COURT FILE NO.: CV-19-00617274 & CV-19-00622149
DATE: 20210420
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Sutton Group-Admiral realty inc. and pavlo antonenko
Applicants/Respondent on Cross-Application
- and -
ganna taborovska
Respondent/
Applicant on Cross-Application
Matthew J. Kim, for the Applicants/ Respondent on Cross-Application
Vladimira Ivanov, for the Respondent/ Applicant on Cross-Application
HEARD at Toronto: November 16 and 17, December 14, 2020
Reasons for judgment
DAVIES J.
A. Overview
[1] Pavlo Antonenko is a real estate agent with Sutton Group-Admiral Realty. He worked with Tetiana Taborovska and Anatoliy Taborovsky for more than a year to find a home in the Greater Toronto Area for their daughter, Ganna Taborovska.[^1] On November 12, 2018, Tetiana and Anatoliy decided to make an offer on a property in Mississauga. Tetiana and Anatoliy live in Kiev so the offer was made in Ganna’s name to avoid the Non-Resident Speculation Tax. Ganna signed the Agreement of Purchase and Sale (“APS”). Ganna also signed a Buyer’s Representation Agreement (“BRA”) that entitled Mr. Antonenko to a 2.5 percent commission on the Mississauga property and any single-family home she bought in the Greater Toronto Area between November 12, 2018 and March 11, 2019.
[2] Ganna’s offer on the Mississauga property was rejected.
[3] On November 22, 2018, just ten days after signing the BRA with Mr. Antonenko, Ganna put an offer on a home in Toronto through a different real estate agent. Ganna’s offer on the Toronto property was accepted and the deal closed on January 4, 2019.
[4] Mr. Antonenko now brings an application for an order requiring Ganna to pay him a 2.5 percent commission on the Toronto property. Ganna brought a responding application for a declaration that the BRA she signed on November 12, 2018 is void and unenforceable.
[5] Mr. Antonenko brought a summary judgment motion, which was heard on February 19, 2020. I ordered a trial on three discrete factual issues related to the signing of the BRA. On November 16 and 17, 2020, I heard from Mr. Antonenko, Tetiana, Anatoliy and Ganna. Tetiana and Anatoliy testified from Kiev with the assistance of a Russian interpreter. Ganna and Mr. Antonenko testified in English.
[6] Ganna admits she signed the BRA on November 12, 2018, which gave Mr. Antonenko exclusive authority to act as her agent for four months. She also admits that she bought a property in Toronto ten days later with another agent. Mr. Antonenko is, therefore, entitled to a 2.5 percent commission on the Toronto property unless the November 12, 2018 BRA is not enforceable.
[7] Ganna raises the defence of non est factum. The non est factum defence has three elements and the burden is on Ganna to prove each element on a balance of probabilities. First, she must prove that she was mistaken about the nature of the BRA: Marvco Colour Research Ltd. v. Harris, 1982 CanLII 63 (SCC), [1982] 2 S.C.R. 774, at 784. Second, she must prove that her mistake as to the nature of the BRA was the result of a misrepresentation by Mr. Antonenko. Finally, she must prove that she was not careless in signing the BRA: Bulut v. Carter, 2014 ONCA 424, at para. 18; Spiridakis v. Li, 2020 ONSC 2173, at para. 50. If Ganna proves each element of the defence, the BRA was void ab initio and Mr. Antonenko is not entitled to a commission on the Toronto property: Marvco, at 778.
[8] For the reasons that follow, I find that Ganna has established each element of the defence of non est factum on a balance of probabilities. I find that the November 12, 2018 BRA is void. Mr. Antonenko’s application is dismissed and Ganna’s application is granted.
B. Uncontested Facts
[9] Before analyzing each element of Ganna’s defence, I will set out the facts that are not in dispute to put the contested facts in context.
[10] Mr. Antonenko started working with Tetiana and Anatoliy in 2016 or 2017. Tetiana and Anatoliy live in Ukraine but visit in Toronto regularly. Mr. Antonenko sent them listing of properties that might interest them. Tetiana and Anatoliy would choose the properties they wanted to see and Mr. Antonenko would arrange viewings when Tetiana and Anatoliy were in Canada. Ganna was not involved in her parents’ search for a property and she only met Mr. Antonenko briefly on one occasion.
[11] Mr. Antonenko sent the listing for the Mississauga property to Tetiana and Anatoliy in October 2018. The property was listed for $2.25 million. Tetiana and Anatoliy were not initially interested in the Mississauga property because it needed extensive repairs and renovations. However, they reconsidered because they liked the location. Mr. Antonenko arranged for a contractor to visit the property with Tetiana and Anatoliy on November 11, 2018 and prepare an estimate for the anticipated renovations.
[12] Mr. Antonenko never showed Ganna the Mississauga property or spoke to her about the property before he prepared the offer documents for her to sign on November 12, 2018.
[13] Mr. Antonenko did not meet with Anatoliy, Tetiana or Ganna in person on November 12, 2018. All their communications that day were by phone or email. Mr. Antonenko’s cell phone records show nine calls to or from Anatoliy on November 12, 2018:
| Time | Duration |
|---|---|
| 12:58 p.m. | 17 minutes |
| 1:39 p.m. | 9 minutes |
| 4:01 p.m. | 2 minutes |
| 4:16 p.m. | 2 minutes |
| 6:13 p.m. | 4 minutes |
| 7:41 p.m. | 1 minute |
| 8:28 p.m. | 61 minutes |
| 10:11 p.m. | 13 minutes |
| 10:25 p.m. | 4 minutes |
[14] Mr. Antonenko sent the contractor’s estimate to Anatoliy by email at 3:35 p.m. on November 12, 2018. At 6:12 p.m., Mr. Antonenko sent a 19-page document to Anatoliy by email, containing the draft APS and the BRA. The purchase price on the draft APS was $2.1 million with a deposit of $105,000. The proposed closing date was December 4, 2018. The 19-page document also contained a Confirmation of Co-operation and Representation form, a REALTOR Customer Relationship acknowledgment form, an Individual Identification Information Record and an Offer Summary.
[15] The APS, which is a six-page standard form document, was the first document in the 19-page package sent to Anatoliy. The BRA, which is a three-page standard form document, was the third document in the package, starting on page 9.
[16] Mr. Antonenko did not ask Tetiana or Anatoliy to sign a BRA before November 12, 2018. Nor did he discuss a BRA with them before that day.
[17] The owners of the Mississauga property were going to start considering offers at 8:00 p.m. on November 12, 2018. Mr. Antonenko was told the sellers were expecting an offer from another prospective buyer.
[18] Mr. Antonenko and Anatoliy gave different evidence about when Anatoliy and Tetiana made the decision to put an offer in on the Mississauga property. Mr. Antonenko testified that the decision was made on November 11, 2018. Anatoliy testified that the decision was not made until after his call with Mr. Antonenko at 8:28 p.m. on November 12, 2018. In my view, nothing turns on the timing of the decision and they could both be telling the truth. I accept that after meeting with the contractor at the Mississauga property on November 11, 2018, Tetiana and Anatoliy decided that they would make an offer if the estimate for the renovations was reasonable. I also accept Mr. Antonenko’s evidence that he and Anatoliy discussed the possible terms of an offer, including the purchase price and closing date, during the afternoon of November 12, 2018 and that he prepared the draft offer documents based on those discussions. However, I also accept Anatoliy’s evidence that he and Tetiana did not make the final decision to submit the offer until shortly after 10:00 p.m. on November 12, 2017.
[19] At 10:21 p.m. on November 12, 2018, Ganna sent the executed documents, including the APS and the BRA, to Mr. Antonenko by email. No changes or amendments had been made to the APS before Ganna signed it.
[20] On November 22, 2018, Ganna put an offer on a single-family home in Toronto for $3.0 million through a different real estate agent. Ganna’s offer on the Toronto property was accepted and the deal closed on January 4, 2019.
C. Non est factum defence
[21] To avoid liability for the 2.5 percent commission owing to Mr. Antonenko on the Toronto property under the November 12, 2018 BRA, Ms. Taborovska must prove the following on a balance of probabilities:
a. She was mistaken about the nature and character of the BRA;
b. Her mistake about the nature of the BRA was the result of a misrepresentation by Mr. Antonenko; and
c. She was not careless when she signed the BRA.
[22] The parties agree that the BRA was first discussed during the call at 8:28 p.m. on November 12, 2018. The viability of Ganna’s non est factum defence turns largely on what was discussed and who participated in that call, which lasted just over an hour. I heard two conflicting accounts of the 8:28 p.m. call. On the one hand, Mr. Antonenko testified that Anatoliy and Ganna were both involved in the call. He testified he explained BRA to both Anatoliy and Ganna in detail in Russian. On the other hand, Tetiana, Anatoliy and Ganna testified that Ganna was not involved in the 8:28 p.m. call. Anatoliy testified that Mr. Antonenko only explained the first few pages of the 19-page document to him in detail. He testified that Mr. Antonenko then told him the documents all relate to the Mississauga property. Anatoliy says that Mr. Antonenko never told him that they would have to pay him a 2.5 percent commission if they bought a different home through another agent within the next four months.
[23] If I accept Mr. Antonenko’s evidence that Ganna participated in the call and that he fully explained the BRA to her, Ganna’s non est factum defence would fail because she would be unable to prove that she misunderstood the nature of the BRA because of a misrepresentation by Mr. Antonenko.
[24] If, however, I accept Anatoliy’s evidence that Mr. Antonenko did not explain the exclusivity provision of the BRA and if I find that constitutes a fundamental misrepresentation of the nature of the BRA, the first two elements of Ganna’s defence would be made out. I would still have to consider whether Ganna was careless in relying on the information provided by her father and signing the BRA without reading it.
i. Was Ganna mistaken about the nature of the BRA and was her mistake the product of a misrepresentation by Mr. Antonenko?
[25] The central factual issue in relation to the first two elements of the non est factum defence is whether Mr. Antonenko explained the essential nature of the BRA to Ganna or Anatoliy before she signed it on November 12, 2018. The answer to this question turns on my assessment of the credibility and reliability of the evidence I heard about the phone call at 8:28 p.m. that evening.
[26] Mr. Antonenko testified that he translated the BRA into Russian for Anatoliy and Ganna and explained every paragraph of it to them during the 8:28 p.m. call. As set out above, if I accept his evidence on this point, Ganna’s non est factum defence would fail. However, I do not find Mr. Antonenko’s evidence that he translated and fully explained the BRA to Anatoliy and Ganna credible for several reasons.
[27] First, I find that Mr. Antonenko minimized the amount of time he spent discussing the contractor’s estimate with Anatoliy during the 8:28 p.m. call and exaggerated the amount of time they spent reviewing the offer documents.
[28] Mr. Antonenko acknowledged that Anatoliy was concerned about the scope and cost of the renovations that would be needed if they bought the Mississauga property. That is why Mr. Antonenko arranged for a contractor to view the property with Tetiana and Anatoliy and prepare an estimate for the work. Mr. Antonenko agreed that he and Anatoliy spent time on November 12, 2018 discussing the anticipated cost of the renovations and its impact on the offer they might make. However, Mr. Antonenko testified that those discussions were earlier in the day and they did not talk about the estimate during the 8:28 p.m. call. I do not find this evidence credible.
[29] Mr. Antonenko did not send the estimate to Anatoliy until 3:35 p.m. on November 12, 2018. Tetiana, Anatoliy and Ganna were not at home at that time. Ganna printed the estimate (and the offer documents) for Anatoliy when they got home around 6 p.m. or 7 p.m. The first opportunity Anatoliy had to meaningfully discuss the estimate with Mr. Antonenko was during their 8:28 p.m. call. Given Anatoliy’s concerns about the renovations, it is more likely than not that Mr. Antonenko and Anatoliy discussed the quote in some detail during that call. I am concerned that Mr. Antonenko testified that they did not discuss the estimate during the 8:28 p.m. call to maximize the amount of time he would have had to translate the offer documents for Anatoliy. In my view, this undermines the credibility of his evidence about that nature of that call.
[30] Second, I find that Mr. Antonenko exaggerated the extent to which he translated the offer documents with Anatoliy.
[31] Anatoliy speaks Russian and testified through an interpreter. He also speaks some English. Anatoliy has experience signing contracts in his professional capacity in Ukraine. He admitted that he is very careful when he signs contracts related to his business but relies on legal counsel to assist him. Anatoliy testified that he could not read the offer documents for the Mississauga property and had to rely on Mr. Antonenko to explain them to him in Russian. I accept Anatoliy’s evidence on this point.
[32] At trial, Mr. Antonenko testified that he went through each page of the offer documents with Anatoliy and Ganna one by one. He testified he translated almost every paragraph in the documents into Russian for Anatoliy and Ganna. He testified that he translated most of the paragraphs word for word but explained some paragraphs in more general terms. During cross-examination on his affidavit, Mr. Antonenko testified that he explained every paragraph of the offer and BRA to Anatoliy and Ganna in Russian.
[33] Ganna also speaks Russian but is proficient in English. Mr. Antonenko also testified that Ganna did not need him to translate the BRA. Nonetheless, he decided to translate it for her because it was an important document. According to Mr. Antonenko, Ganna asked about the commission and he explained to her that the sellers of the Mississauga property would pay his commission if her offer was accepted but she would be required to pay him a 2.5 percent commission if she bought any other property with another agent. Mr. Antonenko says that he also explained to Anatoliy and Ganna, in Russian, that the BRA had a five-month term.[^2]
[34] The BRA also had a hold-over provision that says Ganna would be liable to pay Mr. Antonenko a 2.5 percent commission on any APS she entered into “within 90 days after the expiration of this Agreement” if the property was shown to her during the term of the BRA. Mr. Antonenko testified this is a normal term of any BRA. He also testified he explained the hold-over provision to Ganna and Anatoliy and he was sure they understood what it meant.
[35] During cross-examination, Mr. Antonenko was asked to explain and translate parts of the BRA. For example, he was asked to translate or explain the indemnification clause in the BRA. He was unable to translate the indemnification clause but he correctly explained that it meant that if something was wrong with the property, he was not responsible. When pushed, Mr. Antonenko admitted that he did not explain the indemnification provision of the BRA to Anatoliy or Ganna. Ultimately, Mr. Antonenko agreed that he only remembers explaining the 2.5 percent commission and the five-month term to Anatoliy and Ganna. This directly contradicts his testimony that he explained the ASP and BRA to Anatoliy and Ganna paragraph by paragraph. It also contradicts his evidence that he explained the holdover period to Anatoliy and Ganna.
[36] During his testimony, Mr. Antonenko was also unable to translate or explain parts of the APS, including the Planning Act provision and the clause dealing with conflicts between the standard for agreement and added provisions. When it was suggested to Mr. Antonenko that his evidence about explaining the documents to Anatoliy and Ganna paragraph by paragraph, word for word was not true, Mr. Antonenko admitted that he could not translate the document on the spot but said he spent half a day translating the documents before speaking to Anatoliy and Ganna on November 12, 2018. He testified that he made notes of the translations so he could go through the documents with them. I do not accept his evidence on this point.
[37] Mr. Antonenko did not mention in either of his affidavits that he spent time preparing a translation of the documents before speaking to Anatoliy and Ganna or that he made notes to help with the translation. The most important factual issue in this case is whether Mr. Antonenko accurately explained the terms of the BRA to Ganna. Had Mr. Antonenko spent half a day translating the documents in preparation for his conversation with Anatoliy and Ganna that would have been a very important fact to include in his affidavits. In my view, Mr. Antonenko gave this evidence in an effort to explain an obvious problem with his evidence, namely that he appeared incapable of explaining or translating the documents he said he had explained to Anatoliy in Russian paragraph by paragraph. This significantly undermines the credibility of Mr. Antonenko’s evidence.
[38] Third, I find that Mr. Antonenko embellished Ganna’s role in the 8:28 p.m. call during his testimony at trial. Mr. Antonenko testified at trial that Ganna helped him translate the documents and explain some words to Anatoliy. He testified he was thankful that Ganna was there to help with the translation “or else it would take me forever.” Mr. Antonenko did not mention that Ganna helped translate the documents for her father in either of the affidavits he filed in support of his application. His initial affidavit simply states that he spent approximately two hours on the phone with Anatoliy, Tetiana and Ganna reviewing the BRA and APS. In his supplementary affidavit, Mr. Antonenko says Ganna was “involved and participated in the telephone conversation, speaking and asking questions.” Again, the key factual issue in this case is whether Mr. Antonenko explained the BRA to Ganna. If Ganna helped him translate the BRA for her father that would be compelling evidence she understood the document. If that happened, it would have been included in his affidavit. In my view, Mr. Antonenko added this detail to bolster his position and I do not accept his evidence on this point.
[39] In fact, I accept Ganna’s evidence that she did not actively participate in the 8:28 p.m. call with Mr. Antonenko. Ganna testified that her father told her on November 12, 2018 that if they decided to put an offer on the Mississauga property, she would have to sign the documents later that day. She testified that her father spoke to Mr. Antonenko at 8:28 p.m. She testified that she heard her father talking with Mr. Antonenko about the renovation estimate and the offer documents but did not participate in the call. Ganna testified that she did not speak to Mr. Antonenko on November 12, 2018 until after she signed the offer documents.
[40] In my view, Ganna’s evidence that she was not involved in the 8:28 p.m. conversation is consistent with the evidence about who was making the decisions about the house purchase. There is no dispute that Ganna was not involved in any of the decisions about purchasing a house. Tetiana and Anatoliy decided which houses to see. Tetiana and Anatoliy visited properties with Mr. Antonenko and consulted with the contractor about the Mississauga property. Tetiana and Anatoliy decided whether to put an offer on the Mississauga property. Ganna never saw the Mississauga property before the offer was submitted and never spoke to Mr. Antonenko about the property before the offer documents were prepared. She knew her parents were discussing the Mississauga property among themselves and with Mr. Antonenko but was not involved in those discussions. Tetiana and Anatoliy were also going to pay the down payment on the Mississauga property for Ganna. Ganna was signing the documents to avoid the Non-Resident Speculation Tax. Ganna testified she was happy for her parents to buy whichever house they wanted because it was their money. She thought it would be a family home that she would live in.
[41] Given Ganna’s very limited role in the house purchase, I accept her evidence that she was not actively involved in the 8:28 p.m. call. I, therefore, find that Mr. Antonenko did not explain the BRA to Ganna directly. Any information Ganna received about the BRA came from her father.
[42] The final factual issue is what Mr. Antonenko said to Anatoliy about the BRA during the 8:28 p.m. call.
[43] Anatoliy says that once they discussed the renovation estimate and agreed on the offer price, he and Mr. Antonenko went through the offer documents. Anatoliy testified that the translation was taking a very long time and Mr. Antonenko was not able to translate parts of the document. Anatoliy testified that they got through two or three pages of the documents before 10:00 p.m. At that point, Mr. Antonenko told him that Ganna needed to sign the documents if they wanted to submit the offer. Anatoliy says Mr. Antonenko then told him all the documents were for the offer on the Mississauga property. According to Anatoliy, Mr. Antonenko also said that the documents were standard forms used for real estate transactions in Canada and would protect them as the buyer. Anatoliy says Mr. Antonenko never told him the BRA required them to work with him exclusively for four months.
[44] Mr. Antonenko admits that he was not able to explain one paragraph of the APS dealing with the Family Law Act when he first reviewed the documents with Anatoliy. However, he denies ever telling Anatoliy the documents related to the purchase of the Mississauga property only or that they were for Anatoliy’s protection.
[45] I accept Anatoliy’s evidence that Mr. Antonenko told him the documents all related to the Mississauga property.
[46] Mr. Antonenko knew another offer was expected on the Mississauga property on November 12, 2018. The 8:00 p.m. offer deadline had already passed when he started discussing the documents with Anatoliy that evening. While I accept Mr. Antonenko’s evidence that the seller’s agent told him they could submit an offer late, there was still some pressure to submit an offer that evening if Tetiana and Anatoliy were interested in the property.
[47] I have already found that Mr. Antonenko had difficulty translating the documents into Russian for Anatoliy. I accept Anatoliy’s evidence that they only got through a few pages of the document during the 8:28 p.m. call. The handwritten notations on the offer documents support this finding.
[48] Anatoliy made two handwritten notations on the offer documents as he went through them with Mr. Antonenko. There is a question mark on page 2 of the APS beside the acronym HWT, which Mr. Antonenko explained referred to the hot water tank in the house. There is also a mark on page 4 of the APS beside the heading “Family Law Act.” Mr. Antonenko was not able to explain this paragraph to Anatoliy when they first went through the documents. This paragraph was important to Anatoliy because he wanted confirmation that Ganna’s ex-husband would not have any claim to the house if it was purchased in her name. Ganna and her husband had only recently separated. Mr. Antonenko phoned a colleague to ask about the Family Law Act paragraph after the 8:28 p.m. call ended. Mr. Antonenko finally explained that paragraph to Anatoliy during their call at 10:11 p.m., just before Ganna signed the documents.
[49] There are no handwritten notations on any page after the fourth page of the 19-page document Mr. Antonenko sent to Anatoliy. Given that Anatoliy was making notes on the document as he reviewed them with Mr. Antonenko, the fact that there are no notations after the fourth page suggests that they did not get much further than the fourth page when Mr. Antonenko was trying to translate the documents to Anatoliy. The BRA started on the ninth page of the package. There are no handwritten notations on that page. This supports my finding that they did not get to the BRA during the detailed review and translation of the documents during the 8:28 p.m. call.
[50] I, therefore, accept Anatoliy’s evidence that after spending a significant amount of time trying to translate the APS, Mr. Antonenko told him that Ganna needed to sign the documents if they wanted to submit an offer. While I find that Mr. Antonenko likely explained that the BRA entitled him to a 2.5 percent commission on the Mississauga property that would be paid by the seller, I do not think he explained that it also entitled him to a 2.5 percent commission on any single-family home they bought in the GTA for the next four months or during the holdover period.
[51] What transpired after Ganna bought the Toronto property also supports Anatoliy’s evidence that Mr. Antonenko did not explain that the BRA created an exclusive agency arrangement for four months. On January 30, 2019, Tetiana sent Mr. Antonenko a text message that said, “I wanted to let you now that in the beginning of the month we bought a house.” Mr. Antonenko was angry when he received that text. Mr. Antonenko called Tetiana and told her that they had signed an exclusivity agreement and were supposed to buy a property through him. Tetiana testified that she was shocked by what Mr. Antonenko said. After their conversation, Tetiana sent Mr. Antonenko a text message to apologize for how things had unfolded.
[52] There was no reason for Ganna to purchase the Toronto property with another agent if she and her parents understood the BRA she signed on November 12, 2018 entitled Mr. Antonenko to a 2.5 percent commission on that property. They could have submitted the offer on the Toronto home through Mr. Antonenko and avoided paying double commission. Tetiana and Anatoliy were not upset with Mr. Antonenko after the Mississauga offer was rejected. In fact, they intended to work with Mr. Antonenko in the future to find a home in Toronto for their son. By purchasing the Toronto property with another agent, they were essentially throwing away 2.5 percent of $3 million.
[53] There was also no reason for Tetiana to tell Mr. Antonenko that they bought a property with another agent if she and Anatoliy understood that this would trigger an obligation on Ganna’s part to pay Mr. Antonenko a 2.5 percent commission even though he was not involved in the transaction. The manner in which Mr. Antonenko found out that Ganna had purchased a property in Toronto supports Anatoliy’s evidence that Mr. Antonenko did not explain that he would be entitled to a commission on any property other than the Mississauga property.
[54] In summary, I do not accept Mr. Antonenko’s evidence that he translated and fully explained the BRA to Anatoliy and Ganna. I find that Ganna was not involved in the 8:28 p.m. call with Mr. Antonenko. I find that Mr. Antonenko tried to translate the offer documents for Anatoliy but it took too long. I find that Mr. Antonenko told Anatoliy that the documents were standard form documents used for all real estate deals in Ontario and they related to the Mississauga property only. I find that Anatoliy relayed this information to Ganna. I, therefore, find that Anatoliy and Ganna were mistaken about the meaning and scope of the BRA as a result of Mr. Antonenko’s misrepresentation.
ii. Did Mr. Antonenko misrepresent the fundamental nature of the BRA?
[55] Not every misrepresentation about the terms of a contract will satisfy the requirements of the non est factum defence. The defence is only available when a misrepresentation causes a party to sign a contract that is fundamentally different, radically different or totally different from what they thought they were signing. It is not enough that the defendant misunderstood the content of the agreement; Marvco, at 778; Royal Bank of Canada v. Gill (1988), 1988 CanLII 2970 (BC CA), 47 D.L.R. (4th) 466, at para. 22.
[56] Counsel for Mr. Antonenko argued that even if he told Anatoliy that the BRA related to the Mississauga property only, that would not constitute a fundamental misrepresentation about the nature of the agreement. Counsel argued that the BRA is fundamentally an agreement between the agent and his client about the payment of commission. Counsel argued that the length of the agreement and the nature of the properties to which it applies are not essential terms of the BRA that go to the nature of the agreement. Counsel argued that Anatoliy understood the BRA was about Mr. Antonenko’s commission and, therefore, he understood the nature and character of the BRA. Any misunderstanding about the other terms was a misunderstanding about its content, not its character. I disagree.
[57] An agreement that Mr. Antonenko would receive a 2.5 percent commission on the Mississauga property from the seller is fundamentally different than an agreement that Mr. Antonenko was entitled to a commission on any single-family dwelling Ganna bought during a four-month period (plus the holdover period) even if Mr. Antonenko was not involved in the transaction. Under the former agreement, Ganna is not required to pay Mr. Antonenko any commission because it would be paid by the seller. Under the later agreement, Ganna is obliged to pay Mr. Antonenko a commission even if he did not assist with the purchase of a home, and she would be required to pay Mr. Antonenko in addition to any commission she paid the agent who was involved. While both agreements deal with Mr. Antonenko’s commission, Ganna’s legal liability is radically different under the two agreements.
[58] I find on a balance of probabilities that Mr. Antonenko misrepresented the fundamental nature of the BRA to Anatoliy when he said that it related to the Mississauga property only. Anatoliy relayed this information to Ganna before she signed the documents. I, therefore, find that Ganna misunderstood the fundamental nature of the BRA and her misunderstanding was the result of Mr. Antonenko’s misrepresentation to Anatoliy.
iii. Was Ganna careless in signing the BRA on November 12, 2018?
[59] Ganna must also show that she was not careless in the manner she signed the BRA to establish the non est factum defence.
[60] If Anatoliy signed the BRA, I would have no difficulty finding that he was not careless in his efforts to understand the contract. He asked Mr. Antonenko to explain the documents to him in Russian. Mr. Antonenko tried to translate the documents but had difficulty doing so. Mr. Antonenko then explained the documents to Anatoliy in general terms. Anatoliy spoke limited English and was not able to read the documents himself. It was reasonable for Anatoliy to accept and rely on Mr. Antonenko’s explanation of the documents.
[61] I have already found that Mr. Antonenko did not explain to Anatoliy that he would be entitled to a 2.5 percent commission on any single-family home they bought in the GTA in the next four months and might be entitled to a commission on a home they bought during the 90-day hold over period. Rather, he told Anatoliy the documents all related to the Mississauga property and the BRA entitled him to a 2.5 percent commission on the Mississauga property that would be paid by the seller. Anatoliy took Mr. Antonenko’s word that the documents related only to the Mississauga property and were the standard agreement for their protection. He relayed this information to Ganna and told her to sign where Mr. Antonenko had put checkmarks on the documents.
[62] Ganna testified that she went through the documents quickly and signed where there was a checkmark. She testified that she did not read the document before she signed it, although her English was good enough that she was able to read it.
[63] Counsel for Mr. Antonenko argued that I should infer from the way Ganna signed the document that she did read the BRA and understood it. Ganna put her initials beside a section of the BRA that requires a signature only if the length of the agreement exceeds six months. She then crossed out her initials beside that clause. Counsel argued this suggests that Ganna read the BRA, understood the agreement was for only four months and then realized that she was not required to initial that section. In my view, that is not a reasonable inference from all the evidence.
[64] Ganna testified that she signed the BRA where she was not required to sign by mistake. She said that she noticed the checkmark at the bottom of the page indicating where she was supposed to sign after she had already initially in the wrong place. She then crossed out her initials where she was not supposed to sign and initialed the bottom of the page. I accept Ganna’s evidence that on this point.
[65] As set out above, Anatoliy was waiting for confirmation about the Family Law Act provisions of the APS before making a final decision about submitting the offer. Mr. Antonenko did not have an answer on that for Anatoliy until 10:11 p.m. Ganna sent the executed documents back to Mr. Antonenko ten minutes later. This timing supports Ganna’s evidence that she went through the 19-pages quickly and simply signed where Mr. Antonenko had indicated without reading the documents.
[66] The real issue is whether Ganna was careless by signing the documents based on her father’s description of the documents. As a general rule, a person who executes a document without taking the time to read it cannot later argue that she was mistaken as to its contents: Marvco, at 785; Royal Bank of Canada v. Poisson (1977), 1977 CanLII 1129 (ON SC), 26 O.R. (2d) 717 (Ont. H.C.), at 720. The rationale for this rule is that a party should not be able to rely on her own carelessness to avoid liability to an innocent party to the contract who acted in good faith. If, however, an individual takes reasonable steps to understand the nature and content of an agreement, they will not have been careless: B.D.B.C. v. Cavalon Inc., 2011 ONSC 7080, at para. 27.
[67] The availability and viability of the non est factum defence has been considered in other cases where, like here, one family member signs a contract based on representations made by another family member without reading the document. For example, in Marvco, the defendants signed a collateral security agreement to guarantee a loan for their daughter’s boyfriend so he could buy an interest in a business. Neither defendant asked any questions about nor read the agreement before signing it. They simply relied on their daughter’s boyfriend’s representations as to the nature of the agreement. The trial judge found that the defendants were careless in signing the document and, as a result, the non est factum defence was not available to them. The Supreme Court of Canada upheld that decision, finding that the defendants were barred from relying on the defence by reason of their carelessness. The Court explained the rationale for the rule as follows, at p. 785:
As between an innocent party (the appellant) and the respondents, the law must take into account the fact that the appellant was completely innocent of any negligence, carelessness or wrongdoing, whereas the respondents by their careless conduct have made it possible for the wrongdoers to inflict a loss. As between the appellant and the respondents, simple justice requires that the party, who by the application of reasonable care was in a position to avoid a loss to any of the parties, should bear any loss that results when the only alternative available to the courts would be to place the loss upon the innocent appellant.
The Court found that the defendants’ carelessness was understandable given their desire to help their daughter’s boyfriend with his commercial venture. However, the Court held that cause of their carelessness was not relevant to whether the non est factum defence was available to them.
[68] Similarly, in Poisson, the defendant signed a guarantee on a line of credit at her husband’s request. The defendant argued that she did not understand the true nature of the agreement she signed. The Court held that defendant “knew or had the opportunity to know” what she was signing and assumed the risk that she would be called on to pay the loan by signing the document. The Court also held that if someone chooses not to read the document or inform herself of its contents, that person bears the responsibility for doing so, not the person “who accepts the document in good faith.”
[69] In my view, the circumstances here are different than Marvco and Poisson for several reasons. First, this is not a case where Ganna was signing the BRA for the benefit of her father. That contract was for the sole benefit of Mr. Antonenko. Second, unlike Marvco and Poisson where the lenders were innocent parties who were acting on a signed agreement in good faith, I have already found that Mr. Antonenko misled Anatoliy and indirectly misled Ganna about the content of the BRA. Mr. Antonenko cannot, therefore, be considered an innocent party to the contract acting in good faith. Third, Mr. Antonenko, as a licensed real estate agent, had an obligation to explain the documents to his client. Mr. Antonenko never spoke to Ganna and never explained the BRA to her directly. This distinguish this case from Marvco and Poisson where the Court held that the lender did not have an obligation to ensure the guarantor of the loan received independent legal advice. Mr. Antonenko had an obligation to ensure Gann understood the documents he was asking her to sign. Having failed to do so, Mr. Antonenko cannot now try to enforce the terms of the BRA he did not explain.
[70] Finally, this is not a case where Ganna took no steps to understand the BRA. It is true that she did not read the BRA and did not participate actively in the conversation with Mr. Antonenko. However, she knew her father was reviewing the documents in detail with Mr. Antonenko. She knew Mr. Antonenko was translating parts of the documents into Russian for her father. While Ganna did not discuss the documents with Mr. Antonenko directly, she knew her father was exercising due diligence in his review of the documents with Mr. Antonenko. Unlike Marvco and Poisson where the signatory to the contract never spoke to a representative of the lender to get an explanation of the contract they were being asked to sign, Ganna received an explanation about the BRA from Mr. Antonenko through her father. In my view, it was reasonable for Ganna to rely on the information she received from Mr. Antonenko through her father as the basis of her understanding of the documents. I find that Ganna was not careless in signing the documents even though she did not read them.
D. Conclusion
[71] I am satisfied that Ganna has established each element of the non est factum defence on a balance of probabilities. The BRA she signed on November 12, 2018 is, therefore, void ab initio. Mr. Antonenko’s application is dismissed and Ganna’s cross-application is granted
[72] I encourage the parties to settle the issue of costs. If they are unable to reach an agreement, Ganna’s counsel can serve and file written submissions on costs of no more than five pages together with a costs outline and any supporting authorities on or before May 4, 2021. The Plaintiffs may serve and file written responding submissions on costs of no more than five pages with supporting authorities on or before May 14, 2021. Counsel are to send their costs submissions to my assistant electronically as well as uploading them to CaseLines. If I do not receive any written cost submissions by May 14, 2021, I will deem the issue of costs to have been settled.
Davies J.
Released: April 20, 2021
COURT FILE NO.: CV-19-00617274 & CV-19-00622149
DATE: 20210420
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Sutton Group-Admiral realty inc. and pavlo antonenko
Applicants/Respondent on Cross-Application
- and -
ganna taborovska
Respondent/
Applicant on Cross-Application
REASONS FOR JUDGMENT
Davies J.
Released: April 20, 2021
[^1]: To avoid confusion, I refer to Tetiana Taborovska, Anatoliy Taborovsky and Ganna Taborovska by their first names throughout my reasons. I mean no disrespect to them by doing so.
[^2]: The term of the BRA was from November 12, 2018 to March 11, 2019, which is four months not five. Mr. Antonenko repeatedly referred to the BRA as having a five-month term. I am confident this was an innocent mistake on Mr. Antonenko’s part and take nothing from his reference to five months instead of four months. In fact, Ganna’s counsel also mistakenly said the term of the BRA was five months in several questions she posed to Mr. Antonenko.