Lender clothed broker with authority
A mortgage broker absconded with $75,000 paid to her by a borrower to pay off a mortgage. The broker was the agent of the lender and had sent a payout statement for approx $250,000 to the lender for approval which the lender signed. The broker then sent a statement for $75,000 to the incoming lender who paid that amount to her.
The Alberta Court of Appeal held that the lender should bear the loss because his address on the mortgage was "c/o" the lender, the Land Titles Act entitled third parties to rely on the register, the Act said that payout statements should be obtained from the address for payment on the mortgage, and the lender knew the broker was signing payout statements but did not stop her or qualify her authority: Toronto-Dominion Bank (TD Canada Trust) v Currie [2017] FICR 14 at [20].
The court held that it is for someone relying on an agent's action to show the agent had ostensible authority, but for the principal to show that there is some limitation on their agent's actual authority which was conveyed to the person relying.
Here the agent had actual authority to send payout statements and receive payment and the lender principal had not conveyed any limitation to the third parties .
Read the full head note on Ford's International Commercial Reports here: Toronto-Dominion Bank (TD Canada Trust) v Currie [2017] FICR 14.
