COURT FILE NO.: 09-44045

DATE: 2012/02/22

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

TEAM REALTY INC.

Plaintiff

– and –

KANATA 1075 MARCH ROAD PROJECT INC., RABIH ADADA, 1633799 ONTARIO INC. and MICHEL TREMBLAY

Defendants

Paul D’Angelo, for the Plaintiff

Paull N. Leamen, for the Defendants Kanata 1075 March Road Project Inc. and Rabih Adada

David Dwoskin, for the Defendant 1633799 Ontario Inc.

REASONS FOR judgment

Power J.

Introduction

[1] The plaintiff, a real estate brokerage, seeks payment from Kanata 1075 March Road Project Inc. (hereinafter referred to as “Kanata”) of a real estate commission in the amount of $236,565 allegedly owed to it by Kanata pursuant to a listing agreement concerning a parcel of vacant land known as 1075 March Road. Mr. Adada is the president of Kanata. Against him personally the plaintiff seeks damages in the same amount on account of his alleged intentional interference with the contractual relations between the plaintiff and Kanata. The plaintiff also seeks a judgment against 1633799 Ontario Inc. (hereinafter referred to as “1633799”) in the amount of $99,093.75 in the event that the claims set out above are unsuccessful and, in addition, the amount of $137,471.25 as a result of intentional interference with the same contractual relations between the plaintiff and the defendant Kanata.

[2] The plaintiff also seeks an award of pre-judgment and post-judgment interest on the aforesaid sums and its costs of these proceedings on a substantial indemnity basis.

[3] The defendant, Michel Tremblay, declared bankruptcy following the commencement of these proceedings and, accordingly, this action against him has been stayed. He was, at all relevant times, the principal owner of 1633799.

[4] The defendants Kanata and Adada cross-claim against the defendant 1633799 and it, 1633799, cross-claims against the defendants Kanata and Adada.

[5] Team Realty Inc. argues that an agreement of purchase and sale for the aforesaid property was entered into in late March, 2008, between 1633799 as buyer and Kanata as seller for a purchase price of $3,755,000. It submits that, notwithstanding that a $50,000 deposit payable upon acceptance by the seller was not paid, the said agreement of purchase and sale (“APS”) was “revived” in September of 2008 when 1633799 “came up” with the $50,000 deposit at which time the buyer and seller agreed to some minor amendments to the agreement. It further submits that the March APS therefore “attracts” the commission owed by the seller pursuant to the aforesaid listing agreement as a result of the transaction being eventually closed in December of that year. It argues that the commission is due and payable because the first APS was signed during the “listing period” referred to in the listing agreement. Its position is that the first APS was the agreement that the seller and buyer purported to complete in late 2008 and that, therefore, “the second APS was only an extension, amendment or replacement of the first APS.”

[6] The plaintiff argues, in the alternative that, because Kanata and Adada insisted prior to the closing of the second APS that a new purchasing entity be substituted in place of 1633799, this second or new APS was signed during the “holdover period” set out in the aforesaid listing agreement. Therefore, it argues that, since Mr. Tremblay and 1633799 were the alter ego of the newly named purchasing entity, 4479181 Canada Inc. (“4479181”), this second or new APS was signed during the “holdover period” specified in the listing agreement “which means either the introduction to Michel Tremblay or a showing to him, had to take place during the listing period.” This terminology will become more meaningful as these Reasons unfold.

[7] In the further alternative the plaintiff argues that the ultimate purchaser was introduced to the property during the listing period by “any source whatsoever” in accordance with the aforesaid listing agreement. At trial, Kanata and Adada acknowledged that 1633799 and/or Michel Tremblay was the de facto alter ego of 4479181.

[8] Also, as a further alternative, the plaintiff argues that the ultimate purchaser “Charles Tremblay in Trust”, (no relationship to Michel Tremblay), was introduced to the property during the listing period specified in the listing agreement by “any source whatsoever” and that, therefore, the commission is due and payable.

[9] The plaintiff argues that Kanata and Adada breached the aforesaid listing agreement by not referring inquiries to the brokerage, the plaintiff. Of great significance, it is alleged that Adada and Kanata did not act in good faith and that they deliberately, and wrongfully, attempted to avoid the payment of the real estate commission owing to the plaintiff. The plaintiff alleges that 1633799 aided and assisted Kanata and Adada in this attempt to avoid payment of a commission.

[10] I will summarize the various defences later in these reasons.

The Relevant Facts and Discussion Thereon

[11] The relevant facts are lengthy and complicated. The aforesaid listing agreement, which initially was an exclusive one, between the plaintiff as broker and Kanata as seller was signed on February 15^th and February 18^th, 2008 respectively. Mr. Jawaid Ismail, a real estate salesperson employed by the plaintiff, signed on behalf of the plaintiff. Mr. Adada signed as the president of Kanata. The agreement is entitled “Listing Agreement – Commercial Authority to Offer for Sale.” It is necessary to quote extensively from this listing agreement:

The Seller hereby gives the listing Brokerage the exclusive and irrevocable right to act as the Seller’s agent, commencing at 12:01 a.m. on the 16^th day of February, 2008, until 11:59 p.m. on the 15^th day of August, 2008 (the “Listing Period”), Seller acknowledges that the length of the Listing Period is negotiable between the Seller and the Listing Brokerage and, if an MLS listing, may be subject to minimum requirements of the real estate board, however, in accordance with the Real Estate and Business Brokers Act of Ontario (2002), if the Listing Period exceeds six months, the Listing Brokerage must obtain the Seller’s initials.

to offer the Property for sale at a price of:

Three Million Eight Hundred Thousand …………………………. Dollars ($Cdn 3,800,000.00) and upon the terms particularly set out herein, or at such other price and/or terms acceptable to the Seller. It is understood that the price and/or terms set out herein are at the Seller’s personal request, after full discussion with the Listing Brokerage’s representative regarding potential market value of the Property.

The Seller hereby represents and warrants that the Seller is not a party to any other listing agreement for the Property or agreement to pay commission to any other real estate brokerage for the sale of the property.

1. DEFINITIONS AND INTERPRETATIONS: For the purposes of this Listing Agreement (“Authority” or “Agreement”), “Seller” includes vendor and a “buyer” includes a purchaser or a prospective purchaser. A purchase shall be deemed to include the entering into of any agreement to exchange, or the obtaining of an option to purchase which is subsequently exercised, or the causing of a First Right of Refusal to be exercised, or an agreement to sell or transfer shares or assets. “Real property” includes real estate as defined in the Real Estate and Business Brokers Act (2002). The “Property” shall be deemed to include any part thereof or interest therein. A “real estate board” includes a real estate association. This Agreement shall be read with all changes of gender or number required by the context. For purposes of this Agreement, anyone introduced or shown the property shall be deemed to include any spouse, heirs, executors, administrators, successors, assigns, related corporations and affiliated corporations. Related corporations or affiliated corporations shall include any corporation where one half or a majority of the shareholders, directors or officers of the related or affiliated corporation are the same person(s) as the shareholders, directors, or officers of the corporation introduced or shown the property.

2. COMMISSION: In consideration of the Listing Brokerage listing the Property for sale, the Seller agrees to pay the Listing Brokerage a commission of 6% of the sale price of the Property or ……………………………………………...for any valid offer to purchase the Property from any source whatsoever obtained during the Listing Period and on the terms and conditions set out in this Agreement OR such other terms and conditions as the Seller may accept.

The Seller further agrees to pay such commission as calculated above if an agreement to purchase is agreed to or accepted by the Seller or anyone on the Seller’s behalf within sixty days after the expiration of the Listing Period (Holdover Period), so long as such agreement is with anyone who was introduced to the property from any source whatsoever during the Listing Period or shown the property during the Listing Period. If, however, the offer for the purchase of the Property is pursuant to a new agreement in writing to pay commission to another registered real estate brokerage, the Seller’s liability for commission shall be reduced by the amount paid by the Seller under the new agreement.

The Seller further agrees to pay such commission as calculated above even if the transaction contemplated by an agreement to purchase agreed to or accepted by the Seller or anyone on the Seller’s behalf is not completed, if such non-completion is owing or attributable to the Seller’s default or neglect, said commission to be payable on the date set for completion of the purchase of the Property.

Any deposit in respect of any agreement where the transaction has been completed shall first be applied to reduce the commission payable. Should such amounts paid to the Listing Brokerage from the deposit or by the Seller’s solicitor not be sufficient, the Seller shall be liable to pay to the Listing Brokerage on demand, any deficiency in commission and taxes owing on such commission.

In the event the buyer fails to complete the purchase and the deposit becomes forfeited, awarded, directed or released to the Seller, the Seller then authorizes the Listing Brokerage to retain as agreed compensation for services rendered, fifty (50%) per cent of the said deposit (but not to exceed the commission payable had a sale been consummated) and to pay the balance of the deposit to the Seller.

All amounts set out as commission are to be paid plus applicable federal Goods and Services Tax (GST) on such commission.

3. REPRESENTATION: The Seller acknowledges that the Listing Brokerage has provided the Seller with written information explaining agency relationships, including information on Seller Representation, Sub-agency, Buyer Representation, Multiple Representation and Customer Service.

The Seller authorizes the Listing Brokerage to co-operate with any other registered real estate brokerage (co-operating brokerage), and to offer to pay the co-operating brokerage a commission of 3% of the sale price of the Property or…………………………………………...........................................

out of the commission the Seller pays the Listing Brokerage. The Seller understands that unless the Seller is otherwise informed, the co-operating brokerage is representing the interests of the buyer in the transaction. The Seller further acknowledges that the Listing Brokerage may be listing other properties that may be similar to the Seller’s Property and the Seller hereby consents to the Listing Brokerage acting as an agent for more than one seller without any claim by the Seller or conflict of interest. Any commission payable to any other brokerage shall be paid out of the commission the Seller pays the Listing Brokerage.

The Seller hereby appoints the Listing Brokerage as the Seller’s agent for the purpose of giving and receiving notices pursuant to any offer or agreement to purchase the Property.

MULTIPLE REPRESENTATION: The Seller hereby acknowledges that the Listing Brokerage may be entering into buyer representation agreements with buyers who may be interested in purchasing the Seller’s Property. In the event that the Listing Brokerage has entered into or enters into a buyer representation agreement with a prospective buyer for the Seller’s Property, the Listing Brokerage will obtain the Seller’s written consent to represent both the Seller and the buyer for the transaction at the earliest practical opportunity and in all cases prior to any offer to purchase being submitted or presented.

The Seller understands and acknowledges that the Listing Brokerage must be impartial when representing both the Seller and the buyer and equally protect the interests of the Seller and buyer. The Seller understands and acknowledges that when representing both the Seller and the buyer, the Listing Brokerage shall have a duty of full disclosure to both the Seller and the buyer, including a requirement to disclose all factual information about the property known to the Listing Brokerage.

However, the Seller further understands and acknowledges that the Listing Brokerage shall not disclose:

• that the Seller may or will accept less than the listed price, unless otherwise instructed in writing by the Seller;

• that the buyer may or will pay more than the offered price, unless otherwise instructed in writing by the buyer;

• the motivation of or personal information about the Seller or buyer, unless otherwise instructed in writing by the party to which the information applies or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;

• the price the buyer should offer or the price the Seller should accept; and

• the Listing Brokerage shall not disclose to the buyer the terms of any other offer.

However, it is understood that factual market information about comparable properties and information known to the Listing Brokerage concerning potential uses for the Property will be disclosed to both Seller and buyer to assist them to come to their own conclusions.

MULTIPLE REPRESENTATION AND CUSTOMER SERVICE: The Seller understands and agrees that the Listing Brokerage also provides representation and customer service to other sellers and buyers. If the Listing Brokerage represents or provides customer service to more than one seller or buyer for the same trade, the Listing Brokerage shall, in writing, at the earliest practical opportunity and before any offer is made, inform all sellers and buyers of the nature of the Listing Brokerage’s relationship to each seller and buyer.

4. REFERRAL OF ENQUIRIES: The Seller agrees that during the Listing Period, the Seller shall advise the Listing Brokerage immediately of all enquiries from any source whatsoever, and all offers to purchase submitted to the Seller shall be immediately submitted to the Listing Brokerage by the Seller before the Seller accepts or rejects the same. If the Seller fails to advise the Listing Brokerage of any enquiry during the Listing Period and said enquiry results in the Seller’s accepting a valid offer to purchase during the Listing Period or within the Holdover Period after the expiration of the Listing Period described above, the Seller agrees to pay the Listing Brokerage the amount of commission set out above, payable within five (5) days following the Listing Brokerage’s written demand therefor.

5. SUCCESSORS AND ASSIGNS: The heirs, executors, administrators, successors and assigns of the undersigned are bound by the terms of this Agreement.

6. CONFLICT OR DISCREPANCY: If there is any conflict or discrepancy between any provision added to this Agreement (including any Schedule attached hereto) and any provision in the standard pre-set portion hereof, the added provision shall supersede the standard pre-set provision to the extent of such conflict or discrepancy. This Agreement, including any Schedule attached hereto, shall constitute the entire Authority from the Seller to the Brokerage. There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein.

[12] As will have been observed from a reading of the above, the “listing period” in the agreement is from February 16to August 15, 2008. The agreement states that anyone introduced to or shown the property includes their assigns. Paragraph 2 obliges the seller to pay a 6% commission “for any valid offer to purchase the property from any source whatsoever obtained during the listing period or if an agreement to purchase is agreed to or accepted by the seller or anyone on the seller’s behalf within 60 days after the expiration of the listing period (holdover period) as long as such agreement is with anyone who was introduced to the property from any source whatsoever during the listing period.

[13] Note also that the seller acknowledges that the brokerage may be entering into buyer representation agreements with buyers who may be interested in purchasing the seller’s property (multiple representation).

[14] When pressed in cross-examination concerning whether he read the entire listing agreement before signing it, Mr. Adada said that he did not read the entire agreement and was not aware of the holdover provision. Pressed further he said he was a human being and was travelling at that time. He said he did not have the luxury to read everything. I do not accept this as truthful evidence and would observe that he had experience with listing agreements in many other transactions.

[15] Jawaid Ismail testified on behalf of the plaintiff. He was/is a real estate salesperson employed with the plaintiff for approximately eight years. He was, in my opinion, an impressive and credible witness. In 2005 he, pursuant to a Buyer Representation Agreement (“BRA”) acted as the real estate agent for the defendant Kanata when it purchased the subject property for $1,000,000. Kanata was incorporated for the specific purpose of taking title to 1075 March Road. The company has no other business or assets. It is significant to observe that the vendor at that time was also represented by an agent employed by the plaintiff and that the vendor signed a listing agreement with the plaintiff. That listing agreement, however, was a multiple listing one as opposed to an exclusive one as here. Pursuant to the 2005 BRA Kanata agreed to pay up to a 2.5% fallback commission. However, that fallback commission was never paid because the vendor agreed in its listing agreement to pay a 6% commission. The vendor was the Kanata Muslim Association. Both Mr. Ismail and Mr. Adada were members of this association and, therefore, knew each other. With respect to the 2008 transaction it was not disclosed to the vendor that 1633799 had signed a BRA with the plaintiff nor was it disclosed what was the commission percentage agreed to therein.

[16] Mr. Adada funded the majority of the million dollar purchase price in the 2005 purchase and, thus, became the majority shareholder of Kanata. The 2005 transaction was mortgage free.

[17] Mr. Ismail, as did many other members of the association, made a contribution towards the purchase price. However, it appears that there was some sort of mix up in the issuance of shares in Kanata to him in consequence of his investment. Indeed, he did not become a registered shareholder in Kanata until November, 2008. It is acknowledged, however, that he had an equitable or indirect interest in Kanata, the corporation, at the time of the subject transactions. I find that Mr. Adada, at all relevant times in 2008, was aware of Mr. Ismail’s interest in Kanata. His interest in Kanata amounted to less than 2%. Mr. Adada testified that, at all relevant times, he dealt with Ms. Ismail as if he, Mr. Ismail, was a shareholder of Kanata.

[18] There was much dissent among the shareholders of Kanata in 2007 and 2008 which resulted in a number of shareholders requesting that the property be sold. Mr. Ismail, at that time, did not actively solicit a listing agreement from Kanata nor did he attempt to persuade Kanata or Mr. Adada to sign a listing agreement with the plaintiff. However, in early 2008, he, Mr. Ismail, was aware that another agent employed by Kanata, Dave D’Angelo, (counsel’s brother) was representing a buyer willing to pay $2,000,000 for the property – that is to say, twice the amount for which Kanata had purchased the property a couple of years earlier.

[19] The first time the prospective purchaser, Michel Tremblay, or 1633799, spoke to Mr. D’Angelo he told him that he lived in the area of the property and saw a for sale sign at one time and that he or his company was interested in purchasing it. Kanata made absolutely no improvements to the property during its period of ownership.

[20] Mr. Adada/Kanata was prepared to deal with Mr. Ismail and the plaintiff in a possible sale. As a result, Mr. Ismail provided Mr. Adada with a “Working with a Commercial Realtor Brochure” and, ultimately, a “Customer Service Agreement” for his signature. However, Mr. Adada decided to sign the aforesaid listing agreement on an exclusive basis in lieu of a customer service agreement. Had the customer service agreement been signed, Kanata would have been a “customer rather than a client” of the plaintiff. It was Mr. Adada who chose to cause Kanata to enter into an exclusive listing agreement as aforesaid and, thus, Kanata become a client of the brokerage.

[21] Mr. Ismail was aware at the time that Mr. Adada was an astute and experienced business man – and a man who was familiar with the real estate market and real estate transactions. Indeed, Mr. Adada prided himself on his business acumen. Mr. Adada instructed Mr. Ismail to report to him directly (i.e., to Mr. Adada) rather than to Kanata’s other shareholders concerning all potential sale negotiations. The amount of $3.8 million dollars set out in the listing agreement was inserted at the request of Mr. Adada even though that amount was almost four times what had been paid to purchase the property in 2005.

[22] Notwithstanding that Mr. Ismail considered asking for a commission rate of 8%, he suggested to Mr. Adada that the commission should be set at 6% which would be equal to the amount paid by the vendor when Kanata purchased the property in 2005. Mr. Adada advised Mr. Ismail that he, Adada, had “no problem” with the 6% figure. I find as a fact, that the 6% commission rate, given the nature of the subject property, was a reasonable rate.

[23] Initially, Mr. Ismail was unaware that Michel Tremblay and 1633799 had, on January 11, 2008, signed “Buyer Representation Agreements – Authority for Purchase or Lease” with the plaintiff through Dave D’Angelo, the other real estate salesperson involved in this matter. Dave D’Angelo was also an impressive and credible witness. He met Michel Tremblay for the first time at the plaintiff’s Kanata office on January 11, 2008, at which time they discussed the terms of a BRA concerning the March Road property. Mr. D’Angelo discovered that Mr. Ismail had acted for Kanata when it purchased the property in 2005. They had never personally met before this. The plaintiff brokerage is a very large one. They worked out of separate offices.

[24] During his explanation of the BRA Mr. D’Angelo pointed out to Mr. Tremblay that the words “as paid by seller” meant that he, Mr. Tremblay, would probably not be required to pay a commission because the practice in the trade for this type of property required the vendor to pay a commission of between 5 and 10 percent and that this commission would cover both the purchaser’s and seller’s agent. He testified that according to the practice in the industry, the existence of the BRA would not be disclosed to the prospective seller or his/her/its salesperson. He explained that the fallback commission of 2.5% was “personal information”.

[25] Paragraph 2 of the BRA is entitled “COMMISSION” and reads as follows:

2. COMMISSION: In consideration of the Brokerage undertaking to assist the Buyer, the Buyer agrees to pay commission to the Brokerage as follows:

If, during the currency of this Agreement, the Buyer enters into an agreement to purchase or lease a real property of the general description indicated above, the Buyer agrees the Brokerage is entitled to receive and retain any commission offered by a listing brokerage or by the seller. The Buyer understands that the amount of commission offered by a listing brokerage or by the seller may be greater or less than the commission stated below. The Buyer understands that the Brokerage will inform the Buyer of the amount of commission to be paid to the Brokerage by the listing brokerage or the seller at the earliest practical opportunity. The Buyer acknowledges that the payment of any commission by the listing brokerage or the seller will not make the Brokerage either the agent or sub-agent of the listing brokerage or the seller.

If, during the currency of this Agreement, the Buyer enters into an agreement to purchase or lease any property of the general description indicated above, the Buyer agrees that the Brokerage is entitled to be paid a commission of 2.5% of the sale price of the property or as paid by the seller (underlining mine) ………………………………….………………..................................................... The Buyer agrees to pay directly to the Brokerage any deficiency between this amount and the amount, if any, to be paid to the Brokerage by a listing brokerage or by the seller. The Buyer understands that if the Brokerage is not to be paid any commission by a listing brokerage or by the seller, the Buyer will pay the Brokerage the full amount of commission indicated above.

The Buyer agrees to pay the Brokerage such commission if the Buyer enters into an agreement within 90 days after the expiration of this Agreement (Holdover Period) to purchase or lease any real property shown or introduced to the Buyer from any source whatsoever during the term of this Agreement, provided, however, that if the Buyer enters into a new buyer representation agreement with another registered real estate brokerage after the expiration of this Agreement, the Buyer’s liability to pay commission to the Brokerage shall be reduced by the amount paid to the other brokerage under the new agreement.

The Buyer agrees to pay such commission as described above even if a transaction contemplated by an agreement to purchase or lease agreed to or accepted by the Buyer or anyone on the Buyer’s behalf is not completed, if such non-completion is owing or attributable to the Buyers default or neglect. Said commission, plus any applicable taxes, shall be payable on the date set for completion of the purchase of the property or, in the case of a lease or tenancy, the earlier of the date of occupancy by the tenant or the date set for commencement of the lease or tenancy. All amounts set out as commission are to be paid plus applicable federal Goods and Services Tax (GST) on such commission.

[26] The phrase “as paid by the seller” following the reference to the 2.5% commission was inserted by Mr. Ismail upon the advice of a senior employee of the plaintiff.

[27] Accordingly 1633799 agreed that the plaintiff brokerage was entitled to receive and retain any commission offered to it “by the seller,” the amount of which might be greater or less than the 2.5% commission set out in the BRA. The plaintiff was, however, required to inform 1633799 of the amount of commission to be paid to it, the brokerage, by the seller at the earliest practical opportunity. In this matter, the buyer was aware of the 6% commission during the exchange of offers to purchase and, certainly, by mid-March 2008 when the first APS was signed. In my opinion, in these circumstances, the “information” or notification was given “at the earliest practical opportunity.” The words “or as paid by the seller” added to the standard BRA form are significant in this case because of the position being taken by Kanata and Mr. Adada.

[28] The BRA, as well, makes it clear that if the brokerage “is not to be paid any commission” by the seller, the buyer 1633799 will pay the full 2.5% commission.

[29] On January 17, 2008, Mr. Adada forwarded an e-mail to Mr. Ismail in which he said:

Further to your e-mail and the two phone calls we had, I have not heard or received anything formal for your side as we spoke. It has been over a week now and last we spoke you mentioned that the interested buyer was ready to put an offer. Therefore, not to mention that the company was not considering the sale of the land, I will have to assume that the approach of your client is not serious and for whatever purpose or reason he/she may have in their mind.

Nevertheless, as stated previously, any approach or discussion of that nature must be done formally and according to the procedures discussed. Any discussions outside the board and not addressed exclusively to the director of the company are not appreciated nor welcomed. [The reference to the director is to Mr. Adada]

Lastly, no offer will be discussed if not accompanied with a security deposit check in trust and a 90 days delay to obtain shareholders final approval according to our corporate bi-law [sic, by-law].

[30] Mr. Ismail replied by e-mail a few hours later stating as follows:

I have been speaking with the agent (also at Royal Lepage Team) who represents the buyer. I do not know the buyer or how serious he is. He is not my client. His agent prepared an offer last week, which the buyer gave to his lawyer. The agent emailed me this morning that the buyer had to go to Florida on business. I will continue to follow up with the agent.

I understand your position clearly. If and when the buyer’s agent brings an offer, I will contact you and only you. I will not discuss the offer with anyone except the buyer’s agent or his lawyer. I will forward the 90 days condition for shareholder approval to the buyer’s agent. All our offers call for a deposit in trust on acceptance.

I observe here that, if Mr. Adada, prior to this time, did not know that another salesperson employed by the plaintiff brokerage was representing the buyer, he knew it when he received this e-mail.

[31] At 2:23 p.m. on February 12, 2008, Mr. Ismail forwarded an e-mail message to Mr. Adada in which he said:

The buyer’s agent has the signed offer and a deposit cheque from the buyer. I can forward the offer to you as soon as you sign and send the attached Seller Customer Service Agreement back to me. Please email or fax it to me at 613 825 8762.

You can call my toll-free number 1 888 780 7747 this afternoon.

[32] This e-mail message was followed by another e-mail from Mr. Ismail to Mr. Adada at 2:32 p.m. on February 12, 2008, in which he, Mr. Ismail, enclosed a brochure from the Ontario Real Estate Association that explains what an agency is. There was, of course, no signed listing agreement between the plaintiff and Kanata at that time. Mr. Leamen, counsel for Mr. Adada and Kanata relies heavily on the contents of this brochure as does the plaintiff. Accordingly, I quote extensively from the brochure as follows:

Commercial REALTORS are governed by the legal concept of “agency.” An agent is legally obligated to look after the best interests of the person he or she represents. The agent must be loyal to that person.

A real estate brokerage may be your agent – if you have clearly established an agency relationship with that Commercial REALTOR with a representation agreement. But often, you may assume such an obligation exists when it does not.

Commercial REALTORS believe it is important that the people they work with understand when an agency relationship exists and when it does not – and understand what it means.

When working with a Commercial REALTOR it is important to understand who the Commercial REALTOR works for. To whom is the Commercial REALTOR legally obligated?

Honesty and Integrity

Most real estate professionals in our province are members of the Ontario Real Estate Association (OREA) and only members of OREA can call themselves Commercial REALTORS.

When you work with a Commercial REALTOR, you can expect not only strict adherence to provincial laws, but also adherence to a Code of Ethics. That code assures you will receive the highest level of service, honesty and integrity.

Highest Professional Standards

Before receiving a real estate registration, candidates must successfully complete an extensive course of study developed by OREA on behalf of the Real Estate Council of Ontario. That is only the beginning: in the first two years of practice, registrants are required to successfully complete three additional courses as part of their articling with an experienced broker. In addition, all registrants must continue to attend courses throughout their careers in order to maintain their registration.

Want More Information?

• Visit www.orea.com

• Check out Commercial properties for sale on the Internet at www.2ontario.com/orea

In real estate, there are different possible forms of agency relationship:

1. Seller/Landlord representation

When a real estate brokerage represents a seller, it must do what is best for the seller of a property.

A written contract, called a listing agreement, creates an agency relationship between the seller and the brokerage and establishes seller representation. It also explains services the brokerage will provide, establishes a fee arrangement for the Commercial REALTORS services and specifies what obligations a seller may have.

A seller’s agent must tell the seller anything known about a buyer. For instance, if a seller’s agent knows a buyer is willing to offer more for a property, that information must be shared with the seller.

Confidences a seller shares with a seller’s agent must be kept confidential from potential buyers and others.

Although confidential information about the seller cannot be disclosed, a buyer working with a seller’s agent can expect fair and honest service from the seller’s agent and disclosure of pertinent information about the property.

2. Buyer/Tenant representation

A real estate brokerage representing a buyer must do what is best for the buyer.

A written contract, called a buyer representation agreement or mandate, creates an agency relationship between the buyer and the brokerage, and establishes buyer representation. It also explains services the brokerage will provide, establishes a fee arrangement for the Commercial REALTOR’s services and specifies what obligations a buyer may have.

Typically, buyers will be obliged to work exclusively with that brokerage for a period of time.

Confidences a buyer shares with the buyer’s agent must be kept confidential.

Although confidential information about the buyer cannot be disclosed, a seller working with a buyer’s agent can expect to be treated fairly and honestly.

3. Multiple representation

Occasionally a real estate brokerage will represent both the buyer and the seller. The buyer and seller must consent to this arrangement in writing. Under this multiple representation arrangement, the brokerage must do what is best for both the buyer and the seller.

Since the brokerage’s loyalty is divided between the buyer and the seller who have conflicting interests, it is absolutely essential that a multiple representation relationship be properly documented. Representation agreements specifically describe the rights and duties of everyone involved and any limitations to those rights and duties.

4. Customer Service

A real estate brokerage may provide services to buyers and sellers without creating buyer or seller representation. This is called “customer service.”

Under this arrangement, the brokerage can provide many valuable services in a fair and honest manner. This relationship can be set out in a buyer or seller customer service agreement.

Real estate negotiations are often complex and a brokerage may be providing representation and/or customer service to more than one seller or buyer. The brokerage will disclose these relationships to each buyer and seller.

This brochure is for information only and is not a contract. For the purposes of this information, the term “seller” can be interpreted as “landlord” and “buyer” can mean “tenant.”

Who’s working for you?

It is important that you understand who the Commercial REALTOR is working for. For example, both the seller and the buyer may have their own agent which means they each have a Commercial REALTOR who is representing them.

Or, some buyers choose to contract the seller’s agent directly. Under this arrangement the Commercial REALTOR is representing the seller, and must do what is best for the seller, but may provide many valuable customer services to the buyer.

A Commercial REALTOR working with a buyer may even be a “sub-agent” of the seller. Under sub-agency, both the listing brokerage and the co-operating brokerage must do what is best for the seller even though the sub-agent may provide many valuable customer services to the buyer.

If the brokerage represents both the seller and the buyer, this is multiple representation.

Code of Ethics

Commercial REALTORS believe it is important that the people they work with understand their agency relationship. That’s why requirements and obligations for representation and customer service are included in the Code of Ethics which is administered by the Real Estate Council of Ontario.

The Code requires Commercial REALTORS to disclose in writing the nature of the services they are providing, and encourages Commercial REALTORS to submit written representation agreements for any sellers or buyers they are representing.

[33] At 6:18 p.m. that day, February 12^th, Mr. Adada sent the following e-mail to Mr. Ismail:

Kindly find attached the form in subject initialized and signed by me. My e-mail is to confirm my acceptance to have you represent us as a seller but I do need the full listing agreement with the commission in order to approve. This representation is to be terminated in case this buyer does not materialize as we are not listing the property yet.

[34] Mr. Ismail responded at 11:02 p.m. as follows:

I am enclosing the listing agreement. Please initial bottom of pages 1 and 2. Please date and sign page 3.

Please initial either circle at the top of page 1 -- your choice. If you want me to advertise the property on MLS, then initial the first circle (MLS.). If you don’t want me to advertise the property, then initial the second circle (Exclusive).

Also, please initial either circle over item 12 on page 3 whether or not you wish to allow other agents to contact you after this agreement expires. Your choice.

I put 6% as the commission to be split between the seller’s and buyer’s agents. The previous seller of the property also paid 6%. I am hoping that we can negotiate a price with the buyer that will net you at least $2 million after paying the commission. (Underlining added)

I can send you the offer as soon as I receive the signed listing agreement from you. Please scan/email or fax the signed listing agreement to 613 825 8762.

Finally, please note that another agent for Royal LePage Team Realty is representing the buyer. (Underlining added)

[35] At 11:23 p.m., Mr. Ismail forwarded another e-mail to Mr. Adada. It says:

For your information, this 31 acre lot that listed for 899k in July sold conditionally 2 weeks ago. The current owner bought it in Jan 2007 for 775k. We will find out next month (after buyer satisfied conditions), how much it sold for this time.

[36] On February 14, 2008, very early in the morning, Mr. Ismail sent an e-mail to Mr. Adada as follows:

I am waiting for you to send the signed listing agreement so that I can send you the offer. Please let me know when you will be able to send it.

[37] Mr. Adada responded at 5:54 a.m., as follows:

What I have sent you is the form filled, will do again. If that is not enough just bear with till I got to Jordan and will try to print and fax from there unless I got access tonight to the business center.

[38] Mr. Ismail responded at 4:13 p.m. as follows:

The form you sent was “Working with a Commercial Realtor -- The Agency Relationship” disclosure brochure. I need the listing agreement signed. I attached it to this email as well. Please see below for instructions on how to fill it. When will you reach Jordan?

[39] On February 15, 2008, Mr. Adada responded to Mr. Ismail as follows:

I tried calling you this morning as to discuss the agreement you have e-mailed. I have two issues with it; the first one is the period and the second is the offering price. If you want me to sign till August 2008 then the listing price should not be less than $3,800,000 otherwise the agreement will be on a case to case basis. Don’t forget that Ahmed Muneeruddin mentioned in his e-mail that someone offered him $3,000,000 and that was around November 2007 and if this could blow out of proportion in our faces. May job is to get the maximum to shareholders.

[40] This was followed by an e-mail from Mr. Ismail to Mr. Adada in which he said:

I attached a signed (by me) listing agreement as a .tif file.

Mr. Ismail explained in his testimony that because Mr. Adada was having trouble forwarding a signed agreement to him, he sent back a copy of the agreement in a different format.

[41] After receiving the above-mentioned e-mail from Mr. Adada, Mr. Ismail sent an e-mail to Mr. D’Angelo as follows:

Just spoke with seller. I just sent him a revised listing agreement with the list price that he wants (3.8M). He hopes to send it back by Sunday. He didn’t have a problem with the commission (6%). He also told me that he has agreed to the listing agreement and it is just a matter of logistics getting the signed agreement back and to send the offer in the meantime if you felt comfortable. Otherwise, he said that he is in no rush and we can send the offer when we get the signed listing agreement back.

[42] Mr. Ismail then sent a further e-mail to Mr. Adada as follows:

Still waiting for the listing agreement. When do you think you’ll be able to send it to me? Is there any response I can give the buyer through his agent regarding the price that he offered (1.9M + gst)? I told the buyer’s agent that the agreement would have to be conditional for 90 days for shareholders’ approval. The buyer has no conditions in his offer.

It is relevant to note that at this time the offer to purchase had still not been submitted to Mr. Adada by Mr. Ismail.

[43] Mr. D’Angelo met again with Mr. Tremblay on February 12, 2008, at which time he prepared an offer to purchase in the form of a standard form agreement of purchase and sale [APS]. This agreement called for a purchase price of 1.9 million dollars and a deposit of $2,000. The completion date was specified as May 21, 2008. Upon the instructions of Mr. Tremblay, Mr. D’Angelo, in Schedule A to the APS, included the following assignment provision:

The Buyer shall have the right at any time prior to the completion date, to assign the within Offer to any person, persons or corporation, either existing or to be incorporated, and upon delivery to the Seller of notice of such assignment, together with the assignee’s covenant in favour of the Seller to be bound hereby as Buyer, the Buyer hereinbefore named shall stand released from all further liability hereunder.

[44] In addition, the following paragraph appears in the APS above the line used for the purchaser’s signature:

SUCCESSORS AND ASSIGNS: The heirs, executors, administrators, successors and assigns of the undersigned are bound by the terms herein.

[45] These assignment provisions were contained in all of the draft agreements of purchase and sale that were subsequently prepared.

[46] At the same time he prepared a “Confirmation of Co-Operation and Representation” document which he signed on behalf of the plaintiff and Mr. Tremblay signed for 1633799. This is a standard form employed in the industry where both the buyer and a seller will be represented by his/her/its own real estate agent even in circumstances where both salespersons are employed by the same broker.

[47] Under the heading “Multiple Representation”, the following appears in this document:

The Listing Brokerage has entered into a Buyer Representation Agreement with the Buyer and represents the interests of the Seller and the Buyer, with their consent, for this transaction. The Listing Brokerage must be impartial and equally protect the interests of the Seller and the Buyer in this transaction. The Listing Broker has a duty of full disclosure to both the Seller and the Buyer, including a requirement to disclose all factual information about the property known to the Listing Brokerage.

However, the Listing Brokerage shall not disclose:

• That the Seller may or will accept less than the listed price, unless otherwise instructed in writing by the Seller;

• That the Buyer may or will pay more than the offered price, unless otherwise instructed in writing by the Buyer;

• The motivation of or personal information about the Seller or Buyer, unless otherwise instructed in writing by the party to which the information applies, or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;

• The price the Buyer should offer or the price the Seller should accept;

• And; the Listing Brokerage shall not disclose to the Buyer the terms of any other offer.

However, it is understood that factual market information about comparable properties and information known to the Listing Brokerage concerning potential uses for the property will be disclosed to both Seller and Buyer to assist them to come to their own conclusions.

[48] Mr. Tremblay signed the document under the following typed wording:

CONSENT FOR MUTIPLE REPRESENTATION (To be completed only if the Brokerage represents more than one client for the transaction.)

The Seller/Buyer consent with their initials to their Brokerage

Representing more than one client for this transaction

SELLER’SINITIAL BUYER’INITIALS

ACKNOWLEDGEMENT

I have received, read, and understand the above information.

Michel Tremblay, signed Date: Feb. 12/08

[49] I find that Kanata, through Mr. Adada, consented to the multiple representation arrangement.

[50] On February 18, 2008, Mr. D’Angelo sent an e-mail to Mr. Ismail at 8:58 p.m. concerning his first draft offer in the amount of 1.9 million dollars. He said:

This offer was rushed and there are a few errors.

1. The assignment clause cannot be agreed by the seller because it says before closing, not after.

2. The deposit is quite low because the buyer had a bad experience with a large deposit held in trust for a brokerage for a year. He is willing to put a further 48k after removal of seller’s conditions (90 days share holders approval).

3. The VTB payment can be changed so that the payments are made larger in the first few years, and accelerated.

The buyer would like to resolve this soon, and wants to know whether he and the seller can reach an agreement this week. An agreement on price, the other details can be ironed afterwards.

[51] By this time Dave D’Angelo had advised Mr. Tremblay that Mr. Adada [i.e., Kanata] had agreed to pay a 6% commission. When he forwarded the APS he also forwarded to Mr. Ismail the Confirmation of Co-operation and Representation document/agreement. He testified that it was his practice to always place the confirmation form on the top of an offer in order to signify to a vendor and his agent that he and his employer brokerage would be claiming their appropriate share of the commission being offered and that there would, therefore, be a multiple representation situation. He added that by attaching the consent document to the top of the APS the result was to ensure that the seller would see the confirmation form before he/it saw the first offer to purchase. He also explained that the practice in the industry is not to deliver the confirmation form to the vendor prior to sending an offer and that, in this case, the property had not yet been listed by the seller pursuant to a written listing agreement and that, technically, there was no vendor/agent relationship at that time. He was, of course, aware that the parties were being represented by the same brokerage and that Mr. Adada had confirmed and instructed Mr. Ismail to proceed. Mr. D’Angelo also confirmed in his testimony that each time a new offer was submitted to Mr. Adada the same confirmation form (i.e., the one dated February 12) was enclosed as a first page. As aforesaid, I find Mr. D’Angelo to have been a credible witness.

[52] Both Messrs Ismail and D’Angelo testified that the practice in the industry is not to present an offer to a vendor before the vendor executes a listing agreement. The fear, of course, is that the vendor, upon seeing the buyer’s name, might simply attempt to contact the buyer on his own and possibly seek to avoid the payment of a commission. The evidence in this case, and I heard extensive testimony, is that, indeed, this is the universal practice in the Province of Ontario.

[53] Mr. Ismail testified, and I accept his testimony as truthful, that when he discussed the listing agreement with Mr. Adada, he specifically brought to Mr. Adada’s attention the fact that a co-operating broker (the broker representing the buyer) would receive half of the 6% commission being offered. He testified that Mr. Adada was satisfied with that arrangement. This, of course, did not oblige him to pay anything beyond the agreed upon amount of 6%. As noted above Mr. Adada was already aware that there would be a shared commission.

[54] On February 19, 2008, Messrs Ismail, D’Angelo, Tremblay and Adada participated in a conference call. This was the first time that Messrs Tremblay and Adada had been introduced to each other.

[55] During this conference call Messrs Tremblay and Adada addressed each other on the issue of price and the terms of a vendor take back mortgage. Mr. Adada advised Mr. Tremblay that he would accept a 3 million dollar cash offer or 3.8 million if there was to be a vendor take back mortgage (VTB).

[56] As noted before, Mr. Adada was and is an experienced dealer in real estate and is familiar with practices within the real estate industry. He has never paid a commission in the role of buyer. He testified that he was not concerned with how agents split a commission if more than one agent is involved. He said “I don’t care how the brokerage pays the buyer’s agent – it’s not my business.”

[57] When asked in cross-examination if he could point to any evidence to substantiate his statement made on a number of occasions during the trial that “had I known that the buyer might pay a commission, I would have offered less,” he could not point to anything. He did not refer the court to any other transactions in which that issue had arisen. I find as a fact that this is an after-the-fact self-serving statement. I do not believe Mr. Adada’s statement.

[58] Mr. Adada agreed that he reviewed the aforesaid customer service agreement forwarded to him by Mr. Ismail on February 12, 2008, and that the brochure included a commission rate of 6%. He chose not to sign the customer service agreement because he decided to sign a listing agreement. He agreed that “Jawaid was asking all along for a listing agreement so that then an offer could be presented to me.” This is inconsistent with his later testimony that he did not know how the customer service agreement had become a listing agreement.

[59] Mr. Adada acknowledged that he read and reviewed the Working with a Commercial Realty brochure. He acknowledged initialling the bottom right hand corner of the document confirming that he wanted seller representation from Team Realty. On examination for discovery he acknowledged that he would have become a “customer” through a customer service agreement and a “client” through a listing agreement. He said: “trust me, I know what I can be.”

[60] Insofar as the listing agreement is concerned he acknowledged that the intent of the listing agreement was to deal exclusively with Michel Tremblay and his company and that he did not want Mr. Ismail to look for other buyers at that time. He acknowledged that by signing the listing agreement he was giving Mr. Ismail a specific mandate to negotiate a deal with Dave D’Angelo who he knew was the purchaser’s agent. He testified that when he signed the listing agreement he was aware that the prospective buyer Michel/1633799 was represented by Mr. D’Angelo – he did not object. He said: “it didn’t mean much to me because it wasn’t different from what I was accustomed to.” He admitted that he reviewed the listing agreement before signing it and recalled commenting on only two issues – that the listing price should be 3.8 million and that it expire on August 15, 2008. Again he said: “this was nothing different than I was accustomed to – there was nothing for me to question.” He said that he chose an exclusive listing agreement as opposed to an MLS agreement because he did not want a listing to be publically advertised at that time – he wanted to see if a deal could be worked out with Michel/1633799. He acknowledged that Mr. Ismail was seeking to have him sign an agreement obliging him to pay a commission and he admitted that he knew Mr. Ismail was asking him to sign the listing agreement so that he could present the first offer to purchase. He admitted that he was aware of his right to negotiate the amount of the commission in the listing agreement and that 6% was the standard rate for this type of transaction. He also admitted that the commission would be shared with any agent acting on behalf of the buyer and that as such he understood that under the terms of the listing agreement, one-half would be paid to the buyer’s agent. He acknowledged that he knew that 6% was paid in 2005 when Kanata purchased the property and he acknowledged that he knew that there was a BRA at that time that provided for a 2.5% fallback commission and that Team Realty had acted for both the vendor and the purchaser. He acknowledged that he did not attempt to negotiate a commission lower than 6%.

[61] He appreciated that there was nothing in the listing agreement requiring the brokerage or salesperson to advertise the property for sale or send out brochures with respect to the property. He also acknowledged that the provision in the listing agreement stating “from any source whatsoever” meant that it did not even have to be a Team agent that actually brought in the purchaser.

[62] Insofar as the holdover period is concerned he denies that he turned his mind to this. In fact, he said that he did not read that part of the agreement. However, he acknowledged that he was familiar with the concept of holdover periods. I find that, even if he did not notice the holdover provisions, Kanata is bound by them since they are part of a whole.

[63] Mr. Adada admitted that he had no evidence to dispute Mr. D’Angelo’s testimony that he, Mr. D’Angelo, did not actually show the property to Michel Tremblay until March 4, 2008 at the earliest.

[64] As these events were unfolding Mr. Adada was travelling abroad on business and was very busy with his business and personal affairs. While he did not explain the full details of his personal life, he testified that he was under considerable stress at this time. These factors contributed to some delay in the execution of the relevant documents. They do not, however, provide either he or Kanata with a defence. Mr. Ismail had forwarded to him information concerning comparable sales in the area of the March Road property and, as well, particulars of inquires he had made with knowledgeable real estate people. Mr. Ismail’s information was that there was no real purchaser interest in the property at that time because the property was not within the City of Ottawa boundaries and, that it therefore appeared that it would be some time before the property could be developed. He also pointed out to Mr. Adada that his information was that the listing amount of 3.8 million dollars was a significant over valuation. Mr. Ismail testified that, notwithstanding his advice, Mr. Adada said that he was aware of other interested parties. However, at no time did the court hear from Mr. Adada any specific details of such interest.

[65] The 1.9 million dollar offer, as aforesaid, was delivered to Mr. Adada on February 18, 2008, before Mr. Ismail had possession of a signed listing agreement. The offer was not acceptable to Mr. Adada. Mr. Adada acknowledged at trial that he did not send back a signed listing agreement during the evening of February 18, 2008, because he did not want to respond to the first offer to purchase because it was too low and was “not worth discussing.” Following a February 19, 2008 telephone conversation a second offer was made in the form of an agreement of purchase and sale prepared by Mr. D’Angelo in the amount of $2,250,000. He also acknowledged that during the February 19^th telephone call he was introduced to Mr. Tremblay for the first time, that he understood that Mr. Tremblay was the representative for 1633799, and that Messrs D’Angelo and Ismail, although employed by the same brokerage, worked in separate offices – Carling Avenue and Barhaven. This offer also proposed a closing on May 21, 2008. After receiving this offer Mr. Adada sent an e-mail to Mr. Ismail stating as follows:

I received the modified offer and I suggest we cancel the conference call scheduled for Thursday. I am not interested to look at it nor discuss it. You can call me yourself to discuss.

[66] A few hours later Mr. Ismail responded by e-mail as follows:

The buyer has agreed to change the deposit to $50,000 on acceptance.

There is a 43 acre lot on 1480 Second Line Rd (also fronts on March Road) on sale for 2.4 million. This lot is about 400m north on March Road. The current owners bought it in Jan 2007 for 910k and will consider selling it for 1.5 million. Would you consider selling 1075 March Road conditional on being able to buy the 43 acre lot at 1480 Second Line for 1.5 million?

[67] On February 21, 2008, Mr. Ismail sent an e-mail to Mr. Adada providing him with some further information regarding the value of the property and then said the following with respect to the listing agreement:

The buyer’s agent has an improved offer with a $50,000 deposit payable on removal of conditions. However, we need your signed listing agreement before we can forward the offer. The buyer’s agent agreed to forward the offers last time in good faith on my word that the listing agreement was on its way and you simply hadn’t had a chance to print it. It has now been six days since I sent you the revised listing agreement at 3.8 million (Feb 15). I respect the fact that you have other business and that you are travelling. I apologize for interrupting your business and letting the buyer communicate with you. It will not happen again.

When will you be able to sign and send the listing agreement?

[68] On February 22, 2008, Mr. Ismail confirmed to Mr. D’Angelo that, at that time, he had a copy of the signed listing agreement following which the offer for $2,250,000 was delivered. Mr. Adada forwarded an e-mail to Mr. D’Angelo on February 22^nd as follows:

Hi Jawaid/Dave,

Thank you for the attached offer which I refuse and will not counter for the time being. Kindly thank the buyer for his interest and hopefully we can do business in the future.

[69] Mr. Leamen, counsel for Kanata and Mr. Adada, argues that Mr. Ismail did not give Mr. Adada sufficient time to consider the terms of the listing agreement. This is, quite clearly, not supported by the evidence.

[70] Mr. Adada forwarded the following e-mail to the shareholders of Kanata on February 28, 2008:

Dear Brothers,

As things did not progress as we hoped with the approach we had from an agent and after discussions with both agents and the buyer, I assume the offer was not serious and will not be making any further consideration in the mean time unless things change. Therefore and as not to keep you on hold I am conveying this to you, the decision is yours at this stage to decide whether you want to cash out or remain.

If you decide to sell, let me know as I intend to make myself available in Ottawa for one day and try to close all who want to opt out. Will confirm on Sunday the plan and will only communicate with the ones who confirm their intention to sell.

[71] Mr. Adada responded to the 2.25 million dollar offer by, on February 27^th, sending an e-mail to Mr. Ismail that read as follows:

Did you read the offer carefully? Do you think I will accept the price offered with the payment terms offered? I am not here to finance him and if I sell to get paid in three years I will ask for the price of three years from now.

[72] Mr. Ismail replied to Mr. Adada on February 28, 2008, with some pertinent information respecting other relevant sales.

[73] At trial there was an issue concerning just when Mr. D’Angelo first met with Mr. Tremblay on site – at the 1075 March Road property. I find that they first met on site on either March 4^th or March 9^th, 2008, and that the purpose of such a meeting was to have Mr. Tremblay sign a third offer to purchase in the amount of 2.43 million dollars following Mr. Adada’s rejection of the offer in the amount of $2,250,000. I find that Mr. Tremblay/1633799 were “introduced to” the property within the listing period.

[74] On March 4, 2008, Mr. Tremblay’s offer of 2.43 million was declined by Mr. Adada. On March 6, 2008, Mr. D’Angelo spoke with Mr. Adada at which time he advised him that he was an agent with the plaintiff company and that this was a multiple representation situation. Mr. Adada told him that he understood that and that this was not a problem.

[75] On March 7, 2008, Mr. D’Angelo forwarded an e-mail to Mr. Ismail and Mr. Adada. In the e-mail, he said:

The buyer, Michel Tremblay, was given the news of our conversation last night. He wants to say that he has never met a more forceful seller. In all his years of buying land and developing he has never come across a seller who budged so little, even when offered a record price for land which is pure speculation. He has a grudging respect for you, although he would rather this land was owned by anyone else in the world!

He will meet your terms, under a few conditions. And I ask that you please give him “something” so that he does not lose face. Surely you can agree to a few of his points.

He is willing to meet your price and pay 3 million for 1075 March Rd. However he has 3 points he want you to meet him with.

He cannot pay 1 million by May 21^st of 2008. He can pay 600k on May 21^st, and another 400k within 6 months.

And.

He needs a 4 year vtb, not 3 years. He does not have the capacity to sell off his other assets that quickly.

And

He needs agreement on this by Monday morning.

If you can agree with these terms then I will be happy to get him to sign an offer and send it immediately.

To clarify.

Deposit herewith - $2,000

Deposit on March 25^th, 2008 - $48,000

Closing date May 21^st 2008 - $550,000.

November 21^st 2008 - $400,000

May 21^st 2009 - $500,000

May 21^st 2010 - $500,000

May 21^st 2011 - $500,000

May 21^st 2012 - $500,000

I was really pressed for time this morning/now afternoon, and the buyer requested I save some time by emailing you directly and cc’ing Jawaid. Please contact him directly and together we can prepare the offer.

Looking forward to hearing from you,

[76] As will be observed, Mr. Tremblay was prepared to offer 3 million dollars. Mr. Adada responded to this e-mail under cover of his e-mail of March 9, 2008 addressed to both Mr. D’Angelo and Mr. Ismail in which he said:

Sorry for not being able to reply earlier as I was so tied up this week after my return and the weekend as well. While I appreciate the discussion we had on Thursday evening, I would also request your understanding that it is not just about negotiation or being hard to budge, it is about pure coincidence.

On Friday I spoke at length with Jawaid and he was expecting me to get back to him by latest Monday but surprisingly, few minutes later I had another call from a development consultant working for someone. I did mention already that I have signed a listing mandate but he maybe calling Jawaid Monday. According to him his buyer is willing to pay higher than my listing price. I am simple [sic, simply] confused and it is why I am being very transparent with you both so you can comment.

Remembering that selling at a higher price is good for you as your commission is related to it.

[77] On March 9, 2008, an offer was prepared in the amount of 3 million dollars. This offer provided for a $2,000 deposit. Under the heading “Purchase Price” the offer reads as follows:

PURCHASE PRICE:

Three Million Dollars

DEPOSIT:

Buyer submits herewith Two Thousand Dollars (CDN$) 2,000.00 by negotiable cheque payable to Royal Lepage Team Realty “Deposit Holder” to be held in trust pending completion or other termination of this Agreement and to be credited toward the Purchase Price on completion. For the purposes of this Agreement, ‘Upon Acceptance’ shall mean that the Buyer is required to deliver the deposit to the Deposit Holder within 24 hours of the acceptance of this Agreement.

[78] This offer was also declined by Mr. Adada. Mr. Tremblay was quite upset with this development and indicated to Mr. D’Angelo that he, Mr. Tremblay, wanted to directly contact Kanata’s other shareholders. Mr. D’Angelo reported these developments to Mr. Ismail who, in turn, reported them to Mr. Adada who, in turn, became upset with Mr. Tremblay’s threat.

[79] During the second week of March, 2008, Mr. Adada called Mr. D’Angelo – this was the only time just the two of them spoke. Ms. Ismail had asked him to speak to Mr. Adada. Mr. Adada said “you have to go to Michel and you have to get him to pay the listing price.” Mr. D’Angelo said “Hold on I can’t force my client to pay more.” Mr. Adada then said “Dave you’ll make more money for yourself.” Mr. D’Angelo was somewhat taken aback by this comment. During this conversation Mr. Adada acknowledged that the plaintiff was the brokerage for each party.

[80] In any event, Mr. Ismail was able to convince Mr. Tremblay to increase the offer to 3.55 million dollars. Mr. Adada also declined this offer. However, shortly thereafter Mr. Adada instructed Mr. Ismail to prepare a counter offer in the amount of 3.755 million which Mr. Tremblay accepted. The amount of the deposit was increased from $2,000 to $50,000 “upon acceptance.” This agreement of purchase and sale is, as aforesaid, dated March 9, 2008 on the first page; however, it was signed, with changes, by Mr. Adada on March 25, 2008 and the changes were initialled by Mr. Tremblay on March 26, 2008. This agreement will hereinafter be referred to as the “first APS”.

[81] When Mr. Adada returned the executed agreement of purchase and sale to Mr. Ismail on March 25, 2008, he sent a fax cover sheet which, among other things, said:

COMMENTS: I need to confirm that commission is based on present value of the offer which we set at $2,750,000.00. Therefore an amended [sic, amendment] to the listing needs to be done to reflect that we are paying 6% commission on $2,750,000 only.

[82] In a subsequent e-mail that day from Mr. Adada to Mr. Ismail, Mr. Adada said:

Already faxed you all the pages and noted on your fax cover that the present value is $2,750,000 on which we will be paying the 6% commission. You may also tell the buyer that you lowered your commission for him to get the deal.

[83] The next morning Mr. Ismail forwarded an e-mail to Mr. Adada in which he said:

Here is the agreement signed by the buyer. I will let you know when he gives us the deposit cheque. He has 24 hours.

Who is your lawyer? Buyer’s lawyer is Harry Gregoropoulos at Radnoff Pearl 613 594 8844.

The present value is about 3.3 million at 8%. I’ll get you exact numbers later this week. I am sure we will be able to agree on a commission that we both consider fair. (Underlining added)

[84] Mr. Ismail did not agree to Mr. Adada’s unilateral attempt to reduce the commission. He disputed Mr. Adada’s calculations. I find that at no point in time did, Mr. Ismail or the plaintiff or Mr. D’Angelo, as a cooperating agent, agree to a reduction in the commission. I find that the authoritative written agreement regarding the amount of the commission is the listing agreement signed by Mr. Adada. I find that in the aforementioned fax cover sheet of March 25^th Mr. Adada did not make it a condition of his acceptance that the smaller commission be paid. Indeed, he admitted that at no time did Mr. Ismail agree verbally to a different commission arrangement. As we shall see, Mr. Adada was not deterred by his failed attempt to reduce the commission.

[85] When Mr. Tremblay attended on Mr. D’Angelo to sign the March 26^th agreement he did not provide the $50,000 deposit. Mr. D’Angelo reminded him that, pursuant to the APS, the deposit was required to be paid within 24 hours of acceptance. Mr. Tremblay advised Mr. D’Angelo that he would be running some errands and making arrangements with his lawyer and would be back. However, he did not return the next day. Mr. D’Angelo contacted him and was advised by Mr. Tremblay that there was an issue with the pending deposit and that his lawyer would be handling it. Upon being advised by Mr. Tremblay of the name of his lawyer, Harry Gregoropoulos, Mr. D’Angelo spoke with him, Mr. Gregoropoulos, and was advised simply that he would be speaking with Mr. Adada’s lawyer about changing a term of the agreement to ensure that he, Mr. Gregoropoulos, would hold the deposit rather than the broker pending shareholder ratification of the APS. Mr. Gregoropoulos advised Mr. D’Angelo to wait a few days and that “it would all go smoothly.”

[86] I find that, at that time, Mr. D’Angelo had no reason to be concerned about the credit worthiness of Mr. Tremblay or 1633799 or about his bona fide generally. It was Mr. D’Angelo’s conclusion that, although the deposit was not paid within 24 hours, this issue was being dealt with by the lawyers for the purchaser and vendor. At that time he did not think that the deal was “dead”.

[87] Upon Mr. Ismail learning that the deposit had not been paid he spoke to Mr. Adada and advised him to obtain legal advice. Mr. Adada did, indeed, seek legal advice.

[88] During the afternoon of March 28, 2008, Mr. Adada sent a brief e-mail to the shareholders of Kanata. He wrote as follows:

Dear Brothers,

Although everything was going well till this afternoon and I was coordinating with Br. Khaleel and Br. Osama to book the board room at the big Mosque for an urgent shareholders meeting to present the offer we had yesterday, the agent called to advise me that the buyer backed down due to some of the condition. The condition was a basic one in which we do not allow him to build, to sever or to even make changes to the zoning of the property till we receive our money in full. It is a condition I cannot waive as very simply the buyer make changes or bring a liability to the property and stop making payment and we end up having a problem need to deal with.

It is unfortunate but inshAllah it will be for the better. This is just to inform you and at the same time intend to keep this confidential to us only.

[89] This information was/is false. Neither agent called him to advise him of that. In Schedule B in the first APS the following terms appear:

If the Buyer builds, severs, applies for a zoning amendment, or places a mortgage on the property without the express consent of the Seller then, at the sole option of the Seller, all monies secured thereby shall become due and payable immediately.

The Seller agrees to allow the Buyer to drill test holes upon acceptance of this offer and after the Buyer has paid the deposit.

[90] At no relevant time did Mr. Ismail ever tell Mr. D’Angelo about the turmoil within Kanata.

[91] At that time Mr. Adada sought a legal opinion from Mr. Paul Webber, an Ottawa lawyer, concerning the validity of the first APS. On March 31, 2008, Mr. Webber provided a brief opinion by way of an e-mail communication in which he said:

The agreement looks, on its face, to be legitimate, but we have issues:

1. Income tax risks: no interest mortgage, is there a capital gain, or income allocation, or some other tax consequence?

2. GST. Agreement basically silent. Purchaser has to pay, but Vendor is obliged to collect.

3. Structure of the schedule. It is a cut and paste. Not absolutely certain what the terms of the mortgage payments might be.

4. The assignment clause makes no sense. It makes sense if we are talking about before closing, but not after. If its [sic, it’s] after closing, language is not correct.

[92] At trial, Mr. Adada admitted that, notwithstanding the opinion that the first APS was legitimate, he decided not to enforce it against Mr. Tremblay or 1633799.

[93] I heard no evidence during the trial concerning attempts by either party to the first APS to expressly terminate this agreement or to declare it unenforceable for any reason. However, neither party to the agreement, until the fall of 2008, took any steps to attempt to enforce its terms against the other.

[94] On March 31, 2008, Mr. Adada sent an e-mail to Mr. Ismail as follows:

The (meaning the listing agreement) will literally expire on the 2^nd of April. Once expired I need you to raise our listing price to $4,600,000. I mean that and kindly inform David [D’Angelo] from now as not to come back with a lower offer which he may feel surprised.

I do have good info that by year end this land might be within city limits, a re zoning meeting is scheduled in Q3 this year.

I do not understand where the reference to April 2^nd date comes from.

[95] Mr. Adada, in fact, had no “good information” about re-zoning.

[96] In April, amendments were made to the listing agreement. Initially, as aforesaid, the listing was an exclusive one. However, it was amended at that time to become a multiple listing agreement. As well, the listing price was changed from 3.8 million to 4.8 million. The commission, however, remained at 6% of the sale price. I find that, even if there had been an agreement to reduce the rate of commission, which there was not, it was rescinded by this fresh listing calling for a 6% commission. The term of the listing remained as it had earlier been set out – i.e., from February 16, 2008 to August 15, 2008. Mr. Adada did not try to negotiate or suggest a lower commission rate at this time. I agree with the conclusion drawn by David D’Angelo that this amendment was significant because Mr. Adada was confirming to all prospective purchasers and brokers that he was prepared to pay a 6% commission to the plaintiff which meant that any agent representing a prospective buyer would have a right to share in the commission.

[97] During the months of April, May and June, 2008, Mr. Ismail continued in his attempts to locate a potential buyer for the March Road property. On April 14, 2008, Mr. Adada sent an e-mail to Mr. Ismail which read as follows:

As the previous prospective buyer is gone, what is our plan with the listing? Are you having it on MLS? Are actively looking for a buyer? What are your expectations?

I am planning to schedule a general assembly and must update shareholders and take decisions if necessary.

[98] Mr. Ismail responded immediately as follows:

I need your written authorization to list it on MLS. Do you remember the two circles at the top of the listing agreement? I continue to look for buyers through my network. I approached Minto even at 85k/acre, but they were not interested.

It may be a good idea to get shareholder approval in advance for any future offers perhaps for a particular minimum price. And then you can still try to negotiate for a better price from any prospective buyers.

The previous buyer is still not completely gone. He just asked Dave to type up a clean offer with the same terms that he was going to bring to his lawyer. But at this point, I wouldn’t attach any credibility until his lawyer calls your lawyer. (Underlining added)

[99] The last paragraph of Mr. Ismail’s e-mail is, of course, important. It seems that there was still a possibility that something further would transpire with the first APS. Mr. Dwoskin, counsel for 1633799, referred Mr. Adada to Mr. Ismail’s statement that “the previous buyer is still not completely gone. Mr. Dwoskin suggested that therefore Michel Tremblay was still in the picture in April. Mr. Adada’s answer was that “no credibility can be attached to this so I assume he was gone.” He then went on to repeat his earlier answer that Mr. Gregoropoulos told him that the purchaser was someone other than Tremblay. Mr. Gregoropoulos denied this in his testimony. In my opinion, these are unbelievable statements.

[100] On June 12, 2008, Mr. Adada asked Mr. Ismail for an update on what was transpiring with respect to the listing. Mr. Ismail responded as follows:

Unfortunately I haven’t had any response to the listing. There is a relatively small set of agents that deal with this kind of property and I have contacted most of them. The feedback that I have from other agents is that we are currently listed at more than twice the market value for such land and we are unlikely to expect any interest at this price.

The other similar lot at 1480 Second Line that was listed at 2.4 million for a year did not get any offers either and they don’t have it on the market any more.

I will not be able to attend the meeting on June 22^nd because I will be out of town for a previous commitment.

Please let me know if there is anything I can do.

[101] A Kanata shareholders’ meeting was held in August, 2008. Its purpose was to determine what efforts would be made to continue to attempt to sell the property. At that meeting Mr. Ismail’s status with respect to ownership of some of the shares in the company was discussed. However, no final decision was made that he was entitled to shares in his name until November, 2008.

[102] On August 12, 2008, Mr. Ismail sent an e-mail to Mr. Adada advising him that the MLS listing “expires on Aug 15.” He enclosed an amendment to extend the listing for six months until February 25, 2009, and said: “If you would like to extend the listing, please sign and fax back to me at 613- 825 8762.”

[103] No response was received to this invitation.

[104] The next significant development in the chronology of events is set out in a September 9, 2008 couriered letter from Harry Gregoropoulos, the solicitor for Michel Tremblay and 1633799, to Mr. Webber, the solicitor for Mr. Adada and Kanata. According to Mr. Gregoropoulos, Michel Tremblay approached him in early September at which time he told him that the first APS had died due to some problems regarding shareholder ratification and payment of the deposit but that, nevertheless, he, Michel Tremblay, wished to revive the agreement. This is a very important letter. In order to understand the significance of these developments it is necessary for me to set out this letter in its full detail. The letter reads as follows:

Re: 1633799 Ontario Inc. p/f Kanata 1075 March Road Project Inc.

We act as solicitors for 1633799 Ontario Inc. and understand that you act for 1075 March Road Project Inc., the Seller of the lands in question pursuant to an agreement of purchase and sale executed by the parties back on March 9^th, 2008 (the “Purchase and Sale Agreement”)

We have now been funded by our client and are in a position to deliver our client’s deposit in the amount of $50,000.00 together with a non-refundable bonus of $10,000.00 (such bonus not forming part of the Purchase Price) to your firm in trust pending: (i) the return to our office of the duplicate copy of this letter attached herein duly acknowledged by the Seller confirming the Seller’s agreement to complete the transaction with our client in accordance with the terms and provisions outlined under the Purchase and Sale Agreement (a copy of which is attached herein for your ease of reference), subject to the amendments listed below and (ii) the Purchase and Sale Agreement becoming firm once the Seller has been successful in obtaining the ratification of the said agreement by its shareholders (in accordance with paragraph D, Schedule B of the Purchase and Sale Agreement, as amended herein).

Amendments to Purchase and Sale Agreement

1. The Completion Date to be amended to read: December 20^th, 2008 or such earlier date as may be agreed by the parties in writing;

2. The Deposit provision to be amended so as to be delivered to Bell Baker, in Trust the “Deposit Holder”

3. The Title Search Date to be amended to read: December 10^th, 2008;

4. Schedule “A” – VTB provision forming the 3^rd, 4^th and 6^th paragraphs of Schedule “A” to be amended to read as follows:

“The Seller agreed to take back, as security for the balance of the Purchase Price, as first mortgage for Three Million One Hundred and Fifty Five Thousand Dollars ($3,155,000.00) to the Buyer, interest free, to be repaid over four (4) years as follows:

(a) The Buyer agrees to pay a sum of Six Hundred Thousand Dollars ($600,000.00) to the Seller, by bank draft or certified cheque, before 5 p.m. on June 20^th, 2009;

(b) The balance totaling Two Million Five Hundred Fifty Five Thousand Dollars ($2,555,000.00) shall be paid by the Buyer to the Seller, by bank draft or certified cheque as follows:

(i) Three Hundred Sixty-Five Thousand Dollars ($365,000.00) before 5:00 p.m. on December 20^th, 2009;

(ii) Three Hundred Sixty-Five Thousand Dollars ($365,000.00) before 5:00 p.m. on June 20^th, 2010;

(iii) Three Hundred Sixty-Five Thousand Dollars ($365,000.00) before 5:00 p.m. on December 20^th, 2010;

(iv) Three Hundred Sixty-Five Thousand Dollars ($365,000.00) before 5:00 p.m. on June 20^th, 2011;

(v) Three Hundred Sixty-Five Thousand Dollars ($365,000.00) before 5:00 p.m. on December 20^th, 2011;

(vi) Three Hundred Sixty-Five Thousand Dollars ($365,000.00) before 5:00 p.m. on June 20^th, 2012;

(vii) Three Hundred Sixty-Five Thousand Dollars ($365,000.00) before 5:00 p.m. on December 20^th, 2012.

5. Schedule “A” – Assignment provision (5^th paragraph) to be amended to read as follows:

“The Buyer shall have the right at any time prior to the Completion Date, to assign the within purchase and sale agreement to any person, persons or corporation, either existing or to be incorporated, and upon delivery to the Seller of notice of such assignment, together with the assignee’s covenant in favour of the Seller to be bound hereby as Buyer, the Buyer hereinbefore named shall stand released from all further liability hereunder.”

6. Schedule “B”, Paragraph D to be amended to read as follows:

“This Offer is conditional until 6:00 p.m. on the 30^th day of September, 2008 upon the Seller’s shareholders ratifying this agreement of purchase and sale. If this condition is not fulfilled within the above time limit, this offer shall become null and void and the Buyer’s deposit and bonus, if applicable, shall be returned in full without interest or deduction, and neither the Agents, the Buyer or the Seller shall be liable for any damages whatsoever arising out of this agreement of purchase and sale. This condition is inserted for the benefit of the Seller and may be waived at the Seller’s option at any time during the above-noted time period.”

We look forward to hearing from you with respect to the foregoing and the acknowledgment of same by the Seller. Should you have any questions or wish to discuss this matter, please feel free to contact the undersigned directly.

Yours very truly,

Radnoff, Pearl LLP

Harry A. Gregoropoulos

Partner

/sw

Encls.

ACKNOWLEDGMENT

The Seller hereby agrees to complete the transaction contemplated by the Purchase and Sale Agreement dated March 9^th, 2008 in accordance with the terms and provisions therein, subject to the amendments contained in this letter.

Kanata 1075 March Road Project Inc.

Per: Rabih Adada, President

I have authority to bind the Corporation

[105] There can be no doubt whatsoever that Mr. Gregoropoulos was writing on behalf of 1633799 on instructions from Michel Tremblay, the person in control of that company. As well, there can be no doubt whatsoever that the agreement of purchase and sale referenced in the letter is the first APS – the agreement concluded in March, 2008 between 1633799 and Kanata. Indeed, the first APS was an attachment to the letter. Mr. Adada was very evasive in giving his testimony with respect to this letter. He testified that while attempts had been made to have the letter forwarded to him, it never reached him and that his discussions with Mr. Gregoropoulos at that time concerning the letter were undertaken without his, Mr. Adada, having a copy of the letter before him. I reject that testimony as untruthful. At trial he denied that he knew that the purchaser at this time was 1633799 and that, therefore, Mr. Tremblay was still involved. This testimony must seriously negatively impact on Mr. Adada’s overall credibility.

[106] In cross-examination Mr. Adada alleged that Mr. Gregoropoulos tried to trick him with this letter. He said “He told me it was a new buyer.” He also said that he did not care what was in Mr. Gregoropoulos’ letter because it was no longer relevant. His insistence on this allegation that Mr. Gregoropoulos was trying to trick him made, and makes, no sense whatsoever. When pressed by Mr. D’Angelo on this issue he attempted to defend himself by explaining that at that time he was undergoing family and professional distractions. This “excuse” was invoked by Mr. Adada on a number of occasions during the trial.

[107] Upon receiving this letter Mr. Webber immediately responded to Mr. Gregoropoulos by e-mail indicating that he had forwarded the letter to Mr. Adada and that Mr. Gregoropoulos should expect a call directly from him. Indeed, Mr. Webber sent two e-mails to Mr. Adada.

[108] Later, on September 9, 2008, Mr. Adada sent an e-mail to the shareholders of Kanata in which he said the following:

First I would like to take the opportunity to wish you all Ramadan Mubarak yet it is bit late and may Allah SWT accept your prayers and fasting in this holly month and reward you for your deeds. I would like to share with you the possibility of receiving an interesting offer to sell the land we have on 1075 March road and would like to note your approval before I proceed further. This was a decision taken during our last general assembly and the offer is in line with what we have mentioned to you during the meeting.

This approval is not a final approval, it is just a preliminary one for me to get a consensus of who support the idea and move forward. Once I have over 67% approval will go the second step and once I have a formal offer I will submit to you for final approval.

Counting on your full cooperation in this matter as it is in the interest of all.

[109] I find it impossible to believe that Mr. Adada would have sent out this notice without having had and read a copy of the September 9^th letter.

[110] Mr. Ismail received a copy of this notice even though he was not yet formally registered as a Kanata shareholder. This was his first indication of these developments. Mr. Ismail asked Mr. Adada for the identity of the buyer. He received no response from Mr. Adada. Indeed, Mr. Ismail posed this question in an e-mail to Mr. Adada dated September 9, 2008. He was advised by Mr. Adada in a subsequent telephone conversation that these matters had come about as a result of contact between lawyers. He again asked for the identity of the buyer and was simply given a name – “Lafreniere.” I find that Mr. Adada was deliberately trying to keep Mr. Ismail in the dark.

[111] Mr. Dave D’Angelo was, at that time, unaware of these developments – that is, Mr. Tremblay’s efforts to revive the first APS.

[112] In cross-examination Mr. Adada acknowledged that the letter from Mr. Gregoropoulos, with the benefit of hindsight, is a written statement from him confirming that his client, 1633799, wanted to revive the first APS and is confirmation that he was in funds to pay the deposit and, indeed, a $10,000 bonus. He admitted that he was quite excited with these developments because he had not received any offers or serious interest in the property since late March when Michel Tremblay was in the picture. Mr. Adada admitted in testimony that during a September 9^th telephone conversation with Mr. Gregoropoulos they definitely discussed the first APS. Notwithstanding this, Mr. Adada testified that his understanding was that the deal would be revived but through a different purchaser.

[113] In the evening of September 9, 2008, Mr. Adada forwarded the following e-mail to Mr. Gregoropoulos:

It was nice talking to you this afternoon and here are a few points I need you to discuss with your client before I proceed and inform my shareholders so to ensure the offer is what we had accepted before and it is serious as well. (Underlining added)

• The balance of sale was to be completely paid out by May 2012 and not December 2012

• Our first payment was to be received on the 21^st day of May 2008 and the second one was the 21^st of November 2008 both totalling $1,200,000

• I am prepared to still accept the offer if the amount of $1,200,000 is received on the closing date and in this revised offer is to read the 20^th of December 2008

• Should your client not being ready to comply with this I need to review our selling price to $4,000,000 and re work the payments according to his schedule on the condition that the full balance of sale to be paid out on or before the 20^th of December 2012

• As for the assignment provision I will leave it to later stage where Paul would comment on it

• As for the shareholders approval, I need at least 45 days in order to get the signatures as per our by-laws. Should I manage to get it before I will waive this condition which is purely for the interest of the seller

• Another condition was discussed with your client and accepted was to confirm that no severance or work to be done on the property before paying off completely the balance of sale and this include no dumping, no rental and no liabilities whatsoever

Let me if your client is okay with the above as to proceed. Once I have your okay we can proceed in drafting a clean offer which will be negotiated with the involvement of Paul Webber provided he receives at least the $10,000. The remaining $50,000 will be advanced on the acceptance of the offer.

[114] I find that this e-mail is convincing proof of Mr. Adada’s willingness to revive the first APS subject to some minor changes and, as aforesaid, I find that Mr. Adada was aware that Mr. Gregoropoulos’ client was Michel Tremblay/1633799. Indeed, in a September 27, 2008 e-mail from Mr. Adada to Mr. Gregoropoulos he said:

I thought your client had made his mind already. Do I assume your client still not decided? I am not ready to go through the process if your client is going to do the same as he did in February.

[115] Mr. Gregoropoulos, in his testimony, was adamant that in his conversations with Mr. Adada the discussions focused on the first APS and that, in fact, no other offer could possibly have been discussed between them.

[116] Mr. Adada testified that he did not tell Mr. Ismail who the new buyer was until sometime in October, 2008, at which time he advised him that it was a “Frederick Lafreniere.”

[117] Mr. Gregoropoulos testified that when he wrote to Mr. Webber on September 9, 2008, it was with the clear purpose of reviving the first APS – Michel Tremblay was ready to close the transaction. He testified that the focus was on resurrection. He was adamant, in giving his testimony, that during his first conversation with Mr. Adada on September 9, 2008, he advised him that he was acting as counsel for both Michel Tremblay and 1633799. He testified that Mr. Adada commented at that time that he already knew that Mr. Gregoropoulos had acted for Michel Tremblay before. He added that he had been placed in funds, $60,000, by Mr. Tremblay with instructions to close the first APS. He also testified that he was absolutely certain that when he discussed the September 9, 2008 letter with Mr. Adada that he, Mr. Adada, must have had a copy of the letter before him. He testified that, in fact, Mr. Adada told him that he had his, Mr. Gregoropoulos’ letter. He testified that at no time during their conversations did Mr. Adada say that he would not deal with Michel Tremblay or his company. According to Mr. Gregoropoulos, it was “crystal clear” that Mr. Adada knew that he was dealing with the same purchaser and that the intent was to revive the first deal.

[118] Mr. Gregoropoulos testified further that about the third week in September, 2008, Mr. Adada called him at his office and advised him that the identity of the purchaser had to be changed. He went on to say that Mr. Adada added that he, Mr. Adada, felt that Royal Lepage (i.e., Royal Lepage Team Realty, Brokerage) was not assisting him with this and that he would feel more comfortable if it was a different company as the purchaser. Mr. Gregoropoulos was adamant in his testimony that it was Mr. Adada who suggested that the name of the purchaser be changed. I find that Mr. Gregoropoulos’ testimony is credible. He testified that Mr. Adada said that, otherwise, he would not conclude the transaction. Mr. Gregoropoulos said that he later discussed this demand with Mr. Tremblay and that Mr. Tremblay agreed to go along with the demand. Mr. Gregoropoulos was not aware of the particulars regarding the commission agreements and simply believed that it was the vendor’s responsibility in any event to pay a commission. I find that Mr. Adada was aware of the holdover provisions and that is why he insisted on the change of name.

[119] At this point I return to the testimony of Michel Tremblay. His testimony was that in or about May or June, 2008, he was introduced to Charles Tremblay [no relation] by mutual friends, all of whom were involved in the building and/or realty development business. He said that they persuaded him to include them somehow or other in the dealings with respect to the March Road and other properties. Michel Tremblay agreed to do this. This resulted in a meeting in a restaurant between Charles and Michel and their lawyers, Mr. Gregoropoulos for Michel and Steven Polowin for Charles, at which time they worked out the terms of an assignment of Michel’s interest in the property to Charles. 1633799 entered into a written agreement prepared by Mr. Gregoropoulos with Charles Tremblay in trust on July 8, 2008. The agreement references three parcels of land all situated in the same general area. One involved the purchase by 1633799 from a Donald Quane, another involved the purchase by 1633799 from a Mr. Wong, and the third property was the subject property – 1075 March Road. In each case Charles Tremblay agreed to pay a considerable assignment fee to 1633799. A copy of the first APS was attached as a schedule to the agreement concerning 1075 March Road. The timing of the completion of the agreements with respect to these three properties was staged. The Quane transaction was the “first assignment.” The agreement provided that upon successful completion of the first assignment, 1633799 would then offer Charles Tremblay in trust an exclusive and irrevocable option to purchase the secondly described Wong lands – the second agreement. The assignment agreement went on to provide that upon successful completion of the second assignment or agreement “the Assignor [1633799] shall offer the Assignee [Charles Tremblay in trust] a sole, exclusive and irrevocable option to purchase” the subject lands which were described in the assignment agreement as “the lands more particularly described in the purchase and sale agreement dated March 9^th, 2008 and attached as Schedule “D”.” This, of course, refers to the first APS. The original assignment fee with respect to the 1075 March Road lands was agreed upon in the amount of $520,000.

[120] Mr. Dave D’Angelo was unaware of the existence of these assignments. He learned about them only after the commencement of this action. Similarly, Dave D’Angelo was not aware until well after the fact that it was Michel’s intention to flip the property or that he was purchasing other neighbourhood lands. He was, of course, aware of the possibility of assignment since Michel insisted that the agreement with Kanata include an assignment clause. Mr. Ismail, as well, was unaware of these developments.

[121] Charles Tremblay testified. He confirmed that these assignment transactions were arms length transactions. He did not attend on the subject property until after his first meeting with Michel Tremblay in May or June of 2008. Charles Tremblay was a credible witness. While Mr. Adada was giving his testimony he indicated that he would honour his obligation to pay a commission if someone could satisfy him that Charles Tremblay was introduced to the property within the relevant period. When confronted with Charles Tremblay’s evidence he said “I can’t comment on what he said – I need proof.” He then went on to say that he had no evidence to contradict Charles Tremblay’s evidence.

[122] Mr. Steven Polowin was retained to act on behalf of Charles Tremblay in June of 2008 with respect to the proposed assignments.

[123] Mr. Adada was not aware of the developments with respect to these assignments until following the September 9, 2008 letter from Mr. Gregoropoulos to Mr. Webber.

[124] On September 30, 2008, Mr. Gregoropoulos wrote to Mr. Adada. The Re: line in this letter reads “4479181 Canada Inc. p/f Kanata 1075 March Road Project Inc.” The reference to 4479181 Canada Inc. is to the company that replaced 1633799 as purchaser of the subject lands. With this letter Mr. Gregoropoulos enclosed a copy of a new agreement of purchase and sale between 4479181 Canada Inc. and Kanata. This will hereinafter be referred to as the second APS. It was signed by Frederick Lafreniere, President of 4479181, as purchaser and Mr. Adada on October 3, 2008, on behalf of Kanata. A week earlier, Michel Tremblay was meeting with Mr. Gregoropoulos in his office on another matter when Mr. Adada called Mr. Gregoropoulos. Mr. Gregoropoulos put Mr. Adada on the speaker phone. Mr. Tremblay testified that Mr. Adada, clearly, said to Mr. Gregoropoulos “in order to get this deal to go, I need the corporation changed to anything other than 1633799.” He testified that Mr. Adada said that he did not want to pay a real estate commission. According to Mr. Michel Tremblay’s testimony, Mr. Adada basically said “if we can’t do that, we won’t have a deal.” He testified that since he had already by that time made a deal with Charles Tremblay and that, pursuant to that agreement, Charles Tremblay was waiting to buy the property that he, Michel and 1633799, were not going to be paying a commission in any event and, he testified, he agreed to make the change. I will have more to say about this later in these Reasons.

[125] Mr. Lafreniere is Michel Tremblay’s cousin. At no time did Mr. Lafreniere have any personal financial interest in these matters. However, Michel Tremblay approached Mr. Lafreniere the day after the telephone conversation and obtained Mr. Lafreniere’s consent to use a shelf company owned by Mr. Lafreniere – 4479181 Canada Inc. By “shelf” I mean that the company was inactive and without assets. Michel Tremblay arranged with Mr. Lafreniere to obtain signing authority for 4479181 Canada Inc. He testified that he was the “alter ego” or the person behind 4479181 Canada Inc. in the second APS. Mr. Lafreniere’s only other involvement in this matter was to, as requested, sign the second APS. At no time did Mr. Adada make any inquiries of Mr. Gregoropoulos or Michel Tremblay as to just who Mr. Lafreniere was, whether he or 4479181 were legitimate, or whether he/it could afford to buy the lands.

[126] An examination of the contents of the first and second APSs’ demonstrates that they are very similar and that the changes from the first to the second APS are relatively minor. The differences deal with such things as the setting of dates, who is to hold the deposits, and minor changes with respect to the vendor take back mortgages.

[127] As aforesaid, Harry Gregoropoulos prepared the agreement. At the top of page 1 in the blank space left for description of the agent, the following appears: “NO REPRESENTATION.” The purchase price is $3,755,000. The deposit amount is $50,000 “payable to the Vendor’s Solicitor, “In Trust”. The payment due on closing of the transaction is $550,000 and the take back mortgage is $3,155,000. The vendor take back was said to be due and payable on December 20, 2011.

[128] Mr. Gregoropoulos’ testimony concerning the demand by Mr. Adada to change the name of the purchaser was consistent with the testimony of Michel Tremblay. Since this is a contentious issue in this trial it is necessary for me to quote his testimony in some detail. I ordered a transcript of his evidence and, therefore, the following references are to that transcript:

Evidence in Chief [Mr. Gregoropoulos is being questioned on a telephone conversation with Mr. Adada that took place sometime in September, 2008] See pp. 22, 23, 26, 27 of the transcript.

Q. And who called who?

A. I believe it was Mr. Adada that called my office, but I can’t be sure of that.

Q. And the purpose of the call?

A. Was to finalise, I think, some of the last issues, and there was some discussion in terms – I think there were a number of things that were discussed, including the vendor take-back and the payment that was going to be provided on closing. There was – you know, we discussed the issue of the deposit. I wanted to make it clear to him that the deposit would not be released until shareholder ratification; that I would provide his lawyer with an undertaking to produce the deposit, the funds, once I have received confirmation of that shareholder ratification, and the last matter that was discussed was the issue of switching the companies, and have someone else act as the purchaser for the corporation.

Q. Why was that? Why would he ask you that?

A. He felt that – that – that – you know, he may – he felt that Royal LePage was not assisting him with the transaction, and he felt more comfortable to have another company, so that he wouldn’t have to pay any commission.

Q. Did that make any difference to you or Michel Tremblay?

A. It didn’t make any difference to Michel Tremblay, because I – he wanted to close this transaction. It didn’t make any difference to me. I didn’t know that there was any issues where Michel Tremblay would be held liable for the commission.

Q. Because you hadn’t seen a B.R.A., a Buyer’s Rep Agreement?

A. I hadn’t seen that Buyer’s Representation Agreement. Michel Tremblay did not disclose to me that he had signed any of this, that he would be liable for any of this. I assumed the vendor would be the one paying the commission.

Q. Alright; and then was there an agreement then as to who the new entity would be for purchaser?

A. Michel Tremblay proposed his cousin, Mr. Lafreniere (ph), I believe, and I spoke with Mr. Lafreniere, and I met with him, in fact, and Michel Tremblay, and he agreed to act as the purchaser.

Q. And in his own or through a numbered company?

A. Through his company.

Q. Who asked you to use somebody else as purchaser, not 163?

A. Mr. Adada.

Q. You’re absolutely clear on that?

A. Absolutely.

Q. Okay. You get an email on September 30. Would you look at tab 49, please? This is an email from Adada to you, dated September 30 at 3:03 p.m. It says, “Harry, I appreciate your efforts. Will look forward to your courier, but as mentioned …” – by the way, the courier, what was going to be in that courier?

A. The Agreement of Purchase and Sale.

Q. The new one?

A. That’s correct.

Q. The 447 one?

A. It would be signed by – it was signed by Michel Tremblay – ah, Mr. Lafreniere, and sent over to Mr. Adada for execution by the company.

Q. Alright. It says, “Harry, I appreciate your efforts, and will look forward to your courier, but as mentioned over the phone, and it’s better to inform your client in advance, that we will not be going ahead with the offer nor approach the General Assembly, unless as directors feel comfortable with the offer first, not to mention that I hold 52 per cent of the outstanding shares. For a deal to go ahead, I need to feel comfortable with the buyer, and from past experience I am not at this stage.” What past experience? Had he had some experience with Lafreniere?

A. No. He was referring to his experience with Michel Tremblay.

Q. How do you know?

A. Well, there was no – there was never any – there was never any contact with – between Lafreniere and Mr. Adada. There was never any connection with this company.

Q. Thank you. So the deal, the new agreement, is at tab 11 of Exhibit 1. This is – sorry – this is the one you drafted?

A. That’s correct.

[129] At p. 49 of the transcript of Mr. Gregoropoulos’ cross-examination, he was asked about the conversation between he and Mr. Adada on September 9^th. His evidence was as follows:

Cross-Examination by Mr. D’Angelo (p. 49 of the transcript)

Q. Mr. Gregoropoulos, it was Mr. Adada’s testimony, he said he told you specifically on the phone call, “I’m not going to deal with you if Michel Tremblay’s buying.” Did he say anything of the sort to you?

A. None of that. He never said that on any – in any of our telephone conversations. Let me be clear here. On September the 9^th, when I spoke to Mr. Adada, it was obvious we were discussing 163 Michel Tremblay. He had told me how he felt uncomfortable, given what had transpired in the past, and I – my role was to indicate to him that this was – my client was serious, and we wanted to make this work, and that’s what happened on September the 9^th.

[130] Commencing at p. 51 Mr. D’Angelo questioned Mr. Gregoropoulos on what had transpired later in September as follows:

Q. You testified, Mr. Gregoropoulos, that a little later in September you receive a call from Mr. Adada in which he asks to change the identity of the purchaser?

A. Yes, that’s correct.

Q. And I’m going to suggest to you it happened either on Monday, September 15^th, or Thursday, September 18^th, and I’ll show you why. Your letter to Mr. Adada was September 9^th, which was a Tuesday, and then you write to Mr. Adada on September 10^th. At tab 40 you say that your client is out of town for a few days. Do you see that?

A. Yeah.

Q. And as I understood your testimony in examination in-Chief, you said when Mr. Adada asked you to change the name of the purchaser, that was part of a call where he also – he also spoke about financial matters and deposits and V.T.B. structure; correct?

A. But that wasn’t that call.

Q. It wasn’t that call? Okay.

A. No, it was the call that took place after, I believe, the call we had with Dr. Gardie, or something along that line, so that’s how I – it was one of the last calls.

Q. Okay, so then either the week of the 15^th of September or the week of the 22^nd, which was then a Monday, Mr. Adada called you to discuss changing the name of the purchaser?

A. Yeah, that was one of the elements, yeah.

Cross-examination by Mr. Leamen [starting p. 78 of transcript]

Q. Okay, so you then set about trying to resurrect it; right?

A. That’s correct.

Q. And what you do is you prepare, you say at the request of Mr. Adada, the Agreement of Purchase and Sale, number two, which is in Exhibit 1, tab 11?

A. Yeah, that was subsequently, yeah.

Q. Okay; and you prepared this document; right?

A. That’s correct.

Q. So you prepared the document in the name of a different purchaser, to accommodate, you say, Mr. Adada?

A. That’s correct.

Q. And you’ve put through – the agent, you said there was no representation on the agreement you prepared?

A. That’s correct.

Q. Now, Mr. Adada didn’t ask you to do that, did he?

A. No.

Q. So if you thought that the purpose of this whole transaction was to resurrect the first agreement, why would you put in no representation on the second agreement, unless it was your intention to mislead? What would be the reason you would do that?

A. Because Mr. Adada didn’t want to pay commission, so he didn’t want to do the deal with 163. Therefore, there was no agent involved in this – in this deal here. There was no agent. I wasn’t dealing with any agent. Four-four-seven was a company that we used to replace 163.

Q. Well, Mr. Adada, you say, told you he didn’t want to pay commission, so to accommodate him you put in the agreement that you prepared that there was no representation when you knew that there was; isn’t that fair?

A. No, it’s not fair. Mr. Adada was clear in that he wanted to get – to have another company purchase this property so he doesn’t have to pay commission to Royal Lepage. I obtained instructions from my client. He agreed. We then put 447 in there as the purchaser. I didn’t try to – to assist Mr. Adada. I was instructed from my client. He agreed to do this, and that’s what I did.

Q. Would you agree, Mr. Gregoropoulos, that it would be wrong to prepare an agreement to avoid a commission that was legally owing to an agent?

A. Yes, but what I’m trying to tell you is that my client had no obligation to Royal LePage, and I didn’t know of any obligation from my client vis-à-vis Royal LePage. I wasn’t aware of the Buyer Representation Agreement, and I was not aware of – of anything that would tie him to Royal LePage or expose him to Royal LePage.

[131] In his testimony, Mr. Adada did not deny that he made it clear that he did not want to enter into an agreement of purchase and sale with Michel Tremblay or 1633799 at that time. He also conceded that he understood that the first APS and the second APS could be assigned to anyone and he was prepared to consent to that in advance. In other words, he did not care who would be shown as purchaser as long as it was not Michel Tremblay or 1633799. However, he denied stating during the aforementioned telephone conference with Mr. Gregoropoulos and Michel Tremblay that he did not want to pay a commission to the plaintiff. I reject this testimony as being untruthful. Mr. Adada admitted at trial that he was not told that the buyer was Lafreniere/4479181 until September 30, 2008, when Mr. Gregoropoulos provided the second APS to him for signature. He admitted that the first time he saw the names of Lafreniere and/or 4479181 was when he received the second APS on October 1, 2008. He admitted that he made no inquiries into just who were Lafreniere or 4479181 nor did he inquire into their credit worthiness. He admitted that, in fact, he had no information on Lafreniere at all. I do not accept his above denial as credible.

[132] On September 30, 2008, Mr. Adada sent an e-mail to Mr. Gregoropoulos in which he said:

I appreciate your efforts and will look forward to your courier but as mentioned over the phone and it is better to inform your client in advance that we will not be going ahead with the offer nor approach the general assembly unless as directors feel comfortable with the offer first not to mention that I hold 52% of the outstanding shares. For a deal to go ahead I need to feel comfortable with the buyer and from past experience I am not at this stage.

Our corporate lawyer Mr. Hussein Hamdani and his colleague Karen Rivais will be the ones looking into this transaction once I give a go ahead as not to incur any expenses at this stage. For me to go ahead and feel comfortable, some conditions need to be met:

-Security deposit check needs to be with our lawyer in-trust and not the client lawyer yet I fully respect you, but that is how I have done deals in the past, always seller agent or seller notary or lawyer and not ready to change this habit at this state –No severance of the land before full payment is received –No drilling or test or trespassing over the property before the first payment –The deal is not and will not be subject to any tests. The security deposit including the additional $10,000 will be exclusively subject to shareholders approval and final acceptance of the offer by the seller not any other condition

If the above are satisfied I will put a message forward to shareholders.

[133] The above reference to the courier arose out of Mr. Gregoropoulos’ promise to Mr. Adada to forward the new draft agreement by courier.

[134] On October 2, 2008, Mr. Hussein Hamdani, a lawyer acting on behalf of Mr. Adada, sent him an e-mail indicating that he had reviewed the new agreement and that he found it acceptable. Twenty minutes later Mr. Hamdani forwarded another e-mail to Mr. Adada with some comments about obtaining a further opinion from Mr. Hamdani’s associate, Ms. Natalie Verney.

[135] Also, on October 2, 2008, Mr. Adada sent a long e-mail message to the shareholders of Kanata. In this e-mail he sought approval of the second APS. In the e-mail he observes that one of the “brothers”, a real estate agent, was consulted and agreed on the price. Although Mr. Ismail’s name was not included, this was a reference to him. The fact is that Mr. Ismail knew nothing about this offer until he received this e-mail. However, of course, the purchase price was the same as in the first APS. I pause to observe that the second APS was signed prior to the expiration of the holdover period in the listing agreement.

[136] On October 9, 2008, Mr. Gregoropoulos forwarded to Mr. Hamdani two duly executed copies of the APS with the intent that Mr. Adada would then obtain shareholder approval. In his letter he promised to provide his firm’s trust cheque in the amount of $60,000 upon receiving a certified copy of the appropriate corporate resolution. The shareholders’ meeting occurred on November 2, 2008 at which time the agreement was approved by more than two-thirds of the shareholders.

[137] In early November, 2008, Mr. Ismail advised Mr. D’Angelo that he had attended the shareholders meeting and saw the second APS for the first time. Mr. Ismail did not raise the commission issue at the November meeting because he took Mr. Adada at face value that the purchaser was not Michel Tremblay. He took him at his word that, quite simply, the lawyers had worked out this new agreement or 1633799. Mr. Adada, therefore, misled his own agent and shareholders. He advised Mr. D’Angelo of the name of the purchaser and the fact that the purchase price and many of the terms were identical to the first APS. Mr. D’Angelo conducted his own investigation and discovered that Mr. Lafreniere, the signing officer for 4479181, was a relative of Michel Tremblay’s wife. Team Realty then retained legal counsel.

[138] Following the execution of the second APS, Michel Tremblay and 1633799, Charles Tremblay In Trust, and 4479181 proceeded to assign the benefit of the agreement to Charles Tremblay In Trust. In addition, Kanata executed a “Consent to Assignment”. The first Assignment Agreement is dated November 6, 2008, and was drafted by Mr. Polowin, the solicitor for Charles Tremblay. The first “WHEREAS” provision is significant. It reads as follows:

WHEREAS by an Assignment of Agreement of Purchase and Sale dated July 8^th, 2008, the Assignor granted inter alia the Assignee [Charles Tremblay, in Trust] an irrevocable option to purchase certain lands described in an Agreement of Purchase and Sale dated March 9, 2008, a copy of which Assignment and Agreement of Purchase and Sale are both attached …

[139] The Agreement then went on to stipulate, among other things, the following:

2. The parties acknowledge that the Agreement dated March 9, 2008 was succeeded by an Agreement of Purchase and Sale dated October 3, 2008 (attached hereto as Schedule “B”) and was executed by Canada Inc. [i.e. 4479181] as Purchaser in the place instead of the Assignor.

[140] The assignment agreement between 4479181 and Charles Tremblay In Trust is dated November 19, 2008, but was not fully signed until sometime in December, 2008. This agreement was drafted by Mr. Gregoropoulos. The preamble to this agreement reads, in part, as follows:

WHEREAS by an agreement of purchase and sale dated October 3^rd, 2008 (the “Agreement”), a copy of which is attached hereto as Schedule “A”, made between the Assignor, as purchaser, and Kanata 1075 March Road Project Inc. (the “Vendor”), the Assignor agreed to purchase and the Vendor agreed to sell …

[141] The agreement then deals with the terms of the assignment including Charles Tremblay In Trust’s obligation to reimburse 4479181 for the $50,000 deposit and the obligation on Charles Tremblay In Trust, to pay 4479181 the sum of $445,000 as the assignment fee. In the earlier assignment agreements 1633799, Charles Tremblay In Trust, and 4479181 agreed to reduce the assignment fee from $520,000, as originally agreed, to $445,000. This assignment agreement was, of course, conditional upon obtaining Kanata’s consent to the assignment.

[142] Kanata executed the Consent to Assignment agreement on the same day, November 19, 2008. It is significant to observe that Michel Tremblay signed both the assignment agreement between 4479181 and Charles Tremblay In Trust, and the consent to assignment agreement on behalf of 4479181. Therefore, when Mr. Adada signed on behalf of Kanata, he was aware that Michel Tremblay was still involved in these matters. This would appear to be obvious. However, as will be seen, Mr. Adada takes on a different tact in December, 2008.

[143] Mr. Polowin testified that he included the reference to the March 9, 2008 agreement in his preamble because it was his clear understanding that the second APS was an extension or replacement of the first APS. He further testified that he was in touch by telephone and through correspondence with Mr. Adada in mid December. Mr. Polowin could not recall exactly what these contacts dealt with. However, when he was advised that Mr. Adada had also contacted Mr. Gregoropoulos and that Mr. Adada had requested amendments to the agreements after their execution, Mr. Polowin agreed that it was possible that Mr. Adada had called him, as well, with a request to change the wording of the consent to the assignment.

[144] During his testimony, Mr. Adada alleged that there was a conspiracy against him. He was asked in cross-examination for the names of the conspirators. He identified Mr. Muneuruddin, one of the shareholders of Kanata, Harry Gregoropoulos, Michel Tremblay, and Fred Lafreniere. Then he said he was not sure who else was part of this conspiracy. He said he was not sure whether Mr. Ismail was part of the conspiracy. He also said he did not know whether Dave D’Angelo was part of the conspiracy. He said Mr. Gregoropoulos was the lead conspirator – “the king.” When pressed for details about the alleged conspiracy he said that he had no evidence – “it’s just suspicion.” He agreed that he falsely told Mr. Ismail that he had another potential buyer at a higher price. Notwithstanding Mr. Adada’s allegation of an unlawful conspiracy I find that there were no improper attempts by Messrs Gregoropoulos, Polowin, Michel Tremblay or Charles Tremblay to hide the fact that the first APS had been revived by the second APS. Mr. Adada testified that the September 9^th letter was evidence of the conspiracy. I agree with the testimony of Mr. Gregoropoulos wherein he said that if there was a conspiracy to somehow trick Mr. Adada, there would certainly be no reason for all of these persons to put together and sign a document that evidences a plain intention to revive or replace the first APS with the second APS. I pause to observe that Mr. Adada’s testimony concerning this alleged conspiracy had a significant negative impact on my findings concerning Mr. Adada’s credibility. He made allegations of wrongdoing against several people without any evidentiary background. Again, I will have more to say about this later.

[145] On December 15, 2008 Mr. Paul D’Angelo of Borden Ladner Gervais (BLG) wrote to Kanata, Mr. Adada and Mr. Tremblay. This letter reads as follows:

We are the solicitors for Royal LePage Team Realty Brokerage (“Royal Lepage”) and its agent of record Mr. Kent Browne.

Kanata 1075 March Road Project Inc. is the vendor of the above-referenced Property. The vendor entered into a Listing Agreement with our clients dated February 18, 2008. This agreement provided for the payment of 6% commission on the sale of the Property, half of which is to be paid to a cooperating broker. The cooperating broker in this case is Mr. David D’Angelo at the same Royal LePage office as Mr. Browne.

The vendor, and purchaser 1633799 Ontario Inc., a company operated by Mr. Michel Tremblay, entered into an Agreement of Purchase and Sale for the sale of the Property dated March 9, 2008. The sale price was $3,755,000.00. This Agreement of Purchase and Sale never closed, however a full release was also never obtained or finalized between the parties, as such release would require the approval of the Royal LePage manager, Mr. Browne.

Further, we understand that the vendor subsequently entered into a second Agreement of Purchase and Sale to sell the Property, which sale is scheduled to close in the coming days. From information which our client has gathered to date, we understand that this new purchaser is in fact a company operated by or related to Mr. Tremblay. This agreement was also signed several weeks ago, directly as a result of the introduction by Royal LePage and/or negotiations that took place over the holdover period within the aforementioned Listing Agreement.

Under the circumstances, and in accordance with both the Listing Agreement signed between Royal LePage and the vendor, and in accordance with the Buyer Representation Agreement signed between Mr. Tremblay and Royal LePage, a commission of 6% of the selling price is due and owing to Royal LePage upon the upcoming closing. I have spoken with Mr. Harry Gregoropoulos, who I understand is acting in respect of the pending closing and/or represents Mr. Tremblay; and I have also left a message with Mr. Hussein Hamdani, who I understand may act as counsel for Mr. Adada. I am copying them with this letter, but in the event that they are not acting for either of you with respect to this transaction, please have your real estate counsel contact the undersigned as soon as possible.

If satisfactory arrangements cannot be made to ensure that Royal Lepage is paid its fair commission from the pending closing, please be advised that we will take all necessary steps to ensure that the commission is paid. This may include the registration of a Certificate of Pending Litigation and the commencement of an action before the Ontario Superior Court of Justice, against both the vendor and purchaser and its principals if necessary. Should cooperation not be provided, recovery of the legal costs, in addition to interest, will also be sought against the parties.

Please contact the undersigned at (613) 787-3730 as soon as possible so that we may discuss the foregoing, failing which the aforementioned steps will be taken without further notice.

[146] Mr. Gregoropoulos testified that he was called by Mr. Adada in mid December, 2008 following the BLG letter of December 15^th. Mr. Adada asked him to have the consent to assignment agreement re-done by removing Michel Tremblay’s name and signature and to replace it with Mr. Lafreniere’s name and signature. Mr. Gregoropoulos, of course, refused and pointed out to Mr. Adada that the suggestion was unethical.

[147] Because of the accusations that were being made, on March 23, 2010, Mr. Gregoropoulos dictated a memo to his file as follows:

I am making a note to file based on my recollection of the events that transpired and in particular, in relation to a call I received sometime between December 15^th, 2008 and early 2009 from Mr. Rabih Adada.

I recall Michel Tremblay providing me with a copy of a letter dated December 15^th, 2008 from Paul D’Angelo, of BLG in relation to commission owing to Royal Lepage Team Realty. Sometime after Mr. D’Angelo’s involvement and between December 15^th, 2008 and early 2009 I received a call from Mr. Adada wherein he was requesting that the consent to assignment document which was dated November 19^th, 2008 be re-signed by the parties so that Fred Lafreniere would sign on behalf of his company 4479181 Canada Inc. It appeared the Consent to Assignment document dated November 19^th, 2008 had been signed by Michel Tremblay with signing authority for 4479181 Canada Inc. provided to him from Fred Lafreniere. Mr. Adada wanted to ensure that Mr. Tremblay’s signature did not appear on any of the documents given the inquiries being made by Paul D’Angelo. My response to Mr. Adada was that this would not be possible. I could not alter any of the documents and what he was asking me to do was unethical. I asked him not to communicate with me directly given he had legal representation.

Mr. Gregoropoulos confirmed the veracity of this memo during his testimony.

[148] The following are further extracts from the transcript of Mr. Gregoropoulos’ testimony at trial:

Evidence in-chief [starting at p. 35-37 of the transcript]

Q. And do you hear from anybody after December the 1^st, ’08?

A. There might have been some email exchanges with Steve Polowin regarding surveyors, plan, and that kind of thing, and there was correspondence that I received from Mr. D’Angelo – Paul D’Angelo on, I believe, December the 15^th.

Q. Okay; and do you speak to – what about Mr. Adada? Do you get any contact with him?

A. There was no contact until sometime on December the 15^th or a day later, something along that day.

Q. You mean after the Paul D’Angelo letter?

A. That’s correct.

Q. What’s that contact about?

A. I believe he called me to – I believe he had received the letter from Mr. D’Angelo, and he called me to inform me that the consent document had Michel Tremblay’s signature. He wanted me to have that document changed.

Q. Why?

THE COURT: Just a second. Did he tell you why, but just a second.

Q. Did he tell you why?

A. He felt that – that he – obviously there was an issue with the commission and Royal LePage, and he felt that Mr. Lafreniere’s name should appear on the document, and I told him that I could not change any of the documents, and I asked him to communicate with his lawyer, and I believe that was the extent of our conversation.

Q. And that’s about December 15, ’08, did you say?

A. That’s correct.

Q. Do you hear from anyone after December 15^th, ’08?

A. I heard from Steve Polowin. He called me on the morning – the following morning, I believe.

Q. So maybe December 16 or around there?

A. Something like that.

Q. Why is he calling?

A. He called me and he let me know that he had received a call from Mr. Adada, asking for the document to be changed.

Q. Which document?

A. The consent document; the November 19^th document.

Q. And did Polowin change it?

A. No.

Cross-examination by Mr. D’Angelo [starting at p. 68 of the transcript]

Q. And he calls you, I think you testified, because he wanted Michel Tremblay’s name to now somehow be removed from the consent to assignment; correct?

A. Can you repeat the question?

Q. You understood the reason why he called was to now have Michel Tremblay’s name or signature removed from the consent to assignment that was just signed a few days earlier; right?

A. Yes, that’s correct.

Q. And as I understood your evidence, you had already received the letter from my office?

A. That is correct.

Q. So you already knew what was afoot; there was now a potential claim for commission?

A. That’s correct.

Cross-examination by Mr. Leamen [starting at p. 75 of the transcript]

Q. But it [the reference is to Mr. Gregoropoulos’ response to the BLG letter] wasn’t accurate, I’m going to suggest to you. You didn’t tell Mr. D’Angelo the truth, that Michel Tremblay was the original purchaser, and he was – he became the ultimate purchaser through an assignment to Charles Tremblay, but you didn’t – decided you wouldn’t do that, and my question to you is why didn’t you say to Paul D’Angelo in response, yes, you’re right, this is the same purchaser, and the commission should be paid to whomever owes it; something like that” Why didn’t you just ‘fess up, if I can put it that way?

A. Because I had an obligation to my client, and the transaction was closing a few days later, and I suspect my client did not want to have any issues, deal with any issues that would jeopardize the transaction.

Q. You did not want to expose either the purchaser or the vendor to the payment of a commission; is that not fair?

A. I did not want to expose the vendor or the purchaser? I didn’t know that the Buyer Representation Agreement had been signed by my client. There was no – there was no – in my view, there was no liability or exposure to my client, so from that perspective there was, you know, it wasn’t for my client’s – there was no issue that would impact my client.

Q. So you weren’t protecting your client, but why did you not want to tell Mr. Paul D’Angelo that the vendor might have to pay the commission, because this is the same deal? Why wouldn’t you want to tell him that?

A. Well, it – the – because I didn’t want – my client did not want to impact this transaction from closing, so I suspect I got instructions. My instructions were to send a letter to confirm that I was no longer involved. The fact of the matter was that at December 1^st I was not involved. Steve Polowin was involved. Yes, looking at this letter, it’s a very technical response.

Q. Misleading; would you agree it’s misleading?

A. It’s not misleading. I – I – what I’m doing is I’m representing my client, and I – I – I’m - I’m doing it to the best of my ability without crossing any lines here.

Q. You represented your client throughout this transaction, so what you did here, I submit to you, is no different from what you did throughout; is that fair?

A. No, it’s not fair.

Q. What’s not fair about it?

A. Well, what’s not fair about it is you’re taking this letter and you’re telling me now that I acted inappropriately, because you feel I’ve acted inappropriately with this letter, and that wasn’t accurate here, and you’re putting it – you’re spreading it across the whole transaction, which is not the case.

[149] Mr. Polowin testified that when he was called by Mr. Adada in December he assumed that the call had something to do with commissions. However, he told Mr. Adada that he should speak with his own lawyer and not him. Mr. Polowin’s recollection on these developments was foggy. He did recall, however, that Mr. Adada was alleging professional misconduct against Mr. Gregoropoulos; however Mr. Polowin was not aware of any semblance of professional misconduct.

[150] Mr. Gregoropoulos confirmed that the following information contained in Answers to Undertakings during the examination for discovery process were accurate:

(a) The purpose of Mr. Gregoropoulos’ letter to Mr. Webber of September 9, 2008, was to revive the previous deal; and

(b) The purpose of Mr. Adada’s call to Harry of September 9, 2008, was to revive the previous deal. Mr. Adada knew [and was told by Harry] that Harry still acted for 1633799/Tremblay, the purchaser in the revived deal.

[151] I pause again to highlight here the following facts:

(a) Neither Dave D’Angelo nor Jawaid Ismail were aware that Michel Tremblay was assembling various parcels of land including 1075 March Road;

(b) They were not aware that Michel Tremblay had tied up other parcels of land nearby;

(c) Neither knew that Michel Tremblay was “going to flip or assign” 1075 March Road; and

(d) Michel Tremblay asked Mr. Gregoropoulos to write to Mr. Webber in September, 2008 in order to revive the first APS.

[152] During his testimony Mr. Adada admitted that he signed the Consent to Assignment on December 12, 2008 in his Montreal office following which he sent it back to Mr. Gregoropoulos. He admitted that he had sufficient opportunity to review and read the consent over a two-day period and that he had asked both Mr. Gregoropoulos and Mr. Hamdani questions about it prior to signing the document.

[153] Messrs Adada and Ismail spoke on December 17, 2008. Following this conversation Mr. Adada sent the following e-mail to Mr. Ismail:

Just for the record, my lawyer was contacted by the buyer and we never had heard from this buyer before. Furthermore, the first thing I did, the same day I was approached, was calling you to verify if you still have contact with the previous buyer and/or is aware of anything from the side of your colleague who was part of the previous transaction that never materialized.

Furthermore, I did verify if the buyer is related to either the previous buyer or the school next door and it was confirmed to me that no relation whatsoever and the school has nothing to do with it.

You were part of our shareholders communication all along and you never indicated any problem in this regard nor even mentioned anything during the voting in our general assembly meeting.

[154] During his testimony, Mr. Ismail was adamant that this e-mail is inaccurate and misleading. In the first line of the first paragraph Mr. Adada said: “Just for the record, my lawyer was contacted by the buyer and we never had heard from this buyer before.” I accept as truthful Mr. Ismail’s testimony that what Mr. Adada told him was the other way around. In the second sentence Mr. Adada states: “Furthermore, the first thing I did, the same day I was approached, was calling you to verify if you still have contact with the previous buyer and/or is aware of anything from the side of your colleague who was part of the previous transaction that never materialized.” Once again, I accept as truthful Mr. Ismail’s testimony that this is an untrue statement – that Mr. Adada did not call him at that time. I also accept as truthful Mr. Ismail’s testimony that the second paragraph of the e-mail is not accurate – that Mr. Adada did not give Mr. Ismail any details. Mr. Adada approached Mr. Ismail to have the plaintiff back off in its claim. He was very upset. Mr. Ismail testified that Mr. Adada wanted him to stop any court action. Mr. Adada also told Mr. Ismail that there was no connection between the purchaser and Michel Tremblay.

[155] One of Mr. Adada’s complaints at trial was that Mr. Ismail and the plaintiff had concerns about Michel Tremblay but did not pass these on to him. The evidence does not support this allegation. Any concerns they had came after things went sour as a result of Mr. Adada’s conduct.

[156] The transaction of purchase and sale pursuant to the second APS, as amended, closed on December 20, 2008. I find that the selling price of $3,755,000 was well beyond the market value as a stand-alone property. Kanata was the beneficiary of Michel Tremblay’s efforts to assemble 1075 March Road with the surrounding lands. I also find that the plaintiff acted professionally in the purchase and sale of 1075 March Road and that they did so in compliance with the listing agreement.

[157] I do not accept as credible Mr. Adada’s testimony that he did not receive a copy of the BLG letter of December 15^th until after the transaction closed on December 20, 2008.

[158] During his testimony, Mr. Adada agreed that he made no objection to the multiple representation until this proceeding was commenced.

Real Estate Industry Practice, the Real Estate and Business Brokers Act, S.O. 2002, c. 30; Code of Ethics, and Industry Rules and Regulations

[159] At trial I permitted the plaintiff to call an expert on practice and standards within the real estate industry. The expert is Mr. Louis Radomsky, B.A., LL.B. Mr. Radomsky’s curriculum vitae is attached as Schedule “A” to these Reasons. In doing so I allowed him to testify concerning the various relevant forms employed within the industry and the applicable rules of conduct and ethics of real estate brokerages and salespersons. In my ruling I made it clear that it was my task, not Mr. Radomsky’s, to draw the necessary legal conclusions. In my opinion, Mr. Radomsky’s testimony was professional, fair, and helpful to the court on matters of practice within the industry. In my ruling I relied on Krawchuk v. Scherbak 2011 CarswellOnt 3015, [2011] ONCA 352. In that case a purchaser of a house sued, among others, a real estate agent for failure to verify information provided by the vendor concerning the property in question. One of the issues on appeal was the trial judge’s finding on the standard of care demanded of the real estate agent. The trial judge had refused to admit expert evidence on this issue. At para. 125 the court said:

… The translation of that standard into a particular set of obligations owed by a defendant in a given case, however, is a question of fact (Wong, at para. 23; Fellowes, at para. 11). External indicators of reasonable conduct, such as custom, industry practice and statutory or regulatory standards, may inform the standard. Where a debate arises as to how a reasonable agent would have conducted himself or herself, recourse should generally be made to expert evidence.

[160] The Court of Appeal went on in paras. 126-133 as follows:

[126] In Ontario, real estate brokers and salespersons are required to be registered under the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sch. C in order to trade in real estate as an agent or broker. At the time of the transaction at issue in this case, the conduct of real estate agents and brokers in Ontario was governed by the Real Estate Council of Ontario's Code of Ethics, 1998 (the "Code").

[127] Counsel for Ms. Krawchuk tendered the Code into evidence to assist the trial judge in determining the standard of care by which Ms. Weddell's conduct should be measured. While the trial judge accepted this evidence, he refused to admit the expert evidence that Ms. Krawchuk's counsel sought to introduce in order to explain the duties of a real estate broker when acting under a dual agency agreement and the requirements of various documents, including the Code. The main basis for the trial judge's refusal to admit the evidence was his view that he did not need the assistance of an expert to determine whether Ms. Weddell met the requisite standard of care: the Code was before him and he was competent to determine, on his own, whether Ms. Weddell had complied with a particular provision. [page627]

[128] Unfortunately, however, the trial judge did not refer to the Code in his reasons. In fact, he did not address the standard of care that applied to Ms. Weddell's representation of Ms. Krawchuk at all, save for the reference at para. 67 of his reasons where he said that "there was no obligation on Ms. Weddell to inquire further or independently of [the Scherbaks] to discern what if any other structural defects might exist".

[129] In my opinion, in the particular circumstances of this case, the trial judge erred in concluding that he could identify the applicable standard of care without the benefit of expert evidence. This error was compounded by his failure to identify the standard of care that he thought was applicable and by his failure to address the import of the Code in relation to the question of the governing standard of care.

[130] The jurisprudence indicates that, in general, it is inappropriate for a trial court to determine the standard of care in a professional negligence case in the absence of expert evidence. See Zink v. Adrian, 2005 BCCA 93, [2005] B.C.J. No. 295, 37 B.C.L.R. (4th) 389 (C.A.), at para. 43, Southin J.A., concurring; Gauvreau v. Paci, [1996] O.J. No. 2396 (C.A.), at para. 1; Precision Remodeling Ltd. v. Soskin, Soskin & Potasky LLP, [2008] O.J. No. 2560, 2008 CanLII 31411 (S.C.J.), at para. 57; Dinevski v. Snowdon, [2010] O.J. No. 2516, 2010 ONSC 2715, at paras. 68-69; Adeshina v. Litwiniuk & Co., 2010 ABQB 80, [2010] A.J. No. 125, 24 Alta. L.R. (5th) 67 (Q.B.), at paras. 160-75. [I pause to observe that I am aware that the action at bar is not a professional negligence case. However, these comments are, nevertheless, helpful].

[131] In Walls v. Ross, [2001] B.C.J. No. 1641, 2001 BCPC 187, at paras. 66-74, Stansfield A.C.J. offers a lengthy discussion of the circumstances in which expert evidence will be necessary to define the standard of care in the real estate professional context:

Counsel for the realtors in this case argued I could not find negligence in the absence of expert evidence as to the standard of care the law requires of realtors in circumstances such as those disclosed by the evidence in this case. The claimant did not call any such expert evidence.

In Roberge v. Huberman [(1999), 172 D.L.R. (4th)] it was argued that absent expert evidence there was "no evidence" upon which the court could determine the standard of care in a solicitor's negligence action. Esson J.A., said:

(at para. 54) the trial judge referred to no authority in support of the proposition that, without expert evidence as to the "appropriate documentation", there was no evidence of breach of the standard of care. In this court, the defendants made no effort to support that conclusion. In my respectable view, it cannot be supported.

(and at para. 58) . . . What the court was called upon to do . . . was to consider and assess, with the assistance of counsel's submissions, any evidence that was adduced by the plaintiff which was potentially [page628] relevant to the question whether there had been a breach of duty by the solicitor. That process involves the court applying its experience and knowledge in the way that judges and juries do every day, most often without expert evidence.

It is clear there can be cases in which expert evidence is not required to prove a realtor's failure to meet what the court will determine to be the standard of care expected of realtors in particular circumstances. An example is Brown v. Fritz, 1993 CanLII 1475 (BC SC), [1993] B.C.J. No. 2182 (B.C. S.C.), about which I will say more in due course.

It seems that whether expert evidence is or is not required is a question which falls to be determined on the facts (and most especially, one imagines, the egregiousness of the conduct or the very specialized or technical nature of the activity) in the particular case. So, for example, in Shaak v. McIntyre and others, 1991 CanLII 269 (BC SC), [1991] B.C.J. No. 2607, Sept. 6, 1991, Vancouver No. A852424 (B.C.S.C.) Madam Justice Ryan (then of the trial court) dealt with a case of alleged negligence by a solicitor for failing to advise a plaintiff to obtain a survey certificate where the plaintiff called no evidence of the standards of the profession in that regard. She observed that:

[T]here may be cases where the defendant has so clearly fallen below the standard required of him or her that expert evidence is not required

although she said on the facts before her that "this is not one of those cases".

In Haag v Marshall (1989), 1989 CanLII 236 (BC CA), 61 D.L.R. (4th) 371 (B.C.C.A.), Mr. Justice Locke, concurring with two others in the result in a case of alleged solicitor's negligence, said:

[t]he professional evidence led in this case was unsatisfactory . . . nowhere was it said that what was not done fell short of a professional standard of conduct. In cases of professional negligence above all, with the many difficult and varied situations met, if a plaintiff hopes to succeed on the grounds of lack of competency it must be fairly demonstrated that it has fallen below an established standard or practice in the profession.

To similar effect in Mileos v. Block Bros. Realty Ltd. and others, unreported, September 30, 1994, Vancouver No. C913338, Mr. Justice Thackray, in the context of alleged realtor's negligence, said (at page 8):

. . . I am of the opinion that the onus is on the plaintiff to show that there was a certain standard of care required by the real estate agent and the agency, that that standard was breached, and that the breach caused damages. No evidence was called to establish the standard.

In Shaak v. McIntyre (supra), Madam Justice Ryan said:

[t]he (selling) broker is under a duty to check information of which he or she is in doubt (or ought to have been in doubt) before passing it on to the purchaser . . . The selling agent must also check the completeness and accuracy of all information which it is usual or customary for brokers to verify. In the case at bar there is no evidence of the usual or customary information which selling agents check. I cannot find that (the selling agent) fell below that standard, whatever it may be. (emphasis added) [page629]

The same difficulty was identified by Mr. Justice Drost in Snijders v. Morgan, unreported, January 27, 1997, Nelson No. 4747 (B.C. S.C.) where he said:

it is alleged that (the selling realtors) were negligent in failing to properly investigate the nature, identity and extent of the property they advertised for sale. There is no evidence whatsoever of that being a duty or responsibility that the law or the custom or the nature of that business imposes upon persons in that type of business in this province.

Similarly, . . . the allegation that they were negligent in failing to advise the Plaintiffs that a plot plan or survey should be obtained at any time, and more particularly once they became aware that a misdescription of the property was involved, there is no evidence of a standard of care that would impose upon them a duty to so advise the Plaintiffs accordingly.

A review of the cases referred to in these reasons suggests that unless conduct is particularly egregious, the court likely requires expert evidence of the usual or customary standard in the real estate industry regarding:

a) the kind of information that must be checked or verified by realtors, where it has not been demonstrated that the realtor had cause to doubt the information;

b) a duty to take positive steps to confirm the nature, identity and extent of the property they advertise, including any duty to recommend a purchaser secure a plot plan or survey; and

c) a duty to recommend that the purchaser secure an inspection regarding the soundness of premises, including any structural defects.

[132] While the authorities discussed above indicate that, as a general rule, it will not be possible to determine professional negligence in a given situation without the benefit of expert evidence, they do indicate two exceptions to this general rule.

[133] The first exception applies to cases in which it is possible to reliably determine the standard of care without the assistance of expert evidence. As explained by Southin J.A., at para. 44 of Zink, this will be the case only where the court is faced with "non-technical matters or those of which an ordinary person may be expected to have knowledge".

[161] In addition to Mr. Radomsky, I also heard evidence from a number of witnesses involved in the industry although I did not qualify them as experts and did not permit them to give opinion evidence as such.

[162] The following are relevant extracts from the Real Estate and Business Brokers Act, 2002 (“REBBA”). The Act defines a “broker” as “means an individual who has the prescribed qualifications to be registered as a broker under this Act and who is employed by a brokerage to trade in real estate.” A “brokerage” is defined as “means a corporation, partnership, sole proprietor, association or other organization or entity that, on behalf of others and for compensation or reward or the expectation of such, trades in real estate or holds himself, herself or itself out as such.”

[163] A “salesperson” is defined as “means an individual who has the prescribed qualifications to be registered as a salesperson under this Act and who is employed by a brokerage to trade in real estate.”

[164] Therefore, in this case, the plaintiff was/is a brokerage and Messrs D’Angelo and Ismail were/are salespersons.

[165] The Act defines a “registrant” as “means a brokerage that is registered under this Act or a broker or salesperson who is registered under this Act.” The plaintiff and Messrs D’Angelo and Ismail were/are all registered under the Act.

[166] Part VI of the Act is entitled “CONDUCT AND OFFENCES.” A brokerage must ensure that every salesperson and broker that the brokerage employs is carrying out their duties in compliance with the Act and the regulations passed pursuant to the Act. I find that, in these circumstances, the plaintiff met its obligations.

[167] Part VIII of the Act is entitled “REGULATIONS.” Section 50 of the Act authorizes the Minister to make regulations “establishing a code of ethics for the purposes of subsection 21 (1).” Section 21 deals with discipline proceedings and authorizes the establishment of a discipline committee “to hear and determine … if a registrant has failed to comply with the code of ethics established by the Minister.” The “Minister” is the Minister of Consumer and Business Services or such other member of the Executive Council to whom administration for this Act is assigned.

[168] Section 51 of the Act authorizes the Lieutenant Governor in Council to make regulations affecting a wide variety of matters which I need not list in these Reasons.

[169] The General Regulation is number 567/05. I quote below the relevant sections. The following definitions are pertinent and applicable to the Act and the Regulations:

“client” means,

(a) with respect to a brokerage and a trade in real estate, a person who, in the trade, is represented under a representation agreement by the brokerage, and

(b) with respect to a broker or salesperson and a trade in real estate, a person who, in the trade, is represented under a representation agreement by the brokerage that employs the broker or salesperson, if the broker or salesperson represents the person pursuant to the agreement;

“customer” means,

(a) with respect to a brokerage and a trade in real estate, a person who, in the trade,

(i) has an agreement with the brokerage under which the brokerage provides services to the person, and

(ii) is not represented under a representation agreement by the brokerage or any other brokerage, and

(b) with respect to a broker or salesperson and a trade in real estate, a person who, in the trade, obtains services under an agreement, other than a representation agreement, from the brokerage that employs the broker or salesperson, if the broker or salesperson provides services to the person pursuant to the agreement;

“representation agreement” means a written, oral or implied agreement between a brokerage and a person under which the brokerage and the person agree that the brokerage will represent the person in respect of a trade in real estate;

[170] Subsection (2) sets out two definitions that apply to the General regulation. One of them is the definition of “buyer representation agreement” which reads as follows:

“buyer representation agreement” means a representation agreement between a brokerage and a buyer.

[171] Section 22 deals with the issue of “Multiple representation” and states as follows:

22. A registrant shall not represent more than one client in respect of the same trade in real estate unless all of the clients represented by the registrant in respect of that trade consent in writing. (Underlining added) [It is the plaintiff’s position that it complied with the provisions of s. 22. I agree]

[172] Section 23 deals with “Commissions.” It says:

23. (1) Subject to subsection 33 (3) of the Act and subsection (2), a registrant shall not charge or collect a commission or other remuneration in respect of a trade in real estate unless,

(a) the entitlement to the commission or other remuneration arises under a written agreement that is signed by or on behalf of the person who is required to pay the commission or other remuneration; or

(b) the entitlement to the commission or other remuneration arises under an agreement that is not referred to in clause (a) and,

i. the registrant has conveyed an offer in writing that is accepted, or

ii. the registrant,

(A) shows the property to the buyer, or

(B) introduces the buyer and the seller to one another for the purpose of discussing the proposed acquisition or disposition of an interest in real estate.

(2) Unless agreed to in writing by the buyer, a registrant shall not charge or collect a commission or other remuneration from a buyer in respect of a trade in real estate if the registrant knows that there is an unexpired buyer representation agreement between the buyer and another registrant.

[I find that no violations of this section have been made out].

[173] I make the following findings of fact with respect to relevant industry practice which I now set out below in no particular order of importance. With respect to multiple representation, I accept as credible and factual the following extract from Mr. Radomsky’s written opinion of February 23, 2011 which he confirmed during his testimony:

Historically, the concept of Multiple Representation first came to the fore in 1995 when the Canadian Real Estate Association amended one of the Articles in its Standards of Practice by requiring that realtors disclose the role and nature of service a realtor was providing to a buyer or seller. Prior to that virtually all transactions in Ontario were structured on the basis of sub-agency. In sub-agency the sales representative or broker working with a buyer proclaimed that their client was the Seller. Unfortunately, their conduct did not usually support this position. With the change to the Standards of Practice, buyers were now being formally represented. The ‘Working with a Realtor’ brochure was created. The Ontario Real Estate Association (OREA) created a ‘Buyer Agency’ form.

Dual representation was recognized and disclosed. (Underlining mine)

Effective January 1, 2000, the real estate profession became self-regulated under the auspices of the Real Estate Council of Ontario (RECO). With its inception came a Code of Ethics. In the first Code of Ethics representing more than one client was identified as ‘dual agency.’ It required that it be consenual [sic] dual agency meaning that both the Seller and the Buyer be aware of the relationship.

On March 31, 2006, the Real Estate and Business Brokers Act, 2002, S.O. 2002 was implemented with a number of regulations. There were two regulations that incorporated language regarding the new terminology ‘Multiple Representation.” One was the General Regulation and the other was the new Code of Ethics.

Both the Listing Agreement form and the Buyer Representation Agreement forms incorporate terms of limitation on the requirement for disclosure in Multiple Representation situations. These forms also disclose the potential for Multiple Representation. Further, the Confirmation of Cooperation and Representation form addresses the specifics when Multiple Representation actually occurs.

[174] In the traditional transaction of purchase and sale, the seller, almost always, agrees to and pays a percentage commission to the listing brokerage. The Code of Ethics requires that the listing agreement spell out the amount of commission to be paid to any agent who “cooperates.” Customarily, it is the seller who is responsible for compensating the buyer’s real estate representative.

[175] The evidence at trial clearly establishes that it is now not unusual for there to be situations where there is multiple representation of the parties and where, frequently, the multiple representation is by salespersons within the same brokerage. In other words, multiple representation situations are now not unique by any measure whatsoever.

[176] Buyer representation agreements (BRA’s) are common. There is close to a universal practice in the industry pursuant to which those agreements are treated as confidential between the salesperson and the buyer and, as a result, their contents are not divulged to the seller. Agents are taught to never disclose the content of BRA’s to the seller, except where the circumstances may be exceptional. This practice also involves situations where both salespersons are employed in the same brokerage. The practice, and the law, are different in situations involving multiple commissions. This case is not a multiple commission case as is argued by Mr. Leamen.

[177] It is also the practice for salespersons to not show an offer to purchase to a prospective vendor unless and until the vendor enters into some form of a representation agreement, usually a listing agreement. One of the principal reasons for this, of course, is that a prospective vendor might very well be tempted to take the offer and run with it himself/herself and, therefore, avoid having to pay a commission. In this case, as aforesaid, because of the difficulties that were encountered, Mr. Ismail departed from this practice. However, none of the defendants were harmed by his doing so.

[178] In this geographic area 6% is the most common commission paid by vendors 2.5% is normal for purchasers who have retained a salesperson or broker through a BRA. In situations involving vacant land, the seller’s commission can exceed 6%.

[179] It is also the practice for brokers to have the parties to a purchase and sale sign a Confirmation of Co-Operation and Representation agreement. It certainly was and is the plaintiff’s policy. The custom is to have these agreements signed when the offers of purchase and sale are presented.

[180] Buyers are routinely told by salespersons that it is usual for the vendor to pay a commission and that if the buyer has retained a salesperson, he/she will receive part of the commission.

[181] Ordinarily, the seller and the sales representative will discuss the compensation the seller is prepared to pay in the event the property is sold and ordinarily, but not always, the commission is paid to the listing brokerage. In addition, it is the seller who is ordinarily responsible for compensating the buyer’s real estate representative. I accept Mr. Radomsky’s evidence that “the decision that the Seller makes respecting commission will determine how much the Buyer is prepared to offer. If the Seller decides that the Buyer is [sic, to] pay their own commission then clearly, the Buyer will reduce the price to accommodate that choice.” He also testified that “a Seller’s statement that ‘had I known that the Buyer was going to pay 2.5% would have affected my decision on how much I was going to pay’ does not enter into the decision making process. This is contemplated by the wording in the Buyer Representation Agreement where it provides that “Buyer acknowledges that Buyer’s representative may give more or less than the amount set out.” This opinion intrudes on my jurisdiction and, therefore, while I have reached the same conclusion, I have arrived at my conclusion without regard to Mr. Radomsky’s opinion. In any event, as I have said elsewhere in these Reasons, I reject this statement of Mr. Adada’s as not credible.

[182] I do, however, accept the logic of the following opinion expressed by Mr. Radomsky:

The decisions respecting the commission that a Seller is prepared to pay and the commission that a Buyer is prepared to pay are essentially independent of one another. The only instance that the commission rate is disclosed is when the commission that the Seller has agreed to pay in their contract to the Buyer’s representative is less than the Buyer is prepared to pay to the Buyer’s representative.

[183] I also accept Mr. Radomsky’s statement that:

The form that accomplishes the written disclosure and consent requirements of the General Regulation and the Code of Ethics is the Confirmation of Cooperation and Representation.

[184] I turn now to the Code of Ethics which is Ontario Regulation 580/05. While most of the Code is pertinent, I reference below the principal sections relevant to this proceeding:

“buyer representation agreement” means a representation agreement between a brokerage and a buyer;

“material fact” means, with respect to the acquisition or disposition of an interest in real estate, a fact that would affect a reasonable person’s decision to acquire or dispose of the interest;

“seller representation agreement” means a representation agreement between a brokerage and a seller, and includes a listing agreement that is a representation agreement.

[185] The following sections appear under the heading “OBLIGATIONS OF REGISTRANTS”:

Brokers and salespersons

2. (1) A broker or salesperson shall not do or omit to do anything that causes the brokerage that employs the broker or salesperson to contravene this Regulation.

Fairness, honesty, etc.

3. A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity.

Best interests

4. A registrant shall promote and protect the best interest of the registrant’s clients.

[In my opinion, the evidence in this case warrants findings that the plaintiff and its salesmen treated the defendants fairly, honestly, and with integrity and, as well, promoted and protected their best interests].

Information before agreements

10. (1) Before entering into an agreement with a buyer or seller in respect of trading in real estate, a brokerage shall, at the earliest practicable opportunity, inform the buyer or seller of the following:

11. The types of service alternatives that are available in the circumstances, including a representation agreement or another type of agreement.

12. The fact that circumstances could arise in which the brokerage could represent more than one client in respect of the same trade in real estate, but that the brokerage could not do this unless all of the clients represented by the brokerage in respect of that trade consented in writing.

13. The nature of the services that the brokerage would provide to each client if the brokerage represents more than one client in respect of the same trade in real estate.

[Note the distinction between “customer” and “client”]

(2) The brokerage shall, at the earliest practicable opportunity and before an offer is made, use the brokerage’s best efforts to obtain from the buyer or seller a written acknowledgement that the buyer or seller received all the information referred to in subsection (1).

[The plaintiff, in my opinion, met its section 10 obligations]

Contents of written agreements

11. (1) A brokerage shall not enter into a written agreement with a buyer or seller for the purpose of trading in real estate unless the agreement clearly, comprehensibly and prominently,

(a) specifies the date on which the agreement takes effect and the date on which it expires;

(b) specifies or describes the method for determining,

(i) the amount of any commission or other remuneration payable to the brokerage, and

(ii) in the case of an agreement with a seller, the amount of any commission or other remuneration payable to any other brokerage;

(c) describes how any commission or other remuneration payable to the brokerage will be paid; and

(d) sets out the services that the brokerage will provide under the agreement.

(2) A brokerage shall not, for the purpose of trading in real estate, enter into a written agreement with a buyer or seller that provides that the date on which the agreement expires is more than six months after the date on which the agreement takes effect unless,

(a) the date on which the agreement expires is prominently displayed on the first page of the agreement; and

(b) the buyer or seller has initialled the agreement next to the date referred to in clause (a).

[The plaintiff complied with these obligations]

Seller representation agreements

13. If a brokerage enters into a seller representation agreement with a seller and the agreement is not in writing, the brokerage shall, at the earliest practicable opportunity and before any buyer makes an offer, reduce the agreement to writing, have it signed on behalf of the brokerage and submit it to the seller for signature.

[This was honoured]

Buyer representation agreements

14. If a brokerage enters into a buyer representation agreement with a buyer and the agreement is not in writing, the brokerage shall, before the buyer makes an offer, reduce the agreement to writing, have it signed on behalf of the brokerage and submit it to the buyer for signature.

[This was honoured]

[186] Section 16 is entitled “Disclosure before multiple representation” and reads as follows:

16. A brokerage shall not represent more than one client in respect of the same trade in real estate unless it has disclosed the following matters to the clients or prospective clients at the earliest practicable opportunity:

17. The fact that the brokerage proposes to represent more than one client in respect of the same trade.

18. The differences between the obligations the brokerage would have if it represented only one client in respect of the trade and the obligations the brokerage would have if it represented more than one client in respect of the trade, including any differences relating to the disclosure of information or the services that the brokerage would provide.

[Again, in my opinion, the plaintiff complied with these obligations]

[187] Section 18 under the heading “Disclosure of interest” reads as follows:

Disclosure of interest

18. (1) A registrant shall, at the earliest practicable opportunity and before any offer is made in respect of the acquisition or disposition of an interest in real estate, disclose in writing the following matters to every client represented by the registrant in respect of the acquisition or disposition:

19. Any property interest that the registrant has in the real estate.

20. Any property interest that a person related to the registrant has in the real estate, if the registrant knows or ought to know of the interest.

(2) A brokerage shall, at the earliest practicable opportunity and before any offer is made in respect of the acquisition or disposition of an interest in real estate, disclose in writing the matters referred to in paragraphs 1 and 2 of subsection (1) to every customer with whom the brokerage has entered into an agreement in respect of the acquisition or disposition.

(3) A broker or salesperson shall, at the earliest practicable opportunity and before any offer is made in respect of the acquisition or disposition of an interest in real estate, disclose in writing the matters referred to in paragraphs 1 and 2 of subsection (1) to every customer of the broker or salesperson with whom the brokerage that employs the broker or salesperson has entered into an agreement in respect of the acquisition or disposition.

(4) A registrant shall disclose in writing to a client, at the earliest practicable opportunity, any direct or indirect financial benefit that the registrant or a person related to the registrant may receive from another person in connection with services provided by the registrant to the client, including any commission or other remuneration that may be received from another person.

(5) A brokerage that has entered into an agreement with a buyer or seller that requires the buyer or seller to pay the brokerage a commission or other remuneration in respect of a trade in real estate shall not charge or collect any commission or other remuneration under another agreement entered into with another person in respect of the same trade unless,

(a) the brokerage discloses at the earliest practicable opportunity to the other person, in writing, the terms of the agreement with the buyer or seller that require the payment of a commission or other remuneration; and

(b) the brokerage discloses at the earliest practicable opportunity to the buyer or seller, in writing, the terms of the agreement with the other person that require the payment of a commission or other remuneration.

[188] Mr. Ismail and the plaintiff acknowledged at trial that he should have revealed his interest in the seller to both the seller and the buyer. However, the fact is that the seller did, indeed, know of Mr. Ismail’s interest in Kanata. Therefore, neither Kanata nor Mr. Adada were misled in any way by this non-compliance. The defendant 1633799 does not take any issue with Mr. Ismail’s silence of his interest. In any event, nothing in the evidence supports a conclusion that any of the defendants were disadvantaged in any manner whatsoever because of Mr. Ismail’s failure to disclose. His interest, to be exact, was in Kanata (the owner) rather than the land.

[189] I do not accept as correct the argument advanced by Mr. Leamen for Kanata and Mr. Adada that this failure to disclose leads to the inevitable conclusion that the plaintiff, therefore, becomes disentitled to payment of the 6% commission. He submits that the listing agreement is void ab initio. In addition, I find that there is no evidence upon which I can find a breach of fiduciary duty on the part of the plaintiff.

[190] Mr. Leamen relies heavily on s. 18(5) and, as well, on the terms of paragraph 3 of the listing agreement and the Confirmation of Cooperation and Representation document which I have quoted earlier in these Reasons.

[191] In my opinion, neither s. 18(4) nor s. 18(5) is applicable. Subsection (4) is concerned with finders’ fees. Subsection (5) applies where there are multiple commissions (i.e., where someone is paid twice from different sources) which, as aforesaid, is not here the case. This is not a double-dipping situation or a finders’ fee situation.

[192] Notwithstanding that Mr. Radomsky’s following opinion evidence involves a legal finding, I have reached the same conclusion. The second paragraph of his January 28, 2011 written opinion reads as follows:

Section 18(5), one of the issues upon which you wish me to comment, is meant to address circumstances where someone is being paid from twice from different sources. In those circumstances there would have to be written disclosure pursuant to the Code of Ethics. Those circumstances would arise where the Brokerage was representing both the Seller and Buyer and amount of the commission being paid under the Listing Agreement to the Cooperating Brokerage was not sufficient to pay the Buyer’s side as set out in the Buyer Representation Agreement. For example, if the Listing provided that the Cooperating Brokerage was to receive 1% under the Listing and the Buyer Representation Agreement obligated the Buyer to pay 2% then the Brokerage would receive 1% in addition to amount being paid by the Seller under the Listing Agreement. Under a strict reading of the section the Brokerage would have to disclose that in writing. However, where the commission paid to the cooperating brokerage under the Listing is equal to or greater than the amount paid by the Buyer under the Buyer Representation Agreement the Brokerage is not receiving payment from two sources.

[193] Mr. Radomsky elaborated further on this in his opinion letter dated February 23, 2011 as follows:

Compensation from a Secret or Alternative Source

I have commented on this issue in my earlier correspondence attached hereto as Schedule A. In addition I would offer the following. Given the configuration of a real estate transaction there is the possibility that the Brokerage will get paid from two sources. The vernacular would call this “double-dipping”. Historically, the concept of obtaining a “secret commission” was prohibited without proper disclosure. This was encapsulated in the Code of Ethics when it was proclaimed in 2006. In order to obtain a financial benefit from a source other than the Seller it is necessary to disclose this in writing to the Seller. The Code of Ethics prescribes in subsection 18(5) as follows:

(5) A brokerage that has entered into an agreement with a buyer or seller that requires the buyer or seller to pay the brokerage a commission or other remuneration in respect of a trade in real estate shall not charge or collect any commission or other remuneration under another agreement entered into with another person in respect of the same trade unless,

(a) the brokerage discloses at the earliest practicable opportunity to the other person, in writing, the terms of the agreement with the buyer or seller that require the payment of a commission or other remuneration; and

(b) the brokerage discloses at the earliest practicable opportunity to the buyer or seller, in writing, the terms of the agreement with the other person that require the payment of a commission or other remuneration.

The Buyer was not being charged any commission and hence there was no need for disclosure.

[194] It is common ground between the parties that a real estate brokerage acting in an agency capacity with a client is responsible for duties outlined in the respective representation agreements as well as common law agency principles and legislation – i.e., in REBBA, the General Regulation, and the Code of Ethics. In addition, a brokerage also owes some selected general obligations to the client such as exercising care, skill and ensuring honesty. As well, the general legal presumption exists that all real estate agency relationships with clients are fiduciary in nature. This presumption may, in a proper case, be rebutted.

[195] Section 18(5) is concerned with a situation where a brokerage is paid a commission from or by two or more sources. It does not relate to the facts of the case at bar because we are here concerned with the possibility of different sources of the payment of a commission – not multiple payors. The plaintiff had/has no contractual right in this matter to charge a commission to the buyer in circumstances where the vendor agreed to pay a 6% commission and did pay it or was directed by a court to pay it. In these circumstances there was no possibility that the brokerage would get paid from two sources because the buyer was not, in the circumstances, obliged to pay a commission nor did the plaintiff seek to have the buyer pay a commission in addition to the commission payable by the vendor. The 2.5% commission provided for in the BRA was payable only in the event that the seller did not compensate the brokerage for the entire amount of the buyer’s obligation under the BRA.

[196] It is the plaintiff’s position that no legal obligations were owed to Kanata and Mr. Adada in the absence of a signed listing agreement or a customer service agreement. This proposition, it seems to me, is simply too broad. Whether duties and obligations arise between the parties is a legal question the answer to which depends on a close examination of the entirety of the relationship between these parties. The answer depends on questions of fact and law. There is certainly no doubt but that the salesperson and brokerage owe duties and obligations to a seller pursuant to the terms of a listing agreement or a customer service agreement. However, this conclusion does not, in my opinion, necessarily exclude the possibility of duties and obligations arising prior to the execution of an agreement. In this case I have not been persuaded that, even if there were duties owed by the plaintiff to Kanata prior to the execution of the listing agreement, the evidence placed before the court establishes any breach of duty by the plaintiff or its salespersons. The defendants Kanata and Mr. Adada have not satisfied me that they have been prejudiced in any way by their attention not being drawn to the BRA. I have not been persuaded that the fact of the BRA was information that Kanata and Mr. Adada needed to know or, put another way, I find that the defendants Kanata and Mr. Adada were not prejudiced in any way as a result of their failure to know that there was a BRA. They have not satisfied me that they would have done something different had they known. They were made aware, on a timely basis, that they were involved in a multiple representation situation, a situation to which they consented.

[197] I acknowledge that the testimony at trial called on behalf of the plaintiff established that, within the industry, there is an impression or belief that a brokerage and/or salesperson has no legal responsibility to the seller until there is a signed written agreement between them. As aforesaid, it is my opinion that duties, including duties of disclosure, might possibly arise in favour of a seller. However, and again as aforesaid, in this case I have not been persuaded that there was a duty to advise Kanata and Mr. Adada of the existence of the BRA. Accordingly, I do not accept as compelling Kanata and Mr. Adada’s argument that the failure of the plaintiff to reveal the BRA renders the listing agreement null and void.

[198] Similarly, I find nothing wrongful with the plaintiff’s conduct in delaying the delivery of the first APS to Kanata and Mr. Adada until the signing of a listing agreement. In any event, the fact is that the first APS was delivered to Kanata and Mr. Adada prior to the execution by Kanata of the listing agreement. In my opinion, Kanata was not prejudiced by the plaintiff’s conduct.

[199] As aforesaid, the Code of Ethics includes provisions for the referral of complaints against registrants to a discipline committee. I can find nothing in the Code that expressly states that failure to comply with the Code directly bears on the validity of a buyer representation agreement, a seller representation agreement, or any other agreement. Indeed, I can find nothing in the Code that clearly delineates the jurisdiction or power of either a discipline committee or an appeal’s committee. However, s. 21 (1) of Code provides as follows:

Discipline proceedings

21. (1) A discipline committee shall be established to hear and determine, in accordance with the prescribed procedures, if a registrant has failed to comply with the code of ethics established by the Minister.

Result of a determination

(4) If the discipline committee makes a determination under subsection (1) that a registrant has failed to comply with the code of ethics, it may order any of the following as appropriate:

1. Require the broker or salesperson to take further educational courses.

2. In accordance with the terms that may be specified by the committee, require the brokerage to fund educational courses for brokers and salespersons employed by the brokerage or to arrange and fund such educational courses.

3. Despite subsection 12 (1) of the Safety and Consumer Statutes Administration Act, 1996, impose such fine as the committee considers appropriate, to a maximum of $25,000, or such lesser amount as may be prescribed, to be paid by the registrant to the administrative authority or to the Minister of Finance if there is no designated administrative authority.

4. Suspend or postpone the taking of further educational courses, the funding or the funding and arranging of educational courses or the imposition of the fine for such period and upon such terms as the committee designates.

5. Fix and impose costs to be paid by the registrant to the administrative authority or to the Minister of Finance if there is no designated administrative authority.

[200] Accordingly, I do not accept as correct Mr. Leamen’s argument that, because the plaintiff allegedly acted in breach of its fiduciary, statutory, regulatory or contractual duty, the Code dictates that the listing agreement is void ab initio “for non-disclosure of the existence in terms of the BRA.” He argues that even if his clients were in breach of the listing agreement, their breach is irrelevant because “the plaintiff is still disentitled to any commission.” I do not accept this proposition.

[201] As mentioned earlier, Mr. Leamen relies on Mr. Adada’s testimony “that if he knew the buyer had agreed to pay a commission, the vendor would not have agreed to sign a listing agreement.” He submits “if a vendor knows that his agent has accepted 2.5% from the purchaser, why would any vendor agree to pay anymore?” (Underlining mine). He submits that “the commission is central to this transaction, therefore any information related to it is relevant to the plaintiff and defendant vendor.” Mr. Leamen also argues that 1633799 was not a bona fide purchaser because it was a speculator without financial substance and he argues that the plaintiff “assisted” 1633799 to carry on its charade of appearing to be a bona fide purchaser. He submits that 1633799 was a land speculator whose objective was to flip the subject land in a substantial profit. The problem with these arguments is that they are not supported by the evidence. I find that none of these arguments is convincing.

[202] Mr. Leamen alleges that the listing agreement is “the fruit of their misrepresentation and breach of duty to the vendor.” He argues that his clients are entitled to an order rescinding the listing agreement. He also submits that “if the plaintiff’s evidence is accepted, brokers maintain a resounding silence to their vendor’s in such multiple representations situations. This case will determine if the law condones this behaviour or admonishes it. To condone this behaviour would require a material departure from a long line of cases requiring agents to act in the best interests of their principals to full disclosure and to the recent codification of this duty, as enshrined in the Code of Ethics.” The first sentence is not supported by the evidence. The rest of this paragraph is, therefore, irrelevant.

[203] Mr. Leamen also submits that the July 8, 2008 assignment agreement involved the assignment of a fraudulently altered agreement of purchase and sale “with respect to the title search date and the closing dates.” There is no credible evidence upon which to ground this allegation of fraud.

[204] He submits, as well, that David D’Angelo “soon suspected the buyer’s lack of bona fide but never advised the vendor of this concern.” Again, where is the evidence to support this statement? There is none.

[205] It is Mr. Leamen’s position that the first APS was “dead” on March 27, 2008, because of 1633799’s failure to deliver the required deposit at which time, because of 1633799’s default, it became liable to pay 2.5% commission to the plaintiff pursuant to the BRA. He adds that by entering into the assignment agreement, 1633799 fraudulently attempted to assign a dead agreement. His position is that the second APS was entered into by his client in the belief that it was a “new transaction to the vendor.” The evidence I heard at trial does not support these arguments.

[206] Mr. Leamen also submits that his client was unaware of the holdover provisions in the listing agreement notwithstanding that he signed the agreement. In the alternative, he argues that if he was not aware of the holdover provisions why would he have sought to mislead the plaintiff and avoid paying a commission? He argues “if the vendor’s objective was to defeat the plaintiff’s claim for commission, because he was aware of the holdover provision of the listing agreement, the vendor could have legally and effectively done so by postponing the signing of APS No. 2 from October 3, 2008 until October 15, 2008, the day after the holdover provision expired.” In any event, the defendants Kanata and Adada deny all of the plaintiff’s allegations that they participated in an attempt to deceive the plaintiff. The problem with these arguments is that I have found as a fact that Mr. Adada did deliberately seek to mislead the plaintiff and to avoid having to pay a commission. In other words, the evidence does not support his arguments.

[207] As mentioned earlier, Mr. Leamen also relies on the provisions set out in paragraph 3 of the listing agreement with respect to multiple representation which I have quoted earlier in these Reasons. He submits that the five items listed as things that shall not be disclosed to the seller do not include a BRA and, therefore, the BRA must be disclosed. Mr. Leamen applies the same logic to the confirmation of cooperation and representation agreement which has also been quoted earlier. These arguments, in my opinion, are based on an unacceptable stretch in logic.

[208] Mr. Leamen also argues that Mr. Ismail did not provide his clients, Kanata/Adada, with an option to negotiate the commission rate of 6%. This argument is not based on fact. As aforesaid, the commission was discussed and was agreed upon at 6%. The plaintiff was not, as alleged by Mr. Leamen, “acting in its own interest and the interest of the Buyer in replacing a 2.5% commission to be paid by the Buyer with a 6% commission to be paid by the Vendor …”

[209] Mr. Leamen relies, as well, on the following extract from a 2009 publication distributed by the Real Estate Council of Ontario:

DISCLOSE INFORMATION

A brokerage acting as an agent, including those authorized to act on behalf of the brokerage, has a duty to disclose information broadly grouped under two categories:

Information pertinent to the principal/agent relationship (i.e., actual or potential conflicts); and

Matters relating to the transaction (i.e., situations or events involving the property, the offer or third parties) which impact the principal.

The first category relates to fiduciary obligations (more fully discussed later in this chapter), while the second is viewed legally as a general obligation applying to all agent/principal relationships. Both duties assume forthright disclose before the principal makes a decision or takes an action affecting his or her interest.

[210] I have no difficulty with these propositions. The evidence, however, does not disclose any violation of these principles.

[211] Mr. Leamen submits that Mr. Radomsky agreed with this paragraph which agreement, he argues, is inconsistent with his overall testimony that the plaintiff owed no duty to Kanata/Adada to disclose the terms of the BRA. I disagree.

[212] Finally, counsel for Kanata/Adada argues that the plaintiff failed to fulfill its mandate to his clients for the following reasons:

(a) The Plaintiff introduced to the Vendor a purchaser who was unable to honour the Purchase and Sale Agreement it signed.

(b) Failed to get the Vendor the best price for the property, as evidenced by what Charles Tremblay paid.

(c) Failed to look for or to find any responsible buyer such as Charles Tremblay.

(d) Ignored the Vendor’s instructions regarding ongoing dealings with Michel Tremblay and obtaining an appropriate deposit.

None of these arguments is supported by the evidence.

[213] Mr. Dwoskin, counsel for 1633799, argues that no commission is owing to the plaintiff pursuant to the BRA because that agreement expired on March 31, 2008, subject to a 90-day holdover period to June 30, 2008. Therefore, the argument goes, there was no contractual relationship between them after June 30, 2008. Mr. Dwoskin, as well, argues that, in any event, there was no obligation to pay the 2.5% commission because there was no “deficiency between this amount and the amount, if any, to be paid by a listing brokerage or by the seller.” I need not deal with these arguments because my finding is that the 6% commission is due and owing to the plaintiff by Kanata and, therefore, no 2.5% commission is owing.

[214] Mr. Dwoskin supports the plaintiff’s claim against Kanata/Adada pursuant to the listing agreement. He submits that Kanata executed the second APS on October 3, 2008, which was prior to the holdover expiration date of October 15, 2008, and, therefore, the commission is due and payable. I agree.

[215] He submits that Mr. Ismail should have, but did not, disclose his interest in Kanata to his client pursuant to s. 18 (1) of the Code. In effect, his argument is that, because of this breach, no commission is owed by his client. In para. 22 of his final written submissions he says:

22. The position of 1633799 is that, under the circumstances of this case, including:

i) the express concerns of the purchaser regarding the inability of the vendor to obtain shareholder’s approval of the offer in a timely fashion;

ii) the amount offered by the purchaser for the property which was significantly higher than market; and

iii) the very significant amount to be gained by the registrant Jawaid Ismail were his ownership share in the vendor and his entitlement to the Listing Agent’s fee,

the interest of the plaintiff in the Vendor’s land should have been disclosed.

[216] He relies on the following cases for this last proposition: Christie v. McCann (1972), 1972 CanLII 409 (ON CA), 3 O.R. 125 (Ont. C.A.); and George Rayfield Realty Ltd. v. Kuhn (1980), 1980 CanLII 1584 (ON SC), 30 O.R. (2d) 271 (Ont. H.C.). I have already rejected this argument. In my opinion, Mr. Ismail’s interest in Kanata, while it should have been revealed, is of no consequence since it was irrelevant – it was not a material fact.

Final Conclusions

[217] Without restricting in any way the scope of my findings already set forth in these reasons, the following are my final conclusions.

[218] As noted earlier in these reasons, Mr. Adada was not a credible witness. In my opinion, he shaped his testimony to accomplish what he hoped would be the outcome of this trial. At trial he contradicted evidence he gave on his examination for discovery; he adopted unreasonable positions; and he contradicted his own evidence at trial. His testimony concerning the September 9, 2008 letter from Mr. Gregoropoulos to Mr. Webber made no sense whatsoever. His denial of his attempts to avoid paying the commission, in the face of all of the evidence, is simply not worthy of belief.

[219] The first Agreement of Purchase and Sale (APS) was essentially the same agreement that Michel Tremblay and/or 1633799 sought to and did revive in September and October 2008. As the second Agreement of Purchase and Sale (APS) was completed in December 2008, the commission of 6% is due and payable by Kanata because the first Agreement of Purchase and Sale (APS) was signed during the “listing period.” The change in the name of the purchaser resulted from Mr. Adada’s demand – a demand made with the intent of avoiding the payment of a commission. The commission was, clearly, earned.

[220] The second APS, being one in which Michel Tremblay and/or 1633799 was the de facto purchaser as aforesaid, and being an extension, amendment, or replacement of the first APS, was signed during the “holdover period” set out in the listing agreement in circumstances where Michel Tremblay and/or 1633799 were introduced to the property during the listing period. In addition, Charles Tremblay, In Trust, the ultimate purchaser, was introduced to the property during the listing period.

[221] I accept as persuasive the following submissions made in Mr. D’Angelo’s Memorandum of Fact and Law filed at the end of the trial:

The Listing Agreement provides that as long as an Agreement of Purchase and Sale is obtained during the Listing Period (February 16^th to August 15^th), the brokerage is entitled to its commission (paragraph 2). The First APS (later converted to the Second APS’s at Adada’s insistence) was signed during the Listing Period, and hence the issue of when the introduction took place is irrelevant under the terms of the listing contract. This is the most straightforward factual finding that effectively responds to the defendant’s position when the “introduction” took place.

It is only in the event that the APS is entered into during the Holdover Period (between August 15^th to October 14^th), that the buyer has to have been introduced to the property OR shown the property during the Listing Period (paragraph 2 of the Listing Agreement). In this case, the Second APS was signed during the Holdover Period. The real buyer Michel (who Kanata’s counsel has acknowledged is the alter ego of 447/Lafreniere), was introduced during the Listing Period. Furthermore, Michel was shown the property by Dave (D’Angelo) on one occasion only, on March 4^th or March 9^th, both within the Listing Period.

Alternatively, as per Team’s fourth factual theory, Charles, the ultimate purchaser, testified that he was first introduced to Michel and the Property in late May/early June of 2008. This is consistent with Michel’s evidence on his examination for discovery (Q. 35-37, 195 and 198), along with Michel’s acknowledgement on cross-examination by Team’s counsel. This is without question during the Listing Period. While Michel’s memory and credibility could be questioned, Charles has no personal interest in this matter and was a very credible and forthright witness.

Since the First APS was signed during the Listing Agreement; or Charles the ultimate purchaser was introduced during the Listing Period; or Michel was shown the Property during the Listing Period; or Michel was introduced during the Listing Period, Team has satisfied this term of the Listing Agreement based on any of these four issues. Again, only one of these four is needed to satisfy the Listing Agreement.

In respect of the last (fourth) option, that Michel was introduced during the Listing Period, the vendor seeks a narrow interpretation of “introduction”, by having us believe that Michel was introduced to the property before (or by) meeting Dave on January 11^th, before the Listing Period. However, this argument ignores the commercial reality of the real estate world (and the testimony of Messrs. Browne and McKeown) that most purchasers of commercial properties already know about, have been to, or have investigated the property they are interested in buying – and ignores how transactions are negotiated and commenced.

The vendor also seemingly wants the court to ignore all the work of the agents as the effective cause of the deal, the introduction of the parties, the opportunity, and all the ensuing negotiations thereafter.

There is no doubt that Michel was introduced to the vendor, the opportunity to formally buy, the delivery of multiple offers, and the entering into the First APS – all during the Listing Period.

On cross-examination at trial, when Adada was asked if Michel was introduced to him or the Property before their February 19^th conference call, Adada adamantly testified “No, he was not introduced before”. When asked as a follow up whether “This is because he could not be introduced before the property was officially for sale?”, Adada responded with a resounding “Yes”.

Adada admitted and knew fully well, from both agents before he signed this Listing Agreement, that the buyer Michel wanted to make an offer to buy the property; that the buyer was being introduced to him through the agent; and the agents would be assisting the negotiations. Adada entered into the Listing Agreement based on the known & acknowledged fact that he knew the buyer was introduced beforehand. Adada also acknowledged on examination for discovery (June 30, 2009 Transcript, Q. 207 and 414) and in cross-examination that he specifically entered into the Listing Agreement for the sole purpose of attempting to conclude a deal with this specific buyer Michel. The vendor cannot twist the Listing Agreement around to suit his own purpose to avoid paying a commission on account of an introduction that he knew had already taken place, and for which introduction he specifically retained Team to conclude a deal.

This evidences two things. Firstly, there would have been no introduction of Michel to Adada, or a resulting APS, without the representation agreements and the agents’ efforts. Adada knew that Michel was aware of the property before the Listing Agreement was signed. Therefore it is completely disingenuous for Adada to now argue, three years later, that because Michel knew of the property before Adada signed the Listing Agreement that Team should not be entitled to a commission. Such a result in favour of the vendor is contrary to the overwhelming business practice, and unfair to Team, given the clear knowledge that Adada had at the time he signed the Listing Agreement.

In the alternative, as per the evidence of Messrs. Browne and McKeown, the defendant’s position is completely unrealistic when you take into account the practice in the industry. The usual practice in the industry is that 50% to 75% of buyers, before they sign a BRA with a broker, are already aware of the property, they’ve seen it, visited it before, or previously investigated it. People who buy commercial properties or vacant land for development are sophisticated business people who are doing this to make a profit - so they are very familiar with the marketplace and what is available. Hence there is no real “initial introduction”, but at most a “re-introduction”. With vacant land, that percentage is even higher. There is no need to introduce the potential buyer to vacant land because there is nothing there to show him, and most buyers of large-scale commercial vacant land have driven by, investigated the property, and calculated the various building and development options with their team of designers.

Michel admittedly knew about the existence of that vacant property for several years before it was even listed for sale, as he lives in the neighbouring area and drives by it constantly. He is a property speculator and admittedly aware of the properties and development in the Kanata, Carp and Dunrobin area.

A current Webster’s definition of “introduction” supports Team’s position as it is defined as “to lead or bring in”; “to present formally”; “to bring into play”; or “to present”.

Webster’s Collegiate Dictionary, 9th ed., s.v. “introduce” [Case Book, Vol. #3, Tab 12]

Further, s. 36(8) of the Code (of Ethics) ensures that brokers cannot advertise or market properties until they are listed for sale. This is relevant to ‘introduction’ because it confirms that until the property is listed for sale, the agent realistically cannot do anything and cannot advertise or market a property to a prospective buyer, which is how introductions sometimes take place.

In this case, the most important concepts of “introduction” all undisputedly took place during the Listing Period of February 16^th to August 15^th: (a) the only showing to Michel by Dave on March 4^th or 11^th; (b) the first offer submitted on February 18^th; (c) the introduction of buyer to vendor on the conference call on February 19^th; (d) the First APS was signed March 25^th and 26^th; and (e) Charles was introduced in late May/early June.

The concept of Introduction was based on the “Threshold Rules” of each real estate association. As per Browne’s unchallenged testimony on this point, before BRA’s came into being in 1995, the industry had to determine which agent “crossed the threshold” when more than one agent claimed a commission for its buyer (i.e.: who introduced first, and how did they introduce the buyer to the vendor and property?). Since 1995, with the advent of BRAs (and the fact that now BRAs are mandated under the Code), the issue of ‘introduction’ is significantly less relevant, because buyers can only have one agent at a time (the one they sign a BRA with), and parties know more clearly who is representing who, and who is entitled to a commission.

There are several well-known examples of when a buyer has previously been “introduced” to a property, yet the commission entitlement is still intact. These all point to the fallacy of the defendant’s argument, that Team should “not be entitled to a commission because Michel, the very purchaser that Adada hired the agents to negotiate a deal with, was introduced before the Listing Period”. This defence is untenable in light of these very common examples that confirm otherwise, as set out in the attached Tab 3 herein.

The bottom line is that had the First APS closed as scheduled, Kanata would not be able to argue that there was no commission payable on the basis that this very buyer Michel/163 knew about the property before the Listing Period commenced. Kanata is simply now trying to create a technical argument that has no merit.

[222] Kanata did not act in good faith. It, under direction from Mr. Adada, adopted a course of action with the wrongful intent to avoid payment of the commission. The plaintiff is entitled to a judgment against Kanata in breach of contract – i.e. the listing agreement. The plaintiff is also entitled to a judgment against Mr. Adada for his deliberate and wrongful interference with the contractual relations between Kanata and the plaintiff. In each case the judgment should be in the amount of $236,565 (inclusive of GST) plus pre-judgment interest and post-judgment interest according to the Courts of Justice Act, R.S.O. 1990, Chapter C. 43.

[223] “A vendor cannot avoid payment of an earned commission by a clandestine agreement with the purchaser for minor amendments in the terms of the transaction … the principle to be deduced from these cases, as applicable to a case like the present, where the original purchaser does not entirely drop out, seems to be that, if the purchaser originally introduced remains throughout the transaction either directly or indirectly interested in and by the final outcome, the agent does not lose the right to commission established by the original introduction …” [See Rooke v. Lillicroft (1974), O.R. (2d) 436 (Ont. S.C.); Murray Goldman Real Estate Ltd. v. Captain Developments Ltd. (1978), 1978 CanLII 1586 (ON CA), 18 O.R. (2d) 421 (Ont. C.A.); J.J. Barnicke Limited v. 1471422 Ontario Limited, 2007 CANLII 40858 (Ont. S.C.); and McQuay v. Beacon Homes Ltd. (1979), 13 R.P.R. 147 (Ont. H.C.)].

[224] In my opinion, Mr. Adada’s conduct was so wrongful that it would be just and fair to impose personal liability on him. He was, at all relevant times, clearly in control of Kanata and caused it to do his bidding. As the largest shareholder of the company he had more to gain than anyone else by avoiding the commission (See: 642947 Ontario Ltd. v. Fleischer, 2001 CanLII 8623 (ONCA) at page 67.)

[225] Mr. Adada and Kanata would not have been able to avoid the payment of a commission without the cooperation of Michel Tremblay and/or 1633799. Mr. Tremblay and his company agreed to Mr. Adada’s demand to change the name of the purchaser. Mr. Tremblay and/or 1633799 knew that Mr. Adada’s demand was made with the intent to avoid payment of the commission. They were complicit in Mr. Adada’s and Kanata’s unlawful conduct. I find that Mr. Adada, 1633799 and Michel Tremblay intentionally interfered with the contractual relations (the listing agreement) between the plaintiff brokerage and Kanata. All three were aware that there existed a valid and enforceable contract pursuant to which a commission was, or would be, payable by Kanata to the plaintiff. Their conduct was deliberate and in bad faith. Their conduct contributed to a breach of the aforesaid contract, or contractual relations. All three knew that the natural consequences of their conduct would result in the infliction of damage on the plaintiff. Mr. Adada was not simply acting in his capacity as a director, officer, and/or shareholder of Kanata. Indeed, he was not authorized by Kanata to act in the fashion he did. He acted with malice and acted primarily to benefit his own personal interests. Similarly, Michel Tremblay and 1633799 acted in such a fashion as to facilitate Mr. Adada’s bad faith conduct and they also acted in their own self interests. Both of them acted in violation of the BRA. Therefore, a judgment should issue against 1633799 in the amount requested in the Statement of Claim, i.e. $137,471.25 which is the difference between the 6% and the 2.5% commission. I make no finding of fraud against Michel Tremblay personally. Accordingly, Michel Tremblay is entitled to immunity from judgment pursuant to the Bankruptcy and Insolvency Act, (R.S.C., 1985, c. B-3). The judgment against 1633799 shall not be enforceable in the event that the plaintiff recovers the amount of $236,565 from either Mr. Adada or Kanata. Because of the interim orders made in this proceeding regarding the holding of funds in trust at the Nelligan O’Brien Payne law office, I would expect that the plaintiff will fully recover the amount of $236,565 against Kanata and Mr. Adada. Accordingly, should the plaintiff successfully recover all or part of the judgment for $236,565, the judgment against 1633799 will be satisfied pro rata.

[226] Any funds held in trust by Nelligan O’Brien and Payne following the payment of monies required to pay the principal and interest portions if this judgment shall be held in trust until I have disposed of the legal costs in this matter.

[227] Again, bearing in mind the foregoing, there is no 2.5% commission owing by 1633799 (i.e. $99,093.75) because the plaintiff is entitled to be paid the full 6% seller’s commission.

[228] The plaintiff and its salespersons did not act in breach of their fiduciary obligations; their contractual obligations; REBBA; the General Regulation, or the Code of Ethics. Mr. Ismail’s failure to disclose his personal financial interest in Kanata, such as it was, did not give rise to any prejudice or damage to either Kanata or Mr. Adada.

[229] Team Reality did not act wrongfully in not informing Kanata or Mr. Adada of the BRA between the plaintiff and 1633799 and/or Michel Tremblay. In actual fact, there is only one BRA, not two as argued by Kanata and Mr. Adada (the copy in Mr. Michel Tremblay’s name personally was simply a stepping stone to the agreement with 1633799.) In any event, Kanata and Mr. Adada were aware at a very early stage that the plaintiff brokerage represented both the buyer and the seller (or potential buyer and potential seller.) In my opinion, it is significant that neither Kanata nor Mr. Adada objected to the multiple representation.

[230] The plaintiff did not act wrongfully in attempting to obtain Kanata’s execution of a listing agreement prior to delivery of the first offer to purchase. In any event, the first offer to purchase, and indeed the second offer, were delivered to Kanata without there actually being a signed listing agreement in existence.

[231] Mr. Adada’s statement that, had he known of the existence and/or contents of the BRA, he (or Kanata) would not have entered into an agreement to sell the subject lands to 1633799 and/or Michel Tremblay, is, first of all, not credible, and, secondly, is without any legal significance. In my opinion, the existence of the BRA was not a “material fact” that should have been disclosed to the seller. A material fact is one that would affect a reasonable person’s decision to acquire or dispose of the interest in question. Mr. Adada testified that he had no problem with paying a 6% commission. He knew that the 6% commission would be shared.

[232] Neither Kanata nor Mr. Adada called any expert evidence or evidence of industry practice, to establish their proposition that the fallback commission contained in the BRA must be disclosed to a vendor. I have not been referred to any on-point legal precedent for this proposition.

[233] The listing agreement is not void ab initio, either on the grounds of non-disclosure or because of any breach by the plaintiff of the listing agreement, REBBA; the General Regulation; or the Code of Ethics as argued by Kanata and Mr. Adada. There is no legal precedent, statute or regulation that propounds such a proposition. The Code, fundamentally is for use as a regulatory and disciplinary tool within the industry. It, the Code, should not be used as a sword in order to disentitle a brokerage to an otherwise earned commission.

[234] There is no persuasive evidence upon which to accept the argument of Kanata and Mr. Adada that either Michel Tremblay and/or 1633799 were not bona fide or “legitimate” buyers.

[235] Neither Mr. D’Angelo nor Mr. Ismail knew that Michel Tremblay was a land speculator. As well, the evidence establishes that Michel Tremblay and/or 1633799 had access to funds sufficient to finance their dealings.

[236] There is absolutely no evidence that even suggests that the price obtained from the property was not the absolute maximum price that could have possibly been obtained for the property.

[237] There is no credible evidence to support a finding that the first APS was fraudulently altered by the plaintiff or any of its employees, or, for that matter, by anyone at the time it was assigned in July. In addition, there is no evidence to establish that the assignment itself was fraudulent.

[238] At no time did Mr. Gregoropoulos attempt to mislead Kanata or Mr. Adada about the fact that Michel Tremblay and/or 1633799 were still involved as purchasers in September of 2008 or thereafter.

[239] There was no unlawful conspiracy between Mr. Gregoropoulos, Michel Tremblay, 1633799, Charles Tremblay, the plaintiff, or its salespersons, nor any other party, to mislead Kanata and/or Mr. Adada as suggested by him. Most certainly, Mr. Polowin was not part of any unlawful conspiracy nor is there any evidence to suggest any wrongdoing on his part.

[240] Mr. Adada knew, or should have known, that the listing agreement contained holdover provisions. These provisions were in plain sight on the document.

[241] Kanata and Mr. Adada’s submission that the BRA “requires and obliges” the buyer to pay a commission is without merit. The submission is an overstatement which ignores the wording of the agreement. The commission is payable only as a fallback one or pursuant to the terms of the BRA.

[242] At no time did the plaintiff or Kanata enter into an agreement pursuant to which the commission would be reduced below 6% of the selling price. In any event, the 6% commission was affirmed when the parties entered into the multiple listing agreement in place of the exclusive listing agreement.

[243] Accordingly, and as aforesaid, judgment will issue in favour of the plaintiff against both Kanata and Mr. Adada in the amount of $236,565, but on the understanding that the plaintiff shall not recover more than the total sum of $236,565 exclusive of pre and post-judgment interest, and costs, if any.

[244] In addition, judgment will issue in favour of the plaintiff against 1633799 in the amount of $137,471.25 together with interest, and costs, if any. This award, however, will not be recoverable in the event that the plaintiff receives payment of its judgments for $236,565.

[245] The judgments against Kanata, Mr. Adada, and 1633799 shall each bear pre-judgment interest and post-judgment interest pursuant to the Courts of Justice Act, supra, which interest shall commence to run on December 20, 2008 and shall continue until the date of full payment.

[246] In the event that there are any difficulties encountered in the implementation of the terms of the Order of Métivier J. of May 29, 2009, or my subsequent Order made during the course of the trial, I may be spoken to by counsel.

[247] The cross-claims of 1633799 and Michel Tremblay are dismissed as are the cross-claims of Kanata and Mr. Adada.

Costs

[248] In the event that within 30 days following the release of these Reasons for Judgment, the parties are unable to conclude an agreement with respect to legal costs, they may make brief written submissions to me. The original submissions should be made by the plaintiff. The defendants will then have 14 days from receipt of these submissions to deliver their submissions to the plaintiff and each other. Any party wishing to file further submissions must do so within 10 days following the receipt of the submissions of the defendants.

Judge’s Retirement

[249] My effective retirement date as a judge of this Court is April 3, 2012. Notwithstanding that, I have six months within which to complete any outstanding business. I will be out of the Country commencing on February 29 until April 18, 2012.

Power J.

Released: February 22, 2012