



COURT OF APPEAL FOR ONTARIO

CITATION: Fountain Tire (London Stoneybrook) Ltd. v. 2169728
    Ontario Ltd., 2019 ONCA 340

DATE: 20190425

DOCKET: C66010

Doherty, Paciocco and Zarnett JJ.A.

BETWEEN

Fountain Tire (London Stoneybrook) Ltd.

Applicant (Appellant)

and

2169728 Ontario Ltd.

Respondent (Respondent in Appeal)

Daniel J. MacKeigan, for the appellant

Michael Lerner and John B. Brennan, for the respondent

Heard and released orally: April 15, 2019

On appeal from the order of Justice Michael D. McArthur of
    the Superior Court of Justice, dated September 21, 2018.

REASONS FOR DECISION

[1]

The appellant (Tenant) and the respondent (Landlord)
    disagreed over the interpretation of their lease. There were two points of
    disagreement. First, the appellant maintained that the leased premises included
    the parking area owned by the City of London and licensed to the respondent by
    the City on an annual basis. Second, the appellant argued that the respondents
    right to exclusive use of certain office space in the leased building did not
    permit the Landlord to lease that space to a third party.

[2]

The application judge found against the appellant on both points,
    holding, at para. 72:

I find that the lease does not include the
    area on Block A, Plan 781 designated as Part 1 on Plan 33R-7181. In addition,
    the respondent is entitled to the use of the office as defined in the lease and
    is also entitled to the lease this space to third parties subject to the other
    provisions in the lease.

[3]

On the appeal, the appellant renews the same arguments
    that were made before the application judge. We do not agree with his first
    submission, but we do agree with the second.

[4]

In respect of the first submission, we approach those
    submissions by accepting that, absent an identifiable error in law, the
    application judges interpretation of the contract is entitled to deference in
    this court.

[5]

We see no legal error in the application judges
    approach to the interpretative exercise. He clearly set out that approach in
    his reasons. The question therefore is whether he fell into clear and palpable
    error in his application of the correct legal principles.

[6]

On the first point, the application judge found that on
    the plain meaning of the word Property, a defined term in the lease, the
    parking area owned by the City was not included in the leased premises (see reasons
    para. 46). The trial judge reviewed the other considerations relevant to the
    interpretation of the language in the lease and found that none led to an
    interpretation other than the plain and ordinary meaning of the words in the
    definition of Property provided in the lease. We see no error in that
    analysis.

[7]

On the second point, the application judge found that
    para. 7.01(d) of the lease allowed the Landlord to lease the Landlords
    office (a defined term), which was not included in the property leased to the
    appellant, to a third party. In reaching that conclusion, the application judge
    said, at para. 64(a):

A plain reading of the lease terms in
    this regard must take into account that:

a.

The exclusive
    use by the landlord also extended to its invitees in this provision.

[8]

With respect, para. 7.01(d) of the lease draws a clear distinction
    between use, which is reserved exclusively to the Landlord and access or
    entry, which is afforded to the Landlord and invitees of the Landlord. The
    trial judges finding that the right to use the Landlords office extended to
    others, including third party tenants, is contrary to the clear language of the
    lease and ignores the distinction drawn in the lease between use and access
    or entry. The trial judges failure to draw the distinction drawn in the
    language of the operative term constitutes a palpable and overriding error.

[9]

The appeal is allowed to the extent that the appellant is entitled to a
    declaration that para. 7.01(d) of the lease does not permit the Landlord to
    lease the Landlords office to a third party.

[10]

Success
    is divided. No costs on the motion or the appeal.

Doherty J.A.

D.M. Paciocco J.A.

B. Zarnett J.A.


