Angove's Pty Ltd v Bailey

This case concerns an appeal brought by Angove's Pty Ltd, an Australian winemaker, against a decision of the Court of Appeal which found that D&D Wines International Ltd, the liquidators of Angove's appointed agent and distributor in the UK, had an irrevocable authority to collect outstanding invoices on Angove's behalf. The court was required to determine whether the authority of an agent can be irrevocable and whether the receipt of money, when the recipient knows that imminent insolvency will prevent them from performing the corresponding obligation, can give rise to liability to account as a constructive trustee. The Supreme Court held that the authority of an agent may be revoked by the principal, even if it is agreed by their contract to be irrevocable. The revocation is effective to terminate the agent's authority, but gives rise to a claim for damages. The main exception to the general rule is the case where the agent has a relevant interest of their own in the exercise of their authority. The court found that the authority of D&D Wines was not irrevocable as it was not intended to secure a financial interest of the agent. The Supreme Court also held that the receipt of money by an agent, when the agent knows that imminent insolvency will prevent them from performing the corresponding obligation, cannot give rise to liability to account as a constructive trustee. The court found that the money collected by D&D Wines was not held in trust for Angove's and was instead part of the insolvent estate. The Supreme Court allowed the appeal and declared that the fund representing the proceeds of the invoices is payable to Angove's.