Tag Archives: Agency

Callander -v- Oelrichs And Another; 12-Nov-1838

The court considered the extent of a duty of care which might be owed by an agent.
Bosanquet J. said: ‘The jury were warranted in concluding, that if the Defendants were to effect an insurance upon the terms in question, they undertook to give notice in case of failure: that undertaking arises out of the nature of the case, and the relation in which the parties stood to each other: and according to the principle laid down in Smith v. Lascelles if a merchant is led, from previous transactions, to expect that his correspondent will effect an insurance, he has a right to rely on his discharging that duty, unless he receives a letter to the contrary.
Whether that expectation arises from previous dealings, or from an undertaking to insure in the particular instance, can make no difference; and Buller J. says, ‘Where the merchant abroad has no effects in the hands of his correspondent, yet, if the course of dealing between them be such that the one has been used to send orders for insurance, and the other to comply with them, the former has a right to expect that his orders for insurance will be obeyed, unless the latter give him notice to discontinue that course of dealing.”

Date: 12-Nov-1838
Links: Commonlii,
References: , [1838] EngR 915, (1838) 5 Bing NC 58, (1838) 132 ER 1026

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Filed under Agency, Insurance

A NHS Trust -v- Dr A; CoP 27-Mar-2013

The trust sought a declaration as regards its treatment of Dr A, a resident patient who had begun a hunger strike. The trust sought a declaration as to his capacity and possible compulsory feeding.

Court: CoP
Date: 27-Mar-2013
Judges: Baker J
Statutes: Mental Capacity Act 2005
Links: Bailii,
References: [2013] EWHC 2442 (COP),

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Filed under Agency, Health

JL (Revocation of Lasting Power of Attorney); CoP 9-Oct-2014

Application by the Public Guardian to revoke and cancel the registration of a Lasting Power of Attorney for property and financial affairs.

Court: CoP
Date: 09-Oct-2014
Judges: Lush SJ
Links: Bailii,
References: [2014] EWCOP 36,

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Bryant Powis & Bryant -v- La Banque du Peuple; PC 1893

Powers of Attorney are to be construed strictly.

Court: PC
Date: 01-Jan-1893
Judges: Lord Macnaghten
References: [1893] AC 170,
Cited By:

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Filed under Agency, Commonwealth

AB (Revocation of Enduring Power of Attorney); CoP 7-Jul-2014

Application for the court to revoke an Enduring Power of Attorney (‘EPA’) on the ground that, having regard to all the circumstances, the attorneys are unsuitable to be the donor’s attorneys.

Court: CoP
Date: 07-Jul-2014
Judges: Senior Judge Lush
Links: Bailii,
References: [2014] EWCOP 12,

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Lonsdale (T/A Lonsdale Agencies) -v- Howard & Hallam Ltd; HL 4-Jul-2007

The claimant sought compensation after his commercial agency was terminated. The court had found that the agency was declining in turnover, and reduced the compensation accordingly. There had been no written agreement for the agency, and six months’ notice was given.
Held: The agent’s appeal failed. The UK had chosen to implement both the allowed systems for calculating compensation, providing an indemnity if agreed by the parties, but otherwise as calculated under regulation 17. The system was derived from French law, and the court was entitled to look to that law for assistance. That did not mean that the British Court should follow French practice, based on commercial practice in France, and award two years’ commission; the article was not an endorsement of French practice, but left the calculation within the discretion of member states. This was not a business fro which anyone would pay the sum sought. Reference to eth ECJ refused.
Lord Hoffmann: ‘the courts of the United Kingdom would not be acting inconsistently with the directive if they were to calculate the compensation payable under article 17(3) by reference to the value of the agency on the assumption that it continued: the amount which the agent could reasonably expect to receive for the right to stand in his shoes, continue to perform the duties of the agency and receive the commission which he would have received.’

Court: HL
Date: 04-Jul-2007
Judges: Lord Bingham of Cornhill, Lord Hoffmann, Lord Rodger of Earlsferry, Lord Carswell, Lord Neuberger of Abbotsbury
Statutes: Commercial Agents (Council Directive) Regulations 1993, Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents 17
Links: Bailii,
References: [2007] UKHL 32, Times, 10-Jul-2008
Cases Cited:

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Filed under Agency, European

Parks -v- Esso Petroleum Company Limited; CA 23-Nov-1998

A renewed application for leave to appeal and for an application for leave to serve and set down out of time a notice of appeal in respect of which leave was given.

Court: CA
Date: 23-Nov-1998
Links: Bailii,
References: [1998] EWCA Civ 1820,
Cited By:

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Filed under Agency, Litigation Practice

Parks -v- Esso Petroleum Company Limited; CA 23-Jul-1999

The claimant sought to add a claim under the regulations for compensation after termination of his agency for the defendants. The lower court had rejected his claim saying that the petrol products he sold were at a price fixed by Esso, and that since he did not negotiate the price he fell outside the regulations.
Held: The word ‘negotiate’ need not include the bargaining of price, but did require more than a collection of funds after a self-service sale: ‘he took no part in the customer’s choice and self-service.’

Court: CA
Date: 23-Jul-1999
Judges: Morritt, Thorpe, Popplewell LJJ
Statutes: Commercial Agents (Council Directive) Regulations 1993
Links: Bailii,
References: [1999] EWCA Civ 1942,
Cases Cited:

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Filed under Agency, Landlord and Tenant

Barret Mckenzie and Co Ltd -v- Escada (UK) Ltd; QBD 1-Feb-2001

The court considered the method of calculation of compensation payable to a commercial agent on termination of the agency. The directive provided that the agent should be compensated, not indemnified, and the way an English court calculated compensation need not follow other European jurisdictions. A tariff system would be unfair, and the court must make allowance for the amounts expended by the agent. Accordingly it would be unjust to base the compensation on the gross return, but it should rather be based upon the net income of the agency.

Court: QBD
Date: 01-Feb-2001
Judges: Bowers J
Statutes: Commercial Agents (Council Directive) Regulations 1993 No 3053
Links: Times, Bailii,
References: [2001] EWHC QB 462, [2001] EuLR 567, [2001] All ER (D) 78
Cases Cited:
Cited By:

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Filed under Agency, Commercial, Damages, European

The Public Guardian -v- AW and Another (Application To Revoke Lasting Power of Attorney); CoP 20-Aug-2014

Application by the Public Guardian to revoke and cancel the registration of a Lasting Power of Attorney.

Court: CoP
Date: 20-Aug-2014
Judges: Lush SJ
Links: Bailii,
References: [2014] EWCOP 28,

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Filed under Agency, Health

Reckitt -v- Barnett Pembroke & Slater Ltd; HL 1929

The House was asked whether a power of attorney included a power to draw cheques on the principal’s bank account in order to pay his own debts. The Court of Appeal by a majority, Russell J dissenting, had held that it did having regard to the terms of a letter written by the principal to his bankers.
Held: The decision was reversed. A power of attorney is to be construed strictly. The House adopted the statement of Russell LJ: ‘the primary object of a power of attorney is to enable the attorney to act in the management of his principal’s affairs. An attorney cannot in the absence of a clear power to do so, make presents to himself or to others of his principal’s property ‘

Court: HL
Date: 01-Jan-1929
References: [1929] AC 176,
Cited By:

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N and Another -v- E and Others; CoP 15-Aug-2014

E had executed a Lasting Power of Attorney. There had been a dispute leading to the revocation of the appointment. The court now considered in particular the appropriate order for costs.

Court: CoP
Date: 15-Aug-2014
Judges: Lush SJ
Links: Bailii,
References: [2014] EWCOP 27,

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Filed under Agency, Costs, Health

Garnac Grain Co Inc -v- HMF Faure and Fairclough; 1967

The Board was asked what was necessary to establish the raltionship of principal and agent.
Held: In the essence of agency is the element of consent.
Lord Pearson said: ‘The relationship of principal and agent can only be established by the consent of the principal and agent. They will be held to have consented if they have agreed to what amounts in law to such a relationship even if they do not recognise it themselves and even if they have professed to disclaim it . . The consent however must be given by each of them either expressly or by words and conduct.’

Date: 01-Jan-1967
Judges: Lord Pearson
References: [1967] 2 All ER 353, [1968] AC 1130, [1967] 3 WLR 143
Cited By:

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Suffolk County Council -v- JU and Another; CoP 30-Jul-2014

Appointment of deputy – objection

Court: CoP
Date: 30-Jul-2014
Judges: Lush SJ
Links: Bailii,
References: [2014] EWCOP 21,

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Filed under Agency, Health

Gregory and Gregory -v- Turner, Turner; Regina (Morris) -v- North Somerset Council; CA 19-Feb-2003

The parties were involved in a boundary dispute. One granted an enduring power of attorney, and sought to appear as a litigant in person through the power.
Held: The right of a litigant in person to represent himself was a personal right, and as such was not capable of being delegated. The Act created a complete code setting out those with rights of audience. The 1995 Act did not change the underlying position, and the 1990 Act preserved exising rights. Those did not give a right for a non-qualified agent to act. However, a litigation friend does not have to act by a solicitor and can conduct the litigation on behalf of P, though a litigation friend who does not otherwise have a right of audience requires the permission of the court to act as an advocate on behalf of P.

Court: CA
Date: 19-Feb-2003
Judges: Lord Justice Brooke Lord Justice Sedley Lord Justice Carnwath
Statutes: Enduring Powers of Attorney Act 1995, Courts and Legal Services Act 1990
Links: Bailii,
References: Times, 21-Feb-2003, [2003] EWCA Civ 183, [2003] 1 WLR 1149
Cases Cited:
Cited By:

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Filed under Agency, Legal Professions, Litigation Practice

Harwood T/A RSBS Group -v- Smith and Smith and Bedwell Watts and Company (a Firm); CA 14-Nov-1997

An estate agent with sole selling rights was not entitled to claim commission on a sale where he had contributed no act to the sale, even though his terms were specific enough to deal with the particular circumstances which had arisen here. Such a clause should be interpreted tightly against those seeking to place reliance upon it. On a sensible reading of the whole statement, the liability to pay remuneration in a case such as this must, therefore, be limited to the purchaser who was introduced to the client by that estate agent during the period. If the purchaser is introduced to the client in any other way, the estate agent can only claim remuneration if he has conducted negotiations with the purchaser about the property during that period. Hobhouse LJ: ‘The purpose of section 18 and of the regulations is to attempt to ensure that the person instructing the estate agent shall know precisely what his liabilities to the estate agent are. Part of the mischief to which the Act and regulations were directed was the use by estate agents of expressions such as ‘Sole Agency’ or ‘Sole Selling Rights’, which had no clearly defined meaning and the implications of which would not be fully understood by the client.’

Court: CA
Date: 14-Nov-1997
Judges: Lord Justice Hobhouse, Lord Justice Pill, Lord Justice Mummery
Statutes: Estate Agency Act 1979 18, Estate Agents (Provision of Information) Regulations 1991 (SI 1191 No 859) 5(1)
Links: Times, Bailii,
References: [1997] EWCA Civ 2725, [1998] 1 EGLR 5
Cases Cited:
Cited By:

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Filed under Agency, Consumer

Norwich Union Life & Pensions Ltd -v- Strand Street Properties Ltd; ChD 20-May-2009

The claimant sought a sum being its losts costs in connection with a proposed development scheme, being agreed to be paid by the defendants through their agents.

Court: ChD
Date: 20-May-2009
Judges: Morgan J
Links: Bailii,
References: [2009] EWHC 1109 (Ch),

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Filed under Agency, Contract

Hollins -v- Fowler; HL 1875

One who deals with goods at the request of the person who has the actual custody of them, in the bona fide belief that the custodier is the true owner, or has the authority of the true owner, should be excused for what he does if the act is of such a nature as would be excused if done by the authority of the person in possession if he was a finder of the goods or intrusted with their custody. Thus a warehouseman with whom goods had been deposited is guilty of no conversion by keeping them or restoring them to the person who deposited them with him, though that person turns out to have had no authority from the true owner. The same principle applies to persons ‘acting in a subsidiary character, like that of a person who has the goods of a person employing him to carry them, or a caretaker, such as a wharfinger’. Blackburn J (Advising the House): ‘If, as is quite possible, the changes in the course of business since the principles of law were established make them cause great hardships or inconvenience, it is the province of the Legislature to alter the law.’

Court: HL
Date: 01-Jan-1875
Judges: Blackburn J, Brett J
References: (1875) LR 7 HL 757,
Cases Cited:
Cited By:

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Filed under Agency, Torts - Other

Warren -v- Drukkerij Flach BV; CA 18-Jul-2014

The claimant said that he had been an agent of the defendant within the 1993 Regulations, and entitled to compensation on termination of that contract.

Court: CA
Date: 18-Jul-2014
Judges: Longmore, Tomlinson, Fulford LJJ
Statutes: Commercial Agents (Council Directive) Regulations 1993 17 18
Links: Bailii,
References: [2014] EWCA Civ 993,

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Industries and General Mortgage Co Ltd; 1949

The court discussed difficulties in defining what is a bribe: ‘Yes, but earlier the learned judge has said that if a gift be made to a confidential agent with a view to inducing him, it is a bribe, and, therefore, in using the later language and referring to the bribes the learned judge is in effect saying: ‘I am using these later presumptions in cases where a bribe has been established and I have already defined a bribe as being only something which has been established as being paid with a certain motive.’ That, of course, would tear up the whole of the learned judge’s observation because he says lower down that the courts will not receive evidence as to what is the motive of the person making the payment. The motive will be conclusively inferred against him.’

Date: 01-Jan-1949
Judges: Slade J
References: [1949] 2 All ER 573,
Cases Cited:
Cited By:

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Filed under Agency, Torts - Other

Stewart Chartering Ltd -v- Owners of the ship the Peppy; Stewart Offshore Services (Jersey) Ltd -v- Silan Maritime Co & Another; AdCt 15-Apr-1997

ComC Admiralty action in rem – dishonest withholding of freight paid – meaning of dishonesty – objective and subjective considerations – reimbursement of commission – Admiralty action in rem – entitlement to commission – collateral secret profit – secret profit – distinction.
David Steel QC said of the Hippisley case: ‘this decision of the Court of Appeal admirably demonstrates the difference between a collateral secret profit which preserves the right to commission and a secret profit (albeit honest) directly impacting on the moneys payable to the principal which may destroy the entitlement.’

Court: AdCt
Date: 15-Apr-1997
Judges: David Steel QC
References: [1997] 2 Lloyd's Rep 722,
Cases Cited:
  • Hippisley -v- Knee Bros, CA, Cited, ([1905] 1 KB 1, [1905] 1 LJKB 68, [1905] 92 LT 20, [1905] 21 TLR 5, [1905] 49 Sol Jo 15)

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Filed under Agency, Transport

Re DP (Revocation of Lasting Power of Attorney); CoP 11-Feb-2014

Application by the Public Guardian to revoke and direct the cancellation of the registration of a Lasting Power of Attorney.

Court: CoP
Date: 11-Feb-2014
Judges: Lush SJ
Statutes: Mental Capacity Act 2005 22(4)(b)
Links: Bailii,
References: [2014] EWHC B4 (COP),

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Filed under Agency, Health

FHR European Ventures Llp and Others -v- Cedar Capital Partners Llc; SC 16-Jul-2014

The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or commission.

Court: SC
Date: 16-Jul-2014
Judges: Lord Neuberger, President, Lord Mance, Lord Sumption, Lord Carnwath, Lord Toulson, Lord Hodge, Lord Collins
Links: Bailii,
References: [2014] UKSC 45,

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Filed under Agency, Equity, Totts - Other

Re MRJ JT and KT (Reconsideration of Order); CoP 10-Apr-2014

The court had made an order transferring responsibility for MRJ’s affairs from the appointed attorney to the local authority. The order had been made on the papers, and the court now heard an application for it to be reconsidered.
Held: The orders made were confirmed. The court recognised that the interference in a person’s choice of attorney was an interference in their right to private and family life under article 8 of the Convention, and must only be allowed where fully warranted. The evidence now before the court established even more clearly the mismanagement of the patient’s affairs by the agent.

Court: CoP
Date: 10-Apr-2014
Judges: Lush LJ
Statutes: Mental Capacity Act 2005, Court of Protection Rules 2007, European Convention on Human Rights 8
Links: Bailii,
References: [2014] EWHC B15 (COP),
Cases Cited:

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Filed under Agency, Health, Human Rights, Litigation Practice

Re Harcourt; CoP 2013

Unless warranted under Article 8.2, the revocation by the Court of Protection an LPA, which a donor executed when they had capacity and in which they chose a family member to be their attorney, would be a violation of their Article 8.1 right to respect for their private and family life

Court: CoP
Date: 01-Jan-2013
Statutes: European Convention on Human Rights 8.2, Mental Capacity Act 2005
References: [2013] COPLR 69,
Cited By:

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Filed under Agency, Health

Andrew -v- Ramsay & Co; 1903

The defendant had been employed as agent by the plaintiff to sell property belonging to the plaintiff. The defendant achieved this and was paid his commission, but had also taken a secret commission from the buyer. The plaintiff sought repayment of the commission.
Held: The action succeeded. Where an agent takes a commission secret from his principal, the principal may refuse to pay or recover any commission under the main agency contract. The action for and recovery of the secret commission had not operated as a ratification of the sale.

Date: 01-Jan-1903
References: [1903] 72 LJKB 865,
Cited By:

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LNOC Ltd -v- Watford Association Football Club Ltd; ComC 21-Nov-2013

The claimant sought repayment of sums loaned to eth football club. The defendant replied saying that the loans were ineffective since the claimant had known that they were being entered into by an officer of the club without authority and contrary to the club’s interests.

Court: ComC
Date: 21-Nov-2013
Judges: Mackie QC J
Links: Bailii,
References: [2013] EWHC 3615 (Comm),

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Filed under Agency, Torts - Other

Hughes -v- Percival; 1883

The parties were neighbouring householders with a party wall. A builder working in the defendant’s house negligently cut into the party wall, causing the partial collapse of both the defendant’s house and the Plaintiff’s house next-door.
Held: Lord Blackburn said: ‘The first point to be considered is what was the relation in which the defendant stood to the plaintiff. It was admitted that they were owners of adjoining houses between which was a party-wall the property of both. The defendant pulled down his house and had it rebuilt on a plan which involved in it the tying together of the new building and the party-wall which was between the plaintiff’s house and the defendant’s, so that if one fell the other would be damaged. The defendant had a right so to utilize the party-wall, for it was his property as well as the plaintiff’s; a stranger would not have had such a right. But I think the law cast upon the defendant, when exercising this right, a duty towards the plaintiff. I do not think that duty went so far as to require him absolutely to provide that no damage should come to the plaintiff’s wall from the use he thus made of it, but I think that the duty went as far as to require him to see that reasonable skill and care were exercised in those operations which involved a use of the party-wall, exposing it to this risk. If such a duty was cast upon the defendant he could not get rid of responsibility by delegating the performance of it to a third person. He was at liberty to employ such a third person to fulfil the duty which the law cast on himself, and, if they so agreed together, to take an indemnity to himself in case mischief came from that person not fulfilling the duty which the law cast upon the defendant; but the defendant still remained subject to that duty, and liable for the consequences if it was not fulfilled. This is the law I think clearly laid down in Pickard v Smith 10 CB (NS) 470, and finally in (1881) Dalton v Angus 6 App Cas 740. But in all the cases on the subject there was a duty cast by law on the party who was held liable.’

Date: 01-Jan-1883
Judges: Lord Blackburn
References: (1883) 8 App Cas 443, [1881-85] All ER 44, (1883) 8 AC 443
Cited By:

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Filed under Agency, Negligence, Vicarious Liability

United Antwerp Maritime Agencies (Unamar) Nv -v- Navigation Maritime Bulgare; ECJ 17-Oct-2013

ECJ Rome Convention on the law applicable to contractual obligations – Articles 3 and 7(2) – Freedom of choice of the parties – Limits – Mandatory rules – Directive 86/653/EEC – Self-employed commercial agents – Contracts for sale or purchase of goods – Termination of the agency contract by the principal – National implementing legislation providing for protection going beyond the minimum requirements of the directive and providing also for protection for commercial agents in the context of contracts for the supply of services

Court: ECJ
Date: 17-Oct-2013
Judges: M Ilesic P
Statutes: Directive 86/653/EEC
Links: Bailii,
References: C-184/12, [2013] EUECJ C-184/12

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Filed under Agency, Contract, European

Global Energy Horizons Corp -v- Gray; ChD 21-Dec-2012

The claimant asserted breach of fiduciary duties by the respondent.

Court: ChD
Date: 21-Dec-2012
Judges: Vos J
Links: Bailii,
References: [2012] EWHC 3703 (Ch),

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Gomba Holdings UK Ltd -v- Minories Finance Ltd; CA 1988

The court was asked as to ownership of documents coming into existence in the course of a receivership. The plaintiff companies had argued that all documents belonged to them because the receivers were their agents and the documents were created in the course of that agency.
Held: As between a principal and its agent, all documents prepared or received by agent belong to principal, and were to be delivered up on termination of agency on basis of ownership of them.
However, whilst the receivers were technically agents of the companies, the agency of a receiver is not an ordinary agency because it involves a tri-partite relationship in which the receiver owed duties to both the mortgagor company and the debenture holder. It determined the dispute over ownership by assessing the purpose for which the documents were created – whether as performance of one of the duties (in which case the companies could only claim ownership when the documents were created in the course of performing the duty to them to manage their affairs) or to enable them to carry out their professional duties as distinct from performance of a duty (in which case the documents were the property of the receivers).
Hoffmann LJ said that a receiver and manager ‘is no ordinary agent’ and continued: “Although nominally the agent of the company, his primary duty is to realise the assets in the interests of the debenture holder and his powers of management are really ancillary to that duty.”
Fox LJ discussed the nature of a receiver’s agency, saying: “The agency of a receiver is not an ordinary agency. It is primarily a device to protect the mortgagee or debenture holder. Thus, the receiver acts as agent for the mortgagor in that he has power to affect the mortgagor’s position by acts which, though done for the benefit of the debenture holder, are treated as if they were the acts of the mortgagor. The relationship set up by the debenture, and the appointment of the receiver, however, is not simply between the mortgagor and the receiver. It is tripartite and involves the mortgagor, the receiver and the debenture holder. The receiver is appointed by the debenture holder, upon the happening of specified events, and becomes the mortgagor’s agent whether the mortgagor likes it or not. And, as a matter of contract between the mortgagor and the debenture holder, the mortgagor will have to pay the receiver’s fees. Further, the mortgagor cannot dismiss the receiver since that power is reserved to the debenture holder as another of the contractual terms of the loan. It is to be noted also that the mortgagor cannot instruct the receiver how to act in the conduct of the receivership.”

Court: CA
Date: 01-Jan-1988
Judges: Hoffmann, Fox LJJ
References: [1988] 1 WLR 1231, [1989] 1 All ER 261, (1988) 5 BCC 27, [1989] BCLC 115
Cited By:

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Filed under Agency, Insolvency

Fairstar Heavy Transport Nv -v- Adkins and Another; CA 19-Jul-2013

The court was asked whether the appellant company was entitled to an order requiring its former Chief Executive Officer, after the termination of his appointment, to give it access to the content of emails relating to its business affairs, and stored on his personal computer in England, were sent or received by him on behalf of the company. The claimant asserted an enforceable proprietory claim in those rent or received on their behalf. At first instance the court had found that there existed no property in information.
Held: In effect Fairstar claimed a right which it descibed as ‘proprietory’ to the content of the emails, entitling it to inspect and make copies of the content of the emails, either directly or through an independent person instructed for that purpose. The assertion of such a right failed.
However, the claimant was able to achieve its aims through the law of agency.

Court: CA
Date: 19-Jul-2013
Judges: Mummery, Patten, Black LJJ
Links: Bailii,
References: [2013] EWCA Civ 886,
Cases Cited:

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Filed under Agency, Employment, Information

JD Wetherspoon Plc -v- Harris and Others; ChD 1-May-2013

The chancellor gave reasons for refusing to strike out the claim. The claimant had alleged dishonest assistance in a breach of an agent’s duty by the defendants in two land transactions.

Court: ChD
Date: 01-May-2013
Judges: Sir Terence Etherton
Links: Bailii, WLRD,
References: [2013] EWHC 1088 (Ch), [2013] WLR(D) 159, [2013] 1 WLR 3296

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Filed under Agency, Torts - Other

Smith, Stone and Knight Limited -v- Birmingham; 1939

An application was made to set aside a preliminary determination by an arbitrator. The parties disputed the compensation payable by the respondent for the acquisition of land owned by Smith Stone and held by Birmingham Waste as its tenant on a yearly tenancy. Birmingham Waste was a wholly owned subsidiary of Smith Stone and was said in the Smith Stone claim to carry on business as a separate department and agent for Smith Stone. As a yearly tenant, Birmingham Waste, however, had no status to claim compensation. The question was whether, as a matter of law, the parent company could claim compensation for disturbance to the business carried on at the acquired premises. The arbitrator’s award answered this in the negative. Smith Stone applied to set the award aside on the ground of technical misconduct.
Held: An implied agency existed between the parent and subsidiary companies so that the parent was considered to own the business carried on by the subsidiary and could claim compensation for disturbance caused to the subsidiary’s business by the local council. In determining whether a subsidiary was an implied agent of the parent, Atkinson J examined whether, on the facts as found by the arbitrator and after rejecting certain conclusions of fact which were unsupported by evidence, Smith Stone was in fact the real owner of the business and was therefore entitled to compensation for its disturbance.
The rule to protect the fact of separate corporate identities was circumvented because the subsidiary was the agent, employee or tool of the parent. The subsidiary company was operating a business on behalf of its parent company because its profits were treated entirely as those of the parent company’s; it had no staff and the persons conducting the business were appointed by the parent company, and it did not govern the business or decide how much capital should be embarked on it. In those circumstances, the court was able to infer that the company was merely the agent or nominee of the parent company.
Atkinson J formulated six relevant criteria, namely:
‘(a) Were the profits treated as profits of the parent?
(b) Were the persons conducting the business appointed by the parent?
(c) Was the parent the head and brain of the trading venture?
(d) Did the parent govern the venture, decide what should be done and what capital should be embarked on the venture?
(e) Did the parent make the profits by its skill and direction?
(f) Was the parent in effectual and constant control?’

Date: 01-Jan-1939
Judges: Atkinson J
References: [1939] 4 All ER 116,
Cited By:

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Filed under Agency, Company

Day -v- Harris and Another; CA 20-Mar-2013

Court: CA
Date: 20-Mar-2013
Judges: Rix, Lloyd, MacFarlane LJJ
Links: Bailii, WLRD,
References: [2013] EWCA Civ 191, [2013] WLR(D) 112

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Filed under Agency, Health

Piper -v- Hales; QBD 18-Jan-2013

The claimant owned a very vauable vintage Porsche racing car. It was hired to the defendant. The car suffered severe mechanical damage whilst being driven, and the insurers declined liability.
Held: The Defendant as hirer was under an obligation to: ‘take reasonable care of the chattel and . . use reasonable skill in its management and use reasonable skill in its management and use’. The defendant claimed a custom that a driver should not beliable for mechanical failure. The court found no sufficiently clear custom.
The evidence overwhelmingly pointed to the cause of the engine damage being the Defendant’s failure to properly engage gear and over run the engine.

Court: QBD
Date: 18-Jan-2013
Judges: Simon Brown QC
Links: Bailii,
References: [2013] EWHC B1 (QB),
Cases Cited:

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Filed under Agency, Contract

Ultzen -v- Nicols; 1894

The plaintiff went to eat in the defendant’s restaurant. He gave over his coat to the waiter, who hung it on a hook. It was stolen.
Held: The defendant was liable as a bailee for reward. He was guilty of negligence in the care of the coat.

Date: 01-Jan-1894
References: [1894] 1 QB 92, (1894) 63 LJ QB 829, (1894) 70 LT 140, (1894) 10 TLR 25, (1894) 28 Sol Jo 26, (1894) 10 R 13 DC
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Filed under Agency, Negligence

Tinsley -v- Dudley; CA 1951

The plaintiff sought damages after the motorcycle he had parked in the defendant hotelier’s closed car park was stolen.
Held: An occupier is under no duty to protect goods from the risk of theft by third parties. The publican was not a bailee of the motorcycle in that there had been no transfer of possession to the publican.
Jenkins LJ remarked on the complete absence of any authority suggesting liability for the loss of a vistor’s property. He said that such a principle would produce: ‘a liability of a most comprehensive and sweeping character, and would have entered into a very great number of cases if it existed.’

Court: CA
Date: 01-Jan-1951
Judges: Jenkins LJ
References: [1951] 2 KB 18,

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Filed under Agency, Negligence

Great Northern Railway Co -v- Swaffield; 1874

Mr Swaffield sent his horse by railway to a station at Sandy. The horse arrived late at night, and the railway company lodged the horse overnight for their own account at a livery stable. Mr Swaffield failed to collect it on the following morning. The only basis on which he was prepared to give any instructions about the fate of his horse was that the railway company assumed all responsibility for storing and delivering it to him from the time of its arrival at Sandy. After four months of this, the railway company lost patience. They unilaterally delivered the horse to Mr Swaffield’s farm and then sued him for the livery charges to date.
Held: The contract of carriage had come to an end on the day after the arrival of the horse at Sandy, when the performance required of them as carriers was completed. Baron Pollock drew attention to Cargo ex Argos in the course of argument and based his judgment upon it. Having referred to previous authority to the effect that the railway company was bound to take reasonable care of the horse notwithstanding the termination of the contract of carriage, he observed that ‘if there were that duty without the correlative right, it would be a manifest injustice.’
Kelly CB, concurring treated the principle as applying because it was necessary for the railway company to incur the expenditure. ‘They had no choice unless they would leave the horse at the station or in the high road to his own danger and the danger of other people.’

Date: 01-Jan-1874
Judges: Baron Pollock, Kelly CB
References: (1874) LR 9 Ex 132,
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Filed under Agency

China Pacific SA -v- Food Corpn of India (The Winson); HL 1982

A cargo of wheat was loaded in the US for delivery to Bombay. The ship was stranded on a reef in the South China Sea. Salvors entered into a salvage agreement with the shipowners and cargo owners on Lloyds open form. In performance of that contract the salvors lightened the vessel by offloading part of the cargo into barges and carrying it to Manila as a place of safety. There the salvors arranged for it to be stored under cover, in part on a vessel in the harbour and in part in a bonded warehouse ashore. The salvors sought to recover the costs of such storage from the cargo owners, being the stevedoring and charter costs of arranging storage on the vessel in the harbour, and the warehouse charges they had to pay for the warehousing ashore. The storage was both reasonable and necessary for the preservation of the cargo and to prevent its deterioration. The claim had succeeded before Lloyd J, but overturned at the Court of Appeal.
Held: The decision was re-instated. The case turned on the application of ‘well known and basic principles of the common law of salvage, of bailment and of lien.’ The bailee was left in possession of the goods after the termination of the contract under which the bailment had originally been made, and in the absence of any contrary instructions from the cargo-owner, the warehousing of the goods was necessary for their preservation.
Lord Diplock noted that the case had been argued throughout on the basis that the salvage contract had come to an end at the time the cargo arrived in Manila, whilst leaving open whether that assumption was correct. The salvors were entitled to recover the storage costs from cargo owners because as bailees they: ‘the bailment which up to the conclusion of the salvage services had been a bailment for valuable consideration became a gratuitous bailment; and so long as that relationship of bailor and bailee continued to subsist the salvors, under the ordinary principles of the law of bailment too well known and too well-established to call for any citation of authority, ‘owed a duty of care to the cargo owner to take such measures to preserve the salved wheat from deterioration by exposure to the elements as a man of ordinary prudence would take for the preservation of his own property . . and if he fulfils that duty he has, in my view, a correlative right to charge the owner of the goods with the expenses reasonably incurred in doing so.’
and ‘It is, of course, true that in English law a mere stranger cannot compel an owner of goods to pay for a benefit bestowed upon him against his will; but this latter principle does not apply where there is a pre-existing legal relationship between the owner of the goods and the bestower of the benefit, such as that of bailor and bailee, which imposes upon the bestower of the benefit a legal duty of care in respect of the preservation of the goods that is owed by him to their owner.’
Lord Simon of Glaisdale, concurring, thought that to confine agency of necessity to cases where the issue was the bailee’s authority to bind the bailor to contracts with third parties was ‘justified by the fact that the law of bailment will often resolve any issue between alleged principal and agent of necessity, as it has done here.’

Court: HL
Date: 01-Jan-1982
Judges: Diplock, Keith, Roskill and Brandon LL
References: [1982] AC 939,
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Filed under Agency, Contract, Transport

FHR European Ventures Llp and Others -v- Mankarious and Others; ChD 5-Sep-2011

The claimants sought return of what it said were secret commissions earned by the defendants when working as their agents, and the defendants countrclaimed saying that the commissions had been known to the claimants and that additional sums were due. The claimants had employed the defendants as their agents in the acquisition of an interest in a very substantial hotel. The defendants had aslo taken a commission of 10m euros from the sellers.

Court: ChD
Date: 05-Sep-2011
Judges: Simon J
Links: Bailii,
References: [2011] EWHC 2308 (Ch),
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Jabir -v- HA Jordan & Co; CA 16-Jun-2011

The parties disputed the appropriate method of valuing a pearl lost while in the custody of the defendant.

Court: CA
Date: 16-Jun-2011
Judges: Longmore, Munby LJJ, Sir Henry Brooke
Links: Bailii,
References: [2011] EWCA Civ 816,

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Filed under Agency, Contract

Hindmarsh & Another -v- Brigham & Cowan Ltd; 1943

An agent may not put himself in a position or enter into a transaction in which his personal interest, or his duty to another principal may conflict with his duty to his principal, unless his principal, with full knowledge of all the material circumstances and of the nature and extent of the agent’s interest, consents.

Date: 01-Jan-1943
Judges: Atkinson J
References: (1943) Ll L Rep 141,
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Rossetti Marketing Ltd -v- Diamond Sofa Company Ltd and Another; QBD 3-Oct-2011

The claimants sought compensation under the 1993 Rules. The defendants denied that the claimants were agents within the rules, since they also acted as agents for other furniture makers.
Held: Whether a party is a commercial agent within the meaning of the Directive or the Regulations is a straightforward matter, to be determined by reference to the terms and the context of the agreement at the date it is concluded. The Regulations envisaged two types of Agent, but ‘None of this means that the non-derogable obligations of the commercial agent under article 3.1 and regulation 3(1), to look after the interests of the principal, and to act dutifully and in good faith, are to be imported into the definition of a commercial agent so that an agent acting for multiple principals does not fall within it.’ The correspondence indicated an implied term allowing the claimants to conduct additional competing agencies. The agreement was subject to the 1993 Regulations.

Court: QBD
Date: 03-Oct-2011
Judges: Cranston J
Statutes: Commercial Agents Regulations 1993, Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents
Links: Bailii,
References: [2011] EWHC 2482 (QB),
Cases Cited:

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C -v- V; CoP 25-Nov-2008

The court heard an appeal objecting to the appointment of a sibling as Deputy for the parents now lacking capacity. Both daughters had at one time been appointed under Enduring Powers of Attorney, acting jointly, but the daughters became estranged. V who had charge of the bookkeeping came to want to register the power, but C objected. After conflicting expert reports, the Court considered that something needed to be done and appointed V deputy (on her application), rather than an independent person, using his powers under the 2005 Act.
Held: The appeal succeeded. The decision had failed to take proper account of the parents’ expressed wishes: ‘the learned judge was wrong to dismiss as non-existent the implications from the EPAs’ having been joint appointments of the two daughters and not joint and several appointments. The difference between those two regimes is clearly spelled out in the notes on the form itself, and it must be assumed was appreciated and intended by Mr and Mrs S. On that basis, it was an almost inescapable inference that they, as donors of the powers, wanted relevant decisions either to be joint, or to be made by neither appointee, and did not want their affairs to be dealt with by the sole decision of one appointee alone.’
Both experts had recommended an independent professional as deputy, and ‘the possible disadvantages of having an impersonal Deputy managing their affairs at a formal level rather than V have been sufficiently conveyed to Mr and Mrs S as to mean that even the later expressions of their preferences are not invalidated, and should not be downgraded in weight on that account.’ As occasion allowed in due course the parents should be consulted as to whether this was working.
Marshall QC described the situation under the new Act: ‘there has been a whole sea change in the attitude of the law to persons whose mental capacity is impaired’ and ‘Two major changes are therefore embodied in the statute. The first is official recognition that capacity is not a blunt ‘all or nothing’ condition, but is more complex, and is to be treated as being issue specific. A person may not have sufficient capacity to be able to make complex, refined or major decisions but may still have the capacity to make simpler or less momentous ones, or to hold genuine views as to what he wants to be the outcome of more complex decisions or situations.
The second change is the emphasis throughout the Act on the ascertainment of the actual or likely wishes, views and preferences of the person lacking full capacity, and on involving him in the decision making process. This approach underlies s.1(2) (presumption of capacity), s 1(3) (duty to help P to make his own decision if he can), 1(4) (recognition that a person’s capacity, and therefore right, to make decisions does not depend on how objectively ‘wise’ those decisions are), s1(6) (P’s rights and freedom of action should be restricted as little as practicable), and s 4(4) (duty on decision maker to involve P in decisions), and it is the only conceivable reason for imposing the duty to consider P’s wishes or likely wishes (s 4.(6)) and to take trouble to ascertain them s (4 (7)).’

Court: CoP
Date: 25-Nov-2008
Judges: Marshall QC J
Statutes: Mental Capacity Act 2005 1
Links: Bailii, Bailii,
References: [2008] EWHC B16 (COP), [2008] EWHC B16 (Fam), [2009] LS Law Medical 97, [2009] WTLR 315
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Filed under Agency, Health

Golden Ocean Group Ltd -v- Salgaocar Mining Industries Pvt Ltd and Another; ComC 21-Jan-2011

The defendants sought to set aside orders allowing the claimants to serve proceedings alleging repudiation of a charterparty in turn allowing a claim against the defendants under a guarantee. The defendant said the guarantee was unenforceable under the 1677 Act not being in writing and signed.
Held: There was no limit to the number of documents to which reference is made to establish the agreement. The guidance in Timmins was not strictly applicable in construing an agreement as such rather than a memorandum of agreement. There was an arguable case since the documents might be read together.
Where a document is executed by an agent which records the terms of the sale, it is not necessary, in order to satisfy the Statute, that the agent should have been authorised to execute the document as a record of the transaction; but it is necessary that the document, which is a record of the transaction, is one that he is authorised to execute by the person sought to be charged. The e-mails which constitute the contract were sufficiently signed by the electronically printed signature of the persons who sent them. It was argued the document itended to be signed by both parties had not been so signed, and ‘The question is whether the charterparty was drawn up with the authority of SMI and records the terms of the guarantee; not whether Howe Robinson was authorised to draw it up as a record of the guarantee, nor whether Howe Robinson was authorised to sign it as a contract. In fact, however, it was drawn up and signed on behalf of the Owners.’ The claimant had an arguable claim that valid contracts existed, that the charter had been repudiated, and that the agreement did not fall foul of the 1677 Act. The claim being governed by English law, the English court could exercise jurisdiction.

Court: ComC
Date: 21-Jan-2011
Judges: Christopher Clarke J
Statutes: Statute of Frauds 1677
Links: Bailii,
References: [2011] EWHC 56 (Comm), [2011] 2 All ER (Comm) 95, [2011] 1 CLC 125, [2011] CILL 3022, [2011] 1 WLR 2575
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Filed under Agency, Contract

Glentree Estates Ltd and Others -v- Favermead Ltd; ChD 20-May-2010

The claimant estate agents claimed commission on property sales. The defendant said that the agreement to pay commission had been waived.
Held: The sale triggered the commission. However the later agreement did work to vary the original agreement. The words ‘on the basis that one of you introduces an applicant who subsequently purchases the property’ placed on the agent an obligation to demonstrate that he had been the effective cause of the purchase in question in order to qualify for commission. The agents were unable to show that on the facts, and the claim failed.

Court: ChD
Date: 20-May-2010
Judges: Sir edward Evans-Lombe
Links: Bailii,
References: [2010] EWHC 1120 (Ch), [2010] 21 EG 91
Cases Cited:

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Filed under Agency, Contract

United Dominions Trust Ltd -v- Western; 1976

A party signing a document containing blanks must envisage that they will be completed, and he will be bound so long as the words inserted fell within the scope of what he could reasonably have expected.

Date: 01-Jan-1976
References: [1976] QB 513,
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Raiffeisen Zentralbank Osterreich A G -v- Crossseas Shipping Ltd & Others; CA 2000

The claimant creditor bank made changes to the guarantee executed by the guarantee without its approval and after it had been signed and duly executed, by inserting the details of a service agent.
Held: The insertion did not work to alter the guarantor’s liability, and had not been prejudicial to its legal rights and obligations and accordingly was not material. The guarantee remained enforceable. An alteration to the contract after signature did not invalidate it unless it was material in the sense of being ‘potentially prejudicial to the legal rights or obligations of the affected party’.

Court: CA
Date: 01-Jan-2000
References: [2000] 1 WLR 1135,
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Filed under Agency, Contract

Great Eastern Railway Company -v- Lords Trustee; HL 1909

The House was asked whether the appellant railway company had delivered the goods unconditionally to the goods owner so as to lose its lien for the price of coal carriage, or was there an agreement conferring “a right in equity to any personal chattels or to any charge or security thereon” under the 1878 Act.
Held: (Majority) It had not done so. The lien which it exercised, therefore, was based upon its actual possession as carrier of the goods, which was not destroyed by its contractual arrangements with the receiver or by delivery up of the goods. A lien is a mere personal right of detention and therefore requires actual possession.
The word “charge” does not in its ordinary and accepted legal sense embrace a legal possessory lien even, so it would seem, if the contract gives the right of sale.

Court: HL
Date: 01-Jan-1909
Statutes: Bills of Sale Act 1878
References: [1909] AC 109,
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Filed under Agency, Company, Contract

Robot Arenas Ltd and Another -v- Waterfield and Another; QBD 8-Feb-2010

The tenant company had defaulted under the lease, and the landlord had retaken possession. The landlord discarded the tenant’s possessions, and the tenant now sued, saying that the landlords as involuntary bailees owed duties to the proper owner.
Held: In the context of commercial goods, the purpose of which is to earn profit, the assessment of what the Claimant has lost and of the damages that would be reasonable as between the Claimant and the Defendant must take into account the commercial usefulness of the goods to the Claimant. If the reality is that what was destroyed was commercially useless to the Claimant, that cannot be ignored in the assessment of damages.
The defendants had not discharged the burden on them of proving abandonment. Liability was not strict, and it had to be shown that the defendants knew or ought to have known that the goods belonged to a third party. That could not be shown in this particular case, and the claim failed.

Court: QBD
Date: 08-Feb-2010
Judges: Edelman QC J
Statutes: Torts (Interference with Goods) Act 1977
Links: Bailii,
References: [2010] EWHC 115 (QB),
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Filed under Agency, Landlord and Tenant, Torts - Other

Charania -v- Harbour Estates Ltd; CA 27-Oct-2009

The defendant appealed against the award of the estate agent’s fees, acting under a sole agency agreement. The agreement had been terminated. A buyer who had seen the property first under the agency later returned and negotiated a purchase.
Held: It was not enough that the agents had introduced the purchaser to the property, they must introduce him to the purchase. However the judge had concluded that the purchaser had acted deliberately to await the loss of involvement of the agent before seeking a lower price to reflect the saving to the seller. That conclusion of fact was capable of support on the facts, and an appeal court should not intervene. The appeal failed.

Court: CA
Date: 27-Oct-2009
Judges: Leveson, Wilson, Ward LJJ
Statutes: Estate Agents (Provision of Information) Regulations 1991 (SI 1991/859) 5(1)(b), Estate Agents Act 1999 9
Links: Bailii,
References: [2009] EWCA Civ 1123,
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Filed under Agency, Contract

Grove And Another, Assignees of Liotard, A Bankrupt, -v- Dubois; 31-Jan-1786

A commission del credere is an absolute engagement to the principal from the broker, and makes him liable in the first instance. A broker with such a commission may set-off, under the general issue, a loss upon a policy happening before a bankruptcy, to an action by the assignees of the bankrupt, for premiums upon various policies under-written by him, and for which he had debited the broker : but such a loss carinot be proved under a riotice of set-off.

Date: 31-Jan-1786
Links: Commonlii,
References: [1786] EngR 42, (1786) 1 TR 112, (1786) 99 ER 1002

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Filed under Agency, Insurance

Moore Stephens (A Firm) -v- Stone Rolls Ltd (in liquidation); HL 30-Jul-2009

The appellants had audited the books of the respondent company, but had failed to identify substantial frauds by an employee of the respondent. The auditors appealed a finding of professional negligence, relying on the maxim ex turpi causa non oritur actio.
Held: (Mance and Scott LL dissenting) The appeal succeeded. The company could not bring a claim which was based upon its own unlawful actions. The Hampshire Land principle that knowledge of an agent would not be imputed to its principal where that knowledge related to the agents own breach of duty to the principal was a general principle of the law of agency and was not limited to claims. In the case of a one man company, the sole actor test could be applied to impute to the company the knowledge of its agent – in this case as to the fraud he was undertaking.
Lord Phillips summarised his conclusions: ‘1) Under the principle of ex turpi causa the court will not assist a claimant to recover compensation for the consequences of his own illegal conduct.
2) This appeal raises the question of whether, and if so how, that principle applies to a claim by a company against those whose breach of duty has caused or permitted the company to commit fraud that has resulted in detriment to the company.
3) The answer to this question is not to be found by the application of Hampshire Land or any similar principle of attribution. The essential issue is whether, in applying ex turpi causa in such circumstances, one should look behind the company at those whose interests the relevant duty is intended to protect.
4) While in principle it would be attractive to adopt such a course, there are difficulties in the way of doing so to which no clear resolution has been demonstrated.
5) On the extreme facts of this case it is not necessary to attempt to resolve those difficulties. Those for whose benefit the claim is brought fall outside the scope of any duty owed by Moore Stephens. The sole person for whose benefit such duty was owed, being Mr Stojevic who owned and ran the company, was responsible for the fraud.
6) In these circumstances ex turpi causa provides a defence to the claim.’

Court: HL
Date: 30-Jul-2009
Judges: Lord Phillips of Worth Matravers, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Brown of Eaton-under-Heywood, Lord Mance
Links: Bailii, Times,
References: [2009] UKHL 39, [2009] 1 AC 1391, [2009] Bus LR 1356, [2009] PNLR 36, [2009] 3 WLR 455
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Filed under Agency, Company, Professional Negligence

Sagal (T/A Bunz UK) -v- Atelier Bunz Gmbh; CA 3-Jul-2009

The court was asked whether the the appellant was a commercial agent of the defendant within the regulations, and so would be entitled to compensation on termination of the agency.
Longmore LJ said: ‘It does not follow that every agent acting on behalf of the principal is necessarily a ‘commercial agent . . ‘

Court: CA
Date: 03-Jul-2009
Judges: Longmore LJ, Laws L, Lloyd L
Statutes: Commercial Agents (Council Directive) Regulations 1993 2(1)
Links: Bailii,
References: [2009] EWCA Civ 700, [2009] CLC 1, [2009] 4 All ER 1253, [2010] 1 All ER (Comm) 104, [2009] ECC 30, [2009] 2 Lloyd's Rep 303, [2009] Bus LR 1527
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Filed under Agency, European

Office Of Fair Trading -v- Foxtons Ltd; CA 2-Apr-2009

The OFT had sought and obtained an injunction regarding the use of certain standard terms in their estate agency business. Both parties appealed.
Held: The OFT’s appeal succeeded. The court had been wrong to restrict the effect of the injuncion to contracts not already in existence. It should extend to existing contracts. The Regulations were intended to implement the Directive, and the court must have power to give it proper and full effect, though it was for the court seised of the matter to decide whether such an order was correct in the circumstances.

Court: CA
Date: 02-Apr-2009
Judges: Lord Justice Waller, Lady Justice Arden and Lord Justice Moore-Bick
Statutes: Unfair Terms in Consumer Contracts Regulations (SI 1999 No2083), Council Directive 93/13/EEC on Unfair Terms in Consumer Contracts (OJ April 21, 1993, L95/29)
Links: Bailii, Times,
References: [2009] EWCA Civ 288,
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Filed under Agency, Consumer, Contract, European

Clarke -v- Tipping; 18-Apr-1846

The Defendant had bribed the Plaintiff’s agent to make extracts of false entries from the books of the Plaintiff. The Plaintiff did not move for an injunction on the Defendant’s answer; but, on the cause coming on for hearing, it appeared that Clarke had filed another bill in the Rolls Court, and had obtained in that suit an inspection of those books; and therefore the bill was dismissed. But the principle that an agent could not be allowed to communicate the contents of his employer’s books to another person, and that that person could not publish the information so improperly obtained, was directly admitted by the Vice-Chancellor. A person guilty of bribery takes the knowledge he obtains with no better right to use it than the party communicating it; but here there is neither bribery nor fraud.

Date: 18-Apr-1846
Judges: Wigram VC
Links: Commonlii,
References: [1846] EngR 548, (1846) 9 Beav 284, (1846) 50 ER 352
Cases Cited:
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Filed under Agency, Intellectual Property

Lady Beresford -v- Driver; 31-Jul-1851

The defendant, the plaintiff’s ex-land agent was ordered to deliver up documents to former principal relating to her estate and its management

Date: 31-Jul-1851
Links: Commonlii,
References: [1851] EngR 754, (1851) 14 Beav 387, (1851) 51 ER 335
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Imageview Management Ltd -v- Jack; CA 13-Feb-2009

The appellant company acted for the respondent footballer in placing him with a football club. The respondent said that he had also taken a payment from the club, nominally for arranging a work permit. The respondent said this was improper. The agent now appealed.
Held: The side deal was within the agency and should have been disclosed.
Jacob LJ said: ‘The law imposes on agents high standards. Footballers’ agents are not exempt from these. An agent’s own personal interests come entirely second to the interest of his client. If you undertake to act for a man you must act 100%, body and soul, for him. You must act as if you were him. You must not allow your own interest to get in the way without telling him. An undisclosed but realistic possibility of a conflict of interest is a breach of your duty of good faith to your client.’ This was not an honest breach of contract. This was a secret profit and a breach of fiduciary duty because of the conflict of interest. Not only was the secret payment to be paid across, but no further agency fees were payable.

Court: CA
Date: 13-Feb-2009
Judges: Mummery LJ, Dyson LJ, Jacob LJ
Links: Bailii, Times, WLRD,
References: [2009] EWCA Civ 63, [2009] WLR (D) 56, [2009] 1 All ER (Comm) 921, [2009] 2 All ER 666, [2009] 1 BCLC 724, [2009] 1 Lloyd's Rep 436, [2009] Bus LR 1034
Cases Cited:

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Filed under Agency, Equity

Andrews -v- Ramsay; 1903

The plaintiff asked the defendant estate agents to find a purchaser for his property at a price of £2,500 and if one such was found the agents’ fee would be £50. A purchaser, one Clutterbuck, at £2,100 was found. He paid the agents £100 by way of deposit. The agents paid the principal £50 and, with the principal’s consent, retained £50 as their commission. But it then transpired that the agents had had a side deal with Clutterbuck whereby he paid them £20. In the first action the principal claimed and recovered the £20 as a secret profit made by the agent in breach his duty of good faith. In the second action the principal claimed the return of the £50.
Held: He succeeded – even though he had had the benefit of the agent’s services.
Lord Alverstone CJ said: ‘It is said that the defendants ought not to be called upon to hand over the £50 to the plaintiff because the plaintiff has had the benefit of their services. The principle of Salomons v. Pender (1865) 3 H&C 639 seems to me to govern the case, and it is, in my opinion, amply sufficient to do so. In that case it was held that an agent who was himself interested in a contract to purchase property of his principal was not entitled to any commission from the principal. The principle there laid down is that, when a person who purports to act as an agent is not in a position to say to his principal, ‘I have been acting as your agent, and I have done my duty by you,’ he is not entitled to recover any commission from that principal. . . It seems to me that this case is only an instance of an agent who has acted improperly being unable to recover his commission from his principal. It is impossible to say what the result might have been if the agent in this case had acted honestly. It is clear that the purchaser was willing to give £20 more than the price which the plaintiff received, and it may well be that he would have given more than that. It is impossible to gauge in any way what the plaintiff has lost by the improper conduct of the defendants. I think, therefore, that the interest of the agents here was adverse to that of the principal. A principal is entitled to have an honest agent, and it is only the honest agent who is entitled to any commission. In my opinion, if an agent directly or indirectly colludes with the other side, and so acts in opposition to the interest of his principal, he is not entitled to any commission. That is, I think, supported both by authority and on principle; but if, as is suggested, there is no authority directly bearing on the question, I think that the sooner such an authority is made the better.’
Wills J said: ‘The £50 in question was paid by the purchaser to the defendants as agents for the plaintiff as part of the £100 deposit on the purchase, and the defendants were allowed by the plaintiff to retain £50 in the belief that they had earned that sum as commission. If the money had all been paid over, and the defendants had had to sue the plaintiff for commission, it seems to me perfectly clear that they could not recover it. They would have no chance whatever of succeeding in such an action, and I think that they ought not to stand in any better position because the plaintiff, believing that they had acted properly, had allowed them to retain the £50. The case ought to be the same whether the commission has already been paid or whether the agent has to sue for it.’

Date: 01-Jan-1903
Judges: Lord Alverstone CJ, Wills J
References: [1903] 2 KB 635,
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Filed under Agency

Rhodes -v- Macalister; CA 1923

The plaintiff agent acted to find a seller of mineral rights for the defendant principal. He told his principal that the properties could be purchased for from £8,000 to £10,000. If the agent could find a seller at below £9,000, then, the defendant agreed, the plaintiff could have the difference between the actual price and £9,000. The agent found a seller at £6,625 and claimed the difference, viz. £2,375. But secretly the agent had also negotiated with the seller, at a time when they made the contract with the buyer, to be paid a commission on the sale. Lush J had found for the defendant.
Held: The agent’s claim failed. It made no difference to the agent’s position that no damage was caused to his principal, or that the principal may be advantaged by the agent’s breach of duty in accepting the secret commission.
Bankes LJ said: ‘There seems to be an idea prevalent that a person who is acting agent or servant of another is committing no wrong to his employer in taking a commission or bribe from the other side, provided that in his opinion his employer or principal does not have to pay more than if the bribe were not given. There cannot be a greater misconception of what the law is, or what the duty of a servant or agent towards his master or principal in reference to such maters is, and I do not think the rule can too often be repeated or its application more frequently insisted upon. . . what was [the agent's] position and what was his duty. Of course, as long as he was acting for the vendors of these properties only he was perfectly entitled to suggest to them that they should fix a price which would include a commission to himself, and he would be perfectly justified in receiving that commission or putting forward the price to an intending purchaser as the only price which he could persuade the vendors to give, so long as that was his real opinion. But the moment he accepted the position of agent for the intending purchasers his entire position in law changed. He could no longer consistently with his duty, unless he disclosed the facts, act as agent for the vendors to procure purchasers with the result of some commission or payment to himself. He could not retain that position consistently with his duty to the purchasers of obtaining these properties at as low a price as he possibly could. . . the moment he accepted the position of agent to procure these properties as cheap as possible for the intending purchasers his interest and duty conflicted, and he could no longer act honestly towards the intending purchasers without disclosing to them that in that figure of £8,000 to £10,000 which he had mentioned as the probable price of these properties he had included a figure which he intended should cover a commission to himself.’
Scrutton LJ said: ‘I agree with the judgment that has just been delivered and I only propose to re-state it in my own words because I think it is of very great importance that the principle upon which we are acting should be thoroughly understood, and from Mr Vachell’s argument it is not thoroughly understood by commercial men, especially in that part of the country from which his clients appear to come . . The law I take to be this: that an agent must not take remuneration from the other side without both disclosure to and consent from his principal. If he does take such remuneration he acts so adversely to this employer that he forfeits all remuneration from the employer, although the employer takes the benefit and has not suffered a loss by it. . . I hope it is thoroughly understood in London; and if it is not thoroughly understood in the Forest of Dean, then the sooner it is understood there the better for commercial honesty.’ and
‘But I decide it on the broad principle that whether it causes damage or not, when you are employed by one man for payment to negotiate with another man, to take payment from that other man without disclosing it to your employer is a dishonest act. It does not matter that the employer takes the benefit of his contract with the vendor; that has no effect whatever on the contract with the agent, and it does not matter that damage is not shown. The result may actually be that the employer makes money out of the fact that the agent has taken commission.
In this case, therefore, it appears that as one of the two joint agents has, in breach of his duty, taken commission from the other side, he forfeits, and they both forfeit, all right to remuneration from their employer. The more that principle is enforced the better for the honesty of commercial transactions. I have only repeated what my Lord has said because it cannot be repeated too often to commercial men – that in matters of agency they must act with strict honesty.’
Atkin LJ said: ‘This is a class of case where the Courts always have maintained, and do maintain, and I trust always will maintain, a very high standard of conduct on the part of agents. It is a standard of conduct which I am afraid sometimes conflicts with the standard of conduct adopted for themselves by commercial men – not by honourable men in commerce, but by a great many men engaged in mercantile transactions. I entirely agree with what has been said as to the importance of repeating and letting it be known as widely as possible what the standard of conduct expected of an agent is at law. . . Now that is not an impossible standard of attainment. It is laid down by the law and it is in respect of a practical matter. The remedy is a very simple one and it is well within the compass of any ordinary business man. The complete remedy is disclosure, and if an agent wishes to receive any kind of remuneration from the other side and wishes to test whether it is honest or not, he has simply to disclose the matter to his own employer and rest upon the consequences of that. If his employer consents to it, then he has performed everything that is required of an upright and responsible agent.’

Court: CA
Date: 01-Jan-1923
Judges: Bankes, Scrutton, Atkin LJJ
References: (1923) 29 Com Cas 19,
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Holland -v- Russell; 9-May-1863

Date: 09-May-1863
Links: Commonlii,
References: [1863] EngR 546, (1863) 4 B & S 14, (1863) 122 ER 365
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Holland -v- Russell; 13-Jun-1861

Insurance. Suppression of material fact. Principal and agent. Money had and received. A, as agent for a foreign owner, entered into a policy of insurance on a ship in the usual form. At the time of effecting the insurance, A was in possession of a letter from the captain, informing him that the ship had received injury, which fact he, without fraudulent intention to deceive, omitted to disclose to the underwriters. The ship waa lost, and B, one of the underwriters paid to A, his amount of the insurance ; but, having subsequently become acquainted with the above circumstance, brought an action for money had and received against him to recover it back. A., before he was aware of B.’s intention to dispute the policy, and acting bona fide throughout, transmitted to his principal the money he had received from the various underwriters; with the exception of a certain amount for which he had allowed the principal credit iri a settled account, and of another which, with the autbority of the principal, he had expended in a suit brought by him on behalf of the principal against C, another underwriter, on the policy :
Held: (In accordance with the decision in Russell v. Thornton, 4 H. & N. 788, affirmed on error, 6 Id. 140), that, in consequence of the concealment from the underwriters of the fact stated in the captain’s letter, the policy was voidable at the election of the underwriters. 2. That A. being only an agent, of which B. was aware, and having, without notice of B’s intention to repudiate the contract, paid over to his principal the amount received from the underwriters, B. was not entitled to recover back from A. his amount of the insurance. 3. That there was no difference in this respect between the money actually paid over by A. to his principal, and the moneys which had either been allowed in account between them or expended in the suit agaitist C, 4. Quaere, whether B. would have been entitled to recover, if he had not known that A. was acting merely as agent?

Date: 13-Jun-1861
Links: Commonlii,
References: [1861] EngR 728, (1861) 1 B & S 424, (1861) 121 ER 773
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Yearworth and others -v- North Bristol NHS Trust; CA 4-Feb-2009

The defendant hospital had custody of sperm samples given by the claimants in the course of fertility treatment. The samples were effectively destroyed when the fridge malfunctioned. Each claimant was undergoing chemotherapy which would prevent them providing future samples. They appealed a finding that they they had no losses, based on the suggestion that the 1990 Act so circumscribed the managememt of the samples as to deny any assertion of a proprietory interest in the samples. They claimed psychological injury and losses.
Held: The appeal was allowed. The hospital owed the claimants a duty of care. The concept of ownership is no more than a convenient global description of different collections of rights held by persons over physical and other things. The men owned the specimens. The Act itself required expicit consent from the donors for various acts, and this itself acknowledged rights. Doodward was framed as an exception to the common law rule, and was not a good basis for the modern law. The common law needed re-examination.
The court considered and set out the law of bailment as it might apply to the case. The defendants were bailees.

Court: CA
Date: 04-Feb-2009
Judges: Lord Judge CJ, Sir Anthony Clarke MR, Wilson LJ
Statutes: Human Fertilisation and Embryology Act 1990
Links: Bailii, Times, WLRD,
References: [2009] EWCA Civ 37, [2009] WLR (D) 34, (2009) 107 BMLR 47, [2009] LS Law Medical 126, [2009] 2 All ER 986, [2009] 3 WLR 118
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Filed under Agency, Damages, Health, Personal Injury

Crane (T/A Indigital Satelite Services) -v- Sky In-Home Ltd and Another; CA 3-Jul-2008

Arden LJ considered the principles to be applied when considering whether a party to civil litigation should be allowed to appeal a trial judge’s decision on the basis that a claim, which could have been brought before him but was not, would have succeeded if it had been so brought. She concluded: ‘CPR 52.8 provides that an appellant’s notice may not be amended without the permission of the court. When the court gives its permission, it must take into account the overriding objective in the CPR, which is to deal with cases justly. An application to amend a notice of appeal raises special considerations which do not apply to an application to amend a pleading prior to a trial. In the case of a pleading the court will (subject to any prejudice to the parties or to the administration of justice) readily give permission to amend so that the real dispute between the parties can be adjudicated upon. But on appeal the position is different. The simple fact is that there has already been a trial, and the significance of that is that the parties will have had an opportunity to put forward their cases, and incurred costs, and there will have been a decision. These points were powerfully put by May LJ in Jones v MBNA:
Civil trials are conducted on the basis that the court decides the factual and legal issues which the parties bring before the court. Normally each party should bring before the court the whole relevant case that he wishes to advance. He may choose to confine his claim or defence to some only of the theoretical ways in which the case might be put. If he does so, the court will decide the issues which are raised and normally will not decide issues which are not raised. Normally a party cannot raise in subsequent proceedings claims or issues which could and should have been raised in the first proceedings. Equally, a party cannot, in my judgment, normally seek to appeal a trial judge’s decision on the basis that a claim, which could have been brought before the trial judge, but was not, would have succeeded if it had been so brought. The justice of this as a general principle is, in my view, obvious. It is not merely a matter of efficiency, expediency and cost, but of substantial justice. Parties to litigation are entitled to know where they stand. The parties are entitled, and the court requires, to know what the issues are. Upon this depends a variety of decisions, including, by the parties, what evidence to call, how much effort and money it is appropriate to invest in the case, and generally how to conduct the case; and, by the court, what case management and administrative decisions and directions to make and give, and the substantive decisions in the case itself. Litigation should be resolved once and for all, and it is not, generally speaking, just if a party who successfully contested a case advanced on one basis should be expected to face on appeal, not a challenge to the original decision, but a new case advanced on a different basis. There may be exceptional cases in which the court would not apply the general principle which I have expressed. But in my view this is not such a case.’
The court must examine each application on its own facts in the light of the guidance to be found in the authorities. On that, the starting point is a passage from the speech of Lord Hershell in The Tasmania: ‘My Lords, I think that a point such as this, not taken at the trial, and presented for the first time in the Court of Appeal, ought to be most jealously scrutinised. The conduct of a cause at the trial is governed by, and the questions asked of the witnesses are directed to, the points then suggested. And it is obvious that no care is exercised in the elucidation of facts not material to them’.
It appears to me that under these circumstances a Court of Appeal ought only to decide in favour of an appellant on a ground there put forward for the first time, if it be satisfied beyond doubt, first, that it has before it all the facts bearing upon the new contention, as completely as would have been the case if the controversy had arisen at the trial; and next, that no satisfactory explanation could have been offered by those whose conduct is impugned if an opportunity for explanation had been afforded them when in the witness box.
Lord Hershell was there dealing with the situation where a party seeks to raise a new case by asserting that an accident happened in a different way from that which was suggested at trial. The passage stresses the importance of ensuring that the other party is not put at risk of prejudice. In his judgment in Jones v MBNA (a case under the CPR: see [27] of the judgment), Peter Gibson LJ helpfully elaborated the point, and expressed the view that it would be difficult to see how the court could ever, consistently with the overriding objective, allow a new point to be taken on appeal if further evidence might have been produced at trial on it or if the new point requires an evaluation by the appeal court of evidence which might be affected by seeing the witnesses.
38. It is not in dispute that to withdraw a concession or take a point not argued in the lower court requires the leave of this court. In general the court expects each party to advance his whole case at the trial. In the interests of fairness to the other party this court should be slow to allow new points, which were available to be taken at the trial but were not taken, to be advanced for the first time in this court. That consideration is the weightier if further evidence might have been adduced at the trial, had the point been taken then, or if the decision on the point requires an evaluation of all the evidence and could be affected by the impression which the trial judge receives from seeing and hearing the witnesses. Indeed it is hard to see how, if those circumstances obtained, this court, having regard to the overriding objective of dealing with cases justly, could allow that new point to be taken.
There is further useful guidance in this passage for the purposes of the present case. Peter Gibson LJ adopted the approach that, before allowing a new case to be raised on appeal, he had to be satisfied that, if the new case had been raised at trial, the other party would not have altered the way it conducted the case. Likewise, in this case, in my judgment the court has to be satisfied that SHS will not be at risk of prejudice if the new point is allowed because it might have adduced other evidence at trial, or otherwise conduct the case differently. It should consider for itself, as best it can, what factual issues are likely to be raised by the new case. Moreover, in circumstances such as the present, where there has been no disclosure relative to the new way in which the appellant seeks to put his case and virtually no opportunity to consider the matter, I do not consider that the court can reasonably expect the party against whom the amendment is sought to be made to be specific about the evidence he would have adduced had the point been raised earlier. If there is any area of doubt, the benefit of it must be given to the party against whom the amendment is sought. It is the party who should have raised the point at trial who should bare any risk of prejudice.
The circumstances in which a party may seek to raise a new point on appeal are no doubt many and various, and the court will no doubt have to consider each case individually. However, the principle that permission to raise a new point should not be given lightly is likely to apply in every case, save where there is a point of law which does not involve any further evidence and which involves little variation in the case which the party has already had to meet (see Pittalis v Grant [1989] QB 605).’

Court: CA
Date: 03-Jul-2008
Judges: Arden LJ, Dyson LJ
Statutes: Commercial Agents (Council Directive) Regulations 1993 (SI 1993 No. 3053)
Links: Bailii,
References: [2008] EWCA Civ 978,
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Filed under Agency, European

Sagal (T/A Bunz UK) -v- Atelier Bunz Gmbh; ComC 17-Apr-2008

The parties disputed whether the claimants were commercial agents within the regulations. The defendants said that this was a mere distributorship agreement.

Court: ComC
Date: 17-Apr-2008
Statutes: The Commercial Agents (Council Directive) Regulations 1993
Links: Bailii,
References: [2008] EWHC 789 (Comm),

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Filed under Agency, European

American Express International Banking Corporation -v- Hurley; ChD 1985

The property mortgaged was specialised sound and lighting equipment used at pop concerts. The mortgagee’s guarantor was dissatisfied with the way in which the receiver sold the equipment.
Held: Where a company receiver was appointed under a charge in common form, he acted as the agent of the the mortgagor until the mortgagor’s liquidation. Something more is required to constitute a relationship of principal and agent between the mortgagee and the receiver than the mere appointment under the terms of a debenture which in its normal form constitutes the receiver an agent for the mortgagor. While he was such, the mortgagee was not responsible for what the receiver did unless and until he directed or interfered with the receiver’s activities. Furthermore, the mortgagee, or receiver, had a duty of care to the guarantor of the mortgagor’s debt to obtain the true market value of the mortgaged property when either of them realised the property in the exercise of a power of sale. In the circumstances of this case the receiver had not taken reasonable care to obtain the true market value.
Mann J said: ‘In my judgment the receiver did not take reasonable care in all the circumstances of the case to obtain the true market value of the equipment. He had in his hands equipment which he knew had been valued at £193,323 and which he knew was of a specialist nature. In regard to the disposal of the equipment he did nothing. Although advised by Edward Symmons Ltd that he should look to the trade the receiver did not do so but was content that the trade should look to him. In my judgment the failure to take reasonable care is manifest in these forms: (i) a failure to take specialist advice from a person in the popular music industry; (ii) a failure to advertise in publications concerning the popular music industry. The receiver is liable in negligence to the guarantor.’

Court: ChD
Date: 01-Jan-1985
Judges: Mann J
References: [1985] 3 All ER 564, [1986] BCLC 52
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Filed under Agency, Banking, Contract, Insolvency

Foxtons Ltd -v- Pelkey Bicknell and Another; CA 23-Apr-2008

The defendant appealed against a finding that she was liable to pay her estate agent, appointed as sole agent, on the sale of her property. The eventual purchasers had visited but rejected the property. The agency was later terminated, and the buyers were re-introduced by a subsequent agent. The claimants claimed entitlement because the sale was to ‘a purchaser introduced by’ them.
Held: The appeal succeeded. Lord Neuberger of Abbotsbury said: ”A purchaser introduced by us’ meant a person who becomes a purchaser as a result of our introduction’. This was consistent with the intent of the 1991 Regulations, and the claimants interpretation would leave the sellers open to a claim at whatever future point the buyer was persuaded.
Lord Neuberger examined the case law and said: ‘More generally the judgments in those cases establish the following propositions. First, the term identified in Article 57 of Bowstead is ‘very readily’ implied, especially in a residential consumer context, unless the provisions of the particular contract or the facts of the particular case negative it . . Secondly, the main reason for implying the term is to minimise the risk of a seller having to pay two commissions . . Thirdly, it is not entirely clear whether the test is ‘an effective cause’ or ‘the effective cause’ . . Fourthly, whether an agent was the effective cause is a question whose resolution turns very much on the facts of the particular case . . Fifthly, while two commissions are to be avoided, there will be cases where the terms of the relevant contracts and the facts compel such a result . . Sixthly, where the term is implied, the burden is on the agent seeking the commission to establish that he was the effective cause.’

Court: CA
Date: 23-Apr-2008
Judges: Lord Neuberger of Abbotsbury
Statutes: Estate Agents (Provision of Information) Regulations 1991
Links: Bailii,
References: [2008] EWCA Civ 419, Times, 01-May-2008, [2008] All ER (D) 328 (Apr), [2008] 2 EGLR 23
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Morris -v- CW Martin Ltd; CA 1966

Diplock LJ said: ‘The legal relationship of bailor and bailee of a chattel can exist independently of any contract.’ Where goods are lost or damaged, the burden is on the bailee (or sub-bailee) to ‘show – that the loss or damage caused without any neglect or default or misconduct of himself or of any of the servants to whom he delegated his duty.’

Court: CA
Date: 01-Jan-1966
Judges: Diplock LJ, Lord Denning MR
References: [1966] 1 QB 716,
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Filed under Agency, Contract

Millar Son & Co -v- Radford; CA 1903

For an estate agent to recover his commission, it was ‘necessary’ to show that the agent’s introduction was an ‘efficient’ (namely effective) cause in bringing about the transaction.

Court: CA
Date: 01-Jan-1903
Judges: Sir Richard Henn Collins MR
References: (1903) 19 TLR 575,
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Filed under Agency, Contract

Peter Long and Partners v Burns; CA 1956

The estate agency agreement at issue said that commission was payable on the agents ‘introducing a person ready, willing and able to enter into a binding contract to purchase’. The purchaser entered into the contract, but then resiled after discovery of a misrepresentation. The contract was cancelled by agreement between the parties on payment of a sum of money by the purchaser. The estate agents claimed their commission but the vendor refused to pay. The agent failed in their action for breach of contract. That action failed.
Held: In this context, a ‘binding contract’ meant one which was legally enforceable by the vendor against the purchaser. Since the contract had been rendered unenforceable by the vendor as a result of the innocent misrepresentation of the estate agents, no commission was payable. The estate agents argued that the vendor could not take advantage of the misrepresentation made by them to the purchaser since she herself had given the relevant information to the estate agents. Singleton LJ did not agree. The making of such a representation to the purchaser without checking the information given by the vendor bordered on recklessness.
Romer, LJ, said: ‘I have no doubt that the contract which [the purchaser] did sign was not a binding contract within the terms of the commission note. I agree . . that ‘a binding contract’ in this context is the same as a legally binding contract, and that means a contract binding on the purchaser and legally enforceable against the purchaser by the vendor. The contract which [the purchaser] signed was never legally enforceable against her by [the vendor] because of the innocent misrepresentation which was made to her by [the estate agents' representative]. Moreover, the contract was voidable by [the purchaser], who could rescind it the moment that she discovered what the true facts were. Accordingly, it appears to me impossible to say that it was a binding contract within the meaning of that phrase as used in the commission note.
A voidable contract, when rescinded, is avoided ab initio.’
Morris LJ said: ‘The Plaintiffs further submit there was an estoppel. They plead as follows in paragraph 3 of the reply: ‘If it is found that the said contract was not binding on [the purchaser] [the estate agents] will further say that [the vendor] having innocently misled [the estate agents' representative] who upon [the vendor's] said instructions innocently misled [the purchaser], [the vendor] is estopped from setting up her own misrepresentation, resulting in the rescission of her contract with [the purchaser], to defeat [the estate agents'] claim for commission.’ But, in my judgment, this is not a case where the doctrine of estoppel can be relied upon. There was nothing to prevent [the purchaser] from proving that there had been an innocent misrepresentation and so from resiling from the contract. Upon proof that [the purchaser] did disaffirm the contract it was shown there had been no binding contract and so that commission had not been earned. There is no evidence, for no oral evidence was called, that had Mrs Pritchard known the true facts as to the road widening she might have purchased at a lower figure and so enabled [the estate agents] to earn some commission. There was no evidence to that effect.
What, then, is the legal basis of [the estate agents'] complaint? [The estate agents] may say that they wasted some time because they had some dealing with [the purchaser] which led to an abortive contract. But there is no claim against [the vendor] on that basis; nor do I see there could be. [The vendor] made no fraudulent misrepresentation to [the estate agents], and no sort of suggestion of that kind is or could be made. [The estate agents] do not suggest that [the vendor] gave any warranty to them of the truth of the representation which she made.’

Court: CA
Date: 01-Jan-1956
Judges: Romer LJ, Singleton LJ, Morris LJ
References: [1956] 1 WLR 1083,
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Equitas Ltd and Another -v- Horace Holman & Company Ltd; ComC 27-Apr-2007

A principal or employer is entitled to delivery up of original documents (or other property) retained or removed by an agent or employee and relating to transactions done as agent.

Court: ComC
Date: 27-Apr-2007
Judges: Andrew Smith J
Links: Bailii,
References: [2007] EWHC 903 (Comm),
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Filed under Agency, Costs

Bartram & Sons -v- Lloyd; 1904

A secret commission had been agreed and paid to the agent. The court was asked whether the principal had elected to affirm the contract with the other party at a later meeting when he was given some information about what had happened.
Held: He had not. The principal had still not made his election with full knowledge of the material facts. There had been an inadequate initial disclosure.

Date: 01-Jan-1904
References: [1904] 90 LTR 357,
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Post Office Ltd -v- Castleton; QBD 22-Jan-2007

The defendant ran a post office. A cash shortage was found, and he challenged the calculation of the account.
Held: The defendant was liable for the deficit in law. He had shown no sufficient reason to make the court think the calculations were wrong, and the defence failed.

Court: QBD
Date: 22-Jan-2007
Judges: Richard Havery QC
Links: Bailii,
References: [2007] EWHC 5 (QB),
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Lyell -v- Kennedy; HL 1889

The true owner may recover money which was rightfully his from a person to whom the money in question had been wrongly paid by the collector of the money. A fiduciary is one who has undertaken, whether on request or without request, of his own motion to act on behalf of another in circumstances in which equity will not allow him

Court: HL
Date: 01-Jan-1889
References: (1889) 14 App Cas 437,
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Mahesan -v- Malaysia Government Officers Co-operative Housing Society; PC 1978

The appellant, the director and employee of a housing society was bribed by a real estate agent, one Manickam, and the appellant then caused the society to buy land at an overvalue. The agent was sued for money had and received (for the amount of the bribe paid in breach of the agent’s fiduciary duty) as well as in tort (for the loss suffered by the society for the overvalued land because of the agent’s fraud).
Held: The profit made by an intermediate purchaser, due to the fraud of the agent, was awarded as compensation on the basis that the principal had lost the opportunity to purchase at the lower price. Bribery and corruption are torts. A defrauded principal has alternative remedies against both the briber and the agent for money had and received where he can recover the amount of the bribe, or for damages for fraud where he can recover the amount of any actual loss sustained by entering into the transaction in respect of which the bribe was given. The plaintiffs need not elect between these alternatives before the time has come for judgment to be entered in their favour in one or other of those causes of action.

Court: PC
Date: 01-Jan-1978
References: [1979] AC 374, [1978] 2 All ER 405
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Filed under Agency, Damages, Torts - Other

Stanley Yeung Kai Yung and another -v- Hong Kong and Shanghai Banking Corporation; PC 1980

The shareholder had had his share certificates stolen. The thief lodged forged transfers with stockbrokers, who in good faith sent the share certificates and transfer deeds to the bank for registration and transfer, which was done. The transferee thus came to be registered and he then sold the shares. The innocent shareholder asked for his name to be restored to the register and for related relief. The bank brought third party proceedings against the stockbrokers. The original shareholder succeeded against the bank. As between the bank and the stockbrokers, at first instance and in the Hong Kong Court of Appeal the Judges relied on the Barclay implied indemnity and found the stockbrokers liable to indemnify the bank. The stockbrokers appealed to the Privy Council.
Held: The decision in Barclay was upheld.
Lord Scarman dealt with an argument advanced by the stockbrokers that it was truly the transferee rather than the stockbrokers who had requested the bank to act upon the transfer deeds and to issue new certificates and hence, as it was sought to argue, that, rather than the stockbrokers, it was only the transferee who was responsible for indemnifying the bank. As to that argument he said: ‘It is not the case that, if a principal is liable, his agent cannot be. The true principle of the law is that a person is liable for his engagements (as for his torts) even though he is acting for another, unless he can show that by the law of agency he is to be held to have expressly or impliedly negatived his personal liability. But, upon the view of the letters, which the Courts below accepted and this Board believes to be correct, the brokers cannot avoid personal responsibility for whatever consequences the law attaches to the making of the request and the bank’s compliance with it. It was their request – even though made on Mr Wong’s [the transferee's] behalf.’
As to an indemnity, after quoting Dugdale v Lovering: ‘This ‘broad principle’, as Lord Davey called it, has been consistently followed, and Mr Leggatt for the brokers disclaimed any intention to invite their Lordships’ Board to review it. Their Lordships are satisfied that it is now firmly embedded in the law: see Bank of England -v- Cutler [1908] 2 KB 208; Secretary of State for India -v- Bank of India Ltd [1938] 65 Ind. App. 286 and Welch -v- Bank of England [1955] Ch 508 (per Harman J at pp. 548-549). ‘ and ‘For these reasons their Lordships find themselves in agreement with the Court of Appeal in holding that there was in the circumstances of this request a promise by the stockbroker to indemnify the bank if, by acting on the request, it caused actionable injury or damage to a third party. The promise was accepted by the bank acting on the request and became a contractual indemnity.’

Court: PC
Date: 01-Jan-1980
Judges: Lord Scarman
References: [1981] AC 787, [1980] 2 All ER 599
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Filed under Agency, Commonwealth, Torts - Other

ABTA Ltd -v- British Airways Plc; ComC 26-Nov-1999

IATA Airlines standard agency agreement – implied terms – whether travel agents can be lawfully instructed to give the public misleading documentation describing the passenger service charge at UK airports as a tax-whether the passenger service charge is included in fares applicable to air passenger transportation for the purposes of commission.

Court: ComC
Date: 26-Nov-1999
Judges: Timothy Walker J
References: Unreported, 26 November 1999
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Foxtons Ltd -v- Thesleff and Another; CA 19-Apr-2005

Estate Agents claimed their commission. They had originally acted as sole agents, but agreed to allow a multiple agency. Contracts were exchanged, but the vendor refused to complete. The vendor claimed that the variation left the agent’s contract ineffective, and that since at common law an estate agent becomes payable only on completion, no commission was due.
Held: The agent’s appeal succeeded. The contract clearly provided for this situation. The common law provision was overriden by terms in the contract that the commission was payable on exchange of contracts. The word ‘purchaser’ in the Regulations is not limited to a person to whom a fee simple absolute in possession is actually transferred, but also, as is natural in common parlance, to a person who contracts unconditionally to purchase the fee simple.

Court: CA
Date: 19-Apr-2005
Judges: May LJ, Rix LJ, Jacob LJ
Statutes: The Estate Agents (Provision of Information) Regulations 1991
Links: Bailii,
References: [2005] EWCA Civ 514, Times, 17-May-2005, [2005] 2 EGLR 29
Cases Cited:

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Filed under Agency, Contract

Great Atlantic Insurance Co -v- Home Insurance Co; 1981

Lloyd J said: ‘if the principal has held out his agent as having a certain authority, it hardly lies in his mouth to blame the agent for acting in breach of a secret limitation placed on that authority’.

Date: 01-Jan-1981
Judges: Lloyd J
References: [1981] 2 Ll R 219,
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Sorrell -v- Finch; HL 1976

A purchaser had paid a deposit to the estate agent, but sought its return before contracts had been exchanged.
Held: In the absence of any express extension of authority to a estate agent or auctioneer to receive a pre-contract deposit, the potential purchaser is, at all times until the contract is entered into, the only person with any claim or right to the deposit. If the agent chooses to forward such deposit, then he must bear the loss. The vendor at that stage has no liability to repay the deposit. After completion, the agent holds any deposit for the vendor subject only to his right to deduct his commission and expenses. In a dispute between the vendor and purchaser, the agent should interplead.

Court: HL
Date: 01-Jan-1976
References: [1976] 2 All ER 371, [1977] AC 728, [1976] 2 WLR 833, 120 Sol Jo 353

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Blackburn, Low & Co -v- Vigors; HL 1887

There was a condition precedent of full disclosure of material facts in an insurance contract. The duty of an agent to disclose circumstances within his own knowledge to the insurer is independent of the duty of the insured to make disclosure, but: ‘it would, in my opinion, be a dangerous extension of the doctrine of constructive notice to hold that persons who are themselves absolutely innocent of any concealment or misrepresentation, and who have not wilfully shut their eyes or closed their ears to any means of information, are to be affected with the knowledge of matters which other persons may be morally though not legally bound to communicate to them.’

Court: HL
Date: 01-Jan-1887
Judges: Lord Macnaghten, Lord Watson, Lord Fitzgerald
References: (1887) 12 App Cas 531,
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Boston Deep Sea Fishing & Ice Co -v- Ansell; CA 1888

An employer having dismissed an employee (its managing director) later learnt of the employee’s fraud.
Held: The employer was allowed to rely upon that fraud to justify the dismissal. Where an agent is in wrongful repudiation of his contract with his principal, he loses his right to claim remuneration from his principal. It is sufficient if there was a fundamental breach of contract justifying a dismissal whether or not the employer knew of it at the time of dismissal. The managing director could not recover his salary for the part of the year which he had completed before his dismissal. His right to his salary was conditional on his fulfilling his duties for the year and that condition had not been fulfilled. The contract was indivisible, and no payment under it could be claimed.
Cotton LJ said: ‘Then when he was engaged in that contract, in respect of the matters of that very contract, he in one instance got a percentage of 1 per cent. from the Shipbuilding Company, and, in the other case, he insisted on getting – that is the evidence – and did get, a lump sum of £50. It is suggested that we should be laying down new rules of morality and equity if we were to so hold. In my opinion if people have got an idea that such transactions can be properly entered into by an agent, the sooner they are disabused of that idea the better. If a servant, or a managing director, or any person who is authorized to act, and is acting, for another in the matter of any contract, receives, as regards the contract, any sum, whether by way of percentage or otherwise, from the person with whom he is dealing on behalf of his principal, he is committing a breach of duty. It is not an honest act, and, in my opinion, it is a sufficient act to shew that he cannot be trusted to perform the duties which he has undertaken as servant or agent. He puts himself in such a position that he has a temptation not faithfully to perform his duty to his employer. He has a temptation, especially where he is getting a percentage on expenditure, not to cut down the expenditure, but to let it be increased, so that his percentage may be larger. I do not, however, rely on that, but what I say is this, that where an agent entering into a contract on behalf of his principal, and without the knowledge or assent of that principal, receives money from the person with whom he is dealing, he is doing a wrongful act, he is misconducting himself as regards his agency, and, in my opinion, that gives to his employer, whether a company or an individual, and whether the agent be a servant, or a managing director, power and authority to dismiss him from his employment as a person who by that act is shewn to be incompetent of faithfully discharging his duty to his principal.’
Bowen LJ said: ‘This is an age, I may say, when a large portion of the commercial world makes its livelihood by earning, and by earning honestly, agency commission on sales or other transactions, but it is also a time when a large portion of those who move within the ambit of the commercial world, earn, I am afraid, commission dishonestly by taking commissions not merely from their masters, but from the other parties with whom their master is negotiating, and with whom they are dealing on behalf of their master, and taking such commissions without the knowledge of their master or principal. There never, therefore, was a time in the history of our law when it was more essential that Courts of Justice should draw with precision and firmness the line of demarcation which prevails between commissions which may be honestly received and kept, and commissions taken behind the master’s back, and in fraud of the master. . . Now, there can be no question that an agent employed by a principal or master to do business with another, who, unknown to that principal or master, takes from that other person a profit arising out of the business which he is employed to transact, is doing a wrongful act inconsistent with his duty towards his master, and the continuance of confidence between them. He does the wrongful act whether such profit be given to him in return for services which he actually performs for the third party, or whether it be given to him for his supposed influence, or whether it be given to him on any other ground at all; if it is a profit which arises out of the transaction, it belongs to his master, and the agent or servant has no right to take it, or keep it, or bargain for it, or to receive it without bargain, unless his master knows it.
Fry LJ said: ‘In my judgment, the conduct of Ansell in so dealing was a fraud-a fraud on his principals-a fraud, not according to any artificial or technical rules, but according to the simple dictates of conscience, and according to the broad principles of morality and law, and I think it is the duty of the Courts to uphold those broad principles in all cases of this description.
We were invited to consider the state of mind of Mr. Ansell; whether he thought it wrong; in other words we are invited to take as the standard for our decision the alleged conscience of a fraudulent servant. I decline to accept any such rule as one on which the Court is to decide such questions.’

Court: CA
Date: 01-Jan-1888
Judges: Bowen LJ, Cotton LJ, Fry LJ
References: (1888) 39 ChD 339,
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Filed under Agency, Employment

JC Houghton & Co -v- Northard, Lowe & Wills; HL 1928

The law does not make the unreal assumption that agents will reveal to their principals the fraud which they are comitting on them.

Court: HL
Date: 01-Jan-1928
References: [1928] AC 1,
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Filed under Agency

Morris -v- C W Martin & Sons Ltd; CA 1965

The plaintiff took her mink stole to the defendants for cleaning. An employee received and stole the fur. The judge had held that the defendants were not liable because the theft was not committed in the course of employment.
Held: The defendants were liable. Bailment includes as an element an assumption of responsibility by the bailee to keep the goods safe, that is to say to take reasonable care of the goods. In a bailment for reward the duty was non-delegable.
The employee had converted the fur in the course of his employment. Though the authorities were not straightforward, he had not commiteed the act while ‘on a frolic of his own’.
Diplock LJ said: ‘If the principle laid down in Lloyd v Grace, Smith & Co [1912] AC 716 is applied to the facts of the present case, the defendants cannot in my view escape liability for the conversion of the plaintiff’s fur by their servant Morrissey. They accepted the fur as bailees for reward in order to clean it. They put Morrissey as their agent in their place to clean the fur and to take charge of it while doing so. The manner in which he conducted himself in doing that work was to convert it. What he was doing, albeit dishonestly, he was doing in the scope or course of his employment in the technical sense of that infelicitous but time-honoured phrase. The defendants as his masters are responsible for his tortious act.’ and
‘ If the bailee in the present case had been a natural person and had converted the plaintiff’s fur by stealing it himself, no one would have argued that he was not liable to her for its loss. But the defendant bailees are a corporate person. They could not perform their duties to the plaintiffs to take reasonable care of the fur and not to convert it otherwise than vicariously by natural persons acting as their servants or agents. It was one of their servants to whom they had entrusted the care and custody of the fur for the purpose of doing work upon it who converted it by stealing it. Why should they not be vicariously liable for this breach of their duty by the vicar whom they had chosen to perform it? . . ‘ and
‘ . . Nor are we concerned with what would have been the liability of the defendants if the fur had been stolen by another servant of theirs who was not employed by them to clean the fur or to have the care and custody of it. The mere fact that his employment by the defendants gave him the opportunity to steal it would not suffice . . .. I base my decision in this case on the ground that the fur was stolen by the very servant whom the defendants as bailees for reward had employed to take care of it and clean it.’
Salmon LJ said: ‘the defendants are liable for what amounted to negligence and conversion by their servant in the course of his employment’. He emphasised the importance of the thief being the servant through whom the defendants had chosen to discharge their duty to take reasonable care of the fur.’ A bailee for reward is not answerable for a theft by any of his servants but only for a theft by such of them as are deputed by him to discharge some part of his duty of taking reasonable care . . ..So in this case, if someone employed by the defendants in another depot had broken in and stolen the fur, the defendants would not have been liable. Similarly . . if a clerk employed in the same depot had seized the opportunity of entering the room where the fur was kept and had stolen it, the defendants would not have been liable . . .’

Court: CA
Date: 01-Jan-1965
Judges: Diplock LJ, Salmon LJ, Lord Denning MR
References: [1966] 1 QB 716, [1965] 3 WLR 276, [1965] 2 Lloyds Rep 63, [1965] 2 All ER 725
Cases Cited:
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Filed under Agency, Negligence, Vicarious Liability

Gilchrist Watt and Sanderson Pty Ltd -v- York Products Pty Ltd; PC 1970

(New South Wales – Australia) The defendants were stevedores who had lost two cases of clocks that they had received as sub-bailees of the shipowners, who in turn owed a duty to deliver them to the plaintiffs under the bills of lading.
Held: The defendants were liable. They: ‘took upon themselves an obligation to the plaintiffs to exercise due care for the safety of the goods, although there was no contractual relation or attornment between the defendants and the plaintiffs.’ A sub-bailee had only voluntarily taken into his possession the goods of another if he has sufficient notice that a person other than the bailee is interested in the goods so that it can properly be said that in addition to his duties to the bailee he has, by taking the goods into his custody, assumed towards that other person the responsibility for the goods which is characteristic of a bailee.

Court: PC
Date: 01-Jan-1970
Judges: Lord Pearson
References: [1970] 1 WLR 1262,
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Filed under Agency, Commonwealth

Anglo Group Plc, Winther Brown & Co Ltd -v- Winter Brown & Co Ltd, BML (Office Computers) Ltd, Anglo Group Plc, BML (Office Computers) Ltd; TCC 8-Mar-2000

cs Contract – Contract for provision of computer services – purchaser contract with finance company – duty of co-operation to be implied in computer contracts – practice – responsibilities of expert witnesses generally – whether computer company liable to purchaser – whether purchaser liable to finance company.
The parties disputed the delivery and quality of a computer system. The buyer complained of many defects and eventually sought to reject the system.
Held: Anglo’s claim succeeded. The court provided updated Ikarian Reefer guidelines for expert witnesses. The court criticised one expert witness for failing to keep separate his role as negotiator and witness. It is normally inappropriate to seek to combine the two.
The court gave Ikarian Reefer guidelines updated to comply with the CPR:
‘1.An expert witness should at all stages in the procedure, on the basis of the evidence as he understands it, provide independent assistance to the court and the parties by way of objective unbiased opinion in relation to matters within his expertise. This applies as much to the initial meetings of experts as to evidence at trial. An expert witness should never assume the role of an advocate.
2. The expert’s evidence should normally be confined to technical matters on which the court will be assisted by receiving an explanation, or to evidence of common professional practice. The expert witness should not give evidence or opinions as to what the expert himself would have done in similar circumstances or otherwise seek to usurp the role of the judge.
3.He should co-operate with the expert of the other party or parties in attempting to narrow the technical issues in dispute at the earliest possible stage of the procedure and to eliminate or place in context any peripheral issues. He should co-operate with the other expert(s) in attending without prejudice meetings as necessary and in seeking to find areas of agreement and to define precisely arrears of disagreement to be set out in the joint statement of experts ordered by the court.
4.The expert evidence presented to the court should be, and be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of the litigation.
5.An expert witness should state the facts or assumptions upon which his opinion is based. He should not omit to consider material facts which could detract from his concluded opinion.
6.An expert witness should make it clear when a particular question or issue falls outside his expertise.
7.Where an expert is of the opinion that his conclusions are based on inadequate factual information he should say so explicitly.
8.An expert should be ready to reconsider his opinion, and if appropriate, to change his mind when he has received new information or has considered the opinion of the other expert . He should do so at the earliest opportunity.’

Court: TCC
Date: 08-Mar-2000
Judges: Toulmin QC J
Statutes: Supply of Goods and Services Act 1982 9
Links: Bailii,
References: [2000] EWHC Technology 127,
Cases Cited:

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Filed under Agency, Contract, Litigation Practice

Vale -v- Armstrong, Armstrong; ChD 21-May-2004

The claimant sought to set aside a transfer of his house to the defendants made at an undervalue and under an enduring power of attorney, who had charged it to raise money for their business. He had received independent advice.
Held: The transaction was disadvantageous to the claimant and there was therefore a presumption of undue influence. However there was also evidence of independent advice etc to rebut that presumption, but ‘it by no means follows that prior legal advice rebuts the presumption.’
The independent advice had failed to bring home the true disadvantages of the transaction to the claimant. The defendant failed to rebut the presumption, and it was set aside.

Court: ChD
Date: 21-May-2004
Judges: Mr. Justice Evans-Lombe
Links: Bailii,
References: [2004] EWHC 1160 (Ch),
Cases Cited:

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Filed under Agency, Land, Undue Influence

Hovenden and Sons -v- Millhoff; 1900

“The courts of law in this country have always strongly condemned and, when they could, punished the bribing of agents, and have taken a strong view as to what constitutes a bribe. I believe the mercantile community as a whole appreciate and approve of the court’s views on the subject. But some persons undoubtedly hold laxer views. Not that these persons like the ugly word “bribe” or would excuse the giving of a bribe if that word be used, but they differ from the courts in their view as to what constitutes a bribe. It may, therefore, be well to point out what is a bribe in the eyes of the law. Without attempting an exhaustive definition I may say that the following is one statement of what constitutes a bribe. If a gift be made to a confidential agent with a view of inducing the agent to act in favour of the donor in relation to transactions between the donor and the agent’s principal and that gift is secret as between the donor and the agent – that is to say , without the knowledge and consent of the principal – then the gift is a bribe in the view of the law. If a bribe be once established to the court’s satisfaction then certain rules apply. Amongst them the following are now established, and, in my opinion, rightly established in the interests of morality with the view of discouraging the practice of bribery. First, the court will not enquire into the donor’s motive in giving the bribe, nor allow evidence to be gone into as to the motive. Secondly, the court will presume in favour of the principal and as against the briber and the agent bribed, that the agent was influenced by the bribe; and this presumption is irrebuttable. Thirdly, if the agent be a confidential buyer of goods for his principal from the briber, the court will assume as against the briber that the true price of the goods as between him and the purchaser must be taken to be less than the price paid to, or charged by the vendor by, at any rate, the amount or value of the bribe. If the purchaser alleges loss or damage beyond this, he must prove it “.

Date: 01-Jan-1900
Judges: Romer LJ
References: [1900] 83 LT 41,
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Filed under Agency, Torts - Other

Smelter Corporation -v- ODriscoll; 1977

(Ireland) In an action for misreprsentation, it did not matter that the representation was made by an agent who did not know that the representation was untrue.

Date: 01-Jan-1977
References: [1977] IR 307,
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Filed under Agency, International, Torts - Other

Chaudry -v- Prabhakar; CA 1988

the plaintiff sued a friend of hers for wrongly advising her that a car she was thinking of buying was in good condition.
Held: An agent, even a volunteer, owed a duty of care appropriate for those circumstances. The measurement was objective, not subjective. The defendant knew he was to be relied upon, and the circumstances (a crumpled bonnet) suggested that further enquiry was required. The relationship may be material. If they are friends, the court may find that the arrangement was purely social, and according to the circumstances, did not give rise to a duty of care.
Stuart Smith LJ said: “When considering the question of whether a duty of care arises, the relationship between the parties is material. If they are friends, the true view may be that the advice or representation is made on a purely social occasion and the circumstances show that there has not been a voluntary assumption of responsibility.”
Stocker LJ said: “in my view, in the absence of other factors giving rise to such a duty, the giving of advice sought in the context of family, domestic or social relationships will not in itself give rise to any duty in respect of such advice.”
May LJ said: “I for my part respectfully doubt whether counsel’s concession in the instant case was rightly made in law. I do not find the conclusion that one must impose on a family friend looking out for a first car for a girl of 26 a Donoghue v Stevenson duty of care in and about his quest, enforceable with all the formalities of the law of tort, entirely attractive.”

Court: CA
Date: 01-Jan-1988
Judges: Stuart Smith, Stocker, May LJJ
References: [1989] 1 WLR 29, [1988] 3 All ER 718
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Filed under Agency, Negligence

Freeman & Lockyer -v- Buckhurst Park Properties; CA 1964

The defendant company allowed one of its directors to act as the Managing Director and to give instructions to the Plaintiff to do work on its behalf.
Held: The fact that he had never been formally appointed as Managing Director was of no consequence. The other directors knew the facts, the Company had effectively held out that individual as having the powers of the Managing Director, and the fact that he may have gone outside his actual authority did not affect the fact that he had apparent (or ostensible) authority to do what he did, and the Company was bound.
Diplock LJ stated: ‘An ‘apparent’ or ‘ostensible’ authority . . is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the ‘apparent’ authority, so as to render the principal liable to perform any obligations imposed upon him by such contract . . The representation which creates ‘apparent’ authority may take a variety of forms of which the commonest is representation by conduct,, that is by permitting the agent to act in some way in the conduct of the principal’s business with other persons. By so doing the principal represents to anyone who becomes aware that the agent is so acting that the agent has authority to enter on behalf of the principal into contracts with other persons of the kind which an agent so acting in the conduct of his principal business has usually ‘actual’ authority to enter into.’

Court: CA
Date: 01-Jan-1964
Judges: Diplock LJ
References: [1964] 2 QB 480,
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Filed under Agency, Company

Branwhite -v- Worcester Works Finance Ltd; HL 1969

A dealer may for some ad hoc purpose be the agent of a finance company. In relation to a purchase of a motor vehicle through a motor dealer, where the prospective purchaser completes an application for hire purchase in the office of the motor dealer, he forwards it to the finance company for approval, and if approved, the dealer delivers the motor vehicle to the customer. The finance company provides the purchase price to the motor dealer and the customer pays periodic payments to the finance company. The dealer is not acting as an agent of the finance company, merely arranging a finance application to be made by a prospective customer. If the dealer forwarded the finance application to a finance broker, the broker would be acting on behalf of the prospective customer.
Lord Wilberforce said that while in all hire purchase cases much must depend on the individual facts “such questions as arise of the vicarious responsibility of finance companies for the acts or defaults of dealers cannot be resolved without reference to the general mercantile structure within which they arise, or if one prefers the expression, to commercial reality.”
After citing Lord Pearson in Garnac, he went on: “The significant words for the present purpose are ‘if they have agreed to what amounts in law to such a relationship’These I understand as pointing to the fact that while agency must derive from consent, the consent need not necessarily be to the relationship of principal and agency itself (indeed the existence of it may be denied) but may be to a state of facts on which the law imposes the consequences which results from Agency. It is consensual not contractual. So interpreted this formulation allows the establishment of an agency relationship in such cases as the present.”
Lord Upjohn (with whom Lord Guest Agreed) considered that the acts of holding stock of Worcester’s formes of hire purchase agreement, filling them in with particulars including Worcester’s charges, having a prospective hirer sign the documents, and forwarding the forms to Worcester, showed that Raven was assisting the proposed hirer but did not establish that it had actual or apparent authority from the financier.

Court: HL
Date: 01-Jan-1969
Judges: Lord Morris of Borth-y-Gest, Lord Wilberforce, Lord Reid, Lord Upjohn
Statutes: Hire Purchase Act 1965
References: [1969] 1 AC 552,
Cases Cited:
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Filed under Agency, Contract

Mercantile Credit Co Ltd -v- Hamblin; CA 1964

Pearson LJ said: ‘There is no rule of law that in a hire purchase transaction the dealer never is, or always is, acting as agent for the finance company or as agent for the customer.Nevertheless, the dealer is to some extent an intermediary between the customer and the finance company, and he may well have in a particular case some ad hoc agencies to do particular things on behalf of one or the other or, it may be, both of those two parties.’ and ‘In a typical hire purchase transaction the dealer is a party in his own right, selling his car to the finance company, and he is acting primarily on his own behalf and not as general agent for either of the other two parties. There is no need to attribute to him an agency in order to account for his participation in the transaction. Nevertheless the dealer is to some extent an intermediary between the customer and the finance company, and he may well have in a particular case some ad-hoc agencies to do particular things on behalf of one or other or it may be both of those two parties.’
An advocate should draw the attention of the court to the fact that an act relied on by a party is unlawful, if that is the case.

Court: CA
Date: 01-Jan-1964
Judges: Pearson LJ
References: [1965] 2 QB 242, [1964] 1 WLR 423
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Filed under Agency, Contract

Townsends Carriers Ltd -v- Pfizer Ltd; 1977

A break notice had been served not by the tenant company but by an associated company, the service not being on the landlord company but an associated company.
Held: Because the tenant and the landlord had allowed their respective associated companies to deal with the property as if they were landlord and tenant respectively in respect of matters such as an increase in the rent and variations of the lease, the break notice had been validly served.

Date: 01-Jan-1977
Judges: Sir Robert Megarry VC
References: [1977] 33 P&CR 361,
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Filed under Agency, Landlord and Tenant

Les Affreteurs Reunis SA -v- Leopold Walford (London) Ltd; HL 1919

With regard to Robertson -v- Wait: ‘My Lords, so far as I am aware, that case has not before engaged the attention of this House, and I think it right to say plainly that I agree with that decision and I agree with the reasoning, shortly as it is expressed, upon which the decision was founded. In this connection I would refer to the well-known case of In re Empress Engineering Company. In the judgment of Sir George Jessel MR the principle is examined which, in my view, underlies and is the explanation of the decision in Robertson v. Wait. The Master of the Rolls uses this language:

Court: HL
Date: 01-Jan-1919
Judges: Lord Birkenhead LC, Viscount Finlay and Lords Atkinson Wrenbury
References: [1919] AC 801,
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Filed under Agency, Contract, Transport

Gomba Holdings -v- Homan; 1986

A receiver’s powers of management are really ancillary to the duty to manage the security, the property of the mortgagee, for the benefit of the mortgagee. In the context of the agency of a receiver which is no ordinary agency but primarily a device to protect the mortgagee, the general agency principles are of limited assistance in identifying the duties owed by the receiver to the mortgagor.

Date: 01-Jan-1986
Judges: Hoffmann J
References: [1986] 1 WLR 1301,
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Filed under Agency, Insolvency, Land

Silven Properties Limited, Chart Enterprises Incorporated -v- Royal Bank of Scotland Plc, Vooght, Harris; CA 21-Oct-2003

The claimants sought damages from mortgagees who had sold their charged properties as receivers. They said they had failed to sell at a proper value. They asked whether the express appointment in the mortgage of receivers as agents of the mortgagor leads to the assumption by receivers who accept such appointment of responsibilities and duties which differ from those owed by the mortgagees.
Held: By accepting office as receivers of the Claimants’ properties the Receivers assumed a fiduciary duty of care to the Bank, the Claimants and all (if any) others interested in the equity of redemption. The scope or content of the duty depends on the special nature of the relationship between the Bank, the Claimants and the Receivers arising under the terms of the mortgages and the appointments of the Receivers, and in particular the role of the Receivers in securing repayment of the secured debt and the primacy of their obligations in this regard to the Bank. That was inconsistent with a duty to take the pre-marketing steps for which the Claimants contended in this action.

Court: CA
Date: 21-Oct-2003
Judges: Lord Justice Aldous Lord Justice Tuckey Mr Justice Lightman
Links: Bailii,
References: [2003] EWCA Civ 1409, Times, 27-Oct-2003, Gazette, 20-Nov-2003, [2004] 1 WLR 997, [2004] 4 All ER 484
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Filed under Agency, Insolvency, Negligence

Gaskell -v- Gosling; CA 1896

The agency of a receiver for the mortgagor is one where the principal, the mortgagor, has no say in the appointment or identity of the receiver and is not entitled to give any instructions to the receiver or to dismiss the receiver. ‘For valuable consideration he has committed the management of his property to an attorney whose appointment he cannot interfere with’ and ‘a receiver and manager appointed by a mortgagee under an agreement that he shall be the agent of the mortgagor is in the same position as if appointed by the mortgagor himself, and as if every direction given to him emanated from the mortgagor himself.’

Court: CA
Date: 01-Jan-1896
Judges: Rigby LJ (dissenting)
References: [1896] 1 QB 669,
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Filed under Agency