Court Of Appeal Affirms Judicial Notice Of Anti-black Racism In Granting Relief From Forfeiture

• Published date: 08 June 2021
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Landlord & Tenant - Leases
• Law Firm: Gardiner Roberts LLP
• Author: Mr James R.G. Cook

In 8573123 Canada Inc. (Elias Restaurant) v. Keele Sheppard Plaza Inc., 2021 ONCA 371, the Ontario Court of Appeal affirmed an application judge's decision which stopped a commercial landlord from terminating a tenancy due to the tenant's alleged failure to give timely written notice of its intention to exercise an option to renew the lease. The application judge's decision was based in part on judicial notice of the existence of anti-black racism in Canada, and racial stereotypes contained in the landlord's evidence filed for the application.

The tenant was a restaurant operated by a husband and wife as a "family business," serving African and Caribbean food in Toronto. They occupied the premises in question pursuant to a lease with a five-year term. There were two options to renew for additional five-year periods. The lease provided that written notice of the exercise of the option was to be made by registered mail at least six months prior to the expiry of the lease.

The tenant failed to provide written notice of its exercise of the option prior to the date set out in the lease. The landlord kept the tenant as an overholding tenant from August 2017 to May 28, 2020, at which point the landlord terminated the lease.

At a hearing in 2020, the tenant sought relief from forfeiture pursuant to section 98 of the Ontario Courts of Justice Act. The tenant argued that it had attempted to provide notice to the landlord but that the landlord had ignored its requests.

According to the landlord's own evidence, it wished to replace the tenant with a more "suitable" business. The landlord argued that the tenant was "unattractive", and the tenant's business did not attract "family-oriented customers".

The application judge found that the tenant had initiated the lease renewal process by attempting to contact the landlord and its property manager before and after the deadline to exercise the renewal option. There was evidence that the tenant's calls were not returned and were "studiously avoided" because the landlord and its property manager did not want the tenant to continue to occupy the premises.

The application judge found that both the equities and the balance of convenience weighed in the tenant's favour, based on the following findings, among others:

• The tenant was not in breach of the lease and had never missed a rent payment even during the pandemic (while it operated a take-out service);
• The tenant had made substantial investments in the premises installing...