BREMNER v SINCLAIR SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON P, MEAGHER and POWELL JJA 28 November 1997, 3 November 1998 Principal and agent — agent authorised to bid on behalf of principal at auction — whether authorised to delegate making of individual bids — whether authorised to delegate bidding up to a certain value — whether final bid subsequently ratified by principals Mason P Mr and Mrs Sinclair ("the vendors") between them owned "Glenburnie" near Uralla. They instructed Elders Real Estate at Armidale to submit it to auction on 20 March 1991. Mr Bremner was employed by Elders as an auctioneer. On 20 March 1991 Mr Bremner knocked down the property to Mr and Mrs Hudson for $960,000. In fact, the bid at the auction was made by Mrs Murphy who was the secretary of Mr McAllister of the Public Trust Office who represented the Hudsons. Mr Bremner signed the Contract for Sale on behalf of Mr and Mrs Hudson as purchasers, in reliance upon a written authority received from the Hudsons. The contract provided for the conventional 10% deposit. But it was not paid at the auction nor afterwards, despite promises to do so emanating from Mr and Mrs Hudson. It remained unpaid on 5 April 1991 when the vendors terminated the contract. The vendors commenced proceedings in the Equity Division. In the final form of their pleadings, they sued Mr and Mrs Hudson (as first defendants), Mr Bremner (as second defendant) and the selling agent (as third defendant). When the proceedings commenced in 1991 the selling agent was called Elders IXL Ltd. By trial its name had changed to Fosters' Brewing Group Ltd. The vendors sued the first defendants under the contract for the unpaid deposit. Alternatively, they sued the auctioneer and selling agent for breach of warranty of authority and (as to the selling agent) in negligence. Mr and Mrs Hudson denied that they had authorised the selling agent or auctioneer to sign the contract. The real issue was whether they had authorised Mrs Murphy to make the winning bid at the auction. Their denial of authority was upheld by Windeyer J at trial. In the upshot, judgment was given for Mr and Mrs Hudson against the plaintiffs, and damages for breach of warranty of authority ($96,000 plus interest) were awarded against the auctioneer and the selling agent. A Bullock order was made, requiring the second and third defendants to pay to the plaintiffs the costs they were ordered to pay the first defendants. The second and third defendants have appealed. The vendors have not filed a defensive appeal that would overturn the verdict in favour of the first defendants in the event that the second and third defendants succeed in their appeal. THE FACTS IN DETAIL At the relevant time in 1991 the marriage between Mr and Mrs Hudson had broken down. (It was later dissolved, with Mrs Hudson remaining and becoming Mrs Clissold.) But Mr Hudson at least thought there was some chance of saving the marriage and that the purchase of Glenburnie would assist. The couple's 2 UNREPORTED JUDGMENTS capacity to purchase depended upon an expected inheritance by Mrs Hudson whose existence was very shadowy but which (if it existed) was associated with the Public Trustee. Mr Hudson inspected the property with Mr Bremner after having seen it advertised in "The Land" newspaper. He told Mr Bremner that Mr McAllister would probably bid for him and his wife. When making final arrangements for the telephone bidding on 20 March Mr Hudson described Mr McAllister as "a solicitor from the Public Trustee who is handling the estate for my wife". It was when he told Mr Bremner that Mr McAllister would be bidding by phone on their behalf that Mr Bremner arranged for written authority to be sent by fax. On 20 March, the day of the auction, Mr Hudson rang Mr Bremner to tell him that Mr McAllister would be bidding for him and his wife. Mr Bremner asked for a fax giving McAllister authority to bid and giving his telephone number. This was forwarded. Shortly thereafter, Mr Bremner said that he needed an additional authority authorising him to sign the contract if the Hudsons were the successful bidders. A second fax was sent. Windeyer J found that each fax was sent with the actual authority of Mr and Mrs Hudson. The auction was to take place at the New England Hotel, Armidale. Mr Upjohn, an employee of Elders Real Estate, Armidale was deputed to be the contact point with Mr McAllister at the auction. He rang the telephone number that had been provided for Mr McAllister but was unable to establish a connection. Shortly before 11.00am when the auction was to commence the receptionist for the New England Hotel told him that she had Mrs Murphy on the line. He took the call in a small office attached to the auction room, keeping the door of that office open so that he could see Mr Bremner the auctioneer. On Mr Upjohn answering the phone, a lady said: "Tam Mrs Murphy, Mr McAllister's secretary." The auction commenced shortly afterwards. There were the usual preliminaries by the auctioneer. He gave details of the contract. The transcript reveals that there was at least one bidder in person. The first bid was for $800,000, made by telephone. Gradually the bidding rose with some of the bids coming from the "outside line". The top bid was $960,000 coming from Mr Upjohn's "outside line". The auctioneer announced that the property was on the market because the bidding had reached the reserve. There were no further bids. The property was then knocked down "to an outside buyer, a Sydney buyer". Mrs Murphy had remained on the line as the auction proceeded. She made bids, having been told by Mr Upjohn what was going on in the auction room, and those bids were relayed by Mr Upjohn to Mr Bremner. At one stage she said that she had to go to talk to her boss. According to Mr Upjohn, she moved away from the telephone, then came back and continued to bid. She "ultimately" made the successful bid of $960,000. On the fall of the hammer, Mr Upjohn congratulated her and put Mr Bremner on to talk to her. Mr Bremner went to Mr Upjohn's telephone intending to congratulate the successful bidder. Mr Upjohn told him that he had Mr McAllister's secretary Mrs Murphy on the line and that it was she who was bidding on behalf of Mr and Mrs Hudson. Mr Bremner asked her to arrange for the $96,000 deposit to be telegraphically transferred. She told him that she realised that it was urgent that the deposit be forwarded by telegraphic transfer and said that she would get Mr McAllister to arrange it. Mr Bremner then returned to the Elders office at Armidale where the counterparts of the Contract URJ BREMNER v SINCLAIR (Mason P) 3 for Sale were completed. Mr and Mrs Sinclair signed the vendors' counterpart and Mr Bremner signed the purchasers' counterpart on behalf of Mr and Mrs Hudson. Subsequently Mrs Murphy told a receptionist at Elders that, rather than send up the money, Mr McAllister would bring it the next day as he was coming to Armidale to inspect the property. A little later she rang to say the inspection trip was off and that the deposit would be sent by telegraphic transfer by late the next morning. It did not arrive. On the next day 21 March, Mrs Hudson rang Mr Bremner saying there were problems, that the trustees (presumably of the deceased estate) were not in a position to pay, but that Mr McAllister was expected to sort everything out. She rang again on 22 March to say that there were still problems about the money, that she realised that she was in trouble, and that Mr McAllister had been sacked. Mr Hudson rang Mr Bremner on the Saturday after the auction to say that he had spoken to Mr McAllister who would fix things up. By the following Monday Mr Bremner was becoming anxious and Mr Sinclair was pressing. On 25 March Mr Hudson told Mr Bremner that Mr McAllister was ill and had gone to hospital. There were further conversations which led to the vendors terminating the contract on 5 April. THE DECISION OF WINDEYER J Windeyer J records that "The shadowy figures of Mr McAllister and Mrs Murphy have not been seen and there has been no believable evidence giving details about the Walker estate. There is... no evidence from anyone at the Public Trust Office." Windeyer J held that Mr Bremner's authority to execute the contract on behalf of the purchasers was conditional upon a valid authorised bid being received. (This proposition is not in dispute in the appeal.) His Honour held that such authority was never activated because Mrs Murphy had no authority to bid for the Hudsons at the auction, since Mr McAllister had no authority to delegate that task to her. Specifically, his Honour held: "Tt was put that it was Mr McAllister who was doing the bidding and that Mrs Murphy was just his mouthpiece. There is, however, no evidence of that at all, even accepting that Mr McAllister was the boss from whom instructions were obtained during the auction. At one stage it is clear that Mrs Murphy was bidding and there is nothing to suggest anyone else was with her at the time. It was also put that the bidding was no more than a mechanical or administrative act and that therefore delegation would be implied. I do not think that to be so. Mrs Clissold said that she relied on Mr McAllister as he was a solicitor. She was not really challenged on that and I accept that to be a bidder at an auction is normally regarded as an important task. There was no express authority to delegate that task and it is not one such as would come within those where authority to delegate is implied. See Bowstead on Agency 15" ed at p127." The plaintiffs had not based their case at trial upon any submission that Mr and Mrs Hudson had ratified the agent's authority in the course of the post-auction discussions when promises were made to pay the outstanding deposit. However, such an argument was advanced by the second and third defendants (and it is repeated by them as the appellants in the appeal). Windeyer J rejected this argument because it was not established that Mr and Mrs Hudson knew that it was Mrs Murphy's (unauthorised) telephone bid that had resulted in the signing of the contract for sale on their behalf. The learned judge was in no doubt that the 4 UNREPORTED JUDGMENTS first defendants were happy with the purchase, at least initially. They considered they were bound by the contract and this, his Honour held, explained their conversations about the deposit. But the earliest time when knowledge came to Mr Hudson that Mrs Murphy had made the winning bid was on 28 March. The claim of ratification failed because there was no evidence of any actions by the Hudsons in affirmation of the contract once they became aware of the true facts. Indeed there was no evidence that Mrs Hudson herself ever knew of Mrs Murphy's bid. Submissions on the basis of ratification by acquiescence and estoppel were also rejected at trial. They were not repeated on appeal. The appellants submit that agency was established by (a) actual authority or (b) ratification. DID MRS MURPHY HAVE ACTUAL AUTHORITY BECAUSE A PURELY MINISTERIAL FUNCTION WAS DELEGATED? The appellants argue that Windeyer J should have found that the bids conveyed by telephone by Mrs Murphy were in fact being initiated by Mr McAllister in his office at the time that the auction was taking place. The respondents rely on the principle that an agent may not delegate authority in whole or in part except with the express or implied authority of the principal: Bowstead and Reynolds on Agency 16th ed para5-001. The appellants do not dispute this proposition, but they invoke the exception in relation to purely ministerial acts that do not involve "confidence or discretion": ibid; LEP International Pty Ltd v Atlanttrafic Express Service Inc (1987) 10 NSWLR 614. Mr and Mrs Hudson swore that they relied on the expertise of Mr McAllister, whom they understood to be a solicitor, in connection with the making of bids at the auction. This evidence was virtually unchallenged. What is more, it is inherently believable. Windeyer J was correct to accept it in the passage quoted. The authority given by Mr and Mrs Hudson to Mr McAllister reposed in him and him alone the judgment involved in making particular bids. After all, it was his obligation to secure the property at the cheapest price within the limit of his instructions. But it does not follow that he had to make every bid personally. If Mrs Murphy was bidding with the actual authority of Mr McAllister, referring expressly to him for instructions when necessary, her position was, as Mr Walker SC submitted, little different from that of Mr Upjohn. She would have been a conduit through which bids decided by the authorised agent (Mr McAllister) were communicated to the auctioneer. Mr and Mrs Hudson's actual authority contemplated that Mr McAllister would be bidding by telephone. It followed that he would necessarily be dependent upon information being relayed back to him about what was happening at the auction. There was no reason why such information could not have been relayed by two persons and not just one. The critical issue on this part of the case comes back to whether it can be inferred that, when Mrs Murphy spoke on the telephone to Mr Upjohn she was in effect relaying the decisions made from time to time by Mr McAllister in the exercise his personal judgment as to the best way to bid at the auction. The agent's authority having been put in issue, the onus of proof rested with the appellants. No presumption of regularity of authority is available. Whether or not some of Mr Upjohn's evidence of his conversation with Mrs Murphy was hearsay, it was not objected to. Accordingly, we may use it to base any inference URJ BREMNER v SINCLAIR (Mason P) 5 properly drawn from what Mr Upjohn heard, without concern (that he surely lacked) about the niceties of the common law of hearsay. That evidence supports the inference that Mrs Murphy was consulting Mr McAllister during at least some part of the telephone bidding. At one stage during the auction she said: "Hold on. I have to go and talk with the boss." Mr Upjohn deposed that Mrs Murphy moved away from the telephone, then came back and continued to bid. There was evidence that she was at her office because Mr Upjohn heard the sound of button being pressed as though she was using a typewriter or calculator. She told him: "I am just adding up figures while Tam waiting". The distinction between inference and conjecture is clear, in theory: see Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155 at 161, 168 (where the authorities are collected). To draw the critical inference in a case like the present, where neither Mr McAllister nor Mrs Murphy was called, "all that is necessary is that according to the course of common experience [purely ministerial conduct on Mrs Murphy's part was] the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained...." (Holloway v McFeeters (1956) 94 CLR 470 at 480-1). Windeyer J was correct in holding that there was no evidence that Mrs Murphy was the purely ministerial agent of Mr McAllister in the making of the critical bid. At no time did Mrs Murphy assert that she was in Mr McAllister's presence. The evidence suggested otherwise, because Mr Upjohn did not hear any voices in the background. And the fact that at one stage Mrs Murphy went away to speak to Mr McAllister indicates that he was not in the room with her, nor on an extension line. It therefore appears that Mr McAllister was either in another room or contacted via a telephone from another room. Even when Mr Bremner came on the phone to speak to the successful bidder and to make arrangements to collect the deposit, he was not referred to Mr McAllister. Mrs Murphy's departure from her phone to speak to Mr McAllister reveals her as unwilling to act without instructions at what, to her at least, was a, critical point in the bidding. But the evidence does not establish that the winning bid resulted from that occasion. Possible though it was that later bids (if any) made by Mrs Murphy were the product of specific instructions from Mr McAllister as to how Mrs Murphy should space her bids, I conclude that to infer this is to cross the forbidden line between inference and conjecture. The transcript of the auction is ambiguous as to whether several of the bids were made by telephone or directly from the floor. There is certainly evidence of more than one bid coming from an outside line, possibly Mrs Murphy's. Accordingly, I reject the argument that the ultimate bid was the product of Mr McAllister's personal judgment. It follows that, subject to an alternative argument relating to actual authority to which I later turn, it cannot be regarded as the act of the Hudsons' appointed agent. WAS THE WINNING BID RATIFIED? In their pleadings, the appellants alleged that the acts of ratification occurred between 22 and 26 March 1991 (in the case of Mr Hudson) and between 20 and 21 March (in the case of Mrs Hudson). However, the evidence discloses that Mrs Hudson never became aware of the involvement of Mrs Murphy prior to 5 April 1991, and that Mr Hudson only became aware on or before 28-29 March 1991, and possibly not until 4 April 1991. There were no acts of ratification pleaded by 6 UNREPORTED JUDGMENTS the appellants subsequent to Mr Hudson becoming aware of the role of Mrs Murphy and prior to termination of the contract. Ratification requires full knowledge of "all the material circumstances in which the act was done ", unless the principal intended to ratify and take the risk whatever the circumstances: see Bowstead and Reynolds §2-065; Taylor v Smith (1926) 38 CLR 48 at 59. The nature of the information that must be made available depends on the circumstances of the particular case. The benefit of hindsight and the purely subjective reasons of the principal should be put to one side. In the case of a vendor or purchaser presented with an unauthorised sale or purchase by an agent, the enquiry should be to determine what facts in the knowledge of the agent could "objectively be said to have been necessary to enable the vendor [or purchaser] to decide if he should assent to the sale": Brennan v O'Connell [1980] IR 13 at 16 per Henchy J (with whom O' Higgins CJ and Budd J agreed). It was submitted on behalf of the appellants that, if the price was acceptable to Mr and Mrs Hudson, then the identity of the bidder was irrelevant. There is attractiveness in this submission. The scales are fairly evenly balanced. However, I would reject it as a general proposition. (A specific variant of the argument is addressed below.) Mr and Mrs Hudson relied upon Mr McAllister's judgment and experience as a solicitor with the view to obtaining the property at the best available price. If the task was delegated without authority to Mrs Murphy, known to the Hudsons to be Mr McAllister's secretary, then this was a material circumstance, because her bidding skill may not have been equal to his. Windeyer J correctly rejected the ratification argument. AN ALTERNATIVE BASIS OF ACTUAL AUTHORITY? Mr Walker SC, counsel for the appellants, advanced an argument (primarily in the context of ratification, and primarily in reply: see Tr p9, p24-p29) which suggests another approach to actual authority even on the assumption that Mrs Murphy exercised her own judgment in pitching the ultimately successful bid at $960,000. When Mrs Murphy was congratulated by Mr Bremner for having placed the winning bid, she did not suggest that she anticipated problems in meeting his request that the 10% deposit of $96,000 should be urgently transferred telegraphically. It is highly unlikely that she would have spoken this way without the actual authority of Mr McAllister. That, coupled with evidence to which I now turn, demonstrates to my satisfaction that Mr McAllister gave actual instructions to go as high as $960,000 if necessary. The only authority given to Mr McAllister was to bid at the auction. The written authority spoke of him having "permission... to act as bidder" (AB 54). Mr McAllister was not authorised to enter into binding negotiations otherwise. It appears that Mrs Hudson was privy to the fact that the reserve price was $960,000, or at least that this was the price at which the vendors would be likely to sell (AB 220-222). (Mr Bremner's remarks at the auction confirmed that it was the reserve price.) Mrs Hudson's instructions to Mr McAllister on the eve of the auction were to inform him of the reserve price and instruct him to bid. As Mr Walker submits, this was authority to keep bidding at least up to $960,000. The terms of the contract offered at the auction were negotiable only as to price. On the morning of the auction Mrs Hudson spoke to Mr McAllister and confirmed with him that there were sufficient funds (in the estate) to go as high as $960,000 (AB 140, 235-6). This confirms that his instructions extended to bidding as high URJ BREMNER v SINCLAIR (Meagher JA) 7 as $960,000, if that was required to secure the property. And the later statements from Mr and Mrs Hudson to the effect that they were satisfied with $960,000 is further evidence of this, even if insufficient to ratify an unauthorised purchase. Nothing indicates that the property came onto the market until Mrs Murphy's $960,000 bid. At that stage Mr Bremner consulted "the vendor" and then announced: "Ladies and gentlemen we have just been advised that Glenburnie is on the market. We have reached the reserve and we are playing for keeps". There were no other bids. The property was knocked down to the "outside buyer, a Sydney buyer", being the principal on whose behalf Mr Upjohn was relaying bidding to the auction room. This, coupled with the Hudsons' fax, gave the auctioneer authority to sign the contract on the purchasers' behalf (see Wright v Madden [1992] 1 Qd R 343), so long as the principal had given authority for this to occur. In my view that authority had been given. Mr McAllister's instructions were to bid (at least) as high as $960,000, if necessary to secure the property. It was necessary. There is nothing to suggest that the property would have sold at the auction for any lower price. The penultimate bid of $950,000 was not accepted. It was below the reserve. The auctioneer announced that "if it will help I will accept a rise of ten thousand dollars". True, the vendors could have dropped or varied the reserve, but they did not do so, and it would be speculative to infer that they would have. Even a ministerial agent could be instructed "if all else fails, you must go as high as $X if necessary to secure the property at the auction". I would infer that Mrs Murphy had such instructions if (ex hypothesi) she was not placing individual bids at the behest of Mr McAllister. On this basis the ultimate bid of $960,000 was duly authorised by Mr and Mrs Hudson. DISPOSITION OF APPEAL The appeal succeeds on this basis. I have considered anxiously whether there is any impediment to reliance upon it, given that it was only developed during oral submission in the appeal. No objection was raised to the argument which I have accepted and I am unable to see any different way in which the case would have been fought below had the case been developed there in the way that has led me to reach a different conclusion to that of the trial judge. The late raising of the argument should however be reflected in costs. The appellants joined Mr and Mrs Hudson as second respondents to the appeal, seeking an order that a verdict be entered against them in favour of the first respondents (the vendors). This claim was properly abandoned during argument. The appellants should therefore pay the costs of these parties. I propose the following orders: 1. Appeal allowed in part. 2. Set aside the judgment and orders made against the second and third defendants on 1 September 1995 and 14 September 1995. 3. Order that the second and third defendants have judgment against the plaintiffs, with costs of the proceedings at first instance. 4. No order as to the costs of the appeal as between the appellants and the first respondents. 5. Appellants to pay the costs of the second respondents of the appeal. Meagher JA I agree with Mason P. 8 UNREPORTED JUDGMENTS Powell JA I have read, in draft, the Judgment which has been prepared by Mason P, with which Judgment I understand Meagher JA to agree. For the reasons which I will shortly record I regret that I am unable to agree with that Judgment, and am of the opinion that the appeal should be dismissed with costs. Although, in the Notice of Appeal which was filed on behalf of the Appellants, a number of grounds of appeal were taken, in the Amended Outline of Submissions which was lodged with the Court prior to the hearing of the appeal, only two grounds of appeal were advanced. Those grounds of appeal were in the following form: "3, On the evidence noted above, as a matter of substance and fact Mr McAllister indeed was the bidder, because Mrs Murphy on the balance of probabilities, merely passed on his instructions. As such, she was in no different position from that of Mr Upjohn who played a role which could not sensibly be described as that of a true bidder. Those are the inferences which His Honour should have drawn from virtually unchallenged evidence. 4. Even if the contract were signed on the basis of an unauthorised bid by Mrs Murphy, Mr Hudson and Mrs Clissold ratified the contract (and thus rendered irrelevant the lack of authority for the antecedent bid) by their unequivocal expressions of approval of the contract and their plain statements of their intention to complete it [AB 286 F-J]. In law, the question will be whether their conduct was what some have called a blanket ratification ie. conduct which accepts the bidding (sic - semble binding) nature of the transaction regardless of antecedent or integral vitiating factors and regardless, in particular, whether they are known to the principal or not. On the other hand, the approach taken by His Honour is that a principal should have adequate knowledge of the relevant circumstances (including the vitiating factors) in order that such conduct (eg by Mr Hudson and Mrs Clissold in this case) can be taken as rectification of the unauthorised transaction [AB 286 I-M]. 5. All conditions except for price were plainly acceptable to Mr Hudson and Mrs Clissold before the bidding commenced - because otherwise they would not have participated in the auction at all. The price was one with which they were plainly content - they accepted it and were willing to pay it. There is no question of any of the commercial terms going beyond what they were content for their agent (bidder or auctioneer) to engage on their behalf. The story thereafter is still very odd, in terms of Mrs Clissold's plans to finance the purchase - but in one critical respect it is a very familiar tale in vendor/purchaser litigation, viz unexpected or unanticipated difficulty or delay in obtaining finance leading to the purchaser casting about for any technical reason or pretext to avoid or delay enforcement of the obligation to buy [AB 281T-283L]. In this case, a powerful rhetorical question which the Appellant (sic) asks is 'why would the identity of the person - be it Mr McAllister, Mrs Murphy or Mr Upjohn - who placed the successful bid matter, so long as the purchasers were happy with the size of the land (ie. the price) and its successful outcome." As will be apparent, the Appellants, in their Amended Submissions, did not seek to advance, as an alternative to what was put in para3, the argument that, even if it were held that Mrs Murphy was not placing individual bids at the behest of Mr McAllister, she ought nonetheless to be held to be placing bids pursuant to an authority, given to her by Mr McAllister, to bid up to $960,000.00 if necessary to secure the property at auction. That this should have been so is hardly a matter for surprise, first, since no such argument appears to have been URJ BREMNER v SINCLAIR (Powell JA) 9 advanced in the proceedings at first instance; and, second, since the Notice of Appeal did not contain any ground of appeal to that effect. The manner in which, in this respect, the proceedings were conducted at first instance sufficiently appears from the following passage in Windeyer J's Judgment (AB 283-284): "T turn to the legal questions. I should say at the outset that the case of the first defendants was that there was no contract binding on them because Mrs Murphy had no authority to bid for them at the auction as Mr McAllister had no authority to delegate that task to her. As the authority to execute the contract was clearly conditional upon a valid authorised bid being received that authority was never activated. The plaintiffs adopted this position, in effect abandoning their claim against the first defendants. I consider this defence of the first defendants made out. It was put that it was Mr McAllister who was doing the bidding and that Mrs Murphy was just his mouthpiece. There is, however, no evidence of that at all, even accepting that Mr McAllister was the boss from whom instructions were received during the auction. At one stage it is clear that Mrs Murphy was bidding and there is nothing to suggest anyone was with her at the time. It was also put that the bidding was no more than a mechanical or administrative act and that therefore delegation would be implied I do not think that to be so. Mrs Clissold said that she relied upon Mr McAllister as he was a solicitor. She was not really challenged on that and I accept that to be a bidder at an auction is normally regarded as an important task. There was no express authority to delegate that task and it is not one such as would come within those where authority to delegate is implied. See Bowstead on Agency 15" Edition at p127." So far as the second matter is concerned, it is to be noted that the first four grounds of appeal - the only grounds of appeal directed to this issue - were as follows: "1. His Honour erred in finding that there was no evidence at all upon which he could conclude that Mrs Murphy was just the mouth piece of Mr McAllister (the authorised bidder) in making the telephone bids. 2. His Honour should have concluded that when Mrs Murphy telephoned (supposedly by pre-arrangement with Mr McAllister) and said that she was the secretary of Mr McAllister and said that she had to check with her boss, as recognised on the evidence to be Mr McAllister, during the course of the bidding, that she was in fact the mouth piece of Mr McAllister in making the bids. 3. His Honour should have concluded that there was a valid and authorised bid on behalf of the purchasers which gave rise to the auctioneers authority to sign the contract on the purchasers' behalf. 4. His Honour should have found that the purchasers pre-approved the purchase of the relevant property at the price of $960,000.00 in the giving of instructions for telephone bids to be made on their behalf." (my emphasis) In the circumstances, it seems to me that even if - which, with respect to Mason P, in my view did not occur - counsel for the Appellants had sought, on the hearing of the appeal to raise the alternative argument as to Mrs Murphy's authority to which I have earlier referred, that argument ought not to have been - and it should not now be - entertained (see, for example, Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, 438; University of Wollongong v Metwally (No 2) (1985) 59 ALJR, 481, 483; 60 ALR 68,71; Coulton v Holcombe (1986) 162 CLR 1, 7-8; Water Board v Moustakas (1988) 180 CLR 491, 497). 10 UNREPORTED JUDGMENTS I did not, on the hearing of the appeal, understand counsel for the Appellants to advance that alternative argument, nor, despite since having read, on a number of occasions, the passages in the transcript on the hearing of the appeal to which Mason P has referred on p16 of his Judgment, am I, even now, able to discern any such argument being advanced. The passage on p9 of the transcript, "... no one has ever suggested in this case that Mrs Murphy exceeded what either Mrs Clissold or Mr McAllister wanted to be done by way of bidding...", was but part of a submission that the Respondents' conduct ought to be regarded as constituting ratification despite the fact that at the relevant time, the Respondents were not aware that it had been Mrs Murphy, and not Mr McAllister, who made the relevant bid. So, too, the passage at p24 of the transcript was but part of a submission in reply directed again to the question of ratification, as the following extract from the transcript - the part relied upon by Mason P being underlined - makes clear: "WALKER: There was a deal of speculation by my learned friend Mr Armfield about what might have been said or what might have been done had Mr McAllister's intelligence not been applied to the knowledge of the purchasers to the bidding exercise, had they been told that he had not been on the job. Obviously your Honours appreciate that the inferences that we seek you to draw for our first point would reassure his clients, obviously enough, his intelligence was applied. Second, while accepting completely that there is the world of difference between the judgment a solicitor specifically entrusts with the task can give to the bidding exercise, and a secretary who is off on a frolic of her own, doing, that is, without guidance, which is what they must be asking you to find. While there is a world of difference in that it cannot be shown in this case that there as any such difference at all. That is because there is a very plain pattern of fact established, we do not have to speculate or prothesis as to what happened in order to yield the price of $9,600 with which they were content. It is no accidents they were content with $960,000. I take your Honours to p940, Mr Armfield's client on oath about her dealings with the elusive Mr McAllister. She is giving him his orders. At paral3, the evening before the auction she telephoned him and said, 'It's on tomorrow. The reserve price is $90,600. Will you please bid for me?' Those two sentences together mean, 'Please bid at least $960,000 to get this property'. That does not mean, 'Make that your first bid.' It does not mean, 'By all means pay $960,000 regardless of what the underbidder was prepared to offer. But it does mean certainly, 'Your mandate, your instruction, is to press on bidding at least to $9,600.' Because if she says the reserve is $960,000 and that is, 'Reserve it for me.' That is, 'Buy it for me.' Then she says, 'Go to $960,000 at least.'" (Mr Armfield being counsel who appeared both on the hearing at first instance and on the hearing of the appeal for Mrs Clissold.) I am completely at a loss to discern what Mason P seeks to draw from the underlined parts of the material on p26 of the transcript to which my attention has been drawn, which parts appear in the following context: - "WALKER: But she told him to bid. You do not find words of general negotiation, just bid. POWELL JA: But he might say in his discretion, 'I will not bid up to the top because they are not going to make the reserve.' URJ BREMNER v SINCLAIR (Powell JA) 11 WALKER: He would be in breach of his mandate if he had allowed this to be taken off the floor of the auction to go to the back room. Your Honour is quite correct, it may be that that is the judicious breach of trust that one would want of a trustee, but it would be a breach of his mandate. MASON P: Why, because a phone bidder could not assume the status of being the highest underbidder? WALKER: No, what Powell J has put to me is that maybe the discretion and skill that one looks to a solicitor for would have involved having a mandate to bid up to 960 at least. But not bidding as he had hung at or around 960 in the hope that the auctioneer would take it off the floor, he finished and no longer would bidders be entitled to force a deal, and then it would be up to negotiation and discretion in the back room. At that point of course if everything went well I suppose there would have been a ratification. But if things went badly why would that agent not be liable in breach of contracts? Obviously for breach of contract, you were told to bid, we can prove on the facts that a bid of 960 would have got it. "You exercised your judgment, without me ever asking you to exercise your judgment so as not to bid, in the hope that you could get it for me before the last inadequate bid on the floor of the auction.' So although what your Honour put to me as the kind of skill and judgment one might want from an experienced solicitor or man of business, that is not what the evidence showed that Mrs Clissold wanted. These people wanted a property, she said to him, 'I know the reserve, it's 960, bid for me.'" Finally, it seems to me that, when seen in its context, the passage - which is underlined - on p28 of the transcript to which my attention has been directed is, yet again, directed to the question of ratification: "POWELL JA: I haven't checked this contract, does this reserve the right to bid? WALKER: It reserves more than one right. In the transcript at the beginning, although it is not absolutely clear at 159K, "The sale is subject... vendor is reserved.' Then one goes back to the agreement. "The right to make one bid'. There is no other number stipulated in the agreement as far as we can see. So that it was the reserve price of a familiar kind. But our point is that it is the minimum the vendor was prepared to sell at. McAllister was told to bid. Mrs Clissold has to live by the words she wore. He was told to bid, not to 'do the best you can for me in the back room rather than on the floor of the auction if you think that appropriate' but to bid. Either he or his minister, point 1, or his secretary - clearly not on a frolic of her own but we will assume under an unauthorised subdelegation - did just that by increments which are not alarming and which give no substance whatever to the speculation that Mrs Clissold or Mr Hudson would have been alarmed at having missed out on Mr McAllister's final judgment. This auction proceeded by a set of events which is entirely unexceptionable and there is nothing about which they could possibly have complained, had they known everything at the spot in terms of the setting of the price. For the reasons set out by Mason P on p9-p14 of his Judgment I would dismiss the appeal with costs. 1. Appeal allowed in part. 2. Set aside the judgment and orders made against the second and third defendants on | September 1995 and 14 September 1995. 12 UNREPORTED JUDGMENTS 3. Order that the second and third defendants have judgment against the plaintiffs, with costs of the proceedings at first instance. 4. No order as to the costs of the appeal as between the appellants and the first respondents. 5 5. Appellants to pay the costs of the second respondents of the appeal. Counsel for the appellant: B Walker SC Solicitors for the appellant: Corrs Chambers Westgarth 10 Counsel for the respondents: S White (R1), K Smark (1st Named R2) and JE Armfield (2nd Named R2) Solicitors for the respondent: John M Fitzgerald & Assoc (R1), Marsdens (1st Named R2) and 15 G Cavanagh (2nd Named R2)