Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-Operative Assurance Co of Australia Ltd

Judges: Gavan Duffy CJ and Starke J
Rich J
Dixon J
Evatt J

McTiernan J

Subject References:
Defamation
Slander
Master and servant
Vicarious responsibility

SYDNEY

Decision by:
McTiernan J

I agree with my brother Evatt that the appeal should be allowed.

The agreement which was entered into between the appellant and Ridley describes him as "the agent," but it does not expressly define the things which he was authorized to perform as the agent of the appellant. In my opinion it is not consistent with the terms of the agreement to say that the word "agent" in the agreement signifies only that Ridley is a person conducting the business of an insurance agent on his own account, and does not signify the existence of the relationship of principal and agent between the appellant and him. The evidence, moreover, does not warrant the inference that Ridley was in the position of a servant of the appellant. In saying this I do not imply, if such were his position, that upon the facts of this case, which have been reviewed by my brother Evatt and his examination of the nature of the prohibition contained in the first clause of the agreement, the appellant would be liable for the slanders which were uttered by Ridley.

It is clear that the appellant did not expressly authorize Ridley to slander the respondent or any other company or person. In fact, it made the prohibition which has been discussed in the judgment of my brother Evatt, a term of its agreement with Ridley. Despite the absence of any express authorization to do the act by which the respondent is aggrieved and the presence of the prohibition which includes that act within its scope, the appellant would be liable for the publication by Ridley of the slanders, which he has been proved to have published, if that act were done in exercising the authority with which Ridley was entrusted by the appellant. The fact that it was an abuse of that authority would not relieve the appellant of liability. What was that authority? It was not, of course, to do everything which the appellant itself could do or might have authorized to be done in its name. It was a limited authority. The effect of the agreement, in my opinion, was that Ridley became the agent of the appellant, by whom it would find persons who wanted to insure with it, and by whom the appellant would solicit persons to become willing to insure with it and would obtain proposals from such persons for acceptance or rejection by the appellant. It follows that Ridley would be acting within the scope of his authority, for example, when, in search of proponents for insurance, he spoke to people of the appellant Company, its business and its policies.

He would be acting in the course of that authority if he made any false statement about those matters or said anything concerning them, which he was not expressly authorized to say or was forbidden to say. But I do not agree in the view that in defaming the respondent he was exercising the authority which he held as the representative of the appellant. To hold that a person in the position of Ridley was acting in the course of the authority with which he was entrusted by the appellant when he published any one of the slanders, which the learned Judge found, would involve the result that a person authorized by an insurance company to obtain business for it, has authority to persuade persons from whom he is seeking proposals for insurance to make them by criticizing the soundness of any other insurance company. In my view such an agent has authority to rely upon the merits of the company which he represents, but has no authority to criticize any other company for the purpose of obtaining business for his own company. There is nothing in the agreement which leads me to the conclusion that the criticism of any other company was a function pertaining to the canvasser Ridley, as the representative of the appellant. Speaking of the scope of the authority of the tax collector for whose slanders it was sought to make the corporation liable, Lord Shaw of Dunfermline said, in Glasgow Corporation v Lorimer ^[F38] : "If, however, it were to be held that persons in the ordinary and comparatively humble position of this officer were within the scope of their employment in expressing opinions as to the conduct of those with whom they have dealings in the course of doing their work, the consequences might be of the most serious character, and the essential justice which underlies the maxim qui facit per alium facit per se would disappear."

The sense and reason of this statement, in my opinion, tends towards the rejection of the view that criticism of other companies was one of the instruments which the appellant had authorized Ridley to employ for the purpose of getting business for it. In uttering these slanders, I do not think he was merely abusing an authority with which he was invested. My conception of his authority leads me to the conclusion that he spoke as Ridley, not as Ridley the representative of the appellant. The facts of this case are quite different from the facts in Citizens' Life Assurance Co v Brown ^[F39] . The publication of the slanders, though not capable of being referred, in my view, as a matter of law, to the exercise by Ridley of the authority with which he was entrusted, can be explained by the facts which have been so thoroughly reviewed by my brother Evatt. These facts reinforce the view that Ridley did not speak in his right as the representative of the appellant when he defamed the respondent.