3VB appear in Supreme Court in commercial distributorship case.

Nicholas Craig on behalf of the Appellants and Philip Hinks for the Respondents appeared in the matter of Bailey and another (Respondents) v Angove’s PTY Limited (Appellant)

The appeal concerned two issues.  The first was as to the circumstances in which the law treats the authority of an agent as irrevocable and the second, essentially, as to the correctness of the decisions in Neste Oy v Lloyd’s Bank plc [1983] 2 Lloyd’s Rep 658 and In re Japan Leasing Europe plc [1999] BPIR 911.

In relation to the first issue, the Supreme Court held that the authority of an agent is inherently terminable (even where expressed to be irrevocable) unless coupled with a relevant interest of the agent, namely that the authority is given to secure a subsisting proprietary interest or personal liability of the agent.

In relation to the second issue, the Supreme Court held that where money was paid for a consideration which the payee knew at the time of receipt was bound to fail by reason of his imminent insolvency did not, of itself, give rise to a constructive trust of the money in the payee’s hands.  It was not unconscionable for the payee to retain the money because the statutory insolvency regime intervened to require it to be shared pari passu with other creditors.  Neste Oy and In re Japan Leasing Europe plc were overruled.

The successful appellant was represented by Stephen Moriarty QC of Fountain Court Chambers, leading Professor Francis Reynolds QC (Hon) of 7 KBW, and Nicholas Craig of 3VB. Philip Hinks was led by Jamie Riley of Littleton Chambers.

The Supreme Court Judgment can be found here.