Canada: Case Comment: "Parsons Precast Inc. v. Sbrissa"

Last Updated: May 15 2013
Article by Jordan Hill

Following the case of RioCan Holdings Inc. vs. Metro Ontario Real Estate Limited1, the Ontario Superior Court of Justice released Parsons Precast Inc. v. Sbrissa2, another decision involving a landlord and tenant fighting over the cost of parking lot work.

The Court released Parsons, involving a similar fact situation, six months after the RioCan decision. In Parsons, Parsons Precast Inc., as tenant (the "Tenant") leased commercial space from Anna Sbrissa and Armando Sbrissa, as landlord (together, the "Landlord") in a multi-tenanted project. The lease was described as a net lease, with some of the relevant provisions regarding responsibility for repairs and maintenance being as follows:

  • "The parties hereto agree that this lease shall be a net/net lease in that the parties have agreed that this lease is a completely care-free net lease to the lessor... The lessee... shall pay its proportionate share of all expenses arising from the lessor's operation of the building in which the demised premises are located, including without limiting the generality of the foregoing, all expenses arising from... common area maintenance expenses..."3
  • "The lessee shall additionally pay monthly a proportionate share of all costs and expenses incurred by the landlord in maintaining, operating, cleaning, insuring, and repairing the property..."4
  • "The lessee will repair according to notice in writing (reasonable wear and tear, and damage by fire, lightning and tempest only excepted.)"

There was an initial three year term, beginning on November 1, 2004. The lease was renewed on two occasions, and as a result, the expiry date of the lease was ultimately extended to October 31, 2011.

In September of 2010, the Landlord provided notice to the Tenant that the Landlord had incurred expenses of $76,125 to completely repave the entire parking lot. The Landlord's notice advised the Tenant that its proportionate share of such repaving was $14,533. Payment was requested on a lump sum basis. The Tenant refused to pay this amount, and vacated the premises at the end of the term on October 31, 2011.

The Tenant brought an application for an interpretation of the terms of the lease, citing the RioCan case in support of its argument that it was not responsible for the cost of the parking lot repaving. To briefly summarize, in the RioCan case, RioCan Holdings Inc. ("RioCan"), as landlord of a commercial plaza, resurfaced the plaza's parking lot and charged its tenants, including Metro Ontario Real Estate Limited ("Metro"), a proportionate share of the cost. The total cost of the parking lot resurfacing was $431,000, which RioCan amortized over a 20 year period before charging the cost to its tenants as part of their monthly common expense charges. The lease provided that the following expenditures were payable by Metro as additional rent:

  • "The Tenant shall pay... the Tenant's proportionate share of the cost of the following services provided by the Landlord... Repairs to and maintenance of the sidewalks, paved areas, storm, sanitary, water and utility services, directional signs and landscaping... provided that the term "costs" within the meaning hereof... shall not include... expenditures which by accepted accounting practice are of a capital nature..."6

After a lengthy review of the submissions of both parties regarding the nature of the parking lot resurfacing work and the interpretation of the terms "accepted accounting practice" and "capital nature", the Court in RioCan concluded that the resurfacing work performed on the parking lot was a capital expenditure, and therefore was not chargeable to Metro as additional rent pursuant to the terms of the lease.

The Tenant in Parsons argued that the decision in RioCan was determinative. However, the Court noted that the RioCan decision turned on the Court's interpretation of the language in Metro's lease. As noted above, the RioCan lease explicitly excluded "expenditures which by accepted accounting practice are of a capital nature" from additional rent. This language was critical to the Court's conclusion in RioCan that Metro was not responsible for the cost of repaving the parking lot, as the repaving work was found to be an expense of a capital nature. The lease in the Parsons case, however, did not contain any similar exclusion or carve-out from additional rent for "capital costs" or expenses "of a capital nature." Because the leases did not share this language, the Court found that the result in RioCan could not be directly applied to the facts in Parsons.

Instead, the Court considered whether the repaving of the parking lot could properly be characterized as "maintenance", or a "repair (reasonable wear and tear... excepted)" as these were the provisions in the Parsons lease that described costs that were the responsibility of the Tenant.

The Court heard evidence that the existing parking lot was approximately 19 or 20 years old at the time that the repaving occurred. The Court determined that the deterioration of the parking lot over a period of 19 or 20 years was due to the effects of wear and tear. Therefore, although the Tenant was responsible for certain costs of repair, the repaving of the parking lot fell under the wear and tear exception. The cost of the parking lot repaving could not be charged to the Tenant as "repair."

Next the Court looked at the definition of the word "maintenance" and found that this term is used to describe the concept of "keeping the property up." The Court concluded that the parking lot, rather than being "kept up", was completely replaced, which was outside the scope of the word "maintenance", and therefore, the cost of the parking lot repaving could not be charged to the Tenant as "maintenance."

The Court concluded, "the total cost of replacing the entire parking lot is beyond what was contemplated in the tenants' obligation to pay on a monthly pro-rata basis for 'repairs (reasonable wear and tear excepted)' or 'maintenance' of the common areas."7 The Tenant was not responsible for paying the $14,533 amount to the Landlord.

It is important to note that, aside from an examination of the specific wording in the lease, the Court also looked at the manner in which the Landlord purported to charge the Tenant for the repaving cost. The Landlord billed the Tenant for its proportionate share of the total amount of the repaving cost on a lump sum basis. This was not the usual method of charging for common area costs, which were normally estimated for the year and billed on a monthly basis. According to the Court's reasoning, this lump sum billing implied that the Landlord was aware that the repaving of the parking lot was not truly a common area cost.

Further, the Court also expressed the view that even if, on the terms of the Lease, the Tenant was actually responsible for a proportionate share of the repaving cost, it would be "unfair and unjust" to charge this amount to the Tenant on an unamortized basis, when the repaving of the parking lot would add 20 years to the life expectancy of the parking lot, and the Tenant had only 14 months left in its term.

Looking at Parsons and Riocan together, landlords may feel some anxiety. However, although these two cases were each decided in favour of the tenant, this does not mean that tenants can never be charged for the costs of any major parking lot work. Instead, these decisions serve as a reminder to both landlords and tenants that the language used in the lease is critical. If a landlord expects to be able to charge its tenants for this type of work, it should ensure that its leases actually allow it. Similarly, a tenant who feels that the landlord should bear all the costs of major parking lot work should ensure that costs of this nature are clearly excluded from the tenant's responsibility, or at the very least, such costs should be amortized. A well-drafted lease can help both parties avoid unpleasant surprises down the road when it comes to the costs of parking lot work.


1 2012 ONSC 1819 (CanLII)) [RioCan].

2 2012 ONSC 6098 (CanLII)) [Parsons].

3 Parsons, ibid. at paragraph 14.

4 Ibid. at paragraph 15.

5 Ibid. at paragraph 13.

6 RioCan supra note 1 at paragraph 2.

7 Parsons, supra note 2 at paragraph 23

About Dentons

Dentons is a global firm driven to provide you with the competitive edge in an increasingly complex and interconnected marketplace. We were formed by the March 2013 combination of international law firm Salans LLP, Canadian law firm Fraser Milner Casgrain LLP (FMC) and international law firm SNR Denton.

Dentons is built on the solid foundations of three highly regarded law firms. Each built its outstanding reputation and valued clientele by responding to the local, regional and national needs of a broad spectrum of clients of all sizes – individuals; entrepreneurs; small businesses and start-ups; local, regional and national governments and government agencies; and mid-sized and larger private and public corporations, including international and global entities.

Now clients benefit from more than 2,500 lawyers and professionals in 79 locations in 52 countries across Africa, Asia Pacific, Canada, Central Asia, Europe, the Middle East, Russia and the CIS, the UK and the US who are committed to challenging the status quo to offer creative, actionable business and legal solutions.

Learn more at

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific Questions relating to this article should be addressed directly to the author.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions