Agency

November 22nd, 2017

In Haringey LBC v Ahmed (2017) EWCA Civ 1861, where the Council claimed possession of a property, the Court of Appeal held, in allowing the Council’s appeal against the dismissal of its claim, that a Judge had been wrong to find that a husband who had taken sole responsibility for securing accommodation for his family had acted as agent for his wife when entering into a secure tenancy in their joint names. The Judge’s finding that the wife had not been involved in, or informed about, the tenancy meant that the usual characteristics of an agency were absent, in the absence of agency, the husband had been the sole tenant.  Therefore, when he left the property, the wife could not defend possession proceedings on the basis that she was a joint tenant.

Hamblen LJ, with whom Lewison LJ agreed, stated the relevant principles with respect to agency as follows:-

(1) Agreement between principal and agent may be implied in a case where one party has conducted himself towards another in such a way that it is reasonable for that other to infer from that conduct assent to an agency relationship.

(2) Assent to an agency relationship may therefore be inferred.

(3) It is not necessary for parties to have directed themselves to whether an agency relationship exists between them.

(4) In considering whether or not assent is to be inferred it is important to have regard to what an agency relationship is and thus to what the parties are meant to be assenting.

(5) A helpful definition of agency is that:

(i) Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act or so acts pursuant to the manifestation. The one on whose behalf the act or acts are to be done is called the principal. The one who is to act is called the agent. Any person other than the principal and the agent may be referred to as a third party.

(ii) In respect of the acts to which the principal so assents, the agent is said to have authority to act; and this authority constitutes a power to affect the principal’s legal relations with third parties.

(iii) Where the agent’s authority results from a manifestation of assent that he should represent or act for the principal expressly or impliedly made by the principal to the agent himself, the authority is called actual authority, express or implied. But the agent may also have authority resulting from such a manifestation made by the principal to a third party; such authority is called apparent authority.

(iv) A person may have the same fiduciary relationship with a principal where he acts on behalf of that principal but has no authority to affect the principal’s relations with third parties. Because of the fiduciary relationship such a person may also be called an agent.

(5) The usual characteristics of an agency relationship may be said to be authority for the agent to affect the principal’s relationship with third parties, a fiduciary duty owed by the agent to the principal, and an ability on the part of the principal to exercise a degree of control over the agent.

(6) The absence of any of these main characteristics must be a significant pointer away from the characterisation of a particular relationship as one of agency, even though there may be rare exceptions.

The Judgment also deals with the principles regarding ratification.

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