Kenmore Land Co. v. Jim & Jaklen Holdings Ltd., 2012 SKQB 28

• Judge: Mills, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: January 19, 2012
• Jurisdiction: Saskatchewan
• Citations: 2012 SKQB 28;(2012), 390 Sask.R. 108 (QB)

Kenmore Land v. Jim & Jaklen Holdings (2012), 390 Sask.R. 108 (QB)

MLB headnote and full text

Temp. Cite: [2012] Sask.R. TBEd. FE.028

Kenmore Land Co. Ltd. (landlord/applicant) v. Jim & Jaklen Holdings Ltd. (tenant/respondent)

(2011 Q.B.G. No. 1265; 2012 SKQB 28)

Indexed As: Kenmore Land Co. v. Jim & Jaklen Holdings Ltd.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Mills, J.

January 19, 2012.

Summary:

A landlord applied for a writ of possession against a tenant. The tenant applied for relief from forfeiture. Pursuant to s. 52(2) of the Landlord and Tenant Act, the matter was ordered to be dealt with by way of a summary hearing with viva voce evidence.

The Saskatchewan Court of Queen's Bench granted the tenant relief from forfeiture on the condition that the tenant arranged for the removal of a builder's lien against the property within 60 days of the order. In the event that the lien was not removed, the landlord was given leave to apply to the court by conference call on three days' notice for an order for possession.

Contracts - Topic 1444

Formation of contract - Agreements that are not contracts - Agreements to agree - A landlord applied for a writ of possession against a tenant - The tenant applied for relief from forfeiture - The landlord submitted that the lease had ended on July 31, 2011, entitling it to possession as of that date - The tenant submitted that the lease was extended by consent to July 31, 2016, and it was entitled to possession of the premises until that date - The Saskatchewan Court of Queen's Bench held that the parties had entered into a continuation of the lease as evidenced by a letter sent to the tenant by the landlord - The court rejected the landlord's argument that the letter was simply an agreement to enter into a formal lease agreement with all the appropriate terms and conditions at a later time - The lease agreement was already in place and consisted of some 32 pages plus additional schedules - No further documents were required - The parties' actions were consistent with the letter - The previous leases had been prepared by the landlord and presented for signature to the tenant - The landlord could not expect that the tenant would be preparing a new lease agreement for the landlord's signature - "The landlord is not able to rely on the fact of non-response to [the letter] as the basis for excusing itself for creating a new lease agreement if one was required." - See paragraphs 8 to 19.

Landlord and Tenant - Topic 1342

The premises - Possession and use - Permitted uses - A landlord applied for a writ of possession against a tenant, which operated a restaurant located on the leased premises - The tenant applied for relief from forfeiture - The Saskatchewan Court of Queen's Bench rejected the landlord's argument that the tenant breached the lease because it had VLTs in the restaurant and VLTs were inconsistent with the operation of "an above-quality type restaurant" as required by the lease - The landlord could point to no lease provisions suggesting that this was the case - Nor did it lead independent evidence that VLTs and above-quality type restaurants were inconsistent - Alternatively, if a breach had occurred respecting the VLTs and notice of termination of the lease properly provided in consequence thereof, the court would have granted relief from forfeiture since the breach had been remedied - See paragraphs 20 to 23.

Landlord and Tenant - Topic 2382

The lease - Renewals - What constitutes an enforceable renewal - [See Contracts - Topic 1444 ].

Landlord and Tenant - Topic 2821

The lease - Breach by tenant - General - A landlord applied for a writ of possession against a tenant, which operated a restaurant on the leased premises, on the basis, inter alia, that the tenant had breached the lease by allowing a lien to be registered against the property (it had undertaken renovations) - The tenant applied for relief from forfeiture - The Saskatchewan Court of Queen's Bench held that forfeiture of the lease for breach of the covenant to repair would be so disproportionate to any possible loss that might be suffered by the landlord resulting therefrom, that it would amount to an injustice - The tenant had expended over $500,000 in renovations to the premises - Its only ability to recover that expenditure was through operating the restaurant to the end of the lease - Upon reentry, the landlord would get the benefit of the renovations - The landlord had not established any financial loss as a result of the breach to date - The court granted relief from forfeiture on the condition that the tenant arranged for the removal of the builder's lien within 60 days - In the event the lien was not removed, the landlord was given leave to apply to the court by conference call on three days' notice for an order for possession - See paragraphs 24 to 40.

Landlord and Tenant - Topic 6781

Termination, forfeiture and reentry - Relief against forfeiture - General - The Saskatchewan Court of Queen's Bench stated that "Relief against forfeiture in the [Landlord and Tenant] Act is statutory. However, it is based on equitable considerations." - See paragraph 34.

Landlord and Tenant - Topic 6786

Termination, forfeiture and reentry - Relief against forfeiture - When available - [See Landlord and Tenant - Topic 1342 and Landlord and Tenant - Topic 2821 ].

Practice - Topic 7021

Costs - Party and party costs - Entitlement to - Successful party - Exceptions - Conduct - A landlord applied for a writ of possession against a tenant, which operated a restaurant on the leased premises - The tenant applied for relief from forfeiture - Pursuant to s. 52(2) of the Landlord and Tenant Act, the matter was ordered to dealt with by way of a summary hearing with viva voce evidence - The Saskatchewan Court of Queen's Bench granted the tenant relief from forfeiture on the condition that the tenant arranged for the removal of a builder's lien against the property - The court refused the landlord's request for solicitor-client costs under article 7.05 of the lease, which provided that: "... The Tenant shall also pay to the Landlord all costs, expenses and legal fees (on a solicitor and his client basis) that may be incurred or paid by the Landlord in recovering possession of the Leased Premises or in the enforcing of the terms, covenants and conditions contained in this lease whether or not such term, covenant or condition is referred to in this Article or otherwise." - The landlord's first basis for attempting reentry was that the lease had expired - It was unsuccessful in that regard - The landlord further sought to establish that the tenant had breached a term of the lease by allowing VLTs into the Banquet Room - It was unsuccessful in that regard - The landlord's success was limited to its final fallback position in that the lien breach had to be remedied as part of a conditional forfeiture - The landlord's success in the action was marginal - The majority of the time, efforts and issues addressed had resulted in the decision in favour of the tenant - In the normal course, the court would have granted costs in favour of the tenant - However, to a certain degree, lack of movement in relation to removal of the lien, although understandable, was still a breach, and as such, the court exercised its discretion and awarded no costs to either party - See paragraphs 41 to 43.

Practice - Topic 7030

Costs - Party and party costs - Entitlement to party and party costs - Where success or fault divided - [See Practice - Topic 7021 ].

Cases Noticed:

Molnar et al. v. Kashuba, [2004] Sask.R. Uned. 70; 2004 SKQB 95, refd to. [para. 3].

Saskatoon Business College Ltd. v. 607113 Alberta Ltd., [1997] 1 W.W.R. 583; 149 Sask.R. 174 (Q.B.), refd to. [para. 15].

Temoshawsky v. Kaban (1992), 101 Sask.R. 70 (Q.B.), refd to. [para. 23].

586903 Saskatchewan Ltd. v. Dube Investments Ltd. (1984), 123 Sask.R. 318 (C.A.), appld. [para. 32].

Saskatchewan River Bungalows Ltd. and Fikowski v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490; 168 N.R. 381; 155 A.R. 321; 73 W.A.C. 321, appld. [para. 34].

Royal Bank of Canada v. Belray Farms Ltd. (1993), 115 Sask.R. 86 (Q.B.), refd to. [para. 37].

Counsel:

Collin K. Hirschfeld, for the landlord/applicant;

Andrew M. Mason, for the tenant/respondent.

This application was heard by Mills, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following decision on January 19, 2012.