Agency (Principle Of)

Pastoor v. Pastoor, 2007 CanLII 28331 (ON SC)

[17] As I read Wells, J.A.’s judgment, the rationale of his judgment is rooted in the law of agency. A lawyer is an agent for his or her client, and in accordance with the law of agency: “where a principal gives an agent general authority to conduct any business on his behalf, he is bound as regards third persons by every act done by the agent which is incidental to the ordinary course of such business or which falls within the apparent scope of the agent's authority.” A lawyer retained for litigation has apparent authority to bind his or her client to a particular compromise, but that is just an application of the more general agency law principle. Wells, J.A. goes on to say that the court, however, is not bound to enforce the contract entered into by the lawyers.

[18] In the case at bar, for some many months, with the assistance of lawyers, the parties negotiated towards a settlement of a matrimonial dispute. As a matter of the law of agency, Ms. Pastoor held her lawyer out as her agent to negotiate and effect a settlement and based on the principle that underlies Scherer v. Paletta and in the circumstances of this case, the court ought to enforce the Minutes of Settlement.

Travelbrands Inc. v. Bramalea Travel Centre Inc., 2018 ONSC 5090 (CanLII)

[15] During the course of his submissions counsel for the defendant did propose that his client was the agent of the plaintiff. There is little if any evidence that would support such a conclusion. The term “agent” is used to describe all manner of common relationships. It has a colloquial meaning. The legal concept of “agency” is more limited.[11] The American Restatement of the Law of Agency provides a definition:

…the relationship which results from the manifestation of consent, by one person to another, that the other shall act on his behalf and subject to his control, and consent by the other so to act.[12]

[16] Agency is seen as “a consensual relationship” between the parties.[13] One party (the principal) consents to the other party (the agent) exercising authority on its behalf and the agent agrees to do so. There can be no “self-appointed agent”.[14] Generally, the entry into the relationship is mutual.[15]

[17] There is an element of control. The agent is subject to the control of the principal. The underlying characteristic is the authority of the agent, subject to that control, to affect the legal position of the principal:

Agency is the relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principal’s legal position by the making of contracts or the disposition of property.[16]

Foot Notes

• [11] Gerald Fridman, Canadian Agency Law, Second Edition, LexisNexis Canada Inc., 2012 at p. 1
• [12] Ibid at p. 8 quoting Restatement (Second) of the Law of Agency (1958). Cp., M. Conant, “The Objective Theory of Agency” (1968) 47 Neb. L.R. 678
• [13] Ibid at p. 9 referring to “The Rationale of Agency” (1920) 29 Yale L.J. 859 at 868: cf., also at 863-64, R. Powell, Law of Agency, 2d ed. (London: Pitman & Sons, 1961) at 5 and for judicial support Royal Securities Corp. v. Montreal Trust Co. 1966 CanLII 173 (ON SC), [1966 O.J. No. 1078, [1967] 1 O.R. 137 (Ont. H.C.J.), affd. 1967 CanLII 224 (ON CA), (1967) O.J. No. 997, 63 D.L.R. (2d) 15 (Ont. C.A.).
• [14] Ibid at p. 10 referring to David Cooper Investments Ltd. v. Bermuda Tavern Ltd. 2001 CanLII 3639 (ON CA), (2001) O.J. No. 4185, 56 O.R. (3d) 243 (Ont. C.A.) and William B. Sweet & Associates v. Copper Beach Estates Ltd. 1993 CanLII 1292 (BC CA), (1993) B.C.J. No. 2375, 108 D.L.R. (4t) 85 (B.C.C.A.)
• [15] Ibid at pp. 11 and 12: There has been some modification to the concept of agency so as to make it more adaptable to modern needs. There has been some recognition of agency in the absence of consent (see for example: “Agency by Estoppel” at pp. 53-58). Despite this the presence of consent remains relevant and important.
• [16] Ibid at p. 4 referring to: LaBreche Estate v. Harasymiw, 1992 CanLII 8629 (ON SC), (1992) O.J. No. 321, 89 D.L.R. (4th) 95 at 107 (Ont. Gen. Div.), per Valin J.; Schwartz v. Maritime Life Assurance Co., [1997] N.J. No. 77, 7 C.C.L.I. (3d) 75 at 84 (Nfld. C.A.), per Gushue C.N.J.; Doiron v. Devon Capital Corp., 2002 ABQB 664 (CanLII), (2002) A.J. No. 916, (2002) 10 W.W.R. 439 at 444 (Alta. Q.B.), per Forsyth J.; 4414790 Manitoba Ltd. v. Nelson, 2003 MBQB 183 (CanLII), [2003] M.J. No. 292 , [2004] 2 W.W.R.552 at 557 (Man. Q.B.) per Beard J.; Gerco Services Co. v. Aston, [1981] N.S.J. No. 507, 48 N.S.R. (2d) 541 at 557 (N.S.T.D.), per Hallet J.; 4414790 Manitoba Ltd. v. Nelson, (2003) M.J. No. 292, 176 Man. R. (2d) 188 at 193 (Man. Q.B.) per Beard J.; Chender v. Lewaskewicz, 2007 NSCA 108 (CanLII), (2007) N.S.J. No. 463, 259 N.S.R. (2d) 330 at 343 (N.S.C.A.), per Roscoe J.; Applewood Place Inc. v. Peel Condominium Corp. No. 516, [2003] O.J. No. 3318, 11 R.P.R. (4th) 253 at 264 (Ont. S.C.J.), per O’Connor J.; Bodnarchuk v. R.B.C. Life Insurance Co. 2010 MBQB 85 (CanLII), (2010) M.J. 118, 253 Man. R. (2d) 7 at 26 (Man. Q.B.), per McKelvey J.; see also Ezzedine v. Dalgard, 2006 ABQB 826 (CanLII), (2006) A.J. No. 1431, 405 A.R. 296 at 316 (Alta. Q.B.), per Matkin J.

Bedell v Kidder, 2010 CanLII 99890 (ON SCSM)

I first address the parties to the contract. In regard to the plaintiffs, Mr. Bedell was an owner and acting as agent for his brothers who were also owners of the properties. They are identified in the easement agreement and the deed that they signed as owners. In regard to the defendants, the defendant, Patricia May Kidder,[25] was the owner of the property and also identified in the easement agreement and the deed. Mr. Kidder was not an owner of the property but was clearly acting as agent for the defendant, Patricia May Kidder. Their legal relationship was one of agent and principal. As a matter of law, an agent and a principal cannot both be found liable in contract. The doctrine of alternative liability applies to the liability of an agent or a principal to a third party in contract. The general principle is found in the often quoted statement from [http://canlii.ca/t/2f2hq Murray v. Delta Copper Co., 1925 CanLII 32 (SCC), (1925) 4 D.L.R. 1061 (S.C.C.) at 1067. Newcombe J., speaking for the Supreme Court of Canada, stated:

“The ordinary rule is that the principal and agent may be liable to the other contracting party in the alternative, which alternative liability continues until the election of the latter to accept one, either the principal or the agent, as his debtor.”

Scintilore Explorations Ltd. v. Larche, 1999 CanLII 14948 (ON SC)

168 The third case, Tombill Gold Mines Ltd. v. Hamilton (City), 1954 CanLII 99 (ON SC), (1954) O.R. 871 (Ont. H.C.); affd. (1956), 1956 CanLII 22 (SCC), 5 D.L.R. (2d) 561 (S.C.C.) reinforces the point that the extent of the agent’s duties must be determined by reference to the precise nature of the obligation undertaken. The defendant had a written retainer with the plaintiff to provide engineer’s services for a few days a month in connection with the plaintiff’s mining interests. The defendant was approached by a prospector with some potential claims. The defendant proceeded to stake those claims, but first mentioned to the plaintiff that he was going to stake the claims and offered to try to stake other claims in the same area for the plaintiff. The plaintiff declined, but then sued the defendant, alleging breach of fiduciary duty in relation to the claims he had staked. Gale J. dismissed the claim on the ground that the limited retainer agreement did not stipulate an obligation to bring any mining properties to the attention of the plaintiff. Gale J. noted that within the field of employment, an agent is reposed with trust and confidence and, as such, a fiduciary relationship may arise. He held, however, at 893 that:

the agent is not prohibited from acting if the transaction does not come into conflict with his engagement as agent, even though such action injuriously affects the principal.

…liability of an agent to account arises only when his activities are inconsistent with that which he is required to do as agent.

…When he is not acting in the execution of his duties as agent, and is not engaged in transactions which are within the limits of the agency, he is free to retain any profit which he manages to make.

Gale J.’s judgment was upheld by the Supreme Court of Canada, where Locke J. stated that the plaintiff’s rights had to be determined by the agreement and that as the agreement did not stipulate the general obligation asserted by the plaintiff, it was decisive.

Q.N.S. Paper Co. v. Chartwell Shipping Ltd., 1989 CanLII 35 (SCC), (1989) 2 SCR 683

The judgment of Wilson, La Forest, Sopinka and Cory JJ. was delivered by

LA FOREST J. -- At issue in this appeal is whether under Canadian maritime law an agent of an unnamed or partially disclosed principal is personally liable on a contract entered into by the agent with another party when the agent expressly indicates to the other party that he is acting as an agent only. Before that issue can be addressed, however, a threshold issue of what law is applicable must be settled.

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... As Brandon J. (citing Halsbury's Laws of England (3rd ed. 1952), vol. 1, at pp. 228-29, para. 517) put it in Bridges & Salmon, Ltd. v. The "Swan", [1968] 1 Lloyd's Rep. 5, at p. 13, "if he [the agent] states in the contract, or indicates by an addition to his signature, that he is contracting as agent only on behalf of a principal, he is not liable, unless the rest of the contract clearly involves his personal liability, or unless he is shown to be the real principal"....