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COMMERCIAL TENANCIES - Landlord’s remedies

Thursday, October 03, 2019 @ 8:40 AM  

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Appeal by the landlord and cross-appeal by the tenant from judgment awarding damages to both parties and setting them off against each other. The appellant leased commercial premises to the respondent from which the respondent operated a commercial contracting business. The lease was an oral agreement on a month-to-month basis. The property had to be rezoned to suit the tenant. As a requirement for rezoning, the Ontario Municipal Board required the landlord to enter into a Site Plan Control Agreement. When the tenant refused to complete required remediation and refused responsibility to rectify the excessive landfill, the relationship broke down. The landlord terminated the lease, took possession of the premises, distrained the tenant’s commercial operating equipment on the property, and sued the tenant for unpaid rent and damage to the property. The tenant counterclaimed for the value of the chattels seized and lost income, claiming that the eviction and seizure had a devastating impact on his business. The trial judge awarded the landlord damages for unpaid rent, for remediation, and for the cost of completing the Site Plan Agreement. The trial judge awarded the tenant damages, finding that the landlord’s distress was excessive and essentially a wrongful conversion. The trial judge accepted that the seizure of the chattels prevented the tenant from earning income but found that he failed to mitigate his losses because he failed to pursue expeditious legal means to regain the seized chattels.

HELD: Appeal and cross-appeal allowed in part. The trial judge failed to explain how he concluded that the tenant had lost income or how he arrived at the $100,000 figure for lost income. There was an absence of evidence that made it impossible to assess damages for loss of income. A new trial on the issue of damages for lost income was ordered. In the award to the landlord, the trial judge double-counted the rent arrears. The trial judge misunderstood the law of distraint and the principle that a party could either take distress or terminate the lease, but not both. The distraint was wholly unlawful as the landlord had terminated the lease. The landlord had no right to take distress and was thus not entitled to credit the rent arrears against the chattels seized.

Cassandro v. Glass, [2019] O.J. No. 4156, Ontario Court of Appeal, J.C. MacPherson, M.H. Tulloch and A.L. Harvison Young JJ.A., August 13, 2019. TLD-September302019012