Essington Investments Pty Ltd v Regency Property Pty Ltd

Essington Investments Pty Ltd (Essington) appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning a dispute with Regency Property Pty Ltd (Regency). The core of the dispute involved whether Essington was bound by a contract for the sale of land entered into by its agent, Mr. Gavan Duffy, on its behalf. Regency sought to enforce this contract.

The Court of Appeal was required to determine whether Mr. Duffy possessed actual or ostensible authority to enter into the contract on behalf of Essington. Specifically, the court considered whether Essington, by entrusting Mr. Duffy with a document signed by its director, had made a representation of authority upon which Regency could reasonably rely, thereby creating an estoppel preventing Essington from denying the contract's validity.

The Court of Appeal upheld the primary judge's finding that Essington was bound by the contract. The court reasoned that Essington had clothed Mr. Duffy with apparent authority by providing him with a signed document that, when presented to Regency, created the impression that he had the power to bind Essington to the sale. This conduct, the court found, amounted to a representation by Essington that Mr. Duffy had the necessary authority, and Regency's reliance on this representation was reasonable. Consequently, Essington was estopped from denying Mr. Duffy's authority.

The appeal was dismissed with costs, and the cross-appeal was also dismissed.