Executive Summary: Key Legal and Evidentiary Issues

• A commercial landlord sought unpaid rent, a contractual indemnity, and reinstatement costs from a corporate tenant and two individual guarantors.
   
• Two of the three defendants failed to appear at trial or file any written defence.
   
• Guarantor liability turned on whether a shareholder's departure from active involvement in the tenant company excused his solidary suretyship obligations.
   
• Lease clauses governing maintenance, repairs, and lease expiration supported the landlord's claim for reinstatement costs.
   
• Testimony and photographic evidence went uncontradicted regarding the condition of the premises at the end of the lease.
   
• Recovery was capped at the Small Claims Division's jurisdictional threshold despite a larger sum being owed.
   

Facts of the case

Cytren Development Corporation and International Development Corporation (Quebec) Ltd, joint owners of a commercial building at 776 Halpern Avenue in Dorval, sued Royal Awnings inc. ("Awnings"), along with Ahmad Baydoun and Abdul Hafiz Khaled, who had each personally guaranteed Awnings' obligations under a commercial lease signed on February 22, 2021 and renewed on August 16, 2022. Awnings stopped paying rent and additional expenses starting in July 2024 and continued not paying through the lease's end on May 31, 2025, ceasing operations around that time without settling the arrears. Baydoun had been the individual exclusively managing Awnings' affairs during this period. Khaled, meanwhile, testified that he departed for Lebanon in December 2023 following a conflict with Baydoun and had no further involvement in Awnings' operations from that point, even initiating separate legal action against Baydoun set to be heard in September 2027. Awnings and Baydoun neither filed a defence nor appeared at trial; Khaled appeared by videoconference but offered no substantive answer to the claim.

Policy and legislative provisions at issue

The plaintiffs' claim rested on several lease clauses. Clause 11, paragraph 2 ("Maintenance and Repairs"), Clause 19 ("Expiration of Lease"), and Clause 51.5 ("Special Conditions") were invoked to support the claim for reinstatement costs after the premises were allegedly left in poor condition. The lease also contained an indemnity provision covering rent for a six-month period, which the plaintiffs applied to the unpaid months from November 2024 onward and which formed the basis for the additional indemnity claim. Beyond the lease terms, the guarantors' solidary suretyship obligations and the additional indemnity under article 1619 of the Civil Code of Québec were also engaged.

Reasoning and analysis

The plaintiffs originally calculated their total claim at $22,132.66 — comprising $5,288.84 in unpaid rent for July through October 2024, $7,933.26 as a contractual indemnity equivalent to six months' rent for the remaining unpaid period from November 2024 onward, and $8,910.56 for repair and reinstatement costs based on the cited lease clauses — but reduced the claim to $15,000 to remain within the Small Claims Division's jurisdictional ceiling. The evidence supporting the amount owed, including witness testimony and photographs of the premises' condition, was not contradicted by any defendant. On the question of guarantor liability, the Court found no valid legal basis to relieve Khaled of his obligations as solidary guarantor merely because he had stepped back from involvement in Awnings' affairs after his conflict with Baydoun; his personal grievances against Baydoun did not affect his liability to the plaintiffs, though the Court noted he could pursue Baydoun separately for any amount he is required to pay under the judgment. The Court concluded that the plaintiffs had met their burden of proof and that none of the defendants had raised any basis for dismissing the claim in whole or in part.

Ruling and overall outcome

The Court granted the plaintiffs' claim in full. Cytren Development Corporation and International Development Corporation (Quebec) Ltd, as the successful parties, were awarded solidary judgment against Royal Awnings inc., Ahmad Baydoun, and Abdul Hafiz Khaled for $15,000, plus interest at 5% per year and the additional indemnity under article 1619 C.C.Q., running from the date of service (October 3, 2024), along with legal costs of $364.