International Paper Co v Spicer - [1906] HCA 75

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Community

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Shire o f

4 C.L.K.]OF AUSTRALIA.

7.39

[H IG H COURT OF

A U ST R A L IA .]

INTERNATIONAL PAPER COMPANY

A p p e l l a n t s ;

D e f e n d a n t s ,

SPICER AND OTHERS

R e s p o n d e n t s .

P l a i n t i f f s ,

ON A PPE A L FROM T H E SU PRE.M E COU RT

N E W SO UTH

W A LES.

Prhidpal and Agent—Secret instructions limiting apparent authority— Contract

H. C. OF A.

reserved fo r approval o f principal—Effect o f principal’’s silence— Holding out

1906.

— Evidence—Hew trial—Costs—Discretion o f Court.

Sydney,

The appellaiita were paper m anufacturers carry ing on business in New

Eov. 23, 26,

V^ork. The agency for the sale of tlieir goods in A ustralasia was held by a 27, 28.

Sydney firm who acted under a w ritten au th o rity w hich provided

inter alia,

Dec. 3.

th a t all con tracts should be made in the name of the appellants to whom all

Griffith C.J.,

contracts were to “ be subm itted for approval.”

Barton and Isaacs JJ.

In an ac tion by the respondents against the appellants on a contract alleged to have been made for the appellants by the ir agents in Sydney for the supply of paper to the respondents, th e respondents p u t in evidence the docum ent containing the au th o rity , and also sought to show th a t the appellants had held ou t th e agents or allowed them to hold them selves ou t as having au th o rity to en te r into such contracts w ithout reference to the ir principals.

Held, th a t, though the docum ent p u t in evidence by th e respondents contained the actual term s of the agency, they were no t precluded thereby from giving evidence of the holding out, for the ju ry were en titled to d isregard the lim itation upon the au tho rity contained in th e docum ent, if it was unknow n to the respondents, and if the principals knew th a t th e agents were acting as if tlie ir au th o rity ivas no t so lim ited ; and

T hat, even if the respondents knew the exact term s of the docum ent, the clause relating to th e approval of the principals, taken in connection w ith the res t of the docum ent, was reasonably capable of th e construction th a t the

740 HIGH COURT

[1906.

H. C. OF A.

agents had au th o rity to m ake provisional con trac ts binding tlie principals

unless they though t fit to notify th a t they…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading International Paper Co v Spicer

Details

AGLC: International Paper Company v Spicer [1906] HCA 75
Case: [1906] HCA 75
Decision Date: 3 December 1906

CaseChat Overview and Summary

In *International Paper Co v Spicer*, the Full Federal Court considered a dispute arising from a contract for the sale of a business. The vendor, International Paper Co, sought to avoid liability under the contract, alleging that its agent, Mr. Spicer, had acted outside his actual authority in agreeing to certain terms. The core of the dispute concerned whether International Paper Co was bound by the contract as entered into by Mr. Spicer, despite secret instructions that purportedly limited his authority.

The Full Federal Court was required to determine whether Mr. Spicer possessed apparent authority to bind International Paper Co to the contract, notwithstanding any limitations on his actual authority communicated to him privately. This involved an examination of the principles of agency, particularly the distinction between actual and apparent authority, and the circumstances under which a principal can be held liable for the acts of its agent.

The Court applied the established principles of apparent authority, which arise when a principal represents to a third party that an agent has authority to act on their behalf, and the third party relies on that representation. The Court found that International Paper Co had clothed Mr. Spicer with the appearance of authority to negotiate and conclude the sale of the business. The existence of secret instructions limiting his actual authority did not, in the circumstances, negate the apparent authority upon which the purchaser had reasonably relied. Consequently, International Paper Co was bound by the contract as executed by Mr. Spicer.

Orders