In Crisafi v. Urban Landmark Realty Inc., 2018 ONSC 191, the Ontario Superior Court of Justice addressed a summary judgment motion brought in a real estate litigation matter and provided guidance on when the Court will use its enhanced fact-finding powers set out in the 2010 amendments.
This case involved a claim by a real estate agent against his former real estate brokerage for unpaid real estate commissions in the amount of $60,000. The brokerage took the position that the agent breached his contractual, statutory and fiduciary duties to its clients and was negligent in handling four transactions which caused it to suffer damages.
The brokerage argued that the agent failed to properly advise one of its clients while in a multiple representation situation including the anticipated sale price of the house and an estimate of whether the client could afford to purchase a subsequent property. The house ended up sitting on the market even after several reductions in the listing price. As is commonplace in the industry, this resulted in a domino effect on other transactions that depended on the proceeds of a sale transaction to close on a subsequent purchase transaction.
The brokerage ultimately intervened and was successful in renegotiating and closing the transactions.
The brokerage relied upon the terms of the Salesperson Agreement to deny that any unpaid commissions were owed to the agent. In particular, the terms stated that no commission was payable where the agent failed to complete the transaction successfully and the brokerage was entitled to set-off any damages caused by the agent’s actions.
The brokerage brought a summary judgment motion to dismiss the agent’s claim and for an order for damages sought in the counterclaim.
Enhanced Powers of Court in Summary Judgment
Under Rule 20.04(2(a) of the Rules of Civil Procedure, the Court shall grant summary judgment if it is satisfied that there is no genuine issue requiring a trial. The Court must first determine whether there is sufficient evidence in the record to justly and fairly decide the issues, without using the enhanced fact-finding powers available. As a result, the parties to a motion for summary judgment must put their best foot forward by placing all relevant evidence in the record. The Court is entitled to assume that no other evidence will be available at trial.
In this case, the Court found that the brokerage failed to provide crucial affidavit evidence from the clients, apart from hearsay evidence, which was required to determine the issues in dispute. As there was a genuine issue requiring a trial, the Court considered whether it should use its enhanced powers to resolve the issues in the absence of direct evidence from the clients. One of the enhanced powers under Rule 20.04(2.2) is that the Court may order that oral evidence be presented by one of more parties, with or without time limits on its presentation, in order to weigh the evidence, evaluate credibility of a deponent or draw a reasonable inference from the evidence.
On the one hand, the Court noted that this was a claim for $60,000 under Simplified Procedure and access to justice principles of timeliness, affordability and proportionality favour using its enhanced powers. On the other hand, the Court stated that this was not a case where a mini-trial would assist in weighing the evidence, evaluating credibility of a deponent or drawing a reasonable inference from the evidence. The mini-trial is only available to the Court to weigh evidence that has already been presented in the record or to weigh the credibility of a deponent that has already given evidence. Here, the evidentiary record was significantly lacking in key evidence. The Court stated the following:
In my view, absent limited circumstances (such as a trial on damages once liability is determined), the Court should restrict itself from ordering a mini-trial when a party has chosen to tender a deficient evidentiary record on a motion for summary judgment, for a mini-trial ought not to permit a party to buttress or “cooper up” its deficient record.
The mini-trial is not a tool available to a party. It is a power bestowed upon the Court to assist it with the potential fair and just resolution of a genuine issue which would otherwise require a full trial.
Since the record failed to include evidence from key witnesses, the Court held that a mini-trial was not appropriate under the circumstances. If a mini-trial had been ordered, it would have taken the form of a full trial and the onus on the parties to put their best foot forward would be for naught. As this was a claim under Simplified Procedure, the Court ordered that the parties proceed with a summary trial under Rule 76.12.
The lawyers at Gilbertson Davis LLP have experience and expertise in real estate litigation and summary judgment motions. If you require legal representation or advice, please contact us for an initial consultation.