J.J. Barnicke Limited v. Ottawa (City), 2008 ONCA 185

CITATION: J.J. Barnicke Limited v. Ottawa (City), 2008 ONCA 185

DATE: 20080313

DOCKET: C46101

COURT OF APPEAL FOR ONTARIO

WINKLER C.J.O., MACPHERSON and ROULEAU JJ.A.

BETWEEN:

J.J. BARNICKE LIMITED

Plaintiff/Respondent

and

THE CITY OF OTTAWA

Defendant/Appellant

Jeremy Wright for the appellant

Paul D’Angelo for the respondent

Heard: March 11, 2008

On appeal from the judgment of Justice David L. McWilliam of the Superior Court of Justice dated September 18, 2006.

APPEAL BOOK ENDORSEMENT

[1] The appellant, the City of Ottawa, appeals from the judgment of McWilliam J. dated 18 September 2006 which ordered the appellant to pay the respondent J.J. Barnicke Limited $124,588.13 as commission on the sale of a municipal property owned by the appellant. The trial judge concluded that the parties had agreed that the appellant should be paid a commission if it assisted in the sale of the property; however, the parties did not agree on the quantum of the commission. In these circumstances, the trial judge applied s. 34(2) of the Real Estate and Business Brokers Act, R.S.O. 1990, c. R. 4 (the “REBBA”):

34(2) All commission … in respect of a trade in real estate shall be upon an agreed amount or percentage of the sale price … and, where no agreement as to the amount of the commission has been entered into, the rate of commission … shall be that generally prevailing in the community where the real estate is situate. [Emphasis added.]

[2] Based on the testimony of several witnesses, the trial judge found that the appropriate commission rate in the community was 3.75 per cent, which led to a commission of $124,588.13.

[3] The appellant’s principal ground of appeal is that the appellant never agreed to pay any commission with respect to the municipal property in question.

[4] We disagree. The trial judge found as a fact that the parties were agreed that a commission was payable. There was ample evidence to support this conclusion. The appellant gave the respondent and other real estate brokers its commission rate sheet. The appellant dealt with the respondent with respect to the property over the course of several months. The appellant knew that the respondent expected a commission but took no steps to disabuse the respondent of its expectation. At the conclusion of the transaction, the appellant wrote to the respondent: “I’d like to take this opportunity to thank you for bringing us this offer. Your cooperation throughout the process has been appreciated.” Against the backdrop of these and other facts, the trial judge’s conclusion that there was an agreement – admittedly, an oral agreement (there is nothing in the REBBA to preclude this) – to pay a commission was sound.

[5] In these circumstances – an agreement to pay a commission, but disagreement about the rate of a commission – we can see no error in the trial judge’s conclusion that s. 34(2) of the REBBA resolved the disagreement. Indeed, s. 34(2) speaks to precisely the situation in this case.

[6] We enter this caveat. The factual context in this case is important. Section 34(2) of the REBBA will not apply in a case where the vendor states clearly that it will not pay a real estate broker the commission the broker is seeking. The vendor is entitled to take this position without fear that s. 34(2) will automatically be triggered because there is then a disagreement between the parties about the commission rate. However, that is not what happened here. The problem in this case is that the appellant agreed to pay a commission, never told the respondent that it would not pay the regular commission, and indeed, through its conduct, left the respondent with the impression that it would be paid its regular commission. In this factual context, the trial judge correctly invoked s. 34(2) of the REBBA to resolve the dispute.

[7] The appeal is dismissed. The respondent is entitled to costs of the appeal which we fix at $15,000 inclusive of disbursements and GST.