Landlord Wins Appeal After Small Claims Court Wrongly Dismissed Property Damage Claim

12001721 Canada Inc. v. Switzer, 2023 ONSC 2676 (Divisional Court)

A Claim Thrown Out at a Settlement Conference

A numbered company owned a townhouse that it rented to a group of tenants. When the tenants vacated the property in July 2021, the landlord discovered significant damage. In October 2021, the landlord filed a claim in Small Claims Court in Milton seeking compensation for the damage.

The matter came on for a settlement conference in January 2022 — not a trial, but a preliminary step meant to explore resolution. The Deputy Judge, acting on her own initiative, dismissed the entire action for want of jurisdiction, ruling that the landlord's only remedy was at the Landlord and Tenant Board. Costs of $500 were ordered against the landlord. The landlord's paralegal was not given an opportunity to make submissions on the jurisdictional issue before the claim was thrown out.

Ken Wise Proves the Law Was Wrong

Ken Wise appealed to the Divisional Court. The Deputy Judge had relied on Kiselman v. Klerer, a 2019 Divisional Court case that appeared to hold that property damage claims by landlords against former tenants could only be brought at the LTB. Ken argued that this was an incorrect reading of the law.

Justice Harris of the Divisional Court agreed. The court held that since the tenancy had already ended before the claim was filed, the Residential Tenancies Act did not apply and the Small Claims Court had jurisdiction. The Deputy Judge's decision was set aside, the costs order was reversed, and the matter was sent back for a hearing on the merits.

Why This Case Matters

Landlords who discover property damage after a tenant has vacated sometimes face confusion about where to bring their claim — the LTB or Small Claims Court. This case clarifies that once the tenancy has ended, in this situation the landlord could proceed in Small Claims Court. It also illustrates the importance of seeking experienced legal counsel when a lower court makes a legal error — an appeal can reverse the outcome and get your case heard on the merits.

If you are a landlord dealing with property damage or a claim that has been improperly dismissed, contact Ken Wise & Associates.

Phone: (416) 924-6231

Email: ken@kenwiseandassociates.ca