Court File and Parties

Court File Nos.: 437/08 Released: 2009-05-14

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Re: G & I Management Ltd., Plaintiff (Respondent on Appeal) - and - Kilbarry Holding Corporation, Defendant (Appellant)

Before: Swinton J.

Counsel: Jane Lo, for the Plaintiff (Respondent on Appeal) Bruce Jaeger, for the Defendant (Appellant)

Heard at Toronto: May 13, 2009

Endorsement

[1] This is an appeal from the order of Deputy Judge Armstrong dated August 1, 2008, giving judgment for the respondent in the amount of $5,500.00 and costs of $1,425.00.

[2] The appellant (the “Landlord”) submits that the trial judge gave an erroneous interpretation to the lease between the parties, and that the costs award was in error.

[3] Both parties agree that the standard of correctness applies to the interpretation issue, as it raises a question of law.

[4] In my view, the trial judge made no error in failing to refer to section 11.01 of the lease. That section deals with “maintenance and repairs by the Tenant”. It requires the Tenant (the respondent here) to keep the premises in “first class condition”. This obligation includes making repairs and replacements to signs.

[5] The section does not require the Tenant to put up a new sign because the Landlord has changed the exterior of the building as part of a renovation of the plaza and wants a “new look”. Rather, this section deals with the Tenant’s obligations to deal with wear and tear of the premises, including its sign.

[6] The real dispute is with respect to section 11.08, “Signs and Advertising”. It reads, in part,

The Tenant will not display any sign, picture, notice, lettering or decoration on the exterior of the Premises without the prior written approval of the Landlord, which approval will not be unreasonably withheld. All existing signage on the Premises is hereby approved by the Landlord. … The Tenant will erect and maintain one or more identification signs (which the Tenant will own) of a type or types in a location or locations specified in writing by the Landlord and in accordance with the Landlord’s sign policy for the Shopping Centre…. (emphasis in the original lease)

[7] The bolded language was added at the request of the Tenant at the time that the new lease was signed in December, 2003. The trial judge concluded that the approval by the Landlord lasted the duration of the lease, and that the Landlord did not have the power to change its sign policy during the period of the lease (Reasons, Appeal Book, p. 9).

[8] The Landlord argues that the sign policy can be changed, as it was in 2005, and the reference to the sign approval in December 2003 does not prevent any change by the Landlord.

[9] The words of section 11.08 must be read as a whole. The Tenant must erect a sign in accordance with the Landlord’s sign policy. It did so here, as shown by the express language of approval added to the section. The language of section 11.08 does not say that the sign must be consistent with the Landlord’s sign policy as it may change from time to time during the term of the lease. Given the express approval of the existing sign, at the demand of the Tenant, the logical interpretation of the words of the section as a whole is the one adopted by the trial judge – namely, that the approval for the signage was for the duration of the lease.

[10] The Landlord also challenges the award of costs. Costs are in the discretion of the trial judge. In this case, I see no error in principle in the award of $1,200.00 for fees. The trial judge relied on s. 29 of the Courts of Justice Act, R.S.O. 1990, c. C.43, which provides that in Small Claims Court, an award of costs, other than disbursements, shall not exceed 15 per cent of the amount claimed, absent certain circumstances. Given that provision, I see no reason to interfere with the costs awarded, as the Tenant was successful in the proceeding. The amount awarded was reasonable, given that it had counsel.

[11] Therefore, the appeal is dismissed. Costs to the Tenant are fixed at $800.00, on a partial indemnity scale, plus GST plus disbursements.

Swinton J.

Released: May 14, 2009