Contemporary Canadian Business Law: Principles and Cases Tenth Edition Cases

Contemporary Canadian Business Law: Principles and Cases Tenth Edition Chapter 15: Case 9 Case 9 deals with a homeowner (the principle) who lists her property for sale and enters into an agreement with an agent to facilitate a sale with a third party. Over the course of the agency agreement a prospective buyer inspected the property but didn’t make an offer before the agency agreement expired. The legal issue that arises comes after the agency agreement expires.

The prospective buyer later decided to put in an offer, which was accepted, but once discovering that the agreement between the principle and agent had expired brought legal action against the agent. The nature of the buyer’s actions in my opinion could be considered abnormal. The expiration of the agency agreement between the principle and the agent doesn’t have much bearing on his decision to place an offer on the house.

The buyer indicated his interest in the house when he inspected the property and would have become aware of the disclosed agency at that time, so the fact that the agency agreement was expired at the time the offer was made is irrelevant. If anyone was to have a problem with the fact that the offer was accepted after the expiration of the agency agreement expired it should be the principle, depending on the situation.

While the agreement may have expired the principle may have indicated through her actions that they would like the relationship to continue without signing a new agreement.

Without the principle notifying potential third parties that the agent no longer had the authority to bind the parties, the agent was completely within their rights to accept the offer. The property owner would be able to ratify the agreement assuming that at the time the offer was accepted it was an agency of conduct that existed between her and the agent. If agency of conduct wasn’t the case and the principle had made it known to potential third parties that the agent no longer had the authority to act on her behalf, before the agent accepted the offer, then it could not be ratified.

Ratification is retroactive, so agency by estoppel prevents the principle from denying representation after the fact.

Chapter 22: Case 9 Case 9 deals with two individuals, Smith(plaintiff) an owner of a large farm in eastern Ontario and Crockett (defendant) who occupied a small cabin on a woodlot that was on Mr. Smith’s farm property. Mr. Crockett constructed the log cabin in 1978 with the permission of the property owner and used the cabin as a fishing and hunting camp. For many years the defendant used the cabin on weekends during the summer while he was fishing, and for a weeks during the fall hunting season.

Beginning in the summer of 1981, Crockett began to make improvements to the area surrounding the cabin, by adding a small vegetable garden and constructing a fence during his months long summer vacation. The fence was constructed around both the cabin and garden for the purpose of keeping the animals out. During the hunting season of that year, Crockett cut down a number of small trees and extend the fenced-in-area to a parcel of land 23 metres by 30 metres and included a gate in the fence for access to the roadway.

Smith made sure to ask Crockett about the fence, shortly after it was constructed, and was told that it was there to keep the animals away from his flowers and vegetables. The following year Crockett accepted early retirement and spent the period from May 1st to November 30th at the cabin. Crockett continued to take advantage of the fishing, continued to plant a garden and helped Smith with the planting of his crops and his fall harvest.

Crockett would leave his belongings in the cabin over the cold winter months and spend his winter in a warmer climate.

When Crockett returned to the cabin the next April he was met by a local tax assessor, who asked him if he owned the cabin and answered with an affirmative and sometime alter received a municipal tax bill. Crockett would pay the tax bill, which was issued in his name, for the year of 1983. Over the next several years Crockett would continue to live in the cabin and only spend the coldest winter months away and paid taxes on the cabin each year. In 1994 Crockett expanded the fences further to include an area 30metres by 45metres in order to enclose a larger vegetable garden.

Smith didn’t object but warned that the two large hickory trees be left standing. In the summer of 2002, the two large hickory trees were damaged by a lightening strike and subsequently cut down by the defendant, which promoted the plantiff to go into a rage and order Crockett off the property. Crockett refused to leave claiming he was the owner of a parcel of land. The main legal issue to examine regarding this case deals with encroachment, which is simply defined as: A possessory right to the property of another that may be acquired by the passage of time.

Crockett has well documented existence of the woodlot property dating back over 20 years and was not met with objection on the part of the Smith, who is the true owner.

Due to the fact that the plantiff left the defendant undisturbed for over 20 years, he lost his right to dispute to object the encroachment. Smith would have had to make his objections known regarding Crockett’s occupancy in the log cabin, constructed on his wood lot, many years earlier if he wanted to maintain his right to object.

It is my belief that the court would view things similarly and decide that Smith lost his right to object to Crockett’s encroachment and allow the defendant to continue to use the property in the ways in which he had previously been. Having occupied the property for parts of 22 years not being asked to vacate the property during any of the first 10-20 years, Crockett was within his right to refuse and the fact that he paid taxes on the property further supports his claim to ownership of the property.

Chapter 28: Case 8 Case 8 deals with a cheque written by Ascot with the intent to purchase a painting from an art gallery. The plaintiff (Ascot) had prepared a cheque in the amount of the purchase price, which was $1000 and signed it, but was unsure of the exact spelling of the art gallery, so he left that part blank.

Ascot would leave the incomplete instrument in his desk drawer with the intention of making a phone call to the gallery later in the day for the information necessary to complete it.

After having determined the gallery’s name, while out at lunch, he returned to his office to complete the cheque but discovered it had been stolen. The defendant, Hines, a fellow employee of Ascot, had taken the cheque and filled it out payable “to bearer” and used it to purchase items at a store where Ascot’s signature was recognized. The storeowner would later present Ascot’s cheque to the bank for payment. Ascot was a few minutes too late calling the bank with a stop payment and the bank had already paid the cheque.

It is important to determine whether the plaintiff has the proper elements to warrant a real defence.

While there are three classes of defences to claims for payment of bills of exchange, the most effective are called real defences. Real defences are defences that go to the root of the instrument, and are good against all holders, including a holder in due course. In the situation explained above, it is clear the plaintiff never delivered the incomplete instrument and therefore is a real defence due to the fact that another party completed the instrument, and negotiated it for payment.

It is obvious that the defendant, Hines, completed the incomplete instrument and negotiated it for the payments by way of receiving goods from the storeowner. The legal claim of the cancellation of the instrument alone would not be enough to use in a defence against a claim of payment by a holder. Because Ascot was a few minutes late calling the bank to cancel the instrument he would not be able to deny payment as the cancellation was not noted on the instrument and its handling could have been viewed as reckless if the circumstances were not known.

Since Ascot had not only signed an incomplete instrument, but also did not deliver it, both elements were present to constitute a real defence. The courts would rule that the plaintiff did indeed have a real defence and as a result would not be responsible for the amount paid out by the bank to the storeowner. The actions of the employee go beyond the scope of this case and are therefore left out of the ruling. Chapter 19: Case 12 Case 12 deals with a two parties who were affected by the strike action taken by the Gear Makers’ Union.

Those parties are Gear Warehousing Company and Transmission Manufacturing Company. Gear Warehousing Company is a wholly owned subsidiary of Gear Manufacturing Company, while Transmission Manufacturing Company is an important customer of Gear Manufacturing Company.

The Gear Warehousing Company and the Gear Makers’ Union had been unsuccessfully trying to negotiate a new collective bargaining agreement before the expiry of the old agreement but could not reach an agreement.

Both parties requested a conciliation services offered by the Ministry of Labour, but the service failed to produce an agreement. Before a strike or lockout can take place, requesting the services of conciliation offered by the Ministry of Labour is mandatory. After the failed conciliation, the employees went out on strike and set up picket lines at the entrance of the plant of Gear Manufacturing Company as well as the entrance to Gear Warehousing company in an attempt to prevent the shipment of goods from the warehouse.

A few days later the employees decided to set up a picket line at Transmission Manufacturing Company, and prevented the company from shipping a large truckload of transmissions to another manufacturer. The actions taken by the striking employees resulted in the Transmission Manufacturing Company suffering a loss of $5000 through its failure to make its delivery on time.

The union members are legally allowed by law to withhold their services from their employer and set up picket lines at the entrances of the employer’s premise if they desire to.

Focusing on the rights of the Gear Warehousing Company, as long as the employees are picketing for the purpose of conveying information there is nothing they can do to prevent the picketing from occurring. Where the Gear Warehousing Company gains rights is when it comes to dealing with attempts by picketers to prevent persons from entering or leaving the plant, and therefore may be actionable by law.

As well, if property is damaged or a person is injured while attempting to enter or leave the employer’s premise, the employer has the right to apply for a court order limiting the number of pickets to only a few. While the employees were within their right to picket at the entrance of the plant of Gear Manufacturing Company, Gear Warehousing Company would be well within its rights to apply for a court order limiting the number of pickets to only a few so that shipment of goods from the warehouse could remain on schedule.

Moving on to examine the secondary picket is where the Transmission Manufacturing Company comes into the picture and we look at their rights.

A secondary picket is simply when picketing takes place somewhere other than the employer’s place of business. Until 2002 it was considered unlawful except where employer and supplier or customer were so closely related that suppliers or customers might be considered involved in the dispute as part of the employer’s overall operations.

Following a 2002 court ruling by the Supreme Court of Canada, it was determined that secondary picketing constitutes freedom of expression, and is protected under the Charter of Rights and Freedoms. Due to the fact that employees were not only conveying information regarding the strike but also preventing the Transmission company from making its shipment on time they would be well within its rights to apply for a court order limiting the number of pickets to only a few so that future shipments of goods from the company could remain on schedule.

In my opinion the courts would come to the same conclusion as mentioned above and limit the number of employees picketing in one place at a time to ensure the businesses involved were not prevented from making shipments.

The striking employees are well within their right to convey information regarding the strike action but cannot prevent the Gear Warehousing Company and the Transmission Manufacturing Company from making shipments to customers.