› Express and implied agency — direction to pay funds to third party
Agency
› Liability of principal
› Misappropriation by agent within scope of authority
Quick Take
1Where a trustee directs an investor to pay subscription moneys into an account operated by a third party, that third party may be found to be the trustee's agent for the purpose of receiving those moneys, such that misappropriation by the agent does not relieve the trustee of its obligation to treat the units as fully paid.
2A principal is jointly and severally liable with its agent for wrongs committed by the agent whilst acting within the scope of the agent's actual or apparent authority; the agent's criminal misappropriation of funds it was authorised to receive does not fall outside the scope of that authority.
3Financial statements signed by a trustee's director declaring misappropriated funds as assets of the trust are powerful evidence contradicting a contention that those funds never became trust property.
