Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-Operative Assurance Co of Australia Ltd
46 CLR 41(Judgment by: Dixon J)
Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-Operative Assurance Co of Australia Ltd
Court:
Judges:
Gavan Duffy CJ and Starke J
Rich J
Dixon JEvatt J
McTiernan J
Subject References:
Defamation
Slander
Master and servant
Vicarious responsibility
Judgment date: 23 December 1931;
SYDNEY
Judgment by:
Dixon J
Before Murray C.J., from whose judgment this appeal is brought, the respondent, a life insurance company, recovered from the appellant, another life insurance company, PD1,000 damages in respect of three slanders found to have been published of and concerning the respondent in the way of its business, without justification, by an "agent" of the appellant in the course of his agency. Although the appellant complained of the amount of the damages awarded, it did not appear that the assessment had proceeded upon any erroneous principle, and the judgment must stand unless the remaining ground of the appeal is well founded, namely, that the appellant is not vicariously liable for the defamatory statements published by the "agent."
The slanders were uttered in the course of attempting to induce persons who had insured with the respondent to make proposals for life insurance with the appellant on occasions when the "agent" interviewed these persons "during," as the appellant's admission runs, "the course of carrying out the terms of" his written agreement with the appellant. In the written agreement he is called "the agent," and the appellant Company agrees to pay to him on proposals, bearing his signature as introducing agent, commission at specified rates in respect of completed and accepted business. His duties are not defined, but the agreement expressly allows him to perform them either by his clerks and servants or personally. It provides that he may engage in any other business or occupation during the continuance of the agency, except that he may not directly or indirectly act for any other life or accident insurance company. It contemplates the receipt by him of moneys on behalf of the appellant, and stipulates for prompt payment over and a statement of the receipts. It expressly prohibits him from using language which may reflect upon the character or conduct of any person or institution, or tend to bring it into disrepute or discredit.
Little evidence was given of the relations which in fact subsisted between him and the appellant in the actual conduct of his agency; and, I think, no sufficient reason appears for supposing that the appellant assumed such a control over the manner in which he executed his work as to constitute him its servant. In my opinion, the liability of a master for the torts committed by his servant in the course of his employment is not imposed upon the appellant by the agency agreement, but I do not think that it follows that the appellant incurs no responsibility for the defamation published by the "agent" in the course of his attempts to obtain proposals.
In most cases in which a tort is committed in the course of the performance of work for the benefit of another person, he cannot be vicariously responsible if the actual tortfeasor is not his servant and he has not directly authorized the doing of the act which amounts to a tort. The work, although done at his request and for his benefit, is considered as the independent function of the person who undertakes it, and not as something which the person obtaining the benefit does by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance. The independent contractor carries out his work, not as a representative but as a principal. But a difficulty arises when the function entrusted is that of representing the person who requests its performance in a transaction with others, so that the very service to be performed consists in standing in his place and assuming to act in his right and not in an independent capacity. In this very case the "agent" has authority to obtain proposals for and on behalf of the appellant; and he has, I have no doubt, authority to accept premiums. When a proposal is made and a premium paid to him, the Company then and there receives them, because it has put him in its place for the purpose. This does not mean that he may conclude a contract of insurance which binds the Company. It may be, and probably is, outside his province to go beyond soliciting and obtaining proposals and receiving premiums; but I think that in performing these services for the Company, he does not act independently, but as a representative of the Company, which accordingly must be considered as itself conducting the negotiation in his person.
The rule which imposes liability upon a master for the wrongs of his servant committed in the course of his employment is commonly regarded as part of the law of agency: indeed, in our case-law the terms principal and agent are employed more often than not although the matter in hand arises upon the relation of master and servant. But there is, I believe, no case which distinctly decides that a principal is liable generally for wrongful acts which he did not directly authorize, committed in the course of carrying out his agency by an agent who is not the principal's servant or partner, except, perhaps, in some special relations, such as solicitor and client, and then within limitations. A learned writer who is disposed to impugn the course that authority has taken in widening the liability for the wrongs of others, concludes a discussion of the responsibility arising from agency with the statement:"Principals have been held liable in cases substantially of contract. Principals have been held liable in cases of tort where the agent was also a servant. Principals have been held liable for the wrongs of their agents which they told them to commit. But, fortunately, there seems to be no occasion in which a mere agent has been held to have had `implied authority' to commit wrongs or to be negligent. The danger that such a proposition may be laid down is nevertheless imminent" (Dr. Baty, Vicarious Liability, at p. 44, a work criticized by Sir F. Pollock, 32 Law Quarterly Review (1916), p. 226. See also Salmond, Law of Torts, 7th ed., ch. II., s. 26, par. 1; Holmes, Common Law, pp. 229-233, and Collected Legal Papers, sub "Agency," at pp. 101-109).
Some of the difficulties of the subject arise from the many senses in which the word "agent" is employed. "No word is more commonly and constantly abused than the word `agent.' A person may be spoken of as an `agent' and no doubt in the popular sense of the word may properly be said to be an `agent,' although when it is attempted to suggest that he is an `agent' under such circumstances as create the legal obligations attaching to agency that use of the word is only misleading" (per Lord Herschell in Kennedy v De Trafford [F5] , at p. 188). Unfortunately, too, the expressions "for," "on behalf of," "for the benefit of" and even "authorize" are often used in relation to services which, although done for the advantage of a person who requests them, involve no representation.
If the view be right which I have already expressed, that the "agent" represented the Company in soliciting proposals so that he was acting in right of the Company with its authority, it follows that the Company in confiding to his judgment, within the limits of relevance and of reasonableness, the choice of inducements and arguments, authorized him on its behalf to address to prospective proponents such observations as appeared to him appropriate. The undertaking contained in his contract not to disparage other institutions is not a limitation of his authority but a promise as to the manner of its exercise. In these circumstances, I do not think it is any extension of principle to hold the Company liable for the slanders which he thought proper to include in his apparatus of persuasion.
The wrong committed arose from the mistaken or erroneous manner in which the actual authority committed to him was exercised when acting as a true agent representing his principal in dealing with third persons.
I do not think a distinction can be maintained between breaches of duty towards third persons with whom the agent is authorized to deal and breaches of duty towards strangers, committed in exercising that authority. If what he does is done as the representative of his principal, it cannot matter, apart from questions of estoppel and of apparent as opposed to real authority, whether the injury which it inflicts is a wrong to one rather than another person.
The appeal should be dismissed