Court File and Parties
Court File No.: CV-12-18032 Date: 2020-06-04 Ontario Superior Court of Justice
Between: Jean Zein El Hawa, Plaintiff – and – Bhagwant Singh, Prudential Select Realty Inc. and Bob Pedler Real Estate Limited, Defendants
Counsel: No one appearing for the Plaintiff, Jean Zein El Hawa Jeffrey S. Klein, for the Defendant, Prudential Select Realty
Heard: October 25, 2019
Reasons on Summary Judgment Motion
Carey J.:
[1] The defendant, Prudential Select Realty Inc. (“Prudential Select”), moves pursuant to Rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to dismiss the plaintiff’s claim against them. For the reasons advanced by the defendant and set out below, judgment will issue dismissing the claim against Prudential Select Realty Inc.
Overview
[2] Shortly after Mr. Singh entered into an agreement of purchase and sale from the Canadian Imperial Bank of Commerce (“CIBC”) of 7348 Howard St., Amherstburg, Ontario, and prior to completion of that transaction, he sold the property to the plaintiff, Mr. Hawa. The plaintiff says this sale was unlawful and that he has suffered damages as a result of Mr. Singh’s conduct. Mr. Singh was a licensed real estate agent with the defendant, Prudential Select, at the time of these transactions. He pleads that Prudential Select is both responsible for the wrongful conduct and vicariously liable for Mr. Singh’s acts and omissions. Prudential Select’s motion asserts that there is no issue requiring a trial against it as Mr. Singh was not acting on behalf of Prudential Select when he sold the property to the plaintiff.
Evidence
[3] The undisputed evidence on this motion, largely found in the affidavit of Carol Baillargeon (fresh as amended motion record, tab 1), was that Mr. Singh was a real estate agent registered with Prudential Select when he agreed to purchase the property on May 17, 2010 from CIBC pursuant to a power of sale. The agreement was submitted by Prudential Select and as a cooperating broker to the listing broker, Remax Preferred Realty. At the time of the submission of this offer, Mr. Singh executed a Confirmation of Cooperation and Representation Agreement both in his capacity as purchaser and the agent representing the purchaser. That agreement provided for the payment of commission to both the listing broker and the cooperating brokerage.
[4] As he was a registered real estate agent, Mr. Singh completed the required registered statement as buyer fulfilling his duty to the seller in complying with s. 18 of the Code of Ethics, a regulation under the Real Estate and Business Broker’s Act, 2002, S.O. 2002, c. 30, Sch. C, as amended (“REBBA”). Subsequently, Prudential Select issued a commission statement with respect to the commission due from the listing broker Remax, on June 17, 2010. As well, a Trade Record Sheet was generated by Prudential Select reflecting the particulars of the Singh purchase, including the commission due to Prudential Select and Mr. Singh as a result of the fact that Prudential Select was the brokerage acting on behalf of Mr. Singh in the transaction as required.
[5] Subsequently, Mr. Singh entered into negotiations with the plaintiff through his power of attorney, Juliette Nahal, his aunt, to sell the property to Mr. Hawa. The undisputed evidence is that Mr. Singh sold the property to the plaintiff on his own as a principal party without any participation or involvement of Prudential Select. At all times, Juliette Nahal was a real estate agent with Bob Pedler Real Estate Limited, acting as the agent for the plaintiff as well as his power of attorney. Prudential Select says they only came into a copy of that agreement of purchase and sale long after the transaction had been completed.
[6] The plaintiff issued his notice of action on June 15, 2012, claiming $470,000 for breach of contract, negligent misrepresentation and/or fraudulent misrepresentation from Mr. Singh and Prudential Select. The claim pleads that the property was sold by Mr. Singh to the plaintiff before the completion of the agreement with CIBC and that subsequent sale to the plaintiff was unlawful. The plaintiff pleads that Prudential Select is responsible for Mr. Singh’s wrongful conduct and that they knew or ought to have known that Mr. Singh was conducting himself in a manner that was contrary to the rules and regulations governing real estate agents and are vicariously liable for the acts and omissions of Mr. Singh. The plaintiff pleads further that had Mr. Singh not submitted his offer to CIBC, which he had no intent to comply with, the plaintiff, Mr. Hawa, would have successfully purchased the property for $995,000 from CIBC.
[7] The evidence for the plaintiff on this motion is entirely from his aunt, Juliette Nahal, who claims that Prudential Select was involved in the sale by Mr. Singh of the property to Mr. Hawa. In the affidavit filed by Ms. Nahal on this motion, she refers to a true copy of the “Registered [sic] Statement as seller” dated June 6, 2010. When cross-examined on her affidavit, she stated that the copy she received was not signed by Mr. Singh and she only saw that Mr. Singh signed the Registrant’s Statement during the litigation [Emphasis mine]. Her evidence on cross-examination was that she knew an agent selling as principal had to fill out this form even if they were doing a transaction on their own behalf and were not involved with an agency or brokerage.
[8] The defendant Prudential Select relies on the expert evidence of William Johnson that Mr. Singh was required to fill out this form as he was a registrant selling the property for himself. By doing so, Mr. Singh fulfilled his duty to the plaintiff. Mr. Johnson goes on to state that the lack of a trade record sheet and the fact that Prudential Select did not sign the registered statement as seller shows that Mr. Singh signed this form because he was registered with Prudential Select – not because he was transacting the sale in his capacity as a broker with Prudential Select.
[9] On cross-examination, Ms. Nahal confirmed that the Confirmation of Cooperation and Representation is typically submitted with an offer and identifies who the agents and brokers in the transaction are and who they are acting for, as well as the commission arrangement. The evidence is that during the negotiations for the plaintiff to purchase the Howard Street property from Mr. Singh, various proposals were exchanged including Ms. Nahal’s first offer to Mr. Singh which he sent back with changes noted with “complete and correct info” on June 16, 2010. Included in his proposal was a proposed Confirmation of Cooperation form. Both the agreement of purchase and sale and the Confirmation of Cooperation form indicate there is no listing broker and, in fact, no broker indicated to be acting on behalf of Mr. Singh.
[10] Prudential Select denies any involvement in the transaction. It states Mr. Singh was conducting this sale on his own accord. It denies it was responsible for the conduct of Mr. Singh with respect to this transaction between Mr. Singh and the plaintiff. Prudential Select was not paid a commission with respect to the sale by Mr. Singh to the plaintiff and the brokerage was not named in any of the documentation as the broker involved in the transaction.
The Law
[11] A defendant who has delivered his statement of defence may move, with supporting affidavit material and other evidence, for summary judgment dismissing all or part of the plaintiff’s claim. This may only be done where the court is satisfied there is no genuine issue required at trial after consideration of the evidence submitted by the parties, exercising where appropriate the powers set out in r. 20.04(2.1): see Hyrniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, paras. 49-57.
[12] The onus of establishing there is no genuine issue for a trial in these circumstances is on the moving party. A party responding to such a motion arguing that there is a genuine issue for the court to decide must demonstrate that there is a real chance of success in regards to that issue. Both parties must put their “best foot forward” at the time of the summary judgment motion hearing. I am operating on the presumption that both parties have done that here.
Vicarious Liability
[13] I accept that the present state of the law in Canada is that an employer will not be responsible in tort if the wrongful act of an employee is not connected with that of his authorized employment or within the course of his employment as a whole. An act that can be reviewed as an independent action of an employee will not result in liability to the employer: see Bank Leu AG v. Gaming Lottery Corp., (2003), 231 D.L.R. (4th) 251 (Ont. C.A.), [2003] O.J. No. 3213; Bazley v. Curry, [1999] 2 S.C.R. 534, (1999) 174 D.L.R. (4th) 45, at paras. 22, 41; Jacobi v. Griffiths, [1999] 2 S.C.R. 570, (1999) 174 D.L.R. (4th) 71, at paras. 67 and 79; Lockhart v. Canadian Pacific Railway Company, [1942] 3 W.W.R. 149 (P.C.).
[14] As set out in Bank Leu AG v. Gaming Lottery Corporation, at para. 77:
In determining whether an employer is vicariously liable for an employee’s intentional tort, the analysis proceeds in two steps. The first step is to determine if existing authorities are decisive. If so, the analysis stops there. If not, the court then proceeds to determine whether vicarious liability should be imposed in light of a broader based policy analysis based on whether the employer’s enterprise created or significantly enhanced the risk of the harm that occurred... There must be a strong connection between the employer’s enterprise and the risk of the harm that occurred, sufficient to justify imposing employer liability. (Bazley, supra, at para. 42; Jacobi, supra, at para. 29).
[15] Finally, it is clear in the authorities that where the plaintiff is dealing in a personal capacity or entering into contracts with that employee in a personal capacity, the employer will not be vicariously liable: see Bago v. Tasker, [1993] O.J. No. 1734 (Gen. Div.), at paras. 41-43; Campbell v. Sherman, [1993] O.J. No. 2815 (Gen. Div.), at paras. 168, 170; Bourgeault v. McDermid, Miller & McDermid Ltd. (1982), 140 D.L.R. (3d) 174, para. 176-177; Rowe v. Investors Syndicate Limited, [1984] O.J. No. 346 (H.C.J.), paras. 150-162.
Analysis
[16] All of the evidence before me, including that evidence put forward by the plaintiff, makes it clear that Ms. Nahal on behalf of her client Mr. Hawa dealt with Mr. Singh in his personal capacity. I conclude that Ms. Nahal would be very aware as an experienced real estate agent that the documentation signed by Mr. Singh was only consistent with him acting on his own without the involvement of Prudential Select. There is no evidence that at any time Prudential Select had any knowledge of the subject transaction between Mr. Singh and Mr. Hawa. I accept that Prudential Select did not have a file relating to the sale from Mr. Singh to Mr. Hawa and at no time received any commission from the sale of the property. I accept that the facts here are similar to those in Amato v. Welsh, 2016 ONSC 1575. There is no evidence here that Prudential Select increased the risk that Mr. Singh would act illegally in connection to this sale of property.
[17] As I have concluded, there is no evidence before me that Prudential Select was aware of this transaction, was the broker involved, or received any commissions. Therefore, if in fact Mr. Hawa was a victim of a fraud committed by Mr. Singh, I conclude it is not because of any risk created by Prudential Select.
[18] Accordingly, for the reasons set out, there will be an order granting summary judgment to Prudential Select Realty Inc. in dismissing this action against it.
[19] Costs to the defendant Prudential Select Realty Inc. are set at $11,102.68, inclusive of disbursements and HST, as set out in the Bill of Costs submitted.
Thomas J. Carey Justice