ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-11-178
DATE: 2013/12/12
B E T W E E N:
T. L. Willaert Realty Ltd.
James Battin, for the Plaintiff (Respondent)
Plaintiff (Respondent)
- and -
Richard Mark Fody
Jamie Pereira for the Defendant (Appellant)
Defendant (Appellant)
HEARD: November 22, 2013
On Appeal from the Judgment of Deputy Judge J. D. Searle dated October 4, 2011
M. A. GARSON J.:
Introduction
[1] This is an appeal from the judgment of Deputy Judge Searle, dated October 4, 2011, in Small Claims Court, Woodstock, Ontario, awarding the respondent damages in the amount of $8995.50 plus GST, plus costs of $1225.00.
[2] The appellant submits the trial judge made various fact findings that were not supported by the evidence, misinterpreted various contractual provisions and misapplied a statutory provision.
Background
[3] On September 16, 2008, the appellant, Richard Fody, executed a listing agreement with the respondent, T. L. Willaert Realty Ltd., to list his property for sale, legally described as Mid Concession 2 NTR, Part Lot 21 being Part 2 on Reference Plan 37R-1195, Norfolk County (“the property”) at an initial asking price of $229,000.
[4] The listing agreement took the form of a standard Form 200 Ontario Real Estate Association listing agreement.
[5] Section 2 of the listing agreement describes the terms upon which a commission is payable to the respondent listing agent and provides in part:
COMMISSION: In consideration of the Listing Brokerage listing the Property, the Seller agrees to pay the Listing Brokerage a commission of 5.0% of the sale price of the Property or 4 1\2% if sold by Terry Willaert personally 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 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.
[6] A separate document entitled Vacant Land Data Input Form (“VLDIF”) was also executed at the time of the listing agreement and page 2 of that form in a box entitled “Realtor Remarks” reads as follows:
Desirable Treed Building site just minutes from Tillsonburg.
Special Condition: The Seller Reserves the right to a
hydro box for signage for Fody Auto Wreckers
Ltd. to be register [sic] on title and Located on the north
west corner of the property.
Robert Fuller: Seller’s Lawyer
Buyer to install well & septic system.
Note: No Pesticides on property for 4 years + 1- [sic]
[7] On page 1 of the VLDIF at line 7 next to the heading “Possession” is the phrase “15 days”.
[8] The listing agreement expired at 11:59 p.m. on April 30, 2009.
[9] The respondent presented the appellant with a number of offers including:
DATE RESULT
February 26, 2009 Offer for $125,000, closing date of March 20, 2009
February 27, 2009 Fody counters offer back at $199,900 and accepts closing date of longer than 15 days
February 28, 2009 Purchaser counters at $150,000. Fody does not agree to sign back the offer.
March 11, 2009 New purchaser signs Agreement of Purchase and Sale offering to purchase for $150,000. Fody refuses to meet with Willaert Realty.
March 12, 2009 New purchaser increases offer to $170,000. Fody refuses to meet with Terry Willaert to discuss offer.
March 20, 2009 Fody counters back at $195,000 and accepts later closing date.
March 30, 2009 Fody meet with Willaert Realty to scrutinize offer, potential purchaser agrees to extend offer for one day.
March 31, 2009 Fody informs Willaert Realty that he is holding out for $190,000 but is content with the closing date of June 30, 2009.
March 31, 2009 Potential purchaser increases offer to $184,000, Fody refuses to accept the agreement.
April 1 to April 7, 2009 Potential purchaser makes three additional offers ranging from $181,022.50 to $186,272.50 which Fody does not accept.
April 30, 2009 Potential purchaser offers $199,900 with a closing date of June 30, 2009; Offer emailed to Fody who does not respond.
[10] The April 30, 2009 offer from Benjamin Vink, who has made earlier offers, is a full asking price offer at $199,900.00.
[11] The offer was emailed on that same day to the appellant’s spouse, Sara, and was also sent to the appellant’s lawyer.
[12] A series of text messages were exchanged between the parties on April 30, 2009, with the first being from the respondent to the appellant at 2:53 p.m. stating in part: “Rich, I have emailed full price cash offer to Sara’s email. I have also faxed copy to your lawyer. Please give me a call at my office to discuss.”
[13] Five minutes later, at 2:58 p.m., the appellant replied “Full price listing or the $186?”
[14] One minute later at 2:59 p.m., the respondent replied: “Full price listing price.”
[15] Having heard nothing further all day from the appellant, the respondent sends a further text at 8:58 p.m., some six hours later, stating: “Will put a copy of the offer in your mailbox to review.”
[16] The respondent hears nothing from the appellant later that day, nor the following three days and some four days later sends a text at 9:12 a.m. to the appellant asking: “Where can we meet?”
[17] Having no reply to this text, some four hours later on the same day at 1:14 p.m., the respondent sends the following text: “Rich, as you know the offer on your property expires this evening at 11:59 p.m. Should you decide not to sign the offer, the commission will still be payable per the terms of your listing agreement. Please inform me as to how you wish to proceed.”
[18] The reply from the appellant at 2:22 p.m. reads: “I’m on course all day do not continue to harass or threaten me or Sara I will deal with you at the end of my course.”
[19] The respondent replied “perfect” some eight minutes later and that evening at 7:04 p.m. the appellant texts: “Be at your office at 8:15 p.m.”
[20] The offer was not accepted by the appellant.
Position of the Parties
[21] There are three essential arguments put forth by the appellant:
(i) The offer was never presented to him on the April 30, 2009 date;
(ii) Even if presented on a timely basis, the appellant submits the offer failed to include all of the conditions set forth in the VLDIF dealing with well and septic installation, possession, and the right of the appellant to a hydro box for signage;
(iii) There was a breach of a fiduciary duty owed to the appellant by not obtaining the appellant’s written consent to multiple representation.
[22] The respondent simply takes the position that Searle D.J. was correct in law and made no errors, and that his decision should be upheld on appeal.
[23] In a detailed and well reasoned decision, Searle J. found that the listing agreement was sufficient to hold the appellant vendor liable to pay the stated commission to the realtor on the basis of a qualifying offer to purchase that was presented on April 30, 2009.
Analysis and the Law
[24] As mentioned, the appellant argues that the offer was not presented during the listing period.
[25] It is difficult to appreciate any other way that Mr. Willaert could have presented this offer. The steps he took were:
(a) he notified Sara Jacob who was the appellant’s common-law spouse and had been an active contact person for the appellant in this matter on April 30, 2009;
(b) he faxed a copy of the offer to the appellant’s lawyer;
(c) he texted the appellant that he had an offer and later clarified that the offer was for the full listing price after the appellant sought clarification; and
d) he dropped off a copy of the offer to the appellant’s mailbox that evening.
[26] The appellant was unresponsive to all of these efforts and when the respondent sought a response in a polite and respectful manner, knowing the offer would expire, he was met with a terse, impolite and disrespectful reply alleging that he was somehow harassing or threatening the appellant. Nothing could be further from the truth.
[27] As Searle D.J. aptly points out at para. 11 of his decision:
The court has no doubt Fody was avoiding and otherwise frustrating Willaert because he decided not to sell unless he was able to purchase a farm. When the prospect of purchasing a farm evaporated late in April of 2009 he became inaccessible and nasty and refused to act in good faith when Willaert was obtaining and communicating offers that were near, then at, the listing price, something Willaert was obligated and entitled to do.
[28] This court is satisfied that the offer was presented to the appellant within the prescribed timelines required by the listing agreement.
[29] The appellant further argues that the terms specified in the VLDIF were not part of the April 30 offer and, therefore, did not make it capable of triggering the payout of the full commission. Searle D.J. addressed each item in paragraphs 30-34 as follows:
The defendant raises three ways in which the final offer by Vink did not comply with some of the terms of the agreement. Firstly, the closing date proposed by Vink was more than the 15 days in the agreement. Secondly, Vink did not agree to install a well and septic system. Thirdly, although Vink agreed to granting a right to have a commercial sign on the property his offer put the expense of registering that right on title on Fody.
As to the time for closing the court notes Fody made counter offers to both Coderre and Vink and in each case the closing date was more than 15 days after the date of the offer. Vink’s email of April 25, 2009 essentially offered to change the closing date if it was a problem. There was no response. The court finds Willaert earlier assured Fody the proposed closing date was flexible.
The subject land was bare land with an agricultural history and no residence and Fody’s house was not for sale so the risk of finding himself temporarily without a residence was not a risk. The property had been on the market for six months. At trial Fody gave no evidence to indicate this term was important other than as a defence to Willaert’s claim. The evidence gives no indication the closing date was objected to by Fody at the meeting late on May 04 or any other time before this proceeding was commenced.
As to Wink not offering to install a well and septic system Fody told the court he put that term in the agreement to avoid the risk of a purchaser closing then suing him over the absence of a well and septic system. Given the subject land was bare land with a solely agricultural history the court puts that risk at zero and the value of this term also at zero. Furthermore, in an atmosphere of good faith the realtor or lawyers for the parties could have resolved that simply. The evidence does not indicate the absence of this term was objected to by Fody at the May 04 meeting or any other time before this proceeding was commenced.
The listing agreement required any buyer to grant Fody the right to have a sign but was silent as to the cost of registration of the sign on title. Vink’s offer complied but sought to put the cost of such registration on the seller. Counsel assured the court the cost of registration would be approximately $70.00. Subsection 27(2) of the Courts of Justice Act R.S.O. 1990, c. C.43 as amended permits this court to accept that assurance as evidence and this court does so. It is an amazingly miniscule item in such a large transaction. When it came time for lawyers to close the transaction it would probably be an expense charged to Fody if he chose to register the grant. When asked why it was an important matter Fody testified it was important only because it would be an expense to him. As with the alleged non-compliance with terms this was never the subject of an objection by Fody until the pleadings were exchanged.
[30] I agree with the trial judge’s analysis. The phrase “15 days” alongside the heading “Possession” was not intended to be a required closing date but an indication that, as evidenced by the history of dealings during the listing period on many earlier occasions, the appellant was prepared to, and in fact did, acquiesce to a longer closing date. The period of 15 days was a minimum closing period.
[31] The VLDIF contained the words “Buyer to install well & septic system.” The fact the offer did not contain those words was of no consequence. The offer did not impose any obligation on the appellant to install those items. The property is bare agricultural land. It does not have a well or septic system. Silence meant that installation would have been the responsibility of the buyer. The appellant’s objective was achieved by the offer as presented.
[32] The April 30, 2009 offer expressly included the right of the appellant to a hydro box for signage. The VLDIF was silent as to who was to pay the cost of registration. The appellant cannot complain that the offer did not address that issue. In any event, a $70 registration fee represents a small and minute fraction of the transaction. This was not a precondition to the presentation of a valid or qualifying offer.
[33] The appellant further argues that the failure to obtain the appellant’s written consent to provide multiple representation to the buyer and the appellant seller, nullified the offer.
[34] As was pointed out at trial, this matter was brought before the Real Estate Council of Ontario on this point and there was no finding of fault on the part of the respondent relating to multiple representation. Further, the intent of this section is to protect a vulnerable buyer who is sharing information with the realtor that may expose them to price reductions if the potential purchaser became aware of same. By way of example, a fiscal crisis, a family crisis or a binding obligation to acquire another property may all make a seller vulnerable to price reductions.
[35] In this case, it is difficult to imagine how someone can breach a fiduciary duty to a seller yet bring them an offer for the full asking price. This court is asked by the appellant to speculate that the “best possible price” may have been greater than the asking price. There is no evidence on the record to support this claim. The evidence available to the court shows that the property was listed on September 6, 2008, was subject to a $30,000.00 price reduction on November 14, 2008 and the offer in question for the full listing price was presented some six and a half months later. That sort of history satisfies this court that the price offered was both the full listing price and the best possible price available to the appellant at the time.
[36] The appellant relies on the cases of Leading Investments Ltd. v. New Forest Investments Ltd. 1986 45 (SCC), [1986] 1 S.C.R. 70 and Bird v. Ireland, 2005 CarswellOnt 6945 (Div. Ct.) Searle D.J. speaks to both of those cases at paragraphs 44-57. This court agrees with how both of those cases were distinguished below:
[37] The appellant sets out the test on this appeal as set out by the Supreme Court of Canada in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. If the issues relates to the interpretation of the evidence as a whole, the test is “palpable and overriding error.” The standard of review on findings of law is correctness.
[38] The appellant relies on the case of ReMax Northland Realty v. Turcotte, 1992 CarswellOnt 3369 (Gen. Div.) for the proposition that the agent can only be entitled to the Commission if he satisfies all of the terms of the listing agreement. This case deals with an overholding clause which is not at issue here. Ultimately, Karam J. found in that case that the plaintiff was entitled to its commission and that it had fulfilled the terms of the listing agreement.
[39] Simply put, courts have recognized that listing agreements are binding contracts and as such, the general law relating to contracts and agency applies: Martel Commercial Realty Inc. v. Hamilton-Burlington and District Real Estate Board, [2005] O.J. No. 3016 (S.C.J.) and Team Realty Inc. v. Kanata 1075 March Road Project Inc., 2012 ONSC 1255 (S.C.J.).
[40] The law further provides that the vendor may still be liable for the commission even though the transaction does not close, provided the vendor knows or can be taken to know what the agent has undertaken to do to get the commission. See H. W. Kiebig & Co. v. Leading Investments Ltd., 1986 45 (SCC), [1986] 1 S.C.R. 70 and Kellner v. Strickland, [1997] B.C.J. No. 3265 (B.C.S.C.).
[41] The appellant further relies on the case of D.E.M. Corp. v. Skinner 2004 CarswellPEI 105 (S.C.) for the proposition that the respondent owed the appellant a duty of loyalty and he breached that duty with multiple representation. The facts in that case involve two competing offers, one for $137,000.00 and a reduced commission of 2.5% of the sale price, and the other for $145,000.00 with a 5% commission. The property was sold one month after the listing agreement expired.
[42] The court in D.E.M. Corp., supra, found at para. 31 that “In the case before the court, the evidence shoes that the plaintiff’s listing agent failed to communicate verbal offers made by Morrissey to the defendant or to put those verbal offers into written offers.”
[43] At paragraph 33, Campbell J. goes on further to find:
- In the case before the court, the listing agent seems to have gone to great lengths to promote or advance the Vos offer. Although Moase disclosed that this offer was from another of the Plaintiff’s agents, I agree with the Defendants that there is a perception that the listing agent’s loyalty was divided creating a conflict of interest. This perception is heightened by the listing agent's failure to communicate verbal offers from Morrissey to the vendors or to translate these offers into written offers to be submitted to the vendors for their consideration and by Moase’s refusal to give effect to the information from Raymond Skinner that Marilyn Skinner would not consent to the agreement.
[44] Further, at paragraph 35, Campbell J. states:
While it is an established fact that the listing agent disclosed to the vendor that the offer he put forward at 2.5% commission was from a co-worker, it does not in my mind satisfy the duty of loyalty that is inherent in a fiduciary relationship in that it does not address the issue as to why the Morrissey offers were not put forward.
[45] Although this court agrees that the relationship between a real estate agent and a vendor pursuant to a standard listing agreement creates a fiduciary duty, the facts in the case before this court disclose no indication whatsoever of any impropriety or breaching of that duty. As such, the D.E.M. Corp. case is clearly distinguishable and not relied upon by the court.
[46] Accordingly, this court is satisfied that:
i) a valid offer was presented to the appellant within the listing period. The appellant acted in bad faith and attempted to frustrate the efforts of the respondent in presenting the final order;
ii) the items set for in the VLDIF were either contained in the offer or not required;
iii) acceptance of the offer is not required. The listing agreement clearly contemplated payment of the commission upon presentation of an offer at the full listing price; and
iv) the terms of the listing agreement were clear and unambiguous. The underlying facts as found by the trial judge were based in the evidence and no error has been identified.
[47] For these reasons, the appeal is dismissed.
[48] The appellant shall pay costs to the respondent in the all-inclusive amount of $900 within 30 days.
“Justice M. A. Garson”
Justice M. A. Garson
Released: December 12, 2013
COURT FILE NO.: CV-11-178
DATE: 2013/12/12
Ontario
Superior court of justice
B E T W E E N:
T. L. Willaert Realty Ltd.
Plaintiff (Respondent)
– and –
Richard Mark Fody
Defendant (Appellant)
Reasons for Judgment
on Appeal
Garson J.
Date: December 12, 2013