



COURT OF APPEAL FOR ONTARIO

CITATION: Campbell v. 1493951 Ontario Inc.,
    2021 ONCA 169

DATE: 20210319

DOCKET: C68588

Lauwers, Trotter and Zarnett JJ.A.

BETWEEN

Courtney
    Campbell

Applicant
(Appellant)

and

1493951 Ontario Inc. and Tri-Echo
    Restaurants Inc.

Respondents
(Respondents)

Zachary Parrott and Russell Bennett,
    for the appellant

Raj Sharda, for the respondent 1493951
    Ontario Inc.

Ryan Wilson, for the respondent
    Tri-Echo Restaurants Inc.

Heard: March 15, 2021 by video conference

On
    appeal from the order of Justice Breese Davies of the Superior Court of Justice
    dated June 29, 2020, with reasons reported at 2020 ONSC 4029.

REASONS FOR DECISION

[1]

The appellant, Courtney Campbell, appeals from
    the dismissal of his claim that his sublease of commercial premises in
    Brampton, Ontario (the premises) was terminated improperly, and from the
    dismissal of his request for relief from the forfeiture of his sublease.

[2]

Mr. Campbell commenced occupying the premises in
    January 2019, under what the application judge found was an oral sublease granted
    to him by the tenant of the premises, the respondent Tri-Echo Restaurants Inc.
    (Tri-Echo).

[3]

Tri-Echos lease required business conducted on
    the premises to comply with federal, provincial, and municipal law. The
    application judge found that, as a subtenant, Mr. Campbell was bound to comply
    with that obligation.

[4]

Mr. Campbell operated 1Tonamara Cannabis
    Boutique, a cannabis store, on the premises. He did so without either a licence
    or any valid exemption from the licensing requirements under the
Cannabis
    Control Act, 2017
, S.O. 2017, c. 26,
    Sched. 1
and the
Cannabis Licence Act, 2018
, S.O. 2018, c. 12, Sched. 2
.

[5]

In July 2019, the respondent 1493951 (149) purchased
    the property on which the premises were located and became the head landlord.

[6]

In August 2019, 149 gave notice that Tri-Echo
    was in breach of its lease because the premises were being used for the sale
    and distribution of cannabis without a licence. The notice gave 10 days to
    rectify the breach, failing which 149 would repossess the premises. Doing so
    would terminate Tri-Echos lease and, as a consequence, Mr. Campbells
    sublease.

[7]

Although the cannabis store continued to
    operate, 149 did not act on the notice until April 21, 2020. On that date, following
    a police raid of the premises, 149 changed the locks and retook possession, purportedly
    terminating the lease. 149 did not issue a fresh notice of default before doing
    so. 149 accepted payments of rent between the August 2019 notice and the April
    2020 retaking of possession.

[8]

The application judge rejected Mr. Campbells
    argument that 149 was not entitled to terminate the lease (and thus the
    sublease) and retake possession in April 2020 without issuing a fresh notice
    and giving further time to cure the default. She found that, following the
    August 2019 notice, 149 had been misled by information provided by Mr. Campbell
    that he had a valid exemption from licensing requirements and thus could
    lawfully run a cannabis store on the premises. She found that 149 did not act
    earlier to terminate the lease in reliance on that misleading information. She
    concluded that it was only when the police advised 149 in April 2020 that no
    licence or exemption existed for the premises that 149 came to understand that
    it had been misled. The application judge held that 149 was entitled at that
    point to act on the original notice, which had clearly indicated that 149 was
    not prepared to continue the lease if the cannabis store was operating illegally.

[9]

Mr. Campbell argues that the application judges
    conclusion that 149 was entitled to act on the August 2019 notice was
    unjustified. He submits that it rests on the premise that Mr. Campbell
intentionally
misled 149. Although he concedes (at least in this court) that he had no
    licence or exemption, Mr. Campbell argues that at the relevant time he believed
    he was entitled to an exemption and therefore did not
intentionally
mislead
    149 when he provided information that he had a lawful exemption. He submits
    that the application judge should not have made a finding adverse to his credibility
    on an application.

[10]

We reject this argument. The application judge
    did not premise her conclusion  that 149 was not obligated to issue a further
    notice before retaking possession and terminating the lease  on a finding that
    Mr. Campbell had
intentionally
misled 149. Nor was it necessary for her
    to make such a finding.

[11]

The issue before the application judge was
    whether, by reason of the delay in proceeding under the August 2019 notice and the
    acceptance of rent, 149 had waived the breach of lease referred to in that
    notice, thus requiring 149 to issue a fresh notice in April 2020.

[12]

A waiver involves a knowing relinquishment of
    rights.

Waiver will be found only where
    the evidence demonstrates that the party waiving had (1) a full knowledge of
    rights; and (2) an unequivocal and conscious intention to abandon them
:
Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance
    Co.
, [1994] 2 S.C.R. 490 at para. 20. The application judge was entitled
    to find that since 149 was misled by Mr. Campbell into believing that an
    exemption existed for his business, the requirements for a waiver were not
    established and  the waiver argument could not succeed. Mr. Campbell was the
    source of the misleading misinformation. It did not matter whether he believed
    it.

[13]

Mr. Campbell also argues that, even if the lease
    was properly terminated in April 2020  (ending the sublease with it), the
    application judge erred in not granting relief from forfeiture. He contends
    that, in denying that relief, the application judge inappropriately relied on a
    finding that Mr. Campbell had provided intentionally misleading information to
    149 about the existence of an exemption.

[14]

We also reject this argument.

[15]

The application judge was entitled to reject the
    request for relief from forfeiture based on the factors set out in
Saskatchewan
    River Bungalows
at para. 32. Those factors include the seriousness of the
    breach; the reasonableness of the defaulting partys conduct; and, the
    disparity between the value of the forfeited property and the damage caused by
    the breach. The application judge considered each factor. Her rejection of the
    request for relief from forfeiture was not dependant on a finding that Mr.
    Campbells information to 149 was knowingly deceptive.

[16]

Further, the application judge was not required
    to accept the argument that relief should have been granted to allow Mr.
    Campbell to operate a non-cannabis business on the premises. She was entitled,
    based on the record before her, to reject the suggestion that he had, and would
    operate, a bakery business unconnected to the cannabis business.

[17]

For these reasons the appeal is dismissed.

[18]

The respondents are entitled to costs payable by
    the appellant in the sum of $6500 each, inclusive of disbursements and
    applicable taxes.

P.
    Lauwers J.A.

Gary
    Trotter J.A.
B. Zarnett J.A.


