Court File and Parties

COURT FILE NO.: CV-13-477333 DATE: 20140226

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

SUTTON GROUP-ALL PRO REALTY LTD. Plaintiff

– and –

YEVGENIY KIM Defendant

Counsel: Howard Shankman, for the Plaintiff Helen Gladkykh, for the Defendant

HEARD: 27 January 2014

MEW J.:

REASONS FOR DECISION

(Motion for summary judgment pursuant to Rule 20.01)

[1] The plaintiff real estate broker claims to be owed a commission from the defendant arising from a Listing Agreement entered into by the parties on 21 March 2012 (the “Agreement”).

[2] The Agreement provides that the defendant, as “Seller” of a residential property located in Fenelon Falls (the “Property”), must pay the plaintiff a commission of 5% of the sale price of the Property.

[3] On its face, the term of the Agreement runs from an unspecified date in March 2012 (the “day” field on the standard form that was used has been left blank) until 30 October 2012.

[4] The Agreement also contains a 90-day “Holdover Period” provision. The plaintiff contends that this provision entitles it to payment of a commission in the event of the defendant selling the Property within 90 days of the expiration of the term of the Agreement to, as stated in the Agreement, “anyone who was introduced to the Property from any source whatsoever during the Listing Period or shown the Property during the Listing Period.”

[5] The defendant sold the Property on 1 November 2012 for $895,000. However, he refused to pay a commission to the plaintiff, as a result of which it commenced this proceeding claiming payment of $50,567.50 (i.e. 5% of the sale price plus tax).

[6] The defendant disputes his liability under the Agreement because:

a. The Agreement is not binding because it is incomplete due to the lack of a commencement date for the listing period and the lack of the seller’s initials next to a term regarding the listing price and inaccurate due to the insertion of an incorrect listing price;

b. At the time of execution of the Agreement he was not advised that the Agreement contained a holdover clause and, accordingly, the holdover clause should not be enforced;

c. He was not informed that the listing period exceeded six months, in breach of a mandatory formality required by law;

d. The purchaser of the Property was not introduced to the Property during the listing period.

[7] The plaintiff now moves for summary judgment for $50,567.50.

[8] The defendant opposes the motion, arguing that the parties have different recollections of the events giving rise to the claim and these differences give rise to issues of credibility that should be resolved at trial or, alternatively, that the plaintiff has failed to prove all of the necessary elements of its case.

The Availability of Summary Judgment

[9] In determining whether summary judgment is available, the threshold question is whether or not there is a genuine issue requiring a trial: Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 20.04(2). Under Hryniak v. Mauldin, 2014 SCC 7, at para. 49, no genuine issue requiring trial will exist

when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[10] To reach a fair and just determination, the summary judgment process must give “the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute”: Mauldin, at para. 50.

[11] The plaintiff submits that summary judgment should be granted on the record before the court, either without resort to the new powers provided under Rules 20.04(2.1) and (2.2) or, if necessary, through the exercise of the powers provided under Rule 20.04(2.1).

[12] The material parts of Rule 20.04 provide as follows:

(2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or

(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.

[13] To grant summary judgment, a motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him or her to draw the inferences necessary to make dispositive findings under Rule 20: Mauldin, at paras. 57, 94.

[14] In considering whether summary judgment is a proportionate, more expeditious and less expensive means to achieve a just result, it is necessary to take into account that the simplified procedure under Rule 76 applies to this case. In accordance with the simplified procedure, the affidavits filed on the motion have not been tested through cross-examination. However, a summary trial pursuant to Rule 76.12 is an option.

[15] One of the five cases that the Court of Appeal considered in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1, was an appeal from a decision of the Divisional Court in Parker v. Casalese, 2010 ONSC 5636, 99 C.L.R. (3d) 1. In Parker the plaintiffs had moved for summary judgment in an action governed by the simplified procedure. In Combined Air, at para. 254, the Court of Appeal found that simplified procedure cases were less likely than other matters to be suited to summary judgment:

Given that simplified procedure claims are generally for amounts of $100,000 or less, the rule is designed to get the parties to trial with a minimum of delay and costs. Thus, one of the key objectives of the simplified procedure rule is to limit the extent of pre-trial proceedings and to bring the parties to an early trial conducted pursuant to tailored rules. That is why discovery is restricted, cross- examination on affidavits and examination of witnesses on motions are not allowed, and the procedure at a summary trial is modified to reduce the length of the trial. No doubt, in appropriate cases, a motion for summary judgment in a Rule 76 action can be a useful tool to promote the efficient disposition of cases. However, it will often be the case that bringing a motion for summary judgment will conflict with the efficiency that can be achieved by simply following the abridged procedures in Rule 76.

[16] The Court of Appeal continued, at paras. 256-57:

First, summary judgment motions in simplified procedure actions should be discouraged where there is competing evidence from multiple witnesses, the evaluation of which would benefit from cross-examination, or where oral evidence is clearly needed to decide certain issues. Given that Rule 76 limits discoveries and prohibits cross-examination on affidavits and examinations of witnesses on motions, the test for granting summary judgment will generally not be met where there is significant conflicting evidence on issues confronting the motion judge. While the motion judge could order the hearing of limited oral evidence on the summary judgment motion under rule 20.04(2.2), in most cases where oral evidence is needed, the efficiency rationale reflected in the rule will indicate that the better course is to simply proceed to a speedy trial, whether an ordinary trial or a summary one: see rules 76.10(6) and 76.12.

Second, we are not saying that a motion for summary judgment should never be brought in a simplified procedure action. There will be cases where such a motion is appropriate and where the claim can be resolved by using the powers set out in rule 20.04 in a way that also serves the efficiency rationale in Rule 76. For example, in a document-driven case, or in a case where there is limited contested evidence, both the full appreciation test and the efficiency rationale may be served by granting summary judgment in a simplified procedure action.

[17] In Combined Air, the Court of Appeal ruled that the governing test on summary judgment motions is the “full appreciation test”. That approach has now been superseded by the Supreme Court of Canada’s decision in Mauldin.

[18] The considerations pertaining to simplified procedure cases outlined in Combined Air remain relevant, although their weight is diminished in light of the Supreme Court’s subsequent decision in Mauldin. A more robust approach to summary judgment is now required. Accordingly if, on a summary judgment motion, a judge is confident that he or she can find the necessary facts and apply the relevant legal principles on the basis of the record before the court, and the motion presents a proportionate, more expeditious and less expensive means to achieve a just result, summary judgment should be granted, even if the matter is governed by the simplified procedure.

[19] In the present case, while there are some facts in dispute, having regard to the principles articulated in Mauldin, and utilising the powers given to the court by Rule 20.04(2.1), the inferences necessary to make all findings of fact required to dispose of this matter can comfortably be drawn without the need for a trial.

The Agreement

[20] The defendant points to three features of the Agreement that, he argues, undermine its efficacy.

[21] The first is the lack of a complete commencement date. The Agreement consists of a pre-printed form developed by the Ontario Real Estate Association with spaces in which the details of a particular transaction can be manually inserted. As noted above, the space in which the day of the commencement date should have been inserted has been left blank.

[22] Nothing turns on this. The Agreement was signed on 21 March 2012 and a “Residential, Recreational, Land & Condo Listing Form” (the “Listing Form”), also signed by the parties, specifies a list date of 21 March 2012. Accordingly, that should be the commencement date.

[23] Second, there is a discrepancy between the numeric and alphabetic versions of the list price in the Agreement. The numeric version reads “(CDN$) 9,900,000”. The alphabetic version is “NINE HUNDRED THOUSAND NINE HUNDRED” dollars. The Listing Form states the price as $990,000.

[24] The discrepancy arises from a clerical error. No-one was misled by it. It is of no consequence.

[25] Third, and arguably more seriously, the Agreement was not initialled by the defendant beside the following narrative on the form:

Seller acknowledges that the length of the Listing Period is negotiable between the Seller and the Listing Brokerage.… [H]owever, in accordance with the Real Estate and Business Brokers Act (2002), if the Listing Period exceeds six months, the Listing Broker must obtain the Seller’s initials. [Emphasis in original.]

[26] The defendant says that not only did he not place his initials in the appropriate place, but the plaintiff’s agent, Peggy Laidlaw, failed to advise the defendant at the time of execution that she had inserted in the Agreement a listing period of more than six months. Nor, according to the defendant, did Ms. Laidlaw leave a copy of the signed Agreement with him. As a result, he says he assumed that the listing period expired six months after he signed the Agreement, i.e. on 21 September 2012.

[27] According to Ms. Laidlaw, the Agreement was signed in the defendant’s home on 21 March 2012. She recalls that the defendant said that he was familiar with the terms of the Agreement (this was the fourth time the Property had been listed since 2010) and that there was no need to specifically review each provision of the Agreement. She says that they only specifically discussed two components of the Agreement: the asking price and the term of the listing. In regard to the latter, she asserts that they agreed that the term would run until the end of October because “the end of October typically represents the end of the selling season” for properties in the area.

[28] The defendant signed several other documents on 21 March, including the Listing Form. A signed copy of the Agreement was left with the defendant. Ms. Laidlaw’s colleague, Laura Fisher, was also in attendance and confirms this evidence. Ms. Laidlaw says that, subsequently, on 29 March 2012, she sent the defendant copies of all of the listing documents, including the signed Agreement, by email. (A copy of the email to which copies of these documents were said to have been attached was included in the record.)

[29] Although the defendant protests that he was not given a copy of the Agreement at the time it was signed (or shortly afterwards), his evidence on this point should be rejected. Indeed, even if the documents were not, as the defendant claims, left with him on 21 March, then, according to Ms. Laidlaw, electronic copies were sent to him by email on 29 March. The defendant’s evidence that he first received a copy of the Agreement from the plaintiff’s lawyer in 2013 is not plausible when weighed against the evidence of Ms. Laidlaw and Ms. Fisher.

[30] When, as will be discussed below, a potential purchaser came on the scene in October 2012, the defendant contacted Ms. Laidlaw to let her know. He says that he did so to ask her whether she would be prepared to list the cottage that at that time was owned by the defendant’s prospective purchaser. He spoke to her, initially, on the telephone on 15 October 2012 and then met with her on 17 October. He claims to have confirmed with Ms. Laidlaw that she would not be entitled to any commission regarding the sale of the Property and says that Ms. Laidlaw never mentioned that the listing agreement was still valid and that she would be entitled to a commission. Yet he made no response to an email dated 24 October from Ms. Laidlaw in which she reminded him that the listing was expiring at the end of the month.

[31] Accordingly, the contemporaneous email traffic and the actions of the defendant also support the plaintiff’s position.

[32] It seems more likely than not that the defendant was in fact given a copy of the Agreement in March 2012. Hence he knew, or had the means of knowing, that Agreement provided that the listing period expired on 30 October 2012.

[33] Furthermore, the defendant would not have contacted Ms. Laidlaw about a prospective purchaser in October 2012 if he thought the listing period had already expired. In that regard, it is worth noting that one of the excuses subsequently given by the defendant for refusing to pay a commission to the plaintiff was that Ms. Laidlaw’s handling of the marketing of the Property had been negligent. It would be surprising for the defendant to be engaging with Ms. Laidlaw and seeking a valuation from her at the very time that he claims to have lost confidence in her. Thereafter he ignored Ms. Laidlaw’s reminder that the listing period (then seemingly extant) was about to expire.

[34] A final point is that of the three previous listings of the Property, two were for six-month periods whereas one was for a period exceeding seven months. The defendant was, accordingly, aware that not all listings were for six-month periods.

John and Linda Ramoutsakis

[35] Because, he said, he had not received a copy of the Agreement and, thus, did not know that the listing period ran until 30 October, the defendant assumed, “based on my previous experience and listings”, that the listing period expired in September. Accordingly, he says that at the beginning of October he started looking for potential buyers and advertised the Property on Kijiji and other free online websites.

[36] John Ramoutsakis saw an advertisement for the Property in October 2012 on the Kijiji website and contacted the defendant. This was apparently not the first time Mr. Ramoutsakis had taken an interest in the Property. In October 2011 he had seen a “For Sale” sign near the Property and had decided to see inside. He went to the door and a gentleman called John, who said he was a tenant at the Property, showed him around.

[37] Mr. Ramoutsakis did not pursue his interest in the Property further at that time. However, after seeing the Kijiji advertisement about the private sale of the Property, he contacted the defendant and asked him whether he would be willing to wait until Mr. Ramoutsakis had sold his own property. One of the options that Mr. Ramoutsakis and the defendant discussed was the exchange of their respective properties and the payment of the difference in values in cash (the defendant’s property being the more valuable property). According to Mr. Ramoutsakis, he told the defendant that he was not engaging any real estate agent. The defendant said that he had previously had a real estate agent, but the listing had expired in September and he was now dealing with the sale of the Property himself.

[38] On 17 October 2012 Linda and John Ramoutsakis met with the defendant and Ms. Laidlaw at the Ramoutsakis cottage. According to Mr. Ramoutsakis: “It was clear to everybody that the purpose of the meeting was solely to show Peggy our cottage and obtain her opinion about [the] potential value of our cottage”.

[39] In his affidavit, Mr. Ramoutsakis states that Ms. Laidlaw never mentioned to him that she still represented the defendant with respect to the sale of the Property. He also claims that Ms. Laidlaw never showed Mr. and Mrs. Ramoutsakis the Property.

[40] By contrast, Ms. Laidlaw says that after meeting with the defendant and Mr. and Mrs. Ramoutsakis at their cottage for the purpose of giving Mr. and Mrs. Ramoutsakis an opinion as to the approximate value of their property, she then showed the couple through the Property and reviewed the details of the listing, including the asking price.

[41] At around the same time, email traffic between the defendant and Ms. Laidlaw indicated that, initially at least, the defendant preferred a “straight sale” to Mr. and Mrs. Ramoutsakis. However, the possibility of a “trade” remained, and in that regard, Ms. Laidlaw offered to reduce her commission on the defendant’s sale to 3% if she got the listing for the defendant’s subsequent sale of the Ramoutsakis property.

[42] It is improbable that Mr. and Mrs. Ramoutsakis would have purchased the Property on 1 November 2012, having not viewed the Property again since Mr. Ramoutsakis did so October 2011.

[43] Furthermore, the contemporaneous evidence of what was going on at the time is the email traffic between Ms. Laidlaw and the defendant. It was only after the defendant had gone ahead with the sale of the Property to Linda Ramoutsakis and the concurrent purchase by him of the cottage owned by Mr. and Mrs. Ramoutsakis, that the defendant said or wrote anything to repudiate Ms. Laidlaw’s claim that she was entitled to be paid a commission in relation to the sale of the Property.

The Sale of the Property

[44] The defendant sold the Property to Linda Ramoutsakis on 1 November 2012. He sent an email to Ms. Laidlaw the same day, telling her that the deal with the Ramoutsakises had been done and that he (the defendant) would like to list the former Ramoutsakis cottage as soon as possible. The email continued: “… appreciate your help and don’t mind to pay for your time you spent with me and [John] and Linda last week. Let’s say[] $2000 cash. Sorry Peggy, no commission. I got this deal [myself].”

[45] By a letter on 2 November 2012 the plaintiff demanded payment of the commission. That letter repeated Ms. Laidlaw’s willingness to accept a reduced fee of 3% if paid within the next five days. No such payment was forthcoming and, according to the defendant, he then changed his mind about giving Ms. Laidlaw the listing for the former Ramoutsakis property and listed it with another real estate agent on 15 November 2012.

Issues

[46] Having determined that the evidentiary features of this case render it amenable to summary judgment and having already concluded that the Agreement is valid, the remaining issues to be determined are as follows:

a. What listing period was agreed to by the parties?

b. Was the holdover period under the Agreement effective when the Property was sold?

c. If so, was the purchaser of the Property introduced to the Property from any source whatsoever during the listing period or shown the Property during the listing period?

Discussion

Issue 1: The Listing Period

[47] On its face, the Agreement provides for a listing period of a little over seven months. As found above, the defendant knew or had the means to know this.

[48] The narrative in the Agreement suggests that the defendant’s initialling of the document to acknowledge a listing period of more than six months is a mandatory requirement of the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30 (the “Act”).

[49] Counsel were unable to direct me to an express provision in the Act to such effect. There is, however, a requirement in the s. 11(2) of the Code of Ethics, O. Reg. 580/05, which was enacted by regulation under the Act, that

[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).

[50] I was not advised of any statutory provision or judicial determination that a failure to strictly comply with the Code of Ethics would necessarily result in the listing period specified in the Agreement being ineffective.

[51] On an assessment of the evidence, the defendant knew full well what the term of the Agreement was. His evidence to the contrary should be rejected because it is not consistent with either his own actions at the time or the email traffic between the defendant and Ms. Laidlaw in which he failed (until after his transactions with the Ramoutsakises had been effected) to refute Ms. Laidlaw’s assertions that the listing period expired at the end of October and that a commission would be payable in respect of a sale of the Property to the Ramoutsakises.

[52] In all of the circumstances, the parties should be held to the bargain that they made. This included a listing period that ran from 21 March 2012 until 30 October 2012.

Issue 2: The Holdover Period

[53] It does appear to be common ground that Ms. Laidlaw and the defendant did not discuss the holdover clause at the time the Agreement was entered into.

[54] The holdover period narrative is part of the standard form listing agreement. The number of days – 90 – was filled in at the appropriate place on the form. The defendant does not dispute the holdover clause, other than to say that it was not explained to him.

[55] It is well established that a party cannot escape liability through carelessness in not reading through a document that he or she has signed: Marvco Color Research Ltd. v. Harris, 1982 63 (SCC), [1982] 2 S.C.R. 774.

[56] Furthermore, even if the listing period that the Agreement specified was ineffective, and was, as the defendant claims he assumed, limited to six months, the fact remains that he holdover clause applies for 90 days after the expiration of the listing period, and the Property was sold well within this time frame even if the Agreement expired in September.

[57] The holdover clause should be enforced.

Issue 3: Introduction or Showing of Property

[58] The defendant argues that Mr. and Mrs. Ramoutsakis were “introduced to the Property” in October 2011, when Mr. Ramoutsakis was shown around the Property by the defendant’s tenant. Furthermore, he submits that Ms. Laidlaw never enquired about who had previously viewed the Property.

[59] It has been said that “introduction” is not a term of art or technical word but, rather, a word in common usage that should be given its ordinary and accepted meaning. Dictionary definitions for the word “introduction” carry the connotation of “initial” or “first” presentation: Terry Martel Real Estate Ltd. v. Lovette Investments Ltd. (1981), 1981 1659 (ON CA), 32 O.R. (2d) 790 (C.A.), at p. 793. Because Mr. and Mrs. Ramoutsakis first visited and viewed the Property in October 2011, they were introduced to the Property at that time, and not during the listing period.

[60] That does not, however, end the matter. The holdover clause applies to sales to buyers who were “shown the Property during the Listing Period” as well. The term “show” also should be given its ordinary and accepted meaning. Counsel are in agreement that the phrase “shown the Property during the Listing Period” implies a showing conducted by the listing real estate agent. Given the finding that Mr. and Mrs. Ramoutsakis viewed the Property in October 2012, i.e. shortly before purchasing it, and having accepted the evidence of Ms. Laidlaw that she showed Mr. and Mrs. Ramoutsakis around the Property on 17 October 2012, it follows that the Ramoutsakises were “shown” the Property by a listing real estate agent during the listing period.

[61] The sale of the Property to Mrs. Ramoutsakis on 1 November 2012, two days after the listing period expired, therefore engages the holdover clause and entitles the plaintiff to its 5% commission.

Conclusion and Disposition

[62] The listing period did not expire until 30 October 2012. During the listing period the plaintiff’s sales person, Ms. Laidlaw, showed the Property to Mr. and Mrs. Ramoutsakis. When, on 1 November 2012 and within the holdover period, Mrs. Ramoutsakis purchased the Property, a commission became payable by the defendant to the plaintiff pursuant to the Agreement.

[63] The defendant’s behaviour immediately after he sold the Property validates these conclusions. He told Ms. Laidlaw that she should not get a commission because he had “got” the Ramoutsakis sale himself. He did not at the time suggest that the Agreement did not apply. He offered her $2,000 in cash “for your time”. When the plaintiff insisted on being paid the agreed-upon commission, the defendant looked for a way out. But his evidence and that of Mr. Ramoutsakis does not measure up when weighed against the other evidence in the record.

[64] Because the evidentiary and legal issues can be resolved at this stage and granting summary judgment is consistent with the principles articulated in Mauldin, the plaintiff shall have judgment for $50,567.50 plus applicable pre-judgment interest from 1 November 2012 to the date of this order.

[65] I have considered the bill of costs submitted on behalf of the plaintiff and find it to be reasonable. The plaintiff shall therefore be entitled to costs on a partial indemnity scale fixed at $8,750.22 (inclusive of disbursements and applicable taxes).

MEW J.

Released: 26 February 2014

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

SUTTON GROUP-ALL PRO REALTY LTD. Plaintiff

– and –

YEVGENIY KIM Defendant

REASONS FOR DECISION

(Motion for summary judgment pursuant to Rule 20.01)

MEW J.

Released: 26 February 2014