Executive Summary: Key Legal and Evidentiary Issues

• Tenant sought relief from forfeiture after commercial lease termination for nonpayment of rent.

• Landlord's alleged waiver of right to terminate was disputed and found invalid under lease terms.

• The lease permitted termination for rent arrears without notice after 15 consecutive days of nonpayment.

• Tenant's significant delay in seeking relief barred equitable remedy under the doctrine of laches.

• No legal basis established to extend the lease term beyond its original five-year expiration.

• Tenant's request for an accounting and other reliefs were denied as unsupported or moot.

Facts and outcome of the case

Background of the case

2753012 Ontario Inc., the tenant, leased a commercial property from Pylos Holdings Ltd. beginning February 1, 2020, for five years, intending to open a restaurant. Although rent was due monthly, the tenant consistently fell into arrears and never actually opened the business. Despite receiving free rent initially and numerous communications with the landlord, the tenant failed to stay current, missing rent payments across twelve months and bouncing several cheques. In January 2024, the landlord lawfully terminated the lease, changing the locks and posting a notice of termination.

Arguments presented

The tenant claimed that the landlord had waived its right to terminate by accepting a partial rent payment in November 2023. It also argued that the lease required a formal notice of default before termination and that the landlord breached the lease by failing to provide such notice. The tenant sought relief from forfeiture to regain possession of the premises and requested further orders, including an extension of the lease term to ten years, an accounting of payments, and court oversight of future terminations.

Court’s analysis and findings

The court found that the lease’s terms were clear: no notice of default was required for rent arrears exceeding 15 days. Additionally, any waiver of the landlord’s rights needed to be in writing and signed, which had not occurred. The acceptance of a partial rent payment did not amount to an unequivocal waiver. The court determined that the tenant failed to establish entitlement to relief from forfeiture, citing the tenant's lengthy delay in filing the application, the landlord’s re-leasing of the property to a new tenant, and the imminent expiry of the original lease term. The tenant’s other claims were also rejected. There was no written amendment to extend the lease beyond five years, no necessity for a landlord-provided accounting, and no basis for judicial intervention in future termination steps.

Final outcome

The court dismissed the tenant’s application in its entirety. It upheld the landlord’s right to terminate the lease and refused to grant any relief sought by the tenant. The landlord, being fully successful, was entitled to seek costs against the tenant, subject to further submissions.