The Superior Court of Justice recently considered a novel claim involving allegations of online defamation in the competitive world of real estate brokerages. The case serves as a warning to brokers of record who may face personal liability for the online actions of employees of their brokerages.
The plaintiff in Athanasiou v. King was a real estate agent. She claimed she was defamed by social media posts made by two other real estate agents: BK and NA. BK worked at the defendant brokerage, Century 21 Millennium Inc. Brokerage (“Century 21”), while NA worked at the defendant brokerage, Real Broker Ontario Ltd. (“Real Broker”). The plaintiff sued Century 21 and Real Broker, as well as their respective brokers of record personally, and a different broker and branch manager at Century 21.
The plaintiff, who was active on social media, made various allegations of defamation by BK and NA in relation to various social media accounts, including Twitter, Instagram, and TikTok. Among other things, the plaintiff claimed that BK and NA had made allegations, either directly or indirectly, on social media that they had been harassed and bullied by the plaintiff.
The plaintiff alleged that, at the time they made the offensive posts and comments, BK and NA had been acting within the scope of their employment and performing duties related to their employment. The plaintiff claimed that the brokers of record and manager “had a duty to maintain professional standards among their agents and to address complaints diligently and effectively, a duty which they failed to uphold.” The plaintiff also claimed that, when notified about the alleged defamation, the brokers had failed to investigate or resolve the issue. As such, the plaintiff pleaded that the brokers and manager were liable in negligence.
The brokers, manager, and brokerages brought a motion to strike the plaintiff’s claim against them. The primary issue before the Court was therefore whether it was “plain and obvious” that there was no “reasonable prospect” that the claim against those individuals and the brokerages could succeed.
The Court began its analysis with reference to the requirements that must be met for a plaintiff to establish a defendant’s negligence. First, it must be shown that the defendant owed the plaintiff a “duty of care.” Second, the defendant must have breached the applicable standard of care. Third, the plaintiff must have suffered some damage. Lastly, the damage suffered must have been caused by the defendant’s breach. The Court focused on the first of these criteria, since if the defendants had not owed the plaintiff a duty of care, they could not be held liable in negligence.
The Court noted that, in determining if a duty of care was owed, it had to consider whether the relationship between the parties fell within a duty of care that the courts had previously recognized. If it did not, then it had to apply what is known as the “Anns/Cooper” test to decide whether a new duty of care should be found to exist in the circumstances.
The Court concluded that the duty of care alleged in this particular case did not fit within an established category, as no previous cases had considered whether “an employer with an employee using social media to promote its business owes a duty of care to a competing influencer.” It therefore applied the Anns/Cooper test to determine if such a duty might be recognized.
The Anns/Cooper test involves two stages of analysis. At the first stage, a court must find whether a prima facie duty of care exists between the parties by determining whether the harm suffered by the plaintiff was “a reasonably foreseeable consequence of the defendant’s conduct.” As well, the court must determine whether there is proximity between the parties – that is, whether the relationship between them is sufficiently “close and direct” to make it “just and fair having regard to that relationship to impose a duty of care in law upon the defendant” (see also Nelson (City) v. Marchi).
The Court in Athanasiou referenced earlier case law in noting that situations giving rise to a “positive duty to act” usually involve the material implication of a defendant in “creating or controlling a risk to which others are invited, the reasonable expectations of those who accept the invitation, and the autonomy of the individuals affected by the positive duties the plaintiff seeks to impose” (see Childs v. Desormeaux).
If a prima facie duty of care is found to exist, the court must then move on to the second stage of the Anns/Cooper test and ask whether there are policy reasons outside that relationship that might negate the duty. This stage involves considering the effect imposing such a duty of care might have on society and the legal system more broadly.
In applying the Anns/Cooper test to the situation, the Court in Athanasiou noted that the defendant brokers and manager had had BK and NA “actively use social media to promote the commercial activities of their respective brokerages and compete for clients as part of their employment.” As such, they had arguably “created, controlled, and engaged in a commercial endeavour with the intention of attracting other realtors … to participate in online exchanges.”
On this basis, the Court concluded that a special relationship of proximity arguably arose that would have required the defendant brokers and manager “to act with care and take reasonable precautions to avoid or minimize the associated risks of this activity from materializing, and to take appropriate action if the risk materialized.”
The Court also found that it was arguably foreseeable that the alleged failures by the brokers and manager to put policies in place, to impose professional standards on the activities of their real estate agents on social media, or to investigate the plaintiff’s complaints and take corrective action “materially increased the risk of harm to the plaintiff.” As such, a prima facie duty of care could arguably be grounded in the plaintiff’s claim. The Court also found that it was not plain and obvious that policy considerations should prevent the claim from proceeding.
In conclusion, the Court found that the plaintiff’s negligence claims against the brokers and manager should be permitted to continue.
Online conduct by employees can create unexpected legal exposure for real estate brokerages and their leadership. Brokers of record should understand how courts may assess duties of care, supervision obligations, and risk management in the digital space. The innovative professional liability lawyers at Milosevic & Associates provide assertive representation and dynamic legal solutions in complex commercial litigation and professional negligence matters, including defamation claims. To book a confidential consultation, please contact us online or call (416) 916-1387.
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