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Landlord & Tenant Law - Commercial tenancies - Landlord’s remedies - Termination of lease (forfeiture) - Grounds - Non-monetary default - Notice of termination - Relief from forfeiture - Considerations

Thursday, December 08, 2016 @ 7:00 PM  


Appeal by the head tenant from an order granting the respondent relief from forfeiture of its commercial sublease with the appellant. The appellant served two notices of termination of the sublease for alleged breaches other than non-payment of rent. The first notice of termination alleged that the respondent was in breach of the sublease because its principals and employees had been charged with criminal activity and the police had executed a search warrant as part of an investigation into stolen hardwood flooring products, creating a nuisance. The notice gave no time to remedy the alleged breaches. The second notice alleged that the respondent had breached the head lease by allowing another company to store hardwood flooring in the respondent’s subleased space. This notice gave the respondent 10 days to remedy the breach. The application judge held that the first notice of termination was invalid because it failed to give notice to the respondent to remedy the alleged breaches. With respect to the second notice, the application judge held that the appellant had not demonstrated that any criminal activity had taken place or that the respondent had allowed or acquiesced in any criminal activity. He agreed that the respondent had breached the head lease by allowing another company to store hardwood flooring on the premises, but granted the respondent relief from forfeiture of the sublease. The appellant argued that the application judge erred in finding that the respondent did not store or permit the storing of stolen hardwood flooring on the premises and in finding that there was no criminal activity taking place at the subleased premises.

HELD: Appeal dismissed. The application judge made no error of law or palpable or overriding error in finding that no criminal activity was taking place at the premises and that the respondent had allowed or acquiesced in it. The application judge directly referenced the admissible evidence of the police investigation into the stolen hardwood flooring products that indicated that no stolen hardwood was found on the premises.