Daley v Brooks; Daley v Johnson (No 2)

[1991] TASSC 179

Serial No B65/1991
List “B”

COURT:                 SUPREME COURT OF TASMANIA

CITATION:            Daley v Brooks; Daley v Johnson (No 2) [1991] TASSC 179; B65/1991

PARTIES:  DALEY, Elaine Frances
  v

BROOKS, Phillip Archie

DALEY, Elaine Frances
  v
  JOHNSON, Reginald W
  WEBSTER LTD

FILE NOS:  3174/1985, 600/1988
DELIVERED ON:  1 November 1991
JUDGMENT OF:  Cox J

Judgment Number:  B65/1991
Number of paragraphs:  

Serial No B65/1991
File Nos  3174/1985

600/1988

ELAINE FRANCES DALEY v PHILLIP ARCHIE BROOKS
ELAINE FRANCES DALEY v REGINALD W JOHNSON and WEBSTER LTD (NO 2)

REASONS FOR JUDGMENT  COX J

1 November 1991

1. I have already given judgment for all defendants in these two actions against the plaintiff and ordered her to pay their costs, but as foreshadowed in my reasons for judgment (see B44/1991), Mr Johnson seeks an order that Webster Ltd indemnify him for all costs as between solicitor and client incurred by him in the defence of the action brought against him. This claim was initiated by a notice of contribution and indemnity between the co–defendants.

1. Mr Blow, on behalf of Mr Johnson, submitted that his client is entitled to such indemnity as a matter of contract, it being the duty of an employer implied by the contract of service that he indemnify the employee against all liabilities and losses reasonably incurred by the latter in the execution of his authority.

1. Mr O'Farrell, on behalf of Webster Ltd, did not dispute the principle advanced by Mr Blow but contended that Mr Johnson, having commenced the transaction not as employee or agent of his employer, Webster Ltd, but merely as a go between, never acted within the scope of his authority and his acts, even when he performed them subjectively intending to act on behalf of Webster Ltd and/or purporting to do so, were never ratified by his employer.

1. I have found that Mr Johnson had in the past been authorised by his employer to conduct sales of horses and that his authority was never revoked. He did initially intend to act only as a gratuitous go between, but once the need for veterinary inspection and for special arrangements concerning payment had arisen, he determined to involve his employer in the transaction and to claim a commission on its behalf. His evidence, which I accept, was that on the afternoon of Wednesday 25 September 1985, while driving to Devonport to see Mr Brooks, he decided that his employer should be remunerated for his work by way of commission.

1. It was from this point of time on that the plaintiff claims Mr Johnson did the acts or made the omissions which were said by her to give rise to a liability to her in contract and tort. I am satisfied that as at that time Mr Johnson had ceased to act as a gratuitous go between and was acting with the authority of his employer. He had the power to act as his own man or to clothe his actions with the authority of Webster Ltd He did not need to seek any approval from the company to such a change in role. He was invested with authority to act as agent for the company in the sale of horses, and once he determined to act in that capacity, even though it might have been in the course of a transaction rather than at its outset, his actions were clothed with the company's actual authority. Questions of ratification do not arise in my view.

1. Mr O'Farrell stressed that the company's procedures were not followed and it was not given documentary evidence of the transaction as one entitling it to commission, but these are all factors which argue for a finding that Mr Johnson was never acting as agent for Webster Ltd but was acting either gratuitously or for himself. I weighed those factors when making my findings but was satisfied that Mr Johnson was acting for Webster Ltd at the time, that he did advise the clerks and manager, Mr Ogilvie, of the transaction (although not of its details), and that his failure to adequately record it and his decision to by–pass the usual accounting system were due to poor clerical practice on his part and to the exigencies of the situation.

1. In these circumstances I am satisfied that he is entitled to the indemnity sought. His own actions, as I have said, are not above reproach but it was not argued that in the exercise of my discretion I should deny him his costs or some of them by reason of his failure to keep his employer better informed.

1. I order that, subject to Mr Johnson by his counsel undertaking to take all reasonable steps if so requested by Webster Ltd to recover his costs from the plaintiff and to account therefor to Webster Ltd, that company pay the costs of Mr Johnson of and incidental to the action in which he is a party, and to the proceedings between the defendants. I direct that such costs be taxed on a solicitor and client basis.