The Profits of a Self‐Appointed Agent
| Author | W. R. Cornish |
| DOI | http://doi.org/10.1111/j.1468-2230.1965.tb02911.x |
| Published date | 01 September 1965 |
| Date | 01 September 1965 |
SEPT.
19M
NOTES
OF
CASES
587
The chief value
of
this decision lies in the pragmatic approach
of
the court
to
the problem. There is no hint in the judgment
of
any metaphysical relationship of a corporate officer to the corpora-
tion for which he acts. There is
no
hint
of
abstract constitu-
tionalism in the court’s approach. Rather, there was a careful
factual analysis of the workings of the management of the plaintiff
company. This is, it is submitted, commendably sound. By
declining to fasten constitutional shackles to personal corporate
liability it will be possible to
fit
corporations with complex, decen-
tralised modes
of
organisation into
a
meaningful framework
of
liability. Corporations, seemingly, will be liable for the acts and
omissions
of
“
top management,” but the issue which is comprehen-
ded by this term will be decided by careful investigation and
analysis of particular corporate organisations in relation to the facts
of particular cases. To the analytical purist this must seem objec-
tionable. There is an element of discretion in determining in respect
of whose actions the corporation is to be personally liable. There is
no clear analytical distinction in kind between personal and
vicarious corporate liability. The organic allusions
of
Lord Haldane
in
I,e?incrrrE’s
case presumably represent little more than pleasing
rhetoric.” Perhaps even more discouraging to the analytical purist,
there is
not
even one clear idea of the nature
of
corporate represen-
tation. The
ulter
ego
idea is not, and probably should not be, in
undisputed possession of the whole field for all purposes.18
As
a
practical matter, however, investigations into questions of organi-
sation and control are likely to yield more useful results than
a
descent into the sterility of concepts concerning the corporate entity
and the nature of corporate repre~entati0n.l~
L.
H.
LEIGH.
THE
PROFITS
OF
A
SELF-APPOINTED AGENT
Phipps
v.
Ronrdmcin
adds in several ways to our knowledge of the
extent
of
the principle that a fiduciary must disgorge improperly
made profits to a person on whose behalf he has acted.
The transactions which gave rise to the case were extensive and
can only be given here
in
outline.
A
testator created a trust in
favour
of
his widow and children, three of whom were living at the
17
Note
6
above.
18
For
soine purposes, directors are treated as agents. See the line
of
cases under
the rule
in
Royal British
Bank v.
Turquand
(1856)
6
E.
&
B.
327
and. in
particular,
Freeman
and
1,ockyer
V.
Buckhurst
Park Properties
Ltd.
[1964]
1
A11
E.R.
630. Furthermore, the
alter
ego
idea
is
not always applied. even
to
sitoationa where it might seem clearly applicable. See
Re
h’aznl
Ilahi
[lo571
2
IJloyci’s Rep.
517.
19
It
is,
perhaps, sufficient to refer to the curious shifts of the Court
of
Appeal
dealt with
by
Professor Wedtierburn in
“
Corporate Personality and Social
Policy
:
The Problem
of
the Quasi-Corporation
”
(19653
28
M.L.R.
62.
1
[I0651
2
W.L.R. 839;
[196S]
1
All
E.R.
840
(C.A.:
Lord Denning
M.R.,
I’esrson
and
Russell L.JJ.).
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