The defences filed
21 The defence filed was a joint one and included the defences of both defendants. Indeed, the same solicitor and counsel acted for both defendants at the trial.
22 It is of note that Ms Vogler pleaded to the whole Statement of Claim including that concerning allegations against Mr Davies. She did not admit para 11 whereas Mr Davies did admit that he was the agent and Ms Vogler, his principal. There is however no doubt that Ms Vogler appointed Mr Davies as her agent to market the sale of the business. She did this in writing on 19 April 1994 and the document became Exhibit G. The agreement provides that the sale proceeds be divided equally between Ms Vogler and Mr Davies, the latter to receive 50% as his commission.
23 Ms Vogler's defence denied any misrepresentations were made by her which induced the plaintiffs to enter into the agreement. Paragraph 11 of her defence states:
Further and/or in the alternative the First Defendant states that if any representations were made by her or her servants or agents regarding the said business concept such representations were known by the Plaintiffs to be such as … [Emphasis added]
24 The pleading raised other defences including that Queensland law applied, and by implication, New South Wales law did not apply.
25 The defence of Mr Davies denied any false or fraudulent representations.
26 Inelegantly drawn as the Statement of Claim is, it is apparent that the plaintiffs were alleging that, insofar as representations were made by Mr Davies, he was making them as agent for his principal, Ms Vogler. On the evidence called the plaintiffs did not allege that Ms Vogler personally made the representations set forth in paras 6(h) and (i), rather that these were made by Mr Davies (see paras 12(c) and (d)). It is plain however that the plaintiffs were alleging that they were made by him as Ms Vogler's agent. His Honour found that in making the representations to Mr Ramsey, Mr Davies was acting within his authority as the general agent for Ms Vogler. As I have said, Exhibit G dictated this course. So did the way the trial was conducted.
27 Ms Vogler gave oral evidence in which she expressly referred to Mr Davies as the agent and that she had appointed him as the agent for sale and marketing of the business. In cross-examination she agreed that she was aware that Mr Davies gave Mr Ramsey projected cashflows for the business in New South Wales and that she did not look at them.
28 Further, Ms Vogler accepted that she left the selling to Mr Davies, repeatedly referring to his expertise, and that she adopted what he did in the selling. Mr Davies indicated that material used by him to market the business to the plaintiffs came from Ms Vogler. In some respects the evidence of Ms Vogler confirmed this.
29 Moreover, no argument was advanced at the trial to the effect that Mr Davies was not Ms Vogler's agent or, alternatively, that Mr Davies exceeded his authority. The respondent has provided the Court with the written submissions of the defendants at the trial. They raise no issue disputing the agency. Rather they argue that the defendants were not liable for a variety of other reasons.
30 As I have recounted, his Honour found that the representations in paras 12(c) and (d) were falsely made to the knowledge of Mr Davies.
31 In effect, his Honour found that Mr Davies told lies to Mr Ramsey to cause the plaintiffs to buy the business. In making the false representations, Mr Davies was acting within the authority conferred on him by Ms Vogler. She received the moneys paid by the plaintiffs under the agreement. Why then should she not be held to be vicariously liable?
32 In Credit Lyonnais NV v ECGD [2000] 1 AC 486 at 494 Lord Woolf MR, as he then was, addressed the issue of vicarious liability saying that the general approach was clear beyond peradventure. He cited Lord Macnaghten in Lloyd v Grace, Smith & Co [1912] AC 716 at 737, who referred to Blackburn J in McGowan & Co v Dyer (1873) LR 8 QB 141, the latter reflecting a much approved statement in Story on Agency.
33 After quoting from Blackburn J, Lord Woolf said at 494:
This statement makes clear the principle on which vicarious liability depends. It is that the wrong of the servant or agent for which the master or principal is liable is one committed in the case of a servant in the course of his employment, and in the case of an agent in the course of his authority. It is fundamental to the whole approach to vicarious liability that an employer or principal should not be liable for acts of the servant or agent which are not performed within this limitation.
34 It is apparent that the false representations made by Mr Davies were made within the course of his authority from Ms Vogler. There is no evidence to the contrary. Had his Honour addressed the question of vicarious liability when he gave judgment, he would have been bound to find that Ms Vogler was vicariously liable for the false representations of her agent, given the finding that Mr Davies was acting within his general authority when making the representations, and the evidence generally. The representations were clearly made in the course of Mr Davies' authority from Ms Vogler. The remark by his Honour when considering costs, that Mr Davies had abused his authority, was made in the context of determining costs and not liability, which he had decided almost one year earlier. In any event, the judgment on costs acknowledged that in committing the fraud Mr Davies acted in Ms Vogler's interest and within the general terms of his express authority.
35 It follows in my view that his Honour was wrong to give judgment for Ms Vogler on the plaintiffs' claim. He should have given judgment for the appellant Mr Ramsey, against the first defendant/respondent Ms Vogler, for damages and interest to be assessed.