Milner Scarborough Properties Ltd. v. Tradeworks Interiors Canada Corp., 2013 ONSC 6268

Milner Scarborough Properties Ltd. v. Tradeworks Interiors Canada Corp.

CITATION: Milner Scarborough Properties Ltd. v. Tradeworks Interiors Canada Corp., 2013 ONSC 6268

DIVISIONAL COURT FILE NO.: 273/12

DATE: 20131007

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

MILNER SCARBOROUGH PROPERTIES LTD. Plaintiff (Respondent)

– and –

TRADEWORKS INTERIORS CANADA CORP. Defendant (Appellant)

Vladyslav Shelukhin, for the Plaintiff (Respondent)

Vitali Luchko, for the Defendant (Appellant)

HEARD at Toronto: October 7, 2013

HIMEL J. (orally)

1This is an appeal from the judgment of Deputy Judge L. Ntoukas of the Toronto Small Claims Court dated May 17, 2012 in which she granted judgment to the plaintiff in the amount of $10,155.27 plus interest from October 15, 2010 and post judgment interest and costs of $349.00.

Background

2Tradeworks Interiors Canada Corp. was a commercial tenant at 70 Milner Avenue, Toronto, Ontario, Unit 1. Milner Scarborough Properties Ltd. was the landlord. The landlord sued the tenant for breach of a lease dated May 31, 1999. The premises had been owned by The Prudential Insurance Company of America which entered into a lease on May 31, 1999 with Carpets Forever Ltd. as tenant for a term commencing July 1, 1999 and ending on June 30, 2004. Paragraph 9(k) of the lease provided that the tenant at the expiration of the lease was to surrender the premises “in good and substantial repair and condition, reasonable wear and tear excepted.”

3On October 10, 2001, Prudential sold 70 Milner Avenue to the respondent and assigned the lease to the respondent. On January 14, 2003, the lease was assigned to the appellant effective January 1, 2003. The lease was extended on January 13, 2004 from July 1, 2004, to June 30, 2009.

4The appellant retained Therm Tech Ltd. to do repair work on this property and on the unit at 32 Howden Road, Toronto Ontario. The appellant says in June 2009, Term Tech inspected the HVAC unit, changed the filer, replaced a condenser fan motor and a capacitor and billed the appellant for that work and work on 32 Howden Road. The invoice says the HVAC unit was in good working condition.

5In June 30, 2009, the appellant moved out of the premises. On August 26, 2009, the respondent wrote a letter enclosing an invoice for the cost of restoring the premises in the amount of $4,306 plus a 15% administrative fee and 5% GST. The respondent deducted the security deposit of $2,325.79 and a credit note owed to the appellant of $1,008.78 and sent a bill for $957.27. On December 31, 2009, the respondent sent a second bill for the replacement of the HVAC unit, replacement of the wooden hollow door and the supply and installation of a closer in the amount of $8,760 plus GST. The respondent sued the appellant for the invoices totalling $10,155.27.

6At the trial before the Deputy Judge of the Small Claims Court, both parties were self-represented. The appellants witness was Peter Soldato. The respondents witness was Fraser Paddison who worked as the commercial leasing agent for the respondent and began his employment some time after the respondent purchased the premises from Prudential in 2001. The respondent produced an invoice from Chrena General Contracting for repairs of the premises dated July 30, 2009.

7The trial judge found that the tenant breached the lease by failing to deliver the premises in a good state of repair on expiration of the lease and that included the cost of the HVAC unit. The trial judge did not find the defendant`s evidence was credible.

8The appellant submits that the respondent failed to lead evidence on the state of the premises when Prudential leased them to Carpets Forever, failed to lead evidence concerning certain repairs listed on the invoice or the nature of an administrative fee of 15%, and that the trial judge erred in awarding damages for the full cost of repairs without evidence led on the each point. Further, there was conflicting evidence concerning the HVAC unit which the respondent said needed to be replaced and which the appellant says was in good working order prior to relinquishing the premises. The respondent on appeal argues that the trial judge properly interpreted the lease and assessed the evidence presented by the parties. The respondent argues that the appellant has failed to demonstrate that the trial judge made any findings of fact that were not grounded in the evidence or based the decision on a misapprehension of the evidence and that there were no palpable or overriding errors, no errors of law. The respondent requests the appeal be dismissed.

Decision

9The substance of the appellant`s position is that the trial judge made findings of fact or drew factual inferences in the absence of evidence or based on a misapprehension of evidence. Where an issue concerns factual conclusions of a trial judge, the standard of review is palpable and overriding error: see Housen v. Nikolaisen, 2002 SCC 33, [2002] S.C.J. No. 31 at para. 25.

10With respect to the submissions that the trial judge erred in concluding that the respondent had proven the tenant breached the lease by failing to deliver the premises in a good state of repair and was satisfied that the respondent had proven the extent of the damages, the trial judge had before her documentary evidence including reports, photographs, invoices, accounting documents as well as the evidence of Fraser Paddison concerning the items of the claim. The evidence was essentially unchallenged. I see no palpable or overriding error in the findings of fact and factual conclusions made by the trial judge nor any error in the conclusion that the tenant breached the lease and the breach caused the damages claimed.

11As for the 15% administrative fee, this was not challenged by the appellant at trial. The lease document had provided that, if there were breaches by the tenant under the lease, the landlord had the right to remedy the default and the tenant was required to pay all expenses incurred in remedying the default (see Article 11). The respondent hired a general contractor to do the work and oversaw the repairs. The lease provides that the landlord is entitled to an administrative fee where repairs are done that affect the structure of the premises (see Article 24). There was no evidence before the trial judge that the repairs were done that affected the structure of the premises. The trial judge did not turn her mind to this as it was unchallenged at trial. In light of the provisions of the lease, however, a 15% administrative fee would not be owing for the type of repairs made here as the lease did not provide this. The landlord was not entitled to claim 15%. Accordingly, the amount of $645.90 plus 5% GST should not have been awarded. I find the trial judge made an error with respect to her interpretation of the lease concerning the administrative fee.

12On the issue of whether the trial judge erred in finding a breach of the lease where the tenant failed to remove a mirror fixture, I am satisfied that there was sufficient evidence before the trial judge to conclude that the appellant assumed the lease with a mirror already affixed and was required to remove the mirror when vacating the premises. The trial judge also held that the appellant did not dispute or challenge the claim of the landlord for the cost of the mirror’s removal at trial. There is no basis to find any palpable or overriding error of fact or law on this.

13Finally, with respect to the HVAC unit, the appellant argues that the trial judge misapprehended the evidence of the appellant and made an erroneous finding. The trial judge heard the evidence of the witnesses on this point, accepted the evidence of the respondent that the HVAC unit had to be replaced and the cost of doing so and did not accept the evidence of the appellant concerning an inspection apparently done in June 2009 but with a report dated July 7, 2009 after the appellant vacated the premises. The trial judge did not find this to be credible evidence and it was open to the trial judge to make these findings and draw conclusions on the evidence. In accordance with Article 9 of the lease concerning the tenant’s obligation to repair and replace the HVAC unit if necessary, it was open to the trial judge to conclude as she did that the HVAC unit was in a state of disrepair, that it required replacement and that the landlord was justified in hiring Superior Trade Services to examine it, make recommendations and replace it.

14In summary, the findings of the trial judge shall stand with the exception of the claim for the administrative fee of 15%. The appeal is allowed in part only and the judgment is sustained in the amount of $10,155.27 less $645.90 plus 5% GST.

Costs Submissions

15I have endorsed the back of the Appeal Book, “For oral reasons given, the appeal of the decision of the Deputy Judge is dismissed except for the amount of the administrative fee of $645.90 plus 5% GST. In light of the amounts of this claim, the results obtained, the fact the issues are not complex, I exercise my discretion and fix costs in the amount of $7,000 inclusive of disbursements and HST payable by the appellant to the respondent, an amount I deem fair and reasonable in the circumstances.”