ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 02-CV-238650-CM4
DATE: 20130411
BETWEEN:
Ariston Realty Corp.
Plaintiff
– and –
Elcarim Inc., Elcarim E Legna Inc., and Elaine Wai Mascall
Defendants
Bryan B. Skolnik, for the Plaintiff
Ralph Cuervo-Lorens, for the Defendants and Plaintiffs by Counterclaim
Elcarim Inc., Elcarim E Legna Inc., and Elaine Wai Mascall
Plaintiffs by Counterclaim
– and –
Ariston Realty Corp. and Anthony Philip Natale
Defendants by Counterclaim
Aaron Postelnik & Aly Virani for the Defendants by Counterclaim
HEARD: November 28, 29, December 3, 4, 5, 6, 2012 and January 4, 2013
REASONS FOR JUDGMENT
Madam Justice D.A. Wilson
[1] This is a claim by the Plaintiff for commission allegedly due and payable on the sale of a commercial property located at 1947-1997 Bloor Street West in Toronto pursuant to a listing agreement entered into with the corporate Defendants. Punitive damages are also claimed, although no submissions were made by counsel on this ground of relief. The Plaintiff Ariston Realty Corp. (“Ariston”) is a licensed real estate brokerage firm carrying on business in Ontario and the Defendant by Counterclaim Anthony Philip Natale (“Natale”) is a commercial real estate broker who has worked at Ariston since 1995 and is one of the principals.
[2] The corporate Defendants have amalgamated and are known as Elcarim Inc. (“Elcarim”), with the Defendant Elaine Mascall (“Mascall”) being the sole officer, director and directing mind of Elcarim. The Defendants deny that any monies are due and owing, pleading that no sale was effected during the course of the listing agreement. By way of counterclaim, damages are claimed against Ariston and Natale for breach of fiduciary duty and negligence, payment of $18,000.00 allegedly paid to Natale by Mascall, and payment of $255,193.00 allegedly paid by the Defendant Elcarim and/or Mascall in related litigation. It is alleged that $10,000.00 of the $18,000.00 figure claimed was in the form of a loan mady by Mascall to Natale which was not repaid.
I. Background
[3] Natale has worked selling commercial real estate since 1970. He met Mascall in 1996 when she contacted him about a vacant property that he had as a listing located at 1947-1997 Bloor Street West (“the Bloor St. property”). With the involvement of Natale, the property was sold to Mascall. A few months later, on January 15, 1997, Mascall signed a listing agreement for Ariston to sell the property, with commission to be paid at 5% of the sale price. The listing agreement was to expire July 15, 1997, and Mascall hoped to make a large profit from the sale. The listing expired without the property being sold.
[4] Natale was involved as the broker on the sale by Mascall of a property located at 2117 Bloor Street West on an agreement of purchase and sale entered into in June 1998. Ariston received payment of commission in the amount of $41,600.00 from Mascall for that sale.
[5] On August 24, 1998, Mascall signed a further agreement to list the Bloor St. property for sale with Ariston. The offering price was $3,500,000.00; the listing agreement was to expire on March 30, 1999, and contained a clause that the broker would receive a 5% commission on the sale price. That listing agreement was cancelled on consent pursuant to a signed cancellation of MLS listing dated October 22, 1998.
[6] Another listing agreement for the Bloor St. property was entered into February 10, 1999, and expired August 30, 1999. This agreement had a listing price of $2,999,000.00 and provided for the payment of 5% commission “on completion of any sale … effected during the currency of this agreement from any source whatsoever or on any sale … effected within six months after the expiry of this agreement with any party to whom you or your representatives or co-operating brokers have introduced my said property during the term of this agreement”.
[7] The Defendant Mascall alleges there was a verbal agreement between her and Natale which was entered into while they were at a conference in Las Vegas. It is her position that they agreed to cancel the listing agreement; Natale disputes this and insists there was never any discussion about cancelling the listing agreement.
[8] An agreement of purchase and sale was entered into between the purchaser, Tender Holdings Ltd. (“Tender Holdings”), and Mascall, dated June 2, 1999, for the sum of $2,350,000.00. This document confirms that Ariston was the broker representing both parties in the transaction and provided for payment of 5% of the sale price on closing. This offer was conditional for six months. In September 1999, Tender Holdings and Elcarim signed a mutual release.
[9] According to the listing agreement, it expired August 30, 1999. A further offer was received from M. Development Corp. in the sum of $2,300,000.00 on September 21, 1999. The offer from M. Development Corp. was not accepted by Mascall.
[10] In early October 1999, a company called Context Development Inc. (“Context”) expressed interest in the property and sent a letter of intent. An agreement of purchase and sale was executed December 16, 1999, with a closing date of December 30, 2001. The purchase price was $2,250,000.00 and included a provision which was amended by Mascall to read as follows: “The Vendor and the Purchaser acknowledge and agree that there has been a real estate agent involved in introducing the Vendor and the Purchaser and shall be compensated by Vendor.” Other changes to the agreement were made by Bob Aaron, the solicitor who was advising Mascall on the transaction.
[11] The agreement was conditional on a number of terms. Context wished to build condominiums on the land and therefore, had to make an application to the Ontario Municipal Board (“OMB”) for re-zoning as the land was vacant. Context had a concern that its request for increased density would not be successful. In September 2000, Howard Cohen (“Cohen”), the principal of Context, sent a fax to Mascall noting that obtaining approval of the additional coverage was more costly and time consuming than anticipated and he asked that the purchase price be lowered if the OMB approved less density than was requested.
[12] There was an initial meeting to discuss this proposal which was attended by Natale and Mascall. A further meeting took place in October 2000, which was referred to as “the business card meeting” (Exhibit 1, Tab 49). During the later meeting, Mascall alleges, there was an agreement to pay $32.50 per square foot of coverage approved for building by the OMB. She testified that she wrote on a business card the particulars of the amendment to the agreement concerning price.
[13] The OMB approved the request of Context, releasing their decision in January 2001. Elcarim took the position that the purchase price was $2,505,193.00 based on the “business card meeting” while Context claimed the purchase price was as originally agreed and reflected in the agreement of purchase and sale, $2,250,000.00.
[14] Given the dispute concerning the price, an application was brought by Context seeking the remedy of specific performance. The application eventually resolved by way of a consent order that the transaction would close for the price of $2,250,000.00, with the balance of $255,193.00 being paid into the lawyer’s trust account pending resolution or further consent.
[15] In the application, Natale swore an affidavit in support of the position of Elcarim (Exhibit 1, Tab 68) dated May 14, 2002, and deposed that he was the agent who introduced Context to Mascall and did other work in furtherance of getting the deal closed. The transaction closed on April 30, 2002.
[16] On May 2, 2002, Ariston sent an invoice to Mascall in the sum of $120,375.00 for its commission on the sale. A further copy of the invoice was sent to Mascall’s solicitor in the application after Natale swore the affidavit May 14, 2002. By letter dated May 17, 2002, Mascall’s counsel advised that “[t]he sales transaction you have referred to is currently the subject of litigation…. The commission issue has been deferred until after the action has been settled or otherwise disposed of.”
[17] The Plaintiff retained Mr. Skolnik who sent a series of letters requesting payment of the commission. Ultimately, the Statement of Claim in this action was issued November 4, 2002. After the transaction closed, contamination was discovered at the property and further litigation was commenced by Context against numerous parties. The litigation brought by Context against Elcarim was resolved in 2008 and Mascall released the $255,193.00 that had been held in trust from the sale of Bloor St. property back to Context.
[18] This action proceeded to trial.
(Full decision text continues exactly as in the source, including all numbered paragraphs through [80], concluding with:)
[79] There shall be judgment for the Plaintiff against the Defendants for the sum of $120,375.00 for unpaid commission, together with interest. The counterclaim is dismissed.
[80] If the parties cannot agree on costs, I may be contacted concerning arrangements for submissions on this issue.
D.A. Wilson J.
Released: April 11, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ariston Realty Corp.
Plaintiff
– and –
Elcarim Inc., Elcarim E Legna Inc., and Elaine Wai Mascall
Defendants
Elcarim Inc., Elcarim E Legna Inc., and Elaine Wai Mascall
Plaintiffs by Counterclaim
– and –
Ariston Realty Corp. and Anthony Philip Natale
Defendants by Counterclaim
REASONS FOR JUDGMENT
D. A. Wilson J.
Released: April 11, 2013