Dolphin v Harrison, San Miguel Pty Ltd [1911] HCA 47; (1911) 13 CLR 271 (26 September 1911)

HIGH COURT OF AUSTRALIA

Dolphin Defendant, Appellant and Harrison, San Miguel Proprietary Ltd Plaintiffs, Respondents

H C of A

On appeal from the Supreme Court of Victoria.

26 September 1911

Griffith C.J., Barton and O'Connor JJ.

Irvine K.C. (with him Cohen), for the appellant.

Schutt (with him Dethridge), for the respondents.

Irvine K.C., in reply,

Griffith C.J.

This case came before us so recently on an application for special leave to appeal that it is not necessary to take further time to consider it. The question for determination at first sight seems a small one. The amount concerned is very small, but we granted special leave to appeal because there seemed to be involved in it a very important question of law, namely, whether a person who has property for sale and is assisted in bringing about a sale by a friend thereby becomes impliedly liable to pay commission on the transaction to that friend. Of course that would be an intolerable position—that a person could not speak to a friend about property he had for sale without incurring liability to pay commission on the sale.

The action is for commission, and the plaintiffs had to establish a contract between the defendant and themselves that the defendant would employ the plaintiffs as his agents to introduce a purchaser on the terms that if they did so they should receive a pecuniary reward. That is the contract the plaintiffs had to prove. Whether there was such a contract depends entirely upon the construction of two documents.

The plaintiffs are merchants. They describe themselves on their stationery as "cork merchants, and importers of machinery and all requisites for ærated water manufacturers, brewers, bottles, confectioners," &c. They had had some previous dealings with the defendant in that capacity. On 10th September 1910 they wrote a letter to the defendant, who was the owner of a brewery, in the following terms:—The writer is under the impression that he heard somewhere that you were inclined to sell your business. If such is the case we should be glad to hear from you stating what amount you require for same and any particulars that are likely to help us to make a sale. We have an inquiry for a small brewery and shall be glad to hear from you on the subject. Stopping there, the defendant is informed that some customer, or some person with whom the plaintiffs are acquainted, is inquiring for a brewery, and that the plaintiffs have heard that the defendant's brewery is for sale, and the defendants ask what price he wants. So far I cannot see a suggestion of a request by the plaintiffs to the defendant to employ them as his agents to obtain a purchaser. But these words are relied upon by Mr. Schutt, and they are the only words that can be relied upon. "We should be glad to hear from you stating what amount you require for same and any particulars that are likely to help us to make a sale." Conceding for a moment that that is open to the construction contended for by Mr. Schutt, then comes the defendant's answer on 28th September as follows:—"In reference to sale of brewery I want £2,500 net for the busine. If I can't get that I don't sell. The only reason for selling I am getting too old, if I was 20 years younger I would not think of selling. Any further particulars you can have by applying." That seems to me to negative the idea that the defendant was employing the plaintiffs to sell on commission. He said "I will take £2,500 from anybody, but I will pay no commission to anybody." That is what he said. From that it is contended that there was an implied promise to pay commission if they introduced a purchaser.

I will refer now to what happened afterwards. The plaintiffs' friend was one Shepard, and he was informed by the plaintiffs of the defendant's willingness to sell. Shepard saw the plaintiffs' manager and then went to Knight, the managing director of R. Montgomery & Co., who gave him a written introduction to the defendant as follows:—"This will be handed to you by a very old friend of the firm's who is on the look-out for a business and has been informed that yours is for sale. We can only speak of him in the most highest terms of praise and if you have determined to dispose of your brewery you need have no fear of discussing the matter with him as in the event of his not buying the whole subject will be treated most confidentially." Shepard took that to the defendant and the result was that the defendant sold his brewery to Shepard for £2,500.

Now it is suggested that, as the plaintiffs were the means of introducing Shepard to the defendant, and as Shepard and the defendant made a contract for the sale of the brewery, there was a liability on the part of the defendant to pay commission to the plaintiffs. If there was a promise by the defendant to pay commission to the plaintiffs for finding a purchaser, that is, no doubt, quite right. It would not matter in that case what price the defendant accepted from Shepard because the services had been rendered by the plaintiffs to the defendant. But it is quite clear that there was no such contract between the plaintiffs and the defendant. The defendant said "I will pay no commission. I must have £2,500 net"—by which I understand exclusive of any commission. So that if the plaintiffs could make the defendant pay commission on the sale, the defendant would be entrapped into making a bargain which the plaintiffs knew he would not make. If Shepard had told the defendant that he had come from the plaintiffs, so that the defendant had known that he might be liable to pay commission, it is clear the contract would not have been made. In my opinion there is no justice in the claim set up by the plaintiffs, entirely apart from its legal validity. I think it is impossible to find any promise by the defendant to pay commission for the introduction of a purchaser by the plaintiffs. For these reasons I think the appeal should be allowed.

Barton J.

I am of the same opinion. I think the action was perfectly baseless.

O'Connor J.

I concur.

Appeal allowed. Judgment appealed from discharged. Judgment for defendant with costs of action, including costs of reference to the Full Court.

Solicitor, for the appellant, Alan Skinner for R. W. Shellard, Daylesford.

Solicitors, for the respondents, Madden & Butler.