The Ontario Court of Appeal considered these issues almost 30 years ago.
In Raso v. Dionigi, 1993 CanLII 8664 (ON CA), The Court dealt with matter of an Agent “double ending” a transaction and failing to disclose his relationship with the Purchaser. Justice Dubin stated:
“In cases of obvious conflict of interest, the normal rule is that the agent cannot act for both vendor and purchaser. The narrow exception to the rule applies if the agent is able to prove that the transaction was completed after the agent had made full and fair disclosure to the principal of all material circumstances and everything known about the subject-matter of the contract likely to influence the conduct of the principal. In this case, the agent failed to make the full disclosure required of him.”
“The agents were not entitled to any commission since, as the trial judge found, it was not likely that the vendors would have signed the listing agreement had they known the true facts and because, where an agent has breached a fiduciary duty, as in this case, the agent is precluded from claiming a commission.”
“The obligation of the agent to make full disclosure extends beyond these three categories and includes “everything known to him respecting the subject-matter of the contract which would be likely to influence the conduct of his principal” (Canada Permanent Trust Co. v. Christie) or, as expressed in 1 Hals., 3rd ed., p. 191, para. 443, everything which “. . . would be likely to operate upon the principal’s judgment”. In such cases the agent’s failure to inform the principal would be material non-disclosure.”
Dubin C.J.O. also stated:
“Since, as the trial judge found, it was not likely that the vendors would have signed the listing agreement had they known the true facts, it follows, in my opinion, that the real estate agent is not entitled to any commission.
Furthermore, it is, I think, axiomatic that where an agent has breached a fiduciary duty in the manner disclosed in this case, the agent is precluded from claiming any commission.”
Brian Madigan LL.B., Broker