Both the Plaintiffs and the Defendant sought Summary Disposition. The Plaintiffs (tenants) sought specific performance for renewal of the lease with the Defendant (landlord). The Defendant sought termination of the lease. The lease consisted of a three page hand-written document. It was for a five-year term with a renewal for another five years. The nature of the business was expressed as “massage therapy” and was to be operated in a “first class reputable manner”, and the tenants were to “follow all the rules, regulations of the landlord, provincial and municipal governments”.

Master Schlosser, citing Hyrniak v Mauldin, 2014 SCC 7, and Windsor v Canadian Pacific Railway Ltd, 2014 ABCA 108, held that the starting point on a Summary Disposition Application is to examine the record to see if a disposition that is fair to both parties can be made on the record. This includes looking at the record and the dispute to decide whether it is essential to resolution to see the witnesses. If the answer is yes then the matter must proceed to Trial. If the answer is no then Court is to engage in the following six-step process:

1.         The Court is to presume that the best evidence from both sides is before the Court: Canada v Lameman, 2008 1 SCR 372.

2.         The Court is to determine if any negative inferences should be drawn from the absence of any evidence.

3.         The Court is to determine if the evidence presented is admissible.

4.         The Court must determine if there is a conflict in the evidence and, if so, whether (a) the conflict has been resolved on cross-examination: Janvier v 834474 Alberta Ltd, 2010 ABQB 800 or (b) whether the conflicting evidence is purely self-serving and otherwise unsupported: Guaranty v Gordon, [1999] 3 SCR 423.

5.         The Court must then examine the evidence. Master Schlosser cited the recent Ontario decision of Pammett v Ashcroft, 2014 ONSC 2447 for the proposition that the Court may assess the sufficiency and reliability of evidence without using enhanced fact-finding powers. Also cited was Tottrup v Clearwater Municipal District (99), (2007) 68 Alta LR (4^th) 237 and Gayton v Lacasse, 2010 ABCA 123 for the proposition that assessing the sufficiency of the evidence will involve considering whether the issue can be fairly decided on the factual record.

6.         The Court must then determine in relation to a Plaintiff seeking summary disposition, whether all of the elements of the cause of action are proven and the Defendant cannot maintain a defence; and in relation to a Defendant seeking summary disposition, whether the Plaintiff cannot prove an essential element of the cause of action, or whether the Defendant has a complete defence.

The Defendant, ostensibly, took the position that the renewal was invalid as the tenants were in default when they purported to renew the lease. However, no specific evidence of this was provided and Master Schlosser held that the lease had been renewed.

The Defendant argued that the failure to pay rent, operating the premises for the purposes of prostitution and issues with the HVAC and sprinkler systems were all defaults by the Plaintiffs that justified termination of the lease.

In relation to rent, Master Schlosser set out what the rent would be going forward based on the lease, and ordered the Plaintiffs to pay arrears within 30 days or the lease would be terminated. In relation to the use of the premises for prostitution, Master Schlosser held that the lease speaks to legality not morality and the lease would not be terminated based on the state of the law (prostitution laws being in flux) and the evidence before the Court. In relation to the HVAC and sprinkler systems, Master Schlosser held there was insufficient evidence to determine if there had been a breach of the lease.

The Plaintiff’s Application was granted, and the Defendant’s Application was dismissed.