ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-11-427504
DATE: 20120814
B E T W E E N:
Kenneth Albert Mulvina Applicant - and - Aftab Elahi, Bruno Manella, Raymond Menella, Raphael Manella, and Kennedy & Associates, Bailiffs Inc. Respondents
In person
Salma Sheikh, for the Respondents Aftab Elahi, Bruno Manella, Raymond Manella, and Raphael Manella
HEARD: August 14, 2012
Morgan J.
[ 1 ] This is an application under section 23(1) (d) of the Repair and Storage Liens Act , RSO 1990, c. R.25 (the “Act”). The Applicant is the owner of a 1997 Magnum 24 foot boat, who seeks a determination of whether the Respondent Aftab Elahi (“Elahi”) has a right to a lien for storage fees owing to him with respect to the Applicant’s boat, or whether the Applicant can get his boat back from its place of storage.
[ 2 ] The Applicant says that no storage fees are owed on his boat, and that he understood he could store the boat in an empty storage unit without payment. Elahi says that the boat is stored on his premises and that that agreed upon storage fees are owing to him that must be paid before the boat is released, failing which the boat should be sold and the proceeds of sale used to satisfy the outstanding fees.
[ 3 ] The Respondents Bruno Manella, Raymond Manella, and Raphael Manella (collectively the “Manellas”) are witnesses to some of the background facts, but there is no actual relief sought against them. Nevertheless, because of the factual allegations they have retained counsel along with Elahi and have responded to this Application. Likewise, Kennedy & Associates, Bailiffs Inc. (the “Bailiffs”), who were retained by Elahi to prepare the notice of lien and execute the seizure of the boat, are named as a Respondent perhaps because of their involvement in the background facts, but no relief is sought against them. Unlike the Manellas, however, the Bailiffs did not retain counsel or respond to the Application.
[ 4 ] Since no relief is sought against them, the application against the Manellas and the Bailiffs is dismissed.
[ 5 ] The basic facts are not really in dispute, although there is a difference between the parties over the date that the boat was initially stored with Elahi. What is clear is that the Applicant’s boat has been stored at warehouse premises at 449-457 Woodward Avenue, Hamilton, Ontario (the “Premises”), which is owned by Elahi. Equally clear is that the Applicant has not paid any storage fees for the entire time that his boat has been stored there.
[ 6 ] Elahi is the landlord of the Premises, which is an industrial building that is used by his tenants for operating their businesses. Elahi is not generally in the storage business, but rather is a landlord of industrial premises. The Manellas lease a unit in the Premises from which they run a scrap metal business. Bruno Manella states in his affidavit that he was contacted by a friend of his, Ismail “Smiley” Bhamjee, on August 10, 2010. Smiley inquired as to whether he knew of any empty units in the Premises which he and his friend, the Applicant, could possibly lease. Bruno told Smiley that the unit adjacent to his own was empty. According to Bruno, Smiley indicated that he and the Applicant were planning to open a storage business and were interested in possibly leasing the empty unit.
[ 7 ] In an unsworn statement, and in his cross-examination, Smiley says that he recalls the date that he made the initial inquiry on behalf of the Applicant as January 10, 2011, not August 10, 2010. A review of the transcript of Smiley’s cross-examination, however, reveals him to have a very spotty memory of the relevant events. Raymond Manella, who was present the day that the Applicant moved his boat to the Premises, testified that it was in August 2010, and Bruno Manella, who made the original arrangement with the Applicant and Smiley, also confirms that August 10, 2010 was the starting date.
[ 8 ] Most importantly, the person from whom the Applicant originally bought the boat – a completely disinterested party that has no friendship or affiliation with any of the litigants – has confirmed that he sold the boat to the Applicant in the summer of 2010. It stands to reason that the Applicant needed storage from the time he bought the boat and not arbitrarily six months later.
[ 9 ] I find that the starting date of the boat’s storage at the premises is in August 2010. The Applicant says that he thought the storage would be without charge, but that claim simply does not seem credible. Elahi and Bruno Manella have both testified that they explained to the Applicant that the rent for the unit adjacent to the Manellas’ rental unit would be the same as the Manellas’ own rent – i.e. $2,500.00 per month. A formal lease of the unit was never concluded, and the Applicant never moved into the unit except to store his boat there; however, the Applicant certainly must have expected to pay for the storage space when he moved his boat into what was to his full knowledge a commercially leased building.
[ 10 ] In April 2011, Elahi retained the Bailiffs who prepared and served on the Applicant a claim for lien on the boat, and in May 2011 the boat was moved by Elahi to a smaller storage space for which Elahi charges $8.75 per square foot, or $328.00 per month. Counsel for Elahi has produced evidence that this rate that is comparable to ordinary boat storage rates at the nearby Hamilton Port Authority.
[ 11 ] Since there never was a lease entered into by the Applicant and Elahi, and the Applicant never moved in or took exclusive possession of the unit in which his boat was stored, there was no landlord-tenant relationship between them. Counsel for Elahi concedes as much in her factum. Accordingly, the rental charge of $2,500.00 which would have applied to a tenant of the entire unit was not applicable to the Applicant at any time.
[ 12 ] However, the Applicant clearly stored his boat at the Premises and Elahi is owed reasonable storage fees from August 10, 2012. I find that Elahi is entitled to a storage lien under section 4(1) of the Act and may retain possession of the boat until the storage fees as set out below are paid. Further, under section 7 of the Act , Elahi has the right to sell the boat and to satisfy the amount of the lien from the proceeds of that sale. The interlocutory injunction prohibiting sale of the boat ordered by Perrell J. on November 14, 2011 and continued by Lederman J. on April 20, 2012 is accordingly lifted.
[ 13 ] Counsel for Elahi suggested during the course of argument that there may be have to be trial of an issue with respect to quantification of the amount owing for storage fees. I see no need for such a procedure. The Act does not require it; moreover, the storage and related fees are liquidated amounts and can be established without the need for live testimony and without converting the Application into a trial.
[ 14 ] The evidence establishes that the storage fee of $328.00 per month currently being charged by Elahi reflects the fair market rate for storage of this boat. This fair market rate sets the storage fees under section 4(1) (d) of the Act , and should be applied back to the first date of storage on August 10, 2010. It has now been 24 months since the date the storage commenced, making storage fees in the amount of $7,872.00 due and payable by the Applicant to Elahi as of the date of this judgment. Elahi is also owed reimbursement of the $800 fee charged by the Bailiffs in preparing the notice and in executing the claim for lien, for a total of $8,672.00 owing by the Applicant to Elahi.
[ 15 ] Storage fees of $328.00 per month will continue to accrue so long as the boat is stored with Elahi, although Elahi will have a duty to mitigate this accruing storage fee by acting expeditiously to sell the boat and satisfy the debt from those proceeds.
[ 16 ] The Respondents Elahi and the Manellas shall have their costs of this Application, payable by the Plaintiff. There shall be no costs for or against the Bailiffs.
[ 17 ] Counsel for Elahi and the Manellas has submitted an outline of costs which, while reflecting a standard level of legal fees, are nearly double the amount at issue in the Application. Although costs need not be in direct proportion to the size of the monetary award, they should bear some resemblance to the stakes in the litigation. I would award costs payable by the Applicant to Elahi and the Manellas in the amount of $10,000.00, inclusive of all disbursements and HST.
E.M. Morgan J.
Released: August 17, 2012
COURT FILE NO.: CV-11-427504
DATE: 20120814
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
Kenneth Albert Mulvina Applicant - and - Aftab Elahi, Bruno Manella, Raymond Menella, Raphael Manella, and Kennedy & Associates, Bailiffs Inc. Respondents
REASONS FOR JUDGMENT
Morgan J.
Released: August 17, 2012