The rights and obligations of co-contractors are not necessarily limited to what is written in a contract. As surprising as it may be, the conduct of the parties may give rise to new rights and obligations, or modify those set out in the contract. A recent decision by the Quebec Superior Court provides a good example.
In this particular case, the Court had to determine whether a terrace (outdoor patio) was part of the premises leased by Restaurant La Station Châteauguay Inc. The bone of contention in this case was that the terrace was not mentioned at all in the lease in question. In the lease, concluded in late 2019 between the tenant and the former owner of the building, the description of the rented premises was indeed limited to the space inside the shopping centre where the restaurant was located.
In 2021, the new owner of the shopping centre wanted to open a new business in the building, one that required additional parking spaces. The landlord then informed the tenant of his intention to convert the terrace into a parking lot, on the grounds that it would be occupying space the restaurant was not entitled to. In support of the claim, the landlord argued, among other things, that the lease contained the following "entirety" clause:
"The current lease constitutes the entire agreement between the parties, and no other prior or contemporaneous documents or oral agreements shall be allowed."
The tenant, who had opened his restaurant in 2020, wished to retain the use and enjoyment of the outdoor patio, on the grounds that it was accessory to the lease, and took the matter to court to have that right recognized.
In rendering its judgement, the Court considered several elements. First, the terrace had been used continuously by previous tenants since 2004, with no mention of it in any of the previous leases. It had also been permanently landscaped at the expense of a previous tenant, was connected to services (water, sewer, lighting, gas and heating) and was accessible from the restaurant via two large garage doors installed for that purpose. Representatives of the former owner (with whom the lease in question had been concluded), testified that because the terrace adjoined the restaurant and was used as an outdoor eating space for many years, it was implicitly provided for in the lease. The new owner, in fact, had operated a business nearby for many years, and was aware of the existence of the outdoor patio when he purchased the shopping centre.
The Court noted that "the parties to a lease, by their conduct, may find themselves confirming from year to year a right not included in the lease, for use of an additional space." The notion of accessory is explicitly provided for in Article 1434 of the Quebec Civil Code.
For those reasons, the Court concluded that use of the terrace is accessory to the operation of the restaurant owned by the tenant. Since it is not a mere tolerance, as the lessor claimed, the tenant's right to use the terrace is enforceable, and the Court therefore ordered the lessor not to hinder the lessee's use and enjoyment of it.
This decision thus demonstrates the importance of conducting serious due diligence when purchasing a building, notably as regards the use made of spaces by the tenants. At that stage, if the facts observed on the ground do not seem to be reflected in the existing leases and contracts, it is certainly better for a potential purchaser to take a step back in order to clarify the paper trail (existing and previous leases and contracts), hiring lawyers if need be, so as to avoid any misunderstandings and situations like the one described above.
Julien Poirier-Falardeau, associé
Pierre-Olivier Bouvier-Leblanc, avocat
[1] Restaurant La Station Châteauguay inc. c. 9435-8520 Québec inc., 2022 QCCS 3427