ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No: SC-15-00003789-0000

B E T W E E N:

EWA MARIA LUBIEW-MICHALSKA
Plaintiff

and

CINA MEHRVAR; DANIEL ALEXANDER CAREY, AKA DAN CAREY;
STEPHEN HEWITT; MEHRAB MEHRVAR;
JOSEPH VINCENT CAREY, AKA JOE CAREY; CRYIL HEWITT
Defendants

DATE HEARD: October 30, 2015

APPEARING:

Plaintiff appearing in person

Defendants Daniel Alexander Carey and Joseph Vincent Carey appearing in person

REASONS FOR JUDGMENT

Deputy Judge Marr

The Plaintiff is a residential landlord. The Plaintiff seeks monetary compensation for damage to an oven in the rental premises in which three of the Defendants were her tenants.

Both parties advised me that the action was settled with the Defendants Cina Mehrvar, Mehrab Mehrvar, Stephen Hewitt and Cyril Hewitt. The Mehrvar Defendants and Hewitt Defendants did not attend in court. The evidence was that the Plaintiff received in the settlement $340.00 from the Mehrvar Defendants and $340.00 from the Hewitt Defendants, which sums were all inclusive amounts for claim and costs.

On the consent of all parties before me, the claim against the Defendants Cina Mehrvar, Mehrab Mehrvar, Stephen Hewitt and Cyril Hewitt is dismissed without costs.

Attached to the Statement of Claim and marked as Trial Exhibit 1 is a Residential Tenancy Agreement (“the Tenancy Agreement”) which agreement describes Daniel Alexander Carey as one of three tenants of the leased premises. Joseph Vincent Carey signed the Tenancy Agreement and below his signature is typed the word “Guarantor”. Joseph Vincent Carey is the father of Daniel Alexander Carey. The tenants were students.

In the Claim, the Plaintiff seeks the principal amount of $308.84 from each group of the three Defendants plus interest and costs. As the action was settled with two groups of Defendants, the Plaintiff continued to trial to seek $308.84 plus interest and costs from the Defendants Daniel Alexander Carey and Joseph Vincent Carey.

In their Statement of Defence Daniel Alexander Carey and Joseph Vincent Carey admit they owe $108.92 to the Plaintiff.

Jurisdiction

The first issue I must address (which was not addressed by either party in their pleadings or arguments) is whether the Small Claims Court has jurisdiction to deal with the Claim as against the Plaintiff’s tenant, the Defendant Daniel Alexander Carey.

The Claim was issued on March 31, 2015, and on that date Daniel Alexander Carey resided at, and was a tenant at the Plaintiff’s premises. On April 22, 2015 Daniel Alexander Carey moved out of the Plaintiff’s premises, but his two roommates remained in the premises. There was no evidence as to whether a new tenancy agreement was executed, or if Daniel Alexander Carey remains a tenant under the Tenancy Agreement even though he no longer resides at the premises.

In any event, there is no dispute between the parties, or in the evidence, that when the Statement of Claim was issued Daniel Alexander Carey was a tenant of the Plaintiff.

In Efrach v. Cherishome Living[^1] Horkins J. held:

9 The issue before the Deputy Judge was whether the exclusive jurisdiction of the Board was engaged in this case…

10 The Deputy Judge correctly referred to and applied the test as set out by Perell J. in Mackie v. Toronto, 2010 ONSC 3801 at paras. 43-44. The Deputy Judge set out the test at para. 10 of her reasons:

The real test is that described at page 7 of the Luu case when it reviewed the reasoning of then Deputy Judge Bale and Justice Perell in relation to the Mackie v. Toronto decision. As Justice Perell put the point: "It doesn't matter whether a tenant's claim is for a cause of action ordinarily within the jurisdiction of the courts and upon which the legislation may be silent. Rather, the court must determine the essential character of the dispute and, if having done so, the court finds that the subject matter is expressly or inferentially governed by the statute, and then the claim is within the exclusive jurisdiction of the Board.

…14 The Deputy Judge correctly identified the test and then applied it to the case. The essential character of the claims is captured by the exclusive jurisdiction of the Board. This is clear from s. 29(1) of the Residential Tenancies Act. It states in part as follows:

29(1) A tenant or former tenant of a rental unit may apply to the Board for any of the following orders:

An order determining that the landlord has breached an obligation under subsection 20(1) or section 161.

16 Section 29(1.3) of the Act is also relevant. It states as follows:

A tenant or former tenant of a rental unit may apply to the Board for any of the following orders:

An order determining that the landlord, superintendent or agent of the landlord has substantially interfered with the reasonable enjoyment of the rental unit or residential complex for all usual purposes by the tenant or a member of his or her household.

Efrach was case where a tenant was seeking damages from a landlord, but in my view Justice Horkins’ reasoning may apply where a landlord is seeking damages from a tenant.

I note that Section 16(2) of the Residential Tenancies Act provides[^2]:

Board’s jurisdiction

(2) The Board has exclusive jurisdiction to determine all applications under this Act and with respect to all matters in which jurisdiction is conferred on it by this Act

I also note that the Residential Tenancies Act provides:

Compensation for damage

89. (1) A landlord may apply to the Board for an order requiring a tenant to pay reasonable costs that the landlord has incurred or will incur for the repair of or, where repairing is not reasonable, the replacement of damaged property, if the tenant, another occupant of the rental unit or a person whom the tenant permits in the residential complex wilfully or negligently causes undue damage to the rental unit or the residential complex and the tenant is in possession of the rental unit. 2006, c. 17, s. 89 (1); 2013, c. 3, s. 29.

I note the wording “may apply to the Board” is identical for a landlord’s Application as for the section 29 tenant Application cited by Justice Horkins.

Finney v. Cepovski[^3] was a case in which, after the tenant vacated the premises, the landlord found damage to the rental unit requiring repairs and then commenced a small claims court action.[^4] In Finney, Deputy Justice Winny determined that the Small Claims Court had no jurisdiction.

In my view, the essential character of this dispute between the Plaintiff and her tenant Daniel Alexander Carey is a s.89 (1) claim for “the reasonable costs of replacing damaged property”, which claim is within the exclusive jurisdiction of the Board.

I conclude that the Small Claims Court has no jurisdiction in a claim for property damage where a landlord commences a lawsuit for such damages against a defendant who is a tenant on the date the Claim is issued.[^5] Accordingly, the claim against the Plaintiff’s tenant, the Defendant Daniel Alexander Carey, is dismissed because the Small Claims Court has no jurisdiction over this landlord’s claim against a tenant for compensation for damages in the leased residential premises.

The Claim under the Guarantee

The Tenancy Agreement contains no language relating to the guarantee other than where Joseph Vincent Carey signed the Tenancy Agreement, below his signature is typed the word “Guarantor”.

However Joseph Vincent Carey does not deny that he owes money as guarantor of his son’s debts to the Plaintiff. The only issue he raised in the Statement of Defence, and in argument at trial, was the quantum of his obligation. Leaving aside for now the claim for interest and costs, the Plaintiff says the amount owed by the guarantor is $308.84, while the guarantor the Defendant Joseph Vincent Carey says that he only owes the sum of $108.92.

The Plaintiff’s evidence was that the glass door of the oven in the apartment was damaged by the tenants and that she had to replace the oven. The oven was damaged in September 2013, and the tenants continued to use the oven even though the glass door was severely damaged. There were efforts to fix the oven by both the Plaintiff and her tenants which were unsuccessful, as no replacement part could be found. There were discussions among the parties about what would be a reasonably priced replacement oven.

The Plaintiff bought the original oven in 2002 for $1,092.50 and it was first used in May 2003. The Plaintiff then purchased a replacement oven in February 2015.

The Plaintiff purchased the 30 inch Kenmore wall oven for $1,199.99, plus delivery fees of $69.95 and installation costs of $149.99, which totals $1,419.93, plus HST on these amounts of $184.59, for a grand total of $1,604.52.

While the word betterment was not used, prior to the litigation being commenced the parties discussed, and the Plaintiff agreed that the tenants should not be responsible for the full cost of a new oven.

The Plaintiff calculated the amounts she claims as follows:

1. The new oven’s cost, inclusive of tax, was $1,355.99. The Plaintiff limits her claim to 50% of this amount, which is $677.99; and

2. The Plaintiff seeks the full amount (without discount) for delivery and installation costs of the oven, inclusive of HST, which totals $248.53.

Therefore, the total of the Plaintiff’s claim against all tenants (exclusive of interest and costs) is $926.52. The Plaintiff seeks contribution of one-third of this amount from each tenant, so the claim against the Defendant Joseph Vincent Carey as guarantor of the debt of Daniel Alexander Carey is one- third of $926.52, which totals $308.84.

Betterment

Each side took a different position as to how long the old oven could have been expected to last based on hearsay evidence as to the lifespan of an oven. Neither party led any admissible documents or testimony on this issue and, and accordingly, I am unable to make any finding of fact on this issue.

In James Street Hardware v. Spizziri[^6], the Ontario Court of Appeal wrote:

Before dealing specifically with the question of betterment, it is useful to consider matters and principles of a more general nature. The "general rule from which one must always start in resolving a question as to the measure of damages" (McGregor on Damages, 14th ed. (1980), p. 7), is that the damages are the amount that will put the plaintiff "in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation": Livingstone v. Rawyards Coal Co. (1880), 5 App. Cas. 25 at p. 39. No one quarrels with this as a general starting point proposition. Differences often arise with respect to its application in particular cases.

… These considerations, however, do not necessarily mean that in cases of this kind the plaintiff is entitled to damages which include the element of betterment. As Waddams suggests, the answer lies in compensating the plaintiff for the loss imposed upon him or her in being forced to spend money he or she would not otherwise have spent -- at least as early as was required by the damages occasioned to him by the tort. In general terms, this loss would be the cost (if he has to borrow) or value (if he already has the money) of the money equivalent of the betterment over a particular period of time.

Before considering the application of this approach to the case before us, it would be well to reiterate what has been said in so many previous decisions on the assessment of damages and that is that each case turns on its own facts and that the process of assessing damages should be a practical one designed to do justice between the parties. The process should not be unnecessarily complicated or rule-ridden. The rules applied should be responsive to the particular facts of the case. For example, in some cases, perhaps many, the repair or replacement of property (the mere substituting of new for old) may well not involve any increase in the value of the property as a whole: see, e.g., Barrette v. Franki Compressed Pile Co. of Canada Ltd., 1954 110 (ON SC), [1955] O.R. 413 at p. 430, [1955] 2 D.L.R. 665, and Jens v. Mannix Co. Ltd. (1978), 1978 1962 (BC SC), 89 D.L.R. (3d) 351, [1978] 5 W.W.R. 486, 5 C.C.L.T. 225. None the less, in cases where there is a serious issue of betterment, the approach outlined in Waddams offers a useful guide to accommodating the interests of the defendant who wishes to avoid paying for a windfall and of a plaintiff who wishes to avoid being forced to spend money that he or she may or may not have. We add the reservation that, where the plaintiff alleges a loss with respect to being required to make an unexpected expenditure, the onus of proof with respect to it should lie on him or her.

In the present case there was no satisfactory evidence on the life expectancy of the building, either before the fire or what it would have been after being repaired -- nor was there any evidence as to the amount of the increase in value, if any, after the fire. In this respect the evidence in the case of City of North York v. Kert Chemical Industries Inc. (1985), 32 A.C.W.S. (2d) 271, referred to in the trial judge's reasons may be contrasted. The trial judge in the present case assumed that there was some betterment and, in making his best effort fairly to assess the damages, he deducted $34,000, or 10% of the $340,000 cost of restoration.

Having regard to the principle that in cases of doubt it is for the defendant to prove the value of an alleged improvement, we think that the trial judge erred in making this deduction. He had rejected the respondents' evidence respecting depreciation. In view of the fact that the respondents' expert did not know how long the components which he fully depreciated had been in the building and there being no evidence on the effect of the replacement of new for old components on the value of the building, we do not think that this evidence affords a reasonable basis for the deduction (emphasis added by me).

The Defendants presented in their evidence calculations of the value of the used oven, based on the age of the used oven, the life expectancy of the used oven, and the accounting and tax depreciation of the used oven. The Defendants asserted the used oven would have to have been replaced soon anyway.

There was no evidence that the used oven was not working properly at the time of the damage. I was not presented with sufficient evidence for me to conclude how much longer it was going to last before it would need to be replaced. The evidence was that efforts to find parts to fix the glass proved unsuccessful. I conclude that the Plaintiff acted reasonably in replacing an oven with a broken glass door.

The Plaintiff had an unexpected expenditure and was required to spend money that, but for the damage caused by the tenants, she would not have been required, at that time, to expend.

As explained by the Court of Appeal, the onus of proof on the issue of betterment is on the defendant. The Plaintiff accepted that there was betterment by agreeing to reduce the claim for the replacement oven’s cost by 50%. There was no admissible, satisfactory evidence from the Defendants that the betterment was higher than 50%.

In assessing damages, I note the Court of Appeal’s guidance in James Street Hardware where they wrote that: “process of assessing damages should be a practical one designed to do justice between the parties.” I also note that s.25 of the Courts of Justice Act[^7], provides that “Small Claims Court shall hear and determine in a summary way all questions of law and fact and may make such order as is considered just and agreeable to good conscience”.

In the circumstances of this case, since Daniel Alexander Carey admits he owes the Plaintiff some money, I conclude that an award to the Plaintiff of $308.54 payable by the guarantor would represent justice between the parties, as the Plaintiff would only receive 50% of the purchase price of the oven (which did not need to be replaced) and the costs of installation and delivery charges.

SUMMARY OF THE DECISION

The claim against the Defendants Cina Mehrvar, Mehrab Mehrvar, Stephen Hewitt and Cyril Hewitt is dismissed without costs.

The claim against the Defendant Daniel Alexander Carey is dismissed.

The Defendant Joseph Vincent Carey shall pay to the Plaintiff the sum of $308.84.

COSTS AND INTEREST

If the parties wish to make submissions on costs and pre-judgment and post-judgment interest, they should serve written submissions upon each other, and file the submissions with the Court (along with proof of service) in accordance with the following timetable:

(a) On or before November 23, 2015, the Plaintiff shall deliver by email and ordinary mail to the Defendant Daniel Alexander Carey and the Defendant Joseph Vincent Carey written submissions with respect to any request for interest (both pre-judgment and post-judgment interest) and costs. This Submission shall be filed with the Court in the usual manner, but shall also be sent to me by email to smarr@lmklawyers.com;

(b) On or before December 3, 2015, the Defendant Daniel Alexander Carey and the Defendant Joseph Vincent Carey shall deliver by email and ordinary mail to the Plaintiff responding written submissions. This Submission shall be filed with the Court in the usual manner, but shall also be sent to me by email to smarr@lmklawyers.com;

(c) On or before December 10, 2015, the Plaintiff may deliver to the Court and to the Defendant Daniel Alexander Carey and the Defendant Joseph Vincent Carey by email and ordinary mail a written Reply submission, if any. This Submission shall be filed with the Court in the usual manner, but shall also be sent to me by email to smarr@lmklawyers.com;

(d) The submissions on a claim for pre-judgment interest should include the date from when pre-judgment interest is calculated;

(e) The submissions on costs may include any relevant settlement offers made, including copies of any written offers to settle; and

(f) All email communication to me as set out above shall be copied by email to the opposing side. Neither party shall write to me without copying the other side.

Released: November 10, 2015. Samuel S. Marr, Deputy Judge

[^1]: 2015 ONSC 472, [2015] O.J. No. 293
[^2]: 2006, S.O. C.17
[^3]: [2015] O.J. No. 4265
[^4]: In the case before me, the damage was discovered before the Statement of Claim was issued. On the date the Statement of Claim was issued, the Defendant and tenant Daniel Alexander Carey was still a tenant of the Plaintiff.
[^5]: I need not decide on the facts of the case, before me, if there may in some circumstances still be jurisdiction in the Small Claims court where the tenancy ended before the Claim was issued.
[^6]: (1987) 1987 4172 (ON CA), 62 O.R. (2d) 385
[^7]: R.S.O. 1990, c. C.43