Cochlan v Ruberella Limited: CA 21 Jul 2003

The issue arose as to the liability of a firm for the acts of a partner who had made statements to the claimant regarding the rate of return on a proposed investment amounting to some 6,000 per cent per annum.
Held: The following propositions of law held: ‘(i) The principles of vicarious liability of partners for each others’ actions derive from and were developed out of the principles of vicarious liability of principal and agent and employer and employee, see Dubai Aluminium Company v Salaam. (ii) This liability can extend to fraudulent acts or omissions if those were carried out in the course of the employment or within the scope of the apparent authority, albeit by an employee or a partner conducting the business of a type which he had no right to conduct, see Lloyd v Smith and Co. (iii) It is necessary to show that all the acts or omissions which make the partner liable were committed within the scope of his authority as a partner’ and ‘What are the criteria for determining whether an act is of a class or kind which it is the ordinary business of a solicitor to carry out? The useful starting point is to ask whether the general description of the act falls within the scope of the ordinary business of solicitors. It is a necessary condition that the act should satisfy this requirement. Thus, for example, if the solicitor enters into a contract for the sale of double glazing, he cannot bind his firm under section 5, nor will his firm be vicariously liable for any wrongful act in relation to the transaction under section 10. It is not the ordinary business of solicitors to sell double glazing. The transaction is of a general nature that falls outside the scope of a solicitor’s ordinary business. It is unnecessary to examine the transaction further to see that this is so. Whatever the terms of the contract of sale, it is not made by the solicitor as part of the ordinary business of a solicitor.’
Dyson LJ
Unreported, 21 July 2003
Partnership Act 1890 5
England and Wales
Citing:
CitedDubai Aluminium Company Limited v Salaam and Others HL 5-Dec-2002
Partners Liable for Dishonest Act of Solicitor
A solicitor had been alleged to have acted dishonestly, having assisted in a fraudulent breach of trust by drafting certain documents. Contributions to the damages were sought from his partners.
Held: The acts complained of were so close to . .

Cited by:
CitedBakhitar v Keosghgerian and Others QBD 3-Dec-2003
Employer liable for employee with criminal record
An employee of a firm of solicitors took pawned jewellery to show to a third party possible purchaser. The jewels were misappropriated.
Held: The person involved, who was known to have a criminal record for fraud was for all relevant purposes . .

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Updated: 02 May 2021; Ref: scu.193838