Public Health 'Trumps' Commercial Losses ' B.C. Supreme Court Rules In Favour Of Landlords In A COVID-19 Related Termination

• Published date: 01 June 2021
• Subject Matter: Real Estate and Construction, Coronavirus (COVID-19), Landlord & Tenant - Leases, Operational Impacts and Strategy
• Law Firm: Lawson Lundell LLP
• Author: Mr Thomas D. Boyd and Natasha Sanders

Commercial landlords have, in the past year and a half, dealt with many novel issues in relation to COVID-19, often on an emergency basis. Few landlords have had to deal with both public health order violations and gang crime relating to the same tenant, as in a recent decision of the B.C. Supreme Court, Ivy Lounge West Georgia Limited Partnership v. TA F&B Limited Partnership, 2021 BCSC 997. The court allowed the immediate termination of an occupation licence where the tenant's conduct was bringing the hotel into disrepute, potentially strengthening landlords' hands to take urgent action. The decision dealt with a licence agreement but it is likely that the same reasoning would apply to a lease.

Ivy Lounge, a bar located in Trump Tower, was issued an immediate Notice of Termination following 'ongoing, repeated, and flagrant disregard for Public Health Orders, liquor restrictions' and the tenant's 'apparent indifference' towards gang members who frequented the establishment.

Ivy Lounge sought an interim injunction and argued that the Notice of Termination was invalid due to the lack of opportunity for Ivy Lounge to remedy the default, as well as a breach of the duty of good faith.

The court relied on a term in the licence allowing immediate termination without a cure period where the Ivy Lounge brought the property or the hotel into disrepute and had a material...