Bordeaux Developments Corporation v Hu, 2023 ABKB 44

Court of King’s Bench of Alberta Citation: Bordeaux Developments Corporation v Hu, 2023 ABKB 44 Date: 20230123 Docket: 2201 02478 Registry: Calgary Between: Bordeaux Developments Corporation, Harmony Developments Inc., and Owners Association of Harmony Plaintiffs - and - Weizhao Hu also known as Eric Hu and John/Jane Doe Defendants _______________________________________________________ Decision of the Honourable Justice R.A. Neufeld _______________________________________________________ I.

Introduction [ 1 ] The Plaintiffs in this case are Bordeaux Developments Corporation, Harmony Developments Inc. and the Owner’s Association of Harmony (“OAH”). The former two are the developers of an upscale housing and golf course project in Springbank under the trademark of “Harmony” (owned by Bordeaux). The Harmony development currently contains more than 300 homes, with plans for over 4000 homes on build-out.

OAH is, as the name connotes, the association of homeowners established under the Restrictive Covenant building scheme for the project (the “R.C.”). [ 2 ] As I understand it, its Board of Directors is elected by homeowners in Harmony. It is responsible for making decisions regarding the way the community is maintained and operated, including access to amenities, and compliance with the R.C. restrictions regarding building characteristics, use and upkeep. [ 3 ] The Defendant (Mr. Hu) purchased a lot in the development on December 19, 2017, along with his partner, Ms. Tan.

Their lot was and remains subject of the R.C. [ 4 ] In late 2018/early 2019, the OAH received complaints from Harmony landowners that Mr. Hu was improperly storing vehicles and trailers in contravention of the R.C. at the residence. [ 5 ] After investigation, OAH management directed that the residence was in breach of the R.C. A voicemail messages was left on June 2019, followed by a letter from the OAH in July. In September 2019, counsel for the OAH sent a formal demand letter, providing 45 days notice. It went unclaimed and was personally delivered to the owners on October 2, 2019.

[ 6 ] A follow up email was sent by the OAH on May 13, 2020, regarding when the breach would be remedied, followed by a further demand letter (July 16, 2020) reiterating the breaches and adding issues such as stockpiling of soil, improper storage of construction materials and general unsightliness. This was followed by a third demand letter dated July 30, 2020 demanding compliance by August 3, 2020. A caveat was registered against title due to mounting legal costs. [ 7 ] The Defendant attests that he was not aware of the R.C. and its implications at the time of purchase.

He says that he and his wife were not notified of the alleged breaches until legal counsel for the OAH became involved. They also disagreed as to scope of restrictions on vehicle storage under the wording of the R.C. [ 8 ] Mr.

Hu’s formal response to the demands was to file a statement of claim (Action 2001 10966) alleging breach of trust, duress, malice or ill will and bad faith, discrimination based on prohibited grounds under the Human Rights Act , loss of family reputation and financial stresses. [ 9 ] OAH filed a statement of claim of its own on December 3, 2020 (Action 2001 14985) seeking to enforce the R.C. It also continued to try to resolve the non-compliance issue by providing an extension to June 30, 2022 and deferring document production in its action to enforce the R.C. until that time. II.

The Campaign [ 10 ] Aside from his legal action, the Defendant also responded by taking steps to publicize their dispute with the OAH and their view that the actions taken against his family were motivated by racial prejudice. This included setting up a website www.racistharmony.ca and installing large vinyl decals on the sides of a trailer stating: “RACIST COMMUNITY OF THE YEAR.

NO LAKE ACCESS FOR CHINESE KIDS TARGETTING HOA ENFORCEMENT $60K LIEN ON FAMILY HOME and the harassments go on racistharmony.ca.” [ 11 ] The website contained the following allegations: a) “Racist Community of the Year”, b) “Our Racial Targetted [ sic ] Experience in Harmony”; c) “ Without any prior attempt to communicate with us , my wife received this demand letter from the largest law firm in Canada, retained by the developer, citing us for having commercial trailers on the property.”; d) “I was in China at the time and my wife, not knowing any better, tried to explain to the developer in an email that the trailers are not commercial but she needed me to be back in the country next April in order to move it.

And they didn’t bother responding to her .”; e) “Our request for a pass to access the community lake was denied. They said its because we are in breach of the Restrictive Covenants but did not provide any document that states our access to the lake can be taken away for the accused “breach” . I read through all the Restrictive Covenants I could find on my land title and didn’t see anything related to that either.”;

f) I know we bought into a new community and don’t mind these but somehow the lot belongs to the Chinese family is not allowed to be “unsightly” [...]”; g) “How blind do you have to be to not see any other violations in the community, if not racist? ”; and h) “They put a $60,000 CAVEAT on our land title for the previous and FUTURE legal costs.

Here let me remind you that for something they could’ve just come to us directly at first, the developer retained the largest law firm in the country to send us a demand letter, then used a senior counsel who’s been practicing law for longer than I have been alive for all the communications, just to serve someone’s agenda for disliking us, because of no other reasons that I can think of other than as a race .” [ 12 ] Mr. Wu parked the trailer in prominent locations within Harmony, including show homes and the community beach.

He did so personally when he was in Calgary and arranged for a friend to do so when he was out of the country. [ 13 ] On February 24, 2022, Justice Slawinsky granted an injunction requiring the Defendant to remove the trailer from sight and to take down the website. The matter returned on April 6, 2022. Justice Ashcroft ordered that the injunction would remain in place until further Order. [ 14 ] During cross-examination on affidavits, Mr. Hu admitted to missing the deadlines imposed by Slawinsky J.

While the racistharmony.ca website has been taken down, the contents of the website are now accessible under a different URL. The name of that web location does not include the Harmony name. I was advised in argument that the Defendant disavows involvement in it, but there is no affidavit evidence to that effect. III. Constituent Elements of Defamation [ 15 ] There is a three-part test for claims of defamation in Grant v.

Torstar Corp ., 2009 SCC 61 , at paragraphs 28-29 : [28] A plaintiff in a defamation action is required to prove three things to obtain judgment and an award of damages: (1) that the impugned words were defamatory, in the sense that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person; (2) that the words in fact referred to the plaintiff; and (3) that the words were published, meaning that they were communicated to at least

one person other than the plaintiff. If these elements are established on a balance of probabilities, falsity and damage are presumed, though this rule has been subject to strong criticism: see, e.g., R. A. Smolla, “Balancing Freedom of Expression and Protection of Reputation Under Canada’s Charter of Rights and Freedoms”, in D. Schneiderman, ed., Freedom of Expression and the Charter (1991), 272, at p. 282. (The only exception is that slander requires proof of special damages, unless the impugned words were slanderous per se: R. E.

Brown, The Law of Defamation in Canada (2 nd ed. (loose-leaf)), vol. 3, at pp. 25-2 and 25-3.) The plaintiff is not required to show that the defendant intended to do harm, or even that the defendant was careless. The tort is thus one of strict liability. [29] If the plaintiff proves the required elements, the onus then shifts to the defendant to advance a defence in order to escape liability. (see also, Alberta Computers.com Inc v Thibert , 2021 ABCA 213 , at para 29 , citing also, Bent v Platnick , 2020 SCC 23 (“ Bent ”)). A.

Injury [ 16 ] The Defendant agrees that allegations of racism can injure the reputation of the alleged perpetrator but says that those allegations would be unlikely to damage the stellar reputation of Harmony. He also agrees that the statements in question were published. He does not concede that the statements made here referred to the corporate Plaintiffs, other than to the extent that they are part of the broader Harmony community. B.

Identification [ 17 ] Raymond E Brown, Defamation Law: A Primer , 2 nd ed (Toronto: Carswell, 2013) at 81, explains as follows: The plaintiff must plead and prove that he or she is the one to whom the defamatory statement refers. The defamatory statement must have been published “of and concerning” the plaintiff. It “must refer to some ascertained or ascertainable person, and that person must be the plaintiff.” This is known as the requirement of “identification.” There must be some certainty as to the person defamed. The offending passage must have some personal application to the plaintiff.

In many cases, the identification is easily and readily satisfied because the plaintiff is specifically named or identified in the publication. In other cases, however, the plaintiff’s name may be the same as someone else or a fictional character to whom the defendant intended to refer. In some cases the plaintiff’s name may not be used at all but, nevertheless, the court may conclude that he or she was the one to whom the publication refers. [ 18 ] Lord Denning uses more colourful language in Hayward v.

Thompson , [1981] 3 W.L.R. 470 at 479 (C.A.) : If the defendant intended to refer to the plaintiff, he cannot escape liability simply by not giving his name. He may use asterisks or blanks. He may use initials or words with a hidden meaning. He may use any other device. But still, if he intended to refer to the plaintiff, he is liable. He is to be given credit for hitting the person whom he intended to hit. The law goes further.

Even if he did not aim at the plaintiff or intend to refer to him, nevertheless if he names the plaintiff in such a way that other persons will read it as intended to refer to the plaintiff, then the defendant is liable. [ 19 ] The defamatory comments made by the Defendant specifically referred to the OAH. Although the corporate Plaintiffs were not referred to by name, their identity can be readily inferred by and are known to community residents and visitors including prospective home buyers. Bordeaux was the original development permit applicant and is the owner of the Harmony trademark.

Harmony Developments Inc. (together with Qualico) is actively involved in the build-out of the community and for obvious reasons the name Harmony is also associated with it. Moreover, while Mr.

Hu’s immediate point of conflict and dispute over the RC was the OAH, his campaign specifically targeted the financial interests of the Harmony developers by among other things, parking an advertising trailer across from show homes. [ 20 ] I am satisfied based on the evidence before me that the impugned comments were directed at the corporate Plaintiffs and they are identifiable for the purpose of maintaining an action in defamation. To paraphrase Lord Denning, Mr. Hu is to be credited for hitting those who he intended to hit. C.

Defences [ 21 ] The Defendant has pleaded the defences of justification and fair comment. [ 22 ] A defamatory statement is not actionable if its “sting” or “main thrust” is shown by the Defendant to be true ( Bent , at para 107 ). [ 23 ] The main thrust and sting of the statements made by Mr. Hu is that the Plaintiffs are racist and discriminated against Mr. Hu and his family based on their Chinese ethnicity.

Ancillary allegations are that the family has been unfairly penalized (i.e. a $60,000 lien) and unfairly prohibited from lake access due to the absence of proper notice or opportunities to remedy his non-compliance. [ 24 ] The Defendant argues that there is truth to the allegations, and a viable justification defence. He says that his family has been singled out in terms of R.C. enforcement actions, and genuinely believe that the reason for such discrimination is race.

Having reached that conclusion, they are entitled to express their views and concerns to the community at large, as a matter of free speech and conscience. [ 25 ] The Plaintiffs argue that Mr. Hu’s affidavit, and answers under questioning fall short of demonstrating a viable justification defence. They say that while Mr. Hu may believe himself to be a victim of racism, subjective belief is not enough. There must be a basis in fact for the allegation. Mr. Hu’s evidence consists primarily of a series of photographs of other property in the community that he says

are also not in compliance with the R.C. From this, he infers that he was discriminated upon, due to his race. [ 26 ] However, that inference is unsupported by any evidence as to who owns those properties; whether the properties are subject to the R.C.; whether those owners have been dealt with in similar fashion vis-à-vis compliance; and what the race or ethnicity of such owners is. [ 27 ] I agree with the Plaintiffs that Mr.

Hu’s evidence does not provide a factual foundation for the racism allegation. [ 28 ] As for the fair comment defence, the Plaintiffs argue that the defence does not apply where the defamatory statement has been made maliciously or with reckless disregard for its truth ( Bent , at paras 244-245 ). They say that malice is shown here, because Mr. Hu admittedly embarked or his campaign out of spite, and to injure the Plaintiffs financially. [ 29 ] In my view, this overstates Mr. Hu’s motivation. Mr. Hu admitted in questioning to being hurt and frustrated by the OAH’s actions.

He also admitted to targeting prominent locations such as show homes to get his point across and there was at least some intent to injure the Plaintiff corporations financially. At this stage, however, I would not have been prepared to find that the defence of fair comment is unavailable due to malice in ordinary sense. There are likely a variety of other factors motivating Mr.

Hu’s conduct, including his personal experiences including with racism; his frustration; and his lack of understanding regarding the rights and responsibilities of homeowners and the OHA. [ 30 ] I do agree with the Plaintiffs, however, that while the evidence falls short of demonstrating a motive of pure malice, it does show that Mr. Hu had a reckless disregard for the truth in advancing a campaign to smear the Plaintiffs with the claim of racism, making the defence of fair comment unavailable. At most, the OAH was guilty of overzealous and inconsistent enforcement of the R.C.

There is simply no evidence of the Plaintiffs having a racist agenda or inclination. IV. Appropriateness of

Summary Judgment [ 31 ] In Hryniak v. Mauldin , 2014 SCC 7 , the Supreme Court of Canada directed that a culture change was required in Canadian courts. To facilitate access to justice for all Canadians, processes for streamlining the delivery of justice are to be supported and put into action on a day-to-day basis. This includes

summary adjudication. [ 32 ] Alberta has followed that direction. In Weir-Jones Technical Services Incorporated v Purolator Courier Ltd , 2019 ABCA 49 (“ Weir-Jones ”), the Alberta Court of Appeal articulated a framework for

summary adjudication (short of trial) that is designed to facilitate that process while ensuring that cases that can only be fairly decided with the benefit of a conventional trial will proceed in that fashion (see also, Hannam v Medicine Hat School District No. 76 , 2020 ABCA 343 ). [ 33 ] The approach set out in Weir-Jones requires four steps, at paragraphs 47-48: 1. Determining whether the evidentiary record is sufficient to fairly proceed on a

summary basis; 2. Requiring the Applicant to make out its case for

summary disposition, based on that record, and on a balance of probabilities; 3. Requiring the Respondent to satisfy the court that there are genuine issues for trial such that

summary disposition is inappropriate; and 4. The making of a final determination based on all of the evidence and circumstances of the case as to whether a

summary disposition can fairly be made. [ 34 ] The facts underlying the defamation claim are not in material dispute. Extensive affidavits have been filed by the Plaintiffs, which set out the defamatory statements in issue. There is no question that the statements were published, either on the internet or on billboard type displays on the sides of a trailer parked in the community. [ 35 ] The Defendant filed an affidavit of his own, describing in detail the circumstances that led him to make the statements in question, and defending the truthfulness of his accusations of unfair treatment.

He had the opportunity to cross-examine the Plaintiffs affiants but elected not to do so. [ 36 ] I find that there is sufficient evidence before me to make a

summary disposition. Therefore, the first Weir Jones test is met. [ 37 ] I also find that the Plaintiffs have shown on a balance of probabilities that they were defamed. [ 38 ] The thrust, or “sting” of the campaign laundered by Mr. Hu was that “Harmony” (including the developers and the OAH) is racist.

Hence, the name of his website racistharmony.ca; which was featured on his billboard-type advertisements. [ 39 ] Such an allegation would undoubtedly tend to injure the reputation of its target – whether corporate or personal. [ 40 ] As discussed earlier, the Plaintiffs were either specifically identified in those communications (the OHA) or would be identified with them by a reasonable observer (in the case of the corporate Plaintiffs). [ 41 ] There is no dispute that the statements were published by Mr. Hu. He admitted as much in testimony. Therefore, the second Weir Jones test is met. [ 42 ] In response, Mr.

Hu advances the defences of justification and fair comment. He also says that there is a genuine factual issue for trial as to whether the Plaintiffs were in fact damaged, and what their losses were; and suggested (in argument and without a cross- application) that instead of

summary disposition, this action should be consolidated with Mr. Hu’s action against the OHA in respect of

the R.C. and the OHA’s action against him seeking enforcement of the R.C. [ 43 ] In my view, the Defendant has failed to show that there is a genuine issue for trial. [ 44 ] Justification as a defence to defamation requires that the maker of the defamatory statement show that it is substantially true. Having had the opportunity to do so through affidavit evidence and questioning of the Plaintiffs’ affiants (who categorically deny any racism or racial motivation in enforcement of the R.C.), the Defendant has presented no evidence to support his racism allegation.

We are left with a bare assertion, without supporting facts. [ 45 ] The defence of fair comment is also unsupported. Comments can only be fair if they are supported by facts (see, Huff v. Zuk , 2021 ABCA 60 , at para 46 , citing Simpson v. Mair , 2008 SCC 40 at para 28 ). In this case, based on the evidence before me, they were advanced with a disregard for the truth.

While falling short of being malicious, they were reckless and intended (in the case of the billboards) to inflict economic harm on the corporate Plaintiffs. [ 46 ] Accordingly, the third Weir Jones test is met. [ 47 ] As a final step, I have considered whether in all of the circumstances of this case,

summary disposition would be fair. I have concluded that it would be. This claim is not factually complex; nor does it turn on the credibility of one or more witnesses. It has been established that defamatory comments were made, and what they consisted of. The Defendant has put his best foot forward, and failed to provide any reason, grounded in fact and law, to conclude that the defences of justification or fair comment apply.

Damages are presumed, and general damages can be awarded without further evidence as to financial loss. [ 48 ] In result, no useful purpose would be served by proceeding to trial or consolidating this action with those that have been commenced in respect of enforcement of the R.C. [ 49 ] Accordingly, I can grant judgment against the Defendant on a

summary basis and will do so. V. Damages [ 50 ] The Plaintiffs seek general and aggravated damages of $80,000, and punitive damages of $10,000 for high handed conduct. [ 51 ] The relevant law was summarized in Soliman v. Bordman , 2021 ONSC 7023 , at paragraphs 197-202 : [197] In cases in which defamation is proven, the plaintiff’s remedies may include: (

a) general damages; (

b) special or pecuniary damages that are causally connected to the defamatory statements; (

c) aggravated damages; (

d) punitive damages; and (

e) injunctive relief. Damages for defamation are assessed as the amount necessary under all of the circumstances to restore the plaintiff’s reputation in the community and his or her injury to feelings and to provide consolation and public vindication. [198] General damages and aggravated damages are compensatory and there may be some overlap in granting both general and aggravated damages.

Special damages for pecuniary loss are rarely claimed in defamation actions because they are exceedingly difficult to prove and the basis of recovery for loss of reputation usually lies in general damages, which are presumed from the publication of the libel.

The reputation of a lawyer and other professionals such as accountants, medical practitioners, engineers, is paramount to his or her livelihood and statements attributing, dishonesty, untrustworthiness, villainy, or immorality will cause serious harm to the professional’s reputation and livelihood. [199] The factors to consider in determining the quantum of damages for defamation include: (

a) the plaintiff's position and standing; (

b) the nature and seriousness of the defamatory statements; (

c) the mode and extent of publication; (

d) the absence or refusal of any retraction or apology; (

e) the whole conduct and motive of the defendant from publication through judgment; and (

f) any evidence of aggravating or mitigating circumstances. In contemporary times, where the mode of communication is the Internet this is a factor that intensifies the harm caused by the publication of the defamation because of the anonymous, interactive, and worldwide reach of an Internet communication and its insidious potential to persuade its audience of false information; defamation through the Internet is a particularly egregious type of defamation. [200] In Hill v.

Church of Scientology of Toronto , the Supreme Court held that there is no cap placed on general damages in defamation cases as was done in the personal injury context. [201] Aggravated damages compensate the plaintiff for the damages caused where the defendant’s conduct has been particularly high- handed, insulting, spiteful, malicious or oppressive increasing the plaintiff's humiliation and anxiety caused by the defamation. In Hill v. Church of Scientology of Toronto , Justice Cory stated at paras. 190-91: 190.

If aggravated damages are to be awarded, there must be a finding that the defendant was motivated by actual malice, which increased the injury to the plaintiff, either by spreading further afield the damage to the reputation of the plaintiff, or by increasing the mental distress and humiliation of the plaintiff. […] The malice may be established by intrinsic evidence derived from the libellous statement itself and the circumstances of its publication, or by extrinsic evidence pertaining to the surrounding circumstances which demonstrate that the defendant was motivated by an unjustifiable intention to injure the plaintiff. […] 191.

There are a number of factors that a jury may properly take into account in assessing aggravated damages. For example, was there a withdrawal of the libellous statement made by the defendants and an apology tendered? If there was, this may go far to establishing that there was no malicious conduct on the part of the defendant warranting an award of aggravated damages.

The jury may also consider whether there was a repetition of the libel, conduct that was calculated to deter the plaintiff from proceeding with the libel action, a prolonged and hostile cross-examination of the plaintiff or a plea of justification which the defendant knew was bound to fail. The general manner in which the defendant presented its case is also relevant. Further, it is appropriate for a jury to consider the conduct of the defendant at the time of the publication of the libel. For example, was it clearly aimed at obtaining the widest possible publicity in

circumstances that were the most adverse possible to the plaintiff? [202] In defamation cases, punitive damages are only appropriate where the combined award of general and aggravated damages would be insufficient to achieve the goal of punishment and deterrence. [footnotes omitted, see also, Chartier v Bibeau , 2022 MBCA 5 ] [ 52 ] In Elko v Sana , 2020 ABCA 213 , defamatory allegations of racism and child abuse were made against a school principal.

The Court of Appeal upheld the award of general damages of $150,000 but reversed the award of aggravated and punitive damages (at paragraph 42). [ 53 ] In Lord Selkirk School Division et al. v. Warnock , 2015 MBQB 195 , a general damage award of $60,000, plus an award of $30,000 for aggravated damages, was made because of defamatory allegations of racism. [ 54 ] The Plaintiffs claim for punitive damages of $10,000 is based on Mr.

Hu’s “high handed” conduct in flaunting the R.C. and mounting a campaign to discredit the Plaintiffs, and his failure to abide by the terms of Justice Slawinsky’s Order. [ 55 ] The Defendant did not present argument regarding quantum of damages. Counsel offered to make submissions in the future if requested by the court, and reiterated that the application should be dismissed, as

summary judgment is not an appropriate remedy. [ 56 ] I have decided to award each Plaintiff $20,000 in general damages and $3,300 in punitive damages. [ 57 ] The general damage award is consistent with Elkow and Lord Selkirk where general damages in the range of $60,000 to $150,000 were awarded for defamatory allegations of racism. It is somewhat lower than Elkow , as that case involved allegations of racism and child abuse, both of which are particularly damaging to an educational professional.

In my view an award of $60,000 in general damages is sufficient to compensation for the defamation in question and will deter others from undertaking similar campaigns. I do not agree with the Plaintiffs’ argument that more substantial general damage awards are required for defamatory allegations of racism in response to the current “cancel culture,” environment in which we live and the ease with which individuals and corporations can be unfairly stigmatized.

To embark on such an analytical exercise would be to inject a political element into the determination of damages that is unnecessary and fraught with subjectivity. I decline to do so. [ 58 ] I do agree that at least some punitive damages are in order in this case. Mr. Hu has clearly been placed under great stress in responding to what he believes to be unfair practices by the OAH. However, while I found that no actual malice was proven, Mr. Hu quite deliberately set out to injure the corporate Plaintiffs by targeting prospective homebuyers.

There is also no excuse for failing to comply with deadlines set by this court regarding removal or screening of advertisements. I also have considerable difficulty accepting that Mr. Hu has no control over the new URL site to which the racistharmony.ca information has migrated. [ 59 ] For all of these reasons, general and punitive damages are justified, and I also order an injunction for Mr. Hu take all reasonable steps to forthwith remove the content of his previous racistharmony.ca website from the internet. VI.

Costs [ 60 ] The Plaintiffs seek solicitor/client costs based on the provisions of the R.C. providing for such costs on actions to enforce its provisions, or enhanced, “McAllister” costs (see, McAllister v Calgary (City) , 2021 ABCA 25 ). [ 61 ] I am not prepared to award solicitor/client costs. This action does not turn on the provisions of the R.C. Just as it would be inappropriate to consolidate the two actions, it is also inappropriate to invoke the costs provisions of the R.C. in respect of the action for defamation. [ 62 ] I am prepared to order enhanced costs.

If the parties cannot agree on those costs within 30 days, the matter can be returned to me for determination by submissions in writing. Such submissions should be not more than three pages in length exclusive of authorities. [ 63 ] The Plaintiffs’ submission shall be filed first; and a reply submission shall be filed within 30 days thereafter. Heard on the 6 th day of January, 2023. Dated at the City of Calgary, Alberta this 23 rd day of January, 2023. R.A. Neufeld J.C.K.B.A.

Appearances: Locklyn E. Price and Aidan N. Paul for the Plaintiffs/Applicants Stefan Dimic for the Defendant/Respondent