Harvey Kalles Real Estate Ltd. v. Artadokht Haji-Seyed-Abolghasem-Tehrani, 2015 ONSC 4073
CITATION: Harvey Kalles Real Estate Ltd. v. Artadokht Haji-Seyed-Abolghasem-Tehrani, 2015 ONSC 4073
COURT FILE NO.: CV-12-469329
DATE: 20150624
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HARVEY KALLES REAL ESTATE LTD.
Plaintiff
– and –
ARTADOKHT HAJ-SEYED-ABOLGHASEM-TEHRANI, also known as ARTADOKHT TEHRANI
Defendant
Robert B. Macdonald, for the Plaintiff
Rolf Piehler, for the Defendant
HEARD: June 15, 16, 17, 2015
FAIETA, J.
REASONS FOR JUDGMENT
[1] The plaintiff claims that the defendant owes a commission of $68,506.25 pursuant to a Buyer Representation Agreement made on July 14, 2010 in respect of the purchase of a house on July 25, 2011. Amongst other things the defendant submits that the Buyer Representation Agreement was repudiated and that the claim is barred because the limitation period has passed.
[2] The plaintiff called three witnesses: Mohammad Reze Enshaie Behsaraie, Chantal Rosenthal and Michael Kalles. As well, the defendant and her sister Adish Tehrani-Nikouei testified. At trial, the defendant’s testimony was interpreted from Farsi into English by an interpreter.
FACTS
[3] The Plaintiff, Harvey Kalles Real Estate Ltd. (“Harvey Kalles”) is a company incorporated pursuant to the laws of Ontario. Harvey Kalles carries on business as a real estate brokerage in Ontario. Michael Kalles (“Michael”) is the President of Harvey Kalles. Mohammad Reze Enshaie Behsaraie (“Peyman”) and Chantal Rosenthal (“Chantal”) are licenced sales representatives for Harvey Kalles. Peyman testified that there are 300 sales representatives at Harvey Kalles.
[4] The defendant (“Arta”) resides in the City of Toronto. Adish Tehrani-Nikouei (“Adish”) is Arta’s sister and she also resides in the City of Toronto.
[5] Arta moved to Canada from Iran in 2006 with her husband and three children. In 2006, she joined her sister Adish who has lived in Canada since 1986. Arta bought a condominium located at 38 William Carson Crescent, Toronto (the “Condo”) a few months after she arrived in Canada using the services of Harvey Kalles and Peyman. Arta met Peyman through her brother-in-law. Legal title to the Condo was registered in Arta’s name on August 2, 2006.
[6] Peyman testified that within one year, Arta started looking for a bigger home to accommodate her family as they had decided to reside in Toronto. Arta testified that she did not start looking for a new home with Peyman until late 2009 or early 2010. Arta’s recollection was confirmed by Adish. Adish also testified that her son was interested in buying a house and that Peyman had shown him properties for sale prior to 2010. Arta testified that the interest rate on the mortgage that Peyman had arranged for 38 William Carson was very high and he had advised her in 2009 that rates had dropped and that she could afford a bigger house.
Buyer Representation Agreement #1
[7] Peyman testified that between 2007 and 2010 he showed Adish and/or Arta in excess of 125 properties. Peyman testified that he would regularly, if not on a daily basis, send emails to Adish with listings as properties that met her search criteria became available for sale. His point of contact was Adish rather than Arta, even if Arta was in Toronto, as Adish was more familiar with the Toronto real estate market.
[8] Peyman testified that in March 2010 he took Arta and Adish to 6 Peebles Avenue, Toronto (“6 Peebles”) which is located in the Bridle Path area of Toronto. It is located behind Adish’s house. Their main concern was that they could see into each other’s bedrooms.
[9] Peyman testified that he visited Adish at the Condo on July 14, 2010. One week earlier Arta had left Toronto with her children to spend the summer in Iran so that repairs to the Condo could be made prior to showing it for sale. Peyman testified that at this meeting the following occurred:
A) Adish gave Peyman a copy of a Power of Attorney dated September 14, 2006 (the “Power of Attorney”). The Power of Attorney appoints Adish as Arta’s attorney for property and authorizes her, without restriction or condition, to “…purchase, take possession of and to let, sell, manage and improve real estate, lands, buildings…” for her and in her name;
B) Adish signed a Listing Agreement for the sale of the Condo;
C) Adish signed a Buyer Representation Agreement;
D) Peyman took photographs of the interior of the Condo and obtained the keys for the Condo from Adish in order to leave with them the concierge so that other agents could show the unit to prospective purchasers.
[10] Peyman signed the Listing Agreement on behalf of Harvey Kalles. He testified that the Listing Agreement provides for a 4.5 percent commission to be paid to Harvey Kalles on the sale of the Condo rather than 5 percent because he understood that he would also be acting as their agent on the purchase of Arta’s new home.
[11] Peyman testified that he signed the Buyer Representation Agreement (“BRA #1”), being in Form 300 published by the Ontario Real Estate Association in 2010, on behalf of Harvey Kalles. Amongst other things it provides that:
Brokerage: Harvey Kalles Real Estate Ltd.
Buyer: Adish POA Arta
The Buyer hereby gives the Brokerage the exclusive and irrevocable authority to act as the Buyer’s agent commencing at 12:01 a.m. on the 14th day of July, 2010 until 11:59 p.m. on the 31 day of Dec, 2011…for the purpose of locating a real property meeting the following general description: Single Family Residence
Geographic Location: C04, C10, C12
Commission: In consideration of the Brokerage undertaking to assist the Buyer, the Buyer agrees to pay a 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 be paid a commission of 2.5% of the sale price of the property
Representation:
The Brokerage shall assist the Buyer in locating a real property of the general description indicated above and shall represent the Buyer in an endeavour to procure the acceptance of an agreement to purchase or lease such a property.
Referral of Properties:
The Buyer agrees that during the currency of this Buyer Representation Agreement that the Buyer will act in good faith and work exclusively with the Brokerage for the purchase or lease of a real property of the general description indicated above. The Buyer agrees that during the currency of this agreement, the Buyer shall advise the Brokerage immediately of any property of interest to the Buyer that comes to the Buyer’s attention from any source whatsoever, and all offers to purchase or lease submitted by the Buyer shall be submitted though the Brokerage to the seller. If the Buyer fails to advise the Brokerage of any property of interest to the Buyer that came to the Buyer’s attention during the currency of this Agreement and the Buyer arranges a valid offer to purchase or lease the property during the currency of this agreement or within the Holdover Period after expiration of this agreement, the Buyer agrees to pay the Brokerage the amount of commission set out above, payable within (5) days following the Brokerage’s written demand therefor.
THE BROKERAGE AGREES TO REPRESENT THE BUYER IN LOCATING A REAL PROPERTY OF THE GENERAL DESCRIPTION INDICATED ABOVE IN AN ENDEAVOUR TO OBTAIN THE ACCEPTANCE OF AN AGREEMENT TO PURCHASE OR LEASE A PROPERTY ON TERMS SATISFACTORY TO THE BUYER. [emphasis added]
[12] On cross-examination Peyman testified that chaos would ensue if a buyer were permitted to switch sales representatives within a brokerage without an agreement between the representatives regarding how any commission would be split. Michael testified that BRA #1 obliged Arta to “…work exclusively with Harvey Kalles Real Estate and more specifically with Peyman Enshaie.”
[13] Peyman testified that he sat next to Adish when she signed BRA #1 and that he reviewed its terms with her. BRA #1 created an agency relationship for the 18-month period from July 14, 2010 until December 31, 2011. Peyman testified that Adish insisted that BRA #1 be signed because she was concerned that, after all the work that Peyman had done to find them a new home, Arta’s husband might come from Iran and use another real estate sales representative to buy a property.
[14] Peyman testified that he told Adish that it was “safer” to have a Buyer Representation Agreement. On cross-examination Peyman explained why Arta, as the buyer, would be safer with a Buyer Representation Agreement as:
“…it obligates the real estate agent to actively look and show all the properties within their criteria…”
“I am obligated to show them all the properties and I am obligated to look actively for a property. I can’t just take a customer and decide I am going to show them this and I am not going to show them that. I am going to make them aware of this availability but I am not going to make them aware of the other availability. It binds the real estate agency and the agent as well.”
[15] Adish testified that she did not sign BRA #1. However on cross-examination, Adish acknowledged that her signature appears on BRA #1 although she was not aware that she had signed it. Adish only recalled that she signed the Listing Agreement. Arta testified that she did not authorize Adish to sign BRA #1.
[16] Arta had left one week earlier with her children to spend the summer in Iran to allow for repairs to be made to the Condo to get it ready for sale.
[17] Peyman’s evidence is that Chantal called Adish after the Listing Agreement to ask why she did not get the listing. Chantal was a valued client of a store owned by Adish. Peyman did not speak with Chantal about this issue. Chantal testified that she had no recollection of expressing disappointment to Adish about this matter.
[18] The Condo was sold pursuant to an Agreement of Purchase and Sale dated August 14, 2010 after an offer to purchase was “signed back.” Adish testified that Peyman had initialled acceptance of the changes to the offer to purchase made in the “sign back.” Peyman denied that he had initialled the changes. He testified that Adish initialled those changes but not in his presence.
[19] After returning from Iran in the summer of 2010, Arta felt under pressure because the Condo had been sold and she did not have a new house for her family could move into by November 30, 2010.
[20] Arta expressed a desire to visit 6 Peebles again. However, the property was no longer listed for sale. On September 24, 2010 Peyman contacted Mr. Anil Rastogi, the owner of the house, and arranged for the property to be shown. Arta and Adish saw the property in September 2010. Arta saw it a second time in September 2010 with her husband.
[21] Peyman and the owner of 6 Peebles exchanged emails but could not agree on a price even though the difference was only $40,000. The concern was that the property would need about $150,000 in renovations. Arta wanted Peyman to make a written offer but he refused to do so because he felt that their offer was too low. Arta told Peyman to make an offer as the owner of 6 Peebles might accept it. Peyman confirmed that he did not prepare or submit a written offer. He indicated his approach was to negotiate the price of the property verbally and then, if an agreement on price was reached, to prepare a written offer reflecting the verbally agreed upon price.
Buyer Representation Agreement #2
[22] Adish testified that Chantal was her friend and customer. She told Chantal that she trusted her and wanted her to help Arta find a home. They viewed several houses within a week. Arta liked a house located at 131 Yorkminster Road, Toronto. Chantal testified that Arta told her that she had not signed a Buyer Representation Agreement. This was confirmed by Arta. Arta testified that she was unaware that Adish had signed BRA #1. Chantal asked whether Arta was represented because it was her practice not to work with a client who was already bound by a Buyer Representation Agreement for three reasons: (1) it is not right to do so; (2) she would not get paid for her work; (3) she would not want to be in a conflict situation with any other agent including a colleague. She did not recall when she met Arta and Adish or whether they were together at that time. However, she did recall going to the Condo to get BRA #2 signed.
[23] Once Arta decided to make an offer on the property, she signed a Buyer Representation Agreement, dated October 13, 2010, with Chantal on behalf of Harvey Kalles (“BRA #2”). Like BRA #1, BRA #2 is in Form 300 published by the Ontario Real Estate Association in 2010. Amongst other things BRA #2 states:
The Buyer hereby warrants that the Buyer is not a party to a Buyer Representation Agreement with any other registered real estate brokerage for the purchase of lease of a real property of the general description indicated above. [emphasis added]
[24] BRA #2 gave Harvey Kalles exclusive authority to act as her agent from October 13, 2010 to December 1, 2010 solely in respect of 131 Yorkminster. Chantal testified that Arta told her that she was not a party to another Buyer Representation Agreement.
[25] Arta entered into an agreement to purchase 131 Yorkminster on October 19, 2010. The purchase was conditional upon a satisfactory inspection. The closing date for the purchase was November 30, 2010.
[26] On October 19, 2010 Peyman testified that he received a telephone call from Adish who told him that Arta had agreed to buy 131 Yorkminster using Chantal’s services. He said that Adish was compassionate. Peyman called Chantal. Chantal told Peyman that she did not know that BRA #1 existed, however she told Peyman that they could work out a commission-sharing arrangement. Peyman testified that he told Chantal that she would receive no commission, or perhaps a “small internal fee,” if the purchase of 131 Yorkminster closed. He contemplated offering Chantal a 25 percent referral fee.
[27] Adish testified that Chantal came to her home after the agreement to purchase 131 Yorkminster was signed. Adish said that Chantal told her that Peyman had threatened her with death. Adish called Peyman that night and pleaded with him to let Arta use Chantal. Adish testified that Peyman said that Arta was his customer and that Chantal could not do anything.
[28] Peyman sent the following email on October 20, 2010, at 1:30 a.m. to Michael. He testified that “client” means Adish:
I have an issue with Chantal Rosenthal which is outlined as follows.
I have been working with a client of mine (Arta Tehrani) for the last two to three years. She is one [of] my oldest clients sister. I purchased their Condo for them in 2006 and they wanted to upgrade to a bigger home. Every time we got close to purchasing a larger property an issue out of my control came up and we had to delay the process for a few months or so. They finally got everything together and decided to proceed, so I put their property on the market (215-38 William Carson Cres). Apparently Chantal is a friend of the sister. Upon listing of the property I received a phone call from my clients sister with certain discomfort because she received a phone call from Chantal requesting an explanation as to why they did not sign with her. I was asked to Chantal that the other sister was not aware of the issue to keep everything simple.
I continued and sold the property. After looking for a while they decided on a property listed by Robert Greenberg (150 Joicey) and I started the preliminary and verbal negotiation. My clients offer was a little less than reasonable and after discussing it with Robert and Andre I informed them that a deal cannot be achieved unless they show a little more flexibility. The same day I received another phone call from my clients sister that she was having a conversation with Chantal and she mentioned that she is a close friend of Robert and she feel[s] she can definitely do better than me if she had the chance. I was very upset and said no.
I emailed you and asked you to call me so I can file a complain[t] and ask her to stop interfering. My client’s sister called me back and I explained what I wanted to do. She asked me not to do that and out of respect for her and courtesy, I accepted but I explained what Chantal was doing is wrong and I did not appreciate it. I hope you remember that when you called me back I told you that I needed some direction on an issue and the problem is resolved.
I received a phone call from my client about three hours ago indicating she is very upset and confused and she did not want me to have any bad feelings towards her since the sister has signed an offer with Chantal for a property they have just seen. I called Chantal and did not get any straight answer and was told we can work something out.
I have a buyer agreement dated the day I signed their listing. She always knew I have been working with them and just continued interfering with no regards or respect for a colleague from the same office.
I hereby file an official complain and would like you to resolve the issue. Please advise me how I should proceed.
[29] Chantal testified that although she knows Robert Greenberg as a colleague at Harvey Kalles she had no recollection of telling Adish or Arta that she could bet a better price for the 150 Joicey property.
[30] Michael forwarded the above email to Chantal who testified that she provided the following reply to Michael later that day on October 20, 2010:
I have a conditional offer on a property from these buyer’s as well as a signed Buyer Agency for that property.
My friend told me a few weeks ago they were unhappy with Peyman’s performance. I asked if they are still working with him and they said no. They are very unsatisfied with his service. She asked me to help her sister because she has a Nov 30th closing on the Condo, and has three little children, and could I please help her.
I suggested to the sister of the Buyer that I call Peyman and that we work together as a team, and that I was willing to do all the work even. My client said no I don’t want that. My sister (the Buyer) doesn’t like him – she doesn’t want him. I asked if they signed a Buyer Agency with Peyman, and she said No. My understanding from the client is that Peyman didn’t want to work with me – I have just learned about this, this morning.
They also told me to check out a house with Robert Kroll – that they saw with Robert before it was listed. I showed them that house. My understanding is that Robert Kroll is also in touch with them through a friend. And has emailed them a Buyer agency form.
They told me also that they felt if they gave Peyman’s wife the mortgage business, that should be enough business for him and his family, considering he got the Condo listing from the sister, which he sold.
They insisted that I not approach Peyman to team up with him regarding the purchase of a home, after they told me that they wanted my help. They said. (sic) They didn’t want him involved.
I also bring to your attention that after many years at this company, I have always been open to partnering with other agents in the company. But I feel the client makes the ultimate decision, I believe it is very very important to behave in a professional manner and with dignity, not desperation when dealing with the public.
However, I do find that in this Business, that Client’s are free to work with any Agent they choose.
The client was also going to give me the Condo listing that Peyman got the listing for. I accepted this, as you know I never ever even discussed this loss with you or Peyman, as it is up to the client to decide who to use. This is a constant ongoing part of the Business, it is very very hard when a member of the public chooses a different agent for a transaction. However that is the basis for the business.
I will endeavour to bring this transaction to fruition, and act in the best interest of the client. As a member of the public they deserve proper representation under Agency contract.
[31] On October 21, 2010, at 1:44 p.m., a lawyer sent an email to Michael requesting that Harvey Kalles, Peyman and Chantal sign the following indemnity in favour for Arta and Adish:
In consideration of your entering into and proceeding to complete the above-captioned transaction [purchase of 131 Yorkminster Road, Toronto]…the undersigned hereby jointly and severally agree to indemnify you and hold you harmless of and from and against any and all claims…arising under or out of the issues which have arisen or may arise between two Buyer’s agents, PEYMAN ENSHAI and CHANTAL ROSENTHAL, both of HARVEY KALLES REAL ESTATE LTD BROKERS as to who is the lawfully authorized Buyer’s Agent in this above transaction and who is entitled to the real estate commission allocated to the Buyer’s Agent. The undersigned jointly and severally guarantee and warrant to you that only one Buyer’s Agent’s Commission will be paid as a result of this transaction and that you will not be held responsible for any additional funds or amounts of money over and above the Purchase Price specified in the Agreement, and any legitimate adjustments thereto.
[32] The Indemnity was never signed by Harvey Kalles, Peyman or Chantal. Michael testified that he would have never collected two commissions from a buyer in this situation.
[33] On October 22, 2010, the agreement to purchase 131 Yorkminster was cancelled by Arta. She exercised her right to do so, with Chantal’s recommendation, once an inspection revealed that the house would require significant repairs that might cost as much as $150,000.
[34] On October 23, 2010, Adish testified that she sent the following email to Michael:
I am writing to you in regards to an issue that have occurred recently regarding my change of realtor. I was previously dealing with Payman Enshai of your real estate agency, however, I have decided to go with Chantal Rosenthal at Harvey Kalles. Before Chantal started to work for me she has asked me if I signed a buyer’s agreement with anyone else. Since I have not, she was then able to help me out. I would like to continue working with Chantal if it is still possible, if not there is a full market of other available companies that would be more than glad to accommodate me.
[35] On October 24, 2010, at 8:23 p.m. Peyman testified that he sent the following email to Michael:
I’m very sorry for bothering you on a Sunday night but I like to keep you in the loop. I visited my client’s sister this afternoon with my wife to give her some documents that she requested and we worked out all our differences and we explained everything. About an hour after I received a phone call from Adish (Sister) asking me to cancel the buyer agency agreement. I told her I will discuss it with you and get back to her in a couple of days. She called me back and started threatening me and saying that she will get a lawyer and she has money and she will sue me because she was not aware of the contents of the agreement and she regrets not reading them prior to signing.
Please note that her suggestion prompted me to get her to sign it in the first place and also they wanted me to reduce the commission to 3 percent in case of dual agency and because of the purchase commission. She mentioned the buyers husband has a lot of friends and she does not want them to go with someone else. I told her that I have already agreed to release the buyer from all the responsibilities and this is just to protect me with other agents and brokers since so much time was put into this. She kept on calling me and I explained again and again that I will discuss it with you and work out something and I do not have authority to cancel it on my own.
I just received a very threatening call from her husband in Iran and he started with extreme profanity and threatened to hire someone to break my leg and make me leave the town. He said how can I do Real Estate if I’m disabled. I was shaking and hang up. He called me twice after with more threats and I called 911. My wife called Adish at the same time I was calling 911 and left a message. She called me back and started yelling and I told her I called 911. She said that Chantal is a friend of hers and if I press charges, She will call and say I assaulted her the night I called her to ask for explanation for the deal she made with my client. I just made a report with police and explained the whole thing and they will contact Adish and possibly press charges if it continues.
Again, Sorry for the trouble but I had no choice.
[36] On October 24, 2010 at 11:31 pm , Michael testified that he sent the following message to Peyman:
Sorry peyman that this situation escalated to this level.
Please keep me informed – have you spoken to Chantal to see if they contacted her.
I think you should tell the clients we will cancel buyers agency contract if they replace with a new contract with Chantal.
[37] Peyman testified that he delivered a photocopy of the Listing Agreement and BRA #1 to Adish at her store on October 24, 2010. Peyman testified that he “…wished them good luck and hopefully you can find something suitable very fast.”
[38] On October 25, 2010, at 12:27 a.m. Peyman responded to Michael:
Thanks Michael, I feel bad that you have to deal with this but believe me I bended backward to make them happy and tried my best to avoid confrontations but every time I accepted their offer they asked for something else. I think they have some alternate motive that they are not telling us. I will keep you posted. At this point I don’t want to cancel their agreement unless as per your instruction they replace it with another one for the same period. I don’t want to talk to Chantal directly because I think they are teaming up against me.
[39] On October 25, 2010, Adish emailed Michael as follows:
[40] Later on October 25, 2010, Michael responded to Adish’s email as follows:
[41] At 4:37 p.m. on October 25, 2010, Adish responded to Michael's email as follows:
[42] At 7:11 p.m. on October 25, 2010, Adish emailed Michael again, as follows:
[43] At 8:21 p.m. on October 25, 2010, Michael responded to Adish’s emails as follows:
[44] At 8:39 p.m. on October 25, 2010, Adish responded to Michael’s email[^1] as follows:
[45] In cross-examination Michael testified that he sent the following message to Adish on October 26, 2010 at 12:30 p.m.:
Chantal will arrange. All the best.
[46] Peyman’s evidence is that Michael wanted to deal with this dispute internally and to avoid upsetting the client and involving the Toronto Real Estate Board. Peyman testified that it was the role of Harvey Kalles to mediate this dispute. He felt that Michael would mediate rather than dictate the resolution of the dispute.
[47] Michael also testified that this dispute was an internal issue between Peyman and Chantal rather than a dispute between Harvey Kalles and the defendant. In order to resolve this internal dispute he spoke with Peyman and Chantal and recommended that they come to some form of compromise and come out as a united front to the clients. They came up with a formula as to how the commission would be split between the salespeople. He did not recall the formula. Michael believed that Chantal knew that she was to arrange for Arta to sign a new Buyer Representation Agreement. Michael did not recall having a discussion with Chantal regarding: 1) what arrangements Chantal had made to have a sign a new Buyer Representation Agreement; 2) Chantal advising that she was going to decline working with Arta. Michael did not recall being advised by Chantal that she had declined the opportunity to work with Arta nor did he recall when he learned that a new Buyer Representation Agreement had not been signed by Chantal and Arta.
[48] Michael testified that he recommended a new Buyer Representation Agreement with Chantal because “…if they [the clients] were as upset as they were to make those comments, my feeling was let’s just keep the contract with Kalles but change sales people. Maybe that would appease the buyer.”
[49] Michael testified that agents with Harvey Kalles do not have the authority to enter an agreement to cancel a Buyer Representation Agreement. Only Michael would have the authority to do so. Michael did not cancel BRA #1 because the request to have the Buyer Representation Agreement signed with Chantal never occurred so BRA #1 was kept in force. Michael testified that he was never contacted by Arta or anyone on her behalf again.
[50] Peyman testified that he was against Michael’s offer that Adish sign a new Buyer Representation Agreement with Chantal as he felt that he could work out a sharing agreement with Chantal in relation to BRA #1 and because he preferred the longer remaining 14-month term of BRA #1 as opposed to the six-month term offered by Michael. Peyman testified that Michael could not dictate that BRA #1 be cancelled.
[51] Neither Arta nor Adish on Arta’s behalf entered a further Buyer Representation Agreement with Harvey Kalles, Peyman or Chantal subsequent to the emails exchanged on October 25, 2010.
[52] Chantal testified that she did not show any further properties to Adish or Arta after the 131 Yorkminster purchase fell through. She did not sign a Buyer Representation Agreement with Arta or Adish for a six-month period as Michael had suggested. Chantal did not want to be involved in a “negative situation” given the serious accusations made by Adish and Peyman. Chantal testified that she has avoided Adish and Arta since this incident other than to be their customer. Chantal also explained that she was unable to work out a split in commissions with Peyman. She did not want to share her commission with Peyman on a 75/25 basis.
[53] Adish testified that Chantal came to her store after October 26, 2010. Chantal told Adish that she was scared of what had happened and that due to personal matters she was not going to work anymore. Chantal did not explain any further. Arta testified that she pleaded with Chantal to help her find a house because she was running out of time and she felt that she could not rely on Peyman to find her a house. Arta testified that Chantal told her that she was not working anymore because of a family problem.
[54] Peyman testified that he had no further contact with Arta or Adish after the discussions described in the above email.
[55] Adish testified that Peyman and Chantal “left us alone” after the events described above in late October 2010. Similarly, Arta stated that no one from Harvey Kalles, whether Michael, Chantal, Peyman, or any other agent, contacted her after the events of October 2010.
[56] Arta said that the fact that she had not been able to find and buy a new home had placed her under a lot of stress. She testified that her husband told her to rent an apartment until she could find a new home. Arta moved her family into an apartment after the sale of the Condo closed on November 30, 2010. Peyman testified that at the time of Condo closing he was told by the real estate agent representing the buyer of the Condo that Arta had rented an apartment at 38 William Carson Crescent, Toronto.
Buyer Representation Agreement #3
[57] The owner of 6 Peebles is Adish’s neighbour. Arta said that the owner told Adish that the house was going to be available for sale again.
[58] On April 27, 2011, Arta entered into a Buyer Representation Agreement with Remax Realtron Realty Inc. for the period April 27, 2011, to September 27, 2011. Arta had also used this brokerage’s services to rent the apartment referenced above in November 2010. Also on April 27, 2011, Arta entered an agreement to purchase 6 Peebles Avenue. The closing date for the purchase was July 25, 2011. On July 25, 2011, Arta and Kashi purchased 6 Peebles Avenue for $2,425,000.
[59] By letter dated November 28, 2012, Harvey Kalles, through counsel, made formal demand for payment of the amounts owing to it under the Buyer Representation Agreement dated July 4, 2010.
[60] No commission has been paid to Harvey Kalles in respect of the purchase of 6 Peebles.
Issues
[61] In its closing submissions, both oral and written, the defendant raises the following defences which I have re-stated as questions:
Did the defendant sign BRA #1?
Was BRA #1 superseded by BRA #2?
Was BRA #1 terminated as a result of the defendant’s repudiation of BRA #1?
Is the claim barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B?
Was BRA #1 terminated as a result of the plaintiff’s repudiation of the BRA #1?
Issue #1: Did the defendant sign BRA #1?
[62] The defendant did not personally sign BRA #1.
[63] The defendant’s sister, Adish, holds a Power of Attorney for property on behalf of the defendant. There are no conditions or restrictions associated with the power of attorney.
[64] On cross-examination Adish acknowledged that she signed BRA #1. However, Adish said that she did not know that she had signed BRA #1 nor was she aware that BRA #1 had an 18-month term that expired on December 31, 2011. She says all of this is despite the fact that above her signature reads the statement “THIS AGREEMENT HAS BEEN READ AND FULLY UNDERSTOOD BY ME AND I ACKNOWLEDGE THIS DATE I HAVE SIGNED UNDER SEAL AND HAVE RECEIVED A TRUE COPY OF THIS AGREEMENT.”
[65] Further, given that the defendant did not plead this defence (since until trial the defendant had denied that Adish signed BRA #1) nor make submissions at trial regarding why the defendant could take the position that the contract is unenforceable because Adish failed to read what she was signed, it is my view that this is not a matter that I should give any consideration.
[66] In any event the “…principle of general contract law [is] that where a party signs a document which he knows affects his legal rights, the party is bound by the document in the absence of fraud or misrepresentation, even though the party may not have read or understood the document.”[^2] Even if the defendant had advanced this defence, I would not have found that it had been made out as at trial there was no evidence of fraud or misrepresentation in respect of the execution of BRA #1.
[67] I accept Peyman’s evidence that he reduced the commission payable on the Listing Agreement by 0.5 percent at Adish’s request because she had agreed to enter a Buyer Representation Agreement with Harvey Kalles which would provide a further commission the purchase of a new home. Peyman was not cross-examined on this point nor was the reduced commission otherwise explained by the defendants.
[68] Accordingly, I conclude that Adish signed BRA #1 on the defendant’s behalf pursuant to the Power of Attorney, and therefore, Arta is a party to BRA #1.
Issue #2: Was BRA #1 superseded by BRA #2?
[69] The defendant submits that BRA #2 supersedes any prior Buyer Representation Agreement because of the following paragraph in BRA #2:
- Conflict or Discrepancy: If there is any conflict or discrepancy between any provision added to this Agreement 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. The Agreement, including any provisions added to this Agreement shall constitute the entire Agreement between the Buyer and the Brokerage. There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein.
[70] In my view, the above paragraph does not provide that BRA #2 terminates, replaces or otherwise affects any prior Buyer Representation Agreement, including any prior agreement with Harvey Kalles. Had that been the intention of the parties, then they would have used language that plainly and effectively expressed that intention.
Issue #3: Was BRA #1 terminated as a result of the defendant’s repudiation of BRA #1?
[71] In Guarantee Co. of North America v. Gordon Capital Corp.[^3] the Supreme Court of Canada stated:
Repudiation, by contrast, occurs “by words or conduct evincing an intention not to be bound by the contract. It was held by the Privy Council in Clausen v. Canada Timber & Lands, Ltd., 1923 CanLII 430 (UK JCPC), [1923] 4 D.L.R. 751], that such an intention may be evinced by a refusal to perform, even though the party refusing mistakenly thinks that he is exercising a contractual right” … . Contrary to rescission, which allows the rescinding party to treat the contract as if it were void ab initio, the effect of a repudiation depends on the election made by the non-repudiating party. If that party treats the contract as still being in full force and effect, the contract “remains in being for the future on both sides. Each (party) has a right to sue for damages for past or future breaches” (emphasis in original):
If, however, the non-repudiating party accepts the repudiation, the contract is terminated, and the parties are discharged from future obligations. Rights and obligations that have already matured are not extinguished. [emphasis added]
[72] In Brown v. Belleville (City)[^4] the Ontario Court of Appeal stated:
It appears to be settled law in Canada that where the innocent party to a repudiatory breach or an anticipatory repudiation wishes to be discharged from the contract, the election to disaffirm the contract must be clearly and unequivocally communicated to the repudiating party within a reasonable time. Communication of the election to disaffirm or terminate the contract may be accomplished directly, by either oral or written words, or may be inferred from the conduct of the innocent party in the particular circumstances of the case: McCamus, at pp. 659-61. [emphasis added]
[73] The defendant submits that:
…the events of late October 2010, resulting in the breakdown of the relationship between the parties and the withdrawal of services by Harvey Kalles, was effectively a repudiation of the purported BRA. Harvey Kalles did not insist on the continuing performance of the BRA dated July 14, 2010, withdrew its services and ceased communicating with Arta and Adish.
[74] The plaintiff submits that:
Adish’s emails with Mr. Kalles cannot be characterized as a “repudiation” of a contract. Adish never said or inferred that she and/or Arta did not intend to pay Harvey Kalles commission upon Arta’s purchase of a new home.
If anything, Adish, on Arta’s behalf, affirms her intention to pay Harvey Kalles a commission by stating that she would be willing to enter into a fresh Buyer Representation Agreement with a six (6) month term.
Even if Adish’s emails could be interpreted as constituting a repudiation of the Buyer Agency Agreement, Harvey Kalles did not accept that repudiation.
[75] The plaintiff’s submission suggests that the defendant’s obligations under BRA #1 are limited to paying a commission to the plaintiff upon entering an agreement to purchase a home. BRA #1 imposes many more obligations on a buyer. It obliges a buyer to: 1) work in good faith and work exclusively with the Brokerage; 2) advise the Brokerage immediately of any property of interest to the buyer that comes to the buyer’s attention from any source whatsoever; 3) submit all offers to purchase or lease through the Brokerage to the seller.
[76] There is ample evidence that the defendant, and her sister, Adish, who is her attorney for purposes of property and specifically in relation to BRA #1, evinced an intention, through her words or conduct, not to be bound by the various obligations under BRA #1, particularly in view of Michael’s evidence that Arta was required to work exclusively with Peyman under BRA #1:
A) Chantal told Michael on October 20, 2010, that Adish told her that: 1) she and Arta were unhappy with Peyman’s performance; 2) they were very unsatisfied with his service; 3) Arta did not want him involved with her search for a new home; 4) they were no longer working with him; 5) they felt that Peyman had received enough of their business through his wife’s mortgage business; 6) another agent had emailed them a buyer agency agreement;
B) Adish told Michael on October 23, 2010, that she was “previously dealing with Payman Enshai of your real estate agency however I have decided to go with Chantal Rosenthal at Harvey Kalles.” If Michael Kalles did not approve of that arrangement she told him that “...there is a full market of other available companies that would be more than glad to accommodate me.”
C) Peyman notified Michael on October 24, 2010, that Adish wanted to cancel BRA #1 and that she and her husband had threatened him if BRA #1 was not cancelled;
D) Michael understood that the defendant intended not to be bound by BRA #1 as he asked Adish “would you be more comfortable signing a buyer agency contract with Chantal for 6 months and cancel the buyer’s agency contract with Peyman?” and received a reply from Adish that she would be agreeable “as long as Payman was not involved in any way”;
E) In November 2010 Arta rented an apartment using the services of another realtor, rather than Harvey Kalles, so that she and her family would have somewhere to live after the sale of her Condo was completed on November 30, 2010.
[77] In my view, the plaintiff accepted the repudiation, not by oral or written words, but rather by its conduct as it did not assist the defendant in locating a home after October 25, 2010, nor have any other contact with her despite its contractual and regulatory obligations to do. In particular, section 19 of Code of Ethics, O. Reg. 580/05, requires:
If a brokerage has entered into a representation agreement with a buyer, a broker or salesperson who acts on behalf of the buyer pursuant to the agreement shall inform the buyer of properties that meet the buyer’s criteria without having any regard to the amount of commission or other remuneration, if any, to which the brokerage might be entitled.
[78] Accordingly, the effect of this repudiation and its acceptance is that BRA #1 was terminated and the parties were discharged from future obligations at the time that the defendant accepted the plaintiff’s repudiation. I find that such acceptance, and termination of BRA #1, occurred no later than November 30, 2010.
Issue #4: Is this claim barred by the [Limitations Act, 2002](https://www.canlii.org/en/on/laws/stat/so-2002-c-24-sch-b/latest/so-2002-c-24-sch-b.html)?
[79] The defendant submits that the plaintiff’s claim is barred under the Limitations Act, 2002 as it was not commenced within two years of the time that the defendant repudiated BRA #1. It is the defendant’s position that such repudiation occurred on October 25, 2010, as a result of emails that Adish sent to Michael which stated that Arta would not work with Peyman and which threatened that she would use another brokerage if she could not work with Chantal.
[80] Section 4 of the Limitations Act, 2002 creates a basic limitation period of two years following the discovery of a claim.
[81] Section 5(1) of the Limitation Act, 2002, defines “discovery” as follows:
5(1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss of damage had occurred,
(ii) that the injury loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and,
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and,
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
[82] If I am wrong in my conclusion that the plaintiff accepted the defendant’s repudiation of BRA #1, then, in my view, the limitation period for this action did not start until April 21, 2011, as it was not until that time that the payment of commission under BRA #1 fell due. Thus, the plaintiff did not suffer any damages until the defendant entered the agreement on April 21, 2011, to purchase 6 Peebles.[^5] Accordingly, in such circumstances this Claim is not barred by the Limitations Act, 2002 as this Claim was commenced on December 5, 2012.
Issue #5: Was BRA #1 terminated as a result of the plaintiff’s repudiation of BRA #1?
[83] An alternative argument advanced by the defendant in its closing submissions arose from questions that I posed to the plaintiff in its closing submission – namely whether the plaintiff, rather than the defendant, repudiated BRA #1 by failing to assist the defendant in locating a home after October 25, 2010, its fulfillment of its contractual and regulatory obligations to do so.
[84] In its reply submission the plaintiff submitted that the defendant did not allege in its Statement of Defence that the plaintiff had repudiated BRA #1 and therefore it could not be raised as a defence at trial nor be a basis for this Court’s decision.
[85] The plaintiff submitted that the law is that the defendant can only rely upon defences raised in her Statement of Defence.
[86] First, in my view the defendant’s position states the jurisprudence too narrowly. The issue is one of procedural fairness. The fact that a trial judge’s conclusion is not raised by a pleading is not determinative. In Labatt Brewing Co. v. NHL Enterprises Canada[^6] the Ontario Court of Appeal stated that it is procedurally unfair for a trial judge to reach a conclusion that “… is not anchored in the pleadings, evidence, positions or submissions of any of the parties.”
[87] In Sirisena v. Oakdale Village Homes Inc.[^7] the “battle had been joined” by the parties on the enforceability of an agreement to purchase a home and as such there was no unfairness in having the Court’s turn on a finding of anticipatory breach of contract that had not been pleaded. Similarly, in this case the battle had been joined on the enforceability of BRA #1 and, more specifically, on whether BRA#1 had been terminated.
[88] Perhaps most significantly, unlike Labatt and Sirisena, in this case the plaintiff was given an opportunity to make, and did make, submissions on the issue which it contends was not pleaded.
[89] In any event, it is my view that the issue of whether BRA #1 was terminated was pleaded. Amongst other things, the Statement of Defence alleges that BRA #1 “was terminated or breached in October 2010” and, alternatively that “…the Plaintiff agreed on or about October 25, 2010 to terminate…” BRA #1. In my view, the language of this pleading is broad enough to include the argument that the termination of BRA #1 resulted from the plaintiff’s repudiation of that contract.
[90] With respect to the merits of this defence, the defendant submitted that it was reasonable for Arta to conclude that the plaintiff had treated BRA #1 as at an end as she had not received the services that they were obliged to provide her under BRA #1. Nor was she even contacted by the plaintiff or any of its agents after October 25, 2010, for the purpose of assisting her to find a home.
[91] The plaintiff submits that the conduct of the defendant and Adish caused the break in the relationship between the plaintiff and the defendant and, therefore, Adish is not entitled to rely upon the failure of the plaintiff to assist the defendant with finding a home as required by BRA #1. Further, the plaintiff submitted that if the plaintiff repudiated BRA#1 that such repudiation was not communicated to the defendant.
[92] In my view, it is clear that the plaintiff failed to assist Arta in locating a home after October 25, 2010 as required by BRA #1. On October 24, 2010 Peyman wished Adish good luck in finding a home. A few days later Chantal told Adish and Arta that she would not act as Arta’s agent. No one from Harvey Kalles followed up to provide Arta with an agent who would deliver to her the services to which she was entitled under BRA #1.
[93] Harvey Kalles was contractually obliged under BRA #1 to actively look for properties within the criteria established by the defendant, to advise the defendant of such properties and to show the defendant those properties.
[94] If the plaintiff was treating itself as being bound by BRA #1, then it would also be subject to section 19 of Code of Ethics, O. Reg. 580/05, as quoted above.
[95] There is nothing in BRA #1 or the regulatory requirements that makes the obligations therein conditional upon the brokerage being comfortable with doing business with a buyer.
[96] In my view, the plaintiff’s conduct after October 25, 2010, specifically its failure to assist the defendant in locating a home, including its failure to contact the defendant and its failure to inform the defendant of properties for sale, clearly shows that it “evinced an intention not to be bound” by BRA #1.
[97] Further, election of the defendant to accept the repudiation was clearly and unequivocally communicated, whether by words or inferred by conduct, to Harvey Kalles within a reasonable time.
The failure of Arta or Adish to contact the plaintiff to arrange for another agent to assist them with finding a home for Arta was also conduct that clearly indicated that the defendant had accepted the repudiation. They had seen upwards of 100 homes with Peyman previously. After Chantal told Adish and Arta that she would not act as Arta’s agent they did not contact Michael to ask that he send another agent.
By the end of November, 2010 Peyman was aware that Arta had leased an apartment without his involvement contrary to BRA #1 which states that “…the Buyer will…work exclusively with the Brokerage for the purchase or lease of a real property…”
Further, Arta had failed to pay a commission to the plaintiff in respect of the lease of the apartment in November 2010 contrary to BRA #1 which states that “…[i]f 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 price of the property…”
[98] Accordingly, the effect of this repudiation and its acceptance is that BRA #1 was terminated and the parties were discharged from future obligations at the time that the defendant accepted the plaintiff’s repudiation. I find that such acceptance, and termination of BRA #1, occurred no later than November 30, 2010.
Conclusion
[99] For the reasons given above, I dismiss the plaintiff’s claim. The defendant shall deliver her written cost submissions within one week of today’s date. The plaintiff shall deliver its reply written cost submissions within two weeks of today’s date.
Mr. Justice M. Faieta
Released: June 24, 2015
CITATION: Harvey Kalles Real Estate Ltd. v. Artadokht Haji-Seyed-Abolghasem-Tehrani, 2015 ONSC 4073
COURT FILE NO.: CV-12-469329
DATE: 20150624
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HARVEY KALLES REAL ESTATE LTD.
Plaintiff
– and –
ARTADOKHT HAJ-SEYED-ABOLGHASEM-TEHRANI, also known as ARTADOKHT TEHRANI
Defendant
REASONS FOR JUDGMENT
Mr. Justice M. Faieta
Released: June 14, 2015
[^1]: The email addresses of the parties referenced in the emails described in paragraphs 39-44 have been redacted. [^2]: Karrol v. Silver Star Mountain Resorts Ltd. (1988), B.C.L.R. (2d) 160; Aviscar Inc. v. Muthukumaru, [2009] O.J. No. 2894, at para. 21. [^3]: 1999 CanLII 664 (SCC), [1999] 3 S.C.R. 423, at para. 40. [^4]: 2013 ONCA 148, 114 O.R. (3d) 561, at para. 45. [^5]: See Ali v. O-Two Technologies Inc., 2013 ONCA 733, 118 O.R. (3d) 321. [^6]: 2011 ONCA 511, 106 O.R. (3d) 677, at para. 3. [^7]: 2013 ONSC 1051 (Div. Ct.).