The joke’s on you – How a horse transport company learnt that if you don’t have a contract, you don’t get a cheque

By Natalie Hickey, October 19, 2016

The racing industry is not known for loving its paperwork.

We set the scene of a recent example about ‘what can go wrong’ in the world of horse transport and, specifically, a Queensland case called Sydney Horse Transport v Langdon [2015] QCAT 462.

The judgment provides some basic lessons to those in the industry about ‘what is a contract’ and the need for reliable evidence if you have performed a service but need to sue to get paid.

The judgment also hinted at the hand of a practical joker.

What do you need to do to minimise the risk that someone might ‘take a lend’ of you?  How do you make sure you get paid?  If you have these questions, in this post you will find some answers.

The facts of the case

On 12 October 2014, Sydney Horse Transport collected three race horses named Mary, Aussie Tenant and With Danger from a property at Kenilworth, Queensland for transport to an address in Bangholme, Victoria.

The horses are owned by Peter Langdon, who lives in Victoria and owns property there, but who testified that he intended for the horses to stay in Queensland and knew nothing about the horses’ collection.

Lucas Waller, a Sydney Horse Transport employee, took the booking.  He could not say with any degree of certainty that Mr Langdon was the person who called to book the horses. The only record was a note he made that included the pickup address and a mobile phone number.

Mr Langdon said that the first he knew the horses had left Queensland bound for Victoria was when Sydney Horse Transport called him in October 2014 to tell him his horses were in Sydney.

Mr Langdon reported the theft of the horses to the police, although it is not clear whether this happened before or after he was contacted by Sydney Horse Transport.  A police officer determined that the mobile phone number taken down by Lucas Waller at the time of the booking had been disconnected, and that it did not belong to Mr Langdon or anyone connected with him.

In any event, when he found out that the horses were in Sydney, Mr Langdon asked for them to be returned to Queensland.  Sydney Horse Transport continued to take them to Victoria.

On 1 March 2015, Sydney Horse Transport invoiced Mr Langdon for transportation costs for the horses and agistment fees.  Mr Langdon refused to pay.

Sydney Horse Transport then put a lien on the horses and sued Mr Langdon for horse transportation costs to the total sum of $15,707.10.

What happened?

Sydney Horse Transport lost its claim, and the Tribunal Member ordered that the horses be released from their agistment at a Victorian property into the custody of Mr Langdon, without any charge or fee.

Why did Sydney Horse Transport lose?

To succeed in its claim, Sydney Horse Transport had to show it had a contract with Mr Langdon to transport the horses from Queensland to Victoria and, further that it was a term of the contract that agistment fees would be payable if the horses were to be kept by or in the care of Sydney Horse Transport for any reason.

What do you need to do to prove a contract?

The onus was on Sydney Horse Transport as the plaintiff to prove, on the balance of probabilities, that Mr Langdon was the other party to the contract.

There was no written contract here, although a contract need not be in writing. To establish a contract, you need to prove that:

1. The parties have demonstrated their mutual agreement.
2. There is an offer, it’s been accepted, there is consideration (a benefit for the bargain, such as money) and the parties have intended to create legal relations.
3. The terms must be certain.
4. The parties must have capacity to enter into the contract.

To show that Mr Langdon had ‘accepted’ the offer, Sydney Horse Transport had to prove he knew about it and clearly intended to accept it.  However, Sydney Horse Transport did not have the evidence to prove this.

Could Mr Langdon’s representative or agent have made the booking?  If that happened, then the Tribunal was prepared to accept that this would be sufficient to bind Mr Langdon.  However, the evidence relied on by Sydney Horse Transport did not shed any light on this issue.

Could it be the case that there had been such a course of dealing between the parties that the Tribunal could infer an intention by Mr Langdon to be legally bound?  There had in fact been one prior occasion when Mr Langdon had used Sydney Horse Transport.  Mr Langdon said this booking had been made with his knowledge and authority.  However, the Tribunal member said that one prior dealing could not be described as a course of conduct capable of leading to an inference that a contract was on foot.

What ultimately proved fatal to Sydney Horse Transport was that it could not prove Mr Langdon (or any representative) knew about the contract.  A note with a pickup address and phone number was simply not enough.

What should Sydney Horse Transport have done differently?

There is best practice, and there is ‘good enough’ practice which can still get you to the right outcome.

Best practice would require the person booking the transport to sign some form of contract before the journey began.  However, that’s boring and involves fine print paperwork and a need to follow up people’s signature, so let’s consider the ‘good enough’ option.

After all, good enough practice is often the real world.

For example, if you are moving house, the transport company will usually deliver a quote and, once it is accepted, some paperwork for you to sign.

The paperwork is often an order form setting out your details, the property details, the date when transportation is required and the fee. Fine print standard terms and conditions will usually be on the back of the page.  There will be a signature section on the form, where you acknowledge your agreement and send it back. This is the contract.

Ideally, the customer will sign the contract and return it to you by fax or email.  However, if this does not happen but you do the removal anyway, you want to be able to prove that there was an agreement if the customer later refuses to pay.

For instance, let’s say you emailed the paperwork and the customer responded saying, “Thanks mate – all good”.  Then you went to their house, they opened the door, you went in and boxed up their stuff, and took it to the new place.  You then sent through an invoice.

If the customer later refused to pay on the basis that, “You didn’t make me sign the form you sent through”, then the customer would be on shaky ground so long as you had sufficient evidence to prove that the service was carried out with the customer’s consent and agreement to all relevant terms.

Here is the kind of evidence a court would require:

1. The draft contract with the name of the customer on it.
2. Evidence that the draft contract was emailed through, such as the email from your sent box, or even better, an automatic delivery receipt acknowledgement from your email inbox (litigators use this function all the time when they send emails).
3. The customer’s email telling you “Thanks mate –all good”.
4. The names of the removalists who went to the house to do the removal, and a copy of any documents confirming the call-out and the delivery.
5. An affidavit from the removalist who knocked on the door, and any conversations that transpired with them during the removal.
6. A copy of the invoice and confirmation that it was sent.

There is a remaining issue with the above evidence.  It relates to item 3, the critical evidence in which the customer said, “Thanks mate – all good”.  What if that statement was not made in response to receiving the contract but, say, was made after receiving the initial quote? Would the same comment made in relation to receipt of a quote prove the existence of an agreement? Or would it only suggest that the customer has received the quote but is still shopping around?

This demonstrates why you need to make sure you can prove your timeline.  You want to be able to show that the “Thanks mate – all good” email did not relate to the quote, but was received after you sent through the additional paperwork for signature.  This means you need to list everything in chronological order, having regard to the time when emails were sent and received.  Once you do that, you are in the home straight.

If Sydney Horse Transport had followed either the ‘best practice’ or ‘good enough practice’ scenarios, it would have likely appreciated at an early stage that it was in the hands of a practical joker, or otherwise had sufficient evidence to prove its case theory.

As a final comment, you will have seen that proving the ‘good enough’ scenario requires far more effort than proving the ‘best practice’ scenario.

This suggests that, sometimes, boring is better.