Supreme Court
Action No. 8 of 1980
8th September, 1982
Moe, C.J.

Mr. M.C. Young, for the Plaintiff
Mr. Dean Barrow, for the Defendant

Actions to recover monies paid to Defendant as agent of a principal under a mistaken fact - Defendant personally liable for repayment of the sum of monies

J U D G M E N T

On 30th October 1979, the Defendant a director of H.L.C. Engineers Ltd., presented to the Plaintiff Company a bill for payment of $23,255.91 in respect of work done by H.L.C. Engineers Ltd. for the Plaintiff. The Defendant requested that the cheque for the sum be drawn in his favour and he received from the Plaintiff a cheque so drawn. The Defendant did not pay over the money to H.L.C. Engineers Ltd., since he took the view that H.L.C. Engineers Ltd. owed him money and he held the sum concerned to be taken into account on settlement of the matter between himself and his company. He eventually spent the money.

The Plaintiff seeks from the Defendant the return of $23,255.91 which it paid to the Defendant on the 30th October 1979 for payment to H.L.C. Engineers Ltd. or alternatively damages for conversion of the sum concerned. The Defendant pleaded that acting within the scope of actual authority conferred on him by H.L.C. Engineers Ltd. to do so, he received the said money and gave a valid discharge therefore. Alternatively, that his receipt of the money was an act done within the scope of his apparent authority as an agent of H.L.C. Engineers Ltd. He denies that the Plaintiff has a valid cause of action for the recovery of the money paid to him.

I have decided already in Action 375 of 1980 that the payment to Mr. Espat was equivalent to a cash payment. The main question for determination in this case is whether the Defendant had actual authority to receive money due to his company H.L.C. Engineers Ltd. from the Plaintiff by way of cash. There was no evidence that H.L.C. Engineers Ltd. specifically conferred on the Defendant authority to receive money due to it by way of cash payment. The Defendant gave evidence which I accepted that he on several occasions received money due to H.L.C. Engineers Ltd. by way of cash and then Mr. Chin, the Managing Director and himself did their arrangements. I found that the pattern of conduct relied on by the Defendant amounted to no more than adoption or ratification by H.L.C. Engineers Ltd. of the Defendant's acts. There was no actual authority conferred on the Defendant to receive H.L.C. Engineers' money by way of cash payment. I have also decided already in Action 375 of 1980 that the Defendant's receipt of the cheque drawn in his favour for the sum concerned was not an act done within the scope of his apparent authority as agent of H.L.C. Engineers Ltd.

Consequently, I must hold that the Defendant did not validly receive the sum concerned on behalf of H.L.C. Engineers Ltd. The Plaintiff on the day in question paid the Defendant the sum of $23,255.91. Mr. Fuller, Manager of the Plaintiff company, said that when the cheque was made out to the Defendant he expected he had discharged the debt to H.L.C. Engineers Ltd. --- He thought he was discharging the debt because he made a mistake. Defence conceded that Mr. Fuller laboured under a misapprehension of fact. That his view that he had discharged his Company's obligation was a mistake on his part.

The Defendant, a director, of H.L.C. Engineers Ltd. on the day in question was acting as its agent and was paid the sum concerned by the Plaintiff under a mistake of fact. He has not paid it to his principal, H.L.C. Engineers. The law imposes an obligation upon an agent to return money paid to him for his principal under a mistake of fact. Vide British American Continental Bank v. British Bank for Foreign Trade (1926) 1 K.B. 328. The Defendant is therefore personally liable to repay the sum to the Plaintiff.

There is no need to go into the issue whether there was conversion.

Judgment for the Plaintiff in the sum of $23,255.91 with costs.

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