A Realtor listed the land of the owner. An offer was accepted at $2 million with a $5,000 deposit.
The Listing Agreement provided for a commission of eight per cent of the sale price, on closing of the sale. The vendor refused to pay the balance of commission after the $5,000 deposit was applied by the Realtor to the commission. The court ruled that the Realtor’s action was a breach of contract (Listing Agreement).
Under Ontario rules, one can move the court to order a fund to be paid into court on such terms as are just. However, that rule requires that “where the party has a right to a specific fund in question” an order may be made.
Here the Realtor had not originally pleaded “trust principles” – a right to monies in trust.
The Listing Agreement did not say the commission was to be paid out of the proceeds of the sale (thereby setting up a specific fund) but simply a commission was payable on closing.
One must assert a “legal right” to the specific fund (sale proceeds) for payment of the commission to obtain a court order for proceeds paid into the court. (Sadie Moranis Realty Corporation v. 1667038 Ontario Inc., 2012 ONCA 475)
* * * * *
In another case, the plaintiff obtained a judgment against X for $30,000. That increased fivefold over the years with interest. Meanwhile, X purchased a property but the plaintiff did not enforce his judgment against the property.
Eventually X sold the property to Y. Both X and Y had lawyers involved in the sale. When Y’s lawyer did an execution search, it showed a filing against X. Because the judgment debt was originally $30,000, X falsely swore an affidavit that he was not the same person against whom the execution was named.
The plaintiff was unsuccessful in suing both X and Y’s solicitors. They were innocent and could rely on X’s affidavit so long as the judgment debt did not exceed $50,000. This is the established threshold for allowing title to pass to an innocent purchaser. Also, these lawyers did not owe a duty of care to the plaintiff for whom they did not act and to whom there was no direct relationship.
Obviously neither lawyer knew that X’s affidavit was false. Neither lawyer made any fraudulent statements, nor did they act deceitfully. (Lograsso v. Kuchar, 2009 CanLII 7093 [ON SC])
* * * * *
The Statute of Limitations in Ontario, in force since Jan. 1, 2004, sets a limitation period of two years to sue in most civil actions. However, there are exceptions and one of them involves the Real Property Limitations Act that was not repealed and remains in force.
When a mortgage of over $1 million was given to a corporation and guaranteed by E.M., on a default, the mortgagee sold the property on which the mortgage was placed. There was a deficiency between what was owed on the mortgage loan and what was recouped on the sale.
The mortgagee (lender) sued E.M. on the guarantee and the issue of the limitation period to sue arose. The Court of Appeal of Ontario ruled that the lawsuit against the guarantor of the mortgage was governed by the Real Property Limitations Act and was 10 years. (The Equitable Trust Company v. Marsig, 2012 ONCA 235)
Full case summaries are available at www.canlii.org.
Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting for builders, real estate agents and lawyers.
