Samuels (Dr. P.) v Lakeland Farms Ltd

• Jurisdiction: Jamaica
• Court: Court of Appeal (Jamaica)
• Judge: FORTE, P.: ,BINGHAM, J.A.,SMITH, J.A.
• Judgment Date: 31 July 2003
• Neutral Citation: JM 2003 CA 36
• Judgment citation (vLex): [2003] 7 JJC 3105
• Date: 31 July 2003

IN THE COURT OF APPEAL

COR:

THE HON. MR. JUSTICE FORTE, P THE HON. MR. JUSTICE BINGHAM, J.A THE HON. MR. JUSTICE SMITH, J.A

BETWEEN

DR. P. SAMUELS

DEFENDANT/APPELLANT

AND

LAKELAND FARMS LIMITED

PLAINTIFF/RESPONDENT

Ransford Braham instructed by Livingston, Alexander & Levy for Appellant

David Henry instructed by Delroy Beckford for Respondent

ANIMALS - Oral contract - "Keep and care" of mares - Claim by respondent for recovery of balance owed in fees for keeping and care of animals - Whether agistment contract - Whether responent entitled to detain mares - Whether respondent entitled to fees for period of detention of mares

FORTE, P.:

1 The respondent owns a stud farm which is in the business of breeding mares and providing for their daily needs. The appellant is the owner of two mares, "Exotic Ruler" and "Fiery Link". He is also part owner of another mare, named "Mekamara". The issues on appeal arose out of an oral contract negotiated between the appellant and a Mr. Murphy who was at the relevant time, farm manager employed to the respondent. The contract concerned the "keep and care" of the appellant's mares by the respondent.

2 The respondent filed suit for the recovery of One Million, One Hundred and Seventy-Seven Thousand, Five Hundred and Eight Dollars (1,177,508.00) being the balance due and owing to it by the appellant in respect of stud fees and fees for keeping and caring for the appellant's horses. In addition, it detained the mares in lieu of payment.

3 The appellant counterclaimed for the loss of use caused by the wrongful detention of his mares. A set-off was also claimed in the amount of Fifty Thousand SixHundred ($50,600.00) Dollars which the appellant claimed was an amount due to him for veterinary services rendered on the farm.

4 The appellant maintained at trial that ho had entered into an oral contract with Mr. Murphy the farm manager of the respondent, who was his friend, to provide veterinary services to the farm at a reduced rate and in return Mr. Murphy would keep and care for his mare "Exotic Ruler" at the rate of One Hundred ($100.00) Dollars per day, which was an amount, below that offered to other customers of the farm. He maintained that the contract between himself and Lakeland Farms was an Agistment contract.

5 The respondent maintained, however, that the terms of the oral contract exceeded that of mere agistment since (1) it included blacksmith services, together with the general care provided by any of the three veterinaries employed to the farm, (2) that it bordered on one of hire of work and labour, where one of the contracting parties undertakes to do something in consideration for a price. The respondent also contended that Mr. Murphy had no authority to negotiate a reduction in the daily rates. In fact the rates charged for these services are standard rates applicable to all mares on the farm including those owned by the owner of the respondent, Mr. Richard Lake.

6 In coming to her conclusion, the learned judge at trial found the following:

• 1. The oral contract between the parties was:

  Not an agistment contract, but involved a great deal more than mere "keep and care".

• 2. There was a custom which dictated that if a customer fell into arrears, his animals were detained until payment was made in full. Lakeland Farms therefore had a lien over the mares.

• 3. The costs incurred for keep and care during the period of detention must be borne by Dr. Samuels.

• 4. Dr. Samuels did not render any veterinary sesvices, submitted no bills and generally has no evidence to support his counterclaim.

7 Thereafter the learned judge awarded the respondent the sum of $2,678,849.32 together with interest at a rate of 48%.

8 The amount that the respondent claimed should be charged in respect of Exotic Ruler is in excess of the $100.00 per day. Dr. Samuels maintained that the agreed amount in his oral contract with Mr. Murphy was in fact $100 per day. As a result the question arose as to the authority of Mr. Murphy as farm manager, to make such an agreement with him. In addition the respondent having detained the appellant's mares pending payment for their "keep and care" the issue arose arose as to its entitlement to do so. The answer to this question depends on the character of the agreement, that is to say whether it was a mere agistment contract, or a contract which would permit the respondent to so detain the animals. Of the latter, another issue arose, as to whether the respondent was entitled to its fees for the period during which the animals were detained. In summary therefore, the issues which arise in this appeal are:

• 1. Did Mr. Murphy have authority to enter into an agreement with the appellant for the payment of a lesser sum than was the normal fee, in return for veterinary services being offered by the appellant?

• 2. Was the contract between the parties an agistment contract?

• 3. If it is not, is the respondent entitled to detain the mares pending payment of the outstanding fees?

• 4. Is the respondent entitled to the fees which accrued during the period when the animals were detained?

• 1. The Authority of Mr. Murphy

  The contention of the appellant that he had a special agreement with Mr. Murphy in respect of Exotic Ruler had to be resolved without the benefit of hearing from Mr. Murphy, as he did not give evidence at the trial. The appellant however maintained that as Mr. Murphy was the farm manager, he (Mr.Murphy) had the authority to negotiate as to the fees to be charged for the services rendered by the farm. Mr. Richard Lake, on the other hand testified that Mr. Murphy had no such authority. He was responsible for the husbandry of the animals making arrangement for receipt of the animals, sending out invoices and signing for moneys received pursuant to those invoices.

  The fees for the services offered to the respondent, Mr. Lake stated, are fixed fees even for his own horses, and Mr. Murphy had neither express nor implied authority to reduce those fees or even to negotiate with anyone concerning those fees.

  On that background, the question has to be answered, as to whether there being no express authority given to Mr. Murphy (as agreed on both sides) there was nevertheless ostensible or apparent authority Lord Dip lock in the case of Freeman and Lockyer v. Buckhurst Park [1964] 1 All E.R. 630 spoke to the operation of the doctrine of ostensible authority when he said at page 644:

  "An 'apparent' or 'ostensible' authority, on the other hand, is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted on by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the 'apparent' authority, so as to render the principal liable to perform any obligations imposed on him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation. The representation, when acted on by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract."

  Lord Diplock opined (at page 646) that four conditions must be fulfilled to entitle a contractor to enforce against a company, a contract entered into on behalf of the company by an agent who had no actual authority to do so. He stated:

  "It must be shown: (a) that a representation that the agent had authority to enter on behalf of the company into a contract of the kind sought to be enforced was made to the contractor; (b) that such representation was made by a person or persons who had 'actual' authority to manage the business of the company either generally or in respect of those matters to which the contract relates; (c) that he (the contractor) was induced by such representation to enter into the contract, i.e., that he in fact relied on it; and (d) that under its memorandum or articles of association the company was not deprived of the capacity either to enter into a contract of that kind sought to be enforced or to delegate authority to enter into a contract of that kind to the agent."

  In the instant case, there is no evidence that Mr. Lake made any representation to the appellant that Mr. Murphy had the authority to reduce the fees. In fact it was not until later, that Mr. Lake discovered that the respondent was enjoying this lower rate, which no-one else knew about. Mr. Lake therefore had no knowledge of this particular transaction. The question arises however, whether the mere fact that Mr. Murphy was the farm manager was sufficient for the appellant to conclude that he (Mr. Murphy) had the authority to enter into this special contract. Was the Company thereby representing to the appellant that Mr. Murphy as farm manager could enter on its behalf into this special contract? The answer to the question must depend on whether entering into the agreement was within the ambit of the occupation of a farm manager. It is only then that the company could be said to have made representations that Mr. Murphy had the authority in question.

  The evidence, however, was to the contrary. Apart from the evidence of Mr. Lake, the farm manager who succeeded Mr. Murphy...