Although the pandemic may now seem like a thing of the past, the government measures put in place continue to generate a lot of ink, particularly with regard to the application of the legal principle of force majeure (act of God).

Even though back in July 2020, the Superior Court established several applicable principles in its judgement in the case of Hengyun International vs. 9368-7614 Quebec inc.[1]
(Hengyun ), some clarifications continue to be made by the courts. The recent Immeubles Redbourne Southshore Inc. vs. Soutex inc.[2] (Redbourne) decision, rendered by the Court of Quebec, is a good example.

In that case, the matter to be decided was whether a consulting engineering firm leasing office space should be required to pay rent to the landlord for three periods totalling 340 days, a period during which it had to either suspend or reduce its activities, in compliance with health measures imposed by the Quebec government.

In other words, the court had to determine whether the lessor or lessee should bear the economic consequences of the pandemic crisis.

Although that issue had already been addressed in Hengyun, keep in mind that the initial ruling applied only to the period of total lockdown imposed by the health emergency (March to June 2020).

In Redbourne, the court had to determine whether that reasoning also applied to periods when health measures were relaxed, but still restricted use of the leased premises to a threshold of 25% of its normal occupancy.

The Court of Quebec reached essentially the same conclusion in the Hengyun case as the Superior Court. In both cases, the court held that health measures preventing access to commercial buildings constituted a case of force majeure, which exempted the lessor from fulfilling his obligation to provide the lessee with peaceful enjoyment of the leased premises. However, if the landlord is released from his obligation, he cannot demand correlative performance by the tenant, i.e. payment of the rent.

Consequently, in Redbourne the court arrived at the conclusion that the tenant suffered a 75% loss of use of the leased premises during the periods of reduced restrictions, given the overall impact of the constraints on its operations.

Indeed, after analyzing the nature of the consulting engineering firm's activities and the context that led to the signing of the lease, the court determined that it was in order to create a place for direct exchange among professionals and interactions with clients that the tenant signed the lease in May 2018.

However, the court determined that the restrictions, even when reduced somewhat, still significantly limited the tenant's ability to use the premises for that purpose. Moreover, the fact that the landlord provided access to the building in a context where no tenant could carry out his activities or render his services without contravening the health measures in place (thus exposing himself to penal sanctions and penalties), is not equivalent to providing use of the premises.

In fact, the court criticized the landlord for even attempting to raise that argument, which the judge described as sophistry.

We therefore conclude from the Redbourne case that the periods of lighter restraint in recent years gave rise to a balancing act in terms of weighing the tenant's level of enjoyment of the leased premises. To make that determination, the court will analyze the tenant's needs within the leased premises based on the nature of the services the tenant provides, the context in which the lease was entered into and the reasonable expectations of both parties. Depending on the outcome, the tenant will be required to pay rent, but commensurate with the determined level of enjoyment.

Establishing the extent of the level of enjoyment is a delicate exercise that must be done on a case-be-cases basis. We will try to provide assistance and clarification for you in that regard. 

Pierre-Olivier Bouvier-Leblanc, lawyer

[1] 2020 QCCS 2251

[2] 2023 QCCQ 249.