CITATION: Homelife Maple Realty et al v. Singh et al, 2021 ONSC 4743
COURT FILE NO.: DC-21-02
DATE: 2021 07 05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HOMELIFE MAPLE REALTY LTD. and RAMANDEEP RAIKHI
S. Hussain, for the Plaintiffs/Respondents
Plaintiffs/Respondents
- and -
MANINDER SINGH, SAMINDER SINGH CHANA, MANDEEP CHANA, SUMEET KAUR
M. Simaan and A. Bhardwaj, for the Defendants/Appellants
Defendants/Appellants
HEARD: June 25th, 2021
REASONS FOR DECISION
[On appeal from a decision of Deputy Judge F. Wood of the Small Claims Court at Brampton, ON dated May 25th, 2020]
LEMAY J
[1] The Respondents in this action are a real estate agent (Ramandeep Singh Raikhi) and a brokerage (Homelife Maple Realty) respectively. The Appellants are two brothers and their wives who purchased a property at 12630 The Gore Road (“the Gore property”) in February of 2015. The Respondents claimed real estate commissions for the purchase of the property and brought a small claims court action to enforce payments of the commissions.
[2] The Appellants resisted the payment of commissions on a number of factual and legal grounds. The Deputy Judge rejected all the Appellants’ arguments and determined that the Appellants should pay commission to the Respondents in the sum of $24,478.63.
[3] The Appellants have appealed the Deputy Judge’s decision to the Divisional Court. The Appellants argue that the Deputy Judge erred in her interpretation and application of the agreement between the parties. The Appellants also argue that the Deputy Judge erred in her interpretation and application of the principles of unjust enrichment.
[4] I disagree. I have concluded that the Deputy Judge’s interpretation of the agreement between the parties is a question of fact or mixed fact and law. Therefore, it is entitled to deference. Further, I have determined that there are no palpable or overriding errors in the Deputy Judge’s reasons and that she correctly instructed herself in the law of unjust enrichment. Therefore, for the reasons that follow, the Appellants’ appeal is dismissed.
Background Facts
a) The Parties
[5] The Plaintiff, HomeLife Realty Ltd. (“Homelife”) is a real estate brokerage firm that employed the Plaintiff, Ramandeep Raikhi, as a sales agent at all material times.
[6] Originally, the action was brought against both the purchasers of the property and the sellers’ agent. The action was settled against the sellers’ agent. The remaining Defendants (the Appellants before me) are two sets of spouses. They are Maninder Singh and Sumeet Chana and Saminder Chana and Mandeep Chana. Maninder and Saminder are brothers. Where it is necessary to refer to the purchasers individually, I will refer to them by first names. Where I am referring to them as a group, I will refer to them as “the purchasers”.
[7] The two sets of spouses were looking for a house with some acreage that would allow both families to live in the same house. As a result, there were some unique features to the property that they were looking for, such as two kitchens.
b) The Relationship and Contract
[8] Maninder worked at a car dealership, which is where he met Ramandeep. After a conversation, Ramandeep began researching properties that would meet the unique needs of the purchasers. Ramandeep found several properties for the purchasers to consider, and there was a list of those properties tendered at trial. One of the properties on the list was the Gore Road property.
[9] In the real estate business, relationships between purchasers and real estate agents are almost always governed by a Buyers Representation Agreement (“BRA”). A BRA contains a series of standard form terms, including a term that the purchasers will not use the services of any other real estate agent in the time that the BRA is in effect. The time period that a BRA is in effect can be negotiated by the parties.
[10] In this case, there was no BRA signed. In fact, there was no agreement signed at all by the purchasers. However, at one point, a draft BRA had been prepared by the Respondents with an expiry date of October 1st, 2014.
[11] However, in the spring of 2014, Ramandeep not only found a listing for the parties to consider, but an offer was made on a property by Maninder using Ramandeep as his agent. In the summer of 2014, a series of offers and counter-offers were made on the Gore Road property between Maninder and the sellers. These offers and counter-offers did not result in a deal.
[12] In October of 2014, the purchasers made another offer for the Gore Road property, but with Saminder as the purchaser. Again, Ramandeep was the realtor who made the offer. There was some further back and forth, but an agreement was not reached. The evidence at trial established that the purchasers might have been prepared to offer as much as $870,000.00 for the property but that the sellers were not prepared to sell the property for less than $900,000.00.
[13] At that point, the Deputy Judge found that the purchasers told Ramandeep that they were going to stop pursuing the purchase of a new home, or the sale of the home owned by Maninder, until the spring. Ramandeep continued to send the purchasers some listings.
c) The Purchase of the Gore Property
[14] The Gore Road property came back on the market in early 2015. In February of 2015, Mandeep signed a BRA with the listing agent for that property and made an offer to purchase the property for $866,500.00, which was accepted.
[15] Title to the property was taken in the name of all four purchasers. Commission was paid to the sellers’ real estate agent. However, no documentation was tendered at trial to establish what amount of commission was paid to the sellers’ real estate agent.
[16] In the spring of 2015, Ramandeep contacted the brothers. There was some dispute as to what was said when Ramandeep contacted them. However, there is no dispute that there was some contact. Ramandeep testified that the purchasers told him that they were no longer interested in selling Maninder’s home or purchasing a new home. The purchasers testified that they told Ramandeep that they no longer wished to work with him.
[17] Ramandeep discovered that the home owned by Maninder had been sold, and that the purchasers had purchased the Gore Road property sometime in the spring of 2015. As a result, the Respondents pursued both this action and a proceeding at the Ontario Real Estate Association against the brokerage that had acted for the purchasers on the purchase of the Gore Road property. The OREA proceeding is not relevant to the determination of the issues before me.
d) The Trial Judge’s Findings
[18] On May 25th, 2020, the Deputy Judge released her decision. In her reasons, the Deputy Judge concluded that it was irrelevant that no BRA had been signed. Therefore, the Respondents could advance a claim in either quantum meruit or unjust enrichment.
[19] The Deputy Judge rejected the purchasers’ arguments that they had, in fact, paid the full commission to the sellers’ agent as no evidence had been tendered by the purchasers to show how much commission had been paid. The Deputy Judge also rejected the evidence of the purchasers that they had ended the relationship with Ramandeep because they were unhappy with him.
[20] Based on the evidence proffered at trial, the Deputy Judge inferred that the buyers had paid less than full commission to the sellers’ agent. The Deputy Judge inferred that the reason the purchasers went directly to the sellers’ agent was to cut out Ramandeep from the transaction and save on his commission.
[21] Based on that finding, the Deputy Judge then determined that the purchasers had been unjustly enriched. She concluded that the amount of the unjust enrichment should be calculated based on the usual commission that Ramandeep would have received had the transaction been completed. The commission was fixed at $24,478.63, which was 2.5% of the price of the home plus HST.
Issues
[22] The Notice of Appeal and the Appellants’ factum sets out a series of different issues where the Appellants challenge the Deputy Judge’s decision. Those areas can be divided into two categories as follows:
a) The Deputy Judge erred in concluding that the Respondents were entitled to compensation from the purchase of the property by, inter alia, misapprehending the evidence and drawing improper inferences that led her to misconstrue the agreement between the parties.
b) The Deputy Judge erred in her articulation of the law of unjust enrichment and of her application of that law to the facts of this case.
[23] I would note that the Appellants’ factum focused on different issues than were addressed in oral argument. I will address both the written and oral arguments that were advanced by the Appellants in the context of these two general issues. Before considering these issues, however, it is important to set out the principles relating to the standard of review.
Standard of Review
[24] The standard of review is governed by the Supreme Court of Canada’s decision in Housen v. Nikolaisen 2002 SCC 33 [2002] 2 S.C.R. 35. On a question of law, the standard is correctness. On questions of fact, the standard is palpable and overriding error. Finally, on questions of mixed fact and law, the standard of review lies along a spectrum.
[25] In Sattva Capital v. Creston Moly 2014 SCC 53, the Supreme Court of Canada has also considered the standard of review that should be applied when interpreting a contract. In that decision, Rothstein J. concluded (at para. 50) that contractual interpretation involved issues of mixed fact and law. He went on to observe (at para. 53) that it might be possible to identify an extricable question of law in the interpretation of the contract. However, he acknowledged that these extricable questions would be rare.
[26] Then, there is the issue of inferences. Housen, supra addressed the question of the standard of review to be applied when reviewing inferences drawn by the trial judge. At para. 23, the Court stated:
23 We reiterate that it is not the role of appellate courts to second-guess the weight to be assigned to the various items of evidence. If there is no palpable and overriding error with respect to the underlying facts that the trial judge relies on to draw the inference, then it is only where the inference-drawing process itself is palpably in error that an appellate court can interfere with the factual conclusion. The appellate court is not free to interfere with a factual conclusion that it disagrees with where such disagreement stems from a difference of opinion over the weight to be assigned to the underlying facts. As we discuss below, it is our respectful view that our colleague’s finding that the trial judge erred by imputing knowledge of the hazard to the municipality in this case is an example of this type of impermissible interference with the factual inference drawn by the trial judge.
[27] An appellate Court must also approach inferences drawn from the facts deferentially unless there is a palpable error in the inference-drawing process.
[28] Finally, I should note that, although counsel for the Appellants argued that there are errors of law in the Deputy Judge’s interpretation of the contract, I am not persuaded either that any of these errors are extricable errors of law or that the decision of the Deputy Judge in respect of the contractual terms should be subject to a correctness standard of review.
[29] In support of his argument, Appellants’ counsel points to the decision of the Supreme Court in Ledcor v. Northbridge 2016 SCC 37 [2016] 2 S.C.R. 23 for the proposition that, in certain circumstances, the interpretation of a standard form contract is better characterized as a question of law. Ledcor is an exception to the rule in Sattva, supra.
[30] The problem with this position is that no contract was actually reduced to writing or signed in this case. The Deputy Judge was not interpreting a standard form contract. Instead, she was reviewing a factual matrix where there was no signed contract in order to determine what the agreement of the parties actually was. Indeed, as counsel for the Appellants acknowledges in his factum (at para. 38), the Appellants “refused to be bound by the proposed BRA terms.”
[31] Therefore, in this case, the factual matrix is very significant to the conclusions that should be drawn about the contract. The terms of the contract are dependent on the factual findings that the Deputy Judge made. The contract that was entered into in this case bears no resemblance to the standard form contract described at paragraph 25 of Ledcor. In my view, the Deputy Judge’s findings on the terms of the parties’ contract are subject to the standard of review outlined in Saatva, supra.
Issue #1 – Interpretation of the Contract
[32] Counsel for the Appellants relies on a whole series of alleged errors in the Deputy Judge’s interpretation of the contract. In essence, the Appellants argue that the Deputy Judge erred in determining that there was an enforceable agreement between the parties. Those alleged errors include:
a) The Deputy Judge’s assertion that there was a contract (or quasi-contractual basis) for compensation to be paid to the Appellants;
b) The Deputy Judge’s conclusion that any contract that had previously existed was still in effect in February of 2015 when the Gore Road property was purchased;
c) The Deputy Judge’s inference that the Appellants used the services of the sellers’ agent instead of the Respondents’ because the Appellants were deliberately trying to avoid paying commission to the Respondents.
[33] I reject the Appellants’ assertions that any of these findings are in error. They were all findings that were amply supported by the evidence and should not be interfered with absent a palpable and overriding error. I see none in this case.
[34] I start with the concern that there was no written contract. The fact that there is no written contract does not mean that there was no contract between the parties. Where there is an oral contract, it is up to the Deputy Judge to infer from all of the facts as to what the terms of that oral contract were. The Deputy Judge is entitled to consider the testimony of the parties and infer the applicable terms from that testimony.
[35] This brings me to the Appellants’ assertions about the standard form contract, the BRA. Although counsel acknowledged in his submissions that the BRA was not the contract, he still argued that the BRA informed the terms of the unwritten contract. In particular, the Appellants argued that the draft BRA that was prepared by the Respondents would have expired on September 1st, 2014.
[36] The Appellants cannot rely upon the unsigned BRA to support their conclusions about the end of any agreement with the Respondents for three reasons:
a) The Respondents were continuing to do work with the Appellants after this alleged termination date of September 1st, 2014 passed. In particular, an offer was tendered on the Gore Road property by the Appellants, and using the services of the Respondents as agent, in early October of 2014.
b) The Appellants did not want to be bound to the terms of the BRA. It should not then be open to them to claim that the provisions in the BRA that are to their advantage should be applied while avoiding the application of the provisions that are not to their advantage.
c) The Deputy Judge was entitled to consider the evidence and determine that the Appellants still had obligations to the Respondents when the offer to purchase the Gore Road property was made in February of 2015. She came to that conclusion in part by considering, and rejecting, the Appellants’ testimony about why they allegedly terminated the relationship with the Respondents.
[37] This last point brings me to the third issue, which is whether the inferences drawn by the Deputy Judge were justified on the facts of this case. Counsel for the Appellants argues that there were no facts to support the Deputy Judge’s inferences, particularly about why the Appellants did not use the services of the Respondents in concluding the transaction in February of 2015. I disagree.
[38] The evidence was clear that the Appellants and the sellers of the Gore Road property were some distance apart in their negotiations in the fall of 2014. The evidence was also clear that the Appellants were interested in purchasing this property and, as the Deputy Judge noted, were somewhat frustrated that they could not purchase the property.
[39] Given those facts, it was open to the Deputy Judge to conclude that the Appellants had decided that the way to address the gap between the price that the Appellants were willing to pay and the price that the sellers were willing to accept was to cut the Respondents out of the transaction and use the money that was saved to eliminate the gap. This is the type of inference that the Supreme Court warned appellate judges against interfering with on appeal and I am of the view that I must approach it with deference.
[40] In any event, however, I see no error in the Deputy Judge’s decision to draw this inference. The selling price was lower than the sellers had originally been prepared to accept as their “bottom line”, while it was right at the top end of the range that the Appellants had been willing to pay. Further, the gap between what the sellers were willing to accept and what the buyers were willing to pay was similar to the commission that the Respondents would have been entitled to if they had acted on the transaction. When these facts are considered, it can be seen that the inference the Deputy Judge drew was not unsupported by the facts. It is, therefore, a reasonable inference and should not be disturbed on appeal.
[41] As a final matter, there was some suggestion in the Notice of Appeal that the Deputy Judge had failed to appreciate that the Appellants had found the Gore Road property on their own and that it was not presented to them by the Respondents. This point was not argued in oral submissions, and I see nothing in the evidence that would support this assertion.
[42] For the foregoing reasons, I see no palpable or overriding error on the part of the Deputy Judge in either her conclusions about the contract or the inferences that she has drawn in this case from those conclusions.
Issue #2 – Unjust Enrichment
[43] The test for determining the existence of an unjust enrichment is well-known and has been set out in many decisions of many levels of Court. In Garland v. Consumers Gas 2004 SCC 25, [2004] 1 S.C.R. 629, unjust enrichment requires:
a) An enrichment of the Defendant;
b) A corresponding deprivation of the Plaintiff;
c) An absence of a juristic reason for the enrichment.
[44] In this case, counsel argues that the Appellants did not receive an enrichment because there was no evidence that they actually received any money. I disagree. The case law makes it clear that an enrichment of the Defendant can come where there is either a positive or a negative benefit. Garland, supra at para. 30.
[45] Counsel also argues that the enrichment was improperly quantified because the Appellants were willing to pay somewhere between $860,000.00 and $870,000.00 for the house, and ended up purchasing the house for $867,500.00. As a result, counsel argues that they have not been enriched. Again, I disagree.
[46] The enrichment in this case flows from the fact that the Appellants were able to purchase the property for less than the $900,000.00 price that the sellers were prepared to accept. Given that the same real estate agent acted for both the purchasers and the sellers, it is no great stretch to infer that there was a reduction in the commission payable that made the deal possible on terms that were satisfactory to both sides.
[47] The Appellants also argue that only the sellers would have known how much the real estate commissions actually were. As a result, the Appellants argue that the Deputy Judge should not have drawn the inference that the commissions were less because the Appellants did not use the services of the Respondents. Again, I disagree. It was open to the Deputy Judge to conclude, from the evidence that she had, that the Appellants were able to purchase the Gore Road property for a lower price because the commissions would not be payable to the Respondents. The ability to purchase the property for a lower price is an enrichment.
[48] This brings me to the question of whether there is a corresponding deprivation. The Appellants argue that there was no corresponding deprivation. This issue can be very briefly dealt with. Having determined that the Appellants were enriched by being able to purchase the house at a lower price because they did not have to pay the Respondents’ commissions, it follows that the Respondents suffered a corresponding deprivation of the commissions that they did not receive.
[49] Finally, there is the juristic reason branch of the test. The Appellants argue that there was a juristic reason in this case because of the fact that any potential contract had long since expired. For the reasons set out above, I disagree. It was open for the Deputy Judge to find that the Appellants still had obligations to the Respondents under their oral arrangements.
[50] This brings me to the calculation of damages. The Appellants argue that, at most, the enrichment to them would have been in the range of $3,500.00, as that was the difference between what they were willing to pay and what they actually paid. I reject this assertion. The Deputy Judge explained how she arrived at the calculation of damages and I see no reason to interfere in that calculation. The reasons that she has given disclose no palpable or overriding error.
Conclusion and Costs
[51] For the foregoing reasons, the Appellants’ appeal is dismissed.
[52] The parties have both submitted bills of costs. Counsel for the Appellants properly submitted his bill in advance of the hearing. Counsel for the Respondents did not submit her bill of costs until after the hearing took place. Counsel is reminded as to the requirements of the rules in that respect.
[53] The parties are encouraged to agree on the costs of the appeal. Failing agreement, the Respondents are to provide written costs submissions of no more than three (3) double-spaced pages, exclusive of case law and offers to settle within ten (10) calendar days of the release of these reasons. The Appellants are to provide their written costs submissions of no more than three (3) double-spaced pages, exclusive of case law and offers to settle within ten (10) calendar days thereafter.
[54] The parties are to submit their costs submissions through CaseLines. A copy is to be e-mailed to my judicial assistant at karen.bunbury@ontario.ca. There are to be no extensions to the time limits for completing costs submissions, even on consent, without my leave. If I do not receive costs submissions in accordance with these reasons, then there will be no order as to costs.
[55] As a final matter, interest continues to accrue in accordance with the Deputy Judge’s order. Having dismissed the appeal, I see no reason to interfere with any costs award that the Deputy Judge may have made.
LEMAY J
Released: July 5, 2021
CITATION: Homelife Maple Realty et al v. Singh et al, 2021 ONSC 4743
COURT FILE NO.: DC-21-02
DATE: 2021 07 05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HOMELIFE MAPLE REALTY LTD. and RAMANDEEP RAIKHI
Plaintiffs/Respondents
- and -
MANINDER SINGH, SAMINDER SINGH CHANA, MANDEEP CHANA, SUMEET KAUR
Defendants/Appellants
REASONS FOR JUDGMENT
LEMAY J
Released: July 5, 2021