The Gazette 1987

JANUARY/FEBRUARY 1 9 87

GAZETTE

cipal is entitled to dismiss the agent. 75 Duty Not to Accept Bribes or Secret Commission An agent is under a fiduciary duty not to accept bribes 76 or secret commissions. 77 Nor is an agent allowed to enter into an agreement expecting a bribe or secret commission. In the context of civil law, 78 a bribe has been judicially defined as: "For the purpose of civil law a bribe means the payment of a secret commission, which only means (i) that the person mak- ing the payment makes it to the agent of the other person with whom he is dealing; (ii) that he makes it to that person knowing that that person is acting as the agent of the other person with whom he is dealing; (iii) that he fails to disclose to the other per- son with whom he is dealing that he has made that payment to the person whom he knows to be the other person's agent." 79 A number of consequences flow from an agent accepting bribes or secret commissions. First, the principal is entitled to dismiss the agent. 80 In Boston Deep Sea Fishing & ice Co. v Ansel/, 8 1 a company director (agent) accepted bribes. Those bribes were held to be sufficient to ex post facto justify his earlier dismissal (which had been for an insufficient reason). Secondly, the agent is not entitl- ed to remuneration or indemnity from the principal. 82 Of course, the agent cannot recover an unpaid bribe from the third party 83 that would allow him or her to profit from a wrong! 84 Thirdly, if the principal has paid the commission to the agent, then it is recoverable by the principal. 85 Irish Stenographers Limited (Director: Sheila Kavanagh) Qualified Experienced Stenographers. Fast, efficient service. Overnight Transcripts by arrangement Contact: Secretary, "Hillcrest", Dargle Valley, Bray, Co. Wicklow. Telephone: 01-862184

Fourthly, the agent who takes a bribe is liable to the principal either in an action for money had and received, 86 or in damages for fraud. 87 The principal must choose (i.e. elect) because the principal cannot recover twice over. If the principal takes an action for money had and received, then the bribe bears interest from the date of its receipt by the agent; 88 but if the bribe took the form of property, then the agent is liable to account to the principal for the highest value the property had while in the agent's possession. 89 The prin- cipal is not entitled to recover from the agent the bribe or secret com- mission where the principal knew of the fact that the agent was receiving such payment. 90 Fifthly, the principal may elect to repudiate any transaction which was entered into by the agent as a result of a bribe. 91 Remedies for Breeches of Duty If an agent breaches one of the duties to the principal, what remedies are available to the prin- cipal? 92 There are at least seven possible remedies. The most important of these remedies are an action for damages; dismissal of the agent; action for account; action for breach of contract; action for torts committed; an The agent may be liable in damages. These damages may be recoverable either in contract or tort. It must be stressed that first, gratuitous (i.e. non-contractual) agents cannot be liable in contract 93 (but they may be liable in tort) and secondly, damages in tort would be available where there is a duty of care. 94 The measure of damages in con- tract is the actual loss sustained by the principal 95 which is the natural and probable consequence of the breach, 96 or within the contempla- tion of the parties at the time the contract was made. 97 The learned editors of Halshury's Laws of England state: "Where owing to the negligence of the agent the principal has been convicted of a criminal offence, whether or not the prin- cipal can recover by way of damages for that negligence any penalty imposed on him upon his injunction; and interest. (1) Action for Damages

conviction is the subject of con- flicting authorities, but, where the liability for the offence is absolute, and the principal has not himself been guilty of any fault, negligence or dishonesty, but he has been grossly misled by his agent, he has been held entitled to recover the amount of the penalty from the agent. 98 " 99 (2) Dismissal of the Agent A principal in a continuing agen- cy who discovers that the agent breached a duty is entitled to dismiss that agent without giving notice or paying compensation. The agent's breach of duty may ex post facto j us t i fy an earlier dismissal. 100 (3) Action for Account If the agent fails to pay to the principal on demand moneys received in the course of the agency, the principal may bring an action for money had and received 101 and, possibly, also claim an account. 102 Where an action for account is successfully maintained, the agent is obliged to disclose all the money received by him or her on behalf of the principal. 103 An agent is entitled to deduct any lawful 104 expenses and any sums due to the agent from the principal 105 once they have become due. 106 As a general rule, settled accounts cannot be reopened. 107 (4) Action for Breach of Contract Where the agency agreement is a contractual one, the principal can sue for breach of contract. 108 (5) Action for Torts Committed Where a duty of care exists, a principal can sue the agent for any torts committed. For example, if the agent does not hand over the property received for and on behalf of the principal, the latter can bring an action for conversion of property. 109 (6) Injunction If an agent breaches a duty (such as disclosing or improperly using confidential information, 110 then the most appropriate remedy may be an injunction to restrain the defendant.

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