Keogh v Dalgety and Company Limited [1916] HCA 69

Keogh v Dalgety and Company Limited [1916] HCA 69

By majority, the Court held the defendants stood as agents to the plaintiff in negotiating the loan, owed the conventional duties of agents including disclosure and accountability, and were liable to account to the principal for the full amount of the secret commission (£2,500) received from the mortgagee, to be paid directly to the plaintiff rather than merely credited in account. Minority: The fiduciary obligation did not extend so far as to forbid the defendants from making a separate agreement with the lender; at most, only actual profit was recoverable and only by way of accounting.

Parties
Plaintiff, Appellant: William Monahan Keogh; Defendant, Respondent: Dalgety & Company Limited
Jurisdiction
Australia
Judgment Date
27 October 1916
Procedural Posture
Appeal / Judgment on Appeal From the Supreme Court of Victoria
Outcome
Appeal allowed (by majority)
Legal Topics
Fiduciary Duties, Secret Profit, Agent's Duty of Disclosure
Equity Agency Law Commercial Law Fiduciary Duties Secret Profit Agent's Duty of Disclosure

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Parties

William Monahan Keogh

Plaintiff, Appellant

Dalgety & Company Limited

Defendant, Respondent

Procedural Posture

Appeal / Judgment on Appeal From the Supreme Court of Victoria

Legal Issues

  1. 1 Whether Dalgety & Company Limited, as agent, was liable to account to Keogh for a secret commission received from the lender in procuring a loan.
  2. 2 Whether the sum received should be paid directly to Keogh or merely accounted for in adjustment of accounts between the parties.

Ratio Decidendi

By majority, the Court held the defendants stood as agents to the plaintiff in negotiating the loan, owed the conventional duties of agents including disclosure and accountability, and were liable to account to the principal for the full amount of the secret commission (£2,500) received from the mortgagee, to be paid directly to the plaintiff rather than merely credited in account. Minority: The fiduciary obligation did not extend so far as to forbid the defendants from making a separate agreement with the lender; at most, only actual profit was recoverable and only by way of accounting.

Court Disposition

Appeal allowed (by majority)

Orders

  • Order of Supreme Court varied to direct that Dalgety & Co. Ltd. pay £2,500 to the plaintiff.
  • Interest reserved for further consideration.