COURT OF APPEAL FOR ONTARIO

DATE: 20061114

DOCKET: C42888

RE: ARC’HAIRTEXTURE VISIBLE CHANGES LTD. and RINALDO PAONESSA (Plaintiff/Defendants by Counterclaim (Respondents)) – and – 419701 ONTARIO LIMITED and GIANPIERO CESCON (Defendant/Plaintiffs by Counterclaim (Appellants))

BEFORE: MOLDAVER, SIMMONS AND GILLESE JJ.A.

COUNSEL: James P. McReynolds for the appellants Gregory T.A. Gryguc for the respondent

HEARD: November 10, 2006

On appeal from the judgment of Justice Janet M. Wilson of the Superior Court of Justice dated December 10, 2004.

A P P E A L B O O K E N D O R S E M E N T

[1] In our view, it was open to the trial judge to conclude that it was implicit in the arrangements between the parties that all of the attributes of a tenancy at will would not apply to their relationship. Further, since it is clear that the relationship between the parties ended prematurely, it was open to the trial judge to conduct an accounting.

[2] In our view however, the trial judge erred in carrying out the accounting by affording the respondent double recovery. In this respect, the trial judge gave the respondent credit for a five-month rent-free period, but, at the same time, required the appellant to provide the respondent with what she calculated was full compensation for the renovations the respondent carried out. We conclude that to the extent that the respondent is entitled to full compensation for its renovations, it should pay reasonable rent for the entire period during which it occupied the premises. In all of the circumstances, and, in particular, taking account of the fact that the respondent suffered some disruption during the early months of its operations at the new premises, we would order that the respondent pay its share of utilities for the period August through to and including December 2001 plus rent at the rate of $1000.00 per month for the same period.

[3] Apart from the issue of costs, the remaining issues raised by the appellant address findings of fact made by the trial judge. As the appellant has not demonstrated a palpable and overriding error in the trial judge's findings of fact, we would not give effect to those grounds of appeal.

[4] On the issue of costs, the trial judge concluded that until the chattels were returned, recovery in excess of $50,000.00 was possible and that the respondent should not therefore be deprived of reasonable costs. We see no error in this exercise of the trial judge's discretion.

[5] Accordingly, the appeal is allowed in part, and paragraph one of the judgment is varied so that the amount payable by the appellant (the defendant) is reduced by $8,822.57.

[6] Even though the appellant achieved some success on this appeal, the respondent was largely successful in upholding the judgment below. Accordingly, costs of the appeal are to the respondent in the amount requested, namely $1750.00 plus disbursements and G.S.T.