Executive Summary: Key Legal and Evidentiary Issues

• The Applicant sought an interim injunction to stop the Respondent from terminating its lease over Granville Hall.
   
• Central to the dispute is whether the Estoppel Certificate's stated lease expiry date of September 30, 2026 is accurate, given the Applicant's position that the lease runs until August 2027.
   
• Evidence indicated the property had been used for short-term summer rentals for roughly eight years with the prior landlord's knowledge and support.
   
• Questions were raised about whether the Applicant carries adequate insurance for its mixed-use operation.
   
• Disputed facts included whether an additional occupancy permit was required before the building could lawfully be used for short-term rentals.
   
• Third-party impacts, including nearly 300 existing reservations and 29 signed student leases, were weighed as part of the balance-of-convenience analysis.
   

Facts of the case

3298944 Nova Scotia Limited (the Applicant) operates Granville Hall, a roughly 30-room student residence and short-term accommodation business at 1669 Granville Street in Halifax. The building functions as a student dormitory from September to April and as short-term tourist accommodation over the summer, a seasonal arrangement the Applicant has run for about eight years with the knowledge and agreement of its original landlord, BSL Holdings Ltd. The Applicant entered a ten-year building lease with BSL in September 2016, with two five-year renewal options at market rent. In July 2025, 3299425 Nova Scotia Limited (the Respondent) acquired the property through a court-approved insolvency sale involving BSL. The Respondent then asked the Applicant to sign an Estoppel Certificate, which the Applicant executed after requesting an amendment. On May 12, 2026, the Respondent advised the Applicant it considered the lease to expire September 30, 2026, and that the Applicant had missed its window to exercise renewal rights — a position the Applicant disputed. The Respondent also proposed a new lease starting October 1, 2026 at a base rent of $30,000 per month, compared to the Applicant's current base rent of approximately $16,000 per month. On June 30, 2026, the Respondent issued a Notice of Default alleging the Applicant was using the premises as a hostel or hotel in breach of the lease, giving ten days to remedy. The Applicant filed an Application on July 7, 2026 seeking a declaration that the lease runs until August 2027, and brought an emergency motion for an interim injunction, heard July 10 and 15, 2026, with an oral decision delivered July 16, 2026.

Policy and legislative provisions at issue

The lease's Permitted Use clause, Article 1.1(q), defines "Permitted Use" as operating the premises as "a student residence/dormitory," and Article 8.1 states the Applicant acknowledges the premises "will be used solely for the Permitted Use... and for no other purpose." The Estoppel Certificate the Applicant signed contains several relevant clauses: Clause 2 states the lease is the entire agreement with no other agreements respecting the tenancy; Clause 3 states the lease is unmodified and in full force and effect; and Clause 13 states the premises are being used for the purpose set out in the lease. Paragraph 4 of the Estoppel Certificate indicates the lease term expires September 30, 2026. On the insurance side, Clause 10.1 requires the Applicant to maintain All Risks and Commercial General Liability insurance, Clause 10.2 requires the Respondent to insure the property against fire and extended perils, and Clause 10.1(3) allows the Respondent to obtain its own insurance and charge the premium plus 15% as additional rent if the Applicant fails to provide proof of coverage. Procedurally, the court applied Civil Procedure Rule 28.02(1) governing emergency motions, Civil Procedure Rule 41.04(2) setting out the conditions for an interim injunction, and section 43(9) of the Nova Scotia Judicature Act, which authorizes the court to grant injunctions where it is just or convenient to do so.

Reasoning and analysis

Chief Justice Smith first found that an emergency existed of sufficient gravity to justify an expedited hearing under Rule 28.02(1), given the volume of imminent reservations and the ten-day default deadline. Turning to the injunction test under Rule 41.04(2) and the framework from RJR-MacDonald Inc. v. Canada (Attorney General), the Court found a serious issue to be tried, noting that although the Respondent relied on the Estoppel Certificate's representations, the evidence suggested the property had for years been used for short-term rentals with the prior landlord's full knowledge and support. On irreparable harm, the Court accepted that the Applicant would lose customers and suffer damage to its business reputation if its roughly 290 existing reservations (covering about 708 room nights) and 29 signed student leases could not be honoured, and that the Applicant risked being banned outright from booking platforms such as Expedia, Booking.com, and Airbnb, through which about 90% of its short-term bookings are made — a harm the Court distinguished from a mere prior suspension. The Court then weighed the harm the Respondent claimed it would suffer. On insurance, the Court found the evidence unclear as to whether an actual coverage gap existed, and directed the Respondent to specify what documentation it required. On the occupancy permit issue, the Court found the evidence unclear as to whether a further permit was legally required, noted that Mr. Al-Akhali (the Applicant's principal) is not the property owner and could not apply for one even if required, and observed the issue had a ready fix through an inspection the City had already offered to conduct. On the Respondent's claim that it relied on the Estoppel Certificate's term date in arranging financing, the Court found any resulting financial harm could be addressed through the undertaking in damages the Applicant had filed under Rule 41.06. On balance of convenience, the Court found little harm would accrue to the Respondent from an injunction, since it would continue receiving rent and the building would continue operating as it had for years, whereas the Applicant would suffer significant harm without one. The Court also considered the interests of the approximately 290 people with existing reservations and the 29 students with signed leases as third parties affected by the outcome.

Ruling and overall outcome

The Court concluded that the Applicant had satisfied all four conditions required under Civil Procedure Rule 41.04(2) and granted the interim injunction the Applicant sought, preventing the Respondent from terminating the lease or repossessing the premises pending further determination of the matter. The decision does not specify any monetary amount ordered, granted, or awarded to either party — no damages, costs, or other quantified sum is identified in the judgment, beyond noting that the Applicant's undertaking in damages under Rule 41.06 remains available to compensate the Respondent later if the Respondent ultimately succeeds and suffers loss from the injunction.