Adjudication: Contract signed without authority

Citation: CRJ Services Ltd v Lanstar Ltd (trading as CSG Lanstar) [2011] EWHC 972 (TCC)

Keywords: Adjudication, jurisdiction, natural justice, agency

The Facts

CRJ (C), a company that hires recycling plant and equipment, sought to enforce an adjudicator’s decision against the defendant (D). D carries out environmental waste management and recycling at its own site, namely “Pound Bottom.” A number of contracts for hire of plant had been entered into previously between the parties of varying durations.  D hired a high speed shredder from C on a monthly basis and subsequently served a month’s notice to terminate the agreement.  D had paid for the hire of plant that was due every month. C contended that it was a three year hire contract. At the outset of the adjudication, D stated that the adjudicator did not have jurisdiction as there was no contract between the parties, on the basis that the landfill manager was not an employee of D and had no authority to enter into a contract.  The adjudicator decided that the landfill manager had no express authority, but did have apparent authority to enter into the contract, therefore providing a favourable decision to C. Additionally, D contended that there was also a breach of the rules of natural justice as the adjudicator decided jurisdiction on the basis of a witness statement provided by the landfill manager which had not been served on D, thereby preventing D with an opportunity to respond.

Held (Akenhead J)

The landfill manager did have authority to engage in hire contracts on a monthly basis with C, which he signed and were paid by D. D had not adduced any or enough evidence to avoid enforcement of the decision, as there was no prospect of it being established that the landfill manager did not have apparent or ostensible authority.  The fact that the witness statement of the landfill manager was not received by D did not amount to any material breach of the rules of natural justice on the part of the adjudicator, who did not know that the witness statement had not been served on D.  Furthermore, the adjudicators’ decision on jurisdiction was only influenced to a limited extent by the witness statement as his view was independently supported by other facts.