Knight Frank LLP v Du Haney

An agent’s warranty of authority is strict, but it ordinarily warrants only the existence of authority to act for the principal. It does not, without more, guarantee the precise accuracy of the principal’s name where the principal has been identified adequately for practical purposes. A claimant must also show that the representation induced it to act when it would otherwise have refrained. An agent who clearly contracts as agent is not personally liable merely because the principal’s name is misspelt or inaccurately stated.

Knight Frank LLP claimed £70,500 from Aston Du Haney for unpaid fees for a development appraisal. Du Haney had signed the retainer as agent for entities whose names were variously stated as Morecambe Investment Limited, Morecombe Investments Limited and Morecambe Investment Company Limited.

The Central London Civil Justice Centre dismissed the claim. Knight Frank appealed on breach of warranty of authority and personal liability on the contract. The central issues were whether the misdescription of the principal’s name engaged either liability and whether the representation had induced Knight Frank to undertake the work.

1. Appeal dismissed. The respondent had made clear that he acted as agent only and had not contracted as principal. The findings supported the conclusion that he was acting for the entity negotiating to purchase the site, or at least that the appellant had not shown otherwise.
2. A warranty of authority is strict and may be breached despite good faith or careful conduct. Its basic content is a warranty of authority from the principal. It is not ordinarily a guarantee that the principal’s name has been stated with precise accuracy. The respondent had identified the principal adequately for practical purposes, and the misspelling and use of the plural form did not establish breach.
3. The reasoning in AMB Generali Holding AG v SEB Trygg Liv Holding Aktiebolag [2006] 1 Ll Rep 318 concerning a solicitor’s lack of warranty as to the accuracy of a client’s name was applicable by analogy.
4. For breach of warranty of authority, the third party must have been induced by the representation to act in a manner in which it would not otherwise have acted. Knight Frank relied on the representation that the respondent had authority to act for the entity involved in the purchase, but the precise name or location of that entity was immaterial to its decision to undertake the work.
5. Hersom v Bernett [1955] 1QB 98 did not establish personal liability merely from incorrect identification of a principal. The preferable analysis may be that an agent is treated as having no principal and is liable for breach of warranty of authority, unless there is evidence that he acted for himself or circumstances prevent him denying personal status. Those circumstances were absent here.
6. The appellant had not shown that the respondent lacked authority, that Morecambe Investment Company Limited did not exist, or that the respondent was not acting as agent. The claim therefore failed under both heads.

• Court of Appeal (Civil Division): Appeal from the Central London Civil Justice Centre, where His Honour Judge Hand QC dismissed Knight Frank LLP’s claim. The Court of Appeal dismissed the appeal.