Lord Suirdale (Richard Michael John Hely-Hutchinson) sued Brayhead Ltd for losses incurred after a failed takeover deal.

The CEO, chairman and de facto managing director of Brayhead Ltd, Mr Richards, had guaranteed repayment of money, and had indemnified losses of Lord Suirdale in return for injection of money into Lord Suirdale's company Perdio Electronics Ltd. Perdio Ltd was then taken over by Brayhead Ltd and Lord Suirdale gained a place on Brayhead Ltd's board, but Perdio Ltd's business did not recover.

Brayhead Ltd refused to pay on the basis that Mr Richards had no authority to make the guarantee and indemnity contract in the first place.

Roskill J held Mr Richards had apparent authority to bind Brayhead Ltd, and the company appealed.

That has been done in the judgments of this court in Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd.[1] It is there shown that actual authority may be express or implied.

He had been duly appointed chairman of the company but that office in itself did not carry with it authority to enter into these contracts without the sanction of the board.

The judge did not rest his decision on implied authority, but I think his findings necessarily carry that consequence.

The judge finds that Mr. Richards acted as de facto managing director of Brayhead.