Court of Appeal for Ontario

Date: November 21, 2017 Docket: C63800

Justices: Doherty, LaForme and Paciocco JJ.A.

Between

Allan Fenwick Applicant (Appellant)

and

Concierge Auctions, ULC and Bennett Jones LLP Respondents (Respondent)

Counsel

Ronald G. Slaght and Patrick Healy, for the appellant

Julia E. Schatz and Scott Azzopardi, for the respondent

Heard: October 19, 2017

On appeal from: The judgment of Justice Anne M. Mullins of the Superior Court of Justice, dated April 25, 2017, with reasons reported at 2017 ONSC 2514.

Paciocco J.A.:

Introduction

[1] The Weilands had been attempting, without luck, to sell their grand but heavily encumbered cottage. In 2016 they decided to try selling the cottage by auction and contracted with Concierge Auctions, ULC, a luxury real estate auction company, under an Auction Marketing Agreement (the "Seller's Contract"). The Seller's Contract contemplated that the ultimate buyer would likely be responsible for paying the auction fee (the "Buyer's Premium"), but there were exceptions. Most notably, the Weilands would have to pay the Buyer's Premium, if the Weilands refused to close after the auction produced an agreement of purchase and sale.

[2] The Fenwicks saw an ad posted by Concierge and decided to bid. In order to do so the Fenwicks had to sign a Bidder Registration Agreement (the "Bidder's Contract"). In the Bidder's Contract they agreed to pay a Buyer's Premium to Concierge if they proved to be the high bidder, unless the sale was not "consummated" because of default by the Weilands. The Fenwicks paid a total deposit of $430,000 into escrow to secure the Buyer's Premium, should they have to pay it.

[3] After Mr. Fenwick offered the highest bid, he executed an agreement of purchase and sale (the "First Purchase and Sale Contract") that the Weilands had pre-signed. When the Weilands learned what the high bid was – $4,300,000 minus a rebate of $350,000 – they were not happy. They claimed that the sale price was too low to enable them to pay off the encumbrances on the cottage, and to grant clear title. When the closing date came, the Weilands refused to close.

[4] The Fenwicks immediately demanded the return of their $430,000 deposit from the escrow agent. They also threatened the Weilands with a lawsuit, and began to negotiate with them directly. Before long, the Fenwicks and Weilands arrived at a second agreement of purchase and sale (the "Second Purchase and Sale Contract"). That sale closed the next day.

[5] When Concierge learned that the Fenwicks had purchased the property directly from the Weilands, it refused to agree to the release of the Buyer's Premium deposit. Concierge claimed an immediate right of payment once the Fenwicks acquired the property. The Fenwicks brought an application against both Concierge and the escrow agent, demanding the return of the deposit. Concierge cross-applied for a declaration of entitlement to the deposit under the Bidder's Contract, or as damages.

[6] Concierge ultimately won before the application judge. On April 25, 2017, she concluded that the two purchase and sale contracts were effectively one continuous agreement, and that since the sale closed, the Fenwicks had to pay Concierge the Buyer's Premium according to the terms of the Bidder's Contract.

[7] Mr. Fenwick appeals that decision. I would allow the appeal. In my view, the application judge did not interpret the Bidder's Contract correctly. Properly interpreted, that contract exempted the Fenwicks from payment of a fee to Concierge once the Weilands refused to close the sale as required by the First Purchase and Sale Contract. Simply put, the application judge permitted a sale not provided for by the Bidder's Contract and a closing event not contemplated in the Bidder's Contract, to trigger an obligation to pay under the Bidder's Contract. In doing so she erred.

[8] I would therefore declare that Mr. Fenwick is entitled to the payment of the $430,000, now paid into court.

Material Facts

A. The Auction Contracts

[9] The majestic cottage in Lake of Bays, Ontario, was held in the name of Deidre Weiland and Romac Enterprises, a company controlled by Deidre Weiland's husband, Mark Weiland. What could not be seen from the sprawling cottage shoreline was that more than $4,300,000 in mortgage financing had been secured against the property, and approximately $4,300,000 in debt remained outstanding. As imposing as those numbers are, if the Weilands managed to sell the property for their current list price of $6,999,000 their equity return would be substantial. The only problem was that the cottage property had been listed for sale for several years, and was not selling, even though the Weilands had dropped the price substantially.

[10] In 2016, the Weilands decided to try to sell the cottage by auction, still expecting a tidy return. They entered into a Seller's Contract with Concierge to conduct the auction. In that contract they agreed that a "no reserve bid" auction would be conducted. In other words, the Weilands agreed to enter into a purchase and sale contract with the high bidder in the amount of their bid, regardless of the amount of that bid.

[11] Concierge contends that the Weilands told them that less than half of the face value of the mortgages on title was still outstanding. What is clear is that the Weilands represented in the Seller's Contract that if a purchase and sale contract was achieved at the auction, they could and would transfer free and clear title to the property on closing.

[12] The Seller's Contract also set out provisions to see Concierge paid. Unlike a realtor, under the standard form Seller's Contract, Concierge did not depend entirely on a successful sale for their fees, and would not look exclusively to the sellers for payment of their fees. Concierge would contract both with the sellers and with bidders. Depending on contingencies outlined in the respective agreements, either the sellers or the high bidder, or both, would pay Concierge when all was said and done.

[13] The standard form Seller's Contract provides initially for an upfront payment by the seller of a "non-refundable" $55,000 engagement fee. However, in an Addendum to the standard form Seller's Contract, the Weilands managed to negotiate out of having to pay an engagement fee. Concierge was content to gamble either on the property being sold within the contract period, or at least a purchase and sale contract being achieved at the auction – events that would trigger additional, more remunerative payment obligations on the part of either the Weilands or the high bidder.

[14] Specifically, the Seller's Contract signed by the Weilands provided for a "Buyer's Premium" to be paid to Concierge if the auction produced a purchase and sale contract. That Buyer's Premium would be in the minimum amount of $250,000, or 10% of the high bid for the property should that 10% exceed $250,000.

[15] Under the terms of the Seller's Contract, the high bidder would be expected to cover the Buyer's Premium unless the sale did not close because of the intentional actions of the Weilands, in which case the Weilands would be obliged to pay it. The Weilands also agreed to pay the Buyer's Premium if the property sold before the auction or within 120 days of the auction.

[16] The material terms, found in s. 5 of the Seller's Contract, read as follows:

The successful bidder will be required to pay the Buyer's Premium to Concierge if the Property is sold at Auction, and the Buyer's Premium shall be deemed earned upon the conclusion of the Auction…. In the event that the Property is sold prior to the Auction, Owner will be obligated to pay Concierge the Buyer's Premium. In the event that the Property is not sold at the Auction (or the Auction is cancelled and this Agreement is terminated) and is contracted to be sold or otherwise transferred by Owner during the one hundred and twenty (120) day period after the expiration of this Agreement, Owner will be obligated to pay Concierge the Buyer's Premium…. After execution by Owner and buyer of a Purchase and Sale Contract, if the sale of the Property does not close due to the intentional actions of Owner or its agents or assigns, Owner shall pay Concierge, in addition to the Engagement Fee, the Buyer's Premium as if the Property had sold for the contracted sale price.

[17] To ensure that a Buyer's Premium could be enforced against the high bidder, those who wished to bid had to agree in a Bidder's Contract to make that payment. Deposits were also required. Section 3 of Concierge's standard form Bidder's Contract states, in material part:

Buyer shall pay to Concierge a "Buyer's Premium" equal to ten percent (10.00%) of the High Bid, plus HST (being the harmonized sales tax).

Buyer acknowledges and agrees that the Buyer's Premium is deemed earned upon conclusion of the Auction and shall be held by [the escrow agent] and disbursed to Concierge by [the escrow agent] upon closing. If the sale of the Property is not consummated for any reason other than default by the Seller, the Buyer's Premium shall nevertheless be due and payable to Concierge. The Buyer's Premium is not a real estate commission; it is the fee that Concierge charges to Bidder for bringing the Property(s) to auction…. Concierge is not involved in any way in connection with the closing of any real property transaction and all such functions will be handled exclusively by third party real estate brokerage or legal professionals.

B. The Fenwicks Acquire the Property

[18] With a Seller's Contract executed by the Weilands in hand, Concierge set out to attract bidders for the on-line "Instant Gavel" auction it had scheduled to end on July 25, 2016. An advertisement in the Globe and Mail attracted the Fenwicks. The Fenwicks decided to bid in Mr. Fenwick's name. Mr. Fenwick therefore signed the required standard form Bidder's Contract with Concierge on July 21, 2016.

[19] The Bidder's Contract contained the s. 3 payment terms reproduced in para. 17 above. As required in the Bidder's Contract, the Fenwicks wired a deposit sum of $100,000 to the escrow agent to help secure the Buyer's Premium in the event it would have to be paid.

[20] The Fenwicks also decided to take advantage of an incentive that was provided for in the Bidder's Contract, designed to promote a starting bid of at least $3,500,000. By agreeing to bid that amount, the Fenwicks were promised a 10% discount from the Weilands. And so Mr. Fenwick opened with a $3,500,000 bid on the understanding that if he was the highest bidder in the auction and the sale closed, $350,000 of the contract price would be rebated to him by the Weilands.

[21] Mr. Fenwick's ultimate bid of $4,300,000 proved to be the high bid when the online auction closed. On the next morning, July 26, 2016, the First Purchase and Sale Contract, pre-executed by the Weilands, was delivered to Mr. Fenwick accepting an offer in that amount. Mr. Fenwick signed it, and as required by the Bidder's Contract, he delivered a further sum of $330,000 to the escrow agent to entirely secure the Buyer's Premium of $430,000 he expected to pay.

[22] Almost immediately the sale fell into jeopardy. The Weilands were unhappy with the winning auction bid, which fell far shy of what they had been expecting. They let it be known that they would be unable to close because they could not pay off the mortgages on the cottage property, given the purchase price.

[23] Mr. Fenwick moved to protect his interests. On July 29, 2016, he registered a caution on title, along with the First Purchase and Sale Contract. In order to accomplish this, he paid the land transfer tax on the purchase price. He would be eligible to have that land transfer tax payment refunded if the transfer did not take place and if he did not take measures to enforce the agreement.

[24] On August 23, 2016, in response to the Weilands threat not to close, counsel for Concierge wrote to the Weilands reminding them that if they did not close they would be held accountable according to the terms of the Seller's Contract for the Buyer's Premium.

[25] The Fenwicks proceeded as if the deal was going to close, including by tendering payment, but on the date set for closing in the First Purchase and Sale Contract, August 24, 2016, the Weilands refused to do so. Counsel for Mr. Fenwick threatened to sue both Concierge and the Weilands and demanded that the escrow agent promptly refund the $430,000 deposit, as the sale had not closed.

[26] The escrow agent decided that the Fenwicks' request for a return of the deposit was premature. Its position was that, given that the First Purchase and Sale Contract was registered on title and the Fenwicks said they were suing for specific performance, it was not clear that the sale would not close.

[27] In the meantime, the Fenwicks continued to negotiate a resolution directly with the Weilands. On September 8, 2016, a settlement was reached. The Second Purchase and Sale Contract was executed, this time between Ms. Fenwick and Ms. Weiland and Romac Enterprises. Facially, the sale price was for the same amount as the auction bid, $4,300,000, but this deal did not provide for a $350,000 rebate to the Fenwicks, and Ms. Fenwick agreed to pay the Weilands' legal fees arising from the sale. It is also possible that fewer chattels were included than in the First Purchase and Sale Contract.

[28] The sale closed promptly on those terms the next day, September 9, 2016, and the property was registered in Ms. Fenwick's name. The registered transfer document stated that the land transfer tax was previously paid.

[29] In the meantime, Mr. Fenwick continued his efforts to secure a refund of the $430,000 deposit that had been paid. Concierge refused to consent to its release, claiming that the sale had now closed, entitling Concierge under the Bidder's Contract to the immediate receipt of the $430,000 Buyer's Premium.

[30] In response, on September 16, 2016, Mr. Fenwick brought an application against Concierge and the escrow agent for the return of the $430,000 deposit.

[31] In November, Concierge cross-applied for a declaration of entitlement to the $430,000 as an amount payable under the Bidder's Contract, or alternatively, as damages for breach of contract, unjust enrichment, or quantum meruit. The deposit was paid into court.

[32] That same month, November 2016, the Weilands declared bankruptcy, leaving the Fenwicks as the only realistic source of payment for Concierge's fees.

C. The Decision Below

[33] The application judge ultimately held that Concierge could not rely on its unjust enrichment and quantum meruit claims because the treatment of the funds was governed entirely by contract.

[34] The application judge did, however, accept Concierge's submission that the renegotiated Second Purchase and Sale Contract between the Weilands and Ms. Fenwick was effectively an extension of the First Purchase and Sale Contract. Reasoning by analogy from case law dealing with liability for real estate fees, she held that the two purchase and sale contracts were effectively one continuous agreement. The Fenwicks' "continuous intention to close the transaction throughout" provided the necessary link.

[35] Specifically, the Fenwicks made efforts to have the First Purchase and Sale Contract close even after the Weilands defaulted, by tendering to close, registering a caution, and paying the land transfer tax on the contract amount. They then showed their continued determination "to close their purchase of the cottage" by ultimately entering into the Second Purchase and Sale Contract for the same property, for the same base price, albeit without a $350,000 rebate.

[36] The application judge allowed that, had the Second Purchase and Sale Contract truly been distinct from the First Purchase and Sale Contract, the Fenwicks would not have been accountable for the Buyer's Premium because the Weilands had balked at closing. Since "the two agreements of purchase and sale were, effectively, one continuous agreement," however, Concierge was entitled under the terms of the Bidder's Contract to payment of the Buyer's Premium from the Fenwicks.

Issues

[37] Mr. Fenwick appeals to this court, urging that the application judge erred in fact and law. Although the grounds of appeal are layered, there are essentially two general issues to be determined:

1. Did the application judge err in interpreting Mr. Fenwick's obligation to pay the Buyer's Premium under the Bidder's Contract?

2. Did the application judge err in treating the two purchase and sale contracts as if they were one agreement?

[38] In my view, the standard of review to be applied in resolving these issues varies.

[39] A standard of correctness applies to the interpretation of the Bidder's Contract. This contract is a contract of adhesion, or a standard form contract, because those who wish to bid in an auction must agree to the preprinted terms used by Concierge, on a take it or leave it basis. Since the same contract is used for all of its auction bidders, a decision on the interpretation of this contract has precedential value; the same clauses should be given the same meaning in different cases. Moreover, there is no factual matrix specific to these parties that will assist in the interpretation process of this contract. The interpretation of the Bidder's Contract is therefore governed by the principles in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23, and not the deferential standards applicable to questions of mixed fact and law that typically apply to contractual interpretation, as described in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633.

[40] The question of whether there was one purchase and sale contract, or two, does not involve the interpretation of a standard form contract. It is a question of the legal characterization of the factual nexus between the two instruments, which I take to be a question of mixed fact and law. On that issue, a deferential standard of review is to be applied, although a standard of correctness is to be used if a legal question is readily extricable: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235.

Analysis

A. The Proper Interpretation of the Bidder's Contract

[41] Mr. Fenwick argues that the application judge erred in interpreting Mr. Fenwick's obligation to pay the Buyer's Premium under the Bidder's Contract. He submits that she erred in failing to apply the "exclusion" contained in s. 3, and by failing to recognize that there are no terms under the Bidder's Contract that would require Mr. Fenwick to pay the Buyer's Premium in the event of the Weilands' default.

[42] Although I have already included the material provisions from s. 3 in these reasons, I will reproduce them here to give the current discussion focus:

Buyer acknowledges and agrees that the Buyer's Premium is deemed earned upon conclusion of its Auction and shall be held by [the escrow agent] and disbursed to Concierge by [the escrow agent] upon closing. If the sale of the Property is not consummated for any reason other than default by the Seller, the Buyer's Premium shall nevertheless be due and payable to Concierge.

[43] The "exclusion" contained in s. 3 that Mr. Fenwick relies upon is the necessary implication that if the sale of the property is not "consummated" by reason of the Weilands' default, the escrow agent is not to disburse the Buyer's Premium it holds to Concierge.

[44] Concierge responds that the application judge properly interpreted the contract and found that the sale was "consummated", making the Buyer's Premium payable under the clear terms of the provision.

[45] The application judge did not expressly find that the sale had been "consummated" within the meaning of the Bidder's Contract because she did not, in her decision, engage in a close examination of the provisions. Concierge's inference that this was her finding is nonetheless a fair one. The application judge found that the "vendors balked at closing, evidently because the proceeds were insufficient to give clear title", and, in an apparent nod to the "exclusion" contained in s. 3, she recognized that on the "clear, unambiguous … words scribed by or [sic] behalf of Concierge alone, Concierge is limited to a remedy against the vendors." Still, the application judge felt that since the Second Purchase and Sale Contract was truly an extension of the First Purchase and Sale Contract, Concierge was entitled to the Buyer's Premium deposited by Mr. Fenwick. That finding can only mean that the application judge considered the sale of the property to have been "consummated".

[46] More importantly, the application judge's finding can only mean that she interpreted the consummation of the sale referred to in s. 3 as including sales terms and sales closings not provided for in the purchase and sale agreement that arises from the auction. With respect, this interpretation is not correct. When the Bidder's Contract is read as a whole, giving the words their ordinary and grammatical meaning, the objective intention of the parties provided for in s. 3 is that if the seller refuses to close the sale as required by the First Purchase and Sale Contract, the Buyer's Premium is not payable from the buyer's escrow deposit.

[47] A number of considerations drive this interpretation. First, it is clear that the term "sale of the Property" does not refer to any sale of the property, even any sale between the seller and high bidder. The "sale of the Property" that the contract is addressing in s. 3 is the same sale that is referred to throughout the Bidder's Contract, namely the sale agreed to in the purchase and sale contract that arises from the auction. This is apparent when the contract is read as a whole.

[48] Specifically, the recitals to the contract open with reference to "sale by auction". Section 1 then stipulates that any bid "constitutes an irrevocable offer to purchase the Property(s) for the full amount of the bid and that once the High Bid is accepted, the Bidder is obligated to purchase the property for the amount of the High Bid" (emphasis added). In s. 7, the bidder agrees if they become the buyer by offering the high bid they will "immediately … execute the Purchase and Sale Contract" upon the close of bidding, and this "serves as the definitive document for the purchase and sale of the Property(s)" (emphasis added). In s. 12 the bidder represents that they have "the capacity to close the transaction pursuant to the Purchase and Sale Contract" (emphasis added).

[49] The "sale of the Property" referred to in s. 3 is therefore the sale at the high bid price and on the terms provided for in the purchase and sale contract that is executed upon the completion of the auction.

[50] Quite simply, the oral submission of counsel for Concierge that s. 3 contemplates any sale of the same property between the seller and high bidder entered into at any time and on any terms, simply because the auction brought the parties together, is untenable and untethered from the terms of the contract.

[51] It is equally clear that the term, "consummated" is not a new concept being introduced into the contract for the first time. It refers to the "closing" of the sale. It is evident on a plain reading that the two sentences from s. 3 that I quote in para. 42 of these reasons work together. They cover off the material contingencies. The first sentence directs that the Buyer's Premium becomes payable to Concierge upon "closing". The second sentence addresses what happens if the sale does not close. The use of different words – "closing" and "consummated" – to describe the same event does not change this. The ordinary and grammatical meaning of each word enables them to work as synonyms, and the context in which they are used shows that they were meant to work as synonyms.

[52] Finally, the closing contemplated by the term "consummated" is not any closing. Once again, when the contract is read as a whole, it is clear that the closing or consummation that s. 3 refers to is the closing provided for in the contract of purchase and sale arrived at through the auction. As indicated, s. 12 of the Bidder's Contract requires the bidder to represent that they have "the capacity to close the transaction pursuant to the Purchase and Sale Contract" (emphasis added).

[53] Sections 8 and 9 provide further material detail:

8. Closing. Closing will take place in accordance with the terms and conditions of the Purchase and Sale Contract.

9. Closing Date. The date of closing the purchase of the Property between the Buyer and Seller shall be the "Closing Date" set forth in the Purchase and Sale Contract. In certain cases, Seller may extend the Closing Date pursuant to the Purchase and Sale Contract or as otherwise negotiated between Seller and Buyer, in Seller's sole discretion.

[54] It follows that the operative clause in s. 3, "[i]f the sale of the Property is not consummated for any reason other than default by the seller, the Buyer's Premium shall nevertheless be due and payable", means that if the sale agreed to in the purchase and sale contract does not close on the closing date provided for in the purchase and sale contract for any reason other than the default of the seller, the Buyer's Premium shall nevertheless be due and payable. The converse, of course, is that if the sale agreed to in the purchase and sale contract does not close on the closing date provided for in the agreement of purchase and sale because of the default of the seller, the Buyer's Premium is not due and payable under the Bidder's Contract.

[55] On the facts found by the application judge, the sale agreed to in the First Purchase and Sale Contract did not close according to the terms of the First Purchase and Sale Contract, because of the seller's default. Under the contract properly interpreted, this immediately triggered the "exclusion" contained in s. 3. Once the Weilands defaulted on the closing provided for in the First Purchase and Sale Contract, Concierge lost its entitlement to use Mr. Fenwick's escrow deposit to satisfy the Buyer's Premium.

[56] The fact that, after the Weilands' default, the Fenwicks made sustained efforts to acquire the property that is the subject of the Bidder's Contract, and achieved the acquisition of the property under broadly similar terms, does not change this.

[57] I do not agree with Concierge's position that this interpretation conflicts with sound commercial principles and good business sense because it enables the parties to voluntarily withdraw from the terms of their purchase and sale contract and to rearrange the deal to enable the Fenwicks to acquire the property and yet deprive Concierge of payment. Business efficacy can only fairly be evaluated by examining the two intersecting contracts that Concierge relied upon to get paid. If the parties were to conspire to deprive Concierge of the Buyer's Fee by voluntarily withdrawing from the terms of their purchase and sale contract, Concierge would retain the right to sue the Weilands for the Buyer's Premium under the Seller's Contract for having refused to close the auction sale.

[58] In truth, it is not a commercially inexpedient standard form contract that has deprived Concierge of payment for the work it has done. Two things have conspired to do so. First, Concierge waived the Weilands' engagement fee, choosing to incur the costs of the auction on speculation. Second, and more importantly, the Weilands, who clearly would have been obliged to pay the Buyer's Premium, either because of the Weilands' intentional actions in not "closing", or because the property sold within 120 days of the auction, went bankrupt.

[59] In my opinion the application judge therefore erred in law by operating under an incorrect interpretation of this standard form Bidder's Contract.

[60] With respect, even if this appeal had concerned a question of mixed fact and law, I would have found the application judge to be in error.

[61] In my view it was an extricable error of law for the application judge to ask whether the two purchase and sale contracts were effectively one continuous agreement, instead of interpreting the Bidder's Contract as a whole to determine what event exempted the buyer from the obligation to pay the Buyer's Premium. In my opinion, the application judge committed an extricable error of law by failing to apply the governing principles of contractual interpretation that she had rehearsed earlier in her reasons: Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293, 135 O.R. (3d) 241.

[62] I would therefore allow the appeal on the first ground of appeal.

B. The "One Continuous Agreement" Finding

[63] Given that this appeal can be resolved on the first ground of appeal, it is unnecessary for me to address the second ground, and I do not purport to make any binding pronouncements. I wish, however, to express my reservations about the propriety in auction cases of reasoning by analogy from cases dealing with the obligation of sellers to pay real estate commissions where the seller has contracted directly with a buyer the agent has introduced.

[64] The real estate cases, such as Glendinning v. Cavanagh (1908), 40 S.C.R. 414; McBrayne v. Imperial Loan Co. (1913), 28 O.L.R. 653 (C.A.); and William Allan Real Estate Co. v. Robichaud (1990), 72 O.R. (2d) 595 (H.C.), cited by the application judge, turn on the construction of commission clauses that invite consideration of whether the sale that occurred, in substance, arose from the real estate agent's efforts. These cases do not apply comfortably to auction contracts where the auction company's fee is for conducting the auction. It is not surprising that in the Bidder's Contract, Concierge explicitly disclaimed that the Buyer's Premium was a real estate commission. Nor is it surprising that any attempt by Concierge to provide the services of a real estate broker would contravene s. 4 of the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sched. C. The relative fees are earned for distinguishable services.

[65] It seems to me that whether a subsequent sale or "closing" that can be linked factually to an earlier auction should attract obligations on any party to pay a fee to an auction company, should turn on the construction of the relevant auction contract, not on general principles addressing the evasion of fees extracted from contracts governing a different enterprise.

Conclusion

[66] The appeal is allowed, the judgment of the application judge and the accompanying costs order is set aside, and a declaration is issued that Mr. Fenwick is entitled to the release of the escrow deposit, now held in court.

[67] Costs of this appeal of $20,000, inclusive of HST and disbursements, are awarded to Mr. Fenwick, as agreed between the parties.

[68] Written submissions of a maximum of three pages are invited on the award of costs in the initial application. The appellant, Mr. Fenwick's, submissions shall be filed within 15 days of the date of release of these reasons and the respondent, Concierge, shall have 10 days to respond.

Released: November 21, 2017 ("D.D.")

"David M. Paciocco J.A."

"I agree. Doherty J.A."

"I agree. H.S. LaForme J.A."