Executive Summary: Key Legal and Evidentiary Issues

• Gaufres à GoGo inc. alleged that Fonds de placement immobilier Cominar induced it to sign a commercial lease through misrepresentations about foot traffic, the presence of homeless individuals, and the planned closure of the food court.
• Central to the dispute was whether the landlord's pre-contractual statements constituted fraud (dol) or a vitiating error sufficient to nullify the lease under Articles 1400 and 1401 C.c.Q.
• Failure to disclose the periodic presence of homeless persons near the leased premises was found insufficient to constitute fraud, as the issue was observable in a public space and the tenant never raised it as a condition of the lease.
• Representations about the planned closure of the food court for renovations were made in good faith based on information available at the time, and no guarantee as to timing was incorporated into the lease.
• The lease expressly required continuous operation of the business; the tenant's unilateral abandonment of the premises in February 2024 triggered daily penalties and unpaid rent obligations under the contract.
• Cominar's counterclaim for unpaid rent and penalties was upheld, as the tenant failed to demonstrate any substantial breach by the landlord that would justify non-performance or abandonment.

Facts of the case

Gaufres à GoGo inc. is a corporation operating in the sale of bakery products, pastries, waffles, and other food items. It was incorporated in 2022 by Josias Bosmans, his partner, and Patrick Milongo — none of whom had prior experience operating a food counter in a shopping centre. In 2023, the group identified two potential leasing sites: Place Alexis-Nihon in Montreal and the Montreal airport. Stéphanie Larocque, the leasing director for Cominar, accompanied Bosmans on two site visits to the metro level of Place Alexis-Nihon in June and July 2023, both conducted in the early afternoon. During these visits, Larocque stated that the shopping centre received approximately 15 million visitors per year and that the metro entrance was busy, noting the presence of nearby Dawson College and office workers. She also mentioned that the landlord planned to close the food court area of the centre for renovations in 2024. Milongo withdrew from the business in June 2023 and had no direct involvement in the events that followed. The commercial lease for unit SK-03 was signed in September 2023 for a term of approximately nine months, with the business intended to open on November 4, 2023. Bosmans had the lease reviewed by a lawyer before signing, and several modifications were requested. The official opening was delayed to November 25, 2023, due to late delivery of carpentry and signage materials. By late 2023, the entrepreneurs were disappointed: foot traffic fell short of expectations and the presence of homeless individuals near the premises was a concern. Cominar responded by removing furniture from the area and increasing security patrols. In January 2024, Bosmans and Milongo met with Larocque and secretly recorded the conversation; during that meeting, Larocque proposed relocating the business to the food court area and offered marketing assistance. Around mid-February 2024, Gaufres à GoGo ceased operations and never reopened. In March 2024, Cominar issued a notice of default and lease termination, effective 72 hours after delivery.

Contractual clauses at issue

The lease contained no provision guaranteeing specific foot traffic levels or anticipated sales. It also contained no stipulation regarding the timing of the food court renovation works. Clause 9 of the lease provided for automatic termination (résiliation ipso facto) in the event of a continuing default of its terms. Clause 11(a) imposed a penalty of $100 per day for each day the tenant failed to operate its business, as required under the lease's continuous operation obligation — a clause distinct from rent, intended to compensate the landlord for the loss of an active participant in the commercial ecosystem of the shopping centre.

Reasoning and analysis

The court first examined whether the landlord's pre-contractual representations amounted to fraudulent misrepresentation (dol) or a vitiating error under the Civil Code of Québec. On the question of foot traffic, the court found that Larocque's statements — including that the area was normally busy — were consistent with the documented figure of approximately 15 million annual visits. The lease contained no sales guarantee, and Bosmans never asked specific questions about how foot traffic was measured or whether it applied specifically to the metro-level unit. The court noted that Bosmans visited the premises only twice, both in the early afternoon, without a real estate broker, and without conducting any further due diligence before signing. The court cited the well-established principle that parties to commercial contracts have a duty to inform themselves and cannot rely on their own passivity to invoke error. On the issue of homeless persons, the court acknowledged that Larocque was aware of the periodic presence of itinerant individuals near the premises during winter months and did not disclose this. However, the court found that this omission did not rise to the level of fraud: the presence of homeless individuals in a public transit area was an observable fact, Bosmans never asked about disadvantages of the premises, and Gaufres à GoGo never indicated that such a concern would be a dealbreaker. Moreover, once notified in December 2023, Cominar acted promptly to address the issue. Regarding the food court closure, the court accepted Larocque's evidence as sincere: she communicated a plan that existed at the time of signing, without guaranteeing a specific date. The court noted that when a particular circumstance is determinative of consent, the party relying on it must have it incorporated into the contract — which Gaufres à GoGo, represented by counsel, failed to do. On the issue of peaceful enjoyment, the court held that the presence of homeless persons in a public space did not constitute a substantial breach of the landlord's obligation under Article 1854 C.c.Q., as the tenant failed to establish serious prejudice or demonstrate that the situation persisted after remedial steps were taken. The court ultimately found that the tenant's arguments were a pretext to exit a short-term lease rather than a genuine legal basis for annulment. On Cominar's counterclaim, the court confirmed that the continuous operation clause and the daily penalty clause were valid and enforceable. Cominar had explored good-faith solutions, including relocation and marketing support, but the tenant abandoned the premises three days after its lawyer's letter of February 16, 2024 — which itself suggested an openness to relocation — without any further negotiation.

Ruling and overall outcome

The court rejected Gaufres à GoGo's main action in its entirety, finding no vitiating error, fraudulent misrepresentation, or breach of the obligation to provide peaceful enjoyment sufficient to justify lease nullification or an award of damages. Cominar's counterclaim was granted in full. The court ordered Gaufres à GoGo inc. to pay Fonds de placement immobilier Cominar the total sum of $44,189.21, comprising $27,989.21 in unpaid rent (net of the security deposit already held by the landlord) and $16,200.00 in daily penalties for 162 days of non-operation at $100 per day. This amount bears interest at the legal rate plus the additional indemnity under Article 1619 C.c.Q. from the date of default. Costs were also awarded in favour of Cominar.