The Landlord, Varsity Investments Inc., sued the Tenant, 1666862 Ontario Inc., and its guarantors for breach of a commercial lease, claiming accelerated rent and damages after the Tenant ceased operations.
The Landlord alleged the Tenant was in default due to insolvency, abandonment, and repudiation.
The Tenant counterclaimed for wrongful termination of the lease, arguing the Landlord's distress was illegal.
The court found that the Tenant was not in breach of the lease, did not repudiate it, and that the Landlord's actions of changing locks and purporting to distrain for non-existent arrears constituted an illegal distress, thereby terminating the lease.
The Landlord's action was dismissed, and the Tenant's counterclaim for damages was allowed.