Commissions Small Claims Court #208

Oct 01, 1993

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By Gerry Neely
B.A., LL.B.

The increase in the Small Claims Court jurisdiction to $10,000 has resulted in more cases of some complexity being tried in that court because the process is more information and potentially therefore, less expensive than Supreme Court.

An agent claimed a commission in Small Claims Court, on the basis that the listing contract with the vendor entitled her to a commission by bringing to the vendor a purchaser who was ready, willing and able to purchase the vendor's property. The agent had three successive listings over a period of about nine months and as the judge said, expended a substantial amount of professional effort and extensively advertised the property which was difficult to sell. The two vendors accepted an offer which was subject to their finding suitable accommodation by a certain date.

The vendors were going their separate ways and one found a suitable house and asked the other vendor not to hold the sale up because, otherwise, she would lose the property she had found. With this plea before him, the other vendor decided to continue to live in the home, and made arrangements to purchase the other vendor's interest before the date for removal of the accommodation condition. This resulted in the frustration of the offer to purchase.

The decision of the vendors not to complete their sale prevented the agent from receiving the commission she had earned. Judgment was given to the agent in the amount of the commission.1

***

A party dissatisfied with the decision of a Small Claims Court judge can appeal to the Supreme Court. A developer did that in a case where a licensee had sued for $5,000, the amount the developer agreed to pay to the licensee, for the negotiation of a home building contract between the developer and the lot purchaser. At the time of the agreement to pay commission, the developer had listed two other lots with the licensee. The business relationship between the two parties had been ongoing for about three years. The developer claimed that when this relationship commenced, the licensee had agreed to unconditionally cancel a listing without an obligation to pay commission for sales made within sixty days after the listing was cancelled, when requested to do so by the developer.

Rightly or wrongly the developer was unhappy with the licensee's performance and wanted to cancel the listings. The licensee signed a MLS® cancellation notice used by the Vancouver Real Estate Board, having crossed out the reference to the sixty-day period, within which liability for commission was created upon sales or accepted offers made in that period.

The board refused to accept new listings for the property submitted to it by another agent because of the deletion of the sixty-day period. The licensee didn't take effective action to clarify the situation with the board, with the result that the properties remained off MLS® until the expiration of the sixty-day period.

These facts led the developer to counter claim for damages because of this inability to effectively market the two properties. The licensee's claim for $5,000 was won in Small Claims Court, but the developer's counter claim was lost. In the Supreme Court the judge concluded that the licensee had failed to meet his obligations to unconditionally cancel the listings and was liable in damages to the developer.

The next question was what if any damages had been incurred. The evidence established that one of the houses, which was substantially completed, might have sold earlier if it had been on MLS®. Damages of $1,500 were awarded to the developer.

The point of the case, however is not the amount of the damages, but the readiness of the judge to accept that there was an obligation on the part of the licensee to ensure that the impediment to the relisting of the property on MLS® was removed immediately.2

  1. Provincial Court (Small Claims Division), Richmond Registry file #C91-03097, (Reasons for Judgment, June 4, 1993).
  2. J.R. Vickers Construction Ltd. v. All Points Realty Group Ltd.,S.C.B.C., New Westminster Registry, #A912916, (Reasons for Judgment, December, 1992).

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