Gourlay et al. v. Canadian Department Stores Ltd., [1933] SCR 329

Supreme Court of Canada

Gourlay et al. v. Canadian Department Stores Ltd., [1933] S.C.R. 329

Date: 1933-04-25

Theresa Emmeline Gourlay and John Gordon Billings, Executors and Trustees under the Last Will and Testament of Sophia Jane McDonald, Deceased (Defendants) Appellants;

and

The Canadian Department Stores Limited (Plaintiff) Respondent.

1933: March 17; 1933: April 25.

Present: Duff C.J. and Rinfret, Lamont, Cannon and Crocket JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Landlord and tenant—Covenant in lease for renewal—Construction—In-definiteness as to duration of renewal term—Covenant void for uncertainty.

A covenant in a lease, which provides for a renewal of the term, in order to be valid must designate with reasonable certainty the date of the commencement and the duration of the renewal term to be granted. This certainty as to duration must appear from the express limitation of the parties or from reference to some collateral matter—itself certain or capable of being made so before the renewal lease takes effect—which may, with equal certainty, be applied in measurement of the continuance of the term.

In the present case (where the lease was of certain rooms and hallway in the lessor’s building which adjoined the lessee’s hotel, the leased premises being used in connection with the hotel) it was held that the language used shewed that the intention was to provide for a right of renewal for such period as the lessees should need the use of the rooms for purposes specified, and that, as there was nothing in the covenant which enabled the court to determine the duration of the lessees’ need for the rooms, the covenant was too indefinite to be enforced, and was therefore void for uncertainty. (Semble, had the

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provision been for renewal “for such further term as the lessees may request or demand,” it would not have offended against the rule requiring certainty, for the duration of the term would be made certain by the request or demand for renewal.)

APPEAL by the defendants from the judgment of the Court of Appeal for Ontario[1] which (reversing the judgment of Orde J.A.) held that the renewal provisions contained in a certain lease were too indefinite to be of legal effect. The renewal provisions in question are set out in the judgment now reported. The appeal was dismissed with costs.

J.W. Pickup for the appellants.

G.W. Mason K.C. for the respondent.

The judgment of the court was delivered by

LAMONT J.—This is a friendly action and the facts are not in dispute. The question involved in the appeal is the proper construction of a covenant in a lease made between the appellants and the respondent’s predecessor in title which provides for its renewal. The covenant reads as follows:—

It is hereby agreed that this Lease and the term hereby created shall at the option of the Lessees be renewed (1) for such further term as the Lessees may require the said bedrooms and the hallway for use in connection with the said hotel, and whether used as an hotel, boarding-house or apartment house; (2) and for such further term as shall correspond with the term of any lease that may be given by the said Lessees to any tenant in respect of the said hotel premises and (3) thereafter from time to time so long as the said bedrooms may be required for hotel, boarding-house or apartment house purposes at a rental equivalent to one-eighth part or portion of the rental received from time to time for the said hotel, boarding-house or apartment house.

The numbers (1), (2) and (3) set out above are not in the covenant but were inserted by the trial judge for convenience, and have been here retained.

The leased premises consist of sixteen bedrooms and a hallway in the respondent’s building immediately adjoining the appellants’ hotel in the Town of Lindsay, Ontario, and have, for some years, been used in connection with the hotel.

The respondent contends that “the covenant is too vague and indefinite to create a right of renewal, that it does not

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give the appellant any such right and is void for uncertainty.” On the other hand the appellants submit that so long as the term of each renewal lease can be made certain at the time the lessees call for it, that is sufficient to meet all the requirements of the law regarding certainty.

It has been long established that a covenant in a lease, which provides for a renewal of the term, in order to be valid must designate with reasonable certainty the date of the commencement and the duration of the term to be granted. This certainty as to duration must appear from the express limitation of the parties or from reference to some collateral matter—itself certain or capable of being made so before the lease takes effect—which may, with equal certainty, be applied in measurement of the continuance of the term.

The trial judge construed the clause as being sufficiently certain to give the appellants, as lessees, a right of renewal. He said:—

I think a reasonable and proper construction to put upon this language is that the lessees are entitled, and, of course, bound, to indicate, so far as this particular part of the covenant is concerned, when applying for the renewal, the precise period during which they will “require” the demised premises for use in connection with the hotel.

He thus construed the first part of the covenant, that is (1), as though it read: “For such further term as the lessees may request or demand.” Had that been the language of the clause, it would not, in my opinion, have offended against the rule requiring certainty, for the duration of the term would be made certain by the request or demand for renewal. That, however, is not the language of the clause. The term provided for in (1) is

such further term as the lessees may require the said bedrooms and the hallway for use in connection with the said hotel,

whether it is used as a hotel, boarding-house or apartment house. While that provided for in (2) and (3) is the period covered by a lease or leases granted by the lessees from time to time so long as the bedrooms may be required for hotel, boarding-house or apartment house purposes. It is the phrases “require * * * for use” and “may be required for hotel, boarding‑house or apartment house purposes” which manifest the purport of the words “require” and “required,” and shew that the notion expressed is rather that of “need” than that of “request” or “demand.” I think it is quite clear from the language used

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that what the parties had in mind was to provide for a right of renewal for such period as the lessees should need the use of the rooms for the purposes specified. As there is nothing in the covenant which enables us to determine the duration of the lessees’ need for the rooms, the covenant is too indefinite to permit of its being enforced. It is therefore void for uncertainty.

The appeal should be dismissed with costs.

Appeal dismissed with costs.

Solicitor for the appellants: R.I. Moore.

Solicitors for the respondent: Mason, Foulds, Davidson, Carter & Kellock.