Taylor v Smith

The appeal concerned Henry Norbert Taylor (appellant) and Sydney Wentworth Smith (respondent), arising from a property sale where Taylor acted as the respondent's agent. The dispute centred on a sum of £500, which the appellant retained from the sale proceeds of £4,500, significantly exceeding the usual commission. The respondent counterclaimed for this amount, arguing it was money had and received by the appellant to his use. The case was heard in the County Court, appealed to the Supreme Court of Victoria, and subsequently appealed to the High Court of Australia.

The High Court was required to determine two primary legal issues. Firstly, whether the respondent was bound by a written document authorising the appellant to retain any excess over £4,000 as bonus or commission, given the respondent's claim of misrepresentation and inability to read the document without his glasses. Secondly, the Court had to consider whether, even if the payment of the £500 was unauthorised, the respondent had subsequently ratified this payment, thereby precluding recovery.

A majority of the High Court, comprising Knox C.J., Higgins, Rich, and Starke JJ., affirmed the decision of the Supreme Court of Victoria. They held that the respondent was not bound by the written document due to the circumstances of its signing, which supported a plea of *non est factum*. The Court found that the respondent was induced to sign by a misrepresentation that it was a mere authority to sell, and he was unable to read it without his spectacles. Furthermore, the majority concluded that the respondent had not ratified the payment of £500 by his solicitor, Mr. Serle, to the appellant. They reasoned that the respondent lacked full knowledge of the material circumstances surrounding the payment, particularly the fact that Serle made the payment under a mistake of fact. Consequently, the respondent could recover the sum from the appellant in an action for money had and received, following the principle in *Holt v. Ely*. Isaacs J. dissented, finding that the respondent's conduct, including his response to the solicitor's account and subsequent actions, constituted ratification of the payment.

The appeal was dismissed with costs. The High Court upheld the Supreme Court's decision, meaning the respondent was entitled to recover the £500 from the appellant.