The tenant utilized the rented premises as a hair salon
specializing in "African hairstyling." The lease
contained no express restriction on the business that could be
conducted, and the tenant decided to begin offering
additional (non-African) hair styling services, as well as
nail, massage and tanning services.
The landlord — which had other tenants whose businesses
would be compromised by this proposed expansion of services –
sought to impose new restrictions on the tenant's advertising
and provision of its expanded services.
Both the trial judge and the Court of Appeal found
that the landlord's attempt to impose this new and
unbargained-for restriction on the tenant's rights constituted
a repudiation of the lease — i.e.,
the landlord's conduct amounted to a "fundamental
breach...going to the very root of the contract," and
indicating the landlord's intention to deprive the tenant of
the essence of their agreement.
This repudiation by the landlord gave the tenant the right to
elect between (i) accepting the repudiation and
terminating the lease, or (ii) rejecting the repudiation
and leaving the lease in place:
The tenant claimed that he had accepted the repudiation,
thereby ending the tenancy, with the result that he owed no further
moneys to the landlord under the lease.
The landlord argued that, because the tenant did not explicitly
and within a reasonable time accept the repudiation — and
because the tenant had acted in a manner consistent with a
continuation of the landlord-tenant relationship — the lease
remained in place. On this basis, the landlord argued that the
tenant's refusal to pay further rent constituted an actionable
breach of contract.
The Court of Appeal sided with the tenant, and confirmed that
"an innocent party is not required to communicate its
acceptance of a repudiation immediately. An innocent party
must have a reasonable opportunity to assess the circumstances it
finds itself in, to assess its options, and to explore the
possibility of resolving the situation."
More specifically, continued negotiations between the tenant and
the landlord did not constitute an affirmation by the
tenant of the tenancy agreement, and were not inconsistent with the
tenant's subsequent acceptance of the repudiation.
Because the tenant vacated the premises once it became clear
that the landlord was adamant about imposing the new restrictions,
the tenant's communication of its acceptance of the repudiation
was effective. The lease had been thereby terminated, and the
landlord could not sue for upaid rent or other losses.
The tenant, on the other hand, was permitted to sue for those
damages caused to it by the landlord's conduct.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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