StreetCity Realty Inc. v. Paner House III Inc., 2026 ONSC 292
The Court rejected the vendor’s arguments by which he attempted to justify his refusal to close, and awarded damages to the real estate agent and attempted buyer.
In the fall of 2017, a London, Ontario chiropractor (Dr. Seksek, through his company 2221736 Ontario Inc.) agreed to purchase a commercial office building at 1408 Ernest Avenue from Paner House III Inc., controlled by a retired psychiatrist, Dr. Botros. The deal was facilitated by Bill Rashmawi of StreetCity Realty, who represented both sides. The purchase price was $1.6 million.
The first Agreement of Purchase and Sale (APS) fell through when an environmental condition couldn’t be satisfied in time. The parties executed a mutual release and promptly negotiated a second APS on November 26, 2017, with the environmental report in hand. In the end, this also failed to close. The vendor cited various reasons, all of which were rejected by the judge.
Part of the Purchase Price was a Cash Advance?
According to the court, Dr. Botros called the real estate agent in November 2017 and demanded an additional $50,000, citing concerns about capital gains exposure. After some negotiation, the parties settled on a compromise: the agent would reduce his commission by $3,000 (to $53,000), and Dr. Seksek would hand over $25,000 in cash at signing. The second APS still reflected a purchase price of $1.6 million, not the true all-in consideration.
The parties met at a Tim Hortons in Baden, Ontario. Dr. Seksek handed over an envelope of small bills. Dr. Botros signed a receipt characterizing the funds as “partial payment.” The deal was supposed to close January 31, 2018, but it never did.
The Vendor’s Defence: Illegal Cash, Insufficient Authority, and Pressure
In December 2017, Dr. Botros texted the agent claiming his wife, an equal shareholder in Paner House, refused to consent to the sale. When litigation followed, the defence evolved: Dr. Botros argued that (1) the transaction was an illegal contract because the APS misrepresented the true purchase price, and (2) he had been pressured into participating in a scheme not of his making.
Justice Rady rejected both arguments completely.
On the illegality argument, the court noted that there was simply no evidence about how the additional $25,000 was to be treated in the closing documents. The vendor’s own lawyer had been retained and then dismissed two days before closing, with no draft closing documents ever produced. The receipt Dr. Botros signed described the cash as “partial payment” of the purchase price, leaving open the possibility it would have been properly disclosed. The court declined to presume illegality where none was proven.
On the duress/pressure argument, the court was blunt: Dr. Botros was an educated, commercially sophisticated individual who had been negotiating the deal from a position of strength. The email record showed he believed the property was being sold at undervalue and was actively exploring re-listing. The cash demand, the court found, was his idea and was simply a way to extract more value from a motivated buyer.
Credibility Was Decisive
Justice Rady’s credibility findings are worth noting for litigators and transactional lawyers alike. The vendor’s case rested almost entirely on his own testimony, which the court found to be argumentative, evasive, and unsupported by the contemporaneous record. Several details proved damaging:
- His affidavit filed during an earlier specific performance motion in February 2018, when memory was fresh, was completely silent on both his wife’s alleged objection and any concerns about illegality. The court inferred these were stories developed long after the fact.
- He terminated his real estate lawyer’s retainer two days before closing, effectively making it impossible for the buyer to formally tender.
- Despite claiming the deal was illegal, he never returned the $25,000, instead holding it as a bargaining chip in exchange for a mutual release.
The court unsparingly pointed out that, “The only person to benefit was Dr. Botros himself.”
What the Plaintiffs Recovered
- StreetCity Realty was awarded its reduced commission of $53,000 plus HST, totaling $59,890, plus prejudgment interest.
- 2221736 Ontario Inc. was awarded $57,299 covering out-of-pocket expenses including the broker’s fee, environmental assessment, appraisal, property inspection, architectural design fees, and the return of the $25,000 cash payment. (There had been a previous proceeding where 2221736 had unsuccessfully sought specific performance.)
Key Takeaways for Transactional Lawyers
This case is a useful reminder of several practical points:
Side payments create serious risk. Whether or not the arrangement here was technically illegal, it created years of expensive litigation, uncertainty, and reputational exposure for everyone involved. Any consideration outside the four corners of the APS should be carefully documented and disclosed in closing documents.
Corporate authority matters. The purchaser’s side successfully argued that Dr. Botros had apparent authority to bind Paner House, despite his later claim that his wife co-owned the company and hadn’t consented. If your client has co-owners or co-directors, confirm signing authority before closing.
Document everything, including readiness to close. The buyer’s solicitor’s unchallenged affidavit that his client was “ready, willing and able to close” was pivotal. Transactional lawyers should ensure the record clearly reflects their client’s closing readiness.
Mutual releases on failed deals need careful drafting. The court held that expenses incurred for the first transaction were recoverable in the second, since they would have been incurred regardless. The scope of what a mutual release covers can have significant downstream consequences.
