Walker v. Rouvalis

Walker v. Rouvalis

The holding deposit was an application fee in substance and therefore prohibited by s.6 of the RTA; there was no formal lease but a deemed landlord‑tenant relationship existed under s.3(2)(b); the deposit could not be upheld as liquidated damages because it was not a genuine pre‑estimate and was a penalty; the prior Residential Tenancies Officer order for return of the deposit stands and must be complied with; estoppel/res judicata did not displace the adjudicator's review of the second decision under appeal.

Citation
2007 NSSC 137
Parties
Appellants: Thomas Walker and Valerie Gapp; Respondents: A. and P. Rouvalis
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
8 May 2007
Procedural Posture
Small Claims Appeal From Residential Tenancies Officer Decision Under the Residential Tenancies Act / Appeal Heard in Supreme Court of Nova Scotia (small Claims Appeal); Written Decision Issued
Outcome
Appeal allowed in part for Walker and Gapp; cross-appeal by A. and P. Rouvalis dismissed.
Legal Topics
Application Fees, Security Deposit, Liquidated Damages Vs Penalty, Deemed Landlord Tenant Relationship, Estoppel, Res Judicata, Interest
Source Language
English
Residential Tenancies Contract Law Civil Procedure Equity Application Fees Security Deposit Liquidated Damages Vs Penalty Deemed Landlord Tenant Relationship +3 more

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Parties

Thomas Walker and Valerie Gapp

Appellants

A. and P. Rouvalis

Respondents

Procedural Posture

Small Claims Appeal From Residential Tenancies Officer Decision Under the Residential Tenancies Act / Appeal Heard in Supreme Court of Nova Scotia (small Claims Appeal); Written Decision Issued

Legal Issues

  1. 1 Whether a holding deposit constituted a prohibited application fee under s.6 of the RTA
  2. 2 Whether a lease was formed or only an agreement to enter into a lease
  3. 3 Whether the holding deposit could be characterized as liquidated damages or was an unenforceable penalty

Ratio Decidendi

The holding deposit was an application fee in substance and therefore prohibited by s.6 of the RTA; there was no formal lease but a deemed landlord‑tenant relationship existed under s.3(2)(b); the deposit could not be upheld as liquidated damages because it was not a genuine pre‑estimate and was a penalty; the prior Residential Tenancies Officer order for return of the deposit stands and must be complied with; estoppel/res judicata did not displace the adjudicator's review of the second decision under appeal.

Court Disposition

Appeal allowed in part for Walker and Gapp; cross-appeal by A. and P. Rouvalis dismissed.

Orders

  • The $475.00 application/holding deposit is prohibited under s.6 of the Residential Tenancies Act and must be returned to Thomas Walker and Valerie Gapp.
  • A. and P. Rouvalis are ordered to return the application fee together with interest: the amount previously ordered to be paid of $476.91 as of November 21, 2005, and interest on the original $475.00 at the rate of 4% per annum from November 22, 2005 to the date of payment.