) ) 1723718 ONTARIO CORP. Plaintiff – v. –, 2010 ONSC 6665

CITATION : 1723718 Ontario Corp. v. MacLeod, 2010 ONSC 6665 COURT FILE NO.: 222/09 DATE: 2010-12-14 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) 1723718 ONTARIO CORP. Plaintiff – and – MALCOLM K. MacLEOD Defendant ) ) ) ) ) ) ) ) ) R. Quance, for the Plaintiff T. Kasi and D.

Truelove, for the Defendant ) ) )) HEARD: September 27, 28, 29 & 30, 2010 at Woodstock, Ontario HEENEY J.: [ 1 ] If a landlord, who has covenanted to be solely responsible for repairing and maintaining the heating system, fails or refuses to repair a broken boiler in the middle of a Canadian winter, thereby rendering the premises too cold for the tenant to conduct his medical practice, is that a fundamental breach entitling the tenant to terminate the lease? That is the central question posed by this case. The Facts: [ 2 ] The defendant, Dr.

Malcolm MacLeod (whom I will sometimes refer to as “the tenant”), is a general surgeon who has practiced in Woodstock for 25 years. In the year 2000, he relocated his medical practice to the second floor of 384 Dundas St. in Woodstock, because a company owned by his wife had purchased the building, and he was to be a primary tenant. It was an old bank building, solidly built, with an elevator servicing the second floor. This was an important feature to Dr.

MacLeod, since his practice as a surgeon involved seeing patients who were just about to undergo surgery, or who were in recovery from surgery, and whose mobility is often limited and who would be unable to use the stairs to access his office. [ 3 ] According to Dr. MacLeod and his office manager Kim Tipping, they were happy and comfortable in these premises, and became well established there over the years that followed. [ 4 ] In March 2007, the building was sold, following Dr. MacLeod’s separation from his wife. The purchaser was the plaintiff 1723718 Ontario Corp., whose principal was Wei Wei Liu. Since Ms.

Liu is the human face of the corporate landlord, I will sometimes refer to her as “the landlord” in these reasons. [ 5 ] A lease had been signed by Dr. MacLeod and his wife, prior to the sale of the building, dated January 30, 2007. It leased the second floor of the premises to Dr. MacLeod from February 1, 2007 to January 30, 2010. The base rent was $24,000 per year plus GST, payable in equal monthly instalments of $2,120. The lease provided for no additional rent. [ 6 ] The following terms of the lease are relevant to this action, and I reproduce them here: 6.

The following services and expenses are the sole responsibility and expense of the Tenant: JANITORIAL AND MAINTENACE OF INTERIOR OF TENANTS SPACE. 7. The following services and expenses are the sole responsibility and expense of the Landlord: 1. HEAT, HYDRO, WATER, MUNICIPAL TAXES, HALLWAY MAINTENACE, ELEVATOR MAINTENACE, SNOW REMOVAL. 2. TENANT SHALL BE ALLOWED FULL ACCESS TO ELEVATOR FOR PATIENTS. 3. TENANT SHALL HAVE ONE DESIGNATED PARKING SPOT AT REAR OF BUILDING. 8. The Landlord shall also be solely responsible for repairs or improvements to the structure and to the exterior of the building. 9.

Any services and expenses relevant to the use by the Tenant of the Premises and not mentioned in this lease are the responsibility and expense of the Tenant. Roof repair, structural repairs, heating and air conditioning repairs to be the responsibility of the Landlord.

[ 7 ] Ms. Liu assumed this lease when she purchased the building, and became liable for the duties imposed on the Landlord thereunder.

Schedule A to the lease was annexed at her request, and it reads as follows: A. IT IS UNDERSTOOD THAT THE BUILDING IN WHICH THE SUBJECT LEASED PREMISES ARE LOCATED IS FOR SALE UNDER CONTRACT. B.

THE NEW OWNER/LANDLORD (AT HER EXPENSE) INTENDS TO SEPARATE THE HEATING, AC, HYDRO SYSTEMS TO EACH FLOOR AND AT THAT TIME THE TENANT SHALL BE RESPONSIBLE FOR THESE AFOREMENTIONED CHARGES (INCLUDING SEWER & WATER WHICH ARE PART OF THE WOODSTOCK HYDRO MONTHLY BILL) IN ADDITION TO THE BASE MONTHLY RENT WITH THE CLEAR UNDERSTANDING THAT THE BASE MONTHLY RENT SHALL BE REDUCED FROM $2,000 PER MONTH TO $1,800 PER MONTH (PLUS G.S.T.). [ 8 ] According to Dr. MacLeod’s evidence, and that of Ms.

Tipping, which I accept, they continued to be well settled and content in these premises, and intended to remain there at least until the end of the term provided under the lease. However, not long after Ms. Liu bought the building, problems began to develop. [ 9 ] To begin with, she purported to implement the terms of

Schedule A, and began billing Dr. MacLeod for hydro, water and gas separately, while at the same time reducing the base rent to $1,800 per month. She did install a new utility meter. However, it was not installed by Woodstock P.U.C. as the tenant expected, but rather by Ms. Liu’s ex-boyfriend, Hassam Hashemi, who purportedly operated a business named CPU Electric. Furthermore, separate utility meters for each floor were not installed, even though

Schedule A clearly indicates that the landlord intends to separate the heating, AC and hydro systems to each floor. Such a separation could only occur by separating the services feeding into each floor, and monitoring the consumption on each floor with separate meters. Instead, each utility service to the building continued to flow through one meter only. [ 10 ] Dr. MacLeod, in fact, believed that separate meters had been installed by Ms.

Liu, and faithfully paid the amounts she demanded each month, even though she failed to provide copies of any actual utility bills to his premises to verify the charges she was imposing on him. There was, however, no actual separation of these services, and no way of billing him for only the services he consumed. Instead, Ms. Liu arbitrarily charged Dr. MacLeod a certain percentage of each bill, as she alone determined. She had difficulty clarifying precisely how she arrived at Dr. MacLeod’s proper share, and ultimately admitted on cross-examination that she charged him “whatever I thought was fair”.

When she was taken through the bills on cross-examination, it was found that she had overcharged him in several instances, even according to her own arbitrary percentage system. [ 11 ] Nothing ultimately turns on this, in the overall resolution of the issues that matter in this case. However, it does reflect poorly on the plaintiff’s honesty and, therefore, her credibility. She purported to be carrying out the terms of

Schedule A, but did not in fact do so, and she failed to be transparent, open and honest in the manner that she billed the tenant for utilities. [ 12 ] The next source of discontent was the elevator. As already noted, it was seen by Dr. MacLeod, rightly so, to be an essential attribute of the premises. The lease expressly provided a right of access to the elevators for his patients, and expressly made the landlord responsible for its maintenance. [ 13 ] The elevator operates on hydraulic oil, and requires a monthly inspection by an elevator service company in order to maintain the elevator license.

In July 2007, an inspector from the Technical Standards & Safety Authority spoke to Kim Tipping to say that they were looking for a key to the elevator machine room in the basement and wanted to change the ownership certificate in the elevator. She passed that information on to Ms. Liu by email dated July 10, 2007, and assumed all was well. [ 14 ] On December 10, 2007, Ms. Liu wrote an email to Dr. MacLeod, saying “if you would like to keep the elevator running well, you have to pay for the monthly Elevator maintent.” ( sic ) She said that she had negotiated a rate of $180 per month for the maintenance contract.

She also said that he would have to pay the outstanding bill for April to June of $883.88, for July to September of $944.87 and October to December of $944.80. She then wrote: “ Please pay attention to the elevator maintenance , this is VERY EMERGENT, otherwise the TTSA will shut off the elevator without further notice.” [ 15 ] This was shocking news to Dr. MacLeod, given the importance of the elevator to his practice. He considered signing and paying for the maintenance contract just to ensure continued operation of the elevator, but Ms. Tipping convinced him to insist that Ms.

Liu comply with her clear obligations in the lease. He responded by email, reminding her that elevator maintenance was her responsibility. [ 16 ] Ms. Liu followed that up with a further email dated December 17, 2007, saying that “time is very emergent now. TTSA pushed to shut off the elevator last week, but I prevent them to do. However, they only give me few days more. I have to get your response to the questions in order to sign maintenance contract with them, which to me is extra expense.” [ 17 ] The following month, Dr.

MacLeod received a copy of a letter from TTSA dated January 16, 2008 saying that the license to operate the elevator had expired. However, it appears that the license was subsequently reinstated. On January 12, 2007, Ms. Liu wrote to say that she had signed a maintenance contract with a firm from London, and had paid the maintenance bill for the last 9 months. [ 18 ] What emerges from all of this is that Ms.

Liu, despite the clear words of the lease, which make elevator maintenance the sole responsibility and expense of the landlord, failed to pay the monthly maintenance contract from the time she acquired the building, to the point where the elevator license was in jeopardy of being cancelled and the elevator shut down. With that crisis looming, she attempted to pressure Dr. MacLeod into paying all of the outstanding invoices, as well as the ongoing monthly maintenance contract. When he resisted, she finally complied with her obligations, and paid what was owing in January 2008. [ 19 ] Ms. Liu denies this.

She insisted in cross-examination that she started paying the maintenance contract in July or August 2007. When asked why they were threatening to shut off the elevator for unpaid fees, she claimed “that is a mistake”. When shown the letter saying that the elevator license had expired, she denied it had ever expired, saying “even if you pay they will say it expired”.

[ 20 ] I do not believe Ms. Liu. Her testimony that she began paying the maintenance bills as early as July or August 2007 is contradicted by her own email of December 10, 2007, where she tried to get Dr. MacLeod to pay the bills that were outstanding from April to December, 2007. She was simply not prepared to admit that she created a crisis from her refusal to abide by her clear obligations in the lease, and this pattern was repeated in much of the rest of the evidence she gave.

In general I found her testimony to be vague, contradictory, self-serving and decidedly lacking in credibility. [ 21 ] The next area of concern was maintenance of the main floor lobby and hallways, leading to the elevator. Once again, the lease clearly makes such maintenance the responsibility of the landlord. The tenant was only responsible for maintaining the space within his unit. Dr. MacLeod, and Kim Tipping, testified that cleaning was sporadic and intermittent, and that the hallways became progressively dirtier, with dirt, dust, cobwebs and dead bugs visible to patients entering the premises. Ms.

Tipping saw the state of cleanliness, or lack thereof, as far below what a member of the public would expect upon entering a doctor’s office. At one point, Dr. MacLeod instructed Ms. Tipping to have their own cleaning staff clean the hallways, even though it was the landlord’s responsibility, just to get it done. [ 22 ] Ms. Liu again denies this and says she maintained the hallways in a clean state. However, she also admitted that she did the cleaning herself, even though she lived in Toronto and had other properties to take care of.

She had no maintenance company under contract to keep the building clean on an ongoing basis, as would be expected for commercial premises. She said if she couldn’t be there to clean, she would have a “maintenance guy” do it as needed, or when Dr. MacLeod called. She did not identify any person or agency that she called. [ 23 ] Once again, I prefer the evidence of Dr. MacLeod and Kim Tipping, corroborated as it is by the testimony of another employee, Deborah McKay, and by a former employee Joyce Vonhatten. [ 24 ] In a related point, an issue arose with respect to the use of floor mats. Ms.

Liu put mats down in the foyer to help prevent dirt from being tracked into the premises. Normally, this would be a welcome addition. However, rather than putting down proper commercial mats designed for high traffic areas, with rubber edges that lie flat, she put in regular household mats, which turned up at the edges and created a trip hazard for Dr. MacLeod’s patients. His staff moved the mats to remove the hazard, but Ms. Liu insisted that they be put back in place. [ 25 ] Once again, this and the cleanliness issue may be seen objectively as minor complaints.

They do, however, show an emerging pattern of behaviour where the landlord either shirks her responsibilities under the lease, or tries to find the cheapest way to discharge them, even though that falls below what one would expect of a landlord of a commercial building. [ 26 ] The next issue related to snow removal. Once again, the lease expressly makes that task the responsibility of the landlord. And once again, the evidence is clear that she failed to comply with her obligations. Dr.

MacLeod and Kim Tipping testified that the landlord repeatedly failed to keep the front entryway and the rear parking lot cleared of snow. Dr. MacLeod himself went outside on occasion to clear off the three steps leading to the building, out of concern that his patients might slip and fall. As to the rear parking lot, he described one occasion where he hired an outside snow removal company to clear the driveway, after repeated contacts with the landlord over many days failed to produce any results. The landlord reimbursed him for this expense.

Keeping the parking lot clear of snow was not only necessary for employee parking, but also for patient access, since any wheelchair-bound patients had to use the rear entrance to attend the office. [ 27 ] The tenant’s evidence was again corroborated by Deborah McKay and Joyce Vonhatten, but also by Carmela Mason, who brought her elderly mother to an appointment at the office. She testified that, as they approached the office, there was a fairly thick build-up of snow and ice at the entryway, so much so that she was concerned for her mother’s safety.

She asked the receptionist if there was any salt available, so that she could salt the area herself to make it safe for her mother and other patients. [ 28 ] Ms. Liu admitted having had to reimburse Dr. MacLeod for snow removal on one occasion, but denied having received any other complaints or having had any problems with respect to snow removal. She said she had a maintenance guy, Jerry, take care of snow removal in 2007, and a friend of hers, Patrick Parenteau, did it in 2008. Mr. Parenteau testified that he was operating a school bus at the time, and drove by the premises every day.

If he saw that snow removal was needed, he would stop by and take care of it. His attitude toward billing was very casual. He did not send any bills for his work, and told her to “pay me when you want”, or sometimes they would go out and have dinner together. [ 29 ] Ms. Liu was asked on re-examination if she was ever charged with any infractions while Patrick was her maintenance person, and she said “probably once or twice”. However, Bryen Young, a by-law enforcement officer with the City of Woodstock, testified.

One of his responsibilities is enforcement of the city by-law that requires landowners to keep the sidewalk in front of their premises free of ice and snow. He testified that there were a total of 14 by-law infractions at these premises from January 9, 2006 to February 23, 2010. Three of them appear to pre-date the landlord’s ownership of the property. During the period relevant to these proceedings, infractions were issued November 22, 2007, February 7, March 5, March 12 and December 22, 2008, and January 13, 2009.

Four further infractions were issued on and after January 19, 2009, but since the tenant had already vacated by then, they are not relevant. This is independent, reliable evidence that corroborates the evidence of Dr. MacLeod that the landlord was not complying with her obligations under the lease with respect to snow removal. I reject Ms. Liu’s evidence to the contrary. [ 30 ] This evidence once again fits the pattern.

Rather than having a contract with a snow removal company to regularly maintain the premises, as one would expect with commercial premises, the landlord opted to spend as little as she could, with a haphazard and sporadic approach that left her in breach of her obligations under the lease. [ 31 ] Against this backdrop, I now turn to the main events which led to the tenant vacating the property in January, 2009. [ 32 ] Kim Tipping noticed that the office was very cold in October, November and December, 2008.

Even though the office thermostat was set at 22 degrees, the furnace was unable to get the premises up to that temperature, even though it was running non- stop. Dr. MacLeod testified that he was involved in the installation of the separate HVAC system for the second floor during the time his wife owned the building. The size of the furnace installed on the second floor was based on the assumption that the first and third floors

would be properly heated. If they were not, the furnace on the second floor was incapable of heating the premises to a comfortable temperature. [ 33 ] Dr. MacLeod testified that the first and third floors were freezing cold, and that left his office very cold as well. He said he was constantly apologizing to his patients for his cold hands. It was cold enough on the first floor, he said, to see your breath. [ 34 ] The primary source of heating for the ground floor was a boiler, providing hot water radiant heat.

There was an electrical heating system on the ground floor as well, but from the evidence this appears to have been a secondary system only, and had little ability to heat the premises. The landlord controlled the heating settings for the ground floor and third floor, and was responsible for paying the heating bills in relation thereto. [ 35 ] The office closed for the Christmas season on December 18, 2008. On December 23, 2008, Kim Tipping came by to check on the office, and noticed that the temperature on the second floor was only 14 degrees C.

The windows on the first floor were frosted over. [ 36 ] She returned on December 31, 2008 around 2:30 p.m. to check on the office again. She entered through the front door, because the rear door was not accessible. She noticed that an alarm was beeping, and heard running, gushing water. She did not know where it was coming from, but knew that something was wrong in the building. She looked on the fire panel where the beeping was coming from for a number to call in an emergency.

She called, but was told that they could not assist, because the building was no longer covered due to the landlord not paying an outstanding bill for $900. The elevator door was wide open and the elevator was not operational. [ 37 ] She cautiously walked up the stairs to the office, and called Dr. MacLeod to notify him as to what was happening. He told her to call the landlord and tell her that there was an emergency situation going on, and that she needed to get there as quickly as possible. She was to tell Ms.

Liu that it involved water of some sort, and possibly involved the sprinklers from the way the panel was beeping, and that the elevator was not working. [ 38 ] Ms. Tipping tried to call the elevator people, but was told that any service requests had to come from the landlord. She then called Ms. Liu, and told her the situation as instructed. Ms. Liu’s response was to tell her to turn the thermostat up 10 degrees. Ms. Tipping replied: “this is your building, I don’t want to be responsible and be held liable after for making things worse, so you come right away”.

She told her that there was water running somewhere in the building. She thought it was from the basement, but she did not go down to look because she did not like going downstairs. When she ended the conversation, Ms. Tipping assumed that Ms. Liu would be coming that day and that things would be taken care of. She called Dr. MacLeod and told him this. [ 39 ] Dr. MacLeod confirmed having received that telephone call from Ms. Tipping on Dec. 31, 2008, and having told her to call the landlord. On January 3, 2009, he was on call at the hospital, but then went to the office to deliver some paperwork.

The office was still closed for the Christmas holidays. At the door he could hear the beeping alarm panel, and heard the sound of running water coming from the basement. Outside the boiler room he could hear water pouring. He touched the sprinkler and could feel vibrations from running water, so he went to the master valve and turned off the sprinkler system. He then went back to the boiler room, opened the door, and saw water gushing from a hot water pipe. The pipe had ruptured completely, and water was spraying against the wall. He shut off a valve, and water started spraying out of a hole further up the pipe.

He then found the valve to the first and second floor, shut it off and that stopped the flow of water. He noted that all of the walls, floors and ceiling were covered with water. The pressure gauge on the boiler was very low, but the water pump was still running. He phoned the heating company and received instructions on how to safely shut it down. He also called the sprinkler system repair company, because the system could not be turned back on until a sprinkler sensor was replaced. They came out and replaced it that same day. [ 40 ] He then called the landlord and explained the situation in detail.

He told her this had to be seen today, that she must attend to it. She thanked him for what he had done, and said she would make sure it was fixed. [ 41 ] The next day, January 4, 2009, Dr. MacLeod encountered Ms. Liu at the premises. She had brought her ex-boyfriend, Hassam Hashemi, with her. Dr. MacLeod learned at that time that not only had hot water pipes broken and a sprinker gone off, but the boiler was cracked, as was the hot water tank. They told him that the boiler had to be replaced. Ms. Liu said she would fix it, and pointed to Mr. Hashemi as the one who would do it.

No date was given as to when the work would be done. [ 42 ] This disturbed Dr. MacLeod. Mr. Hashemi’s business, CPU Electric, named an empty building on Dundas St. as its business address, which did not inspire confidence. There was no indication that he was qualified to undertake the major work that was clearly needed. Dr. MacLeod expected professional contractors to be on the job, to deal with what he rightly considered to be a “catastrophe”. [ 43 ] He was left with no confidence that he would be able to run an office at these premises ever again, and concluded that he had to make arrangements somewhere else.

This was not something he wanted to do. Instead, he found it frustrating. He had not planned to move, nor did he want to move, but he was convinced that, given the landlord’s history of failing to properly maintain the building, this problem was not going to get corrected any time soon, so as to enable him to carry on his practice. [ 44 ] On January 5, 2009, Kim Tipping came to the office. That was a Monday, and she normally worked Mondays to Thursdays in the office, and half days on Fridays. Dr. MacLeod was at the hospital Mondays, Wednesdays and Fridays, but saw patients at his office on Tuesdays and Thursdays.

It was a busy practice, and he saw thirty or more patients on each of those days. When she arrived on January 5, to prepare for the week’s work, she found the office wholly unsuitable for seeing patients. The temperature was only 15 degrees, and there was no running water. Running water was essential, not only for washroom facilities but also for use in sterilizing equipment and other clinical uses in the office. [ 45 ] She contacted the hospital and was able to make temporary arrangements to run a makeshift office at the outpatient clinic.

She then set about making telephone calls to notify all of their patients of the arrangements. They did run a reduced office at the hospital on that Tuesday and Thursday, but it was a very stressful time. She had no telephone at the hospital, no computer access, and no appointment book. In the meantime, calls were still coming in at the office and going unanswered. She was so upset that, for the first

time in 25 years, she failed to submit Dr. MacLeod’s OHIP billings on time, so that he was financially caught short later that month. Recounting this actually moved her to tears on the witness stand, which was somewhat surprising but emphasized how organized and meticulous she is as an office manager, and how high a value she places on doing her job well. [ 46 ] In the meantime, Dr. MacLeod began looking for alternate premises, having concluded that there was no way he could run a medical office at 384 Dundas St. due to the cold and lack of running water. As it happened, another physician in town, Dr.

Tam, had recently relocated his office and moved in with another group, leaving vacant an office that had been designed as a medical office. Dr. MacLeod toured the premises on January 8, and then negotiated a lease. [ 47 ] On January 13, 2009, the moving trucks arrived and Dr. MacLeod vacated the premises. He testified that, at that time, the first floor was still freezing cold, and there was no evidence that anything had been done to rectify the problems. [ 48 ] On January 16, 2009, he wrote to Ms.

Liu, advising her “that recent events at the building on top of previous problems have caused me to lose faith in your willingness and ability to maintain this building. Therefore I have no option but to give notice that our lease agreement is terminated.” [ 49 ] Photographs were entered as exhibits, which were taken on January 9 and 14, 2009, that provide graphic evidence of just how cold it was. They show the windows on the first floor almost completely frosted over. The needle on the thermostat on the first floor is off the bottom of the scale, which stops at 40 degrees F.

There is a heavy build-up of frost on the door and handle of what is supposed to be the warm side of the rear door, as well as ice on the floor inside the entryway. [ 50 ] Ms. Liu addressed these events in her evidence. She said she gotten a phone call from Dr. MacLeod (not from Kim Tipping) almost at the end of December, about the boiler in the basement and getting water damage. She thought that the call was around Christmas. She told him she would try her best to fix it as soon as possible in view of the holiday season. She said Dr.

MacLeod told her that if she fixed it by January 2, that would be fine. [ 51 ] She said she called a few contractors, and made arrangements with one to go to the premises for the earliest they could get there. She went there with the contractor, and saw a broken boiler, a broken water pipe and a few broken sprinklers. She said they worked until 2 am fixing the water pipe and sprinkler, cleaning the basement and trying to dehumidify it. [ 52 ] While she was there, very late at night, she said Dr. MacLeod arrived.

She told him what they had done, and collected his January rent. [ 53 ] She said she went to the premises on January 6, 2009, with someone from Reliance to replace the hot water tank. She said nobody was at the premises. It is important to note that the hot water tank is not the boiler. It supplies hot water to the second floor, but does not supply heat. [ 54 ] She testified that she was going to replace the boiler, but there was no point in doing so because nobody was there on January 6. However, she also testified that she did not know that Dr.

MacLeod had moved out until she got his letter of January 16, 2009. [ 55 ] She admitted that she had not repaired or replaced the boiler by January 16, 2009, nor has she done so at any time since. [ 56 ] There are obvious conflicts in her evidence with the testimony of Dr. MacLeod and Kim Tipping. Ms. Liu’s evidence with respect to the dates of her contact with them were vague, and serve only to put the date of this catastrophe further back into December than otherwise.

This operates to the detriment of the landlord, since it gives her more time within which to have rectified this problem before the tenant wrote to terminate the tenancy on January 16, 2009. [ 57 ] Where there is a conflict, I accept the evidence of Kim Tipping and Dr. MacLeod. I have already commented upon how meticulous and efficient Ms. Tipping is as an office manager, and I was left with the same impression of her as a witness. She was absolutely certain about the dates when she went to the office in December and January, and who she spoke to and what was said, and I accept her evidence completely.

Her evidence also is consistent with that of Dr. MacLeod, whom I also found to be an entirely credible witness. I am satisfied that Kim Tipping telephoned Ms. Liu on December 31, 2008, to advise her that an emergency was underway that demanded her immediate attention, and that it involved water running somewhere in the building. [ 58 ] What was the landlord’s response to this unfolding catastrophe? There was none. When Dr. MacLeod arrived at the office on January 3, 2009, he encountered the same disastrous situation that Kim Tipping had reported 4 days earlier.

That means that water had been gushing from pipes and soaking the ceiling, walls and floor, for at least 4 days, and perhaps longer depending upon when the precipitating event took place. He took emergency action himself, to stop the water running and to safely shut down the disabled boiler. [ 59 ] It was not until the next day, January 4, 2009, that Ms. Liu finally arrived to deal with the situation. She testified that she had called several contractors, but due to the holiday season, this was the one who could come the earliest. I do not believe her.

To begin with, she did not identify any other contractors that she contacted, saying she had forgotten their names. Secondly, while heating contractors do charge a premium for coming out on holidays, that does not render them unavailable. Losing your source of heat in the middle of the winter is a major crisis, and heating companies are in the business of responding to such crises, albeit at a price. Dr.

MacLeod had no difficulty obtaining immediate assistance from the two contractors he contacted on January 3. [ 60 ] Finally, and most importantly, it defies credulity that the only contractor she was able to obtain, and who was able to respond the earliest, happened to be her ex-boyfriend Mr. Hashemi. She had testified that they have a relationship where “I help him, he helps me”. It “cuts down maintenance costs”.

Consistent with her general approach toward her maintenance obligations discussed above, I find that she had no intention of contacting a qualified heating contractor to deal with the crisis and replace the boiler, but instead decided to try to get by with the assistance of her ex-boyfriend, in order to save money. There is no evidence that Mr. Hashemi was even qualified to do the job. Someone who purportedly runs an electrical company cannot be presumed to have any expertise in plumbing and heating.

[61] What did they do on January 4, 2009? They may well have worked late into the night, but the probability is that they werespending most of their time trying to clean up the massive flood in the basement. Ms. Liu’s response to the flood is once again inkeeping with her overall approach to her duties as landlord. One would have expected her to retain the services of a flood restorationcompany, who would arrive with their industrial fans and dehumidifiers, to dry the premises out as soon as possible in order to reduce topotential for mould growth.

Kim Tipping had a personal experience with major flooding at her own home, and described precisely thatresponse to the situation. Ms. Liu’s response, though, is illustrated by the photograph of a household fan left to run in the basement. Little more needs to be said. [62] Ms. Liu testified that all of the broken pipes were repaired and that they repaired the broken sprinkler system. As to the latter,she is clearly wrong because the sprinkler system was repaired by the contractor called in by Dr. MacLeod on January 3.

As to whetherthe many burst pipes were replaced, she would have had to arrive at the premises with a quantity of new copper pipe and other suppliesin order to have undertaken a repair of that magnitude that night, and there is no evidence of that. I accept the evidence of Kim Tippingthat the water was not operational when she was at the office on January 5, and conclude from that that problems remained with thepipes such that the water could not be turned back on. [63] I draw an adverse inference against the landlord from her failure to call Mr. Hashemi as a witness.

He could have providedtestimony as to what the problems were that he observed, and what repairs were effected. He also could have been cross-examined as tohis qualifications, or lack thereof, to undertake the further repairs that were needed, and as to the timetable, if any, for effecting theneeded repairs. [64] There was some discussion as to what precipitated this catastrophe. Dr. MacLeod theorized that the pipes had burst becausethe landlord had kept the temperature too low, leading to a chain reaction of some sort that involved the sprinkler system and the boiler. He is not an expert, of course.

It is a scientific fact that water expands when frozen, and it is a relatively common occurrence in Canadaduring the winter that pipes freeze and burst from the cold, so there is some logic in his theory. I cannot conclude, on a balance ofprobabilities, that this is what caused the problem, but it is not necessary to do so.

The undeniable fact is that a catastrophe occurred inlate December 2008, from whatever cause, which led to burst pipes, a damaged sprinkler system and a cracked boiler. [65] What is also beyond dispute is that the boiler needed to be replaced in order to return heat to the main floor of the building andthereby render the premises once again suitable for occupation by Dr. MacLeod as a medical office. It is beyond dispute that theresponsibility for doing so rested with the landlord. By January 16, 2009, the date that Dr.

MacLeod wrote his termination letter, theboiler had not been replaced, nor has it been replaced to date. Dr. MacLeod’s lack of confidence that the landlord would deal with thecrisis in a timely way, to enable him to resume carrying on his practice at these premises, turned out to be well founded. The Law: [66] This action is actually a consolidation of two actions. One was started in Toronto, by the landlord, which sued the tenant forbreach of contract, claiming unpaid rent for the balance of the term, as well as for a share of utility expenses.

The other was started inWoodstock, by the tenant, claiming a declaration that the landlord was in fundamental breach of the lease, entitling the tenant toterminate the lease, as well as damages. The two actions were consolidated and tried together. The claim of the tenant essentiallyproceeded as if it were a counterclaim. [67] The landlord’s claim is fairly simple. Clearly, the tenant terminated the lease prior to the expiration date, entitling thelandlord to sue for the balance of the rent payable during the term, including utility expenses as provided for in the lease.

However, thesuccess of this claim will depend on whether the tenant succeeds in establishing that there was a fundamental breach of the lease,entitling him to terminate it. [68] The landlord placed heavy reliance on a decision of the Ontario Court of Appeal, Johnston v. Givens, (ONCA), [1941] O.R. 281, [1941] O.J. No. 362 (C.A.), to support the argument that breaching the covenant to repair and maintain theheating system gives the tenant the right to damages, but not the right to terminate the lease.

At para. 10, Robertson C.J.O. said thefollowing: The rule is of general application that in default of any express provision to that effect the landlord’s breaches of covenant do not entitlethe tenant to declare the lease at an end. The landlord’s covenant to heat the premises does not go to the whole consideration for thetenant’s promise to pay rent. The tenant had still vested in him the interest in the premises created by the lease, and it cannot be said tobe without any value for there are several months in each year in which the premise would be habitable notwithstanding the landlord’sfailure to supply heat.

The term and the obligation to pay rent continue notwithstanding the landlord’s breach of covenant. This is theprinciple established in Surplice v. Farnsworth (1844), 7 Man. & Gr. 576: see the references to that case in Johnstone v. Milling (1886),16 Q.B.D. 460, at p. 474, and Hart v. Rogers, [1916] 1 K.B. 646, at p. 651. [69] This decision must be read in context. The landlord had given a covenant in the lease to provide suitable heat betweenOctober and May. For the most part, he did so. As the court found, the heating equipment was good, there was good coal, and there wasan automatic stoker.

The problem was that there was a mechanism which prevented foreign objects from entering the automatic stoker,and the stoker ceased to operate if a foreign object entered. This left the furnace inoperable for hours at a time on perhaps fouroccasions. [70] While this sporadic loss of heat may have caused the tenant some inconvenience, it was far from a fundamental breach of thelease. Without doubt, an award of damages was the only available remedy.

To the extent that the landlord relies on this authority toargue that termination is not available to the tenant in situations of fundamental breach, the case is distinguishable on its facts, because itclearly does not deal with a case of fundamental breach. [71] Mr. Justice Binnie, in Tercon Contractors Ltd. v. British Columbia (Ministry of Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69, discussed the origins of the doctrine of fundamental breach at para. 106: This doctrine was largely the creation of Lord Denning in the 1950s (see, e.g., Karsales (Harrow) Ltd. v. Wallis, [1956] 1 W.L.R. 936

(C.A.)). It was said to be a rule of law that operated independently of the intention of the parties in circumstances where the defendanthad so egregiously breached the contract as to deny the plaintiff substantially the whole of its benefit.

In such a case, according to thedoctrine, the innocent party was excused from further performance but the defendant could still be held liable for the consequences of its“fundamental” breach even if the parties had excluded liability by clear and express language. [72] Although the Supreme Court in Tercon laid the doctrine of fundamental breach to rest as it pertains to exclusion clauses, itremains entrenched in the law of contract as an available remedy to the innocent party. [73] As to the argument that Johnston should be interpreted as denying the innocent party the right to terminate a lease by reasonof a fundamental breach of a covenant in the lease, that would be a strange result given that Johnston predated the birth of the doctrineitself by some 15 years. [74] Most importantly, though, Johnston represents an application of traditional property law to a lease, whereby breach of acovenant was treated differently than breach of a term in a contract.

The lease was primarily a conveyance of possessory title, and thecovenants were considered to be incidental. This line of jurisprudence, I have concluded, was expressly overruled by the Supreme Courtof Canada in Highway Properties Ltd. v. Kelly, Douglas & Co., (SCC), [1971] S.C.R. 562, 1971 CarswellBC 239. [75] In Highway Properties, the tenant had repudiated its lease of premises at a shopping centre. The landlord resumed possession,and sued for its loss to the date of repudiation but also for its prospective loss from the tenant’s failure to carry on a supermarket businessfor the term of the lease.

The trial judge, and the B.C. Court of Appeal, held that the taking of possession by the landlord amounted to asurrender, so that the lease ceased to exist. As a result, the landlord was only entitled for damages up to the date of surrender. Inarriving at this decision, the two lower courts expressly followed Goldhar v.

Universal Sections & Mouldings Ltd., (ONCA), [1963] 1 O.R. 189 (C.A.). [76] Laskin J., speaking for the court, said the following at the outset of his reasons (at para. 2): A common characterization of the problem in this appeal is whether it is to be resolved according to the law of property or according tothe law of contract; but, in my opinion, this is an over-simplification. [77] After a thorough analysis of the law relating to surrender in Canada and in other jurisdictions, Laskin J. concluded that thelandlord, in accordance with the doctrine of anticipatory breach, is entitled, upon repudiation by the other party, to sue for rent for thebalance of the term without waiting until the end of the term. [78] At para. 27, Laskin J. said this: There are some general considerations that support the view that I would take.

It is no longer sensible to pretend that a commerciallease, such as the one before this Court, is simply a conveyance and not also a contract. It is equally untenable to persist in denyingresort to the full armoury of remedies ordinarily available to redress repudiation of covenants, merely because the covenants may beassociated with an estate in land. [79] At para. 29, he concluded as follows: I would, accordingly, allow his appeal, with costs to the appellant throughout, and remit the case to the trial Judge for assessment ofdamages.

It follows that I would overrule the Goldhar case. [80] To understand the implications of overruling Goldhar, it is important to understand what Goldhar stands for. McGillivrayJ.A., speaking for the court in Goldhar, said the following at para. 8: It is thus the submission of the defendant that the learned trial Judge has dealt with the problem before him by applying to it the law ofcontract rather than that of property and that the latter governs the transaction in this case. Under the former damages as awarded couldbe given -- under the latter different considerations apply and the result would not be the same.

While the modern lease containsnumerous contractual provisions it operates primarily to convey a possessory title. As a consequence the effect given by the law topromises by way of covenants in a lease has always received different treatment from that given to similar promises in an ordinarybilateral contract. In the latter where the covenants may be considered to be mutually dependent a substantial breach by one party willexcuse the other party from further performance and permit recovery in damages for the breach. In leases, however, the covenants areassumed to be independent.

As an example, a failure to provide heat required by covenant gives the lessee no right to terminate the lease:Johnston v. Givens, (ON CA), [1941] 4 D.L.R. 634, [1941] O.R. 281. Under concepts of property law a lease isprimarily a conveyance to which the covenants are incidental. [81] In this passage, the court drew a distinction between leases, governed by the law of property, and contracts, governed by thelaw of contract.

While a substantial breach of a covenant in a contract could excuse further performance, breach of a covenant in a leasewas considered incidental to the conveyance, and afforded the aggrieved party no such remedy. The case referred to as an example ofthis approach is the very case relied upon by the landlord in the case at bar: Johnston v. Givens. [82] I conclude that, in overruling Goldhar, the Supreme Court of Canada has also impliedly overruled Johnston, given that it wasrelied upon in Goldhar, and is rooted in the same antiquated property law that has been held to be no longer applicable to the modernlease.

There is no compelling reason why Dr. MacLeod should be denied access to the “full armoury of remedies”, including thedoctrine of fundamental breach, that are available to a similarly aggrieved party in contract. [83] Accordingly, I decline to follow Krenzel v. Interprovincial Security Patrol (Red Deer) Ltd. (1982), 38 A.R. 153, 1982CarswellAlta 404 (Q.B.), to the extent to which it referred to and applied Johnston, as well as Framlance Properties Ltd. v. Dahan’sFashion Optical Ltd., 2000 CarswellOnt 1968 (S.C.J.), to the extent that it referred to and applied Krenzel on the same point.

Both ofthese cases were cited by Mr. Quance, on behalf of the landlord. I do note, however, that Lomas J., in Krenzel, arrived at the sameconclusion as I have with respect to the impact of Highway Properties. He said this, at para. 40:

The Highway Properties case confirms that the remedies ordinarily available to redress repudiation of covenants may be resorted to evenwhere these covenants are associated with an estate in land. On the facts of this case, however, I am satisfied that there has not been afundamental breach of contract by the plaintiffs which would justify Interprovincial repudiating the lease. [84] This view is also shared by Lane J. in Country Shop Donuts Ltd. v. Great West Life Assurance, 1996 CarswellOnt 3805 (Ont.Gen.

Div.), where he says this at para. 13: Another ground urged for rescission was that there had been a fundamental breach of the lease terms by the landlord. I think that this ismore correctly regarded as an allegation of termination for breach, rather than rescission. Since the decision of the Supreme Court ofCanada in Highway Properties Ltd. v. Kelly, Douglas & Co. (1971), (SCC), 17 D.L.R. (3d) 710, it has been acceptedthat a commercial lease is both a contact and a conveyance and the remedies of contract law are available to the parties.

Under contractlaw, faced with a breach of sufficient gravity to justify repudiation, i.e. unilateral termination, of the contract, the innocent party has theoption of doing so. [85] Mr. Quance also relies on Krenzel, Framlance and other authorities to support the proposition that the tenant, to be successful,must prove that there were acts of commission by the landlord calculated to destroy the tenant’s enjoyment of the premises. However, acareful reading of these authorities makes it clear that this rule relates to an alleged breach of the covenant to give quiet enjoyment.

Although the matter is not entirely free from doubt[1], I am prepared to accept for purposes of argument that in order to prove a breach ofthat particular covenant, the landlord must be shown to have engaged in acts of commission comparable to “constructive eviction”,whereby the tenant is effectively driven from the premises. [86] The tenant has pleaded in this case an alleged breach of the covenant to give quiet enjoyment, and I find on that statement ofthe law that he has failed to prove the requisite action on the part of the landlord.

However, the question remains whether the breach ofthe landlord’s duty to repair and maintain the heating system constitutes a fundamental breach, entitling the tenant to terminate the lease. It is not necessary for the tenant to prove both. [87] Many decisions fail to make this distinction. For example, in Broadway Melody Music Ltd. v. Ho (1991), 14 R.P.R. (2d) 190(B.C.S.C.), there was a covenant to repair in the lease.

However, the court suggested that, in order to unilaterally terminate the tenancy,the tenant had to prove that the breach of the covenant to repair intentionally deprived the tenant of the enjoyment of the leased premises,and thereby breached the covenant for quiet enjoyment. In my view, this type of analysis represents a carryover of the property lawconcepts that were laid to rest with Highway Properties. As discussed above, under the old way of thinking the lease was primarily aconveyance of possessory title, and covenants were ancillary only.

However, the covenant for quiet enjoyment was a necessary part ofthe grant of possessory title itself, and breach of that covenant would not be ancillary at all. Seen in that way, breach of a mere covenantto repair, which on its own would not entitle a tenant to terminate a lease, could entitle the tenant to terminate, provided that it amountedto a breach of the covenant for quiet enjoyment. [88] Under the law of contract, though, this should no longer be necessary.

If, on the facts of the case, a breach of the covenant torepair constitutes a fundamental breach, then the tenant is entitled to terminate the lease, irrespective of whether or not it also amounts toa breach of the covenant for quiet enjoyment. [89] Confusion can arise when the reported cases are read without this distinction in mind. For example, the Framlance decision,upon which the landlord heavily relied, involved a lease which contained no covenant obligating the landlord to repair.

The lease did,however, contain an exclusion clause relieving the landlord from liability for any damage caused by water from the roof. When thetenant experienced severe water leakage from the roof, and purported to terminate the tenancy because of it, he was forced to base hiscase upon an alleged fundamental breach of the covenant to give quiet enjoyment.

Unsurprisingly, he was not successful. [90] Framlance has no relevance, though, to the situation before this court, where there is a clear and express contractualobligation imposed on the landlord to repair the heating system, and there is no exclusion clause to protect her from the consequences offailing to do so. [91] Shun Cheong Holdings B.C. Ltd. v. Gold Ocean City Supermarket Ltd. et al, 2000 BCSC 574 , 2000 CarswellBC756, [2000] B.C.J. No. 713, 31 R.P.R. (3d) 179 (B.C.S.C.) is a case where a lease was terminated by reason of a fundamental breach. The tenant, Gold Ocean, operated a supermarket.

Leaks of noxious water periodically entered the tenant’s premises from April to July1997, leading the tenant to terminate the lease the following month. There was no formal lease in place, but only a letter that set out theessential terms of an agreement to lease. Koenigsberg J. had to determine whether the leakage, and the failure of the landlord to repair it,constituted a fundamental breach of an implied term of quiet enjoyment, thereby excusing the tenant from further performance.

In thisregard, the tenant arguably faced a more difficult test than the tenant in the case at bar, because there was no express covenant to repair,and the tenant had to rely on the breach of an implied covenant for quiet enjoyment to make out its case. [92] Koenigsberg J. referred to Syncrude Canada Ltd. v. Hunter Engineering Co. (1989), (SCC), 57 D.L.R. (4th)321 (S.C.C.) for a definition of fundamental breach. She first quoted from the decision of Dixon C.J. who, in that decision, rejected thedoctrine as it relates to the enforceability of exclusion clauses.

The reasons of Dixon C.J. must be read with caution for that reason,because he was not rejecting the doctrine in general. Indeed, he specifically qualified the scope of his reasons at p. 343 in the followingwords: I wish to be clear that my comments are restricted to the use of fundamental breach in the context of enforcing contractual exclusionclauses. [93] As a matter of interest, the views of Dixon C.J., which rejected the doctrine of fundamental breach as it applies to exclusionclauses, have now been accepted by the Supreme Court of Canada in Tercon, referred to above.

However, the doctrine otherwiseremains alive and well. [94] Koenigsberg J. then quoted, at para. 62 of Shun Cheong, the often referred to definition of fundamental breach found in the

reasons of Wilson J. in Syncrude: The formulation that I prefer is that given by Lord Diplock in Photo Production Ltd. v. Securicor Transport Ltd., [1980] A.C. 827(H.L.). A fundamental breach occurs “Where the event resulting from the failure by one party to perform a primary obligation has theeffect of depriving the other party of substantially the whole benefit which it was the intention of the parties that he should obtain fromthe contract” (p. 849). (Emphasis added.) This is a restrictive definition and rightly so, I believe.

As Lord Diplock points out, the usualremedy for breach of a “primary” contractual obligation (the thing bargained for) is a concomitant “secondary” obligation to paydamages. The other primary obligations of both parties yet unperformed remain in place. Fundamental breach represents an exceptionto this rule for it gives to the innocent party an additional remedy, an election to “put an end to all primary obligations for both partiesremaining unperformed” (p. 849).

It seems to me that this exceptional remedy should be available only in circumstances where thefoundation of the contract has been undermined, where the very thing bargained for has not been provided. [95] Koenigsberg J. referred to Wesbild Enterprises Ltd. v. Pacific Stationers Ltd. (1990), (BC CA), 52 B.C.L.R.(2d) 317 (C.A.), which held that the particular circumstances of the particular tenant as they must have been known to the landlord at thetime of the breach is important in determining whether the breach was fundamental.

At p. 324 of Wesbild, Lambert J.A., speaking forthe majority, said this: I would add only this, that I think that it is possible that one landlord can make identical leases with two tenants and then breach the leaseagreement with the two tenants in the identical clause and that could be a fundamental breach in relation to one tenant and not afundamental breach in relation to the other.

It is the particular business that has to be looked at to decide whether the breach is afundamental one in relation to that tenancy and not just the clause that was breached. [96] In applying those principles to the facts before her, Koenigsberg J. arrived at the following conclusion, at para. 78 of ShunCheong: In my view, the failure of the landlord, despite band-aid attempts to deal with the cosmetic issue created, that is, replacing on at least twooccasions, several ceiling tiles which were sodden and discoloured – the leaks persisted.

Thus, considering the particular business, thatis one which had to meet health and safety standards, and attract customers in order to remain in business and become profitable. Thebreach can reasonably be described as having the effect of preventing Gold Ocean from operating its business. The very purpose of thetenancy was undermined in a fundamental way. Thus, in my view, Gold Ocean was justified in terminating the lease and is only liablefor the August 1996 rent which it failed to pay.

However, the security deposit being left with the landlord must be subtracted from therent owing in the circumstances. [97] An appeal from that decision was dismissed by the B.C. Court of Appeal: 2002 BCCA 451 , 4 B.C.L.R. (4th) 234,2002 CarswellBC 1892 (C.A.). Analysis: [98] The benefit of the lease which Dr. MacLeod contracted to receive was the ability to operate a medical office at thesepremises.

That required premises that were readily accessible by his patients, that had running water, and that were capable of beingheated to a comfortable temperature, so that his patients could disrobe (as they routinely did) and be examined by him in comfort. [99] The landlord breached the express term that required her to repair the heating system by virtually ignoring the report of anongoing catastrophe made to her by Kim Tipping on December 31, 2008 and by taking no action to replace the boiler and restore aproper level of heat to the first and third floor.

This had the effect of rendering the second floor impossible to heat to the comfortablelevel necessary for the operation of a medical office. [100] This breach was fundamental in nature because it deprived Dr. MacLeod of substantially the whole benefit of the lease. Thepremises could no longer be used by him as a medical office, and would continue to be unusable until the boiler was replaced (whichnever did happen) or until late spring, when the outside temperature would have warmed up to a sufficient point where the lack of afunctioning boiler no longer mattered.

The very purpose of the lease was undermined in a fundamental way. [101] The fundamental nature of the breach can be illustrated by asking the question, what else could Dr. MacLeod have done? Could he have soldiered on and simply sued for damages for the inconvenience? The clear answer is no. He had ill and fragile patientsto care for, thirty or more of them on each day he ran an office. He had to have a proper facility in which to care for them.

Given theinfrastructure involved in a medical office, with diagnostic equipment, sterilizing equipment, examination beds and so on, it was notopen to him to temporarily see his patients somewhere else. He had to find another medical office to move into as quickly as possible,and he did so. He did not want to move, but I am satisfied that he had no other choice. [102] Mr. Quance characterized the question to be answered in the following terms: did the tenant give the landlord a fair opportunityto repair or replace the boiler? The problem originated on or before December 31, 2008. Dr.

MacLeod did not terminate the lease untilJanuary 16, 2009. By that point in time, the landlord had taken no steps whatsoever to deal with the problem and restore a proper levelof heat. The nature of the crisis, and the time of year, demanded immediate action, and yet she took no action at all. [103] The fact that Dr. MacLeod made the decision to move out, and physically vacated the premises, prior to January 16, 2009 is, inmy view, immaterial. He did not terminate the tenancy until January 16, 2009, and his rent was paid up until the end of that month.

Heperhaps took a chance by committing himself to moving out when he did, because had a plumbing and heating contractor shown up andreplaced the boiler promptly, the result of this case might have been different. As it turns out, though, he correctly predicted from pastbehaviour that the landlord would not replace the boiler promptly, and in fact she never replaced the boiler at all. At the time heterminated the lease the landlord had been given a fair opportunity to rectify the situation, and had failed to do so.

On that date thelandlord was, I find, in fundamental breach of the lease, and the tenant was entitled to terminate it. [104] It follows that the landlord’s claim against the tenant is dismissed. Had it been necessary to assess the landlord’s damages, theywould have totalled $22,716, broken down as follows: rent of $1,890 per month (including GST) for 11 months, after credit for one

month of prepaid rent, plus one-third of utilities for that period in the net amount of $1,926. [ 105 ] As to the tenant’s claim against the landlord, a declaration will issue that the landlord fundamentally breached the lease, such that the tenant was entitled to terminate the lease as he did by letter dated January 16, 2009. [ 106 ] If I am in error that the tenant was entitled to terminate the lease, and if the tenant should have been restricted to a claim for damages only, I would have concluded that the tenant was entitled to the cost of relocating his practice until May, when it would have warmed up sufficiently to enable him to resume carrying on his practice at these premises.

That would have included the cost of moving out and the cost of moving back in, as well as the cost of rent at Dr. Tam’s former office throughout this period. I was not provided with evidence as to what that rent was, so I am unable to do this provisional calculation. [ 107 ] There remains the question of the tenant’s other damages, up to the termination date, which have been proven. Mr. Quance took no issue with them. They included moving costs of $2,351.78 as well as lost billings on January 6, 8 and 13, 2009 totalling $776.15. If my mathematics are in error, counsel may advise me.

Otherwise, there shall be judgment for the tenant in the amount of $3,127.93. [ 108 ] Ms. Kasi, for the tenant, also requested an abatement of rent of 30% for the period March, 2007 to January, 2009, by reason of the landlord’s ongoing breaches of her duties under the lease. This claim does not merit serious consideration, and was not pleaded in any event. [ 109 ] On the issue of pleading, Mr. Quance submitted that the tenant’s pleadings were inadequate, in that he failed to specifically plead that the second floor could not be adequately heated by reason of being sandwiched between two cold floors.

I do not agree. In para. 7 of his Statement of Claim, the tenant pleads a number of the provisions in the lease, including the obligation to provide heat, and responsibility for heating repairs. In para. 8 it is pleaded that these were fundamental terms of the lease. The failure to maintain heat on the first and third floors was pleaded in para. 11. In para. 15 he pleaded that the landlord had fundamentally breached the lease, and in para. 16 he pleaded that because of those breaches, he could no longer conduct his medical practice from the premises.

In my view, the case that the tenant was relying on, and which the landlord had to meet, was adequately pleaded. No objection to the manner in which the case was pleaded was raised until closing submissions, and no adjournment was sought at any time. [ 110 ] If the parties cannot agree on costs, I will accept written submissions from counsel for the tenant within 20 days, and from counsel for the landlord within 15 days thereafter, with any reply within 10 days thereafter. “T. A. Heeney J.” Mr. Justice T. Heeney Released: December 14, 2010 CITATION : 1723718 Ontario Corp. v.

MacLeod, 2010 ONSC 6665 COURT FILE NO.: 222/09

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: 1723718 ONTARIO CORP. Plaintiff – and – MALCOLM K. MacLEOD Defendant REASONS FOR JUDGMENT Heeney J. Released: December 14, 2010