Horne v Barber [1920] HCA 33; (1920) 27 CLR 494 (17 May 1920)

HIGH COURT OF AUSTRALIA

Horne and Another Plaintiffs, Appellants; and Barber Defendant, Respondent.

H C of A

On appeal from the Supreme Court of Victoria.

17 May 1920

Knox C.J., Isaacs, Gavan Duffy and Rich JJ.

Cussen and Owen Dixon, for the appellants.

Pigott (with him Lowe), for the respondent.

The following judgments were read:—

May 17

Knox C.J. and

Gavan Duffy J.

This is an appeal from the decision of Mann J.[1] directing judgment to be entered for the defendant. The ground upon which the learned Judge based his decision was that the contract sued on, which he found to have been made in fact, was void as being contrary to public policy within the principle governing the decision of this Court in Wilkinson v. Osborne[2]. The facts of the case now before us are sufficiently set forth in the judgment under appeal, and it is unnecessary to repeat them here. In our opinion they would have justified the learned Judge in finding that the parties to the contract intended that Mr. Deany should use his political influence in order to bring about the sale; his task under the contract was to induce the Minister and the members of the Board to approve of a purchase at the highest possible price. It is sufficient to say that the learned Judge was of opinion that both parties to the contract intended that the services contracted for were to be rendered by Mr. Deany, a member of the Parliament of Victoria; that the object of the employment of the plaintiffs was the sale of the defendant's property to the Government of Victoria; that Mr. Deany had a pecuniary interest in the transaction, being entitled to share in the commission payable to the plaintiffs; and that the services rendered by Mr. Deany were an effective cause of the sale. We think it unnecessary to determine whether Mr. Deany undertook to use his position as a member of Parliament for the purpose of procuring a sale of the defendant's land. So long as he remained a member of Parliament he could not, in our opinion, effectively divest himself of that character in dealing with the Minister and the Board, and he in fact made no attempt to do so. The Minister and the members of the Board must have known that he was a member of the Legislative Assembly for the district in which the defendant's land was situated; the Minister was never informed that he was the defendant's agent, and the members of the Board did not know that fact until shortly before the completion of the sale. It is abundantly clear that the agreement sued on in this case afforded an inducement to Mr. Deany to misuse his position and influence as a member of Parliament for his own pecuniary gain as a commission agent, and was also calculated to hamper him in forming an unbiased judgment and in expressing a free and honest criticism on the transaction as an act of the Executive Government or its agents. It had, to adopt the words of Lord Lyndhurst in Egerton v. Brownlow[3], a tendency to interfere with the proper discharge of the duties of Mr. Deany as a member of Parliament, and was consequently opposed to the public good. As was pointed out in that case by Lord Truro[4], the law in such a case looks not to the probability of public mischief occurring in the particular instance, but to the general tendency of the transaction; and this aspect of the matter was emphasized by Lord Brougham in the same case, where he said[5]:—"The tendency is alone to be considered, and unless the possibility is so remote as to justify us in affirming that there is no tendency at all, the point is conceded. Gifts, bequests, conditions, contracts, are illegal from their tendency to promote unlawful acts, without regard to the amount of the inducement held out, or interest created, the position of the parties, or any other circumstances which go to affect the probability of the unlawful act being done."

We can see nothing in the circumstances proved in the present case to withdraw it from the operation of the principle governing the decisions in Egerton v. Brownlow[6] and Wilkinson v. Osborne[7], and in our opinion the decision of Mann J., and the reasons given by him for that decision, were correct.

Isaacs J.

Notwithstanding the very earnest arguments addressed to us by learned counsel for the appellants, this case appears to me to be quite clear. I entirely agree with the conclusions and the reasoning of Mann J. The principal authorities which must guide us in such a case as the present, I have stated in Wilkinson v. Osborne[8]; and the observations I there made I adhere to.

When a man becomes a member of Parliament, he undertakes high public duties. Those duties are inseparable from the position: he cannot retain the honour and divest himself of the duties. One of the duties is that of watching on behalf of the general community the conduct of the Executive, of criticizing it, and, if necessary, of calling it to account in the constitutional way by censure from his place in Parliament—censure which, if sufficiently supported, means removal from office. That is the whole essence of responsible government, which is the keystone of our political system, and is the main constitutional safeguard the community possesses. The effective discharge of that duty is necessarily left to the member's conscience and the judgment of his electors, but the law will not sanction or support the creation of any position of a member of Parliament where his own personal interest may lead him to act prejudicially to the public interest by weakening (to say the least of it) his sense of obligation of due watchfulness, criticism, and censure of the Administration. It is not a question of whether there was a contract to use his political interest or influence, or of whether he posed before the Minister and the Board as a member or a land-agent. It is, in this case, whether the services claimed for were services which were understood to be, or to include, those of a person whose public duty was inconsistent with the private transactions which are the subject of the claim. I do not say the question might not be even wider, but that is all that is necessary in this case, having regard to the findings of fact which cannot be displaced. In the present instance it was, and is, the clear public duty of Deany to call the Government to account if, in his opinion, the Minister decided that an extravagantly high price was to be given for the property. But, on the other hand, the member's private interest, according to the ordinary impulses of human nature, would, of course, lead him to try to make the price as high as possible. The higher the price, the greater his commission; the higher the price, the better standing would he have with his employers; the higher the price, the better for his private client, and the greater his chance for future business. In short, private advantage pulled him one way; public duty might, at any moment, require him to challenge the whole transaction. How can it be doubted he was assuming antagonistic positions? And, if he was, the law declines to recognize any but the public obligation. It refuses to recognize any claim for private advantage. If it did, it would be as inconsistent as the person invoking it. Whether the price asked was a fair price or not in this particular case, is quite immaterial; the law will not inquire. It discountenances such a transaction because it is inherently dangerous that a man in such a position should place himself in a situation of temptation. The bargain was a void one; the judgment appealed from was sound, and the appeal should be dismissed.

Rich J.

Members of Parliament are donees of certain powers and discretions entrusted to them on behalf of the community, and they must be free to exercise these powers and discretions in the interests of the public unfettered by considerations of personal gain or profit. So much is required by the policy of the law. Any transaction which has a tendency to injure this trust, a tendency to interfere with this duty, is invalid (cf. Hamilton v. Wright[9]). Courts of equity, in dealing with transactions between private persons, have always avoided as contrary to the policy of the law purchases by trustees from themselves. "Without any consideration of fraud, or looking beyond the relation of the parties, that contract is void" (Morse v. Royal[10]). This applies with greater force to public affairs and the obligations and the responsibility of the trust towards the public implied by the position of representatives of the people. In this case the Court is not concerned with the intention of the parties. It does not "look beyond" Deany's position. His public duty and private interest were in conflict, and any other facts are immaterial. No claim can be enforced by the appellants founded on a bargain involving their employment of Deany in such a position of conflict of public duty and private interest.

I agree that the appeal fails.

Appeal dismissed with costs.

Solicitors for the appellants, Doyle & Kerr.

Solicitors for the respondent, J. M. Smith & Emmerton.

[1] (1919) V.L.R., 553; 41 A.L.T., 55.

[2] [1915] HCA 92; 21 C.L.R., 89.

[3] 4 H.L.C., at p. 162.

[4] 4 H.L.C., at p. 196.

[5] 4 H.L.C., at p. 174.

[6] [1853] EngR 885; 4 H.L.C., 1.

[7] [1915] HCA 92; 21 C.L.R., 89.

[8] 21 C.L.R., at pp. 102, 105.

[9] [1842] EngR 934; 9 Cl. & Fin., 111, at p. 123.

[10] 12 Ves., 355, at p. 372.