Court File and Parties
COURT FILE NO.: 14-61522
DATE: 20200306
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
BYEONGHEON LEE
Plaintiff
– and –
2321324 ONTARIO INC.
Defendant
The Plaintiff, in person
Mr. R. Bosada and Ms. M. Younnis, for the Defendant
HEARD: February 26-28, 2020
REASONS FOR decision
C.T. Hackland J..
Overview
[1] This is the trial of an issue to assess the damages the plaintiff, Mr. Lee, has suffered as a result of the wrongful termination of his commercial tenancy by his former landlord, the defendant. The Court of Appeal determined that the termination of Mr. Lee’s tenancy was wrongful, see 2017 ONCA 798, and remitted the matter to the Superior Court for a determination of Mr. Lee’s damages.
[2] The court was faced with some challenges in this hearing. Mr. Lee’s English is limited and difficult to understand. This problem was identified and addressed at a case conference in this matter held on August 17, 2018, at which the case conference judge stated in her endorsement:
At the case conference, the plaintiff expressed concerns about his ability to communicate in English. I informed him that interpretation services are available at the court house and that if he wishes to have a Korean interpreter he should make inquiries and schedule an interpreter well in advance of the trial date. The plaintiff said that he did not have complete faith in interpreters. I informed him that whether or not to request an interpreter was his choice to make but that if he chose not to request an interpreter, it would not be open to him later to suggest that the process had been unfair to him because of his proficiency in English.
[3] At the opening of this hearing I discussed the language issue with Mr. Lee. He expressed that he had made no arrangements for a translator and did not wish to do so. He said he was well able to understand English. I invited Mr. Lee to speak up and ask questions if he was not following what was said during the proceeding and he did so from time to time. I am satisfied that Mr. Lee understood the proceedings adequately and was able to make himself understood.
[4] The defendant landlord did not call evidence. Mr. Lee testified on his own behalf and he also called his former lawyer to testify. He also intended to call a Mr. Desjardins, the manager of a company from whom Mr. Lee obtained a quotation for the cost of moving his equipment out of the rented premises following the landlord’s termination of his lease. However, he made no arrangements for this witness to attend court and in any event the witness was in Florida until mid-April. I asked Mr. Lee if he wished to adjourn the trial until the witness was available and he expressed that he did not want an adjournment and wished to proceed.
[5] Mr. Lee filed in evidence an affidavit of documents, with copies of the documents. Unfortunately, he had no documentation to substantiate the revenues from his dry-cleaning business – no income statements, no tax returns, no HST returns and no bank statements. He explained that he did not file tax returns or HST returns. He spent the cash proceeds of the business on his own living expenses and he paid no taxes, nor did he remit the HST he collected. He had no accountant or bookkeeper in the fall of 2012 when his lease was terminated. He had a bank account but at this point no longer has any banking information.
[6] Mr. Lee testified that in 2012, and indeed for several years before, he had no fixed address and lived out of his automobile and often slept at the business’ premises. He advised that he continues to live in his automobile and that it is quite comfortable.
The Facts
[7] Mr. Lee testified that he ran a dry-cleaning business out of the leased premises, and he also had a second location not far away, which was leased from a different landlord. He did sewing and washing at both locations, but all of his dry-cleaning equipment was in the leased premises involved in this proceeding and all the dry-cleaning was done on the leased premises, including clothes dropped off by customers at the other location.
[8] Documentation in evidence shows that Mr. Lee bought the dry-cleaning business in November of 2004 and took an assignment of a 12-year lease for the subject premises, ending in 2012. At the time of the lease termination (October 2012) he was on a month-to-month lease with the defendant landlord. In the fall of 2012, he had been in possession of the premises for about 8 years.
[9] Documents filed in evidence establish the leased premises (unit 38, 500 Eagleson Road, Kanata) in 2011 was subject to a rental of $3,332.13 monthly; inclusive of common expenses. An estoppel certificate dated March 12, 2012, signed by Mr. Lee, confirms that the original term of the lease commenced March 1, 2000 (with the prior owner) and the base rent as of 2011 was $21,085 for the 1,300 square feet leased premises. Mr. Lee attempted to disclaim the estoppel certificate but admitted he had signed the signature page (page 2). I find that the estoppel certificate (exhibit 8) accurately records the terms of the lease at that point in time. I accept Mr. Lee’s testimony that the base rent plus common area charges totalled $3,332.13, which was the total monthly rental he paid in both 2011 and 2012.
[10] As noted previously, the original 12-year lease, which was assigned to Mr. Lee when he bought the dry-cleaning business in 2004, ended in February 2012 at which time Mr. Lee’s tenancy continued on a month-to-month basis. Shortly after the lease converted, the defendant landlord’s property manager chose to demand from Mr. Lee that he furnish proof that he had taken a dry-cleaning course which the property manager felt was required by a provincial environmental regulation. On April 20, 2012, the property manager notified Mr. Lee in writing that he had 90 days to furnish proof that he had taken the course, failing which his tenancy would be terminated. A similar letter was sent to Mr. Lee in June of 2012.
[11] On August 29, 2012, the defendant’s property manager sent Mr. Lee a letter advising that his tenancy was being terminated effective September 30, 2012, due to his failure to comply with the environmental regulation. On October 4, 2012, a Notice to Terminate was posted on the leased premises and a bailiff changed the locks. Mr. Lee acknowledged that he has not paid the September rent.
[12] Mr. Lee testified that he viewed he property manager’s actions as harassment and he tried repeatedly but without success to explain that he was not required to take the course. As noted previously the Court of Appeal held that Mr. Lee was correct in his position that he was not required to take the dry-cleaning course and he was therefore wrongly evicted from the premises.
[13] Between the date of eviction until late December 2012, a period of nearly 3 months, Mr. Lee’s equipment remained locked in the premises and at some point in time he learned that the landlord had disposed of the equipment. Mr. Lee testified that he obtained one and possibly two estimates of the cost of moving his dry-cleaning equipment to his other premises. He was unhappy with these estimates and he was unwilling or unable to pay the amount the landlord’s bailiff told Mr. Lee’s lawyer that it would cost to move all the equipment, hook it up in the new premises and dispose of certain chemicals, etc. The cost quoted by the bailiff was $11,000, as set out in an email dated December 5, 2012, sent to Mr. Lee’s lawyer.
[14] Mr. Lee’s lawyer testified that she made representations on his behalf about the lease termination and subsequently tried to encourage Mr. Lee to meet with the bailiff and otherwise arrange to retrieve his equipment. However, she got no co-operation from Mr. Lee, who failed to attend a number of meetings with the landlord’s agent. Mr. Lee’s lawyer terminated her relationship with him.
[15] Mr. Lee was unable to explain why he never took any effective steps to retrieve his equipment. He seemed to have developed a conflictual situation with the company who he initially sought an estimate from, and he agreed that he refused to meet with the bailiff. As noted, Mr. Lee’s former lawyer confirmed that Mr. Lee would not co-operate with her efforts to work out a solution. I find that Mr. Lee abandoned his initial efforts to engage an agent to disconnect and move his dry-cleaning equipment out of the leased premises. I find that this constituted a failure on Mr. Lee’s part to act reasonably to mitigate his damages.
[16] Mr. Lee claims damages for the wrongful termination of his tenancy under four headings:
(i) General damages for harassment;
(ii) Damages for loss of business income
(iii) Damages for loss of his dry-cleaning equipment; and
(iv) Damages for mental distress.
General Damages
[17] No one testified for the defendant landlord and accordingly the actions of its property manager in terminating Mr. Lee’s tenancy without cause remained unexplained. The landlord could have terminated the tenancy on one month’s notice yet chose not to. Mr. Lee said he felt very harassed by the landlord’s actions and he suffered a major disruption to his lifestyle. He became very emotional in explaining his level of distress at the time. One suspects Mr. Lee might have been viewed negatively by the landlord given his habit of sleeping in the business premises and living out of his car and generally being himself. I conclude that Mr. Lee was treated unfairly, the cause relied on for the termination was a pretext and it was readily foreseeable that the lease termination could destroy Mr. Lee’s business, which is essentially what happened. Mr. Lee’s other location was no longer viable because all of the dry-cleaning was done with the machinery in the Eagleson Road premises. The other location closed within a year, according to Mr. Lee.
[18] While I appreciate that general damages are not normally available in respect of a breach of a commercial lease, I find that on these facts Mr. Lee has suffered a degree of aggravated damages which created an obstacle for him to transition to some other form of remunerative endeavor. I draw an analogy with the bad faith discharge cases in employment law where harsh and unfair treatment in the context of terminating an employee can be recognized with aggravated damages. I award Mr. Lee $5000 for aggravated damages. As noted below there is an overlap with damages for mental distress in the circumstances of this case and I have chosen to award aggravated damages.
Loss of Income
[19] Mr. Lee claims he lost business income from the wrongful termination of his lease. He had no documentation to establish a loss of income. He explained that at least a third of his business revenue was received in cash and he simply used this for his personal expenses, the rest he used to pay his business expenses. He suggested he was deprived of $3,000-$4,000 monthly of cash revenue when he lost his tenancy. Counsel for the defendant submitted the reason Mr. Lee lived in his automobile was because his business revenues were very modest. I agree with that observation. However, I accept Mr. Lee’s estimate of his monthly loss, even in the absence of documentation.
[20] Accepting as I do that Mr. Lee was cut off from his cash receipts from his business, I find that he suffered a loss of $3,000 per month from his lease termination. I will award him 60 days income loss ($6,000) in the circumstances. This reflects that a lawful termination of this month-to-month tenancy could be achieved on 30 day’s notice and it would have taken an additional month to deliver the necessary notices and make the required administrative arrangements.
Equipment
[21] There is no evidence from the defendant as to how, when or why it disposed of Mr. Lee’s dry-cleaning machine. The court is unaware of what the net proceeds of the disposal of the equipment was, if anything. Mr. Lee led no evidence as to the value of the equipment at the time of disposal. He did provide a quotation for the cost of buying a new dry-cleaning machine ($60,000). He confirmed that his dry-cleaning machine was already four years old when he bought it as part of the purchase of the business in 2004. I note that in the lawyer’s reporting letter to Mr. Lee when he bought the dry-cleaning business in 2004, there appears in the trust statement an entry “pad to Equirex Leasing Corp $33,292.89”, which appears to be the buy out cost of the equipment lease. I think this was the acquisition cost to Mr. Lee of what was, by 2012, a twelve-year-old piece of equipment. I would estimate that the value of this equipment was $5,000 when it was disposed of by the landlord and I award that sum to Mr. Lee. As noted, I have no evidence as to the landlord’s disposal costs if any, or what the proceeds of disposal may have been. I reject the landlord’s assertion that it was entitled to simply dispose of Mr. Lee’s equipment because he did not pay the bailiff $11,000 to retrieve the equipment.
Mental Suffering
[22] Mr. Lee has not established a claim for mental suffering beyond the aggravated damages I have awarded in paragraph 18 of these reasons. Mr. Lee has filed a copy of his family doctor’s clinic chart, which reports that Mr. Lee “denies feeling depressed or sad”. The doctor’s notes do however reflect Mr. Lee’s difficult social situation – language difficulties, unemployment, poverty, frustration and stress. A referral is made by the doctor for social counselling. The chart also reflects, and Mr. Lee confirmed in his testimony, that he is involved in at least several other legal proceedings. I can not conclude that the defendant is in any way responsible for the plaintiff’s difficult ongoing social situation.
Punitive Damages
[23] I find that Mr. Lee has failed to establish any entitlement to punitive damages. This was a month to month commercial lease. The defendant’s property manager mishandled the termination of the lease, however there is no clear evidence of malice or high handed or abusive treatment of Mr. Lee. Mr. Lee’s problems in transitioning himself and his equipment out of the leased premises into his other outlet are not the fault or the responsibility of the landlord, nor are the obvious personal challenges he faced at the time and continues to face.
Disposition
[24] In summary the plaintiff is awarded damages in the sum of $16,000, for the wrongful termination of his commercial tenancy.
[25] I make no order as to costs. This case should have been brought by the plaintiff, if at all, in the Small Claims Court. If the defendant has any costs entitlement in the circumstances, I would disallow such costs as the plaintiff was terminated in breach of the lease.
Mr. Justice Charles T. Hackland
Released: Friday March 6, 2020
COURT FILE NO.: 14-61522
DATE: 20200306
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
BYEONGHEON LEE
Plaintiff
– and –
2321324 ONTARIO INC.
Defendant
REASONS FOR Decision
C.T. Hackland. J.
Released: March 6, 2020