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COMMERCIAL TENANCIES - Shopping centre - Landlord's obligations - Emergency repairs

Friday, November 15, 2019 @ 7:56 AM  

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Appeal by the defendant landlord from the summary judgment granted against it in two actions. In 2014, the roof of a mall collapsed above a grocery store subleased by Whitecourt IGA from the respondent. The collapse forced the grocery store to close, resulting in loss of profit and rental differential that were covered by the respondent’s insurer. The head lease provided the landlord would maintain the roof at its own cost. It further provided the respondent could immediately make emergency repairs to the premises that were the responsibility of the landlord and provided for reimbursement by the landlord. The chambers judge found the collapse demonstrated the roof was not in good and tenantable condition. He granted summary judgment for liability and damages of $761,811 in the insurer’s subrogated action and for liability alone in the action commenced by the respondent for the cost of repairs.

HELD: Appeal allowed in part. The chambers judge’s interpretation and application of the provisions of the lease were reasonable and demonstrated no palpable and overriding errors. The obligation to maintain the roof in tenantable condition could not be reasonably limited to repairing damage after it occurred. The landlord’s knowledge of the disrepair of the roof was not a pre-condition to its liability for breach. The chambers judge erred in relying on hearsay evidence in making his damages award. The damages in the subrogated action were remitted back for reconsideration. The chambers judge was entitled to find an emergency existed that entitled the respondent to make repairs. The extent to which the repairs performed were necessary and reasonable would be determined at the damages assessment.

Sobeys Capital Inc. v. Whitecourt Shopping Centre (GP) Ltd., [2019] A.J. No. 1323, Alberta Court of Appeal, P.T. Costigan, J. Strekaf and D. Pentelechuk JJ.A., October 4, 2019. Digest No. TLD-November112019009