Clause that precluded landlord from adversely affecting solar energy project did not create easement

Real Property - Landlord and tenant - Nature and elements of lease

Landlord inherited lease between tenant and original landlord when it purchased two properties (61A and 60A) from mortgagee in possession. Lease governed rooftop and rights-of-way at 61A to access solar power generation project. Tenant obtained declarations that lease was effective and binding, tenant owned equipment on premises, landlord wrongly prevented tenant from accessing property and was awarded damages. Application judge ordered landlord to maintain tenant's connection to local electrical utility system via transformer in building at 60A (which building was not mentioned in lease), to not receive additional rents for connection, and that tenant had right to install inverters in 61A electrical room. Landlord appealed. Appeal allowed in part. Application judge erred in law by reading lease as requiring connection to transformer at 60A be maintained, but her interpretation of lease as permitting tenant to install inverters in 61A revealed no error and was entitled to deference. Application judge interpreted clauses in lease which gave tenant right to make necessary connections to local electrical utility system and which provided landlord covenanted not to conduct maintenance that would adversely affect solar energy project as extending leasehold interests to include 60A, but in doing so she failed to give effect to all relevant provisions in lease which clearly limited leasehold interest to 61A. Clause which precluded landlord from engaging in activities that adversely affected solar energy project could not be construed as creating easement, right-of-way, or other interest in land not subject to lease. Application judge provided cogent reasons in support of her conclusion rejecting argument that lease did not permit inverters to be installed anywhere other than on roof.

Nissa Corporation v. Enviro Park Solar Ltd. (2019), 2019 CarswellOnt 10936, 2019 ONCA 563, K. van Rensburg J.A., C.W. Hourigan J.A., and Grant Huscroft J.A. (Ont. C.A.); reversed (2018), 2018 CarswellOnt 17025, 2018 ONSC 5750, J. Copeland J. (Ont. S.C.J.).

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