Citation: Maritime Travel Inc. v. Boyle, 2010 NSSC 260
Date: 20100623
Docket: Hfx No. 312635
Registry: Halifax
Between:
Maritime Travel Inc., a body corporate Plaintiff
and
Hugh Boyle Defendant
DECISION
Judge: The Honourable Justice Gerald R. P. Moir
Date of Hearing: June 22, 2010
Written Decision: Oral decision transcribed, edited, and signed on June 30, 2010
Counsel: John T. Shanks, for plaintiff
George W. MacDonald, Q.C., for defendant
Moir, J. (Orally):
Introduction
[1] A consent order was granted by a judge of the Court of Appeal staying the respondent's right to execute on a judgment, which was given by this court and appealed. Although he was not a party to the appeal, the order provided for a principal of the appellant to make certain payments into trust. One of the payments was not made.
[2] The appeal was dismissed and the respondent sought an execution order against the principal. The Registrar refused to issue the order, and she said that the parties revert to their positions under the final orders of this court. I am told that the position of the Court of Appeal was that it was functus officio.
[3] The respondent to the appeal brought this action in which it is alleged that the principal orally contracted with the respondent to make the payments into trust. The consideration is the benefit to the appellant of the consent to a stay. It is said that the consent order evidences the oral contract.
[4] The defence includes the assertion that the principal was not a party to the oral contract underlying the consent order.
[5] The one time appellant now seeks summary judgment.
Facts
[6] After a trial in early 2008, Justice Hood released a decision awarding damages to Maritime Travel against Go Travel for losses Maritime Travel incurred because of Go Travel's false or misleading advertising. With costs and interest, the judgment amounted to about $320,000.
[7] Go Travel appealed. It moved for a stay pending the outcome of the appeal. During a break in the hearing of the motion, counsel discussed settlement. An agreement was made. A consent order was issued.
[8] The central question on this motion for summary judgment is whether the agreement, as evidenced by the consent order, makes Mr. Hugh Boyle, an officer and director of Go Travel, personally liable for the balance owing on the judgment debt.
[9] The people who were present when the agreement was made were Mr. Bryson, now Justice Bryson, Mr. Farrar, now Justice Farrar, and Mr. Shanks, counsel for Maritime Travel. I have no evidence directly from any of these. The evidence of what was agreed comes from the order they drafted or consented to. Therefore, the wording of the order is crucial to the determination I have to make.
[10] The order contains the style of the appeal. It is in the Nova Scotia Court of Appeal and the parties are Go Travel, as appellant, and Maritime Travel, as respondent. Mr. Boyle is not a party. The order was granted by Justice Saunders on October 29, 2008.
[11] The order makes reference to "Peter Bryson, Q.C. on behalf of the Appellant and David Farrar, Q.C. on behalf of the Respondent, consenting hereto". It does not refer to anyone acting on behalf of Mr. Boyle.
[12] The first operative paragraph of the order provided that "one hundred thousand dollars...will be placed in trust by Hugh Boyle...with McInnes Cooper". That was done.
[13] The second, and most important paragraph for this motion, provided that "an amount equal to the remainder of the outstanding judgment...will be placed in trust by Hugh Boyle with McInnes Cooper no later than March 31, 2009", unless the appeal is disposed of by then.
[14] The third paragraph of the order provided for payment from trust if Go Travel was still to pay damages to Maritime Travel after the appeal was disposed of. It allowed for the possibility of partial success by Go Travel: "the remainder will be returned to the party who placed the funds into trust".
[15] Similarly, the fourth paragraph provides for payment from trust if Go Travel was fully successful. The trust money "will be fully returned to the party who placed the funds into trust".
[16] The fifth paragraph granted the stay.
[17] As is usual, the consents are at the end of the order. Mr. Bryson signed for McInnes Cooper "Solicitors for the Appellant". He did not sign expressly on behalf of Mr. Boyle.
[18] Mr. Robert Dexter is the C.E.O. of Maritime Travel. He instructed Mr. Farrar and Mr. Shanks when the agreement was being negotiated. He describes the terms presented to him by Farrar and Shanks at paras. 18 to 21 of his affidavit. His description does not significantly differ from what is found in the consent order.
[19] Mr. Dexter's affidavit provides context for the agreement. Paragraphs 16 and 17 read:
At the time that counsel for Maritime Travel were about to begin negotiation with counsel for Go Travel, I instructed counsel for Maritime Travel that any agreement for payment of money in exchange for ending Maritime Travel's opposition for the Motion for a Stay must be conditional upon payment of money by Hugh Boyle personally as one of the reasons being expressed by Go Travel for the Stay at the time was the inability of Go Travel to pay the damages awarded in the trial decision and the potential that Go Travel may become insolvent in the near future.
I was concerned that a promise to pay money in exchange for withdrawing Maritime Travel's opposition to the Motion for a Stay would be insufficient if the source of the funds remained Go Travel in light of their statement of financial hardship as contained in the Affidavit of Ian Dodd and as expressed earlier that day in his cross-examination. Likewise, I was concerned that if money was paid by Go Travel into their lawyer's trust account other creditors of Go Travel might be able to make a claim against these funds.
[20] After describing the terms that were presented to him by Mr. Farrar and Mr. Shanks, Mr. Dexter swears at para. 22:
On the basis of the offer presented by Peter Bryson, Q.C. that Hugh Boyle would personally pay the amounts set out above, I instructed counsel for Maritime Travel to accept the offer presented by Peter Bryson on behalf of Hugh Boyle.
[21] Mr. Boyle's affidavit also provides important context. He says at para. 17:
At the time [i.e. when the agreement was negotiated], I understood and verily believed that the March 31, 2009 date for the second payment was negotiated between the parties taking into consideration the cyclical nature of cash flow in the industry and the peak business period being the months of January to March, such that Go Travel would be in the best position to pay the balance of the judgment.
[22] Mr. Boyle swears, at paras. 5 and 6, that Mr. Bryson was retained only to act for Go Travel and he rendered accounts only to Go Travel.
[23] He says at paras. 9 and 10 that he never was a party to the false advertising suit or appeal, and Mr. Bryson was never retained to act for Mr. Boyle personally.
[24] At para. 18 he swears that, according to Mr. Bryson at the time of the negotiations, nothing was said "that I personally would pay the balance of the judgment debt of Go Travel direct from my personal funds".
Principles for Summary Judgment
[25] The principles that apply to summary judgment in favour of a plaintiff are well known, and they do not require close analysis in this case. They are neatly summarized into four propositions by Justice Bryson in AGC Flat Glass North America Ltd. v. CCP Atlantic Specialty Products Inc., 2010 NSSC 108 at para. 13. The propositions are:
(1) The plaintiff must show that, on uncontroverted facts, it is entitled, as a matter of law, to succeed; that is to say, that there is no fact material to the cause of action that is in issue.
(2) The burden then shifts to the defendant to show evidence that the defence has a real prospect of success; that is to say that there is a genuine issue of fact material to the claim or defence, that must be decided before the case can be determined on its merits.
(3) The responding party must put "its best foot forward" or risk losing. This requires more than a simple assertion, but requires evidence.
(4) If material facts are not in dispute, the court has an obligation to apply the law to those facts and decide the matter.
Is it Clearly Established that Mr. Boyle was a Party?
[26] In the beginning is the need for the plaintiff to prove its case clearly. Maritime Travel says that it does not matter that Mr. Boyle did not personally retain Mr. Bryson. It says he had ostensible authority, and the most serious evidence for that inference is the consent order itself.
[27] For Maritime Travel, Mr. Shanks writes:
It is well established in Nova Scotia that a litigant who has retained counsel must be bound by settlements entered into by said counsel, where counsel has acted within the scope of his or her authority or apparent authority, unless (i) a limitation or restriction has been placed upon said authority; and (ii) the opposing side has knowledge of any such limitation. [emphasis added]
And, he also writes:
Furthermore, if a litigant wishes to maintain that a settlement has been wrongly entered into by counsel, the appropriate remedy is to commence proceedings against his or her solicitor for failure to obey instructions, rather than to dishonour the terms of the settlement. [emphasis added]
[28] Mr. Shanks refers to authorities that support his statements, and I think they are sound statements of law. However, Mr. Boyle was not a litigant. The difficulty becomes clear when one reads paragraph 84 of the dissenting opinion in Chender v. Lewaskewicz, 2007 NSCA 108, to which Mr. Shanks referred:
Thus, the actual authority of a solicitor arises from the retainer itself. The solicitor's ostensible authority in the eyes of third parties arises from the fact that the client, through the retainer, has held out the solicitor as his or her agent for the conduct of the litigation. A solicitor who is not retained by a client has no authority to act on behalf of that client. The key is the retainer which, in most cases, is not disputed.
[29] "The key is the retainer which, in most cases, is not disputed." Para. 85 reads simply: "However, in this case, the retainer is disputed." And, so it is here.
[30] For Justice Cromwell, the Chender case turned on the authority of an agent to retain sub-agents. Apparent authority was not in issue. Justice Cromwell wrote parenthetically at para. 87 "There can be no issue of apparent authority as there is no evidence that the appellant [here, the defendant] did anything in relation to Mr. DeMont [here, Maritime Travel] from which he [Maritime Travel] was entitled to assume that Henry [here, Bryson] had authority."
[31] This is consistent with the passage from Bowstead and Reynolds approved in the majority opinion at para. 35: "But the agent may also have authority resulting from such a manifestation made by the principal to a third party; such authority is called apparent authority."
[32] So the first difficulty I have with finding that the plaintiff proved its case clearly is the lack of evidence showing that Mr. Boyle, as opposed to Mr. Bryson, manifested to Maritime Travel a consent that Bryson could represent, or act for, Boyle.
[33] There is a further difficulty. Even if Mr. Bryson could somehow create his own ostensible authority, the primary evidence for it does not clearly prove that Bryson held himself out as Boyle's agent. As I said, the primary evidence is the consent order.
[34] It is possible for one person to contract with another that a third party, a stranger to the contract, will do this or that. Most often, such would be a condition but it is not impossible to make it a promise, a term.
[35] The consent order is open to an interpretation along these lines. Such an interpretation would explain the references to Mr. Bryson as acting "on behalf of the appellant", his signature for the appellant, and the absence of a reference or a signature for Boyle. Such an interpretation would likely lead to the conclusion suggested by Mr. MacDonald: The payments were conditions for lifting the stay and breach leads to a right to move for reinstatement.
[36] I am not suggesting that this is the correct interpretation of the contract. The order is secondary to it, and the oral contract could be proved by the people who were there when it was spoken, Justice Farrar, Justice Bryson, and Mr. Shanks. I am saying that it remains unclear whether Mr. Boyle promised, through Mr. Bryson, to pay or Go Travel promised that Mr. Boyle would put money in trust. For that reason, the plaintiff's case may only be resolved by trial.
Estoppel
[37] Maritime Travel alleges an agency by estoppel. For this, it must clearly establish that, in Mr. Shanks' words, "Mr. Boyle permitted Mr. Bryson to represent to Maritime Travel and its counsel that he had the authority to negotiate on Mr. Boyle's behalf".
[38] That is not clearly established. Firstly, the dealings are open to the interpretation I just described, in which case Mr. Boyle was not to be personally bound. Secondly, it is not clearly established either that Mr. Bryson represented that he spoke for Mr. Boyle or that such a representation was founded on anything coming from Mr. Boyle.
Absolute Privilege
[39] Mr. MacDonald argues that the consent order and other dealings before the Court of Appeal are subject to the absolute privilege that extends to pleadings, testimony, submissions, and other things in a civil case. He relies on Kudelski, S.A. v. Love, 2006 MBCA 92 and its interpretation of Frame v. Smith, [1987] S.C.J. 49.
[40] I would not hesitate to deal with the question of law raised by this argument if it were the only genuine issue requiring trial. It is not. On a summary judgment motion, I have to leave it to trial or to a new motion to separate and determine a question of law.
Conclusion
[41] The motion for summary judgment is dismissed.
J.