A tenant leased part of an office building on the landlord’s golf course.  The lease included a golf membership that was paid for through rent.

The Canadian Open was being held at the course, and the landlord relinquished control of the golf course to the Canadian Golf Association, which created off-site parking sites for tenants and provided a shuttle service to the office building. Passes were given to tenants to hand out to clients.

The tenant was not very happy with the temporary loss of his 16 reserved parking spots. He had a number of run-ins with security, the landlord and the golf association.

The landlord then tried to terminate the lease and golf membership and sought a declaration that the lease was validly terminated.

The court ordered the golf membership reinstated and awarded the tenant compensation for breach of contractual rights.  Access to the golf course was important to the tenant for client entertainment and was an important feature in his decision to lease the premises. It determined that the tenant’s conduct did not justify termination of either the lease or golf membership.

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In a different case, a vendor sold a property with the condition that the purchaser would assume the first mortgage.  This enabled the vendor to avoid a prepayment penalty to discharge the mortgage. The purchaser paid the initial deposit and was to pay a second deposit into its solicitor’s trust account, once the purchaser obtained secondary or further financing. 

The purchaser then waived a condition for further financing because he decided to replace the existing first mortgage with a fresh increased first mortgage. He handed a cheque to his solicitor for the second deposit, but the lawyer inadvertently failed to place it into the trust account.

The vendor was not aware second deposit was not in trust, but he refused to transfer the property on learning that the first mortgage was not to be assumed. 

The purchaser then sued for specific performance and damages.

Surprisingly, the court would have voided the sale even though the vendor was not aware that the second deposit was not in lawyer’s trust account. The reasoning was that the second deposit was a “true condition”, time was of the essence and vendor’s unawareness did not mean the condition was waived.

The agreement was voided because the assumption of the first mortgage was a true condition precedent and had not been waived by both parties.

Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting for builders, real estate agents and lawyers.