Macnamara v Martin [1908] HCA 86; (1908) 7 CLR 699 (18 December 1908)

HIGH COURT OF AUSTRALIA

Macnamara Plaintiff. Appellant; and Martin Defendant, Respondent

H C of A

On appeal from the Supreme Court of New South Wales.

18 December 1908

Griffith C.J., Barton, Isaacs and Higgins JJ.

Gordon K.C. (Brissenden with him), for the appellant.

Sheridan and F. A. A. Russell, for the respondent.

18 December

Griffith C.J.

This was an action brought in a District Court by the appellant to recover commission upon a contract under which the defendant employed him to find a purchaser for a licensed hotel. The purchaser was in fact to be a tenant. The plaintiff entered upon the work, and after a short time introduced to the defendant a Mrs. Daniels who was financially competent, and against whom it appears nothing is known. At that period of the negotiations the defendant seems to have changed his mind. He told the plaintiff to go no further in the matter, and later on gave him an entirely new set of instructions. To give instructions entirely inconsistent with the original contract is clearly a revocation of the original authority. The plaintiff claims that under these circumstances he has earned something, either the whole £50 according to the contract, or something by way of quantum meruit for services rendered, or that he is entitled to something in the nature of damages for not having been allowed to carry out the contract and earn the commission. The particulars of the action in the District Court were in the form of a claim for commission under the special contract, and a claim under the common count of indebitatus assumpsit. The plaintiff obtained a verdict for £50. On appeal to the Supreme Court that verdict was set aside on the ground that after revocation of the authority the agent had done something inconsistent with his duty to the defendant. Now the act alleged to be inconsistent with his duty to the defendant was this, that being under the impression that the defendant was not behaving fairly to Mrs. Daniels, who had been introduced by him to the defendant, he tried to persuade the defendant to take a different view, and then, having failed in that, drew up a document in the form of an agreement between himself as agent for the defendant and got Mrs. Daniels to sign it. The plaintiff had no authority to make such a contract on behalf of the defendant, and the document was therefore not binding upon the defendant, though it might perhaps have been binding upon Mrs. Daniels if the defendant had adopted it. That is the alleged misconduct. But it had no detrimental effect upon the defendant so far as we know. If it was a breach of any legal duty, and the defendant suffered damage, he was entitled to recover that damage from the plaintiff in some form of proceeding. But damage would be a necessary part of the cause of action. It is not, however, suggested that any harm was caused to anybody by it. The learned Judges of the Supreme Court were of opinion that it was misconduct by the agent in the course of the agency disentitling him to recover money he had already earned. The learned counsel for the respondent did not attempt to support that position here: it is not necessary therefore to say anything more about it than that where a man has earned a remuneration his right to receive it can only be taken away by something in the nature of payment, accord and satisfaction, or release. But the learned counsel for the respondent has set up some other grounds, some of which were open to him, and some were not. I will deal first with the alleged ground of misdirection. The learned Judge told the jury, in effect, that if they found that the plaintiff bonâ fide entered into a contract with a bonâ fide purchaser, and that purchaser was ready and willing to carry out the contract, then they should come to the conclusion that the plaintiff had done all that he contracted to do, and if they believed that, then the plaintiff was entitled to the £50 mentioned in the contract. That was not strictly correct. The plaintiff was not necessarily entitled to the whole £50, but to a verdict for a sum the amount of which might be what the jury might think his services were worth, not exceeding £50. But it was conceded between the parties at the trial that the plaintiff was really entitled to £50 or nothing. So there is nothing in that point. Another objection to the form of the direction was that the jury might have been led to think that the plaintiff's right to recover depended upon his getting the contract signed. It is clear that that is not so. His rights do not depend upon that. He earned his remuneration if he found a bonâ fide purchaser irrespective of the signing of the contract. But any error in that statement objected to is rather in favour of the defendant than the plaintiff. That, therefore, is not a ground for reversing the judgment. The third point made was that his Honor refused to direct the jury that if they found that the defendant bonâ fide objected to Mrs. Daniels as a tenant the plaintiff could not recover. Now that ground assumes that upon a contract of that sort no remuneration is payable unless the principal actually enters into a contract with the person introduced. But that is not the meaning of the contract. The defendant sought to show that there was a bonâ fide objection, and failed, so that the point is not now material. It was sought to sustain the same point upon a somewhat different ground, putting a different meaning on the words bonâ fide, that is, that if the defendant had an objection, based upon reasonable grounds, to the tenant as not being a fit and proper person to be given a lease of the hotel, that was an answer to the plaintiff's claim. Possibly it might be. But no such question was raised at the trial. That, therefore, is out of the way. All the objections taken by the defendant to the judgment of the District Court fail, and in my opinion the appeal ought to have been dismissed.

We granted special leave to appeal from the decision of the Supreme Court, because, it was suggested, the opinion pronounced by the Supreme Court, that a man who has earned money for services rendered is, nevertheless, disentitled to receive it if he afterwards does something inconsistent with his duty, might lead to confusion in the administration of justice in the inferior Courts. I may add that for my part I do not see that there was any misconduct on the part of the appellant in this case which could have that effect even if the doctrine were sound. It was suggested that he was guilty of misconduct in endeavouring to persuade his principal to do what he considered a "fair thing" by the purchaser. That was very properly not pressed before us. In my opinion, therefore, the appeal should be allowed and the judgment in the District Court restored.

Barton J.

I am of the same opinion.

Isaacs J.

I think, too, that the appeal should be allowed. The claim was made in the alternative, first, on an express contract to find a purchaser for a commission of £50, and, secondly, under an indebitatus count for £50 for work done, &c. Now the defence raised at the trial was this: non assumpsit, and denial that plaintiff did the work, that the property was put into plaintiff's hands on certain terms and that plaintiff did not conduct the business properly, and did not get a purchaser who could carry out the contract, and in fact, that there was fraud on the part of the plaintiff. The learned Judge in his report to the Supreme Court said:—"The whole contest between the parties was, as far as I could judge from the evidence and the manner in which the case was fought on both sides, whether the plaintiff was entitled to £50 or nothing." So no question was raised as to the amount the plaintiff was entitled to on the basis of a quantum meruit. The learned Judge proceeds:—"The defendant's case is that plaintiff's claim was based on fraud and therefore plaintiff could not recover anything. Plaintiff claimed that he acted honestly throughout and was therefore entitled to the £50 mentioned in the agreement." Now there is nothing better established with respect to procedure than this, that with regard to the facts parties are bound by the way they fight the case at the trial, and the issue there fought was whether the plaintiff had misconducted himself by getting Mrs. Daniels to sign that contract, she not being a person who could carry out the contract, and doing that fraudulently. That was the one issue, and that was found against the defendant. Now I do not doubt that upon the circumstances as proved many questions of fact might have been raised with more or less success at the trial, but it is too late, in my opinion, for the defendant now to raise questions and issues of fact that he did not raise then, and as to which it is obvious that there may have been good reasons why he should not wish to raise them. He therefore raised the one point that Mrs. Daniels was not a person who could carry out the contract, and more, that the plaintiff was guilty of fraud in inducing her to sign the contract. Looking at the points which the learned counsel for the defendant asked the learned Judge to reserve, and at the grounds of appeal to the Supreme Court as a whole, I feel no doubt that that was the one point variously stated. Under these circumstances it seems to me that the appeal must be allowed, because the ground upon which the learned Chief Justice of New South Wales based his decision was this, that though the plaintiff was otherwise entitled to a quantum meruit in respect of the work done before the contract was terminated, he says[1]:—"I think the answer to this is, that his previous service was of no value whatever to his principal." I may interpose—Why was it not? Because the defendant would not accept it. The learned Chief Justice proceeds:—"And by his subsequent misconduct, or ignorance of his duty as a commission agent, he forfeited any claim he might otherwise have had." That would depend on whether it was already earned or not. I think, therefore, that the plaintiff was entitled, at all events to some remuneration as upon a quantum meruit, or as damages for not being allowed to earn the £50 under the express contract. And as the parties raised the one issue of fact they must abide by it, and as they agreed that it was a case of £50 or nothing the damages are fixed at that amount. Under these circumstances I think that the appeal should be allowed.

Higgins J.

I agree that the appeal should be allowed, and wish just to say that it must be clearly understood that we are confined to the points taken by the defendant on his application for a nonsuit, that the plaintiff was to get nothing unless the defendant actually gave a lease to the plaintiff's client.

Griffith C.J.

Under the circumstances we do not see any reason for departing from the ordinary rule that the unsuccessful party pays the costs of the appeal.

Appeal allowed Order appealed from discharged. Motion for new trial dismissed. Judgment in the District Court restored. Respondent to pay the costs of the appeal.

Solicitor, for appellant, H. F. McKay by E. P. Bassett.

Solicitor, for respondent, F. McGurin by A. J. McDonald.

[1] (1908) 8 S.R. (N.S.W.), 92, at p. 97.