Landlord’s Duplicative Petition for Possession Dismissed as an Abuse of Process

The Dispute

Masita Korean Cuisine Ltd. (“Masita”) leased restaurant premises on Kingsway in Burnaby from Collingwood Investment Ltd. (“Collingwood”). The written lease ran for five years, to June 30, 2023, and named an individual as guarantor. It had no express right of renewal, so Collingwood said the tenancy became month to month. In August 2023, Collingwood agreed to sell the property. The sale depended on Collingwood confirming that it could end the tenancy. On September 30, 2023, Collingwood gave notice purporting to end the tenancy on November 30, 2023. Masita refused to leave. It said the parties had agreed to a new five-year lease running to June 30, 2028.

The Parties’ Positions

Collingwood first sued for possession. On November 29, 2023, it filed an action in the New Westminster registry against Masita and the guarantor, and applied on short notice for an order that Masita leave the next day. The tenant and the guarantor opposed that application, and the Court denied it. They then filed a response and a counterclaim based on the new lease. Collingwood never filed a response to the counterclaim, and it did not discontinue its action. Instead, on January 2, 2024, it filed this petition for a writ of possession under the summary procedure in sections 18 to 21 of the Commercial Tenancy Act. Collingwood conceded that the two proceedings dealt with substantially the same issues. Its new counsel suggested that suing first was likely a mistake, and denied any strategic purpose.

The tenant and the guarantor raised eight grounds of opposition. The Court needed to decide only one: abuse of process. They argued that Collingwood had brought two proceedings against the same parties for the same relief. Having defeated the short-notice application and filed a counterclaim, they were now forced to defend a second proceeding. They relied on Concord Kingsway Project Limited Partnership v Ivanhoe Cambridge II Inc, 2017 BCSC 282, where a petition that mirrored an earlier action was held to be an abuse of process. They also argued that the dispute was too complex for a summary procedure. Which lease governed was itself in issue.

The Court’s Decision

Justice Branch dismissed the petition at the first stage as an abuse of process. He found that Collingwood had brought the action first, that the action remained active, and that both proceedings involved the same parties, the same issues and effectively the same remedy. The action was also broader, because it included the counterclaim. The Court called Concord a strong precedent for the tenant and the guarantor. It rejected Collingwood’s argument that Concord differed because different parties had started its two proceedings. If anything, the case for abuse was stronger here, because Collingwood alone had created the overlap. The duplication may have resulted from error, but Collingwood had not discontinued its action or explained why in its evidence. Parallel proceedings also risked inconsistent results.

The Court accepted that proceeding by petition instead of the action would be unfair to the tenant and the guarantor. Having responded and counterclaimed, they were entitled to have the dispute decided in the action, where full pre-trial procedures suited the complex lease issues. The Court did not decide which lease governs or whether the tenancy ended. Those issues remain for the action. The Court held that the tenant and the guarantor were entitled to their costs of the petition, subject to any further argument on costs.

Key Lessons for Commercial Tenants and Landlords

• Tenants and guarantors can oppose a petition for possession at the first stage. Many tenants do not appear at that stage. Here, the tenant and the guarantor did, and the petition was dismissed before any second-stage hearing. A tenant served with a petition should get advice promptly and check for any other proceeding the landlord has started.
• Landlords should choose one procedure at the outset. A landlord can seek possession through an action or through the summary procedure under the Commercial Tenancy Act. Starting both for the same relief can lead to dismissal of the later one, even if the duplication was a mistake. A landlord that has already sued may still be able to use summary procedures within that action.
• A disputed lease may not suit a summary procedure. Where the parties disagree about which lease applies, or whether terms were agreed orally, the Court may find full pre-trial procedures appropriate. Keep lease drafts, renewal terms and agreed changes in writing.

The outcome of this petition turned on its procedural history and the evidence before the Court. A similar dispute may resolve differently.

This matter was conducted by Roy Kim, an associate lawyer at ATAC LAW, who acted for the tenant and its guarantor in opposing the landlord’s petition.