Agency - 1985- 1989

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This page lists 13 cases, and was prepared on 15 November 2008.

American Express International Banking Corporation -v- Hurley [1985] 3 All ER 564
1985 ChD Mann J	Contract, Agency, Banking, Insolvency	Casemap
	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.

Armagas -v- Mundogas [1985] 1 Lloyd's Reports 1
1985 Staughton J, Robert Goff LJ	Torts - Other, Evidence, Agency	Casemap 1 Cites 1 Citers
	In establishing that money was paid as an improper inducement or bribe, proof of corruptness or a corrupt motive was unnecessary. Goff LJ said: "Speaking from my own experience I have found it essential in cases of fraud when considering the credibility of witnesses always to test their veracity by reference to objective facts proved independently of their testimony, in particular by reference to the documents in the case and also to pay a particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not and whether there is a conflict of evidence such as there is in the present case. Reference to the objective facts and documents, the witnesses' notes and letters can be of very great assistance to the judge in ascertaining the truth."

Armagas Ltd -v- Mundogas SA ('The Ocean Frost') [1986] AC 717; [1985] 1 Lloyd's Rep 1; [1985] UKHL 11
22 May 1985 HL Keith L	Agency, Torts - Other	Casemap 1 Cites
	Ostensible authority is general in character, arising when the principal has placed the agent in a position which in the outside world is generally regarded as carrying authority to enter into transactions of the kind in question. The acts of the purported agent are not themselves evidence and are irrelevant to establish such agency as against the principal.
	Link[s] omitted

Gomba Holdings -v- Homan [1986] 1 WLR 1301
1986 Hoffmann J	Insolvency, Land, Agency	Casemap 1 Citers
	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.

Ratford -v- Northavon District Council [1987] QB 357
1986 CA Slade LJ, Ralph Gibson LJ and Sir John Megaw	Insolvency, Agency, Rating	Casemap 1 Cites 1 Citers
	The reality of the agency of a receiver is reflected in the continuity, after the appointment of receivers, of the rateable occupation of the mortgagor through the agency of the receivers. The possession of an agent is to be attributed to that of his principal for rating purposes. The facts that the receivers had had representatives on the company’s premises from time to time during the receivership and that the receivers had managed the company’s business and controlled its assets were “quite consistent with the company remaining in legal possession and rateable occupation of the premises”. As to the authorities: "they all clearly show that the mere fact that a receiver has entered upon the company’s premises for the purpose of managing and carrying on its business does not necessarily mean that the company has been dispossessed or has ceased to occupy the premises for rating purposes. If it is to be shown that a change of rateable occupation has occurred, this conclusion must be derived from the terms of the receiver’s appointment or from what he has actually done, or from both together.” The receivers having demonstrated that their appointment did not oblige them to take possession, and that in carrying out their duties they were deemed to be the agents of the company: “the onus . . shifted to the council to show that the receivers had dispossessed the company, or, to put it another way, to show that the quality of any possession of the premises which the receivers might have enjoyed was not that of mere agents. For possession held by a person in his capacity as agent is in law the possession of his principal.” “It is a general principle of rating law that where an agent is required to occupy a hereditament in order to secure the better performance of his duties as agent, his occupation is for rating purposes ordinarily treated as that of his principal. If, on the other hand, an agent occupies his principal’s property otherwise than in his capacity as agent, the occupation will be treated as his own for rating purposes.”

Brian Cooper & Co -v- Fairview Estates (Investments) Ltd [1987] EGLR 18
1987 CA Woolf LJ	Agency, Contract	Casemap 1 Citers
	A substantial property developer sought a tenant for its office block and agreed with his selling agent to pay "a full scale letting fee . . should you introduce a tenant by whom you are unable to be retained and with whom we have not been in previous communication and who subsequently completes a lease." There was an introduction but, after a number of months, a lease was completed by a company in respect of whose introduction the personnel in Fairview had no recollection, the tenant having been procured by other means. Held: The agent was not an effective cause of the tenancy but the fee was payable. The court refused to imply the usual term requiring that the agent play an effective part was that an introduction was all that Fairview wanted; they had their own employers and lawyers who could do all the subsequent work and no further work after the introduction was expected of the agent. Woolf LJ thought the implied term would avoid the possibility of the client paying commission to more than one agent each of whom might be said to have "introduced" a purchaser or lessee but only one of whom could be said to be the effective cause of the transaction, and said: "In a case where there are no express qualifications to be fulfilled other than that a purchaser should be introduced by the estate agent, then the need to imply a term as to effective cause can be readily appreciated, since otherwise if the vendor engages more than one agent there will be no way in which he can avoid being faced with an obligation to meet the claim for commission of more than one agent who each introduced the tenant. However, in this case there is virtually no danger of this happening because of the words "with whom we have not been in previous communication."

Wood (John D) & Co -v- Dantata; Beauchamp Estates -v- Dantata [1987] 2 EGLR 23
1987 CA Nourse LJ	Agency, Contract	Casemap 1 Citers
	The purchaser liked inspecting houses and the vendor had appointed ten firms to act for him as estate agents. Each of the estate agents was approached by this purchaser and each of the estate agents took the would be purchaser over the property of the vendor. An estate agency's clients resisted payment of his fees. Two agents were saying they were entitled to commission. The result depended upon whether the agent had introduced the purchaser. The parties had accepted that “in order to succeed one or other of the two firms had to show that they introduced the ultimate purchaser and that such introduction was the (my emphasis) effective cause of the purchase.” Held: The familiar meaning of the word introduction was the bringing together of two people who have not previously met. The fact that one agent introduces a person who ultimately purchases after a later introduction by another agent will not necessarily entitle the first agent to commission. In such a case the court must determine which of the two agents was the effective cause of the transaction taking place. Nourse LJ: "As I have said, the learned judge recorded an acceptance by all three counsel that in order to succeed one or other of the two firms had to show that they introduced the ultimate purchaser and that such introduction was the effective cause of the purchase. That would seem to suggest that there are two questions to be answered, and it would certainly explain the importance which the learned judge attached to the chief’s retention of a lively interest in the property when he went there again on September 9. In truth I think that there is but a single question to be answered: which of the two firms introduced the chief to the sale? Both language and authority establish that that question must be answered by answering this further question: which of the two firms was the effective cause of the sale? Here I would gratefully adopt the following statement of the law in Bowstead on Agency , 15th ed, at p230, to which the learned judge referred: ... the fact that one agent introduces a person who ultimately purchases after a later introduction by another agent will not necessarily entitle the first agent to commission. In such a case the court must determine which of the two agents was the effective cause of the transaction taking place. The difficulties in clarifying the mind on this question are, I think, caused by the familiar meaning of the word “introduction” as the bringing together of two people who have not previously met. Thus it is natural, when looking at the word in its present context, to attach significance to the first bringing together of the property and the person who ultimately purchases it. But the full phrase is “the introduction of a purchaser” and I think that that can only mean the introduction of the person who ultimately purchases, not to the property, but to the purchase or, if you look at it from the vendor’s angle, to the sale: in either case to the transaction which ultimately takes place. And if you then apply the primary dictionary meaning of “introduction”, you find that what you are looking for is the leading or bringing in of the purchaser to that transaction. That makes it clear that first acquaintance is not paramount and it explains why the test is expressed by reference to the effective cause of the transaction. Which of the two firms was the effective cause of the sale to the chief?"

Brodie, Marshall & Co (Hotel Division) Ltd -v- Sharer [1988] 1 EGLR 21; [1988] 19 EG 129
1988 White J	Agency	Casemap 1 Cites 1 Citers
	The defendant resisted payment of his estate agent's charges. The agency contract gave the agent sole selling rights, but the purchaser was found on the vendor's own initiative. The terms made commission was payable if 'we introduce directly of indirectly a person who agrees to purchase the property.' Further 'if during the period of our sole selling agreement the owner deals with a person not introduced by us or by any other agent, we shall be entitled to the same commission as if we had introduced such person.' The defendant had not withdrawn the plaintiff's instructions, but the introduction was not by any person within the terms defined. Held: The agent could recover his commission. The clauses were clear and unambiguous, and had properly been brought to the attention of the defendant. The terms were neither onerous, nor unusual.

Re K (Enduring Powers of Attorney), In re F [1988] Ch 310
1988 ChD Hoffmann J	Agency, Litigation Practice, Health	Casemap 1 Citers
	The court allowed an appeal against the decision of the Master of the Court of Protection refusing registration to an enduring power of attorney on the ground that the donor, although capable of understanding the nature of the power, was herself incapable by reason of mental disorder of managing her property and affairs at the time that she executed the power. For a juristic act to be valid, the person performing it should have the mental capacity (with the assistance of such explanation as he may have been given) to understand the nature and effect of that particular act. In the context of litigation, the test to be applied is: "whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings." There is no logical reason why a person who understands that something needs to be done, but who does not have the requisite understanding to do it for himself, should not confer on another the power to do what needs to be done. Hoffmann J said: "there is no logical reason why, though unable to exercise her powers, [the donor] could not confer them upon someone else by an appropriate juristic act. The validity of that act depends on whether she understood its nature and effect and not on whether she would hypothetically have been able to perform all the acts which it authorised." and "I do not think that it would be sufficient if he realised only that it gave Cousin William power to look after his property. Mr Rawson [counsel instructed by the Official Solicitor] helpfully summarised the matters which the donor should have understood in order that he can be said to have understood the nature and effect of the power. First (if such be the terms of the power) that the attorney will be able to assume complete authority over the donor's affairs. Secondly (if such be the terms of the power) that the attorney will in general be able to do anything with the donor's property which he himself could have done. Thirdly, that the authority will continue if the donor should be or become mentally incapable. Fourthly, that if he should be or become mentally incapable, the power will be irrevocable without confirmation by the court. I do not wish to prescribe another form of words in competition with the explanatory notes prescribed by the Lord Chancellor, but I accept Mr Rawson's summary as a statement of the matters which should ordinarily be explained to the donor (whatever the precise language which may be used) and which the evidence should show he has understood."

Chaudry -v- Prabhakar [1989] 1 WLR 29; [1988] 3 All ER 718
1988 CA Stuart Smith LJ	Agency, Negligence	Casemap 1 Cites
	Where a person agreed to find a suitable car. A car was bought but was unroadworthy. 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.

Chesterfield -v- Zahid [1989] CLY 54
1989	Agency	Casemap 1 Citers

Re Offshore Ventilation [1989] 5 BCC 160
1989	Agency, Insolvency	Casemap 1 Citers
	The position of agency of receivers is a real one, even though it has some peculiar incidents.

JH Rayner (Mincing Lane) Ltd -v- Department of Trade and Industry [1990] 2 AC 418; [1989] 3 WLR 969
1989 HL Lord Oliver	Constitutional, Agency, Company	Casemap 1 Cites 1 Citers
	An undisclosed principal will not be permitted to claim to be party to a contract if this is contrary to the terms of the contract itself. Thus the provision in the standard form B contract of the London Metal Exchange "this contract is made between ourselves and yourselves as principals, we alone being liable to you for its performance" is effective to preclude any contention that the parties named in the contract are contracting as agents for others. Municipal courts could not adjudicate on or enforce rights arising out of international treaties, unless they had been incorporated into domestic law. "As a matter of the constitutional law of the United Kingdom, the Royal Prerogative, whilst it embraces the making of treaties, does not extend to altering the law or conferring rights upon individuals or depriving individuals of rights which they enjoy in domestic law without the intervention of Parliament. Treaties are not self-executing. A treaty is not part of English law unless and until it has been incorporated into the law by legislation. So far as individuals are concerned, it is res inter alios acta from which they cannot derive rights and by which they cannot be deprived of rights or subjected to obligations; and it is outside the purview of the court not only because it is made in the conduct of foreign relations, which are a prerogative of the Crown, but also because, as a source of rights an obligations, it is irrelevant."