COURT FILE NO.: 444/08

DATE: 20091201

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

AL REISMAN LIMITED

Plaintiff/Respondent

• and -

SELLADURAI INDRASENAN

Defendant/Appellant

Jordana Goldlist, for the Plaintiff/ Respondent

Orie H. Niedzviecki, for the Defendant/ Appellant

HEARD at Toronto: December 1, 2009

JANET WILSON J.: (Orally)

1This is an appeal from the decision of Deputy Judge Wolfe of the Small Claims Court dated July 29, 2008. He granted judgment in favour of the plaintiff/landlord in the amount of $10,000.00, which is the statutory limit of the Court, and costs in the amount of $1,500.00. He dismissed the defendant/tenant’s counterclaim for damages.

Background Facts

2The tenant had rented the premises, unit #4, beginning in 1997 and continuing until 2006. The premises were used for his business as a fishmonger.

3In 2004, the occupants of unit #3 complained of water damage in the adjoining unit. The focus of the trial, the claim and the counterclaim was whether the water damage in unit #3 was caused by seepage through the common wall from unit #4 and, if so, whether the tenant is responsible for the damage. Other aspects of the damage claimed flow from this primary issue.

4The tenant acknowledged washing his premises regularly incidental to his occupation but denied that water from his unit caused damage to unit #3.

The Award

5The trial judge awarded various heads of damage to the plaintiff including damage for repairs to unit #3 in the amount of $3,023.00 and costs of the bailiff for distraining the defendant/tenant’s truck when he refused to pay the costs of repairs in the amount of $3,152.39. He also awarded $945.00 for lost rent for two months while the repairs were effected on unit #3. He awarded costs of repairing unit #4 when the tenant left the premises in the amount of $3,528.84. Finally, he also awarded $2,250.00 for pro rata adjustments for tax and water credits going back to 1997. The amounts awarded by the trial judge exceeded the ten thousand dollar limit and the parties agreed to be bound by the Small Claims Court limit.

6The tenant claimed various amounts for business losses associated with a disagreement about the water meter account as well as costs of borrowing a truck when his truck was improperly distrained by the landlord. The trial judge refused to allow the defendant to submit documents in evidence to support his counterclaim, as numerous requests had been made in the past for documentary disclosure to no avail.

Standard of Review

7The standard of review of a trial judge’s decision is confirmed in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. An error law is reviewable on a standard of correctness. Errors of fact or mixed fact and law are reviewable by an appellate court on a standard of palpable or overriding error.

Conclusions

8I conclude that the trial judge failed to consider important facts cumulatively constituting a palpable and overriding error. The trial judge did not consider adequately or at all the following facts:

(i) The landlord refused the tenant’s request to inspect the unit #3 premises as evidenced in a letter written by his counsel. The tenant was not given the opportunity to ascertain whether the source of the water problem in unit #3 was emanating from unit #4.

(ii) The tenant retained an expert who inspected unit #4 and concluded that there was no evidence of moisture damage or leakage to unit #3. The person who conducted the inspection was not allowed to inspect unit #3. The trial judge discounted this evidence as there was no CV attached to the expert report to confirm the credentials of the person who conducted the inspection. I note that the trial took place between January and July 2008 and the trial judge reserved his decision. It would have been appropriate in these circumstances to have allowed the tenant’s expert to file a CV.

(iii) The landlord’s evidence as to the source of the water was provided by the property manager, who is a mechanical engineer but has no special expertise about water issues. To hold a tenant responsible for damages to an adjoining unit requires clear, cogent evidence from an independent witness. The evidence of the property manager appears to fall short of the mark. The tenant notes that he had been in the premises, unit #4, for eight years before any complaint was made about water damage. Why the problem in 2004?

(iv) There was evidence that shortly after the repairs were completed on unit #3, there were further problems of water leakage in that unit. The cause of the further problems apparently was a pipe that had been disconnected by a former tenant. It was the tenant’s theory that this was the cause of the problem in unit #3 all along. This fact was not adequately canvassed in the trial judge’s decision. Although the bill for the repair of the disconnected pipe was from after the repairs were conducted in unit #3, the evidence appears to be undisputed that the pipes had been disconnected for some indeterminate period of time in the past.

(v) The trial judge accepted the landlord’s claim for repairs to unit #4 when the tenant vacated the premises. This included various work performed that was not detailed in any way.

It was the tenant’s evidence that the only work done on the premises since 1997, when he took possession, was painting that was conducted and paid for by the tenant. The landlord had done no routine maintenance on the unit for nine years. There was no evidence before the Court as to the condition of the premises in 1997 when the tenant took the possession of the premises, nor was there any evidence or photographs of the condition of the unit when the tenant vacated. The tenant’s evidence was that there was no change in the condition of the premises over the period of the lease.

Without cogent evidence that the tenant was in breach of his lease, the landlord could not reasonably require the tenant to be responsible for the routine repairs or maintenance to prepare the premises for the new tenants. There is no doubt that work was performed on unit #4, but it is not at all clear that the tenant is responsible for paying for this work.

(vi) The claim for two months’ rent for the relatively modest repairs that were conducted on unit #4 appears to be excessive. The landlord had a new tenant ready to take the premises immediately upon the defendant vacating the premises.

9There is a further problem. It appears that the claim for damages for bailiff costs in the amount of $3,152.39 is not a proper claim.

10When the tenant refused to pay for the repairs, the landlord decided to seize the tenant’s truck, which he used for business purposes, while the truck was parked in the common area. It appears that the distraining of the truck was illegal for two reasons. First, it appears to conflict with s. 47 of the Commercial Tenancies Act, R.S.O. 1990, c. L.7, which the tenant and landlord cannot contract out of in the terms of their lease. Second, clauses 7 and 8 of the Lease Agreement entered into between the parties confirm that the right to distrain is limited to “goods, inventory and chattels” located on the premises. The premises are defined in the lease as a twelve hundred square foot rental unit. That definition cannot reasonably also include the common areas including the parking lot.

11For these reasons, the appeal is allowed. The decision of the trial judge with respect to the claim and counterclaim is set aside, as well as the costs decision. All matters may be reheard by another judge of the Small Claims Court. I note that new arguments were made by counsel on appeal, such as the issue of the legality of the distraint. In the circumstances a new trial on all issues on both the claim and the counterclaim is the fairest remedy.

Costs

12Costs are payable by the landlord to the defendant/tenant in the amount of $1,500.00, plus disbursements in the amount of $980.00 for this appeal.

JANET WILSON J.

Date of Reasons for Judgment: December 1, 2009

Date of Release: December 7, 2009

COURT FILE NO.: 444/08

DATE: 20091201

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT