Neeraj Pal: Heart of the Community

Neeraj Pal is a new Canadian lawyer who practices corporate commercial, real estate and civil litigation law. His focus is on easing the burdens of his clients and helping with complex legal matters.


Neeraj Pal was born and raised in India. Before coming to Canada in 2017, Neeraj was a lawyer in India for 16 years. He worked as in-house counsel for ESPN, Vodafone, Viacom and Times Network in India. In Canada, he is a sole practitioner that focuses on corporate commercial, real estate and civil litigation.


The Beginning

Neeraj didn’t always want to be a lawyer. There were a few lawyers and judges in his extended family and to his limited child perception, they led rather boring lives. “I wanted to be someone who was free-spirited, doing their own thing,” he said. The trouble was, he wasn’t quite sure what it was that he wanted to do. No matter, he thought. He would start the track to become a lawyer to keep his parents happy and to give himself time to figure out where his true passion lay.  He took the law school entrance exam, got into law school and realized with a mild shock that he loved it. Soon law became his passion. “I realized how amazing it is to search [for] new things, do research…fight a case…get a confirmatory result… And I was good at it,” he said with a twinkle in his eye.

At one point in law school he had the opportunity to argue a case in a simulated court environment. He prepared his case law and his arguments, practiced his delivery. During his presentation, he was so wrapped up in his arguments that he didn’t realize he had gone beyond the allotted time. It didn’t seem to matter though, because when he was finished, his classmates were on their feet and showering him with applause. “[It was] such an amazing feeling,” he said. “I thought, if I can do it here, maybe I can do it somewhere else.”

Neeraj was called to the bar in India in 2001. He worked as a junior lawyer assisting a senior counselor in research, court appearances, documenting reviews and time management. During his next job at ESPN, he decided to do his Master in Laws in London, England. After his Masters, he was rehired by ESPN. Later on, he got an opportunity to be part of the Viacom’s dynamic legal team. Before heading to Canada, he was taking care of the legal and regulatory functions at Times Network, where he was dealing with serious techno-commercial agreements for the online and broadcast media business. Neeraj enjoyed the work and the team-based environment. When he and his family came to Canada in 2017, he contemplated returning to the same type of in-house environment but ultimately decided it was time to try starting his own practice, something he had wanted to do for awhile.

Coming to Canada

Neeraj took his accreditation exams while still in India so that when he arrived in Ontario, he was able to start the process to be licensed. He wrote his Barristers and Solicitors exams, completed his articling with Brampton Legal Community Clinic and was called to the bar in June 2019. He opened Gretis Legal in November 2019.

Neeraj focuses on corporate commercial and real estate civil litigation. In corporate commercial cases, he helps his clients incorporate a business, establish business practices, and develop employment agreements. In real estate, he focuses on sale and purchase transactions. In civil litigation he does personal injury claims and accident benefit claims.

Out of all the types of law, Neeraj has always been drawn to corporate commercial cases. It’s why he worked as in-house counsel in India. He feels a sense of kinship when many people are working together towards a common goal, to produce a product of the highest quality. And although he no longer works for a large company, he tries to bring that sense of ownership and partnership to the cases he works on with his clients. Real estate is his second area of interest. He finds it’s a way to stay connected to the community, give back to it, and stay in touch with the people within it, which is very important to him.

Third, Neeraj does civil litigation for personal injury claims and accident benefit claims. He finds litigation intriguing because he must stay active and updated on caselaw as it can change overnight. It’s a way to help people with their rights, making sure they get their share of things.

When asked what he’s most proud of, he gave a surprising answer. Neeraj said that the easy answer would be graduating from law school or passing the bar both in India and in Canada. He acknowledged that they are impressive accomplishments and he is proud of those moments, but to him, his proudest achievements are learning to knot his tie, learning how to swim as an adult, immigrating to a new country and starting all over again, and of course learning to drive on the other side of the road. He had to really work hard to overcome his fear (swimming) and years of trained instinct (driving) to succeed, which he did, and he’s beyond proud of those victories.

Choosing Wolf Law Chambers

After deciding to start his own practice, he began looking for an office space. Through a Google search, he found Wolf Law Chambers. He called and made an appointment for a tour. “They were very welcoming, and I was very impressed with the space,” he said. “I have worked most of my professional career in an environment where everybody has their own space but there is room to help each other. I wanted something similar. I never realized it would be available, but I saw [it] here.” When he checked it out, he knew he wanted an office at Wolf Law Chambers for himself. “The infrastructure is good, [there’s] 24/7 access and the coffee is great,” he added with a laugh. He noted that the clients who visited his office were very impressed. They liked the layout and the air of professionalism. The location is also a bonus as it’s pretty central in terms of reaching different parts of the GTA.

As a tenant of Wolf Law Chambers, he’s really impressed with the use of technology and how it’s been incorporated into office use. “They have enabled it to become your personal assistant,” he said. He can get his voice messages by email; he knows when he has mail or a parcel to pick up. He receives faxes electronically, negating the need to physically pick up the fax and then scan it himself. He can book the conference room online. “Technology has been used very positively, which is good because it can bring down efficiency [but not here], here it is used very nicely.” Too often, you don’t realize you need something until the need arises, but time and again, Neeraj has found his needs anticipated and fulfilled before he can voice them.

Looking forward

Short term, Neeraj would like to keep his practice running and keep learning about the Canadian system. Long term, he would like his practice to evolve into a big firm that has lawyers specializing in different areas, and for his practice to be heavily involved in the community. He also wants to create his own Bay Street. He sees a lot of good talent coming from outside Canada that could be utilized. He thinks it would benefit the community and be good opportunities for the incoming lawyers. “Not everyone can go to Bay Street after all, so why not make one right in the heart of my community?” he asked.

At the end of the day, his favourite part of being a lawyer is when he’s able to put a smile on his client’s face. When they’re able to walk out of his office satisfied and smiling, he’s happy. “Whatever it takes to make that happen,” he says, “I will do.” That smile is the best feeling of satisfaction.

If you would like to ease your burdens and smile, give Gretis Legal a call.

Reinventing the legal framework

Dezso Farkas

The significance of a man’s prestige is a collective reflection of all his attributes. Dezso Farkas is a man of many attributes. Apart from being a law practitioner and an entrepreneur who helps start-ups, Dezso is responsible for the conception of Wolf Law Chambers. The chambers, described as a multi-disciplinary law practice, is an innovative approach to providing a workplace where legal professionals can seek support and resources, while maintaining their status as a singular entity.

Educational Background

Dezso graduated with a BA Honours degree from York University and then went on to earn his Master of Laws (LLM) degree (specializing in Corporate Governance) and a Juris Doctor (JD) degree, both from Osgoode Hall Law School, York University. Soon after he was called to the Bar and currently, he is licensed to practice as a Barrister & Solicitor in the Province of Ontario.

Apart from periodically visiting the courthouse, Dezso made time to publish several articles in the prestigious Delaware Journal of Corporate Law, Transnational Legal Theory Journal and the London Review of International Law. On a certain occasion Dezso also served with the Institute for Global Law and Policy at Harvard Law with his expertise on the legal side.

Professional Ventures

The scope of Dezso’s abilities is not just limited to law. On top of being a real-estate entrepreneur with considerable experience in the field, in the past Dezso has also acted as a director of the Reliant Gold Corp., a publicly traded junior mineral resources company.

Farkas Law “Business Lawyers”, the independent law firm chaired by Dezso Farkas, caters to the needs of small and medium-sized business clients. The self-description of the firm is stated as a body of “Business Lawyer” with an aim to provide customized legal services, guidance and trusted advice for business ventures of all kinds. Currently the clientele of Farkas Law includes start-ups, commercial landlords, real-estate developers, manufacturing companies, non-profit organisations and small business owners. The firm acts as an external “in-house” corporate counsel to save their valuable resources and focusing them towards successful outcomes.

Dezso’s substantial history of merit is a result of his personal ideology which can be better expressed by himself:

I believe in continuous professional growth and I am committed to gaining new knowledge and experience to better serve the needs of my clients.

Dezso Farkas

Vision

Ideally lawyers are intended to be a means of resolving problems for their clients. Sadly, not all lawyers are attuned to the needs of their clients. For Dezso Farkas, the motivation to become a lawyer came from his own unsavory past experience. As a young entrepreneur, Deszo encountered some obstacles and to resolve them he obviously pursued legal assistance; unfortunately, he got saddled with a ‘disengaged’ lawyer. At this point Dezso realized how detached lawyers are to the ideology of young entrepreneurs. Back then, if he had been a lawyer, he definitely could have handled his case more efficiently, he realized that going into law practice could be a real opportunity for him to help people.

Young entrepreneurs have no idea of the trouble they might get into when they are starting out. Its not possible for them to know everything about the line of commerce they are about to enter on their own. The consequences of their natural ignorance can sometimes be dire. Consequently, it is more complicated to undo a problematic situation than to avoid it in the first place.

Nevertheless, if an entrepreneur seeks the right advice from the very beginning, there’s no reason for them to get into trouble. According to Dezso, the biggest complaint he hears from his clients is that other lawyers don’t understand their clients’ businesses. Dezso on the other hand wants to understand his clients’ businesses and perspectives. He has a desire to leave people better than when they first came to him seeking a solution to their problems. In his own words, Dezso wants to be ‘Their Trusted Advisor’.

Wolf Law Chambers

Not all lawyers have the innate ability and the right personality to make it as sole practitioners. Lawyers who possess such qualities cannot work under others for long and can only thrive when they work for themselves. However, when these lawyers enter the domain of sole practice, they face a multitude of unique challenges they are not ready for. Support is non-existent as a result of their isolation and limited networking opportunities. The Law Society provides certain resources, to help solo firms stay compliant, but they have no avenue of providing any personalized advice in light of the ever-evolving business landscape to individual lawyers. In terms of modern-day workspace flexibility, the options for a lawyer on his own are very limited. Sometimes it becomes practically impossible for them to go out and search for law-based developmental resources to further their practice.

To Dezso the idea behind the creation of Wolf Law Chambers came as a solution to all the problems discussed above, which are being faced by lawyers. The services available at Wolf Law Chambers are uniquely targeted for law professionals, in order to allow them to grow personally in their sphere. The networking opportunities at Wolf Law Chambers are incredibly advantageous for sole practitioners. All the available resources, connections and events, allows lawyers to seek counsel from others in their profession, without any prejudice and with the purpose of benefiting each other. All of this is being carried out by lawyers at Wolf Law Chambers, while retaining their status as owners of their own law firms.

All lawyers should seek every opportunity they can to enhance their practice.

Dezso Farkas

Future

For Dezso Farkas, the future is just as promising as his present. He’s already planning to launch his upcoming project; the Legal Innovation Centre. Legal Innovation Centre will act as a ‘technology incubator’ to mentor start-ups in areas of legal research and development. According to Dezso, currently technology start-ups in the GTA West area are facing many challenges. There is a definite need for a facility like Legal Innovation Centre. The center will alleviate issues using their 3-step assistance plan; finding funding programs, providing a collaborative space and introducing start-ups to an already established network of industry experts. Legal Innovation Centre will focus resources on technological innovations which aim to shape the legal industry.

5 ways to effectively market yourself in a legal practice

In today’s market, competition is generally high. How we present ourselves to the world can make a significant impact on the success of our firm or practice. So here are the 5 ways to effectively market yourself in the legal market. 

We made sure to keep our list simple and easy to remember:

These are the traditional five senses. It should be the goal of the effective legal firm or practice to reach all five senses of potential clients through various means. 

Vision

It is important for the practitioner, or any business for that matter, to reach the potential client’s line of sight. There are many ways to do this. In today’s market, however, one of the most effective means for catching the eyes of the potential client is by having a clear and simple website which is easy to use and, most importantly, is on the first page of a Google Search. Also, if it is known that a specific group of potential clients watch a particular channel on TV, try to put an advertisement on that channel. If your potential clients are likely to spend more time on YouTube, make a YouTube channel or advertisement

But don’t just stop after that. A marketing campaign is not just outside the office but inside as well. If a potential client walks into the office, it is important that such office looks good (check out our article on the Perfect Office). Furthermore, it is important that the practitioner looks good! So make sure to dress to impress

Reaching the client’s line of sight and gaining their attention and interest is very important, for our memory works best from visual stimuli. In other words, we are generally better at remembering or recalling what we have seen attentively rather than what we smell or touch. So make sure to reach the eyes of potential clients and show them your value. 

Hearing:

Human beings are generally good at remembering what they have heard if they are attentive to what they hear. So it is important for any practitioner or firm to be heard in a way that draws attention. 

There are many ways to be heard. Today, podcasts are quite popular. It may be beneficial to attend someone’s podcast and speak with clarity and specificity. Another option is to place an advertisement on a radio channel if it is known that potential clients will be listening to that channel. 

However, the best and most effective way to be heard is to be a good lawyer or firm. If the work you do is exceptional, it is possible that clients will speak on your behalf by placing a good review. Reputation matters a lot in this field. There is nothing better than a potential client saying, “I hear this lawyer is amazing at what he does.” 

Smell:

In contrast, there is nothing worse than a potential client saying, “something smells fishy.” Trust is crucial to a legal practice not only from a legal standpoint but also from a business standpoint. In addition to the metaphorical sense of smell, it may also help to literally smell good. 

Olfactory marketing is a relatively underdeveloped field of sensory marketing. However, there is evidence that the scent of a person may have an impact on first impressions. And if first impressions are good, then the following impressions tend to also be good. Thus, to enhance the likelihood of good impressions, make a good first impression by investing in scents which make the office smell good and make the lawyer smell good. 

Taste:

Did someone say, “free pizza?”. It is common knowledge that our actions sometimes follow our stomachs. So to be more welcoming to potential clients or current clients, make sure to invest in some refreshments for clients entering the office. Offer them coffee or tea during meetings, give them refreshments, etc. Be hospitable. Sometimes, it could even help to take a potential client to lunch. 

Touch:

Be careful with this channel of marketing. There are some clients who are huggers and some who are not. But nothing beats a strong and confident handshake. Since first impressions matter, and a handshake significantly affects first impressions, handshakes do matter. 

But handshakes are not only important for first impressions. It can also be important when saying goodbye. Last impressions can sometimes be just as important as the first. So make sure, after speaking to a potential client, to give a good handshake when saying goodbye for the day. 

Sensory Marketing (Scrap Notes)

(what do customers see?)

  • Create a great website 
  • Have a nice office 
  • Show them a video
  • Get on Google Page 1
  • Dress to impress 

  • Speak with specificity and simplicity 
  • Have others speak for you
    • “I heard this guy is amazing” 
    • Reputation matters
  • Podcasts

  • Metaphorical
    • Upon interacting with you, the last thing a customer should think is, “something smells fishy” 
  • Literal 
    • Get better perfume 

  • Lunch & Learn
  • Be hospitable 
  • Take clients out for lunch

  • Don’t be creepy
  • Play it out carefully
    • Some people are huggers and some people have a strict “no touching” policy
  • But a good handshake can make a great difference
    • Good, strong, confident handshake 

THE BENEFITS OF BEING A SOLE PRACTITIONER

In 2013, 77% of Ontario’s law firms were comprised of sole practitioners and the number of new lawyers choosing that route is still consistently increasing. This figure is no coincidence as becoming a sole practitioner definitely encompasses countless benefits to one’s career. Choosing your line of work and narrowing that further into a specialization is truly fulfilling for any professional. Lawyers who practice as sole practitioners are able to effectively explore various practices without seeking permission or approval from others. This flexibility also corroborates opportunities for expansion and innovation. It paves the way for lawyers to constantly keep an eye out for procedures that need improvement and implement new ideas that look to accomplish exactly that. This can make a sole practitioner’s work interesting and engaging, shifting focus away from the pressures that inevitably exist in the profession. In doing so, the results produced by sole practitioners preserve the highest standards for their clientele and practice. It is these results that ensure one’s business is continually growing. Now, let’s explore the top and most important benefits of being a sole practitioner.

Flexible Work Schedules

The 17th Volume of the Robert Half: Demand for Skilled Talent report outlined incentives that workers want the most. On the top of that list was flexibility for work hours, with 88% of employees surveyed citing it as the perk that they most desire. This figure is also indicative of a lack thereof in the respective fields of the participants in the study. For sole practitioners flexibility is apparent as professionals work around their own schedules and allocate work hours based on priorities. The ability to prioritize one’s workload is also extremely beneficial as sole practitioners are able to dedicate time to other fundamental areas of their practice. Such practices include but are definitely not limited to marketing, workshops/conferences to further advance one’s knowledge and skill set, networking events, and/or educational certifications. Doing so requires time and effort, which can be difficult to allocate unless you are dictating your own schedule.

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Return on Investment

Sole practitioners work for themselves and reap all the benefits of their efforts. The harder they work, the more rewarding it is. Their salary is not administered under someone’s payroll, so the net gain of a sole practitioner depends on their ability to attract clientele and manage their legal needs effectively. Sole practitioners do not have to manage an immense workload and worry about their residuals staying the same. The more time and effort they invest into their practice, the greater the yield of results.

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Opportunities to Experiment

Whether it is implementing new technology, diversifying your line of work, or integrating new ideas for enhancing productivity, sole practitioners can choose to experiment without seeking permission from a higher authority. In the legal field, technology is changing the way traditional law firms have worked. For example, Dezso Farkas, of Farkas Legal Professional Corporation based out of Mississauga has been cited implementing innovative technology to emphasize the importance of efficiency as a sole practitioner. Using technological applications such as Skedda, Slack, and Envoy enable his firms daily practices to run very smoothly. These communication applications allow clients, the lawyer, and staff to engage in ways that are very advanced. Individuals can complete tasks for each other and receive communicate throughout the day without being in the same vicinity. Deanna Hayko, a partner at iN STUDIO in Toronto believes that office spaces more open to the idea of a neighborhood environment are able to allow for increased mentorship and inclusiveness.

A prime example of this environment is a chambers located in the heart of Mississauga. Known as Wolf Law Chambers, this office has become a community of lawyers working independently as sole practitioners. This is a new approach to the traditional firm and allows for inclusivity between lawyers on different matters that may intersect different areas of practice. Lawyers at this chambers are also able to interact and become part of a community of professionals. This stimulates growth and provides sole practitioners with an opportunity to share resources to resolve legal matters.

DEZSO FARKAS

Service

Clients are more informed than ever with the help of the Internet, so it is important for lawyers to dive into niche markets to better serve their clients. By becoming a sole practitioner, lawyers can figure out their passions and dedicate their services accordingly. This flexibility allows lawyers to serve their clients better and in turn, ensure client satisfaction. By being able to devote more time an effort to individual clients, the client always remains the priority for a sole practitioner. Sole practitioners are able to concentrate on each individual matter effectively without the concern of being bombarded with work they do not want to complete, paving the way for excellent client and lawyer relations.

Closing Thoughts

In summary, being a sole practitioner presents a vast amount of benefits for lawyers looking to operate with flexibility, gain high returns on their investments, have complete control of their work, experiment with new ideas to improve their practice, and serve their client base with the utmost sincerity. Sole practitioners are in complete control of everything that follows along with their practice and they are in charge of what they want to do in each and every matter they pursue. They are able to choose their line of work by investigating and streamlining their passions in law. Also, sole practitioners can constantly brainstorm new strategies that will improve their practice and ensure clients remain extremely satisfied with the exceptional service they are able to receive. With that being said, if you are a lawyer or plan on becoming one, I urge you to give becoming a sole practitioner a great deal of thought.

-Narvir Goindi

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Mapleview v Papa Kerollus: Erring on the side of fairness when adjudicating commercial leases

Mapleview-Veterans Drive Investments Inc. v Papa Kerollus VI Inc. (Mr. Sub)2016 ONCA 93 [Mapleview], a case released yesterday by the Ontario Court of Appeal (“ONCA”), is the latest pronouncement on interpreting commercial lease provisions. While the outcome of the appeal is understandable given the facts relied upon by the parties, it causes concerns not only for how future cases will be interpreted, but also for the bargaining power it bestows onto commercial landlords at the expense of fairness for commercial tenants.

The case centres on the contractual right of Papa Kerollus VI Inc. (the “Tenant”) to elect to renew the lease for an additional term by a certain deadline. In this case, the contract stipulated that the tenant must comply with several pre-conditions to be eligible to exercise this right. A key pre-condition was that any “additional rent” due under the agreement could not be in arrears. Feeling like Mapleview-Veterans Drive Investments Inc. (the “Landlord”) was improperly accounting for additional rent due and unfairly demanding higher payments in an attempt to squeeze it out, the Tenant disputed the amount due. In turn, the Landlord held the Tenant to be in default and denied its right to renew on that basis. While the applications judge was sensitive to the circumstances of the alleged default, the ONCA found the dispute to be irrelevant for determining whether the pre-conditions to exercising the renewal option had been met. In doing so, it further opened the door for future landlords to demand unreasonable amounts from their tenants, knowing that even a legitimate dispute by the tenant could not preserve its ability to hang on to its lease and continue operating its business. This in turn could lead to increased predatory conduct towards less sophisticated commercial tenants.

Issues and Reasoning

Although the Landlord in this case denies having an agenda to, in effect, get rid of the Tenant at the end of the lease, the facts of the case more than point in that direction. In any event, the facts depict a long-standing dispute implicating distrust of the Landlord by the Tenant and suspicion of bad faith conduct.

Of key importance is the wording of Clause 2 in the lease, which states: “provided that the Tenant had paid the rent and all other sums payable under this Lease when due and, provided the Tenant has performed all other covenants under the Lease as and when the same are required to the performed, the tenant shall have the option to renew for one further term of five years.”

The issue at the lower court and at the ONCA was whether the Tenant complied with the above clause with respect to paying the “additional rent” due under the agreement, which consisted of the Tenant’s percentage share of taxes, maintenance, and insurance (“TMI”). As mentioned, these amounts were disputed by the Tenant on the basis that its percentage of TMI was not being accurately allocated and that the Landlord was attempting to collect an unreasonable amount for these costs in advance.

The applications judge in the lower court acknowledged the relevance of the dispute to whether the Tenant was able to comply with the pre-conditions set out in Clause 2 of the lease. He ultimately held that once a judicial determination of any arrears owing was made, the Tenant would have 60 days to pay—at which point the pre-conditions in the clause would be satisfied, allowing the Tenant to validly elect to renew the lease. The applications judge concluded at para. 40 of his decision that “a tenant is entitled to know with some degree of accuracy what arrears exist, so that it can put itself in a position where it is not in default when exercising its renewal right.” In effect, he found that compliance with the clause was in some cases contingent on the Landlord and Tenant agreeing on the quantum of what those preconditions are, in this case the existence of any arrears.

The Court of Appeal took a completely different approach. It held that the applications judge erred by giving any relevance to this dispute and that the only issue was whether the arrears demanded at the time was paid by the Tenant or not. It based this holding on other clauses in the agreement, namely clauses 3.C. and 10 through 13, which required the Tenant to make percentage payments towards TMI on a monthly basis and “upon demand” after receiving the Landlord’s estimate. Thus, as long as the Landlord made a demand for the funds pursuant to this provision, the Tenant must pay in order to avoid defaulting on the lease and losing its renewal right despite disputing the amount demanded. The ONCA likened this contractual provision to a promissory note that gives the holder an undisputed and unassailable right to the value of the note plus any interest

A Difficult Predicament

Some important context here is that commercial landlords have the ability to evict a commercial tenant at the end of a lease and gain possession of the leased premises. This is the case regardless of whether the tenant is conducting a viable business and wishes to continue. In some cases, predatory landlords have refused to renew a lease to a successful business, forcing it to leave. They have then occupied the space to operate the business under a new name or have re-leased the space at a premium, exploiting the former tenant’s leasehold improvements and customer base. While this occurs more frequently in the retail context, tenants typically negotiate a renewal clause to protect themselves against such a scenario.

Being in a position to make findings of fact and to assess credibility, the applications judge understood the dynamics of the scenario that had unfolded. He understood the near impossible predicament the Tenant was placed in and the ability of the Landlord to make continuous and escalating demands for more money under the agreement.

While the Court of Appeal took a strict and literal approach to interpreting the provisions in the agreement, it reached the right decision given the fact scenario at hand.. The decisive factor was that the Tenant admitted to owing a small undisputed sum of principle rent, less than $300.00. The Court commented that the provision in Clause 2 of the lease cannot be interpreted as permitting the Tenant to pay almost all of “the rent and all other sums payable under this Lease when due.” It was required to pay every penny. Fair enough.

However, in principle, the court went much further than this. The broader principle evolving from this decision is concerning, especially since the case could have been decided alone on this small undisputed rent sum. The Court went as far as holding that the existence of any dispute is irrelevant and that a tenant is required to pay any amounts demanded by the Landlord to avail itself of the renewal clause. Not only is this is rather harsh, but it is problematic because the real issue is the proper interpretation of the clause that permits the Landlord to make demands for increased payments and in turn obligates the Tenant to pay them. The ONCA’s Promissory Note analogy in this case fails because, unlike the note, the quantum of what is due and payable is not established as it is on the face of the note. For the purpose of reaching a fair decision, the ONCA should have interpreted the limits of such a clause; after all, it had relied upon it in principle. It is unclear whether such clauses in the context of commercial lease agreements truly entitle the Landlord to demand whatever it wishes, especially when its goal is to get rid of the tenant and re-lease the space or continue the Tenant’s business. Surely, such ‘on demand’ clauses are attached to other provisions in the lease and are subject to considerations of fairness, reasonableness, and good faith. For example, if the Landlord anticipates that the cost of TMI is going to rise in the upcoming year, it would be properly entitled to demand higher payments towards TMI and credit any overpayments back at the end of the period in question. However, what if the Landlord demands three times its anticipated cost increase, leading to a dispute between itself and the Tenant? Taking a strict and literal interpretation of the right to make demands under the lease fails to articulate any constraints on the exercise of such a right.

Conclusion

By ruling that issues around the satisfaction of preconditions to exercising rights in commercial leases are essentially not disputable, the ONCA further opened the door for future landlords to behave unreasonably towards their tenants, precluding them from exercising key contractual rights such as the right to renew. This in turn could lead to increased predatory conduct towards less sophisticated commercial tenants. The ONCA could have endeavoured to interpret the “on demand” clause in the lease and articulated some parameters of reasonableness and fairness. This approach could better balance the contractual rights of landlords and tenants in the commercial leasing context.

BY DEZSO FARKAS · MARCH 13, 2016

PUBLISHED AT thecourt.ca