Executive Summary: Key Legal and Evidentiary Issues

• The central dispute concerns whether Arctic Colour Tours had a tenancy agreement or a joint venture agreement with Wayne Grove, impacting available remedies.

• Promissory estoppel was argued by the tenant based on the landlord's statement that the lease would be renewed if it proved to be a "good tenant."

• Arctic Colour Tours contended that Mr. Grove breached the duty of honest contractual performance by not renewing the agreement despite the conditional promise.

• A request for a stay of proceedings was sought to allow the tenant time to file a separate claim and seek an interim injunction.

• Whether the tenant was "wilfully overholding" under s. 42 of the Commercial Landlord and Tenant Act was raised but not decided by the Court.

• The application was brought under s. 45 of the Commercial Landlord and Tenant Act, RSY 2002, c 131, for a writ of possession against an overholding tenant.

Background and business relationship

Wayne Grove owned land in the Yukon which Arctic Colour Tours Inc. used as a base for its aurora borealis tourism business. The company had built accommodations on the property where visitors could stay and view the northern lights. Due to the nature of the tourism business, Arctic Colour Tours typically booked tours six months to a year in advance. The parties maintained a business relationship for about nine years, though it was marked by difficulty—Mr. Grove had terminated the parties' agreement three times, twice through court orders.

The final lease agreement

Despite their contentious history, the parties entered into a new agreement on November 1, 2024, with a termination date of April 30, 2025. This was in contrast to the parties' previous contracts, which were for yearly terms. At the time the agreement was renewed, Mr. Grove told the person associated with Arctic Colour Tours that if the company was a good tenant, he would renew the agreement again.

Events leading to termination

During the renewed agreement, one of the buildings Arctic Colour Tours used was flooded because of plugged plumbing. Some time after that, but before March 28, 2025, Mr. Grove sent Arctic Colour Tours an email stating that he was not renewing the agreement in part because of the flood. On April 23, 2025, Mr. Grove gave Arctic Colour Tours a formal demand for possession of the land and premises. Arctic Colour Tours did not vacate the premises.

The nature of the agreement

The Court concluded the agreement was a tenancy agreement, not a joint venture agreement. The document was titled "Lease" and contained standard lease provisions—the landlord agreed that he demises and leases the land in exchange for rent, and the agreement set out who is to pay property taxes, utilities, and terms for use of the premises. While Mr. Grove had provided assistance to Arctic Colour Tours in 2016 and 2017 when the company was having difficulty building the accommodations, by the time the parties signed the lease agreement in 2024, the agreement explicitly stated that nothing in the lease will create a relationship between the landlord and tenant except that of landlord and tenant.

The promissory estoppel argument

Arctic Colour Tours argued that Mr. Grove's promise to renew the lease agreement if it was a good tenant should prevent him from refusing to renew. The company claimed it relied on this promise by continuing to book tours past the date of the termination of the agreement. The Court rejected this argument for several reasons. First, the statement was vague—there was no clarity about what the agreement would be if it were renewed, no discussion about the terms, whether they would be the same or different, nor the length of the term. Second, there was no clarity about what a "good tenant" was. Third, Arctic Colour Tours provided no context in which the statement was made, and there was no basis to conclude Mr. Grove intended to affect the legal relationship of the parties. Finally, given the parties' checkered history, given that Mr. Grove renewed only for a short term, and given his commitment was conditional, it was unreasonable for Arctic Colour Tours to rely on the statement.

The duty of honest performance claim

Arctic Colour Tours argued that Mr. Grove breached the duty to perform the contract honestly by promising to renew the agreement if Arctic Colour Tours was a good tenant, but then not following through. As a remedy, the company asked the Court to stay the proceedings to permit it time to commence a statement of claim against Mr. Grove and seek a temporary injunction against him. The Court determined it should not stay the proceedings, reasoning that the legislature has chosen to favour certainty and the interests of the landlord through the expedited process in the Commercial Landlord and Tenant Act. The Court noted that even if Mr. Grove is granted the writ of possession, Arctic Colour Tours can bring an action against him and can seek compensation not only for the loss of its business but the losses it incurred in putting money into the tourist accommodations. Furthermore, the remedy for breach of the duty to perform a contract honestly is usually damages, and the Court had difficulty seeing how Arctic Colour Tours would receive a remedy that would require Mr. Grove to enter into a new agreement with it.

The wilful overholding question

Arctic Colour Tours sought a finding that it was not wilfully overholding. Under s. 42 of the Act, a wilfully overholding tenant is liable to pay double rent during the time it overholds. Mr. Grove submitted that he was not seeking any relief with regard to payment after the termination of the agreement, and so the Court should not decide this issue. The Court stated it was not prepared on this application to make a determination about the scope of its authority, specifically about its authority to permit Arctic Colour Tours to continue to stay on the premises without paying double rent, or whether in this case Arctic Colour Tours is wilfully overholding.

Ruling and outcome

The Court granted Mr. Grove's application and issued a writ of possession in favour of Wayne Grove in relation to Lot 1592, Quad 105 D/14, Yukon Territory, Plan No. 2018-0082. The parties agreed to settle costs at tariff costs between counsel. No specific monetary amount was awarded in this decision, as it solely addressed the right to possession of the property. Arctic Colour Tours retains the ability to bring an action against Mr. Grove and seek compensation for losses.