Maritime Travel Inc. v. Boyle, 2012 NSSC 428

SUPREME COURT OF NOVA SCOTIA Citation: Maritime Travel Inc. v. Boyle, 2012 NSSC 428 Date: 20121211 Docket: Hfx. No. 312635 Registry: Halifax Between: Maritime Travel Inc. Plaintiff v. Hugh Boyle Defendant LIBRARY HEADING Judge : The Honourable Justice A. David MacAdam Heard: September 17, 18, 19, 20, 2012, in Halifax, Nova Scotia Final Written Submissions: September 7, 2012 Subject: contracts; agency; implied agency; agency by estoppel

Summary: In an earlier proceeding, the plaintiff obtained a judgement in damages against a company, G, of which the defendant was chairman and director. On a motion by G for a stay of execution of the judgment pending an appeal by G, the defendant agreed to personally pay into trust with the defendant ’ s solicitor the sum of $100,000, to be followed several months later by a second payment, sufficient to cover the remainder of the judgment, assuming the Court of Appeal had not yet decided. The parties agreed to a consent order staying execution of the judgment.

The defendant paid the first instalment from his personal funds, but denied that he had agreed to pay the second instalment from his personal funds. He denied that the solicitor for his company, who had negotiated the stay agreement in consultation with the defendant himself, had authority to also commit him to make the second payment. Issue: Did the defendant agree to pay the second instalment from his personal funds? Result: The evidence established that, in addition to acting as solicitor for the company, the solicitor was acting as agent for the defendant when the stay agreement was negotiated.

The defendant did not deny that he had agreed to the first payment. The court

held that the defendant had agreed to make the second payment from his personal funds, either on the basis of implied agency or agency by estoppel. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET . SUPREME COURT OF NOVA SCOTIA Citation: Maritime Travel Inc. v. Boyle, 2012 NSSC 428 Date: 20121211 Docket: Hfx. No. 312635 Registry: Halifax Between: Maritime Travel Inc. Plaintiff v. Hugh Boyle Defendant Judge: The Honourable Justice A.

David MacAdam Heard: September 17, 18, 19, 20, 2012, in Halifax, Nova Scotia Final Written Submissions: September 7, 2012 Counsel: William L. Ryan, Q.C. and Christa Brothers, for the plaintiff George W. MacDonald, Q.C. and Kiersten Amos, for the defendant By the Court :

By the Court : [ 1 ] The plaintiff, Maritime Travel Inc. (Maritime), claims payment from the defendant, Hugh Boyle (Boyle), of the balance owing on a judgment awarded to it against Go Travel Direct.com Inc. (Go Travel) by Hood J.: see 2008 NSSC 163 , additional reasons at 2008 NSSC 306 and 2008 NSSC 328 , affirmed at 2009 NSCA 42 . Background [ 2 ] This proceeding involves a dispute arising out of a previous proceeding and order. On January 3, 2003, the plaintiff, Maritime, commenced a proceeding against Go Travel claiming damages for misleading advertising. Maritime was represented by the now Hon.

Justice David P.S. Farrar (Farrar) and John T. Shanks (Shanks) while Go Travel was represented by the now Hon. Justice Peter Bryson (Bryson) and Daniel Wallace (Wallace). [ 3 ] Following trial before Hood J., Maritime, by decision released on May 30, 2008, was awarded damages in the amount of $216,842.00. On September 5, 2008, Maritime obtained an execution order against Go Travel for the amount of $257,885.59, which included the damages award together with interest. A further order for costs and disbursements, after trial, was issued by Hood J. on November 4, 2008.

On May 8, 2009, Maritime obtained a new execution order reflecting the award of costs and disbursements, and after providing credit for monies paid on the judgment, resulted in a balance outstanding of $228,992.17. [ 4 ] In June 2008, Go Travel filed a notice of appeal which was followed by a cross-appeal by Maritime. Go Travel subsequently filed a motion for a stay of execution of the judgment pending the outcome of the appeal. Saunders J.A. heard the motion on September 17, 2008.

Go Travel took the position that it did not have the financial resources to pay the judgment and if the execution was pursued, it would likely be put out of business. Following cross-examination by Farrar of Ian Dodd (Dodd), President of Go Travel, on his affidavit filed on the motion for the stay, at the suggestion of Saunders J.A. there was an adjournment to permit the parties to determine whether they could settle on terms for imposing a stay. Counsel, together with Rob Dexter (Dexter), president of Maritime, and Dodd, retired to the hallway outside the courtroom.

Boyle, the Chairman and Director of Go Travel, was in Ottawa and all communications with him on September 17 were by telephone. [ 5 ] During the discussion the parties dispersed to separate ends of the hallway. Eventually Bryson asked Farrar to meet with him for a discussion. He told Farrar that after speaking with Boyle he had instructions that $100,000.00 would be paid into the trust account of his law firm, McInnes Cooper. This would be conditional on Maritime consenting to the granting of the stay of the execution. [ 6 ] Farrar reported this proposal to Dexter and Shanks.

Dexter expressed concern because of the position taken by Go Travel on the stay application. In view of the financial circumstances described by Dodd, if Go Travel paid the money to McInnes Cooper, the funds might be subject to seizure by creditors of Go Travel. Dexter advised Farrar that the money could not be put up by Go Travel and suggested Boyle as the person who would have to place the funds in trust.

Dexter also said that any agreement by Maritime to consent to the stay would require the payment into the Mcinnes Cooper trust account of the balance of the judgment, together with any interest and costs that may accrue. The balance was to be paid into the trust account by Boyle by the end of February 2009 unless, prior to that date, the Court of Appeal decision had been released. [ 7 ] This counterproposal was conveyed to Bryson, who then phoned Boyle a second time. Bryson and Boyle disagree on what was discussed during this call.

However, Bryson then informed Farrar that Boyle was prepared to place his personal funds in trust with McInnes Cooper providing the date for the second payment was extended until March 31, 2009. Dexter advised Farrar that this was acceptable and counsel returned to the courtroom, where Farrar informed the court of the settlement and its terms.

It appears that in outlining the terms of the settlement, it was not mentioned that the source of the monies to be placed into trust were to be Boyle's personal funds. [ 8 ] The consent order staying execution of the judgment pending appeal contains the following provisions: 1. The sum of one hundred thousand dollars, ($100,000) will be placed into trust by Hugh Boyle in an interest bearing account with McInnes Cooper by October 17, 2008;

2. should the Appeal and the Cross Appeal not be disposed of by this Court by March 31, 2009, an amount equal to the remainder of the outstanding judgment (including any costs subsequently awarded by Justice Hood) will be placed into trust by Hugh Boyle with McInnes Cooper no later than March 31, 2009; 3. should the disposition of the Appeal and Cross Appeal result in the Appellant being required to pay an amount to the Respondent, the Respondent will be entitled to that amount from the above mentioned funds held in trust.

Should any funds remain in trust after the amount owing to the Respondent is satisfied, the remainder will be returned to the party who placed the funds into trust.

Any accumulated interest will be paid prorated, according to the percentage payable to each party. 4. should the disposition of the Appeal and Cross Appeal result in the Appellant not being required to pay an amount to the Respondent, the total amount of the above mentioned funds held in trust, together with accumulated interest, will be fully returned to the party who placed the funds into trust.... [ 9 ] Boyle agrees with paragraph 1 but takes exception to paragraphs 2 and 3. He maintains that he never agreed to pay into trust the balance of the judgment from his personal funds.

Bryson testified that after discussion with Boyle about Maritime ’ s counter offer, Boyle agreed that in addition to paying the first instalment of $100,000.00 from his personal funds, he would also pay the remaining balance of the judgment from his personal funds on March 31, 2009, providing the Court of Appeal decision had not been released by that date. He also stated that Boyle was aware that he would communicate this to Farrar, who would then advise Maritime of Go Travel ’ s position, including the position of Boyle.

Issues [ 10 ] The only real issue is whether there was an agreement by Boyle with Maritime to pay to McInnes Cooper, in trust, not only the first payment of $100,000.00, but also the second payment, representing the balance of the judgment, on March 31, 2009, if the decision of the Court of Appeal on Go Travel ’ s appeal had not been released. Argument and analysis [ 11 ] On the evidence it appears clear that on September 17, 2008, Bryson was not acting as solicitor for Boyle in his personal capacity. Boyle was not a party to the litigation between Maritime and Go Travel.

His involvement in that trial was as an officer and majority shareholder of Go Travel. The issue is therefore whether, other than as a solicitor, Bryson was acting as agent for Boyle in negotiating an agreement between Boyle and Maritime whereby Maritime would consent to the stay of execution against Go Travel. [ 12 ] Maritime says the agreement of September 17, 2008, was for Boyle, personally, to make the two payments into McInnes Cooper ’ s trust account in exchange for Maritime consenting to the stay of execution. The terms of the agreement are embodied in the consent order.

The defendant says the only agreement reached on September 17, 2008, was between Maritime and Go Travel, and that at no time was Bryson acting as solicitor or otherwise on behalf of Boyle personally. As such, there is no claim against Boyle in respect to the monies owed by Go Travel to Maritime. [ 13 ] It is not disputed that Boyle paid into trust the sum of $100,000.00 and these funds, together with interest earned thereon, were released by Bryson to Farrar for the account of Maritime.

Also released by Bryson, at this time, was $5,000.00 which had been received by McInnes Cooper under an agreement reached on Maritime ’ s application for security for costs. The source of this $5,000.00 paid to McInnes Cooper was not known to Bryson. [ 14 ] In its prehearing submission counsel for Boyle stated that the consent order could not be the basis for a claim against Boyle for the monies allegedly due.

This submission has merit, and counsel for the plaintiff acknowledged that in law they were not entitled to sue Boyle on the consent order. [ 15 ] Where there is conflict between the evidence of Bryson and the evidence of Boyle, I prefer the evidence of Bryson. He

articulated a specific recall of conversations with Boyle relating to Boyle placing personal funds in McInnes Cooper ’ s trust account in order for Go Travel to obtain the stay of execution. Boyle agreed that he had instructed Bryson that he would make the initial $100,000.00 payment, as required by Maritime, but also stated he had not authorized Bryson to communicate to Farrar, or Maritime, that he was prepared to commit to pay, from his personal funds, the balance of the judgment if the Court of Appeal decision had not been released by March 31, 2009.

The evidence of Bryson is more consistent with the documentary evidence. Additionally, Boyle was inconsistent in his evidence as to the extent of any discussion he had with Bryson about the remaining balance of the judgment. [ 16 ] Bryson ’ s evidence is also consistent with that of Shanks and, to the extent he had any recollection of these events, Farrar. Although neither Farrar nor Shanks would have been privy to the telephone calls between Bryson and Boyle, their evidence as to what Bryson informed them is consistent with his.

Bryson indicated, on more than one occasion, that he discussed both payments with Boyle, that it was a condition required by Maritime that it would not consent to the stay unless the funds came from Boyle personally, Boyle agreed to this arrangement, and Boyle ’ s approval was communicated to Farrar. [ 17 ] Although both Farrar and Bryson testified to only having a recollection of one agreement on that day, I believe they are in error. The main agreement related to the conditions for Maritime consenting to a stay of its execution.

Go Travel feared that if the stay was not granted it would effectively be put out of business at the busiest time of its selling season. Go Travel sold vacation packages primarily in the winter months for travel to southern destinations. On September 17 this busy season was approaching.

Go Travel hoped to continue its business and anticipated that by the end of the season it would have sufficient funds to retire the judgment. [ 18 ] Bryson testified that when Boyle agreed to pay the remainder of the monies from his personal funds, Boyle indicated he anticipated it would likely be unnecessary, although he did advise Bryson to inform Farrar, and through him Maritime, that he agreed to Maritime ’ s condition. In reviewing the reasons why Maritime wished to have the funds paid personally by Boyle, Bryson suggested this was in the interests of Boyle as well.

If the monies came from Boyle personally, rather than from Go Travel itself, then creditors of Go Travel would not be in a position to seize these monies. If they were Go Travel's funds, and were seized by creditors, then it was likely that Maritime would seek to lift the stay of its execution on the judgment. [ 19 ] The only question is whether there was an agreement between Boyle and Maritime whereby Boyle agreed to place his personal monies in trust with McInnes Cooper in exchange for Maritime consenting to Go Travel's application for a stay of Maritime ’ s execution.

On the evidence there was no direct communication between Boyle and Maritime, or its counsel. It is therefore necessary to determine whether Bryson was acting as agent for Boyle (it is clear that he was not acting as solicitor for Boyle), whether Bryson negotiated a contract on Boyle ’ s behalf, and whether the terms of any such contract included an obligation by Boyle to pay $100,000 on September 17, 2008, and the remaining balance on March 31, 2009, providing the Court of Appeal had not yet ruled.

Was Bryson the agent of Boyle on September 17? [ 20 ] On September 17, 2008, Bryson apparently had two telephone conversations with Boyle, who was the individual from whom he primarily received instructions in his role as solicitor for Go Travel.

In the first call, Bryson testified, he discussed with Boyle his perception that in order to obtain Maritime's consent to a stay it would be necessary to show good faith, which would involve the payment of money into trust pending the decision on the appeal. [ 21 ] He further testified that as a result of his discussions with Boyle, and with Boyle ’ s authority, he then discussed with Farrar whether Maritime would consent to the stay if $100,000.00 was paid to McInnes Cooper, in trust. At this point, according to Shanks, Farrar informed Dexter and Shanks of this offer by Boyle.

At this point there is nothing to indicate that Bryson was acting as counsel, other than on behalf of Go Travel. [ 22 ] Dexter was concerned about the possibility that monies paid by Go Travel might be subject to seizure by creditors, and thus might be unavailable to Maritime if the appeal was dismissed. The evidence on behalf of Go Travel on the application before Saunders J.A. had been that if the stay was not granted and Maritime executed on the judgment, Go Travel might be forced out of business. Go Travel did not have the funds to pay the judgment at that time.

Dexter advised Farrar that the monies to be paid could not be from Go Travel but had to be independent of Go Travel. [ 23 ] Dexter also raised with Farrar the matter of the remaining balance of the judgment. He indicated that before Maritime would

consent to the stay there would have to be an agreement that the remaining balance due would be paid into trust. Farrar was thereforeinstructed to counter the offer received from Bryson by indicating an agreement to consent to the stay if Boyle would pay $100,000.00 ofhis own funds into McInnes Cooper’s trust account, as well as the remainder by the end of February 2009, if the Court of Appealdecision had not been released.

Farrar communicated this counteroffer to Bryson, who then contacted Boyle for a second time. [24] Boyle denies that he was ever asked to provide personal funds in the amount of the remaining balance of the judgment.However, it is clear that he asked that the date for the payment of the remaining balance be extended from the end of February untilMarch 31, 2009. He testified that the payment of the remaining balance was never discussed. This is inconsistent with the request to havethe time for payment extended from the end of February to the end of March.

Bryson testified that he and Boyle discussed Maritime’sdemand that Boyle personally pay the remaining balance on the judgment, and that Boyle agreed to do so. He said Boyle added thatbecause this would have been late in Go Travel’s busy season, he did not expect it would be necessary for him to make the payment.However, in view of the conditions set by Maritime, he agreed to do so. [25] Bryson testified that he communicated the agreement of Boyle, subject only to the extension of the date from the end ofFebruary to the end of March.

Dexter, upon being informed of this, indicated he had some concerns but nevertheless instructed Farrar toaccept this change to his counteroffer. Implied Agency [26] The legal concept of agency has been described by Fridman, in language endorsed by the courts, as “the relationship that existsbetween two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to beable to affect the principal’s legal position by the making of contracts or the disposition of property”: Gerald Fridman, Canadian AgencyLaw, 2d ed. (Markham, Ont.: LexisNexis, 2012) at §1.1.

The burden of establishing agency lies with the party alleging its existence:Stevens v. Merchants Bank of Canada (1919), (MB CA), 49 D.L.R. 528 (Man. C.A.); Canadawide Investments Ltd. v.Muirhead (1958), (AB CA), 15 D.L.R. (2d) 526 (Alta. S.C.A.D.). [27] Agency may arise by implication.

The authors of Bowstead & Reynolds on Agency, 17th ed. (London: Sweet & Maxwell, 2001)state, at ¶2-032, that consent of the principal “may be implied when he places another in such a situation that, according to ordinaryusage, that person would understand himself to have the principal's authority to act on his behalf: or where the principal's words orconduct, coming to the knowledge of the agent, are such as to lead to the reasonable inference that he is authorising the agent to act for him.” Fridman writes, in The Law of Agency, 7th ed. (Butterworths, 1996), at 60-61: ...in general it will be the assent of the principal which is more likely to be implied, for, except in certain cases, ‘it is only by the will ofthe employer that any agency may be created.’ Such assent may be implied where the circumstances clearly indicate that he has givenauthority to another to act on his behalf.

This may be so even if the principal did not know the true state of affairs... ... Mere silence will be insufficient. There must be some course of conduct to indicate the acceptance of the agency relationship. The effectof such an implication is to put the parties in the same position as if the agency had been expressly created. [28] The plaintiff cites the following points in support of the argument that an implied agency relationship existed based on conduct: 1. The fact that Bryson and not Dodds was communicating directly with Boyle via telephone; 2.

The fact that Boyle was not present at the hearing, but participated in negotiations via Bryson that resulted in what he says was anagreement that required his consent to be entered into;

3. The fact that all parties involved in the negotiations, including Boyle, were well aware that Go Travel did not have the funds to pay the judgment itself and that any payment would therefore have to come from a third party personally; 4.

The fact that all parties involved in the negotiations, including Bryson and Boyle, were well aware that Maritime Travel would not have agreed to consent to a stay of execution without Boyle’s agreement to personally pay the outstanding balance of the judgment into the trust account of McInnes Cooper, and therefore Boyle required representation in his personal capacity in the negotiations; 5.

The fact that Boyle authorized Bryson to enter into an agreement with Maritime Travel that required him to pay funds personally to McInnes Cooper in trust, when Boyle was well aware that his personal consent was required for this agreement and not his consent in his capacity as Director of Go Travel. Boyle acknowledges that Go Travel could not have entered into this agreement on his behalf. 6.

The fact that Boyle acted in furtherance of the agreement by placing the first $100,000 contemplated by the Consent Order into the trust account of McInnes Cooper. [ 29 ] Throughout the negotiations, which lasted approximately half an hour, Bryson confirmed to Farrar that he was speaking with Boyle. Boyle acknowledges instructing Bryson to communicate to Farrar that he was prepared to pay $100,000.00 from his own funds, into trust with McInnes Cooper in exchange for Maritime's consent to the stay of the execution.

Although the defendant says that Bryson was acting as solicitor for Go Travel, and although this was the case, I am satisfied that by his conduct, and within the instructions provided by Boyle, he was communicating Boyle's personal commitment, not Boyle's instructions as majority shareholder and officer of Go Travel. [ 30 ] The agency relationship does not preclude Boyle, while instructing counsel on behalf of Go Travel, from authorizing the company's solicitor to act as his personal agent – that is, in his personal capacity – to communicate a personal commitment.

Maritime was entitled to view Bryson's confirmation as Boyle's commitment, as distinct from Go Travel's commitment. Effectively, at this stage of the negotiations, Bryson was wearing two hats, one as solicitor for Go Travel and the second as the agent for Boyle. Maritime understood this to be the case, and on the evidence it was entitled to do so. Bryson did not indicate to Farrar that he was making these commitments on behalf of Go Travel alone. [ 31 ] Boyle acknowledged that he authorized Bryson to accept the offer to pay the $100,000.00 into McInnes Cooper ’ s trust account.

He testified that he did not authorize Bryson to make a similar commitment in respect to the amount that remained owing on the balance of the judgment held by Maritime against Go Travel. To that extent, effectively, he is saying that his agent, Bryson, exceeded his authority. In this regard I note the comments of S.M.

Waddams in The Law of Contracts , 6 th ed. (Toronto: Canada Law Book: Toronto, 2010), at ¶¶ 258 - 259: ...Where an agent in fact is expressly or impliedly authorized to contract with a third person on behalf of his principal, and the third person knows it and deals with the agent on that basis, there is no difficulty in concluding that a contract is formed between the principal and the third party.

It is as though the principal were dealing directly with the third party, an agent forming a mere means of communication between two principal parties. ...contract law has been more concerned to protect the reasonable expectations of the promisee than to give effect to the will of the promisor. This preference is strikingly illustrated in the law of agency. Frequently an agent whose authority is restricted by the principal’s express instructions deals with a third party in disregard of those instructions.

If the limitation of authority is not made known to the third party the latter may quite reasonably assume that the agent is acting within the authority the agent purports to have. The principal’s secret instructions to the agent do not alter the reasonableness of the third party’s expectation. It has been held in such circumstances that the principal is liable if the agent acts within the apparent or ostensible authority. The third party’s expectation is thereby preferred to the principal’s express wish not to contract.

The agent has no “right” to disregard the principal’s instructions - the principal can sue the agent for breach of contract - but the agent has a “power” to bind the principal vis-a-vis the third party... [ 32 ] In his Canadian Agency Law , Fridman notes, at § 1.1 that the law of agency will apply only when the acts of one person on behalf of another make a difference to that other’s legal position, that is to say, his or her rights against, and liabilities towards, others. The grant of the right to exercise another person’s legal powers, thereby

potentially affecting the grantor’s legal position, is an essential feature of agency. The person alleged to be an agent must be endowed with the power to affect the liabilities of the person for whom he or she is alleged to be an agent. In the absence of such a power-liability relationship there cannot be an agency. [ 33 ] I am satisfied that Bryson had the authority to commit Boyle to make the two payments and thereby had the authority to affect Boyle's legal position. Absent that commitment, Boyle had no legal obligation to make any payment in respect to the judgment obtained by Maritime against Go Travel.

The circumstances in this case meet the criteria referenced by Fridman. [ 34 ] Even if Bryson's authority had been limited to committing Boyle to making the payment of $100,000.00, which I am satisfied was not the case, Boyle remains bound by the representation of his agent, even when his agent would have been exceeding his authority. Agency by Estoppel [ 35 ] The plaintiff submits that if there is no actual agency relationship (i.e. no implied agency) then Boyle should be estopped from arguing that Bryson did not have authority to bind him on the basis of the doctrine of agency by estoppel.

Counsel references the decision of Leblanc J. in Ismail v.

Treats Inc ., 2004 NSSC 16 , where he references Bowstead & and Reynolds on Agency , supra. , in providing a definition of agency by estoppel: 94 The authors of Bowstead and Reynolds on Agency (17th edn., 2001), define agency by estoppel in these terms: Where a person, by words or conduct, represents or permits it to be represented that another person is his agent, he will not be permitted to deny the agency with respect to anyone dealing, on the faith of such representation, with the person, so held out as agent, even if the relationship of principal and agent has not arisen [by agreement or subsequent ratification by the principal of acts done on his behalf; see para. 2-001]. [para. 2-099.] [ 36 ] Counsel also references the decision of Hall J. in Horne v.

Capital District Health Authority , 2005 NSSC 41 , where at para. 28 he outlines the three requirements for an agency by estoppel: ....Under the common law principle of agency, a principal may be bound by the acts of his or her agent under circumstances where the agent has the ostensible or apparent authority to act and bind the principal. This is usually referred to as the doctrine of "agency by estoppel". In order for the doctrine to arise three requirements must exist.

First, there must be a representation or holding out by the principal by a statement or conduct indicating the agent's authority to act for him or her; second, there must be a reliance on the representation by the third party; and third, there must have been an alteration to the third party's position as a result of the reliance. [ 37 ] The first requirement is clear: the evidence establishes that Boyle authorized Bryson to speak to Farrar, personally, in respect of his commitment to pay the $100,000.00 from his personal funds and also to counter-offer as to the date for the payment of the remaining balance, requesting it be on or before March 31, 2009, rather than at the end of February as had been proposed by Maritime.

In respect to both these representations, Boyle acknowledges that he had so instructed Bryson knowing that Bryson would be communicating this to Maritime through Farrar.

Additionally, he made the first $100,000.00 payment, consistent with his commitment to do so. [ 38 ] As to the second requirement for agency by estoppel it is clear that reliance was placed by Maritime on the representations made by Bryson, in that it was only at this point it indicated its agreement to consent to the stay of its execution. [ 39 ] As to the third requirement, Maritime, relying on the commitment of Boyle as communicated to Farrar by Bryson, altered its position by forbearing from exercising its legal right to contest the motion for the stay of execution. [ 40 ] If necessary, I am satisfied that on the evidence Boyle is precluded from maintaining that Bryson did not have authority to bind him, in his personal capacity, in respect to the payment of the balance of the outstanding judgment on March 31, 2009, providing that by that date the Court of Appeal had not rendered its decision on Go Travel ’ s appeal.

Agency by estoppel is established.

Did Bryson, as agent for Boyle, negotiate an agreement between Boyle and Maritime to pay monies into trust with McInnes Cooper? [41] The basic elements of a contract – offer, acceptance and consideration – are well-known. This case raises the additional featureof consideration flowing from a third party who does not directly benefit from the promise. Go Travel benefited by Maritime’s consent tothe stay, for which the consideration was Boyle’s agreement to provide the necessary funds; the consideration was, therefore, flowingfrom a third party.

I am satisfied that there was a contract. [42] Bryson testified that his view was the appeal by Go Travel stood a good chance to succeed. Also the view of Go Travel,including Bryson, was that the Court of Appeal decision was likely to be released prior to March 31, 2009. Boyle advised Bryson that GoTravel would have completed much of its busy season by March 31, 2009, and would likely have the necessary funds to retire thebalance of the debt. Boyle indicated to Bryson that it was therefore unlikely that he would actually need to put up his own funds.

Asnoted by counsel for the plaintiff, these considerations, which may have prompted Boyle to make the commitment he did, are irrelevantto the question of whether there was a contract between Boyle and Maritime on September 17, 2008. [43] Fridman provides the following comments about “consideration” in The Law of Contract in Canada, 5th ed (Toronto: ThomsonCarswell, 2006) at 83-84: In Currie v. Misa [(1875, L.R. 10 Exch. 153] in 1875 an English court provided a modern definition of consideration which hasfrequently been cited with approval by courts in Canada.

Consideration was there said to consist in, some right, interest, profit or benefit accruing to the one party or some forebearance, detriment, loss, or responsibility, given, suffered, orundertaken by the other. This was expressed by one Canadian judge in the following way [Barry C.J. in Robertson v. Robertson (1933), (NBCA), 6 M.P.R. 370 at 389 (N.B.C.A.)]: The principal requisite and that which is the essence of every consideration, is that it should create some benefit to the party promising orsome trouble, prejudice or inconvenience to the party to whom the promise is made.

Such statements reveal the essential ingredients of consideration as it has developed since the early days of truly contractual liability inthe common law. The act or promise of the party is, as it were, “brought” or “bargained for” by the act or promise of the other; eachparty exchanges something of value. To create an enforceable contract there must be, as Lennox J. said in Loranger v.

Haines [(1921), (ON CA), 64 D.L.R. 364 at 372 (ONCA)] “reciprocal undertakings”... [44] In Caligiuri v Tumillo, 2003 MBCA 119, the Manitoba Court of Appeal noted, at paras. 13-15, that forbearance fromexercising a legal right represented good consideration, even where the forbearance benefited a third party: There are many authorities that support the proposition that a promisee's promise to forbear from moving on a debt is sufficientconsideration for a promisor's promise to pay...

This is so even where the promisee's forbearance benefits a third party since the law is that although consideration must flow from thepromisee, it is not necessary that the consideration provided by the promisee flow to the promisor. In Chitty on Contracts, at para. 3-034,it is stated: Consideration need not move to the promisor. While consideration must move from the promisee, it need not move to the promisor. Itfollows that the requirement of consideration may be satisfied where the promisee suffers some detriment at the promisor's request, butconfers no corresponding benefit on the promisor.

Case law indicating that the promisee's consideration need not move to the promisor includes Moss v. 158339 Canada Inc., [2003] M.J.No. 267, 2003 MBCA 101 (Man. C.A.), at para. 24, Noren Investments Ltd. v. Brownie's Franchises Ltd. (1986), (BCSC), 33 D.L.R. (4th) 359 (B.C. S.C.) at 370, aff'd (1987), (BC CA), 37 D.L.R. (4th) 1 (B.C. C.A.), and Royal Bank v.Kiska (1967), (ON CA), 63 D.L.R. (2d) 582 (Ont. C.A.) at 590. Also see S.M.

Waddams, The Law of Contracts, 3d ed.(Toronto: Canada Law Book Inc., 1993) at para. 118, and the cases cited there, wherein the author states: The notion of exchange as an element of bargain further requires that what is exchanged for the promise sought to be enforced must beof some substance. The exchanged act or promise need not, however, be of benefit to the promisor.

For example, if B lends money to Xin exchange for A's promise to guarantee repayment, there is no doubt that there is a bargain between A and B and that A's promise isenforceable without any enquiry into whether A benefited by the advance of the money to X. Similarly, any act or promise by B or anyforbearance to act is sufficient consideration for A's promise if the promise is given in return. [45] Bryson and Farrar testified that the consent order reflected the agreement entered into by the parties.

The consent agreementwas, of course, in the proceeding between Maritime Travel and Go Travel, to which Boyle was not a party. However, on the evidence Iam satisfied that the agreement between Maritime and Go Travel whereby Maritime would consent to stay its execution was conditionalupon the commitment by Boyle to pay monies into trust from his personal funds. The consideration for that commitment was Maritime’sagreement with Go Travel to forbear from exercising its legal right to at least make argument before Saunders J. to be permitted topursue its execution.

There was an offer, albeit a counter offer, there was acceptance, and there was consideration. There was a contract.

If there was an agreement as claimed, did it include both the first payment of $100,000 and the remaining balance on the outstandingjudgment between Go Travel and Maritime to be paid on March 31, 2009, if by that time the decision by the Court of Appeal had notbeen rendered? [46] The commitment by Boyle, as communicated to Bryson and then to Farrar was that Boyle would make two payments from hispersonal funds, the initial payment of $100,000.00 and, providing the Court of Appeal decision had not been released, the payment of theremainder of the judgment, including any ensuing interest and costs, by March 31, 2009. [47] On the evidence, I am satisfied that Boyle requested that the date of the second payment be changed from the end of Februaryto the end of March.

I am further satisfied that he believed that by that time Go Travel would have generated sufficient income to coverthe second payment, if it became necessary. I am also satisfied that in authorizing Bryson to confirm his agreement to make the secondpayment personally, he did not expect to be required to do so, given his expectation that the company would be in a position to pay theamount required at that time.

He authorized Bryson to convey his agreement in order to ensure that Maritime would consent to the stayand Go Travel would not be put out of business. [48] Notwithstanding Boyle’s denials, I am satisfied that Bryson had actual authority, and if not, implied authority, to communicateto Farrar that both payments would be made in the manner described in the consent order. Although the consent order is not theagreement, it embodies it.

Conclusion [49] Although Bryson, on September 17, 2008, was not the solicitor for Boyle personally, he was his agent in communicating toMaritime, through their solicitor, the counter offer by Boyle to make payments into the trust account of McInnes Cooper providingMaritime would agree with Go Travel to consent to an order staying its execution. The plaintiff is entitled to damages equal to theamount owing on the judgment as of March 31, 2009, together with interest thereon. [50] Costs shall follow the event, unless counsel wish to make submissions to the contrary. [51] Judgment accordingly.

MacAdam, J.