Establishing agency: Rodewald v Taylor [2010] CSOH 05

The way in which agency is established in Scots law is an issue lacking clarity.  Lord Bannatyne’s decision in the case of Rodewald v Taylor, 18 Jan 2011, [2010] CSOH 05, available at http://www.scotcourts.gov.uk/opinions/2011CSOH5.html, provides some interesting food for thought on this issue.   

Judicial statements on the contractual nature of agency are not difficult to find, examples including Graham & Co v United Turkey Red Co 1922 S.C. 533, 5 per Lord Salvesan 546 and Lord Ormidale 549; Lothian v Jenolite Ltd 1969 S.C. per Lord Milligan at 120; Trans Barwil Agencies (U.K.) Ltd v John S. Braid & Co Ltd 1988 S.C. 222 per Lord McCluskey at 230; Connolly v Brown 2007 S.L.T. 778 per Lady Dorian at para [54].  This contract may be established either orally or in writing.  The conduct of both parties can be used in order to make an inference of the consent necessary to form the contract, see, for example Ben Cleuch Estates Ltd v Scottish Enterprise [2006] CSOH 35 in which Lord Reed (at para [143]) notes that agency may arise through a course of conduct “as a matter of implied agreement.” 

Others have argued that a contract is not necessary in order to establish agency, for example, Gow in The Mercantile and Industrial Law of Scotland at 516, and more recently, Forte and Van Niekerk who go much further, arguing that agency is not only non-contractual but non-consensual: “Agency” in K. Reid, R. Zimmermann and D. Visser, Mixed Legal Systems in Comparative Perspective: Property and Obligations in Scotland and South Africa, (2006, at p. 246).

In Rodewald v Taylor the dispute related to a property known as “Corshellach,” owned by the pursuer and tenanted by the BBC.  Rental payments appear to have been made to the defender.  The pursuer argued that the defender was acting as her agent in receiving these rental payments, and they therefore ought to have been remitted to the pursuer.  Counsel for the defender denied that any relationship of agency existed, and explained that the defender and her husband, Mr Nagy, were occupying another property owned by the pursuer, Glenwood, rent-free. In consideration for such rent-free occupation, the defender was to let and collect the rents for Corshellach.   

The pursuer rested her case on establishing a relationship of agency between her as principal and the defender as agent.  Agency was, counsel argued on her behalf, a contract.  Lord Bannatyne indicated (at para [33]) that, “…to give fair notice to a defender of the case made against that party, it requires the pursuer to aver the essentials of the contract which in my view are as follows:
(a) Who the parties are to the alleged contract;
(b)  Where the contract was entered into;
(c) When the contract was entered into;
(d) The terms of the contract; and
(e) The form of the contract.”

The pursuer was found ultimately to have failed to aver sufficiently the foundation of her case.

This case may appear unremarkable: Lord Bannatyne was, after all, responding to the fact that the pursuer had based her case on contract.  Arguably, therefore, it may contribute little to the debate over whether agency is always both consensual and contractual. 

In English law, one need not establish an actual contract in order to establish agency.   The key is, rather, consent.  According to McKendrick: “It suffices that P consents to the exercise of authority by A and that A consents to exercise that authority.” (Goode’s Commercial Law, (4th edn, 2010), 180, at footnote 16, relying on Yasuda Fire and Marine Insurance Co of Europe Ltd v Orion Marine Insurance Underwriting Agency Ltd [1995] Q.B. 174).  Had an English court been faced with these same facts, the result is likely to have been the same, however.  No averments were made in the case that the pursuer consented to the defender acting on her behalf.  The slight difference of focus between the two legal systems is, however, interesting.  The Scots position may be an echo of a civilian past, agency being built on the consensual but gratuitous contract of mandate (gratuitous contracts being problematic in English law because of the requirement of consideration).

The pursuer’s legal team does not appear to have made use of ad hoc agency, a concept recently articulated by Lord Drummond Young (Whitbread Group plc v Goldapple Ltd 2005 SLT 281; Laurence McIntosh Ltd v Balfour Beatty Group Ltd and the Trustees of the National Library of Scotland, [2006] CSOH 1907; John Stirling t/a M & S Contracts v Westminster Properties Scotland Limited [2007] CSOH 117; [2007] BLR 537).  In those cases, agency was established very easily, on the basis of inferences of consent.  I have argued that Lord Drummond Young’s approach to establishing agency failed to meet the requirements of decided case law (with Niall Whitty, ‘Payment of another’s debt, unjustified enrichment and ad hoc agency’, 2011 Edin L R 57).  In those cases, it seemed clear that Lord Drummond Young was using agency as a concept to achieve justice on the facts of the case.  Rodewald may be a case of equally compelling facts: the pursuer alleged that the defender retained rents which were not due to her.  Ad hoc agency was neither pled by the pursuers nor suggested by Lord Bannatyne. 

If there is, indeed no contract between pursuer and defender, the pursuer could have recovered the rents on the basis of unjustified enrichment.  There appears to have been no attempt by the pursuer to base her case on unjustified enrichment. 

What conclusions can we reach from this case?

(1) Where the pursuer seeks to establish agency as a contract, the standard of proof remains high;
(2) Arguably, it provides evidence of a tendency to use agency where the real solution lies in unjustified enrichment; 
(3) Ad hoc agency may remain stuck on the starting blocks;
(4) We continue to lack evidence that the Scottish courts are willing to conceive of agency as a non-consensual concept.    

 

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