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Landlord and Tenant (Commercial) - Renewals. 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. . Narwhal International Limited v. Teda International Realty Inc.
In Narwhal International Limited v. Teda International Realty Inc. (Ont CA, 2021) the Court of Appeal stated a useful principle about rights to renew a lease where the rent is yet to be negotiated:[6] The application judge noted that a right to renew a lease on the same terms except for the rental rate does not create an enforceable legal obligation, other than an obligation on the landlord to negotiate in good faith: referring inter alia to Godson v. P. Burns & Co. (1919), 1919 CanLII 539 (SCC), 46 D.L.R. 97 (S.C.C.); Molson Canada 2005 v. Miller Brewing Company, 2013 ONSC 2758, 116 O.R. (3d) 108, at paras. 95-108.
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