420868 Alberta Ltd. Plaintiff - v. -, 2012 ABQB 25

Court of Queen ’ s Bench of Alberta Citation: 420868 Alberta Ltd. v. 5 Star Trading, 2012 ABQB 25 Date: 20120111 Docket: 1103 17374 Registry: Edmonton Between: 420868 Alberta Ltd. Plaintiff - and - 5 Star Trading, a Division of S.V. Farms Ltd. Defendant _______________________________________________________ Memorandum of Decision of W. S. Schlosser, Master in Chambers _______________________________________________________ [ 1 ] In this case a landlord purported to terminate a commercial tenancy and then distrained.

The question is whether termination and distress are, on the facts of this case, mutually exclusive. [ 2 ] This was a commercial tenancy that went year-to-year. The last yearly lease was from February 1, 2009 until January 31, 2010. [ 3 ] The 2009/2010 lease was not renewed and the lease went month-to-month on the same terms as the annual written lease.

[ 4 ] On June 30, 2011 the landlord served the tenant with a notice to vacate, giving 60 days notice as if the tenancy were being terminated in accordance with paragraph 6 of the written lease. The June 30 th Notice of Termination was expressed to conclude the relationship August 31, 2011. [ 5 ] Notice was given because the Applicant sold the property and the buyer wanted possession September 1, 2011. [ 6 ] The amount owing by the tenant to the landlord has yet to be determined. However, the landlord took the position in August 2011 that the August rent remained outstanding.

It notified the tenant of this in writing August 25, 2011. On August 28, 2011, the landlord seized and removed a Kubota tractor pursuant to a Distress Warrant. [ 7 ] The tenant argues that the landlord has forfeited the lease by giving notice to terminate and therefore cannot distrain. The tenant cites A & M Enterprises v. B.J. Millwork,

(1985) Can LII 1310 (ABQB). This decision of Master Funduk contains a comprehensive review of the authorities. [ 8 ] The landlord cites Brown Ltd. v. Carling O ’ Keefe Breweries of Canada ,

(1989) Can LII 3305 (ABQB) per Conrad J. (as she then was). The landlord argues, in effect, that forfeiture and termination are different things. [ 9 ] Forfeiture and distress are exclusive remedies. The purpose of distress is to cure the breach and to allow the relationship to continue. The purpose of forfeiture is to terminate the tenancy and give the landlord possession. As such, the two cannot stand together. [ 10 ] In the Brown case, Madam Justice Conrad said: It is necessary to determine in each case when forfeiture occurs.

In my view in the present situation it occurs when the landlord acts upon a default to terminate the lease. (para. 22) (Emphasis added). [ 11 ] In this case, the landlord terminated the tenancy, not because there had been a default, but because they had sold the property and the buyer wanted possession. The evidence is that the tenant later defaulted - though the extent of the default remains in issue. [ 12 ] Distress and forfeiture are mutually exclusive if they arise from the same breach. The landlord has to chose the remedy and by choosing, elects irrevocably.

It cannot have its cake and eat it too. [ 13 ] This rationale does not apply when separate events give rise to termination and distress. Whether a termination amounts to a forfeiture depends on the facts of each case. [ 14 ] Finally, if a landlord had no power to distrain at the end of a tenancy, tenants might be less inclined to pay their last month ’ s rent. [ 15 ] The only question here is the validity of the distress. Even though there was only three days left before the end of the tenancy, the earlier Notice of Termination did not amount to a forfeiture.

The effect of the distress is not to extend the lease past the Notice of Termination. [ 16 ] Accordingly, the tenant ’ s application to set aside the distress is denied.

Heard on the 21 st day of December, 2011. Dated at the City of Edmonton, Alberta this 11 th day of January, 2012. W. S. Schlosser M.C.C.Q.B.A. Appearances: Jason Van Doesburg Van Doesburg Law for the Plaintiff/Respondent Timothy Wallis Peterson Krochak for the Defendant/Applicant