A signed commission agreement is not always an enforceable one. In Royal Family Realty Inc. v. Liu, 2026 ONSC 317, a brokerage sued a buyer for an unpaid commission after she walked away from an $8.4 million farm purchase. The commission clause was standard, the signature was genuine, and the buyer had signed. Yet the Superior Court dismissed the claim outright. For transactional lawyers who paper deals every day, the decision is a reminder that a signed standard-form document is only as strong as the disclosure that accompanied it.
The Deal and the Document
The buyer and her husband lived in China and spoke no English. On a short trip to Canada they made offers on three properties totaling roughly $65 million. A family friend, newly licensed and acting through the plaintiff brokerage, served as their agent. The buyer signed the Agreement of Purchase and Sale and a Buyer Representation Agreement for the farm property. The BRA was a standard Toronto Real Estate Board form. It provided that the brokerage was entitled to a 2.5 percent commission even if the transaction did not close, where the non-completion was owing to the buyer’s default.
The purchase never closed. The husband, the true decision maker, refused to complete after concluding that the agent had acted deceitfully on a separate transaction. The brokerage then sued for its commission, claiming $237,300 inclusive of HST.
Non Est Factum: The Defense That Won
The buyer relied on non est factum. That is Latin for “it is not my deed”, the doctrine that lets a signer escape a document when, through misrepresentation, she was mistaken as to its nature and character and was not careless in signing. The governing authority remains the Supreme Court of Canada’s decision in Marvco Colour Research Ltd. v. Harris. The defense has three elements: a mistake as to the nature of the document, a mistake caused by misrepresentation, and an absence of carelessness by the signer.
The court found all elements satisfied. The buyer could not read English, could not read the BRA, and did not appreciate that a commission could be owed if the sale collapsed. She understood that paying a buyer’s commission was not part of purchasing property in her home country. Crucially, the court was not persuaded that the agent had ever translated or explained the commission term.
Fiduciary Duty Did the Heavy Lifting
What turns this from an ordinary signature dispute into a teaching case is the fiduciary overlay. A real estate agent owes fiduciary duties to the client. Because the BRA required the buyer to pay a commission where the sale did not proceed, the brokerage’s financial interest was in direct conflict with the client’s interest. Drawing on Raso v. Dionigi, the court held that the onus sat on the agent to prove, with clear, convincing, and cogent evidence, that full and timely disclosure of the conflicting term had been made before signing.
The agent’s evidence was thin. There was little detail about the meeting, no explanation of the difference between the cooperation form and the BRA, and no testimony from a nephew said to have witnessed the translation. The agent had also negotiated against express instructions and had accepted an undisclosed fee on a related deal, which damaged her credibility on financial matters. On that record, the brokerage did not meet its burden.
The Innocent Party Point
The third element of non est factum, carelessness, was originally added to protect innocent third parties. The court held it did not apply here because the brokerage was not innocent. Its own failure to discharge its fiduciary duty caused the buyer’s mistaken understanding. A party that seeks to benefit from its own breach cannot invoke a doctrine designed to shield the blameless. Even if carelessness were in play, the court found the buyer was not careless, since she reasonably believed the documents had been explained to her husband.
The result was that the BRA was void from the beginning and the commission claim failed.
Takeaways for Transactional Practice
For transactional practitioners, four points from the decision merit attention.
Disclosure must precede signature. Where a standard form shifts risk onto the client in a way that benefits the agent or brokerage, the conflicting term needs to be explained before the client signs, not after. Referring the client to a lawyer afterward will not cure a disclosure gap.
Language barriers raise the bar. When a client cannot read the document, a genuine signature proves very little. Contemporaneous evidence of translation and explanation becomes essential, and its absence can be fatal.
Standard forms are not self-executing. A Toronto Real Estate Board form carried no magic here. The commission clause was clear, but clarity on paper does not substitute for informed consent.
Credibility travels. An undisclosed fee on one transaction undermined the agent’s evidence on another. Conduct across a client relationship is viewed as a whole.
The court declined to interpret the commission clause itself, noting that as a standard form its interpretation would carry precedential weight under Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. That interpretive question awaits another day. For now, the lesson is simpler. A signature is the end of a disclosure process, not a replacement for one.
