Wilh. Wilhelmsen Investments Pty Ltd v SSS Holdings Pty Ltd

Wilh. Wilhelmsen Investments Pty Ltd (the appellant) appealed to the Court of Appeal of the Supreme Court of New South Wales against a decision of the primary judge. The dispute concerned the appellant's liability for fraudulent conduct of its employee, Mr. Andrew, who had purported to enter into a contract for the sale of shares on behalf of the appellant with SSS Holdings Pty Ltd (the respondent). The respondent sought to enforce the contract, alleging that the appellant was bound by Mr. Andrew's actions.

The Court of Appeal was required to determine whether the appellant was vicariously liable in contract for the fraudulent conduct of its employee, Mr. Andrew. Specifically, the court considered whether the appellant was estopped by convention from denying that Mr. Andrew had the ostensible authority to enter into the share sale agreement on its behalf. This involved assessing whether there was a mutual assumption between the parties, arising from their course of dealings, that Mr. Andrew possessed such authority, and whether the respondent had reasonably relied on this representation to its detriment.

The Court of Appeal found that the primary judge had erred in finding the appellant liable. The court held that the doctrine of estoppel by convention required a mutual assumption of fact or law. While the respondent may have assumed Mr. Andrew had authority, there was no evidence that the appellant shared this assumption. The appellant's conduct did not create a situation where it was estopped from denying Mr. Andrew's authority. Furthermore, the court noted that the issue of vicarious liability in contract had not been pleaded by the respondent, and it was inappropriate for the primary judge to have made findings on this basis.

The appeal was allowed, and the orders of the primary judge were set aside.