A three-judge panel of the Ontario Court of Appeal has upheld a decision by the Ontario Superior Court of Justice to award Burlington-based Apex Results Realty more than $155,000 in unpaid commissions plus costs for the purchase of two Mississauga properties in 2012.
The case first went to court in 2018 over unpaid commissions of 2.5 per cent to Apex salesperson Naeem Rahman, for two properties sold for about $5.5 million by defendant Sharief H. Zaman. Zaman’s closely held corporations Eminence Living Inc. and Higher Living Development Inc. were also named as defendants.
Rahman and Apex Results had a real estate contract with Zaman and his corporations under a buyer representation agreement (BRA) – a standard form used by real estate brokerages and their sales representatives throughout Ontario. Rahman met all of the contractual obligations of the BRA, Bob Van de Vrande, broker of record, Apex, told REM.
Seminal to the court decision is that the BRA contract was upheld, says Walter Wellenreiter of Wellenreiter LLP, Apex’s lawyer. “It protects their commission fees when dealing with people who attempt (in bad faith or otherwise) to cut them out of a deal,” thereby breaching the BRA.
“It’s a commercially significant decision,” Wellenreiter added. He says sales reps and brokers “need to know how important it is to sign the document (BRA) and do it properly because then it is enforceable.”
Van de Vrande, who is unaware of any decision like it over a commercial deal, said the ruling is “very important” for the real estate industry.
The Ontario Court of Appeal upheld the Superior Court of Justice ruling to award Apex the commissions of $155,092 and court costs of $58,855 plus interest and an additional $8,000 in costs.
The motion judge dismissed Zaman’s argument that the summary judgement was inappropriate because he counterclaimed for substantial damages based on alleged negligence on the part of the respondent. The motion judge said: “Counsel did not make any submissions to the court with respect to the disposition of the counterclaim. Hence, I will make no ruling with respect to it.”
The case was originally heard last year when the judge rejected Zaman’s claims that “he did not understand the agreement because he suffered from dyslexia . . .”
The judge also threw out the defendant’s claims that one of the properties had a different buyer representation agreement and that “there were oral amendments to the agreement that the vendor would pay the commission” on the other property.
The judge also rejected Zaman’s claims that Rahman failed to inform Zaman that the commissions were payable as soon as possible after the sales as required by the agreement.
The appellate court “correctly” dismissed Zaman’s new claims because they had not been addressed in Superior Court, added Van de Vrande.
He says he is not aware of any other cases of this magnitude where the BRA was a keystone to the award.
At press time, Apex had not received any money from the defendant who has been “non-responsive” about payment. It will go to court for collection, Van de Vrande says. “We’re hoping to collect the funds on behalf of our salesperson in the next six months.”
His advice to real estate salespeople is to do their paperwork properly and keep detailed and accurate notes. Agents must make sure buyers are aware of his or her obligations and receive a copy of the BRA, he says.
Don Procter is a contributing writer for REM.
