2020 QCCQ 2208, 2020 QCCQ 2208

Tour Scotia ltée c. TIMC inc. 2020 QCCQ 2208 COURT OF QUEBEC Practice Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Chamber N° : 500-22-261594-207 DATE : June 17, 2020 ______________________________________________________________________ BY THE HONOURABLE MAGALI LEWIS, J.C.Q. ______________________________________________________________________ TOUR SCOTIA LTÉE Plaintiff c. TIMC INC.

Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Tour Scotia Ltée (Tour Scotia) is seeking the issuance of a safeguard order against TIMC Inc. (TIMC), asking the Court to: ORDER the Defendant to pay directly to the Plaintiff no later than 5 days from the judgment […] the arrears or rental and additional rental in addition to the cleaning service, municipal taxes and storage rent in the sum of $61,060.53 […] failing which, DECLARE the Defendant to have omitted and/or failed to voluntarily and substantially fulfil its obligations and therefore is foreclosed from filing its contestation and that Plaintiff be permitted to proceed by default […] ORDER the Defendant to pay directly to the Plaintiff no later than the 1 st day of every month commencing June 1, 2020 […] $24,785.67 representing the rent and addition rental, in addition to the amount of $1,046.27 representing the storage rent in accordance with the Lease, Exhibit P-1 […] until such time as Defendant leaves the Premises […] [ 2 ] In support of its application Tour Scotia claims:

a) That it is the owner of the office building located at 1002 Sherbrooke Street West.

b) That TIMC operates an immigration consulting office.

c) That on September 25, 2009, the parties entered into a commercial lease relating to the suite number 2121.

d) That the lease starting on March 15, 2010, was expiring on March 31, 2020, as per

section 3.01 of the lease. [1]

e) That before the end of the lease, the parties negotiated the terms of its renewal for a short period commencing on April 1, 2020, and ending on August 31, 2020.

f) That on March 13, 2020, TIMC signed a lease renewal document which was retrieved and accepted by Tour Scotia. [ 3 ] The original lease provided that the base monthly rent during the last 5 years of the term was $5,656 or $65,872 per year. [ 4 ] The term of the extension agreement that the parties negotiated provided a monthly base rent of $5,656, a monthly electricity charge of $269.33 (clause 2.0), a month storage fee of $455 (clause 2.2) and 0.9751% of all taxes and expenses (clause 2.4). [2] [ 5 ]

Section 3.03 of the original lease provides that the lease and its term are not subject to tacit renewal. If the tenant remains in possession of the premises after the expiry of the term without express written consent of the landlord, he is deemed to be occupying the premises on a “month to month” basis. [ 6 ] In that case, the rent payable is equal to 200% of the base rent that is $11,312 per month as well as 200% of all other expenses provided by the lease. [ 7 ] In support of its contestation of the Application for a Safeguard Order, TIMC claims that:

a) On March 19 and 23, 2020, it wrote to Tour Scotia to enquire about the impact of the government decree relating to the COVID-19 pandemic, even asking if it would be easier to cancel the lease extension. [3]

b) Although Tour Scotia had not yet responded its enquiries nor informed it that it had signed the lease renewal agreement, on March 24, 2020, Tour Scotia sent a note to its tenants informing them of the mandatory closure of the building to prevent the spread of the coronavirus, for a period of 3 weeks until April 13, 2020, that in accordance with a government decree. [4] The note stated that Tour Scotia would only respond to emergencies and would not provide cleaning services.

c) On March 27, 2020, before Tour Scotia responded to its messages and before it confirmed that it had signed the lease renewal document, TIMC withdrew its offer through its attorneys in the context of the COVID-19 pandemic. [5]

d) It indicated in its message that it would take the necessary steps to vacate the premises as soon as it would be granted access to the building and in accordance with the restrictions set by government decree in the context of the health crisis related to the COVID-19 pandemic: […] notre cliente verra à libérer les lieux dés que la situation le permettra et dès qu’elle aura accès aux lieux.

e) On March 31, 2020, after having received TIMC notice that it was withdrawing its offer to extend the lease, Tour Scotia attempted to deliver a signed copy of the lease renewal document. [6]

f) On April 17, 2020, although alleging that the parties had agreed to renew the lease for the premises, Tour Scotia determined that the monthly base rent that applied was not the amount provided for in the draft lease renewal agreement, but the monthly rent payable when the tenant occupies the premises without the written authorization of the landlord, that is 200% of the last monthly rent payable. [7] Consequently, Tour Scotia was no longer charging $12,392.84 rent for the month of April 2020 (that amount including expenses) as per its invoice 45707, [8] but $24,785.67 as per invoice 50109 (or invoice 50111 which also relates to the rent payable for the month of April), plus $1,046.27 for storage, again the equivalent of 200% of the real charge [9] (P-11), instead of $455 as per invoice 45706.

g) TIMC offering immigration services, it preserves confidential and sensitive information that cannot be simply and blindly remitted to movers and kept in storage without proper care. Yet, Tour Scotia would not give TIMC access to its premises on a reasonable

schedule to organize its move.

h) The amounts claimed from Tour Scotia are neither in accordance with the initial lease nor in accordance with the alleged renewed lease.

i) Regarding the renewal of the lease, clause 3.02 provides that “negotiations will in no event have any binding effect on either of the parties, until and unless a new written agreement between the parties is entered into and executed by both parties”. This clause specifically provides that a draft lease signed by the Tenant “shall not bind the Landlord” unless he has signed it too.

j) Tour Scotia did not provide access to the building in order to allow TIMC’s employees to empty the premises from its files and office equipment.

k) As for TIMC’s steps to vacate the premises, it is not contested that in the context of the COVID-19 pandemic, Tour Scotia would not give its tenant access to the building to move but at night between 6:00 pm to midnight or on weekends, and consequently TMC could find movers to assist it before June 7, 2020, which it confirmed to Tour Scotia on May 25, 2020. [10] I.

ANALYSIS [ 8 ] The parties do not agree as to whether TIMC’s original lease that was expiring on March 31, 2020, was validly extended until August 31, 2020; whether TIMC could withdraw its consent to the lease renewal before Tour Scotia confirmed having signed the agreement; whether Tour Scotia gave reasonable access to the building and the premises to TIMC after March 24, 2020 to allow the tenant to vacate the premises, and, in affirmative whether TIMC neglected to take the necessary steps to do so in due time. [ 9 ] The answers to these questions will determine if and how much, Tour Scotia can claim from TIMC. [ 10 ] A safeguard order is a discretionary and an exceptional remedy, issued for conservatory purposes . [11] [ 11 ] It is made according to the same criteria as a provisional injunction.

It is thus granted when there is an emergency (art. 510 CCP), if the applicant appears to have a serious right to it [12] , and it is judged necessary to prevent serious or irreparable prejudice to the applicant, to avoid creating a factual or legal situation that would render the judgment on the merits ineffective. (art. 511 CCP) [13] [ 12 ] The urgency must be assessed in a strict and rigorous manner because the case proceeds summarily, on the basis of an incomplete file, and the ordinance does not offer the usual legal guarantees. [14] In that context, when the basis of the claim is contested, it is important that the Court does not decide the substantive issues raised by the case in order not to impose a unilateral reading of a given situation on all parties. [15] [ 13 ] In commercial leases, it is generally accepted that when the tenant has left the premises, there is no need to issue a safeguard order ordering him to pay the rent. [16] [ 14 ] There is thus no urgency in the present situation because TIMC vacated the premises by June 7, 2020.

If it had been the case, the Court was not notified during the deliberation. [ 15 ] Although alleging that the parties have renewed the lease that was ending on March 31, 2020, until August 31, 2020, Tour Scotia is claiming amounts on the ground that the lease was not renewed and that TIMC having failed to vacate the premises at the expiry of its lease, is occupying the premises without its written consent, on a monthly basis.

[ 16 ] Tour Scotia’s April 1, 2020, initial invoice to TIMC reflected the terms of the draft lease agreement renewal that it claims it accepted before TIMC attempted to cancel it on March 27, 2020.

The base rent charged on the initial version of the invoice is $5,656 for base rent plus taxes, operating costs and electricity for a total of $12,392.94. [17] [ 17 ] Yet, in its invoice filed in support of the Application for a Safeguard Order, Tour Scotia indicates an amount of $11,312 as base rent for a total of $24,785.67 with taxes, operating expenses and electricity. [18] [ 18 ] The two invoices being contradictory as to the origin of TIMC’s obligation (i.e., occupying the premises without written consent of the landlord, failure to comply with the obligation to vacate the premises at the expiry of the term of the lease, or the lease renewal agreement), Tour Scotia has failed to establish the appearance of entitlement to the amounts that it claims. [ 19 ] As to the questions of whether TIMC could vacate the premises in the context the COVID-19 pandemic, or if Tour Scotia had closed its building preventing the tenants form vacating, and whether it is entitled to any compensation because TIMC “occupied” the premises until June 7, 2020, it is for the judge of the merit to decide. [ 20 ] Finally, Tour Scotia failed to demonstrate that it would suffer an imminent and irreparable damage failing the issuance of the safeguard order.

WHEREFORE, THE COURT: [ 21 ] REJECTS the application for the issuance of a safeguard order; [ 22 ] THE WHOLE with legal costs. __________________________________ MAGALI LEWIS, J.C.Q. Me Richard Friedman Bell Rudick Friedman Attorney for Plaintiff Me Serge Fournier BCF Attorney for the Defendant Date d’instruction : 27 mai 2020