Peninsular and Oriental Steam Navigation Company v Johnson [1938] HCA 16

60 C.L.R.J OF AUSTRALIA.

{HIGH COURT OF AUSTRALIA.)

PENINSULAR AND ORIENTAL STEAM) NAVIGATION COMPANY f PLarntiFF,

APPELLANT ;

AND

JOHNSON AND OTHERS . A - . Responpents. DrEvENDANTS,

ON APPEAL FROM THE SUPREME COURT OF WESTERN AUSTRALIA.

Company—Appointment of agents—Remuneration—Amalgamation of agents and ,

formation of company to take over rights and obligations of agency—Directors of both companies—Fraud—General account.

A company carrying on the business of coal-mining appointed two other companies joint agents for the sale of its coal for bunkering and export at a remuneration of 2s. 6d. a ton sold and upon terms that the joint agents would bear all commissions to oversea agents and sub-agents. It was found desir- able to allow particular selling agents in London a commission of Is. a ton, and, notwithstanding the terms of the joint agents' remuneration, the board of directors of the colliery company resolved that the accounts of these agents for sub-commissions paid by them to secure bunkering for the company, not exceeding Is. a ton, be recognized during a specified twelve months. The colliery company's board of directors included the managing directors of the respective companies which were joint agents. By an article of association of the colliery company it was provided that "no director shall be disqualified by his office from entering into any contract or arrangement with the company either as vendor, purchaser, broker, banker, solicitor, commission agent or otherwise, but no such director shall vote in respect of any such contract or arrangement in which he is so interested as aforesaid, or if he does his vote shall not be counted." 1s. a ton was paid to the selling agents in question out of the funds of the colliery company and was not borne by the joint selling

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