Laying in the Weeds (General)

Welsh v. Karangongou, 2018 ONSC 804 (CanLII)

[47] Thus, not only did the landlord offer no explanation for her failure to respect the option, but the tenants were unaware of the landlord’s position or her grounds for non-performance. As a result, they were unable to remedy the complaint - as they easily could have well before the commencement of proceedings. The landlord could still have asserted that the original installation of the cat enclosure amounted to a breach of the renovation clause that caused the forfeiture of the option (as, in effect, she did before me, despite the removal of the enclosure prior to the hearing). Instead, the landlord “lay in the weeds” and forced the tenants to go to court, without disclosing the basis for her refusal to convey the house until after the expiry of the option period.

[48] I am alert to the fact that the landlord’s affidavit was not delivered until she received the opinion from the engineer regarding the building permit issue. That piece of evidence, however, was not required to enable the landlord to communicate to the tenants the grounds for her refusal. If she was relying on the installation of the cat enclosure as the basis for the forfeiture of the option to purchase, she could have notified the tenants of her position soon after it came to her notice.

[49] I conclude and find that the landlord’s strategy was designed to maximize her prospects of avoiding her contractual obligation to convey the house at the agreed-upon option price, and that she formed an intention to do so even before she found a supposed ground to support it. I conclude and find that she pursued this approach with a view to either (a) forcing the tenants to pay a higher price to remain in their home or (b) realizing a higher price through a sale on the open market. To me, the landlord’s approach smacks of unfairness. At the very least, it confirms her intention to seek to avoid the performance of her contractual obligations and an absence of good faith. While not determinative of the outcome, I consider this conduct an additional factor relevant to the equities in this case, that would further support granting equitable relief to the tenants.

(e) Conclusion on relief from forfeiture

[50] The three factors discussed above – the reasonableness of the breaching party's conduct, the gravity of the breach, and proportionality – all support the conclusion that this is an appropriate case in which to exercise the Court’s equitable jurisdiction to grant relief from forfeiture. In my view, this is a case in which the tenants have proven that forfeiture of their option to purchase would be inequitable and unjust in all of the circumstances. I reach that conclusion even apart from my comments regarding the conduct of the landlord.

[51] I would therefore exercise my discretion to grant the tenants relief from the forfeiture of their right to exercise the option to purchase contained in the lease.