Case: Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co-operative Assurance Co of Australia Ltd [1931] HCA 53 ; (1931) 46 CLR 41
Outcome: cited
Before identifying those factors which have been found to be of varying significance as indicators of, variously, agency or sale, it is appropriate, first, to refer generally to a number of relatively uncontroversial propositions of agency law. In so doing, I repeat for convenience in part what I said in South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611 at [131] ff. (1) Those definitions of agency that take the principal and agent relationship itself as their particular focus: contrast International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co [1958] HCA 16 ; (1958) 100 CLR 644 at 652; emphasise that that relationship "can only be established by the consent of the principal and the agent": Garnac Grain Co Inc v HMF Faure &amp; Fairclough Ltd [1968] AC 1130 at 1137; see, for example, Bowstead &amp; Reynolds at [1-001]; Restatement of Agency, Third , SS1.01; 3 Am Jur 2d, "Agency", SS15. (2) The consents so given need not necessarily be to a relationship that the parties understand, or even accept, to be that of principal and agent: Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552 at 587. It is sufficient if "they have agreed to what amounts in law to such a relationship": Garnac Grain Co Inc at 1137; Nichols v Arthur Murray Inc 56 Cal Rptr 728 (1967) at 730-731; Restatement of Agency, Second, SS1 comment. (3) Though there is no uniformly agreed definition of agency: see the discussion in Fisher, Agency Law at 8-11 (2000); the two whose authoritative character has resulted in their wide citation are those of the Restatement of Agency, Third, SS1.01 and of Bowstead &amp; Reynolds at [1-001] (the latter being based upon the Restatement provision). The Restatement's definition is that: SS1.01 Agency is the fiduciary relationship that arises when one person (a "principal") manifests assent to another person (an "agent") that the agent shall act on the principal's behalf and subject to the principal's control, and the agent manifests assent or otherwise consents so to act. Bowstead &amp; Reynolds' definition is that: [1-001] Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act or so acts pursuant to the manifestation. The necessary consents apart, the required characteristic of the relationship is that one party acts on behalf of, and is authorised to act on behalf of, the other. This "representative" characteristic must be able to be discerned in the factual relation of the parties: Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co-operative Assurance Co of Australia Ltd [1931] HCA 53 ; (1931) 46 CLR 41 at 48-50. (4) Though the characteristic of "control" is accentuated in the Restatement's definition: see comment f to SS1.01; its significance is far more muted in Anglo-Australian law: see South Sydney District Rugby League Football Club at [136]. Thus, it is commented in Bowstead &amp; Reynolds (at [1-017]) that: It might seem therefore that control is not a significant feature of the internal relationship, except in so far as the relationship by definition posits a person, the principal, giving authority, and the agent's duty to obey instructions if he wishes to continue as agent. Nevertheless, if the principal gives up all control of his supposed agent the relationship is only doubtfully one of agency. I will return to the significance of the presence or absence of control later in these reasons. 185 The evidence, in my view, simply cannot sustain a conclusion that Farmlink acted on TVO's behalf in a "representative": cf Bowstead &amp; Reynolds at [1-001]; Colonial Mutual Life Assurance Society at 48-50; or "fiduciary": cf Restatement of Agency , Second , SS1.01; capacity in selling its cherries. Farmlink was a purchaser buying for the purposes of resale. It is significant in this that (i) the parties agreed in advance the prices at which TVO would sell its cherries they were not simply indicative prices (I will refer below to the significance in this of purchase discounts); (ii) while the consignments were into markets with which TVO had some, albeit rudimentary knowledge, they were simply two of the overseas markets into which TVO cherries were consigned by exporters in the 2003/2004 season; (iii) Farmlink, in contrast, was knowledgeable about, and experienced in, those two markets at that time: cf Witt at 18-19; (iv) TVO did not assume responsibility for the export or the costs associated with the export this was at Farmlink's expense: cf Witt at 18-19 and Farmlink, not TVO, bore responsibility for misadventures happening to the cherries after delivery to it; (v) TVO was not in a position to exercise practical control over Farmlink (other than by refusing orders); (vi) TVO was unaware of Farmlink's price; (vii) while Mr Hannaford doubtless understood that Farmlink would obtain its own return on the sales (howsoever this was done), there was nothing unusual about his having no interest in that matter as his relationship with Farmlink did not otherwise point to an agency relationship: cf Mercantile International Group plc at [5] and [36]; and (ix) TVO happened to know the Singapore buyer was a company with which Mr Koh was associated but did not know the identity of the Hong Kong buyer. In short, having regard to the context in which they dealt with each other, the relationship they formed in the making and filling of orders was that of seller and buyer for resale. The contrary inference that TVO appointed Farmlink its agent for sale is neither a reasonable, nor the most probable, deduction from the known facts.