Citation: Asif v. Apollo Convention Centre, 2018 ONSC 5671

COURT FILE NO.: DC-17-34 DATE: 20180926

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

Muhammad Asif Appellant (Plaintiff)

– and –

225347 Ontario Inc., o/a Apollo Convention Centre Respondent (Defendant)

Counsel: S. Siddiqui, for the Appellant (Plaintiff) J. MacDonald, for the Respondent (Defendant)

HEARD: September 14, 2018

REASONS FOR JUDGMENT

PETERSEN J.

OVERVIEW

[1] The Appellant, Muhammed Asif, brought an action in Small Claims Court against Apollo Convention Centre alleging that false, misleading and deceptive representations were made to him by Apollo in connection with the rental of a banquet hall for his son’s wedding reception. The action was framed in breach of contract. Mr. Asif sought damages in the amount of $25,000 for economic loss and for mental distress. Apollo denied the allegations and advanced a counter-claim for damages in the amount of $5,759.60 for monies owed to it pursuant to the parties’ contract.

[2] Deputy Judge Martel dismissed Mr. Asif’s claim and granted judgement to Apollo against Mr. Asif for $5,759.60, with pre-judgement and post-judgement interest. This is an appeal from that decision dated February 23, 2017.

[3] The grounds for appeal are (i) that Deputy Judge Martel’s Reasons for Decision include palpable and overriding errors of fact and (ii) that she misapplied the law of mitigation by holding that Apollo had satisfied its duty to mitigate despite showing no positive steps taken.

[4] For the reasons set out below, I have concluded that there is no merit to either of these grounds for appeal.

CHRONOLOGY OF KEY FACTS

[5] The following brief summary of key facts will assist in providing context for my reasons.

[6] Mr. Asif’s son was engaged to be married to the daughter of a third party named Amjad Ali.

[7] On October 23, 2013, Mr. Ali contracted with Apollo for the rental of a banquet hall for 200 guests to host a wedding reception for his daughter and Mr. Asif’s son. Apollo has four banquet halls of different sizes. Mr. Ali contracted for Hall D and paid a deposit of $1,150 toward the total function cost of $7,000, plus HST. The balance of the cost was due 10 days prior to the wedding, which was scheduled for June 13, 2014.

[8] The contract contained cancellation provisions that are standard in the banquet hall business, including a term that 70% of the total function cost would be charged in the event of cancellation between one and four months prior to the function and 80% would be charged in the event of cancellation less than one month prior to the function.

[9] On February 3, 2014, another third party, Ms. Nida Javaid, signed a contract with Apollo for her wedding reception on June 13, 2014. The contract provided that the Javaid function, with 300 guests, would take place in Halls B and C. On February 8, 2014, the Javaid contract was amended to Halls C and D. This change in Halls was required to accommodate the number of guests attending the Javaid function. Apollo decided to change the Ali function from Hall D to Hall A in order to accommodate the Javaid function, but it did not advise Mr. Ali of this change.

[10] The engagement between Mr. Ali’s daughter and Mr. Asif’s son was terminated. Mr. Ali and Mr. Asif met with Apollo on or about March 19, 2014 to discuss the situation. Mr. Asif agreed to assume the contract that Mr. Ali had signed for the June 13, 2014 booking. Mr. Asif intended to hold a wedding reception on that date for his son and a different bride.

[11] Mr. Asif was not advised, when he assume Mr. Ali’s contract on March 19, 2014, that Hall D had been rented to Ms. Javaid and that his function had been moved to Hall A. At some point, the letter “D” identifying the Hall on Mr. Asif’s assigned contract was changed by Apollo to an “A”, apparently without his knowledge.

[12] As it turned out, the June 13th date was not suitable to the new bride, so Mr. Asif attended Apollo again on March 28, 2014 and cancelled the banquet hall booking. He then became liable for 70% of the total function cost pursuant to the terms of cancellation in his contract with Apollo.

[13] Mr. Asif paid the cancellation fee of $5,037.00. The memo line on his cheque to Apollo reads: “Hall ‘D’ 70% cancellation -- June 13, 2014 – Friday (D)”. Mr. Asif negotiated a written agreement with Apollo that the cancellation fee would be refunded to him if Apollo obtained a booking for “another function” on the June 13, 2014 date.

[14] Mr. Asif then booked Hall A for 200 guests on July 30, 2014 to host his son’s wedding. He paid a $1,000 deposit for that new booking and agreed to identical cancellation provisions as the first contract that he had assumed from Mr. Ali. Apollo agreed to a discounted total function cost of $6,150.00 plus HST for the July 30, 2014 booking.

[15] The Javaid wedding reception was held in Halls C and D on June 13, 2014. Hall A -- which was to be occupied by the Asif wedding reception -- sat empty, resulting in lost revenue for Apollo.

[16] Mr. Asif learned that Hall D was occupied (by the Javaid reception) on June 13, 2014. He took the position at trial that Apollo was required to refund the cancellation fee for the June 13, 2014 booking based on the parties’ March 28, 2014 agreement, because he had contracted for Hall D and “another function” was held in Hall D on June 13, 2014. Deputy Judge Martel rejected this position. She interpreted the March 28, 2014 agreement to mean that Apollo would refund Mr. Asif the cancellation fee if a new function – not one already booked at the time of the Asif contract – was booked for June 13, 2014. She held that this was the only common sense interpretation of the terms upon which Apollo agreed to refund Mr. Asif’s cancellation fee because only a new booking would mean that Apollo had not sustained any business loss as a result of Mr. Asif’s late cancellation.

[17] The Asif wedding reception was not held at Apollo. The booking was cancelled by Mr. Asif on or about July 19, 2014 after a dispute arose between Mr. Asif and Apollo regarding the outstanding amount of money owed to confirm the July 30, 2014 booking. Mr. Asif claimed that Apollo had verbally agreed to apply the cancellation fee for the June 13, 2014 booking to the balance owing for the July 30, 2014 booking. When Apollo refused to honour this alleged verbal agreement, Mr. Asif decided to book another venue for his son’s wedding.

[18] At trial, Apollo argued successfully that it was entitled to keep the money paid by Mr. Asif for cancellation of the June 13, 2014 booking and was also entitled to an 80% cancellation fee for the late cancellation of the July 30, 2014 booking.

[19] The Asif wedding reception was held at a different banquet hall on July 30, 2014.

ERRORS OF FACT

[20] Having reviewed the decision under appeal, the Appeal Books and the parties’ submissions, I find that any factual errors contained in Deputy Judge Martel’s Reasons were inconsequential to the outcome of the case.

[21] There were three errors of fact identified by Mr. Asif in his submissions.

[22] First, Deputy Judge Martel misquoted one of the Exhibits in paragraph 12 of her Reasons for Decision. The Exhibit in question was the assignment of Mr. Ali’s contract with Apollo to Mr. Asif in March 2014. The parties signed a handwritten amendment to Mr. Ali’s original contract stating that the deposit paid by Mr. Ali to Apollo would be “transferred to ASIF from AMJAD”. In reproducing the terms of this agreement, Judge Martel incorrectly wrote that the deposit was “transferred from Asif to Amjad”. This appears to have been a simple typographical error. The rest of her Reasons for Decision demonstrate that she understood the deposit was transferred to Mr. Asif when he assumed the contract from Mr. Ali, rather than the other way around. She did not misapprehend a material fact.

[23] Second, Deputy Judge Martel found that the “real reason” for Mr. Asif’s lawsuit was that he felt angered when he learned that Hall D was occupied by the Javaid function on June 13, 2014. Apollo had not advised him of the change of his reception to Hall A, or of the Javaid booking in Hall D, so he naturally felt aggrieved when he found out that he paid a cancellation fee for Hall D, which was already booked for another function. Mr. Asif argues that this finding by the Small Claims Court judge constitutes an error of fact because his evidence was that he worked out a verbal arrangement with Apollo to have the cancellation fee for the July 13, 2014 booking applied to the balance owing for the July 30, 2014 booking, so he had no reason to be angry with (or to sue) Apollo until Apollo later resiled from its verbal agreement with him.

[24] Deputy Judge Martel did not misapprehend the facts relating to this issue. Rather, she rejected the Appellant’s evidence and found that there was no verbal agreement to apply the June 13th cancellation fee to the July 30th booking.

[25] Even if I were to find that this was an error of fact, it would be inconsequential because the motivation for Mr. Asif’s lawsuit had no bearing on the outcome of the case.

[26] Third, Deputy Judge Martel incorrectly stated at paragraph 17 of her Reasons for Decision that the Javaid function was booked “before the Ali function, which became the Asif function.” In fact, the Ali function was booked first (October 23, 2013), then the Javaid function was booked (February 3, 2014), then the Ali function became the Asif function (March 19, 2014). However, this factual error had no bearing on the outcome of the case. The sequence of events was such that the Javaid function was already booked on March 19, 2014, when Mr. Asif assumed Mr. Ali’s contract, and on March 28, 2014, when Apollo agreed that it would refund Mr. Asif’s cancellation fee if another (new) booking was made for June 13, 2014. Based on Deputy Judge Martel’s interpretation of the agreement (which is not challenged in this appeal), Mr. Asif is not entitled to a refund of the cancellation fee based on these facts.

[27] For the above reasons, I conclude that there are no palpable and overriding errors in Deputy Judge Martel’s decision that constitute grounds for appeal.

ERROR OF LAW

[28] Mr. Asif submits that Deputy Judge Martel committed a grievous error of law when she made the following ruling:

It is trite law that a party seeking damages has an obligation to mitigate those damages. The plaintiffs take the position that Apollo did nothing to mitigate its damages. I do not agree. I accept the evidence of the defendants that these functions are booked well in advance and in this instance the plaintiff cancelled the function less than 30 days before the scheduled date. There is absolutely no evidence that any potential customers approached Apollo inquiring as to the availability of Hall A on July 30th and that Apollo refused these customers. Accordingly, I have determined that Mr. Asif does in fact owe the cancellation fee to Apollo for cancelling the June 13th function.

[29] Mr. Asif argues that the Deputy Judge improperly reversed the onus of proof. He submits that the onus was on Apollo to show its efforts to mitigate, that the evidence establishes Apollo took no active steps to mitigate, and that it was wrong in law to require him to prove the existence of potential customers who would have booked a hall on June 13th. Mr. Asif urges this Court to reverse the Deputy’s Judge’s decision and find that Apollo cannot recover its losses because of its failure to mitigate.

[30] It is a well-settled principle of law that a successful litigant cannot obtain damages for losses that could have been avoided by taking reasonable steps to mitigate. The rationale underlying this principle is that “[l]osses that could reasonably have been avoided are, in effect, caused by the plaintiff’s inactions, rather than the defendant’s wrong”: BC v Canadian Forest Products Ltd., 2004 SCC 38, [2004] 2 S.C.R. 74 at para.176.

[31] In this case, Apollo (the defendant) was successful in a counter-claim against Mr. Asif for breach of contract. Apollo sought to recover damages for its losses caused by the breach. Apollo therefore had a duty to mitigate its losses by taking reasonable steps to try to secure another function to replace the cancelled Asif function on the June 13th date. Having a duty to mitigate is not, however, the same thing as having the onus to prove that reasonable attempts at mitigation were undertaken and were not successful, or to prove that no reasonable attempts could have been successful. Apollo had a duty to mitigate, but Mr. Asif – the party who alleged a failure to mitigate -- had the onus of proof with respect to mitigation.

[32] The onus with respect to mitigation was addressed at length by the Supreme Court of Canada in Southcott Estates Inc. v. Toronto Catholic School Board, 2012 SCC 51, [2012] 2 S.C.R. 675. In that case, the plaintiff was a developer that sued a school board for breach of a contract of purchase and sale. The plaintiff had been incorporated for the sole purpose of purchasing and developing a property owned by the school board. The plaintiff was seeking an order for specific performance and admitted that it took no steps to mitigate its losses. At trial, the school board was found to have breached the contract. The trial judge held that specific performance was not an appropriate remedy and concluded that the plaintiff was entitled to damages for losses caused by the school board’s wrongful conduct. The judge found that the school board had not discharged its onus of proving that the plaintiff failed to take advantage of a reasonable opportunity to mitigate its losses. The judge concluded that there was no evidence of comparable properties available for sale that could have been profitably developed by the plaintiff.

[33] The trial judge’s decision was reversed on appeal and the award of damages was set aside. The Ontario Court of Appeal held that the trial judge erred in law in finding that the school board failed to prove the plaintiff could have mitigated its losses. The Court of Appeal found that the plaintiff’s admission that it took no steps to mitigate was sufficient to satisfy the school board’s onus and to shift the evidentiary onus to the plaintiff to demonstrate that, even if it had attempted to mitigate, it could not have done so.

[34] An appeal to the Supreme Court of Canada was dismissed on the basis that the trial judge erred in failing to consider relevant evidence and in concluding that the plaintiff could not have reasonably avoided its losses. However, on the issue of onus with respect to mitigation, the Supreme Court rejected the “shifting onus” approach adopted by the Ontario Court of Appeal, stating that “it would be an error to suggest that the defendant did not have the burden of showing that mitigation was possible even where the plaintiff made no attempt to do so”: Southcott Estates, at para.46.

[35] In its reasons for judgement, the Supreme Court held that the burden of proof with respect to mitigation is always on the party who alleges that the injured party failed to mitigate. It is clear from the Supreme Court’s decision that the burden of proof encompasses a need to demonstrate both that the injured party failed to make reasonable efforts to mitigate and that mitigation was possible: Southcott Estates, at para.24. The Supreme Court stated, “where it is alleged that a plaintiff has failed to mitigate damages, the onus of proof on a balance of probabilities lies with the defendant, who must establish not only that the plaintiff failed to take reasonable efforts to find a substitute, but also that a reasonable profitable substitute could be found”: Southcott Estates, at para.45.

[36] In this case, the duty to mitigate rested with the defendant Apollo, who was seeking damages to recover losses incurred as a result of Mr. Asif’s late cancellation of the June 13th booking. Mr. Asif was alleging that Apollo failed in its duty to mitigate. Mr. Asif therefore had the onus to prove two things: (1) that Apollo failed to take reasonable steps to mitigate its losses and (2) that a new booking could have been secured for June 13, 2014 had reasonable efforts been made.

[37] At no time did this onus shift to Apollo, even though Apollo did nothing to try to recruit new customers or attempt to secure a new booking for the cancelled date. The evidence establishes that Apollo did not engage in advertising or take any other active steps to solicit new business on the date in question. However, implicit in Deputy Judge Martel’s Reasons for Decision is a finding that it was not reasonable to expect Apollo to engage in promotional activities to try to secure new business on short notice, in an industry in which functions are booked well in advance. There is no basis upon which to interfere with this finding.

[38] Deputy Judge Martel also found that there was no evidence that potential new customers existed for the cancelled dates. At the appeal hearing, Mr. Asif noted that he was able to secure a new venue for his son’s wedding reception on very short notice after he decided to cancel the July 30th booking at Apollo. His counsel submitted that this constitutes evidence that a replacement booking could have been secured by Apollo for June 13th if Apollo had made reasonable efforts to mitigate.

[39] It was open to the Deputy Judge to conclude that Mr. Asif’s circumstances were unique. She accepted Apollo’s evidence that people generally book banquet halls well in advance and typically already have a date in mind when they inquire about availability. She noted that there was no evidence of any customers who were seeking a banquet hall for June 13th. Mr. Asif had the onus of establishing that such prospective customers existed. The fact that he had booked another venue on short notice for July 30th is not evidence probative of the fact that there was a prospective customer who would have booked a hall at Apollo on short notice on June 13th.

[40] The Deputy Judge did not ignore relevant evidence. Implicit in her Reasons for Decision is a finding that Mr. Asif did not satisfy the second part of his onus, namely proof that advertising or other reasonable steps by Apollo could have succeeded in securing a new booking for June 13th. In making this finding, she did not reverse the onus of proof. She applied the law correctly. There is no basis upon which to disturb her findings.

CONCLUSION

[41] For the above reasons, the appeal is dismissed. Mr. Asif and Apollo agreed that an order of costs in the amount of $3,000 should be awarded to the successful party on appeal. I therefore order Mr. Asif to pay Apollo’s costs of the appeal in the amount of $3,000, all inclusive.

Petersen J.

Released: September 26, 2018

CITATION: Asif v. Apollo Convention Centre, 2018 ONSC 5671

COURT FILE NO.: DC-17-34

DATE: 20180926

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Muhammad Asif

Appellant (Plaintiff)

– and –

225347 Ontario Inc., o/a Apollo Convention Centre

Respondent (Defendant)

REASONS FOR JUDGMENT

Petersen J.

Released: September 26, 2018