IVI Pty Ltd v Baycrown Pty Ltd

IVI Pty Ltd, the appellant, engaged in negotiations with Baycrown Pty Ltd, the respondent, concerning the sale of land. The draft contract specified a firm of solicitors as the "buyer's solicitor" and included a reference to a lawyer employed by that firm. Despite the firm being contacted by the appellant's solicitors regarding modifications to the draft contract, there was no direct communication between the solicitors themselves while negotiations were underway. Both parties agreed on the terms of the contract of sale, which was subsequently signed by a representative of the appellant. However, the appellant later attempted to send an email to the solicitors named in the draft contract to revoke the offer to sell, without the respondent's knowledge. The respondent had already faxed an acceptance of the offer prior to becoming aware of the email's contents.

The primary legal issue before the court was whether the solicitors had the authority to accept a notice of revocation on behalf of the client without explicit authorisation. Additionally, the court considered whether the respondent had, by its conduct, led the appellant to believe that the named solicitors had the ostensible authority to accept a notice of revocation on its behalf. This case required a nuanced examination of agency principles, particularly the concept of ostensible authority and the circumstances under which it may be inferred.

The court examined several precedents to determine the applicability of ostensible authority in the context of accepting a notice of revocation. It concluded that the solicitors did not possess the authority to accept such a notice without explicit authorisation from the client. The court also found that the respondent had not acted in a manner that would lead the appellant to reasonably believe that the solicitors had the authority to accept a notice of revocation. The appeal was dismissed with costs.