Court File and Parties

COURT FILE NO.: CV-16-00126781-0000 DATE: 2021-03-30 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DYN Exporters Can. Inc., Applicant AND: 9024 Keele Park Properties Ltd., Respondent

BEFORE: Justice V. Christie

COUNSEL: Eric Brousseau, Counsel, for the Applicant George Corsianos, Counsel, for the Respondent

HEARD: March 29, 2021

ENDORSEMENT

Overview

[1] This application involves a lease which ended nearly five years ago. The Applicant, DYN Exporters Can. Inc. (“DYN”), was the tenant. The Respondent, 9024 Keele Park Properties Ltd. (“9024 KPP”), was the landlord.

[2] 9024 KPP currently holds $84,076.00 to the credit of this application and relating to DYN’s tenancy. This amount can be broken down as follows: $45,000.00 was paid pursuant to a without prejudice agreement between the parties in relation to this application, and $39,076.00 was a security deposit previously paid.

[3] This application by DYN, issued on May 16, 2016, requests an order for payment of any moneys it was overcharged or is owed under the lease with 9024 KPP. The Applicant submitted that the accounting ultimately provided by the Respondent was problematic in several respects, specifically:

a. None of the accounting meets the requirements of Article 4.6(b) under the lease, both in respect of timing and in respect of certification. Moreover, Article 4.6(c) sets out the procedure by which the parties are to resolve any differences relating to the accounting, which has not been followed;

b. The most recent accounting provided is attached as an exhibit to the affidavit of Alex Handjis, who admitted on cross-examination that he did not prepare the accounting and has little knowledge of its contents. The accounting, as an exhibit, is therefore inadmissible under r. 39.01(5), which limits the use of hearsay in applications; and

c. Given the inconsistent numbers between the various accountings, Mr. Handis’ lack of personal knowledge of and familiarity with these documents, and other extrinsic reasons to be skeptical, this court should accord little to no weight to it.

The Applicant did concede that rent for July 2016, in the amount of $34,170.00, is to be deducted from any amount returned to them. Therefore, the amount they are seeking in return is $49,906.00 ($84,076.00 - $34,170.00), in addition to damages in the additional amount of $12,253.04, relating to damage that 9024 KPP allegedly caused to DYN’s forklift in the amount of $4,797.98, and an error relating to the amount of the security deposit in the amount of $7,455.06.

[4] 9024 KPP has not brought a cross-application, however, it claims to have been underpaid by DYN by tens of thousands of dollars. Further, the Respondent submitted that during their final inspection of the property, after the Applicant had vacated, they found damage to the multiple overhead doors and weather stripping, and the warehouse and office areas were not left “broom swept” as required. Initially, the Respondent took the position that the Applicant owed $85,303.95 ($8,045.55 for utilities, $43,088.40 for occupancy costs, and $34,170.00 for July rent), an amount which does not include the costs of repair for the damages. However, based on the answers to undertakings, the Respondent subtracted the sum of $1,478.04 for an invoice found on page 146 of the Responding Application Record as not being the responsibility of the Applicant. On the other hand, the Respondent provided the correct invoice at pages 151-3 of their Record, which increased the invoiced amount by $2,231.25. Therefore, the Respondent submitted that the Applicant owes them the sum of $86,057.16, plus damages of $20,621.25.

Background

[5] On May 28, 2013, the Applicant entered into a Lease Agreement with the Respondent to rent 9024 Keele Street and Unit 2 of 9030 Keele Street, both in Vaughan. There was a walk-through conducted at the premises when DYN took over the spaces in 2013. The term of the Lease was for three years and three months, from June 1, 2013 to August 31, 2016. (Article 3.1) Rent was due on the first day of each month at a set cost, to be adjusted if square footage was re-calculated (Article 4.1) Alex Handjis was the main point of contact for the Applicant during the lease. Other relevant provisions of the lease were as follows:

4.2 Occupancy Costs It is the stated purpose and intent of Landlord and Tenant that this Lease will be fully net to Landlord. Tenant will pay to Landlord, at the times and in the manner provided in Article 4.6, the Occupancy Costs (including, without limiting the generality of the foregoing, common area costs and taxes) determined under Exhibit B.

4.3 Other Charges Tenant will pay to Landlord, at the times and in the manner provided in this Lease or, if not so provided, as reasonably required by Landlord, all amounts (other than that payable under Articles 4.1 and 4.2) which are payable by Tenant to Landlord under this Lease.

4.4 Payment of Rent- General All amounts payable by Tenant to Landlord under this Lease will be deemed to be Rent and will be payable and recoverable as Rent in the manner herein provided, and Landlord will have all rights against Tenant for default in any such payments as in the case of arrears of Rent. Rent will be paid to Landlord, without deduction or set-off, in legal tender of Canada…

4.6 Payment – Occupancy Costs

(a) Prior to the Commencement Date (or as soon as possible thereafter) and beginning of each Fiscal Year thereafter, Landlord will compute and deliver to Tenant a bona fide estimate of Occupancy Costs for the appropriate Fiscal Year and without further notice Tenant will pay to Landlord in monthly installments one-twelfth of such estimate simultaneously with Tenant’s payments of Annual Rent during such Fiscal year.

(b) Unless delayed by causes beyond Landlord’s reasonable control, Landlord will deliver to Tenant within 120 days after the end of each Fiscal year a written statement (the “Statement”) setting out in reasonable detail the amount of Occupancy Costs for such Fiscal Year and certified to be correct by an officer of Landlord, its accountant or of the management company, if any, for the Project appointed by Landlord. If the aggregate of monthly installments of Occupancy Costs actually paid by Tenant to Landlord during such Fiscal year differs from the amount of Occupancy Costs payable for such Fiscal year under Article 4.2, within 30 days after the date of delivery of the Statement, Tenant will pay or Landlord will credit the difference without interest, (as the case may be), subject to the deduction by Landlord of Rent and any other amount then owing by Tenant to Landlord under this Lease.

(c) If Landlord and Tenant disagree on the accuracy of Occupancy Costs as set forth in a Statement, Tenant will nevertheless make payment in accordance with any notice given by Landlord, but the disagreement will immediately be referred by Landlord for prompt decision by a mutually acceptable chartered accountant, architect, insurance broker or other professional consultant who will be deemed to be acting as expert and not arbitrator, and a determination signed by the selected expert will be final and binding on both Landlord and Tenant. No such reference shall be made unless Tenant prepays all costs of associated with the reference. Any adjustments required to any previous payment made by Tenant or Landlord by reason of any such decision will be made within 14 days thereof, and the party required to make payment under such adjustment will bear all costs of the expert making such decision.

(d) Tenant may not claim a re-adjustment in respect of Occupancy Costs for a Fiscal year except by notice delivered to Landlord within 30 days after the date of delivery of the Statement.

7.1 Cleaning During the Term, Tenant will keep the Premises in a clean and wholesome condition, and will provide at its own expense therein janitor services, removal of debris and garbage, and cleaning of all windows, doors and the interior and exterior of the premises.

7.2 Heat, Ventilation, Air Conditioning, Utilities Subject to Article 7.3 , during the term, Tenant will provide in the Premises at its own expense heat, ventilation, air conditioning, water, gas electricity, steam and other utilities and services.

7.3 Common Utilities If heat, ventilation, air conditioning, water, gas electricity, steam or any other utility or service is provided by Landlord, but is not metered or is supplied to the Premises through meters common to other tenants or a group of tenants in the Project, Landlord will pay the cost thereof and, if not otherwise provided in this Lease, Landlord will apportion such cost pro rata among the tenants utilizing the utility or service or supplied through such common meters, and Tenant will reimburse Landlord the amount of its pro rata share of such cost plus 15% to cover Landlord’s costs of administration of such pro rata share, provided that if Landlord will from time to time reasonably determine that the use by the Tenant of any such utility or service in the Premises is disproportionate to the use of other tenants, Landlord may adjust Tenant’s share of the cost thereof from a date reasonably determined by Landlord to take reasonable account of the disproportionate use. At Landlord’s request, Tenant will install and maintain at Tenant’s expense metering devices for checking the use of any such utility or service in the Premises. In all cases Tenant will reimburse Landlord for any utility or service charges.

7.4 Condition of Premises Except to the extent that Landlord is specifically responsible therefore under this Lease, Tenant will maintain the Premises and all improvements therein in good order and condition …

21.20 Security Deposit Landlord acknowledges receipt from the Tenant of the sum of $57,340.29 payable to Landlord or its leasing agent to be held as security for the faithful performance by Tenant of all of Tenant's obligations under this lease. In the event a default occurs in the payment of Rent, Landlord shall have the right, without being obliged to exercise such right, to appropriate the Security Deposit, or such part thereof as is necessary to compensate Landlord for any amount then owed by Tenant, and to apply such Security Deposit to the payment of such amounts, the whole without prejudice to any of Landlord’s other rights and remedies. Upon such appropriation, Tenant covenants to remit to Landlord within five (5) days of notice from Landlord, a sum equal to the amount of the Security Deposit so appropriated sufficient to restore the Security Deposit to the amount it would have been if no part of the Security Deposit had been so applied. If not in default at the expiry of the Term, Landlord will return the Security Deposit (or remainder thereof, as the case may be), without interest, to Tenant, its successor, or permitted assign, as the case may be.

The determination of Occupancy Costs was set out in Exhibit B to the Lease.

[6] DYN paid the full deposit of $129,589.06 by cheque dated May 2, 2013. This was to serve as last month’s rent, last month’s TMI deposit, and security deposit equal to last month’s rent deposit, TMI and HST.

[7] In late 2013, the Applicant fell into arrears with the rent. The Respondent made demand for rental payment in the sum of $111,599.39. The Applicant failed to pay the arrears and on December 7, 2013 was locked out. (See Notice of Distress – Pages 35-36 of Responding Application Record) On December 9, 2013, the Applicant paid the partial sum of $79,457.58. Despite the fact that this was not payment in full for the arrears, the Respondent accepted the amount and allowed the Applicant to re-enter. The remaining arrears were eventually paid. After the Applicant re-entered, it requested to vacate the premises at Unit 2 of 9030 Keele Street. After negotiations and meetings, in January 2014, DYN vacated Unit 2.

[8] On January 31, 2014, the parties signed a Mutual Release and Amending Agreement (“Amending Agreement), which was slightly more than two pages in length. The Amending Agreement stated in part:

This Mutual Lease and Amending Agreement is intended to preserve the Lease, and to amend the Lease as set out below, and to resolve any past claims other then rent and other charges payable and other obligations of DYN to 9024 KEELE pursuant to the Lease.

[9] Notably, the deposit was set out in the Amending Agreement as $122,134.00 rather than the $129,589.06 amount as reflected in the cheque. It is of note that Mr. Nanthakumar’s evidence is that he had a short amount of time to read and review the Amending Agreement before being asked to sign it. (See Transcript from cross-examination of D. Nanthakumar, at qq. 107-116, pp. 25-26, Brief of Transcripts and Answers to Undertakings, Tab 1.) Mr. Handjis stated in his affidavit that “due to some credits given by 9024 to DYN and other adjustments that were made, the parties agreed that the deposit being held by 9024 for security and last month’s rent would be the sum of $122,134.00 and would remain in 9024’s possession”. (See First Handjis Affidavit, at para. 10, Responding Application Record, Tab 1.) (See also Brief of Transcripts and Answers to Undertakings, Tab 5, wherein Johnny Gagliano, who drafted the Mutual Release responded by way of an undertaking and advised that his recollection was that a concession was made by the Applicant in regards to outstanding amounts owing to the Landlord and this amount was deducted as per the parties agreement.)

[10] On March 29, 2016, then counsel for the Applicant wrote to the Respondent. The letter stated in part as follows:

…Our client advises that they have had numerous discussions with you regarding the termination of their lease at the end of their lease term on August 31, 2016.

A number of issues remain outstanding. We have instructions to pursue any legal remedy necessary to remedy the outstanding issues if we are not able to reach an agreement on the matters set out below.

The issues set out included rental deposits, utilities and sub-metering, and rent arrears from the lock out in December 2013. The letter stated:

We would ask that you immediately provide an accounting of the portion of utilities received from Unit #1 each month since January 2014. Please confirm that any and all amounts received will be returned to our client.

Our client has also asked you repeatedly for a breakdown of the amounts labelled as arrears in the invoice to them from Associated Bailiffs and Co. Ltd. dated December 9, 2013. The amount our client overpaid was $13,192.82.

Please immediately return this amount to our client.

Please contact the undersigned to discuss a resolution these issues. If we do not hear from you within 7 days of this letter we will proceed to initiate proceedings in court without further notice to you.

A number of emails were exchanged throughout May and June.

[11] The first accounting provided by 9024 KPP was received by DYN on May 26, 2016, after this application was issued. This was delivered at an in-person meeting. This was a one-page document prepared by the accounting department of 9024 KPP, not Mr. Handjis, and was not certified in accordance with the terms in the Lease. The accounting sets out various utilities for which the Applicant is supposedly responsible in the years 2013 and 2014. The total owed by DYN is purported to be $37,285.18, less 9024 KPP’s portion of $3,311.34, for a remaining balance owing by DYN of $33,973.84. The Respondent claimed that supporting documentation was provided, however, such supporting documents were not part of the record before this court.

[12] The second accounting by 9024 KPP was provided on June 21, 2016 in a letter from Alex Handjis. Again, it was not certified as per the terms of the Lease Agreement. The first two pages, being the actual letter, dealt with TMI charges in 2014, 2015 and 2016. Mr. Handjis stated that the total outstanding TMI charges were $41,290.94 and requested that amount be remitted at the earliest convenience. On a separate sheet attached to the letter, other outstanding costs were listed. The utilities costs owed by DYN to 9024 KPP were stated as $37,283.00 The utilities cost owed by 9024 KPP to DYN were set out as $29,231.00 Therefore, the total costs owed by DYN for utilities, being the difference between the two, was $8,052.00 With the outstanding TMI charges, rounded down to $41,200.00 and the utilities costs, the total charges outstanding were $49,252.00 No supporting documentation was provided.

[13] On June 23, 2016, DYN’s counsel responded in an email, referenced paragraph 4.6(b) of the Lease and stated, “Our client disagrees with a number of items in your correspondence as set out below and especially with the fact that it should owe any amount to you for the remainder of the term of the lease…..Your statement provides no such detail and it is not acceptable to our client.”

[14] The third accounting was provided in a letter from counsel for the Respondent on July 19, 2016. The utilities were adjusted to $8,045.00 from $8,052.00, with no explanation. The letter stated, “Our client went back and thoroughly reviewed its calculations and prepared a new spreadsheet outlining the TMI charges for 2014, 2015 and 2016 and the amounts for each category.” TMI was then adjusted to $51,286.70. The letter further stated, “Therefore, if we add $34,170.00 for the outstanding rent; $8,045.00 for utilities and $51,286.70 for TMI charges, your client owes the sum of $93,502.70 to the Landlord.” Property tax bills for 2014, 2015, and 2016 were included, but no further supporting documentation. The amounts in the attached spreadsheet differed dramatically from the June 21 letter. The 2014 TMI went from $11,491.56 to $20,054.41. The 2015 TMI went from $13,406.88 down to $4,467.80. The 2016 TMI went from $16,492.50 to $20,074.92. Again, the accounting was not certified.

[15] DYN’s tenancy ended August 31, 2016, and they vacated the premises.

[16] The fourth and final accounting from 9024 KPP was provided as part of the response to this application, attached to the affidavit of Mr. Handjis, sworn on September 15, 2016. The Applicant conceded that this was the most thorough accounting and provided some supporting documentation for occupancy costs charged. The same type of spreadsheet was provided, however, again the numbers were different. The TMI for 2014 went from $20,054.41 to $15,415.91. The TMI for 2015 went from $4,467.80 to $1,977.34. The TMI for 2016 remained the same, however, it is noted that it is an “estimated” figure. The total TMI went from $51,286.70 to $43,088.40. There was no further explanation for why the figures were so different. The utilities remained the same, at $8,045.55, as that indicated in July and covered the period from 2013 to 2016. According to the September accounting, DYN owed 9024 KPP $85,303.95 for rent, utilities, and occupancy costs for 2014, 2015 and 2016.

[17] With respect to this final accounting, the Applicant provided a supplementary affidavit challenging some of the costs sought on the face of the documents provided, in the total amount of $50,359.80. Mr. Nanthakumar was cross-examined on the list and continued to dispute some of the invoices. The invoices and explanations were as follows:

a. With respect to page 112 of the Responding Application Record, the Applicant took issue with this invoice. This was an Invoice from King’s Konnecction Electric Inc. The Description of the Invoice is for 9024 Keele Street and is in the amount of $2,744.69. The invoice was reviewed and approved by Mr. Handjis. Mr. Nanthakumar’s position on cross-examination was that the invoice was incorrectly labelled to 9024 Keele, and should have been 9030 Keele. Mr. Handjis confirmed that the invoice was related to work performed for DYN’s upstairs neighbour.

b. With respect to page 146 of the Responding Application Record, Mr. Handjis confirmed that the invoice referred to work under the heading “Leasehold Improvements and Landlord’s Work” in the Lease. See Answers to Undertakings of 9024 KPP, #5, Transcript Brief, Tab 5. The Respondent conceded that this is not chargeable to the Applicant.

c. The Applicant took issue with the invoices found on pages 147-149 of the Responding Application Record. The Applicant’s complaint was that nothing was ever painted in its unit. However, the invoices refer to exterior painting, which were approved by Mr. Handjis as stated in the invoices and confirmed by Mr. Handjis during his cross-examination. The Respondent took the position that the Applicant was responsible for this charge.

d. The Applicant took the position that the invoices found on pages 150 and 151-3 should be shared by all tenants. Mr. Handjis produced the “correct” invoice to replace the invoice at pages 151-153, the incorrect one having been included “due to an accounting error”. The Respondent stood by their position that these items, as corrected, were chargeable to the Applicant.

e. The Applicant took issue with the invoices found on pages 156-166 and 265-268 of the Responding Application Record. These invoices were reviewed and approved by Mr. Handjis. The Applicant’s complaint was that these invoices relate to monitoring service and it should not be responsible for this amount, as it had its own monitoring service. During cross-examination, Mr. Handjis confirmed that these invoices deal with the sprinkler system and that these invoices are chargeable to the Applicant. It must be noted that the Applicant confirmed by way of undertaking that it took no issue with the invoice in the sum of $3,158.35 found on page 155 that dealt with the sprinkler system. See Answers to Undertakings of DYN, at q. 468, p. 91, Transcript Brief, Tab 4.

f. The Applicant took issue with the invoices found on pages 168-171 of the Responding Application Record in regards to grounds clean up. The Applicant’s position was that it should not be charged in full and these invoices should be divided between the other units. Mr. Handjis confirmed during cross-examination that these invoices only relate to the Applicant’s parking lot clean up and are chargeable to the Applicant. Furthermore, the Respondent submitted that the Applicant did not take issue with other invoices for grounds clean up.

g. The Applicant took issue with the invoices found on pages 172-182 and 273-284 and 331-337 of the Responding Application Record in regards to Waste Management. These invoices were reviewed and approved by Mr. Handjis. Mr. Handjis confirmed during cross-examination that these invoices are chargeable to the Applicant as they relate to 9024 and charged on the basis of a square footage of the building.

h. The Applicant took issue with the invoices found on pages 193 to 198 of the Responding Application Record in regards to service on meters. The Respondent’s position was that these invoices were chargeable to the Applicant as set out in Article 7.3 of the Lease, as the work related to moving a sub-meter to the 2^nd floor of 9024, which was occupied by another tenant. The Respondent also submitted that the Applicant took no issue with other invoices for electrical issues.

i. The Applicant took issue with the invoice found on page 251 of the Responding Application Record in regards to masonry work. The Applicant complained that this was provided to another address. However, the invoice that was approved by Mr. Handjis, stated that the invoice was divided between the units.

j. The Applicant took issue with the invoice found on page 253 of the Responding Application Record in regards to the window shades. The Applicant complained that it should not be charged as it was to be provided prior to taking possession. The Respondent stated that they requested that the Applicant remove the window coverings that it had put up. The Applicant did not remove same and the Respondent installed these shades.

k. The Applicant took issue with the invoice found on page 324 of the Responding Application Record. Mr. Handjis confirmed during cross-examination that this expense was relatively fresh in his mind and it had to do with data fiber coming into the building which was a common area expense and chargeable to the Applicant.

[18] Some of the amounts have been conceded bythe Respondent o be wrong.

[19] On January 17, 2017, 9024 KPP sent DYN a letter enclosing a statement of account and supporting documentation purporting to charge DYN $20,621.65 for costs to repair the HVAC system and other “move-out deficiency” costs.

[20] The parties conducted cross-examinations on affidavits on February 15, 2017. DYN served its answers to undertakings on May 24, 2017. 9024 KPP served its answers on October 17, 2017. For whatever reason, after that point, the Applicant raised no further concerns or made any further requested, until new counsel was appointed in April 2019.

Analysis

[21] It is the view of this court that there is sufficient information available to deal with this litigation as an application. It would appear that both parties have put their best foot forward with respect to available arguments and supporting documentation. Further, a significant amount of time has passed – as previously stated the lease ended almost 5 years ago. This application was due to be heard a year ago but was delayed due to the COVID-19 pandemic. The time and expense required to convert this matter to an action and have it heard would not be in the best interests of either party. This matter needs to come to an end.

[22] None of the accounting provided was certified in the manner set out in the lease agreement. It is the view of this court that a lot of time, effort and expense would have been saved in this litigation if only the Respondent would have provided the required type of accounting at the proper time. The Respondent suggested that the accountant responsible for the accounting was off work for close to a year due to a serious medical condition. The Respondent also suggested that they switched software programs and migrated all data to a new program which took a substantial amount of time. The Respondent put these factors forward as an explanation for the delays. In my view, this is not a reasonable explanation for why, in 2021, there is still no accounting in accordance with the lease agreement. There was no explanation as to what if any efforts 9024 KPP made to find an alternative accountant during the medical condition. The timing of the change of software was within the Respondent’s control. The Respondent should have had a back-up plan to ensure that proper accounting was provided in a timely fashion.

[23] It is worth noting, however, that the Applicant took no issue with the accounting not being provided by the Respondent in accordance with the lease until the lease was ending.

[24] Frankly, it would appear that the parties to this litigation agree that the accounting does not comply with the terms of the lease in the sense of timing, within 120 days after the end of each fiscal year, or type, in the sense that it was required to be certified as accurate. These failings are undeniable. Having said that, however, the Applicant conceded that this is not the central argument on this application. As stated, the Applicant never held the Respondent to this standard suggesting that the Applicant did not see this as a problem for some time.

[25] It is the view of this court that the accounting does not comply with the terms of the lease, even to this day. However, given the circumstances, while this is a factor that the court considered, this would not be sufficient, on its own, to rule in favour of the Applicant.

[26] Another significant issue raised by the Applicant and considered by the court is the fact that the affidavit of Alex Handjis, sworn September, 2016, contained contentious hearsay.

[27] Rule 4.06(2) provides:

(2) An affidavit shall be confined to the statement of facts within the personal knowledge of the deponent or to other evidence that the deponent could give if testifying as a witness in court, except where these rules provide otherwise.

[28] Rule 39.01 deals with affidavits for use in an application and provides:

(5) An affidavit for use on an application may contain statements of the deponent’s information and belief with respect to facts that are not contentious, if the source of the information and the fact of the belief are specified in the affidavit.

[29] In Bilotta v. Booth, 2019 ONSC 5956 at para 11, the court stated, “A fact is contentious only if the evidence makes it likely to cause an argument, be disputed or raise a controversy.”

[30] Certainly, the amounts owing or owed are contentious in this case. It is the central issue. The affidavit should have been prepared by someone with firsthand knowledge of the documents to avoid the hearsay dilemma. This would seem to be an easy thing to do. At the very least, the affidavit should state the specific source of the spreadsheets and supporting documentation, as in a name of a person. “Staff” or the “accounting office” is not a source. In cross-examination, Mr. Handjis stated that he oversaw “some of the accounting”, but that he did not personally prepare the spreadsheets.

[31] The Respondent took the position that the Applicant had, effectively, waived the procedural objection that it now makes, as it did not take any steps to address the issue of accounting after it cross-examined Hr. Handjis on the accounting prepared. In Ontario Federation of Anglers & Hunters v. Ontario (Ministry of Natural Resources), 2002 CanLII 41606 (ONCA), [2002] O.J. No. 1445 (C.A.), the court at para. 24 cited Holmstead and Watson, Ontario Civil Procedure, Vol. 2 (Toronto, Carswell, 1993) at p. 2-15 for the following explanation of the principle behind the rule as follows:

Rule 2.02 requires a party to exercise reasonable diligence in raising objections to an opponent's failure to observe procedural requirements. Inordinate delay before objecting or the taking of further steps after obtaining knowledge of an irregularity are generally indicative of a lack of seriousness about the objection, will likely lull the opponents into a false sense of security, or simply represent dilatory tactics which are to be discouraged. The sanction imposed is waiver unless leave of the court is obtained.

[32] In addition to Rule 2.02, the Respondent also relies on Rule 1.04.

[33] While it is true that the Applicant did not appear to raise this issue following the cross-examination, this court sees no obligation on the Applicant to do so. Surely the Applicant is under no obligation to assist the Respondent with respect to the nature and quality of the evidence they present on a contested application. It is the view of this court that Rule 2.02 and 1.04 have no applicability in these circumstances to require the Applicant to assist the Respondent in such a fashion.

[34] Having said that, in this case, this court sees this as more a question of weight, rather than a question of admissibility.

[35] The most concerning aspect of the accounting information for this court is the fact that the numbers have changed significantly over time. Not simply by a few dollars, but in some cases by thousands of dollars. There has been no real explanation for some of these changes. The Respondents have acknowledged errors in supporting documentation ultimately provided. This is exactly the reason why the information should have been certified as required under the lease, or at the very least sworn to by someone with firsthand knowledge of the documentation. The Applicants have not received a consistent number. This causes the court great concern about the reliability of the information provided. 9024 KPP is required to justify and support the amounts they seek. Given the inconsistency in amounts and acknowledged errors in amounts submitted, this court is not confident that the accounting is accurate in any respect.

[36] As for the security deposit, this court is satisfied that the parties reached an agreement as to the amount reflected in the Amending Agreement. It is the view of this court that if that were not the case, the Applicant’s would have raised this issue immediately upon seeing the Amending Agreement. It is the view of this court that the Applicant is not entitled to this amount.

[37] As for the forklift, Mr. Nanthakumar stated that “shortly after the tenancy commenced in June of 2013, the Respondent attended the premises to perform certain maintenance and construction on the property. Through the Respondent’s negligence, our Toyota Fork Lift was damaged and it incurred repair costs in the amount of $4,797.98.” They attach an invoice for repairs dated March 11, 2014. No further information was given as to how 9024 KPP caused the damage. Mr. Handjis denied that 9024 damaged DYN’s forklift, with no further details. It is of note that Mr. Nanthakumar admitted during cross-examination that neither he, nor his father (who owns the forklift) have any direct evidence that the forklift was damaged by the Respondent. No correspondence was sent in regards to this damage until September 2, 2014, at which time the Applicant provided the March invoice to the Respondent. The work order was not produced.

[38] It is the view of this court that there is insufficient evidence to support any finding that 9024 KPP damaged the forklift. Further, the Amending Agreement signed on January 31, 2014 was to resolve any past claims that existed other then rent and other charges payable and other obligations of DYN to 9024 KEELE pursuant to the Lease. The Applicant is not entitled to this amount.

[39] As for the Respondent’s position that it is entitled to $20,621.65 for costs to repair the HVAC system and other “move-out deficiency” costs, it is the view of this court that this must fail. The reasons are as follows:

a. The Respondent has not brought a cross-application for relief. The case relied on by the Respondent, Meridian Credit Union Limited v. Baig, 2016 ONCA 150, does not support its position that no cross-application was required in this case. Meridian involved a situation in which the motion judge dismissed a summary judgment motion brought by the Defendant and instead found him liable for fraudulent misrepresentation, in essence, making a “boomerang judgment” in favour of the Plaintiff. In Meridian, of course, the party getting judgment had initiated the claim for relief, which is not the situation in the case at bar. The Respondent surely is not entitled to relief for which they have never pleaded;

b. Article 21.20 of the lease deals with the Security Deposit. The Respondent does still hold $39,076.00 as a Security Deposit. Article 21.20 can be invoked to collect any unpaid rent, but certainly not these damages. Further, the other $45,000.00 being held is not a Security Deposit and is being held without prejudice pending the outcome of this application. Article 21.20 has no applicability to that money;

c. There is insufficient evidence presented that the Applicant is responsible for the damages incurred;

d. The warehouse was not in great condition when the lease commenced, and an email dated June 6, 2014 outlined several purported deficiencies. Photographs from 2013 also confirm the state of the warehouse at that time.

The Respondent is not entitled to these costs.

[40] This court did strongly consider having the Applicant pay for the invoices that were purportedly acknowledged in cross-examination or in the Answers to Undertakings. At the end of the day, however, many of the answers given were somewhat equivocal. Further, this court simply has no confidence in the reliability of the accounting put forward by the Respondent.

[41] For all of the foregoing reasons, the application is granted, in part, and this Court orders that:

a. The Respondent owes the Applicant $49,906.00. The Respondent continues to hold $84,076.00. The Applicant acknowledges, and this court agrees, that July rent is owing to the Respondent in the amount of $34,170.00. Therefore, $84,076.00 - $34,170.00 = $49,906.00. Other claims relating to the forklift and discrepancies in the security deposit are dismissed.

b. If the parties are unable to agree as to costs of this motion, the court will accept written submissions on costs, which shall be no more than three pages in length, excluding supporting documentation, and which shall be provided to the court office in hard copy or by email no later than April 6, 2021.

V. Christie

Date: March 30, 2021