The SCC Monitor (07/07/2015)

It has been a busy couple of weeks since our last post. The SCC has released two judgments and six leave decisions of interest. In addition, a pending judgment of interest will be released this week. One of the released judgments and four of the leave decisions will be of interest to those involved in real estate development, management and sales. The other judgment involves government liability and how to apportion damages where the plaintiff has reached settlements with non-parties relating to the same injury. The remaining leave decisions involve an order to a foreign whistleblower to produce documents in a prosecution for foreign corrupt practices, and the finality of tribunal decisions. Finally, the SCC will release a decision this Thursday that will address when a legal action should move forward in Federal Court versus in a provincial superior court.

First, the SCC released its judgment in Société en commandite Place Mullins v Services immobiliers Diane Bisson inc, 2015 SCC 36 (35461), mentioned briefly in this prior blog post. The SCC held that a real estate brokerage enterprise was not entitled to a commission when a sale did not close. The brokerage contract entitled the brokerage to commission if: (a) an agreement "to sell" the immovable was completed; or (b) the seller voluntarily prevented the free performance of the brokerage contract. A promisor-buyer agreed to purchase the immovable, contingent on due diligence, which ultimately revealed environmental contamination. The promisor-buyer made a second offer to purchase the immovable if the promisor-seller remediated the contamination; the promisor-seller rejected the offer. The sale was not completed. The brokerage demanded its commission from the promisor-seller. Justice Wagner for a unanimous SCC wrote that:

A real estate broker's compensation is uncertain in many respects. ...[A] brokerage contract is like a hunting licence in the sense that, "as in hunting, the broker may spend much time and effort but fail to achieve his goal"....

The SCC held that no agreement "to sell" had been completed because both offers were conditional, and the conditions were not satisfied. The promisor-seller did not voluntarily prevent the free performance of the brokerage contract by refusing to remediate the contamination because: (a) it was under no obligation to do so; and (b) the promisor-seller did not know about the contamination when the brokerage contract was entered. The brokerage was not entitled to its fee.

Second, the SCC released its judgment in Hinse v Canada (Attorney General), 2015 SCC...