COURT FILE NO.: 41/2003
DATE: 20030403
SUPERIOR COURT OF JUSTICE - ONTARIO
(DIVISIONAL COURT)
RE: PENYORK PROPERTIES INC.
- and - WRAPS INC., 1319921 ONTARIO LTD. c.o.b. as MEGA PITA WRAPS and HUSSEIN AZRAK a.k.a. JOE AZRAK
BEFORE: LANE, BROCKENSHIRE AND CAMERON JJ.
HEARD: April 3, 2003
COUNSEL: James P. McReynolds, for the Plaintiff (Appellant) Fernando Souza, for the Defendants (Respondents)
E N D O R S E M E N T
[1] This is an appeal, with leave, from the decision of Dunn J., declining to grant a summary judgment. The appellant asks that the order be set aside, and that this court grant the order previously sought - summary judgment on its statement of claim, and dismissal of the respondent's counterclaim.
[2] The claim is based on a detailed commercial lease, against a tenant and sub-tenant, who were in arrears of rent and who abandoned the premises. The defences pleaded relate to alleged representations made by the landlord before the lease was executed, and an alleged breach by the landlord of a protective non-competition clause in the lease. Additionally, the quantum of damages claimed, and mitigation are put in issue. The counterclaim is based on the representations and breach pleaded in the defence.
[3] It is admitted that the issue of damages will be complex, and require evidence which may well be disputed. However, appellant's counsel now relies on Rule 20.05(1), authorizing the granting of summary judgment on part of a claim, if the court is not satisfied on the damages issue. We are not - that will involve calculating the present value of an income stream from several categories of rent for years into the future, and setting off against that the likely income stream from a new tenant. The parties both proposed bringing in further evidence on damages, which motions we held in abeyance, pending determination of whether we would hear anything relating to the damages claimed.
[4] On the issue of liability, we are persuaded that clause 18.07 of the lease, a broad "entire agreement" provision, prevents the respondent from relying on any alleged prior representations or agreements, and that clause 18.17, the clause limiting the landlord from renting to competitors, is on its clear terms, only effective if the tenant has not been in default. Here, the tenant and sub-tenant had been in default of paying rent since before the landlord leased to the other tenant, of whose operations they complain. This clearly negates the defences raised re liability, and also the premise for the counterclaim.
[5] The order below is set aside, and summary judgment is granted, dismissing the counterclaim and finding the defendants liable to the plaintiff for breach of the covenants of the lease, with the damages arising therefrom to be assessed. Counsel may make written submissions within 30 days as to costs.
LANE J.
BROCKENSHIRE J.
CAMERON J.
Date: April 3, 2003
Date of Release: April 11, 2003