Nicor Community Management Inc. - v. -, 2018 SKPC 002

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2018 SKPC 002 Date: January 8, 2018 File: 155/17 Location: Regina _____________________________________________________________________________ Between: Nicor Community Management Inc. - and - Allen Lamoureux and Jody Lamoureux Robert Taylor For the Plaintiff Allen Lamoureux For the Defendant _____________________________________________________________________________ JUDGMENT D EMONG, J _____________________________________________________________________________ [ 1 ] I am at a loss to understand why this matter had to proceed to trial.

The plaintiff has sued to recover monies it says are owing for a parking stall rental. While I will explain the facts in further detail shortly, the essence of the claim is that as a property manager for a condominium association, the plaintiff had arranged with the defendants, who were members of that condominium association, to draw monies from the defendants’ bank account in an amount sufficient to cover the cost of renting two parking stalls - so that it could then pay this money to the owner of a parking facility.

Due to an accounting error which went unnoticed for a period of thirty-one months, the plaintiff had failed to withdraw sufficient funds over that period of time to pay for two parking stalls. It withdrew only enough to pay for one parking stall. Nevertheless, it continued to pay the third party the full amount that was actually owing for the rental of two parking

stalls. [ 2 ] When this error was recognized, the plaintiff contacted the defendants and asked them to make up this shortfall.

The defendants adamantly refused to pay the shortfall, notwithstanding that it is absolutely and unambiguously clear that they had contracted for the two parking stalls; notwithstanding that they had full use of the two parking stalls for this period of time; and, notwithstanding that the evidence is overwhelming that the amount of money withdrawn from their account was, on a monthly basis, insufficient to cover the cost of a second parking stall. [ 3 ] The defendants did not defend this action on any technical legal issue which may have proven to be some kind of impediment to the plaintiff’s success.

Rather, their defence focused on the blatant assertion that they ‘have paid all parking stall rental’ and therefore, ‘disagree with the plaintiff’s claim’. [ 4 ] Notwithstanding plaintiff counsel’s detailed, comprehensive, and successful efforts to persuade the Court beyond any doubt that the shortfall had not been paid, Allen Lamoureux stood firm in final argument asserting that, ‘in his mind’, all of the rental payments have been made. I do not understand why he made that assertion.

He advanced no legal argument as to why the defendants would not be legally liable to pay the shortfall, and the evidence that the defendants did not pay the shortfall is overwhelming. Either the defendants are simply unable to grasp the simple arithmetic involved in this dispute, or there are other issues at play between the parties. For some reason the defendants have sought to engage the Court’s time and energy and precious resources on a matter that should have been resolved, as between business people, over a cup of coffee. [ 5 ] This action is factually driven.

Nicor Community Management Inc., (Nicor) brings this action, against Jody and Allen Lamoureux, jointly and severally, to recover the sum of $7,470.38 which it says equates to thirty-one months rent, which is due and owing for a parking stall which the defendants had contracted for.

Nicor seeks prejudgment interest on that sum from January 1 st , 2017, in the sum of $47.55, and it seeks its costs in the further sum of $125.23. [ 6 ] Nicor is, and has been, the property manager for the Manor on Hamilton Condominium Corporation at 1914 Hamilton Street in Regina, Saskatchewan, (the Manor), since January of 2012, when it took over that responsibility from a company which has been referred to at trial as ‘Denro’ or ‘ICR Denro’.

Like its predecessor, Nicor has provided the Manor with certain services, and two of these services have included collecting monthly condominium fees (common element expenses) and monthly parking fees from the unit holders of that condominium association. As it collects these fees, it then forwards the condominium fees portion of this collected amount to the Manor, and the parking stall rental portion of the fees to the owner of the parking facility.

Like its predecessor, it collects these combined fees from the various unit holders of the Manor either by pre-authorized cheques, or by Electronic Funds Transfer (EFT), which is a direct billing and automated payment from a unit holder’s bank account. If it proceeds by EFT, it does so pursuant to a pre- existing written agreement signed by the unit holder allowing the Manor, or alternatively, the property manager to make such a withdrawal. Regardless of who has that actual authority, by long established convention, the property manager has undertaken the task.

As these various charges increase over time, as for instance, when the Manor chooses to increase its common element expense fees, or when the monthly parking fee increases, Nicor is alerted and it revises the amount that it collects from each unit holder. [ 7 ] At trial it became clear that Nicor does not send a monthly written statement to the unit holders advising them of the amount that has been withdrawn from each unit holder’s EFT account, nor does it advise the unit holders in writing of any increase in fees that may have been made, either by the Manor or the owner of the parking facility.

While the defendants spent considerable time at trial expressing their concern with respect to this nonfeasance, I have no evidence to suggest that any given property manager does this pursuant to any given property management services contract. One would think that if there was a concern about increases or notification of an increased fee, this could be ascertained by the unit holder by contacting the condominium association, or the parking facility owner, in order to ascertain what, if any, increase may have been imposed. Mr.

Lamoureux has, however, indicated to the Court, that he does not attend Condominium association meetings, nor does he know the name of the condominium president. He further indicated that he did not even know whether the Manor was the owner of the parking facility in question. (It is not). It would appear that Mr. Lamoureux takes little active interest in the administrative activities of the Manor.

Similarly, if a unit holder had any concern about whether or not the correct amount of money was taken from an EFT account, that unit holder could simply call upon his bank to obtain a record of disbursements from that account, and upon review, determine if the correct amount was being taken out. [ 8 ] As a unit holder within the Manor, the defendants have lived at their home in the Manor since 2007.

When they purchased the property, they also purchased the right to rent two parking stalls in the underground portion of the building, and they have continued to rent those two stalls continuously from that time through until trial. The evidence satisfies me that since that time, they have arranged for payment of their condominium and parking fees by EFT, and they did so by entering into what is called a Pre-authorized Debt (PAD) Agreement.

They entered into this agreement prior to Nicor becoming the property manager in 2012, and when Nicor took over as property manager, Nicor continued to withdraw funds from the Lamoureauxes’ bank account in reliance of that former agreement. Nicor did so throughout 2013 and 2014 without incident and it did so throughout 2014, 2015, and 2016. At the trial of this action the Lamoureuxes took exception to Nicor’s right to do so. Why, I do not know.

There is no evidence to suggest that they ever brought any such concern to Nicor’s attention when these withdrawals were taking place over the course of approximately five years. [ 9 ] In any event, and as I have said, Nicor would withdraw funds from the Lamoureuxes’ account each month in an amount sufficient to cover the costs of the common expenses and the parking fees. In the year 2012 this amounted to condominium fees of $737.63 and two parking stall fees, one in the sum of $107.10, and the other in the sum of $122.85.

The latter appears to reflect the fact that this higher parking fee incorporates an additional fee for storage space. In 2012, these sums were withdrawn without incident and without concern by the defendants. In 2013 the condominium fee was increased from $737.63 to $761.84 and the parking fee was increased to $176.40 per parking stall. An additional fee of $15.75 was charged for storage. This lasted for six months and then the parking fee increased again, this time to $240.98 per stall.

The cost per parking stall has remained the same ever since, but there have been slight increases and decreases in the condominium fee. It increased to $835.37 in February of 2014; to $885.09 in January of 2015; down to $820.82 in April of 2016; and then back up to $848.24 in July of 2016. I hasten to point out that Nicor does not set these fees. They are set by the Manor if it is a condominium fee, and by the parking facility’s owner, if it is a parking fee.

Nicor simply collects these fees - or at least it would have collected all of these fees but for a glitch in their billing and computer system which occurred in or about January 1 st of 2014 - a glitch that was not discovered until July of 2016. It is this glitch which is the subject of this lawsuit.

[ 10 ] Nicor asserts, that for reasons it could not explain, its automated billing system contained a glitch that started in January of 2014, and continued until July of 2016. In consequence, six unit holders which had access to two parking stalls were only being charged for a single parking stall. This meant that for each ensuing month, totaling thirty-one consecutive months, instead of Nicor withdrawing sufficient funds from these EFT accounts to cover condominium fees and two parking stalls, Nicor only withdrew an amount of money sufficient to cover the condominium fees and one parking stall.

Notwithstanding this glitch, Nicor continued to pay the parking facility as if it had actually collected the correct amount from these six unit holders. In the result, Nicor incurred a loss equivalent to the amount of money that they had erroneously failed to collect. When Nicor identified the problem it did a reconciliation of its accounts and explained the problem to each of these six unit holders, and sought payment of the shortfall from each. [ 11 ] According to the evidence at trial, five of the six unit holders reconciled with Nicor. The Lamoureuxes did not.

Notwithstanding several requests, the Lamoureuxes stood fast and maintained that they had paid all of the fees for parking that they were lawfully obligated to pay. As a result, Nicor had to commence this action. [ 12 ] Nicor then sued to recover the sum of $7,470.38 which is an amount equal to thirty–one months parking stall rental at a monthly cost of $240.98 per stall. The Lamoureuxes’ defence asserts that they were not aware of any accounting glitch. They assert that funds as requested were withdrawn, and that this withdrawal process was the sole responsibility of Nicor.

As I have stated, they assert that they have paid all parking stall rental and condo fees and they ‘disagree with the plaintiff’s claim’. The first three assertions are simply assertions of fact, which are not disputed by the plaintiff. They are not defences of any kind. The only defence asserted is, and I quote from their defence, that they ‘feel no amounts are owing’. [ 13 ] They have also counterclaimed, seeking to recover back the sum of $1,204.90 which they say was taken from their account in the five month period between July and December of 2016.

They allege that it was improper or wrong for Nicor to withdraw an additional $240.98 per month for the second parking stall that they were renting. [ 14 ] These are the issues for consideration by this Court: 1. As a matter of fact, did the Lamoureuxes have access to two parking stalls during the disputed thirty-one months? 2. As a matter of fact, did the Lamoureuxes remit payment for the use of those two parking stalls during this period of time? 3. If issues one and two are answered in the affirmative, then, is there any legal impediment which would preclude Nicor from recovering this deficiency? 4.

If the answer to issue three is yes, what is the proper measure of damages to be awarded to Nicor? 5. Are the Lamoureuxes entitled to recover the sum of $1,204.90 representing the amount that they were charged for their second parking stall in the last five months of 2016? [ 15 ] I have reviewed the evidence carefully. There is no question in my mind that the Lamoureuxes had contracted for and had used two parking stalls during the disputed thirty-one months. Allen Lamoureux has conceded these points when giving his evidence. He acknowledged that he has, and always has had, the right to rent two parking stalls.

He has also conceded that the Lamoureuxes always used two parking stalls. Issue number one is answered in the affirmative. [ 16 ] I am also satisfied that during the thirty-one month period in dispute, the monies that were drawn from the Lamoureuxes’ bank account by Nicor were insufficient to cover the fees that should have been paid for each of those months by precisely $240.98. This is the exact monthly fee to be charged for one parking stall.

I say this because the ledger which Nicor prepared showing the amounts of the withdrawal by EFT for each of those months (identified as P-6 in these proceedings) reflects this shortfall. I say this because Allen Lamoureux checked and double-checked that ledger and he then prepared a reconciliation report of the amounts that were set forth in that ledger, and that reconciliation has quantified the amounts Nicor says were withdrawn from his account.

While he was hesitant to file that reconciliation report with the Court, on cross-examination that reconciliation report was reviewed with him by Nicor’s lawyer and Allen Lamoureux confirmed its accuracy. Nicor sought to file it and that request was granted. It is Exhibit P-13 in these proceedings. Thereafter, Mr. Lamoureux conceded, without hesitation, that he compared those withdrawals against his bank account statements, and he confirmed that the amounts identified therein were, in fact, withdrawn from his account. No more and no less. Therefore, Nicor’s ledger, reviewed and quantified by Mr.

Lamoureux, when compared to the actual bank account of the defendants, unquestionably confirms that the amount that was withdrawn from the Lamoureaux account was short by precisely the amount that would have been necessary to satisfy payment of one additional parking stall rental at the rate of $240.98 for a period of thirty-one months. Issue two is answered in the affirmative. The defendants did not remit payment for this thirty-one month period of time, in a sum equal to the actual fees that should have been paid for the use of two parking stalls.

The shortfall is precisely the difference between the cost of paying for one, instead of two, parking stalls. [ 17 ] There is a slight twist to this claim. The Manor was not, and is not, the owner of the parking facility. That facility is owned by a third party known as Dream Office LP (Dream). In the result, technically, the contract to pay rent for the two parking stalls is between the defendants and Dream.

An issue that arises, even though it has not been pled by the defendants, is whether or not Nicor, having paid monies to Dream under a mistake of fact, can now seek to recover those monies back from the defendants. I have no doubt that they could, under the laws of equity, if this matter was before the Court of Queen’s Bench. However, the action was brought in this Court and at present it does not have this type of equitable jurisdiction. I anticipate that The Small Claims Act, 2016 , SS 2016, c S-50.12 which comes into effect on January 1 st , 2018, will have this jurisdiction.

That said, it is clear to me that, either by express or by tacit agreement, and certainly by convention, Nicor acted as agent for the defendants for the purposes of withdrawing funds and in paying for the services provided. I do not see how a clerical error on Nicor’s part, as occurred here, would, in any way, have the effect of foisting upon it a legal obligation such that Nicor, and not the defendants, should be accountable in law for the cost of the rental. [ 18 ] In any event it appears that Nicor was alive to this potential problem.

Rather than commencing action against Dream, to recover the monies that it had mistakenly paid to Dream, thereby forcing Dream to initiate action against the defendants for failure to pay rent,

Nicor entered into an agreement with Dream whereby, in exchange for the payments made, Dream wholly relinquished, in favour of Nicor, all right and entitlement to claim or collect the amounts due and owing by the defendants, or any part thereof (Exhibit P-3). It made a similar arrangement with Manor (Exhibit P-4). The effect of these agreements is to transfer to Nicor any and all rights of action either of these entities may have had against the defendants. [ 19 ] This common law right action can be brought in this Court, and it is transferable.

Authority for that proposition is set forth in s. 2 of The Choses in Action Act, RSS 1978, c C-11 which reads: 2 Every debt and every chose in action arising out of contract shall be assignable at law by any form of writing containing apt words in that behalf, but subject to such conditions and restrictions with respect to the right of transfer as may appertain to the original debt or as may be connected with or be contained in the original contract; and the assignee thereof may bring an action thereon in his own name as the party might to whom the debt was originally owing or to whom the right of action originally accrued, or he may proceed in respect of the same as though this Act had not been passed. [ 20 ] Issue three is answered in the negative.

The defendants have advanced no legal argument which would have the effect of precluding Nicor from recovering this deficiency from the defendants. Whether in its own right, or by assignment, Nicor has full legal right to collect the monies that are due and owing. [ 21 ] Issue four is merely an accounting. It is clear to me that the amount owing equals thirty-one months of parking stall rental, at the monthly rate of $240.98, for a total of $7,470.38. [ 22 ] With due respect to the defendants, the counterclaim as presented has no foundation in fact or in law.

Nicor was, until its authority to do so as agent for the defendants was expressly revoked, entitled to withdraw by EFT those condominium fees and parking fees that the defendants were required to pay. The defendants have presented no compelling legal argument to suggest that because sufficient monies had not been withdrawn in the previous thirty-one months to pay for all of the defendant’s associated fees, the defendants should not thereafter be required to pay an amount each month sufficient to cover not only their condominium fees but also the rent for the two parking lot stalls.

Their counterclaim is dismissed with costs to the defendants. [ 23 ] As I stated at the start of this judgment, I am at a loss to understand why this matter even had to be litigated. It is unambiguously clear that the Lamoureuxes obtained the benefit of two parking stalls and only paid for one during this period of time. It is clear that Nicor erred in its accounting process, but I fail to see how the defendants can thereby assert that the money is not owing.

The fact that Nicor had to sue for this amount; the fact that it could not be settled at a Case Management Conference; and the fact that it then had to proceed to a one day trial to be determined by a Judge is nothing short of a shame. [ 24 ] In conclusion, I find in favour of the plaintiff and award it judgment in the principal sum of $7,470.38. I award prejudgment interest on that sum from January 1 st , 2017 onwards in the further sum of $47.55. I award costs in the further sum of $125.23 for a total award of $7,643.16.

I find Allen and Jody Lamoureux jointly and severally liable to pay this judgment and, pursuant to

section 34 of The Small Claims Act , SS 1997, c S-50.11 , I direct that the judgment be paid immediately. ______________________ P. Demong, J