In Farm Boy Inc. v. Mobius Corp., the Ontario Court of Appeal upheld the trial Court's finding in favour of the Landlord and dismissed the Tenant's appeal. At issue was the interpretation of the phrase "Area of Premises", as it was not clearly defined in the Lease. The Lease required the Landlord to maintain a parking ratio of 5.5 parking spaces per 1,000 square feet of "Area of Premises".

The Tenant brought an action against the Landlord for a breach of contract claiming that the parking ratio was applicable to the entire Shopping Centre and therefore the parking ratio failed to provide the Tenant with the required number of parking spaces. The Tenant claimed its business suffered and led to a loss of profits. The Landlord took the position that the parking ratio only applied to the Tenant's Premises and not the entire Shopping Centre. Even if it was found that the parking ratio applied to the entire mall, the Landlord claimed that the Tenant was unable to provide sufficient evidence of actual damages suffered. The Landlord relied on Merger Restaurants (c.o.b) Shakey's Restaurant v. D.M.E. Foods Ltd. (c.o.b. Bonanza Restaurant), which showed that in the case of a proven breach of contract, damages cannot be recovered unless there is sufficient evidence proving that damages flowed from the breach.

The Court determined that the parking ratio only applied to the Tenant's Premises and not the entire Shopping Centre, but the Landlord was still found to be in breach of its parking ratio obligation. The Court noted that complaints regarding the parking ratio were generally temporary and that the parking lot generally accommodated the day-to-day needs of the Tenant's customers. In the end, the Court held that Tenant failed to prove that it suffered any loss as a result of the breach.

Based on this case, it would appear that Courts may consider the everyday use of parking lots. Even if landlords do not abide by terms of the parking ratio agreed to in a lease, they may fi nd themselves free of liability if the general day-to-day use of a parking lot does not hinder the tenant's customers. From a tenant's perspective, if parking is critical to your business then it would be prudent to bargain for a contractual remedy for the landlord's failure to satisfy a parking ratio (such as rent abatement or liquidated damages) to ensure your landlord has incentive to comply.

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