Court File and Parties

CITATION: Kwan v. Whyne 2017 ONSC 4997

COURT FILE NO.: CV-17-578629-00

DATE: 20170825

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CHUN HIP KWAN PHYLLIS KWAN, Applicants

AND:

MUHAMMAD AJMAAL WHYNE, Respondent

COUNSEL: Pierre Gemson, for the Applicants

Murad Ali Khan, for the Respondent

BEFORE: P. J. Monahan, J.

HEARD: July 20 and July 24, 2017

ENDORSEMENT

[1] On July 24, 2017 I granted the Applicants, Chun Hip (Steve) Kwan and Phyllis Kwan (“the Kwans”), an order for vacant possession of the ground floor of their property at 588 Parliament Street (the “Premises”). The order required Muhammad Ajmaal Whyne, the lessee who was operating a retail business therein, to vacate the Premises forthwith.

[2] In my oral reasons delivered on July 24, I explained the background to the dispute between the parties. In brief, in December 2016 the Kwans served Mr. Whyne with a notice of termination, effective June 30, 2017, in accordance with an early termination provision in the lease. The Kwans required vacant possession of the Premises in order to satisfy a condition in an agreement of purchase and sale with a third party. The sale of the property was scheduled to close on July 21, 2017. The Kwans intended to utilize the proceeds of the sale in order to fund their retirement.

[3] Prior to June 2017, Mr. Whyne did not give any indication that he intended to dispute the termination of the lease. Then, on June 16, 2017, counsel for Mr. Whyne delivered a letter to the Kwans indicating that Whyne would not give up possession of the property until he had proof the sale of the property had closed, along with proof that the Kwans were no longer the owners. This position was reiterated in a subsequent letter from Mr. Whyne’s counsel on June 28, 2017.

[4] In fact, the termination provision in the lease did not require that a sale of the property be closed in order for the Kwans to effect termination of the lease. As such there was no proper legal basis for the demands made by Mr. Whyne’s counsel in the correspondence referred to above. On June 30, 2017 counsel for the Kwans delivered a copy of the agreement of purchase and reiterated the requirement that Mr. Whyne vacate the premises.

[5] Mr. Whyne failed to comply with this request, which required the Kwans to retain counsel to seek to resolve the matter, and ultimately to commence the present application in this Court on July 11, 2017. Neither Mr. Whyne nor counsel on his behalf attended at CPC Court on July 14, 2017, where Justice McEwan ordered the matter to be heard on an urgent basis on July 20, 2017.

[6] When the matter came before me for hearing on July 20, 2017, Mr. Whyne appeared personally and provided an unsworn affidavit in which he sought an adjournment of the matter on the basis that his counsel was not available to attend on that date. He requested that the matter be put over until sometime in August.

[7] Given the fact that the closing of the sale of the property was scheduled to occur the next day and that, if the Kwans could not deliver vacant possession they would be in breach of a condition of the agreement of purchase and sale, I refused the request for an adjournment and proceeded to hear submissions from the parties.

[8] During the hearing, Mr. Whyne raised two new concerns, namely: (i) the early termination provision in the lease conflicted with a right to renew set out in an earlier lease of the premises; and (ii) he had agreed to the early termination provision under duress. Given the fact that Mr. Whyne was representing himself, and despite the fact that these concerns were being raised for the first time nearly 3 weeks after the lease had been terminated, I adjourned the matter until July 24, 2017, in order to permit the parties to file additional material to address these concerns. The Kwans filed a fresh affidavit and supporting materials in order to respond to the new grounds raised by Mr. Whyne.

[9] At the hearing on July 24, 2017, which included Mr. Whyne being sworn and providing viva voce evidence, I determined that there was no substance to either of the concerns identified by Mr. Whyne. Accordingly I issued the order for vacant possession described above, as well as ancillary and associated relief, plus costs on a partial indemnity basis.

[10] I recount the history of this matter to illustrate that the Kwans were forced to embark upon expedited proceedings before this Court after Mr. Whyne refused to vacate the Premises without any legal right to continue his occupation thereof. Moreover, it was not until the hearing of the matter on July 20, 2017, weeks after the lease had been terminated and when the sale of the property was imminent, that Mr. Whyne articulated any legal basis upon which he purported to continue his occupation and use of the Premises. This required the applicants to develop and supply the Court with a comprehensive legal and evidentiary basis for granting the relief sought, on extremely short notice.

[11] During the hearing of the matter, Mr. Whyne disclosed that he operates similar retail businesses at a number of different locations in the Greater Toronto Area. It is therefore not unreasonable to expect that he would have been familiar with leasing arrangements such as he had negotiated in the present case, including the early termination provision. Through his conduct he turned what should have been an entirely straightforward lease termination into a protracted and concerted legal proceeding.

[12] Counsel for the Kwans have submitted a Bill of Costs indicating that their actual costs to pursue this matter to its conclusion amount to approximately $52,000. The Kwans therefore seek costs on a partial indemnity basis in the amount of $31,841, inclusive of disbursements and HST. Counsel for the Kwans argue that two separate hearings and multiple written submissions should not have been required to establish facts that ought to have been admitted by Mr. Whyne from the outset. They argue that, although the legal significance of the issues in question are admittedly minor, their personal significance to the Kwans was consequential, and the uncertainty injected by Mr. Whyne’s conduct into the fate of their property transaction was a source of extreme stress and disruption.

[13] Mr. Whyne disputes the amount of time spent by counsel for the Kwans on the matter. He further relies upon the hourly rates for counsel set out in the ‘costs grid’ that was in effect prior to July 1, 2005 but which was revoked as of that date. On this basis he argues that legal fees should be assessed at approximately $9,500 and, further, that the Kwans’ total costs, including disbursements and HST, should be fixed at approximately $12,360.

[14] As the Court of Appeal made clear in Inter-Leasing, Inc. v. Ontario (Revenue), 2014 ONCA 683, the “Information for the Profession” set out in the preamble to Rule 57, which sets out suggested maximum hourly rates in fixing costs on a partial indemnity basis, is now out of date. The Court of Appeal indicated that amounts calculated at 55-60% of a reasonable actual rate more appropriately reflect costs on a partial indemnity scale.

[15] I regard the time spent, and the hourly rates charged, by counsel for the Kwans to be reasonable, particularly given the expedited and shifting nature of the proceeding. As I have explained above, the entire proceeding was made necessary through Mr. Whyne’s failure to act in accordance with lease provisions which he had negotiated.

[16] I therefore award costs on a partial indemnity basis in favour of the Kwans in the amount of $31,841, inclusive of disbursements and HST, payable within 30 days.

P. J. Monahan, J.

Released: August 25, 2017