Taylor v Smith

[1926] HCA 16

---

(Judgment by: Higgins J)

Taylor
vSmith

Court:

Judges: Knox CJ
Isaacs J

Higgins JRich J
Starke J

Subject References:
Principal and Agent
Authority to sell land for net sum
Right to retain excess over that sum
Authority in writing to sell for certain sum and to retain excess
Signature obtained by misrepresentation
Principal not able to read without glasses
Non est factum
Action for money had and received
Money paid away by solicitor under mistake of fact
Recovery from payee
Ratification

Hearing date: 19 -21 May 1926
Judgment date: 10 June 1926

Melbourne

---

Judgment by:
Higgins J

I concur in the opinion that this appeal should be dismissed. I understand that the only difficulty remaining is due to the argument that the defendant ratified the action of his solicitor, Mr. Serle, in paying £500 as commission out of the £4,500 purchase-money to the plaintiff and the plaintiff's sub-agent Colbert, who had effected the sale of Wentworth Flats. No argument as to ratification is mentioned in the judgment of the County Court, or in the judgment on appeal of the Supreme Court; and ratification is not mentioned among the grounds stated in the notice of appeal to this Court. I shall assume, however, that it is open to the plaintiff to argue that there was ratification, because ground 4 states that the order of the County Court was "wrong in law and contrary to evidence."

Now, there certainly are facts which tell heavily against the defendant's version of the transaction; and if the learned County Court Judge had found, seeing and hearing the witnesses, that the defendant well understood the contents of Exhibit 1, which Colbert had got him to sign, and which purported to allow the agent to retain the balance £500 of the purchase-money, the finding probably could not be upset. In the statement of accounts rendered by Serle to the defendant, on or about 28th April, as to the purchase-money, £ 4,500, for Wentworth Flats and the purchase-money (payable by the plaintiff) for the Bunyip Hotel, the receipts and expenditure appear as follows:- "Receipts.-Purchase Dr. Cotton, £4,500; E. S. & A. Bank, Garfield, £1,000; Debit, £38 15s. 11d.: £5,538 15s. 11d. Expenditure.-Taylor & Colbert, £500; E. S. & A. Bank. £2057 10s. 4d.; Exchange, Garfield, 10s.; Kelly, £2711 17s. 10d.; Adjustment of rates, re Cotton, £18 17s. 9d.; Deposit, Kelly, £250: £5,538 15s. 11d." (Kelly was vendor of the Bunyip Hotel to the defendant; and the bank advanced the defendant £1,000.)

There was subsequent correspondence as to the £38 15s. 11d. out-of-pocket claimed by Serle, and as to Serle's costs, and as to £206 advanced to the defendant by Taylor; but there appears no protest on the part of the defendant as to the £500 paid to Taylor and Colbert until 19th September, when the defendant's solicitors, Rodda & Ballard, wrote that in the event of proceedings on the dishonoured cheque for £206, a "very much larger sum would be counterclaimed." Then, on 9th October, these solicitors set out the subjects of counterclaim, which included: "(5) Balance of price paid for Wentworth Mansions being the difference between £500 and the amount your client is entitled" to "under the scale of charges fixed by the Associated" (sic) "of Estate Agents for commission in respect of the sale." Moreover, on 3rd September, in a conversation between Serle and the defendant as to Serle's costs, the defendant said (according to Serle-the defendant was not cross-examined as to the statement): "Taylor ought to pay it" (Serle's account as solicitor); "he got a fine commission out of it, and he employed you" (the plaintiff had in fact persuaded the defendant to employ Serle as his solicitor). This evidence was all before the learned Judge in the County Court; but he found in favour of the defendant. He found that Colbert, in getting the defendant to sign Exhibit 1, represented to the defendant that the document was merely an authority to sell, to be shown to purchasers; and that the defendant, being without his glasses, could not read the document and was misled as to its nature. The Judge also found that the defendant, who had been a motor driver, was a very dull business man; and we have no ground for rejecting such findings.

Although the point of ratification was not put before the County Court, Judge Woinarski did not fail to consider the statement of account of 28th April, which, if read and understood by the defendant, disclosed the payment of £500 to the plaintiff and Colbert. His words are:-"The question is whether this shows a waiver on defendant's part disentitling him now to receive the £ 387 10s. There were cross-claims between the parties apart from this, and I see nothing in the circumstances to establish waiver."

I infer that the Judge's view was something like this: That the defendant, being a very dull business man, and feeling that Serle would look after his interests, did not concern himself with the details of the accounts and cross-claims; that he did not realize, till he went to Messrs. Rodda & Ballard, that the statement of account showed Taylor and Colbert to have received £500 of his moneys; and that the conversation as to the "fine commission" (8th September), if it occurred, may have referred to the £112 10s. which would have been the regular commission, or, if the words referred to the £500, may have been due to the dawning of intelligence in a slow mind. Whether this view is right or not, I do not think that the plaintiff has satisfied the burden of proving that the defendant ratified the wrongful payment by Serle of £500 to Taylor and Colbert. There is no sufficient proof that the defendant consciously sanctioned the act of Serle in making the payment-no proof that he confirmed or ratified this act of Serle. Apart from estoppel-and there is no pretence of estoppel here-I cannot conceive of authority being given by a principal to an agent, either prospectively or retrospectively (by ratification), unless it be given consciously. I include, of course, conscious acquiescence in the sense explained in De Bussche v. Alt(1).

But it is also necessary for ratification that at the time thereof the alleged ratifier should have full knowledge of all the material circumstances under which the act was done (Bowstead on Agency, 7th ed., p. 57, and cases cited); and here the defendant did not know that Serle had made the payment under the error-whether derived from Exhibit 1 or from conversation with Taylor, we do not know-that the defendant had contracted to pay the £500.

At the very least, we ought not to decide against the defendant on such a point as ratification under the circumstances without allowing a new trial in which the point is put directly and explicitly in issue. But, on the rules of the game, and notwithstanding the strong facts to which my brother Isaacs alludes, I think the proper order to be that the appeal be dismissed.