August 8th, 2017

Superior Court Enforces Commercial Lease Indemnity Given To Canada Lands Company

On July 28, 2017, the Superior Court granted an application brought by Parc Downsview, a subsidiary of Canada Lands Company, to enforce a commercial lease indemnity against Penguin Properties. Penguin is a commercial real estate firm headed by Mitchell Goldhar, a prominent developer of Wal-Mart SmartCentres across Canada. Jonathan Lisus and Zain Naqi represented Parc Downsview.

The case concerned a lease executed in 2012 by a tenant of Downsview Park for which Penguin provided an indemnity. Following repeated refusals by Penguin to honour the indemnity, Parc Downsview commenced an application seeking its enforcement. Pengiun opposed the application. It alleged that Mr. Goldhar had been ‘induced’ to enter into the indemnity based on misrepresentations made to him in 2012. Justice Lederer of the Superior Court rejected the misrepresentation claim in its entirety and ordered the full amount owing under the indemnity. His Honour found that no actionable representations were communicated to Mr. Goldhar and that the misrepresentation claim was precluded by the parties’ written agreement. Justice Lederer held that there was “no evidence to suggest that any specific undertaking was made” other than the “unsupported statements of Mitchell Goldhar” and “no substantive content to the representations alleged to have been made to Mitchell Goldhar.” His Honour roundly dismissed Penguin’s argument that a trial was required to deal with its misrepresentation claim. The Court’s decision affirms long-standing principles on the law of oral representations and the need to respect written agreements between sophisticated commercial parties. Click here to read a copy of the decision: Parc Downsview Park Inc. v. Penguin Properties Inc., 2017 ONSC 4533