Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether unauthorized renovations by the tenant constituted a fundamental breach or breach of a true condition under a commercial lease.

• The lease contained an implied term requiring lawful renovations with permits, which was violated.

• The court examined whether the landlord could terminate the lease based on that breach.

• The renovations were extensive, unpermitted, and performed by volunteers without professional oversight.

• The chambers judge found the breach serious but not sufficient to justify lease termination.

• The Court of Appeal upheld the lower court's findings and dismissed the landlord’s appeal.

Facts and outcome of the case

The case involved a commercial lease dispute between the Pakistan-Canada Association Inc. No. S0007016 (PCA), the landlord, and Great Light Healing Ministries Int’l: City of Faith (Great Light), the tenant. PCA owns property in Surrey, British Columbia, which it leased to Great Light for use as a church. The initial five-year lease, signed in 2013, was extended to ten years and included a provision requiring landlord approval for any renovations.

In 2020, Great Light began major renovations to the building without obtaining proper municipal permits or professional oversight. The work was performed by volunteers from the church. These renovations significantly altered the building's structure, doubled its footprint, and encroached on neighboring land and municipal infrastructure. Although a memorandum of understanding between the parties discussed property improvements and future sale terms, the court declined to treat it as permission under the lease for the renovations.

PCA filed an application under the Commercial Tenancy Act on November 23, 2023, seeking to terminate the lease and gain possession of the property, arguing that Great Light's conduct constituted either a fundamental breach or a repudiation of a true condition of the lease. The chambers judge found that the lease included an implied term requiring lawful renovations, which had been breached. However, the breach was not considered fundamental, nor did it breach a true condition of the lease. Therefore, PCA was not entitled to terminate the lease.

On appeal, the British Columbia Court of Appeal reviewed the findings and upheld the lower court's decision. The court agreed that although the tenant’s actions were serious, they did not deprive the landlord of substantially the whole benefit of the lease. Nor did the parties intend that any breach of the implied term would entitle the landlord to terminate the lease. The appeal was dismissed on June 10, 2025. Costs or damages were not explicitly addressed in the decision, but based on standard practice, costs likely follow the event in favor of the respondent, Great Light.