COURT FILE NO.: CV-19-141439
DATE: 20210610
CORRIGENDA: 20210610
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Vito Qu
Plaintiff
– and –
Jianying Xu & Right At Home Realty, Master’s Choice Realty
Defendants
Vito Qu, Self-Represented
Peter Cui and Steven Zhong, for the Defendant, Jianying Xu
Viktoria Anteby, for the Defendant, Right At Home Realty
David Heffernan, for the Defendant, Master’s Choice Realty
HEARD: June 4, 2021
REASONS FOR DECISION
(Text of Original Decision Has Been Amended – Changes Appended)
CHARNEY J.:
[1] The defendants have each brought a motion to strike the plaintiff’s Statement of Claim as disclosing no reasonable cause of action.
Facts
[2] The plaintiff, Vito Qu, resides at 35 Roosevelt Drive, Richmond Hill, Ontario (the plaintiff’s residence).
[3] The defendant, Jianying Xu, is the owner of a property located at 5A Pearson Avenue in Richmond Hill, Ontario (the Pearson property).
[4] The plaintiff’s residence is next to the Pearson property. The Statement of Claim alleges that the Pearson property is 5 – 7 meters from the plaintiff’s residence.
[5] In November, 2018 the Pearson property was leased to tenants. The tenants are not named as parties to this action.
[6] Right at Home Realty was the listing brokerage acting on behalf of the landlord (Xu) and Master’s Choice Realty was the cooperating brokerage acting on behalf of the tenants.
[7] The Statement of Claim alleges that the Pearson property “has been used as a base of crime” and that “numbers of criminal activities took place since” (sic).
[8] The essence of the allegations in the Statement of Claim relate to alleged criminal activities in the Pearson property, and an allegation that the plaintiff suffered damages as a result of these activities. The plaintiff is suing the three defendants for a total of $3,000,000.
[9] Paragraph 2[^1] of the Statement of Claim states:
Since this property rented to this criminal group, began criminal activities 24/7. Mainly operated on the driveway, garage is about 5-7 meter open space to plaintiffs’ bedroom window, with lighting beams, noise, yelling, strangers and unusual activities. The plaintiff reacted with fear, worries and scared.
[10] The original Statement of Claim had two plaintiffs: Vito Qu and a retired woman named Hezhen Yin. The Statement of Claim alleged that Ms. Yin was unable to sleep as a result of these alleged criminal activities, and that this caused her to have a stroke and resulted in her hospitalization for one month. After one month of hospitalization, Ms. Yin was unable to return to her bedroom and had continuing treatment overseas.
[11] The Statement of Claim further alleges that on July 24, 2019, two of the tenants were arrested by the police.
[12] The Statement of Claim alleges that the defendant real estate brokers “failed to conduct realtor’s due diligence”.
[13] Paragraph 9 of the Statement of Claim states:
So far the plaintiffs have no knowledge about these 3 defendants are directly or indirectly involved or whether they are members in this criminal group too.
[14] The claim against all three defendants appears to be founded on allegations of negligence for renting the Pearson property to the allegedly criminal tenants. There is no allegation that any of these three defendants were themselves involved in the complained of criminal activity at the Pearson property. The closest the plaintiff comes to making any such allegation is para. 9, where he acknowledges that he has no knowledge that the defendants were directly or indirectly involved in any criminal activity.
[15] The original Statement of Claim was issued on August 8, 2019. On September 10, 2019 the Statement of Claim was amended to delete Hezhen Yin as a plaintiff. Vito Qu is the only remaining plaintiff in this action.
Legal Test - Motion to Strike
[16] The test to be applied under Rule 21.01(1)(b), on a motion to strike a pleading on the ground that it discloses no reasonable cause of action is well-settled:
• the court must accept the facts alleged in the pleading as proven, unless they are patently ridiculous, or incapable of proof;
• it must be “plain and obvious” that the claim cannot succeed – the pleading must have a “radical defect” before the party will be driven from the judgment seat;
• the pleading should be read generously, with allowance for inadequacies due to drafting deficiencies;
• It is important to note Rule 21.01(2)(b), which states that no evidence is admissible on a motion to strike under Rule 21.01(1)(b);
• While evidence is not admissible, documents referred to and relied on in the pleading are not evidence precluded by Rule 21.01 but are, in effect, incorporated into the pleading.
[17] See for example: Kraik v. Ungar, 2020 ONSC 7221, at paras. 14 and 15, and cases cited therein; Harris v. GlaxoSmithKline Inc., 2010 ONSC 2326, at paras. 36 – 41 and cases cited therein.
[18] “Another way of putting the test is that the claim has no reasonable prospect of success. Where a reasonable prospect of success exists, the matter should be allowed to proceed to trial”: Knight v. Imperial Tobacco Canada Ltd., 2011 SCC 42, at para. 17.
[19] In Knight, at para. 19, the Supreme Court stated that the power to strike out claims that have no reasonable prospect of success “is a valuable housekeeping measure essential to effective and fair litigation. It unclutters the proceedings, weeding out the hopeless claims and ensuring that those that have some chance of success go on to trial.”
[20] While the pleading must be read generously in favour of the plaintiff, the minimum requirements must be present. The Court cannot draft the Statement of Claim for the plaintiff. If a material fact necessary for cause of action is omitted, the statement of claim is bad and the remedy is a motion to strike the pleading, not a motion for particulars: Coote v. Ontario Human Rights Commision, 2009 CanLII 55130 (ON SC), at para. 40.
[21] In a passage particularly apt for the present case, the Supreme Court stated in the Knight case, at para. 22:
It is incumbent on the claimant to clearly plead the facts upon which it relies in making its claim. A claimant is not entitled to rely on the possibility that new facts may turn up as the case progresses. The claimant may not be in a position to prove the facts pleaded at the time of the motion. It may only hope to be able to prove them. But plead them it must. The facts pleaded are the firm basis upon which the possibility of success of the claim must be evaluated. If they are not pleaded, the exercise cannot be properly conducted.
Position of the Parties
[22] The defendant Xu is the owner of the Pearson property. Xu rented the Pearson property to tenants who the plaintiff alleges engaged in criminal activity on the Pearson property. Xu argues that the Statement of Claim fails to plead any facts that adequately connects him to the alleged criminal activity. There is no allegation that Xu knew or ought to have known that such activity was being carried out by the tenants, or that the criminal activity was being carried out under his direction, instruction or approval. Indeed, the plaintiff acknowledges, at para. 9 of the Statement of Claim, that he has “no knowledge about these 3 defendants are directly or indirectly involved or whether they are members in this criminal group too”.
[23] The defendants Right at Home Realty and Master’s Choice Realty (the realty defendants) argue that the plaintiff’s case against them cannot succeed because they owe no duty of care to the plaintiff. As realtors, their duty of care is owed to their clients and other parties to the transaction, but they owe no duty of care to strangers to the real estate transaction.
[24] Finally, all three defendants point out that the only damages alleged in the Statement of Claim relate to the damage to the health of the former plaintiff, Hezhen Yin. There are no damages claimed with respect to the remaining plaintiff, Vito Qu. Since Ms. Yin is no longer a plaintiff, the Statement of Claim discloses no cause of action.
[25] The plaintiff argues that his action should be permitted to proceed. He is not represented by counsel, and has provided no case law to support his position. His written argument on this motion is somewhat difficult to follow, but he argues that the realty defendants ignored their due diligence duties by permitting criminals to rent the Pearson property and that the Pearson property owner tacitly consented to lease the property to criminals. Therefore, there should be a trial on the merits.
Analysis
(i) Realty Defendants
[26] I will begin with the allegations against the realty defendants because, in my view, these are easier to dispose of.
[27] The realty defendants’ first point is that they owed no duty of care to an individual who is neither a client nor a party to the transaction.
[28] The existence of a duty of care in tort is a two-part test: (a) whether a prima facie duty of care is owed; and (b) whether that duty, if it exists, is negatived or limited by policy considerations: Kamloops (City of) v. Nielsen, 1984 CanLII 21 (SCC), [1984] 2 S.C.R. 2, at pp. 10 -11. In Hercules Managements Ltd. v. Ernst & Young, 1997 CanLII 345 (SCC), [1997] 2 S.C.R. 165 the Supreme Court of Canada explained the concept of “relationship of proximity” at para. 22:
The first branch of the Anns/Kamloops test demands an inquiry into whether there is a sufficiently close relationship between the plaintiff and the defendant that in the reasonable contemplation of the latter, carelessness on its part may cause damage to the former.
[29] The Court further stated, at para. 28:
As I have already tried to explain, determining whether “proximity” exists on a given set of facts consists in an attempt to discern whether, as a matter of simple justice, the defendant may be said to have had an obligation to be mindful of the plaintiff’s interests in going about his or her business.
[30] In Lavender v. Miller Bernstein LLP, 2018 ONCA 729, the Court of Appeal explained, at para. 30:
The proximity analysis determines whether the parties are sufficiently “close and direct” that it would be “just and fair having regard to their relationship to impose a duty of care”: Livent, at para. 25, citing Cooper, at paras. 32 and 34. As most recently reaffirmed by the Supreme Court in Rankin (Rankin’s Garage & Sales) v. J.J., 2018 SCC 19, at para. 23, that close and direct relationship must be such that “the defendant is under an obligation to be mindful of the plaintiff’s interests.”
[31] Case law confirms that a real estate agent owes a duty of care to his or her client (the principal): Wypych v. McDowell, 1990 CarswellOnt 530; Malpass v. Morrison, 2004 CanLII 36076 (ON SC), at paras. 18-19.
[32] Real estate agents also owe a more limited duty to other parties to the transaction who are not their client but who may rely on their skills or representations in entering into the transaction: Krawchuk v. Scherbak, 2011 ONCA 352: Bowman v. Martineau, 2020 ONCA 330; Olsen v. Poirier et al., 1980 CanLII 1847 (ON CA); Hasham v. Kingston, 1991 CanLII 7236 (Div. Ct.).
[33] There is no authority, however, for the proposition that a real estate agent owes a duty of care to a neighboring resident. The plaintiff has not identified any case in which a duty of care has been recognized between a real estate agent and a stranger to the transaction. This relationship does not fit within any previously established category of proximity.
[34] This is true whether the real estate agent acts for the landlord or the tenant; neither the landlord’s agent nor the tenant’s agent owes a duty of care to a resident of a neighboring property. There is simply no relationship between the agent and the neighboring resident that could give rise to a duty of care.
[35] There was, for example, no representation made by the agent to the neighbor, and no reliance by the neighbor on the agent.
[36] The plaintiff’s vague reference to the realtor’s “due diligence” does not assist his claim, because the realtor’s diligence is due to his or her client or, in certain circumstances, the other party to the transaction. Moreover, there is no suggestion in the Statement of Claim that the realty defendants knew or ought to have known that the proposed tenants were likely to engage in the alleged criminal activities, or how, through whatever diligence was due, such illegal conduct might have been anticipated or predicted.
[37] In my view, on the facts pleaded in the Amended Statement of Claim, it is plain and obvious that there is simply not sufficient proximity between the plaintiff and the realty defendants to give rise to any duty of care on the part of the latter, and the claim against the realty defendants has no real prospect of success.
[38] In addition to proximity, the remaining plaintiff has failed to allege that he has suffered any damages as a result of the tenant’s alleged criminal behavior. As indicated, the original Statement of Claim alleges that the former plaintiff, Hezhen Yin, suffered health related issues as a result of this behavior. While the Statement of Claim was amended to delete Ms. Yin as a plaintiff, the allegations relating to her health issues were not deleted.
[39] A plaintiff may only recover as damages losses it has suffered: Paletta International Corporation v. Liberty Freezers London Ltd., 2021 ONCA 383, at para. 60. Mr. Qu cannot claim damages for losses alleged to have been suffered by Ms. Yin.
[40] The plaintiff’s failure to allege any damages to himself also means that the action against the realty defendants cannot succeed, and the claim against the realty defendants should be dismissed on this ground as well.
(ii) Jianying Xu
[41] The claim against Ms. Xu is subject to a somewhat different analysis. As an adjoining landowner, Ms. Xu may owe a duty of care to his neighbour and could be liable to the plaintiff for negligence and loss of enjoyment of land. In this case, Ms. Xu is the landlord, and there may be circumstances, however rare, in which a landlord owes a duty of care to third parties for the negligence of a tenant. In Durling v. Sunrise Propane Energy Group Inc., 2014 ONSC 1041 (Div. Ct.) the Divisional Court stated at para. 10:
The landlord will rarely owe a duty of care to third parties for the negligence of a tenant but the circumstance of this case are out of the ordinary. It is alleged that this landlord knew or ought to have known that inherently dangerous, unsafe and illegal conduct of the tenant over an extended period of time amounted to foreseeability of a catastrophic harm that eventually occurred.
[42] See also: Sorbam Investments Ltd. v. Litwak, 2017 ONSC 706, at para. 60; Youssef v. Redi-Mix Limited, 2018 ONSC 6409, at para. 45, aff’d in part: 2020 ONCA 83; Campbell v. Campbell, 2020 ONSC 4909, at para. 27.
[43] That said, while the Amended Statement of Claim identifies Ms. Xu as the owner of the Pearson property, it makes no specific allegation against him. It does not allege that he was negligent in renting the property to the tenants, or that he knew or ought to have known about their alleged activities either before or after the property was rented, or that he was involved in any of the alleged criminal activity at the Pearson property. The only specific reference to Ms. Xu is his identification as the owner of the Pearson property (para. 3), and the acknowledgment in para. 9 that the plaintiff has no knowledge whether any of the “defendants are directly or indirectly involved or whether they are members in this criminal group too”.
[44] In short, the Amended Statement of Claim does not plead any material facts that establish any cause of action against Ms. Xu.
[45] In addition, the failure of the plaintiff to allege that he suffered any damages (see paras. 38 - 40) is also fatal to his claim against the defendant Ms. Xu.
[46] Accordingly, I am of the view that the plaintiff’s action against the defendant Jianying Xu cannot succeed given the complete absence of material facts in support of the alleged causes of action and the absence of any allegations of damages suffered by the remaining plaintiff.
Conclusion
[47] For the reasons given, I am of the view that the Statement of Claim must be struck out without leave to amend under Rule 21.01(1)(b) as against all of the defendants because it does not disclose any reasonable cause of action.
[48] If the parties cannot agree on costs, each defendant may file costs submissions of no more than 3 pages plus costs outlines and offers to settle within 20 days of the release of this decision. The plaintiff may file responding submissions of no more than 6 pages and any offers to settle within a further 15 days.
Justice R.E. Charney
Released: June 10, 2021
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Vito Qu
Plaintiff
– and –
Jianying Xu & Right At Home Realty, Master’s Choice Realty
Defendants
REASONS FOR DECISION
Justice R.E. Charney
Released: June 10, 2021
Amendments
- Paragraph [47] has been amended from its original text: For the reasons given, I am of the view that the Statement of Claim must be struck out without leave to amend under Rule 25.01(b) as against all of the defendants because it does not disclose any reasonable cause of action.
To now read as follows: For the reasons given, I am of the view that the Statement of Claim must be struck out without leave to amend under Rule 21.01(1)(b) as against all of the defendants because it does not disclose any reasonable cause of action.
- Paragraphs [41] to [45] have been amended to correct the references to Jianying Xu from Mr. Xu to Ms. Xu.
[^1]: The paragraphs in the Statement of Claim are not numbered consecutively, and this is the second of two paragraph 2s.