Q.B.G. A.D.1996 No. 2464 J.C. R. IN THE QUEEN'S BENCH JUDICIAL CENTRE OF REGINA BETWEEN: GREAT CANADIAN BINGO CORPORATION and THE REGINA EXHIBITION ASSOCIATION LIMITED DEFENDANT Patrick N. McDonald for the plaintiff J. Paul Malone for the defendant JUDGMENT GUNN J. September 16, 1996 This is an application by the Great Canadian BingoCorporation ("GCB") for an interim injunction restraining TheRegina Exhibition Association Limited ("REAL") frominterfering with GCB\'s enjoyment of certain leasehold premisesin the Jubilee Building in Regina Exhibition Park as tenantfrom and after September 1, 1996. In addition GCB seeks aninterim injunction restraining REAL from entering into anylease with Regina Central Bingo Association Inc. ("RCBA") andpreventing REAL from permitting the operation of a bingo hallby RCBA within Regina Exhibition Park except as a subtenant ofGCB. FACTS REAL is an agricultural exhibition association operating at Regina Exhibition Park in Regina, Saskatchewan. It operates number of facilities, including buildings suitable for short or long term commercial leases. One of the buildings is the Jubilee Building, which was leased to FKJ Fundraising Ltd. ("FKJ") pursuant to lease in writing dated April 17, 1991. The lease was for term of five years ending August 31, 1996. FKJ subleased the Jubilee Building to GCB for the term of the lease and REAL consented in writing to this sub-lease. GCB used the Jubilee Building to operate bingo hall. It entered into written agreements with RCBA for the day to day operation of the bingos, including further sub- lease by GCB to RCBA of the Jubilee Building. REAL was not aware of this sub-lease and was not asked to provide its consent, as required by the lease and the first sub-lease. Relevant provisions of the lease are as follows: 15.01 In the event that the Tenant is not, at the time of request, in default of any of the covenants on the part of the Tenant to be paid or performed, the Landlord will, at the expiration of the Term, at the cost of the Tenant and upon request mailed by the Tenant registered post to or delivered to the Landlord, not later than eight (8) calendar months, before the expiration of the Term, grant to the Tenant renewal term of five (5) years, on the same agreements as herein contained save and excepting this paragraph, at rent to be mutually agreed upon provided however, notwithstanding the option to renew hereby granted, the Landlord shall not be obligated to renew the lease for subsequent five year term if: a)the Tenant ceases to use the Leased Premises for bingo purposes; or b)the operations of the Landlord change such that it is no longer feasible to lease the Leased Premises to the Tenant or to any other person. The sub-lease contains the following provisions: 1. The Subtenant [GCB] covenants with the Headtenant [FKJ]: 1.09 not to assign, sublet or part with possession of any part of the Subpremises without the prior consent in writing of the Headtenant and of the Superior Landlord [REAL] which consent may be withheld notwithstanding any statutory provision respecting the withholding of consent without giving reason therefor 2. The Headtenant covenants with the Subtenant: 2.04 In the event that the Subtenant is not, at the time of request, in default hereunder, the Headtenant agrees to exercise the Option to Renew the Head Lease for further term of years in accordance with the Head Lease provided that the notice to renew from the Subtenant shall be received by the Headtenant no later than months prior to the end of the term and provided that the rent (as between the Headtenant and the Subtenant) shall be mutually agreed upon or determined by arbitration as set forth in the Head Lease. GCB did not provide notice to renew its sublease with FKJ. FKJ did not exercise the option to renew the lease with REAL. GCB did not give any formal or written notice to REAL indicating it wished the lease to be renewed. Written notice of renewal should have been delivered to REAL by December 31, 1995. GCB says it entered into negotiations with REAL in November of 1995 for possible relocation of the bingo hall to other premises as an alternative to renewal of the existing lease. GCB says these negotiations continued in January of 1996 but REAL terminated the negotiations and made deal with RCBA to lease the Jubilee Building premises directly to it commencing September 1, 1996. GCB says REAL's course of conduct should estop it from relying on the renewal terms of the lease. There is some dispute on the substance of these negotiations as reflected in the affidavits of Jim Hughston ("Hughston") and Dwayne Bauer ("Bauer") filed in support of GCB's position, and the affidavit of Tom Mullin ("Mullin") filed by REAL. GCB is prepared, for the purposes of this application, to accept the facts presented by Mullin where there is conflict with its position. Mullin is the marketing manager for REAL and is responsible for negotiating all long term leases and contracts at Regina Exhibition Park. He says no representative of FKJ ever indicated to him it wished to renew its lease of the Jubilee Building. He says he had discussions with Hughston in August of 1995, but not about lease renewal. In November of 1995 Mullin says he met with Hughston to discuss the future of GCB at Regina Exhibition Park and says he told Hughston there were number of alternatives to the current lease one of which was the Heritage Building. At paragraph of his affidavit he says the following: There was no discussion at that time about GCB renewing the Lease and all of our discussions at that time were on the basis of exploring all the alternatives available to GCB regarding its future presence at Regina Exhibition Park. There was no clear indication from Hughston that GCB was definitely going to stay at Regina Exhibition Park when the current Lease expired. When we concluded our meeting did not give him any assurances about the future and did not undertake that would get back to him regarding leased premises or terms of new lease. And at paragraph 10 he said the following: [T]here has never been an indication from GCB that it "intended to renew the lease of the existing space if necessary." In all of my discussions with representatives of GCB on the topic they have indicated that they had far more space than they wanted under the current Lease and in fact would have preferred to get out of the Lease. When we have discussed space other than the Jubilee Building it has only been in the context of the various alternatives available to GCB. There has never been clear indication that they wanted to renew the Lease. Mullin says he has never been asked by GCB or by FKJ to negotiate the amount of rent to be paid under renewal of the current lease. Currently bingo is being conducted at the Jubilee Building by RCBA on month to month basis, but there is no agreement in writing between REAL and RCBA with respect to the operation of the bingo hall in the Jubilee Building. THE LAW In Deloitte, Haskins Sells v. Brooker, Robinson, Ogrady and Ernst Whinney (1982), 1982 CanLII 2443 (SK QB), 23 Sask. R. 58 (Q.B.) Vancise J. described the general principles to be applied at p. 62 of his judgment: The following principles determine whether or not an interlocutory injunction will be granted: (1) An interlocutory injunction will only be granted where the right to relief is clear. (2) The plaintiff in asserting that right must show strong prima facie case, in support of the right which he asserts and strong possibility that he will succeed at trial. (3) The plaintiff must be able to show that an injunction until the hearing, is necessary to protect him against irreparable damage and loss, mere inconvenience is not enough. (4) Where any doubt exists as to the plaintiff's right or if his right is not disputed, but if violation is denied, the court should determine on the balance of convenience to the parties the nature of the injury which the defendant on the one hand would suffer if the injunction is granted and he should turn out to be right and that the plaintiff on the other hand might sustain if the injunction was refused and he should ultimately turn out to be right. The burden of proof that the inconvenience which the plaintiff will suffer by the refusal of the injunction is greater that [sic] which the defendant will suffer lies on the plaintiff. (Halsbury's Laws of England (3d Ed.), vol. 21, p. 364. See also Govan Local School Board v. Last Mountain School Division No. 29 (1991), 1991 CanLII 8031 (SK CA), 93 Sask. R. 229 at 234. Estey J. in Aetna Financial Services Limited v. Feigelman et al., 1985 CanLII 55 (SCC), [1985] W.W.R. 97 (S.C.C.) at 103 and 104 states that the rule as to the availability of an interlocutory injunction generally is as stated by McRuer C.J.H.C. in The Chesapeake and Ohio Railway Company v. Ball, 1953 CanLII 102 (ON SC), [1953] O.R. 843 at 854-55: The granting of an interlocutory injunction is matter of judicial discretion, but it is discretion to be exercised on judicial principles. have dealt with this matter at length because wish to emphasize how important it is that parties should not be restrained by interlocutory injunctions unless some irreparable injury is likely to accrue to the plaintiff, and the Court should be particularly cautious where there is serious question as to whether the plaintiff would ever succeed in the action. may put it different way: If on one hand fair prima facie case is made out and there will be irreparable damage if the injunction is not granted, it should be granted, but in deciding whether an interlocutory injunction should be granted the defendant's interests must receive the same consideration as the plaintiff's. DISCUSSION DOES THE APPLICANT HAVE STRONG PRIMA FACIE CASE? REAL submits the legal issues are clear. The lease requires that notice must be given by registered mail or personally delivered eight months before the end of the term of the lease. By implication it would appear this notice ought to be in writing. There is no evidence FKJ, the party with whom REALcontracted, exercised or attempted to exercise the option torenew. REAL submits the injunction application should fail on this basis alone as there is no privity of contract between the parties to this lawsuit. The sublease contains provision whereby GCB could have compelled FKJ to renew the lease, but there is no indication it acted in any way to exercise that right. REAL cites in support of its position Saint John Shipbuilding Dry Dock Co. Ltd. v. Canada (National Harbours Board) (1983), 48 N.B.R. (2d) 27 (C.A.) where the New Brunswick Court of Appeal held that tenant wishing to exercise an option to renew lease must comply with the conditions in the lease respecting the time of its exercise. The right to renew will be lost if the tenant fails to give notice in time and the tenant shall not be entitled to relief from forfeiture. The court relied on several English decisions including West Country Cleaners (Falmouth) Ltd. v. Saly, [1966] All E.R. 210, in which the Court of Appeal held at p. 212: [A]n option [to renew] is privilege right which has always been treated by the law as requiring complete compliance with the terms and conditions on which the option is to be exercised. The basis of GCB's application is estoppel. It says REAL entered into negotiations with it with view to the relocation of the bingo hall and then began to deal directly with GCB's subtenant after the renewal date had passed. In Re 6781427 Holdings Ltd. and Alma Mater Society of University of British Columbia (1987), 1987 CanLII 2889 (BC CA), 44 D.L.R. (4th) 257 (B.C.C.A.) the British Columbia Court of Appeal found that landlord was estopped from relying on the strict notice provisions of an option to renew the lease because it had entered into negotiations with the tenant about expansion and had advised the tenant it would advise the tenant of its position on date well after the renewal option deadline. The court found that, in the circumstances it would be inequitable to permit the landlord to rely on the failure to give written notice as required in the lease. Here, it would appear there were no negotiationsbetween REAL and GCB. The parties met once to discuss GCB's future at Regina Exhibition Park generally, but there is no evidence that REAL made any representations to GCB at the time. There was no promise on the part of REAL to follow up on these discussions, nor was there any discussion about waiving any requirements with respect to its exercising the option to renew either through FKJ or directly. I am not satisfied on the basis of Mullin\'s affidavitthat GCB has a strong prima facie case on the merits. IRREPARABLE HARM Sharpe, in his text Injunctions and Specific Performance (Toronto: Canada Law Book, 1983) at para. 15, says in connection with "irreparable harm": In the context of preliminary injunctive relief, the phrase is given more specific meaning, namely that the plaintiff, before the trial, must risk some injury which cannot be compensated or remedied other than through the granting of an interlocutory injunction. "Irreparable" is not used in the literal sense of being incapable of repair. It has simply been interpreted as "material" injury and "one which could not be adequately remedied by damages": Kerr on Injunctions, 6th ed. (1927), p. 18. GCB managed the business and sublet the premises to RCBA. Under the current arrangements, the business of bingowill continue to be operated by RCBA. If successful at trial the damages to GCB will be easily calculated based on the time it was unable to occupy the premises. BALANCE OF CONVENIENCE In the case of Confran Holdings Ltd. v. Pope (1985), 1985 CanLII 2567 (SK QB), 43 Sask. R. 63 at 67 (Q.B.) Grotsky J. cited 21 Halsburys Law of England (3d) 366 (para. 766) where it was stated: Balance of convenience considered. Where any doubt exists as to the plaintiff's right, or if his right is not disputed, but its violation is denied, the court, in determining whether an interlocutory injunction should be granted, takes into consideration the balance of convenience to the parties and the nature of the injury which the defendant, on the one hand, would suffer if the injunction was granted and he should ultimately turn out to be right, and that which the plaintiff, on the other hand, might sustain if the injunction was refused and he should ultimately turn out to be right. The burden of proof that the inconvenience which the plaintiff will suffer by the refusal of the injunction is greater than that which the defendant will suffer, if it is granted, lies on the plaintiff. It is clear there will be some inconvenience to REAL if the injunction is now granted as it has undertaken new course of conduct for bingo at the Regina Exhibition Park with RCBA. There will also be some inconvenience to GCB if the injunction is not granted as it wishes to "renew" or "restore" state of affairs which has been in place for some time. Onbalance GCB has failed to satisfy the burden of proof that theinconvenience it will suffer by the refusal of the injunctionis greater than that which will be suffered by REAL if it isgranted. Therefore for the above reasons, and in the exerciseof my discretion, I hereby dismiss the application for aninterim injunction. Costs will be costs in the cause.
An application for an interim injunction restraining the Regina Exhibition Association (REAL) from interfering with GCB's enjoyment of certain leasehold premises in the Jubilee Building and from entering into any lease with Regina Central Bingo (RCBA) and preventing the operation of a bingo hall by RCBA within Exhibition Park except as sub-tenant of GCB. The original five year lease for use of the Jubilee Building as a bingo hall between Fundraising td. and REAL was assigned to GCB with REAL's written consent. GCB further sublet the building without REAL's consent or knowledge. Written notice of renewal was not sent to REAL. The basis of GCB's application was estoppel on the basis that REAL entered negotiations regarding a relocation of the bingo hall and then began to deal directly with CGB's sub-tenant after the renewal date had passed. HELD: The application was dismissed. Costs in the cause. 1)There was no evidence that Fundraisers, the original party to the lease, attempted to exercise the option to renew. 2)GCB did not have a strong prima facie case on the merits. It appeared that there were no negotiations between GCB and REAL. 3)There would not be irreparable harm. Under the current arrangements, the bingo would be operated by RCBA. If successful at trial the damages to GCB can be easily calculated based on the time it was unable to occupy the premises. 4)On balance GCB failed to satisfy the burden of proof that the inconvenience it will suffer by the refusal of the injunction will be greater than that suffered by REAL if granted.