COURT FILE AND PARTIES

COURT FILE NO.: C-978-13

DATE: 2014-01-07

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2249778 Ontario Inc., Applicant

AND:

Glenn Smith, carrying on business as ‘FRATBURGER’ Respondent

BEFORE: James W. Sloan

COUNSEL:
Tiffany Soucy - Counsel, for the Applicant

Andrew McCoomb - Counsel, for the Respondent

HEARD: December 18, 2013

ENDORSEMENT

[1] This application involves a commercial lease in which the Applicant is the landlord and the Respondent is the tenant.

[2] In Article 1.1(g)(v) of the lease under the heading use, it states: "A fast food restaurant primarily selling hamburgers, hot dogs, chicken sandwiches, french fries, poutine and individual servings of soft drinks, coffee and tea and as ancillary thereto the Tenant may use a minor portion of the premises for offices as reasonably required for the Tenant's business on the Premises and for no other purpose. The Tenant shall be permitted, at its sole expense to apply for and obtain a license to serve alcoholic beverages with this use.”

[3] In Article 10.1 under the heading permitted use it states: "the tenant hereby covenants to use the premises only for the purpose set out in section of the lease and for no other purpose…"

[4] Almost immediately after moving into the premises, the tenant had an ATM installed and the landlord did not take issue with installation until approximately one year later.

[5] The landlord objects to the ATM and submits that it is not a permitted use. The landlord submits that the tenant is offering banking services on the premises because non customers of the tenant could also access the ATM

[6] The tenant argues that students often do not carry cash and accepting payment by way of debit card transactions costs him too much money. He submits therefore that the ATM is a tool to facilitate his business because it is convenient for his customers and lowers his cost to do business.

[7] He further argues that it is important that he be able to keep costs down because students are price conscious.

[8] Furthermore the tenant submits that if he installed a pay phone it would not turn his store into a communication centre even though on some occasions non-customers of his might use the payphone.

[9] The tenant further submits, that the lease, implicitly requires him to use an ATM machine in his operation, because Clause 10.8(a) of the lease provides: “the tenant shall…(a) operate its business with due diligence and efficiency and maintain an adequate staff to properly serve all customers; own, install and keep in good order and condition free from liens or rights of third parties, fixtures and equipment of first-class quality; and carry at all times such stock of goods and merchandise of such size, character and quality as will produce the maximum volume of sales from the premises consistent with good business practices.” [Emphasis added]

[10] Can it be said that the use of the ATM is a purpose for which the tenant is using his space?

[11] On the evidence before me, I find that the tenant’s use of the ATM is for appropriate business reasons, to assist him in keeping his costs low and his clients happy. I find it ludicrous to suggest that the installation of the ATM by the tenant means he is offering banking services. There was no suggestion before me that the ATM installed by the tenant accepts deposits, which a bank ATM would allow. Also, banks are strictly regulated by the Bank Act SC 1991, c. 46 and there was no suggestion before me that the tenant was regulated by the Bank Act or that he was breaching any section of the Bank Act or its regulations.

[12] On the evidence before me, the installation of the ATM does not in any way change the purpose of the premises, which is a fast food restaurant. The primary focus of the establishment and the attendance of its patrons, is for the consumption of food.

[13] I therefore dismiss the Application with costs.

[14] If the parties are unable to agree on costs, Mr. McCoomb shall forward his brief submissions on costs to me by January 14, 2014. Ms. Soucy shall forward her brief response to me by January 21, 2014. Mr. McCoomb shall then forward his reply, if any, to me by January 28, 2014. Cost submissions may be sent to my attention by email, care of Kitchener.Superior.Court@ontario.ca.

J. W. Sloan J.

Date: January 7, 2014