COURT FILE NO.: CV-16-547346
DATE: 20210205
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
REAL ONE REALTY INC. AND JENEE LIU
Plaintiffs
– and –
JING LIU, YU DE XING, AND LAUREN ZHAN
Defendants
Z. Kaslik and G. Nava, for the Plaintiffs
D. Awad and H. Machum, for the Defendants, Jing Liu and Yu De Xing
L. Levine, for the Defendant Lauren Zhan
HEARD: September 22-25, 29-30, October 1,2, 5, 6, 8, 9, 13, 19-22, 2020
leiper j.
REASONS FOR JUDGMENT
I. Introduction and Overview
[1] This case is about a dispute over a real estate commission for the sale of a house located on Salonica Drive in the Bridle Path neighbourhood of Toronto.
[2] The Plaintiffs are a real estate agent, Jenee Liu (“Jenee”), and her brokerage, Real One Realty Inc. (“Real One”).
[3] The Defendants, Jing Liu and Yu De Xing (Joanne and Lawrence) owned several multimillion-dollar properties in Toronto and Aurora.[^1] In the spring of 2015, they hired Jenee and Real One to sell their house (“Salonica”).
[4] The Plaintiffs claim that Joanne and Lawrence, with the help of their neighbour Lauren Zhan (“Lauren”) transacted with a private buyer to avoid paying commission in breach of the listing agreement(s).
[5] The Defendants deny any improper conduct or that Joanne and Lawrence breached any listing agreement. They say the private sale had nothing to do with the Plaintiffs. Joanne alleges that Jenee tricked her into signing a listing agreement the day before Joanne received the private offer. Joanne and Lawrence submit that the listing agreement should be voided due to Jenee’s misrepresentations about that listing agreement.
[6] Lauren submits that she did nothing improper by introducing Joanne to the private buyer, Helen Geng (“Helen”) because there was no agent involved when she made the introduction. She submits that she had only an informal role in Joanne’s negotiations with Helen.
[7] At trial, Joanne and Lawrence attacked Jenee’s character and professionalism. They accused her of unethical behaviour, incompetence, and fraud. They did likewise with a key witness, Joanne’s former friend Shu Feng Jiang (“Sophie”). I found that Joanne, Lawrence and Lauren lacked credibility. I accepted the evidence of Joanne and Sophie about the events that led to the signing of the final listing agreement. I expressly rejected the submissions of the Defendants that Jenee misrepresented the listing agreement, deceived Joanne, or lied in her evidence at trial.
[8] For the reasons given below, I find that the Plaintiffs have established their claim on a balance of probabilities to a commission of 4.5% on the $4.05M sale price of Salonica. I find that Joanne and Lawrence, with the aid of Lauren, wanted to avoid paying the Plaintiffs’ commission. Joanne and Lawrence breached their listing agreements with the Plaintiffs. I find that Lauren induced Joanne and Lawrence to breach a listing agreement with the Plaintiffs and is liable to contribute along with Joanne and Lawrence for the commission owed to the Plaintiffs.
II. Preliminary Issue: Post-Trial Amendments to the Statement of Claim
[9] The Plaintiffs delivered an Amended Statement of Claim after the trial evidence was completed. Counsel for the Defendants submitted that leave should not be granted to permit the amended Statement of Claim because the amendments are factual in nature, would require the amendments to the pleadings and further discovery on the new facts pleaded.
[10] The amendments are not extensive. They include the following:
• Lauren is also known as “Hong Ren”;
• The damages sought for payment of the commission have been increased from $202,383.00 to $205,942.50, as a recalculation of the commission plus HST claimed on the sale price of the property--both figures have been known since the start of the litigation;
• The regulation relied upon under the Real Estate and Business Brokers Act, S.O. 2002 c. 30 has been specified: these regulations were previously pleaded;
• An updated address and contact information has been added for Plaintiffs’ counsel.
[11] Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 permits a motion to be brought to a court to amend a pleading at any stage of the proceeding, and the court shall grant such leave on terms as are just, unless the amendments would result in prejudice that cannot be compensated for by costs or an adjournment.
[12] I grant the requested amendments to the Amended Statement of Claim. They are minor and non-substantive. No party pointed to any specific prejudice from any of the amendments listed above, and I can discern none by permitting these amendments. I allow the Further Amended Statement of Claim dated November 16, 2020 to be filed.
III. The Background Facts
Joanne and Lawrence Decide to Sell Salonica and Hire Jenee
[13] Between April 2015 and January 27, 2016, the Defendants, Joanne and Lawrence, signed three successive listing agreements with the Plaintiffs, Jenee and Real One, for the sale of Salonica. Joanne and Lawrence hired Jenee as their real estate agent on the recommendation of Joanne’s friend, Sophie.
[14] At the outset of the client-agent relationship, Joanne and Lawrence negotiated with Jenee who agreed to reduce her commission. At their request, Jenee also agreed to pay certain necessary repairs to the house prior to listing.
[15] Joanne and Lawrence were born and raised in China. They testified that they are from humble backgrounds and have high school levels of education. Their first language is Mandarin. They rely on others to explain documents written in English.
[16] Lawrence is a former labourer and miner who now owns his own mine in China. Joanne was formerly an administrative assistant.
[17] During the events involved in this litigation, Joanne and Lawrence owned four properties in Toronto and Aurora, valued between $1.8M to $4.05M. They purchased two of these properties in 2015, using real estate agents other than Jenee and Real One.
The Listing Agreements with Real One and Jenee
[18] Lawrence and Joanne signed a first listing agreement for Salonica (LA#1) which led to plenty of interest and showings at the property but no offers in writing. Jenee advised Joanne and Lawrence to lower their asking price. Eventually, they agreed and signed a second listing agreement (LA#2). They received several written offers during the term of LA#2, but none of these offers led to a sale.
[19] Sophie testified that Joanne was frustrated that the house did not sell in the fall of 2015. Although several offers were presented ranging from $3.38M to $3.928M. Joanne and Lawrence declined these offers.
[20] Joanne and Lawrence were carrying multiple mortgages, some at higher rates than others. Joanne agreed that she and Lawrence wanted to sell Salonica as soon as possible. Jenee was also frustrated because the market had declined during the listing period.
[21] In December, before LA#2 was to expire, Jenee met with Joanne and Lawrence, with Sophie present. Jenee believed from that meeting that her clients acknowledged her efforts, wished to continue working with her as their agent and planned to list Salonica again with her in the spring of 2016. Jenee proposed having a Feng Shui assessment done for Salonica. After receiving Joanne’s agreement, Jenee arranged for a Feng Shui assessment and certificate. The staging material and the lockbox stayed at Salonica through January of 2016.
Joanne’s Neighbour Meets Helen, an Interested Purchaser: Parallel Marketing Efforts Begin
[22] Meanwhile, in December of 2015, Joanne and Lawrence’s neighbour, Lauren, struck up a conversation with a woman named Helen while the two were standing in line to purchase winter coats. After that meeting and sometime before Christmas, Lauren drove Helen through the neighbourhood and showed her houses for sale, including Salonica. In early January of 2016, Lauren brought Helen to Joanne to see Salonica. Neither Lauren nor Joanne involved Jenee in these contacts. Helen communicated with Lauren and Joanne about her interest and arranged to inspect Salonica. In mid-January, Helen, Lauren and Joanne met for lunch to discuss the sale price and Helen’s interest in the purchase of some of Joanne’s furniture along with the house.
[23] On January 4, 2016, an agent with another brokerage, Raymond Cheung, contacted Jenee to ask if Salonica was available for showing, because the listing agreement had expired. Jenee arranged for a showing. She was not available, and Sophie, who had by this point obtained a real estate licence, met Raymond Cheung and his client to show them Salonica. After the showing, Jenee asked Raymond Cheung if his client wanted to put in an offer. She invited him to address any questions to her about the house. Raymond Cheung told Jenee there would be an offer coming once his client arranged financing.
[24] On the morning of January 27, 2016, Jenee received an offer to purchase Salonica from Raymond Cheung’s client for $3.88M (the “Cheung offer”). She arranged to meet with Joanne and presented the offer. Sophie was present at this meeting. Joanne signed back the Cheung offer on behalf of herself and Lawrence with a higher price. Joanne also signed a third listing agreement (LA#3) at Jenee’s request. Joanne amended the term of the listing agreement to make it for a shorter period. LA#3 provided for payment of commission to the Plaintiffs at the amount as negotiated between Jenee, Joanne and Lawrence at the time of LA#1 and LA#2.
[25] The next morning, January 28, 2016, Lauren, Helen and Joanne met at Salonica. Joanne had asked Sophie to come to this meeting late the night before but told her to say nothing about Jenee or the fact that Sophie was a real estate agent. She did not invite Jenee to the meeting. At that meeting, Helen presented a private offer to purchase Salonica for $4.05M. After taking the offer to her real estate lawyer, Joanne and Lawrence accepted Helen’s offer. They refused to pay commission on the Salonica sale to Jenee and Real One.
[26] Jenee and Real One sued Joanne and Lawrence for the commission on the sale of Salonica. They also sued Lauren for arranging the sale to Helen and either inducing the couple to break their contract with Jenee and Real One, or intentionally interfering with the economic relationship between the parties.
IV. The Issues at Trial
[27] The legal issues to be determined at this trial are:
A. Are Jenee and Real One entitled to receive a commission for the sale of Salonica under the LA#2?
B. Are Jenee and Real One entitled to receive a commission for the sale of Salonica under LA#3?
C. If Jenee and Real One were not entitled to commission under any listing agreement, were Joanne and Lawrence unjustly enriched by their failure to pay commission to the Jenee and Real One?
D. Did Lauren attempt to interfere with the contractual relationship between Jenee, Joanne and Lawrence?
E. Did Lauren induce Joanne and Lawrence to breach their contract with Jenee and Real One?
F. If Lauren attempted to interfere with the contractual relationship between Jenee or induce a breach of contract, what damages if any, should be paid to Jenee and the Realty?
G. Is this an appropriate case for punitive damages?
V. Analysis of the Legal Issues
Are the Plaintiffs, Jenee and Real One, entitled to receive the commission on the sale of the property to Helen under the terms of the LA#2?
[28] The Plaintiffs claim that the private buyer, Helen, was first introduced to Salonica during LA#2, which ran from July 3, 2015 to December 18, 2015. To the contrary, Joanne, Lawrence and Lauren submit that Helen did not see Salonica until a few days before Christmas, 2015, and certainly after LA#2 had expired on December 18, 2015. Thus, they argue that Jenee and Real One are not entitled to any commission for the sale to Helen under the terms of LA#2.
[29] Under LA#2 which Joanne and Lawrence signed with Jenee, if Helen was introduced to the property during that period, then Jenee and Real One were entitled to their commission on the sale to Helen, by virtue of the 90-day holdover provision of the listing agreement.
[30] The purpose of a holdover clause in a listing agreement is to compensate an agent for her efforts, “recognizing the fact that a buyer’s decision-making process may be set in motion during the listing period because of the agent's marketing efforts [which] may result in a formal offer being made only after that listing period expired”: Sutton Group All Pro Realty Ltd v Riel, 2013 CarswellOnt 4062 (SCJ) at para. 22.
[31] “Introduced” connotes a first or initial presentation of the fact of a property being available for sale. An introduction can happen when a prospective purchaser sees a for-sale sign, or where a person takes a preliminary step to initiate knowledge of the subject or does some act that makes something known: See Terry Martel Real Estate Ltd. v. Lovette Investments Ltd. (1981), 1981 CanLII 1659 (ON CA), 32 O.R. (2d) 790 (C.A.), at p. 793, Your Company Realty; Capital Real Estate Services Inc. v. Evangelisto, 2003 CarswellOnt 206.
[32] I accept the Plaintiffs’ submission that Helen was “introduced” to the property during the period of LA#2 between December 13, 2015 and December 18, 2015, when she drove through the Bridle Path neighbourhood with Lauren to show her houses for sale. I reject the Defendants’ evidence to the contrary.
[33] This finding of fact arises from an interconnected set of circumstances in July and December of 2015 and necessary findings of credibility. I describe each set of circumstances in turn. The starting point is Lauren’s interest in finding a buyer for Salonica to help Joanne.
Lauren’s Relationship to Joanne and to Salonica
[34] At the time of these events, Lauren lived in the Bridle Path neighbourhood, a Toronto neighbourhood with several large properties and expensive homes. According to Lauren, the Bridle Path is a small community consisting of three interconnecting streets. In 2010, Lauren purchased a house on Saintfield Avenue approximately 500 metres from Salonica.
[35] Lauren’s family owned a real estate development company in China where she assisted with communications and organizing activities before immigrating to Canada. Lauren has a bachelor’s degree in Architecture. After she and her husband moved to Canada, Lauren purchased and operated a coffee shop franchise in Oshawa, which she closed in 2004.
[36] Lauren met Joanne in 2013. Lauren thought it might have been at a lunch hosted by a mutual friend but was not certain. Lauren introduced Joanne to a dog walker to help manage her large dog. They also shared the same cleaning woman. They had contact information for each other.
[37] Lauren testified that she had a close friend who lived at 7 Salonica who told her that 3 Salonica was for sale. Lauren walked her dog daily and took note of the for-sale sign at 3 Salonica.
[38] Lauren testified that she had not been inside Salonica prior to January 2016 when she arranged with Joanne to show Salonica to Helen. Lauren also testified that she was not at Salonica on July 14, 2015. According to her evidence, she first became involved in connecting a buyer to Salonica after a chance first meeting with Helen at a coat sale in December of 2015.
[39] Before turning to the December events, I must consider an unusual showing at Salonica on July 14, 2015 because it involves Lauren.
The July Showing at Salonica: Was Lauren the Unidentified Neighbour?
[40] On July 14, 2015, Jenee received a call from a person who introduced herself as a “neighbour” of Joanne and Lawrence. The neighbour said that she had a friend interested in seeing the property. Jenee suggested they meet the following day, because she had another showing booked at Salonica on that day.
[41] The neighbour insisted on seeing the house that same day. Jenee accommodated her request and agreed to meet at Salonica at 6 p.m.
[42] On her arrival at 3 Salonica, Jenee found that the neighbour had brought a large group of people (between 10 and 20) with her. Jenee was surprised. It was difficult for her to try and keep an eye on all the people in the house during this showing. According to the Multiple Listing Service (“MLS”) listing, Salonica is a 5,000 square foot house with 14 rooms, including 7 bedrooms and 10 bathrooms.
[43] The neighbour told Jenee that she knew the owner of 3 Salonica. Jenee testified that when she asked the neighbour for her name, the neighbour did not introduce herself, but said that she was “just” the neighbour and was not interested in buying, Salonica. The neighbour told Jenee that her “friend” was interested, but she did not introduce the friend, or anyone else at the showing, to Jenee by name.
[44] Jenee said that most of the people appeared to show little interest in Salonica, walking quickly through the house. One woman took time to open cupboards and look more carefully. She asked questions about price and renovations. Jenee spoke to that woman and to the neighbour. The neighbour pointed out some problems with the house. As they were leaving, Jenee requested the woman’s name. The woman said that she “knew Lauren,” so if she had any questions, she would call back.
[45] Jenee had not met any of these people before. She had never experienced a showing like this before either. After she had turned off the lights and locked up the house, she sent a text to Joanne which read:
Today at 6 pm, your neighbor brought a lot of people (her guests) to see your house. I'll follow up after a couple days.
[46] There was no response from Joanne to Jenee to this information, either by text or by telephone. At 9:00 p.m. Jenee sent another text to Joanne which read simply, “Chinese People.”
[47] Joanne testified at trial that she did not know, nor was she curious about, the neighbour who brought the group of people to view her house on July 14, 2015.
[48] A couple of days after this showing, Jenee searched for the number of the neighbour. It was not available for display on her cell phone.
[49] Jenee was cross-examined as to how she could say that she would follow up in a few days, without the name of the neighbour. She testified that the neighbour had contacted her by phone so she assumed that her cellular phone would store the caller’s number. This is a logical response. I accept her evidence as to why she believed it would be possible to follow-up with the person who had called her and told Joanne that she would do so.
[50] Counsel for Lauren put to Jenee that she was lying to the court about hearing the woman at the July 14 showing refer to the neighbour as “Lauren.” Jenee testified that her evidence was consistent with her prior evidence given at discovery in April of 2017 on this point. Counsel also suggested that she could not be 100% sure that the neighbour was Lauren. Her answer to this question was that after attending discovery, she recognized Lauren as the neighbour, because she saw Lauren leaving [the discovery offices].
[51] Counsel for Lauren informed Jenee that Lauren would deny being at 3 Salonica on July 14, 2015. Jenee testified that she was “80% sure,” based on seeing Lauren through a door at the examination for discovery.
[52] Lauren testified that she did not go to Salonica on July 14, 2015. She testified that she had seen a woman’s name on the for-sale sign at Salonica, but she had never had contact with “that woman [referring to Jenee].”
[53] I do not accept Lauren’s evidence. I find that Lauren was the neighbour who called and arranged the showing at Salonica on July 14, 2015. I say this based on several pieces of circumstantial evidence.
[54] First, a neighbour who knew Joanne found 10 or more people ostensibly interested in seeing Salonica simultaneously, yet avoided introducing herself, or any of those in attendance to Jenee. On Joanne’s evidence she did not speak to this neighbour at any time about the showing. Jenee overheard the neighbour referred to as “Lauren” at the July showing. Then, just after the listing agreement expired in December of 2015, Lauren, a neighbour who knew Joanne, in this small exclusive neighbourhood, became actively involved in identifying and arranging to bring two prospective purchasers to Salonica, after inquiring by text about whether Joanne was interested in a private sale.
[55] By January of 2016, Lauren was involved in negotiations, acting as an informal advisor to Joanne and attending the meeting where Helen offered to purchase Salonica. To accept Lauren’s and Joanne’s evidence, there had to be another interested and secretive neighbour in this small, upscale neighbourhood who knew Joanne and brought 10 or more people to tour her house in July of 2015, without Joanne identifying the other neighbour or any of the friends with her by the time of trial. This simply does not accord with logic or human experience.
[56] Next, there is the question of why a neighbour would act as an intermediary between multiple possible buyers and the listing agent at the mid-point of the listing. Any legitimate potential buyers could speak directly to Jenee. The listing was open until December 18. This event took place in July. There was a for-sale sign on the property. The July 14 showing meeting was requested on short notice. With such a large group of people in attendance, it is likely that the neighbour would have had to make those arrangements prior to contacting Jenee. This speaks to advance planning and preparation. It also speaks to seeking information and avoiding engaging with the real estate agent.
[57] Jenee testified that she felt strange about this showing. This was in keeping with her description of the event. Why wouldn’t people interested in purchasing a house refuse to identify themselves to the listing agent unless there was some reason to be deceptive?
[58] Finally, there was Jenee’s evidence that she recognized Lauren as the “neighbour” when she saw her at the examinations for discovery during this litigation. Jenee fairly acknowledged in cross-examination that she was only 80% sure she recognized Lauren as the neighbour she met on July 14, 2015. Her answer spoke to her efforts to be fair in her evidence: she did not overstate this identification evidence. Jenee was “80% certain.” She made this identification after litigation began and Lauren had been added as a Defendant. Taking these factors into account, I give Jenee’s identification evidence limited weight. This evidence does not undermine my finding that Lauren was the neighbour at the Salonica showing of July 14, 2015, and it is consistent with the other circumstantial evidence that the neighbour was Lauren.
[59] I find that Lauren arranged and attended the July showing. Lauren was interested and willing to help Joanne find a buyer without engaging the real estate agent on the listing while LA#2 was open.
[60] The next areas of fact-finding concern certain events in December of 2015 and the question of whether Helen was introduced to Salonica during the term of LA#2.
The December 2015 Events
Lauren Meets Helen at a Coat Sale in December 2015
[61] Lauren and Helen testified that they met at a winter coat sale that took place in Richmond Hill between December 8and 11, 2015. Neither was certain which day of the sale they met. They stood in line for two to three hours. They introduced themselves and discussed schools, their children, and the fact that Helen was looking to purchase a house in the Banbury neighbourhood, which is close to the Bridle Path neighbourhood. Helen and Lauren exchanged contact information. Helen bought lunch for Lauren and the people with her while they waited in line. Each testified that this was the first time they had met one another.
[62] According to Lauren, within a week of their meeting at the coat sale, Helen contacted her to say she happened to be in the neighbourhood and wondered if they could meet. Lauren testified that she was busy and told Helen she could not meet that day. Helen testified that she did not recall this event.
Did Lauren Contact Joanne About Salonica in December?
[63] Given the findings of Lauren’s interest in finding a buyer for Salonica and the fortuitous timing of finding a motivate purchaser in Helen at the December coat sale, it would be reasonable that Lauren or Helen would contact Joanne about Salonica.
[64] Lauren was cross-examined on the question of whether she had any contact with Joanne or Lawrence between the date of the coat sale and December 18, the date that LA#2 expired. Lauren testified that, “99% no, but 1% I’m not sure.” She said she could not give a definitive answer, that it had been too long, but she did not think she did. She acknowledged and explained inconsistent answers at discovery from her evidence at trial about contacting Joanne.
[65] At another point in her evidence, Lauren testified that she made an inquiry about whether Salonica was still available by asking the mutual dogwalker about whether there was a listing at Salonica because there was no sign on the house. She testified that the answer that she got was that there was no contract, and that Joanne and Lawrence wanted to re-list the house in the spring. Joanne testified that she could not have conversations with the dogwalker about anything complicated: she testified that she thought she told the dogwalker the property had not been sold, but not that she planned to re-list it. Joanne testified that she discovered she could sell Salonica privately from Lauren, and that she learned this in early January of 2016. These are areas of inconsistency as between Lauren and Joanne’s evidence. It is also odd that since Lauren testified that they had each other’s contact information, why Lauren would have made a query by way of their mutual dogwalker.
[66] I conclude that it is more likely than not, that Joanne and Lauren communicated about Helen’s interest in seeing houses in Lauren’s neighbourhood soon after Lauren met Helen at the coat sale in December. This finding is related to the deceptive showing of the house in July which I found that Lauren arranged with Jenee. It is also related to my findings below about the agent-client meeting on December 13, and the immediate urgent request from Lawrence and Joanne that Jenee remove the sign that evening, give days before LA#2 expired. I consider these December events and related credibility findings next.
The December 13 Meeting Between Joanne, Lawrence, Sophie and Jenee
[67] Jenee testified that as the expiry date of LA#2 was approaching she asked to meet with Joanne and Lawrence. As with her other meetings, Sophie went with her. Joanne told Jenee that they wanted to continue to try and sell the house, but they did not want visitors from China who were coming to see them during the holidays to know that their house was for sale. Joanne told Jenee that they would re-list the house on MLS in the spring.
[68] Both Lawrence and Joanne testified that by the December meeting, they did not think Jenee was doing a good job and did not plan to re-list with her later in 2016. Joanne testified that she asked Jenee to remove the staging material from Salonica. Joanne and Lawrence testified they wanted to end the relationship with Jenee because she had failed to sell Salonica within the year, she found faults with the property and she had set the first price too high. Both said that they had lost confidence in Jenee by December. Joanne even testified that not only had she and Lawrence decided they did not want to use Jenee’s services further by this point, but they had not wanted to use her services “in the first place.”
[69] In spite of their evidence that they had no confidence in Jenee and did not wish to work with her further, Joanne and Lawrence did not tell her of their decision at the December meeting. To the contrary, in a December 13, 2015 text exchange after the meeting, Joanne wrote “You have put in a lot of effort to sell this property.” Jenee thanked her and said that she wanted to sell for a good price. She said she would put in lots of effort. Joanne responded, “Thank you, let’s work hard together.”
[70] Joanne testified she did not tell Jenee she was unhappy with her services because she preferred to avoid direct confrontation. Joanne also testified that she did not want to make her friend Sophie feel uncomfortable or embarrassed. Joanne testified that she would tell Jenee that they would no longer use her services once she had found another agent. There was no evidence that Joanne or Lawrence had looked for another licensed agent at this point or in the month following this meeting.
[71] Joanne’s evidence that she did not like direct confrontation or was protective of Sophie’s feelings was inconsistent with her later behaviour in January and February. Joanne had angry confrontations with Sophie over Sophie’s call to Helen. Joanne alleged malfeasance by both Sophie and Jenee after Jenee asked for payment of her commission. Joanne’s evidence at trial completely denigrated both Jenee and Sophie. Further, Joanne’s evidence of unhappiness with Jenee’s work from the start of the relationship was contradicted by Joanne’s acknowledgment of Jenee’s hard work, in the text exchange of December 13, and her implied satisfaction on being told that Jenee would be showing Salonica on December 14.
[72] Joanne’s evidence of Jenee’s deficiencies as an agent are also inconsistent with the objective evidence of Jenee’s work on the house, the showings, and the delivery of several offers, none of which were acceptable to Joanne and Lawrence. These offers can be summarized as follows:
Table 1: Summary of Written Offers to Purchase the Property in 2015
| Offer Number | Date of Offer | Amount of Offer/Counteroffer | Sign back Amount | Comments |
|---|---|---|---|---|
| 1 | July 29, 2015 | $3.388 M | None | Offer emailed to Joanne by Jenee: purchaser M. Thaw |
| 2 | August 6, 2015 | Offer: $3.78 M. Counter-counter offer: $3.85 M. |
$4.28 M. | Purchaser: M. Thaw |
| 3 | August 19, 2015 | 3.90 M. | $4.1 M. | Purchaser: K. Nia |
| 4 | August 25, 2015 | $3.92M. | $3.98 M. | Purchaser: K. Nia |
| 5 | November 1, 2015 | Offer: $3.888 M. Counter-counter offer: $3.928 |
$4.05 M | Purchaser: Z. Luo |
[73] I conclude that at the time of the December meeting with Jenee and Sophie, Joanne and Lawrence wanted to find a buyer for Salonica. I find that they chose not to sever their relationship with Jenee. Jenee had worked hard to prepare Salonica, shown it and obtained several offers. Although Joanne and Lawrence may have been stressed about not having a sale completed, and may have blamed Jenee, they did not end the relationship. Rather, as can be seen by the evidence of what happened in January, Joanne knew that Jenee was continuing as their de facto real estate agent, leading to Joanne’s decision to consider and respond to another offer to purchase Salonica presented by Jenee on January 27, 2016.
[74] Jenee testified that she asked Joanne and Lawrence if they still planned to work with her and whether to keep her staging materials at the house. She did not want any “surprises.” They agreed to do so. They asked her why they had not been able to sell the house despite the many showings and interest in Salonica. Jenee discussed the recession that had affected the real estate market. She also said that a potential purchaser who bought a Bridle Path house on Suncrest, had mentioned the open stairs to the doorway at Salonica which led him to decide not to make an offer for Salonica. Jenee suggested having a Feng Shui master inspect and provide a certificate for the house. She offered to contact a Feng Shui master for this purpose.
[75] Jenee relied on the record of her text communications with Joanne to confirm the date of their meeting as December 13, 2015. The text messages filed at trial were dated December 13, 2015 and began at 7:10 p.m. Jenee testified that although she had not previously testified as to the exact date of the meeting, she remembered the conversation at the meeting and the conversation with her clients recommending a Feng Shui master. Her text messages corroborate that discussion about a Feng Shui master, whose name is mentioned in the texts with Joanne. In her response, to Jenee, Joanne agreed that Jenee could make the call to the Feng Shui master, although she was not sure of, “good timing to do this.” Joanne did not explain what she meant by whether it was “good timing” to have the Feng Shui done.
[76] Sophie also testified about December 13 meeting. She recalled that Lawrence and Joanne said they did not want to list on the MLS in the winter but would re-list in the spring. Sophie heard the conversation about involving a Feng Shui master. Sophie denied that Joanne asked Jenee to remove the staging material from Salonica at this meeting.
[77] I conclude that Joanne and Lawrence chose to rely on Jenee’s work, and have the staging material remain at Salonica after their December 13 meeting, to have the Feng Shui inspection done and were willing to entertain other offers from Jenee, including the offer brought on January 27, 2016.
The Aftermath of the December 13 Meeting: Joanne and Lawrence Insist that the Sale Sign be Taken Down Immediately
[78] After the meeting with Joanne and Lawrence, Sophie and Jenee drove away together. Sophie received a call in the car from Lawrence asking Sophie to ask Jenee to go to Salonica immediately and remove the for-sale sign from the house. He told Sophie that they had friends coming to visit and they did not want them to see the sign on the house. Sophie reported this to Jenee who observed there was still time on the listing agreement. Jenee was concerned about why Lawrence wanted the sign to come down right away. Jenee balked at taking the sign down that evening.
[79] Sophie testified that she called Lawrence back to suggest that they take the sign down during the daytime, given that it was dark and cold that night. Lawrence insisted that the sign come down that very night, including removing the post from the ground. Jenee agreed. Sophie offered to help. They drove to Salonica, where they removed the for-sale sign, and pulled the post from the ground.
[80] Lawrence was not asked about the call to take down the for-sale sign. Joanne testified that she told Sophie and Jenee to take down the sign later in December, but that conversation was after LA#2 had expired. Joanne testified that she went to Salonica to pick up some of her daughter’s belongings on December 16 and noted that the sign was still there. She testified she returned to Salonica to check on the house on December 22 and the sign was down.
[81] Counsel for Joanne and Lawrence suggested that the evidence from Jenee and Sophie as to the timing and circumstances of the sign coming down should not be believed, and that I should find both not to be credible witnesses in general. I turn next to considerations of credibility of Jenee and Sophie prior to making findings about the removal of the sign and the importance of this evidence to the findings of fact.
The Attacks on Jenee’s Credibility
[82] The Defendants attached Jenee’s credibility and professionalism. They submitted that she took advantage of her less sophisticated clients. The Defendants’ account of the events leading to the private sale to Helen rest on a portrayal of Jenee as a calculating, unethical liar.
[83] I reject this characterization of Jenee. To the contrary, I found Jenee to be credible and reliable. Her evidence of the work done, the offers made and her advice to her clients were largely corroborated by the records filed at trial. The areas of inconsistency in her evidence were either explained or minor. The important areas of evidence such as the work done, the offers made and presented, the content of the listing agreements and available information provided to her clients are consistent with Jenee’s evidence. They are also consistent with the picture of a real estate agent who did everything in her power to help her clients sell their house, up to the final day before they entertained a private offer with a view to avoiding paying her for her services. I will address next in greater detail certain of the Defendants’ submissions concerning Jenee’s credibility.
The Balance of Power Submission
[84] Counsel for the Defendants submitted that as a better educated professional, Jenee held power over Joanne because of Joanne’s educational background and lack of English skills. The Defendants submitted that Joanne and Lawrence were dependent on Jenee to explain the listing agreements to them, and that they were not aware of all the details of the agreements because Jenee failed to explain and translate the listing agreements to them adequately. Counsel submitted that Joanne and Lawrence were unsophisticated, and dependent on Jenee throughout the transaction.
[85] I do not accept this characterization of Joanne and Lawrence for two reasons. First, it risks stereotyping the abilities of those who do not have formal higher education, speak little English or come from less-advantaged economic backgrounds. Second, this submission disregards the other evidence about Joanne and Lawrence, their relationship with Jenee and their considerable resources and access to independent advice. It ignores the evidence of Joanne and Lawrence’s successful negotiation of a preferred commission from Jenee. It fails to consider Joanne and Lawrence’s financial resources, their experience in instructing agents in prior real estate transactions before working with Jenee, Lawrence’s business experience in running a mine overseas, their access to other professionals, including their real estate lawyer and former real estate agent. Further, this submission ignores or downplays Joanne’s access to support and advice from her neighbour Lauren, a businessperson with a background working in a real estate development company, who became interested in Salonica in July of 2015, located an interested potential buyer in December and by January of 2016 actively participated in the negotiations leading to the private sale with Helen.
[86] Jenee agreed to terms in her listing agreements with Joanne and Lawrence that meant she had to rely on the good faith of Joanne and Lawrence. Jenee paid for repairs that would normally be paid for by the homeowners. Any expectation of repayment was only through her commission, which she had reduced. Once the listing agreement expired, her clients were free to move on, with Jenee having paid for more than the usual marketing and other staging.
[87] Indications of the balance of power in the agent-client relationship is seen in the tone of communications between Joanne and Jenee. In July of 2015, Jenee sent a written offer to Joanne and Lawrence. The offer was below Joanne and Lawrence’s expectations. Joanne responded to Jenee (text translated from Mandarin in the original to English):
Joanne: “If I knew this price I don’t even reply”
“No money, then don’t buy house, is it a robbery?”
“My husband said leave it, I don’t care the closing date. Forget it.”
Jenee: “I tried my best to convince them”
Joanne: “Not serious, forget it.”
Jenee: “Just to inform you that after I told them the Seller is not happy to give a sign back, he offered 3.7M I told them that you won’t take it if it was under 4M.”
[88] Their exchange is brief but revealing. Joanne’s tone is short, dismissive even. Jenee explains herself to Joanne, “I tried my best to convince them.” Jenee is aware that her clients want to obtain at least $4M for Salonica.
[89] Jenee’s relationship to her clients is demonstrated in her lengthy email of June 20, 2015. By this point, there had been no offers. Jenee advised her clients to lower their asking price. Jenee described the role that the sale price and the market play in selling a house. She advised her clients that to sell in a short period of time, they needed to “approach the selling price based on the market.”
[90] The tone of Jenee’s email of June 20 was polite, professional, and deferential. She referred to Sophie, who as I discuss below was an important liaison to the sellers, because of Sophie’s friendship with Joanne. There was nothing misleading, improper, or unprofessional about the tone or content of this email. It was consistent with Jenee’s evidence about her client’s expectations for price and her efforts to give them realistic advice.
[91] Counsel for Joanne and Lawrence cross-examined Jenee concerning alleged failures to adequately explain the English language listing agreements, given that their first language was Mandarin, and they had limited English language skills. I find that the context, the presentation of offers and the communications between Jenee and her clients all support her evidence that she explained what they were signing, sought their instructions and Joanne and Lawrence understood the key elements of the agreements which governed their relationships with Jenee. Similarly, I reject arguments that Jenee’s credibility was impacted by presenting offers that came through her brokerage or failed to explain this to her clients: their negotiations on the total commission payable and their efforts to find a private buyer to avoid paying the commission satisfy me that they were well aware of amount they would have to pay in commission if they sold through an agent (whether or not there was an independent agent acting for the purchasers) versus avoiding commission by finding a private buyer, which is the real issue in this trial.
The Repair Receipts
[92] In another area of attack on Jenee’s credibility, counsel for Joanne and Lawrence cross-examined her on the informal nature of some of the records for the repairs she arranged to be made at Salonica. I did not find that any lack of detail in these records equated to a lack of credibility on Jenee’s part for the following reasons.
[93] Jenee arranged and paid for the repairs to the house as she had agreed with Joanne and Lawrence. She arranged and paid for staging, photographing, marketing, signage, outdoor clean up and attending appointments to show the property. She also brought some of her personal artwork and furniture to the house to “stage” the property.
[94] Jenee testified she spent approximately $20,000 for repairs, marketing, and expenses to make the house ready for real estate showings. Of this total, approximately $6,466 was for necessary repairs.
[95] Jenee was cross-examined on the receipts and invoices she produced, including the fact that some had not been marked “paid.” Most of the records did not identify the property address. However, there was no dispute that Jenee paid for the repairs to the property, or that she carried out the marketing and staging for 3 Salonica.
[96] Although invited to do so by the Defendants, I draw no negative inferences about Jenee’s credibility from the form of the documents she produced for trial relative to her payments for the repairs, staging and marketing of 3 Salonica. These invoices were consistent with Jenee’s testimony about the repairs and her expenses to ready Salonica for sale. The informal nature of these records was in keeping with the arrangement for Jenee to pay these costs herself. Her repayment had been negotiated to come from a portion of the commission on the final sale of the house. This case does not turn on formal accounting or an audit-worthy set of receipts.
Other Alleged Inconsistencies
[97] Counsel for the Defendants cross-examined Jenee on differences between her discovery evidence and at trial in support of their submission that she was not a credible witness. For example, counsel for Lauren cross-examined Jenee on her evidence at discovery that the for-sale sign was removed on December 20, which she later corrected to December 13. The Defendants submit that these inconsistencies render Jenee’s evidence about the circumstances of the sign removal suspect, and that I should not rely on her evidence that this happened on December 13, 2015. Jenee testified that the question put to her on discovery was not clear when it was initially put to her, and she later corrected it to reflect her memory of the meeting with the clients before LA#2 expired to find out their intentions, the discussion about the Feng Shui master and her follow-up texts of December 13. I accept Jenee’s evidence which corrected her prior evidence and the rationale for her recollection. Her text messages also corroborated her corrected evidence.
[98] Counsel for Joanne and Lawrence also submitted that Jenee attempted to downplay her experience as a real estate agent at trial as estimating she had closed 30 to 40 real estate transactions versus her evidence on discovery that she had closed 70-100 transactions. This evidence was collateral to the main transaction. It was also unclear whether Jenee’s discovery evidence meant that she had 70-100 previous listings and 30-40 completed sales which was her evidence at trial.
[99] Other inconsistencies in Jenee’s evidence were minor or explained adequately: these included the percentage of Jenee’s clients who do not speak English, her failure to mention staging or its costs during her discovery evidence, although the house was indisputably staged. Counsel submitted that two typographical errors on LA#3 which dated it for the day before it was signed and the added zeroes to the purchase price for the Cheung offer were errors were more consistent with haste than deception. Counsel suggested that an omission of a text discussing another interested buyer in January of 2016 was evidence that Jenee was trying to mislead given the amount of documentation and communications produced. I accept Jenee’s evidence that this was not an intentional omission.
[100] Overall, I found Jenee to be a credible and reliable witness. She testified in English which was her second language. At times, she needed to have questions repeated or idioms such as “Sitting here today…” clarified. At other points in her evidence, she repeated portions of her evidence before answering the direct question. After watching her testify for three days, I concluded that Jenee was a reliable witness who strove to provide clear responsive evidence and acknowledged areas of inconsistency or errors. She was accused of deception, trickery, and a complete lack of ethics without objective foundation. Her cross-examination was lengthy and at times repetitive. Although demeanour is not the prime indicator of credibility for reasons that are articulated in the jurisprudence, her demeanour was neither combative nor argumentative in the face of the challenges to her honesty and professionalism. She disagreed with those suggestions, albeit while showing some signs of distress at her former clients’ accusations.
The Attack on Sophie’s Credibility
[101] The Defendants also submitted that Sophie was not a credible witness. According to Joanne and Lawrence, Sophie was Jenee’s partner on the sale from the start. This meant that Sophie stood to benefit from the transaction. Counsel for Joanne and Lawrence submitted that this explained Sophie’s motivation to lie: to support Jenee, her business partner. I disagree. I found Sophie to be a credible witness. I accepted her description of her role in the relationship and the transaction: a friend to Joanne who tried to help her with the project of selling Salonica. I discuss next my findings about Sophie’s credibility.
[102] Joanne and Lawrence testified that Sophie told them that Jenee and Sophie were to be partners on the sale of Salonica and would share the commission. Joanne testified that Sophie agreed to rebate her share of the commission back to Joanne. Neither Jenee, nor Sophie agreed that they were partners on the sale of Salonica or that Sophie had any financial interest in the listing.
[103] Joanne testified that she and Lawrence had a trusted real estate agent who had represented them in other transactions. She testified that when she told Sophie that they were thinking of selling Salonica, Sophie “pushed” the idea of hiring Jenee. Joanne and Lawrence both testified that Sophie and Jenee described themselves to her as “partners.” Joanne stated that she and her husband were reluctant to hire Jenee and only did so at the urging of Sophie.
[104] Lawrence testified that he understood Sophie and Jenee, “worked together as partners” to sell houses, although Sophie did not have a real estate license.
[105] I did not accept the Defendants’ evidence concerning Sophie’s financial interest in the transaction or that she was motivated by financial gain. I find that Sophie’s role arose from her friendship for Joanne and was not based on financial considerations. I say this for several reasons: first, the evidence from Joanne and Sophie about their relationship prior to and during the listing period demonstrated Sophie’s friendship and helpfulness toward Joanne. Sophie assisted Joanne with studying for her citizenship exam, with obtaining information from the Canadian government, and serving as an interpreter at a Chinese delegation visit in December of 2015 at one of Joanne and Lawrence’s Aurora properties.
[106] Second, Lawrence testified that Sophie and Jenee were partners who sold houses together. This did not accord with any of the other evidence: Sophie met Jenee through Sophie’s husband Benson, who sold commercial real estate. Sophie and Jenee had not sold houses together. Sophie did not know Jenee particularly well. She recommended Jenee because after meeting her, she believed Jenee was experienced and professional. Further, although Sophie obtained her real estate licence in the fall of 2015, at no time did she have any business relationship with Real One, nor any documented partnership arrangement with Jenee.
[107] Third, the documentary and other evidence established that Jenee was the listing agent. Jenee conducted most of the showings at Salonica, paid the up-front disbursements for the repair work, arranged for the marketing, the staging, and the Feng Shui master, and brought her personal property to the house as part of the staging. All the listing agreements, listings and offers were completed and placed in Jenee’s name, under her broker Real One Realty. Sophie did not obtain her real estate licence until the fall of 2015 and was never employed at Real One Realty. The appointments were all booked through Jenee. All of this is consistent with Jenee being the sole responsible agent.
[108] The Defendants relied on several references in text messages to third parties in which Jenee used the term “partner” when referring to Sophie. Jenee explained that she had used the term loosely in communicating with others, but that she did not mean formal business partners. Sophie was part of the relationship from the beginning. She made the initial introduction. She attended meetings with Joanne and Lawrence, including the meeting in December that led to the for-sale sign coming down. She attended at the Cheung showing in January of 2016, because Jenee was not available. By this point, Sophie had received a real estate licence. I find that these activities were in keeping with a finding that Sophie remained involved out of helpfulness, but not out of any financial expectation or formal business arrangement with Jenee.
[109] A fourth, and key piece of evidence that is inconsistent with Sophie expecting to share commission with Jenee on the sale arises at the time of the private offer to Joanne on January 28, 2017. This meeting took place without Jenee’s involvement. Joanne asked Sophie to come with her to receive the private offer from Helen Geng. She asked Sophie to fill in the documents. Had Sophie been a business partner with Jenee, motivated by financial gain to share in the commission on the sale of Salonica, it is illogical that Joanne would invite Sophie to the very meeting intended to frustrate Sophie and Jenee’s goal of receiving a commission. Adding to the implausibility of such a scenario, the private offer meeting took place the day after Jenee presented the Cheung offer to Joanne for the purchase of Salonica, which Joanne signed back, and which was irrevocable until two days after receipt of the private offer.
[110] Sophie’s evidence was consistent with her actions. She testified that she wanted both sides to be happy and achieve their goals. She described, with some distress, her feelings of worry, and “panic” when the relationship between Joanne and Jenee appeared to be breaking down. She described her fear when Joanne involved her in the private offer from Helen and excluded Jenee. After the private offer meeting, Sophie urged Joanne to show the private offer to Jenee, and Joanne did so. Sophie called Helen to try and persuade her to have the commission go to Jenee. Sophie testified that everyone ended up being angry with her over the dispute and her attempts to have the parties resolve it.
[111] The fifth piece of evidence consistent with Sophie’s role as a friend and go-between, came about after Joanne told Jenee that the house had been sold. Jenee retained a lawyer who sent a demand letter to Joanne and Lawrence. This letter was sent on Jenee’s behalf, not on behalf of Sophie and Jenee as partners. Sophie was upset that the conflict was heading toward litigation. She tried to mediate a solution, including attending at a meeting with Joanne and Lawrence, who scolded her for her alleged disloyalty to them. Her efforts to resolve the situation were futile. Sophie’s actions, her communications with Joanne and her evidence were consistent with the role of a friend caught between two conflicting interests.
[112] In summary, I find that Sophie acted as a friend to Joanne, and to the transaction. She referred Jenee to her friend because she believed that Jenee was a capable and professional real estate agent. She testified, and I accept her evidence in this regard, that she listened to Joanne’s complaints and worries about her expensive real estate obligations. It is also clear that Jenee relied on Sophie because of her relationship with Joanne. Sophie found herself reassuring Jenee about the character of her friends Joanne and Lawrence when Jenee agreed to pay up front costs on their behalf to sell the home and worried about the financial risks she assumed in doing so.
[113] Jenee managed her client relationship by invoking Sophie’s name in her efforts to advise Joanne and Lawrence on pricing. Sophie was a go-between, a trusted person on both sides of the client-agent relationship. When the two sides diverged, this became a source of anguish for Sophie. Sophie wanted Joanne and Lawrence to find a buyer for Salonica. She wanted Jenee to be paid for her months of work.
[114] The final source of Sophie’s anguish is clear: on January 28, 2016 Joanne presented a test of loyalty and friendship to Sophie by asking Sophie to attend at the private offer. Joanne asked Sophie to assist in an event designed to save Joanne and Lawrence from paying the commission to Jenee. Sophie was asked to choose between her loyalty to Joanne’s financial interests and Sophie’s sense fair dealing. Sophie resisted keeping the private offer a secret from Jenee. She encouraged Joanne to do right by Jenee. For these efforts, Joanne accused Sophie of being a selfish liar. I do not accept such a characterization of Sophie.
[115] The Defendants urged that I find there was an attempt by Sophie and Jenee to cheat Joanne and Lawrence, and to lie about this. I completely reject this submission. I turn to the events in December of 2015 and my findings about the application of LA#2 to Helen’s introduction to Salonica.
Sophie’s Evidence About the Removal of the Sign from Salonica
[116] Having found that Sophie was generally a credible witness and rejecting the attacks on her motivation to lie made by the Defendants, I consider her evidence about the evening in which she assisted Jenee remove the for-sale sign from Salonica in December of 2015.
[117] Sophie confirmed that after their meeting with Joanne and Lawrence in December, Lawrence called her to ask Jenee to remove the for-sale sign from Salonica. When Sophie told Jenee of the request, Jenee protested that there was still time under listing agreement and that it was dark. Sophie called Lawrence back to suggest that the sign be taken down during daylight. Sophie noted it was cold, the ground was frozen, and it would be difficult to remove the post. Lawrence told her to take it all away immediately.
[118] Sophie confirmed that she went with Jenee to Salonica where they removed the sign and the post.
[119] Neither Lawrence nor Joanne testified that this conversation took place. Joanne denied asking that the sign come down before the expiry of the listing agreement.
[120] I accept the evidence of Sophie and Jenee about the demand to have the sign come down. I have found they were both credible witnesses. They were consistent in the timing, the concerns expressed to Lawrence and the unpleasantness of the task, which they carried out after Lawrence insisted. I find this event took place as they described it.
Lauren and Helen Drive Through the Bridle Path in December and Look at Salonica
[121] Helen testified that before Christmas of 2015, Lauren took her family on a drive through the Bridle Path to see potential houses to purchase in the area, including Salonica. They looked at other houses at the same time, including a house on Peebles Road, which had a for-sale sign. Helen took pictures of that sign.
[122] Helen was asked whether she had called Lauren approximately a week after they first met at the coat sale to drive through the neighbourhood, but that Lauren was not available. Helen did not recall this happening, in contrast to Lauren’s evidence about such a call.
[123] Helen testified that the first time she saw the Bridle Path area, it was with Lauren. This happened in December.
[124] During the drive, Helen testified that Lauren told her that the house had been listed for awhile. Helen recalled there was no for-sale sign on the property when they drove by Salonica. Helen said that she saw the house in December in the car with Lauren. She said that this drive with Lauren happened “some time before Christmas 2015.” Later in cross-examination, Helen agreed with the suggestion made to her in cross-examination from Lauren’s counsel, that it happened “a day or two before Christmas 2015.”
[125] Lauren was specific about the timing of the drive with Helen: she testified that her son was home for the holidays, and it was December 22-23 when she took Helen around the neighbourhood.
[126] Lauren described Helen’s visit in careful detail, including the direction of each turn on every street they drove during the tour, those present, the fact that Helen’s son played with her Doberman at the house, and the subjects about which they chatted. In contrast, her evidence about other conversations and texts between herself and Joanne at later crucial stages leading up to the private offer were imprecise or vague.
[127] Lauren emphasized that there was no for sale sign at Salonica, and she pointed this out to Helen that there was no sign. Given my finding that the sign came down on the evening of December 13, the Lauren and Helen drive could have taken place any time after that date.
[128] I do not accept Lauren’s evidence of the timing of the drive with Helen. If Helen called with interest in seeing the property soon after their meeting, it is unlikely that Lauren would have put off this tour for a week or more. Further, given my findings of Lauren’s prior interest in Salonica in July and her credibility, without any corroborative evidence, I do not accept Lauren’s evidence about the timing of the first showing of Salonica to Helen. Although Helen agreed with counsel’s suggestion that this took place a day or two before Christmas, her evidence in chief that it was before Christmas without this detail, and her evidence of having difficulties recalling other events during period because of the length of time that had passed between those events and the trial, do not give me sufficient confidence that Helen’s evidence as to the date of the drive was reliable.
[129] Finally, there is the circumstantial evidence of Lawrence’s insistence on December 13 that the for-sale sign come down, despite Jenee’s reluctance. Neither Lawrence nor Joanne explained the rationale for this urgent request. Joanne denied it was made, and said she called Sophie later to ask that the sign come down after LA#2 had expired. I do not accept that evidence. I find it is more likely than not that Helen’s interest in purchasing a house in this neighbourhood, her meeting Lauren sometime between December 8-11 and her call within a week to Lauren, followed by the urgent removal of the sign by December 13, were connected events.
Findings Relating to Issue #1: Helen was Introduced to Salonica During LA#2 and Commission is Payable to the Plaintiffs
[130] I find that Sophie and Jenee were credible witnesses and I accept their evidence about the meeting with Joanne and Lawrence on December 13, 2015. Jenee’s texts with Joanne connect the client meeting, the Feng Shui discussion, and the arranging of an appointment to December 13, 2015. I also accept their evidence that Joanne and Lawrence urgently wanted the sign taken down on the night of December 13, and the two of them complied with this task. I conclude that these events were connected to Helen’s introduction to Salonica and the Defendants’ desire to present Salonica as no longer listed by removing the signage ahead of the listing expiry.
[131] The December 8 or 9 meeting at the coat sale meant that Lauren had identified a serious potential purchaser for Salonica. Helen called Lauren within a week of that meeting, wanting to look at houses. According to Lauren, she put Helen off. Helen did not recall that. Lauren’s evidence was overly specific concerning the events of the drive around the neighbourhood with Helen, in contrast to other parts of her evidence. Lauren emphasized the fact that there was no sign when she drove Helen through the neighbourhood to see Salonica for the first time. Joanne denied the sign request of December 13 and described her reasons for being at Salonica twice in later December, which meant that she could see the sign up on December 18 and then down on December 22. This would put it well after LA#2 expired and would coincide with Lauren’s estimate that she showed Salonica to Helen on December 22 or 23. I do not accept Joanne’s evidence about the sign. I do not accept Lauren’s evidence as to the timing of her drive with Helen. Instead, I look to the findings of fact and the actions of the parties. Helen was motivated to purchase a large house in this neighbourhood. Lawrence and Joanne were stressed and anxious to sell. Lauren had made herself involved, but with elements of deception to avoid the agent. The sign had to come down on December 13.
[132] It would have been natural and straightforward for Joanne and Lauren to have communicated with one another about Helen’s interest. Lauren did not rule out that they might have had contact between the date of the coat sale and the expiry of LA#2. There were some inconsistencies in Lauren’s evidence about any contact with Joanne during December. Whether that contact happened by cellular phone text message or through their mutual dogwalker is unclear. Neither Lauren nor Joanne produced any messages with each other from this period: both had replaced their cell phones from that period and had no access to their text messages during this period.
[133] To introduce Helen to Salonica as a private sale, the sign had to be taken down. Joanne and Lawrence made their hasty demand that Jenee and Sophie take down the sign on the night of December 13, 2015, five days before the listing agreement expired. It could not wait, even until the next day, December 14.
[134] These pieces of circumstantial evidence persuade me that it is more likely than not that Lauren wanted to show Helen the property on learning of Helen’s interest without a for-sale sign on the property, so that it could be a “private sale.” I find that this “showing” took place as soon as possible so that the potential buyer saw Salonica before she looked elsewhere.
[135] If Joanne and Lawrence decided they no longer wanted Jenee to work for them, all they had to do was await the listing agreement expiry, terminate the relationship and the sign would have come down. If Joanne had asked Jenee to remove her staging materials from Salonica at the end of the agreement, that could have been done. Joanne and Lawrence had no prior difficulty in making up their minds, giving directions to Jenee about the sale or asking for favourable terms. I find that the actions of Joanne and Lawrence reflect their decision to try and maximize their opportunity to sell Salonica, by keeping the benefits of Jenee’s work, and accepting Lauren’s assistance with a private buyer.
[136] Also, Joanne and Lawrence need only have waited five days, until December 18, when the listing would have expired to remove the sign then. There was no need for haste if no private buyer was looking at the house.
[137] I find that Joanne and Lawrence hurriedly had Jenee remove the sign to accommodate a viewing for Helen, but without telling her this was the reason. Lauren introduced Helen to Salonica, sometime after December 13, 2015 and before LA#2 expired on December 18, 2015, most likely on December 14, given the urgency of the request from Joanne and Lawrence. Having introduced Helen to the property during LA#2, and given that Helen was the ultimate purchaser of Salonica, I find that the holdover clause in LA#2 applied and on that basis that the Plaintiffs have established that they are owed the commission on the sale to Helen in accordance with the terms of LA#2.
[138] At the same time, Lawrence and Joanne chose not to terminate their relationship with Jenee but instead entertained contacts from Lauren to find a private buyer. These strategies converged at the end of January 2016. This leads to the analysis of the second issue.
B. Did LA#3 entitle Jenee and Real One to receive the commission on the private sale of the property?
The Positions of the Parties on the Validity of LA#3
[139] The Plaintiffs alternatively rest their claim to commission for the sale of Salonica on a third listing agreement, LA#3, which Joanne signed on January 27, 2016 along with the Cheung offer brought to her by Jenee. The Defendants testified that Jenee falsely represented to Joanne that LA#3 would only apply to the Cheung offer. They submit that LA#3 is void because of the misrepresentation made to sign it.
[140] The Defendants argue that Jenee was motivated to lie or “trick” Joanne into signing it because Jenee knew that a private offer was coming the next day and wanted to unfairly take the commission for that sale which the Defendants say had nothing to do with her. They also allege that Sophie was motivated to support Jenee’s version of events because of Sophie’s interest in sharing the commission in her capacity as Jenee’s partner.
Overview of the Findings Concerning LA#3
[141] I accept the evidence of Jenee and Sophie. I reject the evidence of Joanne that there were any misrepresentations about the content of LA#3. In summary, I rest these findings on the inconsistencies in Joanne’s evidence, the available communications and the implausibility of Joanne and Lawrence’s evidence. Had Jenee lied so blatantly to Joanne, this could easily have been proved be false by anyone reading the document. It is inconsistent with Jenee’s dealings with Joanne and Lawrence leading up to the Cheung offer. What is more, in the immediate aftermath of Joanne receiving the Cheung offer, followed by the private offer made by Helen (the “private offer”), Joanne took the private offer to her real estate lawyer, but not the Cheung offer. Given Joanne’s evidence about purportedly unusual nature of LA#3, her being put on notice by Sophie that Jenee ought to receive her commission, and Jenee also suggesting to Joanne that she should speak with her lawyer, her failure to seek advice is inconsistent with what she testified to at trial about what she was told at the time about LA#3 and the Cheung offer by Jenee. I discuss all these issues in greater detail next.
The Parallel Marketing and Negotiating Activities in January of 2016
[142] After LA#2 expired on December 18, 2015 and before LA#3 was signed on January 27, 2016, two parallel sets of marketing/negotiating activities took place for the sale of Salonica during the month of January. The first was through Jenee’s ongoing efforts to market and sell Salonica, albeit without any signed listing agreement. The other arose from Lauren’s meeting and introducing Helen to Salonica in December of 2015.
[143] In January of 2016, Jenee continued to entertain requests for showings. She arranged for the Feng Shui master to attend in January and paid him for his services. She placed the Feng Shui certificate in the house. Sophie offered to purchase two money plants, as recommended by the Feng Shui master, and took these to Salonica. Jenee left the staging materials and lockbox at Salonica to facilitate showings.
[144] In early January, Raymond Cheung brought an interested client to Salonica after contacting Jenee about access. Cheung’s client was interested in making an offer but needed to arrange financing first.
[145] Meanwhile, in early January 2016, Lauren contacted Joanne by text to ask whether Salonica was sold yet. Joanne offered to give Lauren the “agent’s” number. Lauren asked if Joanne wanted to sell it privately. Lauren texted “If you have contract with agent, we can also use agent.” The two planned for Helen to see Salonica the next morning. Joanne did not provide Jenee’s number to Lauren or involve Jenee in the showing. Given my findings about what happened in July and December, these texts were not the first time that Lauren and Joanne had made contact over a possible buyer for Salonica. They are important because they reveal some recognition on Joanne’s part that an agent was still involved and to that extent, are consistent with Jenee’s evidence that her clients were aware and content with her continuing to market Salonica in January.
[146] Lauren arranged for another couple to see Salonica on the same day as Helen. She asked Joanne to keep this a secret from the two sets of prospective buyers. Joanne did not tell Jenee about these showings. At trial, she testified that this was because this showing had nothing to do with Jenee.
[147] After seeing Salonica, Helen was interested in negotiating further. Lauren advised Joanne that Helen was a “serious buyer” who wanted to know if there was any room for negotiation. Helen asked Lauren to convey this to Joanne.
[148] During the month of January, Joanne, Lauren, and Helen connected via text, over lunch and at the property. Helen arranged for a home inspection. Joanne and Lawrence decided on the price they hoped to receive and conveyed this information to Helen. On January 15, Joanne told Helen by text message that the “agent is still showing the house.” This is another piece of evidence that is consistent with finding that Joanne and Lawrence were content with Jenee continuing to market Salonica and find a buyer.
[149] Both Joanne and Lauren testified that Helen insisted there be no agents involved in the transaction. Helen testified she was told by Lauren and Joanne from the beginning that there was no agent. She was willing to purchase privately because she believed she would get a better price for the property if there was no commission to be paid to an agent. The texts and actions of all three make it clear that all three were content to proceed without involving any agent while knowing that an agent was still connected to marketing Salonica.
[150] Oddly, Joanne testified that by January 18, 2016, she had told Sophie about the private offer, the amount which Helen was willing to pay, and that no agent would be involved. Joanne testified that Sophie told her that “she understood [that Joanne wanted to sell privately and would not pay commission to Jenee].” Sophie testified that this did not happen. She testified that Joanne only mentioned that she had a friend who was interested in Salonica. I accept Sophie’s evidence.
[151] Joanne’s evidence about telling Sophie these details about Helen was not consistent with logic or with other portions of Joanne’s evidence. Joanne testified that she did not want Jenee to act as their agent as of the December meeting. Joanne testified that the reference in her text messages to Lauren to the “agent” referred not to Jenee, but to her friend Sophie, who by this point had her real estate licence. Joanne testified that Sophie was familiar with the property and she wanted to introduce her to Lauren so she could sell the house. This evidence implies a change of agent (according to Joanne) by early January. However, that evidence is inconsistent with other portions of both Joanne and Lawrence’s testimony. They insisted that from the beginning of LA#1, in the spring of 2015, that Sophie and Jenee were partners on the listing and had been representing them together all along to sell Salonica.
[152] Joanne’s evidence about who she was referring to as her agent was also inconsistent with her later actions in mid January of 2016. Throughout January, Jenee kept Joanne updated on the progress of the Cheung offer, including communicating with her between January 14 and January 27, 2016. There was nothing in any of the communications to suggest that Sophie had become Joanne and Lawrence’s new choice of agent, to the exclusion of Jenee.
The Final Two Offers to Purchase Salonica
The Cheung Offer of January 27, 2016
[153] By mid-January of 2016, the Cheung offer was in process. Jenee testified that on January 23 she sent a message to Joanne to let her know that the agent whose client had seen Salonica in January had called her to say that his client would be putting in an offer by “next week.”
[154] By this point Sophie had told Jenee that Joanne said she had a friend who was also interested in Salonica. On January 23, Jenee sent a text to Joanne about the Cheung offer, saying that she expected an offer the following week. Jenee also wrote to Joanne she “had heard” from Sophie that Joanne had somebody else interested in putting in an offer. Jenee said that was “great” and commented “Feng Shui works.” On the same day, Jenee advised Raymond Cheung that a friend of the owner had inspected the house but had not put in an offer. She asked Raymond Cheung if his client wished to put in an offer before them.
[155] On January 27, 2016, Raymond Cheung emailed his client’s offer to Jenee. That afternoon, after hearing about the forthcoming offer from Jenee, Joanne texted Lauren:
Joanne: There is an offer that just came in. I don’t know the price yet.
Agent just told me on phone.
Can I call you?
Lauren: OK
[156] Lauren testified that she did not remember if Joanne called her. If Joanne did call her, she did not remember what they talked about. I found this surprising considering Lauren’s extensive detail recalled supporting Lauren’s recollection about the early meetings with Helen. Also, given Lauren’s interest and involvement throughout January in negotiating a transaction with Helen and Joanne, a competing offer arising near the end of those negotiations would undoubtedly be of interest and a memorable event.
[157] Joanne’s evidence at trial was that at this stage, she had already confirmed that she would be selling privately to Helen for a price of $4.05M. She testified that she had conveyed this information to Sophie and her intention that there would be no agent involved in that sale. Joanne testified that she told Sophie that because she had made an appointment with Helen for January 28, she did not want to meet with Jenee on January 27, 2016.
[158] Joanne testified that Sophie pressured her to hear about the Cheung offer as a back-up. None of this is consistent with the evidence of Jenee or Sophie, nor with Joanne’s actions or attitude toward Jenee. She had no difficulty in refusing to entertain offers in the past. I did not accept Joanne’s evidence that she was reluctant to meet to hear the Cheung offer. I reject her evidence that she told Sophie about her plan to meet with a private purchaser on January 28, 2016 prior to entertaining the Cheung offer on January 27.
[159] Joanne agreed to meet with Jenee and Sophie to discuss the Cheung offer on the evening of January 27, 2016. The three of them met at Salonica in the early evening. Lawrence was not present because he was travelling. Joanne signed all the documents on her behalf and as Power of Attorney for Lawrence.
[160] At their meeting, Joanne told Jenee and Sophie that she had a friend who was very interested in the property, presumably referring to Helen. Jenee said that after 200 showings, if someone was expressing interest, it was important to see something on paper. Jenee mentioned the possibility of multiple offers. Joanne agreed to see the Cheung offer.
[161] The Cheung offer was for $3.88M. After discussing it with Jenee, Joanne signed it back at $4.18M. She also initialled a change in the irrevocability date from January 29 to January 30. Joanne testified she was surprised that Jenee asked her to sign LA#3. She testified that the only reason she agreed to do so was based on Jenee telling her that LA#3 would only apply to the Cheung offer. Joanne testified she was told that she could treat the Cheung offer as a “back -up” to the private offer coming from Helen. Joanne testified that Jenee kept “promising it (LA#3) would not affect the private sale.”
[162] Sophie’s evidence of the Cheung offer meeting was that Jenee asked Joanne whether there was an offer coming from the other person who was interested, and Joanne told them, “not yet.” Joanne signed back the Cheung offer and seemed happy with it. She told Sophie and Jenee that if the “other person” did not give her an offer, she would tell the person that she would take “this one.” Sophie testified that they discussed the listing agreement period and that Joanne changed to the date from April 28, 2016 to March 28, 2016. Joanne also said that she did not want the listing to be posted on the MLS, because she did not want people to see that she was selling the house. Sophie testified that Jenee said that this could be done as an exclusive listing. The meeting lasted until approximately 8:30 or 9:00 p.m.
[163] Both Sophie and Jenee denied in cross-examination that Jenee described the Cheung offer as a “back-up offer” or that Jenee had suggested that LA#3 would only apply to the Cheung offer. I accepted their evidence. It is consistent with the documents, and with Jenee’s understanding that her clients wanted to have her continue to work on their behalf to sell Salonica.
[164] I rejected Joanne’s evidence about what she was told when she signed back the offer and signed and amended LA#3. I find that Joanne knew what the listing period was and its implications. By this stage she had signed two other listing agreements. Jenee’s evidence of what was in the listing agreements was consistent with the face of those documents. Joanne had withheld information from Jenee throughout January of her negotiations, meetings, and the involvement of Lauren in the efforts to find a private buyer.
[165] It would not have made commercial sense for Jenee to have described Joanne’s signed back offer to purchase as a “back-up offer” for an upcoming private offer. Had Joanne’s sign back been accepted by Raymond Cheung’s client she would not have been able to accept the private offer which according to her was confirmed and being made the following day. If Joanne had trusted Jenee with the knowledge that another serious buyer was emerging, Jenee might have coordinated the two competing offers and assured Joanne of the most competitive price. However, Joanne opted to trust Lauren and tried to exclude Jenee from any involvement in the private offer, as she did throughout January.
[166] I find that Joanne conducted parallel negotiations and entertained two offers to improve her chances of selling Salonica. At the time of the Cheung offer, although the signs were promising, I find that Joanne did not know for certain that Helen would make an offer in writing. Although she insisted that there was a plan to receive an offer on the following day, the details of the events of the 27th and 28th are not consistent with Joanne’s other evidence. I consider that evidence next.
The Evening of January 27, 2016: Late Night Discussions about the Helen Geng Meeting on January 28, 2016
[167] Joanne and Lauren exchanged text messages after Joanne signed back the Cheung offer. These messages are terse and refer to calls. Again, Lauren’s formerly precise memory failed her as to whether certain calls took place on this evening and if they did, what the two of them discussed.
[168] At 9:03 p.m. on January 27, Joanne texted as follows:
Joanne: I am back. Can I call you?
Lauren: Ok.
After 46 minutes had passed, the two exchanged further texts:
Lauren: Let’s wait for her call tomorrow.
Joanne: Call me if you have news on her.
Lauren: Ok.
At 10:56 p.m. Lauren texted Joanne to ask if she could call her. Joanne responded, “OK.”
[169] In cross-examination, Lauren testified that “she” and “her” in the above text messages referred to Helen. She said she “thought” they were talking about when Helen would come in the morning of the 28th. Lauren testified she was waiting for the call to tell her the time of the meeting.
[170] Lauren also testified that she “thought” that Helen said she would prepare and bring an offer on January 28 because Lauren was busy on the 26th and 27th. She said that the late-night call to Joanne was to remind her to bring someone to the meeting who speaks English to help her.
[171] Helen testified that the plan to meet was made on January 26, but later said she could not recall that detail. She testified that it was decided “sometime” after she was at Salonica on January 26 with her designer.
[172] If, as Joanne earlier testified, Sophie knew all about these arrangements and was content with Joanne’s actions, why would Joanne not have been communicating with Sophie about this meeting? Why would Joanne not have said to Sophie at the time of the Cheung offer that a meeting was scheduled for the following day, to receive the private offer? For that matter, if as Joanne had testified, Jenee also knew by now that she was entertaining a private meeting and had assured Joanne that LA#3 would have no impact on that offer and that the Cheung offer could serve as “back-up,” there would be no reason for Joanne not to let Jenee know of the timing of the private offer meeting either. None of that happened. Instead, the final communication described on the evening of January 27 took place after these various calls and texts between Lauren and Joanne.
[173] Counsel for the Plaintiffs suggested that Lauren was not waiting for a confirmation of time late in the evening, but instead was trying to broker the transaction with Helen and complete the deal, knowing that Joanne had signed back the Cheung offer. This would have put Lauren in a position to tell Helen that if she did not offer at the price that Joanne had asked ($4.05M) the house might go to another buyer. Lauren denied that suggestion.
[174] I am not satisfied that Lauren testified completely or credibly about these calls. The tone and timing of the texts suggest rather more urgency than confirming administrative details about a pre-scheduled meeting. The timing of the texts, the last-minute arrangement of the meeting and the late-night call to Sophie suggest there was more to these communications. I conclude that Lauren and Joanne were not being open or forthright in their evidence about their discussions and plans relative to the private offer of January 28, 2016 and the Cheung offer that Joanne had signed back.
[175] At 11:30 p.m. on January 27, Joanne called Sophie at home. She asked Sophie to come to Salonica at 9:00 a.m. the next morning. Sophie testified that she was surprised to receive such a call late in the evening. She asked why. Joanne told her that a private person was making an offer at 9 a.m. Sophie said that Joanne should let Jenee know because Jenee was the agent. Joanne told Sophie that she should not mention Jenee at the meeting or that Sophie herself was a licensed real estate agent. She told Sophie that she should be quiet at the meeting. Sophie did not ask any more questions but agreed to meet Joanne the next morning at Salonica.
The Private Offer of January 28, 2016
[176] I accept the account of Sophie as to the events of January 28, 2016. Where her evidence is contradicted by Lauren or Joanne, I prefer her evidence to theirs. This is based on my earlier findings of credibility of all three witnesses and by the consistency in her account with the events leading to January 28 and the actions of Joanne after January 28, 2016.
[177] On the morning of January 28, Sophie testified that she drove from her house in Scarborough to Salonica to arrive by 9 a.m. There, she spoke with Joanne who told her not to say anything about an agent, because the buyer does not want an agent. Joanne instructed Sophie to say that she was “just a friend.” Sophie testified that she was surprised, and curious but that she did not have a chance to ask more questions.
[178] Helen and Lauren arrived next. They all sat at a table in the house. Joanne asked Sophie to explain to her what was in the offer. Sophie also made changes and additions to the offer as directed by the others. When they got to the third page with the notices for appointing a listing brokerage, Sophie testified that Lauren instructed her repeatedly and in a directive voice to “cross it out.” Lauren said that they did not need an agent. Sophie looked at Joanne, wanting her to wait on taking such a step. Joanne did not say otherwise, and Sophie complied. She wrote in the furniture to be included and Helen signed and initialled all the changes.
[179] After the private offer was completed, Joanne took it with her. Joanne suggested they all go to lunch. On the way to lunch in the car, Sophie suggested that Joanne should show the Helen offer to Jenee. Joanne agreed and gave the private offer to Sophie.
[180] Sophie went to the lunch. During the lunch she chatted with Helen about Buddhism. They exchanged contact information. Sophie left the lunch early and called Jenee. She told Jenee about the private offer. They met after the call, and she gave Jenee the private offer.
[181] Jenee testified that Sophie called her to say that Joanne had been given an offer and wanted Jenee to look at it. Jenee in turn showed it to a colleague at the brokerage who raised questions about the portion which crossed out the agent commission provisions. Jenee drove to Joanne’s home and pointed this out to Joanne. She reminded Joanne that she had signed an offer the night before and suggested she check with her lawyer about this. Joanne told Jenee “don’t worry.” Jenee gave the private offer to purchase back to Joanne.
[182] Joanne went to her lawyer’s office that day. She sought advice on the private offer from Helen, but she did not show the Cheung offer or LA#3 to her lawyer. After that meeting, Joanne texted Lauren to tell her that the “document is fine.” Joanne asked Lauren if “we” should sign back the document tomorrow. Ultimately, she signed back the private offer. Joanne did not tell Jenee that she had sold the house to Helen until early February, when Jenee contacted her with another potential buyer interested in seeing the house.
[183] Jenee testified that she felt uncomfortable with what had happened with Joanne and the private offer. That evening Sophie and Jenee met over dinner. Sophie testified she tried to reassure Jenee that Joanne and Lawrence would not “cut her out” of the transaction because of the hard work Jenee had done, and the costs she had prepaid for them. She vouched for their trustworthiness.
[184] Sophie called Joanne from the restaurant to confirm this. Joanne told Sophie “don’t worry” She told her that she would pay Jenee something like $10,000. She also said that she would pay Lauren something. She asserted it was a private transaction and had nothing to do with Jenee. Then Joanne raised her voice at Sophie, insisting that Helen had wanted a private deal without any agent. Sophie said she panicked. She told Jenee what had happened, who was upset and who said to Sophie, “I told you.”
[185] Sophie testified that she told Jenee that Joanne had justified the private sale based on the buyer insisting there be no agent involved. Sophie decided to contact Helen and called her from the restaurant. Sophie asked Helen why she did not want an agent involved. Helen said that if there was an agent, she would not get the price she wanted to pay. Sophie explained that the seller pays the agent. Helen repeated her answer and hung up.
[186] Helen testified that she could not remember details of the call from Sophie that evening. She testified that Sophie told her that the price Helen had offered was the highest price that had been offered for Salonica, that the agent did a lot of work to try and sell the property and that if Joanne did not use an agent, it was not fair to the agent. Helen said that she felt uncomfortable with this call, because she knew Sophie and Joanne were good friends.
[187] In cross-examination Sophie was questioned about her call to Helen and whether she had tried to sabotage the deal. Sophie testified that she had always wanted Joanne to sell Salonica, she did not want to ruin the deal but that she could not believe that Joanne would use Jenee in this way after all her efforts and time spent trying to sell Salonica. I accept her evidence on this point. Her actions were consistent with her evidence in that she tried to help all involved in the transaction for a positive outcome.
[188] In contrast, Joanne testified that at the time of the private offer, Sophie knew and was “okay” with a private transaction that would benefit Joanne by saving commission. This evidence was inconsistent with Joanne and Lawrence’s evidence that Sophie was a partner on the transaction and expected to receive part of the commission. It was also inconsistent with Sophie making the call to Helen on the night of the private offer to try and find a way for Jenee to receive her commission. If she had known about Joanne’s plan since January 18, 2016 (as Joanne testified) then it would not be logical for Sophie to have then tried to undo the terms of a private transaction that according to Joanne, Sophie was content to have proceed.
[189] Sophie testified that she was confused and surprised by what had happened. When she returned home on the evening of the 28th, Joanne called her, angry. Sophie told Joanne that she had wanted to help. She told Joanne that she did not want her to make a mistake. Joanne accused Sophie of betraying her, of causing her to “lose face.” Joanne confirmed this call, asserting that Sophie had been wrong to call Helen because it could have interfered with the transaction. Joanne testified that Sophie should have been happy for her because Salonica had sold. Sophie testified that she was sad, tired and distressed with all that had happened.
[190] In the aftermath of the events of January 28, Sophie tried to mediate a settlement among the parties. Her husband became involved as did Lawrence. None of it worked. Sophie sent texts to Joanne that went unanswered. She reminded Joanne of the things she had done for her out of friendship. Eventually Joanne told her she would never trust her again and would get a lawyer to sue Sophie. Sophie was a Defendant in this action until a few months prior to trial when she settled with Joanne and Lawrence.
[191] After Jenee discovered that Joanne had accepted a private offer, she demanded payment of her commission. Joanne showed demand letter to Lauren. She also sent a copy of LA#3 to Lauren. Lauren texted a question to Joanne as to whether LA#3 should be voided. She commented to Joanne about LA#3, “It’s a big joke!” Finally, Lauren texted that if the Plaintiffs could not produce the Form 801 with Joanne, the buyer and with the buyer’s agent’s signature, then “they are in big trouble.” Lauren testified abut these communications, that she was doing more than she should to help her friend. These communications reveal Lauren’s ongoing interest in helping Joanne avoid paying commissions to Jenee.
[192] I accept Jenee and Sophie’s evidence that the Cheung offer was presented to Joanne along with a listing agreement which reflected on its face what Jenee told Joanne: that to have a valid presentation of the offer, Jenee needed to protect herself by way of a listing agreement in writing. The notion that it would only apply to that offer is not supported by the words of the agreement, the actions of the parties at the time of the events or after the fact. I found Sophie and Jenee to be credible witnesses and accept their evidence of what took place on January 27 and 28, 2016.
[193] On February 6, 2016, Jenee heard from another interested buyer. She texted Joanne with this information. Joanne responded, “House is sold, No more showings, Sorry.”
[194] On February 21, 2016, counsel for Jenee sent the demand letter claiming commission on the sale of the property. Litigation commenced shortly after, leading to this trial.
[195] Based on my findings of fact, there is no basis to void LA#3 which was signed by Joanne on January 27, 2016. It was a valid agreement to pay the real estate commission for a sale of Salonica during the listing period, on the terms as agreed and reflected in the agreement. By its terms, commission was payable to the Plaintiffs for any “valid offer to purchase the property from any source whatsoever obtained during the listing period.” The listing period was shown as January 26, 2016 to March 28, 2016. Joanne signed the document on January 27, 2016. I find that was the start of the listing period. The private offer was made in writing and presented on January 28, 2016. Accordingly, this offer fell within the listing period and upon acceptance in February, commission was due and owing to the Plaintiffs.
[196] The Defendants also submitted that because there was evidence from Joanne and Helen that the sale price was agreed to verbally before January 28 and the “offer” from Helen was made before LA#3 was signed. I find that there was no “valid offer” until Helen brought it in writing on January 28. The private offer was made on January 28, 2016 after a period of negotiations, inspections and discussions that included Joanne and Lawrence making it known that the price they would accept from Helen was $4.05M. On January 28, Helen offered this amount in writing and the parties agreed to the other items to be included on that date. I reject the submission that the private offer was made before Joanne signed LA#3 on January 27, 2016.
[197] The Defendants submitted in addition to the forgoing that there were many other reasons for rejecting the evidence of Jenee and Sophie. I have already indicated in the analysis that I reject the testimony of the Defendants where it conflicts with that of Jenee and Sophie, because I did not find them credible witnesses. There was nothing in the additional arguments about credibility made on behalf of the Defendants that undermined my confidence in the evidence of Jenee and Sophie.
C. If Jenee and Real One were not entitled to commission under any listing agreement, were Joanne and Lawrence Unjustly Enriched by their failure to pay commission to the Jenee and Real One?
[198] The Plaintiffs claim in the alternative that they are entitled to be paid commission for the sale under the common law equitable doctrine of unjust enrichment. This doctrine does not require a valid contract. It focuses on circumstances where it would be unfair for a party to be enriched by the efforts or services of another.
The test for unjust enrichment consists of three elements:
a. Was the Defendant enriched?
b. Did the Plaintiff suffer a corresponding deprivation?
c. Is there an absence of a juristic reason for the enrichment?
See: Garland v. Consumers’ Gas Co., 2004 SCC 25 (S.C.C.); Moore v. Sweet 2018 SCC 52.
[199] The Plaintiffs made no submissions at the close of trial on this aspect of their claim. Counsel for Joanne and Lawrence noted that it appeared this aspect of the claim had been abandoned. Counsel for Joanne and Lawrence provided closing submissions and two reasons as to why the Plaintiffs cannot seek a remedy under the doctrine of unjust enrichment. The Defendants argue in the alternative that improper conduct by the Plaintiff Jenee disentitles her from this remedy, or there is a statutory bar to such relief by virtue of s. 23 of Ontario Regulation 567.05 under the Real Estate and Business Brokers Act.
[200] I will address both submissions briefly for completeness.
[201] The Defendants Joanne and Lawrence submit that Jenee’s improper conduct relative to the claim disentitles her from this equitable relief. Given my findings of fact and credibility, I reject the submission that Jenee is not entitled to seek relief based on unjust enrichment. I found Jenee to be a credible witness. I accepted her evidence that she did not deceive or deal unfairly with her clients. To the contrary, I found that her clients, with the aid of Lauren, concealed their intentions during their negotiations with Helen while relying on Jenee’s work, her expertise, and her presentation of a viable offer to purchase Salonica on January 27, 2016.
[202] The second submission rests on section 23 of Ont. Regulation 567/05 under the REBBA. That section prescribes commission entitlement in real estate transactions and requires a written agreement signed by or on behalf of the person required to pay the commission.
[203] The Defendants rely on s. 23 and the jurisprudence which has found that any claim for a commission on the sale of a property must be by way of the provisions of s. 23, and in particular there must be a written contract: See Briardown Estates Inc v Peters, 2010 ONSC 1040 at para 106; William Allen Real Estate Co. v. Robichaud (1990), 1990 CanLII 6884 (ON SC), 72 O.R. (2d) 595 (H.C.J.), aff'd (1993) 1993 CanLII 8637 (ON CA), 11 O.R. (3d) 734 (C.A.):
[204] Here, I have found that there were two written agreements providing for the payment of commission that applied. On that basis, the Plaintiffs need not resort to the doctrine of unjust enrichment. Had I found there was no written agreement providing for the payment of commission, then the reasoning in Briardown and William Allen Real Estate to the prior versions of s. 23 of the O. Reg. 567/05 would apply.
[205] I find that the Plaintiffs have not established that they are entitled to a payment of the commission on the sale of Salonica under the doctrine of unjust enrichment.
D. Did Lauren attempt to interfere with the contractual relationship between Jenee, Joanne and Lawrence?
[206] The Plaintiffs argue that Lauren committed the tort of unlawful interference with their economic relations with Joanne and Lawrence, by unlawfully trading in real estate contrary to the Real Estate Business Brokers Act (REBBA). I disagree. The tort of unlawful interference requires that a Defendant commit an unlawful (tortious) act against a third party, which would be actionable by the third party against the Defendant. In doing so, the Defendant must have intentionally inflicted economic injury on the Plaintiff.: A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12, [2014] 1 SCR 177.
[207] Helen had no cause of action in tort against Lauren, because the “unlawful act” alleged is that Lauren breached a licensing statute, REBBA. Canada has not recognized a freestanding tort of statutory breach: The Queen (Can.) v. Saskatchewan Wheat Pool, 1983 CanLII 21 (SCC), [1983] 1 SCR 205 at p. 228.
[208] I find that the Plaintiffs have not established that Lauren committed the tort of unlawful interference with economic relations.
E. Did Lauren Zhan induce Joanne and Lawrence to breach their contract with Jenee and Real One?
[209] The Plaintiffs submit that they have established that Lauren induced Joanne and Lawrence to breach their contract. The four elements of the test for the tort of inducing breach of contract are well stated in Drouillard v. Cogeco Cable Inc., 2007 ONCA 322, 86 O.R. (3d) 431, at para. 26. I apply each element to the findings of fact made above:
A Valid and Enforceable Contract: I have found that LA#2 which expired on December 18, 2015, and LA#3, in force as of January 27, 2016 were valid, enforceable contracts between the Defendants, Joanne and Lawrence, and the Plaintiffs, Jenee and Real One Realty.
An Awareness of the Contract: I have found that Lauren was aware of LA#2 from well before it expired in December of 2015. She referred to a private sale in her first recorded contacts with Joanne. She was part of a deceptive showing in July and avoided giving her name to listing agent, Jenee. Joanne testified that she learned that she could sell privately from Lauren. Lauren introduced the eventual buyer, Helen, to the property in December of 2015. I rejected her evidence that this took place after LA#2 expired. These findings establish that Lauren was part of an effort to assist Joanne and Lawrence in finding a private buyer and avoiding payment of commission to the listing agent.
An Intention to Procure the Breach of the Contract and a Breach of the Contract: Based on my findings of fact and credibility I concluded that Lauren intended to assist Joanne and Lawrence to breach LA#2 by introducing a private buyer to the property during the period of LA#2. I found that she was engaged in deceptive showings to others as early as July, and that her evidence as to the timing of showing Salonica to Helen was not credible. By testifying to the contrary, acting as a go-between during January and advising Joanne as to the timing of the inspection and attending at the offer presentation, Lauren shepherded the transaction through to the final steps, including having Sophie cross out provisions concerning payment of commission, which was in fact payable under the hold-over clause in LA#2. Further, Lauren’s after the fact conduct and comments to Joanne that LA#3 was a “joke” and should be voided, is further evidence of her intention to secure a deal for Joanne that excluded payment of commission to Jenee. Lauren’s role was integral to the breach of the contract by Joanne and Lawrence.
Damages Suffered: Jenee and Real One Realty suffered damages in the form of the unpaid commission that was due and owing under LA#2.
F. If Lauren attempted to interfere with the contractual relationship or induced Joanne and Lawrence to breach their contract with Jenee and Real One, what damages if any, should be paid to Jenee and the Realty?
[210] The Plaintiffs’ damages are the commission payable on the sale of Salonica to Helen, being 4.5% of the sale price plus HST of 13%, which is $205,942.50.
Is this an appropriate case for punitive damages?
[211] The Plaintiffs included a claim for punitive damages but did not make any final argument on how the findings they sought might support such an award.
[212] The Defendants, Lawrence and Joanne, submitted that even if the court found in favour of the Plaintiffs, that this is not an appropriate case for punitive damages on the basis that there was no conduct on their part warranting punishment, deterrence, and denunciation: Whiten v. Pilot Insurance Co, 2002 SCC 18.
[213] This case was fact specific. The parties would benefit from having these findings of credibility and fact to inform any additional submissions on whether punitive damages are appropriate. If the claim for punitive damages is being pursued by the Plaintiffs, Counsel to the parties will exchange and file further written submissions on the question of punitive damages, maximum 6 pages, plus applicable caselaw, within 30 days of the date of these reasons for judgment. If counsel require a formal timetable, they may request such a timetable in writing.
[214] If counsel for the Plaintiff choose not to pursue the issue of punitive damages further, they are asked to inform the Defendants and the court that no further submissions will be forthcoming.
VI. Conclusion
[215] The Plaintiffs have established their claim against the Defendants on a balance of probabilities. The Plaintiffs are entitled to payment by the Defendants of the commission earned on the sale of 3 Salonica in the amount of $205,942.50.
[216] If the parties are unable to agree as to costs, they may serve and file written submissions on costs, no longer than 5 pages in length, along with their submissions on punitive damages, if applicable, within 30 days of the date of these reasons for judgment, with counsel to work out reasonable dates for the exchange of costs submissions. If counsel require a formal timetable, they may request such a timetable in writing.
Leiper J.
Released: February 5, 2021
[^1]: The parties referred to themselves in their pleadings and at trial using other first names: Joanne uses the name “Joanne,” and Yu De Xing uses the name “Lawrence.” Shu Feng Sophie also uses the name “Sophie.” I have referred to the parties by these names to correspond with the record and pleadings.