Reference no: EM133199769

Mr. and Mrs. Dorion had dealt with Mr. Demmers in the past to purchase Manulife life insurance & RRSP investments

They had sold their house and were building a new one in a few months.  They were looking to invest their sale proceeds in the meantime.  They had $60,000 to invest. 

Mr. Demmers:

*had an office on the same floor as the Manulife office and his door had the Manulife logo

*Mr. Demmers calls from the Dorions went through the Manulife switchboard

*he had Manulife business cards which identified him as a "financial planner"

*Demmers used Manulife letterhead

*Demmers office displayed Manulife promotional materials

Mr. Demmers had a contract with Manulife to act as an agent not an employee and received a commission for sales. The contract stated that he was not authorized to make contracts on behalf of Manulife.

When the Dorions met with Demmers at his office he recommended that they invest the $60,000 Devon Capital Corp for a 60 day return with a 8.68% return and they did so

At the end of the 60 day return they received a cheque for $61,726 which bounced

Demmers had filed for bankruptcy and so the Dorions did not receive their money from Demmers

1.  Who is the principal, agent and third party
2. Who can the Dorions sue?
3. What is the legal test/rule of law for each party sued?
4. What do you think will be the outcome?