Agency of Necessity / Necessitous Intervention COPY Flashcards
Great Northern Railway v. Swaffield (1894)
Contract of carriage to carry a horse by railway - for some reason, the consignee of refused to take delivery of the horse.
The railway company, in order to preserve the life of the horse, made a contract with a local livery stable to have the horse fed and looked after whilst they argued with defendant.
Held; railway company was entitled to be indemnified by defendant for the costs of the stable.
But this is a case about indemnity for expense incurred and not a case where the third party (the stable) is suing the defendant on the basis that the intermediary was acting as their agent of necessity.
So more or less a case of necessitous intervention - one of those cases where the English courts have allowed intervener to recover costs, without recognising a doctrine of necessious intervention.
Sachs v. Miklos [1948]
Before outbreak of WW2, plaintiff deposited some furniture with the defendant.
During the war, became impossible parties to communicate.
Became inconvenient for defendant to continue to store the furniture, and so sold it -when the war was over, the plaintiff sued him for damages for conversion.
Defendant argued he was acting as an agent of necessity for the plaintiff.
Rejected because, when he sold the furniture, he was not acting bona fide for the benefit of the principal but for his own benefit.
Falcke v Scottish Imperial Insurance Co (1886)
BOWEN LJ - appreciates narrowness of agency of necessity doctrine,
“No similar doctrine applies to things lost upon land, nor to anything except ships or goods in peril at sea”
Can use to rebut any potential application of agency of necessity in a PQ (unless the PQ is on maritime salvage)
“The general principle is, beyond all question, that work and labour done or money expended by one man to preserve or benefit the property of another do not according to English law…create any obligation to repay the expenditure… Liabilities are not to be forced upon people behind their backs”
This quote can be used to show that necessitous intervention does not exist in an English law as a general doctrine, even though interveners in such situations have, on a few isolated occasions, been able to recover expenses.
The Choko Star [1990]
C of A held; the master’s signature on a salvage contract did not bind the cargo owners, unless it was impractical to consult the cargo owners (which in the circumstances it was not).
Had the cargo owners been impractical to contact, there would have been a strong argument for saying that the master was the agent of necessity.
SLADE LJ set out the criteria of agency of necessity
(1) It is necessary to take salvage assistance,
(2) It is not reasonably practicable to communicate with the cargo-owners or to obtain their instructions
(3)The master or shipowners act bona fide in the interests of the cargo
(4) It is reasonable for the master or shipowner to enter into the particular contract.
Munro v. Willmott [1949]
Owner of a car had left it for nearly three years in the yard of an inn, with the consent of the licensee - licensee found car to be causing to difficulty to drivers who used the yard; unable to trace its owner, licensee had car repaired and solf for profit.
Held; licenesee did not have authority to and was not acting as an agent of necessity.
“The most that can be said for the defendant is that the motor car became something of an inconvenience. There is no real evidence that there was any necessity”
Plaintiff car owner was entitled to recover damages for conversion.
Thus:
- ACTION MUST BE NECESSARY
- ACTION MUST BE FOR THE BENEFIT OF THE PRINCIPAL
Sims & Co. v. Midland Rail Co. [1913]
Butter was being transported by rail - general strike - rail company unable to deliver - hot weather, butter began to deteriorate.
Railway company sold the consignment of butter.
Held; they were entitled to do that.
This is a rare example of a true case of agency of necessity, even though not in the context of a spent bill of exchange or maritime salvage.
Difficult to see how it differs from Springer v. Great Western Railway yet outcome the opposite - but could use in PQ to argue in favour of agency of necessity, before putting argument down using the weight og other cases.
Jebara v Ottoman Bank [1927]
Authority that the person in whose interest the agent is acting must be competent (for agency of necessity to arise).
SCRUTTON LJ gave an example of this: if agency has become illegal and void, e.g., because of war, “how can one imply a duty in an enemy to protect the property of his enemy? Will he not be violation his duty to his country”.
Springer v. Great Western Railway [1921]
Carriage of a quantity of tomatoes, on board steamship - bad weather + strike, could not be unloaded for another 6 days.
Fearing the deterioration of the tomatoes, the defendant arranged their sale.
Plaintiff claimed damages for breach of the contract; defendant argue that the sale was effect as an agent of necessity.
C of A rejected his defence.
Shows just how limited (if non-existent) the doctrine of agency of necessity is outside the contexts of bills of exchange and maritime salvage.
SCRUTTON LJ
“must first show that it was commercially impossible to communicate with the owner and receive instructions from him…must then show that a sale was the ONLY REASONABLE BUSINESS COURSE”.
Held; “they were not intended to take upon themselves the duty of settling what should be done with the goods if there was any reasonable commercial possibility of obtaining instructions from the owner”.
Bowstead & Reynolds: Requirements of Agency of Necessity
(a) Must be impossible, or at any rate impracticable, to communicate with the principal
- not difficult with modern tech!
- do give a hypothetical example: where there are so many cargo owners that impractical to communicate with them all.
(b) The action taken must be necessary for the benefit of the principal
- e.g. Munro v. Willmott
(c) The agent must have acted bona fide in the interests of the principal.
- e.g. Sachs v. Miklos
(d) The person in whose interest the agent is acting must be competent.
- Jebara v Ottoman Bank
(e) The authority cannot prevail against express instructions to the contrary from the principal.
2 situations in which genuine Agency of Necessity has arisen:
- In relation to Bills of Exchange
- In the context of maritime salvage
Agency of Necessity: Maritime Salvage
Amaster of a ship is the agent of the ship’s owners - he has broad powers to enter into contracts on behalf of the shipowners in order to prevent damage to the ship or injury to the people onboard, in circumstances of emergency.
Meant if ship got into trouble, masters would have the authority to enter into a salvage contract on behalf of the owners.
Nowadays, it is rarely necessary to resort to this doctrine because modern methods of communication mean that it is usually possible for the owners to negotiate directly with potential salvors.
True examples nowadays are very rare.
Some people say this isn’t a true case of agency of necessity because what is happening is that the emergency merely increases the master’s authority –doesn’t createa new agency; just effects the scope of an existing authority that the master already has.
Distinction between the two:
AGENCY OF NECESSITY
- arises where someone, in circumstances of emergency, acts on behalf of another, so as to benefit the other and makes a contract on behalf of that other with a third party
- bringing about of contract is essential
- a recognised, but incredibly narrow doctrine
NECESSIOUS INTERVENTION
- where someone does something on the part of another in conditions of emergency to safeguard the latter’s property or other interests, without necessarily making a contract with a third party, but where the intervener is seeking to recover an indemnity against expenses that he has incurred, or even possibly, claim remuneration for what he has done.
- Whilst there is a conceptual ground for such a doctrine, English law doesn’t actually recognise it - its approach its always to try and find a contract that’s been formed
- Rather, in a few very isolated instances, an English court has allowed an intervener to recover expenses incurred when intervening on behalf of another, without recognising a set doctrine.
Agency of Necessity: Bills of Exchange
Bill of exchange is a written order used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date.
Under, Bills of Exchange Act 1882, ss. 65 – 68: If you have drawn a Bill of Exchange which has been accepted by a third party, but you can’t meet your liability under it, if your friend (not wishing for you to become insolvent) pays the holder of the Bill your liability, your friend is then entitled to claim from you the money which he has spent in doing so, by way of indemnity.
In reality, barely ever happens - only when it’s important for the intervener that the the other doesn’t go insolvent.
China Pacific S.A. v. Food Corporation of India, The Winson [1982]
Modern example of potential AoN.
Salvors had salvaged cargo from a ship that had run aground - made a contract with a warehouse in the Philippines to store the salvaged cargo.
Q: were the salvors were entitled to include the cost of storing the cargo in the warehouse in their salvage claim.
JCPC held; YES: though this was really a case about the law of salvage, one argument deployed was that the salvors were acting as agents of necessity for the CARGO owners.
But JCPC: would only have been necessary to consider the question of agency of necessity if the salvors had failed to pay the warehouse and the warehouse was suing the cargo owners.
Prager v. Blatspiel, Stamp & Heacock Ltd. [1924]
MCCARDIE J argued that agency of necessity should be extended beyond the maritime salvage and bills of exchange contexts.
Argued that “judges should expand the common law to meet the needs of expanding society, and…expand the doctrine of agent of necessity without clearly defining the limits, if any, of of its expansion”.
