2017 QCCQ 124, 2017 QCCQ 124

Salazar c. Shojai 2017 QCCQ 124 COURT OF QUEBEC (Administrative and Appeal Division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division N°: 500-80-032157-159 DATE: January 9, 2017 ______________________________________________________________________ BY THE HONOURABLE VINCENZO PIAZZA, J.C.Q. ______________________________________________________________________ LORELEI SALAZAR and LEMUEL G. SALAZAR Appellants v.

ADELA SHOJAI and 7075995 CANADA INC. and hANAN LIS Respondents and LA RÉGIE DU LOGEMENT Mise en cause ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Pursuant to the leave granted by Madam Justice Julie Veilleux [1] , the appellants seek the reformation of a decision by the Régie du logement (the “Board”) declining jurisdiction on the petitions that they brought before it against the respondents. [ 2 ] The Board summarizes the grounds of appellants’ recourse as follows: [6] Dans son témoignage, la locataire explique qu’avant la conclusion du bail, elle a informé la locatrice que même s’il s’agissait d’un bail résidentiel, elle allait exploiter une garderie de type familial dans le respect des normes régissant de tels établissements.

Elle a donc occupé le sous-sol avec sa jeune fille et exploité sa garderie au premier étage. [7] Les deux unités sont identiques avec un sous-sol, une chambre et un garage, ainsi qu’un premier étage avec une chambre, une cuisine ainsi qu’un salon. [8] Ainsi, l’épouse de Lemuel G Salazar témoigne de la même chose, expliquant qu’elle a commencé à occuper l’autre logement, l’année suivante, avec son mari et sa fille de 18 ans.

Ils occupaient aussi le sous-sol et exploitaient aussi une garderie au premier étage. [9] Outre l’illégalité de certaines dispositions contractuelles, les locataires plaident avoir été troublés dans leurs droits par le syndicat des copropriétaires et que les locateurs ne les ont pas défendus adéquatement. [10] C’est que même si Lorelei Salazar a exploité sa garderie pendant un an, peu après l’arrivée de son père, le syndicat des copropriétaires leur a demandé de cesser leurs opérations puisque la déclaration de copropriété ne le permettait pas. [11] Ils ont donc été harcelés et ont subi une perte économique, ayant dû quitter les lieux et perdu en cours de route des clients. [ 3 ] The Board concluded that it did not have competence on the claim, as it pertained not to the appellants’ residential leases, but rather to the operation of a daycare in each of their dwellings. [ 4 ] The Board’s decision is predicated on

article 1892, paragraph 2, of the Civil Code of Québec and

section 28 of the Act respecting the Régie du logement [2] (emphasis added):

DIVISION IV SPECIAL RULES FOR LEASES OF DWELLINGS § 1. — Application 1892. The lease of a room, of a mobile home placed on a chassis, with or without a permanent foundation, or of land intended for the emplacement of a mobile home is considered to be the lease of a dwelling. The provisions of this

section also govern leases relating to the services, accessories and dependencies attached to a dwelling, a room, a mobile home or land, and to services of a personal nature provided by the lessor to the lessee. The provisions of this

section do not apply to (1) the lease of a dwelling leased as a vacation resort; (2) the lease of a dwelling in which over one- third of the total floor area is used for purposes other than residential purposes; (3) the lease of a room situated in a hotel establishment; (4) the lease of a room situated in the principal residence of the lessor, if not more than two rooms are rented or offered for rent and if the room has neither a separate entrance from the outside nor sanitary facilities separate from those used by the lessor; (5) the lease of a room situated in a health or social services institution, except pursuant to

article 1974.

SECTION IV RÈGLES PARTICULIÈRES AU BAIL D’UN LOGEMENT § 1. — Du domaine d’application 1892. Sont assimilés à un bail de logement, le bail d’une chambre, celui d’une maison mobile placée sur un châssis, qu’elle ait ou non une fondation permanente, et celui d’un terrain destiné à recevoir une maison mobile. Les dispositions de la présente

section régissent également les baux relatifs aux services, accessoires et dépendances du logement, de la chambre, de la maison mobile ou du terrain, ainsi qu’aux services offerts par le locateur qui se rattachent à la personne même du locataire.

Cependant, ces dispositions ne s’appliquent pas aux baux suivants: 1° Le bail d’un logement loué à des fins de villégiature; 2° Le bail d’un logement dont plus du tiers de la superficie totale est utilisée à un autre usage que l’habitation; 3° Le bail d’une chambre située dans un établissement hôtelier; 4° Le bail d’une chambre située dans la résidence principale du locateur, lorsque deux chambres au maximum y sont louées ou offertes en location et que la chambre ne possède ni sortie distincte donnant sur l’extérieur ni installations sanitaires indépendantes de celles utilisées par le locateur; 5° Le bail d’une chambre située dans un établissement de santé et de services sociaux, sauf en application de l’article 1974. 28.

The board hears in first instance, to the exclusion of any tribunal, any application (1) respecting the lease of a dwelling where the sum claimed or the value of the thing claimed or of the interest of the applicant in the object of the application does not exceed the amount of the jurisdiction of the Court of Québec; (2) pertaining to any of the matters contemplated in articles 1941 to 1964 , 1966, 1967 , 1969 , 1970 , 1977 , 1984 to 1990 and 1992 to 1994 of the Civil Code ; (3) pertaining to any of the matters contemplated in Division II, except in sections 54.5, 54.6, 54.7 and 54.11 to 54.14.

The board is not competent, however, to hear applications contemplated in articles 667 and 775 of the Code of Civil Procedure (chapter C- 25.01 ). 28.

La Régie connaît en première instance, à l’exclusion de tout tribunal, de toute demande: 1° relative au bail d’un logement lorsque la somme demandée ou la valeur de la chose réclamée ou de l’intérêt du demandeur dans l’objet de la demande ne dépasse pas le montant de la compétence de la Cour du Québec; 2° relative à une matière visée dans les articles 1941 à 1964 , 1966, 1967 , 1969 , 1970 , 1977 , 1984 à 1990 et 1992 à 1994 du Code civil ; 3° relative à une matière visée à la

section II, sauf aux articles 54.5, 54.6, 54.7 et 54.11 à 54.14. Toutefois, la Régie n’est pas compétente pour entendre une demande visée aux articles 667 et 775 du Code de procédure civile (chapitre C - 25.01).

[ 5 ] In accordance with Madam Justice Veilleux’s ruling, the parties proceeded de novo before the Court . Four witnesses were heard. CONTEXT [ 6 ] Lorelei Salazar rented and occupied a townhouse belonging to respondent 7075995 Canada Inc. from January 2009 through the end of June 2011. Respondent Adela Shojai signed the lease on behalf of 7075995 Canada Inc. Although the lease clearly states that it is residential, Ms. Salazar testified that she informed Ms.

Shojai of her intention to open a home daycare and that the latter had no issue with this. [ 7 ] After inquiring at the City as to the legality of her project, she opened this home daycare in September 2009. She slept in a bedroom in the basement with her husband and their two-year-old daughter and ran the daycare on the ground floor. The children attending the daycare played, ate and had naps on the ground floor. They did not have access to the basement, nor to the kitchen on the ground floor. [ 8 ] Ms. Salazar testified that no portion of her dwelling was used exclusively for the daycare.

The kitchen was used to cook meals for her family and for the daycare children. The bathroom on the ground floor was also used by the children and her family. The daycare children and her family had their meals on the ground floor as well. She and her daughter watched TV in the basement and on the ground floor. [ 9 ] In July 2010, Ms. Shojai asked Ms. Salazar to remove the signs she had put up in the front window of her dwelling to advertise for the daycare. Ms. Shojai herself did not mind that Ms. Salazar ran a daycare, but she wanted her to be discreet about it, so as to not upset the neighbours. [ 10 ] Ms.

Salazar says that she started the daycare with one or two children and never had more than six under her care. She says that she never received any complaints from her neighbours, but recognizes that she was advised by the president of the condominium owners’ association, in November 2010, that she could not have a business in her dwelling. [ 11 ] In July 2010, Lorelei Salazar’s father, appellant Lemuel G. Salazar, moved in an adjacent townhouse, a few doors away in the same condominium block, with his wife, Alicia Salazar, and another one of their adult daughters. Mr.

Salazar’s lease was signed by respondent Hanan Lis, as representative of the owner, 7075995 Canada Inc. [ 12 ] Both townhouses are identically configured, with a 15.6’ x 12.5’ living room, an 11.5’ x 8.5’ dining room, a 12.6’ x 11.5’ bedroom, a 12’ x 8.2’ kitchen and a bathroom on the ground floor. In the basement, there is a 12.2’ x 9.2’ bedroom, a second bathroom and an access to a garage [3] . [ 13 ] Mr. Salazar also informed Mr. Lis, before signing his residential lease, that he intended to open a home daycare in his dwelling, to which Mr. Lis manifested no objection.

Like his daughter’s, the daycare was set up on the ground floor. Mr. Salazar, his wife and their daughter all slept in the bedroom downstairs. [ 14 ] Mr. Salazar and his wife testified that they ate upstairs and that the kitchen was used to cook meals for the children attending the daycare during the week, but also for the occupants of the dwelling and their visitors. [ 15 ] They both testified that no portion of the house was used exclusively for the daycare. [ 16 ] Mrs.

Salazar added that her five children and six grandchildren visited on the weekends, and that everyone used the bathrooms and bedrooms on the ground floor and in the basement alike. They all took their meals upstairs. [ 17 ] Mrs. Salazar stated that four children attended the daycare in her house, Monday to Friday, from 7:30 AM to 5:30 PM. Lorelei Salazar’s daycare followed the same business hours. [ 18 ] Mr. Salazar’s testimony was consistent with that of his wife and daughter.

He also recounted that the president of the condominium owners’ association demanded that he take down the signs advertising the daycare from the front window of his house. [ 19 ] There is no mention of a daycare in either Lorelei Salazar’s or Lemuel Salazar’s leases or rental applications. [ 20 ] Jacques-Étienne Andujar is the current president of the condominium owners’ association. He acquired his condominium, situated above the one rented by Mr. Salazar, in May 2011. [ 21 ] Upon purchasing his condominium, he immediately became involved with the owners’ association.

At the time, three daycares were operated in the condominium building and this was the main topic of contention amongst the co-owners. Letters were sent by the syndicate of co-owners, to enforce the provisions of the declaration of co-ownership and property bylaws prohibiting all business uses in the condominium units [4] . [ 22 ] Mr. Andujar testified that he would sometimes notice a few cars parking in the alley leading to the condominium garages, as children attending the daycares in the building were being dropped off in the morning or picked up at the end of the day. [ 23 ] Mr.

Andujar also stated that through the window adjacent to the common staircase leading to their respective front doors, he could see, inside Mr. Salazar’s dwelling, the area that would normally be used as the living room and dining room. He testified that the floor was covered with colourful, interlocking protective mats, similar to those found in the daycare attended by his own child. He also saw highchairs along the walls. There were toys all over.

There was no living room or dining room furniture. [ 24 ] Signs and stickers in the front windows of both Lorelei and Lemuel Salazar’s townhouses, with business names and phone numbers, clearly identified them as daycares.

[ 25 ] In cross-examination, Mr. Andujar’s testimony was fraught with spontaneous depictions of what he saw inside the house below his: “It looked like a daycare”; “I can recognize a daycare when I see one”; “there wasn’t a table for people to eat at”, etc. [ 26 ] Hanan Lis is the president and sole shareholder of 7079559 Canada Inc. Adela Shojai is his mother. [ 27 ] To him, the condominiums purchased by this company and rented to the Salazars were only an investment.

He did not live there and did not mind whether or not the Salazars ran daycares in their homes. [ 28 ] He remembers attending both Lorelei and Lemuel Salazar’s houses on a few occasions. The description of what he saw in Mr. Salazar’s house corroborates that made by Mr. Andujar: no “adult” furniture, mats on the floor, toys everywhere. Mr. Lis testified that after the Salazars moved out, he had to remove foam shields that had been glued to the angles of the walls as protection for the children attending the daycare. [ 29 ] According to Mr. Lis, Ms.

Salazar had so much demand for her daycare that this is why her father wanted to rent another unit as soon as one became available. Although he does not remember exactly what furniture there was, Mr. Lis testified that he once observed as many as 15 to 30 children in Ms. Salazar’s dwelling. He is adamant that they were not related to the Salazars, as, in his own words, these children “weren’t Filipinos”. [ 30 ] Mr. Lis became concerned with the situation when he began receiving demands from the condo association that the daycares be closed, under threat of legal action [5] .

He says that it is only then that he realized that the declaration of co-ownership and property bylaws prohibited such a use in the townhouses occupied by the Salazars.

He thereupon provided them with said declaration and bylaws and demanded that they cease their commercial operations in the units. [ 31 ] This is what led to the termination of the Salazars’ leases and their departure, and ultimately, to the claims they filed before the Board. [ 32 ] In these claims, the appellants averred that the respondents: 32.1. exacted money, in the form of security deposits, “protection payments” and condominium fees, via current, postdated and blank cheques, in excess of the rent stipulated in the leases and in violation of

article 1904 of the Civil Code of Québec ; 32.2. deprived them of the peaceable enjoyment of their dwellings, by not allowing them to operate their daycares therein, harassed them and displayed intentional, abusive and coercive behaviour and bad faith, in adhering to the demands of the owners’ association that they cease to operate their daycares, thereby causing them each moral damages in the amount of $3,000.00 and engaging their liability for punitive damages, for which each appellant claims $5,000.00; 32.3. caused them to suffer economic losses, in the amount of $12,880.00 for Lorelei Salazar and $18,100.00 for Lemuel Salazar, as a result of cancelled daycare registrations.

ANALYSIS [ 33 ] This appeal was authorized by Madam Justice Veilleux in order for the Court to provide its

interpretation of

article 1892, paragraph 2 of the Civil Code of Québec , in the particular context of a home daycare, where some portions of the dwelling, as the kitchen and bathroom, are used by both the residents of the dwelling and the children attending the daycare. [ 34 ] The appellants contend that this article, as it restricts the protections granted to residential tenants for fundamental social policy considerations, should be construed restrictively.

Since it is established that no portion of the dwellings was used exclusively for the purposes of the daycares, it is impossible to say that more than one third of their floor area was used for non-residential purposes. [ 35 ] The Court disagrees. [ 36 ] Beyond its apparent complexity, the question really is quite simple, and it is an eminently factual one. [ 37 ] The facts of this case establish that the residential, domestic or personal use by the Salazars of the main floor of their dwellings is ancillary to the principal use to which this portion of their dwellings is normally and generally dedicated. [ 38 ] In sum, the Salazars ate, sometimes received family and guests or went to the bathroom in the daycare facilities set up in their homes. [ 39 ] On this, Mr.

Andujar’s testimony on the appearance of Mr. Salazar’s “living room” and “dining room” is particularly compelling. The fact that Mr. Lis had to scrape off permanently glued foam protections from the angles of the walls after the Salazars left also confirms that the upper floors of their dwellings were really devised and meant to be used, first and foremost, as a daycare. [ 40 ] The Court has no hesitation in concluding that the exception of

article 1892, paragraph 2 of the Civil Code of Québec , in the very particular factual context of this case, applied to the appellants’ leases. [ 41 ] This entails that

article 1904 of this Code, which the respondents would have violated by exacting sums of money over the stipulated rent, as deposits, condominium fees and “protection payments” to guarantee that the appellants could continue to operate their daycares, does not apply, nor does

article 1894, which the respondents would have contravened by not giving the bylaw of the property to the appellants before the execution of their leases. [ 42 ] More fundamentally, it is obvious to the Court that the appellants’ claims before the Board were commercial in their nature. The dispute at the core of the appellants’ recourse pertained to the respondents’ failure to allow them to carry out their business inside their dwellings.

[ 43 ] Therefore, the Board’s decision to decline jurisdiction was well-founded. FOR THESE REASONS, THE COURT: DISMISSES the appeal; WITH COSTS. __________________________________ VINCENZO PIAZZA, j.c.q. Me Angela Nevard For the Appellants Me Edward J. Druker DRUKER NARVEY GREEN SHWARTZ For the Respondents Date of hearing: December 7, 2016