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Hely-Hutchinson v Brayhead Ltd [1968]

Facts

  • Hely-Hutchinson (also known as Lord Suirdale) injected money into his own company, Perdio Electronics
  • This injection was indemnified by a Mr Richards on behalf of Brayhead
  • Mr Richards was serving as the managing director of Brayhead, but was only formally engaged as its chairman
  • Brayhead subsequently purchased Perdio Electronics, but Perdio still went into liquidation
  • Hely-Hutchinson csued on the basis of Mr Richards’ indemnity

Issue

  • Could Hely-Hutchinson recover, did Mr Richards have the authority to give the indemnity?

Decision

  • Yes, yes

Reasoning

  • Lord Denning: the judge (at first instance) was correct that in acting as managing director, Mr Richardson had apparent authority to give the indemnity, but he also had actual authority my virtue of the office he worked in
  • By working in (and being treated as working in) the office of a managing director, actual authority as to all of the acts a managing director would normally do exists unless it is otherwise limited
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