) ) DANUTA PAWLACZYK Appellant – v. –, 2017 ONSC 66

CITATION : Pawlaczyk v. Dong, 2017 ONSC 66 DIVISIONAL COURT FILE NO.: 463/15 DATE: 20170105 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT BETWEEN: ) ) DANUTA PAWLACZYK Appellant – and – YUHUA DONG Respondent )) )) )) )) )) Michael Czuma , for the Appellant Julian Binavince , for the Respondent ) ) ) HEARD in Toronto: October 5, 2016 L, A. PATTILLO J.

Introduction [ 1 ] The Appellant, Danuta Pawlaczyk, appeals from the judgment of Deputy Judge McNeely of the Toronto Small Claims Court (the “Trial Judge”) dated May 12, 2015 dismissing her Defendant’s Claim for conversion (the “Judgment”) and from the Order for Costs dated June 26, 2015, awarding the Respondent, Yuhua Dong, costs in the amount of $3,750 plus HST (the “Cost Order”). [ 2 ] The Appellant sold her condominium (the “Condominium”) to the Respondent but did not move out following the closing of the transaction. After almost two months, the Respondent obtained possession.

As the Appellant’s furnishings and personal property were still in the Condominium, the Respondent had them moved to a storage facility and subsequently disposed of them to a junk dealer. [ 3 ] The Respondent commenced a claim in the Small Claims Court for damages arising from the Appellant’s breach of the sale agreement in failing to provide vacant possession of the Condominium.

In response, the Appellant commenced a Defendant’s Claim for the value of her possessions which had been disposed of by the Respondent. [ 4 ] Following a trial, the Trial Judge allowed the Respondent’s claim for breach of contract and assessed her damages at $6,888.27. In dismissing the Appellant’s Defendant’s Claim for damages for conversion, the Trial Judge held that the Appellant had abandoned her goods and that she had failed to prove that the goods had any value. [ 5 ] For the reasons that follow, I allow the Appellant’s appeal. Background [ 6 ] The Condominium is a two plus one bedroom unit in Toronto.

The Appellant had resided there for over 13 years prior to the sale. [ 7 ] The Agreement of Purchase and Sale provided it was to close on May 27, 2013. By subsequent agreement, the closing date was extended to May 29, 2013. The sale was completed on that date. When the Respondent arrived at the Condominium, she found the Appellant still in possession.

[8] Following a failed attempt to obtain possession of the Condominium with the assistance of a bailiff, the Respondentcommenced an application for a writ of possession in the Superior Court, returnable July 18, 2013. [9] On July 17, 2013, the Appellant was apprehended at the Condominium pursuant to a Form 42 under the Mental Health Actand taken to Sunnybrooke Hospital. [10] On July 18, 2013, the Respondent obtained a writ of possession for the Condominium. The Appellant did not appear. [11] On July 25, 2013, the Sherriff executed the Writ of Possession and gave the Respondent possession of the Condominium.

Allof the Appellant’s possessions were still in the Condominium. The Sherriff attached a notice on the door of the Condominium whichprovided, in part, that the Appellant had 72 hours to remove her possessions. [12] On July 28, 2013, the Appellant was released from the Hospital. She went directly to the Condominium.

The Respondent wasthere but would not let her in the premises. [13] On July 29, 2013, the Respondent had movers move all of the Appellant’s possessions from the Condominium to a storagefacility to enable the Respondent to move in. [14] Sometime in August, the Respondent’s lawyer had a telephone discussion with the Appellant’s daughter-in-law concerning theAppellant’s property. The Appellant’s son listened to the call on speaker. Both the Appellant’s son and the Respondent’s lawyer testifiedat trial concerning the telephone discussion.

The son testified that the lawyer said that if the Appellant paid $50,000 in seven days, shecould have her possessions back. The Respondent’s lawyer testified that he said that if the Appellant paid for “some of the damages” shehad caused, the Respondent would be happy to give the Appellant her possessions back.

In cross-examination he said that the amount hementioned was $15,000. [15] On August 14, 2013, the Respondent issued her claim in Small Claims Court. [16] On September 2, 2013, the Respondent gave the Appellant’s possessions to a junk dealer. [17] On September 6, 2013, the Appellant filed her defence to the Respondent’s claim and her Defendant’s Claim seeking anaccounting of her goods. The Appellant’s claim was later amended to claim conversion.

The Trial Judge’s Reasons [18] After dealing in some detail with the Respondent’s damages, the Trial Judge turned to the Appellant’s claim. [19] At the outset, she dealt with the value of the Appellant’s possessions. The Appellant presented a list of her possessions in theCondominium and prescribed a value to each item. The Trial Judge rejected the Appellant’s estimates of value on the ground that shewas not a trained appraiser and had put forward no valuation evidence. The Trial Judge then concluded that no damages for conversionwere proven.

She stated that the Appellant’s list of values represented the value of the items to the Appellant but “not the value of theitems by any legally relevant measure of worth.” [20] The Trial Judge next proceeded to dismiss the Appellant’s claim for conversion for three enumerated reasons: first, theAppellant had proven no damages; second, the Appellant did not communicate any intended use or desire regarding the goods to theRespondent until after the goods had been disposed of; and third, there was no communication between the Respondent and theAppellant and the telephone call between the Appellant’s daughter-in-law and the Respondent’s lawyer “resulted in no effectivecommunication”. [21] In reaching that conclusion, the Trial Judge accepted the lawyer’s evidence that the amount mentioned during the telephoneconversation with the daughter-in-law to resolve all matters was $15,000 not $50,000.

As the Appellant testified that her daughter-in-lawtold her that the Respondent wanted $50,000 to release her possessions, she concluded there was effectively no communication given therequest for payment got garbled and the Respondent’s position never reached the Appellant. [22] In reaching her conclusion that the Appellant had abandoned her property, the Trial Judge stated at para. 55: 55. I find no conversion on these facts. I find that until September 6, 2013, when the Defence is filed, a complete neglect by theDefendant as to the care and custody of her goods.

The Sheriff’s Notice marked as Exhibit #2 put on the condo unit door and evicting theDefendant from the premises set out the name of the legal representative for Mrs. Dong in clear terms and provided a contact number.Had the Defendant wished to obtain the return of her goods communication of her wishes was readily available to her. Mr. Czuma deniesthat the Defendant abandoned here [sic] goods but what other characterization can reasonably apply on these facts?

No other. [23] On June 26, 2013, following submissions, the Trial Judge issued the Costs Order awarding the Respondent $3,750 plus H.S.T.for the costs of both the Claim and the Defendant’s Claim. Standard of Review [24] The standard of review from a judge’s order varies, depending on the nature of the order.

On questions of law, it is correctness;on questions of fact it is palpable and overriding error; and on questions of mixed fact and law it varies on a spectrum betweencorrectness (where there is an extricable legal principal) and palpable and overriding error with respect to the application of the correctlegal principles to the facts: Housen v. Nikolaisen, 2002 SCC 33 , [2002] 2 S.C.R. 235 (S.C.C.). Analysis [25] Conversion is a strict liability tort.

Any act, innocent or otherwise, which interferes with the owners’ title to goods, is awrongful interference and constitutes a conversion: Rouge Valley Health System v TD Canada Trust, 2012 ONCA 17 at para 9.

[ 26 ] Abandonment is a defence to the allegation of conversion. Abandonment occurs when there is a “giving up, a total desertion, an absolute relinquishment” of private goods by the former owner. The onus is on the person alleging abandonment to establish it on a balance of probabilities. It is a question of fact turning on factors such as the nature of the property, the passage of time, the conduct of the owner and the nature of the transaction: Dean v. Kotsopoulos , 2012 ONCA 143 .

Conversion [ 27 ] The basis for the Trial Judge’s conclusion that there was no conversion was her finding that the Appellant had abandoned her possessions. That finding, in turn, was based primarily on the Trial Judge’s conclusion there was no communication by the Appellant to the Respondent.

In my view, based on the evidence as a whole, the Trial Judge made palpable and overriding errors both in her finding that there was no communication and by failing to consider all of the factors set out in Dean in respect of abandonment. [ 28 ] In my view, the Trial Judge finding that there was no communication between the Appellant and the Respondent concerning her possessions was clearly wrong given the evidence.

The Appellant’s evidence which was not rejected by the Trial Judge was that after she was released from the hospital, she returned to the Condominium and requested her possessions from the Respondent on more than one occasion. Further, the Respondent lawyer’s evidence was that he spoke with the Appellant “numerous times”. He stated that her behaviour was becoming “a bit bizarre and concerning”. As a result, he sought out other contact numbers for the Appellant which led to his conversation with the Appellant’s daughter-in-law.

The Trial Judge dismissed that communication as being ineffective because the message as to the amount the Respondent wanted for the release of her goods “got garbled”. The Appellant understood it to be $50,000 while the Respondent communicated $15,000. [ 29 ] While I accept the Trial Judge’s finding that the amount requested by the Respondent’s lawyer for the return of the goods was $15,000, in my view the miscommunication of the amount to the Appellant was immaterial. The key fact, as confirmed by the Respondent’s lawyer, was that she was holding the Appellant’s goods as collateral for payment of her damages.

The evidence is clear that fact was communicated to the Appellant and she understood it. [ 30 ] Further, once the Respondent’s position had been communicated to the Appellant, I do not consider there was any further requirement on her to contact the Respondent. Whether the cost to retrieve her possessions was $15,000 or $50,000, the Appellant had no obligation to pay that amount.

While the Respondent had clearly incurred costs by not being able to obtain possession of the Condominium, she had no legal right to demand any amount for the return of the Appellant’s goods apart from the costs incurred to move the goods to storage and for the storage. [ 31 ] Accordingly, based on the evidence as a whole, I consider that the Trial Judge was clearly wrong to conclude there was no communication by the Appellant concerning the return of her possessions.

As a result, the Trial Judge’s finding of abandonment, which was based primarily on her finding of no communication by the Appellant cannot stand. [ 32 ] In addition to the above, I am further of the view that the Trial Judge erred in reaching her conclusion of abandonment by failing to consider the factors set out in Dean having regard to the evidence as a whole. [ 33 ] As noted, the Dean factors concerning abandonment include the nature of the property, the passage of time, the conduct of the owner and the nature of the transaction.

The property in question here was the personal possessions of the Appellant including her furnishings, all of her dishes and kitchenware, her clothing’ personal items and all of her personal records such as financial and family records. It is not likely that the Appellant would easily abandon such property absent a clear indication. [ 34 ] Nor does the record indicate that the Appellant intended to abandon her property. When she was released from the hospital she immediately returned to the Condominium where she was denied entry by the Respondent. She testified she asked for her property but was refused.

She asked the manager of the building for help and managed to get a suitcase with a few of her personal items. She spent the first few nights sleeping in the billiard room of the condominium building. She again went to the Condominium and asked for her property including her clothes but the Respondent refused. She then went to the police to get her possessions but they indicated they couldn’t help her.

It was shortly after that that she was advised by her daughter-in-law that the Respondent wanted $50,000 to return her possessions which she said she didn’t have. [ 35 ] It was clear from the contact that both the Respondent and her lawyer had with the Appellant that she was suffering from some mental health issues. While I appreciate that the Appellant’s wrongful refusal to vacate the Condominium created an understandable amount of animus on the part of the Respondent, the Respondent should have recognised that the Appellant’s actions were governed in

part if not in whole by her medical issues. [ 36 ] Nor was time period involved of such length to give rise to the inference that the property had been abandoned. The time between when the Respondent obtained possession of the Condominium to when she disposed of the Appellant’s property was only 38 days (July 25 to September 2, 2013). [ 37 ] As noted in Dean at para. 28 , one of the factors considered in the cases in determining whether property has been abandoned is the efforts of the defendant to contact the property owner before the property is disposed of and the owners’ lack of response.

Here, apart from the one telephone call discussed, there is no evidence of any attempt by the Respondent to contact the Appellant to advise her where her property was located or that it would be disposed of to a junk dealer. [ 38 ] In my view, based on all of the evidence, the Trial Judge erred in finding the Appellant abandoned her property prior to September 2, 2013. Accordingly the Respondent is liable for damages for conversion because she disposed of the Appellant’s property by giving it to a junk dealer on September 2, 2013.

Damages [ 39 ] In my view, the Trial Judge further erred both in concluding that the Appellant had failed to prove any damages and by failing to assess the amount of those damages.

[40] The Appellant provided a list of her possessions which she testified were in the Condominium and which she valued at$179,963.59. As noted, the Trial Judge rejected the Appellant’s estimate of value on the basis she was not an appraiser and concluded,given no valuation evidence was presented, that the Appellant had failed to prove any damages. [41] I accept that the Trial Judge was entitled to reject the Appellant’s evidence of value. The fact that the Appellant’s damages aredifficult, if not impossible to assess, however, does not relieve the wrongdoer from having to pay damages.

Further, even where the claimfor damages has been dismissed, the trial judge is required to assess the damages. [42] The basic principles of assessing damages where the evidence is insufficient were set forth by the Court of Appeal in Rosenhekv. Windsor Regional Hospital (2010), 2010 ONCA 13 , 257 O.A.C. 283 at paras. 37-38 where the Court noted that wheredamages are unproven due to a failure to adduce available evidence, only nominal damages should be awarded.

However, where asubstantial loss has been demonstrated, nominal damages are not appropriate. [43] In my view, this is not a situation where nominal damages should be assessed. The damages were not unproven as a result ofthe Appellant’s failure to adduce available evidence. The Trial Judge’s reference to the absence of expert appraisal evidence wasinappropriate. Given the circumstances, expert evidence would not have been available.

The Appellant adduced the best evidence shehad. [44] On the other hand, I consider the Appellant established on the evidence that the loss of her property amounted to a substantialloss. The property consisted of all of her furnishings and personal belongings which had been accumulated by her both before and duringthe 13 years she resided at the Condominium. The list of items provided by the Appellant is extensive.

To not accept the value of theitems ascribed by the Appellant is one thing but to conclude effectively that there was no value to that property is in my view a palpableand overriding error. [45] The property the Appellant lost was not only extensive but in many respects irreplaceable. In the circumstances, therefore, Iassess the Appellant’s damages for conversion at $25,000. [46] The Respondent is entitled to her costs of moving and storing the Appellant’s possessions.

The evidence establishes that shepaid $555.00 to move the Appellant’s possessions and $89.30 for the storage ($50.88 for August and $38.42 for September). Thoseamounts should be offset against the Appellant’s damages. Conclusion [47] For the above reasons, therefore, the Judgment is set aside and the Appellant’s claim for conversion is allowed. The Appellantis entitled to damages in the net amount of $24,360.70. [48] In light of my decision, the Trial Judge’s Costs Order cannot stand and must be set aside. As noted, the Costs Orderencompassed both the Respondent’s claim and the dismissal of the Appellant’s claim.

Having regard to my decision, both parties weresuccessful at trial. In the circumstances, therefore, there should be no order of costs in respect of the trial. [49] The Appellant was successful on the appeal and is entitled to her costs of the appeal on a partial indemnity basis. [50] Based on her Costs Outline, the Appellant seeks a total of $6,403.65 in partial indemnity costs.

The Respondent takes no issuewith the Appellant’s costs and has filed a Costs Outline claiming a higher amount for costs. [51] In my view, the Appellant’s costs as claimed are reasonable having regard to the issues raised and the amount in dispute. Costsof the appeal awarded to the Appellant, fixed a $6,403.65 in total. L. A. Pattillo J. Released: January 5, 2017 CITATION: Pawlaczyk v. Dong, 2017 ONSC 66 DIVISIONAL COURT FILE NO.: 463/15 DATE: 20170105

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT BETWEEN: DANUTA PAWLACZYK Appellant – and – YUHUA DONG Respondent REASONS FOR JUDGMENT L. A. PATTILLO J. Released: January 5, 2017