CRJ Services Ltd v Lanstar Ltd (t/a CSG Lanstar)

An adjudication decision may be enforced where the party challenging jurisdiction has no reasonable prospect of proving that the contract was made without authority. Ostensible authority may arise from the agent’s position, the principal’s conduct and its repeated acceptance of similar transactions. Internal limits on authority do not affect a third party without notice of them.

A procedural irregularity concerning material received by an adjudicator will not invalidate enforcement where it was innocently received, was given limited weight, and did not materially affect the result. An adjudicator’s investigation of jurisdiction does not itself form part of the substantive decision where the adjudicator lacks jurisdiction to determine jurisdiction conclusively.

CRJ Services Ltd sought summary judgment to enforce an adjudicator’s decision requiring Lanstar Ltd to pay charges under a long-term plant-hire agreement. Lanstar argued that the agreement, including its adjudication clause, was not binding because Mr Vaughan, who signed it, lacked actual, implied or ostensible authority.

Lanstar also alleged a breach of natural justice because the adjudicator considered a witness statement from Mr Vaughan which Lanstar said had not been served on its solicitors. The central issues were whether there was a realistic prospect of defeating enforcement on agency grounds and whether the adjudicator’s receipt and consideration of the statement constituted a material breach of natural justice.

1. Judgment for CRJ. The adjudicator’s decision was enforced.

2. Mr Vaughan had been engaged to provide services at the Pound Bottom site and had been appointed Landfill Materials and Recycling Facilities Manager. He plainly had authority to hire plant. Lanstar had regularly paid the charges under the hire contracts which he signed, and there was no evidence that Lanstar had informed CRJ of any limitation restricting him to short-term hires.

3. Applying the principles of ostensible authority stated in Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2B 480, the circumstances provided a sufficient basis for apparent authority. There was no evidence giving CRJ notice of the alleged limitation or putting it on inquiry. The internal position might have been relevant between Lanstar and Mr Vaughan, but it did not provide a realistic defence to CRJ’s enforcement claim.

4. The court adopted the approach to adjudication challenges summarised in Cantillon Ltd v Urvasco Ltd [2008] BLR 250. A natural justice breach must be material, rather than peripheral, and must concern a decisive or potentially important point on which the parties should have had an opportunity to comment.

5. Even assuming that Lanstar’s solicitors had not received Mr Vaughan’s statement, there was no material breach. The adjudicator reasonably believed that it had been copied to them, gave it limited weight, and based the apparent-authority conclusion on independently supported facts. The adjudicator did not have jurisdiction finally to determine his own jurisdiction. His discussion of that issue did not form part of the enforceable substantive decision, which concerned the off-hire charges.

6. The court stressed that its conclusion on the evidence before it was not a permanent res judicata finding binding a future court or adjudication. Lanstar remained able to litigate authority in other proceedings, but it had not produced enough evidence to resist summary judgment.

The judgment describes an adjudication decision dated 17 February 2011. CRJ commenced these High Court enforcement proceedings on 15 March 2011. The High Court granted summary judgment and enforced the adjudicator’s decision.