Burns, Philp & Co Ltd v Gillespie Brothers Pty Ltd (1947) 74 CLR 148
Agency; agency of necessity.
Facts: In 1941, during the Second World War, Burns Philp contracted to transport a consignment of flour for Gillespie Bros by ship from Australia to Singapore. However, before reaching Singapore, the ship returned to Australia to avoid the likelihood of capture or destruction by Japanese forces. The return voyage was not authorised by Gillespie Bros.
Issue: Did Burns Philp have the authority to transport the flour back to Australia, and to claim payment from Gillespie Bros for that voyage?
Decision: In the circumstances, an 'agency of necessity' arose, giving Burns Philp authority to return to Australia with the flour and claim reasonable payment for that voyage from Burns Philp.
Reason: Describing agency of necessity, Latham CJ said (at 175):
"[T]he phrase 'agent of necessity' is … a 'shorthand' method of saying that such [emergency] circumstances may create an authority to act in relation to the property of another person or to impose a liability upon him which would not exist in ordinary circumstances… [I]n some circumstances a wife may be an agent of necessity to pledge her husband's credit for necessaries. She may have no express authority to bind him, and the husband may even expressly repudiate her authority. But he cannot effectively do so. The authority is said to be irrevocable … In such a case there is no express or implied agreement that the wife shall be the agent of the husband. The phrases of the law of agency are used to describe, not the means of constituting the relationship which enables the wife to create a liability in the husband, but the result which follows from the marital relationship in certain circumstances of necessity. The so-called agency arises as what has been described an irrebuttable presumption of law … In the case of masters of ships, the rule is … that in circumstances where the cargo will be lost or destroyed unless some exceptional action is taken, there is not merely a power given but a duty is cast on the master to act for the safety of the cargo in such manner as may be best under the circumstances. If he does so act, then the shipowner is entitled to be paid a reasonable remuneration for the services rendered. This rule … is based upon necessity, and is not part of the law of contract …"
Note: In the past, the common law presumed an agency of necessity between spouses who lived together, for the purpose of purchasing necessities. This has been abolished by statute in some jurisdictions.