Court of Appeal for Ontario

Date: 2018-01-17 Docket: C63852

Judges: Laskin, Trotter and Fairburn JJ.A.

Between

772067 Ontario Limited Plaintiff/Appellant

and

Victoria Strong Manufacturing Corporation and Paul Terlecki Defendants/Respondents

Counsel

Paul Starkman, for the appellant

Clifford Cole, for the respondent

Heard and released orally: January 12, 2018

On appeal from: the judgment of Justice Stephen Firestone of the Superior Court of Justice, dated May 2, 2017.

Reasons for Decision

[1] The appellant raises two issues on this appeal. First, can parties contract out of s. 19(2) of the Commercial Tenancies Act. And second, did the motion judge err in finding that the parties reached an agreement to reinstate the 2012 lease and that the landlord fundamentally breached that agreement.

[2] It is unnecessary to decide the first issue. The motion judge found that the appellant landlord had a right of re-entry for non-payment of rent. That finding is not challenged. And this appeal turns on the second issue.

[3] On the second issue, the motion judge made findings of fact that the parties agreed to reinstate the lease and that the landlord fundamentally breached the agreement by insisting additional terms be met before allowing the tenant back in the premises. Those two findings are supported by the evidence and are entitled to deference in this court.

[4] On the first finding, the appellant contends that the agreement required the respondent tenant to pay the costs of re-entry, not just promise to pay them. The motion judge was alive to that issue, but reasonably held at paras. 62 and 63 of his reasons:

I find that the defendant did match the terms of the offer and thus an agreement to reinstate the lease was created. Although the plaintiff gave evidence to the effect that he understood the defendant to be refusing to pay the costs of re-entry, the evidence indicates that the defendant was willing to pay re-entry costs and was simply waiting for an accounting…

Further, it would be illogical for the defendant to pay the full $22,759.81, despite disputing $13,759.81 unless it was making a bona fide effort to regain access to the premises by complying fully with the plaintiff's terms.

[5] The motion judge's second finding is supported by the landlord's October 7, 2014 letter. In that letter, the landlord insisted that the tenant pay for terms in addition to the unpaid rent and costs of re-entry before being allowed to re-enter the premises.

[6] Accordingly, the appeal is dismissed. The respondent is entitled to its cost of the appeal in the agreed on amount of $15,000, inclusive of disbursements and HST.

"John Laskin J.A"

"G.T. Trotter J.A."

"Fairburn J.A."