Michael J. Bondar Professional Corporation v. Janstar Homes Ltd., 2011 ABQB 683

Court of Queen ’ s Bench of Alberta Citation: Michael J. Bondar Professional Corporation v. Janstar Homes Ltd., 2011 ABQB 683 Date: 20111104 Docket: 1101 08838 Registry: Calgary Between: Michael J. Bondar Professional Corporation Plaintiff - and - Janstar Homes Ltd. Defendant _______________________________________________________ Memorandum of Decision of Jodi L. Mason, Master in Chambers _____________________________________________________ [ 1 ] Michael J.

Bondar Professional Corporation alleges that Janstar Homes Ltd. entered into a written agreement to pay him an “arrangement fee” of approximately $170,000.00 for his services regarding the purchase of a multi unit building in southwest Calgary. Mr. Bondar alleges the arrangement fee was payable upon court confirmation of the sale. [ 2 ] An order confirming sale and vesting title to the property in Janstar was granted by Master Hanebury on May 9, 2011. [ 3 ] Janstar did not pay the arrangement fee. Mr. Bondar applies for

summary judgment on the claim. For the reasons that follow, the application for

summary judgment is dismissed.

The test for

summary judgment [ 4 ] The bar on a motion for

summary judgment is high: Canada (Attorney General) v. Lameman , 2008 SCC 14 , [2008] 1 S.C.R. 372. A party bringing a motion for

summary judgment bears the legal onus of showing no genuine issue for trial: Murphy Oil Co. v. Predator Corp. , 2006 ABCA 69 , 384 A.R. 251. The defence [ 5 ] The thrust of Janstar’s defence is that Janstar was persuaded to sign the arrangement fee agreement based on Mr. Bondar’s many representations, including his representation that he could secure the purchase of the 44 units in the building, each with a separate title. This was important to Janstar, as its plan was to renovate each of the units and then re-sell them on an individual basis. Janstar alleges that that Mr.

Bondar did not provide the services he promised, and thus he is not entitled to the arrangement fee. The agreement [ 6 ] The agreement dated February 28, 2011 between the parties provides for a fee for Mr. Bondar of “$28,600, based on $650 per unit...”. [ 7 ] The agreement goes on to provide for a further fee: “[m]y arrangement fee of $168,666.00 shall be releasable upon the receipt of the Orders from the solicitor for the Purchaser and are non refundable should you be unable to close and the Orders are required to be returned.

I base my fees on many considerations, including the complexity of the matter, the time spent by me in ascertaining if CMHC, Genworth and all the mortgagees are prepared to accept your offer subject to the approval of the Court of Queen’s Bench of Alberta, the urgency and demands of the matter, specialized skills, expertise and knowledge providing these services and the results achieved...”[Emphasis added.] [ 8 ] The agreement goes on to state that Mr.

Bondar will render his account on an interim basis and the final account “once the Certificates of Title to the 44 units are registered in your name.” There are other references in the agreement to the 44 units. The process [ 9 ] The 44 units comprising the property were unfit for human habitation and were subject to Alberta Health Services orders in this regard. The units were under foreclosure. [ 10 ] Mr. Bondar provided Janstar’s offer to purchase the property for $1.78 million to counsel for one of the foreclosing lenders.

That counsel then made an application to the court to firstly, terminate the condominium plan, and secondly, to accept Janstar’s offer for the entirety of the property. [ 11 ] On April 15, 2011, Master Hanebury ordered that the condominium plan be terminated, which had the effect of eliminating the individual 44 titles and replacing them with one title in which the owners of the units now held the property as tenants in common. Further, Master Hanebury rejected Janstar’s offer and ordered that the property be advertised for sale in the newspaper.

The resulting tenders were to come back to the court for consideration.

[ 12 ] Ultimately, Janstar’s tender of $1.534 million was accepted by court order dated May 9, 2011. The title was transferred to Janstar on June 9, 2011 using the services of another lawyer, and that same day, Janstar transferred the property to an unsuccessful tenderer. Issues raised by Janstar [ 13 ] Alnoor Sajan, a director of Janstar who dealt directly with Mr. Bondar, swore a lengthy affidavit that describes the genesis of the arrangement fee and the subsequent events and communications between the parties. [ 14 ] Mr. Sajan deposed that Mr.

Bondar made several representations to him prior to Janstar agreeing to the arrangement fee, including statements that Mr. Bondar: had worked on the building for years and had the inside track on it; had significant connections in the legal profession and because of that he was the only individual who could provide Janstar with the building; if Janstar wanted the building, it must proceed through him, and Janstar could not submit the tender through its usual lawyer. [ 15 ] Mr. Sajan also deposed that Mr.

Bondar assured him prior to entering the agreement for the arrangement fee that he could deliver ownership of the building as an individually titled 44 unit condominium. At the hearing, counsel for Janstar emphasized the references in the February 28, 2011 agreement to 44 titles. [ 16 ] Mr. Sajan further deposed that Mr. Bondar’s work on Janstar’s behalf was minimal, involving changing the name of the offeror and dates in an existing document and providing it to counsel for the foreclosing lender, and appearing on court applications with no appreciable influence on the outcome. [ 17 ] Mr.

Bondar submitted that nothing turns on the references in the agreement to titles to 44 units, as they simply reflect the facts known at that time. He stated that the facts changed upon the April 15 th , 2011 order, which collapsed the 44 titles into one. [ 18 ] Mr. Bondar’s main argument is that Janstar made its ultimately successful tender of $1.534 million after the April 15 th , 2011 order, and thus with knowledge that it was to get only one title and not 44. [ 19 ] There is some evidence, however, that Mr.

Bondar continued to advise Janstar that 44 titles would issue, even after the April 15 th order was made. [ 20 ] Upon receiving a copy of that order, Joe Starr, another director of Janstar, expressed his concern to Mr. Bondar that there would only be one title, and thus suggested the fee arrangement was terminated. In response, Mr. Bondar sent the following e-mail to Mr. Starr: ...[t]his confirms that the Certificates of Title (44) will issue on a unit per unit basis, much as they exist today...As I said, its not necessarily what you know, but who. [ 21 ] Further, Mr. Sajan also deposed that Mr.

Bondar represented that he had received communications from the Registrar of Land Titles that special consideration would be provided to Mr. Bondar so as to allow 44 titles to issue. [ 22 ] Janstar’s subsequent tender must be viewed in light of these statements by Mr. Bondar that he could still deliver 44 titles. [ 23 ] Mr. Bondar also submitted that Janstar agreed to pay the arrangement fee even after the order collapsing the 44 titles into one, effectively amending any prior agreement to secure the transfer of 44 titles.

[ 24 ] Any agreement Janstar may have made after the April 15 th order must similarly be viewed in light of Mr. Bondar’s statements to Janstar that he could still secure the 44 titles for Janstar. [ 25 ] In

summary, whether Mr. Bondar induced the agreement fee agreement by his statements as to his role in effecting a purchase and what he could deliver so as to command such a fee, the terms of Mr. Bondar’s entitlement to the fee, whether Mr. Bondar met those terms, and whether those terms were amended after the April 15, 2011 order are genuine issues for trial. If the arrangement fee is determined to be a fee for legal services, the determination on these matters will inform the assessment of the myriad factors the court considers in considering whether a lawyer’s fees are reasonable: Code of Professional Conduct ,

Chapter 13. Attachment Order [ 26 ] An interim attachment order was granted August 18, 2011, to expire August 31, 2011. It attaches one asset, a Lindal cedar home located at 1601 Kensington Road N.W. [ 27 ] Janstar is the distributor of Lindal cedar homes in Southern Alberta. The home at 1601 Kensington Road N.W. appeared to be owned by Janstar at the time of the initial application and was listed for sale, but the lot was not owned by Janstar. Mr.

Bondar swore an affidavit which indicated he supplied the square footage from the MLS listing for the home at 1601 Kensington Road N.W. to Lindal, who in turn provided a copy of an invoice which referenced that Lindal home having been sold and shipped to Janstar in 2006. There was some evidence that Janstar wanted to sell the home by August 31, 2011. Mr. Bondar was concerned that if the home were to be sold it would be moved from its current location to an unknown location. [ 28 ] The order was extended by consent pending the outcome of this

summary judgment application. [ 29 ] Mr. Sajan was questioned in regard to this Lindal home. He confirmed that Janstar buys home packages from Lindal and in turn sells them to consumers. He explained that the home currently located at 1601 Kensington Road N.W. is a show home. He further stated that the show home had been sold to his wife some time ago. [ 30 ] In answer to an undertaking, Mr. Sajan produced a sale agreement indicating that a Lindal home located at 1601 Kensington Road N.W. was transferred to Mr. Sajan’s wife in 2009. The sale was handled by counsel and copies of banking records were also produced.

The sale agreement provides that Janstar will market the home on Mrs. Sajan’s behalf in exchange for a commission. It also states that the lease on the lot expires on August 31, 2011. [ 31 ] Mr. Bondar impugned the evidence of the sale to Mrs. Sajan, pointing out that the sale agreement refers to the subject home as “Garrington Model” whereas the 2006 Lindal invoice has a reference to “Prow/Greenbriar”. Whether or not that is a reference to the model is not clear. [ 32 ] The parties agree that the onus is on Mr. Bondar to persuade the court that the attachment order should be maintained.

The court is guided by the “judicial abhorrence for prejudgment execution”: 148221 Alberta Ltd. v. Haney Farms

(1985) Ltd. , 2009 ABQB 760 at paragraph 38 , citing Industrial Rewind & Supply Inc. v. Kuntz and Kramer Services Inc. , 2001 ABQB 123 . If the defence is a mere sham, the plaintiff can obtain

summary judgment, but in most other cases, the plaintiff must “suffer the delay involved in the normal legal process”: 148221 Alberta Ltd. v. Haney Farms

(1985) Ltd. at paragraph 38, citing Equiplan Mortgage Investors Fund Ltd. v. Cross Country Homes Marketing , 2007 ABQB 276 at paragraph 33 . [ 33 ] The remedy is discretionary, and even if the statutory requirements have been met, the court may exercise its discretion and deny the application: Industrial Rewind & Supply Inc. v. Kuntz and Kramer Services Inc. at paragraph 4 . The court should only grant an attachment order when it is “just and reasonable to do so, taking into account the interests of the claimant, the defendant, and third parties: Equiplan Mortgage Investors Fund Ltd. v.

Cross Country Homes Marketing at paragraph 32 . The court is aware of the fact that an eager and aggressive litigant may seek the remedy to secure a pre-judgment lever in negotiation: Alberta (Treasury Branches) v. Pocklington , 1998 ABQB 1091 at paragraph 46 . The court is entitled to consider the fact that an attachment order is “stigmatizing in the

business community...before the court wields its consdierable sitmatizing power, it must carefully assess all of the effects of its order”: Equiplan Mortgage Investors Fund Ltd. v. Cross Country Homes Marketing at paragraph 35 . [ 34 ] In determining whether there are reasonable grounds for believing that the defendant is dealing with its exigible property, or is likely to deal with that property, otherwise than for the purpose of meeting its reasonable and ordinary business expenses, a deponent’s belief is not sufficient.

There must be substance to any such allegation; a sufficient evidentiary foundation to support the belief: Alberta (Treasury Branches) v. Pocklington at paragraphs 7 and 8 . [ 35 ] The evidence shows that a Lindal home was sold to Janstar in 2006 and delivered to 1601 Kensington Road N.W. A Lindal home located at 1601 Kensington Road N.W. was sold to Mrs. Sajan in 2009, well prior to this dispute arising. While a question has been raised as to whether this is the same show home currently located at 1601 Kensington Road N.W., the evidence is not sufficient to conclude it is not the same home.

The desire to sell the home by August 31, 2011 may be explained by the pending expiry of the lease of the lot on that date. The house remains on that lot, and has been listed for sale for some time. [ 36 ] In these circumstances, I am not satisfied the Lindal home subject to the attachment order is Janstar’s property. Even if it were clear that the home was Janstar’s property, there is an insufficient evidentiary foundation to support Mr. Bondar’s expressed belief that Janstar is dealing with the property otherwise than for the purpose of meeting its reasonable and ordinary business expenses within the meaning of

section 17 of the Civil Enforcement Act , c. C-15. I decline to extend the attachment order. Conclusion [ 37 ] The application for

summary judgment is dismissed. The attachment order is not extended. The parties may approach me as to costs if they cannot agree. Heard on the 18 th day of October, 2011. Dated at the City of Calgary, Alberta this 4th day of November, 2011. Jodi L. Mason M.C.C.Q.B.A. Appearances: Pittman MacIsaac Roy Shaun T. MacIsaac for Michael J. Bondar Professional Corporation Kaczkowski Law Stephen Kaczkowski

for Janstar Homes Ltd.