Frankel Structural Steel v. Goden Holdings

Frankel Structural Steel v. Goden Holdings

Solicitors Gotfrid & Dennis were held personally liable to the extent of $48,300 because the firm, through Burnett, who controlled and disbursed the mortgage funds and was effectively the company Goden's managing will, gave a personal assurance to the supplier which was acted upon; equitable assignment of unadvanced mortgage funds was rejected.

Citation
[1971] SCR 250
Parties
Plaintiff Appellant: Frankel Structural Steel Limited; Defendant Respondent: Goden Holdings Limited; Defendant Respondent (mortgagor): Hyacinthine Properties Limited; Defendant Respondent (solicitors): Gotfrid & Dennis
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 February 1971
Procedural Posture
Contract Appeal Concerning Payment for Supplied Goods and Solicitor Liability / Appeal to the Supreme Court of Canada From the Ontario Court of Appeal
Outcome
Appeal allowed in part; trial judgment restored in part against the solicitors
Legal Topics
Direction to Mortgagee, Mortgage Advances, Personal Assurance by Solicitor, Unilateral Contract, Assignability of Future Advances, Liability of Solicitors for Client Disbursements
Source Language
English
Contract Agency Equitable Assignment Professional Liability (solicitors) Property/mortgage Law Direction to Mortgagee Mortgage Advances Personal Assurance by Solicitor +3 more

Case Brief

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Parties

Frankel Structural Steel Limited

Plaintiff Appellant

Goden Holdings Limited

Defendant Respondent

Hyacinthine Properties Limited

Defendant Respondent (mortgagor)

Gotfrid & Dennis

Defendant Respondent (solicitors)

Procedural Posture

Contract Appeal Concerning Payment for Supplied Goods and Solicitor Liability / Appeal to the Supreme Court of Canada From the Ontario Court of Appeal

Legal Issues

  1. 1 Whether the solicitors (Gotfrid & Dennis) were personally liable for assurances to pay the supplier
  2. 2 Whether the direction to pay from mortgage advances constituted an equitable assignment of unadvanced funds
  3. 3 Whether a contract existed between the supplier and the mortgagee (Goden) by promise and performance

Ratio Decidendi

Solicitors Gotfrid & Dennis were held personally liable to the extent of $48,300 because the firm, through Burnett, who controlled and disbursed the mortgage funds and was effectively the company Goden's managing will, gave a personal assurance to the supplier which was acted upon; equitable assignment of unadvanced mortgage funds was rejected.

Court Disposition

Appeal allowed in part; trial judgment restored in part against the solicitors

Orders

  • Judgment restored for appellant against Gotfrid & Dennis to the extent of CAD 48,300
  • Appeal allowed with costs here and in the Court of Appeal