Silver Seven Corporate Centre Inc. v. 2871220 Canada Limited, 2017 ONSC 5091

CITATION: Silver Seven Corporate Centre Inc. v. 2871220 Canada Limited, 2017 ONSC 5091

COURT FILE NO.: CV-17-574726-00

DATE: 20170829

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

SILVER SEVEN CORPORATE CENTRE INC.

Applicant

• and -

2871220 CANADA LIMITED and HOME DEPOT HOLDINGS INC.

Respondents

COUNSEL:

Alvin Martin Meisels, for the Applicant

Adam J. Stephens, for the Respondents

HEARD: August 25, 2017

P. J. MONAHAN J.

REASONS FOR JUDGMENT

[1] Silver Seven Corporate Centre Inc. (“SSCC”) is the owner of a commercial property known municipally as 737-777 Silver Seven Road in the City of Ottawa (the “SSCC Property”). The SSCC Property is subject to a number of restrictions that have been registered against title (the “Restrictions”), for the benefit of adjoining lands (the “Home Depot Lands”) owned by 2871220 Canada Limited and Home Depot Holdings Inc. (“Home Depot”). SSCC seeks an order modifying the Restrictions pursuant to s. 61(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c.C34 (the “CLPA”).

[2] For the reasons that follow, I would dismiss SSCC’s application with costs.

Facts

[3] The Restrictions were imposed on the SSCC Property pursuant to a 1998 transaction whereby Home Depot acquired the Home Depot Lands from 764703 Ontario Inc. (“764 Ontario”), which at that time was the owner of both the Home Depot Lands and the SSCC Property. A condition of closing of the transaction was that 764 Ontario and Home Depot would enter into an agreement (the “Restrictions Agreement”) which would restrict the permitted uses on the SSCC Property, which 764 Ontario would continue to own, for the benefit of the Home Depot Lands.

[4] The relevant portion of the Restrictions Agreement was a provision prohibiting the sale of various products or product lines on the SSCC Property:

So long as a home improvement centre is operated on the 2871220 Parcel…, no portion of the 764703 Parcel may be used for a home improvement centre or for the sale of lumber, hardware items, plumbing supplies, electrical supplies, lighting fixtures, paint, wallpaper, carpeting, floor coverings, cabinets, siding, ceiling fans, gardening supplies, nursery products, pool supplies, live Christmas trees, decorating supplies, tile, rugs, draperies and window coverings, appliances, home décor and other related items customarily carried by a home improvement centre. 764703 may, however, use or lease or permit the use by the tenants or occupants of portions of the 764703 Parcel for the incidental sale of the product lines noted above. The term “incidental sale” shall mean that each tenant or occupant may utilize no more than five hundred (500) square feet of the portion of the 764703 Parcel it leases or occupies for the sale of any one (1) product line noted above or no more than three thousand (3,000) square feet for the sale of all product lines noted above;

[5] The purpose of the Restrictions was to prevent uses that would compete with Home Depot’s home improvement centre business that was to be established on the SSCC Property. However, the Restrictions do not absolutely prohibit such competitive uses, as the ‘incidental sale’ of the identified product lines is permitted. Incidental sale is defined in terms of the square footage allocated to the product lines in question, both by individual tenants or occupants of the SSCC Property, as well as on the SSCC Property as a whole.

[6] Further, the Restrictions Agreement went on to specify that certain activities or uses that might otherwise conflict with the Restrictions would be permitted. This ‘carve out’ provided that the following uses would be permitted on the SSCC Property:

(i) A retail warehouse or warehouse membership club such as Price Club/Costco;

(ii) A department store with a minimum floor area of 80,000 square feet (such as, by way of example, Zellers, Walmart, K-Mart or Target);

(iii) Grocery stores and supermarkets; and

(iv) Pier I Imports, Bed Bath & Beyond, Bed Bath and More, Sears Whole Home Furniture, Pacific Linens and Future Shop;

so long as the amount of floor area therein devoted to the sale or display of live plants, trees and shrubs shall not exceed five thousand (5,