r v. PANAGIOTIS DRAKAPOULOS, 2014 QCCQ 6545

Liao c. Drakapoulos 2014 QCCQ 6545 COURT OF QUEBEC Administrative and Appellate Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-80-028263-144 DATE: July 16, 2014 ______________________________________________________________________ BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ CHEN CHIH CHEN LIAO Petitioner – Lessor v.

PANAGIOTIS DRAKAPOULOS Respondent – Lessee and REGIE DU LOGEMENT Mise-en-cause ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Lessor Chen Chih Chen Liao applies for leave to appeal a decision of the Régie du logement (“The Board”) rendered on April 7, 2014 by Commissioner Ross Robins respecting the premises located at […], Dorval, Quebec, […], in cases number 31-120802-026 G and 31-120910-077 G.

THE DECISION [ 2 ] The Board was seized of two files joined for common hearing on September 5, 2012. [ 3 ] In the Lessor’s demand, number 31-120-802026 G, the initial application and subsequent amendments included a request to resiliate the lease, recover unpaid rents as well as damages in the form of lost rental income, heating and electrical costs as well as various costs of cleaning and repairs and, finally, expert costs and punitive damages. [ 4 ] The Lessee’s case, file number 31-120910-077 G, requests the resiliation of the lease on the ground that it is unfit for habitation (related to a proliferation of mould due to a previous marijuana cultivation) and a retroactive reduction of rent, costs of moving and storage, hotel expenses, decontamination of furniture and clothing, and kennel costs for the Lessee’s dog as well as expert fees. [ 5 ] The Board rendered a single decision in both files, firstly in the Lessor’s Application, condemning the Lessee to pay the Lessor the sum of $ 3,535 with interest at the legal rate plus the additional indemnity, plus costs, dismissing the other aspects of the Lessor’s Application. [ 6 ] In the Lessee’s Application, the Board confirmed the resiliation of the lease as alleged by the Lessee as of October 1, 2012 and condemned the Lessor to pay the Lessee damages in the amount $ 5,872.50 with interest at the legal rate plus the additional indemnity

plus costs, authorizing compensation between the two amounts. THE GROUNDS OF APPEAL [ 7 ] To properly address the Lessor’s grounds of appeal it is necessary to briefly explain the Board’s decision. [ 8 ] In August 2012, the Lessor filed her application for resiliation of the lease and payment of arrears of rental alleging defaults as of June 2012.

A hearing was set for September 5, 2012. [ 9 ] Then, on August 17, 2012, the Lessee, through his attorney, gave notice to the Lessor (P-4) alleging that the leased premises were unsafe and presented a health hazard because of mould, calling upon the Lessor to have the premises inspected by an expert within five days in order to verify the problem and to determine to what extent it needed to be dealt with. [ 10 ] On August 22, 2012, the Lessor responded, asking for a copy of the report obtained by the Lessee. [ 11 ] The September 5, 2012 hearing was postponed to permit the Lessee to bring his own application which would, presumably, be based on the proof of the effects of mould on the dwelling. [ 12 ] On September 17, 2012, the Lessee, through his attorney, sent a copy of a report by EnviroPerfect (Roderick Thorpe) advising the Lessor that the Lessee would be holding the Lessor responsible for the costs of moving and temporary housing and storage. [ 13 ] On October 1, 2012, a building inspector acting for the City of Dorval, served a Notice of Eviction (the “Notice”) (P-8) on the basis of the report. [ 14 ] On October 3, 2012, the Lessor received his own report concluding that the premises were safe for habitation and, upon receipt of this report, the City of Dorval “repealed” its Notice of October 1, 2012. [ 15 ] A copy of this new notice repealing the original Notice (P-11) was transmitted by the Lessor’s attorney on October 19, 2012, to the Lessee’s attorney who received it on October 22, 2012. [ 16 ] The hearing began on November 2, 2012, and resumed on April 15, 2013. [ 17 ] Central to the decision was the question of the application of Articles 1913 , 1915 and 1916 of the Civil Code of Quebec : 1913.

The lessor may not offer for rent or deliver a dwelling that is unfit for habitation. A dwelling is unfit for habitation if it is in such a condition as to be a serious danger to the health or safety of its occupants or the public, or if it has been declared so by the court or by a competent authority.” 1915. A lessee may abandon his dwelling if it becomes unfit for habitation, but he is bound to inform the lessor of the condition of the dwelling before abandoning it or within the following 10 days.

A lessee who gives such a notice to the lessor is exempt from rent for the period during which the dwelling is unfit for habitation, unless the condition of the dwelling is the result of his own fault.” 1916. As soon as the dwelling becomes fit for habitation again, the lessor is bound to inform the lessee, if the lessee has given him his new address; the lessee is then bound to notify the lessor within the following 10 days as to whether or not he intends to return to the dwelling.

Where the lessee has not given the lessor his new address of fails to notify him that he intends to return to the dwelling, the lessee is resiliated of right and the lessor may enter into a lease with anew lessee. [ 18 ] It becomes apparent from a perusal of the decision that the Commissioner treated the problem as being one where a dwelling was, at a certain point in time, unfit for habitation, that it became fit for habitation after the City’s Notice of eviction and that, according to the Commissioner’s finding of facts, the Lessor did not communicate with the Lessee that the dwelling had become fit for habitation again but that, in any event, the Lessee had decided to move out definitively on September 18, 2012. [ 19 ] It flows from this decision that the Commissioner considered the lease to be resiliated as of right. [ 20 ] The rest of the decision is a consequence of this consideration, as the only claims recognised in favour of the Lessor were some nominal clean-up costs evaluated in terms of time spent and cleaning materials consumed (a total of $ 600) resulting from the failure of the Lessee to properly clean up before departing. [ 21 ] The expert costs relating to the condition of the dwelling were not awarded because it " had no impact on the outcome of this case ." [1] [ 22 ] Finally, the Commissioner awarded unpaid rent for August 2012 and 60% of the September rent, that is up to the date of the Lessee’s departure on September 18, 2012. [ 23 ] Because the Lessee was, according to the decision, justified in leaving the premises, the Commissioner awarded him certain relocation costs amounting to $ 5,872.50. [ 24 ] The Lessee’s claim for moral damages and his claim for expert costs were also denied. [ 25 ] As is the case with the claim for the Lessor’s expert, the Commissioner held that the expert opinion did not play a significant

role in the Board’s determination of the issues. [ 26 ] It follows therefore that the Commissioner was not concerned with the actual state of the premises as being fit for habitation or not, presumably treating the declaration by the competent authority, the City of Dorval, as creating an absolute presumption that the dwelling was, at the time, unfit for habitation. [ 27 ] The Lessor articulates five grounds for appeal: 1) The Regisseur Ross Robins made a manifest Error in appreciation of the documentary evidence and of the testimony by failing to take into account all the documentary evidence and testimony presented at the hearing. 2) The Regisseur Ross Robins Manifest erred in fact and in law by concluding that the expertise produced by Petitioner – Lessor had no impact on the outcome of the case and by further not awarding any expert’s costs to Petitioner – Lessor. 3) The Regisseur Ross Robins declared the lease to be resiliated at October 1 st , 2012, while solely compensating Petitioner – Lessor for sixty percent (60%) of the rental due for the month of September 2012. 4) The Regisseur Ross Robins failed to respect the Natural Justice principle of Audi Alteram Partem . 5) The Regisseur Ross Robins made an error by failing to ensure that the hearing is properly and adequately recorded.

ANALYSIS [ 28 ] The first ground of appeal deals with the evidence surrounding the communications required by

Article 1916 C.C.Q. [ 29 ] This part of the judgment sets out a finding of fact that presents an apparent weakness. The Commissioner states: [46] The evidence reveals that the Lessee did not advise the Lessor of his new address. However, the Lessor had, in the recent past, corresponded with Me Perlini and could have attempted to communicate with Drakapoulos through his attorney. That she failed to do so should come as no surprise. Drakapoulos was (as the Lessor’s application alleges) a chronically late payor and she wanted him out of the dwelling permanently.

In any event, the silence of the parties engendered the resiliation of the lease ”as of right”. [ 30 ] The Lessor points out that a copy of the new notice issued by the City of Dorval on October 11, 2012 (P-11), was delivered by the Lessor through Canada Post to the Lessee’s attorney. The document clearly states " Therefore, the cited building is no longer considered a public health and public safety hazard, in accordance with the applicable by-law.

" The building inspector signing the notion states " Upon receipt and analysis of an air quality investigation report, from “airlabs analyse / diagnostic”, dated October 3 rd , 2012, for the cited property, mandated by the owners, we repeal our prior assessment of the cited building ." [ 31 ] Apart from this apparent weakness in the decision from a purely factual point of view, the decision also raises an interesting question concerning the application of the presumption of

Article 1913 al. 2 C.C.Q.

Despite the specific wording of the Notice and its repeal, the Commissioner considered it to be a declaration that the condition of the dwelling constituted a serious danger to the health or safety of its occupants or the public. [ 32 ] The Commissioner does not discuss the arguably ambiguous tenor of the first Notice, nor the effects of its repeal on the basis of the Lessor’s counter-expertise which apparently convinced the authorities that they should no longer consider that the premises had been unfit for habitation, despite no corrective works having been carried out. [ 33 ] The appeal therefore raises the interesting question, serious, both for the parties and for other potential litigants, as to whether the Commissioner erred in deciding that the issuance of the City’s Notice and the communication of its subsequent repeal to the Lessee, permitted the resiliation as of right of the lease, regardless of the merits of the technical information made available to the Board. [ 34 ] This is a mixed question of law and fact: what did the City intend to express in its documents and how does the law respond to that intention in the respective rights of the Lessor and Lessee, specifically in regard to the resiliation of the lease?

Is it simply a case of application of an absolute presumption, or is the factual condition of the premises the true object of the litigation? [ 35 ] The answer to this question will lead to the other factual and legal determinations, concerning which prejudice can be compensated, be it that pertaining to resiliation as of right, or that flowing from a resiliation because of the fault of the Lessee. [ 36 ] Among other questions, what is the applicable date for the effect of the resiliation, as of the date the Lessee moved out, the date of the City’s Notice, or some later date? [ 37 ] The fourth and fifth grounds of appeal raise questions concerning the conduct of the hearing.

The fourth ground pertains to the role of the Lessor’s son in law as the representative at the hearing, allegedly with broad powers to examine witnesses and to direct the hearing on November 2, 2012 and with the continuation of that role being refused by the Commissioner at the resumption of the hearing on April 15, 2013.

The fifth ground speaks to the dilemma of the Board not being able to provide a complete audio recording of the hearing of November 2, 2012. [ 38 ] It is not necessary to give an opinion on these grounds of appeal since the essential factual and legal questions mentioned above will permit the parties to adduce evidence on all aspects of the case, in the manner of a trial de novo . BY THESE REASONS, THE COURT:

GRANTS the Motion for leave to appeal. DETERMINES the question in appeal to be as follows: 1) Did the Commissioner err in his decision concerning the lease being resiliated as of right? 2) Did the Commissioner err in his application of the presumption of

Article 1913 al. 2. C..C.Q. to the Notice issued by the Municipal authority in the present case? 3) Did the Commissioner err in the assessment of the claims for unpaid rents and damages owed by either party? THE WHOLE, WITH COSTS TO FOLLOW. __________________________________ DAVID L. CAMERON J.C.Q. Me Maurice Oiknine Attorney for Petitioner – Lessor Me Joseph Perlini Attorney for Respondent-Lessee Date of hearing: May 28, 2014