Court File and Parties

COURT FILE NO.: CV-22-00680874-0000

DATE: 20220516

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BARRY’S BOOTCAMP CANADA INC.

AND:

100 BLOOR STREET WEST CORPORATION

BEFORE: VERMETTE J.

COUNSEL: Mark Dunn, Joe Latham and Kirby Cohen, for the Plaintiff

Howard Wolch, for the Defendant

HEARD: May 16, 2022

ENDORSEMENT

[1] The Plaintiff seeks an interlocutory injunction restraining, enjoining and prohibiting the Defendant or anyone acting on its behalf or under its instruction from exercising or purporting to exercise any right to re-enter the premises leased by the Plaintiff from the Defendant until the hearing of a related Application brought by the Defendant which raises the same substantive issues as the Plaintiff’s action.

[2] The Plaintiff’s motion initially sought an interim injunction pending the hearing of a motion for an interlocutory injunction in the action commenced by the Plaintiff. However, the parties confirmed at the beginning of the hearing that there was no need for a further motion for an interlocutory injunction and that it was now their preference to have the substantive issues decided in a timely fashion in the context of the Application commenced by the Defendant. As a result, the relief sought before me today was the relief set out in the preceding paragraph. There was agreement that the same test applied to both an interim injunction and an interlocutory injunction.

[3] In my view, the test for an interlocutory injunction is met in this case. The Plaintiff’s motion is granted.

FACTUAL BACKGROUND

[4] The Plaintiff operates a fitness studio in Toronto in premises located in the Yorkville neighbourhood (“Premises”). The Plaintiff leases the Premises from the Defendant pursuant to a lease dated March 14, 2018 (“Lease”).

[5] A dispute has arisen between the parties regarding the share of realty taxes that is properly payable by the Plaintiff under the Lease. While the Plaintiff has been paying a certain amount every month on account of realty taxes, the Defendant’s position is that the Plaintiff is not paying the full amount that it is responsible to pay under the Lease and that it is in default. According to the Defendant, the arrears owed by the Plaintiff exceed $1 million.

[6] On April 26, 2022, the Defendant delivered a “Notice of Default In Payment of Rent Under Lease” to the Plaintiff. This Notice of Default stated that the Plaintiff owed $984,507.95 to the Defendant. The Notice of Default imposed a deadline of May 3, 2022 at 5:00 p.m., i.e. one week later, for the Plaintiff to pay all specified amounts, and stated that if the amounts were not paid, the Defendant would exercise such remedies, under the Lease and otherwise, as the Defendant may determine.

[7] In the evening of May 5, 2022, the Defendant attempted to re-enter the Premises. However, it was unsuccessful as a security guard hired by the Plaintiff refused its bailiff entry.

[8] The Plaintiff issued a Notice of Action on May 9, 2022 and simultaneously brought this motion. The Defendant’s Notice of Application was issued on May 10, 2022.

APPLICABLE TEST

[9] RJR — MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311 (“RJR”) sets out a three-part test for determining whether a court should exercise its discretion to grant an interlocutory injunction: (1) is there a serious issue to be tried; (2) would the person applying for the injunction suffer irreparable harm if the injunction were not granted; and (3) is the balance of convenience in favour of granting the interlocutory injunction or denying it (“RJR Test”). The fundamental question is whether the granting of an injunction is just and equitable in all of the circumstances of the case. This will necessarily be context-specific. See Google Inc. v. Equustek Solutions Inc., 2017 SCC 34 at para. 25.

[10] The RJR Test is a general framework and, in some circumstances, a modified test applies. For instance, where a mandatory interlocutory injunction is sought, the appropriate inquiry at the first stage of the RJR Test is whether the applicant has shown a strong prima facie case: see R. v. Canadian Broadcasting Corp., 2018 SCC 5 at para. 13.

[11] The Defendant argues that the first step of the RJR Test in this case should be whether the Plaintiff has shown a strong prima facie case instead of the lower threshold of a serious issue to be tried. The Defendant relies on case law that states that the strong prima facie case standard applies to cases involving questions of contractual interpretation because such questions are questions of law: see, e.g., Global Knowledge Network (Canada) Inc. v. ESI International Inc., 2009 CanLII 72335 at para. 11. In RJR, the Supreme Court of Canada identified two exceptions which called for a more extensive review of the merits, including cases where the question in issue was a simple question of law alone: see RJR at 339.

[12] However, the cases relied upon by the Defendant precede the decision of the Supreme Court of Canada in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53. In that case, the Supreme Court held that contractual interpretation involves issues of mixed fact and law, and stated that the historical approach according to which determining the legal rights and obligations of the parties under a written contract was considered a question of law should be abandoned.

[13] Thus, I find that the first step of the test applicable in this case is whether there is a serious issue to be tried.

APPLICATION TO THIS CASE

[14] In my view, the three prongs of the RJR Test are met in this case, and the granting of an injunction is just and equitable in all of the circumstances of the case.

[15] I find that the low threshold of a serious issue to be tried is met. The Plaintiff has raised serious questions as to the Plaintiff’s contractual rights, including: (1) whether the Defendant has complied with the payment terms in the Lease; (2) whether the Defendant agreed that the issue of the quantum of realty taxes was going to be resolved after the completion of a tax appeal before the Assessment Review Board and receipt of a tax refund from the City of Toronto; and (3) whether the Defendant’s determination of the share of realty taxes payable by the Plaintiff is reasonable and in accordance with the terms of the Lease.

[16] None of these issues are vexatious or frivolous. They are all supported by some evidence and/or defensible arguments based on the language of the Lease. There are serious issues of contractual interpretation raised with respect to the Lease.

[17] I also find that if the interlocutory injunction is not granted, the Plaintiff will suffer irreparable harm. In this regard, I accept the evidence of Laurie Campbell, the Plaintiff’s Vice-President, which is cogent and has not been contradicted by any other evidence. Given the business model of the Plaintiff, I am satisfied that if the Plaintiff is locked out of the Premises by the Defendant, it will suffer harm to its business and reputation that would be extremely difficult to measure and could not be satisfactorily quantified in monetary terms. This is especially the case given the critical juncture at which the Plaintiff is operating after reopening in February 2022, and its efforts to return to pre-pandemic business levels.

[18] The balance of convenience also favours the Plaintiff. Any harm that would be suffered by the Defendant pales in comparison to the harm that would be suffered by the Plaintiff. Further, the Defendant failed to take any steps for two years.

[19] I find no basis to order the Plaintiff to pay the entire amount in issue in Court pending the hearing of the Application, as requested by the Defendant. The Plaintiff has provided an undertaking as to damages and it has not been argued that the undertaking is somehow defective or insufficient.

CONCLUSION

[20] Accordingly, the Plaintiff’s motion for an interlocutory injunction is granted.

[21] If costs cannot be agreed upon, the Plaintiff shall deliver submissions of not more than three pages (double-spaced), excluding the costs outline, within 14 days of the date of this decision. The Defendant shall deliver its responding submissions (with the same page limit) within 14 days of his receipt of the Plaintiff’s submissions. The submissions of all parties shall also be sent to my assistant by e-mail.

[22] As discussed at the end of the hearing, a case conference will be held before me on May 25, 2022 at 9 a.m. for the purpose of discussing the scheduling of the Defendant’s Application. My assistant will send the necessary information for the case conference to counsel by e-mail. I ask that counsel share this information with BBC Holdings, LLC, a Respondent in the Application.

Vermette J.

Date: May 16, 2022