Lysaght Bros and Co Ltd v Falk [1905] HCA 7

Lysaght Bros and Co Ltd v Falk [1905] HCA 7

Where an agent, to the knowledge of the contracting party, acts outside the scope of their authority and for personal or collusive benefit, evidence of those facts may be adduced under a general denial. Such a defence does not require special pleading as confession and avoidance, even if the facts alleged amount to fraud. If the respondent could prove that the agent had authority, the appellants might counter by proving want of authority and the respondent's knowledge, thus vitiating the contract.

Parties
Appellant: Lysaght Bros. & Co. Ltd.; Respondent: Faux
Jurisdiction
Australia
Judgment Date
29 March 1905
Procedural Posture
Appeal / Judgment on Appeal From the Supreme Court of New South Wales
Outcome
Appeal allowed
Legal Topics
Authority of Agent, Principal and Agent Liability, Fraud and Collusion in Contract Formation, Pleading and Procedure – Confession and Avoidance, Admissibility of Evidence Under General Issue
Contract Law Agency Law Civil Procedure Authority of Agent Principal and Agent Liability Fraud and Collusion in Contract Formation Pleading and Procedure – Confession and Avoidance Admissibility of Evidence Under General Issue

Case Brief

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Parties

Lysaght Bros. & Co. Ltd.

Appellant

Faux

Respondent

Procedural Posture

Appeal / Judgment on Appeal From the Supreme Court of New South Wales

Legal Issues

  1. 1 Whether evidence of fraud and lack of authority can be given under a general denial (non assumpsit) in defence to a contract action
  2. 2 Whether such evidence must be specially pleaded as fraud (confession and avoidance) under procedural rules
  3. 3 Whether alleged contract was binding on the appellants given agent's lack of bona fide authority known to respondent

Ratio Decidendi

Where an agent, to the knowledge of the contracting party, acts outside the scope of their authority and for personal or collusive benefit, evidence of those facts may be adduced under a general denial. Such a defence does not require special pleading as confession and avoidance, even if the facts alleged amount to fraud. If the respondent could prove that the agent had authority, the appellants might counter by proving want of authority and the respondent's knowledge, thus vitiating the contract.

Court Disposition

Appeal allowed

Orders

  • Order appealed from discharged
  • Respondent to pay the costs of the motion for a rule nisi and of the appeal