2018 QCCQ 47, 2018 QCCQ 47

WJS Investments Inc. c. Innsys Incorporated 2018 QCCQ 47 COURT OF QUEBEC « Civil Division » CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTRÉAL No: 500-22-215905-145 DATE: January 10, 2018 ______________________________________________________________________ BEFORE THE HONOURABLE DOMINIQUE VÉZINA, J.C.Q. ______________________________________________________________________ W.J.S. INVESTMENTS INC. Plaintiff and Cross-Defendant v.

INNSYS INCORPORATED and PRAPAHARAN GUANAPALASINGAM Defendants and Cross-Plaintiffs ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Lessor W.J.S.

Investments Inc. (WJS) is suing its lessees Innsys Incorporated (Innsys) and Prapaharan Guanapalasingam (PG) and is claiming $58,288.47 for unpaid rent and various other expenses. [ 2 ] Innsys and PG deny owing any such amount and by way of a cross-claim, they are claiming $7,900 from WJS for their security deposit, for renovation work and for troubles and inconveniences. QUESTIONS IN ISSUE

A) Has WJS established its right for unpaid rent and other various expenses? In the affirmative, what are those damages?

B) Has Innsys and PG established their right to obtain $7,900? CONTEXT AND ANALYSIS [ 3 ] In civil matters, a person wishing to assert a right shall prove the facts on which his claim is based. [1] [ 4 ] The burden of proof [2] lies on the party presenting a demand.

That party has to present evidence which will be weighed on the balance of probabilities which is also called preponderance of evidence. [3] This implies that to convince the Court, both the demand and the cross-claim must demonstrate that the existence of a fact is more probable than its non-existence. [4] [ 5 ] The difficult task of bringing the truth to light falls first and foremost on the parties. [5] [ 6 ] WJS’s building comprises six floors. The litigious rented area is located at the street level and such area was for rent since two years when Innsys and PG visited it.

However, the superficy was too large for their needs. They indicated being more interested in a smaller area, fronting on the street. [ 7 ] In that context, the solution discussed was to subdivide the large superficy by installing glasses partitions to enclose a smaller area to be rented by Innsys and PG. [ 8 ] Close by to the newly defined rented area considered by Innsys and PG, a washroom was located in the larger unrented area located on the same floor. [ 9 ] At the time of the visit, it was indicated that such washroom could be used by Innsys and its employees as no other tenant was occupying that area.

Another washroom was also available at an upper level. [ 10 ] WJS, Innsys and PG discussed the square footage. Measures were taken on site to plan the renovation required due to the necessity of subdividing the area. It led to a sketch (annexed to the lease). [ 11 ] On March 28, 2014 [6] , WJS, Innsys and PG signed the offer to lease agreement. [ 12 ] PG alleged that he only verified the names on the lease (page 1), the rent (page 2) and the last page with the signature clauses.

He saw the annex, without really paying attention to the sketch and the measurements. [ 13 ] PG argued having been pressured to sign such lease where WJS rather indicated that PG was in a hurry to go back to Toronto. [ 14 ] Furthermore, PG argued that he signed the lease as the officer of Innsys and not as a lessee personally. [ 15 ] On April 7, 2014, Innsys and PG raised the issue of the location of the washroom and brought the subject of the agreement on an additional storage area.

Innsys and PG had then realized that those two items had not been covered in the signed lease. [ 16 ] Discussions followed and the disagreement led to the remittal of the keys on April 16, 2014, by Innsys and PG to WJS and to the issuance of the letter by Innsys and PG on April 23, 2014. [7] [ 17 ] Innsys and PG never occupied the rented area.

A) Has WJS established its right for unpaid rent and other various expenses? In the affirmative, what are those damages? [ 18 ] All parties are bound by the lease. [8] [ 19 ] The contract binds the parties not only as to what they have expressed in it but also as to what is incident to it according to its nature and in conformity with usage, equity or law. [9] [ 20 ] Every person has a duty to honour his contractual undertakings. [10] [ 21 ] In Location 9001 inc . c.

Alarmes Bariland inc. [11] , the Quebec Court reiterated that: [39] La doctrine et la jurisprudence admettent donc qu'un locataire puisse quitter les lieux en cas d'inexécution du locateur, en prouvant que cette inexécution l'assujetti à une diminution substantielle de jouissance, l ui causant un préjudice sérieux. [40] Pour l'auteur Pierre Gabriel Jobin, le caractère sérieux du préjudice s'apprécie de façon objective; il écrit: "Deux conditions sont exigées par la jurisprudence: une inexécution substantielle de la part du locateur et la dénonciation du trouble de jouissance à celui-ci par le locataire… Cependant, l'abandon n'est pas réservé à l'impossibilité d'utiliser les lieux loués ni aux dangers graves pour la santé ou la sécurité.

Les tribunaux acceptent maintenant qu'il puisse y avoir abandon des lieux quand il y a simplement une diminution substantielle de jouissance causant un préjudice sérieux au locataire.

Il en est ainsi du chauffage très inégal des pièces d'une maison et du refus injustifié du locateur de consentir à la sous-location." (Exact reproduction and references omitted) [ 22 ] In this case, there is no substantial reduction of the enjoyment of the premises causing serious prejudice to the tenants.The situation is different from the one regarding a heating problem [12] or from a lease that explicitly provides for a storing space. [13] [ 23 ] The Court is satisfied under the balance of probabilities that:

a) PG was an experienced businessman and used the services of a friend specialized in marketing for the negotiation of the lease;

b) It was not the first time that PG had to sign a contract;

c) The lease contained 8 pages all of which bearing the initials of PG;

d) The lease clearly indicated that PG was acting as the lessee (page 1);

e) Page 1 of the lease also indicated that Innsys and PG took the rented area in an “as is” and “where is” conditions;

f) The sketch (annex) attached to the lease showed the rented premises and that unique page indicated the dimensions and depicted that the washroom was not within that area;

g) That sketch also bear the initials of PG. [ 24 ] Innsys and PG have not established an error or lack of consent for the lease. [14] They have not met the burden of proof in this regard. [ 25 ] The assertion of PG regarding his limited role for the lease is also dismissed. His argument regarding the insufficient period of time he had to read its terms is not a valid one either.

Nothing prevented him from asking for delay. [ 26 ] Therefore, WJS has established its rights for unpaid rent. [ 27 ] Regarding the damages, in Investissements Casitran inc . c. 9133-0787 Québec inc. , the Quebec Court indicated: [15] [37] Pour l’évaluation des dommages, le Tribunal est guidé par les articles 1611 et 1613 du Code civil du Québec . Les dommages et intérêts dus au locateur doivent compenser la perte subie par ce dernier et le gain dont il est privé. Le Tribunal devra tenir compte, pour déterminer les dommages futurs réclamés par le locateur, qu’ils sont certains et susceptibles d’être évalués.

Par contre, le locateur devra avoir mitigé ses dommages ( art. 1479 C.c.Q.). Il est bien établi maintenant, tant en doctrine qu’en jurisprudence, que « l’indemnité

de relocation doit correspondre à la valeur du manque à gagner véritable que subit le locateur . (Exact reproduction and references omitted) [ 28 ] WJS claims amounts regarding the rent, the drafting of the lease, the renovation work and also asks damages for trouble and inconveniences. The Court analyses such demands.

a) Rent : $51,566.31 [ 29 ] WJS refers to the terms of the lease: CHARGES AND CONDITIONS This present lease is thus made subject to all charges and conditions to which the Lessee is bound by law, and especially to the following terms and conditions which the Lessee herein does bind and oblige itself to fulfill and execute, namely; […]

m) Should the Lessee herein abandon the premises hereby lease prior to the expiry of this present lease , whether with the knowledge of the Lessor herein or without the Lessor knowledge, or should the Lessee herein become bankrupt or insolvent, or make a proposal, the said Lessor shall have the right to take immediate possession thereof and to the lease the same to other parties for its own benefit as a indemnity without prejudice to its recourse against the said Lessee herein for the recovery of the rental due and to become due in virtue if this present lease, and for its repairs and alterations required to be made to the leased premises; (Court underlining) [ 30 ] WJS attempted to mitigate its damages.

WJS put a sign in the windows of the premises to be rented. [16] Kijiji ads were subscribed. [17] WJS negotiated with two potentials tenants in June 2014 and in April 2015. [18] [ 31 ] WJS rented on a trial basis period the premises to a tenant occupying another rented area on the same floor, in August 2015. [19] However, that tenant did not pay any rent to WJS and did not move in prior to subletting its own rented area.

It is therefore only on June 1, 2016 [20] that WJS started collecting rents for the area including the planned annex in the lease with Innsys and PG. [21] [ 32 ] Therefore, the Court grants $51,566.31 to WJS as rent for the period from June 15, 2014 to May 31, 2016 [22] , to be paid solidarily by Innsys and PG.

b) Drafting of leases: $600 [ 33 ] The lease provided:

n) The Lessee herein hereby binds and obliges itself to pay for the cost of this present deed of lease and a copy hereof for the Lessor herein; [ 34 ] WJS referred to the cost for the signed lease and to the cost for negotiating modifications for a solution which was never signed by either Innsys or PG. [ 35 ] However, WJS did not file any invoice or proof of payment for that expense. [ 36 ] No amount will be awarded by the Court.

c) Renovating costs: $1,122.16 [ 37 ] WJS filed two invoices of Only Solution [23] referring to work executed by their contractor on behalf of Innsys and PG, alleging that the latters agreed to pay it in due time. [ 38 ] No proof of payment had been filed in this regard. The Court will not grant that amount. Troubles and inconveniences: $5,000 [ 39 ] Regarding contractual damages, the Québec Civil Code is clear. [24] The Court will not grant that amount.

B) Has Innsys and PG established their right to obtain $7,900? [ 40 ] Innsys and PG are claiming $7,900 for their security deposit, for renovation work and for troubles and inconveniences. [ 41 ] Considering that a new lease had been signed by WJS with a new tenant, Innsys and PG have the right to get back their security deposit ($2,000) and the Court will operate compensation in this regard and deduct it from the rent owed. [ 42 ] However, the Court will not grant the payment for the contractor work for the glass partitions ($900) [25] as those expenses were part of lessees’ obligations and that no invoice or proof of payment had been filed. [ 43 ] Lastly, regarding the inconveniences, the loss of time and the transportation ($5,000), the Court dismisses such demand.

FOR THOSE REASONS, THE COURT:

DECLARES the lease, exhibit P-3, terminated; PARTLY GRANTS the action of Plaintiff W.J.S. Investments Inc.; CONDEMNS SOLIDARILY the Defendants Innsys Incorporated and Prapaharan Guanapalasingam to pay $49,566.41 to Plaintiff W.J.S. Investments Inc., plus the interest at the legal rate of 5 % per annum and the additional indemnity provided for at

article 1619 Q.C.C., calculated from the date on which the procedure was taken, WITH LEGAL COSTS. __________________________________ DOMINIQUE VÉZINA , J.C.Q. Dates of trial: October, 26 and 27, 2017 For the Plaintiff and Cross Defendant M e Sylvie Poirier Jeanniot & Associés For the Defendants and Cross-Plaintiff M e Myriam Cossette-Voyer MCV Avocat