IT’S THE LAW – By Tyler B. Dennis

What would you do if you were the judge? Judges decide the facts based on evidence put before them, and then apply the law. Here is a fact pattern. How would you decide who was at fault? Fact patterns similar to this one are often presented in court and assessed by judges. Test your judgment!

Home Sweet Home?

Cindy Lou lived in the Village of Whoville, in northern B.C. and wanted to open a child care centre. Eventually, she found a shopping centre (the “Property”) with available space. Cindy Lou met the property owner, the Grinch, in March 2017 and negotiated and signed an offer to Lease. The offer to lease included a move-in date of August 2017. It also contained a requirement for the Grinch, as landlord, to complete various renovations to the Property to bring it up to code for the Village of Whoville (the “Offer”).

In September 2017 a Lease was finally signed. The delay was due to trying to obtain permits from Whoville. The Lease encompassed all representations made by the Grinch and set out his responsibilities as Landlord including supplying and installing a skylight, HVAC, flooring and plumbing (the “Lease”). Renovations commenced and finally in March 2018 they were completed, and Cindy Lou opened her child care centre.

After opening, a dispute arose over costs. During construction Cindy Lou, and not the Grinch, had paid the contractors who performed the Grinch’s obligations as set out in the Lease. After many attempts to recover payment, Cindy Lou sued the Grinch in the British Columbia Supreme Court (“BCSC”) for damages for lost revenue due to the delay in opening, and breach of contract by the Grinch. In addition, she sought recovery of fees paid to contractors that performed the Grinch’s obligations. The Grinch filed a counter-claim against Cindy Lou for costs associated with bringing the building up to code and what he considered to be overpayment for HVAC installation.

If You Were the Judge, How Would You Decide?
The Judge ruled that Cindy Lou’s claim for lost revenue due to the delayed move-in was not the Grinch’s fault. The Judge found that when the Offer was signed, no permits or plans had been sought or presented to Whoville by Cindy Lou. Additionally, when the Lease was signed in September 2017, it was clear the move-in date would not be met, and Cindy Lou still signed the Lease. The Judge found the terms of the Offer were not binding on the Grinch as they had been modified and superseded by the terms of the Lease, and by signing the Lease, Cindy Lou acknowledged this.

The Judge found that the contractor bills fell within the scope of work set out in the Lease, and as such were the Grinch’s obligation. The Judge ruled payment was the responsibility of the Grinch and ordered that the Grinch repay Cindy Lou for all the contractors’ expenses she had paid, but only for those expenses that fell within the scope of obligations specifically listed in the Lease. Any others were dismissed.

Finally, the Judge dismissed both counter-claims of the Grinch. The Judge stated the HVAC installation costs were the Grinch’s obligations under the Lease, and regardless of the amount owed, payment was required by the Grinch. The Judge also ruled the entire Offer and Lease were premised on having the Property up to code, or Whoville would not grant a permit. Thus, by agreeing to it in the Offer, the Grinch was obligated to see this through, or the Lease signed later would never have been able to be implemented. 

Tyler B. Dennis is a lawyer who practices in Cloverdale with the firm MacMillan Tucker & Mackay at 5690 – 176A Street, Cloverdale (Surrey), B.C. At MacMillan Tucker & Mackay, lawyers are available to answer questions about wills and estates, ICBC claims, personal injury, professional negligence, family matters and other issues. If you require legal assistance, please call (604) 574-7431 to book an appointment.

MacMillan Tucker

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Surrey, BC V3S 4H1


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