Notice Law - N5 (Substantial Interference)

Morguard Residential v Asboth, 2017 ONSC 387 (CanLII)

[39] The appellants submit that the Board erred in law by failing to apply s. 37(5) of the Act and failing to find that the termination provisions in the Colonnade tenancy agreements were void as contrary to that section. In addition, the appellants argue that in accordance with s. 4(1) of the Act, any contractual provision that is inconsistent with the Act is void.

[41] I am unable to conclude that the member or the reviewing member erred in law in their approach to this issue. Section 37(5) is designed to protect the security of tenure of tenants by ensuring that tenants cannot be induced to contract out of their rights at the time when they enter into a tenancy agreement. Specifically, having regard to the fact that landlords and tenants are often not in an equal bargaining position when leases are negotiated, s. 37(5) precludes landlords from extracting tenancy termination agreements at the time leases are signed. (See Clandfield v. Queen’s University (Apartment and Housing Services) (2001), 2001 CanLII 4969 (ON CA), 54 O.R. (3d) 475, 200 D.L.R. (4th) 475 (C.A.), which dealt with an identical provision in the predecessor Tenant Protection Act, 1997, S.O. 1997, c. 24.)

[42] But this case is quite different. The landlord and tenant relationship between the parties in this case pre-existed the tenancy agreement. It was suspended by the redevelopment of the Heathview, but the tenants had the right to return to the premises upon completion and continue the relationship. The landlord gratuitously offered to continue the landlord and tenant relationship in alternative accommodation at the Colonnade in the interim, at a reduced rent, and the tenants accepted the offer. The agreement to terminate the temporary tenancy when the redevelopment was complete was reached as part of this overall agreement, and not separately at the time the Colonnade tenancy agreement was entered into or as a condition of entering into it. The Colonnade tenancy agreement was not a stand-alone agreement. It cannot be interpreted in isolation from the overall relationship of the parties.