Court File and Parties
COURT FILE NO.: CV-21-00663119-00OT
DATE: 20210629
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Kim Walcott, Plaintiff
AND:
Jing Ming Zheng, Defendant
BEFORE: Howard J.
COUNSEL: Shaneka Shaw Taylor, for the Plaintiff
Darwin E. Harasym, for the Defendant
HEARD: Written submissions
ENDORSEMENT
Overview
[1] This is a motion by the defendant for an order pursuant to subrule 13.1.02(2) of the Rules of Civil Procedure,[^1] transferring this proceeding from the Toronto Region to the Southwest Region, for trial in Windsor. Consistent with para. 51 of the Consolidated Provincial Practice Direction, the parties agreed to deal with the motion in writing as an opposed motion under subrule 37.12.1(4).
[2] On June 18, 2021, I was designated by Thomas R.S.J. to hear and determine the motion.
[3] The plaintiff commenced the proceeding by statement of claim issued in Toronto, where she resides.
[4] The action arises out of the sale of residential property located at 539 Campbell Avenue, in Windsor, Ontario (the “Campbell Property”), by the defendant to the plaintiff. The real estate transaction was scheduled to close on May 27, 2021. The plaintiff alleges that the closing was extended to June 30, 2021. The defendant alleges that the transaction was terminated on May 27, 2021.
[5] The issue is whether the defendant has met his burden of establishing that his proposed place of venue (Windsor) is significantly better than the plaintiff’s original choice of venue (Toronto), having regard for the enumerated factors in rule 13.1.02(2), using a “holistic approach.”
[6] For the reasons that follow, the motion to transfer is dismissed because the defendant has failed to establish that Windsor would be a significantly better venue for trial than Toronto.
Factual Background
[7] On November 24, 2020, the defendant as vendor and the plaintiff as purchaser entered into an agreement of purchase and sale for the sale of the Campbell Property for the purchase price of $365,000. The initial closing date of the transaction was March 1, 2021.
[8] On February 5, 2021, a fire substantially destroyed the Campbell Property. The plaintiff states that at all material times the Campbell Property was insured by Desjardins Insurance Company (“Desjardins”).
[9] The plaintiff contends that, pursuant to section 14 of the agreement of purchase and sale, she is entitled to any insurance proceeds, which funds are to be held in trust for her by the defendant.
[10] The parties agreed to extend the closing of the transaction to April 30, 2021, in order to permit the plaintiff to obtain further information concerning the extent of the damage to the premises and what insurance proceeds were available to her under the Desjardins policy, in order to make an election under section 14 of the agreement.
[11] The closing was further extended to May 27, 2021.
[12] When the transaction did not close on May 27, 2021, the defendant treated the agreement as at an end. The plaintiff maintains that the defendant’s real estate counsel consented that day to a further extension to June 30, 2021.
[13] By statement of claim issued May 28, 2021, out of Toronto, the plaintiff commenced the instant action, in which she claims, inter alia, the following:
a. an order for specific performance of the agreement of purchase and sale, as amended;
b. in the alternative, a declaration that the plaintiff is entitled to treat the agreement as at an end and is further entitled to the return of her deposit (together with interest) and damages in the amount of $500,000 for losses arising out of the defendant’s breach of the agreement;
c. punitive damages in the amount of $200,000; and
d. a certificate of pending litigation against title to the Campbell Property pursuant to Rule 42 of the Rules of Civil Procedure and s. 103 of the Courts of Justice Act.[^2]
[14] To date, the defendant has not delivered his statement of defence. The evidence of the defendant is that he anticipates his pleading will include a counterclaim.
[15] The plaintiff did not delivery a jury notice, and the defendant has advised that he does not intend to deliver one. Thus, if not resolved, the matter will be determined by judge-alone trial.
[16] The plaintiff’s motion for the certificate of pending litigation is scheduled to be heard in Toronto on July 9, 2021.
The Test
[17] There is no doubt that the plaintiff has the prima facie right to choose a venue for her action.[^3] This is not a case where there is some statute or rule that requires the trial of this claim to be held in a particular county, as contemplated by subrule 13.1.01(1) of the Rules of Civil Procedure. As such, subrule 13.1.01(2) applies, and the plaintiff was entitled to commence this proceeding at any court office in the Province of Ontario.
[18] The plaintiff chose to commence her action in Toronto, where, inter alia, she herself resides and where both her real estate solicitor and litigation counsel practise law. It cannot be said that the choice of venue of the plaintiff was unreasonable at the time she commenced the action.
[19] However, a defendant has the right to challenge the plaintiff’s choice of venue. Accordingly, the defendant now seeks to transfer the proceeding from Toronto to Windsor, in the Southwest judicial region.
[20] On a motion to transfer a proceeding to a county other than the one in which it was commenced, the court must be satisfied that the “transfer is desirable in the interest of justice,” having regard for the various factors enumerated in subrule 13.1.02(2), which provides that:
(2) If subrule (1) does not apply, the court may, on any party’s motion, make an order to transfer the proceeding to a county other than the one where it was commenced, if the court is satisfied,
(a) that it is likely that a fair hearing cannot be held in the county where the proceeding was commenced; or
(b) that a transfer is desirable in the interest of justice, having regard to,
(i) where a substantial part of the events or omissions that gave rise to the claim occurred,
(ii) where a substantial part of the damages were sustained,
(iii) where the subject-matter of the proceeding is or was located,
(iv) any local community’s interest in the subject-matter of the proceeding,
(v) the convenience of the parties, the witnesses and the court,
(vi) whether there are counterclaims, crossclaims, or third or subsequent party claims,
(vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits,
(viii) whether judges and court facilities are available at the other county, and
(ix) any other relevant matter.
[21] The proper approach of the court on a motion to transfer under subrule 13.1.01(2) was set out by Stinson J. in Eveready Industrial Services Corp. v. Jacques Daoust Coatings Management,[^4] as developed by D.M. Brown J. (as he then was) in Re Hallman Estate.[^5]
[22] In Eveready, after undertaking a comprehensive review of the legislative history of the provision prior to the adoption of the new rule 13.1 in 2004, Stinson J. concluded that the approach that the judge ought to take is “to weigh and consider each of the factors enumerated in subrule 13.1.02(2) in order to determine whether a transfer of the action was desirable in the interest of justice.”[^6] In Hallman Estate, Brown J. described this as the “holistic approach.”[^7]
[23] A corollary of the holistic approach is that no one of the enumerated factors is more important than another and, as such, change of venue motions are fact specific.[^8]
[24] The caselaw has said that where the plaintiff’s choice of venue is reasonable, the onus is on the defendant to show that its proposed place of venue is not only better but “significantly better” than the plaintiff’s choice of venue. Here, the defendant must demonstrate that a change of venue to Windsor would be significantly better than a trial in Toronto.
[25] The “significantly better” dictum comes out of the 2008 decision of Corbett J. in Siemens Canada Ltd. v. Ottawa (City).[^9] The previous leading decisions of this court in Hallman Estate and Eveready had not used the language of “significantly better,” resting their analysis on merely the holistic approach. The Siemens decision had attracted some commentary for its seeming insistence that the plaintiff’s choice of venue must be “rationally connected” to the plaintiff’s claim, which was seen to be a departure from the holistic approach embraced by decisions such as Hallman Estate and Eveready.
[26] In my view, the apparent discrepancy in the caselaw, particularly insofar as the “significantly better” dictum is concerned, was reconciled by the Divisional Court in its decision in Chatterson v. M & M Meat Shops Ltd., where Marrocco A.C.J.S.C., on behalf of a unanimous court, said:
The same paragraph [para. 24 of Siemens] establishes that if the plaintiff’s choice of venue is reasonable and the defendant moves for a change of venue, then a comparison of the two venues is required. The court also stated that in this situation the defendant’s choice has to be significantly better in order to prevail. This is because the Rules permit the plaintiff to choose the venue at the commencement of the claim. [Emphasis added.][^10]
[27] The “significantly better” test has been adopted in subsequent decisions of our court.[^11]
[28] In sum, as I said in Concept Plastics, given that the Rules of Civil Procedure permit the plaintiff (absent requirements under rule 13.1.01(1)) the prima facie right to select a venue for its action, it is not enough for the defendant to propose a merely competing or similarly reasonable alternative place of venue for trial. The defendant is required to demonstrate that its proposed venue is better in some significant aspect(s) than that selected by the plaintiff. Whether the defendant has satisfied that onus should be determined using the holistic approach embraced by the Hallman Estate line of decisions.
[29] Finally, as Firestone J. observed in Bruce Power, in applying the holistic approach, it is important to recognize that the balancing of the factors under clause 13.1.02(2)(b) “is not a purely numerical or mathematical exercise.” It is not the case that one simply counts whether there are more factors favouring the transfer than those favouring the originating jurisdiction.[^12]
Analysis
[30] In my view, it cannot be said that “it is likely that a fair hearing cannot be held” in Toronto, within the meaning of clause 13.1.02(2)(a). In fairness, there was no suggestion of that in the defendant’s materials.
[31] Having considered the clause 13.1.02(2)(b) factors holistically, I find that the defendant has not satisfied his onus of demonstrating that a transfer of this proceeding to Windsor would be significantly better than the Toronto venue selected by the plaintiff, for the reasons that follow.
Subclause 13.1.02(2)(b)(i): “where a substantial part of the events or omissions that gave rise to the claim occurred”
[32] Counsel for the plaintiff summarizes the issues in the action as follows:
While both liability and damages are live issues in this action, more time will be spent on the issue of liability than the issue of damages. The central liability issues to be decided are (1) whether the Defendant breached the Agreement of Purchase and Sale when he failed to provide the insurance particulars he agreed to provide before the May 27, 2021 closing and (2) whether the closing was in fact, extended to June 30, 2021, as his lawyer communicated to mine on May 27, 2021.
[33] For present purposes, I accept counsel’s summary.
[34] As such, while certainly the Campbell Property is located in Windsor, and the fire that damaged the premises occurred in Windsor, to my mind, the critical “events that give rise to the claim” were primarily a function of the exchanges between the parties and their respective real estate solicitors. It appears that much of that was conducted by email correspondence.
[35] As I have said, the plaintiff resides in Toronto. Her real estate lawyer practises in Mississauga, in the Greater Toronto Area. The defendant resides in Windsor. His real estate lawyer practises in Wheatley, in Essex County.
[36] The considerations under subclause (i) do not clearly point to one place of venue over another and, thus, they cannot be said to significantly favour the defendant’s proposed change of venue to Windsor.
Subclause 13.1.02(2)(b)(ii): “where a substantial part of the damages were sustained”
[37] The plaintiff claims, in the alternative, for damages arising out of the defendant’s alleged breach of the agreement of purchase and sale. Those damages to the financial interests of the plaintiff would have been “sustained” by the plaintiff in Toronto.
[38] That said, while the alternative claim for relief may implicate Toronto, the primary claim of the plaintiff is for specific performance of the agreement of purchase and sale, resulting in the conveyance of the Campbell Property in Windsor. Thus, to my mind, the primary claim for relief implicates Windsor.
[39] In my view, the considerations under subclause (ii) implicate both venues relatively equally and, therefore, they cannot be said to significantly favour the proposed change of venue.
Subclause 13.1.02(2)(b)(iii): “where the subject-matter of the proceeding is or was located”
[40] The subject-matter of the proceeding, the Campbell Property, is located in Windsor.
[41] The considerations under subclause (iii) favour the proposed change of venue.
Subclause 13.1.02(2)(b)(iv): “any local community’s interest in the subject-matter of the proceeding”
[42] In his affidavit filed in support of his motion, the defendant states that the “Windsor-area market has been one of the hottest real estate markets in the country over the past year.” The defendant further claims that the “real estate industry in Windsor would be interested to see how a claim for specific performance is resolved in such a market.”
[43] There is some merit in the plaintiff’s response that, other than the “bald assertions” of the defendant, there is no evidence before the court supporting the accuracy of either statement.
[44] While I do not think it particularly controversial to accept that the real estate market in Windsor has certainly been active in the last year or so, that alone does not really speak to any local community interest in the subject-matter of the proceeding within the meaning of subclause (iv).
[45] Whether or not the real estate industry in Windsor would be interested to see how a claim for specific performance is resolved in such a market, I am not convinced that is the type of local community interest in the subject-matter of the proceeding that is contemplated by subclause (iv). While the fire at the premises in February 2021 was the subject of at least one brief media report, neither the transaction in question nor this litigation has sparked any public interest or media reports in the community – at least there is no evidence of same before me. There is no evidence that suggests the public or the real estate market is following this particular case. It is not the type of case that makes one wonder about the possibility of, say, a line up of interested spectators wanting to enter the courtroom to observe the trial or crowds demonstrating outside the courthouse.
[46] I am not convinced that the considerations under subclause (iv) favour the proposed change of venue.
Subclause 13.1.02(2)(b)(v): “the convenience of the parties, the witnesses and the court”
[47] The plaintiff maintains that the only witnesses needed to address the liability issues are the parties and their respective real estate solicitors. As indicated, both the defendant and his real estate lawyer reside in Essex County, while the plaintiff and her real estate lawyer are in Toronto and Mississauga, respectively.
[48] On this account, given that two of the key witnesses reside in the Greater Toronto Area and two reside in Essex County, I agree with plaintiff’s counsel that the subclause (v) factor is essentially neutral on this point.
[49] However, the defendant submits that, based on the allegations in the statement of claim, it appears that evidence from the two real estate agents will also be required about the discussions concerning the plaintiff’s request for a further extension of the closing date. Both the defendant’s real estate agent (Ms. Suzy Chiu) and the plaintiff’s agent (Ms. Donika Gjocaj) carry on business in Essex County.
[50] It is difficult to fully determine what the precise issues for trial will be when those issues have not yet been clearly defined in the pleadings because, here, the defendant has not yet delivered his statement of defence, nor does his evidence speak to the nature of his “anticipated” counterclaim. In the absence of a clear definition of the issues, one cannot be sure what witnesses will or will not be required to give evidence on those issues. In this regard, there is old authority for the proposition that a motion to change the venue for trial should not be made until the issues involved have been defined through the exchange of pleadings, although it was recognized that this is not a hard and fast rule,[^13] and older authority has said that the motion may be brought before the close of pleadings where the issues in the action are clear.[^14]
[51] Further, the defendant points out that if specific performance is not granted, appraisals of the Campbell Property will have to be undertaken in Windsor, and those appraisers would likely become witnesses in trial. However, neither party has provided evidence on whether they intend to call an appraiser at trial and, if so, where that potential witness resides. There is simply no evidence before me on point.
[52] On balance, the question of the convenience of the witnesses at trial, although somewhat difficult to assess at this very early stage on the evidence before me, appears to somewhat favour the proposed change of venue.
[53] However, that influence is tempered by the court’s current reality and its embrace of virtual hearings as a result of the COVID-19 pandemic. In this regard, counsel for the plaintiff submits that, “with the increasing use of electronic communications and virtual hearings, there is no reason why this proceeding, including the trial[,] cannot be done virtually to allow the parties and their witnesses to participate remotely.” To my mind, there is much merit in counsel’s suggestion and, in any event, even if the trial is held in person, the parties may wish to consider an arrangement that would best accommodate the witnesses by allowing any out-of-town witness to testify at trial by video-conference.
[54] On the question of the convenience of counsel for the parties, which will often have cost implications for their clients, the plaintiff’s lawyer practices in Toronto, and the defendant’s lawyer practises in Windsor. That consideration is neutral.
[55] On balance, it cannot be said that the considerations of convenience under subclause (v) significantly favour the change of venue proposed by the defendant.
Subclause 13.1.02(2)(b)(vi): “whether there are counterclaims, crossclaims, or third or subsequent party claims”
[56] At present, there is no counterclaim because the defendant has not yet delivered his pleading, although he has said that he anticipates pursuing a counterclaim.
[57] However, the existence of any counterclaim is not particularly relevant in this particular case. Certainly, there is nothing from the defendant that suggests the existence of a counterclaim would somehow change the litigation landscape or influence the present analysis to any appreciable degree.
Subclauses 13.1.02(2)(b)(vii) and (viii): judicial resources
[58] In the context of the instant case, the considerations set out in subclauses 13.1.02(2)(b)(vii) (“any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits”) and (viii) (“whether judges and court facilities are available at the other county”) speak to the issue of judicial resources. That is, there is some overlap between subclauses (vii) and (viii) in the instant case, in that, it appears one of the primary underlying concerns of the plaintiff here is how quickly this matter can be brought on for trial or summary determination, which, in turn, involves consideration of the extent to which judicial resources are available to secure the most expeditious determination of the proceedings. Thus, this implicates both subclauses (vii) and (viii).
[59] On the evidence before me, both parties agree that the trial of this non-jury matter would require five days.
[60] The material filed by the plaintiff speaks to the potential for a summary judgment motion. The evidence before me indicates that a summary judgment motion could be heard in Toronto as early as December 2021. In Windsor, a full-day summary judgment motion would be placed on a running list for a week (i.e., not a fixed date), with the first availability being in late autumn. Given especially that such estimates are not “carved in stone,” I see no significant difference between the two venues in terms of the most expeditious determination of the matter by summary judgment motion.
[61] If a trial is necessary, the evidence before me indicates that that the Toronto court currently has availability for a five-day, non-jury trial from January 2022 onwards. As designate of the Regional Senior Justice, I can say that the Windsor court would not be in a position to offer trial dates any earlier than that available in Toronto.
[62] In my view, the considerations of judicial resources are more or less neutral as between the two court centres. The defendant has not shown that Windsor would be significantly better or would provide some significant advantage to securing the just, most expeditious and least expensive determination of the proceeding on its merits.
Summary
[63] In sum, balancing all of the considerations enumerated in clause 13.1.02(2)(b), the evidence on this motion does not establish that the venue proposed by the defendant in Windsor is significantly better than the venue selected by the plaintiff in Toronto, as per its prima facie right under the Rules of Civil Procedure. Accordingly, the motion to transfer the proceeding to Windsor is dismissed.
Costs
[64] I have every expectation that counsel for the parties will be able to resolve the question of costs of this motion in writing.
[65] That said, if the parties are unable to agree on costs, they may file brief written submissions with the court, of no more than five (5) double-spaced pages (exclusive of any costs outline, bill of costs, dockets, offers to settle, or authorities), in accordance with the following schedule:
a. The plaintiff shall deliver her submissions within twenty (20) days following the release of these reasons.
b. The defendant shall deliver his submissions within twenty (20) days following service of the submissions of the plaintiff.
c. The plaintiff shall deliver her reply submissions, if any, which shall be limited to no more than three (3) double-spaced pages, within five (5) days following service of the defendant’s submissions.
d. If either party fails to deliver their submissions in accordance with this schedule, they shall be deemed to have waived their rights with respect to the issue of costs, and the court may proceed to make its determination in the absence of their input or give such directions as the court considers necessary or advisable.
J. Paul R. Howard
Justice
Date: June 29, 2021
[^1]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[^2]: Courts of Justice Act, R.S.O. 1990, c. C.43.
[^3]: See, for example, McDonald v Dawson (1904), 8 O.L.R. 72, [1904] O.J. No. 42 (H.C.J.); J.G. Fitzgerald & Sons Ltd. v. Kapuskasing District High School Board, 1967 159 (ON SC), [1968] 1 O.R. 136 (S.C.O., Senior Master); and Paul’s Hauling Ltd. v. Ontario (Minister of Transportation), 2011 ONSC 3970, 106 O.R. (3d) 590 (S.C.J.), at para. 13.
[^4]: Eveready Industrial Services Corp. v. Jacques Daoust Coatings Management Inc. (2005), 2005 19797 (ON SC), 76 O.R. (3d) 390, 15 C.P.C. (6th) 330 (S.C.J.) [Eveready].
[^5]: Re Hallman Estate (2005), 2009 51192 (ON SC), 80 C.P.C. (6th) 139, 52 E.T.R. (3d) 29 (S.C.J.) [Hallman Estate].
[^6]: Eveready, at para. 19.
[^7]: Hallman Estate, at para. 26.
[^8]: Patry v. Sudbury Regional Hospital, [2009] O.J. No. 1060, 69 C.P.C. (6th) 385 (S.C.J.), at para. 13. See also Wilcox v. Flintstone Glass & Mirror Ltd., 2009 73279 (ON SC), [2009] O.J. No. 5613, 85 C.P.C. (6th) 394 (S.C.J., Master) at paras. 15-16.
[^9]: Siemens Canada Ltd. v. Ottawa (City) (2008), 93 O.R. (3d) 220, 2008 48152 (S.C.J.), at para. 25 [Siemens].
[^10]: Chatterson v. M & M Meat Shops Ltd., 2014 ONSC 1897, 68 C.P.C. (7th) 135 (Div. Ct.), at para. 29.
[^11]: See, for example, Concept Plastics Ltd. v. Plasponics Inc., 2016 ONSC 2493 (S.C.J.), at paras. 27-30 per Howard J. [Concept Plastics]; Zhao v. Wikwemikong Nursing Home Ltd., 2016 ONSC 5400, 3 C.P.C. (8th) 418 (S.C.J.), at para. 10 per R.D. Gordon R.S.J.; Bruce Power L.P. v. BNT Canada, L.P., 2018 ONSC 5968 (S.C.J.), at para. 47 per Firestone J. [Bruce Power]; and Purdy v. FGC Limited, 2019 ONSC 2360 (S.C.J.), at para. 14 per Raikes J.
[^12]: Bruce Power, at paras. 16-17.
[^13]: Acli International Commodity Services Inc. v. Samuel Varco Ltd. (1977), 1977 1099 (ON SC), 17 O.R. (2d) 518, 4 C.P.C. 195, 1977 CarswellOnt 267 (H.C.J.), at p. 523 [cited to O.R.].
[^14]: Godbout v. Truaisch, [1955] O.W.N. 929, [1955] O.J. No. 420 (H.C.J.), at p. 930 [cited to O.W.N.].