Gap Canada has been ordered to pay a Kingston landlord over $208,000 in rent arrears after failing to fulfill rent payments in 2020. Gap announced that it would close its Kingston location in September 2020.
The decision, released on September 20th, was made following hearings in Kingston on August 25th, 2021. The hearing was heard by the Ontario Superior Court.
Kingston’s Gap had been leasing the 230-234 Princess St. location since 1994. The store was forced to close on March 24th after the Government of Ontario declared a provincial state of emergency and required non-essential businesses to shut down. The Government of Ontario says it made the decision to prevent the further spread of COVID-19.
Gap was unable to reopen until restrictions were lifted in May 2020.
According to the Braebury Development Corporation, who are the landlords of the Princess St. property, the business did not pay rent for April or May 2020. They then made partial rent payments from June 2020 to September 2020.
Gap Canada argued that the emergency order constituted a “force majeure,” allowing Gap Canada to frustrate its contract with the landlord.
While the judge agreed that Gap Canada’s lease with Braebury did constitute a “force majeure,” the contract clause didn’t excuse the business from late rent payments.
The judge also found that there wasn’t a frustration of the contract. “[After the emergency order], Gap would have been able to operate its store subject to remaining public health measures. While this was not an insignificant disruption to Gap’s retail operations, it does not appear that those disruptions occurred to the extent that the lease was frustrated,” wrote the judge in their decision.
Following the decision, the parties have committed to exchanging costs summaries following the hearing.
