Reasons for Judgment

Court File No.: CV-22-10429
Date: 2025-02-21
Ontario Superior Court of Justice

Between:
John Shane, Plaintiff
– and –
Ontario Aboriginal Housing Support Services Corporation, carrying on business as Ontario Aboriginal Housing Services, Defendant

Applicant Counsel: Michael R. Macnamara, Nilgiri Pearson
Respondent Counsel: Jack Masterman, Mackenzie Laforet
Heard: December 2-6, 2024

Judge: P.C. Hennessy

Introduction

[1] An accidental fire on February 3, 2022, caused extensive damage to a residential rental property owned by John Shane and leased to clients of Ontario Aboriginal Housing Services (“OAHS”).

[2] Mr. Shane seeks damages caused by the fire against OAHS in contract and negligence. He claims that he had a contract with OAHS to cover any damages to his rental units caused by their clients and, in the alternative, claims that OAHS was negligent by not sufficiently identifying the needs of and supporting the tenants.

John Shane

[3] Mr. Shane is an experienced residential landlord. At the time of the fire, he owned 70 units in 13 buildings in Sudbury. His relationship with OAHS began in April 2020. Mr. Shane had previously rented to people with chronic homelessness and was familiar with the issues and challenges presented by these tenants. At the time of the fire, he had 15 tenants who were OAHS clients in approximately ten units. Mr. Shane maintained a traditional landlord/tenant relationship with OAHS clients.

[4] Mr. Shane also testified that he had made the business decision to reduce his property insurance coverage as he paid off the mortgages on his buildings. He made sure to have regular electrical inspections and checked fire alarm systems. At the time of the fire, he did not carry property insurance on any of his residential buildings.

OAHS

[5] OAHS is a non-profit corporation which provides support, including housing support, to Indigenous clients experiencing chronic homelessness. At the material time, OAHS recruited landlords to rent to their clients. As incentives to landlords, it assisted clients in directing the rent directly to the landlord. In this way, landlords were ensured that rent would be paid in full and on time. OAHS also supported the clients as they transitioned from homelessness to independent living. The program was designed to provide support in the areas of mental health and addiction. This support took many forms including the provision of furniture and food from time to time, connecting clients with various community services and through weekly visits to monitor and assist the clients’ transition to the rental unit. OAHS also communicated frequently with property managers to address concerns and issues that might jeopardize the tenancy, including any damage to the unit. Whether OAHS also provided a promise to the plaintiff to cover property damage caused by these tenants is the primary issue in this trial.

[6] In January 2022, OAHS introduced the Residential Unit Supply Agreement (the “RUSA”). The RUSA created a new relationship between OAHS and property owners who supplied units to OAHS. The property owners were no longer the landlords. OAHS placed their clients in the units supplied by property owners. Pursuant to the RUSA, OAHS would cover property damage claims if the damage was caused by the client. The property owners were obliged to carry “all risk” insurance for accidental damage to property. OAHS sent Mr. Shane a draft of the RUSA. Mr. Shane declined to enter into the Agreement. He said that it was complicated, and he wanted legal advice before he considered it.

The Fire on February 3, 2022

[7] Mr. Shane purchased the residential property on Bancroft Drive in December 2021. He entered into discussions with Brad Farr, a Supervisor at OAHS, prior to the closing of the transaction in early December 2021.

[8] Mr. Shane intended to rent the units from December 2021 until May 15, 2022, and then undertake renovations to the building. Mr. Farr identified the S family as suitable tenants for the three-bedroom unit upstairs, who moved into the unit on December 10, 2021. The tenants in the upper unit of the property were members of the S family, a mother in her 60s as well as an adult son and daughter. Mr. Shane met the S family for the first time in mid-January 2022 when he went to the unit and spoke with them and assured himself that the smoke detectors were working and that the tenants knew how to find and work the fire extinguisher. At this visit, he also learned that none of the members of the family owned a cell phone.

[9] On the evening of February 3, 2022, at approximately 8:30 p.m., a grease fire started in the kitchen of their unit while the son was cooking. The fire spread past the kitchen, throughout the unit. The S family left the unit and went to a neighbour’s apartment. The neighbours called emergency services. Firefighters attended the property.

[10] The unit occupied by the S family suffered significant damage from the fire. The second unit in the house, also rented to an OAHS client, sustained extensive water and smoke damage. The tenants from both units were displaced by the fire.

The Claim in Contract

[11] Mr. Shane alleges that he had an oral contract with OAHS to cover any property damages caused in any way by the program participants. The plaintiff states that the oral contract was made in telephone calls with OAHS representatives and is also supported by the defendant’s past practice in dealing with property claims and is consistent with their dealings with other property owners.

[12] OAHS denies that it promised to pay for all damages to the property caused by the OAHS tenants and that their past practice with Mr. Shane’s property damage claims was not consistent with any agreement as alleged. OAHS says that their policy and their past practice with Mr. Shane and other landlords was to consider property damage claims on a case-by-case basis.

[13] For the reasons that follow, I find that the parties did not enter into an oral agreement with respect to the responsibility of OAHS for damages to the rental property caused by the tenants/clients of OAHS.

The Plaintiff’s Evidence

[14] The plaintiff testified about his direct calls with OAHS employees and his experience with making claims to OAHS for reimbursement for property damage. He also called two other landlords who gave evidence about their experience with OAHS.

Telephone Conversations

[15] Mr. Shane recounted his calls he had with OAHS employees starting in May 2020, after he received an email from OAHS asking if he was interested in renting to OAHS clients. He testified that he told OAHS that he needed an incentive to rent to their clients because he had prior experience renting to people with chronic homelessness and was familiar with the challenges and the greater risks of damages. He stated that he required a promise that rent would be paid in full and on time, that OAHS would drop by several times per week and report to him if there were damages to the units and that the costs of any property damage caused by or linked to an OAHS client would be covered by OAHS. Mr. Shane recalled dealing with a Case Manager, Sophie Huneault, and a Supervisor, Cindy Deschatelets, about potential tenants and that they agreed that OAHS would cover damages. Mr. Shane said in these discussions, OAHS representatives did not mention or stipulate that property damage claims would only be considered on a case-by-case basis or were subject to any conditions, including fault or intention of a tenant, a budget, nor that there was an obligation to keep the unit for OAHS clients after repairs were made. Mr. Shane explicitly denied that Ms. Huneault ever told him that property claims were subject to a budget. He asked: “why would I accept that?” Mr. Shane admits that he understood there was an approval process for damage claims and that OAHS had denied claims for certain items and work.

Past Practice

[16] Mr. Shane argues that the past agreement practice of OAHS with respect to his claims for property damage is consistent with his position that OAHS had agreed to pay for all property damage.

[17] On at least six different occasions, between May 2020 and February 2022, Mr. Shane requested compensation for property damage caused by various OAHS clients. These claims included pest infestations, broken doors and windows and a broken radiator caused by a tenant leaving a door open in the winter, all of which Mr. Shane attributed to tenant behaviour.

[18] When Mr. Shane made claims for property damage, OAHS Case Managers and Supervisors investigated the circumstances of the damage to determine the involvement of the tenant and reviewed the supporting documentation including receipts, invoices and pay stubs for labour. The email correspondence shows that there were back and forth discussions about these claims and various items were the subject of negotiation. The correspondence shows that OAHS declined certain expenses or items and in response, Mr. Shane sometimes reduced his claim. He stated that he didn’t seek reimbursement for all of the damages, because he wanted to work with the tenants out of the “goodness of his heart”.

[19] In all instances prior to the fire, OAHS had covered some or all of the plaintiff’s claims for tenant caused damages. The total amount OAHS reimbursed Mr. Shane for six different claims made prior to the fire was approximately $8,000. There is no dispute that claims were made, and some were paid. Throughout email correspondence on all of these claims, Mr. Shane admitted that he made no reference to an agreement or promise by OAHS to cover damages. Mr. Shane stated that he considered that OAHS became his property insurer with respect to their clients. Mr. Shane acknowledged that where he sought reimbursement from OAHS, he knew he had to show that the damage was caused by their clients and that it was “above and beyond” normal situations.

The Experience of Two Other Landlords

[20] The plaintiff called two other landlords to testify about their experience with OAHS and their claims for property damage.

[21] Joe Levesque is a Sudbury landlord with six rental properties and 24 residential units. He and his mother Karen Levesque, who is the property manager, both gave evidence about their experience with OAHS. Mr. Levesque had telephone discussions with Ms. Huneault. He stated that the fact that OAHS would arrange for the rent to be paid directly to him was very persuasive. He also testified that Ms. Huneault said that OAHS would be responsible for any damage to the residential unit caused by the OAHS participant.

[22] In the first year of renting to OAHS clients, from January 2020 to March 2021, there was some minor property damage caused by the tenants. Mr. Levesque did not make any claim for reimbursement with respect to these items. However, in March 2021, one of the OAHS participants left the unit with significant property damage, estimated at $4,000.00. There were back and forth negotiations with OAHS and ultimately Mr. Levesque submitted a claim for a reduced amount to OAHS. In discussions with Mr. Farr, it appeared that OAHS agreed to pay this reduced claim, although he indicated that the decision was not his to make and still required consideration from the Director. However, when Mrs. Levesque said that she did not have an apartment available for another OAHS client, the discussions on the payment of the claim ended. Mrs. Levesque testified that she understood that had they kept a unit available for an OAHS participant, OAHS would have reimbursed them for the claim for damages. The Levesque claim was never paid.

[23] In any event, Mr. Levesque decided he no longer wanted to rent to OAHS participants because he was not prepared to take on the risk.

[24] Mr. Levesque carried property insurance on his residential units. Mrs. Levesque testified that they would have made an insurance claim had there been any “big” damages to the units of OAHS participants. She indicated that she assumed damages caused by an accidental fire would be covered through an insurance claim, not through a claim to OAHS.

[25] Sheik Fareedun was the other property owner to give evidence about his dealings with OAHS. He owned 32 residential units. Between April 2022 and May 2023, he rented to five or six OAHS clients. Mr. Fareedun’s agreement with OAHS was largely governed by the RUSA that he signed in April 2022.

[26] Mr. Fareedun stated that he sought reassurance from OAHS that the challenges associated with renting to OAHS clients would be addressed. In response, OAHS pointed to provisions in the RUSA that provided that Mr. Fareedun would supply units to OAHS for their program on certain terms:

• that as property owner and supplier, he was required to maintain “all risks” insurance over the property;
• that the property owner would be solely responsible for damages to the property, other than damage caused willfully or negligently by the participants; and
• that OAHS was responsible for repair of any damage willfully or negligently caused to the units by OAHS participants.

[27] Mr. Fareedun understood that he was responsible to insure his property against accidental damages caused by such things as fire and flood. However, in the event of deliberate damage caused by the OAHS client, OAHS was responsible.

[28] Mr. Fareedun also stated that in his initial conversations with a Case Manager at OAHS, the Case Manager indicated that OAHS would cover up to $5,000 towards repairs for damages caused by the participants. He thought this amount was insufficient but was ultimately reassured, given the size of the units and the support from Case Managers. Mr. Fareedun signed the agreement and there is no mention in it of any caps on damages.

[29] At some point there was a gun incident in one of the Fareedun units which resulted in damage to the radiator pipes. Hot water flooded the building and caused significant damage. Mr. Fareedun made an insurance claim for the repairs. He also made a claim to OAHS for amounts not covered by his insurance. Notwithstanding assurances from the OAHS representatives that they would take care of the damages, Mr. Fareedun was not happy with their process. The end result was that Mr. Fareedun’s insurer dealt with OAHS and Mr. Fareedun was reimbursed his deductible from the insurance claim. Mr. Fareedun ended his relationship with OAHS in May 2023.

[30] Mr. Fareedun indicated that he maintained property insurance before entering into the Agreement with OAHS, as he said, it was something that a sensible, reasonable and prudent property owner would do.

The Defence Evidence

[31] The defendant called two Case Managers and two Supervisors who had been employed by the OAHS in the years 2020-2023. The first line of contact between landlords and the OAHS was a Case Manager. The Case Manager reported to a Supervisor who reported to the Director.

[32] The four witnesses from OAHS detailed their conversations directly with Mr. Shane and/or their usual practice in speaking with and dealing with landlords on the issue of property damage to units occupied by OAHS clients. Each one of them clearly denied ever making any promise in this respect to Mr. Shane.

[33] Ms. Huneault was the first OAHS person involved with Mr. Shane as a Case Manager. She stated that she did not receive any specific training about dealing with landlords other than observing some calls. She said Mr. Shane did not ask questions about property damage and she explicitly denied ever making any promise or guarantee to him with respect to reimbursement or responsibility for property damage.

[34] Ms. Huneault testified that whenever a claim was made, she repeated that there were no guarantees, that claims for reimbursement would be considered on a case-by-case basis and that OAHS would do their best to support landlords so as to ensure the best outcome for their clients. She was not involved in decision making regarding claims, but she understood that management mainly considered whether the tenant would be evicted or whether another tenant from the program could move into the unit and that it was likely that OAHS would decline a claim if the client could not stay in the unit, or another client could not take the unit. Ms. Huneault’s role was focused on speaking with the client to get their side of the story and to gather proof of a claim to forward to management.

[35] Ms. Deschatelets was the Supervisor in April 2020 when Mr. Shane first agreed to accept OAHS clients as tenants. She also had telephone discussions with Mr. Shane about property damage. Ms. Deschatelets explicitly denied that she made any promise on behalf of OAHS with respect to property damage. She said that she had not received any training on how to answer questions about damages and she was not able to answer direct questions from landlords about damages.

[36] Ms. Deschatelets was convinced that Mr. Shane understood her role with respect to damage claims, that only management could approve claims and understood that there were no guarantees.

[37] Ms. Deschatelets said that the OAHS tried to manage the risks posed by tenants by working closely with them and providing support. She testified that she never deviated from her message to Mr. Shane that damage claims would be considered on a case-by-case basis. She stated that she gave the same answer to all landlords.

[38] Katryna McLeod was the next Case Manager who dealt with Mr. Shane starting in April 2021, around the time that the S family moved into his unit. Ms. McLeod testified that at no time did she or would she have said that damages would be covered by OAHS. She explained that she would advise the Supervisor if there were damage claims. Ms. McLeod testified that she was not part of any discussions or decisions about damage claims. Ms. McLeod is currently a Supervisor at OAHS. She now has discussions about damages with property owners pursuant to the RUSA. If OAHS is satisfied that the client deliberately caused the damage, OAHS pays to repair pursuant to the term of the RUSA.

[39] Mr. Farr was the last OAHS Supervisor who worked with Mr. Shane. He dealt with Mr. Shane when the decision was made to rent to the S family. Although Mr. Farr was not part of the initial conversations with Mr. Shane, on more than one occasion, he had discussions with Mr. Shane about claims for the repair of property damage. He testified that in discussions with Mr. Shane, he made it clear that property claims would be considered by the Director if the damage was deliberately caused by the tenant, if the unit could continue to be used for an OAHS client and if there was enough money in the budget. Mr. Farr stated that the Director consistently focused on these three factors. It was the Director’s decision to make.

[40] Mr. Farr had several conversations with Mr. Shane about the process for validating his claims for damage. On occasion, Mr. Shane reduced his claim when he could not produce sufficient or adequate proof of the cost of repair. The evidence of property damage claims made by Mr. Shane all appear to be related to damages intentionally caused by the tenant. Mr. Farr spoke to Mr. Shane the night of the fire. Mr. Shane advised that he did not have insurance on the building.

Law

[41] Counsel did not differ on the principles applicable to the interpretation of oral contracts as set out by Pepall J. in UBS Securities Canada Inc. v. Sands Brothers Canada Ltd., para 40, aff’d 2009 ONCA 328, para 47, citing G.H.L. Fridman, The Law of Contract, 5th ed. (Toronto: Carswell, 2006), at p. 15:

For parties to be bound by contract, there must be a meeting of the minds … The test as to whether there has been a meeting of the minds is an objective one and has been described as follows:

… [T]he parties will be found to have reached a meeting of the minds, in other words be ad idem, where it is clear to the objective reasonable bystander, in light of all the material facts, that the parties intended to contract and the essential terms of that contract can be determined within a reasonable degree of certainty…

See also UBS (ONCA), para 47.

[42] More recently, when seeking to determine if an oral contract was made, courts have set out “four criteria for the court to consider”:

1. it is necessary to distill from the words and actions of the parties, at the time the contract was entered into, what they intended;
2. the evidence of the parties’ subjective intentions has no independent place in determining the terms of their bargain;
3. the test of what the parties agreed to requires an objective determination; and
4. the contract must include the requisite elements of offer, acceptance and consideration.

See Downey v. Arey, 2021 ONSC 2781, para 88, aff’d 2022 ONCA 673; S & J Gareri Trucking Ltd. v. Onyx Corporation, 2016 ONCA 505, para 7.

[43] The onus of proving an oral contract is firmly on the party alleging the oral contract.

[44] The task of the court is to determine if the parties shared a common intention. This is an objective inquiry. Evidence of one party’s subjective intention is not sufficient: UBS (ONCA), para 47.

[45] The plaintiff must show on the totality of the evidence that the parties had a common intention to create an obligation on the part of the defendant to be responsible for property damage caused by their clients. This evidence will include the testimony of both the plaintiff and the representatives of the defendant as to what they understood the terms of the agreement to be and whether their conduct was consistent with a common intention or not. The weight of the testimonial evidence will also be assessed in light of all of the other evidence.

[46] The jurisprudence on rectification provides a helpful analysis here because “[r]ectification is predicated on the existence of a prior oral contract whose terms are definite and ascertainable”: Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, para 31.

[47] In McLean v. McLean, 2013 ONCA 788, para 59, where there was a claim for rectification, Weiler J.A. speaks to the test for rectification which is based on finding an objectively manifested common intention. The requirement for finding a common intention in a claim for oral contract as we have here, is the same requirement for finding a common intention in a claim for rectification, simply because a claim in rectification requires the finding of a prior existing oral contract.

[48] A party may manifest an intention through their actions. McLean, at para. 59, citing Chartbrook Ltd. v. Persimmon Homes Ltd., [2009] UKHL 38, [2009] 1 A.C. 1101 (H.L.).

Discussion of the Evidence

[49] The plaintiff claims that there was an oral contract fixing responsibility for tenant-caused property damage. I will deal first with intention.

[50] Whether there was a meeting of the minds of the two parties is partly based on the reliability and credibility of the witness testimony. Thus, the credibility and reliability of Mr. Shane and the OAHS witnesses is relevant to the finding of whether the parties shared a common intention.

[51] I will first assess the evidence of each OAHS witness.

[52] In this case, the four witnesses recalled their own various telephone calls which took place three to four years ago. None of the witnesses relied on any notes taken at the time of these calls.

[53] Ms. Huneault was a confident witness, identifying when she had clear recollections and other times when she could not recall clearly. For example, Ms. Huneault clearly recalled that Mr. Shane specifically addressed issues related to needle bins, cleanliness and broken locks on doors.

[54] I am satisfied that Ms. Huneault’s discussions with Mr. Shane were informed by statements from management on occasion that there were not sufficient funds in the budget, and/or the circumstances of who or what caused the damage was relevant to the Director’s decision. Ms. Huneault was consistent in her evidence about the limits of what she knew. She knew that property damage claims were not guaranteed, and I am satisfied that she passed this information on to Mr. Shane.

[55] Ms. Deschatelets was clear when she testified that she did not know all of the factors considered by management when a property claim was presented. I am satisfied that she had limited knowledge of what conditions were placed on property claims and that therefore she could not and did not make any promises to Mr. Shane. I accept that Ms. Deschatelets encouraged Mr. Shane to collect the best information in the form of quotes or invoices so she could present his claim to management, and that was the best she could do.

[56] Ms. McLeod was not part of the plaintiff’s initial discussions with the agency. However, her evidence was consistent with Ms. Huneault’s, that as a Case Manager, she was not part of any decision making with respect to property claims. I accept Ms. McLeod’s evidence which was also consistent with that of Ms. Huneault’s and Ms. Deschatelets, that the only guarantee from OAHS to the landlord was with respect to the direct payment of rent, there was no guarantee from the agency for coverage of property damage.

[57] Mr. Farr dealt directly with Mr. Shane but not in the initial dealings. However, I am satisfied that he reliably recollected the agency policy and his own communications with landlords relating to claims for property damage. He was clear that he had no idea what was in the budget for claims, and that he did not control the process for claims. In this respect his evidence is consistent with the other witnesses. I accept his evidence that he understood that property claims were subject to certain conditions and that the case managers and supervisors were not part of the decision-making process. They advocated on behalf of the landlord to obtain reimbursement for tenant caused property damage. Mr. Farr no longer works for OAHS and there was no motivation for him to mislead the court or fabricate his evidence.

[58] The testimony of the OAHS representatives was clear and consistent and was not impeached in any way on cross-examination on what they knew or what they conveyed to the plaintiff. Their recollections were not challenged, and they had no motivation to lie or fabricate evidence. They gave their evidence in a straightforward manner. There was internal and external consistency in their evidence. It would make no sense for any of them to make the alleged promise since each one of them testified that they were not exactly sure what factors were considered by the Director when claims were made. The OAHS representatives testified that they “advocated” on behalf of the landlords who suffered property damage, a sign that they knew and conveyed that there was no guarantee of reimbursement. Only one of the witnesses continues to be an employee of OAHS.

[59] I will now turn to Mr. Shane’s evidence.

[60] Mr. Shane was vague in his recollection of exactly what was said or promised by OAHS representatives regarding the alleged promise. He did not link any specific statement or words to any specific individual. He contradicted himself on whether the promise by OAHS was to cover all damages to the unit or damages deliberately caused by the tenant. His rationale for insisting on such coverage was based on his experience with similarly situated tenants and his expectation that there was a greater risk involved. When challenged on cross-examination about statements made by OAHS representatives setting out the specific conditions under which OAHS would reimburse property damage claims, Mr. Shane replied more than once: “Why would I accept that?” He did not go on to explain why some risks were more tolerable than others. For instance, Mr. Shane did not explain why he was comfortable with the risk associated with carrying no property insurance on any of his residential rental units.

[61] Mr. Shane could not explain why, in his many email communications with OAHS on the very issue of claims for property damage prior to the fire in the S unit, he never once referred to a promise by OAHS to reimburse him for property claims or his understanding of an agreement between the parties that OAHS would be responsible for any property damage.

[62] Mr. Shane’s evidence that a promise was made by one or more OAHS employees in phone calls is simply not credible. Where his evidence differs from the evidence of the four OAHS representatives, I prefer the consistent and more logical evidence of the OAHS representatives. Each OAHS representative denied ever making a promise to Mr. Shane regarding reimbursement for all property damage. Each one of them had experience in telling Mr. Shane that his claims would only be considered on a case-by-case basis under certain circumstances and that the Director retained discretion. They believed that Mr. Shane understood that OAHS retained discretion to make decisions on damage claims.

Past Practice

[63] I turn now to the plaintiff’s position that the past practice of OAHS is consistent with the plaintiff’s version of the agreement. The various emails show that neither the OAHS representatives nor Mr. Shane made any reference to any promise or guarantee to pay. Mr. Shane said this agreement was implied. OAHS had a clear pattern of carefully considering the circumstances of the damage, requiring proof that the tenant deliberately caused the damage and refusing certain items on claims.

[64] OAHS witnesses explained how they would advocate on behalf of landlords, in service of their clients’ interests. They conveyed this message to Mr. Shane. Their conduct clearly shows that the OAHS representatives with whom Mr. Shane regularly interacted had neither decision-making authority nor even the ability to clearly define the circumstances under which a claim would be successful. The practice, with which Mr. Shane was familiar, is not consistent with an agreement made by OAHS representatives that all tenant caused property damage would be reimbursed.

Other Landlords

[65] I considered the evidence from the two other landlords. There is no evidence that the circumstances and/or agreements between OAHS and the other landlords informed Mr. Shane at the time he entered into his agreement with OAHS initially or when he rented to the S family.

[66] The other landlord witnesses had experiences that are clearly distinguishable from Mr. Shane’s experience. Mr. Fareedun “supplied” units to OAHS pursuant to the RUSA that clearly spelled out the respective responsibilities of the parties for property damage. Mr. Fareedun’s experience when he did experience significant property damage was to make his first claim to his insurer and look to OAHS for the deductible. This approach was consistent with the RUSA and not helpful to Mr. Shane’s claim.

[67] Mr. Levesque’s experience was different as well. With respect to one claim for property damage, OAHS alerted the landlord that reimbursement was conditional upon the unit remaining available for an OAHS client. Mrs. Levesque, who had not been a party to calls with OAHS, testified that she had not been aware of this pre-condition.

[68] However, there are similarities between Mr. Shane’s and Mr. Levesque’s experience. These similarities do not assist Mr. Shane in demonstrating that OAHS made a promise to cover property damage. The evidence shows that OAHS retained and exercised a discretion on when, how and in what circumstances, they would reimburse for property damage. The evidence is consistent with OAHS’s position that it said it would and it did consider claims on a case-by-case basis.

Application of the Law to the Facts

[69] There is no evidence on which an objective, reasonable bystander could conclude that in all the circumstances, that the parties intended to contract, or shared a common intention with respect to responsibility for property damage: Downey, at para. 90, citing UBS (ONCA), at para. 47.

[70] Mr. Shane’s subjective view that the risk of renting to this cohort, without an agreement from OAHS was too high, is not evidence of a meeting of the minds or a common intention of a clear term imposing responsibility.

[71] When looking at the past conduct of the parties, there is no manifestation in either the words or actions of OAHS of an intention to cover all property damage. OAHS considered Mr. Shane’s claims for minor property damage in certain circumstances, always retaining the discretion to cover a claim if the damage was caused deliberately by the tenant, if budget allowed and if they were satisfied that the unit would remain accessible to OAHS clients. Mr. Shane may have wanted greater reassurance than this, but there is no record or agreement that he asked for or received more. The various messages that were relayed by OAHS representatives, that claims would be dealt with on a case-by-case basis, that budget was a factor, and OAHS required that damaged units remain available for OAHS clients, belie that a promise was made by OAHS to take responsibility for all damage caused by tenants. The messages demonstrated that the OAHS representatives, with whom Mr. Shane communicated, did not clearly or consistently convey when or if there would be reimbursement for damage claims. In addition, the agency representatives clearly communicated to Mr. Shane that it had no motivation or interest in covering property damage claims if the unit was no longer going to be made available for OAHS clients.

[72] The terms of an alleged oral contract must be clear. I am satisfied that there was no meeting of the minds with the common intention of creating a clear and binding term setting out OAHS’ responsibility for property damage caused by their clients. See Ronen Benin v. DrawSplash Inc., 2014 ONSC 2659, paras 36-37.

[73] I agree with counsel for the plaintiff when he said that none of the OAHS witnesses had a complete understanding of what senior management took into account when claims were considered on a case-by-case basis. It follows that they could not have conveyed a clear promise of anything with respect to responsibility for property damage nor would they have been motivated or inclined to do so. The best they could say, when challenged, was that they understood that claims would be considered on a case-by-case basis.

[74] Considering all of the evidence, I am not persuaded that Mr. Shane received a promise by anyone from OAHS to cover property damage either caused by the tenants or in the units of the OAHS units. As an experienced businessperson and property owner, Mr. Shane made the decision to rent to OAHS clients, notwithstanding the higher risk of property damage, in return for the rent guarantee and the support in place for the tenants. He availed himself of the opportunity to claim reimbursement for damage deliberately caused by the tenants. He is not credible when he says that he had reason to assume that OAHS was his insurer.

[75] In effect, I conclude from the evidence of the phone conversations, the past practice of the parties in relation to claims and the rest of the evidence, that Mr. Shane was prepared to accept the risks posed by this tenant group without any agreement on the part of OAHS to reimburse him for property damage.

[76] The claim in contract fails.

The Claim in Negligence

[77] The plaintiff claims that OAHS had a duty of care towards him to ensure that participants were equipped to live independently, were aware of safe cooking practices and would at least understand the importance of contacting authorities in a timely way in the event of a fire. The claim in negligence was clearly a secondary or alternative claim to the main claim of an oral contract. Very little emphasis was made on this issue either in evidence or in argument.

[78] The evidence showed that Mr. Shane approved each tenant from OAHS. He specifically tried to avoid tenants with certain characteristics. In addition, Mr. Shane personally or his property managers/contractors ensured that the fire and smoke alarms in each unit worked and that the tenants knew of the location of the fire extinguishers. Mr. Shane also specifically approved the S family as tenants after meeting them. He noted that they did not have cell phones. He addressed this issue with OAHS. He was aware of their circumstances and recent experience.

[79] OAHS representatives made frequent visits or attempts to visit the S family once they moved into the unit. Not all attempts were successful.

[80] The only evidence about the fire is the Fire Marshall’s report. There was no direct evidence from the Fire Marshall or anyone who had knowledge of the circumstances of the fire. The author of the report simply noted on the form that the fire was “not intentional”.

[81] There was scant evidence in support of an alleged scope of the duty of care. There was no evidence about the cooking skills or lack of such skills of members of the S family or that their personal circumstances contributed in any way to the kitchen fire. There is no evidence of a breach of a duty of care owed by OAHS to the plaintiff. The claim in negligence is not made out on the evidence.

The Fire Damage

[82] Mr. Shane claims damages for losses occasioned by the fire including cost of repair of the units and the loss of rental income. OAHS refused to make payment in respect of this claim.

[83] In view of the finding that the defendant bears no liability for losses from fire, there is no award for damages. Usually, the court would assess damages in any event. However, a full assessment is not possible. No documentary evidence was before the court on the issue of damages.

[84] Mr. Shane bought the house for $171,000 in December 2021. The Fire Marshall estimated the damage to the house at $153,000. Mr. Shane has modified his claim in this action over time. It was not clear at the time of trial what the exact claim was. On the eve of trial, sales receipts and text messages supporting labour costs were produced to the defendant. They were not admitted into evidence given the late delivery.

[85] The plaintiff’s evidence was that he, his wife, his brother and two contractors have worked to repair the house. They did not require or obtain a building permit. They did not retain a general contractor. They did not obtain quotes for the work. Mr. Shane testified that he had spent approximately one and half to two years of work on the house, and $72,000 in materials. He also testified that he paid his contractors hourly pursuant to text messages which outlined their hours of work, and that total labour expense was $200,000. He testified that his net loss of rental income was approximately $88,600. The upper unit, where the fire took place, has been rented since September 2023 and the lower unit has been rented since November 2024. It is impossible to assess the damage claim on the basis of this oral evidence.

Conclusion

[86] The claim for damages from the fire based on an oral agreement that OAHS would be responsible for property damage caused by their clients is dismissed. Similarly, the claim for damages based on negligence of OAHS is dismissed.

Costs

[87] I have received the Bills of Costs from counsel. If counsel cannot agree on costs, within 15 days, they may make brief written submissions, two pages in length, making reference to any relevant offers.

Released: February 21, 2025