0976820 B.C. Ltd. v Dorset Realty Group Canada Ltd.

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

0976820 B.C. Ltd. v. Dorset Realty Group

Canada Ltd.,

2022 BCSC 988

Date: 20220613

Docket: S166420

Registry: New Westminster

Between:

And

0976820 B.C. Ltd. DBA Ackroyd Pets & Aquarium

and William Wong

Plaintiffs

Dorset Realty Group Canada Ltd., Colin Schuss, Padilla Holdings

Limited, Warrington Management Ltd., and 0998036 B.C. Ltd.

Defendants

- and -

Docket: S195407

Registry: New Westminster

Between:

And

Dorset Realty Group Canada Ltd.

William Wong

Plaintiff

Defendant

Before: The Honourable Madam Justice Burke

Reasons for Judgment

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 2

The Plaintiff, appearing in person and as

Representative for the Plaintiff, 0976820

B.C. Ltd.:

W. Wong

Representative for the Plaintiff 0976820

B.C. Ltd., appearing in person:

H. Ho

Counsel for the Defendants,

C. Schuss and Dorset Realty Group

Canada Ltd:

V. Reakes

C. Leung (A/S)

Counsel for the Defendants, Warrington

Management Ltd and 0998036:

N. Lapper

Place and Date of Trial:

New Westminster, B.C.

September 27-29, 2021

October 1, 4-7, 2021

November 5, 2021

February 22-25, 2022

Place and Date of Judgment:

New Westminster, B.C.

June 13, 2022

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

I. INTRODUCTION

This matter involves two actions: New Westminster Registry No. S166420

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(the “Action”) and New Westminster Registry No. S195407 (the “Parallel Action”).

The actions were tried together in hearings spread out over several months.

The Action arises out of a commercial lease (the “Lease”) between the

plaintiff numbered company, doing business as Ackroyd Pets & Aquarium

(“Ackroyd”), and the defendant, Padilla Holdings Limited (“Padilla”), for a commercial

unit located at 140-8171 Ackroyd Road, Richmond, British Columbia (the “Unit”).

The plaintiff, William Wong, is a director of Ackroyd. Ackroyd and Mr. Wong are

collectively referred to as the “Plaintiffs”.

The defendant, Colin Schuss, acted as a dual leasing agent to the plaintiff,

Ackroyd, and Padilla during the lease transaction.

Mr. Schuss provided his services through the defendant company, Dorset

Realty Group Canada Ltd. (“Dorset”).

Herietta Ho is not a party to these proceedings, but is a director and

representative of Ackroyd.

The Unit is located within a shopping centre known as the Richport Town

Centre (the “Premises”).

The Premises were managed by the defendant, Warrington PCI Management

(“Warrington”), incorrectly named in these proceedings as Warrington Management

Ltd.

In March 2014, an intermediary company, 0871951 B.C. Ltd. (“087”) entered

into an agreement (the “Purchase Agreement”) with Padilla to purchase the

Premises, including all of the landlords’ rights and obligations arising under leases

within the Premises. In July 2014, 087 assigned all rights interest and title under the

Purchase Agreement to the defendant, 0998036 B.C. Ltd. (“099”).

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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At the close of the Plaintiffs’ case, Mr. Schuss and Dorset Realty (together,

the “First Applicants”) applied to have the case dismissed on the basis that there is

no evidence to support the case against them in the Action, pursuant to Rules 12-

5(4) and (5) of the Supreme Court Civil Rules, B.C. Reg. 168/2009 [Rules]. Likewise,

Warrington and 099 (the “Second Applicants”) have also brought a “no evidence”

application, seeking to have the Plaintiffs’ claims against them dismissed.

After carefully considering this matter despite Mr. Wong’s strong views and

argument concerning this case on behalf of himself, Ackroyd and 097, I conclude the

Plaintiffs have failed to adduce any evidence supporting any of their allegations. The

Plaintiffs’ claims should therefore be dismissed.

II.

BACKGROUND

A.

The Plaintiffs’ Claims

By its amended notice of civil claim in the Action, filed December 1, 2015, the

Plaintiffs allege that:

a) Prior to entering into the Lease, Padilla and Dorset made negligent or

deceitful misrepresentations to the Plaintiffs regarding the estimated

operating costs and property taxes (together, the “Additional Rent”) payable

under the offer to lease and the Lease.

b) The Plaintiffs relied on the misrepresentations made by Padilla, Warrington,

and Dorset in entering into the Lease.

c) The misrepresentations of Padilla, Warrington, and Dorset in respect of the

Additional Rent amount to fraud or a conspiracy to induce the Plaintiffs to

enter into the Lease.

d) Dorset failed to advise the Plaintiffs of the terms of Chapters and City Fresh’s

(the “Anchor Tenants”) leases or advise that each would vacate the Premises

in 2014.

Within the Parallel Action, Mr. Wong further alleges that:

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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a) Mr. Schuss and Dorset breached their fiduciary obligations by

misrepresenting the Additional Rent and failing to advise that the Anchor

Tenants would vacate the Premises; and

b) Dorset negligently failed to inform of the administration fee payable under the

Lease.

The alleged misrepresentations by Mr. Schuss and Dorset concerning the

Additional Rent are in respect of 2013 only. The Plaintiffs concede that at the time of

their involvement, Mr. Schuss and Dorset could not have estimated the Additional

Rent beyond 2013.

B.

The “No Evidence” Applications

As noted above, the First Applicants brought a “no evidence” application at

the close of the Plaintiffs’ case. As the First Applicants noted, a defendant is entitled

to apply under R. 12-5(4) without being called upon to elect whether to call evidence:

Rules, R. 12-5(5).

The Plaintiffs’ claims against the First Applicants are in negligent

misrepresentation, deceit and fraud, conspiracy, negligence, and breach of fiduciary

duty.

In a no evidence application, the court must consider the evidence called by

the plaintiff to determine whether there is some evidence to support each element of

the alleged cause of action.

With respect to the Plaintiffs’ allegations of negligent misrepresentation, the

Plaintiffs must show that the First Applicants made untrue, inaccurate or misleading

representations to them concerning:

a) additional rent payable by Ackroyd during 2013; and

b) the lease terms of the Anchor Tenants.

To succeed in this cause of action, the Plaintiffs must show:

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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a) there was a duty of care between them and the First Applicants based on a

“special relationship;

b) the representations in question were untrue, inaccurate, or misleading;

c) that the representations were negligently made;

d) that they reasonably relied on the misrepresentations; and

e) they suffered damage as a result of their reliance:

See: Queen v. Cognos Inc., [1994] 1 S.C.R. 87 at 110.

The Plaintiffs described the claims against the First Applicants on three

essential bases:

a) the First Applicants negligently misrepresented the Additional Rent;

b) the First Applicants negligently misrepresented that Chapters and City Fresh

were “anchor tenants” in the Premises; and

c) the First Applicants negligently misrepresented by failing to disclose the 15%

administration fee in the Lease and/or the increase in property taxes.

Warrington and 099 also brought an application to have the Plaintiffs’ case

against them dismissed under Rules 12-5(4) and (5). The claims against Second

Applicants are largely distinct from the claims made against Dorset and Mr. Schuss.

In the Action, the Plaintiffs’ primary claim is in negligent misrepresentation—

the factual underpinning of which concerns the negotiations between the Plaintiffs

and Dorset, on behalf of the landlord, Padilla, with respect to the offer to lease and

Lease in August 2013. There was no evidence at trial that either of the Second

Applicants were ever directly involved in the Lease negotiations. Accordingly, the

Second Applicants submit no actionable misrepresentation could possibly have been

made to the Plaintiff by either 099 or Warrington.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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It is undisputed that 099 was not involved in any matter relating to these

actions until after it purchased the Premises from Padilla in August 2014—almost a

year after the execution of the offer to lease and the Lease. Ms. Ho confirmed on

cross-examination that she did not deal directly with anyone in the Lease

negotiations other than representatives from Dorset.

The remaining claims against the Second Applicants are in conspiracy,

breach of contract, and private nuisance. The Second Applicants maintain these

claims generally stem from the Plaintiffs’ pre-contractual misunderstanding of its

obligation under the offer to lease and the Lease. The Second Applicants submit the

essential basic elements of each of these claims have also not been established by

the Plaintiffs, and they should thus be dismissed.

On a “no evidence” application, the court must consider the evidentiary record

and determine “whether there is any evidence ‘capable of’ supporting the plaintiff’s

claim, without evaluating the quality of that evidence”: Insurance Corporation of

British Columbia v. Mehat, 2018 BCCA 242 at para. 48 [Mehat]. As the Court stated

in Mehat:

[49]

The relevant question is whether a reasonable trier of fact “could’ find

in the plaintiff’s favour, not whether the trier of fact “would” do so.

[50] … the evidence must be “reasonably capable” of supporting the

inferences that are necessary to prove the plaintiff’s case.

The court may engage in a limited weighing of the evidence. The task for the

court is to determine whether any facts have been established by evidence from

which the matters in issue may be reasonably be inferred: Mehat at para. 51. When

deciding whether evidence is capable of sustaining such an inference, the court

should give it “the most favourable meaning”: Mehat at para. 52.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

III. EVIDENCE

A. Evidence of Ms. Ho

In early 2013, Ms. Ho decided to go into the pet store business. She relied on

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Howard Lee, a former colleague, for financial advice in respect of the business

venture and elicited the assistance of a long-time customer, Mr. Wong.

Ms. Ho asked Mr. Wong to assist her with any language difficulties

encountered when leasing a space. Mr. Wong agreed to help. Ms. Ho also felt Mr.

Wong’s involvement lent credibility to her business intentions.

Ms. Ho knew that to operate her business she would need to purchase pets,

supplies and equipment, including cages, tanks, and large washbasins.

Ms. Ho also knew that unless she leased a former pet store, she would incur

costs renovating a space to suit her needs—the most important of which would be to

run water lines for numerous tanks requiring freshwater. Ms. Ho gave evidence that

this required trenching through concrete.

Ms. Ho did not find a pet store space for lease, and therefore renovations

were unavoidable.

Prior to viewing the Unit, Ms. Ho knew that a commercial lease would require

Ackroyd to pay minimum monthly rent as well as Additional Rent.

Sometime in July 2013, Ms. Ho viewed an online advertisement (the

“Advertisement”) for the Unit.

Ms. Ho read the Advertisement and learned that the Unit was 5,812 square

feet and that the estimated Additional Rent for 2013 (referred to as “operating costs”

in the Advertisement) were $12.71 per square foot, or $6,155.88 per month (the

“Advertised Additional Rent Estimate”).

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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Ms. Ho understood that the Advertised Additional Rent Estimate was just

that—an estimate. Ms. Ho accepted that there might be some variance in the actual

Additional Rent Ackroyd would be required to pay during 2013.

Ms. Ho admitted that she understood that $12.71 per square foot figure in the

Advertisement and offer to lease was an estimate only and that there could be

variation after reconciliation by the landlord was completed. Additional Rent included

property tax and a share of the common area expenses, such as property

management and snow removal. Property tax would not be known on a going

forward basis, Ms. Ho also understood that certain utility charges would be charged

on top of the Additional Rent.

By the Advertisement, Ms. Ho also learned that the Unit would come available

on July 31, 2013. Ms. Ho was anxious to find and take possession of a space and

motivated by her and Mr. Lee’s wish to resign from their jobs at another pet store.

Ms. Ho also knew renovations would take some time and wanted to ensure

that Ackroyd was operating by December 2013. Ms. Ho knew that December sales

would significantly surpass sales during any other month of the year.

On July 16, 2013, Ms. Ho and Mr. Wong met Mr. Schuss at the Unit for the

viewing.

During their viewing, neither Ms. Ho nor Mr. Wong asked any questions of Mr.

Schuss about Additional Rent, property tax, common area charges, or Padilla’s

terms of the lease with its other tenants at the Premises.

In the days following, Ms. Ho arranged for a second viewing of the Unit with

her business partner, Mr. Lee.

Mr. Schuss did not attend the second viewing. There is no evidence that he

was asked to attend.

Ms. Ho did not ask Mr. Schuss any questions following her second viewing.

Nor is there any evidence that Mr. Wong asked Mr. Schuss any questions.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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After the second viewing, Ms. Ho asked Mr. Wong to inform Mr. Schuss that

she wanted to make an offer to lease.

When Ms. Ho decided to make an offer to lease, she had only the information

contained in the Advertisement and the advice that she had received from Mr. Lee.

She had not asked any questions of the defendants on topics such as Additional

Rent, property tax, common area charges, or Padilla’s lease terms with its other

tenants.

Mr. Wong did as requested, and on July 31, 2013, Mr. Schuss emailed a draft

offer to lease to Mr. Wong (the “First Offer”). In the email, Mr. Schuss noted that

there was still some uncertainty about the lease terms—specifically the minimum

rent payable.

Ms. Ho received Mr. Schuss’ email and the First Offer from Mr. Wong.

From this point forward, all information was sent from Mr. Schuss to Mr.

Wong, who then relayed the information to Ms. Ho on behalf of Ackroyd. Ms. Ho, as

the company representative, authorized this chain of communication.

Ms. Ho read the First Offer. In particular, Ms. Ho reviewed clause 9 and

understood that the estimated Additional Rent of $12.71 per square foot (the “Offer

Additional Rent Estimate”) was an estimate only and that it did not provide any

information of the estimated Additional Rent payable after 2013.

Ms. Ho did not ask Mr. Schuss any questions about the First Offer.

Ms. Ho asked Mr. Wong to prepare a counteroffer to lease (the “First

Counteroffer”). Mr. Wong did as requested.

The First Counteroffer was drafted by Mr. Wong. It included additional terms

that Ms. Ho wanted, as well as clarifications that helped her better understand

Ackroyd’s rights and obligations concerning the Unit.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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The First Counteroffer was sophisticated in its amendments and included the

following:

a) clause 3: lease term extended from five years to seven years;

b) clause 9: addition of a lease improvement allowance of $15 per square foot;

c) clause 10: Additional Rent would not be payable until January 2014 (rather

than December 2013);

d) clause 15: the date by which Ackroyd was to approve the Lease was

extended from August 9 to August 15, 2013;

e) clause 20: Ackroyd would not be required to pay rent during the fixturing

period extended from November 30, 2013, to December 31, 2013; and

f) clause 23: a reduced scope of indemnity, removing any personal risk to the

shareholders of Ackroyd.

Aside from the date it would commence, the First Counteroffer did not

propose any changes to the Offer Additional Rent Estimate.

Ms. Ho asked Mr. Wong to send the First Counteroffer to Mr. Schuss so that

he could pass it on to Padilla. Mr. Wong did as requested.

Padilla did not accept the First Counteroffer.

On August 6, 2013, Mr. Schuss communicated Padilla’s counteroffer (the

“Second Offer”) to Mr. Wong. Mr. Wong, in turn, forwarded the Second Offer to Ms.

Ho.

Ms. Ho read the Second Offer. Among the revised terms, Ms. Ho understood

that Padilla was proposing an increase in minimum rent during the last two years of

the Lease, that Ackroyd’s obligations in respect of payment of Additional Rent would

commence December 2013 (not January 2014), and that the leasehold improvement

allowance was reduced to $6 per square foot.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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Ms. Ho understood that she was being asked to initial the changes proposed

in the Second Offer, but did not do so.

Instead, Ms. Ho instructed Mr. Wong to again ask that Ackroyd’s obligations

in respect of payment of Additional Rent commence January 2014, not December

2013. On Ms. Ho’s instructions, Mr. Wong crossed out the handwritten words

“December 31, 2013” at clause 10 and inserted the words “January 2014”. He

returned this counteroffer to Mr. Schuss (the “Second Counteroffer”).

Padilla rejected the Second Counteroffer. Mr. Wong’s handwritten notation

“January 2014” was crossed out again and a date of “December 2013” was restated

and returned to Mr. Wong (the “Final Offer”).

Ms. Ho and her partners relented. The Final Offer was agreed to on or in the

days following August 9, 2013. In any event, the precise date is immaterial to this

application.

Neither Ms. Ho nor Mr. Wong asked questions of Mr. Schuss during

negotiations of the Final Offer.

There is no evidence from Ms. Ho or Mr. Wong of any discussion about either

the Advertised Additional Rent Estimate, the Offer Additional Rent Estimate,

property tax, common area charges, or the lease terms with the other tenants at the

Premises. In fact, Ms. Ho admits that she never posed questions on these topics.

Despite the Final Offer stating that Ackroyd would take possession of the Unit

on September 1, 2013, Ms. Ho was anxious to take possession of the Unit early.

On August 14, 2013, Ms. Ho reviewed an email from Mr. Schuss sent to Mr.

Wong. The email explained the “next steps”, including payment of the deposit.

Neither Ms. Ho nor Mr. Wong posed any questions about these matters.

According to Ms. Ho, on August 15, 2013, without any discussion with Mr.

Schuss, Ms. Ho signed a subject removal form and provided it to Mr. Schuss. As

reviewed below, Mr. Schuss says he discussed these matters with Mr. Wong.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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On August 16, 2013, Ms. Ho reviewed an email from Mr. Schuss to Mr.

Wong. The email advised that Warrington would start drafting the terms of lease

between Padilla and Ackroyd only once Ackroyd provided a deposit cheque.

On learning this, Ms. Ho obtained a cheque from Mr. Lee, post-dating it to

August 21, 2013, and arranged for it to be sent to Mr. Schuss.

Mr. Schuss agreed to hold the deposit cheque until its cash date.

On August 20, 2013, Mr. Schuss provided Mr. Wong with the Lease for

Ackroyd’s review, via email.

Initially, Ms. Ho believed that the Lease was not attached to Mr. Schuss’

email. However, at trial, on hearing a voice message left by Mr. Wong for Mr.

Schuss, Ms. Ho recalled that the Lease had been attached and had been forwarded

to her by Mr. Wong.

Ms. Ho recalls reading Mr. Schuss’ email but admits that she neglected to

read the attached Lease.

Despite that, on August 20, 2013, Ms. Ho instructed Mr. Wong to advise Mr.

Schuss that she was prepared to sign the Lease.

Importantly, Ms. Ho says that she did not tell Mr. Schuss or Mr. Wong that

she had not read the Lease. There is no evidence that the Applicants ought to have

known of Ms. Ho’s failure in this respect.

At trial, Ms. Ho gave evidence that she did not understand the terms of the

Final Offer and the Lease before signing these documents, including that she would

be required to pay Additional Rent based on annual estimate, which were subject to

adjustment based on the actual costs incurred. However, these obligations were set

out in the Final Offer and Lease, both of which were signed by Ms. Ho on behalf of

Ackroyd. She also said she understood that Ackroyd would be charged a 15%

administration fee on these adjusted amount for Additional Rent, notwithstanding

that this was a clear term in the Lease.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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On August 20, 2013, after Mr. Wong had advised Mr. Schuss that Ackroyd

had received, read, and was prepared to sign the Lease, Mr. Schuss emailed Mr.

Wong advising that Ackroyd could collect the Lease on August 21, 2013, and return

a signed copy to Dorset on August 22, 2013.

Ms. Ho read Mr. Schuss’ email, but did not relay her confusion or ask any

questions of Mr. Schuss or Mr. Wong to clarify the instructions provided by Mr.

Schuss. There is no evidence that the First Applicants ought to have known of Ms.

Ho’s misunderstanding.

On August 21, 2013, Ms. Ho and Mr. Wong attended Dorset’s office to sign

the Lease.

Ms. Ho recalls that a secretary, Evelyn Eaton, advised her that until Ms. Ho

signed the Lease, Ms. Eaton could not provide the key to the Unit.

Ms. Ho knew that she had until August 30, 2013 to sign the Lease.

Ms. Ho gave evidence that she asked Ms. Eaton whether she could receive

legal advice with respect to the Lease. Ms. Ho says Ms. Eaton did not refuse her

that opportunity. Rather, Ms. Eaton simply advised she was unable to provide Ms.

Ho with a key to the Unit until the Lease was signed. This evidence was repeated

several times in cross-examination.

There is no evidence that Ms. Ho informed Ms. Eaton that she did not read

the Lease or would not be able to understand its terms.

When Ms. Ho signed the Lease, she was in the company of Mr. Wong who,

by her own evidence, had been enlisted to help her overcome any language

barriers.

Ms. Ho opted to sign the Lease so that she could take possession of the Unit

that day. Ms. Ho’s election was made without taking any advice on the Lease and

without advising any person that she had not read the Lease, despite her recognition

that she would not have understood the Lease had she read it and after receiving an

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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email from Ms. Schuss advising that Ms. Ho could have taken the Lease away with

her for review.

Ms. Ho admits that she signed the Lease because she was motivated by her

own urgency to take possession of the Unit that day.

At the time of signing the Lease, and apart from the information contained in

the Advertisement, the Final Offer, and the Lease, Ms. Ho admits that she had

asked no questions, engaged in no discussions, and received no advice from the

First Applicants in respect of:

a) Additional Rent;

b) property tax;

c) common area expenses;

d) the terms of lease of either Anchor Tenant; or

e) the Lease itself.

On October 4, 2013, Ackroyd received a statement of charges for the Unit as

of December 1, 2013. The statement of charges provided for Ackroyd’s base rent

and Additional Rent for December 2013.

The statement of charges is identical to the base rent and Additional Rent that

Ackroyd had expected to pay under the terms of the Final Offer. It is also identical to

the base rent and Additional Rent identified by the Lease.

On February 28, 2014 (after 087 had purchased the Premises), Ackroyd

received a further statement from Warrington (who was managing the Premises on

behalf of 087) on account of the reconciled Additional Rent owing for 2013.

Ms. Ho was not surprised by the reconciliation requiring her to pay an

additional $235.61. Ms. Ho expected a variation of around this amount as the 2013

Additional Rent had previously only been estimated.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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Ackroyd commenced operations on December 1, 2013. As expected, Ackroyd

had good sales month.

Nonetheless, on January 20, 2014, Ackroyd requested that it be permitted to

defer paying Additional Rent for 13 months.

When the landlord refused, Ackroyd offered to pay interest of 5% on the

deferral. However, the landlord refused again.

On July 22, 2014, Ms. Ho received a statement of property tax for December

1, 2013, to December 31, 2013. The statement confirmed that she had been

charged $5.74 per square foot of the unit—a penny less than the amount estimated,

which amounts to $4.85 less than the proportion of property tax included in the

Advertisement Additional Rent Estimate, the Offer Additional Rent Estimate and the

Lease.

Chapters moved from the Premises in May 2014. It was however replaced by

Staples by September of 2014.

B.

Evidence of Mr. Wong

Although Ms. Wong provided much commentary while leading Ms. Ho in

direct examination, his own testimony was brief and short on details.

The record clearly establishes that Mr. Wong was Ackroyd’s representative.

Although Mr. Wong takes issue with term “agent”, he concedes that he agreed to be

the primary person to communicate with Mr. Schuss in respect of the Final Offer and

Lease negotiations.

Like Ms. Ho, Mr. Wong concedes that he did not ask Mr. Schuss about the

tenancies of either Anchor Tenants.

According to Mr. Wong, he and Ms. Ho assumed the Anchor Tenants would

remain tenants in the Premises.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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While Mr. Wong states that he did not know that operating costs during 2014

would be more than $12.71, he rightly pointed out in his direct evidence that “to be

fair, I don’t think anybody knows. Schuss didn’t know. Honest mistake. I didn’t

know”.

Mr. Wong further admitted that the “estimate” referred to in the Final Offer

could have resulted in the Additional Rent being more or less.

According to Mr. Wong, between February and April 2014, Ackroyd’s

business slowed. Mr. Wong does not blame that on the Anchor Tenants, although he

says the closures of those stores “didn’t help”. Instead Mr. Wong states that the slow

down experienced was consistent with the “nature of retail”.

In direct, Mr. Wong spent considerable time on the claim that he did not know

that the Padilla would be charging an administration fee.

Mr. Wong admits to having read the Final Offer. Mr. Wong told Mr. Schuss

that he read the Lease. The Final Offer states, in relevant part:

10. The Tenant proportion of the 2013 annual operating costs and

property taxes are currently estimated at $12.71 p.s.f. per annum

($6,155.88 per monthly) and from 1st December 2013 plus Goods

and Services Taxes as per the Landlord Standard form Lease.

The Lease states, in relevant part:

“Operating Costs” mean the sum (without duplication) of all costs of the

Landlord of operating and maintaining in good repair the Shopping Centre

including but not limited to the total costs of:

[…]

(e) an administrative overhead charge equal to 15% of the costs

previously referred to in this definition including municipal realty taxes.

Mr. Wong does not deny a conversation Mr. Schuss says occurred on August

16, 2013. Mr. Wong’s evidence on this point is as follows:

Q: You heard during the examination of Ms. Ho that Mr. Schuss told you in

August 2013 that he was uncertain Chapter’s was renewing their lease, do

you agree?

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

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A: I do not.

Q: And you told him that you had a friend who would like to open up at

12,000 sq.ft. Chinese restaurant.

A: I don’t recall.

Q: Do you deny that?

A: I said I don’t recall.

Q: And because Mr. Schuss didn’t know, he said he would touch base with

you in the fall when he knew if Chapters was staying.

A: I don’t remember that.

C.

Evidence of Mr. Schuss

Mr. Schuss was called as an adverse witness in the Plaintiffs’ case.

It is important to note that, aside from the First Offer and an email from Mr.

Schuss to Mr. Wong about the Second Counteroffer, Mr. Schuss was only afforded a

single document to refer to during his examination—a statement sent to Ackroyd

after Mr. Schuss’ involvement for which there is no evidence he knew any thing of.

Despite that, Mr. Schuss’ evidence was clear, precise, and corroborative of

much of Ms. Ho’s evidence in terms of the Final Offer negotiations and the Lease. It

was also accurate when compared to the exhibits marked during Ms. Ho’s

examination.

Mr. Schuss’s evidence is as follows:

a) In preparing to create an advertisement for the Unit, Mr. Schuss sought an

estimate of operating costs (i.e., Additional Rent) from Padilla. Padilla’s

representative advised that the 2013 costs were budgeted at $5.75 per

square foot for property tax and $6.96 per square foot for CAM charges. The

representative also noted that water charges were additional.

b) Mr. Schuss then prepared the Advertisement for the Unit. The Advertisement

noted that operating costs for 2013 were estimated at $12.71 per square foot

(i.e., $5.75 + $6.96 = $12.71).

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 19

c) After Ms. Ho’s initial email to Mr. Schuss on July 14, 2013, Ms. Ho advised

Mr. Schuss that Mr. Wong would be contacting him on her behalf.

d) On July 15, 2013, Mr. Schuss discussed Chapters’ lease renewal with Adam

Spear (a representative of Padilla). Mr. Spear indicated that he had not

spoken to Chapters yet, but guessed that if Chapters renewed it would only

be until 2015. Mr. Spear told Mr. Schuss the Chapters lease expired June

2014. Mr. Schuss responded to Mr. Spear providing his views on the lease

rates that may be achievable.

e) As of July 15, 2013, Mr. Schuss had no information about whether or not

Chapters would renew its lease in the Premises. It was common for Mr.

Schuss to engage in discussions with a landlord before knowing a tenant’s

leasing plans.

f) On July 30, 2013, Mr. Schuss met with Mr. Wong at a Starbucks. During the

meeting Mr. Wong told Mr. Schuss that he would be representing Ms. Ho. Mr.

Wong explained that Ms. Ho’s English was not strong and that she required

his assistance. Mr. Wong told Mr. Schuss that Ms. Ho wanted to make an

offer to lease the Unit. Mr. Wong told Mr. Schuss that he had legal training.

Mr. Schuss had no reason to doubt the information Mr. Wong relayed.

g) On July 31, 2013, Mr. Schuss sent the First Offer to Mr. Wong. Shortly

thereafter, Mr. Wong responded with the First Counteroffer. Mr. Schuss

understood that Mr. Wong had typed the First Counteroffer himself. Certain of

its terms appear to have been copied from the First Offer, other terms were

new or modified. Mr. Wong instructed Mr. Schuss to present the First

Counteroffer to Padilla.

h) Although not questioned on it in direct examination, Mr. Schuss provided

sworn affidavit evidence, in which he stated that Mr. Wong gave him the First

Counteroffer on August 2, 2013. Mr. Schuss’ affidavit was entered by the

plaintiff as evidence.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 20

i) On August 6, 2013, Mr. Schuss emailed the Second Offer to Mr. Wong. The

covering email states:

Further to our telephone conversation, please find attached the unsigned

offer to lease draft you gave me the last time we met, however, we have now

made the amendments required by the landlord...

A listing of the landlord’s amendments is provided by Mr. Schuss’ email.

j) On August 7, 2013, Mr. Wong responded with the Second Counteroffer (as

described above).

k) On August 8, 2013, Padilla rejected the Second Counteroffer. Mr. Wong’s

handwritten notation “January 2014” was crossed out again and a date of

“December 2013” restated in the Final Offer. Ackroyd agreed to the terms of

the Final Offer. On August 9, 2013, Mr. Wong hand delivered the fully

executed Final Offer to Mr. Schuss.

l) On August 12, 2013, Ms. Ho and Mr. Wong attended at the Unit to measure

the space. During their visit, Mr. Schuss hand delivered to Mr. Wong Padilla’s

standard form lease and a layout plan.

m) Mr. Schuss advised Mr. Wong that Warrington was not prepared to draft the

prepared form of lease until Ackroyd had removed its subjects and paid a

deposit.

n) Mr. Wong advised Mr. Schuss that Ackroyd was prepared to remove subjects

on the Final Offer based on the standard form of lease that had been

provided. Ackroyd did that on August 15, 2013. Ackroyd then provided a post-

dated deposit cheque.

o) On August 16, 2013, Mr. Wong called Mr. Schuss. Mr. Wong told Mr. Schuss

that a friend, Bill Koo, wanted to lease 12,000 square feet in the space then-

occupied by Chapters. Mr. Schuss advised Mr. Wong that the Chapters lease

was not up until June 2014.

p) On August 20, 2013, Mr. Schuss emailed the Lease to Mr. Wong.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 21

q) Mr. Schuss also left a copy of the Lease at the reception of his office at

Dorset in case Mr. Wong had difficulty printing it. When Mr. Schuss returned

to the office the following day, someone had picked up the Lease. Mr. Schuss

assumed it was Mr. Wong.

r) Mr. Schuss received a telephone message from Mr. Wong on August 20,

2013, advising that they had read the Lease and were ready to sign. Mr.

Schuss had no reason to believe that Mr. Wong and Ms. Ho had not read the

Lease.

s) Mr. Schuss afforded Mr. Wong four opportunities to read the Lease.

t) On August 21, 2013, the Plaintiffs signed the Lease and collected the key

from Dorset’s office.

u) On October 7, 2013, Mr. Schuss and Mr. Spear discussed, via email, that City

Fresh had two options to lease remaining. Mr. Schuss explained that if City

Fresh exercised its option, Padilla was required to enter into a renewal with

the tenant.

v) On November 28, 2013, Mr. Schuss and Mr. Spear discussed, via email, that

Warrington remained uncertain about Chapters’ leasing plans.

w) On December 12, 2013, Mr. Schuss and Mr. Spear discussed, via email, that

while there was no official decision by Chapters to close their store, that

Warrington expected Chapters to vacate the Premises when their lease

expired in June 2014.

x) At no time did either Ms. Ho or Mr. Wong ask Mr. Schuss about the terms of

lease with any other tenant.

y) Mr. Schuss did not have knowledge of the leasing plans of other tenants to

the Premises at the time the Lease was signed.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

IV. ANALYSIS

These claims involve a series of unfortunate events and demonstrate the

Page 22

potential impact of signing an agreement without first fully reading and

comprehending its terms.

While Mr. Wong has made a number of strong statements suggesting the

Plaintiffs were wrongfully induced into a detrimental agreement, they are simply not

made out in the evidence. Rather, the evidence demonstrates the opposite: the

Plaintiffs and Ms. Ho had every opportunity to negotiate, read, and understand the

Final Offer and the Lease.

While Mr. Wong consistently raised the fairness of this situation, Ms. Ho and

Mr. Schuss’ testimony clearly demonstrates that Ms. Ho chose not to read Lease

because she was in a rush to obtain a key to the Unit and begin renovations. In

particular, Ms. Ho agreed she wanted the key to the premises in order to start the

renovation process so that her business could open by December 2013—in time for

the Holiday season, where retail sales are generally highest. As part of that, she

needed to apply for permits and her contractor needed to view the Unit.

The evidence is unchallenged that when Ms. Ho arrived at Dorset’s offices,

she saw the size of the Lease and asked if she could take it home to review at

length. Ms. Eaton, the receptionist at Dorset, confirmed Ms. Ho could take the Lease

home, but that she was unable to give Ms. Ho the key to the Unit until the Lease was

signed.

In her rush to ensure the store opened by December, Ms. Ho forewent the

opportunity to read the Lease and thereby did not inform herself of the terms—

despite observing the large document which signalled that the terms of the Lease

included more than the Final Offer as agreed by the parties. Indeed, that Final Offer

noted that a standard form lease would be prepared, so she was aware from the

outset that the Final Offer would not ultimately constitute the parties’ entire

agreement.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 23

Ms. Ho also contradicted much of Mr. Wong’s evidence, including that he

typed up the First Counteroffer, in which he changed a number of clauses in the First

Offer.

In any event, Mr. Wong’s evidence is itself incapable sustaining his

allegations. As noted above, his testimony was brief and largely bereft of detail.

Likewise, he all but acknowledged that the First Applicants could not have known

what the Additional Rent would ultimately be for 2013.

Nonetheless, I will deal with each aspect of the Plaintiffs’ claim below.

A.

The First Applicants

1. The Anchor Tenants

The First Applicants concede a general duty of care being owed to Ackroyd,

but maintain that concession does to extend to a duty to inquire into the leasing

plans of other tenants of the Premises. The First Applicants submit there is no

evidence that Mr. Schuss knew, prior to Ackroyd signing the Lease, that Chapters

and City Fresh would not be renewing their respective leases in 2014.

The Plaintiffs’ claim in this regard is premised on two pieces of evidence: the

Advertisement for the Richport Town Centre created by Dorset that listed Chapters,

Royal Bank, City Fresh, and Starbucks as anchor tenants and a July 15, 2013 email

to Mr. Schuss indicating Chapters’ lease was set to expire in 2014. In my view,

neither provide any basis for a claim in negligent misrepresentation.

With respect to the Advertisement, its contents were true at the time—each

listed business was in fact a tenant when the Advertisement was released. There is

nothing inaccurate or untrue about the Advertisement. It thus cannot be evidence of

negligent misrepresentation.

Likewise, in the July 15, 2013 email, Mr. Spear noted to Mr. Schuss that the

Chapters lease would expire on June 30, 2014, and sought an update, noting Padilla

would like a tenant who would pay more for the space. However, the email

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 24

exchanges make clear that Chapters had an option to renew and it had not made its

intentions known to Padilla at the time. There is no evidence Mr. Schuss knew that

Chapters would not renew its lease. Indeed, in an email exchange from November

2013, Mr. Schuss and Mr. Spear still are unclear on whether Chapters will or will not

renew their lease.

Likewise, there is no evidence that the First Applicants were aware in July

and August 2013 that City Fresh would not want to renew its lease. The City Fresh

lease was set to expire in October 2014, but also had an option to renew. Each of

these tenants had an option to renew and had not expressed any plans to the

parties when the Lease was signed.

Rather, it appears Ackroyd assumed the Anchor Tenants’ tenancies would be

ongoing. There is no evidence of any inquiries by the Plaintiffs into the status of

these leases or evidence that they indicated to the First Applicants that this was an

important part of the decision to sign the Lease.

Moreover, even if there were evidence the First Applicants had made untrue

or inaccurate representations with respect to the Anchor Tenants to the Plaintiffs,

there is no evidence the Plaintiffs suffered any damages because the Anchor

Tenants did not renew their respective leases in 2014. While in the course of

argument on this issue, Mr. Wong offered to “send to the court” proof of these

damages, Mr. Wong has been provided significant liberty in advancing his case by

both the court and counsel and has “closed his case”. In any event, as there was no

evidence of untrue or inaccurate representations, this latter point would not sustain

an action of this nature. Furthermore, as noted earlier, while Chapters vacated their

premises in May 2014, Staples took over the premises as tenants shortly thereafter.

Ms. Ho gave evidence that sales in December 2013 were “significant”, but

slowed substantially by March 2014—before the Anchor Tenants decided not to

renew their leases. Indeed, Ms. Ho said Ackroyd’s sales decreased 20% by this

point. Ms. Ho was not surprised as she expected December would be the most

significant sales month of the year. In addition, Ms. Ho said Ackroyd’s sales

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 25

improved after the Anchor Tenants vacated their units. This appears to be contrary

to the allegations and claims made by the Plaintiffs.

In conclusion, there is no evidence the First or Second Applicants made

negligent misrepresentations to the Plaintiffs with respect to the Anchor Tenants.

There is no evidence the impugned representations were inaccurate or untrue and

no evidence the Plaintiffs suffered any damages because of the alleged

misrepresentations.

2.

The Property Tax

The Plaintiffs concede they are only making a misrepresentation claim

against the First Applicants with respect to with respect to the 2013 property tax

estimate in the Advertisement. In response, the First Applicants say the estimate for

the 2013 property tax was accurate, and thus cannot sustain a claim for negligent

misrepresentation. The First Applicants point out that that property tax was $5.75 per

square and the common area charges were $6.96 per square foot. Mr. Wong relies

on a letter from Warrington stating the property tax was being increased

substantially in 2014 due to an increase in property values. However, as the First

Applicants correctly point out, that estimate is for the Unit’s 2014 property taxes. The

letter is therefore not evidence of any misrepresentations by the First Applicants with

respect to the 2013 property taxes. Indeed, the actual property taxes for 2013 were

$5.74 per square foot—one penny less than advertised.

There is no evidence supporting this aspect of the Plaintiffs’ claim. Indeed, all

the evidence suggests the Advertisement was accurate. Accordingly, there can be

no finding of misrepresentation.

3.

Additional Rent

The Plaintiffs say the First Applicants negligently misrepresented the

Additional Rent payable under the Lease, thus inducing them to enter into the Lease

to their detriment. The First Applicants say that:

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 26

a) Mr. Schuss provided Mr. Wong with a blank draft lease in advance of

forwarding the actual Lease;

b) Mr. Schuss both emailed a copy of the Lease to Mr. Wong and left a copy at

the Dorset office for him, which he retrieved;

c) Mr. Wong informed Mr. Schuss he had read the Lease and was prepared to

sign it; and

d) Mr. Wong and Ms. Ho had the opportunity to take the Lease with them and

review once again before signing, but chose not to because they were in a

rush to begin renovations on the Unit.

Accordingly, the First Applicants submit the Plaintiffs had every opportunity to

familiarize themselves with the Lease and the clauses relating to the Additional Rent

were clear and obvious terms to the Lease. Hence, they say there is no evidence of

negligent misrepresentation.

I agree. There is no evidence the First Applicants made any

misrepresentations with respect to the Additional Rent payable under the Lease.

Indeed, all the evidence suggests Mr. Schuss gave Mr. Wong and Ms. Ho every

opportunity to read the Lease, offered the chance to ask him questions with respect

to it, and that it was their own actions that lead them not to read it and familiarize

themselves with its contents.

For example, Mr. Schuss provided evidence he had sent a blank lease to Mr.

Wong after they had agreed to the Final Offer. Despite Mr. Wong’s protestations,

there is no contradictory evidence, as Mr. Wong did not testify otherwise on this

point. Accordingly the evidence shows that the blank lease was provided to Mr.

Wong.

While the Warrington insisted the Plaintiffs pay a deposit before it would

prepare the Lease, on August 20, 2013, Mr. Schuss provided the prepared form of

lease to Mr. Wong by email. That afternoon, Mr. Wong left a voice mail for Mr.

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 27

Schuss indicating that he had read the lease and the Plaintiffs were “prepared to

sign the Lease”. While Mr. Wong initially said he did not recall this, once he heard

the voice mail he essentially conceded this was the case. Neither Mr. Wong, nor Ms.

Ho asked any questions of Mr. Schuss about what was contained in these

documents or ask Mr. Schuss to explain the terms.

The First Applicants say, and I agree, that they had no further duty to explain

the terms of the Lease. There was no indication that the Plaintiffs were confused or

Mr. Schuss ought to have known they were confused. Indeed, the negotiating

process did not alert Mr. Schuss to any such concerns. Mr. Wong made a number of

changes in the First Counteroffer which indicated some sophistication or business

acumen. Moreover, he had held himself out to Mr. Schuss as having some legal

training. In all of the circumstances, the First Applicants were entitled to assume the

Plaintiffs had read the Lease and were familiar with its terms. As the Plaintiffs

indicated in these proceedings, their troubles arose because they made

assumptions, which turned out to be wrong.

B.

The Second Applicants

1. Fiduciary Duty

With respect to the Second Applicants, the Plaintiffs agree there was no

contractual relationship between Ackroyd and Warrington, but appear to allege a

fiduciary duty arising out of the payment of management and administration fees

under the Lease.

In response, Warrington submits such a duty was not pled in the amended

notice of civil claim, was raised for the first time at trial, and should not be

entertained.

I have been provided with no authority for the proposition that a property

manager has a fiduciary duty to a tenant. A fiduciary duty between parties with

commercial interest is a rarity: Litwin Construction (1973) Ltd. v. Pan (1988), 29

B.C.L.R. (2d) 88 (C.A.) at 104. Indeed, there will generally be no basis to

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 28

superimpose fiduciary obligations in a commercial relationship where both parties

are sophisticated, arm’s-length entities with relatively equal bargaining who

negotiated their respective rights and obligations under the agreement: Cadbury

Schweppes Inc. v. FBI Foods Ltd., [1999] 1 S.C.R. 142 at para. 30; Cardero Coal

Ltd. v. Carbon Creek Partnership, 2022 BCSC 253 at para. 197. In negotiating the

transaction, Mr. Wong certainly presented himself as such a party. In any event, I

am not satisfied there is any evidence in the present case which could reasonably

support finding such a novel relationship.

With respect to 099, the Second Applicants argue the corporation purchased

the Premises from Padilla the end of August 2014, and thus had no hand in the

negotiating the impugned Lease. Moreover, all the alleged errors (as discussed

below) relate to December 2013 to July 2014, when Padilla was the owner of the

Premises and the landlord. Indeed, 099 only issued 3 invoices—none of which have

been disputed.

2.

Property Tax Errors

The Plaintiffs allege they were overcharged for property taxes under the

Lease in 2013 and 2014. While 099 did not own the Premises at this juncture,

Counsel for the Second Applicants argues that while the property taxes increased in

2014, payment for this year was made before 099 purchased the Premises.

Moreover, as noted above, the 2013 property tax estimate was accurate.

The crux of the Plaintiffs’ claim in this regard appears to be that they were

overcharged for property taxes for 2014. Under the Lease, the Plaintiffs paid

property taxes annually on an advanced basis. That is, the landlord would estimate

the property tax assessment for the Premises for the upcoming year and charge

each tenant proportional to the square footage of their respective unit.

The evidence shows that Plaintiffs were overcharged for at least part of 2014.

However, it is also demonstrates the Plaintiffs were subsequently credited for the

overpayment. The Plaintiffs were credited $567 for July 2014 and the amount of

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 29

$27,643 for the amount paid from December 2013 to June 2014 until the actual

amount of 2014 taxes was established was credited.

3.

Rent Error

The Plaintiffs argue that, at least once, their rental payments were not

properly accounted for by the landlords. Moreover, they assert that the landlord

unlawfully had a bailiff attend at the Unit to collect rental payments which were in

arrears on several occasions.

It appears that Ackroyd advance payment of rent for December 2013,

included in the initial deposit of first month rent plus security deposit, was not

credited in error until July 2014. By time 099 took over in August 2014, this error was

corrected and the security deposit paid to Padilla was accounted for.

With respect to the landlord’s use of bailiffs, I find they were within their rights

under the Lease to do so. Under clause 3.3 of the Lease, the rental payment is due

on the first of the month. In September 2014 and November 2014, 099 engaged a

bailiff to attend at the Unit to collect rental payments that had fallen into arrears. The

evidence shows Ackroyd was in arrears at these times, and the landlord’s actions

were thus justified under the Lease.

While Mr. Wong largely complains about the behaviour of the Bailiff at the

time, which includes sitting on the counter of the store premises, while clearly not

appropriate, this is not sufficient to support a cause of action against the Landlords.

Mr. Wong also says this was an “intimidation” tactic, along with others brought

against Ackroyd by the new property owners, but that is only surmise. There is no

evidence of such a tactic.

4.

Negligent Misrepresentation

The Plaintiffs broadly allege the Second Applicants negligently

misrepresented the terms of the Lease to them. I find there is no evidence

supporting such an assertions. Indeed, Warrington was not involved with the lease

negotiations and had no involvement with the Plaintiffs until they became tenants at

0976820 B.C. Ltd. v. Dorset Realty Group Canada Ltd.

Page 30

the Premises. Moreover, 099 had no involvement with the Plaintiffs until 2014 when

they purchased the Premises—well after the Lease was signed. There was no

period or opportunity in which the Second Applicants could have been in a position

to make negligent representations to the Plaintiffs in respect of the Lease on which

they could have relied to their detriment.

V.

CONCLUSION

I find the Plaintiffs have brought no evidence reasonably capable of proving

any of the claims in the Action or Parallel Action. The First and Second Applicants’

applications under R. 12-5(4) and (5) are granted and the Action and Parallel Action

are dismissed.

If the parties are unable to agree on costs, they may seek direction from the

Court.

“Burke, J.”