Court File and Parties

COURT FILE NO.: CV-17-0407-00 DATE: July 5, 2019 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: THE OFFICE CENTRE (KINGSTON) LIMITED, Plaintiff AND: SALSHIR PROPERTIES LIMITED and CRAVE COFFEE HOUSE & BAKERY, Defendants

BEFORE: Justice Patrick Hurley

COUNSEL: K. Gordon Gwynne-Timothy, for the Plaintiff John R. Crouchman, for the Defendant Salshir Properties Limited James L. McDonald, for the Defendant Crave Coffee House & Bakery

HEARD: May 17, 2019

Endorsement

Introduction

[1] The plaintiff owns a building at 164 Princess Street, Kingston. The defendant Salshir Properties Limited (“Salshir”) owns the building next door at 166 Princess Street. There are commercial tenants on the ground floor of both buildings with residential apartments on the upper floors. The residential tenants of both buildings enter by a common doorway on Princess Street, proceed through a short hallway and use a single staircase to access their apartments.

[2] Salshir’s commercial tenant, the defendant Crave Coffee House & Bakery (“Crave”) operates a café. In 2016, it installed a compressor for a food cooler and a flue for a coffee roaster alongside the exterior wall of 166 Princess Street. The plaintiff contends that this equipment emits noise, smell, smoke and heat which constitutes an actionable nuisance.

[3] In this motion for summary judgment, the plaintiff is seeking a permanent injunction prohibiting the defendants from operating this equipment and damages of $50,000. Although neither brought a motion, the defendants assert that summary judgment should be granted in their favour dismissing the action because there is no evidence that the operation of the equipment causes a substantial and unreasonable interference with the plaintiff’s use and enjoyment of its property.

The applicable legal principles

[4] In the most recent restatement of the law, Cromwell, J. summarized the governing test at para. 19 of Antrim Truck Centre v. Ontario (Transportation), 2013 SCC 13:

The elements of a claim in private nuisance have often been expressed in terms of a two-part test of this nature: to support a claim in private nuisance the interference with the owner’s use or enjoyment of land must be both substantial and unreasonable. A substantial interference with property is one that is non-trivial. Where this threshold is met, the inquiry precedes to the reasonableness analysis, which is concerned with whether the non-trivial interference was also unreasonable in all the circumstances.

[5] In the statement of claim, the prayer for relief includes a claim for a “temporary” injunction. I will assume, for the purposes of this motion, that this was intended to be a request for an interlocutory injunction.

[6] An interlocutory injunction is usually sought by way of a motion for this specific relief and involves a three-part inquiry: is there a serious issue to be tried; will the moving party otherwise suffer irreparable harm; and does the balance of convenience favour granting the injunction (RJR – MacDonald Inc. v. Canada (Attorney-General)).

[7] The test is different for a permanent injunction. In 1711811 Ontario Ltd. v. Buckley Insurance Brokers Ltd., 2014 ONCA 125, Gillese, J. A. followed the decision of the British Columbia Court of Appeal in Cambie Surgeries Corp. v. British Columbia (Medical Services Commission), 2010 BCCA 396 where Groberman, J. A. stated at paras. 27 – 28:

Neither the usual nor the modified test discussed in RJR – MacDonald has application when a court is making a final (as opposed to interlocutory) determination as to whether an injunction should be granted. The issues of irreparable harm and balance of convenience are relevant to interlocutory injunctions precisely because the court does not, in such applications, have the ability to finally determine the matter in issue. A court considering an application for a final injunction, on the other hand, will fully evaluate the legal rights of the parties.

In order to obtain final injunctive relief, a party is required to establish its legal rights. The court must then determine whether an injunction is an appropriate remedy. Irreparable harm and balance of convenience are not, per se, relevant to the granting of a final injunction, though some of the evidence that a court would use to evaluate those issues on an interlocutory injunction application might also be considered in evaluating whether the court ought to exercise its discretion to grant final injunctive relief.

[8] In overturning the motion judge’s decision to grant a permanent injunction, she emphasized that, because of the conflicting evidence, there were credibility findings which required a trial and went on to state at para. 86:

In general terms, injunctive relief is onerous. It is available only when truly necessary to ensure that a party is not deprived of his or her rights. Even when injunctive relief is appropriate, the particulars of that relief must be determined so as to ensure a proper balancing of the parties’ respective interests. That also demands a careful weighing of the evidence.

[9] Summary judgment is available if I conclude that the evidence allows me to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure. If I find that there is a genuine issue requiring a trial, I must next determine if, by relying upon the expanded fact-finding powers under rule 20.04 (2.1) of the Rules of Civil Procedure (the “Rules”), I can achieve the same result: Hryniak v. Mauldin, 2014 SCC 7 at para. 66.

[10] Although 1711811 Ontario Ltd. must be read in light of Hryniak, I bear in mind the admonition of Nordheimer, J. A. in Mason v. Perras Mongenais, 2018 ONCA 978 at para. 44:

With respect, the culture shift referenced in Hryniak is not as dramatic or as radical as the motion judge would have it. The shift recommended by Hryniak was away from the very restrictive use of summary judgment, that had developed, to a more expansive application of the summary judgment procedure. However, nothing in Hryniak detracts from the overriding principle that summary judgment is only appropriate where it leads to “a fair process and just adjudication”: Hryniak at para. 33. Certainly there is nothing in Hryniak that suggests that trials are now to be viewed as the resolution option of last resort. Put simply, summary judgment remains the exception, not the rule.

Decision

[11] There is a voluminous record consisting of the affidavits of nine witnesses who are the three principals of the corporate parties (Brian Reid, Gary Smith and John Stathopoulos), four tenants at 164 Princess Street (Ananthan Karunakaran, Matthew Stukel, Matthias Melhorn-Boe and Rachel Baumander) and two experts (Laura Reavie, an environmental consultant, and Michael Cotman, a real estate appraiser). All of them were cross-examined with the exception of Ms. Baumander.

[12] It is unnecessary to review the evidence at length. There are two issues – whether the operation of the equipment constitutes an actionable nuisance and the appropriate remedy – which clearly require a trial for a judge to come to a fair and just adjudication of this dispute.

[13] Based on the record, I can reach the following conclusions. Both buildings are located in downtown Kingston where there is a mix of commercial and residential properties, including many restaurants, coffee shops, bars and retail stores. The compressor operates intermittently and creates a level of noise that Ms. Reavie compared to that of a bathroom shower or a dishwasher and which the residential tenants at 164 Princess Street can hear within their apartments if the television is not on or music is being played at a low volume. The coffee roaster is generally used no more than once a week for one to two hours at a time; the odour is transitory and confined to the hallway. The equipment, when it is an operation, might contribute to a brief rise in the ambient temperature in the hallway of no more than a few degrees. None of the residential tenants have moved because of the alleged nuisance nor do they plan to move. They have not sought a reduction in rent nor has the plaintiff offered one. The plaintiff’s commercial tenant has no complaints about noise, smell or the temperature.

[14] The equipment complies with all government requirements. The noise, at its loudest, does not exceed any recognized industry or government standard. There are accepted temperature and air quality standards but they apply to dwelling units, not common areas such as the hallway. The temperature in the hallway exceeded this standard by a few degrees when Ms. Reavie measured the temperature on two dates in 2018. The air quality was acceptable and met the parameters for carbon monoxide, carbon dioxide and relative humidity.

[15] There was some evidence about tenants observing smoke or a “haze” attributable to the coffee roaster but it was not clear to me whether this happened before or after the flue was enclosed. There was an incident on June 15, 2018 when Kingston Fire & Rescue Services responded to a call about excessive smoke at the premises. However, neither defendant was charged with a Fire Code violation and, as Ms. Reavie concluded, there was no ongoing issue with air quality in August, 2018.

[16] Although the apartments have remained occupied and there is no evidence from the tenants themselves that they paid less than market rent because of the condition of the property, Mr. Cotman concluded that the market value of the property has declined by $60,000. The defendants take issue with his opinion because he did not consider an adequate rental history of the building; relied on the rent paid at properties that were not comparable; failed to take into account the potential impact of imprudent property management; and made factual assumptions about the purported nuisance which are incorrect. Further, according to the plaintiff’s financial statement, the company earned its first profit in several years in 2017 and the rental income for that year was more than double the amount for each of the past five years. [1]

[17] There is also conflicting evidence from other tenants of both buildings. Although they did not swear affidavits, their experiences were summarized in exhibits attached to one of the affidavits sworn by Mr. Smith, the principal of Salshir. This evidence is of limited value because of its hearsay nature but it does highlight how fact driven a nuisance action is, particularly one based on subjective complaints about transient odours, intermittent noise and modest temperature fluctuations.

[18] Summary judgment is a blunt tool for the balancing of interests that must occur when permanent injunctive relief is claimed. In this case, the defendants proposed a resolution that could minimize, if not eliminate, the odour created by the coffee roaster which was rejected by the plaintiff. There is also evidence that, if the use of the equipment is enjoined, Crave would incur substantial costs to relocate it which, in turn, could imperil the success of the business. With the full appreciation of evidence that would be gained from a trial, a judge could impose conditions on the use of the equipment that would accomplish the paramount objective of a fair and just adjudication. That is not possible based on the evidence adduced in this motion.

[19] Mr. Gwynne-Timothy acknowledged at the hearing of the motion that, if I concluded that damages were an adequate substitute, I could dismiss the motion in respect of the permanent injunction but find that the plaintiff is entitled to summary judgment on the issue of damages which would be assessed in accordance with the report of Mr. Cotman. Partial summary judgment is not appropriate in this case because there is a real risk of inconsistent findings: Service Mold+Aerospace Inc. v. Khalaf, 2019 ONCA 369. At trial, a judge could find that the plaintiff has not proven a nuisance or, alternatively, grant injunctive relief. Either would undermine (and potentially eliminate) the damages claim.

[20] I would likewise decline the defendants’ request for summary judgment. The Court of Appeal recently emphasized caution in granting “boomerang summary judgment”: Drummond v. Cadillac Fairview Corporation Limited, 2019 ONCA 447. I am concerned about the procedural unfairness in doing so because not only did the defendants not bring a motion, they did not request that relief in their factums other than the supplementary factum of Crave which was delivered shortly before the hearing of the motion on May 17, 2019. I also made an order on October 31, 2018 when the motion was adjourned that no further affidavit material be filed by the plaintiff. I learned at the hearing that Crave had not operated the coffee roaster since January 2019 because of some concerns raised by the Technical Standards and Safety Authority. Approval for its operation was formally granted on the date the motion was argued. In these circumstances, it would not be fair and just to dismiss the action without giving the plaintiff the opportunity to adduce further evidence to demonstrate that there is a genuine issue for trial.

Disposition

[21] The motion is dismissed. I will remain seized of this matter and hear further submissions if necessary with respect to any directions and terms for the trial under rule 20.05. The submissions can be made in writing. [2] The defendants are at liberty to bring summary judgment motions which do not have to be before me but, because I am familiar with the evidence, I will hear them if the parties agree. The parties provided me with cost outlines at the conclusion of the hearing. The defendants, as the successful parties, are presumptively entitled to costs. If no agreement can be reached on costs, the defendants shall deliver their written submissions which should be no longer than two pages exclusive of any offers to settle, dockets or case law within 15 days of the release of this decision. The plaintiff has 10 days in which to deliver its reply submissions that are to be of the same length. The submissions should be filed at the Kingston courthouse with copies sent by email to my judicial assistant, Mary-Ann Valiquette at Mary-Ann.Valiquette@ontario.ca.

Hurley, J Date: July 5, 2019

Footnotes:

[1] Mr. Reid, the principal of the plaintiff, was not asked any questions about the financial statement but it was made an exhibit at his cross-examination. I recognize that there may be an explanation for these financial results that could diminish their relevance to Mr. Cotman’s opinion but it is odd that he did not at least consider them.

[2] One of the plaintiff’s claims is for reimbursement of one-half of the cost of installing a lock on the front door in November 2016. The full amount was $656.10. This is a claim that should be litigated in the Small Claims Court if it cannot be resolved