2015 ONSC 3231

COURT FILE NO.: 566/15

DATE: 2015/05/21

SUPERIOR COURT OF JUSTICE – ONTARIO

In the Matter of the Commercial Tenancies Act, R.S.O. 1990, Chapter. L. 7

RE: Paul Graham o/a Alpine Engineering (Applicant/Appellant)

AND:

10 Tecumseh Ave. West Inc. (Respondent)

BEFORE: Justice A. K. Mitchell

COUNSEL: Self-represented, appellant

T. Devitt, for the respondent

HEARD: May 20, 2015

ENDORSEMENT

Overview

[1] The appellant seeks a stay of the decision of the Honourable Justice Miller released April 24, 2015 (the “Decision”) under rule 63.02(1)(a) of the Rules of Civil Procedure.

[2] Pursuant to the Decision, Miller J. dismissed the application and dissolved the interim interlocutory injunction.

[3] The appellant asks that the Decision be stayed and the injunction reinstated pending appeal.

[4] The Decision has not yet been appealed. The time for appealing the Decision expires May 24, 2015.

[5] Following argument of the motion, I dismissed the motion with written reasons to follow. These are my reasons.

Factual Background and Procedural History

[6] The applicant is a commercial tenant of premises owned by the respondent and municipally described as Unit 6, 10 Tecumseh Avenue West, London, Ontario (the “premises”) pursuant to an oral lease commencing July 1, 2013 (the “lease”). The term of the lease is two years, expiring June 30, 2015. As consideration for the lease of the premises, the applicant was obligated to pay rent to the respondent of $2,150 monthly ($25,800 per annum).

[7] The applicant defaulted in payment of the March, 2014 rent. Such default continues and has not been cured.

[8] On March 19, 2015, the respondent demanded payment of all rental arrears and issued Notice of Termination of Lease and Claim for Damages effective immediately. The respondent further notified the applicant that the locks to the premises would be changed on March 24, 2015 with entry by the applicant to the premises thereafter prohibited.

[9] No steps were taken by the respondent to distrain against the applicant’s assets located on the premises prior to terminating the lease.

[10] Pursuant to a motion first returnable March 24, 2015, the appellant sought an injunction restraining the respondent from evicting him from the premises. Leitch J. granted an interim interlocutory injunction and adjourned the applicant`s motion to March 30, 2015 to allow the respondent time to respond.

[11] On March 30, 2015, I extended the interim injunction pending a hearing of the application proper and ordered the appellant to issue a proper notice of application. The application, to be commenced, was made returnable April 17, 2015.

[12] A Notice of Application was subsequently issued and the application was argued before Miller J. on April 17, 2015. The applicant (appellant) sought the following relief on the application:

(1) an order enforcing a verbal agreement between the applicant and the respondent made March, 2014 whereby, it is alleged, the respondent agreed to defer payment of rent with respect to the premises until such time as the appellant received payment from a third-party, on condition that the property owned by the third-party would remain on the premises pending payment of rental arrears (the “March 2014 Agreement”);

(2) a declaration that the notice of termination issued by the respondent on March 19, 2015 constitutes a breach of the March 2014 Agreement;

(3) a declaration that the parties did not reach a settlement on December 16, 2015; and

(4) an order striking certain paragraphs of the affidavit of Tony Moonen sworn April 7, 2015 and striking Exhibits A and B to the supplementary affidavit of Tony Moonen sworn March 26, 2015.

[13] As noted by Miller J. in the Decision, the relief sought on the application is in the nature of relief from forfeiture despite not having been specifically pleaded as such.

Position of the Parties

The Appellant

[14] Mr. Graham argues that there is a serious issue to be adjudicated on the appeal once launched and a stay should be granted and, more importantly, the injunction re-instated. He submits that Miller J. erred in admitting evidence which was subject to settlement privilege and further erred in relying on this inadmissible evidence to interpret the letter from appellant’s counsel of December 15, 2014 to respondent’s counsel as constituting an offer to settle capable of acceptance.

[15] The appellant further argues that Mr. Devitt should not have been permitted to advocate on behalf of the respondent on the application because he was the author of letters appended as exhibits to the affidavit of Mr. Moonen and is arguably a witness and not a proper advocate contrary to the Law Society’s Rules of Professional Conduct.

[16] As for the requirement to establish irreparable harm if the stay is not granted, Mr. Graham says that he is no longer able to operate his business because he no longer has access to the premises and the assets located thereon. As such, he is unable to continue his livelihood and provide for his family. He further claims that he is unable to obtain documents necessary to prosecute his claim for payment of repairs which will ultimately provide the source of funds needed to pay the rental arrears.

[17] Lastly, Mr. Graham submits that the balance of convenience favours the appellant since there is no imminent sale of the premises by the respondent requiring the eviction of defaulting tenants.

Position of the Respondent

[18] Mr. Devitt argues there is no serious issue for adjudication on the appeal. Miller J. considered the issue of the admissibility of the letters exchanged between counsel in December, 2014 and concluded they were not protected by settlement privilege. He is presumed correct in his ruling. Morever, this evidentiary ruling was entirely within the jurisdiction of the application judge to make and should be treated, for purposes of this motion, as prima facie correct.

[19] Counsel submits that Miller J.’s decision to allow Mr. Devitt to participate as counsel on the hearing application, if set aside on appeal, would not affect the evidentiary record before the court and upon which the Miller J. relied in making the Decision.

[20] Mr. Devitt did concede that a sale of the premises is not imminent and there is no agreement to sell the premises conditional on the applicant’s eviction.

Analysis

[21] Rule 63.02 provides, in part, as follows:

(1) An interlocutory or final order may be stayed on such terms as are just,

(a) by an order of the court whose decision is to be appealed;

(b) by an order of a judge of the court to which the motion for leave to appeal has been made or to which an appeal has been taken.

(2) A stay granted under clause 1(a) expires if no notice of motion for leave to appeal or no notice of appeal, as the case may be, is delivered and the time for the delivery of the relevant notice has expired.

(3) A stay granted under subrule (1) may be set aside or varied, on such terms as are just, by a judge of the court to which the motion for leave to appeal may be or has been made or to which an appeal may be or has been taken.

[22] The respondent landlord argued in its factum, that I am bound by the decision in Bijowski v. Caicco, 1985 CanLII 4996 (ON CA), [1985] O.J. No. 1550 (C.A.) where Finlayson J. states at para. 11:

In my respectful view, the purposes of R. 63.02 is to confer a restricted jurisdiction upon the trial judge or another judge of that court in his absence to stay an order which is not automatically stayed because of the provisions of R. 63.01(2). The order that he makes is only effective until a notice of appeal is delivered or the time for appeal expires, whichever is earlier. The rule really contemplates the maintenance of the status quo during the time available to the unsuccessful party to appeal. Once an appeal is launched, the jurisdiction is then in the Court of Appeal to determine whether it would be appropriate for the longer term before the appeal is disposed of to interfere with the judgment or order that is under appeal.

[23] During argument on the motion, counsel for the respondent conceded that rule 63.02 has been materially amended since the decision in Bijowski and the comments of Finalyson J. are no longer good law. Subrule 63.02(3) now supercedes the decision in Bijowski and makes it clear that until an order made under rule 63.02(1)(a) staying the decision to be appealed is set aside or varied by the Court of Appeal, it continues in full force and effect provided a notice of appeal is issued within the appeal period.

[24] The appropriate test to be applied on a motion for a stay is the same test as the test for an interlocutory injunction set out in RJR–MacDonald Inc. v. Canada (Attorney General) (1994), 1994 CanLII 117 (SCC), 111 D.L.R (4th) 385 (S.C.C.): See Ogden Entertainment Services v. Retail, Wholesale/Canada Canadian Service Sector, U.S.W.A., Local440, 1998 CarswellOnt 1787 at para. 4.

[25] As noted in Ogden, in determining whether a stay should be granted, regard must be had to the judgment under appeal and a strong case in favour of the stay must be made out. The court must proceed on the assumption that the judgment is correct and that the relief ordered was properly granted.

[26] I am left somewhat in the dark as to the grounds of the appeal since a notice of appeal has not yet been filed. I must satisfy myself from the materials before me that the appeal presents a serious issue for adjudication. It is insufficient for the appellant to essentially reiterate the arguments that it advanced on the application and in support of the motion for the injunction.

[27] On this point, I am guided by the comments of Charron J.A. (as she then was) in Anne of Green Gables Licensing Authority Inc. v. Avonlea Traditions Inc., 2000 CarswellOnt 1061 (C.A.) [In Chambers]. In dismissing the appellant’s motion for a stay of an injunction she states at para 7:

It is apparent from the extensive reasons delivered by the trial judge that all of the issues were fully canvassed and that many of the arguments were unsuccessful because they were simply not sustainable on the evidence. The appellant will have to contend with the same evidentiary basis, or lack thereof, on appeal. Therefore, to the extent that the appeal reiterates those same arguments, it is not apparent to me that it presents a serious issue to be determined.

[28] The application judge made the following evidentiary ruling:

[17] In December 2014, the parties retained counsel and entered into settlement discussions. The Respondent claims that there is an enforceable settlement agreement between the parties. The Applicant disputes this. The Respondent has produced correspondence said to evidence that agreement. The Applicant objects that these letters are inadmissible because they are protected by settlement privilege.

[18] Having reviewed the correspondence, I am satisfied that the correspondence (attached to the supplementary affidavit of Mr. Moonen) is properly admissible for the purposes of proving the existence of a settlement agreement.

[29] Following a review of the evidence before him, Miller J. made the findings paraphrased as follows:

(1) the applicant did not meet the burden of establishing on a balance of probabilities that the respondent agreed to defer payment of rent until the conclusion of the third party litigation over the bus;

(2) the applicant did establish on a balance of probabilities that the respondent agreed to defer payment of rent for a period of time but not indefinitely; and

(3) in any event, a binding settlement agreement was reached between the parties on the terms of the letters of December 15 and 16, 2014 which supercedes any earlier agreement to forbear.

[30] It is not open to me to place a contrary interpretation on the evidence upon which the application judge relied and which he considered when arriving at the Decision. I must defer to his evidentiary ruling and presume the letters of December 15 and 16, 2014 were admissible as evidence on the application. Similarly, I must defer to the interpretation of the letter of December 15, 2014 by the application judge and his finding that same constituted an offer capable of acceptance and which was, in fact, accepted.

[31] With respect to Mr. Graham’s argument that it was not proper for Mr. Devitt to have represented the respondent’s interests on the application because he was the author of the December 16, 2014 letter, I find that whether or not Mr. Devitt was permitted to participate as counsel on the hearing of the application, would not have affected the evidentiary record upon which the Decision was based. This concern of the applicant does not raise a serious issue for adjudication on the appeal.

[32] I find there is no serious issue to be tried on the appeal and therefore the appellant has failed to satisfy the first prong of the test for a stay of the Decision. Accordingly, there is no need to consider the second and third prongs of the RJR-MacDonald test and the many affidavits filed by the parties post- April 17, 2015 in support of their positions on this motion with respect to the issues of irreparable harm and balance of convenience.

[33] Motion dismissed. In my hand-written endorsement of yesterday, I made an order outlining the terms upon which the appellant may have access to the premises for purposes of removing the assets and property thereon or continuing his vehicle restoration business should an arrangement satisfactory to the parties be reached. In the same endorsement, I ordered no costs of this motion to either party so as to encourage a resolution of the issues between the parties on a negotiated basis without further litigation to enforce an unpaid cost order which would only serve to complicate and frustrate those negotiations.

“Justice A. K. Mitchell”

Justice A. K. Mitchell

Date: May 21, 2015