Court of Appeal for Ontario
Date: 20220323 Docket: C69463
Fairburn A.C.J.O., Paciocco and Sossin JJ.A.
Parties
BETWEEN
Windsor-Essex Catholic District School Board and Conseil Scolaire Catholique Providence Applicants (Respondents)
and
2313846 Ontario Limited o/a Central Park Athletics Respondent (Appellant)
Counsel
Paul J. Pape and Cristina Senese, for the appellants Jessica A. Koper and Sandra Dawe, for the respondents
Heard
March 17, 2022 by video conference
On appeal from the judgment of Justice Munroe of the Superior Court of Justice, dated April 23, 2021.
Reasons for Decision
[1] This is an appeal from a decision interpreting a force majeure clause contained in commercial leases between the respondent school boards and the appellant, a commercial multi-purpose, sporting facility.
[2] The respondents rented space from the appellant. As a result of the province wide lock-downs owing to COVID-19, the appellant was unable to open its doors from March 17 to August 11, 2020 (the “relevant period”), and the respondents were unable to use the facility.
[3] The respondents brought an application for a decision that the force majeure clause in their respective leases should apply to abate the rent during the relevant period. That argument found favour with the application judge who found that, considered within its proper context, the force majeure clause applied and rent was abated.
[4] There is no dispute that the application judge was right in finding that the government lockdowns, as a result of COVID-19, triggered a force majeure event, as defined in the leases. Nor is there dispute that the appellant could not provide the respondents with the leased space for its intended and contracted use because of the lockdowns. The dispute lies in the effect of the triggering event on the parties’ contractual obligations.
[5] The parties agree that the application judge accurately summarized their positions on the application. To this end, the application judge summarized the appellant’s argument as follows:
[The appellant] argues that under the lease provisions, the triggering event excused the landlord from providing the leased premises but did not excuse the tenants from paying rent. The school boards’ obligation to pay rent was not impacted by any pandemic order. Consequently, under the lease, there is no basis to cease paying rent. To bolster this position, [the appellant] emphasizes the language in Clause 15.14: ‘In the event the Landlord claims a Force Majeure has prevented the Landlord from enabling the Tenant to make use of the Leased Premises or operate its programs …”(emphasis added), asserting that [the appellant] does not claim and never has claimed a force majeure . This fact, according to [the appellant] negates the following rent abatement provision.
[6] Clause 15.14 reads as follows:
In the event the Landlord claims a Force Majeure has prevented the Landlord from enabling the Tenant to make use of the Leased Premises or operate its programs in the Centre, Rent and Additional Rent shall fully abate during such period until the Landlord has restored the ability of the Tenant to use the Leased Premises and operate its programs in the Centre. [Emphasis added.]
[7] Ultimately the application judge rejected the appellant’s argument, finding that the appellant, because of the government lockdown orders, was prevented from performing a term of the lease, providing the leased space for its contracted use. The application judge determined that the consequences were twofold under the lease: (1) the landlord was excused from its contractual obligation to provide the leased space; and (2) the contractual rent obligation of the tenants was abated during the relevant period.
[8] The appellant argues that the application judge erred by reading the words “the Landlord claims” out of Clause 15.14. The appellant argues that the Landlord did not claim a force majeure event, (even though it is recognized that there was a force majeure event.) According to the appellant’s argument, only that claim could cause the abatement of the rent. The failure of the trial judge to give effect to those words – “the Landlord claims” – is said to constitute an error of law.
[9] Respectfully, we cannot accept the appellant’s position. We do not see the application judge as having ignored the expression “the Landlord claims”. Rather, read as a whole, the reasons make clear that the application judge was alive to the appellant’s argument, and particularly to the emphasis upon those words, but rejected the submission that they held the meaning that the appellant continues to advance in this court.
[10] This is not a case involving an extricable error of law. Rather, it is a case about contractual interpretation involving questions of mixed fact and law and therefore engages the standard of palpable and overriding error. We see none.
[11] In an exercise of contractual interpretation, the application judge first, accurately recounted the appellant’s argument and second, rejected that argument. It was open for him to do so. The reasons are clear as to how he resolved the matter. The application judge found that the triggering event was the lockdown, which resulted in the closure of the appellant’s facility. When that facility was closed by the appellant, it could not and did not provide the respondents with the leased space. According to Clause 15.14, once that happened, the rent had to – “shall” – fully abate during the relevant period.
[12] The appeal is dismissed.
[13] Costs in the all-inclusive amount of $15,000 will be paid by the appellant to the respondents.
“Fairburn A.C.J.O.”
“David M. Paciocco J.A.”
