2014 QCCQ 11498, 2014 QCCQ 11498

Amin c. Baum 2014 QCCQ 11498 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-135486-126 DATE: November 12, 2014 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ SAHIRA MOHAMMED AMIN […] Montréal, Qc […] Plaintiff v.

ESTHER BAUM […] Montréal, Qc […] And AHRON SHUWAKS […] Montréal, Qc […] Defendants And DEELAN JAMAL KADER […] Montréal, Qc […] Impleaded Party ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, Sahira Mohammed Amin, formally the tenant in a commercial premises situated at 710, 2 nd Avenue in Verdun, sues the Defendants, Esther Baum and Ahron Shuwaks, the lessors.

She claims the return of the security deposit of $ 1,720.00, representing two months’ rent and $ 300.00 she advanced towards legal fees for the drafting of the lease. [ 2 ] She asserts that, when she left the premises, the lessor agreed to give her back the security deposit and she claims the return of the $ 300.00 advanced because a lease was never drafted. [ 3 ] The Defendants contest this demand and bring their own counter-claim alleging that the Defendant brought about the resiliation of the lease through her fault as she became incapable of paying the rent and in fact, failed to pay rents for April 2012 as well as defaulting for her share of water tax, for a total of $ 965.00. [ 4 ] The Defendants also sue for two months’ rent after the Plaintiff left the premises, that is, May and June 2012 and water tax for that period for a total of $ 1,762.00. [ 5 ] Finally, the Defendants claim as well a loss of rental of $ 85.00 for 12 months starting July 1 st as they rented the space as a residential tenancy for $ 85.00 less than what the Plaintiff was paying.

[ 6 ] Finally, the Defendants brought Mr Deelan Jamal Kader to the case as a third party to respond to the cross-demand as well, alleging that he is solidarily liable for the Plaintiff’s obligations as a tenant.

ISSUES [ 7 ] In order to resolve this case, the Court must answer the following questions: 1) When the lease was resiliated in April 2012, did the tenants consent to return the amount that had been deposited by the Plaintiff? 2) If they did not consent, are they entitled to withhold the security deposit in payment of damages because of the Plaintiff’s faulty resiliation of the lease? 3) Is there any amount owing above and beyond these deposited sums? 4) Is the impleaded party solidarily responsible with the Plaintiff toward the Defendant for these amounts?

FACTS [ 8 ] On September 14, 2011, the document entitled “memorandum (lease to be sign shortly)”, was entered into by Sahira Mohammed Amin as Tenant and Ben Z. Schwartz representing the Landlord (the Defendants Esther Baum and Ahron Shuwaks), for a five-year lease beginning December 1, 2011, for the operation of a convenience store (dépanneur). [ 9 ] Mr Jamal Kader had acquired a “dépanneur” business operating in the premises from the previous tenant.

The lease was entered to by his wife Sahira Mohammed Amin, but both she and Mr Jamal Kader told the Court that he was in fact the one operating the business. [ 10 ] The memorandum provides for rent of $ 860.00 per month starting December 1, 2011, with increases throughout the five-year term. [ 11 ] As well as the rent, the Tenants were to pay 16 % of the water tax imposed on the building for the first two years and, thereafter for the remaining period, 20 % of the water tax bill. [ 12 ] It is not in issue that the Plaintiff gave an advance of $ 1,720.00 as a security deposit as well as $ 300.00 toward the drafting by a legal professional of a formal lease. [ 13 ] The “dépanneur” business operated by Mr Jamal Kader was a failure.

He quickly fell into financial difficulties and approached the Defendants’s representative, Mr Ben Z. Schwartz to terminate the lease. The discussions touched upon the timing of the resiliation of the lease and the request by the Plaintiff and Mr Jamal Kader to be reimbursed the amounts that had been advanced at the beginning of the lease. [ 14 ] The testimony about these negotiations is contradictory. Mr Schwartz denies the assertion that he promised that, upon the departure of the tenant, he would reimburse the amounts that had been given at the outset.

According to Mr Schwartz, this was a matter that would be settled after the tenant’s departure. [ 15 ] He was, however concerned that a document be signed permitting him to prove that the tenant had in fact consented to leave the premises for fear that if he disposed of the equipment and effects found therein, he could incur liability for the owners he represented. Mr Jamal Kader testifies that he wanted to present a tenant to take over the premises and that Mr Schwartz refused to entertain this possibility.

Mr Jamal Kader was not specific about the person he would have presented and provides no details as of that person’ solvency. [ 16 ] According to him, however, this other individual decided not to go ahead with a lease because he did not agree to give the six- month security deposit that Mr Schwartz was insisting upon. [ 17 ] That person was an immigrant and later returned to his country of origin, and the Court was giving no other details about him. [ 18 ] Mr Schwartz drafted a letter for Mr Jamal Kader and Mrs Mohammed Amin to sign (D-3).

Though the document is dated April 29, it was in fact written on March 29. It confirms that the business is in insolvency and the tenant’s intention to leave the premises on or before April 15 without the intention of returning.

The letter also authorizes the landlord to dispose of all contents and tenant improvements including movable equipment or stocks as well as any fixed and built-in tenant’s improvements. [ 19 ] The letter also confirms that Mr Jamal Kader and Mrs Mohammed Amin had tried to find a successor for the business, but were unable to find someone. [ 20 ] Finally, the letter ends with the following statement about monetary issues: “Once the local is handed over, we shall sit and close monetary issues regarding our contractual lease agreement thereafter”. [ 21 ] The document is signed by Mr Jamal Kader and Mrs Sahira Mohammed Amin.

On March 31, Mr Schwartz, at Mr Jamal Kader’s request, wrote in an email in which he expresses the following: “As owner of the place, I will not rent it as a “dépanneur” anymore. However, if anyone is interested, you may please contact Deelan Jamal Kader to purchase all furniture, thank you”. [ 22 ] This rather laconic email is explained differently by the two parties. Mr Jamal Kader refers to it as evidence that Mr Schwartz in fact consented to the resiliation with no claim for compensation, because he was intending to convert the premises to a residential tenancy.

[ 23 ] Mr Schwartz, on the other hand, explains it as pertaining to a request by Mr Jamal Kader for some comfort that he would not set someone else up in business of a “dépanneur”, thereby acquiring the furniture and equipment that Mr Jamal Kader was abandoning. The idea would be that if someone took over the premises, he would be invited to negotiate for the acquisition of the furniture and equipment thereby not profiting unduly from Mr Jamal Kader’s financial demise.

ANALYSIS [ 24 ] In a circumstance such as this one, where the tenant is admittedly insolvent and can no longer pay the rent, the tenant is considered to be in default of his obligations. His resiliation of the lease by leaving in the middle of April is, in absence of other evidence, a “déguerpissement” giving rise to a resiliation of the lease. [ 25 ] Acting responsibly, however, the tenant, acting through her husband, Mr Jamal Kader, informed the landlord of her intention to leave and sought approval of a date on which she would vacate the premises.

The landlord reciprocally needed to know for sure that this departure was intentional and that as the landlord’s representative, he was free to deal with the effects that were left behind, disposing of them as he saw fit. [ 26 ] The idea that the landlord would simply agree to give back the security deposit is not plausible. In such a circumstance, a landlord who has counted on receiving rent on an on-going basis is put in a position of suddenly having to find a new tenant in order to make the premises productive.

The security deposit was given to protect him against such a possible scenario and, unless it can be established with clear evidence, it seems unlikely that a landlord would have agreed to reimburse the security deposit. [ 27 ] The Plaintiff herself had no direct link with Mr Schwartz, always acting through her husband. [ 28 ] Though Mr Jamal Kader’s testimony is not inherently suspect, it has a very poor probative value since it directly contradicts the text of the letter that both he and his wife signed.

That letter makes it clear that the financial consequences of the resiliation have not been negotiated and have not been determined: they are to be discussed once the departure is a reality. [ 29 ] The Court, therefore, concludes that the resiliation constitutes fault on the part of the lessee and the guarantor, and that the prejudice caused to the landlord can be set off against the security deposit. [ 30 ] The $ 300.00 given as an advance towards legal fees should also be credited, since no legal fees were incurred. [ 31 ] It remains for the Court to determine the amount of the compensation the landlord is entitled to because of this resiliation. [ 32 ] The claim for arrears of water tax is valid and it amounts to $ 18.50 per month. [ 33 ] No rent was paid from April and the landlord was able to re-lease the premises as of July 1 st as a residential tenancy.

The rent negotiated with the new tenant was $ 775.00, a shortfall of $ 85.00 per month as compared with the Plaintiff’s rent. [ 34 ] The Court heard the testimony of Mr Schwartz as to his reasons for converting the premises to a residential tenancy.

Mr Schwartz believes that it was the best way to 0mitigate the landlord’s damages since he was not knowledgeable about running a corner- store business, but did have access without difficulty to the residential market for these premises with only minor changes required. [ 35 ] In the Court’s view, it is obvious that the lessor suffered prejudice in the form of three months lost rent for April, May and June 2012: $ 2,580.00.

To this amount will be added $ 129.50 representing the water tax for the period from December 2011 to July 2012. [ 36 ] The Court will not award damages relating to the lower rent obtained from July 2012. In making the decision to change the destination of the premises from commercial to residential, the lessor made it impossible to establish whether in fact those premises could have generated a commercial rent equal to the amount that the Plaintiff had covenanted to pay.

Presumably it could, because it had been operated as a “dépanneur” for many years prior to the transfer of the business to Mr Jamal Kader. [ 37 ] Since the Defendants made no attempt to re-lease the premises as a “dépanneur”, it becomes difficult for them to assert that their only reasonable choice was to convert the premises for a loss of rental to a residential tenancy. [ 38 ] Therefore the Court finds that the landlord demonstrates no loss from the month of July 2012 and limits the recovery to the three months during which the premises were vacant. [ 39 ] Because both parties were partly successful in their claims and because the bulk of the amount owed was already held on deposit and will not require execution, the Court feels that is a case where there should be no award as to costs.

FOR THESE REASONS, THE COURT: ESTABLISHES the amount owed to the Defendants at $ 2,709.50; OPERATES judicial compensation between that amount and the amounts currently held on deposit by the Defendants of $ 2,020.00; CONDEMNS the Plaintiff Sahira Mohammed Amin and the Impleaded Party Deelan Jamal Kader, solidarily, to pay to the Defendants the balance of $ 689.50 together with interest at the legal rate and the additional indemnity provided at

article 1619 of the Civil code of Québec , calculated from April 15, 2012; THE WOLE without cost.

__________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: November 3, 2014