CMLQ Investors Company v. Cajary Building Corporation, et al.

CMLQ Investors Company v. Cajary Building Corporation, et al. Collection Decisions of the Court of Appeal Date 1999-11-23 Docket numbers C31422 Judges Doherty, David H.; Goudge, Stephen Thomas; MacPherson, James C. Subject Civil Decision Content DATE: 19991123 DOCKET: C31422 COURT OF APPEAL FOR ONTARIO RE: CMLQ INVESTORS COMPANY (Plaintiff/Respondent in appeal) v. CAJARY BUILDING CORPORATION, JACK SOLOMAN, CARY SOLOMON and RONTO DEVELOPMENT CORPORATION (Defendants/Cary Solomon, Appellant) BEFORE: DOHERTY, GOUDGE and MacPHERSON JJ.A. COUNSEL: Maureen Whelton for the appellant Glenn E. Cohen for the respondent HEARD: November 16, 1999 On appeal from the judgment of Mr. Justice Cullity dated December 29, 1998. ENDORSEMENT [1] The trial judge made three important findings: the conduct of the appellant gave rise to an agency by estoppel as between the appellant and Carl Solomon thereby clothing Mr. Solomon with the apparent authority to act on the behalf of the appellant in the mortgage transaction; the apparent authority extended to the authority to agree to the change in the term of the mortgage from five years to three years on December 14, 1992; and the approval of the variation on the mortgage term given by Mr. Solomon on December 14th to the lender extended to both the commitment letter and the mortgage documents and authorized changing both to provide for a term of three years instead of five. [2] Counsel submits that where a third party relies on agency by estoppel to attribute the conduct of a solicitor to another, the third party must establish an actual client-solicitor relationship between the solicitor and the other person as evinced by a formal retainer. [3] We disagree. The doctrine depends, not on the actual relationship which exists between the parties, but on the way the relationship is represented to third parties. Agency by estoppel does not create obligations as between the “principal” and “agent.” In this case, the appellant could not rely on the doctrine to impose solicitor-like obligations on Mr. Solomon. Agency by estoppel serves only to prevent the “principal” (the appellant) from denying the agency relationship where his conduct has reasonably led the third party (the respondents) to believe that the relationship existed. The doctrine runs between the “principal” and third parties and not between the “principal” and the person found to have apparent authority to act on behalf of the “principal.” [4] The evidence supported the findings made by the trial judge. There was ample evidence to support his conclusion that Mr. Solomon’s apparent authority extended to authorizing the change in the term of the mortgage. [5] The appeal is dismissed with costs.