Baker's Dozen Holding Corporation v. Doovsal Properties Inc.

Baker's Dozen Holding Corporation v. Doovsal Properties Inc. Collection Decisions of the Court of Appeal Date 1999-11-29 Docket numbers C32095 Judges Finlayson, George Duncan; Weiler, Karen Merle Magnuson; O’Connor, Dennis Subject Civil Decision Content DATE: 19991129 DOCKET: C32095 COURT OF APPEAL FOR ONTARIO RE: BAKER’S DOZEN HOLDING CORPORATION (Appellant) –and– DOOVSAL PROPERTIES INC. (Respondent) BEFORE: FINLAYSON, WEILER and O’CONNOR JJ.A. COUNSEL: Tony Van Klink, for the appellant Lawrence F. Wallach, for the respondent HEARD: November 23, 1999 On appeal from the order of the Divisional Court (O’Leary, Lofchik and Matlow JJ.A.) dated January 18, 1999. ENDORSEMENT [1] This appeal arises from a landlord and tenant relationship. The respondent landlord entered into a lease with the appellant tenant who, in turn, entered into a sublease with its franchisee. The tenant had a dispute with its franchisee and sub-tenant that resulted in non-payment of rent. As a result of the non-payment of rent, the landlord terminated the lease of the appellant. [2] The appellant brought an application in January 1998 for relief from forfeiture of its lease with the respondent. The respondent filed an affidavit in response. The appellant wished to cross-examine the respondent on its affidavit and requested an adjournment in order to do so. It was granted and the record was endorsed as follows: At request of Baker’s Dozen matter is adjourned to permit cross examination on affidavits with a view to determining, inter alia, who is/are the tenant(s). As a condition of the adjournment arrears of rent of $17,161.80 as of 98.02.01 are to be forthwith paid to the landlord, i.e. on or before 98.02.10. Costs of today reserved to disposition (illegible) return date 98.02.19. [3] Baker’s Dozen abandoned its application for relief from forfeiture and did not make the payment. On the return of the motion, Belleghem J. ordered Baker’s Dozen to pay Doovsal $8,119.31 as arrears of rent for December and January. An appeal to the Divisional Court was dismissed by O’Leary J. with Lafchik J. agreeing; Matlow J. dissenting. [4] We agree with the dissenting judge, Matlow J., when he said: In my view, the order made by Langdon J. imposed an obligation on the appellant to make the specified payment to the respondent as a condition of remaining entitled to proceed with its application on the new return date. It did not impose any liability on the appellant merely in return for the granting of the adjournment. … The appellant retained the right not to satisfy the condition imposed, namely, the making of the stipulated payment, with the resulting consequence that it would not be permitted to proceed with its application. [5] The effect of this reasoning is that, in the absence of a cross-application or an admission of liability, the respondent was not entitled to any judgment. [6] Accordingly, the appeal is allowed, the judgment of the Divisional Court is set aside as is paragraph 1 of the judgment of Belleghem J. The respondent is entitled to its costs of the abandoned application awarded by Belleghem J. in the amount of $2,250. The appellant is entitled to costs of this appeal and in the Divisional Court to be assessed. Signed: “G.D. Finlayson J.A.” “K.M. Weiler J.A.” “Dennis O’Connor J.A.”