Court File and Parties
Court File No.: CV-22-1767-00 Date: 2023 05 19 Ontario Superior Court of Justice
Between: Mississauga Hardware Centre Inc., Applicant And: “PROMBANK” INVESTMENT LIMITED, Respondent
Before: André J.
Counsel: N. SANGRAR, for the Applicant K. SCULLION, for the Respondent
Heard: March 20, 2023
Endorsement
André J.
Overview
[1] The Applicant brings an application for “interlocutory and permanent” injunctive relief on account of the Respondent’s company’s (“Prombank”) unilateral decision to shut down a main access to the plaza owned by Prombank where Mississauga Hardware has carried on business for over 30 years. Counsel for Prombank counters that his client’s actions were in full compliance with the leasehold contract between the two parties.
Background Facts
[2] Prombank owns and operates a shopping plaza in the vicinity of Dixie Road and Eglinton Avenue in Mississauga. There are approximately 39 tenants in the plaza, including Mississauga Hardware. A Go Kart company, K1 Speed (“K1”), in the area carries on business on Saturdays. Many patrons of K1 park in the parking lot of Prombank causing significant problems for the other tenants. To limit these problems, Prombank limited the use of the main access to the plaza from Eglinton Avenue. Mississauga Hardware maintains that the decision to do so has adversely affected its business because the barriers have caused its clients to believe that the company was closed.
[3] Mississauga Hardware raised concerns about the barriers with Prombank since June 2022 without any success. It now seeks injunctive relief to force Prombank to remove the barriers which it claims have had a deleterious effect on its business.
Position of Mississauga Hardware
[4] Counsel for the company submits that Prombank has violated the following provisions of their contract:
(a) Breach of the implied covenant for quiet enjoyment of the leased property;
(b) Breach of the doctrine of non-derogation from grant which provides that a grantor, having given a thing or right with one hand cannot take away the means of enjoying it with another; and,
(c) Breach of the contractual obligation of the landlord to act in good faith within the context of the landlord’s abuse of its discretionary powers under the contract. By limiting access to and egress from the Applicant’s business, Prombank has breached its duty to act in good faith.
Prombank’s Position
[5] The company’s counsel submits the following:
(a) Pursuant to the contract executed by both parties, Prombank has the inalienable right to control access and egress to the plaza;
(b) The lowering of the barriers at its Eglinton Avenue access is nothing more than a minor inconvenience to Mississauga Hardware given that it is only done on Saturdays between 10:00 a.m. and 1:00 p.m.;
(c) Mississauga Hardware has failed to advise its clients to simply use the alternate exit from the plaza on Burgoyne Street, and has done nothing to mitigate any perceived loss of business on account of the barriers erected by Prombank; and,
(d) Mississauga Hardware has failed to provide any evidence that it has suffered a loss of business on account of the barriers erected at the plaza’s Eglinton Avenue exit.
Analysis
[6] This application raises the following issue:
- Should Prombank be prohibited from lowering the two sets of barriers it erected in the parking lot of the subject plaza in Mississauga?
The Law
[7] The test for interlocutory injunctive relief is the following three-part inquiry:
(a) Is there a serious issue to be tried?
(b) Would the moving party otherwise suffer irreparable harm; and,
(c) Does the balance of convenience favour granting the injunction? See 1711811 Ontario Ltd. v. Buckley Insurance Brokers Ltd., 2014 ONCA 125, at para. 74.
[8] The test for permanent injunctive relief is noted in Cambie Surgeries Corp. v. British Columbia (Medical Services Commission), 2010 BCCA 396, at para. 28:
In order to obtain final injunctive relief, a party is required to establish its legal rights. The court must then determine whether an injunction is an appropriate remedy. Irreparable harm and balance of convenience are not, per se, relevant to the granting of a final injunction, though some of the evidence that a court would use to evaluate those issues on an interlocutory injunction application might also be considered in evaluating whether the court ought to exercise its discretion to grant final injunctive relief.
[9] See also 1711811 Ontario Limited, at para. 79.
The Contract
[10] The parties signed a commercial contract on August 18, 2020. It defines “common facilities” as follows:
“Common Facilities” means all common areas, facilities and utilities from time to time furnished or designated by the Landlord (as the same from time to time may be altered, reconstructed, reduced or expanded) for the use or benefit in common in such manner as the Landlord may permit, of occupants of premises in the Complex and all others entitled thereto, including, without limiting the generality of the foregoing, all mechanical, sprinklers and electrical equipment and machinery and water, gas, sewage, telephone and other communications facilities and electric power services and utilities not comprised within any leasable premises in the Complex for the exclusive use of such premises, and also including parking areas, access roads, driveways, entrances and exits, sidewalks, ramps, landscaped areas, stairways, passageways, delivery areas, corridors, mechanical and electrical rooms, garbage room and including the roof, exterior weather walls, exterior and interior structural elements and bearing walls in the buildings and improvements of the Complex.
[11] Section 20 provides that:
Control of the Complex
The Landlord has the right, in its exclusive control, management and operation of the Complex, at all times throughout the Term to:
(a) grant, modify and terminate any easements or other agreements representing any use, access, occupancy or maintenance of any part of the Complex or the supply of any services to any part of the Complex;
(b) obstruct, lock up or close off all or any part of the Complex for the purposes of performing any maintenance, repairs, replacements, alterations, additions, improvements or for security purposes or to prevent the accrual of any rights to any person or the public or any dedication thereof;
(c) use or permit to be used any part of the roof of the Building or Complex or any other part of the Common Facilities, from time to time, for any purpose, including merchandising, display, decorations, entertainment, solar panels and structures designed for special features or promotional activities;
(d) make any changes in, additions to, deletions from or relocations of any part of the Complex including the Demised Premises, Building, and any of the Common Facilities (any of which are herein referred to as "Changes'') as the Landlord shall consider desirable, including the construction of additional floors in the Building. If the Landlord makes any Changes to the Demised Premises, including relocation of the Demised Premises, the Landlord shall ensure that the Demised Premises, as affected by such Changes, shall be substantially the same in size and shall be in all other material respects reasonably comparable to the Demised Premises originally demised hereby. If the Demised Premises are relocated as a result of such Changes, the Landlord shall be responsible for the direct cost of moving the Tenant to the relocated Demised Premises and constructing replacement leasehold improvements therein, but not for any indirect costs or losses of the Tenant. The Tenant shall not have the right to object to or make any claim on account of the exercise by the Landlord or any of its rights under this Section 20 (d), except that the Tenant shall be entitled to an abatement of Minimum Rent for any period of time in excess of ten (10) consecutive days that the Tenant is unable to conduct business in the Demised Premises as a result of the making of such Changes. The Landlord shall make any such Changes as expeditiously as is reasonably possible and so as to interfere as little as is reasonably possible with the Tenant' s business on the Demised Premises; and
(e) have portions of the Complex under construction during the Term, and the Tenant acknowledges that portions of the Complex may be under construction during the Term, and that such construction activities may cause temporary noise and disturbance to existing tenants of the Complex. The Landlord will use reasonable efforts to minimize interference with the Tenant's occupation of the Demised Premises as a result of such construction activities but the Tenant acknowledges that in no event shall any noise or other disturbance caused by such construction constitute a breach of the Tenant's right to quiet enjoyment of the Demised Premises.
Analysis
[12] The Applicant’s counsel submits that injunctive relief is justified given Prombank’s:
(a) Breach of the implied covenant for quiet enjoyment of the leased property;
(b) Prombank’s breach of the doctrine of non-derogation from grant; and,
(c) Patent failure to act in good faith.
A. Breach of the Implied Covenant for Quiet Enjoyment of the Leased Property
[13] Counsel for Mississauga Hardware submits that there is an implied covenant for quiet enjoyment given by the landlord to the tenant by virtue of the contract. The covenant ensures that the landlord would not do anything to substantially interfere with the tenant’s enjoyment of the leased property.
[14] Counsel for Mississauga Hardware submits, relying on Caldwell v. Valiant Property Management (1997), 33 O.R. (3d) 187, that Prombank breached its covenant for quiet enjoyment of the demised property because it physically interfered with the enjoyment of the demised property to an extent which exceeded mere interference with the comfort of the property, such as might arise from noise or invasion of privacy.
[15] Counsel for Mississauga Hardware submits that the minimum threshold for a finding that Prombank has breached its covenant for peaceful enjoyment has been met “given that the lowered barriers prohibit physical access to the complex from the Eglinton Avenue driveway.”
[16] Whether or not Prombank has breached its covenant for quiet enjoyment may be based on the facts. Mississauga Hardware maintains that the lowering of the barriers is a permanent fixture and as a result adversely impacts its business. Franca Raco has deposed in affidavits filed in support of Mississauga Hardware, that the barriers have been lowered during normal business hours leading its customers to believe that their retail store is closed. Raco also deposed that the barriers have been lowered at arbitrary and erratic times, including on weekends, prompting patrons to conclude that the entire complex is closed. When the barriers are lowered, the Eglinton Avenue driveway is eliminated.
[17] Nadia Jacyk, the President of Prombank, has deposed in an affidavit dated July 11, 2022, that the gates at the Eglinton Avenue entrance are fully open from 5:00 a.m. to 5:00 p.m., Monday to Friday, and from 5:00 a.m. to 10:00 a.m. on Saturdays. They are closed after 5:00 p.m. on weekdays, and from 10:00 a.m. on Saturdays through to 5:00 a.m. on Monday. Furthermore, the much larger Burgoyne Street entrance remains open 24/7 and “includes two separate points of ingress and egress from the property.” The entrance from Burgoyne Street has a traffic light (unlike the Eglinton Avenue entrance) and “serves as the main entrance to the property.”
[18] Additionally, Ms. Jacyk deposes at para. 29 of her affidavit: that Mississauga Hardware’s business is primarily focused on “building trades and suppliers”, which typically start at 7:00 a.m. and generally end by 4:00 p.m. on weekdays, and much earlier on Saturdays. Ms. Jacyk deposes that the subject gates are open during those times for the trades and suppliers, “who are…familiar with the entry and exit points for the Property.”
[19] Counsel for Mississauga Hardware submits that the company operates until 6:00 p.m. during weekdays and therefore, the lowering of the gates at 5:00 p.m. during weekdays adversely affects its business. I am not persuaded that Prombank’s lowering of the gates at 5:00 p.m. during the week adversely affects the business of Mississauga Hardware. The company’s website, until recently, indicated that its business hours during the week ended at 5:00 p.m. rather than 6:00 p.m. A notice on the company’s front door also indicated a closing time of 5:00 p.m. rather than 6:00 p.m.
[20] Ms. Jacyk deposes that she has observed that Mississauga Hardware was closed by 5:20 p.m. during the week. For these reasons, I cannot conclude that the lowering of the gates at 5:00 p.m. during the week adversely impacted the business of Mississauga Hardware.
[21] If Prombank only lowers the gates or barriers from 10:00 a.m. to 1:00 p.m. on Saturdays, then it cannot be said that the company is interfering with the right to the peaceful enjoyment of the demised premises. However, if the barriers are lowered throughout the week, thereby significantly limiting access to Mississauga Hardware by using the Eglinton Avenue access, that, in my view, would support a conclusion that Prombank has contravened their tenant’s right to the peaceful enjoyment of their leased properties. After all, Mississauga Hardware has been their tenant for three decades. Their clients have accessed their business by using the Eglinton Avenue route. If this access is shut down without notice, then it stands to reason that Mississauga Hardware would be negatively impacted.
B. Prombank’s Breach of the Doctrine of Non-Derogation from Grant
[22] Can Prombank, under s. 20(d) of the contract, make any changes to any part of the complex it considers desirable, even if the section provides that “the tenant shall not have the right to object to or make any claim on account of the exercise by the Landlord or any of its rights under this Section 20 (d)”?
[23] In my view, Prombank has the contractual right to make changes to any part of the Complex, as long as it does not encroach on the right of the tenant to conduct its business without undue or prolonged interference from the landlord. I find that Prombank’s actions, in light of the anticipated parking issues posed by the Go Kart company, to lower the gates between 10:00 a.m. to 1:00 p.m. on Saturdays was reasonable in the circumstances. Mississauga Hardware’s customers could easily use the Burgoyne Street entrance to gain access to its business. Furthermore, the company could have given notice on its website that it was open for business on Saturdays between 10:00 a.m. and 1:00 p.m. The company’s regular customers would clearly have known about the Burgoyne Street entrance to the premises. Indeed, the President of Prombank deposed that Mississauga Hardware is much closer to the Burgoyne Street entrance than the Eglinton Avenue entrance. Given that the lowering of the barriers would cause limited access to the plaza on Saturdays between 10:00 a.m. and 1:00 p.m. to all of Prombank’s 39 tenants, I fail to see how the lowering of the barriers on Saturdays would have made any of Mississauga Hardware’s clients believe that the company was closed at the times indicated.
[24] Additionally, Prombank gave notice to its tenants on December 21, 2021, and April 25, 2022, of the installation of gates to counter the prospect of K1’s customers parking in its plaza. Prombank’s tenants, including Mississauga Hardware, were aware of the potential parking problems posed by K1’s customers and according to Ms. Jacyk’s affidavit, at para. 11, signed a petition voting their opposition to K1. Prombank also posted signs at the property indicating “Private Property”, “Tenant Parking Only”, and “Unauthorized vehicles will be tagged and towed at owner’s expense”. These measures proved ineffective since, as the President of the company deposed in her July 11, 2022, affidavit, towing on private property is not allowed in Mississauga.
[25] In my view, the lowering of the gates on Saturdays during the times indicated, has not constituted a derogation from grant. While the Eglinton access has been available to Mississauga Hardware’s customers for some 30 years, the access has only been restricted for a short period on one business day. The company’s customers have not been fully denied access to Mississauga Hardware. While I acknowledge that Eglinton Avenue is a main throughway, compared to Burgoyne Road, the lowering of the gates, absent other indicators, should not signal to Mississauga Hardware’s customers that the company was closed. Indeed, other indicators, such as a car parked in the plaza’s parking lot, or persons walking to and from the business in the plaza, would indicate to anyone seeking to enter the plaza that the businesses within it were open for business.
C. Did Prombank Fail to Act in Good Faith by Installing the Barriers?
[26] Based on the facts of this matter, I cannot conclude that they did. First, Prombank told its tenants about the potential problem in 2021. Second, Prombank commissioned a study to determine, among other things, whether the excess parking demand posed by K1 would spill over to its premises. The study indicated that there would be a deficiency of at least 79 parking spaces for K1, which would cause a spillover on Prombank’s property.
[27] The lowering of the gates after 5:00 p.m. during weekdays and between 10:00 a.m. to 1:00 p.m. on Saturdays was a measured response to the potential parking problems posed by K1. To that extent, I cannot find that Prombank failed to act in good faith.
[28] I decline to grant interlocutory relief in this matter based on the reasons indicated above. There is no serious issue to be tried, neither would Mississauga Hardware suffer irreparable harm if interlocutory relief is not granted. Finally, the balance of convenience does not, in my view, favour granting the injunction.
Conclusion
[29] The application is dismissed. If the parties cannot agree on the amount of costs that are fair and reasonable, they shall file written submissions on costs, no longer than three (3) pages, within fifteen (15) days of today’s date.
André J. Released: May 19, 2023