2189252 Alberta Inc. o/a Tutti Fruitti Breakfast & Lunch Applicant - v. -, 2021 ABQB 977

Court of Queen’s Bench of Alberta Citation: 2189252 Alberta Inc (Tutti Fruitti Breakfast & Lunch) v Harvard Developments Corporation, 2021 ABQB 977 Date: 20211208 Docket: 2103 14080 Registry: Edmonton Between: 2189252 Alberta Inc. o/a Tutti Fruitti Breakfast & Lunch Applicant - and - Harvard Developments Corporation and Windermere II Commercial Lands Ltd. Respondents _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice G.S. Dunlop _______________________________________________________ 1. Overview [ 1 ] This dispute arises out of a commercial tenancy.

The applicant 2189252 Alberta Inc. is or was the tenant, operating a breakfast and lunch restaurant out of premises owned by the respondent Windermere II Commercial Lands Ltd., and managed by the respondent Harvard Developments Inc. In these reasons I will refer to the applicant as the tenant and I will refer to the respondents collectively as the landlord.

[ 2 ] On September 20, 2021, the landlord changed the locks and retook possession of the premises.

On October 4, 2021, the tenant filed an originating notice seeking: • a declaration that the termination of the lease by the landlord was improper and a breach of the lease; • and an order directing the landlord to immediately grant possession of the premises to the tenant; • damages; • alternatively, an order for relief from forfeiture, allowing the tenant to pay the rent arrears, without acceleration, and confirming the lease; and • punitive damages. [ 3 ] I heard the application as an emergency special chambers matter on November 24, 2021.

The matter was previously heard and adjourned, with directions regarding procedure, in Master’s morning chambers on October 21, 2021 and Justice morning chambers on November 5, 2021. [ 4 ] In written and oral submissions, the tenant relies firstly on the terms of the lease, and secondly on waiver, promissory estoppel and relief from forfeiture. [ 5 ] The issues before me are: • has either party breached the lease? • if the tenant has breached the lease, has the landlord waived the breaches? • does promissory estoppel prevent the landlord from relying on any of its remedies under the lease? • is relief from forfeiture appropriate? [ 6 ] I find that the tenant breached the lease by failing to pay the full amount of the rent on the first day of each month, that the landlord was entitled to demand full payment of the rent arrears within ten days, that upon non-payment within ten days an additional three months’ rent became owing, and that the landlord was entitled to re-enter the premises with an option to terminate the lease which the landlord exercised by written notice of termination.

I find that the landlord did not waive the tenant’s breaches, and is not prevented by promissory estoppel from relying on its remedies under the lease. Lastly, I find that relief from forfeiture is not appropriate because the tenant’s conduct was unreasonable, in that it failed to pay rent on the first of the month, failed to provide monthly sales information in 2021 and provided inaccurate monthly sales information for 2020. [ 7 ] The tenant’s action is dismissed. The landlord shall have costs on a solicitor and its own client basis, in accordance with the lease. 2.

Lease [ 8 ] The relevant rent and landlord’s remedies provisions in the lease are as follows: 4.04 Payment of Rental Payment of Rental shall be made to the Landlord by the Tenant at the Landlord's designated office or at such other place and to such other party as the Landlord may from time to time designate in writing. All payments of Rental shall be made in equal instalments on the first day of each month in advance. 13.01 Re-entry With or Without Termination When: (

a) the Tenant shall be in default in the payment of any Rental, and such default shall continue fora period of ten (10) days after Notice to the Tenant; … then and in any of such cases. the Tenant shall be deemed to be in default under this Lease and the next three (3) months' Rental shall immediately become due and payable, and at the option of the Landlord the Term shall become forfeited and void, and the Landlord may without Notice or any form of legal process whatever forthwith re-enter the Leased Premises or any part thereof in the name of the whole and repossess and enjoy the same as of its former estate, anything contained in any statute or law to the contrary notwithstanding; and this Lease and all of the Tenant's rights under it will terminate, provided that such forfeiture shall be wholly without prejudice to the right of the Landlord to recover arrears of Rental or damages for any antecedent breach of the Tenant's covenants, obligations or agreements under this Lease.

No such re-entry or taking possession of the Leased Premises by the Landlord shall be construed as an election on the part of the Landlord to terminate this Lease unless, at the time of or subsequent to such re-entry or taking of possession, the Landlord so notifies the Tenant in writing or such termination is decreed by a court of competent jurisdiction.

[ 9 ] The lease includes an entire agreement clause: 20.06 Entire Agreement The Tenant acknowledges that there have been no representations made by the Landlord which are not set out in this Lease, and the Tenant further acknowledges that this Lease constitutes the entire agreement between the Landlord and the Tenant and may not be modified except as herein explicitly provided or except by subsequent agreement in writing duly signed by the Landlord and the Tenant. [ 10 ] There is no evidence of any agreement in writing to reduce the rent or change the due date from the first of each month.

I find that there was no such written agreement. Consequently, as a matter of contract, the tenant was obligated to pay the full rent on the first of each month. [ 11 ] The tenant paid only half rent for the months October 2020 through June 2021. It never paid on the first of the month. At no time prior to September 23, 2021, did the tenant tender the full balance of its arrears.

The tenant was continuously in breach of its contractual obligation to pay rent from October 1, 2020 until the landlord re-entered the premises on September 20, 2021. [ 12 ] On September 23, 2021, the tenant tendered $83,673.86, which was the arrears demanded by the landlord in its September 2, 2021 letter. As set out in the lease, the tenant had ten days from the demand to remedy its breaches by tendering the full amount of the arrears. Under the lease the deadline was September 12, 2021. The September 2, 2021 letter extended the deadline to September 17, 2021, at noon.

The tenant did not pay the full arrears by September 17, 2021 at noon. Consequently, at 12:01 pm on September 17, 2021, pursuant to the lease, an additional three months’ rent became due. Therefore, by September 23, 2021, the full amount of arrears was not $83,673.86, but that amount plus three months’ rent. [ 13 ] There is no evidence that the tenant ever tendered the full amount owing to the landlord, at any point from October 1, 2020 to the present. [ 14 ] On September 23, 2021, the landlord notified the tenant in writing that it was terminating the lease.

The tenant submits that that notice did not effectively terminate the lease because before the landlord delivered the termination notice to the tenant, the tenant had tendered the full arrears. This is factually incorrect. The tenant tendered $83,673.86 on September 23, 2021, but by then the full arrears was that amount plus three months’ rent.

The acceleration of three months’ rent is clear in the lease, as a consequence of the tenant failing to cure a default within ten days of notice. [ 15 ] On the premise that the tenant tendered the full arrears before the landlord delivered notice of termination, the tenant submits that the landlord had an obligation to accept the full arrears and thereby lost the ability to terminate the lease. The tenant provides no case law or other authority for this proposition.

I doubt it is correct in law, given the language in the lease in this case giving the landlord the right to terminate for a breach which the tenant fails to remedy within ten days of notice. In any event, the premise of this submission is not true. The tenant did not tender the full arrears before the landlord delivered its notice of termination. [ 16 ] I find the landlord terminated the lease on September 23, 2021, in accordance with its rights under the lease. Subject to the tenant’s other arguments, which I address below, the lease was lawfully terminated by the landlord on September 23, 2021. 3.

Waiver and Promissory Estoppel [ 17 ] The tenant submits that the landlord waived its right to terminate the lease for non-payment of the rent, or is prevented by promissory estoppel from enforcing that right, based on the following facts, as alleged by the tenant: • the landlord agreed to accept 50% of the rent; • the landlord cashed the tenant’s cheques for 50% of the rent; • the landlord issued demand letters after the tenant had underpaid the rent; • the landlord benefitted from the tenant’s partial payment of the rent; and • the landlord agreed to work with the tenant on a payment plan for arrears. 3.1 Agreement to accept 50% [ 18 ] Mr.

Debangshu Bhaumick is the husband of Ms. Mausumi Bhaumick, who is the sole director and shareholder of the tenant. The landlord dealt primarily with Mr. Bhaumick as the tenant’s representative (prior to lawyers becoming involved in September 2021). The landlord’s representative who dealt with Mr. and Ms. Bhaumick is Ms. Wanda Crantz. Ms. Crantz provided two affidavits and was questioned twice in this action. Her testimony is consistent that the landlord never agreed to accept 50% of the rent. [ 19 ] Mr. Bhaumick provided two affidavits and was questioned twice in this action.

There are also numerous written communications to and from him. Mr. Bhaumick’s evidence regarding what, if anything, the landlord agreed to regarding the rent is unclear. [ 20 ] In his September 29, 2021 affidavit Mr. Bhaumick provides the following evidence in paragraph 11: After the CECRA program ended, in October 2020, the Franchise business was still restricted to open and operate at only 50% capacity

and, in light of the consequent severe business losses, I requested the Respondents to accept and continue to accept approximately 50% of the full rent payments until things got back to normal. The Applicant, accordingly, provided payments in the amount of $6,917.66 for the months of October through December 2020, and the Respondents accepted and cashed the same in each of these months. [ 21 ] I note that Mr. Bhaumick does not say in paragraph 11 of his September 29, 2021 affidavit that the landlord agreed to reduce the rent by half.

He also does not say that that the tenant’s proposal was to pay half of the rent on a current basis, while the other half accrued, to be paid by the tenant at some future date. This later became his evidence. [ 22 ] Mr. Bhaumick provides the following additional evidence in paragraph 12 of his September 29, 2021 affidavit: In January 2021, the Applicant received a "Without Prejudice" letter from Harvard asking for payment of the balance of the 50% rents for October to December 2020. A copy of the said letter is attached herewith as Exhibit "D".

At that time, Alberta was undergoing a further waive of the pandemic and the Franchise Business had been ordered to fully close (other than takeout) by Government mandate. As such, immediately upon receipt of that letter, I contacted Ms. Wanda Crantz, Shopping Centre Manager for Harvard ("Ms. Crantz") and discussed the concerns arising from the ongoing Franchise business closure with her and requested continuation of the part payment of rent until we were able to open fully, while promising to continue to pay one half of monthly rent even though the Franchise dine in business was closed.

The Respondents agreed , accepted and cashed the cheques that were consequently provided, each in the sum of $6,917.66 (approximately 50% of the monthly rent payment) for each month from January 2021 through to June 2021. (emphasis added) [ 23 ] It is not clear from paragraph 12 of Mr. Bhaumick’s affidavit, what he is saying the landlord agreed to. [ 24 ] Mr. Bhaumick was questioned about what, if anything, the landlord agreed to. He testified that the landlord agreed to accept 50 percent of the rent for the time being, with the balance deferred until “later when the situation will be all good”.

The problem with this evidence is that it is inconsistent with the numerous demand letters from the landlord demanding full payment immediately. In particular, there are letters or emails from the landlord to the tenant demanding full payment of the rent on the following dates: • September 17, 2020 • December 11, 2020 • January 11, 2021 • January 25, 2021 • January 28, 2021 • February 8, 2021 [ 25 ] Some of these communications were sent to the wrong street address, but they all indicate they were sent to Ms. Bhaumick’s correct email address. [ 26 ] In questioning, Mr.

Bhaumick was repeatedly asked about what the landlord had agreed to and he steadfastly avoided the question. He said “we” agreed or “it is already agreed”. He did not directly testify that the landlord agreed to anything. [ 27 ] When pressed about the landlord’s demands for payment up to January 2021, Mr. Bhaumick claimed to not remember: Q MR. MIELKE: So what I'm asking you is in October of 2020, when the tenant had paid 50 percent, did Ms. Crantz come to you or to the tenant and ask for the balance of the month's rent at any point?

A As I say, we discussed in October with Crantz that we are -- we will -- we're not able to pay full rent at this point, but we -- we -- we'll pay 50 percent of the rent. So that is already agreed. Q In November 2020 did Ms. Crantz discuss with you or anybody on behalf of the tenant the need to pay the balance of October's rent or the remaining amount unpaid for November? A I don't recall. Q What about in December of 2020? Did that occur? A I also don't recall anything on December too. Q You simply don't recall at this point, correct?

A: Yes. [ 28 ] The best evidence regarding whether the landlord agreed to a rent reduction in last quarter of 2020 is the following email exchange between landlord and tenant in November, 2020: November 13, 2020, tenant to landlord: “In this situation I am requesting you to reduce our rent to 50% till the situation becomes more normal.” November 16, 2020, landlord to tenant: “Unfortunately, at this time we are unable to grant a 50% rent reduction in rent.”

[29] The first line of Mr. Bhaumick’s November 13, 2020 email to Ms. Crantz reads: It is my deep concern to find us as rent defaulter. (emphasis added) [30] When questioned about this, Mr. Bhaumick contradicted his own email and testified that the tenant was not in default becausethere was an agreement. Q Now, there's an email -- well, let's go back to the original email that you sent to Ms. Crantz. The very first line of that email says: It is my deep concern to find us as rent defaulter. A Yes, because when we talked that time, it is come out as a -- Debangshu, you are becoming a defaulter.

So on the basis of thistalk, I just emailed her, Wanda, we don't want to be deemed defaulter because it is not a defaulter. The question I -- my real issue it wasnot a default. It is -- it is only agreement that we pay 50 percent now and rest later on so – Q Now, your -- sorry, go ahead. I didn't mean to cut you off. A I said that's why we didn't -- from -- for my understand -- I didn't say I am a defaulter. I -- I am paying an agreeable amount,so that's why I have – I have written this. So it is -- it is my big concern that we are -- we are considered as a defaulter. We don't want tobe defaulter.

We -- we – (emphasis added) [31] The landlord’s January 11, 2021 letter is clear. The tenant is in default. The unpaid balance of the rent for October,November and December is due and owing. If the full balance is not paid by January 20, 2021 the landlord may take action under thelease. [32] Mr. Bhaumick was questioned about the tenant’s response to the January 11, 2021 demand letter: Q Do you have anything in writing where you responded specifically to that letter and that particular suggestion, that the tenant wasin default? A That -- I mean, this -- after getting this letter, I did talk to Ms.

Crantz about this, the situation. We discussed it again, and again wecome up with the understanding that, okay, for now we'll pay -- we'll be -- continue to pay 50 percent and -- and later on we will seewhen the situation is better [33] Again, Mr. Bhaumick does not explicitly testify that the landlord agreed to anything.

However, the landlord’s writtencommunications to the tenant make it clear that the landlord expected the full arrears immediately. • January 25, 2021: “There is no Landlord approval to only pay 50% of your rent. … A final Demand will go out and under theLease the Landlord could exercise its right to change the locks for unpaid rent.” • January 28, 2021: “Please advise when we can expect to receive balance of arrears.” • February 8, 2021: “Attached is the updated Account Reconciliation.” The attachment shows a balance owing of $44,370.52. [34] On the basis of Mr. Bhaumick’s evasive and vague evidence, Ms.

Crantz’s clear and consistent evidence, and the writtencommunications between the parties, I find that the landlord never agreed to accept 50% of the rent, either with or without a futurepayment of the unpaid balance. 3.2 Cashing the Cheques for 50% of the Rent [35] The tenant submits that by accepting 50% of the rent from October 2020 through June 2021, the landlord waived its right toterminate the lease based on the tenant’s failure to pay the full rent.

In support of its position, the tenant relies on four cases, none ofwhich stands for that proposition. [36] In R v Paulson (1920) (UK JCPC), 54 DLR 331 (PC) the lease in question included a covenant tocommencing mining within a certain period of time, which was extended a few times and then not extended. In the meantime, thelandlord continued to accept the full rent. The landlord then purported to terminate the lease for breach of the covenant to commencemining.

The Judicial Committee of the Privy Council held that the acceptance of rent after the tenant had breached the mining covenantprevented the landlord from terminating the lease based on that breach in the midst of the period for which it had accepted full paymentof the rent.

The ratio on this point is at page 341 of the DLR report: He cannot by receiving 12 months’ rent determine that the lease was a subsisting lease while the rent was accruing, and in the middle ofthat period determine that it no longer subsists. [37] In Delilah’s Restaurants v 8-788 Holdings Ltd. (BC CA), [1994] BCJ No 1340 (CA) the tenant was inbreach of a covenant not to change its shareholders without the landlord’s consent, but the landlord continued to accept payment of therent in full after becoming aware of the breach.

This was held to constitute a waiver of the breach. [38] In Sledz v Edmonton Home Fair Ltd. [1997] AJ No 1240 (QB) the tenant was in breach of several covenants including thenature and operation of its business, as well as the payment of rent. After those breaches had occurred, the landlord negotiated with the

tenant and accepted post-dated cheques, the first of which the landlord cashed before purporting to terminate the lease. The court heldthat both promissory estoppel and waiver prevented the landlord from relying on the continuing breaches to terminate the tenancy. [39] In Groenveld v Groenveld Brothers Holdings Ltd. 1998 ABQB 749 a minority shareholder sought leave to bring a derivativeaction in the name of the landlord corporation against its tenant. The application was dismissed based on the court’s finding that theapplicant was not acting in good faith.

The court went on to consider whether the proposed action based on breach of the lease waslikely to succeed and held it was not for several reasons. Those reasons included ambiguity in the lease regarding whether the rentincluded one-third of the green feed produced on the lease lands. The court also held that the landlord’s acceptance of the balance of therent, without payment of one-third of the green feed, would likely be held to have waived the landlord’s right to terminate the lease onthat basis.

The court’s findings on this point were in the form of a preliminary assessment of the chances of success of the claim theshareholder sought to bring in the corporation’s name. [40] The four cases relied upon by the tenant stand for the proposition that acceptance of rent in full may waive past breaches of alease. None of them states that acceptance of partial rent waives future breaches.

The obiter comments in Groenveld come close, but inthat case, there was no evidence that the landlord had accepted partial rent while insisting that the full rent was owing. [41] The tenant also submits that the landlord’s acceptance of partial rent payments from October 2020 through June 2021 implieda promise that the landlord would not terminate the lease for the tenant’s failure to pay rent. I disagree because the landlord repeatedlydemanded full payment in its demand letters. [42] As set out in

section 3.1 of these reasons, above, the landlord did not agree to accept 50% of the rent, and repeatedly told thetenant that in writing.

The mere cashing of the cheques, in the context of the landlord’s repeated and consistent advice to the tenant thatthe full rent was owing, was a mere indulgence which did not prevent the landlord, through waiver or estoppel, from insisting on the fullrent: 1198816 Alberta Ltd. v Bourbon Lounge Inc. 2008 ABQB 600 at para 179 – 204. 3.3 Issuing Demand Letters After Breach [43] The tenant submits that the landlord’s letters demanding payment of the rent in full waived its right to terminate for non-payment of the rent.

The three cases cited by the tenant do not support that proposition. [44] In Grace v Geekie Estate 2014 ABQB 21 a tenant filed a caveat with respect to his lease and the landlord’s estate claimed thatthe lease was thereby terminated by operation of a provision that filing a caveat would terminate the lease. The court found that whilethere had been a provision triggering a termination upon filing a caveat in earlier leases, that provision was not carried forward into thecurrent lease.

The court went on to find that even if such a provision were still in force, it had been waived by the landlord’s estateretaining the full rent after receiving notice that a caveat had been filed. Grace v Geekie Estate is not a demand letter case and it is not acase involving unpaid rent. [45] In The Second Cup Ltd v 2410077 Ltd. 2020 ONSC 3684 the landlord demanded arrears of rent by two letters in April 2020.

The court held that the language in the first letter was neutral, but the second letter’s discussion of future rent payments waived thelandlord’s right to terminate for the existing arrears: [49] Read as a whole, that letter was re-affirming the landlord-tenant relationship by its contemplation of the payment not only of theApril rental arrears but also payments of rent for May and beyond, consistent with the continuation of the Lease and inconsistent with anelection to terminate the Lease.

A brief excerpt from the April 23 letter is instructive: From June 1st onwards please make the post dated cheques out in the amount of the monthly semi gross rent being $17,762.47. As we used the last of our post dated cheques in April 2020, please arrange for 6 post dated cheques to be delivered along with May’srent cheque (total of 7 cheques) to reach our office before May 1st, 2020 [emphasis in original] Contrasted with the language of the April 3 letter: We hereby give you Notice under

Section 49 of your Lease dated 1 July 2010 (as amended), that the full rent for the month of April2020 has not been received. Failure by the Tenant to pay the full rent in the time and manor described in the Lease will leave the Landlord with no alternative but totake all necessary action to enforce the Lease and pursue all remedies available to the Landlord with respect of the foregoing, at law or inequity, including Lease termination or other penalties set out in the Lease [emphasis in original] [50] The landlord defendants say they were aware of their rights to terminate the Lease and repossess the premises.

Mandelbaumtestified that he was hoping that Second Cup would pay the rents demanded. In that context, their demands for future rent and post-datedcheques in the April 23 letter demonstrate an unequivocal and conscious intention to waive the rights of termination and allow for thecontinuation of the Lease.

The April 23 demands for rent are distinct from the comparatively neutral language in the April 3 letterpointing out that failure to pay rent in accordance with the Lease will lead to consequences. [46] At most, Second Cup v 2410077 stands for the proposition that a letter demanding payment of arrears may waive thelandlord’s right to terminate for non-payment of those arrears, if the letter goes beyond a simple demand and requests post-dated chequesfor future rent payments. [47] In Saskatchewan River Bungalows Ltd. v Maritime Life Assurance Co (SCC), [1994] 2 SCR 490, 1994CarswellAlta 769 a life insurer’s demand for a premium long after it was due was held to waive the insurer’s right to timely payment of

the premium. Saskatchewan River Bungalows is not a lease case. Furthermore, the Supreme Court of Canada noted in Saskatchewan River Bungalows that a demand for payment will not always be a waiver: [24] The appellant submits that, whereas the right to compel timely payment is clearly waived where premium payments are received and deposited by an insurance company after the expiry of the policy grace period [citations omitted], a mere demand for payment beyond the grace period is insufficient.

Support for that proposition is found in McGeachie v North American Life Assurance Co [citation omitted] and in Northern Life Assurance Co v Reierson [citation omitted]. In both cases, this Court concluded that a demand for payment was equivocal or insufficient to give rise to a waiver. However, in some circumstances a demand for payment may constitute a waiver. The nature of waiver is such that hard and fast rules for what can and cannot constitute waiver should not be proposed.

The overriding consideration in each case is whether one party communicated a clear intention to waive to the other party. [ 48 ] The cases relied upon by the tenant do not stand for the general proposition that any demand for payment of an amount owing under a contract will always waive a party’s right to terminate the contract based on that non-payment.

The general test for waiver remains, as set out in Saskatchewan River Bungalows : [20] Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. [ 49 ] In this case the landlord’s demand letters show the opposite: an unequivocal and conscious intention not to abandon its right to terminate. For example, the January 11, 2021 demand letter reads: We require that the outstanding balance be paid immediately upon receipt of this letter and in any event no later than January 20, 2021.

If payment is not received on or before this date, please be advised that the Landlord may initiate whatever action to remedy said default that it has available under the lease … [ 50 ] The July 28, 2021 and September 2, 2021 demand letters use nearly the same language. The landlord waived none of its rights through its demand letters.

On the contrary, those demand letters clearly advised the tenant that the landlord maintained its rights and was prepared to exercise them. 3.4 Benefit to Landlord [ 51 ] The tenant cites Mitchell & Jewell Ltd v Canadian Pacific Express Co [1974] AJ No 248 (CA) for the proposition that “waiver typically occurs if the party waiving a right obtained an advantage or benefit from doing so”. I disagree that that case stands for that proposition.

Furthermore, the Supreme Court of Canada notes in Saskatchewan Bungalows at para 20 that the test for waiver is strict because “no consideration moves from the party in whose favour a waiver operates”. [ 52 ] The tenant submits that the landlord obtained a benefit by accepting partial payments of rent from the tenant, rather than terminating the tenant’s lease, because the landlord would not have been able to lease to another tenant during the pandemic. The tenant invites me to take judicial notice of that.

I decline to do so because the tenant conducted extensive examinations of the landlord’s representative, Ms. Crantz, and failed to ask her any questions about this. [ 53 ] On the law, I do not agree that a benefit to the landlord is an indicium of a waiver.

On the facts, the tenant has not established that the landlord benefitted by accepting half of the rent rather than terminating the lease and reletting the premises. 3.5 Agreement to Work on a Payment Plan [ 54 ] On July 12, 2021 the landlord sent the tenant a letter demanding full payment of the rent arrears in the amount of $70,107.24 no later than July 26, 2021. Mr. Bhaumick in his September 29, 2021 affidavit swears that he immediately contacted Ms. Crantz, on behalf of the landlord, and that she “agreed that the Respondents would work with the Applicant in coming up with a payment plan for the arrears.” Ms.

Crantz specifically denies this alleged agreement in her November 1, 2021 affidavit. [ 55 ] Ms. Crantz’s evidence regarding her discussions with Mr. Bhaumick in July is as follows: In specific response to paragraph 14 of the 1 st Bhaumick Affidavit, at no time did I ever represent to 218 that we would work together on a payment plan. [ 56 ] Mr. Bhaumick admitted in questioning that he had nothing in writing confirming what he says was an agreement in July 2021 to work together on a payment plan.

Furthermore, the written communications from the landlord to the tenant are inconsistent with any such agreement: • July 28, 2021: “We require that the outstanding balance be paid immediately upon receipt of this letter and in any event no later than August 13, 2021. If payment is not received on or before this date, please be advised that the Landlord may initiate whatever action to remedy said default that it has available under the lease.” • September 2, 2021: “We require that the outstanding balance be paid no later than September 17, 2021 at noon.

If payment is not received on or before this date, please be advised that the Landlord may initiate whatever action to remedy said default that it has available under the lease.” [ 57 ] Ms. Crantz swears in her November 1, 2021 affidavit that she spoke to Mr. Bhaumick after the landlord sent the July 28, 2021 demand letter: I advised him that more than three months had passed since our meeting in April and he had made no progress towards payment of any

of the arrears. Accordingly, Harvard had made the decision to issue a final demand, and that if he did not pay the full amount of therental arrears by the deadline, we would be taking the space back. [58] Ms. Crantz was questioned on her November 1, 2021 affidavit and did not waiver from her evidence quoted above. [59] Ms. Crantz, in her November 1, 2021 affidavit, describes a conversation with Ms.

Bhaumick on September 3, 2021 in whichshe advised the tenant that the landlord would not accept further rental payments and that if the entire arrears were not paid by September17, 2020, “we would be locking them out”. [60] Mr. Bhaumick swore an affidavit on November 7, 2021, in which he does not refer to Ms. Crantz’s November 1, 2021affidavit and provides no evidence regarding the conversation following the July 28, 2021 letter described by Ms. Crantz in herNovember 1, 2021 affidavit. Mr. Bhaumick also provides no evidence regarding the conversation Ms.

Crantz says she had with Ms.Bhaumick on September 3, 2021. [61] Ms. Bhaumick did not provide any evidence on this application. [62] Mr. Bhaumick swears in his September 29, 2021 affidavit that on September 14, 2021 he spoke on the telephone with Ms.Crantz, he presented a couple of payment options, and Ms. Crantz told him she would speak to her manager and get back to him within24 hours. He also swears that when he had not heard from her on September 15, 2021 he sent her an email with two payment options. Mr. Bhaumick’s September 15, 2021 email does not refer to Ms. Crantz having promised to get back to Mr.

Bhaumick in 24 hours. [63] Ms. Crantz was questioned about this and does not remember the call, nor saying she would get back to him in 24 hours. Herevidence is if Mr. Bhaumick had asked her about a payment plan in September 2021, she would have said that was not an option becausethe landlord had made that decision. She said in both her affidavit and in questioning that she did not reply to Mr. Bhaumick’sSeptember 15, 2021 email because it was just more of the same. [64] The tenant submits that Mr. Bhaumick’s telephone records showing a 15-minute telephone call between Ms.

Crantz and Mr.Bhaumick on September 14, 2021 supports the conclusion that they discussed a payment plan. That submission misses the point, whichis: what evidence is there that the landlord agreed to work with the tenant on a payment plan. The length of the call on September 14,2021 is no evidence of that. [65] I find based on Ms. Crantz’s evidence, the inconsistencies between Mr. Bhaumick’s evidence and the written communicationsbetween the parties, and the absence of any evidence from Ms.

Bhaumick, that the landlord did not promise to work with the tenant on apayment plan. [66] The tenant submits that the landlord’s agreement to work with the tenant on a payment plan creates a promissory estoppel. That argument fails on the facts because the landlord did not agree to do that. 3.7 Conclusion on Waiver and Promissory Estoppel [67] Waiver requires evidence of an unequivocal and conscious intention to abandon one’s rights: Saskatchewan RiverBungalows Ltd. v Maritime Life Assurance Co. (SCC), [1994] 2 SCR 490 at 499 – 500; 1994 CarswellAlta 769.

Inthis case, the landlord never expressly abandoned any of its rights and nothing it did implied that it was doing so. On the contrary, thelandlord repeatedly demanded payment of the rent in full, and warned that it was prepared to exercise its remedies under the lease. [68] Promissory estoppel requires an assurance by one party intended to affect its legal relationship with the other party, which theother party relied on: Maracle v Travelers Indemnity Co of Canada (SCC), [1991] 2 SCR 50 at p. 7. In this case therewas no assurance by the landlord to the tenant.

The acceptance of the 50% rent payments did not imply that the landlord would not relyon its rights under the lease, particularly in the context of the landlord’s repeated demands for the full arrears. The landlord did notpromise to work with the tenant on a payment plan. There is no basis on the facts of this case for promissory estoppel. 4.

Relief from Forfeiture [69] An applicant for relief from forfeiture must establish the following: • the applicant’s conduct was reasonable in the circumstances; • the object of the forfeiture was essentially to secure the payment of money; and • a substantial disparity between the value of the property forfeited and the damage caused by the breach. Saskatchewan River Bungalows at para 33 [70] If the applicant does not establish all three facts, then it is not entitled to relief from forfeiture.

In particular, if the applicant’sconduct was not reasonable in the circumstances, relief from forfeiture will not be granted: Saskatchewan River Bungalows at para 34– 35. A tenant’s conduct is unreasonable if it fails to diligently attempt to comply with the terms of the lease: Mimi’s Parlour Ltd. v1816112 Alberta Ltd. 2021 ABQB 254 at para 35. [71] The landlord submits that the tenant’s conduct was unreasonable, relying on the following, among other things: • the tenant’s failure to pay rent on time;

• the tenant’s failure to provide monthly gross sales in 2021; and • the tenant’s misrepresentation of its monthly gross sales in 2020. 4.1 Failure to Pay Rent on Time [ 72 ]

Section 4.04 of the lease clearly states that rent is due on the first of the month. Mr. Bhaumick’s testimony about instead paying in the middle of the month indicates an attitude and a pattern of behaviour by the tenant that presumes the landlord will simply acquiesce to the tenant’s breaches: Q MR. MIELKE: Now, sir, I provided to your counsel, or to the tenant's counsel, a couple of additional documents which are emails. I will put the first one to you, which is an email from Angela Putnam of November 13, 2020 at 10:23 a.m. Do you see that? A Yes. Q Do you recognize that? A Yes.

Q Is that an email that your wife received around that date? A Yes. Q And did you read the email as well at that time? A I -- I read the email, yes. Q And this starts with, and I will quote the first line: This is a friendly reminder that rent is due on the 1st of every month as per your lease. That's the end of it. You read that when it arrived, correct? A Yes. Q And then she says in the second line: We have still not received payment for November 2020 and would like to know when we can expect to receive it. A Yes. Q When did the tenant actually pay the November rent?

A We paid -- I -- I really don't recall again at this point what -- when -- exactly when this was paid. Q But it would have been after November 13, 2020, correct? A Yes. Obviously, yes, because that's why the email is -. Q And this isn't the first of these emails, this type of email, that the tenant received? A I -- I -- MR. OMKAR: Just hang on -- MR. MIELKE: Sorry, I'm going to rephrase that. Q MR. MIELKE: This isn't the only email of this type that the tenant received -- MR. OMKAR: Sorry -- Q MR. MIELKE: -- relating to payment of rent and the landlord expected to be paid on 1st of the month?

A I don't -- I don't recall much of those, all those emails and all, but the only one thing I can tell is we are -- we are -- we are -- we discussed about that, that we are -- we pay by mid of the month on all those -- all those time and at -- it exists so finally somebody is sending another email that -- that is not changing our position because we are -- we are always paying in the mid of the month so and then that's -- Q I know that's what the tenant was doing. But based on this email from Ms. Putnam, that doesn't seem to correspond with what the lease says or what the landlord wants you to do?

A Yeah, but we are -- we are following what we are doing. (emphasis added)

[ 73 ] The tenant’s counsel asked a leading question about this in re-direct: Q MR. OMKAR: Sir, Mr. Bhaumick, I am going to ask you a couple of questions now just to clarify some of what has come out from your evidence today. This document was produced which is Exhibit 2. Now, this document reminds you of payment on 1st of every month, and you said you were paying rent by the middle of the month. Was that by agreement with anybody with the landlord?

A Yes, we talked to -- talked to Wanda before that, and we will be able to because due to the fund – fund availability, all this, we -- we agree that we pay in the mid -- mid of the month every time so -- and then that's the way we are -- we are -- we are -- we are trying to pay you within the mid of the month. That's what we are doing. [ 74 ] As usual in his testimony, Mr. Bhaumick does not explicitly say the landlord agreed to anything.

It is clear from the lease and the landlord’s repeated references in writing to the rent being due on the first of the month, that the landlord had not agreed to anything else. [ 75 ] I find that the tenant did not diligently attempt to pay the rent on the first of the month. On the contrary, it cavalierly ignored that requirement, without the landlord’s agreement. 4.2 Failing to Provide Monthly Gross Sales in 2021 [ 76 ]

Section 4.06 of the lease, as amended, reads: Monthly Sales Statement Within five (5) days of the end of each month during the Term and any renewal(

s) or extension(

s) thereof, the Tenant shall furnish a monthly sales statement in writing certified by a professional accountant acceptable to the Landlord, showing in reasonable detail the Gross Revenue of the Tenant with respect to the Leased Premises for such month. [ 77 ] The landlord did not insist on strict compliance with this provision, but did make repeated requests for the tenant’s monthly gross sales, beginning with Ms. Crantz’s November 16, 2020 email: We realize that these are very uncertain times and for some tenants very stressful. Unfortunately, at this time we are unable to grant a 50% rent reduction in rent.

If you could please provide your Gross Sales for the last year that would be most helpful. I do not need your financial statements, just your Gross Sales. Once we receive your gross sales we can evaluate. Also, please also reach out to MTY Group for rental assistance from them as they are also a tenant on the lease. Once I receive your 12 monthly rolling sales I can advise on your request. Just to clarify we are not providing any other food tenant 50% rent reduction. [ 78 ] The landlord made repeated requests to the tenant for its monthly sales in 2021.

For example, on January 20, 2021 the landlord emailed the tenant as follows: It appears we have still not received your monthly/annual sales figures as per your lease clause. Please kindly fill out the attached form or send us your sales statement to date, before January 22, 2021 to currents@harward.ca.

The purpose of the sales reporting on monthly basis is to track our Centre’s success, as well as identify tenants whose sales may have dropped. [ 79 ] On February 23, 2021 the tenant provided monthly sales information for January to December 2020. [ 80 ] The landlord requested monthly sales from the tenant on the following dates: April 5, 2021 April 13, 2021 June 1, 2021 June 14, 2021 July 27, 2021 [ 81 ] In its June 1, 2021 and July 27, 2021 emails, the landlord noted the reasons it was seeking the tenant’s monthly sales: The purpose of the sales reporting on monthly basis is to track our Center’s success, as well as identify those tenants whose sales may have dropped especially during this pandemic [ 82 ] The tenant did not provide the landlord with its monthly sales for any of 2021, until responding to an undertaking in the course of this litigation.

This was a breach of the lease, and consequently inherently unreasonable conduct by the tenant. The unreasonableness is exacerbated in the context of the tenant paying only half its rent at the time while claiming that its sales were down, and the landlord’s specific request for the sales information to assess the tenant’s situation. 4.3 Providing Inaccurate Sales Information for 2020 [ 83 ] In February 2021, the tenant provided a report to the landlord on the tenant’s monthly gross sales in 2020. In response to an

undertaking in this litigation, the tenant provided its monthly gross sales for June to December 2020. The figures do not match: February 2021 report to landlord November 2021 undertaking response June 2020 $21,473.25 $20,814.85 July 2020 $24,906.75 $36,487.07 August 2020 $26,526.00 $37,550.39 September 2020 $26,926.50 $37,817.34 October 2020 29,772.00 $41,726.56 November 2020 $28,398.00 $41,626.17 December 2020 $15,472.50 $22,919.01 [ 84 ] The tenant underreported its monthly sales to the landlord to a significant degree.

For the last quarter of 2020, when the tenant was claiming an inability to pay its full rent, it reported gross sales of $73,642.50 when in fact, at least according to its undertaking response in this litigation, its actual gross sales were $106,271.74. This misrepresentation was unreasonable conduct by the tenant. 4.4 Conclusion on Relief from Forfeiture [ 85 ] The tenant unreasonably failed to pay rent on the first of each month, failed to provide its monthly sales for 2021 and significantly underreported its monthly sales for October through December 2020.

It is unnecessary for me to consider whether the object of the forfeiture was to secure the payment of money and whether there is a substantial disparity between the value of the property forfeited and the damage caused by the breach. The tenant’s unreasonable conduct disentitles it to relief from forfeiture. 5 Disposition [ 86 ] The landlord did not waive its rights under the lease and promised neither to accept 50% of the rent nor to work with the tenant on a payment plan. Consequently, waiver and estoppel do not apply.

The landlord lawfully terminated the lease on September 23, 2021 and the tenant’s unreasonable conduct disentitles it to relief from forfeiture. [ 87 ] The tenant’s action is dismissed. This includes the tenant’s claim for damages because the tenant has not established a cause of action. The landlord is entitled to costs of the action on a solicitor and its own client basis pursuant to sections 13.04 and 20.10 of the lease. Heard on the 24 th day of November, 2021. Dated at the City of Edmonton, Alberta this 8 th day of December, 2021. G.S. Dunlop J.C.Q.B.A.

Appearances: Atul Omkar c/o Reynolds Mirth Richards & Farmer LLP for the Applicant Brent W. Mielke and Mandi Deren-Dube MLT Aikins LLP

for the Respondents