Focus On

COMMERCIAL TENANCIES - Termination of lease (forfeiture) - Grounds - Non-monetary default

Tuesday, April 27, 2021 @ 6:23 AM  

Lexis Advance® Quicklaw®
Application by the appellant, Airside Event Spaces, for stay of execution of an order refusing relief from forfeiture. Airside was a tenant at a regional airport owned by the respondent, the Township of Langley, as an assignee under a 14-year lease expiring in 2027. In 2020, the Township terminated the lease due to multiple breaches by Airside. The Township alleged that Airside breached the lease’s prohibition on sub-letting for unapproved and unlawful uses, constructed amenities without permits or approval and failed to permit an inspection of its premises. Airside filed a petition seeking relief from forfeiture. It submitted that the breaches were unintentional and/or had a minor impact on the Township. The judge acknowledged Airside’s strong prima facie case arising from its sizable investment in the premises. However, the judge concluded that the deliberate nature of Airside’s misconduct and an absence of demonstrable good faith disqualified it from the relief sought. Thereafter, the parties entered a standstill agreement that allowed Airside to pay rent while the Township agreed not to lease to a new tenant. Airside sought a stay of execution of the order that would effectively continue the standstill agreement pending determination of the appeal.

HELD: Application allowed. The appeal by Airside faced difficulties but could not be regarded as frivolous or having no chance of success. A serious question was raised as to whether the judge gave sufficient weight to the size of Airside’s investment in the premises in the context of the evidence of the breaches of the lease. Additionally, it was arguable the judge placed undue emphasis on misconduct that was not directly related to the breaches of the lease. Airside established it would suffer irreparable harm in the absence of the relief sought, as its appeal would be moot given that it would be unlikely to regain access to the premises and that the improvements made at its considerable expense rendered the premises unique. For the same reasons, the balance of convenience favoured Airside. A stay pending appeal on the conditions replicating the parties’ standstill agreement was just and equitable.

Airside Event Spaces Inc. v. Langley (Township), [2021] B.C.J. No. 358, British Columbia Court of Appeal, B. Fisher J.A., March 1, 2021. Digest No. TLD-April262021003