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.
The existence of the tort of fraud/bribery and the basis for a claim of monies had and received was identified: ‘(1) for money had and received under which he can recover the amount of the bribe as money had and received or, (2) for damages for fraud, under which he can recover the amount of the actual loss sustained in consequence of his entering into the transaction in respect of which the bribe was given, but he cannot recover both.’
[1979] AC 374, [1978] 2 All ER 405
England and Wales
Cited by:
Cited – Islamic Republic of Pakistan v Zardari and others ComC 6-Oct-2006
The claimant alleged that the defendants had funded the purchase of various properties by secret and unlawful commissions taken by them whilst in power in Pakistan. They sought to recover the proceeds. They now sought permission to serve proceedings . .
Cited – Wilson and Another v Hurstanger Ltd CA 4-Apr-2007
The company sought to enforce its loan agreement and charge over the defendants’ property. The defendants appealed saying that the agreement was unenforceable under the Act, since a commission had been paid to the introducing broker, and his fee had . .
Lists of cited by and citing cases may be incomplete.
Torts – Other, Agency, Damages
Updated: 30 December 2021; Ref: scu.245212