Executive Summary: Key Legal and Evidentiary Issues

• Relief from forfeiture was sought due to the applicant’s failure to provide timely written notice to renew a commercial lease.

• The court considered whether the applicant’s illness and reliance on past reminders justified equitable relief.

• Evidence included the applicant’s substantial investments in the premises and communications with the property manager.

• The respondent argued strict compliance with lease terms and potential prejudice to a third party (Aladdin Bakery).

• The court analyzed whether the applicant acted with due diligence and in good faith despite technical non-compliance.

• Ultimately, the court weighed the equities and the impact of the applicant’s inadvertence and illness on the renewal process.

Facts of the case

The applicant, 8750297 Canada Inc., operated a pizza restaurant at 1020 St. Laurent Blvd., Unit 6, Ottawa, under a commercial lease with Ambassador Realty Inc. The business, owned by Mr. Ahmed Yahia, had been a tenant for 12 years, investing approximately $100,000 in renovations and employing 8 to 12 staff. The lease, which had been renewed multiple times, included an option for a further five-year renewal if eight months’ written notice was provided before expiry. The applicant failed to deliver this written notice by the December 31, 2024 deadline, largely due to Mr. Yahia’s illness and his belief that a reminder would be provided as in past renewals.

Background and events leading to the dispute

After the applicant missed the notice deadline, the respondent informed them in February 2025 that the lease would end on August 31, 2025, and that the premises had been leased to a neighboring business, Aladdin Bakery. The applicant immediately expressed a desire to renew, citing illness and a lack of clarity about the notice requirement. Despite this, the respondent maintained that the lease had ended and finalized a new lease with Aladdin Bakery in March 2025. The applicant sought an interlocutory injunction to prevent eviction and commenced an application for relief from forfeiture under the Commercial Tenancies Act and the Courts of Justice Act.

Policy terms and clauses at issue

The central clause at issue was the lease’s renewal option, which required the tenant to provide written notice eight months prior to expiry. The applicant argued that past practice—where reminders were sent—created a reasonable expectation of notification. The respondent countered that no such obligation existed and that strict compliance was required. The court reviewed relevant case law, emphasizing that equitable relief from forfeiture is only available where the tenant has acted diligently and the breach was inadvertent rather than willful.

Legal analysis and court’s reasoning

Justice Doyle found that the applicant had acted in good faith, had invested significantly in the business, and had communicated an intention to renew to the property manager. The applicant’s failure to provide timely written notice was attributed to illness and a reasonable, albeit mistaken, expectation of a reminder. The court distinguished this case from others where relief was denied due to repeated defaults or lack of diligence. Here, the applicant was not a sophisticated commercial tenant and had not previously navigated such lease renewals independently.

The court also considered potential prejudice to the third party, Aladdin Bakery, but found that Aladdin was aware of the ongoing dispute and would not suffer undue harm. The equities favored the applicant, particularly given the risk of financial ruin and the absence of bad faith or deliberate non-compliance.

Outcome and ruling

The court exercised its equitable powers to grant relief from forfeiture, declaring that the lease between the applicant and respondent remains valid until August 31, 2030, effectively restoring the applicant’s right to renew for another five-year term. The court found the applicant’s conduct reasonable and the breach technical rather than substantive. The decision did not specify a monetary award, as the primary relief was the reinstatement of the lease. Costs were left to be resolved by further submissions if necessary. The successful party was the applicant, 8750297 Canada Inc., which was granted the right to continue its business at the premises for the renewed term, subject to the lease’s conditions. If the parties cannot agree on costs, they may submit their positions for determination, but no specific amount was ordered in the decision.