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Landlord and Tenant (Commercial) - COVID

. 2505243 Ontario Limited (ByPeterandPaul.com) v. Princes Gates Hotel Limited Partnership

In 2505243 Ontario Limited (ByPeterandPaul.com) v. Princes Gates Hotel Limited Partnership (Ont CA, 2022) the Court of Appeal considered COVID amendments to the Commercial Landlord and Tenant Act, particularly regarding the Canada Emergency Commercial Rent Assistance Program (CECRA):
[21] Second, PG contends that the trial judge erred by concluding that, after the pandemic arrived and the hotel was closed, it was unreasonable for PG to refuse to assist 250 with a potential application for relief under the Canada Emergency Commercial Rent Assistance Program (the “CECRA”).

[22] We disagree. At a moment of great difficulty for both the hotel and the restaurants, caused by the pandemic, the CECRA provided a golden opportunity for substantial economic relief for both entities. Under the CECRA, PG would have received 75 percent of the required rent which, presumably and in fairness, would have significantly reduced its concern that 250 could not and/or would not pay its rent once the pandemic hit and the hotel and restaurants closed.

[23] PG’s reason for not making an application under this program, and/or not supporting an application by 250, was that 250 was not eligible for the CECRA because its income was above the $20 million threshold. In support of this position, PG insisted, in the middle of a pandemic and staring huge government financial support right in the face, that 250 obtain an independent CPA’s opinion about its revenue. In light of 250’s T2 filing for 2019, stating its revenue was $17,557,618, PG’s insistence on independent verification was grossly unfair. Accordingly, we agree with the trial judge that, by refusing to support a CECRA application, PG contributed to 250’s failure to pay rent. We entirely agree with her ultimate conclusion on this issue:
In summary, I find that the Hotel should have assisted 250 with its CECRA application. In hindsight, its reasons for not doing so were unjustified and it was resolute in its insistence that 250 did not qualify rather than finding ways in which it did. I further infer that part of the reason the Hotel did not want to assist 250 was that it had already decided that it wanted to dissolve the Agreements. By this point in June, the Hotel already had a signed Letter of Intent with Harlo. Committing to assisting 250 with CECRA meant further ties between the Hotel and 250. The Hotel had already moved on but had not told 250 this.


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Last modified: 19-01-23
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