CITATION: Shea v. Huang, 2021 ONSC 5141
DIVISIONAL COURT FILE NO.: 061/21 DATE: 20210722
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
Yee Fan Tina Shea and Century 21 King’s Quay Real Estate Inc. Respondents
– and –
Yicheng Doreen Huang Appellant
COUNSEL: Leon Li, for the Respondents Aram Simovonian, for the Appellant
HEARD at Toronto (by videoconference): July 19, 2021
Favreau J.
Introduction
[1] The appellant, Yicheng Doreen Huang, appeals a judgment made by Deputy Judge Anschell of the Small Claims Court in Toronto awarding damages of $20,350.60 to the respondent Century 21 King’s Quay Real Estate Inc. (“King’s Quay”). The judgment was for an unpaid real estate commission based on a finding that Ms. Huang breached the terms of a representation agreement she entered into with King’s Quay.
[2] Ms. Huang argues that the Deputy Judge made an error in the application of section 5(1)(b) of the Limitations Act, 2002, S.O. 2002, c. 24, by applying a subjective test to the issue of discoverability rather than the modified objective test. She also argues that the Deputy Judge’s reasons are insufficient to justify the outcome or for appellate review.
[3] As set out below, I find that the Deputy Judge made no errors. Her reasons clearly explain the basis for the decision and the outcome is fully supported by the evidence.
Background
[4] The respondent Yea Fan Tina Shea is a real estate agent who works with King’s Quay.
[5] In early 2017, Ms. Huang contacted Ms. Shea about one of her listed properties. Ms. Huang indicated that she was also interested in seeing similar properties in the same neighbourhood.
[6] Ms. Shea showed Ms. Huang a number of properties over the course of several visits. In February 2017, Ms. Huang finally saw a property she was interested in purchasing, referred to in the judgment below as the Temperance Street Condo.
[7] On February 14, 2017, Ms. Huang signed an offer prepared by Ms. Shea for the Temperance Street Condo. At the same time, Ms. Shea had Ms. Huang sign a number of documents including a Buyer Representation Agreement. The Buyer Representation Agreement included a term that King’s Quay would be Ms. Huang’s exclusive agent from February 14 to May 31, 2017. This was to apply for any property in the Greater Toronto Area and Ms. Huang was to pay King’s Quay a commission of 2.5% on any purchase.
[8] The offer on the Temperance Street Condo did not go through.
[9] In April 2017, Ms. Huang advised Ms. Shea that she was no longer interested in buying a condominium in Toronto because the prices were too high. In May 2017, Ms. Shea followed up with Ms. Huang but Ms. Huang again said that she was not looking for a property at that time.
[10] In June 2018, in the context of what Ms. Shea described as a routine follow up, she conducted a search on a real estate database available to her and found out that Ms. Huang bought a property on April 28, 2017 in Toronto for $814,024.00.
[11] On January 4, 2019, Ms. Shea started a Small Claims Court action in her own name against Ms. Huang for the unpaid commission. The statement of claim was amended on September 3, 2019 to add King’s Quay as a plaintiff because it was the party to the Buyer Representation Agreement and not Ms. Shea.
[12] The trial took place on November 5, 2019 and January 6, 2020. Both Ms. Shea and Ms. Huang testified at trial. One of the arguments made by Ms. Huang at trial was that the claim as brought by King’s Quay against Ms. Huang was started beyond the two year limitation period in the Limitations Act, 2002 given that Ms. Huang bought the property in April 2017 and the claim was amended more than two years later in December 2019. She also argued that King’s Quay did not exercise due diligence for the purpose of discovering its claim at an earlier date.
[13] In a decision dated December 13, 2020, the Deputy Judge granted judgment to King’s Quay. As part of her decision, the Deputy Judge made a finding of fact that it was only in June 2018 that Ms. Shea discovered that Ms. Huang had bought her property. On that basis, the Deputy Judge concluded that King’s Quay’s action was brought within the two year limitation period. The Deputy Judge also found that Ms. Huang breached the representation agreement and that King’s Quay was entitled to $20,350.60 for the lost commission on the property Ms. Huang bought.
[14] In a costs decision issued on January 19, 2021, the Deputy Judge awarded $3,923.50 in costs to the respondents on the basis of their complete success at trial.
Standard of review
[15] The appellate standard of review applies to an appeal from a Small Claims Court judgment to the Divisional Court. Errors of law are reviewed on a standard of correctness and errors of fact or mixed fact and law are reviewed on a palpable and overriding standard.
Issues and analysis
[16] Ms. Huang makes the following two arguments on the appeal:
a. The Deputy Judge failed to apply the modified objective test pursuant to section 5(1)(b) of the Limitations Act, 2002 to the issue of when King’s Quay discovered the cause of action; and
b. The Deputy Judge’s reasons are insufficient for appellate review.
[17] In response, the respondents argue that the Deputy Judge applied the correct legal principles and that her reasons are sufficient. In addition, the respondents argue that Ms. Huang’s own misrepresentations affected Ms. Shea’s ability to discover that Ms. Huang had bought another property within the term of the representation agreement and she should therefore be barred from relying on the limitation period.
[18] In my view, the Deputy Judge did not make any errors of law or any palpable and overriding errors of fact or mixed fact and law in finding that the limitation period did not bar King’s Quay’s action and in granting judgement to King’s Quay.
The Deputy Judge made no error in her application of the discoverability test
[19] Ms. Huang argues that the Deputy judge erred in her application of the discoverability test because she relied on the actual date when Ms. Shea discovered Ms. Huang bought a property rather than the date when Ms. Shea ought to have discovered the purchase. Ms. Huang argues that this was a legal error because the Deputy Judge did not apply the modified objective set out in section 5(1)(b) of the Limitations Act, 2002 to the inquiry.
[20] In my view, while the Deputy Judge did not explicitly set out the test to be applied to the issue of discoverability, it is implicit from her decision that she applied the correct test to the facts in this case.
[21] Section 4 of the Limitations Act, 2002 provides that “a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered”.
[22] Section 5(1) of the Act deals with the issue of when a claim is discovered and provides as follows:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). [Emphasis added.]
[23] Section 5(2) of the Limitations Act, 2002 creates a presumption that a claim was discovered on the date the alleged act or omission occurred unless the person proves the contrary.
[24] Therefore, in accordance with section 5(2) of the Act, a plaintiff is deemed to have discovered a claim on the day when the act or omission occurred unless they can prove otherwise. Pursuant to section 5(1)(b), in deciding whether the plaintif has proven otherwise, the court is to look at what a reasonable person with the subjective abilities of the plaintiff ought to have known.
[25] The Court of Appeal for Ontario has described section 5(1)(b) as a “modified objective test” that “seeks to make an objective determination by inquiring what a reasonable person ought to have known, but it imbues the hypothetical reasonable person with the subjective ‘abilities and … circumstances of the person with the claim’”: Service Mold +Aerospace Inc. v. Khalaf, 2019 ONCA 369, at para. 26.
[26] In this case, Ms. Huang argues that the Deputy Judge failed to apply the modified objective test because she failed to determine when King’s Quay ought to have known about the claim. As a real estate agent with access to a database to look up property sales, Ms. Shea or King’s Quay ought to have looked up whether Ms. Huang had purchased a house earlier than a year following the termination of the representation agreement. During the argument of the appeal, counsel for Ms. Huang argued that it would be reasonable for real estate agents to conduct such a search soon after the date when a representation agreement comes to an end.
[27] In my view, there are at least two flaws with this argument.
[28] First, in this particular case, Ms. Shea’s knowledge included Ms. Huang’s representation that she was no longer looking to buy a property in April and May 2017 despite the fact that she bought a property in that time period. As argued by the respondents, Ms. Huang should not be allowed to rely on her own misrepresentations to argue that King’s Quay ought to have known about the purchase earlier: see SA Horeca Financial Service v. Light, 2014 ONSC 4551 (Sup. Ct.), at paras. 36-37.
[29] Second, while the Deputy Judge did not explicitly refer to the modified objective test, it is evident from her review of the facts leading up to her conclusion on the issue of the limitation period that she was satisfied that it was reasonable for King’s Quay to have discovered the sale of the property when Ms. Shea conducted the search. If Ms. Huang’s position was that real estate agents have some kind of obligation to make timely inquiries to make sure former clients do not violate a representation agreement, it was incumbent on Ms. Huang to lead evidence that this is the standard in the industry or that it would have been a reasonable practice for Ms. Shea to do so. No such evidence was led in this case.
[30] In my view, while the Deputy Judge did not explicitly address the modified objective test in her analysis, she did cite the relevant section of the Limitations Act, 2002 in her recitation of the applicable law. The extent to which it is necessary to analyze what a reasonable person in the circumstances ought to have known is necessarily fact specific. In this case, given the evidence reviewed and accepted by the trial judge, including the fact that Ms. Huang stated in April and May 2017 that she was no longer looking for a property because prices were too high, it was not necessary for the Deputy Judge to conduct a thorough analysis of the modified objective test. Her conclusion on when the action was discovered was fully supported by the record.
The Deputy Judge’s reasons are sufficient for appellate review
[31] Ms. Huang argues that the Deputy Judge’s reasons are insufficient for appellate review because she failed to explain how she arrived at the conclusion that the respondents met the modified objective test.
[32] Ms. Huang’s complaint about the Deputy Judge’s reasons is essentially the same as her complaint about the alleged error in applying the modified objective test, namely that the reasons contain no explicit analysis on this issue.
[33] In Maple Ridge Community Management Ltd. v. Peel Condominium Corp, 2015 ONCA 520, at para. 35, the Court of Appeal explained that, in reviewing the sufficiency of reasons in the context of an appeal from the Small Claims Court, the reviewing court should be mindful of the context in which the Small Claims Court performs its functions:
Reasons from the Small Claims Court must be sufficiently clear to permit judicial review on appeal. They must explain to the litigants what has been decided and why: Doerr v. Sterling Paralegal, 2014 ONSC 2335, at paras. 17-19. However, appellate consideration of Small Claims Court reasons must recognize the informal nature of that court, as well as the volume of cases it handles and its statutory mandate to deal with these cases efficiently. In short, in assessing the adequacy of the reasons, context matters: Massoudinia v. Volfson, 2013 ONCA 29, at para. 9. Just as oral reasons will not necessarily be as detailed as written reasons, reasons from the Small Claims Court will not always be as thorough as those in Superior Court decisions. Failing to take the Small Claims Court context into account only serves to restrict access to justice by unnecessarily imparting formality and delay into a legal process that is designed to be informal and efficient.
[34] In this case, the analysis of the limitation period is short but it is not so deficient as to be incapable of appellate review. The Deputy Judge’s findings flow from the applicable law and the evidence at trial.
Conclusion
[35] The appeal is dismissed.
[36] At the end of the hearing, counsel advised that their clients had not reached an agreement on costs and that there were offers to settle. I encouraged them to try to reach an agreement but they contacted the court shortly after the hearing to advise that no agreement on costs was reached. I again encourage the parties to try to reach an agreement on costs now that they know the outcome of the appeal. They are to advise the Court by no later than July 29, 2021 if they have been able to reach an agreement on costs and, if not, they are to upload any offers to settle to CaseLines by that date.
___________________________ Favreau J.
Released: July 22, 2021
CITATION: Shea v. Huang, 2021 ONSC 5141
DIVISIONAL COURT FILE NO.: 061/21 DATE: 20210722
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
Yee Fan Tina Shea and Century 21 King’s Quay Real Estate Inc. Respondents
– and –
Yicheng Doreen Huang Appellant
REASONS FOR DECISION
FAVREAU J.
Released: July 22, 2021