Hello Sambuko,
That error is likely due to a misconfiguration of your e-mail authentication settings. Please go to Admin->Email in the web portal, and verify the SMTP user name and password fields. If you intend to use anonymous SMTP, then please leave both of those fields blank.
Please note if your server require a secure connection, you may need to enable SSL/TLS for the connection, and see if that helps. In order to enable this in Collaborator, you must add some options to your ccollab-server.vmoptions file. This is located in the root of your Collaborator installation directory.
Please add the following lines:
-Dsmartbear.mail.transport.protocol="smtp"
-Dsmartbear.mail.smtp.auth="true"
-Dsmartbear.mail.smtp.starttls.enable="true"
Note: the last line in a .vmoptions file must be followed by a new line.
Once you have done this, then you must restart the Collaborator service for the settings to take effect.