Court Of Appeal Summaries (July 13-17, 2015)

Below are summaries of the few civil decisions released by the Court of Appeal this week, followed by a list of short endorsements and criminal decisions. Topics covered include contract interpretation, limitation periods in the context of statutory accident benefits claims, and injunctions for zoning by-law violations.

Enjoy the weekend.

Table of Contents

Civil Cases:

1289012 Ontario Ltd v 2251420 Ontario Inc (click on case name to read the summary)

Keywords: Endorsement, Commercial Tenancies, Contract Interpretation, Franchise Agreement, Commercial Lease, Sub-Lease, Sattva Capital Corp v. Creston Moly Corp

Bustamante v The Guarantee Company of North America (click on case name to read the summary)

Keywords: Endorsement, Insurance Law, Statutory Accident Benefits, Insurance Act, Statutory Accident Benefits Schedule, s. 51(1), Summary Judgment, Limitation Period

Whitchurch-Stouffville (Town) v Bolender (click on case name to read the summary)

Keywords: Municipal Law, Zoning By-laws, Illegal Waste Disposal, Municipal Act, 2001, s. 440, Legal Non-Conforming Use, Planning Act, s. 34(9)

For a list of Short Endorsements, click here.

For a list of Criminal Law decisions, click here.

1289012 Ontario Ltd. v. 2251420 Ontario Inc., 2015 ONCA 524

[Strathy C.J.O., Epstein and Huscroft JJ.A.]

Counsel:

16. Bosman, for the appellant.

    L. Klug, for the respondents.

    Keywords: Endorsement, Commercial Tenancies, Contract Interpretation, Franchise Agreement, Commercial Lease, Sub-Lease, Sattva Capital Corp v. Creston Moly Corp

    Facts:

    The appellant 2251420 Ontario Inc. ("225") asserted the trial judge erred in finding that the Associates Lease, between it and the respondent 1289012 Ontario Ltd. ("128") was a valid and enforceable lease and in awarding damages for rent due under the lease. It claims that the Associates Lease was void ab initio because 128 had previously leased the service station to Imperial Oil and was collecting rent from Imperial. In a counterclaim, it sought the return of the rent it paid to 128 and damages for wrongful taking of possession.

    Throughout the material time, 128 was the head tenant of the premises, which were owned by a third party. In 2001, concurrent with its Dealer Sales Agreement with Imperial, 128 leased the premises to Imperial ("the Imperial Lease") in return for a payment of 1.5 cents per litre for all fuel sold on the premises. Imperial then sub-leased or cross-leased the premises to 128 for $1.00 per year ("the Sublease"). The lease and leaseback were common in the industry: they secured Imperial's right to supply gasoline and controlled the dealer's use of the premises.

    As the service centre business was transferred to successive companies over the years, the Sublease, Dealer Sales Agreement and related agreements were assigned to the new dealer. However, these contractual arrangements changed when the business was transferred to an unrelated company: the respondents entered into a separate sublease ("Associates Lease") with the new operator as well as a form of franchise agreement ("Associates Agreement"). Thus, there were two "leases" of the premises: the Sublease and the Associates Lease. 225's position is that the form and plain language of the Imperial Lease should determine its legal effect and that 128 had no right to lease the premises because it had previously leased them to Imperial.

    Issues:

    Did the trial judge err in finding the Associates Lease was valid and enforceable, and in awarding damages for rent due under the lease?

    Holding: Appeal dismissed, with costs to the respondent fixed at $18,000, inclusive of disbursements and all applicable taxes.

    Reasoning:

    The Court stated that it was required to have regard to the nature of the documents and the words used by the parties to determine their contractual intent. It cited Sattva Capital Corp v. Creston Moly Corp for the proposition that the meaning of words is determined from a number of contextual factors, including the nature of the relationship and the purpose of the agreement. The Supreme Court in Sattva stated the importance of the history of the transaction, the background, context and the market in which the parties were operating.

    The Court also cited Salah v. Timothy's Coffees of the World Inc: "Where a transaction involves the execution of...