''Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd''

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UK company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary lega ...

case, concerning the enforceability of obligations against a company.

Facts

Fidelis’ company secretary, Mr Bayne, hired cars from Panorama Development's business,

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Executive Car Rental. Bayne used the Fidelis' paper and represented that he wished to hire a number of

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for the business while his managing director was away. He was lying and he used them himself. Bayne was prosecuted and imprisoned, but Belgravia had outstanding £570 12s 6d for the hired cars. Fidelis claimed that it was not bound to the hire contracts, because Bayne never had the authority to enter them.

Judgment

Lord Denning MR held that Fidelis was nevertheless bound on the contract to Panorama. Mr Bayne, as company secretary had implied actual authority by virtue of his position as Company Secretary to enter into such agreements. Times had changed since 1887 when ''

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''(1887) 18 QBD 815 held that company secretaries could not be assumed to have authority for anything. Secretaries are ‘certainly entitled to sign contracts connected with the administrative side of a company’s affairs, such as employing staff and ordering cars, and so forth.’ His judgment went as follows. Salmon LJ said the secretary ‘is the chief administrative officer of the company’ so he has ostensible authority with administrative matters. Nothing is more natural than ‘ordering cars so that its servants may go and meet foreign customers at airports, nothing to my mind, is more natural than that the company should hire those cars through its secretary.’ It might not be so with matters of commercial management of the company, for example, a contract for the sale or purchase of goods in which the company deals’ but that was not the case here. Megaw LJ concurred.

References

{{reflist United Kingdom company case law Court of Appeal (England and Wales) cases Lord Denning cases 1971 in case law 1971 in British law

Facts

Judgment

See also

References