1497777 Ont. Inc. v. Leon's Furniture, (2003) 176 O.A.C. 380 (CA)

• Judge: Morden, Weiler and Charron, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 23, 2003
• Jurisdiction: Ontario
• Citations: (2003), 176 O.A.C. 380 (CA)

1497777 Ont. Inc. v. Leon's Furniture (2003), 176 O.A.C. 380 (CA)

MLB headnote and full text

Temp. Cite: [2003] O.A.C. TBEd. SE.088

In The Matter Of an Application pursuant to Rule 14.05(3)(d) of the Rules of Civil Procedure;

And In The Matter Of an Application pursuant to Part III of the Commercial Tenancies Act, R.S.O. 1990, c. C-1.7:

1497777 Ontario Inc. (applicant/appellant) v. Leon's Furniture Limited and Marca School of Hair Design Inc. (respondents/respondents in appeal)

(C38579)

Indexed As: 1497777 Ontario Inc. v. Leon's Furniture Ltd. et al.

Ontario Court of Appeal

Morden, Weiler and Charron, JJ.A.

September 23, 2003.

Summary:

A landlord applied for a declaration that the lease was terminated on the ground that the tenant had sub-let the premises without the landlord's consent. The tenant made a counter-application for relief from forfeiture. The sub-tenant applied for an order vesting in it a leasehold interest in the premises in the event that the application succeeded and the counter-application failed.

The Ontario Superior Court dismissed the landlord's application. The court did not deal with the tenant's counter-application nor with the sub-tenant's application. The landlord appealed.

The Ontario Court of Appeal allowed the appeal. The court declared that the lease was terminated and that the landlord was entitled to possession of the premises unless the tenant obtained an order granting it relief from forfeiture. The court directed that the tenant's counter-application for relief from forfeiture proceed to trial in the Superior Court because it could not decide the question in a fair and satisfactory manner on the materials before the court. The court directed that the sub-tenant's application also be determined by the Superior Court in case the tenant's counter-application was dismissed.

Landlord and Tenant - Topic 5604.1

Subleases - Granting of subleases - Consent of landlord - What constitutes - In 1970, the landlord and the tenant agreed to a 30-year lease ending on October 31, 2000 - The tenant had an option to renew for an additional 10 years - The landlord's consent was required if the tenant wanted to sub-lease - In 1992 and in 1997, the landlord consented to the tenant sub-leasing the premises "for a term of less than that of the term of the Agreement" - The 1992 sub-lease ended in 1997 and the 1997 sub-lease was scheduled to end on August 31, 2000 - In October 1999, the tenant exercised its option to renew the main lease for 10 years - The tenant sub-leased the premises for a five-year term beginning September 1, 2000, with an option to renew for a further five years - The tenant did not obtain the landlord's consent for the September 1, 2000, sub-lease - The tenant submitted that a fresh consent was not necessary because the landlord had to be taken to have approved the sub-tenant and its use of the premises in the 1992 and 1997 consents - The Ontario Court of Appeal ruled that the landlord's 1992 and 1997 consents did not authorize any further sub-letting beyond the 30-year term of the lease and that, accordingly, the landlord did not consent to the September 1, 2000, sublease - See paragraphs 3 to 50.

Landlord and Tenant - Topic 6786

Termination, forfeiture and reentry - Relief against forfeiture - When available - Section 20(7) of the Commercial Tenancies Act provided that the section, which was concerned with relief from forfeiture, did not extend "to a covenant or condition against the assigning, underletting, parting with the possession, or disposing of the land leased" - The Ontario Court of Appeal ruled that s. 20(7) did not stand in the way of resort to the equitable jurisdiction of the court found in s. 98 of the Courts of Justice Act - See paragraphs 51 to 71.

Cases Noticed:

St. Jane Plaza Ltd. v. Sunoco Inc. (1992), 24 R.P.R.(2d) 161 (Ont. Gen. Div.), consd. [para. 22].

Avlor Investments Ltd. v. J.K. Children's Wear Inc. (1991), 6 O.R.(3d) 225 (Gen. Div.), refd to. [para. 50].

Wickham Machine Tool Sales Ltd. v. Schuler AG, [1974] A.C. 235 (H.L.), refd to. [para. 52].

Webb v. Box (1909), 19 O.L.R. 540 (Div. Ct.), not folld. [para. 57].

McBride v. Comfort Living Housing Co-operative Inc. (1992), 54 O.A.C. 286; 7 O.R.(3d) 394 (C.A.), not folld. [para. 57].

Taylor v. Ontario (Minister of Consumer and Commercial Relations) et al. (1997), 34 O.T.C. 151 (Gen. Div.), not folld. [para. 57].

Dovale v. Metropolitan Toronto Housing Authority, [2001] O.T.C. 87; 53 O.R.(3d) 181 (Sup. Ct.), not folld. [para. 57].

Wakefield v. Cottingham, [1959] O.R. 551 (C.A.), consd. [para. 58].

Pink Panther Food Corp. v. McLennan (M.D.) Ltd. (1990), 75 O.R.(3d) 651 (C.A.), consd. [para. 60].

Rexdale Investments Ltd. v. Gibson, [1967] 1 O.R. 251 (C.A.), refd to. [para. 61].

Greenwin Construction Co. et al. v. Stone & Webster Canada Ltd. et al., [2001] O.T.C. Uned. 623; 55 O.R.(3d) 345 (Sup. Ct.), refd to. [para. 61].

Barrow v. Isaacs & Son, [1891] 1 Q.B. 417 (C.A.), consd. [para. 63].

Shiloh Spinners Ltd. v. Harding, [1973] A.C. 691 (H.L.), consd. [para. 66].

Liscumb v. Provenzano et al. (1985), 51 O.R.(2d) 129 (H.C.), affd. (1986), 55 O.R.(2d) 404 (C.A.), refd to. [para. 67].

Federal Business Development Bank v. Starr (1988), 65 O.R.(2d) 793 (C.A.), affing. (1986), 55 O.R.(2d) 65 (H.C.), consd. [para. 89].

Statutes Noticed:

Commercial Tenancies Act, R.S.O. 1990, c. L-7, sect. 20(1), sect. 20(7) [para. 54].

Courts of Justice Act, R.S.O. 1990, c. C-43, sect. 98 [para. 55].

Authors and Works Noticed:

Halsbury's Laws of England (4th Ed.), vol. 27(1), p. 435, para. 467 [para. 50].

Meagher, Gummow and Lehane, Equity: Doctrines and Remedies (4th Ed. 2000), pp. 581 to 587 [para. 68].

Waddams, Stephen M., The Law of Contracts (4th Ed. 1999), pp. 425, 426 [para. 52].

Counsel:

Charles Simco and Leslie Dizgun, for the appellant;

Geoff R. Hall, for the respondent, Leon's Furniture Limited;

Barnet H. Kussner, for the respondent, Marca School of Hair Design Inc.

This appeal was heard on February 11, 2003, by Morden, Weiler and Charron, JJ.A., of the Ontario Court of Appeal.

The decision of the Court of Appeal was delivered by Morden, J.A., and released on September 23, 2003.