Court Of Appeal Summaries (February 23 - 27, 2015)

Hello everyone. Below are summaries of this week's Ontario Court of Appeal civil decisions (non-criminal). Topics include family law support obligations, statutory interpretation of municipal tax laws, the collection of realty taxes from a tenant, and a discussion of prejudice in dismissal for delay motions.

St. Joseph (Township) v. Rowe, 2015 ONCA 128

[Weiler, Epstein and Brown JJ.A.]

Counsel:

Jamie Spotswood, for the appellant

Hugh MacDonald, for the respondent

Keywords: Real Estate, Landlord and Tenant, Sublease, Liability for Tax Arrears

Facts:

Rowe and the Township entered into an Offer to Lease dated April 8, 2004, for restaurant space at the Richards Landing Municipal Marina. The Marina lands were owned by the federal Crown and leased by the Township. At the time of the Offer to Lease the Marina had not been assessed for municipal realty tax purposes. Section 9 of the Offer to Lease stated: "Tenant shall be responsible to pay any and all realty taxes and assessments applicable to the leased premises".

By letter dated June 4, 2004, Rowe's lawyer, Mr. Dumanski, wrote to him advising: "You should determine in advance what those realty taxes are so you can determine whether you can afford to lease the premises". Rowe did not do so. Section 6 of the formal sublease stated: "The Subtenant shall be responsible to pay all realty taxes and assessments applicable to the subject property".

The Municipal Property Assessment Corporation ("MPAC") did not provide the Township with a property assessment notice for the leased premises until November, 2007. The following month the Township sent Rowe tax notices for the leased premises for the years 2005, 2006 and 2007 in the principal amount of $11,345.68. Rowe did not pay the Township any amount for realty taxes before vacating the leased premises in September, 2008.

The court below found Rowe liable the reality taxes. Rowe appealed.

Issues:

(1) Did the terms of the sublease permit the retroactive collection of realty taxes?

(2) Did the Township lack the authority to sue for realty tax arrears?

(3) Was the Township's claim for realty tax arrears estopped by the doctrine of laches?

Decision: Appeal dismissed.

Reasoning:

(1) Yes. The trial judge correctly held that the defendant could not escape his contractual obligation set out in both the offer to lease and the sublease and was responsible for taxes owing on the rental property during the duration of his tenancy.

(2) No. Rowe argued that the Township could not collect realty taxes from him by suing for tax arrears under the Sublease, but was limited to the realty tax recovery mechanisms available to a municipality under sections 349 to 351 of the Municipal Act, 2001, S.O. 2001, c. 25. Rowe did not plead this position in his Statement of Defence and Counterclaim, he did not raise it before the trial judge, and he did not provide this court with authority to support his position. In such circumstances, the court could not give any effect to his argument, especially in light of the clear language of s. 6 of the Sublease under which Rowe contracted with the Township, in its capacity as sub-landlord, to pay realty taxes.

(3) No. The doctrine of laches permits a court to deny relief to a claimant who has unreasonably delayed or who has been negligent in the assertion of its rights and, in consequence, the party opposite has acted to his detriment: Matharu v. Mid-West Sportswear Ltd., 2002 SKQB 522, at para. 7. The court saw no merit in this argument for two reasons. First, the trial judge made clear that responsibility for the delay in assessing the value of the leased premises lay with MPAC, not the Township. The Township issued tax notices to Rowe as soon as it was in a position to do so, within a month of receiving the MPAC property assessment notice. Second, the record did not support Rowe's contention that he had acted to his detriment as a result of any conduct by the Township in respect of the treatment of realty taxes under the Sublease.

Tags: Real Estate, Landlord and Tenant, Sublease, Liability for Tax Arrears

Mason v Shatford, 2015 ONCA 133

[Laskin, Rouleau and Huscroft JJ.A.]

Counsel:

W.A. Chalmers, for the appellant

I.Y. Lavrence, for the respondent

Keywords:

Court Order, Issue Estoppel, Abuse of Process

Holding:

Appeal dismissed.

Reasoning:

The Court of Appeal agreed with the motion judge that the appellant was attempting to relitigate issues already determined by a prior order. As noted by the motion judge, the respondent was entitled to rely on the prior order...