



COURT OF APPEAL FOR ONTARIO

CITATION: Cassandro v. Glass, 2019 ONCA 654

DATE: 20190813

DOCKET: C65643

MacPherson, Tulloch and Harvison Young JJ.A.

BETWEEN

Angelo Cassandro

Plaintiff (Appellant/

Respondent by way of cross-appeal)

and

Peter Glass and Peter Glass c.o.b. Micugh
    Construction Services

Defendants (Respondents/

Appellants by way of cross-appeal)

Paul J. Pape and Cristina Senese, for the appellant

Trent Falldien, for the respondents

Heard: June 13, 2019

On appeal from the order of
    Justice John S. Poupore of the Superior Court of Justice, dated June 19, 2018,
    with reasons reported at 2018 ONSC 3503.

Tulloch J.A.:

OVERVIEW

[1]

The appellant, Mr. Cassandro, leased his property to the respondent, Mr. Glass.
    Mr. Glass ran a commercial contracting business as a sole proprietorship. The
    relationship between Mr. Cassandro and Mr. Glass broke down. Mr. Cassandro
    terminated the lease, took possession of the premises, and distrained Mr. Glass
    commercial operating equipment on the property. Mr. Cassandro sued Mr.
    Glass claiming damages for unpaid rent and damage to the property. Mr. Glass counterclaimed
    and claimed damages for the value of the chattels seized and lost income. The
    trial judge awarded damages to both parties and set them off against each
    other. Both parties appeal on liability and damages.

[2]

For the following reasons, I would allow Mr. Cassandros appeal in part
    on the issue of damages for loss of income and would order a new trial on this
    issue, but would otherwise dismiss his appeal. I would allow Mr. Glass cross-appeal
    in part on the issue of crediting rent arrears from the value of the seized
    chattels, but would otherwise dismiss his cross-appeal.

FACTS

[3]

Mr. Cassandro owned a property in the City of Greater Sudbury (the
    City). Mr. Glass ran a commercial contracting business. In 2009, Mr.
    Cassandro leased his property to Mr. Glass. The lease was an oral agreement on
    a month-to-month basis with rent of $3,090 per month.

[4]

Mr. Glass intended to use the property to store construction vehicles
    and equipment. However, the property was zoned as rural which precluded this
    use. As a result, Mr. Glass undertook to rezone the property for commercial use
    with Mr. Cassandros assistance. Mr. Glass agreed to pay the fees and costs of
    the rezoning process and complete the paperwork. I will refer to this agreement
    as the Oral Agreement. Mr. Cassandro thus applied for approval to the City and
    to the Nickel District Conservation Authority (NDCA) to rezone the property
    to industrial.

[5]

As the parties proceeded with the rezoning application, Mr. Glass began
    to modify the property to make it suitable for his business. In 2009, Mr. Glass
    began dumping landfill into a designated flood plain regulated by the NDCA. A
    regulation enacted under the
Conservation Authorities Act
, R.S.O. 1990,
    c. C.27, prohibited such dumping without a permit.
[i]
The NDCA issued a violation notice and a stop work order. The NDCA later issued
    a permit to Mr. Cassandro that authorized Mr. Glass to dump landfill
    within certain limits. On October 30, 2009, the NDCA inspected the property. It
    found that Mr. Glass had violated the terms of the permit by dumping excessive
    landfill too close to the waters edge. Because Mr. Cassandro was the
    owner, the NDCA ordered him to remove the excess fill and to remediate the
    environmental damage the fill was causing.

[6]

Mr. Cassandro was ultimately successful in rezoning the property to
    industrial. However, the Ontario Municipal Board required him to enter into a
    Site Plan Control Agreement (the Site Plan Agreement) with the City as a
    condition of the rezoning. On August 30, 2011, Mr. Cassandro and the City signed
    the Site Plan Agreement, which was registered on title. The Site Plan Agreement
    incorporated the terms of the remediation that the NDCA had required and Mr. Cassandro
    agreed to complete this remediation to the NDCAs satisfaction. The Site Plan
    Agreement also contained additional terms that required further modifications
    to the property.

[7]

The Site Plan Agreement required Mr. Cassandro to pay $25,339.30 to the
    City for various fees and deposits related to the rezoning. Pursuant to the
    Oral Agreement, Mr. Glass was responsible for paying this sum and he did so.
    Likewise, as the Oral Agreement provided, Mr. Glass assumed the cost of
    completing the Site Plan Agreement.

[8]

After the Site Plan Agreement was signed, Mr. Glass was injured while
    working on the property. This resulted in an extended hospital stay. Mr. Glass
    evidence was that he spent one and a half years in a wheelchair after his
    release from hospital. Mr. Glass admitted at trial that this accident affected
    his income. However, he insisted in his trial evidence that the accident did
    not prevent him from managing his business and that he was able to direct his
    employees and staff.

[9]

In 2013, a survey was conducted that set out the extent of Mr. Glass
    overfilling of landfill. The NDCA directed Mr. Cassandro to remove the
    excessive landfill and conduct remediation. Mr. Cassandro approached Mr. Glass.
    They agreed that Mr. Glass would conduct the remediation. However, Mr. Glass did
    not complete the required remediation and refused responsibility to rectify the
    excessive landfill.

[10]

Mr.
    Glass failure to remediate the property led to the breakdown of the
    landlord-tenant relationship. Mr. Cassandro served a notice of eviction on Mr. Glass
    on November 4, 2013. Beginning in mid-January, Mr. Cassandro denied Mr. Glass
    access to the leased premises and his chattels. On January 13, 2014, Mr. Cassandro
    served a further notice on Mr. Glass that gave Mr. Glass nine days to remove
    all remaining property from the premises. The notice stated that Mr. Glass
    could not enter the leased premises unless he first paid Mr. Cassandro $3,100.
    Mr. Glass never removed the property from the premises. By January 31, 2014,
    Mr. Cassandro terminated the lease, took possession of the leased premises and
    distrained Mr. Glass chattels.

[11]

At
    some time after February 1, 2014, Mr. Cassandro took the position that he was entitled
    to distrain Mr. Glass chattels as security for damages that would be assessed
    at a future date. These damages included damage for ongoing rent and the excessive
    number of the chattels on the property, which Mr. Cassandro alleged were too
    expensive to relocate and store. However, Mr. Cassandro did not begin to
    attempt to ascertain the quantum of these damages until October 2015.

[12]

The
    chattels remain on the property by the lakeside. Mr. Cassandro failed to
    properly secure and maintain them. Some have disappeared and others have
    depreciated in value. The property is full of the chattels. At trial, Mr.
    Cassandro gave evidence that the chattels blocked access to the property. This
    both prevented him from renting the property and prevented the equipment required
    to remediate the environmental damage from gaining access to the property. The
    quote for an on-site move of the chattels to permit remediation was $17,797.50
    and the quote for removal to another site was $49,835.

SUPERIOR COURT DECISIONS

(1)

Endorsement of Gordon R.S.J., dated October 19, 2015

[13]

Gordon
    R.S.J. granted in part Mr. Cassandros motion for summary judgment. He found
    that Mr. Glass was in arrears of rent in January 2014 and that it was thus
    appropriate for Mr. Cassandro to take possession of the property owing to the
    default in payment. He ordered that Mr. Glass was liable to Mr. Cassandro for
    loss of rental income and other losses resulting from Mr. Glass use of the
    property, including the claim for work required to comply with the NDCA remediation
    order. Gordon R.S.J. ordered a trial to establish the amount of Mr. Cassandros
    damages. He made no determination as to the validity of Mr. Cassandros
    decision to retain possession of Mr. Glass chattels.

(2)

Endorsement of Gordon R.S.J., dated February 2, 2017

[14]

Gordon
    R.S.J. dismissed Mr. Glass motion to set aside his summary judgment order. He
    accepted Mr. Glass argument that the permit was issued to Mr. Cassandro and
    that the NDCA would hold Mr. Cassandro responsible for compliance with the
    permit. However, Gordon R.S.J. held that Mr. Cassandro still had a valid claim
    against Mr. Glass for the costs of remediating the work that Mr. Glass had
    improperly performed. This remedial work was required to comply with the
    permit.

(3)

Reasons of the Trial Judge

(a)

Mr. Cassandros Claim

[15]

The
    trial judge found that Mr. Cassandro was entitled to only $3,090 in rent for
    the month of January 2014. The trial judge based this finding on the fact that
    Mr. Cassandro terminated the lease agreement on January 31, 2014 and, as such, he
    could no longer charge Mr. Glass rent after this date.

[16]

The
    trial judge also awarded Mr. Cassandro damages for the remediation required by
    the NDCA and the cost of completing the Site Plan Agreement. He assessed these
    damages at $54,240 and $92,660 respectively, based on the cost estimates
    provided at trial. He also awarded Mr. Cassandro $1,299.56 for obtaining the
    survey to detail the remediation work required and the NDCA fees of $750.

[17]

The
    trial judge rejected the remainder of Mr. Cassandros claim for damages,
    including the cost that Mr. Cassandro claimed to move Mr. Glass chattels. He
    found that either Mr. Cassandro failed to prove these damages or they resulted
    from the excessive distress that he found that Mr. Cassandro had taken.

[18]

The
    trial judge awarded Mr. Cassandro total damages in the amount of $152,039,
    broken down as follows:



Category of Damage

Damage Award



Rent

$3,090



Cost to relocate fill

$54,240



Survey

$1,299



NDCA fees

$750



Cost to complete Site Plan Agreement

$92,660



(b)

Mr. Glass Counterclaim

[19]

The
    trial judge found that Mr. Cassandros distress of Mr. Glass chattels was
    excessive and in effect was a wrongful conversion. Because Mr. Cassandro had
    terminated the lease, he could only dispose of sufficient chattels to satisfy
    the outstanding rent. Mr. Cassandro had no right to withhold the remainder of
    Mr. Glass chattels in anticipation of future damages. The trial judge accepted
    the value of these chattels at $161,900 as appraised by the valuator Mr.
    Cassandro retained and awarded Mr. Glass this sum less the $3,090 in rent
    arrears for a total of $158,810. I note, however, that the actual number of the
    valuation was $167,390. The trial judge proceeded to rule that the chattels
    would be Mr. Cassandros to dispose of.

[20]

The
    trial judge noted that Mr. Glass counterclaim was very thin on evidence and
    difficult to accept as presented. He accepted that the seizure of the chattels
    prevented Mr. Glass from earning income. However, he found that Mr. Glass
    failed to mitigate his losses because he failed to pursue expeditious legal
    means to regain the seized chattels and instead chose to do nothing. The
    trial judge ultimately assessed damages for the loss of income counterclaim at
    $100,000. He provided no other analysis explaining how he arrived at this
    figure.

[21]

The
    trial judge awarded Mr. Glass total damages of $258,810. Finally, the trial
    judge set-off Mr. Cassandros damages against Mr. Glass damages and awarded
    Mr. Glass judgment in the amount of $106,771.

ISSUES

[22]

Mr.
    Cassandro raises the following issues on his appeal:

1)

Did the trial judge err by failing to find that Mr. Cassandro lawfully
    distrained Mr. Glass chattels pursuant to the common law remedy of distress
    damage feasant?

2)

Did the trial judge make a palpable and overriding error in determining
    that Mr. Glass had lost income as a result of the distraint?

3)

Did the trial judge err by awarding damages for the value of Mr. Glass
    chattels and for loss of income in light of the trial judges finding that Mr.
    Glass failed to mitigate his damages?

[23]

In
    his cross-appeal, Mr. Glass raises the following issues:

1)

Did the trial judge err by ordering Mr. Glass to pay damages of $92,660
    to finish the zoning upgrade for Mr. Cassandros property?

2)

Did the trial judge err in failing to give Mr. Glass credit for the $25,339.30
    he paid to the City pursuant to the Site Plan Agreement?

3)

Did the trial judge overcompensate Mr. Cassandro for the $3,090 in rent
    arrears by double-counting this figure?

MR. CASSANDROS APPEAL

(1)

Distress Damage Feasant

[24]

Mr.
    Cassandros first argument is that he was entitled to distrain Mr. Glass
    chattels by virtue of the common law defence of distress damage feasant.

[25]

The
    defence of distress damage feasant is an ancient common law right that permits
    an occupant of land to distrain a chattel found on that land in certain
    circumstances. Mr. Cassandro referred us to several Canadian cases that
    establish the requirements of the doctrine of distress damage feasant. Those
    cases appear to establish two main requirements. First, the chattel the
    occupant of the land has seized must have trespassed or have been unlawfully
    present on the occupants land:
Stewart v. Gustafson
, [1999] 4 W.W.R.
    695 (Sask. Q.B.), at para. 32;
Forhan & Read Estates Ltd. v. Hallett and
    Vancouver Auto Towing Service
(1959), 19 D.L.R. (2d) 756 (B.C. Co. Ct.), at
    p. 759. Second, the chattel must have caused actual damage to the occupants
    land and must be continuing to cause such damage at the time of its seizure:
R.
    v. Howson
, [1966] 2 O.R. 63 (C.A.), at pp. 77-78, per Laskin J.A. (as he
    then was);
Forhan
, at pp. 758-759;
Barbour v. University of British
    Columbia
, 2009 BCSC 425, 310 D.L.R. (4th) 130, at para. 50, revd on other
    grounds, 2010 BCCA 63, 316 D.L.R. (4th) 354, leave to appeal refused, [2010]
    S.C.C.A. No. 135. If these requirements are met, the occupant can distrain the
    offending chattel in order to secure compensation for the damage it has caused from
    its owner:
Stewart
, at para. 32;
Forhan
, at p. 758.

[26]

Mr.
    Cassandro asserts that the chattels were unlawfully on the property because Mr.
    Glass had no right to keep them there following the termination of the lease.
    Mr. Cassandro also identifies three forms of damage that he says allow him to
    rely on the defence of distress damage feasant. First, Mr. Cassandro says that
    the chattels caused environmental damage that led to the NDCA remediation order
    because Mr. Glass used the chattels to dump the landfill. This damage continues
    to the present day as the fill continues to sit on the flood plain and
    destabilize the slope. Second, Mr. Cassandro states that Mr. Glass chattels
    continue to prevent the machinery needed to remediate the property from
    accessing it. Third, the chattels form an obstruction that prevents Mr.
    Cassandro from renting out the property.

[27]

I
    do not accept this argument. Mr. Cassandro did not plead distress damage feasant
    and did not argue it at trial. The evidentiary record is not adequate to permit
    him to advance this claim on appeal and it would be unfair to Mr. Glass to
    allow him to do so. Moreover, properly understood, the doctrine does not assist
    Mr. Cassandro.

[28]

First,
    Mr. Cassandro neither pled distress damage feasant nor did he argue it at
    trial. It is uncontested that Mr. Cassandro did not argue distress damage
    feasant at trial. Nor is the statement of claim capable of being construed as
    including a pleading of distress damage feasant. The statement of claim does
    plead that Mr. Glass caused damage to the property by placing fill on the land
    and that Mr. Cassandro seized the chattels to secure compensation for the
    damage to the land and the cost of complying with the NDCA remediation order.
    However, it does not plead that the chattels themselves caused any damage to
    the land, even though this is a necessary element of distress damage feasant.

[29]

As
    a result, I conclude that it would be unfair to Mr. Glass to permit Mr. Cassandro
    to raise this doctrine on appeal. This court is rightly reluctant to consider
    new issues on appeal, particularly when those issues involve a factual
    component that was not fully explored at trial:
Kaiman v. Graham
, 2009
    ONCA 77, 245 O.A.C. 130, at paras. 18, 21. I do not accept Mr. Cassandros
    argument that it is appropriate to consider distress damage feasant on appeal
    because it is a pure question of law. The application of the distress damage
    feasant doctrine to this case involves factual questions that were never raised
    or fully explored at trial because Mr. Cassandro never argued distress damage
    feasant. In particular, as Mr. Glass submits, there is no evidence that any
    individual chattels that Mr. Cassandro seized were used in the excavation
    work that led to the NDCA remediation order. Nor did Mr. Glass have notice or
    an opportunity to respond to this argument as it was not pled or advanced at
    trial. The evidentiary record is not adequate to adjudicate the distress damage
    feasant issue and it would be unfair to Mr. Glass for this court to do so.

[30]

Second,
    even if it was appropriate for this court to consider the doctrine of distress
    damage feasant on this appeal, that doctrine does not assist Mr. Cassandro.
    As I have explained, distress damage feasant has two main requirements: that a
    chattel is trespassing or is unlawfully present on the occupants property, and
    that it is causing continuing actual damage to the occupants property. Here,
    Mr. Cassandros argument fails on the first requirement, namely that of trespass
    or unlawful presence. At the time of the initial damage in 2009, the chattels
    were lawfully on the leased premises because, as Mr. Cassandros tenant,
    Mr. Glass was entitled to bring the commercial operating equipment there.

[31]

I
    do not accept Mr. Cassandros argument that the chattels became unlawfully
    present on the property at the time that Mr. Cassandro terminated the lease. This
    argument is inconsistent with Mr. Cassandros own actions. The January 13, 2014
    notice he delivered to Mr. Glass barred Mr. Glass from removing the chattels
    until Mr. Glass satisfied all outstanding rent and cost. It does not lie in Mr.
    Cassandros mouth to assert that the chattels were trespassing when Mr.
    Cassandro himself prevented Mr. Glass from removing them prior to the date on
    which Mr. Cassandro seized the chattels.

[32]

Accordingly,
    it is not necessary to consider whether the second requirement of continuing
    actual damage is met on these facts.

(2)

Damages for Lost Income

[33]

Mr.
    Cassandros second argument is that the trial judge made a palpable and
    overriding error of fact in determining that Mr. Glass lost income as a result
    of the seizure of his chattels. Mr. Cassandro submits that the evidence does
    not support the finding that Mr. Glass business was in operation prior to the
    distraint of his chattels. He points to the evidence that Mr. Glass 2013
    income tax summary records $0 of income for the entirety of 2013, even though
    the chattels were only seized in January 2014. Accordingly, there is no
    evidence that Mr. Glass was operating his business or making a profit at the
    time of the seizure.

[34]

I
    agree with Mr. Cassandro that the trial judge failed to explain how he resolved
    the central issues on the counterclaim for damages for lost income. He neither
    explained how he concluded that Mr. Glass had lost income nor how he arrived at
    the $100,000 figure for lost income. This court owes deference to a trial
    judges assessment of damages. However, the trial judges reasons which leads
    to his or her assessment of damages must allow for meaningful appellate review:
R. v. Sheppard
, 2002 SCC 26, [2002] 1 S.C.R. 869, at para. 28;
Saramia
    Crescent General Partner Inc. v. Delco Wire and Cable Limited
, 2018 ONCA
    519, at para. 93.   The trial judge simply did not explain how he found that
    Mr. Glass had proven a loss and how he calculated the damages for loss of
    income. Accordingly, it falls to this court to undertake a fresh assessment:
Pita
    Royale Inc. (Aroma Taste of the Middle East) v. Buckingham Properties Inc.
,
    2019 ONCA 439, 1 R.P.R. (6th) 1, at para. 11.

[35]

I
    rely on the principles of proof of loss and quantum of damages that this court
    set out in
TMS Lighting Ltd. v. KJS Transport Inc.
, 2014 ONCA 1, 314
    O.A.C. 133, at para. 61, citing
Martin v. Goldfarb
(1998), 41 O.R. (3d)
    161 (C.A.), at p. 187, leave to appeal refused, [1998] S.C.C.A. No. 516. As
    the plaintiff in the counterclaim, Mr. Glass bore the onus of proving his
    claimed loss and the quantum of damages on a balance of probabilities. Trial
    judges are of course obligated to do their best to assess damages even where
    difficulties in quantification render a precise mathematical calculation
    impossible. In cases where the nature of the damage makes assessment difficult,
    the trial judge may even resort to guess work in assessing damages. However,
    plaintiffs still have the duty to prove the facts that trial judges base their
    damage estimates upon. Where a plaintiff fails to adduce the necessary evidence
    and the resulting absence of evidence makes it impossible for the trial judge
    to assess damages, that plaintiff may only be entitled to nominal damages.
    However, nominal damages are not appropriate where the plaintiff has
    demonstrated a substantial loss, even if there is a lack of evidence on
    quantum:
TMS Lighting
, at para. 85;
Rosenhek v. Windsor Regional
    Hospital
, 2010 ONCA 13, 257 O.A.C. 283, at para. 38, leave to appeal
    refused, [2010] S.C.C.A. No. 89.

[36]

In
    my view, the trial judge failed to resolve the conflicting evidence on whether
    Mr. Glass had in fact met his onus to prove that he lost income as a result of
    the seizure of his chattels. The trial judge simply stated that he was
    satisfied that the seizure of the chattels prevented Mr. Glass from earning
    income. Respectfully, the trial judge failed to make the necessary findings on
    this issue. As Mr. Cassandro argues, Mr. Glass 2013 income tax summaries show
    an income of $0 for that entire year. In light of Mr. Glass trial evidence
    that the injury he experienced did not prevent him from operating his business,
    it would have been open to the trial judge to find that Mr. Glass had ceased
    operating his business prior to the seizure of the assets. Yet the trial judge
    never made a finding on this critical issue. As this issue involves assessing
    Mr. Glass credibility, this court is not in a position to resolve it. In the
    circumstances, I would be prepared to order a new trial on the trial judges
    failure to resolve this issue alone.

[37]

Second,
    Mr. Glass failed to meet his onus in this case to quantify the lost income. As
    the trial judge himself found at para. 102 of his reasons, his counterclaim was
    very thin on evidence and difficult to accept as presented. The only
    documentary evidence that Mr. Glass provided in support of his claim for loss
    of income was personal tax return summaries. As the trial judge found, at para.
    51, Mr. Glass failed to provide back-up documentation to explain how the net
    business income was generated. Nor did the tax return summaries provide the source
    of the income. Likewise, Mr. Glass provided no documentary evidence for the
    years 2017 or 2018. Instead, Mr. Glass simply gave oral evidence that he ran a
    successful construction business and that he was unable to earn income
    following the seizure of his chattels.

[38]

Mr.
    Glass is responsible for the absence of evidence. He could have asked his
    clients and customers for documents or contracts to prove a revenue stream. He
    could have also sought documentary materials from his suppliers. As he admitted
    in cross-examination, he did not do so. All he did was produce his income tax
    summaries. As I have explained, these income tax summaries are a wholly
    inadequate basis on which to assess his damages. I am convinced that it would
    not have been difficult for Mr. Glass to produce evidence that would have
    allowed the trial judge to properly quantify the loss of income from the seized
    chattels, if any. Accordingly, this is not a case where the assessment of
    damages was difficult because of the nature of the damage Mr. Glass was
    attempting to prove.

[39]

As
    a result, I am satisfied that the trial judge erred in principle when he
    quantified the damages for loss of income at $100,000. On this record, there
    was an absence of evidence that made it impossible to assess damages for loss
    of income. The trial judge could not simply pick a number, as he appears to
    have done.

[40]

However,
    it would be inappropriate for this court to award nominal damages in this case.
    Mr. Glass gave oral evidence that prior to the eviction he ran a very
    successful construction service business. His evidence was that the eviction
    and seizure of his chattels had a devastating impact on his business.  As a
    result, he had to completely shut his business down because he had no
    additional income-generating capital assets. Admittedly, I would order a new
    trial on this issue due to the trial judges failure to resolve the conflicting
    evidence on whether Mr. Glass in fact suffered a loss. However, it would be
    open to a trier of fact to accept Mr. Glass evidence and find that he did
    suffer a substantial loss. I therefore disagree with Mr. Cassandro that
    there was no evidence capable of supporting a finding that Mr. Glass was
    operating his business at the time of the seizure of the chattels or that he
    suffered a loss. In these circumstances, it would be unjust to deprive Mr. Glass
    of the opportunity to establish the quantum of his damages: see
Martin
,
    at p. 190;
TMS Lighting
, at paras. 83-87. Accordingly, I would order a new
    trial on the issue of damages for lost income.

(3)

Mitigation

[41]

Mr.
    Cassandros third argument is that the trial judge erred in law by awarding Mr.
    Glass damages for both the value of the chattels and lost income in light of
    his finding that Mr. Glass failed to mitigate his damages. In response to this
    argument, Mr. Glass submits that the trial judge erred in finding that he had
    failed to mitigate his losses.

[42]

I
    agree with Mr. Cassandro that the trial judge failed to explain how his finding
    on mitigation affected his ultimate damage awards. The trial judge found that
    Mr. Glass had failed to mitigate his damages but then proceeded to award him
    $100,000 for lost income. He did not explain how he took Mr. Glass failure to
    mitigate into account in arriving at this figure. He likewise did not appear to
    make any deduction from the value of the chattels as a result of Mr. Glass
    failure to mitigate.

[43]

However,
    I do not accept Mr. Cassandros argument that Mr. Glass failure to mitigate
    disentitles him to damages. I agree with Mr. Glass argument that the trial
    judge made a palpable and overriding error of fact when he found, at para. 102
    of his reasons, that Mr. Glass simply chose to do nothing in the years from
    seizure until now.

[44]

First,
    the trial judges finding that Mr. Glass chose to do nothing is a misapprehension
    of the evidence. When Mr. Cassandro commenced his action against Mr. Glass on
    May 2, 2014, Mr. Glass promptly made a counterclaim for conversion in respect
    of the seized chattels. The trial judges finding, at para. 55 of his reasons,
    that Mr. Cassandro took no legal step to recover his property is thus a
    palpable and overriding error. Section 73 of the
Commercial Tenancies Act
,
    R.S.O. 1990, c. L.7, in fact expressly preserves the tenants right to bring an
    action to seek a remedy for unlawful distress. Mr. Glass thus did pursue a
    legal step to recover his property by commencing the counterclaim, and he did
    so promptly. In this regard, I also note that, on August 15, 2017, Mr. Glass
    counsel wrote to Mr. Cassandros counsel requesting dates for Mr. Glass to
    obtain the seized chattels from the property. Mr. Cassandros counsel rebuffed
    this request.

[45]

I
    also reject Mr. Cassandros argument that the trial judges finding of failure
    to mitigate finds support in the evidence of the bailiff. The bailiff gave
    evidence that Mr. Glass neither approached him with rent monies nor with
    instructions on how to recover the chattels in January 2014. However, as a
    matter of law, this evidence was incapable of grounding a finding of failure to
    mitigate. As the trial judge found, the loss only crystallized on January 31,
    2014 when Mr. Cassandro terminated the lease and seized the chattels. The
    bailiffs evidence thus concerned Mr. Glass conduct prior to the date the loss
    definitively occurred. As this court held in
Davy Estate v. CIBC World
    Markets Inc.
, 2009 ONCA 763, 97 O.R. (3d) 401, at para. 18, the defence of
    mitigation only arises after the plaintiff has suffered the loss and it
    concerns conduct unrelated to the initial loss. Accordingly, the defendant
    cannot invoke mitigation in relation to the plaintiffs pre-loss conduct or failure
    to avoid the loss prior to its occurrence: see Angela Swan & Jakub Adamski,
Canadian Contract Law
, 3rd ed. (Markham, Ont.: LexisNexis Canada Inc.,
    2012), at para. 6.274.1. Mr. Glass alleged failure to approach the bailiff
    with rent monies or to recover the chattels in January 2014 predated the loss
    and thus is incapable of grounding a finding of failure to mitigate.

[46]

Second,
    the trial judge made a palpable and overriding error of fact in finding that Mr.
    Glass failed to mitigate because he failed to pursue fairly expeditious legal
    meansto regain the chattels. Presumably, the trial judge was referring to the
    procedure in s. 66(1) of the
Commercial Tenancies Act
that permits a
    tenant to apply to a Superior Court judge to challenge the validity of
    distress. Sections 66(1) and 67 of the
Commercial Tenancies Act
provide
    that the Superior Court judge will hear and determine the matters the
    application raises in a summary way and may provide interim relief pending the
    determination of the dispute.

[47]

The
    trial judges apparent finding that Mr. Glass unreasonably failed to use the
    application procedure in s. 66(1) of the
Commercial Tenancies Act
was in
    error because the trial judge did not give any effect to the fact that Mr.
    Cassandro had started an action against Mr. Glass. That action put squarely in
    issue the validity of the seizure of the chattels as Mr. Cassandro pled that he
    was entitled to retain them. Instead of commencing a separate proceeding, Mr.
    Glass chose to respond to the action by making a counterclaim for conversion in
    respect of the seized chattels.  I am not convinced that it would have served
    the interests of justice for Mr. Glass to instead commence a parallel
    proceeding to seek the return of the seized chattels. Commencing a separate
    application instead of responding to the action with a counterclaim would have resulted
    in a duplication of proceedings that would raise the prospect of inconsistent
    findings between the judge hearing Mr. Glass application and the judge presiding
    over Mr. Cassandros action.

CROSS-APPEAL

(1)

Damages for Cost of Completing the Site Plan Agreement

[48]

Mr.
    Glass first argument on his cross-appeal is that the trial judge erred in
    awarding Mr. Cassandro $92,660 in damages for the cost of completing the Site
    Plan Agreement. Mr. Glass first challenges his liability for those damages. He
    submits that it is unclear that he made any agreement with Mr. Cassandro
    regarding their commitments to contribute towards the zoning upgrade. Even if
    they did make any agreements, Mr. Cassandro terminated those agreements when he
    terminated the lease in January 2014. Second, Mr. Glass argues that Mr. Cassandro
    failed to mitigate his damages. Mr. Glass submits that the property was not
    rezoned from rural to industrial. Accordingly, Mr. Cassandro can mitigate his
    damages by not completing the Site Plan Agreement and keeping the property zoned
    as rural. Even if the property was rezoned to industrial, Mr. Cassandro could
    mitigate his damages by submitting an application to change the zoning back to
    rural. If he did so, he would not be required to comply with the Site Plan
    Agreement.

[49]

I
    reject these arguments.

[50]

The
    trial judges findings of fact provide a complete answer to Mr. Glass argument
    that he was not liable. The trial judge found that Mr. Cassandro and Mr. Glass
    made an Oral Agreement in which Mr. Glass agreed to pay the fees and assume the
    costs of the rezoning application. Pursuant to this Oral Agreement, Mr. Glass
    assumed the costs of completing the work required by the Site Plan Agreement. I
    do not accept that Mr. Cassandros termination of the lease terminated the Oral
    Agreement. The Oral Agreement was separate from the lease agreement. Indeed,
    the parties made the Oral Agreement after the lease began. Accordingly, the
    termination of the lease did not relieve Mr. Glass from his obligations under
    the Oral Agreement.

[51]

The
    trial judges findings of fact also provide an answer to Mr. Glass argument on
    mitigation. The trial judge found that the rezoning application was successful.
    Implicit in this finding is that the propertys zoning changed from rural to
    industrial as a result of the rezoning application. The trial judges finding
    was grounded in the evidence of a site plan and subdivisions control engineer
    for the City who testified that the property was successfully rezoned from
    rural to industrial.

[52]

Furthermore,
    I also reject Mr. Glass alternative argument that Mr. Cassandro could
    have simply rezoned the property back to rural and thus avoided the obligations
    under the Site Plan Agreement.

[53]

In
    support of his argument, Mr. Glass points to evidence showing that the cost of
    filing a rezoning application is approximately $3,000 along with the evidence
    of the City engineer that a rural property typically does not require a site
    plan. However, in cross-examination, Mr. Glass counsel asked the City engineer
    whether the City would still require the Site Plan Agreement to be completed
    upon rezoning. The City engineer stated as follows:

There would be modifications
    required to the property, to go back to that zoning, because of the nature of
    the buildings, all the buildings on a property. There would have to be things 
    Im not an expert in that. That would be more of a planning exercise that would
    have to be discussed, how we would get back to [the rural] designation, given
    the history. Its a bit complicated.

The City engineer went on to state that he was not sure
    whether the buildings on the property would have to be demolished if the
    property was rezoned.

[54]

In
    my view, Mr. Glass has failed to meet his onus to show that Mr. Cassandro could
    have reasonably avoided his losses by submitting a rezoning application:
Southcott
    Estates Inc. v. Toronto Catholic District School Board
, 2012 SCC 51, [2012]
    2 S.C.R. 675, at para. 24. The evidence of the City engineer indicates that
    rezoning the property back to rural would involve a complex planning exercise
    that would require modifications to the property and possibly the demolition of
    structures. I cannot infer from this evidence how extensive these modifications
    would be. Nor can I conclude that the cost of these modifications would be less
    than the cost of simply completing the Site Plan Agreement. Without such
    evidence, this court cannot infer that Mr. Cassandro failed to mitigate his
    damages by acting unreasonably. Mr. Cassandros duty to mitigate does not
    require him to embark on such a risky or speculative venture for the benefit of
    Mr. Glass: see
Davy Estate
, at para. 26; Stephen M. Waddams,
The Law
    of Damages
, 5th ed. (Toronto: Canada Law Book, 2012), at para. 15.150.

(2)

Credit for Deposit Paid to the City

[55]

Mr.
    Glass second argument is that the trial judge erred in failing to award him credit
    for the $25,339.30 that he paid to the City under the Site Plan Agreement. Mr.
    Glass submits that it would result in a windfall to Mr. Cassandro if he did not
    receive credit for this sum.

[56]

As
    a preliminary matter, I note that only $13,500 of the $25,339.30 that Mr. Glass
    paid to the City is properly characterized as a deposit. A letter from the City
    to Mr. Glass that was entered as an exhibit at trial makes clear that
    $11,839.30 of the $25,339.30 total payment consists of payment for a
    non-refundable cash contribution and legal fees. There is no basis to give Mr.
    Glass credit for this sum.

[57]

I
    do not accept Mr. Glass argument that he is entitled to credit for the
    remaining $13,500. His argument is inconsistent with the law of deposit. As
    this court recently held in
Benedetto v. 2453912 Ontario Inc.
, 2019 ONCA
    149, 86 B.L.R. (5th) 1, at para. 7 (citations omitted), a deposit is not part
    of the contract to which it is attached but instead stands on its own as an
    ancient invention of the law designed to motivate contracting parties to carry
    through with their bargains. If the contract is not performed, the payee is
    not obligated to return the deposit to the payor:
Benedetto
, at para. 5.
    In this case, Mr. Glass would have understood when he paid the deposit that he
    would not get it back until the Site Plan Agreement was completed. Pursuant to the
    Oral Agreement with Mr. Cassandro, Mr. Glass was responsible for completing the
    Site Plan Agreement. He did not do so. He would only get the deposit back if he
    did. Mr. Glass cannot get his deposit back through the backdoor by crediting it
    from the damages he owes Mr. Cassandro.

[58]

Nor
    does failing to credit Mr. Glass for the deposit result in a windfall to Mr.
    Cassandro. Mr. Cassandros claim against Mr. Glass is grounded in contract,
    namely the Oral Agreement between the two men. The aim of contract damages in
    this case is to place Mr. Cassandro in the same position he would have been in
    if Mr. Glass had performed the Oral Agreement:
Fidler v. Sun Life Assurance
    Co. of Canada
, 2006 SCC 30, [2006] 2 S.C.R. 3, at para. 44. If the Oral
    Agreement had been performed, Mr. Cassandro would no longer have to pay the
    costs of completing the Site Plan Agreement. That is why the trial judge
    properly awarded Mr. Cassandro the costs of completing the Site Plan Agreement
    in damages. There is thus no windfall to Mr. Cassandro. The return of the deposit
    is a matter between Mr. Glass and the City.

(3)

Double-Counting of Rent Arrears

[59]

Mr.
    Glass third argument is that the trial judge double-counted the $3,090 in rent
    arrears. He submits that the trial judge both awarded Mr. Cassandro $3,090 in
    damages for rent arrears and applied this same sum as a discount against Mr. Glass
    damages for the value of the seized assets.

[60]

I
    accept this argument. The trial judges reasons show that he misunderstood the
    law of distraint and the principle that a party can either take distress or
    terminate the lease, but not both. The trial judge found that Mr. Cassandro
    had terminated the lease as of January 31, 2014. Yet the trial judge still
    found that Mr. Cassandro was entitled to take distraint for the $3,090 of rent
    and merely characterized the distraint as excessive. In fact, the distraint
    was not merely excessive, but wholly unlawful. It is settled law that distraint
    is unlawful when the landlord terminates the lease at the same time the
    landlord attempts to take distress. If the landlord terminates the lease, the
    landlord loses the entitlement to take distress, including the ability to take
    distress for rent arrears: see
Pita Royale
, at para. 5;
Country
    Kitchen Ltd. v. Wabush Enterprises Ltd.
(1981), 35 Nfld. & P.E.I.R. 391
    (Nfld. C.A.), at para. 10. As Mr. Cassandro had no right to take distress to
    begin with, he is not entitled to credit the $3,090 of rent arrears against the
    chattels seized.

CORRECTION OF NUMERICAL DISCREPANCY

[61]

In
    addition, I would revise the damages the trial judge awarded to Mr. Glass for the
    seized assets from $161,900 to $167,390 to correct a numerical discrepancy. The
    trial judge initially referred to the value of the seized assets as $166,190
    but later used the $161,900 figure when awarding damages. Neither of these
    figures is correct. In fact, the valuator, whose evidence the trial judge
    accepted, appraised the value of the assets at $167,390.

DISPOSITION

[62]

Accordingly,
    I would allow in part both the appeal and the cross-appeal. On the appeal, I
    would set aside the trial judges award to Mr. Glass of $100,000 in damages for
    lost income and order a new trial on this issue. I would otherwise dismiss the
    appeal. On the cross-appeal, I would strike out the trial judges finding that
    Mr. Cassandro was entitled to credit the rent arrears against the damages he owes
    Mr. Glass for the seized assets. I would thus strike out the trial judges
    deduction of the $3,090 in rent arrears from the $161,900 in damages that he
    awarded for illegal distress. I would otherwise dismiss the cross-appeal. Finally,
    I would correct the numerical discrepancy and revise the damages the trial
    judge awarded to Mr. Glass for the seized assets from $161,900 to $167,390. The
    effect of my ruling is to reduce Mr. Glass damages to $167,390, pending any
    additional damages that may be awarded at the new trial on damages for lost
    income. The result is that Mr. Glass shall have judgment against Mr. Cassandro
    after set-off in the amount of $15,351.

[63]

I
    would thus modify the trial judges order as follows:

·

Para. 2: Strike out $258,810 in the damages Mr. Cassandro owes to
    Mr. Glass and substitute $167,390;

·

Para. 3: Strike out $106,771 in the judgment Mr. Glass has
    against Mr. Cassandro following set-off and substitute $15,351.

[64]

I
    would also insert two additional paragraphs in the order following para. 3. The
    first additional paragraph will order that title to the seized chattels be
    vested in Mr. Cassandro. This gives effect to the trial judges ruling, at
    para. 101 of his reasons, that the seized chattels are [Mr. Cassandros] to
    dispose of. The second additional paragraph will order a new trial before a
    different judge to determine the damages, if any, due to Mr. Glass by Mr.
    Cassandro for loss of income resulting from Mr. Cassandros seizure of Mr. Glass
    chattels. This paragraph will also state that the costs of this new trial are
    reserved to the judge hearing it.

[65]

As
    success is split, I would order no costs.

Released: M.T. August 13, 2019

M. Tulloch J.A.

I agree. J.C.
    MacPherson J.A.

I agree. Harvison
    Young J.A.





[i]
The regulation is
Nickel District Conservation Authority: Regulation of
    Development, Interference with Wetlands and Alterations to Shorelines and
    Watercourses
, O. Reg. 156/06.


