COURT FILE NO.: CV-22-37 DATE: 2023/10/18 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
2258731 Ontario Ltd. Applicant – and – Gurmeet Singh Respondent
T.D. Marshall / M. Jarrett, for the Applicant A. Honner, for the Respondent
HEARD: September 26, 2023
A.D. Hilliard
Overview
[1] The Applicant is the current tenant in a building owned by the Respondent. The building’s state of disrepair created an alleged situation of urgency that resulted in this motion being brought.
[2] The Applicant seeks an order compelling the Respondent to repair and remediate the building, with sanctions to be attached if the work is not commenced forthwith, while seeking an order that base rent owing by the Applicant to the Respondent be paid into court. The Applicant also seeks an order for a commercial business standards reconciliation to be completed by a professional accountant within three (3) weeks. All of the relief being sought is on the basis of urgency.
[3] For the following reasons, the motion is granted in part.
Background
[4] The Applicant operates a medical office on the leased premises which is the subject of this application.
[5] The Respondent is the owner of the building. He purchased the property in and around 2021.
[6] The Applicant alleges that the building has been in a constant state of disrepair dating back to before the Respondent had acquired the building. It is asserted by the Applicant that these issues have been raised with the Respondent on numerous occasions over the years without any meaningful remedial action being taken by the Respondent, at least not until this motion was brought.
[7] The Applicant alleges that the problems with the building include, but are not limited to, the roof leaking, mold, and dead animals and other pests being found inside the premises. The Applicant’s position is that after years of attempting to work cooperatively with the Respondent to find solutions to these issues, the Applicant was left with no other choice but to bring the matter before the Court.
[8] The Respondent denies these allegations and states that he has been working diligently to maintain the building in a good state of repair. According to the Respondent, work is underway to address the issues raised by the Applicant. In fact, by the time the motion was argued, repairs had been completed to the roof, albeit only two (2) days prior. The Respondent questions the Applicant’s motives for this litigation, noting that this Application was commenced after he refused the Applicant’s offer to purchase the building.
[9] The Applicant had brought an ex parte motion originally returnable in June 2023 dealing with some of the same issues before me on this motion. Pursuant to an endorsement directing that the motion be served on the Respondent, the motion was converted to a motion on notice returnable June 28, 2023. The motion was not heard on the first return date due to lack of court time. However, an order was made on consent requiring the Respondent to bring the property taxes and water bill into good standing by August 3, 2023, failing which the Applicant could pay the ongoing TMI payments directly to the Municipality of Shelburne. The balance of the motion was then adjourned to assignment court for scheduling.
[10] After the June 28, 2023 court date, the Respondent retained counsel. With the assistance of their respective lawyers, the parties reached an agreement on July 20, 2023 and the Applicant’s motion was withdrawn on consent.
[11] After the consent withdrawal of the original motion, the Applicant served another urgent motion on August 17, 2023, which is this motion that was ultimately argued before me.
Preliminary matter
[12] At the outset of the motion argument, I addressed with counsel as a preliminary matter the argument raised by the Respondent in his factum that the Applicant should be barred from bringing this motion, as it was seeking essentially the same relief as the motion that was settled on consent in July 2023.
[13] Although it was conceded by counsel for the Applicant that the previous motion had been resolved on consent, there was no agreement during the motion argument as to the terms on which the motion was resolved. Even when counsel directed me to the email chain that allegedly set out what the agreement was, I could not ascertain what had been agreed to by simply reading the emails that were exchanged.
[14] In principle, I agree that one party should not be permitted to renew a motion requesting the same relief as a previous motion that was resolved on consent. However, in this case there were no minutes of settlement or consent prepared setting out the terms on which the previous motion was resolved. There was no court order setting out the terms agreed to by the parties to resolve the motion. Furthermore, as I indicated above, reading the email exchange between counsel does not provide me with the necessary information to determine what was agreed upon.
[15] I therefore decline to find that the Applicant should not be permitted to proceed with this motion on the basis that a motion previously brought for the same relief was settled on terms that address the issues raised in this motion.
Remedial work
[16] The remedial issue that needed to be immediately addressed at the time the motion was brought in August 2023 was the leaking roof. Video evidence was filed that clearly demonstrated water pouring into part of the space being leased and occupied by the Applicant. However, by the time the motion was argued, the parties agree that repair work to the roof had been performed.
[17] The Notice of Motion contained in the amended motion record seeks an order for “the Respondent begin (sic) remedial repairs of the Property within 48 hours.” The Applicant conceded at the outset of the motion argument that repairs to the roof had at minimum been commenced the weekend prior. The issue remained, however, whether the repairs would prove sufficient to address the leaking roof.
[18] The Respondent argues that it is not the role of the Court to supervise repairs to a property even while litigation is ongoing. Furthermore, the Respondent’s position is that an order for the Respondent to perform “remedial repairs” as requested is too broad and ambiguous to be enforceable. The Respondent argues that an order cannot be made in the form being sought by the Applicant as it would be impossible to determine compliance if a motion for contempt was brought. The argument, in essence, is that the Applicant’s pleadings are insufficient.
[19] The issue with insufficient pleadings is notice, specifically has the opposing party been sufficiently notified so as to have an adequate opportunity to respond. I am not satisfied that the Respondents had insufficient notice of the specific remedial work the Applicants are seeking to have completed. In the grounds for the motion, paragraph 11 specifies the deficiencies that the Applicant allege need immediate attention, including roof repairs, rodent and bird control within the building, mold remediation, parking lot repairs, and regular cleaning and maintenance services.
[20] There is also evidence that the Applicant had attempted to bring these issues to the attention of the Respondent even prior to the commencement of litigation. I find that the Applicant’s complaints about rodents and pests in the building, and regular cleaning and maintenance have been long standing issues as between the parties.
[21] I find that the completion of roof repairs is a concession by the Respondent that there have been issues with the roof, specifically an acknowledgement that the roof was leaking. However, now that the immediate and urgent issue of the leaking roof has been addressed, it remains to be determined whether I should make an order on this motion compelling the Respondent to complete further remedial work to the building.
[22] The timing of the roof repairs satisfies me that it was the bringing of the Applicant’s motion that finally compelled the Respondent to act on the necessary repairs to the roof. I find that but for the motion being brought, the Respondent would not have completed the repairs as he has failed to do so previously despite multiple requests by the Applicant. I am therefore satisfied that an order on the motion is necessary to ensure that the Respondent continues to maintain the building in a sufficient state of repair to ensure the Applicant can continue to occupy the space they lease.
[23] The way in which to address the issue raised by the Respondent as to the enforceability of an order is to ensure specificity in the terms of the order. The lack of specificity in the relief sought in the Notice of Motion is not a bar to the Applicant’s obtaining relief. As I have found that the Respondent had sufficient notice of the issues that the Applicant seeks remedy for, I find that making an order specifying repairs to be performed would not prejudice the Respondent and would address the issue of enforcement and compliance.
[24] However, I agree that Court supervision of the repairs is unnecessary and would not constitute a good use of judicial resources. I expect the Respondent to comply with my court order. It is not appropriate or necessary on the facts before me to anticipate that the Respondent will fail or refuse to comply. On that basis, I decline to include a provision in my order for sanctions in the event that the Respondent does not comply.
[25] It is also not appropriate for an order returning this motion to court on 5 days notice if there is non-compliance with an order for remedial work. The motion was argued in its entirety and is being disposed of as such with this judgment. There is no basis for the motion to continue after judgment is rendered, nor do I find that such a remedy is appropriate in the circumstances.
Payment of Base Rent into Court
Legal basis for payment of base rent into court
[26] The Respondent argues that there is no legal basis upon which I can make an order that the Applicant pay base rent into court.
[27] In response, the Applicant relies on the Civil Procedure Rules (CPR), specifically 1.05. CPR 1.05 permits the Court broad discretion when making orders under the CPR to “impose such terms and give such direction as are just.” In my view, this Rule does not provide the legal basis for the making of orders, but rather provides the basis for the inclusion of terms and directions in orders that are made.
[28] As a court of inherent jurisdiction, I have the discretion to make equitable orders as I deem appropriate based on the evidence before me. However, I would agree that there must be some basis, either in law or equity, for me to make an order for relief sought.
[29] The Applicant makes two alternative arguments in support of an order for the payment of base rent into court: (1) constructive eviction and (2) security for costs. The first of these arguments was specifically plead; the second arose only during the course of submissions.
Constructive eviction
[30] The basis for the Applicant’s primary argument that they should be permitted to pay base rent into court rather than to the Respondent is that they have suffered a constructive eviction. Although not specifically plead, the Applicant’s argument is that they should not have to pay any rent given the constructive eviction but they are prepared to concede that for the purpose of the motion an order can be made for the payment of base rent into court upon a finding of constructive eviction.
[31] The Respondent argues that the Applicant has not met the very high bar to establish constructive eviction based on the caselaw. Furthermore, the Respondent submits that the Applicant’s position that they should either not have to pay base rent at all, or at a minimum pay base rent into court, is preposterous given the Applicant’s ongoing occupation of the premises. The Respondent further argues that the Applicant’s position regarding remedial repairs to the building and request to pay base rent into court is incongruous. The Respondent questions how he is supposed to be expected to comply with an order to perform remedial repairs to the building while not receiving any money in rent.
[32] There is very little caselaw on the topic of constructive eviction. In the reported decisions from Ontario, there is agreement that a finding of constructive eviction can support a finding that the obligation to pay rent is relieved. Where constructive eviction arises in the caselaw, however, it is generally raised as a defence to the non-payment of rent after a tenant has vacated the premises prior to the end of the lease.
[33] All the reported cases were judgments after a trial or full hearing on an application was conducted. The evidence on this urgent motion is in no way fulsome as it would be at a trial or a final hearing. Furthermore, I find that the evidence is evolving to some degree, demonstrated by the submissions of counsel that just prior to the motion argument repairs to the roof of the property had been completed.
[34] I am not convinced that a finding of constructive eviction can be determined on a motion. However, in the event that I am wrong in this assessment, I find that the Applicant has failed to demonstrate constructive eviction on the evidence before me.
[35] The test for constructive eviction is substantial interference with a tenant’s enjoyment. There is also a mental element to the test as the conduct must be intentional or the probable consequence of intentional conduct. The degree of interference must be so substantial or intolerable as to make it reasonable for the tenant to vacate the premises. [1]
[36] In Arangio v Patterson, the Plaintiff engaged in a course of conduct described as “disturbing” by the trial judge, including sexual activity in public areas of the leased premises in the presence of and at times directed at the Defendant. Ferguson J. found that the Plaintiff had “deliberately created and fostered an atmosphere of verbal, physical and sexual intimidation.” [2] That factual finding resulted in a conclusion that the Plaintiff’s conducted amounted to a substantial interference with the Defendant's use and enjoyment of the leased premises.
[37] Kane J. reiterated the test for constructive eviction in 846-6718 Canada Inc. v 1779042 Interior Ltd.:
"Constructive eviction" is another scenario in which the tenant may walk away from the agreement. Constructive eviction occurs where:
(a) the breach is intentional or the probable consequence of intentional conduct; (b) the interference has the character of permanence or wrongfulness; and (c) the inference is so substantial or intolerable as to make it reasonable for the tenant to vacate: Arangio v. Patterson, [1993] O.J. No. 448 (Gen. Div.), at para. 23.
Where there is constructive eviction, the tenant is entitled to vacate the premises, no longer pay rent, receive damages for consequential loss (such as loss of profit, moving expenses, or damages to growth of business), and potentially receive punitive or exemplary damages (Arangio, at paras. 24-31). [3]
[38] In G5 Events Inc. v 2748355 Canada Inc., the remedy of constructive eviction was found by Healey, J. not to be available on the facts as the tenant remained in the possession of the premises. [4]
[39] Vella, J. in 2613787 Ontario Inc. v Comlekcier held that in the case of an alleged constructive eviction, the impugned conducted must be viewed as a whole in determining whether the test is made out. At paragraphs 140 and 141 of that decision, Vella J. wrote:
Based on the evidence, taken as a whole, the conduct alleged by the Tenant does not amount to a fundamental or material breach of the Lease. The interference alleged did not substantially deprive the Tenant of the ability to carry on the restaurant business. Throughout this turmoil, the Tenant has carried on its restaurant business, including using the patio, insofar as public health guidelines and the weather has permitted. The Tenant is concerned that the Landlord might do something in the future that may then constitute a fundamental breach of the Lease, however, that has not happened.
In order to establish a breach of quiet enjoyment, the Tenant must also have brought the specifics of the alleged breach to the attention of the Landlord and given the Landlord an opportunity to remedy it (Dr. Matthews P.C. at para 141, LaBuick Investments Inc. v. Carpet Gallery of Moose Jaw Ltd., 2017 SKQB 341 at para. 55). This did not happen. Further and in any event on the evidence, again taken as a whole, does not amount to have rendered the premises substantially unfit for the intended purpose, nor has the Landlord created an untenable atmosphere for the Tenant in the sense of the extreme non-physical circumstances reflected in Arangio. [5]
[40] In this case, the Applicant has not vacated the premises despite conditions which are described as intolerable. Therefore, I cannot find that the degree of interference has been so substantial that the Applicant has been forced to vacate the premises.
[41] The interference here is really the lack of action to remedy issues with the building. Although the leaking roof had a particularly acute impact on the Applicant, evidence as to the state of disrepair the building does not, in my view, have the character of permanence. Indeed, the leaking roof was repaired just prior to the motion argument. The rodent and pest issue could be remedied and then would not continue to pose an issue for the Applicant’s occupation of the premises. In fact, all of the issues for which the Applicant is seeking relief on this motion, could be remediated by the appropriate service providers being engaged.
[42] As Vella J. noted in 2613787 Ontario Inc. the Respondent must be permitted an opportunity to remedy the issues raised by the Applicant. Although I have found that the Applicant’s complaints have been outstanding for some time, I must also consider that when the Applicant finally brought its motion to compel remedial work to be complete, the roof repairs were finally undertaken.
[43] It is also notable that the Applicants have admittedly continued to operate their medical business at the premises and therefore there is no evidence that the failure of the Respondent to adequately address the Applicant’s complaints has resulted in the premises being substantially unfit for its intended purpose.
Security for costs
[44] A motion for security for costs must be brought on notice and in accordance with CPR 56.03. The payment of base rent into court as an alternative to security for costs is not plead nor even referenced in any way in the motion materials. As I noted above, this argument was only raised during submissions and even then, somewhat indirectly.
[45] The Respondent would be severely prejudiced if this argument in the alternative was given any consideration. There is no basis on the materials before me to find that the Respondent had any meaningful ability to respond to an argument that payment of base rent into court could be a form of security for costs. I am therefore not prepared to entertain an argument in the alternative the base rent should be paid into court as security for costs.
Forensic Accounting
[46] I do not agree with the Applicant’s submission that the issue of a reconciliation is urgent.
[47] There is no evidence before me that the Respondent is imminently leaving the country or attempting to abscond with accounting records. There is no evidence that the Respondent has or has attempted to delete records relevant to the accounting of monies received by the Respondent from the Applicant.
[48] Although a full and final accounting of the monies received from the Applicant and used by the Respondent may be appropriate after a final hearing on the application, I am not satisfied that an order for a forensic accounting as requested by the Applicant is necessary or appropriate on this urgent motion.
Conclusion
[49] Having found that the completion of roof repairs amounts to a concession on behalf of the Respondent that remedial work was required on the property, I find that there is a basis for an order to go compelling the Respondent to complete specific remedial work. In my view, Rule 1.05 permits me broad discretion to make an order specifying the work to be completed by the Respondent and a timeline for that work to be complete.
[50] Given my findings on the other issues, the balance of the relief sought in the Applicant’s notice of motion will be dismissed.
[51] Consequently, order on the motion shall issue as follows:
- The Respondent shall continue and complete repairs to the roof of the building.
- The Respondent shall remove any dead animals and/or birds from premises, both inside and outside the building.
- The Respondent shall employ some form of pest control to deter and control rodents and other pests inside the building.
- The Respondent shall obtain three (3) quotes for mold remediation within thirty (30) days and provide copies of all three reports to the Applicant’s counsel.
- The balance of the motion is dismissed.
- Costs submissions may be filed as follows: i. The Applicant’s written submissions shall be served and filed within 14 days of receipt of this judgment, which shall not exceed three (3) pages in length, 12-point font, double-spaced, exclusive of offers and bill of costs; ii. The Respondent’s written submissions shall be served and filed within 14 days of receipt of the Applicant’s submissions, which shall not exceed three (3) pages in length, 12-point font, double-spaced, exclusive of offers and bill of costs; iii. Reply by the Applicant shall be served and filed within seven (7) days of receipt of the Respondent’s submissions, which shall not exceed (2) pages in length, 12-point font, double-spaced.
A.D. Hilliard Released: October 18, 2023
COURT FILE NO.: CV-22-37 DATE: 2023/10/18 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: 2258731 Ontario Ltd. Applicant – and – Gurmeet Singh Respondent REASONS FOR RULING A. D. Hilliard, J. Released: October 18, 2023
[1] Arangio v Patterson, [1993] O.J. No. 448 at para 23.
[2] Ibid at para 13.
[3] 846-6718 Canada Inc v 1779042 Interior Ltd, [2018] OJ No 1278 at para 291. It is notable, however, that this case involved an action relating to the purchase of assets of a bar and restaurant business and not a landlord tenant dispute.
[4] G5 Events inc. v. 2748355 Canada Inc., [2022] O.J. No. 4212 at para 54.
[5] 2613787 Ontario Inc. v Comlekcier, [2002] O.J. No. 798 at para 140 – 141.