Executive Summary: Key Legal and Evidentiary Issues

• Tenant failed to exercise its lease renewal option in writing by the August 31, 2025 deadline as required under the 2005 Lease and the 2021/2022 Extension Agreement

• Communications from the tenant between July and November 2025 were ambiguous and did not constitute an unequivocal exercise of the renewal option

• Arguments of waiver, estoppel, and acquiescence were rejected given the lease's non-waiver, time of the essence, and entire agreement clauses

• Tenant's post-dated cheque did not qualify as "advance payment" required under the landlord's overholding offer, and acceptance terms were never fulfilled

• Irreparable harm was not established, as loss of goodwill, sales, and lease rights were deemed quantifiable and compensable in damages

• Balance of convenience favoured the landlord, with the tenant's delay in both exercising the renewal and filing the injunction application weighing heavily against it

Background of the landlord-tenant relationship

UBCGG Leasing Ltd. has operated a Gold's Gym on the University of British Columbia campus since November 2005, with Cressey Development Corporation serving as the landlord. The UBC location was the first Gold's Gym in British Columbia, described in the tenant's notice of application as its flagship location in the province, and had approximately 2,000 members at the time of the dispute. The original lease was entered into on November 10, 2005, and included renewal options allowing the tenant to extend for three further periods of five years each, provided written notice was given at least six months before the expiry of the current term.

Key lease provisions at issue

The 2005 Lease contained several critical clauses that remained in force throughout the tenancy. A non-waiver clause (Section 12.8) stipulated that no waiver of the tenant's obligations would occur through the landlord's condoning or delay, except by express written waiver. A time of the essence clause (Section 15.7) underscored the strict nature of all deadlines. An entire agreement clause (Section 15.9) confirmed that the lease could not be modified except by subsequent written agreement signed by both parties. The overholding tenant provision (Article 14.1) specified that remaining in possession after the term's expiry would create only a month-to-month tenancy at a minimum monthly rent equal to twice the monthly instalment of minimum rent for the last month of the term, with no tacit renewal. Schedule E required the renewal option to be exercised by written notice to the landlord at least six months before expiry.

The 2021/2022 extension and prior renewals

The tenant had previously exercised renewal options, including a 2016 renewal for which written notice was sent via email on June 10, 2014, more than six months before the expiry of the initial 10-year term, expressly exercising the option to renew for another five years. The most recent extension had a more complicated history attributed by the landlord to leniency during the COVID-19 disruption of the university campus. The tenant missed the August 31, 2020 notice deadline, requested a shorter term, and was granted a lease extension for three years in February 2021. This renewal apparently did not lead to an executed agreement at that time. In February 2022, negotiations started for the 2022 renewal. It was not until April 21, 2022 that the parties entered into a Lease Extension and Modification Agreement, effective March 1, 2021, for a further five-year term. Critically, the 2021/2022 Agreement expressly confirmed the continued application of the original 2005 Lease terms, including all of the clauses discussed above.

The tenant's failure to exercise the renewal option

Under the governing agreements, the tenant was required to provide written notice to exercise its renewal option by August 31, 2025. No clear, unambiguous written notice was provided by that date. The tenant pointed to a July 7, 2025 email discussing a flood on the premises and the competitive impact of the new UBC Recreation Centre, which concluded with a reference to the lease ending on February 28, 2026 and a hope that the landlord would consider the obstacles being faced. The Court found this communication was far from a clear and unequivocal statement that the tenant would exercise its option to renew, standing in stark contrast to the clear 2014 renewal notice. The tenant's principal also indicated he would be in touch in August to discuss the lease renewal but did not do so until November, however.

The November 2025 email and continued ambiguity

On November 6, 2025, well after the August 31 deadline, the tenant's principal wrote to the landlord acknowledging the lease would end on February 28, 2026, describing significant business losses due to the opening of the UBC Recreation Centre — including over 650 membership cancellations and a drop from 374 memberships sold in September 2023 to 134 in September 2025 — and asked whether any concessions could be made and what the rental rate would be to renew the lease. The Court found the tenor of this communication was far from an unambiguous statement in writing that the tenant would exercise its option to renew, instead indicating a desire for further negotiations with an expectation of concessions.

Subsequent negotiations and last-minute correspondence

The months following were marked by what the Court described, using counsel Mr. Sabur's term, as a "game of chicken" between two sophisticated commercial entities. On November 7, 2025, the landlord advised the tenant it was considering its options and had other groups interested in the premises. On December 4, 2025, the tenant expressly raised the possibility of leaving the premises. On December 31, 2025, the tenant proposed to renew for two years at the same base rental rate with an additional three five-year options, rent to be negotiated — all terms not contemplated in the original 2005 Lease or extension agreements. On January 9, 2026, the landlord responded again that it had other parties interested in the space. On January 12, 2026, the tenant sent a letter purporting to confirm "the intention we have previously expressed to exercise our option to extend our lease." On January 16, 2026, the landlord advised that the window for exercising the renewal option expired on August 31, 2025, that it was exploring its options, and invited the tenant to make an offer to lease.

The February 2026 offers

On February 2, 2026, the landlord advised the tenant that a decision was made to proceed with the termination of the lease due to the expiry of the term. The parties entered into further discussions and on February 3, 2026, the landlord presented the tenant with two options. Option A offered a ten-year extension with detailed rent provisions, a deposit increase from $42,731.16 to $94,817.79, a further five-year renewal option, and no tenant inducements. Option B offered a one-month overholding period until March 31, 2026, with pre-payment of $47,557.98 on account of rent for March 2026. Both options required payment by certified cheque or bank draft, and the tenant was required to respond by 4:00 p.m. on February 5, 2026, failing which the proposal would be deemed withdrawn. The landlord also expressly stated that only a fully executed definitive agreement would be binding.

The overholding offer dispute

In a February 24, 2026 letter, the landlord reiterated its offer to permit the tenant to overhold until March 31, 2026, subject to advance payment of $47,557.98 by 2:00 p.m. on February 25, 2026. The tenant delivered a cheque on or before February 25 but it was post-dated to March 1, which the Court found did not constitute advance payment as the landlord could not receive those funds until March 1, several days after the February 25 deadline. Furthermore, the February 24 letter incorporated the February 3 letter's terms by the phrase "in accordance with the Landlord's letter dated February 3, 2026," which required payment by certified cheque or bank draft — a requirement the tenant's ordinary post-dated cheque did not satisfy. The landlord's February 25 letter imposed additional conditions for accepting the post-dated cheque: the tenant had to acknowledge the lease expiry on February 28, 2026, agree to the Article 14 overholding terms with no tacit renewal, and agree to surrender and deliver vacant possession by March 31, 2026. None of those terms were accepted by the tenant. The landlord's February 26 letter further confirmed that the tenant had not accepted the overholding offer and that the post-dated cheque did not qualify as advance payment.

The injunction application and the Court's analysis

On February 26, 2026, two days before the lease's expiry, the tenant filed a petition and notice of application for an injunction, initially providing a time estimate of 20 minutes, later modified to an hour and a half, which the Court found was itself wholly inadequate. Applying the injunction tests from British Columbia (Attorney General) v. Wale and RJR-MacDonald Inc. v. Canada (Attorney General), Justice Crerar found the tenant failed at each stage. On the threshold question of a serious issue to be tried, the Court held the clear contractual language, reinforced by the non-waiver, entire agreement, and time of the essence clauses, had not been displaced through any operation of implied contract, waiver, estoppel, or otherwise. On irreparable harm, the Court determined that loss of goodwill was quantifiable and compensable in damages, particularly since the goodwill associated with the Gold's Gym name transcended the individual location through the existence of multiple Gold's Gyms operating for many years in the Lower Mainland area. On the balance of convenience, the Court found the tenant's delay weighed heavily against it, that the landlord had not altered the status quo, and that concerns about the tenant being a shell company with no material assets raised questions about its ability to fulfill its undertaking to the Court to pay damages.

Ruling and outcome

The Court dismissed the tenant's injunction application in favour of the respondent landlord, Cressey Development Corporation. While special costs were denied — the Court finding the application was not pure folly or spite and not such a clear abuse as to warrant special costs — the Court awarded costs to the landlord on the highest regular scale: Scale C, recognizing the considerable resources, time, and energy counsel for the landlord had to expend in a finite amount of time to respond to the application. The Court expressly confirmed that nothing in these reasons should bind a future judge who may consider this matter later upon a full consideration of all of the dealings and communications of the parties over the past 20 years. No specific monetary amount in damages was awarded or determined at this stage, as the decision was limited to the denial of the injunction.