On March 15, 2020, the Chief Justice of the Ontario Superior Court of Justice released a Notice to the Profession advising that all scheduled civil hearings were adjourned until further notice. The Notice to the Profession provides a procedure to schedule urgent and time-sensitive motions and applications where immediate and significant financial repercussions may result without a hearing. When motion or application materials are filed, by email to the appropriate courthouse, seeking an urgent hearing, the triage judge will determine whether or not the matter is urgent and should be scheduled for a hearing. There have been a few recent endorsements reported in respect to the scheduling of urgent commercial lease matters. Urgent Motion – Relief From Forfeiture In Oppong v. Desoro Holdings Inc., 2020 ONSC 1697, the applicant sought relief from forfeiture to set aside the landlord’s termination of the lease. Although the application was brought promptly and scheduled to be … Read More
Court Clarifies “Clean Hands” Doctrine Applies to Post-Breach Conduct
In 232702 Ontario v 1305 Dundas, 2019 ONSC 1885, the Ontario Superior Court of Justice recently considered the “clean hands” doctrine in the context of a terminated commercial lease for non-payment of rent. Importantly, the Court clarified that the doctrine of “clean hands” is not restricted to conduct occurring prior to the breach, but encompasses subsequent conduct as well. The Test for Relief from Forfeiture Under s. 98 of the Courts of Justice Act and s. 20 of the Commercial Tenancies Act, a court may grant relief from forfeiture, including forfeiture of a lease for non-payment of rent. The court’s power to relieve from forfeiture is an equitable remedy. It is discretionary, fact-specific and granted sparingly. The party seeking relief must prove that enforcing the contractual right would lead to inequitable consequences. In Saskatchewan River Bungalows Ltd. v Maritime Life Assurance Co., the Supreme Court of Canada held that a … Read More
Grounds for Judicial Intervention on International Arbitral Awards – Key Takeaways
In Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., a decision of the Court of Appeal for Ontario, a USD$258 million project for the construction of a slurry pipeline from a nickel mine in the mountains of Madagascar to the coast lead to arbitration between the appellant (the contractor) and the respondent (tendered the project). After mutually agreeing to by-pass the adjudication stage of their three-stage dispute resolution process and go straight to a Tribunal, the appellant was only awarded $7M of its $91M claim and the respondent was awarded nearly $25M on its counterclaim. These awards were challenged on appeal as being made without jurisdiction, in breach of procedural fairness, and violating public policy. However, the appeal was dismissed. Judicial intervention in international arbitral awards under the United Nations Commission on International Trade Law (UNCITRAL) Model Law (the “Model Law”) – though given the force of law by the International Commercial Arbitration Act … Read More
McDonald’s Not Served Valid Revocation of Waiver – Commercial Leasing in the Court of Appeal
The Court of Appeal for Ontario in North Elgin Centre Inc. v. McDonald’s Restaurants of Canada Limited, 2018 ONCA 71 allowed an appeal by McDonald’s from a decision on applications by both parties to determine whether the subject lease came to an end on a described date because McDonald’s had not complied with the renewal provision in the lease. The Court of Appeal allowed the appeal of the decision of the application judge, that despite that the parties were in negotiations, and that the respondent had waived its right to insist on strict compliance with the terms of the renewal provision (to refer the determination of the renewal rental rate to arbitration), that the respondent had effectively revoked its waiver and reverted to its strict legal rights, namely to terminate the lease in the absence of the referral of the dispute on renewal rental rate to arbitration within the permitted time. On the … Read More
Is a Burrito a Wrap? Ontario Court Decides Injunction Involving Exclusivity Clause in Commercial Lease
In 2432714 Ontario Inc. v. Heffner Development Group Limited, 2018 ONSC 1034, the Ontario Superior Court of Justice was recently asked to decide the age old question of whether a burrito was a wrap in the context of an exclusivity clause in a commercial lease agreement. In this case, the tenant operated a Pita Pit franchise in a 13 unit plaza owned by the landlord. The tenant had negotiated an exclusivity clause in the lease agreement that gave it the exclusive right to sell “pitas and wraps” in the plaza. When the tenant discovered that a Mexican fast food chain, Holy Guacamole, was renovating one of the units, it brought a motion for an interlocutory injunction prohibiting the landlord from leasing a unit in the plaza to Holy Guacamole. The tenant argued that Holy Guacamole sold “wraps” because its menu of tacos, burritos and quesadillas were all prepared by wrapping up food items in a tortilla. … Read More
Court of Appeal Confirms Strict Notice Requirements in the Termination of Commercial Leases
The Ontario Court of Appeal in Jay-Pee Drycleaners Inc. v. 2321324 Ontario Inc., 2017 ONCA 798, recently overturned a summary judgment motion decision involving the termination of a commercial lease agreement. In this case, the tenant had operated a dry cleaning business for 12 years before the lease was converted into a month-to-month tenancy. After the new landlord purchased the property and was assigned the lease, it demanded the tenant provide evidence that it had successfully completed a course related to the management of dry cleaning contaminants and waste. Even though the tenant advised that the Ministry of Environment had deemed the course to be unnecessary and the course was not available until the following year, the new landlord terminated the lease and retained a bailiff to re-enter and re-possess the premises. The tenant brought an action for damages arising from the unlawful termination of the lease. The new landlord responded with a counterclaim and brought a summary judgment motion. The … Read More
Court of Appeal Majority Rejects Oppression Claim Against Condominium Corporation’s Leasing of Parking Spaces
In Cheung v. York Region Condominium, the appellant owned several units which were leased to tenants who operated a 230-seat restaurant out of those units. After complaints by other unit owners that restaurant customers were taking up most or all of the 162 shared common element parking spaces, the condominium corporation enacted a by-law to allow the corporation to lease four parking spots per unit owner “from time to time”, reducing the potential number of spaces available to restaurant guests by 80%. The applicant sought a declaration that the by-law was invalid since the leases could be perpetual and thereby essentially create exclusive use common elements, which can only be created by specific declaration, not through by-law. The applicant further argued that the by-law was oppressive and unfairly prejudicial to the applicant’s interests. The majority held that, since the by-law only approved the ability to enter into leases, which could be on whatever … Read More
Construction Heavy Machinery & Equipment Disputes
We have experience and can act in matters relating to construction heavy machinery and equipment. Disputes often arise in connection with the purchase and sale, leasing, financing, use or operation of construction heavy machinery. Sometimes disputes arise in relation to ownership or possession of construction heavy equipment. We set out below some of the common types of disputes arising in relation to construction heavy equipment. Types of Disputes Common disputes include those related to: purchase and sale, pre-sale representations, warranties, damaged equipment, sale by auction, shipping heavy machinery and equipment, damages, loss and collapse, hire-purchase disputes, ownership and possession, and repossession by court order. Types of Construction Equipment A vast array of construction equipment is deployed in modern construction projects. Some construction companies lease and others purchase. Some have only occasional need for some construction heavy equipment. Typical construction heavy equipment and machinery includes: Backhoe loaders, breakers, bulldozers, chippers, compactors, concrete plants and pumps, conveyors, … Read More
Evicted Tenant Granted Relief From Forfeiture in Commercial Lease Case
In Kristen Lee Nesbitt v. RJH Reinsurance Services Inc., 2014 ONSC 2643, the landlord evicted the tenant due to alleged unpaid rent, realty taxes, water bills and arrears on a demand loan for leasehold improvements. The tenant applied to the Court for relief from forfeiture (e.g. possession of the premises) under the Commercial Tenancies Act, R.S.O. 1990, c. L.7, in order to continue operating its restaurant business on the premises. Since relief from forfeiture is an equitable remedy, the Court must consider the proceedings and the conduct of the parties under the circumstances, and any such terms as to payment of rent, costs, expenses, damages, compensation, penalty or the granting of an injunction to restrain any similar breach in the future. Justice Morgan found that the tenant did not appear to come to the Court with “unclean hands” as the dispute was regarding an accounting issue and the terms of the lease agreement, and it was not equitable to put the tenant out of business … Read More
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