Court File and Parties

Citation: 2020 ONSC 2111 Court File No.: CV-1112-13 Date: 2020/04/06 Ontario Superior Court of Justice

Between: VMAT (Oakville) Inc. o/a Suvai Classic Indian Restaurant, Plaintiff

And: Trafalgar Terrace Enterprise Inc. and Dominic Scarfo, Defendants

Counsel: Timothy J. McGurrin and Alexander Verrilli, for the Plaintiff Paul Marshall, for the Defendants

Heard: January 27, 28, 29, 30, 31, February 3, 4, 5, 6, 7, 10, 24, 2020

Reasons for Judgment

P. R. SWEENY J.

Introduction

[1] This is a claim by the plaintiff, VMAT (Oakville) Inc. O/A Suvai Classic Indian Cuisine (Suvai, or the Tenant) against Trafalgar Terrace Enterprises Inc. (TTE, or the Landlord) and Dominic Scarfo arising out of the termination of the lease of the premises at 300 Lakeshore Road East, Unit 5, Oakville, Ontario (the Restaurant).

[2] The plaintiff claims damages for the alleged wrongful termination of the lease, amounts owing to the Tenant by the Landlord which were not paid, and punitive damages. The plaintiff claims judgment against Dominic Scarfo, the director and officer of the Landlord, personally. The Landlord has counterclaimed seeking accelerated unpaid rent pursuant to the lease.

[3] For reasons that follow, I find the Landlord improperly terminated the lease and is liable to the Tenant for damages as a result of that improper termination in the amount of $205,000 together with reimbursement of deposit monies paid and the amount paid to clean ducts at the commencement of the lease. The counterclaim is dismissed.

Important Witnesses

[4] Thirumaran Sivaprakasam is the president and sole director of the plaintiff corporation. He is a trained chef. He opened an Indian restaurant in Waterloo in 2003. His wife, his son, and daughter assisted in the restaurant. It was successful. He wanted to expand. With the assistance of his son, who graduated with a business degree and a minor in marketing, it was determined that Oakville Ontario was an appropriate place to expand.

[5] I found him to be a credible and reliable witness. His evidence was consistent with the documents. For the most part, he did not exaggerate his complaints. He did speak quickly, and there were some issues with language, for example, he used the term toilet to mean the whole washroom as opposed to the fixture in the washroom. This did not detract from his overall evidence. He did assess Mr. Scarfo as non-confrontational and for the most part respectful when he met in person. However, Mr. Scarfo would not deal with issues.

[6] In July or August 2012, Eric Smith began to work as a handyman for the Landlord. Mr. Smith gave evidence that while the Landlord treated his Tenants as family, Mr. Smith was more of a “Donald Trump”. He specifically stated that while he had business sense, the Landlord, referring to Mr. Scarfo, wanted to help his Tenants succeed.

[7] Mr. Smith took it upon himself to find ways that the tenancy could be terminated. He did research on the Internet. He drafted letters for the Landlord to send to the Tenant raising issues of public safety. He asserted that there was a bylaw or building code requirement with respect to the hot water heater. Mr. Smith challenged the individual who installed the hot water heater for the Tenant to produce proof he was licensed.

[8] Mr. Smith testified that he has difficulties with long-term memory. He was unable to recall certain events. It is alleged that he made derogatory comments to the Tenant with respect to his food preparation and repeatedly used coarse language. Mr. Smith denied doing so. I have no hesitation in accepting the evidence of Mr. Sivaprakasam over Mr. Smith. Mr. Smith embellished his evidence. Although he asserted there was a bylaw with respect to the water heater, when asked by the bailiff about it, he then criticized the bailiff for not knowing his job. He was not a reliable witness and he was not a credible witness on a number of issues.

[9] Dominic Scarfo’s credibility was impeached in that his evidence at trial contradicted his evidence given on his examination for discovery. I find Mr. Scarfo’s evidence to be unreliable. I find that Mr. Smith made derogatory comments and used coarse language in the presence of the Tenant, but Mr. Scarfo did not. On some occasions, he was present when Mr. Smith made the comments and he said nothing. Mr. Sivaprakasam testified that Mr. Scarfo did not use improper language, only that he was present on some occasions when Mr. Smith did, and Mr. Scarfo did not do anything to admonish Mr. Smith. I accept this was the case.

Background

[10] In late 2011, the Tenant purchased the assets of a restaurant which had operated at 300 Lakeshore Road East, Unit 5, Oakville. The Tenant entered into an agreement to lease the premises from the Landlord. The agreement to lease required that the Tenant execute the Landlord’s standard form lease within 15 days of its receipt.

[11] The Tenant paid $64,000 to purchase the assets of the restaurant. The Tenant took possession of the restaurant and made significant improvements. New equipment was purchased, walls were painted, floors were redone, and equipment was cleaned. The grand opening was on April 15, 2012.

[12] In August 2012, a representative of Consumer Gas attended because of a problem in the kitchen. There was also a problem with the hot water heater in an adjacent unit used as a hair salon of which Mr. Scarfo was a part owner. The issues in the restaurant were remedied by the Tenant. The issues in the hair salon were also remedied. I raise the issue of the hair salon because the landlord later raised this gas issue as an example of a breach of the lease for the Tenant which, in my view, was unfair.

[13] It appears that there were some complaints with respect to restaurant odour. However, the Landlord never brought this to the attention of the Tenant prior to this litigation. There was a conflict in the evidence as to whether the odour was ever brought to the attention of the Tenant from other tenants. Mr. Sivaprakasam says he was never told. The part owner of the hair salon says she did mention it on a few occasions. Although the odour may have been raised on one or two occasions, I find that the odour complaints were certainly not made on an ongoing basis. The Tenant was not aware that this was a real concern.

[14] On November 30, 2012, there was a problem with water leaking from the restaurant to the units below. This was as a result of damage to plastic pipes leading to the bar taps in the restaurant caused by rodent damage. The problem was remedied by the Tenant. The Tenant instituted a pest control program immediately as a result of this issue.

[15] On November 30, the Landlord wrote to the Tenant about this issue. The Tenant responded and advised that the issue had been addressed.

[16] On December 2, 2012, there was a further incident of water damage. However, this occurred in the ceiling of Unit 1. There was no water coming from the kitchen according to the records of the plumber who investigated it. There is no evidence that it was as a result any negligence on the part of the restaurant.

[17] On December 2, following the second water incident, the Landlord wrote to the Tenant and raised issues with respect to the initial work done by the Tenant to the premises before the restaurant started operating, and also raised issues with respect to the ongoing operations, including the overall lack of cleanliness and upkeep. The Tenant responded by objecting to the Landlord’s characterization of the issues. The Tenant also raised the failure of the landlord to clean the ducts at the outset of the lease as the landlord had undertaken to do in writing with the prior tenant. Mr. Sivaprakasam wrote that he had specifically negotiated this through the prior tenant. This issue continued to be raised by the Tenant.

[18] The relationship was becoming strained.

[19] The Landlord made claims to its insurer as a result of the water damage which occurred on November and December. These claims were accepted by the insurer. The Tenant was never advised of these claims until after this litigation commenced.

[20] On February 11, 2013, the Landlord wrote to the Tenant requesting certain items including (1) a signed copy of the lease agreement; (2) proof of valid insurance; (3) proof of ongoing professional pest/rodent control; (4) proof of professional cleaning and maintenance of overhead fan system; (5) proof of up-to-update inspection of the fire suppression system; and (6) proof of current health unit inspection. This letter was drafted by Mr. Smith, as were most letters sent by the Landlord to the Tenant.

[21] The Tenant responded by letter dated February 13, 2013. The Tenant objected to the requests for the document and the Landlord’s interference with his business. The issue of the duct cleaning was raised again. Nothing was resolved.

[22] On April 22, 2013, the Landlord delivered another letter to the Tenant requesting a signed copy of the lease agreement and the other items requested in the letter of February 11, 2013. The Tenant did not respond in writing.

[23] Mr. Sivaprakasam testified that he objected to certain terms in the lease. It was too pro-landlord. He requested an opportunity to meet on several occasions to discuss the lease issues. The landlord refused to meet. No meeting ever occurred.

[24] On June 24, 2013, the hot water tank in the restaurant leaked: Water migrated into the units below. The water was turned off. The hot water tank was replaced by the Tenant. The Landlord initially refused to turn the hot water on again when requested.

[25] The Landlord took the position that there was some bylaw or building code requirement with respect to the type of hot water heater to be used for the restaurant. The Landlord asserted that the Tenant had to comply with such a bylaw. This was based on advice given to him by Mr. Smith. There is no bylaw which would govern the situation. Ultimately, the water was turned on and there was some leakage which could have been detected had the Landlord turned the water on when requested by the Tenant.

[26] By this point, the relationship between the Landlord and Tenant was significantly strained.

[27] The Landlord decided that the Tenant should be evicted. On July 8, 2013, the Landlord wrote to the Tenant requesting the items sought in prior correspondence. In addition, the Landlord asserted concerns with respect to the water heater that was installed and other matters.

[28] The Tenant responded on July 10, 2013 and addressed the issues and a signed lease was delivered to the landlord.

[29] The Landlord retained a bailiff. On July 12, 2013 the bailiff served a Notice under the Commercial Tenancies Act, R.S.O. 1990, c. L.7. The Notice listed two breaches:

A. The Tenant has changed a hot water tank that is non-conforming to municipal by-law B. The Tenant has caused flooding and water damage to the building and other Tenants

[30] On July 16, a new Notice was sent adding the following breach:

The Tenant has not maintained the overhead fan cleaning and obtained fire suppression system re-validation.

[31] The Tenant was given 30 days from July 12, 2013 to make the repairs and remedy the breaches. The Tenant took immediate steps to address the fire suppression system. In addition, arrangements were made to clean the ducts and overhead fan.

[32] Unfortunately, Mr. Sivaprakasam’s mother-in-law was ill. He was required to travel to India. The Landlord was advised of this.

[33] On July 22, 2013, the Landlord advised the Tenant, in writing, that a plumber was coming in to replace the drains on the toilets in the Restaurant. It appears there was a leak following this event.

[34] Correspondence was exchanged between the Tenant, the lawyer for the Landlord, and a lawyer for the Tenant. The Tenant proposed a meeting with the Landlord which did not occur. There was no resolution of the issues.

[35] A notice of termination of tenancy was delivered on August 13, 2013 and the locks were changed on that date.

[36] After several weeks, the Tenant was able to remove some of the equipment.

[37] This claim was issued December 17, 2013. The claim was amended May 29, 2014. A statement of defence and counterclaim was delivered June 26, 2014. A reply and statement of defence to counterclaim was delivered July 30, 2014.

Issues

[38] The issues are:

(1) Did the Landlord lawfully terminate the tenancy? (2) What are the plaintiff’s compensatory damages? (3) Is the plaintiff entitled to punitive damages? (4) Is Dominic Scarfo personally liable?

(1) Did the Landlord lawfully terminate the tenancy?

[39] There are three sub-issues to be addressed:

A. Was the Landlord’s Notice deficient? B. Did the acceptance of the August 1, 2013 rent disentitle the Landlord to rely on the Notice? C. Has the Landlord established that the breaches as set out in the Notice occurred, were not satisfactorily remedied, and were sufficient to justify the termination of the lease?

A. Was the notice deficient?

[40] With respect to defects in the Notice Form, the corporate name of the plaintiff is incorrect, and the Landlord is listed as Dominic Scarfo and not TTE, I view these as defects which would not render the Notice invalid.

[41] Based on the evidence, I am satisfied that the Landlord did not wish to have any of the alleged breaches remedied. The Landlord sought eviction and termination of the lease. I accept that if the breach is not quantifiable in damages, then an amount need not be inserted for the reasonable cost of the repairs as a result of causing undue damage to the premises either willingly or through negligence (see Chick N’ Treats Inc. v. Woodside Square Ltd. (1990), 38 O.A.C. 138).

[42] In this case, some of the breaches were quantifiable in damages. For example, the cost to clean the overhead fan was quantifiable. The reason there was no amount included is because the Landlord did not wish to have the breach remedied. The Landlord wanted to evict the Tenant. I find that the notice was deficient for failing to include an amount for compensation. However, if I am wrong on this issue, I will go on to consider the other issues.

B. Did the acceptance of the rent on August 1 disentitle the Landlord from relying on the notice?

[43] The Tenant asserts that the acceptance of rent disentitles the Landlord from relying on the identified conduct as alleged basis for lease termination or forfeiture (see 1328773 Ontario Inc. v. 2047152 Ontario Ltd, 2013 ONSC 4953 (Angling Outfitters) at para. 18).

[44] The Landlord refers to section 12.3 of the lease which reads in part:

The subsequent acceptance of rent by the Landlord shall not be deemed to be a waiver of any preceding breach by the Tenant of any term, covenant or condition regardless of the Landlord’s knowledge of such preceding breach at the time of the acceptance of such rent.

[45] The Landlord says there was no waiver. The Tenant refers to the decision of Fitkid (York) Inc. v. 1277633 Ontario Ltd, [2002] O. J. No. 3959 which holds at para 30:

Even where there is a term in the lease governing waiver, the cases of waiver indicate that the courts look at the conduct of the Landlord to determine whether it has elected not to terminate the lease and the circumstances after the right of forfeiture arises.

In this case, the Landlord accepted the rent notwithstanding that it already had the last months rent. This would seem to support the argument that the Landlord intended to continue with the lease. However, given the Landlord’s stated intention to evict the Tenant, it would not be reasonable to see this as an affirmation that the tenancy was to continue. The acceptance of rent was not appropriate, but I do not determine the issue based on the Landlord’s acceptance of the August rent.

C. Has the Landlord established that the alleged breaches set out in the Notice occurred, were not remedied, and were sufficient to justify termination?

[46] The law protects Tenants from arbitrary reentry and forfeiture. In ClubLink Corp. v. Pro-hedge funds Inc., 2009 O.J. No. 2660 at para. 31, G. R. Strathy J (as he then was) wrote:

Had I concluded otherwise, I would nevertheless find the Tenant’s conduct was not of sufficient gravity to entitle a Landlord to terminate the Lease. It has been noted in a number of cases that forfeiture of the lease is a serious event and that courts do not look favourably on forfeiture unless the Tenant’s behaviour has been persistent, substantial or reprehensible. [citations omitted]

[47] There was no bylaw with which the plaintiff could comply with respect to the hot water tank. Therefore, this cannot form the basis for the termination of the tenancy.

[48] With respect to the water leakage, the events had occurred in the past. I am satisfied that the water leakage was not caused by any negligence or intentional conduct on the part of the Tenant. The Landlord was fully compensated for any losses by his insurance. Therefore, this cannot form the basis for the termination of the lease.

[49] With respect to the cleaning of the overhead fan, I find the Tenant did have the overhead fan cleaned. In any event, the failure to have the overhead fan cleaned is not sufficient to terminate the lease. It is not persistent, substantial or reprehensible conduct. It cannot form the basis for the termination of the lease.

[50] When the fire suppression system was upgraded in January 2012, the Tenant was advised that the system needed to be tied into the fire alarm panel for the entire building. The fire alarm panel for the entire building is the responsibility and property of the Landlord. The Tenant raised the issue with the Landlord and the Landlord advised the Tenant it would not be necessary.

[51] Mr. Sivaprakasam, in the course of an extensive cross-examination, stated facetiously, that he had committed a great crime by failing to have the fire suppression system hooked up to the fire alarm system. He also testified that the Landlord was guilty of the same crime. In the context of the cross-examination, I do not accept this evidence as a concession that the Tenant had breached a term of the lease. I am satisfied that the Landlord did not require this hookup notwithstanding it was required by law. I note the system was passed by the fire department. The fire suppression system need not be tied into the building fire alarm system to be effective. The fire suppression system operates regardless of whether or not it is tied into the building alarm.

[52] With respect to the fire suppression system re-validation as requested in the Notice, I am satisfied that the Tenant was aware of the requirement to hook the fire suppression system up to the building’s fire alarm. This issue had been raised with the Landlord. However, the Landlord had declined to make that hookup. I find that the Tenant made reasonable efforts to bring the fire suppression system into compliance in accordance with the Notice. In any event, this is not persistent, substantial, or reprehensible conduct.

[53] I find that any alleged breaches were, in fact, satisfactorily remedied. If the Landlord wished to have the fire suppression system attached to the building fire alarm system, the Landlord would need to facilitate that. The Landlord did not do so.

[54] In any event, the alleged breaches are insufficient to justify termination of the lease.

[55] The Landlord also submitted that there were other breaches which entitled the Landlord to terminate the lease. I am satisfied that they cannot be relied upon, as the landlord is only entitled to rely on the specific alleged breaches in the Notice to allow for re-entry or to treat the lease as having been forfeited (see Angling Outfitters, supra at para. 12). In any event, the other breaches were either not established or not ongoing.

[56] The Landlord asserted the failure to provide the Landlord’s standard form of lease agreement within 15 days of receipt was a breach. The breach was remedied when the Tenant returned a signed lease. I note there is an issue with respect to whether the lease was in fact a standard form lease, but that matter need not be resolved because the Tenant did execute the lease.

[57] The Landlord asserted that the lease was in the name of VMAT Restaurant Inc. and not in the name of the VMAT (Oakville) Inc. This alleged breach is of no consequence given the admissions in the pleadings. The Landlord also submits that the indemnity was amended and not properly executed by Mr. Sivaprakasam. In my view, there is an issue as to whether the indemnity was required. Is it part of a standard form of lease? In any event, this issue was never specifically raised by the Landlord in the pleadings. In fact, the pleadings acknowledged the existence of the lease.

[58] The Landlord submitted that the failure to comply with the requirement for proof of insurance was a breach which provided a ground for terminating the lease. I find that the plaintiff provided proof of insurance. The Landlord cannot rely on a past breach. I find that the Tenant had insurance in place for the duration of the lease.

[59] The Landlord also raises a breach of a term that there be adequate ventilation to prevent odours. As I have outlined above, I do not accept that these odours were sufficient to constitute a breach of the term of the lease. Odours are a necessary part of restaurant operations. Prior complaints of gas smell and calls in to the gas company in February and August 2012 were addressed. They cannot form the basis for the termination of the lease.

[60] In the result, I find the Landlord’s purported termination of the lease was unlawful. The plaintiff is entitled to damages.

(2) What are the plaintiff’s compensatory damages?

[61] The plaintiff is entitled to reimbursement of the security deposit and last month’s rent paid-this totals $13,526.10.

[62] The Landlord failed to pay the cost of the duct cleaning as was undertaken to do in writing. The Landlord had, in fact, obtained a quote to have the exhaust system cleaned but did not do so. The commitment was made in writing addressed “To whom it may concern” and signed by Mr. Scarfo. The Landlord shall pay to the plaintiff $1,203.45 for the cost of cleaning the ducts.

[63] The main issue with respect to damages is the loss as a result of the inability to carry on business.

[64] Two experts gave evidence with respect to this matter.

Karen Grogan

[65] Karen Grogan was qualified to give expert opinion evidence in the area of investigative forensic accounting and business valuations including the calculation termination of business and personal losses due to a breach of contract, breach of fiduciary duty, and negligence.

[66] I was impressed with Ms. Grogan’s evidence. She provided a calculation of the losses sustained by plaintiff as a result of its inability to carry on business. Her methodology included looking at the restaurant operated by Mr. Sivaprakasam in Waterloo. She reviewed the source documents including point-of-sale documents to determine the appropriate income historically for the business. She looked at expenses over time. In her calculations, she accounted for increase in expenses over time and also posited an increase in sales over time. She viewed the increase in sales for the Waterloo restaurant as assisting her in determining the appropriate increase in sales for this restaurant.

Rim Grewal

[67] The defendant’s expert Parmeet Rim Grewal was qualified to give expert opinion evidence in the area of business valuations and damage quantification. He prepared a report which formed the basis for his evidence.

[68] In giving his evidence, he appeared to be an advocate on behalf of the defendant. He posited that, Mr. Sivaprakasam, would be better off working as a Walmart Greeter at a Walmart in Waterloo than in the restaurant. He purported to calculate the real cost of the use of a vehicle in the business by using maximum CRA kilometric rates applicable to reimbursing employees for their business use of a personal vehicle. This was used notwithstanding that the vehicle was purchased by the restaurant and the expenses were put through the business. By his calculation, the cost of the vehicle used in the business was in excess of $100,000.

[69] He failed to review the actual point-of-sale information to determine the actual sales. He relied on income tax returns. He made assumptions with respect to the business based on general statistics rather than taking into consideration the experience of Mr. Sivaprakasam in the restaurant in Waterloo. He asserted in his report that Mr. Sivaprakasam stole tips. In fact, the credit card tips were kept by the restaurant which was the practice in the Waterloo restaurant. Staff could keep the cash tips and received an hourly wage.

[70] In his opinion, the business was not profitable and so suffered no loss as a result of the termination of the lease

[71] I have no hesitation rejecting his opinion. His approach appeared to be based on the value of the business in a sale to an arm’s length purchaser and not quantifying the loss that this business would sustain as a result of the inability to operate because of the breach of the lease. He failed to consider this particular restaurant business and the experience of Mr. Sivaprakasam. He posited an absurd analysis of the situation, for example, the vehicle use calculation. He was clearly advocating for the defendant in his evidence.

What is the net loss?

[72] In calculating the net loss, Ms. Grogan deducted from the net loss an amount equivalent to wages saved at the Waterloo restaurant: $10,850 per year. She did this on the basis that by not working at Suvai, Mr. Sivaprakasam was able to work at the Waterloo restaurant and save wages associated with the Waterloo restaurant. This is akin to mitigation.

[73] Ms. Grogan assumed the lease would be renewed and continue for another five years. The lease had a renewal provision in it. The Tenant asserts that the lease would have been renewed. The Landlord asserts that because it would not have renewed the lease and, therefore, the plaintiff cannot claim losses for the renewal period.

[74] I find that the Landlord would have been obligated to renew the lease. Acting reasonably, in accordance with the lease and the legal principles which govern the commercial landlord-tenant relationship, it is not likely that the Landlord would be able to establish any continuing breach by the Tenant which would preclude a renewal. The right of renewal is an important part of the lease. This was addressed in the Agreement of Lease. Therefore, it is appropriate to calculate the damages on the basis that the lease would have been renewed.

[75] The restaurant was not open on certain days in June 2013 as a result of the conduct of the Landlord, which would have had a negative effect on the income. There were also some problems with signage, lighting, damage to the washroom walls, improper entry by the landlord to the restaurant without permission. and water damage and leaking into the ceiling of the restaurant. These were alleged to be a breach of the covenant for quiet enjoyment. The breach of the covenant of quiet enjoyment requires substantial, non-trifling interference with the tenant’s ability to use the premises for its intended purpose (see 846-6718 Canada Inc. v. 1779042 Interior Ltd, 2018 ONSC 1563 at para. 282). This conduct did not rise to that level. Further, the plaintiff did not allege breach of the covenant of quiet enjoyment in the claim.

[76] However, the problems likely did have had an impact on the business which would have reduced the income for the period the restaurant operated. This would suggest that the sales would have been higher than they actually were.

[77] The plaintiff spent some time researching the location of this restaurant in Oakville including reviewing the demographics and other Indian restaurants in the vicinity. It is also important to take into consideration, as Ms. Grogan did, that Mr. Sivaprakasam had significant experience in the restaurant business. This restaurant was associated with the Waterloo restaurant. The food was bought in bulk for both. Much of the preparation was done in Waterloo and the finishing was done in Oakville. This would reduce the work required in Oakville. However, it is a fact that often restaurants find it difficult to continue to operate: competition can be intense.

[78] Ms. Grogan calculated the damages of $477,286. She applied a wage savings of $90,070 to arrive at a net loss of $387,216. I find this does not adequately take into consideration the risks of the restaurant business. Ms. Grogan applied a 10% discount rate to arrive at $256,408 as the measure of the loss. I find that a greater discount should be applied. I have calculated the discount at 15% in accordance with Ms. Grogan’s analysis to be approximately $205,000 which is 53% of $387,216. I find that $205,000 is the appropriate measure of damages for plaintiff’s loss of ability to operate the restaurant as a result of the Landlord’s unlawful termination of the lease.

(3) Is the plaintiff entitled to punitive damages?

[79] Punitive damages may be awarded where conduct is malicious, high-handed, and offends the courts sense of decency. In Tsoukalas v. Domgroup Properties Ltd, [1993] O.J. No. 4378, the court awarded punitive damages in an action between a Landlord and Tenant. The court was offended by the Landlord’s actions to terminate the lease and get rid of the Tenant because it would be more profitable to have the Tenant’s lease terminated.

[80] In this case, the Tenant looks to the conduct of the Landlord in raising issues of the alleged breach of a nonexistent bylaw or building code violation with respect to the hot water heater, the attempt to terminate the lease on the basis of leaks which were not the fault of the Tenant, and the fact that the Landlord had already received compensation from an insurance company.

[81] While the Landlord did not have the grounds for terminating the lease, I am not prepared to award punitive damages. The Landlord’s conduct does not rise to the level that requires punitive damages.

(4) Is Dominic Scarfo personally liable?

[82] The Landlord is a corporate entity. Mr. Scarfo is a director and officer, and the president. There is no doubt he wanted to terminate the tenancy as Landlord. The Landlord took steps to terminate the tenancy. It is not appropriate to pierce the corporate veil to impose personal liability on Mr. Scarfo.

[83] The actions of the Landlord were improper. The plaintiff has suffered damages and is entitled to compensation. However, there is no reason to affix personal liability Mr. Scarfo. The claim is dismissed against Domenic Scarfo.

Conclusion

[84] The Plaintiff is entitled to judgment against the defendant TTE the amount of $13,526.10 for deposit monies together with prejudgment interest at 1.3% from August 13, 2013.

[85] The Plaintiff is entitled to judgment against the defendant TTE in the amount of $1,203.45 for the cost of cleaning the ducts together with prejudgment interest at 1.3% from January 30, 2012.

[86] The Plaintiff is entitled to judgment against the defendant TTE for $205,000 for losses arising out of the inability to operate the restaurant together with prejudgment interest from August 13, 2013 at 1.3%.

[87] Given my findings, the counterclaim is dismissed.

Costs

[88] If the parties are unable to agree on costs, I will accept written submissions limited to five pages plus bills of costs and any offers to settle. In light of the COVID-19 situation, the submissions are to be delivered to the generic email address for the Hamilton Court with “COSTS SUBMISSIONS” in the subject line and the short title of proceedings, file number and contact information in the body. The plaintiff shall have until April 17. The defendants shall have until April 24 to respond. The plaintiff shall have the right of reply by April 29. If submissions are not received by April 20, the costs will be considered settled.

Sweeny J. Released: April 6, 2020