27 In Schultz v Corwill Properties Pty Ltd (1969) 90 WN (Pt. 1) (NSW) 529, Street J explained that responsibility for the acts of an agent was to be determined upon the ordinary principles of agency. At 537-8, his Honour said:
"If the fraud in question is the immediate act of the person whose title is impeached, then the position is not open to doubt. If, however, the fraud is that of an agent for the person whose title is impeached, the principle of respondent superior, with all its limitations and qualifications, is applicable. The matter is to be tested by investigating whether or not the principal is, in the particular circumstances under consideration, liable to the person who has been defrauded for the acts of the agent. On this topic one need not delve more deeply than the general statement in Bowstead on Agency, 13th ed., p. 242: "An act of an agent within the scope of his actual or apparent authority does not cease to bind his principal merely because the agent was acting fraudulently and in furtherance of his own interests. This principle is general, applicable to cases of actual and apparent authority; in tort; in the disposition of property; a similar result even appears in criminal cases. But the mere fact that the principal, by appointing an agent, gives that agent the opportunity to steal or otherwise to behave fraudulently does not without more make him liable: the agent must normally be acting within the scope of his actual or apparent authority for the principal to be responsible.""
28 In the present case, the certification on the transfer, when executed on behalf of the transferor and on behalf of the transferee, was correct. It was the alteration of the transfer by Ms Moore, which may have occurred about the time she was in the Stamp Duties Office, which has raised the current problem. The alteration posed the additional problem that it was not initialled or verified by the parties to the dealing as Reg 5 Sch 1(9) required.
29 Mr Alexis submitted that Mr Williams must have been aware that an error had occurred. However, I do not see that there was any fault on his part. He was entitled to leave the matter of severance in the hands of his solicitor.
30 The Statement of Claim and much of the address of Mr Alexis concentrated on fault on the part of Ms Pinter. I do not think her actions prior to the registration of the transfer can be categorized as fraudulent. Her conduct was grossly negligent but she did not herself act recklessly without caring as to whether or not her actions were correct. She relied upon and trusted her registration clerk. Of course, once she had received back the details of the registration she knew that what had been registered was wrong. Her conduct at that stage had an element of reckless indifference about it. But, in the circumstances of this case, it is her conduct prior to registration which matters.
31 There was fraud in the sense I have discussed committed by Ms Moore. She altered the transfer from the Corporation to Mr and Mrs Williams, after the transfer had been executed, by crossing out the words "as joint tenants" and inserting the words "tenants in common in equal shares". She knew that this did not represent the transaction between the Corporation and Mr and Mrs Williams and she expected the Registrar-General to act upon the alteration, as in fact occurred. She took that course for the purpose of saving a small amount of stamp duty. Nevertheless, she deliberately altered the transfer with the intention that the Registrar-General would act upon her alteration. Her conduct amounted to fraud for the purposes of the Act.
32 It has been submitted by Mr Marler, solicitor for the defendants, that Mr Williams and his estate were not responsible for the acts of Ms Moore, who was an agent, not an employee. However, the liability for acts of an agent which are carried out in the course of the agent's employment is a wide one. In his Commentaries on the Law of Agency, 7th edition, at para 452, Story said:
"In the next place, as to the liability of the principal, to third persons, for the misfeasances, negligences, and torts of his agent. It is a general doctrine of law, that, although the principal is not ordinarily liable (for he sometimes is) in a criminal suit, for the acts or misdeeds of his agent, unless, indeed, he has authorized or co-operated in those acts or misdeeds; yet, he is held liable to third persons in a civil suit for the frauds, deceits, concealments, misrepresentations, torts, negligences, and other malfeasances, or misfeasances, and omissions of duty, of his agent, in the course of his employment, although the principal did not authorize, or justify, or participate in, or, indeed, know of such misconduct, or even if he forbade the acts, or disapproved of them. In all such cases, the rule applies, respondeat superior; and it is founded upon public policy and convenience; for in no other way could there be any safety to third persons in their dealings, either directly with the principal, or indirectly with him through the instrumentality of agents. In every such case, the principal holds out his agent, as competent, and fit to be trusted; and thereby, in effect, he warrants his fidelity and good conduct in all matters within the scope of the agency."
33 Those words of Story have often been cited. See, for example, Lord Macnaughten with whom Lord Loreburn and Lord Atkinson agreed in Lloyd v Grace Smith & Co [1912] AC 716 at 737.
34 The relevant determining or controlling concept is usually referred to as the scope of employment. In State of New South Wales v Lepore [2003] HCA 4 at para 40, Gleeson CJ said of this concept, in relation to a servant/master relationship, that "its aspects are functional, as well as geographical and temporal". In para 42, Gleeson CJ dealt with the circumstance of unauthorised acts as follows:
"It is clear that if the wrongful act of an employee has been authorised by the employer, the employer will be liable. The difficulty relates to unauthorised acts. The best known formulation of the test to be applied is that in Salmond, Law of Torts in the first edition in 1907, and in later editions: an employer is liable even for unauthorised acts if they are so connected with authorised acts that they may be regarded as modes - although improper modes - of doing them, but the employer is not responsible if the unauthorised and wrongful act is not so connected with the authorised act as to be a mode of doing it, but is an independent act."
35 An interesting illustration of the principle in Morris v CW Martin & Sons Limited [1966] 1 QB 716, in which the plaintiff had sent a mink stole to a furrier to be cleaned, the furrier had delivered the stole to the defendants, who were cleaners, and in their possession it was stolen by one of their employees whose duty it was to clean the fur. At 728, Lord Denning MR said:
"From all these instances we may deduce the general proposition that when a principal has in his charge the goods or belongings of another in such circumstances that he is under a duty to take all reasonable precautions to protect them from theft or depredation, then if he entrusts that duty to a servant or agent, he is answerable for the manner in which that servant or agent carries out his duty. If the servant or agent is careless so that they are stolen by a stranger, the master is liable. So also if the servant or agent himself steals them or makes away with them."
36 Ms Moore was a registration clerk. She was employed through Ms Pinter to act on Mr Williams' behalf in the stamping and lodgement of the transfer from the Corporation to Mr and Mrs Williams. The fraud which she committed was not authorised, but it was fraud committed in the course of and for the purposes of the transaction which Ms Moore was employed to do. Her fraud was fraud for which Mr Williams was responsible, it having been carried out by his agent in the course of her employment and, if it were necessary to add, for his benefit.
37 Although Ms Moore's actions of themselves were not expressed to be the basis of the claim made in the Statement of Claim, her actions were proved by the evidence before the Court. Mr Williams' responsibility for her actions was debated in the addresses of both Mr Alexis and Mr Marler. In the circumstances, the plaintiff is entitled to rely upon the acts of Ms Moore acting as agent for Mr Williams.
38 Mrs Williams has a personal entitlement to have the transfer from the Corporation rectified to reflect the agreement between the parties, the Corporation on the one hand and Mr and Mrs Williams on the other. That agreement and their common intention was that the property would be transferred from the Corporation to Mr and Mrs Williams as joint tenants. Mrs Williams has a personal entitlement to have the Register rectified to reflect the proper position.
39 For these reasons, an order should be made for the rectification of the transfer and for rectification of the Register.
40 Mr Marler submitted that rectification of the Register should not occur without the registration of the unilateral transfer. However, the rectification of the Register will simply restore the Register to its correct state as at the date when the registration of the transfer from the Corporation to Mr and Mrs Williams occurred. The unilateral transfer cannot now be recorded on the Register. It was not lodged for registration and it was not registered prior to Mr Williams' death. On Mr Williams' death the survivor of the joint tenants became entitled to the whole of the property. The unregistered unilateral transfer was ineffective to sever the joint tenancy.
41 The defendants have cross-claimed for a declaration that Mrs Williams is a constructive trustee of her share in the subject property by reason that Mr Williams made almost all the instalment payments for the purchase of the property, that he paid for substantial improvements to the property, that he met outgoings in relation to the property and that at his own expense he maintained the property.
42 As I understand it, this claim is based upon the proposition that Mrs Williams has a one half interest in the property as a tenant in common. That proposition appears from the form of the cross-claim. Mr Alexis in his address said that the cross-claim was based upon a rejection of the plaintiff's claim. Mr Marler agreed that that was how the claim was put.
43 As the plaintiff has succeeded in the claim, I need not discuss the cross-claim in any detail. It is sufficient for me to say that the evidence before the Court does not support a conclusion of a constructive trust. Mrs Williams was the wife of Mr Williams. There was a presumption of advancement in her favour. The fact that Mr Williams chose the course of severing the joint tenancy rather than of going to the Family Court to seek an order granting him a share in the property greater than one half is a strong indication that he considered himself and Mrs Williams to each have a half interest in the home and that he was content with that position.
44 I should further add that in any event the facts proved by Mr Marler do not persuade me that Mr Williams made such a substantially greater contribution to the property than Mrs Williams that a trust should be recognised.
45 For these reasons the cross-claim must be dismissed.
46 The defendants should pay the plaintiff's costs of the proceedings.
47 Counsel should bring in within 7 days minutes of the orders which they propose.
**********