Rutkowski v. Castro, 2020 BCPC 117

Citation: Rutkowski v. Castro 2020 BCPC 117 Date: 20200521 File No: 1758923 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: ERIN RUTKOWSKI HEINZ RUTKOWSKI CLAIMANTS AND: ANDREA CASTRO DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE M.F. GIARDINI Counsel for the Claimant: M. Menkes Appearing on her own behalf: A. Castro Place of Hearing: Vancouver , B.C. Dates of Hearing: October 12, 2018; January 7, May 16, 17, 2019, June 11, 12, August 27, October 28, 2019 Date of Judgment: May 21, 2020

INTRODUCTION [ 1 ] In this case, a dispute arose about to the commission payable on two real estate deals that occurred in 2016 involving the claimants (also referred to as the Rutkowskis) and the defendant Ms. Castro. The Rutkowskis were the owners of a residential property on 56 Avenue in Surrey, British Columbia, which they decided to sell. At about the same time they were looking for a new home and eventually purchased a home on a golf course in Chilliwack.

In these reasons I refer to the Rutkowskis’ original home as the Surrey property and to the home they eventually purchased in Chilliwack as the Falls Court house. Ms. Castro, a licensed real estate agent, was involved in both transactions. The first transaction related to the sale of the Rutkowskis’ Surrey property. The second transaction related to the Rutkowskis’ private purchase of the Falls Court house. [ 2 ] The Rutkowskis filed a claim against Ms. Castro regarding the commissions/fees relating to the two real estate transactions. First, the Rutkowskis maintain that the only commission they agreed to pay Ms.

Castro for the sale of Surrey property was $20,000. According to the Rutkowskis, they reached an agreement with Ms. Castro about a reduced commission, which was different from the normal real estate commission that would have been payable based on the sale price of the Surrey property. [ 3 ] Second, the Rutkowskis say that they reached an agreement with Ms. Castro about a fee they would pay her to help them with the paperwork for the purchase of the Falls Court house in Chilliwack. They maintain that Ms.

Castro said she would help them with the paperwork on their private purchase of the Falls Court house for a fee of $2,500. However, when an issue came up relating to subject removal, the Rutkowskis say Ms. Castro took advantage of a time-sensitive and stressful situation. She changed her fee from $2,500 to $10,000. The Rutkowskis say at that point they were in a crisis situation and felt constrained to agree to the $10,000 fee Ms. Castro requested in order not to lose the deal on the Falls Court house. [ 4 ] Ms.

Castro denies the assertion made by the Rutkowskis that she made a special deal with them regarding the commission payable for the sale of the Surrey property. She maintains the Rutkowskis signed a listing agreement that they would pay a gross commission of 7% on the first $100,000 and 3% on the balance of the sale price of the Surrey property. Furthermore, in relation to the Falls Court house, Ms. Castro says that although there was discussion of a fee of $2,500 to do the paperwork for the purchase of that home, she quickly realized she could not do the deal at that price. Ms.

Castro maintains that when the purchase and sale agreement for the Falls Court house was signed the Rutkowskis also agreed to pay her a fee of $10,000. She denies that she was party to any acts of duress or harassment or other high-handed conduct towards the claimants regarding the purchase of the Falls Court house. [ 5 ] Additionally, Ms. Castro filed a counterclaim. She seeks to recover the balance of the real estate commission she claims is owing to her on the sale of the Surrey property. That amounts to $24,150. RJD Law Corporation is currently holding that amount in trust. Ms.

Castro also claims damages for approximately $10,850 for the time she spent on recovering the commission and other general damages. Further, Ms. Castro asserts that no money was paid to her for the work she did on the purchase of the Falls Court house and therefore she also claims $10,000 in that regard. REMEDY SOUGHT BY PARTIES [ 6 ] The Rutkowskis maintain there are two overarching questions to be addressed in this case. Those questions are: • What agreement was reached by the parties regarding the sale of the Surrey property?

In particular, what agreement was reached regarding the commission the Rutkowskis would pay to their realtor Ms. Castro? • What agreement, if any, was reached by the parties regarding the Rutkowskis’ purchase of the Falls Court house. In particular, what agreement was reached regarding a fee or commission to be paid by the Rutkowskis to Ms. Castro? [ 7 ] The Rutkowskis say I should consider the surrounding circumstances in arriving at a decision in this case. They do not deny that they signed an MLS listing contract with Ms. Castro for the sale of the Surrey property.

However, they maintain that a strict version of the parol evidence rule does not apply in the circumstance of this case. [ 8 ] The Rutkowskis submit that Ms. Castro made a representation to them at a meeting on March 30, 2016, that she was prepared to take a reduced commission to represent them on the sale of their Surrey property. They further submit that on April 4, 2016, when the MLS listing agreement was signed, she represented to them that the wording in the MLS listing contract regarding commissions only represented what she would “normally” charge for commission.

They say a discussion with her, at the time they signed the MLS listing agreement, confirmed that she would only charge them $20,000. [ 9 ] The Rutkowskis submit Ms. Castro’s representations that she would accept a lower commission induced them to list with Ms. Castro. The Rutkowskis further submit that other evidence led at this trial will support their position that the agreement for commission payable on the sale of the Surrey property was $20,000. [ 10 ] With respect to the Falls Court house, the Rutkowskis submit they reached an agreement with Ms.

Castro that she would charge them $2,500 to do the paperwork on a private real estate deal that they had reached with the Pilgrims, the owners of the Falls Court house. The Rutkowskis also submit that circumstances later arose that required them to change the subject removal date on the Falls Court house. They say that when they asked Ms. Castro to help them in doing so, Ms.

Castro only agreed to assist them if they paid her $10,000. [ 11 ] The Rutkowskis seek the following remedies: • an order that legal counsel representing the buyer of the Surrey property, RJD Law Corporation, release from its trust account the sum of $24,150.00 which is being held pending this trial; • a dismissal of Ms. Castro’s counterclaim;

• pre-judgment interest on the amount held in trust by RJD Law Corporation, although counsel for the Rutkowskis was not certain if interest accrued while the money was held in trust; • costs including cost of appraisals; • a penalty under the Small Claims Rules to deal with Ms. Castro’s behaviour during the hearing. Counsel for the Rutkowskis maintains that Ms. Castro manufactured evidence, pursued this matter even though there was no chance of success, and wasted court time by not being prepared. [ 12 ] The defendant, Ms. Castro, challenges the claim made by the Rutkowskis.

She relies on the MLS listing contract for the Surrey property and maintains that she is entitled to the full commission specified in that document, namely, 7% on the first $100,000 and 3% on the balance. She also relies on the “entire agreement” clause contained in the MLS listing contract. Ms. Castro maintains that the Rutkowskis agreed to pay the commission set out in the MLS listing contract for the Surrey property and therefore their claim should be dismissed. Ms. Castro denies there was any offer on her part to reduce the commission payable on the sale of the Surrey property. [ 13 ] Additionally, Ms.

Castro submits that although there was discussion of a fee of $2,500 to be paid to her in relation to the purchase of the Falls Court house, the amount of the fee was changed to $10,000 and was agreed to by the Rutkowskis. Ms. Castro maintains the Rutkowskis agreed to the change but did not sign off on it on DocuSign. She maintains she attempted to reach them on numerous occasions to have them sign the document. They eventually signed it when they asked her to help them remove subject conditions on the Falls Court house purchase.

She denies that anything was done under duress or that she did anything to press the Rutkowskis to pay a $10,000 fee. She maintains that their claim in regard to the Falls Court house should be dismissed. [ 14 ] Moreover, Ms. Castro, as already noted, filed a counterclaim. She claims $24,150 as a balance of the real estate commission owing on the sale of the Surrey property. She also claims $10,850 as damages for the time spent in pursuing a claim against the Rutkowskis and attempting to recover the commission. Further, Ms.

Castro claims $10,000 for commission due to her for assisting the Rutkowskis with the purchase of the Falls Court House. THE TRIAL [ 15 ] Before turning to the background circumstances, I note that on the first day of trial in October 2018 both parties were represented by counsel. This matter had been scheduled for only one day, which turned out to be insufficient. The second day of trial was in early January 2019. On that day, the court learned that Ms. Castro would be representing herself.

The matter then continued in fits and starts and eventually completed at the end of October 2019. [ 16 ] The claimants presented evidence of three witnesses (Mr. and Mrs. Rutkowski and Ms. Yip). The defendant presented evidence of two witnesses (Ms. Castro and Mr. Dhillon). While there was no disagreement about some of the central events that led to the dispute, there were differences on many matters regarding who said and did what, when, and where.

There were definitely differences about the nature and amount of the commission/fees agreed to regarding the Surrey property and the Falls Court house. [ 17 ] In these reasons, I have not set out all of the evidence heard over the course of the trial. As well, I have not identified all of the areas where there was disagreement or differences between the parties about the background circumstances. However, I have considered all the relevant evidence and documents.

PRELIMINARY NOTE - EVIDENTIARY AND LEGAL ISSUES [ 18 ] The nature of the dispute between the parties and the evidence led at the trial raises certain evidentiary issues as well as issues regarding the substantive law of contract. [ 19 ] The parties identified several written documents that appear to set out written agreements reached by the parties in respect of the sale of the Surrey property and the purchase of the Falls Court house. However, the parties, in part, dispute how the documents came to be and whether the documents truly represent the whole agreement reached by the parties.

Accordingly, one of the first questions that arises is whether evidence given by the parties regarding the making of the documents that purport to be written contracts is admissible in determining whether the parties reached an enforceable agreement. [ 20 ] There is a common law rule called the parol evidence rule which applies to the admissibility of extrinsic evidence regarding how parties arrived at a written agreement. In this case, as will be seen in a subsequent

section of these reasons, the parties presented extrinsic evidence to support their differing views about the nature and import of the written documents. For reasons that will be expanded on in these reasons for judgment, I admitted the extrinsic evidence led by the parties. [ 21 ] In particular, one piece of extrinsic evidence that was submitted by the Rutkowskis is a recorded cell phone call between Mr. Rutkowski and Ms. Castro that occurred on April 24, 2016.

I admitted that recorded cell phone call but reached no conclusion about the weight I would place on the cell phone call until all the evidence was completed. [ 22 ] The case law makes it clear that even if extrinsic evidence is admitted at trial a judge must determine whether the parol evidence rule as a matter of substantive law precludes the court from relying on that evidence where the entire agreement is in writing. [ 23 ] The above noted points apply to my consideration of the evidence relating to both the Surrey property sale and the Falls Court house purchase.

However, with respect to the latter, the question I need to decide is not only whether an agreement exists but, if it does, whether it should be set aside under general contract principles such as fraud, duress, lack of capacity or mutual mistake. [ 24 ] Having provided this brief

summary of the evidentiary and other issues arising in this case, I now turn to the surrounding circumstances. CIRCUMSTANCES - SALE OF SURREY PROPERTY

[ 25 ] I have separated the issues arising out of the Surrey property sale from the Falls Court house purchase. I did so for ease of analysis and because the evidence of the parties is that those were two separate arrangements. However, the background circumstances and sequence of events between the two transactions overlap at some points. Undisputed background facts • The defendant Ms. Castro is a licensed realtor. She has been a realtor since 2009. By 2016 she had already sold approximately 300 homes. In the spring of 2016, she was working as a realtor with Homeland Realty. • The Rutkowskis work in sales.

They owned a one-acre property in Surrey, British Columbia, which was purchased on or about 2001. In the spring of 2016, they discussed selling the Surrey property. They spoke to a neighbour, Jas Sahota, who was involved in property development. They asked him if he could give them the name of a realtor. • On March 29, 2016, Mr. Sahota and his wife went to see the claimants. Mr. Sahota offered the Rutkowskis $1,000,000 for the Surrey property. The Rutkowskis declined that offer. Mr. Sahota raised his offer to $1,100,000.

The Rutkowskis declined that offer as well because they wanted to do their due diligence. • On or about March 30, 2016, Mr. Rutkowski received an unsolicited call on his cell phone from Ms. Castro regarding the Surrey property. • On March 30, 2016, Ms. Castro sent a text to Mr. Rutkowski and suggested a meeting at a Starbucks in Surrey. Mr. Rutkowski, his wife, Ms. Castro and her colleague Mr. Dhillon met at the Starbucks. The parties agree that such a meeting took place. However, the substance of the discussion that took place between them is in dispute. • Later that evening, Ms. Castro sent Mr.

Rutkowski a follow-up text saying she hoped to facilitate a deal that would make them happy and building a lasting work relationship. Mr. Rutkowski replied saying, among other things, that it was very overwhelming. • On March 31, 2016, Ms. Castro sent a text to Mr. Rutkowski asking if he had made a decision. • On April 4, 2016, the Rutkowskis met with Ms. Castro and Mr. Dhillon at the Rutkowskis’ home and discussed listing the Surrey property. On that date, a number of documents were signed including a seven page MLS listing contract.

However, there is disagreement about what was discussed and what was signed that day and the length of time of the listing. • The MLS listing contract was a pre-printed contract apparently endorsed by the Real Estate Board of Greater Vancouver and the British Columbia Real Estate Association. A typed notation at the bottom of the contract indicates it is copyrighted by the BC Real Estate Association. The particular form used was Web forms August 2015. Parts of that MLS listing contract were blank, but some of the blank portions had typewritten information on them. • The Rutkowskis each initialed a

section at the bottom of each page. They also each initialed several of the numbered sections, for example, Item 1 A which set out the term of the listing, namely April 4, 2016 to October 31, 2016, and Item 3, which set out the listing price of $1,250,000. Mr. Rutkowski thought the Surrey property should be listed at a higher price but eventually agreed to list it for $1,250,000. • The MLS listing contract was signed at the bottom of page 6 by both the Rutkowskis and by Ms. Castro as designated agent. Page 7 of the MLS listing contract was titled

Schedule A and set out various services to be provided by the real estate agent. There was a handwritten portion on

Schedule A that the listing realtor agreed to the unconditional release of the contract at any time. The written change and a deletion were initialed by the Rutkowskis. • The MLS listing contract contained a provision in Item 15, “Miscellaneous” that the contract fully set out the terms of the agreement between the parties. It also contained a provision in Item 16 titled “Entire Agreement”. Neither of these Items was initialled by the Rutkowskis. • On April 11, 2016, Mr. Dhillon went to the Surrey property to take photographs. • On April 17, 2016, Ms. Castro held an open house at the Surrey property.

Late that afternoon Ms. Castro sent Mr. Rutkowski a text saying the open house went well but suggested doing the offer the next day. • On April 19, 2016, Ms. Castro met with Mr. Sahota and showed him the Surrey property. • On April 19, 2016, the Rutkowskis met with Ms. Castro at which time she presented them with an offer from Mr. Sahota on behalf of MDR Homes Ltd. The offer was for $1,300,000 cash with a deposit cheque of $50,000. The Rutkowskis accepted the offer presented by Ms. Castro from Mr. Sahota.

Disputed circumstances [ 26 ] There were a number of differences regarding the background circumstances, including about the following key areas: Initial discussions about commission [ 27 ] Mr. Rutkowski testified he and his wife met with Ms. Castro and her associate Mr. Dhillon for about 25 minutes to an hour on March 30, 2016. He said a number of things occurred during that discussion. First, Ms. Castro told them she represented four investors who were all interested in the Surrey property. Second, she told them she had an offer of $1,100,000 in her pocket.

Third, she told them they should take that deal because it was a good deal. She suggested they should do the deal quickly. She said her commission would be $25,000. She next raised the offer to $1,150,000 and later, after she answered a telephone call, apparently from one of the investors, she made an offer of $1,200,000. She also said she would reduce her commission to $20,000. She wanted to make the deal happen. Mr.

Rutkowski told Ms. Castro that they would not be making a deal that night. [ 28 ] Mrs. Rutkowski testified that Ms. Castro had set the commission fee at $25,000 at Starbucks and later dropped it down to $20,000. According to Mrs. Rutkowski, at the March 30, 2016, meeting at Starbucks Ms. Castro had an initial offer. She, next offered $1,150,000. Ms. Castro then received a telephone call and the offer went up to $1,200,000. Ms. Castro tried to convince them this was a good offer. After Mr. Rutkowski said they wanted to explore the market and he knew a lot of the realtors, Ms.

Castro said that she had a $25,000 flat fee commission. As the offers went up, Ms. Castro was anxious to make the deal happen then and there. Ms. Castro said she would drop her commission fee to $20,000. Mrs. Rutkowski said no deal was made that night. She and her husband were going to talk about it. [ 29 ] Ms. Castro testified that when she met with the Rutkowskis on March 30, 2016, at Starbucks she discussed whether they were interested in selling their home. She gave them a

summary of what was happening in the market. Ms. Castro said the Rutkowskis were interested in having her go to their home to go through comparables. Ms. Castro said they also discussed the difference between an MLS listing and a private listing. Ms. Castro said the March 30 meeting was just a short introduction to see if the Rutkowskis were interested in having her go to their home and sit down with them and go through a proper comparable/valuation process. [ 30 ] Mr. Dhillon testified he was present at the first meeting with Ms. Castro and the Rutkowskis at Starbucks on March 30.

He said it was simply an initial meeting to get information. Mr. Dhillon said no offers were presented at that time. He said they discussed a commission of 7% on the first $100,000 and 3% on the balance. They discussed a listing opportunity with the Rutkowskis but they did not discuss a listing price. Discussion on April 4, 2016, and what was signed [ 31 ] Mr. Rutkowski said he and his wife signed a MLS listing contract on April 4, 2016. Ms. Castro came to their house. They ended up listing the house at $1,250,000. This was the amount Ms. Castro recommended in order to create interest.

He wanted to list the property at a higher price. At that meeting there was a discussion regarding commission. He acknowledged that Item 5 in the MLS listing contract was brought to his attention. That item states that the seller agrees to pay a gross commission of 7% on the first $100,000 and a commission of 3% on the balance of the sale price of the property, plus GST and other applicable taxes. According to Mr. Rutkowski, when Ms. Castro brought this Item in the MLS listing contract to his attention, she told him that she wanted him to acknowledge “that is our regular commission”. However, Mr.

Rutkowski testified he and Ms. Castro arrived at a different commission agreement. [ 32 ] He referred to a Fee Agreement Buyer Pays. He said Ms. Castro tapped on that document and asked him what number he wanted her to write there. He said his wife pointed out that Ms. Castro had earlier mentioned $20,000. That is what Ms. Castro wrote on the document. He and his wife signed the Fee Agreement Buyer Pays. He said that only the pre-printed and typewritten parts of the fee agreement were there when he signed it. The name of the buyer was not written in or typed in. Mr.

Rutkowski said the $20,000 was not typed in, nor was the date. He said there was no buyer’s signature and no witnesses’ signature on that document. [ 33 ] After the fee agreement document was signed, Mr. Rutkowski and his wife looked at the rest of the MLS listing contract and signed off on it. It was Mr. Rutkowski’s understanding that the MLS listing contract would be valid for 10 days. If the property sold within that period, Ms. Castro would receive a commission of $20,000. Mr. Rutkowski said he did not receive a copy of the MLS listing contract or the fee agreement that day. He acknowledged Mr.

Dhillon was at the meeting but Mr. Dhillon did not participate in the discussions. [ 34 ] Mr. Rutkowski said that at the April 4, 2016, meeting they discussed how the Surrey property would be marketed. He said Ms. Castro talked about having foreign investors who were interested in the property. Also, there was Mr. Sahota who had indicated his interest privately to the Rutkowskis. [ 35 ] Mrs. Rutkowski also testified about the second meeting, on April 4, 2016. That meeting was at the Surrey property. She said there was discussion about listing the property. She said Ms.

Castro intimated that she had four investors and Mrs. Rutkowski and her husband mentioned that they had someone who was interested. There was a discussion about the listing price. They ended up listing at $1,250,000 as this was Ms. Castro’s recommendation. However, her husband had wanted to list it at a higher price because he thought there might be a bidding war. [ 36 ] Mrs. Rutkowski said they signed paperwork on April 4. One of the documents they signed was an MLS listing contract. She said before they signed that document they discussed the commission. She said before they signed the MLS listing contract Ms.

Castro provided them a form with a line that was blank and asked them what number they wanted her to write on the form. Mrs. Rutkowski pointed out that at the previous meeting at Starbucks Ms. Castro has said $20,000. Mrs. Rutkowski said that the document she signed was a document she later identified as being the Fee Agreement Buyer Pays. Mrs. Rutkowski said Ms. Castro presented that document as being their fee agreement. They signed that. She said that the only writing on the document was on the line where $20,000 was written in and the lines with her signature and that of her husband. [ 37 ] Ms.

Castro’s evidence about the April 4, 2016, meeting was that she had a further discussion with the Rutkowskis about the market and showed them some comparables. They were adamant they wanted only land value for the property. This was because they had done some work on the house without a permit. She brought a listing contract with her, another document called “Working with a Realtor” and a co-listing contract. Those were all the documents she had. Ms. Castro said she went through the whole MLS listing contract and explained it to the Rutkowskis. [ 38 ] She said they also went through the commission.

She said once they had agreed to the listing price, namely, $1,250,000 “we” worked out a worst-case scenario. She said that is what she does with her clients. She worked out three different scenarios for the Rutkowskis on a scrap piece of paper. She believed that they calculated one commission at $1,200,000 and a commission at $1,350,000. She believed that Mrs. Rutkowski had her cell phone and took a photo of the MLS listing contract using the cell phone. Ms. Castro said her practice is to go through all of the documents including the MLS listing contract and any attached schedules. [ 39 ] Mr.

Dhillon testified that at the initial meeting they discussed the commission payable of 7% on the first $100,000 and 3% on

the balance. There was a second meeting with the Rutkowskis at their home. That was the actual listing appointment on April 4, 2016. At that meeting he and Ms. Castro went through their listing presentation. They had brought comparables and a market analysis. They compared the information and came to a listing price based on that information. He thought the meeting went well because they ended up scheduling photographs and video of the property at the same time. [ 40 ] Mr. Dhillon was asked whether he remembered any discussion about the commission amount set out in Item 5 of the MLS listing contract.

He said the amounts set out in that Item were the commission amounts discussed. He did not remember the Rutkowskis having any discussion about the commission between themselves. Mr. Dhillon said he generally carries around a notepad to do commission calculations. He made a commission calculation that evening. It was based on a final price of $1,250,000. The calculation was based on 7% on the first $100,000 and 3% on the balance. Mr. Dhillon said he wrote the commission amount on a piece of scrap paper and showed it to the Rutkowskis. Mr.

Dhillon said there was no discussion of a 10-day listing contract. [ 41 ] In cross-examination, Mr. Dhillon was asked about the commission calculation. He maintained he did a commission calculation for the Surrey property. He did not remember exactly what the calculation was. He had not reviewed his notebook in preparation for giving evidence. Mr. Dhillon said that it would have been based on 7% of the first $100,000 and 3% on the balance at a listing price of $1,250,000. Mr. Dhillon had a specific recollection about going through Item 5, or a portion of it, on the MLS listing contract.

He said that as a matter of general practice he brings comparables and a market analysis. More about commission amount [ 42 ] Both Mr. and Mrs. Rutkowski testified that the commission for the Surrey property was discussed at the first meeting at the Starbucks on March 30, 2016. It was later discussed again on April 4, 2016, when Ms. Castro and Mr. Dhillon went to their home. [ 43 ] Mr. Rutkowski testified that Ms. Castro said the commission would be $25,000. In fact, Mr. Rutkowski testified that when he mentioned other realtors, Ms. Castro said other realtors were not like her and Mr.

Dhillon, who had a standard commission of $25,000. Later in the meeting of March 30, while discussing the offers, Ms. Castro was pressing them to consider an offer of $1,200,000 as being a really good deal. She said that she would reduce her commission rate from $25,000 to $20,000. She wanted to make the deal happen. [ 44 ] Later, on April 4, 2016, when she went to their home to sign the MLS listing contract, Mr. Rutkowski said Ms Castro had him sign a document which was primarily blank and she wrote $20,000 on that document.

She told him she wanted him to acknowledge the term in the MLS listing agreement regarding the regular commission (7% on the $100,000 and 3% on the balance). However, she then had them sign the other document. [ 45 ] Mrs. Rutkowski testified that the agreement for $20,000 was established before she and her husband completed the MLS listing agreement with Ms. Castro. [ 46 ] Mrs. Rutkowski also said that Ms. Castro mentioned the commission again to her on or about June 7, 2016, when during a conversation Ms. Castro told her that she had offered the $20,000 commission because she liked the Rutkowskis.

The following day Ms. Castro told Mrs. Rutkowski that she should hold them to the legally binding contract for the full commission. Contact between Ms. Castro and Mr. Sahota [ 47 ] Ms. Castro testified that on April 18, 2016, the day after the open house, she received a call from an interested party, namely Mr. Sahota. He told her he was interested in seeing the property and possibly writing an offer. She said she explained where her sellers’ mindset was at. They wanted a cash offer. They were nervous or apprehensive about selling; they did not want to go through the headache . Ms.

Castro said she asked the Rutkowskis if she could show the Surrey property on April 19. They agreed. She showed Mr. Sahota the house the next day and he made an offer. [ 48 ] In cross-examination, Ms. Castro was asked about the inquiries she said she had made in the neighbourhood prior to contacting the Rutkowskis. She was asked if Mr. Sahota was one of the neighbours she had contacted before meeting the Rutkowskis. She said she did not. It turned out Mr. Sahota was the owner of MDR Homes Ltd., the company that bought the Surrey property. In cross- examination, Ms.

Castro was asked about her first contact with Mr. Sahota. She said it was when he first came to the property. That question was repeated. She said she could not recall. She was asked if she had met Mr. Sahota before or after the open house. She said it was after the open house. Ms. Castro was asked if she had ever dealt with Mr. Sahota before. She said she had. She could not be sure exactly when she had met him or in what capacity, but it was in regards to real estate with an electrician. When asked to explain that, she said Mr. Sahota belonged to a group of people.

He was associated with one of her associates with whom she had done business. Ms. Castro maintained that Mr. Sahota did not actually view the home until after the open house on April 17. [ 49 ] Ms. Castro maintained it was Mr. Sahota who contacted her not the other way around. She said her first contact with him was on April 18, 2016, when he contacted her. A copy of the deposit cheque that Mr. Sahota gave her was shown to Ms. Castro. She was asked why the deposit cheque was dated April 16, 2016. She said she had no knowledge. It was suggested to Ms. Castro that she was actually in contact with Mr.

Sahota on April 16, 2016. She denied that was the case. She said she received the deposit cheque either on April 19 or the 20. She could have had the cheque as early as April 19. She believed that she had shown the Rutkowskis the deposit cheque before they signed the contract of purchase and sale. The timing of offer to purchase [ 50 ] Ms. Castro held an open house on April 17, 2016, for approximately two hours. Ms. Castro sent a text to Mr. Rutkowski in the late afternoon of April 17. The text said that the open house went well and suggested that they do the offer the next day. In cross- examination, Ms.

Castro put to Mr. Rutkowski that they had a telephone conversation about meeting on April 19 instead of April 18. She also put to him that she had let him know that they had a few people go through the open house but no one was ready to purchase the Surrey property. Mr. Rutkowski did not recall that conversation. [ 51 ] Ms. Castro said she had a further conversation with Mr. Rutkowski to let him know that she had a call from a man who wanted

to go over to the house because he was interested. Mr. Rutkowski did not recall that telephone conversation. [ 52 ] Mrs. Rutkowski testified that her recollection was they were supposed to meet on April 17, 2016, in the evening after the open house to open the bids. That did not happen. Instead, Ms. Castro sent a text to Mr. Rutkowski around 4 o’clock suggesting that they open the offer the next day. Mrs. Rutkowski said that Ms. Castro called her or texted her the following morning asking Mrs. Rutkowski to have a telephone discussion. Mrs. Rutkowski was on a conference call and said she would call Ms.

Castro back, which she did. At that time, Ms. Castro told her she had received one offer and it was from Mr. Sahota for $1,300,000. Ms. Castro also told her she had a $50,000 deposit cheque. Ms. Castro wanted to know when they could get together to discuss this. Mrs. Rutkowski said arrangements were made to meet on April 19, 2016 at 3 p.m. [ 53 ] According to Ms. Castro, on April 18, 2016, she received a call from Mr. Sahota. He was interested in purchasing the Surrey property. He told her he would be making a cash offer. Ms.

Castro said she had a purchase and sale contract from the open house that she had prepared, which was dated April 17. Ms. Castro said she met with Mr. Sahota at the Surrey property on April 19, 2016. Mr. Sahota wrote up the offer in the Rutkowskis’ kitchen. [ 54 ] In addition to the offer to buy the Surrey property, Mr. Sahota also signed a Fee Agreement Buyer Pays. Ms. Castro testified that the fee agreement was a separate agreement from the listing contract. It was an agreement that the buyer was willing to pay her a fee ($20,000) for introduction to the property. Ms.

Castro said she explained all of this to the Rutkowskis that same day when she presented them with the offer from MDR Homes Ltd. The April 19, 2016, purchase and sale agreement [ 55 ] Mr. Rutkowski said that on April 19, 2016, he and his wife met with Ms. Castro at their home. She presented them with a $50,000 cheque from Mr. Sahota. Ms. Castro told them she had a good offer. She showed them the contract of purchase and sale for $1,300,000. The buyer on that document was shown as being MDR Homes Ltd. Mr. Rutkowski asked Ms. Castro whether there were other offers.

She told him there was only the one offer and it was a good offer. Mr. Rutkowski told Ms. Castro he thought she was representing four investors. He asked why they only had one offer. Ms. Castro’s response was simply that they only had the one offer. Mr. Rutkowski thought the offer was a bit low. He was also disappointed because he thought there were going to be more offers. [ 56 ] Mr. Rutkowski said he and his wife ultimately accepted the offer presented by Ms. Castro. It fell within the range they had in mind. They did not make a counter offer. Ms. Castro filled in the closing date and the date of possession.

Those were dates suggested by the purchaser. [ 57 ] Mrs. Rutkowski said that on April 19 in the afternoon Ms. Castro went to the Surrey property. She told them once again that she had one offer from Mr. Sahota. She pulled out the deposit cheque and said that she needed to know right away. Mrs. Rutkowski said they had a brief discussion about the offer. Then she and her husband had a discussion between themselves. Although they were not elated by the offer, they thought it was a fair offer and they accepted it. Mrs. Rutkowski said after they had accepted the offer Ms.

Castro pulled out a purchase and sale contract. [ 58 ] Mrs. Rutkowski said that the Fee Agreement Buyer Pays was not signed on April 19, 2016, in her presence. [ 59 ] Ms. Castro said she met with the Rutkowskis when they came back to the house, this was on April 19. She was by herself as her colleague Mr. Dhillon was not with her. Ms. Castro showed the Rutkowskis the offer for $1,300,000. She also showed them the Fee Agreement Buyer Pays. That agreement was attached to the offer. She said she explained to the Rutkowskis that the fee agreement was separate from the MLS listing contract.

She told the Rutkowskis this was a fee agreement that the buyer was willing to pay for the introduction to the property. Ms. Castro testified she told them she was solely representing them in the transaction. The buyer was not represented. Ms. Castro said they signed the documents and everyone was content. She said no issues were raised at the time. [ 60 ] Ms. Castro said she believed the Rutkowskis took pictures of the purchase and sale agreement on their cell phones. She also said Mr.

Rutkowski told her he was very excited because they had found a home they wanted to purchase in Chilliwack. [ 61 ] With respect to the deposit cheque from the buyer, Ms. Castro said she received it from Mr. Sahota either on April 19 or April 20. She said her first contact with Mr. Sahota was on April 18. She could not explain why the deposit cheque was dated April 16, 2016. She denied she had any contact with Mr. Sahota on April 16. She had the deposit cheque to show to the Rutkowskis before they signed the purchase and sale agreement for their Surrey property. [ 62 ] Ms. Castro was cross-examined about this.

She said she understood that the Rutkowskis had prior discussions with Mr. Sahota before they listed their property. When Mr. Sahota told her he wanted to see the property in their conversation of April 18, 2016, she mentioned that there were people who had come to the open house. He told her that he was anxious to have the Surrey property and that he would do a fee agreement. [ 63 ] Ms. Castro testified she met Mr. Sahota the following day, April 19. He explained to her that he had some other properties. He was the one who suggested the fee agreement of $20,000. Ms.

Castro said she explained all of this to the Rutkowskis when she presented the offer. They did not seem to care about it. Ms. Castro said one of them said it had nothing to do with them. They simply signed the fee agreement. [ 64 ] In cross-examination, Ms. Castro was asked whether Mr. Sahota ever paid the $20,000 fee. She said he had not. Ms. Castro said that sometime in June 2016, she could not recall the precise date, Mr. Sahota contacted her and suggested to her that instead of paying the $20,000 set out in the fee agreement he could give her another project that would be bigger than the $20,000. Ms.

Castro testified Mr. Sahota referred her to another project and did not pay the $20,000. [ 65 ] Ms. Castro said she cancelled the fee agreement she had signed with Mr. Sahota by making an addendum and sending it to her realty office. She said she also sent out emails. Ms. Castro believed she sent the email to her own office and to the buyer’s law office. In cross-examination, Ms. Castro was asked whether the addendum cancelling the fee agreement had been put into evidence. She said it

had not, however, she could obtain it. [ 66 ] Ms. Castro maintained there would be two independent trade record sheets prepared by her and sent to her office. One trade record sheet would be for the money Mr. Sahota owed her and the other would be for the commission the Rutkowskis owed her. The April 24, 2016, recorded telephone conversation [ 67 ] Ms. Castro denied that the Fee Agreement Buyer Pays is what she was referring to in the April 24, 2016, conversation when she said there was something in writing between her and the Rutkowskis.

She categorically denied that was the document she was referring to in the April 24 conversation. The content and context of the recorded conversation is set out at paragraphs 121 - 122 in these reasons. The documentation and conveyancing package [ 68 ] Mrs. Rutkowski testified that she and her husband retained a notary, Vicki, at Sterling Notary, to complete the documents necessary for the sale of the Surrey property. She said in June 2016, Vicki notified them that there was a problem regarding the commission fee. Mrs.

Rutkowski learned that on June 7, 2016, a conveyancing package was sent to a lawyer for MDR Homes Ltd. which showed a commission of $20,000. On June 8, 2016, there was another conveyancing package also for a $20,000 commission but it went to a different lawyer. Later still, on June 21, 2016, there was another change to the commission. At that point, the commission had gone up to $43,000 plus GST. [ 69 ] Mrs. Rutkowski testified that on or about June 7, 2016, she had a telephone conversation with Ms. Castro. At that time, Ms. Castro told her that Mr.

Sahota wanted to extend the closing date for the Surrey property. In the course of that discussion, Mrs. Rutkowski said Ms. Castro told her that she really liked Mrs. Rutkowski and her husband and that was why she had done their Surrey property deal for a $20,000 commission. [ 70 ] Mrs. Rutkowski had another conversation with Ms. Castro the following day on June 8, 2016. They discussed an extension Mr. Sahota wanted to the closing date for the Surrey property. Mrs. Rutkowski was not happy about having to change the closing date. At one point, the telephone conversation became rather heated. Mrs.

Rutkowski testified that Ms. Castro told her she and her husband were uptight people and said she should hold the Rutkowskis to the legally binding contract for the full commission. Mrs. Rutkowski reminded Ms. Castro that she had set the commission of $25,000 at the Starbucks and then dropped it to $20,000. Trade record sheets [ 71 ] Ms. Yip, a conveyancer with Homeland Realty testified about the documents she processed in the course of completing the sale of the Rutkowskis’ Surrey property. Ms. Yip testified she received an initial trade record sheet from Ms. Castro.

Based on that initial trade record sheet she prepared a conveyancer’s instruction report which was sent to the buyer’s law firm (Tiwana Deol Sandhu LLP) on June 7, 2016. The conveyancer’s instruction report contained information about the sale of the Surrey property. That report showed that the gross commission payable was $20,000 plus GST for a total of $21,000. It indicated there was a trust balance of $50,000 and that excess funds held (after the commission had been deducted) were $29,000. [ 72 ] A cover letter of June 7, 2016, confirmed Ms.

Yip’s understanding of the background regarding the Surrey property sale. She was seeking confirmation of the instructions she had before she prepared the documentation. [ 73 ] On June 8, 2016, a second cover letter and conveyancer’s instruction report, on which there was a handwritten note “revised”, was sent to RJD Law Corporation. Ms. Yip testified that she had learned the buyer had changed lawyers. This second letter was similar to the first letter. She was seeking confirmation of instructions before she prepared the necessary documentation.

The revised conveyancer’s instruction report was exactly the same as the earlier report. The only change was the name and address of the buyer’s lawyer. [ 74 ] On June 21, 2016, at 2:10 p.m. Ms. Castro sent an email to Homeland Realty’s conveyancing department with an attached trade record sheet for the Surrey property showing a gross commission of $43,000 plus GST of $2,150 for a total of $45,150. At 2:20 p.m. by email, Ms. Yip sent a note to Ms. Castro asking her to provide a signed commission agreement because the commission amount on the deal sheet she had sent prior to that date was totally different. Ms.

Yip asked whether the gross commission was $43,000 plus GST or $20,000 plus GST. [ 75 ] Ms. Castro replied by email at 2:27 p.m. June 21 with a note that $20,000 was not being charged to the buyer. She referred to the listing contract and a listing commission of 7% on the first $100,000 and 3% on the balance. [ 76 ] On June 21, 2016, (the time stamp on the fax was 3:11 p.m.), a further letter was sent to Mr. Barreto, the buyer’s lawyer at RJD Law Corporation. The conveyancer’s instruction report (revised) was attached. That report indicated that the listing commission had been changed.

The excess deposit of $29,000 had already been sent to the buyer’s lawyer on June 14, 2016. The letter asked that the difference in commission be returned to Homeland Realty. The listing commission shown on the June 21, 2016, conveyancer’s instruction report (revised) was $43,000 gross commission and $2,150 GST. [ 77 ] Ms. Castro in her testimony provided a copy of an email sent from Sterling Notary who was handling the conveyance of the Surrey property for the Rutkowskis. The email was sent on June 27, 2016, (2:29 p.m.) from Vicki to Ms. Yip. Vicki was asking Ms.

Yip to confirm who was going to pay the listing commission of $45,150, which included GST. Vicki’s email referred to a Fee Agreement Buyer Pays which stated that the buyer was paying $21,000 GST included. She asked whether that meant that the seller was only paying the difference. [ 78 ] On June 27, 2016, at 3:38 p.m., Ms. Yip forwarded Vicki’s email to Ms. Castro and asked her to clarify and confirm the total gross commission amount. She asked Ms. Castro – who will pay you the commission? [ 79 ] Ms.

Castro also provided some general information about the trade records sheets relating to the Surrey property, after she had

introduced an email of June 27, 2016, on day five of the trial. Ms. Castro testified that in her practice, when she has two separate agreements, it is her obligation to prepare two separate trade record sheets. She testified that she prepared two trade record sheets, one for the sale of the Surrey property in accordance with the MLS listing contract, and the other for the buyer’s fee agreement of $20,000. Accordingly, the conveyancing department would be instructed to send two conveyancing reports. [ 80 ] Ms.

Castro referred to a trade record sheet dated June 21, 2016, that she had entered as part of her documents. That trade record sheet referred to a commission of $43,000 plus $2,150 GST for a total gross commission of $45,150. She said that referred to the commission payable for the sale of Surrey property. Ms. Castro further testified there would also be another trade record sheet for the $20,000 fee agreement and a third trade record sheet for the fee agreement ($10,500) on the Falls Court house purchase. [ 81 ] Ms.

Castro said the trade record sheet for the $20,000 fee agreement was on her computer but “they would not have a copy”. She said it was not in the documents. In retrospect, it is not clear whether she meant her book of exhibits or the documents as a whole. [ 82 ] A typed trade record sheet undated and unsigned, for the Falls Court house, was sent by Ms. Castro to the Homeland Realty conveyancing department on June 21, 2016, by email. The commission was shown as being $10,000 plus $500 GST for a total of $10,500. [ 83 ] Ms.

Castro testified that the Homeland Realty office, once it receives the trade record sheet, sends conveyancing instructions to the buyer’s lawyer, which outline the commission that is being held back from the deposit. [ 84 ] Ms. Castro testified she only learned there was an issue regarding the commission for the Surrey property when conveyancing instructions were being sent. At that time, it was brought to her attention there was an issue with the MLS listing contract. She thought that was in mid to late June 2016.

Prior to that she had conversations with the Rutkowskis about a rental agreement for the Surrey property. [ 85 ] Ms. Castro said she received a call from Vicki at Sterling Notary who told her the Rutkowskis were disputing some of the commission being payable to themselves and to the brokerage. Ms. Castro said Vicki told her there was not enough money from the deposit on the Falls Court house as there was only a $1,000 deposit, therefore there was nothing to be held back for the commission. [ 86 ] Later, Ms. Castro referred to the revised conveyancing instruction report that referred to $20,000.

She pointed out, however, that in June 2016 there was a revised listing commission of $45,000. [ 87 ] Ms. Castro said Homeland Realty did not typically use fee agreements. She believed handling that type of document and also having direct conversations initiated by the Rutkowskis might have caused some confusion. She believed there was confusion between the MLS listing contract and the fee agreement. Ms. Yip had just started working at Homeland Realty in 2016. Ms. Castro maintained Ms. Yip had instructions from conversations Ms. Yip had directly with the sellers as did Vicki from Sterling Notary. [ 88 ] Ms.

Castro was cross-examined about the trade record sheets. She said she prepared two independent trade record sheets for the sale of the Surrey property. One was for the money that Mr. Sahota/MDR Homes owed on the fee agreement and the other was for the commission owed by the Rutkowskis on the sale. She was specifically referred to a handwritten trade record sheet dated May 2, 2016. She identified the writing (except for a small notation made on the side by Ms. Yip) as her own. She said (or strongly implied) that the hand-completed trade record sheet form dated May 2, 2016, was for the $20,000 fee payment from Mr.

Sahota/MDR Homes. She maintained that a parallel trade record sheet, which indicated the Rutkowskis were to pay $43,000 plus taxes was also prepared. She could not say for certain whether it was sent to the office on the same day, May 2, 2016. [ 89 ] Ms. Castro maintained that the trade record sheet which was all typed and sent June 21, 2016, was not the first trade record sheet for $43,000 plus tax she had sent to the realty office. Her evidence was that she was simply re-sending a document to the conveyancing department because of their inquiries which suggested there was some confusion. It was suggested to Ms.

Castro that the typed trade record sheet she sent on June 21, 2016, for the Rutkowskis’ full commission was the first time she had sent such a trade record sheet. She said that was incorrect. [ 90 ] Ms. Castro agreed that she did not mention the voiding of the fee agreement with Mr. Sahota. However, she noted that in her email of June 21, 2016, she specifically stated that the $20,000 was not being charged to the buyer. [ 91 ] Ms. Castro said the $20,000 fee agreement with Mr. Sahota was voided by an addendum she prepared; however, one was not produced at trial or disclosed at pre-trial.

In cross examination it was put to her that an addendum voiding the $20,000 commission did not exist; she suggested that was not so. CIRCUMSTANCES - PURCHASE OF FALLS COURT HOUSE [ 92 ] The issue that arises in respect of the Rutkowskis’ purchase of the Falls Court house also relates the amount of money that should be paid to Ms. Castro. However, in the case of the Falls Court house there is no listing agreement with the Rutkowskis or with the Pilgrims. There is a contract of purchase and sale for the Falls Court house dated April 24, 2016. That contract is an agreement between Mr.

Pilgrim, the owner of the Falls Court house, and the Rutkowskis. It does not address the question of monies payable to Ms. Castro. [ 93 ] The other written document that pertains to the purchase of the Falls Court house is a Fee Agreement Buyer Pays dated April 24, 2016. There are two versions of that agreement, each of them dated April 24, 2016. One version, specifies that the fee the Rutkowskis are to pay to the real estate brokerage is $2,500. The other version specifies that the Rutkowskis are to pay $10,000. [ 94 ] Ms.

Castro testified that there is a third written document that pertains to the Falls Court house purchase, namely, a form titled Working with a Realtor (designated agency). However, the Rutkowskis through counsel suggest that it may be a copy of the Working with a Realtor form that was used for the Surrey property. [ 95 ] As I have already noted, the parties are at odds not only about the specific amount payable to Ms. Castro but also about the

details of how the payment of that amount came about. The events leading up to the purchase of the Falls Court house [ 96 ] In addition to selling their Surrey property, the Rutkowskis decided to look for a home in the Chilliwack area. In early April 2016, a realtor named Bindy Kandola called Mr. Rutkowski. She told him about a potential listing at a golf course in Chilliwack. The house had not yet been listed. Mr. Rutkowski was prepared to go see it that day. Ms. Kandola made arrangements, so he and his wife met Ms. Kandola at the Falls Court house. The three of them went inside the house.

They were there approximately 30 minutes or so. [ 97 ] After seeing the house, Mr. Rutkowski and Mrs. Rutkowski met with friends who lived down the road from the Falls Court house on the golf course. They stayed for dinner. Before they left, their friend called Mr. Pilgrim, the owner of the Falls Court house, and made an introduction to Mr. Rutkowski. Mr. and Mrs. Rutkowski met with Mr. Pilgrim. Mr. Rutkowski told him they were interested in his house. Mr. Pilgrim told them he did not want to go through a realtor. [ 98 ] On April 11, 2016, Mr. Dhillon was at the Rutkowskis’ Surrey property with a photographer.

Mr. Dhillon and Mr. Rutkowski were chatting and Mr. Rutkowski told Mr. Dhillon they had looked at a place at the Falls golf course in Chilliwack. He told him they wanted to live near a golf course. He always liked the Falls area but would also consider Hazelmere. [ 99 ] Texts filed as exhibits in this trial indicate that by April 12, 2016, there had been some kind of discussion between Mr. Rutkowski and Ms. Castro about the Falls Court house. It was on this date that Mr. Rutkowski sent a text to Ms. Castro with the address “169 Falls court”.

In the meantime, there was a series of phone calls and text messages between Mr. Rutkowski and Mr. Pilgrim. A meeting was arranged for a visit to the Falls Court house on April 14. [ 100 ] On April 14, 2016, the Rutkowskis met with Mr. and Mrs. Pilgrim. Mr. Pilgrim said he wanted $900,000 for the house. There was no negotiation whatsoever because Mr. Rutkowski told Mr. Pilgrim they would pay that amount. It was a handshake deal. They did however discuss a deposit of $1,000 but nothing was handed over at the time. Nothing was put into writing at that point. [ 101 ] According to Mr. Rutkowski, both Ms.

Castro and Mr. Dhillon knew they had gone to the house. He said they were well aware that he and his wife had reached a private deal with the Pilgrims. Mr. Rutkowski could not recall exactly when he told Ms. Castro about it. He said he spoke to Ms. Castro on a regular basis and there were no secrets. [ 102 ] April 17, 2016, was the day of open house at the Surrey property. A few days later on April 19, 2016, an offer from MDR Homes Ltd. was presented to the Rutkowskis. After they accepted that offer and the deal was signed on the Surrey property, Ms. Castro left.

However, very shortly thereafter she called the Rutkowskis. According to Mr. Rutkowski, Ms. Castro wanted to speak to both of them so he put the call on speaker. Ms. Castro said she was concerned that they were not happy. She offered to do the purchase of the Chilliwack (Falls Court) house for $2,500. [ 103 ] Mr. Rutkowski testified there was no further discussion about the fee at the time. He also testified that the fee for the Falls Court house deal did not come up at any time before April 24, 2016. [ 104 ] Mr. Rutkowski said that the April 19 conversation with Ms. Castro was a very short conversation.

Later arrangements were made to go out to the Falls Court house on April 24, 2016. He said Ms. Castro and Mr. Dhillon knew about the April 24, 2016, meeting at 5:30 p.m. to write up the deal. [ 105 ] Mrs. Rutkowski testified that on April 19, 2016, shortly after Ms. Castro had completed the paperwork for the sale of Surrey property and after she had left the Surrey house, Ms. Castro called them. In the telephone discussion, Ms. Castro said she would write up the deal on the Chilliwack house for $2,500. Mrs. Rutkowski also testified that right from the beginning she and her husband had talked to Ms. Castro and Mr.

Dhillon about the fact they were looking for a house in the Falls area in Chilliwack. Mrs. Rutkowski could not recall the exact date when she told Ms. Castro that they had seen a property on Falls Court. [ 106 ] In cross-examination, it was put to Mrs. Rutkowski that Ms. Castro was going to testify she had no knowledge that the Rutkowskis had seen the Falls Court house at the time of their April 24, 2016, meeting. Further, Ms. Castro was going to testify that she thought April 24 was the first time the Rutkowskis were going to see the Falls Court house to see if they liked it. Mrs. Rutkowski said Ms.

Castro knew they had found a home. Ms. Castro had been told about it between April 12 and April 18, 2016. Later, on April 19, 2016, after they had signed the documents for the sale of the Surrey property, Ms. Castro called them back and told them she was willing to write up the deal for the Chilliwack property for $2,500. Mrs. Rutkowski asserted that Ms. Castro clearly knew about the Falls Court house, otherwise why would she make that offer after leaving their home on April 19, 2016. [ 107 ] In cross-examination, Mrs. Rutkowski also testified that she had not sought Ms.

Castro’s services to purchase the Falls Court house. Instead, Ms. Castro had volunteered her services for a fee of $2,500. Mrs. Rutkowski said she and her husband had negotiated their own deal with George Pilgrim. They were prepared to go to a lawyer, just like Mr. Pilgrim did, to complete the deal. However, after they signed the offer for the sale of the Surrey property on April 19, 2016, Ms. Castro offered to do the paperwork for the Falls Court property for fee of $2,500. At that point, Mrs.

Rutkowski said her husband noted there was value in having a realtor involved and making sure the paperwork was correct. [ 108 ] Ms. Castro asked Mrs. Rutkowski where the figure of $2,500 came from. Mrs. Rutkowski said it came from Ms. Castro when she called them back after the sale of their Surrey property. [ 109 ] Mrs. Rutkowski said the first time she heard about an increase of the fee to $10,000 for the purchase of the Falls Court house was during a telephone discussion, which was recorded on April 24, 2016. Mrs. Rutkowski said Ms. Castro changed the whole dynamic. Ms. Castro and Mr.

Dhillon felt they could do everything for $30,000 so they were adding an additional $7,500 to the fee that had previously discussed for the Falls Court house. [ 110 ] Ms. Castro testified that when she first met with the Rutkowskis on April 4, 2016, she asked them about their future plans. Ms.

Castro said they asked her to look for properties in Chilliwack on the golf course. At that time, she put them on an email list to forward any properties that might come up in that area. [ 111 ] Ms. Castro’s evidence was that after everything had been signed off on the Surrey property on April 19, 2016, the Rutkowskis disclosed to her that they had found a home in Chilliwack. Initially in her testimony, Ms. Castro said Mr. Rutkowski asked if she could represent him in the Chilliwack purchase. Later, she said the Rutkowskis asked if she would be interested in assisting them.

She asked them to give her some information about the home so she could look up all the information. She said what Mr. Rutkowski said next took her aback. He apparently told her they were dealing directly with the sellers. The Rutkowskis had already worked out the purchase price for the Falls Court house. All they needed Ms. Castro for was to do the paperwork and nothing else. [ 112 ] Ms. Castro also said, on that occasion, the Rutkowskis said they wanted to have representation but they were adamant that the fee was $2,500. Ms.

Castro did not realize when she had that discussion with the Rutkowskis that they had already seen the home with another licensed realtor. Ms. Castro said she did her due diligence and looked at comparables and gave Mr. Rutkowski that information. Ms. Castro also said she told Mr. Rutkowski that the $2,500 fee was not going to work. She had made a list of the liabilities and what was being asked of her. Ms. Castro told the Rutkowskis she could deal with the sellers and see if the sellers would list the Falls Court house, that way the sellers would pay the commission. The Rutkowskis were very nervous.

They were adamant they did not want her to contact the sellers. She said the Rutkowskis were very aggressive with her and made her quite nervous. [ 113 ] Ms. Castro testified the Rutkowskis asked her to go to the Chilliwack house. Prior to that day there were numerous discussions about what was being asked of her and her view that the fee was not sufficient for what they were asking her to do. Ms. Castro said Mr. Rutkowski gave her a date and time and asked her to be there. They could talk about it when they met.

She begged him to allow her to speak to the sellers before the evening they were going out to Chilliwack to write the contract for the Falls Court house. [ 114 ] Later in her evidence Ms. Castro said before the April 24, 2016, meeting in Chilliwack, around the time that the Rutkowskis accepted Mr. Sahota’s offer on April 19, the Rutkowskis told her about a house they had found. She said they called her after she had left their residence. In that phone call they wanted to know how much she would charge for the paperwork. Ms. Castro testified she told “Beth” that she agreed to do it for $2,500.

At that point, the Rutkowskis said that was fine and they would have her do the paperwork. Ms. Castro said that once she got home that evening she did some number crunching. [ 115 ] Ms. Castro testified she received a telephone call from Mr. Rutkowski the next day (April 20). She said they had a telephone conversation for about 45 minutes. During the course of that telephone conversation, she told him she could not do the paperwork for the Falls Court house for $2,500. She said Mr. Rutkowski asked her why she was changing the amount.

He pointed out that he was going to give her his mother’s house listing in Ladner because his mother was going to buy a condominium. Therefore, he said Ms. Castro was going to be making money. [ 116 ] Before April 24, Ms. Castro said she and Mr. Rutkowski had a number of telephone conversations. She told him that the fee would be $10,000. She felt that was a fair amount for all she would have to do. Ms. Castro maintained that Mr. Rutkowski agreed to the $10,000 fee. She could not recall the specific date when this occurred. Ms.

Castro testified that in or around April 20 to April 22, 2016, she felt very intimidated. She did not want to take Mr. Rutkowski’s calls. She felt she was being forced to do something she did not want to do. Accordingly, she had Mr. Dhillon talk to Mr. Rutkowski and explain why it could not be done for $2,500 and why the fee had to be $10,000. Events on April 24, 2016 [ 117 ] On April 24, 2016, text messages were exchanged between Mr. Rutkowski and Ms. Castro. At approximately 2:18 p.m., Mr. Rutkowski sent a text asking when and where Ms. Castro wanted to meet him.

She sent a text back saying they should meet at Chilliwack at 5:30 and she would text him the place in about 30 minutes. He texted back saying that the Pilgrims had to go to Burnaby to sign off on their lot and they might be a bit later than planned. The next text message was on April 24, at 5:14 p.m. from Mr. Rutkowski to Ms. Castro asking if she could call him right away. [ 118 ] In cross-examination, Ms. Castro asked Mr. Rutkowski whether it was customary for him to record conversations with people. He said it was not. She asked him why a recording was necessary of the telephone conversation they had that day.

Mr. Rutkowski said it was not necessary but they just had a feeling. Things were not going as they thought they should. That day there was a plan for the Rutkowskis to meet with Ms. Castro in Chilliwack to write up the offer for the purchase of the Falls Court house. Mr. Rutkowski said he tried to contact Ms. Castro but she was not answering her phone. Time was running out and they had already set a specific time to meet with the Pilgrims. After attempting to call Ms. Castro, Mr. Rutkowski called Mr. Dhillon instead. Mr. Dhillon did not answer either. A few minutes later Mr.

Dhillon called back and wanted to know who was calling. Mr. Rutkowski told him why he had called and Mr. Dhillon told Mr. Rutkowski that Ms. Castro would call him back shortly. [ 119 ] Ms. Castro called Mr. Rutkowski back. He and his wife had a feeling that something was not right that day. He ended up recording the conversation he had with Ms. Castro on his cell phone, which was on speaker as he was in his car. The conversation was recorded on Mrs. Rutkowski’s cell phone. See below regarding discussion of the recorded telephone conversation. [ 120 ] Mrs.

Rutkowski testified she was aware that her husband had sent a text message to Ms. Castro, about meeting in Chilliwack to complete the deal on the purchase of the Falls Court house. The plan was that they would meet at 5:30 p.m. There was a subsequent text that was sent from Mr. Rutkowski to Ms. Castro telling her that the Pilgrims might be a bit delayed because they were going to see their lawyer in Burnaby. Mrs. Rutkowski said Ms. Castro was at an open house. They called her at about 4:00 p.m. when they were heading out to Chilliwack. There was no answer. Mrs. Rutkowski believed Ms.

Castro’s voicemail message box was full. In any event, Mr. Rutkowski called Mr. Dhillon. The April 24, 2016 recorded call [ 121 ] A

summary/highlights of the recorded call is set out below:

• It was an incoming call from Ms. Castro and answered by Mr. Rutkowski. • Ms. Castro said she had done some number crunching with Mr. Dhillon and they could do everything as a partnership for $30,000, that would mean an extra $7,500. • Ms. Castro pointed out that the normal commission would be $58,000. • Mr. Rutkowski said he would never agree to that and she knew it. • Ms. Castro said she was referring to what the commission is normally. She knew he would not agree to that but she was trying to get Mr. Rutkowski to understand Mr. Dhillon’s point of view. • Mr. Rutkowski said that Mrs.

Rutkowski was always very sceptical. She was upset. He could not believe what was happening. He suggested that they were asking for more and more money once they had hammered out a deal. • Ms. Castro said the agreement when they sat down was to get 50 (inaudible). She said he was not paying that but he then went and broke the deal by doing a private deal when he had already agreed that he would buy through Ms. Castro. • Mr. Rutkowski said that they now wanted $10,000 to do this but they knew that they written $20,000 on that contract. • There was some general discussion that is not germane. • Mr.

Rutkowski said he was nervous about doing the deal. He was concerned about doing it on his own without a contract. He said he did not know what it was going to cost him and he was not feeling good about it. • Ms. Castro said she would be there but they had not gotten back to her. She said she already had the contract done. They could talk about it later. She could do the fee agreement for $2,500. She asked Mr. Rutkowski if he wanted her to leave to go out there. • Mr. Rutkowski asked if it was for $10,000. • Ms. Castro said they could talk about it later. They would stick to the $2,500.

She could be there in about 40 minutes. • Mr. Rutkowski said they could stick to the $2,500 but what was it going to cost him at his end of selling the house. • Ms. Castro said they already signed something. • Mr. Rutkowski pointed out that he had initialed a ton of stuff. • Ms. Castro said that it was $20,000. • Mr. Rutkowski pointed out that the 10-day thing had not come about. • Ms. Castro said they could talk about that later. She said she would get the contract and make Mrs. Rutkowski feel good. She was going to leave in 10 minutes. She said they would meet by the property address.

She would have everything ready and they would go in like nothing had happened. [ 122 ] In cross-examination, after the recording was played in court, Ms. Castro asked Mr. Rutkowski what the commission was. He said it was $2,500. She repeated her question and asked him if he knew what the industry standard commission was. He said he did not. She put it to him that on a purchase price of $900,000 the standard real estate commission would be $32,550. That included GST. She suggested to Mr.

Rutkowski that the figures mentioned during the recorded phone discussion related to the purchase of the Falls Court house and what the industry standard commission would be. Mr. Rutkowski disagreed. Meeting at the clubhouse [ 123 ] Mr. and Mrs. Rutkowski, Ms. Castro and Mr. Dhillon met in Chilliwack and went to the clubhouse at the golf course. Mr. Rutkowski said that was approximately 40 minutes after the telephone conversation that was recorded. He said no paperwork was produced at that meeting.

He said as soon as they arrived at the clubhouse and grabbed a table they were told the clubhouse was closing so they were there for a very short period of time. [ 124 ] In cross-examination, Ms. Castro asked him whether they discussed the $2,500 fee versus the $10,000 fee at the clubhouse. Mr. Rutkowski said he did not know that they talked about it at the clubhouse because as soon as they sat down they were told the clubhouse was closing. Accordingly, they left very quickly. [ 125 ] Ms. Castro asked Mr.

Rutkowski whether he remembered standing in front of the cars and having that discussion and going through all the paperwork. He said he did not remember doing that. [ 126 ] Ms. Castro in cross-examination of Mr. Rutkowski said she was going to testify that when they were asked to leave the clubhouse she, Mr. Dhillon, and the Rutkowskis went to the parking lot and resumed their conversation regarding the $2,500 fee versus the $10,000 fee. Mr. Rutkowski said that was not correct. Mr. Rutkowski said they walked out to the parking lot.

They got into their separate cars and drove up to the Pilgrims’ house which was only about one minute away. [ 127 ] In cross-examination of Mr. Rutkowski, Ms. Castro put to him that she had involvement with the Falls Court house before April 24. She maintained that her involvement was around the time of the April 12 text and included providing a comparable area analysis to the Rutkowskis. Mr. Rutkowski did not agree. He said he did not recall receiving any comparables for the Chilliwack area or specifically comparables to the Falls Court house.

[ 128 ] Ms. Castro also suggested to Mr. Rutkowski that she had done a search of the Falls Court house and that she had a meeting with Mr. Rutkowski and his wife to discuss the offer amount for that property and what would be reasonable. Mr. Rutkowski said he and his wife had negotiated the amount themselves. He came up with the offer amount on his own with no comparables. [ 129 ] Ms. Castro said that on April 24 she had many conversations with Mr. Rutkowski going back and forth. She said that the Rutkowskis did not want Mr. Dhillon involved in the contract of purchase and sale for their new property.

However, she felt too nervous to go on her own because of the conversations that she had with him (presumably Mr. Rutkowski) previously that day. Ms. Castro said they agreed to regroup and meet at the clubhouse to discuss why the increase would be to $10,000. She said the Rutkowskis wanted to look at the contract she had prepared for the purchase of the Falls Court house. She said they were very rushed. The Rutkowskis were rushing her. They were urging her to leave and they were asking if they could see the fee agreement. Ms. Castro also said that the fee agreement was in the middle of being drafted.

This was the first time she had ever done something as a private deal. Accordingly, she had to consult with her managing broker. [ 130 ] According to Ms. Castro, they were going to discuss why the fee should be increased to $10,000. The meeting at the clubhouse was a short meeting because it was close to closing time. Ms. Castro maintained that there were further negotiations on the telephone. She believed that the April 24 recording was not the full recording or there were missing parts. She said they reached an oral agreement for $10,000 at the clubhouse before they went to the Pilgrims’ house.

However, she also testified that in her mind on April 24, before driving out to Chilliwack, it was agreed that she was going to represent the Rutkowskis for $10,000. She testified she was not going to risk her real estate license for $2,500 if something went wrong. She did not want the liability. [ 131 ] Ms. Castro said that Mr. Rutkowski did not want the Pilgrims to know about the commission. She said they agreed before they left the clubhouse. Ms. Castro said the Rutkowskis wanted everything to be easy. They did not want any complications. One of them asked her to just do the paperwork and not to talk. Ms.

Castro said she felt very restricted when working with the Rutkowskis. They did not want her to say anything. They were just adamant. Meeting with the Pilgrims to complete purchase of Falls Court house [ 132 ] Mr. Rutkowski said, after leaving the parking lot of the clubhouse, they went to the Pilgrims’ house. They were there for about 90 minutes. They sat at the table with the Pilgrims and wrote up the purchase agreement for the Falls Court house. Mr. Rutkowski said he did not have any private conversations outside of earshot of the Pilgrims with Ms. Castro or Mr.

Dhillon about any terms or details at the time they completed a contract of purchase and sale. The handwritten portions of the document were written in by Ms. Castro. Mr. Rutkowski said the next day he gave Ms. Castro a bank draft made out to Homeland Realty for a $1,000 deposit. [ 133 ] Mr. Rutkowski acknowledged there were several subjects in the sale purchase agreement for the Falls Court house. One of them was subject to the Rutkowskis obtaining suitable financing. [ 134 ] Mr. Rutkowski said the completion and possession dates were not written on the purchase/sale agreement that evening.

He said those dates were purposely left blank so that he and the Pilgrims could work out a suitable date. He did not know when the dates were entered in the contract. However, he acknowledged there was a point when he agreed to August 30 as the date for completion and August 31, 2016, as the date for possession. [ 135 ] On April 24, 2016, Mr. Rutkowski said he also signed another document, namely, a Fee Agreement Buyer Pays. He noted that George Pilgrim did not want to have a realtor involved. He did not want extra costs. The Fee Agreement Buyer Pays dated April 24, 2016, was a document that Mr.

Rutkowski first saw when they were completing the sale and purchase agreement at Falls Court. He said it was all filled in when he first saw it. He said that document represented that Ms. Castro was going to do the paperwork for the Rutkowskis for the Falls Court house. She would charge them $2,500 to do that. Mr. Rutkowski said while they were inside the house with the Pilgrims on April 24, 2016, there was no discussion/debate about $10,000 versus $2,500. [ 136 ] Ms. Castro testified that after leaving the clubhouse they went to the Pilgrims’ home on Falls Court.

They went over the contract of purchase and sale and she handwrote some of the information. The fee agreement was amongst the documents that she had at the Pilgrims’ house. Ms. Castro maintained the managing broker told her that she did not need to have the seller sign the fee agreement. However, because it was there, they signed the back of the agreement. [ 137 ] Ms. Castro said she asked the Rutkowskis to go to the side to sign this. She maintained they had made changes (it was not clear what she was referring to). She said the Rutkowskis started talking about the house and they were walking around.

They told her not to say anything. Accordingly, she did not say anything. [ 138 ] Immediately after they left the Pilgrims’ house, the fee agreement was changed on the hood of a car. She said that Mrs. Rutkowski was very excited and said it was so late. Mrs. Rutkowski said she did not want to do this (i.e. sign the fee agreement) and they could send the fee document to them by DocuSign. [ 139 ] Ms. Castro said she was taken aback again. She was very intimidated but she trusted their agreement was the agreement. Accordingly, she left.

She said the following day they sent the fee agreement through DocuSign to the Rutkowskis as instructed. She was referring to a fee agreement for a $10,000 fee. She said she never received a response from the Rutkowskis. [ 140 ] In cross-examination Ms. Castro said the Rutkowskis were the first ones to mention a fee for doing the paperwork at Falls Court. She said they mentioned a fee of $500 - $1,000. She said after a detailed conversation about having representation, liability, and things like that the Rutkowskis wanted her to do the deal. Ms. Castro maintained they could go through their lawyer or a notary.

She could help them by providing a contract of purchase and sale. She said she did not want to do this deal. Counsel for Mr. Rutkowski asked Ms. Castro why she got involved at all if she did not want to do it. She said she felt a lot of pressure and she did not want to disappoint the Rutkowskis. [ 141 ] It was put to Ms. Castro in cross-examination that leading up to April 24 her evidence was that there had been some back-and- forth discussions between her and Mr. Rutkowski. She wanted $10,000 to do the deal on the Falls Court house but Mr. Rutkowski only

wanted to pay $2,500. Counsel for the Rutkowskis asked whether anything had been agreed upon. Ms. Castro said in her mind, before they drove out to the Falls Court house, it had been agreed that they were going to represent the Rutkowskis for $10,000. They were going to discuss it further at the clubhouse. Otherwise, Ms. Castro said, she would not have gone to Falls Court. [ 142 ] She confirmed there was an oral agreement for $10,000. She was asked when she reached the particular oral agreement for $10,000. She said it was at the clubhouse on April 24 before they went to the Pilgrims’ house. Ms.

Castro maintained they had the conversation that was recorded. She also maintained there was further conversation between her and Mr. Rutkowski about the $10,000 that was not recorded. Later, there were further negotiations at the clubhouse. [ 143 ] Ms. Castro said that a buyer pay document was signed at the same time that the purchase and sale agreement was signed with the Pilgrims. Ms. Castro said she put the document in front of Mr. Pilgrim. In cross-examination, she agreed that having Mr.

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