Background
Florenta Daniela Cusnir brought a Superior Court action against real estate listing agent Mary Louise Taylor, brokerage Royal LePage Real Estate Ltd., and the insurer Lloyd’s Underwriters for unpaid sales commissions. She claimed commission on the sale of a farm property, a commercial property, and an unidentified third property allegedly resulting from her work. The respondents moved to strike her statement of claim.
Ms. Cusnir’s claims arose against the backdrop of a prior Small Claims Court decision in which Deputy Judge Hoffman found that Ms. Cusnir had no valid commission claim on the farm property. The judge determined that Ms. Cusnir was not a registered real estate agent at the time and that any finder’s fee constituted an unregistered “trade” prohibited by the Real Estate and Business Brokers Act, 2002. The Deputy Judge noted that the commercial property was not addressed in the Small Claims proceeding but suggested Ms. Cusnir could bring a separate claim if she wished.
The motion judge struck Ms. Cusnir’s statement of claim in its entirety, finding her Lloyd’s claim was an abuse of process lacking a viable cause of action, and holding that the Royal LePage claim (including the commercial property) was res judicata in light of the Small Claims decision.
The Court’s Holding
The Court of Appeal for Ontario upheld the dismissal of claims against Lloyd’s, finding that Ms. Cusnir had no cause of action against the professional liability insurer. The court confirmed that recovery under a third-party liability insurance policy requires either proven liability for physical damage or property, or an enforceable judgment against the insured parties—neither of which existed here. The court also found no stated cause of action and a failure to plead material facts required by the Rules of Civil Procedure.
The court upheld the dismissal of the farm property commission claim as res judicata. The prior Small Claims decision was binding and final on that issue, and Ms. Cusnir’s failure to appeal it meant the judgment remained conclusive. However, the court reversed the dismissal regarding the commercial property claim. The motion judge erred in finding it res judicata, since Deputy Judge Hoffman’s decision expressly did not address the commercial property and instead explicitly permitted Ms. Cusnir to bring a separate claim.
The court struck Ms. Cusnir’s statement of claim but granted leave to file an amended statement of claim limited solely to the commercial property and any other properties to which the commission agreement with Ms. Taylor might apply. The court rejected Ms. Cusnir’s unreasonable self-represented litigant costs claims (seeking $159,936.48 at $400/hour), awarding costs instead on a modest scale: Lloyd’s $5,000 all-inclusive; Royal LePage $3,750 all-inclusive for both lower court and appeal combined.
Key Takeaways
- Res judicata forecloses relitigation of claims resolved in Small Claims Court unless explicitly reserved by the trial judge.
- Third-party professional liability insurers cannot be sued on their policies absent either liability for physical damage/property or an enforceable judgment against the insured parties.
- Self-represented litigants may recover modest costs only if they prove both significant time/effort equivalent to lawyer’s work and demonstrable opportunity costs from foregone remunerative activity.
- The scope of issues decided in a prior proceeding is critical: claims not addressed may survive res judicata and proceed separately.
Why It Matters
This decision clarifies the preclusive effect of Small Claims Court judgments in Ontario’s civil procedure and the strict limitations on suing third-party insurance carriers. Real estate professionals and their brokers benefit from confirmation that commission disputes resolved in Small Claims are binding and not relitigable in Superior Court. The decision also reinforces that self-represented litigants cannot recover lawyer-equivalent costs absent concrete evidence of lost earning potential—a principle that discourages inflated cost claims in appeals.
The ruling establishes that parties must carefully define the scope of their claims in initial pleadings. Ms. Cusnir’s failure to include the commercial property claim in Small Claims Court preserved her right to pursue it separately, but only because the judge explicitly noted this possibility and required it to be struck from trial. Counsel should document such reservations in trial decisions to prevent inadvertent res judicata bars.