Maurice v Goldsbrough Mort & Co Ltd - [1939] UKPCHCA 1

Bailment-Goods consigned for sale on commission-Insurance by bailee-Destruction

of goods before sale-Insurance moneys-Deduction by bailee of service charges and commission-Insurable interest-Subject matter of insurance.

The appellant, a wool grower, consigned certain wool to the respondent for sale upon terms entitling the respondent to payment for services rendered by it preparatory to the sale of the wool and to commission upon any sale. The Lord Russell respondent insured the wool, together with wool owned by itself and other Lord Macmillan, growers, against loss by fire under a policy expressed to be "on interest as more particularly described in schedule attached hereto," the interest being described in the schedule as follows: " On merchandise the assured's own property or held by them in trust or on commission for which they may liable in the event of loss or damage by fire." After some only of the pre- paratory services had been rendered by the respondent, and prior to the sale of the wool, it was destroyed by fire. The respondent received from the insurance company in respect of the appellant's wool a sum representing its gross selling price. From this sum it deducted an amount representing its full charge for all preparatory services, and an amount representing commission upon sale, and accounted to the appellant for the balance.

Held that the respondent was not entitled to deduct from the insurance moneys commission on sale or charges for preparatory services beyond those performed before the destruction of the wool.

Decision of the High Court: Goldsbrough Mort &Co. Ltd. v. Maurice, (1937) 58 C.L.R. 773, reversed, and the decision of the Supreme Court of New South Wales (Full Court): Maurice v. Goldsbrough Mort &Co. Ltd., (1937) 37 S.R. (N.S.W.) 76; 54 W.N. (N.S.W.) 16, restored.

61 CLR 368

APPEAL from the High Court to the Privy Council.

This was an appeal by special leave from the decision of the High Court of Australia in Goldsbrough Mort &Co. Ltd. v. Maurice 1. reversing, by a majority, a decision given by the Supreme Court of New South Wales (Full Court) 2, in favour of the appellant.

The question in the appeal was: What were the rights of the appellant as wool grower and the respondent as wool-broker in respect of moneys collected by the broker under insurance policies effected by it on the appellant's wool, which the respondent held in its store at the time when it was destroyed by fire ?

The respondent, as broker, claimed to make certain deductions, partly for expenses incurred and services rendered by it before the fire, and partly for prospective profits, such as commission on sale lost by it in consequence of the fire, and for charges OF expenses which but for the fire would have been earned Or expended and would have been deductible from the proceeds if the wool had been sold in the normal course instead of being destroyed.

Wilfrid Barton K.C. and Kenelm Preedy, for the appellant. A. T. Miller…

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.

Keep reading for free

Create a free CaseChat account to read Maurice v Goldsbrough Mort & Co Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [1939] UKPCHCA 1
Decision Date: 5 May 1939

CaseChat Overview and Summary

In the case of Maurice v Goldsbrough Mort & Co Ltd, the appellant, a wool grower, consigned his wool to the respondents, wool-brokers, for sale. The wool was held by the respondents at their store when it was destroyed by fire. The respondents insured the wool, along with other wool held by them, against loss or damage by fire. After the fire, the respondents received insurance moneys for the wool and sought to deduct certain charges and commission from the amount before accounting to the appellant. The High Court of Australia initially found in favour of the respondents, allowing them to deduct all charges and commission, but this decision was appealed to the Privy Council.

The central legal issue was whether the respondents were entitled to deduct from the insurance moneys commission on sale or charges for preparatory services beyond those performed before the destruction of the wool. The Privy Council held that the respondents were not entitled to make such deductions. The policy did not insure profits, and the insurable interest was in the wool itself, not in any prospective profits. The policy covered the wool as the assured's own property or held by them in trust or on commission, but it was clear that the policy did not insure profits. The respondents had an insurable interest in their prospective profits on the wool, but this interest was in a different subject matter, namely, profits, and not in the wool itself.

The Privy Council further held that the principle of indemnity, which is the fundamental principle of insurance law, was not infringed by the Supreme Court's decision. Insurance does not necessarily give a perfect indemnity, and the policy provided no indemnity for the loss of commission and charges. The policy covered the agreed value of the wool, and it was immaterial what costs went into that value. The apportionment of the insurance moneys between the parties depended on their respective rights of property in the wool at the date of the fire.

The Privy Council allowed the appeal and restored the decision of the Supreme Court of New South Wales. The appellant was awarded the costs of the appeal and the costs in the Australian courts. The respondents were not entitled to deduct any charges or commission beyond those incurred or performed before the destruction of the wool.

Orders