Racing UK Ltd v Doncaster Racecourse Ltd & Anor

The identity of the contracting party is determined objectively from the agreement, its subject matter and the surrounding circumstances. A management company may sign as agent rather than principal where the rights concerned can only be granted by the owner or lessee of land, and the owner is objectively identifiable. A principal is bound by an agent’s act where it held out the agent as authorised and the third party relied on that representation. A representation may be relied on by an entity formed after it was made if the entity becomes aware of it on coming into existence. On appeal, factual inferences are reviewed by asking whether the trial judge was entitled to draw them from the evidence.

Racing UK Ltd appealed against the decision of Tugendhat J in the High Court, Queen’s Bench Division. The dispute concerned an agreement dated 25 March 2004 for television picture rights relating to Doncaster Racecourse. The agreement was addressed to Doncaster Racecourse Ltd and signed by its chief executive, Mr Sanderson.

The central issue was whether Doncaster Racecourse Ltd contracted as principal, as the Council argued, or whether it acted as agent for Doncaster Metropolitan Borough Council, the owner of the racecourse. The trial judge held that the Council was bound through ostensible authority. The Council appealed, challenging the objective construction of the agreement and the inferences drawn from the evidence.

Appeal dismissed unanimously. The Court of Appeal upheld Tugendhat J’s conclusion that the Council was bound by the agreement. The appellants were ordered to pay the respondents’ costs, with an interim payment of £30,000.

1. Identity of the contracting party. The question was one of objective construction. The court considered the terms of the agreement, the nature of the rights involved and the surrounding circumstances. The relevant media rights principally consisted of access to the racecourse, which ordinarily required authority from its owner or lessee. It was notorious within the racing industry that the Council owned the course, while Doncaster Racecourse Ltd managed its operations.
2. The naming of Doncaster Racecourse Ltd in the agreement did not establish that it contracted as principal. The name had been taken from an earlier media rights agreement whose form was unusual and had been adopted without material consideration of the company’s status. There was no evidence that Racing UK believed the Council had transferred the relevant rights to Doncaster Racecourse Ltd. Objectively, the agreement was therefore made with the Council, acting through Mr Sanderson or Doncaster Racecourse Ltd.
3. Ostensible authority. The Council had held out Mr Sanderson as the person authorised to deal with matters concerning the racecourse. Racing UK relied on that representation in entering the agreement. The fact that Racing UK was newly formed did not prevent reliance, because its promoters and participants already possessed the relevant knowledge and became aware of the representations when the company came into existence.
4. The knowledge that Mr Sanderson might refer matters to the Council was relevant to actual authority, but did not defeat ostensible authority. A third party was not required in these circumstances to obtain formal evidence of an internal decision-making approval.
5. Appellate review. Ostensible authority was primarily a question of fact. Although an appellate court may have greater freedom to review inferences than primary findings, the question remained whether the trial judge was entitled to draw the inferences reached on the evidence. No proper basis existed for interfering with the judge’s findings.

1. Court of Appeal (Civil Division): In [2005] EWCA Civ 999 , the Council’s appeal was dismissed and the High Court decision was upheld.
2. High Court, Queen’s Bench Division: Tugendhat J held that the Council was bound by the agreement through the ostensible authority of Mr Sanderson or Doncaster Racecourse Ltd.