Bunbury Foods Pty Ltd v National Bank of Australasia Ltd

Bunbury Foods Pty Ltd (the appellant) appealed to the High Court of Australia against a decision of the Supreme Court of Western Australia. The dispute concerned the appellant's liability to the National Bank of Australasia Ltd (the respondent) under a guarantee. The appellant argued that it was not liable under the guarantee due to alleged misrepresentations made by the respondent's agent concerning the financial position of the principal debtor.

The High Court was required to determine whether the respondent was vicariously liable for the alleged misrepresentations of its agent, and if so, whether those misrepresentations vitiated the guarantee. Specifically, the court had to consider whether the agent's actions in making the representations were within the scope of their employment or authority, and if the representations were indeed misleading or deceptive.

The High Court held that the agent's representations, even if made, were not made in the course of their employment or within the scope of their authority. The court applied the principles of vicarious liability, emphasizing that an employer is generally not liable for the unauthorised acts of an employee unless those acts are so closely connected with authorised acts that they can be regarded as an unauthorised mode of doing something authorised. In this instance, the representations were found to be outside the scope of the agent's duties and therefore the respondent was not vicariously liable. Consequently, the appellant's defence based on misrepresentation failed.