2024 QCCS 24, 2024 QCCS 24

Akelius Montréal Ltd. c. 9314-3634 Québec inc. 2024 QCCS 24 SUPERIOR COURT CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTRÉAL (Civil Division) No : 500-17-126997-231 DATE : January 9, 2024 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI, J.C.S. ______________________________________________________________________ AKELIUS MONTRÉAL LTD. Plaintiff v. 9314-3634 QUÉBEC INC. And 9338-0806 QUÉBEC INC.

Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Akelius Montréal Ltd (“ Plaintiff ” or the “ Landlord ”) claims $101,124.55 from 9314-3634 Québec Inc. (“ Tenant ” or “ 9314 ”) on the grounds that it failed to honor its contractual obligations under a commercial lease agreement entered into between the parties. It further prays this Court to resiliate the lease. [ 2 ] Initially, the lawsuit was commenced against 9314 and 9338-0806 Québec Inc. (“ 9338 ”), the initial tenant under the lease.

Neither of the corporate defendants filed an answer to the summons. [ 3 ] Moreover, on December 14, 2023, 9338-0806 Québec Inc. filed for bankruptcy and on January 8, 2024, a stay of proceedings was issued pursuant to

section 69.3 of the Bankruptcy and Insolvency Act . [1] [ 4 ] Hence, the case proceeded by default against 9314 solely. [ 5 ] Akelius’ lawsuit stems from the following facts. [ 6 ] On August 21, 2019, Akelius entered into a lease agreement with 9338 whereby the latter agreed to lease commercial premises located on St.

Mathieu Street in Montréal for a seven-year term, beginning September 1, 2019, for the purpose of operating a grocery store (hereinafter the “ Lease ”). [2] [ 7 ] For the first year of the term of the Lease, the tenant agreed to pay a gross yearly base rent of $36,000 payable by way of equal and monthly installments of $3,000, plus all applicable taxes, payable on the first day of each month.

The Lease provides an annual 3 % increase of the base rent commencing on the second year of the term. [ 8 ] On November 30, 2021, Akelius agreed to the assignment of the Lease by 9338 to 9314. [3] Under the terms of the Assignment of Lease and Landlord’s Consent Agreement, 9338 agreed to remain liable during the balance of the term of the Lease of all the terms and conditions in the Lease, including the payment of the rent.

Likewise, 9314 agreed to pay to Akelius the rent owed under the Lease and to observe and perform the terms and conditions contained in the Lease. [ 9 ] Since the assignment of Lease, the Defendants have failed to pay all or part of the rent owing under the Lease.

In fact, the last rental payment made was in the amount of $1,000 on February 1, 2023. [4] [ 10 ] On August 14, 2023, Akelius, through its attorneys, sent 9338 and 9314 a demand letter enjoining them to pay $35,428.93 in rent arrears. [5] [ 11 ] On August 17, 2023, further to a recalculation of the rent arrears, 9314 was enjoined to pay rent arrears of $54,220.01. [6] [ 12 ] On the same day, 9314’s representative disagreed with this amount but nonetheless admitted that it owed rent arrears of $42,072.55. [7] [ 13 ] On September 26, 2023, Akelius commenced proceedings in recovery of rent arrears and for a safeguard order. [ 14 ] On October 2, 2023, this Court issued a safeguard order enjoining the Defendants to pay monthly rent in the amount of $3,882.17 beginning with the rent owed for October 1, 2023.

[ 15 ] The Defendants have not complied with the safeguard order. [ 16 ] Moreover, on November 24, 2023, 9314 abandoned the leased premises. [ 17 ] Although Akelius has hired a real estate broker to release the leased premises, they remain vacant to this day. [ 18 ] As of December 31, 2023, the Defendants owe rent arrears of $47,424.79. [8] [ 19 ] Considering their failure to pay rent and considering that they have abandoned the leased premises contrary to their obligation to continuously occupy them, the Defendants are in default under the terms of the Lease [9] . [ 20 ] Given the Defendants’ default, Akelius is entitled to a judicial resiliation of the Lease as of the date of this judgement, the immediate payment of rent arrears of $47,424.79 which includes all rent payable and owed as of December 31, 2023, plus interest at the contractual agreed upon rate of 9.2% as per clause 10 of the Lease. [10] [ 21 ] Moreover, pursuant to

article 10, paragraph 3 of the Lease, Akelius is also entitled to recover from the Defendants an indemnity equivalent to 15% of the rent arrears, namely $7,113.72 (15% of $47,424.79). [ 22 ] Finally, Akelius is also justified in claiming and recovering from the Defendants accelerated rent in the amount of $46,586.04 pursuant to

article 10 of the Lease Agreement (12 months rent x $3,882.17). [ 23 ] While Akelius submits that the Court could raise on its own initiative the potentially abusive nature of the accelerated rent provision of the Lease, the Defendants nonetheless bear the burden of proving that the Lease is a contract of adhesion within the meaning of

article 1379 of the Civil Code of Québec , and that this clause is abusive within the meaning of

article 1437 of the Civil Code of Québec . [ 24 ] Since the Defendants have failed to answer the summons and the trial proceeded by default, they have not adduced any evidence which would allow the Court to conclude that the Lease is a contract of adhesion and that the accelerated rent provision of the Lease is in an abusive clause. Therefore, the Court will not reduce any of the Defendants’ obligations under the accelerated rent provision of the Lease. [ 25 ] Considering the stay of proceedings issued in favor 9338, the application for recovery of rent will only be granted as against 9314.

Moreover, as requested by Akelius at the trial, all interest payable by 9314 under the terms of the Lease Agreement and this judgement will be calculated and awarded as of the date of the judgment.

FOR THESE REASONS, THE COURT: [ 26 ] GRANTS in part the Demande introductive d’instance modifiée en résiliation de bail et en réclamation de loyers dated December 20, 2023; [ 27 ] RESILIATES the Lease Agreement entered into on August 21, 2019 (P-1); [ 28 ] CONDEMNS 9314-3634 Québec Inc. to pay to Akelius Montréal Ltd. $47,424.79 plus interest at the rate of 9.2% calculated as of the date of this judgment; [ 29 ] CONDEMNS 9314-3634 Québec Inc. to pay to Akelius Montréal Ltd. $53,699.76 with interest at the legal rate and the additional indemnity provided at

article 1619 of the Civil Code of Québec calculated as of the date of the present judgment; [ 30 ] WITH COSTS. __________________________________ ENRICO FORLINI, J.C.S. Mtre Marc Lanteigne De Grandpré JoliCoeur S.E.N.C.R.L. Plaintiff’s lawyer Date of hearing: January 3, 2024