Agency

The case concerned disclosure of commission being paid to an agent.

Held The burden of proving full disclosure that the agent is to receive commission from a third party lies on the agent. It is not sufficient for him merely to disclose that he has an interest or to make such statements as would put the principal on inquiry; nor is it a defence to prove that, had he asked for permission, it would have been given.

Whether or not there has been sufficient disclosure depends on the facts of the case given that the requirement is for the principal’s informed consent to his agent acting with a potential conflict of interest. In the case of a consumer credit agreement, a statement of the amount which the broker is to receive from the lender is necessary to bring home to the borrower the potential conflict of interest.