Court File and Parties

COURT FILE NO.: 437/03

DATE: 2005-02-16

DIVISIONAL COURT

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SUTTON GROUP BAYVIEW REALTY INC., Appellant

- and –

SAMUEL DENNIS and REMAX HALLMARK REALTY LTD., Respondent

BEFORE: Cunningham A.C.J., Matlow and Ferrier JJ.

COUNSEL: Won J. Kim, Victoria Paris, for the Appellant Andrea M. Habas and Nicole C. Culp, for the Respondent

HEARD: February 1, 2005

ENDORSEMENT

[1] This is an appeal from the decision of Wilson J. dated June 6, 2003, wherein Sutton’s claims against the defendants Dennis and Remax, for commissions, were dismissed.

[2] Dennis entered into a listing agreement to sell his house with Sutton for a six per cent commission. This house was owned by Dennis and another, Page, as tenants-in-common. It is Sutton’s position that Dennis represented to the Sutton agent that he had full authority to list the property on behalf of Page. Dennis denies this.

[3] Dennis subsequently decided not to proceed with Sutton, thinking only that he had signed a “letter of intent”. After retrieving the keys from the Sutton agent, he considered the matter at an end.

[4] Dennis then contacted his co-owner and upon receiving his consent to sell the property, he signed a listing agreement with Remax at a five per cent commission. The house sold and the commission has been paid into court pending resolution of the action.

[5] Section 35 of the Business Brokers Act requires that a copy of the agreement of purchase and sale be left with the person signing as a vendor. Counsel for the appellant agreed that this being a legal requirement, if a copy of the agreement was not left with Dennis after he signed it before the Sutton agent, the agreement is not enforceable.

[6] In her reasons, Wilson J. concluded that the Sutton agent had failed to leave a copy of the listing agreement with Dennis and that failure to do so results in the agreement being invalid. We have carefully reviewed the evidence on this point and the reasons of Wilson J. who found as a fact that a copy of the Sutton agreement was not left with Dennis. The findings of fact by a trial judge are entitled to considerable deference by an appellate court and will be set aside only if the appellate court is satisfied that the finding of fact is palpably in error. In the present case, there was clear evidence upon which the trial judge could reasonably make the finding of fact that she did. She gave a detailed assessment of the credibility of the parties and provided considerable detail in her reasons as to her basis for either believing or disbelieving the testimony of various witnesses. In our view, she made no palpable or overriding error and, accordingly, the appeal is dismissed.

[7] There are two portions of the decision of Wilson J., however, that we think require comment. In our view, Wilson J. erred in finding that the failure to post the listing agreement within two days of it having been signed as required by the MLS rules invalidated it. The MLS rules do not have the power of legislation. They are there to govern the MLS system. There are obviously good reasons for this rule and for its enforcement. However, each case must be determined on its own facts and, indeed, there may be legitimate circumstances where such a posting within 48 hours would not be necessary.

[8] The other issue, which we also believe requires comment, is the finding by Wilson J. that real estate agents are required to determine, prior to having a listing agreement signed, whether the person signing the listing is the sole owner or has authority to act. She also suggested that a listing agreement signed by only one of the co-owners was not an enforceable contract. This not only is not current practice in Ontario, it is not necessary. Wilson J. found the initial agreement unenforceable because it lacked Page’s signature. Clearly, a co-owner has the right to list a property for sale and it is not a requirement that real estate agents perform searches of title to determine the true nature of the property’s ownership. On this point, we are guided by Val Realty Ltd. v. Athley, [1980] A.J. No. 477 (Alta.Q.B.). A listing agreement is a completely separate contract, quite apart from any agreement involving the conveyance of land.

[9] The respondent, Dennis, is entitled to costs, which we fix at $4,500.00. The respondent, Remax, is entitled to its costs, which we fix at $2,500.00.

Cunningham A.C.J.

Matlow J.

Ferrier J.

DATE: February 16, 2005