Ontario Superior Court of Justice
Court File No.: 24-00715473
Date: 2025-01-15
Between:
HomeLife/Cimerman Real Estate Ltd.
Applicant
— and —
Liberty Market Tower Inc.
Respondent
Applicant Counsel: Andrew Paterson, Siavash Shekarian
Respondent Counsel: Matthew B. Lerner, Alexa Jarvis
Heard: September 12, 2024
Judge: Mark L. Koehnen
Reasons for Judgment
Introduction
[1] The applicant, HomeLife/Cimerman Real Estate Ltd. (“Homelife”), seeks a declaration that the respondent is obliged to pay it a commission of $42,145.14 in relation to the sale of unit 1502 in a project developed by the respondent known as Liberty Market Tower located at 171 East Liberty St. in Toronto. The applicant says it was acting for the purchaser of that unit.
[2] The respondent, Liberty Market Tower Inc. (“Liberty”), defends saying it has paid the commission to a different agent, Frank Nejad, with whom the respondent had signed a Co-Operating Broker Referral Agreement indicating that Nejad represented the purchaser. The respondent says it relied on a decision of the Real Estate Council of Ontario (“RECO”) which it interpreted as legitimizing the payment to Nejad.
[3] The dispute arises out of confusion concerning the identity of the real estate agent acting for the purchaser. Given the amount at issue, the parties chose to proceed by application, and even then, an application process that was proportionate to the amount involved. As a result, the record was less than perfect. There were, for example, no affidavits from or Rule 39 examinations of either the purchaser or the two real estate agents involved. Those are the people with direct first hand knowledge of the issues giving rise to the confusion about who was acting for the purchaser. The only people to deliver affidavits were a representative of the applicant, Lori Cimerman, and the sales manager of the respondent, Anastasia Testani. Although Testani was involved in some of the decisions the respondent made, both affidavits contain information and belief about significant, disputed issues. Given the amount involved and the desire of the parties for a proportionate process, I nevertheless decided to proceed on the record as the parties prepared it.
Background Facts
[4] It is useful at the start to set out a chronology of the events at issue.
[5] November 6, 2019: Liberty enters into an exclusive listing agreement with Baker Real Estate Inc. as its agent to sell the units in the Liberty Market Tower.
[6] January 1, 2020: The purchaser, Mehdi Ajorlou, enters into a Realtor and Buyer Representation Agreement with Homelife’s agent Saeed Ahmadipour pursuant to which Ajorlou agreed that Homelife would represent him in the purchase of a single-family residence in the Greater Toronto Area until January 1, 2021.
[7] March 1, 2020: According to Cimerman, on information and belief, Ajorlou and Ahmadipour attended the Liberty Market Tower sales centre together on March 1, 2020 and entered into an agreement of purchase and sale with Liberty for unit 1502. The agreement of purchase and sale does not have any spot on it which identifies the purchaser’s agent.
[8] Shortly after March 1, 2020, Testani says, on information and belief, that Ajorlou attended Baker’s sales office together with Nejad and delivered a postdated cheque for his deposit. Ajorlou also provided a copy of his driver’s license to verify his identity and Nejad provided a copy of his business card. Nejad was entered on Baker’s record as the real estate agent of record.
[9] March 20, 2020: Baker writes to Ajorlou indicating that certain postdated deposit cheques have not yet been delivered and are outstanding.
[10] March 27, 2020: Nejad responds to Baker with a copy to Ajorlou saying he has spoken to the purchaser in the last few days and asks for an extension of 90 days to deliver the second deposit because of the Covid pandemic. It is unclear on the record how Nejad became involved in this request. The email from Liberty to Ajorlou does not appear to copy Nejad although a copy of Nejad’s business card is included below the Baker signature on the email. It may be that the email was copied to Nejad and that this is simply not clear on the copy in the record, or it may be that Ajorlou conferred with Nejad about the issue.
[11] March 27, 2020: Baker replies to Nejad with a copy to Ajorlou extending payment of the second deposit from March 31 to April 30 and indicating that an amendment will have to be signed via DocuSign to reflect the change in payment date.
[12] March 28, 2020: Ajorlou says he became aware that Nejad had misrepresented to Liberty that he was Ajorlou’s real estate agent. This evidence comes from Cimerman on information and belief from Ahmadipour.
[13] There appear to be additional communications after March 28, 2020 between Ajorlou and Liberty about changing Ajorlou’s agent from Nejad to Ahmadipour. Those communications are not in the record.
[14] May 4, 2020: Testani advises Ajorlou that the Board has come back with the following decision: They would like Ajorlou to try to pay half of the second deposit and the remaining half in 45 days. Once the second deposit is paid in full, Liberty “will have Nejad removed from your agreement and in turn replace him with your realtor, once we have proper confirmation from you in writing on who is representing you in this transaction.”
[15] June 19, 2020: Liberty’s lawyers write to Ajorlou terminating the agreement of purchase and sale because of Ajorlou’s failure to pay the deposits. The letter advises that Liberty will now deem those deposits that were paid to be forfeited and will hold Ajorlou liable for any deficiency on the ultimate sale of the unit.
[16] June 22, 2020: Ajorlou writes Testani to pay some of the deposits which have been delayed. Liberty responds saying that Ajorlou’s agreement has been terminated as a result of which it needs to be reinstated. Ajorlou responds asking to have agreement reinstated and refers back to previous conversations to replace the real estate agent and advises that he is dealing with Nejad through a complaint to RECO.
[17] June 23, 2020: Ajorlou writes to Testani advising that he will drop off the cheque today and adds that he wants Liberty to include his agent in their records and that
Nejad he was never my agent and I have no idea how did she come to my deal. (sic)
The email included a screenshot of a business card of Saeed Ahmadipour.
[18] June 23, 2020: Testani responds to Ajorlou copying Ahmadipour indicating they have forwarded the information to Baker “to make the change for the agent information change”.
[19] June 23, 2020: Ajorlou sends a second email to Testani indicating that he has dropped off cheques for the deposits and asks that Ahmadipour be copied on all further emails. Ajorlou also asks Liberty for whatever information Nejad provided to demonstrate that he acted for him.
Testani responds advising Ajorlou to email Baker or have his agent email Baker requesting the information he seeks.
[20] Around the same time, Testani says in her affidavit that she spoke with Samantha Hung of Baker regarding Ajorlou’s agent of record and advised her that no steps should be taken until Liberty received confirmation from Nejad releasing Ajorlou as his client. It does not appear that Testani passed that information on to Ajorlou or Ahmadipour.
[21] June 25, 2020: Hung emails Testani to advise that Baker changed the information in the system to record Ahmadipour as the agent of record but that Nejad has asked for the broker referral payment which was not issued to him. [1] Hung adds “we need to find out if the client actually signed a Buyer Representation Form with Nejad.” [2]
[22] Testani responds a few minutes later telling Hung to get a sales agent involved because she does not “have the mental capacity for this.” She instructs Hung to speak with Ajorlou and Nejad to get the information she needs. After receiving a further email advising her that “Shirin” is now handling Nejad, Testani tells Hung:
- Go to Nejad and request the information you need
- Go to the Ajorlou and request
- Written email from [Nejad] releasing this purchaser
- Written email from purchaser bringing on new agent, which we have.
[23] July 8, 2020: Baker sends Ahmadipour a broker referral form which it asks him to verify for correctness, sign and send back to Baker. The form has a place for Liberty’s signature. No signature was affixed to the copy that was sent to Ahmadipour.
[24] Testani says in her affidavit that: “In or around July 2020” she spoke with Hung about the broker referral fee. Baker was continuing to receive requests from Nejad for payment of the fee. Testani was receiving multiple phone calls from Ajorlou requesting a change of the agent of record. She instructed Hung not to issue any referral fees until they received confirmation from RECO about Nejad’s involvement in the transaction because she had understood from Ajorlou that he was addressing the matter before that tribunal.
[25] September 29, 2020: Hung forwards Testani a copy of the first RECO decision dated August 12, 2020. That decision states:
In this specific situation, there is insufficient evidence to support the allegation that you failed to explain to Mr. Ajorlou the existence of a 10-day cooling off period and the deposit structure for purchase of the subject property.
Further, it cannot be substantiated that Mr. Ajorlou was unaware of his representation options available during the transaction for the subject property. Although a formal representation agreement was not executed, it was clear that your role was clearly facilitating a sale between a willing buyer and seller and the negotiations occurred in the company of and under guidance of an additional registrant friend of Mr. Ajorlou, that had accompanied him to the sales office.
[26] Testani responded to Hung saying that the RECO letter “shows that Nejad was representing” Ajorlou. Testani then instructed Hung to “cancel the other co-op agreement that was sent for signing and issue Nejad his for the unit.” Vanessa responded confirming “Got it. Changing everything back to Nejad!”
[27] There is no evidence in the record to suggest that Ajorlou or Homelife were advised of this reversal.
[28] March 31, 2022: Liberty finalized its Co-Operating Broker Referral Fee Agreement with Nejad pursuant to which Liberty agreed to pay Nejad a commission on the sale of the unit. I was not pointed to any evidence to suggest that either Ajorlou or Ahmadipour were informed of this either before or after it occurred.
[29] July 28, 2022: The transaction closes.
[30] September 30, 2022: Liberty pays the commission of $40,196 to Nejad.
[31] March 8, 2023: Ahmadipour and Ajorlou attend at Liberty office to discuss the commission payment. Testani advises them they would have to schedule a meeting with her to discuss the matter. Later that day Ajorlou sent an email to Testani to set up a meeting. Testani responded the same day saying she
…will review the file and determine what information I am able to share with you and determine if a further meeting is necessary after our review.
[32] April 19, 2023: Homelife becomes aware that the commission was paid to Nejad.
[33] April 20, 2023: Cimerman writes to Liberty’s principal, provides a summary of events, complains about the payment to Nejad and asks for payment of its commission.
[34] April 25, 2023: Testani responds saying:
a. Baker is responsible for all sales and sales related administration and that Cimerman should contact Baker.
b. Baker and a letter from RECO do not show any obligation to Ahmadipour and that Liberty has no record of a commission agreement with him.
c. All commission agreements are confidential between the vendor and the cooperating agent as a result of which Liberty is conflicted in providing further details to Homelife.
[35] Testani’s statement that Liberty has no record of a commission agreement with Ahmadipour is accurate in only the strictest of senses. Liberty clearly had a record of: (i) instructing Baker to record him as agent of record; (ii) telling Ajorlou that this had been done; and (iii) either Liberty or its agent Baker had a record of a commission agreement being sent to Ahmadipour and a signed version being returned.
[36] June 7, 2023: RECO released a second decision in relation to Ajorlou’s complaint about Nejad. It summarizes the complaint as Nejad being involved in the transaction without authorization because he did not have a signed agreement authorizing him to act as Ajorlou’s agent. RECO concluded that there was “sufficient corroborating evidence available to support the allegations” and that Nejad “appears not to have fully met the standard of conduct expected of” him.
Analysis
[37] Homelife submits that the foregoing facts should be analysed legally from the perspective of offer and acceptance. Homelife submits that an offer is a complete statement of the terms of the contract that is extended with the intention that the other side accept it. A contract will be found to have been made where an offeree accepts something that can “reasonably and objectively be said to constitute an offer.” The issue is not to determine what each side actually thought subjectively “but what each side reasonably understood the other to mean.” [3]
[38] Liberty submits that the facts should be analysed from the perspective of privity of contract. In this regard it submits that it never entered into an agreement with Homelife and that all relevant steps in this matter were taken by Baker, not Liberty.
[39] Both offer and acceptance and privity are relevant concepts. In my view, both issues resolve in favour of Homelife.
[40] I turn first to Liberty’s submission that it was Baker that took all relevant steps in this proceeding, not Liberty. Even if that were correct, which I do not accept, it is of no avail to Liberty. Liberty retained Baker as its agent and remains liable for steps that Baker took on behalf of Liberty. Moreover, as is clear from the factual chronology set out earlier, Liberty, through Testani, instructed Baker on all material steps.
[41] Further, with respect to privity of contract, Liberty submits there was never a signed commission agreement between Liberty/Baker and Homelife as a result of which the application should be dismissed. Liberty relies on two cases in this regard.
[42] The first is Pemberton Holmes Realty Ltd. v. Miller, 2008 BCSC 1790 where an agent showed a potential purchaser a property. The vendor then cancelled the listing to complete renovations. Approximately one year later, the purchaser made an offer for the same property without the assistance of an agent. The court dismissed the agent’s action for a commission holding that there was no privity of contract between the agent and the vendor at the time of the sale.
[43] The second case on which Liberty relies for its privity of contract argument is Parwinn Developments Ltd. v. 375069 Alberta Ltd., 2000 ABQB 31, where two agents secured a purchaser for the vendor’s property but neither agent was named on the commission agreement. The court held the agents were not entitled to a commission because they were not parties to the purchase contract.
[44] Both cases are distinguishable. In both cases, the court found there was no commission or brokerage agreement. Although there was some confusion in the case before me about the competing roles of Nejad and Ahmadipour, when one cuts through it all, Liberty entered into two relevant agreements: one between Liberty and Ajorlou and a second between Liberty (through Baker) and Homelife. Under both agreements Liberty agreed that Homelife would be paid the commission on the sale of the unit.
[45] Turning first to the agreement between Liberty and Ajorlou. After Ajorlou had objected to Nejad’s involvement, Testani wrote Ajorlou on May 4, 2020 saying that the Board had come back with a solution which is that once Ajorlou paid the second deposit, Nejad would be removed as his agent once Liberty had proper confirmation from Ajorlou that Ahmadipour was representing him. It could be said that Liberty’s commitment in this regard was rejected or terminated because the offer also required Ajorlou to pay the deposit within 45 days and the agreement was terminated when Ajorlou failed to do so.
[46] The agreement of purchase and sale was then revived, however, on June 23, 2020. When Ajorlou wrote Liberty on June 22 and 23, 2020 to pay the deposits and revive the agreement, he referred back to the communications about replacing Nejad with Ajorlou and stated that he would deal with Nejad through the RECO process. Testani replied on June 23, 2020 acknowledging Ajorlou’s emails and saying:
I have forwarded to Baker to make the change for the agent information change. (sic)
[47] The key to contractual interpretation is to determine “what each side reasonably understood the other to mean.” [6] Ajorlou could only reasonably understand this to mean that Liberty had agreed to revive the agreement of purchase and sale, accept his deposit cheques and change the agent from Nejad to Ahmadipour as Ajorlou had requested. Testani’s email has no qualifications or conditions in it. Testani was a representative of Liberty, the principal in the relationship with Baker and someone who could instruct Baker. Indeed, on June 25, 2020 Baker confirmed with Testani that it had changed the agent in its records from Nejad to Ahmadipour. I find that this exchange of emails and the delivery of deposit cheques constituted an agreement between Liberty and Ajorlou that the agent would be changed to Ahmadipour.
[48] The second agreement is the Cooperating Broker Referral Agreement that Baker sent Homelife and that Homelife returned to Baker signed and unchanged. Liberty submits that this did not amount to a binding agreement because the document was “never agreed to nor executed” by Liberty. [7] I do not accept that submission. Baker sent the agreement to Homelife on Liberty’s instructions. The agreement was sent as part of Liberty’s commitment to Ajorlou to change the agent from Nejad to Ahmadipour. When Liberty instructed Baker to change the agent, it knew or ought to have known that Baker would send Ahmadipour the standard form Cooperating Broker Referral Agreement that was used for the project. In those circumstances it could not be said that Liberty did not agree to the document. I find that Liberty did agree to the document.
[49] Liberty then submits that the Cooperating Broker Referral Agreement is unenforceable because it is not signed by Liberty. Liberty makes several arguments in this regard.
[50] First, it argues that Cimerman admitted on cross-examination that “in most cases” Homelife receives commissions only when the agreement is actually signed by both the agent and the vendor. I do not find this persuasive. The admission that in “most cases” a commission is received in relation to a signed agreement means that there are cases in which commissions are paid without a signed agreement.
[51] Second, Liberty relies on the Small Claims Court decision in Sharda v. Yarlagadda, which Liberty submits stands for the proposition that an unsigned agreement is unenforceable and meaningless. As always, however, everything depends on context. In Sharda, the plaintiff real estate agent had an introductory meeting with a buyer at the end of which she left a blank Buyer Representation Agreement with him. The buyer never signed the agreement. The buyer thought that the agent would help him look for a home in the Kitchener Waterloo area. At the time, the buyer already had an agent and was looking for homes in the Durham region. [9] He decided to expand his search to Kitchener because he had relatives there. When the buyer bought a home in Durham region through his Durham agent, the Kitchener agent claimed a commission. The court rejected the Kitchener agent’s claim because the Buyer Representation Agreement had never been signed with the Kitchener agent. In those circumstances the court found that there was no meeting of the minds between the Kitchener agent and the buyer. The Kitchener agent believed she was acting for the buyer generally, the buyer believed she was acting for him only in the Kitchener Waterloo area. In the case before me there was a meeting of the minds. Ajorlou, Liberty and Baker all agreed that the agent would be changed from Nejad to Ahmadipour. That change was then actually made.
[52] Third, Liberty submits that there was no binding Co-Operating Broker Referral Agreement between itself and Homelife because the email accompanying it contained a statement to the effect that “Executed copies will be sent to you only for files that are complete.” Liberty submits that the agreement was neither executed nor complete. I do not accept that submission. The full text of the passage Liberty quotes is:
Executed copies will be sent to you only for files that are complete (i.e. All postdated checks received, mortgage preapproval is vendor approved, all purchaser information provided)
[53] All of the elements listed to complete the file were completed by definition because the sale closed. There was therefore, no basis for Liberty to refuse to sign on the face of the email or on the face of the Co-Operating Broker Referral Agreement. Indeed, as noted, Liberty had already implemented the Co-Operating Broker Referral Agreement by having Baker change the broker of record.
[54] Liberty submits that the situation was complicated because of Nejad’s claim to the commission and that this complication provides “important context” for Testani’s emails to Ajorlou including the one stating that Baker would change its records. Liberty states in its factum:
Clearly, Liberty’s intention was for Baker to investigate this issue further, not simply make the change unilaterally… [10]
[55] As noted earlier, however, contract interpretation is not about what each side actually thought subjectively “but what each side reasonably understood the other to mean.” [11]
[56] If Liberty’s subjective intention was to have Baker investigate the issue and not make the change unilaterally, it did not communicate that intention to Ajorlou or Homelife. The only message Ajorlou and Homelife received was that Baker had changed its records and that Homelife should return the signed Co-operating Broker Referral Agreement. There was no further qualification at that time or at any other time until after Liberty paid the commission to Nejad.
[57] Liberty then submits that even if the blank Co-operating Broker Referral Agreement constitutes an offer, Homelife is not entitled to the commission because it did not meet the requirements of the agreement which provides:
To be eligible for the Commission, the Purchaser must be accompanied by the Real Estate Sales Person on his/her first visit to the Liberty Market Towers Sales Centre and both the Co-Operating Broker and Liberty Market Tower Sales Representative must complete a worksheet for the Purchaser; and the Purchaser shall not have previously registered with the Vendor, failing which the Parties agree that there shall be no Commissions payable.
[58] Liberty submits that Homelife cannot satisfy these conditions because Baker’s records show that Ajorlou was accompanied by Nejad during his first attendance. Baker’s records do not actually show that. Rather, Baker’s records simply contain a business card from Nejad and a work sheet that contains Nejad’s name. There was no evidence from anyone at Baker to describe how that came about. The record also discloses that Ahmadipour also accompanied Ajorlou on the first attendance. The first RECO decision of August 12, 2020 said, among other things, that the negotiation of the agreement of purchase and sale “occurred in the company of and under guidance of an additional registrant friend of Mr. Ajorlou, that had accompanied him to the sales office.” Moreover, this point simply ignores the commitment Liberty made to Ajorlou to change the agent of record from Nejad to Ahmadipour.
[59] Liberty next submits that it relied on the first RECO decision in paying the commission to Nejad.
[60] The RECO letter does not provide Liberty with authority to pay the commission to Nejad. The letter indicates that Nejad did not have a signed representation agreement with Ajorlou. Ahmadipour had such an agreement. A signed representation agreement was a critical factor for Baker and Liberty. Recall that on June 25, 2020 when the discussion arose between Baker and Liberty about switching the agent back from Ahmadipour to Nejad, Baker had written to Testani saying “we need to find out if the client actually signed a Buyer Representation Form with Nejad.” [12] There is nothing in the record to suggest that such a form exists. The evidence is in fact to the contrary.
[61] The purpose of the RECO letter was not to determine which of two agents was entitled to a commission on the sale. The purpose was to respond to a complaint that it appears Ajorlou made about Nejad to the effect that Nejad failed to explain the existence of a 10 day cooling off period and the deposit structure for the property.
[62] Liberty’s right to rely on the RECO letter must also be assessed in light of its commitment to Ajorlou and Ahmadipour to register the latter as agent of record. The RECO letter does not authorize Liberty to breach commitments it had made to others nor does it require Liberty to pay a commission to Nejad. The most Liberty could say about the letter is that it created ambiguity about who was the agent. In those circumstances Liberty could have paid the commission into court and let Ajorlou/Ahmadipour on the one hand and Nejad on the other sort this issue out in legal proceedings. The correct course was not to breach an agreement it had made with Ahmadipour and Ajorlou and unilaterally pay Nejad without even advising Ajorlou and Ahmadipour. It is noteworthy in this regard that neither Baker nor Liberty had ever signed a Co-operating Broker Referral Agreement with Nejad until after it unilaterally changed the agent back from Ahmadipour to Nejad.
[63] Finally, Liberty argues that Homelife has pursued the wrong party and that it should have pursued Ajorlou or Nejad. It notes that according to the Buyer’s Representation Agreement between Homelife and Ajorlou, the latter is contractually obligated to compensate Homelife if it is not paid a commission by the seller. I do not find this persuasive either. In many cases, an applicant may have actions against a number of parties. It remains up to the applicant to choose which party or parties it wishes to pursue. Even if Homelife has an action against Ajorlou or Nejad, that does not mean that it does not also have an action against Liberty.
Conclusion and Costs
[64] For the reasons set out above I find that Liberty had a binding agreement with Ajorlou to change the agent of record from Nejad to Ahmadipour. I also find that Liberty had a binding agreement with Homelife to register Ahmadipour as the agent of record. I therefore grant Homelife’s application and order Liberty to pay Homelife a commission in the amount of $42,145.14.
[65] Both sides posted cost submissions on Case Center. Homelife is entitled to its costs on a partial indemnity scale which it asks me to fix at $13,958.26 including disbursements and HST. Liberty’s costs outline sets fees and disbursements at $16,700.39. I have reviewed Homelife’s cost outline and am satisfied that the time spent was reasonable and therefore fix costs at $13,958.26 payable by Liberty to Homelife within 30 days as requested.
Released: January 15, 2025
Mark L. Koehnen
Endnotes
[1] I infer that Nejad took the position that a part of the commission was due at this stage and the lion’s share was due on closing.
[2] Email from Hung to Testani dated June 25, 2020 at 4:23 PM, Testani affidavit exhibit G.
[3] Richter v. McKeachie, 2009 BCSC 288 at para. 3 quoting John Swan, Canadian Contract Law, 1st ed., LexisNexis 2006.
[4] Pemberton Holmes Realty Ltd. v. Miller, 2008 BCSC 1790
[5] Parwinn Developments Ltd. v. 375069 Alberta Ltd., 2000 ABQB 31
[6] Richter v. McKeachie, 2009 BCSC 288 at para. 3 quoting John Swan, Canadian Contract Law, 1st ed., LexisNexis 2006.
[7] Liberty factum para. 35
[9] The two regions are a considerable distance from each other. Kitchener is approximately 60 minutes’ drive west of Toronto. Durham is on the east side of Toronto. Given the distance between the two, it is unlikely that a single agent would be active in both regions.
[10] Liberty Factum para. 14.
[11] Richter v. McKeachie, 2009 BCSC 288 at para. 3 quoting John Swan, Canadian Contract Law, 1st ed., LexisNexis 2006.
[12] Email from Hung to Testani dated June 25, 2020 at 4:23 PM, Testani affidavit exhibit G.