



COURT OF APPEAL FOR ONTARIO

CITATION: Vigin G.F.R. Holdings Ltd. v. Kinder Care
    Childrens Centre, 2020 ONCA 120

DATE: 20200213

DOCKET: C65613

Feldman, Brown and Harvison Young JJ.A.

BETWEEN

Vigin G.F.R. Holdings
    Ltd.

Plaintiff (Respondent)

and

Kinder Care Childrens Centre, Strong Foundation
    Inc., Kevin ONeill and Andrea ONeill

Defendants (Appellants)

David Fogel, for the appellants

Michael Arbutina and Sam De Caprio, for the respondent

Heard: January 23, 2020

On appeal from the judgment of Justice Bryan Shaughnessy
    of the Superior Court of Justice, dated April 16, 2018, with reasons reported
    at 2018 ONSC 2429.

REASONS FOR DECISION

Overview

[1]

The appellants, Kinder Care Childrens Centre, Strong Foundation Inc.,
    Kevin ONeill, and Andrea ONeill, appeal from the trial judgment finding them
    liable for damages arising from their abandonment of a 10-year commercial lease
    entered into with the respondent, Vigin G.F.R. Holdings Ltd. (the Lease). The
    appellants do not appeal the damages awarded by the trial judge; their grounds
    of appeal are limited to his findings of liability.

[2]

At the start of the hearing of the appeal, the appellants moved for
    leave to adduce fresh evidence. They also requested an adjournment to review
    documents recently obtained. Oral reasons were given at the hearing dismissing
    the motion because the proposed fresh evidence did not meet the criteria in
Palmer
    v. The Queen
, [1980] 1 S.C.R. 759, and denying the adjournment request.

[3]

The appellants grounds of appeal can be grouped into two categories.

First Ground of Appeal: Was
    Kevin ONeill a Tenant under the Lease?

[4]

The appellants submit that the trial judge erred in finding that Kevin
    ONeill was a tenant under the Lease. The Lease described the Tenant as:
    Kinder Care Childrens Centre and Strong Foundation Inc. and or - Kevin &
    Andrea ONeil. That description of the Tenant was used throughout the Lease,
    including on the signature page. Below that identification of the Tenant on
    the signature page appeared the signatures of Andrea ONeill and K. ONeill
    (President).

[5]

The appellants contend that the Leases description of the Tenant was
    ambiguous. They argue that the trial judge erred in holding that there was no
    ambiguity and in failing to consider the appellants intention regarding the
    parties to the Lease.

[6]

We are not persuaded by this submission. At para. 33 of his reasons, the
    trial judge wrote:

I find that the Lease was a common commercial lease and signed
    by the parties bargaining in good faith. The factual matrix establishes, and I
    find as a fact, that the parties all had past experience negotiating and
    signing commercial lease agreements and business contracts. I further find no
    ambiguity in the Lease, notwithstanding the arguments the Defendants advance.
    The Defendants had an opportunity to negotiate the rent, the ten-year term, and
    were asked to sign the Lease as Tenants. They entered the Lease after
    inspecting the property and investigating if the Premises were suitable for
    Kinder, a childrens day care centre.

[7]

The appellants have not demonstrated any palpable or overriding error in
    those findings.

[8]

The appellants renew their submission that the language of the Lease was
    ambiguous in specifying who the Tenants were and argue that the trial judge
    erred by failing to consider parol evidence on that issue. They contend that
    such evidence would lead to the conclusion that Kevin ONeill had not signed the
    Lease in his personal capacity. As noted above, we see no error in the trial
    judges finding that the Lease was not ambiguous. In any event, the trial judge
    did go on to consider the evidence of the parties understandings about who the
    Tenants were.

[9]

The trial judge stated, at paras. 24 and 36 of his reasons:

In cross-examination, Kevin agreed that he executed the Lease
    in his personal capacity. This evidence went uncontested and the Defendants
    have not directly addressed this admission in their closing submissions. In
    addition, Kevin admitted to using the Premises to store his personal items of
    value both in the yard and the building, including an antique fire truck and a
    collection of classic automobiles.



Even after examining the factual matrix, I am satisfied on a
    balance of probabilities that the Defendants signed the Lease knowing full well
    that they were signing personally as Tenants. I accept the Plaintiffs
    evidence that their intent, and the purpose and intention of the language used
    in the Lease was to ensure that the Defendants would all bear responsibility
    under it.

[10]

The appellants cannot point to any palpable and overriding error in
    those findings. Indeed, on the cross-examination of Kevin ONeill the following
    exchange occurred:

Q: And beside your name here, Kevin ONeill, you initially
    signed that in your personal capacity as Kevin ONeill?

A: Yes.

Q: You didnt insert the words, President?

A: I did not put that. That, that is not my handwriting. No, I
    didnt put that.
[1]

[11]

In light of that evidence and the factual findings made by the trial
    judge, we see no basis for appellate intervention in his conclusion that the
    tenants under the Lease included Kevin ONeill.

Second Ground of Appeal: Permitted
    Uses of the Premises

[12]

The appellants abandoned the premises about 1.5 years into the 10-year
    Lease. They did so after receiving a letter from the City of Vaughan stating
    that a site inspection of the premises had disclosed a contravention of that
    portion of the municipal zoning by-law that prohibited open storage of goods
    or materials on any corner lot. Kevin ONeill testified that he planned to use
    the yard to store Strong Foundations equipment and materials. The appellants
    contend that such storage was a permitted use under the Lease and Vaughans
    letter preventing such storage resulted in a fundamental breach of the Lease
    that justified the appellants abandonment of the premises.

[13]

Section 5(1) of the Lease stated: During the Term of this Lease the
    Premises shall not be used for any purpose other than DAY CARE CHILDRENS
    CENTRE AND COMPANYS ADMINISTRATION OFFICE without the express consent of the
    Landlord given in writing. Section 5(2)(e) stated: The Tenant shall not do or
    permit to be done at the Premises anything which may: [] (e) constitute a
    breach of any by-law, statute, order or regulation of any municipal, provincial
    or other competent authority relating to the Premises.

[14]

The trial judge considered each of the appellants arguments, which they
     again raise on appeal: (i) the use of the Premises yard for outdoor storage
    was an implied term of the Lease; (ii) the Lease was fundamentally breached
    when the yard could not be used for outdoor storage; and (iii) the parties made
    a mutual mistake regarding the use of the yard space.

[15]

The trial judge gave extensive reasons for not accepting the appellants
    submissions, holding that:


i.

the appellants had not identified any ambiguity in the Leases language
    pertaining to permitted uses: at para. 82;


ii.

the evidence did not support a finding that outside storage was an
    implied term of the Lease: at paras. 85-88;


iii.

the appellants were aware of their responsibility to conduct due
    diligence about permitted uses but failed to do so: at para. 93;


iv.

the appellants were not entitled to rely upon their own mistake about
    uses permitted under municipal by-laws to re-allocate zoning risk to the
    respondent landlord: at para. 148;


v.

since there was no evidence of any discussion between the parties as to
    whether outside storage was a permitted or legal non-conforming use under the
    by-law, it could not be said that both parties assumed outside storage was a
    permitted use: at para. 144; and


vi.

the appellants had not established that the by-law prohibited outside storage:
    at para. 116.

[16]

We see no error in the legal principles the trial judge applied to make
    those findings nor have the appellants demonstrated any palpable and overriding
    error in respect of those findings.

Disposition

[17]

For the reasons set out above, the appeal is dismissed.

[18]

The appellants shall pay the respondent its costs of the appeal fixed in
    the amount of $15,000, inclusive of disbursements and applicable taxes.

K. Feldman J.A.

David Brown J.A.

A. Harvison Young
    J.A.





[1]

Andrea O'Neill, Kevin O'Neills wife, testified that she
    printed the word President on the signature line: see para. 47 of the trial
    judges reasons.


