The Manderley: brokers asked to return commissions on failed sales

When a buyer signed for a suite at The Manderley, the developer's standard broker co-operating agreement promised the buyer's brokerage 5% of the price, net of taxes, but said the commission "is not earned until the Unit Transfer Date" and the actual closing. Three of those five points were paid along the way: 1% after the rescission period, 1% once deposits of at least 10% had cleared, and 1% on a fixed date; the last 2% was due thirty days after title passed. Every dollar paid before transfer was an advance, "subject to recovery by the Vendor if the transaction between the Vendor and Purchaser named hereunder fails to close or shall not close for any reason whatsoever," repayable by certified cheque within five days of written notice, per the agreement for suite 724 in the Motion Record of the Receiver, Sept. 22, 2026, Tab 2, App. "D-1", p. 101.

Forty-seven suites in the eleven-storey building on Kingston Road had buyers who signed and then did not close, per the First Report of the Receiver, July 8, 2026, para. 2.1.3. AlixPartners Restructuring, Inc., receiver and manager of the two Nova Ridge (Manderley) debtors since June 23, has now counted what the brokers on those failed deals still hold: $111,674.10, owed by three brokerages on seven suites, none of which, the receiver says, has been repaid despite repeated notices. In its Second Report, dated September 22, it asks the court to order the money returned by October 16, 2026, per the Second Report of the Receiver, Sept. 22, 2026, paras. 1.1.1(f), 7.1.2, 7.3.2. The same motion, returnable at noon on October 1 by videoconference, seeks two larger things: a procedure to settle which claims rank ahead of the lenders, and authority to start paying the lenders once they are known, per the Motion Record of the Receiver, Sept. 22, 2026, Tab 1, Notice of Motion, paras. 1–3.

The sale process for the 70 unsold suites, and the sealed target prices the court re-set on September 3 for Ontario's enhanced HST rebate, were reported here on September 4. Since the receivership began, four sales have been negotiated and signed, and one has closed; the receiver describes "advanced discussions with several potential purchasers on other units," prospective en bloc buyers reviewing information, and open houses scheduled for September 26 and 27, per the Second Report of the Receiver, Sept. 22, 2026, paras. 2.1.2, 2.4.2–2.4.4.

Seven suites, three brokerages

The receiver's table sets out the net amounts. Bay Street Group Inc. owes $25,169.10 on suite 724. Royal LePage Supreme Realty owes $37,165.60 on suites 906 and 914. Homelife Landmark Realty Inc. appears twice, once for each of two of its agents: $12,979.80 on suites 908 and LPH09, and $36,359.60 on LPH08 and LPH10, per the Second Report of the Receiver, Sept. 22, 2026, para. 7.1.2. A fourth brokerage, which the report does not name, has agreed to repay $23,219.70 under a payment arrangement, and no relief is sought against it, per the Second Report of the Receiver, Sept. 22, 2026, para. 7.3.3.

The figures are net. Some of the same brokers are owed commissions by the debtors on other suites that closed before the receivership, and the receiver has let them set those off: both debts arose before the receivership order, so in its words this is "pre-pre" set-off, the elements of legal set-off are present, and "in any event, a broker would likely be entitled to equitable set-off." Brokers whose earned commissions exceed the advances they owe back are left off the list entirely, per the Second Report of the Receiver, Sept. 22, 2026, paras. 7.2.1–7.2.2. The demand to Homelife Landmark on suites 908 and LPH09 shows the arithmetic: advances of $15,779.80 and $20,679.80, less a $23,479.80 credit for suite 212, leaving $12,979.80, per the Motion Record of the Receiver, Sept. 22, 2026, Tab 2, App. "E-3", p. 126.

The demands did not begin with the receiver. Its letters to Bay Street and Homelife Landmark pick up from a letter of May 16, 2026, from Spetter Zeitz Klaiman PC, the debtors' counsel, which gave notice that the purchasers had failed to complete and that the advances had to come back. The receiver's letters, sent the week of August 17, set a deadline of 5:00 p.m. on August 25, per the Motion Record of the Receiver, Sept. 22, 2026, Tab 2, Apps. "E-1" and "E-3", pp. 120, 126. Follow-up emails went to Royal LePage Supreme Realty and Homelife Landmark on September 4, and final notices between September 11 and 14. The receiver reports no response from either to any of the three, per the Second Report of the Receiver, Sept. 22, 2026, paras. 7.3.1–7.3.2.

Bay Street's answer

Bay Street did answer, and at the receiver's request agreed to have its answer put before the court. The sales representative who handled suite 724 wrote on August 22 that "Liability is denied," advancing three positions in a letter marked confidential and without prejudice. First, the commission had been "earned and disbursed" once the procuring work was done, and the receiver had not shown the provision that turned it into a repayable debt. Second, waiver and estoppel: the debtors, the letter says, let the purchasers attend a design-selection appointment on July 2, 2023, more than two weeks after the deposit default they later relied on, confirmed the purchasers' ledger was clear, accepted their custom finishes, and waited more than five months before serving a default notice in late November 2023, so they had lost the right to terminate on that ground, and "The Receiver stands in no better position." Third, the debtors kept a "substantial deposit" from the purchasers on termination, and recovering the commission as well engages unjust enrichment and equitable set-off, per the Motion Record of the Receiver, Sept. 22, 2026, Tab 2, App. "H", pp. 153–154. None of those assertions has been tested in court.

Robert Kofman, the AlixPartners senior advisor running the mandate, replied the next morning that the receiver had read the letter before sending its demand, disagreed, and did not "intend to debate this matter further." On September 21, told the letter would be appended, the representative agreed provided it went in whole and added what they called "a critical factual update": a representative "associated with the developer's listing side" had re-engaged with the purchaser that day and issued a counter-offer at a revised price, so that the sale "cannot be characterized as 'failed,'" and a motion would be "premature, contradictory, inequitable." Mr. Kofman answered at 5:18 a.m. on September 22 that the agreement ties commission to "the closing of the transaction contemplated in the particular Agreement specified," that the agreement had been terminated, and that "Any negotiations that may now be occurring on a different agreement are irrelevant," per the Motion Record of the Receiver, Sept. 22, 2026, Tab 2, App. "H", pp. 149–151. In the Second Report the receiver says it has reviewed the response and "is satisfied that Bay Street is required to repay the Unearned Commission," and describes the objections as "meritless," per the Second Report of the Receiver, Sept. 22, 2026, paras. 7.3.2(a), 7.3.5.