Executive Summary: Key Legal and Evidentiary Issues

• Assessment of whether the landlord failed to perform lease obligations regarding roof repair and water installation.

• Determination of whether the plaintiffs were entitled to revocation of a prior default judgment due to medical absence.

• Evaluation of damages directly resulting from the landlord’s contractual breach under the Civil Code of Québec.

• Consideration of whether the property manager and its officer could be held personally liable as mandataries.

• Calculation of a fair rent adjustment due to unfulfilled lease commitments.

• Rejection of exaggerated claims due to insufficient evidence of further financial loss or licensing delays.

Facts of the case

This case concerns a commercial lease between Bio-Act Laboratories Inc. and Clarovita Wellness Inc. (plaintiffs), and their landlord, Cansett Properties Inc. The lease covered premises intended for office, manufacturing, and food R&D use. Epic Québec Inc. acted as Cansett’s property manager, and its VP Stanley Hason was the main contact for the plaintiffs. An addendum to the lease included specific promises: Cansett would repair a roof leak and install a water line in the lab area known as the Pilot plant. The plaintiffs later sued for $47,800 in damages (reduced to $15,000 for small claims jurisdiction), alleging breach of these promises, while the defendants counterclaimed for unpaid rent.

On May 2, 2024, the Court had initially ruled by default against the plaintiffs after their representative, Dr. Tahereh Hosseini Nia, was unable to attend due to medical reasons. Plaintiffs later filed a request to revoke that judgment. The Court accepted the request and reopened the case.

Outcome of the decision

The Court first ruled in favor of the plaintiffs’ motion to revoke the default judgment, finding that the absence due to medical reasons was valid and excusable. The Court then turned to the merits of the lease dispute.

It found that Cansett had breached its contractual obligations by failing to adequately repair the roof and never installing the promised water line in the Pilot plant. The judge rejected Cansett’s argument that the plaintiffs did not need the water, emphasizing that the Addendum clearly imposed the obligation and that Cansett had no excuse for delaying the work or tying it to unrelated rent increases.

For the damages, the Court awarded:

• $800 for loss of protein powder damaged by the unresolved roof leak.

• $5,606.60 for rent compensation based on the unrealized water installation benefit.

Claims for an additional $15,000 for lab renovations and $20,000 for a delayed Health Canada certification were dismissed due to lack of reliable evidence.

Cansett’s counterclaim for January 2023 rent was partially granted for $2,284.01, since plaintiffs remained in possession of the premises. However, the Court denied the rent claim for February 2023, citing a lack of notice, logistical delays, and implied consent to a short extension.

The Court held that neither Epic Québec Inc. nor Stanley Hason were personally liable because they acted solely as agents of the landlord, protected under article 2157 C.c.Q.

Judgment was granted in favor of the plaintiffs for a net amount of $4,122.59, after judicial compensation. No court costs were awarded, and each party bore its own legal expenses.