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The Royal Crown Academic School in Toronto is photographed on Jan. 9, 2018.Fred Lum/The Globe and Mail

Foreign students are being falsely promised guaranteed admission to notable Ontario universities by a private Toronto high school, according to a court action launched by the families seeking to recover more than $20,000 each in tuition.

The action in a Toronto small-claims court is moving forward after an Ontario judge ruled last month in a related lawsuit that two students from China who complained about being misled by Royal Crown Academic School did not defame the private institution.

The case offers a window into the competitive nature of private schools, with educators looking to recruit wealthy international families with promises to teach specific skills. Ontario's Auditor-General in 2013 called the province's private-school system "one of the least regulated" in Canada.

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The case, detailed in legal documents, involves two students from China, You Wu and Jiarui Zou, who came to Royal Crown Academic in 2015 and say they paid $23,135 and $21,100, respectively, in tuition and other fees (they say they also paid about $15,000 in accommodation fees). The families of Mr. Wu and Ms. Zou contend in their statement of defence that the Chinese-language brochure guaranteed admission of Royal Crown Academic's students in certain Ontario universities, including York University.

When they discovered there was no relationship, the students left and requested their tuition, but were rejected.

The families hired a paralegal to inquire with York University, but the paralegal was told by a university official that there was no relationship with the private school.

The families launched legal action against Royal Crown in the spring of 2016, in small-claims court. The school countered by filing a statement of claim against the families and the paralegal, saying the letter of inquiry to York University that was part of the court action contained defamatory statements.

But Ontario Superior Court Justice Bernadette Dietrich dismissed the defamation action, saying there was no merit to the case.

"The Brochure, in promoting the School, makes specific references to a 'Guaranteed Enrolment in Three Renowned Universities with Agreement' as well as references to a 'Straight to York University Class' including a photograph from York University and its logo," Justice Dietrich wrote in her decision. "A casual reader of the Brochure could reasonably form an impression that the School had a relationship with York University."

Justice Dietrich added: "I do not attribute any bad faith to the defendants in school stated that its brochure did not claim to have special access to York University making what I find to be a reasonable inquiry of York University as to the existence of any relationship between it and the School. The inquiry was made as part of their investigation and preparation to file their claims against the School in their Small Claims Court actions. Their conduct was not high handed."

Multiple phone calls and e-mails from The Globe and Mail to Royal Crown Academic and its lawyer, Chi-Kun Shi, were not returned.

In its statement of claim, Royal Crown Academic said that its contract with the family stated they do not qualify for a tuition refund. The school stated that its brochure did not claim to have special access to York University, but rather outlined the admission requirements. The school accused the families of misrepresenting its information sheet and hurting its reputation.

"Plaintiff provides the above information as a motivational tool. It informs potential students as to the effort that it will require of them in order to support a successful application for admission to York," according to the statement of claim.

Lawyer Peter Downard, who represented the families and the paralegal, Jing Julie Zhu, declined comment because the case is continuing in small-claims court. He said that the case, however, makes clear that legal professionals acting in their duties for their clients are not to be sued.

In an e-mail to The Globe, York University spokeswoman Barbara Joy acknowledged that the institution did receive a letter from a paralegal acting on behalf of the Royal Crown students.

"We replied that York University did not have any relationship with Royal Crown. If any further infringement takes place, we will contemplate appropriate legal measures," she said.

The wider issue of a lack of regulations in the private-school sector has been the subject of discussion across Canada. Several provinces, including British Columbia and Alberta, partly fund some independent schools and tie the acceptance of taxpayer dollars to a level of accountability, one that includes provincially certified teachers and implementing the provincial curriculum.

In Ontario, private schools do not receive any public funding. Opening an elementary private school in Ontario is as simple as filling out some paperwork, paying an application fee and teaching at least five school-age children. Elementary schools are not inspected, only "validated," which mean inspectors check that basic rules are followed, such as having a principal and some kind of school-wide policy for testing and attendance. The schools do not need to follow the provincial curriculum.

Private high schools that offer an Ontario Secondary School Diploma are inspected by the ministry only to ensure they comply with credit regulations.

Charles Pascal, a professor at the University of Toronto and former deputy minister of education in Ontario, said the lack of regulation is concerning. "The very notion that the school actually sought redress from students who complained and sought return of tuition is further evidence of the lack of effective governance."