Court of Appeal

Cite as: Vinland Holdings Ltd. v. Wisniowski, 1990 NSCA 7 IN THE SUPREME COURT OF NOVA SCOTIA APPEAL DIVISION Jones, Pace and Matthews, JJ.A. BETWEEN: VINLAND HOLDINGS LIMITED Appellant - and - LEO WISNIOWSKI Respondent THE COURT: Appeal dismissed with as per reasons for Jones and Pace, JJ.A., concurring S.C.A. 02134 Alex M. Cameron for appellant John H. Graham for respondent Appeal heard: February 6, 1990 Judgment delivered: February 26, 1990 costs to the respondent judgment of Matthews, J .A. i

MATTHEWS, J .A. : This is an appeal from a Judge Cacchione dated June 8, of rent owed by the respondent landlord. The appellant is the premises situate at 5963 College Street in Halifax. rooms there to students only. student, under a written lease in the standard form required by the Residential Tenancies Act, to lease room 25 from September I, 1988, at $285.00 per month. or about February 1, 1988. Mr. P. J. Cabrera, another tenant in the same premises was forced to vacate his or about February 20, 1988, due to there were three vacant rooms 25. Cabrera agreed to occupy On February 27, 1988, he moved for the remainder of the respondent's tenancy; and on September 1, 1988, entered into a lease of that period of one year. On November filed an application with the pursuant to the ~, claiming damages against the respondent of $1,830.00, being the value respondent's lease, that is, 1, 1988, minus security deposit, and interest of $155.00. decision of the Honourable 1989, respecting the amount tenant to the appellant owner of certain residential It rents The respondent, a medical S.N.S. 1970, c. 13, agreed 1987, to September 1, He abandoned his tenancy on room (A2) on flooding. At that time in the premises, A2, 11 and room lIon a temporary basis. into room 25: stayed there room for an additional 24, 1988, the appellant Residential Tenancies Board, of the unexpired term of the from February 1 to September

- 2 By virtue of s. 10C(2) required to file its report concluding paragraphs of the 26, 1989, are: The Board is satisfied that out of the room without any notice to the landlord. His impecuniosity is unfortunate, but cannot justify his action, nor are we satisfied that he any justification in the condition of the premises. In the circumstances, the to have Mr. Cabrera moved room. Mr. Wisniowski certainly need of it. A lease is also damages accruing for the same, whether or not the his tenants. The Board is satisfied, the landlord's restriction to students only amounts in these circumstances to mitigate his damages. The understandable business restricting the building is not satisfied, however, under the Act to select from especially in Spring and the tenant to be held liable. a duty under the Act to mitigate his damages this must prevail over a business decision. The Board therefore recommends the landlord's claim be half month's rent in the amount of $997. is to be credited with interest in the amount of owing of $832. The Board recommends to the Court that the tenant, Leo Wisniowski be ordered to Vinland Holdings Limited, the sum of $832. By notice of objection the appellant applied to the County Court to vary the report of the Board. The respondent and counter-application dated March 30, 1989. ­ of the Act the Board is with the County Court. The Board's report dated January Mr. Wisniowski moved can find landlord was entitled into Mr. Wisniowski's had no further a contract and the vacant room remain the landlord has shuffled on the other hand, that a failure to properly landlord has made an decision and [sic] to students. The Board that he is entitled a very narrow market, Summer and still expect The landlord has and to the Court that limited to three and a The tenant the security deposit and $155 leaving a balance pay to the landlord, dated February 2, 1989, filed a notice of objection

- 3 ­ Judge Cacchione said in concluding his decision: I have read the arguments that in written form. I have listened to the arguments of counsel this afternoon. the Board did err in two did not consider the question the surrender, that is, tenant in the unit occupied by the abandoning tenant. As well, it erred in considering the landlord had made a business decision and this was a failure to mitigate, it only failed to mitigate for half of the amount. I am satisfied on the whole that once a was placed into Mr. Wisniowski's landlord had mitigated his to the premises rented by and as such I find that for the rent for the month of February in the amount of $285.00 minus the security deposit of $155.00. I am varying the order of the Board to read that the tenant, Mr. Wisniowski, landlord, Vinland Holdings, the sum of $130.00. The appellant argued, about the "business decision", that the trial in his decision made contradictory statements, firstly: Wi th respect to the issue of whether or not the Board erred in finding that the landlord an understandable business decision the building to students, was no error. And later: Gentlemen, as I have indicated, wi th two things in this particular decision. the Board's conclusion that understandable business decision his building to persons I have difficulty with that because it goes directly to the question of mitigation of damages, mitigation in terms of a class of persons. have been filed I am satisfied that fashions: one, that it of the effect of the placing of the new that although new tenant room that the damages with respect the abandoning tenant: Mr. Wisniowski is liable shall pay to the in respect to the comment judge earlier had made and restricted I am satisfied there I have difficulty One, the landlord made an in not renting other than students, and

- 4 ­ Be that as it may, in my opinion, the trial judge's conclusions, as I have quoted, those conclusions are on appeal before us. The landlord's duty the tenant's corresponding obligation abandonment of a lease are, to the provisions of the Act, and Laskin, J. , in Highway Properties & Co. Ltd. (1971), 17 D.L.R. (3d) 710, said at p. 715: In the various common contractual terms (reflected, for example, in Short Forms of Leases Act) and, to a have superseded the common tenant; ... There is a clear duty upon the landlord to mitigate in these circumstances as set out in the lease between the parties: Abandonment and Termination abandons the premises or otherwise than in the manner permitted, the landlord shall mitigate any damages the abandonment or termination to the extent that a party to a contract is required by law to mitigate damages. That the appellant would attempt to rent the upon the respondent vacating is envisioned in the provisions of the lease respecting the tenant's responsibility. Section the standard form of lease signed by the parties sets out: are those which stand, and to mitigate its damages and on termination or a large extent, governed by as set out in the lease. Ltd. v. Kelly, Douglas law Provinces, standard degree, legislation, law of landlord and If the tenant terminates the tenancy that may be caused by room his room during the tenancy 8:16 of Schedule "B" to

- 5 ­ The Tenant agrees that in the event of the Tenant vacating the Tenant's apartment expiration of the Lease the Tenant shall reimburse expenses incurred in the Tenant to occupy the Tenant's duration of the Lease term shall reimburse the Landlord for any loss of rental income sustained as a apartment remaining vacant being obtained. The common law rule respecting mitigation has summarized in McGregor on Damages 168: The first and most important plaintiff must take all reasonable steps to mitigate the loss to him consequent wrong and cannot recover damages for any such loss which he could thus have through unreasonable action or inaction, Put shortly, the plaintiff avoidable loss. The facts of this substantially differ from those by counsel including Windmill Place v. (1976),16 N.S.R. (2d) 565 (N.S.C.A.), Supreme Court of Canada, [1978] the landlord agreed to rent to the tenant in a warehouse containing 62,500 thereafter the tenant repudiated that agreement. had rented none of the rest of Some four months later the landlord feet, including the space originally The landlord experienced difficulty renting any of the premises prior to the term, it is agreed that the Landlord for any course of obtaining a apartment for the and that the Tenant result of the Tenant's while a new tenant is been (15th ed., 1988) at p. rule is that the upon the defendant's avoided but has failed, to avoid. cannot recover for case are unique. They of any of the cases cited Apeco of Canada, Ltd. and on appeal to the 2 S.C.R. 385. In Windmill 2,526 square feet square feet. Shortly The landlord the building at that time. rented 17,000 square rented to the tenant.

- because the market for warehouse was depressed. In essence, this in the headnote, "that in a is largely vacant and is likely to remain does not recoup or mitigate his loss by renting a to another tenant". Further there was evidence of the "costly" advertising techniques taken premises, largely without success. the premises in question were not and were "merely a hardly distinguishable part project", and further that the multiple-tenant building was materially vacant and likely the decision of this Court, Supreme Court of Canada, at p. 387 wrote: It is significant that at the date of repudiation the respondent landlord of the new 70,000 square foot 62,500 square feet were rental) •... And also at pp. 388-9: It is apparent from the vacancy created by the appellant I s have any bearing on the rent 17,000 square feet new building. If the premises for Apeco had been the only available space suitable to the new tenant's needs, different considerations would have applied, but the building was more than half empty and the Goodboy' s not interested in renting and it was only after some of the respondent that it was induced to do so. 6 ­ space in the Halifax area Court decided, as set out multiple-tenant building which so, the landlord small unit by the landlord to rent the The Court accepted that "distinctive or singular" of a large to remain so. In upholding Ritchie, J., speaking f or the had rented no other part building (of which apparently available for above account that the breach did not new tenant's decision to of accommodation in the formerly reserved company was at first the Apeco space at all persuasion on the part

- 7 ­ It follows, in my view, transaction could have been appellant had not breached and that it was an independent in no way arose out of breach by the appellant. He spoke of the duty to mitigate damages at p. 389: The case of British Westinghouse Manufacturing Co. v. Underground [[1912] A.C. 673] is generally accepted as a leading authority on the extent in breach of contract cases general principle that a for any part of its loss which it has successfully avoided by its subsequent principle is, however, subject to the qualification expressed by Viscount Haldane language which was adopted v. Rowlett [[1944] S.C.R. he then was, said at p. 18: 'In breach of contract cases the rule was stated in British Westinghouse Electric and Manufacturing Co. v. Underground Electric Railways Haldane with the concurrence present that lithe subsequent to be taken into account, out of the consequences the ordinary course of business." The affidavit of Mr. the trial judge, sets out the events in respect to the tenancy in issue, room 25: 1. THAT I am the occupant of the premises located at Room 25, 5963 College Scotia, and have personal knowledge of the matters hereinafter deposed to except where otherwise stated. 2. THAT on or about September Room A2, located at 5963 Nova Scotia from Vinland period of one year, at and Five Dollars ($305.00) per month. that the February 1976 concluded even if the the original agreement transaction which the consequences of the Electric and Electric Railways and nature of mitigation and establishes the plaintiff cannot recover action. This general in the following by this Court in Karas 1] where Kerwin J., as by Viscount of all the Lords transaction, if must be one arising of the breach and in 1 Cabrera, in evidence before Street, Halifax, Nova 1, 1987 I leased College Street, Halifax, Holdings Limited for a a rent of Three Hundred

- 8 ­ 3. THAT on or about February forced to move out of this became flooded with approximately water covering the entire floor. 4. THAT on or about February told by Mr. Greg Byrne, an agent for Vinland Holdings Limited, to move into Room No. 5. THAT approximately one I was told by Mr. Greg to stay in Room No. 11 I Hundred and Thirty Five Dollars otherwise, I would have the second floor at a rent Eighty-five Dollars ($285.00). 6. THAT after numerous Byrne about avoiding another told by him that I had no Room No. 25 at a rent of Two Hundred and Eighty-five Dollars per month ($285.00). 7 . THAT on February 27, No. 25 and paid Two Hundred and Eighty-five Dollars ($285.00) per month until August 30, 1988. 9. THAT in September, 1988 for Room No. 25 for an year, ending August 30, 1989, occupying such premises. Mr. Cabrera gave viva Board. There is no evidence before us as to what effort, if any, the appellant made to rent any of these 11 or 25), except the rather bald statement in the report that Mr. Byrne, on behalf of the appellant, testified "no one came forward" to rent 20, 1988, I was room because the room six inches of 20, 1988, I was 11 temporarily. week after the flood Byrne that, if I wi shed would have to pay Three ($335.00) per month, to move into Room 25 on of Two Hundred and confrontations with Greg move, I was clearly choice but to move to 1988, I moved into Room I signed a new Lease additional period of one and I am presently voce evidence before the rooms (A2, Board IS any of the vacant rooms.

- 9 ­ However, on January 25, 1988, respondent, set out the provisions of s. 8:16, and then said: This means upon vacating suitable tenant to occupy to pay the rent until then your lease. Also, you must incurred while doing so, an ad in the paper. It is noteworthy that the appellant has not demanded payment for any such ad. It is logical to attempt to lease the room was made. with respect, the remark that to rent any of the vacant rooms Mr. Cabrera did. He evidently did room A2 after it was made habitable, at least that was an option given to him by Mr. Byrne. of the Board, Mr. Cabrera unhabitable for six weeks but that Mr. the appellant "stuck to his Board did not see fit to make any finding in respect to that conflict of evidence. Apparently evidence, as previously quoted, Judge Cacchione. Mr. Cabrera did not wish to move 11; had "numerous confrontations" tlc1ear1y told by him that I had room 25 at a rent of Two Hundred per month ($285.00)". He then moved into room 25. Mr. Byrne wrote to the if you do not have a your room, you will have or until the end of pay for all expenses e.g. paying the bill of conclude that no such no one came forward is not entirely correct. not wish to return to not According to the report testified that room A2 was Byrne, on behalf of testimony of ten days". The Mr. Cabrera's affidavit was not challenged before from room with Mr. Byrne; and was no choice but to move to and Eighty-five Dollars The rooms

- 10 ­ then vacant were A2, which was recently flooded and obviously not desirable to Mr. Cabrera, that he was "clearly told" by Mr. but to move [out of room 11] understandable that no one "came Mr. Cabrera had been moved there and 11 were not similar to room 25; witness the reasons given by Mr. Cabrera. Here, in my view, the rental to Mr. Cabrera could not have been concluded if breached the original agreement. arose out of the consequence of the breach by the respondent. Contrary to the facts in Windmill, the respondent's breach did not was instrumental in the decision Mr. Cabrera in the rental of demonstrate that, in the words premises formerly reserved for the respondent were "the only available space suitable" for he was told by Mr. Byrne that he there. Considering the actions respect to the tenancy in issue, reached by the trial judge. In the circumstances it is not necessary to deal with the and room 11. It is important Byrne that "I had no choice to room No. 25". It is thus forward" to rent room 25; by Mr. Byrne. Rooms 2A the respondent had not It was a transaction which the vacancy created by only have a bearing on but of both the landlord and room 25. The facts here of Mr. Justice Ritchie, the Mr. Cabrera's needs and indeed had no choice but to move take by the appellant in I agree with the conclusion other issues raised by the