Ontario Superior Court of Justice

Court File No.: CV-23-1423
Date: 2025-04-08

Between

Danica Schindler
Applicant
Ryan Sadler, for the Applicant

-and-

DFIV Corp.
Respondent
Bruce Robertson, for the Respondent

Heard: 2025-02-26

Ruling on Motion

Wilkinson

Introduction

[1] There are two applications before me. The first, brought by Danica Schindler (“the Landlord”), alleges that DFIV Corp. (“the Tenant”) has breached the terms of its commercial lease. The Landlord seeks to terminate the lease based on the alleged default by the Tenant, and to retake possession of the premises. In addition, the Landlord seeks to dismiss the application brought by the Tenant under court file number CV-24-897.

[2] The Landlord alleges that the Tenant breached the lease dated June 15, 2020, by:

i) improperly using the basement of the building to house equipment when the basement is not included in the lease agreement;
ii) improperly installing heat pumps on the exterior of the building without the Landlord’s consent; and
iii) causing a nuisance to the other tenant in the building when it turned off the air conditioning to the other tenant’s living space.

[3] The second application, brought by the Tenant DFIV Corp., seeks a declaration that the Landlord breached the terms of the lease by:

i) misrepresenting that the basement was included in the leased premises;
ii) restricting the Tenant’s access to the basement; and
iii) breaching her obligation to provide the Tenant with quiet enjoyment of the land.

[4] The Tenant’s application also sought damages resulting from the Landlord’s alleged breaches, and damages for defamation. Counsel for the Landlord advised that issues relating to the claimed “monetary breaches” of the lease have been resolved. Therefore, only the “non-monetary” breaches were addressed on these applications. The issues to be determined are:

i) Is the basement included in the area being leased by the Tenant?
ii) Did either party breach the terms of the lease?
iii) If the Tenant breached the lease, is the Landlord entitled to terminate the lease and retake possession of the leased premises?

[5] For the reasons that follow, I find that the basement is not included in the area being leased by the Tenant. I further find that the Tenant has breached the terms of the lease and is in default of its obligations under the lease. Accordingly, the Landlord is entitled to terminate the lease and retake possession of the leased premises.

Background

[6] The Landlord owns a property located at 329 Lakeshore Road East in Mississauga, Ontario. There are two tenants in the building. There is a residential tenant in the upstairs section of the building, who has lived at the property for fifteen years. The first floor of the building is leased by the Tenant, where it operates a Pizza Hut restaurant.

[7] The initial lease was signed by the parties on June 15, 2020, setting out a ten-year tenancy agreement commencing on July 15, 2020, with additional options to renew in three five-year increments. As the Tenant was required to conduct renovations to permit the property to be rezoned for commercial use, the Landlord agreed to not charge rent for approximately eight months after the lease was signed. The restaurant opened in June 2021.

[8] The Landlord submits that the Tenant breached the lease during the course of the renovations, including use of the basement, which the Landlord says was not included in the leased area. The Tenant maintains that the Landlord orally confirmed that use of the basement was included in the lease, and that use of the basement was an implied term of the lease. The Tenant further submits that the Landlord provided consent for the installation of equipment in the basement when the Landlord signed the paperwork authorizing the City of Mississauga to rezone the leased premises into a restaurant.

[9] The basement can only be accessed through a door inside the Pizza Hut restaurant. The Tenant installed grease traps in the basement, along with an electrical panel, and two refrigeration units. The Tenant also placed a modem for the restaurant in the basement. The Tenant paid for all the expenses relating to the renovations.

[10] Shortly after the restaurant opened in June 2021, the temperatures were very hot, and the air conditioning was not working properly in the building. The lease required the Landlord to ensure that the HVAC system was in proper working order at the commencement of the lease, and that the Tenant was responsible for maintenance of the HVAC equipment once the lease started. The Landlord states that the air conditioning was working well before the renovations were started, and that the Tenant damaged and disabled the air ducts to the upstairs residential unit, which was a breach of the lease. The Tenant does not deny turning off the air conditioning to the residential tenant’s unit.

[11] The Tenant provides affidavit evidence that employees of the air conditioning company that examined the air conditioning unit stated that it was old and too small for the building and had to be replaced.

[12] The Tenant provides affidavit evidence that it did not receive a satisfactory response from the Landlord regarding the excessive heat in the restaurant. On July 6, 2021, the Tenant sent an email to the Landlord’s daughter, Ellie, stating that it would be looking for other solutions to address the air conditioning problem, and that it would no longer be using the air conditioning and furnace within the unit. The email did not mention installing heat pumps on the exterior of the building.

[13] Ellie Schindler responded to the Tenant by email on July 7, 2021, stating that the open pizza ovens were contributing to the high temperatures within the restaurant. The email also asks the Tenant to obtain consent from the Landlord before taking any action to modify the air conditioning units. On July 8, 2021, Ellie Schindler once again reminded the Tenant by email that any changes to the air conditioning units must be approved by the Landlord.

[14] On July 8, 2021, the Tenant installed heat pumps and a ductless air conditioner on the exterior of the building. These appliances are connected to the electrical panel the Tenant placed in the basement. The Tenant therefore no longer uses the HVAC system that was originally in the building.

[15] The Landlord states that the Tenant did not obtain consent from her prior to taking this action, and that it is a breach of the lease to have installed the appliances on the exterior of the building, and to have used the basement for any purpose.

[16] On October 22, 2021, the Landlord’s lawyer wrote to the Tenant demanding that the items be removed from the basement, or alternatively, that the Tenant pay an additional $2,000 per month to lease the basement.

[17] On November 11, 2021, the Landlord hand-delivered two Notice(s) to Tenant of Breach of Covenant to the Tenant. The first notice related to nuisance claims with respect to turning off the air conditioning for the second-floor residential tenant. The Notice confirmed that the default can be remedied by restoring electricity to the second-floor residential tenant by November 19, 2021. The Notice also stated that if the Tenant failed to remedy the breach by the deadline, the Landlord intended to proceed with remedies under the lease.

[18] The second Notice related to the alleged unauthorized installation of any plant, equipment, machinery or apparatus upon or near the Property without the Landlord’s consent under s. 30 of the lease, and further, that the lease specifies that the leasable area is limited to the 950 square feet set out in s. 1(e) of the lease. The Landlord states that it objected to the Tenant placing a grease trap system and two refrigeration units in the basement of the premises without the consent of the Landlord contrary to s.1(e) of the lease.

[19] The second Notice referenced s.30(c) of the lease, instead of s.30(f) of the lease, which could potentially have created some confusion for the Tenant. Section 30(c) permits the Tenant to change the amount of heat or power normally used on the premises. Section 30(f) permits the Tenant to conduct renovations that includes installing any plant, equipment, machinery or apparatus, but specifies that such action requires the Landlord's prior consent.

[20] However, the Landlord included specific language in the remedy section of the Notice to inform the Tenant that it objected to the placement of equipment in the basement. I therefore find that the content of the second Notice sufficiently notified the Tenant of the breach of the lease, and gave the Tenant an opportunity to rectify the breach. Specifically, it stated that the Tenant must remove the equipment, machinery or apparatus from the basement by November 19, 2021, or sign a lease for the basement at a rental rate of $2,000 plus HST. The Notice also referred to s.19(2) of the Commercial Tenancies Act, RSO 1990, c L.7, and stated that if the Tenant did not remedy the breach by the deadline, the Landlord intended to proceed with its remedies.

[21] Although not specifically stated in either notice, the Landlord also takes the position that the installation of heat pumps on the exterior of the building contravened s. 30(f) of the lease, as the Landlord’s consent was not obtained prior to installation.

[22] Section 23 of the lease grants the Landlord the immediate right to re-enter the premises if the Tenant fails to perform any of the terms, conditions, or covenants of the lease, and may remove all persons and property from the leased premises.

[23] On December 7, 2021, the Landlord placed a lock on the door leading to the basement where the Tenant kept their electrical panel, modem, grease trap, and refrigeration units. When the Tenant needed to access any of these items in the basement, they were required to make prior arrangements with the Landlord, which the Tenant claims was a breach of its right to quiet enjoyment of the leased premises. The Landlord eventually chose to keep the door unlocked.

[24] The Tenant has paid its rent consistently throughout the time it has leased the premises from the Landlord but has not paid any additional rental fee for use of the basement.

[25] The Landlord delivered a vacant possession notice to the Tenant on February 5, 2025, requiring it to deliver vacant possession of the premises by February 14, 2025.

[26] The Tenant remains in possession of the premises at this time.

Position of the Applicant Landlord, Ms. Schindler

[27] The Landlord submits that the basement was not included in the lease agreement between the parties. The written lease does not include the basement, and the Landlord states in her affidavit and at her cross-examination that she never told the Tenant that the basement would be included in the lease. In addition, the Landlord deposes that she never gave the Tenant authorization to enter the basement, or to install equipment in the basement.

[28] The lease defines the premises as “the retail store at 329 Lakeshore Road East, Mississauga, Ontario L5G 1H3 and comprises a Leasable Area of 950 square feet”. The Landlord takes the position that as the first floor where the restaurant is located is 950 square feet, use of the basement would involve additional square footage not set out in the lease. The Landlord gave evidence at her cross-examination that the basement was a little larger than the upstairs area being rented by the Tenant.

[29] The Landlord submits that she agreed to allow the Tenant to renovate the rented premises according to city permit requirements, but that she was not aware that use of the basement would be required. She argues that although her signature is on the authorization document for the committee of adjustments for the City relating to the renovations, the document itself contains no drawings or plans, or any information regarding use of the basement.

[30] Both the Landlord and her daughter provided evidence during their cross-examinations that at the time the Tenant moved into the premises, the HVAC system was in good working order. The Landlord also argues that the Tenant examined the existing HVAC system prior to signing the lease.

[31] The Landlord takes the position that when the Tenant disconnected the furnace from the second-floor residential tenant, and refused to re-connect the furnace, or re-wire the electrical wiring, it breached s. 30(c) of the lease, which permitted it to renovate the Property by changing the amount of heat or power normally used on the premises, as well as installing additional electrical wiring or heating units. The Landlord also points to s. 17 of the lease, which states that the Tenant is responsible for all repair and maintenance of heating, cooling, ventilation and air conditioning equipment.

[32] The Landlord also states that her consent was required before the Tenant installed any equipment in or on the building under s. 30(f) of the lease, and that she did not consent to items being placed in the basement or the placement of heat pumps on the exterior of the building.

[33] The Landlord takes the position that the Tenant could have remedied the defaults under the lease by restoring electricity to the furnace for the second-floor residential tenant and removing the equipment it placed in the basement, or by signing an additional lease with respect to the basement space. The Landlord also argues that the Tenant breached s.36 of the lease by creating a nuisance for the upstairs Tenant by disabling the air ducts to the upstairs residential unit, and by turning off the electricity to the furnace which turned off the air conditioning to the upstairs unit.

[34] The Landlord also submits that s. 17 of the lease states that the Tenant is responsible for the “repair and maintenance of heating, cooling, ventilation and air conditioning equipment” at the premises.

[35] The Landlord points out that the Tenant admitted to installing heat pumps on the exterior wall of the building without her consent.

[36] The Landlord submits that the breaches have continued to this day, and that the Tenant has not taken steps to remedy the breaches.

Position of the Respondent Tenant, DFIV Corp.

[37] The Tenant takes the position that it has not breached the lease agreement, and that use of the basement is an implied term of the lease. The Tenant submits that the lease does not specifically exclude the basement or access to the basement.

[38] The sole director of the Tenant DFIV Corp., Adedolapo Monsurat Balogun, provides affidavit evidence that the Landlord verbally agreed that the basement would be included in the space to be rented. Ms. Balogun also stated at her cross-examination that when she met with the Landlord to view the proposed rental space, she was told that the basement was included in the lease.

[39] The Tenant points to s. 17 of the lease, which requires the Tenant to maintain its HVAC equipment, and argues that it requires access to the electrical panel in the basement to maintain the HVAC system. The Tenant therefore argues that the Landlord ought to have known and understood that the lease included access to the basement.

[40] Ms. Balogun also provides affidavit evidence that the Landlord gave her access to the basement with a set of keys that included a key to the basement.

[41] The Tenant also submits that the Landlord’s daughter, Ellie, attended at the unit during the renovations in June 2021, and took photographs of all the renovations to show the Landlord, and that the Landlord did not object to the work being done.

[42] The Tenant submits that the actions of the parties throughout the renovation period, and for the first six months of the lease, support that use of the basement was an implied term of the lease. The Tenant regularly used the basement from the beginning of the lease period until a lock was placed on the door to the basement in December 2021. The Tenant argues that the lock on the door to the basement impaired the Tenant’s ability to have quiet possession of the premises, as it could not access its equipment downstairs without assistance from the Landlord. The evidence presented confirms that at present the door to the basement is no longer locked.

[43] Ms. Balogun also states in her affidavit that the Landlord told her that the electrical meter would be for the Tenant’s use only and was not to be shared with the residential tenant. As well, Ms. Balogun states that the Landlord told her that the air conditioning unit was for the restaurant only, and that the upstairs tenant did not have air conditioning included in his lease.

[44] Section 17 of the lease requires the Landlord to ensure that the HVAC unit was in correct working order. The Tenant submits that the Landlord breached the lease agreement by failing to provide an air conditioning unit that was in good working order, by failing to adequately address issues with the air conditioning in the leased space, and by denying the Tenant access to the basement.

[45] Ms. Balogun also stated in her affidavit and at her cross-examination that when she asked the Landlord to repair or replace the air conditioning unit, the Landlord told Ms. Balogun to never call her again, and hung up the telephone. The Tenant submits that it was therefore forced to install ductless air conditioning and heat pumps on the outside of the building, which are connected to the electrical panel in the basement.

[46] The Tenant also argues that the City of Mississauga expressly requested that the Tenant’s equipment be stored in the basement, and that the grease trap and electrical meter be placed in an electrical and mechanical room. The Tenant further submits that the Landlord consented to this use of the basement when she signed the authorization for the City of Mississauga. The Tenant also submits that s. 30 of the lease provides for these items to be stored in the basement.

The Law

[47] Section 74 of the Commercial Tenancies Act, RSO 1990, c L.7 provides that a landlord may make an application to the Superior Court for an order terminating the lease and for returning possession of the leased premises to the landlord if it is determined that a tenant is in wrongful possession of the premises.

[48] A party may proceed by application even if there are material facts in dispute: Martineau Holdings v. Caudle et al., 2023 ONSC 358, para 36.

[49] Section 19 of the Commercial Tenancies Act states that a landlord’s right of re-entry to the leased property is not enforceable by an application unless the landlord serves a notice on the tenant specifying the details of any breaches under the lease, and requiring the tenant to remedy the breach if the breach is capable of remedy, and requiring the tenant to compensate the landlord financially for the breach.

[50] The court should decline to exercise its discretion to grant relief from forfeiture under s. 20 of the Commercial Tenancies Act if a tenant has been given appropriate notice of a breach under the lease, and a full opportunity to rectify the lease, but nevertheless continues to perpetuate the same type of conduct such that the breach of the lease is persistent and substantial: Martineau at para. 39, citing 931576 Ontario Inc. v. Bramalea Properties Inc., [1992] O.J. No. 808.

[51] When considering the equitable remedy of relief from forfeiture, the Court must consider and balance the conduct of the tenant, the gravity of the breaches, and the disparity between the value of the property forfeited and the damaged caused by the breach. The equitable remedy of relief from forfeiture will not be available to a tenant in circumstances where the default of the lease agreement is as a result of the tenant’s own deliberate acts: 1874223 Ontario Inc. v. Hummingbird Timber Solutions Inc., 2022 ONSC 6403, para 9.

[52] The fact that a landlord accepts a rental payment after the Notices of Default and Notice of Termination was issued due to a tenant’s default under the lease does not establish that a landlord has waived the default: Hummingbird Timber, at para. 5, citing 1383421 Ontario Inc. v. Ole Miss Place Inc., para 79.

[53] A contractual term may be implied on the basis of the presumed intentions of the parties where necessary to give business efficacy to the contract or where it meets the “officious bystander test”: Energy Fundamentals Group Inc. v. Veresen Inc., 2015 ONCA 514, para 30, referring to M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd..

[54] The officious bystander test was articulated in Shirlaw v. Southern Foundries (1926) Ltd., [1939] 2 K.B. 206 (Eng. C.A.) at 227, [1939] 2 All E.R. 113 at 124, referenced in Veresen, at para. 31:

Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying. Thus, if while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, they would testily suppress him with a common: “Oh, of course.”

[55] The law desires to give such business efficacy to the transaction as must have been intended at all events by both parties: Veresen, at para. 32. The business efficacy test has been described as considering what the contract would have meant to a reasonable person who had knowledge of the relevant background, and considering if an interpretation of the contract would frustrate the apparent business purpose of the parties: Veresen, at para. 34, referring to Attorney General of Belize & Ors v. Belize Telecom Ltd. & Anor, [2009] UKPC 10, [2009] 2 All E.R. 1127 (Eng. P.C.), at para. 22.

[56] Implication of a contractual term does not require a finding that a party actually thought about a term or expressly agreed to it. Often terms are implied to fill gaps to which the parties did not turn their minds: Veresen, at para. 35.

[57] A court will not imply a term that contradicts the express language of the contract or is unreasonable: Veresen, at para. 36, referring to G. Ford Homes Ltd. v. Draft Masonry (York) Co..

[58] The analysis of whether to imply a term must be done on an objective basis but having regard to the specific parties and specific contractual context: Veresen, at para. 38.

[59] To constitute a breach of the covenant for quiet enjoyment, the tenant’s ordinary and lawful enjoyment of the premises must be substantially interfered with by the acts of the landlord: Harvey M. Haber and Kenneth A. Beallor, Landlord’s Rights and Remedies in a Commercial Lease, 2nd ed. (Toronto: Thomson Reuters, 2017), at pp. 369-370.

Analysis

Issue #1 - Is the basement included in the area being leased by the Tenant?

[60] Ms. Balogun gives affidavit evidence that the Landlord told her that the basement was included in the lease. The Landlord provides affidavit evidence that she never told the Tenant that the basement was included in the lease. Although the parties were cross-examined, I cannot determine which party is more credible regarding this issue on the basis of the paper record before me. Even if I had the benefit of hearing the oral evidence of both parties, the lease itself is the primary document to consider when determining if use of the basement was included in the agreement.

[61] The lease says nothing about the basement being included. In addition, the lease states that the Tenant was renting 950 square feet, which is the area of the first floor where the Tenant operates its Pizza Hut business. The Tenant takes the position that as the basement was unfinished, its inclusion in the lease agreement is an implied term of the lease. I disagree for the following reasons:

a) Ms. Balogun testified that she owned two other Pizza Hut franchises at the time that the Tenant entered into the lease with the Landlord. Ms. Balogun stated at her cross-examination that she provided one of her other Pizza Hut leases to the Landlord to use as a precedent, to be modified by the Landlord prior to being signed by the parties. If access to the basement was essential to the Tenant’s ability to lease the premises, the Tenant ought to have specifically addressed that issue with the Landlord and made provisions in the lease to ensure that the basement was specifically included in the area to be leased.

b) The fact that the Landlord’s daughter took pictures of the leased premises after the renovations were completed does not establish that the basement was included in the lease. Even if the Landlord was aware that the Tenant was storing equipment in the basement, the fact the Landlord did not immediately insist that the equipment be removed from the basement does not entitle the Tenant to continued use of the basement indefinitely, nor does it establish that the Landlord had granted permission to store items in the basement as required under section 30(f) in the lease.

c) The parties agree that access to the basement is only available through a door in the area leased by the Tenant, and that the original furnace that the Tenant was required to maintain under s. 17 of the lease is located in the basement. However, the fact that the lease agreement allowed access to the basement specifically to maintain the furnace does not mean that the Tenant had the right to use the basement for whatever purpose it desired, including housing equipment or storage purposes.

d) Under the lease, the Tenant needed to have access to the basement to maintain the HVAC equipment. That maintenance could have been achieved even if the basement door was locked by making arrangements with the Landlord to open the door. The presence of the HVAC system in the basement does not automatically entitle the Tenant to treat the basement as an extension of the leased premises.

[62] The fact that the Landlord allowed the Tenant access to the basement from the start of the lease for some six months until December 2021 does not mean that the Landlord was changing the terms of the lease. The Landlord’s choice to delay denying a tenant access to areas of the premises not included in a lease for a period of time does not establish that the Tenant has an unfettered right to access areas not included in the lease.

[63] I also reject the Tenant’s argument that the Landlord consented to the Tenant being able to store equipment in the basement when it signed the consent required in the permitting process. This consent form does not include any floor plans, or indication on its face that equipment was going to be installed in the basement by the Tenant. The fact that the Landlord signed this document does not establish that the Landlord agreed to allow the Tenant to place equipment in the basement.

[64] The Tenant argues that the City of Mississauga expressly requested that the Tenant’s equipment be stored in the basement as part of the rezoning process. I do not have evidence before me of the alleged requirement from the City of Mississauga, nor is there evidence before me as to why the additional equipment was required to be stored in the basement, as opposed to elsewhere in the leased space.

[65] I find that prior to signing the lease, it was the Tenant’s responsibility to ensure that the premises that it was choosing to lease had sufficient facilities for its purposes, and that if it required space in the basement to place equipment or other items, it ought to have ensured that this provision was specifically identified in the lease.

[66] As was found in Hummingbird Timber, the fact that the Landlord has continued to receive rental payments from the Tenant despite the ongoing breaches does not remove the Landlord’s right to enforce its right of re-entry and possession set out in s. 23 of the lease agreement.

[67] Having reviewed the lease and considered the evidence of the parties, I find that the lease between the parties does not include the basement area. I also find that use of the basement by the Tenant in addition to the 950 square feet specified in the lease does not pass the officious bystander test to establish that use of the basement was an implied term of the lease. It was not something so obvious as to be clearly intended by the parties at the time the agreement was signed.

Issue #2 – Did either party breach the lease?

Use of the basement by the Tenant

[68] The Tenant argues that in s. 30 of the lease, the Landlord agreed to allow the Tenant to make whatever renovations were necessary to complete the rezoning process. The Tenant made no argument as to what specific subsection of s. 30 it is relying upon when it argues it was permitted it to utilize the basement for the renovations. However, s. 30(f) specifically states:

30. The Landlord allows the tenant to renovate the leased unit in-line with Pizza Hut head office and city permit requirements, this may include but not limited to:
    (f) installing or affixing upon or near the Premises any plant, equipment, machinery or apparatus. This will require the Landlord’s prior consent.

[Emphasis added.]

[69] I accept the Landlord’s evidence that the Tenant did not advise her that it would need to place grease traps, refrigeration units, or any other materials in the basement. I therefore find that the Tenant did not secure the consent of the Landlord to place these materials in the basement, and that its decision to do so breached s. 30 of the lease.

Impact of the Landlord locking the door to the basement

[70] The fact that the Tenant was for required for a period of time to pre-arrange a time to have the Landlord unlock the to the basement to access the equipment that it is required to maintain under the lease was no doubt inconvenient. However, I do not find that this inconvenience rises to the level of the Landlord interfering with the Tenant’s quiet enjoyment of the leased property. I therefore find that the Landlord did not breach the lease when it placed a lock on the basement door.

Did the Landlord Breach the Lease by not providing a properly working HVAC system?

[71] On behalf of the Tenant, Ms. Balogun states in her affidavit that two air conditioning repair workers told her that the HVAC was not in working order, but there are no statements in the evidence before me from HVAC repair workers confirming this was the case. This evidence from Ms. Balogun is hearsay and will not be considered by me.

[72] There is no expert evidence before me regarding the state of the HVAC system at the commencement of the lease. I accept the evidence of the Landlord and her daughter that there had not been any previous issues with maintaining proper air conditioning in the building prior the commencement of Pizza Hut’s lease. I also accept the Landlord’s evidence that the upstairs residential tenant has lived there for fifteen years, and never complained about air conditioning issues until the Pizza Hut began operating on the first floor.

[73] The available evidence suggests that the air conditioning unit in place at the leased premises was inadequate to handle the increased temperatures generated by the pizza ovens and fryers in the restaurant. The question is, whose responsibility was it to ensure that the air conditioner in place had the capacity to cool both the restaurant and the residential unit upstairs?

[74] In my view, it was ultimately the Tenant’s responsibility to ensure that the HVAC system in place at the premises was large and powerful enough to handle the increased heat generated through the operation of cooking equipment. I accept the Landlord’s evidence that she had not previously rented the property to a restaurant, and was not familiar with the equipment required by the Tenant.

[75] The Tenant ought to have known the extent of power and heat that could be generated by its equipment, and made appropriate arrangements for an adequate HVAC system to accommodate the increased demand. Section 17 of the lease requires the tenant to maintain and repair the HVAC system. Section 30(c) of the lease requires the Tenant to change the amount of heat or power used on the premises, and to install additional electrical wiring or heating units. This responsibility fell to the Tenant, not the Landlord. Once it was discovered that the existing air conditioner was not capable of cooling the building, the Tenant breached s. 36 of the lease by creating a nuisance for the upstairs residential tenant by turning off his air conditioning.

[76] When the Tenant was not satisfied with the Landlord’s efforts to address the air conditioning issue, Ms. Balogun sent an email to the Landlord’s daughter on July 6, 2021, stating that the Tenant would be looking for other solutions to address the air conditioning problem, and that they would no longer be using the air conditioning and furnace within the unit. The email did not mention installing heat pumps on the exterior of the building. The Landlord’s daughter specifically asked the Tenant to obtain approval before making changes to the air conditioning units.

[77] On behalf of the Tenant, Ms. Balogun admits that the Tenant then installed heat pumps on the exterior of the building without the consent of the Landlord. Although the evidence suggests that the Landlord may have been slow to fully address the Tenant’s legitimate concerns about the air conditioning, that circumstance does not entitle the Tenant to ignore the terms of the lease. I therefore find that the Tenant’s decision to install heat pumps on the exterior of the building without the consent of the Landlord was a breach of s. 30(f) of the lease.

Issue #3 - If the Tenant breached the lease, is the Landlord entitled to terminate the lease and retake possession of the leased premises?

[78] The Tenant made no submissions as to relief from forfeiture as an alternate remedy for the Landlord if I find that the Tenant has breached the lease, nor was this issue raised in the Tenant’s factum. In addition, I was not provided with any pleadings from the Tenant in which relief from forfeiture was pleaded.

[79] The Landlord has provided sufficient evidence to establish that the Tenant has breached the terms of the lease. It is not in dispute that the Tenant installed grease traps, a refrigeration unit and other items in the basement; installed heat pumps on the exterior of the building; and turned off the air conditioning to the residential tenant’s unit — all breaches of the lease. I find that the Landlord properly served the Tenant with two Notices to Tenant of Breach of Covenant. These notices entitle the Landlord under s. 19(2) of the Commercial Tenancies Act to enforce its right of re-entry as described in s. 23 of the lease, resulting in a termination of the lease.

Conclusion

[80] The Tenant breached s. 30 of the lease when, without the consent of the Landlord, it chose to place equipment and other items in the basement of the leased premises, and when it placed heating pumps on the exterior of the building. The Tenant breached s. 36 of the lease when it turned off the air conditioning for the residential tenant in the leased premises, thereby creating a nuisance.

[81] The Tenant has failed to establish that the Landlord breached the terms of the lease, that she misrepresented the leased premises, that she continues to improperly restrict the access of the Tenant to the premises, or that she is in breach of her obligation to provide the Tenant with quiet enjoyment of the land.

[82] I therefore make the following orders:

i) The Tenant has breached ss. 30 and 36 of the lease and has therefore defaulted under the lease.
ii) The Landlord is entitled to re-take possession of the premises effective as of April 17, 2025.
iii) The Landlord has not breached the terms of the lease. Application CV-24-897 filed by the Tenant is dismissed.
iv) The Landlord’s motion for an order for special damages created by any costs incurred for removing the Tenant’s equipment and repairing property damage is adjourned sine die to be returned before me, pending the removal of the Tenant’s property should that action become necessary.

Costs

[83] The parties are encouraged to agree upon costs. In the event that the parties are unable to resolve the issue of costs, the Landlord may prepare a cost submission by April 17, 2025. The Tenant may prepare a responding cost submission by April 25, 2025. All submissions shall be double-spaced, and no longer than three pages, not including Bills of Costs or Offers to Settle. Cost submissions may be submitted to scj.csj.general.brampton@ontario.ca. If I do not receive cost submissions by the above deadlines, I make no order as to costs.

Wilkinson

Released: April 8, 2025