CRJ and Lanstar had been doing business together since 2007. Lanstar employed Mr Vaughan. During 2007 and 2008, Mr Vaughan entered into a number of agreements for the hire of machinery with CRJ on behalf of Lanstar. In addition, there were three further contracts between CRJ and Lanstar signed by Mr Vaughan for longer time periods. These contracts also contained a provision that if the machine in question was “off-hired” before the expiry of the hire term, then the hire charge for the remainder of the period would be charged at 60% of the agreed hire rates.

In September 2010, Lanstar terminated the three longer contracts. CRJ commenced adjudication seeking the charges of 60% off-hired rates for the outstanding period of hire. Lanstar argued that Mr Vaughan did not have the appropriate authority to enter into these contracts. However, the Adjudicator found that he had apparent authority and awarded the 60% agreed hire rates.

At enforcement, Lanstar argued: (1) Mr Vaughan had no authority to enter into the contracts. Therefore there was no contract and the Adjudicator had no jurisdiction; (2) There had been a breach of the rules of natural justice because the Adjudicator decided the jurisdictional issue on the basis on a witness statement from Mr Vaughan which had not been served on Lanstar’s solicitors and therefore Lanstar had no opportunity to respond.

The Judge enforced the decision as:-

1. There was not any or enough evidence to avoid summary judgment before the Court i.e. there was no reasonable prospect that Mr Vaughan did not have appropriate authority to enter into the contracts in question. There was no evidence that Lanstar told, or made clear to, CRJ that Mr Vaughan’s authority was limited to contracts for short hire periods; or gave rise to any arguable inference that CRJ was in some way acting dishonestly with Mr Vaughan to procure pecuniary advantages. In addition, there was some conflicting evidence whether Mr Vaughan internally had authority to enter into these contracts. However he was appointed as Landfill Manager of the site and weekly or monthly hire charges under the hire contracts entered into by Mr Vaughan were regularly paid by Lanstar. This strongly pointed to Mr Vaughan being given implied authority or ostensible or apparent authority.
2. The Adjudicator found that Mr Vaughan had apparent authority (not actual authority). Even assuming that Lanstar’s solicitors did not receive Mr Vaughan’s statement, the receipt of it and references to it in the Decision did not amount to any material breach of the rules of natural justice. The Adjudicator had no reason to believe that it had not been copied to and received by Lanstar’s Solicitors (as the covering letter referred to the document being copied to them); the Adjudicator had a limited regard to Mr Vaughan’s statement and instead based his view on independently supported facts which did not emanate from the statement. The Adjudicator was simply openly identifying what the result of his investigation into his own jurisdiction was.