Going to court is stressful, even for lawyers
I recently had the “pleasure” of going to court on behalf of our law firm. We had a significant contractual disagreement with our landlord at 247 Provencher, over what amounts were due for rent and whether these amounts could be back dated. I won’t bore you with all the details, other than to say that we had a series of verbal agreements (which were then confirmed by way of emails). The landlord took the position that (presumably because no formal lease had been signed) he could charge any amount he wished, and could back date those amounts to the 1st of January 2019, which was the end of the last formal lease.
The court case was not to determine what amounts were owed, but whether the landlord could exercise certain remedies they enjoy at law. I will share my experience, but before I do, I need to provide some background information about the legal landscape.
Residential tenancies v Commercial tenancies
While most people are familiar with residential tenancies, the rules applying to these leases are quite recent. The relationship between landlords and residential tenants are governed by provincial laws. In Manitoba, the Residential Tenancies Act creates the Residential tenancies branch; rules everyone must play by. In a commercial context, these rules do not apply. Rather, leases are contracts and the parties (landlord and tenant) are free to negotiate any term they wish. You can read about the topic in one of my previous posts here.
The laws governing landlords and tenants go back to the Magna Carta in our legal system (approx. the year 1000). Common law developed in England to protect landowners, so it’s no surprise that the law governing the relationship between landlords and tenants is complex.
As outlined above, leases are essentially contracts between land owners and tenants allowing tenants to occupy land or space in exchange for rent. Normally, under contract law, if a disagreement arises the aggrieved party can either attempt to negotiate a solution with the other party or go to court to have a judge make a determination based on the language of the contract. However, unlike ordinary contract law, land owners enjoy a number of other remedies which include the right to re-enter and take possession, thus locking the tenant out or the right to seize the tenant’s assets as security for payment. Landlords can exercise these rights without obtaining a court order.
While this may seem heavy handed, it does make sense in most situations. If a tenant stops paying rent and simply leaves in the middle of the night, without these rights, a landlord would be forced to apply for a court order each time this happens (and it happens often enough in the commercial context). This would not be efficient and would make “landlord-ing” expensive.
Unfortunately, it also gives a landlord significant leverage when negotiating with a tenant. If a tenant doesn’t agree with the landlord and is renting the space on a month to month basis, the landlord could impose steep increases, leaving the tenant in a vulnerable situation in the short term. Finding a new location can be challenging at the best of times.
So what happened and how did we get there? It started last year when the landlord wanted to increase our rent at the end of our lease. We exchanged several letters but were unable to reach an agreement. As we had been in that location since 1996, I was sure that we could eventually settle on terms. I met with the landlord several times and agreed on interim terms while attempting to negotiate a formal lease. Over the intervening months, the relationship became more and more antagonistic. The landlord’s demands increased, and my desire to accommodate them decreased. Finally, in July, the landlord made demands that I was not willing to accept in the long term. While I agreed to pay them for the following months, we agreed that I would be given some time to find a new suitable location which we did (our new location at 204 -131 Provencher Blvd).
Once I advised the landlord that I had an offer on the table, any semblance of cordiality disappeared. I received a notice that I owed additional sums for back rent. When I challenged him, I received a demand letter asking for even further sums. He gave me one week to pay or he would take legal action. He imposed a deadline of 11 a.m. on the following Tuesday.
Decision to go to court
While I was not surprised to receive the demand letter, I hadn’t fully considered all of the landlord’s options. So I did some research and realized that he could lock us out or seize our assets without notice. I would then have to apply to court for an order permitting re-entry or ordering the return of our assets. Obviously, this could create serious problems, not the least of which is our obligation to safeguard client information and property. While, in they end, a court may have found the landlord exercised his rights unlawfully, the damage would have already been done.
It took a day or two for me to fully understand the implications of the landlord’s threat. I received the demand letter on Tuesday. By Thursday, I was starting to understand the threat’s implications. I started phoning around to some of my colleagues who practice litigation. I now had 2 to 3 working days left to get in front of a judge. As time was flying, my contacts were unable to commit to taking the file. I found out later that some lawyers charge around $25,000.00 for a short notice injunction. On Thursday night, Cheryl, my spouse, suggested I do it myself. While I have little experience with civil litigation, I used to practice criminal defence. Going to court was not a problem, however, I was not familiar with the rules of civil procedure which can be complicated (I found out through this process that they are more complicated than I initially thought!).
Getting a court date
One of my colleagues and class mates, James Benson, agreed to provide guidance in navigating the rules of the court (civil procedure), and provide advice on formatting the materials to be filed. That weekend, rather than spending time with my brother-in-law and nephew who were in town from Vancouver, I worked about 18 hours putting together the materials to file. On Monday morning, I contacted the court and asked for an emergency court hearing in French. At first I received some push back, (the court needs time to translate the documents, and was this truly an emergency?). But, after writing a letter to the Chief Judge of the Court of Queen’s Bench, Justice Joyal, I was given a court date the next day at 10 a.m. (an hour before the deadline imposed by the landlord). I spent the rest of Monday finalizing my materials and managed to file everything by 2:30 p.m.
We got out court date just in time. I will write about the court experience in my next article. However, as this is not a Netflix episode, I won’t leave you wondering what happened in court. The judge awarded an initial injunction at 10:55 a.m. We received a short reprieve…
Philippe Richer is President of TLR Law Group. TLR has been located in the St. Boniface neighbourhood, in Winnipeg, since 1996. The office serves the middle class and small business within the province. With a focus on estates, wills, real estate, and corporate law, he leads his team in providing accessible legal services. Philippe also authored the business law course for the Knowledge Bureau and instructed the français juridique class at the faculty of Law at the University of Manitoba.