Mirhashemi v. Groumoutis Date:, 2013 BCPC 357

Citation: Mirhashemi v. Groumoutis Date: 20130513 2013 BCPC 0357 File No: S70834 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: ROXANA MIRHASHEMI CLAIMANT AND: TRIANTAFYLLOS GROUMOUTIS DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE A.E. ROUNTHWAITE Appearing in person: Roxana Mirhashemi Appearing in person: Triantafyllos Groumoutis Place of Hearing: Surrey , B.C. Date of Hearing: May 10, 2013

Date of Judgment: May 13, 2013 [ 1 ] The Claimant, Roxana Mirhashemi, is suing the Defendant, Triantafyllos Groumoutis, for the return of money paid to a third party. [ 2 ] The Defendant rented a strata unit he owned to Oscar Vision Productions Inc. (“the Tenant”). The Tenant operated a restaurant in the unit. The Claimant and Randy Ledgerwood were principals in the Tenant company and signed the lease collectively as indemnifier. During the term of the lease they arranged to sell the restaurant.

A week before the sale was to close, the Defendant said he would not sign an assignment of the lease to the buyer unless the Tenant paid an outstanding strata charge of $15,801.45. The Claimant did not believe her company was required to pay that charge, but felt she had “a gun to her head”: the sale would not go through unless the Defendant signed the lease assignment and he was demanding payment as a condition of signing. Therefore, she paid the money he demanded to the strata corporation’s agent.

She now asks that he reimburse her for the money she paid. [ 3 ] The Defendant relies on various terms of the lease to support his contention that the Tenant had a contractual obligation to pay the disputed sum. The issue in this trial is therefore

interpretation of the lease. [ 4 ] The following facts are not disputed. The envelope of the building in which the unit was located was being remediated before it was leased to the Tenant on May 1, 2008 for a renewable five-year term. The strata corporation assessed special levies to pay for this remediation, proportional to the square footage of each unit. The Defendant was assessed $131,329.61 payable on August 1, 2008 and $19,510.84 for over-runs on November 24, 2009.

He did not ask the Tenant to pay those special levies. [ 5 ] However, in 2009 during the remediation work it was discovered that the exhaust duct running up the exterior of the building to expel steam from the restaurant kitchen had been installed too close to residential units during the original construction of the building. This was a violation of the NFPA 2001 and BC Building Codes and a fire inspector directed that it be reconstructed.

On June 2, 2010 the strata corporation charged the Defendant’s account a “chargeback” of $15,801.45 to cover the expense of moving the exhaust duct. [ 6 ] There was no evidence to contradict the Defendant’s testimony that he did not receive an invoice from the strata corporation for this sum, and only discovered it when he asked whether there were any outstanding charges owing for the unit as part of his due diligence before signing the lease assignment.

He then demanded the Tenant pay the outstanding amount before he would sign the assignment. [ 7 ] I reject the Defendant’s submission that the chargeback constituted repairs for which the Tenant was responsible under s.12.2 of the lease. The case law he provided dealing with repairs was not applicable to the facts in this case.

However, the maintenance fees the tenant was obligated to pay under s. 6.1 of the lease are defined in s. 31.1 as being “all taxes, costs, maintenance fees, special assessments or other costs for which the Landlord is obligated to pay as a member of the Strata Corporation and as a registered owner of a strata lot…” I am satisfied that the charge for moving the ducting does constitute an “other cost” the Defendant landlord was obligated to pay as a member of the strata corporation. [ 8 ] Moreover, s. 29.2 requires the Tenant to “pay to the Landlord as additional rent the amount of all contributions which may be levied by the Strata Corporation from time to time during the term hereof against the Landlord as Owner of the Premises.” The Strata Corporation’s chargeback of the cost of moving the ducting is also covered by this section. [ 9 ] In addition, s. 14.1(

a) provides that the lease is “a completely carefree, absolutely net lease to the Landlord” who shall not be responsible “for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the Premises, the contents, the use or occupancy thereof, or the business carried on therein. S. 14(1)(

b) requires the Tenant to “pay all charges, costs and expenses of every nature and kind, extraordinary as well as ordinary and foreseen as well as unforeseen, relating to the Premises, the use and occupancy thereof, the contents thereof and the business carried on therein…” and s. 14(1)(

c) provides that “any amount and any obligation which is not expressly declared in this Lease to be the responsibility of the Landlord shall be the responsibility of the Tenant to be paid or performed by or at the Tenant’s expense in accordance with the terms of this Lease.” The disputed sum is an unforeseen cost, charge or expense relating to the unit and the business carried on in it. [ 10 ] Finally, in s. 27.1 the Tenant acknowledges and agrees that there are no improvements to be supplied by the Landlord except as expressly set out in the lease. [ 11 ] I conclude that the lease is very clear: the Tenant was required to pay the sum charged by the strata corporation to the Defendant for moving the ducting. [ 12 ] The Claimant and Mr.

Ledgerwood believe the Defendant opportunistically held them to ransom for the strata corporation’s chargeback at a time when they would have to comply with his demand in order to complete the sale of their business. They point to the fact that the strata corporation applied the charge to the defendant’s account in June but the Defendant did not seek payment from them for six months, and did so only when their sale was imminent. However, the Defendant explained that he did not know about the charge until he enquired while performing due diligence for the lease assignment.

His evidence on this point was not contradicted and I accept it. [ 13 ] The Claimant also argues that the lease should not be interpreted to require them to pay the chargeback sum because the Defendant did not ask them to pay the two special levies for building envelope remediation. I accept the Defendant’s explanation that he considered the three assessments to be different.

He did not seek reimbursement for the special levies because they concerned the building envelope and were shared by all unit holders; the building was under remediation at the time the lease was signed; and it was clear neither party intended the Tenant to assume his significant financial responsibility for envelope remediation, amounting to $150,840.45. On the other hand, the strata corporation apparently viewed the ducting expense as applying only to the Defendant’s unit; it charged him the entire cost of that work; and this expense was not foreseen when the lease was signed.

[ 14 ] Mr. Ledgerwood testified that before signing the lease, he and the Claimant were not told they would be paying levies. However, the lease itself requires the Tenant to pay costs, special assessments, and contributions levied by the Strata Corporation. By signing the lease the Claimant and Mr. Ledgerwood agreed to those terms. [ 15 ] Some of the Claimant’s arguments concern the strata corporation’s right to charge the Defendant for moving the ducting.

She points out that there was a restaurant in the Defendant’s unit when he bought it and when the lease was signed; that neither she nor the Defendant had discovered the problem in inspections; and that it was a pre-existing structural condition that would have had to be rectified before a restaurant could operate in the unit if it had been discovered earlier.

She also contends that the problem was created during construction of the building; it affected the entire building rather than just the restaurant; and the cost of correcting it should not have been charged to a single unit. [ 16 ] The timing of the Defendant’s discovery of the chargeback was unfortunate.

It prevented the parties from discussing with the strata corporation the issue of whether the cost of moving the ducting should be borne by the strata corporation or shared with all unit owners rather than assessed against the restaurant unit alone. [ 17 ] The Claimant’s view of the validity of the strata corporation’s chargeback may or may not be correct, but the strata corporation is not a party to this lawsuit, and whether or not its chargeback was justified does not affect the issue between the Claimant and Defendant.

Whether or not the strata corporation’s chargeback was justified, it was a cost or contribution charged to the Defendant by the strata corporation, and under the terms of the lease it was the Tenant, not the landlord, who was required to pay it. [ 18 ] For these reasons, I find the Claimant has not proven her claim against the Defendant and I dismiss it. A.E. Rounthwaite, Provincial Court Judge