross examine Mr Formosa’s witnesses and make his submissions. He was given a reasonable opportunity to be heard albeit without evidence from his side. Procedural fairness has to be afforded to both parties, not just one. In these circumstances, it is my view that the Magistrate afforded Mr Klapsis procedural fairness.

24. [65]

    The next aspect of ground 1 concerns firstly, the Magistrate’s refusal to allow the plaintiff to rely on evidence that had previously been filed or served in the proceedings by Mr Formosa; secondly, the Magistrate’s refusal to allow the plaintiff to rely on evidence that had not been served in accordance with the practice note, namely the affidavit of Mr Klem, an employee of the company, dated 2 October 2015; and thirdly, the Magistrate’s failure to allow the plaintiff to present evidence viva voce.

25. [66]

    At the hearing in the Local Court, Mr Klapsis sought to rely on the affidavit of Mr Formosa’s solicitor, Mr Ellicott which had previously been filed and served in opposition to Mr Klapsis’ application to set aside default judgment. (Aff, 25/7/2016 [5]). In oral submissions, Mr Klapsis explained that he wanted to rely on an email from Mr Formosa to Mr Ellicott dated 25 March 2014 that was annexed to Mr Ellicott’s affidavit. (CB 409).

26. [67]

    Counsel for Mr Formosa, in the hearing of this appeal, submitted that Mr Klapsis’ submissions do not identify precisely what material in Mr Ellicott’s affidavit would have assisted Mr Klapsis’ defence of the claim. There was no notice given of the intention to rely upon the affidavit and Mr Ellicott was not asked to be present at court.

27. [68]

    Aside from the document from Mr Klem, after a fair reading of the transcript of the hearing in the Local Court, it is my view that it was not clear what else Mr Klapsis was seeking to rely upon. In this appeal Mr Klapsis submitted that he was denied procedural fairness by not being able to rely upon evidence which had already been submitted in the proceedings by Mr Formosa’s law firm on behalf of Mr Formosa.

28. [69]

    It took quite a while for Mr Klapsis at the hearing of this appeal to identify the document he was talking about. That he wished to rely upon this document was never made clear to the Magistrate at the outset of the hearing in the Local Court. It is an email dated 25 March 2014 annexed to Mr Ellicott’s affidavit, which was sent by Mr Formosa to Mr Ellicott. It relevantly reads:

29. [70]

    Mr Klapsis says that this is evidence that Mr Formosa left the boat on consignment with the company. Had he articulated this argument, the result may have been different. If the Magistrate had allowed this email into evidence, Mr Formosa may have had an opportunity to provide an explanation. However, this did not take place. Instead, the Magistrate gave Mr Klapsis the opportunity to apply for an adjournment. Mr Klapsis was made aware of the consequences of not complying with Court directions and the practice note. It is my view that Mr Klapsis was afforded procedural fairness.

30. [71]

    In oral submissions, Mr Klapsis made much of the discrepancies in the evidence as to the whereabouts of Mr Formosa on 5 December 2013, the date when the consignment agreement was allegedly signed. Mr Klapsis submitted that the Magistrate did not deal properly with these inconsistencies. (T14.41-22).

31. [72]

    In Mr Formosa’s statement to police dated 16 July 2015 he said at [94] to [104]:

32. [73]

    Mr Klapsis referred to Mr Formosa’s “statement of a witness” to the NSW Police annexed to the affidavit of Mr Formosa in which he stated at [16]:

33. [74]

    This evidence annexed to Mr Formosa’s affidavit puts him in Sydney on 5 December 2013 where he was moving his company factory from Hoxton Park to Ingleburn.

34. [75]

    The Magistrate was alive to this issue. After Mr Klapsis drew his Honour’s attention to this evidence, the Magistrate stated, “Yes, I know. I have highlighted that. I am going to ask Mr Welch to reply to that.” (T145.23-24, 8/10/2015).

35. [76]

    Mr Welch provided the following explanation:

36. [77]

    Mr Klapsis’ next submission about denial of procedural fairness concerns the Magistrate’s failure to allow Mr Klapsis the ability to present evidence viva voce (Ground 1(iv)). This ground of appeal overlaps with others.

37. [78]

    Not only had Mr Klapsis not served documents in accordance with the practice note, he also failed to comply with a specific order made on 23 September 2015 that his evidence in chief would not be relied on at the hearing unless it had been served in accordance with that order subject to leave. Mr Klapsis could have sought an adjournment and put on an affidavit or statement prior to the hearing. He had been directed to do this on a number of occasions and failed to do so. He offered no real explanation for his non compliance. While he was not permitted to give oral evidence, he was given some leeway by the Magistrate.

38. [79]

    If the Magistrate had allowed Mr Klapsis to present his evidence viva voce it probably would not have afforded Mr Formosa procedural fairness. In my view for the Magistrate to not allow Mr Klapsis to give oral evidence in circumstances where Mr Formosa was not in a position to investigate the truth of his evidence does not deny Mr Klapsis procedural fairness.

Bailment (Ground 2)

1. [80]

   The second ground of appeal is that the Magistrate erred in finding that a bailment existed between the plaintiff personally and the defendant. This issue mainly involves a contested factual dispute.

2. [81]

   On this topic Mr Klapsis also, I think, submitted that the Court’s decision is afflicted by legal unreasonableness. In respect of legal unreasonableness, this ground was first identified by the High Court of Australia in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; (2013) 297 ALR 225; [2013] HCA 18. The ground of legal unreasonableness reflects the requirement of the law that a decision maker must understand his or her statutory powers and obligations (at [71]). A jurisdictional error will occur where, for example, no sensible authority acting with due appreciation of its responsibilities would have so decided (at [71]); the decision-maker has failed to give adequate weight to a relevant factor of great importance (at [72]); the decision-maker has given excessive weight to an irrelevant factor of no importance or reasoned illogically or irrationally (at [72]); the decision is a disproportionate response by reference to the scope of the power (at [73]-[74]); the decision lacks evident and intelligible justification (at [76]); or it is not apparent how a conclusion was reached but the decision itself bespeaks error (at [82] and [85]).

3. [82]

   Mr Klapsis submitted that the Magistrate’s decision lacks evident and intelligible justification because the evidence that was tendered in the proceedings by Mr Formosa indicates that firstly, the company was in the business of servicing, buying and selling boats; secondly, Mr Formosa met Mr Klapsis as he engaged the company to service his boat; thirdly, Mr Formosa engaged the company to sell the Larsson (a boat Mr Formosa had previously owned) on consignment; fourthly, Mr Formosa alleges that the boat was left at the company’s premises to enable the sale of it; fifthly, Mr Formosa and his wife, Lisa Formosa, did not have a social relationship with Mr Klapsis; sixthly, Mr Formosa also had dealings with other employees of the company, namely Andrew and Anthony; seventhly, Mr Formosa’s communication with Mr Klapsis was at the company premises or at email addresses for the company; eighthly, the advertisement for the sale of the boat refers to the boat being available to view at “our showroom”, being the company premises; and ninthly, the funds from the sale of the boat were paid into the company account.

4. [83]

   Mr Klapsis’ submission is based on a no evidence ground. I agree that where a decision is based upon findings of fact, they must be founded upon logically probative evidence and not on mere suspicion.

5. [84]

   It should be noted that in Mr Klapsis’ defence he pleaded that Mr Formosa claims that a boat of his was left for storage at the premises of Mr Klapsis’ company from December 2009 until December 2013, however the company did not provide boat storage. (D [5] and [6]). (My emphasis). This is in contradiction of the case that Mr Klapsis sought to advance at the hearing in the Local Court.

6. [85]

   The Magistrate reviewed the evidence and authorities on bailment and concluded:

7. [86]

   Counsel for Mr Formosa submitted that the Magistrate expressly deals with the question of whether the bailment arose in the course of dealings between Mr Formosa and the company, rather than between Mr Formosa and Mr Klapsis, and decided that the evidence supported the latter construction. There is nothing to suggest that his Honour’s interpretation of the evidence was in error.

Consideration

1. [87]

   On this issue I agree with counsel for Mr Formosa’s submission. There was a factual contest between the parties. The Magistrate analysed the competing versions of events and applied the relevant law. His Honour then concluded that the bailment arose in the course of personal dealings between Mr Formosa and Mr Klapsis. There was evidence to support Mr Formosa’s version of events, namely the circumstances that no money changed hands and no profit was involved, which characterises the bailment as a gratuitous one, not one associated with a business. In these circumstances the Magistrate was entitled to come to the conclusion that he did. There is no error of law. This ground of appeals fails.

Handwriting expert (Ground 3)

1. [88]

   The third ground of appeal is that the Magistrate erred in giving any weight to the evidence of Mr Anderson, the handwriting expert. Neither party provided submissions on this topic.

2. [89]

   Mr Formosa relied on the consignment agreement dated 5 December 2013. Mr Klapsis says that this agreement was signed by Mr Formosa. Mr Formosa’s evidence is that although the handwritten details of Mr Formosa’s bank account set out in the consignment agreement was written by him, the signature, which purports to be Mr Formosa’s, was not. (CB 202-203).

3. [90]

   Mr Anderson gave evidence on the second day of the hearing in relation to the agreement purporting to be between Nowra Powerboats Pty Ltd as the consignee and Mr Formosa as the consignor. However, at the end of the document the signature against the words “The consignor” is that of Mr Klapsis and the signature against the words “The consignee” purports to be that of Mr Formosa.

4. [91]

   On this topic the Magistrate stated:

5. [92]

   The Magistrate referred to a second matter of concern in relation to the chronology of the purchase of the boat by the third party. The Magistrate set out certain factual conclusions on the balance of probabilities, in particular:

6. [93]

   From that chronology his Honour concluded:

7. [94]

   The Magistrate made a finding that the handwriting expert provided a tentative or preliminary view that his Honour said gave very limited support to Mr Formosa’s denial that the signature on the consignment agreement that purported to be his was actually his. Although, the Magistrate put little weight on the handwriting expert’s evidence, as there was no evidence to the contrary, he concluded on the balance of probabilities that the plaintiff had not signed the alleged consignment agreement. The factual matters in relation to the timing of the financing of the purchase of the boat, namely that approval for and payment of the loan as well as payment of the sale price into Nowra Powerboats Pty Ltd’s account by the purchasers took place before the alleged signing of the consignment agreement on 5 December 2013, also did not support Mr Klapsis’ version of events.

8. [95]

   The Magistrate was entitled to make the findings he did in relation to the handwriting expert. There is no error of fact or law. This ground of appeal also fails.

9. [96]

   The result is that the appeal fails. The decision of his Honour Magistrate Curran dated 2 November 2015 is affirmed. The amended summons filed 17 May 2015 is dismissed.

10. [97]

    Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant’s costs on an ordinary basis as agreed or assessed.