Rarotonga, 2010

Simon's Legal Resources


Most Popular
Contracts / Torts / Evidence / Limitations / Tenant Plus / welfare (ontario works) / odsp / human rights / employment / consumer / E-Access

home / about / Little Friends Lefkada (Greece) / testimonials / Conditions of Use

Associated Site
Canadian Animal Law


. Anderson Learning Inc. (Bond International College) v. Birchmount Howden Property Holdings Inc.

In Anderson Learning Inc. (Bond International College) v. Birchmount Howden Property Holdings Inc. (Ont CA, 2022) the Court of Appeal considered the exercise of a lease renewal option:
[4] On February 28, 2020, the respondent wrote to the appellant by email attaching a letter of the same date. The letter states, in the first paragraph: “This is written confirmation of [the respondent’s] intent to extend the lease at 1500 Birchmount Road”.

[5] The appellant submits that this was not a clear and unequivocal notice as required by 120 Adelaide Leaseholds Inc. v. Oxford Properties Canada Ltd., [1993] O.J. No. 2801 (C.A.). The submission is based on the rest of the February 28 letter which responds to rent and term proposals made by the appellant the previous year. The respondent indicated that it wanted the same terms and conditions of the original lease but would be prepared to extend for three years with rent fixed at $21 per square foot including utilities. The appellant submits that this demonstrates that the extension was conditional and not clear and unequivocal.

[6] We do not agree.

[7] First, the lease stipulated that to exercise the option to renew, the tenant was to provide notice of its intention to renew. The February 11 and 28 correspondences said clearly that the respondent intended to renew; the option was thus exercised. The second part of the February 28 letter responded to the appellant’s proposal and did not negate the clear exercise. Nothing in the balance of the letter suggested that the exercise was conditional upon the appellant accepting the respondent’s terms which were provided in response to the appellant’s proposal.

[8] Second, the lease provided for arbitration if the rent for the renewal term was not agreed to. The parties therefore anticipated ongoing negotiations.

[9] Third, this court owes deference to the motion judge’s conclusions: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 10, 36. She found that the fact that the respondent included a response to proposed amendments from the appellant did not detract from the clear statement of its intention to renew in the letter. She also considered the appellant’s arguments that subsequent negotiations between the parties undermined the notice and found that this was to be anticipated given the arbitration clause. In short, she rejected the arguments the appellant makes now.
. Stericycle ULC v. HealthPRO Procurement

In Stericycle ULC v. HealthPRO Procurement (Ont CA, 2021) the Court of Appeal considered the law of elections as it applies to contractual options:
[39] The doctrine of election was described in the following terms in Charter Building Company v. 1540957 Ontario Inc. (Mademoiselle Women’s Fitness & Day Spa), 2011 ONCA 487, 107 O.R. (3d) 133, at para. 19:
Election at common law takes place where a party is faced with a choice between two inconsistent courses of action that affect another party's rights or obligations, and knowing that the two courses of action are inconsistent and that he or she has the right to choose between them, makes an unequivocal choice and communicates that choice to the other party. The doctrine provides that the party making the election is afterwards precluded from resorting to the course of action that he has rejected. The election is effective at the point of communication on the basis that the parties to an ongoing relationship are entitled to know where they stand. [Citation omitted.]
. Flintoff v. Crown William Mining Corporation

In Flintoff v. Crown William Mining Corporation (Ont CA, 2016) the Court of Appeal made the following comments on what form of new contract results from the exercise of an option contained in the original contract:
Determining whether an option contained within a contract amounts to a separate unilateral agreement is an exercise driven by the context and the contractual language. In Sail Labrador Ltd. v. Challenge One (The), 1999 CanLII 708 (SCC), [1999] 1 S.C.R. 265, at para. 41, Bastarache J. stated that:
Whether a contract which contains an option clause establishes a single, bilateral contract or two separate contracts, one bilateral and the other unilateral, is a matter of construction. Courts must examine the text of the contract and the context surrounding it in order to determine the intention of the parties, keeping in mind that this Court has previously approved of the tendency by courts to treat offers as calling for bilateral rather than unilateral performance whenever a contract can fairly be so construed. [Citation omitted.]
. Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc. (Mr. Sub)

In Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc. (Mr. Sub) (Ont CA, 2016) the Court of Appeal considered when a contractual option (here to renew a commercial land lease) might be void for uncertainty as to it's terms (here the amount of rent on the renewed term):
[27] It is trite law that the courts will not enforce “an agreement to agree” and that there must be reasonable certainty as to the length of the term of a lease or of a renewal option, as well as to the amount of rent to be paid. See e.g. Re Fice and Department of Public Works of Ontario (1922), 64 D.L.R. 535 (Ont. S.C. (A.D.)), at p. 539; Gourlay v. Canadian Department Stores Ltd., 1933 CanLII 9 (SCC), [1933] S.C.R. 329, at p. 331; and Re Calford Properties Ltd. and Kelly’s Billiards Ltd. (1973), 1973 CanLII 215 (AB QB), 37 D.L.R. (3d) 300 (Alta. S.C. (T.D.)), at pp. 303-5.

[28] However, contrary to Mapleview’s submission, this case does not involve “an agreement to agree” on the renewal rate. In the cases relied upon by Mapleview, there was neither a formula or other objective standard for establishing the rate, nor any mechanism for its determination in the event of a failure to agree: see Sheppard v. Czechoslovak (Toronto) Credit Union Ltd. (1989), 1 R.P.R. (2d) 290 (Ont. D.C.), at p. 293; Young v. Van Beneen, [1953] 3 D.L.R. 702 (B.C.C.A.), at pp. 704-5; Great Atlantic & Pacific Co. of Canada v. Topostar (Aurora) Inc., 2006 CanLII 7279 (ON SC), 2006 CanLII 7279 (Ont. S.C.), at paras. 51-52; and Delphi Management Corp. v. Dawson Properties, 2014 ONSC 354 (CanLII), at paras. 10-11.

[29] Here, however, there is a formula or other objective standard for establishing the rate – namely, what is the “then current rate” at the time of renewal. Courts should not strive to set aside a commercial bargain that was intended to have legal effect where a clause in an agreement – even if not precisely expressed – has an ascertainable meaning: Hillas & Co. Ltd. v. Arcos Ltd. (1932), 147 L.T. 503 (Eng. H.L.), at p. 514; and Griffin v. Martens (1988), 1988 CanLII 2852 (BC CA), 27 B.C.L.R. (2d) 152 (C.A.), at p. 153. Adopting this approach in Empress Towers Ltd. v. Bank of Nova Scotia (1991), 1990 CanLII 2207 (BC CA), 73 D.L.R. (4th) 400, at p. 403, leave to appeal refused, [1990] S.C.C.A. No. 472, the British Columbia Court of Appeal concluded that “the courts will try, wherever possible, to give the proper legal effect to any clause that the parties understood and intended was to have legal effect.” I agree.

[30] Here, I am satisfied that the parties intended to make a binding agreement as to the renewal rate; they simply declined to specify that rate in a dollar amount because neither wished to assume the risk of error (too high or too low, depending on their interest) 15 years later. This makes commercial sense. Expressing the renewal rate as the “then current rate” is the functional equivalent of saying the “then market value” or the “then prevailing market rate” – expressions that have been found to be sufficient to overcome a void-for-uncertainty argument. See e.g. Mustard Seed (Calgary) Street Ministry Society v. Century Services Inc., 2009 ABQB 171 (CanLII), 79 R.P.R. (4th) 252, at paras. 31-39, 46 (the “then prevailing market rate”); Brown v. Gould, [1972] 1 Ch. 53, at pp. 60-62 (the “market value of the premises at the time”); Great Atlantic & Pacific Co., at para. 51 (an “objective standard such as ‘market’ rent”); and Empress Towers, at p. 404 (the expression “market rent prevailing at the commencement of [the] renewal term” would itself have sufficed, but the addition of the words “as mutually agreed between the Landlord and the Tenant” rendered the clause void for uncertainty in the circumstances).


The author has waived all copyright and related or neighboring rights to this Isthatlegal.ca webpage.