Evergreen’s argument that rent payable from the start of the lease was abated is based on Article 6.10 of the lease, which read:
“If the demised premises shall not be available for occupancy by the Tenant upon the date of commencement of the term hereby demised, the rent under this lease shall abate until the demised premises are available for occupancy and the Landlord shall not be liable in any way for the consequences of occupancy not being available to the Tenant upon the date of commencement.”Evergreen also said it was agreed that rent would be “deferred” and not payable until the respondent obtained a licence to produce cannabis, which occurred in March 2017, and since then rent has been paid in full. According to the company, all property taxes and insurance premiums have been paid and none are due or outstanding. In its amended response in March, Evergreen stated: “occupancy of the premises was not possible until August 22, 2017, at which time an occupancy permit was issued.” As a result, Evergreen now says no rent was due to be paid until August 2017, when it received an occupancy permit and the company paid rent from March through July 2017 pursuant to Justice Cole’s order when it should not have. Evergreen also requested relief from forfeiture if MacKenzie agreed with Illingworth “because of the dire consequences a loss of the premises would have for Evergreen’s business.” “Conversely, Evergreen submits in its response that if relief from forfeiture was granted, Mr. Illingworth ‘would continue to enjoy the substantial income from the Premises for which he bargained when he agreed to the Lease,'” MacKenzie wrote. Evergreen also argued the lease did not expire until Dec. 31, 2019. In the alternative, if the lease did expire at the end of 2018, Evergreen maintained it was and entitled to a renewal for a further term of five years, as the company provided Mr. Illingworth with its notice to renew as stipulated in the lease. Evergreen also submitted that the present claim is an abuse of process because Illingworth has filed a separate civil claim alleging he is entitled to a share of Evergreen’s business. Findings In his judgment, MacKenzie wrote given the totality of the evidence, “he has no hesitation in concluding that as of January 1, 2014, the premises were “available for occupancy” and, further, that Evergreen was in “occupancy” and benefited from that occupancy throughout the alleged abatement period.” “I further find that Evergreen was not deprived of a benefit it could reasonably have expected to receive at that time. As a result, there was no abatement of rent and Evergreen is in default of the Lease by not paying the full rent due from January 2014 to March 2017, MacKenzie wrote. “As the lease stipulates that interest is to be paid on any outstanding arrears, in my view Evergreen is indebted to Mr. Illingworth in the principal amount plus interest. However, this petition only seeks a writ of possession. Any claim for compensation must await a separate application.” MacKenzie did not see merit in Evergreen’s abuse of process argument. MacKenzie also found he was satisfied that the reference to a termination date of Dec. 31, 2019, was a “simple error” and the lease expired on Dec. 31, 2018. He did not grant relief from forfeiture as the “lease has expired and has not been renewed” “I will add, for the sake of completeness, that even if relief from forfeiture were possible in the circumstances, I would not be persuaded Evergreen should be granted this equitable remedy in light of the extent of its unlawful failure to pay rent for three years of a five year lease,” MacKenzie said in the judgment. “Finally, Evergreen says it still has an argument that it properly gave notice in 2018 it intended to renew the lease for another five years, and is therefore entitled to that renewal unless it was “habitually in default” of its obligations under the Lease. I find Evergreen’s unlawful failure to pay over three years of back rent amounts to habitual default. As a result, Evergreen is not entitled to a renewal.” To read the full judgment, click here.