



COURT OF APPEAL FOR ONTARIO

CITATION: Drew v. Huskinson, 2019 ONCA 38

DATE: 20190122

DOCKET: C63407

Brown, Paciocco and Zarnett JJ.A.

BETWEEN

Randy Drew and Paul
    Shaughnessy

Plaintiffs (Respondents)

and

Linda Huskinson

Defendant (Appellant)

M.
    John Ewart, for the appellant

William
    F. Kelly, for the respondents

Heard: January 16, 2019

On appeal from the
    judgment of Justice Stephen T. Bale of the Superior Court of Justice, dated
    February 28, 2017, with reasons reported at 2017 ONSC 592.

REASONS FOR DECISION




[1]

The appellant, Ms. Linda Huskinson, owns farm property. On April 12,
    2012 she signed a lease permitting the respondents, Randy Drew and Paul Shaughnessy,
    to operate their farm business on about 120 acres of her property for the 2012,
    2013, and 2014 crop years at a stipulated rent (the Lease).

[2]

The respondents did so during the 2012 crop season. However, by letter
    dated December 12, 2012, the appellant informed the respondents that she was
    scrapping the Lease and called upon them to sign a new agreement that meets
    the needs of both the above tenant farmers and landlord equally. She stated
    that before concluding a new agreement, it will be necessary to agree in
    writing that the existing written agreement signed April 12, 2012 is null and
    void. In her letter, the appellant did not specify any conduct of the
    respondents upon which she was relying to end the Lease.

[3]

The respondents offered to engage in discussions with the appellant, but
    by letter dated February 15, 2013 she advised that she was not prepared to
    continue renting her farmland to them.

[4]

This action for breach of the Lease ensued.

[5]

The appellant asserted two defences. First, she took the position that
    the Lease was not enforceable because she entered into it under duress. The
    trial judge did not accept her plea of duress. The appellant does not appeal
    that finding. Second, she argued that she was entitled to terminate the Lease
    because the respondents had failed to provide information about chemical
    fertilizer application rates in the form she contended was required by the
    Lease.

[6]

The trial judge found the appellant was not entitled to terminate the
    Lease. He awarded the respondents damages of $64,051.02, representing their
    lost profit from the property for the 2013 and 2014 crop seasons.

[7]

The appellant appeals. At the hearing we dismissed the appeal, with
    reasons to follow. These are those reasons.

[8]

The appellant advances a single ground of appeal: the trial judge erred
    by finding that any failure by the respondents to provide her with the chemical
    fertilizer application rates in the form she contended was required did not
    entitle her to terminate the Lease.

[9]

The Lease contains a provision that states: Supply copy of application
    rates for fertilizer and chemical by 3
rd
party once available. At
    trial, the appellant testified that she understood that a third party would
    provide her with the information.  Instead, in September 2012, Mr. Drew
    provided her with a handwritten document that identified the type and quantity
    of fertilizer used and the details of chemical spraying that occurred on May
    23, 2012.

[10]

The
    appellant did not take the position that the information provided by the
    respondents was incorrect or disclosed that they had applied chemicals and
    fertilizer in a way which damaged her property. Instead, the appellant argued
    that because the respondents did not provide her with application rate
    information in the manner she contended the Lease required  i.e. a document
    from a third party  she was entitled to terminate the Lease.

[11]

The
    trial judge did not accept the appellants position. He wrote, at paras. 9 and
    10:

The defendant acknowledges that her letter had the effect of
    repudiating the lease, but argues that she was entitled to terminate the lease,
    because the plaintiffs failed to comply with a term of the contract which
    required them to Supply Application Rates of Fertilizer & chemicals by 3
rd
party.
    Her position is that she was entitled to some sort of formal document from the
    third parties who applied the fertilizer and chemicals, but that all she got
    was a handwritten note from Randy Drew advising her of the fertilizer and
    chemicals applied. The plaintiffs evidence is that the third parties were
    unable to provide the sort of document that the defendant was requesting,
    because they applied the fertilizer and chemicals to multiple farms that were
    farmed by the plaintiffs, and provided a single invoice only, for all of those
    farms.

Whether the information provided to the defendant relating to
    fertilizer and chemicals satisfied the relevant term of the contract or not,
    she was not entitled to terminate the lease. Failure to provide the information
    relating to fertilizer and chemicals in the form requested by the defendant
    would in no way amount to substantial non-performance. The benefit for which
    the defendant contracted was the payment of rent. If there was a breach, her
    remedy would lie in damages.

[12]

At
    its core, the appellants criticism of the trial judges finding is that he did
    not properly consider whether a failure by the respondents to provide chemical application
    rates from a third party amounted to a substantial failure of performance by
    them:
Place Concorde East Limited Partnership v. Shelter Corp. of Canada Ltd.
,
    270 D.L.R. (4th) 181(Ont. C.A.), at para. 52.

[13]

We
    are not persuaded by this submission. The trial judges interpretation of the
    Lease as not giving the appellant a right of early termination in the event the
    respondents failed to provide information relating to fertilizer and chemicals in
    the third-party form she requested was a reasonable one in light of several
    factors:

(i)      the
    Lease did not contain a provision that defined the events of default that would
    permit the appellant to terminate the Lease prior to the expiry of its
    three-year term;

(ii)      the
    trial judge considered the proportional effect of any breach on the total value
    of performance and concluded that the benefit for which the appellant
    contracted under the Lease was the payment of rent, which the respondents duly
    paid; and

(iii)     the
    appellant did not identify any inadequacy with the content of the respondents
    handwritten disclosure of the chemical application rates in her December 12,
    2012 termination letter.

[14]

Consequently,
    we see no palpable and overriding error in the trial judges interpretation of
    the Lease or in his finding that there was no breach of the type which relieved
    the appellant of the obligation of further performance. He did not err in
    concluding that the appellant was not entitled to terminate the Lease at the
    end of its first year.

[15]

The
    appeal is dismissed.

[16]

The
    appellant shall pay the respondents their costs of the appeal fixed at $8,000,
    inclusive of disbursements and all applicable taxes.

David
    Brown J.A.
David M. Paciocco J.A.
B. Zarnett J.A.


