Mimi's Parlour Ltd v, 2021 ABQB 254

Court of Queen’s Bench of Alberta Citation: Mimi's Parlour Ltd v 1816112 Alberta Ltd, 2021 ABQB 254 Date: 20210401 Docket: 2003 21089 Registry: Edmonton Between: Mimi's Parlour Ltd Applicant/Cross-Respondent - and - 1816112 Alberta Ltd Respondent/Cross-Applicant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice M. J. Lema _______________________________________________________ A. Introduction [ 1 ] A restaurant tenant seeks an interlocutory injunction or relief from forfeiture against its landlord.

Injunction-wise, and on “serious issue to be tried”, the tenant argues that it did not default on rent and, in fact, is in a surplus position. Accordingly, rent-default termination of the lease was unwarranted. If the lease was validly terminated, forfeiture relief should be granted, largely on the basis of significant leasehold improvements made by it.

[ 2 ] The landlord points to ongoing and increasing rental defaults as justifying termination and the equities overall as precluding forfeiture relief. [ 3 ] I find that the lease was validly terminated, with injunctive relief inapplicable, but grant relief from forfeiture, as explained below. B.

Lease termination Rental Arrears [ 4 ] The restaurant says that the landlord owes it $300,000 for the latter’s share of leasehold improvements (constituting a credit against which rental arrears can be deducted), that in any case the restaurant overpaid rent for a number of months in 2020, that the landlord inexplicably failed to sign up for a rent-relief program offered by the federal government, and that the landlord’s rent accounting is inaccurate, the net result of which is that the restaurant is either in a surplus or a square position on rent. [ 5 ] The landlord says that its share of the leasehold improvements was addressed by reduced rental payments over the life of the lease, that the tenant actually underpaid rent for the months in question, that its decision not to participate in the rent-relief program was justified and, in any case, does not justify less-than-required lease payments, and that its accounting is accurate. [ 6 ] I find that: • the restaurant produced no material evidence of a side (or other) agreement on the $300,000.

In any case,

Article 9 of the lease (“Entire Agreement”) confirms that the lease, which makes no reference to any such indebtedness, “shall supersede and take the place of any and all previous agreements and representations of any kind, written or verbal, heretofore, made by anyone in reference to the demised premises or in any way affecting the building or equipment of which the same forms a part …”.

In any case, the restaurant acknowledges, at para 3 of its application brief and para 10 of its witness’s February 25, 2021 affidavit, that “[the $300,000] was to be repaid to the [landlord] by way of a rent reduction program through to September 14, 2025”; • while the restaurant asserts a “150 per cent overpayment” of rent for certain periods, it produced no evidence of such payments. The restaurant refers to its “payment plan”, which the landlord never signed on to, as the benchmark for calculating overpayments.

In a nutshell, that plan called for payments on a reduced scale (25 per cent of per-lease payments) i.e. as if the landlord had participated in the noted ( Canada Emergency Commercial Rent Assistance ) rent-relief program. With no actual participation by the landlord, reduced payments were not warranted, meaning no overpayments – instead, underpayments – were made. The possible impact of the program is a red herring on the termination aspect; • the restaurant did not show that the landlord’s accounting (reflected in the rental ledger attached as exhibit C to its witness’s affidavit) was off-target in any way.

The landlord’s demand letters and associated accounting for this period are crystal-clear in outlining the rental and other (operating cost and common-area) amounts owing. The landlord first referred to apparent credits of approximately $19,000 , but half of that amount was applied as pre-paid rent (for July through October, 2018), and the other half continues to be held by the landlord as a security deposit, per s. 3.12(

b) of the lease, against the restaurant’s entire lease obligations. The restaurant then emphasized that, at various points, it had reduced accrued rental arrears to zero. However, the last fully-paid-up point was April 9, 2020. After that, rent and associated charges (up to December 1, 2020) tallied to $21,247.14, compared to total payments of $4,713.67 i.e. approximately 22 per cent of the per-lease payments, leaving a shortfall of $15,590.50.

The restaurant did not produce any evidence undercutting or shaking the landlord’s calculations in any way; and • finally, I note that, via its counsel’s November 4, 2020 letter and pursuant to the Commercial Tenancies Protection Act , the landlord proposed a payment plan for clearance of the rental arrears attributable to the pandemic “emergency period” (May 17, 2020 through August 31, 2020), folding in as well certain September and “common area management” costs.

It proposed that those combined arrears (approximately $11,000) be paid at the rate of approximately $900 per month i.e. a pay-out period of approximately one year. However, the restaurant did not respond to that proposal or make one of its own by the appointed deadline (November 16, 2020). [ 7 ] Accordingly, I find that the restaurant had in fact defaulted as reflected in the landlord’s demand letters and that it was entitled, given those defaults, to terminate the lease, per s. 8.03(1) of the lease.

Impact of provincial Covid-19 legislation re commercial tenancies [ 8 ] The restaurant also argued that, through the combined effect of the Commercial Tenancies Protection Act and the same- named regulation, the landlord is barred from terminating or otherwise enforcing the lease for any rent defaults. [ 9 ] However, that Act’s core protection existed only from March 17, 2020 to August 31, 2020.

The latter date comes from the Act’s definition of “emergency end date”, as meaning “August 31, 2020 or such alternative date as may be prescribed by the regulations.” [ 10 ] The regulation in question -- Commercial Tenancies Protection Regulation (AR 138/2020 ) – does not provide for or address in any way an alternative end date.

[ 11 ] Accordingly, the CTPA ’s embargo on enforcement expired at the end of August 2020. [ 12 ] As for the restaurant’s reference to para 6(2)(

a) CTPA (recognition of payment plans possibly extending beyond August 31, 2020), with no evidence of any plan entered into at all, the provision does not assist. [ 13 ] The landlord proposed a plan, to which the tenant did not counter-propose or respond at all. Its proposal was sparked by s. 6 CTPA , which states:

(1) If a tenant is unable to meet the tenant’s rent obligations under a tenancy agreement and this is caused by the Covid-19 pandemic, the landlord and tenant shall enter into a payment plan for the payment of rent .

(2) A payment plan (

a) may extend beyond the emergency end date [i.e. August 31, 2020], and (

b) must account for any payment of fees, penalties or rent by a tenant that the landlord was prohibited by

section 4 or 5 from charging and that has not been refunded to the tenant.

(3) A payment plan has the effect of amending the tenancy agreement to the extent necessary to give effect to the payment plan , and in the event of a failure by the tenant to adhere to a payment plan after the emergency end date, a landlord shall have all remedies available to the landlord under the tenancy agreement as modified by the payment plan . [emphasis added] [ 14 ] Subsection 10(1) CTPA (regulation-making power) refers to regulations “respecting payment plans (paragraph (d)), but the Regulation makes no reference to payment plans. [ 15 ] I note that, per ss 28(2) of the

Interpretation Act , “shall” is to be construed as imperative i.e. per ss 6(1) CTPA , the landlord and tenant must enter into a payment plan. [ 16 ] But what if they fail to do so? [ 17 ] Not only is there no evidence of the landlord and tenant actually making a payment plan, the restaurant’s own description of the “plan” it perceived confirms that one was not made: [The restaurant’s witness] testified that there was a plan in place to pay, and in fact [it] did pay 25% and the remaining 75% was to be paid through the Federal Commercial Relief Program. [ 18 ] However, per s. 2 (“Application of the Act”), the Regulation confirms that: The [ CTPA ] does not apply to commercial premises if the landlord and tenant have, at any time, participated in the Canada Emergency Commercial Rent Assistance program with respect to the commercial premises. [ 19 ] In other words, if the federal program had applied (and it did not), the CTPA would not have applied to these parties.

Accordingly, the “plan” asserted by the restaurant could not have existed. [ 20 ] The CTPA does not expressly address the circumstance of a failure to make a s. 6 plan, for instance, by providing a default formula for a payment plan, a mechanism (e.g. court application or arbitration) for setting a plan failing agreement, a provision deeming acceptance of the latest offer or counter-offer after a defined period, or otherwise. [ 21 ] I find it is implicit that, where one party (here, the landlord) proposes a plan and the other (here, the restaurant) does not accept the plan, make a counter-proposal or respond at all (even to request more time to consider a proposed plan) within a reasonable time, the proposing party is permitted to pursue enforcement (here, terminate the lease for non-payment of rent). [ 22 ] In the circumstances here, with the increasing arrears ($12,762.77 as of October 13, 2020), and with the landlord’s obvious heightened interest , as of late October (when it retained counsel), in enforcing the lease according to its terms , and with the restaurant being put on notice then that the landlord would pursue all available rights and remedies if further rent defaults continued , and with the landlord expressly referring in its November 4, 2020 letter to the CTPA requirement to make a payment plan and proposing a plan (and an at-first-glance reasonable one, spreading out the approximately $11,000 arrears over the following twelve months), and providing almost two weeks for a response, and with a second request on November 19 th for a counter-proposal or any response at all , and with no acceptance of the landlord’s plan, no counter-proposal and no response at all by December 7 th (i.e. over one month from the initial plan proposal), which I find was a reasonable waiting period , the landlord was entitled to treat the restaurant as unwilling to make any plan and, as a consequence, to enforce the lease according to its terms . [ 23 ] In other words, I find that where (as here) a tenant effectively shuts its ears to a landlord’s payment proposal, the tenant loses whatever shelter a s. 6 payment plan would have provided, leaving the landlord free to terminate the lease for payment breaches as if s. 6 had not been enacted.

Impact of the Canada Emergency Commercial Rent Assistance Program [ 24 ] The restaurant also did not show that this voluntary program somehow applied without the landlord’s cooperation or assistance. [ 25 ] In HAS Novelties Limited v 1508269 Ontario Limited , 2021 ONSC 642 , Steele J.’s program description reflects its voluntary nature:

… in April 2020, the federal government introduced a program called Canada Emergency Commercial Rent Assistance (“CECRA”).CECRA was a voluntary program under which eligible landlords and tenants could enter into agreements whereby tenantswould pay 25% of their rent, the government would pay 50% of the rent to the landlord, and the remaining 25% of the rentwould be absorbed or forgiven by the landlord.

The program was available from April through September 2020, and was retroactive,provided the application was made within the applicable time period. [para 10] [emphasis added] [26] In that case, the landlord and tenant did not make such an agreement, but the tenant argued that the landlord had signaled thatit would participate and could not disavow that intention. Steele J. found otherwise: I am satisfied that despite the Landlord’s apparent undertaking to submit the CERCA application, he was not obliged to proceedwith the application.

He had the right to refuse to apply for CECRA, not based on his own failure to inspect the corporate books andrecords, but because he would have the most to lose (i.e., 25% of the rent) by submitting the application. It was a voluntary programand the Landlord elected not to participate. [para 21] … I find that although the Landlord may have given the impression that he would apply for CECRA, there was nopromise or assurance made by his conduct which was intended to affect their legal relationship. It is clear that the Landlord wasconsidering the CECRA program and was leveraging this on the noise complaint issue.

However, based on the record before me,the Landlord did not by his words or conduct promise that the application for CECRA would be made. This was a voluntaryprogram. The Landlord was certainly looking at it and considering it but did not proceed.

Accordingly, having found that there was no promise or assurance made by the Landlord regarding CECRA that was intended toaffect the legal relationship between the Landlord and the Tenant, I find that the Landlord was not obliged to submit theCECRA application. [paras 53 and 55] [emphasis added] [27] In 2487261 Ont Corporation v 2612123 Ont Inc, 2021 ONSC 336 (Lemon J.), the parties acknowledged (para 13) that thatprogram “was optional for landlords.” Conclusion on lease termination [28] For these reasons, I confirm that the landlord was entitled to, and did, terminate the lease for the cited payment failures, withno restriction under either the provincial or federal commercial-tenancy-assistance programs. [29] Accordingly, there is no basis for injunctive relief.

Here I invoke Morgan J.’s decision in Jungle Lion Management Inc vLondon Life Ins Co, 2020 ONSC 165: … these introductory facts signal that there are no grounds for the injunction sought in the first instance by the Plaintiff. Under art.14.2 of the Lease, the Landlord was entitled to terminate the tenancy for non-payment of rent as soon as the rent went unpaid on thefirst of each month. In fact, that

article provides that the Landlord can terminate without notice in the event of non-payment of rent,although the Landlord did as a courtesy provide the Plaintiff with notice of termination. In any case, the Plaintiff delivered its rent cheque to the Landlord on November 11, 2019 and the cheque was returned by the bank. Thereis no prima facie case or issue to be tried with respect to the termination of the tenancy under the Lease. The Plaintiff concedes thatat the time of termination it was in default of rent.

The Landlord had the right to terminate, and there are no grounds on which toenjoin it from doing so: RJR-Macdonald Inc. v Canada (Attorney General), (SCC), [1994] 1 SCR 311. [paras 5 and 6of Jungle Lion] [30] Same here: the tenant does not have even a prima facie case against the lease having terminated, in the face of its clear rent-payment failures, the lease’s default terms, the expiry of more than seven days after the late November payment demand (among others),and the non-application of the provincial and federal programs. [31] The focus then shifts to the tenant’s back-up argument i.e. relief from forfeiture.

C. Relief from forfeiture Core principles [32] The core principles governing this relief were reviewed in Ontario (Attorney General) v. 8477 Darlington Crescent, 2011ONCA 363: … Courts of equity have always had the power to relieve against the forfeiture of property consequent upon a breach ofcontract: see McBride v. Comfort Living Housing Co-Op (1992), … (ON CA), 7 O.R. (3d) 394 at 402 (C.A.).

Thatpower is now expressed in various statutes dealing with specific kinds of contracts (e.g. contracts of insurance, leases) and hasbeen given more general expression in s. 98 of the Courts of Justice Act …: A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.[Alberta equivalent is s. 10 of the Judicature Act: Subject to appeal as in other cases, the Court has the power to relieve against allpenalties and forfeitures and, in granting relief, to impose any terms as to costs, expenses, damages, compensation and all othermatters that the Court sees fit.] The power to relieve from forfeiture is discretionary and fact-specific: Saskatchewan River Bungalows Ltd. v.

Maritime LifeAssurance Co., … (SCC), [1994] 2 S.C.R. 490 at p. 504. The power is predicated on the existence of circumstances

in which enforcing a contractual right of forfeiture, although consistent with the terms of the contract, visits an inequitableconsequence on the party that breached the contract. Relief from forfeiture is particularly appropriate where the interests of theparty seeking enforcement by forfeiture can be fully vindicated without resort to forfeiture. Relief from forfeiture is grantedsparingly and the party seeking that relief bears the onus of making the case for it: 1497777 Ontario Inc. v. Leon’s FurnitureLtd. (2003), … (ON CA), 67 O.R. (3d) 206 at paras. 67-69, 92 (C.A.).

In Saskatchewan River Bungalows, at p. 504, Major J. identified the factors relevant to the exercise of the power to grant relief againstforfeiture: ... The factors to be considered by the court in the exercise of its discretion are the conduct of the applicant, the gravity of thebreaches, and the disparity between the value of the property forfeited and the damage caused by the breach.

The first factor, the conduct of the breaching party, requires an examination of the reasonableness of the breaching party’s conductas it relates to all facets of the contractual relationship, including the breach in issue and the aftermath of the breach. OsborneJ.A. explained the nature of this inquiry in Williams Estate v. Paul Revere Life Insurance Co. (1997), (ON CA), 34O.R. (3d) 161 at p. 175 (C.A.): The reasonableness test requires consideration of the nature of the breach, what caused it and what, if anything, the insuredattempted to do about it.

All of the circumstances, including those that go to explain the act or omission that caused the lapse(forfeiture) of the policy, should be taken into account. It is only by considering the relevant background that the reasonableness of theinsured's conduct can be realistically considered. [Emphasis added.] The examination of the reasonableness of the breaching party’s conduct lies at the heart of the relief from forfeiture analysis. A partywhose conduct is not seen as reasonable cannot hope to obtain relief from forfeiture: see Paul Revere at p. 175; Saskatchewan RiverBungalows at pp. 504-05.

The second factor identified in Saskatchewan River Bungalows, the gravity of the breach, looks both at the nature of the breach itselfand the impact of that breach on the contractual rights of the other party: see Leon’s Furniture at paras. 75-78. If, for example, theforfeiture provision operated as a means of securing payment of the rent required under a lease, the fact that the breaching partyhad paid all amounts owing could obviate the need to resort to forfeiture and support a claim for relief from forfeiture.

The third factor identified in Saskatchewan River Bungalows engages a kind of proportionality analysis. If there is a large differencebetween the value of the property to be forfeited and the amount owing as a result of the breach, equity will favour relief fromforfeiture. For example, in Liscumb v. Provenzano (1985), (ON SC), 51 O.R. (2d) 129 (H.C.), aff’d (1986), (ON CA), 55 O.R. (2d) 404 (C.A.), the trial judge, in granting relief from forfeiture, observed that the property to beforfeited was worth between three and four times the amount owing on the debt giving rise to the breach.

The trial judge relied on thisdisproportionality between the debt owing and the consequences of the forfeiture as one factor in favour of granting relief fromforfeiture. [paras 86-92] [emphasis added] Application of the principles (case-law examples) [33] In Alwell Mechanical Ltd v Royal Bank of Canada, 1985 ABCA 193, the Court of Appeal granted forfeiture relief (byallowing an appeal), emphasizing the proportionality factor: During the course of the lease the appellant has put more than $400,000.00 in improvements into the property.

Indeed, it is evidentthat some money which should have been paid in rent and for the other charges stipulated by the lease has been channeled intoimprovements. The arrears as at the date of this hearing amount to some $90,000.00 even after giving effect to the terms of an ordermade in this court staying the order below. Under the terms of the stay order $11,000.00 a month has been paid to cover current rent of$4,000.00 and to reduce the arrears.

We are all of the view that if the termination of the lease is permitted to stand, the apparent windfall to the respondent is so out ofproportion to the amount of arrears that a court of equity ought to intervene subject to terms which make the respondent wholefor the moneys wrongfully withheld. Consequently, we allow the appeal and substitute for the order made an order relieving againstthe forfeiture of the lease. This order will be subject to the following terms: 1.

That the appellant will by December 31st, 1985 pay all arrears including interest in the amounts provided by the lease, so thatas at that date the lease payments will be completely current. During the period until December 31st a minimum of $15,000.00 will bepaid on the first day of each month with the balance due by December 31st. 2. The appellant will by December 31st, 1985 pay to the respondent solicitor and client costs of the application in the court belowand of this appeal.

If the appellant fails to abide by the terms stipulated the respondent will be entitled to an order declaring the lease terminated and to awrit of possession effective immediately thereafter. [paras 1-3] [emphasis added] [34] The proportionality factor was also noted in Canpar Holdings Ltd v Petrobank Energy and Resources Ltd, 2011 ABCA 62: Relief from forfeiture should be granted when forfeiture would result in a lessor receiving an amount out of proportion to the arrears:see Chroniaris Enterprises Ltd. v. MKRS Pub Inc., 2008 ABCA 172, 432 A.R. 286; Alwell Mechanical Ltd. v.

RoyalBank (1985), 1985 ABCA 193 , 41 Alta. L.R. (2d) 8 (Alta. C.A.). Disproportion was found to exist in the latter case, where thevalue of the loss was just under 4.5 times the value of the lessee’s improvements into the property. [para 47] [35] In 1198816 Alberta Ltd v Bourbon Lounge Inc, 2008 ABQB 600, S. Martin J. (as she then was) elaborated on the “tenant’s

conduct” factor: A court does not favour forfeiture and the burden of proof is on the tenant, as applicant, to establish why forfeiture would beunfair. In Armenian Community Centre v. Morland Marketing Inc., [1995] O.J. No. 3730 (Ont. Ct. Just (Gen.

Div.)) (QL), JusticeCumming outlined when such a burden has not been met at para. 76: A court will decline to exercise its equitable discretion in favour of an applicant: the applicant has failed to attempt diligently to complywith the terms of the lease; the applicant has failed to come to court with clean hands; the applicant has engaged in improper conduct;or the applicant has in any way attempted to mislead the court: Kochhar v. Ruffage Food (1992) 23 R.P.R. (2d) 200 (Ont. Gen.Div.); Dominelli Service Stations Ltd. v. Petro-Canada Inc., [1992] O.J. No. 1158 (Ont. Gen. Div.); rev’d [1992] O.J. No. 1823 (C.A.).

The conduct of the tenant is a relevant consideration in determining whether relief from forfeiture will be granted and is offundamental importance. If conduct is reprehensible, substantial and persistent, no relief from forfeiture can be granted. Failureto remedy one’s breaches bars relief from forfeiture: 931576 Ontario Inc.; King Street West Ltd. v. 418 Wellington ParkingLtd. (1994), 40 R.P.R. (2d) 220, (Ont. Ct. Just. (Gen. Div.)). [paras 228-229] [emphasis added] [36] After reviewing the tenant’s conduct and the other forfeiture factors, S.

Martin J. denied forfeiture relief: The Respondent has failed to establish why relief against forfeiture should be granted. The conduct surrounding the Lease AmendingAgreement [described at paras 242-254], and to a much lesser extent not disclosing an existing Written Lease in attempts to seekbetter rents, operate to undermine any equities the Respondent could invoke. In my view, the tenant has not established the firstthreshold of coming to court with clean hands.

In turning to the other factors in relation to forfeiture while I am not persuaded there are other breaches in relation to the parkade, the useof the premises as a bar or the interaction with the fire marshal, there has been a history of tension and distrust between the parties, evenif they have tried to remain business like. There are many issues on which they differ, and even though main issue is the properamount of the rent, it cannot be said that money is all that is at issue. There was not much evidence on the relative value of the property forfeited and the damage which may be caused.

However,forfeiture would work hardship for the [tenant]. Likely the business would be lost and he was entrusted with monies from hisfamily. A Court is reluctant to grant forfeiture but the facts in the case at bar support that remedy. Nor has there been a waiver of forfeiture. This is not the case where a landlord has simply accepted rent with the full knowledge ofthe tenant’s breach of covenant as in Delilha’s Restaurants Ltd. v. 8-788 Holding’s Ltd. (1994), (BC CA), 92B.C.L.R. (2d) 342 (C.A.)and Fitkid (York) Inc. v. 1277633 Ontario Ltd., [2002] O.T.C. 749 (Ont.

S.C.J.).The courts will look at theconduct of the landlord to determine if there has been an election not to terminate the lease in the circumstances after the right offorfeiture arises.

No such forfeiture arises on the facts in the case at bar. [paras 255-258] [emphasis added] [37] In Bank of Montreal v Phoenix Rotary Equipment Ltd, 2007 ABQB 86, Bielby J. (as she then was) explained the properapproach to proportionality (rejecting a landlord’s focus on lost higher-rent opportunities): … York [the landlord] argues that the disparity between the value of the property forfeited and the damage caused by the breach shouldresound in its favour, pointing out that it will lose $2 million in additional rental and the increase in market value of the buildingshould the Option be exercised by Reliance, losses which it says make the $460,000 recovery which the creditors will lose if theassignment of the Lease to Reliance is inoperable pale by comparison.

This argument rather brazenly confuses the test. It is not the lossof a windfall to a landlord which a Court should strive to avoid in considering relief from forfeiture but rather the loss of rentand other benefits to the landlord under the original lease. That loss in this case is nil, given that the Receiver/Trustee has committedto payment of all rental arrears owing under the Lease forthwith upon this decision being rendered. Ample case authority supports the proposition that loss of a windfall is no reason to deny relief from forfeiture. In S.M.L. IndustriesLtd. v.

Highlander Cleaners Ltd. (AB QB), [1987] 78 A.R. 110 a receiver was granted relief from forfeiture of a 30year lease which the landlord purported to terminate simply because a receiver had been appointed, under lease terms similar to the onesin question here.

One of the factors considered in granting relief was that the forfeiture would have resulted in a substantialwindfall to the landlord because it would result in significant realty improvements vesting in it 20 years earlier than what hadbeen provided for in the lease; see also Gentra Canada Investments Inc. v. 724270 Ontario Ltd. 1994 CarswellOnt 3852, aff’d 1995CarswellOnt 3912. [paras 43-44] [emphasis added] [38] In Rahawanji v. Gwendolyn Shop

(1973) Ltd., 2011 ONCA 771, the ONCA upheld a denial of forfeiture relief, emphasizinga non-timely application by the tenant, many months of overdue rent, and no evidence of “demise risk” to the tenant’s business: The appellants seek to set aside the order of Murray J. dismissing their application for relief from forfeiture in relation totheir tenancies of two commercial leases in a small shopping plaza in downtown Oakville. Ms.

Lev-Farrell argues strongly on theirbehalf that the application judge erred in failing to take into account that relief from forfeiture is generally granted where allthat is involved is the question of monetary arrears and in failing to address him mind to whether the default could be cured onterms in order to avoid the loss of their businesses. We do not agree. Relief from forfeiture is a discretionary remedy and is not granted as a matter of course.

As Doherty J.A. notedin Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363, at para. 93, both in civil and criminal cases: Relief from forfeiture is very much the exception and will be granted only where the party seeking that remedy clearly makes the casethat forfeiture would be an inequitable and unjust order in all the circumstances. This is particularly so with respect to a commercial lease.

Here, we are satisfied that the application judge considered the relevantcircumstances and he was particularly entitled to take into account the fact that the appellants had not proceeded to the hearing of the

application in a timely fashion and that they had not paid any rent in the meantime in spite of the landlord’s offer to accept payment on a without prejudice basis. There were arrears of seven month’s rent at the time of the hearing. In addition, there is no evidence of any real prejudice to the appellants if relief from forfeiture is not granted in the sense that that, in itself, would result in the demise of their businesses .

Accordingly, we see no error in the exercise of the application judge’s discretion and the appeal is dismissed. [emphasis added] [paras 1- 4] [ 39 ] In Ontario International College Inc v Consumers Road Investments Inc , 2020 ONSC 6772 , Schabas J. declined relief from forfeiture, finding tenant shortcomings on all three key factors : The conduct of OIC has been unreasonable. It has missed payments or made payments that came back “NSF” throughout the tenancy. Understandings to make payment have been reached several times and then been breached by OIC .

This conduct pre- dates the COVID-19 pandemic and the tightening of currency controls by China, the latter of which is a business risk to be borne by the applicants. Promises have been repeatedly made and broken, including non-compliance with court orders since the commencement of the application. The gravity of the breaches is significant. The amount not paid is substantial . The length of time these breaches have been continuing is also a consideration in assessing the gravity of the breach.

Furthermore, OIC has failed to provide financial information, leading to the inference that it is not able to pay the amounts outstanding . This is despite assertions made by Jiang in July that business prospects were expected to improve and that funds would be available to make payments of $300,000.00 and $150,799.77 in August. The respondent, on the other hand, has been patient and provided OIC, and OIT, many opportunities to bring rent payments into good standing, including during this litigation.

It has taken steps to mitigate its losses by entering into a lease with another entity for a portion of the premises, but has been prevented from complying with that lease due to this application. This supports the conclusion that the right of re-entry and forfeiture is not being exercised to secure the payment of money ; indeed, the respondent has provided OIC with access to the premises and the ability to remove its possessions and equipment.

As to the disparity, or proportionality, factor, while OIC claims it has invested approximately $1 million in improvements, it has failed to prove expenses of more than $200,000.00, and much of that is for equipment or other items that the respondent expects will be removed. On the other hand, as of August 1, 2020, OIC owed $450,779.77, an amount that has increased considerably since then. And the related company, OIT, which has abandoned its claim for relief, was in arrears in the amount of $517,695.86 as of August 1, 2020 .

Accordingly, this is not a case like Jungle Lion where the termination of the tenancy will have a disproportionate impact on the tenant such that the equities favour relief from forfeiture . Unlike Jungle Lion , in this case the tenant may not lose its entire investment in the property, court orders have already been issued and not been complied with, and the amount of the loss to the tenant is considerably smaller than the amount of rent outstanding .

In my view, therefore, the test for relief from forfeiture has not been met by OIC. [paras 39-44] [ 40 ] In Jungle Lion (cited above), Morgan J. highlighted various tenant shortcomings (NSF rent cheque, failure to provide monthly sales reports, apparently causing a flood of the rental premises, and using fire-hazard heaters) but nonetheless granted relief from forfeiture (on strict conditions), emphasizing the proportionality (otherwise-lost investment in leasehold improvements) factor : In my view, the Plaintiff has done little to foster confidence in the Landlord or to prompt a court to invoke an equitable remedy on its behalf.

That said, if Justice Brown was correct that the Plaintiff stands to lose a $300,000 investment in the Premises, a termination of the tenancy will certainly have a disproportionate impact on it.

It will effectively lose its entire investment in the Premises . [para 21] Covid-19 pandemic as a factor [ 41 ] In 2487261 Ont Corporation v 2612123 Ont Inc (cited above), Lemon J. restated the relief-from-forfeiture principles and granted relief, emphasizing (among other factors) landlord-created-uncertainty over whether it was planning to seek relief under a government rental-assistance program : The parties agree that the necessary principles for me to apply with respect to granting such relief are set out in Jungle Lion Management Inc . v.

London Life Insurance Company , 2019 ONSC 780 and Michele’s Italian Ristorante Inc. v. 1272259 Ontario Ltd. , 2016 ONSC 4888 . That is to say that I should consider: 1. The conduct of the applicant and gravity of the breaches; 2. Whether the object of the right of forfeiture in the lease was essentially to secure the payment of money; 3. The disparity or disproportion between the value of the property forfeited and the damage caused by the breach; 4. Whether the tenant comes to court with clean hands; 5. Whether there has been an outright refusal to pay rent; 6.

Whether the rent has been in arrears for a short or long time; and

7. Whether the landlord has suffered a serious loss by reason of the moving party's delay in paying rent. Given those factors and the circumstances in total, I find that Symphony is entitled to relief from forfeiture. I find that forfeiture would be an excessive remedy. I take into consideration the following factors. Symphony [tenant] was reasonable in assuming that 261 was not expecting full payment of rent and was making application pursuant to the outstanding process. 261 was unreasonable in lulling Symphony into thinking that the rent was in abeyance or reduced.

While 261 was within its rights to not apply for the program, it was unreasonable to lull Symphony into thinking otherwise. Those circumstances were compounded by the inconsistent notices in early October. While I have no evidence of whether 261 was eligible for the program, in hindsight, it might have been well to do so. Even if I am wrong with respect to my finding above, if 261 did not agree, it showed bad faith in not making its intentions clear. In any event, Symphony showed good faith in making the payments it did in a time of pandemic. [paras 50-53] [emphasis added] [ 42 ] In Hunt’s Transport Limited v.

Eagle Street Industrial GP Inc ., 2020 ONSC 5768 (Broad J. rejected a generalized invocation of the pandemic in a bid for forfeiture relief: … the Tenant submits that the court should take into consideration the Coronavirus pandemic currently impacting businesses across the world. It says that businesses which are ineligible for government assistance “should receive relief in the form of equitable solutions granted by the courts .” It relies upon the recent case of The Second Cup v. 2410077 Ontario Ltd . , 2020 ONSC 3684 at para . 58 in support of this submission.

I do not accept the Tenant’s submission that the effect of the COVID-19 pandemic is a relevant consideration in the circumstances of this case . As indicated above, it advances the policy argument in its Factum that businesses such as it which do not qualify for rental reduction through government programs should receive equitable relief from the courts.

In The Second Cup [cited below], Kimmel J. at para. 58 referred to the following circumstance as one of four which favoured the exercise of the court's equitable jurisdiction and discretion to grant relief from forfeiture to the tenant: In the midst of an unprecedented pandemic that shut down most of Second Cup's operations and the country's economy and had its senior management scrambling to negotiate with multiple landlords and franchisees over a short period of time, the landlord terminated the Lease for failure to pay 25.5% of one month's rent, totalling $4,527.55 in April 2020 and on the first business day after the May 2020 rent was due.

This passage does not support the broad policy proposition advanced by the Tenant in its Factum. It is simply an example of the court considering the relevant circumstances in applying the three factors from Saskatchewan River Bungalows and, in particular, the third factor which calls for a weighing of the impact of forfeiture on the tenant against the effect of the tenant’s breach on the Landlord.

At paras. 86 to 91 of her Affidavit filed in support of the Application, Darlene Hilliard addressed the impact of the COVID-19 pandemic, deposing that “Hunt’s has not been spared [from the economic downturn due to the pandemic] and we are facing significant issues and uncertainty.” She offers no particulars of the specific impact of the pandemic on the Tenant’s business.

It is evident that, as a commercial trucking/logistics company, it was not required to cease operations at any time since the onset of the pandemic. [decision: temporary relief from forfeiture to give tenant a chance to clear arrears, with interest, within 20 days] [paras 68, 76-78, and 80] [emphasis added] [ 43 ] In The Second Cup Ltd v 2410077 Ontario Ltd , 2020 ONSC 3684 , Kimmel J. granted relief from forfeiture, emphasizing these factors (including the pandemic’s impact): The circumstances favouring the exercise of the court’s equitable jurisdiction and discretion to grant relief from forfeiture to Second Cup include many of the circumstances described in paragraph 98 of Second Cup’s factum and address all of these three criteria, namely that: (

a) In the midst of an unprecedented pandemic that shut down most of Second Cup’s operations and the country’s economy and had its senior management scrambling to negotiate with multiple landlords and franchisees over a short period of time, the landlord terminated the Lease for failure to pay 25.5% of one month’s rent, totalling $4,527.55 in April 2020 and on the first business day after the May 2020 rent was due . (

b) Second Cup had been a tenant at the premises for 10 years and had recently signed an extension for an additional 10 to 20 years and made payments to the landlord in excess of $50,000.00 in addition to paying rent for the month of March 2020. (

c) The demands of the landlord preceding its re-possession of the premises and termination of the Lease had been focussed on the payment of past and future rent . (

d) The plaintiffs’ uncontested evidence is that the RSA application and the planned cannabis shop at the premises are of the utmost importance to them and the termination of the Lease could jeopardize not only the licence for the premises but the licences for their other proposed locations as well, which they value at well in excess of the rent arrears at issue . The landlord defendants argue that when a party seeks to be relieved from forfeiture based on a non-payment of rent the court should consider criteria from Michele’s Italian Ristorante Inc. v. 1272259 Ontario Ltd. , 2016 ONSC 4888 , at paras. 35-36 .

In that decision, the court set out criteria for relief from forfeiture generally at para. 35, and separate, more specific criteria at para. 36, where the alleged default is based upon the non-payment of rent:

(

a) the tenant comes to court with clean hands; (

b) whether there is an outright refusal to pay rent; (

c) the extent of the rental arrears; and (

d) whether the landlord has suffered serious loss due to the delay in paying rent. See also: 2324702 Ontario Inc. v. 1305 Dundas , 2019 ONSC 1885 , aff’d 2020 ONCA 353 . I have considered these additional factors, and they all favour the plaintiffs. (

a) The fact that there was one prior dispute in 2015 about the payment of rent that led to an amendment to the Lease does not suggest a pattern of default or lack of clean hands. The rental arrears were not significant as of the beginning of May, especially when considered in light of what was happening in the world as a result of the COVID-19 pandemic . (

b) Nor was the March 25 letter from Second Cup indicating that it and its franchisees would not be able to pay April rent on the first of the month an outright refusal to pay rent as the landlord defendants suggest. It was a reasonable and transparent communication to landlords by a responsible corporate tenant of numerous premises across the country. (

c) Further, the landlord defendants claim that they have significant mortgage carrying costs but have not put in any evidence about actual prejudice that they have suffered as a result of not having been paid the balance of April’s rent and May’s rent under the Lease . [paras 58-60] [emphasis added] Key factors here [ 44 ] Applying the guidance of the above cases, these are the key factors here: • reasonableness of the tenant’s actions: o the tenant was admittedly haphazard in paying its rent from summer 2018 through until April 2020, as reflected in the landlord’s rent ledger.

However, at various points, it squared up its arrears , bringing its rental account current in October 2018, January 2019, November 2019, December 2019, January 2020, February 2020, March 2020, and April 2020, aside from making other rental payments along the way. While the landlord frequently had to demand rent payments via letter, it was not required to commence legal proceedings or otherwise step up enforcement, until the fall of 2020 .

As far as I can tell, the landlord effectively acquiesced to the tenant’s haphazard payments and, in any case, was made whole as late as April 2020; o from that point, rental arrears began accumulating again , up to approximately $15,000 by early September. But the larger context is important here, in understanding how and why those initial arrears came about.

In early May 2020, the tenant emailed the landlord’s agent requesting (in part): Please review the attached Government announcement in relation to [presumably Covid-19-related] rent subsidies . [A tenant contact] indicated that she made full payment for April rent. With that payment we are satisfying our portion for May and June’s rent .

Please note that July’s rent will be discounted by 25% due to overpayment. … o in other words, proceeding on assumptions that the landlord had decided, or would decide, to participate in a government rent-subsidy program and that the tenant’s rent would effectively be reduced to one-quarter of standard rent, the tenant decided to treat its April rent payment as satisfaction of its (perceived) 25 per cent rent obligation for April, May, June and July .

As it turned out, with the program in question being voluntary and requiring (at minimum) landlord participation, the tenant’s “only one-quarter payment” proposal was premature .

But the point here is that the tenant was proceeding on an apparently good-faith basis (and the landlord did not shake that appearance on cross-examination of the tenant’s representative) that a government rent-subsidy program was applying or would apply i.e. these spring and summer 2020 rent payments were not arbitrarily or randomly reduced ; o interestingly, the landlord’s only apparent response (or non-response) was a May 20, 2020 letter demanding payment of $1,885.36 (rent and related amounts due May 1, 2020).

However, the letter made no reference to the tenant’s May 6 email asking the landlord to review the government rent-subsidy announcement . And the landlord’s next demand letter was not sent until on or around July 13 (demanding May, June and July 2020 rent payments totalling approximately $5,500). It too did not make any reference to the tenant’s “please review rent subsidy program” request . In other words, with its May letter, the landlord left the reasonable impression that it had not yet received, or at least processed, the tenant’s request that it consider the rent-subsidy program .

And the lack of any communication at all from the landlord for the rest of May, for June, and the first half of July 2020 did nothing to dispel that impression i.e. that the tenant’s “please review program” request was alive or at least had not been rejected ; o this is reflected in the tenant’s July 26, 2020 email to another of the landlord’s agents, stating (in part): “I am forwarding my May 6, 2020 email … which is self-explanatory.

I will also forward you additional Government press released for July rent on a separate email for you tomorrow.” At that stage, and despite the landlord’s May 6 and July 13 letters (again, making no mention of the rent-subsidy program), the tenant still reasonably, or perhaps naively, understood that the landlord was participating, or would participate, in the program ; o it was not until August 7, 2020 that the landlord’s agent advised (in part): “The Landlord will not be applying for the CERCA program.

The option to open for take-out and pick-up services was available for restaurants early on in this Covid pandemic.” In other words, for the first time, the landlord addressed the tenant’s request to examine the rent-subsidy program and advised it was not participating. The point here is not that the landlord was obliged to participate in that program (it was not); it is that the landlord allowed the tenant to believe or at least hope that the landlord was participating, or would participate, for the months of May,

June, July and August 2020 ; o the tenant’s representative gave evidence on cross-examination that, even after receiving that notice, he was still not sure that the landlord was not participating. His explanation was that he was not sure that the landlord’s agent actually spoke for the landlord. I find his explanation somewhat puzzling and do not place any weight on it. As I see it, by mid-August, the tenant knew, or should reasonably, have known, that the landlord was not participating in the program.

This is borne out in his August 16 th and 28 th messages effectively acknowledging the landlord’s decision; o per the landlord’s rental ledger, the rental tab was approximately $5,700 by the end of July 2020, against which the tenant had paid $1,885 (i.e. the “allocated against four months” payment in early April) i.e. the tenant had paid approximately one-third of what it assumed was owing (i.e. if the rent-subsidy program applied) i.e. more than its perceived “25 per cent” share ; o then August and September rents came due, plus a common-property-area charge of approximately $5,000 .

At the end of August, the tenant sent another email to the landlord’s other agent, stating (in part): Responding to your recent [August 19, 2020 email confirming the landlord was not participating in the rent-subsidy program], please note that the rent for April, May, June and July are covered 75% by Government and 25% by tenant (according to the government initiative and rule). As you notice, under this rule, the Landlord gets 100% rent. [Actually, the program called for landlords to bear 25% of the weight i.e. forego that percentage of the rent.] Attached I am sending you a copy of our mailed cheque.

This cheque covers the rent for the months of August and September . Our solicitor will be handling the rent for the above-noted months [i.e.

May-July] accordingly. o the rent ledger indeed reflects receipt of a $3,770.70 cheque in early September, which represents the August and September 2020 rental payments; o however, even with that payment, the combined effect of the underpaid May-August rents, plus the common-property-area payment was arrears of approximately $11,000 as of early September, which grew, with October, November and December 2020 rents, to approximately $15,500 by the time of termination . (The tenant made one other payment ($942.97) that fall, on November 2, 2020); o as for the reasons for the latter defaults , the tenant’s representative gave evidence (December 15, 2020 affidavit, para 6) that: During the COVID-19 pandemic in 2020, and having its greatest economic effect beginning in April 2020, the [tenant] suffered a decrease in revenues and even with the reduction in revenue the [tenant] kept all staff employed and the [tenant’s] proprietors paid the shortfalls personally to keep the business alive; o on cross-examination, that witness was simply asked (on this subject): [QUESTION] Okay.

And you’ve indicated that Mimi’s revenues went down following the COVID pandemic. Does Mimi’s keep track of its monthly revenues? [ANSWER] Absolutely. [QUESTION] Okay. So, you could determine on a month-by-month basis for each month since you’ve been open what your revenues are? [ANSWER] Correct. [QUESTION] Okay.

And you could determine that after, I guess, March of [2020] when the pandemic sort of started, the first shutdown and the subsequent shutdowns, you could show me exactly what the dollar amount was in each month and the difference between the year previous. [ANSWER] Absolutely. o the landlord did not actually ask for the revenue figures, presumably satisfied that, on the injunction aspect, the tenant had conceded its losses could be quantified.

The key here is that the landlord did not challenge the tenant’s evidence that its revenues deteriorated throughout, and because of, the pandemic ; o in the end, the landlord’s “terminating lease” letter (December 7, 2020) outlined total accumulated arrears of $15,590.50.

On December 10, 2020, the tenant delivered a cheque for that amount to the landlord “which brings the lease into good standing”, which the landlord refused to accept on that (lease-in-good-standing) condition and which it has still yet to cash; o conclusion on reasonableness of the tenant’s actions : the tenant’s actions were not perfect by any stretch, but in all the circumstances, they were reasonable or were at least not so unreasonable as to weigh heavily against the tenant here. Fundamentally, this dispute is about unpaid rentals i.e. not other lease breaches .

Some of the arrears accrued during a period when the tenant plausibly understood that a rent-subsidy program was operating or would operate . Even in that period, the tenant paid its perceived appropriate rent . After the tenant learned that the landlord was not participating, it paid its full August and September 2020 rent , albeit not the common-property-area charge, and it defaulted on October, November, and December rent.

But this was in the depths of the pandemic, when it is common knowledge that restaurants were almost universally hard hit by decreased patronage and decreased service capacity , which the tenant’s evidence confirmed. And, admittedly post-termination, the tenant tendered the full amount of the rental arrears (albeit on the condition that the lease would be reinstated). In all these circumstances, I cannot conclude that the tenant’s actions were fundamentally unreasonable; • gravity of the tenant’s breaches : this somewhat overlaps with the “reasonableness” review.

The tenant allowed rental arrears to accrue up to approximately $15,500, representing approximately five months rent, plus common-property-area costs. But, as noted, the

tenant tendered the full amount of the arrears i.e. the landlord would be whole if it cashed the December 10 th cheque.

The landlord did not point to other adverse consequences or other (non-rent) lease breaches or at least did not detail them . (The landlord gave evidence (January 6, 2021 affidavit, para 4) that “Mimi’s failure to pay its obligations caused difficulties for [the landlord] to pay its obligations”, but it provided no details of those difficulties.) The landlord acknowledged that the rental amount charged to the tenant was “significantly below typical market rates”, in light of “certain [leasehold] improvements” made by the tenant (discussed further below).

Presumably, the landlord could rent the premises to another tenant at a significantly higher rate; but (per the analysis of Bielby J. (as she then was) in BMO v Phoenix Rotary (cited above)), that is not a consideration in the forfeiture analysis.

I conclude that, while the rental arrears accumulated to a material amount, the tendering of the full arrears, within three days of termination (and admittedly coming too late to prevent termination) effectively counters the gravity of the rent-payment breaches. • proportionality factor : here the tenant stressed its investment of approximately $950,000 to rehabilitate what the landlord admitted was a “dilapidated” and “in disrepair” vacant building , making it suitable for a restaurant.

The landlord’s witness stated she had “no idea” how much the tenant had actually invested to rehabilitate the building and outfit it for its restaurant. She said “I have never seen his invoices. It could be $9,000. It could be $900,000. I have not seen a single thing.” As I understand it, it was a sore point between the landlord and the tenant that the latter did not provide sufficient or timely (or both) documentation of its construction costs to the landlord to allow it to access certain municipal grants for building-façade improvements.

That is one reason why the landlord alleges uncertainty over the tenant’s actual costs. The tenant’s witness gave this evidence (December 15, 2020 affidavit, para 5): The [tenant] built the restaurant, including the building, on the Commercial Space, and the approximate cost to the [tenant] to complete the construction was $950,000 CAD, which was paid by the [tenant]. As such, the [tenant] has invested a significant sum in the improvement of the Commercial Space.

Furthermore, $300,000 of the aforementioned amount has been spent on behalf of the [landlord], by the [tenant], whereby the [landlord] agreed to repay this amount through a rent reduction program by September 14, 2025 as outlined as a rent reduction at the top of page 6 of the Lease Agreement. Here is the cross-examination on that evidence: QUESTION: I understand you have indicated … that Mimi’s completed construction of the restaurant prior to opening and that the cost of that was in the range of $950,000 …. ANSWER: Correct.

QUESTION: Could you provide invoices in relation to the amount spent by Mimi’s improving … the restaurant? ANSWER: That would be no problem. As far as I can tell, that dialogue did not crystallize into a formal undertaking or at least one recorded as such in the cross-examination transcript. I do not know whether the landlord followed up on its request.

However, during his submissions at the application, the landlord’s counsel commented, as part of his submissions on irreparable harm (injunction issue): What my friend’s brief has said, as well as mine, is that a party’s monetary loss or significant expenditure will usually not amount to irreparable harm . In this case, the evidence that we have comes from Mr. Rahmani [tenant’s witness] and it is one paragraph in his affidavit, paragraph 21, and what he said is the irreparable harm here is money that was spent on construction.

So, he has actually defined it in a number of different places [including para 5 of his affidavit, as reproduced above], and my friend has argued “it is $950,000.” We did not see any receipts or anything, but, you know, it is a defined dollar amount . By its nature, this is expressly quantified – “We know down to the dollar, this is how much money I am losing here”. So, this is clearly not irreparable.

In light of the landlord’s approach here (effectively taking the tenant’s construction-costs evidence at face value ), and (as I recall) having heard no complaints from the landlord at the application about non-production of construction receipts , and noting a landlord acknowledgment, during questioning, that the construction of Mimi’s Restaurant was “a major undertaking ” and again the above-noted acknowledgments that the building was previously dilapidated and in disrepair , and also noting landlord evidence that “We have provided [the tenant] very, very cheap rent in return for him going to get the [municipal] grant, in return for his investment in the building ”, I am prepared to accept the tenant’s evidence of $950,000 in construction costs.

If those factors are insufficient to anchor that finding, I also cite this lease description of required improvements to the rented premises (Schedule C, including “Lessee’s Work) (in part): The Lessee accepts the premises “as is” and shall be responsible for all construction (including structural and roofing elements required), improvements and renovation costs in order to complete the demised premises as a neighbourhood pub. … The Lessee shall be responsible for the ceiling make-up unit for the demised premises.

Lessee will have the sprinkler systems re- routed, electrical, heating / ventilation, and plumbing installed to accommodate the appropriate building code in common and staff areas. … The Lessee shall be responsible for interior demolition of the space removing all interior demising walls , drywall (including ceiling) and floor coverings, replacing overhead garage doors and all other panel glass/plexiglass with new panel glass … and concrete

M. J. Lema J.C.Q.B.A. backfilling/levelling of the floor drain area …. The Lessee shall be responsible for the installation of new rooftop mechanical HVAC units and make-up air unit as required …. The Lessee shall have a new roof installed and complete necessary structural work to the roof rafters and sheeting system …. [emphasis added] I take judicial notice that work on this scale obviously required the investment of hundreds of thousands of dollars . The tenant’s witness referred to a lease for 28 years (from 2017).

But the lease is actually for 144 months i.e. 12 years i.e. until 2029, with an option for a further ten years. The lease began in late February 2017 i.e. has been running for just over four years , with a further eight years to run (and possibly longer, if restored and if the tenant meets its ongoing obligations and the preconditions for renewal).

I conclude, on proportionality , that forfeiture of the lease at this point would cost the tenant its very substantial investment in building rehabilitation and leasehold improvements and deprive it of its negotiated-for opportunity to recoup that investment over the lifespan of the lease , including through the acknowledged-by-the-landlord less-than-market-value rent.

Such forfeiture would be completely out of proportion to the consequences, to the landlord, of the above-described rent-payment breaches. • other “relief from forfeiture” factors: o the tenant did not delay unduly here, tendering the rental arrears within three days of the termination and, when that did not move the landlord to reinstate the lease, applying for, and obtaining, an interim injunction to get the tenant back into the premises eight days after that (on December 18, 2020); o while it is not crystal-clear from the cross-examination of the tenant’s witness, it appears that the tenant has paid the required rent and associated payments since regaining occupancy of the restaurant on an interim basis, pursuant to the interim injunction granted by Friesen J. on December 18, 2020 and continued by me at the March 19, 2021 application until (at minimum) release of this decision; and o I saw no evidence that the landlord has taken any steps, even tentative, to lease the premises to another tenant.

D. Conclusion [ 45 ] For all these reasons, I confirm that the landlord validly terminated the lease and that injunctive relief is not available to reverse that termination; however, I find that the tenant is entitled to relief from forfeiture, on the following terms: • payment of the arrears through to December 10, 2020 ($15,590.50), which the tenant has already tendered (as noted), via the landlord cashing the cheque it has been holding; • if any rent arrears have accrued since that date, clearance of those arrears in full by no later than April 9, 2021; and • payment of any April 2021 rent payment(

s) due April 1 st by the end of today. [ 46 ] If the parties require clarification of these terms, I invite them to contact me via my assistant. [ 47 ] If the parties are unable to agree on costs, their respective submissions (three-page maximum) are due by April 30, 2021. [ 48 ] I thank the parties for their helpful briefs and oral submissions. Heard via WEBEX on the 19 th day of March, 2021. Dated at the City of Edmonton, Alberta this 1 st day of April, 2021. Appearances: Robert W. Hladun, Q.C.

Hladun & Company Barrister’s and Solicitors for the Applicant/Cross-Respondent Raymond Bastedo DLA Piper (Canada) LLP Barristers and Solicitors for the Respondent/Cross-Applicant