Many people carry out the business of others, acting as agents having authority to execute acts in favour of their principal or represent him in transactions with others.
These transactions may relate to immovable property, such as the sale, purchase, transfer, acceptance of transfer, payments, collection of money, mortgaging, assignment, declarations, rental and other relevant issues. They may also relate to commercial business, trade, investments, banking or even shareholding and money saving.
The authority may be written, verbal or implied as long as it allows the agent to act for his principal and that he has his consent to act in that manner. The agent is not a servant or an independent contractor, since he is not under the control or the supervision of the principal. The agency relation is fiduciary depending on trust between the principal and the agent. For this reason the agent has higher duties deriving from the principles of equity rather than the agency agreement. In this respect, the agent is obliged to abstain from gaining unlawful profit during the exercise of his duties, to act with reasonable diligence and care and to give account to his principal.
In the event the agent contravenes any of his obligations, the principal is entitled to claim damages for the actual loss and damage he suffered and the loss of his real profit. He is also entitled to claim any amount he gave or entrusted to the agent plus interest from the date of the claim and request an account wherever necessary; however, he cannot claim any expected profit in the event the agent would have executed his duties. With regard to the claim for giving accounts, this remedy is only available where the principal cannot prove the amount he is entitled to. Moreover, where the agent holds money, property or goods for the principal and refuses to return them, the principal has the right to claim them, since the agent is considered as a bailee and a debtor of the principal.
The aforesaid issue was examined by the District Court of Limassol, in a case where a defendant was appointed as the agent of the plaintiff to invest money given to him from time to time in order to gain profit. Although the agent was entitled to decide on how to invest the money, he undertook the obligation to give full and immediate account to the principal. He was given a certain amount of money in two different currencies, which however he refused that he had invested and did not return it to the principal. The Court, having referred to the above, decided that the plaintiff was entitled to be indemnified by receiving his money back. Since it was not proven that the money was invested, no account was necessary to be given nor was any profit made.
The Court went further to examine the issue that part of the money referred to in the statement of claim was in a foreign currency. Following the authorities, the Court decided that it had authority to issue such a judgment in a foreign currency, because in this way justice was to be done. The principle is that in proper cases a judgment can be issued in a foreign currency, taking into consideration the inflation and the fluctuation of the values of the various currencies.
The loss of the plaintiff in this particular case was money in a foreign currency and therefore, the Court issued a judgement accordingly and ordered the statement of claim to be amended.
George Coucounis is an experienced lawyer practicing in Larnaca, Cyprus.
Educated at University College (London) and Thessaloniki University (Greece), George is fluent in English and has been practicing law in Cyprus since 1982.