Court of Appeal for Ontario

Date: 2022-06-16 Docket: C69875

Judges: Benotto, Zarnett and Sossin JJ.A.

Between:

Anderson Learning Inc. operating as Bond International College Plaintiff (Respondent)

And

Birchmount Howden Property Holdings Inc. Defendant (Appellant)

Counsel:

Richard Quance and Alisha Thakkar, for the appellant Robert B. Macdonald and Marko Petrovic, for the respondent

Heard: June 13, 2022

On appeal from the order of Justice Elizabeth M. Stewart of the Superior Court of Justice, dated August 30, 2021, with reasons reported at 2021 ONSC 5824.

Reasons for Decision

[1] There is one issue before us: did the motion judge err by concluding that the respondent had validly exercised the option to renew its lease with the appellant?

[2] The parties signed a ten-year lease in 2010 for property at 1500 Birchmount Road where the respondent operates two schools. The lease was to end in August 2020. The lease provided that the respondent may renew the lease “by delivering to the Landlord, in writing, notice of the Tenant’s intention of renewal at least six (6) months prior to the expiry of the original term”. The last date for exercising the renewal option was February 28, 2020.

[3] On February 11, 2020, the respondent emailed the appellant saying: “We will be extending the lease… It is our plan to respond before the end of February.”

[4] On February 28, 2020, the respondent wrote to the appellant by email attaching a letter of the same date. The letter states, in the first paragraph: “This is written confirmation of [the respondent’s] intent to extend the lease at 1500 Birchmount Road”.

[5] The appellant submits that this was not a clear and unequivocal notice as required by 120 Adelaide Leaseholds Inc. v. Oxford Properties Canada Ltd.. The submission is based on the rest of the February 28 letter which responds to rent and term proposals made by the appellant the previous year. The respondent indicated that it wanted the same terms and conditions of the original lease but would be prepared to extend for three years with rent fixed at $21 per square foot including utilities. The appellant submits that this demonstrates that the extension was conditional and not clear and unequivocal.

[6] We do not agree.

[7] First, the lease stipulated that to exercise the option to renew, the tenant was to provide notice of its intention to renew. The February 11 and 28 correspondences said clearly that the respondent intended to renew; the option was thus exercised. The second part of the February 28 letter responded to the appellant’s proposal and did not negate the clear exercise. Nothing in the balance of the letter suggested that the exercise was conditional upon the appellant accepting the respondent’s terms which were provided in response to the appellant’s proposal.

[8] Second, the lease provided for arbitration if the rent for the renewal term was not agreed to. The parties therefore anticipated ongoing negotiations.

[9] Third, this court owes deference to the motion judge’s conclusions: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 10, 36. She found that the fact that the respondent included a response to proposed amendments from the appellant did not detract from the clear statement of its intention to renew in the letter. She also considered the appellant’s arguments that subsequent negotiations between the parties undermined the notice and found that this was to be anticipated given the arbitration clause. In short, she rejected the arguments the appellant makes now.

[10] The appeal is dismissed with costs in the agreed upon amount of $6,750 inclusive of disbursements and HST.

“M.L. Benotto J.A.”

“B. Zarnett J.A.”

“L. Sossin J.A.”