Eviction - Re: Enforcement Proceedings - Re: Breach of Contract (CTA)

Commercial Tenancies Act, R.S.O. 1990, c. L.7

1. In this Act,

“landlord” includes a person who is lessor, owner, the person giving or permitting the occupation of the premises in question, and these persons’ heirs and assigns and legal representatives, and in Parts II and III also includes the person entitled to possession of the premises;

“tenant” includes a person who is lessee, occupant, sub-tenant, under-tenant, and the person’s assigns and legal representatives.

2. This Act does not apply to tenancies and tenancy agreements to which the Residential Tenancies Act, 2006 applies.

4. All persons being grantees or assignees of the Queen, or of any person other than the Queen, and the heirs, executors, successors and assigns of every of them, shall have and enjoy like advantage against the lessees, their executors, administrators, and assigns, by entry for non-payment of the rent, or for doing of waste, or other forfeiture, and also shall have and enjoy all and every such like and the same advantage, benefit, and remedies, by action only, for the non-performance of other conditions, covenants, or agreements, contained and expressed in the indentures of their said leases, demises or grants against all and every of the said lessees and grantees, their executors, administrators, and assigns as the said lessors or grantors themselves, or their heirs or successors, might have had and enjoyed at any time or times.

19. (1) In this section and in sections 20 to 22,

“action” includes a proceeding under Part III; (“action”)

“under-lease” includes an agreement for an under-lease where the under-lessee has become entitled to have the under-lease granted; (“sous-bail”)

“under-lessee” includes any person deriving title under or from an under-lessee. (“sous-preneur”)

(2) A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease, other than a proviso in respect of the payment of rent, is not enforceable by action, entry, or otherwise, unless the lessor serves on the lessee a notice specifying the particular breach complained of, and, if the breach is capable of remedy, requiring the lessee to remedy the breach, and, in any case, requiring the lessee to make compensation in money for the breach, and the lessee fails within a reasonable time thereafter to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money to the satisfaction of the lessor for the breach.

20. (1) Where a lessor is proceeding by action or otherwise to enforce a right of re-entry or forfeiture, whether for non-payment of rent or for other cause, the lessee may, in the lessor’s action, if any, or if there is no such action pending, then in an action or application in the Superior Court of Justice brought by the lessee, apply to the court for relief, and the court may grant such relief as, having regard to the proceeding and conduct of the parties under section 19 and to all the other circumstances, the court thinks fit, and on such terms as to payment of rent, costs, expenses, damages, compensation, penalty, or otherwise, including the granting of an injunction to restrain any like breach in the future as the court considers just.

(2) This section and section 19 apply, although the proviso or stipulation under which the right of re-entry or forfeiture accrues is inserted in the lease in pursuance of the directions of a statute.

(3) For the purposes of this section, a lease limited to continue only as long as the lessee abstains from committing a breach of covenant is and takes effect as a lease to continue for any longer term for which it could subsist, but determinable by a proviso for re-entry on such a breach.

(4) Where the proceeding is brought to enforce a right of re-entry or forfeiture for non-payment of rent and the lessee, at any time before judgment, pays into court all the rent in arrear and the costs of the proceeding, the proceeding is forever stayed.

(5) Where relief is granted under this section, the lessee shall hold and enjoy the demised premises according to the lease thereof made without any new lease.

(6) This section applies to leases made either before or after the commencement of this Act and applies despite any stipulation to the contrary.

(7) This section does not extend,

(a) to a covenant or condition against the assigning, underletting, parting with the possession, or disposing of the land leased; or to a condition for forfeiture on the bankruptcy of the lessee, or on the lessee making an assignment for the benefit of creditors under the Assignments and Preferences Act, or on the taking in execution of the lessee’s interest; or

(b) in the case of a mining lease, to a covenant or condition for allowing the lessor to have access to or inspect books, accounts, records, weighing machines or other things, or to enter or inspect the mine or the workings thereof.

(8) Where the right of re-entry or forfeiture is in respect of a breach of a covenant or condition to insure, relief shall not be granted if at the time of the application for relief there is not an insurance on foot in conformity with the covenant or condition to insure except, in addition to any other terms that the court may impose, upon the term that the insurance is effected.

30. (1) The goods and chattels exempt from seizure under execution are not liable to seizure by distress by a landlord for rent, except as hereinafter provided.

35. (1) A tenant may set off against the rent due a debt due to the tenant by the landlord. R.S.O. 1990, c. L.7, s. 35 (1).

74. (1) Where a tenant after the tenant’s lease or right of occupation, whether created by writing or by parol, has expired or been determined, either by the landlord or by the tenant, by a notice to quit or notice pursuant to a proviso in a lease or agreement in that behalf, or has been determined by any other act whereby a tenancy or right of occupancy may be determined or put an end to, wrongfully refuses or neglects to go out of possession of the land demised to the tenant, or which the tenant has been permitted to occupy, the tenant’s landlord may apply upon affidavit to a judge of the Superior Court of Justice to make the inquiry hereinafter provided for and the application shall be made, heard and determined in the county or district in which the land lies. R.S.O. 1990, c. L.7, s. 74 (1); 1993, c. 27, Sched.; 2006, c. 19, Sched. C, s. 1 (1)

76. (1) If, at the time and place appointed, the tenant fails to appear, the judge, if it appears to him or her that the tenant wrongfully holds against the right of the landlord, may order a writ of possession (Form 3) directed to the sheriff of the county or district in which the land lies to be issued commanding him or her forthwith to place the landlord in possession of the land. R.S.O. 1990, c. L.7, s. 76 (1).

Heger v. Varajao et al., 2010 ONSC 4603 (CanLII)

III DISCUSSION

A. Jurisdiction

1. under Part III of Commercial Tenancies Act

[75] The motion is brought pursuant to Part III of the Commercial Tenancies Act, s. 74.

[76] Section 74(1) of the Commercial Tenancies Act provides for the right of a landlord to make an application in respect of an overholding tenant:

74(1) Where a tenant . . . wrongfully refuses or neglects to go out of possession of the land demised to the tenant, or which the tenant has been permitted to occupy, the tenant’s landlord may apply upon affidavit to a judge of the Superior Court of Justice to make the inquiry hereinafter provided for and the application shall be made, heard and determined in the county or district in which the land lies.

[77] The inquiry mentioned in s. 74(1) is addressed in s. 74(2):

74(2) The court shall in writing appoint a time and place at which a judge will inquire and determine whether the person complained of was a tenant to the complainant for a term . . . that has expired or has been determined by a notice to quit or for default in payment of rent or otherwise, and whether the tenant holds the possession against the right of the landlord, and whether the tenant, having no right to continue in possession, wrongfully refuses to go out of possession.

[78] Particulars as to the form and content of the notice of the inquiry are dealt with in s. 74(2).

[79] The title of a proceeding under s. 74(1) is described in s. 75 as being “styled . . . In the matter of (giving the name of the party complaining), Landlord, against (giving the name of the party complained against), Tenant.”

[80] If the tenant appears, s. 76 (2) provides for a summary disposition:

76(2) . . . the judge shall, in a summary manner, hear the parties and their witnesses, and examine the matter, and, if it appears to the judge that the tenant wrongfully holds against the right of the landlord, he or she may order the issue of the writ.

[81] An appeal lies to the Divisional Court under s. 78(1), and s. 78(2) reads:

78(2) If the Divisional Court is of the opinion that the right of possession should not be determined under this Part, the court may discharge the order of the judge, and the landlord may in that case proceed by action for the recovery of possession.

[82] It is obvious that 214 Ontario Limited, despite saying so, is not proceeding under Part III of the Commercial Tenancies Act. Yet, there is no obligation on a landlord to firstly proceed under Part III. It is open for a landlord to bring an action for recovery of possession, which is what 214 Ontario Limited did in its counterclaim.[48] Nevertheless, it is incorrect to say that the within motion is brought under Part III of the Commercial Tenancies Act.