COURT FILE NO.: CV-22-22-00
DATE: 2023 02 17
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MARGARET KER (Plaintiff) v. SATINDER DEOL, SATINDER CHEEMA a.k.a SATINDER SINGH CHEEMA, GURPREET PANDHER and REMAX GOLD REALTY INC. (Defendants)
Defendants
BEFORE: D. E. Harris J.
COUNSEL: Melisa Rupoli for the Applicant Margaret Ker
Ajay Duggal for the Respondent Gurpreet Pandher
DATE: January 30, 2023
ENDORSEMENT
[1] This is a motion to amend the Plaintiff’s statement of claim to add Satinder Cheema, Gurpreet Pandher and Remax Gold Realty Inc. Cheema consents and Remax has failed to respond. Pandher opposes.
[2] Deol entered into an Agreement of Purchase and Sale (APS) on March 23, 2021 with Ker to purchase for $1,100,000 her property at 220 Beechfield Crescent, Orangeville, Ontario. Deol made his offer to purchase the property through a realtor, Gurpreet Pandher. Ker accepted.
[3] On or around June 7, 2021, Ker was advised by Deol’s lawyer that he would not be completing the transaction. On February 17, 2022, Ker commenced an action against Deol for damages caused by breach of the agreement. Deol filed a statement of defence April 18, 2022.
[4] In Deol’s defence, he alleged as follows:
a. A fellow by the name of Cheema approached Deol with respect to purchasing a home on his behalf;
b. Deol never visited the property but Cheema and Pandher visited it together;
c. Cheema, through Pandher, made the offer to purchase using Deol’s name as purchaser. Cheema was the real purchaser;
d. Cheema paid $10,000 of the deposit for the property;
e. Pandher orchestrated the plan with respect to the purchase of the property by Deol for the benefit of Cheema;
f. Cheema and Pandher are long time friends; and
g. Pandher agreed to arrange the mortgage for the property
h. Deol is unsure whether he even signed the APS.
[5] This was all new information to Ker. She had no idea previously that Cheema even existed and did not know about the scheme or Pandher’s involvement in it. In response to a motion for summary judgment by Ker, Deol filed an affidavit which further elaborated on Cheema and Pandher’s involvement. In it, he said that he doubted whether he ever signed the APS. He had asked Pandher for proof that he signed it including the DocuSign document but never received it from him. Cheema paid $10,000 of the deposit on the property directly to Pandher. Pandher told Deol that he would get the mortgage in Deol’s name.
[6] The statement of claim pleads breach of contract. Ker seeks to add Cheema, Pandher and Remax to the statement of claim currently filed against Deol. A claim of damages for negligent misrepresentation is also sought to be added. Negligent misrepresentation lies both in contract and in tort: BG Checo International Ltd. v. British Columbia Hydro & Power Authority, 1993 145 (SCC), [1993] 1 S.C.R. 12 at paras. 13-21.
[7] The motion is governed by Rule 26.01 of the Rules of Civil Procedure which grants a broad power to permit leave to amend pleadings at any stage subject to non-compensatory prejudice. The Court of Appeal in 1588444 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42 at para 25, summarized the law with respect to amending pleadings, holding,
…[t]he rule requires the court to grand leave to amend unless the responding party would suffer non-compensable prejudice, the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court’s process; or the pleading discloses no reasonable cause of action.
[8] Mr. Duggal led off his submissions by making a dramatic plea that there would be irreparable prejudice to his client’s reputation if the amendment was allowed. This is clearly not the type of non-compensatory prejudice referred to in the cases. It would defeat the request for an amendment in every instance. In State Farm, the Court of Appeal said at para. 25,
Non-compensable prejudice does not include prejudice resulting from the potential success of the plea ...
[9] The other argument made on behalf of Mr. Pandher was that he, as the real estate agent for the purchaser, did not owe a duty of care to the vendor Ker and therefore no reasonable cause of action can lay against him.
[10] In a nutshell, the allegation put forward by Deol and made credible by admission of his own complicity is that, in essence, there was a conspiracy between Cheema and Pandher to misrepresent who the purchaser of the property was. According to Deol, Pandher orchestrated this scheme. Pandher assisted and encouraged Cheema and Deol to pull the wool over Ker’s eyes. Deol was not the real purchaser; Cheema was.
[11] If Ker had known who the real purchaser was, there is at the very least a reasonable prospect that she would not have entered into the contract. She relied upon the representation that Deol was the purchaser. At minimum, this representation was negligent.
[12] The elements of the tort of negligent misrepresentation were enunciated by Justice Iacobucci in Queen v Cognos Inc., 1993 146 (SCC), [1993] 1 S.C.R. 87, 99 D.L.R. (4th) 626 (S.C.C.) based on Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465 (H.L.). Justice Iacobucci held at para. 34:
(1) there must be a duty of care based on a "special relationship" between the representor and the representee; (2) the representation in question must be untrue, inaccurate, or misleading; (3) the representor must have acted negligently in making said misrepresentation; (4) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted.
[13] Several cases applying this test were relied on by the Applicant. In Mohn v. Dreiser [2003] O.J. No. 462 (Ont.S.C.), reversed in part [2004] O.J. No. 4444 (C.A.), Mohn purchased a business based on assurances by the vendors and their real estate agent, one Scheurer. The assurances were inaccurate and negligent, artificially inflating the income the property could produce. Kozak J. found that the real estate agent, Scheurer, who was directly involved in the negotiations, owed a duty of care, holding,
68 Mr. Scheurer as a professional real estate broker is required to act as a reasonable professional broker or real estate agent under the circumstances. As the listing agent, Mr. Scheurer’s profession is a relevant factor to the extent that it demonstrates a particular relationship between the parties. Not only does he owe a duty of care to the Plaintiff because of the special relationship referred to above, but in addition he owes to the Plaintiff a statutory duty to comply with Section 33 of the Real Estate and Business Brokers Act.
[14] Similar is the pre-Cognos case of Hauck v. Dixon (1975), 1975 754 (ON SC), 64 D.L.R. (3d) 201 (Ont. H.C.), where a real estate agent on behalf of the vendor represented to the purchaser that the property could be used as a triplex when under the zoning by-law, it could not. The decision in Hedley was held to be applicable and a duty of care was found.
[15] In the present situation, Pandher made no explicit representations himself to Ker or her broker. He is on the APS as the broker acting for Deol, however. That in my view is clearly sufficient to ground a cause of action against him.
[16] Several cases have expanded on the crucial question of the relationship between the parties when the cause of action is founded in negligence, as this one is. There is both a foreseeability and a proximity component to the relationship: see Hercules Managements Ltd. v. Ernst & Young, 1997 345 (SCC), [1997] 2 S.C.R. 165 at paras. 19-30.
[17] The Supreme Court said in Knight v. Imperial Tobacco Canada Ltd., 2011 SCC 41 and 42,
41 Proximity and foreseeability are two aspects of one inquiry — the inquiry into whether the facts disclose a relationship that gives rise to a prima facie duty of care at common law. Foreseeability is the touchstone of negligence law. However, not every foreseeable outcome will attract a commensurate duty of care. Foreseeability must be grounded in a relationship of sufficient closeness, or proximity, to make it just and reasonable to impose an obligation on one party to take reasonable care not to injure the other.
42 Proximity and foreseeability are heightened concerns in claims for economic loss, such as negligent misrepresentation: see, generally, Canadian National Railway v. Norsk Pacific Steamship Co., 1992 105 (SCC), [1992] 1 S.C.R. 1021 (S.C.C.); Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., 1997 307 (SCC), [1997] 3 S.C.R. 1210 (S.C.C.). In a claim of negligent misrepresentation, both these requirements for a prima facie duty of care are established if there was a “special relationship” between the parties: Hercules Management Ltd. v. Ernst & Young, 1997 345 (SCC), [1997] 2 S.C.R. 165 (S.C.C.). In Hercules Management, the Court, per La Forest J., held that a special relationship will be established where: (1) the defendant ought reasonably to foresee that the plaintiff will rely on his or her representation; and (2) reliance by the plaintiff would be reasonable in the circumstances of the case (para. 24). Where such a relationship is established, the defendant may be liable for loss suffered by the plaintiff as a result of a negligent misstatement.
(Emphasis added)
[18] The crucial vantage point is that of the representor. A duty of care and special relationship exists if it is reasonable to foresee from the representor’s perspective that there will be reliance on the representation made. That is the case here. A real estate agent representing a purchaser has a duty of care to the vendor that he is representing who he says he is representing.
[19] Justice requires Pandher to be joined as otherwise Deol’s position that he was an innocent dupe could potentially leave the plaintiff without a remedy. It was held in 1734934 Ontario Inc. et al v. Tortoise Restaurant Group Inc. et al., 2021 ONSC 8014:
43 Rule 5 speaks to joining parties to a claim. The intention behind this rule is that everyone concerned with the issues be before the court at one hearing. This intention is also reflected in rule 5.03(1) which states:
Every person whose presence is necessary to enable the court to adjudicate effectively and completely on the issues in the proceeding shall be joined as a party to the proceeding.
44 Rule 5.03(4) states:
The court may order that any person who ought to have been joined as a party or whose presence as a party is necessary to enable the court to adjudicate effectively and completely on the issues in the proceeding shall be added as a party.
[20] In conclusion, there is a reasonable possibility of success against Pandher on the amended statement of claim. Fairness requires that he be joined. The application is allowed and Pandher and his company, ReMax Gold Realty are added as is Cheema. The negligent misrepresentation cause of action is also added. Order to go per the draft filed.
[21] Costs will be for the plaintiff in the amount of $6400.16 all-inclusive, to be paid within 30 days.
D.E. Harris J.
DATE: February 17, 2023
COURT FILE NO.: CV-22-22-00
DATE: 2023 02 17
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MARGARET KER (Plaintiff) v. SATINDER DEOL, SATINDER CHEEMA a.k.a SATINDER SINGH CHEEMA, GURPREET PANDHER and REMAX GOLD REALTY INC. (Defendants)
Defendants
BEFORE: D. E. Harris J.
COUNSEL: Melisa Rupoli for the Applicant Margaret Ker
Ajay Duggal for the Respondent Gurpreet Pandher
ENDORSEMENT
Harris J.
DATE: February 17, 2023