CITATION: Manel Investments Inc. v. Brock, 2019 ONSC 1403
BARRIE DIVISIONAL COURT FILE NO.: DC-17-1669
DATE: 20190228
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Manel Investments Inc.
Appellant
– and –
Rebecca Brock and Kevin Thomas
Respondents
Daniel Yudashkin, for the Appellant
Dale Lediard, for the Respondents
HEARD: January 28, 2019
REASONS FOR DECISION
CHARNEY J.:
[1] The appellant, Manel Investments Inc. (the “appellant” or “Manel”), appeals the judgment dated October 6, 2017 of Deputy Judge Dusome of the Midland, Ontario, Small Claims Court. In judgment, the Deputy Judge awarded the appellant damages of $660 against the defendants, Brock and Thomas. The appellant seeks a new trial.
Factual Background
[2] The action relates to a claim by Manel, a landlord, against Brock and Thomas, the former tenants of a property owned by Manel. Manel sued the defendants for $9,905 for the cleaning and repair costs incurred by Manel as a result of the defendants alleged failure to “leave the subject property in an undamaged and broom swept condition upon vacating it” as required by a term of the rental agreement.
[3] Manel claimed that it had to retain the services of another company, Torman Consultants and Contractors Inc. (Torman) to perform the majority of the repair and cleaning work.
[4] The defendants’ tenancy ran for two years from June 2014 until July 2016.
[5] This repair and cleaning work included replacing the carpet in two rooms. Manel alleged that the carpet was stained and smelled of dog urine. The carpeting in the other rooms was cleaned but not replaced. The repairs also included the disposal of furniture and garbage left behind by the defendants, general cleaning and painting, repair of interior steps, window screens and light fixtures. In addition, the appellant claimed for one month lost rent because the move-in of the new tenant was delayed by the need to do the repairs.
[6] Manel relied primarily on an invoice from Torman, which itemized the repairs and lost rent as totalling $14,050 plus tax.
[7] The defendants argued that the property was left in the same condition it was in when they moved in, and was subject to only normal wear and tear. In addition, the defendants argued that the invoices relied on by Manel were grossly exaggerated because Torman is a non-arms length company owned by Lucia Di Pietro, the spouse of Mike Di Pietro, the owner of Manel.
The Judgment
[8] The Deputy Judge provided oral reasons following the conclusion of the case.
[9] He relied on sections 33 and 34 of the Residential Tenancies Act, 2006, S.O. 2006, c. 17, which provide:
Tenant’s responsibility for cleanliness
33 The tenant is responsible for ordinary cleanliness of the rental unit, except to the extent that the tenancy agreement requires the landlord to clean it.
Tenant’s responsibility for repair of damage
34 The tenant is responsible for the repair of undue damage to the rental unit or residential complex caused by the wilful or negligent conduct of the tenant, another occupant of the rental unit or a person permitted in the residential complex by the tenant.
[10] The Deputy Judge noted that the home was already five years old when the defendants took possession of it in 2014, so that the home and carpet were seven years old when they moved out, and had been subject to normal wear and tear over the years. He rejected the appellant’s evidence that the premises were spotless in 2014, stating:
I think it more likely that there would be some wear and tear on the interior over that period, so I would accept the tenant’s version of the state of the premises when they moved in.
[11] The primary documentary evidence relied on by the appellant at trial was the Torman invoice. The validity of the amounts set out in the Torman invoice was a central issue in the trial, and for reasons that will be explained in greater detail below, the Deputy Judge decided that the figures set out in that invoice were not reliable and were inflated. For example, while line 3 of the Torman invoice indicated that labour cost for disposing of garbage on site was $1,890, based on “3 men, 27 hours at $70 per hour”, the Deputy Judge found that the evidence before him was that there were only two men and they were only on the job for one day. Based on the evidence of one of the labourers who testified, the Deputy Judge concluded that the actual labour cost for disposing of the garbage was only $320.
[12] The Deputy Judge also concluded that the $800 charged for the “disposal fee” for removal of garbage was unreasonable. He did not have evidence as to the dump fee, if any, the bin rental or the dump truck rental costs. He only had the final total as invoiced by Lucia Di Pietro, the wife of Mike Di Pietro, the owner of Manel.
[13] The Deputy Judge also found that it was unreasonable for the landlord to simply discard the outdoor furniture left by the defendants, finding that the outdoor furniture was in good condition and should have been reused. The Deputy Judge relied on s. 42(1)(b) of the Residential Tenancies Act, which provides:
42 (1) A landlord may dispose of property in a rental unit that a tenant has abandoned and property of persons occupying the rental unit that is in the residential complex in which the rental unit is located in accordance with subsections (2) and (3) if,
(b) the landlord gives notice to the tenant of the rental unit and to the Board of the landlord’s intention to dispose of the property.
[14] The Deputy Judge concluded that the landlord had failed to give notice to the tenant and the Landlord and Tenant Board and therefore the disposal of the outdoor furniture violated the Residential Tenancies Act, and that this must be taken into account in assessing the quantum of damages.
[15] The Deputy Judge concluded that the tenants were responsible for the damage to only the bottom interior step, where their puppy had chewed it, but were not responsible for repair of the upper steps, since the tenants had a gate across the bottom step that prevented the puppy from chewing the upper steps, “even though the puppy may have been allowed upstairs when the tenants were home”.
[16] The Deputy Judge also found that the appellant had not proven that the window screens were damaged or missing.
[17] With respect to the carpet, the Deputy Judge rejected the appellant’s claim for the replacement cost of the carpet. The Deputy Judge believed the tenants’ evidence that the puppy was not usually allowed upstairs, and that the tenants used pads until the dog was house trained. He therefore rejected the landlord’s claim that there was dog urine on the carpets upstairs. While the photographs did show staining on the carpet, there was no evidence that the landlord attempted to clean it before it was replaced.
[18] The Deputy Judge did find that, while there were scratches made by the tenants on the hardwood floors, this was not “undue damage” within the meaning of s. 34 of the Residential Tenancies Act.
[19] Similarly, the Deputy Judge concluded that the appellant had not proven that there was “undue damage” to the walls caused by smoking, accepting the defendants’ evidence that they did not smoke in the house because of the children. Accordingly he rejected the $3,500 claim for repainting the entire house.
[20] The Deputy Judge also concluded that any repairs or cleaning could have been completed in less than one month, and denied the $1,450 claim for one month’s lost rent.
[21] To the extent that the Deputy Judge concluded that the cleaning and repair work was reasonable, he awarded the appellant $660 on a quantum meruit basis, comprised of the following:
(a) Garbage removal: $800 claimed - $320 allowed, but reduced to $250 “because a good part of it…would have been breaking up the furniture”
(b) Repair of two interior steps: $1,500 ($350 for materials, $1,150 for labour) claimed - $400 allowed for the bottom step only.
(c) Light fixture: $200 claimed ($60 for materials, $140 for labour) - $10 allowed (the Deputy Judge found that only one fixture was damaged).
Issues on Appeal
[22] The Appellant raises three issues on this appeal:
(a) Did the Deputy Judge misapprehend the evidence and therefore commit palpable and overriding errors?
(b) Did the Deputy Judge err in his interpretation of the applicable law?
(c) Did the Deputy Judge fail in his duty of fairness such that there was actual or an apprehension of bias against the plaintiff?
The Standard of Review
[23] The appeal is brought pursuant to s. 31 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The standard of review is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at paras. 6-10 and 36-37. On a pure question of law, the standard of review is correctness. The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a “palpable and overriding error”. Questions of mixed fact and law are subject to the “palpable and overriding error” standard, unless it is clear that the trial judge made an error of law or principle that can be identified independently in the judge’s application of the law to the facts of the case.
Analysis
Misapprehension of Evidence
[24] Before considering the various grounds of appeal raised by the appellant, it will be helpful to highlight one issue that cuts across all of the issues raised by the appellant: the decision of the Deputy Judge to require evidence of costs beyond the evidence provided by the Torman invoice.
[25] While the appellant relied on the invoice from Torman to support his claim, the Deputy Judge was unwilling to accept that invoice as proof of Manel’s actual costs. He stated: “I had a look at that [Torman invoice], and just looking at it, was not sure about the figures, but we really did not have evidence to try to assess the validity of those figures.” The Deputy Judge concluded that the invoice figures were inflated. The evidence at trial demonstrated that Torman was not an arms length corporation, but is a company owned by Lucia Di Pietro, the wife of Mike Di Pietro, who owns Manel. The Deputy Judge expressed concern that there were no receipts for the materials and services that were allegedly purchased by Torman.
[26] Looking at the Torman invoice, I understand the Deputy Judge’s concerns in this regard. The Torman invoice appears to be simply a list of all of Manel’s alleged costs, as opposed to an invoice from the company or person that actually supplied the goods and services. For example, the Torman invoice lists “Rent Owing - $750” and “One month’s lost rent- $1,450” as costs to Manel, although these were not charges from Torman to Manel. Why were these items on the Torman invoice to Manel? Mike Di Pietro, Manel’s main witness, acknowledged that the references to the rent owing and lost should not have been on the invoice and was not paid by Manel to Torman. The presence of these charges on the invoice, however, calls into question the validity of the invoice and the relationship between Torman and Manel.
[27] While some of the work on site was performed by Torman (the garbage disposal and painting), Torman’s invoice also includes charges for work that was not done by Torman, but by other people hired by Manel or by Torman on behalf of Manel.
[28] For example, materials and labour for the removal and replacement of two interior steps, 3 window screens, 3 broken light fixtures and carpet in two rooms, as well as refinishing hardwood floors, are listed on the Torman invoice, even though this work was not done by Torman. Torman’s invoice is really hearsay evidence – it is what Mike Di Pietro testified Lucia Di Pietro told him Torman was charged by other people to do the work listed. In these circumstances it was reasonable for the defendants and the Deputy Judge to want to see the original invoices from the persons who were actually paid for the material and labour, rather than an invoice created by the “middleman”, who was also Mike Di Pietro’s wife.
[29] At the end of the day, there was evidence that Mike Di Pietro (Manel) paid $13,390 to his wife Lucia Di Pietro (Torman), but the Deputy Judge wanted evidence to show how much was actually paid to the service providers, not how much Mike Di Pietro paid to his wife.
[30] The defendants had requested disclosure of the invoices and receipts from the actual service providers, but these were never provided. Given Manel’s failure to provide these invoices, or direct evidence of what was paid on the original invoices, it was, in my view, reasonable for the Deputy Judge to draw an adverse inference with respect to the reliability of the Torman invoice and the reasonableness of the charges claimed.
[31] Recall that the Torman invoice indicated that labour costs were “3 men, 27 hours at $70 per hour - $1,890”. The Deputy Judge held, based on the evidence before him, that there were only two Torman employees and they were only on the job for one day. Based on this evidence, the Deputy Judge concluded that the invoice was inflated and the actual labour costs were only $320.
[32] The appellant contends that the Deputy Judge erred in quantifying the labour component of Torman’s work at the subject property. The appellant argues that the Deputy Judge understood that the 27 hours claimed under line 3 of the invoice represented the total labour for all of the work performed at the property, rather than just the labour for the removal of the garbage.
[33] As I read the Deputy Judge’s reasons, he did not make this mistake. It is clear from his reasons that he understood that the $1,890 charge for labour related to the disposal of garbage, which the Torman invoice claims took three men 27 hours. The Deputy Judge concluded, based on the evidence of Brendan Twigg, one of the labourers hired, that there were only two men and they completed the job in just one day. Accordingly, he found the evidence provided by the invoice to be unreliable, and calculated the total labour costs as $320, based on the evidence of salary and hours worked provided by Mr. Twigg. I do not understand the Deputy Judge’s decision on this line item of the Torman invoice to relate to any other labour costs. In my view, there was evidence on the record on which the Deputy Judge could make this finding, and it is not a “palpable and overriding error” of fact for him to have done so.
[34] The appellant also argues that the Deputy Judge erred in accepting the defendants’ evidence that the dog did not urinate on the carpet. This was a finding of fact based on credibility, and it was up to the Deputy Judge to decide whether to accept the evidence of the landlord or the tenant. There was no palpable and overriding error.
Errors of Law
[35] The appellant argues that the Deputy Judge erred when he relied on s. 42(1)(b) of the Residential Tenancies Act to find that the landlord could not simply dispose of the outdoor furniture, but had to give notice to the Landlord and Tenant Board before disposing of the property. Section 42 was not argued by any of the parties in the proceeding.
[36] The appellant argues that section 42 had no application to the property located in the rental unit because s. 42 applies only in cases where the unit was “abandoned” by the tenant, not in cases in which the tenancy agreement expires or is terminated by agreement of the landlord and tenant. There is no dispute that the unit in this case was not abandoned by the tenant; the unit was vacated by the tenant by agreement between the landlord and the tenant. As such, disposal of the property was governed by s. 41 of the Act, which provides:
41 (1) A landlord may sell, retain for the landlord’s own use or otherwise dispose of property in a rental unit or the residential complex if the rental unit has been vacated in accordance with,
(a) a notice of termination of the landlord or the tenant;
(b) an agreement between the landlord and the tenant to terminate the tenancy;
Agreement
(5) A landlord and a tenant may agree to terms other than those set out in this section with regard to the disposal of the tenant’s property.
[37] Under s. 41 there is no obligation to give notice to the Landlord and Tenant Board before disposing of the property, and the landlord is free to either retain or dispose of the property.
[38] The respondents acknowledge that s. 42 of the Residential Tenancies Act does not apply in this case, and that it is s. 41 that applies. They argue that this error of law by the Deputy Judge did not create a substantial wrong or miscarriage of justice and does not merit a new trial being ordered.
[39] The Deputy Judge did provide a calculation of what he would have ordered if s. 42 did not apply: $320 for labour.
Apprehension of Bias
[40] The appellant argues that the Deputy Judge displayed a bias against the appellant when he conducted a cross-examination of the appellant’s witnesses, Mike Di Pietro and Brendan Twigg.
[41] The test for determining whether a judge’s conduct gives rise to a reasonable apprehension of bias was defined by Cory J. in R. v. S. (R.D.), 1997 324 (SCC), [1997] 3 S.C.R. 484, at para. 111:
The manner in which the test for bias should be applied was set out with great clarity by de Grandpré J. in his dissenting reasons in Committee for Justice and Liberty v. National Energy Board, 1976 2 (SCC), [1978] 1 S.C.R. 369, at p. 394:
[T]he apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the requiRed information. . . . [The] test is “what would an informed person, viewing the matter realistically and practically -- and having thought the matter through-- conclude. . . .”
This test has been adopted and applied for the past two decades. It contains a two-fold objective element: the person considering the alleged bias must be reasonable, and the apprehension of bias itself must also be reasonable in the circumstances of the case… Further the reasonable person must be an informed person, with knowledge of all the relevant circumstances, including “the traditions of integrity and impartiality that form a part of the background and apprised also of the fact that impartiality is one of the duties the judges swear to uphold”(Citations omitted)
[42] The Ontario Court of Appeal considered the effect of repeated interventions by the trial judge in Majcenic v. Natale, 1967 267 (ON CA), [1968] 1 O.R. 189 at 205 (C.A.):
When a judge intervenes in the examination or cross-examination of witnesses, to such an extent that he projects himself into the arena, he of necessity adopts a position which is inimical to the interests of one or other of the litigants. His action, whether conscious or unconscious, no matter how well intentioned or motivated, creates an atmosphere which violates the principle that “justice not only be done, but appear to be done”. Intervention amounting to interference in the conduct of a trial destroys the image of judicial impartiality and deprives the Court of jurisdiction. The right to intervene is one of degree and there cannot be a precise line of demarcation but if it can be fairly said that it amounted to the usurpation of the function of counsel it is not permissible.
[43] In Grande National Leasing Inc. v Vaccarello, 2015 ONSC 5463, Molloy J. stated, at para. 40:
It is important in a situation such as this to consider the whole of the trial, not merely isolated comments made by the trial judge. Those comments must, however, be considered cumulatively.
[44] Having reviewed the transcript, I am satisfied that the questions asked by the Deputy Judge were legitimate points of clarification that trial judges often ask in the context of civil proceedings. These questions did not approach “the usurpation of the function of counsel” that was of concern to the Court of Appeal in Majcenic. Both parties were represented by paralegals in this proceeding. It is not unusual for the court to have points of clarification or questions in relation to matters that were left unclear by a witness’ testimony. It would do all parties a disservice if courts were forbidden from raising points of clarification.
[45] The fact that the Deputy Judge asked about the relationship between Manel and Torman was not an “unwarranted insinuation about what Mr. Di Pietro discusses with his wife at home”, as argued by the appellant on this appeal. The evidence presented at trial indicated that Manel and Torman are not arms length corporations, and the Deputy Judge had legitimate concerns about the document chosen by the appellant to prove his case.
[46] Similarly, there was nothing inappropriate about asking Mr. Twigg to clarify his evidence regarding the amount of work he did at the property.
[47] The appellant notes that Mr. Di Pietro testified that he and his wife never discussed business matters. It was open to the Deputy Judge to believe this testimony or not, and I cannot conclude that a reasonable and informed person would believe the Deputy Judge was biased because he rejected this testimony.
Conclusion
[48] For the foregoing reasons the appeal is allowed to the extent that the Deputy Judge erred in concluding that s. 42 of the Residential Tenancies Act applied and limited the appellant’s claim for the disposal of garbage to $200. It is not, however, necessary to order a new trial on this matter because the Deputy Judge found that, but for s. 42 of the Act, he would have granted judgment in the amount of $320.
[49] Accordingly, the decision of the Deputy Judge is varied by increasing the judgment of $660 by $120, so the final judgment is $780 to the plaintiff (Appellant).
[50] If the parties cannot agree on costs, the appellant may serve and file written submissions of no more than two pages plus costs outline and any offers to settle within 25 days of the release of this decision, and the respondents may serve and file responding submissions on the same terms within 15 days thereafter.
Justice R.E. Charney
Released: February 28, 2019
CITATION: Manel Investments Inc. v. Brock, 2019 ONSC 1403
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Manel Investments Inc.
Appellant
– and –
Rebecca Brock and Kevin Thomas
Respondents
REASONS FOR DECISION
Justice R.E. Charney
Released: February 28, 2019