2014 QCCA 2059, 2014 QCCA 2059

Gestion 1050 de la Montagne c. Gestion Furst inc. 2014 QCCA 2059 COURT OF APPEAL CANADA PROVINCE OF QUÉBEC REGISTRY OF MONTREAL No: 500-09-024238-149 (500-17-058670-103) MINUTES OF THE HEARING DATE : November 7, 2014 THE HONOURABLE MR. JUSTICE NICHOLAS KASIRER, J.A. PETITIONERS COUNSEL GESTION 1050 DE LA MONTAGNE CORPORATION GESTION SUNSHINE BOYS Mtre PATRICK C. HENRY ( Robinson Sheppard Shapiro sencrl ) RESPONDENTS AVOCATS GESTION FURST INC. RAINBOW CAPITAL INVESTMENTS LTD. Mtre louis samuel Mtre FRANÇOIS-OLIVIER BOUCHARD ( De Grandpré Chait s.e.n.c.r.l. ) IMPLEADED PARTIES OFFICIER DE LA PUBLICITÉ DES DROITS DE LA CIRCONSCRIPTION FONCIÈRE DE MONTRÉAL

DESCRIPTION : Appellants’ motion for stay of execution of a judgment pending appeal to the Supreme Court (

Section 65.1(2) of the Supreme Court Act, R.S.C., 1985, c.S-26 and

Article 522.1 of the Code of Civil Procedure) Clerk : Asma Berrak Courtroom : RC.18 HEARING 10 :28 Commencement of the hearing. Identification of counsel. Observation by the judge. 10 :33 Submission by Mtree Henry. 10 :42 Submission by Mtre Samuel. 11 :05 Suspension. 11 :18 Resumption Submission by Mtre Samuel. 11 :25 BY THE JUDGE : TAKES ACTE of the undertaking by the respondents that the tenants of the emphyteutic lessee currently in the building may remain there until the motion for leave from the Supreme Court is decided. 11:26 Submission by Mtre Samuel. 11 :31 Discussion between the Judge and Mtre Henry.

The judgment will be rendered at 4:00 p.m. o’clock this afternoon. 11 :32 Suspension. 16:15 Resumption. Judgment-see page 3. Conclusion of hearing. Clerk BY THE JUDGE JUDGMENT [ 1 ] Petitioners seek to suspend execution of a judgment of this Court, rendered on the minutes of the hearing of October 10, 2014, pending the outcome of their application for leave to appeal to the Supreme Court of Canada.

In the judgment from which they seek leave, this Court allowed the respondents’ appeal, reversed the judgment of the Superior Court, and declared the resiliation of an emphyteutic lease between the parties. *** [ 2 ] The petitioners are lessees under an emphyteutic lease. The respondents, owners of the building, sought resiliation of the lease on the grounds that the emphyteutic lessees were in default, specifically that they had failed to pay property taxes and school taxes for which they were responsible under the lease and that they were repeatedly behind in the payment of the rent.

[ 3 ] The judge of the Superior Court declined to resiliate the emphyteutic lease. He cited

article 1604 C.C.Q., a rule in the law on Obligations bearing on the resiliation of contracts generally, and decided that the defaults of the emphyteutic lessees were of minor importance and were not of a sufficiently repetitive character to justify putting an end to the contract. [ 4 ] On appeal, this Court noted the application by the judge of

article 1604 C.C.Q. but took another view of the evidence. Observing the numerous late payments in the payment of the rent and the unpaid property taxes, the Court characterized these defaults as “tout sauf peu importants” (para. [2] of the judgment in appeal). The trial judge had been mistaken not to apply clause VII of the contract and resiliate the lease. *** [ 5 ] In their notice of appeal to the Supreme Court, the petitioners allege that there is a “confusion” in the jurisprudence as to whether

article 1604 C.C.Q. applies to emphyteusis which is a dismemberment of ownership. They raise the issue as to whether it was appropriate to apply this general rule in the Book of the Civil Code on the law of Obligations to the emphyteutic lease in the present case. Secondly, they argue that by failing to address “troublesome questions of unsettled law”, the Court of Appeal failed to provide adequate reasons for quashing the judgment of the Superior Court. *** [ 6 ] The motion for a stay is governed by

article 522.1 C.C.P.: 522.1. The Court of Appeal or one of its judges may, subject to the conditions the Court or the judge deems appropriate, order suspension of the execution of a judgment of the Court, on a motion of a party who establishes his intention to apply for leave to appeal to the Supreme Court of Canada. 522.1. La Cour d'appel ou l'un de ses juges peut ordonner, aux conditions qu'il estime appropriées, de suspendre l'exécution d'un jugement de cette cour, sur demande d'une

partie qui démontre son intention de présenter une demande d'autorisation d'appel à la Cour suprême du Canada. [ 7 ] The criteria that must be established by the petitioners in order to obtain an order suspending execution of the judgment of this Court pending appeal are well known: (1) the existence of a serious question to be decided on appeal; (2) that they will suffer serious or irreparable harm if the stay is not granted; and (3) that the balance of inconvenience between the parties favours granting the stay. See, e.g. , Restaurant La Porte de Lévis inc. v.

Corporation Cadillac Fairview ltée , [2002] J.Q. no 6144 (C.A.) ; Pamphile v. Montréal (Ville de), 2008 QCCA 1821 . [ 8 ] In my respectful view, and based on the necessarily limited materials submitted in support of the motion, the petitioners have not established the existence of a serious question to be decided by the Supreme Court on appeal. My reasons are as follows. [ 9 ] Does the application of

article 1604 C.C.Q. to an emphyteutic lease pose a serious question in this case? [ 10 ] First, it should be noted that the petitioners themselves argued at trial and on appeal that the rule in

article 1604, para. 2 C.C.Q. applied to the emphyteutic lease here. The Superior Court applied the rule and the Court of Appeal did not say that was a mistake. Where the trial judge erred, in the view of the Court of Appeal, was in his measure of the significance of the default and the repetitive character of the defaults, both factors in the application of

article 1604 C.C.Q. [ 11 ] In other words, the Court of Appeal disagreed with the trial judge on the application of

article 1604 C.C.Q. to the facts of the case. [ 12 ] In the circumstances, the question as to the application of

article 1604, from the law of Obligations, to the contract of emphyteusis is not a serious one. Most respectfully stated, it appears that the petitioners are raising this question – against interest – with a view to creating the impression that the case turns on a matter of principle. [ 13 ] It does not. The difference of opinion between the Court of Appeal and the Superior Court is one of fact alone. The trial judge considered the defaults to be of minor importance. The Court of Appeal reviewed the facts and came to the opposite view. [ 14 ] This raises no serious question of law.

Instead, the question of principle is raised as a futile effort to justify an appeal on the facts. [ 15 ] The second issue raised in the notice of appeal is the following: did the Court of Appeal fail to give adequate reasons for judgment? [ 16 ] In my view, this is not a serious question that would justify ordering a stay. [ 17 ] The Court rendered a short judgment. That said, reasons for judgment are fully intelligible, as is the explanation for reversing the Court below.

In paragraph [2] of its reasons, the Court makes plain that the defaults pursuant to the contract are not unimportant, clearly referring to the criterion in

article 1604, para. 2 C.C.Q. The Court states patently that the defaults occurred repeatedly – noting in particular the “nombreux retards” in paragraph [1] and the error by the judge to consider the unpaid taxes as a relevant default. Petitioners have not convinced me, in their pleadings on

article 1604 C.C.Q., that the Court failed to address “troublesome questions of unsettled law”. The outcome of the case, as noted above, did not turn on a point of law, settled or otherwise, but on the facts in the record. [ 18 ] In my view the grounds for appeal are not serious as that term is used in the decided cases under

article 522.1 C.C.P. This alone is enough to dismiss the application for a stay.

[ 19 ] As to whether serious harm would be caused to the petitioners if a stay was not granted, I would agree that the execution of the judgment of the Court of Appeal would cause them financial harm. I am not convinced, however, that this harm would be anything but monetary and quantifiable. In event – an eventuality that strikes me as unlikely – that the Supreme Court granted leave and allowed the appeal, a claim in damages could be made: see Salomon v. Banque Nationale du Canada , 2012 QCCA 1467 , para. [2] (Morissette, J.A., in chambers).

That said, I am prepared to recognize the harm as serious, if not irreparable. [ 20 ] As to the balance of inconvenience, it is plain that the petitioners would suffer harm that, at first blush, seems more considerable than the harm felt by the respondents. I am of the view, however, that the petitioners have failed to give a proper account for the inconvenience that would be caused to the respondents if a stay is ordered. The petitioners admit not having paid November’s rent.

While they have struck an arrangement with the City for payment of back taxes, the record makes plain that these arrangements have failed in the past. [ 21 ] But to repeat: the stay should be refused, in my view, because the petitioners have failed to raise a serious question in support of their proposed appeal before the Supreme Court. Even taking into account the seriousness of the harm to the petitioners and assuming the balance of inconvenience weighs in their favour, I would dismiss the motion. FOR THE AFOREMENTIONED REASONS , the undersigned: [ 22 ] DISMISSES the motion, with costs. nicholas kasirer , J.A.