Tierney Stauffer LLP Lawyers

Awareness of anti-Black racism and discrimination has dramatically spiked over the past year throughout Canada and across the border. Such awareness has left its mark in nearly every facet of our lives as well as Canadian courts, which have taken note, or rather, “judicial notice”, of the relevance of anti-Black racism in legal matters. In a recent Ontario Court of Appeal decision concerning a commercial landlord-tenant dispute, 8573123 Canada Inc. (Elias Restaurant) v. Keele Sheppard Plaza Inc., the Court found that the application judge rightfully determined that anti-Black racism was relevant to the matter at hand, namely, the landlord’s refusal to negotiate a renewal of the lease. The Court of Appeal’s decision is significant for the determination that judicial notice of racism is warranted, notwithstanding whether the landlord’s actions were in fact consciously motivated by racism.

Racially Motivated Commercial Lease Dispute

This case involves a five-year term commercial lease to a family-owned restaurant that catered to the Afro-Caribbean community. At the end of the five-year term, the landlord sought to terminate the restaurant’s tenancy because the tenant failed to provide timely written notice of its intention to exercise an option to renew the lease. In May 2020, the landlord effectively terminated the lease, seeking to replace the restaurant with a more “suitable” business, namely, a doctor’s office. At the application hearing, the relevance of anti-Black racism in the case became more obvious. The landlord further submitted at trial that the restaurant was “unattractive”, and that its business did not appeal to “family-oriented customers”.

The application judge, contrary to the landlord’s submissions, found that the restaurant had in fact initiated the lease renewal process. The restaurant owners attempted to contact the landlord and property manager before and after the option exercise date, but the numerous calls were avoided by the landlord. The trial judge, therefore, found, among other conclusions, that the tenant was not in breach of the lease.

Furthermore, and perhaps most importantly, the application judge found that the landlord’s affidavits were “almost a caricature of racially derogatory themes,” concluding that the landlord followed incoherent logic by arguing that a family-run business was not family-oriented and that a lucrative business, despite COVID-19 restrictions, was not lucrative enough. As such, the judge took judicial notice of anti-Black racism, finding that it was relevant in the case, regardless of whether the landlord’s actions were consciously motivated by racism. 

Judicial Notice of Anti-Black Racism in Canada is Warranted

Among the key issues on appeal was the application judge’s judicial notice of anti-Black racism. The Court of Appeal considered the evidence in the case as well as the application judge’s use of the evidence in determining whether the anti-Black racism submissions were warranted. The Court underscored that the language in the landlord’s affidavits pointed to stereotypical labelling. As such, the Court concluded that the “application judge was entitled to take judicial notice of anti-Black racism in Canada.”

The Court of Appeal agreed with the lower court’s finding that notwithstanding the conscious or unconscious nature of the stereotyping and racism, this was a matter that should be taken into account when determining whether to grant the tenant injunctive relief.  In its decision, the Court of Appeal cited the application judge, reminding the parties that “the societal realities pertaining to Black businesspeople like the Tenants must be factored into the exercise of the Court’s discretion in considering equitable remedies like injunctions and relief from forfeiture.”

Indeed, the landlord’s submissions showed signs of racism, yet a large part of the Court’s determinations rested on surrounding factors. The Court considered whether the landlord would suffer prejudice in renewing the lease and whether the tenant would suffer significant damage to its business if the lease were terminated. The application judge had determined that the landlord would not suffer prejudice if the lease were renewed, but that the tenant would suffer significant prejudice if the lease were terminated. The Court also considered whether the tenant acted in good faith and demonstrated its intention to renew the lease prior to the expiry of the option. Following the evidence, the Court further concluded that these questions could be answered in the positive, as there were clear efforts to renew the lease.

Considering all of the supporting evidence, the Court of Appeal found that judicial notice of anti-Black racism, whether conscious or not, was rightfully applied and did not interfere with the exercise of the application judge’s discretion in granting relief from forfeiture. As such, a note of caution to commercial landlords: Ontario courts may consider surrounding factors and take judicial notice of discriminatory behaviour as being racist, even if the behaviour is not consciously motivated by prejudicial or discriminatory views.

Contact Tierney Stauffer LLP in Ottawa or Arnprior for Representation in a Variety of Commercial Leasing Transactions

At Tierney Stauffer LLP, we represent commercial landlords and tenants at all stages of the leasing process, including the initial construction of the lease itself to ongoing issues and disputes. Our lawyers have extensive experience in both real estate and business law and will work to protect their clients’ rights in all lease transactions and dealings. Call us at 1-888-799-8057 or contact us online to set up a consultation with an experienced commercial leasing lawyer.

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