FIDUCIARY RELATIONSHIP.

Hawera Star, Volume XLV, 12 November 1925, Page 6

FIDUCIARY RELATIONSHIP.

LAND AGENTS AND PRINCIPALS. , LECTURE BY MR. BARTON.. Under the auspices of the Hawera Accountant Students’ Society Mr. J. S. Barton, S.M., F.1.A.N.Z., delivered an interesting lecture in the Borough Council Chambers last evening' on “The fiduciary relationship of land agents to t-Beir principals.” Mr. C. H. Suisted presided oyer an attendance of about thirty. Referring to the study of tlie law of agency or any one aspect of it, Mr. Barton sounded a note of warning to any who. might expect to find a complete code of law relating to the subject matter. The Bills of Exchange Act, codifying a body of commercial customs and laws, some of them running hack to the very beginning of tracTe, which Act had been amended from time to time, came the closest to being a complete code; but one of the greatest dangers that bankers had before them to-day was any tendency to look to the Bills of. Exchange Act as if it were a complete code. It was impossible to keep common law out of any special branch of law, and it had to "be remembered that when one had made a complete study of any branch of law he had not got a complete code upon which he could rely 7. Further, it was slight information that led to optimism in such matters. Fuller knowledge indicated the impossibility of providing the complete . code. it was not possible therefore to give a complete code to the law of agency or to arrive at a complete code relative to land agents. Proceeding, he said that a land agent was one of a class that came within the rule that liis principal was entitled .to expect , a degree of care and skill. There was no general rule of law that made a man liable for giving wrong advice leading to pecuniary ioss, umess such advice were asked and were given where there was a relationship mat made it a duty on the part of that man to take care. Mr. liarton quoted eases decided in courts oi law, m winch it was clearly shown that there was no liability on a person who gave advice, because it was given on a fnenuiy basis and not in tlie course of duty as an agent. He quoted cases, however, where tlie liability was on tiie agent, because lie failed to take proper care in giving advice to his principal. 'lke case of Brown v. Thorns was one of the most illuminative from the point of view of land agents’ obligations. It was found that tne agent had been negligent in giving information, and judgment was given against him for £2845 by way of damages. The. agent had made statements without any proper care in verifying them.

The relationship between land agent and principal was one based on good faith. Certain classes of contract required the utmost good, faith between the parties, and the contract of agency, and particularly l the contract or land agency, were cases where the agent stood in a fiduciary relationship to his principal. A land agent might be found liable simply 7 because he tailed to disclose to his principal something which he knew. The test to apply, n it were .sought to show liability of au agent was contained in the question, ‘ ‘Does the agent’s personal interest in the matter conflict with bis duty to his principal-'?” When a principal appointed an agent he was entitled to the agent’s disinterested care and skill for his exclusive benefit, and when the agent’s reliability had been broken down by consideration for the interests of the other side it was impossible to know to what extent the principal had suffered,, and it was held in principle that the agent must disgorge noth the secret commission and the commission lie had stipulated to his principal.

In, most of the cases that came before the courts the trouble was traceable to the agent trying to act for both parties. Wherq an agent was so concerned with both parties, he could not do safely anything more than act to bring the parties together, and then let them negotiate lor themselevs. If the agent attempted to do otherwise he was, almost certain to leave either of the parties a loophole to .shoot at him if they later became dissatisfied \yith their bargain.

At the conclusion of Air. Barton’s address, Air. Allan asked if, in the event of a land figent introducing a purchaser to a vendor, naming a certain price and leaving the two to make their owii contract, in the event of the purchase price being arranged at a lower figure would the agent be entitled to a commission.

Air. Barton said that in general terms the agent would. The courts had always been very careful and fair in getting .at the real nature of the transaction. The principle was that if the efforts of the agent were the real cause of the transaction he would recover his commission.

There were no more questions and, on the motion of Alessrs G. A. Duncan and E. G. Fletcher, a hearty vote of thanks to Air. Barton was carried by acclamation.