COURT OF APPEAL FOR ONTARIO
Sharpe, Armstrong and Rouleau JJ.A.
BETWEEN
Joseph Besharah
Plaintiff (Appellant)
and
Philip Saikaley, Najat Saikaley and Robert Saikaley
Defendants (Respondents)
Counsel:
Peter K. Doody and Jack Hughes, for the plaintiff (appellant)
Craig M. Bater, for the defendants (respondents)
Heard: March 26, 2012
On appeal from the judgment of Justice Martin S. James of the Superior Court of Justice, dated February 7, 2011, with reasons reported at 2011 ONSC 616.
ENDORSEMENT
1This appeal involves a dispute over the profits made by the respondent Philip Saikaley from the purchase and resale of a recreational property. Saikaley saw that an island near his own cottage was for sale. He negotiated an agreement to purchase the island for $120,000, conditional on obtaining financing. When the appellant Besharah visited Saikaley’s cottage, Saikaley pointed out the island and indicated that it was for sale. Besharah decided that he wanted to buy the island and to offer $200,000. Saikaley agreed to present that offer to the vendor. There was a conflict in the evidence as to the discussions between the parties, but it is clear that Saikaley did not disclose that he had negotiated a conditional agreement to purchase the property. Saikaley waived the financing condition on his agreement to purchase the island and told Besharah that his offer had been accepted. However, the trial judge found that shortly thereafter, Besharah changed his mind and told Saikaley that he wanted to end the transaction. Saikaley subsequently re-sold the island without any involvement from Besharah for $235,000 and a profit of $115,000 less expenses.
2Besharah’s claim as pleaded and as presented at trial was for a 50% share of these profits. Besharah claimed that he had agreed with Saikaley to jointly purchase and market the island after Besharah decided not to purchase it on his own. Saikaley testified that there was no such agreement. The trial judge accepted Saikaley’s evidence, rejected that of Besharah and found that there was no agreement. While Besharah’s trial counsel made reference to a claim for breach of trust in his closing submissions, no claim for breach of fiduciary duty was pleaded or advanced at trial.
3On appeal, Besharah does not challenge the finding that there was no agreement to share the profits but alleges breach of fiduciary duty and asserts a claim that Saikaley be required to disgorge 100% of the profits.
4We are of the view that the appeal must be dismissed for the following reasons.
5First, breach of fiduciary duty was not pleaded. Accordingly, the trial judge was not asked to make the crucial findings of fact necessary to sustain that claim. In our view, it is simply too late for Besharah to alter the theory and nature of his claim at this stage. In particular, we note that there was conflicting evidence from Besharah and Saikaley as to what was said and discussed before Besharah instructed Saikaley to offer to purchase the island. The trial judge recited their differing versions of the events at paras. 10-13 of his reasons. He held, quite understandably, that it was not necessary for him to resolve those differences as the claim turned on whether or not the parties had made a subsequent agreement to jointly develop the property and share the proceeds.
6On this record, it is not open to us on appeal to effectively retry the case and make the findings Besharah asks us to make in support of his late-blooming claim for breach of fiduciary duty.
7Second, we do not accept the submission that the conclusion that Saikaley was Besharah’s agent or owed Besharah fiduciary duties necessarily flows from the trial judge’s findings and from Saikaley’s own evidence. Saikaley was not a real estate agent. The trial judge did not find that he undertook anything more than to convey Besharah’s offer to the vendor. There was no finding that Saikaley told Besharah what to offer. Nor did the trial judge find that Saikaley had the power to negotiate with the vendor on Besharah’s behalf. The finding that Saikaley was authorized to convey the offer to the vendor, on its own, does not give rise to a full agency relationship.
8We certainly do not condone Saikaley’s deceptive conduct which could well have given rise to a claim by Besharah had he closed the transaction. However, we are not persuaded on the record we have that Saikaley’s conduct placed him in a fiduciary relationship or gave rise to fiduciary duties in relation to the purchase of the island.
9Finally, we note that Saikaley had acquired his interest in the island before he had any dealings on it with Besharah and that he resold the island at a profit after Besharah had repudiated his agreement to purchase the island. On those facts, it is difficult to see how Besharah’s repudiated agreement to purchase the island had a sufficient nexus or connection the profits made by Saikaley to support a claim in equity for 100% of those profits.
10Accordingly, the appeal is dismissed with cost to the respondent fixed at $19,076.77 inclusive of disbursements and HST.
“Robert J. Sharpe J.A.”
“R.P. Armstrong J.A.”
“Paul Rouleau J.A.”