Mylyn Chamberlin - v. -, 2011 SKPC 72

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2011 SKPC 072 Date: June 1, 2011 File: #27/10 Location: Wynyard _____________________________________________________________________________ Between: Mylyn Chamberlin - and - Brian Garth Larson, Alvin Edward Larson and Stanley Maynard Larson Mylyn Chamberlin For the Plaintiff Brad S. Mitchell For the Defendants _____________________________________________________________________________ DECISION J.A.

PLEMEL , J _____________________________________________________________________________ [ 1 ] In April and May of 2009, the three Defendant landlords who are brothers each entered into separate Rental Agreements to rent quarter sections of farm land to the Plaintiff. The claim involves four quarter sections. The amount to be paid by the Plaintiff for each quarter was based on the number of cultivatable acres. Two of the quarters, which were held in trust for a fourth brother, also required payment of GST.

But for the difference in land descriptions and number of cultivatable acres, the terms of all three agreements relevant to my decision are identical. The agreements were to be for seven years from January 1, 2009 to December 31, 2015.

[ 2 ] The Plaintiff claims $3,650.00 from Brian Garth Larson; $3,650.00 from Alvin Edward Larson; $5,100.00 jointly and severally from the three named Defendants. Put another way, the Plaintiff claims that the Defendants collectively owe him the sum of $20,400.00 less $8,000.00 which he admits he owes them for unpaid rent. The total he claims, therefore is $12,400.00. [ 3 ] Paragraphs 7 and 8 of the Rental Agreement are relied on by the Plaintiff. They state as follows: 7.

If the landlord wishes to terminate the lease prior to the expiry date of this agreement, the landlord is obligated to reimburse the tenant an amount in proportion to the remaining time left on lease, the said amount on which the proportion is calculated shall not exceed $40.00 per acre. 8.

If the landlord wishes to sell the land referred to in this lease prior to the expiry date of this agreement, the tenant shall have the right to match any offer that the landlord may receive and failing that, the tenant shall receive reimbursement as stated in clause 7 above. [ 4 ] The evidence is that there are a total of 520 cultivatable acres. The Plaintiff’s claim is based on $40.00 per cultivatable acre. 520 x $40.00 = $20,800.00.

I am uncertain why the Plaintiff claims $20,400.00 less $8,000.00 rather than $20,800.00 less $8,000.00, but this minor discrepancy is not material to my decision. [ 5 ] The Defendants argue that any remuneration payable by them to the Plaintiff was contingent upon the Plaintiff’s payment of the full rent as contemplated in paragraph 4 of the Rental Agreement.

That paragraph required payment of rent on or before December 15, 2009, which was the first year of the lease and then payments on June 30 th and December 15 th , every subsequent year for the duration of the lease. [ 6 ] In the very first year of the lease, the Plaintiff failed to pay any rent on or before December 15 th as required. He testified that he had cash flow problems and that he spoke with the Defendants who told him they would accept late payment as long as he would pay enough so that they could pay the taxes on the two quarters being held in trust.

He testified that he therefore paid Stanley Larson $2,000.00 on December 31, 2009. [ 7 ] The Defendants all testified and all denied that they told him late payment was acceptable to them. I accept their evidence and reject the evidence of the Plaintiff on that point. I am satisfied that the Plaintiff did talk to Stanley Larson on or about December 20, 2009. I accept Stanley’s evidence that while he was not consenting to the Plaintiff’s late payment of rent, he asked that he at least pay enough so they could pay taxes on the trust properties.

In doing so, he was not agreeing to late payment of the total amount due, but rather, accepting the inevitable and making the best of the situation the Plaintiff was putting them in. [ 8 ] There were other discussions between the Plaintiff and the Defendants in January about the rent but no rent was paid. Realizing that the Plaintiff was unable to comply with the Rental Agreement and pay rent as stipulated, the Defendants placed an advertisement in a local newspaper. The wording of the advertisement is not in evidence but it is clear that the Defendants were indicating that the land was for sale.

The Plaintiff testified that he saw this ad in January 2010 and at that point he told the Defendants that he would not pay the balance of rent of $8,000.00 because if they sold the land then they would be indebted to him, pursuant to paragraph eight of the Rental Agreement. It appears to me that this conversation took place in the middle of February 2010 and not in January, as the Plaintiff testified.

Brian Larson testified that the advertisement was first published in the newspaper on February 15, 2010 and the Plaintiff subsequently called him in an aggrieved state, reminding him that he had the right to match other purchasers’ offers under the Rental Agreement. Brian Larson testified that he demanded payment of the rent again at that time and that the Plaintiff refused, instead asserting his right to match other offers to purchase. Brian Larson testified he told the Plaintiff at that time that he would keep him posted about offers that were coming in and that he did so.

After March 31 st , when the time for offers closed, Brian testified that he again spoke to the Plaintiff and told him that they had received offers and that they were going to sell three of the four quarters. Brian testified that he told the Plaintiff he had received an offer of over $60,000.00 for his quarter. There was a discussion between them that property was selling in the area for around $60,000.00 and the Plaintiff stated he did not have that kind of money. He did not ever make an offer on the property. I accept Brian Larson’s evidence regarding this discussion.

Furthermore, there is no evidence that the Plaintiff asked what offers were received for the other quarters. [ 9 ] Three of the quarter sections were sold sometime after March 31, 2010. I do not have evidence of the exact dates of the sales nor the exact amounts they sold for.

[10] Although no formal offer was made to sell the land to the Plaintiff, I find that had he wanted, he could have asked theDefendants what the offers were and he could have made an offer to match any others which were made. Instead, he stated to BrianLarson that he could not match the offer on his property of over $60,000.00. There is no evidence that he asked what the purchase pricewas for the other two quarters which were sold or that he was interested in matching offers on those quarters either. [11] I find that the Plaintiff had no intention to match offers that the Defendants received.

Instead he viewed the Defendants’ saleof the land as a termination of the Rental Agreement. His intention was to rely on the clauses which allowed him up to $40.00 per acre ifthe Defendants terminated the agreement. [12] However, I agree with the Defendants’ argument that it was the Plaintiff, not they, who repudiated the agreement. ThePlaintiff cannot now rely on its terms to claim payment of $40.00 per acre. [13] I find that the Plaintiff’s failure to pay the rent on December 15, 2009 was a fundamental breach of the agreement and arepudiation of the contract by him.

Truscott J. of the British Columbia Supreme Court stated: A failure to pay rent as and when due is a repudiation of the lease by the tenant. It is the most fundamental obligation of the tenant andfailure to pay the rent as required is a repudiation of the agreement by the tenant indicating that it no longer considers itself bound by theterms of the lease. (Triple Holdings (BC) Inc. v. Kontzamanis, 2004 BCSC 394, para. 17. See also: 722924 Alberta Ltd. v. Sinn, 2002ABPC 2, para. 10; 491506 B.C. Ltd. v.

McElmoyle, 2004 BCSC 1075 , 2004 Carswell BC 1837, para. 43.) [14] The Supreme Court of Canada referred to a landlord’s rights when a tenant is in fundamental breach of a lease or hasrepudiated it. Laskin J. stated: The developed case law has recognized three mutually exclusive courses that a landlord may take where a tenant is in fundamentalbreach of the lease or has repudiated it entirely, as was the case here. He may do nothing to alter the relationship of landlord and tenant,but simply insist on performance of the terms and sue for rent or damages on the footing the lease remains in force.

Second, he mayelect to terminate the lease, retaining of course the right to sue for rent accrued due, or for damages to the date of termination forprevious breaches of the covenant. Third, he may advise the tenant that he proposes to re-let the property on the tenant's account andenter into possession on that basis.

Counsel for the appellant, in effect, suggests a fourth alternative, namely, that the landlord may electto terminate the lease but with notice to the defaulting tenant that damages will be claimed on the footing of a present recovery ofdamages for losing the benefit of the lease over its unexpired term. One element of such damages would be, of course, the present valueof the unpaid future rent for the unexpired period of the lease less the actual rental value of the premises for that period. ... (HighwayProperties Ltd. v.

Kelly, Douglas & Co., (SCC), [1971] S.C.R. 562 at 570.) [15] In a letter dated April 8, 2010, Brian Larson wrote a letter to the Plaintiff on behalf of the Defendants in which he terminatedthe leases. Exhibit P-3 is a copy of this letter. In doing so the Defendants were exercising one of their options which was their right asoutlined by the Supreme Court of Canada in the above passage. [16] The Plaintiff now wants to rely on clause 7 of the agreement which he himself repudiated.

Pursuant to that clause, theDefendants were to pay the Plaintiff up to $40.00 per cultivatable acre if they wished to terminate the lease. They did not wish toterminate the lease. They wished the Plaintiff would pay the rent as he agreed. It is only because he has refused or was unable to pay itthat they terminated the lease. He cannot now rely on clause 7 of the agreement which he repudiated. [17] In 2009, the Plaintiff stated he had input costs on the land as he under-seeded it to alfalfa. Aside from the contract is heentitled to any reimbursement at this time?

His costs were for harrowing, fertilizer, fuel and seed. He also had some income from theland although it was not a large amount, given that this was the first year of production and the alfalfa crop had not yet reached thepotential yield it might have in subsequent years. I heard evidence that in their negotiations prior to this trial the Defendants took theposition that they would compensate the Plaintiff based not on the maximum of $40.00 per acre but rather, based on his input costs. However, the Plaintiff neglected or refused to provide them with receipts for these costs.

Similarly, at trial the Plaintiff did not providereceipts as he felt it was not required and that he should simply be awarded judgment based on $40.00 per cultivatable acre.

[ 18 ] Given my finding that the Plaintiff repudiated the contract, I find he is not entitled to payment under its terms. Furthermore, I do not have any suitable evidence of the input costs he may have incurred in 2009 to award him judgment on any other basis. I note the Defendants have not counterclaimed for the $8,000.00 rent he failed to pay them so this will no doubt help to cover some of his input expenses. [ 19 ] I dismiss the Plaintiff’s claim. I am taking into consideration the fact that he had input expenses on this land and I am therefore not awarding costs against him. J.A. Plemel, J