Court File and Parties

Citation: Deemar v. JDEB Vet Management Inc., 2007 ONCA 893 Date: 2007-12-20 Docket: C47186 and C47377 Court of Appeal for Ontario

Before: Winkler C.J.O., Cronk and Epstein JJ.A.

Between: Dr. Sherry Deemar (Appellant) and JDEB Vet Management Inc. (Respondent)

Counsel: Leslie A. Vandor, Q.C., for the appellant Carolyn Brandow, for the respondent

Heard and released orally: December 17, 2007

On appeal from the order of Justice John R. MacIsaac of the Superior Court of Justice, dated May 15, 2007, and from the order of Justice M.P. Eberhard of the Superior Court of Justice, dated July 4, 2007.

Endorsement

[1] These appeals arise from a dispute concerning the appellant’s rental of commercial premises from the respondent for the conduct of the appellant’s veterinarian practice.

[2] The original five-year lease between the parties expired by its terms in the absence of an election by the tenant to exercise her option to renew. Thereafter, the parties entered into a new one year lease extension arrangement. Subject to one important exception, discussed later in these reasons, under the agreed terms of the extension arrangement, “all of the covenants” of the original lease applied to the extended one-year lease term including, therefore, an arbitration clause contained in the original lease. That clause provided “in the event of any dispute between the parties hereto arising out of the interpretation, performance or observance hereof or any portion hereof, such dispute shall be submitted to arbitration…”.

[3] The one year extension arrangement was due to expire on January 31, 2007. On that date, the tenant purported to invoke the arbitration clause to determine the future rights and obligations of the parties. Thereafter, she remained in possession of the leased premises on a month-to-month tenancy. The respondent landlord declined to submit to arbitration and took the position that it was entitled to repossess the premises. The tenant sought an order directing arbitration. Her application was dismissed by MacIsaac J. of the Superior Court of Justice on May 15, 2007. The landlord then obtained a writ of possession by order of Eberhard J. of the Superior Court of Justice dated July 4, 2007. The tenant now appeals to this court from the orders of both MacIsaac J. and Eberhard J.

[4] In our view, the tenant’s appeals must be dismissed for the following reasons.

[5] In respect of the appeal from MacIsaac J.’s order, the appellant’s argument flounders on clause 11(3) of the original lease. That clause read as follows: “If the tenant remains in possession of the premises after termination of this lease as aforesaid and if the landlord then accepts rent for the premises from the tenant, it is agreed that such over-holding by the tenant and acceptance of rent by the landlord shall create a monthly tenancy only but the tenancy shall remain subject to all the terms and conditions of this lease except those regarding the term. [Emphasis added.]”

[6] Thus, to the extent incorporated in the extension agreement, the terms of the original lease contemplated that any monthly tenancy entered into by the parties would be subject to the terms and conditions of the lease except, expressly, those regarding the term of the lease. In other words, if a monthly tenancy arrangement was entered into – as occurred here – the tenant could not rely on the provisions of the original lease regarding the term of the lease.

[7] Moreover, the written extension agreement executed by the parties, made as of May 2006, specifically provided that the provisions of the original lease relating to term did not apply to the agreed extension arrangement.

[8] In these circumstances, the tenant had no right to invoke the arbitration provision of the original lease following its expiry and the expiry of the extension agreement. The landlord had no obligation to enter into a new lease with the tenant. Nor is there any dispute here concerning the interpretation, performance or observance of the original lease or the extension agreement. Simply put, given that there is no right to a future lease of any term, there are no issues in dispute for submission to arbitration.

[9] Nor is Rampton v. Eyre, 2007 ONCA 331 of assistance to the tenant. In Rampton, there was a dispute whether the existing contract had been terminated. Under the plain language of the arbitration clause at issue in that case, a dispute regarding the currency of the contract was a matter falling squarely within the arbitration clause.

[10] That is not this case. The dispute here concerns the alleged obligation of the landlord to enter into a new future lease. By the specific terms of the original lease and the extension agreement, this is not a dispute that comes within the arbitration clause and the agreements between the parties.

[11] Accordingly, the appellant’s appeal from MacIsaac J.’s order is dismissed.

[12] Given the terms of s. 78(1) of the Commercial Tenancies Act, R.S.O. 1990, c. L-7, this court lacks jurisdiction to entertain the appellant’s second appeal. Neither party vigorously contested this. Accordingly, the appellant’s appeal from the order of Eberhard J. is quashed for want of jurisdiction.

[13] The respondent landlord is entitled to its costs of these appeals and of the motion before Rouleau J.A. of this court, which resulted in his order of July 12, 2007, fixed in the total amount of $7,500, inclusive of disbursements and G.S.T.

“W. Winkler C.J.O.”

“E.A. Cronk J.A.”

“G. Epstein J.A.”