Tuke v JD Classics Ltd

Agency may arise without formalities where the parties’ words and conduct objectively show authority for one party to act on behalf of the other. The court must assess the parties’ consent and conduct, including the surrounding circumstances and, with less weight, later dealings. An agreement for a percentage commission for selling goods may support the conclusion that the intermediary acts as agent rather than as principal buying and reselling for its own account. Subjective belief is generally irrelevant. Where an agent is authorised to negotiate, conclude sales and receive payment, the principal bears the legal consequences of that agency.

Mr Tuke claimed that JD acted as his agent in the purchase and subsequent sale of classic cars between 2010 and 2016. JD contended that it purchased the cars as principal, except for one transaction which it accepted it had arranged as an intermediary. The evidence consisted principally of Mr Tuke’s oral evidence, emails and certain invoices. The central issue was whether the parties had created an agency relationship, in particular through their September 2010 email exchange agreeing a 10 per cent commission on the uplift from purchase.

1. Agency and objective assessment. Agency is a fiduciary relationship which may arise without formalities. Authority may be express or implied from the parties’ conduct. The court assesses objectively whether the parties consented to one party acting on behalf of the other. Earlier dealings may provide background, while later dealings may also be relevant, though generally with less weight.
2. Creation of the agency. The First Meeting in December 2009 did not itself establish an agency for sales because there had been no sufficiently detailed discussion of selling cars. The September 2010 email exchange did establish the relationship. Mr Tuke proposed that JD should receive 10 per cent of the uplift from purchase for selling his cars. Mr Hood accepted that proposal and referred to moving cars for Mr Tuke. The agreement was sufficiently certain and amounted to a commission arrangement.
3. Objective evidence. The parties’ later conduct substantially supported the September 2010 agreement. JD repeatedly represented that it was selling or negotiating sales for Mr Tuke, sought buyers, received payments on his behalf and treated him as bearing the risk that third-party buyers might pay late or not pay. The invoices did not establish that JD was the buyer. The fact that some conduct was misleading or potentially fiduciary wrongdoing did not itself create the agency; it was relevant as evidence of how the parties conducted their dealings.
4. Scope and disposition. The September 2010 agreement remained in force throughout the Sales Transactions, including transactions where no commission was invoiced or where the cars were exchanged. JD had authority to negotiate and conclude sales and receive payment for Mr Tuke. The court therefore granted the relief claimed: delivery up of the relevant documents and directions for an account and payment of the amount shown to be due.