Court File and Parties

Court of Appeal for Ontario Date: 20231220 Docket: COA-23-CV-0622

Roberts, Paciocco and Monahan JJ.A.

Between

Bellwoods Brewery Inc. Plaintiff (Respondent)

And

1896841 Ontario Limited Defendant (Appellant)

Counsel: Michael Citak and Dara Hirbod, for the appellant James Renihan and Lauren Rennie, for the respondent

Heard and released orally: December 15, 2023

On appeal from the judgment of Justice Robert Centa of the Superior Court of Justice, dated May 11, 2023.

Reasons for Decision

[1] The appellant landlord appeals the judgment granted in favour of the respondent tenant.

[2] On the basis of overwhelming evidence, the trial judge found that the appellant had breached the commercial lease of the Dupont premises by inexplicably and inexcusably refusing to vacate the leased premises and failing to leave it free of all inventory and debris as required under the plain and clear language of s. 6.1 of the parties’ lease agreement. And this notwithstanding that the respondent gave the appellant numerous opportunities to do so. The trial judge rejected, correctly in our view, the appellant’s principal argument that the respondent could have simply worked around the appellant’s presence in the premises to complete its plans for the renovation of the premises. As he was entitled to do, the trial judge accepted the respondent’s evidence that the leased premises were unique and granted specific performance of the lease. Finally, as was also open to him, the trial judge accepted the expert evidence of the business valuator called by the respondent and awarded the low end of the damages calculation to take into account various contingencies and risks, and awarded the time value of the damages incurred by the respondent as a result of the delay caused by the appellant’s breach of the lease.

[3] The appellant essentially repeats the arguments that the trial judge rejected and submits new arguments that were not put to the trial judge. The appellant effectively asks this court to retry the case. We see no error in the trial judge’s careful and thorough reasons. He properly adverted to and applied the governing legal principles, his assessment of the evidence was without error, and his findings are firmly grounded in the evidence before him.

[4] In particular, the trial judge’s interpretation of the relevant lease provisions reflects their plain language and produces a commercially reasonable result. The lease was not a standard form lease. The trial judge’s interpretation is therefore entitled to significant deference on appeal, absent error; there is none here. Similarly, his determination that specific performance should be granted was based on his correct application of the relevant legal principles and his factual findings that were open to him to make on the evidence before him. His assessment of damages is also without any error.

[5] With respect to damages, the appellant argues, in particular, that the damages assessment was flawed because the expert should have calculated the damages based on appropriate discounts for uncertainties in obtaining liquor and other licences. The appellant submits that the trial judge erred in failing to take those unquantified contingencies into account. The appellant also argues that the trial judge erred in overcompensating the respondent by awarding damages for a third bottle shop when the respondent had already received those funds by its ongoing operation of its Hafis location.

[6] We do not accept these submissions. The appellant called no expert evidence on damages nor did it challenge the expert’s methodology at trial but accepted in principle that it was sound. Nor has the appellant persuaded us that there is any error in the expert’s methodology or calculation that did discount the damages for risks and contingencies. Moreover, the trial judge specifically addressed and took into account the contingencies raised by the appellant. This, and other contingencies, led the trial judge to accept the low end of the expert’s damages calculation.

[7] It was open to the trial judge to accept the expert’s evidence and to award the respondent damages for the loss of the time value of the profits that the respondent plainly incurred as a result of the appellant’s breach. We are not persuaded that the trial judge overcompensated the respondent. His award took into account the contingency that the respondent had to close the bottle shop at Hafis, but his award also acknowledged that the damages would not be reduced by the loss of the Hafis bottle shop, given the likelihood that the respondent could sell the bottles they would have sold at the Hafis bottle shop through LCBO stores, through exporters to the United States and through licensees. These conclusions were firmly rooted in the record.

[8] There is no basis to intervene. Accordingly, the appeal is dismissed.

[9] As agreed by the parties, the respondent as the successful party is entitled to costs from the appellant in the amount of $34,500, inclusive of all amounts.

“L.B. Roberts J.A.”

“David M. Paciocco J.A.”

“P.J. Monahan J.A.”