Dolphin v Harrison, San Miguel Pty Ltd [1911] HCA 47; (1911) 13 CLR 271 (26 September 1911)

HIGH COURT OF AUSTRALIA

Dolphin Defendant, Appellant and Harrison, SanMiguel Proprietary Ltd Plaintiffs, Respondents

H C of A

On appeal from the Supreme Court of Victoria.

26 September 1911

Griffith C.J., Barton and O'Connor JJ.

Irvine K.C. (with him Cohen), for the appellant.

Schutt (with him Dethridge), for the respondents.

Irvine K.C., in reply,

Griffith C.J.

This case came before us so recently on an application forspecial leave to appeal that it is not necessary to take furthertime toconsider it. The question for determination at first sightseems a small one. The amount concerned is very small, but wegrantedspecial leave to appeal because there seemed to be involvedin it a very important question of law, namely, whether a personwhohas property for sale and is assisted in bringing about a saleby a friend thereby becomes impliedly liable to pay commission onthe transaction to that friend. Of course that would be anintolerable position—that a person could not speak to afriend aboutproperty he had for sale without incurring liabilityto pay commission on the sale.

The action is for commission, and the plaintiffs had toestablish a contract between the defendant and themselves that thedefendantwould employ the plaintiffs as his agents to introduce apurchaser on the terms that if they did so they should receive apecuniaryreward. That is the contract the plaintiffs had to prove.Whether there was such a contract depends entirely upon theconstructionof two documents.

The plaintiffs are merchants. They describe themselves on theirstationery as "cork merchants, and importers of machinery and allrequisites for ærated water manufacturers, brewers, bottles,confectioners," &c. They had had some previous dealings withthe defendant in that capacity. On 10th September 1910 they wrote aletter to the defendant, who was the owner of a brewery, in thefollowing terms:—The writer is under the impression that heheard somewhere that you were inclined to sell your business. Ifsuch is the case we should be glad to hear from you stating whatamount you require for same and any particulars that are likelytohelp us to make a sale. We have an inquiry for a small brewery andshall be glad to hear from you on the subject. Stopping there,thedefendant is informed that some customer, or some person with whomthe plaintiffs are acquainted, is inquiring for a brewery,and thatthe plaintiffs have heard that the defendant's brewery is for sale,and the defendants ask what price he wants. So far Icannot see asuggestion of a request by the plaintiffs to the defendant toemploy them as his agents to obtain a purchaser. But thesewordsare relied upon by Mr.Schutt, and they are the only wordsthat can be relied upon. "We should be glad to hear from youstating what amount you require for sameand any particulars thatare likely to help us to make a sale." Conceding for a moment thatthat is open to the construction contendedfor by Mr.Schutt, then comes the defendant's answer on 28thSeptember as follows:—"In reference to sale of brewery I want£2,500 net forthe busine. If I can't get that I don't sell.The only reason for selling I am getting too old, if I was 20 yearsyounger I wouldnot think of selling. Any further particulars youcan have by applying." That seems to me to negative the idea thatthe defendantwas employing the plaintiffs to sell on commission.He said "I will take £2,500 from anybody, but I will pay nocommissionto anybody." That is what he said. From that it iscontended that there was an implied promise to pay commission ifthey introduceda purchaser.

I will refer now to what happened afterwards. The plaintiffs'friend was one Shepard, and he was informed by the plaintiffs ofthedefendant's willingness to sell. Shepard saw the plaintiffs'manager and then went to Knight, the managing director of R.Montgomery& Co., who gave him a written introduction to thedefendant as follows:—"This will be handed to you by a veryold friendof the firm's who is on the look-out for a business andhas been informed that yours is for sale. We can only speak of himin themost highest terms of praise and if you have determined todispose of your brewery you need have no fear of discussing thematterwith him as in the event of his not buying the whole subjectwill be treated most confidentially." Shepard took that to thedefendantand the result was that the defendant sold his brewery toShepard for £2,500.

Now it is suggested that, as the plaintiffs were the means ofintroducing Shepard to the defendant, and as Shepard and thedefendantmade a contract for the sale of the brewery, there was aliability on the part of the defendant to pay commission to theplaintiffs.If there was a promise by the defendant to paycommission to the plaintiffs for finding a purchaser, that is, nodoubt, quite right.It would not matter in that case what price thedefendant accepted from Shepard because the services had beenrendered by the plaintiffsto the defendant. But it is quite clearthat there was no such contract between the plaintiffs and thedefendant. The defendant said"I will pay no commission. I musthave £2,500 net"—by which I understand exclusive of anycommission. So that if theplaintiffs could make the defendant paycommission on the sale, the defendant would be entrapped intomaking a bargain which theplaintiffs knew he would not make. IfShepard had told the defendant that he had come from theplaintiffs, so that the defendanthad known that he might be liableto pay commission, it is clear the contract would not have beenmade. In my opinion there is nojustice in the claim set up by theplaintiffs, entirely apart from its legal validity. I think it isimpossible to find any promiseby the defendant to pay commissionfor the introduction of a purchaser by the plaintiffs. For thesereasons I think the appeal shouldbe allowed.

Barton J.

I am of the same opinion. I think the action was perfectlybaseless.

O'Connor J.

I concur.

Appeal allowed. Judgment appealed from discharged. Judgment fordefendant with costs of action, including costs of reference to theFull Court.

Solicitor, for the appellant, Alan Skinner for R. W. Shellard,Daylesford.

Solicitors, for the respondents, Madden & Butler.