Casale v Astoria Asset Management Ltd., 2023 ABCJ 138

In the Alberta Court of Justice Citation: Casale v Astoria Asset Management Ltd., 2023 ABCJ 138 Date: 20230619 Docket: P1990101688 Registry: Calgary Between: John Casale Plaintiff - and - Astoria Asset Management Ltd., Anton English, John Doe, Jane Doe, and Company XYZ Defendants Judgment of the Honourable Justice A.P. Argento Introduction [ 1 ] In this Civil Claim the Plaintiff, Mr. John Casale, seeks damages of $50,000.00 from the Defendant, Mr. Anton English. Mr. English and his family rented Mr. Casale’s house in Airdrie (the Property ) from 2015 to 2019. Mr.

Casale alleges that the Property was damaged extensively during the tenancy and seeks compensation based on either the anticipated costs of repair or diminution in value. [ 2 ] The Civil Claim was filed on May 13, 2019, naming Mr. English and Astoria Asset Management Ltd. ( Astoria ) as Defendants. Astoria was Mr. Casale’s property manager throughout the time that Mr. English leased the Property. [ 3 ] Mr. Casale and Astoria entered into a Pierringer Settlement Agreement (the Settlement Agreement ) dated July 20, 2022.

The Settlement Agreement was approved by Court order on September 16, 2022, and the Civil Claim was amended in accordance with the settlement to remove the allegations against Astoria. [ 4 ] The trial in this matter took place on May 24 and May 29, 2023. Evidence at Trial [ 5 ] Mr. Casale testified along with two expert witnesses, Mr. Colin Godbout and Mr. James Wallace. [ 6 ] Mr. English testified on his own behalf. [ 7 ] While the cause and extent of damage to the Property were generally disputed by the parties, certain background facts were either agreed to or not contested.

These facts may be summarized as follows: • The Property was built around 1993. Mr. Casale could not remember when he bought the Property, but the documents suggest that happened in 2013. Nothing material turns on the exact year of purchase;

• Mr. Casale hired Astoria in 2013 to help rent the Property. Astoria rented the Property to several different tenants from 2013 to 2015; • Astoria then rented the Property to Mr. English and his family pursuant to a lease dated April 15, 2015 (the Lease ). The parties to the Lease were Mr. English and Astoria. The initial term of the Lease was one year; • Mr. English paid Astoria a security deposit of $2300.00 and the monthly rent was also $2300.00; • Mr. English, his wife and their 6 children lived at the Property. Mr. English also had two dogs at the Property. Mr.

Casale testified that he only learned about the dogs well into the Lease and that he was very upset when he found out. The evidence at trial included a Tenant Pet Agreement from Astoria signed by Mr. English on April 15, 2015, and listing one dog; • After various renewals, the Lease was terminated on February 25, 2019. Mr. English and his family moved out of the Property as of February 28, 2019; • Astoria did not return the security deposit to Mr. English so he filed an application against Astoria with the Residential Tenancy Dispute Resolution Service ( RTDRS ).

The sequence of events leading up to the RTDRS hearing that took place on June 4 and 6, 2019, is set out in further detail below; and • After Mr. English moved out, Mr. Casale did not rent the Property, but sold it instead. A realtor was hired initially, but the property sat empty for four to five months and no offers were received. Mr. Casale then sold the Property privately and accepted the only offer he received for $300,000.00. Plaintiff’s Expert Evidence [ 8 ] Mr.

Godbout was qualified as an expert in residential remediation costs and gave detailed evidence about the anticipated repair costs for the Property. Mr. Godbout’s report was prepared on May 3, 2019, and revised November 22, 2021. At trial, Mr. Godbout reviewed a series of photographs of the Property and damages he identified in his inspection. His report stated that “the damages occurred during a rental period that spanned from approximately fall of 2013 through to September of 2018”. This period predated the Lease signed by Mr. English in April 2015. [ 9 ] Mr.

Godbout estimated repair costs at $46,908.00, although in argument Mr. Casale’s counsel noted that some of the costs were not being claimed. [ 10 ] Mr. Wallace was qualified as an expert in residential property appraisal. He provided a hypothetical, retrospective valuation of the Property after it was sold. Mr. Wallace’s report assumed that the Property “was clean and in good overall condition inside, typical for its age, without significant updating or modernization”. Mr. Wallace did not inspect the interior of the Property and relied on public records and earlier MLS listings which included various photographs.

He concluded that the market value of the Property was $418,000.00 as at July 2019. Decision 1. Is the 2019 RTDRS Proceeding a Bar to the Plaintiff’s Action? [ 11 ] The main claim advanced by Mr. Casale in this action alleges that Mr. English caused significant damage to the Property during the tenancy. Mr. English argues that this claim was already dealt with by the RTDRS hearing in June 2019, and that he should not be subject to any further liability. Accordingly, it is necessary to first determine if Mr.

Casale’s claims can be brought in this Court before considering whether any of the damages were caused by Mr. English and were more than ordinary wear and tear. [ 12 ]

Section 54.2 of the Residential Tenancies Act , SA 2004, c R-17.1 (the Act ) states as follows: Right to apply to Dispute Resolution Service 54.2

(1) Where a landlord has a dispute with a tenant and has a right to apply to a court under

Part 3 or

Part 4.1 for a remedy, the landlord may apply to the Dispute Resolution Service instead of the court for the remedy.

(2) Where a tenant has a dispute with a landlord and has a right to apply to a court under

Part 3 or to commence an action in a court under

Part 4 for a remedy, the tenant may apply to the Dispute Resolution Service instead of the court for the remedy.

(3) No application may be made to the Dispute Resolution Service if an application to a court has been filed with the clerk of that court by either party to the dispute (

a) for the remedy sought under subsection (1) or (2), or (

b) for any other remedy that is available under

Part 3,

Part 4 or

Part 4.1 to resolve a related dispute between the parties, unless the application to the court is first withdrawn. ( Emphasis added )

[ 13 ]

Section 54.3 of the Act states as follows: Effect of application to Dispute Resolution Service 54.3(1) A landlord’s application to the Dispute Resolution Service for a remedy binds the tenant in respect of whom the remedy is sought to the choice of that forum.

(2) A tenant’s application to the Dispute Resolution Service for a remedy binds the landlord in respect of whom the remedy is sought to the choice of that forum.

(3) Where an application has been filed with the Dispute Resolution Service by one party to a dispute, no application may be made to a court by either party to the dispute (

a) for the remedy sought under

section 54.2(1) or (2), or (

b) for any remedy that is available under

Part 3,

Part 4 or

Part 4.1 to resolve a related dispute between the parties, unless the application to the Dispute Resolution Service is first withdrawn. (Emphasis added) [ 14 ] The parties provided limited evidence in their testimony with respect to the RTDRS hearing and the events leading up to it. Mr. Casale testified that he was not aware of the RTDRS application filed by Mr. English and did not authorize Astoria to attend at the hearing. Mr. English provided some evidence on this issue, primarily through his cross-examination.

Neither party called anyone from Astoria to testify about its involvement at the RTDRS hearing. [ 15 ] The best available evidence on this issue is the documentary record submitted by the parties. The chronology of events leading to the RTDRS hearing is summarized as follows: • February 25, 2019 - The Lease was terminated ( Para. 13, Agreed Facts ); • February 28, 2019 - Mr. English and his family moved out of the Property by this date ( Para. 14, Agreed Facts ); • March 18, 2019 - Mr.

English filed an RTDRS application seeking to recover his security deposit ( Exhibit 5, Tab 122 ); • March 22, 2019 - The RTDRS issued a Notice of Telephone Hearing for June 4, 2019 ( Exhibit 5, Tab 125 ); • April 3, 2019 - Astoria provided Mr. English with a Final Statement of costs (the Final Statement ) relating to the termination of the Lease totalling $8,711.43. After deducting the security deposit of $2300.00, the net amount claimed from Mr. English was $6,411.43 ( Exhibit 5, Tab 110 ); • April 24, 2019 - Astoria provided a revised Final Statement indicating that Mr.

English now owed $6,064.93 after deducting his security deposit ( Exhibit 5, Tab 111 ); • April 25, 2019 -Tammy Milkowski emailed Mr. English advising that Astoria “handed the file off to the owner of the property” and that the owner would be following up with Ms. Milkowski directly. Ms. Milkowski was acting as the agent for Mr. English at the time ( Exhibit 5, Tab 113 ); • April 29, 2019 - Ms. Milkowski emailed Astoria acknowledging that the file had been handed over to the owner but noted that the contract to rent the Property was between Mr.

English and Astoria and the security deposit and monthly rent payments were made to Astoria. Ms. Milkowski stated that Astoria made the decision to not return the security deposit to Mr. English “based on now disputed claims for damages” and that the matter “should not involve our company [1] communicating with the owner of the property when Astoria acted in the capacity of the landlord during my client’s tenancy”. ( Exhibit 5, Tab 115 ); • April 30, 2019 - Ms. Milkowski’s April 29 email was forwarded by Astoria to Mr.

Casale’s legal counsel ( Exhibit 5, Tab 115 ); • April 30, 2019 - Melodie Wolf of Astoria emailed Ms. Milkowski advising that Astoria were no longer agents for the owner and that any dispute would have to be directed to Mr. Casale’s legal counsel. Mr. Casale’s legal counsel was copied with the email ( Exhibit 5, Tab 114 ); • May 13, 2019 - Mr. Casale’s legal counsel advised Ms. Milkowski that she would be initiating a lawsuit ( Exhibit 5, Tab 116 ); • May 13, 2019 - Mr. Casale filed a Civil Claim naming Astoria and Mr. English as Defendants. The Civil Claim was served on Astoria on May 21 and on Mr.

English on May 24 ( Agreed Facts, paras. 4-6 ); • May 28, 2019 - Mr. English filed an Amended Application with the RTDRS seeking abatement of rent and other damages for breach of the Lease in addition to return of the security deposit. The Amended Application was completed by the agent for Mr. English and included the following information: o Have you been served with a Provincial Court or Court of Queen’s Bench application on this matter? No. Applicant was served with a Claim from the Homeowner, with whom the Applicant never had any contract.

At all times, contracts were between the named Applicant and Respondent. [2] ( Exhibit 5, Tab 135 )

• June 4, 2019 - The RTDRS hearing took place with Mr. English and representatives of Astoria present. ( Exhibit 5, Tab 180 ); and • June 6, 2019 - The RTDRS decision and Tenant Order were issued. ( Exhibit 5, Tabs 181, 179 ) [ 16 ] At trial, the Court was provided with a transcript of the RTDRS decision dated June 6, 2019. Counsel for Mr. Casale noted that the transcript was prepared by the agent for Mr. English but did not identify any specific errors with the content of the transcript.

Based on the transcript, the items set out in Astoria’s Final Statement of deductions to the security deposit were considered and decided by the RTDRS. [ 17 ] These items included the following: Cleaning $808.50 Drywall patching $315.00 Garbage removal/dog feces pick up $882.00 Washer & Dryer replacement due to missing machines $597.50 Painting (non-approved painting done in home) $945.00 Miscellaneous maintenance items-tenant damage $4560.00 Electrical work needing to be brought back to original-non-approved tenant work $200.00 [ 18 ] The miscellaneous maintenance cost of $4560.00 was backed up by a two-page

summary “Statement of Repairs due to Tenant Damage” listing 40 separate items throughout the Property. [ 19 ] In its Tenant Order, the RTDRS ordered judgment in favour of the Tenant for return of the security deposit and abatement of rent and damages. The RTDRS also ordered judgment for the Landlord against the Tenant for damages to the Property in the amount of $1713.99. The result was a net judgment in favour of the Tenant, Mr. English, totalling $3211.01. [ 20 ] Mr. Casale argues that the RTDRS hearing and Tenant Order do not prevent his claim from proceeding against Mr.

English in this Court for the following reasons: • Mr. English was aware prior to the RTDRS hearing that Astoria was no longer Mr. Casale’s agent given the emails that were exchanged and because Mr. Casale had filed his Civil Claim. As a result, Astoria was no longer the landlord under the Act when the RTDRS hearing took place; • Mr. Casale never learned of the RTDRS application and never authorized Astoria to appear at the hearing; and • There would be no procedural fairness if the Civil Claim were dismissed as Mr. Casale did not have an opportunity to defend himself at the RTDRS hearing. Mr.

Casale was unable to present his expert evidence from Mr. Godbout at the RTDRS hearing, even though this report was completed and available prior to the hearing. [ 21 ] There is limited authority interpreting

Section 54.3 of the Residential Tenancies Act . In Ruby v Mills , 2019 ABQB 451 , [3] the landlord applied to strike the tenants’ Amended Statement of Claim alleging there was no jurisdiction over issues previously decided by the RTDRS. The Court noted that the RTDRS was limited to hearing matters within the $50,000.00 jurisdiction of the Provincial Court. As the tenants’ claims in the Court of Queen’s Bench exceeded the financial jurisdiction of the RTDRS, the Court refused to strike the claim on this ground.

The tenants’ claims were ultimately struck on other grounds as an abuse of process. [ 22 ] Having considered the relevant evidence and the wording of Sections 54.2 and 54.3 of the Act , the Court concludes that the claims against Mr. English for damages alleged to have been caused to the Property during the term of the Lease must be dismissed for the reasons set out below. [ 23 ] First,

Section 54.2 of the Act clearly states that a tenant may apply to the RTDRS instead of commencing an action in Court for a remedy under

Part 4 (Security Deposits). [ 24 ]

Section 54.3 of the Act further provides that the landlord is bound by the tenant’s choice of forum once the tenant has elected to proceed in front of the RTDRS. [ 25 ] In this case, Mr. English and Astoria were the parties to the Lease. Accordingly, when the Lease was signed (and throughout the tenancy) Astoria was a “landlord” under the Act : “landlord” means (

i) the owner of the residential premises, (ii) a property manager who acts as agent for the owner of the residential premises and any other person who, as agent for the owner, permits the occupation of the residential premises under a residential tenancy agreement,

(iii) the heirs, assigns, personal representatives and successors in title of the owner of the residential premises, and (iv) a person who is entitled to possession of the residential premises, other than a tenant, and who attempts to enforce any of the rights of a landlord under a residential tenancy agreement or this Act ; [ 26 ] Mr. English filed his application to the RTDRS in March 2019 before the Civil Claim was filed and therefore, he selected the RTDRS as the forum for the parties. This selection bound the “landlord” as defined under the Act . From this point forward, neither Astoria nor Mr.

Casale could bring a Court action (either in this Court or the Court of King’s Bench) to resolve the security deposit and associated property damage issues. Any

interpretation permitting these issues to be litigated again in this Court would not give effect to the clear meaning of the words used in

Section 54.3(2) of the Act . [ 27 ] Second, neither Mr. Casale’s subsequent termination of the management agreement with Astoria nor the law of agency overrides the RTDRS forum selection by Mr. English. [ 28 ] Astoria entered the Lease with Mr. English and was the “landlord” as defined in the Act throughout the tenancy. Furthermore, Astoria was still a “landlord” when the Lease was terminated on February 25, 2019. Astoria, and not Mr. Casale, initially received and subsequently withheld the security deposit after the Lease was terminated. Any claim by Mr.

English to recover his security deposit would be properly commenced against Astoria because it held the funds and had determined what deductions should be made from the security deposit for damages to the Property. [ 29 ] Under Sections 54.2 and 54.3 of the Act , Mr. English was entitled to select the RTDRS forum to resolve his claim to the security deposit. Determining the security deposit claim would require an assessment of the validity of Astoria’s deductions based on allegations that Mr. English had damaged the Property beyond ordinary wear and tear. Mr.

English made this forum selection on or about March 18, 2019, when he filed his initial application with the RTDRS. At that point in time, Astoria was still working for Mr. Casale and its services had not been terminated. [ 30 ] The fact that Mr. Casale subsequently terminated Astoria’s services did not override the operation of

Section 54.3 of the Act . Once the RTDRS forum was selected by Mr. English, the security deposit and associated property damage issues had to be resolved by the RTDRS unless Mr. English abandoned his application. [ 31 ] While Mr. Casale terminated Astoria’s services by the end of April 2019, there is no evidence that Mr. English agreed to abandon his selection of the RTDRS forum. In fact, the evidence is clearly to the contrary as Mr.

English amended his initial application and went ahead with the RTDRS hearing on June 4 and June 6, 2019. [ 32 ] Astoria’s representatives also attended and participated in the RTDRS hearing. There is no evidence that they advised the RTDRS that they were no longer authorized to appear. Mr. Casale’s counsel referred to an excerpt from the RTDRS hearing transcript by Ms. Wolf of Astoria where she stated that “[y]es, we are the broker, so we were representing the owner”.

However, that statement does not enable the Court to ignore the relevant provisions of the Act and decide the issues again as if the RTDRS hearing did not happen. Clearly, the RTDRS must have concluded that Astoria was authorized to attend as it went ahead with the hearing and rendered its decision. [ 33 ] As noted, no one from Astoria testified at trial to explain Ms. Wolf’s statement, the events leading up to the RTDRS hearing or why Astoria representatives attended at the hearing as the landlord. Furthermore, there was no explanation from Mr.

Casale as to why no one from Astoria was called to testify or would otherwise be unable to testify in support of his position. To the extent necessary, the Court draws an adverse inference against Mr. Casale for not having called anyone from Astoria to explain why they attended and participated at the RTDRS hearing as the landlord and what communication, if any, they had with Mr.

Casale or his legal counsel before attending. [ 34 ] According to the RTDRS decision, Astoria alleged there would be an amount owing to the landlord, but they were not pursing it as they no longer managed the rental property, and it exceeded the security deposit. Even though Astoria did not pursue these amounts, the underlying issues were argued and decided by the RTDRS. Specifically, the RTDRS considered the property damage issues identified by Astoria, including the extensive list of miscellaneous repair items totalling $4560.00. Ultimately, these are the same issues (albeit at a higher cost) that Mr.

Casale is seeking to relitigate in this Court. [ 35 ] Mr. Casale filed his Civil Claim in this Court naming both Astoria and Mr. English as defendants after Mr. English applied to the RTDRS. Mr. Casale was clearly entitled to sue Astoria in this Court as there was no RTDRS remedy available to him to resolve his issues with Astoria. [ 36 ] However, Mr. Casale was no longer able to sue Mr. English for the property damage issues once they were properly before the RTDRS. Mr.

Casale either needed to (1) participate in the RTDRS hearing along with or instead of Astoria or (2) convince the RTDRS that the matter should be moved to the Provincial Court. Neither happened. [ 37 ] Finally, Mr. Casale argues that dismissing his Civil Claim would be procedurally unfair as he was not served with notice of the RTDRS hearing and he therefore could not participate at the hearing. [ 38 ] Once again, there was no evidence at trial from Astoria to explain why Astoria attended the RTDRS hearing without Mr.

Casale or his legal representative. [ 39 ] That issue aside, the forum selection provision and the RTDRS process set out in the Act are clearly intended to avoid a multiplicity of proceedings between landlords and tenants. [ 40 ] If Mr. Casale’s argument were accepted, this would lead to a multiplicity of proceedings with inconsistent results, based on different evidence, contrary to

Section 54.3 of the Act . The Court would either have to ignore the earlier RTDRS decision or would have to take this information into account in whole or in part. The former would effectively circumvent the operation of

Section 54.3 of the

Act. The latter would create a host of evidentiary issues requiring this Court to decide what, if any, portions of the earlier RTDRSdecision should be accepted and what portions should not be accepted. [41] Additionally, Mr. English would be forced to litigate the same issues in two separate forums (with a clear risk of conflictingdecisions) in circumstances where he was simply exercising his rights under the Act. [42] The Court concludes, on the evidence before it, that any issues relating to concerns over procedural fairness are between Mr.Casale and Astoria. [43] If Mr.

Casale believed that Astoria did not keep him properly informed about the RTDRS process or inadequately representedhis interests at the hearing, these issues could have been addressed in the Civil Claim filed against Astoria. Mr. Casale settled separatelywith Astoria for an undisclosed amount before the issues in this trial had been decided. Mr. Casale was entitled to do that, but in doing soaccepted the possibility that the claims against Mr. English had already been decided by the RTDRS and could not proceed in this Court. [44] Accordingly, Mr. Casale’s claims against Mr.

English for breach of the Lease and damage to the Property during the tenancymust be dismissed because of the prior selection of the RTDRS forum to resolve these issues and the decision issued by the RTDRS. It istherefore unnecessary to review the repair cost evidence in support of the damages that have been alleged. 2. Does this Court have Jurisdiction to Decide any of the Other Causes of Action Alleged in the Civil Claim? [45] Alternatively, Mr.

Casale argues that he is entitled to damages based on the following causes of action that were not addressedby the RTDRS: • Waste; • Conversion and bailment. [46] These causes of action are addressed below. Waste [47] Mr. Casale pleads and relies on the tort of waste and argues this was not addressed by the RTDRS. [48] The Court was referred to the definition of waste in Prior v Hanna (1987), 43 DLR (4th) 612, at para. 15: Waste is either voluntary or permissive.

This distinction is set out in 27 Hals. (4th) 217: Voluntary waste implies the doing of some act which tends to the destruction of the premises...permissive waste implies an omissionthrough which damage results to the premises... [49] While Mr. Casale did not repair the Property before selling, he argues in the alternative that he is entitled to damages based ona diminution in value of the Property. Mr. Casale relies on Mr.

Wallace’s expert appraisal report and evidence to prove damages on thisbasis. [50] Various acts were alleged to constitute either voluntary or permissive waste including the following: • Electrical rewiring/venting and plumbing work; • Altering the landing in the garage; • Removing trees, bushes and shelving; • Allowing tenants or dogs to damage doors and window jambs; • Heat damage to siding; • Wall damage; and • Removing glass from the kitchen island. [51] It is immediately apparent that all of these items are for damages alleged to have been caused to the Property in breach of theLease.

Counsel acknowledged in argument that this cause of action was not before the RTDRS, but that the same damages for breach ofthe Lease were before the RTDRS. [52] With respect to damages based on diminution in value, Mr. Casale’s evidence does not prove that he obtained the highest,reasonably available sale price for the Property. Mr. Casale received a benefit by selling privately (even at a lower price) because he didnot have to pay realtor commissions.

The evidence also shows that he was not prepared to wait for other potential offers. [53] However, the Court does not need to decide whether the Property decreased in value as alleged. Quantifying damages basedon diminution in value as a result of waste is simply another way of arguing that the Property was damaged beyond ordinary wear andtear in breach of the Lease. Regardless of how the cause of action is framed or damages are quantified, Mr. Casale’s claim in waste isagain an attempt to establish that Mr.

English damaged the Property during the tenancy. [54] The claim in waste therefore seeks to relitigate the same issues that either were or could have been addressed in the RTDRS

hearing. It cannot be advanced in this Court for the reasons previously noted and is dismissed. Conversion/Bailment [ 55 ] Mr. Casale argues conversion of three items that were allegedly taken by Mr. English from the Property when he moved out: • A washer/dryer; • A digital programmable thermostat; and • A deep freeze [ 56 ] The washer and dryer were set out in Astoria’s Final Statement and were dealt with by the RTDRS. [ 57 ] There is no evidence that the thermostat or deep freeze were addressed by the RTDRS, but also no explanation as to why they were not dealt with at the hearing.

Furthermore, there was no evidence provided at trial as to their value. [ 58 ] All of these claims are dismissed either because they were decided by the RTDRS (washer and dryer), could have been decided by the RTDRS or there is no evidence proving their value (thermostat and deep freeze). [ 59 ] The claims against Mr. English alleging he was a bailee of certain goods and that he removed them from the Property without consent overlap with the conversion claims.

The Civil Claim refers to the washer and dryer and thermostat along with other items (for example, closet shelving and protective glass from the kitchen island). [ 60 ] Again, the subject matter of these claims was either addressed at the RTDRS hearing or could have been addressed. Accordingly, these claims are also dismissed for the reasons set out above. Costs [ 61 ] If the parties are unable to agree on costs, they can provide submissions to the Court in writing not to exceed three pages within 30 days of this decision. The parties are reminded of the Tariff of Costs set out in this Court’s Practice Note 2.

Heard on the 24 th and 29 th day of May, 2023. Dated at the City of Calgary, Alberta this 19 th day of June, 2023. A.P. Argento A Justice of the Alberta Court of Justice Appearances: Counsel, D. Bronwhyn Simmons for the Plaintiff Self-Represented,

for the Defendant, Anton English