DATE: 20001222

DOCKET:C34224

COURT OF APPEAL FOR ONTARIO

GOUDGE, BORINS and SHARPE JJ.A.

BETWEEN:

THE GEORGIAN GROUP INC. ) Anthony Moustacalis,

) for the appellant

Appellant )

• and - )

OAKVILLE GEM CONSTRUCTION LTD. ) Kenneth W. Watts,

) for the respondent

Respondent )

) Heard: December 13, 2000

On appeal from the judgment of Madam Justice Lynda Templeton dated April 11, 2000.

SHARPE J.A.:

[1] The appellant sought a declaration that it is not required to pay rent for the storage room it occupies in connection with its tenancy of commercial premises and that the useable area to determine the rent payable is that fixed by the Lease Amending Agreement dated April 1, 1994. The appellant also seeks an order requiring the respondent to refund the monies that it paid in excess of the amount stipulated for rent in the Lease Amending Agreement pending the determination of this application.

[2] The Lease Amending Agreement was entered into between the appellant and the previous landlord and owner of the leased premises. That agreement specified the area of the leased premises for the purpose of calculating the rent payable. The respondent, the successor in title to the previous owner, re-measured the premises occupied by the appellant and insisted that the appellant pay rent on the basis of a larger area than that specified in the Lease Amending Agreement. The dispute between the parties centres on the storage room occupied by the appellant. The storage room appears not to have been included in the area specified by the Lease Amending Agreement, but was included in the respondent’s calculations on re-measurement.

[3] In my view, the applications judge erred in refusing to grant the appellant the declaration and other relief it sought. However, in fairness to the applications judge, I would point out that before her the appellant relied on other grounds not pressed on this appeal, and that the principal point argued on this appeal does not appear to have been presented with the same force or clarity.

[4] In my view, the determinative factor is that the Lease Amending Agreement stipulated the square footage for the space occupied by the appellant in the leased premises as being 12,375 square feet. As a subsequent purchaser of the property, the respondent must take title subject to existing leases and accordingly, the respondent is bound by the terms of the Lease Amending Agreement. I see no basis upon which the respondent is entitled to alter or depart from the stipulation of the square footage for the leased premises contained in the Lease Amending Agreement. While the original lease between the appellant and the previous landlord did provide for measurement or re-measurement of the space in certain circumstances, in particular “to reflect any changes in the Gross Rentable Area of the Leased Premises”, the respondent has failed to demonstrate that any change occurred that would permit it to re-measure the premises and compel the tenant to pay rent on an area other than that specified by the Lease Amending Agreement. Accordingly, I see no basis upon which the respondent could be entitled to re-measure or recalculate the square footage of the space occupied by the appellant to include the storage area.

[5] In view of my finding that the terms of the Lease Amending Agreement are determinative, it is unnecessary for me to consider the other grounds advanced on the appellant’s behalf that were rejected by the applications judge.

[6] Accordingly, I would allow the appeal, set aside the judgment of the applications judge, and in its place, grant the appellant the declaration that the Lease Amending Agreement is valid and binding as to the area of the leased premises and that the appellant is entitled to a refund of any excess paid rent it paid over the amount stipulated by the Lease Amending Agreement, together with interest as provided by the Courts of Justice Act. The appellant is entitled to its costs of this appeal and of the proceedings in the Superior Court.

Released: December 22, 2000

“Robert J. Sharpe J.A.”

“I agree S.T. Goudge J.A.”

“I agree: S. Borins J.A.”