l’ouvrier Inc. v. Leung, 2016 ONSC 6993

CITATION: l’ouvrier Inc. v. Leung, 2016 ONSC 6993

COURT FILE NO.: CV-16-543920

DATE: 20161207

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

L’OUVRIER INC. Plaintiff

– and –

YEN PING LEUNG AND MICHAEL CHENG Defendants

AND B E T W E E N:

YEN PING LEUNG AND MICHAEL CHENG Plaintiffs by Counterclaim

• and –

L’OUVRIER INC. AND JUSTINE FOWLER AND ANGUS BENNETT Defendants by Counterclaim

David Barbaree, for l’ouvrier Inc., plaintiff

Yen Ping Leung and Michael Chen appeared in person

Yen Ping Leung and Michael Cheng appeared in person for the Counterclaim

David Barbaree, for the Defendants by Counterclaim, l’ouvrier Inc., Justine Fowler and Angus Bennett

HEARD: September 21, 2016

LEDERER J.:

INTRODUCTION

[1] This is a motion for summary judgment. It arises from the failed efforts of the parties involved to either end their relationship or renew a lease.

[2] Canada is a diverse community made up of people from many different cultures and origins. Our institutions attempt to accommodate these differences and to give those who are unfamiliar with their purposes and processes an opportunity to understand. This includes the courts. However, there is a limit to how long these efforts can go on. Eventually, the courts, like all our institutions, have to recognize that there are others involved who have rights and expectations. All parties, regardless of their background, have a responsibility to do what they can to understand the rules and procedures and where they can afford it, to make use of whatever assistance is available. In this case, the defendant, Yen Ping Leung, acknowledged that she is “not a native English speaker and routinely require(s) the assistance of agents and representatives to assist in drafting documents and negotiating terms.” She has, at times, sought and relied on the assistance of others: her son (Kevin Cheng)), real estate agents and lawyers.[^1] At other times, particularly at the hearing of this motion, she did not. I shall return to this concern later in these reasons.

BACKGROUND

[3] In March of 2011, the parties, the plaintiff, l’ouvrier Inc., and the defendants, Yen Ping Lueng, and her husband, Michael Cheng, entered into an “Agreement to Lease”. L’ouvrier leased one of three units (the ground floor unit) of a building owned by Yen Ping Lueng and managed by her, with the assistance of Michael Cheng, for the purpose of operating a restaurant. The term of the lease was to be for five years. The Agreement to Lease, which appears to have been the document that governed the relationship between the parties[^2], includes a term providing the tenant with an option to renew:

OPTION TO RENEW

Upon at least SIX (6) MONTHS and not more than NINE (9) MONTHS prior written notice to the Landlord prior to the expiry of the initial term of Lease, and provided the Tenant is not and has never been in default under the terms of the Lease, the Tenant shall have TWO (2) further Option To Renew the Lease (‘Renewal Term’) for a further term of FIVE (5) YEARS on the same terms and conditions as the Lease save and except:

i.) for Net Rent payable by the Tenant during the Renewal Term; and

ii.) that the Tenant shall accept the Premises on an ‘as is’ basis in its then existing condition and the Landlord shall not be required to do any work, pay any allowances or grant any Rent Free period; and

iii.) that there shall be no further right of renewal.

After the Tenant exercises their Option to Renew, if the Landlord and Tenant cannot mutually agree upon the Annual Net Rental within THIRTY (30) DAYS prior to the expiry date of the initial term, such rent to be based on Net rentals for similar premises within a reasonable radius of the Premises, then the annual Net rental shall be determined pursuant to the terms of the Arbitration Act of Ontario or any successor legislation, and provided further that it is mutually agreed the renewal rate of the Renewal Term shall be no less than the Annual Net rental in the last year of the previous term. The Landlord and Tenant agree that the cost of the arbitration shall be borne equally by the Landlord and Tenant unless otherwise ordered by the arbitrator or arbitrators.

[4] Justine Fowler is an officer and the secretary of the plaintiff. On March 13, 2015, utilizing “SMS messaging”[^3], she notified Kevin Cheng that l’ouvrier was exercising its option to renew and requested a meeting to discuss the second term. The exchange between Kevin Cheng and Justine Fowler was as follows:

Justine:

Hope all is well Kevin. Let me know when you have time to sit down and start the conversation regarding our lease renewal.

Kevin:

Hello Justine, I would suggest trying to resolve the previous issues as they will be huge sticking points.

Justine:

Well that’s what I mean. Let’s sit down and start talking it all out.[^4]

The “previous issues” to which Kevin Cheng referred were with respect to “Additional Rent”.

[5] The Agreement to Lease noted that the defendants, as the landlord, were not to be responsible for any cost associated with the plaintiff’s occupancy:

It is agreed that the Tenant further acknowledges and agrees that it is intended that the Lease and the rentals payable thereunder are completely Net and Carefree to the Landlord, that the Landlord is not responsible during the Term or any renewal thereof of any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the use and occupancy of the Premises or the contents thereof or the business carried on therein...

[6] To ensure this result, the Agreement provided for the payment, by the plaintiff, of “Additional Rent”:

…the Tenant shall pay as Additional Rent all charges, impositions, costs and expenses related to the Premises and the use and occupancy thereof.

and the means by which the payment would be made:

…the Tenant shall pay as additional rent, in monthly instalments, in advance on the basis of reasonable best estimates by the landlord (and subject to necessary adjustments), either its proportionate share, or the direct costs of each item as the case may be...

[7] The Agreement to Lease indicated that, for the calendar year 2011, the Additional Rent for the Premises was estimated at $1,500 per month. It allowed that the plaintiff would have the right to review or audit the landlord’s records, presumably in furtherance of confirming the amount of any Additional Rent. For clarity, the Agreement to Lease defined “Proportionate Share” as:

…a fraction having as its numerator the area of the Premises and as its denominator, the area of all (office and/or retail) leasable premises in the Building, including the Premises.[^5]

[8] For the first two years of the lease, the plaintiff paid the $1,500 per month in Additional Rent (a total of $33,000) in accordance with the agreement that had been made. Nothing more was requested. On February 10, 2013, the defendants demanded a further $9,850.09 for Additional Rent. As the plaintiff understood it, the request did not comply with the terms of the lease in that it did not reflect the “Proportionate Share” attributable to the space it occupied. The demand was based on assigning to the plaintiff 60% of water usage, 100% of property tax, and 50% of insurance.[^6] As Justine Fowler and those working with her saw it, the defendants had failed to account for the use being made of the other units in the building. They undertook their own calculations. The result suggested that the plaintiff had, in fact, overpaid its proportionate share of the Additional Rent.[^7] The response of the defendants was to re-adjust the percentages and demand even more money as Additional Rent.[^8] Correspondence between the parties, on this topic, stopped during March 2013. There was an e-mail exchange between Justine Fowler and Kevin Cheng through February, March and April 2013 directed to the possibility of a meeting to address the issue. This never happened. In her affidavit, Justine Fowler deposed that the defendants refused to discuss the issue until the money had been paid. The plaintiff continued to pay and the defendants continued to accept rent payments and Additional Rent (the $1,500 per month as estimated in the lease). The issue was not resolved and remained at the time of the SMS exchange by which it is said on behalf of the plaintiff, that notice of the intention to renew was delivered.

[9] Beginning during March 2015, the plaintiffs attempted to engage the defendants in discussions concerning the renewal. The defendants advised that they were too busy. Over time, they indicated that their sole concern was the Additional Rent they believed to be owing. They did not want to negotiate until it had been paid.[^9] The defendants acknowledge that there were requests for meetings made on behalf of the plaintiff and confirm they were unwilling to grant a renewal while there was significant Additional Rent that remained unpaid.[^10] The defendants say that the renewal was never mentioned and speculate that those representing the plaintiff understood that they had to settle their outstanding arrears before “even consider[ing] exercising their option to renew”.[^11] Given the position that the plaintiffs had taken to the effect that they had over paid Additional Rent and the SMS exchanges between Justine Fowler and Kevin Chen surrounding the question of renewal,[^12] I am unprepared to accept what is said by the defendants in respect of the request for meetings during the fall of 2015. In this regard, I prefer and accept the evidence of Justine Fowler. Renewal was clearly on the table.

[10] I add to my reasons for preferring the evidence of Justine Fowler the following. In her affidavit of April 19, 2016, Yen Ping Leung deposed that, “around the end of September 2015” she advised Justine Fowler that to discuss “any formal matters”, a qualified agent or lawyer was “strictly required”.[^13] Justine Fowler, in her affidavit sworn on March 22, 2016, deposed that the plaintiff, “at Leung’s request”, retained a real estate agent. She says that, on September 8, 2015, the agent sent an Amended Agreement to Lease to the defendants. It set out the proposed rent for the second term. (I am unable to explain the inconsistency in the dates; that is, whether this occurred at the end of September or sometime earlier. Nothing turns on it. One of either Yen Ping Leung or Justine Fowler is mistaken.) The defendants did not respond. On September 25, 2015, Justine Fowler sent the following text to Kevin Cheng:

Kevin, I’m at my wits end with this situation. You told us to hire an agent and we did and now no one will get back to him either. It shouldn’t be this complicated. It’s unreasonable and we are within our rights to withhold rent if we can’t get a hold of you. Please advise.[^14]

[11] The agent re-sent the Amended Agreement to Lease on September 28, 2015 and October 1, 2015. The defendants did not respond or provide a counter-offer. Justine Fowler deposed that she approached Yen Ping Leung in early October and was directed that the plaintiff should contact the lawyer of the defendant to discuss the second term. As a result, the plaintiff retained counsel and, on October 6, 2015, counsel for the plaintiff delivered the Amended Agreement to Lease to the lawyer who had acted for the defendants, in 2013, in respect of the disagreement concerning Additional Rent. It transpired that he was no longer acting for the defendants. Having been informed of this, on October 7, 2015 Justine Fowler provided the lawyer’s letter and another copy of the Amended Agreement to Lease to the defendants.[^15] No response was received.

[12] On October 22, 2015, the defendants delivered to the plaintiff a document entitled, “Notice of Default.” It was, in effect, a demand for Additional Rent, at that time valued by the plaintiffs at $46,513.11, as well as a demand for repairs for certain listed damage to the leased premises.[^16] By letter, dated November 11, 2015, the defendants repeated these demands.[^17] This was followed by a letter, dated November 23, 2015, which notified the plaintiff that the lease would not be renewed due to the failure of the plaintiff to pay the Additional Rent.[^18]

[13] In the meantime, the owners of the plaintiff determined that they should sell their business. The intention was to sell (i) the leasehold improvements; (ii) rights under the Agreement to Lease; (iii) the chattels; and, (iv) l’ouvrier’s licences (including its liquor licence). The sale was not to include the l’ouvrier name, goodwill and other intangible assets. On November 12, 2015, the defendants were advised that the business was to be sold. In furtherance of advancing a sale, an offer to pay $12,443.45 on account of Additional Rent, calculated on what the owners of the business felt was a generous allocation of responsibility, was made. It was joined by a promise to pay an additional $10,000 once a new lease was negotiated. No response to this offer was received. Rather, it was followed by the letter of November 23, 2016 declaring there would be no renewal and that the “current Agreement to Lease would expire at midnight on February 29, 2016...”.[^19]

[14] On December 23, 2015, the owners of the business accepted a conditional Agreement of Purchase and Sale. The price was $140,000. Among the conditions was the requirement that there be an agreement to a renewal and a new lease at rent that was “...within market comparable rents to a reasonable degree.” The purchaser paid a deposit of $20,000. The Agreement of Purchase and Sale was conditional until January 18, 2016 before which the purchaser could walk away if it chose to.[^20] On the day the Agreement was executed (December 23, 2015), the defendants were notified of the prospective sale. They were advised that the sale could not proceed without a renewal of the lease. They were advised that if an agreement was not entered into before December 30, 2015, “their conduct would frustrate the plaintiff’s sale of its business”.[^21]

[15] On December 31, 2015, the defendant, Michael Cheng, wrote asking that the Additional Rent ($46,513.11) be paid and announcing that “our new Basic Rent will start around the comparable rents of the neighbourhood. At the moment, it comes to around $6,000”.[^22] The owners of the business were “taken aback”. This was nearly double the previous rent ($3,300). The comparison being relied on was inappropriate. The property being used as a comparable “had been listed since November 2014” (and, presumably, not rented) and the gross figure included all items of additional rent where the proposal of the defendants did not.[^23]

[16] The owners of the business wrote to the defendants complaining that the requested rent was outside market rates. The defendants complained they had not been given enough time to properly negotiate. The sale was at risk. The owners of the business, believing that the defendants were blocking the sale to compel payment by l’ouvrier of money they knew or should have known l’ouvrier did not owe and concerned that, as the Notice of Default had outlined, the lease would not be renewed, commenced this action by Statement of Claim issued on January 6, 2016. The relief claimed includes specific performance and an injunction to prevent the defendants from interfering with l’ouvrier’s rights under the Agreement to Lease, and any loss it has, or will suffer, as a result of the Defendant’s breach of contract”.[^24]

[17] Rather than serve the Statement of Claim, counsel for the plaintiff delivered it by mail to the defendants in company with a letter. The letter was conciliatory in nature. It sought further negotiations, it pointed out that, should the defendants intend to follow through on a threat to sue for the Additional Rent they believed to be owing, they would remain free to do so even if the Agreement to Lease was renewed and the business sold. In the letter, any counsel retained by the defendants was asked to call the lawyer acting for the plaintiff. The defendants did retain counsel. He responded. He raised, for the first time, the concern that notice exercising the option to renew had never been provided in accordance with the terms of the Agreement to Lease. (The implication of this assertion is that notice by SMS message was not notice “in writing”.) The defendants were prepared to meet but only after the plaintiff had delivered $25,000 to be held, in trust, by counsel for the defendants, until final determination of the issues was reached.[^25]

[18] The money was not paid. Negotiations did take place but without lawyers. A real estate agent retained by the defendants contacted one of the owners of the business. An extension was obtained from the purchasers of the business. The owners and a real estate agent involved on behalf of the plaintiff met with the defendant’s real estate agent. The purpose was to negotiate a renewal and to resolve the demand for Additional Rent. The discussions did not succeed. From the perspective of the plaintiff, this was because the defendants were demanding rent that was “well above market”. The rent sought was sufficiently high that the sale would not have been completed and would have rendered the existing business unprofitable and unsellable. Negotiations continued but without success. Throughout this period, the defendants continued to maintain the position that the plaintiff would have to vacate the premises on February 29, 2016.[^26]

[19] I now refer back to the comments made at the outset of these reasons. To this point, it would seem that the defendants made use of those who could assist them. In particular, they retained the help of counsel and a real estate agent.

THE MOTIONS

[20] In response to the inability of the parties to resolve the difficulties between them and with the demand to vacate looming, the plaintiff brought a motion for an injunction. It came before this court on February 19, 2016. This was the first of four appearances. The plaintiff was represented by counsel. The defendants were not. They had ended the retainer of the counsel who had raised the question of whether notice of the exercise of the option to renew had been properly given. They did this the night before the first appearance in court. The defendants asked that the motion be adjourned in order to allow them to retain counsel who spoke Cantonese. The plaintiff indicated a desire to have the court do more than impose an injunction halting its anticipated eviction on February 29, 2016. It wanted the court to resolve the issues between the parties. This would require a motion for summary judgment. The adjournment was granted on the understanding that the current lease would be extended until the next appearance in court and that the plaintiff would prepare and serve the motion necessary to deal with the issues between the parties. The proceeding was adjourned to April 29, 2016. The lease was to remain in force until April 30, 2016.[^27]

[21] On April 29, 2016, the parties returned to court. On this occasion, they were both represented. The order sought by the plaintiff was for “partial summary judgment” in the form of a declaration that the defendants were in breach of the Agreement to Lease, for specific performance (including that the parties, pursuant to s. 8 of the Agreement to Lease, attend at an arbitration to determine the “annual Net rental” for the term of the renewal), an order extending the lease until the terms of the renewal had been finalized or an injunction enjoining the defendants from interfering with the plaintiff’s rights under the Agreement to Lease.[^28]

[22] At the outset, I pointed out to the parties the risk they each ran in continuing down the road they were on. The plaintiff risked the loss of it business; the defendants, the possibility of a lawsuit for damages arising from the failure of the prospective sale of the business. The parties withdrew and upon their return advised the court the matter had been settled. The motions were adjourned sine die. The settlement required the parties:

• to sign a lease in accordance with terms that were attached to the endorsement made on that day in the form of an Agreement to Lease. (The Agreement to Lease included as a further term the requirement that the plaintiff pay $12,000, “by tomorrow to settle all T.M.I./ additional rent arrears by certified cheque.”); and,
• to attend an arbitration, by May 30, 2016, to determine the rent for the Agreement to Lease that had been attached and to determine whether either party was entitled to “partial indemnity costs” incurred with respect to the motion before the court.

[23] As part of the settlement, the plaintiff undertook to make its best efforts to sell the business and the defendants agreed not to unreasonably withhold their consent to such a sale. The claim and the counterclaim which the defendants had included with their statement of defence were to be dismissed. The endorsement signed by me on that day and read to the parties does not reveal any other terms to the settlement.

[24] This seemed to be the end of the matter. It was not. The settlement failed.

[25] The plaintiff paid the $12,000 the day the settlement was made (April 29, 2016). This was confirmed by a letter signed by the defendant, Michael Cheng.[^29] However, there were difficulties in arranging the arbitration. The same day that the settlement was made and the $12,000 paid, two arbitrators were proposed by the plaintiffs. A week later (on May 6, 2016), the defendants agreed to one of the two. Despite the requirement that the arbitration be completed no later than May 30, 2016, it was agreed to hold the arbitration on June 8, 2016 “to accommodate the schedule of counsel, the arbitrator and the defendants” who, “evidently” were to be away for the last week of May.[^30] On May 27, 2016, counsel for the defendants requested that the arbitration be adjourned to allow them more time to retain an appraiser. The plaintiffs would not agree. It was explained that the circumstances and the delay were causing significant prejudice to the business and the desire of its owners to sell. The plaintiff understood that the defendants had already obtained the opinion and identified the witness. The arbitrator adjourned the arbitration to June 23, 2016 but made it peremptory to the defendants.[^31]

[26] On June 16, 2016, counsel for the defendants indicated that an issue had arisen and asked for a conference call with counsel for the plaintiff and the arbitrator. On June 20, 2016, the call took place. Counsel for the defendant indicated he had been dismissed and would no longer be acting. This was confirmed by e-mail the same day.[^32] It should go without saying this all occurred within one week of the scheduled arbitration.

[27] I note that, during the morning of June 20, 2016, before the e-mail from counsel confirming that he would no longer be acting, (I do not know if it was before or after the conference call) the son of the defendants telephoned the arbitrator. This is an indication of the problem associated with the failure of the defendants to make use of those with knowledge and experience necessary to help them. The arbitrator wisely and correctly understood the call to be improper. He ended the call and reported, by e-mail, to both counsel.[^33]

[28] On the same day (June 20, 2016), after counsel had been dismissed, the defendants delivered a letter to the plaintiff. It proclaimed the plaintiff to be in breach of the settlement agreement. It pointed to payments the defendants alleged were owing and unpaid to a total of $30,949.20. The demanded payment consisted of:

1. $27,000 (consisting of the $12,000 settlement amount + $15,000)
2. $15,000 (referred to as a “Typical Security Deposit)
3. $6,463.60
4. $6,463.60

These amounts total $54,927.20.

[29] The defendants subtracted $23,978.00. This is made up of $5,989 + $5,989 + $12,000. Presumably, the $12,000 reflects the money paid pursuant to the settlement. I am unable to identify what the two payments of $5,989.00 represent. They seem to be a monthly payment representing rent, some additional amounts on account of Additional Rent, including water and HST. Justine Fowler deposes that, for each of the four months, May, June, July and August 2016, l’ouvrier paid $3,300 on account of rent and $2,000 for T.M.I. (taxes, maintenance and insurance), plus the HST associated with those payments. She referred to this as what was required under the April 29, lease[^34]. I assume this points to the Agreement to Lease that was part of the settlement of April 29, 2016. No specific payment was made on account of water. Water is referred to in the Agreement to Lease only to the extent that it is noted in conjunction with the number “50%”. In a letter, dated June 28, 2016, counsel for the plaintiff acknowledged that his client was “responsible for 50% of water usage”. Counsel went on to say that the plaintiff would pay once it had been provided with a bill for May and June and to observe that it was “absurd” for the defendants to estimate the plaintiff’s share of water expenses before they had received a bill.[^35]

[30] With the $23,978.00 subtracted from the $54,927.20, the letter sought the payment of $30,949.20. Viewed from this perspective, it becomes apparent that the calculation on which the defendants rely does not support the proposition that the plaintiff was in breach of the settlement by failing to pay what was owed. The proposition that the plaintiff owed $30,949.20 is without any support.

[31] There is no explanation for the $15,000 added to the $12,000. At the outset of the hearing of this motion, the issue of this additional $15,000 was raised by the court with the parties. The court was directed to the Agreement to Lease attached as a Schedule to the endorsement outlining the settlement (the endorsement of April 26, 2016). Towards the bottom of the page is a plus sign (“+”). It follows the reference to “T.M.I.” found in the settlement:

T.M.I. paid @2,000 /mt. to be balanced at the end of each year

[32] As I read it, what follows the plus sign (“+”) is to be added to the consideration of T.M.I. What follows is a number. It is difficult to read. It is either $5,000 or $15,000. I understand it to be $15,000. It has been scratched out (though not as definitively as it could have been). Immediately above it is an arrow pointing to a clearly written number: $12,000. To my sight, this figure was written by a different person, with a different pen. As I see it, the $12,000 figure was intended to and does replace the original figure ($15,000). The $15,000 number does not and was not intended to reflect an addition to the settlement. Rather, it was replaced by the $12,000. The number is followed by the phrase:

…paid by tomorrow to settle all T.M.I./ additional rent arrears by certified cheque.

[33] As has already been recorded in these reasons, that money was paid as required the day the settlement was entered into (see: para. [25], above).

[34] I turn to the second $15,000 referred to. It would be surprising if any “Typical Security Deposit” would be required in the absence of the rent amount having been determined. There is no reference to the security deposit in the Agreement to Lease or the endorsement made on April 29, 2016. In his letter of June 28, 2016, counsel for the plaintiff noted that the request for $15,000 as a security deposit fails to account for the $5,000 deposit made at the time of the original Agreement to Lease and that, while following the arbitration it may be appropriate to increase the security deposit, such a figure would be a function of the monthly rent that would, only then, have been determined. To demand payment and arbitrarily pick a $15,000 figure was premature and unreasonable.[^36]

[35] These two claims (the addition to the settlement beyond $12,000 and the request for a security deposit) each for $15,000 cannot be justified as demonstrating breaches of the settlement. It follows from this analysis that I do not accept the bald allegation in the Supplemental Affidavit of Yen Ping Leung, sworn on September 21, 2016, that l’ouvrier “refused to acknowledge their obligations to pay rent, water utilities, and unreasonably withheld rent and all water utilities payments without any explanation”[^37] (emphasis in original). Nor do I accept that it is of any use to recite the panoply of complaints about “unreasonable positions” the defendants say were taken on behalf of the plaintiff during the course of whatever negotiations took place.[^38]

[36] The letter of June 20, 2016 enclosed an Agreement to Lease. As described by Justine Fowler, it sought to change the terms of the settlement including:

(a) it changed the term of the April 29, 2016 Agreement to Lease that formed part of the settlement to five years, without an option to renew;

(b) it ignored the $5,000 deposit the Defendants were given in 2011 when l’ouvrier first agreed to lease the Premises;

(c) it required a $3,000 payment for each “request” by the plaintiff to assign the lease;

(d) demanded that l’ouvrier perform renovations and repairs at its own expense; and

(e) it, “possibly”, changed the terms agreed to on April 29, 2016 regarding the Additional Rent expenses.[^39]

[37] On the following day, a Notice of Change of Solicitor was served. This was two days before the arbitration was scheduled to begin. The defendants’ new counsel “unilaterally advised” that the arbitration would not be proceeding. After being told the arbitration was peremptory to the defendants, he advised it was his understanding that the plaintiff was in breach of the settlement and that his client “may very well” not participate in the arbitration.[^40]

[38] The arbitration did not proceed on June 23, 2016. It was adjourned over the objections of counsel for the plaintiff. The counsel then acting for the defendants sought an adjournment to obtain the file from previous counsel. On that day, the arbitrator issued a Procedural Order that outlined the terms of the adjournment.[^41] On June 27, 2016, in compliance with that Procedural Order, counsel for the defendants wrote a letter outlining their position. It reiterated that, in the defendant’s view, the plaintiffs were in breach of the settlement because no lease had been executed and because the $15,000 claimed to be part of the settlement, in addition to the $12,000, had not been paid. The letter went on:

It is our client’s position that the above breaches amount to a repudiation of the settlement, which has the effect of relieving our client of her obligations under the settlement and the purported lease. As such, since the previous lease was not renewed, there is presently no valid lease agreement between the parties.

In light of the above, an arbitration to determine market rent of the Premises at this stage is, at best, premature. In the circumstances, we will be requesting a return our client’s deposit from [sic] the arbitrator.[^42]

[39] In effect, the defendants were withdrawing from the settlement. The letter ended with the following threat:

Notwithstanding the above, and on a without prejudice basis, our client remains willing to negotiate a new lease with your client. If the new lease is not agreed upon by July 8, 2016, then our client intends to take steps to remove your client from the premises.^43

[40] In a second procedural order, this one dated June 28, 2016, the arbitrator set July 28, 2016 as the date for the arbitration.[^44]

[41] Before the arbitration, on July 14, 2016, the plaintiff provided the defendants with a long form lease in response to their demand that such a lease be executed before attending the arbitration. The defendants did not provide any comments with respect to this lease. Rather, on July 19, 2016, the defendants provided a 71-page long form lease. It bore no relation to the lease that had been provided by the plaintiff on July 14, 2016. Later, on the same day, the defendants provided a second long form commercial lease. This one was 42-pages long.

[42] The plaintiff responded with a re-draft on July 25, 2016. The defendants refer to this as “a poorly non-standard lease [sic] where the clauses heavily favoured the Tenant and/or were erroneous.”[^45] They did not respond to it.[^46] It is not for me to analyze the substance of the proposed lease to determine the quality of the drafting or the merits of what it proposed. What is clear is that the settlement broke down. The complaints of the defendants as to non-payment of amounts owed are not sustained. To the contrary, the defendants attempted to impose terms that were not part of the settlement rather than deal with them through discussion or negotiation.[^47] The problem was captured in the understanding that a “brand-new lease” was to be executed.[^48] The plaintiff had a right to renew “on the same terms and conditions as the [existing] lease…” with only three exceptions: (1) rent which was to be agreed to or determined through arbitration; (2) the premises to be accepted by the tenant “as is” with no obligation on the landlord to do any work or provide any rent free period; and, (3) no further right of renewal.[^49]

[43] The defendants express concern with the process. In her Supplemental Affidavit, sworn on September 21, 2016, Yen Ping Leung begins by repeating that she is not “a native English speaker and routinely requires the assistance of agents and other representatives to assist in drafting documents and negotiating terms.”[^50] In this case, she has had the assistance of and has relied on others:

I have also relied heavily on my son, Kevin Cheng (“Kevin”) and real estate agent Andrew Wang (“Wang”), when interacting with L’Ouvrier [sic], Justine Fowler (“Fowler”) and Angus Bennett (“Bennett”) [sic] (Fowler and Bennett are hereinafter collectively referred to as the “Owners”) as well as interpreting correspondences from our lawyer and their real estate agent, Stephen Murphy (“Murphy”). Any negotiations or discussions involving Kevin, Wang or Chang and the Owners were at all times for my sole benefit.[^51]

[44] The defendants complain that the settlement process was done “in a span of minutes” without any Chinese-speaking assistance. Terms of the settlement were included on a form. It is entitled, “Amendment to Agreement to Lease”. The words, “Amendment to…”, have been crossed out. Hence, the references to it as an “Agreement to Lease.” The name Leung Yen Ping appears under the “Confirmation of Acceptance…”. She agreed to what it says. The form was not, as she suggests in her Supplemental Affidavit, “…erroneously used…as the settlement agreement”. It is plain that a new lease was to be prepared and signed. It is equally clear that the terms of the Agreement to Lease were to be included in whatever final document was prepared and that it would reflect the “same terms and conditions” as its predecessor. There is no suggestion in the record that the plaintiff or those acting on its behalf “flipflopped between positions…never firmly clarifying whether they believed [the settlement document] was an Agreement to Lease, renewal of a previous lease, a bonefide [sic] new lease or a form to execute a new lease from”.[^52]

[45] The parties returned to court on July 26, 2016. On this occasion, the defendants were represented by their new counsel. The endorsement made on that day notes that the settlement had broken down. It observes that the arbitration was set to proceed on July 28, 2016. It directs the parties to attend the arbitration where the issue of rent was to be determined and, thereafter, to make further efforts to resolve any outstanding issue respecting the lease. To my mind, given that the lease provides that any renewal was to be on the same terms as the pre-existing lease, this should have been simple and without controversy. Nonetheless, the endorsement went on to say that, in the event they failed, a motion to enforce the settlement or for summary judgment would be heard on September 21, 2016. This is that motion. As I said at the outset of these reasons, it is for summary judgment.

[46] I pause to say that, again, on July 26, 2016, I pointed out that this was a case where the parties would be far better to settle their differences than continue on to resolve this through an order of the court. This concern was repeated on the hearing of this motion for summary judgment. The plaintiff risked losing its business. With a settlement, the defendants knew that the plaintiff intended to sell the business and withdraw. They would not have to deal with the plaintiff any more. Without a settlement, the defendants ran the risk of being sued for damages associated with the loss of the business particularly if, after the failure of the renewal, the prospective sale of the business did not proceed.

[47] The arbitration took place on July 28, 2016.[^53] The arbitrator found the market rent for the premises to be $22.00 net per square foot per year, for 5 years, commencing on May 1, 2016. Based on a leased space of 2,975 square feet, this would result in a monthly rent of (2975 x 22 divided by 12) $5,454.17. The plaintiff had continued to pay rent at the rate of $3,300 for May, June, July and August 2016. This left the plaintiff owing the increase for those four months (being $5454.17 – 3,300 x 4) $8,616.68. Accordingly, as of September 1, 2016, the plaintiff would have owed the defendants ($8,616.68 + $5,454.17) $14,070.85. Of course, this assumes there would be a new lease. The arbitrator did not deal with the costs of the court proceedings. Counsel for the defendants had argued that since the endorsement of July 26, 2016 referred to the arbitration to take place on July 28, 2016 to determine the rent, the arbitrator was no longer mandated to deal with the costs of the court proceeding. This was an error. The endorsement does nothing to change the terms of the settlement agreed to by the parties. The intention was to underscore and confirm the need to resolve what should have been the only impediment to the preparation and execution of a lease that would have covered the renewal term, being the rent. Nothing turns on this change. It returns the issue of costs to the court.

[48] The defendants say that the plaintiff “…outright refused to pay the adjusted rental amounts, subsequent rents, TMI, and utilities”[^54]. There is no document or independent evidence to support this assertion. In her Supplemental Affidavit, Justine Fowler explains that the plaintiff did not have funds to pay the rent and back rent to be added to the payments that had been made under the original Agreement to Lease. Counsel for the plaintiff wrote and asked if the defendants would agree to allow the plaintiff continued possession of the premises to September 10, 2016 to allow for the sale of the restaurant to be completed.[^55] Counsel for the defendants responded:

Mark is in trial tomorrow. I do not expect for us to have a substantial response to your letter by noon tomorrow as you demand. However, I can advise that your client’s failure to remit the September rent payment will constitute a breach of the lease.[^56]

[49] On September 5, 2016, the defendants locked the doors of the premises and posted a Notice of Distress. It claimed that the plaintiff owed to the defendants $55,000.[^57] This was done without prior advice or notice, in the face of ongoing efforts to sell the business and the knowledge that the matter was to return to court for a summary judgment motion on September 21, 2016.[^58] By letter, dated September 6, 2016, counsel on behalf of the plaintiff sought to arrange entry to the premises in order that those representing the plaintiff would be able to pick up rental items that needed to be returned to their owners, could deal with the shutting off of the utilities and to organize the removal of personal and corporate belongings.[^59] The defendants have not allowed the plaintiff to return or release the rented items or those belonging to them.[^60] On September 16, 2016, Justine Fowler attended at the offices of the Alcohol and Gaming Commission for the purpose of continuing the liquor licence held by the plaintiff. It was about to expire. She was advised that it had been taken over by the defendants as a “Landlord in Possession”. [^61]

[50] The closing of the premises, the holding of rented and personal belongings and the taking over of the liquor licence marked the end of the business. As a result, at the outset of this motion, after some discussion with the court, counsel for the plaintiff indicated that he sought summary judgment. There was no longer any purpose in asking for enforcement of the settlement, too much additional damage had been done to the business. As described by Justine Fowler, “...the business has been destroyed”.[^62]

THE REQUEST FOR AN ADJOURNMENT

[51] On Sept. 21, 2016, the court was advised that the defendants were again without counsel. There was no explanation as to the departure of the lawyer who had acted on the arbitration, or appeared in court on July 26, 2016. A Notice to Act in Person had been served and was filed with the court. There was no request for an adjournment until approximately one hour and 30 minutes after the proceeding had commenced. The request was refused. This was the fourth time the matter had been to court. It was the third time counsel had been terminated immediately in advance of a proceeding (the first appearance, the arbitration and this motion for summary judgment). The defendants had been warned of the risk. The plaintiff also has rights and an expectation that the proceeding will be dealt with in a balanced way, fairly and with reasonable expedition.

SUMMARY JUDGMENT

[52] The Rules of Civil Procedure[^63] demonstrate when summary judgment should be granted. The test is established. If there is no genuine issue requiring a trial, summary judgment should be ordered.[^64] Hyrniak v. Mauldin[^65] is now recognized as the seminal case explaining the requirements of a motion for summary judgment. It provides the analytical route to be travelled:

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.[^66]

ANALYSIS

(a) Notice of the Option to Renew

[53] Counsel retained by the defendants, upon being notified of the Statement of Claim, questioned whether notice of a desire to renew had been delivered in compliance with the Agreement to Lease (see: para. [17], above):

The said Agreement to Lease executed by the parties provided, as a condition precedent to a right of renewal, that your client would give a minimum of 6 months notice in writing of his intention to exercise the said right of renewal to the landlord. To be effective, the said notice would have to be served on our client by not later than August 29, 2015.

Our client has no record of receiving any such notice as prescribed by the Agreement to Lease. [^67]

[54] This discounts the SMS message delivered to Kevin Cheng (the son of the defendants) on March 13, 2015 (see para. [4], above). SMS is a text-messaging service available on some cell phones. It arrives by telephone but in a typed text format. In the modern context, this is a form of written communication. It is in written form. It just does not arrive on paper. The fact that Kevin Cheng, to whom the SMS message was directed:

“helps manage the property and has often been a point of contact in respect of the lease,” [^68]

“those representing the plaintiff ‘considered him the Building’s property manager’”,[^69]

and

“his role as property manager became more pronounced after the dispute concerning the Additional Rent”,[^70]

suggests that the delivery of the notice to him was in keeping with the pattern of behavior between the parties, over time.

[55] It is significant that the parties acted in a manner consistent with notice having been properly provided. The defendants may have frustrated those representing the plaintiff by failing to meet, but this was not because the defendants did not accept that they had been notified but because they demanded payment of the Additional Rent they claimed was owed before they were prepared to talk. [^71] The common understanding of the parties was that notice had been given. They dealt with each other on that basis. In responding to Justine Fowler concerning the failure of his parents to agree to a meeting, Kevin Cheng did not say there was no notice. He indicated they were “...unhappy with the issue regarding the unpaid water etc.”[^72]

[56] In 6781427 Holdings Ltd. v. Alma Mater Society of the University of British Columbia[^73], the lease gave the tenant an option to renew, provided that the tenant gave written notice of intention to do so between May 1, 1986 and July 31, 1986. No written notice was given during the specified period. However, on May 12, 1986, the tenant made a proposal to expand its business within the landlord’s building. Discussions between the landlord and tenant took place during May, June and July. Eventually, the landlord advised the tenant that it would not know if additional space would be available until December. In September, the landlord took the position that the tenant had not given notice of its intention to renew and would, therefore, be expected to vacate the premises. The tenant applied for a declaration that it was entitled to a lease for the renewal period. The declaration was granted. The landlord was estopped from relying on the failure of the tenant to give notice. The appeal was dismissed. The discussions of May, June and July proceeded on the assumption that the tenant would continue to be a tenant:

…Either way, the important fact is that the parties were proceeding from May 12th onward, and until after July 31st, on the assumption that the tenant would continue to be a tenant, but with uncertainty as to the area that would be occupied and the terms on which any greater area would be occupied. There seems to be no basis in the evidence for any doubt that the tenant intended, should its proposal not be accepted, to continue on as a tenant for as long as it could, and there seems no reason to doubt that Mr. Redden [the business manager of the landlord] understood that.[^74]

[57] In Director’s Film Co. v. Vinifera Wine Services Inc.[^75], the president of the tenant corporation testified that she had unequivocally committed the tenant to the renewal of the lease. The president of the landlord denied this. It was the contention of the tenant that it had confirmed the substance or “essence” of the discussion that had taken place by facsimile transmission. On behalf of the landlord, it was said that the transmission was never received and that, in any event, it did not constitute a direct or unequivocal exercise of the option. The judge hearing the motion found that it was “more likely than not” that the impugned letter had been forwarded to the landlord.

[58] The facsimile did not say the tenant was renewing the lease; rather, it indicated a desire to enter into a discussion to establish the terms of a renewal.[^76] The same is true of the SMS message sent by Justine Fowler on March 13, 2015 (see: para. [14], above). The judge in Director’s Film Co. v. Vinifera Wine Services Inc. found that there had been a valid exercise of the option. She pointed to the pattern of behaviour of the parties as being casual and informal. So it was here. Communication by SMS messaging was consistent with the past pattern of behaviour:

The Defendants and Kevin preferred to be contacted by telephone, email and, in particular, SMS message (i.e. text messaging). For example, in their demand letter of February 10, 2013 attached as Tab “I”, [The defendant Michael] Cheng said ‘If you have any questions do not hesitate to call or text me.’ Angus and I also preferred SMS messaging because it was usually the most effective way to elicit a response from the Defendants. A further example is, in October and November 2015, as detailed below at paras. 77 to 89, and Exhibits “R”, “T”, and “W”, the Defendants served on l’ouvrier two Notices of Default and a Notice of Non-Renewal of Lease by email, not regular mail or fax.[^77]

[59] In this case, on the record before me and without the additional powers provided by r. 20.04(2.1) and (2.2), I find that notice was given pursuant to the Agreements to Lease, s. 8 (Option to Renew) (see: para. [3], above). A landlord, by its conduct, may waive its right to strict compliance with the exercise of a renewal option found in a lease.[^78] In this case, the landlord did so.

[60] This takes these reasons to the merits: Which of the parties breached the lease (the Agreement to Lease), does this issue, following the analytical direction found in Hyryniak v. Mauldin, raise a genuine issue requiring trial?

[61] The way this has been approached by the two sides is starkly different. The plaintiff has provided a substantive recording of the events that have led the parties to this point. The defendants support their case with bald statements, demands and at least one calculation that does not stand up to reasoned inquiry (see: paras. [28], [29] and [30], above).

(b) The Claim for Additional Rent

[62] The problems between the parties began before the question of renewing the lease arose. The Agreement to Lease calls for the tenant to pay, as Additional Rent, its proportionate share of the expenses generally associated with operating the building[^79] or the direct cost depending on which applied. In the course of their submissions, the parties spent some time arguing about whether or not the basement was or had been leased to a tailor and whether, subsequent to the tailor, the sister of the defendant Yen Ping Leung was using this space to operate a business. It is clear that the defendants were renting rooms or suites on the upper floor, on a short-term basis. This was referred to by the plaintiffs as the “hotel”, but is more properly identified as rental apartments. On its face, whether the basement and upper floor were in use should not matter. The Agreement to Lease refers to the proportion of “leasable space”, not the proportion of space that had been leased.[^80] The Agreement to Lease called for the tenant to pay $1,500 per month on account of Additional Rent subject to adjustment. The defendants waited two years and then demanded Additional Rent attributable to that period. The claim was based on a proportionate share of each of the items at issue. No direct cost was referred to. The amount sought was based on assigning the plaintiff 60% of the water usage, 100% of the property tax and 50% of the insurance. These were assumptions. No justification or explanation was provided.[^81] The defendant sought a payment of $9,858.09.[^82]

[63] The tenant, undertaking its own evaluation, concluded that its share of each of water use and building insurance to be 40% and “suggested” the plaintiff be responsible for 60% of the commercial property tax.[^83] In doing this, the plaintiff took into account the presence of the tailor shop and the apartments. Given that the proportionate share is the basis for the calculation and not the assertion of a direct cost, what mattered was the proportion represented by the area the plaintiff leased set off against the total of the leasable space available in the building rather than total area of the space that had been leased. Put differently, it does not matter what use was actually being made of the remaining space. The issue is whether it could have been leased. As determined by the plaintiff, it had overpaid its share of Additional Rent in the amount of $7,315.96.[^84]

[64] The response of the landlord was to demand more. In a letter, the lawyer then acting for them adjusted the percentages. He advised that a separate water meter had been installed in order that, in the future, the actual water use of the plaintiff would be recorded. He suggested that the plaintiff be responsible for 50% of the past usage. This was a reduction from the previous demand that the plaintiff be responsible for 60%. The letter advised that the plaintiff was now being held responsible for 70% of the property insurance, an increase from the previous demand of 50%. This was based on a discussion with an insurance agent who explained that “…the usual split between commercial usage and residential usage for a restaurant was 70/30.”[^85] This is difficult to understand. It is not clear what the assertion of residential uses relies on and, given that the 70/30 division is “usual”, what the split represents. Presumably, it is not specific to this location. In any event, a restaurant is not, as the quoted phrase suggests, a residential use. I expect that, despite the confusion, the reference to a residential use refers to the rental suites. The letter continued the assertion that the tenant was responsible for 100% of the property taxes. This was justified on the basis that the plaintiff was the sole business operating out of the building. Property taxes are not assessable based on what business is or is not operating at the location of concern. Generally, it is based on size, location, condition and zoning. The defendants now sought “$11,375 on account of Additional Rent they said had not been paid”.[^86]

[65] To the plaintiff, as expressed in another letter written by its lawyer, this new request was unacceptable. It did not account for the other commercial uses operating on the premises. The installation of a separate water meter was the responsibility of the landlord. If it had failed to do so in the past, it was not a circumstance where the tenant should run the risk of overpayment for the past. A fair division would be 1/3 paid by each of the three commercial uses of the property. The division for insurance of 70/30 was arbitrary. Counsel provided more detail as to property taxes:

To date, our client has received one document in respect of property taxes, which summarizes the charges for 2012. Notably, the property taxes for residential and commercial or a combined $21,908.84. Yet you have demanded that our client pay $18,808.86, i.e. 86% of the total property taxes for 2012. This is clearly a disproportionate figure – one that does not account for the three businesses operating from the premises.[^87]

[66] This was not the end. Counsel for the defendants wrote back. As he saw it, the responsibility to provide the water meter fell to the tenant. He pointed out that, in fact, the Agreement to Lease separated the obligation to pay for utilities from the requirement to pay Additional Rent. The second last paragraph of the section dealing with Additional Rent states:

Additional Rent for the Premises are estimated at $1500.00/month during calendar year 2011. The Tenant shall have the right to review or audit the Landlord’s records from time to time. Utilities are extra and payable by the Tenant directly to the provider.[^88]

[67] This suggests, for the first time, that this was a direct cost and not one derived from an understanding of the proportionate share. Counsel for the defendants wrote that this implied that the arrangements necessary to allow for payment of the utilities were left to the tenant, including having the provider install a separate water meter.[^89] The Agreement to Lease further demonstrates that:

The direct cost of supplying all utilities used or consumed in the Premises on the basis of separate meters, if available, and payable directly to the provider or otherwise on the basis of an equitable allocation based on type of use as determined by the landlord.[^90]

[68] Counsel for the defendant asserted that 50% was an equitable allocation given the use of water made by the plaintiff. The letter provides new and more specific calculations for both insurance and realty tax.[^91] On behalf of the tenant, its counsel complained that the calculations failed to acknowledge that a business operated in the basement. This directly impacted the proportionate allocation of expenses associated with the property. Counsel noted that, without this acknowledgement, the allocation proposed by the defendants could not be appropriate. Counsel concluded by saying that, without coming to terms with this difference, no resolution can be reached.[^92]

[69] There is evidence that there were two businesses, other than l’ouvrier, operating in the building. In her affidavit, sworn March 22, 2016, Justine Fowler deposed that Urban Living Suites operated out of the second floor, offering short-term rentals and extended stays. This is confirmed by a website by which Urban Living Suites offered “simple, clean and furnished suites…[i]n the heart of Dundas West. The address provided is 791 Dundas St., the same address as the building where l’ourvier is located.[^93] In the same affidavit, Justine Fowler stated that there was a tailor shop in the basement. This is confirmed by a webpage printout from Yellowpages.com for YC Fashion, located at 791 Dundas St. West, and a series of photographs showing: (1) items delivered to the business in the basement addressed to Tammy at YC Fashion and YCG with the address 791 Dundas Street West; (2) handwritten signs posted on doorways directing deliveries at 791 Dundas Street West to “YCG Entrance…To Basement”; and, (3) photographs of workers in the basement at 791 Dundas St. West.[^94] In the affidavit, Justine Fowler reported that “…the staff from the tailor shop have, in the past used our restaurant to enter and exit the basement unit and we have had incidents where couriers will inquire at the restaurant where the tailor’ in the Building is located.”[^95]

[70] The fact that the defendants were unprepared to acknowledge that there was a business in the basement or to explain whether the use of the upstairs was a commercial or residential use rendered resolution of the issues impossible. This continued to be the case two years later when the issue of a renewal arose. These businesses have an impact on an analysis of whether any money was owed under the Agreement to Lease. There is no demonstration that any Additional Rent was owing.

(c) After Notice of the Renewal

[71] This continued to be the case following the delivery, on March 13, 2015, of the SMS message, seeking a renewal of the lease. At the outset, the e-mail response from the son of the defendants (Kevin Cheng) was that his parents wanted to resolve the “previous issue”, being the alleged unpaid Additional Rent before they would discuss a renewal. The right to renewal was conditioned on the tenant being in compliance with the requirements of the lease agreement (in this case, the Agreement to Lease). If the tenant owed Additional Rent, it would not have been in compliance. But that was never demonstrated to be the case. Following the disagreement over Additional Rent in 2013, the defendants did not develop or propose an adjustment to account for any shortfall in Additional Rent for the years 2014 or 2015. The issue was only raised in response to the SMS message. The defendants set that aside. They required the plaintiff to retain a real estate agent. A draft Agreement to Lease was sent by that agent. Initially, the defendants did not respond and, upon being approached by Justine Fowler, directed her to their lawyer to discuss the second term. The defendants were no longer represented by counsel. The defendants returned to the demand that Additional Rent was owed and should be paid. This was the substance of the Notice of Default, dated October 22, 2015, and the subsequent letter of November 23, 2015 saying there would be no renewal as a result of the failure to pay Additional Rent (see: para. [12], above). The Notice of Default attached a calculation of the amount owing. This included water usage at 50%, insurance at 50% and commercial property tax at 100%. It introduced claims for “Maintenance and Operating Expenses and for “Damages to the Premises”. For the first time, it advanced claims based on each of the five years of the original term and added 5% for interest to arrive at the total of $46,628.23.

[72] This not a demand that falls fairly within the terms of the Agreement to Lease.

[73] Over the term of the Agreement to Lease, the plaintiff had continued to pay rent and $1,500 a month as Additional Rent. The claim for Additional Rent was made after the fact. The defendants relied on the request for renewal as a means of obtaining payments which had not been requested earlier and were not demonstrated as being owed. The only prior request was in 2013 and no resolution pursued or agreed to. In the calculation attached to the Notice of Default, the water usage, insurance and property taxes amounts, apparently paid by the defendants, were taken and the percentages utilized by the landlord applied. The additional demand for “Maintenance and Operating Expenses” appears to be an arbitrary number ($200.00 per month for 58 months of the tenancy equals) $11,600.[^96] The Agreement to Lease addresses payment of Additional Rent as follows:

… The Tenant shall pay as Additional Rent, in monthly instalments, in advance on the basis of a reasonable best estimates by the Landlord (and subject to necessary adjustments), either as Proportionate Share, or the direct cost of each item as the case may be, all as more fully set out in the Lease…

Additional Rent costs for the premises are estimated at $1,500.00/month during calendar year 2011.

[Emphasis added]

[74] There is no lease. In her affidavit of March 22, 2016, Justine Fowler deposed that one was produced by the defendants, for the first time, when the issue of Additional Rent was raised in 2013 (see: fn. 2 above). It was never executed. Justine Fowler deposed that it “contained provisions that were unreasonable and not consistent with the Agreement to Lease”.[^97] Interestingly, the lease as presented by the defendants would have required any adjustments to Additional Rent to be calculated annually:

Additional Rent shall be payable in monthly instalments in advance on the same dates as stipulated for payment of Rent in Section 2 (2) and the Landlord shall at least once each year provide the Tenant with a statement providing such information as may be required to calculate accurately the amounts payable by the Tenant as Additional Rent:

(a) prior to the first statement being delivered the payments of Additional Rent shall be based on the Landlord’s estimate of the expenses chargeable to the Tenant;

(b) in the event that such statement indicates that the amounts paid by the Tenant for Additional Rent are either more or less than the amount required pursuant to the statement then an adjusting statement shall be delivered within 30 days;

(i) and if the Tenant has overpaid in respect of an Additional Rent the adjustment may be made by way of reduction of the next ensuing instalments of Rent.[^98]

[75] Both the Agreement to Lease and the unexecuted lease establish an annual rent for each of the years that make up the term of the lease and then require a payment each month. There is nothing that would allow the landlord to hold back, claim no adjustment each year and at the time of renewal expect full payment of what it says is owing (including interest) and claim the failure to pay what it demands as a breach of the Agreement to Lease. In such a circumstance, the landlord could not deny the exercise of an option to lease on the basis that the tenant has failed to pay Additional Rent and is, on that account, in breach.

[76] The Notice of Default and the letter of November 23, 2015 were followed by the letter from Michael Cheng, dated December 31, 2015. It repeated the request for the payment demanded in the Notice of Default, but also announced the landlord’s “new Basic Rent” would be “around $6,000”. It is not without significance that this letter was sent one week after the defendants had been advised of the acceptance of the agreement to sell the business. The amount caught the plaintiff by surprise. It was “nearly double what the plaintiff had been paying (see: para. [15], above). Pursuant to the Agreement to Lease, with the exercise of the option to renew, rent could either be agreed to or determined pursuant to the Arbitration Act.[^99] It could not be imposed. In introducing proposed rent, the defendants were stepping away from the Notice of Default and the demands for payment and opening consideration of the principal term of any renewal: rent.

[77] It is at this point that the statement of claim was issued but not served. The defendants’ response was to become more adversarial. Their counsel of the time raised the spectre that there had been no renewal and that there would be no discussion until $25,000 was paid, to be held by him in trust. Nonetheless, there were negotiations. The fact that they failed because the requested rent was too high should have taken the parties to arbitration and not to court. It was the defendants’ threat to ignore the option to renew and demand that the plaintiff vacate the property that was the catalyst for coming to the court. Rather than accept the right to renew and move to a resolution of the issue of rent, as the Agreement to Lease required, the defendants chose to add fuel to the fire by insisting on the higher rent, returning to the issue of Additional Rent through the demand that $25,000 be paid to the trust account of the lawyer, proposing that there had not been a proper exercise of the option to renew and making it clear they expected the property to be vacated on February 29, 2016.

[78] On the first occasion this proceeding came to court, the defendants were without counsel. At some point, they had dismissed, or failed to retain, the counsel that had acted for them when the issue of Additional Rent was first raised in 2013. They wanted time to retain counsel; in particular, one who was fluent in a Chinese dialect they understood. The court responded. The adjournment was granted. Among other reasons this was done, and is commonly done, was in recognition of the concerns raised at the outset of these reasons. We wish, to the degree reasonably possible, to extend to people the opportunity to obtain the help they need to take part and understand what the court offers. In order to respond to the rights and needs of the plaintiff, the effect of the Agreement to Lease was left in place and remained in force until April 30, 2016, the day after the next appearance.

[79] On April 29, 2016, when the parties next appeared in court, the defendants were represented, albeit not by a counsel who spoke Cantonese:

The settlement process was done in a matter of minutes without any Chinese-speaking assistance and Schedule “A” was hastily prepared by Fowler and her lawyer.

I first gave my settlement instructions to Kevin over the phone where he interpreted it from Cantonese into English for out lawyer Brian Diamond.[^100]

[80] This being so, it is difficult to be sympathetic to the complaint of the defendant, Yen Ping Leung, concerning the circumstances in which the settlement was made. It is not possible for me to understand the situation surrounding the retaining of counsel and why the reason given for the adjournment was not acted on, but it is far too late to base any objection to the settlement on the problem of translation.

[81] The settlement dealt with the issue of Additional Rent. Contrary to the position of the defendants, the agreement was that, with the payment of $12,000, the problem of any outstanding amounts alleged to have been owed by the plaintiff pursuant to the existing Agreement to Lease had been dealt with. It was paid immediately. Justine Fowler reports that when she delivered the cheque for $12,000, the defendant, Michael Cheng, expressed his gratitude for its expeditious delivery.[^101] It was only later that the demand for the additional $15,000 was made. At this point, regardless of what happened before, understanding that the issue had been resolved, it was no longer open to the defendants to keep raising and relying on this issue. The settlement called for the question of rent to be dealt with as provided for in the Agreement to Lease, through arbitration (see: para. [22], above).

[82] The arbitration was adjourned twice, the first, in part, to accommodate the defendants and the second, entirely for that purpose (see: para. [25], above). As part of the second adjournment, the arbitration was made peremptory to the defendants. On June 16, 2016, counsel for the defendants asked for a conference call. It was convened on June 20, 2016. Counsel advised he had been dismissed. This happened three days before the arbitration. The arbitration did not proceed. It was adjourned again to accommodate the defendants.

[83] The defendants did not move to prepare for the arbitration and complete the settlement. They chose a different tack. They alleged that the plaintiff had breached the settlement and claimed they were owed in excess of $30,000. I have already indicated that, in my view, there was no justification for this demand (see: para. [30], above). They delivered an Agreement to Lease. It introduced new terms to the settlement. There had been no provision calling for the plaintiff to pay the landlord $3,000 for each request to assign the lease, the original Agreement to Lease provided for two renewals, each for five years, not one, as the defendants were now suggesting (see: para. [36], above). Rather than respect the indulgence the defendants had been given, their new counsel took the position that the arbitration would not proceed and that the defendants might not take part at all (see: para. [37], above). In other words, the defendants were prepared to breach the settlement. The defendants were granted another adjournment to allow the new counsel to obtain the file.

[84] The arbitration did proceed but only after the defendants, through their counsel, made it known that, in the absence of a new lease being agreed to, by July 8, 2016, they would remove the plaintiff from the premises. This was a breach of the settlement and the Agreement to Lease. Under the Agreement to Lease, the exercise of the option to renew entitled the plaintiff to a new lease, with only three exceptions (see: paras. [3], and [42], above) that have no application here; it was to be “on the same terms and conditions”.[^102] What followed was the delivery by the landlord of new lease documents – the first was 71-pages long and the second, 42 pages (see para. [41], above). These were new leases that did not respect the terms of the Agreement to Lease. The settlement provided for an arbitration and set the terms by which the new lease was to be signed. By insisting on something different, the defendants were in breach of the settlement. This was augmented by their insistence that they be paid the additional $15,000 the settlement did not call for.

[85] In advance of the arbitration, there was the appearance in court on July 26, 2016. It confirmed that the settlement had broken down, sets terms under which it could be reinstated and set the date for this motion if the parties were unsuccessful.

[86] The arbitration took place on July 28, 2016.[^53] The arbitrator did what he was supposed to do. He set the rent. As I have already said, there is nothing in the record that confirms the assertion of the defendants that the plaintiff “outright refused to pay the adjusted rent” (see: para. [48], above). To the contrary, the plaintiff accepted the decision of the arbitrator but asked for a delay of ten days to allow the sale of the business to be completed in order to fund the payment of what was owed. The defendants refused. Instead, on September 5, 2016, they locked the doors, took possession of the property and the contents, moved to have the liquor licence transferred and proclaimed they were owed $55,000. It bears observing that the refusal to give the plaintiff time (10 days) is to be considered in the face of the several indulgencies given to the defendants which caused the arbitration to be delayed for two months (pursuant to the settlement the original date of May 30, 2016 was delayed to July 28, 2016), in turn, causing any claim for increases to the rent back to the expiry of the original term to mount and complicate the ability of the plaintiffs to pay. This is not the sort of conduct that, in my view, the court should reward. In this case, the circumstances do not support the idea that I should do so.

[87] There is no genuine issue requiring a trial. To my mind, there is no issue of credibility here. The actions of the defendants speak for themselves. In any event, were I required to do so, I would accept the evidence of Justine Fowler over that of the defendant, Yen Ping Leung. I have no trouble doing so.

[88] I find that the defendants are in breach of the Agreement to Lease and the settlement. They claimed Additional Rent in a fashion that was contrary to the Agreement to Lease. They did not provide the plaintiff with an “adjustment” to account for Additional Rent at the end of each year. They made one claim during the course of the five-year term (in 2013) and then waited until the option to renew had been exercised. At that point, they sought to obtain the payment they claimed in return for discussing a renewal they were obliged to provide. They entered into a settlement. They made demands that were not part of that agreement. They demanded money that was not owed and proposed new leases that went beyond what the Agreement to Lease that had covered the rental relationship, since its beginning, called for. Rather than respect the process that had been agreed to, they threatened to withdraw and take over the property. Following the arbitration, they acted on the threat rather than allow the plaintiff the time it requested to make arrangements necessary to fulfill the order of the arbitrator.

DAMAGES

[89] The agreement to sell the business was lost as a result of the defendants’ failure to understand, accept and act on their obligations under the Agreement to Lease. By taking over the premises, its contents and the liquor licence, the defendants have made it impossible for the plaintiff to mitigate this loss. The value of the sale was $140,000. The business having been destroyed and the liquor licence having been taken over, there was no ability to mitigate by attempting to find another buyer.

[90] The plaintiff also claims for return of the $12,000 paid in furtherance of the settlement. By their actions, the defendants aborted the settlement. You cannot accept money in payment of an agreement you do not keep. The $12,000 is to be returned.

[91] The plaintiff seeks the return of its share of the cost of the arbitrator. The amount is $6,837.49. Even at the end, the defendants acted to take advantage of the circumstances rather than respect the process. The award was delivered on August 16, 2016. The arbitration and, thus, the award were delayed because the defendants were not ready. They fired their counsel two days before the arbitration was to take place. When the plaintiff asked for 10 days to complete the sale, the defendants moved to take over the property and the business. They did this knowing there would be a motion before the court on September 21, 2016. These actions rendered the arbitration meaningless. The $6,837.49 is to be be returned.

[92] The defendants continue to hold the $5,000 paid by the plaintiff at the outset of its tenancy. In the absence of any evidence that the plaintiff had failed to pay the rent required by the Agreement to Lease and the presence of the defendant taking over the premises in the face of a coming proceeding before the court, there is no justification for the defendants to maintain the security deposit. It, too, must be returned.

[93] The plaintiff says that, as a result of the uncertainty surrounding the lease, it lost business. It received requests for special events and turned them down. Justine Fowler “estimates” that, since November 15, 2016, l’ouvrier turned down 15 to 20 events. She says that, “consequently”, the plaintiff lost sales of $75,000 to $200,000. “Based on [her] experience”, Justine Fowler says that restaurants “see a profit on sales of approximately 10%.” On this basis, she proposes that l’ouvrier has lost profits of between $7,500 and $20,000 and, on that basis, goes to the middle to seek $13,000. I am not prepared to make any award for loss of profits. The plaintiff is required to prove damages. This requires more than anecdotal evidence. There was no effort to demonstrate the past income and profits of the plaintiff.[^103]

[94] Accordingly, I award as damages: $140,000 (loss of the sale) + $12,000 (return of settlement monies) + $6,837.49 (compensation for arbitrator’s fees) + $5,000 (return of security deposit) equals $163,837.49.

[95] Finally, the plaintiff seeks punitive damages of $20,000. Punitive damages are awarded against a defendant in exceptional cases for “malicious, oppressive and high-handed” misconduct that “offends the court’s sense of decency”.[^104] In Whiten v. Pilot Insurance Co.[^105] the plaintiff’s home burned down. The defendant insurer made a payment of $5,000 for living expenses and covered the rent of a winterized cottage for a couple of months after which it withdrew support and pursued a confrontational approach with the plaintiffs. In particular, it alleged that arson was involved when there was no evidence to suggest this was the case. The conduct of the defendant was “exceptionally reprehensible”. The jury awarded punitive damages of $1,000,000. The court of appeal reduced this to $100,000. The Supreme Court of Canada allowed the further appeal and reinstated the award made by the jury. The award, though high, was within rational limits. The court reviewed the practice in other common law jurisdictions and drew a series of general conclusions. Among them, that “…the general objectives of punitive damages are punishment (in the sense of retribution), deterrence of the wrongdoer and others, and denunciation…they are ‘the means by which the jury or judge expresses its outrage at the egregious conduct’ ”[^106].

[96] The defendants have acted in a fashion which is inconsistent with what the law requires. Rather than respect the agreements they have made and the processes of the court, in the face of indulgencies the court has provided, they have attempted to use the nature of their relationship with the plaintiff to achieve their ends. The defendants have knowingly demanded money in a fashion that was inconsistent with the Agreement to Lease and was contrary to the settlement agreement they made; an agreement they entered into with the assistance of counsel. They demanded money they were not owed. Rather than recognize the option to renew, they used the desire (and, with the sale of the business, the need) of the plaintiff to renew the Agreement to Lease in an attempt to force the payment of those funds. They sought to unilaterally change both the terms of the original Agreement to Lease and, later, the settlement, a settlement that had been confirmed by the court through its Endorsement of April 29, 2016. They fired three lawyers, two before appearances in court and, the third, days before the arbitration. On each occasion, they sought adjournments. Twice they were granted. On the first, the stated reason for the request was the desire to work with a lawyer who spoke Cantonese. Having been granted the adjournment, they hired a lawyer who did not and then complained about the difficulty they had as the settlement was being negotiated. The arbitration was delayed for two months. When it was complete, rather than recognizing the difficulties the delay had caused the plaintiff, the defendants refused to provide the plaintiff with similar relief; choosing, instead, to seize the premises knowing that this motion for summary judgment was scheduled to be heard less than three weeks later. Having seized the premises, they refused to allow the representatives of the plaintiff access to obtain any personal items or articles that had been rented in furtherance of operating the business. They moved to take over the liquor licence, ensuring the loss of any value that might have remained.

[97] I find that the actions of the defendants are sufficiently egregious so as to attract punitive damages. I award such damages in the amount of $20,000.

[98] I award the plaintiff judgment in the total amount of $183,837.49

[99] Ultimately, it is not sufficient to rely on difficulties with language or the failure to understand and accept basic values of our society as foundation for actions that are contrary to what the law requires.

[100] I anticipate the parties will be unable to agree as to costs. The plaintiff was the successful party, as matters stand (and without hearing submissions) it is difficult for me to imagine that costs will not follow the event. If the plaintiff seeks costs, I will consider submissions in writing on the following basis:

1. On behalf of the plaintiff, no later than 15 days after release of these reasons. Such submissions are to be no longer than 4 pages, double-spaced, excluding any Bill of Costs or Costs Outline and any case law that may be relied on;
2. On behalf of the defendants, no later than 10 days thereafter. Such submissions are to be no longer than 4 pages, double-spaced, excluding any Bill of Costs or Costs Outline and any case law that may be relied on; and,
3. On behalf of the plaintiff, in reply, if necessary no later than 5 days thereafter. Such submissions are to be no longer than 2 pages, double-spaced.

LEDERER J.

Released: 20161207

CITATION: l’ouvrier Inc. v. Leung, 2016 ONSC 6993

COURT FILE NO.: CV-16-543920

DATE: 20161207

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

L’OUVRIER INC. Plaintiff

– and –

YEN PING LEUNG AND MICHAEL CHENG Defendants

AND B E T W E E N:

YEN PING LEUNG AND MICHAEL CHENG Plaintiffs by Counterclaim

• and –

L’OUVRIER INC. AND JUSTINE FOWLER AND ANGUS BENNETT Defendants by Counterclaim

JUDGMENT

LEDERER J.

Released: 20161207

[^1]: Affidavit of Yen Ping Yeung, sworn April 19, 2016, at paras. 6 and 7; and, Supplemental Affidavit of Yen Ping Yeung, sworn September 21, 2016, at paras. 3 and 4.

[^2]: The Agreement to Lease requires that a lease be prepared and delivered to the Tenant. It seems a lease was only produced during February 2013 when a dispute arose as to the proper calculation of Additional Rent. The plaintiff complains that the lease contained provisions that were unreasonable and not consistent with the Agreement to Lease. It is the terms of the Agreement to Lease which informed the submissions made on this motion. The lease was never executed. A copy is included in the Record (Affidavit of Justine Fowler, sworn on March 22, 2016, at para. 54 and Exhibit “L”).

[^3]: Short Message Service (SMS) is a text messaging service component of the World Wide Web and mobile telephone systems. It uses standardized communications protocols to enable fixedline or mobile phone devices to exchange short text messages. (Kelly, Heather (December 3, 2012). "OMG, The Text Message Turns 20. But has SMS peaked?" CNN quoted on Wikipedia).

[^4]: Affidavit of Justine Fowler, sworn on March 22, 2016, at para. 65, and Exhibit "O".

[^5]: Ibid, each of the four quotations associated with the lease are referred to at Section 4, titled “Additional Rent”.

[^6]: Ibid, at para. 45 and Exhibit I.

[^7]: Ibid, at para. 50.

[^8]: Ibid, at paras. 52 and 53.

[^9]: Ibid, at paras. 68-71.

[^10]: Affidavit of Yen Ping Leung, sworn April 19, 2016, at para. 81.1.

[^11]: Ibid, at para. 77.

[^12]: Affidavit of Justine Fowler, sworn on March 22, 2016, at para. 65, para. 70 and Exhibit "O". (For example, on September 4, 2015, as part of an exchange of messages, Kevin Cheng sent this: “I just spoke with Ping and she prefers to have an agent to facilitate any negotiations. She said she will provide you their contact shortly.”).

[^13]: Affidavit of Yen Ping Leung, sworn April 19, 2016, at para. 83.

[^14]: Affidavit of Justine Fowler, sworn on March 22, 2016, at Exhibit "O”.

[^15]: Ibid, at paras. 73, 74, 75; and Exhibit “Q”; and, Affidavit of Yen Ping Yeung, sworn April 19, 2016, at para. 82.

[^16]: Ibid, (Yen Ping Yeung), at para. 78; and, (Justine Fowler), at para. 77, and Exhibit "R”.

[^17]: Ibid, (Justine Fowler), at Exhibit “T”.

[^18]: Ibid, (Yen Ping Yeung), at para. 87, and Exhibit “J”; and (Justine Fowler), at para. 89 and Exhibit "W”.

[^19]: Ibid, (Justine Fowler), at para. 89, and Exhibit "W”.

[^20]: Ibid, (Justine Fowler), at paras. 91 to 93, and Exhibit “Y” (The executed Agreement of Purchase and Sale).

[^21]: Ibid, (Justine Fowler), at para. 94, and Exhibit “Z”.

[^22]: Ibid, (Justine Fowler), at para. 95.

[^23]: Ibid, (Justine Fowler), at paras. 96 and 97.

[^24]: Ibid, (Justine Fowler), at paras. 103 and 104.

[^25]: Ibid, (Justine Fowler), at paras. 104 to 109.

[^26]: Ibid, (Justine Fowler), at paras. 112 to 114.

[^27]: Endorsement in this proceeding, dated February 19, 2016.

[^28]: Notice of Motion herein.

[^29]: Supplemental Affidavit of Justine Fowler, sworn September 1, 2016, at para.11, and Exhibit “C”.

[^30]: Ibid, at paras. 12 to 14. I say “evidently” because in an e-mail, dated Friday, May 27, 2016, (see: Exhibit “F”) counsel for the plaintiff says, on the one hand, that the defendants were in their office during that week, and, on the other hand, indicates that he could be mistaken as to whether it had been said that they would be away. For their part, the defendants agree that the date was changed to June 8, 2016 to accommodate the fact that they would be out- of-town with limited telephone access (Supplemental Affidavit of Yen Ping Leung, sworn September 21, 2016, at para. 12).

[^31]: Ibid, at paras. 15 and 17. Attached as Exhibit “G” is what purports to be an Amended Arbitration Agreement which shows the date of the arbitration to be June 23, 2016. It is not signed.

[^32]: Ibid, at para. 19, and Exhibit “H”.

[^33]: Ibid, at Exhibit “H”.

[^34]: Ibid at para. 18.

[^35]: Ibid, at para. 28, and Exhibit "L".

[^36]: Ibid, at para. 28 and Exhibit “L” (letter of June 28, 2016).

[^37]: Supplemental Affidavit of Supplemental Affidavit of Yen Ping Leung, sworn on September 21, 2016, at para. 14.

[^38]: Ibid, at para. 16.

[^39]: Supplemental Affidavit of Justine Fowler, sworn September 1, 2016, at para. 21.

[^40]: Ibid, at para. 24, and Exhibit “J”.

[^41]: Ibid, at para. 6 and Exhibit “K”.

[^42]: Ibid, at para. 26 and Exhibit “L”.

[^44]: Ibid, at Exhibit “L”.

[^45]: Supplemental Affidavit of Yen Ping Leung, sworn on September 21, 2016, at para. 19.

[^46]: Supplemental Affidavit of Justine Fowler, sworn on September 1, 2016, at para. 34.

[^47]: Quite apart from the changes identified by Justine Fowler and found in the Agreement to Lease delivered on June 20, 2016 are the following items listed in Schedule “A’ to the draft leases delivered by the defendants during July 21, 2016. After referring to the $12,000 + $15,000 said to be the settlement amounts for “TMI/ additional rent arrears” (discussed at paras. [31] and [32], of these reasons), water and a deposit (discussed at para. [34], above:

• an indemnity to be provided by Angus Bennett and Justine Fowler to the landlord with respect to the obligations of the tenant under the lease;
• provision by the tenant to the landlord of information regarding the tenant's financial standing, including two pieces of ID of the shareholders and the corporate organization as the landlord requires;
• the acceptance by the tenant of the landlord's right to investigate its and the indemnifiers’ (Angus Bennett and Justine Fowler) financial standing and credit worthiness; and,
• acceptance of the lease conditional upon approval of the landlord's Board of Directors, approval of the tenant's financial status of credit rating, a decision which was left to the landlord's sole and absolute discretion.

[^48]: Supplemental Affidavit of Yen Ping Leung, sworn on September 21, 2016, at para. 18.

[^49]: Agreement to Lease, dated March 3, 2011, clause 8 (quoted at para. [3], above).

[^50]: Supplemental Affidavit of Yen Ping Leung, sworn on September 21, 2016, at para. 3; and the Affidavit of Yen Ping Leung, sworn April 19, 2016, at para. 6.

[^51]: Ibid, (Supplemental Affidavit), at para. 4; and (Affidavit), at para. 7.

[^52]: Ibid, (Supplemental Affidavit), at para. 10.

[^53]: The title page of the Award released by the arbitrator says that the hearing was on July 29, 2016. However, the Award itself notes that the hearing was set for July 28, 2016 and that it proceeded on that date. (Arbitration Award, para. 11).

[^54]: Supplemental Affidavit of Yen Ping Leung, sworn on September 21, 2016, at para. 22.

[^55]: Supplemental Affidavit of Justine Fowler, sworn September 1, 2016, at para. 64, and Exhibit “T”.

[^56]: Ibid, at para. 65, and Exhibit “T”.

[^57]: Second Supplemental Affidavit of Justine Fowler, sworn on September 12, 2016, at para. 2.

[^58]: Ibid, at paras. 6, 9, 10 and 11.

[^59]: Ibid, at para. 7.

[^60]: Third Supplemental Affidavit of Justine Fowler, sworn on September 21, 2016, at paras. 2 and 3.

[^61]: Ibid, at paras. 4 to 8.

[^62]: Ibid, at para. 2.

[^63]: R.R.O. 1990, Reg. 194.

[^64]: Ibid, at r. 20.04(2)(a).

[^65]: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87, 366 DLR (4th) 641; 453 NR 51; 95 ETR (3d) 1, 314 OAC 1; 37 RPR (5th) 1; 46 CPC (7th) 217.

[^66]: Ibid, at para. [66].

[^67]: Affidavit of Justine Fowler, sworn on March 22, 2016, at para. 106, and Exhibit “CC”.

[^68]: Ibid, at para. 4.

[^69]: Ibid, at para. 61.

[^70]: Ibid, at para. 62.

[^71]: Ibid, at paras. 69 and 70 (recounting the SMS exchange of September 4, 2015) and 71.

[^72]: Ibid, at para. 70 (recounting the SMS exchange of September 3, 2015).

[^73]: 1987 CanLII 2889 (BC CA), 44 DLR (4th) 257.

[^74]: Ibid, at para. 20.

[^75]: 1998 CanLII 14658 (ON SC), 38 OR (3d) 212.

[^76]: Ibid, at para. 6.

[^77]: Affidavit of Justine Fowler, sworn on March 22, 2016, at para. 63.

[^78]: Director’s Film Co. v. Vinifera Wine Services Inc., supra, (fn. 72), at para. 14, referring to Petridis v. Shabinsky (1982), 1982 CanLII 3091 (ON SC), 132 D.L.R. (3d) 430 (H.C.).

[^79]: As quoted at para. 7, the Agreement to lease defined “Proportionate Share” “…as a fraction having as its numerator area of the Premises and as its denominator, the area of all (office and\or retail) leasable premises in the building, including the Premises [Emphasis added] (Agreement to Lease, at section 4, paragraph (c)).

[^80]: See footnote immediately above.

[^81]: Affidavit of Justine Fowler, sworn on March 22, 2016, at para. 39, and Exhibit “H”. On the exhibit, which is the letter from the defendant, Michael Cheng, making the demand for additional rent, the percentages for “water usage” (60%) and “insurance” (50%) are expressed as “assumed”. The “property tax, commercial” is simply said to be 100% without explanation. Paragraph 39 of the affidavit refers to water usage being claimed at 50%. Exhibit “H” is the original document. I assume the affidavit to be in error.

[^82]: Ibid, at para. 39, and Exhibt “H”.

[^83]: Affidavit of Justine Fowler, sworn on March 22, 2016, at paras. 42 and 43.

[^84]: Ibid, at para. 44, and Exhibit “I”.

[^85]: Ibid, at para. 46, and Exhibit “J”.

[^86]: Ibid, at para. 47, and Exhibit “J”.

[^87]: Ibid, at Exhibit “L” (letter to Howard Ho, dated March 7, 2013).

[^88]: Agreement to Lease, section 4.

[^89]: Affidavit of Justice Fowler, sworn on March 22, 2016, at Ex. “L” (letter to David Barbaree, dated March 19, 2013).

[^90]: Agreement to Lease, at para. 4(c).

[^91]: Affidavit of Justine Fowler, sworn on March 22, 2016, at Ex. “L” (letter to David Barbaree, dated March 19, 2013).

[^92]: Ibid, at Exhibit “L” (letter to Howard Ho, dated March 22, 2013).

[^93]: Ibid, at paras. 8, 9 and Exhibit “D”.

[^94]: Ibid, at paras. 8, 9, 10 and Exhibit “E”.

[^95]: Ibid, at para. 9.

[^96]: The Notice of Default says $200.00 per month. The calculation shows $400.00 per month. The correct calculation to arrive at the amount claimed is $200.00 x 58 = $11,600.

[^97]: Affidavit of Justine Fowler, sworn on March 22, 2016, at para. 54, and Exhibit “K”.

[^98]: Ibid, at Exhibit “K” (Lease, section 2(5)).

[^99]: S.O. 1991, c. 17; and, see: Agreement to Lease, s. 8 (Option to Renew).

[^100]: Supplemental Affidavit of Yen Ping Leung, sworn September 21, 2016, at paras. 7 and 8.

[^101]: Supplemental Affidavit of Justine Fowler, at para. 11.

[^102]: Agreement to Lease, s. 8 (Option to renew), quoted at para. [3], above.

[^103]: Supplemental Affidavit of Justine Fowler, at paras. 49, 50, 51, and Exhibit “Q”.

[^104]: Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130 at 196, quoted in Whiten v. Pilot Insurance Co. 2002 SCC 18, 2002 S.C.C. 18, at para. 36.

[^105]: Ibid, (Whiten v. Pilot Insurance Co.).

[^106]: Ibid, (Whiten v. Pilot Insurance Co.), at para. 68, quoting from Hill v. Church of Scientology of Toronto, supra, (fn.99), at para. 196.