



COURT OF APPEAL FOR ONTARIO

CITATION: Hurst Real Estate Services Inc. v. Great Lands

Corporation, 2020 ONCA 109

DATE: 20200212

DOCKET: C65935

van Rensburg, Benotto and Harvison Young JJ.A.

BETWEEN

Hurst
    Real Estate Services Inc. and DTZ Canada Inc., a UGL Company

Plaintiffs (Respondents)

and

Great Lands Corporation, Great Lands (Halton
    Hills) Industrial Park Corp. and Sam Sadr

Defendants (Appellants)

David A. Weisman, for the appellants

Peter Manderville and Lindsay Moffatt, for the
    respondents

Heard: December 11, 2019

On
    appeal from the judgment of Justice Bernadette Dietrich of the Superior Court
    of Justice dated September 5, 2018, with reasons reported at 2018 ONSC 4824.

REASONS FOR
    DECISION

I.

OVERVIEW

[1]

The respondents brought a claim against the appellants alleging the
    non-payment of a commission in relation to a sale of industrial real estate.
    The trial judge found the appellants jointly and severally liable to the
    respondents for breach of contract. For the reasons below, we dismiss the
    appeal.

II.

Background

[2]

Appellant Sam Sadr is a real estate developer and the sole shareholder,
    director and officer of the two other appellants, Great Lands Corporation (GLC)
    and Great Land (Halton Hills) Industrial Park Corp. (GLHH).
[1]
In March 2012, a real estate agent, David Hurst, then the principal of Hurst
    Real Estate Services Inc. (Hurst Real Estate), made inquiries into a plot of
    land owned by GLHH (a single purpose corporation) on behalf of a client. Ron Stein,
    an employee of GLC, advised that the property was not listed for sale, but a
    sale was possible if the right offer was made. Between March and October 2012, Hurst
    introduced prospective purchasers to the property.

[3]

GLHH and Hurst Real Estate eventually entered into a listing agreement
    for the land covering the period of November 2, 2012 to February 28, 2013. The agreement
    provided that a commission would be paid if an offer made prior to August 27,
    2013, was accepted and was made by a prospective purchaser introduced by Hurst
    Real Estate to GLHH during the listing period. The listing agreement expired
    and was not renewed. No purchase was made entitling Hurst Real Estate to a
    commission under this listing agreement.

[4]

Hurst engaged in discussions with Sadr and Stein, an employee of GLC, following
    the expiration of the listing period. The result of these discussions is
    disputed on this appeal, but the trial judge found that a binding contract was formed
    requiring the appellants to pay a commission of one half of the sale price over
    $10.3 million, capped at 5% of sale proceeds, should an offer procured by Hurst
    be accepted by them.

[5]

Hurst engaged in discussions with the ultimate purchaser Triovest Realty
    Advisors Inc. (Triovest) about purchasing the property. In October 2013,
    Triovest reached out directly to GLC and discussions took place without Hurst. Triovest
    purchased the property for $10.8 million. The sale proceeds were paid to GLHH,
    the owner of the property, but were transferred to other corporations
    controlled by Sadr after the sale. The appellants refused to pay a commission
    to the respondents. At the time when the sale closed, Hurst was working for respondent
    DTZ Canada Inc. (DTZ).

[6]

The trial judge granted judgment for the respondents in the amount of
    $540,000 plus HST. The quantum is not at issue on appeal. She found that a
    binding contract had formed and that the respondents were not barred from
    bringing action by the
Real Estate and Business Brokers Act, 2002
,
    S.O. 2002, c. 30, Sch. C. Further, the trial judge found that the appellants
    were jointly and severally liable for the commission. In particular, the
    individual Sadr was liable for the commission both because he had induced the
    corporation he wholly controlled to breach the contract, and because he was a
    party to the contract personally.

III.

Issues

[7]

The appellants raise the following three issues:

1.

Did the trial judge err in finding that a binding contract had formed for
    the payment of commission in relation to the sale?

2.

Did the trial judge err in finding that the action was not barred by the
Real Estate and Business Brokers Act, 2002
(the Act)?

3.

Did the trial judge err in finding both GLC and Sadr liable for the
    commission?

IV.

Analysis

[8]

The appellants have failed to establish the existence of a reversible
    error on the part of the trial judge. It was open to her to find that a binding
    contract was formed, and we agree with her that this contract was not barred by
    the Act. Her conclusion that Sadr and GLC were liable for the commission as
    parties to the contract is supported by the record.

(1)

Contractual Entitlement to a Commission

[9]

The appellants argue that the trial judge erred in finding that a
    contract had formed that required them to pay a commission on this sale. First,
    they argue that Hurst did not unequivocally accept the offer. Second, they
    argue that even if a contract was formed, that it was conditional on the
    execution of a formal commission agreement. Third, they say that even if the
    contract was not conditional on a formal agreement, Hurst was not an instrumental
    cause of the sale and is therefore not entitled to commission under that
    contract.

[10]

We disagree. These arguments challenge the trial judges findings of
    fact, which are entitled to deference and disclose no reversible error.

[11]

The trial judge found that during a meeting on April 30, 2013, between
    Hurst, Stein and Sadr, Sadr personally offered that if Hurst brought him an
    offer to buy the property that was accepted, he would split any amount over
    $10.3 million 50/50. The trial judge then found that this offer was confirmed
    and modified by an email sent the following day by Stein, using a GLC email
    signature. Stein clarified that the amount payable under the agreement would be
    capped at 5% of the sale price. The trial judge found that on May 2, 2013, Hurst,
    by reply email, accepted this offer. The appellants concede that this was a
    finding open to her on the record. We see no basis to interfere with this
    finding.

[12]

Similarly, there is no reason to interfere with the trial judges
    conclusion that the payment of commission under the terms of this contract was
    not conditional on the execution of a formal commission agreement. The May 1,
    2013, email from Stein to Hurst contains a statement that a co-op agreement
    would need to be signed. It is common ground that this refers to a formal
    commission agreement. The trial judge considered this statement and concluded
    that rather than being a condition of the contract, this was merely a reference
    to further papering. Again, these findings were open to her on the record and
    we see no basis to interfere.

[13]

Finally, with respect to Hursts role in the sale of the property, the
    trial judge found that Hurst had introduced the purchaser Triovest to the appellants
    on September 30, 2013. The appellants were not aware of Triovest before this
    introduction was made. She further found that the sale occurred as a
    consequence of this introduction and that the transaction proceeded on terms
    that were identical to those that Hurst had forwarded to the appellants in
    respect of an earlier offer. It is on the basis of these findings, which the
    appellants have failed to establish were made in error, that the trial judge
    concluded that a commission was payable under the contract as a result of this
    sale.

[14]

In summary, we find no basis to interfere with the trial judges
    conclusion that a binding contract was formed under which the respondents were
    entitled to a commission for this sale. This finding is grounded in the record
    and the appellants have failed to demonstrate that it was made in error.

(2)

The
Real Estate and Business Brokers Act, 2002

[15]

The appellants renew their argument made at trial that the respondent
    Hurst Real Estate is barred by s. 9 of the Act from bringing this action. A
    person bringing an action for real estate commission must have been registered
    under the Act or exempt from registration under the Act, at the time when the
    services were rendered. The appellants argue that because Hurst Real Estate was
    de-registered at the time of the sale, it cannot bring this action.

[16]

We disagree. The services were rendered by Hurst, first on behalf of
    Hurst Real Estate and later on behalf of DTZ. At the time when services were
    rendered by Hurst through Hurst Real Estate it was duly registered. The fact
    that it was de-registered later is of no consequence to this action.

[17]

The appellants also say that the contract violates s. 36(3) of the Act.
    This section prohibits an arrangement for the payment of commission based on
    the difference between the list price and the sale price. We agree with the
    trial judge that this submission does not assist the appellants, as the
    property was not listed when the contract was formed, nor was it listed at the
    time of sale.

[18]

The appellants further argue that the respondents cannot collect a
    commission because there is no signed agreement as required by the general
    regulation, O. Reg. 567/05, s. 23(1)(a), made under the Act. As discussed
    above, the trial judge found that the contract at issue was formed when Hurst
    replied by email to Steins May 1 email. This email correspondence included
    typed versions of each senders name, title and organization. The trial judge
    concluded that this email exchange was a signed agreement for the purpose of s.
    23(1)(a) because the respective emails ended with a typed version of the
    senders name, title and organization. The trial judge was entitled to find, in
    the circumstances, that this correspondence was sufficient to constitute a
    signed agreement. We decline to disturb this finding.

(3)

Joint and Several Liability

[19]

The appellants argue that the trial judge erred in concluding that GLC
    and Sadr were jointly and severally liable, along with GLHH, for the
    commission. We disagree.

[20]

First, it was open to the trial judge to find that GLC was a party to
    the commission agreement. The May 1 offer sent by Stein, which formed the basis
    of the contract, identified him as acting on behalf of GLC given his email
    signature, as did all of his communications with Hurst and with the purchaser
    Triovest. Further, in the text of the email itself Stein refers to the fact
    that the proceeds over $10.3 million were to be split between Hurst and Great
    Lands. Read in context, given the use of GLC logo and email signature, this
    appears to refer to GLC. GLHH, by contrast, is mentioned nowhere in the email.
    These facts are sufficient to ground the trial judges finding that GLC was a
    party to the contract.

[21]

The remaining and central issue was whether the trial judge erred in
    finding that Sadr was also personally liable and thus erred in imposing joint
    and several liability. The trial judges conclusions that Sadr was a party to
    this contract and participated in its breach are fully supported by the
    evidence.

[22]

The issue is the proper characterization of the commitment made by Sadr
    through Stein. The factual findings of the trial judge provide support for the existence
    of a covenant that binds Sadr. The trial judge found that Sadr personally
    extended the original offer for an enhanced commission agreement at his April
    30, 2013, meeting with Hurst. Though it was Stein who emailed the next day, to
    confirm and alter this arrangement, Stein testified that this offer was
    conveyed on behalf of Sadr. This is reflected in the language used in this
    email which references Sadrs intention in addition to references to the
    corporate entity. There was therefore a basis to ground the trial judges
    conclusion that Sadr was personally a party to the commitment.

[23]

The evidence demonstrates that Sadr effectively covenanted, in the
    meeting of April 30, 2013, that he would cause the enhanced commission to be
    paid to Hurst if Hurst met the conditions for payment. Sadr made the commitment
    personally, as the sole shareholder of GLC, and ultimately as the beneficiary
    of any sale of the subject lands by GLHH. As Sadr was in a position to cause or
    to withhold payment of the commission to Hurst, his decision not to pay the
    commission, and his steps to avoid payment by GLC/GLHH rendered him liable
    personally for the amount of the promised commission as damages for the breach.

[24]

Given that Sadr is liable for breach of contract as a party to the
    agreement, it is not necessary to consider whether he could also have been held
    liable in tort for inducing GLC to breach its contract with Hurst.

[25]

This ground of appeal therefore fails.

V.

CONCLUSION

[26]

The appeal is dismissed.

[27]

The respondents are entitled to their costs in the agreed upon amount of
    $22,600 inclusive of disbursements and HST.

K. van Rensburg J.A.

M.L. Benotto J.A.

A. Harvison Young
    J.A.





[1]

Despite the title of proceedings, it is common ground that the
    correct name of this corporation is Great Land (Halton Hills) Industrial Park
    Corp.


