Anti-Black Racism - Commercial Leases

Elias Restaurant v. Keele Sheppard Plaza Inc., 2020 ONSC 5457

Elias Restaurant is a commercial tenant running a family owned and operated restaurant business. It was not in breach of its lease when it was forced to bring an injunction and a motion for relief from forfeiture.

The facts of the case are quite simple:

The tenant became overholding and thus was paying an accelerated sum of rent during that period, following failed communications with a new landlord to renew its lease for an additional five year term.

Following the tenant’s arrival at the premises and subsequent $150,000.00 worth of renovations within the premises, the Plaza was acquired by a new owner. The new owner required that all leasing inquiries and communications be communicated to the property management firm it employed.

The tenant failed to provide written notice of an intent to renew the lease; however, the owners had repeatedly telephoned the landlord and property management company in order to state their interest in renewing the lease. They continued those efforts following the cut-off period.

The landlord simply did not wish for Elias Restaurant to renew; they were biased against the tenants and identified a dislike for the business and the owners. In fact, in their affidavit testimony, despite attesting to the owners as being good people, the landlord identified that the type of business was not attracting the type of clientele that the landlord wished; further, the landlord stipulated that other tenants in the plaza complex would also benefit if the restaurant was no longer in operation. Instead, the landlord wished to lease the premises to a doctor’s office and had entered preliminary negotiations with the prospective tenant. The new lease terms included rents far lower than what Elias Restaurant had been paying and was paying as part of the overholding accelerated provision requirement.

Justice Morgan agreed with the tenant and found that the balance of convenience weighed in favour of the tenant not the landlord and there would be no prejudice to the landlord. Indeed, both relief from forfeiture were granted as was the injunction.

Part of the analysis and importance of this case rests with the arguments that the tenant raised regarding anti-black racism and its overreaching influence on the conduct of the landlord. The court emphasized that anti-black racism is not a matter open for debate among reasonable people and took judicial notice of it as a sociological concern and real issue faced by this racialized community. An analysis of the case reveals how the courts have evolved to incorporate into legal analyses the social considerations of discrimination and influences parties impose in their dealings with one another. In this case it was a commercial lease.

The landlord simply did not wish to have the restaurant as a tenant, but explained no bases for same, absent identifying that the tenant had not followed the strict provisions of the lease renewal provision. From an economic standpoint there would be greater prejudice to the landlord if this tenant had been evicted, but the landlord did not seem to concern itself with that fact - they simply wanted the tenant out the space.

The shift to considerations and notice of sociological influences impacting parties’ behavior and conduct has an important and welcome application in judicial decisions across Ontario and in the Supreme Court.

This case has not been appealed.