Court File and Parties

Westplex Centre Inc., 2007 ONCA 247

Date: 2007-04-05

Docket: C45373

Court of Appeal for Ontario

Before: MacPherson, MacFarland and LaForme JJ.A.

Between:

The Royalton Banquet and Convention Centre Limited (Applicant/Appellant)

and

Westplex Centre Inc. (Respondent)

Counsel: Bryan Finlay, Q.C. and John Lo Faso for the appellant Paul J. Pape for the respondent

Heard: April 2, 2007

On appeal from the judgment of Justice Geoffrey B. Morawetz of the Superior Court of Justice dated April 7, 2006.

Endorsement

[1] The appellant appeals from the order of Morawetz J. dated April 7, 2006, in which the appellant was granted relief from forfeiture, but on strict terms. The appellant, a commercial tenant, had brought an application for directions and for relief from forfeiture after the respondent, the landlord, sent the appellant various notices of breach and notices of termination. The appellant appeals on three grounds.

[2] First, the appellant contends that the notice of default sent by the landlord on January 26, 2006 did not comply with s. 19(2) of the Commercial Tenancies Act, R.S.O. 1990, c. L.7.

[3] We disagree. In the letter dated January 26, 2006, the respondent specified three defaults of the appellant: (1) the appellant had not kept the leased premises in good order and in first class condition and repair, pursuant to art. 11.01 of the lease; (2) the appellant was using part of the lobby for storage, contrary to the rules and regulations of the lease; and (3) the appellant had not rectified certain fire safety deficiencies as set out in a fire report. In addition, the respondent suggested what the rent should be for the next ten years lease and the respondent requested certain financial information from the appellant pursuant to the lease. The letter required the appellant to remedy the default within ten days, in accordance with the lease. Although the lease required the tenant to commence to remedy the default within ten days, this error in the notice strikes us as a very minor one. Moreover, in the context of extensive negotiations and correspondence between the parties, it is, put bluntly, far-fetched for the appellant to contend that the notice of default it received on January 26, 2006 was insufficient.

[4] Second, the appellant contends that the first term attached to the relief from forfeiture is too strict and is contrary to the lease. The term is:

(1) The Tenant, shall at its sole cost, bring the Leased Premises into first class condition and repair, which shall include, without limitation, painting and decorating as determined by the Landlord and rectification of the deficiencies listed in the Report of the Element Hospitality Interiors Inc. The required work shall be completed on or prior to September 30, 2007. The Tenant shall produce to the Landlord, within 45 days from the release of this decision, a plan outlining the work to be undertaken and the timetable for its completion.

The appellant contends that the deficiencies listed in this Report go well beyond repairs and, in effect, amount to a complete renovation of the premises.

[5] We disagree. The Report was explicitly written in this context: “Our frame of reference are the terms of the lease … that provides in section 11.01 that … ‘the Tenant shall maintain in good order first class condition and repair which shall include … periodic painting and decorating as determined by the Landlord’ …”. In our view, the Report, read as a whole, and, especially, the recommendations concerning the work to be done fit comfortably within the terms of the lease. We do not agree that the work recommended in the Report is, in appellant counsel’s vivid phrase, “a Chateau Laurier renovation” in a small Vaughan commercial plaza.

[6] Third, the appellant submits that the terms in the application judge’s order relating to financial disclosure, transfer of bookings to a different banquet hall, and use of the name Royalton Banquet Hall are too strict and/or irrelevant to the relief from forfeiture granted to the appellant.

[7] We disagree. In the context of the appellant receiving the benefit of an important discretionary order (relief from forfeiture), these terms do not strike us as either unconnected to the relief obtained or too onerous for the appellant to bear. The application judge, who in essence was case-managing this litigation, was in a good position to structure the relief he granted to the appellant.

[8] The appeal is dismissed with costs to the respondent fixed at $20,000 inclusive of disbursements and GST.

“J. C. Macpherson J.A.”

“J. MacFarland J.A.”

“H. S. LaForme J.A.”