1400 Castlefield Road Inc. v. Threadcount Inc. et al.

CITATION: 1400 Castlefield Road Inc. v. Threadcount Inc. et al. 2015 ONSC 1751

DIVISIONAL COURT FILE NO.: 410/14

DATE: 20150324

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: 1400 Castlefield Road Inc., Plaintiff Respondent AND: Threadcount Inc. and Ceasar’s Fabrics Inc., Defendants/Appellants

BEFORE: Lederman J.

COUNSEL: Venus Sayed, for the Appellants Adam Ezer, for the Respondent

HEARD at Toronto: March 16, 2015

ENDORSEMENT

[1] The appellants (“Threadcount”) appeal from the judgment of Deputy Judge Ferranti of the Toronto Small Claims Court wherein he awarded the respondent, 1400 Castlefield Road Inc. (“the landlord”) the amount of $10,747.65 broken down as follows: for rent arrears, $2,378.65; for repairs $1,844.00; for the misappropriation of the glass doors which he found to be true fixtures, $5,400.00; for general cleanup, $1,125.00.

[2] The landlord cross-appeals in relation to the removal of track lighting that was found by the trial judge to constitute chattels, or alternatively, trade fixtures. The landlord seeks damages of $4,800.00 for the lighting allegedly misappropriated by Threadcount.

Standard of Review

[3] The findings of the trial judge were those of fact or mixed fact and law and as such they should not be reversed by an appellate court unless it can be established that the trial judge made some palpable and overriding error which affected his assessment of the facts.

Rent Arrears

[4] Threadcount submitted that the trial judge made an error in finding that it owed one half month’s rent in the amount of $2,378.65. It submitted that it would not be responsible for rent payments even if it might still have an obligation to remove garbage from the property after the lease term. In other words, the obligation to remove refuse might survive the end of the lease agreement but it does not extend the term of the lease agreement and does not create an obligation to pay rent for such a period.

[5] Threadcount submitted that its move from the premises was delayed, at maximum, by four days due to the landlord’s failed elevator service and that it was no longer permitted on the premises and the lease had come to an end and was not extended by either party.

[6] The trial judge found that at the expiration of the lease on October 31, 2011, Threadcount left behind some refuse that needed to be moved out of the leased space and was not able to transfer the premises to the landlord in a vacant state until the middle of November, 2011, by which time the landlord had removed the refuse. Furthermore, because certain damage had to be repaired as a result of the removal of fixtures, Threadcount was not able to return the space to the plaintiff in the same condition as it received it, wear and tear excepted, until mid-November.

[7] Because the space was not returned to the landlord in a suitable state by the end of October 2011, Threadcount was in the position of being an overholding tenant and it was appropriate for the trial judge to award rent for the period until the premises were returned in a vacant state and the necessary repairs made to make the property re-leasable. In this regard, no palpable or overriding error was made by the trial judge.

Repairs

[8] The trial judge found that the landlord was entitled to damages for repairs to the walls and floors and toilet.

[9] With respect to the floors, there were bolts protruding from the floor. Threadcount submits that they were put there by the landlord and for that reason it did not interfere with them as it was Threadcount’s understanding that without such bolts the space would not have electricity. The photos of the bolts that were before the trial judge do not indicate that they serve the purpose of any electrical conduit but rather indicate that they were there to support Threadcount’s shelving and cabinetry structures.

[10] The photos that were placed into evidence also clearly indicate damage to the walls.

[11] No issue was made by Threadcount as to the necessity for the installation of the toilet in question.

[12] An estimate was provided at trial for the cost of the removal of the anchor floor bolts, the repair and patch work to the damaged showroom walls and the installation of the toilet.

[13] The estimate was made by Max Contracting. There is a familial relationship between the principal of Max Contracting and the property manager (Brian Soares) of the landlord, and Threadcount submits that the trial judge failed to consider whether quotations for labour and materials provided by Max Contracting were inflated due to this relationship. In any event, it was Real Space Management Group, a third party asset manager, engaged by the landlord who was involved in hiring all the trades and service companies to do the work on the property. Chris Holder of Real Space Management Group, testified that he was comfortable with Max Contracting’s pricing, having regard to comparables. There is no basis to suggest that the relationship between Max Contracting and Brian Soares had any influence in those decisions.

[14] Accordingly, there was evidence that the repairs were necessary and of their estimated cost. For its part, Threadcount led no evidence as to the appropriate quantum for such repairs.

[15] Accordingly, no palpable and overriding error was made by the trial judge with respect to this issue.

Glass Doors

[16] The trial judge found that the glass doors were prima facie fixtures. They were not affixed to the realty by their own weight. Nor was there any intention on the part of the parties to preserve the chattel nature of the glass doors. There was evidence of photos of similar doors to show that the doors in question were anchored to the floor and to the building and siliconed and anchored to the door frame. Otherwise, the doors could not stand on their own.

[17] The extent of the damage on removal, as set out in the testimony and photos, substantiates the degree of attachment to the realty and the conclusion that the glass doors were true fixtures. Given the substantial degree of annexation and the object of such annexation, as patently demonstrated, the prima facie character of the glass doors as fixtures was not altered.

[18] The value of the doors was not challenged. Threadcount had purchased them initially and could have adduced evidence of another value but it did not do so.

[19] There is evidence to support the trial judge’s conclusion and he made no palpable or overriding error on this issue.

Clean-up Costs

[20] From the e-mail exchange between the parties, it could be implied that some of the refuse that needed to be removed belonged to Threadcount. Thus, there was evidence that, although a large number of items was left behind by a prior tenant, Horsefeathers Furniture and Design Inc. in storage lockers, some refuse was left by Threadcount on the premises.

[21] Given that evidence, the trial judge made no palpable or overriding error in awarding some damages for the clean-up against Threadcount.

Cross Appeal

[22] The landlord submits that the trial judge erred in finding that the track lighting in question constituted chattels when in fact they were true fixtures, bolted to the ceiling of the building and hard wired into the building. It submits that the trial judge erred in finding that the track lighting was “equivalent to floor lamps in terms of attachment” and were “attached solely by its own weight and therefore…chattels”.

[23] The landlord further submits that the track lighting could not amount to trade fixtures since there was nothing objective in all of the evidence, patent for everyone to see, that the track lighting was installed on a temporary basis merely to serve the tenant’s purposes and convenience.

[24] The landlord submits that when one looks at the evidence of draft diagrams and photos of the track lighting, it is abundantly clear that such lighting was uniformly placed throughout the premises both within and outside Threadcount’s leased space and was therefore installed not on a temporary basis merely to serve the trade purposes of Threadcount.

[25] The evidence given by Natalie Mamann on behalf of Threadcount provides a different account. She testified that the lighting in question as depicted in the photos, although similar, was not the lighting that had been installed in Threadcount’s space; that the photos presented at trial by the landlord did not reflect the actual lighting that was installed; and that the drawings that were presented were draft only and did not go forward. She testified that every independent dealer on the premises did their own lighting tracks.

[26] It was open to the trial judge to accept Natalie Mamann’s evidence on this issue and conclude that the track lighting was needed for the better display of Threadcount’s merchandise, that they serve precisely that purpose, and as such they were trade fixtures that Threadcount had a right to remove from the premises.

[27] On this basis, even if the trial judge was incorrect in concluding that the track lighting was not a true fixture, I see no palpable or overriding error made by the trial judge wherein he found, on the evidence, that the track lighting to be a removable trade fixture.

Conclusion

[28] For these reasons, both the appeal and cross appeal are dismissed.

[29] Given the small amounts at issue, the parties are encouraged to agree as to costs of the appeal and cross-appeal. If unable to do so, they may make brief written submissions within 15 days.

Lederman J.

Date: March 24, 2015