Poole Properties Limited (Defendant by Counterclaim) - v. -, 2016 SKPC 12

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2016 SKPC 012 Date: January 18, 2016 File: SC#109 of 2014 Location: Saskatoon _____________________________________________________________________________ Between: Poole Properties Limited (Defendant by Counterclaim) - and - Mark Stevens, o/a Wiseguy Mattresses (Plaintiff by Counterclaim) Michael Scharfstein For the Plaintiff Scott Spencer For the Defendant _____________________________________________________________________________ JUDGMENT V.L. MONAR ENWEANI , J _____________________________________________________________________________ Introduction

[1] The plaintiff, Poole Properties Limited (“Poole Properties”) is the owner of the building located at 405 Circle Drive East inSaskatoon, also known as Trafalgar Square. The defendant, Mark Stevens, o/a Wiseguy Mattresses (“Stevens”), is engaged in the retailsale of mattresses. The plaintiff and defendant were parties to a lease dated May 30, 2007 (the “Lease”). The Lease was for a term oftwo years, and was renewed on two occasions, ultimately expiring May 31, 2013. [2] On October 22, 2011, an unknown person(

s) started a fire behind the building, involving mattresses and a box spring thathad been placed there by Stevens. The fire caused damage to the exterior of the building. Poole Properties claims damages in theamount of $18,064.19 against Stevens, alleging that he was in breach of the terms of the Lease and that the fire and damage therefromwas caused by his negligence. In turn, Stevens seeks judgment against Poole Properties for the amount of his damage deposit, namely$2,381.80, which he alleges was wrongfully retained by Poole Properties. [3] The issues in this case are as follows: 1.

Pursuant to the terms of the Lease, did the risk of loss by fire pass to the landlord, Poole Properties? 2. If the risk of loss by fire did not pass to the landlord, Poole Properties, is Stevens liable to Poole Properties for damages caused tothe building as a result of the fire? 3. Pursuant to the terms of the Lease, was Poole Properties entitled to retain Stevens’ damage deposit? [4] The plaintiff called four witnesses at trial: Brent Paur, Philip Kufler, Darryl Harder and Don Campbell.

All four individualsare (or were at the relevant time) employees of Fortress Properties Inc., which manages various properties on behalf of Poole Properties. The defendant testified and he also called as a witness Richard Haines, a firefighter (now retired) who attended at the fire on October 22,2011. Analysis 1.

Pursuant to the terms of the Lease, did the risk of loss by fire pass to the landlord, Poole Properties? [5] It is well established by a trilogy of cases decided by the Supreme Court of Canada that the question of whether the risk ofloss by fire passes to the landlord or the tenant falls to be decided on the terms of the lease, not the terms of any insurance policy:Agnew-Surpass Shoes Stores Ltd. v. Cummer-Yonge Investments Ltd. (1975), (SCC), 55 DLR (3d) 676 (“Agnew-Surpass”); Ross Southward Tire Ltd. v. Pyrotech Products Ltd. (1975), (SCC), 57 DLR (3d) 248 (“Ross”); and Smith v.T.

Eaton Co (1978) (SCC), 92 DLR (3D) 425 (“Eaton”). [6] Under the terms of the Lease, Stevens paid rent to Poole Properties and paid, as additional rent, a proportionate share of theannual occupancy costs of the building. Those occupancy costs included “the cost of all insurance covering all risks . . . placed by thelandlord with respect to the building”. Stevens was also required to obtain public liability and all risk property insurance. [7] Paragraph 8(

f) of the Lease provided that the tenant would be responsible for the expense of any repairs if the premises orthe roof or outside walls of the building became damaged or destroyed through the “negligence, carelessness, or misuse of the tenant”. [8] The Lease was intended to be a net lease, completely carefree to the landlord. The landlord, Poole Properties, specificallycovenanted in the Lease to fully insure the building in accordance with the practices of a prudent landlord. [9] The Lease provided in part as follows: I DEMISE OF PREMISES AND RENT

PREMISES 1. IN CONSIDERATION of the rents reserved and covenants and agreements herein contained on the part of the Tenant, the Landlord hereby leases to the Tenant the premises (hereinafter called the “Premises”) described and set out in

Schedule I hereto, in the building (hereinafter called the “Building”), which is described by

Schedule I,

Part I and

Part II hereto. The Premises made up of certain square footage as set out in

Schedule I,

Part III hereto, is located on the floor(

s) as set out in

Schedule I,

Part IV hereto and if necessary, more particularly described and shown in

Schedule II and marked in red. TENANTS PORTION OF OCCUPANCY COSTS 4. (

a) The Tenant will pay to the Landlord, as additional rent, the Tenant’s proportionate share of the annual occupancy costs of the Building. (b) “Occupancy Costs” shall mean the total costs and expenses incurred by the Landlord, without duplication, in respect of or attributable to operating, repairing, replacing and maintaining the Building, including, without limiting the generality of the foregoing, the following: Definition of Occupancy Costs . . . (

v) the cost of all insurance covering all risks and any bonding of employees placed by the Landlord with respect to the Building. . . . NET LEASE 7.

The Tenant and Landlord acknowledge and agree that this Lease is intended to be and shall be a completely carefree net lease to the Landlord and that the Landlord shall not be ultimately responsible during the Term for any costs, charges, expenses or outlays of any nature or kind whatsoever arising from or relating to the Premises (excepting the Landlord’s corporate and income taxes, which said taxes do not include Federal or Provincial Value Added Taxes, and excepting those costs and charges arising by virtue of any act or omission of the Landlord or any express obligation or exclusion of the Landlord under this Lease).

II TENANT COVENANTS 8. The Tenant covenants with the Landlord: RENT (

a) To pay rent. The Tenant shall not withhold the payment of rent for any reason and the Tenant shall not make any deductions, abatement or setoff, except as specifically provided herein, from the rent or any other sums to be paid to the Landlord. SECURITY DEPOSIT (

b) To provide, where one is requested, a security deposit for the due performance of the Tenant’s covenants hereunder, which security deposit shall be paid contemporaneously with the execution of this Lease. The amount of the security deposit, if required, will be as set out in

Schedule I,

Part VIII, but which said security deposit may be applied by the Landlord to satisfy any sums owing by the Tenant under the terms of this Lease. In the event the security deposit is reduced by any deductions made by the Landlord, the Tenant shall pay immediately to the Landlord such sum or sums as may be required to restore the security deposit to its original level.

REPAIR (

e) To permit the Landlord to enter and view the state of repair during business hours and upon reasonable notice, and to repair, according to notice in writing and to leave the Premises in as good repair as originally demised. Reasonable wear and tear, damage by fire, lightning and tempest or arising by virtue of any act or omission of the Landlord, its agent or servants, only excepted. EXPENSE OF REPAIRS (

f) If the Premises, elevators (if included), heating equipment, pipes and other apparatus (or any of them) used for the purpose of heating or air-conditioning the Building or operating the elevators, or if the water pipes, drainage pipes, electric lighting or other equipment of the Building or the roof or outside walls of the Building get out of repair or become damaged or destroyed through the negligence, carelessness or misuse of the Tenant, its servants or agents, employees or anyone permitted by it to be in the Building (or through it or them in any way stopping up or injuring the heating apparatus, elevators, water pipes, drainage pipes, or other equipment or part of the Building), the expense of any necessary repairs, replacements or alterations shall be paid by the Tenant to the Landlord forthwith on demand.

MALICIOUS DAMAGE (

g) To pay the cost of replacement with as good a quality, and size of any glass broken on the Premises during this Lease. The Tenant will at its own expense, replace all broken glass and make all repairs to the said Premises required as a result of burglary, theft, malicious damage or any attempt thereat. PUBLIC LIABILITY INSURANCE (aa) The Tenant shall throughout the term of this Lease, and at its sole costs and expense, take out and keep in full force and effect the following insurance, with the Landlord listed as additionally insured: (

i) public liability and all risk property insurance for at least Two Million Dollars ($2,000,000.00), without exceptions. Such property insurance to include the necessary, prudent and all inclusive coverage subject to approval of Landlord. . . . LANDLORD’S COVENANTS 9. The Landlord covenants with the Tenant: INSURANCE (

h) To fully insure the Building in accordance with the practices of a prudent Landlord. [ 10 ] Paragraph 1 and

Schedule I of the Lease define the “Premises” and the “Building”. As well, the premises are shown and marked in red on

Schedule II of the Lease. It appears clear from

Schedule II of the Lease that the premises do not include any of the

outer walls of the building. [ 11 ] Poole Properties argues that the risk of loss by fire shifted to Stevens, as the intention under the Lease was to shift risk to Stevens even though he paid part of the insurance costs. The Lease was a net lease and Stevens was required to obtain his own insurance and name Poole Properties as insured. Most significantly, Poole Properties argues that paragraph 8(

f) of the Lease provides that Stevens is liable for damage to the building caused as a result of his negligence, carelessness or misuse. In this regard, Poole Properties points to the decision of the Ontario Superior Court of Justice in Lee-Mar Developments Ltd. v Monto Industries Ltd. , [2000] OJ No 1332 . [ 12 ] In contrast, Stevens argues that the risk of loss by fire passed to Poole Properties as it covenanted with Stevens to fully insure the building.

By the terms of the Lease, Stevens paid, as additional rent, a proportionate share of the occupancy costs of the building, which included the cost of all insurance with respect to the building. Relying on the Supreme Court of Canada trilogy of cases, Stevens argues that when a lease contains a covenant by the landlord to insure, and/or the landlord charges back the cost of the insurance, the tenant benefits from that coverage.

In other words, Stevens paid for an expected benefit, and no contrary intention being expressed in the Lease, he is entitled to rely on it. [ 13 ] I have reviewed the trilogy of cases decided by the Supreme Court of Canada.

As well, I have reviewed the decision in Lee- Mar Developments Ltd v Monto Industries Ltd ( “Lee-Mar ”), supra, as well as the appellate decisions in 358296 Alberta Ltd v Phoenix Marble Ltd , 2008 ABCA 177 , affirming 2006 ABQB 854 and 1044589 Ontario Inc (Nantucket Business Centre) v AB Autorama Ltd , 2009 ONCA 654 , both of which distinguished the decision in Lee-Mar. [ 14 ] In Lee-Mar , Chapnik J. found that the terms of the lease clearly placed the risk of loss by fire caused by negligence on the tenant. Chapnik J. placed particular reliance on two clauses in the lease.

One clause required the tenant to repair where the tenant was at fault, and the other clause related to the tenant’s obligation to obtain insurance.

The repair clause read as follows: Repair Where Tenant at Fault Notwithstanding any other terms, covenants and conditions contained in this Lease including, without limitation, the Landlord’s obligations under utilities & maintenance, and Tenant’s obligation in “insurance” if the Land, Building or any part thereof including, without limitation, any equipment, machinery, facilities or improvements contained therein or made thereto, or the roof or outside walls of the Building or any other structural portions thereof, require repair or become damaged or destroyed through the negligence, carelessness or misuse of the Tenant or through it in any way stopping up or damage the heating apparatus, water pipes, drainage pipes or other equipment or facilities or parts of the Building or Land, the costs of resulting repairs, replacements or alterations, shall be borne by the Tenant, who shall pay the same to the Landlord forthwith upon presentation of an account of such expenses incurred by the Landlord. [ 15 ] The second clause relating to the tenant’s obligation to obtain insurance required the tenant to pay for and maintain in its name and in the name of the landlord, insurance against property damage and tenant’s legal liability insurance “for the full replacement cost of the Premises”. [ 16 ] It is significant that in Lee-Mar the repair clause expressly applied notwithstanding any other terms, covenants and conditions contained in the lease.

Chapnik J. appears to have placed heavy reliance on this as she specifically noted that the clause on repairs “expressly takes priority over other provisions in the lease and calls upon the tenant to pay the landlord for damages to the premises caused “through the negligence, carelessness or misuse” of the tenant.” Furthermore, it also appears to be central to the decision of Chapnik J. that in Lee-Mar there was no covenant in the lease obligating the landlord to take out insurance on the property. [ 17 ] While paragraph 8(

f) of the Lease in question is similar to the repair clause in Lee-Mar , it is noteworthy that it does not contain language indicating that the clause takes priority over other provisions in the Lease, or applies notwithstanding any other terms, covenants and conditions contained in the Lease. Furthermore, in the case at hand, Poole Properties did covenant under the terms of the Lease to fully insure the building in accordance with the practices of a prudent landlord. [ 18 ] In 358296 Alberta Ltd v Phoenix Marble Ltd (“ Phoenix ”), supra, leased premises were damaged by fire.

The issue between the parties was whether the landlord’s insurer was barred from pursuing a subrogated claim against the tenant where the tenant had paid a portion of the landlord’s insurance premiums as additional rent pursuant to the lease agreement. The lease required the tenant to obtain insurance and contained a damage clause which provided that the tenant was to reimburse the landlord for any damage caused to the

premises, building, or lands as a result of any carelessness, neglect or misuse on the part of the tenant. In determining that the claimagainst the tenant could not proceed, Clark J. distinguished the decision in Lee-Mar and held as follows: [41] In Lee-Mar, the notwithstanding clause preceding the repair covenant was an important consideration. No such clause exists in thelease we are considering.

I do not believe Lee-Mar is of assistance to the Numbered Company. . . . [44] Taking into account the appellate decisions in Pyrotech and Northwestern Metal which are binding on this court, it would, in myview, be very difficult to establish that a tenant should be denied the benefit of its obligatory outlays barring an express provision to thateffect. In my opinion, the lease in question does not deny those benefits to Phoenix. The lease, read in a reasonable and business sense,assigns the risk of loss as between Phoenix and the Numbered Company to the latter.

The subrogation claim can not proceed. [19] The decision of Clark J. was upheld on by the Alberta Court of Appeal. [20] Similarly, in 1044589 Ontario Inc (“Nantucket Business Centre”) v AB Autorama Ltd (“Nantucket”), supra, the Ontario Courtof Appeal considered the issue of whether, under the terms of a lease, the landlord or the tenant assumed the risk of loss caused by fire. A fire in the tenant’s unit caused damage to the building and its contents. The tenant denied that the fire was caused by its negligence.

In considering the issue, the Ontario Court of Appeal reviewed and distinguished the decision in Lee-Mar. The Ontario Court of Appealcommented that in Lee-Mar Chapnik J. placed special reliance on the repair covenant which expressly took priority over other provisionsin the lease.

In concluding that the lease in question placed the risk of loss by fire on the landlord, the Ontario Court of Appeal followedthe decision of the Supreme Court of Canada in Ross, supra, and held as follows: 14 The rationale for the holding in Ross is simply that because the lessee paid for insurance, it gets the benefit of insurance coverage.

Topermit the Landlord or the Landlord’s insurer to then sue the lessee for fire loss caused by its negligence would deprive the lessee of thatbenefit. 15 Similarly, if the Landlord’s negligence claim were permitted to proceed in this case, the Tenant would receive no benefit for itscontribution to the cost of fire insurance. The tenant could be deprived of that benefit only if the Offer to Lease expressly said so. Therewas no such provision in the lease in Ross and no such provision in this Offer to Lease.

See Alberta Importers and Distributors (1993)Inc v Phoenix Marble Ltd (2006), 2006 ABQB 854 , 410 AR 78 (QB), aff’d (2008), 2008 ABCA 177 , 432 AR 173(CA). 16 Thus, the Tenant’s obligation under para. 1 of the Offer to Lease to contribute to the cost of insurance has the effect of allocating therisk of fire loss to the Landlord. This result makes commercial sense. Although the Offer to Lease does not contain an express covenantrequiring the Landlord to obtain fire insurance, this Landlord, like any landlord with a similar lease, would, as a practical matter, obtaininsurance coverage.

Even if the whole agreement clause excludes an implied covenant to do so, it would defy commercial reality for theLandlord not to insure its property. In this case as in Ross, the Landlord did obtain insurance coverage.

See also Tony and Jim’sHoldings Ltd v Silva (1999), (ON CA), 43 OR (3d) 633 (CA). 17 On the basis of the Ross decision alone, I would allow this appeal and reverse the conclusion of the motion judge. [21] Having considered the terms of the Lease between Poole Properties and Stevens, and the case authorities discussed above, Iam of the view that the Lease placed the risk of loss by fire on Poole Properties. The decision in Lee-Mar, supra, is distinguishable fromthe instant case. Here, Poole Properties expressly covenanted to fully insure the building. Further, there is no such language in clause8(

f) of the Lease to expressly indicate that it takes priority and applies notwithstanding any other terms, covenants and conditions of theLease. Stevens contributed to the cost of insurance covering all risks with respect to the building, and he should not be deprived of thatbenefit unless the Lease expressly said so. I find that it did not. 2.

If the risk of loss by fire did not pass to the landlord, Poole Properties, is Stevens liable to Poole Properties for damagescaused to the building as a result of the fire? [22] Even if I had not found that the Lease shifted the risk of loss by fire to Poole Properties, I would have dismissed the claim onthe basis that, given the evidence before me, Stevens did not breach the terms of the Lease or cause damage to the building throughnegligence, carelessness or misuse.

[ 23 ] As noted earlier, Stevens was engaged in the retail sale of mattresses from the premises. He received old mattresses from customers. It was his practice to place these old mattresses at the back of the building, next to the loading dock. They would be left there for a short time frame, either overnight, or for several nights over the weekend, before being picked up by a third party contractor for recycling. On October 22, 2011, a fire started behind the building.

While the parties do not agree on whether that fire primarily involved mattresses, or pallets, paper cardboard and mattresses, the parties are in agreement that the fire was the intentional act of a vandal and it caused damage to the exterior of the building in the amount of $18,064.19. [ 24 ] The plaintiff called four witnesses. [ 25 ] Brent Paur testified. He is a senior property manager for Fortress Properties Inc. He did not speak directly to Stevens about mattresses being placed behind the building.

On cross-examination, he agreed that there were no letters or e-mails forwarded to Stevens regarding his practice of leaving mattresses behind the building. He did not consider it a serious matter because Stevens removed them as soon as he was asked. [ 26 ] Philip Kufler testified by telephone. He was employed by Fortress Properties Inc. as property manager from September, 2006 to April, 2011. He inspected properties weekly and was concerned with keeping properties clean. He indicated that they would ask tenants to remove their own garbage and if they did not do so, it would be taken away.

He also stated that he had concerns with tenants leaving garbage outside because it became a snowball effect, and specifically with mattresses, as they could cause serious damage when set on fire. He said it was not an acceptable practice for Stevens to leave mattresses behind the building; however, he did not speak with Stevens. [ 27 ] On cross-examination, Mr. Kufler conceded that he did not tell Stevens that it was unacceptable for him to leave mattresses behind the building. Further, although work orders were occasionally written up to clean up the properties, there were no work orders related to Stevens.

He said Stevens had no authority to leave mattresses at the back door, but he understood that he did this and that he removed them on a regular basis. When asked if he was concerned about fire at the building, he stated that he was not really concerned, and that they kept up with garbage at the site. He had no recollection of any e-mail or letter being sent to Stevens asking for the removal of the mattresses on the basis that they constituted a fire hazard. [ 28 ] Daryl Harder also testified. At the time of the fire he was one of the maintenance staff. He was on call and was notified by the Fire Department.

By the time he got to the building the fire was extinguished already. He noticed springs in the rubble. He did not recall seeing any pallets, although he recalled that periodically there were pallets at the site near the audio visual store. He did notice mattresses outside the building periodically. He said every week they would be there but they were removed in a timely fashion. If something becomes a chronic problem, they clean it up and the tenant is charged. He said they always handle matters verbally with tenants unless it becomes an extreme problem. He never spoke with Stevens.

On cross-examination, he agreed that if the mattresses were gone in a timely fashion, then there was no issue with them. [ 29 ] Finally, Don Campbell testified for the plaintiff. At the time of the fire he worked as a porter for Fortress Properties Inc. The role of a porter is to clean up the parking lot, keep properties tidy, look for stray garbage, make sure garbage bins are not overfilled and ensure that the property looks nice. He did speak with Stevens. He noticed mattresses at the back of the building once in a while. He testified that he was told to talk to Stevens and tell him to clean up the mattresses.

He went into the store and told Stevens that it was unacceptable for him to store mattresses outside the building. He told Stevens that they had to keep the property neat and tidy. He indicated that he spoke to Stevens on approximately five occasions. When asked by plaintiff’s counsel why the mattresses were a concern, he said his concern was untidiness, but also that the mattresses were a fire hazard and they should not be leaning against the building. He testified that he never had to clean up the mattresses himself. On cross-examination, he stated it was not very often that he spoke with Stevens.

He conceded there was no problem if the mattresses were cleaned up in a reasonable time. He also agreed that his primary concern was with tidiness. [ 30 ] Richard Haines was called to testify on behalf of the defendant. He was a firefighter for thirty years and he responded to the fire at the building on October 22, 2011. He did not have a chance to observe the fire before the crew hit it. He said he saw several mattresses and pallets. He said there was not much left of the pallets by the time he got there. The mattresses were smouldering, not really burning. As part of his duties, he made notes after the fire.

His notes make reference to mattresses but they make no reference to pallets. His notes also indicated that a fire investigator was called as the fire appeared to be of a suspicious nature. [ 31 ] Mark Stevens also testified. He said that within the first few months of the Lease, he was told that the manager did not want him storing mattresses outside the building. He testified that he phoned the manager and discussed the issue with him. He explained that he was not storing the mattresses there, but that they were being picked up within a short timeframe.

He understood from this discussion that this was fine, as long as the mattresses were moved in a timely manner. He testified this was the only time anyone ever raised the issue with him. He never received any written communication from the landlord about the mattresses outside the building. [ 32 ] Stevens said that it was common for there to be garbage behind the building, blown in by the wind. There was always paper under the gas meters behind his premises. Further, fifteen feet away there was a blue recycle bin with paper in it.

He also indicated that there were often wooden pallets outside the building from another tenant. On the day the fire occurred, he put a box spring and two or three mattresses outside the building behind his premises. Shortly after arriving home that evening, he got a call regarding the fire and he went back to the premises and let the firefighters in. He also went back the next morning and cleaned everything up. He said there were lots of big nails all over the place, and that there are no nails in mattresses, but there are nails in pallets.

There was no damage inside the premises; all the damage was to the outside of the building.

[ 33 ] Poole Properties suggests that Stevens was negligent or careless in leaving mattresses outside the building unattended, and that this practice created a foreseeable risk of damage to the building by fire. Stevens argues that the mattresses did not constitute a fire hazard and that the Landlord was well aware of his business practice of placing the mattresses behind the building until they could be picked up for recycling. [ 34 ] I find that during the course of the Lease term, it was the practice of Stevens to place mattresses behind his premises, outside the building, for a short period of time.

The mattresses would generally remain there overnight, or if placed there on a Friday, until Monday. [ 35 ] I accept the evidence of Don Campbell that over the course of the term of the Lease, he spoke to Stevens on several occasions to ask him to move the mattresses. The concerns verbally expressed to Stevens in relation to the mattresses related to tidiness.

There was never any written communication to Stevens from Poole Properties to request that the practice be stopped, or to indicate that Poole Properties was concerned that the practice constituted a fire hazard. [ 36 ] Poole Properties was well aware of Stevens’ business practice of placing mattresses behind the Building for a short period of time. At no time did Poole Properties formally object to the practice, tell Stevens it was unacceptable, or demand that he stop it. In fact, the evidence indicates that it was condoned.

The four witnesses called on behalf of Poole Properties were consistent in their testimony that there was no problem with this practice, as long as the mattresses were moved in a timely fashion. [ 37 ] Poole Properties also suggests that Stevens was inviting someone to do mischief and that it was the leaving of the mattresses outside the building that attracted the individual or individuals who started the fire. I find no merit in this submission. Stevens’ practice of leaving mattresses behind the building for a short period of time before pick up for recycling was not inherently risky conduct that invited harm.

The evidence indicated that neither Poole Properties nor Stevens viewed the conduct in this manner. Rather, the fire was caused by the intentional act of an unknown vandal. In the result, I find that Mr. Stevens was neither negligent nor careless and that paragraph 8(

f) of the Lease has no application in this case. [ 38 ] Further, I find that paragraph 8(

g) has no application. This is not a situation where there was damage to the Premises in the form of broken glass. Finally, I find no merit in the suggestion that Stevens was in breach of paragraph 8(

m) of the Lease, on the basis that his conduct in leaving mattresses outside the building violated City of Saskatoon Bylaw No. 8175. No evidence was led with respect to the Bylaw. It is not clear whether or how the City has interpreted or applied the Bylaw. Furthermore, it is certainly not established that Stevens breached the Bylaw or that it even applies on the facts of this case. [ 39 ] Much of the evidence at trial and the arguments of counsel was concerned with whether the fire involved only mattresses or other items found behind the building such as pallets, paper, debris, and the mattresses.

I find the exact manner in which the fire was started to be irrelevant. It is clear that the mattresses were involved in the fire. Furthermore, it is clear that the fire was the act of a random arsonist. 3. Pursuant to the terms of the Lease, was Poole Properties entitled to retain Stevens ’ damage deposit? [ 40 ] Brent Paur testified that Stevens paid a damage deposit in the amount of $2,381.80.

He testified that the sum of $1,270.00 was deducted from the damage deposit for certain repairs to the premises that were performed at the end of the tenancy, and the remainder was held and applied towards the damage caused to the building by the fire. The repairs are described in an End of Tenancy Maintenance Request Form dated June 14, 2013 and marked as Exhibit P-6. [ 41 ] Stevens did a walk through of the premises with a representative of Fortress Properties Inc., but he was not advised that there would be a charge back against his deposit.

He first learned of this after litigation was commenced. [ 42 ] Poole Properties argues that the chargeback in the amount of $1,270.00 is fair and reasonable. I disagree. [ 43 ] There is a $900.00 charge with respect to “replace sealed unit”. The evidence indicated that a seal between the panes of glass on a window was broken, but Mr. Paur could not say when this occurred. Stevens testified that at the time he took over the premises the seals were gone already. There was no broken glass which precipitated the repair.

Poole Properties was not entitled to use the damage deposit to improve the premises, at the expense of the tenant. [ 44 ] As well, there is a $150.00 charge for re-keying a doorknob at the back of the premises. It was the evidence of Stevens that he never had a key to this door. According to the evidence of Mr. Paur, Poole Properties simply assumed that Stevens had installed the lock, and no one ever asked him whether he had a key. I find this charge back was unreasonable. [ 45 ] In all of the circumstances, I find the amount deducted from the damage deposit was excessive.

The evidence did establish that Poole Properties replaced a missing piece of plastic baseboard and some missing and burned out bulbs. I would fix the costs in relation to these items at the sum of $100.00. [ 46 ] Therefore, the plaintiff by counterclaim, Mark Stevens, o/a Wiseguy Mattresses, shall have Judgment as against the defendant by counterclaim, Poole Properties Limited, in the amount of $2,281.80, plus pre-judgment interest from June 13, 2013.

[ 47 ] I make no award as to costs. ____________________________ V.L. Monar Enweani, J