Freeman & Lockyer (A Firm) v. Buckhurst Park Properties (Mangal) Ltd. (1964) 1 All ER 630 133

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Freeman & Lockyer (A Firm) v. Buckhurst Park Properties (Mangal) Ltd. (1964) 1 All ER 630 133

FACTS OF THE CASE

Buckhurst Park Properties (Mangal) Ltd., a construction company, hired Freeman & Lockyer, an architectural firm, for a construction project. The firm appointed Mr. Broomhead as their representative to communicate with the company. However, Mr. Broomhead was not authorized to appoint subcontractors on behalf of the firm. Despite lacking the necessary authority, Mr. Broomhead went ahead and appointed a subcontractor for certain construction work without the knowledge or permission of the company. Once the project was completed, the subcontractor demanded payment from the company for the work done. The main question before the court was whether the company should be held responsible for Mr. Broomhead’s actions in appointing the subcontractor, despite his lack of actual authority to do so. It was crucial for the court to determine whether Mr. Broomhead had apparent authority to act on behalf of the firm and if the company should be legally bound by his unauthorized decisions. These facts lay the foundation for the court’s examination and ultimate ruling concerning the company’s liability for Mr. Broomhead’s actions, which were carried out without proper authorization.

ISSUES

The issue in this case was whether the board should pay the architect despite the fact that they had let Kapoor assume the duty of a managing director. 

ARGUMENTS 

Given that the case of Royal British Bank v. Turquand is an English case dating back to 1856, we unfortunately do not have access to the specific arguments presented by both the appellant and the respondent. Nevertheless, based on the factual context of the case and established legal principles, we can construct hypothetical arguments that could have been made by each party:

Argument of the Appellant (Freeman & Lockyer):

1. The appellant argued that Mr. Broomhead, acting as their representative, seemed to have the authority to appoint subcontractors on their behalf. They pointed out that the company had allowed and encouraged Mr. Broomhead to act as their agent, which made it reasonable for others to believe that he had the authority to make decisions about subcontracting.

2. The appellant claimed that the company gave the impression that Mr. Broomhead had the authority to appoint subcontractors by allowing him to interact with the subcontractor without disclaiming his authority. They argued that this conduct by the company led the subcontractor to believe that Mr. Broomhead could appoint them, thus making the company liable for his actions.

3. The appellant relied on the doctrine of estoppel, arguing that the company, through its actions and representations, caused the subcontractor to reasonably rely on Mr. Broomhead’s apparent authority to appoint them. They contended that it would be unfair for the company to now deny such authority and should be legally prevented from doing so.

Argument of the Respondent (Buckhurst Park Properties (Mangal) Ltd.):

1. The respondent argued that Mr. Broomhead, the appellant’s representative, did not have the actual authority to appoint subcontractors on behalf of the firm. They emphasized that the appellant had not explicitly granted him this authority, and therefore, the respondent should not be held responsible for his unauthorized actions.

2. The respondent asserted that they had not held Mr. Broomhead out as having the authority to appoint subcontractors. They highlighted that they had no knowledge or awareness of his actions until after the project was completed. They argued that without any indication or representation of his authority from the respondent’s side, they should not be held accountable for his unauthorized acts.

3. The respondent stressed that they did not rely on any representations made by the appellant or Mr. Broomhead regarding subcontractor appointments. They contended that since they were unaware of it. 

JUDGEMENT

In the case of Freeman and Lockyer v. Buckhurst Park Properties (Mangal) Ltd, Diplock LJ held that the judge was correct in ruling that the company was obligated to pay Freeman and Lockyer for their architectural services. This case falls under the jurisdiction of the English courts. Diplock LJ emphasized that if the board confers actual authority to an individual without a formal resolution, it renders the board liable for a fine. This principle is supported by Section 50(1) of the Companies Act 1948. Furthermore, Diplock LJ highlighted that even if a person does not have actual authority to act on behalf of a company, a contract can still be enforced under certain circumstances. These circumstances include when an agent had the authority to enter similar contracts, the person granting the authority had the authority themselves, the contracting party was induced by these representations to enter the agreement, and the company had the capacity to act. In the case at hand, all of these conditions were fulfilled. The board was aware of Kapoor’s general activities and permitted him to engage in such activities, thereby representing his authority to enter into contracts for similar matters. Additionally, the company’s articles conferred full power to the board. Freeman and Lockyer were induced to enter the contract based on these representations, and the company had the capacity to act.

REFERENCES

https://en.m.wikipedia.org/wiki/Freeman_v_Buckhurst_Park_Properties_(Mangal)_Ltd

https://simplestudying.com/freeman-lockyer-v-buckhurst-park-properties-ltd-1964-2-qb-480/

This Article is written by Raktim Singha Roy of Techno India University, Intern at Legal Vidhiya.

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