Focus On

REAL ESTATE AGENTS AND BROKERS - Entitlement to commission - Conditions

Thursday, April 02, 2020 @ 8:56 AM  


Lexis Advance® Quicklaw®
Appeal by the defendants from the judgment of $540,000 in favour of the respondents for breach of contract. The appellant Sadr was a real estate developer and the sole shareholder, director and officer of the corporate appellants, Great Lands Corporation and Great Land (Halton Hills) Industrial Park (“GLHH”). GLHH and the respondents entered into a listing agreement for the subject land. The agreement expired and was not renewed. The trial judge found the parties subsequently agreed to a binding contract requiring the appellants to pay a commission should an offer procured by the respondents be accepted by the appellants. The respondents engaged in discussions with the ultimate purchaser about purchasing the property. The purchaser reached out directly to the appellants and agreed to purchase the property for $10.8 million, without the respondents’ involvement. The appellants refused to pay a commission to the respondents after the sale closed. The trial judge found the appellants were jointly and severally liable to the respondents for the commission. She found Sadr and both corporations were parties to the contract.

HELD: Appeal dismissed. It was open to the trial judge to find that a binding contract was formed. There was no reason to interfere with the trial judge’s conclusion that the payment of the commission under the terms of the contract was not conditional on the execution of a formal commission agreement or that the respondents introduced the purchaser to the appellants. The contract was not barred by the Real Estate and Business Brokers Act. The fact that one of the respondents was deregistered after the transaction was of no consequence. The trial judge was entitled to find the correspondence between the parties was sufficient to constitute a signed agreement. The trial judge’s conclusion that Sadr and Great Lands Corporation were liable for the commission as parties to the contract was supported by the record.

Hurst Real Estate Services Inc. v. Great Lands Corp., [2020] O.J. No. 603, Ontario Court of Appeal, K.M. van Rensburg, M.L. Benotto and A.L. Harvison Young JJ.A., February 12, 2020. Digest No. TLD-March302020008