11 Suntract Holdings Ltd. et al. v. Chassis Service & Hydraulics Ltd. et al., (1998) 52 O.T.C. 311 (GD)

• Judge: Lax, J.
• Court: Ontario Court of Justice General Division (Canada)
• Case Date: January 27, 1998
• Jurisdiction: Ontario
• Citations: (1998), 52 O.T.C. 311 (GD)

11 Suntract Holdings v. Chassis Service (1998), 52 O.T.C. 311 (GD)

MLB headnote and full text

Temp. Cite: [1998] O.T.C. TBEd. FE.001

11 Suntract Holdings Ltd. and Leon Holdings (1967) Limited (plaintiff) v. Chassis Service & Hydraulics Ltd. (defendant) and Colliers Macaulay Nicolls (Ontario) Inc. (third party)

(Court File Nos. 96-CU-97650CM and 96-CU-97650CMA)

Indexed As: 11 Suntract Holdings Ltd. et al. v. Chassis Service & Hydraulics Ltd. et al.

Ontario Court of Justice

General Division

Lax, J.

January 27, 1998.

Summary:

Chassis owned an industrial property located in North York. A small portion of the property was leased for a long term to Cantel Inc. for a cellular telephone transmission tower and an equipment shed. Chassis also granted Cantel an access easement over its land so that Cantel could service its equipment. Thereafter, Chassis retained the services of Colliers, a real estate broker to sell the property. The broker was informed of the lease, however, never disclosed it to Leon, the purchaser, who was going to demolish the building and redevelop the land for retail use. Shortly after signing the Agreement to purchase, which stated that the title would be "free of encumbrances, vacant possession on closing, and ownership of all fixtures", Leon discovered the lease. Negotiations to try and resolve the problem were unsuccessful and Chassis terminated the Agreement, taking the position that Leon objected to its title and that it could not satisfy the objection. Accordingly, under the Agreement it was entitled to rescind the contract. Leon tendered, but Chassis refused to close. Leon commenced an action for specific performance with an abatement, or damages. Chassis counterclaimed for damages for breach of contract and slander of title. Chassis also third partied against Colliers, alleging that its agents did not meet the requisite standard of care in advising the vendor on the transaction.

The Ontario Court (General Division), in a decision reported 49 O.T.C. 112, held that Leon was entitled to specific performance with an abatement. The court further determined that Colliers did not meet the requisite standard of care in advising the vendor in the transaction and therefore Colliers was liable to Chassis for any losses it suffered as a result of the aborted transaction. Colliers claimed payment for its real estate commission on the aborted sale.

The Ontario Court (General Division), in the supplementary reasons for judgment reported below, declined to award Colliers payment for a real estate commission.

Brokers - Topic 4047

Compensation - Right to compensation - Loss of right - Misrepresentation, fraud or misinformation - See paragraphs 1 to 5.

Brokers - Topic 4048

Compensation - Right to compensation - Loss of right - Lack of diligence, care or skill - See paragraphs 1 to 5.

Cases Noticed:

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1; [1994] 9 W.W.R. 609; 22 C.C.L.T.(2d) 1; 117 D.L.R.(4th) 161, refd to. [para. 2].

Starr (Paul S.) & Co. v. Watson, [1973] 1 O.R. 148 (C.A.), refd to. [para. 2].

McInerny Realty Ltd. v. Academy Aluminum Products Ltd. (1980), 25 A.R. 84; 113 D.L.R.(3d) 289 (C.A.), refd to. [para. 2].

Counsel:

G. Hall, for the plaintiff;

B. Grossman, for the defendant;

T. Kent, for the third party.

This application was heard before Lax, J., of the Ontario Court (General Division), who released the following supplementary reasons for judgment on January 27, 1998.