一、Facts Material

The plaintiffs, Freeman and Lockyer, a firm carrying on business as architects and surveyors, claimed £291 6s. for fees due in respect of work done during 1959 in relation to Buckhursfc Park Estate, the property of the defendant company, Buckhurst Park Properties (Mangal) Ltd. The plaintiffs received their instructions from Shiv Kumar Kapoor, the second defendant, a director of the defendant company. There was no dispute as to quantum and the only question was whether the liability was that of the defendant company or of the second defendant, who was never served with the proceedings since his whereabouts were unknown. Judge Herbert gave judgment for the plaintiffs against the defendant company who appealed contending that the liability was that of the second defendant. 

In September, 1958, Kapoor contracted to purchase Buckhurst Park Estate for £75,000. Having insufficient funds, he approached Nimarjit Singh Hoon, who was willing to advance approximately £40,000... On October 11, 1958, by a written agreement, the two men agreed to form a private limited company with a nominal capital of £70,000 to be subscribed in equal shares. Kapoor and Hoon and a nominee of each were to be directors of the company and its object was to complete the purchase of the property and then resell it. It was agreed that  Kapoor personally should defray the running expenses and be reimbursed out of the proceeds of the resale. The articles of association of the company contained power to appoint a managing director but none was appointed. The property was conveyed to the company but the prompt resale which Kapoor had contemplated did not materialise. Kapoor engaged the plaintiffs to a apply for planning permission to develop the estate and to do certain other work which the plaintiffs did, and for which they claimed the fees in question.

二、holding of the Judges

The judge found that the board knew that Kapoor had throughout been acting as managing director in employing agents and taking other steps to find a purchaser. They permitted him to do so, and by such conduct represented that he had authority to enter into contracts of a kind which a managing director or an executive director responsible for finding a purchaser would in the normal course be authorised to enter into on behalf of the company. The articles of association conferred full powers of management on the board. Meanwhile, the plaintiffs, finding Kapoor acting in relation to the company's property as he was authorised by the board to act, were induced to believe that he was authorised by the company to enter into contracts on behalf of the company for their services in connection with the sale of the company's property, including the obtaining of development permission with respect to its use. The articles association, which contained powers for the board to delegate any of the functions of management to a managing director or to a single director, did not deprive the company of capacity to delegate authority to Kapoor, a director, to enter into contracts of that kind on behalf of the company. I think the judgment was right, and would dismiss the appeal.

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