



COURT OF APPEAL FOR ONTARIO

CITATION: Fenwick v. Concierge Auctions, ULC, 2017 ONCA 889

DATE: 20171121

DOCKET: C63800

Doherty, LaForme and Paciocco JJ.A.

BETWEEN

Allan Fenwick

Applicant (Appellant)

and

Concierge Auctions, ULC
and Bennett Jones LLP

Respondents (
Respondent
)

Ronald G. Slaght and Patrick Healy, for the appellant

Julia E. Schatz and Scott Azzopardi, for the respondent

Heard: October 19, 2017

On appeal from the judgment of Justice Anne M. Mullins of
    the Superior Court of Justice, dated April 25, 2017, with reasons reported at
    2017 ONSC 2514.

Paciocco
    J.A.:

INTRODUCTION

[1]

The Weilands had been attempting, without luck, to sell their grand but
    heavily encumbered cottage. In 2016 they decided to try selling the cottage by auction
    and contracted with Concierge Auctions, ULC, a luxury real estate auction
    company, under an Auction Marketing Agreement (the Sellers Contract). The
    Sellers Contract contemplated that the ultimate buyer would likely be
    responsible for paying the auction fee (the Buyers Premium), but there were
    exceptions. Most notably, the Weilands would have to pay the Buyers Premium,
    if the Weilands refused to close after the auction produced an agreement of
    purchase and sale.

[2]

The Fenwicks saw an ad posted by Concierge and decided to bid. In order
    to do so the Fenwicks had to sign a Bidder Registration Agreement (the
    Bidders Contract). In the Bidders Contract they agreed to pay a Buyers Premium
    to Concierge if they proved to be the high bidder, unless the sale was not
    consummated because of default by the Weilands. The Fenwicks paid a total
    deposit of $430,000 into escrow to secure the Buyers Premium, should they have
    to pay it.

[3]

After Mr. Fenwick offered the highest bid, he executed an agreement of
    purchase and sale (the First Purchase and Sale Contract) that the Weilands
    had pre-signed. When the Weilands learned what the high bid was  $4,300,000
    minus a rebate of $350,000  they were not happy. They claimed that the sale
    price was too low to enable them to pay off the encumbrances on the cottage,
    and to grant clear title. When the closing date came, the Weilands refused to
    close.

[4]

The Fenwicks immediately demanded the return of their $430,000 deposit
    from the escrow agent. They also threatened the Weilands with a lawsuit, and began
    to negotiate with them directly. Before long, the Fenwicks and Weilands arrived
    at a second agreement of purchase and sale (the Second Purchase and Sale
    Contract). That sale closed the next day.

[5]

When Concierge learned that the Fenwicks had purchased the property
    directly from the Weilands, it refused to agree to the release of the Buyers Premium
    deposit. Concierge claimed an immediate right of payment once the Fenwicks
    acquired the property. The Fenwicks brought an application against both Concierge
    and the escrow agent, demanding the return of the deposit. Concierge
    cross-applied for a declaration of entitlement to the deposit under the Bidders
    Contract, or as damages.

[6]

Concierge ultimately won before the application judge. On April 25,
    2017, she concluded that the two purchase and sale contracts were effectively
    one continuous agreement, and that since the sale closed, the Fenwicks had to
    pay Concierge the Buyers Premium according to the terms of the Bidders
    Contract.

[7]

Mr. Fenwick appeals that decision. I would allow the appeal. In my view,
    the application judge did not interpret the Bidders Contract correctly.
    Properly interpreted, that contract exempted the Fenwicks from payment of a fee
    to Concierge once the Weilands refused to close the sale as required by the First
    Purchase and Sale Contract. Simply put, the application judge permitted a sale
    not provided for by the Bidders Contract and a closing event not contemplated
    in the Bidders Contract, to trigger an obligation to pay under the Bidders
    Contract. In doing so she erred.

[8]

I would therefore declare that Mr. Fenwick is entitled to the payment of
    the $430,000, now paid into court.

MATERIAL FACTS

A.

The Auction Contracts

[9]

The majestic cottage in Lake of Bays, Ontario, was held in the name of
    Deidre Weiland and Romac Enterprises, a company controlled by Deidre Weilands
    husband, Mark Weiland. What could not be seen from the sprawling cottage
    shoreline was that more than $4,300,000 in mortgage financing had been secured
    against the property, and approximately $4,300,000 in debt remained
    outstanding. As imposing as those numbers are, if the Weilands managed to sell
    the property for their current list price of $6,999,000 their equity return
    would be substantial. The only problem was that the cottage property had been
    listed for sale for several years, and was not selling, even though the
    Weilands had dropped the price substantially.

[10]

In
    2016, the Weilands decided to try to sell the cottage by auction, still
    expecting a tidy return. They entered into a Sellers Contract with Concierge to
    conduct the auction. In that contract they agreed that a no reserve bid
    auction would be conducted. In other words, the Weilands agreed to enter into a
    purchase and sale contract with the high bidder in the amount of their bid,
    regardless of the amount of that bid.

[11]

Concierge
    contends that the Weilands told them that less than half of the face value of
    the mortgages on title was still outstanding. What is clear is that the
    Weilands represented in the Sellers Contract that if a purchase and sale
    contract was achieved at the auction, they could and would transfer free and
    clear title to the property on closing.

[12]

The
    Sellers Contract also set out provisions to see Concierge paid. Unlike a realtor,
    under the standard form Sellers Contract, Concierge did not depend entirely on
    a successful sale for their fees, and would not look exclusively to the sellers
    for payment of their fees. Concierge would contract both with the sellers and
    with bidders. Depending on contingencies outlined in the respective agreements,
    either the sellers or the high bidder, or both, would pay Concierge when all
    was said and done.

[13]

The
    standard form Sellers Contract provides initially for an upfront payment by
    the seller of a non-refundable $55,000 engagement fee. However, in an
    Addendum to the standard form Sellers Contract, the Weilands managed to
    negotiate out of having to pay an engagement fee. Concierge was content to
    gamble either on the property being sold within the contract period, or at
    least a purchase and sale contract being achieved at the auction  events that
    would trigger additional, more remunerative payment obligations on the part of
    either the Weilands or the high bidder.

[14]

Specifically,
    the Sellers Contract signed by the Weilands provided for a Buyers Premium
    to be paid to Concierge if the auction produced a purchase and sale contract.
    That Buyers Premium would be in the minimum amount of $250,000, or 10% of the
    high bid for the property should that 10% exceed $250,000.

[15]

Under
    the terms of the Sellers Contract, the high bidder would be expected to cover
    the Buyers Premium unless the sale did not close because of the intentional
    actions of the Weilands, in which case the Weilands would be obliged to pay it.
    The Weilands also agreed to pay the Buyers Premium if the property sold before
    the auction or within 120 days of the auction.

[16]

The
    material terms, found in s. 5 of the Sellers Contract, read as follows:

The successful bidder will be required to pay the Buyers
    Premium to Concierge if the Property is sold at Auction, and the Buyers
    Premium shall be deemed earned upon the conclusion of the Auction. In the
    event that the Property is sold prior to the Auction, Owner will be obligated
    to pay Concierge the Buyers Premium. In the event that the Property is not
    sold at the Auction (or the Auction is cancelled and this Agreement is
    terminated) and is contracted to be sold or otherwise transferred by Owner
    during the one hundred and twenty (120) day period after the expiration of this
    Agreement, Owner will be obligated to pay Concierge the Buyers Premium. After
    execution by Owner and buyer of a Purchase and Sale Contract, if the sale of
    the Property does not close due to the intentional actions of Owner or its
    agents or assigns, Owner shall pay Concierge, in addition to the Engagement
    Fee, the Buyers Premium as if the Property had sold for the contracted sale
    price.

[17]

To
    ensure that a Buyers Premium could be enforced against the high bidder, those
    who wished to bid had to agree in a Bidders Contract to make that payment. Deposits
    were also required. Section 3 of Concierges standard form Bidders Contract
    states, in material part:

Buyer shall pay to Concierge a Buyers Premium equal to ten
    percent (10.00%) of the High Bid, plus HST (being the harmonized sales tax).

Buyer acknowledges and agrees that the Buyers Premium is
    deemed earned upon conclusion of the Auction and shall be held by [the escrow
    agent] and disbursed to Concierge by [the escrow agent] upon closing. If the
    sale of the Property is not consummated for any reason other than default by
    the Seller, the Buyers Premium shall nevertheless be due and payable to
    Concierge. The Buyers Premium is not a real estate commission; it is the fee
    that Concierge charges to Bidder for bringing the Property(s) to auction.
    Concierge is not involved in any way in connection with the closing of any real
    property transaction and all such functions will be handled exclusively by
    third party real estate brokerage or legal professionals.

B.

The Fenwicks Acquire the Property

[18]

With
    a Sellers Contract executed by the Weilands in hand, Concierge set out to
    attract bidders for the on-line Instant Gavel auction it had scheduled to end
    on July 25, 2016. An advertisement in the Globe and Mail attracted the
    Fenwicks. The Fenwicks decided to bid in Mr. Fenwicks name. Mr. Fenwick therefore
    signed the required standard form Bidders Contract with Concierge on July 21,
    2016.

[19]

The
    Bidders Contract contained the s. 3 payment terms reproduced in para. 17 above.
    As required in the Bidders Contract, the Fenwicks wired a deposit sum of
    $100,000 to the escrow agent to help secure the Buyers Premium in the event it
    would have to be paid.

[20]

The
    Fenwicks also decided to take advantage of an incentive that was provided for
    in the Bidders Contract, designed to promote a starting bid of at least
    $3,500,000. By agreeing to bid that amount, the Fenwicks were promised a 10%
    discount from the Weilands. And so Mr. Fenwick opened with a $3,500,000 bid on
    the understanding that if he was the highest bidder in the auction and the sale
    closed, $350,000 of the contract price would be rebated to him by the Weilands.

[21]

Mr.
    Fenwicks ultimate bid of $4,300,000 proved to be the high bid when the online
    auction closed. On the next morning, July 26, 2016, the First Purchase and Sale
    Contract, pre-executed by the Weilands, was delivered to Mr. Fenwick accepting
    an offer in that amount. Mr. Fenwick signed it, and as required by the Bidders
    Contract, he delivered a further sum of $330,000 to the escrow agent to
    entirely secure the Buyers Premium of $430,000 he expected to pay.

[22]

Almost
    immediately the sale fell into jeopardy. The Weilands were unhappy with the
    winning auction bid, which fell far shy of what they had been expecting. They
    let it be known that they would be unable to close because they could not pay
    off the mortgages on the cottage property, given the purchase price.

[23]

Mr.
    Fenwick moved to protect his interests. On July 29, 2016, he registered a
    caution on title, along with the First Purchase and Sale Contract. In order to
    accomplish this, he paid the land transfer tax on the purchase price. He would
    be eligible to have that land transfer tax payment refunded if the transfer did
    not take place and if he did not take measures to enforce the agreement.

[24]

On
    August 23, 2016, in response to the Weilands threat not to close, counsel for
    Concierge wrote to the Weilands reminding them that if they did not close they
    would be held accountable according to the terms of the Sellers Contract for
    the Buyers Premium.

[25]

The
    Fenwicks proceeded as if the deal was going to close, including by tendering
    payment, but on the date set for closing in the First Purchase and Sale
    Contract, August 24, 2016, the Weilands refused to do so. Counsel for Mr.
    Fenwick threatened to sue both Concierge and the Weilands and demanded that the
    escrow agent promptly refund the $430,000 deposit, as the sale had not closed.

[26]

The
    escrow agent decided that the Fenwicks request for a return of the deposit was
    premature. Its position was that, given that the First Purchase and Sale
    Contract was registered on title and the Fenwicks said they were suing for
    specific performance, it was not clear that the sale would not close.

[27]

In
    the meantime, the Fenwicks continued to negotiate a resolution directly with
    the Weilands. On September 8, 2016, a settlement was reached. The Second
    Purchase and Sale Contract was executed, this time between Ms. Fenwick and Ms.
    Weiland and Romac Enterprises. Facially, the sale price was for the same amount
    as the auction bid, $4,300,000, but this deal did not provide for a $350,000
    rebate to the Fenwicks, and Ms. Fenwick agreed to pay the Weilands legal fees
    arising from the sale. It is also possible that fewer chattels were included
    than in the First Purchase and Sale Contract.

[28]

The
    sale closed promptly on those terms the next day, September 9, 2016, and the
    property was registered in Ms. Fenwicks name. The registered transfer document
    stated that the land transfer tax was previously paid.

[29]

In
    the meantime, Mr. Fenwick continued his efforts to secure a refund of the
    $430,000 deposit that had been paid. Concierge refused to consent to its
    release, claiming that the sale had now closed, entitling Concierge under the
    Bidders Contract to the immediate receipt of the $430,000 Buyers Premium.

[30]

In
    response, on September 16, 2016, Mr. Fenwick brought an application against
    Concierge and the escrow agent for the return of the $430,000 deposit.

[31]

In
    November, Concierge cross-applied for a declaration of entitlement to the
    $430,000 as an amount payable under the Bidders Contract, or alternatively, as
    damages for breach of contract, unjust enrichment, or
quantum meruit
.
    The deposit was paid into court.

[32]

That
    same month, November 2016, the Weilands declared bankruptcy, leaving the
    Fenwicks as the only realistic source of payment for Concierges fees.

C.

The Decision below

[33]

The
    application judge ultimately held that Concierge could not rely on its unjust
    enrichment and
quantum meruit
claims because the treatment of the funds
    was governed entirely by contract.

[34]

The
    application judge did, however, accept Concierges submission that the
    renegotiated Second Purchase and Sale Contract between the Weilands and Ms.
    Fenwick was effectively an extension of the First Purchase and Sale Contract.
    Reasoning by analogy from case law dealing with liability for real estate fees,
    she held that the two purchase and sale contracts were effectively one
    continuous agreement. The Fenwicks continuous intention to close the
    transaction throughout provided the necessary link.

[35]

Specifically,
    the Fenwicks made efforts to have the First Purchase and Sale Contract close
    even after the Weilands defaulted, by tendering to close, registering a
    caution, and paying the land transfer tax on the contract amount. They then showed
    their continued determination to close their purchase of the cottage by ultimately
    entering into the Second Purchase and Sale Contract for the same property, for
    the same base price, albeit without a $350,000 rebate.

[36]

The
    application judge allowed that, had the Second Purchase and Sale Contract truly
    been distinct from the First Purchase and Sale Contract, the Fenwicks would not
    have been accountable for the Buyers Premium because the Weilands had balked
    at closing. Since the two agreements of purchase and sale were, effectively,
    one continuous agreement, however, Concierge was entitled under the terms of
    the Bidders Contract to payment of the Buyers Premium from the Fenwicks.

ISSUES

[37]

Mr.
    Fenwick appeals to this court, urging that the application judge erred in fact
    and law. Although the grounds of appeal are layered, there are essentially two
    general issues to be determined:

(1)

Did the application judge err in
    interpreting Mr. Fenwicks obligation to pay the Buyers Premium under the
    Bidders Contract?

(2)

Did the application judge err in
    treating the two purchase and sale contracts as if they were one agreement?

[38]

In
    my view, the standard of review to be applied in resolving these issues varies.

[39]

A
    standard of correctness applies to the interpretation of the Bidders Contract.
    This contract is a contract of adhesion, or a standard form contract, because
    those who wish to bid in an auction must agree to the preprinted terms used by
    Concierge, on a take it or leave it basis. Since the same contract is used for
    all of its auction bidders, a decision on the interpretation of this contract
    has precedential value; the same clauses should be given the same meaning in
    different cases. Moreover, there is no factual matrix specific to these parties
    that will assist in the interpretation process of this contract. The
    interpretation of the Bidders Contract is therefore governed by the principles
    in
Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co.
,
    2016 SCC 37, [2016] 2 S.C.R. 23, and not the deferential standards applicable
    to questions of mixed fact and law that typically apply to contractual
    interpretation, as described in
Sattva Capital Corp. v. Creston Moly Corp.
,
    2014 SCC 53, [2014] 2 S.C.R. 633.

[40]

The
    question of whether there was one purchase and sale contract, or two, does not
    involve the interpretation of a standard form contract. It is a question of the
    legal characterization of the factual nexus between the two instruments, which
    I take to be a question of mixed fact and law. On that issue, a deferential
    standard of review is to be applied, although a standard of correctness is to
    be used if a legal question is readily extricable:
Housen v. Nikolaisen
,
    2002 SCC 33, [2002] 2 S.C.R. 235.

ANALYSIS

A.

THE PROPER INTERPRETATION OF THE BIDDERS CONTRACT

[41]

Mr.
    Fenwick argues that the application judge erred in interpreting Mr. Fenwicks
    obligation to pay the Buyers Premium under the Bidders Contract. He submits
    that she erred in failing to apply the exclusion contained in s. 3, and by
    failing to recognize that there are no terms under the Bidders Contract that
    would require Mr. Fenwick to pay the Buyers Premium in the event of the
    Weilands default.

[42]

Although
    I have already included the material provisions from s. 3 in these reasons, I
    will reproduce them here to give the current discussion focus:

Buyer acknowledges and agrees that the Buyers Premium is
    deemed earned upon conclusion of its Auction and shall be held by [the escrow
    agent] and disbursed to Concierge by [the escrow agent] upon closing. If the
    sale of the Property is not consummated for any reason other than default by
    the Seller, the Buyers Premium shall nevertheless be due and payable to
    Concierge.

[43]

The
    exclusion contained in s. 3 that Mr. Fenwick relies upon is the necessary
    implication that if the sale of the property is not consummated by reason of
    the Weilands default, the escrow agent is not to disburse the Buyers Premium
    it holds to Concierge.

[44]

Concierge
    responds that the application judge properly interpreted the contract and found
    that the sale was consummated, making the Buyers Premium payable under the
    clear terms of the provision.

[45]

The
    application judge did not expressly find that the sale had been consummated
    within the meaning of the Bidders Contract because she did not, in her
    decision, engage in a close examination of the provisions. Concierges
    inference that this was her finding is nonetheless a fair one. The application
    judge found that the vendors balked at closing, evidently because the proceeds
    were insufficient to give clear title, and, in an apparent nod to the
    exclusion contained in s. 3, she recognized that on the clear, unambiguous 
    words scribed by or [sic] behalf of Concierge alone, Concierge is limited to a
    remedy against the vendors. Still, the application judge felt that since the
    Second Purchase and Sale Contract was truly an extension of the First Purchase
    and Sale Contract, Concierge was entitled to the Buyers Premium deposited by
    Mr. Fenwick. That finding can only mean that the application judge considered
    the sale of the property to have been consummated.

[46]

More
    importantly, the application judges finding can only mean that she interpreted
    the consummation of the sale referred to in s. 3 as including sales terms and
    sales closings not provided for in the purchase and sale agreement that arises
    from the auction. With respect, this interpretation is not correct. When the
    Bidders Contract is read as a whole, giving the words their ordinary and
    grammatical meaning, the objective intention of the parties provided for in s.
    3 is that if the seller refuses
to close the sale
as
    required by the First Purchase and Sale Contract
,
the
    Buyers Premium is not payable from the buyers escrow deposit.

[47]

A
    number of considerations drive this interpretation. First, it is clear that the
    term sale of the Property does not refer to any sale of the property, even
    any sale between the seller and high bidder. The sale of the Property that
    the contract is addressing in s. 3 is the same sale that is referred to
    throughout the Bidders Contract, namely the sale agreed to in the purchase and
    sale contract that arises from the auction. This is apparent when the contract
    is read as a whole.

[48]

Specifically,
    the recitals to the contract open with reference to sale by auction. Section
    1 then stipulates that any bid constitutes an irrevocable offer to purchase
    the Property(s) for the full amount of the bid and that once the High Bid is
    accepted, the Bidder
is obligated to purchase the property for the amount of
    the High Bid
 (emphasis added). In s. 7, the bidder agrees if they become
    the buyer by offering the high bid they will immediately  execute the
    Purchase and Sale Contract upon the close of bidding, and this
serves as
    the definitive document for the purchase and sale of the Property(s)

    (emphasis added). In s. 12 the bidder represents that they have 
the
    capacity to close the transaction pursuant to the Purchase and Sale Contract

    (emphasis added).

[49]

The
    sale of the Property referred to in s. 3 is therefore the sale at the high
    bid price and on the terms provided for in the purchase and sale contract that
    is executed upon the completion of the auction.

[50]

Quite
    simply, the oral submission of counsel for Concierge that s. 3 contemplates any
    sale of the same property between the seller and high bidder entered into at
    any time and on any terms, simply because the auction brought the parties together,
    is untenable and untethered from the terms of the contract.

[51]

It
    is equally clear that the term, consummated is not a new concept being
    introduced into the contract for the first time. It refers to the closing of
    the sale. It is evident on a plain reading that the two sentences from s. 3
    that I quote in para. 42 of these reasons work together. They cover off the
    material contingencies. The first sentence directs that the Buyers Premium
    becomes payable to Concierge upon closing. The second sentence addresses what
    happens if the sale does not close. The use of different words  closing and
    consummated  to describe the same event does not change this. The ordinary
    and grammatical meaning of each word enables them to work as synonyms, and the
    context in which they are used shows that they were meant to work as synonyms.

[52]

Finally,
    the closing contemplated by the term consummated is not any closing. Once
    again, when the contract is read as a whole, it is clear that the closing or
    consummation that s. 3 refers to is the closing provided for in the contract of
    purchase and sale arrived at through the auction. As indicated, s. 12 of the
    Bidders Contract requires the bidder to represent that they have 
the
    capacity to close the transaction pursuant to the Purchase and Sale Contract

    (emphasis added).

[53]

Sections
    8 and 9 provide further material detail:

8.
Closing
. Closing will take place in accordance with
    the terms and conditions of the Purchase and Sale Contract.

9.
Closing Date
. The date of closing the purchase of the
    Property between the Buyer and Seller shall be the Closing Date set forth in
    the Purchase and Sale Contract. In certain cases, Seller may extend the Closing
    Date pursuant to the Purchase and Sale Contract or as otherwise negotiated between
    Seller and Buyer, in Sellers sole discretion.

[54]

It
    follows that the operative clause in s. 3, [i]f the sale of the Property is
    not consummated for any reason other than default by the seller, the Buyers
    Premium shall nevertheless be due and payable, means that if the sale agreed
    to in the purchase and sale contract does not close on the closing date
    provided for in the purchase and sale contract for any reason other than the
    default of the seller, the Buyers Premium shall nevertheless be due and
    payable. The converse, of course, is that if the sale agreed to in the purchase
    and sale contract does not close on the closing date provided for in the
    agreement of purchase and sale because of the default of the seller, the
    Buyers Premium is not due and payable under the Bidders Contract.

[55]

On
    the facts found by the application judge, the sale agreed to in the First
    Purchase and Sale Contract did not close according to the terms of the First
    Purchase and Sale Contract, because of the sellers default. Under the contract
    properly interpreted, this immediately triggered the exclusion contained in
    s. 3. Once the Weilands defaulted on the closing provided for in the First
    Purchase and Sale Contract, Concierge lost its entitlement to use Mr. Fenwicks
    escrow deposit to satisfy the Buyers Premium.

[56]

The
    fact that, after the Weilands default, the Fenwicks made sustained efforts to
    acquire the property that is the subject of the Bidders Contract, and achieved
    the acquisition of the property under broadly similar terms, does not change
    this.

[57]

I
    do not agree with Concierges position that this interpretation conflicts with sound
    commercial principles and good business sense because it enables the parties to
    voluntarily withdraw from the terms of their purchase and sale contract and to
    rearrange the deal to enable the Fenwicks to acquire the property and yet
    deprive Concierge of payment. Business efficacy can only fairly be evaluated by
    examining the two intersecting contracts that Concierge relied upon to get paid.
    If the parties were to conspire to deprive Concierge of the Buyers Fee by
    voluntarily withdrawing from the terms of their purchase and sale contract, Concierge
    would retain the right to sue the Weilands for the Buyers Premium under the
    Sellers Contract for having refused to close the auction sale.

[58]

In
    truth, it is not a commercially inexpedient standard form contract that has
    deprived Concierge of payment for the work it has done. Two things have
    conspired to do so. First, Concierge waived the Weilands engagement fee,
    choosing to incur the costs of the auction on speculation. Second, and more
    importantly, the Weilands, who clearly would have been obliged to pay the
    Buyers Premium, either because of the Weilands intentional actions in not
    closing, or because the property sold within 120 days of the auction, went
    bankrupt.

[59]

In
    my opinion the application judge therefore erred in law by operating under an
    incorrect interpretation of this standard form Bidders Contract.

[60]

With
    respect, even if this appeal had concerned a question of mixed fact and law, I
    would have found the application judge to be in error.

[61]

In
    my view it was an extricable error of law for the application judge to ask
    whether the two purchase and sale contracts were effectively one continuous
    agreement, instead of interpreting the Bidders Contract as a whole to
    determine what event exempted the buyer from the obligation to pay the Buyers
    Premium. In my opinion, the application judge committed an extricable error of law
    by failing to apply the governing principles of contractual interpretation that
    she had rehearsed earlier in her reasons:
Deslaurier Custom Cabinets Inc.
    v. 1728106 Ontario Inc.
, 2017 ONCA 293, 135 O.R. (3d) 241.

[62]

I
    would therefore allow the appeal on the first ground of appeal.

B.

The One CONTINUOUS Agreement Finding

[63]

Given
    that this appeal can be resolved on the first ground of appeal, it is
    unnecessary for me to address the second ground, and I do not purport to make
    any binding pronouncements. I wish, however, to express my reservations about
    the propriety in auction cases of reasoning by analogy from cases dealing with
    the obligation of sellers to pay real estate commissions where the seller has
    contracted directly with a buyer the agent has introduced.

[64]

The
    real estate cases, such as
Glendinning v. Cavanagh
(1908), 40 S.C.R.
    414;
McBrayne v. Imperial Loan Co.

(1913), 28 O.L.R. 653 (C.A.);
    and
William Allan Real Estate Co. v. Robichaud

(1990), 72 O.R.
    (2d) 595 (H.C.), cited by the application judge, turn on the construction of
    commission clauses that invite consideration of whether the sale that occurred,
    in substance, arose from the real estate agents efforts. These cases do not
    apply comfortably to auction contracts where the auction companys fee is for
    conducting the auction. It is not surprising that in the Bidders Contract,
    Concierge explicitly disclaimed that the Buyers Premium was a real estate
    commission. Nor is it surprising that any attempt by Concierge to provide the
    services of a real estate broker would contravene s. 4 of the
Real Estate
    and Business Brokers Act, 2002
, S.O. 2002, c. 30, Sched. C. The relative
    fees are earned for distinguishable services.

[65]

It
    seems to me that whether a subsequent sale or closing that can be linked
    factually to an earlier auction should attract obligations on any party to pay
    a fee to an auction company, should turn on the construction of the relevant auction
    contract, not on general principles addressing the evasion of fees extracted
    from contracts governing a different enterprise.

CONCLUSION

[66]

The
    appeal is allowed, the judgment of the application judge and the accompanying
    costs order is set aside, and a declaration is issued that Mr. Fenwick is
    entitled to the release of the escrow deposit, now held in court.

[67]

Costs
    of this appeal of $20,000, inclusive of HST and disbursements, are awarded to
    Mr. Fenwick, as agreed between the parties.

[68]

Written
    submissions of a maximum of three pages are invited on the award of costs in
    the initial application. The appellant, Mr. Fenwicks, submissions shall be
    filed within 15 days of the date of release of these reasons and the respondent,
    Concierge, shall have 10 days to respond.

Released: November 21, 2017 (D.D.)

David M. Paciocco J.A.

I agree. Doherty J.A.

I agree. H.S. LaForme J.A.


