Jerome v Ward [1915] HCA 77; (1915) 20 CLR 685 (6 December 1915)

HIGH COURT OF AUSTRALIA

Jerome Defendant, Appellant; and Ward Plaintiff, Respondent.

H C of A

On appeal from the Supreme Court of New South Wales.

6 December 1915

Griffith C.J., Isaacs and Rich JJ.

Clive Teece (Broomfield with him), for the appellant.

Rolin K.C. and Pitt, for the respondent, were not called upon.

Griffith C.J.

The facts in this case as found by the jury are very simple, and show a very clear case in favour of the plaintiff. Some other views of the law upon which the plaintiff might have succeeded were also put before the Supreme Court. The facts are these:—The plaintiff desired to buy a piece of land which the defendant also wished to buy. In order to avoid competition, the plaintiff offered to pay the defendant a large commission if he would act as his agent and buy the land for him. The defendant agreed to do so. The price specified by the plaintiff as that which he was willing to pay was £18,000, and the defendant gave him to understand that he could get the property for that sum. Subsequently the defendant's solicitor brought to the plaintiff for signature a contract purporting to be made between the defendant himself as vendor and the plaintiff as purchaser, for sale at the price of £18,000, and, on inquiry why it was drawn up in that form and not in the form of a contract of sale from the owners of the land directly to the plaintiff, the explanation given was that the owners insisted upon their contract being formally made in that way. I think this amounted to a distinct representation by the defendant that the price which he had agreed to pay to the vendors was £18,000, and that the only reason why the document was drawn up in the form in which it was drawn up was a personal wish of the vendors. Relying on these representations, the plaintiff signed that contract. The defendant had, in fact, only agreed to pay £17,000, and probably the document was drawn up in the way it was in order to enable the defendant to deceive the plaintiff. The plaintiff did not discover the truth for some two or three months. He gave the defendant an opportunity to act honestly, but, on the defendant's refusing to do so, the plaintiff rescinded the contract, as he was entitled to do unless he had in the meantime either affirmed the contract or allowed a reasonable time to elapse before disaffirming it. There is no evidence that I can discover that the plaintiff had allowed a reasonable time to elapse or that he had affirmed the contract. Under these circumstances the plaintiff was entitled to rescind the contract and to recover the deposit which he had paid upon it. That was what the action was brought for, and in my opinion the plaintiff was clearly entitled to succeed in it.

Isaacs J.

I quite agree with what the learned Chief Justice has said. I would add this: that, even disregarding the position of principal and agent in the first instance, or at all, and treating the contract of 12th August as a contract between vendor and purchaser, there still was evidence of a fraudulent misrepresentation by Deery, as the defendant's agent, that the amount to be paid under the prior contract into which the defendant, who for this purpose is to be assumed to have been a principal, had entered was £18,000. That representation was untrue, and fraudulently untrue, and gave the plaintiff a perfect right to disaffirm the contract unless he had lost that right by his own conduct. It was a question entirely for the jury whether the plaintiff disaffirmed the contract within a reasonable time having regard to all the circumstances. Portion of those circumstances consisted of a very generous attempt on his part to get the defendant to acknowledge the true relation between them as it existed in fact, which the defendant declined to do. Then the plaintiff, within a reasonable time as the jury found—and their finding cannot be displaced,—took the more drastic course which he was entitled to take, of obtaining justice, by disaffirming the contract.

Rich J.

I agree.

Appeal dismissed with costs.

Solicitor, for the appellant, W. Arnott.

Solicitors, for the respondent, Allen, Allen & Hemsley.