2019 QCCQ 8841, 2019 QCCQ 8841

151170 Canada inc. c. 9174-3328 Québec inc. 2019 QCCQ 8841 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-22-250401-182 DATE: October 29, 2019 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ 151170 CANADA INC.

Plaintiff v. 9174-3328 QUÉBEC INC. and OSARO OKUOMOSE Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, 151170 Canada Inc. ( “151170” ), as Lessor, sues the Defendant 9174-3328 Québec Inc. ( “9174” ), as Lessee, for unpaid rents for the months of May to December 2018, a total of $ 3,711.84. The Defendant, Osaro Okuomose, is sued as surety. 9174 did not answer the claim and the case proceeded by inscription for judgment by default insofar as that Defendant is concerned. [ 2 ] Mr.

Okuomose, contesting, alleges that, pursuant to an oral agreement made at the time of the signing of the lease renewal with the Plaintiff’s president, Mr. Peter Papadimitriou, on December 15, 2017, the Lessor accepted four cheques for the months of January, February, March and April 2018, and released 9174 for any other rents. He asserts that this concession was given in consideration of the longstanding relationship between the Lessor and the Lessee.

The Plaintiff denies this assertion, refers to the modalities of the lease and its renewal, and opposes the use of testimony to contradict the terms of the written agreement. [ 3 ] Thus, the Defendant Okuomose does not contest the fact that 9174 did not pay any rent for the months of May to December 2018, rather, he asserts that no rent was due for these months. [ 4 ] The Plaintiff admits that 9174 left the premises on November 30, 2018 returning the keys to the Lessor’s president, Mr. Peter Papadimitriou. The claim includes, however, rent for December 2018.

The Plaintiff takes the position that the lease was not resiliated because 9174 did not give proper notice and that therefore rent is owed for the last month of the term despite the tenant’s departure. Issues [ 5 ] To resolve this case, the Court must determine the following issues: 1. Is rent owed for the months of May to December 2018 inclusively or was there an agreement in effect that there would be no rent for that period? 2. Is rent owed for the month of December 2018 despite the tenant’s departure at the end of November 2018? 3.

What are the obligations of the Defendant Okuomose in respect of the unpaid rents? Facts [ 6 ] The legal relationship between Lessor and Lessee began approximately 12 years before this dispute arose when Mr. Okuomose decided to acquire a car wash business located in the building owned by 151170. When he purchased the assets of this business as a going concern, there was a lease in effect with a term of three (3) years. The testimony concerning the discussions at the time of the transfer of the business is contradictory. Mr. Okuomose asserts that, before completing the purchase, he met with Mr.

Papadimitriou who assured him that, despite his age, he would continue to own the building in which the premises were located and perhaps transfer the building to his son. [ 7 ] Mr. Okuomose asserts that he relied upon that representation in order to accept what was essentially a very short-term lease. When the lease expired, there were a series of short-term leases entered into between 151170 and 9174 up until the lease of January 1, 2017 (P-1​). [ 8 ] In that lease, signed December 29, 2016, Mr. Okuomose intervened personally as a solidary surety: the text of the intervention is clear. Mr.

Papadimitriou explains that, knowing that the building was to be sold and that the tenant was often late in paying rent, it would be appropriate to obtain this intervention in renewing the Lessor/Lessee relationship. At the end of 2017, the sale of the building was imminent. It was known by both parties that the probable purchaser would be a condominium developer and that the sale would

trigger the end of the Defendant’s car wash business. The lease renewal agreement (P-2) intervened on December 15, 2017, renewing the pre-existing lease (P-1), but with the addition of a right for the Lessor to terminate the lease by means of a two-month written notice. [ 9 ] The text reads: 1.2.1. In addition to the tenant’s right to terminate the lease by giving a 3-month written notice in virtue of provision 2.1 of the original lease, the Landlord can also terminate the lease by means of a 2-month written notice to the Tenant without any form of compensation, penalty or legal recourse in favor of the Tenant.

The Landlord may exercise this right at its own discretion, even without the Tenant being in default as provided by clause 19 of the original lease. When the lease is terminated, however it may occur, the Tenant must vacate the premises leaving them free of all its personal possessions. These terms bind the Tenant not only to the current Landlord, but also to any subsequent Landlord who may replace the current Landlord. [ 10 ] Again, this document included the intervention of Osaro Okuomose as surety. The essence of Mr.

Okuomose’s defence is that he had always given postdated cheques for the next year of rent each time that he signed a new lease. At the signing of this renewal on December 15, 2017, however the situation was different. He states in his testimony that rather than giving cheques for the entire term of the lease, 12 months, he was asked by Peter Papadimitriou to give only four postdated cheques for the months of January to April 2018. According to Mr. Okuomose’s version of the events, he did this because the building was to be sold and he knew that it would be difficult for Mr. Okuomose to relinquish his business.

He, therefore, accepted that the consideration for the lease be limited to the first four months. [ 11 ] This evidence was given under reserve of the objection to the contradiction of the written instrument (P-2) establishing, expressly, a lease with a term of one year and the re-conduction of the financial clauses of the original lease (P-1). [ 12 ] Mr. Papadimitriou denies having received cheques during this meeting and denies that he made any agreement or promise to not insist upon the full payment of the rent owing under the lease. He testified that Mr.

Okuomose did not have cheques that day and that he brought them later. [ 13 ] Mr. Papadimitriou also states that the tenant was often late in paying rent even though he had always given postdated cheques each year. Sometimes the cheques would not be honoured and would have to be replaced later and sometimes, Mr. Okuomose would tell him not to deposit the cheques immediately because of cash flow difficulties. Mr.

Papadimitriou testifies that he tolerated these late payments at various times throughout the business relationship. [ 14 ] By way of the production of deposit slips he demonstrates that in the beginning of 2018, cheques were cashed for the last few months of 2017 and that the payment of the rents for 2018 were only deposited beginning on May 22, 2018 and then in June, July and August 2018. [ 15 ] Thus in September 2018 rent was owed since May. [ 16 ] The sale of the building was imminent and Mr. Okuomose was not providing any more cheques.

A letter of demand (P-4), dated September 18, 2018, was served on the Defendants claiming $ 23,569.90 representing the rents of May 2018 to September 2018, plus snow removal fees provided in clause 3.3.2 of the lease, for a total of $ 24,029.80. [ 17 ] Serious about collecting the rents, the Plaintiff brought its introductory proceeding on October 3, 2018. [ 18 ] 9174 did not answer, but Mr. Okuomose filed a personal answer only when pushed to do so by a notice under

article 158 of the Code of Civil Procedure . The judge presiding in practice division, on November 21, 2018, relieved Mr. Okuomose of his default to reply, but noted an inscription by default against 9174. [ 19 ] The case protocol agreed to by the Plaintiff’s attorney and Mr. Okuomose mentions the value of the subject matter of the dispute as being $ 33,457.76, although the introductory motion claiming $ 28,743.78 had not yet been amended.

In fact, based on the assertion that rent is unpaid from May to December 2018, the claim is properly stated as $ 37,711.84. [ 20 ] The case included conclusions in resiliation and the accessory conclusion for expulsion within a time of 10 days following the date of judgment. Mr.

Osaro Okuomose states that when he returned the keys on November 30, 2018, he felt that he was complying with a court order given the situation in the record according to which 151170 was not contesting these conclusions. [ 21 ] This is why he takes the position that he was entitled to resiliate the lease and return the keys on November 30, 2018. [ 22 ] The defence that he filed pursuant to the protocol was dated November 27, 2018, but this defence did not mention, in any way, any position concerning the premature termination of the lease.

Analysis [ 23 ] The Plaintiff’s objection to the testimonial evidence concerning the agreement for the renewal of the lease in 2018 is well-founded pursuant to

article 2863 of the Civil Code of Quebec : 2863. The parties to a juridical act set forth in a writing may not contradict or vary the terms of the writing by testimony unless there is a commencement of proof. [ 24 ] Mr. Okuomose’s statement or belief that he would only be liable for four months rent, because he only gave four months of rent cheques is not any admission on the part of the Plaintiff and it does not render plausible the fact that the parties were agreeing to a lease where only four months of rent would be paid, although the term of the lease and the payment stipulated in writing was for a monthly rent throughout the term of the lease.

[ 25 ] When he was asked to testify on the issue, also under reserve of the objection, Mr. Papadimitriou simply denied the assertion stating that he did not receive any cheques the day that the renewal agreement was signed. [ 26 ] Mr. Okuomose’s testimony is therefore not admissible. [ 27 ] Even if it were admissible, the probative value of the testimony is extremely weak. If Mr.

Papadimitriou had wished to make such a concession, to compromise the right to an ordinary commercial rent because of past considerations, he would not have tendered for signature a document that made no statement in that regard. [ 28 ] Mr. Okuomose, if he was receiving such a benefit, would have normally insisted on the financial terms thus modified being written down in the document. [ 29 ] While there had been circumstances in the past where the Lessor had tolerated late payment, the payments received were always accrued to the oldest remaining debt.

This practice continued in 2018 where 151170 deposited first the cheques for the arrears of 2017 and, only when these payments had passed, started, in May 2018, to deposit the rents for January through April 2018. [ 30 ] The defence related to this alleged agreement fails because of the inadmissibility of the testimony and, subsidiarily, its insufficient probative value. [ 31 ] This is not a situation where the parties made their agreements on the basis of a handshake or with a mere exchange of words.

There was a long history of formal written agreements, written in clear language stipulating the parties’ obligations and their modalities. [ 32 ] The fact that the building was about to be sold is not in of itself an extraordinary event. Mr. Papadimitriou states that he had informed Mr. Okuomose when the building went onto the market, and the renewal agreement was entered into at a time when it was clearly known by Mr. Okuomose that the property would be sold fairly soon. [ 33 ] Mr. Okuomose refers to conversations he had with Mr.

Papadimitriou where he spoke about his past illness and the hardship he suffered because of this, and that Mr.

Papadimitriou expressed surprise and sympathy, but these conversations do not bear on the contractual relationship between the parties. [ 34 ] There was also some testimony about the state of the premises when they were returned on November 30, 2018 and the testimony of the parties is contradictory, but this has no effect on the state of affairs between the parties in December 2017. [ 35 ] Finally, the resiliation of the lease that took place on November 30 was a resiliation where the Lessee was in default.

The legal proceedings at that time sought the resiliation of the lease by judicial order, but 9174 did not acquiesce to the demand in respect of those conclusions. The case was to proceed by default against 9174 with the almost certain result that the lease would be resiliated by judicial order, but pending such judicial resiliation the Plaintiff could not presume that the lease was resiliated by the mere passivity of 9174 in the proceedings. [ 36 ] Mr. Okuomose made no statement in his oral defence concerning resiliation, simply denying default.

The first notification that he gave of his intention to consider the lease as resiliated was the return of the keys on November 30, 2018. [ 37 ] The lease provided for a resiliation with a three-month written notice and when there was only one month left in the term, it was not possible for 151170 acting through Mr. Okuomose, to give effect to a voluntary resiliation of the lease. [ 38 ] Therefore, the rent is owed for the remaining month of the term given that the forfeiture of the possession and non-payment of rent of December was prejudicial to the Plaintiff.

FOR THESE REASONS, THE COURT : GRANTS the Plaintiff’s action; CONDEMNS the Defendants, 9174-3328 Québec Inc. and Osaro Okuomose solidarily to pay the Plaintiff the sum of $ 37,711.84 together with interest at the legal rate and the additional indemnity provided at

article 1619 of the Civil Code of Quebec , calculated on the amount of $ 28,743.78 from October 3, 2018, and calculated from the date of the present judgment on the amount of $ 8,977.06; WITH legal costs in favour of the Plaintiff. __________________________________ DAVID L. CAMERON, J.C.Q. Me Natasha Sivret barrette & associés avocats inc. Plaintiff's Attorney Mr. Osaro Okuomose

Without representation Date of hearing: September 11, 2019.