Dolphin v Harrison, San Miguel Proprietary Ltd

Harrison, San Miguel Proprietary Ltd (the respondents) brought an action against James Dolphin (the appellant) in the Supreme Court of Victoria seeking £125 for work and labour done or commission earned. The respondents, cork and general merchants, alleged that the appellant, a brewer, had requested them to find a purchaser for his brewery, either through a letter dated 25th September 1910 or impliedly from correspondence between the parties. The Supreme Court's Full Court found in favour of the respondents, holding that the appellant was bound to pay commission. The appellant appealed this decision to the High Court of Australia.

The central legal issue before the High Court was whether the correspondence between the parties established a contract of agency, whereby the appellant employed the respondents to introduce a purchaser for his brewery on terms that would entitle the respondents to a commission. Specifically, the court had to determine if the letters created an express or implied promise by the appellant to pay the respondents for their services in finding a buyer.

The High Court, in allowing the appeal, reasoned that the letters exchanged did not establish a contract of employment for agency. The respondents' initial letter inquired if the appellant was inclined to sell and asked for particulars to "make a sale," while also mentioning an inquiry they had for a small brewery. The appellant's reply stated he wanted £2,500 net for the business and would not sell if he could not achieve that amount, adding that any further particulars could be obtained by applying. The court interpreted the appellant's response as a clear indication that he required £2,500 net, meaning exclusive of any commission, and not as an acceptance of an offer to act as an agent for a commission. Therefore, the court found no promise by the appellant to pay commission for the introduction of a purchaser.

Consequently, the High Court reversed the decision of the Supreme Court of Victoria. The appeal was allowed, the judgment of the Supreme Court was discharged, and judgment was entered for the appellant (the defendant) with costs of the action, including the costs of the reference to the Full Court.