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GAZETTE
JANUARY/FEBRUARY 1 9 87
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
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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
injunction; and interest.
(1) Action for Damages
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
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.
21