The defendant had agreed to act as the claimant’s agent and distributor of the claimant’s wines in the UK. It acted both as agent and also bought wines on its own account. When the defendant went into litigation the parties disputed the right of the defedant to collect outstanding siums. The court was asked two questions: ‘The first is: in what circumstances will the law treat the authority of an agent as irrevocable. The other is whether the receipt of money at a time when the recipient knows that imminent insolvency will prevent him from performing the corresponding obligation, can give rise to liability to account as a constructive trustee.’ At first instance the court had decided that the authority to collect sums was revoked upon service of the notice terminaing the agreement, but the Court of Appeal decided in its favour.
Held: The appeal was allowed. The agent;s authority was determined imediately. It did not have sufficient interest under the contract to have authority to collect the unpaid sales invoices.
Lord Neuberger, President, Lord Clarke, Lord Sumption, Lord Carnwath, Lord Hodge
[2016] UKSC 47, UKSC 2014/0106, [2016] WLR(D) 455, [2016] 1 WLR 3179
Bailii, Bailii Summary, SC, SC Summary, SC Summ Vid, WLRD
Powers of Attorney Act 1971 4(1)
England and Wales
Citing:
At first instance – Bailey and Another v Angove’s PTY Limited ChD 2013
The liquidator of the company sought a declaration that sums received by the defendant sales agents on behalf of the insolvent company were to be paid out to the liquidators in full. The court was asked whether the payments by DWL and PLB made after . .
Cited – Walsh v Whitcomb 1797
Lord Kenyon said that powers of attorney are ‘revocable from their nature’. . .
Cited – Smart and another v Sandars and Others CCP 12-May-1848
A factor to whom goods have been consigned generally for sale, and who has subsequently made advances to his principal on the credit of the goods, has no right to sell them, contrary to the orders of his principal, on the latter neglecting, on . .
Cited – Gaussen And Others v W Morton And E Morton 7-May-1830
A. being indebted to B, in order to discharge the debt executed to B a power of attorney, authorising him to sell certain lands belonging to him, A.: Held, that this, being an authority coupled with an interest could not be revoked. . .
Cited – De Comas v Prost and Kohler PC 13-Mar-1865
New South Wales . .
Cited – Doward, Dickson and Co v Williams and Co 1890
Where an agent’s only interest is a commercial interest in being able to earn his commission, his power of attorney is not secured and is revocable, because the authority is not properly speaking a security at all. . .
Cited – (In re Hannan’s Empress Gold Mining and Development Co (Carmichael’s Case) 1896
A power of attorney was held to be irrevocable when conferred on the promoter of a public share offering to subscribe for shares . .
Cited – Van Praagh v Everidge ChD 1902
A power of attorney conferred by a bidder on an auctioneer of land to execute the memorandum of sale if it is knocked down to him was held to be irrevocable . .
Cited – Frith v Frith PC 21-Mar-1906
Turks and Caicos Islands – A manager sought to claim that the power of attorney, which authorised him to enter into possession of and manage an estate in the Turks and Caicos Islands, and to receive rents and profits and pay debts due by the owners, . .
Cited – Temple Legal Protection Ltd v QBE Insurance (Europe) Ltd CA 6-Apr-2009
‘In the present case the binder gives Temple certain valuable rights, including a right in Section 27.1 to ‘retain’ commission out of premiums, but they do not include any rights of a security or proprietary nature to which the authority can be . .
Appeal from – Bailey and Another v Angove’s Pty Ltd CA 7-Mar-2014
The parties disputed the payment out of sums held by the company’s liquidators under an undertaking given by them. Their case was that if DandD (agents for the insolvent company) acted in the relevant respects as agents, their authority to collect . .
Cited – Daly v Lime Street Underwriting Agencies 1987
A name at Lloyds confers an irrevocable power of attorney on his managing agent to underwrite business. . .
Cited – Society of Lloyd’s v D Leighs and Others; Society of Lloyd’s v D Wilkinson and Others ComC 20-Feb-1997
ComC Lloyd’s Litigation – issues relating to recovery from names.
Held: A name at Lloyd’s grants a power of attorney to the underwriting agent to execute that power which is irrevocable. . .
Cited – Barclays Bank Ltd v Quistclose Investments Ltd; etc HL 31-Oct-1968
R Ltd were in serious financial difficulties. The company’s overdraft with the appellant bank was almost twice its permitted limit. The company sought a loan of 1 million pounds from a financier, who was willing to lend the company that sum provided . .
Cited – Lord Napier and Ettrick and Another v Hunter and Others; Same v R F Kershaw Ltd HL 3-Mar-1993
Certain insureds sought recovery of a sum which was greater than the sum which had been paid to them by their insurers. The insureds had claimed first on the policies of insurance. Their claims had been met. The insureds then pursued an action in . .
Cited – Chase Manhattan Bank NA v Israel-British Bank (London) Ltd 1981
Goulding J approved the statement in Story’s Commentaries on Equity Jurisprudence: ‘the receiving of money which consistently with conscience cannot be retained is, in equity, sufficient to raise a trust in favour of the party for whom or on whose . .
Not justified – Neste Oy v Lloyd’s Bank Plc ChD 1983
A shipping agent (PSL), a client of the defendant, had become insolvent. The defendant sought to combine the accounts. PSL settled on behalf of their shipowner clients bills payable to harbour authorities, pilots, fuel merchants, and other providers . .
Cited – Westdeutsche Landesbank Girozentrale v Islington London Borough Council HL 22-May-1996
Simple interest only on rate swap damages
The bank had paid money to the local authority under a contract which turned out to be ultra vires and void. The question was whether, in addition to ordering the repayment of the money to the bank on unjust enrichment principles, the court could . .
Wrongy decided – Japan Leasing (Europe) Plc v Shoa Leasing (Singapore) PTE Ltd ChD 30-Jul-1999
The court considered a hire purchase agreement for an aircraft between four leasing companies and Olympic Airways. The contract documentation provided for the payment of the price in instalments to designated accounts in various currencies of one of . .
Cited – Ibrahim v Barclays Bank Plc and Another CA 16-May-2012
The court was asked whether a debtor’s liability to his creditor is discharged when the creditor recovers an equivalent amount to the debt from a bank that has provided a standby letter of credit.
Held: they were entitled at common law to . .
Cited – FHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
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 . .
Lists of cited by and citing cases may be incomplete.
Agency, Commercial
Updated: 20 January 2022; Ref: scu.567604