ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-09-00373004-0000
DATE: 20121126

BETWEEN:

MICHELLE FERRATON Plaintiff – and – ANTONY SHULAR Defendant

Jeffrey Radnoff, for the Plaintiff
Mark Wainberg, for the Defendant

HEARD: November 14, 15, 2012

justice j. wilson

REASONS FOR JUDGMENT

[ 1 ] The parties entered into the Sales Agreement dated November 25, 2008 which states:

Sale Agreement. Txt

I, Gary Antony Shular, agree to split the proceeds of 92 Jacobs Ave. St. Catherines, with Michelle Ferraton 50% 50% in consideration of her work in arranging for the sale of the house. Expenses incurred to sell or maintain the property will be also split 50% 50%.

date Nov 25 th 2008

Gary Antony Shular

Michelle Ferraton

[ 2 ] The defendant Mr. Shular inherited the property located at 92 Jacobs Avenue, St. Catherines (the Property) after his mother died in 2006.

[ 3 ] In this simplified rule summary trial, Ms. Ferraton relies on the Sales Agreement and seeks to obtain judgment for a further payment in the amount of $32,000 representing 50% of the net equity of the Property. Her total payment for her assistance in facilitating the sale would be in excess of $72,000.00.

[ 4 ] The defendant raises two issues about the enforceability of the Sales Agreement entered into between the parties. First, counsel for the defendant argues that the Sales Agreement offends the provisions of the Real Estate and Business Brokers Act 2002, S.O. 2002, c. 30, Sched. C (REBBA), sections 4(1) and (2), and 9, as the plaintiff is not a licenced realtor or broker and so the Sales Agreement is unenforceable. Second, the defendant argues that the Sales Agreement is unconscionable and is therefore unenforceable.

[ 5 ] For the reasons to be outlined, I conclude that the Sales Agreement seeks payment for “other remuneration for services in connection with a trade in real estate” pursuant to section 9 the REBBA, and is therefore unenforceable as the REBBA is engaged and the plaintiff is not a registered real estate agent or broker. In the alternative, I conclude that in the factual circumstances, the Sales Agreement is unconscionable and hence unenforceable.

The Witnesses

[ 6 ] Affidavit evidence was filed on behalf of both parties and those who filed affidavits also testified before me. I heard evidence from four witnesses, including: Ms. Ferraton; Mr. Mark Pucyk, Ms. Ferraton’s common law spouse; the defendant Antony Shular; and, Mr. Valentin Flicker, Mr. Shular’s partner.

Findings of Credibility

[ 7 ] I found the defendant Antony Shular to be a credible witness, who did not exaggerate or deny the obvious. He acknowledged that he owed something to Ms. Ferraton for her help, but stated that after receiving some indirect legal advice through a friend to the effect that the Sales Agreement “was not right”, he “came to his senses”. He did not make negative comments about Ms. Ferraton in his evidence. He gave his evidence with flat affect and in an unemotional manner, but he did not exaggerate nor shy away from the truth. I accept his evidence.

[ 8 ] So too, I accept the evidence of Mr. Flicker. I accept that together Mr. Shular and Mr. Flicker enjoyed the process of fixing up the Property when Mr. Shular’s mother moved to a nursing home, and after her death. They enjoyed staying there during a two year period after Mr. Shular inherited the Property, and both were proud of the efforts they had made to improve the Property until the summer of 2008. I accept that Mr. Shular has a history of debilitating depression, and that when the Sales Agreement was signed he was experiencing depression, he was socially isolated, and he was vulnerable.

[ 9 ] By way of contrast, I find that Ms. Ferraton grossly exaggerated her contribution to the sale of the Property. I do not accept the suggestion that but for her efforts the Property would have been lost. It was Mr. Flicker that brought to Ms. Ferraton’s attention that Mr. Shuler was at risk of losing interest in maintaining the Property due to his emotional condition. Clearly Ms. Ferraton’s assistance with the sale was appreciated, as she had a truck, and both Mr. Shular and Mr. Flicker travelled by bus. She is an imposing, no nonsense person. She took charge of the situation. Ms. Ferraton was well aware of Mr. Shular’s frailties and history.

[ 10 ] In his evidence, Mr. Pucyk did not exaggerate his contribution to the sale of the Property to the same degree as Ms. Ferraton. It was not clear whether Ms. Ferraton or Mr. Pucyk purchased the household contents. Mr. Pucyk did not dispute that in the sale of the contents of the house, Mr. Shular excluded from the sale four paintings by his mother and a set of knives belonging to him. In spite of these exclusions, Mr. Pucyk did not dispute that he kept these items. I do not accept Mr. Pucyk’s suggestion that anything from the Property “went missing”, as the only people with access to the Property were Ms. Ferraton, Mr. Pucyk, and for two days Mr. Flicker, when Ms. Ferraton paid him to assist with the cleaning.

[ 11 ] Where there is a discrepancy between the evidence of the plaintiff and the defendant, without hesitation I accept the evidence of Mr. Shular and Mr. Flicker.

The Factual Chronology

[ 12 ] Ms. Ferraton and Mr. Shular were friends, dating back to 1995. She knew Mr. Shular well. She worked with him. She confirms in her affidavit the known vulnerabilities of the defendant and states, “for many years, I assisted the defendant in financial and work matters as he was not capable, at times, to earn a living or to take care of himself because he had emotional and substance abuse problems.” She stated that at times, the defendant “would disappear for days”.

[ 13 ] The evidence confirms that Mr. Shular was close to his mother and connected to the family home. After Mr. Shular’s mother moved into a nursing home, Mr. Shular paid for upgrades and repairs to his mother’s home. Mr. Shular inherited the Property in 2006 after his mother died. He was happy to own the Property; he and his partner Mr. Flicker spent a great deal of time in St. Catherines and continued improving and decorating the Property.

[ 14 ] I accept the evidence of both Mr. Shular and Mr. Flicker that by the early summer of 2008, the Property was impeccable, with the exception of the basement, which was clean, but contained a lifetime of his parents’ accumulated materials, such as tools, bicycles, paint cans, ladders and appliances. Mr. Shular acknowledged candidly that the basement at the Property was in a “deplorable” state and would take two people seven days to organize.

[ 15 ] In the summer of 2008, Mr. Shular moved out of the premises shared with Mr. Flicker, and moved into a rental apartment in the same building where the Ms. Ferraton resided, on Parliament Street in Toronto.

[ 16 ] I accept the evidence of Mr. Shular that in the summer of 2008, he fell into a deep depression, and that he lost all interest in the Property, “and in everything”. He let various payments go into arrears. I accept his evidence that he has had a long history of depression that he has “battled all his life”. This history of depression was corroborated by his partner, Mr. Flicker, who has lived with Mr. Shular for 12 years.

[ 17 ] I accept Mr. Shular’s evidence that he was drinking heavily at the time, and not communicating with anyone, except Ms. Ferraton and occasionally Mr. Flicker, during the summer and up to the time when he signed the Sales Agreement. He had very few friends, and became very reclusive. Mr. Shular worked as a cleaner, and did continue cleaning his clients’ homes during this time, notwithstanding his personal difficulties.

[ 18 ] I accept the affidavit evidence, as well as the viva voce evidence of Mr. Flicker that was not challenged in cross-examination:

During the ten years that we shared an apartment, Antony was emotionally unstable with bouts of severe depression. During his periods of depression, he is out of touch with reality, does not care about anything or anybody, stays in his room for days at a time and indulges in binge drinking. The death of his mother was very difficult for Antony. After he moved out of my apartment in 2008, he cut off communication with me for several months, and did not have the benefit of my friendship and support. He did not have any other true friends. Because of his fragile emotional state, he was very vulnerable to exploitation. That was the period of time in which he sold his mother’s furniture to the plaintiff at a gross undervalue and signed the document “Sales Agreement.txt” with the plaintiff.

[ 19 ] Mr. Shular was not receiving any medical treatment at this time, and there is no medical confirmation of the evidence of Mr. Shular and Mr. Flicker as to Mr. Shular’s history of depression. Medical corroboration is not necessary. A lay witness who has a close connection with a person over time can give relevant, credible evidence of emotional difficulties. (See: R. v. Orlik, 2012 ONSC 5062 at para 42 and 43).

[ 20 ] I find that Ms. Ferraton was well aware during the summer and fall of 2008, that Mr. Shular was going through one of his difficult periods and was seriously depressed. This was why he ignored the Property and did not care what happened to it.

[ 21 ] Mr. Shular did not go to the Property from the summer 2008, until after the sale in November 2008.

[ 22 ] By the fall of 2008, the Property was being neglected: the lawn was not cut, the taxes were unpaid, and the gas, water, and hydro facilities had been cut off. Mr. Flicker, who at the time was also a friend of Ms. Ferraton, expressed his concern to her.

[ 23 ] Ms. Ferraton and Mr. Pucyk stayed from time to time at the Property to visit friends and go to the casino, and so they were familiar with the Property. In the fall of 2008, probably in response to the concerns expressed by Mr. Flicker, Ms. Ferraton telephoned Mr. Shular and stated that “she had a plan” for the sale of the Property. She offered to help Mr. Shular with the sale of the Property. Mr. Shular readily agreed and was grateful for her assistance. There was no discussion of any compensation to be paid to Ms. Ferraton when she offered to help Mr. Shular sell the Property.

[ 24 ] Ms. Ferraton interviewed three potential real estate agents and chose one of the three.

[ 25 ] The realtor advised Ms. Ferraton that she would need a Power of Attorney to be signed by Mr. Shular to enable Ms. Ferraton to authorize the sale of the Property and to sign the listing agreement.

[ 26 ] On November 11, 2008, Mr. Shular signed a Power of Attorney appointing Ms. Ferraton to sell the Property.

[ 27 ] At around the time the Power of Attorney was signed, Ms. Ferraton proposed to Mr. Shular that they would equally share the expenses of the Property until the time of the sale, and that they would equally share the net proceeds of the sale.

[ 28 ] Mr. Shular was vague about the contents of any discussion, but it was clear that any proposal for compensation came from Ms. Ferraton. I do not accept Ms. Ferraton’s suggestion that the proposal came from Mr. Shular as she suggests in her pleading. Clearly it did not. Rather, I accept that Ms. Ferraton presented him with the arrangement, without any discussion, that whereby she would receive half the equity in the Property and that expenses would be shared. He agreed without a question and without any discussion.

[ 29 ] Ms. Ferraton and Mr. Pucyk performed work preparing the Property for sale, doing some minor cleaning and clearing out the basement. The lion’s share of the work was for cleaning out the basement. Each spent approximately 50 hours cleaning the Property. For at least part of the cleaning process, or perhaps all of it, the water was not connected and they obtained pails of water from a neighbour. Apart from the basement, the evidence confirms that any cleaning that occurred was minor and superficial.

[ 30 ] Ms. Ferraton paid hydro and gas bills, and arranged for insurance, so that the Property could be shown to potential buyers. Mr. Shular does not dispute that Ms. Ferraton incurred expenses totalling $2115.17 related to the Property, which have been repaid.

[ 31 ] On November 18, 2008, the Property was listed for sale for $139,900. The market was favourable, and a bidding war ensued. The Property sold on November 23, 2008, within a week of the listing, for $156,000.

[ 32 ] Ms. Ferraton understood that the Power of Attorney would allow her to retain a lawyer to conduct the sale, and that she would keep half the net proceeds, giving half to Mr. Shular.

[ 33 ] The realtor advised Ms. Ferraton that once the Agreement of Purchase and Sale was signed, Mr. Shular would have to conduct the sale, and instruct the lawyer.

[ 34 ] At some point Mr. Shular expressed the view that he did not care about the Property and did not care if he got money from it. Ms. Ferraton seemed to think that this statement was some sort of a green light to her entitlement. This statement does not justify Ms. Ferraton preparing a document for her friend to give away half of his equity in his mother’s home.

[ 35 ] To protect her interests, Ms. Ferraton then had Mr. Pucyk type the Sales Agreement on her instructions.

[ 36 ] On November 25, 2008, Ms. Ferraton attended Mr. Shular’s apartment and asked him to sign the document prepared by her. He did so. There was no discussion of the terms. There was no independent witness present. It was presented to him. He read the document and understood that he was agreeing to pay Ms. Ferraton half of the net value of the Property, and that expenses would be shared. He knew by that time that the Property had sold and was aware of the sale price. Although he acknowledged that he understood the terms, he later stated that “he didn’t understand the implications of it at all”. He had lost all interest in the Property, due to his emotional state.

[ 37 ] I accept the evidence of Mr. Shular that at the time he was in a deep depression, and drinking heavily, although he did not consider himself to be an alcoholic. At this time, Mr. Shular was not under the care of any doctor, and was not taking any medication. I note that for the last two years, Mr. Shular testified that he has been under the regular care of a psychologist for his problems, is not drinking, and is doing much better.

[ 38 ] Mr. Pucyk or Ms. Ferraton purchased the contents of the home for a very favourable price of $3500 for the entire contents of a three bedroom home, including some valuable carpets, handmade furniture, and new furniture items recently purchased by Mr. Shular. After the home was sold, Mr. Pucyk and Ms. Ferraton packed and moved the contents out of the home. Approximately half of the 100 hours spent by Ms. Ferraton and Mr. Pucyk at the Property was for packing and moving the items they had purchased in the contents sale. They agreed that they should not be compensated for packing and moving the items purchased.

[ 39 ] After the sale, and before the closing, Ms. Ferraton also hired a dumpster for any items that were not kept or recycled.

[ 40 ] Prior to going to see the real estate lawyer, Mr. Shular received information via a friend that a paralegal had said that the Sales Agreement giving up half the equity in his inheritance “wasn’t right” and that the price was “abnormally high”.

[ 41 ] Mr. Shular did not discuss the Sales Agreement with Ms. Ferraton with the real estate lawyer. On the date of the closing, Mr. Shular received a cheque for approximately $140,000.00

[ 42 ] On December 24, 2008, one day after the closing, Mr. Shular delivered a card and a cheque to Ms. Ferraton. At this point in time, he stated that he “had come to his senses”. He wrote a note to Ms. Ferraton enclosing a cheque for $22,115.17. The sum of $2115.17 represented a payment for the list of expenses that Ms. Ferraton had given to him. The additional $20,000 represented compensation for her assistance which he testified was in his view, a “very just amount” and a “considerable amount”.

[ 43 ] The gist of the contents of the note enclosing the cheque was that he felt that he was giving Ms. Ferraton a sum of money that was fair and generous for the work she had done. I do not accept Ms. Ferraton’s evidence that the note enclosing the cheque was blank. Conveniently, the note has been lost. This payment was not corroboration of the Sales Agreement, as argued by the plaintiff, but an acknowledgement by Mr. Shular of an obligation to pay Ms. Ferraton what was fair in the circumstances. It was a repudiation of the Sales Agreement, not affirmation by making a part payment.

[ 44 ] There is no evidence that there was any communication between the parties after that date, notwithstanding that they lived in the same apartment complex. I do not accept that Mr. Shular refused to take Ms. Ferraton’s calls. As they lived in the same building, and had she wanted to communicate with him, she could easily do so by simply knocking on his door.

[ 45 ] In February 2009, Ms. Ferraton initiated this claim. At the time Mr. Shular was still residing in the same apartment building as Ms. Ferraton. Mr. Shular, in his pattern of passivity, did not defend the action. Ms. Ferraton obtained default judgment.

[ 46 ] In August 2009, Ms. Ferraton garnished the sum of $17,954.00 representing one half the balance of a joint account held in the names of Mr. Shular and Mr. Flicker. As the joint account was frozen, Mr. Flicker asked for his half of the money from the bank to put into a bank account in his name. Mr. Flicker gave the money back to Mr. Shular, who has since spent it on living expenses. Presently, Mr. Shular is on welfare and is not working. All the money from the sale of the Property is gone.

[ 47 ] Ms. Ferraton has commenced a separate fraudulent conveyance action against Mr. Flicker with respect to treatment of one half of the funds in the joint account. Counsel for the plaintiff argues that Mr. Shular does not come to court with clean hands, and cannot seek equitable relief in these circumstances.

The REBBA argument

[ 48 ] The defendant relies on sections 4(1) and (2), and 9 of the REBBA which provide:

4(1) No person shall,

(a) trade in real estate as a brokerage unless the person is registered as a brokerage;

(b) trade in real estate as a broker unless he or she is registered as a broker of a brokerage;

(c) trade in real estate as a salesperson unless he or she is registered as a salesperson of a brokerage; or

(d) trade in real estate unless registered under this Act.

4(2) A person who is not registered as a brokerage, broker or salesperson shall not,

(a) directly or indirectly hold himself, herself or itself out as being a brokerage, broker or salesperson, respectively; or

(b) perform any of the functions of a brokerage, broker or salesperson as provided in this Act.

9. No action shall be brought for commission or other remuneration for services in connection with a trade in real estate unless at the time of rendering the services the person bringing the action was registered or exempt from registration under this Act and the court may stay any such action upon motion.

[ 49 ] There are two recent decisions that canvas recent case law and principles applicable to the REBBA. These are Market Leadership Inc. v. Loretta Foods Ltd. (2005), 2005 CanLll 46933 (Ont. C.A.), and Neiman v. Duffmits Holding Inc., 2010 ONSC 4643.

[ 50 ] The decision of Justice Cronk in Market Leadership considers the meaning of section 22 of the previous REBBA legislation, which is virtually identical in wording to section 9 of the REBBA.

[ 51 ] Justice Cronk confirmed at paragraph 41 that the claim for compensation for an extension of the lease was barred, as a lease transaction is a “sale in real estate” and so was barred under section 22 of the REBBA.

[ 52 ] She further confirmed that the claim for additional compensation claimed by Market Leadership could not proceed, as there was no evidence to support the assertion that any additional work claimed was “stand alone” and unrelated to the sale of Loretta Foods or the extension of the lease. The court did not allow this aspect of the case to proceed and upheld the stay granted by the motions judge, as additional work related to a sale is not recoverable unless an individual is a registered broker or real estate agent.

[ 53 ] In the second decision, Neiman v. Duffmits, Justice Strathy cited and relied on Market Leadership and confirmed that section 9 has been consistently enforced by the courts. The rationale and importance of the legislation to protect the public is confirmed at paragraph 26 of the decision:

While this may appear to result in unfairness in particular cases, because the plaintiff may have invested substantial time and effort on the defendant’s behalf, yet the defendant receives a windfall, the objective of the statute is the protection of the public by regulating those who engage in the real estate business: Maroney v. Tebbutt, above, at paras. 13-15. As Rosenberg J., as he then was, said in M.J.K. Consultants Inc. v. Citibank Canada, above, at para. 12:

On the basis that this motion comes to me, that is on the assumption for the purpose of this motion that all of the facts alleged by the plaintiff are true, it would appear that the plaintiff has been unfairly treated. That is not for the court to consider at this stage because, in the trial, if it were allowed to proceed, the defendants would deny many, if not all, of the allegations of the plaintiff. The court cannot decide a case such as this on the basis of sympathy for the plaintiff, but on the law as the legislature has intended it to be and the legislation which they have passed in pursuance thereof. In my view, the whole purpose of the legislation would be defeated if, in a situation such as this where the remuneration was calculated as a percentage of the sale price and conditional on the sale going through, the Act could be avoided by calling such services "consulting fees". If that were the case, then the protection that the legislature intended would be ineffective.

[ 54 ] In this case, the Sales Agreement is by its clear terms for “work in arranging for the sale of the house”. Although Ms. Ferraton’s affidavit outlines various other services she has allegedly performed for the defendant in the past to help with his mother, she clearly confirmed that this claim is based only on the steps taken and work done in contemplation of the sale of the Property. Ms. Ferraton acknowledges that any prior loans or financial assistance that she may have made in the past to Mr. Shular have been repaid in full.

[ 55 ] I conclude that Ms. Ferraton’s action relying on the Sales Agreement to seek payment for “other remuneration for services in connection with a trade in real estate” is prohibited by sections 4(1), and (2), and section 9 of the REBBA and is hence barred. Her action is therefore dismissed. There is a good public policy reason for finding that the REBBA applies to this case, to avoid exorbitant fees from being charged for assisting in a sale of a property.

[ 56 ] In my view, Ms. Ferraton is precluded from advancing any claim for any compensation once there is a finding that the REBBA applies. As such, she would be required to repay all the money that she has received.

[ 57 ] However, in his evidence, Mr. Shular did not seek repayment of the sum of $22,115.17 that he provided to Ms. Ferraton on December 24, 2008, nor did he seriously seek a reduction of this amount to reflect the fair market value of the services rendered. He testified that he thought this figure was fair and generous. His counsel did argue that the $20,000 was excessive compensation for the work performed and I agree with this assertion. However, no evidence was called as to what the service provided would be worth. Clearly it was much less than the sum provided. However, it did not appear to me that Mr. Shular was interested in reneging on the payment that he thought was fair in the circumstances. Therefore, Ms. Ferraton will be entitled to keep the payment in the amount of $22,115.17.

[ 58 ] She will be required to repay the sum of $17,954 that was garnished pursuant to the default judgment, less the amount of $2500 for costs awarded in her favour that remain unpaid. Judgment is granted therefore on the counterclaim to Mr. Shular in the amount of $15,454 payable by Ms. Ferraton.

The Unconscionability Argument

[ 59 ] In the alternative, Mr. Shular argues that the Sales Agreement is unconscionable and unenforceable as there was inequality in the position of the parties and the Sales Agreement was substantially unfair.

[ 60 ] Prima facie, contracts between parties must be respected and enforced by the courts, no matter how unfavourable to one side or another. The party seeking to illustrate that a bargain is unconscionable, bears the onus of proving that there was inequality in the position of the parties, and to prove that the bargain was substantially unfair.

[ 61 ] The classic statement about what constitutes unconscionability is found in the decision of Justice Schroeder in Mundinger v. Mundinger, 1968 250 (ON CA), [1969] 1 O.R. 606 (C.A.), at paragraph 6:

The governing principle applicable here was laid down by this Court in the oft-cited case of Vanzant v. Coates (1917), 1917 573 (ON CA), 40 O.L.R. 556, 39 D.L.R. 485. It was there held that the equitable rule is that if the donor is in a situation in which he is not a free agent and is not equal to protecting himself, a Court of Equity will protect him, not against his own folly or carelessness, but against his being taken advantage of by those in a position to do so because of their position. In that case the circumstances were the advanced age of the donor, her infirmity, her dependence on the donee; the position of influence occupied by the donee, her acts in procuring the drawing and execution of the deed; and the consequent complete change of a well-understood and defined purpose in reference to the disposition of the donor's property. It was held that in those circumstances the onus was on the plaintiff to prove by satisfactory evidence that the gift was a voluntary and deliberate act by a person mentally competent to know, and who did know, the nature and effect of the deed, and that it was not the result of undue influence. That onus had not been discharged; and it was therefore held to be unnecessary for the defendant to prove affirmatively that the influence possessed by the plaintiff had been unduly exercised.

[ 62 ] The law regulates contractual conduct between individuals through the imposition of three different standards: unconscionability, good faith, and the fiduciary standard. As Weiler, J.A. confirms in 978011 Ontario Ltd. v. Cornell Engineering Company Ltd., 2001 8522 (ON CA), [2001] 53 OR (3d) 783, at para. 33, the three standards are points on a continuum in which the law acknowledges a limitation on the principle of self-reliance and imposes an obligation to respect the interests of the other. The continuum is described by P.D. Finn, “The Fiduciary Principle” in T.G. Youdan, (ed.), Equity, Fiduciaries, and Trusts (Toronto: Carswell, 1989), 1 at 4:

“Unconscionability” accepts that one party is entitled as of course to act self-interestedly in his actions towards the other. Yet in deference to that other’s interests, it then proscribes excessively self-interested or exploitative conduct. “Good faith,” while permitting a party to act self-interestedly, nonetheless qualifies this by positively requiring that party, in his decision and action, to have regard to the legitimate interests therein of the other. The “fiduciary” standard for its part enjoins one party to act in the interests of the other--to act selflessly and with undivided loyalty. There is, in other words, a progression from the first to the third: from selfish behaviour to selfless behaviour. Much the most contentious of the trio is the second, “good faith.” It often goes unacknowledged. It does embody characteristics to be found in the other two.

[Footnotes omitted.]

[ 63 ] The defendant did not plead that the plaintiff owed him a fiduciary duty as a friend who was exercising a Power of Attorney, although it appears that in these circumstances, a fiduciary duty probably applies applying the three part test in Frame v. Smith, 1987 74 (SCC), [1987] 2 S.C.R. 99 at para. 60.

[ 64 ] The defendant argues that on any standard – unconscionability, good faith, or fiduciary duty – it is obvious that the Sales Agreement cannot stand as it is so obviously unconscionable in the circumstances of this case.

[ 65 ] I conclude without hesitation that the Sales Agreement was unconscionable, applying the lowest standard of any duty of care to the situation.

[ 66 ] First, Ms. Ferraton was well aware of Mr. Shular’s emotional frailties and history, and took advantage of his passivity and listless attitude towards the Property during a period of deep depression and binge drinking. As noted above, Ms. Ferraton is an imposing, no nonsense person, and she was well aware of Mr. Shular’s vulnerable state. Mr. Shular and Mr. Flicker confirm Mr. Shular’s situation. The parties were in radically unequal bargaining positions. The first branch of a test for improvidence has been established.

[ 67 ] Second, the bargain was obviously improvident. What appears to have begun as an act of friendship without any request or discussion of compensation, matured into a plan to profit from the situation and to take advantage of Mr. Shular’s fragile emotional state and apathy. The Sales Agreement gives Ms. Ferraton half of the sale proceeds of the Property, in the amount of $72,000 for perhaps at most 50 hours of work, excluding the packing of the contents of the Property that she had purchased for a very favourable price. To provide context for the unfairness, in the sale of the contents, Mr. Shular specifically excluded four paintings by his mother and a set of knives. This exclusion, although acknowledged by Mr. Pucyk, was not respected, and Mr. Shular, in his state, did nothing.

[ 68 ] As the two elements of unconscionability have been proved by the defendant, the onus shifts to the plaintiff to prove that in the signing of the Sales Agreement, Ms. Ferraton was scrupulously considerate of Mr. Shular’s interests. That onus has not been met.

[ 69 ] The Sales Agreement was only about protecting Ms. Ferraton. Ms. Ferraton had a Power of Attorney signed by Mr. Shular authorizing her to sell the Property. The existence of a Power of Attorney is an indicia of the obligations of Ms. Ferraton being that of a fiduciary: see McNabb Estate v. Mills, [1995] B.C.J. No. 893, at para. 47; Egli v. Egli, 2004 BCSC 529, at paras. 76-77; Mollot v. Mollot, 2006 ABQB 249, at paras. 138-145. When Ms. Ferraton found out she could not control the sale and the proceeds, she prepared the Sale Agreement. There was no discussion about what would be fair. Mr. Shular was presented with Ms. Ferraton’s document. Ms. Ferraton did not suggest that Mr. Shular obtain any independent legal advice for this important decision. There was no witness to the signing of the Sales Agreement.

[ 70 ] Therefore, the alternative argument advanced by the defence is also successful. As the Sales Agreement is unconscionable, it is unenforceable.

[ 71 ] However, Mr. Shular has acknowledged throughout that Ms. Ferraton is entitled to fair compensation for her services rendered based upon quantum meruit. For the reasons that I have outlined in my conclusions with respect to the REBBA, I conclude that the payment made by Mr. Shular in the amount of $22,115.17 amply and generously compensates Ms. Ferraton and Mr. Pucyk for any work performed, as well as for any expenses incurred.

[ 72 ] The balance of Ms. Ferraton’s claim is therefore dismissed, and she is required to repay to Mr. Shular the amount of $17,954.00 which was garnished pursuant to the default judgment, less the outstanding costs award owing to the plaintiff in the amount of $2500.00.

[ 73 ] At the conclusion of the trial, I heard the parties’ submissions as to costs. If there are any offers to settle that may impact upon a cost award, I invite counsel to so advise me in writing, within seven days of the release of this decision. Otherwise, I will fix costs based on the submissions previously made.

[ 74 ] I thank counsel for their diligence and attention to detail. This case does not involve large amounts of money, but it raises important issues of principle, and is obviously of very significant importance to the parties.

Justice J. Wilson

Released : November 26, 2012

COURT FILE NO.: CV-09-00373004-0000

DATE: 20121126

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MICHELLE FERRATON Plaintiff – and – ANTONY SHULAR Defendant

REASONS FOR JUDGMENT

J. Wilson J.

Released: November 26, 2012