PROVINCE DE QUÉBEC
GREFFE DE QUÉBEC
No: 200-09-000293-941
(350-05-000221-935)
Le 4 février 1998
CORAM: LES HONORABLES ROTHMAN
PIDGEON, JJ.C.A.
LETARTE, J.C.A. (ad hoc)
SOCIÉTÉ IMMOBILIÈRE TRANS-QUÉBEC INC.,
RULIM INC.,
IMMEUBLES RÉGIME II INC.,
et
163609 CANADA INC.,
APPELANTES - (défenderesses)
c.
2981092 CANADA INC.,
INTIMÉE - (demanderesse)
_______________LA COUR , statuant sur le pourvoi contre un jugement de la Cour supérieure, district de Beauce, prononcé le 6 mars 1994 par l'honorable Armand Carrier qui a accueilli l'action en dommages intentée par l'intimée et condamné les appelants à lui payer une indemnité de 4 500 $ par mois, d'octobre 1993 à janvier 1994;
Après étude du dossier, audition des parties et délibéré;
Pour les motifs exposés dans l'opinion du juge Rothman, auxquels souscrivent les juges Pidgeon et Letarte;
ACCUEILLE le pourvoi;
INFIRME le jugement de la Cour supérieure;
REJETTE l'action en dommages de l'intimée, avec dépens dans les deux cours.
MELVIN L. ROTHMAN, J.C.A.
ROBERT PIDGEON, J.C.A.
RENE LETARTE, J.C.A. (ad hoc)
Me Pierre Paradis
Paradis Dionne
Procureur des appelantes
Me Étienne Parent
Parent Doyon Rancourt
Procureur de l'intimée
AUDITION: 14 janvier 1998
COURT OF APPEAL
PROVINCE OF QUÉBEC
QUÉBEC REGISTRY
No: 200-09-000293-941
(350-05-000221-935)
CORAM: THE HONOURABLE ROTHMAN
PIDGEON, JJ.A.
LETARTE, J.A. (ad hoc)
SOCIÉTÉ IMMOBILIÈRE TRANS-QUÉBEC INC.,
RULIM INC.,
IMMEUBLES RÉGIME II INC.,
and
163609 CANADA INC.,
APPELLANTS - (defendants)
v.
2981092 CANADA INC.,
RESPONDENT - (plaintiff)
This is an appeal from a judgment of the Superior Court, District of Beauce, which maintained an action in damages instituted by respondent and condemned appellants to pay respondent damages of 4 500 $ per month for the months commencing October 1993 until January 1994 for breach of their obligations as lessors under a commercial lease.
The critical question in the appeal is whether appellants breached their obligations to respondent in leasing premises in the food court occupied by respondent to another restaurant operator offering a number of food items similar to those offered by respondent.
Appellants own and operate a shopping centre situated in Saint-Georges de Beauce. Some 88 lessees occupy various commercial premises in the shopping centre.
In 1990, appellants renovated and improved the shopping centre to include a food court ("aire de restauration") with space for five counter-type restaurants having a common eating area. The first tenant to occupy the food court was the "Pizza Patio". Three other restaurant premises in the food court were leased shortly thereafter by Raynald Gagnon: "Bouffe Minute", "Café Expresso" and "Délices de Chine".
After submitting his offers to lease the premises he proposed to operate, Raynald Gagnon submitted and negotiated the menus he proposed to offer for each of the premises. These menus were inserted in the lease under clause 5. In the Bouffe Minute lease, clause 5 provided:
Clause 5.1: Utilisation
Comme condition essentielle du présent bail, il est convenu que le locataire ne devra utiliser les lieux loués que sous le nom de "Bouffe Minute", pour les fins suivantes et aucune autre fin:
Uniquement pour la vente au détail des aliments décrits à la page 16-A, lesquels aliments peuvent être consommés dans les lieux loués ou être emportés".
The Bouffe Minute lease, and all of the other food court leases, also contained the following clause stipulating that the provisions of the lease were to confer no exclusivity on the lessee:
Clause 5.7: Exclusivité
Le locataire reconnaît qu'aucune des dispositions du présent bail et de ses annexes ne lui confère une exclusivité de quelque nature que ce soit.
In 1993, respondent acquired the restaurant businesses and the leases of Buffet Minute and Café Expresso from Raynald Gagnon and it took over the operation of these premises.
Pizza Patio served principally Italian dishes but subsequently it began to serve french fries. Bouffe Minute served hot dogs, hamburgers, french fries, etc. Café Expresso served muffins, donuts, salads and desserts. Délices de Chine served Chinese food. (It was subsequently replaced by a restaurant serving Greek food).
In 1992, prior to Gagnon's sale of his restaurant locations to respondent, Gagnon had made it known to appellants that he wished to sell. At about the same time, respondent's principal, Nicole Morin, was involved in negotiations to obtain a "Burger King" franchise which she hoped to operate in the shopping centre. During these negotiations, Gagnon met with appellants' representatives and, in substance, he was offered 75 000 $ if the Burger King franchise were to be established by Nicole Morin in the Bouffe Minute premises and his Bouffe Minute business would close. The Burger King transaction was never completed.
Subsequently, in 1993, Nicole Morin agreed to purchase the Bouffe Minute and the Café Expresso operations from Gagnon, including the leases with appellants, for a company to be formed. Respondent was the company designated by Nicole Morin to purchase and operate these two locations.
In the months following respondent's acquisition of Bouffe Minute, respondent learned that appellants had entered into negotiations with prospective lessees for the operation of an "Ashton" franchise in the food court.
Fearing that the size of the Ashton franchise and the similarity of the food items it offered would be a threat to Bouffe Minute's business, respondent took injunction proceedings to enjoin the Ashton operation as well as an action in damages.
The Superior Court dismissed the application for an injunction but maintained respondent's claim in damages.
The trial judge concluded that appellants had not acted in good faith in leasing to Ashton:
Le locateur se devait d'agir avec bonne foi et il ne l'a pas fait en imposant à la demanderesse un compétiteur inattendu et il doit réparation des dommages causés par l'inexécution de ses obligations de bonne foi.
The trial judge further concluded that appellants had abused their rights as lessors and had not acted in accordance with the usages of the trade and the intentions of the parties:
Lorsque'en 1990, Gagnon soumet sa liste au propriétaire et que ce dernier l'annexe au bail préparé par lui, cette liste fait partie des relations contractuelles existant entre les parties.
Prétendre que le texte du bail one contient aucune exclusivité et conclure par la suite à l'absence de tout droit et de toute obligation n'est pas la même chose car le locateur doit se comporter suivant l'usage du commerce et l'intention des parties.
L'abus de droit doit être réprimé et le devoir de loyauté du locateur continue d'exister.
ISSUES
In essence, appellants raise the following issues:
1. The terms of the lease specifically exclude exclusivity;
2. There was no evidence of any commercial usage of the kind suggested by the trial judge.
3. There was no violation by appellants of their duty of fairness and good faith, and no abuse of rights.
4. Damages.
EXCLUSIVITY
It is quite clear under clause 5.7 that the lessee was to have no exclusivity of any nature and the lessee, in executing the lessee, acknowledges this.
Counsel for respondent admits the lease specifically excluded exclusivity so that respondent had no right to require exclusivity. He submits, however, that respondent was not asking for exclusivity, as such, but merely for the corollary right of the obligations imposed on it by the lessor in limiting the lessee's use of the premises, the type of restaurant it could operate and the type of food it could offer.
With respect, I do not believe that clause 5.1, which limits the use by respondent of the premises leased, involved any corollary obligation on the part of the lessor to refrain from leasing space in the shopping centre, and particularly the food court, to another lessee offering similar kinds of food. There are commonly several stores and restaurants in shopping centres and other buildings offering similar products.
Unless there is some form of exclusivity granted to a lessee in the lease, as a general rule, a lessor is free to lease space in the same building to another lessee offering similar products.
In this case, not only was there no exclusivity undertaken by the lessor, but the lease specifically excludes it:
"5.7 Exclusivité
Le locataire reconnaît qu'aucune des dispositions du présent bail et de ses annexes ne lui confère une exclusivité de quelque nature que ce soit."
It is difficult to imagine a provision which could more clearly and explicitly reflect the intention of the parties to exclude any suggestion of exclusivity in favour of the lessee.
Nor, in my view, is there any merit to respondent's argument that the limitation on the use of the premises imposed upon the lessee under clause 5.1 of the lease imposed upon the lessor an implicit corollary obligation not to rent premises in the food court to other lessees offering food items similar to those offered by respondent.
Limitations on the use of premises by the lessee are commonly found in commercial leases. Their purpose is to restrict the use of the premises leased by the lessee to the purposes mentioned in the lease. Such limitations do not, in themselves, give rise to an implicit corollary undertaking on the part of the lessor that he will not lease other premises in the building to other lessees operating the same kind of business or offering similar products.
In Gameroff v. Voelkner (
Of these properties two adjacent stores were occupied by plaintiff under a lease that expired April 30, 1965. Concerning this lease two things may be noted: 1. when the lease says that the store is to be used exclusively as a barber shop and beauty parlor it means that plaintiff may use them for this purpose only, not that defendants undertook not to rent other stores to other people operating the same type of business, and 2. nowhere in the lease is there anything to indicate directly or indirectly any such undertaking by the lessor.
It is worthy of note that, in the Gameroff case, the lease did not appear to contain an express exclusion of exclusivity of the kind provided in clause 5.7 of the present lease. Nor, apparently, was there any express exclusion of implicit collateral undertakings of the kind stipulated here under clause 27.4 of the lease:
"27.4 Le présent bail contient tous les engagements et les obligations réciproques des parties au sujet de la location des lieux loués et annule, à toutes fins que de droit, toutes représentations, négociations ou ententes antérieures de quelque nature que ce soit".
Professor Pierre-Gabriel Jobin (Traité de droit civil, Le louage des choses, Les Éditions Yvon Blais, Montréal, 1989, Page 590) states:
"262. La question de la concurrence faite au locataire. Le locateur peut- il louer une autre partie de l'édifice ou du «complexe» commercial à un locataire voisin qui exercera un commerce concurrent de celui du locataire dont le titre est antérieur? C'est là une des questions les plus délicates de la garantie du fait personnel du locateur. En effet, d'un côté, on est porté à refuser cette faculté au locateur, parce qu'en introduisant un concurrent de son locataire, il sait fort bien qu'il réduit les profits que son locataire prévoit tirer de l'exploitation de son commerce dans les lieux loués. À cet argument de fond, on peut ajouter que, comme la tendance des tribunaux, dans d'autres aspects de la garantie du fait personnel, est de se montrer plutôt exigeants vis-à-vis le locateur, ils devraient, pour rester cohérents, lui interdire de louer à un concurrent du locataire. D'un autre côté, la liberté de commerce et la libre concurrence sont des valeurs pleinement reçues dans notre société et notre droit: tout commerçant au détail, du moins, connaît les risques de devoir supporter la concurrence. On peut contester que le simple fait qu'il soit locataire lui accorderait, à cet égard, une protection qu'il n'aurait pas s'il était propriétaire ou encore si son locateur ne disposait pas d'un autre local à louer à un concurrent. Il y a enfin la liberté contractuelle du locateur de louer à qui il veut, principe non moins reçu chez nous et qui milite naturellement en faveur de la faculté du locateur de louer à un concurrent du locataire s'il le désire.
En France, la jurisprudence, après une longue évolution, en est venue à admettre la liberté contractuelle du locateur.
Aussi, n'est-il pas étonnant que les parties prévoient assez souvent une clause à ce sujet. Quand la stipulation vise à exclure ou restreindre le droit du locateur de louer à un concurrent, elle est interprétée restrictivement.
En l'absence d'une clause dans le bail, on pourrait rechercher l'intention des parties dans l'ensemble du contrat, voire dans les usages du commerce. Si le locateur était mu par une intention malicieuse, il serait évidemment responsable. Mais, hors ces cas particuliers, la jurisprudence et la doctrine québécoises ont opté pour la liberté contractuelle du locateur.
Professor Nicole L'Heureux (Précis de droit commercial du Québec, deuxième édition, Les Presses de l'Université Laval, 1975, page 127) expresses the same view:
"172- LE BAIL COMMERCIAL. L'obligation assumée par le locateur d'un immeuble commercial de ne pas louer d'autres espaces dans le même immeuble pour un commerce similaire à celui de son locataire s'interprète selon les mêmes principes que lorsqu'il s'agit d'une convention restrictive à la liberté du commerce continue dans un contrat de vente d'entreprise 240.
Lorsque le bail ne contient aucune disposition à ce sujet, le locateur conserve le droit de louer son immeuble pour l'exercice de toutes sortes de commerce y compris pour un commerce similaire 241 à celui de son locataire 242."
In the absence of any undertaking by the lessor not to lease to other lessees offering similar products and given the express terms of the lease excluding exclusivity, I can see no basis for the assertion that there was an implicit corollary or collateral undertaking to that effect.
COMMERCIAL USAGE
Nor do I see any basis for the suggestion by the trial judge that, even in the absence of a provision in the lease providing for exclusivity, commercial practice to that effect would be just as binding on the parties:
"On peut donc constater que la pratique du commerce, même si la clause d'exclusivité n'existe pas comme telle dans le bail, est aussi forte qu'un texte explicite et qu'elle fait force de loi entre les parties."
While commercial custom and usage may, in appropriate cases, be relevant and admissible in the interpretation of ambiguous terms in a contract or in giving effect to the intentions of the parties where a contract is incomplete, that is not the case here.
In the first place, there is nothing ambiguous, unclear or incomplete about the exclusion of exclusivity which the parties stipulated in their lease agreement. What respondent purports to do in the guise of a commercial usage is not to interpret or complete the clause but to contradict it.
Secondly, even if commercial usage were admissible in this case, it would have had to be alleged and proved, which was far from the case.
DUTY OF GOOD FAITH AND ABUSE OF RIGHT
The trial judge suggests that the lessors' decision to lease adjacing premises in the food court to the Ashton chain constituted an abuse of right and a breach of their obligation of good faith:
"L'abus de droit doit être réprimé et le devoir de loyauté du locateur continue d'exister."
In support of this conclusion, respondent relies on a decision of the Superior Court in Posluns v. Les Entreprises Lormil Inc. (S.C.Q. no 200-09-001584-858, July 4, 1990, Goodwin, J.) where Mr. Justice Goodwin expressed the view that, even in the absence of a provision confering exclusivity on a lessee in a shopping centre lease, the lessor had an obligation of maintaining a balance between the various businesses in the centre so as not to cause harm to their businesses. Referring to the duty of good faith, he concluded:
Le Tribunal, invoquant les principes se dégageant de ces décisions, les applique au propriétaire et au directeur général d'un Centre commercial. Dans leurs relations avec leurs locataires, il ne peuvent signer un bail et obliger le locataire à servir un menu principal précis sans assumer une certaine obligation réciproque, même en l'absence de toute clause spécifique d'exclusivité.
There is no doubt, of course, that, under our law, the parties to a contract must act in good faith. Nor is there any doubt that a party to a contract who exercises his rights abusively may be liable in damages (Houle v. La Banque Canadienne Nationale,
But, with respect, I can see no abuse of right and no violation of the lessors' duty of good faith in this case.
It is important to note at the outset that in this case, unlike the Posluns case, there was an express exclusion of exclusivity in the lease, so that even assuming without deciding, that a lessor may, in some cases, have a duty to maintain a balance of the kinds of businesses which he rents in a shopping centre, I believe any such obligation would have been specifically excluded in this case.
Moreover, even in the absence of the exclusion of exclusivity provided in this case, I have great difficulty seeing any abuse of right or any violation of an obligation of good faith in appellants' decision to lease to the Ashton chain (Place Fleur de Lys v. 2958-8696 Québec Inc., C.S.Q. no 200-05-000969-944, Henri Larue, J., July 10, 1995).
There was certainly no suggestion of malice or fraud on the part of the lessor in deciding to lease to the Ashton chain. It seems perfectly clear, on the evidence, that their sole motivation was to select another restaurant operator for the food court that would attract as many customers as possible to the shopping centre. While it is true that Ashton offers many food items similar to those offered by Bouffe Minute, its operations are, by no means, identical.
Respondent, and its predecessor Gagnon who signed the lease for the premises, were aware that their premises were in a food court with a number of other restaurant operators. I do not see how they would have assumed that they had any exclusivity in the food items they were offering, particularly in the light of the exclusion of exclusivity contained in their leases. And even in the absence of this clause why would Bouffe Minute or any other "fast-food" outlet assume that the lessor would not, in the future, lease to another "fast-food" outlet selling sandwiches and french fries.
Finally, I do not believe it can safely be assumed that the arrival of a successful competitor in the food court would necessarily damage Bouffe Minute on an on-going basis. Popular and successful operators often attract a larger number of customers to the area, to the benefit of all.
In the result, I would allow the appeal, set aside the decision rendered in first instance and dismiss the action in damages, with costs in both courts.
MELVIN L. ROTHMAN, J.A.
AVIS :
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