Leading Investments Ltd. v. Liebig (H.W.) & Co., (1986) 65 N.R. 209 (SCC)

• Judge: Dickson, C.J.C., Estey, McIntyre, Chouinard, Lamer, Le Dain and La Forest, JJ.
• Court: Supreme Court (Canada)
• Case Date: February 28, 1986
• Jurisdiction: Canada (Federal)
• Citations: (1986), 65 N.R. 209 (SCC);65 NR 209;CarswellOnt 671;14 OAC 159;[1986] ACS no 6;25 DLR (4th) 161;38 RPR 201;[1986] 1 SCR 70;1986 CanLII 45 (SCC);[1986] SCJ No 6 (QL)

Leading Inv. Ltd. v. Liebig & Co. (1986), 65 N.R. 209 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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H.W. Liebig & Company Limited v. Leading Investments Limited

No. 16860

Indexed As: Leading Investments Ltd. v. Liebig (H.W.) & Co.

Supreme Court of Canada

Dickson, C.J.C., Estey, McIntyre, Chouinard, Lamer, Le Dain and La Forest, JJ.

February 28, 1986.

Summary:

Leading Investments Ltd. (the plaintiff vendor) entered a listing agreement with H.W. Liebig & Co. Ltd. (the defendant real estate broker). The agreement provided, inter alia, that the vendor would "pay a commission of 5% of the sale price on any sale or exchange" and that the commission was "to be paid on the date set for completion of the sale ...". The broker obtained an offer from a prospective purchaser, a purchase and sale agreement was executed and the purchaser paid the broker a $15,000 deposit. The purchase and sale agreement provided that the vendor would pay the broker "a commission of 5% of the sale price for having procured this offer, said commission to be deducted from the deposit on the date set for completion of sale ...". The transaction did not go through because of the purchaser's default and the purchaser released all claims to the deposit. The vendor commenced an action against the broker for the deposit. The broker counterclaimed for its commission. The trial judge held that the broker was entitled to its commission. The vendor appealed.

The Ontario Court of Appeal, in a decision reported (1981), 34 O.R.(2d) 175, allowed the appeal, held that the broker was not entitled to its commission and ordered that the broker pay the $15,000 deposit to the vendor. The broker appealed.

The Supreme Court of Canada, Estey, McIntyre and Chouinard, JJ., dissenting, dismissed the appeal and affirmed that the broker was not entitled to the commission. La Forest, J., with Dickson, C.J.C., and Lamer, J., concurring, held that the listing agreement prevailed over the purchase and sale agreement and that the listing agreement required that there be a sale within the ordinary meaning of the word before a commission was payable. Le Dain, J., concurring in the result, expressed no opinion on which agreement prevailed but held that both provisions required a completed sale before a commission was payable.

Estey, J., dissenting, (McIntyre and Chouinard, JJ., concurring) interpreted the two agreements such that the broker would have been entitled to a commission.

Brokers - Topic 4027

Compensation - Right to - Sale - What constitutes - A listing agreement provided that a vendor would pay his real estate broker "a commission of 5% of the sale price on any sale or exchange" ... "to be paid on the date set for completion of the sale ..." - A purchase and sale agreement provided that the vendor would pay the broker "a commission of 5% of the sale price for having procured this offer, said commission to be deducted from the deposit on the date set for completion of the sale" - The Supreme Court of Canada discussed the meaning of the word "sale" in these agreements - See paragraphs 24 to 41.

Brokers - Topic 4069

Compensation - Compensation agreement - Real estate listing agreement - General - The Supreme Court of Canada made some general observations about contracts between vendors of land and real estate brokers - See paragraphs 12 to 23.

Brokers - Topic 4069

Compensation - Compensation agreement - Real estate listing agreement - Interpretation - The Supreme Court of Canada stated that in construing real estate listing agreements, the words used must be read in light of the general context and the common understanding of these agreements - See paragraph 21.

Brokers - Topic 4069

Compensation - Compensation agreement - Real estate listing agreement - In a listing agreement a vendor agreed to pay the broker "a commission of 5% of the sale price on any sale or exchange" ... "on the date set for completion of the sale..." - The broker obtained an offer from a prospective purchaser - The purchase and sale agreement provided that the vendor would pay the broker "a commission of 5% of the sale price for having procured this offer" ... "to be deducted from the deposit on the date set for completion of the sale ..." - The sale fell through - The Supreme Court of Canada held that the broker was not entitled to his commission because the governing document was the listing agreement, and pursuant thereto, no commission was payable unless there was a sale of the property - See paragraphs 24 to 41.

Brokers - Topic 4347

Brokers - Compensation - Real estate brokers - Listing agreements v. purchase and sale agreements - In a listing agreement a vendor agreed to pay the broker "a commission of 5% of the sale price on any sale or exchange" ... "on the date set for completion of the sale ..." - The broker obtained an offer from a prospective purchaser - The purchase and sale agreement provided that the vendor would pay the broker "a commission of 5% of the sale price for having procured this offer" ... "to be deducted from the deposit on the date set for completion of the sale ..." - The sale fell through - The Supreme Court of Canada held that the broker was not entitled to his commission because the governing document was the listing agreement, and pursuant thereto, no commission was payable unless there was a sale of the property - See paragraphs 24 to 41.

Brokers - Topic 4348

Compensation - Real estate brokers - Compensation agreements in purchase and sale agreements - A purchase and sale agreement provided that the vendor would pay his real estate broker a commission of 5% for having found a purchaser and the commission would be deducted on the date set for completion of the sale from the deposit paid to the broker by the purchaser - The Supreme Court of Canada held that where the purchaser reneged on the sale, the broker was not entitled to his commission under the purchase and sale agreement, because there was no privity of contract or consideration flowing between the vendor and the broker under the agreement - The court held also that there would have to be a completed sale before the commission would be payable - See paragraphs 37 to 41.

Brokers - Topic 4350

Compensation - Real estate brokers - Where sale not completed - The Supreme Court of Canada discussed the rights of a real estate broker to collect its commission where the sale procured by the broker falls through, from the fault of the vendor or the purchaser - See paragraphs 30 to 33, 48.

Words and Phrases

SALE - A listing agreement provided that a vendor would pay his real estate broker "a commission of 5% of the sale price on any sale or exchange" ... "to be paid on the date set for completion of the sale ..." - A purchase and sale agreement provided that the vendor would pay the broker "a commission of 5% of the sale price for having procured this offer, said commission to be deducted from the deposit on the date set for completion of the sale" - The Supreme Court of Canada discussed the meaning of the word "sale" in these agreements - See paragraphs 24 to 41.

Cases Noticed:

Luxor (Eastbourne), Ltd. v. Cooper, [1941] A.C. 108, consd. [paras. 12, 13, 15, 17, 18, 30, 46, 65].

Dennis Reed, Ltd. v. Goody, [1950] 2 K.B. 277, consd. [paras. 14, 19, 30, 32, 46, 65].

Loveridge v. Cooper, [1959] O.W.N. 81; 18 D.L.R.(2d) 337, consd. [paras. 14, 30, 48, 54, 56].

Alex Duff Realty Ltd. v. Eaglecrest Holdings Ltd. (1983), 44 A.R. 67; 146 D.L.R.(3d) 731 (Alta. C.A.), refd to. [para. 16].

Tilden Rent-A-Car Co. v. Clendenning (1978), 83 D.L.R.(3d) 400 (Ont.C. A.), refd to. [para. 16].

Inchbald v. The Western Neilgherry Coffee Co. (1864), 17 C.B. (N.S.) 733; 144 E.R. 293, refd to. [para. 18].

Jaques v. Lloyd D. George & Partners Ltd., [1968] 1 W.L.R. 625 (C.A.), refd to. [para. 20].

Christie Owen & Davies v. Rapacioli, [1974] Q.B. 781 (C.A.), consd. [paras. 22, 30, 46, 65].

C and S Realties of Ottawa Ltd. v. McCutcheon (1978), 84 D.L.R.(3d) 584, refd to. [paras. 25, 47].

Gladstone v. Catena, [1948] 2 D.L.R. 483, consd. [paras. 26, 27, 55, 56].

Nigro v. Wilson, [1924] N.Z.L.R. 834, refd to. [para. 26].

Prickett v. Badger (1856), 1 C.B. (N. S.) 296; 140 E.R. 123, refd to. [para. 30].

Carsted v. Gass (1980), 116 D.L.R. (3d) 550 (Man. C.A.), refd to. [paras. 30, 32].

James v. Smith, [1931] 2 K.B. 317 n (C.A.), refd to. [para. 31].

Martin v. Perry and Daw, [1931] 2 K. B. 310, refd to. [para. 31].

Copeland v. Wedlock (1905), 6 O.W.R. 539, dist. [para. 35].

Ramm v. Cooper, [1955] O.W.N. 525 (Ont. C.A.), refd to. [para. 38].

Re Brethour and Morris Ltd. v. Shields Construction Co. et al., [1958] O.W.N. 128 (Ont. H.C.J.), consd. [paras. 39, 60].

McCallum v. Hicks, [1950] 2 K.B. 271, not appld. [para. 46].

Corporation of the Township of Nelson v. Stoneham, [1957] O.W.N. 109 (C. A.), refd to. [para. 60].

Howell and Howell v. Kenton Agencies Ltd., [1953] O.W.N. 248 (H.C.), refd to. [para. 60].

Royal Trust Company v. Toronto Transportation Commission, [1935] S.C.R. 671, refd to. [para. 64].

Murray v. City of Saskatoon (1951), 4 W.W.R. 234 (Sask. C.A.), refd to. [para. 64].

Authors and Works Noticed:

Oxford English Dictionary [paras. 24, 28].

Counsel:

P.B.C. Pepper, Q.C., for the appellant, (H.W. Liebig & Co. Ltd.);

A. Steinberg, for the respondent, (Leading Investments Ltd.).

This appeal was heard on February 14 and 15, 1985, before Dickson, C.J.C., Estey, McIntyre, Chouinard, Lamer, Le Dain, and La Forest, JJ., of the Supreme Court of Canada.

The following judgment of the Supreme Court of Canada was delivered on February 28, 1986, and the following opinions were filed:

La Forest, J. (Dickson, C.J.C., and Lamer, J., concurring) - see paragraphs 1 to 44;

Le Dain, J. - see paragraphs 45 to 49;

Estey, J., dissenting (McIntyre and Chouinard, JJ., concurring) - see paragraphs 50 to 66.