City Centre Property Management v. Al-khalifah, 2015 NSSM 3

IN THE SMALL CLAIMS COURT OF NOVA SCOTIA Citation: City Centre Property Management v. Al-khalifah , 2015 NSSM 3 Date: 20150202 Claim: 428087 Registry: Halifax Between: City Centre Property Management Claimant v. Mohammed Al-khalifah and Mubarak Ghazayil Defendants Adjudicator: J. Scott Barnett Heard: November 3, 2014 Written Decision: February 2, 2015 Counsel: Mike Sieber, AMG Claims Inc., agent for the Claimant Defendants, Self-represented By the Court: INTRODUCTION

[ 1 ] The Claimant, City Centre Property Management, seeks compensation from the Defendants, Mohammed Al-kalifah and Mubarak Ghazayil. The Claimant says that a hot water baseboard heating pipe burst after the Defendants negligently left the heat off with a window open in the leased residential apartment in question and, as a result, the Claimant incurred repair costs. [ 2 ] The Defendants deny liability – they say that they did not leave the window open nor did they turn off the heat before the water pipe in question burst.

They maintain that there is a gap in the building envelope through which the cold outside wind may have penetrated thereby causing the water in the pipe to freeze and then burst. [ 3 ] The Claimant incurred repair costs of $8,827.80 but it has arbitrarily reduced its Claim to the figure of $7,945.02 after applying a ten percent depreciation discount. FACTUAL BACKGROUND [ 4 ] On March 5, 2014, at around 6 a.m., a hot water baseboard heating pipe burst in an apartment where one of the Defendants resides.

The building itself, located at 420 Larry Uteck Boulevard in Halifax, Nova Scotia, was constructed about two years ago. [ 5 ] One of the Defendants lives in the apartment where the pipe burst and the other Defendant holds a Power of Attorney for that first Defendant; the second Defendant apparently signed the residential tenancy lease on the other Defendant’s behalf although he himself resides in an apartment that happens to be directly above the apartment with the burst pipe. [ 6 ] As one could anticipate, water poured out of the burst pipe, damaging the floor of the apartment and the ceiling of the apartment below. [ 7 ] The Claimants’ witnesses testified that after being notified of the burst pipe, they went to the apartment and observed, first, that the thermostat in the apartment was turned off completely – that is, the heat was turned off, second, that the curtains for the windows in the master bedroom (the room in which the pipe burst) were so long that they covered the baseboard register beneath the windows, third, that the windows in the master bedroom were closed but not locked and, finally, that the water pipe burst near the middle of its length below the windows in question. [ 8 ] These witnesses also testified that March 5, 2014 was a cold day in Halifax (the temperature measurement at the Stanfield International Airport was a maximum of -8° Celsius and a minimum of -17° Celsius with maximum wind gusts of 46 km/h). [ 9 ] In anticipation of the Defendants’ defence, the Claimants’ witnesses denied any prior problems of draftiness in or around the windows of any of the apartments in the building or that there had been any prior complaints in that regard.

They acknowledged that a hot water baseboard heating pipe had burst in another apartment in the building about one week prior to the incident in question here but I was told that a window left open had been the culprit in that case. [ 10 ] In any event, the Claimant tendered exhibits showing an expenditure of $8,827.80 with respect to (1) carrying out the initial water clean-up, (2) replacing the burst water pipe, (3) removing and disposing of flooring in the apartment that was damaged beyond repair, (4) re-installing new flooring and (5) repairing and painting drywall in the apartment below where the water escaped. [ 11 ] As noted, the Claimant has voluntarily and arbitrarily reduced its Claim by ten percent on account of “depreciation” – i.e. a betterment reduction because newer material has replaced older material. [ 12 ] In response, and beyond simply denying any acts of negligence on their part, the Defendants presented photographic evidence of

the apartment in question in an attempt to prove the existence of gaps or cracks between the ceiling and the walls that join it, between the floor and the walls that join it and between the window frames and the walls. [ 13 ] After having looked carefully at the photographs presented by the Defendants, I cannot tell for sure if there are the kinds of gaps and cracks of which the Defendants complain – that is, gaps or cracks that actually expose the interior of the building to the outside elements, whether directly or indirectly. [ 14 ] As a final factual finding, it is clear that the apartment in question is a place where one of the Defendants lives as his primary residence and that the Defendants are paying rent to the Claimant in consideration for the right to occupy the premises.

ISSUES [ 15 ] This Claim raises two main issues. [ 16 ] First, does this Court have jurisdiction to entertain the within Claim? [ 17 ] Second, if the Court does have jurisdiction here, has the Claimant proven its Claim on a balance of probabilities? DISCUSSION (

a) Jurisdiction of this Court [ 18 ] At the conclusion of the evidence, I raised the issue of jurisdiction with the parties.

I specifically asked for comment on whether or not the Court was precluded from adjudicating the within Claim because it might fall within the scope of the Residential Tenancies Act , R.S.N.S. 1989, c. 401. [ 19 ] In response, the agent appearing on behalf of the Claimant advised that similar cases have been put before the Small Claims Court without incident or objection and that is why no Application to the Director of Residential Tenancies was filed in this case. [ 20 ] The Defendants did not make any submissions on this discrete legal point. [ 21 ] The question of jurisdiction arises because of

Section 3 of the Residential Tenancies Act that states that landlords and tenants of residential premises (contrasted with commercial premises) cannot avoid the provisions of the Residential Tenancies Act : Application of Act 3

(1) Notwithstanding any agreement, declaration, waiver or statement to the contrary, this Act applies when the relation of landlord and tenant exists between a person and an individual in respect of residential premises. [ 22 ] There is no question that the apartment in issue in this case falls within the meaning of “residential premises” as defined in

Section 2 (

h) of the Residential Tenancies Act , that the Claimant falls within the meaning of “landlord” as defined in

Section 2(

b) of the Residential Tenancies Act and that each of the Defendants falls within the meaning of “tenant” as defined in

Section 2(

j) of that same statute. [ 23 ] I note that the stated purpose of the Residential Tenancies Act is to provide landlords and tenants with “an efficient and cost- effective means of settling disputes”:

Section 1A.

[ 24 ] The dispute resolution mechanism in the Residential Tenancies Act is set out in the statute beginning at

Section 13 . The statute makes it clear that a person can apply to the Director of Residential Tenancies in order to “determine a question arising under [the Residential Tenancies Act ] or alleging a breach of a lease or a contravention of [the Residential Tenancies Act ]: Section 13(1). [ 25 ] If a statutorily mandated mediation is unsuccessful, then the Director has a broad power to make a variety of orders pursuant to

Section 17A, including an order for the payment of money by one party to another, the amount of which payment is not expressly limited. [ 26 ] In this case, the parties did not tender any written lease agreements into evidence. However, every residential tenancy lease is deemed to contain various statutory conditions that cannot be altered by agreement or otherwise (see Section 9(1) of the Residential Tenancies Act ), including Statutory Condition No. 4 which states as follows: 4.

Obligation of the Tenant – The tenant is responsible for the ordinary cleanliness of the interior of the premises and for the repair of damage caused by wilful or negligent act of the tenant or of any person whom the tenant permits on the premises. [emphasis added] [ 27 ] In my view, the matters complained of in the within Claim fall within the scope of the matters covered by the Residential Tenancies Act and there is an effective remedy available to the Claimant through the residential tenancies dispute resolution process. [ 28 ] One must then consider what jurisdiction the Court has where Section 13(1) of the Residential Tenancies Act states that where a person applies to the Director of Residential Tenancies, “the Director is the exclusive authority , at first instance, to investigate and endeavour to mediate a settlement…” [emphasis added] failing which settlement the Director “shall…make an order in accordance with

Section 17A”: Section 17(1) of the Residential Tenancies Act . [ 29 ] The Small Claims Court Act appears to specifically address this situation where the following is stated at

Section 10 (d): Exclusions from jurisdiction 10 Notwithstanding

Section 9 [that sets out the specific jurisdiction of the Small Claims Court], no claim may be made under this Act … (

d) which involves a dispute between a landlord and a tenant to which the Residential Tenancies Act applies, other than an appeal of an order of the Director of Residential Tenancies made pursuant to

Section 17C of that Act; …. [ 30 ] In this case, neither party made an Application to the Director with respect to the issue of the burst water pipe. The question becomes whether, even in the absence of such an Application, the Director remains the “exclusive authority” in the first instance to address this dispute. [ 31 ] The decision of Justice Rosinski in Corfu Investments Ltd. v. Oickle , 2011 NSSC 119 is instructive. In that case, the landlord sought to recover the sum of approximately $55,000 on account of the alleged negligence of a tenant.

The landlord claimed that the tenant failed to properly dispose of smoking materials, the result of which was a fire and significant physical damage to the rented apartment.

The landlord argued that the Supreme Court of Nova Scotia, where it commenced its lawsuit against the tenant (as well as another tenant who was said to be vicariously liable for the actions of the first tenant), had concurrent jurisdiction with the Director of Residential Tenancies over all residential tenancy matters, at least until one of the parties actually made an Application to the Director. [ 32 ] After extensive analysis of relevant statutory provisions and previously decided cases, Justice Rosinski held that, if the parties are in a landlord-tenant relationship in a residential tenancies context, if the matter in dispute falls within the ambit of matters covered by the Residential Tenancies Act and if a proceeding under the Residential Tenancy Act can furnish an effective remedy for the parties, then the Supreme Court of Nova Scotia does not have concurrent jurisdiction with the Director of Residential Tenancies – the dispute must

proceed by way of an Application to the Director pursuant to

Section 13 of the Residential Tenancies Act . [ 33 ] The decision in Corfu v. Oickle, supra was applied by Justice Murray in Ross v. Elliott , 2011 NSSC 298 without comment and there is no other case at the superior court level (of which I am aware) that would suggest that Corfu v.

Oickle, supra has been overruled or even questioned. [ 34 ] It follows that if the Supreme Court of Nova Scotia, a superior court of inherent jurisdiction, does not have jurisdiction in a case like this, neither can the Small Claims Court of Nova Scotia, a court limited to a specific statutory jurisdiction set out in the Small Claims Court Act , R.S.N.S. 1989, c. 430. [ 35 ] It is no answer to suggest that, by participating in the hearing of this Claim before me, the Defendants attorned to (i.e. agreed to) this Court’s jurisdiction. I observe here that (

a) no Defence was filed (the Defendants verbally stated a

summary of their position at the outset of the hearing before me – at my request – so that the Claimant would be aware of the nature of the defence), and (

b) the Defendants have no background or training in legal matters. It would be unfair to find that the Defendants have necessarily agreed to the Court’s jurisdiction by participating in the hearing in this case. [ 36 ] Most importantly, parties cannot confer jurisdiction on a court unless a potential jurisdiction exists independently of any such agreement as to jurisdiction: Leighton v. Stewiacke Home Hardware Building Center , 2012 NSSC 184 at para. 66 .

If this Court does not have jurisdiction to address what is, in effect, a landlord-tenant dispute in a residential tenancies context, then the parties cannot legally agree to have this matter heard as a Small Claims Court Claim in any event. [ 37 ] In short, I find that this Court does not have jurisdiction to adjudicate the within Claim. If the Claimant wishes to pursue the matter, it must be brought as an Application to the Director of Residential Tenancies. (

b) Adequate Proof of the Claim [ 38 ] For the preceding reasons, it is not necessary to decide whether or not the Claimant has proven its Claim. CONCLUSION [ 39 ] The Small Claims Court does not have jurisdiction to decide this Claim and it will be dismissed without prejudice to a possible future Application to Director. [ 40 ] The Defendants have no costs to which they are entitled to reimbursement under Section 15(1) of the Small Claims Court Forms and Procedures Regulations , N.S. Reg. 17/93, as amended, and therefore there shall be no order as to costs.