Agency; ostensible authority of agent; relevant factors
Facts: Rowe was the sole director of Powerpark Systems (Powerpark), a company that manufactured and installed solar panels above parking spaces. Metroll SA (Metroll), a manufacturer of metal fittings used by Powerpark, claimed to have entered a binding contract with Powerpark following negotiations with Scott Fitzpatrick. Fitzpatrick had not been granted any actual authority to act on behalf of Powerpack, but Metroll alleged that Fitzpatrick had ostensible authority. Specific facts relied on by Metroll were that Fitzpatrick used email addresses and logos that identified him as representing Powerpack (such as “Scott Fitzpatrick Powerpark Projects Team”); that Rowe must have been aware of this because copies of the emails were sent to him; that the substance of the emails disclosed that Rowe and Fitzpatrick were communicating on the details of an order; and that Rowe said nothing to dispel this appearance of authority.
Issue: In the circumstances, did Fitzpatrick have ostensible authority to represent Powerpack?
Decision: The circumstances gave rise to ostensible authority. Powerpack was bound by the contract negotiated by Fitzpatrick.
Reason: The emails sent between the parties showed there was close interaction between Fitzpatrick and Rowe concerning the order placed with Metroll. The details of the order were sent from both Fitzpatrick and Rowe, who were obviously communicating directly to each other about the required details. In addition, Fitzpatrick used a Powerpark email address and email signature. Leeming JA said [at 53]:
The upshot is that this was a clear case of ostensible authority, namely, where Mr Fitzpatrick was held out as having authority to bind the company, and Metroll SA relied on that apparent authority to enter into a contract with the company.