Background
In October 2019, Nadeem Qureshi sought to purchase a commercial investment property and engaged realtor Nik Handa of Re/Max Realty Services Inc. Handa identified an unlisted property owned by Zeema Investments Inc. and had Qureshi sign several documents simultaneously: an offer to purchase, standard OREA disclosure forms, and a Buyer Representation Agreement (BRA). The BRA stated that Qureshi agreed to pay a commission of “TBD” (to be determined), and included a clause making him liable for the commission if the transaction failed to close due to his own default or neglect.
On November 5, 2019, Zeema separately executed a Commission Agreement with Re/Max, setting the commission at $650,000 inclusive of HST — an agreement to which Qureshi was not a party and which he did not sign. After initial negotiations, a Revised Co-op Agreement was signed on November 7, 2019, clarifying that Re/Max represented only Qureshi and that it would be paid its commission “by the seller, as per the terms of the commission agreement dated November 5, 2019.” The parties ultimately executed an agreement of purchase and sale on November 20, 2019, with Qureshi paying $750,000 in deposits.
In April 2020, Qureshi chose not to proceed with the purchase and requested the return of his deposit. Re/Max responded by invoicing him $650,000 in commission under the BRA. Qureshi refused to pay. Zeema resold the property to a third party at a loss of $667,635. Re/Max and Handa brought a summary judgment motion against Qureshi for the commission, which the motion judge dismissed. They then appealed to the Court of Appeal for Ontario.
The Court’s Holding
The Court of Appeal dismissed the appeal, finding no reviewable error in the motion judge’s contractual interpretation. Applying the deferential standard from Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, the court held that questions of contractual interpretation are highly fact-specific and entitled to significant deference on appeal. The motion judge’s conclusion — that the BRA’s “TBD” commission term was simply unresolved and created no enforceable obligation by reference to the later Zeema-Re/Max Commission Agreement — was open to him on the evidence.
The court rejected the appellants’ argument that the three agreements (the BRA, the Commission Agreement, and the Revised Co-op Agreement) should be read together to impose commission liability on Qureshi. Although it may have been Handa’s subjective intention that Qureshi would ultimately bear the commission if the deal collapsed, subjective intention is insufficient to establish a contractual obligation. The BRA contained an entire agreement clause, and neither it nor the Revised Co-op Agreement contained language making Qureshi liable for the $650,000 commission set by the separate agreement between Re/Max and Zeema.
The court also rejected the appellants’ procedural argument that a trial was needed to resolve whether Qureshi had signed the Commission Agreement. Because the appellants themselves had brought the summary judgment motion, they could not on appeal argue that summary judgment was inappropriate.
Key Takeaways
- A “TBD” commission clause in a buyer representation agreement, without any mechanism to fix the amount or any reference to a future seller-side commission agreement, is insufficient to bind the buyer to pay a specific commission amount.
- A buyer is not bound by a commission agreement between the realtor and the seller to which the buyer was not a party and did not sign, even if the buyer representation agreement contains a default-triggered commission clause.
- A party who brings a summary judgment motion cannot, on appeal from an adverse outcome, argue that summary judgment was procedurally inappropriate and that a trial was required instead.
- Appellate courts apply a highly deferential standard to a motion judge’s contractual interpretation under Sattva Capital where no extricable question of law is present.
Why It Matters
This decision is a practical warning for commercial realtors operating in Ontario: a buyer representation agreement must clearly specify the commission amount — or an objective mechanism to determine it — and must expressly link the buyer’s payment obligation to any separate commission arrangement made with the seller. Leaving the commission “TBD” while relying on a side agreement with the vendor creates an enforcement gap that courts will not fill by implication, even where the equities may seem to favour the realtor.
More broadly, the case reinforces the strict application of Sattva Capital deference in commercial real estate disputes. Appellants seeking to overturn a motion judge’s contractual interpretation face a high bar: they must identify an extricable error of law, not merely argue that an alternative reading was available. Realtors and their counsel should ensure that all commission obligations — including buyer-side liability in the event of a failed closing — are expressly documented in the agreements signed by all relevant parties at the outset of the retainer.