Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc. et al., 2016 ONCA 93

JudgeBlair, Hourigan and D. Brown, JJ.A.
CourtCourt of Appeal (Ontario)
Case DateOctober 26, 2015
JurisdictionOntario
Citations2016 ONCA 93;(2016), 344 O.A.C. 363 (CA)

Mapleview-Veterans v. Papa Kerollus (2016), 344 O.A.C. 363 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. FE.004

Mapleview-Veterans Drive Investments Inc. (applicant/appellant) v. Papa Kerollus VI Inc. c.o.b Mr. Sub c.o.b Mr. Submarine-Mapleview and Mr. Submarine Limited (respondents/ respondents in appeal )

(C60604; 2016 ONCA 93)

Indexed As: Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc. et al.

Ontario Court of Appeal

Blair, Hourigan and D. Brown, JJ.A.

February 2, 2016.

Summary:

A commercial lease was for a 15-year term expiring on May 31, 2015. It gave the tenant an option to renew for a further period of five years on the same terms and conditions "save as to the rental rate which shall be the then current rate." The tenant purported to exercise the right of renewal. The landlord applied for a declaration that the renewal option was void for uncertainty because the renewal rent could not be ascertained. In the alternative, the landlord sought an order and declaration that the purported exercise of the renewal option was invalid and unenforceable because, inter alia, the tenant was in default of a precondition to the exercise of the option because it had not "paid the rent and all other sums payable under [the] Lease when due" at the time it purported to exercise the renewal option.

The Ontario Superior Court, in a decision with neutral citation 2015 ONSC 3833, made the following orders and/or declarations: (a) the renewal option was not void for uncertainty because the term "current rate" was capable of judicial determination provided the parties called expert evidence on the point; (b) there was, however, a live issue as to the proper calculation of what the tenant owed for additional amounts of arrears and a trial was required to make a determination of what was owing by the tenant to the landlord; (c) once there had been a judicial determination of the arrears, if any, by trial, the tenant was to have a 60-day period to pay the properly calculated arrears, if any, by way of a lump sum payment, at which time the renewal notice would be deemed to have been validly constituted, as of June 1, 2015; and (d) once the tenant had paid the arrears, if any, "the current rate" for the renewal period was to be determined judicially on the basis of expert evidence presented by the parties. The landlord appealed.

The Ontario Court of Appeal allowed the appeal. The court agreed with the application judge that the renewal option was not void for uncertainty. However, the court held that the tenant had not met its onus of establishing that it was not in default of its covenant "[to pay] the rent and all other sums payable ...when due" as a precondition to its right to exercise the option to renew. Accordingly, the purported exercise by the tenant of the renewal option under the lease was invalid and unenforceable.

Equity - Topic 1061

Equitable relief - Relief from forfeiture - General - [See Landlord and Tenant - Topic 6786 ].

Landlord and Tenant - Topic 2382

The lease - Renewals - What constitutes an enforceable renewal - [See Landlord and Tenant - Topic 2398 ].

Landlord and Tenant - Topic 2396

The lease - Renewals - Conditions precedent - A tenant purported to exercise the right of renewal under a commercial lease - The landlord sought an order that the purported exercise of the renewal option was invalid and unenforceable because, inter alia, the tenant was in default of a precondition to the exercise of the option because it had not "paid the rent and all other sums payable under [the] Lease when due" at the time it purported to exercise the renewal option - The application judge held that there was an issue as to the proper calculation of what the tenant owed for additional amounts of arrears and a trial was required to make a determination of what was owing by the tenant - Once there had been a judicial determination of the arrears, if any, the tenant was to have 60 days to pay the arrears, if any, by way of a lump sum payment, at which time the renewal notice would be deemed to have been validly constituted, as of June 1, 2015 - The Ontario Court of Appeal allowed the landlord's appeal - The application judge erred in law in overlooking the onus the tenant was required to meet, and made palpable and overriding errors of mixed fact and law in failing to hold, on this record, that the tenant had not complied with its obligation to pay all additional rent when due and that it therefore was not in a position to exercise the right to renewal of the lease - The question was not what arrears existed, if any, but whether the tenant complied with the covenants under the lease that were necessary preconditions for the exercise of the option - The lease did not permit renewal where the tenant had paid "some or most of" the sums payable, or "almost but not all of" the sums payable, or merely the "undisputed" sums payable - In order to be entitled to exercise the renewal option, the tenant had to show that it "has paid" the rent and all other sums payable "when due" - The covenant must have been complied with before the option was exercised - See paragraphs 33 to 51.

Landlord and Tenant - Topic 2398

The lease - Renewals - Certainty of terms - A commercial lease was for a 15-year term expiring on May 31, 2015 - It gave the tenant an option to renew for a further period of five years on the same terms and conditions "save as to the rental rate which shall be the then current rate" - The landlord argued that the renewal option was void for uncertainty because the renewal rent could not be ascertained - The Ontario Court of Appeal held that the renewal option was not void for uncertainty - The renewal option provided that the "rental rate" for the renewal period was to be the "then current rate" - That was a rate that could be readily ascertained through resort to expert evidence as to the rental rates for comparable spaces as at the renewal date - If the parties were unable to agree, the rate could be determined through judicial or other binding means - See paragraphs 25 to 32.

Landlord and Tenant - Topic 2399

The lease - Renewals - Rental rate - Calculation of - [See Landlord and Tenant - Topic 2398 ].

Landlord and Tenant - Topic 6785

Termination, forfeiture and reentry - Relief against forfeiture - Considerations - [See Landlord and Tenant - Topic 6786 ].

Landlord and Tenant - Topic 6786

Termination, forfeiture and reentry - Relief against forfeiture - When available - A tenant purported to exercise the right of renewal under a commercial lease - The landlord contended that the purported exercise of the renewal option was invalid and unenforceable because, inter alia, the tenant was in default of a precondition to the exercise of the option because it had not "paid the rent and all other sums payable under [the] Lease when due" at the time it purported to exercise the renewal option - The Ontario Court of Appeal held that the tenant had not complied with its obligation to pay all additional rent when due and that it therefore was not in a position to exercise the right to renewal of the lease - Nor did equity assist the tenant in these circumstances - There appeared to be conflicting authorities on whether a court could grant equitable relief from the failure to comply with a covenant that was a condition precedent to the renewal of a lease - It was not necessary to resolve the differences between those two lines of authority here because, in the circumstances of this appeal, the tenant was not entitled to the benefit of equitable intervention on either approach - One of the prerequisites for the exercise of any such equitable jurisdiction was that "the tenant has made diligent efforts to comply with the terms of the lease which are unavailing through no default of his or her own" - That could not be said in favour of the tenant here - See paragraphs 52 to 57.

Cases Noticed:

Fice and Department of Public Works of Ontario, Re (1922), 64 D.L.R. 535 (Ont. C.A.), refd to. [para. 27].

Gourlay v. Canadian Department Stores Ltd., [1933] S.C.R. 329, refd to. [para. 27].

Calford Properties Ltd. and Kelly's Billiards Ltd., Re (1973), 37 D.L.R.(3d) 300 (Alta. T.D.), refd to. [para. 27].

Sheppard v. Czechoslavak (Toronto) Credit Union Ltd. (1991), 1 R.P.R.(2d) 290 (Ont. Dist. Ct.), refd to. [para. 28].

Young v. Van Beneen, [1953] 3 D.L.R. 702 (B.C.C.A.), refd to. [para. 28].

Great Atlantic & Pacific Co. of Canada v. Topostar (Aurora) Inc. et al., [2006] O.T.C. Uned. 256; 2006 CanLII 7279 (Sup. Ct.), refd to. [para. 28].

Delphi Management Corp. v. Dawson Properties, [2014] O.T.C. Uned. 354; 2014 ONSC 354 (Sup. Ct.), refd to. [para. 28].

Hillas & Co. Ltd. v. Arcos Ltd. (1932), 147 L.T. 503 (H.L.), refd to. [para. 29].

Griffin v. Martens (1988), 27 B.C.L.R.(2d) 152 (C.A.), refd to. [para. 29].

Empress Towers Ltd. v. Bank of Nova Scotia (1990), 50 B.C.L.R.(2d) 126; 73 D.L.R.(4th) 400 (C.A.), leave to appeal denied [1991] 1 S.C.R. vii; 133 N.R. 238, refd to. [para. 29].

Mustard Seed (Calgary) Street Ministry Society v. Century Services Inc., [2009] A.R. Uned. 307; 79 R.P.R.(4th) 252; 2009 ABQB 171, refd to. [para. 30].

Brown v. Gould, [1972] 1 Ch. 53, refd to. [para. 30].

Finch v. Underwood (1876), 2 Ch. 310 (Eng. C.A.), refd to. [para. 36].

Clark Auto Body Ltd. v. Integra Custom Collision Ltd. (2007), 234 B.C.A.C. 309; 387 W.A.C. 309; 277 D.L.R.(4th) 201; 2007 BCCA 24, refd to. [para. 36].

1383421 Ontario Inc. v. Ole Miss Place Inc. (2003), 177 O.A.C. 40; 67 O.R.(3d) 161 (C.A.), refd to. [para. 38].

Edwards v. Walters, [1896] 2 Ch. 157 (Eng. C.A.), refd to. [para. 42].

Royal BK. v. Hogg, [1930] 2 D.L.R. 488 (Ont. C.A.), refd to. [para. 42].

Boulton v. Langmuir (1897), 24 O.A.R. 618 (C.A.), refd to. [para. 42].

Pacella and Giuliana, Re (1977), 16 O.R. (2d) 6 (C.A.), refd to. [para. 53].

Sparkhall v. Watson, [1954] 2 D.L.R. 22 (Ont. H.C.), refd to. [para. 53].

Ross v. Eaton (T.) Co. (1992), 58 O.A.C. 366; 11 O.R.(3d) 115 (C.A.), refd to. [para. 55].

120 Adelaide Leaseholds Inc. v. Oxford Properties Canada Ltd., [1993] O.J. No. 2801 (C.A.), refd to. [para. 55].

Counsel:

Milton A. Davis and Ian P. Katchin, for the appellant;

Sharon M. Addison for the respondent.

This appeal was heard on October 26, 2015, before Blair, Hourigan and D. Brown, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Blair, J.A., and was released on February 2, 2016.

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13 practice notes
  • Ontario Court Of Appeal Summaries (May 27 – 31, 2019)
    • Canada
    • Mondaq Canada
    • June 17, 2019
    ...Ontario Inc. v. Ole Miss Place (2003), 67 O.R. (3d) 161 (C.A), Mapleview-Veterans Drive Investments Inc. v. Papa Kerrollous IV Inc., 2016 ONCA 93 Newell v. Sax & Engineers, 2019 ONCA 455 Keywords: Solicitor and Client, Assessment of Accounts, Quantum Meruit, Reasonable Apprehension Of B......
  • COURT OF APPEAL SUMMARIES (June 1 – 5, 2020)
    • Canada
    • LexBlog Canada
    • June 9, 2020
    ...Ontario Inc. v. Ole Miss Place Inc. (2003), 67 O.R. (3d) 161 (C.A.), Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc., 2016 ONCA 93 Birdseye Security Inc. v. Milosevic , 2020 ONCA 355 Keywords: Civil Procedure, Striking Pleadings, Frivolous, Vexatious, Abuse of Process, ......
  • Court Of Appeal Summaries (June 1 ' 5, 2020)
    • Canada
    • Mondaq Canada
    • June 16, 2020
    ...Ontario Inc. v. Ole Miss Place Inc. (2003), 67 O.R. (3d) 161 (C.A.), Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc., 2016 ONCA 93 Birdseye Security Inc. v. Milosevic , 2020 ONCA 355 Keywords: Civil Procedure, Striking Pleadings, Frivolous, Vexatious, Abuse of Process, Ot......
  • Top 5 Civil Appeals From The Court of Appeal (April 2016)
    • Canada
    • Mondaq Canada
    • April 14, 2016
    ... (Feldman, Hourigan and Benotto JJ.A.), February 2, 2016 2. Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc. (Mr. Sub), 2016 ONCA 93 (Blair, Hourigan and Brown JJ.A.), February 2, 2016 3. Teva Canada Limited v. Bank of Montreal, 2016 ONCA 94 (Weiler, Laskin and Cronk JJ.......
  • Request a trial to view additional results
8 cases
  • 2324702 Ontario Inc. v. 1305 Dundas W Inc., 2020 ONCA 353
    • Canada
    • Court of Appeal (Ontario)
    • June 5, 2020
    ...v. Ole Miss Place Inc. (2003), 67 O.R. (3d) 161 (C.A.), at para. 80; Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc., 2016 ONCA 93, 344 O.A.C. 363, at paras. [24] The application judge found that equitable relief was not warranted here because of the appellant’s conduct. ......
  • McRae Cold Storage Inc. v. Nova Cold Logistics ULC, 2018 ONSC 7494
    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • December 13, 2018
    ...– even if not perfectly expressed – has an ascertainable meaning”: Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc., 2016 ONCA 93, 344 O.A.C. 363, at para. 29. In that case, the Court of Appeal refused to strike as ambiguous a lease term that rent for the renewal period wo......
  • 1521141 Ontario Limited v. Upper Oakville Shopping Centre Limited, 2018 ONSC 2808
    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • May 15, 2018
    ...option to renew was examined in Ontario by the Court of Appeal in Mapleview- Veterans Drive Investments Inc. v. Papa Kerollus VI Inc., at 2016 ONCA 93. Justice Blair confirmed that this onus is on the tenant in such circumstances at paragraph 50: 50 A tenant must comply with the terms of a ......
  • Hart Stores Inc. v. 3409 Rue Principale Inc., 2020 NBCA 49
    • Canada
    • New Brunswick Court of Appeal (New Brunswick)
    • July 16, 2020
    ...Lodge Ltd. v Forbidden Brew Corp., 2017 BCSC 1850 (CanLII); Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc. (Mr. Sub), 2016 ONCA 93 As the respondent said in its brief, “The default of the Tenant under the Lease Agreement stems from diverging interpretation of Arti......
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5 firm's commentaries
  • COURT OF APPEAL SUMMARIES (June 1 – 5, 2020)
    • Canada
    • LexBlog Canada
    • June 9, 2020
    ...Ontario Inc. v. Ole Miss Place Inc. (2003), 67 O.R. (3d) 161 (C.A.), Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc., 2016 ONCA 93 Birdseye Security Inc. v. Milosevic , 2020 ONCA 355 Keywords: Civil Procedure, Striking Pleadings, Frivolous, Vexatious, Abuse of Process, ......
  • Ontario Court Of Appeal Summaries (May 27 – 31, 2019)
    • Canada
    • Mondaq Canada
    • June 17, 2019
    ...Ontario Inc. v. Ole Miss Place (2003), 67 O.R. (3d) 161 (C.A), Mapleview-Veterans Drive Investments Inc. v. Papa Kerrollous IV Inc., 2016 ONCA 93 Newell v. Sax & Engineers, 2019 ONCA 455 Keywords: Solicitor and Client, Assessment of Accounts, Quantum Meruit, Reasonable Apprehension Of B......
  • Court Of Appeal Summaries (June 1 ' 5, 2020)
    • Canada
    • Mondaq Canada
    • June 16, 2020
    ...Ontario Inc. v. Ole Miss Place Inc. (2003), 67 O.R. (3d) 161 (C.A.), Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc., 2016 ONCA 93 Birdseye Security Inc. v. Milosevic , 2020 ONCA 355 Keywords: Civil Procedure, Striking Pleadings, Frivolous, Vexatious, Abuse of Process, Ot......
  • Top 5 Civil Appeals From The Court of Appeal (April 2016)
    • Canada
    • Mondaq Canada
    • April 14, 2016
    ... (Feldman, Hourigan and Benotto JJ.A.), February 2, 2016 2. Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc. (Mr. Sub), 2016 ONCA 93 (Blair, Hourigan and Brown JJ.A.), February 2, 2016 3. Teva Canada Limited v. Bank of Montreal, 2016 ONCA 94 (Weiler, Laskin and Cronk JJ.......
  • Request a trial to view additional results

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