Court of Appeal for Ontario

DATE: 20200303 DOCKET: C67158

Lauwers, Hourigan and Thorburn JJ.A.

BETWEEN

David Cooper by his Litigation Guardian, Annette Cooper and Annette Cooper Applicants (Respondents)

and

The Laundry Lounge, Inc. and André Fiset Respondents (Appellants)

Counsel: André Fiset on his own behalf and on behalf of The Laundry Lounge Inc. Krista Chaytor and Caitlin Steven, for the respondents

Heard: February 24, 2020

On appeal from the judgment of Justice Paul B. Schabas of the Superior Court of Justice, dated May 27, 2019, with reasons reported at 2019 ONSC 3216.

Reasons for Decision

Introduction

[1] This appeal arises from a successful application brought by the respondents, David and Annette Cooper, for an order terminating two commercial leases for non-payment of rent, an order requiring vacant possession of the premises, an order granting leave for the Registrar to issue a writ of possession, and orders requiring payment of arrears of rent and damages for lost future rent.

[2] The appellants challenge both final and interlocutory orders made by the application judge. We agreed to hear both the final and interlocutory aspects of the appeals because the appeals are “so interrelated” that there is good reason to hear them together: Azzeh v. Legendre, 2017 ONCA 385, 135 O.R. (3d) 721, at paras. 25-26. We also granted leave to permit the appellant, André Fiset, to represent the corporate appellant.

[3] At the hearing of the appeals, Mr. Fiset advised that the appellants have vacated the premises. Therefore, the relief they now seek is limited to setting aside the orders with respect to rental arrears, lost future rent damages, pre-judgment interest, and costs.

Facts

[4] The leases in issue are for two properties on adjoining premises. One property was used as a laundromat, and another was used for a dry-cleaning business. Mr. Cooper and the Laundry Lounge, Inc. entered into the laundromat lease in 2003. In 2010, Mr. Cooper and “The Laundry Lounge or a yet-to-be incorporated corporation” executed the dry-cleaning lease.

[5] In December 2017, the heat failed in the laundromat and subsequently, a frozen pipe burst, causing water damage. The respondents offered to reimburse all expenses related to the loss of heat and further agreed to a rent abatement for both leases for January 2018.

[6] The appellants did not provide any receipts for expenses to the respondents. Instead, starting in February 2018, the appellants stopped paying rent. In March 2018, the appellants brought an action, advancing several claims, including breach of contract, misrepresentation, and loss of income. The appellants did not serve their statement of claim. The respondents commenced their application in August 2018.

[7] In October and November 2018, the respondents took steps to terminate the leases, but the bailiff's efforts to take possession were unsuccessful.

[8] In December 2018, Mr. Fiset paid $35,000, and in January 2019, he started paying $7,000 per month, about half of what was owing under the leases. These payments were made under Mr. Fiset's obligations for the dry-cleaning lease.

[9] The application judge ruled that the respondents were entitled to the relief sought and that the appellants had not established a right of set-off pursuant to s. 35 of the Commercial Tenancies Act, R.S.O., 1990, c. L.-7. He found that there was no evidence filed in support of the claim for set-off.

Analysis

[10] The appellants raise several grounds of appeal, which may be broadly categorized as follows: (i) procedural irregularities regarding the application; (ii) objection to the respondents’ use of self-help remedies; (iii) failure to mitigate damages; and (iv) an allegation that the application judge was biased.

[11] We do not give effect to any of these grounds of appeal.

[12] We agree with the application judge that an application was the appropriate procedure, given the straightforward factual and legal issues in play. The fact that the appellants commenced an action does not impact that conclusion.

[13] The respondents, as the title holders to the properties, were the proper parties to the application, even though they did not manage the properties. Their son, Allen Cooper, who is involved in the day-to-day operation of the properties, provided evidence and was extensively cross-examined.

[14] There was nothing improper in the appellants exercising their self-help remedies under the Commercial Tenancies Act.

[15] The submission made in the appellant’s factum regarding mitigation of damages is based on a failure to re-let the laundromat after it was allegedly vacated before the return of the application. The application judge's finding that the laundry lease was not surrendered was well-grounded in the evidence. Therefore, we see no error in his conclusion that rent was owing up to the date of the hearing.

[16] Mr. Fiset further argues that the application judge erred in awarding damages for lost rent for the balance of the lease term, being approximately 11 months, because the respondents failed to establish that they made reasonable efforts to re-let the properties. We do not give effect to that ground of appeal. Implicit in the application judge’s reasons was a finding that given the relatively short period left in the leases, this was a reasonable period to market the properties and obtain new tenants. That was a conclusion available to the application judge and we see no basis for appellate interference.

[17] The allegation regarding bias appears to be based on the fact that the application judge did not make specific reference to heating and flooding issues in the dry-cleaning premises. The application judge was under no obligation to reference every fact in his endorsement. In any event, the failure to do so does not constitute bias.

[18] Finally, in his oral reply submissions, Mr. Fiset requested that we make clear in our reasons that nothing in the application judge’s reasons or judgment precludes the appellants from prosecuting their action. We cannot accede to that request. The determination of that issue is not for this court but may be dealt with by a judge of the Superior Court at trial or on a motion.

Disposition

[19] The appeal is dismissed. The appellants shall pay the respondents their costs of the appeal, fixed in the all-inclusive amount of $10,000.

“P. Lauwers J.A.”

“C.W. Hourigan J.A.”

“Thorburn J.A.”