Ontario Superior Court permits real estate brokerage firm to continue lawsuit over unpaid commission

The court considered the principles in lifting a stay of proceedings imposed by a receivership order

Ontario Superior Court permits real estate brokerage firm to continue lawsuit over unpaid commission

The Ontario Superior Court of Justice has permitted a real estate brokerage firm to continue its lawsuit against PricewaterhouseCoopers Inc. (PwC) and Bridging Finance Inc.'s subsidiary over an alleged unpaid real estate commission.

PwC, as the court-appointed receiver of Bridging and its related companies, managed the sale of a Brampton property to a company, “245 Ontario.” The dispute in Intercity Realty Inc v. PricewaterhouseCoopers Inc. et al., 2024 ONSC 2400 involved the brokerage firm Intercity Realty's claim for commission from this transaction.

Intercity asserted that it negotiated with PwC for a 2.5 percent commission if 245 Ontario bought the property. However, PwC denied any formal agreement existed. Citing a previous court order that stayed proceedings against PwC, PwC sought to have the lawsuit against it dismissed.

The Superior Court ruled in favour of lifting the stay, allowing Intercity to proceed with its lawsuit. However, the court struck down Intercity's expert testimony, which was deemed unnecessary and inadmissible.

The court considered the legal principles involved when lifting a stay of proceedings imposed by a receivership order. Referring to previous cases, the Supreme Court highlighted that courts must assess the relative prejudice to both parties and the totality of circumstances when deciding to lift a stay. A court can grant permission if the creditor is likely to be materially prejudiced or if it is equitable.

The court found Intercity's claims against PwC and Bridging’s subsidiary for breach of contract and breach of fiduciary duty sufficiently pleaded to show a reasonable cause of action, concluding that they are not frivolous, vexatious, or manifestly unreasonable.

Given this, the court ruled that Intercity should be allowed to proceed with its claims against Bridging’s subsidiary and PwC in its capacity as receiver. The court considered the prejudice to PwC and Bridging’s subsidiary and acknowledged the resources required to defend this action. However, since PwC could recover legal costs if it prevails, the court permitted Intercity's lawsuit to move forward. The court has allowed the stay to be lifted, enabling Intercity to continue its lawsuit against PwC and Bridging’s subsidiary.

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