1982 SILR 88

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 104 of 1981

BREWER SOLOMONS AGRICULTURE LIMITED

v

TUKE & ANOTHER

High Court of Solomon Islands
(Daly C.J)
Civil Case No. 104 of 1981

30th June 1982

Agency - constructive agency - burden of proof - ratifications.

Facts:

The Plaintiffs were approached to provide agricultural machinery for use by a group of farmers of which the Defendant was the leader. A public officer, N, dealt with the detailed matters. There was some evidence that the Defendant and his group approved of the machinery. N wrote a letter to the Plaintiff purporting to act on behalf of Defendant and his group ordering the machinery. The machinery was delivered and used by the Defendant and his group. It fell out of use and was left idle. The Plaintiffs sued for the purchase price.

Held:

1. As the Plaintiffs alleged a constructive agency they must make out a clear case on the balance of probabilities (Dicta in Pole v. Leask (1861 - 73) All E. Rep. 535 applied).

2. It was necessary to point to some conduct of the Plaintiffs which placed N. in a situation whereby his assertion that he was agent for the Defendant and his group was credible. It is only by his own act that a man can make another his agent. On the facts the Plaintiffs had established such conduct.

3. Further, by accepting and using the machinery, the Defendant had ratified the contract. Even if it was entered into without authority they were bound by it. Judgment for the Plaintiffs.

For Plaintiff: A. Nori
For Defendant: A. Radclyffe

Daly CJ: In this case the Plaintiffs (Brewer Solomons Agriculture Limited) originally claimed against two Defendants the sum of $3917.68 as being the price of goods sold and delivered to the two Defendants. The second named Defendant had the claim against him dismissed at an earlier stage in this trial. I must therefore now consider the claim against the first named Defendant Mr John TUKE. I shall simply call him the Defendant.

The Plaintiffs at the relevant time operated Ilu Farm upon which livestock were reared. They needed maize as feedstuff for this livestock and sought to obtain it from Solomon Islanders farming on Guadalcanal plains. One group approached on this basis was headed by the Defendant who farmed, in conjunction with others, a large area of land close to Ilu farm. At some time in 1978 what has been called the TUKE group started growing maize for the Plaintiffs. In that year too the TUKE group started to get advice from Mr Mark Nicholson. As Mr Nicholson played a key role in the events leading to this action, I must consider his position more closely. Mr Nicholson was employed by the Guadalcana1 Province as a Land Use Development Officer (the acronym for that office being therefore ‘LUD’ an evocative word in agricultural history). Mr Nicholson’s function was to advise a number of Solomon Islander farmers on the best way to develop their land, although there is a suggestion that he was particularly interested in the TUKE group with whom he hoped to take employment when his contract with the Government came to an end. Not having heard the evidence of Mr Nicholson, who has left the Solomon Islands, I am not in a position to form any view about this suggestion.

In 1978 the TUKE group were using equipment of the Plaintiffs to assist in growing maize. However they were conducting certain parts of the operation by hand which was too slow. Therefore it was proposed that special equipment be acquired. It seems likely that the initiative for the purchase came from Mr Nicholson. The machinery was to be acquired through the Plaintiffs who, as a big organisation with agency rights, could get a more favourable price. The official of the Plaintiffs who dealt with the maize growing was Mr Buckland-Pinnock and on 29th October 1979 he wrote to Mr Nicholson forwarding an invoice by way of estimate for the Howard AR 60 Rotary Hoe and Seedavator kit. Other machinery was discussed in the letter. The letter says "If you wish B.S.A. to get this for you please issue an order to that effect to me at Head Office". This passage was evidently as a result of a requirement of the Financial Controller of the Plaintiffs who wanted a signed order from the Lands Use Development Officer before the machinery would be ordered.

The evidence of Mr Buckland-Pinnock was that the machinery was discussed a number to times with Mr Nicholson and that at most, if not all, of these discussions the Defendant was present. The Defendant accepts that he knew about the machine as he had seen pictures of it before it was ordered. Mr Buckland-Pinnock goes rather further as he says that the machinery was discussed with the staff of the farm and that a vote was taken to pay for the machinery.

On the 2nd November 1979 a letter was sent on Guadalcanal Province notepaper to the "Non-Rice, Manager B.S.A.L." (Mr Buckland-Pinnock). It is Exhibit A in the case and reads as follows:

"Dear Arthur,

On behalf of John Tuke’s group could we order a Howard AR-60 Seedavator Unit plus a Husker-Sheller to come up from Australia as soon as possible?

The American Haban looks good but if we could get a P.t.o. driven model from Australia it may be cheaper. The model you chose is quite expensive and if possible we would like to keep the price down to $2,000 landed.

Please telex Australia for information on the seller.

Yours sincerely

Mark
MJL Nicholson"

There can no doubt that in Exhibit A. Mr Nicholson was purporting to act as agent for the TUKE group. Indeed nothing could be clearer.

As a result of that letter the Howard machinery was ordered on 9th November 1979 and arrived in Solomon Islands. It was assembled at Ilu Farm by the Plaintiffs and Mr Buckland-Pinnock demonstrated its use to the Defendant and his group.

The machinery did not have a very long useful life. The Defendant was very vague about how long it was with his group, his estimates ranging from one week to two months. Mr Buckland-Pinnock said it was used for twelve to fifteen months and then was delivered to him (he by then having left the employ of the Plaintiffs) for repairs. The machinery had, he said, been left standing idle for some five months and required $600 being spent upon it. Indeed the Defendant said it was only used by his group twice but was also used by another group.

These are the background facts to the case. There is no dispute that the amount claimed by the Plaintiffs is accurate; there is also no dispute that the machinery came to the Solomon Islands and, for some time at least, was in the possession of the Defendant and his group. The dispute is as to whether the Defendant, as head of his group is liable for the purchase price of that machinery.

The Plaintiffs’ case is put on two bases. First, it is said that in ordering the machinery in Exh. A. Mr Nicholson was in law an agent of the Defendant which means that he could, and did, bind the Defendant to a contract with the Plaintiffs when acting within the scope of his authority as an agent. Second, it is said that even were Mr Nicholson not an agent, the conduct of the Defendant on receipt of the machinery amounted to ratification of the contract which Mr Nicholson had purported to enter into on his behalf and thereafter the Defendant become bound by that contract. If the Plaintiffs succeed on either of these heads then the Defendant is liable to pay the contract price that is the amount claimed. The Defendant denies that Mr Nicholson was his agent or that he ratified the contract.

Let me consider each in turn. First, has it been established on the balance of probabilities that Mr Nicholson was in fact an agent of the Defendant? I accept entirely as was made clear by Lord Cranworth in his dissenting judgment in Pole v. Leask (1861 - 73) All E.R. Rep 535 at page 542G that where it is sought to make out a constructive agency or to extend on agency by implication then the burden of proof is upon the party relying upon the agency. I also accept that a clear case must be made out by that party.

In this case there is no express appointment by the Defendant of Mr Nicholson as agent. What is said is that there is a course of dealing between the Plaintiffs, Mr Nicholson and the Defendant from which the Plaintiff was led by the conduct of the Defendant to accept the assertion of Mr Nicholson that he was acting as agent for the Defendant. It is necessary, of course, to point to some conduct of the Defendant by which he placed Mr Nicholson in a situation where this assertion was credible as it is only by his own act that a man can make another his agent. The Plaintiffs rely upon the evidence of Mr Buckland-Pinnock to some of which I have already referred. This witness was pressed about various aspects of the transaction and the respective parts played in it. He was however adamant that in the final analysis, although the Plaintiffs were not really interested in where the money was coming from, they would look to the Defendant for payment. His evidence concerning the negotiations and the vote by the group certainly supports his contention that the group were aware of the order and authorised that it be made. Indeed the Defendant does not dispute that his group said that they would like the machine, although other groups had looked at the pictures.

There was discussion of aid money coming from elsewhere and Mr Nicholson told Mr Buckland-Pinnock that aid money would be available to purchase the machine. What form this aid would take, that is, whether it would be a soft loan to the farmers or a cash gift was not made clear to the court or to Mr Buckland-Pinnock who, as I have indicated, was not really concerned about the matter of finance, as he thought the maize purchases from the Defendant would produce cash flow to pay for the machinery.

The Defendant said his group had no money for the machinery and were under the impression that it was being bought for them by LUD and was to be available to other farming groups. However this evidence was to some extent inconsistent with the Defendant’s going to get the machine and his clear evidence that they (the group) regarded themselves as owners of it after it had been delivered. I formed the view that the contradictions in the Defendant’s evidence about the time during which the machine was possessed and used by the group arose from a desire to demonstrate that the machine was used less than in fact it was. Looking at all the evidence, I find I have no difficulty in coming to the conclusion that the negotiations and purchase of the machinery were carried on throughout on the basis that the machinery would be brought by the Defendant’s group and owned by them. There was a hope, maybe a real one, that the finance would be provided by an aid donor but nevertheless I find that the Defendant was fully aware that his group were buying machinery for themselves through the offices of the Plaintiffs. Thus Exh. A. does no more then put on paper what had already been agreed by the Defendant in the negotiations and the Defendant’s course of conduct in allowing Mr Nicholson to play the part he did in those negotiations clothed Mr Nicholson with the full authority of an agent to write that letter entering into a contract on the Defendant’s behalf.

I therefore find that the Plaintiff have established that the Defendant is bound by the contract entered into in his name by Mr Nicholson.

It is therefore not strictly necessary for me to consider ratification but having heard the evidence it may be convenient to do so. Ratification takes place when a person subsequently adopts an act purported to have been done on his behalf but which was in fact done without authority. We have seen that the Defendant accepted delivery of the machinery and used it. He then ceased to use it, when, as I understand it, bigger machinery from the Plaintiffs became available. If the act of acceptance of the machinery and use of it were with full knowledge of the circumstances then there can be no doubt that that would amount to ratification (see Bowstead on Agency 12th Edition illustrations 4 and 5 on page 43). Counsel for the Defendant contends that there was not full knowledge of the circumstances as the Defendant did not know who was to pay for the machinery, his group or LUD. As I have already indicated, I find that the Defendant was aware that the machinery had been ordered on his behalf and at his cost. Thus by accepting the machinery and regarding it as his own, as he said he did, in my judgment he ratified the contract entered into in his name in Exhibit A whether that Exhibit had been written with authority or without authority.

It follows therefore that there must be judgment for the Plaintiffs with costs.