



COURT OF APPEAL FOR ONTARIO

CITATION: Jay-Pee Drycleaners Inc. v. 2321324 Ontario Inc.,
    2017 ONCA 798

DATE: 20171018

DOCKET: C63330

Pepall, van Rensburg and Trotter JJ.A.

BETWEEN

Jay-Pee Drycleaners Inc. (Lee Byeongheon)

Plaintiff (Appellant)

and

2321324 Ontario Inc. a.k.a. Jasaab Holdings Inc.

Defendant (Respondent)

Byeongheon Lee, acting in person

Kyle Van Schie, for the respondent

Heard:  August 18, 2017

On appeal from the judgment of Justice Robert L. Maranger
    of the Superior Court of Justice, dated January 6, 2017, with reasons reported
    at 2017 ONSC 7874.

Reasons for Decision

[1]

Following oral argument, we allowed the appeal with reasons to follow. 
    These are those reasons.

Background Facts

[2]

The appellant, Byeongheon Lee, had operated a dry cleaning business in
    premises that were subject to a 12-year commercial lease.  Section 6.07 of the
    lease required the appellant to comply with all applicable statutes and
    regulations affecting the premises.  When the lease expired on February 28,
    2012, it was converted into a month-to-month tenancy subject to the existing
    terms of the lease.

[3]

On April 5, 2012, the former landlord assigned the lease to the
    respondent landlord, 2321324 Ontario Inc.

[4]

On April 20, 2012, the respondents property manager wrote to the
    appellant advising that under s. 6.07 of the lease and
Dry Cleaners
, O.
    Reg. 323/94, a regulation under the
Environmental Protection Act
,
    R.S.O. 1990, c. E. 19, which he attached, the appellant had to successfully
    complete a course approved by the Director in the Management of Contaminants
    and Wastes in connection with the operation of dry cleaning equipment.  The
    letter further stated that the appellant had to complete the course within 90
    days and provide proof of completion to the office of the property manager.

[5]

Subsection 2(1) of the
Dry Cleaners

Regulation provides
    that [n]o person shall operate dry cleaning equipment at a commercial
    establishment unless a trained person works full-time at the establishment.

[6]

Subsection 1(1) of the Regulation defines trained person as a person
    who has:

(a) successfully completed a course approved by the
    Director;

(b) otherwise satisfied the Director that he or she
    is qualified to manage contaminants and wastes in connection with the operation
    of dry cleaning equipment; or

(c) satisfied the Director that he or she holds a
    valid authorizing certificate that is in good standing issued by an
    out-of-province regulatory authority.

[7]

The property manager wrote again on June 28, 2012, stating that in order
    to comply with the lease and the Regulation, the appellant was to successfully
    complete the course. The appellant was given until July 20, 2012 to comply and
    to provide proof of completion, failing which he would be seen to be in breach
    of the lease.

[8]

On August 29, 2012, the property manager wrote reminding the appellant
    of the previous two letters and stating that, as the July 20 date had lapsed
    and the respondents office had not received proof of completion, the appellant
    was in breach of the lease agreement.  The property manager went on to advise
    that as of September 30, 2012, the appellants lease was terminated.  Apart
    from the failure to complete the course and provide evidence of completion, the
    respondents property manager did not specify any other grounds for termination.

[9]

On September 10, 2012, the Manager of Program Development of the Program
    Planning and Implementation Branch of the Environmental Programs Division of
    the Ontario Ministry of the Environment wrote to the appellant confirming that
    the Ontario Dry Cleaners Training Course had not been available since March,
    2012 and that the Ministry anticipated that the course would be available again
    early in 2013.

[10]

On
    October 4, 2012, a bailiff posted a notice to terminate on the door of the premises
    and changed the locks.  The notice indicated that the appellant had five days
    to remove any assets from the premises and if he failed to do so, he would be
    charged storage costs.

[11]

The
    appellant sued for damages arising from the unlawful termination of the lease
    and the respondent counterclaimed for damages flowing from, among other things,
    the appellants failure to deliver vacant possession.  The respondent then
    moved for summary judgment dismissing the appellants action and seeking
    judgment on the counterclaim.

Summary Judgment Motion

[12]

Before
    the motion judge, the appellants evidence was that the Ministry of the
    Environment had checked his premises and that, as a result, he had told the
    respondents property manager that the course was unnecessary.  Ultimately
    however, he agreed to get the certificate as requested.  He stated that he
    tried numerous times to contact the government and ultimately was advised that
    the course was unavailable.  This was confirmed in the aforementioned September
    10, 2012 letter from the Manager of Program Development of the Ministry of the
    Environment.  The appellant advised the property manager that the course was unavailable. 
    The reply affidavit of the respondent did not contradict the appellants
    evidence that he had told the property manager that the course was both unnecessary
    and unavailable.

[13]

The
    motion judge granted summary judgment to the respondent dismissing the
    appellants claim and allowing the respondents counterclaim in part by
    awarding $23,122.56 to the respondent.

[14]

The
    motion judge held that the respondent had lawfully terminated the tenancy.  This
    conclusion was based on the motion judges findings that the appellant had
    failed to provide evidence that he had taken a dry cleaning course or that he
    had a trained person working at all times on the premises.  The motion judge
    determined that the regulations governing dry cleaning businesses required this
    designation.

[15]

The
    appellant appeals from that judgment.  He argues that the motion judge erred in
    concluding that the tenancy was lawfully terminated and in finding that the
    tenancy was month-to-month.  In addition, he submits that the motion judges
    reasons were insufficient.

[16]

Before
    the motion judge and before this court, the appellant was self-represented.

Analysis

[17]

As
    the motion judge noted, the appellants claim could only succeed if the
    landlord unlawfully terminated his tenancy.  In our view, the motion judge
    erred in law in determining that there had been a lawful termination.

[18]

Subsection
    19(2) of the
Commercial Tenancies Act
,
    R.S.O. 1990, c. L.7
provides that a landlords right of re-entry
    for breach of any covenant or condition in the lease, other than in respect of
    the payment of rent, is not enforceable unless the landlord serves on the
    tenant a notice specifying the breach, and if the breach is capable of remedy,
    the tenant has failed within a reasonable time thereafter to remedy the breach.

[19]

In
    reaching his conclusion, the motion judge relied in part on the appellants failure
    to provide evidence that he had a trained person working at all times on the
    premises.  However, this was not a ground relied upon by the respondent in the
    notice of termination given to the appellant.  As noted in
780046 Ontario
    Inc. v. Columbus Medical Arts Building Inc.
(1994), 20 O.R. (3d) 457 (C.A.),
    courts considering a landlords termination of a lease have insisted upon
    strict compliance with the notice requirement in s. 19(2) of the Act.  The
    particular breach must be identified:
Mason Homes Ltd. v. Woodford
,
    2014 ONCA 816, 48 R.P.R. (5th) 1.

[20]

Furthermore,
    the motion judge failed to consider that the Regulation could be satisfied in
    one of three ways and failed to address the appellants uncontradicted evidence
    that the Ministry had checked the premises and that a course was unnecessary. 
    In essence, the appellants contention was that he met the definition of a trained
    person within the meaning of the Regulation because he had satisfied the
    Director that he was qualified to manage contaminants and wastes in connection
    with the operation of dry cleaning equipment.

[21]

The
    motion judge also failed to consider the appellants evidence that, contrary to
    the position of the respondent, the course was unavailable and the breach was
    incapable of being remedied in the time provided.  As such, the appellant, to
    the knowledge of the respondent, could not comply in the time specified.  The
    respondent therefore did not give the appellant a reasonable amount of time to
    remedy the breach before exercising its right of re-entry, as required by s.
    19(2).

[22]

Lastly,
    in oral argument before this court, the respondent submitted that the tenancy
    could have been terminated under s. 28 of the
Commercial Tenancies Act
,
    which provides for one months notice of termination for a month-to-month
    tenancy.  The problem with this submission is that the respondent never gave
    any notice relying on this provision as the basis for termination.  The only
    ground advanced was the appellants failure to take the course and to provide
    the property manager with evidence of same.

[23]

The
    appellant raised other grounds in support of his appeal, namely that the motion
    judges reasons were inadequate and that he erred in treating the appellants
    tenancy as being month-to-month.  We would not give effect to either of these
    arguments.  The motion judges reasons explained how and why he reached the
    conclusions he did, and allowed for effective appellate review.  Additionally,
    the record fully supported the finding of a month-to-month tenancy.

Disposition

[24]

For
    these reasons, we have allowed the appeal.  The summary judgment, including the
    judgment on the counterclaim, is set aside.  We are granting judgment to the
    appellant for wrongful termination of his tenancy and are remitting the action to
    the Superior Court for an assessment of any damages suffered by him.  In
    addition, we are setting aside the costs award of $10,000 in favour of the
    respondent and are remitting the costs of the summary judgment motion to the
    judge hearing the assessment of damages.

[25]

The
    appellant is awarded costs of the appeal in the amount of $1,000 inclusive of
    disbursements and applicable tax.

S.E. Pepall J.A.

K. van Rensburg J.A.

G.T. Trotter J.A.


