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Digest of the Week — Must Lawyer Take Instruction From Both Spouses?

Mraz v. Herman |
2015 CarswellAlta 1848 |
Alberta Court of Queen's Bench

Professions and occupations | Barristers and solicitors | Relationship with client | Fiduciary duty

Clients were husband and wife who jointly owned three parcels of property — Husband retained solicitor to arrange sale of property for clients by non-binding tenders and to act for clients if tender was accepted — Solicitor's only contact with wife was on day tenders were rejected and further instructions were provided — First purchaser offered to buy all three parcels for $310,000, with $290,000 being allocated to two parcels — After communicating only with husband, solicitor informed first purchaser that offer of $290,000 for two parcels was accepted — Clients subsequently received offer from second purchaser to buy all three parcels for $560,000 — First purchaser refused to withdraw his offer, and he registered caveat against his two parcels — Wife asserted she had never instructed solicitor to accept first purchaser's offer — Clients terminated solicitor's retainer and proceeded to sell all three parcels to second purchaser — First purchaser commenced action against clients and ultimately accepted settlement of $102,500 on basis that second purchaser would lease parcels to first purchaser — Clients brought action against solicitor for damages for breach of fiduciary obligations, negligence, and breach of contract — Action dismissed — Clients failed to establish any liability on part of solicitor — Husband had acted as agent for wife, and all obligations to clients had been fulfilled through solicitor's dealings with husband — Clients had retained solicitor jointly, and wife had understood that husband was acting on her behalf — Solicitor had never been provided with any notice that he was required to communicate with wife directly — Solicitor had every reasonable expectation that he would take specific instructions on routine basis from husband for both clients — Circumstances also plainly indicated that wife, through her conduct, accepted agency relationship — Wife had given husband actual authority to act on her behalf in their dealings with solicitor, and nothing indicated this had changed before solicitor's retainer was terminated — Communication between husband and first purchaser before solicitor communicated acceptance of first purchaser's offer indicated both clients intended to accept first purchaser's offer — Wife admitted that husband would not have done anything unilaterally — Adverse inference from husband's failure to testify was not required.
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