Sturgeon Tire, 2015 MBCA 91

Citation: Sturgeon Tire

(1993) Ltd v Burron, 2015 MBCA 91 Date: 20150918 Docket: AI15-30-08344 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Diana M. Cameron Mr. Justice Christopher J. Mainella Madam Justice Jennifer A. Pfuetzner BETWEEN : STURGEON TIRE

(1993) LTD. ) W. S. Gange and ) K. B. Bomback (Plaintiff) Respondent ) for the Appellants ) - and - ) R. D. Buchwald and ) J. W. Enns RAMON CLIFFORD BURRON and ) for the Respondent NORMA EVELYN BURRON ) ) Appeal heard and (Defendants) Appellants ) Decision pronounced: ) September 18, 2015 On appeal from 2014 MBQB 240 , 312 ManR (2d) 35 CAMERON JA (for the Court): [ 1 ] This is an appeal from the order of the motion judge granting

summary judgment to the plaintiff respecting its action seeking a declaration that an option agreement for the purchase of two parcels of land is valid and requesting various ancillary orders that follow. It is also an appeal from his order dismissing the defendants’ counterclaim and their motion for

summary judgment dismissing the plaintiff’s claim. At the conclusion of the hearing we dismissed the appeal with costs and brief reasons to follow. These are those reasons. [ 2 ] The relevant facts are that, in 1996, the plaintiff leased one of the two parcels of land in question for two years with an option to renew the lease for three further five-year terms. The option to renew was exercisable by the plaintiff giving notice of renewal, in a prescribed form, at least 60 days prior to the lease’s expiry. Pursuant to a separate agreement, the plaintiff had an option to purchase both parcels of land.

The option to purchase was exercisable by the plaintiff up until 30 days following the expiration of the term of the lease. [ 3 ] The plaintiff’s attempt in 2012 to exercise the option to purchase the two parcels of land was rebuffed by the defendants. The defendants resisted the motion for

summary judgment on the basis that there was no evidence of strict compliance with the renewal terms of the lease in 1998 or 2003. The defendants argued that, because there was no proof the lease had been renewed in the prescribed way, it had expired and, consequently, so did the option agreement. The defendants asserted the fact that the plaintiff remained on the property and continued to pay rent from 1996-2012 only constituted evidence that it was an over-holding tenant on a year-to-year lease arising at common law. [ 4 ] While the defendants raise six grounds of appeal, they can be summarized as follows.

First, that in light of the law regarding the enforcement of renewal options and options to purchase, the motion judge erred in finding that the plaintiff had made out a prima facie case that the lease was properly renewed. The defendants assert that the motion judge could not have reached such a conclusion because there was no evidence regarding the alleged renewals in 1998 and 2003. Related to this, they also argue that the lack of evidence that the lease was renewed raised a triable issue.

Second, they assert that the motion judge wrongly based his decision in equity. [ 5 ] The motion judge was alive to the position of the defendants. However, he rejected it. He held that, based on all of the circumstances, including the fact that all of the parties treated the lease as if it had been renewed; that there was a formal renewal entered into in 2008 upon which the parties acted for four and one-half years; and that the defendants did not raise the issue of strict compliance with the lease renewal terms until the plaintiff moved to exercise the option to purchase in the fall of 2012, the lease was

renewed and therefore the option to purchase had not expired. A review of the entire record (including the cross-examination of the defendant Ramon Burron) shows that there was evidence that could support the inference that the lease was continuously in existence as a result of the renewals, and that both parties were of the belief that the plaintiff was compliant with it. [ 6 ] In our view, it was this inference that formed the basis of the motion judge’s decision.

While he referred to principles of equity in his decision, we do not take his comments to mean that he could rely on equity to create an option to purchase which was not previously valid. Equity is a shield, not a sword. The prima facie case that a binding option to purchase existed was made out on a reasonable inference to be drawn from the conduct of the parties, not any equitable principle.

We are also not persuaded by counsel’s alternative submission that, at a minimum, the motion judge should have concluded that Ramon Burron’s evidence as to what he knew about the lease and its renewal raised a genuine issue for trial, notwithstanding a prima facie case that the option to purchase was in existence when the plaintiff exercised it. [ 7 ] The decision of the motion judge is a discretionary one, calling for review on the standard of great deference.

After careful consideration of the defendants’ able submissions, we were not persuaded that the motion judge either misdirected himself or that the decision he arrived at was wrong, let alone so clearly wrong as to amount to an injustice (see Towers Ltd v Quinton’s Cleaners Ltd et al , 2009 MBCA 81 , 245 ManR (2d) 70 ). [ 8 ] The appeal was dismissed with costs. JA JA JA