Young v Tibbits

In an action brought in the Supreme Court of New South Wales, the plaintiffs, commission agents, sought to recover commission on the sale of the defendants' property, alleging they had been employed as agents by the defendants. The defendants denied any direct contractual relationship with the plaintiffs. The case proceeded to trial before a judge and jury, resulting in a verdict for the plaintiffs. A subsequent motion by the defendants to set aside the verdict was dismissed by the Full Court, leading to the present appeal to the High Court.

The central legal issue before the High Court was whether there was sufficient evidence of a contract of agency between the plaintiffs and the defendants to be submitted to a jury. Specifically, the court had to determine if the plaintiffs' actions and communications, particularly a letter dated 30 May 1910, and the defendants' subsequent silence, could reasonably support an inference of direct employment and an agreement to pay the plaintiffs the full commission.

The majority of the High Court, comprising Griffith C.J. and Barton J., found that the evidence did not support a finding of direct employment. Their reasoning was that the plaintiffs had been engaged by another agent of the defendants, Broughton & Co., on terms that they would receive half the commission earned by Broughton & Co. The plaintiffs' letter of 30 May, which asserted they were dealing directly with the defendants and would not recognise Broughton & Co., was considered to be contrary to the known facts and their prior engagement as sub-agents. The court applied the principle that silence is not evidence of an admission unless circumstances make it more probable that the statement would have been denied if untrue. They concluded that the defendants' silence in response to the plaintiffs' letter did not constitute evidence of a direct agency agreement, as the plaintiffs were aware of the true agency arrangements. Isaacs J. dissented, finding that there was evidence from which a jury could infer a direct contract.

Consequently, the High Court reversed the decision of the Supreme Court of New South Wales, ordering that the verdict for the plaintiffs be set aside and a nonsuit entered for the defendants.