Court File and Parties

CITATION: Direct Health v. 1583812 Ontario, 2018 ONSC 2290

DIVISIONAL COURT FILE NO.: 32/16

DATE: 20180410

ONTARIO SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

RE: Direct Health Solutions (2) Inc. c.o.b. as Windsor Endoscopy Plaintiff/Respondent

-and-

1583812 Ontario Ltd. also known as 158317 Ontario Ltd. and 158312 Ontario Ltd. Defendant/Appellant

BEFORE: Harper, Myers, and Newton JJ.

COUNSEL: Sachit Tatavarti and Rod R. Refcio, Lawyers for the Defendant/Appellant

Rodney M. Godard and Colin Bondy, Lawyers for the Plaintiff/Respondent

HEARD at London: April 9, 2018

ENDORSEMENT

BY THE COURT

Background

[1] By Reasons for Decision dated May 24, 2016, Thomas J. found that the plaintiff tenant owed the defendant landlord the sum of $10,499.83 on a claim by the landlord of closer to $100,000. The appellant challenges the holdings by Thomas J. that the tenant properly terminated the residential lease and that the landlord was not entitled to charge a monthly administrative fee as part of common area and maintenance expenses.

[2] The interpretation of a lease is a question of mixed fact and law that is subject to deference by an appellate court. Sattva Capital Corp. v Creston Moly Corp, 2014 SCC 53, [2014] 2 SCR 633.

The Tenant Provided Notice in the Manner Required by the Residential Lease

[3] The residential lease provides that notice is to be provided to the landlord in writing by mail to a specified address. The landlord has the right under the lease to notify the tenant of a change in its address for service. The landlord argues that Thomas J. erred in finding that the tenant properly terminated the residential lease by giving notice to the landlord at the address set out in the lease. The tenant had been dealing with the landlord’s property manager at another address very close to the time that the tenant sent the notice of termination. The landlord argues that the tenant should have sent the notice to the property manager with whom it was dealing and that the tenant should have known that the landlord was not likely to receive the notice if it was sent to the address for service set out in the lease.

[4] The landlord recites no case law for the proposition that notice given in the manner required by the written terms of a contract is insufficient or non-compliant. The landlord had the ability to update its address if it wished to do so. It chose not to and instead relied on mail forwarding that it says was spotty.

[5] Reversing the facts, had the tenant sent its notice to the property manager rather than to the address set out in the lease, it is self-evident that the landlord would have had a good argument that tenant’s notice did not comply with the contract.

[6] In paras. 41 to 47 of his Reasons for Decision, Thomas J. found that notice was sent pursuant to the lease and that notice was effective under the lease. He set out clearly the basis for his findings. There was abundant evidence before him supporting the facts found and the inferences drawn by the judge.

[7] We see no palpable and overriding error in the trial judge’s findings on this issue.

The Lease does not Authorize the Landlord to Charge Administrative Expenses

[8] The landlord seeks recovery of administrative charges that it levied under the commercial lease in relation to its maintenance, payment of invoices, bookkeeping, and correspondence with the tenant. The commercial lease required the tenant to pay “utility bills, property taxes and other common costs that may arise from time to time.” The property manager testified that administrative costs are a standard business practice associated with such CAM expenses. But the property manager was not qualified as an expert witness. There was no admissible evidence before Thomas J. of a notorious industry practice that might qualify as an implied term of the lease. Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 SCR 574, 1989 34 (SCC). Without an express or implied term of the lease requiring payment of administrative fees, we see no palpable and overriding error, or any error at all, in the trial judge’s interpretation that the requirement to pay common area and maintenance expenses did not entitle the landlord to charge unilaterally an unspecified administrative fee at a quantum of its choice.

[9] If the landlord wished to charge an administrative fee on top of seeking indemnity for CAM expenses actually incurred, it could have negotiated a provision in the lease entitling it to do so.

Outcome

[10] The respondent has been successful and is entitled to its costs on a partial indemnity basis. We have reviewed the outline of costs submitted by counsel for the appellant and the respondent. The appellant’s outline shows that the appellant’s counsel’s partial indemnity costs are claimed at $9,817.35. The respondent’s partial indemnity costs are claimed at $17,487.17

[11] Having regard to all of the factors set out in Rule 57, and having regard to what the appellant’s costs are, we find that the costs claimed by the respondent on a partial indemnity basis are reasonable.

[12] The appeal is therefore dismissed. The tenant is entitled to its costs of the appeal on a partial indemnity basis that we fix in the amount of $15,000 all-inclusive.

”Justice R. J. Harper”

Harper J.

“Justice F. Myers”

Myers J.

“Justice D. Newton”

Newton J.

Date: April 10, 2018