Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Bennett v Strauss [2016] NSWCA 324 Hearing dates: 31 October 2016 Date of orders: 24 November 2016 Decision date: 24 November 2016 Before: McColl JA at [1]
Sackville AJA at [2]
Barrett AJA at [5]Decision: 1. Appeal dismissed.
2. The appellant pay the respondents’ costs of the appeal.Catchwords: CONTRACTS – general contractual principles – formation of contract – principal and agent – ratification – plaintiff alleged that a daughter made a contract representing that she acted with the authority of her mother – finding of lack of authority not challenged – whether circumstances such that subsequent acts of mother could constitute ratification – not shown that daughter’s conduct was contractual in nature – requirements for ratification not met Legislation Cited: Contracts Review Act 1980 (NSW)
Conveyancing Act 1919 (NSW), s 54ACases Cited: Black v Smallwood (1966) 117 CLR 52; [1966] HCA 2
Bolton Partners v Lambert (1889) 41 Ch D 295
Cavenagh Investment Pte Ltd v Kaushik Rajiv [2013] SGHC 45; [2013] 2 SLR 543
City Bank of Sydney v McLaughlin (1909) 9 CLR 615; [1909] HCA 78
Commissioner of Taxation (Cth) v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520; [2000] HCA 35
Davison v Vickery’s Motors Ltd (1925) 37 CLR 1; [1925] HCA 47
Dempsey v Chambers, 154 Mass 330, 28 NE 279 (1891)
Firth v Staines [1897] 2 QB 70
Foster v Bates (1843) 12 M & W 226; 152 ER 1180
Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68; [1907] HCA 38
Hunter v Parker (1840) 7 M & W 322; 151 ER 789
Jones v Peters [1948] VLR 331
Keighley, Maxsted and Co v Durant [1901] AC 240
McLean Bros & Rigg Ltd v Grice (1906) 4 CLR 835; [1906] HCA 1
National Australia Bank Ltd v Dionys [2016] NSWCA 242
National Oilwell (UK) Ltd v Davy Offshore Ltd [1993] Lloyd’s Rep 583
Phoenix Assurance Co Ltd v Berechree (1906) 3 CLR 946; [1906] HCA 6
Quarante Pty Ltd v The Owners Strata Plan No 67212 [2008] NSWCA 258
Saunderson v Griffiths (1826) 5 B & C 909; 108 ER 338
Spiro v Lintern [1973] 1 WLR 1002
Taylor v Smith (1926) 38 CLR 48; [1926] HCA 16
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270
Watson v Davies [1931] 1 Ch 455
Watson v Swann (1862) 11 CB (NS) 756; 142 ER 993
Wilson v Tumman (1843) 6 Man & G 236; 134 ER 879Texts Cited: F R Mecham, “The effect of ratification between the principal and the other party” (1906) 4 Michigan Law Review 269
T G Pappas, “Rescission by third party prior to principal’s ratification of agent’s unauthorized action” (1948) 2 Vanderbilt Law Review 100Category: Principal judgment Parties: Ian Bennett (Appellant)
Marguerita Strauss (First Respondent)
Lara Hartmann (Second Respondent)Representation: Counsel:
J Priestley…
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- AGLC
- Bennett v Strauss [2016] NSWCA 324
- Case
- [2016] NSWCA 324
- Decision Date
CaseChat Overview and Summary
In *Bennett v Strauss*, the plaintiff alleged that a contract had been formed with the defendant mother, based on the actions of her daughter who purported to act with the mother's authority. The finding that the daughter lacked actual authority to enter into the contract was not challenged on appeal. The central dispute concerned whether the mother's subsequent conduct could constitute ratification of the purported contract.
The Court of Appeal was required to determine whether the circumstances were such that the mother's subsequent acts could be construed as ratification of the daughter's actions, thereby giving rise to a binding contract. This involved an examination of the requirements for ratification under general contractual principles, specifically whether the daughter's conduct was contractual in nature and whether the mother's subsequent actions met the legal threshold for ratification.
The Court reasoned that for ratification to occur, the initial act must be done on behalf of the principal, and the principal must subsequently affirm that act with full knowledge of the material facts. In this instance, it was not demonstrated that the daughter's conduct was contractual in nature, nor was there sufficient evidence to establish that the mother's subsequent actions amounted to an affirmation of a contract. Consequently, the requirements for ratification were not met.
The appeal was dismissed, and the appellant was ordered to pay the respondents' costs of the appeal.
The Court of Appeal was required to determine whether the circumstances were such that the mother's subsequent acts could be construed as ratification of the daughter's actions, thereby giving rise to a binding contract. This involved an examination of the requirements for ratification under general contractual principles, specifically whether the daughter's conduct was contractual in nature and whether the mother's subsequent actions met the legal threshold for ratification.
The Court reasoned that for ratification to occur, the initial act must be done on behalf of the principal, and the principal must subsequently affirm that act with full knowledge of the material facts. In this instance, it was not demonstrated that the daughter's conduct was contractual in nature, nor was there sufficient evidence to establish that the mother's subsequent actions amounted to an affirmation of a contract. Consequently, the requirements for ratification were not met.
The appeal was dismissed, and the appellant was ordered to pay the respondents' costs of the appeal.
Orders
Orders of the court
1. Appeal dismissed.
2. The appellant pay the respondents’ costs of the appeal.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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