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).

Toronto Community Housing v. Bryant Didier, 2018 ONSC 5158 (CanLII)

[33] Under the Commercial Tenancies Act, there is no requirement that the Landlord state a reason for termination in a monthly tenancy. Absent any term in a lease requiring the existence of any condition as justification for the termination of a commercial month-to-month rental by either party, 30 days’ notice is sufficient to terminate a lease under s.28 of the Commercial Tenancies Act: Downtown Pallets Ltd. v. Ontario Food Terminal Board, 2013 ONSC 502, 30 R.P.R. (5th) 153, at paras. 17‑18.

[34] Section 74(1) of the Commercial Tenancies Act provides:

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.

[35] Mr. Didier has failed to vacate his occupation of Unit B3 after the TCHC served a valid Notice under section 28 of the Commercial Tenancies Act. The TCHC has thereby established an entitlement to the relief sought in this Application.

2503257 Ontario Ltd. v. 2505304 Ontario Inc. (Good Guys Gas Bar), 2020 ONCA 149

[1] As a courtesy by letter dated June 17, 2019, this court’s Senior Legal Officer alerted the parties to a potential problem regarding this court’s jurisdiction to hear an appeal from an order granting vacant possession. She suggested that they could bring a motion before a single judge of this court or file a consent order transferring the appeal to the Divisional Court without the necessity of today’s attendance.

[2] The parties did not do so but argued that this court has jurisdiction to hear this appeal.

[3] We disagree. The application judge granted vacant possession to the respondent which, in our view, is caught under s. 78 (1) of the Commercial Tenancies Act, R.S.O. 1990. C. L.7, when read in light of the statutory scheme set out in s. 74 to 78, which deal with who is entitled to possession after a notice under the Commercial Tenancies Act is served. The February 13, 2019 order of Hourigan J.A., refusing a stay of the order under appeal and consequentially granting a writ of possession, was ancillary to the order granting vacant possession. It is therefore not an impediment to the Divisional Court’s jurisdiction to hear this appeal.

[4] As a result, the appeal from the January 23, 2019 order granting vacant possession must be made to the Divisional Court.

[5] Accordingly, the appeal in this court is transferred to the Divisional Court pursuant to s. 110 (1) of the Courts of Justice Act, R.S.O. 1990, c. C.43.

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

[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.

780046 Ontario Inc. v. Columbus Medical Arts Building Inc., 1994 CanLII 1188 (ON CA)

2. Did the respondent give the appellant notice under s. 19(2) of the Act?

The respondent re-entered the building and took possession of it in late July 1992. In doing so the respondent took the position that the appellant had breached certain covenants contained in the lease, but not the covenant for the payment of rent. Therefore the respondent was required to give notice in accordance with s. 19(2) of the Act.

Notice is a protection to the tenant. Its purpose is to warn the tenant that its leasehold interest is at risk and to give the tenant an opportunity to preserve that interest by remedying the breaches complained of and, where necessary by compensating the landlord. Because courts have not looked favourably upon the remedies of re-entry, forfeiture, and termination they have insisted that landlords strictly comply with the notice requirement in s. 19(2) of the Act: see Ellis v. Breslin (1974), 1974 CanLII 461 (ON SC), 2 O.R. (2d) 532 (H.C.J.), and Mount Citadel Ltd. v. Ibar Developments Ltd. (1976), 1976 CanLII 770 (ON SC), 14 O.R. (2d) 318, 73 D.L.R. (3d) 584 (H.C.J.), and Koumoudouros v. Marathon Realty Co. (1978), 1978 CanLII 1426 (ON SC), 21 O.R. (2d) 97, 89 D.L.R. (3d) 551 (Div. Ct.).

Mr. Givertz submitted that the appellant can neither remedy the breaches nor provide adequate compensation because there has been a breakdown of the good-faith relationship between the parties that can never be restored. I took his submission to mean that notice was therefore unnecessary. I doubt that it is fair to conclude that the breaches alleged cannot be remedied, but even if that is so it does not do away with the notice requirement. In Mount Citadel Ltd. v. Ibar Developments Ltd., supra, Estey C.J.H.C. said at p. 327:

The notice requirement would seem to apply whether or not the breach is capable of remedy but is not free from doubt. However, the section goes on to state, . . . and, in any case requiring the lessee to make compensation in money for the breach . . .", which indicates a legislative intent to make the subsection applicable to all breaches whether capable of remedy or otherwise.

While Mr. Givertz suggested that the letters of June 4 and June 23 from the respondent's corporate solicitor might amount to notice, I think he fairly conceded during argument that his client did not give the notice required by s. 19(2) of the Act. I agree that proper notice was not given. Neither the June 4 nor the June 23 letter assists the respondent. The June 4 letter deals with the dispute over accounting fees that had been ongoing for several months. It does not comply with s. 19(2). The June 23 letter was sent with the express purpose of clarifying the appellant's obligations under the lease and contemplates the continuation of the relationship, not its termination. Therefore, in my view, the respondent breached s. 19(2) of the Act.

(...)

In Stekel v. Wasylyshyn, [1948] O.W.N. 464 (C.A.), Robertson C.J.O. said at p. 465:

Even assuming that the landlords had a right of re-entry or forfeiture under any proviso or stipulation in the lease -- a matter that is not conceded, for the lease contains no provision for forfeiture or re-entry on non-performance of a covenant -- the landlords are prevented by s. 18 of The Landlord and Tenant Act from enforcing such a right unless and until notice as provided by the statute has been given. Section 13(b) of Order No. 315 does not even make the law of the Province available to the landlords for the purpose of recovering possession, until the notice in writing that it requires is given. The landlords, therefore, were not proceeding, nor entitled to proceed, in accordance with the law of the Province in assuming to forfeit the lease without giving any prior notice whatsoever.

(Emphasis added)

More recently in Rexdale Investment Ltd. v. Gibson, 1966 CanLII 218 (ON CA), [1967] 1 O.R. 251, 60 D.L.R. (2d) 193, this court, in discussing the procedure for re-entry for breach of a covenant other than for payment of rent, said at p. 258:

In summary, prior to the Ontario Act of 1911, both English and Ontario legislation provided a general procedure for re- entry or forfeiture and relief therefrom in the case of all breaches of covenants or conditions (with certain exceptions), what was inapplicable to non-payment of rent. Under that procedure, notice of the breach giving rise to the power of termination (along with some other particulars) had to be given as a prerequisite to the exercise of the power, and the tenant was hence in a position to forestall forfeiture by complying with the demand in the notice for compensation and other amends. (The court indicated that in 1911 the Ontario legislation was amended so that the general procedure, other than the notice requirement, applied to the nonpayment of rent.)

Similarly, Holland J. in Ellis v. Breslin, supra, stated at p. 534:

In my view, the notice was not in conformity with s-s. (2) of s. 19 of the Act since it did not require the lessee to remedy the breach and the lessee was not permitted a reasonable time to remedy the breach. It is quite true that the lessee had, or should have had, knowledge of this breach for some considerable time prior to the bringing of this application. However, the fact of the matter is the notice does not comply with the subsection and, in my view, therefore, the landlord is not entitled to re-enter until s. 19(2) of the Landlord and Tenant Act has been complied with. The injunction will therefore go as asked until s. 19(2) of the Landlord and Tenant Act has been complied with.

Estey C.J.H.C. in the Mount Citadel, case, supra, accurately summed up the position of a landlord who effects a re-entry without giving the requisite notice in the following passage at p. 329:

I therefore conclude with reference to this third question that s. 19(2) of the Landlord and Tenant Act qualifies the right of the lessor in law to re-enter to the extent that the terms of s. 19(2) differ from art. 17, para. 2. The statutory prerequisites to the exercise of right of re-entry apply in my view whether or not the breach is capable of being remedied and thus the plaintiff is required by the statute to give notice in the case of any breach. The plaintiff having failed to give the notice required by the subsection has failed to exercise its right of re-entry in law in the same way and for substantially the same reasons that it has failed to exercise the right in the manner prescribed by the head lease. Therefore the head lease has not been terminated and forfeited and the plaintiff has not re-entered and thus the lease was in effect on January 2, 1975, when the defendant served notice of exercise of option to purchase.

(Emphasis added)

In my view the respondent is in exactly the same position. Because of its failure to give notice its re-entry was invalid, and the lease with the appellant has not been terminated. The appellant is entitled to succeed on this appeal without asking for relief from forfeiture. It is therefore unnecessary to decide whether the motions court judge properly exercised his discretion under s. 20(1) of the Act.